Japan Prime Realty Investment Corporation

Presentation Material for the 18th
Fiscal Period Ended December 2010

18th
Japan Prime Realty Investment Corporation(Securities Code: 8955 TSE)
URL: http://www.jpr-reit.co.jp/

Contents
Highlights of Financial Results for the 18th Fiscal Period
4.

Highlights of Financial Results for the 18th Fiscal Period

Financial Summary for the 18th Fiscal Period (Ended December 2010) andFuture Prospects
6.

Statement of Income and Retained Earnings for the 18th Fiscal Period

7.

Comparison of Actual Results and Forecasts for the 18th Fiscal Period (Ended December
2010)

8.

Forecast for the 19th Fiscal Period

9.

[Reference] Forecasts of Rent Revenue – Real Estate and Expenses Related to Rent
Business for the 20th Fiscal Period

10.

Balance Sheet as of the End of the 18th Fiscal Period

Management Results of the 18th Fiscal Period (Ended December 2010)

Appendix
28. Performance over the Past Five Fiscal Periods
29. Historical Unitholder Composition (Number of Units by Investor
Type)
30. Principle Unitholders
31. Milestones Since IPO and Historical Unit Price
32. Changes in Variation Between Appraisal Value and Book Value at
End of Period
33. Appraisals and Cap Rates at End of Period
34. NOI Yield by Property of the End of the 18th Fiscal Period (Tokyo
CBDs)
35. NOI Yield by Property of the End of the 18th Fiscal Period(Greater Tokyo)

12.

History of Portfolio Expansion

13.

Improvement in Portfolio Quality (Properties Acquired in the 18th Period)

14.

Management Results (1) (Changes in Rent Revenue and Unit Rent)

15.

Management Results (2) (Changes in Occupancy Rates and Contract Changes)

37. Contracting Status of Tenants by Property of the End of the 18th
Fiscal Period

16.

Continued Implementation of JPR Brand Strategy (Countermeasures for Long-Period
Earthquake Ground Motion)

38. Office Vacancy Rates and Average Advertised Rents in Major
Investment Areas

17.

Financial Strategy

39. Overview of the Asset Manager

18.

Breakdown of Interest-Bearing Liabilities

19.

History of JPR’s Unit price and Trade Volume (Jul. 1, 2010 – Feb. 10, 2011)

36. NOI Yield by Property of the End of the 18th Fiscal Period (Other
Cities)Future Management Strategy
21.

Future Management Policies

22.

Office Transaction Market Conditions

23.

Office Rental Market Conditions

24.

External Growth Strategy (Environmental Recognition and Investment Strategy)

25.

Internal Growth Strategy (1)26.

Internal Growth Strategy (2) (Endeavors on Leasing)(Note) The figure to the left of each item represents the relevant page number.

2

Highlights of Financial Results for the 18th Fiscal Period

18th

Highlights of Financial Results for the 18th Fiscal Period• Achieved operating income of 5,886 million yen (up 1.7% over the beginning-of-period forecast) and period-end occupancy rate of 93.5% (up 0.9
percent points over the beginning-of-period forecast)• Acquisitions of excellent properties and partial repayment of borrowings before maturity helped to establish an earnings foundation that should
enable a turn to recovery

Distribution
Secured cash distribution for the 18th period at almost the same level as
beginning-of-period forecast, though lower than the 17th period’s result

Highlights of Financial Results for the 18th Fiscal Period(JPY mn unlessotherwise stated)

18th Period (a)17th Period (b)Jul. 1, 1010 -Jan. 1, 2010 -Dec. 31, 2010

Jun. 30, 2010

Change from 17th period（a）－（b）

Operating Revenue

11,87012,314

－444

-3.6%

Operating Income

5,886

6,484

－597

-9.2%

Net Income

4,039

4,963

－924

-18.6%

Total Assets

360,904

358,339

2,564

0.7%

NAV

175,502

176,303

－801

-0.5%

NAV per Unit (JPY)245,458

246,578-1,120-0.5%

NAV Ratio

48.6%

49.2%

-0.6% points

DPU (JPY)

5,680

6,770

-1,090-16.1%

Number of Units
Outstanding (Units)

715,000

715,000

ー－Comparison with Forecast(Reference)
Rivised Forecasts
as of Dec. 24, 2010

Forecasts for the 18th
Fiscal Period (C) (4)Operating Revenue

11,758111

0.9%

11,842

Operating Income

5,788

98

1.7%

5,860

Net Income

4,111

－72

-1.8%

4,011

DPU (JPY)

5,750

-70

-1.2%

5,680

Number of Units
Outstanding (Units)

715,000－－

715,000（a）－（c）

Highlights of Properties

Properties Owned at End
of Fiscal Period
Total Acquisition Price(at period end)

Period-on-period decreases in revenues and profits were due to decreased rent
revenue from existing properties, the lack of gain on sales of real estate properties
recorded in 17th period and an increase in non-operating expenses in 18th period

Operating revenues and operating income surpassed beginning-of-period
forecasts

DPU for 18th period: 5,680 yen (down 1,090 yen from 17th period and down 70
yen from beginning-of-period forecast)

External growth
Acquired excellent properties by utilizing sponsors’ pipelines and other measures

Change from 18th Fsical Period(JPY mn unlessotherwise stated)(JPY mn unlessotherwise stated)

18th Period

17th Period

Jul. 1, 1010 -Jan. 1, 2010 -Dec. 31, 2010

Jun. 30, 2010

(1)

56

55

341,584

331,284(number/price of properties
acquired for current period) (1)

2/10,300

3/25,400(number/price of properties
sold for current period) (1)－

2/4,735

Average Monthly
Occupancy Rate during
Period

93.6%

96.1%

(2)

Recorded total acquisition price(excluding acquisition costs andother expenses). The number ofproperties sold in the 17th period
and the prices include the sales ofland of JPR Jingumae 432 for
expropriation as land for a road
Change (%) has been rounded to
the first decimal place.

Properties acquired in 18th period: 2 properties totaling 10.3 billion yen
BYGS Shinjuku Building (3.3 billion yen) and Tokyo Tatemono Yokohama Building(7.0 billion yen)
Utilized the sponsors’ pipelines and additional acquisition of ownership throughexecuting preemptive rights
JPR made relatively early decision to shift to a policy of property acquisitions; as aresult, it acquired 5 properties totaling 35.7 billion yen in the past year

Internal growth
Reinforced leasing system enabled occupancy rate to surpass beginning-ofperiod forecast

Occupancy rate at end of 18th period: 93.5％
Occupancy rate decreased compared with end of 17thh period due to contract
termination by large tenants, but surpassed beginning-of-period forecast by 0.8
percent points



Reinforced leasing system at the asset manager and enhanced cooperation withproperty management companies



Newly leased spaces increased significantly in 18th period (newly leased spaces
up 450% over 17th period)
Major properties achieving new leases include Kanematsu Building (2,737㎡) and
JPR Sendagaya Building (1,271㎡)

Financial Strategy
Reduced fund procurement costs based on stable financial foundations


Ratio of interest-bearing liabilities to total assets at end of 18th period: 45.4％Ratioof long-term, fixed-rate borrowings at end of 18th period: 73.8％

Issuer ratings: R&I AA-, Moody’s A2, S&P A

Reduced debt costs by partially repaying borrowings, which pose relatively highinterest rates, before maturity

4

Financial Summary for the 18th Fiscal Period(Ended December 2010) and Future Prospects

18thStatement of Income and Retained Earnings for the 18th Fiscal Period
Revenues and income decreased from the 17th fiscal period (ended June 2011) because of lack of gains on saleof real estate that we had in previous period, although newly acquired properties contributed to earnings(JPY mn)Item

18th Fiscal Period
Jul 1, 2010 - Dec. 31, 2010
Amount－100.0%
8.2%

%
89.4%
6.8%
96.3%
3.7%
100.0%
8.1%

Amount
-282
297
14
-459
-444
-20

%
-2.6%
35.4%
0.1%
100.0%
-3.6%
-2.0%

2,456
512
754
30

20.7%
4.3%
6.4%
0.3%

2,252
497
630
30

18.3%
4.0%
5.1%
0.2%

204
14
123
0

9.1%
3.0%
19.6%
1.8%

247
213
553
145

2.1%
1.8%
4.7%
1.2%

214
219
569
91

1.7%
1.8%
4.6%
0.7%

33
-6
-15
53

15.7%
-2.8%
-2.7%
58.6%

1,929
5,361

16.3%
45.2%

1,896
5,144

15.4%
41.8%

32
216

1.7%
4.2%

Asset management fees
Adm. service/custody fees

421
71

3.6%
0.6%

447
68

3.6%
0.6%

-25
2

-5.7%
4.2%

Directors' compensation
Trust fees
Other operating expenses
Operating expenses
Operating income

6
49
73

0.1%
0.4%
0.6%

6
48
115

0.1%
0.4%
0.9%

0
1
-42

0.0%
2.2%
-36.5%

5,983
5,886

50.4%
49.6%

5,830
6,484

47.3%
52.7%

152
-597

2.6%
-9.2%

Profits ((1) - (2))
Net operating income (NOI)

6,508
8,438

54.8%
71.1%

6,710
8,607

54.5%
69.9%

-201
-169

-3.0%
-2.0%

12
1,859

0.1%
15.7%

79
1,598

0.6%
13.0%

-66
260

-83.7%
16.3%

1,542

13.0%

1,439

11.7%

103

7.2%

287
21

2.4%
0.2%

New unit issuance costs
Other non-operating expenses

－
6

－
0.1%

89
16
50
2

0.7%
0.1%
0.4%
0.0%

198
5
-50
4

221.3%
34.2%
100.0%
181.6%

Ordinary income

4,039

34.0%

4,964

40.3%

-924

-18.6%

4,039
4,039
4,039

34.0%
34.0%
34.0%

4,964
4,963
4,963

40.3%
40.3%
40.3%

-924
-924
-875

-18.6%-18.6%-17.6%

Property and other taxes

Operating Income and Loss

Ordinary Income and Loss

Other expenses related to rent businessOutsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts

OthersDepreciation
Expenses related to rent business (2)Non-operating income
Non-operating expenses
Interest expenses (incl. investment corporation bonds)

Borrowing expenses
Amortization of investment corporation bond issuance costs

Income before income taxes
Net income
Unappropriated retained earnings
Distributions per unit (JPY)(Note) Figures were rounded off to a million yen.

%
90.4%
9.6%
100.0%－
11,870975

5,680 yen
(Note 3)

AmountChange11,014840
11,855459
12,314
995

Rent revenue - real estate
Other rent revenue
Rent revenue - real estate (1)Gain on sales of real estate properties
Operating revenue

10,731
1,138
11,87017th Fiscal Period
Jan 1, 2010 - Jun. 30, 2010

6,770 yen
(Note 2)

-1,090 yen

1. Rent revenue - real estate• Properties owned at end of 16th period:• Property acquired in 17th period:• Properties sold in 17th period:• Properties acquired in 18th period:-505 mn yen+176 mn yen-84 mn yen+131 mn yen

2. Other rent revenues• Of which, proceeds from cancellation penalty at Tokyo
Tatemono Honmachi Building:+280 mn yen
3. Gain on sales of real estate properties• JPR Nagoya Sakae Building:-354 mn yen• A portion of land of JPR Jingumae 432 (Note 1): -105 mn yen
4. Expenses related to rent business• Properties owned at end of 16th period:+114 mn yen• Property acquired in 17th period:+99 mn yen• Properties sold in 17th period:-45 mn yen• Properties acquired in 18th period:+48 mn yen
5. Non-operating income• Of which, settlement of management
association accounts:-49 mn yen
6. Interest expenses• Of which, interest expenses (for loans):• Of which, interest expenses (for investment
corporation bonds):
7. Borrowing expenses• Of which, fees for prepayment :+55 mn yen+47 mn yen+153 mn yen

Recorded fees for prepayment paid to the lenders associated with partial prepay
ment of borrowings(Note 1) For gains on sale of real estate for the 17th fiscal period, JPR recorded the gain on
partial sale of land of JPR Jingumae 432 for expropriation as land for road (sold on
June 1, 2010).
(Note 2) For distribution per unit for the 17th fiscal period, the Special Measures on Taxation for
Investment Corporations (Special Taxation Measures Law, Article 67-15), the Special
Deduction from Income for Expropriated Land or Other Property (Special Taxation
Measures Law Article 65-2) and the Special Measures in Case Land or Other Property
is Acquired in Advance in 2009 or 2010 (Special Taxation Measures Law, Article 66-2)
have been applied to internally reserve a certain amount of unappropriated retained
earnings within the scope that no burden is borne on unitholders due to the additional
levy of corporate tax, etc.
(Note 3) As for the distribution per unit for the 18th fiscal period, JPR decided to distribute partof retained earnings brought forward that had been internally reserved through the 17th
fiscal period (same for below).

6

Comparison of Actual Results and Forecasts for the 18th Fiscal Period(Ended December 2010)（JPY mn）

Item

18th Fiscal Period

18th Fiscal Period Forecasts

Jul. 1, 2010 - Dec. 30, 2010

Jul. 1, 2010 - Dec. 30, 2010

Operating Income and Loss

Ordinary Income and Loss

AmountRent revenue - real estate
Rents
Common charges
Other rent revenue
Incidental income
Rent revenue - real estate (1)Operating revenue
Property and other taxes
Other expenses related to rent businessOutsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts
OthersDepreciation
Expenses related to rent business (2)Asset management fees
Adm. service/custody fees
Directors' compensation
Trust fees
Other operating expenses
Operating expenses
Operating income
Profits ((1) - (2))
Net operating income (NOI)
Non-operating income
Non-operating expenses
Interest expenses (incl. investment corporation bonds)
Ordinary income
Income before income taxes
Net income
Unappropriated retained earnings
Distributions per unit (JPY)%
10,731
8,747
1,720
1,138
745
11,87011,870
975
2,456
512
754
30
247
213
553
145
1,929
5,361
421
71
6
49
73
5,983
5,886
6,508
8,438
12
1,859
1,542
4,039
4,039
4,039
4,088

5,680

90.4%
73.7%
14.5%
9.6%
6.3%
100.0%
100.0%
8.2%
20.7%
4.3%
6.4%
0.3%
2.1%
1.8%
4.7%
1.2%
16.3%
45.2%
3.6%
0.6%
0.1%
0.4%
0.6%
50.4%
49.6%
54.8%
71.1%
0.1%
15.7%
13.0%
34.0%
34.0%
34.0%
34.4%

Amount%10,819
8,810
1,741
938
708
11,75811,758
981
2,405
514
708
32
217
214
575
143
1,927
5,314
418
71
6
49
110
5,970
5,788
6,444
8,371
5
1,680
1,550
4,112
4,112
4,111
4,160

5,750

Change from 18th Period Forecasts
Amount

92.0%
74.9%
14.8%
8.0%
6.0%
100.0%
100.0%
8.3%
20.5%
4.4%
6.0%
0.3%
1.8%
1.8%
4.9%
1.2%
16.4%
45.2%
3.6%
0.6%
0.1%
0.4%
0.9%
50.8%
49.2%
54.8%
71.2%
0.0%
14.3%
13.2%
35.0%
35.0%
35.0%
35.4%

-87
-63
-20
199
36
111
111
-6
51
-2
45
-1
30
-1
-21
1
1
46
3
0
－
0
-37
13
98
64
66
7
178
-7
-72
-72
-72
-72

%
-0.8%
-0.7%
-1.2%
21.2%
5.2%
0.9%
0.9%
-0.6%
2.1%
-0.5%
6.4%
-3.6%
14.1%
-0.5%
-3.8%
1.2%
0.1%
0.9%
0.8%
-0.2%
0.0%
1.0%
-33.7%
0.2%
1.7%
1.0%
0.8%
155.9%
10.6%
-0.5%
-1.8%
-1.8%
-1.8%
-1.7%

-70

(Note) Figures were rounded off to a million yen.

(Note) The forecasts for the 18th fiscal period
were those released at the results announcement
for the 17th fiscal period (ended June 30, 2010). It
was based on total 55 properties, adding
additional acquisition of co-ownership of BYGS
Shinjuku Building in the 18th fiscal period to 55
properties held as of the 17th fiscal period.

7

Forecast for the 19th Fiscal Period
Distribution per unit for the 19th fiscal period (ending June 2011) is anticipated to be about the same as the 18th
fiscal period (ended December 2010); JPR aims to further increase the amountItem

18th Fiscal Period

19th Fiscal Period

Jul 1, 2010 - Dec 31, 2010

Jan 1, 2011 - Jun 30, 2011

AmountOperating Income and Loss

Amount%Amount%Rent revenue - real estate

10,731

90.4%

10,808

94.1%

76

0.7%

Other rent revenue

1,138

9.6%

682

5.9%

-455

-40.0%

Rent revenue - real estate (1)11,870100.0%

11,490100.0%

-379

-3.2%

Operating revenue

11,870100.0%

11,490100.0%

-379

-3.2%

Property and other taxes

975

8.2%

1,049

9.1%

74

7.7%

2,456

20.7%

2,323

20.2%

-133

-5.4%

Other expenses related to rent business

Ordinary Income and Loss%

1. Rent revenue – real estate・Properties owned at end of 17th period:
・Properties acquired in 18th period:

ChangeOutsourcing expenses

512

4.3%

517

4.5%

5

1.1%

Utilities expenses

754

6.4%

674

5.9%

-79

-10.5%

Casualty insurance

30

0.3%

31

0.3%

0

0.8%

Repairs and maintenance

247

2.1%

214

1.9%

-33

-13.5%-0.9%

Property management fee

213

1.8%

211

1.8%

-1

Management association accounts

553

4.7%

556

4.8%

2

0.5%

Others

145

1.2%

118

1.0%

-27

-18.7%

Depreciation

1,929

16.3%

1,917

16.7%

-11

-0.6%

5,361

45.2%

5,290

46.0%

-70

-1.3%

Asset management fees

Expenses related to rent business (2)

421

3.6%

414

3.6%

-6

-1.7%

Adm. service/custody fees

71

0.6%

73

0.6%

2

3.8%

Directors' compensation

6

0.1%

6

0.1%

－

－

Trust fees

49

0.4%

49

0.4%

0

-0.3%

Other operating expenses

73

0.6%

103

0.9%

30

41.0%

Operating expenses

5,983

50.4%

5,938

51.7%

-44

-0.8%

Operating income

5,886

49.6%

5,551

48.3%

-334

-5.7%

Profits ((1)-(2))

6,508

54.8%

6,200

54.0%

-308

-4.7%

Net operating income (NOI)

8,438

71.1%

8,117

70.6%

-320

-3.8%

12

0.1%

42

0.4%

29

226.4%

1,859

15.7%

1,588

13.8%

-270

-14.5%

1,542

13.0%

1,461

12.7%

-81

-5.3%

287

2.4%

103

0.9%

-184

-64.0%

21

0.2%

20

0.2%

-1

-5.0%

6

0.1%

2

0.0%

-3

-59.1%

4,039

34.0%

4,005

34.9%

-34

-0.9%

4,039

34.0%

4,005

34.9%

-34

-0.9%

Net income

4,039

34.0%

4,004

34.8%

-35

-0.9%

Unappropriated retained earnings

4,088

34.4%

4,031

35.1%

-57

-1.4%

Non-operating income
Non-operating expenses
Interest expenses (incl. investment corporation bonds)

Borrowing expenses
Amotization of investment corporation bond issuance costs

Other non-operating expenses
Ordinary income
Income before income taxes

Distrbution per units (JPY)(Note) Figures were rounded off to a million yen.

5,680 yen

5,600 yen

-80 yen（715,000 units）（715,000 units）(- unit)-200 mn yen+276 mn yen

2. Other rent revenue
・Of which, proceeds from cancellation penalty: -117 mn yen
・Of which, proceeds from restoration payments
by tenants:-229 mn yen
・Of which, incidental charges:-92 mn yen
3. Expenses related to rent business・Properties owned at end of 17th period:
・Properties acquired in 18th period:-174 mn yen+104 mn yen

4. Non-operating income• Of which, settlement of management
association accounts:+39 mn yen

5. Interest expenses• Of which, interest expenses (for loans):-78 mn yen

Reduction of interest expenses as a result of partial
prepayment of debt:-85 mn yen

6. Borrowing expenses• Of which, fees for prepayment:-155 mn yen

Lack of fees for prepayment paid to lenders associated with partial
prepayment of debt

Assumptions for the 19th Fiscal Period Forecast Portfolio
Portfolio as of end of 18th fiscal period: 56 properties
Properties to be acquired in the 19th fiscal period: － Average Monthly Occupancy during Period: 93.2%(reflecting notices of contract terminations and only new contracts already executed)

 Total units outstanding: LTV ratio

715,000 units
48.8% (as of end of the 19th period)(LTV ratio = Interest-bearing liabilities / (Interest-bearing liabilities + Unitholders’ capital)
The forecasts for the 19th fiscal period were calculated based on the above “Assumptions for the 19th
Fiscal Period Forecast.” Actual operating revenue, ordinary income, net income and cash distributions perunit may change as a result of the acquisition of new properties or the sale of owned properties, etc.
Furthermore, the forecasts are in no way a guarantee of cash distribution amounts. For details on the
Assumptions for the 19th Fiscal Period Forecasts, please refer to the “Assumptions for the 19th Fiscal
Period Forecast (January 1, 2011 – June 30, 2011)” of the “Japan Prime Realty Investment Corporation
18th Fiscal Period Results (July 1, 2010 – December 31, 2010)”

8

[Reference] Forecasts of Rent Revenue – Real Estate and Expenses Related to Rent
Business for the 20th Fiscal Period
Rent revenue for the 20th fiscal period (ending December 2011) will be on track to recovery due to improvement in(JPY mn)occupancy rate
Item

19th Fiscal Period Forecast

20th Fiscal Period Forecast

Jan. 1, 2011-Jun. 30, 2011

Jul. 1, 2011-Dec. 31, 2011

AmountReal Estate Rent Revenue and Expenses

Rent revenue - real estate%

Amount%Change from the 19th
Fiscal Period
Forecast
Amount%10,80894.1%

10,864

93.3%

56

0.5%

Other rent revenue

682

5.9%

783

6.7%

101

14.8%

Rent revenue - real estate(1)11,490100.0%

11,648100.0%

157

1.4%

Property and other taxes

1,049

9.1%

1,042

9.0%

-7

-0.7%

Other expeses related to rent business

2,323

20.2%

2,494

21.4%

170

7.4%

Outsourcing expenses

517

4.5%

513

4.4%

-4

-0.8%

Utilities expenses

674

5.9%

777

6.7%

102

15.2%

Casualty insurance

31

0.3%

30

0.3%

0

-1.0%

Assumptions for the 20th Fiscal Period Forecast

Repairs and maintenance

214

1.9%

257

2.2%

42

19.9%

Property management fees

211

1.8%

216

1.9%

4

2.3%

Management association accounts

556

4.8%

557

4.8%

1

0.2%

Others

118

1.0%

142

1.2%

23

20.3%

 Portfolio
Portfolio as of end of 18th fiscal period: 56 properties
Properties to be acquired or soldin the 19th fiscal period:－
Properties to be acquired or soldin the 20th fiscal period:－ Average Monthly Occupancy during Period:94.9%

Depreciation

1,917

16.7%

1,834

15.8%

-82

-4.3%

5,290

46.0%

5,371

46.1%

81

1.5%

Profits ((1)-(2))

6,200

54.0%

6,276

53.9%

76

1.2%

Net operating income (NOI)

8,117

70.6%

8,111

69.6%

-6

-0.1%

Capital expenditure

755

6.6%

901

7.7%

145

19.3%

Net cash flow (NCF)

7,362

64.1%

7,210

61.9%

-151

-2.1%

Expenses related to rent business (2)(Note) Figures w ere rounded off to a million yen.

1. Rent revenue – real estate・Properties owned at end of 17th period:
・Properties acquired in 18th period:+60 mn yen-4 mn yen

2. Other rent revenue
・Of which, incidental charges:+114 mn yen

3. Expenses related to rent business・Properties owned at end of 17th period:
・Properties acquired in 18th period:+77 mn yen+3 mn yen

(Anticipates move-ins of some new tenants in addition to the forecast for the
19th period)

 Total Capital Expenditures:
901 mn yen
Major constructions with capital expenditures
Renewal of air-conditioning systems at
BYGS Shinjuku Building:
175 mn yen
Renewal of air-conditioning systems at
Nigata Ekinan Center Building:
80 mn yen
Renewal of common space at
Shinjuku Center Building:69 mn yen
The forecasts of rent revenue – real estate and expenses related to the rent
business for the 20th fiscal period were calculated based on the above“Assumptions for the 20th Fiscal Period Forecast.” Actual rent revenue – realestate, expenses related to the rent business, profits, net operating income(NOI), net cash flow and other figures may change as a result of theacquisition of new properties or the sale of owned properties, etc.

9Balance Sheet as of the End of the 18th Fiscal Period
Kept the ratio of interest-bearing liabilities to total assets as of the end of the 18th fiscal period at 45% level evenafter newly acquiring 2 properties (totaling 10.3 billion yen) by utilizing abundant cash on hands

Item
Current assets
Cash and deposits
Cash and deposits in trust
Other current assets
Noncurrent assets
Property, plant and equipment
Real estate

AssetsBuildings and structures

Land
Real estate in trust
Buildings and structures

Land
Intangible assets
Leasehold rights
Other intangible assets
Investments and other assets
Lease and guarantee deposits

OthersDeferred assets
Investment corporation bond issuance costs

Total assets

Liabilities

Current liabilities
Accounts payable - other
Advances received
Short-term loans payable
Current portion of long-term loans payable
Current portion of inv estment corporation bonds

OthersNoncurrent liabilities
Tenant leasehold and security deposits

Unitholders' Equity

Long-term loans payable
Investment corporation bonds
Total Liabilities
Unithoders' capital
Surplus
Total unitholders' equity
Total liabilities and unitholders' equity

As of Dec. 31, 2010
Amount%28,396
7.9%
14,0903.9%
13,934
3.9%
371
0.1%
332,357
92.1%
327,00890.6%
148,22041.1%
45,044
12.5%
103,175
28.6%
178,78849.5%
58,29716.2%
120,491
33.4%
4,798
1.3%
4,794
1.3%
4
0.0%
550
0.2%
49
0.0%
501
0.1%
150
0.0%
150
0.0%
360,904 100.0%
46,622
12.9%
2,189
0.6%
1,498
0.4%
10,0002.8%
24,899
6.9%
8,000
2.2%
35
0.0%
138,779
38.5%
17,7744.9%
78,50521.8%
42,50011.8%
185,40251.4%
171,339
47.5%
4,162
1.2%
175,50248.6%
360,904 100.0%

As of Jun. 30, 2010
Amount%34,7289.7%
19,647
5.5%
14,681
4.1%
399
0.1%
323,43890.3%
318,00888.7%
138,268
38.6%
43,687
12.2%
94,581
26.4%
179,73950.2%
59,24816.5%
120,491
33.6%
4,799
1.3%
4,794
1.3%
5
0.0%
630
0.2%
49
0.0%
581
0.2%
172
0.0%
172
0.0%
358,339 100.0%
33,004
9.2%
2,039
0.6%
1,465
0.4%
5,000
1.4%
21,499
6.0%
3,000
0.8%
－
－
149,03141.6%
17,2684.8%
84,26323.5%
47,50013.3%
182,03550.8%
171,339
47.8%
4,963
1.4%
176,303
49.2%
358,339 100.0%(JPY mn)
ChangeAmount%-6,332-18.2%-5,557-28.3%
-747
-5.1%
-27
-6.9%
8,919
2.8%
8,999
2.8%
9,951
7.2%
1,357
3.1%
8,593
9.1%
-951
-0.5%
-951
-1.6%
0
0.0%
-0
-0.0%
－
－
-0
-14.4%-79-12.6%
01.1%-80-13.8%-21-12.7%-21-12.7%
2,564
0.7%
13,618
41.3%
150
7.4%
32
2.3%
5,000 100.0%
3,400
15.8%
5,000 166.7%
35－-10,252
-6.9%
505
2.9%
-5,758-6.8%-5,000-10.5%
3,366
1.8%
－
－
-801
-16.1%
-801
-0.5%
2,564
0.7%

(JPY mn)
1. Balance of interest-bearing debt

End of 18th Period

End of 17th Period

ChangeTotal

163,904

161,262

2,642

Unsecured loans payable

104,221

101,579

2,642

Secured loans payable

9,183

9,183

－

Unsecured investment corporation bonds

50,50050,500－End of 18th Period
End of 17th Period
Change (P)2. Interest-bearing debt ratio, etc.
(1) Interest-bearing debt ratio
Interest-bearing debt / (Interest-bearing debt + Unitholders' capital)
48.9%
48.5%
0.4
(2) Interest-bearing debt to total assets
1) Interest-bearing debt / Total assets at end of period
45.4%
45.0%
0.4
2) Interest-bearing debt / (Total assets at end of period + Gains orlosses from real estate valuation)
47.5%
46.9%
0.6
(3)Long-term fixed-rate interest-bearing debt ratio
Long-term fixed-rate interest-bearing debt (*) / Interest-bearing debt
73.8%
81.7%
-7.9

*Total amount of long-term fixed-rate debt with over 1 year to maturity(JPY mn)
End of 18th Period
End of 17th Period
3. Commitment line status1) Credit limit (total)
16,00016,0002) Outstanding debt－－
3) Unused commitment line
16,00016,000
4) Lenders (at the end of the 18th fiscal period)
Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ,
Resona Bank, Mitsubishi UFJ Trust and Banking

Change－－－*Agreements have been concluded separately with the respective banks listed above.

4. Investment unit status
1) Total number of units outstanding (units)
2) Net assets per unit (yen)End of 18th Period

715,000
245,458

End of 17th Period

715,000
246,578

Change－-1,120(Note) Figures have been rounded off to a million yen.

10

Management Results of the 18th Fiscal Period(Ended December 2010)

18th

History of Portfolio Growth
Asset size grew to 341.5 billion yen through acquiring 2 office buildings in Tokyo despite severe acquisition environment
History of Growth of Portfolio Size
(JPY bn)

350.0

331.2

Office (Tokyo)

Office (other cities)

299.4

Total properties sold

Retail properties

300.0
251.9

245.3
202.6

197.6

222.4

179.6

200.0

163.6
125.7

150.0

52.8
41.6

40.1

50.0
38.8

139.6

13.2

100.2

48.4

45.3

45.3

135.8

141.6

209.5

219.8

31.1

26.6

26.6

172.9

184.1

31.1

108.3

114.8

43.1

43.1

43.1

39.4

94.0

94.0

96.2

99.6

95.4

95.4

95.2

95.2

-14.5

-14.5

-14.5

-18.2

-30.7

-30.7

-35.4

-35.4

100.2

57.5

45.3

39.8

43.9

48.0

48.0

38.2

40.4

50.0

57.3

77.1

38.2

63.8

33.2

-0.4

-0.4

-0.4

-6.2

-9.3

-9.3

-9.3

4th Period
Dec. 2003

5th Period
Jun. 2004

6th Period
Dec. 2004

7th Period
Jun. 2005

8th Period
Dec. 2005

39.8

13.2

100.2

99.3

91.3

77.5

94.5

92.1

100.0

0.0

209.2

310.6

280.6

275.1

250.0

341.5

-50.0
1st Period
Jun. 2002

2nd Period
Dec. 2002

3rd Period
Jun. 2003

9th Period 10th Period 11th Period 12th Period 13th Period 14th Period 15th Period 16th Period 17th Period 18th Period
Jun. 2006 Dec. 2006 Jun. 2007 Dec. 2007 Jun. 2008 Dec. 2008 Jun. 2009 Dec. 2009 Jun. 2010 Dec. 2010

(Note) Portfolio sizes have been rounded down to 100 million yen.

Portfolio Management Guidelines

Properties Acquired in the Past Two Years

Tokyo 80-90%;

Investment Target by Area

Office: 70-90%;

Investment Target by Asset Class

Acquired 8 office buildings in Tokyo totaling approximately JPY 80bn

Other cities: 20-10%
Retail: 30-10%(JPY bn)
FiscalPeriod15th(as of February 15, 2011)

Other cities
17.0%

Tokyo
83.0%

Greater Tokyo

Asset Type

Property Name

OfficeOlinas Tower

Dec. 2009

Tokyo CBDs

OfficeRokubancho Building

Dec. 2009

Tokyo CBDs

OfficeRyoshin Harajuku Building

Feb. 2010

9.3%
Tokyo
18.6%
Other cities
7.8%

Jun. 2009

Area

16th

Retail properties
27.9% Other cities

Tokyo CBDs
Greater Tokyo 49.0%
34.0%

Acquisition
Date

17th

Tokyo
64.3%

Tokyo CBDs

OfficeMar. 2010

Tokyo CBDs

OfficeMay 2010

Tokyo CBDs

OfficeTokyo Tatemono Kyobashi
Building
JPR Nihonbashi-horidome
Building
JPR Sendagaya Buildings

SellerTokyo Tatemono Co., Ltd.
and others
Domestic special purpose
company

Acquisition
Price
31.30
2.80

TOKYU REIT, Inc.

8.40

Tokyo Tatemono Co., Ltd.

5.25

Domestic special purpose
company
Sendagaya Kaihatsu Tokutei
Mokuteki Kaisha (SPC

5.10
15.05

operated by Tokyo Tatemono)

Office72.1%

Jul. 2010

Tokyo CBDs

OfficeDec. 2010

Greater Tokyo

Office18th

BYGS Shinjuku Building(additional acquisition)
Tokyo Tatemono Yokohama
Building
Total

Central General Development
Co., Ltd.

3.30

Tokyo Tatemono Co., Ltd.

7.00
78.20

12

Improvement in Portfolio Quality (Properties Acquired in the 18th Period)
Acquired excellent properties by additional acquisition through exercising preferential purchase rights and utilizing
sponsor pipelines
BYGS Shinjuku Building

Tokyo Tatemono Yokohama Building

Additional acquisition of co-ownership through exercising preferential purchase rights(realized entire ownership by additional acquisition of the remaining co-ownership)

Acquisition by utilizing sponsor pipelines

Type of use:
Location:
Acquisition date:
Acquisition price:

Office and retail
Shinjuku Ward, Tokyo
July 2010
JPY 3,300 mn(25% co-ownership)*Acquisition price of the entire
property: JPY 15,121 mn
April 1985
Central General
Development Co., Ltd.
25,733.10㎡

Completion:
Seller:Total floor space

Type of use:

Office and retail

Location:

Yokohama City, Kanagawa

Acquisition date:

December 2010

Acquisition price:

JPY 7,000 mn

Completion:

May 1981

Seller:Tokyo Tatemono Co., Ltd.

Total floor space:

8,772.51㎡[Advantage of acquiring additional ownership]
Acquiring additional ownership of BYGS Shinjuku
Building realized JPR’s entire ownership of the property,
which should eliminate risks involving co-ownership andcancel the reduced appraisal value associated with coownership.

Directly connected to Shinjuku-Sanchome Station on the
Toei Subway Shinjuku Line

Number of properties for which JPR has preferential purchase rights, etc.:
Number of properties with additional ownership acquisitions by JPR:

16 properties
7 properties

Four minutes walk from Yokohama Station on the JR Line,
Keikyu Main Line, Tokyu Toyoko Line and Sotetsu Main Line
Very close to Yokohama Station on the Yokohama Municipal
Subway Line

Acquisitions pipelines

Others36.2%

Acquisition
from sponsors

45.3%[Major properties with additional ownership acquisitions]

Number of properties acquired from sponsors
28 properties
Number of properties acquired by referral of sponsors
12 properties[Major properties acquired from sponsors]

18.5%
Acquisition by referralof sponsors

Shinjuku Sanchome
East Building

Tachikawa BusinessCenter Building

Fukuoka Building(Note) The figures represent the ratios of acquisition prices
for properties JPR owns as of February 15, 2011.

Olinas Tower

Rise Arena Building

13

Management Results (1) (Changes in Rent Revenue and Rent)
Decreased occupancy rate caused decrease of rent revenue, although decreases in average rent tens to decelerate
Changes in Rent Revenue (from Properties Owned as of the End of the 10th Period)(JPY mn)(JPY mn)

Entire portf olio

14,000Properties owned as of the end of the 10th f iscal period (ended Dec. 2006)
12,00010,000

9,662

10,002

10,365

10,21811,014

10,684

10,731

8,942

11th Period

12th Period

13th Period

14th Period

Jun. 2007

Dec. 2007

Jun. 2008

Dec. 2008

Rent revenue from the entire portfolio

8,942

9,662

10,002

10,365

Rent revenue from properties owned as of the end of
the 10th fiscal period

7,396

7,196

7,263

7,365

Period-on-period change (value)

－

67

101

30

Period-on-period change (rate)

－

0.9%

1.4%

0.4%

15th Period

16th Period

17th Period

18th Period

Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

8,000
6,000
4,000

7,196

7,263

7,365

7,396

7,335

7,097

6,949

6,501

2,000
0
Jun. 2007

Dec. 2007

Jun. 2008

Dec. 2008

Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

11th Period

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period

Changes in Average Rent of Office Buildings(for Properties Owned as of the End of the 10th Period)

Rent revenue from the entire portfolio

10,218

10,684

11,014

10,731

Rent revenue from properties owned as of the end of
the 10th fiscal period

6,501

7,335

7,097

6,949

Period-on-period change (value)

-60

-238

-148

-447

Period-on-period change (rate)

-0.8%

-3.2%

-2.1%

-6.4%

(Note 1) The “properties owned as of the end of the 10th fiscal period” in the graph to the left represent properties that
JPR continuously owns since the end of the 10th fiscal period excluding those replaced through transactions up to the18th fiscal period. The indicated figures of rent revenue are the sum of rents, common charges, parking rates andother revenues (excluding such variable revenues as incidental income) for these properties. As for the “entire
portfolio,” the indicated figures are the sum of rents, common charges, parking rates and other revenues (excluding
such variable revenues as incidental income) for all properties owned in respective fiscal periods (including properties
that were sold during the periods).
(Note 2) Values have been rounded down to million yen, and the rates of period-on-period change have been rounded
to the first decimal place.
(JPY thousand/tsubo)

11th Period
Average rent
(JPY/tsubo, includingcommon charges)

Total

Tokyo CBDs

Greater Tokyo

Other cities

Total

24,000Tokyo CBDs

22,000Greater Tokyo

20,000

Other cities

Average rent
Period-on-period change (rate)
Average rent
Period-on-period change (rate)
Average rent
Period-on-period change (rate)
Average rent
Period-on-period change (rate)

18,00016,000Total

14,000Tokyo CBDs

12,000Jun. 2007

Dec. 2007

Jun. 2008

Dec. 2008

Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

11th Period

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period

Greater Tokyo
Other cities

Average rent
Period-on-period change (rate)
Average rent
Period-on-period change (rate)
Average rent
Period-on-period change (rate)
Average rent
Period-on-period change (rate)

12th Period

13th Period

14th Period

Dec. 2007
17.4
1.9%
21.1
3.0%
15.5
1.6%
13.9
0.2%

Jun. 2008
17.8
2.3%
21.7
3.1%
15.8
1.9%
14.1
0.9%

Dec. 2008
18.0
0.9%
22.1
1.7%
15.9
0.5%
14.1
0.0%

15th Period

16th Period

17th Period

18th Period

Jun. 2009
17.8
-0.7%
22.1
-0.2%
15.7
-1.2%
14.0
-0.5%

Dec. 2009
17.2
-3.7%
20.6
-6.6%
15.6
-0.7%
13.9
-0.5%

Jun. 2010
16.7
-2.6%
19.8
-4.0%
15.3
-1.7%
13.7
-1.9%

Dec. 2010
16.5
-1.7%
19.4
-2.2%
15.0
-2.5%
12.8
-6.2%

Jun. 2007
17.1
－
20.5
－
15.3
－
13.9
－

(Note) The graph to the left covers office buildings which JPR continuously owns since the end of the 10th fiscal
period excluding those replaced through transactions up to the 18th fiscal period. The indicated figures are theaverage rents (rent per tsubo of occupied spaces including common charges per month) for these properties.

14

Management Results (2) (Changes in Occupancy Rates and Contract Changes)
Occupancy rate of the entire portfolio decreased due to contract termination by large tenants of properties in other cities
Office buildings in Tokyo CBDs and Greater Tokyo showed improvement in occupancy rates
Changes in Period-End Occupancy Rates of Properties by Asset Class and by Location


Average occupancy rate of the entire portfolio decreased due to worsened
occupancies in office buildings in other cities.
at the end of 17th period: 95.5% → at the end of 18th period: 93.5% (down 2.0
percent points period-on-period)Office (Tokyo CBDs)
at the end of 17th period: 92.4% → at the end of 18th period: 92.8% (up 0.4 percent
points period-on-period)
Office (Greater Tokyo)
at the end of 17th period: 92.3% → 18th period: 93.5% (up 1.2 percent points periodon-period)
Show trends of gradual improvement

Occupancy rate of office buildings in other cities decreased significantly due tocontract terminations by large tenants at Tokyo Tatemono Honmachi Building and
JPR Nagoya Fushimi Building
at the end of 17th period: 93.8% → at the end of 18th period: 75.6% (down 18.2
percent point period-on-period)Retail properties continued stable operations
at the end of 17th period: 99.9% → at the end of 18th period: 99.9% (±0.0 percent
point period-on-period)

100.0%
99.9%
93.5%

95.0%

90.0%

All properties

93.5%

Office (Tokyo CBDs)

92.8%

Office (Greater Tokyo)

85.0%
Office (other cities)

80.0%

75.6%

Reference: Office (other cities) (excluding Tokyo Tatemono Honmachi Building
and JPR Nagoya Fushimi Building, Note 2)
Retail properties

75.0%
Dec. 2006

Jun. 2007

Dec. 2007

Jun. 2008

Dec. 2008

Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

10th Period

11th Period

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period(Note 1) Indicated occupancy rates are as of the end of December 2010, calculated on the basis of thelease conditions as of the same date for properties JPR owned as of the same date.
(Note 2) “Reference: Office (other cities) (excluding Tokyo Tatemono Honmachi Building and JPR
Nagoya Fushimi Building)” shows the average occupancy rates of office buildings in other cities
excluding Tokyo Tatemono Honmachi Building and JPR Nagoya Fushimi Building.
(Note 3) Figures have been rounded to the first decimal place.

Changes in Contract Changes
On an accumulated basis, spaces nearly as much as the cancelled spaces weresuccessfully leased to new tenants in the three fiscal periods from the 15th to the 17th
period.

In the 18th fiscal period, cancelled spaces were larger than newly leased spaces due
to contract terminations by large tenants in properties in other cities. However, thereinforced leasing efforts enabled JPR to significantly expand newly leased floors.

30,000㎡
Newly leased space

Cancelled space

25,000㎡

Total cancelled space at Tokyo
Tatemono Honmachi Building and
JPR Nagoya Fushimi Building

20,000㎡
15,000㎡

Newly leased
space

10,000㎡

Cancelled space

Newly leased space– cancelled space

15th Period

6,985 ㎡

7,048㎡- 63㎡

16th Period

9,691 ㎡

7,850㎡

1,841㎡

17th Period

4,042 ㎡

6,853㎡- 2,811㎡

18th Period

18,188 ㎡

25,989㎡- 7,801㎡

5,000㎡
0㎡
Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

15th Period

16th Period

17th Period

18th Period

15

Continued Implementation of JPR Brand Strategy(Countermeasures for Long-Period Earthquake Ground Motion)
JPR has been implementing the JPR Brand Strategy with the aim of heightening tenant satisfaction and perpetually enhancing its asset values.
With the 3 S’s (Ｓｅｒｖｉｓｅ, Ｓａｆｅｔｙ and Ｓａｖｅ Ｅｎｅｒｇｙ) at the core, JPR is promoting it as a brand of buildings that provide the best A (Amenities).
JPR will create facility spaces that always provide good amenities by providing high-quality services and environmentally-friendly operations withconsideration given to the safety and security of all users.

Measures on “Safety” (safety and security) of the JPR Brand Strategy
Enhance security systems and human support system

Prepare countermeasures for earthquake disasters and fully implement fire protectionplans and trainingContinuously improve environment
inside buildings, including preventionof infection
Check safety systems inside buildings,
including parking lotsConduct anti-seismic reinforcement

Ｓａｖｅ Ｅｎｅｒｇｙ
Operate facilities inconsideration of theenvironment

What is long-period earthquake ground motion?
Upon the Tokachi-oki Earthquake in September 2003, fire broke out in Tomakomai City, approximately 250 kilometers
away from the epicenter, as a result of at oil tanks sloshing (liquid surface displacement) occurred inside them. Attention
was given to long-period earthquake ground motion as one of the causes of the incident. A long-period earthquake
ground motion involves seismic waves with a long cycle of motion ranging from a few seconds to 20 seconds, and ischaracterized by slow and extremely long vibration. The larger the magnitude of earthquakes becomes, the more
frequently long-period earthquake ground motions occur, and the ling-period earthquake ground motion is amplified by the
sedimentary layers that exist on the ground surface through deep underground. As such, it is believed that any
occurrence of a large earthquake will tend to give more impact on plain areas with thick sedimentary layers, such as
Tokyo and Osaka.

(*)Buildings having a height of over 60 meters or seismic isolation structures, and approvedby the Minister of Land, Infrastructure, Transport and Tourism

1970s

Requireinvestigation

Judgment
criteria

Distortion The table to the right represents judgment of impacts large-scale
earthquakes may give on buildings in accordance with their completion
dates. It has been confirmed that ultra skyscrapers designed in the 1970s
may have distortion of over 1/100 upon long-period earthquake groundmotion, possibly resulting in failures caused by the large volume of
distortion.

1980s
through
1990s

2000
and after

Period of building
motionOverview of countermeasure construction at
Shinjuku Center Building (already implemented)
Renovations for anti-seismic reinforcement were implemented at Shinjuku Center
Building (construction completed in 1979) as a countermeasure for long-period
earthquake ground motion, with Taisei Corporation, one of JPR’s sponsors,
conducting design and construction
 － Overview of anti-seismic reinforcement construction －Anti-seismic capacity was enhanced by installing seismic dampers

Seismic dampers were introduced primarily at floors having larger story drift angles
and floors having larger accumulated fatigue of reinforced concrete flexible antiseismic walls

Distortion

Distortion controlled by earthquake-resistant wallsTime(second)Occurrence ofearthquake The Ministry of Land, Infrastructure, Transport and Tourism currently plans to
prepare countermeasure guidelines based on its survey results of longperiod earthquake ground motion as well as requesting for private-sector
surveys and comments. The Ministry is considering to conduct reexamination and give guidance on necessary reinforcement and othermeasures for existing ultra-skyscraper buildings, etc. (*) that may be largely
impacted by long-period earthquake ground motion, as well as for ultraskyscraper buildings, etc. to be newly constructed.



Typical earthquake

Scale of vibration in long-period ground motion at magnitude-8-class earthquake

Buildingheight

ＳａｆｅｔｙＡｍｅｎｉｔｙ

Provide safety andCreate spaces that
securitysatisfy people who
Ｓｅｒｖｉｓｅ
work there
Provide elaborate
services

Situation of governmental guidance on countermeasuresfor long-period earthquake ground motion

Long-period earthquake ground motion

Distortion

12 units were installed at each floor of the 24 stories (288 units in total)
Reinforced
concrete flexible
Displacementanti-seismic
dependent
walls
seismic
dampers (12units installed
Zone Non each floor)

Shinjuku Center Building

39F

Distortion

Newly installed seismic
damperThe countermeasure construction
should be able to prevent major
accidents by damping vibrations as
early as possible and restricting
distortion at a low level

28F

Loss of pre-cast concrete from external walls
Ceiling breakage and collapse
Breakage and collapse of facilities and equipment

Zone E

Distortion controlled byearthquake-resistant walls
When earthquake lasts long
When aftershocks andseparate large earthquakes
occur in succession

Zone S

Displacement-dependent
seismic
dampers

26F
15F
After countermeasures
are taken

Occurrence ofearthquake

Occurrence ofearthquake

Time

Time
(second)16

Financial Strategy
Continued conservative financial operations by focusing on long-term, fixed-rate borrowings and diversifying
repayment dates by fiscal period, so as to maintain high credit ratings
Changes in Unitholders’ Capital, Ratio of Interest-Bearing Liabilities and Ratio of InterestBearing Liabilities to Total Assets at End of Period

Ratio of Interest-Bearing Liabilities(as of February 15, 2011)(JPY bn)

200

100%

Unitholders’ capital
Ratio of interest-bearing liabilities to total assets at end of period
Ratio of interest-bearing liabilities

150

75%

37.2%

46.8%
42.3%

35.6%

36.5%

56

56

42.1% 44.7%
38.6% 40.3%

33.5%

40.7% 41.8%

89

89

89

115

115

115

4.9%

45.6% 45.4% 45.0% 45.4%

34.3% 35.7%

115

156

156

25%

156

156

156

156

171

50.9%

0%

17th Period
Jun. 2010

1th
2th
3th
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
Jun. 2007

Dec. 2007 Jun. 2008 Dec. 2008 Jun. 2009 Dec. 2009 Jun. 2010 Dec. 2010

(Note 1) Ratio of interest-bearing liabilities (%) = Interest-bearing liabilities / (Interest-bearing liabilities + Unitholders’ capital), Ratio ofinterest-bearing liabilities to total assets at end of period (%) = Interest-bearing liabilities / Total assets at end of period(Note 2) Unitholders’ capital has been rounded down to the nearest billion yen.
(Note 3) The ratio of interest-bearing liabilities and the ratio of interest-bearing liabilities to total assets at end of period have beenrounded to the first decimal place.

Diversification of Repayment Dates of Interest-Bearing Liabilities(as of February 15, 2011)

Long-term
borrowings
maturing in
more than one
year

76.9%

171

0

Jun. 2002 Dec. 2002 Jun. 2003 Dec. 2003 Jun. 2004 Dec. 2004 Jun. 2005 Dec. 2005 Jun. 2006 Dec. 2006

Corporate bonds
maturing within one
year

50%

Long-term borrowings

56

12.1%

48.9% 49.0% 48.5% 48.9%

38.9%
47.9%

50

44.1% 45.2%

Current
portion of
long-term
borrowings

6.1%
25.9%

51.1%
37.1% 46.4%

39.4% 40.6%

Corporate bonds maturing in
more than one year

42.0% 44.1% 45.8% 48.7%

54.9%

100

Short-term borrowings

Ratio of long-term, fixed-ratio
borrowings
Average maturity of long-term interestbearing liabilities
Average interest rate of long-term
interest-bearing liabilities
Average maturity of interest-bearing
liabilities

As of February
15, 2011

81.71%

76.88%

4.13 years

3.62 years

1.99%

1.89%

3.47 years

2.88 years(Note) Long-term interest-bearing liabilities: interest-bearing liabilities withrepayment dates coming in more than one year

Credit Ratings Assigned to JPR(as of February 15, 2011)

Rating Agency

RatingR&I (Issuer rating)AA-

Moody’s (Issuer rating)

A2

S&P (Long-term corporate credit rating)A

Jun. 2011 Dec. 2011 Jun. 2012 Dec. 2012 Jun. 2013 Dec. 2013 Jun. 2014 Dec. 2014 Jun. 2015 Dec. 2015 Jun. 2016 Dec. 2016 Jun. 2017 Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019 Dec. 2019 Dec. 2026

(Note) Figures have been rounded down to the nearest 100 million yen.

17

Breakdown of Interest-Bearing Liabilities
Work to further diversify fund procurement methods and sources, and elaborately construct relationships with lenders
Table of Balance of Borrowings

Overview of Corporate Bonds(JPY mn)(JPY mn)

Short-term borrowings

LenderResona Bank, Limited
Mizuho Corporate Bank, Ltd.

Name

Security

Totak Issue Amount

4,000

Third Series of Corporate Bonds

5,000

3,000 Unsecured / Unguaranteed /Non-subordinated
2,000

Fifth Series of Corporate Bonds

5,000

-

1,000

Sixth Series of Corporate Bonds

5,000

5,000

10,000Seventh Series of Corporate Bonds

4,500

Eighth Series of Corporate Bonds

9,000

Ninth Series of Corporate Bonds

6,000

1,000

Mizuho Trust & Banking Co., Ltd.
Total short-term borrowings

Balance as of December
31, 2010

4,000

Mitsubishi UFJ Trust and Banking Corporation

Lender

Lon-term borrowings

Balance as of June 30,
2010

Balance as of June 30,
2010

Balance as of December
31, 2010

Mizuho Corporate Bank, Ltd.

13,80013,700

The Bank of Tokyo-Mitsubishi UFJ, Ltd

12,834

12,751

Security

Mitsubishi UFJ Trust and Banking Corporation

7,000

7,000

Tenth Series of Corporate Bonds

3,000

Zenkyoren (The National Mutual Insurance Federation of Agricultural Cooperatives)

7,000

7,000

Eleventh Series of Corporate Bonds

6,000

Sumitomo Mitsui Bank Corporation

2,900

5,850

Aozora Bank, Ltd.

5,300

5,300

Twelfth Series of Corporate Bonds

7,000

American Family Life Assuarance Company of Columbus

10,0005,000

Balance of corporate bonds

50,500Development Bank of Japan Inc.

4,745

4,620

Sompo Japan Insurance Inc.

4,000

4,000

Sumitomo Life Insurance Company

4,000

The Bank of Fukuoka, Ltd.

3,000

4,000 Unsecured / Unguaranteed /Non-subordinated
3,000

The Chugoku Bank, Ltd.

3,000

3,000

Mizuho Trust & Banking Co., Ltd.

3,000

3,000

The Shinkumi Federation Bank

3,000

3,000

ORIX Trust and Banking Corporation

3,000

3,000

Taiyo Life Insurance Company

2,000

3,000

Shinsei Bank, Limited

3,000

2,000

The Hachijuni Bank, Ltd.

2,000

2,000

Daido Life Insurance Company

2,000

2,000

The Iyo Bank, Ltd.

1,000

1,000

Meiji Yasuda Life Insurance Company

9,183

9,183

Total long-term borrowings

105,762

103,404

Total borrowings

110,762
Balance as of June 30,
2010

Total corporate bonds

50,500
Balance as of June 30,
2010

Total interest-bearing liabilities

161,262

Overview of Commitment Line Contract

Secured / Unguaranteed / Non-subordinated113,404
Balance as of December
31, 2010

50,500Limit

16 billion yen (total)

Maturity dateNovember 30, 2011

Lenders

Mizuho Corporate Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Resona Bank, Ltd.
Mitsubishi UFJ Trust and Banking
Corporation

Security
Unsecured / Unguaranteed / Non-subordinatedBalance as of December
31, 2010

163,904

18

History of JPR’s Unit price and Trade Volume (Jul. 1, 2010 – Feb. 10, 2011)
Since the announcement of the Bank of Japan in October 2010 concerning its purchase of J-REIT units, JPR’s
investment unit price outperformed the TSE REIT Index through the end of the 18th fiscal period (ended
December 2010)(Unit price)(JPY)(Trade volume)(Unit)
ＪＰＲ

10000

260,000*The TSE REIT Index and other figures have been
indexed with July 1, 2010 as the base date, and thechart shows relative performances.

TSE ＲＥＩＴ Ｉｎｄｅｘ
ＴＯＰＩＸ
240,000

TSE REIT Office Index

220,000

8000

Announcement of
the Bank of Japan
concerning purchaseof J-REIT units(October 5, 2010)

6000
200,000

180,000

4000

160,000
2000
140,000

120,000

Jul. 2010

0Aug. 2010

Sep. 2010

Oct. 2010

Nov. 2010

Dec. 2010

Jan. 2011

Feb. 201119

Future Management Strategy

19th～Future Management Policies
JPR aims to increase distribution for the 19th fiscal period (ending June 2011), and make the distribution per unit of
5,680 yen for the 18th fiscal period (ended December 2010) the bottom, by fully employing the management capabilitiesof the Asset Manager
External Growth Strategy

Internal Growth Strategy

Financial and IR Strategies– Strictly Selected Investment in Excellent
Properties –– Continuous Endeavors on Reinforcing Leasing
Activities and Improving NOI –– Reduction of Debt Financing Costs and
Implementation of Strategic IR[Market Analysis][Market Analysis][Market Analysis] Financial enviroment have notably improved Vacancy rates of office buildings in Tokyo havepeaked out Financial institutions, primarily regional banks,
started to take proactive lending attitude Transactions of excellent properties, which we
can expect revenue improvement at the timingof market recovery, remain stagnant

 New demand has now been increasing after
significant rent adjustments

 Buyers’ investment appetite has recovered Rent levels are expected to bottom out in 2011 Transaction market is turning to recovery aheadof the rental market

 Multiple applications for the same spaces andlease contracts at higher-than-anticipated rents
are observed at JPR’s properties

 Investment unit prices quickly recovered after
the Bank of Japan announced that J-REIT
units are scope of its target for its purchase
operation
 Equity finance and corporate bond market for JREIT became active[JPR’s Strategy][JPR’s Strategy][JPR’s Strategy] Reinforce sponsors’ pipelines

 Focus on leasing of properties in Tokyo CBDs
that should make large contributions to earnings
as well as in properties in other cities that saw
contract terminations by large tenants Endeavor to reduce debt financing costs

 Strictly select investment properties among
extensive targets in multiple categories: “officebuildings in Tokyo”, “urban retail properties” and“properties with low occupancy”
 Avoid investment in office buildings in Tokyo thatare overvalued
 Continue to seek investment opportunities basedon the expectation that rental market is about tobottom out Reinforce the Asset Manager’s leasing activities
and enhance cooperation in tenant solicitation
activities with Tokyo Tatemono, one of thesponsor, to realize lease-ups as early as possible
 Continuously endeavor to improve NOI by
reducing administration and energy costs andother expenses

 Take a cautious approach to equity financing by
fully discerning when the existing portfolio will
recover Conduct flexible control of LTV for dynamicallypromoting investment strategy
 Implement IR activities demonstrating the atrong
potential of JPR’s portfolio, its high fundmanagement capabilities and other distinctive
characteristics

21

Office Transaction Market Conditions
Changes in Cap Rates of Offices

Changes in Lending Attitude of Financial Institutions D.I. and Financial Position D.I.

Cap rates of office buildings in Tokyo have begun to increase or remained flat

Financial institutions relaxed lending attitude after becoming most severe in March 200925

7.0%
Otemachi/Marunouchi

6.5%

Nihonbashi

Nishi-Shinjuku

Shibuya

NagoyaOsaka

Lending Attitude of Financial Institutions D.I. (Real estate industry)

15

Financial Position D.I. (Real estate industry)

6.0%
5

5.5%
5.0%

-5

4.5%
-15

4.0%
-25

3.5%
3.0%
Apr. 2005

Oct. 2005

Apr. 2006

Oct. 2006

Apr. 2007

Oct. 2007

Apr. 2008

Oct. 2008

Apr. 2009

Oct. 2009

Apr. 2010

Oct. 2010

-35
2000

(Note) Prepared by Tokyo Realty Investment Management, Inc. based on the Cap Rate of Average-Sized Class A Office Building in The Japanese Real
Estate Investor Survey published by Japan Real Estate Institute

Major Transaction Cases of Properties by Other REITs (Jul. – Dec. 2010)
Acquisition
Date

Buyer

Property Name

Location

Acquisition
Price
Cap Rate(JPY bn)
6.4

5.2%

Minato Ward, Tokyo

2.4

5.7%

Minato Ward, Tokyo

5.0

5.0%

Sep. 2010 ＤＯＩ Kyodo Building (Kudan Ichigo-kan)

Chiyoda Ward, Tokyo

4.0

5.0%

Chiyoda Ward, Tokyo

4.6

4.8%

Meguro Ward, Tokyo

Oct. 2010

ＴＲＩ Akihabara Sanwa Toyo Building

Oct. 2010

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Views on the Market by an Independent Institution (Office Buildings in Tokyo)

ＯＪＲ ORIX Meguro Building
No. 32 Kowa Building(additional acquisition of ownership)
Aug. 2010 ＤＯＩ Kyodo Building (Nishi-Shimbashi)
Jul. 2010

Aug. 2010 ＪＥＩ

2001(Note) Prepared by Tokyo Realty Investment Management, Inc. based on the TANKAN report published by the Bank of JapanＴＲＩ Kiba Eidai Building

Koto Ward, Tokyo

4.0

5.2%

Nov. 2010 ＫＲＩ Kyodo Building (Ginza No.8)

Chuo Ward, Tokyo

4.3

4.6%

Nov. 2010 ＫＲＩ Kyodo Building (Honcho 1chome)

Chuo Ward, Tokyo

4.0

4.9%

Dec. 2010 ＪＥＩ Kowa Shirokanedai Building

Minato Ward, Tokyo

4.7

5.3%

Expected cap rates
 The increasing trend of expected cap rates of class A buildings continued throughApril 2010, but the trend is anticipated to reverse hereafter.
 The decrease in expected cap rates will progress, given the increase in investment
seeking stable income gains, loosened lending attitude of financial institutions andcontinued tightness in the demand and supply situation due to infrequent fire sales.
 The pace of decreases in the expected cap rates is anticipated to be slow becausesignificant rises in rents cannot be expected under low economic growth.

(Note) Prepared by Tokyo Realty Investment Management, Inc. based on the Real Estate Market Research Report (surveyed in
September 2010) by STB Research Institute Co., Ltd.

(Note 1) Prepared by Tokyo Realty Investment Management, Inc. based on press releases by respective REITs, with acquisition
prices rounded off to 100 million yen(Note 2) Cap rates are values through direct capitalization method based on appraisal values indicated in the press releases.

22Office Rental Market Conditions
Changes in Effective Rate of Job Offers to Job Seekers and Vacancy Rate of
Office Buildings in Tokyo(times)The vacancy rate peaked out as the effective ratio of job offers to applicants(employment) shows an improving trend.

Changes in Vacancy Rate and Rents of Office Buildings in Tokyo
Past trends allow the projection that rents of office buildings in Tokyo will（％）
bottom out by the end of 2011.

（%）

1.2

10.0

10.0

1.1

9.0

9.0

1.0

8.0

8.0

7.0

7.0

6.0

6.0

5.0

5.0

4.0

4.0

3.0

3.0

0.9
0.8
0.7
0.6
0.5
0.4
Effective ratio of job offers to job seekers (left axis)
Vacancy rate (right axis)

0.3

2.0
1.0

0.2
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(Note) Prepared by Tokyo Realty Investment Management, Inc. based on the Effective Ratio of Job Offers to Job Seekers published by the Ministry of Health,Labour and Welfare and the Office Data (Average Vacancy Rates in Tokyo CBDs) published by Miki Shoji Co., Ltd.

New Supply and New Demand of Office Spaces in Tokyo 23 Wards

Vacancy rate(left axis)

23,000Rent(right axis)

22,00021,00020,00019,00018,00017,000

2.0
1.0
2002

2003

2004

2005

2006

2007

2008

Actual figures ←→ Forecasts

2009

2011

2010

16,0002012(Note) Actual figures were prepared by Tokyo Realty Investment Management, Inc. based on the Office Data (Average Vacancy Rates and Average Rents inTokyo CBDs) published by Miki Shoji Co., Ltd. Forecasts are projected by Tokyo Realty Investment Management, Inc.

Views on the Market by an Independent Institution (Office Buildings in Tokyo)(tsubos)

Vacancy Rates
 Vacancy rates generally stayed flat through September 2010 after the rise in June and slowly decreased
toward the year end. New supply in 2011 will be at an average level, and vacancy rates are anticipated todecrease as the increased demand will be larger than supply.

400,000
Actual figures ←(JPY/tsubo)
24,000→ Forecasts

300,000

Rent Levels
 Demand slowed in the middle of 2010. For 2011, there will be contrary trends of rents between large-scalebuildings, where rent levels will recover bit by bit as tenant solicitation starts to proceed as a result of rent
adjustments, and for medium- to small-sized buildings, where further rent adjustments will be unavoidable astenants move out to large-scale buildings. As the average in the market, however, the rent levels are
anticipated to bottom out by year end.

200,000

100,000

0-100,000
New supply

New demand-200,000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

(Note 1) Prepared by Tokyo Realty Investment Management, Inc. based on materials from CB Richard Ellis (through 2011) and the Real Estate Quarterly Review
published by NLI Research Institute (2012 and after)(Note 2) The demand figures represent net increases, and supply figures are accumulation of new completion (without considering lost spaces)

Although a large volume of supply will be made in 2012, the vacancy rate is forecast to
decrease in 2013 and after due to progresses in the adjustment of new supply and other factors.

Supply and Demand Trend Features of new supply through 2011:“Medium-sized office buildings occupying major part of supply”, “small supply in the central 5 wards of Tokyo”
and “total volume of new supply will not be so large”
 Demand is slowly increasing, primarily led by companies in the IT industry that are showing good performance.
Demand is anticipated to grow, stimulated by the recovery in employment and the sense of comparative
inexpensiveness associated with rent adjustments.
 Vacancy rates will temporarily rise in 2012 due to mass supply as large as nearly 300,000 tsubos.
 In 2013 and thereafter, vacancy rates will decrease as volume adjustments of new supply and stock
adjustments (such as dissolution of old buildings) will progress.
(Note) Prepared by Tokyo Realty Investment Management, Inc. based on the Real Estate Market Research Report (surveyed in
September 2010) by STB Research Institute Co., Ltd.

23

External Growth Strategy (Environmental Recognition and Investment Strategy)[Investment Strategy][JPR’s View on Present Situation]


Strictly select investment properties among extensive targets in multiple categories, as a diversified REIT
investing in office buildings and retail properties

Transactions of excellent properties, which we can expect
revenue improvement at the timing of market recovery, remainstagnant

Set acquiring core office buildings in the Tokyo area as the main scenario and target urban retailproperties that we expect price rise over the medium term and properties with low occupancy that the
cash flow would increase surelyAcquisition targets tend to expand into class B office buildings

Buyers’ investment appetite to invest has recovered

Investigate acquisitions of excellent properties in other cities that promises stable returns by carefully
discerning their areas, locations and specifications

Obtain information of excellent properties by reinforcing sponsor pipelines and taking advantage of highsourcing abilities such as focusing on property acquisitions through negotiated transactions

Fund procurement environment has notably improved[Future Prospects]Prices will rise in association with full recovery of the rental
market.



Investment will be boosted by the rise in investment unit
prices and the reduction in procurement costs



J-REITs will accelerate property acquisitions by using funds
procured through public offerings and corporate bonds

Transaction market is turning to a period of recovery ahead of
the rental market

Conceptual Chart of Price Fluctuation Cycles(Primarily from the viewpoint of cap rates)

Strictly select investment properties
among extensive targets in multiple
categories[Core Office Buildings in Tokyo Area]• Cooperating with the sponsors to avoid excessivecompetition in the market• Reinforce collection of information on properties throughnegotiations

Utilize sponsors’ pipelines[Urban Retail Properties]• Still less competition compared to office buildings• Target properties located in front of stations and underlease contracts based on fixed rents over a long term
• Total investment amount will be limited• Conduct strictly selected investment in class B officebuildings that cannot be priced easily as market recovery is
postponed
Ryoshin Harajuku
Building

JPR Nihonbashihoridome Building

BYGS Shinjuku
Building

JPR Shibuya Tower
Records Building

Kawasaki Dice
Building

JPR conducted concentrated
investments in the period
when property prices were in
the lower range

price
Future prospect

Lower range

Recovery periods in the market cycle
differ by:・Asset class such as office and retail・Grade of property (class S, class A
and class B)
・Area (Tokyo and other cities)↓
Must discern the specificcharacteristics of respective properties[Properties in Other Cities]• Properties that promises
stable returns• Resumed collecting information while
cautiously selecting investment areas

JPR Hakata Building[Properties with Low Occupancy]• Properties that allow expectations for
upside revenues by reinforcing leasing

Shinagawa
Canal Building• Competition among J-REITs is
still limited; volume of information JPR
received on potential investment properties haveincreased since last autumn

24Internal Growth Strategy (1)Changes in the Number of Tenant Changes at Existing Properties

Projected Trends of Occupancy Rates
Occupancy rate is anticipated to recover in the 20th fiscal period

The number of tenant move-outs and downward revisions of rents shows a decreasing trend.

100.0%
An increase by 0.9 percent points comparedwith 92.6% forecasted upon announcement of
the 17th period financial results

98.0%
96.0%
94.0%

80

(cases)

95.2%

95.0%

15th Period

16th Period

17th Period

18th Period

19th Period (Forecast)

93.6%

93.5%

60

92.0%
90.0%
88.0%

Occupancy level of all properties including
planned move-ins and contract terminations (anincrease of 0.1 percent point over the 19th
period)

40

20

86.0%
Dec. 2010

Jan. 2011

Feb. 2011

18th Period

Mar. 2011

Apr. 2011

May 2011

Jun. 2011

Jul. 2011

19th Period

Aug. 2011

Sep. 2011

Oct. 2011

Nov. 2011

Dec. 2011

20th Period

The occupancy rate for the 19th period includes notices ofcontract terminations, contracts already executed and anticipatednew contracts that are certain to move-in

The occupancy rate for the 20th period anticipates some new
tenants moving in, adding to the forecast for the 19th period0Move-out

Downward RevisionMove-in

Upward Revision(Note) Occupancy rates for the 19th and the 20th period have been calculated based on the 56 properties JPR owned at the end of the 18th period

Composition of New Tenants by Industry

Changes in Rents and Other Income from the Entire Portfolio

The chart to the right indicates the composition of tenants(by floor space) who executed new contracts or finalized
move-ins in the 18th fiscal period and after

Finance
2.8% Public services
1.6%
Services Utilities
0.9% Healthcare(legal, academic, etc.) 3.2%

4.4%

Industries with high composition rates
IT
Construction
Manufacturing(medical products)
Retail

20.9%
17.0%
15.2%
10.6%

(JPY mn)

Although rents and other income continued to remain weak, they hit the bottom in the
18th period and will turn to recovery in the 19th period and after as occupancy rates
recover and rent-free periods are cancelled.

11,200IT

20.9%Services (others)
4.6%

11,00010,800Real estate
5.0%

10,60011,014Services (staffing)
5.3%

Construction

17.0%

Manufacturing (others)

11,004
10,731

10,684

10,808

10,864

10,200

8.4%
Retail10.6%(Note) Prepared by Tokyo Realty Investment Management, Inc. using
information posted on the websites of respective companies and basedon the Japan Standard Industrial Classification by the Statistics Bureau,
Ministry of Internal Affairs and Communication

10,40010,000

Manufacturing(medical products)

15.2%

Dec. 2009

Jun. 2010

Dec. 2010

Jun. 2011

Dec. 2011

Jun. 2012

16th Period

17th Period

18th Period

19th Period

20th Period

21st Period(Note) Figures have been rounded down to the million yen.

25

Internal Growth Strategy (2) (Endeavors on Leasing)Tokyo Tatemono Honmachi Building

JPR Nagoya Fushimi Building (former Mitsubishi UFJ
Lease & Finance Nagoya Head Office Building)






Move-out of key tenant: end of August 2010
A leasing project team newly set up at the Asset Manager
Implemented renewal of toilets, common spaces, etc.
Conducted a private view for possible tenants on the renewed
floor: November 2011
 Reduced property management costs by changing regulations
and reviewing management specifications in association withthe tenant’s move-out (cost reduction by 30%)
– Potential of the property –Located in the center of a business district; rectangular-shaped
floor having 300 tsubosMove-out of key tenant: September 2010

Renewed air-conditioning systems, employed OA-compatible
floor, newly established a refreshing room, introduced security
systems, etc.

Changed the building name: October 1, 2010
– Potential of the property –Rectangular-shaped floor, large-scale parking lot, goodaccess to express way

Leasing status

Leasing status

New leases: finalized 3 cases totaling approximately 1,500m2 (equivalent to 21% of thetotal leasable area)New leases totaling approximately 2,700m2 (equivalent to 38% of the leasable area)
comprising floor expansion (one case) and new contracts (2 cases)

Negotiations are under way with 4 candidates on leasing area of approximately 4,000m2
in total

There are relocation needs as a location for office buildings, with many concentrations of
manufacturers and areas with relatively inexpensive rentsSuccessfully found promising candidate tenants in a short time through cooperation
between the leasing project team and the tenant marketing forces of Tokyo Tatemono



Utilized tenant information accumulated from tenants associated with the large-scale
development conducted by Tokyo Tatemono, one of JPR’s sponsors

Endeavors to Reinforce Leases
Future Prospects of Occupancy Rates
100.0%

80.0%

60.0%

40.0%

← →
Includes contracts alreadyexecuted and new tenants that arecertain to move inAssumptions

Occupancy rate of
JPR Nagoya Fushimi
Building
Occupancy rate ofTokyo Tatemono
Honmachi Building[Asset Manager] Tokyo Realty Investment Management, Inc.
Investment Management
Division
Asset Management Group＋
Leasing project team

Formed a leasing project team at the Asset Manager
Reinforce cooperation with property managementcompanies to further accelerate collection of information
Handle brokerage by mediators and conduct direct
marketing to tenants

Synergy of the comprehensive capabilities of Tokyo Tatemono anddirect leasing by the Asset Manager[Property Management Assignee] Tokyo TatemonoTokyo Tatemono Co., Ltd., the main sponsor of the Asset Manager andthe assignee of property management operations, conducts property
management services for 220 buildings on a consignment basis, andhas tenant information accumulated in association with its large-scale
Property Management
property development projects.
The Asset Manager promptly handles and responds according to
Kansai Branch and Nagoya Branch accumulated tenant information and tenant needs by reinforcing
cooperation between its leasing project team and Tokyo Tatemono.

Leasing Promotion

20.0%

0.0%

Negotiations are under way with multiple companies
Tenants hope to occupy at least 4,000m2 in total(which should contribute to the occupancy rate by atleast 50%)

26

Appendix

18thPerformance over the Past Five Fiscal Periods
Change in Distributions per Unit (DPU) and FFO per Unit

Operating Revenue, Operating Income and Net Income(JPY)(JPY mn)

14th Period

15th Period

16th Period

17th Period

18th Period

14th Period 15th Period 16th Period

Operating
Revenue

11,171

14,33011,493

12,314

11,870FFO Per Unit(1)(2)

9,977

10,015

9,892

8,952

8,347

Operating Income

5,482

6,568

5,827

6,484

5,886

DPU (1)

7,092

3,731

6,933

6,770

5,680

Net Income

4,432

2,331

4,332

4,963

4,039

Number of Units
Outstanding

625,000

625,000

625,000

715,000

715,000(1) DPU and FFO per unit are calculated by dividing distributions and FFO by the total units outstanding as of the end of each fiscal period.
(2) FFO per unit = (Net income - Gains on sale of real estate - Gains on sale of investment securities - Extraordinary revenues and expenses + Depreciation + Other real estate-related depreciation) / Total
units outstanding

17th Period 18th Period

28

Historical Unitholder Composition (Number of Units by Investor Type)In the numbers of units held and unitholders, foreign investors and individuals decreased while domestic
financial institutions increased (primarily trust banks)
800,000

715,000

715,000

206,019

200,030

28.8%

28.0%

82,846

82,627

11.6%

11.6%

Number ofUnitholders
14,977（-220）

700,000
Unit s Outstanding
625,000

625,000

625,000

625,000

625,000

625,000

600,000
530,000

500,000

152,632

153,613160,245

155,403

165,224

22.1%

24.4%

24.6%

25.6%

24.9%

26.4%

71,947
13.6%
73,381400,000

138,141

74,598
11.9%

73,68674,05775,986

77,100

11.8%

11.8%

12.2%

12.3%

13.8%

77,207

270
（-5）

236
（-8）

Foreign Investors
Other Domestic Companies

12.4%

Financial Institutions
Individuals
300,000

200,000

100,000

0

120
（+3）

353,294

372,062

379,092

52.0%

53.0%

353,212343,353344,227

56.5%

56.5%

54.9%

55.1%

53.1%

155,575
24.9％

163,24226.1％

168,91027.0％

172,655
27.6％

173,280
27.7％

184,30829.5％

226,535
31.7％

234,02532.7％

50,975
9.6%

52,723
8.4%

45,388
7.3%

44,1187.1%

45,416
7.3%

48,2707.7%

50,5608.1%

54,073
7.6%

53,251

Dec. 2006

Jun. 2007

Dec. 2007

Jun. 2008

Dec. 2008

Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

10th Period

11th Period

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period

333,697359,538

63.0%

57.5%

129,658
24.5％

332,009
Of which, 9
are trust
banks
（+1）

7.4%

14,351（-210）(Note 1) The composition ratios in the above graph have been rounded to the first decimal place.
(Note 2) Figures in parentheses in the graph represent the number of investment units owned by trust banks within the category of financial institutions (including securities companies).

29

Principle Unitholders

18th Fiscal Period (Ended December 2010)

Name

Number of Units
Owned

17th Fiscal Period (Ended June 2010)% of Units
Outstanding*

Name

Number of Units
Owned% of Units
Outstanding*Japan Trustee Services Bank, Ltd. (Trust
Account)

100,081

13.99%

Japan Trustee Services Bank, Ltd. (Trust
Account)

74,75110.45%The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

66,494

9.29%

NCT Trust and Banking Corporation(Investment Trust Account)

52,809

7.38%

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)38,185

5.34%

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

41,216

5.76%

Tokyo Tatemono Co., Ltd.

29,300

4.09%

Tokyo Tatemono Co., Ltd.

29,300

4.09%

Northern Trust Company (AVFC), Account Singapore
Clients (Standing Proxy: The Hongkong and Shanghai
Banking Corporation Ltd., Tokyo Branch)

27,258

3.81%

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

28,211

3.94%

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

25,269

3.53%

Northern Trust Company (AVFC), Account Singapore
Clients (Standing Proxy: The Hongkong and Shanghai
Banking Corporation Ltd., Tokyo Branch)

27,324

3.82%

Kawasaki Gakuen

25,000

3.49%

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

25,796

3.60%

Meiji Yasuda Life Insurance Company

24,0003.35%

Kawasaki Gakuen

25,0003.49%

AIG Star Life Insurance, Co., Ltd.
(general account）（Standing Proxy: Citibank
Japan Ltd.）12,982

1.81%

Meiji Yasuda Life Insurance Company

24,0003.35%

The Senshu Ikeda Bank, Ltd.

11,448

1.60%

AIG Star Life Insurance, Co., Ltd.
(general account）（Standing Proxy: Citibank
Japan Ltd.）13,1901.84%

360,01750.35%

Total

341,597

47.77%

Total(Note) For the percentages of units outstanding, figures after the second decimal place have been rounded off.

30

Milestones Since IPO and Historical Unit Price
Unit Price (closing): JPY 224,700 (Feb. 10, 2011)
All-Time High (trading): JPY 564,000 (May 7, 2007)
All-Time Low (trading): JPY130,300 (Oct. 28, 2008)

Add-on Offering
Feb. 7, 2007
Offering Price: JPY 449,820
Unit Issued/Sold: 95,000（JP
550,000
530,000
510,000
490,000

2007 Add-on Offering Price

470,000
MSCI Standard Index
Introduced on May 13,
2005

450,000
430,000

Add-on Offering
Feb. 9, 2010
Offering Price: JPY 168, 101
Unit Issued/Sold: 90,000

410,000
Add-on Offering
Feb. 2, 2005
Offering Price: JPY 272,440
Unit Issued/ Sold: 100,000

390,000
370,000
350,000
330,000
310,000
290,000

Listed on Tokyo Stock Exchange
Jun. 14, 2002
Offering Price: JPY 200,000
Unit Issued /Sold: 182,000

2005 Add-on Offering Price

270,000
250,000

2003 Add-on Offering Price

230,000
210,000

Add-on Offering
Jul. 15, 2003
Offering Price: JPY 237,160
Unit Issued/Sold: 144,400

190,000
170,000
150,000

2002 IPO Offering Price2010 Add-on Offering Price

130,000
Jun.
2002
Fiscal Period 1st Period

DPU

JPY2,545

Dec.
2002

Jun.
2003

Dec.
2003

Jun.
2004

Dec.
2004

Jun.
2005

Dec.
2005

Jun.
2006

Dec.
2006

Jun.
2007

Dec.
2007

Jun.
2008

Dec.
2008

Jun.
2009

Dec.
2009

Jun.
2010

Dec.
2010

2nd Period

3rd Period

4th Period

5th Period

6th Period

7th Period

8th Period

9th Period

10th Period

11th Period

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period

JPY6,912

JPY6,873

JPY5,738

JPY6,081

JPY6,671

JPY6,370

JPY6,411

JPY6,509

JPY6,873

JPY6,996

JPY6,671

JPY7,122

JPY7,092

JPY3,731

JPY6,933

JPY6,770

JPY5,680

31

Changes in Variation Between Appraisal Value and Book Value at End of Period
Net assets per unit after including variation between the appraisal value and book value (unrealized
gains or losses) were 223,082 yen (Note 1)

7th Period

8th Period

9th Period

10th Period 11th Period 12th Period 13th Period 14th Period 15th Period 16th Period 17th Period 18th Period

Jun. 2005

Dec. 2005

Jun. 2006

Dec. 2006

Number of properties

Jun. 2007

Dec. 2007

Jun. 2008

Dec. 2008

Jun. 2009

Dec. 2009

Jun. 2010

Dec. 2010

42

42

44

46

48

49

50

52

51

53

55

56

Appraisal value at end of
period (JPY mn)

191,905

210,601

224,773249,366

285,176

299,995

322,984

311,513300,509

301,979

308,134

315,806

Book value (JPY mn)

195,773

200,019

205,543

218,123240,546

246,002

268,506

273,323

292,607

303,090322,804

331,804-3,868

10,582

19,23031,243

44,63053,99354,47838,190

7,902-1,111-14,670-15,998-2.00%

5.30%

9.40%

14.30%

18.60%

21.90%

20.30%

14.00%

2.70%-0.40%-4.50%-4.82%

Variation (unrealized
gains: JPY mn)
Ratio of unrealized gains
or losses (Note 2)(Note 1) Net assets per unit after including unrealized gains = (Net assets at end of period + Unrealized gains or losses) / Number of outstanding units issued at end of period(Note 2) Ratio of unrealized gains or loss = Variation / book value x 100(JPY mn)

Variation (unrealized gains or losses)

60,00053,99350,00054,47844,63038,19040,00031,24330,00019,23020,000

10,582

10,0000

7,902-3,868-14,670-15,998

Jun. 2010

Dec. 2010

16th Period 17th Period

18th Period-1,111-10,000-20,000
Jun. 2005

Dec. 2005

Jun. 2006

Dec. 2006

Jun. 2007

7th Period

8th Period

9th Period

10th Period 11th Period

Dec. 2007

Jun. 2008

12th Period 13th Period

Dec. 2008

Jun. 2009

14th Period 15th Period

Dec. 200932

Appraisals and Cap Rates at End of Period
End of 18th Period
No.

Property Name

End of 17th Period

Appraisal Value

Cap Rate

Appraisal Value

Cap Rate(Note 2)

(Note 3)(Note 2)

(Note 3)

AppraiserKanematsu Building
2 Kanematsu Building Annex
JPR Ningyo-cho Building
3
Shin-Kojimachi Building
4
5 JPR Crest Takebashi Building
MS Shibaura Building
6
Gotanda First Building
7
Fukuoka Building
8
JPR Ichigaya Building
9
10 Oval Court Ohsaki Mark West
Shinjuku Square Tower
11
BYGS Shinjuku Building
12

10,200,000

4.8%

10,300,000

4.8%

3

2,290,000

5.1%

2,310,000

5.1%

32,320,000

5.3%

2,380,000

5.3%

3,090,000

5.0%

3,090,000

3,440,000

4.8%

14,700,000

13 Across Shinagaw a Building Annex

1

14
15
16
17
18

Shinjuku Center Building
Minami Azabu Building
Shinagawa Canal Building
Rokubancho Building
Ryoshin Harajuku Building

19 Tokyo Tatemono Kyobashi Building
20 JPR Nihonbashi-horidome Building
21

JPR Sendagaya Building

22 JPR Shibuya Tower Records Building

51

1

5,940,000

5.2%

5,940,000

5.2%

8

5.0%

1

41

Musashiuraw a Shopping Square

3,910,000

5.4%

3,890,000

5.4%

83,530,000

4.8%

514,664,000

4.7%

14,664,000

4.7%

7

5.0%

14,800,000

5.0%

1

Kawasaki Dice Bldg.
43 Niigata Ekinan Center Building

2,090,000

6.7%

2,090,000

6.7%

2

2,780,000

5.1%

2,850,000

5.1%

1

44 Tokyo Tatemono Honmachi Building

2,960,000

6.2%

3,030,000

6.0%

1

3,240,000

4.6%

3,240,000

4.6%

5

45

6.0%

2,940,000

6.0%

2

4.7%

4,970,000

4.7%

5

46

1,540,000

6.8%

1,600,000

6.8%

2

4,320,000

4.8%

4,320,000

4.8%

5JPR Hakata Building
JPR Naha Building
47 Sompo Japan Sendai Building

2,940,000

4,840,000

3,260,000

6.3%

3,350,000

6.4%

1

8,659,000

4.6%

8,912,000

4.6%

6

48

Sompo Japan Wakayama Building

1,770,000

7.5%

1,800,000

7.5%

1

13,800,000

4.7%

9,930,000

4.8%

5

49

5.7%

2,460,000

5.7%

1

5.6%

863,000

5.6%

5

50

2,270,000

5.4%

2,370,000

5.4%

1

12,600,000

4.3%

13,100,000

4.3%

1

1,790,000

5.7%

1,820,000

5.7%

12,830,000

5.0%

2,880,000

5.1%

12,490,000

6.3%

2,510,000

6.5%

41,680,000

5.1%

1,620,000

5.1%

1

Tenjin 121 Building
JPR Dojima Building
JPR Hakata-chuo Building
51
52 JPR Nagoya Fushimi Building
JPR Umeda Loft Building
53

2,340,000

863,000

14,000,000

4.8%

14,000,000

4.8%

6

3,030,000

6.1%

3,020,000

6.1%

1

54 Benetton Shinsaibashi Building

4,530,000

4.8%

4,630,000

4.8%

47,610,000

4.5%

7,570,000

4.5%

855 Housing Design Center Kobe

6,390,000

6.3%

6,550,000

6.3%

45,120,000

5.0%

5,120,000

5.0%

1

56

4,690,000

5.0%

4,650,000

5.0%

45,780,000

4.9%

5,900,000

4.9%

8

Total

315,806,000-

308,134,000-

10,600,000

4.4%

10,900,000

4.3%

8

12,600,000

4.5%

12,600,000

4.5%

1

(Note 2) At end of period (1,000 yen)
(Note 3) Direct Capitalization Method

3

3.5%

7

25

Shinjuku Sanchome East Building

2,350,000

4.5%

2,350,000

4.5%

1

26

Yurakucho Ekimae Building (Yurakucho Itocia)

2,660,000

4.2%

2,660,000

4.2%

1

27

Arca East
JPR Chiba Building

5,570,000

4.8%

5,530,000

4.8%

1

36

37 Tokyo Tatemono Yokohama Building(Note 3)
5.9%

5.0%

Rise Arena Building
Yume-ooka Office Tower
Olinas Tower(Note 2)5.8%

4,000,000

35(Note 3)2,480,000

1,310,000

34(Note 2)

Apprais
er

5.9%

3.5%

33 Tachikaw a Business Center Building

Cap Rate

2,480,000

5.0%

Kawaguchi Center Building
JPR Ueno East Building

Appraisal Value
12,200,000

3,800,000

32

Cap Rate
5.8%

1,300,000

31

End of 17th Period

Appraisal Value
12,200,000

JPR Daikanyama
JPR Jingumae 432

28
29 JPR Yokohama Nihon Odori Building
30 Shinyokohama 2nd Center Building

Property Name

Tanashi ASTA
Cupo-la Main Building
39
40 JPR Musashikosugi Building

24

23

End of 18th Period
No.
38

42

JPR Chayamachi Building

Properties whose appraisal values decreased by 5% or morecompared with those at the end of the 17th period
Properties whose appraisal values increased compared withthose at the end of the 17th period

1,550,000

6.1%

1,550,000

6.1%

5Appraiser

2,460,000

5.7%

2,460,000

5.7%

5790,000

6.2%

775,000

6.2%

38,800,000

6.1%

9,420,000

6.1%

3

4,600,000

5.2%

4,920,000

5.2%

1Japan Real Estate InstituteTanizawa Sogo Appraisal
Nippon Tochi-Tatemono
CB Richard Ellis

2,880,000

5.7%

3,190,000

5.7%

1Daiw a Real Estate Appraisal Co., Ltd.

55,730,000

5.6%

5,740,000

5.6%

4

5.6%

5,550,000

5.6%

132,100,000

4.8%

31,500,000

4.8%

1

LCR
A SquareJapan Valuers

6

5,540,000
7,030,000

5.6%

-

-

1

No.
1
2
3
4

7
8

(*1) The Direct Capitalization Method is a method for determining income using the capitalization method (a method that determines the price of targeted real estate by determining the sumof the current price of the net income that the targeted real estate is expected to produce in the future), which discounts the net income for a set period using the cap rate.

(*2) JPR is now the sole owner of BYGS Shinjuku Buildings as a result of acquiring additional 25% co-ownership conducted in the 18th fiscal period.

33

NOI Yield by Property for the 18th Fiscal Period (Tokyo CBDs)

OfficePortfolio NOI

5.1%

Office building NOI

5.0%

Retail property NOI

5.2%

Retail property(Note) NOI yield = (Operating revenues - Operating expenses + Depreciation) x 365 / 184 ÷ Acquisition price. However, for properties acquired during the fiscal period, the annualized NOI yield has been calculated on a daily pro
rata basis. The entered properties are those owned as of the end of the 18th fiscal period.

34

NOI Yield by Property for the 18th Fiscal Period (Greater Tokyo)
12.0%

9.9%

10.0%

9.5%

8.0%

Portfolio NOI

5.1%

Office building NOI

5.0%

Retail property NOI

5.2%

7.4%
6.9%
6.1%

6.2%

6.4%

6.2%
5.9%

6.0%
4.5%

4.5%

Arca East

JPR Chiba Building

5.3%

5.1%
4.6%

4.6%

4.4%

4.0%

2.0%

OfficeKawasaki Dice Bldg.

Musashiurawa Shopping Square

JPR Musashikosugi Building

Cupo-la Main Building

Tanashi ASTA

Tokyo Tatemono Yokohama
Building

Olinas Tower

Yume-ooka Office Tower

Rise Arena Building

Tachikawa Business Center
Building

JPR Ueno East Building

Kawaguchi Center Building

Shinyokohama 2nd Center
Building

JPR Yokohama Nihon Odori
Building

0.0%

Retail property(Note) NOI yield = (Operating revenues - Operating expenses + Depreciation) x 365 / 184 ÷ Acquisition price. However, for properties acquired during the fiscal period, the annualized NOI yield has been calculated on a daily pro
rata basis. The entered properties are those owned as of the end of the 18th fiscal period.

35

NOI Yield by Property for the 18th Fiscal Period (Other Cities)
12.0%

10.0%

Portfolio NOI

5.1%

Office building NOI

5.0%

Retail property NOI

5.2%

8.5%
7.7%

8.0%

7.8%
7.5%

7.1%

5.9%

6.0%

5.9%

5.7%
5.4%

4.3%

4.1%
3.8%

4.0%

3.0%

Retail property

OfficeOsaka

OfficeOfficeOfficeOfficeNagoyaFukuoka

SendaiOther Cities

JPR Naha Building

Sompo Japan Wakayama Building

Niigata Ekinan Center Building

Sompo Japan Sendai Building

JPR Hakata-Chuo Building

Tenjin 121 Building

JPR Hakata Building

JPR Nagoya Fushimi Building

JPR Chayamachi Building

Housing Design Center Kobe

Benetton Shinsaibashi Building

JPR Dojima Building

Tokyo Tatemono Honmachi Building

0.0%

JPR Umeda Loft Building

2.0%(Note) NOI yield = (Operating revenues - Operating expenses + Depreciation) x 365 / 184 ÷ Acquisition price. However, for properties acquired during the fiscal period, the annualized NOI yield has been calculated on a daily pro
rata basis. The entered properties are those owned as of the end of the 18th fiscal period.

36

Contracting Status of Tenants by Property for the 18th Fiscal Period
Net Increase / Decrease of Floor Space by Property(Occupied-Vacated)

Occupied / Vacated Floor Space by Property(Unit: m2)(Unit: m2)
2,737
2,737

Kanematsu Bldg.

-0

JPR Nigyo-cho Bldg.

-1,129Shin-Kojimachi Bldg.

-294

MS Shibaura Bldg.

230
499

Tokyo

-102

CBDs

-156

505
230

JPR Ichigaya Bldg.

499

BYGS Shinjuku Bldg.

354
456
282
438
629
629

Shinjuku Center Bldg,
JPR Nihonbashi-horidome Bldg.

0

1,129
211

1,271

JPR Sendagaya Bldg.

1,271

JPR Jingumae 432

0

235
235

Arca East-1,033

1,033

JPR Chiba Bldg.

100

Shinyokohama 2nd Center Bldg.

217

Greater

633
881

Tokyo

Kawaguchi Center Bldg.
JPR Ueno East Bldg.
Tachikawa Business Center Bldg.

448

Yume-ooka Office Tower

267

Niigata Ekinan Center Bldg.

57

522
422
347
130
633
2,023
552
542
276
96
39

2,904

1,001

Tokyo Tatemono Honmachi Bldg.

-6,038JPR Hakata Bldg.

220

JPR Naha Bldg.

-82
-631
407

Other

Sompo Japan Sendai Bldg.

cities

Sompo Japan Wakayama Bldg.

-143
-407

437
245
288
431

JPR Hakata-chuo Bldg.

407
3,904

JPR Nagoya Fushimi Bldg.

-3,209-6,500 -6,000 -5,500 -5,000 -4,500 -4,000 -3,500 -3,000 -2,500 -2,000 -1,500 -1,000 -500

JPR Dojima Bldg.

Tenjin 121 Bldg.

192

6,038
392
172
257
339
11
642
407

0

500

1,000

1,500

-500

500

1,500

2,500

3,500

7,113

4,500

5,500

6,500

7,500

(Unit: m2)*The above graphs exclude properties at which there were no changes in tenants during the 18th fiscal period, but include
changes in tenants from the amendment of lease contracts.

Occupied

VacatedNet

Office (Tokyo CBDs)

6,213

5,894

319

Office (Greater Tokyo)

5,948

4,436

1,513

Office (Other cities)

5,792

15,425-9,633Retail

235

235

0

Total

18,18825,989-7,80137

Office Vacancy Rates and Average Advertised Rents in Major Investment Areas
Advertised rents

Vacancy rate

(Rents are average advertised rents for relevant periods. Vacancy rates are those as of the end of each fiscal period for relevant periods.)

23 Wards of Tokyo

5 Wards of Tokyo(JPY/Tsubo)

Yokohama City
(JPY/Tsubo)(JPY/Tsubo)
12%

20,000

Osaka City

12%

20,00020,000

14%
12.6

7.5

7.7

10.3
9.5

9.4

7.7

8.9

8%

7.0
5.7

6%

7.8

10,000

8%
7.1

8.2

6.1
10,000

10%

8.7

6.6

6.5
6.0
6%

10.6

10%
7.5

8%

6.9
6.1

12%

15,000

7.0

10,00011.5 12%
11.0

10.4

10%
15,00015,000(JPY/Tsubo)

12.2

11.5

10%

15,00010,000

6.6

8%

7.0

6.6

6.2
5.7

6%

6%
4.2

(JPY/Tsubo)
13.8 13.7

13.9

14%

10%

6.3

9.7

10,000
8

7.7

8%
5.9

10%

5,000

9,060

9,110

8,800

2008

2009

8,370

9,050

2007

8,450

8,970

2006

2010Q4

20%

7.9

16%
10%

10,000

8.3

11.6
8%

7.0

14%

12.7

8.1

8.0

6.9

8%

18%

9.9

9.0

10,000

10.3

11.8

11.5

10.7

12%
9.4

6%

10%

8.4 8.6

6%

5.2

8%
5,000

5,000

5,000

4%

4%

2%

2%

0%

19.8

11.2 11.4 12%

6.3
6%

2010Q3

9,190

2005

9,620

2004

10,2309,920

10,3402010Q4

2003

10,8202010Q3

10,46011,3002009

2002

10,950

2008

10.9

12%

7.0

6.1

10,90010,940

2007

11.9
11.4

8.6

7.4

20.6

(JPY/Tsubo)
15,000
18.3

11.8

8.3

8.2

2001

10,930

2006

14%

9.6

8.7

2000

11,19015,00014.3 14.2
14%

12%

8.2

0

Sendai City

(JPY/Tsubo)

15,00012.4

10,0000%

Sapporo City

(JPY/Tsubo)

15,0002005

13,18011,57013,4602010Q4

Fukuoka City

2004

14,4702010Q3

11,76015,2602009

2003

14,2302008

12,12013,500

2007

0

2002

13,470

2006

0%

2%

2%
12,35013,78014,100

Nagoya City

2%

2005

14,43012,6702003

12,9302010Q4

14,77013,8402010Q3

2002

14,5202009

15,01013,590

2008

0

2001

13,050

2007

0%

4%

5,000
1.7

2000

13,0302006

13,6402003

13,32013,940
2002

2005

14,2202001

2004

14,400
2000

0

4%

5,000

3.4

2.3

2%

4.2

4%

3.2
5,000

1.7

4.4

3.6

2001

2.6

5,000

3.6

4%

3.3

2000

4.0

2004

4.3
3.8

6%

4%

9,740

9,390

9,260

9,120

9,150

9,250

8,830

8,720

8,590

2003

2004

2005

2006

2007

2008

2009

2010Q3

2010Q4

7,570
2010Q4

9,980

7,640
2010Q3

2002

7,770
2009

10,210

8,080
2008

2001

8,370
2007

10,430

8,520
2006

0%

0

2000

8,570

8,970
2010Q42005

9,020
2010Q3

8,650

9,310
2009

2004

9,600
2008

8,840

9,550
2007

2003

9,530
2006

9,370

9,840
2005

2002

10,1102004

9,310

10,1602003

9,550

10,510
2002

0

2001

10,6400%

2000

10,690

0

2001

0%

2000

9,530
2010Q49,510
2010Q3

9,610
2009

9,690
2008

9,580
2007

9,570
2006

9,570
2005

9,690
2004

9,880
2003

9,990
2002

10,120
2001

2000

0

10,180

4%
2%

2%
0%

38

Overview of the Asset Manager
Tokyo Realty Investment Management, Inc.
 Provide opportunities for property
acquisitions
 Provide information on property
acquisitions and property sales
 Conduct tenant leasing
 Conduct property management
 Provide know-how in technicalsupportTake advantage of the strengths of the respective
sponsors

 Support establishing financial strategies
 Provide funds through debt financing

The asset manager takes full advantage of thestrengths in the areas of real estate and constructionof Tokyo Tatemono Co., Ltd., Taisei Corporation and
Yasuda Real Estate Co., Ltd., and the strengths heldby Meiji Yasuda Life Insurance Company and Sompo
Japan Insurance Inc. as financial institutions, while
also utilizing the know-how of the respective sponsors
and conducting operations in a well-balanced manner.

Tokyo Tatemono Co., Ltd.

Taisei Corporation

Yasuda Real EstateCo., Ltd.

Meiji Yasuda Life
Insurance Company

Sompo Japan
Insurance Inc.

40%

20%

20%

10%

10%

* Figures represent the ratio of shares owned by the respective sponsors against the number of shares outstanding of the Asset Manager.

Corporate governance system of the Asset Manager
Transaction projects with interested parties

The Asset Manager has established a rigorous monitoring system concerningtransaction projects with interested parties of the investment corporation, suchas property acquisitions from the sponsors, through internal and external
checks and controls.

 Acquisition and sale of properties and individual assets
 Consignment of property management
 Brokerage or proxy of transactions
 Placement of orders for construction (construction works

costing over 10 million yen)

1st Check Leasing of properties

Compliance Committee

Verification to be made in advance, with the participation of outside lawyers,
on the appropriateness and rationality of transactions

Verification in advance
Decision-making institutions

5 full-time directors （including one Compliance Officer ） + Outside lawyers(special members of the Committee)

Board of Directors’ Meeting of the Investment Corporation
2nd Check
Transactions with interested parties to be approved in advance by directors
who are independent from shareholders of the Asset Manager

Board of Directors’Meetingor

Respective
committees

Approval in advance
Implement transactions of strictly selected
projects only

39

Disclaimer Regarding Forward-Looking Statements

This material contains information that constitutes forward-looking statements. Such forward-looking
statements are made by Japan Prime Realty Investment Corporation and Tokyo Realty Investment
Management, Inc. based on information currently available, and are therefore not guarantees of future
performance. Actual results may differ materially from those in the forward-looking statements as aresult of various factors including known or unknown risks and uncertainties.
This material is solely for the purpose of providing information and it is not intended for the purpose ofoffering or soliciting investment, or as a recommendation to purchase or sell any specific product.
Please refer any inquiries for possible purchases of units or other products of Japan Prime Realty
Investment Corporation to a securities dealer.
Although Japan Prime Realty Investment Corporation takes all possible measures to ensure theaccuracy of the content provided in this material (including references to legislation and taxation), it
makes no guarantee as to the accuracy of the content. Furthermore, the content may be subject tochange without prior notification.
Please further note that this English material is a provisional translation of the original Japanesematerial.

40