Prospect Reit Investment Corporation

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

Eighth Fiscal Period Results(February 1, 2009 to July 31, 2009)

September 11, 20091

Prospect Reit Investment Corporation
Disclaimer
This document contains a translation of the majority of the information provided in the Japanese material for thepresentation of eighth fiscal period results held on September 17, 2009 as well as some information provided in the
Financial Report (Kessan Tanshin) dated September 11, 2009, and others, with some updated data.
This English language document is provided solely for the convenience of and reference by non-Japanese investors, and is
not intended to constitute a disclosure document. The Japanese language presentation material should be referred to as theoriginal of this document. The English translation of legal, accounting, tax and business terms used herein may not precisely
convey the identical meaning of equivalent Japanese terms. With respect to any and all terms herein, including without
limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original
Japanese document and English translation contained herein, the original Japanese document will govern the meaning andinterpretation. Neither PRI, Prospect Reit Advisors, Co., Ltd. (“the Asset Management Company”) nor any of theirrespective directors, officers, employees, partners, shareholders, agents or affiliates will be responsible or liable for thecompleteness, appropriateness or accuracy of this English translation or any portion(s) of any document(s) translated into
English. No person has been authorized to give any information or make any representations other than those contained inthis document in relation to matters set out in this document, and if given or made, such information or representation mustnot be relied upon as having been authorized by PRI, Prospect Reit Advisors, Co., Ltd. or any of their respective directors,
officers, employees, partners, shareholders, agents or affiliates.
The financial statements of PRI have been prepared in accordance with generally accepted accounting principles in Japan(Japanese GAAP), which may materially differ in certain respects from generally accepted accounting principles in otherjurisdictions.
Many provisions within this document contain information that constitutes forward-looking statements. These
forward-looking statements are not a guarantee of future performance and involve risks and uncertainties. Therefore, actual
results may differ materially from those in the forward-looking statements as a result of various factors.
All rights are reserved. Unauthorized duplication and copy of this document and contents herein in any measures is strictly
prohibited.
Contact Information:
Investor Relations
Prospect Reit Advisors, Co., Ltd.
2-2-1, Marunouchi, Chiyoda-ku, Tokyo, 100-0005, Japan
ir@pra.co.jp

2

Prospect Reit Investment Corporation

Prospect Reit Investment Corporation("PRI" or "the Investment Corporation")
Representative: Takeo Nishiyoshi, Executive Officer
Address: 2-2-1 Marunouchi, Chiyoda-ku, Tokyo
Prospect Reit Investment Corporation is listed
as a Japanese Real Estate Investment Trust (J-REIT) on
the Tokyo Stock Exchange with the securities code 8969
(URL of English website http://www.prospect-reit.co.jp/en/index.html)
Planned date of submission of the Company Report (Yukashoken Hokokusho): October 23, 2009
Planned date of distribution payment commencement: October 19, 2009
(1) Operating Performance and Assets for the Fiscal Period Ended July 31, 2009
1) Operating Performance(Millions of yen rounded down unless otherwise stated)
Fiscal Period
Ended

Operating Revenues

Operating Income%%

Ordinary Income

Net Income%%

July 31, 2009

2,236

-0.8

843

-6.6

361

-19.8

362

-19.2

January 31, 2009

2,254

9.8

902

19.0

451

36.6

448

36.9

Fiscal Period
Ended

Return on Net
AssetsNet Income per Unit
Yen
4,825
5,969

July 31, 2009
January 31, 2009

Ordinary Income toTotal Assets
%
0.5
0.6

%
1.0
1.3

Ordinary Income toOperating Revenues
%
16.2
20.0

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

Distributions per
Unit Excluding
Excess ofEarnings (Yen)
4,826
5,970

Total
Distribution
362
448(Millions of yen rounded down unless otherwise stated)
Distributions
Total
Distributio
Payoutin Excess ofDistribution
n Ratio to
Earnings per
s in Excess
Ratio
Net Assets
Unit (Yen)of Earnings
−
−
100.0
1.0
−
−
100.0
1.3

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

(Millions of yen rounded down unless otherwise stated)
Net Assets
Net Assets
Net Assets
to Total Assets
per Unit (Yen)34,90648.7
464,804
34,98048.7
465,782

Total Assets
71,683
71,767(Reference Material) Net worth, JPY 34,906 million as of July 31, 2009 and JPY 34,980 million as of January 31, 2009

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

Cash Flows fromOperating
Activities
702
1,180

Cash Flows from
Investing
Activities
-167
-144

(Millions of yen rounded down unless otherwise stated)
Cash Flows from
Cash and Cash
FinancingEquivalents at The
Activities
End of The Period
-448
3,059
-1,3352,973(2) Forecast of Revenues and Earnings (for the Eighth Fiscal Period: August 1, 2009 to January 31, 2010)(Millions of yen rounded down unless otherwise stated, yoy % change)
Fiscal PeriodEndingOperating
Revenues

January 31, 2010

2,252 (0.7)

Operating
Income910 (7.3)

Ordinary
Income357 (-1.3)

Net Income

356 (-1.8)

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

4,740

−

(Reference Material) Estimated net income per unit for the eighth fiscal period ending July 31, 2010: JPY 4,740

3

Prospect Reit Investment Corporation(3) Others

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

4

Prospect Reit Investment Corporation
1. Structure of the Investment Corporation
At the general meeting of unitholders held on April 10, 2009, the resolution was adopted in that Grant Thornton Taiyo ASG was appointed
as new accounting auditor to replace Ernst & Young ShinNihon LLC which resigned as its term of service ended.

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

2. Management Policy and Operating Conditions(1) Management Policy
Because there have been no changes from the last Company Report (Yukashoken Hokokusho), submitted on April 24,
2009, disclosure is omitted.
(2) Operating Conditions
The Asset Management Company, as founder, filed for the establishment of PRI in accordance with the Investment
Trust and Investment Corporation Law. PRI was established on April 22, 2005 with total capitalization of JPY 201
million, and registered on May 25, 2005 with the Kanto Local Finance Bureau (Registration No. 34). Thereafter, PRI
undertook a public offering of additional investment units (74,698 units) raising JPY 34,420 million. On July 12, 2005,
PRI was listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange under the securities code
8969. To date, PRI has continued to pursue business activities focusing on residential properties for rental purposes
pursuant to its management policy.
1) Operating Conditions during the Fiscal Period under Review
A. Investment Environment
In the fiscal period under review (eighth fiscal period: the six-month period ended July 31, 2009),
the financial crisis spread to the real economy and has escalated to the extent that it has caused a
global economic crisis. Under such circumstances, the Japanese economy has been in a difficult
situation. Going forward, the prospects for an early remarkable bottoming out of the economy
remain low. From a real estate investment perspective as well, the real estate transaction market
has shrunk substantially against the backdrop of the rapidly worsening financial situation, and thesituation has grown so severe that there are arguably no buyers. In the rental housing market, while
deteriorating trends have begun to surface for such properties as high-rent properties in central
Tokyo, although not to the extent of the rapid deterioration seen in rental office market conditions,
quality rental properties with reasonable rent levels located in such areas as the outskirts of Tokyoand other major cities remain relatively strong backed by robust demand.
B. Management Performancea. Although PRI is, consistent with its basic investment policy, dedicated to newly acquiringproperties in an aim to secure steady growth and stable earnings from a medium- to long-term
perspective, no acquisitions were made during the fiscal period under review. PRI also seeks to sellproperties located in urban areas where competition is intensifying, properties with low
profitability and properties that are small in size in an aim to restructure the property portfolio.
During the fiscal period under review, nevertheless, there were neither acquisitions nor sales.
b. Existing property management (Internal Growth)
In an effort to increase occupancy rates and profitability, PRI examined the merits of a variety ofproperty management companies in terms of their individual characteristics, strengths, service
contents and fees. Furthermore, property management companies were selected and dismissed, andproperty management rates set and revised, based on quantitative and qualitative assessments by
the Asset Management Company.
c. Funds Procurement
PRI procured debt financing from Aozora Bank, Ltd. in the amount of JPY 3,500 million for aperiod of three months in February 2009 to refinance an existing loan, and in the amount of JPY
3,500 million for a period of four months and JPY 4,500 million of two years in May 2009 torefinance the foregoing JPY 7,500 million loan. The interest-bearing debt ratio as of July 31, 2009
was 49.4% with total JPY35,404 million of interest bearing debt.
d. PRI and PRA have been studying various measures, aiming at attaining remarkable growth in
PRI’s corporate value, including asset growth and a strengthening of its fundamentals.

5Prospect Reit Investment Corporation
C. Operating Results and Cash Distribution
Accounting for the aforementioned factors, operating revenues totaled JPY 2, 236 million in thefiscal period ended July 31, 2009. Ordinary income was JPY 361 million while net income
amounted to JPY 362 million.
PRI distributes the total amount of its inappropriate retained earnings for each period. Accordingly,
cash distribution for the third fiscal period was JPY 4, 826 per unit (rounded down to the nearestyen).
2) Outlook
A. Operating Environment
With the global economic crisis, the condition of the Japanese economy is also expected to remainharsh. Under such circumstances, the stagnant state of the real estate transaction market and realestate acquisition demand is also expected to persist. In the rental housing market, while suchproperties as high-rent properties in central Tokyo are highly likely to see stronger deteriorating
trends, quality rental properties with reasonable rent levels located in such areas as the outskirts ofTokyo and other major cities are expected to remain relatively strong as robust demand isanticipated.
B.

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

C.

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

D.

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

E.

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

(3) Important Subsequent Events
There is no pertinent matter.
(4) Forecast of Revenues and Earnings
Forecast of revenues and earnings for the ninth fiscal period (August 1, 2009 to January 31, 2010) is as follows. These
forecasts are based on “Assumptions for Forecasts for the ninth Fiscal Period” mentioned afterwards.
Forecast of revenues and earnings for the ninth fiscal period (August 1, 2009 to January 31, 2010)
Operating revenues

JPY 2, 252 million

6Prospect Reit Investment Corporation
Operating income
Ordinary income
Net income
Distributions per unit

JPY 910 million
JPY 357 million
JPY 356 million
JPY 4,740

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

7

Prospect Reit Investment Corporation
Assumptions for Forecasts for the Ninth Fiscal Period (August 1, 2009 to January 31, 2010)

Operating Period
Managed Assets
Investment Units
IssuedInterest-Bearing
Debt Ratio

Operating Expenses

Non-Operating
Expenses

OthersCash Distribution

Assumptions
Ninth fiscal period: From August 1, 2009 to January 31, 2010 (184 days)
Forecasts are based on a property portfolio comprising 53 properties held as of July 31, 2009.
The property portfolio may change, however, due to property acquisition or sale.
Forecasts are based on the assumption that PRI shall not issue additional investment units.
The interest-bearing debt ratio as of July 31, 2009 was 49.4%. Forecasts are, however, basedon an interest-bearing debt ratio of approximately 49.7% as of January 31, 2010, taking into
account an increase in debt financing to acquire additional properties as well as repayment
stemming from the above sale of one property.
The interest-bearing debt ratio is calculated as follows: Interest-bearing debt ratio =Interest-bearing debt ÷ (Interest-bearing debt + Unitholders’ capital) × 100
Forecasts are based on the assumption that PRI shall post repairs, maintenance and renovation
expenses of JPY 86 million (a decrease of JPY 29 million compared with the previous fiscal
period) and shall post property tax and city planning tax of JPY 107 million. Repairs,
maintenance and renovation expenses are estimated based on amounts considered essential foreach property for each fiscal period. Actual repairs, maintenance and renovation expenses foreach fiscal period, however, may differ significantly from these amounts due to unforeseen
circumstances or emergencies. Forecasts are also based on the assumption that PRI shall postproperty management expenses of JPY 179 million (a decrease of JPY 27 million comparedwith the previous fiscal period)
Of the amount of property tax and city planning tax assessed for the property portfolio, theapplicable portion is recorded as rental business expenses for each fiscal period. For properties
acquired during each period, property tax and city planning tax are allocated to the seller andpurchaser on a pro rata basis at the time of acquisition settlement. In the case of PRI, anamount equivalent to the portion allocated to the purchaser is included in the acquisition priceof the property and not recorded as an expense. Forecasts are based on the assumption that PRI
shall post property tax and city planning tax of JPY 125 million (an increase of JPY 5 million
compared with the previous fiscal period).
Depreciation is calculated using the straight-line method inclusive of incidental expenses.
Forecasts are based on the assumption that PRI shall post depreciation expenses of JPY 484
million (a decrease of JPY 1 million compared with the previous fiscal period).
Forecasts are based on the assumption that PRI shall post total interest expenses including
bond interest expenses of JPY 378 million (an increase of JPY 39 million compared with theprevious fiscal period), and debt-related expenses of JPY 167 million (an increase of JPY 38
million compared with the previous fiscal period).
Forecasts for the fiscal period ending in January 2010 are based on the rollover of a JPY 3.0
billion short-term loan (repayment on September 30, 2009) and a JPY 5.0 billion investment
corporation bonds (repayment on October 9, 2009) in the same amounts. There are nolong-term borrowings with repayment dates during the fiscal period ending in January 2010.
PRI and PRA will continue to study various measures including M&A
strategies, aiming at attaining remarkable growth in PRI’s corporate value,
including asset growth and a strengthening of its fundamentals.
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 have no distributions in excess of earnings.

8

Prospect Reit Investment Corporation
3.

Financial Statements(1) Balance Sheets(Thousands of yen)NotesSeventh Fiscal Period(As of January 31, 2009)ASSETS
ＩCurrent assets
Cash and deposits＊1
Entrusted cash and deposits
Rental receivables
Prepaid expenses
Deferred tax assets
Consumption tax receivables
Derivative assets
Other current assets
Reserve for possible losses ofreceivables
Total current assets
II Fixed assets
1. Property and equipment:＊1
Buildings
Accumulated depreciation＊1
Structures
Accumulated depreciation＊1
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures ＊1
Accumulated depreciation
＊1
Land
＊1
Entrusted buildings
Accumulated depreciation＊1
Entrusted structures
Accumulated depreciation
Entrustedmachinery
Accumulated depreciation
Entrusted tools, furniture andAccumulated depreciation
Entrusted land

862,448△108,194
1,131
△351
6,189
△2,7693,307△588

Eighth Fiscal Period(As of July 31, 2009)

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

1,291,069
1,768,022
17,158
222,713
23,862409

1,407
25,545279
25,875△3,215
3,169,057△2,634
3,346,755

754,254
779
3,420
2,718
794,545

32,320,934△2,557,699
161,243△35,232
358,359△94,841
55,047△15,235

126,011
263,518

358,359△107,197

39,812
36,725,509−

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

9

1,131
△395
6,189
△3,164
3,307△838
32,441,755△3,001,016
162,742△42,051

29,763,234＊1

866,388△125,472

70,793△20,051

740,916
735
3,024
2,468
794,545
29,440,739
120,690
251,161
50,742
36,725,573
11,21068,473,804

68,141,808

6,803
6,803

5,696
5,696

28,41447,919135,098
27,02823,5786,859

23,393
777

106,772
68,587,380

186,298
68,333,802

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

10,646
10,646

2,959
2,959

71,767,084

71,683,518(Thousands of yen)

Notes

LIABILITIESＩ Current liabilities
Operating payables
Short-term debt

Seventh Fiscal Period(As of January 31, 2009)＊1

Long-term
Borrowingwithrepayment dates within one year
Current Portion of Investment
Corporation Bonds
Other payables
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Other current liabilities
Total current liabilities
II Long-term liabilities
Investment Corporation Bonds
Long-term debt
Leasehold and security deposits
Total long-term liabilities
Total liabilities
NET ASSETS
I Unitholders’ capital
1. Unitholders’ capital
Unitholders’ capital
2. Retained earnings
Unappropriated retained
earnings for the period
Total retained earnings
Total unitholders’ capital
II Evaluation and conversions
1. Earnings on deferredi
Total evaluation
andEighth Fiscal Period(As of July 31, 2008)

71,6347,500,000

100,025
3,000,000−

17,346,000

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

5,000,000
37,800196,489605−
264,637
1,486
25,947,044−
22,904,000
794,824−
10,058,000

23,698,824
36,786,793

10,829,640
36,776,684

34,621,838

34,621,838

448,355

362,436448,355
35,070,193

362,436
34,984,275△89,902△77,441△89,902△77,441

34,980,291
71,767,084

34,906,833
71,683,518

771,640＊2

hedge

conversions
Total net assets
Total liabilities and net assets

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

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

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

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

Other rental revenues
Gain on sale of real estate＊22,160,486

2,121,562

93,566

115,305−

2,254,053−

2,236,868

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

1,053,178

1,133,698

20,937−

136,272

122,267

Custodian fees

3,606

3,584

Administrative service fees

21,26522,848

Directors’ fees
Transferred to reserve forpossible losses of receivables

6,000

6,000

3,142

−

Losses of receivables

1,599

1,322

Asset management fees

Other operating expenses

105,123

1,351,126

Operating income

103,944

902,926

1,393,667
843,200

III. Non-Operating Income
Interest income

2,493

1,431

Additional refunds−−

Other non-operating income

39

2,533

787

2,218

IV. Non-Operating Expenses
Interest expense

292,950

284,995

Bonds interest expense

55,47854,364

Bonds issuance expense

7,686

7,686

Debt-related expenses

94,073129,020

Other non-operating expenses

4,251

454,441

7,442

483,510

Ordinary income

451,018

361,908

Income before income taxes

451,018

362,488

Income taxes

2,811

Deferred taxes△124

Net income
Retainedearnings
forward

605
2,687

△544

60

448,331

362,42824

8448,355

362,436

brought

Retained earnings at the end of
the period

11Prospect Reit Investment Corporation(3) Statement of Changes in Net Assets
Seventh Fiscal Period (August 1, 2008 to January 31, 2009)

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

UnappropriatedRetained
Earnings

Total
Unitholders’ Capital

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

34,621,838

710,320

710,320

35,332,158△69,336△69,336

35,262,821−−△710,295△710,295△710,295

448,331448,331−−△710,295

448,331

−
−

−

−

−

−

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

34,621,838

448,355448,355

35,070,193△89,902△89,902

34,980,291

448,331

Eighth Fiscal Period (February 1, 2009 to July 31, 2009)

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

UnappropriatedRetained
Earnings

Total
Unitholders’ Capital

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

34,621,838

448,355448,355

35,070,193△89,902△89,902

34,980,291−−△448,347△448,347△448,347

362,428

362,428−−△448,347

362,428

−
−

−

−

−

−

12,461

12,461

12,461−△85,918△85,918△85,918

12,461

12,461△73,457

34,621,838

362,436

362,436

34,984,275△77,441△77,441

34,906,833

12

362,428

Prospect Reit Investment Corporation(4) Basis for Calculating Cash Distribution
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)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)
Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

448,355,398

362,436,651

448,347,000

362,432,600（5,970）8,398（4,826）
4,051

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 448,347,000 to
75,100units
issuedandoutstanding. Procedures for the
distributionofamounts
exceeding distributable income
are outlined in Article 36.1-4 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 362,432,600 to
75,100units
issuedandoutstanding. Procedures for the
distributionofamounts
exceeding distributable income
are outlined in Article 36.1-4 of
PRI’s Articles of Incorporation.
PRI decided not to distributecash in excess of distributable
income for the fiscal period.

13

Prospect Reit Investment Corporation(5) Statements of Cash Flows(Thousands of yen)
Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)
I Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Interest income
Reserve for possible losses of receivables
Amortization for issuance expense ofinvestment corporation bonds
Interest expense
Decrease (increase) in operating receivables
Decrease in other receivables
Decrease in consumption tax and other receivables(Increase) decrease in prepaid expenses(Decrease) increase in operating payables
Decrease in other payables
Increase in accrued consumption taxes(Decrease) increase in accrued expenses(Decrease) increase in advances received
Decrease in long-term prepaid expenses
Loss on sale of entrusted property andEquipment
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities

451,018
486,763
7,686
3,142

362,488486,3827,686△580△2,493
348,4296,995△41△21, 515
5,966△14,886
14,438△22,091△13,825△10,041
44,289△1,431
339,360
4,938△230
21,106△104,682
19,408△11,862△6,799△13,231
19,836△106,683

244,524△3,264
1,525,094
2,505△345,967△1,0091,180,622−
28,9281,044,637
1,431△341,522△2,373702,173

II Cash flows from investing activities:
Payments for the purchase of property andEquipment
Payments for the purchase of entrusted property
and equipment
Payments for leasehold and security deposits
Proceeds from leasehold and security deposits
received△1,650△1,812△92,499△142,484−

184

54,286

83,315

Payments for leasehold and security deposits received△100,978△108,499△144,704△167,295

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

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

7,500,000

6,500,000△8,000,000△11,000,000−△124,000−

4,500,000
−
−

−

−

△711,279△448,955△1,335,279△448,955△299,361

85,922

3,272,531

2,973,170

2,973,170

3,059,092

Prospect Reit Investment Corporation(6) Notes for preconditions of going concern entities
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)
None

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)
None(7) Notes for Items Related to Important Accounting Policies
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)
1. Depreciation
method for fixed
assets2.
Accounting
standards to post
revenues
andexpenses

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

(2) Intangible fixed assets
Same as seventh fiscal period(3) Long-term prepaid expenses
The straight-line method has been
adopted.
Method to post fixed asset taxes and othertaxes(3) Long-term prepaid expenses
Same as seventh fiscal period
Method to post fixed asset taxes and othertaxes

In terms of fixed asset taxes, city planning Same as seventh fiscal periodtaxes, 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.
Such fixed assets and other taxes included inbook values at the time of acquisition of such
real estate and trust beneficiary rights were
none.

17

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

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

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

Same as seventh fiscal period

5.
Other
important items
for the basis ofcompilingfinancialstatements(1) Accounting method with respect to trust
beneficiary rights to real estate and otherentrusted assets
With respect to trust beneficiary rights to realestate and other entrusted assets, all of theasset and liability items within entrusted
assets as well as all revenue and expense
items generated from entrusted assets areposted in the corresponding items in thebalance sheets and statements of income.
Among entrusted asset items posted in suchcorresponding items, the following important
items are posted independently in thebalance sheets.
1) Entrusted cash and entrusted
deposits
2) Entrusted buildings,
entrusted
structures, entrusted machinery andequipment,
entrusted
tools,
furniture and fixtures, entrusted
land

Prospect Reit Investment Corporation(1) Accounting method with respect to trust
beneficiary rights to real estate and otherentrusted assets
With respect to trust beneficiary rights to realestate 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, furnitureand fixtures, entrusted land, andentrusted construction account(2) Accounting method for consumption tax (2) Accounting method for consumption tax
and others
and others
The accounting method for consumption tax Same as seventh fiscal period
and local consumption tax is the
tax-exclusive
method.
Undeductableconsumption taxes for asset acquisition are
included in book values at the time of each
respective asset acquisition.
Changes due to accounting policies
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

None.
Adoption of Accounting Standards for Lease
Transactions
PRI began the adoption of the ‘Accounting Standards
for Lease Transactions’ (The Accounting Standards
Board of Japan, ASBJ Statement No. 13, revised on
March 30, 2007) and the ‘Guidance on AccountingStandards for Lease Transactions’ (The AccountingStandards Board of Japan, ASBJ Guidance No. 16,
revised on March 30, 2007) from the fiscal period
under review. This adoption has no effect on revenues
or expenses.

19

Prospect Reit Investment Corporation(7) Notes to the Financial Statements[Notes for the Balance Sheets]
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

Note 1. Assets put up for collateral or assets put up for Note 1. Assets put up for collateral or assets put up forcollateral of secured debt are as follows:collateral of secured debt are as follows:(Thousands of yen)(Thousands of yen)
1,825,489
Entrustedcash
andEntrustedcash
and1,768,022
entrusted deposits
entrusted deposits
754,254
Buildings
Buildings
740,916779
Structures
Structures
735
3,420
Machinery
andMachineryand3,024
equipment
equipment
2,718
Tools, furniture andTools, furniture and2,468
fixturesfixtures794,545
Entrusted buildings
Entrusted buildings
794,545
29,195,304
Entrusted buildings
Entrusted buildings
29,440,739
112,382
Entrusted structures
Entrusted structures
120,690
225,593
Entrusted machinery and
Entrusted machinery and
251,161
equipment
equipment
39,812
Entrusted tools, furniture
Entrusted tools, furniture
50,742and fixturesand fixtures
36,074,511
Entrusted land
Entrusted land
36,725,573
69,028,811
Total
Total
69,898,621
Secured debt with collateral are as follows:
Short-term debt
Long-term debt
Total

Secured debt with collateral are as follows:

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

Short-term debt
3,000,000
Long-term
Borrowing
17,346,000
with repayment dates
within one year
Long-term debt
10,058,000
Total
30,404,000
Note 2. Minimum net assets set by Article 67.4 of the Note 2. Minimum net assets set by Article 67.4 of theInvestment Trust and Investment Corporation Law
Investment Trust and Investment Corporation Law
JPY 50,000 thousand

Same as seventh fiscal period

20

Prospect Reit Investment Corporation[Notes to the Statements of Income]Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

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

A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
1,936,298
Common area maintenance
80,195fee revenues
Parking revenues
78,814
Other related revenues
26,253
Other rental revenues
Other rental revenues
115,305
Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
206,073
expenses
Repair expenses
115,089
Water, electricity, and other45,295rates
Taxes
120,201
Insurance premiums against
6,858
lossesTrust fees
44,183
Depreciation expenses
485,275
Other rental expenses
110,721
Total real estate rental
expenses
C. Real estate rental business earnings(A – B)

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

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

2,121,562
115,305
2,236,868

1,133,698
1,133,698
1,103,169

Note 2. Breakdown of real estate rental revenues and Note 2. Breakdown of real estate rental revenues and(Thousands of yen)earnings(Thousands of yen) earnings―

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

225,000
244,524
1,413△20,93721

Prospect Reit Investment Corporation[Notes to the Statement of Changes in Net Assets]
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

Note 1. Total number of investment units authorized for Note 1. Total number of investment units authorizedissuance and outstanding
for issuance and outstanding
Total number of investment units
Same as sixth fiscal periodauthorized for issuance
2,000,000
Total number of investment units
outstanding
75,100[Notes to the Statement of Cash Flows]
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

Note 1. Relationship between cash and cash
equivalents at the end of the period and items posted on
the balance sheets
As of January 31, 2009 (Thousands of yen)
Cash and deposits
1,119,128
Entrusted cash and entrusted deposits
1,854,042
Cash and cash equivalents
2,973,170

Note 1. Relationship between cash and cash
equivalents at the end of the period and items postedon the balance sheets
As of July 31, 2009 (Thousands of yen)
Cash and deposits
1,291,069
Entrusted cash and entrusted deposits
1,768,022
Cash and cash equivalents
3,059,092(Disclosure is omitted for notes regarding lease transactions, derivatives transactions and others because of small
necessity to disclose in this Financial Report <Kessan Tanshin>)[Notes regarding information per investment unit]
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

Net assets per investment unit
JPY 465,782
Net assets per investment unit
JPY 464,804
Net income per investment unit
JPY 5,969
Net income per investment unit
JPY 4,825
Because there are no latent investment units, PRI does Same as seventh 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 seventh and eighth fiscal periods:
Eighth Fiscal Period (February 1, 2009 to July 31, 2009): 75,100 (no changes during the period)
Seventh Fiscal Period (August 1, 2008 to January 31, 2009): 75,100 (no changes during the period)
The calculation formulae for net income per unit are as follows.
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)(JPY thou)
Net income
448,331
Net income not distributed to−unitholders
Net income distributed to unitholders
448,331
Average number of units
75,100 units

22

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)(JPY thou)
362,428−
362,428
75,100 units

Prospect Reit Investment Corporation[Notes regarding subsequent events]
Seventh Fiscal Period(August 1, 2008 to
January 31, 2009)

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)

None.

None.

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

Date

Total investment units
outstanding (unit)
ChangeBalance

Type

Paid-in capital(Millions of yen)
ChangeBalance

Notes

April 22, 2005

Established by private
offering

402

402

201

201

（Note 1）

July 12, 2005

Public offering

74,69875,10034,42034,621（Note 2）

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

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

Type of asset

Use

Trust beneficiary rights
in real estate

Residential
rental units
Residential
rental units

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

Eighth Fiscal Period(February 1, 2009 to
July 31, 2009)
Total held
Proportion to(Millions of yen)
total (%）

66,918

93.2

66,588

92.9

1,555

2.2

1,541

2.2

Deposit and other assets

3,293

4.6

3,552

5.0

Total assets

71,767100.0

71,683

100.0

Real estate

Note: Total held amounts are recorded on the balance sheets (total of book values after deducting depreciation).
(2) Investment properties classified as real estate or entrusted real estate① Overview of investment properties
The following chart lists investment properties owned by PRI as of July 31, 2009. With the exception ofproperties S017, F017, and F022, which are classified as real estate, all other assets are classified as trust
beneficiary rights in real estate.

Code

Property Name

Acquisition Price(Millions of Yen)
(Note 1)

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

S001

TK Flats Shibuya

6,399

9.4

5,210

July 12, 2005

S002

Prospect Shinonomebashi

3,353

4.9

3,270

July 12, 2005

S004

Maison de
Gyoranzaka

1,768

2.6

1,600

July 14, 2005

S005

Prospect Omori-Kaigan

1,807

2.7

1,660

July 14, 2005

Ville

Takanawa

23

S006

Abreast Shin-Osaka

1,826

Prospect Reit Investment Corporation
2.7
1,556
July 12, 2005

S007

Maison de Ville Naka-Meguro

1,189

1.7

1,090

July 14, 2005

S008

Roppongi Rise House

1,184

1.7

951

July 12, 2005

S009

Prospect Nihonbashi-Honcho

1,070

1.6

897

July 12, 2005

S011

Fragrance Kawasaki

624

0.9

601

July 12, 2005

S012

Abreast Sakuragawa

516

0.8

430

July 12, 2005

S013

Dome Takamine

322

0.5

223

July 12, 2005

S014

Dome Yotsuya

275

0.4

194

July 12, 2005

S016

Abreast Nagase

209

0.3

159

July 12, 2005

S017

Living Stage Higashi-Sendai

435

0.6

347

August 31, 2005

S018

Prospect Toyonaka Hattori

396

0.6

388

February 10, 2006

S019

Prospect Bishoen

376

0.6

289

February 15, 2006

S020

Prospect Shimogamo

411

0.6

321

March 15, 2006

S021

Prospect Kawaramachi-Gojo

803

1.2

643

March 15, 2007

S022

Prospect Chuo-Rinkan

700

1.0

537

March 15, 2007

S023

Sky Hills N15

932

1.4

840

May 31, 2007

S024

Sky Hills Sakaimachi

1,115

1.6

876

May 31, 2007

S025

Domy Chitose

592

0.9

500

May 31, 2007

S026

Sky Hills Takadai I

691

1.0

609

May 31, 2007

S027

Exceria Ikebukuro West II

1,020

1.5

880

June 20, 2007

S028

Prospect Monzennakacho

1,250

1.8

1,080

June 20, 2007

S029

Prospect KALON Minowa

1,930

2.8

1,740

September 7, 2007

S030

Prospect Nakanoshima

1,000

1.5

789

October 19, 2007

S031

Prospect Ogikubo

880

1.3

726

November 7, 2007

S032

Prospect Musashi-Shinjo

1,230

1.8

1,080

May 30, 2008

F001

Prospect Kiyosumi-Teien

2,780

4.1

2,660

July 14, 2005

F002

Park Terrace Ebisu

2,712

4.0

2,230

July 14, 2005

F003

BELNOS34

2,534

3.7

1,960

July 12, 2005

F004

Prospect Dogenzaka

2,294

3.4

1,740

July 12, 2005

F005

U House Daikan-Cho

1,548

2.3

1,336

July 12, 2005

F006

U House Gokiso

1,406

2.1

1,165

July 12, 2005

F007

Angel Heim Nishi-Rokugo No.2

1,401

2.1

1,291

July 14, 2005

F008

Prospect Onshi-Koen

1,196

1.8

1,160

July 12, 2005

F009

Deim-Hashimoto

992

1.5

825

July 12, 2005

F010

SK Residence

1,020

1.5

901

July 12, 2005

F012

Prospect Urawa-Tokiwa (Note 4)

878

1.3

788

July 12, 2005

F014

U House Tsurumai II

685

1.0

527

July 12, 2005

24

F017

Living Stage Minami-Sendai

F019

Prospect Glarsa Hiroo

F020

Prospect Reit Investment Corporation
0.4
241
August 31, 2005

275
3,905

5.7

4,020

February 15, 2006

Prospect Katsura-

570

0.8

478

March 03, 2006

F021

Crown Heim Nishi-Tanabe

601

0.9

446

March 03, 2006

F022

Takasagoseki Nibankan

810

1.2

639

March 15, 2006

F023

Prospect Machiya

547

0.8

498

November 07, 2006

F024

Prospect Hatsudai

730

1.1

577

March 15, 2007

F025

Prospect Morishita

1,480

2.2

1,310

March 15, 2007

F026

Prospect Nishi-Sugamo

1,419

2.1

1,220

March 30, 2007

F027

Palais D’Or Maruyama

1,250

1.8

889

October 19, 2007

F028

Prospect Kawasaki

1,717

2.5

1,580

October 19, 2007

F029

Prospect Nihonbashi-Koamicho

946

1.4

875

October 19, 2007

68,000100.058,847

Total

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

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

Location

Site Area

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

Occupancy
Ratio (BySpace)

Occupancy
Ratio (ByNo. ofResidential
Units)

(m2)

(m2)

(m2)

(Note 1)

(Note 2)

(Note 3)

Shibuya-ku,
Tokyo

1,800.47

6,903.54

6,235.30

194

174

28,333

1

90.3

89.7

Koto-ku,Tokyo

1,385.45

4,849.20

4,765.45

171

168

18,135

1

98.3

98.2

Minato-ku,
Tokyo

638.65

1,778.37

1,603.02

70

63

7,744

1

90.1

90.0

Ota-ku,Tokyo856.82

2,478.04

2,402.98

89

86

8,746

1

97.0

96.6

Osaka-shi,
Osaka766.13

2,984.64

2,331.0992

74

14,607

39

78.1

80.4

MaisondeMeguro-ku,
S007 Ville
Tokyo
Naka-Meguro

275.36

1,275.00

1,147.50

50

45

5,419

1

90.0

90.0

Minato-ku,
Tokyo

574.65

1,209.87

989.10

34

31

4,563

1

81.8

91.2

Chuo-ku,Tokyo

174.36

1,290.49

1,199.30

50

46

5,095

1

92.9

92.0

Kawasaki-shi,
Kanagawa

228.05

1,065.96

1,065.96

45

45

3,752

1

100.0

100.0

S001

TK
Flats
Shibuya

Prospect
S002 Shinonomeba
shi
Maison
de
Ville
S004
Takanawa
Gyoranzaka
Prospect
S005 Omori-Kaiga
n
S006

S008

AbreastShin-Osaka

Roppongi
Rise House

Prospect
S009 Nihonbashi-H
oncho
S011

Fragrance
Kawasaki

25(Note 4)(Note 5)(Note 6)(Note 7)(%)(%)(Note 8)(Note 9)Prospect Reit Investment Corporation
S012

AbreastSakuragawa

Osaka-shi,
Osaka

361.991,009.92

967.68

48

46

2,871

1

95.8

95.8

S013

Dome
Takamine

Nagoya-shi,
Aichi

983.60946.04838.22

36

32

1,750

1

88.6

88.9

S014

Dome
Yotsuya

Nagoya-shi,
Aichi

812.09765.90596.59

36

28

1,331

1

77.9

77.8

S016

AbreastNagaseHigashiosakashi, Osaka

318.54532.98532.98

26

26

1,418

26

100.0

100.0

Sendai-shi,
Miyagi904.001,539.41

1,307.91

52

44

2,384

1

85.0

84.6

Toyonaka-shi,
Osaka

352.75986.34986.34

34

34

2,448

1

100.0

100.0

Living Stage
S017 Higashi-Send
ai
Prospect
S018 Toyonaka
Hattori
S019

Prospect
Bishoen

Osaka-shi,
Osaka313.24901.15901.15

26

26

2,023

1

100.0

100.0

S020

Prospect
Shimogamo

Kyoto-shi,
Kyoto

234.53675.51675.51

31

31

1,959

1

100.0

100.0

Shimogyo-ku,
Kyoto

234.98

1,528.12

1,311.83

52

45

3,845

1

85.8

86.5

Prospect
S021 Kawaramachi
-Gojo
S022

Prospect
Chuo-Rinkan

Yamato-shi,
Kanagawa

589.73

1,098.24

1,006.72

48

44

3,181

1

91.7

91.7

S023

Sky
N15

Sapporo-shi,
Hokkaido

1,232.73

3,443.55

3,443.55

111

111

5,106

1

100.0

100.0

Sky
Hills
S024 Sakaimachi(Note 9)Chitose-shi,
Hokkaido

4,189.97

5,194.78

5,194.78

134

134

6,039

1

100.0

100.0

S025

Domy
Chitose

Chitose-shi,
Hokkaido

1,796.60

2,145.70

2,145.70

110

110

4,081

1

100.0

100.0

S026

Sky
Hills
Takadai I

Chitose-shi,
Hokkaido

2,401.78

3,697.20

3,697.20

120

120

5,500

1

100.0

100.0

Exceria
S027 IkebukuroWest II

Toshima-ku,
Tokyo

290.14

1,379.52

1,322.35

48

46

4,984

1

95.9

95.8

Prospect
S028 Monzennakacho

Koto-ku,Tokyo

613.01

1,790.56

1,715.80

62

59

6,232

1

95.8

95.2

Prospect
S029 KALON
MinowaTaito-ku,Tokyo

473.353,032.27

2,875.54

82

77

9,645

1

94.8

93.9

Hills

S030

ProspectNakanoshima

Kita-ku,Osaka

370.61

1,572.48

1,447.68

63

58

5,007

1

92.1

92.1

S031

ProspectOgikubo

Suginami-ku,
Tokyo

731.41

1,106.63

980.13

40

36

3,979

1

88.6

90.0

Prospect
S032 MusashiShinjo

Kawasaki-shi,
Kanagawa

972.481,855.03

1,855.03

85

85

6,827

1

100.0

100.0

Prospect
F001 KiyosumiTeien

Koto-ku,Tokyo

1,586.77

5,556.73

5,556.73

77

77

15,067

1

100.0

100.0

Park Terrace
Ebisu

Shibuya-ku,
Tokyo

790.182,705.09

2,284.76

51

43

10,336

1

84.5

84.3

F003 BELNOS 34

Katsushika-ku, Tokyo

3,092.58

5,321.89

4,599.31

100

91

11,479

1

86.4

91.0

Prospect
Dogenzaka

Shibuya-ku,
Tokyo

274.24

2,058.53

1,986.45

47

45

9,400

1

96.5

95.7

F002

F004

26

Prospect Reit Investment Corporation
F005

U
House
Daikan-Cho

Nagoya-shi,
Aichi

2,060.52

5,944.44

5,316.71

96

87

8,706

1

89.4

90.6

F006

U
House
GokisoNagoya-shi,
Aichi

3,113.87

5,127.19

4,565.57

78

70

7,864

1

89.0

89.7

1,666.28

2,776.64

2,571.23

40

37

5,994

1

92.6

92.5

Angel Heim
Ota-ku,F007 Nishi-Rokugo
Tokyo
No.2
F008

ProspectOnshi-Koen

Koto-ku,Tokyo

772.002,033.77

1,929.59

61

58

6,354

1

94.9

95.1

F009

Deim-Hashim
otoSagamihara-shi, Kanagawa

898.13

3,170.41

2,837.94

92

87

5,897

1

89.5

94.6

F010 SK Residence

Toshima-ku,
Tokyo

474.55

1,624.49

1,531.99

30

28

5,064

1

94.3

93.3

ProspectF012 Urawa-Tokiwa

Saitama-shi,
Saitama

1,557.49

2,263.05

2,263.05

30

30

4,830

1

100.0

100.0

U
House
Tsurumai II

Nagoya-shi,
Aichi

615.51

2,262.63

2,206.44

34

33

3,776

1

97.5

97.1

Living Stage
Sendai-shi,
F017 Minami-Send
Miyagiai

476.23

1,277.10

803.80

27

17

1,282

1

62.9

63.0

F014

F019

Prospect
Glarsa Hiroo

Shibuya-ku,
Tokyo

803.31

3,846.27

3,302.32

112

101

17,187

1

85.9

90.2

F020

Prospect
KatsuraKyoto-shi,
Kyoto

1,354.29

1,769.96

1,648.68

29

27

3,010

1

93.1

93.1

F021

Crown Heim Osaka-shi,
Nishi-Tanabe Osaka

444.201,517.86

1,277.63

22

19

2,601

1

84.2

86.4

F022

Takasagoseki
Nibankan

Sendai-shi,
Miyagi

1,794.83

3,336.52

2,589.78

41

31

4,195

1

77.6

75.6

F023

ProspectMachiya

Arakawa-ku,
Tokyo

251.44

1,169.37

1,055.75

21

19

2,798

1

90.3

90.5

F024

Prospect
HatsudaiShibuya-ku,
Tokyo

586.68817.71

784.36

22

21

3,248

1

95.9

95.5

F025

ProspectMorishita

Koto-ku,Tokyo

736.43

2,399.23

2,115.38

45

39

6,526

1

88.2

86.7

ProspectF026 Nishi-SugamoKoto-ku,Tokyo

368.152,023.42

1,602.99

42

33

5,511

1

79.2

78.6

F027

Palais D’Or
Maruyama

Chuo-ku,
Sapporo2,236.99

4,678.32

3,391.74

64

49

5,575

1

72.5

76.6

F028

ProspectKawasaki

Saiwai-ku,
Kawasaki

1,218.89

3,377.53

3,307.52

52

51

8,890

1

97.9

98.1

Chuo-ku,Tokyo

273.37

1,364.02

1,126.72

37

32

4,322

1

82.6

86.5

52,324.40 127,458.61 116,198.83

3,289

3,049

336,924

116−−

ProspectF029 NihonbashiKoamicho

Total

Note 1. In the ‘Site Area’ column, figures for total site area of real estate or entrusted real estate are based on data in register books orrecords. In some cases, such data might not be completely accurate.
Note 2. In the ‘Total Leasable Floor Space’ column, figures represent leasable floor space for portions of real estate or entrusted realestate acquired by PRI. These figures are based on real estate registers or blueprints. In the cases of Sky Hills N15, Sky Hills
Sakaimachi, Domy Chitose, Sky Hills Takadai I, and Prospect Urawa-Tokiwa, the figures are based on sole ownership portions
from February 1, 2009, changed from floor space figures on registers, taking into account being wholly leased.
Note 3. In the ‘Total Leased Floor Space’ column, figures represent leased floor space with lease contracts concluded with
end-tenants. Such floor space excludes leased site (land) area. Figures are based on lease contracts between end-tenants and master
lessers or trust beneficiaries. Nevertheless, in cases of apparent errors in lease contracts, floor space data are based on information
given by the previous owner of the acquired properties, information shown on plans at completion, etc.
Note 4. In the ‘Total Leasable Residential Units’ column, figures represent leasable units for portions of real estate or entrusted realestate acquired by PRI. In the cases of Sky Hills Sakaimachi, and Domy Chitose, the figures exclude spaces for caretakers from27

Prospect Reit Investment Corporationfrom February 1, 2009, changed from being included, taking into account being wholly leased.
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, 2009.
Note 6. In the ‘Total Monthly Rental Revenues’ column, figures represent total monthly revenues as recorded in lease contracts
concluded between end-tenants and master lessers or trust beneficiaries as of July 31, 2009. Such revenues include common area
maintenance fee revenues but exclude revenues from monthly contracted parking spaces or such supplemental facilities as storageand locker space.
Note 7. In the ‘Total Number of Tenants’ column, ‘1’ represents cases of lease contracts concluded between trust beneficiaries andmaster lessers. In such cases, figures are based on the assumption that all end-tenants have agreed with their master lesser to belessers (sub-lessers). In the cases that one tenant leases more than one unit, the number of tenants is recorded as ‘1.’ These figures
are based on information current as of July 31, 2009.
Note 8. In the ‘Occupancy Ratio (By Space)’ column, percentage figurees represent the proportion of leased floor space to leasable
floor space of each real estate or entrusted real estate property. In addition, percentage numbers are rounded to the nearest firstdecimal place. The ‘Total’ percentage figure represents the proportion of total leased floor space to total leasable floor space as ofJuly 31, 2009.
Note 9. In the ‘Occupancy Ratio (By No. of Residential Units)’ column, percentage figures represent the proportion of leased floor
space to leasable floor space of each asset. In the ‘Occupancy Ratio (By Space)’ column, percentage figures are rounded to thenearest first decimal place. The ‘Total’ percentage figure represents the proportion of total leased floor space to total leasable floor
space as of July 31, 2009.
Note 10. The site area figure was changed on February 5, 2009, following complition of official maps at Sapporo Registration Office.

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

Property NameTK Flats Shibuya

Prospect Shinonomebashi

PurposePlanned period

Replacementofelectric
back-uppower
supplyfacilities switchboard for
antidisaster purposes
Replacementoffire
eextinguishers

Planned work amount (millionsof yen)Note
Paid in
Total
Total
this
paid
periodFrom September 2009
to September 2009

1

1

−

From December 2009
to January 2010

1

1

−

Dome Takamine

New installation of security
camerasFrom September 2009
to October 2009

1

1

−

Dome Yotsuya

New installation of security
camerasFrom September 2009
to October 2009

1

1

−

Sky Hills Takadai I

Large-scale repair work

From July 2009 toNovember 2009

72

72

−

BELNOS34

Maintenance of mechanicalparking systems

From August 2009 toAugust 2009

7

7

−

BELNOS34

New installation of security
camerasFrom October 2009 to
October 2009

2

2

−

BELNOS34

Renovation of retail space on
the second floor

From August 2009 to
January 2010

35

35

−

U House Gokiso

Renovation of two rooms

From August 2009 to
January 2010

10

10

−

Deim-Hashimoto

Renovation of retail space on
the first floor

From July 2009 to
September 2010

3

3

−

Deim-Hashimoto

Replacement of water supply
pump

From October 2009 to
October 2009

1

1

−

Deim-Hashimoto

Renovation of three rooms

From August 2009 to
January 2010

9

9

−

U House Tsurumai II

Large-scale repair work

From June 2009 to
September 2009

37

25

11

28

Prospect Reit Investment Corporation
Renovation of retail space on
the first floor

Palais D’Or Maruyama

From July 2009 to
October 2009

5

5

−

Note. Numbers are rounded down to the nearest first decimal place.
② Capital expenditures in the period under review
Amount paid
(millions of yen)

Property Name

Purpose

PeriodMaison de Ville Takanawa Gyoranzaka

New installation facilities forterrestrial digital broadcasting withcablesFrom July 2009 to July
2009

1

Maison de Ville Takanawa Gyoranzaka

New installation of security cameras

From April 2009 to April
20091

Sky Hills Sakaimachi

New installation of security cameras

From July 2009 to July
2009

3

BELNOS34

Replacement of air conditioners foroffice space on the second floor

From July 2009 to July
2009

1

U House Daikan-Cho

Replacement of water supply pump

From July 2009 to July
2009

2

U House Gokiso

Renovation of office space on thefirst floor

From February 2009 to
February 200917

Deim-Hashimoto

Renovation of three rooms

From January
February 20092009 to7

Prospect Urawa-Tokiwa

Large-scale repair work

From January
March 20092009 toProspect Urawa-Tokiwa

New installation of security cameras

From June 2009 to June
2009

2

Takasagoseki Nibankan

Replacementment of water-supply
metersFrom July 2009 to July
2009

1

OthersReplacementment of air conditioners,
water heaters, and others

82

20

Total

142

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

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

Reserve balance at the end of
previous fiscal period

469

548

Reserved amount in the period

151

69

Withdrawal in the period

72

104

Balance carried forward

548

512

(4)Figures in Engineering Reports
Outline of building engineering reports
In addition to receiving support from research firms, PRI commissions them for the following items for each of its
investment real estate or entrusted real estate properties.
̶Examination of building deterioration, planning of short- and long-term repair expenses, research of compliancein accordance with the Building Standards Law, research of hazardous material contents in buildings, and research29

Prospect Reit Investment Corporationof soil conditions.
Nevertheless, the contents of these reports are the opinions of the respective research firms, and PRI does notguarantee the appropriateness and accuracy of such contents.
Nevertheless, the contents of the reports are the opinions of TBTC, and PRI does not guarantee the appropriatenessand accuracy of such contents.

Code

Property name

S001
S002

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

S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S016
S017
S018
S019
S020
S021
S022
S023
S024
S025
S026
S027
S028
S029
S030
S031
S032
F001
F002
F003
F004
F005
F006
F007
F008
F009
F010
F012
F014
F017
F019
F020
F021
F022
F023
F024

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

TBTC

−

−

47,800463

April 2005

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

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

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

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

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

April 2005
May 2005
April 2005
April 2005
April 2005
April 2005
June 2005
June 2005
June 2005
May 2005
August 2005
February 2006
February 2006
March 2006
January 2007
February 2007
March 2007
March 2007
March 2007
March 2007
May 2007
May 2007
July 2007
August 2007
August 2007
May 2008
March 2003
April 2005
April 2005
February 2005
January 2009
July 2007

Takenaka−

130

108,540

580

March 2003

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

−
−
−
−
−
−
−
−
−
−
−
−

−
150
−
−
820
150
270
−
160
150
−
−

4,980
38,28036,93014,980125,540
36,75016,68041,6207,070
80,220
2,680
2,190

574
646
447
657
491
300
1,185
351
405
761
290
179

February 2005
April 2005
April 2005
June 2009
April 2005
August 2005
December 2005
March 2006
March 2006
February 2006
October 2006
Janurary 200730

Prospect Reit Investment Corporation
F025
F026
F027
F028
F029

Prospect Morishita
Prospect Nishi-Sugamo
Palais D’Or Maruyama
Prospect Kawasaki
ProspectNihonbashi-Koamicho

TBTC
TBTC
TBTC
TBTC
TBTC

Total
portfolio

−
−
−
−
−

−
−
300
−
−

4,930
3,890
96,650
5,810

616
504
975
862

February 2007
February 2007
August 2007
September 2007

4,150

399

August 2007

2,050

6,000

2,495,710

32,240Note 1. In the ‘Research firm’ column, TBTC stands for Tokyo Bldg-Tech Center Co., Ltd., and Takenaka stands for
Takenaka Corporation.
Note 2. The month and year of building engineering reports and the month and year of earthquake risk reports refer tothe first reports issued.
(5) Outline of earthquake risk reports
PRI commissions Tokyo Bldg-Tech Center Co., Ltd. (TBTC) for earthquake risk reports and other reports for each
investment real estate and entrusted real estate property.
Nevertheless, the contents of the reports are the opinions of TBTC, and PRI does not guarantee the appropriatenessand accuracy of such contents.
Code

Property Name

S001
S002
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S016
S017
S018
S019
S020
S021
S022
S023
S024
S025
S026
S027
S028
S029
S030
S031
S032
F001
F002
F003
F004
F005
F006

TK Flats Shibuya
Prospect Shinonomebashi

F007

Angel Heim Nishi-Rokugo No.2

Probable Maximum Loss (%)(Note 1)

19.0
12.0
10.0
12.0
7.0
15.0
12.0
13.0
15.0
6.0
5.0
12.0
7.0
9.0
14.0
5.0
12.0
14.0
2.0
4.0
3.0
4.0
10.0
19.0
14.0
12.0
11.0
12.0
19.0
15.0
11.0
12.0
9.0
11.0
10.0
11.0

Maison de Ville Takanawa Gyoranzaka

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

Roppongi Rise House
Prospect Nihonbashi-Honcho

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

Prospect Toyonaka Hattori
Prospect Bishoen
Prospect Shimogamo
Prospect Kawaramachi-Gojo

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

31Month and year ofearthquake risk reports

July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009
July 2009

Prospect Reit Investment Corporation
July 2009
25.0
F008
Prospect Onshi-Koen (Note 2)
July 2009
13.0
F009
Deim-Hashimoto
July 2009
11.0
F010
SK Residence
July 2009
5.0
F012
Prospect Urawa-Tokiwa
July 2009
17.0
F014
U House Tsurumai II
July 2009
7.0
F017
Living Stage Minami-Sendai
July 2009
7.0
F019
Prospect Glarsa Hiroo
July 2009
7.0
F020
Prospect Katsura
July 2009
11.0
F021
Crown Heim Nishi-Tanabe
July 2009
11.0
F022
Takasagoseki Nibankan
July 2009
14.0
F023
Prospect Machiya
July 2009
8.0
F024
Prospect Hatsudai
July 2009
11.0
F025
Prospect Morishita
July 2009
10.0
F026
Prospect Nishi-Sugamo
July 2009
2.0
F027
Palais D’Or Maruyama
July 2009
10.0
F028
Prospect Kawasaki
July 2009
12.0
F029
Prospect Nihonbashi-Koamicho
7.6
Total portfolio
Note 1. Probable Maximum Loss (PML) is a ratio that represents the probability of a maximum loss, and is calculated
for each asset and the overall portfolio. In this document, PML is defined as a ratio of a building’s estimatedrestoration cost to its rebuilding price resulting from a maximum-magnitude earthquake projected to occur within a
50-year period every 475 years, therefore having a 10% probability every 50 years.
Note 2. PRI has purchased earthquake insurance for this property.
(6) Outline of tenants and others① Outline of leasing conditions for each real estate or entrusted real estate property

Code

Property Name

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

TK Flats Shibuya
Prospect Shinonomebashi

S015
S016
S017
S018
S019
S020
S021
S022
S023
S024
S025
S026

Maison de Ville Takanawa Gyoranzaka

Prospect Omori-Kaigan
Abreast Shin-Osaka
Maison de Ville Naka-Meguro
Roppongi Rise House
Prospect Nihonbashi-Honcho
Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
TK Flats Denenchofu Annex
Abreast Nagase
Living Stage Higashi-Sendai
Prospect Toyonaka Hattori
Prospect Bishoen
Prospect Shimogamo
Prospect Kawaramachi-Gojo
Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi
Domy Chitose
Sky Hills Takadai I

Total Leasable
Floor Space(㎡)

Total Leased
Floor Space(㎡)

Number oftenants

6,903.54
4,849.20
1,778.37
2,478.04
2,984.64
1,275.00
1,209.87
1,290.49
1,065.96
1,009.92
946.04765.90532.981,539.41
986.34901.15675.51
1,528.12
1,098.24
3,443.55
5,194.78
2,145.70
3,697.20
1,379.52

6,235.30
4,765.45
1,603.02
2,402.98
2,331.09
1,147.50
989.101,199.30
1,065.96
967.68838.22596.59532.981,307.91
986.34901.15675.51
1,311.83
1,006.72
3,443.55
5,194.78
2,145.70
3,697.20
1,322.35

1
1
1
1
39
1
1
1
1
1
1
1
26
1
1
1
1
1
1
1
1
1
1
1

32

Total
Monthly
RentalRevenues(Thousandsof Yen)
185
112
50
59
93
35
30
33
22
18
10
9
8
17
15
12
12
26
22
32
37
25
35
32

Percentage
share to total
revenues
(%)
8.3
5.0
2.3
2.7
4.2
1.6
1.4
1.5
1.0
0.8
0.5
0.4
0.4
0.8
0.7
0.6
0.6
1.2
1.0
1.4
1.7
1.1
1.6
1.5

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

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

Prospect Reit Investment Corporation
1,715.801432,875.54164
1,447.681
31
980.131
24
1,855.031426,235.30
1
185
5,556.73
197
2,284.76
1
73
4,599.31
180
1,986.45
1
52
5,316.71
1
58
4,565.571
53
2,571.23158
1,929.591
442,837.941
37
1,531.99134
2,263.05
125
2,206.441
25803.801
113,302.32
1113
1,648.681
22
1,277.631
172,589.78134
1,055.75
1
18784.361
20
2,115.38
145
1,602.991
33
3,391.74
139
3,307.52
1
59
1,126.72
129

1,790.56
3,032.27
1,572.48
1,106.63
1,855.03
6,903.54
5,556.73
2,705.09
5,321.89
2,058.53
5,944.44
5,127.19
2,776.64
2,033.77
3,170.41
1,624.49
2,263.05
2,262.63
1,277.10
3,846.27
1,769.96
1,517.86
3,336.52
1,169.37
817.71
2,399.23
2,023.42
4,678.32
3,377.53
1,364.02
127,458.61

116,198.83

116

2,236

1.9
2.9
1.4
1.1
1.9
8.3
4.3
3.3
3.6
2.3
2.6
2.4
2.6
2.0
1.7
1.6
1.2
1.1
0.5
5.1
1.0
0.8
1.5
0.8
0.9
2.0
1.5
1.8
2.7
1.3

100.0

② Occupancy rates
Code

Property Name

S001
S002
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S015
S016
S017
S018
S019
S020
S021
S022

TK Flats Shibuya
Prospect Shinonomebashi
Maison de Ville Takanawa Gyoranzaka

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

January February
2009
2009
88.1
91.4
97.7
96.0
92.8
94.4
98.7
99.0
79.1
79.1
98.0
94.0
83.1
87.9
96.7
98.4
93.4
93.4
95.8
100.0
74.9
80.4
94.6
91.9
92.3
96.2
84.9
83.3
100.0
100.0
93.3
93.3
90.8
87.7
87.2
85.5
95.8
95.8
88.1
91.4

33

March
2009
92.3
97.8
94.4
99.0
79.1
92.0
90.3
97.9
100.0
100.0
83.1
83.6
88.3
92.6
100.0
93.2
100.0
83.5
97.9
92.3

April
2009
91.1
96.0
91.5
96.7
79.1
94.0
90.3
96.3
100.0
100.0
88.6
75.0
100.0
92.6
100.0
93.2
100.0
78.2
95.8
91.1

(End of each month)
May
June
July
2009
2009
2009
91.1
89.5
90.3
98.3
98.3
98.3
87.3
85.9
90.1
97.0
97.0
97.0
81.2
81.2
78.1
90.0
86.0
90.0
85.5
85.5
81.8
92.9
92.9
92.9
100.0
100.0
100.0
97.9
95.8
95.8
88.6
88.6
88.6
75.0
75.0
77.9
100.0
100.0
100.0
86.8
86.8
85.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
83.9
83.9
85.8
97.9
91.7
91.7
91.1
89.5
90.3

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

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

100.0
100.0
100.0
100.0
95.6
95.8
91.5
98.4
93.2
100.0
98.6
93.5
80.3
76.5
90.8
87.5
100.0
98.1
86.2
92.0
0.0
91.2
92.6
87.0
96.5
88.4
93.4
95.3
100.0
93.9
100.0
73.3
100.0
89.9

100.0
100.0
100.0
100.0
98.2
98.6
95.1
98.4
89.7
100.0
97.9
93.5
80.3
82.2
91.8
88.1
100.0
98.2
89.6
97.4
0.0
91.2
92.6
83.5
96.5
88.4
93.4
100.0
100.0
99.1
100.0
73.1
97.9
86.3

Prospect Reit Investment Corporation
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
95.6
94.9
93.1
88.9
95.9
97.2
95.1
95.5
95.8
95.8
98.3
99.0
96.5
95.5
94.8
100.0
93.7
90.5
90.5
92.1
85.9
83.3
83.3
88.6
88.6
100.0
100.0
100.0
100.0
100.0
97.5
93.3
95.9
97.5
100.0
97.9
97.9
93.5
85.9
84.5
91.3
87.8
86.8
87.2
86.4
74.5
84.9
88.7
96.5
96.5
92.9
93.0
88.8
89.4
89.4
94.9
93.0
87.3
88.4
89.0
100.0
97.3
100.0
97.3
92.6
96.1
91.2
92.4
92.5
94.9
89.5
88.9
88.2
90.2
89.5
94.5
94.5
91.6
91.6
94.3
83.3
100.0
100.0
100.0
100.0
96.8
96.8
94.4
97.5
97.5
92.6
85.2
66.6
66.6
62.9
89.7
92.3
91.1
87.3
85.9
93.1
89.7
89.7
93.1
93.1
88.4
88.4
84.2
84.2
84.2
90.9
84.2
84.2
77.6
77.6
100.0
90.3
90.3
90.3
90.3
100.0
100.0
95.9
90.3
95.9
99.1
91.7
91.4
88.6
88.2
74.7
72.2
69.4
74.6
79.2
76.3
72.5
72.5
74.4
72.5
100.0
98.3
100.0
97.9
97.9
87.0
84.9
89.1
80.4
82.6

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

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

S001

S002

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

TK Flats
Shibuya
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses(Thousands of yen)
S006
AbreastShin-Osaka

185,218

112,850

50,361

59,784

93,689178,856

108,52147,54654,991

90,089

6,361

4,328

2,814

4,792

3,600

94,20947,822

18,401

23,24466,60034

Prospect Reit Investment Corporation
Taxes

10,961

4,715

1,938

2,680

3,719

Other expenses

14,324

5,920

3,780

4,264

2,734

22,359

9,940

4,024

4,119

33,338

6,668

1,225

461

668

5,175

7,101

2,635

1,570

2,148

1,670

32,79323,385

6,626

9,362

19,96291,00865,027

31,95936,53927,088123,80288,41338,58545,902

47,051

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

S007

S008

S009

Prospect
Maison de Ville Roppongi Rise
Nihonbashi-Ho
Naka-Meguro
House
ncho
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes

AbreastSakuragawa

33,04522,756

18,36033,11729,252

31,55922,035

17,794

2,362

1,328

1,485

721

566

15,00914,086

13,282

10,033

10,122

1,419

2,017

1,610

1,163

928

2,298

2,072

2,143

1,608

1,339

2,801

3,301

1,839

1,269

1,235

531

383

446

280

764

2,647

934

768

271

354

5,312

5,377

6,475

5,441

5,501

20,47016,494

19,763

12,723

8,238

25,782

21,871

26,23818,164

13,739Depreciation expenses

S013

S014

S016

Dome Takamine Dome Yotsuya

Real estate rental
expenses
Taxes

Fragrance
Kawasaki

30,580Property management
expenses
Water, electricity, andother rates
Repair expenses

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

S012

35,480

Other expenses

Real estate rental
business earnings
NOI (Net Operating
Income)

S011

S017

Abreast Nagase

S018

ProspectLivingStage
Toyonaka
Higashi-Sendai
Hattori

10,714

9,052

8,578

17,334

15,058

10,528

8,727

8,578

15,951

15,058

186

324

−

1,382

−

6,942

5,992

4,944

12,526

7,715

700

572

478

1,180

1,062

35

Prospect Reit Investment Corporation
Other expenses

1,451

1,196

308

1,556

1,338

993

523

935

1,978

300

Property management
expenses
Water, electricity, andother rates
Repair expenses

433

391

408

892

368

1,174

1,933

232

1,775

3

Depreciation expenses

2,188

1,374

2,580

5,143

4,640

3,772

3,060

3,634

4,807

7,343

5,961

4,434

6,215

9,951

11,983

Real estate rental
business earnings
NOI (Net Operating
Income)

S019

S020

Prospect
BishoenTotal real estate rental
revenues
Real estate rental
revenues
Other rental revenues

Prospect
Shimogamo

ProspectKawaramachiGojo

Prospect
Chuo-Rinkan

Sky Hills N15

26,89522,86532,076

11,804

11,73523,77921,75432,076

600

1,048

3,116

1,111

−

6,646

6,551

15,476

12,786

13,042

829

635

1,682

1,328

3,866

1,407

1,339

2,451

2,013

1,146

778

750

2,577

1,216

500

130

321

1,069

399

40

187

77

907

411

592

3,312

3,427

6,788

7,416

6,895

5,758

6,231

11,418

10,07919,033

9,070

9,659

18,207

17,49625,929Property management
expenses
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)

S024

S025

S026

S027

S028

Exceria
ProspectSky
Hills
Ikebukuro West
Monzennakacho
Takadai I
II

Sky
Hills
Domy Chitose
Sakaimachi

Other expenses

S023

12,783

Other expenses

Real estate rental
expenses
Taxes

S022

12,404

Real estate rental
expenses
Taxes

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

S021

37,85425,65335,26332,855

43,11637,85425,65335,26329,74937,774

−

−

−

3,105

5,342

15,288

8,745

15,42914,985

16,920

4,621

2,363

3,047

759

1,165

1,183

1,090

3,782

2,697

2,716

36

Prospect Reit Investment Corporation
Property management
expenses
Water, electricity, andother rates
Repair expenses

500

500

500

3,727

4,570

42

−

1,020

494

363

433

173

2,470

1,479

1,167

8,507

4,617

4,608

5,827

6,937

22,565

16,907

19,834

17,87026,196

31,072

21,52524,443

23,69733,133

Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)

S029

S030

Prospect
KALON
MinowaTotal real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes

ProspectNakanoshima

ProspectMusashi-Shinjo
24,66942,46560,371

31,401

23,411

42,465

3,859

103

1,258

−

31,586

20,478

11,813

17,464

893

2,064

686

2,887

5,226

3,402

2,212

3,218

6,301

2,734

2,156

880

853

418

367

588

724

969

189

−

17,587

10,887

6,200

9,889

32,644

11,025

12,85525,001

50,231

21,91319,05634,890F001

F002

ProspectPark
Kiyosumi-Teien Ebisu
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues

ProspectOgikubo

31,504

Property management
expenses
Water, electricity, andother rates
Repair expenses

Real estate rental
business earnings
NOI (Net Operating
Income)S032

64,231Other expenses

Depreciation expenses

S031

Terrace

F003

F004

BELNOS34

Prospect
Dogenzaka

F005
U
House
Daikan-Cho97,02373,49380,35852,27458,78090,57470,38577,87849,82456,987

6,448

3,107

2,479

2,449

1,793

40,66029,51037,776

31,39731,229

6,239

3,331

6,946

2,380

3,492

Other expenses

5,539

4,161

6,147

2,736

3,257

Property management
expenses

6,037

5,547

3,884

13,0103,067

Real estate rental
expenses
Taxes

37

Prospect Reit Investment Corporation
Water, electricity, andother rates
Repair expenses
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)

1,160

699

2,573

568

841

3,820

1,935

3,042

3,459

8,863

17,862

13,835

15,1809,242

11,70756,362

43,982

42,581

20,87727,551

74,22457,81757,762

30,11939,258

F006

F007

F008

F009

Angel
Heim
Prospect
U House Gokiso Nishi-Rokugo
Onshi-Koen
No.2
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expensesTaxes

58,09044,78537,821

34,73452,454

51,20638,51835,80832,593

1,174

6,884

6,267

2,012

2,141

33,72026,863

22,17021,892

16,422

4,339

3,107

1,726

2,158

1,963

3,951

5,193

3,228

2,510

3,608

3,444

2,693

3,935

3,459

2,389

2,250

391

489

437

652

9,347

5,364

1,659

5,422

2,499

10,387

10,113

11,131

7,903

5,308

19,90831,226

22,615

15,92918,31230,296

41,34033,746

23,83323,621

Property management
expenses
Water, electricity, andother rates
Repair expenses

Real estate rental
business earnings
NOI (Net Operating
Income)F012
GardenUrawa
Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues
Real estate rental
expenses
Taxes
Other expenses
Property management
expenses
Water, electricity, andother rates

Deim-Hashimoto SK Residence

53,629Other expenses

Depreciation expenses

F010

F014
City

F017

F019

F020

U
House Living
Stage Prospect Glarsa Prospect
Tsurumai II
Minami-Sendai Hiroo
Katsura25,95225,586

11,099113,253

22,991

21,39824,864

10,354

107,276

21,391

4,554

722

745

5,977

1,599

32,311

12,362

8,489

55,625

14,119

1,967

2,037

1,076

4,388

1,389

2,521

2,453

1,309

5,195

2,559

9,991

1,372

586

10,119

1,146

569

265

645

1,080

1,073

38

Prospect Reit Investment Corporation
Repair expenses

8,776

857

1,525

4,880

2,800

Depreciation expenses

8,485

5,376

3,346

29,961

5,150

6,358

13,223

2,610

57,627

8,871

2,126

18,5995,957

87,58914,022

Real estate rental
business earnings
NOI (Net Operating
Income)Total real estate rental
revenues
Real estate rental
revenues
Other rental revenues

F021

F022

Crown Heim
Nishi-Tanabe

Takasagoseki
Nibankan

Property management
expenses
Water, electricity, andother rates
Repair expenses

ProspectMorishita
20,47745,837

16,801

32,984

17,68019,97542,606

932

1,167

1,159

501

3,230

7,309

21,022

11,436

8,866

19,785

886

3,045

148

402

350

1,600

2,845

2,276

2,296

2,482

522

1,111

1,258

1,318

2,810

347

1,373

409

206

615

461

3,169

367

374

1,465

3,491

9,475

6,976

4,268

12,061

10,424

13,1297,404

11,61026,051

13,916

22,605

14,38015,87938,112

Depreciation expenses

Other expenses

Prospect
Hatsudai
18,840Property management
expenses
Water, electricity, andother rates
Repair expenses

Real estate rental
expenses
Taxes

ProspectMachiyaF025

34,152Other expenses

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

F024

17,733

Real estate rental
expenses
Taxes

Real estate rental
business earnings
NOI (Net Operating
Income)

F023

F026

F027

F028

ProspectNishi-Sugamo

Palais D'Or
Maruyama

F029
ProspectNihonbashi-Koa
micho

ProspectKawasaki

33,61539,45659,52929,846

31,56938,16056,132

26,429

2,045

1,295

3,396

3,417

19,46729,75826,33915,902

167

3,608

2,550

513

2,850

5,840

3,609

2,254

3,435

2,005

3,311

2,957

500

1,827

749

354

2,817

5,462

727

984

39

Prospect Reit Investment Corporation
Depreciation expenses
Real estate rental
business earnings
NOI (Net Operating
Income)9,695

11,014

15,3908,837

14,147

9,698

33,18913,944

23,842

20,712

48,58022,781(8) Information related to major real estate and major entrusted real estate
None of the real estate or entrusted real estate properties owned by PRI independently accounted for at least 10%of total real estate rental revenues in the eighth fiscal period.
(9) Portfolio diversification
Portfolio diversification by region, years after construction, and type of units is as follows:① By region

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

Number ofproperty

Percentage share
Percentage share
Total leasable
Acquisition priceof acquisitionof floor space tofloor space(millions of yen
price to total
totalrounded down)
(㎡)
(%)
(%)
(Note 2)
(Note 4)(Note 3)(Note 3)24

44,81565.9

60,790.65

47.7

6

6,141

9.0

12,830.22

10.1

25.1
53,837.74
42.2
23
17,044
Total
54
68,000100.0127,458.61
100.0
Note 1. The "other regions" category refers to government-designated cities and prefectural capitals, excluding regions within theTokyo Metropolitan area, as well as other cities of equivalent size and commuter belts for all of the aforementioned regions.
Note 2. Transaction prices exclude consumption tax recorded on sales contracts.
Note 3. Percentage numbers are rounded to the nearest first decimal place.
Note 4. Leasable space owned by PRI excluding certain sites (ground-level parking spaces).

② Years after construction

Years after construction

Percentage share
Percentage share
Total leasable
Acquisition priceof acquisitionof floor space tofloor space
Number of (millions of yen
price
to
total
total
propertyrounded down)
(㎡)
(%)
(%)
(Note 1)
(Note 3)(Note 2)
(Note 2)More than one year and up to five years

21

25,301

37.2

36,306.19

28.5

More than five years and up to ten years

11

22,02332.4

35,934.54

28.2

More than ten years

21

20,67630.4

55,217.88

43.3

Total

53

68,000100.0127,458.61

100.0

Note 1. Transaction prices exclude consumption tax recorded on sales contracts.
Note 2. Percentage numbers are rounded to the nearest first decimal place.
Note 3. Leasable space owned by PRI excluding certain sites (ground-level parking spaces).
(10) Outline of major tenants and outline of overall tenants① List of major tenants
The following chart shows the names of major tenants with leased floor space and total monthly rents forproperty owned by PRI at the end of the eighth 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.

40

Prospect Reit Investment Corporation
Percentage share to
Total Leased Floor
Space
(％)
(Note 2)

Total Monthly
RentalRevenues(Thousands of
Yen)

Percentage share tototal revenues(%)(Note 4)

Tenant Name

Industry

Total Leased
Floor Space(㎡)

Haseko Livenet Co., Ltd

Real estate

40,108.63

34.5

119,024

35.3

Tokyu Community Co., Ltd

Real estate

29,091.10

25.0

51,091

15.2

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

Real estate

15,566.22

13.4

53,306

15.8

Total of Major Tenants

100,151.17

84,765.95

72.9

223,421

Total Portfolio

124,243.34

116,198.83

100.0

336,924Note 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. Percentage numbers are rounded to the nearest first decimal place.

41

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

Property Provider
Prospect Co., Ltd.

Memorandum
Concerning
Preferential
Information
Provision

Prospect Reit Investment
Corporation

Memorandum
Concerning
Information
Provision

Asset Custodian
Sumitomo Trust andBanking Co., Ltd.

Adminstrative
Duty Contract

Administrative Agent
Sumitomo Trust andBanking Co., Ltd.

Unitholders’RegisterAdministration
Contract

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

General Meeting ofUnitholders
Board of Officers
Executive officer:

Property Information
ProviderMitsui Real Estate Sales
Co., Ltd.

Asset Custody
Contract

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

Asset Management
Contract
Memorandum Concerning
Information Provision

Asset Management Company
Prospect Reit Advisors Co.,Ltd.

Accouting Auditor
Grant Thornton Taiyo
ASG

Memorandum
Concerning Preferential
Information Provision

Note: At the general meeting of unitholders held on April 10, 2009, the resolution was adopted in that Grant Thornton Taiyo ASG
was appointed as new accounting auditor to replace Ernst & Young ShinNihon LLC which resigned as its term of service ended.

42

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

Investment Corporation

Names

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

Prospect Reit Investment
Corporation

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

Prospect Reit Advisors Co., Ltd.

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

Asset Custodian
Administrative Agent

Unitholders’ Register
Administrator

Sumitomo Trust and Banking
Co., Ltd.

Mizuho Trust and Banking Co.,
Ltd.

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

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

43

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

Operational roles

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

memorandum, KKP agrees to supply certain information about

Prospect Co., Ltd. (KKP)

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

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

Property Information
ProviderMitsui Real Estate Sales Co.,Ltd.

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

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

44