Tokyo Realty Investment Management, Inc.

Japan Prime Realty Investment Corporation
Company Presentation

Japan Prime Realty Investment Corporation(Securities Code: 8955 TSE)
URL: http://www.jpr-reit.co.jp/jpr_e/Mar. 2008

Profile of Japan Prime Realty Investment Corporation

Profile Overview(as of January 31, 2008)
Ticker: 8955 (Tokyo Stock Exchange)
Market Cap.
: JPY 208.7 bn
Asset Size (based on acquisition price): JPY 251.9 bn
Investment Target (type): Office: 80%; Retail: 20%
Investment Target (area): Tokyo: 60%; Other Selected Cities: 40%
Real Estate Indices: MSCI Japan Index, TSE REIT Index, GPR, EPRA/NAREIT
Credit Rating: R&I: AA-; Moody’s: A2; S&P: A

Asset Management Company

Market Cap. of Major Diversified J-REITs

Tokyo Realty Investment Management (TRIM)(as of January 31, 2008)(JPY bn)250

Sponsors (Shareholders of Asset Management Company)

209
200

Tokyo Tatemono (8804:TSE)
Meiji Yasuda Life

Real Estate

26%

Insurance

24%

Taisei Corp. (1801:TSE)

Construction

20%

Yasuda Real Estate

Real Estate20%

Sompo Japan Insurance(8755:TSE)

Insurance

10%

159

152
140

150

137
117

116
104
93

100

82

78

75

PIC

TOP

FKR

50

JPR

OJR

MTR

TRE

KRI

JER

NCI

UUR

MHR

Top Ranked Diversified J-REIT with Strong Sponsor Capability
Japan Prime Realty Investment Corporation 2

Financial Results and Forecast
8th Period(JPY mn)

9th Period

10th Period

11th Period

12th Period

Ended Dec. 2005 Ended June 2006 Ended Dec. 2006 Ended June 2007

Ended Dec. 2007

13th Period (E)Ending June 2008
(E)

Operating revenues

8,587

8,588

9,088

10,056

10,44910,490Operating profits

3,984

4,024

4,373

5,108

5,006

4,997

Net income

3,398

3,449

3,642

4,372

4,169

4,218

DPU (JPY)

6,411

6,509

6,873

6,996

6,671

6,750

FFO

4,715

5,010

5,222

5,524

5,978

6,017

FFO per unit (JPY)

8,896

9,453

9,853

8,839

9,566

9,627

Total units outstanding (Units)

530,000

530,000

530,000

625,000

625,000

625,000

LTV (%)

44.1%

45.8%

48.7%

37.2%

38.9%

38.9%

Total assets

225,882

231,523

244,691

271,398

278,842

-

42

44

46

48

49

49

96.1%

97.7%

98.3%

99.0%

98.7

97.8%

Number of properties
Average occupancy rate (%)

12th Fiscal Period (2nd half 2007) Results

13th Fiscal Period (1st half 2008) Forecast (as of Feb. 2008)

9 5 properties acquired in the 11th Fiscal Period contributing to
the 12th Fiscal Period

9Achieving higher rents with exiting tenants.

- Tachikawa Business Center Bldg. (additional ownership), Shinjuku
Sanchome East Bldg., Rise Arena Bldg., Musashiurawa Shopping Squareand Kawasaki Dice Bldg. (JPY 28.0 bn)

9 1 property newly acquired in the 12th Fiscal Period

9Penalty revenue from the tenant despite the cancellation
at Strasse Ichibancho.

- Yume-ooka Office Tower (JPY 6.5 bn)

9 Achieving higher rents with exiting and new tenants.

9Total units outstanding is based on 625,000 units.

Steady Increase in Revenues, FFO, and Net Income____________________
Note: FFO = Net Income + Depreciation and Amortization – Capital Gains (Losses) from Disposal of Properties
DPU and FFO per unit are calculated using the number of units outstanding as of the end of each fiscal period.
LTV = Interest Bearing Debt ÷ (Interest Bearing Debt + Unitholders’ Capital) × 100

Japan Prime Realty Investment Corporation 3

JPR’s Market Recognition History
More than JPY 200 bin. In Market Cap. through Internal and External Growth(as of January 31, 2008)(Unit Price)(JPY)
600,000(Market Cap)(JPY bn)

IPO
June 14, 2002
182,000 units

3rd AddAdd-on Offering
Feb. 7, 2007
95,000 units

2nd AddAdd-on Offering
Feb. 2, 2005
100,000 units

500

450

May 13, 2005
MSCI Japan Index

500,000

400

Add-on Offering Price:
JPY 449,820 (2007)

300,000

200,000

350

AddAdd-on Offering
July 15, 2003
144,400 units

400,000

300

Add-on Offering Price:
JPY 272,440 (2005)

250

Add-on Offering Price:
JPY 237,160 (2003)

200

IPO Offering Price:
JPY 200,000 (2002)

150

100
100,000
500
Jun.02

Dec.02

Jun.03

Dec.03

Jun.04

Dec.04

Jun.05

Dec.05

Jun.06

Dec.06

Jun.070
Dec.07

Japan Prime Realty Investment Corporation 4

Towards a Target Portfolio Size of Over 300 Billion Yen
Striving for a Target Portfolio Size of 300 Billion Yen while Maintaining a Prudent Investment Policy

JPY 300 bn

The portfolio size on acontracted basis as ofJanuary 31, 2008 is 263
billion yen (51 properties)

Portfolio Size
(Acquisition price basis)

JPY 37 bn
48 Buildings
JPY 245.3 bn

Office (Tokyo CBDs and Greater Tokyo)
Office (Other Cities)

Stable external growth

Retail Facilities
Sale of Property(44.1)(45.6)(17.6)(17.1)(38.3)(37.3)(45.0)(47.9)(50.2)(47.3)(24.5)(44.0)(31.4)(29.3)(27.4)(23.4)(22.3)(21.6)(26.7)(42.0)(26.4)(22.5)(25.3)(28.3)(30.5)(34.6)(14.0)

June 2002 Dec. 2002 June 2003 Dec. 2003 June 2004 Dec. 2004 June 2005 Dec. 2005 June 2006 Dec. 2006 June 2007 Dec. 2007
Total properties sold: 8 properties totaling JPY 14.4 bn

Jan.
2008

Improvementof quality(14.4)(20.4)(42.0)(31.6)(42.1)(50.8)(41.2)

25 Buildings
JPY 92.1 bn

Share(43.5)(49.4)____________________
Note: JPR listed on June 14, 2002. Portfolio size is based on acquisition prices, including the Konan 2cyome Building (tentative name) to be acquired, the KM Fukugo Building(tentative name) to be acquired ,not including the Meieki 2cyome Kaihatu TMK preferred securities acquired in November 2007 and to be acquired in the future.

Japan Prime Realty Investment Corporation 5

Acquisition in 12th Fiscal Period and After (Planned)
YumeYume-ooka
Office Tower

Konan Nichome Bldg.
(tentative name)

KM Fukugo Bldg. Project(tentative name)Retail Building- Redevelopment Project -- Redevelopment Project -Meieki Nichome Kaihatsu
SPC Preferred Securities- Redevelopment Project -*Redevelopment project by Tokyo Tatemono Co, Ltd.
with buildings to be completed in April 2009

OfficeOfficeAcquisition Date(planned)

July 2007(Acquired)

Acquisition Price(planned)

JPY 6.51 bn

Type of Use







RetailOfficeDecember 2008

March 2009(contracted in October 2007)(contracted in March 2007)(1) November 2007 (acquired) /(2) May 2009 (Note 1) / (3) April 2010 (Note 1)

JPY 1.87 bn

JPY 9.25 bn(1) JPY 0.34 bn /(2) JPY 1.643 bn / (3) TBD

JPY 5.81 bn

JPY 1.89 bn

JPY 9.27 bn

JPY 33.7 bn (Note 2)

Yokohama-shi, Kanagawa

Minato-ku, Tokyo

Osaka-shi, Osaka

Nagoya-shi, Aichi

Co-ownership (19.7%)

Co-ownership (45.6%)

Ownership (21.42%)

Unit ownership

Unit ownership

Unit ownership

Preferred equity ratio (acquired and planned )[total 40%]
(1) 3% / (2) 12% / (3) 25%(ratio after additional preferred equity planned
for April 2009)

Appraisal Value(at acquisition or contract)

Location

Ownership Land
Bldg.



Expected NOI (%)

4.8%

4.8% (appraisal cap rate)

4.3% (appraisal cap rate)－Seller (planned)

The City of Yokohama

Tokyo Tatemono Co., Ltd.

Sanyo Homes Co., Ltd.,
Haseko Corporation and 8other companies(1) And (2): Shimizu Corporation /(3) Marubeni Corporation

Continuing to Secure Acquisitions of BlueBlue-Chip Properties Mainly through Sponsor Company’Company’s Redevelopment Projects (JPY 19.613 bn in Total)____________________(Note 1) The preferred securities of Meieki Nichome Kaihatsu SPC are to be acquired in three steps. (1) JPR already acquired the 3% equity in November 2007. (2) JPR concluded purchase agreements for the 12% equityand (3) the 25% equity in November 2007. The (2) and (3) portions will be acquired in May 2009 and April 2010, respectively. (Note 2) The figure is the appraisal value of the real estate that backs the preferred securities of
Meieki Nichome Kaihatsu SPC.

Japan Prime Realty Investment Corporation 6

Collaboration with Sponsors and Efforts on Development Projects
Acquisitions through Sponsor Pipeline (Note 1)

SponsorSponsor-Development Project Investment Example（Project developed by Tokyo Tatemono: Nagoya Prime Central Project)
Project)

Acquisition from sponsors
Meieki Nichome Kaihatsu TMK

OtherCash Equivalents:\0.5 billion
Property(88.623% of the Nagoya
Prime Central Project(Office Building)):\33.7 billion

Liabilities(specified corporation
bonds/ borrowings for
special purpose):\20.5 billion
Preferred Securities
Preferred capital
contribution

Brokerage by sponsors

JPR
Other Preferred
Securities Holders

40.0%(planned)
60.0%

Specified investment:\100,000JPR
JPR acquired
acquired 32%
32% ofof allall properties
properties itit acquired
acquired
betweenbetween thethe 1st
1st fiscal
fiscal period
period andand thethe endend ofof thethe
12th
12th fiscal
fiscal period
period (including(including properties
properties thatthat have
have(Note 1)been
been sold
sold (Note 1))) fromfrom sponsors,
sponsors, totaling
totaling about
about 86.1
86.1
billionyen.
Thefigures
rise
to
60%
and
about
billion yen. The figures rise to 60% and about 159.9
159.9
billionbillion yen
yen ifif combined
combined with
with projects
projects brokered
brokered bybysponsors.
sponsors.

■Investment Merits
・Avoids
・Avoids excessive competition, as JPR will obtain the right to acquire 40% of
the SPCSPC-backed asset by investing in the SPC from the development stage and
after
・Able
・Able to acquire an excellent office building in front of Nagoya Station where
significant developments are underway
・Raises・Raises efficiency of funds by setting to pay the 12% portion of JPR's preferred
securities (40% of the total) on the day following completion of construction (May2009) and 25% a year after completion of construction (April 2010)2010)■Investment Risks

JPR
JPR will
will further
further utilize
utilize collaborations
collaborations withwithsponsorstoachievesponsors to achieve external
external growth.
growth.

____________________

・As・As an investment in a property under development, there are such risks as thebuilding not being completed, the construction schedule being delayed
delayed and thetenants not being found⇒Avoid⇒Avoid risks other than leasing risks as much as possible by setting
setting the dateof delivery of the property (the 37% portion of JPR's equity of 40%) after thecompletion of construction(Note 1) The figure has been calculated based on the accumulated acquisition values including those of the 8 properties already sold.

Japan Prime Realty Investment Corporation 7

Establishing the Core Portfolio and Diversifying Risks
Continuing Diversified Investment into Tokyo and 5 Major Cities Where Stability and Growth are Expected Portfolio Diversification (as of the end of June 2007)

Geographic Diversification (as of June 2007)
Other cities
2.1%

Fukuoka, Sendai
and Sapporo
7.4% 261,159
Sapporo1 property
JPY 3.7 bn

37.7%

5 majorcities

Tokyo
CBDs

用途
Osaka 事務所
and
商業
12期以降
19,16095,001
Greater
Nagoya 75,841
32,44638,97571,421
6,510
31,65054,9279,250
21.8% 23,277
Tokyo
14,4804,200
18,6805,370
151,414

Naha
1 property
JPY 1.6 bn

Fukuoka
3 properties
JPY 7.6 bn

093,985

5,370
245,399

15,760

Tokyo
68.6%

506,55830.9%

用途Property Type (as of June 2007)
Niigata
1 property
JPY 2.1 bn

RetailOffice

37.3%

Osaka
7 properties
JPY 46.2 bn

Wakayama
1 property
JPY 1.7 bn

62.7%

Sendai2 properties
JPY 7.4 bn

Tokyo CBDs and Greater Tokyo
31 properties
JPY 172.9 bn
Nagoya2 properties
JPY 8.7 bn

Tenant Diversification (as of June 2007)
Top 5 tenants
Other tenantsTokyo CBDs and Greater
Tokyo: 68.6%
Tokyo, Osaka and Nagoya:
90.5%

21.1%

67.8%
11.1%
6th-10thlargest tenants

Average Property Age: 13.5
13.5 yrs*Based on total monthly rents.
____________________*Portfolio (acquisition price) as of Dec. 2007, not including the Konan 2cyome Building (tentative name) to be acquired, the KM Fukugo Building (tentative name) to beacquired and the Meieki 2cyome Kaihatu TMK preferred securities acquired in November 2007 and to be acquired in the future.

Japan Prime Realty Investment Corporation 8

Promote Upward Revisions of Rents
Internal Growth through Promoting Rent Revisions Contributes to Expanded Revenues and Profits
 Examples of Upward Revisions for Office Buildings in Tokyo CBD and
and Greater Tokyo
Limited to offices in Tokyo CBD and greater Tokyo
RevisedTotal No.
Contracts
Timing of Rent Increaseof
11th fiscal period (Jun. 2007
period) or before
12th fiscal period (Dec. 2007
period)13th fiscal period (Jun. 2008
period)14th fiscal period (Dec. 2008
period)Total

Contribution to Profit Increase (1,000 yen)
11th fiscal 12th fiscal 13th fiscal 14th fiscal
periodperiodperiodperiod

%

56

297

18.9%

46,601

76,124

76,124

76,124

35

328

10.7%

0

45,11783,88383,883

28

328

8.5%

0

0

17,67530,471

4

328

1.2%

0

0

0

543

123

328

37.5%

46,601

121,241

177,682

191,021vs. 10th fiscal
period rents

1.6%

4.2%

6.1%

6.6%

n
sio
evi
er
g
e ra
Av

*1. The revision results are accumulated numbers on a contract basis.
basis. *2. The numbers of contracts are those at the ends of the 11thand 12th fiscal periods, while using the figure at the end of thethe 12th fiscal period for the 13th and 14th fiscal periods for convenience.
convenience.
*3. Offices covered are only those located in Tokyo or Greater Tokyo.
Tokyo. *4. Contributions to increased revenues and the ratios of rents
over the 10th fiscal period have been calculated solely based on rents excluding common expenses. *5. Figures for the 13th and 14th
14th
fiscal periods are revisions that were already agreed on as of thethe end of December 2007.

Room for Upward Revisions of Rents for Office Buildings in Tokyo and Greater Tokyo

Changes in Average Market Rents

21,524

121,241

83,88383,88376,124

76,124

76,12412th fiscal

13th fiscal

14th fiscal

45,11711th fiscal

periodperiodperiod11th fiscal
period contribution
by revisions period
12th fiscal period
contribution by revisions
13th fiscal period contribution by revisions
14th fiscal period contribution by revisions

Disparity between Existing Rents and Market Rents

Breakdown of Existing Rents
that are Lower than Market Rents
Rooms forrevisions: 0%
through 5%

14%
19,2639th fiscal period

10th fiscal period

11th fiscal period

12th fiscal period

543
30,471

46,601Room for upward revisions:
586 million yen per fiscal period

21,150191,02146,601

22,295(Unit: yen/tsubo
yen/tsubo))

2%
10.
d:
o
i
r
pe
177,682
cal
fis
h
t
2
1
17,675
the
or
sf
e
t
ra

Present status

Market rent●
nts andre●Room
Roomforforupward
upwardrevisions
revisionsbased
basedononcomparisonscomparisonsbetween
betweenmarket
marketrents
rents
andthethemonthly
monthlycontract
contractrents
rentsasasof
ofthe
theendendof
ofthe
the12th
12th
fiscalfiscalperiod:
period:586
586million
millionyen
yenperperfiscal
fiscalperiod
period(97(97million
millionyen
yenperpermonth)month)●
ard revisions
upw●SinceSincethetheaverage
averagemarket
marketrent
rentisisin
inaarisingrisingtrend,
trend,room
roomforforupward
upwardrevisionsare
areexpected
expectedto
tocontinue
continueexpanding
expandingin
inthe
thefuture.
future.

Rooms forrevisions: morethan 5% through10%

Rooms forrevisions: 20%
or more

30%

27%
29%
Rooms forrevisions: morethan 10% through20%*1. Average market rents have been calculated through simple averaging of market rents for individual office buildings owned by JPR in Tokyo and Greater Tokyo, based on reports by K.K. Ikoma Data Service
System. *2. Room for upward revisions have been calculated by simply adding the differences between the rents (that are lower than market rents) for individual tenants at offices owned by JPR in Tokyo and Greater
Tokyo at the end of the 12th fiscal period and market rents for individual buildings.

Japan Prime Realty Investment Corporation 9

Conversion Construction at Yume-ooka Office Tower
The 24th Floor used for a Restaurant with a View was Renovated to Suit Office Specs, Leading to Improved Profitability

zConvenience due to direct connection to stationzScarcity value as top floor of high-rise office building
zHigh grade as large-scale office building
zLocation as connecting point in southern part of Yokohama
zConsiderations given to office demands in neighboring areas

Convert a restaurant into offices
to enjoy strong demand

Improvement in profitability

Construction period: Oct 2007 – Feb 2008
Construction cost: 178 million yenzz Total
Total renovation
renovation ofof thethe restaurant
restaurant space
space andand installation
installation ofof
OA
OA floor
floor with
with office
office specifications
specificationszz Renewal
Renewal ofof toilets,
toilets, common
common areas
areas andand elevator
elevator halls
hallszSeparate
air
conditioning
system(aroundtheclock)(aroundthez Separate air conditioning system (around-the-clock)z
z Installation
Installation ofof aa refreshment
refreshment space
spacezz Installation
Installation ofof aa smoking
smoking room
room
Introducedts
tenan
Introduced design
design andand facilities
facilities focused
focused onon thethe comfort
comfort ofof tenants
tenants

Before converting the 24F

Rent for the previous restaurant
36 million yen per year

After converting the 24F (assumption)

Aim toimprove
profitability

NOI yield (acquisition price basis)
4.8％
4.8％ (assumed, upon acquisition)

Rent for offices (about 2.1 times)
77 million yen per year (assumed)

5.4％
5.4％ (assumed, fullfull-period operation)

Japan Prime Realty Investment Corporation 10

Growth Potential of Cash Flow: History of Rent Revenues
Rental Revenues (Note 1) Steady Growth Since the 7th Fiscal Period
 History of Rent Revenues from the Entire Portfolio and from the 35 Properties Owned Since
the End of the 6th Fiscal Period (Ended December 2004) (Note 2)(JPY mn)

9,662

10,0009,880

Change (%)

115.0

8,942

9,000
8,000

9,692

7,792

8,072

8,455

112.9

7,340

108.6

7,000

109.5

110.9

107.2

105.0

105.8

6,000

110.0

103.4
5,000

100.0
100.0

4,000
3,000
2,000
1,000

6,582

6,808

6,966

7,059

7,148

7,209

7,301

7,432

Portfolio with35 properties
as of the endof Dec. 2004

95.0

90.0

0

85.0
7th period

8th period

9th period

10th period

11th period

12th period

13th period

14th period

Jun 2005

Dec 2005

Jun 2006

Dec 2006

Jun 2007

Dec 2007Jun 2008

Dec 2008

Total rent revenues from the entire portfolio (left axis)
Total rent revenues from the 35 properties owned since the end of Dec. 2004 (left axis)____________________

Rate of change in total rent revenues from the 35 properties owned since the end of Dec. 2004 (right axis)

Notes (1) The rent revenues represent the fixed revenues designated in the contracts with tenants, including rent, common expenses and parking fees.
(2) The 35 properties owned as of the end of the 6th Fiscal Period (ended December 2004) represent the 42 properties owned as of the end of the 6th Fiscal Period (ended December2004) minus JPR Ikebukuro Bldg., JPR Park West Takamatsu and JPR Square Hakata East/West that were sold in March 2005, SK Hiroshima Bldg. that was sold in September 2005,
Park East Sapporo that was sold in November 2005, and Tsurumi fuga 1 and JPR Takamatsu Bldg. that were sold in April 2007.

Japan Prime Realty Investment Corporation 11

Stability
Stability inin Revenues
Revenues andand Profits
Profits –– Leasing
Leasing Overview
Overview ofof UrbanUrban Retail
Retail PropertiesPropertiesOverview of Lease Contracts for Retail Properties
Ｎｏ

Retail Properties

1

JPR Shibuya Tower Records Bldg.

Through June 30, 2012

No cancellation allowed during the contract period on the left

2

Shinjuku Sanchome East Bldg.

Through January 31, 2027

No cancellation allowed until January 31, 2017, after which one-year notice is needed

3

Tanashi ASTA

Through February 9, 2015

No cancellation allowed during the contract period on the left

4

Cupo-la Main Bldg.

Through March 16, 2026

No cancellation allowed during the contract period on the left

5

JPR Musashikosugi Bldg.

Through March 1, 2013

Cancellation allowed with one-year notice

6

Musashiurawa Shopping Square

Through October 31, 2025

No cancellation allowed until October 31, 2015, after which one-year notice is needed (with penalty imposed)

7

Kawasaki Dice Bldg.

Through April 30, 2017

No cancellation allowed until April 11, 2012, after which no cancellation is allowed for some tenants through August 2023

8

JPR Umeda Loft Bldg.

Through March 15, 2010

No cancellation allowed during the contract period on the left

9Strasse Ichibancho

Through October 31, 2012

Received one-year notice of cancellation on October 31, 2007 (scheduled to leave at the end of February 2008); Master-lease by Mitsui Fudosan

10

Benetton Shinsaibashi Bldg.

Through February 14, 2033

Cancellation allowed with one-year notice but penalty is imposed.

11

Housing Design Center Kobe

Through March 31, 2012

No cancellation allowed during the contract period on the left－

JPR Chayamachi Bldg.

Leasehold contract of two years as a rule

(Multi-tenant retail property) No cancellation allowed for 1F through 3F until May 10, 2015－

JPR Daikanyama

Leasehold contract of two years as a rule

(Multi-tenant retail property)－

JPR Jingumae 432

Leasehold contract of two years as a rule

(Multi-tenant retail property)

Lease Period

Overview of Lease Contract (No Cancellation, etc.)

 Distribution of Remaining Periods of Lease Contracts for Stability-type Retail Properties and NOI Ratios(Note 1) against Entire Portfolio
Stability12%(Total 10.64％）
10.64％）

5
10%

2.25%

9

8%

6%

4%

1.49%

3

1

7

（Total 4.43％）
4.43％）

4.16%

8

2
1.52%

6.91%
4.99%

2%

11

0.18%

4.94%

4

2.73%
0%

10

0
2年未満

3年～4年

5年～6年

7年～8年

9年～10年

11年～12年

zThe remaining period of the leaseholds and the ratios of NOIs
by individual properties against the NOI of the entire portfolio
are diversified, which helps reduce vacancy risks at retailproperties.
z JPR focuses its investment in retail properties on urbanurban-type
retail properties located close to stations. This assures highavailability of tenants to fill vacancies.

1.01%____________________
6

1.71%

13年～14年

15年以上(Note 1) The remaining periods of lease contracts are those as of the end of the 12th fiscal period(December 31, 2007), while the NOI ratios are those of NOIs of individual retail facilities
against the NOI of the entire portfolio for the 12th fiscal period. The numbers are linked to theabove table of "Overview of lease contracts for retail properties."

Japan Prime Realty Investment Corporation 12

Financial Strategy(1) – LTV Ratio
Current LTV Ratio is Less than 40% , being Controlled between 30% and 50%<Add-on offering reduced LTV ratio><LTV ratio will be controlled between 30% and 50%>z Since the add-on offering of February 2005, the JPR LTV ratio

has fluctuated at between 40 and 50%
z The LTV ratio dropped to approx. 36% with the add-on offeringof 95,000 units in February 2007 (approx. 18% of total units
outstanding)z Acquisition capacity will become JPY 57 billion by raising up

LTV ratio.

z LTV ratio has risen to approx. 39% with recent property

acquisition at end of July 2007
LTV Ratio and Acquisition Capacity (Simulation)

Total Unitholders’ Capital and LTV Ratio（JPY bn.） Total unitholders’ capital (left axis)200
LTV ratio (right axis)
54.9
51.1

48.7

46.4
150

44.1

45.8

（JPY bn.）

JPY
50％
156.7 bn

39.4

38.9
42.0

40.6

JPY 115.4 bn

37.1
100
Unitholders’：capitalJPY 56.9 bn

JPY 89.1 bn

Portfolio size
JPY 308.9 bn(Acquisition price)

60％

300

Portfolio size
JPY 251.9 bn(Acquisition price)

JPY
57 bn

40％

200

37.2
30％
20％

100

50
10％
0

Jun./Dec. Jun./Dec.
2003
2002

Jun./Dec.
2004

0％

Jun./Dec. Jun./Dec. Jun./Dec.
2005
2006
2007

0

Present Capacity(38.9%)

50%

LTV ratio

LTV ratio＝Interest-bearing Debt÷（ Interest-bearing Debt ＋Unitholders’ Capital）×100

The target portfolio size of 300billion yen is achievable without new issue of additional equity

Japan Prime Realty Investment Corporation 13

Financial Strategy(1) – Diversifying Maturities, Source of Debt
Reducing Refinance Risks throughDiversified Debt Maturity

Diversify Source of Debt to Secure
Future Property Acquisitions<Repayment in Feb. 2008 was refinanced through bank loans>
The Bank ofTokyo-Mitsubishi UFJ

JPY 2 bn

5 months

Resona Bank

JPY 2 bn

5 months

Repayment of 1st series ofcorporate bonds
JPY 10 bn<Expanding sources of both direct and indirect finance>

The Mizuho Corporate bank

JPY 5 bn

3 years

Daido Life Insurance

JPY 1 bn

7 years

Procurement Method

Current Status

Short-term borrowings

A credit limit of 34 billion yen arranged with 7 banks
A commitment line of 20 billion yen arranged with 5banksLong-term borrowings

Approx. 38 billion yen has been borrowed from 12
financial institutions

Corporate Bonds

Shelf registration of 100 billion yen in bond issues
has been arranged (remainder 100 billion yen)

Commercial Paper (CP)Under examination<Refinance in every period is less than the commitment line>

Get High Credit Ratings

Average Maturity: 4.5 years(JPY 100 min)Average Interest Rate: 1.66%

250

Debt Maturity Ladder

Total commitment line: JPY 20 bn

200

Refinance in Feb. 2008

150
100
50
0

40.0

Total 140.0
Corporate Bonds
90.0
Long-term debt
Total 110.0 50.0
50.0
110.0 Short-term debt
60.0
100.0
97.8
80.0
70.0
60.0
45.0
44.040.050.0
10.0

Jun./Dec Jun./Dec Jun./Dec Jun./Dec Jun./Dec Jun./Dec Jun./Dec Jun.
2008

2009

2010

2011

2012

2013

2014

2015

Dec
2026

Current Ratings
IssuerOutlook

R&I

AA-

StableMoody’s

A2

StableS&P

A

StableUpgraded inJan. 2008

Japan Prime Realty Investment Corporation 14

Future Investment and Management Policy
Realize Well-balanced External and Internal Growth to Achieve Growth in Dividends

Investment
Subject

Focus on investment in offices while giving consideration to
the investment ratio of the portfolio

Area

Center on Tokyo and other major cities where increases inrents are expected

Investment
MethodRent

Occupancy

Expand investment in development properties by fully
utilizing collaboration with sponsors

Continue to raise rents in an effort to eliminate the disparity
with rental office market rents

Striving
Strivingfor
foraaportfolio
portfoliosize
size
ofofmoremorethanthan
300
300billion
billionyen
yen
and
and
dividend
dividendperperunit
unitofof
7,000
7,000yen
yen

Maintain the occupancy rate at its current almost fulloccupancy

Japan Prime Realty Investment Corporation 15

1. Financial Summary

Appendix

2. Property Portfolio Summary
3. Overview of TRIM

Financial Summary

Balance Sheet as of the End of the 11th Fiscal Period
Issuance of Corporate Bonds had Debts longer and much fixed

Total current assets
Cash and bank deposits
Entrusted cash and deposits
Other current assets
Total fixed assets
Property and equipment

Real estate
Buildings and structures
Land
Entrusted real estate
Buildings and structures
Land
Total intangible assets
Other intangible assets
Total investments and other assets

Investment securities
Deposits
Long-term prepaid expenses
Total deferred assets
Corporate bond issuance costs

Total assets

As of Dec. 31, 2007
Amount%31,874 11.4%
16,307
5.8%
14,990
5.4%
576
0.2%
246,844 88.5%
246,478 88.4%
61,270 22.0%
24,6708.8%
36,600 13.1%
185,207 66.4%
68,079 24.4%
117,128 42.0%
10
0.0%
10
0.0%
355
0.1%
344
0.1%
10
0.0%
0
0.0%
122
0.0%
122
0.0%
278,842 100.0%

Total current liabilities

As of June 30, 2007
Amount
%28,455 10.5%
13,1894.9%
14,818
5.5%
448
0.2%
242,900 89.5%
241,322 88.9%
55,194 20.3%
20,643
7.6%
34,551 12.7%
186,127 68.6%
68,999 25.4%
117,128 43.2%
9
0.0%
9
0.0%
1,568
0.6%
1,558
0.6%
10
0.0%
0
0.0%
42
0.0%
42
0.0%
271,398 100.0%(JPY mn)
ChangeAmount
%
3,418
12.0%
3,118
23.6%
171
1.2%
128
28.6%
3,944
1.6%
5,156
2.1%
6,075
11.0%
4,026
19.5%
2,049
5.9%
-919
-0.5%
-919
-1.3%
－
－
1
14.6%
1
14.6%
-1,213 -77.3%-1,213 -77.9%－－
0 260.0%
80 189.3%
80 189.3%
7,443
2.7%

Long-term borrowings
Corporate bonds
Total liabilities

13,242
2,101
1,140
－
－
10,000104,704
15,021
38,18351,500117,946

4.7%
0.8%
0.4%
－
－
3.6%
37.5%
5.4%
13.7%
18.5%
42.3%

21,066
1,739
1,044
3,500
(Note) 4,783
10,00089,234
14,551
38,18336,500110,300

7.8%
0.6%
0.4%
1.3%
1.8%
3.7%
32.9%
5.4%
14.1%
13.4%
40.6%

Unitholders' capital
Retained earnings
Total unitholders' equity

156,725
4,169
160,895

56.2%
1.5%
57.7%

156,725
4,372
161,098

57.7%
1.6%
59.4%

－
-203
-203

－
-4.6%
-0.1%

271,398 100.0%

7,443

2.7%

Accounts payable and accrued expenses

Rent received in advance
Short-term borrowings
Current portion of long-term borrowings
Current portion of corporate bonds

Total long-term liabilities
Deposits received from tenants

Total liabilities and unitholders' equity

Note: Figures were rounded off to a million yen

278,842 100.0%-7,823 -37.1%
362
20.8%
96
9.3%
-3,500 -100.0%-4,783 -100.0%－－
15,470
17.3%
470
3.2%
－
－
15,000
41.1%
7,646
6.9%

(JPY mn)
1. Balance of interest-bearing debt
Total
(Breakdown)Unsecured borrowings
Secured borrowings
Unsecured corporate bonds
2. Interest-bearing debt ratio etc.

End of 12th End of 11th
Fiscal Period Fiscal Period

99,68329,0009,183
61,50092,96632,50013,96646,500

Variation

6,717-3,500-4,78315,000End of 12th End of 11th Variation (P)Fiscal Period Fiscal Period(1) Interest-bearing debt ratio
Interest-bearing debt / (Interest-bearing debt + Unitholders' capital)
38.9%
37.2%
1.6
(2) Interest-bearing debt to total assets① Interest-bearing debt / Total assets at end of period
35.7%
34.3%
1.5
② Interest-bearing debt / (Total assets at end of period + Gains or losses
from real estate valuation)
29.9%
29.4%
0.5
(3) Ratio of long-term fixed-rate borrowings
Long-term fixed-rate interest-bearing debt (*) / Interest-bearing debt
90.0%
85.5% (Note) 4.5*Total amount of long-term fixed-rate debt with over 1 year to maturity

3. Commitment line status

End of 12th End of 11th
Fiscal Period Fiscal Period

Variation－① Credit limit (total)
20,00020,000－－－② Outstanding debt at the end of the per③ Unused commitment line at the end of the period－
20,00020,000④ Lenders (as of the end of the period)
Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ,
Resona Bank, Mitsubishi UFJ Trust and Banking, Shinsei Bank
* Agreements have been concluded separately with respective banks
listed above.
4. Investment units status

End of 12th End of 11th
Fiscal Period Fiscal Period① Total number of units issued and outstanding (units)
625,000 625,000② Total unitholders' equity per unit (yen) 257,432 257,757

Variation－-325

Note: The 4,783 million yen in long-term debt scheduled for repayment on December 26, 2008 was repaid in advance on July 27,
2007. Therefore, it is entered in the item long-term debt to be paid within one year for accounting purposes.
Further, the long-term fixed interest ratio indicates the ratio of long-term fixed interest with repayment deadlines of more than a year
in the future within interest-bearing liabilities. Therefore, it is calculated with this loan included.

Japan Prime Realty Investment Corporation 18

Income Statement for the 12th Fiscal Period(JPY mn, unless otherwise indicated)

11th Fiscal Period

Jul. 1, 2007 – Dec. 31, 2007

Jan. 1, 2007 – June 30, 2007

%
92.5%
7.2%
99.7%
－
0.3%

Amount
8,942
553
9,496
530
30

%
88.9%
5.5%
94.4%
5.3%
0.3%

10,449100.0%

10,056100.0%

393

3.9%

764
2,242
477
740
35
251
207
461
69
1,809
4,816
400
69
6
55
94
5,443

7.3%
21.5%
4.6%
7.1%
0.3%
2.4%
2.0%
4.4%
0.7%
17.3%
46.1%
3.8%
0.7%
0.1%
0.5%
0.9%
52.1%

784
1,848
462
542
32
189
200
381
40
1,682
4,315
391
81
5
55
98
4,948

7.8%
18.4%
4.6%
5.4%
0.3%
1.9%
2.0%
3.8%
0.4%
16.7%
42.9%
3.9%
0.8%
0.1%
0.6%
1.0%
49.2%

-19
393
14
198
2
62
6
79
29
127
501
9
-12
0
0
-3
495

-2.5%
21.3%
3.2%
36.7%
6.8%
33.0%
3.0%
20.9%
74.2%
7.6%
11.6%
2.3%
-15.7%
10.5%
0.6%
-3.9%
10.0%

5,006

47.9%

5,108

50.8%

-101

-2.0%

5,598
7,407
18
854
809
16
8
－
20
4,170

53.6%
70.9%
0.2%
8.2%
7.7%
0.2%
0.1%
－
0.2%
39.9%

5,181
6,863
94
828
705
16
18
83
5
4,373

51.5%
68.2%
0.9%
8.2%
7.0%
0.2%
0.2%
0.8%
0.1%
43.5%

417
8.1%
544
7.9%
-75 -80.1%
25
3.1%
104
14.8%
-0
-0.1%
-10 -55.8%-83 -100.0%
14 255.2%
-203
-4.6%

Income before income taxes

4,170

39.9%

4,373

43.5%

-203

-4.6%

Net income

Property and other taxes
Other rental expenses
Outsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts

Other
Depreciation
Real estate rental expenses ②
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses
Operating profits
Profits (①-②)
Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Interest expenses (including corporate bonds)

Loan arrangement fees
Amortization of corporate bond issuance costs

New unit-issuance costs
Other non-operating expenses
Recurring profits

Amount
%
720
8.1%
198
35.9%
918
9.7%
-530 -100.0%
4
14.8%

4,169

39.9%

4,372

43.5%

-203

-4.6%

Retained earnings at the end of period

4,169

39.9%

4,372

43.5%

-203

-4.6%

Distribution per unit (JPY)6,671

Note: Figures were rounded off to a million yen

6,996

Distribution per unit: 6,671 yen

ChangeAmount9,662
752
10,415－34

Rental revenues
Other rental revenues
Real estate rental revenues ①
Gain on sale of real estate
Dividends income
Operating revenues

経
常
損
益
の
部

12th Fiscal Period

(325)

1.
1. Rental
Rental businessbusiness income
income**Whole-period
Whole-period contribution
contribution ofof44 properties
properties
acquiredacquired inin 11th
11thfiscal
fiscal period
period+484+484 mn
mn yenyen** In-period
In-period rental
rental ofof 11 property
property acquired
acquired inin
12th
12th fiscal
fiscal period
period+299+299 mn
mn yenyen** Improved
Improved profitability
profitabilityofof existing
existing properties
properties+67+67 mnmn yenyen** Rental
Rental revenue
revenue decrease
decrease fromfrom sale
sale ofof 22
properties
properties inin 11th
11th fiscal
fiscal period
period-130-130 mn
mn yenyen

2.
2. Additional
Additional use
use fees/utilities
fees/utilities** Additional+191
Additional use
use fees:
fees:+191 mn
mn yenyen** Utilities:+198mnUtilities:+198mn yen
yen(Increased(Increased due
dueto
to seasonalseasonal factors)
factors)3.
3. Non-operating
Non-operating profits
profits andand losses
losses(1)(1)Non-operating
Non-operatingprofits
profits** Income
Income fromfrom settlement
settlement ofof management
management
accounts-83
accounts-83 mnmn yenyen(2)(2) Non-operating
Non-operating expenses
expenses** Paid+104
Paid interest
interest+104 mn
mn yenyen(Increasefromrefinancing
tolong-term(Increase from refinancing to long-term
andand fixed
fixed rate
rate debt)
debt)(Long-term,(Long-term, fixed
fixed interest
interestratio:
ratio:
EndEndof
of previous
previous period
period 85.5%
85.5%
→
→ End
End ofofthisthis period
period 90.0%)
90.0%)** Amortization
Amortizationofof corporate
corporate bondbond issuanceissuance
costs
-10
costs
-10 mnmn yenyen** New
New investment
investment unit
unit issuanceissuance costs
costs
-83
-83 mnmn yenyen(Reference)
In January 2002 (before IPO) investment units (500,000 yen a unit)
were split into 2.5 units (200,000 yen a unit) to make investment units
easier to invest in. Therefore, the distribution per unit based on the
pre-split level would be 16,670 yen.

Japan Prime Realty Investment Corporation 19

Forecast for the 12th Fiscal Period(JPY mn, unless otherwise indicated)

Forecasts for the 13th Fiscal Period
January 1, 2008 – June 30, 2008
49 properties asof the end of 12th
Fiscal Period

Rental revenues
Other rental revenues
Real estate rental revenues ①
Gain on sale of real estate
Dividends income
Operating revenues
Property and other taxes
Other rental expenses
Outsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts

Other
Depreciation
Real estate rental expenses ②
Loss on sale of real estate
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses
Operating profits
Profits (①-②)
Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Recurring profits
Income before income taxes
Net income
Retained earnings at the end of period
Distribution per unit (JPY)

9,692
797
10,490－－10,490
865
2,187
470
653
33
269
198
465
95
1,799
4,852
－

5,637
7,437

Meieki Nichome
Kaihatsu TMK
Preferred
Securities

－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－

－
－

Total
9,692
797
10,490－－10,490
865
2,187
470
653
33
269
198
465
95
1,799
4,852
－
405
73
6
55
99
5,492
4,997
5,637
7,437
97
876
4,219
4,219
4,218
4,218

Change from the 11th
Fiscal Period Results
%
92.4%
7.6%
100.0%－－
100.0%
8.3%
20.9%
4.5%
6.2%
0.3%
2.6%
1.9%
4.4%
0.9%
17.2%
46.3%
－
3.9%
0.7%
0.1%
0.5%
0.9%
52.4%
47.6%
53.7%
70.9%
0.9%
8.4%
40.2%
40.2%
40.2%
40.2%

6,750
Total units outstanding (Units)
625,000

Amount

%

29
45
74
－
-34
40
100
-55
-6
-86
-1
18
-8
3
25
-10
35
－
4
4
0
-0
4
48
-8
39
29
79
21
49
49
49
49

0.3%
6.1%
0.7%
－
-100.0%
0.4%
13.2%
-2.5%
-1.3%
-11.7%
-3.6%
7.2%
-4.0%
0.8%
36.8%
-0.6%
0.7%
－
1.0%
5.9%
4.8%
-0.1%
4.7%
0.9%
-0.2%
0.7%
0.4%
423.7%
2.5%
1.2%
1.2%
1.2%
1.2%

Premises behind
Forecasts for 12th Fiscal
Period Management (1)<Portfolio>
Portfolio>
Portfolio as of end of 12th fiscal
period: 49 properties
Preferred securities: 1
Properties to be acquired in 13th
fiscal period and after: 0<Average Monthly Occupancy
during Period>
97.8％
97.8％
<Total Number of Units
Outstanding>
625,000 units<LTV Ratio>
38.9％
38.9％

79
-

Note: Figures were rounded off to a million yen

For details on assumptions for the 13th Fiscal Period forecast, please refer to the “Assumptions for the 13th Fiscal Period Forecast (January 1, 2008 June 30, 2008)” on pages 3 and 4 of the “Japan Prime Realty Investment Corporation 12th Fiscal Period Results (July 1, 2007 - December 31, 2007).”

Japan Prime Realty Investment Corporation 20

Historical
Historical Unitholder
Unitholder Composition
Composition
Ratio of Foreign Investors Rose through 5 Consecutive Periods

625,000

625,000

2 2 .1 %1 3 8 ,1 4 1

2 4 .4 %1 5 2 ,6 3 2

600,000

500,000

400,000

Un itsOutstanding
430,000
1 0 .8 %
4 6 ,5 9 0
1 7 .5 %
7 5 ,2 9 8

430,000
7 .2 %
3 0 ,9 4 4
1 6 .9 %7 2 ,7 2 7530,000

530,000

530,000

530 ,000

6 .9 %
3 6 ,5 6 49 .9 %
5 2 ,3 6 6

1 2 .4 %6 5 ,6 4 7

1 3 .6 %7 1 ,9 4 7

1 4 .0 %7 4 ,0 3 0

1 3 .8 %
7 3 ,3 8 1

6 2 .9 %3 3 3 ,4 9 1

6 3 .0 %3 3 3 ,6 9 7

1 4 .6 %7 7 ,2 1 4

6 3 .8 %3 3 8 ,1 4 5

300,000

200,000

1 4 .1 %7 4 ,8 2 2

6 3 .7 %3 3 7 ,4 8 8

13.4％
57,76916.2％
69,666

1 5 .4 %6 6 ,4 2 1

June
2004

Of whichtrust banks
own
24.9％
155,575

Of whichtrust banksown

1 4 .7 %
7 8 ,0 7 7

1 2 .3 %6 5 ,3 2 4

1 0 .7 %
5 6 ,8 3 2

9 .6 %
5 0 ,9 7 5

8 .4 %
5 2 ,7 2 3

7 .3 %
4 5 ,3 8 8

June
2005

Dec.
2005

June
2006

Dec.
2006

June
2007

Dec.
2007

Dec.
2004

Of whichtrust banksown

5 6 .5 %3 5 3 ,2 9 4

22.9％
121,481

1 5 .5 %6 6 ,4 3 8

Of whichtrust banksown

5 7 .5 %3 5 9 ,5 3 8

Of whichtrust banksown

Of whichtrust banksown

6 0 .4 %2 5 9 ,8 9 1

1 1 .8 %
7 3 ,6 8 6

Of whichtrust banks
own
22.5％
119,104

Of whichtrust banks
own
20.3％
107,3425 6 .2 %2 4 1 ,6 9 1

1 1 .9 %7 4 ,5 9 8

24.5％
129,658

26.1％
163,242

Number ofUnitholders

15,
15,089（-1,913）
1,913）
231
（+11）
+11）
229
（-24）
24）

176
（-2）
of which,
11 are trust
banks
(-1)

100,000

0

Indivisuals

Financial Institutions

Other Domestic Companies

14,453（-1,898）
1,898）

Foreign Investors____________________
Note: The composition ratio is rounded to one decimal place.

Japan Prime Realty Investment Corporation 21

Property Portfolio SummaryProjected Trends of Occupancy Rates
12th Period (Dec. 2007)

14th Period (Dec. 2008)

13th Period (June 2008)
Forecast

100%
99%

99.1%

98%

98.4%

97%

97.3%
96%

A 0.4% increase compared tothe 98.0% forecasted at thetime of announcing the 11th
Fiscal Period results

95%
94%

Includes finalized new tenants
and contract cancellations

93%
92%

Average Occupancy Rate
91%
90%

98.7％

97.8％

98.7％

(Reference) Total leasable area: 373,609.99㎡ (end of the 12th fiscal period)
(1)
or 49
-ooka Office
ffor
Yume
(1) TheThe occupancy
occupancy rate
rate forfor thethe 12th
12th fiscal
fiscal period
period andand after
after isis for49 properties
properties including
including YumeYume-ooka
Office Tower
Tower toto be
be acquired
acquired
in
July
2007.
in July 2007.
(2)
ideration all
ebruary 12,
cons(2) TheThe occupancy
occupancy forfor thethe 13th
13th fiscal
fiscal period
period has
has taken
taken into
into considerationconsideration
all ofof thethe contract
contract terminations
terminations known
known asas ofof FFebruary
12,
20082008 andand included
included only
only executed
executed contracts
contracts forfor thethe scheduledscheduled new
new tenants.
tenants.
(3)
enants inttenants(3) TheThe occupancy
occupancy forfor thethe 14th
14th fiscal
fiscal period
period includes
includes some
some newnew tenants
in addition
addition toto thethe above
above (2).
(2).

Japan Prime Realty Investment Corporation 23

NOI
th Fiscal
NOI Yield
Yield byby Property
Property forfor thethe 1212th
Fiscal Period
Period (Tokyo(Tokyo CBDs
CBDs andand Greater
Greater Tokyo)
Tokyo)(July 1, 2007 – Dec. 31, 2007)

12.0%
10.9%

Portfolio NOI 5.8%
10.2%

10.0%

Office Buildings NOI 6.1%

10.0%

Retail Properties NOI 5.4%

8.0%

7.4% 7.3%

7.4%

7.0%

7.1%

6.3%

6.6% 6.0%
6.3%

6.7%

6.3%

6.3%

5.8%

6.0%
5.4%

5.3%
5.0%

5.4%

5.2%

5.1%

5.0%

4.7%

4.8%

5.1%

4.8%
4.6%

4.2%

4.0%

3.4%

3.0%

2.0%

川崎ダイスビル

Retail武蔵浦和ショッピングセンターAA AB

J P R武 蔵 小 杉 ビ ル

キュポ・ラ本館棟

Greater Tokyo

Z

田無アスタ

Y

ゆめおおおかオフィスタワー

X

ライズアリーナビル

OfficeW

立川ビジネスセンタービル

V

J P R上 野 イ ー ス ト ビ ルU川口センタービル

T

新横浜第二センタービル

S

J P R横 浜 日 本 大 通 ビ ル

R

J P R千 葉 ビ ルRetailQ

アルカイースト

A: Kanematsu Building
I: JPR Ichigaya Building
B: Kanematsu Building Annex
J: Oval Court Ohsaki Mark West
C: JPR Ningyo-cho Building
K: Shinjuku Square Tower
D: Shin-Kojimachi Building
L: BYGS Shinjuku Building
E: JPR Crest Takebashi Building M: Across Shinkawa Building Annex
F: MS Shibaura Building
N: JPR Shibuya Tower Records Building
G: Gotanda First Building
O: JPR Daikanyama
H: Fukuoka Building
P: JPR Jingumae 432

P

新宿三丁目イーストビル

O

J P R神 宮 前 ４ ３ ２N

J P R代 官 山

M

J P R渋 谷 タ ワ ー レ コ ー ド ビ ル

L

アクロス新川ビル・アネックス

Tokyo CBDs

K

ビッグス新宿ビル

J

新宿スクエアタワー

OfficeI

オーバルコート大崎
マークウエストH

J P R市 ヶ 谷 ビ ル

G

福岡ビル

F

五反田ファーストビル

E

ＭＳ芝浦ビルD

J P Rク レ ス ト 竹 橋 ビ ル

C

新麹町ビル

B

J P R人 形 町 ビ ル

Area

A

兼松ビル別館

Type

兼松ビル

0.0%

AC AD AE

Q: Shinjuku Sanchome East Building
Y: Rise Arena Building
R: Arca East
Z: Ｙume-ooka Ｏffice Ｔower
S: JPR Chiba Building
AA: Tanashi ASTA
AB:
Cupo-la Main Building
T: JPR Yokohama Nihon Odori Building
AC:
JPR Musashikosugi Building
U: Shinyokohama 2nd Center Building
AD:
Musashiurawa Shopping Square
V: Kawaguchi Center Building
ＡＥ:
KawasakiDice Building
W: JPR Ueno East Building
X: Tachikawa Business Center Building

Japan Prime Realty Investment Corporation 24

NOI
th Fiscal
NOI Yield
Yield byby Property
Property forfor thethe 1212th
Fiscal Period
Period (Other(Other selected
selected cities)
cities)(July 1, 2007 – Dec. 31, 2007)

12.0%

Portfolio NOI 5.8%
10.0%

9.8%

Office Buildings NOI 6.1%

9.2%

Retail Properties NOI 5.4%

8.6%

8.3%

8.0%

8.0%

7.6%
6.1%

6.0%

5.6%

5.5%

6.5%

6.3%

6.5%
5.8%

5.6%

5.2%
4.1%

4.2%
3.6%

4.0%

2.0%

Sapporo/Sendaiq

OfficeOther cities

J P R那 覇 ビ ル

Retailp

損保ジャパン和歌山ビルo

新潟駅南センタービル

h: JPR Nagoya Sakae Buildingi: Mitsubishi UFJ Lease & Finance
Nagoya Head Office Building
j: JPR Hakata Building
k: Tenjin 121 Building
l: JPR Hakata-Chuo Building

Officenシュトラッセ一番町

Fukuokam

損保ジャパン仙台ビル

Officel

N O R T H 3 3ビ ル

Nagoyak

J P R博 多 中 央 ビ ル

Officej

天 神 1 2 1ビ ルi

J P R博 多 ビ ルh

三 菱 U F Jリ ー ス 名 古 屋 本 社 ビ ル

a: Meiji Yasuda Life Osaka Umeda Buildingb: Tokyo Tatemono Honmachi Buildingc: JPR Dojima Buildingd: JPR Umeda Loft Building
e: Benetton Shinsaibashi Building
f: Housing Design Center Kobe
g: Chayamachi Grande Buildingg

J P R名 古 屋 栄 ビ ル

Retailf

J P R茶 屋 町 ビ ル

Osaka

e

ハウジング・デザイン・センター神戸d

ベネトン心斎橋ビル

Area

Officec

J P R梅 田 ロ フ ト ビ ル

Type

b

J P R堂 島 ビ ルa

東京建物本町ビル

明治安田生命大阪梅田ビル

0.0%

r

m: NORTH 33 Building
n: Sompo Japan Sendai Buildingo: Strasse Ichibancho
p: Niigata Ekinan Center Building
q: Sompo Japan Wakayama Buildingr: JPR Naha Building

Japan Prime Realty Investment Corporation 25

Profit or Loss Valuation

As of Dec. 31, 2007

 Real Estate valuation (Dec. 2007)(\ mn)

Acquisition price(%)
Tokyo CBDs
OfficeRetailSubtotal
Greater Tokyo
OfficeRetailSubtotal
Other Cities
OfficeRetailSubtotal
Total

Appraisal value(B)(%)

Book value(A)(%)

Profit or loss valuation

(B-A)

(%)

75,841
19,16095,001

30.1%
7.6%
37.7%

74,068
19,166
93,234

30.1%
7.8%
37.9%

94,36022,453116,813

31.5%
7.5%
38.9%

20,292
3,287
23,579

27.4%
17.2%
25.3%

38,95638,97577,931

15.5%
15.5%
30.9%

37,711
38,19575,906

15.3%
15.5%
30.9%

48,49042,992
91,482

16.2%
14.3%
30.5%

10,7794,797
15,576

28.6%
12.6%
20.5%

51,50017.2%
40,20013.4%
91,70030.6%
299,995 100.0%

10,434
4,404
14,83853,993

25.4%
12.3%
19.3%
21.9%

43,12717.1%
35,85014.2%
78,97731.4%
251,909 100.0%

41,066
16.7%
35,796
14.6%
76,86231.2%
246,002 100.0%

 Development of Potential Gain/Loss on Holding Real Estate(JPY mn)
mn)
60,00050,000

Profit or loss valuation

53,99340,00044,63030,000< Recovery of the Japanese economy >Improvement of leasing market
Real estate market booming

31,24320,00019,23010,000Asset value is expected toincrease with the growth ofcash flow

10,5820-10,000-3,868-7,451
Dec. 2004

June 2005

Dec. 2005

June 2006

Dec. 2006

June 2007

Dec. 2007

Japan Prime Realty Investment Corporation 26

Overview of TRIM

Overview of TRIM -- Biography
Biography ofof Management
Management
Name
Toshihiro Hagiwara
President & Chief Executive Officer

Kazuo Kitami
Director & Chief Administrative Officer

Seiji Miwa
Director & Chief Investment Officer

Yasuo Furuya
Director & Chief Financial Officer

Biography
 Has over 30 years of experience in investment, brokerage and development
development ofreal estate as well as property management since joining Tokyo Tatemono
Tatemono Co.,
Ltd. in 1968. At Tokyo Tatemono, he worked on acquisitions of leasingleasing building
companies with a total transaction value in the tens of billions of yen. He was
Director and Head of the Osaka Branch of Tokyo Tatemono before assuming
assuming his
current role of President and CEO of Tokyo Realty Investment Management,
Management, Inc.
(TRIM) in January 2001. In addition, he assumed the concurrent rolerole asSubstitute Executive Officer of Japan Prime Realty Investment Corporation
Corporation (JPR)in September 2007.
 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life
Insurance Company) in 1975. Since then, he has been involved in a widewide-rangeof finance business and real estate investment for almost 30 years.
years. His
experience includes overseeing the insurer’insurer’s loan management as its credit
manager, formulation of a series of regulations such as selfself-assessment in linewith the insurance inspection manual and supervising credit management
management basedon such regulations.
 Joined Tokyo Tatemono in 1983. After working in Design Supervision,
Supervision, Planningand Development for 15 years, he was responsible for real estate securitizationfrom 1998. He became a member of the JJ-REIT Composition Project Team after
the formation of the first securitization deal based on the JapaneseJapanese SPC law. He
was responsible for the establishment of TRIM and was one of the key members in
the launch of JPR. In 2003, he was seconded to TRIM to work in asset
asset
management. He is a firstfirst-class architect.
 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life

Insurance Company) in 1980. Spent eight years in securities investment
investment
operations engaged in interest rate analysis, as well as the establishment
establishment of bondinvestment and asset management companies. Undertook activities related tovariable insurance securities management and oversaw securities investment
activities as Chief Bond Trader. Later, he gained further experience
experience in stock
market investment operations.
Japan Prime Realty Investment Corporation 28

Overview of TRIM -- Measures
Measures toto Avoid
Avoid Conflicts
Conflicts ofof Interests
Interests
Transactions with Interested Parties<1st check > Compliance Committee

 Acquisitions/sales of individual assets
 Property management commissions
 Trading intermediation or agent
 Large-scale renovation works, etc.

Asset Manager’s Compliance Committee
Prior examination of appropriateness/rationalityof transactions by members including outside
attorney, 4 full-time directors + compliancemanager + outside attorney (Special Committee)【Prior Examination】<Decision Making Organization>< 2nd check > Compliance Subcommittee
Asset Manager’s Compliance
Subcommittee

Board of Directors【 Prior Review】

 4 full-time directors: Dispatched fromshareholders, except the President
 4 part-time directors: Interlocking

directors with shareholders

Prior review of decision making procedures ofvarious committees by members including 4 fulltime directors + deal manager + compliancemanagerOR

Committees(Investment Policy Committee / Investment
Subcommittee / Management Subcommittee)
 4 full-time directors
 4 managers in each committee< 3rd check > Investment Committee
JPR : BoD Meeting
Prior approval of transactions by a committee
independent from shareholders of the asset
manager, based on investor-oriented decision【Prior Approval】

Execution of Selected Deals Only
Japan Prime Realty Investment Corporation 29

Overview of TRIM -- Decision-Making Process
Decision-Making
Process ofof Property
Property Acquisition
Acquisition
Enhanced Due Diligence Process upon Acquisition
Draft

Investment Management Division

Review

Compliance Subcommittee*1

Reviews whether or not the decision procedure of theInvestment Subcommittee violates any laws, ordinances, rules,
bylaws of the investment corporation, internal rules, etc.

Determineacquisition
policyInvestment Subcommittee

Determines the acquisition policy for the property based on
the materials disclosed by the seller and other content

Due diligence

Due Diligence Subcommittee

Transactions withinterested parties,
advanceverification/approval

Finalization of
acquisition
Determination of
acquisition ofproperties valued at a
certain level or greater

Conclusion ofcontract

Compliance Committee/Board of
Officers of Investment
Corporation

Investment Subcommittee

The Subcommittee verifies the content, importance and such oflegal compliance, site related studies, environmental risks,interests and other items indicated by the engineering report(ER) that the Investment Subcommittee had conducted prior toacquisition and also verifies the appropriateness of solutions
and improvements regarding problems

After obtaining the results of due diligence and negotiations
with the seller, it judges the compliance with investment
standards and the appropriateness of the acquisition price andmakes the decision on the acquisition

Board of Directors*2

Acquisition*1: The Compliance Subcommittee holds a session whenever there isis asession of the Investment Subcommittee or Due Diligence Subcommittee.
Subcommittee.
*2: The Board of Directors of the asset manager must discuss any acquisitions(sales) of individual assets valued at a certain level or greater
greater and exercise
caution in their management.

Japan Prime Realty Investment Corporation 30

Overview of TRIM -- The
The FeeFee Structure
Structure ofof TRIMTRIMAM Fee Structure (No fees for purchase/sale of property)

Merits from Economies of Scalez Fixed(JPY 12.5 mn every 6 months)+
Incentive Fee 1AM fee structure initially designed to enjoy
economies of scaleIncentive Fee 1
Æ 2% of total revenues, decreasing to 1.5% for+amounts exceeding JPY 8 bnz Incentive Fee 2

Incentive for Cost Reductions
Incentive fee linked to distributable amountÆ 3% of the amount available for distribution prior to+deduction of relevant fees will be allocated as
Incentive Fee 2z Incentive Fee 3

Incentive for Acquiring Blue-Chip Properties(after Jan. 2008)

0.25% of the price for assets being acquired(excluding acquisition costs, consumption taxes,etc.)Japan Prime Realty Investment Corporation 31

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 a result 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 of offering or
soliciting investment, or as a recommendation to purchase or sell any specific product. Please refer any inquiries forpossible 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 the accuracy of thecontent provided in this material (including references to legislation and taxation), it makes no guarantee of theaccuracy of the content. Furthermore, the content may be subject to change without prior notification.
Please further note that this English material is a provisional translation of the original Japanese material.

Web site URL: http://www.jpr-reit.co.jp/jpr_e/
Japan Prime Realty Investment Corporation 32