Sixth Fiscal Period

Financial Results of the Sixth Fiscal Period(October 2006)

— Contents —1. Overview of Fund Management• Highlights of the 6th Fiscal Period• Growth of the Fund (1)“Changes in Performance”• Growth of the Fund (2)“Changes in Fund Management”• Forecasts of the 7th Fiscal Period

2
3
4
5

2. Future Management Policies• Analysis of the Market• Future Growth Strategies“Sustainability of Growth Cycle” 1• Future Growth Strategies“Sustainability of Growth Cycle” 2

78
9

3. Financial Results• Income Statement• Balance Sheet• Cash Distribution• Financial Indices• Cash Flow Statement• Debt Financing• Unitholders

11
12
13
14
15
16
17

4. Fund Management Results

Appendix• Results of Investment Sector
19• Properties Acquired during the 6th
Fiscal Period
20• Diversification of Portfolio(1) “Assets” 21• Diversification of Portfolio(2) “Tenants” 22• Results of Asset Management Sector 23• Increase in Earning Power of Portfolio 24• Enhancing Competitiveness of
Property by Renovation
25• End-of-Period Appraisal Value
26• Move-Ins and Move-Outs
27• Results of Financial Sector
28• Additional Issuance of Investment Units/ Credit Ratings
29• Overview of Financial Status
30• Post-Balance Sheet Financial Status
31• List of Property• Earnings by Property• Map of Property• Photo of Property(30 properties as of Dec. 20, 2006)• Acquisition Channel of Property• Fund Summary• Unit Price and Market Capitalization(Dec. 4, 2003 - Dec. 19, 2006)• Structure of the Asset Management Company

33
34
35
36
37
38
39
40

1. Overview of Fund Management1Highlights of the 6th Fiscal Period
Performance of the Current Period (184 business days)
Current Period

Comparison with
Previous Period

Forecasts as of June22, 2006

Comparison with
Actual Results

Operating Revenues¥10,739 mln+ ¥929 mln+ 9.5%¥10,590 mln+ ¥148 mln+ 1.4%

Operating Income¥5,182 mln+ ¥624 mln+ 13.7%¥4,798 mln+ ¥384 mln+ 8.0%Net Income¥4,229 mln+ ¥633 mln+ 17.6%¥3,837 mln+ ¥392 mln+ 10.2%

Cash Distribution
per Unit¥15,905 / unit

+ ¥267 / unit

+ 1.7%¥14,430 / unit

+ ¥1,475 / unit

+ 10.2%

Notable Activities (May 1, 2006 – Oct. 31, 2006)
Investment Sector

Asset Management Sector

Acquisition from Nomura
Real Estate groupz Sapporo North Plaza（¥6.82 bln）

z Secom Medical Bldg（¥11.5 bln）

Further internal growthz Steady increase in rents for both new
and renewed tenants

Financial Sector
Improvement in financial baseand capital efficiency
z 3rd public offering since inception (¥32.1 bln)z Adherence to conservative financial policies

z Implementation of refurbishment works

End-of-Period Total Portfolio: ¥259.1 bln

End-of-Period NOI return of 28 properties

Decrease in LTV （44.7% ⇒ 36.8%）（up ¥18.3 bln from previous period）

5.9%（5th period） ⇒ 6.1%（6th period）

Increase in BPS （¥557,000 ⇒ ¥605,000）

2

Growth of the Fund (1) “Changes in Performance”(¥(¥ mln)mln)(¥ mln)<OperatingRevenues>
Revenues><Operating

12,00010,739 10,914
9,810

10,000<Operating Income>

6,000

5,182
5,000

8,641
8,000
6,656

5,029

4,558
4,111

4,000

7,106

6,000

2,930

3,000

3,228

2,313

4,531
2,000

4,000

1,000

2,000

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP(Forecast)

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP(Forecast)(¥ mln)(¥)<Net Income>

5,000<Cash Distribution per Unit>

18,000
4,229

4,000
3,484
3,000

2,606

4,121

16,000

3,596

2,681

2,000
1,526

14,11414,00014,52015,15015,63815,905

15,50012,00010,00010,273

8,000

1,000
1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP(Forecast)

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP(Forecast)3

Growth of the Fund (2) “Changes in Fund Management”
Changes in Total Portfolio (by Acquisition Price)
300
250

Shinjuku Nomura Bldg

240.8（¥ bln）

259.1

Steady growth of portfolio size

210.1
184.6

200

z

151.5

Result of collaboration with Nomura Real Estate group

127.2

150

104.2
100

Diversification of portfolio

50
0

25.6%

21.0%

18.4%

16.1%

14.9%

Dec 2003 Apr 2004 Oct 2004
（Inception） （1st FP） （2nd FP）

Apr 2005（3rd FP）

Oct 2005（4th FP）

Apr 2006（5th FP）

Oct 2006（6th FP）

37.2%

30.4%

Changes in NOI Return of Portfolio

60%

1st FP
2nd FP
3rd FP
4th FP
5th FP
6th FP（Apr 04） （Oct 04） （Apr 05） （Oct 05） （Apr 06） （Oct 06）

7.2

6.2

6.1

6.1

5.9

6.0

[Breakdown by the number of properties held at each Period-end (%)]
15 properties for 1st FP
18 properties for 2nd FP
19 properties for 3rd FP
23 properties for 4th FP

7.2

Weight of Shinjuku Nomura Bldg decreased to 14.9%

Changes in Debt Financing – Fixture at Long Term

[Changes in NOI Return of Portfolio (%)]

NOI of portfolio

z

50%
40%
30.9
30% %

41.2
% 36.2
%

37.2
%

46.4
%

*Unaudited

33.8%

38.9
%

Apr May2005 2005*

Oct
2005

44.7
%

36.4
%

36.8 36.8
%
%

20%

6.5

6.7

6.6

6.6

7.1

6.2

6.3

6.4

6.3

6.8

6.1

6.2

6.1

6.4

6.1

 Changes in LTV (based on Total Assets)

Dec
Apr May
2003* 2004 2004*

Oct
2004

Apr Jun2006 2006*

Oct Dec
2006 2006*

Changes in Duration of Long Term Debts and Average Rate
5.1 5.0

5 year
5年

6.0

6.2

4 year
4年 3.95.9

6.1

3 year
3年

4.44.3
3.8 3.7

4.6 4.6
3.9

3.3

28 properties for 5th FP
30 properties for 6th FP

6.0

1.1% 1.1%
1.3%
2 year
2年 1.2%1.0% 1.1%
Dec
Apr May
Oct
Apr May
2003
2004 2004
2004
2005 2005

1.1% 1.3% 1.4% 1.4% 1.6%
Oct Dec
Oct
Apr Jun2005
2006 2006 2006 20064

Forecasts of the 7th Fiscal Period

Item
Reantal business revenues
Other rental business revenues
Total rental business revenues
Outsourcing expenses
Taxes and duties
Utility expenses
Insurance expenses
Repairs and maintenances
Other expenses
Depreciation
Total rental business expenses
Profits from rental business
Asset Management fees
Operating expenses
Operating profit and loss
Non-operating revenues
Non-operating expenses
Non-operating profit and loss
Current profit
Net income before tax
Corporate, local and enterprise taxes
Tax adjustment
Net income
Balance brought forward
Retained earnings

6th FP
7th FP (forecast)(¥ mln)(¥ mln)
9,531
9,809
1,208
1,104
10,73910,914
1,065
1,183
827
839
882
822
23
22
198
331
150
132
1,471
1,536
4,619
4,868
6,119
6,046
781
852
154
163
5,182
5,029
13
−
966
906
▲952
▲906
4,230
4,122
4,230
4,122
1
1
0
0
4,229
4,121
0
0
4,229
4,121

Difference(%)(¥ mln)
2.9
278
103
▲8.6
▲
1.6
174
11.1
118
12
1.5
59
▲6.8
▲
1
▲4.3
▲
66.8
132
18
▲12.2
▲
4.4
64
248
5.4
▲73
▲1.2
9.1
70
5.7
8
▲3.0
▲153
▲100.0
▲13
▲6.2
▲59
▲4.8
▲45
▲2.5
▲107
▲2.5
▲107
0
▲5.5
0.0
0
▲107
▲2.5
−
−
−
−

Outstanding units at period-end (unit)

265,903

265,9030

0.0

Cash distribution per unit (¥)

15,905

15,500

▲ 405

▲ 2.5

Rental Business Revenues
Forecasts were made for the 7th fiscal period on the basisthat the number of properties under management would
remain to be 30 without any new acquisition or sale.

Taxes and Duties
Property taxes, urban planning taxes and other duties for the
7th fiscal period were estimated on the basis that 29
properties out of 30, which are held at the end of the 6th fiscal
period, would be taxable for the 7th fiscal period.

Other Rental Business Revenues:
Revenues received as hourly parking
charges, utility charges, charges forusage of facility, etc.
Other Expenses:
Trust fees, commissions, othermaintenance fees, etc.
Operating Expenses:
Administrative service, custodian, andauditing fees, etc.
Non-operating Expenses: Interests on debts, cost of issuance ofunits, etc.

5

2. Future Management Policies

6Analysis of the Market

z Offer from originators have decreased; Private funds have continued to hold.

Real Estate
Investment Market

z Cap rate at the time of acquisition continued on a decreasing trend.

Exclusive information sources such as sponsors play an important role.

z Upward revisions of rent at renewal have increased in central and suburban Tokyo.

Office Leasing Market

z Lower vacancy rate in regional cities resulted in dramatic decrease in downward

revisions of rent.
These are ideal phenomena to enhance profitability of portfolio.

z 40 funds being available in the market, investors cast more strict eye at growthpotential and risk control.

J-REIT Market

z Key evaluation criterion is how to hedge risk for the higher interest rate in future.

Further bipolarization – more stringent selection of funds – will develop.

7Future Growth Strategies “Sustainability of Growth Cycle” 1
Growth Cycle of REIT

Growth of EPS

Internal Growthz Components of EPS
EPS ＝Improvementin EPSNet Income

Total Assets
×

Total Capital×

Total Assets

Total Capital

Profitability

Leverage

Total number of unit
BPS

• Leverage will fluctuate during the course of investment.
• Higher profitability and BPS are key factors to uplift EPS.

Improvement
in BPS

Stabilizationof unit priceEnlargementof assets bycapitalincreasez Image of growth of EPS
Periods in which LTV is highPeriods in which LTV is low

External Growth
The above cycle is to work continuously.

Stable growth (uplifting of EPS) over mid- to longterm is aimed at by improving profitability and BPS.

EPS: Earnings per share BPS: Book-value per share

833

Future Growth Strategies “Sustainability of Growth Cycle” 2
Stable Growth of EPS (Earning per Share)

Stable Growth of BPS (Book-value per Share)

1. Promotion of internal growth

1. Promotion of external growthz Increase in rental revenues (improved NOI return)z Enlargement of asset base along with capital⇒ Use of the current phase of rising rent levels

increase

2. Selective investment in prime properties

2. Sustainment of / improvement in unit pricez Acquisition of properties brings revenue growthz Keeping up with investors’
investors’ expectation of dividend

over midmid- to longlong-termz Acquisition of properties contributes to improvementof portfolio quality⇒ Proactive commitment to development projects(Averaging the age of properties, securementof retained earnings)

yield (Decrease in risk premium due to improved
credit)⇒ Uncompromising risk management system⇒ High transparency in disclosure of information

3. Implementation of strategic offeringz Capital increase at continuously rising public offer

price (growth of BPS)z Strategic acquisition corresponding to the capitalincrease
93. Financial Results

10Income Statement

Rental Business Revenues

Other rental business revenues

Monthly parking revenues
Incidental revenues
Other rental revenues
Miscellaneous revenues
Total rental business revenues

Rental Business Expenses

Operating Profit and Loss

Rental business revenues
Rental revenues
Common service charges

Property management fees
Taxes and duties
Utility expenses
Insurance expenses
Repairs and maintenances
Other expenses
Depreciation
Total rental business expenses

Profits from rental business
Asset managemetn fees
Selling and administrative expenses

Non-operating Profit and Loss

Current Profit and Loss

Item

Operating profit and loss
Non-operating revenues
Non-operating expenses
Interest expenses
Interest expenses on bonds
Amortization of bond issuance costs

Loan arrangement fees
Ivestment unit issuance costs
Other non-operating expenses

Non-operating profit and loss
Current profit
Net income before tax
Corporate, local and enterprise taxes
Tax adjustment
Net income
Balance brought forward
Retained earnings

5th Fiscal Period

6th Fiscal Period

Nov 1, 2005 - Apr 30, 2006(¥000)(%)

May 1, 2006 - Oct 31, 2006(¥000)(%)

8,815,222
7,027,837
1,787,384
995,303
189,348734,285
69,5052,164
9,810,526
981,358
666,061
726,301
22,318302,896
159,138
1,399,417
4,257,491
5,553,034
851,350
142,982
4,558,701
9,789
971,391
482,883
244,722
38,429101,660
103,696▲ 961,602
3,597,098
3,597,098
926
4
3,596,167
126
3,596,294

89.9
71.7
18.2
10.1
1.9
7.5
0.7
0.0
100.0
10.0
6.8
7.4
0.2
3.1
1.6
14.3
43.4
56.6
8.7
1.5
46.5
0.1
9.9
4.9
2.5
0.4
1.0
1.1
▲ 9.8
36.7
36.7
0.0
0.0
36.7
0.0
36.7

9,531,459
7,620,705
1,910,754
1,208,377
222,897
913,792
70,522
1,165
10,739,836
1,065,237
827,338
882,91223,439198,792
150,382
1,471,825
4,619,929
6,119,907
781,981
154,975
5,182,950
13,813
966,442
510,507
270,423
38,42968,116
63,58815,378▲ 952,628
4,230,321
4,230,321
1,057▲6
4,229,270
23
4,229,293

88.7
71.0
17.8
11.3
2.1
8.5
0.7
0.0
100.0
9.9
7.7
8.2
0.2
1.9
1.4
13.7
43.0
57.0
7.3
1.4
48.3
0.1
9.0
4.8
2.5
0.4
0.6
0.6
0.1
▲ 8.9
39.4
39.4
0.0
0.0
39.4
0.0
39.4

Rental Business Revenues
The total number of properties in the portfolio at the end of the 6th
period has become 30 as a result of new acquisition of
2 properties: Sapporo North Plaza and Secom Medical Building.
Occupancy rate at the end of the 6th period was 98.2%, down
0.2% from 98.4% at the end of the 5th period.

Taxes and Duties
Property taxes, urban planning taxes and other duties for the 6th
period were charged on the 27 properties out of the total 30 properties
held at the end of the 6th period.

Repairs and Maintenances
In addition to cost of repair of ¥198 million, there was capital
expenditure of ¥588 million, of which ¥183 million was an initial reserve.

Rental Profits: ¥6,119 mln (up ¥566 mln from the previous period)
Additional revenues from the newly acquired 2 properties: ¥245 million
Increase in revenues from the existing 28 properties:¥321 million

Incidental Revenues:

Revenues received as utility charges, charges forusage of facility and signboard, etc.
Other Rental Revenues: Hourly parking charges, etc.
Miscellaneous Revenues: Ground rents, etc.
Other Expenses:
Trust fees, commissions, other maintenance fees, etc.
Operating Expenses:
Administrative service, custodian, and auditing fees, etc.
Non-operating Expenses: Cost of restitution in integrum, etc.

11

Balance Sheet
AssetsAssetsItem
Current Assets
Cash and cash equivalents
Cash and cash equivalents in trust
Other current assets
Fixed Assets
Tangible assets
Propeties
Buildings
Lands
Properties in trust
Buildings
Lands
Other tangible assets
Other tangible assets
Intangible assets
Trust and other intangible assets
Investments and other assets
Security deposits
Investments and other assets
Deferred Assets
Issuing cost of corporation bondTotal assets

5th Fiscal Period
as of Apr 30, 2006(¥000)(%)
26,092,423
9.7%
8,074,521
3.0%
17,512,598
6.5%
505,3020.2%
242,304,198
90.2%
241,901,061
90.1%
3,741,462
1.4%
1,134,195
0.4%
2,607,266
1.0%
238,152,308
88.7%
69,056,085
25.7%
169,096,222
63.0%
7,290
0.0%
7,290
0.0%
2,001
0.0%
2,001
0.0%
401,1360.1%
211,230
0.1%
189,906
0.1%
162,436
0.1%
162,4360.1%
268,559,058
100.0%

6th Fiscal Period
as of Oct 31, 2006(¥000)(%)
28,237,092
9.8%
11,190,780
3.9%
16,678,494
5.8%
367,818
0.1%
259,699,550
90.2%
259,449,826
90.1%
15,253,597
5.3%
4,252,633
1.5%
11,000,964
3.8%
244,190,524
84.8%
70,325,629
24.4%
173,864,895
60.4%
5,704
0.0%
5,704
0.0%
2,031
0.0%
2,031
0.0%
247,692
0.1%
211,230
0.1%
36,4620.0%
124,0070.0%
124,0070.0%
288,060,650
100.0%

Liabilities and Capital

Net Assets

Liabilities

Item
Current liabilities
Accounts payable on trade
Short-term debts
Long-term debts due to repay w ithin 1 year
Other accounts payable
Advance receipts
Other current liabilities
Fixed liabilities
Corporation bonds
Long-term debts
Security deposits
Security deposits in trust
Other fixed liabilities
Total liabilities
Unitholders capital
Retained earnings
Deferred hedge P/L
Total Net Assets
Total Liabilitiesa and Net Assets

5th Fiscal Period
as of Apr 30, 2006(¥000)(%)
35,067,420
13.1%
511,875
0.2%
16,000,000
6.0%
15,500,000
5.8%
1,350,681
0.5%
1,643,280
0.6%
61,5830.0%
105,285,130
39.2%
30,000,000
11.2%
58,500,000
21.8%
166,548
0.1%
16,436,835
6.1%
181,7460.1%
140,352,551
52.3%
124,610,212
46.4%
3,596,294
1.3%
128,206,507
47.7%
268,559,058
100.0%

6th Fiscal Period
as of Oct 31, 2006(¥000)(%)
23,181,723
8.0%
553,3990.2%
2,000,000
0.7%
17,500,000
6.1%
1,252,622
0.4%
1,759,142
0.6%
116,559
0.0%
103,874,728
36.1%
30,000,000
10.4%
56,500,000
19.6%
660,3270.2%
16,705,318
5.8%
9,082
0.0%
127,056,452
44.1%
156,767,193
54.4%
4,229,293
1.5%
7,710
0.0%
161,004,197
55.9%
288,060,650
100.0%Cash and cash equivalent
Deposits in own name
Equivalent to security deposits received
Equivalent to reserved capital expenditure
Others(¥ mln)11,190
2,396
3,718
5,075

Deposits in trust
Equivalent to security deposits received
Equivalent to reserved capital expenditures
Others

16,678
10,277327
6,072

Tangible Assets
Acquisition
price

Accumulated
depreciation

Depreciation for
current term(¥ mln)End-of-term
book value

Properties

266,182

6,738(1,471)

259,444

Buildings in trust

77,016

6,690(1,434)70,325Lands in trust

173,864-

Buildings

4,300

48

Lands

15,301-

173,864(37)

4,252
15,301

Debts
Balance of interest-bearing debts (¥ mln)

Interest-bearing debts ratio

106,000

S/T debts + L/T debts + Corp bonds
Total assets

36.8%

L/T debts + Corp bonds
Total debts

81.6%

Long-term interest-bearing debt ratio

12Cash Distribution
Cash Distribution

Item

5th Fiscal Period

6th Fiscal Period

from Nov 1, 2005
to Apr 30, 2006

from May 1, 2006
to Oct 31, 2006

Retained Earnings(¥000)

3,596,294

4,229,293

Cash Distribution(¥000)

3,596,270

4,229,187

Cash Distribution per Unit(¥)

15,63815,905

Balance Carried Forward(¥000)

23

106

z Cash Distribution
The total outstanding number of units as of the period-end was
265,903, for which we paid out almost the entire amount of retained
earnings for the period, resulting in the cash distribution per unit
being ¥15,905.

Comparison with Forecasts

Item

Forecasts
announced
on Jun 22, 2006

Actual results
for the 6th
Fiscal Period

Difference Difference(amount)(%)

z Difference between forecasts and actual resultsz Operating Revenues

Operating Revenues(¥ mln)10,59010,739148

1.4

Current Profits(¥ mln)

3,838

4,230

392

10.2

Net Income(¥ mln)

3,837

4,229

392

10.2

(¥)

14,43015,905

1,475

10.2

Cash Distribution per Unit

Incremental revenues brought by Secom Medical Bldg: ¥84 million
Incremental revenues brought by the other 29 bldgs: ¥64 millionz Current Profits

Decremental expenses brought by reduction of taxes
and other rental business expenses: ¥235 million

13

Financial IndicesDefinition of IndicesComparison through Six Fiscal Periods

1st FP 2nd FP 3rd FP
Return on Assets (ROA)

4th FP

5th FP

6th FPROA = Current profits / Average total assets
Number of days used for annualization are as follows.
1st FP: 148 days, 2nd FP: 184 days, 3rd FP: 181 days
4th FP: 184 days, 5th FP: 181 days, 6th FP: 184 days

(%)

1.1

1.6

1.4

1.5

1.4

1.5

(%)

2.8

3.1

2.8

3.1

2.9

3.0

(%)

2.1

2.8

2.8

2.7

2.8

2.7

(%)

5.2

5.6

5.7

5.4

5.7

5.4

Capital-Asset Ratio

(%)

49.5

54.6

45.6

53.6

47.7

55.9

Capital-Asset Ratio = Unitholders equity / Total assets

Loan to Value Ratio (LTV①)

(%)

41.2

37.2

46.4

38.9

44.7

36.8

LTV1 = Total interest-bearing debts / Total assets

Loan to Value Ratio (LTV②)

(%)

48.0

42.6

51.5

42.4

46.0

36.0

Debt Service Coverage Ratio (DSCR)

(x)

11.45

11.05

9.95

10.08

7.92

8.35

Net Operating Income (NOI)(¥ mln)

3,350

4,451

4,970

6,125

6,952

7,591

Funds from Operation (FFO)(¥ mln)

2,193

3,555

3,719

4,727

5,034

5,739

(annualized)
Return on Equity (ROE)(annualized)

ROE = Net income / Average unitholders equity
Number of days used for annualization are as follows.
1st FP: 148 days, 2nd FP: 184 days, 3rd FP: 181 days
4th FP: 184 days, 5th FP: 181 days, 6th FP: 184 days

LTV2 = Total interest-bearing debts / Total appraisal value of property
DSCR = Net income before interest / Interest expenses
NOI = Rental business revenues– Rental business expenses + Depreciation
FFO = Net income + Depreciation+ Amortization of issuing cost of corporation bonds

14

Cash Flow Statement
5th Fiscal Period

6th Fiscal Period

Nov 1, 2005 – Apr 30, 2006(¥000)

May 1, 2006 – Oct 31, 2006(¥000)

3,597,098
1,399,445
725
38,429▲ 138
727,605▲ 22,812▲ 51,349▲ 17,526
138,097
203,434
18,241▲ 122,428
5,908,821
138▲ 548,029▲ 1,0095,359,920

4,230,321
1,471,853
808
38,429▲ 2,917780,930175▲ 13,054
50,71841,524▲ 101,964
115,861
86,56961,9686,761,226
2,917▲ 794,534▲ 1,482
5,968,126

II. Cash flow of Investment Activities
Purchase of tangible assets
Purchase of tangible assets in trust
Purchase of intangible assets
Security deposits paid
Security deposits received
Security deposits in trust paid
Security deposits in trust received
Security deposits paid
Long-term prepaid expenses
Net cash used in investment activities▲ 3,752,510▲ 27,867,046▲ 105
166,548▲ 478,226
2,062,794▲ 450▲ 29,868,995▲ 11,549,180▲ 7,455,511▲ 132▲ 8,835
502,614▲ 354,491
622,974▲ 6,052▲ 18,248,614

III. Cash flow of Financing Activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from corporation bonds
Issuance cost of corporation bonds
Proceeds from investment units
Cash distribution to unitholders
Net cash provided by financing activities

18,000,000▲ 23,000,000
19,500,000▲ 7,500,000
20,000,000▲ 140,026▲ 3,480,349
23,379,623

2,000,000▲ 16,000,000
32,156,980▲ 3,594,338
14,562,642

IV. Change in cash and cash equivalent
V. Starting balance of cash and cash equivalent
VI. Ending balance of cash and cash equivalent▲ 1,129,450
26,716,571
25,587,120

2,282,154
25,587,120
27,869,274

Item
I. Cash flow of Operating Activities
Income before tax
Depreciation
Amortization of long-term prepaid expenses
Amortization of corporate bond issuance costs
Interest income
Interest expenses
Scrapping cost of tangible assets
Change in rental receivables
Change in consumption tax refundable
Change in trade accounts payable
Change in other accounts payable
Change in rent received in advance
Change in security deposits received
Change in other accounts
SubtotalInterest received
Interest paid
Taxes and duties
Net cash provided by operating activities

15

Debt Financing
as of End of 6th FP (Oct 31, 2006)
LenderAmountType of interest

Interest rate (p.a.)

Repayment Date

Short-term debts(including long-term
debts due forrepayment
within one year)

5 finan insti¥2,000 mln

Floating

0.84000% (From Aug 31, 2006 to Nov 30, 2006)

Nov. 30, 2006

9 finan insti¥12,500 mln

Fixed (Note 1)

1.14500% (Weighted average after interest rate swap)

Dec. 8, 2006

2 finan insti¥3,000 mln

Fixed

1.04500%

Dec. 8, 2006

1 finan insti¥2,000 mln

Floating

1.06909% (From Aug 29, 2006 to Feb 28, 2007)

Aug. 28, 2007

Total short-term debts

12 finan insti¥19,500 mln

―

―

―

Long-term debts

6 finan insti¥8,500 mln

Fixed (Note 3)

1.00625% (Weighted average after interest rate swap)

Dec. 8, 2007

5 finan insti¥7,500 mln

Fixed (Note 2)

1.22500% (Weighted average after interest rate swap)

Feb. 26, 2008

1 finan insti¥3,000 mln

Fixed

1.05250%

Feb. 26, 2008

4 finan insti¥4,000 mln

Floating

0.91909% (From Aug 29, 2006 to Feb 26, 2007)

Aug. 26, 2008

5 finan insti¥8,000 mln

Fixed (Note 1)

1.66750% (Weighted average after interest rate swap)

Dec. 8, 2008

4 finan insti¥5,000 mln

Fixed

1.51625%

Dec. 8, 2008

2 finan insti¥2,000 mln

Fixed (Note 4)

1.19000% (Weighted average after interest rate swap)

Feb. 26, 2009

1 finan insti¥3,000 mln

Fixed (Note 2)

1.77500% (Weighted average after interest rate swap)

Feb. 26, 2010

1 finan insti¥1,000 mln

Fixed

1.50625%

Feb. 26, 2010

Remarks

Unsecured/
Unguaranteed―

Unsecured/
Unguaranteed

5 finan insti¥7,500 mln

Fixed (Note 4)

1.68000% (Weighted average after interest rate swap)

Feb. 26, 2011

5 finan insti¥5,000 mln

Fixed

1.43750%

Aug. 26, 2012

1 finan insti¥1,000 mln

Fixed

1.53625%

Aug. 26, 2012

1 finan insti¥1,000 mln

Fixed

1.75250%

Feb. 26, 2013

Total long-term debts

24 finan insti¥56,500 mln

―

―

―

―

Total debts

25 finan insti¥76,000 mln

―

―

―

―

1st series corp bond Private placement¥5,000 mln

Fixed

1.85%

Mar. 16, 2015

2nd series corp bond Private placement¥5,000 mln

Fixed

2.47%

Mar. 16, 2020

3rd series corp bondPublic offering¥10,000 mln

Fixed

1.19%

Nov. 29, 2010

4th series corp bondPublic offering¥10,000 mln

Fixed

2.05%

Nov. 30, 2015

Unsecured/
Unguaranteed

Total corporation bond―

¥30,000 mln

―

―

―

―

Grand total

25 finan insti¥106,000 mln

―

―

―

―

(Note 1) Fixed by interest rate swap from Dec 8, 2003
(Note 2) Fixed by interest rate swap from May 27, 2004
(Note 3) Fixed by interest rate swap from Dec 8, 2004
(Note 4) Fixed by interest rate swap from Feb 27, 200616

Unitholders
Number of Unitholders

5th FP

Breakdown of Financial Institutions

Individuals
12,577 （95.8%）

Financial Institutions
Other domestic corporations
Foreign corporations

178 （1.4%）
215 （1.6%）
159 （1.2%）

Individuals
14,573 （95.8%）

Financial Institutions
Other domestic corporations
Foreign corporations

191 （1.3%）
242 （1.6%）
199 （1.3%）

13,129Unitholders

6th FP

5th Fiscal Period

6th Fiscal Period

51,576
58,958
10,197
5,516
18,080144,327

58,53071,0059,185
5,458
19,426
163,604

Banks
Trust BanksLife companies
Non-life companies
Other financial instituions(Apr. 2006)(Oct. 2006)(Unit)

22.4%
25.6%
4.4%
2.4%
7.9%
62.8%

22.0%
26.7%
3.5%
2.1%
7.3%
61.5%

Top 10 Unitholders

15,205Unitholders

Unitholders
0%

25%

50%

75%

100%

Number of Investment Units
Individuals
33,226 units（14.4%）

5th FP

Financial Institutions
144,327units（62.8%）(Apr. 2006)

Other domestic
Foreigncorporations corporations
24,146 units 28,271 units（10.5%）（12.3%）

229,970 units

Individuals
36,878 units（13.9%）

6th FP

Financial Institutions
163,604 units（61.5%）

Other domestic
Foreigncorporations corporations
27,032 units 38,389 units（10.2%）（14.4%）(Oct. 2006)

265,903 units

Units

Ratio

1 Japan Trustee Services Bank, Ltd.

24,3439.15%

2 NikkoCiti Trust and Banking Corporation

20,3237.64%

3 Nomura Real Estate Development Co., Ltd.

13,326

5.01%

4 Trust & Custody Services Bank, Ltd.

11,1894.21%

5 The Master Trust Bank of Japan, Ltd.

11,165

4.20%

6 Kawasaki Gakuen

7,000

2.63%

7 The Hiroshima Bank, Ltd.

5,772

2.17%

8 The Bank of IKEDA, Ltd.

5,494

2.07%

9 The Gibraltar Life Insurance Co., Ltd.
National Mutual Insurance Federation of
10
Agricultural Cooperatives
Total

5,111

1.92%

4,393

1.65%

108,11640.66%(The ratio of Top 10 Unitholders for the previous term: 39.2%)
0%

25%

50%

75%

100%

17

4. Fund Management Results

18

Results of Investment Sector
Major Results

Investment EnvironmentszSale by corporate owners has been on a decreasing trend.

zSlippage of cap rate has become prominent nationwide.

z

Acquisition (particularly from the third parties) of office buildings
by J-REITs has decreased.

zCollaboration
Collaborationwith
withNomura
NomuraReal
RealEstate
Estategroup
group
1. Acquisition of properties developed by NREDz

Secom Medical Building

Certain amount of information about development projects has
continued to be brought.

Development and asset management
by Nomura Real Estate Holdings• Highly competitive investment circumstances continue.
• Strong tie with sponsors becomes essential.
z< Number of information about acquirable properties >* Office use onlyz

5th fiscal period160zDevelopment

Asset management

Nomura Real Estate
Development

Nomura Real Estate
Asset Management

Power of informationcollected across the group
Professional know-how ofdevelopment
Strong capability of tenantleasingzzHigh standard of risk andportfolio management
Competitive pricing power,
uncompromising due
diligence

2. Collaboration with private funds
6th fiscal period

142z• Cleared standard for consideration : 107• Once considered in detail: 23• Currently under consideration: 15

Sapporo North Plaza• Acquisition from a private fund managed by Nomura Real
Estate group• Prompt acquisition after capital increase at the beginning of
the period

19Properties Acquired during the 6th Fiscal Period
Secom Medical Building

Sapporo North Plaza

Location

Kita-ichijo-nishi, Chuo-ku
Sapporo City

Floor Space

18,842.51m2（5,699.85 tsubo）

Type ofOwnership(Land) Ownership(Bldg) Ownership【Features】• At the heart of business/commercial

Location

Niban-cho, Chiyoda-ku,
Tokyo

Floor Space

8,683.73m2（2,626.82 tsubo）

Type ofOwnership(Land) Ownership(Bldg) Ownership

AcquisitionPrice¥11,500 mln

area of Sapporo

Acquisition
Price
Date of
Acquisition• Connection to Sapporo Station (JR)by underpass expected to completein 2010【Policy】• Leasing corresponding to market¥6,820 mln

Jun 1, 2006

recovery → Greater revenues due tohigher occupancy rate

• Renovation plan in view ofunderpass connection → Morestable management base【Features】• 20-year term contract with SECOM• Good accessibility by both Kojimachi
and Yotsuya stations (subway)

Date of
Acquisition• Fairly new (built in Feb 2005) andseismically isolated building【Policy】

Sep 1, 2006

• Long-term leasing contract withexcellent tenant → Improved stabilityof portfolio revenue

20Diversification of Portfolio (1) “Assets”
Diversification by Location (based on Acquisition Price)End
End ofof 4th
4th FPFP (Oct.
(Oct. 2005)
2005)

End
End ofof 5th5th FPFP (Apr.
(Apr. 2006)
2006)
Other Cities

Other Cities
Central Tokyo

10.5%

End
End ofof 6th
6th FPFP (Oct.
(Oct. 2006)
2006)

Central Tokyo

16.7%

67.0%

72.6%
Vicinity of Tokyo

Vicinity of Tokyo

Central Tokyo

18.2%

66.7%
Vicinity of Tokyo

16.2%

16.9%

Other Cities

15.1%

Diversification by Property (Top 10 Named based on Acquisition Price)End
End ofof 4th
4th FPFP (Oct.
(Oct. 2005)
2005)
Other 13 bldgs
23.8%
NOF Technoport
Kamata Center Bldg

End
End ofof 5th5th FPFP (Apr.
(Apr. 2006)
2006)

Shinjuku Nomura Bldg
18.4%

3.1%
NOF Tameike Bldg

3.1%

NOF Toyo-cho Bldg

4.5%
NOF Shiba Bldg
4.8%
NOF Shibuya Koen-dori Bldg
5.7%

JAL Bldg
15.7%
NOF Nihonbashi
Honcho Bldg
9.8%
Tennozu Park
Side Bldg
7.0%

Shinjuku Nomura Bldg

Shinjuku Nomura Bldg
Other 18 bldgs
30.3%

Nishi-Shinjuku
Showa Bldg
3.7%
NOF Kawasaki
Higashiguchi Bldg
3.9%
NOF Shiba Bldg
4.2%
NOF Shibuya Koen-dori Bldg
5.0%

14.9%

16.1%
Other 20 bldgs

NOF Toyo-cho Bldg

3.5%
3.6%
NOF Kawasaki
Higashiguchi Bldg

End
End ofof 6th
6th FPFP (Oct.
(Oct. 2006)
2006)

JAL Bldg
13.7%
NOF Nihonbashi
Honcho Bldg
8.6%
Tennozu Park
Side Bldg
6.1%
NOF Midosuji Bldg
5.4%

JAL Bldg

33.7%
Nishi-Shinjuku
Showa Bldg
3.4%
NOF Kawasaki
Higashiguchi Bldg
3.7%

12.8%
NOF Nihonbashi
Honcho Bldg
7.9%
Tennozu Park
Side Bldg
5.7%

NOF Shiba Bldg

NOF Midosuji Bldg

3.9%
Secom Medical Bldg
4.4%

NOF Shibuya Koen-dori Bldg

5.0%

4.6%

2１

Diversification of Portfolio (2) “Tenants”
Top 10 Tenants (by Space)

Diversification in Business (by Space)
End of 6th FP (Oct 31, 2006)

Industry

Property

Expiry ofcontract

Real Estate

JAL Bldg.

Mar. 31, 2015

2

XYMAX AXIS CORPORATION Real Estate NOF Toyo-cho Bldg. Nov. 30, 2009

3

NOF Technoport
Mar. 31, 2007
Kamata Center Bldg.
Electronic
Faret Tachikawa
Dec. 31, 2007
Devices
Center Square
NOF Shin-Yokohama
Sep. 30, 2008
Bldg.

Tenant1

Flagship Properties
Private Company

End of 6th FP (Oct 31, 2006)

Weight in
portfolio(%)

Weight forprevious
term (%)(Note 2)

42,084.11

13.6

14.6

Chemical 1.7%

18,218.17

5.9

6.3

Pharmaceutical 1.9%

Leasedspace（㎡）

Others 2.0%

Other 19businesses

IT

12.8%

16.2%

3,699.38

1.2

1.3

255.150.1

0.2

6,547.74

2.1

2.3

8,821.24

2.8−

Dec. 31, 2006

755.690.2

0.3

Shinjuku Nomura Bldg. May 31, 2008

1,206.55

0.4

0.4

NOF Utsunomiya Bldg. Dec. 31, 2007

1,140.85

0.4

0.4

Nov. 30, 2007

1,847.63

0.6

0.6

Mar. 31, 2007

2,834.48

0.9

1.0Electronics

Shinjuku Nomura Bldg. Nov. 30, 2013

3,607.48

1.2

1.2

6.9%

Nomura Real Estate
Development Co., Ltd.

Real Estate Nomura Osaka Bldg. Nov. 30, 2013345.370.1

0.1

Nov. 30, 2013

1,266.19

0.4

0.4

7

FUJI XEROX OFFICE SUPPLY

Wholesale

Apr. 30, 2007

4,160.94

1.3

1.4

8

FUJITSU COMMUNICATIONSERVICES LIMITEDIT

NomuraYotsubashi Bldg.
NOF Surugadai
Plaza Bldg.
Tennozu Park
Side Bldg.

Feb. 28, 2007

3,598.83

1.2

1.2

Jan. 31, 2010

2,774.75

0.9

1.0

647.010.2

0.2

3,221.93

1.0

1.1

107,033.49

34.5

FUJITSU LIMITED

Secom Medical Bldg. Feb. 28, 2025
4

5

6

SECOM Co., Ltd.

Nomura Facilities Co., Ltd.

Services

Real Estate

NOF Sendai
Aoba-dori Bldg.

NomuraYotsubashi Bldg.
NomuraHiroshima Bldg.

NOF Midosuji Bldg.
910

Shinsei Bank, Limited.
DAIKEN CORPORATION
Total

Securities 2.2%
Construction
2.4%
Banking 2.6%

Total

512

Service
16.0%

tenants

Insurance 4.4%

Real Estate 4.7%
Retail
4.8%

Airline14.3%
Wholesale
8.0%(Note) Broken-down by business of the sub-lessees in case of sub-lets.

Medium-Term Contracts

Bank

Hiroshima Tatemachi
Jan. 31, 2010
NOF Bldg.
Residential
NOF Nihonbashi
Feb. 14, 2007
Materials
Honcho Bldg.

Medium-term contracts expiring after three years from now:
End of 6th FP(Oct 31, 2006)

26.19% (based on floor space)22.21% (based on contract rent)

22

Results of Asset Management Sector
Investment Circumstances of the 6th Fiscal Periodz Overview of office market in Tokyo’s business district(5 central wards)
Rent per tsubo(monthly) in Yen

Vacancy rate(%)

4.5

Rent per tsubo(monthly) in Yen
Vacancy rate

4.0
3.5

Results of the 6th Fiscal Period

PursuitPursuitofofinternalinternalgrowth,
growth,andand
stablerevenuebaseover- totolong-term
mid
long
stable revenue base overmidmidlong-term

20,00019,500

Right management andcontrol of properties

Competitivenessenhanced by renovation
works

19,0003.0
2.5

18,5002.0

18,0001.5

17,5001.0

Rise
Rise inin rent
rent

Improvement in profitabilityof portfolio

Increase in asset value

Improved portfolio NOI

Improved appraised value

5.9％
5.9％ ⇒ 6.1％
6.1％

+ 5.2％
5.2％* For 28 properties held at the endof 5th period* For 30 properties held at the endof 6th period

17,0000.5

16,5000.0'05/12

'06/3

'06/6

'06/9
(Source: Miki Shoji)z Vacancy rate : 4.2%（’05/12） → 2.9%（’06/11） （▲1.3%）
z Average asking rent : ¥17,844 / tsubo (’05/12）→ ¥19,221 / tsubo （’06/11） （+7.7%）

23

Increase in Earning Power of Portfolio
Comparison of Rent of the Same Space before Move-out andafter Move-in

Stable Occupancy Rate
5th FP (results)* Change = ((Rent of move-in / rent of move-out) – 1) X100 (Including common area charges)

7th FP (forecasts)

6th FP (results)

100.0%

50%

Average change +12.1%+38.4%
98.4%
95.0%

40%

98.2%

97.2%

96.9%

30%
20%

+5.7%

10%

90.0%

-2.3%

0%

Central Tokyo
Vicinity of Tokyo
Other Cities
Average85.0%
Oct 2005（Start of 5th FP)-10%Central Tokyo
Space vacated& re-occupied

Oct 2006（End of 6th FP）

Apr 2006（End of 5th FP)

878㎡

Vicinity of Tokyo

Other Cities

2,404㎡

1,647㎡

Apr 2007（End of 7th FP）

Changes in Rent of Renewed TenantsComparison of Rent before and after Upward Revision

100%* Change = ((Rent of renewed contracts / rent of previous contracts) – 1) x 100

4.0%

6.5%

1.9%
14.6%

Up

21.0%
32.9%

80%

Average change +6.9%

8.0%

52.0%
60%

(Including common area charges)

10.0%

69.6%

83.3%

Flat
72.9%

40%

+7.0%

+6.8%

+6.0%

6.0%
4.0%

70.0%
64.7%

2.0%

20%

44.0%

Down
23.9%

0.0%

14.8%

12.5%

9.0%

0%
Number of
renewedcontracts

Central Tokyo
2.4%

1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

50

46

54

48

100

85

Space subject
to revision

8,184㎡

Vicinity of Tokyo

Other Cities

2,427㎡

443㎡

24

Enhancing Competitiveness of Property by Renovation
Major Renovation Works during the 6th Fiscal Periodz Nomura Hiroshima Bldg
【Entrance Renovation】

z NOF Nagoya Yanagibashi Bldg
【Entrance Renovation】

Capital Expenditures and Repair Costsz Changes in Depreciation and Capital Expenditures
1,600(¥ mln)Depreciation

1,400

Capital Expenditures

1,200
1,000
800
600
400
200
0
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FPz Ratio of Repair Costs in Rental Business Revenues
5.0%
4.0%
3.0%
2.0%

Effects of Renovation

1.0%① Improve tenants’ satisfaction② Differentiate it in the surrounding buildings

0.0%
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

25

End-of-Period Appraisal Value

Other Cities

Vicinity of Tokyo

Central Tokyo

Property
Shinjuku Nomura Bldg
JAL Bldg
NOF Nihonbashi Honcho Bldg
Tennozu Park Side Bldg
NOF Shibuya Koen-dori Bldg
Secom Medical Bldg
NOF Shiba Bldg
Nishi-Shinjuku Showa Bldg
NOF Tameike Bldg
NOF Shinagawa Konan Bldg
NOF Surugadai Plaza Bldg
NOF Kanda Iwamoto-cho Bldg
NOF Minami Shinjuku Bldg
Total Central TokyoNOF Toyo-cho Bldg
NOF Technoport Kamata Center Bldg
Crystal Park Bldg
Faret Tachikawa Center Square
NOF Kawasaki Higashiguchi Bldg
NOF Yokohama Nishiguchi Bldg
NOF Shin-Yokohama Bldg
Total Suburban of Tokyo
Sapporo North PlazaNOF Sendai Aoba-dori Bldg
NOF Utsunomiya Bldg
NOF Nagoya Yanagibashi Bldg
NOF Midosuji Bldg
Nomura Osaka Bldg
Nomura Yotsubashi Bldg
NOF Kobe Kaigan Bldg
Hiroshima Tatemachi NOF Bldg
Nomura Hiroshima Bldg
Total Other Cities
Grand Total

Acquisition PriceBook Valueat End of 6th FP

Appraisal Valueat End of 6th FP

Book Valueat End of 5th FP(¥ mln)(¥ mln)(¥ mln)(¥ mln)(¥ mln)Change38,73033,08020,60014,80012,00011,50010,000
8,800
7,400
5,500
5,150
3,080
2,280
172,920
7,550
6,430
3,700
3,290
9,500
5,050
3,600
39,120
6,820
3,200
2,970
3,550
12,900
6,410
3,940
3,280
2,100
1,930
47,100259,140

39,12533,80520,557
14,067
12,583
11,532
10,166
8,793
7,655
5,422
5,178
3,059
2,277
174,225
7,175
6,268
3,721
3,124
9,688
5,071
3,449
38,499
6,858
3,171
2,772
3,642
12,811
6,339
3,798
3,096
2,081
2,152
46,725
259,449

54,20031,22023,50017,90013,90011,50010,40010,000
7,900
6,260
5,520
3,550
2,550
198,400
8,100
7,040
3,900
4,740
9,690
5,952
3,920
43,342
6,825
3,380
3,320
3,590
13,300
8,560
5,510
3,420
2,100
2,290
52,295
294,037

48,00030,94022,20016,90013,90011,50010,300
9,110
7,510
5,960
5,430
3,430
2,460
187,640
7,950
6,870
3,800
4,050
9,680
5,580
3,790
41,720
6,820
3,220
3,210
3,580
13,100
7,700
4,950
3,320
2,100
2,080
50,080279,440

6,200
280
1,300
1,000
100
890
390
300
90
120
90
10,760
150
170
100
690
10
372
130
1,622
5
160
110
10
200
860
560
100
210
2,215
14,597

12.9%
0.9%
5.9%
5.9%
1.0%
9.8%
5.2%
5.0%
1.7%
3.5%
3.7%
5.7%
1.9%
2.5%
2.6%
17.0%
0.1%
6.7%
3.4%
3.9%
0.1%
5.0%
3.4%
0.3%
1.5%
11.2%
11.3%
3.0%
10.1%
4.4%
5.2%

（Ａ）

（Ｂ）

Difference between Appraisal
Value and Book Value¥34,587 mln**

Difference from Previous
Term* For these buildings acquired during the 6th FP,
appraisal value is that of the time of acquisition.

（¥130,074/unit）（Ｂ）−（Ａ）

26

Move-Ins and Move-Outs

Nomura Hiroshima Bldg
Hiroshima Tatemachi NOF Bldg
NOF Kobe Kaigan Bldg
Nomura Yotsubashi Bldg
Nomura Osaka Bldg
NOF Midosuji Bldg
NOF Nagoya Yanagibashi Bldg
NOF Utsunomiya Bldg
NOF Sendai Aoba-dori Bldg
Sapporo North PlazaNOF Shin-Yokohama Bldg
NOF Yokohama Nishiguchi Bldg
NOF Kawasaki Higashiguchi Bldg
Faret Tachikawa Center Square
Crystal Park Bldg

-200

Move-outs
Move-ins

NOF Technoport Kamata Center Bldg

NOF Toyo-cho Bldg
NOF Minami Shinjuku Bldg
NOF Kanda Iwamoto-cho Bldg
NOF Surugadai Plaza Bldg
NOF Shinagawa Konan Bldg
NOF Tameike Bldg
Nishi-Shinjuku Showa Bldg
NOF Shiba Bldg
Secom Medical Bldg
NOF Shibuya Koen-dori Bldg
Tennozu Park Side Bldg

-400

NOF Nihonbashi Honcho Bldg

-300

JAL Bldg-100

Shinjuku Nomura Bldg

0

ChangeCentral Tokyo+305 tsubo-396 tsubo-90 tsubo
Vicinity of Tokyo+791 tsubo-730 tsubo+60 tsubo
Other Cities+800 tsubo-462 tsubo+338 tsubo

1,897 tsubo (6,273㎡) :about 2.0% of weighted averageof total floor spaceMove-outs 1,589 tsubo (5,254㎡) :about 1.7% of weighted averageof total floor space⇒ Change 308 tsubo (1,019㎡) : More move-ins than move-outs

Move-outs

Move-ins

Move-ins

Space occupied by move-ins and vacated by move-outsz(tsubo)
400

300

200

100

27

Results of Financial Sector
NOF’s Dividend Yield vs. 10-year Government Bond Yield（2005/12/1~2006/12/19）(%)
4.0
10年国債利回り
10-year
GB yield

NOF分配金利回り
NOF
dividend yield

Major Achievements
Improvement
Improvementininfinancial
financialstability
stabilityandandmaneuverability
maneuverability

3.5
3.0

3rd capital increase by public
offering after inception

要UPDATE

2.5
2.0

Pull-up of Commitment Line

1.5
1.0
‘05/12

‘06/3

‘06/6

‘06/9

(Note) NOF’s dividend yield is calculated on forecasts.

‘06/12

Improvement in credit rating

Source: Bloomberg

Objectives of Well-balanced Debt Managementz Maintenance of LTV at a conservative levelz Prolongation of periods and fixing of interest ratesz Diversification of repayment dates(4 - 5 years on average)z Diversification of financing methods

Securement of financing ability that enables
us to sustain growth into the futurez Effective use of security deposits received, etc.

28

Additional Issuance of Investment Units / Credit Ratings
Effects of Capital Increase

Issuance of Investment Units (Capital Increase)z Changes in LTV

z Overview of capital increase50%•• Number
Number ofof units
units issued
issued (public(public offering)offering)

34,80034,800•• Number
Number ofof units
units issued
issued (third(third party
party allotment)
allotment)

1,133
1,133

•• Offer
Offer price
price

45%

¥557,000
End of 5th FP¥605,000
End of 6th FP

600

550

500
35%

30%

450

400
1st 2nd 3rd
4th 5th
6th
第1期
FP 第2期
FP 第3期
FP 第4期
FP 第5期
FP 第6期
FP

1st 第2期
2nd 第3期
3rd 第4期
4th 第5期
5th 第6期
6th
第1期
FP
FP
FP
FP
FP
FP

Status of Credit Rating

Unit Price
1,000
900

f ¥926,000
at May 2006

800
e ¥740,000
at May 2005

700

RatingCompanyd ¥588,000
at May 2004
c ¥500,000
at inception’04/12’05/6’05/12’06/6’06/10RatingOutlook

S&P

Long-term Corporate Credit Rating: A
Short-tem Corporate Credit Rating: A-1

StableMoody’sIssuer Rating: A2*

StableR&I

Issuer Rating: A+

Positive

600

’04/6

(end of each period)(¥000)＋8.6%

May
May 25,25, 2006
2006 (public(public offering)offering)(¥000)

400’03/12650

40%

z Changes in offer price of units by public offering

500

36.8%
End of
6th FP▲7.9%

Jun
Jun 23,23, 2006
2006 (third(third party
party allotment)
allotment)

1,100

44.7%
End of
5th FP¥926,100¥926,100 // unit
unit•• Total
Total sum
sum raised
raised ¥32,156¥32,156 mln
mln•• Payment
Payment datedatez Changes in BPS(end of each period)* Upgraded to A2 from A3 effective November 17, 2006.

29

Overview of Financial Status
Financial Status (as of Oct. 31, 2006)
z LTV (loan to value on a basis of total assets)z Average remaining duration of long-term fixed debts(including Corporation Bonds)
End of 6th fiscal period: 36.8%

4.6 years

Previous term: 5.1 years(▲ 7.9% from previous term)
Decrease in LTV by capital increase⇒ Securement of acquisition capacity
z Status of Debts■ ST vs. LT Debts
Long-term*¥86.5 bln
(81.6%)

Shot-term¥19.5 bln
(18.4%)*Including Corporation Bonds

z

1.44%

z

■ Floating vs. Fixed Rates
Fixed rate*¥98.0 bln
(92.5%)

Floating rate
¥8.0 bln(7.5%)

Weighted average of interest rate of all the debts
Previous term: 1.29%

List of lenders (Total 25 financial institutions)
LenderTotal amountof debt
remaining

Bank of Tokyo-Mitsubishi UFJ
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking
Sumitomo Trust & Banking Corp.
Norinchukin Bank
Dai-Ichi Mutual Life Insurance
Nomura Trust and Banking
Mitsui Life insurance
Chiba Bank
Iyo Bank
Chuo Mitsui Trust and Banking
Taiyo Life Insurance
Daido Life Insurance

13.9
7.0
5.2
5.2
5.0
5.0
4.0
4.0
3.0
2.5
2.0
2.0
2.0

LenderDevelopment Bank of Japan
Zen-Kyo-Ren
Hachijuni Bank
Hiroshima Bank
Mizuho Corporate Bank
Keiyo Bank
Meiji Yasuda Life Insurance
Mitsui Sumitomo Insurance
Chugoku Bank
Bank of Fukuoka
Aozora Bank
Yamanashi Chuo Bank(¥ bln)Total amountof debt
remaining

2.0
2.0
1.5
1.5
1.2
1.0
1.0
1.0
1.0
1.0
1.0
1.0

Total borrowings

76.0

Corporation Bonds

30.0*Including Interest Rate Swaps

30

Post-Balance Sheet Financial Status
Financial Status (as of Dec. 20, 2006)
z LTV (loan to value on a basis of total assets)z

as of Dec. 20, 2006: 36.8% (unaudited)

Average remaining duration of long-term fixed debts(including Corporation Bonds)
4.6 years

z Refinancing (Total ¥17.5 billion)z

Weighted average of interest rate of all the debts

・ Prolongation of borrowing periods
・ Financial institutions to bank with 25 → 28z Diversification of maturityz Status of Debts■ ST vs. LT Debts
Long-term*¥104.0 bln（98.1%）

Shot-term¥2.0 bln（1.9%）

1.56%■ Floating vs. Fixed Rates
Fixed rate*¥100.0 bln（94.3%）

Floating rate
¥6.0 bln（5.7%）

20(¥ bln)19
Borrowings

175

Corporation Bonds

15
15
11
10
10
6.5

5

4

5
2
0
*Including Corporation Bonds*Including Interest Rate Swaps

6

7

3

2

9

11

13

5

15

'06.11〜〜'08.10 〜'09.10 〜'10.10 〜'11.10'07.10

17

19

21

23

25

27

29

31

33

〜'12.10 〜'13.10 〜'14.10 〜'15.10 〜'16.10 〜'17.10 〜'18.10 〜'19.10 〜'20.10(fiscal period)

31Appendix

32

List of Property
As of End of 6FP (Oct 31, 2006)

Other Cities

Vicinity of Tokyo

Central Tokyo

Property

Location

Nishi-Shinjuku,
Shinjuku Nomura Bldg
Shinjuku-ku
Higashi-Shinagawa,
JAL Bldg
Shinagawa-ku
Nihonbashi Honcho,
NOF Nihonbashi Honcho Bldg
Chuo-ku
Higashi-Shinagawa,
Tennozu Park Side Bldg
Shinagawa-ku
Udakawa-cho,
NOF Shibuya Koen-dori Bldg
Shibuya-ku
Nibancho,
Secom Medical Bldg
Chiyoda-ku
Shiba,NOF Shiba Bldg
Minato-ku
Nishi-Shinjuku,
Nishi-Shinjuku Showa Bldg
Shinjuku-ku
Akasaka,NOF Tameike Bldg
Minato-ku
Higashi-Shinagawa,NOF Shinagawa Konan Bldg
Shinagawa-ku
Kanda Surugadai,
NOF Surugadai Plaza Bldg
Chiyoda-ku
Iwamoto-cho,
NOF Kanda Iwamoto-cho Bldg
Chiyoda-ku
Sendagaya,
NOF Minami Shinjuku Bldg
Shibuya-ku
Shinsuna,
NOF Toyo-cho Bldg
Koto-ku
Minami-Kamata,NOF Technoport Kamata Center Bldg Ota-ku
Gotenyama,
Crystal Park Bldg
Musashino City
Akebono-cho,
Faret Tachikawa Center Square
Tachikawa City
Kawasaki-ku,
NOF Kawasaki Higashiguchi Bldg
Kawasaki City
Nishi-ku,
NOF Yokohama Nishiguchi Bldg
Yokohama City
Kohoku-ku,
NOF Shin-Yokohama Bldg
Yokohama City
Chuo-ku,
Sapporo North Plaza
Sapporo City
Aoba-ku,NOF Sendai Aoba-dori Bldg
Sendai City
Baba-dori,
NOF Utsunomiya Bldg
Utsunomiya City
Nakamura-ku,
NOF Nagoya Yanagibashi Bldg
Nagoya City
Chuo-ku,
NOF Midosuji Bldg
Osaka City
Chuo-ku,
Nomura Osaka Bldg
Osaka City
Nishi-ku,
Nomura Yotsubashi Bldg
Osaka City
Chuo-ku,
NOF Kobe Kaigan Bldg
Kobe City
Naka-ku,
Hiroshima Tatemachi NOF Bldg
Hiroshima City
Naka-ku,
Nomura Hiroshima Bldg
Hiroshima City

Total

Floors(Ground)

Total Floor Space(Note 1, 2)

1978. 550

117,258.88

1996. 626

①81,421.13②25,260.48

Completion

1961. 4

(Entire building)Leasable Space Leased Space Occupancy
（㎡）
（㎡）
Rate

31,589.26

31,349.11

99.2%

42,084.11

42,084.11

100.0%

Number of Standard Floor
Air
Room
PML
Tenants
Space （㎡） Conditioning Height （㎜） (Note 3)
Each 1/4
86
1,262.37
2,600
5%
floor
Each 1/62,700
6%
12,214.55
floor

Acquisition
Date

Acquisition
Price (￥mln)

2003.1238,7302005. 333,0808

29,430.67

19,233.28

19,233.28

100.0%

13

2,615.23

Each span

2,650

14%

2003.12

20,6001995. 121

①43,893.46②17,587.30

18,051.61

18,051.61

100.0%

14

1,331.14

Each 1/4
floor

2,650

6%

2004. 214,8001987. 985,358.55

3,420.16

3,420.16

100.0%

3

442.38Each span

2,500

12%

2004. 912,0002005.2

78,683.73

8,821.24

8,821.24

100.0%

1

980.00Each span

2,500〜2,7004%

2006. 911,5001991. 3

7

11,425.20

8,165.10

7,927.28

97.1%

91,260.41

Each span

2,600

14%

2004. 5

10,0001982. 411

①10,902.22②5,858.26

5,659.96

5,466.42

96.6%

18

585.99Each span

2,500

13%

2005.118,800

1959. 896,478.50

4,715.20

4,275.52

90.7%

12

519.06

Each span

2,500

17%

2005. 97,400

1987.118

10,077.02

7,850.99

7,850.99

100.0%

5928.29Each floor

2,600

11%

2003.12

5,500

1997. 48

5,782.27

4,160.94

4,160.94

100.0%

1

626.33

Each 1/2
floor

2,700

6%

2004. 2

5,150

1988. 7

94,698.97

4,076.38

4,076.38

100.0%

8

480.07

Each floor

2,550

14%

2004. 23,080

(Extension 1968.4)

1986. 38

3,160.05

2,464.71

2,464.71

100.0%

5

327.66

Each floor

2,500

12%

2004. 62,280

1989.117

18,051.08

18,218.17

18,218.17

100.0%

1

1,986.46

Each span

2,550

14%

2003.12

7,550

1990. 911

21,516.54

13,683.46

13,370.32

97.7%

14

1,148.45

Each span

2,650

10%

2003.126,430

1991.10113,900.85

3,900.85

100.0%

11

193.93〜
590.35

Each floor

2,500

14%

2006. 2

3,700

1994.12126,853.38

6,853.38

100.0%

16

1,099.32

2,600

10%

2003.123,290

1988. 312

8,255.26

8,255.26

100.0%

27

684.622,550

16%2005. 6

9,500
5,050

(Entire B ridge)①6,462.19②3,868.36①33,706.03②6,865.80
10,932.69

Each 1/4
floor
Each 1/3
floor
Each 1/8
floor

1985.109

10,055.13

6,817.76

6,817.76

100.0%

29

794.752,500

14%2005. 5

1990.10

9

11,149.99

8,074.83

8,074.83

100.0%

3

940.84Each span

2,500

17%

2003.12

3,600

1981.812

18,842.51

13,767.12

12,522.01

91.0%

43

1,105.75

Each floor
Auxiliary

2,580

2%

2006. 6

6,820
3,200

1968.7

11

12,977.45

6,165.70

5,947.52

96.5%

28

802.79Each span

2,480

8%

2005.111999.12

10

10,479.63

5,887.40

5,887.40

100.0%

25

664.68Each span

2,700

5%

2003.122,970

1991. 312

7,363.25

4,655.74

3,854.44

82.8%

10

405.962,460

14%2005. 93,550

1974. 410

21,007.98

12,240.88

12,240.88

100.0%

16

1,234.14

2,600

13%

2005.11

12,9001983.12

12

23,522.82

16,977.79

16,977.79

100.0%

28

1,336.52

2,500

19%

2003.12

6,410

1991.1115

16,845.87

11,558.68

11,558.68

100.0%

17797.352,650

13%2003.12

3,940

1998. 2

16

10,292.93

6,427.01

5,624.38

87.5%

29

528.43

Each span

2,600

7%

2003.123,280

1966.1112

8,206.91

4,443.55

3,426.02

77.1%

24

515.17

Each span

2,450

13%

2005.11

2,100

1976. 7

9

11,950.37

7,911.97

7,662.40

96.8%

15

1,047.54

Each floor
Auxiliary

2,450

11%

2003.12316,132.49

310,373.84

98.2%

512

Each 1/2
floor
Each 1/4
floor
Each floor
Auxiliary
Each floor
Auxiliary

7.2%

1,930
259,140(Note 1) Total floor space is taken from the registry book.
(Note 2) Total floor space of the properties owned in compartment, except NOF Technoport Kamata Center Bldg, is expressed as ① entire building, and ② portion owned by the Fund.
(Note 3) Rate of PML (Probable Maximum Loss) for each building was calculated by Shimizu Construction. 7.2% at the bottom field is for the entire portfolio.

33

Earnings by Property(￥000)
Shinjuku
Nomura Bldg.
Number of business days
Rental business revenues
Rental revenues (incl. common area charges)
Other revenues
Rental business expenses
Property management fees
Taxes and duties
Utility expenses
Insurance espenses
Repair and maintenance
Other expenses
Depreciation
Rental Profits
Net Operating Income (NOI)

184
1,794,423
1,588,895
205,527
852,839
199,849
162,786
209,340
3,363
31,02549,541
196,930
941,584
1,138,515
NOF Surugadai
Plaza Bldg.*

Number of business days
Rental business revenues
Rental revenues (incl. common area charges)
Other revenues
Rental business expenses
Property management fees
Taxes and duties
Utility expenses
Insurance espenses
Repair and maintenance
Other expenses
Depreciation
Rental Profits
Net Operating Income (NOI)

184

30,385
122,730
153,115
Sapporo North
Plaza

Number of business days
Rental business revenues
Rental revenues (incl. common area charges)
Other revenues
Rental business expenses
Property management fees
Taxes and duties
Utility expenses
Insurance espenses
Repair and maintenance
Other expenses
Depreciation
Rental Profits
Net Operating Income (NOI)

153
288,694
247,668
41,026
111,460
30,7291342,652
812
4,700
6,539
26,012
177,234
203,247

JAL Bldg.*

184

145,498
615,667
761,166
NOF Kanda
Iwamoto-cho Bldg.

184
149,725
132,967
16,75745,563
9,889
9,264
8,669
254
1,219
550
15,716104,162
119,878
NOF Sendai
Aoba-dori Bldg.

184
169,487
141,995
27,49287,152
24,99817,552
15,721
576
3,223
1,176
23,90382,335106,239

NOF Nihonbashi
Honcho Bldg.

184845,192
801,928
43,263279,891
76,96439,952
49,295
1,423
1,946
5,677
104,632
565,300
669,932
NOF Minami
Shinjuku Bldg.

184
104,708
88,111
16,59636,858
7,887
8,558
8,769
182
676
1,929
8,854
67,84976,704

Tennozu Park
Side Bldg.

184
791,544659,791
131,753
414,416
154,229
51,951
41,181
1,601
7,060
2,620
155,770
377,128
532,899
NOF Toyo-cho
Bldg.*

184

73,434
173,198
246,632

NOF Utsunomiya
NOF Nagoya
Bldg.
Yanagibashi Bldg.

184
176,708
144,11132,597105,238
24,065
14,995
17,894
618
3,431
4,318
39,912
71,470111,383

184
118,550
104,943
13,60782,92812,923
12,216
12,112378
11,0062,301
31,98935,622
67,611NOF Shibuya
Koen-dori Bldg.

184366,222335,854
30,36888,79816,234
24,166
13,621
291
5,346
2,269
26,868277,424
304,292

Secom Medical
Bldg.*

61

14,94767,80382,750NOF Technoport
Crystal Park Bldg.
Kamata Center Bldg.

184
439,146
368,076
71,069229,423
53,345
35,11847,496
1,055
17,2788,546
66,584
209,722
276,306
NOF Midosuji
Bldg.

184
497,306
418,324
78,982
197,680
39,64552,15135,958
986
5,143
5,100
58,693299,625
358,319

184
124,148
109,805
14,34353,21820,569
0
8,962
90
387
1,110
22,09770,92993,027
NomuraOsaka Bldg.

184
523,697434,743
88,954
241,763
63,336
40,71863,4591,223
14,372
5,799
52,852281,934
334,786

NOF Shiba Bldg.

184
331,552
291,071
40,480120,651
20,32023,746
23,700
592
2,939
2,500
46,850210,901
257,752

Nishi-Shinjuku
Showa Bldg.

NOF Shinagawa
Konan Bldg.

184
190,688
175,419
15,26982,38620,09916,634
15,741
336
4,709
5,463
19,401
108,301
127,703

184
260,291
224,131
36,16096,84019,383
15,892
24,075
557
3,417
2,338
31,175
163,450
194,626

Faret Tachikawa
NOF Kawasaki
NOF Yokohama
Center Square Higashiguchi Bldg. Nishiguchi Bldg.

NOF ShinYokohama Bldg.*

184
227,625
202,231
25,393125,382
35,222
14,13431,058
527
7,866
5,480
31,092102,242
133,335

184
286,042
259,020
27,022112,295
36,40728,15618,759
752
1,784
7,748
18,687
173,746
192,434

NOF Tameike
Bldg.

184
316,053
270,347
45,706
149,198
23,014
18,54427,229604
13,595
2,827
63,382
166,855
230,238

184
246,669
215,501
31,16891,024
22,137
18,16819,397
542
4,570
2,629
23,578
155,645
179,223

NomuraNOF Kobe Kaigan Hiroshima Tatemachi
NOF Bldg
Yotsubashi Bldg.
Bldg.

184
329,021288,912
40,109166,239
43,80829,52837,197
839
9,264
3,076
42,523
162,782
205,306

184
187,951
152,884
35,066109,365
23,98016,21324,506
742
5,248
3,989
34,68578,586113,271

184
104,746
85,58919,157
58,204
15,921
11,32912,809
348
3,940
4,099
9,755
46,54256,297

184

42,17586,990129,165
NomuraHiroshima Bldg.

184
216,170
190,790
25,37993,94526,64918,556
28,773
584
4,500
1,538
13,343
122,224
135,568

Total 30 bldgs

10,739,836
9,531,459
1,208,377
4,619,841
1,065,237
827,338
882,91223,439198,792
150,382
1,471,738
6,119,995
7,591,733* Detailed figures are not disclosed due to compelling reasons. However, they are included in "Total 30 bldgs".

34

Map of Property

35

Photo of Property (30 properties as of Dec 20, 2006)
02

01

03

Shinjuku
Nomura Bldg

11

JAL Bldg

12

NOF Surugadai
Plaza Bldg

21

Sapporo North Plaza13

NOF Kanda
Iwamoto-cho Bldg

22

NOF Sendai
Aoba-dori Bldg

Tennozu
Park Side Bldg

NOF Nihonbashi
Honcho Bldg

NOF MinamiShinjuku Bldg

23

NOF Utsunomiya
Bldg

06

05

04

NOF Shibuya
Koen-dori Bldg

Secom Medical Bldg

14

15

16

NOF Toyo-cho Bldg

NOF Technoport
Kamata Center Bldg

Crystal Park Bldg

24

25

26

NOF Nagoya
Yanagibashi Bldg

NOF Midosuji Bldg

Nomura Osaka Bldg

07

NOF Shiba Bldg

17

Faret Tachikawa
Center Square

27

NomuraYotsubashi Bldg

08

09

Nishi-Shinjuku
Showa Bldg

18

NOF Tameike Bldg

19

NOF Kawasaki
Higashiguchi Bldg

28

NOF Yokohama
Nishiguchi Bldg

29

NOF Kobe
Kaigan Bldg

Hiroshima Tatemachi
NOF Bldg

10

NOF Shinagawa
Konan Bldg

20

NOF ShinYokohama Bldg

30

NomuraHiroshima Bldg

36

Acquisition Channel of Property
Acquisition channel

Originally owned
by Nomura Real
EstateDevelopment

Acquired at the time of inception

Shinjuku
Nomura Bldg

Faret Tachikawa
Center Square

Nomura Yotsubashi Bldg

• Information fromor
• Intermediation by
Nomura Real Estategroup companies(*)

During 4th FP

During 5th FP

Tennozu
Park Side Bldg

During 6th FP

Secom Medical
Bldg

Nomura Hiroshima Bldg

ＮＯＦ Nihonbashi NOF Shinagawa NOF Toyo-cho NOF Technoport
Kamata Center
Honcho Bldg
Konan Bldg
Bldg
Bldg

ＮＯＦ ShinＮＯＦ Utsunomiya
Yokohama Bldg
Bldg

Information fromsources outside
Nomura Real Estategroup

Nomura Osaka
Bldg

During 1st and 3rd FP

ＮＯＦ Kobe
Kaigan Bldg

ＮＯＦ Kanda
Iwamoto-cho
Bldg

NOF Yokohama
Nishiguchi Bldg

ＮＯＦ MinamiShinjuku Bldg

ＮＯＦ Sendai
Aoba-dori Bldg

SapporoNorth PlazaNOF Midosuji Hiroshima Tatemachi
NOF Bldg
Bldg

JAL Bldg *NOF Surugadai
Plaza Bldg

Nishi-Shinjuku
Showa Bldg

NOF
Shibuya
Koen-dori
Bldg

NOF
Shiba
Bldg

NOF
TameikeBldg

NOF
NOF Nagoya
KawasakiYanagibashi
Higashiguchi
Bldg
Bldg

Crystal Park
Bldg

37

Fund Summary
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

Apr 2004

Oct 2004

Apr 2005

Oct 2005

Apr 2006

Oct 2006

Total Assets
Interest-bearing Liabilities
LTV (Total Assets basis)
Unitholders' Capital
Outstanding Units Issued
Net Assets
Net Assets per Unit
Closing Price of Units
Market Capitalization

¥mln
¥mln
%
¥mln
Unit
¥mln
¥
¥
¥mln

147,946
61,00041.2
71,706
148,600
73,233492,820
645,000
95,847

173,545
64,50037.2
92,168
184,650
94,774513,266
767,000
141,626

208,00396,50046.4
92,168
184,650
94,849513,672
758,000
139,964

239,067
93,00038.9
124,610
229,970
128,094
557,004
782,000
179,836

268,559
120,000
44.7
124,610
229,970
128,206
557,492
998,000
229,510

288,060
106,000
36.8
156,767
265,903
161,004
605,499
991,000
263,509

Operating Revenues
Operating Income
Net Income
Total Cash Distribution
Cash Distribution per Unit

¥mln
¥mln
¥mln
¥mln
¥

4,531
2,313
1,526
1,526
10,273

6,656
2,930
2,606
2,606
14,114

7,106
3,228
2,681
2,681
14,520

8,641
4,111
3,484
3,484
15,150

9,810
4,558
3,596
3,596
15,638

10,739
5,182
4,229
4,229
15,905

Total Portfolio (Acquisition Price)
Number of Properties
Leasable Space
Number of Tenants
Occupancy Rate

¥mln

%

127,260
15
180,793.50
264
93.3

151,540
18
194,673.65
277
94.4

184,62019
236,904.67
287
98.1

210,12023
261,428.50
357
97.3

240,82028
293,464.10
467
98.4

259,14030
316,132.49
512
98.2

End-of-Period Total Book Value
End-of-Period Total Appraisal Value
Total Latent Profit and Loss
Latent Profit and Loss per Unit
Net Asset Value per Unit (Book Value Base)

¥mln
¥mln
¥mln
¥
¥

127,089
127,12030
202
493,023

151,815
151,500-315-1,707
511,559

185,406
187,290
1,883
10,199523,872

211,566
219,380
7,813
33,975590,979

241,901
261,120
19,21883,572641,064

259,449
294,037
34,587130,074
735,574

NOI on Lease
NOI Return on Lease (p.a.)
Depreciation
Capital ExpendituresFFO
FFO per Unit

¥mln
%
¥mln
¥mln
¥mln
¥

3,350
7.2
666
22
2,193
14,757

4,451
6.2
949
511
3,555
19,255

4,970
6.1
1,023
484
3,719
20,142

6,125
6.1
1,229
1,016
4,727
20,559

6,952
5.9
1,399
934
5,034
21,889

7,591
6.0
1,471
588
5,739
21,585㎡

38

Unit Price and Market Capitalization (Dec. 4, 2003 – Dec. 19, 2006)
Unit Price (¥)

Market Capitalization (¥ mln)

1,100,000

1,000,000(as of Dec 19, 2006)
Market Capitalization
All-time High Price
All-time Low Price

500,000: ¥264,839 mln: ¥1,090,000: ¥505,000

Market Capitalization

Unit Price
400,000

900,000

800,000

4th Public Offering¥926,100

3rd Public Offering¥740,782

700,000

300,000

200,000

600,000
2nd Public Offering¥588,000

100,000

500,000
Initial Public Offering¥500,000
400,000
2003/12 2004/3

2004/6

2004/9 2004/12 2005/3

2005/6

2005/9 2005/12 2006/3

2006/60
2006/9 2006/12

39

Structure of the Asset Management Company
Corporate Profile
Unitholders’ Meeting[ Registered Trade Name ]Nomura Real Estate Asset Management Co., Ltd.

Auditors
Board of Directors[ Date of Incorporation ]January 24, 2003

Executive
Director
Compliance
Committee

Compliance & Risk
Management Group *Office Management
Division[ Paid-up Capital ]¥300,000,000

Residence Management
Division

Investment Committee[ Shareholder ]Nomura Real Estate Holdings Co., Ltd. (100%)
Investment Committee

Acquisition
Group

Asset
Management
Group

Fund
Management
Group

Financial &Control Group(Responsibilities)(Responsibilities)(Responsibilities)(Responsibilities)

 Businesses Businesses Businesses
 Fund raising.
relevant to due
relevant torelevant todiligence andmanagement,
management of  Accounting,acquisition ofmaintenanceportfolio,
taxes andliability
properties to be
and sale ofdisclosure ofinvested.
properties in theinformation (IR).
management
portfolio.
of NOF.
 Accounting,taxes andadministration of
NREAM.

Acquisition
Group

Asset
Management
Group

Fund
Management
Group

Financial &Control Group(Note)
Responsibilities of Groups under Residence Management Division are
omitted because these groups are not engaged in management of theinvestment assets of the portfolio.

*Compliance & Risk Management Group(Responsibilities)
 Businesses relevant to compliance and risk management.
 Internal audit.

[ Number of Employees ]54 (including Directors)[ Description of Business ]Investment corporation engaged
in asset management business◆Licensed as an investment corporation engaged
in asset management business: Prime Minister No. 28◆Licensed for discretionary proxy in realty trading:
Minister of Land, Infrastructure and Transport
No. 18◆Licensed for real estate trading: Governor of Tokyo
No. (1) 81679

40

Below is a message announced jointly with the asset management company at the time of listing on December 4, 2003.

We, at Nomura Real Estate Office Fund Inc., believe that listingof Real Estate Investment Trust (REIT) serves to form a baseon which the nation can build their financial resources. The
long-term investment capital will contribute to stabilization of not
only the real estate market, but also the Japanese economy asa whole.
Many investors wish stable investment more than anything else.
Responding to such needs of asset building, we have set ourinvestment policy as being “stable over mid- to long-term”.
Wishing to make a contribution to the nation’s economic growth
in any way, we are determined to continue doing the best of ourability in our function to combine the private financial resources
directly with the real estates.
AN INVESTOR ORIENTED COMPANY
respecting the trust and expectation of the investors
Nomura Real Estate Office Fund, Inc.
(TSE code: 8959)
http://www.nre-of.jp/english/
Fund Manager: Nomura Real Estate Asset Management Co., Ltd.

41

This document has been prepared for the purpose of provision of information only, andshould not be construed as an offer, solicitation or commercial conduct of any natureassociated with any specific products. Investors wishing to purchase the investment
units of Nomura Real Estate Office Fund, Inc. should contact their own securities
brokers or dealers.
The forward-looking statements with respect to the future financial results contained inthis document should not be construed as a guarantee of the actual performance in the
future.
Although the information contained in this document is intended to be complete andthorough, there is no assurance of precision and safety of the same. Please note thatthe contents of this document is subject to change or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or wholeof the information contained in this document without express prior written consent.

42