Semi-Annual Report
Twenty-third fiscal period
November 1, 2014 >>>April 30, 20150

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

Contents
To Our Investors
Summary of Portfolio Properties
Profile of the Asset Management Company
Performance Report
Financial Section
Business Structure/Corporate Data
Website

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To Our Investors
Dear Investors,
I would like to thank all of you for your continuing trust in Nomura Real Estate Office Fund, Inc. and tell you howmuch we value being a part of your financial portfolio.
Closing of accounts for the 23rd fiscal period, which ended April 30, 2015, showed the following results. For theperiod, NOF achieved operating revenues of 13,025 million yen, ordinary income of 3,614 million yen, and net incomeof 3,613 million yen. Dividends per share totaled 9,699 yen.
In the office rental market, there was an increase in needs for office relocation, and consolidation and floor
expansion for the purpose of improvement of locations and specifications, new store opening, business expansion orconsolidation of corporate bases due to mergers and acquisitions of companies, backed by improvement in corporate
earnings. These led to gradual improvement in the supply-demand balance, resulting in the vacancy rate for the five
central wards of Tokyo decreasing to 5.65% as of the end of September 2014, a decrease to the 5% level for the firsttime in five years and seven months (5.34% as of the end of April 2015), and remained at the 5% level afterwards.
With such improvement in the supply-demand balance, rent levels are continuing to increase and the office rental
market is believed to have entered a recovery phase.
In NOF’s portfolio as well, while the gap between the market rent level and the portfolio rent level is shrinking
compared to the previous period, it has not yet been eliminated and the situation continued to be very difficult. In thefiscal period under review, NOF promoted the expansion of properties with increased advertised rent, taking in existing
tenants’ need for expansion of floor space within the same building and finding new tenants for newly-advertised floor
space. In addition, upon contract renewals, rent revision negotiations were conducted in an effort to minimize decline
in the portfolio rent level, while taking the individual rental market into consideration. As a result, comparative
monthly rent of tenants renewing contracts is showing an improving trend. Furthermore, NOF endeavored to improvetenant satisfaction by systematically carrying out renovation work on common areas as well as updating equipment andcarrying out other function maintenance work.
As a result, the average portfolio occupancy rate as of the end of the 23rd fiscal period was 97.5%, up 0.4 points,
maintaining a high level.
Additionally, with the acquisition of PMO Nihonbashi Kayabacho (acquisition price: 4.91 billion yen) from
Nomura Real Estate Development, the sponsor, NOF’s asset size as of the end of the 23rd fiscal period consisted of 55
properties (total leasable floor space: 430,973.52 m2) totaling approx. 414.4 billion yen (total acquisition price).
In addition, NOF concluded a merger agreement with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate
Residential Fund, Inc. as of May 27, 2015. We believe that this merger will help realize the elimination of unrealized loss
and improve the decreasing profitability of the portfolio, which were matters at hand for NOF.
Again, NOF is grateful for the trust you have placed in us and we look forward to continuing progress as we move
together toward the future.

Yoshiyuki Ito
Executive Director
Nomura Real Estate Office Fund, Inc.
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Summary of Portfolio Properties
as of April 30, 2015
Leasable Floor Space（㎡）

Completed

Acquired

Acquisition Price(Millions of Yen)

% of Total

SRC・RC・S B5/50F

31,500.89

May 1978Dec. 8, 2003

38,730

9.3

Shinagawa-ku, Tokyo

SRC・RC B2/26F

25,127.12

Jun. 1996

Mar. 18, 2005

33,080

8.0

Kojimachi Millennium Garden

Chiyoda-ku, Tokyo

S・RC・SRC B4/21F

16,384.19

May. 2000

Mar. 28, 2014

26,500

6.4

NOF Nihonbashi Honcho Bldg.

Chuo-ku, Tokyo

SRC B3/8F

19,157.05

Apr. 1961

Dec. 5, 2003

20,600

5.0

Shinagawa-ku, Tokyo

S・RC・SRC B2/21F

18,051.60

Jan. 1995

Feb. 27, 2004

14,8003.6

NOF Shinjuku Minamiguchi Bldg.

Shibuya-ku,Tokyo

SRC B2/8F

6,709.22

Apr. 1974

Jun. 25, 2008

12,300

3.0

NOF Shibuya Koen-dori Bldg.

Shibuya-ku, Tokyo

SRC・RC B2/8F

3,457.32

Sep. 1987

Sep. 28, 2004

12,000

2.9

Secom Medical Bldg.

Chiyoda-ku, Tokyo

S・SRC B1/7F

8,821.24

Feb. 2005

Sep. 1, 2006

11,5002.8

NOF Shiba Bldg.

Minato-ku, Tokyo

SRC・S B1/7F

8,165.10

Mar. 1991

May 25, 2004

10,000

2.4

Nishi-Shinjuku Showa Bldg.

Shinjuku-ku, TokyoRC B2/11F

5,686.89

Apr. 1982

Nov. 30, 2005

8,800

2.1

NRE Shibuya Dogenzaka Bldg.

Shibuya-ku, Tokyo

SRC・RC B2/9F

3,358.00

Mar. 1999

Sep. 26, 2008

7,660

1.8

NOF Tameike Bldg.

Minato-ku, Tokyo

SRC B1/9F

4,715.20

Aug. 1959

Sep. 29, 2005

7,400

1.8

Iwamoto-cho Toyo Bldg.

Chiyoda-ku, Tokyo

RC・S B1/9F

4,117.26

Jun. 1993

Jun. 25, 2008

6,020

1.5

NOF Shinagawa Konan Bldg.

Shinagawa-ku, Tokyo

SRC B1/8F

7,378.55

Nov. 1987

Dec. 8, 2003

5,500

1.3

NOF Surugadai Plaza Bldg.

Chiyoda-ku, Tokyo

S・RC B1/8F

4,160.94

Apr. 1997

Feb. 27, 2004

5,150

1.2

PMO Nihonbashi Honcho

Chuo-ku, Tokyo

S・SRC B1/9F

2,450.06

Jun. 2008

Nov. 5, 2008

5,000

1.2

PMO Nihonbashi KayabachoChuo-ku, Tokyo

S・SRC B1/12F

3,472.70

Aug. 2014

Mar. 3, 2015

4,910

1.2

Shinagawa-ku, Tokyo

S・SRC B1/9F

5,545.13

Dec. 1986

Jul. 5, 2013

4,100

1.0

NRE Higashi-nihonbashi Bldg.

Chuo-ku, Tokyo

S・SRC B1/9F

4,554.98

Sep. 1990

Jan. 14, 2009

4,060

1.0

PMO Akihabara

Chiyoda-ku, TokyoS 8F

3,037.37

Jan. 2010

Jan. 13, 2012

3,790

0.9

Hatchobori NF Bldg.

Chuo-ku, Tokyo

SRC B1/9F

2,854.83

Oct. 1990

Aug. 10, 2007

3,160

0.8

NOF Kanda Iwamoto-cho Bldg.

Chiyoda-ku, Tokyo

SRC 9F

4,076.38

Jul. 1988

Feb. 26, 2004

3,080

0.7

NOF Takanawa Bldg.

Shinagawa-ku, TokyoS 8F

3,361.48

Apr. 1993

Feb. 27, 2009

3,010

0.7

PMO Hatchobori

Chuo-ku, Tokyo

S・SRC B1/9F

2,074.66

May 2009

Nov. 1, 2011

2,430

0.6

NOF Minami Shinjuku Bldg.

Shibuya-ku, Tokyo

SRC B1/8F

2,464.71

Mar. 1986

Jun. 25, 2004

2,280

0.6

PMO Nihonbashi Odenmacho

Chuo-ku,Tokyo

S 10F

2,054.21

Mar. 2010

Jul. 5, 2013

2,080

0.5

Central Shintomicho Bldg.

Chuo-ku, TokyoS 8F

2,465.86

Mar. 1990

Jun. 25, 2008

1,750

0.4

PMO Higashi-nihonbashi

Chuo-ku, TokyoS 9F

1,859.43

Oct. 2009

Nov. 1, 2011

1,480

0.4

-

207,062.37--

261,170

63.0

RegionName

Location

Type of Structure

Shinjuku Nomura Bldg.

Shinjuku-ku, Tokyo

NRE Tennozu Bldg.

Tennozu Park Side Bldg.

CentralTokyo

Otemachi Tatemono Gotanda Bldg

Subtotal （28 properties）
NRE Ueno Bldg.

Taito-ku, Tokyo

SRC・S B1/10F

4,869.81

Mar. 1990

Jan. 14, 2009

7,830

1.9

NOF Technoport Kamata Center Bldg.

Ota-ku, Tokyo

S・SRC B1/11F

13,847.84

Sep. 1990

Dec. 5, 2003

6,416

1.5

NF Hongo Building

Bunkyo-ku,Tokyo

S・SRC B1/9F

3,820.09

Aug. 1989

Jul. 5, 2013

4,700

1.1

Toho Edogawabashi Bldg.

Bunkyo-ku, Tokyo

SRC B1/9F

2,058.95

Mar. 1993

Mar. 2008

2,080

0.5

Toshin Meguro Bldg.

Meguro-ku, Tokyo

SRC 9F

1,341.17

Sep. 1989

Jun. 25, 2008

1,340

0.3

Musashino City, Tokyo

SRC・S B2/11F

3,900.85

Oct. 1991

Feb. 28, 2006

3,700

0.9

Musashino City, Tokyo

SRC 8F

1,936.40

Oct. 1987

Jan. 14, 2009

1,800

0.4

Faret Tachikawa Center Square

Tachikawa City, Tokyo

S・SRC・RC B2/12F

6,851.48

Dec. 1994

Dec. 5, 2003

3,290

0.8

NOF Kawasaki Higashiguchi Bldg.

Kawasaki-ku, Kawasaki City

S･SRC B1/12F

8,266.67

Mar. 1988

Jun. 30, 2005

9,500

2.3

NOF Yokohama Nishiguchi Bldg.

Nishi-ku, Yokohama City

SRC B1/9F

6,866.60

Oct. 1985

May 12, 2005

5,050

1.2

NOF Shin-Yokohama Bldg.

Kohoku-ku, Yokohama City

SRC B1/9F

8,074.83

Oct. 1990

Dec. 5, 2003

3,600

0.9

Yokohama Odori Koen Bldg.

Naka-ku,Yokohama City

S・RC B1/11F

4,234.62

Mar. 1989

Sep. 28, 2007

2,993

0.7

-

66,069.31--

52,29912.6

Suburban Crystal Park Bldg.
Tokyo
NOF Kichijoji Honcho Bldg.

Subtotal （12 properties）
Sapporo North Plaza

Chuo-ku, Sapporo City

SRC B2/12F

13,642.16

Aug. 1981

Jun. 1, 2006

6,820

1.6

NRE Sapporo Bldg.

Kita-ku, Sapporo CityS B1/10F

6,559.34

Jul. 2008

Nov. 5, 2008

5,300

1.3

JCB Sapporo Higashi Bldg.

Chuo-ku, Sapporo City

SRC B1/7F

9,062.04

Oct. 1966

Feb. 8, 2008

3,700

0.9

NOF Sendai Aoba-dori Bldg.

Aoba-ku, Sendai City

SRC B2/11F

6,033.70

Jul. 1968

Nov. 30, 2005

3,200

0.8

Baba-dori, Utsunomiya City

S・SRC B2/10F

5,882.20

Dec. 1999

Dec. 5, 2003

2,970

0.7

Naka-ku, Nagoya City

S・RC B1/11F

3,282.90

Aug. 2009

Dec. 25, 2009

4,050

1.0

Nakamura-ku, Nagoya CityS B2/12F

4,655.74

Mar. 1991

Sep. 29, 2005

3,550

0.9

Omron Kyoto Center Bldg.

Simogyo-ku, Kyoto City

S・RC B2/11F

34,616.84

Jul. 2000

Mar. 20, 2007

23,700

5.7

SORA Shin-Osaka 21

Yodogawa-ku, Osaka City

SRC B2/21F

21,234.65

Jul. 1994

Apr. 25, 2008

19,251

4.6

NRE Osaka Bldg.

Chuo-ku, Osaka City

SRC B2/12F

16,977.79

Dec. 1983

Dec. 5, 2003

6,410

1.5

NRE Nishi-Umeda Bldg.

Kita-ku, Osaka City

S・SRC B2/12F

5,213.02

Jun. 1993

Sep. 26, 2008

5,660

1.4

NRE Yotsubashi Bldg.

Nishi-ku, Osaka City

S・SRC B2/15F

11,558.68

Nov. 1991

Dec. 5, 2003

3,940

1.0

NRE Hiroshima Bldg.

Naka-ku, Hiroshima City

SRC B2/9F

7,828.17

Jul. 1976

Dec. 5, 2003

1,930

0.5

NOF Hakata Ekimae Bldg.

Hakata-ku, Fukuoka City

SRC B2/11F

7,525.27

Jul. 1983

Jun. 27, 2008

6,750

1.6

NOF Tenjin-Minami Bldg.

Chuo-ku, Fukuoka City

S 10F

3,769.34

Feb. 2008

Mar. 27, 2009

3,739

0.9

Subtotal （15 properties）-

157,841.84--

100,970

24.4

Total (55 properties)-

430,973.52--

414,439

100.0

NOF Utsunomiya Bldg.
NOF Nagoya Fushimi Bldg.
NOF Nagoya Yanagibashi Bldg.
Other
Cities

Note:

Note:

Note:

Note:
Note:
Note:
Note:

NOF has acquired all investment properties identified in the table above in the form of trust beneficial interests, except Secom Medical Building, NRE Shibuya Dogenzaka Building, PMO Nihonbashi
Honcho, PMO Nihonbashi Kayabacho, NRE Higashi-nihonbashi Building, PMO Akihabara, PMO Hatchobori, PMO Nihonbashi Odenmacho, NOF Takanawa Building, PMO Higashi-nihonbashi,
NRE Ueno Building, Toho Edogawabashi Building, Crystal Park Building, Yokohama Odori Koen Building, NRE Sapporo Building, JCB Sapporo Higashi Building, NOF Nagoya Fushimi Building,
SORA Shin-Osaka 21 and NRE Nishi-Umeda Building in the form of real estates.
"Abbreviations under ""Type of Structure"" indicate: S: Steel-frame, RC: Reinforced Concrete and SRC: Steel-frame Reinforced Concrete.
According to the notice of confirmation issued in accordance with the Building Standards Act, the floor of NOF Sendai Aoba-dori Building is described as 8 floors above the ground and 3 floors ofpenthouse with 2 floors below ground.""Leasable Floor Space" includes office and retail floor space for investment properties as of a specified date. In principle, exclusive and designated areas acquired under strata (unit) title have been
included. Leased common areas are also included. Leasable floor space for the Shinjuku Nomura Building is the space multiplied by NOF's share of trust beneficial interests acquired. According to themaster lease agreement, the rent of NRE Tennozu Building is the rent of the entire building multiplied by percentage of the share of common area. Thus, its leasable floor space is the floor space of theentire building multiplied by the said percentage. Each Leasable Floor Space indicates as of April 30, 2015.
"Completed" is a completed date of a building written on the title registration form. As for NOF Tameike Building, the date of completion is a date stated on the Certificate of Inspection in accordancewith the provisions of article 7(3) of the Building Standards Act as there is no date stated on the title registration form.
"% of Total" is the percentage of the total portfolio. The figures in the table above have been rounded to the nearest first decimal place. Accordingly, the total may not equal 100.0%
NOF has acquired a trust beneficial interest in the Shinjuku Nomura Building. The acquisition price represents the cost of purchasing 50.1% of the trust beneficial interest.
NOF transferred a part of the land of NOF Technoport Kamata Center Building (co-owned area) on August 31, 2007. The acquisition price on the list is the amount subtracting a book price of the asset
to be transferred (13 million yen) from the acquisition price before the transfer (6,430 million yen). The number of amount below unit is truncated.

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Profile of the Asset Management Company
As of October 1, 2011, Nomura Real Estate Asset Management Co., Ltd. (NREAM) was merged with Nomura Real Estate
Investment Management Co., Ltd. (NREIM) and Nomura Real Estate Capital Management Co., Ltd. (NRECM), with achange of its Japanese trade name from Nomura Fudosan Toshin to Nomura Fudosan Toshi Komon. We believe that theCompany can benefit from various synergy effects from this merger including the ability to quickly respond to changes in thereal estate and financial markets, the enhancement of expertise and experience necessary for real estate investment, and theability to provide asset management services through one of the largest real estate asset management companies in Japan.

Company:
Capital:Shareholder:
Incorporation:

Nomura Real Estate Asset Management Co., Ltd.
¥300 million (as of April 30, 2015)
Nomura Real Estate Holdings, Inc. (100%)January 24, 2003

Statutory Auditors

Corporate Planning
Legal & ComplianceInternal Audit
Accounting
Discretionary Investment Management Section

Investment Performance Analysis Section

President & CEO

Board of Directors

General Meeting of Shareholders

Board of Statutory Auditors

・Organization of the asset management company

Finance
Client Relations & Marketing
Investment Management

Chief Strategy Officer

Project Screening Committee

NPR Valuation Committee

Risk Management Committee

Compliance Committee

Investment Committee

Product Management
Research & Analysis Section
Acquisitions
Investment Management Planning
NOF Investment Management
NRF Investment Management
NMF Investment Management
NPR Investment Management

Profile of Chief Investment Officer
Shoji Yoshihara
Executive Officer,
Head of NOF Investment Management Department
Apr. 1987
Apr. 2009
Apr. 2010
Apr. 2012
Oct. 2012
Oct. 2014

Entered Nomura Real Estate Development Co., Ltd.
Development Manager, Third Business Group, Residential
Company
Chief of Secretary Office
Chief of Secretary Office, Nomura Real Estate Holdings, Inc.
Director and Executive Officer (in charge of Fund Management
Department), Nomura Real Estate Asset Management Co., Ltd.
Director and Executive Officer, commissioned as Head of NOF
Investment Management Department (current position)

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Performance Report

Contents
Asset Management Report……………………..……...
Profile of the Company………………………………..…
Status of Investment Assets of the Company……......
Capital Expenditures………….…………………….......
Expenses and Liabilities……..……………………........
Trading during the 23rd fiscal period………
Other Information………………………………………..

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12
14
19
20
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Asset Management Report
1. CHANGES IN KEY INDICATORS
23rd Period

22nd Period

21st Period

20th Period

19th Period

from Nov. 1, 2014
to Apr. 30, 2015

from May 1, 2014
to Oct. 31, 2014

from Nov. 1, 2013
to Apr. 30, 2014

from May 1, 2013
to Oct. 31, 2013

from Nov. 1, 2012
to Apr. 30, 2013

Operating Revenues(¥mln)

13,025

13,105

12,26012,37812,673of which Real Estate Rental Revenues(¥mln)

13,025

13,105

12,26012,37812,434

Operating Expenses(¥mln)

7,874

7,664

7,154

7,250

7,128

(¥mln)

6,597

6,403

5,981

6,080

5,967

Operating Profits(¥mln)

5,150

5,441

5,105

5,127

5,544

Ordinary Income(¥mln)

3,614

3,942

3,630

3,636

4,027

Net Income(¥mln)

3,613

3,941

3,630

3,635

4,026

Total Assets(¥mln)

439,861435,644434,715404,207393,914of which Real Estate Rental Expenses(%)（+1.0）(+0.2)(+7.5)(+2.6)(−0.9)

Interest-Bearing Debts(¥mln)

196,950

192,080

192,330

164,350

179,200

Net Assets(¥mln)

215,198

215,525

215,310215,405

189,581(%)（-0.2）(+0.1)(−0.0)(+13.6)(+0.1)

Unitholders’ Capital(¥mln)

211,430

211,430

211,430

211,430

185,455

Number of Units Issued(Units)372,553

372,553

372,553

372,553

305,123(¥)

577,630

578,510

577,931

578,188621,329

Total Cash Distribution(¥mln)

3,613

3,941

3,725

3,725

3,787

Cash Distribution per Unit

(¥)

9,699

10,57910,00010,00012,412of which Cash Distribution of Profits

(¥)

9,699

10,57910,00010,00012,412of which Cash Distribution in excess of Profits

(¥)

－

－

－

-

-

(%)

0.8

0.9

0.9

0.9

1.0

Annualized ROA (Note 2)

(%)

1.7

1.8

1.7

1.8

2.1

ROE (Return on Equity)

(%)

1.7

1.8

1.7

1.8

2.1

Annualized ROE (Note 2)

(%)

3.4

3.6

3.4

3.5

4.3

Capital Adequacy Ratio (Note 4)

(%)

48.9

49.5

49.5

53.3

48.1

(Changes from Previous Period)(Changes from Previous Period)

Net Assets per Unit

ROA (Return on Assets) (Note 1)(%)（-0.6）(+0.0)(−3.8)(+5.2)(+0.4)LTV (Loan-to-Value) (Note 5)

(%)

44.8

44.1

44.2

40.7

45.5

Number of Operating Days

(days)

181

184

181

184

181

(%)

99.9

99.9

102.6

102.4

94.0

(Changes from Previous Period)

Payout Ratio (Note 6)
Number of Properties Held(bldgs)

55

54

54

53

50

Total Leasable Floor Space(㎡)

430,973.52

427,468.03

427,484.45

410,905.80

399,843.40

Number of Tenants(tenants)

862

840

832

812

771

(%)

97.5

97.1

97.5

96.4

95.9

Depreciation(¥mln)

1,845

1,806

1,695

1,658

1,654

Capital Expenditures(¥mln)

1,525

1,037

1,167

1,065

1,054

NOI (Net Operating Income) (Note 7)(¥mln)

8,272

8,508

7,973

7,955

8,121

FFO (Funds from Operation) (Note 8)(¥mln)

5,467

5,757

5,334

5,304

5,451

(¥)

14,675

15,454

14,31914,236

17,867

Occupancy Rate

FFO per Unit (Note 9)

Note 1: “ROA (Return on Assets)” = Ordinary Income / {(Total Assets at the beginning of the period + Total Assets at the end of the period) / 2} x 100
As for 20th period, the Total Assets were time-adjusted due to the additional issuance of investment units.
Note 2: “ROA” and “ROE” are annualized using the following number of operating days. 19th Period: 181 days, 20th Period: 184 days, 21st Period: 181 days, 22nd Period: 184days and. 23rd Period: 181 days.
Note 3: “ROE (Return on Equity)” = Net Income / {(Net Assets at the beginning of the period + Net Assets at the end of the period) / 2} x 100
As for 20th period, Net Assets were time-adjusted due to the additional issuance of investment units.
Note 4: “Capital Adequacy Ratio” = Net Assets / Total Assets x 100
Note 5: “LTV (Loan-to-Value)” = Interest-Bearing Debts / Total Assets x 100
Note 6: Rounded off to the first decimal place.
Note 7: “NOI (Net Operating Income)” = Real Estate Rental Revenues – Real Estate Rental Expenses + Depreciation
Note 8: “FFO (Funds from Operation)” = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs – Real Estate Sale Profit/Loss
Note 9: “FFO per Unit” = FFO / Number of Units Issued

62. OUTLINE OF INVESTMENTS IN THE 23rd FISCAL PERIOD
Nomura Real Estate Office Fund, Inc., incorporated on August 7, 2003 under the Act on Investment Trusts and Investment
Corporations of Japan, listed the unit certificates in the Real Estate Investment Trust (REIT) Market of the Tokyo Stock Exchange
on December 4, 2003 (TSE code 8959). The Company’s basic investment policy is to assure stable income from, and steady
growth of, investment assets over the mid-to-long-term. In accordance with this policy, we invest in properties mostly for officeuse in three largest conurbations and other major cities, or in property-backed securities that are backed by such properties.
Note:
The Act on Investment Trusts and Investment Corporations of Japan (Act No. 198 of 1951) is referred to as the "Investment Trust Act" hereinafter.
The term “unit certificates” are the securities issued by the Company and may be referred to as “investment units” or “units” hereinafter.
The term “investment assets” refers to those assets that belong to the Company.
Unless otherwise stated, for the purpose of this report, the concept of “property(ies)” is construed to include leasehold and superficies.
The term “property(ies)” refers to those assets defined in Section 27, Paragraph 1, Article (1) and (2), and “property-backed securities” refers to those assets definedin Section 27, Paragraph 1, Article (3) respectively of the Articles of Incorporation of the Company.
The terms “property(ies)” and “property-backed securities” are collectively referred to as “property-related assets” hereinafter.
The properties and underlying properties of the property-related assets are collectively referred to as the “investment properties”.

(1) Operating Environment
The Japanese economy continues to be on a moderate recovery trend given the bottoming out of domestic demand which had
been sluggish since the consumption tax hike in April 2014. Furthermore, improvement of corporate earnings and increase ofcapital investment are being seen boosted by the advancement of depreciation of the yen and increase of stock prices with theeffects of the Bank of Japan’s additional monetary easing as well as the postponement of the consumption tax hike and decreaseof commodity prices due to decreasing oil prices. According to the Bank of Japan’s Short-Term Economic Survey of Enterprises
in Japan (Tankan) in March 2015, the business conditions diffusion index (DI) for enterprises of all sizes and all industries had
increased by 1 point. Regarding the future of the economy, the recovery trend is thought to continue as steady improvements areseen in the employment and income environments and underlying support is expected from individual consumption.
In this environment, backed by expected improvements in real estate rental revenues and the financing environment being
favourable due to monetary easing, there is active acquisition of properties accompanying the initial public offering (IPO) of new
J-REITs and public offerings (PO) of existing J-REITs.
(a) Office Rental Market
In the office rental market, there was increase in needs for office relocation, and consolidation and floor expansion forthe purpose of improvement of locations and specifications, new store opening, business expansion or consolidation of
corporate bases due to mergers and acquisitions of companies, backed by improvement in corporate earnings. These led
to gradual improvement in the supply-demand balance, resulting in the vacancy rate for the five central wards of Tokyo
decreasing to 5.65% as of the end of September 2014, a decrease to the 5% level for the first time in five years andseven months (5.34% as of the end of April 2015) and remained at the 5% level afterwards. With such improvement in
the supply-demand balance, rent levels are continuing to increase and the office rental market is believed to have entereda recovery phase.
(b) Real Estate Market
In the real estate market, the financing environment being favorable due to monetary easing, signs of rental market
recovery, etc. led to the continuation of strong appetites for property acquisitions centering on J-REITs and other realestate funds and real estate companies domestic and abroad. On the other hand, there is partially a sense that competition
for acquiring properties is overheated with the increase of transaction participants and a sense of higher future asset
prices.
(2) Status of Managements for the Twenty-third Fiscal Period
Abiding by its basic policy of acquiring only properties that would generate stable returns over the mid-to-long-term, theCompany continues to invest in and manage properties that offer outstanding competitiveness in terms of both location and basic
building features, and stable cash flows.
NOF’s total assets under management (referred to as “portfolio” hereinafter) as of the end of the 23rd fiscal period (April
30, 2015) was 55 properties (total leasable floor space: 430,973.52 m2) totalling approximately 414.4 billion yen (totalacquisition price).
Concerning property management, in spite of the office rental market indicating a moderate recovery as
described in “(1) Operating Environment,” while the gap between the market rent level and the portfolio rent level is shrinking
compared to the previous period, it has not yet been eliminated and the situation continued to be very difficult. In the fiscal
period under review, NOF promoted the expansion of properties with increased advertised rent, taking in existing tenants’ needfor expansion of floor space within the same building and finding new tenants for newly-advertised floor space. In addition, upon
contract renewals, rent revision negotiations were conducted in an effort to minimize decline in the portfolio rent level, while
taking the individual rental market into consideration. As a result, comparative monthly rent of tenants renewing contracts isshowing an improving trend. Furthermore, the Company endeavored to improve tenant satisfaction by systematically carryingout renovation work on common areas as well as updating equipment and carrying out other function maintenance work.
As a result, the average portfolio occupancy rate as of the end of the 23rd fiscal period was 97.5%, up 0.4 points,
maintaining a high level. Stable real estate rental revenues are being secured by making the most of Nomura Real Estate Group’s(Note) know-how.
Note: “Nomura Real Estate Group” refers to a corporate group consisting of the consolidated subsidiaries of Nomura Real Estate Holdings, Inc. (referred to as
Nomura Real Estate Holdings hereinafter) including Nomura Real Estate Development Co., Ltd. (referred to as “NRED” hereinafter) but excluding Nomura
Real Estate Asset Management Co., Ltd. (referred to as the Asset Management Company hereinafter).

(3) Status of Funding
Concerning funding through interest-bearing debts, the Company has the basic financial policy of funding through promotion of
long-term, diversified and fixed interest rate debts, for the purpose of securing financial stability and avoiding future interest rate
hike risks. Based on this policy, the Company has implemented funding through long-term debts and issuance of investment
corporation bonds, while establishing a commitment line for the purpose of flexible funding at the time of property acquisition
and reduction of refinancing risks, from the perspective of securing stable funding base.
7

During the 23rd fiscal period, the Company procured funds with an average interest rate of 0.93% and an average borrowing
period of 7.0 years to refinance 23.35 billion yen of maturing interest-bearing debts (of which 11.0 billion yen is for investment
corporation bonds) and acquire 5.12 billion yen of funds for new property acquisitions, keeping in mind the efforts to makedebt long-term rather than short-term and fixed-rate rather than floating-rate. As a result, the balance of interest-bearing debt at
the end of the 23rd fiscal period was 196.95 billion yen (of which 34.5 billion yen is for investment corporation bonds), setting
loan-to-value (LTV) ratio at 44.8%.
The table below shows the credit ratings of the Company as of the end of the 23rd fiscal period.
Rating Company

RatingRating and Investment Information, Inc.

Outlook

Issuer Rating

A+

StableLong-term Corporate Credit Rating

A-

StableShort-term Corporate Credit Rating

A-2

Standard & Poor's Ratings Japan K. K.

3. STATUS OF CAPITALNo changes in the number of units issued have been made during the 23rd fiscal period. Changes in the number of units issued andunitholders’ capital until the 23rd fiscal period are as follows.
Date

Type of Issue

Aug. 7, 2003
Dec. 4, 2003
May 19, 2004
Jun. 16, 2004
May 1, 2005
May 24, 2005
May 25, 2006
Jun. 23, 2006
May 27, 2008
Jun. 24, 2008
Jul. 2, 2013
Jul. 29, 2013

Initial private placement (Note 1)
Public offering (Note 2)
Public offering (Note 3)
Third-party allotment (Note 4)
Public offering (Note 5)
Third-party allotment (Note 6)
Public offering (Note 7)
Third-party allotment (Note 8)
Public offering (Note 9)
Third-party allotment (Note 10)
Public offering (Note 11)
Third-party allotment (Note 12)

Number of Units Issued (Unit)
ChangeBalance400
400
148,200
148,600
35,000183,600
1,050
184,650
44,000228,650
1,320
229,970
34,800264,770
1,133
265,903
37,000302,9032,220
305,123
62,730367,853
4,700
372,553

Unitholders’ Capital (¥ mln)
ChangeBalance200
200
71,506
71,706
19,866
91,572595
92,16831,496123,665944
124,610
31,143
155,753
1,013
156,767
27,064
183,831
1,623
185,455
24,164
209,619
1,810
211,430

Note 1: Initial private placement at the offer price of \500,000 per unit to incorporate the Company.
Note 2: Public offering at the offer price of \500,000 (issue price of \482,500) to finance acquisition of new properties.
Note 3: Public offering at the offer price of \588,000 (issue price of \567,600) to finance acquisition of new properties and to repay borrowings.
Note 4: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of \567,600 following the public offering on May 19, 2004.
Note 5: Public offering at the offer price of \740,782 (issue price of \715,837) to finance acquisition of new properties and to repay borrowings.
Note 6: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of \715,837 following the public offering on May 1, 2005.
Note 7: Public offering at the offer price of \926,100 (issue price of \894,915) to finance acquisition of new properties and to repay borrowings.
Note 8: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of \894,915 following the public offering on May 25, 2006.
Note 9: Public offering at the offer price of \756,560 (issue price of \731,470) to redeem the short-term investment corporation bonds and to repay short-term borrowings.
Note 10: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of \731,470 following the public offering on May 27, 2008.
Note 11: Public offering at the offer price of \398,287 (issue price of \385,215) finance acquisition of new properties and to repay borrowings.
Note 12: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of \385,215 following the public offering on Jul. 2, 2013.

[Changes in Price at the Tokyo Stock Exchange]
Changes in prices of the Company’s investment units listed on the Tokyo Stock Exchange are as follows.
23rd Period

22nd Period

21st Period

20th Period

19th Period

from Nov 1, 2014
to Apr. 30, 2015

from May 1, 2014
to Oct. 31, 2014

from Nov 1, 2013
to Apr. 30, 2014

from May 1, 2013
to Oct. 31, 2013

from Nov 1, 2012
to Apr. 30, 2013

High

(¥)

629,000

503,000

499,000

629,000

740,000

Low(¥)

461,000

437,000

405,000

407,500

469,500

8

4. CASH DISTRIBUTION
As for the cash distribution for the 23rd fiscal period, while planning for the maximum amount of distribution of earnings to be
included in deductible expenses based on the application of a special provision of taxation (Special Taxation Measures Law (Act No.
26 of 1957) Article 67-15), the Company decided to distribute the entire amount of the sum of unappropriated retained earnings andreversal of reserves for reduction entry. As a result, the amount of cash distribution per unit for the 23rd fiscal period was 9,699 yen.
23rd Period

22nd Period

21st Period

20th Period

19th Period

from Nov. 1, 2014
to Apr. 30, 2015

from May 1, 2014
to Oct. 31, 2014

from Nov. 1, 2013
to Apr. 30, 2014

from May 1, 2013
to Oct. 31, 2013

from Nov. 1, 2012
to Apr. 30, 2013

Retained Earnings(¥000)

3,613,486

3,941,262

3,630,008

3,636,107

4,026,484

Accumulated earnings(¥000)(¥000)－
3,613,391－
3,941,238

3,725,530

3,912,897

239,297
3,787,186(¥)(¥000)(9,699)3,613,391(10,579)
3,941,238(10,000)
3,725,530(10,000)
3,912,897(12,412)3,787,186(¥)(9,699)(10,579)(10,000)(12,824)(12,412)(¥000)
(¥)

－
(－)

－
(－)

(-)

(-)

(-)

Total cash distribution(Cash distribution per unit)of which distribution of profits(Distribution of profits per
unit)of which refund of capital(Refund of capital per unit)

5. INVESTMENT POLICY AND FUTURE ISSUES(1) Investment Environments
As mentioned in “2. OUTLINE OF INVESTMENTS IN THE TWENTY-THIRD FISCAL PERIOD (1) Operating
Environment,” the expectation of economic recovery has been growing along with the recovery of corporate performance backed
by financial and other policies put in place by the national government and increasing consumer confidence and the impact of therebound of the last-minute surge in demand that had accompanied the consumption tax hike is expected to gradually ease.
In addition, in the J-REIT market, the supply of funds to the real estate market is favourable such as due to Bank of Japan’s
monetary easing policy, and the TSE REIT Index is also performing strong.
Against this background, the office rental market shows a moderate recovery such as the recovery of floor demand from
corporations and an increase of companies’ capacity to pay rent.
Under such circumstances, the Company is set to conduct active property management to securely grasp the recovery phaseof the rental market while continuing to focus on minimizing deterioration in portfolio profitability, maintain and improve theability to procure funds through conservative financial management, and keep a sharp eye on the movement of anticipated yields
and liquidity in the real estate market.
(2) Asset Management Policy and Future Issues
With such environments in mind, the Company will employ the following asset management policies to ensure stable income
from, and steady growth of the portfolio over the mid-to-long-term.
(a) Property Management in a Mid-to-Long-Term View
In addition to enhancement of property management to satisfy the requirements of existing tenants to enhance the relationship,and keep their evacuation at low level, proper recognition of the property features and leasing market environments will help us
market the potential tenants from in and outside of the properties for existing and future vacant space. Thus we will maintainand uplift the occupancy rate and level of rents in pursuit of sustainable and improved profitability of portfolio, namely internal
growth of portfolio.
In order to ensure stable revenues over the mid-to-long-term, we will carry out strategic refurbishment and renovation
works to maintain and/or improve features of the properties, establishing their uniqueness and increasing their competitiveness.
(b) Enlargement of Portfolio by Acquisition of New Properties and Improvement of Portfolio Quality
The Company has set in motion several strategic measures; that is, targeting the expansion of asset size up to \500 billion in themedium term in order to achieve higher revenue (i.e. external growth); replacing our property portfolio to enhance its quality;
ensuring the portfolio is well-balanced and diversified to minimize fluctuation risks in revenue; and maximizing the advantage ofscale to reduce operational and administration costs.
In order to make right investments in properties of good value, we will ensure to collect information on properties for salein an early stage, and conduct an in-depth due diligence to assess the potential risks involved in such investments. As part of ourefforts to carry out this investment policy, we will work to find investment opportunities through further expansion of our own
sourcing network as well as cooperation with other companies of Nomura Real Estate Group, and to make appropriate
investment decisions based on our market research capabilities and technical expertise. In particular, the Nomura Real EstateGroup is continuously developing office buildings centering on the premium mid-size office (PMO) series, which are mid-sized
but have both the functionality and grade equal to large-size buildings, and the Company will further strengthen collaboration as
its leading pipeline.
Furthermore, the Company will consider timely sale of properties with low profitability and little prospects for
improvement as well as aged properties where increases in repair expenses are expected in the future in an aim to improve thequality of the portfolio.
In making an investment decision, we adhere to strict criteria to select best properties that can bring stable revenues to theentire portfolio in light of mid- and long-term perspectives.
(c) Continuation of Conservative Financial Policy
In order to assure stable financing capability and increase creditworthiness in the market over the mid-to-long-term, we will pay
particular attention to debt finance. We will seek to continuously keep the LTV low by using more long-term funding atfixed-rates, fixing the rate by using interest rate swap transactions or other methods, diversifying the repayment dates, andincreasing the number of institutions we bank with.
We will closely monitor the conditions of financial markets, and carefully deliberate and choose the best means of funding,9

including the usage of commitment lines, issuance of investment corporation bonds and short-term investment corporation bonds
from a wide range of available sources of funding to ensure a well-balanced structure of interest-bearing debts.

6. IMPORTANT EVENTS SUBSEQUENT TO THE TWENTY-THIRD FISCAL PERIOD
・Merger with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate Residential Fund, Inc.
NOF, Nomura Real Estate Master Fund, Inc. (“NMF”) and Nomura Real Estate Residential Fund, Inc. (“NRF”; and NOF, NMF and
NFR are individually referred to as the “Consolidated Investment Corporation” hereinafter) respectively have determined at each of
the board of directors meetings held on May 27, 2015 to implement a consolidation-type merger “the “Merger”) as mentioned below,
whereby October 1, 2015 is set as the date of incorporation of investment corporation (the “New Investment Corporation”)
incorporated through the consolidation-type merger, and that the companies have entered into a merger agreement (the “Merger
Agreement”) dated May 27, 2015.
(1) Purpose of Merger
NOF, NMF and NRF each entrusts its asset management to the Asset Management Company, is provided support by the Nomura
Real Estate Group and have established stable track records, but have faced changes in the business environment such as
intensified acquisition competitions and polarization of size in J-REITs, and diversification of investment sectors by J-REITs inrecent years.
Confronting such change in business environment, NOF, NMF and NRF have respectively considered measures to maximize
sustainable growth of unitholders’ value and share a common view that it is necessary to expand the asset size, diversify portfolioand strengthen the stability of financing basis in order to strengthen capacity for future growth. With such mutual recognition, thecompanies have discussed and considered a merger as measures to enhance unitholders’ value.
NOF, NMF and NRF believe that, through becoming with the merger a top-class domestic diversified type J-REIT with anasset size of more than 900 billion yen, with increased asset size and diversified investment sectors that will contribute to expand
acquisition opportunities, stabilize the portfolio, enhance risk tolerance, gain competitive strength for asset acquisitions andstabilize the finance basis, in addition to making the best use of the Asset Management Company’s abundant and professional
expertise accumulated through management of NOF, NMF and NRF and effectively leveraging wide-range know-hows and brands
held by the Nomura Real Estate Group, one of the major comprehensive real estate developers in Japan, both growth and stability
can be achieved.
In particular, the following demonstrates NOF, NMF and NRF’s concept of the Merger:① Pursue sustainable growth by transforming from “Specialized type J-REIT” to “Diversified type J-REIT”② Strengthen stability and enhance growth strategy through benefit of a large-scale REIT
③ Accelerate mutual growth with Nomura Real Estate Group by establishing “Leasing Business Value Chain”
After the Merger, the New Investment Corporation, with the above-mentioned concepts of the Merger in mind, aims tosecure stable mid- to long-term income and maximize unitholders’ value through steadily increasing the portfolio size. In addition,
it is expected that, as a positive effect of the Merger, market price of investment units could be more stabilized due to increase in
cash distribution through external and internal growth and improved liquidity of investment units.
(2) Merger Ratio
With the Merger, 3.60 New Investment Corporation units will be allotted to NOF unitholders per one NOF unit, 4.45 New
Investment Corporation units will be allotted to NRF unitholders per one NRF unit and 1 New Investment Corporation unit will beallotted to NMF unitholders per one NMF unit. As there will therefore be a fraction of one investment unit attributed to NOF and
NRF unitholders, pursuant to the relevant laws, such fractions will be disposed of through market transactions and the proceedsfrom the unit sales will be distributed to the unitholders in proportion to the total number of fractions of investment units eachunitholder has.
(3) Cash Distribution on Merger
Instead of cash distributions for each Consolidated Investment Corporation’s final fiscal period ending on September 30, 2015 (inthe case of NMF; the period from September 1, 2015 to September 30, 2015; in the case of NOF, the period from May 1, 2015 to
September 30, 2015; and in the case of NRF, the period from June 1, 2015 to September 30, 2015), the New Investment
Corporation will make a cash distribution on merger to the unitholders listed or recorded on the final unitholders register of each of
the Consolidated Investment Corporations as of the day immediately prior to the date of incorporation of the New Investment
Corporation (excluding each Consolidated Investment Corporation and the dissenting unitholders of each Consolidated Investment
Corporation who demand for repurchase of investment units pursuant to Article 149- 3 of the Investment Trust Act) (the “Allotted
Investors”), in an amount equivalent to the cash distributions for the final fiscal period based on each Consolidated Investment
Corporation’s distributable profit (the payment on merger will be (i) the amount of distributable profit of each Consolidated
Investment Corporation as of the day immediately prior to the date of incorporation of the New Investment Corporation divided by(ii) the number of investment units that is obtained by deducting (a) the number of investment units held by the unitholders otherthan the Allotted Investors of each Consolidated Investment Corporation from (b) the number of investment units issued andoutstanding of each of such Consolidated Investment Corporation, as of the day immediately prior to the date of incorporation of
the New Investment Corporation (amounts less than one yen are rounded down)). The details will be announced once they are
determined.
Concerning the distribution of NMF for the fiscal period ending on August 31, 2015 (the period from March 1, 2015 to August 31,
2015), the distribution is scheduled to be made to the untiholders and the registered pledgees of investment units listed or recordedon the final unitholders register of NMF as of August 31, 2015, after the approval on the statements for such cash distribution for
the fiscal period that is scheduled to be obtained at NMF by the date of incorporation of the New Investment Corporation. The
payment of such distribution will be made after the incorporation of the New Investment Corporation through the Merger.

10

(Reference)
The Company concluded a sale and purchase agreement for the acquisition of PMO Tamachi, PMO Ginza Hatchome and PMO
Shibakoen on May 27, 2015 after the end of the 23rd fiscal period (April 30, 2015).
Type of Asset
Property Name
Location (Note)
Structure (Note 1)
Area (Land) (Note 1)
Area (Building) (Note 1)
Type of Ownership
Completion Date (Note 1)
Acquisition Price (Note 2)
Date of Agreement
Date of Acquisition
SellerFinancingType of Asset
Property Name
Location (Note)
Structure (Note 1)
Area (Land) (Note 1)
Area (Building) (Note 1)
Type of Ownership
Completion Date (Note 1)
Acquisition Price (Note 2)
Date of Agreement
Date of Acquisition
SellerFinancingType of Asset
Property Name
Location (Note)
Structure (Note 1)
Area (Land) (Note 1)
Area (Building) (Note 1)
Type of Ownership
Completion Date (Note 1)
Acquisition Price (Note 2)
Date of Agreement
Date of Acquisition
SellerFinancingNote 1:
Note 2:

Real Estate
PMO Tamachi(Registry)
5-202-1 Shiba, Minato Ward, Tokyo and other 2 lots
(Street)5-31-17 Shiba, Minato Ward, Tokyo
S/SRC B1/12F
709.50 m2 (214.62 tsubo)
5,171.17 m2 (1,564.27 tsubo)(Land) Ownership (Building) Ownership
February 7, 2014
¥6,210 million
May 27, 2015
(Date of agreement on purchase and sale of real estate)
March 1, 2016(date of delivery of real estate)
Nomura Real Estate Development Co., Ltd.
Scheduled to finance from borrowings in New Investment Corporation
Real Estate
PMO Ginza Hatchome(Registry)
8-204-8 Ginza, Chuo Ward, Tokyo and other 4 lots
(Street)8-12-8 Ginza, Chuo Ward, Tokyo
S 10F
321.39 m2 (97.22 tsubo)
2,487.63 m2 (752.50 tsubo)(Land) Ownership (Building) Ownership
April 25, 2014
¥3,970 million
May 27, 2015
(Date of agreement on purchase and sale of real estate)
March 1, 2016(date of delivery of real estate)
Nomura Real Estate Development Co., Ltd.
Scheduled to finance from borrowings in New Investment Corporation
Real Estate
PMO Shibakoen(Registry)
1-13-8 Shibakoen, Minato Ward, Tokyo(Street)1-2-1 Shibakoen, Minato Ward, Tokyo
S 8F
547.05 m2 (165.48 tsubo)
3,362.95 m2 (1,017.29 tsubo)(Land) Ownership (Building) Ownership
July 31, 2014
¥3,900 million
May 27, 2015
(Date of agreement on purchase and sale of real estate)
March 1, 2016(date of delivery of real estate)
Nomura Real Estate Development Co., Ltd.
Scheduled to finance from borrowings in New Investment Corporation“Location (Registry),” “Structure,” “Area (Land),” “Area (Building),” and “Completion Date” are based on the information in the real estate registry.
Excluding property taxes, urban planning taxes, consumption taxes and local consumption taxes

11

Profile of the Company
1. STATUS OF UNITHOLDERS’ CAPITAL
23rd Period(as of Apr. 30, 2015)

22nd Period(as of Oct. 31, 2014)

21st Period(as of Apr. 30, 2014)

20th Period(as of Oct. 31, 2013)

19th Period(as of Apr. 30, 2013)

Maximum number of units allowed to
issue(Unit)

2,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Number of units issued(Unit)

372,553

372,553

372,553

372,553

305,123

Amount of unitholders’ capital(¥ mln)211,430

211,430

211,430

211,430

185,455

15,971

18,48918,495

18,074

13,346

Number of unitholders

2. MATTERS CONCERNING THE INVESTMENT UNITS
The 10 largest unitholders as of April 30, 2015 were as follows.
Name

Number of Units Held
(Unit)

Portion in the Total Units Issued(%)

82,49933,09225,012
15,287
14,197
9,780
9,047
7,000
6,647
3,894
206,455

22.14
8.88
6.71
4.10
3.81
2.63
2.43
1.88
1.78
1.05
55.42

Japan Trustee Services Bank, Ltd.
The Master Trust Bank of Japan, Ltd.
Trust & Custody Services Bank, Ltd.
Nomura Real Estate Development Co., Ltd.
The Nomura Trust and Banking Co., Ltd.
NOMURA BANK(LUXEMBOURG) S.A.
CBLDN-STICHTING PGGM DEPOSITARY-LISTED REAL ESTATE PF FUND
Kawasaki Gakuen
State Street Bank and Trust Company 505223
CBNY DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO
Total

3. BREAKDOWN OF UNITHOLDERS
The breakdown of unitholders as of April 30, 2015 was as follows.
Number ofUnitholders

Private and other investors

Number of Units
per Unitholder

Portion (%)

Portion (%)

15,392

96.4

47,793

12.8

Financial institutions(Including Financial Instruments Business Operator)

116

0.7

192,532

51.7

Other domestic corporate investors

221

1.4

31,463

8.4

Foreign corporate investors, etc.

242

1.5

100,765

27.0

15,971

100.0

372,553

100.0

Total

12

4. DIRECTORS AND AUDITOR(1) Name of directors and an auditor in the 23rd fiscal period are as follows (Note 1)
Title

Other Major Title (s)NameTotal Amount of Fees Paid
during the 23rd
Period (¥000)

Executive Director

Yoshiyuki Ito (Note 2)

Full-time Statutory Auditor, Nomura Real Estate Urban Net, Co., Ltd
Full-time Statutory Auditor, Nomura Real Estate Reform, Co., Ltd

2,400

Supervisory Director

Saneaki IchijoPartner, Anderson Mori & Tomotsune Law Firm

2,400

Supervisory Director

Naohito Miya

Manager of Miya Naohito CPA Firm
Senior Representative partner, Futaba Audit Corporation

2,400

Accounting Auditor

Ernst & Young ShinNihon LLC––

14,500No other Executive Director or Supervisory Director holds any investment units under his/her name or another’s name. Executive Directors and Supervisory Directors
might serve as directors of other companies, but there are no mutual business interests whatsoever between such companies and the Company. (Saneaki Ichijo has
been appointed as substitute Supervisory Director of Nomura Real Estate Residential Fund, Inc., the asset management services for which are provided by the AssetManagement Company.)
Note 2: Yoshiyuki Ito resigned as full-time auditor of Nomura Real Estate Urban Net Co., Ltd. as of March 31, 2015 and was appointed as full-time auditor of Nomura Real
Estate Reform Co., Ltd. As of April 1 the same year.
Note 3: At the sixth General Unitholders’ Meeting held on July 26, 2013, Mr Sadahiko Yoshimura has been appointed as substitute Supervisory Director to provide against
vacancy of the Supervisory Director’s position or lack of statutory quorum.
Note 4: As stated in “1. Overview of Asset Management (6) Important Events Subsequent to the Twenty-Second Fiscal Period (Reference) (2) Scheduled Agenda Items” theagenda for electing one new executive director (candidate: Yoshiyuki Ito) and new supervisory directors (candidates: Saneaki Ichijo and Naohito Miya) is scheduled to
be granted at the Seventh General Meeting of Unitholders scheduled to be held on July 30, 2015.

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

5. ASSET MANAGEMENT COMPANY, CUSTODIANS AND ADMINISTRATORS
Asset Management Company, custodians and administrators as of April 30, 2015 are as follows:Business

Company Name(s)Asset Management Company

Nomura Real Estate Asset Management Co., Ltd.

Custodian of assets

Mitsubishi UFJ Trust and Banking Corporation

Custodian of unitholders’ register

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

Manager of special accounts

Mitsubishi UFJ Trust and Banking Corporation

Administrative agent(accounting, etc.)

Mitsubishi UFJ Trust and Banking Corporation

Administrative agent(investment corporation bonds)

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

Administrative agent(short-term investment corporation bonds)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Note 1:
Note 2:Administrates preparation, retention and other tasks related to the Unitholders’ Register.
Administrates preparation, retention and other tasks related to the Investment Company Bond Register.

13

Status of Investment Assets of the Company
1. COMPOSITION OF ASSETS
23rd Period (as of Apr. 30, 2015)
Total AmountPortion(¥ mln) (Note 2)(%) (Note 3)
72,141
16.4

Area(Note 1)

Type of Assets

Central Tokyo
Real estate

22nd Period (as of Oct. 31, 2014)
Total AmountPortion(¥ mln) (Note 2)(%) (Note 3)
67,356
15.5

Suburban Tokyo

16,497

3.8

16,429Other Regional Cities

36,553

8.3

36,547

8.4

Central Tokyo

186,84342.5

186,81642.9

Suburban Tokyo

34,658

7.9

34,581

7.9

Other Regional Cities

60,146

13.7

60,424

13.9

Subtotal

406,84192.5

402,155

92.3

Cash, deposits and other assets

33,0197.5

33,489

7.7

Grand Total

439,861100.0

435,644100.0

Real estate in trust

3.8

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

2. BRIEF OF MAJOR PROPERTIES OWNED
The major components of assets (the 10 largest properties by book value) as of April 30, 2015 are as follows.
Name of Property

Book Value(¥ mln)Leasable Floor
Space(m2)(Note 1)

Leased Space(m2) (Note 2)

Occupancy Rate(%)

Portion of
Rental Revenues(%)

Primary Use

Shinjuku Nomura Bldg.

40,21631,500.89

30,623.21

97.2

11.7

OfficeNRE Tennozu Bldg.

32,19625,127.12

25,127.12

100.0(Note 3)

OfficeKojimachi Millennium Garden

27,543

16,384.19

15,837.06

96.7(Note 3)

Office (Note 4)

Omron Kyoto Center Bldg.

21,324

34,616.84

34,616.84

100.0(Note 3)

OfficeNOF Nihonbashi Honcho Bldg.

20,25919,157.05

18,462.94

96.4

5.4

OfficeSORA Shin-Osaka 21

18,544

21,234.65

20,924.76

98.5

4.0

OfficeNOF Shibuya Koen-dori Bldg.

12,6473,457.32

2,549.32

73.7

2.7

OfficeTennozu Park Side Bldg.

12,45918,051.60

16,907.12

93.7

3.4

OfficeNOF Shinjuku Minamiguchi Bldg.

12,3586,709.22

6,709.22

100.0

2.0

Secom Medical Bldg.

10,796

8,821.24

8,821.24

100.0

208,347

185,060.12

180,578.83

97.6(Note 3)48.1
(Note 6)

Total
Note 1:

Note 2:

Note 3:Note 4:Note 5:Note 6:

OfficeOffice (Note 5)“Leasable Floor Space” refers to the total leasable space for each asset including offices, shops and residence (for properties owned in compartments, this generally
refers to exclusively owned area; however, common spaces will be included if they are being leased. For Shinjuku Nomura Building, the area calculated bymultiplying the overall leasable floor space by the quasi co-ownership ratio of the beneficial interest in real estate trust owned by the Company. For NRE Tennozu
Building, includes the area calculated by multiplying the overall common space by the co-ownership ratio for the common spaces prescribed in the terms ofmanagement of the building owned by the Company through the trustee.), at a certain time. Leasable floor space is calculated not based on the total floor spacestated on the registry book, but based on the area stated on the building completion drawing, etc. included in the lease agreement. As such, it may differ from andexceed the total floor space stated on the registry book.
“Leased Space” refers to the area included in the leasable floor space of each asset and is actually leased based on a lease agreement (provided, however, it islimited to office, shops and residence (where the entire leased floor space is being leased as a whole, the total area of the leased floor space.), and does not inc lude
leased parking spaces. For Shinjuku Nomura Building, the area calculated by multiplying the overall leased space by the quasi co-ownership ratio of the beneficial
interest in real estate trust owned by the Company. For NRE Tennozu Building., includes the area calculated by multiplying the overall common space by theco-ownership ratio for the common spaces (as prescribed in the terms of management of the building) owned by the Company through the trustee.).
Not disclosed due to compelling reasons.
Although this property comprises an office section and a residential section, its primary use is office. The Company’s Articles of Incorporation, etc. allow the
Company to invest in also property-related assets that have office as the primary use. The primary use is indicated as “office” in the above table with thisunderstanding.
Although this property is currently registered as “clinic/parking” on the registry book, it was originally designed to be used as offices. The Company’s Articles ofIncorporation, etc. allow the Company to invest in non-office property-related assets given that they can easily be converted into offices. The use is indicated as“office” in the above table with this understanding.
“Total” for “Portion of Rental Revenues” column include rental revenues for properties which do not disclose “Portion of Rental Revenues” due tounavoidable reasons.

143. DETAILS OF PORTFOLIO PROPERTIES

Central Tokyo

Area

Name of Property

Location(Postal Address)

Type ofOwnership

Shinjuku Nomura Bldg. (Note 3)

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

NRE Tennozu Bldg.

2-4-11 Higashi-Shinagawa, Shinagawa-ku, Tokyo

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

Kojimachi Millennium Garden

4-4-30 Kojimachi, Chiyoda-ku, Tokyo (Note 4)

Real Estate

NOF Nihonbashi Honcho Bldg.

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

Tennozu Park Side Bldg.

2-5-8 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Shinjuku Minamiguchi Bldg.

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

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

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

Secom Medical Bldg.

7-7 Niban-cho, Chiyoda-ku, Tokyo (Note 4)

Real Estate

NOF Shiba Bldg.

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

Nishi-Shinjuku Showa Bldg.

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

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

NRE Shibuya Dogenzaka Bldg.

2-16-4 Dogenzaka, Shibuya-ku, Tokyo

Real Estate

NOF Tameike Bldg.

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

Iwamoto-cho Toyo Bldg.

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

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

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

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

PMO Nihonbashi Honcho

4-12-20 Nihonbashi Honcho, Chuo-ku, Tokyo

PMO Nihonbashi KayabachoBook Value(¥ mln)(Note 2)

43,90040,216

20,50032,196

26,70027,543

21,40020,25912,70012,45910,00012,358

10,40012,647

11,10010,796

7,040

9,904

8,140

8,630

5,050

7,581

5,810

7,740

4,050

5,949

3,830

5,251

4,690

4,792

Real Estate

4,320

4,692

3-11-10 Nihonbashi Kayaba-cho, Chuo-ku, Tokyo

Real Estate

5,010

4,959

Otemachi Tatemono Gotanda Bldg.

1-1-8 Nishi Gotanda, Shinagawa, Tokyo

Beneficial Interest
in Real Estate Trust

4,430

4,255

NRE Higashi-nihonbashi Bldg.

1-1-7 Higashi-nihonbashi, Chuo-ku, Tokyo

Real Estate

3,570

4,037

PMO Akihabara

3-11-6 Iwamoto-cho, Chiyoda-ku, Tokyo

Real Estate

4,240

3,691

Hatchobori NF Bldg.

2-21-6 Hatchobori, Chuo-ku, Tokyo

2,480

3,120

NOF Kanda Iwamoto-cho Bldg.

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

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

4,160

3,013

NOF Takanawa Bldg.

2-20-4 Higashi Gotanda, Shinagawa-ku, Tokyo

Real Estate

2,830

3,013

PMO Hatchobori

3-22-13 Hatchobori, Chuo-ku, Tokyo

Real Estate

2,880

2,347

NOF Minami-Shinjuku Bldg.

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

Beneficial Interest
in Real Estate Trust

2,210

2,296

PMO Nihonbashi Odenmacho

6-8 Nihonbashi Odenma-cho, Chuo-ku, Tokyo

Real Estate

2,210

2,063

Central Shintomocho Bldg.

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

Beneficial Interest
in Real Estate Trust

1,330

1,751

PMO Higashi-nihonbashi

2-15-4, Nihonbashi, Chuo-ku, Tokyo

Real Estate

1,690

1,414

236,670258,985

Subtotal
1-14-4, Higashi-Ueno, Taito-Ku, Tokyo

Real Estate

6,470

7,929

NOF Technoport Kamata Center
Bldg.

2-16-1 Minami-Kamata, Ota-ku, Tokyo

4,780

6,219

NF Hongo Building

3-14-7 Hongo, Bunkyo-ku, Tokyo

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

4,890

4,614

Toho Edogawabashi Bldg.

1-24-8 Sekiguchi Bunkyo-ku, Tokyo

Real Estate

1,140

2,081

Toshin Meguro Bldg.

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

Beneficial Interest
in Real Estate Trust

858

1,350

Crystal Park Bldg.

1-1-3 Gotenyama, Musashino City, Tokyo

Real Estate

3,390

3,602

NOF Kichijoji Honcho Bldg.

1-10-31, Kichijoji Honcho, Musashino City, Tokyo

1,780

1,810

Faret Tachikawa Center Square

2-36-2 Akebono-cho, Tachikawa City, Tokyo

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

3,850

2,942

7,830

9,473

5,460

5,047

2,620

3,199

Real Estate

1,930

2,884

44,99851,156

NRE Ueno Bldg.

Suburban Tokyo

Appraisal Valueas of Apr. 30,
2015 (¥ mln)
(Note 1)NOF Kawasaki Higashiguchi Bldg.
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.

3-1 Ekimae Honcho, Kawasaki-ku, Kawasaki City,
Kanagawa (Note 4)
1-11-11 Kita-Saiwai, Nishi-ku, Yokohama City,
Kanagawa
2-15-16 Shin-Yokohama, Kohoku-ku, Yokohama
City, Kanagawa
2-4-1 Horai-cho, Naka-ku, Yokohama City,
Kanagawa(Note 4)

Subtotal

15

Book Value(¥ mln)(Note 2)Type ofOwnership

4-2-2 Kitaichijo-nishi, Chuo-ku, Sapporo City,
Hokkaido (Note 4)
2-15-1, Kitashichijyo-Nishi, Kita-ku, Sapporo City,
Hokkaido(Note 4)
1-1 Minamiichijo-Nishi Chuo-ku, Sapporo City
(Note 4)

Beneficial Interest
in Real Estate Trust

6,250

7,582

Real Estate

4,140

4,711

Real Estate

3,270

3,499

NOF Sendai Aoba-dori Bldg.

2-1-2 Ichiban-cho, Aoba-ku, Sendai City, Miyagi

2,030

3,073

NOF Utsunomiya Bldg.

2-1-1 Baba-dori, Utsunomiya City, Tochigi

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

2,320

2,156

NOF Nagoya Fushimi Bldg.

2-9-27 Nishiki, Naka-ku, Nagoya City, Aichi

Real Estate

2,240

3,960

1-16-28 Meieki-Minami, Nakamura-ku, Nagoya
City, Aichi
801 Minami Fudodo-cho, Horikawa Higashi-iru,
Shiokoji-dori, Shimogyo-ku, Kyoto City, Kyoto(Note 4)

Beneficial Interest
in Real Estate Trust

2,280

3,563

Beneficial Interest
in Real Estate Trust

18,30021,324SORA Shin-Osaka 21

2-1-3 Nishi-Miyahara, Yodogawa-ku, Osaka City

Real Estate

12,10018,544

NRE Osaka Bldg.

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

Beneficial Interest
in Real Estate Trust

6,100

6,226

NRE Nishi-Umeda Bldg.

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

Real Estate

3,450

5,836

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

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

4,000

3,665

2,280

2,421

4,210

6,579

Name of Property

Sapporo North PlazaNRE Sapporo Bldg.
JCB Sapporo Higashi Bldg.

NOF Nagoya Yanagibashi Bldg.
Other Cities

Appraisal Valueas of Apr. 30,
2015 (¥ mln)
(Note 1)

Location(Postal Address)

Area

Omron Kyoto Center Bldg.

NRE Yotsubashi Bldg.
NRE Hiroshima Bldg.
NOF Hakata Ekimae Bldg.
NOF Tenjin-Minami Bldg.

2-23 Tatemachi, Naka-ku, Hiroshima City,
Hiroshima
1-15-20 Hakata Ekimae, Hakata-ku, Fukuoka City,
Fukuoka
3-6-15 Watanabe Dori, Chuo-ku, Fukuoka City,
Fukuoka

Subtotal
Grand Total

2,230

3,552

75,20096,700356,868

406,841“Appraisal Value as of Apr. 30, 2015” stands for the prices appraised by the estate surveyors in accordance with the provisions of the Company’s Articles ofIncorporation and the “Rules Concerning Calculations of Investment Corporations” (Cabinet Office Ordinance No. 47 of 2006). The appraisal prices are calculated by
Japan Real Estate Institute, The Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal, Co., Ltd., Japan Valuers Co., Ltd., Appraisal Firm A-Square, Ltd., or
Morii Appraisal & Investment Consulting Inc. using the capitalization approach, with the end of the Twenty-third Fiscal Period, i.e. April 30, 2015, being taken as thepoint of evaluation.
Note 2: “Book Value” stands for the aggregate purchase price of lands, buildings, structures, machinery and equipment, tools and fixtures, leased assets, construction inprogress, and leaseholds owned directly or held in trust, less depreciation including expenses associated with these purchases.
Note 3: The Company’s stake in this property is quasi co-ownership of 50.1% of entirety. The appraisal value and book value as of April 30, 2015 accounted solely for thequasi co-ownership.
Note 4: Residential indication of the property is not available yet.
Note 1:16

23rd Period (from Nov. 1, 2014 to Apr. 30, 2015)
at Period End

Area

Name of Property

Other Cities

Suburban Tokyo

Central Tokyo

Number of
Tenants(Note 1)

Shinjuku Nomura Bldg.
NRE Tennozu Bldg.
Kojimachi Millennium Garden
NOF Nihonbashi Honcho Bldg.
Tennozu Park Side Bldg.
NOF Shinjuku Minamiguchi Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
NOF Shiba Bldg.
Nishi-Shinjuku Showa Bldg.
NRE Shibuya Dogenzaka Bldg.
NOF Tameike Bldg.
Iwamoto-cho Toyo Bldg.
NOF Shinagawa Kounan Bldg.
NOF Surugadai Plaza Bldg.
PMO Nihonbashi Honcho
PMO Nihonbashi Kayabacho (Note 4)
Otemachi Tatemono Gotanda Bldg.
NRE Higashi-nihonbashi Bldg.
PMO Akihabara
Hatchobori NF Bldg.
NOF Kanda Iwamoto-cho Bldg.
NOF Takanawa Bldg.
PMO Hatchobori
NOF Minami-Shinjuku Bldg.
PMO Nihonbashi Odenmacho
Central Shintomicho Bldg.
PMO Higashi-nihonbashi
Subtotal
NRE Ueno Bldg.
Technoport Kamata Center Bldg.
NF Hongo Building
Toho Edogawabashi Bldg.
Toshin Meguro Bldg.
Crystal Park Bldg.
NOF Kichijoji Honcho Bldg.
Faret Tachikawa Center Square
NOF Kawasaki Higashiguchi Bldg.
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.
Subtotal
Sapporo North PlazaNRE Sapporo Bldg.
JCB Sapporo Higashi Bldg.
NOF Sendai Aoba-dori Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Fushimi Bldg.
NOF Nagoya Yanagibashi Bldg.
Omron Kyoto Center Bldg.
SORA Shin-Osaka 21
NRE Osaka Bldg.
NRE Nishi-Umeda Bldg.
NRE Yotsubashi Bldg.
NRE Hiroshima Bldg.
NOF Hakata Ekimae Bldg.
NOF Tenjin-Minami Bldg.
Subtotal
Grand Total

Note 1:

Note 2:
Note 3:Note 4:Note 5:

Occupancy
Rate (%)

105
6
2
15
21
19
5
1
11
19
8
16
7
5
3
7
7
11
7
5
8
8
14
7
6
9
6
7
345
9
15
1
8
7
10
8
17
31
36
9
17
168
50
3
1
38
29
15
17
1
38
25
17
17
20
51
27
349

97.2
100.0
96.7
96.4
93.7
100.0
73.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
63.6
96.4
100.0
100.0
100.0
100.0
100.0
87.5
100.0
100.0
100.0
100.0
97.2
100.0
81.1
100.0
94.5
100.0
98.6
100.0
100.0
100.0
100.0
100.0
93.2
95.3
100.0
100.0
100.0
95.6
95.8
96.6
100.0
100.0
98.5
100.0
100.0
99.0
97.7
94.8
100.0
99.0

862

97.5

RentalRevenues
during the
Period(¥ mln)1,519(Note 2)
(Note 2)
698
449
257
348
(Note 2)
234
273
126
172
134
161
153
115
18
229
117
121
85
109
107
73
85
72
50
59
(Note 3)210
265
(Note 2)
46
34
118
66
208
295
216
156
96
(Note 3)339
162
(Note 2)
133
148
78
118
(Note 2)
516
401
150
230
168
184
88
(Note 3)
13,105(Note 5)22nd Period (from May. 1, 2014 to Oct. 31, 2014)
at Period End

Portion of
RentalRevenues(%)

Number of
Tenants(Note 1)

Occupancy
Rate (%)

11.7(Note 2)
(Note 2)
5.4
3.4
2.0
2.7
(Note 2)
1.8
2.1
1.0
1.3
1.0
1.2
1.2
0.9
0.1
1.8
0.9
0.9
0.7
0.8
0.8
0.6
0.7
0.6
0.4
0.5
(Note 3)1.6
2.0
(Note 2)
0.4
0.3
0.9
0.5
1.6
2.3
1.7
1.2
0.7
(Note 3)2.6
1.2
(Note 2)
1.0
1.1
0.6
0.9
(Note 2)
4.0
3.1
1.2
1.8
1.3
1.4
0.7
(Note 3)

102
6
2
16
19
15
3
1
11
19
9
16
7
5
3
7
12
6
5
8
6
14
7
5
9
5
7
325
10
16
1
8
7
12
8
17
30
36
9
16
170
50
5
1
36
29
14
17
1
36
25
15
20
21
49
26
345

91.9
100.0
96.0
100.0
84.7
87.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
89.6
100.0
100.0
88.2
100.0
100.0
100.0
100.0
87.4
100.0
96.0
100.0
93.9
100.0
94.5
100.0
98.6
100.0
100.0
96.7
97.2
100.0
93.9
97.4
100.0
87.5
100.0
93.2
100.0
93.3
100.0
100.0
98.4
100.0
93.8
100.0
98.2
94.0
97.9
98.2

100.0

840

97.1

Rental Revenues
Portion of Rental
during the
Revenues
Period(%)(¥ mln)1,514(Note 2)
(Note 2)
732
515
243
281
(Note 2)
229
266
139
149
145
160
143
116
221
137
114
73
124
109
88
88
71
51
55
(Note 3)212
272
(Note 2)
39
8
127
68
207
295
227
154
99
(Note 3)343
185
(Note 2)
134
151
78
118
(Note 2)
517
414
161
233
171
189
84
(Note 3)
13,105(Note 5)

11.6
(Note 2)
(Note 2)
5.6
3.9
1.9
2.2
(Note 2)
1.7
2.0
1.1
1.1
1.1
1.2
1.1
0.9
1.7
1.1
0.9
0.6
0.9
0.8
0.7
0.7
0.5
0.4
0.4
(Note 3)1.6
2.1
(Note 2)
0.3
0.1
1.0
0.5
1.6
2.3
1.7
1.2
0.8
(Note 3)2.6
1.4
(Note 2)
1.0
1.2
0.6
0.9
(Note 2)
4.0
3.2
1.2
1.8
1.3
1.4
0.6
(Note 3)100.0

In the case a master lease agreement is in place, in which the master tenant of the said lease agreement subleases a part or whole of the leased floor spaces to the end
tenants, only the master tenant is counted as the number of tenants. For NRE Tennozu Building, PMO Nihonbashi Honcho, PMO Nihonbashi Kayabacho, PMO
Akihabara, PMO Hatchobori, PMO Nihonbashi Odenmacho, and PMO Higashi-nihonbashi, which involves a “pass-through type” master lease agreement where
the amount of rent received from the master tenant is the same as the rent received by said master tenant from the end tenant, the total number of end tenants is shown.
In the case more than one space within the same building are leased by the same tenant, such spaces are combined to count for just one tenant. However, when thesame tenant leased floor spaces in more than one building, such spaces are counted separately for each building as if they are leased by different tenants. As for
Shinjuku Nomura Building and NOF Toyo-cho Building, the number of tenants in the entire building is taken into account. For Kojimachi Millennium Garden, thenumber of tenants is the number of tenants in the entire building, calculated by counting the master tenant as the number of tenants in the residence section because
there is a master lease agreement in placee, in which the master tenant of the said lease agreement subleases a part or whole of the leased floor spaces to the end
tenants, and then adding to this one tenant count the total number of end tenants in the office section.
Not disclosed due to compelling reasons.
Subtotals of “Rental Revenues” and "Portion of Rental Revenues” for each area are not disclosed due to compelling reasons.
PMO Nihonbashi Kayabacho was acquired on March 3, 2015, and “Real Estate Rental Revenues” for the 23rd fiscal period is the amount after the acquisition date.
Grand total of “Rental Revenues” is including the amounts which are not disclosed due to compelling reasons.

17

4. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS
The outstanding amount and current price of the specified transactions as of April 30, 2015 are as follows.
Segment

Contract AmountType of Transaction(¥ mln) (Note 1)
Longer than a Year

Transaction other than market
transaction

Interest-rate swap
(Receiving floating-rate, paying fixed-rate)
Total

Note 1:
Note 2:Current Price(¥ mln) (Note 2)

98,60093,100−942

98,60093,100−942

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

5. STATUS OF THE OTHER ASSETS
Other than the Trust Beneficial Interest and Real Estate listed in the table under the title “3. Details of Portfolio Properties,” theCompany had no other assets to integrate into the portfolio as of April 30, 2015.

6. STATUS OF ASSETS BY COUNTRY AND REGIONThe Company had no assets in countries or regions outside Japan.

18Capital Expenditures
1. PLAN OF CAPITAL EXPENDITURES
The table below lists major capital expenditures in conjunction with the refurbishment and/or renewal works scheduled for the future(finished in part) on the properties held as of April 30, 2015. The estimated cost of works includes the amount to be charged as “expenses”
for accounting purposes.

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Renovation of extra-high substation equipment(To increase quality) (Note 1)

From:
To:

Feb. 2011
Mar. 2017

Estimated Cost (¥ mln)
Paid during
Paid before
Total
23rd Period
23rd Period
460
61
350
(Note 2)

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Renewal of central monitoring panel(To increase quality) (Note 1)

From:
To:

Jul. 2014
Oct. 2017345(Note 2)--

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Long-cycle earthquake countermeasure work
(To increase quality) (Note 1)

From:
To:

Feb. 2015
Sep. 2016

976(Note 2)--Otemachi Tatemono Gotanda Bldg.
(Nishi Gotanda, Shinagawa-ku)

Renewal of air conditioning system(To increase quality) (Note 1)

From:
To:

Jan. 2015
Jan. 2016

275

-

-

NRE Ueno Bldg.
(Taito-ku, Tokyo)

Repair work for air conditioning system(To increase quality) (Note 1)

From:
To:

Nov. 2013
Dec. 2014

216

101

115

NOF Kawasaki Higashiguchi Bldg.
(Kawasaki-ku, Kawasaki City)

Repair work for air conditioning system(To increase quality) (Note 1)

From:
To:

Nov. 2015
May 2017

345

123

123

SORA Shin-Osaka 21(Yodogawa-ku, Osaka City)

Renewal of air conditioning system(To increase quality) (Note 1)

From:
To:

Oct. 2014
May. 2015

240

120

-

NRE Osaka Bldg.
(Chuo-Ku, Osaka City)

Renewal of air conditioning system(To increase quality) (Note 1)

From:
To:

Dec. 2013
May 2015

152

44

77

Name of Property (Location)

Description of Works (Purpose)

Estimated Period

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

2. CAPITAL EXPENDITURES DURING THE TWENTY-THIRD FISCAL PERIOD
The table below lists capital expenditures during the 23rd fiscal period in conjunction with the major works of renovation. During theperiod, we have conducted engineering works totalling \2,155 million: capital expenditures of \1,525 million and repair expenses of \630
million combined all together.
Name of Property (Location)
Tennozu Park Side Bldg.
(Higashi-Shinagawa,Shinagawa-ku)
NRE Ueno Bldg.
(Taito-ku, Tokyo)

Description of Works (Purpose)

Period of Works

Cost of Works(¥ mln)Renewal of central monitoring panel(To increase quality) (Note 1)

From:
To:

Jul. 2014
Apr. 2015

87

Repair work for air conditioning system(To increase quality)

From:
To:

Aug. 2014
Jan. 2015

79

NOF Kawasaki Higashiguchi Bldg.
(Kawasaki-ku, Kawasaki City)

Repair work for air conditioning system(To increase quality)

From:
To:

Aug. 2014
Dec. 2014

121

NOF Yokohama Nishiguchi Bldg.
(Nishi-ku, Yokohama City)

Renovation of passenger elevator control system(To increase quality)

From:
To:

SORA Shin-Osaka 21(Yodogawa-ku, Osaka City)

Renewal of air conditioning system(To increase quality)

Other Properties

Improvement of features

From:
To:
From:
To:

Feb. 2015
Apr. 2015
Oct. 2014
Jan. 2015
May 2014
Apr. 2014

Total

60
114
1,061
1,525

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

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

23rd Period
from Nov 1, 2014
to Apr. 30, 2015

22nd Period
from May 1, 2014
to Oct. 31, 2014

21st Period
from Nov 1, 2013
to Apr. 30, 2014

20th Period
from May 1, 2013
to Oct. 31, 2013

19th Period
from Nov 1, 2012
to Apr. 30, 2013(¥ mln)

2,244

1,704

1,501

2,145

1,816

(¥ mln)

1,989

1,919

1,885

1,304

1,822

(¥ mln)

1,918

1,379

1,683

1,947

1,494

(¥ mln)

2,315

2,244

1,704

1,501

2,145

19

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT.

Asset management fees (Note)(¥000)

23rd Period
from Nov 1, 2014
to Apr. 30, 2015
1,043,927

22nd Period
from May 1, 2014
to Oct. 31, 2014
1,070,098

of which

Management Fee I(¥000)

756,112

767,004of which

Management Fee II(¥000)

287,815

303,093of which

Management Fee III(¥000)--

Custodian fees(¥000)

30,08630,051

General administrative fees(¥000)

79,92670,565

Directors’ compensation(¥000)

7,200

7,200

Other expenses(¥000)

116,252

82,953(¥000)

1,277,393

1,260,870

Total

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

20

2. STATUS OF BORROWINGSThe status of borrowings from the financial institutions as of April 30, 2015 is as follows.
Date Borrowed

Outstanding asof Apr. 30,
2015(¥000)The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
The Bank of Fukuoka, Ltd.

Dec. 24, 2009-

1,800,000
2,400,000
500,000
650,000
1,000,000

1.55800

Dec. 24, 2014

The Dai-ichi Life Insurance Company, Limited.

Feb. 26, 2008-

3,000,000

1.91875

Feb. 26, 2015

The Norinchukin Bank, Ltd.

Feb. 26, 2010

1.69300

Feb. 26, 2015

2.31750

Jun. 24, 2015

Financial Institutions

Outstanding as
Averageof Nov. 1,
Interest Rate2014(%) (Note 1)(¥000)

Date of
Repayment

Method of
Use ofRepayment Borrowings

Note

Current-portion of Long-term Borrowings-

3,000,000

1,000,000

1,000,000

3,000,000

3,000,000

4,000,000

4,000,000

Aug. 26, 2010

1,000,000

1,000,000

1.31125

Aug. 26, 2015

THE NISHI-NIPPON CITY BANK, LTD.

Feb. 26, 2013

1,500,000

1,500,000

0.52000

Aug. 27, 2015

The Chiba Bank, Ltd.

Aug. 27, 2013

1,000,000

1,000,000

0.52182

Aug. 27, 2015

The Chugoku Bank, Ltd.

Dec. 27, 2012

0.55000

Dec. 26, 2015

0.90800

Feb. 27, 2016

1.97000(Note 3)(Note 3)

Average
Interest Rate(%) (Note 1)

Date of
Repayment

Method of
Use ofRepayment Borrowings

0.55000

Dec. 26, 2015

0.90800

Feb. 27, 2016

0.59273

May 26, 2016

1.10100

Aug. 26, 2016

0.79750

Aug. 26, 2016

0.50000

Aug. 26, 2016

1.07450

Feb. 26, 20170.88700

Feb. 26, 20170.55000

Feb. 26, 20170.45000

Mar. 11, 20171.43500

Jun. 10, 2017

1.12850

Aug. 27, 20171.03775

Dec. 26, 2017

Taiyo Life Insurance Company
Sumitomo Life Insurance Company

Jun. 24, 2008

Development Bank of Japan, Inc.
Sompo Japan Nipponkoa Insurance Inc.

Sumitomo Mitsui Trust Bank, Ltd.
The Nomura Trust and Banking Co., Ltd.

Feb. 27, 2012

The Hiroshima Bank, Ltd.
Development Bank of Japan, Inc.

-

2,000,000-

500,000-

500,000

500,000

Subtotal

18,000,000

24,350,000

Total Short-term Borrowings

18,000,000

24,350,000

Date Borrowed

Outstanding asof Apr. 30,
2015(¥000)

Outstanding
as of Nov. 1,
2014(¥000)

Dec. 27, 2012-

500,000-

3,000,000-

2,000,000-

500,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000
1,500,000

1,000,000
1,500,000

1,500,000
500,000

1,500,000
500,000

500,000
1,000,000

500,000
1,000,000

500,000

500,000

500,000

500,000

1,500,000
1,500,000

1,500,000
1,500,000

1,500,000
1,300,000

1,500,000-

1,300,000
800,000-

800,000
800,000-

3,000,000
900,000

3,000,000
900,000

2,000,000
2,000,000

2,000,000
2,000,000

1,000,000
3,000,000

1,000,000
3,000,000

The Iyo Bank, Ltd.

1,000,000

1,000,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

5,600,000

5,600,000

Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.

4,500,000
1,400,000

4,500,000
1,400,000

900,000
500,000

900,000
500,000

Financial Institutions

Jun. 25, 2009

500,000
3,000,000

BulletRepayment(Note 2)

Unsec
ured/
Uninsured

Note

Long-term Borrowings
The Chugoku Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
The Nomura Trust and Banking Co., Ltd.
The Hiroshima Bank, Ltd.
Mitsui Sumitomo Insurance Co., Ltd.
Mitsubishi UFJ Trust and Banking Corp.
The Chugoku Bank, Ltd.
Resona Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
The Iyo Bank, Ltd.

Feb. 27, 2012
Jun. 24, 2013
Aug. 26, 2011

Sep. 25, 2012
Mar. 27, 2014
Mar. 16, 2012

Aug. 27, 2012

The Bank of Yokohama, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.

Mar. 27, 2014

Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mizuho Bank, Ltd.

Mar. 11, 2015

Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.

Jun. 10, 2011

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.

Sumitomo Mitsui Trust Bank, Ltd.
The Hyakujushi Bank, Ltd.

Feb. 27, 2012

Jun.25, 201221

BulletRepayment(Note 2)

Unsec
ured/
Uninsured

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Feb. 28, 2011

Outstanding asof Apr. 30,
2015(¥000)
1,000,000

The Chugoku Bank, Ltd.
The Bank of Fukuoka, Ltd.

Jun. 24, 2013

2,000,000

2,000,000

1.09000

Jun. 26, 2018

Aug. 24, 2013

2,000,000

2,000,000

1.03500

Aug. 26, 2018

1,000,000
1,000,000
1,000,000
1,000,000
1,000,000

1,000,000
1,000,000
1,000,000
1,000,000
1,000,000

0.93600

Nov. 26, 2018

0.77650

Nov. 26, 2018

1,250,000
1,250,000
500,000

1,250,000
1,250,000
500,000

1.44450

Feb. 26, 2019

2,000,000
1,000,000
500,000
500,000
300,000
500,000
1,000,000
1,000,000
500,000

2,000,000
1,000,000
500,000
500,000
300,000
500,000
1,000,000
1,000,000
500,000

0.90759

Feb. 26, 2019

0.87695

Feb. 26, 2019

Financial Institutions

Date Borrowed

Outstanding
Averageas of Nov. 1,
Interest Rate2014(%) (Note 1)(¥000)
1,000,000
1.84650

Date of
Repayment

Dec. 9, 2013

The Hachijuni Bank, Ltd.
The Hiroshima Bank, Ltd.
The Keiyo Bank, Ltd.

Jun. 10, 2014

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mizuho Bank, Ltd.

Mar. 16, 2012

Sumitomo Life Insurance Company

Mar. 19, 2014

Mizuho Trust & Banking Co., Ltd.
The Chugoku Bank, Ltd.
The Bank of Fukuoka, Ltd.
The Hyakujushi Bank, Ltd.
THE NISHI-NIPPON CITY BANK, LTD.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Shinkin Central Bank

Mar. 27, 2014

Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
Aozora Bank, Ltd.

Aug. 27, 2012

1,700,000
3,500,000
500,000

1,700,000
3,500,000
500,000

1.25200

Aug. 26, 2019

Aug. 27, 2012

2,200,000

2,200,000

1.22000

Aug. 26, 2019

Aug. 27, 2012

1,000,000
500,000
1,000,000

1,000,000
500,000
1,000,000

1.27625

Aug. 26, 2019

Aug. 26, 2014

1,000,000
1,000,000
700,000
1,500,000
500,000

1,000,000
1,000,000
700,000
1,500,000
500,000

0.81080

Aug. 26, 2019

Mar. 27, 2014

2,750,000
1,500,000
1,500,000

2,750,000
1,500,000
1,500,000

1.01150

Feb. 26, 2020

1,100,000
500,000
500,000
2,000,000
1,500,000

1,100,000
500,000
500,000
2,000,000
1,500,000

2,000,000
2,000,000
1,000,000
1,000,000
1,000,000

2,000,000
2,000,000
1,000,000
1,000,000
1,000,000

3,000,000
720,000
700,000
700,000-

2,750,000
1,430,000
3,500,000

2,750,000
1,430,000
3,500,000

1.48300

Jan. 26, 2022

2,750,000
3,000,000
1,000,000
3,000,000

2,750,000
3,000,000
1,000,000-

1.29600

Feb. 26, 2022

1.16000

Feb. 26, 2022

1.09133

Aug. 26, 2022

1,800,000
2,400,000
500,000
650,000
1,000,000-

1.05000

Nov. 26, 2022

1.11000

Nov. 26, 2022

Mar. 3, 2015
Mar. 3, 2015

1,000,000
1,000,000-

1.15850
1.14850

Aug. 26, 2023
Aug. 26, 2023

Mar. 3, 2015

1,000,000
1,000,000
1,000,000

1,000,000
1,000,000

1.18032

Aug. 26, 2023

1.75900

Nov. 26, 2023

Mizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
The Nomura Trust and Banking Co., Ltd.
Shinkin Central Bank
Mizuho Trust & Banking Co., Ltd.
The Dai-ichi Life Insurance Company, Limited.
Development Bank of Japan, Inc.
Taiyo Life Insurance Company
Daido Life Insurance Company
The Norinchukin Bank, Ltd.

Aug. 27, 2012

Feb. 26, 2014

Feb. 26, 2013

Mar. 19, 2014
Feb. 26, 2015

Mizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.

Mar. 3, 2015

Sumitomo Mitsui Banking Corp.
Mizuho Bank, Ltd.

Mar. 27, 2014

Sumitomo Mitsui Banking Corp.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
The Dai-ichi Life Insurance Company, Limited.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Banking Corp.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Development Bank of Japan, Inc.

Dec. 9, 2013
Mar. 27, 2014
Aug. 26, 2014
Feb. 26, 2015
Dec. 24, 2014

Dec. 24, 2014

1.53674

Aug. 26, 2020

1.08100

Aug. 26, 2020

1.35250

Feb. 26, 2021

1.19211

Feb. 26, 2021

0.86350

Feb. 26, 2021

0.85050

Feb. 26, 2021

1.23920

Jul. 26, 2021

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.

Dec. 9, 2013

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Mar. 27, 2014

2,750,000

2,750,000

1.59400

Feb. 26, 2024

Development Bank of Japan, Inc.

Jun. 25, 2009

7,000,000
128,230,000

1.97000(Note 3)

Subtotal

6,750,000
144,450,000

Total

162,450,000

152,580,000

22

Note

Feb. 26, 2018

Mitsubishi UFJ Trust and Banking Corp.
The Iyo Bank, Ltd.

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Taiyo Life Insurance Company
Daido Life Insurance Company
Mitsui Life Insurance Co., Ltd.
The Iyo Bank, Ltd.
The Hachijuni Bank, Ltd.
The Hyakujushi Bank, Ltd.
The 77 Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.
Development Bank of Japan, Inc.

Method of
Use ofRepayment Borrowings

BulletRepayment(Note 3)(Note 2)

Unsec
ured/
Uninsured

Note 1: The average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place.
As for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest
rates are used to calculate the weighted average of interest.
Note 2: The use of borrowings is to purchase property-related assets, the related miscellaneous expenses and the repayment of borrowings.
Note 3: Instalments of ¥250 million will be made on the 25th of every sixth month starting on December 25, 2009, with the remaining payment of ¥6,750
million to be repaid on June 25, 2016.

3. STATUS OF INVESTMENT CORPORATION BONDS
The status of investment corporation bonds issued as of April 30, 2015 is as follows.
Name of Bonds
First Series Unsecured
Investment Corporation Bonds
Second Series Unsecured
Investment Corporation Bonds
Fourth Series Unsecured
Investment Corporation Bonds
Sixth Series Unsecured
Investment Corporation Bonds
Seventh Series Unsecured
Investment Corporation Bonds
Eighth Series Unsecured
Investment Corporation Bonds
Ninth Series Unsecured
Investment Corporation Bonds
Tenth Series Unsecured
Investment Corporation Bonds
Total

Issue Date

Balance as ofApr. 30, 2015(¥ mln)Balance as of
Nov. 1, 2014(¥ mln)Interest
Rate(%)

Maturity Date

Mar. 16, 2005

-

5,000

1.85

Mar. 16, 2015

Mar. 16, 2005

5,000

5,000

2.47

Mar. 16, 2020

Nov. 28, 2005

10,00010,0002.05

Nov. 30, 2015

Mar. 19, 2007

5,000

5,000

2.21

Mar. 17, 2017

Mar. 19, 2007

4,500

4,500

2.90

Mar. 17, 2028

Nov. 26, 2010

-

6,000

0.94

Nov. 26, 2014

Nov. 26, 2010

4,000

4,000

1.52

Nov. 24, 2017

Nov. 25, 2014

6,000

-

1.02

Nov. 25, 2024

34,50039,500

Method of
Repayment

Use ofProceeds

Note(Note 2)

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

4. STATUS OF SHORT-TERM INVESTMENT CORPORATION BONDS
There are no outstanding short-term investment corporation bonds as of the end of the 23rd fiscal period.

5. STATUS OF ACQUISITION RIGHTS FOR NEW INVESTMENT UNITS
There are no outstanding acquisition rights for new investment units as of the end of the 23rd fiscal period.

23

Trading during the 23rd Fiscal Period
1. STATUS OF REAL ESTATES AND ASSET-BACKED SECURITIES TRADING
Acquisition
Type of Asset

Name of Property

Date

Price
(¥ mln)(Note)

Transfer
PriceBook Value(¥ mln)(¥ mln)(Note)

Date

Gain (Loss)(¥ mln)Real Estate
PMO Nihonbashi KayabachoMar.3, 2015
4,910
Note: “Acquisition price” and “Transfer price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or transfer of theproperty (the purchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).

2. STATUS OF OTHER ASSETS
Not applicable. In addition, the Company’s assets other than the above mentioned properties and asset-backed securities are mostly
comprised of direct bank deposits and bank deposits in trust.

3. PRICE INVESTIGATION(1) Real Estates
Acquisition/Transfer

Type of Asset

Name of Property

Acquisition/Transfer
Price(¥ mln)
Date
(Note1)

Appraisal Value(¥ mln)(Note2)

Appraiser

Appraisal Date

Japan RealNov. 30, 2014
Estate Institute
Note : “Acquisition price” and “Transfer price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or transfer of theproperty (the purchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).
Acquisition

Real Estate

PMO Nihonbashi KayabachoMar.3, 2015

4,910

4,960

(2) Others
No properties the Company has traded but not included in the above table “(1) Real Estates,” were requested the price investigation
procedures pursuant to the provision of Article 201 of the Investment Trust Act.
4. TRANSACTIONS WITH RELATED PARTIES(1) Transactions
Table of transactions in respect of specified assets entered into with related parties during the 23rd fiscal period is as follows.
Purchase(¥000) (%)
4,910,000
Total amountAmount purchased from related parties
4,910,000 (100.0%)
Details of transaction with related parties and major shareholders
Nomura Real Estate
4,910,000 (100.0%)
Development Co., Ltd.

Sale(¥000) (%)－
Amount sold to related parties－( － %)－（ － %）(Note) The term “related parties” refers to related parties of Asset Management Companies as stipulated by Article 123 of the Enforcement Order of the
Act on Investment Trusts and Investment Corporations and by Article 26, Paragraph 1, Item 27 of the Regulations Concerning Investment
Reports of Investment Trusts and Investment Corporations, issued by The Investment Trusts Association, Japan.

(2) Fees Paid to Related Parties
Table of fees paid to related parties during the 23rd fiscal period is as follows.

Name of Related Party and Major Shareholders

Contract-out fees
Property management fees
Other expenses
Note 1:
Note 2:

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
(Note 1)
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Partners Co., Ltd.

Amount Paid
(A)(¥000)

Total Amount Paid
(B) (¥000)

300
776,225
173,965
26,98954,797
20,883

Portion(A) / (B)(%)
0.0

1,250,388
264,753
140,676

62.1
65.7
10.2
39.0
14.8

In addition to the Property Management Agreement, the Company has entrusted Nomura Building Management Co., Ltd. with daily maintenance of building andequipments, the cost of which is included in “Contract-out Fees”.
Besides the above, the Company has made the following payments for repair works during the nineteenth fiscal period.
Name of Related Party
Amount Paid (¥000)
Nomura Real Estate Development Co., Ltd.
43,715
Nomura Real Estate Partners Co., Ltd.
963,89624

The management fees paid to the property management companies, which are related parties, are broken down as follows.

Note 1:
Note 2:Name of Property

Property Management Company

Shinjuku Nomura Bldg.
NRE Tennozu Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
Nishi-Shinjuku Showa Bldg.
NRE Shibuya Dogenzaka Bldg.
NOF Tameike Bldg.
NOF Shinagawa Konan Bldg.
NOF Surugadai Plaza Bldg.
PMO Nihonbashi Honcho
PMO Nihonbashi Kayabacho
NRE Higashi-nihonbashi Bldg.
PMO Akihabara
Hatchobori NF Bldg.
PMO Hatchobori
NOF Minami-Shinjuku Bldg.
PMO Nihonbashi Odenmacho
PMO Higashi-nihonbashi
NRE Ueno Bldg.
NOF Technoport Kamata Center Bldg.
NOF Kichijoji Honcho Bldg.
Faret Tachikawa Center Square
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
NRE Sapporo Bldg.
Omron Kyoto Center Bldg.
NRE Osaka Bldg.
NRE Nishi-Umeda Bldg.
NRE Yotsubashi Bldg.
Kojimachi Millennium Garden
NOF Shinjuku Minamiguchi Bldg.
NOF Takanawa Bldg.
Central Shintomicho Bldg.
Toshin Meguro Bldg.
NOF Kawasaki Higashiguchi Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.
NRE Hiroshima Bldg.

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

Property Management Fees(¥000)(Note 1) (Note2)
33,67918,173
10,143
4,211
3,902
6,408
2,411
3,650
3,778
3,299
2,897
736
2,716
3,096
1,807
1,845
1,983
1,908
1,586
4,524
5,908
1,483
4,809
4,793
3,597
3,536
14,477
11,364
3,427
7,805
4,899
3,262
2,325
1,677
600
5,099
3,915
2,242
2,968

Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
“Property Management Fees” are the aggregated sum of the basic fee and the incentive fee.
Daily maintenance of building and equipments is entrusted to Nomura Building Management, but the fees associated with such works are not included here.

5. STATUS OF BUSINESS WITH THE ASSET MANAGEMENT COMPANY OVER ITS SUBSIDIARY BUSINESS
Although Nomura Real Estate Asset Management Co., Ltd., the asset management company of the Company, conducts subsidiarybusiness of Type II Financial Instruments Business, and Building Lots and Buildings Transaction Business, there is no relevant matter
under this subject as of April 30, 2015.

25

Other Information
1. NOTICE
Summary of conclusions and changes in major contracts approved at the Board of Directors meetings held during the 23rd fiscal period
is as follows.
Date of approval

AgendaSummary

November 14, 2014

Partial change to investment
unit work proxy entrustment
agreement

Changes were made to the calculation method of “notification
enclosure shipping charges” of the fee statement stipulated in theinvestment unit work proxy entrustment agreement concluded withthe custodian of unitholders’ register as of December 19, 2008.

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

3. STATUS OF COMPANIES OWNING REAL ESTATE OVERSEAS AND OF SUCH REAL ESTATE
Not applicable.

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

26

Financial Section

Contents
28
30
31
32
33

Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

27

Balance Sheet
Thousands of Yen
As of October 31, 2014

As of April 30, 2015

ASSETS
Current Assets:
Cash and bank deposits¥31,748,707¥32,193,947

203,952

232,0726,850-

447,534

451,538

32,407,043

32,877,557

Land

291,153,859

287,690,338

Buildings and structures

142,057,639

139,227,473

Machinery and equipment

1,837,420

1,732,614

Tools, furniture and fixtures

481,645445,337

Leased assets

43,692

43,692

Construction in progress

106,540

42,694435,680,795

429,182,148(33,972,306)(32,159,464)

401,708,489

397,022,684

Leasehold rights

5,132,927

5,132,927

Intangible assets

726

742

Long-term prepaid expenses

110,492

143,652

Security deposits

410,890

410,890

Deferred investment corporation bond issuance costs

90,45756,204

5,745,492

5,744,415¥439,861,024¥435,644,656

Rental receivables
Consumption taxes receivable
Other current assets
Total current assets

Property and Equipment, at Cost:

SubtotalLess accumulated depreciation
Net property and equipment

Investments and Other Assets:

Total investments and other assets

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

28

Thousands of Yen
As of October 31, 2014

As of April 30,2015

LIABILITIESCurrent Liabilities:
Trade accounts payable¥ 935,980¥ 894,436

Other accounts payable

1,380,260

1,250,249

Current portion of investment corporation bonds

10,000,000

11,000,000

Current portion of long-term debt

18,000,000

24,350,000

557,803606,338

290

752

-

596,342

Rent received in advance

1,898,264

1,917,534

Other current liabilities

84,901

340,236

32,857,498

40,955,887

Investment corporation bonds

24,500,000

28,500,000

Long-term debt

144,450,000

128,230,000

Security deposits from tenants

22,834,113

22,407,255

21,25625,581

Total long-term liabilities

191,805,369

179,162,836

Total Liabilities

224,662,867

220,118,723

211,430,494

211,430,493

154,177

154,177

Retained earnings

3,613,486

3,941,262

Total surplus

3,767,663

4,095,439

Total unitholders’ equity

215,198,157

215,525,933

Total Net Assets

215,198,157

215,525,933

Total Liabilities and Net Assets¥439,861,024¥435,644,656

Accrued expenses
Accrued income taxes
Accrued consumption taxes

Total current liabilities

Long-term Liabilities:

Other long-term liabilities

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Surplus
Voluntary reserve
Reserve for reduction entry

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

29

Statement of Income and Retained Earnings
Thousands of Yen
For the period
from November 1, 2014
to April 30, 2015

For the period
from May 1, 2014
to October 31, 2014

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues¥13,025,024¥13,105,730

13,025,024

13,105,730

Real estate rental expenses

6,597,381

6,403,536

Asset management fees

Operating Expenses:
1,043,927

1,070,099

Administrative service and custodian fees

110,013

100,618

Other operating expenses

123,452

90,1537,874,773

7,664,406

5,150,251

5,441,324

Interest income

3,173

2,927

Other non-operating revenues

13,752

8,539

16,925

11,466

Interest expense

929,997

951,321

Loan arrangement fees

109,392

96,363

Interest expense on investment corporation bonds

377,792

392,608

8,955

9,809

126,62160,101

1,552,757

1,510,202

Ordinary Income

3,614,419

3,942,588

Income before Income Taxes

3,614,419

3,942,588

Current

935

1,346

Deferred21(20)

3,613,463

3,941,262

23-¥3,613,486¥3,941,262

Operating Profit

Non-Operating Revenues and Expenses
Non-Operating Revenues:

Non-Operating Expenses:

Amortization of investment corporation bond issuance costs
Other non-operating expenses

Income Taxes:

Net Income
Retained earnings brought forward

Retained Earnings at End of Period
The accompanying notes to financial statements are an integral part of these statements.

30

Statement of Changes in Net Assets
For the period from November 1, 2014 to April 30, 2015
Thousands of Yen

Unitholders’ Equity
Surplus

Balance as of October 31, 2014

Retained
Earnings

Reserve for
Reduction
Entry

372,553¥211,430,494

-

Total
Net Assets¥215,525,933¥215,525,933-- (3,941,239) (3,941,239)(3,941,239)(3,941,239)

-

-

-

372,553¥211,430,494

Net income¥154,177 ¥3,941,262

Total Unitholders’EquityTotal
Surplus¥4,095,439

Cash distribution paid

Balance as of April 30, 2015

Voluntary
Reserve

Unitholders’CapitalUnits3,613,463

3,613,463

3,613,463

3,613,463¥154,177 ¥3,613,486¥3,767,663¥215,198,157¥215,198,157

For the period from May 1, 2014 to October 31, 2014
Thousands of Yen

Unitholders’ Equity
Surplus
Voluntary
Reserve

Unitholders’Capital

Units

Reserve for
Reduction
Entry

Balance as of April 30, 2014

372,553¥211,430,494

Reversal of reserve for
reduction entry--

Cash distribution paid-

Net income
Balance as of October 31, 2014

Retained
Earnings¥249,698 ¥3,630,009

Total Surplus

Total Unitholders’EquityTotal
Net Assets¥3,879,707¥215,310,201¥215,310,201

-

-

-

-

- (3,725,530) (3,725,530)(3,725,530)(3,725,530)

-

-

-

372,553¥211,430,494(95,521)

95,521

3,941,262

3,941,262

3,941,262

3,941,262¥154,177 ¥3,941,262¥4,095,439¥215,525,933¥215,525,933

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

31

Statement of Cash Flows
Thousands of Yen
For the period
from November 1, 2014
to April 30, 2015

For the period
from May 1, 2014
to October 31, 2014

Cash Flows
Cash Flows from Operating Activities
Income before income taxes¥3,614,419¥3,942,588

Depreciation

1,845,127

1,806,384

10,918

10,862

Amortization of long-term prepaid expenses
Amortization of investment corporation bonds issuance costs

8,955

9,809

Interest income(3,173)(2,927)

Interest expense

1,307,789

1,343,929

25,095

3,129

Decrease (Increase) in rental receivables

28,120(18,808)

Decrease (Increase) in consumption taxes receivable(6,850)135,536

Increase in trade accounts payable

41,458

194,794

Increase (Decrease) in other accounts payable(74,739)

57,167

Increase (Decrease) in accrued consumption taxes(596,342)

596,342(Decrease) in rent received in advance(19,270)(1,590)Changes in other current assets/liabilities(228,374)

195,032

5,953,133

8,272,247

3,173

2,927

(1,356,078)(1,306,627)(1,396)(1,018)4,598,832

6,967,529(6,358,727)(1,072,282)(716,858)(766,083)

Loss on disposal of property and equipment

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

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants

1,143,716

534,973

Net cash used in investing activities(5,931,869)(1,303,392)

Cash Flows from Financing Activities
Proceeds from long-term debt

22,470,000

11,700,000

Repayment of long-term debt

(12,600,000)(11,950,000)

Proceeds from investment corporation bonds

6,000,000-

Redemption of investment corporation bonds(11,000,000)-(43,208)-(3,938,995)(3,721,941)

887,797(3,971,941)(445,240)

1,692,196

Payment of investment corporation bonds issuance costs
Distributions to unitholders
Net cash (used in) provided by financing activities
Net Increase（Decrease）in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period

32,193,947

30,501,751

Cash and Cash Equivalents at End of Period¥31,748,707¥32,193,947

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

32

Notes to Financial Statements
1.

ORGANIZATION
Nomura Real Estate Office Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest primarily in
office properties. The Company is externally managed by a licensed asset management company, Nomura Real Estate AssetManagement Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.
On August 7, 2003, the Company was incorporated under the Act on Investment Trusts and Investment Corporations (the“Investment Trust Act”) of Japan. On December 4, 2003, the Company was listed on the Tokyo Stock Exchange as the 9th J-REIT
and started operations on the following day. As of April 30, 2015, the Company owned a portfolio of 55 office properties containing
an aggregate of approximately 430,973.52 square meters of leasable area and leased office space to 840 tenants.

2.

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

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly liquid,readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months or less whenpurchased.

Property and equipment (Except for leased assets)
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, less accumulated
depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed assets outlined
below:
Buildings
Structures
Machinery and equipment
Tools, furniture and fixtures

3 - 70 years
2 - 45 years
3 - 15 years
3 - 18 years

Intangible assets (Except for leased assets)
Intangible assets are amortized by the straight-line method.

Leased assets
Depreciation of leased assets under finance lease transactions, excluding those in which the ownership of the leased assets is deemed
to be transferred to the lessee, is calculated by the straight-line method, over the lease term with no residual value.

Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying value of
its fixed assets may not be recoverable. An impairment loss is recognized if the carrying value of an asset exceeds the aggregate
estimated future cash flows. If a fixed asset is determined to be impaired, it is written down to its recoverable amount and thewrite-down is recorded as an impairment loss during the period in which it occurs. No impairment losses have been recognized todate.

Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized by the straight-line method over the respective terms of thebonds.

33

Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all related earnings
and expenses incurred are reflected in the accompanying balance sheet and statement of income and retained earnings, respectively.

Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues including
utility charge reimbursements, parking space rental revenues and other income. Rental revenues are generally recognized on an
accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts arereasonably estimated.

Property related taxes
Property in Japan is subject to property, urban planning and depreciable asset taxes on a calendar year basis. The taxes related toproperty are generally imposed based on the value of the relevant property and incurred for fiscal period.
The seller of a property is liable for property related taxes for the period from the purchase date through the end of that calendar year
because taxes are imposed on the owner registered in the record as of January 1 for the entire year based on the assessment made by
the local government. The amount applicable to the buyer of a property is usually settled between each party and capitalized as partof the acquisition cost of the property. The capitalized property related taxes amounted to ¥18,293 thousand for the six-month period
ended April 30, 2015. No capitalized property related taxes were incurred for the six-month period ended October 31, 2014 .

Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax bases ofassets and liabilities using the applicable statutory tax rates.

Consumption taxes
Consumption taxes received and paid are not included in the accompanying statement of income and retained earnings.

Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure tochanges in interest rates. The Company defers recognition of gains or losses resulting from changes in the fair value of interest-rate
swap contracts which meet the criteria for deferred hedge accounting.
Although the deferred hedge treatment is generally applied, the Company applies special treatment to those interest-rate swap
contracts that meet the criteria for such special treatment. Under the special treatment, interest-rate swaps are not remeasured at fairvalue; instead, the net amount paid or received under the interest rate swap contract is recognized and included in interest expense or
income.

4.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of April 30, 2015 and October 31, 2014 consist of the following:Thousands of Yen
As of April 30, 2015

As of October 31, 2014

Cash and bank deposits¥31,748,707¥32,193,947

Cash and cash equivalents¥31,748,707¥32,193,947

34

5.

SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of April 30, 2015 and October 31, 2014 consist of the following:Thousands of Yen
As of April 30, 2015Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Construction in progress
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Leased assets in trust
Accumulated depreciation
Construction in progress in trust
Total

6.

Acquisition costs¥86,784,497
42,043,488(6,052,785)
797,866(315,018)
47,393(13,748)
204,369,362
100,014,151(26,667,142)
1,039,554(667,270)
434,252(240,495)
43,692(15,848)
106,540¥401,708,489

As of October 31, 2014

Acquisition costs¥86,784,497
42,043,488(6,052,785)
797,866(315,018)
47,393(13,748)
204,369,362
100,014,151(26,667,142)
1,039,554(667,270)
434,252(240,495)
43,692(15,848)
106,540¥401,708,489

Acquisition costs¥83,320,976
40,212,092(5,548,521)
713,821(292,044)
35,223(11,237)
1,922
204,369,362
99,015,381(25,433,793)
1,018,793(638,281)
410,114(223,759)
43,692(11,829)
40,772¥397,022,684

Book value¥83,320,976
34,663,571
421,777
23,986
1,922
204,369,362
73,581,588
380,512186,355
31,863
40,772¥397,022,684

SHORT-TERM DEBT
Short-term debt as of April 30, 2015 and October 31, 2014 consist of the following:Thousands of Yen
As of April 30, 2015
Weighted-averageinterest rate
Amount(Note 1)
1.55800%

Unsecured loans from banks due on December 24, 2014

As of October 31, 2014
Weighted-averageinterest rate
Amount(Note 1)
¥6,350,000
1.55800%

Unsecured loans from an insurance company due on February 26, 2015-

1.91875%

3,000,000

1.91875%

Unsecured loans from a financial institution due on February 26, 2015-

1.69300%

3,000,000

1.69300%

Unsecured loans principally from insurance companies due on June 24, 2015

¥8,000,000

2.31750%

8,000,000

2.31750%

Unsecured loans from an insurance company due on August 26, 2015

1,000,000

1.31125%

1,000,000

1.31125%

Unsecured loans from a bank due on August 27, 2015

1,500,000

0.52000%

1,500,000

0.53000%

Unsecured loans from a bank due on August 27, 2015
Unsecured loans from a bank due on December 26, 2015

1,000,000

0.52182%

500,000

0.55000%

1,000,000-

0.56000%-

Unsecured loans from banks due on February 27, 2016

5,500,000

0.90800%--

500,000

1.97000%

500,000

1.97000%

Unsecured loans from a bank due on June 25, 2016 (Note 2)
Total¥24,350,000¥18,000,000

Unsecured loans from banks due on December 24, 2014-

1.55800%¥6,350,000

1.55800%

Unsecured loans from an insurance company due on February 26, 2015
Unsecured loans from a financial institution due on February 26, 2015-

1.91875%

3,000,000

1.91875%

1.69300%
3,000,000
1.69300%
Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth
decimal place. As for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, theswapped interest rates are used to calculate the weighted average of interest.
Note 2: Installments of ¥250 million will be made on the 25th day of every sixth month starting on December 25, 2009, with the remaining paymentof ¥6,750 million to be repaid on June 25, 2016.

The Company entered into ¥30,000 million credit facilities in the form of commitment lines with five financial institutions for thesix-month periods ended April 30, 2015 and October 31, 2014. The total unused amounts of such credit facilities were ¥30,000
million as of April 30, 2015 and October 31, 2014.

35

7.

LONG-TERM DEBT
Long-term debt as of April 30, 2015 and October 31, 2014 consist of the following:
As of April 30, 2015

(Thousands of Yen)

Weighted-averageinterest rate-

0.55000%¥500,000

0.56000%

AmountUnsecured loans from a bank due on December 26, 2015
Unsecured loans from banks due on February 27, 2016

As of October 31, 2014

(Note 1)

AmountWeighted-averageinterest rate

(Thousands of
Yen)(Note 1)-0.90800%

5,500,000

0.90800%

Unsecured loans from an insurance company due on May 26, 2016

¥1,000,000

0.59273%

1,000,000

0.63000%

Unsecured loans from banks due on August 26, 2016

3,000,000

1.10100%

3,000,000

1.10100%

Unsecured loans from banks due on August 26, 2016

2,000,000

0.79750%

2,000,000

0.79750%

Unsecured loans from banks due on August 26, 2016

3,000,000

0.50000%

3,000,000

0.51000%

Unsecured loans from banks due on February 26, 2017

1,000,000

1.07450%

1,000,000

1.07450%

Unsecured loans from banks due on February 26, 2017

2,000,000

0.88700%

2,000,000

0.88700%

Unsecured loans from banks due on February 26, 2017

4,500,000

0.55000%

4,500,000

0.56000%

Unsecured loans from banks due on March 11, 2017

5,000,000

0.45000%--

Unsecured loans from banks due on June 10, 2017

3,900,000

1.43500%

3,900,000

1.43500%

Unsecured loans from banks due on August 27, 2017

9,000,000

1.12850%

9,000,000

1.12850%

Unsecured loans from banks due on December 26, 201712,900,000

1.03775%

12,900,000

1.03775%

Unsecured loans from a bank due on February 26, 2018

1,000,000

1.84650%

1,000,000

1.84650%

Unsecured loans from a bank due on June 26, 2018

2,000,000

1.09000%

2,000,000

1.09000%

Unsecured loans from a bank due on August 26, 2018

2,000,000

1.03500%

2,000,000

1.03500%

Unsecured loans from banks due on November 26, 2018

2,000,000

0.93600%

2,000,000

0.93600%

Unsecured loans from banks due on November 26, 2018

3,000,000

0.77650%

3,000,000

0.77650%

Unsecured loans from banks due on February 26, 2019

3,000,000

1.44450%

3,000,000

1.44450%

Unsecured loans from an insurance company due on February 26, 2019

2,000,000

0.90759%

2,000,000

0.90759%

Unsecured loans from banks due on February 26, 2019

5,300,000

0.87695%

5,300,000

0.87695%

Unsecured loans from banks due on August 26, 2019

5,700,000

1.25200%

5,700,000

1.25200%

Unsecured loans from a bank due on August 26, 2019

2,200,000

1.22000%

2,200,000

1.22000%

Unsecured loans from insurance companies due on August 26, 20192,500,000

1.27625%2,500,000

1.27625%

Unsecured loans from banks due on August 26, 2019

4,700,000

0.81080%

4,700,000

0.81080%

Unsecured loans from banks due on February 26, 2020

5,750,000

1.01150%

5,750,000

1.01150%

Unsecured loans from a bank due on August 26, 2020

1,100,000

1.53674%

1,100,000

1.53674%

Unsecured loans principally from banks due on August 26, 2020

4,500,000

1.08100%

4,500,000

1.08100%

Unsecured loans principally from banks due on February 26, 2021

5,000,000

1.35250%

5,000,000

1.35250%

Unsecured loans from insurance companies due on February 26, 2021

2,000,000

1.19211%2,000,000

1.19211%

Unsecured loans from a financial institution due on February 26, 2021

3,000,000

0.86350%--

Unsecured loans from banks due on February 26, 2021

2,120,000

0.85050%--

Unsecured loans from banks due on July 26, 2021

4,180,000

1.23920%

4,180,000

1.23920%

Unsecured loans from a bank due on January 26, 2022

3,500,000

1.48300%

3,500,000

1.48300%

Unsecured loans from a bank due on February 26, 2022

2,750,000

1.29600%

2,750,000

1.29600%

Unsecured loans from banks due on February 26, 2022

4,000,000

1.16000%

4,000,000

1.16000%

Unsecured loans from an insurance company due on August 26, 2022

3,000,000

1.09133%--

Unsecured loans from a bank due on November 26, 2022

1,800,000

1.05000%--

Unsecured loans from banks due on November 26, 2022

4,550,000

1.11000%--

Unsecured loans from a bank due on August 26, 2023

1,000,000

1.15850%--

Unsecured loans from a bank due on August 26, 2023

1,000,000

1.14850%--

Unsecured loans from a bank due on August 26, 2023

1,000,000

1.18032%--

Unsecured loans from banks due on November 26, 2023

2,000,000

1.75900%

2,000,000

1.75900%

Unsecured loans from a bank due on February 26,2024

2,750,000

1.59400%

2,750,000

1.59400%

6,750,000

1.97000%

7,000,000

1.97000%

Unsecured loans from a bank due on June 25, 2016 (Note 2)
Total¥144,450,000

Note 1:¥128,230,000

The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth
decimal place. As for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk,
the swapped interest rates are used to calculate the weighted average of interest.
Note 2: Installments of ¥250 million will be made on the 25th of every sixth month starting on December 25, 2009, with the remaining paymentof ¥6,750 million to be repaid on June 25, 2016.

36

The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date (excluding the current
portion of long-term debt) are as follows.
Thousands of Yen

Long-term debt

8.

1-2 years

2-3 years

3-4 years

4-5 years

28,250,000

26,800,000

19,300,000

20,850,000

INVESTMENT CORPORATION BONDS
Investment Corporation Bonds
Details of investment corporation bonds outstanding are summarized as follows:
As of October 31, 2014

As of April 30, 2015

AmountWeighted- averageAmountWeighted- average(Thousands of Yen)
interest rate
(Thousands of Yen)
interest rate
First Series of Unsecured Investment Corporation Bonds
Due on March 16, 2015
Second Series of Unsecured Investment Corporation Bonds
Due on March 16, 2020
Fourth Series of Unsecured Investment Corporation Bonds
Due on November 30, 2015
Sixth Series of Unsecured Investment Corporation Bonds
Due on March 17, 2017
Seventh Series of Unsecured Investment Corporation Bonds
Due on March 17, 2028
Eighth Series of Unsecured Investment Corporation Bonds
Due on November 26, 2014
Ninth Series of Unsecured Investment Corporation Bonds
Due on November 24, 2017
Tenth Series of Unsecured Investment Corporation Bonds
Due on November 25, 2024
Total

-

1.85000%¥5,000,000

1.85000%¥5,000,000

2.47000%

5,000,000

2.47000%

10,000,000

2.05000%

10,000,000

2.05000%

5,000,000

2.21000%

5,000,000

2.21000%

4,500,000

2.90000%

4,500,000

2.90000%-

0.94000%

6,000,000

0.94000%

4,000,000

1.52000%

4,000,000

1.52000%

6,000,000

1.02000%--¥39,500,000¥34,500,000

The scheduled redemption amounts of investment corporation bonds for each of the five years after the balance sheet date are as follows.

Investment Corporation Bonds

9.

Within a year
10,000,000

1-2 years
5,000,000

2-3 years
4,000,000

3-4 years－

Thousands of Yen
4-5 years
5,000,000

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

10. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of April 30, 2015 and October 31, 2014 were as follows:

Net asset values per unit
Net income per unit

For the period
from November 1, 2014
to April 30, 2015
¥577,631

For the period
from May 1, 2014
to October 31, 2014
¥578,511¥9,699¥10,579

The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding for the respective
six-month period.
Note: The basis for calculating net income per unit is as follows.
For the period
from November 1, 2014
to April 30, 2015
¥3,613,463

Net income (Thousands of Yen)

For the period
from May 1, 2014
to October 31, 2014
¥3,941,262

Amount not available to ordinary unitholders (Thousands of Yen)--

Net income available to ordinary unitholders (Thousands of Yen)

¥3,613,463¥3,941,262

372,553

372,553

Average number of units during the period3711. RELATED PARTY TRANSACTIONS
For the periods from November 1, 2014 to April 30, 2015 and from May 1, 2014 to October 31, 2014
Parent Company and major corporate unitholders
Not applicable
Subsidiaries and affiliates
Not applicable
Fellow subsidiary companies
Not applicable
Directors and major individual unitholders
Not applicable

12. INCOME TAXESThe Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 34% for thesix-month periods ended April 30, 2015 and October 31, 2014. However, the Company may deduct dividend distributions paid to its
unitholders from its taxable income amounts, provided such distributions meet the requirements under the Act on Special Measures
Concerning Taxation of Japan. Under this act, an investment corporation must meet a number of tax requirements, including arequirement to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct such amounts. If theinvestment corporation does not satisfy all of the requirements, the entire taxable income of the investment corporation will be subject
to regular corporate income taxes.
Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling¥3,613,391 thousand and ¥3,941,239 thousand for the six-month periods ended April 30, 2015 and October 31, 2014, respectively,
such distributions were treated as deductible distributions for purposes of corporate income taxes. The following summarizes thesignificant differences between the statutory tax rate and the effective tax rate:

Statutory tax rate
Deductible cash distributions
Other
Effective tax rate

For the period
from November 1, 2014
to April 30, 2015

For the period
from May 1, 2014
to October 31, 201434.15%(34.14)0.02
0.03%

34.16%(34.15)0.02
0.03%

13. FINANCIAL INSTRUMENTS
Overview(1) Policy for Financial Instruments
Upon acquisition of property-related assets, the Company may raise funds through certain financing methods including borrowings,
issuance of investment corporation bonds including short-term investment corporation bonds (“investment corporation bonds”), andissuance of investment units. In financing through interest-bearing debt, to secure stable financing capability and reduce future risksof rising interest rates, the Company’s investment policy is to secure longer-term, fixed-rate borrowings with well-diversified
maturities.
The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations anddoes not engage in speculative transactions.
(2) Type and Risk of Financial Instruments and Related Risk Management
Debts and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as the repayment
of debts and redemption of investment corporation bonds. The Company is exposed to liquidity risk of being unable to meet its
obligations on scheduled due dates. The Company controls and limits such risk by diversifying not only the financial institutions,but also the type of financing to include the effective use of surplus funds and direct financing from the capital markets such as
issuance of investment units. In addition, the Company is exposed to the market risk arising from fluctuations in interest rates on its
floating-rate debts. However, the effect of such risk on the operation of the Company is limited by maintaining the LTV ratio at low
levels and the ratio of long-term fixed-rate debts to total debt at high levels. Furthermore, the Company may utilize derivativetransactions (interest-rate swap transactions) as a hedging instrument to reduce the market risk under floating-rate debts by swapping
such floating-rate interest payments for fixed-rate interest payments.
Bank deposits are held as a means of investing surplus funds, and the Company is exposed to the credit risk that financial
institutions may default. However, the effect of such risk is limited by diversifying the financial institutions with which surplus
funds are deposited.
Security deposits represent funds deposited by tenants, and the Company is exposed to the risk of returning deposits in theevent that a tenant terminates the lease contract. However, the effect of such risk is limited by reserving sufficient funds to allow the
Company to meet the obligation to return such deposits.
(3) Supplementary Explanation on Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on the quoted market price, if applicable. When there is no quoted market priceavailable, fair value is reasonably estimated. Certain assumptions are used for the estimation of fair value. Accordingly, the resultof such estimation may change if different assumptions are used. Furthermore, the contractual amounts of derivative transactions
stated in “18. Derivatives and Hedge Accounting” below do not represent the market risk involved in these derivative transactions.
38Fair Value of Financial Instruments
For the period from November 1, 2014 to April 30, 2015
The following table summarizes the carrying value and the estimated fair values of financial instruments as of April 30, 2015.
following table does not include financial instruments whose fair value is extremely difficult to estimate (see Note 3 below).
Carrying value (Note 1)
14,860,960
16,887,747
31,748,707(10,000,000)(18,000,000)(24,500,000)(144,450,000)(196,950,000)
-

(i)
(ii)

Cash and bank deposits
Cash and bank deposits in trust
Total assets(iii) Current portion of investment corporation bonds(iv) Current portion of long-term debt(v)
Investment corporation bonds(vi) Long-term debt
Total liabilities(vii) Derivative transactions

Fair value (Note 1)
14,860,960
16,887,747
31,748,707(10,097,200)(18,052,817)(26,153,660)(146,241,065)(200,544,742)-

The

Thousands of Yen
Difference
97,20052,817
1,653,660
1,791,065
3,594,742-

For the period from May 1, 2014 to October 31, 2014
The following table summarizes the carrying value and the estimated fair values of financial instruments as of October 31, 2014.
The following table does not include financial instruments whose fair value is extremely difficult to estimate (see Note 3 below).
Carrying value (Note 1)
14,811,727
17,382,220
32,193,947(11,000,000)(24,350,000)(28,500,000)(128,230,000)(192,080,000)
-

(i)
(ii)

Cash and bank deposits
Cash and bank deposits in trust
Total assets(iii) Current portion of investment corporation bonds(iv) Current portion of long-term debt(v)
Investment corporation bonds(vi) Long-term debt
Total liabilities(vii) Derivative transactions

Fair value (Note 1)
14,811,727
17,382,220
32,193,947(11,029,333)(24,491,681)(30,303,349)(129,959,704)(195,784,067)-

Thousands of Yen
Difference
29,333
141,681
1,803,349
1,729,704
3,704,067-

Note 1: The numbers in parenthesis indicate liabilities.
Note 2: Method for determining the fair value of financial instruments and derivative transactions(i) Cash and bank deposits and (ii) Cash and bank deposits in trust
As these items are settled within a short-term period, their fair value is nearly equal to the carrying value.
carrying value is reported as the fair value.

Therefore, for these items, the(ⅲ) Current portion of investment corporation bonds (ⅴ) Investment corporation bonds
The fair value of investment corporation bonds issued by the Company is determined based on their market prices.
(ⅳ) Current portion of long-term debt and (ⅵ) Long-term debt
For floating-rate long-term debt, the carrying value is reported as it is considered to be approximately equal to the fair value because such debt
reflects the market interest rates within a short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies forthe special treatment of interest-rate swaps (see “18. Derivatives and Hedge Accounting”) is determined by discounting the sum of its
principal and interest payments net of any cash flows from the interest-rate swap at a rate reasonably estimated to be applicable to similar
fixed-rate debt.) The fair value of fixed-rate long-term debt is determined by discounting the sum of its principal and interest payments at a
rate reasonably estimated to be applicable to similar fixed-rate debt.
(vii) Derivative transactions
See “18. Derivatives and Hedge Accounting.”
Note 3: The fair value of security deposits (with a carrying value of ¥6,750,509 thousand as of October 31, 2014 and ¥6,802,594 thousand as of April
30, 2014) and security deposits in trust (with a carrying value of ¥15,656,746 thousand as of October 31, 2014 and ¥15,835,771 thousand as ofApril 30, 2014) that have been deposited from tenants under lease contracts are not disclosed because they do not have any market price andtheir effective deposit period from the lease inception to tenant’s termination of the lease contract cannot be reliably determined, thus making it
impossible to reasonably estimate their future cash flows, and therefore, it is considered to be extremely difficult to estimate their fair value.

Note 4: Redemption schedule for cash and bank deposits and cash and bank deposits in trust as of April 30, 2015
Thousands of Yen
Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

After four years,
within five years

After five years

Cash and bank deposits
Cash and bank deposits in trust

14,860,960
16,887,747

－
－

－
－

－
－

－
－

－
－

Total

31,748,707

－

－

－

－

－

39

Redemption schedule for cash and bank deposits and cash and bank deposits in trust as of October 31, 2014
Thousands of Yen
Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

After four years,
within five years

After five years

Cash and bank deposits

14,811,727

－

－

－

－

－

Cash and bank deposits in trust

17,382,220

－

－

－

－

－

Total

32,193,947

－

－

－

－

－

Note 5: Redemption schedule for investment corporation bonds and debt as of April 30, 2015
Thousands of Yen
Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

After four years,
within five years

After five years

Investment corporation bonds
Long-term debt

10,000,000
18,000,000

5,000,000
28,250,000

4,000,000
26,800,000－
19,300,000

5,000,000
20,850,000

10,500,000
49,250,000

Total

28,000,000

33,250,000

30,800,000

19,300,000

25,850,000

59,750,000

After three years,
within four years

After four years,
within five years

After five years: Redemption schedule for investment corporation bonds and debt as of October 31, 2014
Thousands of Yen
Due within one
year

14.

After one year,
within two years

After two years,
within three years

Investment corporation bonds

11,000,000

10,000,000

5,000,000

4,000,000－

9,500,000

Long-term debt
Total

24,350,000
35,350,000

22,000,000
32,000,000

20,400,000
25,400,000

17,900,000
21,900,000

30,400,000
30,400,000

37,530,000
47,030,000

INVESTMENT AND RENTAL PROPERTIESThe Company owns in its portfolio certain office buildings (including land) for lease located in Tokyo and other areas.
table summarizes the carrying value and the estimated fair value of these properties.

For the period
from November 1, 2014
to April 30, 2015

The following

Thousands of Yen
For the period
from May 1, 2014
to October 31, 2014

Carrying value
Balance at beginning of period
Change during period
Balance at end of period
Fair value¥402,155,611¥402,801,560

4,685,805(645,949)

406,841,416

402,155,611¥356,868,000¥348,841,000

Note 1:

The carrying value represents the acquisition cost less accumulated depreciation.

Note 2:The major increase in the carrying value during the period ended April 30, 2015 was mainly due to the acquisitions of PMO
Nihombashi Kayabacho (¥4,966,904 thousand).

Note 3:

The fair value as of April 30, 2015 and October 31, 2014 represents the sum of the appraisal values estimated by external realestate appraisers.

The real estate rental revenues and expenses for the six-month period ended April 30, 2015 and October 31, 2014are presented in “16.
Breakdown of Real Estate Rental Revenues and Expenses.”

40

15.

SEGMENT INFORMATION

For the periods from November 1, 2014 to April 30, 2015 and from May 1, 2014 to October 31, 2014
Segment Information
Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been omitted.
Related Information(1). Information about products and services
Since revenues from external customers of products and services within a single segment are more than 90 percent of total operating
revenues, information about products and services has been omitted.
(2). Information about geographical areas(a) Revenues
Since more than 90 percent of the total operating revenues were generated from external customers in Japan, geographicalbreakdown of revenues has been omitted.
(b) Property and equipment
Since more than 90 percent of the total property and equipment on the balance sheet are located in Japan, geographicalbreakdown of property and equipment has been omitted.
(3). Information about major clients
Since no single external client represents 10 percent or more of the Company’s total operating revenues, information about majorclients has been omitted.

16.

BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the six-month periods ended April 30, 2015 and October 31, 2014 consist of thefollowing:Thousands of Yen
For the period
from November 1, 2014
to April 30, 2015
Real estate rental revenues
Rental revenues
Rental revenues
Common area charges
Other rental revenues
Parking revenues
Incidental income
Other miscellaneous revenues
Real estate rental expenses
Property management costs
Property management fees
Property and other taxes
Utility expenses
Casualty insurance
Repairs and maintenance
Depreciation
Other rental expenses
Real estate rental profits

41

For the period
from May 1, 2014
to October 31, 2014

¥13,025,024¥13,105,730

11,601,464
9,544,015
2,057,449
1,423,560
279,111
858,926
285,523

11,747,351
9,624,984
2,122,367
1,358,379
274,831
998,174
85,374

6,597,381

6,403,536

1,250,389
264,754
1,139,644
1,076,776
19,334630,234
1,845,111
371,139

1,246,782
247,817
1,156,612
1,238,961
21,061
376,287
1,806,362
309,654¥6,427,643¥6,702,194

17.

LEASES
Finance lease agreements, excluding those in which the ownership of the leased assets is deemed to be transferred to the lessee, aremainly for tools, furniture and fixtures in trust. Depreciation of leased assets under finance lease transactions excluding those in which
the ownership of the leased assets is deemed to be transferred to the lessee are calculated by the straight-line method, over the lease
period with no residual value.
The Company, as a lessor, enters into lease agreements for which fixed monthly rents are due in advance with a lease term ofgenerally two years for offices. The future minimum rental revenues under existing non-cancelable operating lease agreements as ofApril 30, 2015 and October 31, 2014 are summarized as follows:
As of April 30, 2015
¥4,663,012
10,877,237¥15,540,249

Due within one year
Due after one year
Total

Thousands of Yen
As of October 31, 2014
¥4,025,198
12,136,777¥16,161,975

18. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of April 30, 2015
(1) There were no derivative financial instruments not applying hedge accounting.
(2) Derivative financial instruments applying hedge accounting were as follows:
Thousands of Yen
Notional amount

Hedge accounting
methodType of derivative
instruments

Main hedged item

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating
and paid/fixedLong-term debt

Due after one year
98,600,000

93,100,000

Fair
value

Method used for
determining fair value(*)* Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one
transaction together with their hedged item, long-term debt, the fair value of these derivatives is included in that of related long-term
debt (see “13. Financial Instruments (Note 2) (ⅳ) Current portion of long-term debt and (ⅵ) Long-term debt”).

Derivative transactions as of October 31, 2014
(1) There were no derivative financial instruments not applying hedge accounting.
(2) Derivative financial instruments applying hedge accounting were as follows:
Thousands of Yen
Notional amount

Hedge accounting
methodType of derivative
instruments

Main hedged item

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating
and paid/fixedLong-term debt

Due after one year
97,280,000

87,930,000

Fair
value

Method used for
determining fair value(*)* Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one
transaction together with their hedged item, long-term debt, the fair value of these derivatives is included in that of related long-term
debt (see “13. Financial Instruments (Note 2) (ⅳ) Current portion of long-term debt and (ⅵ) Long-term debt”).

19.

SIGNIFICANT SUBSEQUENT EVENTS
Merger with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate Residential Fund, Inc.
NOF, Nomura Real Estate Master Fund, Inc. (“NMF”) and Nomura Real Estate Residential Fund, Inc. (“NRF”; and NMF, NOF and
NRF are individually referred to as the “Consolidated Investment Corporation” hereinafter) respectively have determined at each of
the board of directors meetings held on May 27, 2015 to implement a consolidation-type merger (the “Merger”), whereby October 1,
2015 is set as the date of incorporation of investment corporation (the “New Investment Corporation) incorporated through theconsolidation-type merger, and that the companies have entered into a merger agreement (the “Merger Agreement”) dated May 27,
2015. A proposal of the Merger Agreement is planned to be submitted for approval at the general meeting of unitholders scheduled tobe held on July 30, 2015. The name of the new company following the merger shall me Nomura Real Estate Master Fund, Inc.
(1) Purpose of Merger
NOF believes that the Merger will expand acquisition opportunities, stabilize the portfolio, enhance risk tolerance, increase
competitive strength for asset acquisitions and stabilize the financial base by increasing the asset size and diversifying target
investment sectors. In addition, NOF believes that it can achieve both growth and stable management by effectively leveraging thewide-range of know-hows and brands held by Nomura Real Estate Group, one of the major comprehensive real estate developers inJapan. As such, NOF is confident that the Merger is the best option for its unitholders and has therefore entered into the Merger
Agreement.
(2) Merger Ratio
Upon the merger, 3.60 New Investment Corporation units will be allotted for each NOF unit, 4.45 New Investment Corporation units
will be allotted for each NRF unit and 1 New Investment Corporation units will be allotted for each NMF unit.
(3) Cash Distribution on Merger
Instead of cash distributions for NOF’s final fiscal period ending on September 30, 2015 (the period from May 1, 2015 to September
30, 2015), the New Investment Corporation will make a cash distribution on merger to the unitholders listed or recorded on the final
unitholders register of NOF as of the day immediately prior to the date of incorporation of the New Investment Corporation, in an
amount equivalent to the cash distributions for the final fiscal period based on NOF’s distributable profit.

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(4) Overview of Preceding Periods of the Consolidated Investment Corporations (NMF (period ended February 2015) and NRF(period ended November 2014))
NMF (period ended February 2015)
Line of business: Management as investment in specific assets, mainly assets, based on the Investment Trust Act
Operating revenue
Net income
AssetsLiabilities
Net assets

10,066 million yen
4,145 million yen
276,539 million yen
111,272 million yen
165,267 million yen

NRF (period ended November 2014)
Line of business: Management as investment in specific assets, mainly assets, based on the Investment Trust Act
Operating revenue
Net income
AssetsLiabilities
Net assets

5,480 million yen
1,877 million yen
164,852 million yen
89,703 million yen
75,148 million yen

43Business Structure

Corporate Data
Corporate Name
Nomura Real Estate Office Fund, Inc.
Corporate Office8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo
160-0023, Japan
http://www.nre-of.co.jp/english/
Date of Incorporation
August 7, 2003
Stock Listing
Tokyo Stock Exchange (Securities Code: 8959)
Fiscal Period
Six months ending on April 30 and October 31
Capital¥211,430,494,385 (as of April 30, 2014)
Number of Units Issued
372,553 (as of April 30, 2014)

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

Number of Unitholders
18,495 (as of April 30, 2014)45

Nomura Office Fund’s Website
The Company strives to provide accurate and timely disclosure of information by utilizing the website.
・Strength of NOF, Asset Management Policies, Corporate Profile

・Portfolio Summary, Portfolio Data, Occupancy Rates, Major Tenants

・News, Latest Data, Performance, Distributions, Calendar

We continue to provide information timely and strive to enhance the contents of the website.

Disclaimer
This semiannual report includes translations of certain Japanese documents originally filed under the Financial Instruments andExchange Act of Japan. This report was prepared in English solely for the convenience of and reference by readers outside Japanand should not be considered as a disclosure statement. The original Japanese documents always govern the meaning andinterpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (“J-REITs”) in
preparing its financial statements conform with accounting principles generally accepted in Japan (“Japanese GAAP”). However,they may differ from generally accepted accounting principles applied in certain other countries. Potential investors should
consult their own professional advisors for an understanding of the differences between Japanese GAAP and generally accepted
accounting principles in the United States (“U.S. GAAP”) or other jurisdictions and how those differences might affect thefinancial information contained herein.
This document has been prepared for the purpose of provision of information only, and should not be construed as anoffer, solicitation or commercial conduct of any nature associated with any specific products. Investors wishing to purchase theinvestment units of Nomura Real Estate Office Fund, Inc. should contact their own securities brokers or dealers. A fee may becharged by your financial instruments business operator in relation to the sale or purchase of investment units.
Although the information contained in this document is intended to be complete and thorough, there is no assurance of precisionand safety of the same. Please note that the contents of this document are subject to change or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or whole of the information contained in thisdocument without express prior written consent.

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