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, 2012 (July 1, 2012 to December 31, 2012)

Contents
Greetings from Naoki Shibatsuji, Executive Director of Invincible Investment
Corporation and President & CEO of Consonant Investment Management Co., Ltd.
Summary of Financial Results
Highlights of Performance
Activities during the 19th fiscal period ended December 2012
Introduction of 24 Newly Acquired Properties
Portfolio Overview
I.
Asset Management Report

1
3
4
6
8
16
21

II.

Balance Sheet

44

III.

Statement of Income

46

IV.

Statement of Unitholders’ Equity

V.
VI.

Notes
Statement of Cash Distribution

47
48
61

VII.

Statement of Cash Flows (Reference Information)

62

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

Invincible

Investment
Corporation

Greetings from Naoki Shibatsuji, 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 19th period (covering the period from July 1, 2012 to December 31, 2012).
With the objective of providing unitholders with stable cash flows over the medium to long term,
we have taken various measures for securing a stable financial foundation and achieving our
growth strategy, such as the merger, the invitation of a new sponsor, a capital increase via thirdparty allotment, debt refinancing, and implementation of measures for internal growth.
During the 19th period we not only achieved internal growth but also, for the first time in four
years since September 2008, external growth. Using the proceeds of JPY 12,510 million raised
from new borrowings and the refinancing of existing loans, together with JPY 1,533 million infunds on hand, we acquired 24 new residential properties (for an acquisition price of JPY 14,043
million).
Additionally, a general meeting of unitholders was held in November 2012, at which our articles
of incorporation were revised, reducing asset management fees and making it possible to set
reasonable distribution even in the case the conduit requirements (Note) are not met.
As a result of these activities, for the 19th period operating revenues totaled JPY 2476 million, a
JPY 299 million increase over the last fiscal period, operating income totaled JPY 1,084, or a
JPY 190 million increase, ordinary income was JPY 114 million, or a JPY 11 million decrease,and net income was at JPY 114 million, a decrease of JPY 13 million, while distribution per unit
was JPY 117, a decrease of JPY 83 per unit from the last fiscal period.
With respect to the amount of distribution per unit, due to the recognition of one-time expenses
associated with the acquisition of new properties, including loan-related costs JPY 120 million,
the amount of JPY 117 per unit was below the previous level of approximately JPY 200 per unit.
However, in terms of contribution, distribution per unit from net income was JPY 85 (as opposed
to JPY 95 for the previous fiscal period), and the distribution per unit from reversal of surplus
resulting from the negative goodwill attributable to the merger was JPY 32 (as opposed to JPY
105 for the previous fiscal period). Thus, on a net income basis the decrease compared to theprevious fiscal period was only JPY 10 per unit.
1

Invincible

Investment
Corporation

INV believes that through its new acquisitions of 24 residential properties, it has substantiallyexpanded the size of its assets and established a strong revenue base. Commencing with the next
fiscal period (ending June 30, 2013), we expect it will be possible to realize the same level of
distribution as in prior periods over the medium to long term without utilizing the surplus. From
this perspective, we believe the activities undertaken during the 20th period are of greatsignificance for INV.
In terms of measures going forward, we expect to continue to focus on internal growth, withleasing strategies for not only occupancy rates but also rent increases. In addition, we willcontinue to consider additional reductions in costs, which are already at a low level. In addition,
to prepare for future refinancings of borrowings, we will seek to increase the asset value of
properties for collateral, strengthen our existing relations with financial institutions and forge
new relations with other financial institutions.
We look forward to receiving the continued support of all of our unitholders.
(Note): Unlike normal operating companies, investment corporations are granted a deduction forcorporation tax for profit that is distributed to unitholders, so long as certain conduit
requirements are satisfied. Thus, taxes are applicable only for the unitholders that receive such
distributions, eliminating double taxation. One of the conduit requirements is called the“payment distribution requirement,” which requires distribution of 90% or more of the
distributable profit. INV has losses carried forward for tax purposes of JPY 20,561 million (as ofDecember 31, 2012) and thus expects that even if the conduit requirement is not met, for acertain period, no corporate tax will be payable.
Naoki Shibatsuji
Invincible Investment Corporation
Executive Director
Consonant Investment Management Co., Ltd
President and CEO
Fixed Distributions

Forecast Distributions

The 19th fiscal period(the fiscal period ended
December 2012)
The 20th fiscal period(the fiscal period ending June2013)

Per investment unit
JPY 117
Per investment unit
JPY 200

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, 2011
to June 30,
2011

Period from
July 1, 2011
to December 31,
2011

Period fromJanuary 1, 2012
to June 30,
2012

Period from
July 1, 2012
to December 31,
2012

2,277,374

2,202,448

2,176,839

2,476,430(52,342)(3,466,417)

125,981

114,784(1,308,522)(2,476,155)

128,175

114,179

28,571,173

32,967,658

32,826,175

32,670,697

73,165,258

68,083,586

67,698,887

80,200,022

44,87424,451

24,34624,231

39.1

48.4

48.5

40.7

200

200

200

117

636,695

1,348,292

1,348,292

1,348,292

Note: Figures are rounded down to the indicated unit. “Net Assets per Unit” are rounded to the nearest yen.

Operating Revenue
2,476,430 thousand yen

Operating Income
114,179 thousand yen

Distribution per Unit
117 yenUp 299,590 thousand yen fromprevious period (13.8% increase)(Note 1)Up 13,995 thosand yen fromprevious period (10.9% decrease)

Up 83 yen from previous period(41.5% decrease)2,277,374

2,202,448

2,159,892 2,125,544

2,176,839(Note 2)2,476,430
01/01/11
to
06/30/11

01/01/11
to
06/30/11

07/01/11
to12/31/11(Note 1)

(Note 1)01/01/12
to
06/30/12

07/01/12
to12/31/12

07/01/11
to12/31/11(1,308,522)(Note 2)
128,175

114,179

200

200

200

(Note 2)
117

01/01/12
to
06/30/12

07/01/12
to12/31/12

01/01/11
to
06/30/11

07/01/11
to12/31/11

01/01/12
to
06/30/12

07/01/12
to12/31/12(2,476,155)

Unit: Thousand yen

Unit: Thousand yen

Unit: yen

Note 1: The figure in vertical axis □ of the "Operating Revenue" bar chart (Fiscal year end 06/30/11 and 12/31/11) excludes the effect of
New Edobashi Building which was sold as of October 21, 2011.
Note 2: The forecast for the fiscal period ending June 30, 2013 is operating revenues of JPY 2,761 million, ordinary income of JPY 280
million and distribution per unit at JPY 200.

3

Invincible

Investment
Corporation

Highlights of Performance
Statement of Income（from July 1, 2012 to December 31, 2012）
1Revenue＋（units：millions of yen）

・Rental Revenues (rent, common area services, parking lot services, etc.）
Operating Revenues
・Property Related Expenses (Building maintenance, taxes, insurance, depreciation, etc.)
・Directors' Remuneration

2Expense－

・Asset Management Fees
・Asset Custodian Fees
・Administrative Service Fees

・Other Operating Expenses

Operating Expenses
1Revenue＋

2Expense

－

1,156
4
130
3
24
72

1,392

・Interest Revenues, Miscellaneous Income
Non-operating Revenues

3・Interest Expenses

763
208
1

・Finance Related Costs

・Investment Unit Issuance Expenses, etc.

Non-operating Expenses

2Expense－

₃ Income

＝

2,476

972

・Corporate Tax, Residential Tax and Business Tax
Corporate Tax, etc.
・Net Income
Net Income
Revenue
Operating revenue

114
Non-operating revenue

56.1％

Expense

0.1％

99.9％

Corporate tax, etc.
Operating expense

0

0.0％

Non-operating expense
Net income

4.6％

The Statement of Income shows the revenues and thecorresponding expenses from the beginning to the end of
the fiscal period and is sometimes referred to as acompany’s operation report.

39.2％

Income(Note) The above ratio is calculated based on the total amount of revenue.

1Revenue is mainly from monthly rental revenues

2,476 million yen or 99% out of the total revenue (2,479 million yen) for fiscal period ending
December 2012 was derived from rental revenues such as rent and common are fees.

2 1Various expenses are deducted from the total revenue amount

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₃ The net income (distributable income) for this fiscal period is calculated by deducting theexpenses in 2 above from 1 above.
With respect to distributions, by utilizing a portion (JPY 43 million) of the surplus from the previous fiscal period (June 2012), distributions totaled JPY 157
million, or distribution per unit of JPY 117.
With respect to distributions for the reporting period, pursuant to the Investment Corporationʼs distribution policy set forth in its articles of incorporation,
the distribution was set at above the 90% of distributable income set forth in the Special Taxation Measures Act, the distribution amount per unit was
decided at JPY 117.
(Note) The amount of distributable profit (JPY 174 million (*)) x 90% = JPY 156.6 million
The total amount of distributions for the period ended December 2012 was JPY 157.7 million, which exceeded the above calculation of JPY 156.6 million.
(*) The amount of distributable profit (JPY 174 million) = fiscal period net profit before taxes (JPY 114 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)

4

Invincible

Investment
Corporation

Balance Sheet (December 31, 2012)(Unit: millions of yen)

Operation

Current Assets(Cash and deposits)

Fund Raising Results

Current Liabilities

￥

4,564
2Liabilities

1Non-Current Assets

59.3%

・Tangible Assets(Real estate/real estatein trust, etc.)
・Intangible Assets(Accrued liabilities, advancesand current portion of long-term
debt, etc.)

1,161

Non-Current Liabilities(Long-term debts/long-term debts
in trust/long-term accrued expenses

Assets46,367100.0%(Software/trade marks)

Unitholders' Capital・Investments and other assets(Financing from unitholders/
capital surplus/unappropriatedretained earnings)(Long-term prepaid expenses/
guarantee expenses, etc.)

Net Assets

40.7%

75,63532,670

The right column of the balance sheet shows the “Current Liabilities” and “Net Assets” which sets forth how the fund israised and the left column shows the “Current Assets” which sets forth how the funds mentioned in the right column
were invested. The total amount in the right column and left column always match and are therefore called the balance
sheet.

1 Most of the current assets are non-current assets and a large portion of it is composed of tangible assets
such as real estate and real estate in trust.
The total amount of assets increased to JPY 12,501 million this fiscal period mainly due to the acquisition of 24 properties.

2
T The funds set forth in “Current Liabilities” include loans from financial institutions.
During the reporting period, in order to partially finance the acquisition of the 24 new properties, we engaged in arefinancing for a larger amount by repaying a portion of existing debt and concurrently taking out new long ‒term
borrowings in the amount JPY 12,510 million. In addition, we made two scheduled repayments of debt (Note 1)
totaling JPY 131 million. As a result, the interest-bearing debt as of the end of the reporting period was JPY 43,982
million, and the interest-bearing debt ratio was 57.6% (Note 2).
(Note 1) Rescheduled payments include partial repayment of the Syndicate Loan B of JPY 150 million per year
(JPY 37.5 million per quarter) and the Shinsei Trust Loan B of JPY 112 million (JPY 28 million per quarter).
(Note 2) 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

5Invincible

Investment
Corporation

6

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Investment
Corporation

7

Invincible

Investment
Corporation

Introduction of 24 Newly Acquired Properties

8

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Investment
Corporation

9

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Investment
Corporation

10

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Investment
Corporation

11

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Investment
Corporation

12

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Investment
Corporation

13

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Investment
Corporation

14

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Investment
Corporation

15

Invincible

Investment
Corporation

Portfolio Overview(as of December 31, 2012)
用途

Property Number

RentableUnits

1,771.13

98

Acquisition Appraisal
Price
Value
(JPY mn) (JPY mn)
1,110
1,251

2,681.94

60

1,229

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
64

A35

Grand Rire Kameido

Koto Ward, Tokyo

1,562.26

72

A36

Growth Maison Ikebukuro

Toshima Ward, Tokyo

952.891,015.34
1,368.57

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

A54

859

1.2

100.0

1,070

1,020

1,030

1.4

94.0

1,505

1,160

1,444

2.0

99.0

1,428

1,190

1,392

1.9

100.0

1,088

990

1,052

1.4

94.7

1,020

1,010

1.4

98.5

1,023

916

999

1.3

98.4

906

889

871

1.2

100.0

42

825

783

792

1.1

90.6

39

795

664

774

1.0

92.2

24

676

583

655

0.9

100.0

1,167.50

25

651

575

656

0.8

100.0

1,235.93

19

646

446

646

0.8

89.2

1,210.74

57

620

648

586

0.8

100.0

1,126.65

26

604

528

619

0.8

92.5

1,047.75

62

589

515

578

0.8

100.0

1,059

0.8

92.1

557

0.7

96.1

37

566

518

542

0.7

100.0

Funabashi City, Chiba
Prefecture

2,040.27

34

557

449

524

0.7

97.1

871.35

43

510

483

488

0.7

100.0

3,364.00

86

2,520

2,560

2,444

3.3

90.8

4,032.70

118

3,260

3,320

3,171

4.2

96.4

4,310.77

69

1,880

1,990

1,854

2.4

100.0

1,987.88

88

1,450

1,520

1,402

1.9

93.1

1,197.19

17

1,070

996

1,021

1.4

92.9

1,627.13

58

866

915

841

1.1

97.3

1,220.24

70

577

580

566

0.7

97.1

1,969.45

29

970

1,030

924

1.3

93.2

3,426.36

154

1,110

1,210

1,066

1.4

94.3

1,929.59

51

415

434

402

0.5

96.4

1,528.58

39

330

363

317

0.4

100.0

705.75

8

255

218

245

0.3

88.6

1,430.64

43

977

989

930

1.3

95.1

784.74

33

511

507

482

0.7

100.0

4,460.56

120

1,180

1,010

1,097

1.5

90.0

7,794.91

109

7,010

6,800

6,801

9.1

92.2

3,574.70

52

1,660

1,670

1,678

2.2

94.8

2,773.71

81

1,260

1,260

1,285

1.6

99.1

2,310.49

82

973

981

996

1.3

97.5

674

678

691

0.9

93.8

Arakawa Ward, Tokyo

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

Bichsel Musashiseki

Nerima Ward, Tokyo

A62

Lexel Mansion Ueno
Matsugaya

Taito Ward, Tokyo

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

A79

888

577

A61

A78

90.3

489

Towa City Coop Shinotsuka
Toshima Ward, Tokyo
II

A66

1.6

526

A59

A65

1,102

909

572

Casa Eremitaggio

A64

1,190

589

A56

A63

96.9

50

City House Tokyo Shinbashi Minato Ward, Tokyo

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

1.6

25

A51

A53

1,153

557.05

College Square Machiya

Winbell Kagurazaka

Investment Occupancy
Ratio
Rate

Yokohama City, Kanagawa 908.99
Prefecture815.76
Nerima Ward, Tokyo

A48

A52

Book Value(JPY mn)

Kita Ward, Tokyo

Cosmo Court Motomachi

Kobe City, Hyogo Prefecture

Revest Honjin

Nagoya City, Aichi
Prefecture

1,933.80

80

16

Invincible

Investment
Corporation用途(as of December 31, 2012)

Property Number

Name of Property

Residential

Location

Leasable Area(m2)

RentableUnits1,955.40

70

Acquisition Appraisal Book Value Investment Occupancy
Price
Value
Ratio
Rate
(JPY mn)(JPY mn)(JPY mn)
91.9
664
673
657
0.9

898.70

38

625

625

634

0.8

100.0

1,731.68

64

608

617

625

0.8

98.6

1,634.60

61

597

599

614

0.8

97.0

1,554.03

40

595

599

610

0.8

95.2

2,670.66

81

581

638

597

0.8

93.3

1,428.12

54

544

548

558

0.7

89.9

701.92

33

543

544

554

0.7

100.0

1,185.50

50

525

528

537

0.7

96.0

1,433.35

57

512

524

526

0.7

98.2

765.18

25

456

461

463

0.6

100.0

1,029.05

42

446

447

455

0.6

530.60

26

412

413

419

0.5

1,020.86

40

374

380

383

0.5

789.12

32

373

372

381

0.5

992.76

21

355

358

364

0.5

1,477.62

44

335

340

344

0.4

331

333

336

0.4

310

316

318

0.4

297

299

304

0.4

A80

Revest Matsubara

Nagoya City, Aichi
Prefecture

A81

Sun Terrace Minami Ikebukuro

Toshima Ward, Tokyo

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

A84

Revest Heian

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

A85

Vendir Hamaotsu Ekimae

Otsu City, Shiga Prefecture

A86

Salvo Sala

Osaka City, Osaka
Prefecutre

A87

Excellente Kagurazaka

Shinjuku Ward,Tokyo

A88

Luna Court Edobori

A89

Winntage Kobe Motomachi

Osaka City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

A90

Queen's Court Fukuzumi

Koto Ward, Tokyo

A91

Corp Higashinotoin

Kyoto City, Kyoto
Prefecture

A92

Belair Oimachi

A93

Siete Minami-Tsukaguchi

A94
A95
A96
A97

Shinagawa Ward, Tokyo

Amagasaki City, Hyogo
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
PrefectureWest Avenue

794.8040

Okasa City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

974.81

31

761.1828

Kunitachi City, Tokyo

A98

Little River Honmachibashi

A99

Prime Life Mikage

Subtotal

100.0
92.6
94.9
100.0
91.2
100.0
90.0
96.9
85.5

3,413

58,08356,237

56,845

75.3

95.4

Kindai Kagakusha Building

Shinjuku Ward, Tokyo

1,451.54

13

1,301

989

1,221

1.7

100.0

B9

Shinjuku Island

Shinjuku Ward, Tokyo

526.43

1

715

520

717

0.9

100.0

B14

Lexington Plaza Nishigotanda

Shinagawa Ward, Tokyo

6,033.58

11

4,880

4,200

4,827

6.3

100.0

B15

Cross Square NAKANO

Nakano Ward, Tokyo

2,145.00

45

1,060

935

1,041

1.4

54.2

B16

Ohki Aoba Building

13

816

593

749

1.1

100.0

B17

Lexington Plaza Hachiman

18

3,280

3,140

3,218

4.3

94.6

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

1

2,320

2,070

2,179

3.0

100.0

102

14,372

12,477

12,955

18.6

96.3

81.04

1

97

91

100

0.1

100.0

Office Buildings/Retail Facilities

109,585.97

B8

Subtotal
Stop Parking Kanda-Sudacho

C21

Bon Sejour Chitose Funabashi

Kanda sudacho, Chiyodaku, Tokyo
Setagaya Ward, Tokyo

2,342.17

42

685

734

666

0.9

100.0

C22

Bon Sejour Yotsugi

Katsushika Ward, Tokyo

1,962.87

62

652

681

631

0.8

100.0

C23

Bon Sejour Hino

Hino City, Tokyo

1,984.17

56

574

641

558

0.7

100.0

C24

Bon Sejour Musashi Shinjo

46

486

543

473

0.6

100.0

Bon Sejour Komaki

8,858.49

123

1,050

1,060

1,004

1.4

100.0

C26

Bon Sejour Hadano Shibusawa

3,435.79

100

681

616

647

0.9

100.0

C27

Bon Sejour Itami

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

1,710.43

C25

2,129.87

62

480

433

459

0.6

100.0

22,504.83

492

4,705

4,799

4,542

6.1

100.0

171.285.49

4,007

77,161

73,48375,342

100.0

96.2

Parking Lots/Seniors

C1

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

17

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Investment
Corporation

Characteristics of Portfolio

We acquired 24 residential properties which are geographically decentralized to stabilize cash flow,

lower the average age of the properties and reduce earthquake and economic risks.
The investment ratio is as follows.

18

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Investment
Corporation

19

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Investment
Corporation

Improvement of the Asset Value and the Profitability
The NOI was JPY 1800 million, an increase of JPY 236 million compared to the previous period due toimprovements in occupancy rate, cost reduction, internal growth and acquisition of new 24 properties.
In addition, the appraisal value increased for two consecutive periods. The appraisal value of the existing properties
increased by JPY 183 million compared to the previous period and the asset value of the new 24 properties
increased by JPY 51 million compared to the appraisal value at the time of acquisition.

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Investment
Corporation

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

Operating revenues

Note 1 (Thousands of yen)

15th
Fiscal Period
Jan. 1, 2010 toDec. 31, 2010
5,348,724(Rental revenues)(Thousands of yen)

5,348,724

2,277,374

2,202,448

2,176,839

2,476,430

Operating expenses(Thousands of yen)

10,590,560

1,477,031

2,612,417

1,282,766

1,392,258(Thousands of yen)

By Period
Calculated period

16th
Fiscal Period
Jan. 1, 2011 toJun. 30, 2011
2,277,374

17th
Fiscal Period
Jul. 1, 2011 to
Dec. 31, 2011
2,202,448

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

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

Operating Results

2,558,916

1,151,606

1,137,994

1,024,277

1,156,672

Operating income(Thousands of yen)

(5,241,835)

800,343(409,968)

894,072

1,084,171

Ordinary income(Thousands of yen)

(7,078,530)(52,342)(3,466,417)

125,981

114,784(Thousands of yen)

4,757,778(1,308,522)(2,476,155)

128,175

114,179

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

75,861,170
68.0
42,965,485

73,165,258(3.6)
42,596,425

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

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

80,200,022
18.5
43,982,500

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

30,156,658
55.4
19,134,417

28,571,173(5.3)
19,134,417

32,967,658
15.4
26,134,396

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

32,670,697(0.5)
26,134,396(c) (Thousands of yen)

276,962

127,339

269,658

269,658

157,750(Note 2) (Thousands of yen)

5.8

—

—

210.5

137.6

636,695(Property-related expenses)

Net income
Asset Condition
DivideTotal distribution
Dividend payout ratio(Thousands of yen)

Information per

Financial(d) (Units)636,695

1,348,292

1,348,292

1,348,292(b) / (d) (yen)(Note 3)47,36444,87424,451

24,34624,231

Distribution per unit
(Profit distribution per unit)(Excess profit distribution per unit)(c) / (d) (yen)
(yen)
(yen)

435
435
—

200
200
—

200
200
—

200
200
—

117
117
—

Return on assets(change over year)
Return on equity(change over year)
Capital ratio(change from last period)
NOI(Net Operating Income)(Note 4) (%)(11.7)(11.7)
19.2
19.2
39.8
(3.2)
3,754,420

(0.1)
(0.1)
(4.5)
(9.0)

(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

Number of investment units
Issued and outstanding
Net assets per unit

(Note1)(Note 2)
(Note 3)(Note 4)(Note 4) (%)(b) / (a) (%)(Note 4) (%)(Note 4) (Thousands of yen)

39.1
(0.7)
1,554,015

Consumption taxes etc. are not included in operating income.
Dividend payout ratio for the 15th, 16th and 17th Fiscal Periods are rounded to one decimal place.
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

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2

Operating Conditionsa.

Main trends in the Investment Corporation

Investment
Corporation

The Investment Corporation was established in January 2002 based on 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, theInvestment Corporation was listed on the Osaka Stock Exchange, and in August 2006 it was listed on the Real Estate
Investment and Trust Securities Section of the Tokyo Securities Exchange (Ticker Code: 8963). In August 2007, in order toconsolidate stock exchange trading and to reduce operational and management costs associated with multiple listing, theInvestment Corporation applied to delist from the Osaka Stock Exchange, and since then it has only been listed on the Tokyo
Stock Exchange.
Effective February 1, 2010, in order to help resolve concerns related to refinancing and other financial issues, theInvestment Corporation engaged in a merger by absorption pursuant to which the Investment Corporation was the surviving
entity and LCP Investment Corporation (“LCP”) was the absorbed entity (the “Merger”). Since the Merger, the Investment
Corporation sought to improve its financial condition principally through repaying debt from the proceeds of sales ofproperties.
However, the fund-raising environment surrounding the Investment Corporation continued to be extremely difficult,and due to the absence of any concrete path to repaying its debts or extending its maturity payment dates, there resulted inthere being a “Note regarding going concern basis” in its financial statements for the interim six months ended June 2010.
In order to avert such serious situation, and to secure stable earnings for the medium to long term, the Investment
Corporation deemed that it was indispensable to conduct a refinancing based on a significantly improved financial condition.
Thus, on July 29, 2011, the Investment Corporation issued new investment units with Calliope Godo Kaisha (“Calliope”), an
affiliate of Fortress Investment Group LLC (“FIG”) and together with its other affiliates, the “Fortress Group”), acting as theprincipal investor, and conducted a refinancing.
As a result, with respect to the financial report for the six months ended June 2011 announced on August 26, 2011, theInvestment Corporation was able to remove the “Note regarding the going concern basis”, and its financial condition has
stabilized.
As the next step to secure stable earnings for the medium to long term, the Investment Corporation acquired 24 newproperties (trust beneficiary interests in properties in Japan) (the “24 new properties”) on September 28, 2012, or during thesix months ended December 31, 2012 (the “reporting period”). In connection with the acquisition of the 24 new properties, inorder to fund the acquisitions and a portion of related costs, the Investment Corporation engaged in a refinancing, including
through incurring new debt in trust and increasing the existing loan amount. The Investment Corporation believes thatthrough the acquisition of the 24 new properties, and considering the net income based on the earnings of the properties
during the Reporting Period, an earnings base has been established for stable distributions comparable to earlier performance.
As of the end of the reporting period, the Investment Corporation owned 78 properties and had interest-bearing
liabilities of JPY 43,982 million, investment units issued of 1,348,292 units and unitholders’ capital of JPY 26,134 million.

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Invincibleb.

Investment
Corporation

Operational Environment and Performance
In the reporting period, although the Japanese economy continued to face difficulties, with factors such asreconstruction demand as the background, the economy showed a slight recovery (the July 2012 monthly economic report of
the Cabinet Office). As a result of deceleration in the global economy, the Japanese economy has again shown signs of
weakness (the December 2012 monthly economic report of the Cabinet Office).
With respect to the prospects for the future, it is believed that while conditions will remain weak for the time being, theJapanese economy will be supported by the continuing reconstruction demand and improvements in the overseas economies,
thus providing hope of another recovery. At the same, uncertainties in overseas economies remain high and continue to be adownward risk for the Japanese economy, and there is need for concern regarding the prospect for the employment andconsumption environment, as well as the impact of deflation (the December monthly economic report).
With respect to the real estate market, there were new listings of real estate investment trusts, and the market isbecoming more active, with continuing acquisitions of properties by J-REITs. In addition, according to the “Trend Report of
the Value of Intensively Used Land in Major Cities (the Land Value LOOK Report) (the 20th edition), third quarter of 2012”,
published in November 2012 by the Ministry of Land, Infrastructure and Transport, the number of areas with falling land
values is declining, and the number of areas with flat or increasing land values is increasing. In general, from a condition of“a balance between the number of areas increasing versus the number of areas decreasing” (19th LOOK Report, second
quarter of 2012), there was an improvement to “the number of areas increasing being above the number of areas decreasing,with in particular areas in the Osaka and Nagoya regions showing more areas with increases than those with decreases.”
Regarding investment properties, although there were differences among regions and types of properties as a result ofconcerns regarding deflation, employment conditions, corporate performance and the impact of the Great East Japan
Earthquake, in particular from the standpoint of earnings stability, there was a scarcity in relatively new residences above acertain size in popular areas in Tokyo, and competition for acquisitions continues to be very intense.
Regarding the residential rental market, demand in the Tokyo region continues to be strong and remains stable. In
addition, with respect to the luxury rental properties, which continued to decline after the Lehman shock, although rent levels
still remain weak, there are signs of recovery. In addition, in the Tohoku region, there is a scarcity of rental properties incertain areas due to residential demand resulting from the Great East Japan Earthquake. With respect to regions outside themajor cities that suffer from difficult employment conditions as well as older properties, there continues to be weakness,
including a lengthening of vacancy periods and continued decrease in rent levels.
Regarding the office building rental market, due to factors such as a reduction in the amount of business offices andconsolidation of offices resulting from the weak economic conditions and the decline and adjustment in demand, as well thecontinued new supply of office buildings in Tokyo, there has been no significant improvement in vacancy rates. However,with respect to certain businesses with strong operating results there are some signs of increased floor use and expansion.
In addition, as a result of the impact of the Great East Japan Earthquake, there is continued strong demand for buildings
with a strong ground foundation and superior earthquake resistance.
In such a market environment, the Investment Corporation acquired the 24 new properties with a view to increase theearnings of the portfolio, securing stable cash flow and diversifying risks (such as earthquake and economic risks). As aresult, as shown below, the Investment Corporation’s portfolio has achieved an improvement in quality.

23

Invincible

Investment
Corporation<NOI yield increase>
Prior period end (June 2012)

Reporting period end(December 2012)

5.0％

5.2％

NOI yield<Investment ratio by type of property to secure stable cash flows> (by acquisition price)
Ratio by type

Prior period end (June 2012)

Reporting period end(December 2012)

Residential

69.8％

75.3％

Residential properties tend to be smaller in size and have many different tenants, thus making it easier to diversify risk,
and the Investment Corporation believes that variations in rental revenues tend to be smaller than office buildings and otherproperties due to the more stable occupancy rates. In order to secure stable cash flows in the medium to long term, theInvestment Corporation seeks to expand investments in residential properties through the acquisition of the 24 newproperties. As a result, the investment ratio of residential properties increased, and the cash flow stability of the portfolio has
been enhanced.
<Investment ratio by geography to reduce earthquake and economic risks> (by acquisition price)
Geographic investment ratio

Prior period end (June 2012)

Reporting period end(December 2012)

Greater Tokyo Area（Note 1）

84.0％

73.9％

Kansai Area（Note 2）

0.8％

9.1％

Chubu Area（Note 3）

2.1％

6.2％

As a response to the earthquake and economic risks that increased with the Great East Japan Earthquake, there was an
expansion into investments to major regional cities, with a focus on the Kansai and Chubu areas. As a result of the acquisitionof the 24 new properties, the investment ratio of the Investment Corporation’s portfolio in the Greater Tokyo Area decreased,
and the investment ration in the Kansai and Chubu areas increased, thus diversifying risk.
(Note 1) The Greater Tokyo Area refers to Tokyo and Kanagawa, Chiba and Saitama Prefectures.
(Note 2) The Kansai Area refers to Osaka, Hyogo, Kyoto, Nara, Shiga and Wakayama Prefectures.
(Note 3) The Chubu Area refers to Aichi, Gifu, Mie, Shizuoka, Nagano, Yamanashi, Niigata, Toyama, Ishikawa andFukui Prefectures.
<Improvement in investment ration by property age>
Prior period end (June 2012)
Average age

13.2 years (Note 4)

As of new acquisitions

Reporting period end(September 28, 2012)(December 2012)12.3 years (Note 4)

12.5 years (Note 4)

The average age of the 24 new properties is 7.7 years. As a result of the acquisition of the 24 new properties, the age ofthe portfolio as a whole has improved.

24Invincible

Investment
Corporation(Note 4) Calculated as the weighted average age (by acquisition price) as of the relevant date (the end of the fiscal
period or the acquisition date).
Property Dispositions
The Investment Corporation did not engage in any property dispositions during the reporting period.
As of the end of the reporting period, the Investment Corporation had 63 residential properties, 7 office/retail buildings,
one parking lot and 7 senior facilities for a total of 78 properties. The aggregate acquisition price was JPY 77,161 million, andtotal leasable area was 171,285.49 m2).

In addition, the occupancy rate for the Investment Corporation’s portfolio as a whole was 96.2% as of the end of the reporting
period (as opposed to 95.1% as of the end of the prior period).

c.

Overview of Fund Raising
During the reporting period, in order to partially finance the acquisition of the 24 new properties, on the date of theacquisitions, the Investment Corporation procured a loan in trust of JPY 9,960 million and engaged in a refinancing for a larger
amount by repaying a portion of existing debt (Syndicate Loan A: repayment of JPY 10,850 million) and concurrently taking out
new borrowings in the amount of JPY 13,400 million as Syndicate Lona B with the same interest rate and no new collateral.
The interest rate for the new loan in trust (JPY 9,960 millin) is 1.9%, with maturities from 5.5 years to 7.5 years, resulting ina decrease in the Investment Corporation’s average interest rate (Average debt interest rate (Note 1): 4.407% as of the prior period
end and 3.964% as of reporting period end) and diversified repayment dates.
In addition, the Investment Corporation made two scheduled repayments of debt (Note 2) totaling JPY 131 million (JPY 65
million each), and as a result, the interest-bearing debt as of the end of the reporting period was JPY 43,982 million, and theinterest-bearing debt ratio was 54.8% (Note 3).
(Note 1) The average interest rate is the weighted average based on the number of days borrowed during the fiscal period,and has been rounded to the fourth decimal point.
(Note 2) Scheduled repayments include partial repayment of the Syndicate Loan B of JPY 150 million per year
(JPY 37 million per quarter) and the Shinsei Trust Loan B of JPY 112 million per year (JPY 28 million perquarter).
(Note 3) 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

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Investment
Corporation

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)

Date

Type of issue

January 18, 2002

Reference

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)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)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.

26

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Investment
Corporation

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)
Period15th Fiscal Period

16th Fiscal Period

17th Fiscal Period

18th Fiscal Period

19th Fiscal Period

Closing Month

December 2010

June 2011

December 2011

June 2012

December 2012

Highest91,70013,28012,830

7,160

6,540

Lowerst12,000

9,380

6,200

6,060

6,080

4

Distribution Performance
As a result of the above, for the reporting period, operating revenue was JPY 2,476 million, operating income was JPY

1,084 million, ordinary income was JPY 114 million and net income was JPY 114 million.
With respect to distributions, by utilizing a portion (JPY 43 million) of the surplus resulting from the negative goodwill(the “Surplus”) from the Merger on top of net income, it has been decided to have total distributions of JPY 157 million, or
distribution per unit of JPY 117. As a result of the acquisition of the 24 new properties, the Investment Corporation believes thatit has established an earnings base for stable distributions comparable to earlier performance. However, as a result of certain onetime expenses that were incurred in connection with the acquisition of the 24 properties, net income was not sufficient to make
distributions that would be comparable to earlier periods (distributions of approximately JPY 200 per unit). Accordingly, withrespect to distributions for the reporting period, pursuant to the Investment Corporation’s distribution policy set forth in its
articles of incorporation, the distribution was set at above the 90% of distributable profit set forth in the Special Taxation
Measures Act, and while emphasizing the securing of a stable distribution level in the medium to long term, the distribution
amount per unit was decided at JPY 117.
(Note) The amount of distributable profit (JPY 174 million (*)) x 90% = JPY 156.6 million
The total amount of distributions for the period ended December 2012 was JPY 157.7 million, which
exceeded the above calculation of JPY 156.6 million.
(*) The amount of distributable profit (JPY 174 million) = fiscal period net profit before taxes (JPY 114
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)
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)15th Fiscal
PeriodJan. 1, 2010 toDec. 31, 2010
4,757,809

16th Fiscal
PeriodJan. 1, 2011 toJun. 30, 2011
3,172,324

17th Fiscal
PeriodJul. 1, 2011 to
Dec. 31, 2011
568,830

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

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

4,480,847
276,962(435)
276,962
(435)
−
(−)

3,044,985
127,339(200)
127,339
(200)
−
(−)

299,171
269,658(200)
269,658
(200)
−
(−)

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

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

27

5

Future Operational Policy and Issues to be Addressed

Invincible

Investment
Corporation

Forecast for Next Period and Issues to be Addressed(i) External growth strategy
New Property Acquisitions
With a view to improving earnings potential and portfolio quality, the Investment Corporation acquired new properties(type: 24 residential properties, with a total acquisition price of JPY 14,043 million).
Going forward, the Investment Corporation will seek external growth while focusing on internal growth and emphasizing
stable earnigns in the medium to long term. For the purpose of medium-to-long term earnings stability, residential properties willcontinue to be the coare asset and the focus of acquisitions. Office buildings, retail facilities, hotels, senior facilities, parking
facilities, etc. will be sub-assets that complement the core assets, and acquisitions of properties with a wide variety of uses will beconsidered in light of market conditions, portfolio composition ratio and geographic area diversification. In addition, in orderto further enhance the capacity to collect information about property transactions, the Investment Corporation will
explore a wide variety of acquisition opportunities in the market, and will work diligently to expand the Asset Manager’s
independent information network. In addition, the Investment Corporation will create opportunities to regularly trade
information with Fortress, and collect information regarding the market in multifaceted ways.

Property Sales
As discussed above, there is a recovery trend in the real estate market. Under such circumstances, the Investment
Corporation will make appropriate reviews for selecting potential candidates for sales in consideration of factors such as theportfolio composition, geographic diversification, medium to long term earnings potential, changes in the market competitiveness,
additional investments for maintaining competitiveness and profitability. In addition, with respect to property sales as well, theInvestment Corporation will gather information through a wide variety of disposition opportunities, and at the same time work
diligently to exhand the Asset Manager’s independent information network. Moreover, the Investment Corporation will create
opportunities to regularly trade information with Fortress, collect information regarding the market in multi-faceted ways,and
consider the appropriate properties, potential acquirers and disposition timing.

(ii) Strategy for internal growthWith respect to existing properties
The Investment Corporation has made efforts to maintain and improve occupancy rates and rent levels in view of securing
stable cash flows.As a result in part of the improved quality of the portfolio due to the acquisition of the 24 new properties, theoccupancy rate for the portfolio for the reporting period beginning with September 2012 was maintained at the 96% level. In order
to continute to maintain a high occupancy rate in stable manner, the Investment Corporation will flexibly review leasing strategies
to eliminate vacancy periods of more than 30 days, and will seek to establish new responses. In addition, steps have been taken tocomplete repair construction to within a 20-day period after the exit of a tenant in order to quickly lease a unit to a new tenant.
Furthermore, in order to accurately understand the residential and office rental markets, the Investment Corporation will work on
research on a daily basis, and will not only engage in leasing activities that meet the unique characteristics of each property andgeographic area, but will establish a leasing strategy and seek to enhance leasing approach through initiatives such as individualleasing improvement projects.

28

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Investment
Corporation

For the next fiscal period and beyond, the Investment Corporation will continue to establish strategies based on thecondition of the market and competing properties. In addition, the Investment Corporation will seek to maintain and enhance
the quality of property management through comprehensive supervision and direction of property management companies(“PM companies”) and conducting regulary reviews of PM companies’ management ability. In addition, in order to further
enhance profitability, the Investment Corporation will select PM companies that appropriately match the unique characteristics,
etc. of each property. At the sae time, comprehensive measures will be taken to control costs. Moreover, by utilizing the AssetManager’s independent network of leasing companies, as well as support from Fortress for diverse market information
regarding leasing activities, the Investment Corporation will seek further enhancement and stability in occupany rates.
Because the preparation and execution of maintenance and repair plans is an important factor in building positive andtrustworthy relationships with tenants and maintaining and improving portfolio earnings potential and property values, withrespect to property maintenance and repairs, the Investment Corporation will work diligently to prepare plans that seek toincrease asset values, maintain and enhance product quality and market competitiveness and increase property occupancy rates
and profitability. In addition, with respect to the execution of maintenance and repairs of properties, the Investment
Corporation will target prompt earnings improvement for the relevant properties, while at the same time establishing andexecuting plans for maintaining the Investment Corporations’earnings and distribution stability, and seeking to diversify andstandardize execution timing and costs.
Based on such measures, the Investment Corporation will have as its target the mazimization of future cash flows andincreased asset value.
As a result of executing the internal growth strategies discussed above, the appraisal value of the 54 existing properties
increased by JPY 183 million from JPY 59,106 million as of the prior period end to JPY 59,289 million as of the reporting period
end, representing two consecutive periods of asset value growth. With respect to the appraisal value of the 24 new properties, aswell, the appraisal value as of the reporting period was JPY 14,194 million, or an increase of JPY 51 million from the acquisition
date. The total portfolio appraisal value as of the end of the reporting period was JPY 73,483 million.

Regarding the operation of the Investment Corporation
The Investment Corporation will diligently consider ways to improve its operations to continue to make possible ever more
efficient and strategic management. In addition, as part of its internal growth strategy, the Investment Corporation will seek toreduce administrative costs related to its operations. For such purpose, the Investment Corporation will diligently gather andanalyze different kinds of information. Moreover, it will continue to regularly have opportunities for obtaining information from
Fortress, and will conduct its investigation in a multi-faceted manner.
During the reporting period, with respect to the operations of the Investment Corporation, there were redutions in theamount of compensation paid to outside experts (accounting and tax), reduction in administrative agent costs resulting from achange in administrative agent for accounting, etc., as well as reductions in certain common agency investigation fees and asset
management fees. There are additional reductions expected in third party expert compensation and asset management fees for the
next fiscal period.
The Investment Corporation plans to further push forward an efficient operational process and diligently consider additional
improvements in operational management and additional cost reductions.

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Investment
Corporation(iii) Financial strategy
In principle, the Investment Corporation will seek to target the total of its borrowings and investment corporation bonds tobe no higher than 60% of its total assets (note).
Going forward, when the Investment Corporation engages in fund-raising through borrowings from financial institutions
and raising equity for the purpose of repaying existing borrowings and acquiring new properties, the Investment Corporation will
carefully consider the tends in the capital and financial markets and decide upon the appropriate way of raising funds accordingly.。
In addition to continuing to maintain relationships that have been developed with existing lenders, the Investment
Corporation will consider opportunities for improving unitholders’ value by diligently considering fund-raising not only fromexisting lenders but from other lenders, including not only domestic but overseas lenders, as well a different fund-raisingtechniques.

In addition, by utilizing the relationship with Fortress, efforts will be made to gather information from a variety ofsources.
Based on such measures, the Investment Corporation will seek to further enhance unitholders’ value through achieving aneven more stable finaincial structure.
（Note）However,interest-bearing liabilities may temporarily exceed 60% in connection with the acquisition ofproperties.

(iv) Compliance risk management
While the executive officer of the Investment Corporation concurrently serves as the representative director at the AssetManager, two supervisory directors (an attorney and a certified public account) oversee the execution of the executive officer’s
duties via the Board of Directors of the Investment Corporation. In addition, the compliance officer of 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 complicance with laws, regulations and other relevant
matters as well as overall management of transactions with sponsor related parties. Moreover, it has in place a compliancecommittee which, chaired by such compliance officer, is in chanrge of deliberating on fundamental items related to compliancewith laws, regulations and other relevant matters as transactions with sponsor related parties.
Compliance committee meetings are attended by an outside expert (an attorney) who, sitting in as a compliancecommittee member, contributes to the Asset Manager’s compliance by ensuring the compliance of related party
transactions from the standpoint of such expert’s expertise and experience and promoting restraint in decision-making as a third
party. The Investment Corporation will take steps to further strengthen its compliance structure to contribute to the transparency
and health of its operations.

6

Significant subsequent events
Nothing applicable.

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Overview of the Investment Corporation
1

Investment
Corporation

Overview of Investment

By Period

15th Fiscal Period 16th Fiscal Period 17th Fiscal Period 18th Fiscal Period 19th Fiscal Period

Results Dates

As ofDec. 31, 2010

Jan. 1, 2011 toJun. 30, 2011

Jul. 1, 2011 to
Dec. 31, 2011

Jan 1, 2012 toJun. 30, 2012

Jul. 1, 2012 toDec. 31, 2012

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

10,000,000
636,695
19,134
11,986

10,000,000
636,695
19,134
11,151

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
10,3252

Notes regarding Unitholders

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

Number of units held

Calliope Godo Kaisha
New Mission Funding Co., Ltd
PROSPECT JAPAN FUND LIMITEDJP MORGAN CHASE BANK 380180
Japan Trustee Services Bank, Ltd. (trust account)
The Nomura Trust and Banking Co., Ltd. (investment trust account)
MELLON BANK TREATY CLIENTS OMNIBUS
Trust & Custody Services Bank, Ltd. (securities investment account)
CGML-IPB CUSTOMER COLLATERAL ACCOUNTThe Master Trust Bank of Japan, Ltd. (trust account)
Total

609,942
129,400
105,496
67,28052,23946,992
26,361
19,896
17,337
16,3181,091,261% of total number ofinvestment units issued
and outstanding
45.23
9.59
7.82
4.99
3.87
3.48
1.95
1.47
1.28
1.21
80.93

(Note): 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 Shibatsuji
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
6,980(Note 1) As of June 26, 2007, Naoki Shibatsuji received approval from the Commissioner of the Financial Services Agency to holdmultiple posts in accordance with the law regarding partial revision of the Securities and Exchange law, etc.
(Act No. 65 of the 2006 Investment and Trust Act before the revision).
(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 listsed above, thoseorganizations 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 accordance with
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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Investment
Corporation

4 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
19th Fiscal Period are as below.
Delegation Category
Asset management company

Name
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. (Note 3))

EP Consulting Services Corporation

Special account management company

Mitsubishi UFJ Trust and Banking Corporation Limited (Note 4) /Sumitomo Mitsui Trust Bank, Limited (Note 5)(Note 1) Of the administrative tasks for the Investment Corporation’s institutional operations, tasks related to the mailing of generalunitholders’ 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 mailingof general unitholders’ meetings and the receipt and counting of voting forms),② Tasks related to the running of the meetings of theBoard of Directors of the Investment Corporation, and ③ the aforementioned in ① or tasks incidental or related to ② are delegated.
(Note 3) The Administrative Agent who provides administrative services pertaining to accounting matters etc. under the Act on Investment Trusts
and Investment Corporations was changed from Sumitomo Mitsui Trust Bank, Limited to EP Consulting Services Corporation as of
October 1, 2012.
(Note 4) 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. In addition, on January 1, 2011, the aforementioned tasks were succeeded to from Daiko Clearing Services
Corporation to Mitsubishi UFJ Trust & Banking Corporation through a corporate split.
(Note 5) 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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Investment
Corporation

Status of Investment Corporation’s Assets under Management
1

Composition of Investment Corporation’s Assets

Fiscal Period ended June 30, 2012(as of June 30, 2012)
Amount held
Ratio of total assets(millions of yen)(%)
(Note 2)
Greater Tokyo area －－Residential
Major regional cities －－Subtotal－－
Greater Tokyo area 719
1.1
Real estate Office/Retail
Major regional cities －－Subtotal719
1.1
Seniors,
4.6
Greater Tokyo area 3,096
hourly parking, Major regional cities 1,474
2.2
etc.
Subtotal
4,571
6.8
Total real estate
5,290
7.8
Greater Tokyo area 40,618
60.0
Residential
Major regional cities 2,082
3.1
Subtotal
42,701
63.1
Greater Tokyo area 7,087
10.5
Real estate
Office/Retailin trust
Major regional cities 6,202
9.2
Subtotal
13,29019.6
Seniors,
Greater Tokyo area －－hourly parking, Major regional cities －－etc.
Subtotal－－
Total real estate in trust
55,991
82.7
Deposits and other assets
6,416
9.5
Total assets (Note 3)
67,698100.0(61,282)(90.5)
Type of
Asset

Purpose

Geographic area
(Note 1)

Fiscal Period ended December 31, 2012(as of December 31, 2012)
Amount held
Ratio of total assets(millions of yen)(%)
(Note 2)
－
－
－
－
－
－
717
0.9
－
－
717
0.9
3,078
3.8
1,463
1.8
4,542
5.7
5,259
6.6
44,512
55.5
12,333
15.4
56,845
70.9
7,089
8.8
6,147
7.7
13,237
16.5
－
－
－
－
－
－
70,083
87.4
4,857
6.1
80,200100.0(75,342)(93.9)(Note 1) Greater Tokyo area refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture.
(Note 2) “Amount held” is from the baance 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 are as
below.
Name of Property

Book Value(millionsof yen)A75 Spacia Ebisu
B14 Lexington Plaza Nishigotanda
B17 Lexington Plaza Hachiman
A52 Winbell Kagurazaka
A51 City House Tokyo Shinbashi
B18 AEON Town Sukagawa
A53 Nishiwaseda Crescent Mansion
A76 Neo Prominence
A30 Emerald House
A31 Lexington Square Akebonobashi

6,801
4,827
3,218
3,171
2,444
2,179
1,854
1,678
1,444
1,402

Total

29,022

Leasable
Area (m2)

LeasedArea (m2)

7,794.91
6,033.58
8,419.15
4,032.70
3,364.00
18,440.58
4,310.77
3,574.70
2,152.31
1,987.88
60,110.58

7,186.21
6,033.58
7,964.63
3,887.82
3,054.95
18,440.58
4,310.77
3,389.89
2,130.01
1,850.59
58,249.03

Occupancy
rate (%)(Note)

Ratio ofrentalrevenue (%)

Main Use

7.5
6.3
6.4
4.0
3.4
5.8
2.8
1.3
1.7
1.9
41.2

Residential

92.2
100.0
94.6
96.4
90.8
100.0
100.0
94.8
99.0
93.1
96.9

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 the second digit.

33

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Invincible

Asset Portfolio Including Real Estate

Investment
Corporation

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

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 interests
Tokyo

Leasable
Area (m2)
1,771.13

Appraisal value as ofBook Value
December 31, 2012 (millions of yen)(million of yen)
(Note 2)
1,110
1,153

2,681.94

1,190

1,102

1,051.50

909

859

1,367.96

1,020

1,030

2,152.31

1,160

1,444

1,748.24

1,190

1,392

3,029.16

990

1,052

1,858.44

1,020

1,010

1,351.11

916

999

1,562.26

889

871

952.89783

792

1,015.34

664

774

1,368.57

583

655

1,167.50575

656

1,235.93446

646

1,210.74

648

586

1,126.65528

619

1,047.75

515

578

557.05526

577

908.99489

557

815.77518

542

2,040.27

449

524

871.35483

488

3,364.00

2,560

2,444

4,032.70

3,320

3,171

4,310.77

1,990

1,854

1,987.88

1,520

1,402

1,197.19

996

1,021

1,627.13915

841

1,220.24

580

566

1,969.45

1,030

924

3,426.36

1,210

1,066

1,929.59434

402

1,528.58363

317

705.75218

245

1,430.64

989

930

784.74507

482

4,460.56

1,010

1,097

7,794.91

6,800

6,801

34

Invincible
A76
A77
A78
A79
A80
A81
A82
A83
A84
A85
A86
A87
A88
A89
A90
A91
A92
A93
A94
A95
A96
A97
A98
A99

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
Cosmo Court Motomachi
3-12-20 Motomachi Dori Chuo Trust beneficiary interests
Ward,Kobe City, Hyogo
Trust beneficiary interests
Revest Honjin
2-13 Torii Dori Nakamura
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 Trust beneficiary interests
Prime Life Mikage
Higashi Nada Ward, Kobe
City, Hyogo Prefecture
Subtotal

B8
B9
B14
B15
B16
B17
B18

C1
C21
C22
C23
C24
C25
C26
C27

Kindai Kagakusha Building

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
1-22-7 1-22-15 Kanda
Real estate
Bon S
Sudacho, 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
Real estate
City, TokyoBon 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
Stop Parking Kanda-Sudacho

Total

3,574.70

1,670

1,678

2,773.71

1,260

1,285

2,310.49981

996

1,933.80

678

691

1,955.40

664

673

898.70625

634

1,731.68

617

625

1,634.60

599

614

1,554.03

599

610

2,670.66

638

597

1,428.12548

558

701.92544

554

1,185.50528

537

1,433.35

524

526

765.18461

463

1,029.05

447

455

530.60413

419

1,020.86

380

383

789.12372

381

992.76358

364

1,477.62

340

344

794.80333336

974.81316

318

761.18299

304

109,585.97 56,237

Investment
Corporation

56,845

1,451.54

989

526.43520

6033.584,200

2145.00935

2,178.41593

8,419.15

3,140

18,440.58

2,070

39,194.69

12,44781.04

91

2,342.17734

1,962.87681

1,984.17641

1,710.43543

8,858.49

1,060

3,435.79616

2,129.87

433

22,504.83

4,799

4,542

171,285.49 73,483

75,342

1,221
717
4,827
1,041
749
3,218
2,179
13,955
100
666
631
558
473
1,004
647
459

(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.

35

Invincible

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.
18th Fiscal Period(January 1, 2012 to June 30, 2012)

19th Fiscal Period(July 1, 2012 to December 31, 2012)

Number oftenants (at endof period)(unit)

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

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

1

95.8

41,247

1.9

1

Name

A26 Nisshin Palacestage Daitabashi
Nisshin Palacestage Higashi-Nagasaki

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

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

96.9

41,031

1.7

1

97.8

46,638

2.1

1

90.3

46,864

1.9

A28 Growth Maison Gotanda

1

100.0

27,415

1.3

1

100.0

27,3991.1

Growth Maison Kameido

A27

1

95.4

32,149

1.5

1

94.0

33,066

1.3

A30 Emerald House

1

100.0

50,854

2.3

1

99.0

42,027

1.7

A31 Harmonie Ochanomizu

1

96.1

39,856100.0

40,401

1.6

Suncrest Shakujii-Koen

1

1

94.7

35,273

1.4

A33 Growth Maison Shin-Yokohama

1

97.1

1.8
1.6

1

1.6

1

35,184

1.4

A29

A32
A34

Belle Face Ueno-Okachimachi

A35 Grand Rire Kameido
A36

Growth Maison Ikebukuro

1

94.1
100.0

1

100.0

35,89634,08834,35926,666

1

90.5
92.4
67.9

16,133

1

96.5
94.6

20,577
17,009

1

94.8
84.4
100.0

A37 Growth Maison Yoga

1

A38 Route Tachikawa

1

A39

Shibuya-Honmachi Mansion

A40 City Heights Kinuta
A41

Acseeds Tower Kawaguchi- Namiki

A42 Capital Heights Kagurazaka
A43

College Square Machida

A44 Belair Meguro

1

1
1
1

Wacore Tsunashima I

1

87.9
84.2

A46 Foros Nakamurabashi

1

92.6

A47 Growth Maison Kaijin

1

A45

1.6

1

98.5
98.4

30,593

1.2

1.2

1

100.0

26,6191.1

22,647

1.0

1

90.6

25,016

1.0

21,052

1.0

1

92.2

22,964

0.9

0.7
0.9

1

100.0

20,021

0.8

1

100.0

19,691

0.8

0.8

1

89.2

16,876

0.7

25,175

1.2

1

100.0

25,1381.0

19,567
18,268
16,620

0.9

1

92.5

18,276

0.7

0.8

1

100.0

18,268

0.7

0.8

1

92.1

15,4630.6

19,222

0.9

1

0.7

0.8

1

96.1
100.0

16,96916,75922,582

17,094

0.7

1.0
0.7

1

0.9

1

97.1
100.0

23,017
14,706

0.6

3.8
4.8

1

90.8

84,981

3.4

1

96.4

98,837

4.0

3.1

1

100.0

68,772

2.8

2.1

1

93.1

47,536

1.9

1.4
1.5

1

92.9

29,761

1.2

1

97.3

33,612

1.4

1.1
1.5

1

97.1

24,418

1.0

1

93.2

33,276

1.3

2.9
1.1

1

94.3

60,001

2.4

1

96.4

24,448

1.0

0.8

1

100.0

17,468

0.7

0.5

1

11,680

0.5

1.5
0.8

1

88.6
95.1

29,171

1.2

1

100.0

17,529

0.7

2.3

1

90.0

47,194

1.9

8.7

1

92.2

186,857

7.5

1

94.8

31,424

1.3

College Square Machiya

1

96.7
100.0

A51 City House Tokyo Shinbashi

1

93.0

83,002

Winbell Kagurazaka

1

93.3

A53 Nishiwaseda Cresent Mansion

1

104,927
67,16945,905

A48
A52
A54

Lexington Square Akebonobashi

1

88.8
93.4
90.0

A56 Casa Eremitaggio

1

A59 Towa City Coop Shinotsuka II

1

92.6

Bichsel Musashiseki

1

97.1

A61

A62 Lexel Mansion Ueno Matsugaya

1

Towa City Coop Sengencho

1

96.3
89.8

1

93.2

1

100.0
100.0

A63

A64 Royal Park Omachi
A65

Lexington Square Haginomachi

A66 Visconti Kakuozan

1

A71 Lexington Square Daitabashi

1

A72 Lexington Square Honjo Azumabashi

1

A73 AMS TOWER Minami 6-Jo

1

A75

Spacia Ebisu

1

97.9
90.9

14,706

29,50632,653
24,61933,382
63,62023,551
17,63011,71832,926
17,49549,535

88.6
97.1

189,227

A76 Neo Prominence ※

－

－

－

－

A77

－

－

－

－

1

99.1

25,296

1.0

－

1

97.5

19,5280.8

Invoice Shin-Kobe Residence ※A78 Cosmo Court Motomachi ※

－

－

－

36

Invincible
Name
Number oftenants (atend ofperiod)(unit)

19th Fiscal Period(July 1, 2012 to December 31, 2012)

18th Fiscal Period(January 1, 2012 to June 30, 2012)
Occupancy
rate(at end of
period) (%)(Note 1)

Investment
Corporation

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）

A79 Revest Honjin ※

－

－

－

－

1

93.8

15,724

0.6

A80

－

－

－

－

1

91.9

15,0310.6

100.0

10,867

0.4

Revest Matsubara ※A81 Sun Terrace Minami Ikebukuro ※A82

Alba Noritake Shinmachi ※A83 Revest Meieki Minami ※A84 Revest Heian ※A85

Vendir Hamaotsu Ekimae ※

－

－

－

－
－

1

－

－

1

98.6

13,104

0.5

－

－

－

－

1

97.0

12,8520.5

11,283

0.5

－

－

－

－

－

1

－

－

－

－

1

95.2
93.3

16,6000.7

89.9

10,958

0.4

100.0
96.0

8,945

0.4

10,787

0.4

A86 Salvo Sala ※

－

－

－

－

1

A87

－

－

－

－

1

Excellente Kagurazaka ※A88 Luna Court Edobori ※A89

Winntage Kobe Motomachi ※A90 Queen's Court Fukuzumi ※A91

Corp Higashinotoin ※A92 Belair Oimachi ※A93 Siete Minami-Tsukaguchi ※A94

Prime Life Sannomiya Isogami Koen ※A95 HERMITAGE NANBA WEST ※Century Park Shinkawa 1-bankan ※

－

－

－

－

1

－

－

－

－

1

98.2

11,636

0.5

－

－

－

1

100.0

8,191

0.3

－

－

－

－

－

1

100.0

9,189

0.4

－

－

－

－

1

92.6

7,351

0.3

94.9

8,935

0.4

－

－

－

－

1

－

－

－

－

1

100.0

7,741

0.3

91.2

7,889

0.3

－

－

－

－

1

A97 West Avenue ※

－

－

－

－

1

100.0

9,010

0.4

－

－

－

－

1

90.0

6,787

0.3

A98

－

－

－

－

1

96.9

6,685

0.3

－

－

－

－

1

85.5

6,292

0.3

1,446,369
36,732

66.4
1.7

63

95.4

1,719,628

69.4

1

100.0

37,386

1.5(Note 4)(Note 4)1(Note 4)(Note 4)132,21425,935

6.1
1.2

8

100.0
100.0

157,111

6.3

1

54.2

29,234

1.2

42,187

1.9

1

100.0

39,761

1.6

7.3

1

94.6

158,959

6.4

6.6

1

100.0

143,761

5.8

14

96.3

583,412

23.6

1

100.0

2,443

0.1

A96

Little River Honmachibashi ※A99 Prime Life Mikage ※Subtotal

39

93.9
85.5
100.0
92.0

B8

Kindai Kagakusha Building

1

B9

Shinjuku Island

1

B14 Lexington Plaza Nishigotanda

7

B15 Cross Square NAKANO

1Ohki Aoba Building

1

54.0
100.0

B17 Lexington Plaza Hachiman

1

94.6

AEON TOWN Sukagawa

1

100.0

13

94.6

158,494
144,266
557,027

B16
B18
C1

Stop Parking Kanda-Sudacho

1

100.0

2,443

25.6
0.1

C21

Bon Sejour Chitose Funabashi

1

100.0

1.1

1

100.0

23,906

1.0

Bon Sejour Yotsugi

23,913

C22

1

100.0

1

100.0

22,5280.9

C23

Bon Sejour Hino

1

100.0

22,534
21,411

1.0
1.0

1

100.0

21,4050.9

C24

Bon Sejour Musashi Shinjo

1

100.0

17,752

0.8

1

100.0

17,747

0.7

C25

Bon Sejour Komaki

1

100.0

1

100.0

45,582

1.8

Bon Sejour Hadano Shibusawa

1

100.0

45,59823,808

2.1

C26

1

100.0

23,802

1.0

C27

Bon Sejour Itami

1

100.0

15,978

1.1
0.7

1

100.0

15,971

0.6

Subtotal

8

100.0

8.0
100.0

100.0

173,3887.0

60

173,441
2,176,839

8

Total

85

96.2

2,476,430

100.0

Subtotal

95.1(Note 1) “Occupancy rate” is computed by dividing the leased area by leasable area, and is rounded to the second digit.
(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) The properties indicated with a “※” were acquired on September 28, 2012, and thus the condition of income, etc. covers the period from September 28, 2012 to
December 31, 2012.
(Note 4) Undisclosed due to inability to gain approval from the property tenant for document disclosure.

37

4

Status of Size and Market Value of Trading Assets

Invincible

Investment
Corporation

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.

38

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.

39

Invincible

Investment
Corporation

2 Capital expenditures for the fiscal period ended June 30, 2013
The principal construction constituting capital expenditures for the real estate assets for the fiscal period ended June 30, 2013 is asfollows. Capital expenditures for the fiscal period was 154,997 thousand yen, and together with 22,416 of repair cost include in this fiscal period’s
expenses, construction work totaling 177,414 thousand yen was implemented.

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.

40Invincible

Investment
Corporation

Overview of Liabilities and Expenses

1

Statement of Operating Expenses
19th Fiscal Period

18th Fiscal Period

ItemJan. 1, 2012 to Jun. 30, 2012(a) Asset management fees(b) Asset custodian fees(c) Administrative services fees(d) Directors’ remuneration(e) Other operating expenses

2

Jul. 1, 2012 to Dec. 31, 2012

150,000

130,067

3,328

3,351

25,27324,781

4,800

4,800

75,08872,584258,489

235,585(Thousands of yen)

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

Type

LenderBorrowing
Date

Shinsei Bank, Limited.
Citibank Japan Ltd.

Jul. 29, 2011

Sumitomo Mitsui Trust BankLong Term
Debts(Note 11)

The Bank of New York Mellon
Trust (Japan), Ltd.
Resona Bank, Limited

Oct. 31, 2011
Jul. 29, 2011

MetLife Alico
The Bank of New York Mellon
Trust (Japan), Ltd.
Citibank Japan Ltd.

Jul. 29, 2011
Jul. 29, 2011

SubtotalMizuho Trust & Banking Co.,
Ltd. (Note 9)

Jul. 29, 2011

Long-term
Debts in
Trust
(Note 2)
Mitsubishi UFJ Trust andBanking Corporation(Note 10)

Balance at End ofReporting Period(Thousands of yen)―

Average
Interest Rate(%) (Note 1)―

2,966,179―――

1,978,937―――

1,489,772

―

―

―

―
―

Sep. 28, 2014

Repayment
Date

Payment
MethodPurpose

―
―

―

―

―

―

4,487,406

2.266

Jul. 31, 2014―

2,991,604

2.266

―

2,941,744

2.266

Jul. 31, 2014―

2,941,744

2.266

Jul. 31, 2014

7,100,000

7,100,000

8.500

2,616,000

2,560,000

9.500

20,603,500

23,022,500

3,750,000

3,750,000

2.500

Jan. 25, 2017

3,620,000

3,620,000

2.500

Jan. 25, 2018

3,630,000

3,630,000

2.500

Jan. 25, 2019―

2,700,000

1.900

Mar. 31, 2018 Lump sum―

2,860,000

1.900

Mar. 31, 2019

(Note 7)―

1,830,000

1.900

Mar. 31, 2020

(Note 7)

1.900

Mar. 31, 2019

(Note 8)―2,570,000

Subtotal

11,000,000

20,960,000

Total

31,603,500

43,982,500

Notes

―

989,468

Sep. 28, 2012

Shinsei Bank, Limited.
Shinsei Trust & Banking Co.,Ltd.
Shinsei Trust & Banking Co.,Ltd.

Balance at Start ofReporting Period(Thousands of yen)
3,463,141

Jul. 31, 2014

(Note 4)―(Note 2)
(Note 3)
SecuredConventional

Jan. 30, 2015 Lump Sum(Note 3)Jan. 30, 2015

(Note 5)(Note 3)(Note 6)(Note 3)

Secured(Note 2) Conventional

41

Invincible

Investment
Corporation(Note 1)
(Note 2)
(Note 3)(Note 4)

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.
The funds raised through borrowings are mainly used to acquire real estate properties or properties in trust.
Used for purposes including repayment of existing debt.
Portion of principal (37 million yen) repaid on same day as coupon payment date (every 3 months), and lump-sum payment of balance to be made on principal
maturity date.
(Note 5) Portion of principal (28 million yen) repaid on same day as coupon payment date (every 3 months), and lump-sum payment of balance to be made on principal
maturity date.
(Note 6) 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.
(Note 7) 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 30 years (total 120 payments). The balanceremaining after the payments above will be repaid in one lump sum on the principal maturity 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 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 balanceremaining after the payments above will be repaid in one lump sum on the principal maturity date.
(Note 9) 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 10) 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 11) Includes long-term debt scheduled to be repaid within 1 year.

Purchase and Sale during fiscal period ended December 31, 2012 (from July 1, 2012 to
December 31, 2012)
The acquisition of the trust beneficiary interests relates to the properties below.

(Note) Transaction amount is the purchase amount set forth in the trust beneficiary purchase agreement, and does notinclude other acquisition-related expenses, such as real property and city planning tax, as well as consumption taxes.
42

Invincible

Investment
Corporation

Other Assets
Assets other than the aforementioned are cash and deposits and cash and deposits in trust.

3 Appraisal Values

Real Estate Transactions
Property Names

Type ofOwenership

Acquisitions

A76 Neo Prominence
A77 Invoice Shin-Kobe Residence
A78 Cosmo Court Motomachi
A79 Revest Honjin
A80 Revest Matsubara
A81 Sun Terrace Minami Ikebukuro
A82 Alba Noritake Shinmachi
A83 Revest Meieki Minami
A84 Revest Heian
A85 Vendir Hamaotsu Ekimae
A86 Salvo Sala
A87 Excellente Kagurazaka
Trust
Beneficiary
A88 Luna Court Edobori
Interests
A89 Winntage Kobe Motomachi
A90 Queen's Court Fukuzumi
A91 Corp Higashinotoin
A92 Belair Oimachi
A93 Siete Minami-Tsukaguchi
A94
A95 HERMITAGE NANBA WEST
A96 Century Park Shinkawa 1-bankan
A97 West Avenue
A98 Little River Honmachibashi
A99 Prime Life Mikage

Acquisition
Date

Sep. 28
2012

Acquisition
Price(Ths yen)

1,660,000
1,260,000
973,000
674,000
657,000
625,000
608,000
597,000
595,000
581,000
544,000
543,000
525,000
512,000
456,000
446,000
412,000
374,000
373,000
355,000
335,000
331,000
310,000
297,000

Appraisal
Value(Ths yen)

Real EstateAppraiser

AppraisalDate

1,660,000
1,260,000
980,000
679,000
662,000
625,000
608,000
597,000
599,000
638,000
548,000
543,000 Japan
Real Estate
525,000 Institute
516,000
456,000
446,000
412,000
377,000
373,000
358,000
337,000
333,000
312,000
299,000

Aug. 1,
2012(Note 1) Transaction amount is the purchase amount set forth in the trust beneficiary purchase agreement, and does not include other acquisition-related
expenses, such as real property and city planning tax, as well as consumption taxes.
(Note 2) The above appraisal is conducted based on the "Japanese real estate apprisal santadaard - Detailed in Chapter 3 - Appraisals of
securitized real estate.

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.

43

Invincible

II. Balance Sheet

Investment
Corporation(Unit: thousands of yen)
Fiscal Period ended
June 30, 2012
(As of June 30, 2012)

Fiscal Period ended
December 31, 2012
(As of December 31, 2012)

AssetsCurrent Assets
Cash and deposits
Cash and deposits in trust※1

Accounts receivables
Advances paid
Deposits paid
Prepaid expenses※2

Consumption tax receivable
Allowance for doubtful accounts
Total Current Assets

3,080,041
2,130,105

745,429
2,786,480

19,103208

18,370664

696,804
164,645

690,495
208,056

23,311(831)

115,447(797)

6,113,388

4,564,147

2,680,174

2,680,174

Non-current Assets
Property, plant and equipment
Buildings※1

Accumulated depreciation(135,561)(163,166)

Buildings, net

2,544,613

2,517,007

Equipment※1

50,691

50,691(21,152)(24,125)

29,53926,566

3,848

3,848

Accumulated depreciation(1,121)(1,261)

Building improvements, net

2,726

2,587

2,713,620
23,030,036

2,713,620
29,664,262(1,541,195)(1,782,176)

21,488,840

27,882,085

4,301,492

6,608,496

Accumulated depreciation(1,091,836)(1,280,186)

Equipment in trust, net

3,209,656

5,328,309

Accumulated depreciation
Equipment, net
Building improvements

Land
Buildings in trust

※1

※1
※1

Accumulated depreciation
Buildings in trust, net
Equipment in trust

Building improvements in trust※1※1

Accumulated depreciation
Building improvements in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation※1

Tools, furniture and fixtures in trust, net
Land in trust※1

237,741

294,542(62,476)(73,848)

175,265

220,693

106,361(45,055)

123,699(54,255)

61,30569,44331,056,639

36,582,527

61,282,207

75,342,842

Others621

244

Total intangible assets

621

244

Total investment and other assets
Guarantee deposits

10,00010,000Long-term prepaid expenses
Others263,982
28,686

253,406
29,381

Total property, plant and equipment
Intangible assets

Total investments and other assets
Total non-current Assets
Total Assets

302,669

292,787

61,585,498

75,635,874

67,698,887

80,200,02244

Invincible

Investment
Corporation

Fiscal Period ended
June 30, 2012
(As of June 30, 2012)(Unit: thousands of yen)
Fiscal Period ended
December 31, 2012
(As of December 31, 2012)

Liabilities
Current Liabilities
Accounts Payable

76,887

133,791

262,000
6,062

262,000
18,748

Accrued expenses
Accrued income taxes

371,854506

362,514503

Advances received
Deposits received

288,162
3,307

378,770
5,268

1,008,782

1,161,597

20,341,500
11,000,000

22,760,500
20,960,000

925,696
183,579

1,059,315
183,579

Long-term accrued expenses

1,413,153

1,404,333

Total Non-current Liabilities

33,863,929

46,367,728

34,872,711

47,529,325

26,134,396

26,134,396

Capital Surplus
Unappropriated retained earnings/loss

6,264,432
427,346

6,264,432
271,868

Total Surplus

6,691,778

6,536,300

Current portion of long-term debts
Accrued liabilities※1

Total Current Liabilities
Non-current Liabilities
Long-term debts
Long-term debts in trust※1※1

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

Total Liabilities
Net Assets
Unitholders’ Equity
Unitholders’ Capital
Surplus

Total Unitholders’ Equity
Total Net Assets
Total Liabilities and Net Assets※332,826,175

32,670,697

32,826,175

32,670,697

67,698,887

80,200,02245

Invincible

III. Statement of Income(Unit: thousands of yen)
Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)

Operating Revenues
Rental revenues

Investment
Corporation※1

Fiscal Period ended
December 31, 2012
(from July 1, 2012 to
December 31, 2012)

2,176,839

2,476,430

2,176,839

2,476,430

1,024,277
4,800

1,156,672
4,800

Asset management fees
Asset custodian fees

150,000
3,328

130,067
3,351

Administrative service fees
Provision of allowance for doubtful accounts

25,273646

24,781797

Bad debt expenses
Other operating expenses

1,137
73,30371,786

Total Operating Expenses
Operating Income/Loss

1,282,766
894,072

1,392,258
1,084,171

515

487

1,875
2,390

2,904
3,391

Total Operating Revenues
Operating Expenses
Property related expenses
Directors’renumeration

Non-operating Revenues
Interest revenues
Miscellaneous income
Total Non-operating Revenues
Non-operating Expenses
Interest expenses※1695,689763,201

Finance related costs
Investment unit issuance expenses

73,562
1,230

208,347
1,230

Miscellaneous losses
Total Non-operating Expenses

770,482

972,778

Ordinary Income/Loss
Income/Loss Before Income Taxes

125,981
125,981

114,784
114,784

Corporate Tax, etc.
Taxes due/Tax refund after adjustments

605(2,799)604-

Total Corporate Tax, etc.
Net Income/Loss(2,194)
128,175

604
114,179

Retained Earnings at the Beginning of the Period
Unappropriated Retained Earnings/Loss at the Endof the Period

299,171

157,688

427,346

271,868

46

Invincible
IV. Statement of Unitholders’ Equity

Investment
Corporation(Unit: thousands of yen)
Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)

Fiscal Period ended
December 31, 2012
(from July 1, 2012
to December 31, 2012)

Unitholders’ Equity
Unitholders’ Capital
Balance at the beginning of the period
Change during the period

26,134,396

26,134,396

Total change during the period--

Balance at the end of the period

26,134,396

26,134,396

6,264,432

6,264,432

Total change during the period--

Balance at the end of the period

6,264,432

6,264,432

Balance at the beginning of the period
Change during the period

568,830

427,346

Distributions from surplus
Net income/Loss(269,658)
128,175(269,658)
114,179

Total change during the period(141,483)(155,478)

Balance at the end of the period

427,346

271,868

Balance at the beginning of the period
Change during the period

6,833,262

6,691,778

Distributions from surplus
Net income(269,658)
128,175(269,658)
114,179

Total change during the period(141,483)(155,478)

Balance at the end of the period

6,691,778

6,536,300

Balance at the beginning of the period
Change during the period

32,967,658

32,826,175

Distributions from surplus
Net income/Loss(269,658)
128,175(269,658)
114,179

Total change during the period(141,483)(155,478)

Balance at the end of the period

32,826,175

32,670,697

Balance at the beginning of the period
Change during the period

32,967,658

32,826,175

Distributions from surplus
Net income/Loss(269,658)
128,175(269,658)
114,179

Total change during the period(141,483)(155,478)

Balance at the end of the period

32,826,175

32,670,697

SurplusCapital Surplus
Balance at the beginning of the period
Change during the period

Unappropriated Retained Earnings/Loss

Total Surplus

Total Unitholders’ Equity

Total Net Assets

47

Invincible

Investment
Corporation

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

For the Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)

For the Fiscal Period ended July 1, 2012
(from July 1 to December 31, 2012)

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.

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

Item

Buildings

40 - 77 years Buildings

40 - 77 years

Equipment

3 - 24 years Equipment

3 - 24 years

Building improvements

3 - 18 years Building improvements

Buildings in trust

6 - 65 years

Equipment in trust

3 - 32 years

Equipment in trust

3 - 32 years

Building improvements in trust

3 - 30 years

Building improvements in trust

3 - 55 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 recognition3 - 18 years
6 - 66 years

Buildings in trust

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.

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 aspart of the acquisition cost of the real estateof the real estate instead of being charged as
expense. There was no such amount equivalent instead of being charged as expense. The
to property taxes that was included as part of amount equivalent to property taxes that was
the acquisition of real estate during this fiscal included as part of the acquisition of real estate
during this fiscal period is 16,270 thousand yen.
period.

48

Invincible

Item

By Period For the Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)

Investment
Corporation

For the Fiscal Period ended July 1, 2012
(from July 1 to December 31, 2012)(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(2) Accounting treatment of consumption taxes (2) Accounting treatment of consumption taxes(a) Investment unit issuance expenses
Transactions subject to consumption
Transactions subject to consumption taxes aretaxes are recorded at amounts exclusive ofrecorded at amounts exclusive of consumption
consumption taxes.
taxes.

49

Invincible(Notes to the Balance Sheets)

Investment
Corporation※1.
Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.
(Unit：thousands of yen)
Fiscal Period ended Jun. 30, 2012

Fiscal Period ended Dec. 31, 2012(as of Jun. 30, 2012)(as of Dec. 31, 2012)

Cash and deposits in trust

2,130,105

2,786,480

Buildings

2,544,613

2,517,007

Equipment

29,53926,566

Building improvements

2,726

2,587

Land

2,713,620

2,713,620

Buildings in trust

21,488,840

27,882,085

Equipment in trust

3,209,656

5,328,309

Building improvements in trust

175,265

220,693

Tools, furniture and fixtures in trust

61,30569,443

Land in trust

31,056,639

36,582,527

Total

63,412,312

78,129,323

Liabilities with collateral are as follows.
(Unit：thousands of yen)
Fiscal Period ended Jun. 30, 2012(as of Jun. 30, 2012)

Fiscal Period ended Dec. 31, 2012(as of Dec. 31, 2012)

Current portion of long-term debts

262,000

262,000

Long-term debts

20,341,500

22,760,500

Long-term debts in trust

11,000,000

20,960,000

Total

31,603,500

43,982,500※2.
Represents amounts entrusted to financial institutions for the purpose of repayment of borrowings in trust from suchfinancial institutions.
※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 Jun. 30, 2012(as of Jun. 30, 2012)

Fiscal Period ended Dec. 31, 2012(as of Dec. 31, 2012)

50,00050,00050Invincible

Investment
Corporation(Notes to Statement of Income)※1.
Rental revenues and property related expenses are as follows:(Unit：thousands of yen)
For the Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)

For the Fiscal Period ended July 1, 2012
(from July 1 to December 31, 2012)

A .Rental revenues
Rent/common area charges

1,996,336

2,300,764

Other revenues

180,502

175,665

Total

2,176,839

2,476,430

Maintenance costs

359,308

403,390

Taxes and public dues

146,563

141,455

Insurance expenses

4,118

4,677

Other expenses

102,601

126,526

Depreciation expenses

411,685

480,622

Total

1,024,277

1,156,672

C. Operating income from rental revenues A-B) 1,152,562

1,319,757

B.Property related expenses(Notes to Statement of Unitholders’ Equity)
Number of investment units authorized and number of investment units issued and outstanding
For the Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)

For the Fiscal Period ended July 1, 2012
(from July 1 to December 31, 2012)

Number of investment units authorized

10,000,000 units

10,000,000 units

Number of investment units issued and outstanding

1,348,292 units

1,348,292 units

51

Invincible

Investment
Corporation(Notes Related to Tax Accounting)1.
Significant components of deferred tax assets and liabilities(Unit：thousands of yen)
Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)
Deferred tax assets - current assets
Enterprise tax payable
544
Rental receivables(merger)
211
Allowance for doubtful accounts
304
Accrued expenses
6,454
Subtotal
7,515
Valuation allowance
7,515
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.

Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)
564
211
291
6,454
7,522
7,522
－
－

1,227,581
2,547,099
517,072
7,023,707
11,315,460
11,315,460

1,208,736
2,547,099
513,845
7,023,707
11,293,388
11,293,388

－

－

－

－

Significant difference between statutory income tax rate and the effective tax rate
Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)

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

39.33
(20.06)(19.27)0.48
0.48

Due within one year
Due after one year
Total

Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)
36.59(17.47)(19.22)0.63
0.53(Notes Related to Lease Contracts)
Operating lease transactions(as lessee)Remaining lease payments
Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)
112,2492,504,787
2,617,036(Unit: %)(Unit：thousands of yen)
Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)
112,2492,448,662
2,560,911

Operating lease transactions(as lessor)Remaining lease payments(Unit：thousands of yen)
Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)
Due within one year
Due after one year
Total

674,516
7,933,109
8,607,625

Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)
674,516
7,595,851
8,270,367

52

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. andnot 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 andfinancing.
(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 relatedacquisition costs) and for the repayment of existing debt. Liquidity risks relating to debt are managed by the finance department of
the Asset Manager by preparing and updating 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 is estimated 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, 2012 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) Long-term debts in trust
Total liabilities

Book value
3,080,041
2,130,105
5,210,146
262,000
20,341,500
11,000,000
31,603,500

Fair value
3,080,041
2,130,105
5,210,146
262,025
20,369,393
11,097,830
31,729,249

Book value, fair value and the difference between values as of December 31, 2012 are as follows.
(1) Cash and deposits(2) Cash and deposits in trust
Total assets(3) Current portion of long-term debts(4) Long-term debts(5) Long-term debts in trust
Total liabilities

Book value
745,429
2,786,480
3,531,910
262,000
22,760,500
20,960,000
43,982,500

Fair value
745,429
2,786,480
3,531,910
262,039
22,788,497
21,195,979
44,246,517(Unit：thousands of yen)
Difference―――25
27,893
97,830125,749(Unit：thousands of yen)
Difference―――
39
27,997
235,979
264,017(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, andtherefore, the book value 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

53

Invincible

Investment
Corporation

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 bookvalues approximate their fair values.
(Note 2) Financial instruments for which fair value is extremely difficult to value(Unit：thousands of yen)
Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)

Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)
Tenant leasehold and security deposits

183,579

183,579
1,059,315

Teneant leasehold and security deposits in trust 925,696

Tenant leasehold and security deposits and tenant leasehold and security deposits in trust have no observable market price, and it isimpracticable to reasonably estimate their future cash flows because it because the repayment dates of those deposits and thetiming of the lessee’s exit from the property 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, 2012
(Unit：thousands of yen)
Due within one Due after one Due after two Due after three Due after four Due after fiveyear
to two years to three years to four years to five years years
Cash and deposits

3,080,041

―

―

―

―

―

Cash and deposits in trust

2,130,105

―

―

―

―

―

Total

5,210,146

―

―

―

―

―
As of December 31, 2012
(Unit：thousands of yen)

Due within one Due after one Due after two Due after three Due after four Due after fiveyear
to two years to three years to four years to five years years
Cash and deposits

745,429

―

―

―

―

―

Cash and deposits in trust

2,786,480

―

―

―

―

―

Total

3,531,910

―

―

―

―

―

(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, 2012
(Unit：thousands of yen)
Due within one Due after one Due after two Due after three Due after four Due after fiveyear
to two years to three years to four years to five years years
Current portion of long-term debts 262,000

―

―

―

―

Long-term debts―

Long-term debts in trust

―

Total

262,000―

262,000

20,079,500

―

―

―

―

320,981436,972

3,787,346

6,454,699

262,000

20,400,481

436,972

3,787,346

6,454,699

As of December 31, 2012
(Unit：thousands of yen)
Due within one Due after one Due after two Due after three Due after four Due after fiveyear
to two years to three years to four years to five years years
Current portion of long-term debts 262,000

―

―

―

―

―

Long-term debts―

13,324,500

9,436,000―――

Long-term debts in trust―

105,833

450,442516,273

3,819,427

16,068,022

Total

262,000

13,430,333

9,886,442

516,273

3,819,427

16,068,022
54

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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)Book
Residential value

Fiscal Period ended
June 30, 2012
(from January 1 to June 30,
2012)
Balance at the beginning of the period 42,941,963

Fiscal Period ended
December 31, 2012
(from July 1 to December 31,
2012)
42,701,472

Change during the period(240,490)

14,144,274

Balance at the end of the period

42,701,472

56,845,746

Fair value at the end of the period

OfficeBook
value

41,825,000

56,237,000

Balance at the beginning of the period 8,626,170

8,567,280

Change during the period(58,889)(9,898)

Balance at the end of the period

8,567,280

8,557,382

7,312,000

7,237,000

Fair value at the end of the period

RetailBook
value

Balance at the beginning of the period 5,491,912

5,442,452

Change during the period(49,460)(44,824)

5,442,452

5,397,628

5,170,000

5,210,000

Balance at the end of the period

Fair value at the end of the period

Parking

Book
value

Balance at the beginning of the period 100,892

100,878

Change during the period

(13)

(13)

Balance at the end of the period

100,878

100,865

91,30091,300Fair value at the end of the period

Seniors

Book
value

Balance at the beginning of the period 4,499,026

4,470,123

Change during the period(28,903)(28,903)

Balance at the end of the period

4,470,123

4,441,219

4,708,000

4,708,000

Fair value at the end of the period

Total

Book
Value

Balance at the beginning of the period 61,659,964

61,282,207

Change during the period(377,757)

14,060,634

Balance at the end of the period

61,282,207

75,342,842

59,106,300

73,483,300

Fair value at the end of the period(Note 1) Book value is the figure calculated by decreasing the amount of depreciation from acquisition price (including
acquisition-related costs).
(Note 2) The major factor of the increase for the fiscal period ended June 30, 2012 was capital expenditures related toconstruction work, and the major factor of the decrease was depreciation. The major factor of the increase forthe fiscal period ended December 31, 2012 was acquisition of newproperties and the major factor of thedecrease was depreciation.
(Note 3) 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.”

55

Invincible

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

Transactions with Parent Company and Major Unitholders
Fiscal Period ended June 30, 2012 (from January 1, 2012 to June 30, 2012)

Classification

Name

Type ofbusiness% ofvoting rights
ownedType oftransaction

Transaction
amount(thousands ofyen)

Repayment oflong-term
debts(Note 2)
(Note 3)
Interested Partyof the AssetManager

Shinsei Trust andBanking Co., Ltd.

FinancialBusiness―

Finance related
feesInterest
expenses

Account

Repayment oflong-term debts

9,716,000

Long-term prepaid
expenses

143,196

56,00043,927

Ending balance(thousandsof yen)Prepaid expenses

90,270Long-term accrued
expenses

1,413,153

Accrued expenses

17,640Accrued expenses

149,395

425,928(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) Calliope holds 609,942 units (holding ratio: 45.23%) of the issued investment units of the Company.

2.. Asset Custodian
Classification

Asset Custodian

Name

Sumitomo Mitsui
Trust Bank, Limited

Type ofbusiness

Bankingand Trustbusiness% ofvoting rights―

Type oftransaction

Transaction
amount(thousands ofyen)

Account

Ending balance(thousandsof yen)GeneralCustodian Fees

24,552

Accrued expenses

16,888Trust Fees

3,490

Accrued expenses

551

13,636

Current portion of
long-term debts

27,272―

Repayment of longterm debts

1,951,665

Prepaid expenses

6,901

Long-term prepaid
expenses

7,430

Accrued expenses

8,453

Repayment of
current portionof long-term
debts
Repayment oflong-term debts

Finance related
fees

3,441

Interest
expenses

24,108(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) The terms and conditions have been determined based on market prices.

56

Invincible

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

Transactions with Parent Company and Major Unitholders
Fiscal Period ended December 31, 2012 (from July 1, 2012 to December 31, 2012)

Classification

Name

Type ofbusiness% ofvoting rights
ownedType oftransaction
Repayment oflong-term
debts(Note 2)
(Note 3)

Interested Partyof the AssetManagerInterested Party of
the Asset Manager(Note 5)

Shinsei Trust andBanking Co., Ltd.

RhodiaGodo Kaisha(Note 5)

FinancialBusiness

FinancialBusiness――

Finance related
feesInterest
expensesAcquisition of
trust
beneficiaryinterests ofproperties intrust(Note 6)(Note 7)

Transaction
amount(thousands ofyen)

Account

Ending balance(thousandsof yen)Repayment oflong-term debts

9,660,000

Long-term prepaid
expenses

97,690Prepaid expenses

90,270Long-term accrued
expenses

1,404,333

Accrued expenses

17,640428,601

Accrued expenses

141,503

14,043,000――

56,00045,506(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) Calliope holds 609,942 units (holding ratio: 45.23%) of the issued investment units of the Company.
(Note 5) The seller, Rhodia Godo Kaisha, receives an anonymous partnership investment through funds that are managed by
FIG, an affiliate of Calliope. Accordingly, the Investment Corporation treats Rhodia Godo Kaisha as a related party.
(Note 6) The acquisition of the trust beneficiary interests relates to the properties below. Transaction amount is the purchaseamount set forth in the trust beneficiary purchase agreement, and does not include other acquisition-related expenses,
such as real property and city planning tax, as well as consumption taxes.
(Note 7) The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regardingtransactions with the sponsor company.

57

Invincible

Property number

Name of property

A76
A77
A78
A79
A80
A81
A82
A83
A84
A85
A86
A87
A88
A89
A90
A91
A92
A93
A94
A95
A96
A97
A98
A99
Total

Neo Prominence
Invoice Shin-Kobe Residence
Cosmo Court Motomachi
Revest Honjin
Revest Matsubara
Sun Terrace Minami Ikebukuro
Alba Noritake Shinmachi
Revest Meieki Minami
Revest Heian
Vendir Hamaotsu Ekimae
Salvo Sala
Excellente Kagurazaka
Luna Court Edobori
Winntage Kobe Motomachi
Queen's Court Fukuzumi
Corp Higashinotoin
Belair Oimachi
Siete Minami-Tsukaguchi
Prime Life Sannomiya Isogami Koen
HERMITAGE NANBA WEST
Century Park Shinkawa 1-bankan
West Avenue
Little River Honmachibashi
Prime Life Mikage

Investment
Corporation

Purchase and Sale
Price
(thousands of yen)
1,660,000
1,260,000
973,000
674,000
657,000
625,000
608,000
597,000
595,000
581,000
544,000
543,000
525,000
512,000
456,000
446,000
412,000
374,000
373,000
355,000
335,000
331,000
310,000
297,000
14,043,000

58Invincible

Investment
Corporation

2.. Asset Custodian
Classification

Asset Custodian

Name

Sumitomo Mitsui
Trust Bank, Limited

Type ofbusiness

Bankingand Trustbusiness% ofvoting rights―

Type oftransaction

Transaction
amount(thousands ofyen)

Account

Ending balance(thousandsof yen)GeneralCustodian Fees

19,599Accrued expenses

731

Trust Fees

3,351

Accrued expenses

866

27,272Current portion of
long-term debts―

1,951,665

Repayment of longterm debts―

Prepaid expenses―

Long-term prepaid
expenses―

Accrued expenses―

Repayment of
current portionof long-term
debts
Repayment oflong-term debts

Finance related
fees

14,482

Interest
expenses

12,260(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) The terms and conditions have been determined based on market prices.

59

Invincible

Investment
Corporation(Notes Related to Per Unit Information)
Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)

Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)

Net assets per unit

24,346 yen

24,231 yen

Net income per unit

95 yen85 yenNet 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/loss per unit is as follows.
Fiscal Period ended June 30, 2012
(January 1 to June 30, 2012)

Fiscal Period ended December 31, 2012
(July 1 to December 31, 2012)

128,175

114,179

Net income for the fiscal period(thousands of yen)

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, 2012
(from January 1 to June 30, 2012)―

128,175

114,179

1,348,292

1,348,292

Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)―60

Invincible

Investment
Corporation

VI. Statement of Cash Distribution

Fiscal Period ended June 30, 2012
(from January 1, 2013 to June 30, 2012)

Fiscal Period ended December 31, 2012
(from July 1, 2012 to December 31, 2012)

Ⅰ Unappropriated retained earnings

427,346,794 yen

271,868,258 yen

Ⅱ Distribution Amount

269,658,400 yen

157,750,164 yen(Distribution per Unit)(200 yen)(117 yen)

Ⅲ Retained earnings carried forward

157,688,394 yen

114,118,094 yen

Calculation method of distribution
amountIn accordance with the distribution policy set In accordance with the distribution policy set
forth in Article 17, Paragraph 1 of the Articles forth in Article 17, Paragraph 1 of the Articles
of Incorporation of INV, the distributionof Incorporation of INV, the distribution
amount shall be the amount which does notamount shall be the amount which does notexceed the amount of profits but exceeds 90% exceed the amount of profits but exceeds 90%of the distributable profit as defined in Article of the distributable profit as defined in Article
67-15 of the Special Taxation Measures Act. 67-15 of the Special Taxation Measures Act.
However, in the event that any tax losses arise,Pursuant to this policy, INV determined theor if no profits have been recorded for tax
distribution amount to be 269,658,400 yen,which is the sum of net income of 128,175,038 purposes due to tax losses carried forward, theyen and reversal of surplus of 141,483,362 yen. distribution amount may be as reasonably
INV did not distribute any amounts in excess of determined by INV. Pursuant to this policy,
profit, as set forth in Article 17, Paragraph 4 of INV determined the distribution amount to be
157,750,164 yen, which is the sum of net
the Articles of Incorporation.
income of 114,179,864 yen and reversal of
surplus of 43,570,300 yen. INV 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 tofinancial statements and statement of Cash Distribution, have been translated from the Japanese financial statements of the Investment
Corporation prepared in accordance 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, 2012 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 theaccompanying 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

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Invincible
VIII. Statement of Cash Flow (Reference Information)(Unit: thousands of yen)

Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)
Cash Flows from Operating Activities
Net income/loss before taxes

Investment
Corporation

Fiscal Period ended
December 31, 2012
(from July 1, 2012 to
December 31, 2012)

125,981

114,784

412,1101,230

481,000
1,230

73,562(927)

208,347(1,354)(515)
695,689(487)
763,201

519
(902)

(33)
733

(49,446)(23,311)

6,308(92,135)(59,401)(38,383)

62,798

(344)
(570)

13,696(31,930)

Increase (decrease) in deposits received

6,598(2,315)90,607
1,960

Others

15,097714

Subtotal

1,154,670

1,619,439

Proceeds of interest
Payment of interest

493(688,459)

487(740,409)

Payment of loss due to disaster
Payment of corporate taxes, etc.

(3,667)
(595)

(608)

Cash Flows from Operating Activities

462,441

878,909(38,277)(14,547,093)(49,274)
45,436(39,366)
174,339

Depreciation expenses
Investment unit issuance expenses
Finance related costs
Amortization of tenant leasehold and security deposits
Interest received
Interest paid
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in accounts receivable
Decrease (increase) in deposit payments
Decrease (increase) in consumption tax receivable
Increase (decrease) in accrued consumption tax payable
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in advances received

Cash Flows from Investing Activities
Payment for acquisition of tangible assets in trust
Payment of tenant leasehold and security deposits in trust
Proceeds of tenant leasehold and security deposits in trust
Others

(694)

(694)

(42,810)(14,412,815)(131,000)

13,400,000(10,981,000)(1,230)9,960,000(1,230)Finance related costs
Payment of distributions(10,452)(270,167)(251,904)(270,196)

Cash Flows from Financing Activities(412,849)

11,855,670

6,780(1,678,236)

5,203,366

5,210,146

5,210,146

3,531,910

Cash Flows from Investing Activities
Cash Flows from Financing Activities
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from long-term debt in trust
Costs from issuance of investment units

Increase (decrease) in cash and cash equivalents
Beginning balance of cash and cash equivalents
Closing balance of cash and cash equivalents※162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, 2012
(from January 1 to June 30, 2012)

Fiscal Period ended December 30, 2012
(from July 1 to December 31, 2012)

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 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)
PeriodItem

Fiscal Period ended June 30, 2012
(from January 1 to June 30, 2012)

Fiscal Period ended December 31, 2012
(from July 1 to December 31, 2012)

Cash and depoists

3,080,041

745,429

Cash and deposits in trust

2,130,105

2,786,480

Cash and cash equivalents

5,210,146

3,531,910

63

Invincible

Investment
Corporation

64

Invincible

Investment
Corporation

TSE Code: 8963

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

For Unitholders
Investors’ Registry
Administrator
Special AccountManagement Institution

Correspondence(Telephone Assistance)

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

65