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

Fourth Fiscal Period Results(February 1, 2007 to July 31, 2007)

September 21,

2007

Prospect Residential Investment Corporation
Disclaimer
This document contains a translation of information provided in the Financial Report (Kessan Tanshin) of Prospect
Residential Investment Corporation (“PRI”) dated September 21, 2007, and prepared under the timely disclosure
requirements of the Tokyo Stock Exchange for the period from February 1, 2007 to July 31, 2007.
This English language document is provided solely for the convenience of and reference by non-Japanese investors, andis not intended to constitute a disclosure document. The Japanese language Financial Report should be referred to as theoriginal of this document. The English translation of legal, accounting, tax and business terms used herein may notprecisely 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 and interpretation. Neither PRI, Prospect Residential Advisors, Co., Ltd. (“the Asset Management
Company”) nor any of their respective directors, officers, employees, partners, shareholders, agents or affiliates will be
responsible or liable for the completeness, 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 in this document in relation to matters set out in this document, and if given
or made, such information or representation must not be relied upon as having been authorized by PRI, Prospect
Residential Advisors, Co., Ltd. or any of their respective directors, officers, employees, partners, shareholders, agents oraffiliates.
The financial statements of PRI have been prepared in accordance with generally accepted accounting principles inJapan (Japanese GAAP), which may materially differ in certain respects from generally accepted accounting principles
in other jurisdictions.
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.
Contact Information:
Investor Relations
Prospect Residential Advisors, Co., Ltd.
ir@proresi-advisors.co.jp

1

Prospect Residential Investment Corporation

Prospect Residential Investment Corporation("PRI" or "the Investment Corporation")
Representative: Takeo Nishiyoshi, Executive Officer
Address: 2-2-1 Marunouchi, Chiyoda-ku, Tokyo
Prospect Residential 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): October 25, 2007
Planned date of distribution payment commencement: October 19, 2007
(1) Operating Performance and Assets for the Fiscal Period Ended July 31, 2007
1) Operating Performance(Millions of yen rounded down unless otherwise stated)
Fiscal Period
Ended

Operating Revenues

Operating Income

Ordinary Income

Net Income

%

%

%

%

July 31, 2007

2,148

-3.7

972

-3.2

710

-4.5

709

-4.6

January 31, 2007

2,231

12.6

1,003

27.2

744

16.2

743

16.2

Fiscal Period
Ended

Net Income per Unit

Return on Net
Assets

Yen
9,448
9,901

July 31, 2007
January 31, 2007

%
2.0
2.1

2) Distributions
Fiscal Period
Ended
July 31, 2007
January 31, 2007

Distributions per
Unit Excluding
Excess ofEarnings (Yen)
9,448
9,901

Total
Distribution
709
7433) Financial Position
Fiscal Period
Ended
July 31, 2007
January 31, 2007

Ordinary Income toTotal Assets
%
1.1
1.2

Ordinary Income toOperating Revenues
%
33.1
33.4

(Millions of yen rounded down unless otherwise stated)
Distributions
Total
Distributio
Payoutin Excess ofDistributions
n Ratio to
Earnings per
in Excess of
Ratio
Net Assets
Unit (Yen)
Earnings－－ 99.9%2.0%－－ 99.9%2.1%(Millions of yen rounded down unless otherwise stated)
Net Assets
Net Assets
Net Assets
to Total Assets
per Unit (Yen)35,31652.3%
470,265
35,36862.3%
470,950

Total Assets
67,58956,755(Reference Material) Net worth, JPY 35,316 million as of July 31, 2007 and JPY 35,368 million as of January 31, 2007

4) Cash Flow Situation
Fiscal Period
Ended
July 31, 2007
January 31, 2007

Cash Flows fromOperating
Activities
1,630
8,063

(Millions of yen rounded down unless otherwise stated)
Cash Flows from
Cash Flows from
Cash and CashInvesting
FinancingEquivalents at The
Activities
Activities
End of The Period-11,343
10,163
3,324-702-7,781
2,873(2) Forecast of Revenues and Earnings (for the Fifth Fiscal Period :August 1, 2007 to January 31, 2008)(Millions of yen rounded down unless otherwise stated, yoy % change)

Fiscal PeriodEndingOperating
Revenues

January 31, 2008

2,294 (6.8)

Operating
Income997(2.6)

Ordinary
Income697(-1.9)

Net Income

696(-1.9)

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

9,268

－

(Reference Material) Estimated net income per unit for the fifth fiscal period ending January 31, 2008: JPY 9,267

2

Prospect Residential Investment Corporation(3) Others
1) Changes in accounting policies
A. Changes due to accounting standards: None
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 July 31, 2007; 75,100 units as of January 31, 2007
B. Investment units owned by PRI at fiscal period-ends:
0 units as of July 31, 2007; 0 units as of January 31, 2007
(Note) Please refer to ‘Information per Unit’ on page 24 with respect to the number of investment units used as thebase to 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.

3

Prospect Residential Investment Corporation
1) Structure of the Investment Corporation
Please refer to “Structure of the Investment Corporation” on page 48.
2) Management Policy and Operating Conditions(1) Management Policy
The management policy has been omitted because no revisions have been made since the most recent company report,
submitted on April 24, 2007.
(2) Operating Conditions
The Asset Management Company, as founder, filed for the establishment of PRI in accordance with theInvestment 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 Environmenta. In the fourth fiscal period, the six-month period ended July 31, 2007, the Japanese economy
strengthened primarily in the corporate sector. Year-on-year results reported in the monthly
mining and industrial output index from June 2007 onwards were positive, with the exceptionof a period during which an earthquake negatively affected performance. Corporate earnings
overall were solid. The employment situation also became increasingly bright as theunemployment rate significantly improved from 4.0% in February 2007 to 3.6% in July 2007,
on a flash report basis. The number of workers with regular employment grew by more than
1.5% year on year over the same time span. On the other hand, average income fell year on
year according to the Working Statistics Survey, with a year-on-year decline of 1.9% as of July
2007 on a flash report basis. Statistical indicators of personal consumption showed only
modest upward trends. With respect to financial markets, the Nikkei Stock Average frequently
peaked above JPY 18,000 from JPY 17,000 levels, reflecting the Bank of Japan’s
announcement of a second interest rate hike (unsecured overnight call rate) in February 2007
as well as solid corporate earnings. However, from July 2007 onwards, concerns spreadthroughout financial markets regarding possible negative affects from the subprime loan crisisin the United States. From an investment perspective, competition for the acquisition of prime
properties not only in the Tokyo Metropolitan area but also other major cities continued tointensify. This is attributed to persistent high demand from Japan’s real estate investment trust
companies and investment funds as well as the growing trend toward tight sales conditions
and rising sales prices among developers, traditionally the main source of property supply.
With the slowdown in recent development activity, the number of large-scale condominium
projects has steadily declined. Looking ahead, the prices of condominiums and residential
complexes for rental purposes are expected to hover at a high level.
b. Demand for prime rental residential properties remains firm due to the continuing shift in
population toward Tokyo and other major cities, cutbacks in corporate dormitories andhousing as well as other factors. While certain companies that have successfully bolstered
their financial standing are undertaking development of their idle property holdings, the trend
toward large-scale leasing demand is showing signs of decline.
During the fiscal period under review, occupancy and rental rates for prime residential
properties continued to rise. Based on a survey by Recruit Co., Ltd., residential property rental
rates in the Tokyo Metropolitan area bottomed out in autumn 2005. In certain select city center
locations, rental rates have experienced a moderate increase.

4Prospect Residential Investment Corporation
B. Management Performancea. As of February 1, 2007, Prospect Residential Investment Corporation (“PRI”) managed aportfolio comprising 39 properties (2,254 rental condominiums with a total leasable floor
space of 93,795.18 m2) worth JPY 52,941 million on an acquisition price basis. Consistent
with its basic management policy to secure steady growth and stable earnings from a mediumto long-term perspective, PRI carried out aggressive acquisition activities and acquired 11
properties during the fiscal period under review. This was PRI’ s largest number ofacquisitions since its listing on the Tokyo Stock Exchange. Seven of the 11 properties are
relatively new, having been completed within the past year, and therefore contributed to
improving the overall quality of the portfolio and lowering the average building age. The
majority of the 11 properties are located in areas in which future rental rates are expected toincrease. In descending order of acquisition date, the names of the newly aquired properties
are as follows:
Prospect Kawaramachi-Gojo, Prospect Hatsudai, Prospect Chuo-Rinkan, Prospect Morishita,
Prospect Nishi-Sugamo, Sky Hills N15, Sky Hills Sakaimachi, Domy Chitose, Sky Hills
Kodai I, Exceria Ikebukuro West II, and Prospect Monzennakacho.
In order to improve the quality of the portfolio through an active replacement strategy of
selective property purchases and sales, PRI considers selling certain properties that are either
located in highly competitive urban areas or characterized by comparatively low earnings. PRI
sold O Fort Nishi-Kasai in July 2007, posting a net gain on sale of JPY 146 million.
b.

As a result of its management performance in the period under review, PRI acquired 11
properties worth JPY 10,732 million on an acquisition price basis and with a total leasable
floor space of 30,662.54 m2, and sold one property at a sales price of JPY 1,080 million andwith total leasable floor space of 1,960.00 m2. As of July 31, 2007, PRI maintained aninvestment property portfolio comprising 49 properties (3,021 rental condominiums with a
total leasable floor space of 122,497.72 m2) worth JPY 62,747 million on an acquisition pricebasis. This marked the first time that PRI’s operating portfolio exceeded 3,000 condominiums.
Bolstering its capabilities in investment property acquisition and management, PRI will also
promote stronger ties with interested-party Prospect Co., Ltd.*(the "Sponsor Company"),
taking into account issues relating to third-party transactions and conflicts of interest. The
Sponsor Company serves as the provider of such functions as property warehousing,development and information collection. Leveraging these functions provided by the Sponsor
Company, the Investment Corporation acquires properties that have potential for highinvestment returns at favorable acquisition prices.
* Prospect Co., Ltd. is the sole shareholder of Prospect Residential Advisors Co., Ltd., the Investment
Corporation’s Asset Management Company.

The warehousing function allows the Sponsor Company to acquire a newly constructed
property on behalf of the Investment Corporation through a special purpose company. Aftersuch acquisition, the Sponsor Company conducts leasing operations and works to raise theoccupancy rate of the property. Once the occupancy rate has improved, the Investment
Corporation purchases the property at the market price. This approach reduces the Investment
Corporation’s exposure to risks associated with leasing operations.
Utilizing the warehousing functions of its Sponsor Company, Prospect Co., Ltd.*, PRI aquired
the following three properties: Prospect Hatsudai, Prospect Chuo-Rinkan, and Prospect
Morishita.
* Prospect Co., Ltd. is the sole shareholder of Prospect Residential Advisors Co., Ltd., PRI’s
Asset Management Company.

c.

Existing property management (Internal Growth)
In an effort to increase occupancy rates and profitability, PRI examined the merits of a variety
of property management companies in terms of their individual characteristics, strengths,

5Prospect Residential Investment Corporation
service contents and fees. Furthermore, property management companies were selected anddismissed, and property management rates set and revised, based on quantitative andqualitative assessments by the Asset Management Company. In the fiscal period under review,
PRI changed the property management company for BELNOS 34.
PRI also carried out large-scale rennovations of U House Gokiso, which was constructed 16
years ago, with earnings improving as a result. Furthermore, while maintaining the same levelof service quality, property management fees for 20 properties were reduced. PRI also
continued efforts to revise as many electricity supply contracts as possible with the aim of
implementing cost reductionsd.

Funds procurement
In March 2007, PRI procured debt financing totaling JPY 20,000 million for a period of three
years under a long-term loan agreement with a variety of financial institutions (arranged by
Aozora Bank, Ltd.), primarily for refinancing long- and short-term loans. In order to flexibly
acquire additional investment properties, PRI also executed a commitment line agreement fora maximum is JPY 7,000 million with Aozora Bank, Ltd. and the Norinchukin Bank.
Including loan procurement for the aforementioned new acquisition, as of July 31, 2007, thebalance of debt financing was JPY 30,934 million and the ratio of interest-bearing debt to total
assets was 45.8%, compared to JPY 20,020 million and 35.5%, respectively, as of January 31,
2007.
In July 2007, PRI received a long-term issuer credit rating of A– for long-term senior debt*
from Japan Credit Rating Agency, Ltd. PRI will work to extend the repayment periods of debt
and to obtain fixed-interest rates by continuing to issue Investment Corporation bonds in the
future.
* The rating of long-term senior debts represents an assessment of an obligor’s financial capacity to pay
their overall financial obligations. This rating differs from ratings concerning specific financial
obligations, which take into account the nature and provisions of the obligation and its senior/subordinate
status, as well as the obligor’s standing in terms of bankruptcy or liquidation. (Source: JCR’s English
Web site)For further details of the rating, please refer to JCR’s Web sites: http://www.jcr.co.jp/english/ (English);http://www.jcr.co.jp/ (Japanese)

In July 2007, PRI concluded three contract for the purchase of yen interest rate caps against a
total of JPY15.0 billion in debt financing (bank borrowings), with the goal of hedging against
the risk of increases in interest rates.
C. Operating Results and Cash Distribution
Accounting for the aforementioned factors, operating revenues totaled JPY 2,148 million in thefiscal period ended July 31, 2007. Ordinary income was JPY 710 million while net income
amounted to JPY 709 million.
PRI distributes the total amount of its unappropriated retained earnings for each period.
Accordingly, cash distribution for the third fiscal period was JPY 9,448 per unit (rounded down to
the nearest yen).
2) Outlook
A. Operating Environment
The office building market in Japan continues to exhibit signs of increased vitality, reflecting
improvements in corporate-sector results and positive conditions in the overall domestic economy.
While the residential market for rental properties lags behind its office building counterpart,condominium prices, particularly in the 23 wards of Tokyo, are increasingly distinguished by theirsteady upswing and aggressive price setting by residential property developers.

6

Prospect Residential Investment Corporation
In Tokyo, the price of land has appreciated after bottoming out. This is contributing to increased
difficulty in the acquisition of prime sites. Signs are also emerging of a drop in the sale ofresidential complexes to investment funds. Following on from the previous fiscal period, this has
resulted in harsh conditions in connection with the acquisition of superior properties.
The price increase in rental properties in Tokyo has not, however, extended across Japan. Impacted
by the high level of supply since 2006, certain regional areas are experiencing slight excesses.
Rental rates for residential properties are currently increasing only in select areas, but increasing
rates are anticipated to gradually spread into other areas.
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.
Utilizing the functions provided by Prospect Co., Ltd., PRI’s Sponsor Company, such as property
warehousing, development and information collection, PRI will acquire properties with highinvestment values at appropriate prices. PRI will also step up efforts in connection with due
diligence and place the utmost priority on tenant and investor satisfaction.
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 management companies
that can contribute to increasing occupancy and profitability. Furthermore, PRI will continue to
implement checks by internal specialists including first-class architects with the aims of reducing
costs and securing the increased trust of tenants and investors.
D. Financial Strategy
In July 2007, PRI received a long-term issuer credit rating of A– for long-term senior debt fromJapan Credit Rating Agency, Ltd. Followingly in September 2007, PRI submitted the Registration
for Issuance of Investment Corporation Bonds to the Kanto Finance Office of the Financial Services
Agency, applying for a maximum issuance of JPY 50,000 million. PRI aims to carry out flexible
procurement of short- and long-term loans 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 Investment Corporation bonds in the future.
(3) Important Subsequent Events
1) Property Sales
Property Code
Property Name
Location(Address)
Sales Price(Note)
Sales Date

F013
Garden City Kita-Toda
4-40-1 Sasame, Toda City, Saitama
JPY811 million
August 31, 2007

Note: Excluding fixed-asset tax, city planning tax, and consumption taxes.

7Prospect Residential Investment Corporation
2) Debt Financing and Repayment
PRI undertook the following debt financing and repayment after July 31, 2007.
(Millions of yen unless otherwise stated)

Debt
Financing

Debt
Financing /RepaymentInterest
Rate

Maturity /Repayment
Date

Lehman Brothers Japan Inc.

2,924

Floating

October 31, 2012

September 7,
2007

Aozora Bank, Ltd.,The Norinchukin Bank

2,400

Floating

September 5,
2008

March 30, 2007.

Mitsubishi UFJ Trust andBanking Corporation

3,940

Floating

September 7,
2007

Repayment

SecuredApril 16, 2007

Aozora Bank, Ltd.,The Norinchukin Bank

1,700

Floating

September 7,
2007

Repayment

Secured

Aozora Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation
The Sumitomo Trust & Banking
Corporation
The Norinchukin Trust & Bankig
Co.,Ltd
The Musashino Bank, Ltd.
NTT Finance Corp.

500

Floating

August 31,
2007

Repayment

SecuredDrawdown Date

Lender

September 7,
2007

Repayment

March 15, 2007

(Reference Material)
Property Acquisition
Property Name
Acquisition Date
Location(Address)
Acquisition Price(Note 1)
Use
Site Area
Total Floor Space
Structure
Completion Date
Total No. of Leasable Residential Units
Total Leasable Floor SpaceType of Assets(Note 2)

Application of Funds /Repayment Method
Acquisition of trust
beneficiary right in realestate and repayment ofdebt financing
Acquisition of trust
beneficiary right in realestate and repayment ofdebt financing

Remarks

SecuredSecured

KALON
September 7, 2007
1-28-9 Minowa, Taito-ku,
Tokyo
JPY1,930 million
Residential complex
473.35m2
4,131.53m2
RC/Flat roof/15F with B1
February 2007
82
3,032.37m2
Real estate

Note 1: Acquisition price does not include real estate brokerage fees, taxes and public charges and other expenses incurred
through the acquisition of properties and is presented in line with the price stated in the transaction agreements.
Note 2: Trust beneficiary rights in real estate were granted on September 7, 2007, establishing this real estate as entrusted
property.

(3) Forecast of Revenues and Earnings
Forecast of revenues and earnings for the fifth fiscal period (August 1, 2007 to January 31, 2008) is as follows. These
forecasts are based on “Assumptions for Forecasts for the Fifth Fiscal Period” mentioned afterwards.
Forecast of revenues and earnings for the fifth fiscal period (August 1, 2007 to January 31, 2008)
Operating revenues
JPY2,294 million
Ordinary income
JPY 697 million
Net income
JPY 696 million
Distributions per unit
JPY9,268
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.

8

Prospect Residential Investment Corporation
Assumptions for Forecasts for the Fifth Fiscal Period (August 1, 2007 to January 31, 2008)
Operating Period
Managed Assets

Investment Units
IssuedInterest-Bearing
Debt Ratio

Operating Expenses

Assumptions
Fourth fiscal period: From August 1, 2007 to January 31, 2008 (184 days)
Forecasts are based on a property portfolio comprising 49 properties held as of July 31, 2007.
This total includes one additional property acquired as well as one property sold as of the dateof this report (please refer to page 7 and 8 for details). 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 July 31, 2007 was 47.2%. Forecasts are, however, basedon an interest-bearing debt ratio of 48.5% as of January 31, 2008, taking into account anincrease in debt financing to acquire additional properties as well as repayment stemming fromthe 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
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.
Repairs, maintenance and renovation expenses are estimated based on amounts consideredessential for each property for each fiscal period. Actual repairs, maintenance and renovation
expenses for each fiscal period, however, may differ significantly from these amounts due tounforeseen circumstances or emergencies.

Cash Distribution

Depreciation is calculated using the straight-line method inclusive of incidental expenses.
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. Forecasts are also based on theassumption that PRI shall not undertake distribution in excess of earnings.

9

Prospect Residential Investment Corporation
3) Financial Statements(1) Balance Sheets(Thousands of yen)
Notes

ASSETS
ＩCurrent assets
Cash and deposits
Entrusted cash and deposits
Rental receivables
Prepaid expenses
Deferred tax assets
Consumption tax and otherreceivables
Derivative assets
Other current assets
Total current assets
II Fixed assets
1. Property and equipment:
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Entrusted buildings
Accumulated depreciation
Entrusted structures
Accumulated depreciation

＊1

＊1
＊1
＊1
＊1
＊1
＊1
＊1

Entrusted machinery andequipment

Accumulated depreciation
Entrusted tools, furniture and fixtures

Accumulated depreciation
Entrusted land
Total property and equipment

2. Intangible assets:
Other intangible assets
Total intangible assets
3. Investments and other assets:Long-term prepaid expenses

Third Fiscal Period(As of January 31, 2007)＊1

842,11439,884
417
137
6,189
1,187
157
5

Fourth Fiscal Period(As of July 31, 2007)

1,375,115
1,498,817
21,426
107,03119

1,671,760
1,652,851
22,309119,950
9,437

－
2,962
735
3,006,108

78,412
3,258
1,291
3,559,271

5.3

846,350
56,785
417
195
6,189
1,582
315
25

802,229
280
5,002
151
794,545

23,676,623
965,941 22,710,681
89,556
13,77575,781
236,80240,168
196,634
27,6282,068
25,55929,121,832
53,732,698
5,889
5,889

Increase(Decrease)

5.3

553,16218.4

789,565
222
4,606
289
794,545

28,268,874
1,321,531 26,947,342
115,899
19,36896,530257,481
53,776
203,705
37,881
4,682
33,19934,940,138
94.7

63,810,145

94.4

10,077,447

18.8

0.0

5,168
5,168

0.0

△721

△12.2

-

136,940

Long-term derivative assets
Total investments andhTotal fixed assets

11,206
11,20653,749,794

0.0
94.7

11,382
66,556
214,879
64,030,194

0.3
94.7

203,673
10,280,39－
19.1

Total assets

56,755,902 100.0

67,589,465

100.0

10,833,562

19.1

Leaseholdanddeposits received

security10

Prospect Residential Investment Corporation(Thousands of yen)
Notes

LIABILITIESＩ Current liabilities
Operating payables＊1
Short-term debt
Current portion of＊1long-term debt
Other payables
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Other current liabilities
Total current liabilities
II Long-term liabilities
Long-term debt
Leasehold and security
deposits
Total long-term liabilities
Total liabilities＊2
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 hedgetransactions
Total evaluation andconversions
Total net assets
Total liabilities
assetsandThird Fiscal Period(As of January 31, 2007)

Fourth Fiscal Period(As of July 31, 2007)

60,6307,279,306

84,2498,800,000

12,747,125
43,077160,370966
152,017
211,177
150
20,654,822

33,006
189,811
1,030－
224,786255
9,333,141

Increase(Decrease)

－

36.4

13.8 △11,321,681△54.8

22,134,000
732,702732,702
21,387,525

1.3
37.7

805,398
22,939,398
32,272,539

33.9
47.7

22,206,695
10,885,013－
50.9

34,621,838

61.0

34,621,838

51.2

－

－

743,576
743,576
35,365,414

1.3
62.3

709,564
709,564
35,331,402

1.1
52.3

△34,012△34,012△4.6△0.1△14,476

2,962
2,962
35,368,377

0.0
62.3

△14,476
35,316,925

△0.0
52.3

△17,438△51,451－△0.1

56,755,902

100.0

67,589,465

100.0

10,833,562

19.1

net

11

Prospect Residential Investment Corporation(2) Statements of Income(Thousands of yen)
Notes

Third Fiscal Period(August 1, 2006 to
January 31, 2007)

Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)

Increase(Decrease)

I. Operating Revenues
Real estate rental revenues＊1

1,809,251

1,884,684

Other rental revenues＊1

95,762

117,059

Gain on sale of real estate＊2326,161

Real estate rental expenses＊1

852,118

918,295

Loss on sale of real estate＊2

130,567－

115,738

132,273

Custodian fees

2,962

3,181

Administrative service fees

16,97820,249Directors’ fees

3,600

4,800

Bad debt loss

1,004

－

2,231,175 100.0

146,548

2,148,292 100.0△82,883△3.7

1,176,267

54.8△50,967△4.2

972,02545.2△31,915

△3.2

900

0.0

493

121.1

262,190

12.2

2,416

0.9

II. Operating Expenses

Asset management fees

Other operating expenses

104,263

Operating income

1,227,234

55.0

1,003,941

45.0

97,467

III. Non-Operating Income
Interest income

245

Other non-operating income

162

883
407

0.0

16

IV. Non-Operating Expenses
Interest expense

121,319

172,163

Debt-related expenses

137,244

87,332Other non-operating expenses

1,209

259,773

11.6

Ordinary income

744,57433.4

710,735

33.0△33,839△4.5

Income before income taxes

744,57433.4

710,735

33.0△33,839

△4.5

1,182

0.0

180

18.0

709,552

33.0△34,019△4.6

Income taxes

1,004

Deferred taxes(2)

Net income
Retainedearnings
forward

2,693

1,191
1,002

0.0

743,572

33.3△9

brought

Retained earnings at the end of
the period

4

11

7

177.3

743,576

709,564△34,012△4.6

12

Prospect Residential Investment Corporation(3) Statement of Changes in Net Assets(August 1, 2006 to January 31, 2007)
Unitholders’ Capital
Retained Earnings
Unitholders’Capital*1
Balance as of theprevious fiscal
period-end
Movements during
the fiscal period
ended January 31,
2007
Issue
of
new
investment units
Distributionofretained earnings
Net income
Net change due toitems other thanunitholders’ capital
Total
Balance
as ofJanuary 31, 2007

UnappropriatedRetained
Earnings

Total
Retained
Earnings

Total
Unitholders’Capital(Thousands of yen)
Evaluation andConversions
Earnings
Total Net
Total
(Loss) on
Assets
Evaluation
DeferredandHedge
Conversions
Transactions

34,621,838

639,780

639,780

35,261,619

7,339

7,339

35,268,958－△639,776△639,776△639,776－－△639,776－－

743,572－

743,572－

743,572－－△4,376－△4,376

743,572△4,376－
34,621,838

103,795
743,576

103,795
743,576

103,795
35,365,414△4,376
2,962△4,376
2,962

99,41835,368,377

34,621,838

639,780

639,780

35,261,619

7,339

7,339

35,268,958(August 1, 2006 to January 31, 2007)

Unitholders’Capital*1
Balance as of theprevious fiscal
period-end
Movements during
the fiscal period
ended July 31,
2006
Issue
of
new
investment units
Distributionofretained earnings
Net income
Net change due toitems other thanunitholders’ capital
Total
Balance as of July
31, 2006

Unitholders’ Capital
Retained Earnings
Unappropriated
Total
Retained
Retained
Earnings
Earnings

Total
Unitholders’Capital(Thousands of yen)
Evaluation andConversions
Total Net
Earnings on
Total
AssetsDeferred
Evaluation
Hedge
and
Transactions Conversions

34,621,838

743,576

743,576

35,365,414

2,962

2,962

35,368,377－△743,565△743,565△743,565－－△743,565－－

709,552－

709,552－

709,552－－△17,438－△17,438

709,552△17,438－
34,621,838△34,012709,564△34,012709,564△34,01235,331,402△17,438△14,476△17,438△14,476△51,451
35,316,925

34,621,838

743,576

743,576

35,365,414

2,962

2,962

35,368,377

13

Prospect Residential Investment Corporation(4) Basis for Calculating Cash Distribution
Third Fiscal Period(August 1, 2006 to
January 31, 2007)
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)
Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)

743,576,398

709,564,207

743,565,100

709,544,800（9,901）
11,298（9,448）19,407

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 743,565,100 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 709,544,800 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.

14

Prospect Residential Investment Corporation(5) Statements of Cash Flows(Thousands of yen)

I Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Interest income
Interest expense
Decrease (increase) in operating receivables
Decrease in other receivables
Decrease in consumption tax and otherreceivables(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
Proceeds from leasehold and security
deposits paid
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
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 beginningof the period
VI Cash and cash equivalents at the end of
the period

Third Fiscal Period(August 1, 2006 to
January 31, 2007)

Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)

Increase(Decrease)744,574
387,661△ 245
121,3193,617
108710,735
417,583△883
172,163△883△556△33,839
29,922△638
50,844△4,501△665

4,646△ 54,266△ 21,294△ 3,261
152,017△ 2,334△ 24,403－△78,412△12,918
12,468△9,625△152,017
29,44013,608△136,940△83,058
41,34833,763△6,363△304,034
31,77438,012△136,940

6,877,064
57
8,185,261
245△ 121,319△997
8,063,189

932,423△93,595
1,802,591
883△172,163△1,127
1,630,184△5,944,640△93,653△6,382,669
638△50,844△129△6,433,004

△400

△290

109

△ 636,666△11,415,292△10,778,625

117
－

－
△176

△117
△176

63,870166,838

102,967△129,092△702,171△94,142△11,343,063

34,949△10,640,892

6,050,000△12,940,693－

19,700,000△30,926,432
22,634,000

13,650,000△17,985,738
22,634,000△252,874△637,455△500,000△744,010△247,125△106,554△7,781,023

10,163,557

17,944,580△420,005

450,678

870,684

3,293,939

2,873,933△420,005

2,873,933

3,324,611

450,67815

Prospect Residential Investment Corporation(6) Notes for Items Related to Important Accounting Policies

1. Depreciation
method for fixed
assets2.
Accounting
standards to post
revenues
andexpensesThird Fiscal Period(August 1, 2006 toJanuary 31, 2007)

Fouth Fiscal Period(February 1, 2007 toJuly 31, 2007)(1) Tangible fixed assets (including entrusted
assets)
The straight-line method has been adopted.
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(1) Tangible fixed assets (including entrusted
assets)
The straight-line method has been adopted.
Estimated years of use for major tangible
fixed assets are as follows:
Buildings
3 – 58 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
The straight-line method has been adopted.

(3) Long-term prepaid expenses
The straight-line method has been adopted.

(3) Long-term prepaid expenses
The straight-line method has been adopted.

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 102 thousand.

Such fixed assets and other taxes included inbook values at the time of acquisition of such
real estate and trust beneficiary rights totaled
JPY 200,075 thousand.

16

3.
Hedge
accounting
methodProspect Residential Investment Corporation(1) Hedge accounting method
Same as third fiscal period(1) Hedge accounting method
Deferred hedge method(2) Hedge type and objective
Hedge typeInterest rate swap transaction
Hedge objective
Interest payment on borrowing(2) Hedge type and objective
Hedge typeInterest rate swap transaction
Interest rate cap transaction
Hedge objective
Interest payment on borrowing(3) Hedge policy(3) Hedge policy
PRI carries out derivative transactions to Same as third fiscal period
hedge risks based on its risk management
policy and in accordance with the Articles of
the Investment Corporation.
(4) Method to evaluate effectiveness of (4) Method to evaluate effectiveness ofhedge accounting
hedge accounting
PRI judges the effectiveness of hedge Same as third fiscal period
accounting based on such indicators asaccumulated cash flow changes incomparison with hedging objects andhedging methods, during commence ofhedge and the time to judge effectives.
4. Compositionof cash and cash
equivalents
inthe statements ofcash flows

Cash and cash equivalents in the statements Same as third fiscal periodof 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.

17

5.
Other
important items
for the basis ofcompilingfinancialstatements

Prospect Residential 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 third 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,
furnitureandfixtures,andentrusted land
(2) Accounting method for consumption tax (2) Accounting method for consumption tax
and others
and others
The accounting method for consumption tax Same as third 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.

18

Prospect Residential Investment Corporation(7) Notes to the Financial Statements[Notes for the Balance Sheets]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

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(Thousandsof yen)of yen)Entrustedcash
andEntrustedcash
and1,485,083
1,652,851
entrusted deposits
entrusted deposits
Buildings
436,291
Buildings
789,565
Structures
81
Structures
222
Machinery
andMachinery
and
－
4,606
equipment
equipment
Tools, furniture andTools, furniture and151
289
fixturesfixtures
Entrusted buildings
420,930
Entrusted buildings
794,545
Entrusted buildings
22,293,772
Entrusted buildings
26,947,342
Entrusted structures
71,269Entrusted structures
96,530
Entrusted machinery and
Entrusted machinery and
196,634
203,705
equipment
equipment
Entrusted tools, furniture
Entrusted tools, furniture
13,53133,199and fixturesand fixtures
Entrusted land
28,949,096
Entrusted land
34,940,138
Total
53,866,843
Total
65,462,997
Secured debt with collateral are as follows:
Short-term debt
Current portion of
long-term debt
Total

Secured debt with collateral are as follows:

7,279,306
12,747,125

Short-term debt
Current portion of
long-term debt
Total

20,026,432

Note 2. Commitment line contracts
None

8,800,000
22,134,000
30,934,000

Note 2. Commitment line contracts
PRI has commitment line contracts with client banks(Thousands of yen)
Total of commitment line contracts
7,000,000
Loan balance at the end of
the third fiscal period
5,300,000
Balance of unused contract
at the end of the third fiscal period
1,700,000

Note 3. Minimum net assets set by Article 67.4 of the Note 3. 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 third fiscal period

19

Prospect Residential Investment Corporation[Notes to the Statements of Income]Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

Note 1. Breakdown of real estate rental revenues and Note 1. Breakdown of real estate rental revenues and(Thousands of yen)earnings(Thousands of yen) earnings
A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
1,654,469
Common area maintenance
65,651fee revenues
Parking revenues
69,655
Other related revenues
19,475
Other rental revenues
Other rental revenues
95,762
Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
144,354
expenses
Repair expenses
70,555
Water, electricity, and other
39,184rates
Taxes
71,615
Insurance premiums against
6,801
lossesTrust fees
30,758Depreciation expenses
386,939
Other rental expenses
101,908
Total real estate rental
expenses
C. Real estate rental business earnings (A –B)

A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
1,717,265
Common area maintenance
71,603fee revenues
Parking revenues
71,865
Other related revenues
23,949Other rental revenues
Other rental revenues
117,059
Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
160,810expenses
Repair expenses
79,776
Water, electricity, and other38,534
rates
Taxes
81,482
Insurance premiums against
7,098
lossesTrust fees
34,865
Depreciation expenses
416,862
Other rental expenses
98,864
Total real estate rental
expenses
C. Real estate rental business earnings (A –B)

1,809,251
95,762
1,905,014

852,118
852,118
1,052,895

20

1,884,684
117,059
2,001,744

918,295
918,295
1,083,448

Prospect Residential Investment Corporation
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)
Prospect Yoyogi
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

O Fort Nishi-Kasai
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

943,489
786,360
26,533
130,595

1,080,000
932,423
1,027
146,548

Prospect Kojimachi
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

2,500,000
2,361,478
26,067
112,454

Prospect Hanzomon
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

1,350,000
1,465,997
14,570130,567

Prospect Ochanomizu
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

2,420,000
2,263,228
73,66083,111[Notes to the Statement of Changes in Net Assets]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

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 third fiscal periodauthorized for issuance
2,000,000
Total number of investment units
outstanding
75,100[Notes to the Statement of Cash Flows]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)21

Prospect Residential Investment Corporation
Note 1. Relationship between cash and cash Note 1. Relationship between cash and cash
equivalents at the end of the period and items posted on equivalents at the end of the period and items posted
the balance sheetson the balance sheets
As of January 31, 2007 (Thousands of yen)
As of July 31, 2007 (Thousands of yen)
Cash and deposits
1,375,115
Cash and deposits
1,671,760
Entrusted cash and entrusted deposits
1,498,817
Entrusted cash and entrusted deposits
1,652,851
Cash and cash equivalents
2,873,933
Cash and cash equivalents
3,324,611[Notes regarding lease transactions]Third Fiscal Period(August 1, 2006 to January 31, 2007)

Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Note 1. Lease fees for the period not being elapsed for
operating lease transactions (lesser side)(Thousandsof yen)Within one year
329,721
Over one year
Cash and cash equivalents
329,721Note 1. Lease fees for the period not being elapsed for
operatingleasetransactions(lesserside)(Thousands of yen)
Within one year
432,514Over one year
Cash and cash equivalents
432,514[Notes regarding securities]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

Not applicable, as PRI does not carry out securities Same as third fiscal periodtransactions.

22

Prospect Residential Investment Corporation[Notes regarding derivatives transactions]Third Fiscal Period(August 1, 2006 to January 31, 2007)

Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

1. Items related to transactions(1) Contents of transactions
Derivative transactions used by PRI are interest
swap transactions.
(2) PRI’s policy precludes speculative transactions as
it aims to avoid risks stemming from futurefluctuations of interest rates.
(3) PRI utilizes interest swap transactions for the
purpose of avoiding risks stemming from futurefluctuations in interest rates. PRI employs hedge
accounting for interest swap transactions.
① Hedge accounting method
Differed hedge method② Hedge type and object
Hedge typeInterest rate swap transaction
Hedge object
Interest payment on borrowing③ Hedge policy
Based on risk management policy, PRI carries out
derivative transactions to hedge risks the Articles ofInvestment Corporation of PRI.
④ Method to evaluate effectiveness of hedge
PRI judges effectiveness of hedge based on changes
such as accumulated cash flow changes withcomparison between hedge object and hedge method
during commence of hedge and the time to judge
effectives.
(4) Nature of risks related to transactions
Interest swap transactions pose risks stemming fromfluctuations of market interest rates. In order tominimize credit risk, the counter parties of suchtransactions are limited to financial institutions withhigh credit ratings.
(5) Risk management structure related to transactions
PRI carries out risk management based on the “RiskManagement Rules” of the Asset Management
Company.

1.Items related to transactions(1) Contents of transactions
Derivative transactions used by PRI are interest
swap as well as interest cap transactions.
(2) Same as third fiscal period(3) PRI utilizes interest swap transactions for the
purpose of avoiding risks stemming from futurefluctuations in interest rates. PRI employs hedge
accounting for interest swap transactions.
① Hedge accounting method
Differed hedge method② Hedge type and object
Hedge typeInterest rate swap as well as interest cap transaction
Hedge object
Interest payment on borrowing③ Hedge policy
Same as third fiscal period④ Method to evaluate effectiveness of hedge
Same as third fiscal period(4) Nature of risks related to transactions
Interest swap transactions and interest cap transactions
pose risks stemming from fluctuations of market
interest rates. In order to minimize credit risk, thecounter parties of such transactions are limited tofinancial institutions with high credit ratings.
(5) Risk management structure related to transactions
PRI carries out risk management based on the “RiskManagement Rules” of the Asset Management
Company.

[Notes regarding retirement benefit liabilities]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

Not applicable, as PRI does not have a retirement Same as third fiscal period
benefits plan.

23

Prospect Residential Investment Corporation[Notes regarding tax effective accounting]Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

1. Breakdown of reasons for deferred tax assets and 1. Breakdown of reasons for deferred tax assets anddeferred tax liabilities (Thousands of yen)deferred tax liabilities (Thousands of yen)
Deferred tax assets
Deferred tax assets
Accrued corporation enterprise tax,
Accrued corporation enterprise tax,
not accounted as loss on taxation29
not accounted as loss on taxation
19
Deferred derivative profit and loss
9,408
Total deferred tax assets
19
Total deferred tax assets
9,437
Net deferred tax assets
19
Net deferred tax assets
9,437
2. Breakdown of major items related to important 2. Breakdown of major items related to importantdifferences between the statuatory tax rate and the differences between the statuatory tax rate and theeffective tax rate after adoption of tax effective effective tax rate after adoption of tax effective
accounting(Thousands of yen)accounting(Thousands of yen)
Statuatory tax rate
39.39%
Statuatory tax rate
39.39%
Distribution payments accounted asloss on taxation
Others
Effective tax rate
after adoption of tax effective accounting-39.33%
0.07%
0.13%

Distribution payments accounted asloss on taxation-39.32%Others0.09%
Effective tax rate
after adoption of tax effective accounting
0.16%[Notes regarding equities in earnings of affiliates and others]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)
Not applicable, as PRI does not have affiliates.

Same as third fiscal period[Notes regarding transactions with related parties and personnel]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)

Transactions between PRI and related parties and Same as third fiscal period
personnel are as follows:
1. Parent company and major corporate unitholders
None
2. Directors and major individual unitholders None
3. Subsidiaries and others None
4. Related Group subsidiaries and others None
[Notes regarding information per investment unit]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)24

Prospect Residential Investment Corporation
Net assets per investment unit
JPY 470,950
Net assets per investment unit
JPY 470,265
Net income per investment unit
JPY 9,901
Net income per investment unit
JPY 9,448
Because there are no latent investment units, PRI does Same as third 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:
Fourth fiscal period (February 1, 2007 to July 31, 2007): 75,100 (no changes during the period)
Third fiscal period (August 1, 2006 to January 31, 2007): 75,100 (no changes during the period)

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

toThird Fiscal Period(August 1, 2006 to
January 31, 2007)(JPY thou)
743,572-

Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)(JPY thou)
709,552-

743,572

709,552

75,100 units

75,100 units[Notes regarding subsequent events]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Third Fiscal Period(August 1, 2006 to January 31, 2007)25

Prospect Residential Investment Corporation
1. Property Sales
PRI carried out the following sale of property
Garden City Kita-Toda
Sales Price
JPY811 million
Contract Date
July 19, 2007
Sales Date
August 31, 2007
Buyer
Chuo Jutaku Co. Ltd
Profits from real estate sale of approximately JPY 80
million to be posted as revenues

None.

2. Debt Financing
PRI undertook the following debt financing after July
31, 2007
LenderLehman Brothers Japan Inc.
Drawdown Date September 7,2007
Debt Financing JPY 2,924 million
Repayment method
Repayment as a lump sum on repayment date
Interest Rate
1.78917%(Floating)Maturity Date
October 31, 2012
Lenders

Aozora Bank, Ltd.,The Norinchukin Bank
September 7, 2007
JPY 2,400 million

Drawdown Date
Debt Financing
Repayment method
Repayment as a lump sum on repayment date
Interest Rate
1.78917%(Floating)Maturity Date
September 5, 2008
3. Debt Repayment
PRI undertook the following debt repayment after July
31, 2007(1) Long-term debt
Lenders
Aozora Bank, Ltd.,
Sumitomo Mitsui Banking Corporation
The Sumitomo Trust & Banking Corporation
The Norinchukin Trust & Bankig Co.,Ltd
The Musashino Bank, Ltd.
NTT Finance Corp.
Debt Repayment
JPY 500 million
Drawdown Date
March 15, 2007
Repayment Date
August 31, 2007
(2) Short-term debt
LenderMitsubishi UFJ Trust andBanking
Corporation
Debt Repayment
JPY 3,940 million
Drawdown Date
March 30, 2007
Repayment Date
September 7,2007

26

Prospect Residential Investment Corporation
Aozora Bank, Ltd.,
Lenders
The Norinchukin Bank
Debt Repayment JPY 1,700 million
Repayment Date
September 7, 2007
Drawdown Date
April 16, 2007

(8) Changes in total investment units outstanding
Public and private offerings from the establishment of PRI to the end of the fourth fiscal period (ended July 31, 2007)
are as follows:

Date

Type

April 22, 2005

Total investment units
outstanding (unit)
ChangeBalance402
402

Paid-in capital(Millions of yen)
ChangeBalance
201
201

Notes

Established by private（Note 1）
offering
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.
1. Changes in officers
At the Third Meeting of Unitholders held on April 11, 2007, Executive Officer Takeo Okada resigned and was replaced
by Takeo Nishiyoshi. Details of officers are as follows:
On June 15, 2007, directors of the Asset Management Companies were changed as follows:

Title

Executive
OfficerSupervising
OfficerSupervising
Officer

Name

Takeo
Nishiyoshi

ChikaoNomuraKazuhiko
Chiba

Number ofInvestment
Units Held

Career Summary
Apr.
1988

Entered the Supreme Court Legal Training and Research Instituteof Japan

Apr.
1990

Admission to the Bar (The Daini Tokyo Bar Association)
Entered the law firm Saruyama & Fujimaki

Jun.
2004

Opened the law firm Saruyama, Nishiyoshi & Sasaki (present
post)

Apr.
2007

Appointed Executive Officer, Prospect Residential Investment
Corporation (present post)

Apr.
1992

Entered the Management and Coordination Agency in Japan

Apr.
2003

Entered the Supreme Court Legal Training and Research Instituteof Japan

Oct.
2004

Admission to the Bar (The Daiichi Tokyo Bar Association)
Entered Hiroshi Hori Law Firm (currently Hori Law Firm)(present post)

Apr.
2005

Appointed Supervising Officer, Prospect Residential Investment
Corporation (present post)

Oct.
1982

Entered the auditing firm Arthur Anderson in Japan (currently
KPMG AZSA & Co.)

Aug.
1988

Registered as a certified public accountant

27

0

0

0

May
2000

Prospect Residential Investment Corporation
Appointed Managing Partner of Asahi & Co. (currently KPMG
AZSA & Co.)

Apr.
2004

Appointed Representative Director of AP Outsourcing Ltd.
(present post)

Jun.
2004

Registered as a certified public tax accountant

Apr.
2005

Appointed Supervising Officer, Prospect Residential Investment
Corporation (present post)

On June 15, 2007, directors of the Asset Management Companies were changed as follows:
Appointment
Representative Director and President
Director and General Manager of Investment Department
Director (part-time)
Resignation
Director Takashi Okazaki
Director Saori Saito
Title

Name

Takeshi Maki (reappointment)
Yasushi Yoda (reappointment)
Curtis Freeze (reappointment)

Number of
Shares Held

Career Summary
Apr. Entered Yasuda Life Insurance Company (currently Meiji
1973 Yasuda Life Insurance Company)
Apr.
Seconded to Paine Webber Securities Company
1988
Apr. Appointed Manager of International Finance Section,
1991 International Investment Department, Yasuda Life Insurance
Company
Apr. Appointed Deputy General Manager of Market Finance1997 Department, Yasuda Life Insurance Company
Apr. Appointed Deputy General Manager of Pension Fund1999 Administrative Department, Yasuda Life Insurance Company

Representative
Director andPresident

Takeshi Maki

Apr. Appointed General Manager of Pension Fund Investment
2000 Department, Yasuda Life Insurance Company-

Appointed Director and General Manager, Tokyo Realty
Jul.
Investment Management Co., Ltd (seconded from Yasuda
2001
Life Insurance Company)
Resigned Director and General Manager, Tokyo Realty
Apr.
Investment Management Co., Ltd as well as Yasuda Life
2006
Insurance Company
May
Appointed Adviser, Prospect Residential Advisors Co., Ltd
2006
Jun. Appointed Representative Director and President, Prospect
2006 Residential Advisors Co., Ltd (present post)

Apr. Appointed Substitute Executive Officer, Prospect Residential
2007 Investment Corporation
Note: At the Third Meeting of Unitholders held on April 11, 2007, Takeshi Maki was appointed substitute executive
officer of PRI to ensure an appropriate number of executive officers as set by law. As Takeshi Maki is also a
representative director of the Asset Management Company, his dual post was approved by the Director of the Financial
Services Agency on February 27, 2007.

28

Prospect Residential Investment Corporation
Entered Mitsui Trust and Banking Corporation (currently
Apr. 1987
Chuo Mitsui Trust and Banking Corporation)
Apr. 1992

Seconded to Proper Real Estate Transaction Promotion
Foundation

Apr. 1999 Appointed Manager of Development Business Group, Real
Estate Department, Head Office, Mitsui Trust and Banking
Corporation
DirectorandGeneralManager of Yasushi Yoda
Investment
Department

Apr. 1999 Appointed Manager, Asset Finance Sales Department,
Mitsui Trust and Banking Corporation
Jul. 2001

Appointed General Manager of Finance Department,
Prospect Co., Ltd

Jul. 2003

Appointed Representative Director and President, ProspectCo., Ltd

Jul. 2004

Appointed Director and General Manager of Investment
Department, Prospect Co., Ltd

Sep. 2004

Appointed Director and General Manager of Investment
Department, Prospect Residential Advisors Co., Ltd-

Appointed Director, General Manager of Investment
Jun. 2006 Department, and General Manager of Finance Department,
Prospect Residential Advisors Co., Ltd
Jun. 2007

Appointed Director and General Manager of Investment,
Prospect Residential Advisors Co., Ltd (present post)

Apr. 1988 Entered Nikko Securities Co., Ltd.
Sep. 1989 Entered Shearson Lehman Brothers Securities Co., Ltd.

Director(part-time)

Curtis Freeze

June 1990

Entered DB Morgan Grenfell Asset Management as SeniorFund Manager

Sep. 1994

Established Prospect Asset Management (USA), appointed
as Director-

June 2003 Appointed Director of Prospect Co., Ltd.
Sep. 2004

Appointed Director of Prospect Residential Advisors Co.,
Ltd. (present post)

Nov. 2004 Appointed Representative Director of Prospect Co., Ltd.
Dec. 2004 Appointed Director of Prospect Co., Ltd.
Aug. 2007

Appointed Representative Director of Prospect Co., Ltd.
(present post)

Apr. 1982

Entered Mitsui Trust and Banking Corporation (currently
Chuo Mitsui Trust and Banking Corporation)

Sep. 1991 Entered Mori Tax and Accounting firm
Auditor(part-time)

May 1994 Entered the auditing and law firm Taiyo Kowa
Akihiro Hirano

Apr. 1997

Registered as a certified public accountant, established
Hirano Public Accountant Office (present post)

0

Jun. 2004 Appointed Auditor, Prospect Co., Ltd
Sep. 2004

Appointed Auditor, Prospect Residential Advisors Co., Ltd(present post)

2. Reference material(1) Investment breakdown
A breakdown of PRI’s investment assets as of the end of the fourth fiscal period (ended July 31, 2007) is as follows:29

Prospect Residential Investment Corporation

Fourth Fiscal Period(As of July 31, 2007)

Third Fiscal Period(As of January 31, 2007)
Type of asset

Use

Total held
(Millions of yen)

Residential
rental units
Residential
Real estate
rental units
Deposit and other assets

Trust beneficiary rights
in real estate

Proportion tototal (%）

Total held
(Millions of yen)

Proportion tototal (%）

52,13091.9

62,220

92.1

1,602

2.8

1,589

2.4

3,023

5.3

3,779

5.5

Total assets
56,755
100.0
67,589Note: Total held amounts are recorded on the balance sheets (total of book values after deducting depreciation).

100.0(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, 2007. With the exception of properties 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

10.2

6,450

July 12, 2005

S002

Prospect Shinonomebashi

3,353

5.3

3,490

July 12, 2005

S003

Maison de Ville Azabudai

2,720

4.3

2,720

July 14, 2005

S004

Maison de
Gyoranzaka

1,768

2.8

1,820

S005

Prospect Omori-Kaigan

1,807

2.9

1,830

July 14, 2005

S006

Abreast Shin-Osaka

1,826

2.9

1,934

July 12, 2005

S007

Maison de Ville Naka-Meguro

1,189

1.9

1,220

July 14, 2005

S008

Roppongi Rise House

1,184

1.9

1,140

July 12, 2005

S009

Prospect Nihonbashi-Honcho

1,070

1.7

1,030

July 12, 2005

610

July 12, 2005

Ville

Takanawa

July 14, 2005

S011

Fragrance Kawasaki

624

1.0

S012

Abreast Sakuragawa

516

0.8

486

July 12, 2005

S013

Dome Takamine

322

0.5

269

July 12, 2005

S014

Dome Yotsuya

275

0.4

232

February, 1988

S015

TK Flats Denenchofu Annex

249

0.4

216

March, 1999

S016

Abreast Nagase

209

0.3

183

March, 1999

S017

Living Stage Higashi-Sendai

435

0.7

419

July, 2006

S018

Prospect Toyonaka Hattori

396

0.6

452

December, 2005

S019

Prospect Bishoen

376

0.6

385

October, 2005

S020

Prospect Shimogamo

411

0.7

388

February, 2006

S021

Prospect Kawaramachi-Gojo

803

1.3

804

January, 200730

Prospect Residential Investment Corporation
1.1
700May, 2005

S022

Prospect Chuo-Rinkan

700

S023

Sky Hills N15

932

1.5

950

March, 2000

S024

Sky Hills Sakaimachi

1,115

1.8

1,120

February, 2002

S025

Domy Chitose

592

0.9

598

March, 1999

S026

Sky Hills Kodai I

691

1.1

694

January, 1992

S027

Exceria Ikebukuro West II

1,020

1.6

996

September, 2006

S028

Prospect Monzennakacho

1,250

2.0

1,220

January, 2007

F001

Prospect Kiyosumi-Teien

2,780

4.4

2,930

February, 2002

F002

Park Terrace Ebisu

2,712

4.3

2,680

October, 2000

F003

BELNOS34

2,534

4.0

2,380

May, 1991

F004

Prospect Dogenzaka

2,294

3.7

2,170

February, 2005

F005

U House Daikan-Cho

1,548

2.5

1,427

March, 1986

F006

U House Gokiso

1,406

2.2

1,344

February, 1991

F007

Angel Heim Nishi-Rokugo No.2

1,401

2.2

1,344

May, 1997

F008

Prospect Onshi-Koen

1,196

1.9

1,260

February, 2005

F009

Deim-Hashimoto

992

1.6

1,030

August, 1987

F010

SK Residence

1,020

1.6

976

February, 1990

F012

Garden City Urawa

878

1.4

868

February, 1993

F013

Garden City Kita-Toda

731

1.2

724

June, 1993

F014

U House Tsurumai II

685

1.1

560

February, 1991

F017

Living Stage Minami-Sendai

275

0.4

279

April, 1995

F019

Prospect Glarsa Hiroo

3,905

6.2

4,500

November, 2005

F020

Prospect Katsura

570

0.9

565

March, 1996

F021

Crown Heim Nishi-Tanabe

601

1.0

598

January, 2004

F022

Takasagoseki Nibankan

810

1.3

810

February, 1995

F023

Prospect Machiya

547

0.9

557

November, 2006

F024

Prospect Hatsudai

730

1.2

732

February, 2006

F025

Prospect Morishita

1,480

2.4

1,510

January, 2007

F026

Prospect Nishi-Sugamo

1,419

2.3

1,420

June, 2004

Total

62,746

100.0

63,025Note 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,
Cash Distribution 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 theInvestment Corporation’s closing date. The properties appraised by each appraiser are shown below, with the property
codes corresponding to those in the above table.
Aoyama Realty Advisors Inc.: S001 to S005, S007 to S009, S018 to S021, F001, F003, F004, F009, F010, F012, F019 toF023, and F026
Chuo Real Estate Appraisal Co., Ltd.: S006, S011 to S017, F005 to F007, F013, F014 and F017
Tanizawa Sogo Appraisal Co., Ltd.: S023 to S026, F002 and F008
Mitsui Real Estate Sales Co., Ltd.: S022, F024, and F025

31

Prospect Residential Investment Corporation
Daiwa Real Estate Appraisal Co., Ltd.: S027, and S028

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 real estate.
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)TK Flats
Shibuya
Prospect
Shinonomeb
ashi
Maison de
Ville
Azabudai
Maison de
Ville
Takanawa
Gyoranzaka
Prospect
Omori-Kaigan

Shibuya-ku,
Tokyo

1,800.47

6,903.54

5,926.79

194

167

26,867

1

85.9

86.1

Koto-ku,Tokyo

1,385.45

4,849.20

4,672.36

171

165

17,431

1

96.4

96.5

Minato-ku,
Tokyo

444.01

2,567.09

2,285.77

91

82

11,342

1

89.0

90.1

638.65

1,778.37

1,753.32

70

69

8,558

1

98.6

98.6

Ota-ku,Tokyo856.82

2,478.04

2,478.04

89

89

8,955

1

100.0

100.0

AbreastShin-Osaka
Maison de
Ville
S007
Naka-MeguroOsaka-shi,
Osaka766.13

2,984.64

2,734.32

92

84

17,152

51

91.6

91.3

275.36

1,275.00

1,173.00

50

46

5,521

1

92.0

92.0

Roppongi
Rise House
Prospect
S009 NihonbashiHoncho

Minato-ku,
Tokyo

574.65

1,209.87

1,094.63

34

30

4,892

1

90.5

88.2

174.36

1,290.49

1,245.59

50

49

5,393

1

96.5

98.0

228.05

1,065.96

1,044.40

45

44

3,649

1

98.0

97.8

S001

S002

S003

S004

S005

S006

S008

Minato-ku,
Tokyo

Meguro-ku,
Tokyo

S011

Fragrance
KawasakiChuo-ku,Tokyo
Kawasaki-shi,Kanagawa

S012

AbreastSakuragawa

Osaka-shi,
Osaka

361.991,009.92

967.92

48

46

2,868

1

95.8

95.8

S013

Dome
Takamine

Nagoya-shi,
Aichi

983.60946.04790.28

36

30

1,642

1

83.5

83.3

S014

Dome
Yotsuya

Nagoya-shi,
Aichi

812.09765.90618.02

36

29

1,391

1

80.7

80.6

TK Flats
Denenchofu
Annex

Ota-ku,Tokyo

286.90429.50429.50

14

14

1,537

1

100.0

100.0

AbreastNagaseLiving Stage
S017 Higashi-Sen
dai
Prospect
S018 Toyonaka
Hattori

Higashiosaka-shi, Osaka

318.54532.98532.98

26

26

1,404

26

100.0

100.0

Sendai-shi,
Miyagi904.001,539.41

1,187.01

52

40

2,211

1

77.1

76.9

Toyonaka-shi, Osaka

352.75986.34986.34

34

34

2,448

1

100.0

100.0

S019

Prospect
Bishoen

Osaka-shi,
Osaka313.24901.15901.15

26

26

2,266

1

100.0

100.0

S020

Prospect
Shimogamo

Kyoto-shi,
Kyoto

234.53675.51675.51

31

31

1,966

1

100.0

100.0

S015

S016

32

Prospect Residential Investment Corporation
ProspectKawaramachi-Gojo

Shimogyo-ku,
Kyoto

234.98

1,528.12

1,250.12

52

43

3,736

1

81.8

82.7

S022

Prospect
Chuo-Rinkan

Yamato-shi,
Kanagawa

589.73

1,098.24

1,075.36

48

47

3,408

1

97.9

97.9

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

S024

Sky
Hills
Sakaimachi

Chitose-shi,
Hokkaido

4,189.46

6,775.39

6,775.39

134

134

6,776

1

100.0

100.0

S025

Domy
Chitose

Chitose-shi,
Hokkaido

1,796.60

3,383.02

3,383.02

111

111

4,244

1

100.0

100.0

Sky
Hills
Kodai I
Exceria
S027 IkebukuroWest II

Chitose-shi,
Hokkaido

2,401.78

4,712.47

4,712.47

120

120

5,594

1

100.0

100.0

Toshima-ku,
Tokyo

290.14

1,379.52

1,126.68

48

40

4,275

1

81.7

83.3

Koto-ku,Tokyo

613.01

1,790.56

1,790.56

62

62

5,850

1

100.0

100.0

Koto-ku,Tokyo

1,586.77

5,556.73

5,517.29

77

76

14,742

1

99.3

98.7

Shibuya-ku,
Tokyo

790.182,705.09

2,663.77

51

50

12,140

1

98.5

98.0

Ebisu

Katsushika-ku, Tokyo

3,092.58

5,321.89

4,986.64

100

93

13,521

1

93.7

93.0

BELNOS34

Shibuya-ku,
Tokyo

274.24

2,058.53

1,878.15

47

43

9,358

1

91.2

91.5

Nagoya-shi,
Aichi

2,060.52

5,944.44

5,842.38

96

94

9,758

1

98.3

97.9

Nagoya-shi,
Aichi

3,113.87

5,127.19

4,538.67

78

74

8,005

1

88.5

94.9

Ota-ku,Tokyo

1,666.28

2,776.64

2,776.64

40

40

6,716

1

100.0

100.0

Koto-ku,Tokyo

772.002,033.77

2,003.95

61

60

6,499

1

98.5

98.4

Sagamihara-shi, Kanagawa

898.13

3,170.41

2,698.57

92

76

5,691

1

85.1

82.6

oto

Toshima-ku,
Tokyo

474.55

1,624.49

1,581.56

30

29

5,237

1

97.4

96.7

SK Residence

Saitama-shi,
Saitama

1,557.49

2,468.51

2,468.51

30

30

4,965

1

100.0

100.0

Toda-shi,
Saitama

2,382.00

3,678.83

3,603.66

49

48

5,392

1

98.0

98.0

Nagoya-shi,
Aichi

615.51

2,262.63

2,191.20

34

33

3,752

1

96.8

97.1

Sendai-shi,
Miyagi476.23

1,277.10

1,135.35

27

24

1,868

1

88.9

88.9

Shibuya-ku,
Tokyo

803.31

3,846.27

3,820.63

112

111

19,718

1

99.3

99.1

Kyoto-shi,
Kyoto

1,354.29

1,769.96

1,649.88

29

27

3,294

1

93.2

93.1

S021

S026

ProspectMonzennakacho
Prospect
F001 Kiyosumi-Tei
enS028

F002 Park Terrace

F003

F004 Prospect

Dogenzaka
F005 U House

Daikan-Cho
F006 U House

GokisoAngel Heim
F007 Nishi-Rokugo
No.2
F008 Prospect

Onshi-Koen
F009 Deim-Hashim

F010

F012 Garden City

Urawa
F013 Garden City

Kita-Toda
F014 U House

Tsurumai II
Living Stage
F017 Minami-Send
aiF019 Prospect

Glarsa Hiroo
F020 Prospect

Katsura33

Prospect Residential Investment Corporation
F021 Crown Heim

Osaka-shi,
Osaka444.201,517.86

1,453.20

22

21

2,971

1

95.7

95.5

Sendai-shi,
Miyagi

1,794.83

3,336.52

3,110.73

41

38

5,284

1

93.2

92.7

Arakawa-ku,
Tokyo

251.441169.37

1,169.37

21

21

3,069

1

100.0

100.0

Machiya
Prospect
HatsudaiShibuya-ku,
Tokyo

586.68817.71817.71

22

22

3,423

1

100.0

100.0

ProspectMorishita
ProspectF026 Nishi-SugamoKoto-ku,Tokyo

736.43

2,399.23

2,352.89

45

44

7,238

1

98.1

97.8

Koto-ku,Tokyo

368.152,023.42

2,023.42

42

42

6,610

1

100.0

100.0

49,159.70

122,497.72

116,649.56

3,021

2,865

325,742

124

95.2

94.8

Nishi-Tanabe
F022 Takasagoseki

Nibankan
F023 Prospect

F024

F025

Tota

Note 1. In the ‘Site Area’ column, figures for total site area of real estate or entrusted real estate are based on data inregister books or records. 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 real estate 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 plansat completion, etc.
Note 4. In the ‘Total Leasable Residential Units’ column, figures represent leasable units for portions of real estate or
entrusted real estate acquired by PRI.
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 July 31, 2007.
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 July 31, 2007. Such revenues
include common area maintenance fee revenues but exclude revenues from monthly contracted parking spaces or suchsupplemental facilities as storage and locker space.
Note 7. In the ‘Total Number of Tenants’ column, ‘1’ represents cases of lease contracts concluded between trust
beneficiaries and master lessers. In such cases, figures are based on the assumption that all end-tenants have agreed with
their master lesser to be lessers (sub-lessers). In the cases that one tenant leases more than one unit, the number oftenants is recorded as ‘1.’ These figures are based on information current as of July 31, 2007.
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 first decimal place. The ‘Total’ percentage figure represents the proportion of total leased floor space tototal leasable floor space as of July 31, 2007.
Note 9. In the ‘Occupancy Ratio (By No. of Residential Units)’ column, percentage figures represent the proportion ofleased floor space to leasable floor space of each asset. In the ‘Occupancy Ratio (By Space)’ column, percentage figures
are rounded to the nearest first decimal place. The ‘Total’ percentage figure represents the proportion of total leased
floor space to total leasable floor space as of July 31, 2007.

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

Property Name

PurposePlanned period

Planned work amount (millions of
yen)
Note
Paid in this
Total
Total
periodpaid

Dome Yotsuya

Large-scale repair work

Early October 2007

6.0

－

－

B E L N O S 34

Water-supply, sewerage, andsanitation facilities

Late September 2007

8.5

－

－

SK Residence

Large-scale repair work

Late November 2007

29.0

－

－

34

Prospect Residential Investment Corporation
Deim-Hashimoto

Air conditioning,

Late October 2007

3.2

－

－

Deim-Hashimoto

Water-supply, sewerage, andsanitation facilities

Late August 2007

1.9

－

－

Early November 2007

10.5

－

－

Mid-November 2007

5.2

－

－

Early December 2007

1.0

－

－

Early November 2007

3.5

－

－

Early October 2007

3.1

－

－

Mid-October 2007

5.2

－

－

Late October 2007

1.0

－

－

Mid-November 2007

1.0

－

－

Mid-November 2007

1.0

－

－

Late November 2007

1.0

－

－

Late November 2007

1.0

－

－

Early December 2007

1.0

－

－

Mid-December 2007

1.0

－

－

Early December 2007

1.0

－

－

Early October 2007

3.3

－

－

Deim-Hashimoto

Abreast Shin-Osaka

Abreast Shin-Osaka

Domy Chitose
Takasagoseki Nibankan
Takasagoseki Nibankan
Takasagoseki Nibankan

Living Stage Higashi-Sendai

Living Stage Higashi-Sendai
Living Stage Minami-Sendai
Living Stage Minami-Sendai
U House Daikan-Cho
U House Tsurumai II

U House Tsurumai II

U House Gokiso

Painting of steel parts andreplacementment of a large
sheet at the RC staircase andcorridors
Replacementment
water-supply
meterswater-heater metersofandReplacementment of ceilingmaterial in the large bathfacility and repair of tiles of abathtub
Replacementmentofwater-supply meters
Repair of water leaks on
external walls
Replacementmentofwaterproofing material
New installation of security
camerasNew installation of fences inopen corridors on the groundfloor to prevent trespassing
New installation of security
camerasSecurity measures for theexternal staircase
New installation of security
camerasNew installation of security
camerasNew installation of security
camerasOverhaulandreplacementment of leaky
pump-up pumps underneaththe external staircase
Renovation of room No. 705

U House Gokiso

Renovation of room No. 1201

Early October 2007

3.1

－

－

Sky Hills Kodai I

Replacementment of cooking
facilities in kitchens

Late October 2007

1.5

－

－

Sky Hills Kodai I

Replacementmentofemergency lights, gas sensors,
and joint-hoses for the watersupplyPainting of steel fixtures andemergency hatches

Early September 2007

1.9

－

－

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

35Prospect Residential Investment Corporation
Amount paid
(millions of yen)

Purpose

PeriodAbreast Shin-Osaka

Replacement of PBX

From March 26,
March 30, 2007

Maison de Ville Takanawa Gyoranzaka

Replacement of key cylinders

From March 1, 2007
May 1, 2007

toReplacement of key cylinders

From March 1, 2007
May 16, 2007

toReplacement of toilet bowls

From February 26, 2007 to
July26, 2007

3.2

Replacement
systemFrom March 30,
April 23, 2007

3.6

Park Terrace Ebisu
Maison de Ville Azabudai
Garden City Urawa
Deim-Hashimoto
Living Stage Minami-Sendai

Dome Takamine

U House Tsurumai IIofinterphone

2007

2007

to

From July 3, 2007
July 27, 2007

toPainting of external steel

From July 3, 2007
July 27, 2007

to

From April 6, 2007
June 30, 2007

toRepair of sunken drain tanks

1.7
1.5

to

Painting of external steel

Replacement of external sewage
tanks and external rain-water
tanks

2.1

3.4
3.6

4.4

From February 1, 2007 to
February 3, 2007

1.4

U House Gokiso

Renovation of room No. 219

From February 1, 2007 to
February 28, 2007

2.9

U House Gokiso

Renovation of room No. 207

From April 20, 2007
June 1, 2007

to

2.9

U House Gokiso

Large-scale repair work

From March 9, 2007
June 27, 2007

to

Other properties

Replacement of air conditioners,
new installation of security
cameras, and others

50.7

11.4

Total

93.4

Note. Numbers are rounded down to the nearest first decimal place.

③Reserve for repair expenses
PeriodThird Fiscal Period(August 1, 2006 to January 31, 2007)(Millions of yen)
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

309

376

Reserved amount in the period

169

64

Withdrawal in the period
Balance carried forward

112
376

57
384

Items
Reserve balance at the end of
previous fiscal period４）Figures in Engineering Reports① Outline of building engineering reports
In addition to receiving support from research firms, PRI commissions them for the following items for eachof its investment real estate or entrusted real estate properties.
—Examination of building deterioration, planning of short- and long-term repair expenses, research ofcompliance in accordance with the Building Standards Law, research of hazardous material contents inbuildings, and research of soil conditions.
Nevertheless, the contents of these reports are the opinions of the respective research firms, and PRI does not36

Prospect Residential Investment Corporation
guarantee the appropriateness and accuracy of such contents.
② Outline of earthquake risk reports
PRI commissions Tokyo Bldg-Tech Center Co., Ltd. (TBTC) for earthquake risk reports and other reports foreach investment real estate and entrusted real estate property.
Nevertheless, the contents of the reports are the opinions of TBTC, and PRI does not guarantee theappropriateness and accuracy of such contents.

Code

S001
S002
S003
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S015
S016
S017
S018

Property nameTK Flats Shibuya
Prospect Shinonomebashi
MaisondeVille
Azabudai
Maisonde
Ville
Takanawa Gyoranzaka
Prospect Omori-Kaigan
Abreast Shin-Osaka
MaisondeVille
Naka-Meguro
Roppongi Rise House
ProspectNihonbashi-Honcho
Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
TK Flats Denenchofu
Annex
Abreast Nagase
LivingStage
Higashi-Sendai
ProspectToyonaka
Hattori

S019

Prospect Bishoen

S020

Prospect Shimogamo
ProspectKawaramachi-Gojo
Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi
Domy Chitose
Sky Hills Kodai I
Exceria Ikebukuro WestII
Prospect Monzennakacho
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

S021
S022
S023
S024
S025
S026
S027
S028
F001
F002
F003
F004
F005
F006
F007
F008
F009
F010

Research firm
(Note 1)

Takenaka
TBTC
TBTC
TBTC

Estimate of repair expenses(thousands of yen rounded
down)
Urgen Withint
one year
－
－

490
－

－

－

Rebuilding
price ofbuilding(millionsof yenOver 12roundedyears
down)
184,420
2,174
10,1801,450
31,550772Month andyear ofbuilding
engineering
reports
April 2005
April 2005
April 2005
April 2005

Probable Month andMaximumyear of
Loss (%) earthquake(Note 2) risk reports
8
19
10

－

－

47,800

463

12

TBTC
TBTC
TBTC

－
－

－
－

6,830
94,760600
910

April 2005
May 2005

10
12

－

－

37,070372

April 2005

7

TBTC
TBTC

－

－

3,570

15

－

－

3,830

362 February 2005
April 2005
385

TBTC
TBTC
Takenaka
Takenaka
TBTC

－
－
－
－

－
－
870
370

2,990
11,57049,76049,250

274
275
161
138

－

－

21,040

108

TBTC
TBTC

－

－

21,200

－

300

－

12

July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007

April 2005
May 2005
April 2005
April 2005
April 2005

13
15
6
5

160

May 2005

12

46,660312

August 2005

7－

18,490

277

－

－

8,360

209

－

－

2,460

203

December
2005
December
2005
March 2004

－

－

4,320

440

January 2007

12

TBTC
Takenaka
Takenaka
Takenaka
Takenaka
TBTC

－
300
－
300
1,200

－
－
－
－
680

3,960
52,71098,66063,750133,960

301
609
850
415
581

February 2007
March 2007
March 2007
March 2007
March 2007

14
2
4
3
4

－

－

4,860

350

May 2007

10

TBTC
Takenaka
TBTC
TBTC
TBTC
Takenaka
Takenaka

－
－
－
－
－
－
－

－
100
－
150
－
1,990
500

5,400
238,790
41,750174,670
4,130
260,200
165,900410
May 2007
1,332
March 2003
April 2005
700
April 2005
1,735
552 February 2005
1,181
March 2003
1,141
July 2007

19
15
11
12
9
11
10

Takenaka
TBTC
TBTC
TBTC

－

130

108,540

580

March 2003

11

July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007

－
－
－

－
150
150

4,980
38,28052,560

574
646
413

February 2005
April 2005
April 2005

25
13
11

July 2007
July 2007
July 2007

竹中工務店
竹中工務店

TBTC
TBTC

37

10

9
14
5

July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007

F012
F013
F014
F017
F019

Garden City Urawa
Garden City Kita-Toda
U House Tsurumai II
LivingStage
Minami-Sendai
Prospect Glarsa Hiroo

F020

Prospect Katsura
Crown
Heim
F021
Nishi-Tanabe
F022 Takasagoseki Nibankan
F023 Prospect Machiya
F024 Prospect Hatsudai
F025 Prospect Morishita
F026 Prospect Nishi-Sugamo
Total portfolio

TBTC
TBTC
Takenaka
TBTC

Prospect Residential Investment Corporation
－
－
－

4,569
5,695
820

54,83068,340125,540

605
875
491

April 2005
April 2005
April 2005

5
12
17

－

－

36,750300

August 2005

7

－

－

16,680

1,185

TBTC
TBTC

－

－

41,620

－

－

7,070

TBTC
TBTC
TBTC
TBTC
TBTC

－
－
－
－
－
1,800

－
－
－
－
－
16,96480,220
2,680
2,190
4,930
3,890
2,553,950

TBTC

351

December
2005
March 2006

7

405

March 2006

11

761 February 2006
290 October 2006
179 Janurary 2007
616 February 2007
504 February 2007
28,977

11
14
8
11
10
7.7

7

July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007
July 2007

Note 1. In the ‘Research firm’ column, TBTC stands for Tokyo Bldg-Tech Center Co., Ltd., and Takenaka stands for
Takenaka Corporation.
Note 2. 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 estimated restoration
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 3. PRI has purchased earthquake insurance for this property.
Note 4. 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 tenants and others① Outline of leasing conditions for each real estate or entrusted real estate property

Code

Property Name(As of July 31, 2007)
Percentage
share to total
revenues(%)(㎡)

Number oftenants

Total Monthly
RentalRevenues(Thousands ofYen)

Total Leasable
Floor Space

Total Leased
Floor Space

(㎡)

S001

TK Flats Shibuya

6,903.54

5,926.79

1

190

9.5

S002

Prospect Shinonomebashi

4,849.20

4,672.36

1

110

5.5

S003

Maison de Ville Azabudai

2,567.09

2,285.77

1

77

3.9

S004

Maison de
Gyoranzaka

1,778.37

1,753.32

1

54

2.7

S005

Prospect Omori-Kaigan

2,478.04

2,478.04

1

61

3.1

S006

Abreast Shin-Osaka2,984.64

2,734.32

51

109

5.4

S007

Maison de Ville Naka-Meguro

1,275.00

1,173.00

1

38

1.9

S008

Roppongi Rise House

1,209.87

1,094.63

1

29

1.5

S009

Prospect Nihonbashi-Honcho

1,290.49

1,245.59

1

35

1.7

S011

Fragrance Kawasaki

1,065.96

1,044.40

1

22

1.1

S012

Abreast Sakuragawa

1,009.92

967.92

1

19

1.0

S013

Dome Takamine

946.04790.28

1

11

0.6

Ville

Takanawa

38

Prospect Residential Investment Corporation
S014

Dome Yotsuya

765.90618.02

1

10

0.5

S015

TK Flats Denenchofu Annex

429.50429.50

1

8

0.4

S016

Abreast Nagase

532.98532.98

26

8

0.4

S017

Living Stage Higashi-Sendai

1,539.41

1,187.01

1

16

0.8

S018

Prospect Toyonaka Hattori

986.34986.34

1

15

0.8

S019

Prospect Bishoen

901.15901.15

1

13

0.7

S020

Prospect Shimogamo

675.51675.51

1

12

0.6

S021

Prospect Kawaramachi-Gojo

1,528.12

1,250.12

1

18

0.9

S022

Prospect Chuo-Rinkan

1,098.24

1,075.36

1

17

0.9

S023

Sky Hills N15

4,754.86

4,754.86

1

10

0.5

S024

Sky Hills Sakaimachi

6,775.39

6,775.39

1

14

0.7

S025

Domy Chitose

3,383.02

3,383.02

1

8

0.4

S026

Sky Hills Kodai I

4,712.47

4,712.47

1

11

0.6

S027

Exceria Ikebukuro West II

1,379.52

1,126.68

1

4

0.2

S028

Prospect Monzennakacho

1,790.56

1,790.56

1

6

0.3

F001

Prospect Kiyosumi-Teien

5,556.73

5,517.29

1

97

4.9

F002

Park Terrace Ebisu

2,705.09

2,663.77

1

78

3.9

F003

BELNOS34

5,321.89

4,986.64

1

92

4.6

F004

Prospect Dogenzaka

2,058.53

1,878.15

1

60

3.0

F005

U House Daikan-Cho

5,944.44

5,842.38

1

62

3.1

F006

U House Gokiso

5,127.19

4,538.67

1

56

2.8

F007

Angel Heim Nishi-Rokugo No.2

2,776.64

2,776.64

1

54

2.7

F008

Prospect Onshi-Koen

2,033.77

2,003.95

1

47

2.4

F009

Deim-Hashimoto

3,170.41

2,698.57

1

39

2.0

F010

SK Residence

1,624.49

1,581.56

1

34

1.7

F011

Garden City Urawa

－

－

－

30

1.5

F012

Garden City Kita-Toda

2,468.51

2,468.51

1

29

1.5

F013

U House Tsurumai II

3,678.83

3,603.66

1

36

1.8

39

Prospect Residential Investment Corporation
F014

Living Stage Minami-Sendai

2,262.63

2,191.20

1

26

1.3

F017

Prospect Glarsa Hiroo

1,277.10

1,135.35

1

13

0.7

F019

Prospect Katsura

3,846.27

3,820.63

1

124

6.2

F020

Crown Heim Nishi-Tanabe

1,769.96

1,649.88

1

23

1.2

F021

Takasagoseki Nibankan

1,517.86

1,453.20

1

19

1.0

F022

Prospect Machiya

3,336.52

3,110.73

1

37

1.9

F023

Prospect Hatsudai

1,169.37

1,169.37

1

19

1.0

F024

Prospect Morishita

817.71817.71

1

15

0.7

F025

Prospect Nishi-Sugamo

2,399.23

2,352.89

1

34

1.7

F026

TK Flats Shibuya

2,023.42

2,023.42

1

26

1.3

116,649.56

124

2,001

100.0

Total

122,497.72

Note: Leasing operations started from March 2006 for Prospect Kawaramachi-Gojo (Code: S021), Prospect Chuo-Rinkan(S022), Prospect Hatsudai (F024), Prospect Morishita (F025), and Prospect Nishi-Sugamo (F026). Leasing operations
started from May 2006 for Sky Hills N15 (S023), Sky Hills Sakaimachi (S024), Domy Chitose (S025), and Sky Hills
Kodai I (S026). Leasing operations started from June 2006 for Exceria Ikebukuro West II (S027), and Prospect
Monzennakacho (S028). Leasing operations ended on July 30, 2007 for O Fort Nishi-Kasai.
② Occupancy rates(End of each month)

Property Name

Code

January 2007

February
2007

March
2007

April 2007

May
2007

June
2007

July
2007

S001

TK Flats Shibuya

92.6

91.1

90.3

90.7

86.3

84.1

85.9

S002

Prospect Shinonomebashi

98.2

99.5

99.5

98.3

96.4

95.3

96.4

S003

Maison de Ville Azabudai

95.5

93.8

95.9

91.4

89.5

87.5

89.0

100.0

97.2

97.2

97.2

94.4

97.2

98.6

S004

Maisonde

Ville

Takanawa

Gyoranzaka

S005

Prospect Omori-Kaigan

99.0

100.0

98.2

96.2

97.2

99.0

100.0

S006

Abreast Shin-Osaka

87.5

87.5

87.5

93.7

94.8

92.7

91.6

S007

Maison de Ville Naka-Meguro

96.0

98.0

100.0

98.0

92.0

92.0

92.0

S008

Roppongi Rise House

90.4

88.0

82.7

77.9

80.3

88.1

90.5

S009

Prospect Nihonbashi-Honcho

97.9

100.0

98.4

98.4

96.3

97.9

96.5

95.5

95.5

95.5

91.2

98.0

S011

Fragrance Kawasaki

97.7

100.0

S012

Abreast Sakuragawa

97.9

100.0

100.0

97.9

100.0

97.9

95.8

S013

Dome Takamine

94.5

100.0

94.5

86.3

83.5

83.5

83.5

S014

Dome Yotsuya

100.0

97.4

100.0

86.2

86.2

80.7

80.7

S015

TK Flats Denenchofu Annex

71.3

64.2

78.7

78.7

100.0

100.0

100.0

S016

Abreast Nagase

100.0

100.0

92.3

100.0

100.0

100.0

100.0

S017

Living Stage Higashi-Sendai

86.8

85.0

78.9

86.8

83.1

77.3

77.1

S018

Prospect Toyonaka Hattori

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

96.6

100.0

100.0

S019

Prospect Bishoen

100.0

100.0

S020

Prospect Shimogamo

96.9
－

96.9
－

100.0

100.0

96.9

96.9

100.0

52.6

64.9

76.6

80.2

81.8

－

－

97.9

97.9

97.9

97.9

97.9

S021

Prospect Kawaramachi-Gojo

S022

Prospect Chuo-Rinkan

40

Prospect Residential Investment Corporation
Sky Hills N15

－

－

－

－

100.0

100.0

100.0

Sky Hills Sakaimachi

－

－

－

－

100.0

100.0

100.0

Domy Chitose

－

－

－

－

100.0

100.0

100.0

S026

Sky Hills Kodai I

－

－

－

－

100.0

100.0

100.0

S027

Exceria Ikebukuro West II

－

－

－

－

－

83.2

81.7

S028

Prospect Monzennakacho

－

－

－

－

－

100.0

100.0

F001

Prospect Kiyosumi-Teien

98.7

100.0

98.7

98.7

100.0

100.0

99.3

F002

Park Terrace Ebisu

97.7

100.0

100.0

98.7

97.0

98.7

98.5

F003

BELNOS34

92.3

91.3

93.0

90.0

90.2

89.9

93.7

F004

Prospect Dogenzaka

92.2

90.0

93.5

95.5

89.6

87.7

91.2

F005

U House Daikan-Cho

98.3

95.9

99.1

99.1

98.3

98.3

98.3

90.5

88.3

86.8

86.8

88.5

S023
S024
S025

F006

U House Gokiso

91.1

91.1

F007

Angel Heim Nishi-Rokugo No.2

100.0

97.7

100.0

94.9

94.9

94.9

100.0

F008

Prospect Onshi-Koen

100.0

100.0

98.2

92.8

98.2

98.1

98.5

F009

Deim-Hashimoto

93.6

94.8

95.5

90.2

89.7

89.0

85.1

F010

SK Residence

91.9

89.1

83.2

86.0

91.9

91.9

97.4

F011

Garden City Urawa

96.4

100.0

100.0

89.3

78.6

82.1

－

F012

Garden City Kita-Toda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

F013

U House Tsurumai II

98.0

100.0

100.0

98.0

98.0

98.0

98.0

100.0

96.8

96.8

96.8

96.8

88.9

92.6

88.9

88.9

88.9

98.5

99.3

F014

Living Stage Minami-Sendai

100.0

96.8

F017

Prospect Glarsa Hiroo

88.9

88.9

F019

Prospect Katsura

98.7

100.0

98.9

96.7

97.3

F020

Crown Heim Nishi-Tanabe

96.5

93.1

89.7

93.2

93.2

93.2

93.2

F021

Takasagoseki Nibankan

100.0

95.7

95.5

95.5

91.2

91.2

95.7

F022

Prospect Machiya

93.2

93.2

93.2

95.4

95.4

93.2

93.2

F023
F024
F025
F026

Prospect Hatsudai

76.6
－
－
－

90.6

100.0

100.0

100.0

100.0

100.0

－
－
－

96.1
100.0
100.0

96.1
93.6
100.0

96.1
93.6
100.0

96.1
100.0
100.0

100.0
98.1
100.0

Prospect Morishita
Prospect Nishi-Sugamo
TK Flats Shibuya

Note: The formula to calculate occupancy rate is ‘leased floor space/leasable floor space,’ with results rounded to thenearest first decimal place.
（６）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 fourth fiscal period.
（７）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)

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)

Number ofproperty
23

44,02770.1

58,284.32

47.6

5

3,925

6.3

11,481.95

9.4

41

Prospect Residential Investment Corporation
Other Regions (Note 1)
Total

21

14,794

23.6

52,731.45

43.0

49

62,746100.0

122,497.72

100.0

Note 1. The "other regions" category refers to government-designated cities and prefectural capitals, excluding regions
within the Tokyo Metropolitan area, as well as other cities of equivalent size and commuter belts for all of theaforementioned 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(millions of yen
price to total
totalrounded down)
(㎡)
(%)
(%)
(Note 1)
(Note 3)(Note 2)
(Note 2)

Number ofproperty

Up to one year
More than one year and up to fiveyears
More than five years and up to ten
years
More than ten years
Total

4

3,620

5.8

5,867.57

4.8

17

27,94544.5

36,155.13

29.5

11

14,782

23.6

30,767.95

25.1

17

16,39926.1

49,707.07

40.6

49

62,746100.0

122,497.72

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).
③ Type of unit
Portfolio diversification by type of units is as follows. In the ‘Number of property,’ ’Acquisition Price,’ and‘Percentage share of Acquisition Price to total’ columns, buildings are categorized as unmarried individual type orfamily type. In the ‘Total leasable floor space’ and ‘Percentage share of floor space to total’ columns, each unit iscategorized as unmarried individual type or family type.

Type of unit (Note 1)

Number ofproperty

Percentage
Acquisition
share ofprice (millions acquisitionof yen rounded price to total
down) (Note 2)(%)(Note 3)

Total leasable
floor space(㎡)(Note 4)

Percentage
share of floor
space to total(%)(Note 3)

Unmarried individual

27

32,232

51.4

59,611.13

48.7

Family22

30,514

48.6

62,886.59

51.3

Total

49

62,746100.0

122,497.72

100.0

Note 1. The Asset Management Company categorizes residential property units by type and total leasable floor space,as shown in the table below. Based on these criteria, the Asset Management Company has set portfolio composition
targets for these types of residential properties, also included in the table below. The actual composition of the portfolio,
however, may temporarily differ from these targets due to various economic conditions and the status of the real estatemarket. In principle, the types of residential units, namely, for unmarried individuals or families, are delimited by total
leasable floor space. For properties that offer both types of residential units, PRI determines the most representative
type for the purpose of classification in its documentation. The representative type is determined in line with aproperty’s majority residential-unit type. Accordingly, the “percentage share of total portfolio” category in the tablebelow is based on the representative type of each residential property.

42

Prospect Residential Investment Corporation
Total
PercentPeripheral
Property Leasable
age Share
Tenant Type
Type-Specific Market Characteristics
DemandFloorof Total
Type
Characteristics
Space
Portfolio
Tenants in thisDemand is high, particularly in the
category tend
Tokyo Metropolitan area and major
to value
Single person or
35% toUnmarried Up to 35
local cities where population and theconvenience inmarried couples
65%
individual
m2
number of households arewith no children
transportation
continuously growing. Rent levels are
and everyday
also relatively high.
living.
In addition toconvenience in
Demand for residential properties fortransportation
purchase is high. Substitutive demandand everyday
Families
for family-type residential properties
living, tenants
35
including
35% tois expected to remain strong due toin this category
Family m2ormo
married65%
decreasing company housing units. In
place a highrecouples withaddition, leasing terms for families
value on safety
no children
tend to be longer than those forand security inunmarried individuals.
the property's
locality.
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).
（8）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.
Total Monthly
RentalRevenues(Thousands of
Yen)(Note 3)

Percentage share tototal revenues(%)(Note 4)

Tenant Name

Industry

Total Leased
Floor Space(㎡)

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

Haseko Livenet Co., LtdRealestate43,767.35

35.7

131,15140.3

Tokyu Community Co., LtdRealestate30,087.54

24.6

43,051

13.2

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

Realestate18,647.83

15.2

67,97520.9

92,502.72

75.5

242,177

74.3

Total of Major Tenants

43

Prospect Residential Investment Corporation
Total Portfolio

116,649.56

100.0

325,742100.0

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.
② Leasing conditions of major tenants
Tenants mentioned in section ① are master lessers holdingmaster lease contracts with the purpose of sub-leasing to thethird parties. Rents received from these tenants are of the pass-through type, equal to rents received from end-tenants,
and exclude rent assurance, with the exception of contracts for Sky-Hills Sakaecho. The following chart shows property
names, major leasing conditions such as contract periods, and master lesser details.
Name of master lesser: Haseko Livenet
ProspectRoppongi Rise House
Fragrance Kawasaki
Shinonomebashi
From December 1, 2006 to From April 1, 2007 to From April 1, 2007 to From April 1, 2007 toContract period
March 31, 2008
March 31, 2008
November 30, 2007
March 31, 2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to one month notice up to three notice up to three notice up to threeprior to the end of months prior to the end months prior to the end months prior to the end
Methodforcontract periods, the of contract periods, the of contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
None.
contracts
Property NameTK Flats Shibuya

Property Name

Abreast Sakuragawa

Dome Takamine

Dome Yotsuya

TK Flats Denenchofu
Annex

From November 1,
From September 1, From May 1, 2007 to
From December 1, 20066
2006 to October 31,
2007 to August 31, 2008 April 30, 2008
to November 30, 2007
2007
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to three notice up to one month
months prior to the end months prior to the end months prior to the end prior to the end of
Methodforof contract periods, the of contract periods, the of contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
None.
contracts
Contract period

44

Prospect Residential Investment Corporation
Property Name
Prospect Dogenzaka
U House Daikan-Cho
U House Gokiso
Deim-Hashimoto
From November 1,
From April 1, 2007 to From May 1, 2007 to
From July 3, 2006 to
Contract period
2006 to October 31,
March 31, 2008
April 30, 2008
Septem 30, 20122007
In cases when lessers In cases when lessers In cases when lessers None.
and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to threemonths prior to the end months prior to the end months prior to the end
Methodforof contract periods, the of contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
None.。
contracts
Property Name

U House Tsurumai II

BELNOS 34

From May 1, 2007 to From February 1, 2007
April 30, 2008
to January 31, 2008
In cases when lessers In cases when lessers
and tenants give no and tenants give no
notice up to three notice up to one month
months prior to the end prior to the end of
Methodforof contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are
renewed for a further renewed for a further
one year with the same one year with the same
conditions.
conditions.
Notes for leasing
None.
None.
contracts
Contract period

Prospect Monzennakacho
Exceria IkebukuroWest II
From June 28, 2007 to From June 28, 2007 toContract period
June 30, 2008
June 30, 2008
In cases when lessers In cases when lessers
and tenants give no and tenants give no
notice up to one month notice up to one monthprior to the end of prior to the end of
Methodforcontract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are
renewed for a further renewed for a further
one year with the same one year with the same
conditions.
conditions.
Notes for leasing
None.
None.
contracts
Property Name

45

Prospect Hatsudai

Prospect Morishita

From March 1, 2007 to
February 29, 2008
In cases when lessers
and tenants give no
notice up to one monthprior to the end ofcontract periods, theleasing contracts are
renewed for a further
one year with the same
conditions.

From March 1, 2007 to
February 29, 2008
In cases when lessers
and tenants give no
notice up to one monthprior to the end ofcontract periods, theleasing contracts are
renewed for a further
one year with the same
conditions.

None.

None.

Prospect Residential Investment Corporation
Name of master lesser: Mitsui Fudosan Residential Lease

Property Name

Maison de Ville
Azabudai

Maison de Ville
Takanawa Gyoranzaka

Prospect Omori-Kaigan

Maison de Ville
Naka-Meguro

From October 1, 2006 to From October 1, 2006 From April 1, 2007 to From October 1, 2006
to September 30, 2007 March 31, 2008
to September 30, 2007
September 30, 2007
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to three notice up to threemonths prior to the end months prior to the end months prior to the end months prior to the end
Methodforof contract periods, the of contract periods, the of contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
None.
contracts
Contract period

Prospect Kiyosumi-Teien Park Terrace Ebisu
Property Name

Angel
Heim
Nishi-Rokugo No.2

From April 1, 2007 to From October 1, 2006 to From March 28, 2002 to
March 31, 2008
March 31, 2012
September 30, 2007
In cases when lessers In cases when lessers None.
and tenants give no and tenants give no
notice up to three notice up to threemonths prior to the end months prior to the end
Methodforof contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are
renewed for a further renewed for a further
one year with the same one year with the same
conditions.
conditions.
Notes for leasing
None.
None.
None.。
contracts
Contract period

Name of master lesser: Tokyu Community

Property Name

Living Stage
Higashi-Sendai

Prospect Shimogamo

Living Stage
Minami-Sendai

Prospect Katsura

From September 1,
From April 1, 2007 to From September 1, 2007 From April 1, 2007 toContract period
2007 to August 31,
March 31, 2008
March 31, 2008
to August 31, 2008
2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to one month notice up to three notice up to one month
months prior to the end prior to the end of months prior to the end prior to the end of
Methodforof contract periods, the contract periods, the of contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
None.
contracts

46

Prospect Residential Investment Corporation

Property Name

Crown Heim
Nishi-Tanabe

Takasagoseki Nibankan

ProspectKawaramachi-Gojo

Sky Hills N15

From April 1, 2007 to From April 1, 2007 to From March 15, 2007 to From October 1, 2006
March 31, 2008
March 31, 2008
March 31, 2008
to September 30, 2007
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to one month notice up to three notice up to one month notice up to threeprior to the end of months prior to the end prior to the end of months prior to the end
Methodforcontract periods, the of contract periods, the contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
None.
contracts
Contract period

Property Name

Sky Hills Sakaimachi

Domy Chitose

Sky Hills Kodai I

From October 1, 2006 From October 1, 2006 From October 1, 2006
to September 30, 2007 to September 30, 2007 to September 30, 2007
In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to threemonths prior to the end months prior to the end months prior to the end
Methodforof contract periods, the of contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
Notes for leasing
None.
None.
None.
contracts
Note: With respect to Dome Yotsuya, U House Gokiso, Maison de Ville Azabudai, Maison de Ville Takanawa
Gyoranzaka, Maison de Ville Nakameguro, Park Terrace Ebisu, Sky Hills N15, Sky Hills Sakaimachi, Domy Chitose,and Sky Hills Kodai I, the contract will be renewed for a further one year because no notices were issued from lessers or
tenants as of the date of this document.
Contract period

47

Prospect Residential Investment Corporation
６． 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.

Property Provider
Shin-Nihohn Tatemono
Co., Ltd.

Memorandum
Concerning
Preferential
Information
Provision
Pipeline
SupportContract

Property Information
ProviderMitsui Real Estate Sales
Co., Ltd.

Memorandum
Concerning
Information
Provision

Prospect Residential
Investment Corporation

Asset Custody
Contract

Asset Custodian
Sumitomo Trust andBanking Co., Ltd.

Adminstrative
Duty Contract

Administrative Agent
Sumitomo Trust andBanking Co., Ltd.

General Meeting ofUnitholders
Board of Officers
Executive officer:
Takeo Nishiyoshi
Supervisory Officer:
Chikao Nomura
Supervisory Officer:
Kazuhiko Chiba

Unitholders’RegisterAdministration
Contract

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

Asset Management
Constract
Memorandum Concerning
Information Provision

Pipeline Support Contract

Asset Management Company
Prospect Residential Advisors
Co., Ltd.

Memorandum
Concerning Preferential
Information Provision48

Accouting Auditor
Ernst & Young ShinNihon

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

Names

Outline of related operations

Investment Corporation

Prospect Residential Investment
Corporation

Asset Management Company

Prospect Residential Advisors Co.,Ltd.

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.
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.
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

Sumitomo Trust and Banking Co.,

Administrative Agent

Ltd.

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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:

Unitholders’ Register
Administrator

Mizuho Trust and Banking Co., Ltd.

Prospect Residential Investment Corporation
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 Incorporationb. real estatec. 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
d. 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

Prospect Co., Ltd. (KKP)

memorandum, KKP agrees to supply certain information about(Note)

real estate and to give preferential negotiation rights to PRI withrespect to acquiring real estate as well as real estate related assets

Property Provider

Property Information
ProviderShin-Nihon Tatemono Co.,Ltd.

Mitsui Real Estate Sales Co.,Ltd.

it owns, will own or develop.
Shin-Nihon Tatemono Co., Ltd. concluded the Pipeline Support
Contracts with PRI as well as PRA. Based on the contracts, it
agrees to supply condominiums it develops for rental residential
purposes.
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.

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