Prospect Reit Investment Corporation

Prospect Reit Investment Corporation
Listed on the Tokyo Stock Exchange with the securities code 8969

Seventh Fiscal Period Results(August 1, 2008 to January 31, 2009)

March 13, 20091

Prospect Reit Investment Corporation
Disclaimer
This document contains a translation of the majority of the information provided in the Japanese material for thepresentation of seventh fiscal period results held on March 17, 2009 as well as some information provided in the Financial
Report (Kessan Tanshin) dated March 13, 2009, and others, with some updated data.
This English language document is provided solely for the convenience of and reference by non-Japanese investors, and is
not intended to constitute a disclosure document. The Japanese language presentation material should be referred to as theoriginal of this document. The English translation of legal, accounting, tax and business terms used herein may not precisely
convey the identical meaning of equivalent Japanese terms. With respect to any and all terms herein, including without
limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original
Japanese document and English translation contained herein, the original Japanese document will govern the meaning andinterpretation. Neither PRI, Prospect Reit Advisors, Co., Ltd. (“the Asset Management Company”) nor any of theirrespective directors, officers, employees, partners, shareholders, agents or affiliates will be responsible or liable for thecompleteness, appropriateness or accuracy of this English translation or any portion(s) of any document(s) translated into
English. No person has been authorized to give any information or make any representations other than those contained inthis document in relation to matters set out in this document, and if given or made, such information or representation mustnot be relied upon as having been authorized by PRI, Prospect Reit Advisors, Co., Ltd. or any of their respective directors,
officers, employees, partners, shareholders, agents or affiliates.
The financial statements of PRI have been prepared in accordance with generally accepted accounting principles in Japan(Japanese GAAP), which may materially differ in certain respects from generally accepted accounting principles in otherjurisdictions.
Many provisions within this document contain information that constitutes forward-looking statements. These
forward-looking statements are not a guarantee of future performance and involve risks and uncertainties. Therefore, actual
results may differ materially from those in the forward-looking statements as a result of various factors.
All rights are reserved. Unauthorized duplication and copy of this document and contents herein in any measures is strictly
prohibited.
Contact Information:
Investor Relations
Prospect Reit Advisors, Co., Ltd.
2-2-1, Marunouchi, Chiyoda-ku, Tokyo, 100-0005, Japan
ir@pra.co.jp

2

Prospect Reit Investment Corporation

Prospect Reit Investment Corporation("PRI" or "the Investment Corporation")
Representative: Takeo Nishiyoshi, Executive Officer
Address: 2-2-1 Marunouchi, Chiyoda-ku, Tokyo
Prospect Reit Investment Corporation is listed
as a Japanese Real Estate Investment Trust (J-REIT) on
the Tokyo Stock Exchange with the securities code 8969
(URL of English website http://www.prospect-reit.co.jp/en/index.html)
Planned date of submission of the Company Report (Yukashoken Hokokusho): April 22, 2009
Planned date of distribution payment commencement: April 15, 2009
(1) Operating Performance and Assets for the Fiscal Period Ended January 31, 2009
1) Operating Performance(Millions of yen rounded down unless otherwise stated)
Fiscal Period
Ended

Operating Revenues

Operating Income%%

Ordinary Income

Net Income%%

January 31, 2009

2,254

-9.8

902

-19.0

451

-36.6

448

-36.9

July 31, 2008

2,499

7.2

1,114

5.4

711

7.2

710

7.2

%
1.3
2.0

Ordinary Income toTotal Assets
%
0.6
1.0

Fiscal Period
Ended

Return on Net
AssetsNet Income per Unit
Yen
5,969
9,458

January 31, 2009
July 31, 2008

Ordinary Income toOperating Revenues
%
20.0
28.5

2) Distributions
Fiscal Period
Ended
January 31, 2009
July 31, 2008

Distributions per
Unit Excluding
Excess ofEarnings (Yen)
5,970
9,458

Total
Distribution
448
710(Millions of yen rounded down unless otherwise stated)
Distributions
Total
Distributio
Payoutin Excess ofDistribution
n Ratio to
Earnings per
s in Excess
Ratio
Net Assets
Unit (Yen)of Earnings−−
100.0%
1.3%
−
−
99.9%
2.0%

3) Financial Position
Fiscal Period
Ended
January 31, 2009
July 31, 2008

(Millions of yen rounded down unless otherwise stated)
Net Assets
Net Assets
Net Assets
to Total Assets
per Unit (Yen)34,98048.7%
465,782
35,262
48.5%
469,544

Total Assets
71,767
72,770(Reference Material) Net worth, JPY 34,980 million as of January 31, 2009 and JPY 35,262 million as of July 31, 2008

4) Cash Flow Situation
Fiscal Period
Ended
January 31, 2009
July 31, 2008

Cash Flows fromOperating
Activities
1,180
3,920

Cash Flows from
Investing
Activities-144-1,420(Millions of yen rounded down unless otherwise stated)
Cash Flows from
Cash and Cash
FinancingEquivalents at The
Activities
End of The Period-1,3352,973-2,191
3,272(2) Forecast of Revenues and Earnings (for the Eighth Fiscal Period: August 1, 2008 to January 31, 2009)(Millions of yen rounded down unless otherwise stated, yoy % change)
Fiscal PeriodEndingOperating
Revenues

July 31, 2009

2,242 (-0.5)

Operating
Income909 (0.7)

Ordinary
Income422 (-6.4)

Net Income

421 (-6.0)

Distributions
per Unit
Excluding
Excess ofEarnings (Yen)Distributions
in Excess of
Earnings per
Unit (Yen)

5,608

−

(Reference Material) Estimated net income per unit for the seventh fiscal period ending July 31, 2009: JPY 5,608

3

Prospect Reit Investment Corporation(3) Others

1) Changes in accounting policies
A. Changes due to accounting standards: Please refer to ‘Changes due to accounting standards’ on page 19
B. Other changes: None
2) Investment units outstanding
A. Investment units outstanding (including units owned by PRI) at fiscal period-ends:
75,100 units as of January 31, 2009; 75,100 units as of July 31, 2008
B. Investment units owned by PRI at fiscal period-ends:
0 units as of January 31; 0 units as of July 31, 2008
(Note) Please refer to ‘Information per Unit’ on page 22 with respect to the number of investment units used as the baseto calculate the aforementioned ‘net income per investment unit.’* Disclaimer regarding ‘Forecasts of Revenues and Earnings’
Forward-looking statements such as forecasts of revenues and earnings in this document are based on many sources
including current information available to PRI’s management as well as the assumptions judged to be rational bymanagement. These forward-looking statements are not guarantees of future performance and they involve risks anduncertainties. As a result of various factors, actual results may differ materially from those in the forward-looking
statements. With respect to the assumptions underlying such forecasts, please refer to 2) Management Policy andOperating Conditions (2) Operating Conditions.

4

Prospect Reit Investment Corporation
1. Structure of the Investment Corporation
Please refer to “Structure of the Investment Corporation” on page 42.

2. Management Policy and Operating Conditions(1) Management Policy
Because there have been no changes from the last Company Report (Yukashoken Hokokusho), submitted on October23, 2008, disclosure is omitted.
(2) Operating Conditions
The Asset Management Company, as founder, filed for the establishment of PRI in accordance with the Investment
Trust and Investment Corporation Law. PRI was established on April 22, 2005 with total capitalization of JPY 201
million, and registered on May 25, 2005 with the Kanto Local Finance Bureau (Registration No. 34). Thereafter, PRI
undertook a public offering of additional investment units (74,698 units) raising JPY 34,420 million. On July 12, 2005,
PRI was listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange under the securities code
8969. To date, PRI has continued to pursue business activities focusing on residential properties for rental purposes
pursuant to its management policy.
1) Operating Conditions during the Fiscal Period under Review
A. Investment Environment
In the fiscal period under review (seventh fiscal period: the six-month period ended January 31,2009), the financial crisis stemming from the subprime mortgage crisis also spread to the real
economy and has escalated to the extent that it has caused a global economic crisis. Under suchcircumstances, the Japanese economy has fallen into a difficult situation, as reflected by such
indicators as the double-digit dip in real GDP in the October to December 2008 period. Goingforward, the prospects for an early bottoming out of the economy remain extremely low. From areal estate investment perspective as well, the real estate transaction market has shrunk
substantially against the backdrop of the rapidly worsening financial situation, and the situation
has grown so severe that there are arguably no buyers. In the rental housing market, while
deteriorating trends have begun to surface for such properties as high-rent properties in central
Tokyo, although not to the extent of the rapid deterioration seen in rental office market conditions,
quality rental properties with reasonable rent levels located in such areas as the outskirts of Tokyoand other major cities remain relatively strong backed by robust demand.
B. Management Performancea. Although PRI is, consistent with its basic investment policy, dedicated to newly acquiringproperties in an aim to secure steady growth and stable earnings from a medium- to long-term
perspective, no acquisitions were made during the fiscal period under review. PRI also seeks to sellproperties located in urban areas where competition is intensifying, properties with low
profitability and properties that are small in size in an aim to restructure the property portfolio.
During the fiscal period under review, PRI sold TK Flats Denenchofu Annex for JPY 225 million.
b. Existing property management (Internal Growth)
In an effort to increase occupancy rates and profitability, PRI examined the merits of a variety ofproperty management companies in terms of their individual characteristics, strengths, service
contents and fees. Furthermore, property management companies were selected and dismissed, andproperty management rates set and revised, based on quantitative and qualitative assessments by
the Asset Management Company.
c. Funds Procurement
PRI procured debt financing from Aozora Bank, Ltd. in the amount of JPY 4,000 million for aperiod of three months in August 2008 to refinance an existing loan, and in the amount of JPY
3,500 million for a period of three months (Note) in November 2008 to refinance the foregoing JPY
4,000 million loan. Cash reserves were allocated to the JPY 500 million difference between the
new and old loans. As a result, PRI managed to reduce the balance of interest-bearing debt.
(Note) This borrowing of JPY 3,500 million for a period of three months was refinanced on
February 27, 2009.

5

Prospect Reit Investment Corporationd. PRI and PRA have been studying various measures, aiming at attaining remarkable growth in
PRI’s corporate value, including asset growth and a strengthening of its fundamentals.
C. Operating Results and Cash Distribution
Accounting for the aforementioned factors, operating revenues totaled JPY 2, 254 million in thefiscal period ended January 31, 2009. Ordinary income was JPY 451 million while net income
amounted to JPY 448 million.
PRI distributes the total amount of its inappropriate retained earnings for each period. Accordingly,
cash distribution for the third fiscal period was JPY 5, 970 per unit (rounded down to the nearestyen).
2) Outlook
A. Operating Environment
With the global economic crisis, the condition of the Japanese economy is also expected to remainharsh. Under such circumstances, the stagnant state of the real estate transaction market and realestate acquisition demand is also expected to persist. In the rental housing market, while suchproperties as high-rent properties in central Tokyo are highly likely to see stronger deteriorating
trends, quality rental properties with reasonable rent levels located in such areas as the outskirts ofTokyo and other major cities are expected to remain relatively strong as robust demand isanticipated.
B.

Acquisition of New Properties (External Growth)
Under these circumstances and in addition to trust banks that have traditionally served as a key
source of information, PRI will foster a wide variety of relationships with the aim of collecting
invaluable property information. Through these means, PRI will pursue the acquisition of prime
properties from a medium- to long-term perspective.
In an effort to expand its asset scale, and taking into consideration future increases in interest rates,
PRI will focus on properties that can generate profit growth and provide a basis for improved cash
distribution.

C.

Property Management (Internal Growth)
Carrying on from the previous fiscal period, PRI shall examine the merits of a variety of property
management companies in terms of their individual characteristics, strengths, service contents andfees. Based on a philosophy of strict competition, PRI shall select property managementcompanies that can contribute to increasing occupancy and profitability. Furthermore, PRI willcontinue to implement checks by internal specialists including first-class architects with the aimsof reducing costs and securing the increased trust of tenants and investors.

D.

Financial Strategy
PRI aims to carry out flexible procurement of short- and long-term loans with conservative LTV(Loan To Value) level while broadening the types of lenders and diversifying repayment dates. PRI
will work to extend the repayment periods of debt and to obtain fixed-interest rates by continuing
to issue the second series Investment Corporation bonds in the future.

E.

PRI and PRA have been studying various measures, aiming at attaining remarkable growth in PRI’s
corporate value, including asset growth and a strengthening of its fundamentals.

6Prospect Reit Investment Corporation(3) Important Subsequent Events
PRI undertook the following debt financing and repayment after January 31, 2009.
(Millions of yen unless otherwise stated)
Drawdown Date
Debt
Financing
Repayment

February 27,
2009
November 28,
2008

Debt
Financing /RepaymentInterest
Rate

Maturity /Repayment
Date

Application of Funds/ Repayment Method

Remarks

Aozora Bank, Ltd.

3,500

Floating

May 29, 2009

Rollover

Secured

Aozora Bank, Ltd.

3,500

Floating

February 27
2009

Repayment

SecuredLender(4) Forecast of Revenues and Earnings
Forecast of revenues and earnings for the eighth fiscal period (February 1, 2009 to July 31, 2009) is as follows. These
forecasts are based on “Assumptions for Forecasts for the eighth Fiscal Period” mentioned afterwards.
Forecast of revenues and earnings for the eighth fiscal period (February 1, 2009 to July 31, 2009)
Operating revenues
Operating income
Ordinary income
Net income
Distributions per unit

JPY 2, 242 million
JPY 909 million
JPY 422 million
JPY 421 million
JPY 5,608

Note: Forecasts for operating revenues, ordinary income, net income and distributions per unit may differ from actual results due tochanges in the operating environment and a variety of factors. Accordingly, PRI does not guarantee any distribution amount.

7

Prospect Reit Investment Corporation
Assumptions for Forecasts for the Eighth Fiscal Period (February 1, 2009 to July 31, 2009)

Operating Period
Managed Assets
Investment Units
IssuedInterest-Bearing
Debt Ratio

Operating Expenses

Non-Operating
Expenses

Cash Distribution

Assumptions
Eighth fiscal period: From February 1, 2009 to July 31, 2009 (181 days)
Forecasts are based on a property portfolio comprising 53 properties held as of January 31,
2009. The property portfolio may change, however, due to property acquisition or sale.
Forecasts are based on the assumption that PRI shall not issue additional investment units.
The interest-bearing debt ratio as of January 31, 2009 was 49.3%. Forecasts are, however,based on an interest-bearing debt ratio of approximately 49.7% as of July 31, 2009, taking into
account an increase in debt financing to acquire additional properties as well as repayment
stemming from the above sale of one property.
The interest-bearing debt ratio is calculated as follows: Interest-bearing debt ratio =Interest-bearing debt ÷ (Interest-bearing debt + Unitholders’ capital) × 100
Forecasts are based on the assumption that PRI shall post repairs, maintenance and renovation
expenses of JPY 91 million (an increase of JPY 5 million compared with the previous fiscal
period) and shall post property tax and city planning tax of JPY 107 million. Repairs,
maintenance and renovation expenses are estimated based on amounts considered essential foreach property for each fiscal period. Actual repairs, maintenance and renovation expenses foreach fiscal period, however, may differ significantly from these amounts due to unforeseen
circumstances or emergencies.
Of the amount of property tax and city planning tax assessed for the property portfolio, theapplicable portion is recorded as rental business expenses for each fiscal period. For properties
acquired during each period, property tax and city planning tax are allocated to the seller andpurchaser on a pro rata basis at the time of acquisition settlement. In the case of PRI, anamount equivalent to the portion allocated to the purchaser is included in the acquisition priceof the property and not recorded as an expense. Forecasts are based on the assumption that PRI
shall post property tax and city planning tax of JPY 111 million (a decrease of JPY 2 million
compared with the previous fiscal period).
Depreciation is calculated using the straight-line method inclusive of incidental expenses.
Forecasts are based on the assumption that PRI shall post depreciation expenses of JPY 479
million (a decrease of JPY 7 million compared with the previous fiscal period).
Forecasts are based on the assumption that PRI shall post total interest expenses including
bond interest expenses of JPY 372 million (an increase of JPY 24 million compared with theprevious fiscal period), and debt-related expenses of JPY 105 million (an increase of JPY 11
million compared with the previous fiscal period).
Forecasts for the fiscal period ending in July 2009 are based on the rollover of a JPY3.5 billion
short-term loan (repayment on May 29, 2009) and a JPY4.0 billion short-term loan (repayment
on May 29, 2009) in the same amounts. There are neither long-term loans nor investment
corporation bonds with repayment/maturity dates within this fiscal period.
Forecasts are based on the assumption that PRI shall distribute the full amount of retained
earnings each fiscal period in line with its distribution policy.

8

Prospect Reit Investment Corporation
3.

Financial Statements(1) Balance Sheets(Thousands of yen)Notes

Sixth Fiscal Period(As of July 31, 2008)ASSETS
ＩCurrent assets
Cash and deposits＊1
Entrusted cash and deposits
Rental receivables
Prepaid expenses
Deferred tax assets
Consumption tax receivables
Derivative assets
Other current assets
Reserve for possible losses ofreceivables
Total current assets
II Fixed assets
1. Property and equipment:＊1
Buildings
Accumulated depreciation＊1
Structures
Accumulated depreciation＊1
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures ＊1
Accumulated depreciation
＊1
Land
＊1
Entrusted buildings
Accumulated depreciation＊1
Entrusted structures
Accumulated depreciation
Entrustedmachinery

Accumulated depreciation
Entrusted land
Entrusted construction accountTotal property and equipment
2. Intangible assets:
Other intangible assets
Total intangible assets
3. Investments and other assets:Long-term prepaid expenses
Deferred tax assets
Leasehold and security
deposits received
Long-term derivative assets
Total investments andother assets
Total fixed assets

5,419
25,515

1,407
25,545△73
3,465,300△3,215
3,169,057△108,194

823

△351

3,815
2,968
794,5456,189△2,769
3,307
△588

779
3,420
2,718
794,545

32,320,934
30,202,610△2,557,699

124,137△35,232

272,586△94,841

153,668△29,531754,254

1,131

32,328,239△2,125,629△296,243

862,448769,944

1,131

29,763,234

161,243354,454
50,179△11,466＊1

1,119,128
1,854,042
22,097118,030
10,504
21,515△308

6,189△2,373
3,307△338

Increase(Decrease)

1,466,535
1,805,995
29,093
123,997
8,816−

860,912△90,967△81,867

Accumulated depreciation
Entrusted tools, furniture andSeventh Fiscal Period(As of January 31, 2009)

126,011358,359

38,71236,880,302
23,62555,047△15,235

263,518
39,812
36,725,509−

69,114,072

68,473,804△640,268

3,726
3,726

6,803
6,803

3077

72,70336,26528,41447,91923,57836,632

23,578
6,859

169,180
69,286,979

106,772
68,587,380

9△62,408△699,599

Prospect Reit Investment Corporation
III. Deffered assets:
Expenses to issue Investment
Corpration Bonds
Total deffered assets
Total assets

18,333
18,333

10,646
10,646△7,687

72,770,613

71,767,084△1,003,529(Thousands of yen)
Notes

LIABILITIESＩ Current liabilities
Operating payables
Short-term debt

＊1

Current Portion of Investment
Corporation Bonds
Other payables
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Other current liabilities
Total current liabilities
II Long-term liabilities
Investment Corporation Bonds
Long-term debt
Leasehold and security deposits
Total long-term liabilities
Total liabilities
NET ASSETS
I Unitholders’ capital
1. Unitholders’ capital
Unitholders’ capital
2. Retained earnings
Unappropriated retained
earnings for the period
Total retained earnings
Total unitholders’ capital
II Evaluation and conversions
1. Earnings on deferred hedgei
Total evaluation
andconversions
Total net assets
Total liabilities and net assets

Sixth Fiscal Period(As of July 31, 2008)

Seventh Fiscal Period(As of January 31, 2009)

Increase(Decrease)90,4368,000,000

71,6347,500,000−
36,816223,247571
28,890254,841
3,471
8,638,274

5,000,000
50,271
211,8832,373
6,799
244,800
207
13,087,969

5,000,000
23,028,000
841,516−
22,904,000
794,824

28,869,516
37,507,791

23,698,824
36,786,793△5,170,692

34,621,838

34,621,838−

710,320

448,355

710,320
35,332,158

448,355
35,070,193△69,336△89,902△69,336△89,902

11,57935,262,821
72,770,613

34,980,291
71,767,084

59,509△1,572,876

4,449,695△720,998＊2

1047,92947,929Prospect Reit Investment Corporation(2) Statements of Income(Thousands of yen)
Notes

Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

2,206,734

2,160,486

135,040

93,566

Increase(Decrease)

I. Operating Revenues
Real estate rental revenues＊1＊1

Other rental revenues
Gain on sale of real estate＊2

157,3032,499,077−

2,254,053△245,024

1,351,126△33,411

902,926△211,614

2,533

△715

454,441

47,908

II. Operating Expenses＊1
Real estate rental expenses
Loss on sales of real estate＊2
properties

1,102,044

1,053,178−

20,937144,032

136,272

Custodian fees

3,666

3,606

Administrative service fees

21,962

21,265

Directors’ fees
Transferred to reserve forpossible losses of receivables

6,000

6,000

73

3,142

855

1,599

Asset management fees

Losses of receivables
Other operating expenses

105,903

Operating income

1,384,537

105,123

1,114,540

III. Non-Operating Income
Interest income

2,558

2,493

Additional refunds−−

Other non-operating income

754

3,313

39

IV. Non-Operating Expenses
Interest expense

269,845

292,950

Bonds interest expense

54,771

55,478

Bonds issuance expense

7,686

7,686

Debt-related expenses

71,455

94,073

Other non-operating expenses

2,773

406,533

4,251

Ordinary income

711,320451,018△260,302

Income before income taxes

711,320451,018△260,302

2,687

1,679

710,311448,331△261,980

8

24

△16

710,320

448,355△261,965

Income taxes

1,009

Deferred taxes△1

Net income
Retainedearnings
forward

2,811
1,008

△124

brought

Retained earnings at the end of
the period

11Prospect Reit Investment Corporation(3) Statement of Changes in Net Assets
Sixth Fiscal Period (February 1, 2008 to July 31, 2008)

Unitholders’ Capital
Retained Earnings
Unitholders’Capital*1
Balance as of theprevious fiscal
period-end
Movements during
the fiscal period
ended July 31,
2008
Distributionofretained earnings
Net income
Net change due toitems other thanunitholders’ capital
Total
Balance as of July
31, 2008

UnappropriatedRetained
Earnings

Total
Unitholders’ Capital

Total
Retained
Earnings(Thousands of yen)
Evaluation andConversions
Earnings
Total Net
Total
(Loss) on
Assets
Evaluation
DeferredandHedge
Transactio Conversions
ns

34,621,838

662,390662,390

35,284,228△80,916△80,916

35,203,312−−△662,382△662,382△662,382

710,311710,311−−△662,382

710,311

−
−

−

−

−

−

11,579

11,579

11,579−47,92947,92947,929

11,579

11,57959,50934,621,838

710,320

710,320

35,332,158△69,336△69,336

35,262,821

710,311Seventh Fiscal Period (August 1, 2008 to January 31, 2009)

Unitholders’ Capital
Retained Earnings
Unitholders’Capital*1
Balance as of theprevious fiscal
period-end
Movements during
the fiscal period
ended January 31,
2009
Distributionofretained earnings
Net income
Net change due toitems other thanunitholders’ capital
Total
BalanceasofJanuary 31, 2009

UnappropriatedRetained
Earnings

Total
Unitholders’ Capital

Total
Retained
Earnings(Thousands of yen)
Evaluation andConversions
Earnings
Total Net
Total
on
Assets
Evaluation
DeferredandHedge
Transactio Conversions
ns

34,621,838

710,320

710,320

35,332,158△69,336△69,336

35,262,821−−△710,295△710,295△710,295

448,331448,331−−△710,295

448,331

−
−

−

−

−

−

△20,565△20,565△20,565−△261,964△261,964△261,964△20,565△20,565△282,530

34,621,838

448,355448,355

35,070,193△89,902△89,902

34,980,291

12

448,331

Prospect Reit Investment Corporation(4) Basis for Calculating Cash Distribution
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)
I

Unappropriated retained earnings
at the end of the fiscal period
II Total distribution(Distribution per unit)
III Retained earnings carried forward
Method of Calculating the Amountof Distribution(Yen)
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

710,320,012

448,355,398

710,295,800

448,347,000（9,458）24,212（5,970）8,398

PRI determines the amount of
distribution in accordance with
Article 34.1 of its Articles ofIncorporation. The amount must
exceed 90% of distributable
income as stipulated in Articles
67.15 of the Special Taxation
Measures Law.

PRI determines the amount of
distribution in accordance with
Article 36.1 of its Articles ofIncorporation. The amount must
exceed 90% of distributable
income as stipulated in Articles
67.15 of the Special Taxation
Measures Law.

PRI has therefore decided to
distribute the maximum amountof retained earnings at the end of
the period: JPY 710,295,800 to
75,100units
issuedandoutstanding. Procedures for the
distributionofamounts
exceeding distributable income
are outlined in Article 34.1-4 of
PRI’s Articles of Incorporation.
PRI decided not to distributecash in excess of distributable
income for the fiscal period.

PRI has therefore decided to
distribute the maximum amountof retained earnings at the end of
the period: JPY 448,355,398 to75,100units
issuedandoutstanding. Procedures for the
distributionofamounts
exceeding distributable income
are outlined in Article 34.1-4 of
PRI’s Articles of Incorporation.
PRI decided not to distributecash in excess of distributable
income for the fiscal period.

13

Prospect Reit Investment Corporation(5) Statements of Cash Flows(Thousands of yen)
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)
I Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Interest income
Reserve for possible losses of receivables
Amortization for issuance expense ofinvestment corporation bonds
Interest expense
Decrease (increase) in operating receivables
Decrease in other receivables
Decrease in consumption tax and other receivables(Increase) decrease in prepaid expenses(Decrease) increase in operating payables
Decrease in other payables
Increase in accrued consumption taxes(Decrease) increase in accrued expenses(Decrease) increase in advances received
Decrease in long-term prepaid expenses
Loss on sale of entrusted property andEquipment
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities
II Cash flows from investing activities:
Payments for the purchase of property andEquipment
Payments for the purchase of entrusted property
and equipment
Payments for leasehold and security deposits
Proceeds from leasehold and security deposits
received
Payments for leasehold and security deposits received

Net cash used in investing activities
III Cash flows from financing activities:
Proceeds from short-term debt
Payments of short-term debt
Proceeds of long-term debt
Payments of long-term debt
Proceeds of investment corporation bonds
Payments for issuance expense of investment
corporation bonds
Payments for distributions to unitholders
Net cash (used in) provided by financing Activities

IV Net change in cash and cash equivalents
VI Cash and cash equivalents at the beginning of
the period
VI Cash and cash equivalents at the end of theperiod14

711,320
504,4387,686
73451,018
486,763
7,686
3,142

△2,558324,617△4,429249−△19,572
2,165△29,616
16,547△21,151△4,68844,430△2,493
348,4296,995△41△21, 515
5,966△14,886
14,438△22,091△13,825△10,041
44,2892,703,743
10,1744,243,430
2,558△324,617△1,0403,920,331

244,524△3,264
1,525,094
2,505△345,967△1,0091,180,622△8,812△1,650△1,376,791△92,499△126−

90,29054,286△124,796△100,978△1,420,235△144,704

8,000,000

7,500,000△8,000,000△8,000,000−−△1,530,000△124,000

−

−

−

−

△661,286△711,279△2,191,286△1,335,279

308,809299,361

2,963,721

3,272,531

3,272,531

2,973,170

Prospect Reit Investment Corporation(6) Notes for Items Related to Important Accounting Policies
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)
1. Depreciation
method for fixed
assets2.
Accounting
standards to post
revenues
andexpenses

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)(1) Tangible fixed assets (including entrusted (1) Tangible fixed assets (including entrusted
assets)assets)
The straight-line method has been adopted. Same as sixth fiscal period
Estimated years of use for major tangible
fixed assets are as follows:
Buildings
3 – 60 years
Structures
2 – 45 years
Machinery and equipment 3 – 15 years
Tools, furniture, and fixtures 3 – 15 years(2) Intangible fixed assets
The straight-line method has been adopted.

(2) Intangible fixed assets
Same as sixth fiscal period(3) Long-term prepaid expenses
The straight-line method has been adopted.

(3) Long-term prepaid expenses
Same as sixth fiscal period

Method to post fixed asset taxes and other Method to post fixed asset taxes and other
taxes
taxes
In terms of fixed asset taxes, city planningtaxes, depreciable taxes, and others levied onholding real estate and others, the tax amountto be paid in this period is posted as expenses
in the period.

In terms of fixed asset taxes, city planningtaxes, depreciable taxes, and others levied onholding real estate and others, the tax amountto be paid in this period is posted as expenses
in the period.

In terms of settled amounts for fixed asset
taxes and other taxes for the first year in thecase of acquiring real estate or trust
beneficiary rights (with real estate as
entrusted assets) from sellers, such amounts
are not posted as expenses but included inbook values at the time of acquisition of such
real estate or trust beneficiary rights.

In terms of settled amounts for fixed asset
taxes and other taxes for the first year in thecase of acquiring real estate or trust
beneficiary rights (with real estate as
entrusted assets) from sellers, such amounts
are not posted as expenses but included inbook values at the time of acquisition of such
real estate or trust beneficiary rights.

Such fixed assets and other taxes included inbook values at the time of acquisition of such
real estate and trust beneficiary rights totaled
JPY 1,024 thousand.

Such fixed assets and other taxes included inbook values at the time of acquisition of such
real estate and trust beneficiary rights were
none.

17

3.
Hedge
accounting
methodProspect Reit Investment Corporation(1) Hedge accounting method(1) Hedge accounting method
Deferred hedge method. In the cases of Same as sixth fiscal periodinterest swaps meet conditions for special
treatment, special treatment is adopted.
(2) Hedge type and objective
Hedge typeInterest rate swap transaction
Interest rate cap transaction
Hedge objective
Interest payment on borrowing(2) Hedge type and objective
Same as sixth fiscal period(3) Hedge policy(1) Hedge policy
PRI carries out derivative transactions to Same as sixth fiscal period
hedge risks based on its risk management
policy and in accordance with the Articles of
the Investment Corporation.

4. Compositionof cash and cash
equivalents
inthe statements ofcash flows(4) Method to evaluate effectiveness ofhedge accounting
PRI judges the effectiveness of hedge
accounting based on such indicators asaccumulated cash flow changes incomparison with hedging objects andhedging methods, during commence ofhedge and the time to judge effectives. In thecases of interest swaps meet conditions for
special treatment, effective judgement isomitted.
Cash and cash equivalents in the statementsof cash flows consist of cash in hand,
entrusted cash, cash and entrusted deposits
that can be withdrawn easily, and short-term
investments redeemable within three months
from acquisition that pose minimal risk ofvalue fluxuations and are easily convertible
to cash.

18(4) Method to evaluate effectiveness ofhedge accounting
Same as sixth fiscal period

Same as sixth fiscal period

5.
Other
important items
for the basis ofcompilingfinancialstatements

Prospect Reit Investment Corporation(1) Accounting method with respect to trust (1) Accounting method with respect to trust
beneficiary rights to real estate and other beneficiary rights to real estate and otherentrusted assets
entrusted assets
With respect to trust beneficiary rights to real Same as sixth fiscal period
estate and other entrusted assets, all of theasset and liability items within entrusted
assets as well as all revenue and expense
items generated from entrusted assets areposted in the corresponding items in thebalance sheets and statements of income.
Among entrusted asset items posted in suchcorresponding items, the following important
items are posted independently in thebalance sheets.
1) Entrusted cash and entrusted
deposits
2) Entrusted buildings,
entrusted
structures, entrusted machinery andequipment,
entrusted
tools,
furniture and fixtures, entrusted
land, and entrusted construction
account(2) Accounting method for consumption tax (2) Accounting method for consumption tax
and others
and others
The accounting method for consumption tax Same as sixth fiscal period
and local consumption tax is the
tax-exclusive
method.
Undeductableconsumption taxes for asset acquisition are
included in book values at the time of each
respective asset acquisition.

Changes due to accounting policies
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

None.

Adoption of Accounting Standards for Lease
Transactions
PRI began the adoption of the ‘Accounting Standards
for Lease Transactions’ (The Accounting Standards
Board of Japan, ASBJ Statement No. 13, revised on
March 30, 2007) and the ‘Guidance on AccountingStandards for Lease Transactions’ (The AccountingStandards Board of Japan, ASBJ Guidance No. 16,
revised on March 30, 2007) from the fiscal period
under review. This adoption has no effect on revenues
or expenses.

19

Prospect Reit Investment Corporation(7) Notes to the Financial Statements[Notes for the Balance Sheets]
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Note 1. Assets put up for collateral or assets put up for Note 1. Assets put up for collateral or assets put up forcollateral of secured debt are as follows:collateral of secured debt are as follows:(Thousands of yen)(Thousands of yen)
Entrustedcash
andEntrustedcash
and1,825,489
1,772,369
entrusted deposits
entrusted deposits
Buildings
Buildings
754,254769,944
Structures
779
Structures
823
Machineryand
3,420
Machinery
and3,815
equipment
equipment
Tools, furniture and2,718
Tools, furniture and2,968
fixturesfixtures
Entrusted buildings
794,545
Entrusted buildings
794,545
Entrustedbuildings
29,195,304
Entrusted buildings
29,626,525
Entrusted structures
112,382
Entrusted structures
109,989
Entrusted machinery and
225,593
Entrusted machinery and
233,445
equipment
equipment
Entrusted tools, furniture
39,812
Entrusted tools, furniture
38,712and fixturesand fixtures
Entrusted land
36,074,511
Entrusted land
36,229,304
Total
69,028,811
Total
69,582,445
Secured debt with collateral are as follows:

Secured debt with collateral are as follows:
Short-term debt
Long-term debt
Total

Short-term debt
Long-term debt
Total

8,000,000
23,028,000
31,028,000

7,500,000
22,904,000
30,404,000

Note 2. Minimum net assets set by Article 67.4 of the Note 2. Minimum net assets set by Article 67.4 of theInvestment Trust and Investment Corporation Law
Investment Trust and Investment Corporation Law
JPY 50,000 thousand

Same as sixth fiscal period

20

Prospect Reit Investment Corporation[Notes to the Statements of Income]Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Note 1. Breakdown of real estate rental revenues and Note 1. Breakdown of real estate rental revenues andearnings(Thousands of yen) earnings(Thousands of yen)
A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
2,018,143
Common area maintenance
80,947fee revenues
Parking revenues
80,941Other related revenues
26,701Other rental revenues
Other rental revenues
135,040
Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
181,713
expenses
Repair expenses
94,943
Water, electricity, and other
43,665
rates
Taxes
115,161
Insurance premiums against
8,218
lossesTrust fees
44,641
Depreciation expenses
503,717
Other rental expenses
109,982
Total real estate rental
expenses
C. Real estate rental business earnings(A – B)

A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
1,975,963
Common area maintenance
78,245fee revenues
Parking revenues
80,723
Other related revenues
25,554
Other rental revenues
Other rental revenues
93,566
Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
161,966
expenses
Repair expenses
86,043
Water, electricity, and other
45,969rates
Taxes
113,433
Insurance premiums against
7,279
lossesTrust fees
44,434
Depreciation expenses
485,978
Other rental expenses
108,072
Total real estate rental
expenses
C. Real estate rental business earnings(A – B)

2,206,734
135,040
2,341,774

1,102,044
1,102,044
1,239,730

21,160,486
93,5662,254,053

1,053,178
1,053,178
1,200,875

Note 2. Breakdown of real estate rental revenues and Note 2. Breakdown of real estate rental revenues andearnings(Thousands of yen) earnings(Thousands of yen)
Maison de Ville Azabudai
Revenues from sale ofreal estate and others
Book value for sold realestate and others
Other expenses for sales
Profit from sale of realestate and others

TK Flats Denenchofu Annex
Revenues from sale ofreal estate and others
Book value for sold realestate and others
Other expenses for sales
Loss on sale of realestate and others

2,956,150
2,704,644
94,202
157,30321

225,000
244,524
1,413△20,937

Prospect Reit Investment Corporation[Notes to the Statement of Changes in Net Assets]
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Note 1. Total number of investment units authorized for Note 1. Total number of investment units authorizedissuance and outstanding
for issuance and outstanding
Total number of investment units
Same as sixth fiscal periodauthorized for issuance
2,000,000
Total number of investment units
outstanding
75,100[Notes to the Statement of Cash Flows]
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Note 1. Relationship between cash and cash
equivalents at the end of the period and items posted on
the balance sheets
As of July 31, 2008 (Thousands of yen)
Cash and deposits
1,466,535
Entrusted cash and entrusted deposits
1,805,995
Cash and cash equivalents
3,272,531

Note 1. Relationship between cash and cash
equivalents at the end of the period and items postedon the balance sheets
As of January 31, 2009 (Thousands of yen)
Cash and deposits
1,119,128
Entrusted cash and entrusted deposits
1,854,042
Cash and cash equivalents
2,973,170(Disclosure is omitted for notes regarding lease transactions, derivatives transactions and others because of small
necessity to disclose in this Financial Report <Kessan Tanshin>)[Notes regarding information per investment unit]
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Net assets per investment unit
JPY 469,544
Net assets per investment unit
JPY 465,782
Net income per investment unit
JPY 9,458
Net income per investment unit
JPY 5,969
Because there are no latent investment units, PRI does Same as sixth fiscal period
not record net income per investment unit after
adjustment of latent investment units.
Note: Net income per investment unit is calculated using the following average investment units in the respective
periods.
Average investment units in the third and fourth fiscal periods:
Seventh fiscal period(August 1, 2008 to January 31, 2009): 75,100 (no changes during the period)
Sixth fiscal period (February 1, 2008 to July 31, 2008): 75,100 (no changes during the period)

Net income
Net income not distributed tounitholders
Net income distributed to unitholders
Average number of units

Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)(JPY thou)
710,311710,31175,100 units

22

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)(JPY thou)
448,331−448,33175,100 units

Prospect Reit Investment Corporation[Notes regarding subsequent events]
Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

None.

None.

(8) Changes in total investment units outstanding
Public and private offerings from the establishment of PRI to the end of the seventh fiscal period (ended January
31, 2009) are as follows:

Date

Total investment units
outstanding (unit)
ChangeBalance

Type

Paid-in capital(Millions of yen)
ChangeBalance

Notes

April 22, 2005

Established by private
offering

402

402

201

201

（Note 1）

July 12, 2005

Public offering

74,69875,10034,42034,621（Note 2）

Note 1: PRI’s investment units were set at JPY 500,000 per unit at the time of establishment.
Note 2: PRI issued new investment units priced at JPY 480,000 per unit (underwritten price set at JPY 460,800) througha public offering for the purpose of raising funds mainly for the new acquisition of property.

4. Reference material(1) Investment breakdown
A breakdown of PRI’s investment assets as of the end of the sixth fiscal period (ended July 31, 2008) is as follows:

Type of asset

Use

Trust beneficiary rights
in real estate

Residential
rental units
Residential
rental units

Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)
Total held
Proportion to(Millions of yen)
total (%）

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)
Total held
Proportion to(Millions of yen)
total (%）

67,51892.8

66,918

93.2

1,572

2.2

1,555

2.2

Deposit and other assets

3,680

5.0

3,293

4.6

Total assets

72,770100.071,767

100.0

Real estate

Note: Total held amounts are recorded on the balance sheets (total of book values after deducting depreciation).
(2) Investment properties classified as real estate or entrusted real estate① Overview of investment properties
The following chart lists investment properties owned by PRI as of July 31, 2008. With the exception ofproperties S017, F017, and F022, which are classified as real estate, all other assets are classified as trust
beneficiary rights in real estate.

Code

Property Name

Acquisition Price(Millions of Yen)
(Note 1)

Percentage Share
Appraisal Valueof Total(Millions of Yen)（％）
(Note 2)
(Note 3)Acquisition Date

S001

TK Flats Shibuya

6,399

9.4

5,300

July 12, 2005

S002

Prospect Shinonomebashi

3,353

4.9

3,360

July 12, 2005

S004

Maison de
Gyoranzaka

1,768

2.6

1,650

July 14, 2005

S005

Prospect Omori-Kaigan

1,807

2.6

1,690

July 14, 2005

Ville

Takanawa

23

S006

Abreast Shin-Osaka

1,826

Prospect Reit Investment Corporation
2.7
1,684
July 12, 2005

S007

Maison de Ville Naka-Meguro

1,189

1.7

1,120

July 14, 2005

S008

Roppongi Rise House

1,184

1.7

992

July 12, 2005

S009

Prospect Nihonbashi-Honcho

1,070

1.6

892

July 12, 2005

S011

Fragrance Kawasaki

624

0.9

613

July 12, 2005

S012

Abreast Sakuragawa

516

0.8

451

July 12, 2005

S013

Dome Takamine

322

0.5

233

July 12, 2005

S014

Dome Yotsuya

275

0.4

203

July 12, 2005

S016

Abreast Nagase

209

0.3

164

July 12, 2005

S017

Living Stage Higashi-Sendai

435

0.6

368

August 31, 2005

S018

Prospect Toyonaka Hattori

396

0.6

404

February 10, 2006

S019

Prospect Bishoen

376

0.6

336

February 15, 2006

S020

Prospect Shimogamo

411

0.6

339

March 15, 2006

S021

Prospect Kawaramachi-Gojo

803

1.2

683

March 15, 2007

S022

Prospect Chuo-Rinkan

700

1.0

553

March 15, 2007

S023

Sky Hills N15

932

1.4

877

May 31, 2007

S024

Sky Hills Sakaimachi

1,115

1.6

939

May 31, 2007

S025

Domy Chitose

592

0.9

518

May 31, 2007

S026

Sky Hills Takadai I

691

1.0

639

May 31, 2007

S027

Exceria Ikebukuro West II

1,020

1.5

959

June 20, 2007

S028

Prospect Monzennakacho

1,250

1.8

1,180

June 20, 2007

S029

Prospect KALON Minowa

1,930

2.8

1,770

September 7, 2007

S030

Prospect Nakanoshima

1,000

1.5

860

October 19, 2007

S031

Prospect Ogikubo

880

1.3

784

November 7, 2007

S032

Prospect Musashi-Shinjo

1,230

1.8

1,170

May 30, 2008

F001

Prospect Kiyosumi-Teien

2,780

4.1

2,690

July 14, 2005

F002

Park Terrace Ebisu

2,712

4.0

2,380

July 14, 2005

F003

BELNOS34

2,534

3.7

1,960

July 12, 2005

F004

Prospect Dogenzaka

2,294

3.4

1,830

July 12, 2005

F005

U House Daikan-Cho

1,548

2.3

1,405

July 12, 2005

F006

U House Gokiso

1,406

2.1

1,197

July 12, 2005

F007

Angel Heim Nishi-Rokugo No.2

1,401

2.1

1,319

July 14, 2005

F008

Prospect Onshi-Koen

1,196

1.8

1,190

July 12, 2005

F009

Deim-Hashimoto

992

1.5

823

July 12, 2005

F010

SK Residence

1,020

1.5

912

July 12, 2005

F012

Prospect Urawa-Tokiwa (Note 4)

878

1.3

652

July 12, 2005

F014

U House Tsurumai II

685

1.0

536

July 12, 2005

24

F017

Living Stage Minami-Sendai

F019

Prospect Glarsa Hiroo

F020

Prospect Reit Investment Corporation
0.4
244
August 31, 2005

275
3,905

5.7

4,110

February 15, 2006

Prospect Katsura-

570

0.8

494

March 03, 2006

F021

Crown Heim Nishi-Tanabe

601

0.9

483

March 03, 2006

F022

Takasagoseki Nibankan

810

1.2

703

March 15, 2006

F023

Prospect Machiya

547

0.8

497

November 07, 2006

F024

Prospect Hatsudai

730

1.1

603

March 15, 2007

F025

Prospect Morishita

1,480

2.2

1,340

March 15, 2007

F026

Prospect Nishi-Sugamo

1,419

2.1

1,300

March 30, 2007

F027

Palais D’Or Maruyama

1,250

1.8

973

October 19, 2007

F028

Prospect Kawasaki

1,717

2.5

1,650

October 19, 2007

F029

Prospect Nihonbashi-Koamicho

946

1.4

929

October 19, 2007

68,249100.0

60,955

Total

Note 1: Acquisition price does not include real estate brokerage fees and other expenses incurred through the acquisition ofproperties.
Note 2: Figures are rounded to the nearest first decimal place.
Note 3: Based on the Cabinet Office Ordinance Concerning Balance Sheets, Income Statements, Asset Management Reports, CashDistribution Statements and Other Supplementary Documents to be Prepared by Investment Corporations, appraisal values are
drawn from valuation reports prepared by Aoyama Realty Advisors Inc., Chuo Real Estate Appraisal Co., Ltd., Tanizawa Sogo
Appraisal Co., Ltd., Mitsui Real Estate Sales Co., Ltd., and Daiwa Real Estate Appraisal Co., Ltd as of the Investment
Corporation’s closing date. The properties appraised by each appraiser are shown below, with the property codes corresponding tothose in the above table.
Note 4: The property name was changed from ‘Garden City Urawa’ to ‘Prospect Urawa-Tokiwa’ as of January 1, 2009.

② Overview of real estate and entrusted real estate
The following chart lists property names, site areas, and other information for real estate and entrusted realestate.
Code Property Name

Location

Site Area

Total No.
Total Monthly
Numb
Total No. of
Total
of
Rentaler ofTotal Leased
LeasedLeasable
Leasable
Revenues
tenatnFloor Space
Residential
Floor Space
Residenti(Thousands of
s
Units
Yen)
al Units

(m2)

(m2)

(m2)

(Note 1)

(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)

Occupancy
Ratio (BySpace)

Occupancy
Ratio (ByNo. ofResidential
Units)(%)(%)(Note 8)(Note 9)S001 TK Flats
Shibuya
Prospect
S002 Shinonomeba
shi
Maison de
Ville
S004
Takanawa
Gyoranzaka
Prospect
S005 Omori-Kaigan

Shibuya-ku,
Tokyo

1,800.47

6,903.54

6,081.70

194

171

27,830

1

88.1

88.1

Koto-ku,Tokyo

1,385.45

4,849.20

4,739.21

171

167

17,977

1

97.7

97.7

638.65

1,778.37

1,650.87

70

65

8,028

1

92.8

92.9

Ota-ku,Tokyo856.82

2,478.04

2,446.04

89

88

8,881

1

98.7

98.9

S006 Abreast
Shin-Osaka
Maison de
S007 Ville
Naka-Meguro

Osaka-shi,
Osaka766.13

2,984.64

2,361.96

92

74

14,916

43

79.1

80.4

Meguro-ku,
Tokyo

275.36

1,275.00

1,249.50

50

49

5,933

1

98.0

98.0

S008 Roppongi
Rise House
Prospect
S009 Nihonbashi-H
oncho

Minato-ku,
Tokyo

574.65

1,209.87

1,005.55

34

29

4,596

1

83.1

85.3

Chuo-ku,Tokyo

174.36

1,290.49

1,247.56

50

48

5,307

1

96.7

96.0

Minato-ku,
Tokyo

25

Prospect Reit Investment Corporation
S011 Fragrance
Kawasaki

Kawasaki-shi,
Kanagawa

228.05

1,065.96

995.96

45

42

3,490

1

93.4

93.3

S012 Abreast
Sakuragawa

Osaka-shi,
Osaka

361.991,009.92

967.92

48

46

2,867

1

95.8

95.8

S013 Dome
Takamine

Nagoya-shi,
Aichi

983.60946.04708.58

36

27

1,482

1

74.9

75.0

S014 Dome
Yotsuya

Nagoya-shi,
Aichi

812.09765.90724.90

36

34

1,605

1

94.6

94.4

S016 Abreast
NagaseLiving Stage
S017 Higashi-Send
ai
Prospect
S018 Toyonaka
Hattori

Higashiosakashi, Osaka

318.54532.98491.98

26

24

1,302

24

92.3

92.3

Sendai-shi,
Miyagi904.001,539.41

1,307.17

52

44

2,373

1

84.9

84.6

Toyonaka-shi,
Osaka

352.75986.34986.34

34

34

2,448

1

100.0

100.0

S019 Prospect
Bishoen

Osaka-shi,
Osaka313.24901.15840.47

26

24

2,096

1

93.3

92.3

S020 Prospect
Shimogamo

Kyoto-shi,
Kyoto

234.53675.51

613.41

31

28

1,776

1

90.8

90.3

Prospect
S021 Kawaramachi-Gojo

Shimogyo-ku,
Kyoto

234.98

1,528.12

1,333.09

52

46

3,962

1

87.2

88.5

S022 Prospect
Chuo-Rinkan

Yamato-shi,
Kanagawa

589.73

1,098.24

1,052.48

48

46

3,335

1

95.8

95.8

S023 Sky
N15

Hills

Sapporo-shi,
Hokkaido

1,232.73

4,754.86

4,754.86

111

111

5,106

1

100.0

100.0

Hills
S024 Sky
Sakaimachi

Chitose-shi,
Hokkaido

4,189.46

6,775.39

6,775.39

135

135

6,039

1

100.0

100.0

S025 Domy
Chitose

Chitose-shi,
Hokkaido

1,796.60

3,383.02

3,383.02

111

111

4,081

1

100.0

100.0

Hills
S026 Sky
Takadai I
Exceria
S027 IkebukuroWest II

Chitose-shi,
Hokkaido

2,401.78

4,712.47

4,712.47

120

120

5,500

1

100.0

100.0

Toshima-ku,
Tokyo

290.14

1,379.52

1,318.72

48

46

5,016

1

95.6

95.8

Prospect
S028 Monzennakacho

Koto-ku,Tokyo

613.01

1,790.56

1,715.80

62

59

6,233

1

95.8

95.2

Prospect
S029 KALON
MinowaTaito-ku,Tokyo

473.353,032.27

2,774.91

82

76

9,342

1

91.5

92.7

S030 Prospect
Nakanoshima

Kita-ku,Osaka

370.61

1,572.48

1,547.52

63

62

5,417

1

98.4

98.4

S031 Prospect
Ogikubo

Suginami-ku,
Tokyo

731.41

1,106.63

1,031.55

40

37

4,162

1

93.2

92.5

Kawasaki-shi,
Kanagawa

972.481,855.03

1,855.03

85

85

6,827

1

100.0

100.0

Koto-ku,Tokyo

1,586.77

5,556.73

5,481.44

77

76

14,828

1

98.6

98.7

F002 Park Terrace
Ebisu

Shibuya-ku,
Tokyo

790.182,705.09

2,529.1651

47

11,407

1

93.5

92.2

F003

Katsushika-ku, Tokyo

3,092.58

5,321.89

4,271.21

100

84

10,661

1

80.3

84.0

Prospect
S032 MusashiShinjo
Prospect
F001 KiyosumiTeien

BELNOS 34

26

Prospect Reit Investment Corporation
F004 Prospect
Dogenzaka

Shibuya-ku,
Tokyo

274.24

2,058.53

1,573.95

47

35

7,810

1

76.5

74.5

F005 U House
Daikan-Cho

Nagoya-shi,
Aichi

2,060.52

5,944.44

5,399.36

96

88

8,796

1

90.8

91.7

F006 U House
GokisoAngel Heim
F007 Nishi-Rokugo
No.2

Nagoya-shi,
Aichi

3,113.87

5,127.19

4,484.17

78

72

7,746

1

87.5

92.3

Ota-ku,Tokyo

1,666.28

2,776.64

2,776.64

40

40

6,455

1

100.0

100.0

F008 Prospect
Onshi-Koen

Koto-ku,Tokyo

772.002,033.77

1,995.70

61

60

6,539

1

98.1

98.4

F009 Deim-Hashim
otoSagamihara-shi, Kanagawa

898.13

3,170.41

2,733.87

92

84

5,718

1

86.2

91.3

F010

Toshima-ku,
Tokyo

474.55

1,624.49

1,494.23

30

27

4,917

1

92.0

90.0

Saitama-shi,
Saitama

1,557.49

2,468.51

0.00

30

0

0

1

0.0

0.0

F014 U House
Tsurumai II
Living Stage
F017 Minami-Sendai

Nagoya-shi,
Aichi

615.51

2,262.63

2,063.58

34

31

3,545

1

91.2

91.2

Sendai-shi,
Miyagi476.23

1,277.10

1,182.35

27

25

1,867

1

92.6

92.6

F019 Prospect
Glarsa Hiroo

Shibuya-ku,
Tokyo

803.31

3,846.27

3,344.94

112

102

17,379

1

87.0

91.1

F020 Prospect
KatsuraKyoto-shi,
Kyoto

1,354.29

1,769.96

1,708.72

29

28

3,083

1

96.5

96.6

F021 Crown Heim
Nishi-Tanabe

Osaka-shi,
Osaka444.201,517.86

1,342.29

22

20

2,732

1

88.4

90.9

F022 Takasagoseki
Nibankan

Sendai-shi,
Miyagi

1,794.83

3,336.52

3,114.93

41

38

5,001

1

93.4

92.7

F023 Prospect
Machiya

Arakawa-ku,
Tokyo

251.44

1,169.37

1,114.53

21

20

2,938

1

95.3

95.2

F024 Prospect
HatsudaiShibuya-ku,
Tokyo

586.68817.71817.71

22

22

3,444

1

100.0

100.0

F025 Prospect
Morishita
ProspectF026 Nishi-SugamoKoto-ku,Tokyo

736.43

2,399.23

2,252.52

45

41

6,938

1

93.9

91.1

Koto-ku,Tokyo

368.152,023.42

2,023.42

42

42

6,610

1

100.0

100.0

SK Residence
ProspectF012 Urawa-Tokiwa

F027

Palais D’Or
Maruyama

Chuo-ku,
Sapporo2,236.99

4,678.32

3,431.49

64

49

5,660

1

73.3

76.6

F028

ProspectKawasaki

Saiwai-ku,
Kawasaki

1,218.89

3,377.53

3,377.53

52

52

9,059

1

100.0

100.0

Chuo-ku,Tokyo

273.37

1,364.02

1,226.22

37

34

4,700

1

89.9

91.9

52,323.89 132,808.58 124,243.34

3,291

3,045

335,768

118

90.7

92.5

ProspectF029 NihonbashiKoamicho

Total

Note 1. In the ‘Site Area’ column, figures for total site area of real estate or entrusted real estate are based on data in register books orrecords. In some cases, such data might not be completely accurate.
Note 2. In the ‘Total Leasable Floor Space’ column, figures represent leasable floor space for portions of real estate or entrusted realestate acquired by PRI.
Note 3. In the ‘Total Leased Floor Space’ column, figures represent leased floor space with lease contracts concluded with
end-tenants. Such floor space excludes leased site (land) area. Figures are based on lease contracts between end-tenants and master
lessers or trust beneficiaries. Nevertheless, in cases of apparent errors in lease contracts, floor space data are based on information
given by the previous owner of the acquired properties, information shown on plans at completion, etc.
Note 4. In the ‘Total Leasable Residential Units’ column, figures represent leasable units for portions of real estate or entrusted realestate acquired by PRI.

27

Prospect Reit Investment Corporation
Note 5. In the ‘Total Leased Residential Units’ column, figures represent leased units to end-tenants with lease contracts concluded
between end-tenants and master lessers or trust beneficiaries as of January 31, 2009.
Note 6. In the ‘Total Monthly Rental Revenues’ column, figures represent total monthly revenues as recorded in lease contracts
concluded between end-tenants and master lessers or trust beneficiaries as of January 31, 2009. Such revenues include common
area maintenance fee revenues but exclude revenues from monthly contracted parking spaces or such supplemental facilities asstorage and locker space.
Note 7. In the ‘Total Number of Tenants’ column, ‘1’ represents cases of lease contracts concluded between trust beneficiaries andmaster lessers. In such cases, figures are based on the assumption that all end-tenants have agreed with their master lesser to belessers (sub-lessers). In the cases that one tenant leases more than one unit, the number of tenants is recorded as ‘1.’ These figures
are based on information current as of January 31, 2009.
Note 8. In the ‘Occupancy Ratio (By Space)’ column, percentage figurees represent the proportion of leased floor space to leasable
floor space of each real estate or entrusted real estate property. In addition, percentage numbers are rounded to the nearest firstdecimal place. The ‘Total’ percentage figure represents the proportion of total leased floor space to total leasable floor space as ofJanuary 31, 2009.
Note 9. In the ‘Occupancy Ratio (By No. of Residential Units)’ column, percentage figures represent the proportion of leased floor
space to leasable floor space of each asset. In the ‘Occupancy Ratio (By Space)’ column, percentage figures are rounded to thenearest first decimal place. The ‘Total’ percentage figure represents the proportion of total leased floor space to total leasable floor
space as of January 31, 2009.

(3) Capital Expenditures for Investment Properties① Capital Expenditure Plan (consisting of items from JPY 1 million)

Property Name

PurposePlanned period

Planned work amount (millionsof yen)Note
Paid in
Total
Total
this
paid
periodProspect Urawa-Tokiwa

Large-scale repair work

From January 2009 to
March 2009

93

−

−

SK Residence

Renovation of retail space on
the second floor

From June 2009 to
July 2009

3−−

Angel Heim Nishi-Rokugo No.2

Repairofwaterproofing
material on roof

From April 2009 to
May 2009

6−−

Crown Heim Nishi-Tanabe

New installation of net toprevent pigeon droppings

From March 2009 to
March 2009

1

−

−

Takasagoseki Nibankan

Replacementment
water-supply meters

From March 2009 to
March 2009

1

−

−

From March 2009 to
March 2009

1

−

−

of

Dome Takamine

New installation of security
camerasDome Yotsuya

New installation of security
camerasFrom March 2009 to
March 2009

1

23

23

Prospect Kiyosumi-Teien

Replacement of intercoms

From June 2009 to
July 2009

12

−

−

Construction to install digital
cable television

From March 2009 to
March 2009

1

−

−

Large-scale repair work

From March 2009 to
July 2009

60

−

−

New installation of security
camerasNew installation of cover toprevent falling of wing wall
fragments

From March 2009 to
March 2009

3

−

−

From April 2009 to
May 2009

4−−

New installation of residential
fire alarm system
Replacement of intercoms andautomatic locking system
deviceFrom March 2009 to
March 2009

1

−

−

From March 2009 to
March 2009

12

−

−

MaisondeGyoranzaka

Ville

U House Tsurumai II
Sky Hills Sakaimachi
Sky Hills Sakaimachi
Sky Hills Takadai I
Domy Chitose

Takanawa

28

Prospect Reit Investment Corporation
Palais D’Or Maruyama

Replacementof
airconditioners for office spaceon the first floor

From March 2009 to
March 20095

Deim-Hashimoto

Renovation of two rooms

From February 2009
to July 20096

BELNOS 34

Renovation of retail space on
the second floor

From February 2009
to July 200935

U House Gokiso

Renovation of three rooms

From February 2009
to July 200910

U House Gokiso

Construction to install digital
cable television

From March 2009 to
March 20091

U House Gokiso

Renovation of office space on
the first floor

From February 2009
to March 2009

28

−

−

Note. Numbers are rounded down to the nearest first decimal place.
② Capital expenditures in the period under review
Property Name

PurposeAmount paid
(millions of yen)

PeriodU House Daikan-Cho

Large-scale repair work

From June 2008 to October
2008

73

U House Tsurumai II

Replacement of turning partsand other parts of tower parking

From September
November 2008

2008

to

3

Maison de Ville Naka-Meguro

New installation of security
camerasFrom November
November 2008

2008

to

Deim-Hashimoto

Renovation of three rooms

From August 2008 to August
2008

7

Palais D’Or Maruyama

Replacement of air conditioners
for office space on the second
floor

From December
January 20091

Deim-Hashimoto

Repair of divisional wall andunderground beams of unit 102

U House Gokiso

Renovation of one room

OthersReplacementmentof
airconditioners, water heaters, andothers

2008

1

to

From December 2008 to
December 2008
From August 2008 to August
2008

2
2
13

Total

105

Note. Numbers are rounded down to the nearest first decimal place.
③ Reserve for repair expenses
PeriodItems

Sixth Fiscal Period(February 1, 2008 to
July 31, 2008)(Millions of yen)
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Reserve balance at the end of
previous fiscal period

428

469

Reserved amount in the period

81

151

Withdrawal in the period

40

72

Balance carried forward

469

548

(4)Figures in Engineering Reports
Outline of building engineering reports
In addition to receiving support from research firms, PRI commissions them for the following items for each of its

29

Prospect Reit Investment Corporation
investment real estate or entrusted real estate properties.
―Examination of building deterioration, planning of short- and long-term repair expenses, research of compliancein accordance with the Building Standards Law, research of hazardous material contents in buildings, and researchof soil conditions.
Nevertheless, the contents of these reports are the opinions of the respective research firms, and PRI does notguarantee the appropriateness and accuracy of such contents.
Nevertheless, the contents of the reports are the opinions of TBTC, and PRI does not guarantee the appropriatenessand accuracy of such contents.

Code

Property name

S001
S002

TK Flats Shibuya
Prospect Shinonomebashi
Maison de Ville Takanawa
Gyoranzaka
Prospect Omori-Kaigan
Abreast Shin-Osaka
Maison de Ville Naka-Meguro
Roppongi Rise House
Prospect Nihonbashi-Honcho
Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
Abreast Nagase
Living Stage Higashi-Sendai
Prospect Toyonaka Hattori
Prospect Bishoen
Prospect Shimogamo
Prospect Kawaramachi-Gojo
Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi
Domy Chitose
Sky Hills Takadai I
Exceria Ikebukuro West II
Prospect Monzennakacho
Prospect KALON Minowa
Prospect Nakanoshima
Prospect Ogikubo
Prospect Musashi-Shinjo
Prospect Kiyosumi-Teien
Park Terrace Ebisu
BELNOS34
Prospect Dogenzaka
U House Daikan-Cho
U House Gokiso
Angel Heim Nishi-Rokugo
No.2
Prospect Onshi-Koen
Deim-Hashimoto
SK Residence
Prospect Urawa-Tokiwa
U House Tsurumai II
Living Stage Minami-Sendai
Prospect Glarsa Hiroo
Prospect Katsura
Crown Heim Nishi-Tanabe

S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S016
S017
S018
S019
S020
S021
S022
S023
S024
S025
S026
S027
S028
S029
S030
S031
S032
F001
F002
F003
F004
F005
F006
F007
F008
F009
F010
F012
F014
F017
F019
F020
F021

Estimate of repair expenses
Rebuilding priceResearch firm (thousands of yen rounded down)of building(Note 1)(millions of yen
WithinOver 12
Urgentrounded down)
one yearyears
Takenaka
490
184,420
2,174
−
TBTC
10,1801,450−−Month and year ofbuilding engineering
reports
June 2005
April 2005

TBTC

−

−

47,800463

April 2005

TBTC
TBTC
TBTC
TBTC
TBTC
TBTC
TBTC
Takenaka
Takenaka
TBTC
TBTC
Takenaka
Takenaka
TBTC
TBTC
TBTC
Takenaka
Takenaka
Takenaka
Takenaka
TBTC
TBTC
TBTC
TBTC
TBTC
Takenaka
Takenaka
TBTC
TBTC
TBTC
Takenaka
Takenaka

−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
300
−
300
1,200
−
−
−
−
−
−
−
−
−
−
250
−

−
−
−
−
−
−
−
870
370
−
300
−
−
−
−
−
−
−
−
680
−
−
−
−
−
−
100
−
150
−
410
500

6,830
94,76037,070
3,570
3,830
2,990
11,57049,76049,25021,20046,66018,490
8,360
2,460
4,320
3,960
52,71098,66063,750133,960
4,860
5,400
8,000
5,210
3,300
26,960238,790
41,750174,670
4,130
228,290
165,900

600
910
372
362
385
274
275
161
138
160
312
277
209
203
440
301
609
850
415
581
350
410
970
534
305
501
1,332
700
1,735
552
1,563
1,141

April 2005
May 2005
April 2005
April 2005
April 2005
April 2005
June 2005
June 2005
June 2005
May 2005
August 2005
February 2006
February 2006
March 2006
January 2007
February 2007
March 2007
March 2007
March 2007
March 2007
May 2007
May 2007
July 2007
August 2007
August 2007
May 2008
March 2003
April 2005
April 2005
February 2005
March 2003
July 2007

Takenaka−

130

108,540

580

March 2003

TBTC
TBTC
TBTC
TBTC
Takenaka
TBTC
TBTC
TBTC
TBTC

−
−
−
−
−
−
−
−
−

−
150
−
−
820
150
270
−
160

4,980
38,28036,93054,830125,540
36,75016,68041,620
7,070

574
646
447
605
491
300
1,185
351
405

February 2005
April 2005
April 2005
April 2005
April 2005
August 2005
December 2005
March 2006
March 2006

30

Prospect Reit Investment Corporation
F022
F023
F024
F025
F026
F027
F028
F029

Takasagoseki Nibankan
Prospect Machiya
Prospect Hatsudai
Prospect Morishita
Prospect Nishi-Sugamo
Palais D’Or Maruyama
Prospect Kawasaki
ProspectNihonbashi-Koamicho

TBTC
TBTC
TBTC
TBTC
TBTC
TBTC
TBTC
TBTC

Total
portfolio

−
−
−
−
−
−
−
−

150
−
−
−
−
300
−
−

80,220
2,680
2,190
4,930
3,890
96,650
5,810

761
290
179
616
504
975
862

February 2006
October 2006
Janurary 2007
February 2007
February 2007
August 2007
September 2007

4,150

399

August 2007

2,050

6,000

2,535,560

32,184Note 1. In the ‘Research firm’ column, TBTC stands for Tokyo Bldg-Tech Center Co., Ltd., and Takenaka stands for
Takenaka Corporation.
Note 2. The month and year of building engineering reports and the month and year of earthquake risk reports refer tothe first reports issued.
(5) Outline of earthquake risk reports
PRI commissions Tokyo Bldg-Tech Center Co., Ltd. (TBTC) for earthquake risk reports and other reports for each
investment real estate and entrusted real estate property.
Nevertheless, the contents of the reports are the opinions of TBTC, and PRI does not guarantee the appropriatenessand accuracy of such contents.
Code

Property Name

S001
S002
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S016
S017
S018
S019
S020
S021
S022
S023
S024
S025
S026
S027
S028
S029
S030
S031
S032
F001
F002
F003
F004
F005

TK Flats Shibuya
Prospect Shinonomebashi

Probable Maximum Loss (%)(Note 1)

8
19
12
10
12
7
15
12
13
15
6
5
12
7
9
14
5
12
14
2
4
3
4
10
19
14
12
11
12
15
11
12
9
11

Maison de Ville Takanawa Gyoranzaka

Prospect Omori-Kaigan
Abreast Shin-Osaka
Maison de Ville Naka-Meguro

Roppongi Rise House
Prospect Nihonbashi-Honcho

Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
Abreast Nagase
Living Stage Higashi-Sendai

Prospect Toyonaka Hattori
Prospect Bishoen
Prospect Shimogamo
Prospect Kawaramachi-Gojo

Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi
Domy Chitose
Sky Hills Takadai I
Exceria Ikebukuro West II
Prospect Monzennakacho
Prospect KALON Minowa
Prospect Nakanoshima
Prospect Ogikubo
Prospect Musashi-Shinjo
Prospect Kiyosumi-Teien
Park Terrace Ebisu
BELNOS34
Prospect Dogenzaka
U House Daikan-Cho31Month and year ofearthquake risk reports

January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009
January 2009

Prospect Reit Investment Corporation
10
January 2009
F006
U House Gokiso
11
January 2009
F007
Angel Heim Nishi-Rokugo No.2
25
January 2009
F008
Prospect Onshi-Koen
13
January 2009
F009
Deim-Hashimoto
11
January 2009
F010
SK Residence
5
January 2009
F012
Prospect Urawa-Tokiwa
17
January 2009
F014
U House Tsurumai II
7
January 2009
F017
Living Stage Minami-Sendai
7
January 2009
F019
Prospect Glarsa Hiroo
7
January 2009
F020
Prospect Katsura
11
January 2009
F021
Crown Heim Nishi-Tanabe
11
January 2009
F022
Takasagoseki Nibankan
14
January 2009
F023
Prospect Machiya
8
January 2009
F024
Prospect Hatsudai
11
January 2009
F025
Prospect Morishita
10
January 2009
F026
Prospect Nishi-Sugamo
2
January 2009
F027
Palais D’Or Maruyama
10
January 2009
F028
Prospect Kawasaki
12
January 2009
F029
Prospect Nihonbashi-Koamicho
7.6
Total portfolio
Note 1. Probable Maximum Loss (PML) is a ratio that represents the probability of a maximum loss, and is calculated
for each asset and the overall portfolio. In this document, PML is defined as a ratio of a building’s estimatedrestoration cost to its rebuilding price resulting from a maximum-magnitude earthquake projected to occur within a
50-year period every 475 years, therefore having a 10% probability every 50 years.
Note 2. PRI has purchased earthquake insurance for this property.
(6) Outline of tenants and others① Outline of leasing conditions for each real estate or entrusted real estate property

Code

Property Name

S001
S002
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014

TK Flats Shibuya
Prospect Shinonomebashi

S015
S016
S017
S018
S019
S020
S021
S022
S023
S024

Maison de Ville Takanawa Gyoranzaka

Prospect Omori-Kaigan
Abreast Shin-Osaka
Maison de Ville Naka-Meguro

Roppongi Rise House
Prospect Nihonbashi-Honcho

Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
TK Flats Denenchofu Annex (Note)

Abreast Nagase
Living Stage Higashi-Sendai

Prospect Toyonaka Hattori
Prospect Bishoen
Prospect Shimogamo
Prospect Kawaramachi-Gojo

Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi

Total Leasable
Floor Space(㎡)

Total Leased
Floor Space(㎡)

Number oftenants

6,903.54
4,849.20
1,778.37
2,478.04
2,984.64
1,275.00
1,209.87
1,290.49
1,065.96
1,009.92
946.04765.90−532.981,539.41
986.34901.15675.51
1,528.12
1,098.24
4,754.86
6,775.39

6,081.70
4,739.21
1,650.87
2,446.04
2,361.96
1,249.50
1,005.55
1,247.56
995.96967.92708.58724.90−491.981,307.17
986.34840.47613.41
1,333.09
1,052.48
4,754.86
6,775.39

1
1
1
1
47
1
1
1
1
1
1
1
1
26
1
1
1
1
1
1
1
1

32

(As of July 31, 2008)
Total
Percentage
Monthly
share to total
Rentalrevenues
Revenues(%)(Thousandsof Yen)
182
8.1
109
4.9
52
2.3
57
2.6
94
4.2
37
1.7
30
1.3
32
1.4
22
1.0
18
0.8
9
0.4
10
0.5
4
0.2
8
0.4
16
0.7
15
0.7
12
0.6
11
0.5
25
1.1
23
1.1
32
1.4
38
1.7

Domy Chitose
Sky Hills Takadai I
Exceria Ikebukuro West II
Prospect Monzennakacho
Prospect KALON Minowa
Prospect Nakanoshima
Prospect Ogikubo
Prospect Musashi-Shinjo
Prospect Kiyosumi-Teien
Park Terrace Ebisu
BELNOS34
Prospect Dogenzaka
U House Daikan-Cho
F006 U House Gokiso
S025
S026
S027
S028
S029
S030
S031
S032
F001
F002
F003
F004
F005

F007
F008
F009
F010
F012
F014
F017
F019
F020
F021
F022
F023
F024
F025
F026
F027
F028
F029

Angel Heim Nishi-Rokugo No.2

Prospect Onshi-Koen
Deim-Hashimoto
SK Residence
Garden City Urawa
U House Tsurumai II
Living Stage Minami-Sendai

Prospect Glarsa Hiroo
Prospect Katsura
Crown Heim Nishi-Tanabe
Takasagoseki Nibankan
Prospect Machiya
Prospect Hatsudai
Prospect Morishita
Prospect Nishi-Sugamo
Palais D’Or Maruyama
Prospect Kawasaki
Prospect Nihonbashi-Koamicho

Total

3,383.02
4,712.47
1,379.52
1,790.56
3,032.27
1,572.48
1,106.63
1,855.03
5,556.73
2,705.09
5,321.89
2,058.53
5,944.44
5,127.19
2,776.64
2,033.77
3,170.41
1,624.49
2,468.51
2,262.63
1,277.10
3,846.27
1,769.96
1,517.86
3,336.52
1,169.37
817.71
2,399.23
2,023.42
4,678.32
3,377.53
1,364.02

Prospect Reit Investment Corporation
3,383.02
25
14,712.47
35
1
1,318.72
32
1
1,715.80
39
12,774.91
59
1
1,547.52
31
1
1,031.55
25
11,855.0342
1
5,481.4496
12,529.16
73
14,271.21
81
11,573.95
53
1
5,399.36
58
14,484.1754
12,776.64
53
1
1,995.70
41
12,733.87
39
11,494.23
34
1
0.00
31
1
2,063.58
29
11,182.35
12
13,344.94
119
1
1,708.72
22
11,342.29
17
13,114.93
35
1
20
1,114.531
19817.711
2,252.5245
12,023.4239
13,431.49
39
13,377.5364
11,226.22
29
1

132,808.58

120,413.92

125

2,254

1.1
1.6
1.4
1.8
2.6
1.4
1.1
1.9
4.3
3.3
3.6
2.4
2.6
2.4
2.4
1.8
1.7
1.5
1.4
1.3
0.6
5.3
1.0
0.8
1.6
0.9
0.9
2.0
1.8
1.8
2.9
1.3

100.0

Note: Leasing operations ended on October 30, 2008 for TK Flats Denenchofu Annex (S015).
② Occupancy rates
Code

Property Name

S001
S002
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S015
S016
S017
S018
S019

TK Flats Shibuya
Prospect Shinonomebashi
Maison de Ville Takanawa Gyoranzaka

Prospect Omori-Kaigan
Abreast Shin-Osaka
Maison de Ville Naka-Meguro
Roppongi Rise House
Prospect Nihonbashi-Honcho
Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
TK Flats Denenchofu Annex
Abreast Nagase
Living Stage Higashi-Sendai
Prospect Toyonaka Hattori
Prospect Bishoen

July
2008
85.2
90.8
97.1
100.0
84.3
100.0
87.9
92.6
96.0
95.8
74.9
94.6
78.4
100.0
88.4
100.0
96.6

AugustSeptember
2008
2008
87.7
89.4
91.4
92.7
98.6
95.8
100.0
98.7
82.3
82.2
98.0
98.0
87.9
90.3
92.6
88.8
93.7
95.7
97.9
97.9
74.9
77.6
94.6
97.4
85.6
85.6
100.0
100.0
86.5
88.4
100.0
100.0
93.2
93.2

33

(End of each month)
October November December January
2008
2008
2008
2009
89.1
87.5
86.7
88.1
94.4
95.1
97.1
97.7
94.2
91.4
92.8
92.8
97.7
99.0
100.0
98.7
82.2
81.2
80.2
79.1
98.0
100.0
98.0
98.0
85.5
85.5
87.9
83.1
89.2
90.9
89.2
96.7
95.5
95.5
97.7
93.4
95.8
95.8
95.8
95.8
74.9
77.6
74.9
74.9
97.4
97.4
94.6
94.6
−
−
−
−
100.0
100.0
96.2
92.3
84.7
84.7
84.7
84.9
100.0
100.0
100.0
100.0
93.2
89.9
89.9
93.3

S020
S021
S022
S023
S024
S025
S026
S027
S028
S029
S030
S031
S032
F001
F002
F003
F004
F005
F006
F007
F008
F009
F010
F012
F014
F017
F019
F020
F021
F022
F023
F024
F025
F026
F027
F028
F029

Prospect Shimogamo
Prospect Kawaramachi-Gojo
Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi
Domy Chitose
Sky Hills Takadai I
Exceria Ikebukuro West II
Prospect Monzennakacho
Prospect KALON Minowa
Prospect Nakanoshima
Prospect Ogikubo
Prospect Musashi-Shinjo
Prospect Kiyosumi-Teien
Park Terrace Ebisu
BELNOS34
Prospect Dogenzaka
U House Daikan-Cho
U House Gokiso
Angel Heim Nishi-Rokugo No.2
Prospect Onshi-Koen
Deim-Hashimoto
SK Residence
Garden City Urawa
U House Tsurumai II
Living Stage Minami-Sendai
Prospect Glarsa Hiroo
Prospect Katsura
Crown Heim Nishi-Tanabe
Takasagoseki Nibankan
Prospect Machiya
Prospect Hatsudai
Prospect Morishita
Prospect Nishi-Sugamo
Palais D’Or Maruyama
Prospect Kawasaki
Prospect Nihonbashi-Koamicho

87.7
85.6
95.8
100.0
100.0
100.0
100.0
94.5
98.3
95.6
88.9
94.1
100.0
96.3
93.5
81.8
90.8
93.0
86.7
100.0
100.0
93.8
100.0
100.0
96.8
92.6
91.6
96.5
78.8
95.7
85.8
86.6
100.0
100.0
75.4
100.0
100.0

90.8
85.5
95.8
100.0
100.0
100.0
100.0
95.8
95.0
95.6
88.9
95.4
100.0
98.7
92.7
83.2
88.8
93.0
84.3
100.0
100.0
91.1
100.0
100.0
96.8
92.6
92.1
96.5
88.4
95.7
85.8
95.2
100.0
100.0
78.3
100.0
91.4

Prospect Reit Investment Corporation
90.8
90.8
90.8
90.8
90.8
87.3
92.6
87.2
87.2
87.2
93.8
95.8
97.9
93.8
95.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
95.8
91.1
100.0
94.0
95.6
93.5
93.5
92.1
97.2
95.8
92.9
92.4
91.9
91.5
91.5
87.3
84.1
96.8
100.0
98.4
95.4
92.5
93.2
93.2
93.2
100.0
100.0
100.0
100.0
100.0
100.0
98.6
98.6
98.6
98.6
92.7
97.0
94.3
89.5
93.5
83.3
82.8
83.1
80.3
80.3
85.3
83.1
83.7
80.7
76.5
93.8
92.4
91.0
92.2
90.8
85.7
85.7
85.7
87.3
87.5
100.0
100.0
100.0
100.0
100.0
97.9
97.9
100.0
100.0
98.1
93.4
93.4
86.2
84.9
86.2
100.0
97.4
91.9
91.9
92.0
100.0
100.0
100.0
100.0
0.0
94.4
94.4
91.9
91.2
91.2
92.6
92.6
96.3
92.6
92.6
90.6
92.6
94.9
92.0
87.0
93.1
93.1
96.5
96.5
96.5
83.9
83.9
83.9
83.9
88.4
93.4
93.4
93.4
93.4
93.4
90.5
95.3
90.6
95.3
95.3
100.0
96.1
86.6
96.1
100.0
100.0
100.0
97.6
94.7
93.9
100.0
100.0
100.0
100.0
100.0
76.1
72.7
73.3
72.0
73.3
100.0
97.9
100.0
100.0
100.0
92.7
92.7
92.7
92.7
89.9

Note: The formula to calculate occupancy rate is ‘leased floor space/leasable floor space,’ with results rounded to thenearest first decimal place.

(7) Revenues and earnings of individual assets
Revenues and earnings of individual assets are shown in the table below. The Leasing NOI (Net Operating
Income) of each property includes the real estate rental business earnings of each property plus depreciation
expenses. Monetary amounts are rounded down to the nearest thousand yen unless otherwise stated.
34

Prospect Reit Investment Corporation
S001

S002

S004
S005
Maison de Ville
Prospect
ProspectTakanawa
Shinonomebashi
Omori-Kaigan
Gyoranzaka

TK Flats
Shibuya
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses
Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)109,81452,48957,903

94,587

174,320

103,774

49,68956,16592,787

8,478

6,040

2,800

1,738

1,800

89,29649,495

17,066

20,322

67,403

10,906

4,928

1,909

2,346

3,736

13,988

5,958

3,689

4,228

2,685

16,621

10,387

3,369

2,787

34,384

6,968

1,267

469

694

5,482

8,034

3,568

1,093

903

1,164

32,777

23,385

6,534

9,362

19,94993,50260,31935,42337,581

27,184

126,280

83,704

41,957

46,94347,134

S008

S009

Prospect
Maison de Ville Roppongi Rise
Nihonbashi-Ho
Naka-Meguro
House
ncho

Real estate rental
expenses
Taxes
Other expenses
Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)AbreastShin-Osaka

182,799

S007

Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues(Thousands of yen)
S006

S011

S012

Fragrance
Kawasaki

AbreastSakuragawa

37,671

30,25932,08722,087

18,17336,13429,37230,31921,295

17,973

1,537

887

1,767

791

200

12,544

12,607

13,906

10,670

9,410

1,406

1,460

1,658

1,162

934

2,497

2,076

2,150

1,594

1,337

1,976

2,237

2,584

1,740

806

639

408

552

302

734

756

1,048

484

430

96

5,267

5,377

6,475

5,441

5,501

25,127

17,651

18,181

11,416

8,763

30,39523,02824,656

16,857

14,26435

Prospect Reit Investment Corporation
S013

S014

S015

Dome Takamine Dome Yotsuya
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses

S016

S017

TK
Flats
Denenchofu
Abreast Nagase
Annex

LivingStage
Higashi-Sendai

9,714

10,251

4,098

8,701

16,587

9,340

10,211

3,943

8,701

16,110

374

40

155

−

477

6,181

4,435

2,897

5,692

10,837

696

560

295

474

1,182

1,306

1,210

686

309

1,925

538

469

397

1,568

1,038

Property management
expenses
Water, electricity, andother rates
Repair expenses

436

396

138

442

818

1,025

408

337

324

759

Depreciation expenses

2,178

1,390

1,041

2,573

5,112

Real estate rental
3,532
5,816
1,201
3,009
business earnings
NOI (Net Operating
5,711
7,206
2,242
5,583
Income)Note: Leasing operations ended on October 30, 2008 for TK Flats Denenchofu Annex (S015).

S018

S019

ProspectToyonaka
Hattori
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses
Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)S020

Prospect
Bishoen

Prospect
Shimogamo

5,750
10,862

S021

S022

ProspectKawaramachiGojo

Prospect
Chuo-Rinkan

15,063

12,785

11,26625,23923,711

15,05812,468

11,15624,554

21,831

4

316

110

684

1,879

7,858

6,491

6,879

13,542

13,626

1,172

910

696

1,721

1,458

1,340

1,357

1,341

2,333

2,238

300

479

456

1,505

1,423

404

143

514

1,071

431

−

244

444

156

658

4,640

3,357

3,427

6,753

7,415

7,204

6,293

4,386

11,697

10,084

11,845

9,651

7,813

18,451

17,50036

Prospect Reit Investment Corporation
S023

S024

Sky Hills N15
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses

Real estate rental
business earnings
NOI (Net Operating
Income)Sky
Hills
Domy Chitose
Sakaimachi

Other expenses
Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)ExceriaSky
Hills
Ikebukuro West
Takadai I
II25,65335,27032,22532,076

38,59125,65335,27030,075

−

−

−

−

2,149

12,842

15,101

8,793

12,821

13,547

3,866

4,655

2,374

3,066

821

1,194

1,249

1,144

3,482

2,644

500

500

500

500

3,150

40

42

−

1,051

512

345

192

157

196

593

6,895

8,462

4,617

4,523

5,825

19,23323,48916,85922,44918,677

26,12831,951

21,477

26,97324,503

S029

S030

Prospect
Prospect
KALON
Monzennakacho
MinowaReal estate rental
expenses
Taxes

S027

38,591

S028

Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues

S026

32,076

Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses

S025

S031

ProspectNakanoshima

S032

ProspectOgikubo

ProspectMusashi-Shinjo

39,49359,66931,54525,80642,04537,05658,51831,421

25,32042,045

2,436

1,150

124

485

−

15,15328,012

21,864

10,834

14,550

1,197

927

2,251

697

−

2,721

5,188

4,057

2,156

3,131

2,755

2,722

3,568

861

1,110

373

858

455

393

420

1,168

729

658

526

−

6,937

17,587

10,873

6,199

9,889

24,33931,656

9,680

14,971

27,49531,27749,243

20,553

21,171

37,38437

Prospect Reit Investment Corporation
F001

Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses
Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)

F002

F003

F004

BELNOS34

Prospect
Dogenzaka

Terrace

96,69773,65981,16753,41158,641

92,92170,76475,831

51,27357,616

3,776

2,895

5,336

2,138

1,025

38,33630,19445,20919,274

44,186

6,228

3,303

6,992

1,216

3,478

5,365

4,048

6,203

2,480

2,805

5,041

5,563

7,113

2,656

2,722

1,233

698

3,045

588

994

2,605

2,747

4,890

3,090

22,80917,862

13,832

16,963

9,242

11,37658,36043,46535,957

34,136

14,45576,22357,29752,921

43,37925,831

F007

F008

F009

Angel
Heim
Prospect
U House Gokiso Nishi-Rokugo
Onshi-Koen
No.2

Real estate rental
expenses
Taxes
Other expenses
Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)U
House
Daikan-Cho

ProspectPark
Kiyosumi-Teien Ebisu

F006

Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues

F005

F010

Deim-Hashimoto SK Residence

54,59653,82941,48739,25634,78452,71652,924

40,69936,33333,872

1,880

904

788

2,923

911

27,54022,70817,087

19,361

14,871

4,342

3,134

606

2,169

1,944

4,052

5,830

3,423

2,739

3,559

2,986

2,028

1,307

2,794

1,674

1,574

420

436

467

662

4,096

1,199

193

3,484

1,606

10,487

10,095

11,120

7,705

5,424

27,056

31,12024,40019,895

19,91237,544

41,21635,52027,60025,33738

Prospect Reit Investment Corporation
F012
GardenUrawa
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes

City

Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses

F019

F020

U
House Living
Stage Prospect Glarsa Prospect
Tsurumai II
Minami-Sendai Hiroo
Katsura29,692

12,456

119,275

22,757

24,82525,086

12,325

112,631

21,771

6,997

4,606

131

6,644

986

10,581

12,483

7,520

46,58011,974

1,964

2,010

1,080

2,066

1,372

656

2,548

1,487

4,791

2,326

879

930

615

6,211

897

20

275

634

915

1,108

−

1,024

359

2,638

1,280

7,060

5,693

3,344

29,957

4,989

21,24017,2094,935

72,695

10,78228,301

22,903

8,279

102,652

15,771

Property management
expenses
Water, electricity, andother rates
Repair expenses

Real estate rental
business earnings
NOI (Net Operating
Income)F017

31,822Other expenses

Depreciation expenses

F014

F021

F022

F023

Crown Heim
Nishi-Tanabe

Takasagoseki
Nibankan

F024

ProspectMachiya

F025

Prospect
Hatsudai

ProspectMorishita

17,30535,89920,311

19,87245,603

16,50535,104

17,15919,391

44,970

800

794

3,152

481

633

9,340

19,755

12,3609,871

17,918

928

3,135

161

407

362

1,585

2,829

2,355

2,129

2,487

966

1,116

2,186

2,540

1,542

Property management
expenses
Water, electricity, andother rates
Repair expenses

377

1,581

350

222

645

2,005

1,632

329

304

820

Depreciation expenses

3,477

9,459

6,976

4,268

12,0597,964

16,143

7,951

10,001

27,684

11,44225,603

14,927

14,26939,744

Real estate rental
business earnings
NOI (Net Operating
Income)39

Prospect Reit Investment Corporation
F026

F027

ProspectNishi-Sugamo

Palais D'Or
Maruyama

Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses

Real estate rental
business earnings
NOI (Net Operating
Income)F029
ProspectNihonbashi-Koa
micho

ProspectKawasaki

39,66039,59464,94529,654

39,66038,94356,99828,922

−

650

7,947

731

13,00525,54527,83913,849

166

3,585

2,799

513

2,783

5,927

3,186

2,169

−

1,715

5,554

1,677

360

1,712

814

357

−

1,723

94

293

9,695

10,87915,3908,837

26,654

14,04837,10615,80436,34924,92852,497

24,642

Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses

F028(8) Information related to major real estate and major entrusted real estate
None of the real estate or entrusted real estate properties owned by PRI independently accounted for at least 10%of total real estate rental revenues in the fifth fiscal period.
(9) Portfolio diversification
Portfolio diversification by region, years after construction, and type of units is as follows:① By region

RegionTokyo's 23 Wards
Tokyo
Metropolitan
Area(excluding Tokyo's 23 Wards)
Other Regions (Note 1)

Number ofproperty

Percentage share
Percentage share
Total leasable
Acquisition priceof acquisitionof floor space tofloor space(millions of yen
price to total
totalrounded down)
(㎡)
(%)
(%)
(Note 2)
(Note 4)(Note 3)(Note 3)25

45,06466.0

61,220.15

45.9

6

6,141

9.0

13,035.68

9.8

23

17,04425.0

58,982.25

44.3

Total
54
68,249100.0
133,238.08
100.0
Note 1. The "other regions" category refers to government-designated cities and prefectural capitals, excluding regions within theTokyo Metropolitan area, as well as other cities of equivalent size and commuter belts for all of the aforementioned regions.
Note 2. Transaction prices exclude consumption tax recorded on sales contracts.
Note 3. Percentage numbers are rounded to the nearest first decimal place.
Note 4. Leasable space owned by PRI excluding certain sites (ground-level parking spaces).

② Years after construction

Years after construction

Percentage share
Percentage share
Total leasable
Acquisition priceof acquisitionof floor space tofloor space
Number of (millions of yen
price
to
total
total
propertyrounded down)
(㎡)
(%)
(%)
(Note 1)
(Note 3)(Note 2)
(Note 2)40

Prospect Reit Investment Corporation
Up to one year

1

1,230

1.8

1,855.03

1.4

More than one year and up to five years

23

28,64942.0

41,884.18

31.4

More than five years and up to ten years

13

21,452

31.4

38,792.31

29.1

More than ten years

17

16,91824.8

50,706.56

38.1

Total

54

68,249100.0

133,238.08

100.0

Note 1. Transaction prices exclude consumption tax recorded on sales contracts.
Note 2. Percentage numbers are rounded to the nearest first decimal place.
Note 3. Leasable space owned by PRI excluding certain sites (ground-level parking spaces).
(10) Outline of major tenants and outline of overall tenants① List of major tenants
The following chart shows the names of major tenants with leased floor space and total monthly rents forproperty owned by PRI at the end of the fourth fiscal period. To be designated as a major tenant, leased floor
space must account for at least 10% of the total leased floor space of PRI’s portfolio. All of these tenants aremaster lessers.

Percentage share to
Total Leased Floor
Space
(％)
(Note 2)

Total Monthly
RentalRevenues(Thousands of
Yen)(Note 3)

Percentage share tototal revenues(%)(Note 4)

Tenant Name

Industry

Total Leased
Floor Space(㎡)

Haseko Livenet Co., Ltd

Real estate

50,322.31

40.5

151,51743.8

Tokyu Community Co., Ltd

Real estate

33,693.88

27.1

47,29013.7

Mitsui Fudosan Residential Lease
Co., Ltd (Note 1)

Real estate

16,134.98

13.0

55,771

16.1

Total of Major Tenants

100,151.17

80.6

254,575

73.6

Total Portfolio

124,243.34

100.0

345,767

100.0

Note 1. Mitsui Fudosan Residential Lease Co., Ltd. succeeded the condominium leasing operations of Mitsui Fudosan
Real Estate Sales Co., Ltd. on April 1, 2003. Hence, Mitsui Fudosan Real Estate Sales is used in master lease
contracts.
Note 2. Percentage numbers are rounded to the nearest first decimal place.
Note 3. In the ‘Total monthly rents’ column represents total monthly rent received by trust beneficiaries of real estate or
entrusted real estate properties based on master lease contracts.
Note 4. Percentage numbers are rounded to the nearest first decimal place.

41

Prospect Reit Investment Corporation
5. Corporations and entities related to PRI (in reference material 1．Corporations and entities related to PRI）
(1) Structure of the Investment Corporation

Property Provider
Prospect Co., Ltd.

Memorandum
Concerning
Preferential
Information
Provision

Prospect Reit Investment
Corporation

Memorandum
Concerning
Information
Provision

Asset Custodian
Sumitomo Trust andBanking Co., Ltd.

Adminstrative
Duty Contract

Administrative Agent
Sumitomo Trust andBanking Co., Ltd.

Unitholders’RegisterAdministration
Contract

Unitholders’ Register
Administrator
Mizuho Trust andBanking Co., Ltd.

General Meeting ofUnitholders
Board of Officers
Executive officer:

Property Information
ProviderMitsui Real Estate Sales
Co., Ltd.

Asset Custody
Contract

Takeo Nishiyoshi
Supervisory Officer:
Chikao Nomura
Supervisory Officer:
Kazuhiko Chiba

Asset Management
Contract
Memorandum Concerning
Information Provision

Asset Management Company
Prospect Reit Advisors Co.,
Ltd.

Memorandum
Concerning Preferential
Information Provision

42

Accouting Auditor
Grant Thornton Taiyo
ASG

Prospect Reit Investment Corporation(2) Names, operational roles, and outline of related operations
Operational roles

Investment Corporation

Names

Outline of related operations
PRI invests primarily in properties wholly or partly forresidential use, and defined as real estate or real estate
related assets (Notes) backed by real estate. With the aim ofachieving steady growth and securing stable earnings andprofits over the medium to long term, PRI carries out the
management of its investment assets.

Prospect Reit Investment
Corporation

PRI outsources all asset management operations to Prospect
Residential Advisors Co., Ltd. (the "Asset Management
Company"). Based on the Asset Management Contract
signed between the two parties on April 22, 2005 (the"Contract," as amended thereafter), the Asset Management
Company has formulated its Investment Management
Policy (the "Policy") to function as in-house rules andregulations regarding the management of the Investment
Assets.
Asset Management
Company

Prospect Reit Advisors Co., Ltd.

In accordance with the Policy, the Asset Management
Company formulates Annual Asset Management Plans("Plans") for each of the Investment Corporation's operating
periods. The Plans present period-specific reports
concerning the acquisition, disposition and management ofreal estate-related assets; fund procurement and otherfinancing schemes; and distribution strategies.
The outsourced operations to the Asset Management
Company from PRI are as follows:① Operations for asset management, ② fund raising
operations, ③ reporting on asset conditions ④compilingproperty management plans , ⑤ related operations of ①
and ④ which are commissioned occasionally by PRI.

Asset Custodian
Administrative Agent

Unitholders’ Register
Administrator

Sumitomo Trust and Banking
Co., Ltd.

Mizuho Trust and Banking Co.,
Ltd.

Sumitomo Trust engages in the following operations basedon the Administrative Duty Contract as an administrative
duty contractor, in accordance with the Investment TrustLaw:① Operations for calculations of PRI (excluding
unitholders’ register administrative operations), ②
operations to compile accounting books for PRI, ③
taxation accounting for PRI, ④ operations for board
meetings of officers of PRI and general meetings ofunitholders of PRI, and ⑤ related operations of ① and④ . Sumitomo Trust also engages in asset custodyoperations and related cash management and book keeping
operations as an asset custodian in accordance with theAsset Custody Contract and the Investment Trust Law:
Mizuho Trust engages in the following operations based on
the Unitholders’ Register Administrative Contracts as aunitholders’ register administrator, in accordance with theInvestment Trust Law:
① Change of names of unitholders, ② operations to issue
investment securities, ③ operations to compile invitations
to general meetings of unitholders, notices of decisions
made on such meetings and reference documents, proxydocuments, and reception support at such meetings, ④operations to calculate and pay distributions to unitholders,⑤ operations to respond to inquiries about investment
units, to issue related certificates, and to handle applicationsof mishaps, ⑥ operations to sort out and keep documents
and undelivered postal items related to outsourced
operations, ⑦ operations to compile statistics ofinvestment units needed by PRI based on related laws andprovisions as well as contracts with PRI, and ⑧ related
operations of ① and ⑦.

Notes:
Real estate related assets are defined in a. and c.
PRI primarily invests in the following designated assets, as set in Item 28.1of its Articles of Incorporation

43

Prospect Reit Investment Corporationa. real estateb. real estate equivalent assets, as follows
i)leasing rights to real estateii)
surface rights
iii)
trust beneficiary rights to real estate, leasehold, and surface rights
iv)
cash trust beneficiary rights to real estate, leasehold, and surface rightsv)
equity contracts with the above a. and b.i), and iv) as investment assetsvi)
cash trust beneficiary rights to anonymous partnership equity with real estate as major trust assets
c. More than half or equal to half of backed assets investmented in real estatei)
preferred equity securities (according to Article 2.12 of the Asset Liquidation Act)ii)
beneficiary securities (according to Article 2.12 of the Investment Trust Law)iii)
investment securities (according to Article 2.22 of the Investment Trust Law)iv)
beneficiary securities for designated purpose trusts (according to Article 2.15 of the Asset Liquidation Act, excluding
the above b. iii. iv. and v.)(3) Major related parties other than the aforementioned
Names

Operational roles

Outline of related operations
KKP concluded the Memorandum Concerning Preferential
Information Provision with PRI as well as PRA. Based on theProperty Provider

memorandum, KKP agrees to supply certain information about

Prospect Co., Ltd. (KKP)

real estate and to give preferential negotiation rights to PRI with(Note)

respect to acquiring real estate as well as real estate related assets
it owns, will own or develop.

Property Information
ProviderMitsui Real Estate Sales Co.,Ltd.

Mitsui Real Estate Sales Co., Ltd. concluded the Memorandum
Concerning Information Provision with PRI as well as PRA.
Based on the memorandum, it supplies PRI as well as PRA
information about certain real estate to be sold.

Note: KKP is a 100% shareholder of the Asset Management Company.

44