22nd

Twenty-Second Fiscal Period Business Report
July 1, 2012 – December 31, 2012
Japan Prime Realty Investment Corporation

Message to Our Unitholders
We at Japan Prime Realty Investment Corporation (JPR) would like to express our
sincere gratitude for the continued loyal patronage and support you have extended to us.
As we have settled the 22nd fiscal period (July 1, 2012 – December 31, 2012), allow us toprovide you, our unitholders, with an overview of the asset management and financial
results of JPR for the period.
First, in terms of the portfolio, JPR newly acquired Yakuin Business Garden at an
acquisition price of 10.9 billion yen, as part of our endeavors in strictly selective
investment in office properties in the “other cities” category. Located in Fukuoka City,
the property is a large, recently constructed building that boasts excellent location,and is expected to contribute to further enhancement of the quality of JPR’s portfolio.
This new acquisition expanded the portfolio to 59 properties or 391.9 billion yen on an
acquisition price basis as of the end of the 22nd fiscal period.
Second, in financing, JPR additionally issued new investment units from July throughAugust 2012 to procure 20.7 billion yen, and issued unsecured investment corporation bonds totaling 7 billion yen
in November of the same year. Moreover, given a relatively favorable fund procurement environment, we worked toreduce interest costs and promote a shift to long-term funding, realizing a more stable financial standing.
As for the financial results of the 22nd fiscal period, while rent revenue from existing properties decreased slightly, theacquisition of the new property as well as the full-period operation of the property acquired in the previous fiscal period
contributed to overall earnings. This and other factors led JPR to post 12,963 million yen in operating revenue, 5,026
million yen in ordinary income and 5,025 million yen in net income.
As a result, the cash distribution per unit for the 22nd fiscal period came to 6,093 yen.
Going forward, JPR will continue working with Tokyo Realty Investment Management, Inc., our asset managementcompany, to realize stable growth of our portfolio over the medium to long term by conducting prudent and solid asset
management. Through such efforts and commitment, we are dedicated to meet the expectations of our unitholders.
We ask for your continued understanding and support of our operations.

Hirohito Kaneko
Executive Officer
Japan Prime Realty Investment Corporation

Contents
Message to Our Unitholders
Corporate Profile
Our Corporate Strengths and Highlights
Message from Our Asset Manager
Account Highlights
Investment Unit Status
Status of Unitholders
Portfolio Topics
Property Location
List of Properties
Major Tenants
Overview of Portfolio Properties
Overview of Asset Management
Management of JPR
Investment and Management Policies
Overview of the Asset Manager

1
2
4
8
9
10
11
14
16
19
20
28
34
36
42

Management of the Asset Manager
Status of JPR's Assets Under Management
Capital Expenditures of Owned Real Estate
Other
Related-Party Transactions
Custodian, General Administrator and Other Agents
Structure of JPR
Balance Sheets
Statements of Income and Retained Earnings
Statements of Unitholders' Equity
Statements of Cash Flows
Notes to Financial Statements
Report of Independent Auditors
Other Financial Information
Investor Information

48
50
60
62
63
66
67
68
70
71
72
73
87
88
89

Corporate Profile
Japan Prime Realty Investment Corporation (JPR) was incorporated on September 14, 2001 as a Japanese
investment corporation (toshi hojin) under the Act on Investment Trusts and Investment Corporations(ITA) with the capacity to own and operate real estate and real estate-related assets. This type of investment
corporation is commonly referred to as a J-REIT. Pursuant to the ITA, we are not permitted to have
employees and we outsource basically all of our operations and activities to third parties, including Tokyo
Realty Investment Management, Inc., the Asset Manager.
Our portfolio currently consists of office and retail properties in Japan, with an emphasis on officeproperties in the greater Tokyo area. As of the end of the 22nd fiscal period, we own 59 properties,
consisting of 45 office properties and 14 retail properties. Forty-four of our properties are located in thegreater Tokyo area, and our other properties are located in other cities in Japan. These 59 properties
contain a total leasable area of approximately 450,943 m2 as of December 31, 2012.
We intend to continue selectively acquiring office and retail properties in order to expand and increase thevalue of our portfolio and to achieve sustainable growth with stable cash distributions to our unitholders
over the medium to long term. Our current investment strategy focuses primarily on office properties in thegreater Tokyo area, although we also invest in retail properties in the greater Tokyo area and we diversify
our investment portfolio geographically by investing in office and retail properties in major cities outside
the greater Tokyo area.
Our units have been listed on the J-REIT section of the Tokyo Stock Exchange since June 14, 2002,
following the initial public offering of our units. Our registered head office is located at 4-16 Yaesu
1-chome, Chuo-ku, Tokyo 103-0028, Japan. Our main telephone number is +81-3-3231-1051.

1

Our Corporate Strengths and Highlights
Our proven ten-year track record in achieving steady growth since our initialpublic offering.
We have steadily increased the asset value of our portfolio to maintain stable distributions to ourunitholders since our initial public offering in June 2002. We hold assets with an aggregate acquisition priceof approximately ¥391,980 million, which is one of the largest holdings among J-REITs with a portfolio of
office and retail properties.

Investments focused on office properties in the greater Tokyo area.
As of December 31, 2012, we own 59 properties inJapan. Based upon our internal classifications, 45
of our current properties are office properties and
14 are retail properties. Our portfolio is focusedon office properties located in the greater Tokyo
area, which we believe have medium- to long-term
growth potential. Of the 59 properties, properties in
the greater Tokyo area constitute 82.4% of our total
portfolio, office properties constitute 75.7% of our
total portfolio and office properties in the greater
Tokyo area constitute 66.1% of our total portfolio,each on an acquisition price basis.
* The figures have been rounded to the first decimal place.

End of the 22nd Fiscal Period

Other Cities 17.6%
Retail(Other Cities)

8.1%
Office(Other Cities)

9.6%
Retail(Greater
Tokyo Area)

16.2%
OfficeOffice(Central Tokyo)

46.4%(Greater Tokyo)

19.7%

Greater Tokyo Area 82.4%

Stable financial conditions.
We believe that we have prudent financial governance and effectively control our level of interest-bearing
debt. Although under our Asset Manager’s guidelines, we are required to keep our asset-based loan-to-value(LTV) ratio at or below 55%, we have set our target range of capitalization-based LTV as approximately
40% to 50%, although our capitalization-based LTV may diverge from the target range depending on thecircumstances. In addition, we have diversified maturity dates, have obtained fixed rates for long-term loans
and, to avoid refinancing risks, have established a commitment line in total of ¥28 billion.

Environmental policies that strengthen our brand.
We have adopted environmental policies which we believe are some of the best among the environmental
policies of J-REITs and public companies in Asia, as reflected by certain third-party environmental
assessments. Part of our brand strategy includes ensuring customer satisfaction through safety andenergy-saving services and facilities. To this end, we have implemented energy conservation policies with
an emphasis on cost and energy management, environmental property analysis, agreements with utility
companies, and introduction of energy-efficient equipment and facilities.

2

Distribution per Unit
21st Fiscal Period (actual)

22nd Fiscal Period (actual)

23rd Fiscal Period (forecast)¥6,430¥6,093¥5,800Assets Held¥391,980 million¥380,984 million(21st period end)

(22nd period end)

*Figures are total acquisition prices.

Occupancy Rate
Stable and High Occupancy

Average occupancy rate for the 1st through 22nd fiscal periods
Occupancy rate for the 22nd fiscal period

95.6%
94.4%

*Figures are period-average occupancy rates at end of month.

LTV (interest-bearing debt ratio to total assets)

Conservative operations with LTV at less than 50%

49.3 %(21st period end)

44.9 %(22nd period end)

*LTV is based on total assets at end of period.

Credit Ratings Assigned to JPR
R&I

Standard & Poor's(Long-term)AA(Stable)(Short-term)

A A-1(Stable)Moody's

A3(Negative)**The rating outlook was changed from "negative" to "stable" on February 4, 2013.

3

Message from Our Asset Manager
I would like to extend my heartfelt
gratitude to you, our unitholders, for the
support you have given to Japan Prime
Realty Investment Corporation (JPR).
On behalf of Tokyo Realty Investment
Management, Inc. (TRIM), the asset
management company of JPR, I would
like to give an overview of management
results and future outlook of JPR.
Satoshi Okubo
President and Chief Executive Officer (CEO)Tokyo Realty Investment Management, Inc.

■ Ten Years Since Listing
Growth to One of the Largest Holdings among■ Overview of Financial Results for the
22nd Period

J-REITs with a Combined Portfolio and Track

Achieving Period-on-Period Increase in Revenues andRecord of Stable Management over the Long Term

Profits for Three Straight Periods

JPR was listed on the Real Estate Investment

JPR achieved a period-on-period increase both

Trust (J-REIT) Section of the Tokyo Stockin revenues and profits for the 22nd fiscal period

Exchange on June 14, 2002 as the fifth investment

ended December 2012, marking the third such fiscal

corporation in Japan, and celebrated its tenth

period, thanks to contributions to earnings by theanniversary in June 2012. Its asset size has grown

full-period of operation of Otemachi 1-6 Plan (Landsteadily since listing, surpassing ¥390 billion as ofwith Leasehold Interest) (tentative name), which is

December 31, 2012, which JPR boasts is one oflocated in Chiyoda Ward, Tokyo and acquired in

the largest holdings among listed J-REITs with aMarch 2012, and Yakuin Business Garden locatedcombined portfolio of office and retail properties.

in Chuo Ward, Fukuoka City and acquired in

The occupancy rate of the portfolio has been

August 2012. Meanwhile, distribution per unit

stable, with the average since listing standingwas ¥6,093, partly impacted by the increase in theat 95.6%. This has enabled JPR to deliver

number of investment units as a result of the public

dividends 22 times in total through the latest fiscaloffering conducted in July 2012.

period, achieving a track record with an average
We at TRIM, to which JPR has assigned its asset■ Environment Surrounding Real EstateBusinessmanagement, seek to maximize unitholder value by

Properties owned by J-REITs Anticipated to Reboundstably operating this high-quality portfolio of assets.

Ahead of Office Property Leasing Market Recovery

distribution per unit of ¥6,181.

The investment unit price in the J-REIT market
has rebounded significantly, thanks to such factors
4Changes in Vacancy Rates and Rent Levels in 23 Wards of Tokyo
Advertised rent (right axis)
Average vacancy rate (left axis)

Average vacancy rate of office properties owned by J-REITs (left axis)

10.0

16,0009.0

15,5008.0

15,0007.0

14,5006.0

14,0005.0

13,5004.0

13,0003.0

12,5002.0

12,0001.0

11,50011,000

0
Ja

n

Ja

20

n

03

Ja

20

n

04

Ja

20

n

05

Ja

n

20

06

Ja

n

20

07

Ja

20

n

08

Ja

20

n

09

Ja

20

n

10

Ja

20

n

11

20

12

Note: The advertised rent and average vacancy rate in the 23 wards of Tokyo have been prepared by TRIM based on the Office Rent Data 2013 and the Office Market Survey Monthly Report publishedby Sanko Estate. The average vacancy rate of office properties owned by J-REITs has been prepared by TRIM based on the Statistics on Real Estate Investment Corporations published by The
Investment Trust Association, Japan.

as the change of the Japanese government at theyear, and the gap between supply and demand is

end of last year and the announcement of politicalgradually narrowing. Meanwhile, the rent levels

measures by the new administration to get rid ofare projected to remain on the lower side as it will

deflation, and we actually sense that the industry

take more time for the vacancy rate to decrease tohas begun to feel positive.

a certain degree. Nevertheless, given the restrained

In the J-REIT market, the fund procurement

supply of Tokyo office space in 2013 and after, andenvironment remains favorable, including

an upward reversal of rents observed for some large,

borrowings from financial institutions, with IPOs

blue-chip properties, we anticipate that rents may

and public offerings being conducted one after

bottom out toward the end of the fiscal year ending

another since January 2013. Against the backdrop

this March. Moreover, we believe that J-REITs withof this situation, willingness to invest in real estate

excellent asset portfolios may expect improvement

is becoming stronger and the conditions for theof the vacancy rate ahead of statistical data and an

activation of the transaction market are being met.

earlier upward reversal of the rent levels.

In the office property leasing market, the vacancy
rate continues at a high level due to the lingering■ New Property Acquisitions

impact of the large volume of Tokyo office space

Blue-chip Properties Acquired by Taking Advantage

supplied and the resulting “secondary vacancies,”of Sponsor Support

among other factors. However, strong tenant

JPR believes that the current situation presents ademand for office integration and consolidation

good opportunity for acquiring excellent properties,

intentions have surfaced since the latter half of lastas the office property leasing market still requires
5Message from Our Asset Manager■ Overview of Operations
Securing Capacity for Internal Growth throughRecovery of Occupancy Rate
The average occupancy rate of JPR’s portfolio
for the 22nd fiscal period was 94.4%, remaining
flat from the previous fiscal period. At the closingof the 22nd fiscal period, we assumed that thiswould decrease to 93.7% because of occurrence ofcontract cancellations by large tenants. However,as activities to invite tenants proceeded better thaninitially assumed, primarily for the office properties
in Tokyo CBDs, the occupancy rate eventuallysurpassed the assumption by 1.2 percentage points
to reach 94.9%.
As the office property leasing market gradually
heads for recovery, selection of properties by tenants
is increasingly polarized, with tenants showing asome more time to bottom out. JPR will continue totendency to favor properties that feature highly

proactively investigate investment focused on officeearthquake-resistant structures or facilities taking

properties in Tokyo (Central Tokyo and Greater

into account energy saving and business continuity

Tokyo) (hereafter, the Tokyo office properties),

plans. JPR recognizes that there is room remaining

along with retail properties and office properties infor its occupancy rate to increase beyond the current

regional cities, with an aim to improve the portfolio

level. We will continue to ensure our responses toquality and stabilize earnings.

tenant needs and seek operations and management

Over the past twelve months, JPR conductedthat should enhance customer satisfaction.

investment totaling approximately ¥47 billion in
two properties – Otemachi 1-6 Plan (Land with

■ Status of Financial Operations

Leasehold Interest) (tentative name), situated in

Reduction of Costs of Interest-Bearing Debts Baseda prime location in central Tokyo, and Yakuin

on Conservative Financial Standing

Business Garden located in Fukuoka where the

In July 2012, JPR conducted its fifth publicmarket is expected to recover. These two properties

offering of investment units. Demand fromhave been acquired by taking advantage of theinvestors within and outside Japan successfullysponsor support, and otherwise may not have beenrose to about five times the offering volume despite

available in the real estate transaction market.

an environment in which there were concerns

Having sponsors’ pipelines that enable

regarding the European sovereign debt problem,

acquisitions of such properties represents a strength

and JPR succeeded in raising funds totaling ¥20.7

of JPR in conducting external growth. Goingbillion. The fund procurement helped JPR’s ratio of

forward, we will continue to promote property

interest-bearing debts (LTV on a total asset basis)acquisitions that should contribute to the growth of

to decrease from 49.3% to 44.9% (as of the end of

the portfolio.

the 22nd fiscal period) and aided in JPR regaining

6

its capacity for further debt financing to acquire
properties.
Moreover, continuous endeavors have been

Promotion of JPR Brand Strategy
The “JPR Brand Strategy” is positioned as one of our internal
strategies to increase the earnings ratios and asset values

made to reduce financial costs so as to make theof JPR’s strategies through improving tenant satisfaction.

most of the favorable lending environment. The

This brand strategy is based on the brand concept of

average interest rate of JPR’s long-term interestbearing debts has decreased to 1.47%, down by
approximately 0.4 percentage points from the level“A/3S,” which offers the ultimate in “Amenities” and optimal
space by focusing on “Service,” “Safety” and “Save Energy(environment).” JPR’s office building brand strategy is built
around the active promotion of these objectives.

of two years ago.
JPR is resolved to continue its conservative
financial operations built upon stably controlling
LTV and other measures, as it conducts refinancing

Amenity

SafetyCreating a comfortable
space for workers

Providing safety
and security

to long-term fixed interest debt as well as diversifying

Servicerepayment dates of borrowings to address future

Providingattentive services

interest rate rises and refinancing risks.

■ Future Outlook

Save Energy

Pursuing Stable Portfolio Management andOperating facilities
in an environmentallyconscious manner

Enhancement of Unitholder Value
The real estate business and the environment
surrounding J-REITs are heading for recovery.
JPR will endeavor to continue stable portfolio
management by increasing the occupancy rate andimproving the balance of income and expenses

properties. Through these and other measures,

through intensive cost management. JPR will also

we aim to construct a portfolio that will lead towork to conduct strictly selective investment in

the steady growth of JPR into the future andthe Tokyo office properties and other blue-chipenhancement of unitholder value.

Career Highlights❚ Joined Tokyo Tatemono Co., Ltd. in 1977.
❚ Serving in the Second Building Leasing Department from 1996, engaged in overall management andadministration.
❚ Appointed General Manager of Residential Management Department in 1998 and supervised
development, sale and operational management.
❚ Appointed Director and Head of Kansai Branch Office in 2005 and supervised commercial
properties, residential development and urban development businesses.
❚ Joined Tokyo Realty Investment Management, Inc. in June 2010, took office as President and CEO
and has been supervising the company in that capacity to date.

7

Account Highlights(All amounts in millions of yen unless otherwise stated)

18th Fiscal Period
ended
December 2010

19th Fiscal Period
endedJune 2011

20th Fiscal Period
ended
December 2011

21st Fiscal Period
endedJune 2012

22nd Fiscal Period
ended
December 2012

Operating revenues

11,87011,529

11,772

12,345

12,963

Ordinary income

4,039

4,075

4,201

4,597

5,026

Net income

4,039

4,010

4,200

4,596

5,025

Total cash distributions

4,061

4,011

4,201

4,597

5,026

Total assets

360,904

360,004

360,699

396,017

401,984

Total unitholders' equity

175,502

175,452

175,640

176,035

197,168

48.6

48.7

48.7

44.5

49.0

Unitholders' equity per unit (yen)245,458

245,387245,651

246,204

238,992

Cash distribution per unit (yen)

5,680

5,611

5,876

6,430

6,093

Operating Revenues and Net
IncomeTotal Assets andTotal Unitholders' Equity

Equity ratio (%)

15,000500,000

12,000400,000

Cash Distribution per Unit
8,000

6,000

300,000

9,000

4,000
6,000

200,000

3,000

100,000

2,000

0

8

18th
FiscalPeriod19th
FiscalPeriod20th
FiscalPeriod21st
FiscalPeriod22nd
FiscalPeriod0

18th
FiscalPeriod19th
FiscalPeriod20th
FiscalPeriod21st
FiscalPeriod22nd
FiscalPeriodOperating Revenues (million yen)

Total Assets (million yen)

Net Income (million yen)

Total Unitholders' Equity (million yen)0

18th
FiscalPeriod19th
FiscalPeriod20th
FiscalPeriod21st
FiscalPeriodCash Distribution (yen)

22nd
FiscalPeriodInvestment Unit Status
Our units are listed on the Tokyo Stock Exchange. The following table indicates, for the periods indicated,
the trading price and trading volume of our units on the Tokyo Stock Exchange and:❚ the high and low levels of the Nikkei Stock Average, an index of 225 selected stocks listed on the First Sectionof the Tokyo Stock Exchange, published by Nikkei Inc.;❚ the high and low levels of the TOPIX, which is a weighted index of the market value of all stocks tradedon the First Section of the Tokyo Stock Exchange, published by the Tokyo Stock Exchange; and❚ the high and low levels of the Tokyo Stock Exchange REIT Index, which is a capitalization-weighted index
based on all J-REITs listed on the Tokyo Stock Exchange, published by the Tokyo Stock Exchange.

Historical Unit Price
As of February 6, 2013Market capitalization: ¥218.4 billion
High:¥564,000 (May 7, 2007)
Low:¥130,300 (October 28, 2008)
28,000 Unit price at end of
22nd Fiscal Period:¥249,200 (December 28, 2012)

Trading
Volume32,000

Trading Volume (units)

Unit
Price
580,000

Unit Price (yen)520,000

PO
Offering: ¥449,820

24,000460,000

20,000400,000

16,000340,000

12,000Listed Tokyo Stock Exchange
Offering: ¥200,000

8,000

PO
Offering: ¥272,440
PO
Offering: ¥237,160

280,000
220,000

PO
Offering: ¥168,101

4,000

160,0000

100,000
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12

Note: Unit prices are based on closing prices.

Market Price Information
Average
Tokyo Stock Exchange
Daily
(1)
Price per Unit
Trading
Volume of
Units
High
Low
Calendar year 2010:
First quarter
Second quarter
Third quarter
Fourth quarter
Calendar year 2011:
First quarter
Second quarter
Third quarter
Fourth quarter
Calendar year 2012:
First quarter
Second quarter
Third quarter
Fourth quarter
Source: Bloomberg.

NikkeiStock Average

Tokyo Stock
Exchange REIT Index

TOPIX

High

Low

High

Low

High

Low

208,100
224,900
207,300
253,200

172,900
187,700
173,900
189,000

4,233
1,771
1,367
2,063

11,097.14
11,339.30
9,795.24
10,370.53

9,932.90
9,382.64
8,824.06
9,154.72

979.58998.90870.73908.01881.57841.42804.67803.12948.90999.13940.051,130.70

873.28875.18883.09944.42257,500
238,300
214,800
204,000

192,600
210,000
192,800
173,700

2,187
1,381
1,303
1,174

10,857.53
10,004.20
10,137.73
9,050.47

8,605.15
9,351.40
8,374.13
8,160.01

974.63865.55874.34771.43766.73805.34728.85706.081,156.46
1,079.89
1,032.33
936.25926.83
1,018.94
912.43805.64

238,300
243,000
236,000
257,900

170,900
216,700
195,800
231,400

1,616
1,677
3,881
2,452

10,255.15
10,109.87
9,232.21
10,395.18

8,378.36
8,295.63
8,365.90
8,295.63

872.42856.05778.70859.80725.24695.51
706.46695.51996.381,004.16
1,021.46
1,116.37

819.42883.38933.00819.42

Note: (1) Based on the closing price.

9

Status of Unitholders
Breakdown of Unitholders at End of Period

700,000

600,000

500,000

Number ofUnitholders
32,000825,000 units
6.50%
53,639 units

Units
800,000

715,000 units
7.44%
53,251 units

715,000 units
7.33%
52,430 units

715,000 units
7.34%
52,482 units

715,000 units
7.74%
55,399 units

11.55%
82,627 units

11.46%
81,973 units

11.74%
83,982 units

11.27%
80,594 units

25.27%
180,711 units

25.37%
181,443 units

23.41%
167,425 units

27.97%
200,030 units

10.26%
84,674 units

28,00024,00025.88%
213,533 units

20,000400,000

16,00012,000300,000

200,000

53.01%
379,092 units

55.91%
399,886 units

55.53%
397,093 units

57.55%
411,582 units

57.35%
473,154 units
8,000

100,000

4,000

0

0
18th Fiscal Period

19th Fiscal Period

Financial Institutions(including securities firms)

ForeignInvestors

20th Fiscal Period

21st Fiscal Period

22nd Fiscal Period

Individuals

Number of Individual
Investors

Other Domestic
Corporations

Note: The composition ratio is rounded to two decimal places.

Principal Unitholders
The following table sets forth the number of units held by our principal unitholders and the percentage of our total
outstanding units as of December 31, 2012:
Number ofUnits Held

Percentage of
Outstanding
Units (%)

Japan Trustee Services Bank, Ltd. (Trust Account)

174,026

21.1

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

46,855

5.7

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

42,955

5.2

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

40,156

4.9

Unitholder

Tokyo Tatemono Co., Ltd.

29,300

3.6

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

27,258

3.3

Kawasaki Gakuen

25,000

3.0

Meiji Yasuda Life Insurance Company

24,0002.9

Nomura Bank (Luxembourg) S. A. (Standing Proxy: Sumitomo Mitsui Banking Corporation)

23,121

2.8

The Bank of New York Mellon as Agent BNYM AS EA Dutch Pension Omnibus 140016(Standing Proxy: Mizuho Corporate Bank, Ltd.)

10,163

1.2

Total

442,834

53.7

10

Portfolio Topics
Property Acquired in the 22nd Fiscal Period

Yakuin Business Garden

C-20(Office)

The acquisition of the Yakuin Business Garden isin accordance with JPR's fundamental investment
policies and investment stance in an effort toenhance and stabilize its investment portfolio by
acquiring a new office building in a major local city.
Location

Fukuoka City, Fukuoka
Type of Ownership

Ownership
Acquisition Date

August 8, 2012
Acquisition Price¥10,996 million
Site Area
Total Floor Space

4,348.43 m2
22,286.35 m2

Structure/Floors

SRC/14F
Completed

January 2009

Aim of Property Acquisition
The Yakuin area where the property is located is near Kyushu’s largest business center, Tenjin in Fukuoka
City. The location is excellent for transportation as it connects to multiple train and bus routes. Also, thearea hosts an assemblage of major companies such as the Kyushu Electric Power Company. Completed in
January 2009, the property is equipped with the latest office specifications, is very spacious with a standard
floor area of 400 tsubos and a ceiling height of 2.8m, and exhibits a very open office environment with glass
wall curtains surrounding three sides. Another feature of the property is its high resistance to earthquakes as
it employs a seismic damping structure design. It also features excellent visibility as the site is connected toroads on all sides.
Therefore, JPR highly evaluates this property as a large-scale regional office building with excellent
competitiveness and ability to attract alternative tenants, with relatively high yields and stable profitability
compared to offices in Tokyo.

11

Portfolio Topics
Portfolio Growth and Change in Average Occupancy Rate
Occupancy Rate (%)
100

95.2

94.0

95

93.8

94.3

93.1

92.6

94.9

96.1

97.7

98.3

99.0

90
85

Total Acquisition Price (billion yen)
400

350

Office Properties
in the Greater Tokyo Area

Retail Properties

Office Properties
outside the Greater Tokyo Area

Cumulative Acquisition
Price of Disposed Properties

300

245.3

250

197.6

200

202.6

209.2

222.4

108.2

179.6
100.1

163.6
150

139.6
125.7

100

92.1

94.5

40.1

41.5
39.7

50

38.8
0

-50

52.7

13.2

99.2
77.4

13.2

100.1

91.2
43.1

57.5

43.9

45.2
47.9

47.9

39.7
33.2

100.1

48.3

45.2

45.2

77.0

93.9

50.0

57.2

63.8

-0.4

-6.2

-9.3

-9.3

-9.3

-14.4

38.2

38.2

40.4

-0.4

-0.4

End of Jun.
2002

End of Dec.
2002

End of Jun.
2003

End of Dec.
2003

End of Jun.
2004

End of Dec.
2004

End of Jun.
2005

End of Dec.
2005

End of Jun.
2006

End of Dec.
2006

End of Jun.
2007

1st Period

2nd Period

3rd Period

4th Period

5th Period

6th Period

7th Period

8th Period

9th Period

10th Period

11th Period

27

30

32

38

42

42

42

44

46

48

3.5

4.1

4.3

4.3

4.2

4.7

4.8

4.7

4.8

5.1

Number of25
properties
Acquisition
price per property 3.6

Notes:(1) “Asset size” represents the aggregate acquisition price of the properties in our portfolio as of the relevant date.
(2) “Cumulative Acquisition Price of Disposed Properties” represents the cumulative acquisition prices (at the time of acquisition) of the properties sold up to the relevant date and includes the relevant
amount in respect to the part of JPR Jingumae 432 which was sold on June 1, 2010.
(3) We changed our investment policy in 2009 to shift our focus to office properties in the greater Tokyo area so that properties in the greater Tokyo area would generally constitute between 80% and
90% of the aggregate investment amount of our portfolio, and office properties would generally constitute between 70% and 90% of the aggregate investment amount of our portfolio (previously,
the percentage of the properties in the greater Tokyo area was generally 60%, and the percentage of the office properties was generally 80% of the aggregate investment amount of our portfolio).
(4) The occupancy rate as of each date above represents the average occupancy rate for the fiscal period ended on such date. The average of all such occupancy rates shown above is 95.6%.

12

98.7

98.0

97.0

96.2

96.4

96.1

93.6

94.0

95.0

94.8

380.9

331.2
299.4
275.1

341.5

341.5

310.6

280.6
259.2
184.1

114.7

391.9

344.9

251.9

135.7

94.4

141.6

43.1

43.1

39.4

93.9

96.1

-14.4

209.5

219.8

219.8

259.2

223.2

172.9

37.5

31.1

31.1

26.5

26.5

26.5

26.5

26.5

99.5

95.3

95.3

95.2

95.2

95.2

95.2

95.2

95.2

-14.4

-18.1

-30.6

-30.6

-35.4

-35.4

-35.4

-35.4

-35.4

-35.4

End of Dec.
2007

End of Jun.
2008

End of Dec.
2008

End of Jun.
2009

End of Dec.
2009

End of Jun.
2010

End of Dec.
2010

End of Jun.
2011

End of Dec.
2011

End of Jun.
2012

End of Dec.
2012

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period

19th Period

20th Period

21st Period

22nd Period

49

50

52

51

53

55

56

56

57

58

59

5.1

5.5

5.3

5.8

5.8

6.0

6.1

6.1

6.0

6.5

6.6

13

Property Location(As of December 31, 2012)

A Central Tokyo
Shinjuku

A-11

A-14

Shinjuku Ward

A-12

A-5

Ichigaya

A-9
Chiyoda
Ward
A-17
A-4

A-4

Tokyo

A-21
Shibuya Ward

A-23

Harajuku

A-3
A-1

A-18

A-20
A-3
A-2 A-1

A-13

A-8
A-19
A-5 A-22

Chuo Ward

ShibuyaMinato Ward

A-2
Tamachi

A-15

A-6

Shinagawa

Gotanda

A-7

A-16

A-10
OhsakiShinagawa Ward

Office
● A-1
● A-2
● A-3
● A-4
● A-5
● A-6
● A-7
● A-8
● A-9
● A-10● A-11● A-12

14

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
Fukuoka Bldg.
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Bldg.

● A-13● A-14● A-15● A-16● A-17● A-18● A-19● A-20● A-21● A-22● A-23

Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.
Minami Azabu Bldg.
Shinagawa Canal Bldg.
Rokubancho Bldg.
JPR Harajuku Bldg.
Tokyo Tatemono Kyobashi Bldg.
JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
Otemachi 1-6 Plan (Land with
Leasehold Interest) (tentative name)Retail
■ A-1
■ A-2
■ A-3
■ A-4
■ A-5

JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
(Yurakucho Itocia)

A Central Tokyo

B Greater Tokyo

C Other Cities

Chiyoda Ward
Chuo Ward
Minato Ward

All other areas of Tokyo andChiba, Kanagawa andSaitama Prefecture

All other areas in Japan

Shinjuku Ward
Shinagawa Ward
Shibuya WardB Greater Tokyo
Musashiurawa

B-5

Office● B-1 Arca East
● B-2 JPR Chiba Bldg.
● B-3 JPR Yokohama Nihon
Odori Bldg.
● B-5 Shinyokohama 2nd
Center Bldg.
● B-6 Kawaguchi Center Bldg.
● B-7 JPR Ueno East Bldg.
● B-8 Tachikawa BusinessCenter Bldg.
● B-9 Rise Arena Bldg.
● B-10 Yume-ooka Office Tower● B-11 Olinas Tower● B-12 Tokyo Tatemono
Yokohama Bldg.

Minamiurawa
Kawaguchi

B-6
B-3

SAITAMA

CHIBA

B-8

Ikebukuro

B-1

TOKYO Tanashi

B-9 Ueno

B-7

Shinjuku

B-11
B-1
Kinshicho

TachikawaTokyo
ShibuyaChiba

B-2

ShinagawaMusashikosugi

B-4
KANAGAWA

KawasakiTanashi ASTA
Cupo-la Main Bldg.
JPR Musashikosugi Bldg.
Musashiurawa Shopping
Square■ B-6 Kawasaki Dice Bldg.

B-6

B-5

Shin-Yokohama

B-12

Yokohama
Nihon-Odori

B-10

Retail
■ B-1
■ B-3
■ B-4
■ B-5

Musashikosugi(New Station)

B-3

Kamiooka

C Other Cities
Office● C-1 Niigata Ekinan Center Bldg.
● C-4 Tokyo Tatemono Honmachi Bldg.
● C-7 JPR Hakata Bldg.
● C-9 JPR Naha Bldg.
● C-12 Sompo Japan Sendai Bldg.
● C-13 Sompo Japan Wakayama Bldg.
● C-14 Tenjin 121 Bldg.
● C-17 JPR Dojima Bldg.
● C-18 JPR Hakata-chuo Bldg.
● C-19 JPR Nagoya Fushimi Bldg.
● C-20 Yakuin Business Garden
Retail
■ C-1
■ C-3
■ C-4
■ C-5

OSAKA

JPR Umeda Loft Bldg.
Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
JPR Chayamachi Bldg.

FUKUOKA

C-7
C-14
C-18
C-20
NAHA

C-9

C-4
C-17
C-1
C-3
C-5

SENDAIC-12

NIIGATA

C-1

KOBE

C-4
NAGOYA

C-19
WAKAYAMA

C-13
15

List of Properties
Office Properties
The following tables provide basic summary information for our 45 current office properties as of December 31, 2012,
unless otherwise specified.
Property
Number

Property Name

Location

Acquisition Percentage
Book
Price (1) of Portfolio
Value (in(in
Acquisition
millions)
millions)
Price (%)

Land (m²)

Leasable Area
Owned orCo-ownedby JPR (m²)

Central Tokyo
A-1

Kanematsu Bldg.

Chuo-ku, Tokyo¥16,276

4.2¥14,853

1,751.13

7,994.02

A-2

Kanematsu Bldg. Annex

Chuo-ku, Tokyo

2,874

0.7

2,468

679.06

2,291.13

A-3

JPR Ningyo-cho Bldg.

Chuo-ku, Tokyo

2,100

0.5

1,991

550.062,804.56

A-4

Shin-Kojimachi Bldg.

Chiyoda-ku, Tokyo

2,420

0.6

2,404

657.803,318.81

A-5

JPR Crest Takebashi Bldg.

Chiyoda-ku, Tokyo

4,000

1.0

3,450

636.903,265.34

A-6

MS Shibaura Bldg.

Minato-ku, Tokyo

11,2002.9

10,897

8,992.18 (2)14,469.72

A-7

Gotanda First Bldg.

Shinagawa-ku, Tokyo

2,920

0.7

2,694

1,551.19

4,243.58

A-8

Fukuoka Bldg.

Chuo-ku, Tokyo

2,920

0.7

2,918

1,302.17

1,937.40

A-9

JPR Ichigaya Bldg.

Chiyoda-ku, Tokyo

5,100

1.3

5,296

1,058.04

4,224.96

A-10

Oval Court Ohsaki Mark West

Shinagawa-ku, Tokyo

3,500

0.9

3,115

4,006.00

4,088.44

A-11

Shinjuku Square Tower

Shinjuku-ku, Tokyo

10,1802.6

9,039

8,409.52 (3)11,150.78

A-12

BYGS Shinjuku Bldg.

Shinjuku-ku, Tokyo

15,121

3.9

15,7603,522.46

15,190.65

A-13

Across Shinkawa Bldg. Annex

Chuo-ku, Tokyo

710

0.2

619

858.481,253.39

A-14

Shinjuku Center Bldg.

Shinjuku-ku, Tokyo

21,0005.4

21,804

14,917.11

8,863.98

A-15

Minami Azabu Bldg.

Minato-ku, Tokyo

3,760

1.0

3,860

778.093,405.73

A-16

Shinagawa Canal Bldg.

Minato-ku, Tokyo

1,870

0.5

1,817

828.821,700.57

A-17

Rokubancho Bldg.

Chiyoda-ku, Tokyo

2,800

0.7

2,902

716.952,488.36

A-18

JPR Harajuku Bldg.

Shibuya-ku, Tokyo

8,400

2.1

8,734

1,205.07

4,760.09

A-19

Tokyo Tatemono Kyobashi Bldg.

Chuo-ku, Tokyo

5,250

1.3

5,253

547.103,499.31

A-20

JPR Nihonbashi-horidome Bldg.

Chuo-ku, Tokyo

5,100

1.3

5,104

937.595,299.89

A-21

JPR Sendagaya Bldg.

Shibuya-ku, Tokyo

15,0503.8

15,2482,217.49

6,177.74

A-22 (4)Ginza Sanwa Bldg.

Chuo-ku, Tokyo

3,400

0.9

3,636

1,119.27

1,899.27

A-23

Otemachi 1-6 Plan (Land with Leasehold
Interest)

Chiyoda-ku, Tokyo

36,0009.2

38,388

11,034.78

11,034.78

16

(As of December 31)

Property
Number

Property Name

Location

Acquisition Percentage
Book
Price (1) of Portfolio
Value (in(in
Acquisition
millions)
millions)
Price (%)

Land (m²)

Leasable Area
Owned orCo-ownedby JPR (m²)

Greater Tokyo
B-1

Arca East

Sumida-ku, Tokyo

5,880

1.5

4,605

3,755.01

7,022.76

B-2

JPR Chiba Bldg.

Chiba, Chiba

2,350

0.6

2,420

1,382.35

5,535.67

B-3

JPR Yokohama Nihon Odori Bldg.

Yokohama, Kanagawa

2,927

0.7

2,661

1,100.59

6,066.53

B-5

Shinyokohama 2nd Center Bldg.

Yokohama, Kanagawa

920

0.2

909

841.712,642.38

B-6

Kawaguchi Center Bldg.

Kawaguchi, Saitama

8,100

2.1

7,164

4,524.61

15,455.96

B-7

JPR Ueno East Bldg.

Taito-ku, Tokyo

3,250

0.8

3,116

1,242.97

6,490.05

B-8

Tachikawa Business Center Bldg.

Tachikawa, Tokyo

3,188

0.8

2,973

2,047.22

4,731.04

B-9

Rise Arena Bldg.

Toshima-ku, Tokyo

5,831

1.5

5,558

9,377.28 (5)6,023.39

B-10

Yume-ooka Office Tower

Yokohama, Kanagawa

6,510

1.7

5,896

12,011.00

12,013.88

B-11

Olinas Tower

Sumida-ku, Tokyo

31,3008.0

29,82027,335.29

23,987.40

B-12

Tokyo Tatemono Yokohama Bldg.

Yokohama, Kanagawa

7,000

1.8

6,983

1,110.28

6,494.09

Other Cities
C-1

Niigata Ekinan Center Bldg.

Niigata, Niigata

2,140

0.5

1,799

2,706.99

5,326.88

C-4

Tokyo Tatemono Honmachi Bldg.

Osaka, Osaka

4,150

1.1

4,159

1,432.64

7,162.60

C-7

JPR Hakata Bldg.

Fukuoka, Fukuoka

2,900

0.7

3,189

1,214.63

6,581.15

C-9

JPR Naha Bldg.

Naha, Okinawa

1,560

0.4

1,431

959.87

3,946.42

C-12

Sompo Japan Sendai Bldg.

Sendai, Miyagi

3,150

0.8

2,388

1,895.67

7,129.05

C-13

Sompo Japan Wakayama Bldg.

Wakayama, Wakayama

1,670

0.4

1,287

1,128.45

4,874.91

C-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

2,810

0.7

2,298

1,164.39

3,257.73

C-17

JPR Dojima Bldg.

Osaka, Osaka

2,140

0.5

2,053

668.113,930.21

C-18

JPR Hakata-chuo Bldg.

Fukuoka, Fukuoka

1,920

0.5

1,791

680.633,290.42

C-19

JPR Nagoya Fushimi Bldg.

Nagoya, Aichi

4,137

1.1

4,178

1,610.38

7,086.37

C-20

Yakuin Business Garden

Fukuoka, Fukuoka

10,996

2.8

11,416

4,348.43

16,654.33¥296,780

75.7¥290,367

150,815.76

291,065.72

Total

Notes:(1) Acquisition price excludes consumption and other taxes.
(2) Includes land of the Trinity Shibaura property, which was developed together with the MS Shibaura Bldg.
(3) Includes land for the entire redevelopment area that includes the Shinjuku Square Tower.
(4) All properties are office properties, with the exception of A-22, which has both offices and retail stores.
(5) Includes land for the entire redevelopment area that includes the Rise Arena Bldg.

17

List of Properties
Retail Properties
The following tables provide basic summary information for our 14 retail properties.
Property
Number

Property Name

Location

Acquisition Percentage
Book
Price (1) of Portfolio
Value (in(in
Acquisition
millions)
millions)
Price (%)

Land (m²)

Leasable Area
Owned orCo-ownedby JPR (m²)

Central Tokyo
A-1

JPR Shibuya Tower Records Bldg.

Shibuya-ku, Tokyo¥12,000

3.1¥11,656

1,010.47

8,076.85

A-2

JPR Daikanyama

Shibuya-ku, Tokyo

2,160

0.6

2,199

277.12651.29A-3

JPR Jingumae 432

Shibuya-ku, Tokyo

4,275

1.1

4,340

198.101,027.33

A-4

Shinjuku Sanchome East Bldg.

Shinjuku-ku, Tokyo

2,740

0.7

2,728

2,578.69

2,347.81

A-5

Yurakucho Ekimae Bldg. (Yurakucho Itocia)

Chiyoda-ku, Tokyo

3,400

0.9

3,377

6,808.12

1,101.92

Greater Tokyo
B-1

Tanashi ASTA

Nishitokyo, Tokyo

10,2002.6

7,774

12,326.30

31,121.71

B-3

Cupo-la Main Bldg.

Kawaguchi, Saitama

2,100

0.5

1,888 15,008.28 (2)5,963.00

B-4

JPR Musashikosugi Bldg.

Kawasaki, Kanagawa

7,260

1.9

7,240

4,761.62

19,740.95

B-5

Musashiurawa Shopping Square

Saitama, Saitama

4,335

1.1

4,065

8,317.99

14,960.69

B-6

Kawasaki Dice Bldg.

Kawasaki, Kanagawa

15,0803.8

14,411

4,475.45

13,066.69

Other Cities
C-1

JPR Umeda Loft Bldg.

Osaka, Osaka

13,0003.3

12,572

3,518.68

18,586.97

C-3

Benetton Shinsaibashi Bldg.

Osaka, Osaka

5,430

1.4

5,250

609.315,303.98

C-4

Housing Design Center Kobe

Kobe, Hyogo

7,220

1.8

6,630

3,994.47

35,444.13

C-5

JPR Chayamachi Bldg.

Osaka, Osaka

6,000

1.5

6,014

592.452,484.39

Total

95,20024.3¥90,150

64,477.05

159,877.71

Office and Retail Total¥391,980

100.0¥380,518

215,292.81

450,943.43

Notes:(1) Acquisition price excludes consumption and other taxes.
(2) Includes land for the whole redevelopment area that includes the Cupo-la Main Bldg.

18

Major Tenants
Twenty Major Tenants by Leased Floor Area

TenantProperty

Leased Floor Area
as ofDecember 31,
2012 (1) (m²)

Percentage to
Total Leased
Floor Area as ofDecember 31,
2012 (1) (%)

ABC Development Corporation

Housing Design Center Kobe

35,444.13

8.3

Tokyo Tatemono Co., Ltd.

Shinjuku Square Tower (2)Shinjuku Center Bldg. (2)Kawasaki Dice Bldg. (2)33,215.95

7.7

Seiyu GK

Tanashi ASTA

31,121.71

7.2

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

19,740.95

4.6

The LOFT Co., Ltd.

JPR Umeda Loft Bldg.

18,586.97

4.3

Y.K. Tokyo Prime Stage

Otemachi 1-6 Plan (Land with Leasehold Interest)(tentative name)11,034.78

2.6

Olympic Corporation

Musashiurawa Shopping Square

9,558.51

2.2

Tower Records Japan Inc.

JPR Shibuya Tower Records Bldg.

8,076.85

1.9

Sompo Japan Insurance Inc.

Kawaguchi Center Bldg.
Yume-ooka Office Tower
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.

7,461.38

1.7

Taisei-Yuraku Real Estate Co., Ltd. (3)Rise Arena Bldg. (2)6,023.39

1.4

The Maruetsu, Inc.

Cupo-la Main Bldg.

5,963.00

1.4

Benetton Japan Co., Ltd.

Benetton Shinsaibashi Bldg.

5,303.98

1.2

Nitori Holdings Co., Ltd.

Musashiurawa Shopping Square

5,285.40

1.2

5,146.03

1.2

Shinagawa Canal Bldg.
Level-5 Inc.
Yakuin Business Garden
Hitachi Systems, Ltd.

JPR Nagoya Fushimi Bldg.

4,904.64

1.1

ATM Japan Ltd.

Olinas Tower

4,255.56

1.0

CMIC HOLDINGS Co., Ltd.

Gotanda First Bldg.

4,236.65

1.0Canon Imaging Systems Inc.

Niigata Ekinan Center Bldg.

4,078.97

0.9

Mitsubishi Electric Information Systems
Corporation

MS Shibaura Bldg.

3,922.74

0.9

Deloitte Touche Tohmatsu LLC

MS Shibaura Bldg.

3,922.74

0.9

Notes:(1) The figures have been rounded to the first decimal place. The leased floor areas of co-owned properties are portions owned by JPR.
(2) We have pass-through master lease arrangements with respect to these properties.

19

Overview of Portfolio Properties
Central Tokyo

Kanematsu Bldg.

A-1

OfficeKanematsu Bldg. Annex

RetailA-2

Chuo Ward, Tokyo

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Ningyo-cho Bldg.

¥2,874 million
679.06 m2
4,351.46 m2
SRC B1/8F
February 1993

A-3
Chuo Ward, Tokyo
Acquisition Price
Site Area

Acquisition Price
Site Area
Total Floor Space¥16,276 million
1,751.13 m2

Structure/Floors
Completed

Total Floor Space

S/RC/SRC B2/13F

Structure/Floors

February 1993

Completed2

14,995.09 m

Shin-Kojimachi Bldg.

A-4

JPR Crest Takebashi Bldg.

Chiyoda Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

MS Shibaura Bldg.

Acquisition Price
Site Area

657.80 m2

Total Floor Space

5,152.98 m2

Structure/Floors

SRC B1/9F

Completed

October 1984

Gotanda First Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed20¥11,200 million
8,992.18 m2
31,020.21 m2
SRC/RC/S B2/13F
February 1988

4,117.70 m2
SRC/RC B1/8F
December 1989

A-5

¥4,000 million
636.90 m2
4,790.68 m2
SRC B1/9F
September 1999

A-7

Minato Ward, Tokyo
Acquisition Price

550.06 m2

Chiyoda Ward, Tokyo¥2,420 million

A-6¥2,100 million

Shinagawa Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥2,920 million
1,551.19 m2
10,553.34 m2
SRC/RC B2/11F
July 1989

Central Tokyo

Fukuoka Bldg.

OfficeJPR Ichigaya Bldg.

A-8

A-9

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Oval Court Ohsaki Mark West

Chiyoda Ward, Tokyo
Acquisition Price¥2,920 million

Site Area

2

1,302.17 m

Structure/Floors

SRC B2/10F

CompletedMay 1990

Site Area
Total Floor Space
Structure/Floors
Completed

BYGS Shinjuku Bldg.

Shinjuku Square Tower

A-11

Acquisition Price¥10,180 million
Site Area

4,006.00 m2

2

8,409.52 m (entire redevelopment project)
Total Floor Space2

28,575.80 m

78,796.00 m2 (entire redevelopment project)

Structure/Floors

S/SRC B2/17F

S/RC/SRC B4/30F
Completed

June 2001

October 1994

Shinjuku Center Bldg.

A-14
Shinjuku Ward, Tokyo

Shinjuku Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Across Shinkawa Bldg. Annex

SRC B1/9F

Shinjuku Ward, Tokyo¥3,500 million

A-12

5,888.82 m2

March 1989

Shinagawa Ward, Tokyo
Acquisition Price¥5,100 million
1,058.04 m2

Total Floor Space

11,627.74 m2

A-10

Retail¥15,121 million
3,522.46 m2
25,733.10 m2
SRC B2/14F
April 1985

A-13
Chuo Ward, Tokyo

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥710 million
858.48 m2
5,535.90 m2
S/SRC B2/10F
June 1994

Acquisition Price
Site Area
Total Floor Space¥21,000 million
14,917.11 m2

Structure/Floors
Completed

SRC/RC/S B5/54F
October 19792

176,607.89 m

21

Overview of Portfolio Properties
Central Tokyo

Minami Azabu Bldg.

OfficeShinagawa Canal Bldg.

A-15

A-16

Minato Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Rokubancho Bldg.

Minato Ward, Tokyo
Acquisition Price¥3,760 million
778.09 m

Site Area

2

Total Floor Space

4,570.63 m2
S

Structure/Floors

9F

Completed

June 1992

JPR Harajuku Bldg.

A-17

Site Area
Total Floor Space
Structure/Floors
Completed

Tokyo Tatemono Kyobashi Bldg.

Acquisition Price
Site Area

2

Total Floor Space

4,205.09 m2

Structure/Floors

SRC B3/7F

Completed

October 1991

A-19

JPR Nihonbashi-horidome Bldg.

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Sendagaya Bldg.

828.82 m2
5,216.21 m2
S

B1/8F

July 2008

Shibuya Ward, Tokyo¥2,800 million
716.95 m¥1,870 million

A-18

Chiyoda Ward, Tokyo
Acquisition Price

Retail¥8,400 million
1,205.07 m2
6,466.94 m2
SRC B1/9F
March 1989

A-20
Chuo Ward, Tokyo¥5,250 million
547.10 m2
4,419.79 m2
SRC/S B1/10F
January 1981

A-21
Shibuya Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed22¥15,050 million
2,217.49 m2
7,683.19 m2
S

8F

May 2009

Acquisition Price
Site Area
Total Floor Space¥5,100 million
937.59 m2
2

7,190.82 m

Structure/Floors
Completed

SRC B1/9F
June 2002

Central Tokyo

Ginza Sanwa Bldg.

OfficeOtemachi 1-6 Plan

A-22

(Land with Leasehold Interest) (tentative name)

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Shibuya Tower Records Bldg.

RetailA-23

Chiyoda Ward, Tokyo¥3,400 million
1,119.27 m2
8,851.00 m2
SRC B2/9F
October 1982

A-1
Shibuya Ward, Tokyo

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Daikanyama¥12,000 million
1,010.47 m2
8,449.56 m2
SRC/S B3/8F
February 1992

Acquisition Price
Site Area
Total Floor Space¥36,000 million
11,034.78 m

2Structure/Floors
CompletedA-3
Shibuya Ward, Tokyo

Shibuya Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
CompletedShinjuku Sanchome East Bldg.

Acquisition Price¥2,160 million
277.12 m

Site Area

2

Total Floor Space

668.09 m2

Structure/Floors

RC B2/2F

Completed

July 2002

A-4

Yurakucho Ekimae Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed¥2,740 million
2,578.69 m2
24,617.65 m2
S/SRC/RC B3/14F
January 2007

¥4,275 million
198.10 m2
1,066.81 m2
S/SRC B1/7F
February 2006

A-5

(Yurakucho Itocia)

Shinjuku Ward, Tokyo
Acquisition Price

April 2014 (planned)

approx. 198,000 m2

JPR Jingumae 432

A-2

RC/SRC/S B6/F38

Chiyoda Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥3,400 million
6,808.12 m2
71,957.65 m2
S/SRS B4/20F
October 200723

Overview of Portfolio Properties
Greater Tokyo

Arca East

OfficeJPR Chiba Bldg.

B-1

B-2

Sumida Ward, Tokyo
Acquisition Price
Site Area

Chiba City, Chiba
Acquisition Price¥5,880 million

Site Area

3,755.01 m2

Total Floor Space
Structure/Floors
Completed

34,281.86 m2

Structure/Floors

S/SRC B3/19F

B-3

Completed

Site Area
Total Floor Space
Structure/Floors
Completed

Kawaguchi Center Bldg.

January 1991

B-5

Acquisition Price

Total Floor Space
Structure/Floors
Completed

Tachikawa Business Center Bldg.

1,100.59 m2

841.71 m2

Total Floor Space

9,146.52 m2

Structure/Floors

SRC B1/11F

Completed

October 1989

Site Area
Total Floor Space
Structure/Floors
Completed

24

S/SRC B2/12F

JPR Ueno East Bldg.

B-7
Taito Ward, Tokyo
Acquisition Price¥8,100 million

Site Area

4,524.61 m2

Structure/Floors

S/SRC B2/15F

CompletedFebruary 1994

¥3,250 million
1,242.97 m2

Total Floor Space

28,420.85 m2

8,490.44 m2
S/SRC B1/8F
October 1992

Rise Arena Bldg.

B-8¥3,188 million
2,047.22 m

7,781.93 m2

August 1991

B-9

Tachikawa City, Tokyo
Acquisition Price¥920 million

Site Area

Kawaguchi City, Saitama

Site Area

S/SRC B1/13F

Yokohama City, Kanagawa¥2,927 million

B-6

Acquisition Price

9,072.57 m2

Shinyokohama 2nd Center Bldg.

Yokohama City, Kanagawa
Acquisition Price¥2,350 million
1,382.35 m2

Total Floor SpaceMarch 1997

JPR Yokohama Nihon Odori Bldg.

22

14,706.36 m

S/SRC B1/12F
December 1994

RetailToshima Ward, Tokyo
Acquisition Price¥5,831 million
Site Area

2

9,377.28 m (entire redevelopment project)
Total Floor Space

91,280.94 m2 (including residential tower)

Structure/Floors

RC/SRC/S B3/42F*
Completed

January 2007
*The commercial tower portion has 2 basement floors and 15 floors above ground.

Greater Tokyo

Yume-ooka Office Tower

B-10

OfficeOlinas Tower

B-11

Yokohama City, Kanagawa
Acquisition Price
Site Area

Sumida Ward, Tokyo
Acquisition Price¥6,510 million

Structure/Floors
Completed¥31,300 million

Site Area

12,011.00 m2

Total Floor Space

Retail27,335.29 m2

Total Floor Space

185,974.87 m2

Structure/Floors

S/SRC/RC B3/27F

257,842.41 m2
SRC/RC/S B2/45F*

Completed

March 1997

March 2006

*The office building has 31 floors above ground and 2 floors underground.

Tokyo Tatemono Yokohama Bldg.

B-12

Tanashi ASTA

B-1

Yokohama City, Kanagawa
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Cupo-la Main Bldg.

Nishitokyo City, Tokyo
Acquisition Price¥7,000 million
1,110.28 m2

12,326.30 m2

Total Floor Space

8,772.51 m2

Structure/Floors

SRC B1/9F

February 1995

JPR Musashikosugi Bldg.

B-4

Kawaguchi City, Saitama

Kawasaki City, Kanagawa

Acquisition Price

Acquisition Price¥7,260 million¥2,100 million
Site Area

Site Area

Total Floor Space

Total Floor Space

15,008.28 m2 (entire redevelopment project)
48,321.96 m2

Structure/Floors

4,761.62 m2

Structure/Floors

Completed

Completed

March 1983

January 2006

B-5

Kawasaki Dice Bldg.

B-6

Saitama City, Saitama
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥4,335 million
8,317.99 m2
28,930.36 m2
S

B1/4F

October 2005

18,394.32 m2
SRC/RC/S B1/6F

S/RC/SRC B2/10F

Musashiurawa Shopping Square

80,675.27 m2
SRC B2/17F

CompletedMay 1981

B-3¥10,200 million

Site Area

Kawasaki City, Kanagawa
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥15,080 million
4,475.45 m2
36,902.01 m2
S/SRC/RC B2/11F
August 2003

25

Overview of Portfolio Properties
Other Cities

Niigata Ekinan Center Bldg.

OfficeTokyo Tatemono Honmachi Bldg.

C-1
Niigata City, Niigata

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Hakata Bldg.

Acquisition Price
Site Area

2

Structure/Floors

S/SRC B1/10F

Completed

March 1996

Site Area

JPR Naha Bldg.

Total Floor Space
Structure/Floors
Completed

Sompo Japan Sendai Bldg.

C-9

Acquisition Price
Site Area

2

Structure/Floors

S/RC/S B1/12F/1F

Completed

June 1985

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
CompletedTenjin 121 Bldg.

C-13

Acquisition Price
Site Area

1,895.67 m2

Total Floor Space

10,783.52 m2

Structure/Floors

SRC B1/12F

Completed

December 1997

JPR Dojima Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed26¥2,810 million
1,164.39 m2
8,690.95 m2
S/SRC 13F
July 2000¥1,670 million
1,128.45 m2
6,715.07 m2
S

9F

July 1996

C-17

Fukuoka City, Fukuoka
Acquisition Price

SRC/S 12F

Wakayama City, Wakayama¥3,150 million

C-14

5,780.71 m2

October 1991

Sompo Japan Wakayama Bldg.

Sendai City, Miyagi¥1,560 million
959.87 m2

Total Floor Space

9,828.73 m2

C-12

SRC B3/9F

Naha City, Okinawa¥2,900 million
1,214.63 m

14,619.52 m2

February 1970

Fukuoka City, Fukuoka
Acquisition Price¥4,150 million
1,432.64 m2

Total Floor Space

19,950.42 m2

C-7

C-4
Osaka City, Osaka¥2,140 million
2,706.99 m

RetailOsaka City, Osaka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥2,140 million
668.11 m2
5,696.01 m2
SRC B2/9F
October 1993

Other Cities

JPR Hakata-Chuo Bldg.

OfficeJPR Nagoya Fushimi Bldg.

C-18
Fukuoka City, Fukuoka
Acquisition Price
Site Area
Total Floor Space

Completed

Yakuin Business Garden

Acquisition Price
Site Area

2

Total Floor Space

3,874.81 m2

Structure/Floors

Structure/Floors

SRC 8F

CompletedFebruary 1993

JPR Umeda Loft Bldg.

C-20

Site Area
Total Floor Space

¥10,996 million
4,348.43 m2
22,286.35 m2

Structure/Floors
Completed

SRC/14F
January 2009

Benetton Shinsaibashi Bldg.

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Osaka City, Osaka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Chayamachi Bldg.

¥5,430 million
609.31 m

2

5,303.98 m2
S

B2/10F

February 2003

1,610.38 m2
10,201.44 m2
SRC B1/9F
March 1991

Osaka City, Osaka

Housing Design Center Kobe

C-3

¥4,137 million

C-1

Fukuoka City, Fukuoka
Acquisition Price

C-19
Nagoya City, Aichi¥1,920 million
680.63 m

Retail¥13,000 million
3,518.68 m2
17,897.56 m2
SRC B1/8F
April 1990

C-4
Kobe City, Hyogo

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥7,220 million
3,994.47 m2
33,877.71 m2
SRC/S B2/11F
June 1994

C-5
Osaka City, Osaka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥6,000 million
592.45 m2
3,219.36 m2
S/SRC 9F
June 199427

Overview of Asset Management(1) Selected Financial Information
JPR’s selected financial information for the period ended December 31, 2010, June 30, 2011, December 31, 2011, June 30, 2012and December 31, 2012 has been derived from our audited financial statements for those periods. Our fiscal periods cover every
six months through the end of June 30 and December 31 of each year, except that our first fiscal period was the period from
September 14, 2001, the date of our incorporation, to June 30, 2002.
We prepare our financial statements in accordance with Japanese GAAP, which differ in certain material respects from IFRS and
U.S. GAAP.

December 31,
2010

As of/for the Fiscal Period Ended
June 30,
December 31,
June 30,
2011
2011
2012
(in thousands, except per unit data and ratios)

December 31,
2012

Statements of Income Data:
Operating revenue:
Rent revenue – real estate
Gain on sale of real estate¥11,870,005—¥11,529,624—¥11,772,766—¥12,345,900—¥12,963,538—

Total operating revenue

11,870,005

11,529,624

11,772,766

12,345,900

12,963,538

Operating expenses:
Expenses related to rent business
Asset management fees
Administrative service and asset custody fees
Directors’ compensation
Trust fees
Other operating expenses

5,361,037
421,951
71,0646,600
49,55273,413

5,296,139
415,874
71,0746,600
49,30087,1385,357,207
421,61374,6596,600
43,737
105,346

5,217,950
443,284
74,5756,600
42,693167,020

5,519,704
465,059
77,5886,600
40,19489,011

Total operating expenses

5,983,620

5,926,127

6,009,163

5,952,124

6,198,159

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary losses
Income before income taxes
Income taxes

5,886,384
12,8891,859,361
4,039,912—
4,039,912
627

5,603,496
51,9791,580,007
4,075,468
64,122(6)4,011,345
616

5,763,602
10,791
1,573,392
4,201,000—
4,201,000
616

6,393,776
62,447
1,858,935
4,597,288—
4,597,288
605

6,765,379
10,318
1,749,367
5,026,329—
5,026,329
605

Net income¥4,039,284¥4,010,728¥4,200,383¥4,596,683¥5,025,724¥360,904,581¥360,004,870¥360,699,107¥396,017,887¥401,984,316

42,899,000

36,116,000

39,016,000

48,143,000

30,618,000

78,505,000
42,500,000
7,428,462
10,345,814
175,502,523

84,147,000
42,500,000
7,342,133
10,283,837
175,452,052

81,489,000
42,500,000
7,711,990
10,147,460
175,640,571

104,438,000
42,500,000
7,408,110
11,289,504
176,035,914

100,439,000
49,500,000
7,871,730
11,345,751
197,168,609

Amounts per Unit(1):Net income(2)Funds from operations (FFO)(3)
Cash distributions
Net assets¥5,6498,353
5,680
245,458¥5,6098,372
5,611
245,387¥5,874
8,428
5,876
245,651¥6,4288,883
6,430
246,204¥6,2338,311
6,093
238,992

Other Financial Data:
Debt service coverage ratio(4)Net income payout ratio(5)

4.9x
100.5

5.1x
100.0

5.3x
100.0

5.4x
100.0

6.0x
100.0

Balance Sheet Data:
Total assets
Short-term loans payable (including current portionof long-term loans payable and investment
corporation bonds)
Long-term loans payable
Investment corporation bonds
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Total unitholders’ equity

Notes:(1) Except for net income per unit, amounts per unit have been calculated using the number of outstanding units as of the end of each relevant fiscal period.
(2) Calculated using the weighted average number of units outstanding during each fiscal period, or 715,000 units for the fiscal periods ended December 31, 2010,
June 30, 2011, December 31, 2011 and June 30, 2012, and 825,000 units for the fiscal period ended December 31, 2012.

28

(3) FFO is calculated as net income (or loss) excluding gain (or loss) on sale of real estate properties plus gain (or loss) on sales on investment securities,
extraordinary loss, depreciation and amortization.
(4) Debt service coverage ratio is calculated as net income before interest expense, tax, depreciation and amortization (excluding gain or loss on sale of real estateand extraordinary loss) divided by interest expense (including interest for investment corporation bonds) for the relevant period.
(5) Net income payout ratio is distributions expressed as a percentage of net income. Where the ratio is indicated as “100.0,” the actual net income payout ratio may
be slightly less than 100.0% as the amount distributed is subject to rounding down to the nearest yen based on the number of units outstanding.
(6) Consists of the costs incurred in repairing interiors and facilities damaged as a result of the Great East Japan Earthquake.

(2) 22nd Fiscal Period Asset Management
1) Milestones of JPR
Japan Prime Realty Investment Corporation (JPR) was established on September 14, 2001 under the Investment Trusts andInvestment Corporations Law (hereafter, the Investment Trusts Law), and was listed on the Tokyo Stock Exchange Real
Estate Investment Trust Section (securities code: 8955) on June 14, 2002 with 289,600 outstanding investment units. JPR
made its fifth additional public offering in July 2012, bringing the number of investment units issued and outstanding to825,000 units, including those issued by way of third-party allotment in August 2012. JPR has assigned the asset
management of its portfolio to Tokyo Realty Investment Management Inc., through which JPR aims to maximize unitholder
value by efficiently managing the portfolio of office properties and retail properties.
2) Management Environment
During the 22nd fiscal period, the Japanese economy was backed by reconstruction demand from the Great East Japan
Earthquake but showed negative growth for the period as a whole due to stagnant consumer spending associated with thetermination of government subsidies for eco-friendly car purchases as well as to stagnant foreign demand caused by thedelayed recovery of the U.S. economy and the slowdown of the Chinese economy. In particular, foreign demand dropped
significantly, with such factors as the overlapping of the yen’s appreciation and the issue over the Senkaku Islands.
The Office Property Leasing Market
In the 23 words of Tokyo, there was concern in the office property leasing market that the vacancy rate would rise because of
the construction completion of large-scale properties concentrating in the previous fiscal period on top of the worsening
Japanese economy. On the other hand, new demand was relatively strong primarily for better locations and relocations tointegrate offices as a result of considerations given to business continuity plans and the progress in rent adjustments. This
helped the vacancy to stay almost flat. Furthermore, with new supply coming to rest after a surge, expectations are arising
gradually for the office property leasing market to recover.
In regional cities, some areas are heading for relative stability in the market as new supply has come down to a modest pace.
Still, the vacancy rate stays at a high level, while rents continue to show a weak trend.
The Retail Property Leasing Market
Consumer confidence remained weak during the fiscal period, as the worsening economy made it hard to expect an increasein personal income. Meanwhile, urban retail properties in good locations, such as Ginza and Shinjuku, are presumably
almost bottoming out as a result of rent adjustments and other moves progressed since the financial crisis.
The For-Sale Real Estate Market
Conditions for vitalizing the for-sale real estate market are becoming full-fledged, as the fund procurement environment has
kept an easing tone and investors’ willingness to invest is returning to the level before the Lehman Shock. The gap in theprice targets between buyers and sellers still remains wide, but acquisitions of blue-chip properties are being conducted mostoften by using the sponsors’ pipelines, although there is also a sign of the gap shrinking in anticipation of the recovery in theleasing market.
3) Portfolio Management Status
New Property Acquisitions and Asset Replacement
JPR investigates possible investments mainly in office properties in central Tokyo, plus retail properties and office properties
in regional cities, with the primary aim of improving the quality and stabilizing earnings of the portfolio while paying
attention to balancing diversification of the portfolio, both in terms of location and asset class.
During the 22nd fiscal period, JPR acquired Yakuin Business Garden (acquisition price: 10.9 billion yen), resulting in thebalance of assets under management now totaling 59 properties, or 391.9 billion yen on an acquisition price basis, as of theend of December 2012. The total leasable floor space is now 450,943 m2 and the number of tenants is 534.
Operational Management of Portfolio
Throughout Japan, progress has been seen in integration of offices and relocation for consolidation with an aim to reduce
costs and for better locations, and tenants’ moves have become more activated, starting to create new demand. The leasing

29

market environment remains tough, however, partly because of the impact of the so-called “secondary vacancy” caused bytenants’ relocations.
Under such circumstances, JPR conducted management under a policy that pursues maintaining and improving occupancy
rates. Based on this policy, JPR kept close cooperation with property management companies, centering on Tokyo Tatemono
Co., Ltd., and brokers to attract new tenants through strategic leasing activities. As a result, JPR successfully secured newleases primarily for office properties in Tokyo CBDs, with the period-end occupancy rate increasing by 0.8 points to 94.9%
from 94.1% at the end of the previous fiscal period.
In terms of property management, based on JPR’s brand concept A/3S (Amenity/Service, Safety and Save Energy), JPR
continued to proactively implement renovations in an aim to create spaces where the workers feel satisfaction. As an
endeavor to implement energy-saving measures, JPR conducted replacement of lighting equipment in the common areas
with LED lamps and renovation of air-conditioning systems, which are expected to be effective in saving energy, at its
multiple properties. Furthermore, JPR is proactively engaged in environmental friendliness, continuously working to obtainenvironmental certifications (the DBJ Green Building Certification*1 and the recognition by GRESB*2).
*1 The DBJ Green Building Certification is a certification system by Development Bank of Japan Inc., designed to select superior real estate that meets thedemand of the times, with a purpose of promoting properties that are environmentally friendly, equipped to mitigate disaster and prevent crime, as well as meetthe various social requirements surrounding real estate from stakeholders (“Green Buildings”).
*2 GRESB, which stands for Global Real Estate Sustainability Benchmark, is a benchmark system for analyzing and evaluating sustainability of real estatecompanies, REITs and real estate private placement funds, in terms of environmental friendliness and social nature. It is based on surveys conducted by a groupof the same name composed of more than 20 organizations worldwide such as European pension asset managers.

Fund Procurement
During the 22nd fiscal period, JPR worked to expand its capacity for further debt financing and to reinforce its financial baseby procuring 20.7 billion yen through additional issuance of investment units (refer to (3) Additional Offerings, etc. for moredetails). Moreover, while conducting flexible debt financing in expanding the portfolio, JPR procured long-term fixedinterest funds through issuance of unsecured investment corporation bonds and bank borrowings, with an eye on avoiding
future interest rate fluctuation risks and remaining attentive to the diversification of repayment and redemption maturity
dates. By doing so, JPR pursued further financial stability.
As a result, the balance of total outstanding borrowings as of the end of the fiscal period was 131.00 billion yen, with
unsecured corporate bonds of 49.50 billion yen. With regards to JPR’s overall interest-bearing debt, the average interest rate
as of the end of the fiscal period (Note 1) was 1.5%, the interest-bearing debt ratio (Note 2) was 48.5% and the LTV (ratio ofinterest-bearing debt to total assets) at the end of the period (Note 3) was 44.9%.
Of these, the non-current portion of long-term interest-bearing debt that is hedged against risk of interest rate fluctuations
now comprises 83.0% of all interest-bearing debt, and the average maturity (Note 4) is 3.9 years. The current portion of
long-term interest-bearing debt is 30.60 billion yen.
The following represents the issuer ratings for JPR as of the end of this fiscal period.
Details of Corporate Credit Ratings as of December 31, 2012
Credit Rating Agency
Rating and Investment Information, Inc.
Standard & Poor's Ratings Japan K.K.
Moody's Japan K.K.

Corporate Credit Rating
AA- (Stable)
Long-term: A (Stable)
Short-term: A-1
A3 (Negative) (Note 5)(Note 1) Average interest is arrived at by calculating a weighted average of interest rates as of the end of the 22nd fiscal period based on the balance of eachdebt.
(Note 2) Interest-bearing debt ratio (%): interest-bearing debt / (interest-bearing debt + unitholders' capital) x 100 (unitholders' capital: 192.00 billion yen)
(Note 3) LTV at end of period (%): interest-bearing debt/total assets at end of period x 100 (total assets at the end of the 22nd fiscal period: 401.90 billion yen)
(Note 4) Average maturity of long-term interest-bearing debt is arrived at by calculating a weighted average of maturities from the end of the 22nd fiscal period
to the repayment deadlines for long-term interest-bearing debt with repayment periods of more than one year, based on the balance of each debt.
(Note 5) The rating outlook was changed from “negative” to “stable” on February 4, 2013.

30

(3) Additional Offerings, etc.
The table below indicates additional offerings, etc. JPR has conducted since inception.

Date
September 14, 2001
November 16, 2001
January 22, 2002
June 14, 2002
July 15, 2003
August 9, 2003
February 2, 2005
March 2, 2005
February 6, 2007
March 7, 2007
February 8, 2010
March 12, 2010
July 30, 2012
August 29, 2012

Event
Established by private placement
Additional private placement
Split of investment units
Initial public offering
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment

Number of Units
Outstanding
Variation
Balance240
240
62,00062,24093,360155,600
134,000
289,600
134,400
424,000
6,000
430,000
95,000525,000
5,000
530,000
90,000620,000
5,000
625,000
82,000707,000
8,000
715,000
101,420
816,4208,580
825,000

Unitholders' Capital(million yen)
Variation
Balance120
120
31,00031,12031,120－25,862
56,98230,75887,7401,373
89,11325,001
114,115
1,315
115,431
39,120154,552
2,173
156,725
13,315170,040
1,299
171,339
19,089190,429
1,614
192,044

Remarks(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(Note 11)
(Note 12)(Note 13)
(Note 14)

(Note 1)

JPR was formed by the investment of three companies Tokyo Tatemono Co., Ltd. (100 units), Taisei Corporation (100 units), and Tokyo Realty(Note 2)

An additional offering was made via private placement at 500,000 yen per unit. JPR then acquired 13 beneficiary interests in real estate trust and started

Investment Management, Inc. (40 units) at 500,000 yen per unit.
management.
(Note 3)

A single investment unit was split into 2.5 units.

(Note 4)

New investment units were issued through a public offering at 200,000 yen per unit (underwriting price of 193,000 yen per unit) to repay short-term debt,(Note 5)New investment units were issued through a public offering at 237,160 yen per unit (underwriting price of 228,859 yen per unit) to repay short-term debt,

finance the acquisition of new specific assets, etc.
acquire new specific assets, etc.
(Note 6)

New investment units were issued through a third-party allotment at 228,859 yen per unit to repay short-term debt, acquire new specific assets, etc.

(Note 7)

New investment units were issued through a public offering at 272,440 yen per unit (underwriting price of 263,177 yen per unit) to repay short-term debt,
acquire new specific assets, etc.

(Note 8)New investment units were issued through a third-party allotment at 263,177 yen per unit to repay short-term debt, acquire new specific assets, etc.

(Note 9)New investment units were issued through a public offering at 449,820 yen per unit (underwriting price of 434,673 yen per unit) to repay debt, acquire
new specific assets, etc.

(Note 10)

New investment units were issued through a third-party allotment at 434,673 yen per unit to repay debt, acquire new specific assets, etc.

(Note 11) New investment units were issued through a public offering at 168,101 yen per unit (underwriting price of 162,382 yen per unit) to repay short-term debt,
redeem investment corporation bonds, acquire new specific assets, etc.
(Note 12) New investment units were issued through a third-party allotment at 162,382 yen per unit to repay short-term debt, redeem investment corporation bonds,
acquire specific assets, etc.
(Note 13)

New investment units were issued through a public offering at 194,610 yen per unit (underwriting price of 188,222 yen per unit) to partly fundacquisition of new specific assets and repay debts.

(Note 14)

New investment units were issued through a third-party allotment at 188,222 yen per unit to partly fund acquisition of new specific assets and repay
debts.

31

(4) Cash Distribution
In order to maintain favorable tax treatment available to J-REITs under the Special Taxation Measures Act, we must make cash
distributions to our unitholders in each fiscal period in excess of 90% of our distributable profit (defined in the Special Taxation
Measures Act as accounting income before tax and certain adjustments). Our articles of incorporation require that we make cash
distributions for each fiscal period in excess of 90% of our distributable profit, as defined in the Special Taxation Measures Act,
up to the extent of retained earnings as of the end of such fiscal period. If the amount of the retained earnings does not exceed
90% of our distributable profit or we determine it appropriate to do so, our articles of incorporation also permit us to distributecash to our unitholders in excess of retained earnings up to the amount of our retained earnings plus depreciation on our fixed
assets for the relevant fiscal period. If such amount is still below 90% of our distributable profit, our articles of incorporation
further permit us to make distributions in any amount to satisfy the requirement under the Special Taxation Measures Act.
The following table sets forth the amount of our cash distributions to our unitholders over the twenty-two fiscal periods from thefiscal period ended June 30, 2002 to the fiscal period ended December 31, 2012.
Fiscal Period Ended

Distribution per Unit(Note)

June 30, 2002
December 31, 2002
June 30, 2003
December 31, 2003
June 30, 2004
December 31, 2004
June 30, 2005
December 31, 2005
June 30, 2006
December 31, 2006
June 30, 2007
December 31, 2007
June 30, 2008
December 31, 2008
June 30, 2009
December 31, 2009
June 30, 2010
December 31, 2010
June 30, 2011
December 31, 2011
June 30, 2012
December 31, 2012

¥2,545
6,912
6,873
5,738
6,081
6,671
6,370
6,411
6,509
6,873
6,996
6,671
7,122
7,092
3,731
6,933
6,770
5,680
5,611
5,876
6,430
6,093

Total Distributions(in millions)
¥737
2,001
1,990
2,467
2,614
2,868
3,376
3,397
3,449
3,642
4,372
4,169
4,451
4,432
2,331
4,333
4,840
4,061
4,011
4,201
4,597
5,026

(Note) The average distribution per unit between June 30, 2002 and December 31, 2012 was 6,181 yen.

(5) Future Management Policies and Vital Issues
Going forward, the Japanese economy is anticipated to recover moderately due to foreign demand picking up, with expectations
created for the recovery in the U.S. economy and bottoming out of the Chinese economy. The emergency economic measures by
the government can also be expected to effectively boost the economy. Moreover, given the current trends of the weaker yen andthe higher stock prices, domestic demand including private capital investment may hopefully rebound if the recovery in businesssentiment continues as expected.
In the office property leasing market in the 23 words of Tokyo, new supply is anticipated to decrease significantly in 2013.
Presumably, the supply and demand balance will improve and the vacancy rate will gradually decrease if new supply remains at
the current level. In addition, as the supply and demand balance heads for improvement, some blue-chip properties are expected
to see rents turn upward. Meanwhile, the for-sale real estate market will be ahead of the office property leasing market inregaining recovery, in anticipation for the expected recovery of the latter.
Based on these conditions, JPR will proceed with management that exercises caution regarding the following matters as we
strive to maximize unitholder value.
1) Acquisition of New Properties and Asset Replacement
JPR will continue to make investment focused on the Tokyo office properties, with an aim to improve the quality of its portfolio
and enhance its growth potential in the recovery cycle of the market. We will continue to see good opportunities for acquiring

32

excellent properties for some more time, as real estate transaction is anticipated to start expanding along with the expected
recovery in the office property leasing market. As for retail properties as well as office properties in regional cities, which allow
us to expect higher yields than the Tokyo office properties, JPR will work to invest in strictly selected blue-chip properties thatcan keep stable revenues at a certain level in order to complement the stability of earnings from the entire portfolio. JPR will
strive to acquire new properties under reasonable terms by negotiating prices based on detailed market studies and property
investigations in considering properties
JPR will continue to make investment decisions after a proactive collection of information through such sources as sponsors of
the Asset Manager, accurately grasping market trends and carefully researching investment value, including the future potentialof candidate properties.
Moreover, JPR will continue to investigate asset replacement, centering on properties that do not allow us to expect sustainablegrowth in the future or those that may be sold under better terms and conditions.
2) Management of Portfolio
With the understanding on market conditions as stated above, JPR will work to raise the occupancy rate of its portfolio byconducting measures to reinforce leases, centering on strategic upgrading constructions with an aim to invite new tenants andenhance satisfaction of existing tenants and on further strengthening coordination with respective tenant brokers. For properties
that have particularly stagnant occupancy rates, JPR will position them as priority properties and focus on conducting leasing
activities for them by reinforcing the supervising function of the Asset Manager and taking other measures, as well as moreclosely cooperating with property management companies, centering on Tokyo Tatemono.
Moreover, JPR will continuously implement necessary measures to meet the social requirements that have become relevant theseyears, including energy-saving arrangements and reinforcement of the Asset Manager’s ability to respond to business continuity
plans.

(6) Fund Procurement
JPR's fundamental policy for fund procurement calls for an efficient combination of long-term steady fund procurement andshort-term fund procurement that emphasizes dynamism. In line with this policy, JPR will procure funds through unsecured andunguaranteed bank borrowings as well as the issuance of investment corporation bonds. JPR will continue to focus on thediversification of fund procurement means and consistently strive to diversify maturities.

(7) Information Disclosure
JPR has positioned the proactive voluntary disclosure of information as one of its key management policies and will voluntarily
disclose information believed to be essential to investment decisions concerning JPR, along with the timely disclosure of items
to the Tokyo Stock Exchange. JPR is proactively employing its website (http://www.jpr-reit.co.jp/jpr_e/) as well as its specified
website for retail investors (http://www.jpr-reit.co.jp/kojin/index.html (Japanese only)) as a vital means for implementing
voluntary disclosure, and JPR has promptly disclosed performance information and has run videos on its primary properties
using this site. We are committed to further enriching our information disclosure activities.

(8) Important Facts Arising after the Settlement
There is no relevant matter.

33

Management of JPR(1) Unitholders’ Capital

Total number of authorized units
Total number of units issued andoutstanding
Unitholders' capital (millions of yen)
Total number of unitholders

18th Fiscal

19th Fiscal

20th Fiscal

Period as of

Period as of

Period as ofDecember 31,

June 30, 2011

December 31,

2010
5,000,000

5,000,000

2011
5,000,000

715,000

715,000

171,339
14,977

171,339
14,576

21st Fiscal
Period as ofJune 30, 2012

22nd Fiscal
Period as ofDecember 31,

5,000,000

2012
5,000,000

715,000

715,000

825,000

171,339
14,513

171,339
14,148

192,044
14,525(2) Items Related to Directors
A. The Executive Officer, Supervising Officers and Independent Auditors as of the end of the 22nd fiscal period are as follows.

Position

Name

Executive Officer

Hirohito Kaneko

Supervising
Officers (Note 1)

Sosuke Yasuda

Independent
Auditor (Note 2)

Masato Denawa
Ernst & Young
ShinNihon LLC

Other Current Assignments

Representative Counsel, Hirohito Kaneko Law
OfficeAdviser, Gyosei Audit Corporation
Group representative partner, GYOSEI Certified
Public Tax & Accountants’ Co.
Outside Auditor, Nomura Research Institute, Ltd.
(part-time)
Outside Auditor, MS&AD Insurance Group
Holdings (part-time)
Partner Attorney, Spring Partners―

Total Directors'
Fee during
the 21st Fiscal Period(thousands of yen)
2,400

4,200

Number
of
Owned
Units
―

―

―
39,800―(Note 1) Supervising officers may be directors of corporations other than those indicated above, but have no conflict of interest with JPR at those and the above
positions.
(Note 2) The independent auditor fees include fees regarding auditing of JPR’s English financial statements and fees regarding preparation of comfort letters for
additional issuance of investment units and issuance of investment corporation bonds.

B. Policy on Dismissing and Deciding Not to Reappoint the Independent Auditor
The dismissal of independent auditors shall be considered in accordance with the designations of the Investment Trust Law. The
decision to not reappoint the auditor shall be studied at JPR’s Board of Directors Meetings following comprehensive
consideration of circumstances including audit quality, audit fee and other various conditions.

34

(3) Members of the Board of JPR (As of December 31, 2012)

Executive Officer

Dec. 2001
Apr. 1979
Apr. 1977

Hirohito Kaneko

Executive Officer, Japan Prime Realty Investment Corporation (currently held position)
Representative Counsel, Hirohito Kaneko Law Office (currently held position)
Bar admission (Tokyo Bar Association), Shigeru Yamada Law Office

Supervising Officer Sosuke Yasuda

Jan. 2009
Apr. 2008
Jan. 2008
Oct. 2006
Jun. 2006
Jun. 2005
Sep. 2001
Oct. 1999
Jul. 1993
Feb. 1983
Jun. 1980
Dec. 1975
Apr. 1968

Adviser, Gyosei Audit Corporation (currently held position)
Group Representative Partner, GYOSEI Certified Public Tax & Accountants’ Co. (currently held position)
Outside Auditor, Mitsui Sumitomo Insurance Group Holdings, Inc. currently MS&AD Insurance Group Holdings,
Inc. (part-time, currently held position)
Group Representative Partner, Gyosei Audit Corporation (Tokyo Hokuto & Co. merged with Serizawa Accounting
Firm)
CPA and Director, Gyosei Audit Corporation
Outside Auditor, Nomura Research Institute, Ltd. (currently held position)
Outside Auditor, Mitsui Sumitomo Insurance Company, Ltd.
Supervising Officer, Japan Prime Realty Investment Corporation (currently held position)
Director and Senior Partner, Tokyo Hokuto & Co. (Tokyo Akasaka Audit Co. merged with Hokuto Audit Co.)
Senior Partner, Tokyo Akasaka Audit Co.
Representative, Tokyo Akasaka CPA Joint Office
Sosuke Yasuda Tax Accountant Office
Masamitsu Serizawa Accounting Firm
Main Store, KK Ohgiya

Supervising Officer Masato Denawa

Apr. 2011
Apr. 2009
Sep. 2007
Jul. 2007
Feb. 2005
Jul. 2003
Apr. 2002
Jun. 2000
Jan. 1999
Apr. 1991
Apr. 1990

Practicing-attorney-professor for civil advocacy, The Legal Training and Research Institute of Japan, Supreme
Court of Japan (currently held position)
Adjunct professor (part-time) at Keio Law School (Advanced Commercial Law)
Supervising Officer of Japan Prime Realty Investment Corporation (currently held position)
Director of Advicelink Co., Ltd. (currently held position)
Part-time auditor of Ulvex Inc. (currently held position)
Partner attorney at Spring Partners (former Okinobu, Ishihara & Sei Law Office)Adjunct professor (part-time) at Keio University Faculty of Law (Civil law practice)Part-time auditor of Kinkan Co., Ltd. (currently held position)
Partner of Okinobu, Ishihara & Sei Law Office (currently held position)
Okinobu, Ishihara & Sei Law Office (former Okinobu & Ishihara Law Office)Registered with Daiichi Tokyo Bar Association at Okinobu & Ishihara Law Office currently MS&AD InsuranceGroup Holdings, Inc. (part-time, currently held position)

35

Investment and Management Policies
1. Investment Policies
We set forth in our articles of incorporation that we shall invest in investment assets with the aim of securing stable revenues
over the medium to long term. The Asset Manager appointed by us establishes asset management guidelines as its internal rules
and determines the management policies that apply to our investment, in accordance with our articles of incorporation and theasset management agreement between us and the Asset Manager and in consideration of the basic policies provided in our
articles of incorporation. The Asset Manager takes due consideration of various factors including the current status and trends inreal estate, capital and financial markets, as well as general economic conditions, market trends of real estate-related products
and our financial condition, when establishing the asset management guidelines. Furthermore, in order to ensure that the asset
management guidelines remain relevant and in tune with changes in market and operating conditions, the asset management
guidelines are amended promptly and actively in consideration of our articles of association and the asset managementagreement.
Basic Policies
We seek to achieve our investment objectives within the framework of basic policies provided by our articles of incorporation.
Our key basic policies are as follows:• We invest in office and retail properties located in the greater Tokyo area and other cities throughout Japan, as well as theland on which such properties are located and asset-backed securities that have such properties as their primary
investments. Our current investment strategy focuses primarily on office properties in the greater Tokyo area.
• We will conduct an investigation and a comprehensive review of all relevant information regarding any prospective
acquisition target, such as anticipated future revenues from the property and related risks, potential of the area in which theproperty is located, building and facilities maintenance and management, deterioration and obsolescence, earthquake
resistance, contracts with current tenants, environmental and topographical features, and related rights attached to suchproperty.
• We will maintain the percentage of the value of our designated real estate assets relative to the value of our total
designated assets at 75% or more at any time. Designated real estate refers to real estate, real estate leasing rights or
surface rights, beneficiary interests in trusts which hold real estate, land leasing rights and surface rights.
• We will maintain the percentage of the value of our real estate, etc. (as defined in Article 22-19 of the Ordinance for
Enforcement of the Act on Special Measures Concerning Taxation Ordinance of the Ministry of Finance No. 15 of 1957,
as amended) relative to the total value of our assets at 70% or more at any time.
• We will maintain the percentage of real property and asset backed securities investing primarily in real estate we own forthe purpose of disposition within one year to be 50% or less of our total assets.
Auxiliary Policies
We and the Asset Manager have developed additional policies with respect to our activities. These policies, to the extent thatthey are not addressed in our articles of incorporation, may be amended or revised from time to time without a vote of ourunitholders. For example, in 2009, we revised our investment policy to shift our focus to office properties in the greater Tokyo
area so that properties in the greater Tokyo area would generally constitute between 80% and 90% of the aggregate investment
amount of our portfolio, and office properties would generally constitute between 70% and 90% of the aggregate investment
amount of our portfolio. These policies are not binding and are intended to guide the implementation of our investment
objectives and management of our operations. The Asset Manager has broad discretion to develop our business strategies and to
manage our operations. At any given time, our business operations or the characteristics of our property portfolio may not be
fully consistent with these policies. Various strategies with respect to the achievement of our investment objectives and certain
other policies with respect to the operation of our business are described elsewhere in this Business Report and below.
Portfolio Composition Policies
Our portfolio composition policies with respect to our investment activities include:
Property TypeThe allocation ratio between office properties and retail properties will be approximately 70% to 90% office properties and 10%
to 30% retail properties of the portfolio, based on investment amount. We will consider economic conditions and real estatemarket trends from time to time to revise or determine the appropriate ratio of property type.
Geographic Location
For the allocation ratio between the greater Tokyo area and other areas in Japan, the greater Tokyo area will be approximately

3680% to 90% and other areas in Japan will be approximately 10% to 20% of the portfolio, based on investment amount. We willconsider the economic condition of each region as well as market trends from time to time to revise or determine the appropriate
ratio of geographic location.
Tenants
We have set the percentage ratio of rent revenue generated from any individual tenant (or in the case of a tenant occupying
several properties, the aggregate rent revenue) to be, as a general rule, less than 10% of the total rent revenue. The percentage
ratio may exceed the maximum upon consideration of the possibility of change in tenants or the credit worthiness of the tenant
as a whole.
Asset-Backed Securities
The total acquisition value of asset-backed securities is, in principle, limited to less than 10% of our net assets. To make any
such investment, we must have the opportunity to acquire the real estate underlying the asset-backed securities at the end of theinvestment period.
Property Specifications
The following property specifications are generally used in the choice of a property:
Geographic Location(i)

Three big urban areas: Central business area of Tokyo metropolis, Yokohama, Kawasaki, Chiba and Saitama; Nagoya; andOsaka, Kyoto and Kobe.
(ii) Government-designated cities other than those in the three big urban areas: Central business area of government-designatedcities such as Sapporo, Sendai, Hiroshima, Fukuoka and Kita-Kyushu.
(iii) Other major cities: Urban areas such as prefectural capitals with a population, in principle, of 300,000 or more.
Further, in determining whether to invest in a given retail property, we conduct wide-ranging analyses of the area, including the
population size, demographic characteristics, number of households and average household income in order to estimate thepotential purchasing power of the local population and the potential for business growth in the area. We also analyze competition
as between businesses in the area, opportunities for new businesses and the potential for development in the future. We thendecide whether potential tenants and their businesses would be suited to that area.
Size
Office Properties: minimum total floor space of approximately 3,300 m² and minimum floor space of approximately 330 m² perfloor above the second floor.
Retail Properties: size dependent on the growth potential of the area in which the property is located, taking into accountregional characteristics of the area including the size and potential for growth of the business area.
Facilities and Equipment
Office Properties: specifications evaluated on a case-by-case basis, in consideration of the characteristics of the local area,
potential for post-acquisition property modifications etc., and building characteristics, including the shape and divisibility offloors, ceiling height, floor fittings, electricity supply and air-conditioning systems.
Retail Properties: specifications evaluated on a case-by-case basis, in consideration of standard specifications for buildings ofthe same type, characteristics of the local area, versatility and potential for conversion to other building use, visitors’ access andother factors.
Earthquake Resistance (Age of the Property)
Newly acquired properties must meet recent earthquake resistance specifications, as specified by the Building Standards Act ofJapan, or for which earthquake resistance reinforcement work has been completed (or can be completed after acquisition).
Tenants
Office Properties: in principle, no single tenant can occupy more than 50% of a given property (parent companies and theirsubsidiaries are considered as a single tenant for this purpose). Where a tenant does occupy more than 50% of a given property,
we may purchase the property, taking into account the tenant’s creditworthiness, appropriateness and substitutability.
Retail Properties: there is no limitation on occupancy by a single tenant. In selecting tenants, a number of factors, including
creditworthiness, profitability of individual shops and substitutability are comprehensively considered. Rigorous investigation is37

conducted with respect to each property, including an analysis of the relevant business area and competition with otherbusinesses, in order to select properties which are able to attract the most tenants. Tenants are monitored continuously.
RightsCo-ownership:• In principle, seek a co-ownership of more than 50% in order to ensure flexibility in property management (leasing,
improvement, etc.) but may acquire properties below this ratio on a case by case basis in consideration of the nature andcreditworthiness of other owners and characteristics of the property.
• In order to ensure sufficient flexibility in the disposal of the property, confirm whether there are special contracts oragreements which set out preferential purchasing rights or options among owners or the details of any restrictions ontransfer or assignment.
• Make efforts to ensure the stability of revenues by fully confirming the nature and creditworthiness of other owners and,
where possible, will provide for appropriate procedures (including, but not limited, to executing an agreement which
prohibits division of joint equity and the registration of rights or an agreement with respect to the mutual use of land).
Compartmentalized Ownership:• In principle, reserve at least 75% of voting rights in meetings of compartmentalized owners in order to ensure flexibility inimprovement. This depends, however, on the types and credits of other compartmentalized owners.
• In order to ensure sufficient flexibility in the disposal of the property, confirm whether there are special contracts oragreements which set out preferential purchasing rights or options among owners and the details of any restrictions ontransfer or assignment.
• Attempt to ensure the stability of revenues by confirming the operations of the management association (reserves, liability
ratios, insurance, status etc.) and take such measures as required (including, but not limited to, increasing our reserves orproviding for insurance on the joint areas separately from the management company).
Leased Land:• In principle, invest in land over which leasehold interests have been created, as specified in the former Leasehold Law andthe Land and Building Leasing Law.
• Carefully study the nature of the leaseholder and make its decision after fully investigating the impact, etc. of provisions forrent revisions, charges for renewing the leasing contract, approval of rebuilding proposals and approval of sales proposals
and other factors which impact profitability.
Leasehold Properties:• In principle, invest in leasehold properties as specified in the former Leasehold Law and the Land and Building Leasing
Law.
• Carefully study the nature of the proprietary right holder of land and make its decision after fully investigating the impact ofprovisions for rent revisions, charges for renewing the leasing contract, approval of rebuilding proposals and approval ofsales proposals and other factors which impact profitability.
Security Interests and Usufruct:• Confirm whether or not any mortgage or other security interest has been created on the property to be acquired and if such
mortgage has been discharged at the time of the acquisition.
• Confirm whether or not any surface right, servitude or any other usufruct has been created on the property to be acquired
and the contents thereof (if any) and make its decision after fully investigating the impact of such surface right, servitude or
usufruct on profitability.
Investment Amounts
Minimum Investment AmountIn principle, the minimum investment amount per property (which is the purchase price, exclusive of taxes, acquisition costs
and other expenses) will be ¥1 billion or more, except in the following cases:• where we are acquiring a portion of a property in respect of which the appraised value for the entire building is ¥1 billion
or more;• where as a result of negotiation, the acquisition price of the property is less than ¥1 billion, but the appraised value of theproperty is ¥1 billion or more; and• where the property is ancillary to other properties we are acquiring in bulk.

38

Maximum Investment AmountThe maximum investment amount per property will be, in principle, one-third of the total investment in real estate,
asset-backed securities and other investment after the acquisition (measured as the total appraised value as of the end of theprevious fiscal period, the total acquisition price of properties and asset-backed securities (excluding acquisition costs) forthe current fiscal period and the investment amount (excluding acquisition costs) for the property in question).
Limit on Acquisition Price
The maximum acquisition price is, in general, the appraisal amount, except in the following cases, provided that theacquisition of the property will not reduce the net operating income yield of the entire portfolio for the fiscal period of suchacquisition as compared to prior to the acquisition:• properties from which we anticipate a steady cash flow from a long-term fixed lease agreement and which can generate a
steady rate of dividends in the medium to long term; and• properties which we anticipate will increase the quality of the fund as a whole when considering the general characteristicsof the property, such as its size and location and can generate a steady rate of dividends in the medium to long term.
Real Estate Acquisition Ownership TypeWe acquire real estate under direct ownership or on an entrusted basis, acquiring beneficiary interests to the property. Decision
as to which form of ownership we take is determined after considering the requirements of the existing owner, the cost oftransferring rights, etc.
Other Investment Policies• We may, through the Asset Manager, make investments other than as previously described. We are permitted to makecertain investments other than real estate-related investments within the restrictions imposed by the Tokyo Stock
Exchange’s J-REIT listing rules and the Investment Trusts Association’s J-REIT rules and our articles of incorporation. For
example, we are permitted to invest in securities issued in connection with real estate securitizations under Japanese law.
• Our articles of incorporation prohibit us from investing in foreign real estate (i.e., real estate not located in Japan), assets
or securities backed by foreign real estate and assets denominated in a currency other than the Japanese yen.

2. Financing Policies
We have the following policies in relation to our finances.
Cash Management
Leasehold and Security Deposit
In the case of real estate trusts, leasehold and security deposits from our tenants are, in general, placed in trust accounts,
however these funds can be reduced on the condition that historical data are accumulated and commitment lines are made. In
the case of real estate, leasing rights and surface rights, leasehold and security deposits from our tenants are placed inordinary or fixed deposit bank accounts, however these funds can be reduced with the aim to safely secure and efficiently
manage the funds, on the condition that historical data are accumulated and commitment lines are made.
Cash and Cash Equivalents in Trust AccountIn the case of cash and cash equivalents in trust accounts for real estate funds, such cash and cash equivalents must be placedin either ordinary or fixed deposit accounts at a bank with a short-term rating of P-2 or above from Moody’s.
Cash and Cash Equivalents of Our Company
Our cash and cash equivalents are to be treated in the same way as real estate trust funds, provided however, that ordinaryaccounts opened at the time of borrowing from financial institutions or at the time of dividend payment are not included. In
general, residual funds are to be applied to the following expenses in that order and the remainder shall be managed in thesame way as above: re-investment (expenses related to acquisition of properties or capital expenses), distribution to investors(except in the case that the dividend amount exceeds the amount of profit) and the repayment of loans payable (except incases where the payments are due, then repayment must be made with first priority).
Derivative Transactions
Any derivative transactions should only be conducted to hedge against interest rate and other risks.

39

Issuance of New Investment Units
We may from time to time issue new investment units with the aim for stable long-term growth of our assets by taking into
account market conditions and dilution of the units (decrease of holding ratio or decrease in total assets or dividends per unit due
to the issuance of new units).
Debt and Issuance of Investment Bonds
In principle, we aim to strategically grow our portfolio and maintain a stable distribution of dividends by effectively combining
long-term stable fund procurement and mobile short-term procurement. In addition we will calculate LTV (loan to value), whichshows our asset to debt ratio, as follows:
Our maximum fiscal period-end asset based-LTV, which is calculated by dividing the total interest-bearing debt by the value ofthe total assets as of the end of the fiscal period, as adjusted for the differences between the appraisals or other valuations ofcertain properties in our portfolio and the book values of such properties, is 55%. The actual percentage may exceed the
maximum fiscal period-end asset-based LTV under limited circumstances due to acquisitions and fluctuation in appraisal values.
In addition, we have set our target range of the capitalization-based LTV, which is calculated by dividing the totalinterest-bearing debt by the sum of interest-bearing debt and unitholders’ capital, as approximately 40% to 50%.

3. Distribution Policies
We shall make cash distributions to unitholders or eligible registered pledgees listed or registered on the unitholders list at theend of each fiscal period, based on the following policies.
Distributable Amount
Income available for distribution by us (the "distributable amount") equals the amount calculated by deducting the sum ofunitholders’ capital, retained earnings and evaluation/conversion adjustments from the net assets on the balance sheets.
Determining Amount of Distribution
We determine the amount of distribution, which must exceed 90% of our distributable income as stipulated in Article 67:15 of
the Special Taxation Measures Law (Law No. 26 of 1957, including all subsequent amendments). However, the actual amount of
distribution may not exceed the distributable amount, as defined above. In addition, we can reserve funds for long-term repair
reserves, payment reserves, distribution reserves and similar reserves and allowances that are recognized to be necessary for
maintenance of or increasing the value of assets.
Retained Earnings
Retained earnings not distributed from the distributable amount will be managed based on our asset management targets andpolicy.

Distribution of Cash Exceeding Earnings
In cases when the distribution is less than 90% of the distributable amount, or when we make an appropriate decision based on
the trend of the economic environment, the real estate market, the leasing market or other conditions, we may distribute cash
exceeding earnings for the relevant period, as the sum of the distribution amount set above and the amount decided by us withthe upper limit of the depreciation amount reported at the end of the fiscal period. In such a case, if the cash distribution does notmeet the conditions of special tax treatments for investment corporations, the amount decided by us for the purpose of meetingthe conditions may be distributed in cash.
Method of Distribution
Distributions are paid in cash based on the number of investment units held to unitholders who are listed on the final unitholders'
list at the end of each fiscal period, or to eligible registered pledgees, within three months, in principle, from the end of eachfiscal period.
Extinctive Prescription
We will be released from its payment obligation of distributions after a lapse of three years from the date of starting payment. No
interest is payable in respect to unpaid distributions in arrears.

40

4. Tax Policies
Compliance with Certain Japanese Tax Law Matters
We intend to manage our investments in such a manner as to qualify for lower property registration and acquisition taxes and for
deductibility of distributions to our unitholders under Japanese tax laws applicable to J-REITs. Also, we intend to comply withapplicable laws and regulations in order to take advantage of lower withholding tax on distributions and capital gains that may
be available to certain overseas unitholders.

41Overview of the Asset Manager
Tokyo Realty Investment Management, Inc. (TRIM), a Japanese joint stock corporation established on April 28, 2000, is theAsset Manager. The shareholding of the Asset Manager as of December 31, 2012 is as follows:
Shareholder
Tokyo Tatemono Co., Ltd.
Taisei Corporation
Yasuda Real Estate Co., Ltd.
Meiji Yasuda Life Insurance Company
Sompo Japan Insurance Inc.
Total

Number of Shares Held
2,800
1,400
1,400
700
700
7,000

Percentage of
Outstanding Shares (%)
40
20
20
10
10
100

The Asset Manager is licensed by the Governor of Tokyo and the Minister of the Ministry of Land, Infrastructure and Transport
in accordance with the Building Lots and Building Transactions Business Law to act as a discretionary transaction agent in realestate transactions, including acquisitions and dispositions of real estate. The Asset Manager is also registered with the Prime
Minster to engage in investment management business under the FIEA.

Asset Management Agreement
The Asset Manager has entered into an asset management agreement with us with respect to the operation and management ofour properties. The current agreement is valid until October 18, 2013 (Note).
Note: The asset management agreement will be renewed each year automatically for an additional one year unless a written notice is given from either JPR or the
Asset Managers three months prior to the end of the term of the agreement, subject to the consent of our general meeting of unitholders in the case oftermination by us, or to our consent, which is further subject to approval of either a general meeting of our unitholders or the Prime Minister of Japan, in thecase of termination by the Asset Manager. Neither we nor the Asset Manager has any current intention to terminate the agreement.

42

Asset Management Fee
Under the asset management agreement that is currently in effect, the Asset Manager receives an asset management fee which
consists of a fixed fee and three types of incentive fees. As of the date of this Business Report, the details of the fees payable byus for the asset management services provided by the Asset Manager are as follows:
Fixed Fee¥12.5 million per month

The Asset Manager receives a fixed fee of ¥12.5 million per month, payable
subsequently by us at the end of March, June, September and December eachyear. For any period of less than a month, the fee will be calculated on
pro-rata basis.

+
Incentive Fee 1 (Revenue-Based Fee)
2% of our total revenue+
Incentive Fee 2 (Earnings-Based Fee)
3% of our distributable amount

The Asset Manager receives a revenue-based fee equal to 2% of our total
revenue of the fiscal period, provided however, for the total revenue
exceeding ¥8 billion in one fiscal period, the revenue-based fee shall be 1.5%of our total revenue (any amount less than ¥1 will be truncated). Total
revenue shall be the total of rent revenue, common charges, parking revenue,
incidental income, fee for use of facilities, installation fees, late charges,
cancellation penalty arising from cancellation of lease and any other income,interest or distribution arising from our real estate assets and other related
income from the rent business. The revenue-based fee is payable within threemonths from the end of each fiscal term. We paid ¥234.5 million asrevenue-based fee for the fiscal period ended December 31, 2012.
The Asset Manager receives a fee equal to the amount of 3% of ourdistributable amount (as specified in Article 30 of our articles ofincorporation and less the amount not to be distributed) before deduction of
earnings-based fee for each fiscal period (any amount less than ¥1 will betruncated). The earnings-based fee is payable within three months from theend of each fiscal term. We paid ¥155.4 million as earnings-based fee for the
fiscal period ended December 31, 2012.

+
Incentive Fee 3 (Acquisition Fee)(after Jan. 2008)

0.25% of the acquisition priceFor each real estate property or asset-backed securities that have real estateas their primary investments which we acquire, the Asset Manager receives a
fee equal to the amount of 0.25% of the acquisition price (net of any
acquisition costs, consumption tax and local consumption tax) (any amountless than ¥1 will be truncated). The acquisition fee is payable by the end of
the month immediately following the month of acquisition. We paid an
acquisition fee of ¥27 million for the fiscal period ended December 31, 2012.

43

Services Provided by the Asset Manager
Pursuant to the ITA, our operations and activities related to the real estate and assets we own or operate are entrusted to third
parties, including the Asset Manager. The Asset Manager provides the following services to us:

Investment Management

The Asset Manager formulates and executes our investment strategy based on our basic
investment policy set forth in our articles of incorporation with respect to our portfolio
composition and other characteristics of our investment properties.

Oversight of Property
Management

The Asset Manager directs and supervises our on-site property managers’ implementation ofvarious programs.

Property Acquisition and
Disposition

The Asset Manager is responsible for finding and identifying acquisition targets, purchasing
properties (which may include the restructuring of tenant lease terms and property
refurbishments) and disposing of properties.

Investor Relations andFinancial Reporting

The Asset Manager is responsible for our investor relations, including the disclosure of new
developments with respect to our properties and the release of reports on our financial
performance. The Asset Manager is also responsible for our regulatory filings.

Finance and Accounting

The Asset Manager is responsible for our cash management and other financial affairs,
including planning and budgeting functions, management of debt and equity issuances tofund our acquisitions.

Acquisition and Disposition Approval Process
The following chart shows the committees and subcommittees set up by our Asset Manager which are involved in thedecision-making process:Note: (1) Disposition of properties are determined through procedures similar to these acquisition procedures.

44▌ The Asset Manager established the Investment Committee to make investment management decisions with the Investment
Subcommittee (including the Due Diligence Subcommittee) and the Fund Management Subcommittee which support thedecision-making process. Members of these committees include the President and CEO, Chief Investment Management
Officer, Chief Financial Officer (“CFO”) and Chief Planning and Administrative Officer (“CAO”). The Compliance Office
General Manager will also participate in each Committee and Subcommittee to enhance legal compliance.
▌ The Board of Directors is responsible for the targeted investment assets and policies. The Investment Committee formulates
management plans, while the Investment Subcommittee is in charge of decisions on issues regarding the acquisition anddisposition of individual assets. The Fund Management Subcommittee is responsible for issues regarding the management of
individual assets.
▌ The decision-making procedure by the Investment Subcommittee entails the following secure procedures that require two
steps: policy decision-making processes concerning the acquisition or disposition and a final decision process on theacquisition or disposition. In addition, in regard to the acquisition of an individual asset, a Due Diligence Subcommittee
meeting will be held after the acquisition policy is decided to enhance the screening of the details. Furthermore, the Board of
Directors has the final decision-making power on the acquisition and disposition of individual assets greater than a certain
value.
▌ Decisions and legal procedures by each committee are screened to confirm that they do not violate laws, regulations, ourarticles of incorporation and internal rules at the Compliance Subcommittee before committee meetings are held. The
Compliance Office General Manager reports on the presence or absence of violations of laws or rules before the discussion ateach committee meeting and, in addition, instructs each manager to decide at or report to our, or the Asset Manager’s board of
Directors in compliance with the rules.
▌ In addition to the above, transactions with related parties will be reviewed by the Compliance Committee for its validity andreasonableness. See “—Policies Regarding Related-Party Transactions” below.
▌ The decision-making process of the Asset Manager when acquiring an investment property is shown below. Please note thatthe below illustrates a general process, and therefore any part of such process may be changed or omitted to be taken,
depending on the situation of the investment property to be acquired. The Asset Manager will decide whether to acquire
additional properties in accordance with a decision-making process based on strict due diligence.

45

Policies Regarding Related-Party Transactions
When a proposed related-party transaction falls into any of the transaction categories listed below, the appropriateness andreasonableness of the transaction will be reviewed at the monthly Compliance Committee meetings. In order to conduct suchtransactions, prior approval from our board members who are independent from the shareholders of the Asset Manager will also
be required:

Asset Acquisition

In the case of real estate properties or trust beneficiary interest in real estate properties, wemust obtain prior approval from our board of directors for such acquisition. For any otherassets, we must not acquire the asset for more than the market value, if such market value
can be obtained, and if not, then prior approval of our board of directors is required.

Asset Disposal

In the case of real estate properties or trust beneficiary interest in real estate properties, thedisposal price (the sales amount only, not including tax or costs of disposal) must be morethan the appraised value. Also, we must obtain prior approval from our board of directors.
For any other assets, we must not sell the asset for less than the market value, if such value
can be determined, and if not, then the same rule for real estate properties applies.

Lease

When leasing real estate property to a related party, the terms of the lease must be
appropriate, taking into account general market conditions and general lease terms for asimilar property. In addition, we must obtain prior approval from our board of directors.
Leasing real estate property to a related party means i) concluding a new lease agreementwith a related party (not including the lease of parking space attached to the leased property
which a) is leased for more than the average fee for the same or similar condition and b) forless than five cars (not including already leased spaces)) or ii) renewing the lease agreementwith a related party at a rental fee (either increased, decreased or unchanged) that is less than
the average rental fee of the said property (not including the related party).

Real Estate Management

Real Estate Management will be conducted according to our property business operations
standard. Prior approval of our board of directors will be required when commissioning realestate management to related parties and must be conducted according to our real estate
management policy.

Agency for Acquisition,
Sale or Lease andCommission

In the case where a related party acts as an agent for an acquisition or sale, the commission
must not be more than 3% of the acquisition or sale price plus ¥60,000 (not including
consumption tax) and such transaction will require prior approval from our board of
directors. In the case whereby a related party acts as an agent for a lease, the commission
must not be more than one month rent of the leased property.

Placing Construction
OrdersFor construction orders exceeding ¥10 million, an estimate must be obtained from a third
party and such construction orders must be placed after obtaining prior approval from ourboard of directors.

Loans

Loans from related parties must be limited to those with terms which are at market level. In
addition, prior approval of our board of directors on the financial plan (funding andmanagement plans for every three months) and the loan must be obtained.

A “related party” for purposes of these policies includes a company and its affiliated companies which are investing in,dispatching an executive or seconding an employee to the Asset Manager.

Corporate GovernanceIndependent Board Composition
In order to maintain a high level of independence, none of the directors and officers of the Asset Manager have a dual position
within our board of directors. We believe such independence enhances our corporate governance and enables us to generatevalue to unitholders.

Prudent Procedures within the Asset Manager
The Asset Manager maintains prudent procedures, including the Compliance Committee that has an outside expert as a member,to make decisions on important matters such as investment decisions and related-party transactions.
Decisions taken by the Compliance Committee require the unanimous agreement of Committee members. We believe that suchprocedures provide us with a high level of independence, particularly in respect to related-party transactions.

46

Monitoring provided by Our Sponsors
Instead of relying on a single Sponsor, we have five different Sponsors that monitor the Asset Manager as well as each other, in
addition to providing effective support. In order to maintain independence, the Compliance Office General Manager, who is incharge of internal control at TRIM and responsible for checking transactions with our Sponsors, is not a person seconded fromany of the Sponsors.

Fiduciary Duty of the Asset Manager
In addition to the Asset Manager’s contractual obligations to us under the Asset Management Agreement, the FIEA provides that
the Asset Manager owes us fiduciary duties of loyalty and care of a good manager and must conduct its activities as our AssetManager in good faith. The ITA and the FIEA also prohibit the Asset Manager from engaging in certain specified conduct,
including entering into transactions outside the ordinary course of business or with interested parties of the Asset Manager thatare contrary to or violate our interests. The Asset Manager is subject to potential liability for damages from breaches of its duties
to us under the ITA.

Organization(As of March 26, 2013)47

Management of the Asset Manager
Directors
The Asset Manager’s board of directors currently consists of five full-time directors and three part-time directors. The directorsof the Asset Manager are as follows:
CEO and President
Satoshi Okubo
Satoshi Okubo has been the CEO and president of the Asset Manager since June 2010. He started his career at Tokyo
Tatemono Co., Ltd. in 1977 and has worked in various departments of the company, gaining experience in investment
decisions and real estate transactions, development of real estate and asset management. He was appointed as part-timestatutory auditor and as special advisor of Tokyo Tatemono Real Estate Sales Co., Ltd in 2010. He was then appointed as
representative director of the Asset Manager in 2010.
Kazuo Kitami

Director and Manager of Planning and Administration Department

Kazuo Kitami has been director and manager of planning and administration department of the Asset Manager since October
2004. He joined Meiji Yasuda Life Insurance Company, formerly Yasuda Life Insurance Company, in 1975. He has
experience in the real estate and asset management departments and was appointed as deliberator in charge of the
management operation inquiry of related business of Meiji Yasuda Life Insurance Company. He was seconded to the AssetManager in October 2004 and subsequently joined the Asset Manager in March 2012.
Director and Manager of the Investment Management Division
Kazuki Sugise
Kazuki Sugise has been director and manager of the investment management division of the Asset Manager since March
2011. He joined Tokyo Tatemono Co., Ltd. in 1988 and has experience in the urban development division of the company.
He was seconded to the Asset Manager and appointed as manager of the investment management division in July 2007.
Satoshi Eida

Director and Manager of the Finance Department

Satoshi Eida has been director and manager of the finance department of the Asset Manager since March 2012. He joinedTokyo Tatemono Co., Ltd. in 1986 and has experience at the Sapporo branch and in the management planning division andother divisions of the company. He was appointed as president and representative director of Shinjuku Center Building
Management Co., Ltd. and as director of Shinjuku Square Tower Management Co., Ltd. in March 2011. He was seconded to
the Asset Manager and appointed as director of the Asset Manager in March 2012.
Shigeyuki Sugawara

Director and General Manager of the Compliance Division

Shigeyuki Sugawara has been director and general manager of the compliance division of the Asset Manager since June
2010. He started his career at Asahi Mutual Life Insurance Co. in 1985 and was seconded to Asahi Jitsugyo Co., Ltd. in
April 1999. He was seconded to the Asset Manager in January 2001 and then joined the Asset Manager in October 2002. He
was appointed as manager of the planning and administration division of the Asset Manager in October 2004 and thenappointed as general manager of compliance team of the Asset Manager in April 2008.
Kiyohide Kumakura

Part-Time Director

Kiyohide Kumakura is one of the Asset Manager’s part-time directors and was appointed in June 2011. He joined Tokyo
Tatemono Co., Ltd. in 1989 and has experience in the general affairs division and the leasing division of the company. He
was seconded to Tokyo Tatemono Amenity Support Co., Ltd. in January 2004. He has been group leader of the planning andmanagement group of Tokyo Tatemono Co., Ltd. since April 2010 and director of Tokyo Tatemono Investment Advisors Co.,
Ltd. since March 2011.
Part-Time Director
Rei AbeRei Abe is one of the Asset Manager’s part-time directors appointed in June 2011. He joined Taisei Corporation in 1979 andhas experience in the management division, the property management division and other divisions of the company. He has
been manager of the development planning division of the company since April 2011.
Part-Time Director
Yasunori Kuroda
Yasunori Kuroda is a part-time director of the Asset Manager and was appointed in April 2012. He joined Sompo Japan
Insurance Inc. (formerly Yasuda Fire and Marine Insurance Co., Ltd.) in 1987 and was then seconded to Sompo Japan
Nipponkoa Asset Management Co., Ltd. (formerly Yasuda Kasai Brinson Investment Management Co., Ltd.). He joined
Sompo Japan Insurance Inc. in April 2004. He has been a director of Sompo Japan Credit Inc. and of Yasuda Enterprise
Development Co., Ltd. since April 2012. He resigned from the post of director of the Asset Manager as of April 2, 2013.

48

Part-Time Director
Tetsuo Ozaki
Tetsuo Ozaki is a part-time director of the Asset Manager and was appointed in April 2013. He joined Nipponkoa InsuranceCo., Ltd. (formerly Koa Fire & Marine Insurance Co., Ltd.) in 1983. He has been serving as general manager of theinvestment and loans department of the company and as a director of Nipponkoa Credit Service Co., Ltd. since October
2012. He was concurrently appointed general manager of the investment and loans department of Sompo Japan Insurance
Inc. and director of Sompo Japan Credit Inc. and of Yasuda Enterprise Development Co., Ltd. in April 2013.

Corporate Auditors
The corporate auditors of the Asset Manager are as follows:
Masamitsu Kurebayashi

Part-Time Corporate Auditor

Masamitsu Kurebayashi has been a part-time corporate auditor of the Asset Manager since February 2001. He began his
career at Showa Ota Auditing Firm, presently Ernst & Young ShinNihon LLC, in 1989, and served in the tax consulting
division. He became a representative of Sawa & Kurebayashi accounting firm (formerly Kurebayashi accounting firm) in
October 1999.
Rikiya Fujikubo

Part-Time Corporate Auditor

Rikiya Fujikubo is a part-time corporate auditor and was appointed in April 2013. He started his carrer at Mizuho Trust &Banking Co., Ltd. (foremerly Yasuda Trust and Banking Co., Ltd.) in April 1985, and gained experience through several
assignments at Mizuho Trust & Banking and Mizuho Bank, Ltd., including planning, sales and marketing, consulting andreal estate business. He has been with the sales and marketing department II of Mizuho Corporate Bank, Ltd. since January
2013, and has concurrently served as general manager of the sales and marketing department and the sales planningdepartment of Yasuda Real Estate Co., Ltd. since February 2013.

49

Status of JPR’s Assets Under Management(1) JPR’s Asset Structure

Asset TypeReal estate

Real estate in trust

Area

Central Tokyo
Greater Tokyo
Other Cities
Central Tokyo
Greater Tokyo
Other Cities

Deposits and otherassets―Total assets―

21st Fiscal Period(as of June 30, 2012)
Assets owned by
Percentage of total
JPR
assets (%)(thousands of yen)
80,564,061
20.3
64,032,992
16.2
10,877,921
2.7
126,270,766
31.9
44,175,336
11.2
44,242,155
11.2
25,854,653
6.5
(－)
(－)
396,017,887
100.0(370,163,234)(93.5)

22nd Fiscal Period(as of December 31, 2012)
Assets owned by
Percentage of total
JPR
assets (%)(thousands of yen)
80,527,907
20.0
63,605,799
15.8
22,225,682
5.5
126,035,548
31.4
43,885,908
10.9
44,237,996
11.0
21,465,473
5.3
(－)
(－)
401,984,316
100.0(380,518,842)(94.7)(Note 1) Total assets owned are based on the amounts appropriated on the balance sheet as of the settlement date (book values after depreciation for real estate andreal estate in trust).
(Note 2) Figures in parenthesis are portions that practically fall on real estate owned in the object assets.
(Note 3) Various survey expenses (1,614 thousand yen for the 21st fiscal period) recorded in relation to a property to be acquired have been included in Deposits
and other assets in the table above as construction in progress.

(2) Major Assets Owned by JPR
The following is an overview of the major assets (ten largest properties by book value at end of period) owned by JPR as of theend of the 22nd fiscal period.

Property Name

Otemachi 1-6 Plan (Landwith Leasehold Interest)(tentative name)
Olinas Tower
Shinjuku Center Bldg.
BYGS Shinjuku Bldg.
JPR Sendagaya Bldg.
Kanematsu Bldg.
Kawasaki Dice Bldg.
JPR Umeda Loft Bldg.
JPR Shibuya Tower
Records Bldg.
Yakuin Business Garden
Total

Rate of Monthly
Contracted Rent
at End of Period
(%)

Asset
Class

100.0

11.5

Office22,229.63
8,197.27
14,779.31
5,813.42
7,994.02
12,911.37
18,586.97

92.7
92.5
97.3
94.1
100.0
98.8
100.0

7.6
3.4
4.0
1.9
2.9
3.0
2.9

OfficeOfficeOfficeOfficeOfficeRetailRetail

8,076.85

8,076.85

100.0

2.6

Retail

16,654.33
129,633.41

16,644.71
126,268.33

99.9
97.4

3.1
43.1

OfficeBook Value(thousands ofyen)

Leasable Floor
Space (m2)

Leased Floor
Space (m2)38,388,259

11,034.78

11,034.78

29,820,666
21,804,311
15,760,319
15,248,033
14,853,906
14,411,526
12,572,865

23,987.40
8,863.98
15,190.65
6,177.74
7,994.02
13,066.69
18,586.97

11,656,433
11,416,663
185,932,985

Occupancy
Rate (%)(Note 1) Rate of monthly contracted rent at end of period is the rate arrived at by dividing the monthly contracted rent at end of period for each property by the total
rents for all properties.
(Note 2) The tenants of Shinjuku Center Bldg. and Kawasaki Dice Bldg. have sublet space to a sub-lessee and a lease agreement has been executed where the rent
paid by the tenant fluctuates in accordance with the lease conditions of the sub-lessee. Therefore, the leasable floor space, leased floor space and occupancy
rate entered for each of these buildings are the figures concerning the sub-lessee of the tenant.

50

Selected Office Properties in the Greater Tokyo Area
Otemachi 1-6 Plan (Land with Leasehold Interest)
On March 13, 2012, we acquired the Otemachi 1-6 Plan (Land with Leasehold Interest), an office property located in the
Chiyoda ward of Tokyo area, at the price of ¥36,000 million. We own only the land, which is approximately 11,000 m². A
building is currently under construction on the land by Taisei Corporation, and is scheduled to be completed in April 2014. The
projected NOI yield for the Otemachi 1-6 Plan (Land with Leasehold Interest), is 3.6%. The property was acquired from Y.K.
Tokyo Prime Stage, or TPS, a special purpose company in which Tokyo Tatemono Co., Ltd. and Taisei Corporation, both ofwhich are our Sponsors, have equity interests. When construction of the property is complete, the building itself will be owned
by TPS as we own only the land.
The Otemachi 1-6 Plan (Land with Leasehold Interest) was an attractive investment for the following reasons: (i) the property issituated in a prime geographical location in central Tokyo and is therefore likely to generate stable long-term rent income as an
A-class property, (ii) the land is not subject to depreciation and thus contributes to greater retained earnings out of which we canmake distributions; (iii) it has a higher projected NOI yield than the average NOI yield (after depreciation) of the officeproperties in central Tokyo in our portfolio, and (iv) the property is likely to have stable income with a leasehold interest of 70
years.
We also have secured certain arrangements under the surface right agreement with the property developer to enhance thestability of rental income, including:• The rent payable in respect of the land is not affected by the rent derived from the building currently under construction.
• The rent payable in respect of the land is indexed against the applicable tax rate, and the net rate payable after deducting
applicable tax will be indexed against the consumer price index, to minimize our property-related tax risk.
We are entitled to preferential negotiating rights in respect of the sale of the building which is currently under construction.
Olinas Tower
The Olinas Tower is well-situated, approximately five-minutes walking distance from the JR line Kinshicho station and Tokyo
Metro Hanzomon line Kinshicho station. It is approximately ten-minutes by train to Tokyo station from the JR line Kinshicho
station. This property is a competitive, large-scale office property with the latest facilities and is comparable to large-scale officeproperties in downtown Tokyo.
Shinjuku Center Bldg.
The Shinjuku Center Bldg. is an office property located in the Nishi-Shinjuku area, which has one of the highest concentrationsof commercial and high-rise office properties in Japan. The property is attractive and well-known due to its location andproximity to Shinjuku station, which is one of the largest terminal stations in Tokyo.
Kawasaki Dice Bldg.
The Kawasaki Dice Bldg. is a retail property including shops, restaurants and cinemas, located in front of the JR line Kawasaki
station and Keihin Kyuko line Keikyu Kawasaki station. This property is connected to the underground shopping area in front of
the JR line Kawasaki station, has a relatively large floor area of 900 tsubo per floor and is therefore competitive against otherproperties in the area.

51

(3) Our Current Properties
Basic Information
Office Properties
The following tables provide basic summary information for our 45 current office properties as of December 31, 2012, unlessotherwise specified. Of our office properties, 23 are located in central Tokyo, 11 are located in greater Tokyo and 11 are in other
cities in Japan.

Property
Number

Percentage
of Portfolio
Acquisition
Price
(%)

Book Value(in millions)

Land
(m²)

Leasable
Area
Owned orCo-ownedby JPR(m²)

Property Name

Location

Acquisition
Price(1)(in millions)A-1

Kanematsu Bldg.

Chuo-ku, Tokyo¥16,276

4.2¥14,853

1,751.13

7,994.02

A-2

Kanematsu Bldg.
Annex

Chuo-ku, Tokyo

2,874

0.7

2,468

679.06

2,291.13

A-3

JPR Ningyo-cho
Bldg.

Chuo-ku, Tokyo

2,100

0.5

1,991

550.062,804.56

A-4

Shin-Kojimachi
Bldg.

Chiyoda-ku, Tokyo

2,420

0.6

2,404

657.803,318.81

A-5

JPR Crest Takebashi
Chiyoda-ku, Tokyo
Bldg.

4,000

1.0

3,450

636.903,265.34

A-6

MS Shibaura Bldg.

Minato-ku, Tokyo

11,2002.9

10,897

8,992.18(2)14,469.72

A-7

Gotanda First Bldg.

Shinagawa-ku,
Tokyo

2,920

0.7

2,694

1,551.19

4,243.58

A-8

Fukuoka Bldg.

Chuo-ku, Tokyo

2,920

0.7

2,918

1,302.17

1,937.40

A-9

JPR Ichigaya Bldg.

Chiyoda-ku, Tokyo

5,100

1.3

5,296

1,058.04

4,224.96

A-10

Oval Court Ohsaki
Mark West

Shinagawa-ku,
Tokyo

3,500

0.9

3,115

4,006.00

4,088.44

A-11

Shinjuku Square
Tower

Shinjuku-ku, Tokyo

10,1802.6

9,039

8,409.52(3)11,150.78

A-12

BYGS Shinjuku
Bldg.

Shinjuku-ku, Tokyo

15,121

3.9

15,7603,522.46

15,190.65

A-13

Across Shinkawa
Bldg. Annex

Chuo-ku, Tokyo

710

0.2

619

858.481,253.39

A-14

Shinjuku Center
Bldg.

Shinjuku-ku, Tokyo

21,0005.4

21,804

14,917.11

8,863.98

A-15

Minami Azabu Bldg. Minato-ku, Tokyo

3,760

1.0

3,860

778.093,405.73

A-16

Shinagawa Canal
Bldg.

Minato-ku, Tokyo

1,870

0.5

1,817

828.821,700.57

A-17

Rokubancho Bldg.

Chiyoda-ku, Tokyo

2,800

0.7

2,902

716.952,488.36

A-18

JPR Harajuku Bldg. Shibuya-ku, Tokyo

8,400

2.1

8,734

1,205.07

4,760.09

A-19

Tokyo Tatemono
Kyobashi Bldg.

Chuo-ku, Tokyo

5,250

1.3

5,253

547.103,499.31

A-20

JPR Nihonbashihoridome Bldg.

Chuo-ku, Tokyo

5,100

1.3

5,104

937.595,299.89

A-21

JPR Sendagaya
Bldg.

Shibuya-ku, Tokyo

15,0503.8

15,2482,217.49

6,177.74

A-22(4)

Ginza Sanwa Bldg.

Chuo-ku, Tokyo

3,400

0.9

3,636

1,119.27

1,899.27

A-23

Otemachi 1-6 Plan
(Land with
Leasehold Interest)

Chiyoda-ku, Tokyo

36,0009.2

38,388

11,034.78

11,034.78

Central Tokyo

52

Property
Number

Property Name

Location

Acquisition
Price(1)(in millions)

Percentage
of Portfolio
Acquisition
Price
(%)

Book Value(in millions)

Land
(m²)

Leasable
Area
Owned orCo-ownedby JPR(m²)

Greater Tokyo
B-1

Arca East

Sumida-ku, Tokyo

5,880

1.5

4,605

3,755.01

7,022.76

B-2

JPR Chiba Bldg.

Chiba, Chiba

2,350

0.6

2,420

1,382.35

5,535.67

B-3

JPR Yokohama
Nihon Odori Bldg.

Yokohama,
Kanagawa

2,927

0.7

2,661

1,100.59

6,066.53

B-5

Shinyokohama 2nd
Center Bldg.

Yokohama,
Kanagawa

920

0.2

909

841.712,642.38

B-6

Kawaguchi Center
Bldg.

Kawaguchi, Saitama

8,100

2.1

7,164

4,524.61

15,455.96

B-7

JPR Ueno East Bldg. Taito-ku, Tokyo

3,250

0.8

3,116

1,242.97

6,490.05

B-8

Tachikawa BusinessTachikawa, Tokyo
Center Bldg.

3,188

0.8

2,973

2,047.22

4,731.04

B-9

Rise Arena Bldg.

Toshima-ku, Tokyo

5,831

1.5

5,558

9,377.28(5)6,023.39

B-10

Yume-ooka OfficeTower

Yokohama,
Kanagawa

6,510

1.7

5,896

12,011.00

12,013.88

B-11

Olinas Tower

Sumida-ku, Tokyo

31,3008.0

29,82027,335.29

23,987.40

B-12

Tokyo Tatemono
Yokohama Bldg.

Yokohama,
Kanagawa

7,000

1.8

6,983

1,110.28

6,494.09

C-1

Niigata Ekinan
Center Bldg.

Niigata, Niigata

2,140

0.5

1,799

2,706.99

5,326.88

C-4

Tokyo Tatemono
Honmachi Bldg.

Osaka, Osaka

4,150

1.1

4,159

1,432.64

7,162.60

C-7

JPR Hakata Bldg.

Fukuoka, Fukuoka

2,900

0.7

3,189

1,214.63

6,581.15

C-9

JPR Naha Bldg.

Naha, Okinawa

1,560

0.4

1,431

959.87

3,946.42

C-12

Sompo Japan Sendai
Sendai, Miyagi
Bldg.

3,150

0.8

2,388

1,895.67

7,129.05

C-13

Sompo Japan
Wakayama Bldg.

Wakayama,
Wakayama

1,670

0.4

1,287

1,128.45

4,874.91

Other Cities

C-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

2,810

0.7

2,298

1,164.39

3,257.73

C-17

JPR Dojima Bldg.

Osaka, Osaka

2,140

0.5

2,053

668.113,930.21

C-18

JPR Hakata-chuo
Bldg.

Fukuoka, Fukuoka

1,920

0.5

1,791

680.633,290.42

C-19

JPR Nagoya Fushimi
Nagoya, Aichi
Bldg.

4,137

1.1

4,178

1,610.38

7,086.37

C-20

Yakuin Business
Garden10,996

2.8

11,416

4,348,43

16,654.33¥296,780

75.7¥290,367

150,815.76

291,065.72

Fukuoka, Fukuoka

Total
Notes:(1) Acquisition price excludes consumption and other taxes.

(2) Includes land of the Trinity Shibaura property, which was developed together with the MS Shibaura Bldg.
(3) Includes land for the entire redevelopment area that includes the Shinjuku Square Tower.
(4) All properties are office properties, with the exception of A-22, which has both offices and retail stores.
(5) Includes land for the entire redevelopment area that includes the Rise Arena Bldg.

53

Retail Properties
The following tables provide basic summary information for our 14 retail properties as of December 31, 2012. Five of ourproperties are located in the central Tokyo, five are located in greater Tokyo and four are located in other cities in Japan.

Property
Number

Property Name

Location

Acquisition
Price(1)(in millions)

Percentage ofPortfolio
Acquisition
Price
(%)

Book Value(in millions)

Land
(m²)

Leasable
Area
Owned orCo-ownedby JPR(m²)

3.1¥11,656

1,010.47

8,076.85

Central Tokyo
A-1

JPR Shibuya Tower
Shibuya-ku, Tokyo
Records Bldg.

¥12,000

A-2

JPR Daikanyama

Shibuya-ku, Tokyo

2,160

0.6

2,199

277.12651.29A-3

JPR Jingumae 432

Shibuya-ku, Tokyo

4,275

1.1

4,340

198.101,027.33

A-4

Shinjuku Sanchome
Shinjuku-ku, Tokyo
East Bldg.

2,740

0.7

2,728

2,578.69

2,347.81

A-5

Yurakucho Ekimae
Bldg. (Yurakucho
Itocia)Chiyoda-ku, Tokyo

3,400

0.9

3,377

6,808.12

1,101.92

Nishitokyo, Tokyo

10,2002.6

7,774

12,326.30

31,121.71

Greater Tokyo
B-1
Tanashi ASTA

(2)

B-3

Cupo-la Main Bldg. Kawaguchi, Saitama

2,100

0.5

1,888

15,008.28

5,963.00

B-4

JPR Musashikosugi Kawasaki,
Bldg.
Kanagawa

7,260

1.9

7,240

4,761.62

19,740.95

B-5

Musashiurawa
Shopping Square

Saitama, Saitama

4,335

1.1

4,065

8,317.99

14,960.69

B-6

Kawasaki Dice
Bldg.

Kawasaki,Kanagawa

15,0803.8

14,411

4,475.45

13,066.69

C-1

JPR Umeda Loft
Bldg.

Osaka, Osaka

13,0003.3

12,572

3,518.68

18,586.97

C-3

Benetton
Shinsaibashi Bldg.

Osaka, Osaka

5,430

1.4

5,250

609.315,303.98

C-4

Housing Design
Center Kobe

Kobe, Hyogo

7,220

1.8

6,630

3,994.47

35,444.13

C-5

JPR Chayamachi
Bldg.

Osaka, Osaka

6,000

1.5

6,014

592.452,484.39¥95,200

24.3¥90,150

64,477.05

159,877.71

Other Cities

Total
Notes:(1) Acquisition price excludes consumption and other taxes.

(2) Includes land for the whole redevelopment area that includes the Cupo-la Main Bldg.

54

Form of Ownership
Under Japanese law, buildings and the underlying land upon which they are built can be owned independently of each other.
Each of the buildings and the underlying land in turn can be co-owned with a third party. Furthermore, a building (but not land)
may be compartmentalized, so that we own 100% of certain parts of the building. The following table summarizes ourownership structure with respect to each of our current properties.
Office Properties
Form of OwnershipArea Owned
Gross Floor or Co-owned
Area(1)by Us(2)Property
Number

Property Name

A-1

Kanematsu Bldg.

December 27, 2001

Type
Co-ownership

(%)
79.4

Type
Co-ownership

(%)
79.4

(m²)
14,995.09(m²)
11,906.10

A-2

Kanematsu Bldg.
Annex

December 27, 2001

Co-ownership79.4

Co-ownership

79.4

4,351.46

A-3

JPR Ningyo-cho
Bldg.

November 16, 2001

Ownership

100.0

Ownership

100.0

A-4

Shin-Kojimachi
Bldg.

(1) November 16, 2001
(2) November 21, 2002
(3) November 12, 2004

Co-ownership(1) 49.0(2) 21.0(3) 7.3

Compartmentalized —Ownership(3)A-5

JPR Crest
Takebashi Bldg.

June 21, 2002

Ownership

100.0

Ownership

A-6

MS Shibaura
Bldg.

March 28, 2003

Ownership of aPart ofSite/Co-owners
hip ofLeasehold
Rights(4)—/36.0(4) Compartmentalized
Ownership/Compartmentalized
Co-ownership(5)Acquisition Date

Land

Building

Co-owner(s)Land

Building

The Dai-ichi Life
Insurance Co.,Ltd.

The Dai-ichi
Life InsuranceCo., Ltd.

3,455.06

The Dai-ichi Life
Insurance Co.,Ltd.

The Dai-ichi
Life InsuranceCo., Ltd.

4,117.70

4,117.70—

5,152.98(1) 2,067.34(2) 884.22(3) 306.58

100.0

4,790.68

4,790.68——

31,020.21

15,439.97——

10,553.34

4,035.15

The Dai-ichi Life
Insurance Co.,
Ltd., one
individual owner(3

K.K. Fuzoku
Bunka Kenkyusho,
The Iwakuni
Foundation for
Scholarship

July 23, 2003

Co-ownershipof a Part ofSite(6)

61.8

A-8

Fukuoka Bldg.

(1) October 15, 2003
(2) April 15, 2005

Co-ownershipof a Part ofSite(7)(1) 14.3(2) 7.5(1) —(1)Compartmentalized /81.9(2)—(8)
Ownership/Compartmentalized
Co-ownership(2)
Compartmentalized
Ownership(8)11,627.74(1) 1,303.62(2) 716.79

The Bank ofFukuoka, threeother corporate
entities

A-9

JPR Ichigaya
Bldg.

May 28, 2004

Ownership

100.0

Ownership

100.0

5,888.82

5,888.82—

A-10

Oval Court Ohsaki June 1, 2004
Mark West

Co-ownershipof a Part ofSite(9)27.1

Compartmentalized
Ownership—

28,575.80

4,024.84

Nippon COMSYS
Corporation, threeother owners

A-11

Shinjuku Square
Tower(1) July 2, 2004
(2) September 26, 2008

Co-ownership(1) 29.3(2) 0.5(1) —(1)Compartmentalized (2) 1.1(10)Ownership(2)
Compartmentalized
Co-ownership(10)78,796.00(1)10,765.74(2)165.28(1) Shinjuku
Square Tower
Co-owners
Association,
Tokyo
Metropolitan
Government, two
corporate entities(2) Tokyo
Metropolitan
Government, 54
individuals, 5
corporate entities

A-12

BYGS Shinjuku
Bldg.

Co-ownership(1) 25.0(2) 50.0(3) 25.0—(12)25,733.10

5,535.90(1) 6,433.28(2) 12,866.55(3) 6,433.28
1,233.50—

Across Shinkawa
Bldg. Annex(1) 25.0(2) 50.0(3) 25.0
Ownership of a
— (11)(11)
Part of Site

Co-ownership

A-13(1) November 9, 2004
(2) April 12, 2005
(3) July 13, 2010
November 26, 2004

A-14

Shinjuku Center
Bldg.

March 27, 2008

Co-ownershipof a Part ofSite(13)40.0

176,607.89

8,172.88

40.0(13)Compartmentalized
Co-ownership—

Aozora Trust
Bank, Ltd.

58.0

Gotanda First
Bldg.

Compartmentalized
Ownership

—

(5)

A-7

Compartmentalized
Ownership——

RKB Mainichi
Broadcasting
Corp.

—

—

(1) —
(2) Tokyo
Metropolitan
Government,
55 individuals,
4 corporate
entities——

TMK Shinjuku
Center Building—

TMK
Shinjuku
CenterBuilding

55

Form of Ownership
Property
Number

Property Name

Acquisition Date

Land

Area Owned
Gross Floor or Co-owned(1)
Area
by Us(2)Building

Type

(%)

Type

(%)

(m²)

(m²)

Co-owner(s)Land

Building

A-15

Minami Azabu
Bldg.

July 14, 2008

Ownership

100.0

Ownership

100.0

4,570.63

4,570.63

A-16

Shinagawa Canal
Bldg.

December 19, 2008

Co-ownership

45.6

Compartmentalized
Ownership—(14)

5,216.21

1,677.42

A-17

Rokubancho Bldg. December 2, 2009

Ownership

100.0

Compartmentalized
Ownership

100.0

4,205.09

4,205.09

—

—

A-18

JPR Harajuku
Bldg.

December 25, 2009

Ownership

100.0

Compartmentalized
Ownership

100.0

6,466.94

6,466.94

—

—

A-19

Tokyo Tatemono
Kyobashi Bldg.

February 12, 2010

Ownership of aPart of Site/
Leasehold
Rights(15)100.0Compartmentalized
Ownership

100.0

4,419.79

4,419.79

—

—

A-20

JPR Nihonbashihoridome Bldg.

March 31, 2010

Ownership

100.0

Ownership

100.0

7,190.82

7,190.82

—

—

A-21

JPR Sendagaya
Bldg.

May 31, 2010

Ownership

100.0

Ownership

100.0

7,683.19

7,683.19

—

—

A-22

Ginza Sanwa
Bldg.

August 29, 2011

Co-ownershipof a Part ofSite(16)

64.7

Compartmentalized
Co-ownership (17)35.4(17)

8,851.00

2,042.81

A-23

Otemachi 1-6 Plan March 13, 2012(Land with
LeaseholdInterest)*

Ownership

100.0

—

—

11,034.78

11,034.78

B-1

Arca East

November 16, 2001

Co-ownership

41.1

Compartmentalized
Ownership—

34,281.86

6,911.25

B-2

JPR Chiba Bldg.

December 13, 2001

Ownership

100.0

Ownership

100.0

9,072.57

9,072.57

—

—

B-3

JPR Yokohama
November 16, 2001
Nihon Odori Bldg.

Ownership

100.0

Ownership

100.0

9,146.52

9,146.52

—

—

B-5

Shinyokohama
2nd Center Bldg.

September 25, 2002

Co-ownership50.0

Co-ownership

50.0

7,781.93

3,890.97

Mizuho Trust &Banking Co., Ltd.

Mizuho Trust& BankingCo., Ltd.

B-6

Kawaguchi Center February 13, 2004
Bldg.

Ownership of aPart of Site/Coownership(18)100.0 /
86.5

Compartmentalized
Ownership—

28,420.85

15,401.91

Japan Science andTechnology
Agency—B-7

JPR Ueno East
Bldg.

March 1, 2004

Ownership

100.0

Ownership

100.0

8,490.44

8,490.44

—

—

B-8

TachikawaBusiness Center
Bldg.

(1) September 30, 2005
(2) February 28, 2007

Co-ownership(1) 16.9(2) 29.7

Compartmentalized —Ownership

14,706.36(1) 1,746.58(2) 3,065.63

Tama-shinkin
Bank and twoother owners—

B-9

Rise Arena Bldg.

March 22, 2007

Co-ownership

15.9

Compartmentalized
Ownership/Compartmentalized
Co-ownership(20)— /95.5(20)91,280.94

5,972.42

Mizuho Trust &Mizuho Trust
Banking Co., Ltd., & Banking
three other owners Co., Ltd.

B-10

Yume-ooka Office July 10, 2007
Tower

Co-ownership

19.7

Compartmentalized
Ownership—

185,974.87

14,196.02

B-11

Olinas Tower

June 29, 2009

Ownership of aPart of Site(21)—Compartmentalized
Ownership(22)—(22)

257,842.41

23,692.60

City of Yokohama,KeikyuCorporation, 11
other owners—

B-12

Tokyo Tatemono
Yokohama Bldg.

December 27, 2010

Ownership

100.0

Ownership

100.0

8,772.51

8,772.51

C-1

Niigata Ekinan
Center Bldg.

November 16, 2001

Co-ownership

52.7

Compartmentalized
Ownership—

19,950.42

5,444.58

56——

JA Zen-noh Meat
Foods Co., Ltd.

Matsuya Co., Ltd.

——

Matsuya Co.,
Ltd., Japan
Real Estate
Investment
Corporation—

East Japan
Railway Company,
other 24 owners—

The Daishi Bank,
Ltd., three
individuals

—

—

—

—

—

Form of Ownership
Property
NumberLand

Co-owner(s)Area Owned
Gross Floor or Co-owned(1)
Area
by Us(2)Property Name

Acquisition Date

Building

C-4

Tokyo Tatemono
Honmachi Bldg.

November 16, 2001

Type
Co-ownership

(%)
64.3

Type
(%)
Compartmentalized — /Ownership/
82.9(23)
Compartmentalized
Co-ownership(23)(m²)
14,619.52(m²)
7,709.76

C-7

JPR Hakata Bldg.

November 16, 2001

Ownership

100.0

Ownership

100.0

9,828.73

9,828.73

—

—

C-9

JPR Naha Bldg.

November 16, 2001

Ownership

100.0

Ownership

100.0

5,780.71

5,780.71

—

—

C-12

Sompo Japan
Sendai Bldg.

June 26, 2002

Ownership

100.0

Ownership

100.0

10,783.52

10,783.52

—

—

C-13

June 26, 2002

Ownership

100.0

Ownership

100.0

6,715.07

6,715.07

—

—

C-14

Sompo Japan
Wakayama Bldg.
Tenjin 121 Bldg.

June 21, 2002

Co-ownership

52.2

Compartmentalized
Ownership—

8,690.95

3,117.09

C-17

JPR Dojima Bldg. January 23, 2004

Ownership

100.0

Ownership

100.0

5,696.01

5,696.01

—

—

C-18

JPR Hakata-chuo
Bldg.

June 11, 2004

Ownership

100.0

Ownership

100.0

3,874.81

3,874.81

—

—

C-19

JPR Nagoya
Fushimi Bldg.

March 22, 2005

Ownership

100.0

Ownership

100.0

10,201.44

10,201.44

—

—

C-20

Yakuin Business
GardenAugust 8, 2012

Ownership

100.0

Ownership

100.0

22,286.35——

22,286.35

Land

Building

Mizuho Bank, Ltd. Mizuho Bank,
Ltd.

Tohyama KaiseiCo., Ltd., ten otherowners—

Notes:(1) “Gross Floor Area” indicates the total floor area of the entire building (including the area owned by other co-owners and/or sectional owners). In the case of the
Shinjuku Square Tower (A-11), gross floor area is indicated with respect to the entire redevelopment area. In the case of the Rise Arena Bldg. (B-9), gross floorarea includes the residence area. In the case of the Olinas Tower (B-11), gross floor area includes the retail area and residence area.
(2) “Area Owned or Co-owned by Us” indicates the area calculated by multiplying the “Gross Floor Area” by our ownership ratio, in the case of the following
properties, rounded to the nearest decimal place: Kanematsu Bldg. (A-1), Kanematsu Bldg. Annex (A-2), JPR Ningyo-cho Bldg. (A-3), JPR Crest Takebashi
Bldg.(A-5), JPR Ichigaya Bldg. (A-9), BYGS Shinjuku Bldg. (A-12), Minami Azabu Bldg. (A-15), Rokubancho Bldg. (A-17), JPR Harajuku Bldg. (A-18),
Tokyo Tatemono Kyobashi Bldg. (A-19), JPR Nihonbashi-horidome Bldg. (A-20), JPR Sendagaya Bldg. (A-21), JPR Chiba Bldg. (B-2), JPR Yokohama Nihon
Odori Bldg. (B-3), Shinyokohama 2nd Center Bldg. (B-5), JPR Ueno East Bldg. (B-7), Tokyo Tatemono Yokohama Bldg. (B-12), JPR Hakata Bldg. (C-7), JPR
Naha Bldg. (C-9), Sompo Japan Sendai Bldg. (C-12), Sompo Japan Wakayama Bldg. (C-13), JPR Dojima Bldg. (C-17), JPR Hakata-chuo Bldg. (C-18) and JPR
Nagoya Fushimi Bldg. (C-19). In the case of the following properties, “Area Owned or Co-owned by Us” indicates the area exclusively owned by us, as set out
in the real estate registry book, rounded to the nearest decimal place: Shin-Kojimachi Bldg. (A-4), Gotanda First Bldg. (A-7), Oval Court Ohsaki Mark West
(A-10), Shinjuku Square Tower (A-11), Across Shinkawa Bldg. Annex (A-13), Arca East (B-1), Kawaguchi Center Bldg. (B-6), Tachikawa Business Center
Bldg. (B-8), Niigata Ekinan Center Bldg. (C-1) and Tenjin 121 Bldg. (C-14). In the case of the following properties, “Area Owned or Co-owned by Us”
indicates the area calculated by multiplying the exclusively owned area, as set out in the real estate registry book (including the area owned by other co-owners
and sectional owners), by our ownership ratio, rounded to the second decimal point: MS Shibaura Bldg. (A-6), Fukuoka Bldg. (A-8), Shinjuku Center Bldg.
(A-14), Shinagawa Canal Bldg. (A-16), Ginza Sanwa Bldg. (A-22), Rise Arena Bldg. (B-9), Yume-ooka Office Tower (B-10), Olinas Tower (B-11) and Tokyo
Tatemono Honmachi Bldg. (C-4).
(3) We have compartmentalized ownership with respect to (a) 2,067.34 m² of the part of the building acquired on November 16, 2001, (b) 884.22 m2 of the part ofthe building acquired on November 21, 2002 and (c) 306.58 m2 of the part of the building acquired on November 12, 2004.
(4) The site is comprised of three parcels. One parcel is owned by our trustee (i.e., Mizuho Trust & Banking Co., Ltd.), one parcel is co-owned by Urban
Renaissance Agency and Minato-ku, Tokyo, and the remaining parcel is owned by Aozora Trust Bank, Ltd. The leasehold rights have been created with respect
to all three parcels of the site and are co-owned by our trustee, Urban Renaissance Agency and Aozora Trust Bank, Ltd. in proportion to the floor area of thebuilding owned by each of such parties.
(5) We have compartmentalized ownership with respect to a part of 1st floor and 2nd through 8th floors (14,305.05 m2 in total) and co-ownership (58.0%) of theparking lots of 1,957.27 m2.
(6) The site is comprised of two parcels. One parcel is co-owned by us and other co-owners, and the other is owned by The Dai-ichi Life Insurance Co., Ltd.
(7) The site is comprised of two parcels. One parcel is co-owned by us and other co-owners, and the other is owned by The Bank of Fukuoka.
(8) We have compartmentalized ownership with respect to the 6th floor, compartmentalized co-ownership (81.9%) with respect to the 10th floor of the part of thebuilding acquired on October 15, 2003 and compartmentalized ownership with respect to the 7th floor of the part of the building acquired on April 15, 2005.
(9) The site is comprised of two parcels. One parcel is co-owned by us and other co-owners, and the other is leased by Zuiouji temple to Nippon COMSYS
Corporation.
(10) We have compartmentalized ownership with respect to 10,765.74 m2 in total of the 19th through 29th floors and 165.28 m2 in total of the 2nd through 17th
floors of the building.
(11) The site is comprised of five parcels. Three parcels are owned by us and two are owned by other owners of the compartmentalized portion of the building.
(12) We have compartmentalized ownership with respect to 1,233.50 m2 in total of a part of the 1st basement floor, a part of 2nd floor, and 8th through 10th floors of
the building.

57

(13) The site is comprised of seven parcels. Six parcels are co-owned by us and other co-owners, and the remaining parcel is co-owned by Tokyo Tatemono Co., Ltd.
and Meiji Yasuda Life Insurance Company (other owners of the compartmentalized portion of the building). In addition to the above-mentioned land andbuilding, we have co-ownership (4/100) of the underground passage under common use, covering 157.02 m2.
(14) We have compartmentalized ownership with respect to 1,677.42 m2 in total of 5th, 6th and 7th floors of the building.
(15) The site is comprised of two parcels. One parcel is owned by us and the other is leased by an individual to us.
(16) The site is comprised of four parcels. One parcel is co-owned by us and Matsuya Co., Ltd. and the other three are owned by Matsuya Co., Ltd. and Japan Real
Estate Investment Corporation.
(17) The ownership of the building is comprised of two compartmentalized ownership interests. One such interest is co-owned by us and two other co-owners andanother is co-owned by such two co-owners. We have co-ownership of the common space of the building and our ownership ratio is 18.35%.
(18) The site is comprised of three parcels. Two of such parcels are co-owned by us and other owners of the compartmentalized portion of the building, and theremaining one is owned by us.
(19) We have compartmentalized ownership with respect to (a) 1,746.58 m2 of the 4th and 5th floors and (b) 3,065.63 m2 of the 8th through 10th floors and a part of
11th floor of the building.
(20) We have compartmentalized ownership and the compartmentalized co-ownership (95.5%) with respect to 5,972.42 m2 in total of the building.
(21) The site is comprised of seven lots. One of such parcels is owned by us and the other six parcels are owned by other owners of the compartmentalized portion of
the building.
(22) We have compartmentalized ownership with respect to 23,692.60 m2 in total of the 1st and the 5th through 18th floors of the business tower.
(23) We own 6,921.52 m2 in total on the 1st basement floor and on the 4th through 9th floors and hold co-ownership (82.9%) of the parking lots on the 2nd and 3rdbasement floors and on the 1st floor of 950.53 m2 in total.

58

Retail Properties
Form of Ownership
Property
NumberA-1

Property
Name

Acquisition Date

Land

Building

Gross
Floor
Area(1)

Area Owned
or Co-owned
by Us(2)Co-owner(s)Land

Building

June 30, 2003

Type
Ownership

(%)
100.0

Type
Ownership

(%)
100.0

(m²)
8,449.56(m²)
8,449.56

—

—

A-2

JPR Shibuya
Tower Records
Bldg.
JPR Daikanyama

October 5, 2004

Ownership

100.0

Ownership

100.0

668.09668.09——A-3

JPR Jingumae 432 March 24, 2006

Ownership

100.0

Ownership

100.0

1,066.81

1,066.81——

Compartmentalized (1) 4.3
Co-ownership(2) 16.7(4)24,617.65(1) 474.50(2) 1,853.64—

IsetanMitsukoshi
Holdings,
Toei
Company,Ltd., Tokyo
Chamber ofCommerce
Marui Co.,
Ltd., fourotherownersK.K. ASTA
NishiTokyo,
46 otherowners——/—A-4

Shinjuku
Sanchome East
Bldg.

A-5

Yurakucho Ekimae August 27, 2008
Bldg. (Yurakucho
Itocia)Co-ownership

1.9

Compartmentalized
Co-ownership

4.3

71,957.65

1,087.63

B-1

Tanashi ASTA

November 16, 2001

Co-ownership

42.1

Compartmentalized
Co-ownership

52.9

80,675.27

20,727.97

B-3

Cupo-la Main
Bldg.

March 31, 2006

Co-ownership

7.3

Compartmentalized
Ownership—

48,321.96

5,870.33

B-4

JPR
Musashikosugi
Bldg.
Musashiurawa
Shopping Square

September 28, 2006

Ownership

100.0

Ownership

100.0

18,394.32

18,394.32——

March 19, 2007

Ownership(Co-ownership ofTrust BeneficiaryInterests)

50.0

50.0

28,930.36

14,465.18

—

—

B-6

Kawasaki Dice
Bldg.

April 12, 2007(1) —(52.0)(2) —(12.6)(6)36,902.01(1) 13,529.76(2) 395.76

—

—

C-1

JPR Umeda Loft (1) May 15, 2003
Bldg.
(2) July 16, 2003
Benetton
May 30, 2005
Shinsaibashi Bldg.
Housing Design
September 28, 2005
Center Kobe
JPR Chayamachi August 30, 2006
Bldg.

Ownership/
Co-ownership ofSurface Rights(Co-ownership ofTrust BeneficiaryInterests)(5)Ownership

B-5

C-3
C-4
C-5

(1) March 14, 2007
(2) April 24, 2008

(3)

Ownership of aPart of Site/
Leasehold Rights
over a part of Site(3)Compartmentalized
Ownership (Coownership of Trust
BeneficiaryInterests)—/ 83.8,13.1 Compartmentalized(5)(52.0,12.6) Ownership (Coownership of Trust
BeneficiaryInterests)(6)More than
30 owners,
includingMarui Co., Ltd.
Tokyo
Metropolitan
Government,
108 otherownersCity of
Kawaguchi,
19 otherowners100.0

Ownership

100.0

17,897.56

17,897.56——

Ownership

100.0

Ownership

100.0

5,303.98

5,303.98——

Ownership

100.0

Ownership

100.0

33,877.71

33,877.71——

Ownership

100.0

Ownership

100.0

3,219.36

3,219.36——

Notes:(1) “Gross Floor Area” indicates the total floor area of the entire building (including the area owned by other co-owners and/or sectional owners).
(2) “Area Owned or Co-owned by Us” indicates the area calculated by multiplying the “Gross Floor Area” by our ownership ratio, in the case of the following
properties, rounded to the nearest decimal place: JPR Shibuya Tower Records Bldg. (A-1), JPR Daikanyama (A-2), JPR Jingumae 432 (A-3), JPR
Musashikosugi Bldg. (B-4), JPR Umeda Loft Bldg. (C-1), Benetton Shinsaibashi Bldg. (C-3), Housing Design Center Kobe (C-4) and JPR Chayamachi Bldg.
(C-5). In the case of Cupo-la Main Bldg. (B-3), “Area Owned or Co-owned by Us” indicates our exclusively owned area, as set out in the real estate registrybook. In the case of the following properties, “Area Owned or Co-owned by Us” indicates the area calculated by multiplying our exclusively owned area, as set
out in the real estate registry book (including the area owned by other co-owners and sectional owners), by our ownership ratio, rounded to the nearest decimal
place: Shinjuku Sanchome East Bldg. (A-4), Yurakucho Ekimae Bldg. (Yurakucho Itocia) (A-5), Tanashi ASTA (B-1) and Kawasaki Dice Bldg. (B-6).
(3) The site is actually comprised of 11 parcels (ten parcels in the land registry). Two of such parcels are owned by us, and other nine parcels are owned by otherowners of the compartmentalized portion of the building (and also one of such nine parcels is leased to us).
(4) We have compartmentalized co-ownership (4.3%) with respect to 474.50 m2 of the part of the building acquired on March 14, 2007 and the compartmentalized
co-ownership (16.7%) with respect to 1,853.64 m2 of the part of the building acquired on April 24, 2008.
(5) The site is comprised of 13 parcels. Surface rights have been established for the entire site and space rights to the site of the building have been set in proportion
to the surface rights. We have co-ownership (52.0%) of the trust beneficiary interests in real estate composed of co-owned (83.8%) surface rights and fourparcels (3,895.42 m2) of the site. We also have co-ownership (12.6%) of the trust beneficiary interests in real estate composed of co-owned (13.1%) surface
rights.
(6) We have co-ownership (52.0%) of the trust beneficiary interests in the compartmentalized ownership with respect to the 1st basement floor through 10th floor(excluding a part of the 1st and 2nd floors) of the building and co-ownership (12.6%) of the trust beneficiary interests in the compartmentalized ownership ofreal estate with respect to the 2nd basement floor of the building.

59Capital Expenditures of Owned Real Estate(1) Planned Capital Expenditures
The following are major items of capital expenditures for currently planned renovations, etc. for JPR-owned real estate andentrusted real estate regarding beneficiary interests in real estate. Further, the planned construction expenses include portions
that are classified as expenses in accounting.

Property Name

Location

PurposeSchedule

Minami Azabu
Bldg.
Shinjuku Center
Bldg.
JPR Dojima
Bldg.
Shinjuku Center
Bldg.
Shinjuku Center
Bldg.
Shinyokohama
2nd Center Bldg.
Shinyokohama
2nd Center Bldg.

Minato Ward,Tokyo
Shinjuku Ward,Tokyo
Osaka City,
Osaka
Shinjuku Ward,Tokyo
Shinjuku Ward,Tokyo
Yokohama City,
Kanagawa
Yokohama City,
Kanagawa

Replacement of air conditioningunits
3rd phase of renewal of passenger
elevators
1st phase of replacement of air
conditioning units
2nd phase of replacement of
substation facilities
4th and 5th phases of replacement of
toilets

Apr. 2013 ~Jun. 2013
Jul. 2011 ~Jun. 2014
Apr. 2013 ~May 2013
Oct. 2011 ~Mar. 2013
Aug. 2012 ~May 2013
Apr. 2013 ~May 2013
May 2013 ~May 2013

Replacement of toilets
1st phase of renewal of cubicle-typehigh voltage equipment on rooftop

Planned (millions of yen)
Payment
duringAmountTotal
the 22nd
Already
Value
FiscalPaid
Period
94

―

―

90

15

41

67

―

―

49

―

―

49

―

―

22

―

―

14

―

―

(2) Capital Expenditures during the 22nd Fiscal Period
The following are the capital expenditure amounts JPR invested in real estate and entrusted real estate during the 22nd period.
Among major capital expenditures, JPR conducted replacement of air conditioning units to maintain and enhance tenantsatisfaction, as well as renovation of common-use areas and installation of office automation floors for leased offices with theaim of attracting new tenants. In addition, aside from these constructions, JPR conducted construction of 388 million yen (Note),
which was appropriated as expenditures for repair and maintenance.

Property Name
Niigata Ekinan Center
Bldg.
Sompo Japan Sendai
Bldg.

Location

Niigata City, Niigata
Sendai City, Miyagi

Ginza Sanwa Bldg.

Chuo Ward, Tokyo

Shinyokohama 2nd
Center Bldg.

Yokohama City,
Kanagawa

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo

Other Properties

Purpose

PeriodReplacement of air
Apr. 2012 ~ Jul. 2012
conditioning units
Replacement of exterior
Aug. 2012 ~ Nov. 2012walls
3rd phase of replacement
Jul. 2012 ~ Dec. 2012of air conditioning units
2nd phase of replacement
Oct. 2012 ~ Dec. 2012of air conditioning units
3rd phase of replacement
Feb. 2012 ~ Jul. 2012of toilets
Replacement ofemergency power
Oct. 2011 ~ Oct. 2012
generators
Repair of common areas, installation of officeautomation floors, replacement of air conditioning
units, etc.

Total

Construction
Expenses(millions of yen)
158
36
29
28
28

27

370
679

(Note) Expenditures for repair and maintenance included 9 million yen of construction management fees paid to construction management companies as well as theamounts for repair and maintenance constructions themselves.

60

(3) Amounts Reserved for Long-Term Repairs and Maintenance Plans
JPR has deposited the following amounts from the redundant cash flow (including one accompanying internal reserve of profits)
such as depreciation in order to conduct large-scale repairs and maintenance work, based on long-term repairs and maintenanceplans for individual properties.

Operation Period
Balance of deposits
at beginning ofcurrent period
Deposits during theperiodAmounts used from
deposits during theperiodDeposits carriedforward to the next
period18th Fiscal Period(Jul. 1, 2010 Dec. 31, 2010)

19th Fiscal Period(Jan. 1, 2011 Jun. 30, 2011)

20th Fiscal Period(Jul. 1, 2011 Dec. 31, 2011)

21st Fiscal Period(Jan. 1, 2012 Jun. 30, 2012)(Millions of yen)
22nd Fiscal Period(Jul. 1, 2012 Dec. 31, 2012)

857

737

767

764

799

121

404

389

410

376

241

374

410

357

365

737

767

746

799

810

61

Other(1) Notice
Major issues related to the execution and modification, etc. of major agreements approved at JPR’s Board of Directors meeting
include the following:
Date of Board of
Directors Meeting

Approved Item

July 23, 2012

Execution of New Investment Unit
Underwriting Agreement and New Investment
Unit Purchase Agreement related to theGreenshoe Option

October 30, 2012

Consignment of administrative services
concerning the issuance of the Fifteenth Series
and the Sixteenth Series of Unsecured Bonds(Note 2)

Overview
In regards to the additional issuing of investment units
approved at the Board of Directors meeting on July 9, 2012,
the administrative services related to the offering of theseinvestment units were outsourced to the underwritersconsisting of Mizuho Securities Co., Ltd. and 7 other firms(Note 1). To tie a greenshoe option to the additional issuing ofinvestment units, JPR and Tokyo Realty Investment
Management, Inc. executed a new Investment Unit Purchase
Agreement related to the Greenshoe Option with Mizuho
Securities.
JPR consigned the administrative services related to theissuance of the Fifteenth Series and the Sixteenth Series ofUnsecured Bonds to Mizuho Securities Co., Ltd., Mitsubishi
UFJ Morgan Stanley Securities Co., Ltd., SMBC Nikko
Securities Inc., Daiwa Securities Co, Ltd. and Mizuho
Corporate Bank, Ltd. based on the decision by the executive
director to issue these bonds.

(Note 1) These seven companies consist of Merrill Lynch Japan Securities Co., Ltd., Daiwa Securities Co., Ltd., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.,
Tokai Tokyo Securities Co., Ltd., Mizuho International Plc, Merrill Lynch International and Deutsche Bank AG, London Branch.
(Note 2) The comprehensive resolution regarding the issuance of these investment corporation bonds was made at the Board of Directors meeting held on April 25,
2012. The Fifteenth Series and the Sixteenth Series of Unsecured Bonds were issued on November 22, 2012 based on this resolution.

(2) Other
Unless otherwise stated, monetary amounts are rounded down and percentage figures are rounded off to the nearest specified
unit in this Business Report.

62

Related-Party Transactions
Since January 1, 2010, the first day of our seventeenth fiscal period, we have not entered into material transactions with our
executive or supervisory directors or companies with whom they have a relationship or with any of our principal unitholders oraffiliates, other than those discussed below or elsewhere in this Business Report.
The following sets forth an overview of our material relationships with the Asset Manager and its shareholders, Tokyo Tatemono
Co., Ltd., Taisei Corporation, Yasuda Real Estate Co., Ltd., Meiji Yasuda Life Insurance Company and Sompo Japan Insurance
Inc. We believe that the terms of the transactions described below with each of these related parties were at least as favorable tous as those that we could have obtained from unrelated parties.
Transactions with Tokyo Realty Investment Management, Inc.
Satoshi Okubo has served as our substitute executive director since September 2011 and has been the CEO and Representative
Director of the Asset Manager since June 2010. Our material transactions with the Asset Manager are as follows.
Asset Management and Acquisitions
We have entered into an asset management agreement with the Asset Manager with respect to the operation and management ofour properties. In accordance with this agreement, we pay the Asset Manager a fixed fee of ¥12.5 million per month and three
types of incentive fees. The incentive fees are based on our total revenue, retained earnings and an asset acquisition fee for realestate property or asset-backed securities acquired. Over the six fiscal periods ended December 31, 2012, we paid the AssetManager an aggregate amount of ¥2,827 million, of which ¥2,615 million was for asset management fees.
Fiscal Period Ended
June 30,
2010

Asset management fee
Asset acquisition fee(1)¥¥447,576
63,500511,076

December 31,
2010

¥
¥

421,951
25,750447,701

June 30,2011¥¥

December 31,
2011(in thousands)
415,874¥
421,613—8,500
415,874¥
430,113

June 30,
2012¥¥

443,284
90,000533,284

December 31,
2012

¥
¥

465,059
27,490492,549

Note:(1)

Asset acquisition fees have been capitalized in property values on the balance sheets.

Purchase of Our Units
At the time of our incorporation, we issued 40 units to the Asset Manager in return for a capital contribution of ¥20 million.
Following a unit split on January 22, 2002, the number of units owned by the Asset Manager increased to 100. The number ofinvestment units held by the Asset Manager has remained at 100 units through December 31, 2012, or 0.01% of our issued andoutstanding units, with the total investment unchanged at ¥20 million.
Transactions with Tokyo Tatemono Co., Ltd.
Tokyo Tatemono Co., Ltd. currently owns 40% of the Asset Manager’s issued and outstanding share capital. Our materialtransactions with Tokyo Tatemono Co., Ltd. are as follows.
Acquisitions
As part of our strategic replacement of assets, since January 1, 2009, we have acquired five properties from Tokyo Tatemono Co.,
Ltd. and from special purpose companies in which Tokyo Tatemono Co., Ltd. had equity interests: the Olinas Tower, a large
scale office property in Tokyo, for the acquisition price of ¥31,300 million, the Tokyo Tatemono Kyobashi Bldg. for theacquisition price of ¥5,250 million, the Tokyo Tatemono Yokohama Bldg. for the acquisition price of ¥7,000 million, JPR
Sendagaya Bldg. for the acquisition price of ¥15,050 million and Otemachi 1-6 Plan (Land with Leasehold Interest) (tentativename) for the acquisition price of ¥36,000 million. Tokyo Tatemono Co., Ltd. also acted as the selling agent with respect to ouracquisition of certain properties.
We also acquired Yakuin Business Garden in August 2012 from a special purpose company in which Tokyo Tatemono Co., Ltd.
has equity interest and from which it has been entrusted with asset management.

63

Various Services
We have appointed Tokyo Tatemono Co., Ltd. as our general tenant services agent, property transfer agent, leasing management
and construction management adviser, environmental legislation adviser and property manager. In consideration of thisappointment, over the six fiscal periods commencing January 1, 2010 and ended December 31, 2012, we paid Tokyo Tatemono
Co., Ltd. an aggregate of ¥3,618 million in fees that are partly recognized as property management fees and partly recognized as
outsourcing expenses.
Over the six fiscal periods ended December 31, 2012, we paid Tokyo Tatemono Co., Ltd. brokerage fees of ¥1,449 million. We
also paid Tokyo Tatemono Real Estate Sales Co., Ltd., an affiliate of Tokyo Tatemono Co., Ltd., brokerage fees of ¥322 million,
and E-State Online Co., Ltd., a wholly-owned subsidiary of Tokyo Tatemono Co., Ltd., brokerage fee of ¥5 million andadvertising fees of ¥9 million over this period.
Purchase of Our Units
At the time of our incorporation, we issued 100 units to Tokyo Tatemono Co., Ltd. in return for a capital contribution of ¥50
million. On November 16, 2001, Tokyo Tatemono Co., Ltd. purchased 19,100 of our units by way of private placement for an
aggregate price of ¥9,550 million. Following a unit split on January 22, 2002, the number of units owned by Tokyo Tatemono
Co., Ltd. increased to 48,000 units. Tokyo Tatemono Co., Ltd. later sold 8,700 of our units on December 17, 2002 and 10,000
units on January 21, 2004. As of December 31, 2012, Tokyo Tatemono Co., Ltd. owned 29,300 units, or 3.55% of our issued andoutstanding units, making it our fifth largest unitholder.
Repairs
In addition to the transactions referred to above, over the six fiscal periods commencing January 1, 2010 and ended December
31, 2012, we paid ¥2,063 million for repairs on the properties in our portfolio conducted by Tokyo Tatemono Co., Ltd. We also
paid ¥506 million and ¥233 million for repairs conducted by Shinjuku Center Building Management Co., Ltd. and Tokyo
Tatemono Techno-build Co., Ltd., both wholly-owned subsidiaries of Tokyo Tatemono Co., Ltd., Ltd., and ¥55 million forrepairs conducted by Tokyo Real Estate Management Co., Ltd., an affiliate of Tokyo Tatemono Co., Ltd.
Transactions with Taisei Corporation
Taisei Corporation currently owns 20% of the Asset Manager’s issued and outstanding share capital. Our material transactions
with Taisei Corporation are as follows.
Acquisitions
We acquired the Otemachi 1-6 Plan (Land with Leasehold Interest) (tentative name) in March 2012 from a special purpose
company in which Tokyo Tatemono Co., Ltd. and Taisei Corporation have equity interests.
Property Management Services
Over the six fiscal periods ended December 31, 2012, we paid Taisei-Yuraku Real Estate Co., Ltd. an aggregate of ¥19 million inproperty management fees.
Purchase of Our Units
At the time of our incorporation, we issued 100 units to Taisei Corporation in return for a capital contribution of ¥50 million. On
November 16, 2001, Taisei Corporation purchased 500 of our units by way of private placement for an aggregate price of ¥250
million. Following a unit split on January 22, 2002, the number of units owned by Taisei Corporation increased to 1,500. As of
December 31, 2012, Taisei Corporation owned 1,500 of our issued and outstanding units.
Repairs
In addition to the transactions referred to above, over the six fiscal periods commencing January 1, 2010 and ended December
31, 2012, we paid ¥548 million for repairs conducted by Taisei Corporation and ¥497 thousand for repairs conducted by
Taisei-Yuraku Real Estate., Co., Ltd. on the properties in our portfolio.
Transactions with Yasuda Real Estate Co., Ltd.
Yasuda Real Estate Co., Ltd. currently owns 20% of the Asset Manager’s issued and outstanding share capital.
General Tenant Services and Property Management Services
We appointed Yasuda Real Estate Co., Ltd. as our general tenant services agent and property manager in 2002. In considerationof this appointment, over the six fiscal periods ended December 31, 2012, we paid Yasuda Real Estate Co., Ltd. an aggregate of64¥182 million in fees that are partly recognized as property management fees and partly recognized as outsourcing expenses.
Over the six fiscal periods ended December 31, 2012 we paid Yasuda Real Estate Co., Ltd. brokerage fees of ¥3 million.
Purchase of Our Units
On November 16, 2001, Yasuda Real Estate Co., Ltd. purchased 4,000 of our units by way of private placement for an aggregate
price of ¥2 billion. Following a unit split on January 22, 2002, the number of units owned by Yasuda Real Estate Co., Ltd.
increased to 10,000. Yasuda Real Estate Co., Ltd. sold 5,000 of its units on January 23, 2003. As of December 31, 2012, Yasuda
Real Estate Co., Ltd. owned 5,000 of our issued and outstanding units.
Repairs
In addition to the transactions referred to above, over the six fiscal periods commencing January 1, 2010 and ended December
31, 2012, we paid ¥153 million for repairs conducted by Yasuda Real Estate Co., Ltd. on the properties in our portfolio.
Transactions with Meiji Yasuda Life Insurance Company
Meiji Yasuda Life Insurance Company currently owns 10% of the Asset Manager’s issued and outstanding share capital.
Purchase of Our Units
As of December 31, 2012 Meiji Yasuda Life Insurance Company owned 24,000 units, or 2.90%, of our issued and outstanding
units, making it our eighth largest unitholder.
Transactions with Sompo Japan Insurance Inc.
Sompo Japan Insurance Inc. currently owns 10% of the Asset Manager’s issued and outstanding share capital.

65

Custodian, General Administrator and Other Agents
Custodian, General Administrator and Transfer Agent
Mizuho Trust & Banking Co., Ltd., or Mizuho Trust, a Japanese trust and banking subsidiary of Mizuho Financial Group, Inc., isthe custodian of our assets and our general administrator. We and Mizuho Trust are parties to a general administration and asset
custody agreement. It has a two-year term, which is automatically extended for successive two-year periods unless three months’
advance termination notice is provided.
Pursuant to the agreement, Mizuho Trust provides custodial, general administration and transfer agency services to us, including
the following:• administration of the unitholder registry;• administration of issuance of our units;• administration of our unitholders meeting and the board of directors’ meeting;• administration of accounting matters;• administration of distributions to our unitholders;• receipt of notification from our unitholders;• preparation of financial documents;• administration of tax payments; and• custody of our assets.
Under this agreement, we pay to Mizuho Trust a general administration fee and an asset custody fee for each fiscal period
payable by the end of the month immediately following the relevant fiscal period. Since September 14, 2011, the generaladministration fee is 0.04% per fiscal period of our total assets divided by two for the portion of our assets that is¥200,000 million or less, 0.02% per fiscal period of our total assets divided by two for the portion of our assets that is more than¥200,000 million but less than or equal to ¥400,000 million, 0.018% per fiscal period of our total assets divided by two for the
portion of our assets that is more than ¥400,000 million but less than or equal to ¥600,000 million, and 0.016% per fiscal periodof our total assets divided by two for the portion of our assets that is more than ¥600,000 million, plus a fee calculated bymultiplying an amount up to ¥1 million and determined through discussions by the number of properties held directly by us (notthrough a trust structure). Further, under this agreement, each month we pay Mizuho Trust transfer agent fees calculated basedon the number of unitholders and the amount of transfer agency services provided by Mizuho Trust. We also reimburse Mizuho
Trust for certain expenses.
In addition, Mizuho Trust is also our special accounts administrator. We and Mizuho Trust are parties to a special accounts
administration agreement with an undefined term and a customary fee arrangement. Pursuant to this agreement, Mizuho Trust
provides us with special accounts administration services, including the registration and administration of account information.
General Administrators, Trustees and Paying Agents for Investment Corporation Bonds
Mizuho Trust and Mizuho Corporate Bank, Ltd., or Mizuho Corporate, a Japanese corporate banking subsidiary of Mizuho
Financial Group Inc., are general administrators and trustees for certain issues of our investment corporation bonds, respectively.
We and each of Mizuho Trust and Mizuho Corporate has entered into a relevant agreement with customary fee arrangements foreach issue.
In addition, Mizuho Trust, Mizuho Corporate, Merrill Lynch Japan Securities Co., Ltd., Mizuho Securities Co, Ltd., Shinkin
Securities Co., Ltd. and Nomura Securities Co., Ltd. are paying agents for certain issues of our investment corporation bonds,
respectively. We and each of them have respectively entered into a relevant agreement with customary fee arrangements for eachissue.

66

Structure of JPR

Notes:(1) We have entered into an asset management agreement with the Asset Manager. See "The Asset Manager-Asset Management Agreement."(2) We have entered into a general administration and asset custody agreement and a special accounts administration agreement with Mizuho Trust. See "Custodian,
General Administrator, Transfer Agent, and General Administrators, Trustees and Paying Agents for Investment Corporation Bonds."(3) The Asset Manager is currently owned 40% by Tokyo Tatemono Co., Ltd., 20% by Taisei Corporation, 20% by Yasuda Real Estate Co., Ltd., 10% by Meiji
Yasuda Life Insurance Company and 10% by Sompo Japan Insurance Inc.
(4) As of June 30, 2012, 29,300 of our outstanding units are owned by Tokyo Tatemono Co., Ltd., 1,500 are owned by Taisei Corporation, 5,000 are owned by
Yasuda Real Estate Co., Ltd., and 24,000 are owned by Meiji Yasuda Life Insurance Company.
(5) See "Principal Unitholders" for information regarding our principal unitholders.
(6) We and each of Mizuho Trust and Mizuho Corporate have entered into an agreement for Mizuho Trust and Mizuho Corporate to act as general administrationand trustees for certain issues of our investment corporation bonds. See "Custodian, General Administrator, Transfer Agent, and General Administrators,
Trustees and Paying Agents for Investment Corporation Bonds."(7) We have entered into an agreement with each of Mizuho Trust, Mizuho Corporate, Merrill Lynch Japan Securities Co., Ltd., Mizuho Securities Co., Ltd.,
Shinkin Securities Co., Ltd. And Nomura Securities Co., Ltd. to appoint each of them as paying agents for certain issues of our investment corporation bonds.
See "Custodian, General Administrator, Transfer Agent, and General Administrators, Trustees and Paying Agents for Investment Corporation Bonds."

67

Audited Financial Statements

Balance Sheets(As of June 30, 2012 and December 31, 2012)
End of 21st Fiscal Period(as of June 30, 2012)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other¥12,750,078
11,910,686
256,788
153,433
4,713¥8,402,885
11,596,061
229,329
203,381259,150
5,689

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation

25,075,700

20,696,498

51,044,234(7,505,860)

57,328,085(8,339,934)

Buildings, net
Buildings in trust
Accumulated depreciation

43,538,373
75,570,997(20,326,948)

48,988,151
75,979,066(21,257,423)

Buildings in trust, net
Structures
Accumulated depreciation

55,244,049
41,823(7,914)54,721,643
44,461(9,160)

Structures, net
Structures in trust
Accumulated depreciation

33,908109,441(45,245)

35,300111,925(49,146)

Structures in trust, net
Machinery and equipment
Accumulated depreciation

64,196577,666(261,833)

62,778
720,700(283,078)

Machinery and equipment, net
Machinery and equipment in trust
Accumulated depreciation

315,833
1,418,326(956,595)

437,622
1,442,809(990,861)

Machinery and equipment in trust, net
Tools, furniture and fixtures
Accumulated depreciation

461,731
41,588(21,866)

451,947
42,589(23,853)

Tools, furniture and fixtures, net
Tools, furniture and fixtures in trust
Accumulated depreciation

19,721
112,390(76,099)

18,735
119,049(80,300)

36,291
106,669,360
158,879,372
104,711
1,009

38,749111,970,153
158,879,372
114,764
3,399

365,368,560

375,722,618

4,794,109
5,956

4,794,109
5,359

4,800,065

4,799,469

49,520577,784

49,520539,667

Tools, furniture and fixtures in trust, net
LandLand in trust
Construction in progress
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold right
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets

68(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)

627,304

589,187

370,795,930

381,111,275

146,257

176,542

146,257

176,542¥396,017,887¥401,984,316

End of 21st Fiscal Period(as of June 30, 2012)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Current portion of investment corporation bonds
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Total current liabilities
Noncurrent liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Total noncurrent liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary deposits
Deposits for advanced depreciation(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)¥2,640,312
20,600,000
18,543,000
9,000,000
809,548
302,602605
122,215
2,328,074¥1,722,706
30,618,000
581,266
211,449
605
64,1942,461,001

54,346,358

35,659,223

42,500,000
104,438,000
7,408,110
11,289,504

49,500,000
100,439,000
7,871,730
11,345,751

165,635,614

169,156,482

219,981,973

204,815,706

171,339,818

192,044,238

73,94673,946

Total voluntary deposits
Unappropriated retained earnings (undisposed losses)

73,946
4,622,149

73,946
5,050,424

Total surplus

4,696,096

5,124,371

176,035,914

197,168,609

Total unitholders’ equity
Total net assets
Total liabilities and net assets

176,035,914

197,168,609¥396,017,887¥401,984,316

69

Statements of Income and Retained Earnings(For the fiscal periods ended June 30, 2012 and December 31, 2012)
21st Fiscal Period(Thousands of yen)
22nd Fiscal Period(January 1, 2012 –June 30, 2012)(July 1, 2012 –December 31, 2012)

Operating revenue
Rent revenue-real estate¥12,345,900¥12,963,538

Total operating revenue

12,345,900

12,963,538

Operating expenses
Expenses related to rent business
Asset management fee
Administrative service and asset custody fees
Directors’ compensation
Trust fees
Other operating expenses

5,217,950
443,284
74,5756,600
42,693167,020

5,519,704
465,059
77,5886,600
40,19489,011

Total operating expenses

5,952,124

6,198,159

Operating income
Non-operating income
Interest income
Income on settlement of management association accounts

6,393,776

6,765,379

2,666
54,158
5,622

2,665
5,570
2,082

62,447

10,3181,000,168
373,744459,431
23,4282,163

972,379
260,539
396,043
20,07098,3282,005

Total non-operating expenses

1,858,935

1,749,367

Ordinary income

4,597,288

5,026,329

Income before income taxes

4,597,288

5,026,329

605

605

Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Unit-issuance costs
Other

Income taxes-current

605

605

Net income
Retained earnings brought forward

4,596,683
25,466

5,025,724
24,699Unappropriated retained earnings¥4,622,149¥5,050,424

Total income taxes

70

Statements of Unitholders’ Equity(For the fiscal periods ended June 30, 2012 and December 31, 2012)

Unitholders’ equity
Unitholders’ capital
Balance at the beginning of current period
Changes of items during the period
Issuance of units
Total changes of items during the period
Balance at the end of current period

21st Fiscal Period(Thousands of yen)
22nd Fiscal Period(January 1, 2012 –June 30, 2012)(July 1, 2012 –December 31, 2012)¥171,339,818¥171,339,818-

20,704,420
20,704,420

171,339,818

192,044,238

Surplus
Voluntary deposits
Balance at the beginning of current period
Change of items during the period
Total change of items during the period

73,94673,946--

Balance at the end of current period

73,94673,9464,226,806

4,622,149(4,201,340)
4,596,683(4,597,450)
5,025,724

Unappropriated retained earnings
Balance at the beginning of current period
Changes of items during the period
Dividends from surplus
Net income
Total changes of items during the period
Balance at the end of current period
Total surplus
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Total unitholders’ equity
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Total net assets
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period

395,343428,274

4,622,149

5,050,424

4,300,752

4,696,096

395,343428,274

4,696,096

5,124,371

175,640,571

176,035,914

395,343

21,132,694

176,035,914

197,168,609

175,640,571

176,035,914

395,343

21,132,694¥176,035,914¥197,168,609

71

Statements of Cash Flows(For the fiscal periods ended June 30, 2012 and December 31, 2012)
21st Fiscal Period(January 1, 2012 –June 30, 2012)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Unit-issuance cost
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Other, net(Thousands of yen)
22nd Fiscal Period(July 1, 2012 –December 31, 2012)¥4,597,288
1,755,478
23,428(2,666)
1,459,599(88,424)
65,189150,308
6,394(4,691)
568,339(165,208)¥5,026,329
1,831,992
20,07098,328(2,665)
1,368,423
27,458(259,150)(49,948)(112,886)
21,530(58,020)
132,927
25,222

SubtotalInterest income received
Interest expenses paid
Income taxes (paid) refund

8,365,035
2,666(1,494,464)
24

8,069,613
2,665(1,459,576)0

Net cash provided by (used in) operating activities

6,873,261

6,612,702(474,731)(37,520,326)(210,491)
49,124(277,809)
1,566,126(11,867,274)(1,122,899)(289,918)
631,339(371,566)
310,522Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Net cash provided by (used in) investing activities(36,868,108)(12,709,796)

Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of investment corporation bonds
Redemption of investment corporation bonds
Proceeds from issuance of units
Dividends paid

38,600,000(30,400,000)
38,800,000(14,924,000)(4,200,602)

23,600,000(44,200,000)
15,900,000(7,824,000)
6,949,644(9,000,000)
20,606,594(4,596,962)

Net cash provided by (used in) financing activities

27,875,397

1,435,276

Net changes in cash and cash equivalents
Cash and cash equivalents at the beginning of current
period(2,119,448)(4,661,817)

26,780,213

24,660,764¥24,660,764¥19,998,947

Cash and cash equivalents at the end of current period

72Notes to Financial Statements(For the fiscal periods ended June 30, 2012 and December 31, 2012)
Basis of Presenting Financial Statements
Japan Prime Realty Investment Corporation (JPR) maintains its accounting records and prepares its financial statements inaccordance with accounting principles generally accepted in Japan (Japanese GAAP), including provisions set forth in the
Financial Instrument and Exchange Act of Japan, the Act on Investment Trusts and Investment Corporations (ITA), theCompanies Act and the related regulations, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of JPR, which were prepared inaccordance with Japanese GAAP. In preparing the accompanying financial statements, certain reclassifications have been madeto the financial statements issued domestically in order to present them in a format which is more familiar to readers outside
Japan. In addition, the notes to financial statements include information which might not be required under Japanese GAAP but
is presented herein as additional information.
JPR’s accounting period ends at the end of June and December.

Summary of Significant Accounting Policies
1. Depreciation Method for Property and Equipment(1) Property and Equipment (including entrusted properties)
Depreciation is calculated using the straight-line method. The estimated useful lives of major property and equipment ranges are
as follows:
Buildings …………………………....
3 - 65 years
Structures …………………………...
10 - 35 years
Machinery and equipment ……….…
3 - 17 years
Tools, furniture and fixtures …….….
3 - 20 years
Assets with acquisition prices of 100,000 yen or more but less than 200,000 yen are depreciated in three years based on the
Corporation Tax Law.
(2) Intangible Assets
Intangible assets are amortized utilizing the straight-line method.
(3) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.
2. Accounting for Deferred Assets(1) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized utilizing the straight-line method over the redemption periods.
(2) Unit-Issuance Costs
Unit-issuance costs are expensed when incurred.
3. Standards for Recording Revenues and Expenses
Accounting Treatment of Taxes on Properties and Equipment
In connection with property taxes, city planning taxes and depreciated asset taxes, JPR uses the method of charging thecorresponding amounts of assessed taxes to the current fiscal period as real estate rental expenses. Furthermore, JPR included anamount equivalent to the property taxes paid to the sellers during the first fiscal period as an acquisition cost, not as expenses, inconnection with the acquisition of real estate or entrusted beneficiary interests in real estate as entrusted property. Taxes onproperty and equipment capitalized amounted to 1,214, 922 thousand yen and 25,739 thousand yen for the fiscal periods ended
June 30, 2012 and December 31, 2012, respectively.
4. Cash and Cash Equivalents
Cash and cash equivalents in the Statements of Cash Flows include the following:(1) Cash on hand and cash in trust(2) Deposits placed with banks and deposits in trust that can be withdrawn at any time(3) Short-term investments that are readily convertible to cash have insignificant risk of price fluctuation and original maturitiesof three months or less from the acquisition date.

73

5. Other Significant Items Fundamental to Preparing the Financial Statements(1) Accounting Policies on Trust Beneficiary Interests in Real Estate as Property in Trust
Regarding trust beneficiary interests in real estate, all asset and liability accounts of entrusted properties as well as all revenue
and expense accounts generated by the property in trust are recorded in relevant accounts on the balance sheets and statements ofincome.
Furthermore, the following material accounts are separately stated in the balance sheet for properties in trust recorded in relevant
accounts.
a. Cash and deposits in trustb. Buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust andconstruction in progress in trustc. Tenant leasehold and security deposits in trust(2) Accounting for Consumption Taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

Notes to Balance Sheets
1. Assets Pledged as Collateral and Secured Liabilities
Assets pledged as collateral are as follows:

Buildings (net)
Machinery and equipment (net)Land

End of 21st Fiscal Period(as of June 30, 2012)¥126,377
3,937
399,183

Total¥529,498(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)¥124,508
3,766
399,183¥527,458

Secured liabilities are as follows:

Tenant leasehold and security deposits

End of 21st Fiscal Period(as of June 30, 2012)¥15,536

Total¥15,536(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)¥15,536¥15,536

2. Balance of Unused Commitment LineJPR has executed a commitment line agreement with its principal banks primarily to minimize refinancing risks and enhancefinancial stability.

Credit limit
Outstanding debt at end of period
Unused commitment line at end of period

End of 21st Fiscal Period(as of June 30, 2012)¥28,000,000¥28,000,000(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)¥28,000,000¥28,000,000

3. Minimum Total Unitholders’ Equity Designated in Article 67- 4 in the ITA

End of 21st Fiscal Period(as of June 30, 2012)¥50,000

74(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)¥50,000

Notes to Statements of Income and Retained Earnings
Breakdown of Rent Revenue-Real Estate and Expenses Related to Rent Business

A. Rent Revenue-Real Estate
Rent Revenue
Rents
Land rents
Common charges
Parking revenues
Advertising expenses
Antenna use fees
Other
Subtotal
Other rental revenues
Incidental income
Time-based parking revenues
Cancellation charges
Income equivalent to expenses for restoration to as is condition
Other miscellaneous income
Subtotal
Total rent revenue-real estate
B. Expenses Related to Rent BusinessOutsourcing expenses
Utilities expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts
Depreciation
Other
Total expenses related to rent business
C. Profits (A-B)

21st Fiscal Period(Thousands of yen)
22nd Fiscal Period(January 1, 2012 June 30, 2012)(July 1, 2012 December 31, 2012)¥8,731,979
844,537
1,772,110
214,479
22,065
10,94830,319¥8,662,183
1,408,500
1,802,419
219,381
21,936
12,221
33,412

11,626,440

12,160,054

627,775
5,650
29,14943,08013,804

763,2645,226
12,1444,800
18,048719,459

803,483¥12,345,900¥12,963,538¥496,848
682,325
1,031,480
27,475
347,478
214,971555,947
1,754,353
107,069¥510,545
833,900
1,025,198
28,033378,880
208,729563,215
1,831,461
139,740¥5,217,950¥5,519,704¥7,127,949¥7,443,833

Notes to Statements of Unitholders’ Equity

Total number of authorized units
The number of units outstanding

21st Fiscal Period

22nd Fiscal Period(January 1, 2012 –June 30, 2012)(July 1, 2012 –December 31, 2012)

5,000,000 units
715,000 units

5,000,000 units
825,000 units

Notes to Statements of Cash Flows
Breakdown of Cash and Cash Equivalents

Cash and deposits

21st Fiscal Period(Thousands of yen)
22nd Fiscal Period(January 1, 2012 –June 30, 2012)(July 1, 2012 –December 31, 2012)¥12,750,078¥8,402,885

Cash and deposits in trust

11,910,686

11,596,061

Cash and cash equivalents¥24,660,764¥19,998,94775

Tax Effect Accounting
Breakdown of Main Items that caused Differences between the Effective Statutory Tax Rate and the Effective Tax Rate
after Applying Tax Effect Accounting
21st Fiscal Period

22nd Fiscal Period(January 1, 2012 –June 30, 2012)(July 1, 2012 –December 31, 2012)

Effective statutory tax rate

39.33%

36.59%(39.33%)(36.59%)

Other

0.01%

0.01%

Effective tax rate after applying tax effect accounting

0.01%

0.01%

(Adjustment)
Deductible cash distributions

LeasesJPR leases properties on which rental revenues are earned. At June 30, 2012 and December 31, 2012, future lease revenues
under non-cancelable operating leases are summarized as follows:

Due within one year
Due after one year

21st Fiscal Period(As of June 30, 2012)¥6,840,868
25,164,877

Total¥32,005,746(Thousands of yen)
22nd Fiscal Period(As of December 31, 2012)¥6,489,594
22,043,187¥28,532,781

Financial Instruments
1. Matters Concerning Status of Financial Instruments(1) Policy on Handling Financial Instruments
In an aim to proactively expand asset size and maintain stable cash distributions to unitholders, JPR adopts the asset
management policy of paying heed to efficiently combining the procurement of long-term funds that are stable and the
procurement of short-term funds that emphasize flexibility.
There may be cases where JPR will engage in derivative transactions, but such will be limited to management for interest rate
fluctuation risk and other hedging purposes. Please note that JPR is not engaged in derivative transactions at present.
(2) Description of Financial Instruments and Associated Risks, and Risk Management Structure
Tokyo Realty Investment Management, Inc. (TRIM), the asset management company of JPR, strives for risk management bycomplying with the JPR Asset Management Guidelines and other rules and regulations. The following outlines the description ofindividual financial instruments and the associated risks, and the risk management.
Deposits are exposed to risks of failure of the financial institutions holding the deposits and other credit risks, but risks aremanaged through such measures as setting a minimum credit rating for the financial institutions holding the deposits.
Loans payable and investment corporation bonds are exposed to liquidity risks at the time of repayment/redemption, but
liquidity risks are managed through such measures as procuring funds from the capital market by increasing capital, executing acommitment line agreement with the main lending financial institutions, and also having statements of cash receipts anddisbursements prepared by the financial division.
(3) Supplementary Explanation on Matters Concerning Estimated Fair Value, etc. of Financial Instruments
The estimated fair value of financial instruments, aside from values based on market price, include values based on reasonablecalculations when there is no market price. Certain assumptions, etc. are used in calculating those values and there may be cases
where the values will vary when different assumptions, etc. are used.
2. Matters Concerning Estimated Fair Value, etc. of Financial Instruments
The following are the carrying values and estimated fair values as of June 30, 2012 and December 31, 2012, and the difference
between these amounts. Please note that the following tables do not include those for which discerning of estimated fair value isrecognized to be extremely difficult (please refer to Note 3).

76End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)
Carrying Value(Note 1)
1) Cash and deposits
2) Cash and deposits in trust3) Short-term loans payable4) Current portion of long-term loans payable5) Current portion of investment corporation bonds
6) Investment corporation bonds7) Long-term loans payable

Estimated Fair
Value (Note 1)¥12,750,078
11,910,686(20,600,000)(18,543,000)(9,000,000)(42,500,000)(¥104,438,000)¥12,750,078
11,910,686(20,600,000)(18,654,887)(9,007,799)(43,258,083)(¥105,870,096)

Difference¥111,887
7,799
758,083¥1,432,096

End of 22nd Fiscal Period (as of December 31, 2012)(Thousands of yen)
Carrying Value(Note 1)
1) Cash and deposits
2) Cash and deposits in trust3) Short-term loans payable4) Current portion of long-term loans payable5) Current portion of investment corporation bonds
6) Investment corporation bonds7) Long-term loans payable

Estimated Fair
Value (Note 1)¥8,402,885
11,596,061(30,618,000)(49,500,000)(¥100,439,000)¥8,402,885
11,596,061(30,781,610)(50,236,953)(¥102,100,426)

Difference¥163,610
736,953¥1,661,426(Note 1) Items stated under liabilities are shown in parentheses.
(Note 2) Method of calculation of estimated fair value of financial instruments(1) Cash and deposits, and (2) Cash and deposits in trust
As these financial instruments are settled within a short period of time, the estimated fair value is approximately the same as the book value and isthus stated at that book value.
(3) Short-term loans payable
As these financial instruments are settled within a short period of time and also have floating interest rates, the estimated fair value is approximately
the same as the book value and is thus stated at that book value.
(4) Current portion of long-term loans payable, and (7) Long-term loans payable
Of the estimated fair value of these financial instruments, the fair value of long-term loans payable with floating interest rates is based on the bookvalue, as it reflects the market interest rate within a short period of time and thus is considered to be nearly equal to the book value. The fair value of
long-term loans payable with fixed interest rates is based on the method of calculating by discounting the total amount of principal and interest by therate assumed as being applicable in the event of a new drawdown corresponding to the remaining loan term.
(5) Current portion of investment corporation bonds, and (6) Investment corporation bonds
Of the estimated fair value of these financial instruments, those with market price are calculated based on market price and those with no market priceare calculated according to (4) and (7) above.
(Note 3) Financial instruments for which discerning of estimated fair value is recognized to be extremely difficult
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust that are deposited by lessees of lease rental properties are notsubject to disclosure of estimated fair value because reasonable estimation of cash flows is recognized to be extremely difficult since there is no market
price and also since it is difficult to calculate the actual deposit period from when lessees move in to when they move out. The following is the carrying
value of tenant leasehold and security deposits and the carrying value of tenant leasehold and security deposits in trust.

77End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)
Carrying Value¥7,408,110¥11,289,504

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
End of 22nd Fiscal Period (as of December 31, 2012)(Thousands of yen)
Carrying Value¥7,871,730¥11,345,751

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust(Note 4) Amount of redemption of monetary claims scheduled to be due after the settlement of accounts.

End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)Due in One Year or Less
¥12,750,078¥11,910,686

Cash and deposits
Cash and deposits in trust
End of 22nd Fiscal Period (as of December 31, 2012)(Thousands of yen)Due in One Year or Less
¥8,402,885¥11,596,061

Cash and deposits
Cash and deposits in trust(Note 5) Amount of repayment or redemption of short-term loans payable, investment corporation bonds and long-term loans payable scheduled to be due after thesettlement of accounts.

End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)Due in One
Year or Less
Short-term loans payable
Investment corporation bonds
Long-term loans payable¥20,600,000
9,000,000¥18,543,000

Due after
One Yearthrough
Two Years¥5,000,000¥30,468,000

Due after
Two Years
throughThree Years¥24,000,000¥6,332,000

Due afterThree Years
through
Four Years¥¥26,732,000

Due after
Four Years
throughFive Years¥7,000,000¥23,732,000

Due after
One Yearthrough
Two Years¥16,000,000¥12,235,000

Due after
Two Years
throughThree Years¥13,000,000¥19,732,000

Due afterThree Years
through
Four Years¥7,000,000¥17,332,000

Due after
Four Years
throughFive Years¥5,000,000¥31,632,000

Due after
Five Years¥6,500,000¥17,174,000

End of 22nd Fiscal Period (as of December 31, 2012)(Thousands of yen)Due in One
Year or Less
Investment corporation bonds
Long-term loans payable

78¥¥30,618,000

Due after
Five Years¥8,500,000¥19,508,000

Segment Information
Segment information for the fiscal periods ended June 30, 2012 and December 31, 2012 is as follows:(a) Operating Segment Information
Disclosure is omitted as JPR is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise-wide Disclosures(1) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment is in excess of 90% of total revenues.
(2) Information about Geographic Areas
Revenues from Overseas Customers:
Disclosure is not required as revenues from external customers attributed to Japan are in excess of 90% of total revenues.
Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers(Thousands of yen)
Customer Name

Operating Revenue

Related Segment

Y.K. Tokyo Prime Stage

¥1,408,500

Property rental business

Investment and Rental Properties
JPR owns urban office properties and retail properties for leasing in Tokyo and other regions. The following is the carrying
value, amount of increase (decrease) during the current period and estimated fair value of these investment and rental properties.
End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)
Carrying Value
As of January 1, 2012

Amount of Increase(Decrease) During Current Period

As of June 30, 2012

¥332,880,621¥37,282,613¥370,163,234

Estimated Fair Value at
End of Current Period¥347,558,000(Note 1) The carrying value is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) during the current period for investment and rental properties, the amount of increase is primarily attributable toacquisition of Otemachi 1-6 Plan (Land with Leasehold Interest) (tentative name) (38,388,259 thousand yen).
(Note 3) The estimated fair value at the end of the current period is the appraisal value or survey value as appraised by an outside real estate appraiser.

The income (loss) in the 21st fiscal period for investment and rental properties are as presented in the “Notes to Statements ofIncome and Retained Earnings.”
End of 22nd Fiscal Period (as of December 31, 2012)(Thousands of yen)
Carrying Value
As of July 1, 2012

Amount of Increase(Decrease) During Current Period

As of December 31, 2012

¥370,163,234¥10,355,608¥380,518,842

Estimated Fair Value at
End of Current Period¥358,816,000(Note 1) The carrying value is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) during the current period for investment and rental properties, the amount of increase is primarily attributable toacquisition of Yakuin Business Garden (11,416,663 thousand yen).
(Note 3) The estimated fair value at the end of the current period is the appraisal value or survey value as appraised by an outside real estate appraiser.

The income (loss) in the 22nd fiscal period for investment and rental properties are as presented in the “Notes to Statements ofIncome and Retained Earnings.”

79

Transactions with Affiliated Parties
Transactions with Affiliated Parties are as follows:(1) Parent Company and Major Corporation Unitholders
Fiscal period ended June 30, 2012
Fiscal period ended December 31, 2012

Not applicableNot applicable(2) Subsidiaries
Fiscal period ended June 30, 2012
Fiscal period ended December 31, 2012

Not applicableNot applicable(3) Sister Companies
Fiscal period ended June 30, 2012
Fiscal period ended December 31, 2012

Not applicableNot applicable(4) Directors and Major Individual Unitholders
Fiscal period ended June 30, 2012
Fiscal period ended December 31, 2012

Not applicableNot applicable

Per Unit Information(Yen)
21st Fiscal Period(January 1, 2012 - June 30, 2012)

22nd Fiscal Period(July 1, 2012 - December 31, 2012)¥246,204¥6,428¥238,992¥6,233

Total net assets per unit
Net income per unit

(Note 1) Net income per unit is computed by dividing net income by the weighted-average number of units outstanding during the current fiscal period.
Diluted net income per unit has not been presented since no warrants and convertible bonds are outstanding.
(Note 2) Net income per unit was calculated based on the following data:(Thousands of yen)
21st Fiscal Period(January 1, 2012 - June 30, 2012)

22nd Fiscal Period(July 1, 2012 - December 31, 2012)¥4,596,683¥4,596,683
715,000 units¥5,025,724¥5,025,724
806,264 units

Net income
Amounts not attributable to ordinary unitholders
Net income attributable to ordinary investment units
Average number of units

Subsequent Events
Fiscal period ended December 31, 2012
There are no material subsequent events for this fiscal period.

80

Details of Tangible Assets
For the six-month period ended December 31, 2012:(Thousands of yen)EndingBalanceAccumulated
Depreciation

Depreciation
for the
PeriodNet Property,
Plant andEquipment¥-¥57,328,085¥8,339,934¥834,073¥48,988,151

408,068-

75,979,066

21,257,423

930,474

54,721,643

41,823

2,638-

44,461

9,160

1,246

35,300

Structures in trust

109,441

2,483-

111,925

49,146

3,901

62,778

Machinery and Equipment

577,666

143,033-

720,700

283,078

21,245

437,622

Machinery and Equipment in
trust

1,418,326

24,482-

1,442,809

990,861

34,266451,947

Tools, Furniture and fixtures

41,5881,000-

42,58923,853

1,987

18,735Tools, Furniture and fixturesin trust

112,390

6,659-

119,049

80,3004,200

38,749Land

106,669,360

5,300,793-

111,970,153--

111,970,153

Land in trust

158,879,372--

158,879,372--

158,879,372

Construction in progress

104,711

21,975

11,922

114,764--

114,764

Construction in progress in
trust

1,009

3,399

1,009

3,399

-

-

3,399

¥394,570,924¥12,198,385¥12,931¥406,756,378¥31,033,760¥1,831,396¥375,722,618

Beginning
Balance

Increase

Buildings¥51,044,234¥6,283, 851

Buildings in trust

75,570,997

Structures

Total

Decrease(Note 1) The “Increase” is due to property acquisitions and construction works, etc.
(Note 2) The “Decrease” in construction in progress and construction in progress in trust is due to the transfer to relevant accounts as a result of property
acquisitions and construction completion.

81

Investment Corporation Bonds
For the six-month period ended December 31, 2012:

Name

Issue Date

Beginning
BalanceEndingBalance

Decrease

Coupon Rate
Maturity Date Redemption(Per Annum)(Thousands of yen)
Third Series ofInvestment
Corporation Bonds(Note 1)Feb. 12, 2004

¥5,000,000¥-¥5,000,000

2.32%

Feb. 12, 2014

Sixth Series ofInvestment
Corporation Bonds(Note 2)

Nov. 4, 2004

5,000,000-

5,000,000

2.00%

Nov. 4, 2014

Seventh Series ofInvestment
Corporation Bonds(Note 3)

Dec. 14, 2006

4,500,000-

4,500,000

2.90%

Dec. 14, 2026

Eighth Series ofInvestment
Corporation Bonds(Note 3)

Jul. 23, 2007

9,000,000

9,000,000

-

1.85%

Jul. 23, 2012

Ninth Series ofInvestment
Corporation Bonds(Note 3)

Jul. 23, 2007

6,000,000-

6,000,000

2.10%

Jul. 23, 2014

Eleventh Series ofInvestment
Corporation Bonds(Note 3)Mar. 12, 2010

6,000,000-

6,000,000

1.68%

Mar. 12, 2015

Twelfth Series ofInvestment
Corporation Bonds(Note 3)

May 21, 2010

7,000,000-

7,000,000

1.27%

May 21, 2015

Thirteenth Series ofInvestment
Corporation Bonds(Note 3)Oct. 25, 2011

7,000,000-

7,000,000

0.95%

Oct. 25, 2016

Fourteenth Series ofInvestment
Corporation Bonds(Note 3)Oct. 25, 2011

2,000,000-

2,000,000

1.34%

Oct. 25, 2018

Fifteenth Series ofInvestment Corporation
Nov. 22, 2012
Bonds
(Note 3)--5,000,000

0.68%

Nov. 22, 2017

Sixteenth Series ofInvestment Corporation
Nov. 22, 2012
Bonds
(Note 3)--2,000,000¥51,500,000¥9,000,000¥49,500,000

Use

Remarks

Purchase ofproperties
andrepaymentof loans

Repayment of
loans

Total

Bulletrepayment

Unsecured

Purchase ofproperties

Redemptionof investment
corporation
bonds andrepayment ofloans

Repayment of
loans
1.03%

Nov. 22, 2019

(Note 1) These investment corporation bonds are equipped with the same rank rider limited among investment corporation bonds, and with limitations on private
placement among a small number of investors and on resale among qualified institutional investors.
(Note 2) These investment corporation bonds are equipped with the same rank rider limited among investment corporation bonds and limitations on resale among
qualified institutional investors.
(Note 3) These investment corporation bonds are equipped with the same rank rider limited among certain investment corporation bonds.
(Note 4) Amounts of investment corporation bonds to be redeemed within five years after the date of the balance sheet are as follows.
(Thousands of yen)Due in One
Year or Less
Investment corporation bonds

82¥-

Due after
One Yearthrough
Two Years¥16,000,000

Due after
Two Years
throughThree Years

Due afterThree Years
through
Four Years¥13,000,000¥7,000,000

Due after
Four Years
throughFive Years¥5,000,000

Status of Loans Payable
For the six-month period ended December 31, 2012:
Beginning
Balance
Category

Increase

EndingBalance

Decrease

Lender(Thousands of yen)

RepaymentDate¥2,000,000¥-¥2,000,000¥-

0.758%

Jul. 4, 2012

2,600,000-

2,600,000-

0.633%

Jul. 4, 2012-

4,600,000

4,600,000-

0.680%

July 4, 2013

2,000,000-

2,000,000-

0.758%

Jul. 4, 2012

2,000,000-

2,000,000-

0.633%

Jul. 4, 2012

Mitsubishi UFJ
Trust andBanking
Corporation(Note 12)-4,000,000

4,000,000-

0.680%

July 4, 2013

Resona Bank,
Limited.

2,000,000-

2,000,000-

0.758%

Jul. 4, 2012

Resona Bank,
Limited.
(Note 12)-2,000,000

2,000,000-

0.680%

Jul. 4, 2013

MizuhoCorporate
Bank, Ltd.
MizuhoCorporate
Bank, Ltd.
(Note 12)
Mitsubishi UFJ
Trust andBanking
Corporation

ShortTerm
Loans
PayableAverage
Interest
Rate(Note 2)
(Note 3)

Repayment
Method1,000,000-

1,000,000-

0.758%

Jul. 4, 2012

Mizuho Trust& Banking Co.,Ltd (Note 12)-

1,000,000

1,000,000-

0.680%

Jul. 4, 2013

Aozora Bank,
Ltd.

2,000,000-

2,000,000-

0.759%

Aug. 26, 2012

Aozora Bank,
Ltd. (Note 12)-5,000,000

5,000,000-

0.680%

July 4, 2013

2,000,000-

2,000,000-

0.758%

Jul. 4, 2012

3,000,000-

3,000,000-

0.633%

Jul. 4, 2012-

5,000,000

5,000,000-

0.680%

July 4, 2013

1,400,000-

1,400,000-

0.758%

Jul. 4, 2012

600,000-

600,000-

0.633%

Jul. 4, 2012-

2,000,000

2,000,000-

0.680%

Jul. 4, 2013

¥20,600,000¥23,600,000¥44,200,000¥-¥845,000¥-¥25,000¥820,000

1.740%(Note 5)(Note 5)

Bank of TokyoMitsubishi UFJ,
Ltd. (Note 12)
Sumitomo
Mitsui Banking
Corporation
Sumitomo
Mitsui Banking
Corporation(Note 12)
Total
Development
Bank of JapanInc.

200,000

100,000

100,000

200,000

3.190%(Note 6)(Note 6)

MizuhoCorporate
Bank, Ltd.

200,000

100,000

100,000

200,000

2.449%(Note 7)(Note 7)

Bank of TokyoMitsubishi UFJ,Ltd.

166,000

83,00083,000166,000

2.390%(Note 8)(Note 8)100,000

50,00050,000100,000

2.440%(Note 9)(Note 9)Sumitomo
Current Mitsui Banking
Portion of Corporation
Long- Meiji Yasuda
Term Life Insurance
Loans Company
PayableZenkyoren(National
MutualInsurance
Federation ofAgricultural
Cooperatives)
Taiyo Life
Insurance
Company

Remarks

Unsecured/Principal
Unguaranteed/lump sum(Note 4)
Nonrepayment
Subordinatedon maturity

Mizuho Trust& Banking Co.,Ltd.

Bank of TokyoMitsubishi UFJ,
Ltd.

Use

(Note 4)132,000

66,00066,000132,000

1.800%(Note 10)(Note 10)5,000,000-

5,000,000-

1.453%

Nov. 27, 2012

Principal
lump sum
repayment
on maturity-

1,000,000-

1,000,000

1.858%

Dec. 27, 2013

1,000,000--

1,000,000

2.035%

Jun 4, 2013

Unsecured/
Unguaranteed/
NonSubordinated83Daido Life
Insurance
Company-

1,000,000-

1,000,000

1.858%

Dec. 27, 2013

Sumitomo Life
Insurance
Company-

2,000,000-

2,000,000

1.858%

Dec. 27, 2013

900,000-

900,000-

2.076%

Jul. 3, 2012-

1,000,000-

1,000,000

1.322%

Sep. 30, 2013

The Shinkumi
FederationBank

3,000,000--

3,000,000

1.376%

Feb. 4, 2013

Mizuho Trust& Banking Co.,
Ltd.

3,000,000--

3,000,000

1.376%

Feb. 4, 2013

Aozora Bank,
Ltd.

1,000,000--

1,000,000

1.376%

Feb. 4, 2013-

2,000,000-

2,000,000

1.281%

Nov. 27, 2013

MizuhoCorporate
Bank, Ltd.

-

3,000,000-

3,000,000

1.279%

Nov. 27, 2013

Bank of TokyoMitsubishi UFJ,Ltd.

-

3,000,000-

3,000,000

1.279%

Nov. 27, 2013

Sumitomo
Mitsui Banking
Corporation

3,000,000--

3,000,000

1.190%

Jun. 27, 2013

Shinsei Bank,
Ltd.

-

2,000,000-

2,000,000

1.070%

Sep. 24, 2013

The Chugoku
Bank, Ltd.

-

1,000,000-

1,000,000

1.070%

Sep. 24, 2013

The Hachijuni
Bank, Ltd.

-

1,000,000-

1,000,000

1.070%

Sep. 24, 2013

The Bank ofFukuoka, Ltd.

-

1,000,000-

1,000,000

1.070%

Sep. 24, 2013

Total

¥18,543,000¥18,399,000¥6,324,000¥30,618,000

Taiyo Life
Insurance
Company¥1,000,000¥-¥1,000,000¥-

1.858%

Dec. 27, 2013

1,000,000--

1,000,000

1.275%

Sep. 24, 2015

Daido Life
Insurance
Company

1,000,000-

1,000,000-

1.858%

Dec. 27, 2013

1,000,000--

1,000,000

1.666%

Feb. 5, 2015

Sumitomo Life
Insurance
Company

2,000,000-

2,000,000-

1.858%

Dec. 27, 2013

2,000,000--

2,000,000

2.257%

Jun. 4, 2015

2,000,000--

2,000,000

1.725%

Mar. 26, 2015

5,200,000-

100,000

5,100,000

2.449%(Note 7)3,000,000-

3,000,000-

1.279%

Nov. 27, 2013

5,000,000--

5,000,000

1.414%

Feb. 4, 2016

7,000,000--

7,000,000

1.093%-

2,000,000-

2,000,000

1.027%

4,336,000-

83,0004,253,000

2.390%

3,000,000-

3,000,000-

1.279%

Principal
lump sum
Unsecured/Mar. 30, 2017 repayment
on maturity
Unguaranteed/
Dec. 5, 2019
(Note 4)
Non(Note 8)(Note 8)SubordinatedNov. 27, 2013

5,000,000--

5,000,000

1.198%

Mar. 25, 2016-

1,000,000-

1,000,000

1.178%

Aug. 8, 2019

ORIX Bank
Corporation

Zenkyoren(National
MutualInsurance
Federation ofAgricultural
Cooperatives)

MizuhoCorporateLong- Bank, Ltd.
Term
Loans
Payable(Note 1)
Bank of TokyoMitsubishi UFJ,Ltd.

Development
Bank of JapanInc.
Sumitomo
Mitsui Banking
Corporation
AmericanFamily Life
Assurance
Company ofColumbus(Note 12)84

Principal
lump sum
repayment
on maturity(Note 7)-1,000,000-

1,000,000

0.948%-

3,000,000-

3,000,000

0.919%

Principal
lump sumAug. 8, 2017 repayment
on maturity
Sep. 5, 2017-

1,000,000-

1,000,000

1.027%

Dec. 5, 2019

3,200,000-

100,000

3,100,000

3.190%(Note 6)(Note 6)2,600,000-

50,0002,550,000

2.440%(Note 9)(Note 9)6,400,000--

6,400,000

1.093%

Mar. 30, 2017-

1,000,000-

1,000,000

1.027%

Dec. 5, 20191,500,000-

1,500,000-

3.440%

Sep. 6, 2019

Principal
lump sum
repayment
on maturity

1,000,000-

1,000,000-

1.322%-

900,000-

900,000

0.994%

Jul.3, 2017-

2,000,000-

2,000.000

1.178%

Aug. 8, 2019-

2,000,000-

2,000,000

0.985%

Aug. 25, 2017-

2,000,000-

2,000.000

1.146%

Aug. 30, 2018

2,000,000-

2,000,000-

1.281%

Nov. 27, 2013

2,000,000-

2,000,000-

1.070%

Sep. 24, 2013

5,000,000--

5,000,000

1.397%

Apr. 5, 2019

1,000,000-

1,000,000-

1.070%

Sep. 24, 2013

2,000,000--

2,000,000

1.170%

Jul. 7, 2016

2,000,000--

2,000,000

0.902%

Oct. 9, 2015

The Chugoku
Bank, Ltd.

1,000,000-

1,000,000-

1.070%

Sep. 24, 2013

2,000,000--

2,000,000

0.902%

Oct. 9, 2015

The Hachijuni
Bank, Ltd.

1,000,000-

1,000,000-

1.070%

Sep. 24, 2013

Aozora Bank,Ltd.

ORIX Bank
Corporation
Shinsei Bank,Ltd.
The Bank ofFukuoka, Ltd.

Sep. 30, 2013

1,000,000--

1,000,000

0.902%

Oct. 9, 2015

The NishiNippon City
Bank, Ltd.

3,000,000--

3,000,000

1.149%

May 27, 2016

Meiji Yasuda
Life Insurance
Company

3,802,000-

66,0003,736,000

1.800%(Note 10)

Mitsubishi UFJ
Trust andBanking
Corporation

5,000,000--

5,000,000

1.184%

Aug. 29, 2017

1,000,000--

1,000,000

0.924%

Aug. 31, 2015

1,000,000--

1,000,000

0.843%

Jun. 26, 2015

Mizuho Trust& Banking Co.,
Ltd.

4,000,000--

4,000,000

1.093%

Mar. 30, 2017

Resona Bank,
Limited2,000,000--

2,000,000

1.093%

Mar. 30, 2017

The Tokyo
Tomin Bank,
Limited (Note11)

1,000,000--

1,000,000

0.777%

Sep. 30, 2015

The Bank of
Yokohama,
Ltd. (Note 11)

1,000,000--

1,000,000

0.777%

Sep. 30 2015

The Minato
Bank, Ltd.
(Note 11)800,000--

800,000

0.777%

Sep. 30 2015

The Yamaguchi
Bank, Ltd.
(Note 11)500,000--

500,000

0.777%

Sep. 30 2015

The Chiba
Kogyo Bank,
Ltd. (Note 11)

100,000--

100,000

0.777%

Sep. 30 2015

2,000,000--

2,000,000

0.981%

Oct. 11, 2016

2,000,000--

2,000,000

0.874%

Dec. 25, 2015

0.902%

Oct. 9, 2015

Sompo Japan
Insurance Inc.
The Iyo Bank,
Ltd.
Total

1,000,000--

1,000,000¥104,438,000¥15,900,000¥19,899,000¥100,439,000(Note 10)

Principal
lump sum
repayment
on maturity(Note 1) Amounts of long-term loans payable (excluding current portion of long-term loans payable) to be repaid within five years after the date of the balance sheet
are as follows.
(Thousands of yen)
Due after
One Yearthrough
Two Years
Long-term loans payable¥12,235,000

Due after
Two Years
throughThree Years¥19,732,000

Due afterThree Years
through
Four Years¥17,332,000

Due after
Four Years
throughFive Years¥31,632,000(Note 2) The average interest rates are weighted-average figures during the period and are rounded to the third decimal point.
Furthermore, fees related to loan arrangement paid to the above lenders are not included.
(Note 3) Short-term loans payable are floating-rate loans payable. Long-term loans payable are fixed-rate loans payable, except those that fall under the category ofNote 11.
(Note 4) Funds are mainly used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable andredemption of investment corporation bonds.
(Note 5) The loans payable are subject to repayment of 25 million yen on June 27, 2009 and thereafter every 6 months. In addition, repayment of 820 million yen
will be made on maturity date June 27, 2013.
(Note 6) The loans payable are subject to repayment of 100 million yen on December 27, 2009 and thereafter every 6 months. In addition, repayment of
2,100 million yen will be made on maturity date June 27, 2019.

85

(Note 7) The loans payable are subject to repayment of 100 million yen on December 25, 2009 and hereafter every 6 months. In addition, repayment of
5,100 million yen will be made on maturity date June 27, 2014.
(Note 8) The loans payable are subject to repayment of 83 million yen on December 27, 2009 and hereafter every 6 months. In addition, repayment of 4,253 million
yen will be made on maturity date June 27, 2014.
(Note 9) The loans payable are subject to repayment of 50 million yen on December 25, 2009 and hereafter every 6 months. In addition, repayment of 2,550 million
yen will be made on maturity date June 27, 2014.
(Note 10) The loans payable are subject to repayment of 66 million yen on June 24, 2012 and hereafter every 6 months. In addition, repayment of 3,208 million yen
will be made on maturity date June 21, 2018.
(Note 11) The loans are with floating interest rates.
(Note 12) Of the 4,600 million yen in short-term loans payable to Mizuho Corporate Bank, Ltd. borrowed on July 4, 2012, JPR repaid 2,000 million yen on August 1,
2012 and 2,600 million yen on December 5, 2012 prior to the repayment date. On August 1, 2012, JPR repaid 4,000 million yen in short-term loans
payable to Mitsubishi UFJ Trust and Banking Corporation borrowed on July 4, 2012 prior to the repayment date. On August 1, 2012, JPR repaid 2,000
million yen payable to Resona Bank, Limited borrowed on July 4, 2012 prior to the repayment date. On August 1, 2012, JPR repaid 1,000 million yen in
short-term loans payable to Mizuho Trust & Banking Co., Ltd. borrowed on July 4, 2012 prior to the repayment date. Of the 5,000 million yen in shortterm loans payable to Aozora Bank, Ltd. borrowed on July 19, 2012, JPR repaid 500 million yen on August 1, 2012 and 4,500 million yen on August 30,
2012 prior to the repayment date. Of the 5,000 million yen in short-term loans payable to Bank of Tokyo-Mitsubishi UFJ, Ltd. borrowed on July 4, 2012,
JPR repaid 3,000 million yen on September 5, 2012 and 2,000 million yen on December 5, 2012 prior to the repayment date. On August 1, 2012, JPR
repaid 2,000 million yen in short-term loans payable to Sumitomo Mitsui Banking Corporation borrowed on July 4, 2012 prior to the repayment date. On
December 5, 2012, JPR repaid 1,500 million yen in long-term loans payable to American Family Life Assurance Company of Columbus borrowed on
September 7, 2009 prior to the repayment date.

Distribution Information(Yen)
21st Fiscal Period(January 1, 2012 - June 30, 2012)

22nd Fiscal Period(July 1, 2012 - December 31, 2012)

1. Unappropriated retained earnings
2. Distributions(distribution per unit)¥4,622,149,494
4,597,450,000(6,430)¥5,050,424,442
5,026,725,000(6,093)

3. Retained earnings brought forward¥24,699,494¥23,699,442

In accordance with the distribution policy stipulated in Article 30-2 of the Articles of Incorporation, JPR will be able to
distribute only to the extent of the profits and needs to distribute in excess of 90% of JPR’s distributable income as stipulated in
Article 67-15 of the Special Taxation Measures Law. Based on this policy, JPR decided on a total distribution of 4,597,450,000
yen and 5,026,725,000 yen for the 21st fiscal period and the 22nd fiscal period. This is the maximum value arrived at when thenumber of units outstanding is multiplied by an integer, within the limit of retained earnings for the respective fiscal period andwithin the limit of not placing a burden of additional income taxes on our unitholders. Furthermore, JPR does not make cash
distributions in excess of the profit as stipulated in Article 30-4 of the Articles of Incorporation.

86

Report of Independent Auditors

87

Other Financial Information
Expenses and Liabilities
Details of Expenses Related to Management
Item(a) Asset Management Fees (Note)
Fixed compensation
Incentive-based compensation 1
Incentive-based compensation 2(b) Administrative Service and Custodian Fees(c) Directors' Fee(d) Trust Fees(e) Other Expenses
Total

21st Fiscal Period(Jan. 1, 2012- Jun. 30, 2012)
443,284
75,000226,094
142,189
74,5756,600
42,693167,020734,173(Thousands of yen)
22nd Fiscal Period(Jul. 1, 2012- Dec. 31, 2012)
465,059
75,000234,593
155,465
77,5886,600
40,19489,011
678,454(Note 1) Aside from the amounts of the asset management fees entered above, a total of 90,000 thousand yen for the 21st fiscal period and a total of 27,490
thousand yen for the 22nd fiscal period have been paid for asset management of the acquired properties and have been included in the book value of each
property.

88

Investor Information
Address of Japan Prime Realty
Investment Corporation (JPR)

4-16 Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan

Date of Establishment

September 14, 2001

Listing

Tokyo Stock Exchange (Securities Code: 8955)

Fiscal Period Ends

June 30 and December 31 of each year

General Meeting of Unitholders

More than once every two years

Cash Distribution Payment
Eligibility

Unitholders of record as of June 30 and December 31 of each year

Transfer Agent

Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Location of Records

Main Branch, Stock Transfer Agency Division
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Mailing Address

Stock Transfer Agency Division
Mizuho Trust & Banking Co., Ltd.
2-8-4 Izumi, Suginami-ku, Tokyo 168-8507

AgentsMizuho Trust & Banking Co., Ltd. (All branches nationwide)
Mizuho Investors Securities Co., Ltd. (Head office and all branches nationwide)

Web Site

http://www.jpr-reit.co.jp/jpr_e/index.html

Contact (Tokyo Realty
Investment Management, Inc.)

Tel: +81-3-3231-1051
Fax: +81-3-3274-7775

Annual Schedule (Provisional)
October

Release of Business Report

December

September

Fiscal period ends

Cash distributions

Announcement of the fiscal period results

Appropriate disclosure
on web site

June

March

AugustFiscal period ends

April

February

Announcement of the fiscal period results

Cash distributions

Release of Business Report

This document contains a translation of selected information described in the Financial Statements and Performance Information Report prepared pursuant to the Act on Investment Trusts
and Investment Corporations of Japan and the Financial Instruments and Exchange Act of Japan, for the period from July 1, 2012 to December 31, 2012 of Japan Prime Realty Investment
Corporation (JPR). This English language document was prepared solely for the convenience of and reference by non-Japanese investors and is not intended to constitute a disclosure document.
The Japanese language Financial Statements and Performance Information Report for the aforementioned period should be referred to as the originals of this document. English translations
for legal, accounting, tax and business concepts used herein may not convey precisely identical concepts of the equivalent Japanese terms. With respect to any and all terms herein, including
without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents and English documents, the original
Japanese documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc., nor any of their respective directors, officers, employees, partners,
unitholders, agents or affiliates will be responsible or liable for the completeness, appropriateness or accuracy of English translations or the selection of portion(s) of any document(s) translated
into English. No person has been authorized to give any information or make any representations other than contained in this document in relation to the matters set out in this document, andif given or made, such information or representation must not be relied upon as having been authorized by JPR, Tokyo Realty Investment Management, Inc., or any of their respective directors,
officers, employees, partners, unitholders, agents or affiliates. The financial statements of JPR have been prepared in accordance with generally accepted accounting principles in Japan (JapaneseGAAP), which may materially differ in certain respects from generally accepted accounting principles in other jurisdictions. Many provisions of this document contain information that constituteforward-looking statements. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and actual results may differ materially from thosein the forward-looking statements as a result of various factors.

89http://www.jpr-reit.co.jp/jpr_e/