Translation
This is an English language translation of the original Japanese announcement on our Website released on February 27, 2013.
However, no assurance or warranties are given with respect to the accuracy or completeness of this English language translation. The
Japanese original shall prevail in the case of any discrepancies between this translation and the Japanese original.

Summary of Financial Results (REIT) for the Fiscal Period Ended
December 31, 2012
February 27, 2013
Name of Issuer:

Invincible Investment Corporation

Stock Exchange Listing:Tokyo Stock Exchange

Securities Code:

8963

URL

Representative:
Name of Asset Manager:
Representative:
Contact:

Naoki Shibatsuji, Executive Director
Consonant Investment Management Co., Ltd.
Naoki Shibatsuji, President & CEO
Michiko Ishibachi, Manager in charge of Investor Relations

Scheduled Date of Filing of
Securities Report:

March 27, 2013

Supplementary Materials for
Financial Results:

Yes

Presentation Meeting:

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

TEL. +81-3-5411-2731

Scheduled Date ofCommencement for Distribution
March 22, 2013
Payments:

Yes (for analysts and investors)

1.

(values are rounded down to the nearest million yen)
Financial Results for the Fiscal Period ended December 31, 2012 (from July 1, 2012 to December 31, 2012)(1)

Operating Results(Percentages indicate percentage change from the previous period)

Operating Revenues
Period ended
December 2012
Period ended
June 2012

Operating Income
Millions of yen%

Millions of yen%

Millions of yen

%

2,476

13.8

1,084

21.3

114

(8.9)

114

(10.9)

2,176

(1.2)

894

-

125

-

128

-

Period ended
December 2012
Period ended
June 2012(2)

Net Income%

Net Income per Unit

(Note)

Ordinary Income

Millions of yen

Net Income/ Unitholders’EquityOrdinary Income/Total Ordinary Income/Ordinary
Revenues
Assets

yen

%

%

%

85

0.3

0.2

4.6

95

0.4

0.2

5.8

Net Income per Unit is rounded to the nearest yen.

Distributions
Distribution per
Unit (Excludingexcess profit
distribution per
unit)
Period ended

Distribution
AmountExcess Profit
Distribution per
Unit

Excess Profit
Distribution
AmountDividend Payout
Ratio

Distribution/
Net AssetsyenMillions of yen

yen

Millions of yen

%

%

117

157

0

0

137.6

0.5

―1―

December 2012
Period ended
June 2012(Note 1)

200

269

0

0

210.5

0.8

Invincible Investment Corporation (INV) reversed JPY 141 million out of surplus for the distribution for the fiscal period ended June 30, 2012.

As for the distribution for the fiscal period ended December 31, 2012, INV reversed JPY 43 million out of surplus and decided to distribute JPY 117 per unit.

(3)

Financial Position
Total Assets

As of December 31, 2012
As of June 30, 2012
(Note)(4)

Net Assets

Net Assets/Total Assets

Net Assets per Unit

Millions of yen

Millions of yen%

yen

80,20032,67040.7

24,231

67,69832,82648.5

24,346

Net Assets per Unit is rounded to the nearest yen.

Cash Flows

Cash Flows fromOperating Activities
Fiscal Period ended
December 31, 2012
Fiscal Period ended
June 30, 2012

Cash Flows from
Investment Activities

Cash Flows from
Financing Activities

Closing Balance of Cashand Cash Equivalents

Millions of yen

Millions of yen

Millions of yen

Millions of yen

878(14,412)

11,855

3,531

462

(42)

(412)

5,210

―2―

2.

Forecast for the Fiscal Period ending June 30, 2013 (from January 1, 2013 to June 30, 2013)(Percentages in brackets represent change from previous fiscal period)
Distribution per
Unit (excluding Excess Profit
Operating Income Ordinary Income
Net Income
excess profit Distribution per
distribution per
Unit
unit)

Operating
Revenues

Fiscal Period
endingJune 30, 2013

Millionsof yen%Millionsof yen%2,761(11.5)

1,183

(9.1)

Reversal of
SurplusFiscal Period
endingJune 30, 2013

Millionsof yen%280 (143.9)

Millionsof yen

%

yen

yen

280 (145.2)

200

0Distribution
AmountMillionsof yen%Millionsof yen

%

－

( － )

269

(70.9)(Reference) Estimated net income per unit for the fiscal period ending June 30, 2013 is JPY 207.

3.

Others(1) Changes in Accounting Policies, Accounting Estimates or Restatements(a) Changes in Accounting Policies due to Revisions toNoneAccounting Standards and Other Regulations(b) Changes in Accounting Policies due to Other Reasons
None(c) Changes in Accounting Estimates
None(d) Restatements
None(2) Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding as of the
December 31, 2012
End of the Fiscal Period (Including Treasury Units)(b) Number of Treasury Units at End of Fiscal Period December 31, 2012
(Note)

1,348,2920June 30, 2012
June 30, 2012

1,348,2920Please refer to the “Notes Related to Per Unit Information” on page 34 for the number of units used as a basis for calculating net income per unit.

※ The Implementation Status of Statutory Audit
At the time of this financial report, the audit procedures for the financial statements pursuant to the Financial Instruments andExchange Act are yet to be completed.
※ Explanation on the Appropriate Use of the Forecast of Results and Other Matters of Special Consideration（Explanation on the Appropriate Use of the Forecast of Results）
The forward-looking statements in this material are based on the information currently available to us and certain assumptions
which we believe are reasonable. Actual operating performance may differ significantly due to factors we cannot predict as ofthis date, including gains or losses from the disposition of properties, repayment of borrowings, decreases in rents and changes
in operating conditions. Further, there is no guarantee of the payment of the forecast distribution amount.
Please refer to “(2) Operating Condition / (b) Outlook for the Fiscal Period Ending June 30, 2013 / b. Operational Outlook /Assumptions for the Forecasts for the Fiscal Period ending June 30, 2013 (from January 1, 2013 to June 30, 2013)” on page 13
for assumptions used in the forecasts and precautions regarding the use of such forecasts.

―3―

1.

Related Companies of the Investment Corporation
Please refer to “Affiliate Companies of Invincible Investment Corporation” on page 51.

2.
(1)Management Policy and Operating Condition
Management Policy
Disclosure is omitted in the “Investment Policy” section of the latest securities report (filed on September 21, 2012) because
there have no material changes.
The investment corporation (the “Investment Corporation” or “INV”) amended a portion of its articles of incorporation at
the unitholders’ meeting held on November 30, 2012, which resulted in changes to its “investment target” and “distribution
policy”. For a description of the “Investment Target” and “Distribution Policy”, as revised, see p.55 though p.57.

(2)

Operating Condition(a) Overview of the Fiscal Period ended December 31, 2012
(i)

Main Trends in the 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, the Investment
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 to consolidate stock exchange
trading and to reduce operational and management costs associated with multiple listing, the Investment Corporation applied todelist 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 of properties.
However, the fund-raising environment surrounding the Investment Corporation continued to be extremely difficult, anddue to the absence of any concrete path to repaying its debts or extending its maturity payment dates, there resulted in there beinga “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 ofFortress Investment Group LLC (“FIG”) and together with its other affiliates, the “Fortress Group”), acting as the principal
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 the six
months ended December 31, 2012 (the “reporting period”). In connection with the acquisition of the 24 new properties, in order to―4―

fund the acquisitions and a portion of related costs, the Investment Corporation engaged in a refinancing, including throughincurring new debt in trust and increasing the existing loan amount. The Investment Corporation believes that through theacquisition 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.
b.

Investment Environment and Operational Performance
In the reporting period, although the Japanese economy continued to face difficulties, with factors such as reconstruction
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 a downward
risk for the Japanese economy, and there is need for concern regarding the prospect for the employment and consumption
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 is becoming
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 thenumber 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 Osakaand 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 a certain 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 in certain areas due toresidential demand resulting from the Great East Japan Earthquake. With respect to regions outside the major cities that sufferfrom 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, withrespect to certain businesses with strong operating results there are some signs of increased floor use and expansion.

―5―

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 a result, asshown below, the Investment Corporation’s portfolio has achieved an improvement in quality.

<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, andthe Investment Corporation believes that variations in rental revenues tend to be smaller than office buildings and other properties
due to the more stable occupancy rates. In order to secure stable cash flows in the medium to long term, the Investment
Corporation seeks to expand investments in residential properties through the acquisition of the 24 new properties. As a result, theinvestment 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 acquisition of
the 24 new properties, the investment ratio of the Investment Corporation’s portfolio in the Greater Tokyo Area decreased, and theinvestment 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)―6―

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 of theportfolio as a whole has improved.
(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, and total
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 thereporting 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 Loan B with the same interest rate and no new collateral.
The interest rate for the new loan in trust (JPY 9,960 million) is 1.9%, with maturities from 5.5 years to 7.5 years, resulting
in a decrease in the Investment Corporation’s average interest rate (Average debt interest rate (Note 1): 4.407% as of the priorperiod 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 per quarter).
(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

d.

Overview of Results of Operations and Distributions
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 that it hasestablished an earnings base for stable distributions comparable to earlier performance. However, as a result of certain one-time―7―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) + thesum 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)(b)

Outlook for the Fiscal Period Ending June 30, 2013
a. Future operational policy 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 earnings in the medium to long term. For the purpose of medium-to-long term earnings stability, residential properties willcontinue to be the core 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 order tofurther 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 expand 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, andconsider the appropriate properties, potential acquirers and disposition timing.

―8―

(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 continue 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.
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 thequality of property management through comprehensive supervision and direction of property management companies (“PMcompanies”) and conducting regularly 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 same time, comprehensive measures will be taken to control costs. Moreover, by utilizing the Asset Manager’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 occupancy 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 to increase
asset values, maintain and enhance product quality and market competitiveness and increase property occupancy rates andprofitability. 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 and executing plans formaintaining the Investment Corporations’ earnings and distribution stability, and seeking to diversify and standardize execution
timing and costs.
Based on such measures, the Investment Corporation will have as its target the maximization 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―9―

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 reductions 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.
(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 financial 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 compliance 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 charge 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 compliance committee
member, contributes to the Asset Manager’s compliance by ensuring the compliance of related party transactions from thestandpoint of such expert’s expertise and experience and promoting restraint in decision-making as a third party.

―10―

The Investment Corporation will take steps to further strengthen its compliance structure to contribute to the transparency
and health of its operations.
(v) Significant subsequent events
Nothing applicable.

b. Operational Outlook
Based on the enhancement of earnings potential achieved by the acquisition of 24 properties, the forecast for the fiscal
period ending June 30, 2013 is for, as set forth below, operating revenues of JPY 2,761 million, ordinary income of JPY 280
million, net income of JPY 280 million, and distribution per unit at a level compared to earlier periods.
Fiscal period ending June 30, 2013 (from January 1, 2013 to June 30, 2013)
Operating Revenues

JPY 2,761 million

Ordinary Income

JPY 280 million

Net Income

JPY 280 million

Distribution per unit

JPY 200

Excess Profit Distributions per unit

JPY 0

With respect to operating revenue, the forecast assumes an increase of JPY 284 million compared to the JPY 2,746 million
recorded in the reporting period. This reflects principally the fact that revenue attributable to the 24 new properties (rent revenues,
common area charges, parking lot fees, facility usage fees) contributed to only 95 out of the 184 days in the reporting period, butwill contribute to the entirety of the next fiscal period. In addition, the forecast assumes an increase in key money and othermiscellaneous revenues for February and March, which is a busy period in the rental market.
With respect to operating expenses, the Investment Corporation assumes that, based on its diligent efforts to reduce
operational expenses, it will reduce asset management fees and other fees (including administrative agent fees and fees paid toexperts) by JPY 12 million. Regarding property-related expenses, the forecast assumes an increase of JPY 187 million resulting
from the acquisition of the 24 new properties and certain seasonal factors, contributing to a total increase of JPY 185 million from
JPY 1,392 million for the reporting period to JPY 1,578 million.
In addition, with respect to non-operating expenses, the forecast assumes a decrease on JPY 110 million in financing related
costs. This is due to one-time expenses that were incurred in the reporting period in connection with the new borrowings andrefinancing that are not expected to occur during the next fiscal period. Furthermore, interest expense is assume to increase JPY
39 million as a result of the new borrowings and increase in borrowings from the refinancing, from JPY 763 million for thereporting period to JPY 803 million. As a result of the above, non-operating expenses are expected to decrease JPY 70 million
from JPY 972 million for the reporting period to JPY 902 million for the next fiscal period.
With respect to per unit distribution amount, as announced at the time of the previous forecast announcement on September
26, 2012, in order to enhance stability in the maintenance of the earlier distribution level from a medium to long term perspective,
a portion of the forecasted net income will be retained as a reserve for future distribution. Based on an overall consideration of theoperating condition of all 78 properties since the acquisition of the 24 new properties, the Investment Corporation’s financial
condition and the liquidity of funds on hand, the forecast assumes that, from forecasted net income of JPY 207 per unit, thedistribution per unit will be JPY 200, as previously announced, and from a medium to long term perspective the remaining amountwill be retained as a reserve for future distributions.

―11―When considering the JPY 59 million yen amortization of negative goodwill resulting from the Merger that needs to be
added for this purpose, the per unit distribution of JPY 200 for the next fiscal period does not satisfy the requirement to distribute
90% of distributable income, and thus the conduit requirements for the fiscal period ending June 2013 is not expected to besatisfied. However, due to disposition of properties in the past, the Investment Corporation has tax loss carry forwards of JPY 20,
561 million (as of December 31, 2012), and thus no corporation tax is expected to be levied.

For the operation outlook for the period ending June 30, 2013, please refer to the following section below: “Assumptions for
the Forecasts for the Fiscal Period ending June 30, 2013 (from January 1, 2013 to June 30, 2013)”.

Cautionary Note regarding Forward Looking Statements
Forward looking statements such as the forecasts set forth herein are based on information currently available and certain
assumptions that are deemed reasonable. Actual operating performance may vary significantly due to factors not foreseen at the timeof this present notice, such as the occurrence of gains and losses associated with the sale of properties, repayment of borrowings and adecrease in rent received. Also, this forecast is not a guarantee of distribution amounts.

―12―

Assumptions for the Forecasts for the Fiscal Period ending June 30, 2013 (from January 1, 2013 to June 30, 2013)
Item
Fiscal period

Assets under management

Units outstanding

Interest-bearing liabilities

Operating revenues

Operating expenses

Assumptions
From January 1, 2013 to June 30, 2013 (181 day period)
INV assumes the number of properties is 78 properties based on the number ofproperties held by INV as of today. In addition, INV assumes there will be newacquisitions or disposals of existing properties thereafter through to the end of the fiscal
period.
INV assumes the number of units issued and outstanding is 1,348,292 units, which isbased on the number of units issued by INV as of today. Also, INV assumes there will be
no additional issuance of investment units thereafter through to the end of the fiscal
period.
The repayments of JPY 131 million are scheduled to be made by two scheduled
repayment during the fiscal period ending June 2013 and INV assumes there will be no
new financing or no additional repayments of the existing borrowings other than thescheduled repayments.
INV assumes it will earn operating revenues of JPY 2,761 million for the fiscal period.
The breakdown is as follows:・Rental revenues JPY 2,761 million
Rental revenues are calculated based on historical data and taking into account tenant
trends, property competitiveness, the market environment and other factors. In addition,
INV assumes there will be no delinquencies or non-payment of rent by tenants.
INV assumes it will incur property-related expenses of JPY 1,339 million. The
breakdown is as follows
JPY 471 million
・Facility management fees(of this amount, JPY 50 million are for repair costs)
JPY 155 million
・Taxes and other public charges
JPY 5 million
・Insurance expenses
JPY 168 million
・Other expenses
JPY 537 million
・Depreciation expenses
Other than depreciation expenses, the property related expenses are calculated based on
historical data and reflect elements that may cause fluctuations. Of the assessed anddecided amount of real property tax, city planning tax, depreciable property tax, etc.
applicable to assets under management, INV records as expenses the tax amount that it
expects to pay during the fiscal periods. Furthermore, concerning assets newly acquired
during the year in which the fiscal periods falls, the tax amount is calculated on a prorata basis with the prior titleholder, and this adjusted amount is reimbursed at the time ofacquisition. INV, however, capitalizes an amount equivalent to the adjusted amountreimbursed as part of the acquisition cost, and thus does not record the amount as
expenses.
Repair costs may vary due to the changes in the situation etc., though they are estimatedbased on the repair plans created by the Asset Manager.

Non-operating expenses

Distribution per unit

Other than these property-related expenses, INV assumes it will incur operating
expenses of JPY 239 million for the fiscal period.
INV assumes it will incur non-operating expenses of JPY 902 million for the fiscal
period. The breakdown is as follows:
JPY 803 million
・Interest expenses
JPY 98 million
・Finance related costs
JPY
1 million
・Other non-operating expenses
JPY 902 million
The distribution per unit is calculated in accordance with the cash distribution policy set
forth in INV’s articles of incorporation.
INV assumes it will pay the distribution using net income as the source, and plans to
distribute JPY 269 million (JPY 200 per unit) for fiscal period June 2013.
The distribution per unit may vary due to various factors, such as fluctuations in rental
revenues resulting from changes in the assets under management, changes in the tenants,
etc. and incurrence of unexpected repairs.

―13―

Excess profit distribution per unit

INV currently does not expect to make distributions in excess of profits (excess profit
distribution per unit).

Other

INV assumes there will be no amendments to laws and ordinances, the taxation system,
accounting standards and other regulations that will affect the foregoing forecasts.
In addition, INV assumes there will no unforeseen material changes in the market
environment, including general economic trends and real estate market conditions.

―14―

3.

Financial Statements(1)

Balance Sheets
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)

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

237,741

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

175,265

220,693※1

106,361(45,055)

123,699(54,255)

61,30569,443※1

31,056,639

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 investments and other assets

302,669

292,787

Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets―15―

Total non-current Assets
Total Assets

Fiscal Period ended
June 30, 2012
(As of June 30, 2012)
61,585,498(Unit: thousands of yen)
Fiscal Period ended
December 31, 2012
(As of December 31, 2012)
75,635,874

67,698,887

80,200,022

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

32,826,175

32,670,697

32,826,175

32,670,697

67,698,887

80,200,022

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※3

Total Liabilities and Net Assets

―16―

(2)

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

Operating Revenues
Rental revenues※1(Unit: thousands of yen)
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’ remuneration※1

Non-operating Revenues
Interest revenues
Miscellaneous income
Total Non-operating Revenues
Non-operating Expenses
Interest expenses

695,689763,201

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

―17―

(3)

Statement of Unitholders’ Equity(Unit: thousands of yen)
Fiscal Period ended
December 31, 2012
(from July 1, 2012
to December 31, 2012)

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

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

Unappropriated Retained Earnings/Loss

Total Surplus

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 Unitholders’ Equity

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 Net Assets

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

Balance at the end of the period

32,826,175

32,670,697

―18―

(4)

Statement of Cash Distribution
Fiscal Period ended June 30, 2012
(from July 1, 2012 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

ⅡDistribution Amount

269,658,400 yen

157,750,164 yen(200 yen)(117 yen)

157,688,394 yen

114,118,094 yen(Distribution per Unit)
Ⅲ

Retained earnings carried forward

Calculation
amountmethodofdistribution In accordance with the distribution policy In accordance with the distribution policy
set forth in Article 17, Paragraph 1 of the set forth in Article 17, Paragraph 1 of the
Articles of Incorporation of INV, the Articles of Incorporation of INV, thedistribution amount shall be the amount distribution amount shall be the amountwhich does not exceed the amount of which does not exceed the amount of
profits but exceeds 90% of the profits but exceeds 90% of the
distributable profit as defined in Article distributable profit as defined in Article
67-15 of the Special Taxation Measures 67-15 of the Special Taxation Measures
Act. Pursuant to this policy, INV Act. However, in the event that any tax
determined the distribution amount to be losses arise, or if no profits have been
269,658,400 yen, which is the sum of net recorded for tax purposes due to tax
income of 128,175,038 yen and reversal losses carried forward, the distributionof surplus of 141,483,362 yen. INV did amount may be as reasonably determined
not distribute any amounts in excess of by INV. Pursuant to this policy, INV
profit, as set forth in Article 17, determined the distribution amount to be
Paragraph 4 of the Articles of 157,750,164 yen, which is the sum of net
income of 114,179,864 yen and reversal
Incorporation.
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 ofIncorporation.

―19―

(5)

Statement of Cash Flows
Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)(Unit: thousands of yen)
Fiscal Period ended
December 31, 2012
(from July 1, 2012 to
December 31, 2012)

Cash Flows from Operating Activities
Net income/loss before taxes

125,981

114,784

Depreciation expenses
Investment unit issuance expenses

412,1101,230

481,000
1,230

Finance related costs
Amortization of tenant leasehold and security deposits

73,562(927)

208,347(1,354)

Interest received
Interest paid

(515)
695,689(487)
763,201

519
(902)

(33)
733

Decrease (increase) in deposit payments
Decrease (increase) in consumption tax receivable(49,446)(23,311)

6,308(92,135)

Increase (decrease) in accrued consumption tax payable
Increase (decrease) in accounts payable(59,401)(38,383)

62,798

Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses

(344)
(570)

13,696(31,930)

Increase (decrease) in advances received
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

Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in accounts receivable

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

※1

―20―

(6)

Notes Concerning Going Concerns Assumption

None
(7)

Notes Concerning Significant Accounting Policies

1.

Method of depreciation of non-current assets(a)Property, plant and equipment

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

40-77 years

Equipment

3-24 years

Building improvements

3-18 years

Buildings in trust

6-66 years

Equipment in trust

3-32 years

Building improvements in trust

3-55 years

Tools, furniture and fixtures in

2-15 years

trust
(b)

Intangible assets

The straight-line method is used.
(c)Long-term prepaid expenses

The straight-line method is used.
2.

Method of calculating allowances

Allowance for doubtful accounts
To reserve for losses on doubtful accounts, allowances are provided for normal receivables using a rate determined based on past bad
debt experiences, and specific allowances are provided for accounts with a possibility of default based on the estimated amounts
considered to be uncollectible by considering the collectability of accounts on an individual basis.
3.

Revenue and expense recognition

Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessed and determined, the amountcorresponding to the relevant fiscal period is accounted for as property related expenses.
Of the amounts paid to the seller for acquisitions of real estate, the amount equivalent to property taxes is capitalized as part of theacquisition cost of the real estate instead of being charged as expense. The equivalent to property taxes that was included as part of theacquisition of real estate during this fiscal period is 16,270 thousand yen.
4.

Cash and cash equivalents as stated in Statement of Cash Flows

Cash and cash equivalents as stated in the Statement of Cash Flows consist of cash on hand and cash in trust, floating deposits,
deposits in trust and short-term investments that are very liquid and realizable with a maturity of three months or less when purchased
and that are subject to insignificant risks of changes in value.
5.

Other significant matters which constitute the basis for preparation of financial statements(1) Accounting treatment of trust beneficiary interests of real estate
As to trust beneficiary interests of real estate, all accounts of assets and liabilities within assets in trust, as well as all income generated
and expenses incurred from assets in trust, are recorded in the relevant balance sheets and income statement accounts. Of such items,
the following significant trust assets and liabilities are shown separately on the balance sheet.
Cash and deposits in trust
Buildings in trust, equipment in trust, building improvements in trust, tools, furniture and fixtures in trust and land in trust
Tenant leasehold and security deposits in trust
Long-term debts in trust(2) Accounting treatment of consumption taxes―21―

Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
(8)Notes to the Financial Statements(Notes to the Balance Sheets)※1.

Assets pledged as collateral and liabilities with collateral

Assets pledged as collateral are as follows.
(Unit: thousands of yen)
Fiscal Period ended
June 30, 2012(as of June 30, 2012)
2,130,105

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

Cash and deposits in trust

3,209,656

5,328,309

Building improvements in trust

175,265

220,693

Tools, furniture and fixtures in trust

61,30569,44331,056,639

36,582,527

63,412,312

78,129,323

Fiscal Period ended
June 30, 2012(as of June 30, 2012)

Fiscal Period ended
December 31, 2012(as of December 31, 2012)Land in trust
Total
Liabilities with collateral are as follows.
(Unit: thousands of yen)

Current portion of long-term debts
Long-term debts
Long-term debts in trust
Total
※2.

262,000

262,000

20,341,500

22,760,500

11,000,000

20,960,000

31,603,500

43,982,500

Represents amounts entrusted to financial institutions for the purpose of repayment of borrowings in trust from such financial

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
Fiscal Period ended
June 30, 2012
December 31, 2012(as of June 30, 2012)(as of December 31, 2012)
50,00050,000―22―

(Notes to Statement of Income)※1. Rental revenues and property related expenses are as follows:(Unit: thousands of yen)
Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)
A. Rental revenues
Rent/common area charges

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

1,996,336

2,300,764

180,502

175,665

2,176,839

2,476,430

Maintenance costs

359,308

403,390

Taxes and public dues

146,563

141,455

Insurance expenses

Other revenues
Total
B.

Property related 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.

1,152,562

1,319,757

Operating income from rental revenues (A-B)(Notes to Statement of Unitholders’ Equity)
Number of investment units authorized and number of investment units issued and outstanding
Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)
Number of investment units authorized
10,000,000 units
Number of investment units issued and outstanding

1,348,292 units

Fiscal Period ended
December 31, 2012
(from July 1, 2012 to
December 31, 2012)
10,000,000 units
1,348,292 units(Notes to Statement of Cash Flow)※1.

Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying balance sheet(Unit: thousands of yen)
Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)

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

Cash and deposits

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―23―

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

Due within one year

112,249

112,249

Due after one year

2,504,787

2,448,662

Total

2,617,036

2,560,911

Fiscal Period ended
June 30, 2012(as of June 30, 2012)

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

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

Due within one year

674,516

674,516

Due after one year

7,933,109

7,595,851

Total

8,607,625

8,270,367(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 toensure stable income in the medium to long term.
The policy for raising funds is principally through issuing new investment units or entering into debt.
Derivative transactions are to be entered into for the purpose of hedging against the rate of future interest rate increases, etc. and not
for speculation. There are currently no derivative transactions that have been entered into.
Surplus funds are managed carefully after carefully taking into account safety, liquidity, the interest rate environment and financing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings are mainly used to acquire real estate properties or properties in trust (including relatedacquisition costs) and for the repayment of existing debt. Liquidity risks relating to debt are managed by the planning/financedepartment 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, fairvalue is estimated using valuation techniques which contain various assumptions. If other valuation models or assumptions were used,the estimated value may differ.

―24―

2.

Estimated Fair Value of Financial Instruments

Book value, fair value and the difference between values as of June 30, 2012 are as follows.
(Unit: thousands of yen)Book value
Fair value

Difference(1) Cash and deposits

3,080,041

3,080,041―(2) Cash and deposits in trust

2,130,105

2,130,105―

Total assets

5,210,146

5,210,146―

262,000

262,025

25(4) Long-term debts

20,341,500

20,369,393

27,893(5) Long-term debts in trust

11,000,000

11,097,830

97,83031,603,500

31,729,249

125,749(3) Current portion of long-term debts

Total liabilities

Book value, fair value and the difference between values as of December 31, 2012 are as follow.
(Unit: thousands of yen)Book value
Fair value

Difference

745,429

745,429―(2) Cash and deposits in trust

2,786,480

2,786,480―

Total assets

3,531,910

3,531,910―

262,000

262,039

39(4) Long-term debts

22,760,500

22,788,497

27,997(5) Long-term debts in trust

20,960,000

21,195,979

235,979

43,982,500

44,246,517

264,017(1) Cash and deposits(3) Current portion of long-term debts

Total liabilities(Note 1) Methods to calculate fair values of financial instruments(1) Cash and deposits (2) Cash and deposits in trust
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of the fair value, and therefore,
the book value is used as the fair value.
(3) Current portion of long-term debts (4) Long-term debts (5) Long-term debts in trust
The fair values of long-term debt with fixed interest rates are determined based on the present value of contractual cash flows
discounted at current market interest rates which would be applicable to new debt with the same amount. Long-term debt with floatinginterest rates reflecting changes in market rates within a short term period are stated at their book value as their book value
approximate their fair values.
(Note 2) Financial instruments for which fair value is extremely difficult to value(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)

Tenant leasehold and security
183,579
183,579
deposits
Tenant leasehold and security
925,696
1,059,315
deposits in trust
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 the timing of
the lessee’s exit from the property are not certain. Thus, their fair value is not disclosed.

―25―

(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

―

―

―

―

―

5,210,146

―

―

―

―

―

Total
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
Cash and deposits in trust
Total

745,429

―

―

―

―

―

2,786,480

―

―

―

―

―

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
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

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
Long-term debts
Long-term debts in trust
Total

262,000―――

13,324,500

9,436,000

―

―

―

―

105,833

450,442516,273

3,819,427

16,068,022

262,000

13,430,333

9,886,442

516,273

3,819,427

16,068,022

―26―

―

―

―

(Notes Related to Investment Securities)
None(Notes Related to Derivative Transactions)
None(Notes Related to Retirements Payments)
None(Notes Related to Asset Retirement Obligations)
None(Notes Related to Segment and Related Information)
I.

Segment Information

Disclosure is omitted because the real estate investment business if the Investment Corporation’s sole business and it has no reportablesegments.
II.

Related Information

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

Information about each product and service

Disclosure is omitted because net sales to external customers for a single product/service category accounted for over 90% of theoperating revenue on the statement of income.
2.

Information about each geographic area

(1) Net sales
Disclosure is omitted because net sales to external customer in Japan accounted for over 90% of the operating revenue on thestatement of income.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounted for over 90% of the amount ofproperty, plant and equipment on the balance sheet.
3.

Information about each major customer

Disclosure is omitted because net sales to any single external customer accounted for less than 10% of the operating revenue on thestatement of income.
Fiscal Period ended December 31, 2012（from July 1, 2012 to December 31, 2012）
1.

Information about each product and service

Disclosure is omitted because net sales to external customers for a single product/service category accounted for over 90% of theoperating revenue on the statement of income.
2.

Information about each geographic area

(1) Net sales
Disclosure is omitted because net sales to external customer in Japan accounted for over 90% of the operating revenue on thestatement of income.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounted for over 90% of the amount ofproperty, plant and equipment on the balance sheet.
3.

Information about each major customer
Disclosure is omitted because net sales to any single external customer accounted for less than 10% of the operating

revenue on the statement of income.

―27―

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

Book value
Residential

Balance at the
beginning of theperiodChange during theperiodBalance at the endof the period

Fair value at the end of the period

Book value
OfficeBalance at the
beginning of theperiodChange during theperiodBalance at the endof the period

Fair value at the end of the period

Book value
RetailBalance at the
beginning of theperiodChange during theperiodBalance at the endof the period

Fair value at the end of the period

Book value
Parking

Balance at the
beginning of theperiodChange during theperiodBalance at the endof the period

Fair value at the end of the period

Book value
SeniorBalance at the
beginning of theperiodChange during theperiodBalance at the endof the period

Fair value at the end of the period

Book Value
Total

Balance at the
beginning of theperiodChange during theperiodBalance at the endof the period

Fair value at the end of the period(Note 1)

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

42,941,963

42,701,472(240,490)

14,144,274

42,701,472

56,845,746

41,825,000

56,237,000

8,626,170

8,567,280(58,889)(9,898)8,567,280

8,557,382

7,312,000

7,237,000

5,491,912

5,442,452(49,460)(44,824)

5,442,452

5,397,628

5,170,000

5,210,000

100,892

100,878

(13)

(13)

100,878

100,865

91,30091,3004,499,026

4,470,123(28,903)(28,903)4,470,123

4,441,219

4,708,000

4,708,000

61,659,964

61,282,207(377,757)

14,060,634

61,282,207

75,342,842

59,106,300

73,483,300

Book value is the figure calculated by decreasing the amount of depreciation from acquisition price (including acquisition-―28―

related costs).
(Note 2) The major factor of the decrease for the fiscal period ended June 30, 2012 was depreciation. The major factor of theincrease for the fiscal period ended December 31, 2012 was acquisition of new properties and the major factor of the decrease wasdepreciation.
(Note 3) The fair value as of the end of the reporting period is determined based on the appraisal value provided by Tanizawa Sogo
Appraisal Co., Ltd., Asset Research and Development Inc., Japan Real Estate Institute and Morii Appraisal & Investment ConsultingInc.
For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income.”―29―

(Notes Related to Retirement Payment)

1. Significant components of deferred tax assets and liabilities(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)

Deferred tax assets - current assets
Enterprise tax payable

544

564

Rental receivables (merger)

211

211

Allowance for doubtful accounts

304

291

6,454

6,454

Accrued expenses
Subtotal

7,515

7,522

Valuation allowance
Total
Net deferred tax assets – current

7,515

7,522

－

－

－

－

Buildings and other (merger)

1,227,581

1,208,736

Land (merger)

2,547,099

2,547,099

Deferred tax assets – non-current assets

Long-term accrued expenses

517,072

513,845

Net loss carried forward

7,023,707

7,023,707

Subtotal

11,315,460

11,293,388

Valuation allowance
Total
Net deferred tax assets – non-current

11,315,460

11,293,388

－

－

－

－

2. Significant difference between statutory income tax rate and the effective tax rate
(Unit: %)Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)
Statutory tax rate
39.33
(20.06)

Deductible cash distributions
Provision of reserve for reduction entry
Others(Notes Related to Equity-Method Income)
None.

―30―

36.59
(17.47)(19.27)(19.22)

0.48

0.53

0.48

Effective tax rate

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

0.63

(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

Interested
Party of the
Asset
Manager

Name

Statedcapital Type of
Address(millions businessof yen)

Shinsei Trust
Chuo-ku,and Banking
TokyoCo., Ltd.

5,000

FinancialBusiness% ofvotingrightsowned―

Transaction
EndingamountbalanceTypeofCommon BusinessAccount(thousands(thousands
board relation- transactionof yen)of yen)member ship
(Note 1)
(Note 1)
Repaymentof longRepayment of
9,716,000
term debts 56,000
long-term debts(Note 2)
(Note 3)Long-term
prepaid143,196
expenses
Prepaid―
Lender
90,270expensesFinance
43,927
related fees
Long-term
accrued
1,413,153
expenses
Accrued17,640expenses
Interest
Accrued425,928
149,395
expenses
expenses
Relationship(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 financing includes transactions for which Calliope, which became the parent company of the Asset Manager on July29, 2011, had a portion of the economic benefit.
(Note 3) Calliope holds 609,942 units (holding ratio: 45.23%) of the issued investment units of the Company.
Fiscal Period ended December 31, 2012 (from July 1, 2012 to December 31, 2012)

Classification

Interested
Party of the
Asset
ManagerInterested
Party of the
Asset
Manager(Note 4)

Name

Statedcapital Type of
Address(millions businessof yen)% ofvotingrightsowned

Shinsei Trust
Chuo-ku,and Banking
TokyoCo., Ltd.

5,000

FinancialBusiness―

MinatoRhodia
Godo Kaishaku,(Note 4)
Tokyo

0.1

FinancialBusiness―

Transaction
EndingamountbalanceTypeofCommon BusinessAccount(thousands(thousands
board relation- transactionof yen)of yen)member ship
(Note 1)
(Note 1)
Repaymentof longRepayment of
9,660,000
term debts 56,000
long-term debts(Note 2)
(Note 3)Long-term
prepaid
97,690expenses
Prepaid―
Lender
90,270expensesFinance
45,506
related fees
Long-term
accrued
1,404,333
expenses
Accrued17,640expenses
Interest
Accrued428,601
141,503
expenses
expensesAcquisitionof trust
Seller of
beneficiary
trustinterests of―
14,043,000――
benefici
properties
ary
in trust
interests (Note 5)(Note 6)
Relationship―31―

(Note 1)(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)

Consumption taxes are not included in transaction amounts, but are included in the balance at the end of the period.
The financing includes transactions for which Calliope, which became the parent company of the Asset Manager on July29, 2011, had a portion of the economic benefit.
Calliope holds 609,942 units (holding ratio: 45.23%) of the issued investment units of the Company.
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.
The acquisition of the trust beneficiary interests relates to the properties below. Transaction amount is the purchase amountset 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.
The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regardingtransactions with the sponsor company.

Property number

Name of property

Purchase and Sale Price(thousands of yen)A76

Neo Prominence

1,660,000

A77

Invoice Shin-Kobe Residence

1,260,000

A78

Cosmo Court Motomachi

973,000

A79

Revest Honjin

674,000

A80

Revest Matsubara

657,000

A81

Sun Terrace Minami Ikebukuro

625,000

A82

Alba Noritake Shinmachi

608,000

A83

Revest Meieki Minami

597,000

A84

Revest Heian

595,000

A85

Vendir Hamaotsu Ekimae

581,000

A86

Salvo Sala

544,000

A87

Excellente Kagurazaka

543,000

A88

Luna Court Edobori

525,000

A89

Winntage Kobe Motomachi

512,000

A90

Queen's Court Fukuzumi

456,000

A91

Corp Higashinotoin

446,000

A92

Belair Oimachi

412,000

A93

Siete Minami-Tsukaguchi

374,000

A94

Prime Life Sannomiya Isogami Koen

373,000

A95

HERMITAGE NANBA WEST

355,000

A96

Century Park Shinkawa 1-bankan

335,000

A97

West Avenue

331,000

A98

Little River Honmachibashi

310,000

A99

Prime Life Mikage

297,000

Total

14,043,000

―32―

2.

Transactions with Affiliates
None for both the fiscal period ended December 31, 2012 and the fiscal period ended June 30, 2013

3.

Transactions with Companies under Common Control
None for both the fiscal period ended December 31, 2012 and the fiscal period ended June 30, 2013

4.

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

Classification

Directors andclose relatives

Same as above(Note 1)
(Note 2)

(Note 3)Name

Business or occupation

Executive Director of theInvestment Corporation
Naoki
and President & CEO of
Shibatsuji
Consonant Investment
Management Co., Ltd.

Same asabove

Same as above

Balance atthe End of
the Period(thousands ofyen)(Note 3)

Ratio ofvoting rights

Details of transaction

Transaction
amount(thousands ofyen)(Note 3)－

Payment of asset
management fees toConsonant Investment
Management Co., Ltd. (Note1)

150,000

Trade andother
payables

78,750－

Payment of generaladministration fees fororganizational management
to Consonant Investment
Management Co., Ltd. (Note2)

600

Trade andother
payables315

Account

Naoki Shibatsuji served as a representative of the third party (Consonant Investment Management Co., Ltd.), and the fee is
as set forth in the Articles of Incorporation of the Investment Corporation.
Naoki Shibatsuji served as a representative of the third party (Consonant Investment Management Co., Ltd.), and the fee is
as set forth in the agreement, “General Administrative Agreement relating to Organizational Management, between theInvestment Corporation and Consonant Investment Management Co., Ltd.
Consumption taxes are not included in transaction amounts, but are included in the balance of the end of the period.

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

Classification

Directors andclose relatives

Same as above(Note 1)
(Note 2)

(Note 3)Name

Business or occupation

Executive Director of theInvestment Corporation andNaoki
President & CEO of
Shibatsuji
Consonant Investment
Management Co., Ltd.

Same asabove

Same as above

Balance atthe end of theperiod(thousands ofyen)(Note 3)

Ratio ofvoting rights

Details of transactions

Transaction
amount(thousands ofyen)(Note 3)－

Payment of asset
management fees toConsonant Investment
Management Co., Ltd. (Note1)

130,067

Trade andother
payables－－Payment of generaladministration fees fororganizational management
to Consonant Investment
Management Co., Ltd. (Note2)

11,000Trade andother
payables630

Account

Naoki Shibatsuji served as a representative of the third party (Consonant Investment Management Co., Ltd.), and the fee is
as set forth in the Articles of Incorporation of the Investment Corporation.
Naoki Shibatsuji served as a representative of the third party (Consonant Investment Management Co., Ltd.), and the fee is
as set forth in the agreement, “General Administrative Agreement relating to Organizational Management, between theInvestment Corporation and Consonant Investment Management Co., Ltd.
Consumption taxes are not included in transaction amounts, but are included in the balance of the end of the period.

―33―

(Notes Related to Per Unit Information)

Net assets per unit

For the Fiscal Period ended
June 30, 2012
(from January 1, 2012
to June 30, 2012)
24,346 yen

Net income per unit

For the Fiscal Period ended
December 31, 2012
(from July 1, 2012 to
December 31, 2012)
24,231 yen

95 yen85 yenNet income per unit is calculated by dividing net income for the period by the daily weighted average number of investment
units issued and outstanding. Diluted net income is not stated as there are no diluted units.
(Note) The basis for calculating net income/loss per unit is as follows.

Net income/loss for the fiscal period (thousands of yen)Amounts not attributable to common unit holders(thousands of yen)
Net income/loss attributable to common unit holders(thousands of yen)
Average number of investment units during the period(unit)

Fiscal Period ended
June 30, 2012
(January 1, 2012
to June 30, 2012)
128,175

Fiscal Period ended
December 31, 2012
(July 1, 2012 to
December 31, 2012)
114,179――

128,175

114,179

1,348,292

1,348,292(Significant Subsequent Events)
None.

―34―

(9)

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 of establishment to theend of the reported fiscal period is as follows.
Number of investment units
issued and outstanding (units)
DateType of issue
Increase
Total
Private placement
January 18, 2002
400
400
for incorporation
December 26, 2003 Private placement
2,700
3,100

Unitholders’ equity (yen)Reference

Increase

Total

200,000,000

200,000,000(Note 1)

1,012,500,000

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

Private Placement

1,350

4,450

506,250,000

1,718,750,000(Note 2)January 21, 2003

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

MergerThird-party
allotment

367,200

636,695―

19,134,417,100(Note 7)

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 8)July 29, 2011
(Note 1)The Investment Corporation was incorporated through a private placement at a price of 500,000 yen per unit.

(Note 2)

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.

(Note 3)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(Note 4)

New investment units were issued in a public offering at a price of 385,140 yen per unit (369,734 yen after deducting the underwriters’(Note 5)New investment units were issued in a public offering at a price of 348,740 yen per unit (332,045 yen after deducting the underwriters’raise funds for the acquisition of new properties.
discount) to raise funds for the acquisition of new properties.
discount) to raise funds for the acquisition of new properties.
(Note 6)

An investment unit slit of 5 units per 1 unit was conducted.

(Note 7)A merger by absorption pursuant to Article 147 of the Act on Investment Trusts and Investment Corporations was conducted with LCP, with theInvestment Corporation as the surviving entity. As a result of the merger by absorption, 4 investment units of the Investment 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.

(Note 8)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.

―35―

4.

Change in Directors(1)

Changes in directors of the Investment Corporation

There were no changes in the Investment Corporation’s directors during the fiscal period. For the status of the directors as of today,
please refer to the latest securities report (filed on September 21, 2012).

(2)

Changes in the directors of the Asset Manager.

There were no changes in the Asset Manager’s directors during the fiscal period. For the status of the directors as of today, pleaserefer to the latest securities report (filed on September 21, 2012).

―36―

5.

Reference Information(1)

Composition of Investment Corporation’s Assets

Type of
Asset

Geographic area

Purpose(Note 1)

Greater Tokyo
area
Major regional
citiesSubtotal
Greater Tokyo
area
Major regional
citiesSubtotal
Greater Tokyo
area
Major regional
citiesSubtotal

－

－

－

－

－

－

－

－

－

－

－

719

1.1

717

0.9

－

－

－

－

719

1.1

717

0.9

3,096

4.6

3,078

3.8

1,474

2.2

1,463

1.8

4,571

6.8

4,542

5.7

5,290

7.8

5,259

6.6

40,61860.0

44,512

55.5

2,082

3.1

12,333

15.4

42,701

63.1

56,845

70.9

7,087

10.5

7,089

8.8

6,202

9.2

6,147

7.7

13,29019.6

13,237

16.5

－

－

－

－

－

－

－

－

－

－

－

－

Total real estate in trust

55,991

82.7

70,083

87.4

Deposits and other assets

6,416

9.5

4,857

6.1

Office/Retail

Senior, hourly
parking, etc.
Total real estate

ResidentialRealestate intrust

Fiscal Period ended
December 31, 2012(as of December 31, 2012)
Ratio of total
Amount held
assets(millions of yen)
(Note 2)(%)－

ResidentialRealestateFiscal Period ended
June 30, 2012(as of June 30, 2012)
Ratio of total
Amount held
assets(millions of yen)
(Note 2)(%)

Office/Retail

Senior, hourly
parking, etc.

Greater Tokyo
area
Major regional
citiesSubtotal
Greater Tokyo
area
Major regional
citiesSubtotal
Greater Tokyo
area
Major regional
citiesSubtotal

Total assets (Note 3)

67,698100.0

80,200100.0(61,282)(90.5)(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 balance sheet as of the end of the reporting period and is calculated by decreasing accumulated depreciation from theacquisition price (including acquisition related costs).

(Note 3)

The figure indicated in“()” in “total assets” shows the amount related to actual owned real estate.

Fiscal Period ended June 30, 2012(as of June 30, 2012)

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

Amount (millions of yen) Ratio to total assets (%) Amount (millions of yen) Ratio to total assets (%)
Total Liabilities

34,87251.5

47,52959.3

Total Net Assets
Total Liabilities and Net
Assets32,82648.5

32,67040.7

67,698100.0

80,200

100.0

―37―

(2)

Real Estate Properties
The following summarizes the real estate and real estate held in trust of the Investment Corporation held as of December 31,

2012.
(a)
Property
number(Note 1)Price and investment ratio

Name of property

A26 Nisshin Palacestage Daitabashi

A27

Nisshin Palacestage HigashiNagasaki

A28 Growth Maison Gotanda

A29 Growth Maison Kameido

A30 Emerald House

A31 Harmonie Ochanomizu

A32 Suncrest Shakujii-Koen

A33 Growth Maison Shin-Yokohama

A34 Belle Face Ueno-Okachimachi

A35 Grand Rire Kameido

A36 Growth Maison Ikebukuro

A37 Growth Maison Yoga

A38 Route Tachikawa

A39 Shibuya-Honmachi Mansion

A40 City Heights Kinuta

A41

Acseeds Tower KawaguchiNamiki

A42 Capital Heights Kagurazaka

A43 College Square Machida

A44 Belair Meguro

A45 Wacore Tsunashima I

A46 Foros Nakamurabashi
A47 Growth Maison Kaijin

Location (Note 2)

Balance
Appraisal value as
Acquisition
Investment
sheet
of December 31,
priceType ofratio
carrying
2012(millions(%)
value
ownership of yen)(millions of yen)(millions (Note 4)(Note 5)(Note 3)of yen)Trustbeneficiaryinterests
Trustbeneficiary
5-4-1 Nagasaki, Toshima Ward, Tokyo
interests
Trust
2-26-6 Nishi-Gotanda, Shinagawa Ward,beneficiaryTokyo
interests
Trust
6-58-16 Kameido, Koto Ward, Tokyo
beneficiaryinterests
Trust
3-27-18 Itabashi, Itabashi Ward, Tokyo
beneficiaryinterests
Trust
2-5-5 Yushima, Bunkyo Ward, Tokyo
beneficiaryinterests
Trust
3-15-35 Takanodai, Nerima Ward, Tokyo beneficiaryinterests
Trust
3-16-2 Shin-Yokohama, Kohoku-ku,
beneficiary
Yokohama City, Kanagawa Prefectureinterests
Trust
1-27-5 Higashi-Ueno, Taito Ward, Tokyo beneficiaryinterests
Trust
3-39-12 Kameido, Koto Ward, Tokyo
beneficiaryinterests
Trust
3-31-14 Nishi-Ikebukuro, Toshima Ward,beneficiaryTokyo
interests
Trust
1-15-15 Okamoto, Setagaya Ward, Tokyo beneficiaryinterests
Trust
3-7-6 Nishikicho, Tachikawa City, Tokyo beneficiaryinterests
Trust
2-35-2 Honmachi, Shibuya Ward, Tokyo
beneficiaryinterests
Trust
4-13-15 Kinuta, Setagaya Ward, Tokyo
beneficiaryinterests
Trust
2-5-13 Namiki, Kawaguchi City, Saitama
beneficiary
Prefectureinterests
Trust
71-1 Enokicho, Shinjuku Ward, Tokyo
beneficiaryinterests
Trust
3-4-4 Nakamachi, Machida City, Tokyo
beneficiaryinterests
Trust
1-2-15 Meguro, Meguro Ward, Tokyo
beneficiaryinterests
Trust
2-7-47 Tarumachi, Kohoku-ku, Yokohama
beneficiary
City, Kanagawa Prefectureinterests
Trust
1-6-6 Koyama, Nerima Ward, Tokyo
beneficiaryinterests
5-29-51 Kaijin, Funabashi City, Chiba
Trust
Prefecture
beneficiary
1-31-2 Izumi, Suginami Ward, Tokyo

―38―

1,251

1,153

1.6

1,110

(Note 6)

1,229

1,102

1.6

1,190

(Note 6)

888

859

1.2

909

(Note 6)

1,070

1,030

1.4

1,020

(Note 6)

1,505

1,444

2.0

1,160

(Note 6)

1,428

1,392

1.9

1,190

(Note 6)

1,088

1,052

1.4

990

(Note 6)

1,059

1,010

1.4

1,020

(Note 6)

1,023

999

1.3

916

(Note 6)

906

871

1.2

889

(Note 6)

825

792

1.1

783

(Note 6)

795

774

1.0

664

(Note 6)

676

655

0.9

583

(Note 6)

651

656

0.8

575

(Note 6)

646

646

0.8

446

(Note 6)

620

586

0.8

648

(Note 6)

604

619

0.8

528

(Note 6)

589

578

0.8

515

(Note 6)

589

577

0.8

526

(Note 6)

572

557

0.7

489

(Note 6)

566

542

0.7

518

(Note 6)

557

524

0.7

449

(Note 6)

Property
number(Note 1)Name of property

Location (Note 2)

Balance
Appraisal value as
Acquisition
Investment
sheet
of December 31,
priceType ofratio
carrying
2012(millions(%)
value
ownership of yen)(millions of yen)(millions (Note 4)(Note 5)(Note 3)of yen)interests
A48 College Square Machiya

A51 City House Tokyo Shinbashi

A52 Winbell Kagurazaka

A53 Nishiwaseda Cresent Mansion

A54 Lexington Square Akebonobashi

A56 Casa Eremitaggio

A59 Towa City Coop Shinotsuka II

A61 Bichsel Musashiseki

A62 Lexel Mansion Ueno Matsugaya

A63 Towa City Coop Sengencho

A64 Royal Park Omachi

A65 Lexington Square Haginomachi

A66 Visconti Kakuozan

A71 Lexington Square Daitabashi

A72

Lexington Square Honjo
Azumabashi

A73 AMS TOWER Minami 6-Jo

A75 Spacia Ebisu

A76 Neo Prominence

A77 Invoice Shin-Kobe Residence

A78 Cosmo Court Motomachi

A79 Revest Honjin

A80 Revest Matsubara

A81 Sun Terrace Minami Ikebukuro

A82 Alba Noritake Shinmachi

Trustbeneficiaryinterests
Trust
6-19-1 Shinbashi, Minato Ward, Tokyo
beneficiaryinterests
Trust
6-15 Shin-Ogawacho, Shinjuku Ward,beneficiaryTokyo
interests
Trust
3-18-9 Nishi-Waseda, Shinjuku Ward,beneficiaryTokyo
interests
Trust
3-8 Yochomachi, Shinjuku Ward, Tokyo
beneficiaryinterests
Trust
1-14-15 Nakane, Meguro Ward, Tokyo
beneficiaryinterests
Trust
5-49-7 Higashi-Ikebukuro, Toshima Ward,beneficiaryTokyo
interests
Trust
1-22-7 Sekimachi-Kita, Nerima Ward,beneficiaryTokyo
interests
Trust
3-10-2 Matsugaya, Taito Ward, Tokyo
beneficiaryinterests
Trust
4-338-2 Sengencho, Nishi-ku, Yokohama
beneficiary
City, Kanagawa Prefectureinterests
Trust
2-11-10 Omachi, Aoba-ku, Sendai City,
beneficiary
Miyagi Prefectureinterests
Trust
1-15-16 Haginomachi, Miyagino-ku,
beneficiary
Sendai City, Miyagi Prefectureinterests
Trust
2-44 Otanacho, Chikusa-ku, Nagoya City,
beneficiary
Aichi Prefectureinterests
Trust
1-33-8 Izumi, Suginami Ward, Tokyo
beneficiaryinterests
Trust
4-20-6 Higashikomagata, Sumida Ward,beneficiaryTokyo
interests
Trust
2-5-15 Minami 6-Jo Nishi, Chuo-ku,
beneficiary
Sapporo City, Hokkaido
interests
Trust
3-6-22 Higashi, Shibuya Ward, Tokyo
beneficiaryinterests
Trust
3-21-5 Shimo, Kita Ward, Tokyo
beneficiaryinterests
Trust
3-3-8 Ikutacho Chuo Ward, Kobe City,
beneficiary
Hyogo Prefectureinterests
Trust
3-12-20 Motomachi Dori Chuo Ward,beneficiary
Kobe City, Hyogo Prefectureinterests
Trust
2-13 Torii Dori Nakamura Ward, Nagoya
beneficiary
City, Aichi Prefectureinterests
Trust
3-13-12 Matsubara Naka Ward , Nagoya
beneficiary
City, Aichi Prefectureinterests
Trust
2-22-6 Minami Ikebukuro, Toshima Ward,beneficiaryTokyo
interests
Trust
3-6-8 Noritake Shinmachi, Nishi Ward,beneficiary
Nagoya City, Aichi Prefectureinterests
7-3-1 Arakawa, Arakawa Ward, Tokyo

―39―

510

488

0.7

483

(Note 6)

2,520

2,444

3.3

2,560

(Note 7)

3,260

3,171

4.2

3,320

(Note 9)

1,880

1,854

2.4

1,990

(Note 9)

1,450

1,402

1.9

1,520

(Note 8)

1,070

1,021

1.4

996

(Note 7)

866

841

1.1

915

(Note 7)

577

566

0.7

580

(Note 9)

970

924

1.3

1,030

(Note 8)

1,110

1,066

1.4

1,210

(Note 7)

415

402

0.5

434

(Note 7)

330

317

0.4

363

(Note 7)

255

245

0.3

218

(Note 8)

977

930

1.3

989

(Note 8)

511

482

0.7

507

(Note 8)

1,180

1,097

1.5

1,010

(Note 8)

7,010

6,801

9.1

6,800

(Note 7)

1,660

1,678

2.2

1,670

(Note 7)

1,260

1,285

1.6

1,260

(Note 7)

973

996

1.3

981

(Note 7)

674

691

0.9

678

(Note 7)

657

673

0.9

664

(Note 7)

625

634

0.8

625

(Note 7)

608

625

0.8

617

(Note 7)

Property
number(Note 1)Name of property

Location (Note 2)

A83 Revest Meieki Minami

2-13-33 Meiekiminami, Nakamura Ward,
Nagoya City, Aichi Prefecture

A84 Revest Heian

2-13-17 Heian, Kita Ward, Nagoya City,
Aichi Prefecture

A85 Vendir Hamaotsu Ekimae

1-2-15 Hama Otsu,Otsu City, Shiga
Prefecture

A86 Salvo Sala

2-6-21 Shimanouchi, Chuo Ward, Osaka
City, Osaka Prefecture

A87 Excellente Kagurazaka

128-1 Yamabukicho, Shinjuku Ward,Tokyo

A88 Luna Court Edobori

3-4-11 Edobori, Nishi Ward, Osaka City,
Osaka Prefecture

A89 Winntage Kobe Motomachi

7-2-2 Motomachi Dori, Chuo Ward, Kobe
City, Hyogo Prefecture

A90 Queen's Court Fukuzumi

1-3-10 Fukuzumi, Koto Ward, Tokyo

A91 Corp Higashinotoin

380-1 Kawaranomachi, Higashinotoin
Dori Nijo Kudaru, Chukyo Ward, Kyoto
City, Kyoto Prefecture

A92 Belair Oimachi

5-14-17 Higashi Oi, Shinagawa Ward,Tokyo

A93 Siete Minami-Tsukaguchi

3-18 Minami Tsukaguchimachi,
Amagasaki City, Hyogo Prefecture

A94

Prime Life Sannomiya Isogami
Koen

4-3-23 Isogamidori, Chuo Ward, Kobe
City Hyogo Prefecture

A95 HERMITAGE NANBA WEST

4-10-3 Sakuragawa, Naniwa Ward, Osaka
City, Osaka Prefecture

A96 Century Park Shinkawa 1-bankan

4-1-2 Shinkawamachi, Minato Ward,
Nagoya City, Aichi Prefecture

A97 West Avenue

1-5-17 Nishi, Kunitachi City, Tokyo

A98 Little River Honmachibashi

1-34 Honmachibashi, Chuo Ward, Osaka
City, Osaka Prefecture

A99 Prime Life Mikage

2-25-11 Mikage Tsukamachi Higashi,
Nada Ward, Kobe City, Hyogo Prefecture

Balance
Appraisal value as
Acquisition
Investment
sheet
of December 31,
priceType ofratio
carrying
2012(millions(%)
value
ownership of yen)(millions of yen)(millions (Note 4)(Note 5)(Note 3)of yen)Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (63 properties)
B8

Kindai Kagakusha Building

B9

Shinjuku Island

B14 Lexington Plaza Nishigotanda

B15 Cross Square NAKANO

B16 Ohki Aoba Building

B17 Lexington Plaza Hachiman

B18 AEON TOWN Sukagawa

Trust
2-7-15, Ichigaya Tamachi, Shinjuku Ward,beneficiaryTokyo
interests
6-5-1 Nishi-Shinjuku, Shinjuku Ward,
Real estate
Tokyo
Trust
5-2-4 Nishigotanda, Shinagawa Ward,beneficiaryTokyo
interests
Trust
5-24-18 Nakano, Nakano Ward, Tokyo
beneficiaryinterests
Trust
9-7 Futsukacho, Aoba-ku, Sendai City,
beneficiary
Miyagi Prefectureinterests
Trust
3-1-50 Hachiman, Aoba-ku, Sendai City,
beneficiary
Miyagi Prefectureinterests
Trust
105 Furukawa, Sukagawa City, Fukushima
beneficiary
Prefectureinterests

―40―

597

614

0.8

599

(Note 7)

595

610

0.8

599

(Note 7)

581

597

0.8

638

(Note 7)

544

558

0.7

548

(Note 7)

543

554

0.7

544

(Note 7)

525

537

0.7

528

(Note 7)

512

526

0.7

524

(Note 7)

456

463

0.6

461

(Note 7)

446

455

0.6

447

(Note 7)

412

419

0.5

413

(Note 7)

374

383

0.5

380

(Note 7)

373

381

0.5

372

(Note 7)

355

364

0.5

358

(Note 7)

335

344

0.4

340

(Note 7)

331

336

0.4

333

(Note 7)

310

318

0.4

316

(Note 7)

297

304

0.4

299

(Note 7)58,08356,845

75.3

56,237

-

1,301

1,221

1.7

989

(Note 6)

715

717

0.9

520

(Note 9)

4,880

4,827

6.3

4,200

(Note 7)

1,060

1,041

1.4

935

(Note 7)

816

749

1.1

593

(Note 8)

3,280

3,218

4.3

3,140

(Note 9)

2,320

2,179

3.0

2,070

(Note 9)Property
number(Note 1)Name of property

Balance
Appraisal value as
Acquisition
Investment
sheet
of December 31,
priceType ofratio
carrying
2012(millions(%)
value
ownership of yen)(millions of yen)(millions (Note 4)(Note 5)(Note 3)of yen)Location (Note 2)

Subtotal (7 properties)

14,372

13,955

18.6

12,447-

Real estate

97

100

0.1

91

(Note 6)

1-37-3 Funabashi, Setagaya Ward, Tokyo

Real estate

685

666

0.9

734

(Note 7)

C22 Bon Sejour Yotsugi

3-1-11 Higashi-Yotsugi, Katsushika Ward,
Tokyo

Real estate

652

631

0.8

681

(Note 7)

C23 Bon Sejour Hino

438-1 Ochigawa, Hino City, Tokyo

Real estate

574

558

0.7

641

(Note 7)

Stop Parking Kanda-Sudacho

1-22-7, 1-22-15 Kanda sudacho, Chiyodaku, Tokyo

C21 Bon Sejour Chitose Funabashi

C1

773-2 Chitose, Takatsu-ku, Kawasaki City,
Real estate
Kanagawa Prefecture
3-1 Shiroyama, Komaki City, Aichi
Real estate
Prefecture
1-6-60 Shibusawa-Kami, Hadano City,
Real estate
Kanagawa Prefecture

486

473

0.6

543

(Note 7)

1,050

1,004

1.4

1,060

(Note 7)

681

647

0.9

616

(Note 7)

1-2-25 Chuo, Itami City, Hyogo Prefecture Real estate

480

459

0.6

433

(Note 7)

Subtotal (8 properties)

4,705

4,542

6.1

4,799

-

Total (78 properties)

77,161

75,342100.0

73,483-

C24 Bon Sejour Musashi Shinjo
C25 Bon Sejour Komaki
C26 Bon Sejour Hadano Shibusawa
C27 Bon Sejour Itami(Note 1)

“Property number” indicates the categorization of properties acquired by the Investment Corporation according to use, with “A” for residential,“B” for office and retail and “C” for senior and parking lots, and a number assigned for each property. The number following “A”, “B” and “C”
is based on how early the acquisition was made, except that for acquisitions made at the same time the number is based on how large theacquisition price was.

(Note 2)

“Location” is in principle based on the indicated address (jyukohyoji), except that if the yukohyoji system has not been implemented for such

(Note 3)

“Acquisition price” is the purchase price indicated in the real estate or trust beneficiary purchase agreement. Such price excludes consumption(Note 4)

“Investment ratio” is the ratio of the acquisition price to the aggregate acquisition price of the Investment Corporation’s portfolio, and has been

(Note 5)

“Appraisal value as of December 31, 2012” is the value appraised or researched by the real estate appraiser as of the end of the fiscal period inproperty, the location is based on the land number (banchi).
taxes and has been rounded down to the nearest hundred million yen.
rounded to the second digit.
accordance with the Articles of Incorporation and the regulations of the Investment Trust Association, Japan. The real estate appraisers are as
follows.
Real estate appraiser(Note 6)

Asset Research and Development Inc.

(Note 7) Japan Real Estate Institute(Note 8) Tanizawa Sogo Appraisal Co., Ltd.
(Note 9) Morii Appraisal & Investment Consulting Inc.

(b) Capital expenditures for properties(i)

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 real estate assets is as follows.

Property

Location

Ohki Aoba
B16
Building

Sendai City,
MiyagiPrefecture

B14

Lexington Plaza
Nishigotanda

ShinagawaWard, Tokyo

Scheduled time of
implementation

PurposeRenewal constructionof air conditioning
system on the 3rd and5th floors
Renewal constructionof automatic fire alarm
equipment

Estimated cost (thousands of yen)
Payment for
the fiscal
AdvanceperiodTotal
payments
ended
December31, 2012

From June 2013 toJune 2013

21,00021,000－From May 2013 toJune 2013

16,00016,000－―41―

Renewal constructionof air conditioning
system in the commonuse spaces of the1st,
BF1 and BF2 floors
Sendai City,
MaintenanceMiyagiconstruction ofPrefecture
mechanical parking lot
Replacement
Toshima Ward,
construction of waterTokyo
heaterFunabashi
Renewal construction
City, Chiba
of CO2 cylinderPrefecture
Renewal construction
Shinagawaof halon fire
Ward, Tokyo
extinguishingequipment
Replacement
Suginami
construction of water
Ward, Tokyo
heater
Maintenance
Bunkyo Ward,
construction ofTokyo
mechanical parking lot

Kindai Kagakusha Shinjuku
B8
Building
Ward, Tokyo

B16

Ohki Aoba
Building

Nisshin
A27 Palacestage
Higashi-Nagasaki
A47

Growth Maison
Kaijin

B14

Lexington Plaza
Nishigotanda

Nisshin
A26 Palacestage
Daitabashi
A31

Harmonie
Ochanomizu

From May 2013
to May 2013

11,60011,600－From May 2013 to
May 2013

10,93010,930－From March 2013
to March 2013

9,300

9,300

－

From June 2013 toJune 2013

9,078

9,078

－

From May 2013 to
May 2013

8,300

8,300

－

From March 2013
to March 2013

8,000

8,000

－

From May 2013 to
May 2013

6,000

6,000

－

―42―

(ii)

Capital expenditures for the fiscal period ended December 31, 2012

The principal construction constituting capital expenditures for the real estate assets for the fiscal period ended December 31, 2012is as follows. Capital expenditures for the fiscal period was 118,189 thousand yen, and together with 29,915 of repair cost include
in this fiscal period’s expenses, construction work totaling 148,105 thousand yen was implemented.
Property
B14

Lexington Plaza
Nishigotanda

B14

Lexington Plaza
Nishigotanda

Nisshin
A26 Palacestage
Daitabashi
Royal Park
A64
Omachi

A45

WacoreTsunashima I

Location

Time ofimplementation

PurposeRenewal construction of air
Shinagawa Ward,conditioning system on the 2ndTokyo
and 5th floors
Renewal construction of air
Shinagawa Ward, conditioning system in thecommon-use spaces of the1stTokyo
to 7th floors
Suginami Ward,Tokyo

Construction to repair/replace
exterior wall tiles

Maintenance construction of
halon fire extinguishing
Sendai City,
Miyagi Prefecture equipment in the multi-story
parking lot
Yokohama City,
Renewal construction of
Kanagawa
exterior wall tiles
Prefecture

Payment(thousands of yen)

From June 2012 toJuly 2012

27,390From October 2012
to November 2012

25,000(Note)

From October 2012
to December 2012

16,700From November
2012 to November
2012

3,998

From October 2012
to October 2012

2,300

Other construction

42,801
Total

118,189(Note) The construction includes both the initially scheduled renewal construction of the air conditioning system in the common-use
spaces of the 1st to 7th floors as well as the concurrent repair construction of the common-use space floor, walls and ceiling as well as
the renewal construction of the air condition system on the 1st basement floor and on the 1st floor in the building manager office. Of
the 25,000 thousand yen, the initially scheduled renewal construction of the air conditioning system in the common-use paces of the
1st to 7th floor accounted for 15,044 thousand yen.
(iii)

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 maintenance repairs in the medium to long term future in accordance with the long-term maintenance plan foreach property.
15th Period

16th Period

17th Period

18th Period

19th Period

Fiscal period

From January 1,
2010 to December
31, 2010

From January 1,
2011 to June 30,
2011

From July 1, 2011
to December 31,
2011

From January 1,
2012 to June 30,
2012

From July 1, 2012
to December 31,
2012

Reserved funds at
beginning of period
Amount reserved

480,420 thousand
yen
402,973 thousandyen
394,360 thousandyen
489,033 thousandyen

489,033 thousandyen
85,250 thousand
yen
23,180 thousand
yen
551,103 thousand
yen

551,103 thousandyen
238,107 thousand
yen
432,803 thousandyen
356,408 thousandyen

356,408 thousandyen
163,931 thousandyen
32,777 thousandyen
487,561 thousandyen

487,561 thousandyen
151,076 thousandyen
97,028 thousandyen
541,609 thousandyen(Note)

Amount reversed (Note)
Amount carried over for
next fiscal period(Note) The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amount reversed includes the reserves for
disposed properties.

―43―

(c)

Condition of income, etc.（From July 1, 2012 to December 31, 2012）(Thousands of yen)Otherexpenses

3,280

Property
relatedFacility
Tax andexpenses management other public Insurance
expenses②
feecharges
17,972

6,171

1,437

74

2,655

7,633

23,05941,757

5,106

24,691

8,889

2,585

102

1,804

11,30922,172

33,482

27,39926,772

627

8,877

2,653

1,323

34

513

4,350

18,522

22,873

A29 Growth Maison Kameido

33,06631,871

1,194

12,162

3,220

1,693

47

1,322

5,879

20,904

26,783

A30 Emerald House

42,02739,411

2,616

18,614

5,553

2,577

105

768

9,609

23,412

33,022

A31 Harmonie Ochanomizu

40,401

38,1082,292

13,932

3,132

1,808

72

2,054

6,863

26,46933,332

A32 Suncrest Shakujii-Koen

35,27332,432

2,841

22,758

11,494

3,086

105

1,483

6,587

12,515

19,102

A33 Growth Maison Shin-Yokohama

35,18432,5042,680

14,826

3,751

2,399

73

2,653

5,949

20,35826,308A34 Belle Face Ueno-Okachimachi

30,59330,593-

12,544

4,924

1,679

46

538

5,355

18,04923,404

A35 Grand Rire Kameido

26,61926,619

-

7,809

75

1,696

49

501

5,487

18,80924,297

A36 Growth Maison Ikebukuro

25,01623,977

1,038

11,550

3,733

1,061

42

1,539

5,173

13,465

18,639A37 Growth Maison Yoga

22,96421,753

1,210

9,530

2,754

1,350

42

1,596

3,787

13,433

17,220A38 Route Tachikawa

20,021

18,525

1,496

9,197

1,860

1,047

43

2,432

3,812

10,823

14,636

A39 Shibuya-Honmachi Mansion

19,691

18,904

787

6,974

2,341

879

36

1,703

2,012

12,716

14,728

A40 City Heights Kinuta

16,876

16,160

716

5,964

2,285

907

37

982

1,752

10,912

12,664

A41 Acseeds Tower Kawaguchi-Namiki

25,13823,397

1,740

11,109

2,464

1,133

40

2,432

5,038

14,02919,067

A42 Capital Heights Kagurazaka

18,276

17,777

498

7,040

2,522

1,063

40

1,458

1,955

11,236

13,191

A43 College Square Machida

18,26818,268

-

5,227

534

1,503

31

500

2,659

13,04015,699A44 Belair Meguro15,463

14,752

710

6,558

2,077

832

23

1,422

2,202

8,904

11,107

A45 Wacore Tsunashima I

16,96916,211

758

13,529

5,139

883

33

3,550

3,921

3,439

7,361

A46 Foros Nakamurabashi

17,094

15,918

1,175

10,334

3,334

977

37

1,737

4,246

6,759

11,006

Rent,
commonarea fees

Other
incomeA26 Nisshin Palacestage Daitabashi

Rentalrevenue①
41,03137,751

A27 Nisshin Palacestage Higashi-Nagasaki

46,864

A28 Growth Maison Gotanda

No.

Property Name

Depreciation
expenses③

Profit and
Loss
(①－②)

NOI
(①②+③)
30,693

A47 Growth Maison Kaijin

23,017

20,961

2,055

14,358

5,974

2,032

89

964

5,297

8,658

13,955

A48 College Square Machiya

14,706

14,706

-

5,025

-

945

30

499

3,549

9,680

13,230A51 City House Tokyo Shinbashi

84,981

81,043

3,938

38,231

14,108

4,916

140

6,000

13,06446,75059,815

A52 Winbell Kagurazaka

98,837

93,195

5,642

41,546

12,348

6,284

154

7,195

15,56357,29072,854

A53 Nishiwaseda Cresent Mansion

68,772

65,141

3,630

27,306

11,424

3,468

110

6,149

6,153

41,46547,619

A54 Lexington Square Akebonobashi

47,53645,441

2,095

18,060

4,609

2,155

62

2,509

8,724

29,47538,200A56 Casa Eremitaggio

29,761

27,5342,227

18,008

4,288

1,731

48

3,098

8,841

11,753

20,594

A59 Towa City Coop Shinotsuka II

33,61232,514

1,097

16,538

6,764

1,363

78

3,263

5,068

17,07322,141

A61 Bichsel Musashiseki

24,41823,900518

10,059

4,954

1,170

50

1,104

2,779

14,35917,138

A62 Lexel Mansion Ueno Matsugaya

33,27629,864

3,411

15,552

3,121

1,928

60

2,225

8,216

17,72325,940

A63 Towa City Coop Sengencho

60,001

54,905

5,095

34,933

16,759

3,002

124

5,814

9,232

25,06734,300A64 Royal Park Omachi

24,44821,056

3,392

13,991

6,506

1,585

64

1,159

4,677

10,45615,133

A65 Lexington Square Haginomachi

17,46815,954

1,514

7,230

1,758

1,156

40

731

3,543

10,237

13,780A66 Visconti Kakuozan

11,680

10,110

1,569

7,525

3,410

915

29

1,388

1,782

4,154

5,937

A71 Lexington Square Daitabashi

29,171

27,831

1,339

15,313

3,021

1,545

44

2,699

8,002

13,857

21,860

A72 Lexington Square Honjo Azumabashi

17,52917,171

357

8,634

1,635

809

32

1,263

4,893

8,895

13,788A73 AMS TOWER Minami 6-Jo

47,194

44,7762,418

30,481

6,521

3,937

126

5,622

14,274

16,71230,987

A75 Spacia Ebisu

186,857

169,667

17,18972,644

15,6988,630

251

11,396

36,668114,212150,881A76 Neo Prominence ※31,424

27,768

3,656

8,735

3,221

-

61

468

4,984

22,68927,673

A77 Invoice Shin-Kobe Residence ※25,29623,856

1,439

9,810

2,638

-

34

1,320

5,816

15,48521,301

A78 Cosmo Court Motomachi ※19,528

19,106

422

7,174

1,327

-

34

753

5,059

12,354

17,414

A79 Revest Honjin ※15,724

14,663

1,061

6,480

1,713

-

31

1,027

3,708

9,243

12,952

A80 Revest Matsubara ※15,031

14,256

775

5,394

1,380

-

28

483

3,502

9,636

13,139A81 Sun Terrace Minami Ikebukuro ※

10,867

10,269

598

5,489

1,554

-

14

1,445

2,474

5,378

7,853

A82 Alba Noritake Shinmachi ※13,104

12,423

681

5,726

1,394

-

28

801

3,501

7,377

10,879A83 Revest Meieki Minami ※12,852

12,306

545

5,586

1,317

-

30

796

3,441

7,265

10,707

A84 Revest Heian ※11,283

11,069

214

5,388

921

-

20

1,215

3,231

5,894

9,125

A85 Vendir Hamaotsu Ekimae ※16,60015,199

1,400

6,642

2,150

-

33

924

3,533

9,957

13,491

A86 Salvo Sala ※10,95810,050

907

7,702

2,498

-

23

2,465

2,714

3,255

5,970

A87 Excellente Kagurazaka ※

8,945

8,697

248

4,160

740

-

13

1,263

2,142

4,784

6,927

A88 Luna Court Edobori ※

10,787

10,432

354

4,574

1,167

-

17

793

2,595

6,212

8,807

A89 Winntage Kobe Motomachi ※11,636

11,272

363

5,926

1,570

-

21

1,379

2,955

5,709

8,665

―44―

Rent,
commonarea fees

Other
incomeA90 Queen's Court Fukuzumi ※Rentalrevenue
①
8,191

7,995

195

Property
relatedFacility
Tax andexpenses management other public Insurance
expenses②
feecharges
3,858

1,600

-

12

609

1,635

4,332

NOI
(①②+③)A91 Corp Higashinotoin ※

9,189

8,702

487

3,523

1,025

-

15

546

1,935

5,666

7,601

A92 Belair Oimachi ※

7,351

7,267

84

2,337

582

-

10

363

1,380

5,014

6,394

A93 Siete Minami-Tsukaguchi ※

8,935

8,397

537

3,417

1,388

-

23

376

1,629

5,517

7,146

A94 Prime Life Sannomiya Isogami Koen ※

7,741

7,371

369

2,863

740

-

11

343

1,768

4,878

6,646

A95 HERMITAGE NANBA WEST ※

7,889

6,955

934

5,865

2,108

-

13

2,045

1,697

2,024

3,721

A96 Century Park Shinkawa 1-bankan ※

9,010

7,834

1,175

3,124

750

-

20

416

1,937

5,885

7,822

A97 West Avenue ※

6,787

6,617

169

2,615

724

-

10

368

1,511

4,172

5,683

A98 Little River Honmachibashi ※

6,685

6,642

43

3,056

1,099

-

12

588

1,355

3,629

4,985

A99 Prime Life Mikage ※

6,292

5,778

513

3,057

1,009

-

10

530

1,507

3,234

4,742

B8 Kindai Kagakusha Building

37,386

31,4795,906

22,628

8,364

4,325

78

1,234

8,625

14,757

23,383No.

Property Name

Other
expenses

Depreciation
expenses③

Profit and
Loss
(①－②)

5,968

（Note 1） （Note 1） （Note 1） （Note 1） （Note 1） （Note 1） （Note 1） （Note 1） （Note 1） （Note 1） （Note 1）

B9 Shinjuku Island
B14 Lexington Plaza Nishigotanda

157,111

138,765

18,34590,48930,785

12,740209

2,923

43,83066,622

110,452

B15 Cross Square NAKANO

29,23424,197

5,037

15,426

6,915

3,865

89

916

3,638

13,807

17,446

B16 Ohki Aoba Building

39,761

32,1597,601

29,881

12,647

3,885

111

851

12,384

9,879

22,264

B17 Lexington Plaza Hachiman

158,959

127,325

31,633

79,48645,82011,659172

1,792

20,041

79,472

99,513

B18 AEON TOWN Sukagawa

143,761

143,761-

94,77756,124

8,260

213

740

29,43848,98478,423C1 Stop Parking Kanda-Sudacho

2,443

2,443

-

265

-

252

-

-

13

2,178

2,191

C21 Bon Sejour Chitose Funabashi

23,90622,541

1,364

5,527

319

1,754

61

-

3,393

18,37821,771

C22 Bon Sejour Yotsugi

22,52822,528

-

4,817

225

1,022

41

-

3,529

17,711

21,240C23 Bon Sejour Hino

21,405

21,405

-

4,128

214

1,188

47

-

2,678

17,276

19,955

C24 Bon Sejour Musashi Shinjo

17,747

17,747

-

3,264

167

924

43

-

2,129

14,483

16,612

C25 Bon Sejour Komaki

45,58245,582-

12,953

201

4,744

198

-

7,810

32,62940,439C26 Bon Sejour Hadano Shibusawa

23,802

23,472

330

8,830

249

2,772

84

-

5,723

14,971

20,695

C27 Bon Sejour Itami
Total

15,971

15,971

-

5,243

145

1,404

56

-

3,638

10,72814,3662,476,430

2,300,764

175,665

1,156,672

403,390

141,455

4,677

126,526

480,622

1,319,757

1,800,380(Note 1)

Not disclosed because the consent of the tenant was not obtained.

(Note 2)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.

―45―

(3)

Tenant Summary(a) Summary of lease conditions by property(As of December 31, 2012)
Leased Area(m2)
(Note 2)

LeasableUnits(units)(Note 3)

1,771.13

1,717.07

98

95

1

Best Property Corporation

41,031

1.7

Pass throughmaster lease

2,681.94

2,422.77

60

54

1

Best Property Corporation

46,864

1.9

Pass throughmaster lease

A28 Growth Maison Gotanda

1,051.50

1,051.50

48

48

1

Tokyu Livable, Inc.

27,3991.1

Pass throughmaster lease

A29 Growth Maison Kameido

1,367.96

1,286.12

66

62

1

Mitsui Home Estate Co., Ltd.

33,066

1.3

Pass throughmaster lease

A30 Emerald House

2,152.31

2,130.01

96

95

1

Tokyo Gakusei Life Co., Ltd.

42,027

1.7

Pass throughmaster lease

A31 Harmonie Ochanomizu

1,748.24

1,748.24

65

65

1

Tokyu Livable, Inc.

40,401

1.6

Pass throughmaster lease

A32 Suncrest Shakujii-Koen

3,029.16

2,869.61

29

27

1

Mitsui Home Estate Co., Ltd.

35,273

1.4

Pass throughmaster lease

A33 Growth Maison Shin-Yokohama

1,858.44

1,830.64

68

67

1

Tokyu Livable, Inc.

35,184

1.1

Pass throughmaster lease

A34 Belle Face Ueno-Okachimachi

1,351.11

1,330.11

64

63

1

Mainichicomnet Co., Ltd.

30,593

1.2

Pass throughmaster lease

A35 Grand Rire Kameido

1,562.26

1,562.26

72

72

1

J.S.B. Co., Ltd.

26,6191.1

Fixed rentmaster lease

A36 Growth Maison Ikebukuro

952.89863.0642

38

1Tokyu Livable, Inc.

25,016

1.0

Pass throughmaster lease

A37 Growth Maison Yoga

1,015.34

936.64

39

36

1

Mitsui Home Estate Co., Ltd.

22,964

0.9

Pass throughmaster lease

A38 Route Tachikawa

1,368.57

1,368.57

24

24

1

Tokyu Livable, Inc.

20,021

0.8

Pass throughmaster lease

A39 Shibuya-Honmachi Mansion

1,167.50

1,167.50

25

25

1

Tokyu Livable, Inc.

19,691

0.8

Pass throughmaster lease

A40 City Heights Kinuta

1,235.93

1,102.73

19

17

1

Mitsui Home Estate Co., Ltd.

16.876

0.7

Pass throughmaster lease

A41 Acseeds Tower Kawaguchi-Namiki

1,210.74

1,210.74

57

57

1

Access Group, Inc.

25,138

1.0

Pass throughmaster lease

A42 Capital Heights Kagurazaka

1,126.65

1,042.18

26

24

1

Mitsui Home Estate Co, Ltd.

18,276

0.7

Pass throughmaster lease

A43 College Square Machida

1,047.75

1,047.75

62

62

1

Mainichicomnet Co., Ltd.

18,268

0.7

Fixed rentmaster lease

A44 Belair Meguro

557.05513.1025

231Tokyu Livable, Inc.

15,463

0.6

Pass throughmaster lease

A45 Wacore Tsunashima I

908.99873.0950

48

1Tokyu Livable, Inc.

16,9690.7

Pass throughmaster lease

A46 Foros Nakamurabashi

815.76815.7637

37

1

Mitsui Home Estate Co., Ltd.

17,094

0.7

Pass throughmaster lease

A47 Growth Maison Kaijin

2,040.27

1,981.14

34

33

1

Mitsui Home Estate Co., Ltd.

23,017

0.9

Pass throughmaster lease

A48 College Square Machiya

871.35871.354343

1

Mainichicomnet Co., Ltd.

14,706

0.6

Fixed rentmaster lease

A51 City House Tokyo Shinbashi

3,364.00

3,054.95

86

79

1

Mitsui Home Estate Co., Ltd.

84,981

3.4

Pass throughmaster lease

A52 Winbell Kagurazaka

4,032.70

3,887.82

118

114

1

Mitsui Home Estate Co., Ltd.

98,837

4.0

Pass throughmaster lease

A53 Nishiwaseda Cresent Mansion

4,310.77

4,310.77

69

69

1

Tokyu Livable, Inc.

68,7722.8

Pass throughmaster lease

A54 Lexington Square Akebonobashi

1,987.88

1,850.59

88

82

1

Mitsui Home Estate Co., Ltd.

47,536

1.9

Pass throughmaster lease

A56 Casa Eremitaggio

1,197.19

1,112.63

17

16

1

Tokyu Livable, Inc.

29,761

1.2

Pass throughmaster lease

A59 Towa City Coop Shinotsuka II

1,627.13

1,583.85

58

57

1

Mitsui Home Estate Co., Ltd.

33,612

1.4

Pass throughmaster lease

A61 Bichsel Musashiseki

1,220.24

1,184.54

70

68

1

Mitsui Home Estate Co., Ltd.

24,418

1.0

Pass throughmaster lease

A62 Lexel Mansion Ueno Matsugaya

1,969.45

1,836.39

29

27

1

Tokyu Livable, Inc.

33,276

1.3

Pass throughmaster lease

A63 Towa City Coop Sengencho

3,426.36

3,231.76

154

145

1

Tokyu Livable, Inc.

60,001

2.4

Pass throughmaster lease

A64 Royal Park Omachi

1,929.59

1,860.47

51

49

1

One-Eyed Capital Advisers

24,448

1.0

Pass throughmaster lease

A65 Lexington Square Haginomachi

1,528.58

1,528.58

39

39

1

One-Eyed Capital Advisers

17,468

0.7

Pass throughmaster lease

A66 Visconti Kakuozan

705.75625.588

71

Mitsui Home Estate Co., Ltd.

11,680

0.5

Pass throughmaster lease

Property Name

A26 Nisshin Palacestage Daitabashi
A27

Nisshin Palacestage HigashiNagasaki

LeasedUnits Number oftenants(units)(Note 4)

RentalRatio of
Revenue
Rental(Thousands ofRevenueyen)(%)(Note 6)

Leasable Area(m2)
(Note 1)

No.

―46―

Tenants (Note 5)

Type of
Lease(Note 7)

Leased Area(m2)
(Note 2)

LeasableUnits(units)(Note 3)

A71 Lexington Square Daitabashi

1,430.64

1,360.41

43

41

1

Nisshin Jyutaku Support K.K.

29,171

1.2

Pass throughmaster lease

A72 Lexington Square Honjo Azumabashi

784.74784.7433

33

1Nisshin Jyutaku Support K.K.

17,5290.7

Pass throughmaster lease

A73 AMS TOWER Minami 6-Jo

4,460.56

4,013.17

120

109

1

Big Service Co., Ltd.

47,194

1.9

Pass throughmaster lease

A75 Spacia Ebisu

7,794.91

7,186.21

109

101

1

Tokyu Livable, Inc.

186,857

7.5

Pass throughmaster lease

A76 Neo Prominence

3,574.70

3,389.89

52

50

1

Goodworks Co., Ltd.

31,424

1.3

Pass throughmaster lease

A77 Invoice Shin-Kobe Residence

2,773.71

2,748.92

81

80

1

Sohgoh Real Estate

25,296

1.0

Pass throughmaster lease

A78 Cosmo Court Motomachi

2,310.49

2,252.69

82

80

1

Global Community Co., Ltd.

19,528

0.8

Pass throughmaster lease

A79 Revest Honjin

1,933.80

1,813.35

80

75

1

Mininet, Inc.

15,724

0.6

Pass throughmaster lease

A80 Revest Matsubara

1,955.40

1,796.80

70

65

1

Mininet, Inc.

15,031

0.6

Pass throughmaster lease

A81 Sun Terrace Minami Ikebukuro

898.70898.7038

38

1Goodworks Co., Ltd.

10,867

0.4

Pass throughmaster lease

A82 Alba Noritake Shinmachi

1,731.68

1,707.84

64

63

1

Mininet, Inc.

13,104

0.5

Pass throughmaster lease

A83 Revest Meieki Minami

1,634.60

1,584.88

61

59

1

Mininet, Inc.

12,852

0.5

Pass throughmaster lease

A84 Revest Heian

1,554.03

1,479.03

40

37

1

Mininet, Inc.

11,286

0.5

Pass throughmaster lease

A85 Vendir Hamaotsu Ekimae

2,670.66

2,490.81

81

75

1

Mininet, Inc.

16,600

0.7

Pass throughmaster lease

A86 Salvo Sala

1,428.12

1,283.21

54

49

1

Daygran, Inc.

10,958

0.4

Pass throughmaster lease

A87 Excellente Kagurazaka

701.92701.92

33

33

1

Goodworks Co., Ltd.

8,945

0.4

Pass throughmaster lease

A88 Luna Court Edobori

1,185.50

1,138.36

50

48

1

Nihon Housing Co., Ltd.

10,787

0.4

Pass throughmaster lease

A89 Winntage Kobe Motomachi

1,433.35

1,408.11

57

56

1

Global Community Co., Ltd.

11,636

0.5

Pass throughmaster lease

A90 Queen's Court Fukuzumi

765.18765.1825

25

1

Goodworks Co., Ltd.

8,191

0.3

Pass throughmaster lease

A91 Corp Higashinotoin

1,029.05

1,029.05

42

42

1

Global Community Co., Ltd.

9,189

0.4

Pass throughmaster lease

A92 Belair Oimachi

530.60491.20

26

24

1

Goodworks Co., Ltd.

7,351

0.3

Pass throughmaster lease

A93 Siete Minami-Tsukaguchi

1,020.86

969.1440

38

1

Goodworks Co., Ltd.

8,935

0.4

Pass throughmaster lease

A94 Prime Life Sannomiya Isogami Koen

789.12789.1232

32

1

Global Community Co., Ltd.

7,741

0.3

Pass throughmaster lease

A95 HERMITAGE NANBA WEST

992.76905.3121

20

1Daygran, Inc.

7,889

0.3

Pass throughmaster lease

A96 Century Park Shinkawa 1-bankan

1,477.62

1,477.62

44

44

1

Goodworks Co., Ltd.

9,010

0.4

Pass throughmaster lease

A97 West Avenue

794.80715.32

40

36

1

Joint Property Co., Ltd.

6,787

0.3

Pass throughmaster lease

A98 Little River Honmachibashi

974.81

944.8631

30

1Goodworks Co., Ltd.

6,685

0.3

Pass throughmaster lease

A99 Prime Life Mikage

761.18650.4828

24

1

Global Community Co., Ltd.

6,292

0.3

Pass throughmaster lease

B8

Kindai Kagakusha Building

1,451.54

1,451.54

13

13

1

Kokura Enterprise Co., Ltd.

37,386

B9

Shinjuku Island

526.43526.43

1

1

1

B14 Lexington Plaza Nishigotanda

6,033.58

6,033.58

11

11

8

Community One Co., Ltd.

157,111B15 Cross Square NAKANO

2,145.00

1,161.92

45

17

1

Nisshin Jyutaku Support K.K.

29,234

B16 Ohki Aoba Building

2,178.41

2,178.41

13

13

1

Tozai Asset Management Co., Ltd.

39,761

1.6

Fixed rentmaster lease

B17 Lexington Plaza Hachiman

8,419.15

7,964.63

18

15

1

Tokyo Biso Kogyo Corporation

158,959

6.4

Pass throughmaster lease

B18 AEON TOWN Sukagawa

18,440.58

18,440.58

1

1

1

Aeon Town Co., Ltd.

143,761

5.8

Fixed rent
lease

81.04

81.04

1

1

1

Office-attend Co., Ltd.

2,443

0.1

Direct fixed
rent lease(Note 11)

C1

Property Name

Stop Parking Kanda-Sudacho

LeasedUnits Number of(units)tenants(Note 4)

RentalRatio of
Revenue
Rental(Thousands ofRevenueyen)(%)(Note 6)

Leasable Area(m2)
(Note 1)

No.

―47―

Tenants (Note 5)(Note 8)(Note 8)Type of
Lease(Note 7)

Pass throughmaster lease
Directvariable rent
(Note 8)lease
(Note 9)Variable rent
6.3
lease
(Note 10)
Pass through1.2
master lease
1.5

Leased Area(m2)
(Note 2)

LeasableUnits(units)(Note 3)

C21 Bon Sejour Chitose Funabashi

2,342.17

2,342.17

42

42

1

Benesse Style Care Co., Ltd.

23,906

1.0

Direct fixed
rent lease(Note 11)

C22 Bon Sejour Yotsugi

1,962.87

1,962.87

62

62

1

Benesse Style Care Co., Ltd.

22,5280.9

Direct fixed
rent lease(Note 11)

C23 Bon Sejour Hino

1,984.17

1,984.17

56

56

1

Benesse Style Care Co., Ltd.

21,405

0.9

Direct fixed
rent lease(Note 11)

C24 Bon Sejour Musashi Shinjo

1,710.43

1,710.43

46

46

1

Benesse Style Care Co., Ltd.

17,747

0.7

Direct fixed
rent lease(Note 11)

C25 Bon Sejour Komaki

8,858.49

8,858.49

123

123

1

Benesse Style Care Co., Ltd.

45,582

1.8

Direct fixed
rent lease(Note 11)

C26 Bon Sejour Hadano Shibusawa

3,435.79

3,435.79

100

100

1

Benesse Style Care Co., Ltd.

23,802

1.0

Direct fixed
rent lease(Note 11)

C27 Bon Sejour Itami

2,129.87

2,129.87

62

62

1

Benesse Style Care Co., Ltd.

15,971

0.6

Direct fixed
rent lease(Note 11)

Total

171,285.50

164,848.11

4,007

3,837

85

2,476,430

100.0

－

(Note 1)

Property Name

LeasedUnits Number of(units)tenants(Note 4)

RentalRatio of
Revenue
Rental(Thousands ofRevenueyen)(%)(Note 6)

Leasable Area(m2)
(Note 1)

No.

Tenants (Note 5)－

Type of
Lease(Note 7)

“Leasable Area” is based on the portion of each property or property in trust owned by the Investment Corporation and leasable as residential,
office, retail etc.

(Note 2)

“Leased Area” is the portion of leasable area for which there is actually a lease agreement and is based on the area indicated in the leaseagreements.

(Note 3)

“Leasable Units” is the number of units possible to lease for each property or property in trust.

(Note 4)

“Leased Units” is the number of units actually leased to tenants and end-tenants based on lease agreements.

(Note 5)“Tenant” is the master lessee where there is a master lease agreement between the Investment Corporation or the trustee and a master lease
company, and the principal lessee where there are direct lease agreements with end-tenants.

(Note 6)

“Rental Revenue” is the aggregate rent revenue for each property for the fiscal period, rounded down to the nearest thousand yen.

(Note 7)

Pursuant to pass through master lease agreements between the master lease company and the trustee, the master lease company pays the amount(Note 8)Not disclosed because the consent of the tenant was not obtained.

(Note 9)A direct lease agreement has been entered into between the Investment Corporation and the tenant (without using a master lease company), and(Note 10)A direct lease agreement has been entered into between the trustee and the tenant (without using a master lease company), and rent is received(Note 11)A direct lease agreement has been entered into between the Investment Corporation and the tenant (without using a master lease company). The

paid by end-tenants pursuant to subleases. Pursuant to fixed rent master lease agreements, the master lease company pays fixed rent.

rent is received from the end tenant pursuant thereto.
from the end tenant pursuant thereto.
lease is fixed rent regardless of use or occupancy conditions.

―48―

(b)

Occupancy trend(Unit: %)No.

Property Name

15th Fiscal 15th Fiscal
Mid-Period
PeriodAs of
As of
Jun. 2010 Dec. 2010

16th Fiscal
PeriodAs ofJun. 2011

17th Fiscal
PeriodAs ofDec. 2011

18th Fiscal
PeriodAs ofJun. 2012

19th Fiscal Period
As ofJul. 2012

As ofAug. 2012

As of
Sep. 2012

As ofOct. 2012

As of
Nov 2012

As of
Dec. 2012

A26 Nisshin Palacestage Daitabashi

92.7

93.8

89.8

94.8

95.8

98.0

95.9

95.9

94.0

96.0

96.9

A27 Nisshin Palacestage Higashi-Nagasaki

94.7

94.4

94.4

95.3

97.8

100.0

98.1

99.1

99.1

97.5

90.3

A28 Growth Maison Gotanda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A29 Growth Maison Kameido

96.9

93.9

92.5

89.4

95.4

95.4

97.0

100.0

100.0

95.5

94.0

A30 Emerald House

92.2

91.1

100.0

98.9

100.0

100.0

97.9

99.0

99.0

99.0

99.0

A31 Harmonie Ochanomizu

86.9

89.6

93.6

88.5

96.1

96.1

97.4

97.4

100.0

100.0

100.0

A32 Suncrest Shakujii-Koen

94.9

97.1

95.0

95.4

97.1

94.3

94.3

92.2

97.1

97.4

94.7

A33 Growth Maison Shin-Yokohama

100.0

100.0

100.0

100.0

94.1

97.0

88.0

96.9

100.0

98.6

98.5

A34 Belle Face Ueno-Okachimachi

98.3

93.7

100.0

93.4

100.0

100.0

98.4

100.0

100.0

100.0

98.4

A35 Grand Rire Kameido

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A36 Growth Maison Ikebukuro

100.0

100.0

100.0

100.0

90.5

97.6

100.0

100.0

95.3

92.9

90.6

A37 Growth Maison Yoga

100.0

100.0

100.0

100.0

92.4

100.0

100.0

100.0

100.0

94.9

92.2

A38 Route Tachikawa

96.6

74.7

96.6

93.2

67.9

74.7

100.0

100.0

100.0

100.0

100.0

A39 Shibuya-Honmachi Mansion

77.5

84.5

83.4

96.5

96.5

90.4

92.3

95.8

95.8

95.8

100.0

A40 City Heights Kinuta

94.6

89.2

83.8

94.6

94.6

94.6

94.6

94.6

100.0

100.0

89.2

A41 Acseeds Tower Kawaguchi-Namiki

87.7

89.5

100.0

100.0

94.8

94.8

100.0

100.0

96.5

98.3

100.0

A42 Capital Heights Kagurazaka

94.4

82.6

95.2

85.7

84.4

84.4

95.3

95.3

95.3

95.3

92.5

A43 College Square Machida

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A44 Belair Meguro

100.0

92.3

91.9

100.0

87.9

100.0

100.0

96.0

96.0

92.1

92.1

A45 Wacore Tsunashima I

94.0

95.8

91.9

98.0

84.2

82.2

84.2

88.2

88.0

90.1

96.1

A46 Foros Nakamurabashi

97.5

100.0

94.2

89.3

92.6

95.1

92.6

92.6

92.6

90.1

100.0

A47 Growth Maison Kaijin

84.4

97.4

95.1

97.4

96.7

96.7

96.7

96.7

96.7

100.0

97.1

A48 College Square Machiya

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A51 City House Tokyo Shinbashi

87.0

95.7

88.1

88.5

93.0

90.7

90.9

94.9

92.7

96.4

90.8

A52 Winbell Kagurazaka

91.0

93.5

95.3

96.1

93.3

90.6

94.1

94.8

94.5

96.7

96.4

A53 Nishiwaseda Cresent Mansion

95.6

91.2

94.3

90.7

88.8

92.3

90.7

92.4

95.4

100.0

100.0

A54 Lexington Square Akebonobashi

84.0

95.4

86.4

91.3

93.4

95.6

94.5

94.5

95.6

93.2

93.1

A56 Casa Eremitaggio

93.0

83.0

87.1

90.5

90.0

90.0

87.1

97.1

100.0

92.9

92.9

A59 Towa City Coop Shinotsuka II

89.9

93.8

92.2

90.1

92.6

96.1

93.8

98.8

96.0

91.8

97.3

A61 Bichsel Musashiseki

95.7

97.1

84.3

90.0

97.1

98.5

100.0

100.0

98.5

97.1

97.1

A62 Lexel Mansion Ueno Matsugaya

89.6

86.4

96.8

93.2

96.3

92.8

92.8

96.3

96.3

100.0

93.2

A63 Towa City Coop Sengencho

87.6

85.4

95.7

96.3

89.8

88.5

90.9

89.0

91.5

91.1

94.3

A64 Royal Park Omachi

83.4

81.5

83.7

89.0

93.2

94.8

93.2

95.3

100.0

98.1

96.4

A65 Lexington Square Haginomachi

94.8

97.6

97.4

97.4

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A66 Visconti Kakuozan

78.3

78.3

72.5

89.7

100.0

100.0

100.0

100.0

100.0

88.6

88.6

A71 Lexington Square Daitabashi

89.4

95.1

90.9

97.2

97.9

88.7

87.3

85.2

89.4

92.9

95.1

A72 Lexington Square Honjo Azumabashi

97.0

94.0

97.0

87.9

90.9

93.9

100.0

96.9

96.9

100.0

100.0

A73 AMS TOWER Minami 6-Jo

89.3

72.5

84.3

96.1

88.6

88.6

87.5

89.3

90.7

91.0

90.0

A75 Spacia Ebisu

87.8

88.7

88.7

91.3

97.1

94.5

93.1

90.9

90.7

91.0

92.2

A76 Neo Prominence

－

－

－

－

－

－

－

94.0

94.8

94.8

94.8

A77 Invoice Shin-Kobe Residence

－

－

－

－

－

－

－

99.1

95.4

97.2

99.1

A78 Cosmo Court Motomachi

－

－

－

－

－

－

－

97.5

98.8

98.8

97.5

A79 Revest Honjin

－

－

－

－

－

－

－

98.8

93.8

95.0

93.8

A80 Revest Matsubara

－

－

－

－

－

－

－

96.8

98.1

98.1

91.9

A81 Sun Terrace Minami Ikebukuro

－

－

－

－

－

－

－

97.4

92.1

94.7

100.0

A82 Alba Noritake Shinmachi

－

－

－

－

－

－

－

98.6

97.3

93.8

98.6

A83 Revest Meieki Minami

－

－

－

－

－

－

－

96.6

96.6

96.6

97.0

A84 Revest Heian

－

－

－

－

－

－

－

90.3

93.6

92.0

95.2

A85 Vendir Hamaotsu Ekimae

－

－

－

－

－

－

－

97.7

94.6

93.4

93.3

A86 Salvo Sala

－

－

－

－

－

－

－

81.1

79.2

88.9

89.9

A87 Excellente Kagurazaka

－

－

－

－

－

－

－

94.2

91.2

94.1

100.0

A88 Luna Court Edobori

－

－

－

－

－

－

－

96.0

98.0

96.0

96.0

A89 Winntage Kobe Motomachi

－

－

－

－

－

－

－

96.3

92.8

94.4

98.2

―49―

No.

Property Name

15th Fiscal 15th Fiscal
Mid-Period
PeriodAs of
As of
Jun. 2010 Dec. 2010

16th Fiscal
PeriodAs ofJun. 2011

17th Fiscal
PeriodAs ofDec. 2011

18th Fiscal
PeriodAs ofJun. 2012

As ofJul. 2012

As ofAug. 2012

As of
Sep. 2012

As ofOct. 2012

As of
Nov 2012

As of
Dec. 2012

19th Fiscal Period

A90 Queen's Court Fukuzumi

－

－

－

－

－

－

－

100.0

96.6

100.0

100.0

A91 Corp Higashinotoin

－

－

－

－

－

－

－

100.0

97.9

95.6

100.0

A92 Belair Oimachi

－

－

－

－

－

－

－

96.4

96.4

96.4

92.6

A93 Siete Minami-Tsukaguchi

－

－

－

－

－

－

－

100.0

100.0

100.0

94.9

A94 Prime Life Sannomiya Isogami Koen

－

－

－

－

－

－

－

100.0

100.0

100.0

100.0

A95 HERMITAGE NANBA WEST

－

－

－

－

－

－

－

87.9

87.9

96.0

91.2

A96 Century Park Shinkawa 1-bankan

－

－

－

－

－

－

－

100.0

100.0

100.0

100.0

A97 West Avenue

－

－

－

－

－

－

－

92.5

92.5

92.5

90.0

A98 Little River Honmachibashi

－

－

－

－

－

－

－

100.0

96.9

96.9

96.9

A99 Prime Life Mikage

－

－

－

－

－

－

－

93.4

100.0

92.0

85.5

B8

Kindai Kagakusha Building

89.7

67.2

75.2

85.5

85.5

85.5

85.5

85.5

85.5

85.5

100.0

B9

Shinjuku Island

0.0

0.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B13 New Edobashi Building

100.0

63.4

51.2

－

－

－

－

－

－

－

－

B14 Lexington Plaza Nishigotanda

80.2

72.3

62.4

92.0

92.0

92.0

100.0

100.0

100.0

100.0

100.0

B15 Cross Square NAKANO

75.3

54.7

49.2

44.3

54.0

54.0

54.0

55.7

54.2

54.2

54.2

B16 Ohki Aoba Building

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B17 Lexington Plaza Hachiman

96.6

97.3

94.6

94.6

94.6

94.6

94.6

94.6

94.6

94.6

94.6

B18 AEON TOWN Sukagawa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C1

Stop Parking Kanda-Sudacho

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C21 Bon Sejour Chitose Funabashi

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C22 Bon Sejour Yotsugi

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C23 Bon Sejour Hino

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C24 Bon Sejour Musashi Shinjo

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C25 Bon Sejour Komaki

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C26 Bon Sejour Hadano Shibusawa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

C27 Bon Sejour Itami

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

93.7

91.1

91.2

95.0

95.1

95.1

95.6

96.1

96.2

96.4

96.2

Total

(Note) “Occupancy Rate” is computed by dividing the leased area by leasable area, and rounded to the second digit.

―50―

Affiliate companies of Invincible Investment Corporation (as of the date of this document)(1) Structure Chart of Invincible Investment Corporation

Asset Manager/administrative agent(Organizational Management)

Consonant Investment・Management Co., Ltd.

①

②

④

③

Big Co., Ltd.

EP Consulting Services
Corporation (Note)

Invincible Investment Corporation
Shareholders’ Meeting

Operational Function
Pipeline Support Company

Administrative Agent(Accounting, etc.)

Invincible Investment Corporation

Executive Board Members
Executive Director: Naoki
Shibatsuji
Supervisory Director: Takashi
TakahashiSupervisory Director: Hiroyuki
Fujimoto

Accounting Auditor

Ernst & Young ShinNihon
LLC

Number⑤⑥

Asset Custodian
Sumitomo Mitsui Trust
Bank, Limited

Administrative agent for unitholders’register/special accounts administrator

Sumitomo Mitsui
Trust Holdings, Inc.

Special Accounts Administrator⑦

Mitsubishi UFJ Trust &Banking Corporation

Documents①

Asset Management Agreement③

Real Estate Acquisition Support (Information Provision) Agreement⑤

Asset Custody Agreement⑦

Special Accounts Administration Agreement②

Organizational Management Agreement④

Administrative Agent Agreement⑥

Unitholders’ Register Administrative Agent Agreement(Note) 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.

―51―

(2)

Name, operational role and summary of operations of the Investment Corporation and its affiliate companies

Name
Invincible Investment Corporation

Operational role
Investment
corporation

Consonant Investment Management Asset manager/Co., Ltd.
administrative agent(organizational
management)

Summary of operations
Pursuant to its articles of incorporation, the investment
corporation invests funds collected from unitholders, etc. in theoperating assets, and conducts its operations by seeking to ensure
steady growth in assets and stable earnings from a medium-tolong term perspective.
The Asset Manager entered into an asset management agreementwith LCP on September 21, 2005, and engaged in asset
management operations as the asset manager under the Investment
Trust Act pursuant to such agreement, as well as to LCP’s articles
of incorporation and the Asset Manager’s investment guidelines,
which constitute its internal rules. In connection with the merger
on February 1, 2010, the Investment Corporation succeeded to thisagreement. The operations entrusted to the Asset Manager include(1) management of the operating assets, (2) operations related tofund-raising for the Investment Corporation, (3) reporting thestatus of the operating assets to the Investment Corporation, (4)the drafting and execution of a management plan regarding theoperating assets, and (5) other operations accompanying or
associated with (1) through (4).
In addition, the Asset Manager entered into an organizational
management agreement with the Investment Corporation dated
October 31, 2011. Pursuant to this agreement, the Asset Manager
serves as the administrative agent under the Investment Trust Act(Article 117, Paragraph 4) and provides the following services: (1)services related to the operation of the Investment Corporation’s
unitholders’ meeting (excluding the services to dispatch the
documents of the unitholders’ meeting, accept voting forms andcount vote rights), (2) services relating to the operation of themeetings of the board directors, and (3) services accompanying or
associated with (1) or (2).

EP Consulting Services Corporation Administrative agent EP Consulting Services Corporation entered into an administrative(accounting, etc.)
agent agreement with the Investment Corporation, dated August 1,
2012. Pursuant to this agreement, EP Consulting Services
Corporation serves as the administrative agent under the Investment
Trust Act (Article 117, Paragraphs 5 and 6) and provides thefollowing services: (1) Services relating to accounting, (2) services
relating to preparation of account books, 3) services relating to tax
payments, and (4) other services associated with or accompanying(1) through (3).
Sumitomo Mitsui Trust Bank,
LimitedAsset custodian

Sumitomo Mitsui Trust Bank, Limited entered into an asset custodyagreement with LCP dated September 20, 2005. In connection withthe merger on February 1, 2010, the Investment Corporation
succeeded to the agreement. Pursuant to this agreement, Sumitomo
Mitsui Trust Bank, Limited serves as the asset custodian (under
Article 208 of the Investment Trust Act) and provides the following
services: (1) providing custody of all documentation, etc. (property
registration certificate, trust beneficiary certificate, agreement,
certificates and other documentation related to securities) necessary
to evidence the Investment Corporation’s rights over the assets heldby the Investment Corporation (meaning all assets acquired under
Article 193 of the Investment Trust Act, within the scope set forth in
the Investment Corporation’s articles of incorporation, which wereprepared in accordance with Article 67 of the Investment Trust Act),as well as other documentation, (2) services related to the
management of deposits and withdrawals in cash deposit accounts
and transfers, (3) preparation of account books, (4) the sending andtransporting of things necessary for (1) through (3), (5) providing
custody of the Investment Corporation’s seal and (6) other services
associated with or accompanying (1) through (5).

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Name
Sumitomo Mitsui Trust Holdings,
Inc.

Operational role
Summary of operations
Administrative agent Sumitomo Mitsui Trust Holdings, Inc. entered into a unitholders’for unitholders’register administrative agent agreement with the Investment
register/special
Corporation, dated January 19, 2010. Pursuant to this agreement,
accounts administrator Sumitomo Mitsui Trust Holdings, Inc. provides the following
services as an administrative agent under the Investment Trust Act:(1) creation, administration and custody of the unitholder register,(2) recording of data in the unitholders’ register and the registrationand cancellation of pledges, (3) recording unitholders’ names andaddresses, (4) receipt of documentation from unitholders, (5)distribution of unitholders’ meeting convocation notices, notice ofresolutions and accompanying reference documents, and preparationof voting certificates and proxies), (6) calculation of distribution of
cash and services associated with administration of such payments(7) determination of distribution amount after the duration of thepayment period for the distribution payment handling bank andadministration of such payment, (8) responding to inquiries
regarding the investment units and services in connection with
issuing various certificates, (9) handling and custody of documents
belonging to the Investment Corporation and used in connection
with the execution of its duties as well as undelivered parcel, (10)services related to the issuance of offered investment units, (11)services related to the merger or split of investment units, (12)services related to receipt of claims from unitholders exercisingrights, etc. and requests from unitholders (limited to matters related
to (1) through (11)), (13) preparation of statistical data required by
the Investment Corporation pursuant to laws and ordinances or thisagreement, (14) services related to receipt of information from theunit transfer institution, and (15) other than (1) through (14), any
additional services agreed upon by the Investment Corporation andthe administrative agent.
In addition, Sumitomo Mitsui Trust Holdings, Inc. entered into a
special accounts administration agreement, dated November 18,
2008, with LCP. Pursuant to this agreement, as an administrative
agent under the Investment Trust Act, Sumitomo Mitsui TrustHoldings, Inc. provides services related to the creation,
administration and custody of the transfer account book relating to
the special account for previous unitholders of LCP prior to themerger and other services related to the transfer account book. In
connection with the merger on February 1, 2010, the Investment
Corporation succeeded to this agreement.

Mitsui UFJ Trust & Banking
Corporation

Special accounts
administrator

A special accounts administration agreement was entered into with
the Investment Corporation dated December 26, 2008. Pursuant tothis agreement, as an administrative agent under the Investment
Trust Act, Mitsubishi UFJ Trust & Banking Corporation provides
services related to the creation, administration and custody of thetransfer account book relating to the special account for unitholdersof the Investment Corporation prior to the merger and other services
related to the transfer account book. In addition, on January 1, 2011,
the agreement was succeeded to from Daiko Clearing Services
Corporation to Mitsubishi UFJ Trust & Banking Corporation
through a corporate split.

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(3) Other Significant Affiliate of the Investment Corporation
Operational role
Operational function
Pipeline support
companyName
Big Co., Ltd.

Summary of operations
Big Co., Ltd. entered into a real estate acquisition support(information provision) agreement with LCP and the AssetManager dated November 8, 2005. In connection with the merger
on February 1, 2010, the Investment Corporation succeeded to thisagreement. Pursuant to the agreement, as a general matter, Big
Co., Ltd. has agreed to the following: (1) when considering salesof its own assets that meet the investment policies and investment
criteria set forth in the Investment Corporation’s investment
guidelines, or when it is involved in the sale of such an asset by athird party, except where the provision of information is
impractical, Big Co., Ltd. will provide such information to the
Asset Manager preferentially, and if the Asset Manager expresses
interest in acquiring such asset, Big Co., Ltd. will discuss the termsof a sale in good faith or negotiate towards the acquisition of such
asset in good faith (provision of information) and (2) Big Co., Ltd.
will provide reports to the Investment Corporation and the AssetManager regarding the real estate market, with a focus on trends inthe real estate market, current status and future trends regarding
real estate demand, current status and future prospects of the
supply of new real estate, tenant needs and rental market within
Japan and in certain geographic areas (market research services).

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【Investment Target】(1)

Pursuant to Article 9 of its Articles of Incorporation, the Investment Corporation invests principally in the specified
assets set forth below.

(a)Real estate, real estate leasehold interests and surface rights(b)

Trust beneficiary interests for real estate, real estate leasehold interests and surface rights (including comprehensive
trusts holding money incidental to real estate)(c)Trust beneficiary interests in cash the purpose of which is to primarily invest in real estate, real estate leasehold interestsand surface rights(d)Equity interests in which one of the parties agrees to make a contribution to an investment by the other party inthe assets listed above, and such other party invests the contributed property mainly in such assets and distributes
the profits derived from such investment (“anonymous partnership interests”)(e)Trust beneficiary interests in cash the purpose of which is to principally invest the trust property in anonymous(f)Preferred equity interests in special purpose companies (limited, however, to cases where the purpose is to invest

partnership interests
in underlying assets of which more than one half is real estate, etc.)(g)

Beneficiary certificates for special purpose trusts (limited, however, to cases where the purpose is to invest inunderlying assets of which more than one half is real estate, etc., excluding assets corresponding to (b), (c) and
(e)

(h)

Beneficiary certificates for investment trusts (limited, however, to cases where the purpose is to invest inunderlying assets of which more than one half is real estate, etc.)(i)

Investment securities (limited, however, to cases where the purpose is to invest in underlying assets of whichmore than one half is real estate, etc.)(2)

In order to manage funds in an efficient manner, the Investment Corporation may investment in the following
specified assets.

(a)

Securities (“securities” as defined in Article 2(1) of the Financial Instruments and Exchange Act (Act No. 25 of 1948,
as amended, or the “FIEA”) and interests that are deemed to be securities pursuant to Article 2(2) of the FIEA)(b)

Monetary claims (meaning, as set forth in the Order for Enforcement of the Act on Investment Trusts and Investment
Corporations, ordinary deposits, large time deposits and negotiable certificates of deposit)(c)Call loans(d)Trust beneficiary interests in cash the purpose of which is to invest in assets forth in (b) and (c), as well as trust
beneficiary interests in cash the purpose of which is to invest in such trust beneficiary interests(e)Interests related to financial futures transactions(f)Interests related to financial derivative transactions(3)

In addition to the specified assets set forth in (1) and (2) above, the Investment Corporation may invest in thefollowing assets as necessary in connection with investing in real estate, etc.

(a)

Trademark rights, rights of exclusive use and rights of non-exclusive use as set forth in the Trademark Act (Act No
127 of 1959, as amended) (limited, however, to cases that are ancillary to investing in real estate, etc.)(b)

Rights to use the source of hot springs as set forth in Article 2(1) of the Hot Springs Act (Act No. 125 of 1948, as
amended) as well as related facilities (limited, however, to cases that are ancillary to investing in real estate, etc.)(c)

Rights to emit equivalent quotas of carbon dioxide and similar gases under the Act on Promotion of Global Warming(d)

Copyrights, etc. under the Copyright Act (Act No. 48 of 1970, as amended)

Countermeasures (Act No. 117 of 1998, as amended) (including rights to emit greenhouse gasses)(e)Equity interests (limited to equity interests represented by securities) related to a partnership contract as set forth in
Article 667 of the Civil Code (Act No. 89 of 1896, as amended, the "Civil Code") (limited, however, to partnerships
which are established by contributing real estate, real estate leasehold interests, surface rights, or easements for the
purpose of leasing, operating, and managing such real estate, etc.)(f)Movable assets (as specified in the Civil Code)(g)

Easements(h)Specified shares as defined in Article 2(6) of the Securitization Act

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(i)

Other than (a) through (h), assets whose ancillary acquisition is necessary or useful to investing in real estate, etc. andreal estate-related securities(j)Trust beneficiary interests in case the purpose of which is to invest in (a) through (h)(k)

Rights as employee in a limited liability company pursuant to the Companies Act (Act No. 86 of 2005)(l)

Rights as contributor of funds to general incorporated associations (including the right to demand recovery of funds)
under the Act on General Incorporated Associations and General Incorporated Foundations (Act No. 48 of 2006)(4)

With respect to rights to be indicated on securities as set forth in Article 2(2) of the FIEA, even if securities
indicating such rights are not issued, such rights shall be deemed to be securities, and (1) through (3) isapplicable.

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【Distribution Policy】
INV conforms to the policies set out below with regards to cash distributions to unitholders or registered pledgees ofinvestment units listed or recorded in the registry of unitholders at the end of each fiscal period.
(1)

Distribution of Profits
Distributable amounts generated from the management of INV's assets (hereinafter "distributable amounts")

refers to the amount of profits calculated in conformity with the provisions of the Law Concerning Investment Trusts andInvestment Corporations (hereinafter "the Law") or generally accepted accounting principles in Japan (net assets in thebalance sheet as of the closing date of each fiscal period less unitholders' capital, retained earnings, and evaluation,
currency translation, etc.) (Article 17, Item 1 of the Articles of Incorporation of INV).
INV determines the amount of distribution, which must be an amount that exceeds 90% of the amount of INV's
distributable income as stipulated in Article 67, Item 15 (the Special Provisions of Taxation for Investment Corporations)of the Act on Special Measures Concerning Taxation in principle (hereinafter "distributable income") (or the relevant
amount after modification if there is any modification to the calculation of the said amount due to revisions to the law,etc.) (However, the amount may not exceed the distributable amount.). If, however, a deficiency account for tax purposesarises or income for tax purposes does not arise due to the carried-over deduction of a deficiency account, INV shalldetermine the amount of distribution on a rational basis. In addition, INV can accumulate reserves and allowances fromthe distributable income amount that are deemed to be necessary for maintaining its investment assets and improving or
increasing the value of assets such as long-term reserve for maintenance, payment reserve, reserve for distribution, andother similar reserves, etc. (Article 17, Item 2 of the Articles of Incorporation of INV).
Any retained earnings not allocated for dividends will be managed based on INV's investment asset targets and policies(Article 17, Item 3 of the Articles of Incorporation of INV).
(2)

Cash Distribution Exceeding Profits
In cases when the distributable amount is less than 90% of distributable income, or when INV considers it

appropriate depending on the economic circumstances and the trends in the real estate market, the leasing market, etc.,
INV may, in accordance with the provisions under the Law, determine an additional amount to be distributed to theunitholders in cash as a refund of the investment over and above the distributable amount, with the upper limit of theadditional amount being prescribed in rules of the Investment Trusts Association, Japan, based on the approved cash
distribution statement in accordance with the Law . In this case, if such cash distributions do not satisfy the requirements
for Special Provisions of Taxation for Investment Corporations, INV may distribute monies in an amount determined by
INV for the purpose of satisfying those conditions (Article 17, Item 4 of the Articles of Incorporation of INV).
(3)

Methods of Distribution
Distributions shall be paid in cash and based on the number of investment units held to unitholders who arelisted or recorded in the registry of unitholders on the closing date of each fiscal period, or to registered pledgees ofinvestment units (Article 17, Item 5 of the Articles of Incorporation of INV).
(4)

Statutory Limitation for Dividends
INV will be exempted from its obligation to pay distributions to unitholders or registered pledgees ofinvestment units after a lapse of three years from the commencement date of payment. No interest will accrue with respect
to unpaid distributions (Article 17, Item 6 of the Articles of Incorporation of INV).

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