NOMURA REAL ESTATE OFFICE FUND, INC.
Fourth Fiscal Period Semi-Annual Report

http://www.nre-of.co.jp/

Printed in Japan

Fourth Fiscal Period

Semi-Annual Report
May 1, 2005

October 31, 2005

Corporate Data

ProfileNomura Real Estate Office Fund, Inc. (referred to as “Nomura OfficeFund” or the “Company” hereafter) was listed on the Real Estate
Investment Trust Section of the Tokyo Stock Exchange on December 4,
2003.
Subject to the Law Concerning Investment Trusts and Investment
Corporations of Japan (referred to as the “Investment Trust Law”
hereafter), Nomura Office Fund invests mainly in real estate and otherspecified assets with a view to secure stable rent revenues and toensure steady portfolio growth over the medium- to long-term. Basedon this basic policy, Nomura Office Fund invests in real estates, usedprimarily for office, in three major urban areas and other large cities
including but not limited to the government-designated cities, as wellas trust beneficial interests in such real estates.
Nomura Real Estate Asset Management Co., Ltd. (referred to as“NREAM” or the “Asset Management Company” hereafter), a wholly
owned subsidiary of Nomura Real Estate Holdings Co., Ltd. is in chargeof asset management on behalf of Nomura Office Fund in accordancewith the basic investment policies as described above.
Through coordination with Nomura Real Estate Holdings Co., Ltd.
and other group companies, NREAM aims to secure stable rent
revenues from the portfolio and to ensure steady portfolio growth overthe medium- to long-term.

Contents
To Our Investors.......................................................................................... 1
Financial Highlights..................................................................................... 2
Portfolio Highlights ..................................................................................... 3
New Investments at the Fourth Fiscal Period ............................................ 4
Summary of Portfolio Properties ................................................................ 6
Location of Properties.................................................................................. 7
Property Details ........................................................................................... 8
Financial Section ........................................................................................ 15
Business Structure ......................................................................................45
Profile of the Asset Management Company ............................................ 46
Corporate Data ............................................................................. Back coverCorporate 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
Date of Incorporation
August 7, 2003
Stock Listing
Tokyo Stock Exchange (Securities Code: 8959)

corporations in Japan (so-called “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 incertain 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 the financial information contained herein.

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
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwaicho Chiyoda-ku,
Tokyo 100-0011, Japan

Fiscal Period
Six months ending on April 30 and October 31
Paid-in Capital¥124,610,212,840 (as of October 31, 2005)
Number of Units Issued
229,970 (as of October 31, 2005)

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
15,884 (as of October 31, 2005)

Disclaimer
This semiannual report includes translations of certain Japanese documents originally filed under the Securities andExchange Law of Japan. This report was prepared in English solely for the convenience of and reference by readers
outside Japan and should not be considered as a disclosure statement. The original Japanese documents always govern
the meaning and interpretation.
Estimates for Nomura Office Fund’s future operating results contained in this semiannual report are forward-looking
statements and are based on information then available to Nomura Office Fund and its asset management company andare subject to risks and uncertainties. Consequently, these projections should not be relied upon as the sole basis forevaluating Nomura Office Fund. Actual results may differ substantially from the projections depending on a number offactors.

In general, accounting principles and practices used by real estate investment

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, JapanTo Our Investors
Dear Investors,
We are delighted to be able to present the financial results for the 4th fiscal period (ending October 31, 2005) andreport to you on our activities during the period herein.
Nomura Office Fund (the “Company”) booked operating revenues for this period of ¥8,641 million, current
profits of ¥3,485 million, and net income of ¥3,484 million. Cash distribution per unit was ¥15,150.
Some of the major developments during the 4th period included new investments in four office buildings in
Minato-ku in metropolitan Tokyo, Yokohama City, Kawasaki City and Nagoya City respectively. As a result of theseacquisitions, the number of buildings in the portfolio now totals 23 with a total acquisition price of ¥210.1 billion.
These acquisitions have also helped to contribute to further diversify the portfolio in terms of geography, and reducehigh dependency on single building.
Turning your eye to property leasing, we have managed to maintain the average occupancy rate as high as above
97% throughout the period. We have also conducted various refurbishment and renovation works not only to keep up
but also further enhance the competitiveness of the properties with a view to increase rent revenues over the mid-tolong term.
On the financial aspects, we have built up a solid financial base by issuing new investment units, which were
offered to the general public investors for the second time after the initial listing. The filing of shelf registration
scheme also contributed to diversifying the method of funding. In compliance with our policy to seek mid-to-longterm optimization, we will continue adhering to the conservative investment policies in future.
Lastly, we would like to thank you again for your patronage in the past periods, and would like to ask for yourcontinued support for the years to come.

Isamu Okada
Executive Director
Nomura Real Estate Office Fund, Inc.

1

Financial Highlights
FINANCIAL SUMMARY

4th Fiscal Period

3rd Fiscal Period

2nd Fiscal Period

1st Fiscal Period(Ending Oct. 2005)(Ending Apr. 2005)(Ending Oct. 2004)(Ending Apr. 2004)

Operating Revenues

¥ mln

8,641

7,106

6,656

4,531

Net Operating Income (NOI) (Note 1)

¥ mln

6,125

4,970

4,451

3,350

Income before Income Taxes

¥ mln

3,485

2,682

2,607

1,528

Net Income

¥ mln

3,484

2,681

2,606

1,526

Total Assets¥ mln

239,067

208,003

173,545

147,946

Unitholders' Capital¥ mln

124,610

92,16892,16871,706

Number of Units Issued

Unit

229,970

184,650

184,650

148,600¥

557,004

513,672

513,266

492,820

¥ mln

3,484

2,681

2,606

1,526

Net Assets per Unit
Total Cash Distribution
Cash Distribution per Unit¥

15,15014,520

14,114

10,273Funds from Operation (FFO) per Unit (Note 2)¥

20,55920,142

19,255

14,757Note 1: NOI = Rental Business Revenue - Rental Business Expenses + Depreciation
Note 2: FFO per Unit = (Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs) / Number of Units Issued

CHANGES IN KEY FIGURES
Operating Revenues (¥ mln)

Total Assets (¥ mln)

10,000

8,641
7,106

6,656

150,000

173,545

14,52014,000147,946
12,000100,000
4,000

10,273
10,00050,000

2,000

8,000

0
1st FP

15,150
14,114

4,531

6,000

16,000208,003
200,000

8,000

Cash Distribution per Unit (¥)
239,067

250,000

2nd FP

3rd FP

4th FP

1st FP

2nd FP

3rd FP

1st FP

4th FP

2nd FP

3rd FP

4th FPCHANGES IN UNIT PRICE
Turnover (Unit)
12,000Price (¥)
900,000

Total market value (as of Oct. 31, 2005).....¥179,836 mln
All-time high price ......................................¥850,000 per unit
All-time low price .......................................¥505,000 per unit

6,000

800,000

700,000

4,000

Offer price at listing¥500,000 per unit

3,000

600,000

2,000

500,000

1,000

400,000

300,000

0Dec. 4
2003

Apr. 30
2004

Oct. 292005

Apr. 28
2005

RATINGThe following ratings have been given to the Company.
Rating Company

2

RatingStandard & Poor’s Ratings Services

A (Long-term Corporate Credit Rating)A-1 (Short-term Corporate Credit Rating)

Moody’s Investors Services, Inc.

A3 (Issuer Rating)Rating and Investment Information, Inc.

A+ (Issuer Rating)Oct. 312005

Portfolio Highlights
CHANGES IN ASSET SIZE
Four new investments (totalling ¥25.5 billion) having been made during the 4th period, and the total size of portfolio has grown to count 23
buildings with a total acquisition price of ¥210.1 billion. This is about double the size of what it used to be at the time of initial listing of theunit in December 2003.
(¥ bln)250

23 properties
19 properties
210.1

18 properties
200

184.6

15 properties
151.5

12 properties

150

127.2
104.2

100
50
at listing(Dec. 2003)

1st FP(Apr. 30, 2004)

2nd FP(Oct. 31, 2004)

4th FP(Oct. 31, 2005)

3rd FP(Apr. 30, 2005)

DIVERSITY IN LOCATION (Based on acquisition price)
as of Apr. 30, 2005
(end of 3rd fiscal period)

as of Oct. 31, 2005
(end of 4th fiscal period)
Other Cities

Other Cities

Tokyo Central Area

10.5%

10.0%

72.6%
Tokyo Central Area

Vicinity of Tokyo

78.7%

Vicinity of Tokyo
16.9%

11.3%

Note: Tokyo Central Area .....Central 6 wards (Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku, Shinagawa-ku, Shibuya-ku)
Vicinity of Tokyo ..........Tokyo (other than Tokyo Central Area), Kanagawa, Saitama, Chiba
Other Cities .................All the other areas

CHANGES IN OCCUPANCY RATE AND OTHER KEY DATA (Average occupancy rate)
The average occupancy rate of the portfolio has been sustained at a stable rate above 97% throughout the 4th fiscal period. The
breakdown of the average occupancy rates by location is as follows; 98.0% for the Tokyo Central Area, 98.8% for the Vicinity of Tokyo,
and 93.6% for all the Other Cities.
Total leasable floor space (m2)

Average occupancy rate (%)

98.1

100.0

90.0

236,904.67

97.7

97.8

97.8

97.7

252,006.46

252,006.46

252,006.46

97.2

97.3

261,443.80

261,428.50

300,000

243,722.43

250,000

200,000

80.0

70.0

150,000
End of Apr.
2005

Number of Buildings

End of May
2005

End of Jun.
2005

End of Jul.
2005

End of Aug.
2005

End of Sep.
2005

End of Oct.
2005

End of Apr. 2005

End of May 2005

End of Jun. 2005

End of Jul. 2005

End of Aug. 2005

End of Sep. 2005

End of Oct. 2005

19

20

21

21

21

23

23

Aggregate Number of Tenants

287

310

337

337

333

355

357

Total Leasable Floor Space (m2)

236,904.67

243,722.43

252,006.46

252,006.46

252,006.46

261,443.80

261,428.50

98.1

97.7

97.8

97.8

97.7

97.2

97.3

Average Occupancy Rate (%)

3

New Investments at the Fourth Fiscal Period
New investments with a total acquisition price of ¥25.5 billion was made to acquire “Asahi Seimei Yokohama
Nishiguchi Building”, “Kawasaki Higashiguchi Sanshin Building”, “Toshin Tameike Building” and “Yanagibashi
Sanshin Building”.

Location:
Date acquired:
Acquisition price:

Nakamura-ku, Nagoya City, Aichi
September 29, 2005
¥3,550 million

Property Profile
Meieki quarter is the most sought-after business area within the City of Nagoya, where
various extensive office redevelopment projects are currently underway. The quarter is
expected to continue to attract an increasing number of major corporations operating
nation-wide and their affiliated companies for the foreseeable future.
This property, with a highly distinguishable exterior made of glass curtainwalls, enjoys
a superb location of being situated only seven minutes on foot from Nagoya Station, andfacing the busy Hirokoji-Dori. These special features added to this property attract not
only tenants of conventional businesses, but also those of visitor-oriented businesses.

Location:
Date acquired:
Acquisition price:

Nishi-ku, Yokohama City, Kanagawa
May 12, 2005
¥5,050 million

Property Profile
Located at the western side of Yokohama Station, where department stores, hotels
and office buildings are densely accumulated, providing high standard of commercial
convenience, this property is capable of meeting various tenants’ needs ranging fromoffices of visitor-oriented business as well as conventional business, to commercial
outlets. The property is situated in a neatly regulated block of land and thus is highly
visible, and is also only five minutes walking distance from Yokohama Station, themajor regional station that serves six railways.

4

Location:
Date acquired:
Acquisition price:

Minato-ku, Tokyo
September 29, 2005
¥7,400 million

Property Profile
This property is extremely conveniently served by two major subway lines:
it is only five minutes from Tameike-Sanno Station of Ginza Line andNamboku Line, and seven minutes from Toranomon Station of Ginza Line.
In addition, it enjoys a good access to Shuto Expressway, or the circularmotorway, and other major roads such as Sotobori-Dori and Roppongi-Dori.
Both the interior and exterior of the property was refurbished and thefacilities were renewed in 1996. The property’s antiseismic structure has
passed the seismic test, proving that the property would meet the New
Earthquake Resistance Standard. The property thus provides favourable
features to satisfy the needs of tenants.

Yanagibashi Sanshin Building

Kawasaki Higashiguchi Sanshin Building

Toshin Tameike Building

Asahi Seimei Yokohama Nishiguchi Building

Location:
Date acquired:
Acquisition price:

Kawasaki-ku, Kawasaki City, Kanagawa
June 30, 2005
¥9,500 million

Property Profile
This property has a high rarity value of being located at only two minutes walking
distance from JR Kawasaki Station, facing a gyratory in front of the station’s East Exist.
Taking further advantage of being located in front of the station, this property has
special features of the basement level being connected to the underground shopping
mall adjacent to the station, and the shops on the second level being directly accessible
from the street via its exterior stairways. Such features of the property satisfy wide
range of tenants’ needs.

5Summary of Portfolio Properties

Office Property

Location

Leasable Floor
Space (m2)Completed
Date

Acquired
Date

Acquisition
Price (¥ mln)

Ratio in Total
Acquisition
Price (%)

Tokyo Central Area
01 Shinjuku Nomura Bldg.

Shinjuku-ku, Tokyo

31,804.67

May 1978Dec. 8, 2003

38,73018.4

02 JAL Bldg.

Shinagawa-ku, Tokyo

42,084.11

Jun. 1996 Mar. 18, 2005

33,08015.7

03 Itopia Nihonbashi-Honcho Bldg.

Chuo-ku, Tokyo

19,233.28

Apr. 1961

Dec. 5, 2003

20,6009.8(Extension
Apr. 1968)

04 Tennozu Park Side Bldg.

Shinagawa-ku, Tokyo

18,051.61

Jan. 1995

Feb. 27, 2004

14,800

7.0

05 NOF Shibuya Koen Dori Bldg.

Shibuya-ku, Tokyo

3,420.16

Sep. 1987

Sep. 28, 2004

12,0005.7

06 Isuzu Shiba Bldg.

Minato-ku, Tokyo

8,165.10

Mar. 1991

May 25, 2004

10,0004.8

07 Toshin Tameike Bldg.

Minato-ku, Tokyo

4,766.33

Aug. 1959

Sep. 29, 2005

7,400

3.5

08 Shinagawa NF Bldg.

Shinagawa-ku, Tokyo

7,850.99

Nov. 1987

Dec. 8, 2003

5,500

2.6

09 Surugadai Plaza Bldg.

Chiyoda-ku, Tokyo

4,160.94

Apr. 1997

Feb. 27, 2004

5,150

2.5

10 Kanda Iwamoto-cho Tosei Bldg.

Chiyoda-ku, Tokyo

4,076.38

Jul. 1988

Feb. 26, 2004

3,080

1.5

11 Seiwa Shinjuku Bldg.

Shibuya-ku, Tokyo

2,464.71

Mar. 1986

Jun. 25, 2004

Total Tokyo Central Area

2,280

1.1

152,620

72.6

Dec. 5, 2003

7,550

3.6

146,078.28

Vicinity of Tokyo
12 TT Landic Toyo-cho Bldg.

Koto-ku, Tokyo

18,218.17

13 Technoport Kamata B Ridge

Ota-ku, Tokyo

13,683.46

Sep. 1990

Dec. 5, 2003

6,430

3.1

14 Faret Tachikawa Center Square

Tachikawa City, Tokyo

6,853.38

Dec. 1994

Dec. 5, 2003

3,290

1.6

15 Kawasaki Higashiguchi Sanshin Bldg.

Kawasaki City, Kanagawa

8,284.03

Mar. 1988

Jul. 30, 2005

9,500

4.5

16 Asahi Seimei Yokohama Nishiguchi Bldg.

Yokohama City, Kanagawa

6,817.76

Oct. 1985

May 12, 2005

5,050

2.4

17 Shin-Yokohama Nikko Bldg.

Yokohama City, Kanagawa

8,074.83

Oct. 1990

Dec. 5, 2003

3,600

1.7

35,42016.9

Total Vicinity of Tokyo

Nov. 1989

61,931.63

Other Cities
18 Utsunomiya NF Bldg.

Utsunomiya City, Tochigi

5,887.40

Dec. 1999

Dec. 5, 2003

2,970

1.4

19 Yanagibashi Sanshin Bldg.

Nagoya City, Aichi

4,655.74

Mar. 1991

Sep. 29, 2005

3,550

1.7

20 Nomura Osaka Bldg.

Osaka City, Osaka

16,977.79

Dec. 1983

Dec. 5, 2003

6,410

3.1

21 Nomura Yotsubashi Bldg.

Osaka City, Osaka

11,558.68

Nov. 1991

Dec. 5, 2003

3,940

1.9

22 Kobe Kaigan Bldg.

Kobe City, Hyogo

6,427.01

Feb. 1998

Dec. 5, 2003

3,280

1.6

23 Nomura Hiroshima Bldg.

Hiroshima City, Hiroshima

7,911.97

Jul. 1976

Dec. 5, 2003

1,930

0.9

Total Other Cities

53,418.59

22,080

10.5

Grand Total

261,428.50

210,120100.0

Notes: 1. All the buildings of the portfolio are held in the form of beneficial interests in real estate trust where the real estates are the primary underlying assets.
2. “Leasable Floor Space” is defined as an aggregated area of office and retail use within a building that can be leased at a certain given time. As for the properties ownedin compartment, leasable floor space normally refers to such spaces owned in exclusivity, but may include common spaces if they are leased. The leasable floor space ofShinjuku Nomura Building is calculated by multiplying the total leasable floor space of the entire building by the ratio of co-ownership (50.1%) of beneficial interests. The
total leasable floor space of JAL Building, which is owned through the trustee, includes the area of space calculated by multiplying the total common space with the ratioof our holding as per the terms of management of the building.
3. “Completed Date” was taken from the registry book of each property. As for Toshin Tameike Building, however, the date when the Certificate of Inspection was issued
under the Building Standards Law was taken as no date was specified in the registry book.
4. “Ratio in Total Acquisition Price” reflects the percentage of each property’s acquisition price in the total portfolio. The sum of the figure in each column may not necessarily add up to 100.0 due to rounding to the nearest first decimal place.
5. Shinjuku Nomura Building is held through the co-ownership of beneficial interests in real estate trust. The Company holds 50.1% of all co-ownership of the beneficial
interest in real estate trust. The acquisition price above is the price for this co-ownership.

6

Location of Properties

Tokyo Central Area
Shinjuku-ku

09

01

10

Chiyoda-ku

11

03
Chuo-ku

Shibuya-ku

07

05
Minato-ku

06

08 04
02

Shinagawa-ku

01 Shinjuku Nomura Building

07 Toshin Tameike Building

02 JAL Building

08 Shinagawa NF Building

03 Itopia Nihonbashi-Honcho Building

09 Surugadai Plaza Building

04 Tennozu Park Side Building

10 Kanda Iwamoto-cho Tosei Building

05 NOF Shibuya Koen Dori Building

11 Seiwa Shinjuku Building

06 Isuzu Shiba Building

Tokyo Central Area
Central 6 wards:
Chiyoda-ku, Chuo-ku, Minato-ku,
Shinjuku-ku, Shinagawa-ku, Shibuya-ku

Vicinity of Tokyo
Tokyo (other than Tokyo Central Area),
Kanagawa, Saitama, Chiba

18

Other Cities

19
22
23

20
21

12 TT Landic Toyo-cho Building
13 Technoport Kamata B Ridge
14 Faret Tachikawa Center Square
15 Kawasaki Higashiguchi Sanshin Building
16 Asahi Seimei Yokohama Nishiguchi Building

Other Cities

17 Shin-Yokohama Nikko Building

18 Utsunomiya NF Building

Vicinity of Tokyo

19 Yanagibashi Sanshin Building

Saitama
Chiba

20 Nomura Osaka Building
21 Nomura Yotsubashi Building

14

Tokyo

12

22 Kobe Kaigan Building
13

23 Nomura Hiroshima Building
15
Kanagawa

17
16

7

Property Details

01

Shinjuku Nomura Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo
SRC / RC / S
B5 / 50F
9,298.21 m2
117,258.88 m2
Land
Co-ownership*
Building
Co-ownership*
Nomura Real Estate Development Co., Ltd.
* The above areas represent the entire space of the building, of which the Company holds the coownership of 50.1%.

The property consists of the front building and adjacent yard.

02

JAL Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

03

Itopia Nihonbashi-Honcho Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

04

2-7-1 Nihonbashi-Honcho, Chuo-ku, Tokyo
SRC
B3 / 8F
3,196.31 m2
29,430.67 m2
Land
Ownership
Building
Ownership
Itochu Urban Community, Ltd.

Tennozu Park Side Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

82-4-11 Higashi-Shinagawa, Shinagawa-ku, Tokyo
SRC / RC *Damping structure
B2 / 26F
11,670.40 m2 (Entire site)
25,260.48 m2 (Exclusive area owned)Land
Co-ownership
Building
Compartmentalized ownership
Nomura Real Estate Development Co., Ltd.

2-5-8 Higashi-Shinagawa, Shinagawa-ku, TokyoS / RC / SRC
B2 / 21F
5,816.26 m2 (Entire site)
17,587.30 m2 (Exclusive area owned )Land
Co-ownership
Building
Compartmentalized ownership
Nomura Real Estate Development Co., Ltd.

05

NOF Shibuya Koen Dori Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

06

Isuzu Shiba Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

07

4-2-3 Shiba, Minato-ku, Tokyo
SRC / S
B1 / 7F
2,074.65 m2
11,425.20 m2
Land
Ownership
Building
Ownership
IKOMA TBM K.K.

Toshin Tameike Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

08

20-17 Udagawa-cho, Shibuya-ku, Tokyo
SRC / RC
B2 / 8F
637.08 m2
5,358.55 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

1-1-14 Akasaka, Minato-ku, Tokyo
SRC
B1 / 9F
690.67 m2
6,478.50 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

Shinagawa NF Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

1-2-5 Higashi-Shinagawa, Shinagawa-ku, Tokyo
SRC
B1 / 8F
3,240.30 m2
10,077.02 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

9

Property Details

09

Surugadai Plaza Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

10

Kanda Iwamoto-cho Tosei Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

11

Property Management Company:

5-32-7 Sendagaya, Shibuya-ku, Tokyo
SRC
B1 / 8F
545.87 m2
3,160.05 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

TT Landic Toyo-cho Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

103-8-16 Iwamoto-cho, Chiyoda-ku, Tokyo
SRC
9F
773.32 m2
4,698.97 m2
Land
Ownership
Building
Ownership
Itochu Urban Community Ltd.

Seiwa Shinjuku Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:

122-5-12 Kanda Surugadai, Chiyoda-ku, Tokyo
SF / SRC *Anti-seismic structure
B1 / 8F
1,056.92 m2
5,782.27 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

1-6-35 Shinsuna, Koto-ku, Tokyo
SRC / RC
7F
8,926 m2
18,051.08 m2
Land
Ownership
Building
Ownership
Nomura Building Management Co., Ltd.

13

Technoport Kamata B Ridge

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

2-16-1 Minami-Kamata, Ota-ku, TokyoS / SRC
B1 / 11F(a) 9,429.59 m2(b) 3,483.90 m2
21,516.54 m2 (Exclusive area owned)
Land
Ownership (Partly Co-ownership)
Building
Compartmentalized ownership
Nomura Real Estate Development Co., Ltd.
Note: (a) 100% owned, (b) co-ownership

14

Faret Tachikawa Center Square

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

15

Kawasaki Higashiguchi Sanshin Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

162-36-2 Akebono-cho, Tachikawa City, TokyoS / SRC / RC
B2 / 12F
4,454.59 m2 (Entire site)
6,865.80 m2 (Exclusive area owned)Land
Co-ownership
Building
Compartmentalized ownership
Nomura Real Estate Development Co., Ltd.

3-1 Ekimae Honcho, Kawasaki-ku, Kawasaki City, Kanagawa
S / SRC
B1 / 12F
1,275.70 m2
10,932.69 m2
Land
Ownership
Building
Ownership
Nomura Building Management Co., Ltd.

Asahi Seimei Yokohama Nishiguchi Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

1-11-11 Kita-Saiwai, Nishi-ku, Yokohama City, Kanagawa
SRC
B1 / 9F
1,502.94 m2
10,055.13 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

11

Property Details

17

Shin-Yokohama Nikko Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

18

Utsunomiya NF Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

19

Property Management Company:

1-16-28 Meieki-Minami, Nakamura-ku, Nagoya City, AichiS
B2 / 12F
934.20 m2
7,363.25 m2
Land
Ownership
Building
Ownership
Nomura Building Management Co., Ltd.

Nomura Osaka Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

122-1-1 Baba-dori, Utsunomiya City, Tochigi
S / SRC
B2 / 10F
1,545.13 m2
10,479.63 m2
Land
Ownership
Building
Ownership
Nomura Building Management Co., Ltd.

Yanagibashi Sanshin Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:

20

2-15-16 Shin-Yokohama, Kohoku-ku, Yokohama City, Kanagawa
SRC
B1 / 9F
1,320 m2
11,149.99 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

1-8-15 Azuchi-cho, Chuo-ku, Osaka City, OsakaSRC
B2 / 12F
3,136.56 m2
23,522.82 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

21

Nomura Yotsubashi Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

22

Kobe Kaigan Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

23

1-4-4 Awaza, Nishi-ku, Osaka City, OsakaS / SRC
B2 / 15F
1,865.34 m2
16,845.87 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

3 Kaigan-dori, Chuo-ku, Kobe City, Hyogo
S / SRC
B1 / 16F
1,451.31 m2
10,292.93 m2
Land
Ownership
Building
Ownership
The Dai-Ichi Building Co., Ltd.

Nomura Hiroshima Building

Location:
Structure:
Floors:Site Area:
Total Floor Space:
Type of Ownership:
Property Management Company:

2-23 Tate-machi, Naka-ku, Hiroshima City, Hiroshima
SRC
B2 / 9F
1,319.15 m2
11,950.37 m2
Land
Ownership
Building
Ownership
Nomura Real Estate Development Co., Ltd.

13

14

Financial Section

Contents
Asset Management Report ................................................. 16
Balance Sheets.................................................................... 34
Statements of Income and Retained Earnings.................... 36
Statements of Changes in Unitholders’ Equity ................... 37
Statements of Cash Flows .................................................. 38
Notes to Financial Statements ............................................ 39
Independent Auditors’ Report ............................................. 44

15

Asset Management Report
1. CHANGES IN KEY INDICATORS
4th FP
Ending Oct. 2005

3rd FP
Ending Apr. 2005

2nd FP
Ending Oct. 2004

1st FP
Ending Apr. 2004

Operating Revenues

¥ mln

8,641

7,106

6,656

4,531

of which Rental Business Revenue

¥ mln

8,641

7,106

6,656

4,531

Operating Expenses

¥ mln

4,530

3,877

3,725

2,217

of which Rental Business Expenses

¥ mln

3,745

3,159

3,154

1,847

Operating Income

¥ mln

4,111

3,228

2,930

2,313

Current Profits

¥ mln

3,485

2,682

2,607

1,528

Net Income

¥ mln

3,484

2,681

2,606

1,526

Total Assets¥ mln

239,067

208,003

173,545

147,946

Interest Bearing Debt

¥ mln

93,00096,50064,50061,000Net Assets¥ mln

128,094

94,84994,77473,233Unitholders’ Capital¥ mln

124,610

92,16892,16871,706

Number of Units Issued

Unit

229,970

184,650

184,650

148,600

Net Assets per Unit¥

557,004

513,672

513,266

492,820

¥ mln

3,484

2,681

2,606

1,526

Cash Distribution per Unit¥

15,15014,520

14,114

10,273of which Cash Distribution of Profits¥

15,15014,520

14,114

10,273of which Cash Distribution of Excess-Profits

¥

—

—

—

—

Return on Assets (Note 1)

%

1.5

1.4

1.6

1.1

Total Cash Distribution(Annualized) (Note 2)

%

3.1

2.8

3.1

2.8

Return on Equity (Note 3)

%

2.7

2.8

2.8

2.1

(Annualized) (Note 2)

%

5.4

5.7

5.6

5.2

Capital Adequacy Ratio (Note 4)

%

53.6

45.6

54.6

49.5

Loan to Value Ratio (Note 5)

%

38.9

46.4

37.2

41.2

Number of Business Days

Day

184

181

184

268

Payout Ratio (Note 6)

%

99.9

99.9

100.0

99.9

Number of Properties Held

Bldg.

23

19

18

15

Total Leasable Floor Spacem2

261,428.50

236,904.67

194,673.65

180,793.50

357

287

277

264

%

97.3

98.1

94.4

93.3
666

Number of Tenants
Occupancy Rate
Depreciation

¥ mln

1,229

1,023

949

Capital Expenditures

¥ mln

1,016

484

511

22

Net Operating Income (Note 7)

¥ mln

6,125

4,970

4,451

3,350

Funds From Operations (FFO) (Note 8)

¥ mln

4,727

3,719

3,555

2,193

¥

20,55920,142

19,255

14,757

FFO per Unit (Note 9)

Note 1: Return on Assets = Current Profits / {(Total Assets at the Beginning of Term + Total Assets at the End of Term) / 2} x 100
The Total Asset at the beginning of the 1st fiscal period is an aggregated amount of the total assets as of December 5, 2003, effectively the first day when the investment
was commenced, and the funds borrowed on December 8, 2003.
As for the 2nd and the 4th fiscal periods, the Total Assets are time-adjusted due to the additional issues of investment units.
Note 2: ROA and ROE are annualised using the following number of business days. 1st period (from December 5, 2003 to April 30, 2004): 148 days, 2nd period: 184 days, 3rd period: 181 days, 4th period: 184 days.
Note 3: Return on Equity = Net Income / {(Unitholders’ Equity at the Beginning of Term + Unitholders’ Equity at the End of Term) / 2} x 100
The Unitholders’ Equity at the Beginning of the 1st Fiscal Period is an aggregated amount of Unitholders’ Equity as of December 5, 2003, effectively the first day when theinvestment was commenced.
As for the 2nd and the 4th Fiscal Periods, Unitholders’ Equity is time-adjusted due to the additional issues of investment units.
Note 4: Capital Adequacy Ratio = Net Assets / Total Assets x 100
Note 5: Loan to Value Ratio = Interest Bearing Debt / Total Assets x 100
Note 6: Rounded off to the first decimal place
Note 7: NOI = Rental Business Revenue - Rental Business Expenses + Depreciation
Note 8: FFO = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs
Note 9: FFO per Unit = FFO / Number of Units Issued

16

2. OUTLINE OF INVESTMENTS IN THE FOURTH FISCAL PERIODThe Company, incorporated on August 7, 2003 under the Investment Trust Law, listed the unit certificates (code number 8959) in theReal Estate Investment Trust (REIT) Market of the Tokyo Stock Exchange on December 4, 2003. 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 thispolicy, we have invested in properties mostly for office use in 3 major metropolitan areas and other major cities, or in securities
backed by such properties.
Note: The Law Concerning Investment Trust and Investment Corporation (Law No. 198 of 1951) are referred to as the “Investment Trust Law” hereinafter.
The “unit certificates” are the securities issued by the Company and are referred to as the “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 term “properties” is defined to include leasehold and superficies.
The term “real estate, etc.” refers to those assets defined in Section 27, Paragraph 1, Article (1) and (2), and the term “real estate-related securities” refers to those assets
defined in Section 27, Paragraph 1, Article (3) respectively of The Articles of Incorporation of the Company.
“Real estate, etc.” and “real estate-related securities” are collectively referred to as the “real estate-related assets” hereinafter.
The real estates and underlying real estates of the real estate-related assets are collectively referred to as the “investment properties” or “objects”.

(1) Market Environments(a) Office Leasing Market
Reflecting the general recovery in the domestic economy, the office leasing market did see some improvement. As corporate
performances picked up, the market in the Tokyo Central Area became more active with increased demands from companies
seeking better efficiency and convenience in order to consolidate or expand their businesses. Consequently, the occupancy rateof those properties with attractive features improved along with an increase in their rent.
In areas other than Tokyo Central Area, the level of rent was yet to be improved, but in several cities, the occupancy rate has
already increased.
Overall however, although we could observe several signs of improvement in limited areas, the general market
environments remained tough particularly for those buildings with mild competitiveness in terms of location, floor space and basic
building features. The trend towards bipolarisation of the level of rent and occupancy rate has continued.
(b) Real Estate Trading Market
Taking advantage of the improvement in general economic circumstances, yet trying to further restore financial soundness andprepare themselves for the asset-impairment accounting method to be introduced, a number of corporations were seen
putting their assets onto the property market. In addition, the so-called bulk sales by subsidiaries of financial institutions
continued to clear up their balance sheets. The volume of sales by private funds to lock in profits also increased. Supply in thereal estate market thus remained high. However, good properties of relatively large-scale were rarely offered in the market as
they tended to be held continuously.
Demand also remained high, as keen-eyed investors such as pension funds were in an ever more aggressive pursuit ofbetter investment opportunities, and this in turn made it extremely difficult to find attractive properties particularly in Tokyo
Central Area. The private funds and J-REITs also continued to be active.
Note: The “private funds” herewith is defined as an accumulation of money of a limited number of private investors, or other form of assets acquired by such accumulatedmoney.

(2) Status of Investment for the 4th Fiscal Period
To comply with the basic policy of acquiring only such properties as would generate stable cash flow, the company has invested inproperties with strong competitiveness both in terms of location and basic features to ensure stable revenue over the mid-to-longterm.
Having proactively collected information and carefully investigated a number of opportunities brought to us, we had thus decided
to acquire the following four properties during the 4th fiscal period ending October 31, 2005. They were: Asahi Seimei Yokohama
Nishiguchi Building (May 2005, Nishi-ku, Yokohama City, ¥5,050 million, Beneficial interest in real estate trust), Kawasaki Higashiguchi
Sanshin Building (June 2005, Kawasaki-ku, Kawasaki City, ¥9,500 million, Beneficial interest in real estate trust), Toshin Tameike
Building (September 2005, Minato-ku, Tokyo, ¥7,400 million, Beneficial interest in real estate trust), Yanagibashi Sanshin Building(September 2005, Nakamura-ku, Nagoya City, ¥3,550 million, Beneficial interest in real estate trust).
As a result of their acquisition, the entirety of the investment properties (the “portfolio” hereinafter) of the Company as at the endof the 4th fiscal period included 23 buildings totalling ¥210,100 million at the acquisition price, which was about double the size ofwhat it used to be at the time of initial listing in December 2003.
Turning the eye to asset management, we are proud to be able to report that the average occupancy rate was maintained at as
high as above 97% throughout the 4th period. We have also conducted various refurbishment and renovation works not only to keep
up but also further enhance the competitiveness of the properties with a view to increase revenues over the mid-to-long term.
Note: The “Beneficial interest in real estate trust” means a beneficial interest arising from a trust in which real estates are the primary underlying assets.

17

(3) Status of Funding
During the 4th fiscal period ending October 31, 2005, the Company has raised ¥32,400 million through issuance (public issue and thirdparty allotment) of additional investment units for the second time so that we could make further investments and build up a more
solid financial base simultaneously. As 45,320 units have been issued this time, the total number of units issued has become 229,970
and counted for the total unitholders’ capital of ¥124,610 million.
On the debt side, we have made a prepayment before maturity of ¥3,500 million out of the funds that were raised through theabove-mentioned issuance of investment units. After a careful analysis of components of the current interest bearing debts, we haveexecuted debts of ¥14,000 million based on a Commitment Line Agreement, and ¥5,000 million based on a Term Loan Agreement tofinance acquisition of the above-mentioned four properties. As a result of these financial operations, the outstanding interest-bearing
debts as at the close of the 4th fiscal period was ¥93,000 million.
We have also diversified the sources of funding by completing the shelf registration in September 2005, which in turn enabled us
to issue the investment corporation bonds more timely. The established limit of shelf registration is ¥100,000 million.

3. STATUS OF CAPITAL
Please find below changes of the number of units issued and unitholders’ capital.
Number of Units Issued (Unit)

Unitholders’ Capital (¥ mln)

Date

Type of Issue

New Issue

Balance

New Issue

Balance

NoteAug. 7, 2003
Dec. 4, 2003
May 19, 2004
Jun. 16, 2004
May 1, 2005
May 24, 2005

Initial Private Placement
Public Offering
Public Offering
Third-party Allotment
Public Offering
Third-party Allotment

400
148,200
35,0001,050
44,0001,320

400
148,600
183,600
184,650
228,650
229,970200
71,506
19,866595
31,496944

200
71,706
91,572
92,168
123,665
124,610(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)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 debts.
Note 4: Third-party allotment to Nomura Securities 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 debts.
Note 6: Third-party allotment to Nomura Securities at the offer price of ¥715,837 following the public offering on May 1, 2005.

[Changes in price at the Tokyo Stock Exchange]
Please find below changes in price of the Company’s investment units listed on the J-REIT section of the Tokyo Stock Exchange.

High
Low

(¥)
(¥)

4th FP

3rd FP

2nd FP

1st FP

Ending Oct. 2005

Ending Apr. 2005

Ending Oct. 2004

Ending Apr. 2004

850,000
748,000

798,000
678,000

779,000
591,000

715,000
505,000

4. RECORDS OF CASH DISTRIBUTION
In order for the maximum amount of cash distribution to be treated as losses, subject to the provisions set forth in Article 67-15 of
the Special Taxation Measures Law, we have decided to distribute almost the entire amount of the Retained Earnings as at the endof this period and any amount less than one yen (¥1) shall be disregarded. The amount of cash distribution per unit was ¥15,150
rounding off the fraction to unit.

Retained Earnings
Accumulated Earnings
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)

18(¥000)(¥000)(¥000)(¥)(¥000)(¥)(¥000)(¥)

4th FP(May 1, 2005 Oct. 31, 2005)

3rd FP(Nov. 1, 2004 Apr. 30, 2005)

2nd FP(May 1, 2004 Oct. 31, 2004)

1st FP(Aug. 7, 2003 Apr. 30, 2004)

3,484,171
126
3,484,045(15,150)
3,484,045(15,150)–(–)

2,681,225
107
2,681,118(14,520)
2,681,118(14,520)–(–)

2,606,196
46
2,606,150(14,114)2,606,150(14,114)–(–)

1,526,651
83
1,526,567(10,273)
1,526,567(10,273)–(–)

5. INVESTMENT POLICY AND ISSUES TO BE ATTENDED IN FUTURE(1) Investment Environments
As we expect corporations to continue looking for larger spaces in new buildings reflecting the upturn of business, the rent levels ofproperties satisfying the tenant’s such needs will increase, particularly in the Tokyo Central Area. The rent levels in the Vicinity ofTokyo and Other Cities are also expected to start rising gradually as occupancy rates improve.
However, the tendency towards bipolarization will intensify as the tenant’s needs become more focused on those buildings ingood location with the most up-to-date features.
As for the demand-supply conditions in the real estate trading market, we expect to see the supply coming continuously fromgeneral corporations and private funds disposing their assets for various reasons. On the other hand, acquisition of attractive
properties in large cities will continue to highly competitive as private funds and J-REITs will aggressively be seeking those properties.
(2) Investment Policy and Issues to Be Attended
With such environments in mind, the Company will employ the following investment policies to ensure stable revenue from, andsteady growth of, the portfolio over the mid-to-long term.
(a) Enlargement of Portfolio by Acquisition of New Properties
We will aim at increasing the revenue by expanding the size of the portfolio up to ¥500 billion in the medium term. The larger the
scale of the portfolio, the easier it will be to promote further diversification of investment, which in turn will decrease the potential
fluctuations in revenue, and enable us to control the cost of management and / or administration more effectively.
We do not think it wise to engage in overly heated competition in acquiring investment objects. In order for us to make rightinvestments in properties of good value, we need to obtain information early about objects offered in the market, and conduct anin-depth due diligence to assess the potential risks involved in such investments. To make this protocol function and increase thetrading opportunities for us, we will improve our own information-gathering capacity in co-operation with other companies of
Nomura Real Estate group. By combining the professional know-how such as market research and engineering organically, we
believe we can strengthen our ability to appraise the properties and establish further creditworthiness in market making.
In making an investment decision, we will adhere to strict rules to ensure that the new object will bring stable revenues tothe entire portfolio in the light of mid-to-long term perspective.
Note: Nomura Real Estate group includes Nomura Real Estate Development Co., Ltd., Nomura Real Estate Holdings Co., Ltd. and its consolidated subsidiaries, but
excludes Nomura Real Estate Asset Management Co., Ltd., which is an asset management company.

(b) Property Management in a Mid-to-Long Term View
We will make it one of our priorities to satisfy the requirements of existing tenants. We will make full use of our information
resources organically to market potential tenants, and proactively introduce them to most suitable properties we have to offer.
We believe that this in turn will contribute to maintaining and sustaining stable occupancy rate and level of rents over the midto-long term.
By putting the know-how of Nomura Real Estate group of companies together, we seek to design the most suitablespecifications of the way to manage and maintain each property in the most cost-effective way, which in turn will ensurestable inflow of revenues.
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 theircompetitiveness.
(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; in other words, we will seek to continuously keep the LTV rate low, to use more longterm funding at fixed rates, to diversify the repayment dates, and to increase the number of institutions we borrow funds.
We will closely monitor the conditions of financial markets, and will carefully deliberate and choose the best means offunding such as through usages of commitment lines, and issuance of investment corporation bonds (by way of public offeringand private placement) from a wide range of available sources of funding to ensure a well-balanced structure of interest
bearing debts.
Note: LTV means Loan to Value, a ratio of interest bearing debts over the total assets.

19

6. MATERIAL FACTS AFTER THE END OF THE FOURTH FISCAL PERIOD
The significant post-balance sheet facts that arose after the end of October 2005 were as follows.
(1) Issue of Investment Corporation Bonds
Based on the resolution of the Board of Directors adopted on September 29, 2005, the Company issued the following bonds on
November 28, 2005, that is, after the end of the fiscal period on October 31, 2005. These bonds were issued under the shelfregistration scheme filed on September 29, 2005.

Name of Investment Corporation Bonds

Nomura Real Estate Office Fund, Inc. Third Series Uninsured
Investment Corporation Bonds(Ranking Pari Passu among the Specified Investment Corporation
Bonds) (the “Third Series Bonds”)

Total Amount Issued¥10 billion

Issue Price¥100 per par value of ¥100

Redemption Price¥100 per par value of ¥100

Interest Rate

1.19% p.a.

Security / Guarantee

None

Redemption Date

November 29, 2010 (5-year bond)Interest Dates

May 28 and November 28 each year

Use of Proceeds

To acquire the after-mentioned four properties, including related
expenditures, and to partly repay the existing debts.

Name of Investment Corporation Bonds

Nomura Real Estate Office Fund, Inc. Fourth Series Uninsured
Investment Corporation Bonds(Ranking Pari Passu among the Specified Investment Corporation
Bonds) (the “Fourth Series Bonds”)

Total Amount Issued¥10 billion

Issue Price¥100 per par value of ¥100

Redemption Price¥100 per par value of ¥100

Interest Rate

2.05% p.a.

Security / Guarantee

None

Redemption Date

November 30, 2015 (10-year bond)Interest Dates

May 28 and November 28 each year

Use of Proceeds

To acquire the after-mentioned four properties, including related
expenditures, and to partly repay the existing debts.

Both of the Third Series Bonds and the Fourth Series Bonds have obtained the following rating as of November 11, 2005.
Rating Company

20

RatingRating and Investment Information, Inc.

A+

Standard & Poor’s Ratings Services

A

Moody’s Investors Service, Inc.

A3

(Reference - newly acquired four properties)
The company acquired the following buildings after the end of the 4th fiscal period on October 31, 2005. Outline of these properties
on the date of acquisition are as follows.
Name
Type of Asset

Nishi-Shinjuku Showa Building
Beneficial interest in real estate trust
1-13-16 Nishi-Shinjuku, Shinjuku-ku,
Lot Number (Note 1)
Tokyo and 5 other lots
Location (Note 1)
1-13-12 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Structure (Note 1)
RC
Floor (Note 1)
B2 / 11F
Site Area (Note 1)
1,101.49 m2 (the entire area of the building site)
5,858.26 m2
Floor Space (Note 1)(The aggregate of exclusively owned area)Land
Co-ownership (Note 2)
Type of Ownership
Building
Compartmentalized Ownership
Date of Completion (Note 1) April 23, 1982
Property Management
Nomura Real Estate Development Co., Ltd.
Number of Tenants
20
Leasable Floor
5,648.67 m2
Occupancy Rate
100.0%
Acquisition Price¥8,800 million
November 30, 2005
Contract Date
(Trade of beneficial interest agreed)

Sendai Chowa Building
Beneficial interest in real estate trust2-1-2 Ichiban-cho, Aoba-ku, Sendai City,
Miyagi2-1-2 Ichiban-cho, Aoba-ku, Sendai City, Miyagi
SRC
B2 / 11F (Note 3)
2,321.61 m2
12,977.45 m2
Land
Ownership
Building
Ownership
July 2, 1968
The Dai-Ichi Building Co., Ltd.
26
6,165.70 m2
93.0 %¥3,200 million
November 30, 2005
(Trade of beneficial interest agreed)

November 30, 2005
(Beneficial interest transferred)
YK JOFI Nishi-Shinjuku
Own capital, issuance of investment corporation
bonds and debts

November 30, 2005
(Beneficial interest transferred)
YK J. N. Investment
Own capital, issuance of investment corporation
bonds and debts

Osaka Chowa Building
Beneficial interest in real estate trust
3-15-8 Kawara-machi, Chuo-ku, Osaka City,
Osaka and 5 other lots

Hiroshima Chowa Building
Beneficial interest in real estate trust
1-17 Tate-machi, Naka-ku, Hiroshima City,
Hiroshima and 4 other lots

3-5-7 Kawara-machi, Chuo-ku, Osaka City,
Osaka
Structure (Note 1)
SRC
Floor (Note 1)
B2 / 10F
Site Area (Note 1)
2,366.99 m2
Floor Space (Note 1)
21,007.98 m2
Land
Ownership
Type of Ownership
Building
Ownership
Date of Completion (Note 1) April 1, 1974
Property Management
Nomura Real Estate Development Co., Ltd.
Number of Tenants
18
Leasable Floor
12,240.88 m2
Occupancy Rate
98.9%
Acquisition Price¥12,900 million
November 30, 2005
Contract Date
(Trade of beneficial interest agreed)

1-20 Tate-machi, Naka-ku, Hiroshima City,
Hiroshima
SRC
B2 / 12F (Note 4)
925.55 m2
8,206.91 m2
Land
Ownership
Building
Ownership
November 28, 1966
Nomura Real Estate Development Co., Ltd.
21
4,334.75 m2
78.4 %¥2,100 million
November 30, 2005
(Trade of beneficial interest agreed)

Acquisition Date
Seller
Source of Funds
Name
Type of Asset
Lot Number (Note 1)
Location (Note1)

Acquisition Date
Seller
Source of Funds

November 30, 2005
(Beneficial interest transferred)
YK J. N. Investment
Own capital, issuance of investment corporation
bonds and debts

November 30, 2005
(Beneficial interest transferred)
YK J. N. Investment
Own capital, issuance of investment corporation
bonds and debts

Note 1: Taken from the registry book.
Note 2: Our proportion of co-ownership is 8,425 / 10,000.
Note 3: According to notification of confirmation based on the Building Standards Law, the structure is SRC B2 / 8F with 3F penthouse.
Note 4: According to notification of confirmation based on the Building Standards Law, the structure is SRC B2 / 9F with 3F penthouse.

21Profile of the Company
1. STATUS OF UNITHOLDERS’ CAPITAL

Maximum number of units allowed to issue
Total number of units issued
Total amount of unitholders’ capital
Total number of unitholders¥mln

End of 4th FP(Oct. 31, 2005)

End of 3rd FP(Apr. 30, 2005)

End of 2nd FP(Oct. 31, 2004)

End of 1st FP(Apr. 30, 2004)

2,000,000
229,970
124,610
15,8842,000,000
184,650
92,168
13,9542,000,000
184,650
92,16815,5222,000,000
184,600
71,706
14,658

2. MAJOR UNITHOLDERS
The major unitholders as of October 31, 2005 were as follows.

Name

Number ofUnits Held

Address

Portion in
the Total
Units Issued (%)

Japan Trustee Service Bank, Ltd. (Trust Accounts) 1-8-11 Harumi, Chuo-ku, Tokyo

22,964

9.99

Nomura Real Estate Development Co., Ltd.

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

11,500

5.00

The Master Trust Bank of Japan, Ltd.
(Trust Accounts)

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

8,518

3.70

Trust and Custody Services Bank, Ltd.
(Securities Trust Accounts)

1-8-12 Harumi, Chuo-ku, Tokyo

8,303

3.61

Nikko Citi Trust and Banking Corporation(Trust Accounts)

2-3-14 Higashi-Shinagawa, Shinagawa-ku, Tokyo

7,960

3.46

Kawasaki Gakuen

577 Matsushima, Kurashiki City, Okayama

6,000

2.61

American Life Insurance Company GAL

2-3-14 Higashi-Shinagawa, Shinagawa-ku, Tokyo

5,309

2.31

The Gibraltar Life Insurance Co., Ltd.
(Ordinary Accounts and others)

1-8-11 Harumi, Chuo-ku, Tokyo

4,811

2.09

National Mutual Insurance Federation ofAgricultural Cooperatives (Zen-Kyo-Ren)

2-7-9 Hirakawa-cho, Chiyoda-ku, Tokyo

3,993

1.74

The Chugoku Bank, Ltd.

1-15-20 Marunouchi, Okayama City, Okayama

Total

3,479

1.51

82,837

36.02

3. BREAKDOWN OF UNITHOLDERS(1) Number of Unitholders
End of 4th Fiscal Period (Oct. 31, 2005)

Private and Other Investors

End of 3rd Fiscal Period (Apr. 30, 2005)

15,28496.2%

13,44996.4%

Financial Institutions(Including Securities Companies)

200

1.3%

187

1.3%

Other Domestic Corporate Investors

258

1.6%

261

1.9%

Foreign Corporate Investors, etc.

142

0.9%

57

0.4%

15,884100.0%

13,954100.0%

Total(2) Number of Units per Unitholders

End of 4th Fiscal Period (Oct. 31, 2005)

Private and Other Investors

40,78817.7%

38,258

20.7%

Financial Institutions(Including Securities Companies)

140,665

61.2%

113,311

61.4%

Other Domestic Corporate Investors

25,621

11.1%

24,00213.0%

Foreign Corporate Investors, etc.

22,896

10.0%

9,079

4.9%

229,970

100.0%

184,650

100.0%Total

22

End of 3rd Fiscal Period (Apr. 30, 2005)

4. EXECUTIVE DIRECTORS AND SUPERVISORY DIRECTORS (Note 1)
Title

Name

Executive Director

Yasutoshi Akiyama(Note 2)President and Representative Director,
Nomura Real Estate Asset Management Co., Ltd.

Other Major Title(s)Executive Director

Isamu Okada

President and Representative Director,
Yokohama Business Park (YBP) Heating and Cooling Supply Co., Ltd.

Supervisory Director

Yutaka Hori

Representative Lawyer, Hori Yutaka Law Office

Supervisory Director

Yoshiharu Hayakawa

Representative, Kasumi Empowerment Research InstituteSupervisory Director

Shuhei Yoshida

Representative Lawyer, Yoshida Shuhei Law Office

Supervisory Director

Eitoku Aikawa

Executive Advisor, Fair Appraisers, K.K.

Note 1: No Executive Directors or Supervisory Directors were in possession of the Company’s investment units either under their own or other person’s name. Supervisory
Directors might serve as directors of other companies, but there are no mutual business interests whatsoever between such companies and the Company.
Note 2: Yasutoshi Akiyama resigned the office on March 31, 2006.

5. TRUSTEES, CUSTODIAN AND ADMINISTRATORSBusiness

Investment Trust Manager(Asset Management Company)

Company

Nomura Real Estate Asset Management Co., Ltd.

Custodian of Assets

Mitsubishi UFJ Trust and Banking Corporation

Administrative Agent (Underwriter)(Note 1)

Administrative Agent (Transfer of Title)

Mitsubishi UFJ Trust and Banking Corporation

Administrative Agent (Accounting)

Mitsubishi UFJ Trust and Banking Corporation

Administrative Agent(Investment Corporation Bonds)

UFJ Bank, Ltd., Nomura Securities Co., Ltd., Mizuho Securities Co., Ltd. (Note 2)

Note 1: On April 18, 2005, the Company entered into underwriting agreements with Nomura Securities, the lead manager, Merrill Lynch Japan Securities, Nikko Citigroup, Mizuho
Securities, UBS Securities Japan, Daiwa Securities SMBC, Mitsubishi Securities (currently Mitsubishi UFJ Securities) and Cosmo Securities in association with the public
offering of the units. The underwriting agreement was terminated in its entirety upon completion of the pay-in on May 1, 2005.
Note 2: On November 11, 2005, the Company entered into general administrative agreements with Sumitomo Mitsui Banking Corporation, Nomura Securities, Nikko Citigroup and
Mizuho Securities in association with the issue of the Third Series Bonds and the Fourth Series Bonds. A particular section of the agreement relating to the administrationof offering was finished upon completion of the pay-in on November 28, 2005.

23

Status of Investment Assets of the Company
1. COMPOSITION OF ASSETS
End of 4th Fiscal Period (October 31, 2005)
Type of Assets

Total Value (¥ mln)
(Note 1)

End of 3rd Fiscal Period (April 30, 2005)

Proportion (%)(Note 2)

Total Value (¥ mln)
(Note 1)

Proportion (%)(Note 2)

Real Estate Held in TrustTokyo Central Area

154,301

64.5

146,658

70.5

Vicinity of Tokyo

35,245

14.7

20,531

9.9

Other Cities

22,0199.2

18,216

8.8

Subtotal

211,566

88.5

185,406

89.1

Cash, Deposits and Other Assets

27,50011.5

22,59710.9

239,067

100.0

208,003

100.0

Grand Total

Note 1: Total value is taken from the balance sheet (the entrusted assets represent the value after depreciation.).
Note 2: The percentage figures may not necessarily add up to 100.0 due to rounding to the nearest first decimal place.

2. MAJOR COMPONENTS OF INVESTMENT ASSETS
The major components of assets (top 10 largest properties by book value at the end of the fiscal period) were as follows.

Name of Building

Book Value(¥ mln)Leasable Area(m2)

Leased Area(m2)

Occupancy
Rate (%)

Primary Use

Shinjuku Nomura Bldg.

38,79331,804.67

30,967.08

97.4

20.1

OfficeJAL Bldg.

34,08142,084.11

42,084.11

100.0(Note 1)

OfficeItopia Nihonbashi-Honcho Bldg.

20,51819,233.28

17,701.04

92.0

9.5

OfficeTennozu Park Side Bldg.

14,37818,051.61

18,051.61

100.0

9.2

OfficeNOF Shibuya Koen Dori Bldg.

12,6163,420.16

3,420.16

100.0

4.3

OfficeIsuzu Shiba Bldg.

10,255

8,165.10

7,675.73

94.0

3.8

OfficeKawasaki Higashiguchi Sanshin Bldg.

9,775

8,284.03

8,039.72

97.1

2.5

OfficeToshin Tameike Bldg.

7,646

4,766.33

4,766.33

100.0

0.5

OfficeTT Landic Toyo-cho Bldg.

7,297

18,218.17

18,218.17

100.0(Note 1)

OfficeNomura Osaka Bldg.
Total

6,383

16,977.79

15,851.80

93.4

5.6

Office161,748

171,005.25

166,775.75

97.5

69.0 (Note 2)–

Note 1: Not disclosed due to compelling reasons.
Note 2: Despite the above restrictions, the total include the proportions of JAL Building and TT Landic Toyo-cho Building.

24

Proportion ofIncome of
All Rental
Business (%)

3. DETAILS OF PORTFOLIO PROPERTIESName of Building

Location(Postal Address)

Tokyo Central Area
Shinjuku Nomura Bldg. (Note 2)

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

JAL Bldg.

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

Itopia Nihonbashi-Honcho Bldg.

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

Tennozu Park Side Bldg.

2-5-8 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Shibuya Koen Dori Bldg.

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

Isuzu Shiba Bldg.

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

Toshin Tameike Bldg.

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

Shinagawa NF Bldg.

1-2-5 Higashi-Shinagawa, Shinagawa-ku, Tokyo

Surugadai Plaza Bldg.

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

Kanda Iwamoto-cho Tosei Bldg.

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

Seiwa Shinjuku Bldg.

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

Type of OwnershipBeneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust

SubtotalVicinity of TokyoTT Landic Toyo-cho Bldg.

1-6-35 Shinsuna, Koto-ku, Tokyo

Technoport Kamata B Ridge

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

Faret Tachikawa Center Square

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

Kawasaki Higashiguchi
Sanshin Bldg.
Asahi Seimei Yokohama
Nishiguchi Bldg.
Shin-Yokohama Nikko Bldg.

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

Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust
Beneficial interest inreal estate trust

Subtotal
Other Cities
Utsunomiya NF Bldg.
Yanagibashi Sanshin Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
Kobe Kaigan Bldg.
Nomura Hiroshima Bldg.
Subtotal
Grand total

Beneficial interest inreal estate trust
1-16-28 Meieki-Minami, Nakamura-ku, Nagoya City, Aichi Beneficial interest inreal estate trust
Beneficial interest in
1-8-15 Azuchi-cho, Chuo-ku, Osaka City, Osakareal estate trust
Beneficial interest in
1-4-4 Awaza, Nishi-ku, Osaka City, Osakareal estate trust
Beneficial interest in
3 Kaigan-dori, Chuo-ku, Kobe City, Hyogo (Note 3)
real estate trust
Beneficial interest in
2-23 Tate-machi, Naka-ku, Hiroshima City, Hiroshima
real estate trust

Appraisal Valueat the Endof the Fiscal
Period (¥ mln)
(Note 1)

41,00030,94021,40016,20014,00010,300
7,400
5,740
5,410
3,340
2,410
158,140

7,950
6,870
3,900
9,590
5,560
3,680
37,5502-1-1 Baba-dori, Utsunomiya City, Tochigi

3,190
3,560
6,950
4,600
3,310
2,080
23,690219,380

Note 1: ”Appraisal Value at the end of the fiscal period” stands for the prices appraised by real estate appraisers in accordance with the provisions of the Company’s Articles ofIncorporation and the “Rules Concerning Balance Sheet, Income Statement, Asset Management Report, Calculation of Cash Distribution and Annexed Statement For
Investment Corporations” (Decree No. 134 issued by the General Administrative Agency of the Cabinet in 2000). The appraisal prices are calculated by Tanizawa Sogo
Appraisal Co., Ltd., Daiwa Real Estate Appraisal, Co., Ltd., HIRO and REAS Network, Inc., Chuo Real Estate Appraisal Co., Ltd. or Appraisal Firm A-Square Co., Ltd. using
the capitalization approach, with October 31, 2005 being taken as the point of evaluation.
Note 2: The Company’s stake in this property is co-ownership of 50.1% of the entire building. The value at the end of the term accounted solely for the co-ownership.
Note 3: The numbers that appear in the address of the properties are the lot numbers as postal addresses of these properties have not been allocated yet.

25

4th Fiscal Period (May 1, 2005 – October 31, 2005)

3rd Fiscal Period (November 1, 2004 – April 30, 2005)
Occupancy
Rate at theEnd of the
Period (%)

RentalRevenues
during the
Period (¥ mln)

Proportionof Incomeof All Rental
Business (%)

86
1
12
14
3
11
–
5
1
8
5

97.5
100.0
98.3
100.0
100.0
100.0
–
100.0
100.0
100.0
100.0

23.9
(Note 2)
11.1
10.8
3.3
4.2
–
3.6
(Note 2)
1.9
1.4

65.8

146

99.2

1,701
(Note 2)
785
767
238
298
–
254
(Note 2)
133
101
4,687
(Note 3)(Note 2)
4.9
2.6
2.5
2.6
(Note 2)

1
12
16
–
–
3

100.0
95.7
100.0
–
–
100.0

18.2

32

98.8

(Note 2)
394
226
–
–
(Note 2)
1,076
(Note 3)(Note 2)
5.6
3.2
–
–
(Note 2)98.8

(Note 2)
422
225
214
225
(Note 2)
1,576
(Note 3)

26
6
25
16
28
16

98.8
87.1
93.4
95.3
87.5
96.4

169
21
483
307
192
207

2.0
0.2
5.6
3.6
2.2
2.4

26
–
23
17
28
15

96.1
–
92.5
97.1
91.1
93.9

169
–
463
312
190
205

2.4
–
6.5
4.4
2.7
2.9

Subtotal

117

93.6

1,381

16.0

109

94.1

1,341

18.9

Grand Total

357

97.3

8,641
(Note 3)

100.0

287

98.1

7,106
(Note 3)100.0

Name of Building

Number of Tenants
at the End of
the Period(Note 1)

Tokyo Central Area
Shinjuku Nomura Bldg.
JAL Bldg.
Itopia Nihonbashi-Honcho Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen Dori Bldg.
Isuzu Shiba Bldg.
Toshin Tameike Bldg.
Shinagawa NF Bldg.
Surugadai Plaza Bldg.
Kanda Iwamoto-cho Tosei Bldg.
Seiwa Shinjuku Bldg.
SubtotalVicinity of TokyoTT Landic Toyo-cho Bldg.
Technoport Kamata B Ridge
Faret Tachikawa Center Square
Kawasaki Higashiguchi Sanshin Bldg.
Asahi Seimei Yokohama Nishiguchi Bldg.
Shin-Yokohama Nikko Bldg.
Subtotal
Other Cities
Utsunomiya NF Bldg.
Yanagibashi Sanshin Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
Kobe Kaigan Bldg.
Nomura Hiroshima Bldg.

Occupancy
Rate at theEnd of the
Period (%)

RentalRevenues
during the
Period (¥ mln)

Proportionof Incomeof All Rental
Business (%)

85
1
12
14
3
10
12
5
1
8
5

97.4
100.0
92.0
100.0
100.0
94.0
100.0
100.0
100.0
100.0
100.0

20.1
(Note 2)
9.5
9.2
4.3
3.8
0.5
3.0
(Note 2)
1.7
1.2

156

98.0

1,740
(Note 2)
824
792
367
327
40
259
(Note 2)
149
103
5,682
(Note 3)

1
13
16
24
27
3

100.0
99.9
95.3
97.1
97.3
100.0

84

Number of Tenants
at the End of
the Period(Note 1)

66.0

15.2

Note 1: 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. 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 the same tenant leased floor spaces in more than one building, such spaces are counted separately foreach building as if they are leased by different tenants. As for Shinjuku Nomura Building, the number of tenants in the entire building is taken into account.
Note 2: Not disclosed due to compelling reasons.
Note 3: Total numbers include those not disclosed due to compelling reasons.

26

4. MAJOR TENANTS (Top ten largest tenants by leased floor space)
TenantIndustry

Flagship Properties Inc.
XYMAX Corporation
Fujitsu Limited

Real Estate
Real EstateElectronics

Nomura Real Estate Development Co., Ltd.

Real Estate

Nomura Facilities Co., Ltd.

Real Estate

Fuji Xerox Office Supply Co., Ltd.
Ito-Yokado Co., Ltd.
Corporate Software Ltd.
Daiken Corporation
Crosscat Co., Ltd.
Total

Wholesale
RetailIT
Other
IT

Property

JAL Bldg.
TT Landic Toyo-cho Bldg.
Technoport Kamata B Ridge
Faret Tachikawa Center SquareShin-Yokohama Nikko Bldg.
Nomura Osaka Bldg.
Shinjuku Nomura Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
Shinjuku Nomura Bldg.
Utsunomiya NF Bldg.
Nomura Hiroshima Bldg.
Surugadai Plaza Bldg.
Technoport Kamata B Ridge
Tennozu Park Side Bldg.
Itopia Nihonbashi-Honcho Bldg.
Shinagawa NF Bldg.

Termination of Lease
Contract (Note 1)

Leased Floor
Space (m2)Mar. 31, 2015
Nov. 30, 2009
Mar. 31, 2007
Dec. 31, 2005
Sep. 30, 2006
Dec. 31, 2006
Nov. 30, 2013
Nov. 30, 2013
Nov. 30, 2013
May 31, 2008
Dec. 9, 2005
Mar. 31, 2007
Apr. 30, 2007
Oct. 31, 2005
Feb. 28, 2007
Feb. 14, 2007
Feb. 28, 2007

42,084.11
18,218.17
3,699.38
501.35
6,547.74
809.153,601.65
345.37
1,266.19
1,206.55
1,072.69
2,834.48
4,160.94
3,652.38
3,598.83
3,221.93
2,375.87
99,196.79

Ratio in Total Leased
Space (%) (Note 2)

16.5
7.2
1.5
0.2
2.6
0.3
1.4
0.1
0.5
0.5
0.4
1.1
1.6
1.4
1.4
1.3
0.9
39.0

Note 1: Where more than one lease contract exist, the lease with the largest space is taken to represent the date of termination of the lease contract.
Note 2: The sum of the figures of each column may not necessarily add up to the figure in the Total due to rounding to the nearest first decimal place.

5. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS
The outstanding amount and current price of the specified transactions as at the end of the 4th fiscal period were as follows.

Segment

Type of Transaction

rate swap
Transaction other than market transaction Interest(Receiving variable rate, paying fixed rate)
Total

Contract Amount (¥ mln) (Note 1)of which maturity islonger than a year (Note 1)

Current
Price (¥ mln)
(Note 2)39,50039,500235

39,50039,500235

Note 1: Notional principal is described in relation to interest rate swap agreement.
Note 2: Evaluated at the price provided by the counterparty based on the then market rate.

6. STATUS OF THE OTHER ASSETS
Other than the beneficial interest in real estate trust listed in “3. DETAILS OF PORTFOLIO PROPERTIES”, the Company had noother assets to integrate as at the end of the 4th fiscal period.

27

Capital Expenditures
1. SCHEDULE OF CAPITAL EXPENDITURES
The table below lists major capital expenditures in conjunction with refurbishment and/or renewal works scheduled for the future (finishedin part) on the properties held as at the end of the 4th fiscal period. The cost of works includes items to be charged as “expenses” inconnection with accounting procedure.

Name and Location of Building

Purposes

Period ofWorks

Cost of Works (¥ mln) (Note 1)
AmountAmount
Total
Paid during
Paid before
Amountthe 4ththe 4thof Work
PeriodPeriodShinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Refurbishment on thebasement shopping floor andcommon space (Increase inrevenues) (Note 2)Aug. 2005 –Mar. 2006

450

64

64

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Refurbishment on thecommon space of thestandard floors (Increase inrevenues) (Note 2)

May 2005 –Sep. 2006

435

182

182

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Renewal of sanitary piping(Increase in quality) (Note 2)

Nov. 2005 –Mar. 2008

177

–

2

Itopia Nihonbashi-Honcho Bldg.
(Chuo-ku, Tokyo)

Renewal of heat pipes andAHU (Increase in quality)(Note 2)

Jun. 2005 –Nov. 2006

170

–

–

Shinagawa NF Bldg.
(Shinagawa-ku, Tokyo)

Renewal of the wall-throughunits (Increase in quality)

Apr. 2006 –May 2008

200

–

–

NOF Shibuya Koen Dori Bldg.
(Shibuya-ku, Tokyo)

Refurbishment of the main
entrance (Increase inrevenues)

Feb. 2006 –Mar. 2006

25

–

–

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

Increase of electric capacity(Increase in revenues)

Feb. 2006 –Mar. 2006

20

–

–

Shin-Yokohama Nikko Bldg.
(Kohoku-ku, Yokohama City)

Renewal of accumulator for
air conditioning (Increase inquality)Jan. 2006 –Jan. 2006

50

–

–

Nomura Osaka Bldg.
(Chuo-ku, Osaka City)

Turning the common spacebarrier-free (Increase inrevenues)

Dec. 2005 –Feb. 2006

22

–

–

Nomura Yotsubashi Bldg.
(Nishi-ku, Osaka City)

Renewal of the out-side wallsealing (Renewal) (Note 3)Aug. 2005 –Nov. 2005

56

–

–

Nomura Yotsubashi Bldg.
(Nishi-ku, Osaka City)

Renewal of the central
monitoring system (Increasein quality)

Jun. 2006 –Aug. 2006

40

–

–

Note 1: As for Nomura Shinjuku Building, the posted amount of cost represents 50.1%, our proportion of co-ownership, of the total cost of refurbishment of the entire building.
Note 2: These works had already started as of the date of this report.
Note 3: This work had already been completed as of the date of this report.

28

2. CAPITAL EXPENDITURES DURING THE FOURTH FISCAL PERIOD
The table below lists capital expenditures during the 4th fiscal period in conjunction with the major renovation works. During the 4th
fiscal period, we have conducted engineering works totalling ¥1,229 million, capital expenditures of ¥1,016 million and repairing
expenses of ¥213 million combined all together.
Cost of
Works (¥mln)

Purposes

Period of Works

Itopia Nihonbashi-Honcho Bldg.
(Chuo-ku, Tokyo)

Renewal of heat piping (Renewal)

Sep. 2005 –Oct. 200534

NOF Shibuya Koen Dori Bldg.
(Shibuya-ku, Tokyo)

Refurbishment on the basement andground floors (Increase in revenues)

Jan. 2005 –May 2005

254

Nomura Osaka Bldg.
(Chuo-ku, Osaka City)

Refurbishment of the entrance(Increase in revenues)

Jun. 2005 –Sep. 2005

28

Nomura Hiroshima Bldg.
(Naka-ku, Hiroshima City)

Seismic retrofitting (Increase in quality)

Jan. 2005 –Jul. 2005

199

Asahi Seimei Yokohama Nishiguchi Bldg.
(Nishi-ku, Yokohama City)

Refurbishment of the standard floors andentrance (Increase in revenues)

Aug. 2005 –Sep. 2005

56

Other buildings

Renewal of features

May 2005 –Oct. 2005

442

Name and Location of Building

Total

1,016

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

Balance Brought forward from the Previous Period
Amount Reserved during the Period
Amount Used during the Period
Balance Brought forward to the Next Period

4th FP(May 1, 2005 Oct. 31, 2005)¥mln

3rd FP(Nov. 1, 2004 Apr. 30, 2005)¥mln

2nd FP(May 1, 2004 Oct. 31, 2004)¥mln

1st FP(Aug. 7, 2003 Apr. 30, 2004)
¥mln

833
528
307
1,054

548
524
239
833

184
487
124
548

–
218
33
184

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT
4th Fiscal Period(May 1, 2005 - Oct. 31, 2005)¥000

Asset Management Fees (Note)of which Management Fee I
of which Management Fee IIof which Management Fee III
Custodian Fee
General Administrative Fee
Directors’ Compensation
Other Expenses
Total

629,689
380,141
248,927620
23,33055,3238,400
68,129784,872

3th Fiscal Period(Nov. 1, 2004 – Apr. 30, 2005)¥000

576,611301,208
199,788
75,614
20,53546,866
4,800
69,094
717,907

Note: In the Asset Management Agreement between the Company and the Asset Management Company, there is no provision for the so-called 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.

29

2. STATUS OF DEBT
The status of debt from the financial institutions as at the end of the 4th fiscal period is as shown in the schedule below.

Financial Institutions
Short-term Debt
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Sumitomo Trust & Banking Co., Ltd.
The Norinchukin BankThe Chuo Mitsui Trust and Banking Company, Limited
The Nomura Trust and Banking Co., Ltd.
The Hachijuni Bank, Ltd.
The Hiroshima Bank, Ltd.
The Iyo Bank, Ltd.
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Sumitomo Trust & Banking Co., Ltd.
The Norinchukin BankThe Yamanashi Chuo Bank, Ltd.
The Chugoku Bank, Ltd.
The Bank of Fukuoka, Ltd.
National Mutual Insurance
Federation of Agricultural Cooperatives
Aozora Bank, Ltd.
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Sumitomo Trust & Banking Co., Ltd.
The Norinchukin Bank
Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Sumitomo Trust & Banking Co., Ltd.
SubtotalLong-term Debt to Be Repaid within a Year
The Bank of Tokyo-Mitsubishi, Ltd.
The Sumitomo Trust & Banking Co., Ltd.
The Nomura Trust and Banking Co., Ltd.
The Chiba Bank, Ltd.
The Hachijuni Bank, Ltd.
Subtotal
Total Short-term Debt
Long-term Debt
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
The Sumitomo Trust & Banking Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Chuo Mitsui Trust and Banking Company, Limited
The Nomura Trust and Banking Co., Ltd.
The Chiba Bank, Ltd.
The Hiroshima Bank, Ltd.
The Iyo Bank, Ltd.
The Dai-Ichi Mutual Life Insurance Company
Meiji Yasuda Life Insurance Company
The Bank of Tokyo-Mitsubishi, Ltd.
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi, Ltd.
The Chiba Bank, Ltd.
The Hachijuni Bank, Ltd.
The Hiroshima Bank, Ltd.
The Keiyo Bank, Ltd.
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
The Chuo Mitsui Trust and Banking Company, Limited
The Iyo Bank, Ltd.
The Dai-Ichi Mutual Life Insurance Company
UFJ Bank Limited
Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
The Iyo Bank, Ltd.
The Norinchukin Bank
Mitsui Life Insurance Co., Ltd.
Taiyo Life Insurance Company
Daido Life Insurance Company
Mitsui Sumitomo Insurance Co., Ltd.
The Norinchukin Bank
Mitsui Life Insurance Co., Ltd.
Development Bank of Japan
Total Long-term Debt
Grand Total

Date of
Borrowing

Mar. 172005

Nov. 29
2004

Jun. 292005

Jun. 292005

Sep. 28
2005

Mar. 172005

Feb. 26
2004

Dec. 82003

Dec. 82003
Feb. 28, 2005

Dec. 82004

Feb. 26
2004
Feb. 26, 2004
Dec. 82003

Dec. 82003
Feb. 26, 2004
Feb. 26, 2004
Mar. 17, 2005

Outstanding as at Outstanding as at
Averagethe End of 4th the End of Previous Interest Rate
Period (¥000)
Period (¥000)(%) (Note 1)

–
–
–
–
–
–
–
–
–
–
–
750,000
750,000
600,000
300,000
300,000
300,000
1,000,000
1,000,000
1,000,000
1,000,000

4,750,000
4,750,000
3,800,000
1,900,000
1,900,000
1,900,000
1,500,000
500,000
500,000
500,000
500,000
–
–
–
–
–
–
–
–
–
–

1,000,000
2,750,000
2,750,000
2,200,000
1,100,000
1,100,000
1,100,000
1,000,000
500,000
500,000
21,000,000

–
–
–
–
–
–
–
1,000,000
500,000
500,000
24,500,000

1,000,000
2,500,000
2,000,000
1,500,000
500,000
7,500,000
28,500,000

1,000,000
2,500,000
2,000,000
1,500,000
500,000
7,500,000
32,000,000

2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
1,000,000
500,000
1,000,000
2,000,000
1,000,000
2,000,000
1,000,000
1,000,000
3,000,000
500,000
1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
500,000
2,500,000
1,000,000
500,000
3,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
3,000,000
1,000,000
1,000,000
54,500,000
83,000,000

2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
1,000,000
500,000
1,000,000
2,000,000
1,000,000
2,000,000
1,000,000
1,000,000
3,000,000
500,000
1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
500,000
2,500,000
1,000,000
500,000
3,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
3,000,000
1,000,000
1,000,000
54,500,000
86,500,000

Date of
Repayment

0.48833

May 17
2005

0.47833

Nov. 292005

0.49083

Nov. 292005

0.36583

Dec. 92005

0.49000

Dec. 282005

0.47000

Feb. 262006

0.60000

Feb. 262006

1.14500

Dec. 82006

1.04500

Dec. 8 2006

0.65000

Aug. 28, 2007

1.00625

Dec. 82007

1.22500

Feb. 26
2008

1.05250

Feb. 26, 2008

1.66750

Dec. 82008

1.51625

Dec. 82008

1.77500
1.50625
1.75250

Feb. 26, 2010
Feb. 26, 2010
Feb. 26, 2013

Method of
Repayment

Use ofProceeds

Balloonpayment(Note 2)

Unsecured /Unguaranteed

Balloonpayment(Note 2)

Unsecured /Unguaranteed

Balloonpayment(Note 2)

Unsecured /Unguaranteed

Description

Note 1 : The average interest rate is weighted by the balance of each debt as at the end of the term and rounded to the nearest fifth decimal place. As for the debts hedged byinterest rate swaps, the swapped interest rates are used to calculate the weighted average of interest.
Note 2 : The use of debts is to purchase the beneficial interest in real estate trust.

30

3. STATUS OF INVESTMENT CORPORATION BONDS
The status of the investment corporation bonds issued as at the end of the 4th fiscal period was as follows.
Balance as at theBalance as at the End of Previous
End of 4th Fiscal Fiscal Period
Issue Date Period (¥ mln)(¥ mln)Name of Bonds

First Series Unsecured Investment
Corporation Bonds

Mar. 16
2005

5,000

5,000

Second Series Unsecured
Investment Corporation Bonds

Mar. 16
2005

5,000

5,000

10,00010,000Total

Interest
Rate(%)

Method ofMaturity Date Repayment

Use ofProceeds

Description

1.85

Mar. 16
2015

Balloonpayment (Note 1) (Note 2)

2.47

Mar. 16
2020

Balloonpayment (Note 1) (Note 2)

Note 1: The use of proceeds were to purchase the Beneficial interest in real estate trust.
Note 2: These bonds rank pari passu among these investment corporation bonds issued by the Company and may be transfered to qualified institutional investors only.

Trading during the Fiscal Period
1. TRADING OF REAL ESTATES, ASSET BACKED SECURITIES, ETC.
Acquisition
Date

Type of Asset

Name of Property

Beneficial
Interest in Real
Estate Trust

Asahi Seimei Yokohama Nishiguchi Bldg.
Kawasaki Higashiguchi Sanshin Bldg.
Toshin Tameike Bldg.
Yanagibashi Sanshin Bldg.

May 12, 2005
Jun. 30, 2005
Sep. 29, 2005
Sep. 29, 2005

Total

Disposition
Date

Price
(¥ mln)Book Value(¥ mln)P/L(¥ mln)

5,050
9,500
7,400
3,550

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

25,500––––Price (Note)(¥ mln)Note: The term “Price” refers to the acquisition price described in the Transfer Agreement of Beneficial Interest, and does not include other expenses relevant to acquisition of theproperty such as intermediary fees, taxes and duties.

2. TRADING OF OTHER ASSETS
Other than the above-mentioned properties and asset-backed securities, the Company’s assets are mostly comprised of direct bankdeposits and bank deposits in trust.

3. SURVEY OF PRICES OF THE SPECIAL ASSETS(1) Real Estates
Acquisition or
Disposition of
Properties

Acquisition
Total

Type of Asset

Beneficial
interest in realestate trust

Name of Property

Asahi Seimei Yokohama Nishiguchi Bldg.
Kawasaki Higashiguchi Sanshin Bldg.
Toshin Tameike Bldg.
Yanagibashi Sanshin Bldg.

Acquisition
Date

May 12, 2005
Jun. 30, 2005
Sep. 29, 2005
Sep. 29, 2005

Acquisition
Price (¥ mln)
(Note 1)

Surveyed
Value (¥ mln)
(Note 2)

5,050
9,500
7,400
3,550

5,320
9,570
7,400
3,560

25,50025,850Note 1: The term “Acquisition Price” refers to the price described in the Transfer Agreement of Beneficial Interest, and does not include other expenses relevant to acquisition of
the property such as intermediary fees, taxes and duties.
Note 2: “Surveyed value” was given by Ernst and Young ShinNihon at the time of acquisition in accordance with the guidance under “Price Survey of Specified Assets Held by
Investment Trusts and Investment Corporations”, Industry Audit Committee Report No. 23 issued by The Japanese Institute of Certified Public Accountants. The Company
has received detailed reports including but not limited to the location and lot number to identify these properties.

(2) Other Assets
Certain transactions the price of which shall be surveyed pursuant to Article 34-4 of the Investment Trust Law but which are notlisted on “(1) Real Estates” above have been surveyed by Ernst and Young ShinNihon. There were no such transactions to have
had to be surveyed during May 1, 2005 and Oct. 31, 2005.

31

4. TRANSACTION WITH RELATED PARTIES(1) Transactions
Table of transactions with related parties for the 4th fiscal period is as follows.

Amount of Transaction

Purchase (¥ mln)

Sale (¥ mln)

25,500of which purchase from related parties
5,050 (19.8%)–
of which sales to interested parties– ( –%)

5,050–

Related PartyYK Creo Investment Second(2) Fees paid to related parties
Table of fees paid to interested parties for the 4th fiscal period is as follows.
Amount Paid (A)(¥000)

Contract-out Fees

649,536

Property Management Fees

183,771

Other Expenses

59,792

Amount Paid (B)
Related Parties (Payee)

Nomura Building Management Co., Ltd.
YK Flagship Properties
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.

(¥000)(B) / (A)416,460
916
136,837
10,043
12,73524,901

64.1%
0.1%
74.5%
5.5%
21.3%
41.6%

Note 1: Related parties refer to those bodies which have business interests in the Asset Management Company, with which the Company has an Asset Management Agreement
under Article 20 of Enforcement Order of Investment Trust Law. Such bodies for the 4th fiscal period were YK Creo Investment Second, Nomura Building Management
Co., Ltd., YK Flagship Properties, and Nomura Real Estate Development Co., Ltd.
Note 2: In addition to the Property Management Agreement, the Company has entrusted Nomura Building Management Co., Ltd. with daily maintenance of building and equipments, which is listed as “Contract-out Fees”.
Note 3: Besides the above, the Company has made the following payments for repair works (thousands of Yen).
Paid to Nomura Real Estate Development Co., Ltd.
¥33,659
Paid to Nomura Building Management Co., Ltd.
¥375,673

The management fees paid to the Property Management Companies, which are related parties, are broken down as follows.
Name of Building

Shinjuku Nomura Bldg.
JAL Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen Dori Bldg.
Toshin Tameike Bldg.
Shinagawa NF Bldg.
Surugadai Plaza Bldg.
Seiwa Shinjuku Bldg.
Technoport Kamata B Ridge
Faret Tachikawa Center Square
Asahi Seimei Yokohama Nishiguchi Bldg.
Shin-Yokohama Nikko Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
Nomura Hiroshima Bldg.
TT Landic Toyo-cho Bldg.
Kawasaki Higashiguchi Sanshin Bldg.
Utsunomiya NF Bldg.
Yanagibashi Sanshin Bldg.

Property Management Company

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 Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.

Property Management Fees(¥000) (Note 1) (Note 2)

39,5882,590
18,447
5,663
726
7,325
6,668
2,458
11,618
4,616
5,016
4,204
12,311
9,014
6,583
2,201
2,586
4,820
435

Note 1: The property management fee is an aggregated sum of the basic fee and the incentive fee.
Note 2: Fees for the daily maintenance of building and equipments entrusted to Nomura Building Management Co., Ltd. are not included here.

5. STATUS OF BUSINESS WITH THE ASSET MANAGEMENT COMPANY OVER ITS SUBSIDIARY BUSINESSThere is nothing to be reported under this subject as Nomura Real Estate Asset Management Co., Ltd., the asset managementcompany of the Company, is not in any subsidiary business.

32

Other Information
1. NOTICE
The major conclusions and/or revisions of contract the Board of Directors approved were as follows.
Date of Approval

AgendaDescription

Aug. 22, 2005

Change of Transfer Agent, andamendment to provisions of theUnit Handling Regulations.

Following the merger between UFJ Trust Bank, Ltd., which was thetransfer agent, and Mitsubishi Trust and Banking Corporation on October 1,
2005, necessary amendments were made to relevant provisions of theUnit Handling Regulations concerning the transfer agent, place of businessand the notifying agents.

Sep. 29, 2005

Issue of Investment Corporation
Bonds (comprehensive resolution)

Following the comprehensive resolution approving issuance of investment
corporation bonds up to ¥100 billion over the period of Oct. 7, 2005 andOct. 6, 2006, the Board has commissioned the Executive Directors todecide on the matters concerning trust and administrative agreements.

The General Unitholders’ Meeting was held on July 26, 2005. The major articles approved in the Meeting were as follows.
AgendaDescription

Partial revision of
the Articles ofIncorporation

Partial revisions were made to the Articles of Incorporation as follows.
· Deletion of articles that are no longer necessary and subsequent revision of verbiage· Addition of an article to exempt directors from liability· Clarification of criteria of investable property· Amendments to reflect the tax reform

Appointing Two
Executive Directors

Mr. Yasutoshi Akiyama and Mr. Isamu Okada were appointed as Executive Directors for the period of two
years from August 8, 2005.

Appointing FourSupervisory Directors

Mr. Yutaka Hori, Mr. Yoshiharu Hayakawa, Mr. Shuhei Yoshida and Mr. Eitoku Aikawa were appointed as
Supervisory Directors for the period of two years from August 8, 2005.

2. OTHER MATTERS
Unless otherwise mentioned, the amounts were truncated and the rates were rounded to the nearest amount described, for the
purpose of this report.

33

Balance Sheets
Thousands of Yen
As of October 31, 2005

As of April 30, 2005

Current Assets:
Cash and bank deposits
Rental receivables
Consumption taxes refundable
Other current assets
Total current assets¥ 26,716,571
138,049
3,741
124,995
26,983,356¥ 21,367,552
115,899
399,403138,896
22,021,750

Property and Equipment, at Cost:Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
SubtotalLess accumulated depreciation
Net property and equipment

147,100,441
67,546,391
506,894
31,528249,385
215,434,639(3,867,761)
211,566,878

128,077,282
59,491,138
458,346
11,2397,558
188,045,563(2,638,809)
185,406,754

1,989
210,780
8,885
235,962
59,905¥ 239,067,755

2,080
10,7809,610
478,528
74,275¥ 208,003,777

ASSETS

Investments and Other Assets:
Intangible assets
Deposits
Long-term prepaid expenses
Deferred hedge Iosses
Deferred investment corporation bonds issuance costs
Total Assets

Note:accompanying
The
In the Asset Management
notes to financial
Agreement
statements
betweenare anthe
integralCompany
part andof these
its asset
statements.
management company,there is no provision for the so-called 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.

34

Thousands of Yen
As of October 31, 2005

As of April 30, 2005

LIABILITIESCurrent Liabilities:
Trade accounts payable
Other accounts payable
Short-term debt
Accrued expenses
Accrued income taxes
Rent received in advance
Other current liabilities
Total current liabilities¥

529,402625,125
28,500,000
291,070982
1,439,846
1,412
31,387,837¥

318,385
508,602
32,000,000
285,235
1,018
1,282,244
130
34,395,614

Long-term Liabilities:
Investment corporation bonds
Long-term debt
Derivative liabilities
Deposits from tenants
Total long-term liabilities

10,000,000
54,500,000
235,962
14,849,571
79,585,533

10,000,000
54,500,000
478,528
13,779,930
78,758,458

Total Liabilities

110,973,370

113,154,072

124,610,213
3,484,172
128,094,385

92,168,480
2,681,225
94,849,705¥ 239,067,755¥ 208,003,777

UNITHOLDERS’ EQUITY
Unitholders’ capital
Retained earnings
Total unitholders’ equity
Total Liabilities and Unitholders’ Equity

Note:accompanying
The
In the Asset Management
notes to financial
Agreement
statements
betweenare anthe
integralCompany
part andof these
its asset
statements.
management company,there is no provision for the so-called 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.

35

Statements of Income and Retained Earnings
For the period
from May 1, 2005
to October 31, 2005

Thousands of Yen
For the period
from November 1, 2004
to April 30, 2005

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues

Operating Expenses:
Real estate rental expenses
Asset management fees
Administrative service and custodian fees
Other operating expenses¥

8,641,349
8,641,349¥

7,106,162
7,106,162

3,745,324
629,690
78,65376,5294,530,196

3,159,292
576,61267,40273,894
3,877,200

4,111,153

3,228,962

131
9,321
9,452

116
6,702
6,818

412,438
48,785108,000
14,85542,7708,683
635,531

389,040
97,614
26,63014,85525,425553,564

3,485,074

2,682,216

Income Taxes:
Current
Deferred

1,008
1

1,041
(4)

Net Income

3,484,065

2,681,179

Retained Earnings brought forward

107

46

Retained Earnings at end of period¥ 3,484,172¥ 2,681,225

Operating Profits

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Other non-operating revenues

Non-Operating Expenses:
Interest expenses
Loan arrangement fees
Interest expenses on investment corporation bonds
Amortization of investment corporation bonds issuance costs
New investment units issuance costs
Other non-operating expenses

Income before Income Taxes

Note:accompanying
The
In the Asset Management
notes to financial
Agreement
statements
betweenare anthe
integralCompany
part andof these
its asset
statements.
management company,there is no provision for the so-called 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.

36

Statements of Changes in Unitholders' Equity
Units

Balance as of October 31, 2004
184,650
Cash distribution paid
Net income
Balance as of April 30, 2005
184,650
Cash distribution paid
Additional issuance of new investment units through public offering on May 1, 2005
44,000Additional issuance of new investment units through third-party allotment on May 24, 2005
1,320
Net income
Balance as of October 31, 2005
229,970

Thousands of Yen
Changes in Equity¥ 94,774,676(2,606,150)
2,681,179
94,849,705(2,681,118)
31,496,828
944,905
3,484,065¥ 128,094,385

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

37

Statements of Cash Flows
For the period
from May 1, 2005
to October 31, 2005

Thousands of Yen
For the period
from November 1, 2004
to April 30, 2005

Cash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of long-term prepaid expenses
Amortization of investment corporation bonds issuance costs
Interest income
Interest expenses
Decrease (Increase) in rental receivables
Decrease (Increase) in consumption taxes refundable
Increase (Decrease) in trade accounts payable
Increase (Decrease) in other accounts payable
Increase (Decrease) in accrued consumption taxes
Increase (Decrease) in rent received in advance
Increase (Decrease) in deposits received from tenants
Changes in other current assets/liabilities
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities¥ 3,485,074
1,229,070
725
14,855(131)
520,438(22,150)
395,662
211,017
15,543
157,602
1,281
13,9006,022,886
131(514,602)(1,044)
5,507,371¥ 2,682,216
1,023,262
604
14,855(116)
415,670
13,068(399,403)(4,090)(64,582)(18,600)
240,569(910)(66,743)3,835,800
116(361,106)(962)
3,473,848

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of intangible assets
Payments of deposits received from tenants
Proceeds from deposits received from tenants
Payments of long-term prepaid expenses
Net cash used in investing activities(27,286,702)(761,173)
1,630,815(26,417,060)(34,556,713)(98)(347,061)
2,275,868(10,214)(32,638,218)

Cash Flows from Financing Activities
Proceeds from short-term debt
Repayments of short-term debt
Proceeds from long-term debt
Proceeds from investment corporation bonds
Payments of investment corporation bonds issuance costs
Proceeds from issuance of new investment units
Distributions to unitholders
Net cash provided by financing activities

19,000,000(22,500,000)
32,441,732(2,683,024)
26,258,708

21,000,000(10,500,000)
11,500,000
10,000,000(89,130)(2,596,397)
29,314,473

Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of period
Cash and Cash Equivalents at end of period

5,349,019
21,367,552¥ 26,716,571

150,10321,217,449¥ 21,367,552

Note:accompanying
The
In the Asset Management
notes to financial
Agreement
statements
betweenare anthe
integralCompany
part andof these
its asset
statements.
management company,there is no provision for the so-called 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.

38

Notes to Financial Statements
1. Organizations
Nomura Real Estate Office Fund (the “Fund”) is a real estate investment corporation formed to own and invest primarily in officeproperties. The Fund is externally managed by a licensed asset management company, Nomura Real Estate Asset Management
Co., Ltd. (“NREAM”). NREAM is a wholly owned subsidiary of Nomura Real Estate Holdings Co., Ltd.
On August 7, 2003, the Fund was incorporated under the Law Concerning Investment Trusts and Investment Corporations (the“Investment Trust Law”) of Japan. On December 4, 2003, the Fund was listed on the Tokyo Stock Exchange as the 9th J-REIT andstarted operations on the following day. As of the end of October 2005, the Fund owned a portfolio of 23 office properties
containing an aggregate of approximately 261,428.50 square meters of leasable area and leased office space to 357 tenants.

2. Basis of presentation
The Fund 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 Investment Trust Law of Japan, the JapaneseCommercial Code, the Securities and Exchange Law of Japan and related regulations, which are different in certain respects as tothe application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Fund, which were prepared inaccordance with Japanese GAAP and were presented in the Securities Report of the Fund 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, thenotes to financial statements include information that might not be required under Japanese GAAP but is presented herein as
additional information. Amounts have been rounded to the nearest thousand of Yen in the accompanying financial statements andtheir notes whereas amounts have been truncated in the Japanese financial statements prepared in accordance with Japanese
GAAP.
The Fund’s fiscal period is a six-month period which ends at the end of April and October of each year, respectively. The Funddoes not prepare consolidated financial statements because it has no subsidiaries.

3. Summary of significant accounting policies
Cash 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 insignificant risk of market value fluctuation, and with a maturity of three months or lesswhen purchased.
Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, lessaccumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as
below;
Buildings
3 - 65 years
Structures
2 - 45 years
Machinery and equipments
3 - 15 years
Tools, furniture and fixtures
3 - 15 years
Intangible assets
Intangible assets are amortized on a straight-line method.
Deferred charges
Deferred charges include new investment units issuance costs and investment corporation bonds issuance costs. The entire
costs associated with the issuance of new investment units are expensed as incurred. Investment corporation bonds
issuance costs are amortized over a period of three years, comprised of six fiscal periods, with an equal amount in each fiscal
period.
Accounting treatment of beneficial interests in real estate
All the assets and liabilities held in trust, to which the real estates in possession of the Fund were entrusted, and all theearnings and expenses incurred from the trust are properly reflected on the balance sheets and income statements,
respectively.

39

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 andtheir amounts are to be reasonably estimated.
Property related taxes
Property related taxes including property taxes, urban planning taxes and depreciable property taxes imposed during the fiscal
period are charged as rental expenses.
On the other hand, the Fund paid the amount equivalent to the property related taxes to the sellers applicable to theperiod since acquisition and capitalized as part of the costs to acquire such properties or beneficial interests in real estate.
The capitalized property related taxes amounted to ¥199,778 thousand for the 4th fiscal period.
Income taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax
bases of assets and liabilities using the statutory tax rates.
Consumption taxes
Consumption taxes received and paid are not included in the statements of income.
Derivative Financial Instruments
The Fund utilizes interest rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure
to changes in interest rates. The Fund deferred recognition of gains or losses resulting from changes in fair value of interest
rate swap contracts which meet the criteria for deferral hedging accounting.

4. Schedule of property and equipment
Property and equipment at October 31, 2005 and April 30, 2005 consisted of the following:Thousands of Yen
As of October 31, 2005
Book Value

Acquisition Costs

Book Value¥ 147,100,441¥ 147,100,441¥ 128,077,282¥ 128,077,282

Buildings and structures in trust
Accumulated depreciation

67,546,391(3,775,705)

63,770,686

59,491,138(2,578,486)

56,912,652

Machinery and equipment in trust
Accumulated depreciation

506,894(89,506)

417,388458,346(59,234)

399,112Tools, furniture and fixtures in trust
Accumulated depreciation

31,528(2,550)28,978

11,239(1,089)10,150Land in trust

Construction in progress in trust
Total

40

As of April 30, 2005

Acquisition Costs

249,385

249,385

7,558

7,558

¥ 211,566,878¥ 211,566,878¥ 185,406,754¥ 185,406,754

5. Short-term debt
Short-term debt at October 31, 2005 and April 30, 2005 consisted of the following:
As of October 31, 2005
Amount(thousandsof Yen)Unsecured loans from banks due on May 17, 2005

As of April 30, 2005

Weightedaverageinterest rate–

Amount(thousandsof Yen)Weightedaverageinterest rate–

¥ 19,000,000

0.48833%

Unsecured loans from banks due on November 29, 2005––

3,500,000

0.47833%

Unsecured loans from banks due on November 29, 2005

¥ 3,000,000

0.49083%––

Unsecured loans from banks due on December 9, 2005

5,000,000

0.36583%––

Unsecured loans from banks due on December 28, 2005

11,000,000

0.49000%––

Unsecured loans from banks due on February 26, 2006

2,000,000

0.47000%

2,000,000

0.47000%

7,500,000

0.60000%

7,500,000

0.60000%

Unsecured loans from banks due on February 26, 2006
Total

¥ 28,500,000¥ 32,000,000

The Fund entered into ¥20,000 million credit facilities in the form of commitment lines with the six financial institutions. The
unused amount of such credit facilities was ¥6,000 million and ¥1,000 million as of October 31, 2005 and April 30, 2005,
respectively.

6. Investment corporation bonds
Details of investment corporation bonds outstanding are briefly as follows:
As of October 31, 2005
Amount(thousandsof Yen)Unsecured bonds due on March 16, 2015
Unsecured bonds due on March 16, 2020
Total

Weightedaverageinterest rate

¥ 5,000,000

1.85000%

5,000,000

2.47000%¥ 10,000,000

As of April 30, 2005
Amount(thousandsof Yen)Weightedaverageinterest rate

¥ 5,000,000

1.85000%

5,000,000

2.47000%¥ 10,000,000

7. Long-term debt
Long-term debt at October 31, 2005 and April 30, 2005 consisted of the following:
As of October 31, 2005
Amount(thousandsof Yen)Weightedaverageinterest rate

As of April 30, 2005
Amount(thousandsof Yen)Weightedaverageinterest rate

Unsecured loans from banks due on December 8, 2006

¥ 12,500,000

1.14500%¥ 12,500,000

1.14500%

Unsecured loans from banks due on December 8, 2006

3,000,000

1.04500%

3,000,000

1.04500%

Unsecured loans from insurance companies due on
August 28, 2007

2,000,000

0.65000%

2,000,000

0.65000%

Unsecured loans from a bank due on December 8, 2007

8,500,000

1.00625%8,500,000

1.00625%

Unsecured loans from banks due on February 26, 2008

7,500,000

1.22500%

7,500,000

1.22500%

Unsecured loans from an insurance company due on
February 26, 2008

3,000,000

1.05250%

3,000,000

1.05250%

Unsecured loans from banks due on December 8, 2008

8,000,000

1.66750%

8,000,000

1.66750%

Unsecured loans from insurance companies due on
December 8, 2008

5,000,000

1.51625%

5,000,000

1.51625%

Unsecured loans from a bank due on February 26, 2010

3,000,000

1.77500%

3,000,000

1.77500%

Unsecured loans from an insurance company due on
February 26, 2010

1,000,000

1.50625%

1,000,000

1.50625%

Unsecured loans from a bank due on February 26, 2013

1,000,000

1.75250%

1,000,000

1.75250%

Total¥ 54,500,000¥ 54,500,000

41

8. Unitholders' equity
The Fund issues only non-par value investment units in accordance with the Investment Trust Law of Japan. The entire amount of
the issue price of new units is designated as stated capital. The Fund is required to maintain net assets of at least ¥50,000 thousandas required by the Investment Trust Law of Japan.

9. Per unit information
The net asset value per unit as of October 31, 2005 and April 30, 2005 was ¥557,004 and ¥513,672, respectively. Net income perunit was ¥15,150 and ¥14,520 for the period ended October 31, 2005 and April 30, 2005, respectively.

10. Income taxes
The Fund, as an investment corporation, is subject to corporate income taxes at a regular statutory rate of approximately 40%.
However, the Fund may deduct dividend distributions paid to its unitholders from its taxable income amounts, provided therequirements are met under the Special Taxation Measure Law of Japan. Under this law, an investment corporation must meet anumber of tax requirements, including a requirement to distribute in excess of 90% of its distributable income for the fiscal period, inorder to deduct such amounts. If the investment 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 Fund distributed approximately 100% of its distributable income in the form of cash distributions totaling ¥3,484,046
thousand and ¥2,681,118 thousand for the period ended October 31, 2005 and April 30, 2005, respectively, such distributions weretreated as deductible distributions for purposes of corporate income taxes. The effective tax rate on the Fund's income was 0.03%
and 0.04% for the periods ended October 31, 2005 and April 30, 2005, respectively. The following summarizes the significant
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 May 1, 2005
to October 31, 2005

For the period
from November 1, 2004
to April 30, 2005

39.39%(39.38)0.02
0.03%

39.39%(39.37)0.02
0.04%

11. Breakdown of real estate rental revenues and expenses
Rental real estate revenues and expenses for the six month periods ended October 31, 2005 and April 30, 2005 consist of thefollowing:Thousands of Yen
For the period
from May 1, 2005
to October 31, 2005

For the period
from November 1, 2004
to April 30, 2005

¥ 8,641,349¥ 7,106,162

7,709,467

6,339,783

Rental revenues

6,138,529

4,890,847

Common area charges

1,570,938

1,448,936

Real estate rental revenues
Rental revenues

Non-Rental revenues

931,882

766,379

Parking revenues

156,428

135,004

Incidental income

707,783

562,230

Other miscellaneous revenues

67,671

69,145

3,745,324

3,159,292

Property management costs

649,670

658,655

Property management fees

183,772

152,919

Utilities expenses

711,509575,824

Property and other taxes

614,908

479,820

Real estate rental expenses

Casualty insurance

21,80920,582

Repairs and maintenance

213,372

110,900

1,229,041

1,023,299

Depreciation
Other rental expenses
Profits

42

121,243

137,293¥ 4,896,025¥ 3,946,870

12. Leases
The Fund, as lessor, has entered into leases whose fixed monthly rents are due in advance with lease term of generally two years
for office. The future minimum rental revenues under existing non-cancelable operating leases as of October 31, 2005 and April 30,
2005 are as follows:
Thousands of Yen
As of October 31, 2005

As of April 30, 2005

Due within one year

¥ 5,205,813¥ 5,800,774

Due after one year

18,492,717

20,715,972¥ 23,698,530¥ 26,516,746

Total

13. Derivatives and hedge accounting
The Fund has entered into interest rate swap contracts with several Japanese financial institutions to hedge its variable rate longterm debt obligations. The Fund utilizes interest rate swap contracts, which are derivative financial instruments, only for the purposeof mitigating future risks of fluctuations of interest rates, but does not enter into such transactions for speculative or trading
purposes. The Fund entered into such derivative transactions to hedge risk in accordance with its Articles of Incorporation and theestablished risk management policies of NREAM.
The following summarizes the notional amounts and the estimated fair value of the interest-related positions outstanding at
October 31, 2005 and April 30, 2005:
Thousands of Yen
Notional amount

Fair value

Unrealized gain (loss)

October 31, 2005
Interest rate swaps:
Receive/float and pay/fixed¥ 39,500,000¥ (235,962)¥ (235,962)

April 30, 2005
Interest rate swaps:
Receive/float and pay/fixed¥ 39,500,000¥ (478,528)¥ (478,528)

14. Significant subsequent events
Appropriation of retained earnings
On December 20, 2005, the board of Directors resolved to effect the payment of a cash distribution of ¥15,150 per share
aggregating ¥3,484,046 thousand to unitholders at the record date of October 31, 2005.
Issuance of investment corporation bonds
On November 28, 2005, the Fund issued investment corporation bonds in accordance with the following conditions.
(1) Nomura Real Estate Office Fund, Inc. Third Series Unsecured Investment Corporation Bonds
Aggregate amount¥10,000,000,000
Issue price¥100 per the face value of ¥100
Redemption value¥100 per the face value of ¥100
Interest rate
A fixed rate of 1.19%
Pledge and guarantee
Unsecured / unguaranteed
Redemption dateNovember 29, 2010
Interest payableMay 28 and November 28 in each year until the redemption date
Use of proceeds
Property acquisition and repayment of debt financing(2) Nomura Real Estate Office Fund, Inc. Fourth Series Unsecured Investment Corporation Bonds
Aggregate amount¥10,000,000,000
Issue price¥100 per the face value of ¥100
Redemption value¥100 per the face value of ¥100
Interest rate
A fixed rate of 2.05%
Pledge and guarantee
Unsecured / unguaranteed
Redemption dateNovember 30, 2015
Interest payableMay 28 and November 28 in each year until the redemption date
Use of proceeds
Property acquisition and repayment of debt financing

43

44

Business Structure

Unitholders' Meeting

Asset
Custodian Agent
Mitsubishi UFJ Trust andBanking Corporation

GeneralAdministrative Agent
Mitsubishi UFJ Trust andBanking Corporation,
and Others

Auditor

Nomura Office Fund
Asset Custody
Agreement

Ernst & Young ShinNihon

Administrative
AgencyAgreement

Nomura Real Estate
Office Fund, Inc.
Board of Directors’Meeting
Debt Financing /Issue of Investment
Corporation Bonds

Liabilities
Repayment of
Principal & Interest

Financial Instituions, etc /Investors of Investment
Corporation Bonds

Investment

Unitholders

Asset
Capital Investment

Rent Income
and Others

Equitytrading
Distribution

Office Buildings(Real Estate
Related Assets)

Property
Management

Property Management
Company
Nomura Real Estate
Development Co., Ltd.
Nomura Building Management
Co., Ltd.
ITOCHU Urban Community Ltd.
The Dai-ichi Building Co., Ltd.
IKOMA TBM K.K.

Unitholders

Property
Management
Agreement

Asset Management
Services Agreement

Market Research andOther Information Providers

Asset Management Company
Instructions forRents andManagement
RentalStrategies,
Plans ofRepairs, etc.

Property
Information

Nomura Real Estate
Asset Management Co.,Ltd.

Service
Agreement, etc.

Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate Urban
Net Co., Ltd.
Nomura Real Estate
Investment Management
Co., Ltd.

45

Profile of the Asset Management Company
PROFILE AND HISTORY OF INCORPORATION
Company:
Paid-up capital:
Shareholder:
Incorporation:

Nomura Real Estate Asset Management Co., Ltd.
¥300 million (as of March 31, 2005)
Nomura Real Estate Holdings Co., Ltd. (100%)January 24, 2003

PROCESS OF DECISION-MAKING
We have ensured transparency in the decision-making process by placing all agenda through the Compliance Committee, in which two
external members with professional experience sit.
AGENDA
Proposal

COMPLIANCE OFFICER
When compliance is satisfied

COMPLIANCES COMMITTEE
Major objectives of the Compliance Committee are:to ensure compliance with the laws and regulations applicable tothe proposed agenda,
to deliberate the contents of trade with the related parties,
to check the legal matters for the Investment Committee inmaking investment decisions.

INVESTMENT COMMITTEE
Investment Committee deliberates on such subjects as:
Formulation and revision of investment guidelines,
Selection of properties for investment,
Formulation and revision of investment planning for the fiscal year,
Policy making on material articles such as funding.

DECISION MAKING
The entire process of deliberation and final decision is reported.

COMPLIANCE COMMITTEEUSE OF INFORMATION NETWORK OF NOMURA REAL ESTATE GROUP
In order to maximize opportunity to invest in better properties, we have collected as much information as possible not only from the AssetManagement Company but also from other companies of Nomura Real Estate group as listed below.

Nomura Real Estate Office Fund, Inc.
Nomura Real Estate Asset Management Co., Ltd.

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Urban Net Co., Ltd.
Nomura Real Estate Investment Management Co., Ltd.

General Real Estate Market

46

Properties owned and developed by
Nomura Real Estate Urban Net andNomura Real Estate Development

Corporate Data

ProfileNomura Real Estate Office Fund, Inc. (referred to as “Nomura OfficeFund” or the “Company” hereafter) was listed on the Real Estate
Investment Trust Section of the Tokyo Stock Exchange on December 4,
2003.
Subject to the Law Concerning Investment Trusts and Investment
Corporations of Japan (referred to as the “Investment Trust Law”
hereafter), Nomura Office Fund invests mainly in real estate and otherspecified assets with a view to secure stable rent revenues and toensure steady portfolio growth over the medium- to long-term. Basedon this basic policy, Nomura Office Fund invests in real estates, usedprimarily for office, in three major urban areas and other large cities
including but not limited to the government-designated cities, as wellas trust beneficial interests in such real estates.
Nomura Real Estate Asset Management Co., Ltd. (referred to as“NREAM” or the “Asset Management Company” hereafter), a wholly
owned subsidiary of Nomura Real Estate Holdings Co., Ltd. is in chargeof asset management on behalf of Nomura Office Fund in accordancewith the basic investment policies as described above.
Through coordination with Nomura Real Estate Holdings Co., Ltd.
and other group companies, NREAM aims to secure stable rent
revenues from the portfolio and to ensure steady portfolio growth overthe medium- to long-term.

Contents
To Our Investors.......................................................................................... 1
Financial Highlights..................................................................................... 2
Portfolio Highlights ..................................................................................... 3
New Investments at the Fourth Fiscal Period ............................................ 4
Summary of Portfolio Properties ................................................................ 6
Location of Properties.................................................................................. 7
Property Details ........................................................................................... 8
Financial Section ........................................................................................ 15
Business Structure ......................................................................................45
Profile of the Asset Management Company ............................................ 46
Corporate Data ............................................................................. Back coverCorporate 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
Date of Incorporation
August 7, 2003
Stock Listing
Tokyo Stock Exchange (Securities Code: 8959)

corporations in Japan (so-called “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 incertain 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 the financial information contained herein.

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
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwaicho Chiyoda-ku,
Tokyo 100-0011, Japan

Fiscal Period
Six months ending on April 30 and October 31
Paid-in Capital¥124,610,212,840 (as of October 31, 2005)
Number of Units Issued
229,970 (as of October 31, 2005)

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
15,884 (as of October 31, 2005)

Disclaimer
This semiannual report includes translations of certain Japanese documents originally filed under the Securities andExchange Law of Japan. This report was prepared in English solely for the convenience of and reference by readers
outside Japan and should not be considered as a disclosure statement. The original Japanese documents always govern
the meaning and interpretation.
Estimates for Nomura Office Fund’s future operating results contained in this semiannual report are forward-looking
statements and are based on information then available to Nomura Office Fund and its asset management company andare subject to risks and uncertainties. Consequently, these projections should not be relied upon as the sole basis forevaluating Nomura Office Fund. Actual results may differ substantially from the projections depending on a number offactors.

In general, accounting principles and practices used by real estate investment

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, JapanNOMURA REAL ESTATE OFFICE FUND, INC.
Fourth Fiscal Period Semi-Annual Report

http://www.nre-of.co.jp/

Printed in Japan

Fourth Fiscal Period

Semi-Annual Report
May 1, 2005

October 31, 2005