Tokyo Realty Investment Management, Inc.

Japan Prime Realty Investment Corporation
Company Presentation February 2007

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

Feb. 2007

Profile of Japan Prime Realty Investment Corporation

Profile Overview(as of February 9, 2007)

TickerMarket Cap.
Asset Size (based on acquisition price)
Investment Target (type)
Investment Target (area)
Real Estate IndicesCredit Rating: 8955 (Tokyo Stock Exchange): JPY 280.86 bn: JPY 222.48 bn: Office: 80%; Retail: 20%: Tokyo: 60%; Other Selected Cities: 40%: MSCI Japan Index, TSE REIT Index, GPR, EPRA/NAREIT: Moody’s: A2; S&P: A-; R&I: A+

Asset Management Company

Market Cap. of Major Diversified J-REITs

Tokyo Realty Investment Management (TRIM)
Sponsors (Shareholders of Asset Management Company)
Tokyo Tatemono (8804:TSE)

Real Estate26%

Meiji Yasuda Life

Insurance24%(as of February 9, 2007)(JPY bn)
300

281

250

225
205
188

200

171

Taisei Corp. (1801:TSE)

Construction

Yasuda Real Estate

Real Estate

152
150

143

143

132

20%

119

116

FRC

MID

100

20%
50

Sompo Japan Insurance(8755:TSE)

Insurance

10%
JPR

OJR

MTR

TRE

NCI

UUR

TOP

MHR

KRI

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

Financial Results and Forecast
6th Period

7th Period

8th Period

9th Period

10th Period

11th Period (E)Ended Dec. 2004

Ended June 2005

Ended Dec. 2005

Ended June 2006

Ended Dec. 2006

Ending June 2007 (E)Operating revenues

7,685

8,503

8,587

8,588

9,088

9,708

Operating profits

3,469

3,954

3,984

4,024

4,373

4,843

Net income

2,868

3,376

3,398

3,449

3,642

4,125

DPU (JPY)

6,671

6,370

6,411

6,509

6,873

6,600

FFO

4,260

4,353

4,715

5,010

5,222

5,979

FFO per unit (JPY)

9,907

8,214

8,896

9,453

9,853

9,566

Total units outstanding (Units)

430,000

530,000

530,000

530,000

530,000

Max. 625,000

LTV (%)

51.1%

42.0%

44.1%

45.8%

48.7%

Approx. 35%

Total asset

198,673

216,574

225,882

231,523

244,691

-

42

42

42

44

46

46

94.3%

94.9%

96.1%

97.7%

98.3%

98.4%

(JPY mn)

Number of properties
Average Occupancy rate (%)

Financial Highlights

10th Fiscal Period Results

11th Fiscal Period Forecast (as of Feb. 2007)

9 2 properties acquired in the 9th Fiscal Period contributing to
the 10th Fiscal Period- Cupo-la Main Bldg. and JPR Jingumae 432

9Including contribution of 3 properties newly acquired in
the 11th Fiscal Period(JPY 6.5 bn)

9 Including 2 properties newly acquired in the 10th Fiscal Period- Chayamachi Grande Bldg. and JPR Musashikosugi Bldg.
(JPY 13.2 bn)

9 Increase in occupancy rate

9Capital gains through the sale of 2 properties anticipated
9Total units outstanding assumed to be 625,000 units
combining the 620,000 units as of February 9, 2007 andthe third-party allotment (maximum 5,000 units to beissued) accompanying the over-allotment option

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

Japan Prime Realty Investment Corporation 3

JPR’s Market Recognition History
Steady Market Cap Growth through Equity Finance(as of February 9, 2007)(Market Cap)(JPY bn)
2nd AddAdd-on Offering
Feb. 2, 2005
100,000 units

300
Add-on Offering Price:
JPY 449,820 (2007)(Unit Price)(JPY)

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

500,000

450,000
250

May 13, 2005
MSCI Japan Index

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

IPO
June 14, 2002
182,000 units

400,000

200

150

350,000

300,000

Add-on Offering Price:
JPY 272,440 (2005)
Add-on Offering Price:
JPY 237,160 (2003)

250,000

100
200,000
IPO Offering Price:
JPY 200,000 (2002)

150,000

50

Dec.
2001

June
2002

Dec.
2002

June
2003

Dec.
2003

June
2004

Dec.
2004

June
2005

Dec.
2005

June
2006

Dec.
2006

Feb.
2007

Japan Prime Realty Investment Corporation 4

Track Record of External Growth
Efforts to Build Core Portfolio through Selective InvestmentszOther Contracted Properties/Acquired Assets

Portfolio Size

 Kawasaki Dice TMK Preferred Securities (JPY 1.55 bn)(Acquisition price basis) Tachikawa Business Center Bldg. (Acquiring additional

ownership) (JPY 2.30 bn)

46 Buildings
JPY 222.48 bn

 Shinjuku Sanchome East Bldg. (JPY 0.54 bn)(49.4)(50.2)
25 Buildings
JPY 92.18 bn(47.3)(50.8)(41.2)(42.0)(21.6)(24.5)(42.0)(14.4)(14.0)

June 2002

Dec. 2002(26.4)(27.4)(23.4)(22.5)

June 2003

Dec. 2003

June 2004

Dec .2004(25.3)(28.3)

June 2005

Dec. 2005(30.5)

June 2006

zTotal properties sold: 6 properties totaling JPY 9,300 mn____________________
Note: JPR listed on June 14, 2002. All of the amounts are based on acquisition price with shares rounded to the first decimal place.

(34.6)

Dec. 2006

Improvementof quality(42.1)(31.4)(26.7)

Property(31.6)(29.3)(22.3)
Retail Facilities(44.0)

Sale ofShare(43.5)(20.4)

Stable external growth(45.0)(47.9)

Greater Tokyo)

 JPR Takamatsu Bldg. (JPY 2.13 bn)

Office(OtherCities)Scheduled Sales of Properties Tsurumi fuga 1 (JPY 3.04 bn)

Office (Tokyo CBDs and Rise Arena Bldg. (JPY 5.46 bn)zJapan Prime Realty Investment Corporation 5

Track Record of Strategic Property Disposition
Properties Sold to:Realize Value Up

Yasuda Life
Tenroku Bldg.

JPR Ikebukuro Bldg.

SK Hiroshima Bldg.

Park East Sapporo

Disposition Date

Sept. 2003

Mar. 2005

Sept. 2005

Nov. 2005

Acquisition Price

JPY 418 mn

JPY 2,040 mn

JPY 947 mn

JPY 2,150 mn

Book Value (at disposition)

JPY 418 mn

JPY 2,577 mn

JPY 1,002 mn

JPY 2,150 mn

Disposition Price

JPY 600 mn

JPY 3,345 mn

JPY 1,040 mn

JPY 2,400 mn

Property Age at Disposition

12.2 yrs

24.4 yrs

15.8 yrs

20.1 yrs

Expected Disposition

Properties Sold to:
Improve Portfolio
Quality

JPR Park West
Takamatsu

JPR Square Hakata
East / West

Tsurumi fuga 1

JPR Takamatsu Bldg.

Disposition Date

Mar. 2005

Mar. 2005

Apr. 2007

Apr. 2007

Acquisition Price

JPY 872 mn

JPY 2,873 mn

JPY 3,040 mn

JPY 2,130 mn

Book Value (at disposition)

JPY1,027 mn

JPY 2,898 mn

JPY 2,875 mn

JPY 2,283 mn

Disposition Price

JPY 842 mn

JPY 2,923 mn

JPY 4,270 mn

JPY 1,530 mn

21.5 yrs

24.6 yrs

21.1/18.4 yrs
23.6 yrs
Property Age at Disposition____________________
Note: Book values of Tsurumi fuga 1 and JPR Takamatsu Bldg. are as of December 31, 2006.

Japan Prime Realty Investment Corporation 6

Recent Acquisitions (from July 2006)
Chayamachi
Grande Bldg.

JPR
Musashikosugi
Bldg.

Tachikawa BusinessCenter Bldg.

RetailRetailOfficeOfficeRetail(additional ownership)

Rise Arena Bldg. Shinjuku Sanchome
East Bldg.

Type of UseAcquisition Date

Aug. 2006

Sept. 2006

Feb. 2007 (planned)

Mar. 2007 (planned)

Mar. 2007 (planned)Acquisition Price

JPY 6.00 bn

JPY 7.26 bn

JPY 2.30 bn

JPY 5.47 bn (planned)

JPY 0.54 bn

Appraisal Value

JPY 5.56 bn

JPY 7.01 bn

JPY 2.30 bn

JPY 5.85 bn

JPY 0.54 bn

Location

Osaka-shi, Osaka

Kawasaki-shi, Kanagawa

Tachikawa-shi, Tokyo

Toshima-ku, Tokyo

Shinjuku-ku, Tokyo

Ownership

Land

100%

100%

Co-ownership 29.7%(total % to be 46.7%)

Co-ownership 15.9%

Ownership 2.7%
(Unit ownership)

Building

100%

100%

Unit ownership

Unit ownership,
Co-ownership of unit
ownership

Co-ownership of unit
ownership

100%

100%

100%

100% (planned)

100%



Occupancy %Expected NOI %4.0% (10th Period actual) 5.3% (10th Period actual)

Total 5.8% (planned)

5.2% (planned)

4.1% (planned)SellerSaturn Asset TMK Ltd.

Tokyo Kikai Seisakusho,
Ltd.

Tokyo Tatemono, Co.,
Ltd. (Sponsor)

Taisei Corporation(Sponsor)

Taisei Corporation(Sponsor)

Lease Term

10 yrs lease agreement(1F to 3F, to 2015)

10 yrs lease agreement(to Mar. 2013)
Rents to be revised
every 3 yrs. Terminable
on 12 months notice.

Normal lease agreement

To be determined

Major Tenant :MARUI Co., Ltd.
Lease term :not approved to disclose

Normal lease agreement(4F to 9F, 2 yrs)

(2 yrs)Japan Prime Realty Investment Corporation 7

Establishment of Core Portfolio
Portfolio Based in Tokyo and 5 Major Cities where Stability and Growth is Expected Portfolio Diversification (as of the end of Dec. 2006)

Other cities(Fukuoka, Sendai,
Sapporo)Sapporo1 property
JPY 3.7 bn

Other cities(Osaka, Nagoya)

Average Property Age: 14.0 yrs

Other cities (other)
3.4%
8.4%

5 majorcities

42.5%

Tokyo
CBDs

24.7%

GreaterTokyo

Naha
1 property
JPY 1.6 bn

Fukuoka
3 properties
JPY 7.6 bn

Diversification (as of the end of Dec. 2006)

Niigata
1 property
JPY 2.1 bn

Sendai2 properties
JPY 7.4 bn
Tokyo CBDs and Greater Tokyo
27 properties
JPY 141.4 bn(Planned sale of Tsurumi fuga 1)

Osaka
7 properties
JPY 46.2 bn

Wakayama
1 property
JPY 1.7 bn

Takamatsu
1 property
JPY 2.1 bn(JPR Takamatsu Bldg.; to be
sold in Apr. 2007)

Nagoya2 properties
JPY 8.7 bn★The 3 owned properties outside of
the 6 major cities (including Tokyo) arerecognized as highly competitive andadvantageous buildings

Tokyo
63.6%

21.1%

Diversification after
Planned Acquisitions and Sales (Note)
Other cities(Fukuoka, Sendai,
Sapporo)Other cities(Osaka, Nagoya)

Other cities (other)
8.3%

2.4%

5 majorcities

24.3%

42.1%

Tokyo
CBDs

Greater
Tokyo

Tokyo
65.0%

22.9%

____________________
Note: Based on the portfolio as of December 31, 2006 with the Tachikawa Business Center Bldg., the Rise Arena Bldg. and the Shinjuku Sanchome East Bldg. scheduled for acquisition added,
and the Tsurumi fuga 1 and JPR Takamatsu Building scheduled for sale excluded. Further, the preferred securities in the Kawasaki Dice TMK are not considered in the above.

Japan Prime Realty Investment Corporation 8

Portfolio Diversification
Elimination of Excess Concentration on Major Tenants through Portfolio
Portfolio Expansion and Replacement of Properties Tenant Diversification

 Top Tenants based on Total Monthly Rent

(based on total monthly rent(Note))

Top 5tenants

Other(469 tenants)

23.8%

Top 10 tenants
34.0%

66.0%

Tenant Name
1
The Seiyu, Ltd.
2The Loft Co., Ltd.
3
Tower Records Japan Inc.
4 Shinjuku Square Tower Management Co., Ltd.
5
ABC Development Corporation
6
Ito-Yokado Co., Ltd.
7
Iwatani International Corporation
8
Sompo Japan Insurance Inc.
9
UFJ Central Leasing Co., Ltd.
10
Deloitte Touche Tohmatsu

Share

8.6%
4.6%
4.0%
3.5%
3.1%
2.3%
2.2%
2.1%
2.0%
1.6%
34.0%

*Breakdown of Seiyu's ratio by property: Tanashi ASTA: 6.9%; Tsurumi fuga 1: 1.7%

Reduction of Revenue Impact of Top Properties through Diversification
Diversification via Portfolio Expansion
Top 5 Properties based on Acquisition Price Share of Top 5 Properties based on Acquisition Price
50%

1
2
3
4
5

Property
Kanematsu Bldg.
JPR Umeda Loft Bldg.
JPR Shibuya Tower Records Bldg.

____________________BYGS Shinjuku Bldg.
MS Shibaura Bldg.

Acquisition Price (JPY mn)

16,276
13,00012,00011,821
11,20064,297

Share

7.3%
5.8%
5.4%
5.3%
5.0%
28.9%

48.6% 47.4%

46.1%

44.9%

Share of top 5 properties basedon acquisition price

45%

38.3%
40%

34.9%
32.5% 31.7%

35%

30.7%

28.9%

30%
25%
June
2002

Dec.
2002

June
2003

Dec.
2003

June
2004

Dec.
2004

Note: Total monthly rent represents the total for the contracted rent, common expenses, parking fees, warehousing fees and sign usage fees.

June
2005

Dec.
2005

June
2006

Dec.
2006

Japan Prime Realty Investment Corporation 9

Investment
Investment Environment
Environment andand Policy
Policy on
on Selecting
Selecting Investment
Investment Properties
Properties
 Investment Environmentz Cap rate remained at a low level partly due to the inflow of capital
capital from overseas into the Japanese realestate market. Severe conditions continued with regards to the acquisition of properties.

 Property Acquisition Information Obtained by JPR
10th Fiscal Period

7thFiscalPeriod8th
FiscalPeriod9th
FiscalPeriodObtained

Considered

Office

97

74

52

56

Retail

22

12

22

Total

119

86

Of which,
Development
Projects

85Asset Type10th Fiscal Period

Region7th
FiscalPeriod8th
FiscalPeriod9th
FiscalPeriodObtained

Considered

5Tokyo CBDs

78

43

32

24

2

18

4

Greater Tokyo

27

22

20

20

3

74

74

9

Osaka andNagoya

5

13

10

14

4

13

7

0

Other Cities

9

8

12

16

0

 Policy on Selecting Investment Properties
Properties for which rent hikes can be
expected in the short term

Properties for which rent hikes can be
expected in the medium to long term
Properties that can secure a certain
level of yield

OfficeOffice buildings in Tokyo CBDs that are of a medium or larger size
size with acertain level of facilities
Large office buildings in Greater Tokyo and major regional cities
cities like
Osaka City
MultiMulti-tenant retail properties located in very popular districts

RetailRetail properties whose future growth in value can be expected as
as a resultof development in surrounding areas

OfficeBlueBlue-chip properties that can be acquired through collaboration withsponsors

RetailJPR Continued to Conduct Selective Investment Focused on Location and Future Potential
Japan Prime Realty Investment Corporation 10

Investment Properties Currently under Consideration
 Existing Properties under Consideration
OfficeRetailTokyo CBDs

1

1

Greater Tokyo

5

2

Osaka and Nagoya

10

Other Cities

00

Estimated Investment Value

Approx.
JPY 60 bn

Approx.
JPY 22 bn

9 Number of blue-chip properties eligible forconsideration started to increase in 2007
9 Most of the considered properties indicated in
the table to the left are scheduled to be closed
at the end of March 2007
9 Presently, conclusion of acquisition contracts
are being arranged for retail properties inGreater Tokyo Development Projects(Note 1) under Consideration
Estimated No. of
Projects andInvestment Value

Region

2008

2009

2010

2011 or after

Tokyo CBDs

1

1

0

0

Greater Tokyo

0

0

0

0

Osaka and Nagoya

1

3

0

0

Other Cities

0

1

0

0

7 properties

Asset Type

2008

2009

2010

2011 or after

Office2400Approx.
JPY 100 bn

Retail01

00

Share of Investment Value in Tokyo, Osaka and Nagoya (Currently About 90%) is Expected to Rise Further____________________
Notes: (1) The above development projects do not include properties for which an acquisition contract has already been concluded.
(2) The above figures are the number of properties or projects that have been considered as of February 9, 2007.

Japan Prime Realty Investment Corporation 11

Future Investment Strategy and Blueprint Portfolio
Acquisition Capabilities with LTV Cap at 55% on an Investment Amount Basis: About JPY 110 Bn
 Properties Acquired through Sponsor Pipelines
Other
20 properties
JPY 90.2 bn

28.3%

Acquired fromsponsors
18 properties
JPY 63.9 bn

40.0%

 Properties Acquired through Negotiation with Sellers
Acquired throughbidding
13 properties
JPY 78.6 bn

Acquired throughnegotiation
38 properties
JPY 147.0 bn

34.9%
65.1%

31.7%
Brokered by sponsors
13 properties
JPY 71.6 bn

Focus on Acquiring Additional Properties through Negotiations with
with Sellers by Reinforcing Sponsor Pipelines____________________
Notes: (1) The above numbers and percentages of transactions have been calculated on an acquisition price basis by adding the transactions of 3 properties scheduled for
acquisition to the transactions of properties owned by JPR as of February 20, 2007 and subtracting 2 properties scheduled for sale.
(2) In the above number of transactions, additional acquisition of ownership in one property has been counted as a single transaction.

 Blueprint Portfolio of JPY 300 Bn in Asset Sizez By Regionz By Asset Type

Other Cities

OfficeAround 5%

Osaka and Nagoya
Around 2020-30%

Tokyo CBDs andGreater Tokyo

RetailAround 6565-75%

Around 2525-35%

Around 6565-75%

Review Target Investment Ratio in the Portfolio after Reaching Asset Size of JPY 300 Bn
Japan Prime Realty Investment Corporation 12

Growth Potential of Cash Flow: History of Rent Revenues
Rent Revenues(Note 1) Bottomed Out and in Recovery Trend in the 7th Fiscal Period (Ended June 2005)
 History of Rent Revenues from the Entire Portfolio and from the 25 Properties Owned Since the

4th Fiscal Period (Ended Dec. 2003)(Note 2)
Change (%)(JPY mn)
mn)
9,000

8,455
7,792

8,000
7,097
7,000

110.0

8,072

7,340

6,388

103.3

6,000
5,000

8,636

8,802

105.0

101.9
100.4
100.0
100.0

4,000
3,000
2,000

Portfolio
as of Endof Dec. 2003

99.9
98.4

98.2

25 properties

96.8

5,055

4,962

4,895

4,972

5,049

5,077

5,149

5,221

5th Period

6th Period

7th Period

8th Period

9th Period

10th Period

11th Period

12th Period

June 2004

Dec. 2004

June 2005

Dec. 2005

June 2006

Dec. 2006

June 2007 (E)Dec. 2007 (E)

95.0

1,000
90.0

0

Total rent revenues from the entire portfolio (left axis)
Total rent revenues from the portfolio of 25 properties owned since the end of Dec. 2003 (left axis)
Rate of change in total rent revenues from the portfolio of 25 properties owned since the end of Dec. 2003 (right axis)____________________
Notes: (1) The rent revenues represent the fixed revenues designated in the contracts with tenants, including rent, common expenses and parking fees.
(2) The 25 properties owned since the 4th Fiscal Period (ended Dec. 2003) are the 32 properties owned in the 4th Fiscal Period (ended Dec. 2003) minus JPR Ikebukuro Bldg.,
JPR Park West Takamatsu and JPR Square Hakata East/West that were sold in March 2005, SK Hiroshima Bldg. that was sold in September 2005, Park East Sapporo that was
sold in Nov. 2005, and Tsurumi fuga 1 and JPR Takamatsu Bldg. that are scheduled for sale in April 2007.

Japan Prime Realty Investment Corporation 13

Growthnt
Growth Potential
Potential ofof CashCash Flow:
Flow: Rising
Rising New
New Rent
Rent andand Continuing
Continuing Re
Rent
 Replacement Rate of New Tenants in Office Buildings(Unit: ㎡)

 Actual Upward Revisions in Continuing Rent for

Office Tenants

6th Period 7th Period 8th Period 9th Period 10th Period

Occupied area
17,159 10,144
Vacated area
-10,253 -10,649
Replacement rate
5.3%
5.3%
Average occupancy rate 94.3% 94.9%

10,395-7,470
4.0%
96.1%

8,313
-5,787
3.0%
97.7%

5,218
-3,555
1.9%
98.3%

10th Period(Actual)11th Period(Finalized)

12th Period(Finalized)

No. of matured contracts

116

174

135

No. of tenants with increased rent

7

37

7

% of tenants with increased rent

* Replacement rates are calculated by dividing the area that is the smaller out of
the occupied area and vacated area for each fiscal period by the total leased
floor space (of offices) at the end of the fiscal period.

Increased rent (monthly)

6.0%

21.3%

5.2%

JPY 1 mn

JPY 9 mn

JPY 4 mn Increases in New Rent in Office Buildings
10th Period

No. of tenants
Of which, no. of tenants whose rent will surpass theaverage rent unit price for the 9th Period

11th Period or
After

33

14

20

10

z Of the 30 tenants whose rent will surpass the average rent

unit price in the 10th Fiscal Period or after,
Maximum increase in rent unit price: JPY 5,746 per tsubo (anincrease of 35.4%)
Average rate of increase of all 30 tenants: 17.9% (actual average
averagerate of increase of 20 tenants in the 10th Fiscal Period: 10.8%)

zContinuing rent rose especially in Tokyo CBDs

Maximum increase: About JPY 3 mn per month
Maximum rate of increase: About １8%* The number of matured contracts are obtained by adding
the number of tenants with whom an upward rent revision
has been concluded within the existing contract period to thenumber of tenants whose contract is maturing during eachfiscal period.

 Efforts on Raising Rent
zAim to realize upward rent revision of an even greater amount by encouraging property managementcompanies through the introduction of incentive fees at times of upward rent revisionzAim to attract new tenants with higher rents and to realize upward
upward revisions by establishing standard

rent levels that are higher than current market levels____________________

The above number of contracts for offices do not include contracts for warehouses.

Japan Prime Realty Investment Corporation 14

Profit or Loss Valuation

As of December 31, 2006

 Real Estate valuation (June 2006)(JPY mn)

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

Book value(A)(%)

Appraisal value(B)(%)

Profit or loss valuation

(B-A)

(%)

75,841
18,62094,461

34.1%
8.4%
42.5%

74,80018,721
93,521

34.3%
8.6%
42.9%

84,416
21,040105,456

33.9%
8.4%
42.3%

9,616
2,319
11,935

12.9%
12.4%
12.8%

24,31522,60046,915

10.9%
10.2%
21.1%

23,244
21,447
44,691

10.7%
9.8%
20.5%

29,14026,50055,640

11.7%
10.6%
22.3%

5,896
5,053
10,949

25.4%
23.6%
24.5%

49,11019.7%
39,16015.7%
88,27035.4%
249,366 100.0%

5,393
2,966
8,359
31,243

12.3%
8.2%
10.5%
14.3%

45,25720.3%
35,85016.1%
81,10736.5%
222,483 100.0%

43,71720.0%
36,194
16.6%
79,911
36.6%
218,123 100.0%

 Development of Potential Gain/Loss on Holding Real Estate(JPY mn)
mn)
35,00025,00031,24315,00019,2305,000

10,582-5,000-4,013-15,000< Recovery of the Japanese economy >Improvement of leasing market
Real estate market booming-8,323

Dec. 2003 June 2004

-7,451

Dec. 2004-3,868June 2005

Profit or loss valuation

Dec. 2005 June 2006

Dec. 2006

Asset value is expected toincrease with the growth ofcash flow
Japan Prime Realty Investment Corporation 15

Financial Strategy Focused on Stability

As of December 31, 2006

Continue to Emphasize Financial Stability in Administration and Aiming for a Well Balanced Debt Structure

Credit Ratings Obtained by JPR

State of Interest-bearing Debt

R&I (issuer rating)A+

Long-term fixed-rate debt ratio

75.3%

Moody’s (issuer rating)

A2

Average maturity of long-term interest-bearing debt

5.1 yrs

S&P (long-term issuer rating)A–

Average interest rate of long-term interest-bearing debt

1.6%

Average interest rate of interest-bearing debt

1.3%

Interest-bearing debt ratio

48.7%* Moody’s upgraded JPR’s corporate credit
rating from A3 to A2 in Nov. 2006.

*Interest-bearing debt ratio is on an investment amount basis.

Diversified Maturity of InterestInterest-bearing Debt
(JPY 100 mn)

250

Short-term debt

130.0
75.0

Long-term debt

Corporate bonds

200
The JPY 19.5 bn (JPY 13 bn + JPY 6.5 bn) in shortshort-term debt were repaid on Feb. 16, 2007.

150
100.0

50.0
60.0

100.0

100

70.0

65.0

60.0

47.8

50

Issue of 20-year Corporate Bonds
50.0

47.8

44.0

50.0 50.0<Issuance Outline>

45.0

Seventh series of unsecured
corporate bonds

40.0

Issue value: JPY 4.5 bn
Interest rate: 2.9％

10.0

0

Maturity date: Dec. 14, 2026
June/Dec.
2007

June/Dec.
2008

June/Dec.
2009

June/Dec.
2010

June/Dec.
2011

June/Dec.
2012

June/Dec.
2013

June/Dec.
2014

Dec. 2026(Fiscal Period)

Japan Prime Realty Investment Corporation 16

Additional Issue of New Investment Units
Expand Property Acquisition Capacity via Offering
Offering Schedule

Overview of Offering
Total amount of the offer price

LaunchJan. 17, 2007 (Wed.)

Book-building period

From: Jan. 23, 2007 (Tues.)

Pricing datePrimary and secondary offering subscription period

JPY 42,732,900,000(including over-allotment)

To: Jan. 29, 2007 (Mon.)

Total number of units to be issued

Jan. 29, 2007 (Mon.)

Over-allotment

5,000(issuance of all investment units)

From: Jan. 30, 2007 (Tues.)
To: Feb. 1, 2007 (Thurs.)

Payment dateFeb. 6, 2007 (Tues.)

Investment securities delivery and settlement dateFeb. 7, 2007 (Wed.)

Third-party allotment subscription period

Mar. 6, 2007 (Tues.)

Third-party allotment payment dateMar. 7, 2007 (Wed.)

90,000Total number of units to be issued
through third-party allotment(maximum)

5,000

Offer price

JPY 449,820 per unit
(discount rate of 2.0%)

Number of units outstanding after
offering*Third-party allotment shall not be issued if there is no subscription during thesubscription period.

625,000(530,000 before offering)*When all of the 5,000 units for third-party
allotment are issued

Changes in InterestInterest-bearing Debt Ratio(JPY 100 mn)
1,500

54.9

Unitholders’ capital:
JPY 89.1 bn

51.1

46.4

1,250

Unitholders’ capital:
JPY 156.7 bn (maximum)
Unitholders’ capital:
48.7
JPY 115.4 bn
44.1

Capacity to Acquire Properties after Offering

60%
50%

45.8

Interest-bearing
Debt Ratio (%)

Acquisition Capacity

50

About JPY 80 bn

55

About JPY 110 bn

39.4
1,000

40%

42.0

40.6
37.1
750

34.5

Unitholders’ capital:
JPY 56.9 bn

30%

500

20%

250

10%
0%

0

End ofFeb.
2002

End ofDec.
2002

End ofJune
2003

End ofDec.
2003

End ofJune
2004

End ofDec.
2004

End ofJune
2005

End ofDec.
2005

End ofJune
2006

End of
Dec.
2006

After
offering

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

Japan Prime Realty Investment Corporation 17

Summary
Profile Overview
z Top ranked diversified J-REITz Focusing on high quality office buildings and popular retail properties
z Sponsored by major real estate developers, a general contractor, etc.

Growth Strategy
z Selective investment focused on future potential
z Leverage sponsor pipeline
 Focus on acquiring additional properties from Tokyo Tatemono, a mainsponsor Focus on incorporating development projects participated by Taisei
Corporation, a sponsorz Seek growth through rent hikes

Management View
z Target Asset size exceeding JPY 300 bn
 Aim to raise cash distribution per unit, which has been stable at the

JPY 6,000 level, to the JPY 7,000 level
Japan Prime Realty Investment Corporation 18

1. Financial Summary

Appendix

2. Property Summary
3. Overview of TRIM

Financial Summary

Balance Sheet for the 10th Fiscal Period

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

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

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

Total assets
Total current liabilities

As of Dec. 31, 2006
Amount%24,933
10.2%
10,653
4.4%
13,997
5.7%
282
0.1%
219,69789.8%
218,12389.1%
46,00718.8%
17,425
7.1%
28,581
11.7%
172,116
70.3%
63,29225.9%
108,824
44.5%
5
0.0%
5
0.0%
1,568
0.6%
1,558
0.6%
10
0.0%
0
0.0%
60
0.0%
60
0.0%
244,691
100.0%

As of June 30, 2006
Amount%24,34510.5%
10,478
4.5%
13,600
5.9%
266
0.1%
207,118
89.5%
205,54388.8%
38,64916.7%
15,612
6.7%
23,0369.9%
166,894
72.1%
63,22827.3%
103,665
44.8%
5
0.0%
5
0.0%
1,568
0.7%
1,558
0.7%
10
0.0%
0
0.0%
59
0.0%
59
0.0%
231,523100.0%(JPY mn)
ChangeAmount
%
587
2.4%
174
1.7%
397
2.9%
16
6.0%
12,579
6.1%
12,5796.1%
7,357 19.0%
1,812 11.6%
5,545 24.1%
5,222
3.1%
63
0.1%
5,158
5.0%
-0 -8.3%-0 -8.3%
－
－
－
－
－
－
－
－
1
2.4%
1
2.4%
13,168
5.7%-9,250 -23.7%
181 11.8%67
7.1%
5,500 39.3%-15,000 -66.7%
22,226 30.2%
726
5.7%
17,000 89.6%
4,500 10.7%
12,975 11.5%

Long-term borrowings
Corporate bonds
Total liabilities

29,741
1,727
1,014
19,5007,500
95,876
13,41035,96646,500125,617

12.2%
0.7%
0.4%
8.0%
3.1%
39.2%
5.5%
14.7%
19.0%
51.3%

38,991
1,545
946
14,00022,50073,65012,68418,96642,000112,641

16.8%
0.7%
0.4%
6.0%
9.7%
31.8%
5.5%
8.2%
18.1%
48.7%

Unitholders' capital
Retained earnings
Total unitholders' equity

115,4313,642
119,074

47.2%
1.5%
48.7%

115,4313,449
118,881

49.9%
1.5%
51.3%

－
192
192

－
5.6%
0.2%

Total liabilities and unitholders' equity

244,691

100.0%

231,523100.0%

13,168

5.7%

Accounts payable and accrued expenses

Rent received in advance
Short-term borrowings
Current portion of long-term borrow ings

Total long-term liabilities
Deposits received from tenants(JPY mn)
1. Balance of interest-bearing debt
Total
(Breakdown) Unsecured borrowings
Secured borrowings
Unsecured corporate bonds

End of 10th End of 9th
Fiscal Period Fiscal Period

109,466
49,00013,96646,50097,466
26,50028,96642,000End of 10th

End of 9th

Variation

12,00022,500-15,000
4,500

2. Interest-bearing debt ratio, etc.
Fiscal Period Fiscal Period(1) Interest-bearing debt to total assets① Interest-bearing debt ÷ Total assets at end of period
44.7%
42.1%
② Interest-bearing debt ÷ (Total assets at end of period + Gains or losses from real estate
valuation)

39.7%

38.9%

(2) Ratio of long-term fixed-rate borrowings
Long-term fixed-rate interest-bearing debt (*) ÷ Interest-bearing debt
75.3%
62.6%
*Current portion of long-term borrowings and corporate bonds are excluded.

(3) Interest-bearing debt ratio
Interest-bearing debt ÷ (Interest-bearing debt + Unitholders' capital)
48.7%
45.8%

End of 10th

End of 9th

3. Commitment line status
Fiscal Period Fiscal Period
20,00020,000① Credit limit (total)－－② Outstanding debt at the end of the period
20,00020,000③ Unused commitment line at the end of the period④ Lenders (as of the end of the period)

Variation－－－

Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ, Resona Bank,
Mitsubishi UFJ Trust and Banking, Shinsei Bank
*Agreements have been concluded separately with respective banks listed above.

End of 10th

End of 9th

4. Investment units status
Fiscal Period Fiscal Period① Total number of units issued and outstanding (units) 530,000 530,000
224,668 224,304② Total unitholders' equity per unit (yen)Variation－364

Note: Figures were rounded off to a million yen

Japan Prime Realty Investment Corporation 21

Income Statements for the 10th Fiscal Period(JPY mn, unless otherwise indicated)

10th Fiscal Period

9th Fiscal Period

July 1, 2006 – Dec. 31, 2006

Jan. 1, 2006 – June 30, 2006

ChangeAmount
8,455
600
9,056
31
9,088

%
93.0%
6.6%
99.7%
0.3%
100.0%

Amount
8,072
480
8,552
35
8,588

%
94.0%
5.6%
99.6%
0.4%
100.0%

Other
Depreciation
Real estate rental expenses ②
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses

744
1,826
467
590
34
146
171
367
49
1,579
4,151
356
63
5
51
85
4,714

8.2%
20.1%
5.1%
6.5%
0.4%
1.6%
1.9%
4.0%
0.5%
17.4%
45.7%
3.9%
0.7%
0.1%
0.6%
0.9%
51.9%

745
1,706
456
472
33
165
166
355
56
1,560
4,013
350
68
5
50
75
4,564

8.7%
19.9%
5.3%
5.5%
0.4%
1.9%
1.9%
4.1%
0.7%
18.2%
46.7%
4.1%
0.8%
0.1%
0.6%
0.9%
53.1%

-1
-0.2%
120
7.0%
10
2.4%
118
25.0%
0
1.2%
-18 -11.4%
4
2.8%
12
3.4%
-6 -12.3%
19
1.2%
138
3.4%
5
1.5%
-5
-7.5%
－
－
1
2.8%
10
13.8%
149
3.3%

Operating profits

4,373

48.1%

4,024

46.9%

349

8.7%

4,905
6,485
4
734
668
18
42
5
3,643

54.0%
71.4%
0.0%
8.1%
7.4%
0.2%
0.5%
0.1%
40.1%

4,539
6,100
67
640
574
18
42
6
3,450

52.9%
71.0%
0.8%
7.5%
6.7%
0.2%
0.5%
0.1%
40.2%

365
384
-63
93
93
0
0
-0
192

8.1%
6.3%
-93.5%
14.6%
16.3%
1.5%
0.3%
-3.3%
5.6%

Income before income taxes

3,643

40.1%

3,450

40.2%

192

5.6%

Net income

3,642

40.1%

3,449

40.2%

192

5.6%

Retained earnings at the end of period

3,642

40.1%

3,449

40.2%

192

5.6%

Distribution per unit (JPY)6,873

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

Profits (①-②)
Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Interest expenses (including corporate bonds)

Loan arrangement fees
Amortization of corporate bond issuance costs

Other non-operating expenses
Recurring profits

6,509

Amount
383
120
503
-4
499

364

%
4.7%
25.1%
5.9%
-12.1%
5.8%

1. Operating Revenues
Growth in operating revenues was backed by
the two properties acquired in the 9th Fiscal
Period bringing additional JPY 103 mn during
the entire fiscal period, and the two
properties acquired in the 10th Fiscal Period
adding JPY 188 mn, compared with the 9th
Fiscal Period. Moreover, enhanced
profitability of owned properties increased
revenues by JPY 90 mn.
2. Real Estate Rental Expenses
Utility expenses corresponding to theadditional service charges (other rental
revenues) increased by JPY 118 mn over the
9th Fiscal Period due to seasonal factors.
3. Non-Operating Revenues and Expenses
Non-operating revenues decreased from the
9th Fiscal Period due to lack of income on
settlement of management associationaccounts, which accrues once a year in thefiscal period through January to June. Nonoperating expenses saw a rise in interest
paid by JPY 93 mn over the 9th Fiscal
Period, because of an increase in interestbearing debt as well as JPR’s endeavor toshift to fixed-rate borrowings in preparation
for higher interest rates in the future.
4. Net Income
Net income continued to rise, increasing by JPY
192 mn from the 9th Fiscal Period since increases
in operating revenues offset increases in
expenses, as stated above.

Note: Figures were rounded off to a million yen

Japan Prime Realty Investment Corporation 22

Forecast for the 11th Fiscal Period(JPY mn,
mn, unless otherwise indicated)

Forecasts for the 11th Fiscal Period
January 1, 2007 – June 30, 2007
44 properties as Scheduled sales Kawasaki Dice TMK Tachikawa BusinessShinjuku
Center Bldg.
of the end of 10th of 2 properties Preferred Securities
Sanchome East
(Acquiring*2
Fiscal Period*1Bldg.
additional ownership)

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

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

Change from the 10th
Fiscal Period Results
Rise Arena
Bldg. *3

Total

8,400
496
8,896
－
－
8,896
770
1,764
444
516
30
208
182
343
37
1,553
4,088
－

130
1
132
539
－
671
12
25
6
6
0
3
2
7
0
17
56
－

－
－
－
－
31
31
－
－
－
－
－
－
－
－
－
－
－
－

57
3
61
－
－
61
－
20
7
9
0
1
1
－
0
13
33
－

9
－
9
－
－
9
－
3
1
－
0
0
0
－
0
1
4
－

37
－
37
－
－
37
－
22
1
－
0
3
16
－
－
38
61
－

4,808
6,361

76
94

－
－

27
40

5
6

-23
15

*1 Tsurumi fuga 1 and JPR Takamatsu Bldg. scheduled for sale on April 11, 2007.
*2 The Kawasaki Dice TMK preferred securities are investment securities and thus not included
in real estate rental revenues.
*3 Rental revenues from Rise Arena Bldg. are set to accrue on June 1, 2007 and after.

%

8,636
89.0%
500
5.2%
9,137
94.1%
539
5.6%
31
0.3%
9,708 100.0%
782
8.1%
1,836
18.9%
462
4.8%
532
5.5%
32
0.3%
217
2.2%
203
2.1%
351
3.6%
37
0.4%
1,624
16.7%
4,243
43.7%
－
－
381
3.9%
86
0.9%
5
0.1%
53
0.5%
94
1.0%
4,864
50.1%
4,843
49.9%
4,894
50.4%
6,518
67.1%
82
0.9%
799
8.2%
4,126
42.5%
4,126
42.5%
4,125
42.5%
4,125
42.5%

Amount
181
-99
81
539
-0
619
38
9
-4
-58
-2
70
32
-16
-11
44
91
－
25
22
－
1
9
150
469
-10
33
78
65
482
482
482
482

%
2.1%
-16.6%
0.9%
－
-1.9%
6.8%
5.2%
0.5%
-1.1%
-9.9%
-6.4%
48.0%
18.8%
-4.4%
-23.0%
2.8%
2.2%
－
7.1%
35.8%
－
2.2%
10.9%
3.2%
10.7%
-0.2%
0.5%
1784.9%
8.9%
13.2%
13.2%
13.2%
13.2%

6,600
-273
Total units outstanding (Units)
625,000+95,000

For details on assumptions for the 11th Fiscal Period forecast, please refer to the “Assumptions for the Eleventh Fiscal Period Forecast (January 1,
2007 – June 30, 2007)” on page 4 of the “Japan Prime Realty Investment Corporation Tenth Fiscal Period Results (July 1, 2006 to December 31, 2006).”

Japan Prime Realty Investment Corporation 23

Breakdown of Unitholders (Units by Owner)
Increase in Ownership by Foreign Investors and Trust Banks
Amidst Decrease in Other Domestic Corporations and Individuals, etc.

500,000

530,000

530,000

530,000

530,000

6.9%
36,5649.9%
52,36612.4%
65,647

13.6%
71,94714.6%

430,000

430,000

10.8%
46,542

10.8%
46,5907.2%
30,944

20.3%

17.5%

87,47475,298430,000
400,000

77,214

Number ofUnitholders

15,604201

14.1%
74,822

14.0%
74,03013.8%
73,381204

16.9%

300,000

Units
outstanding
289,600
11.1%
32,11424.1%
69,69352.3%

144,044

100,000

0

Of whichtrust banks
own
9.2%
26,634

56.2%

60.4%

241,691

259,891

Of whichtrust banksown

Of whichtrust banks
own

224,870

200,000
49.7%

72,727

Of whichtrust banks
own
10.2%
43,779

13.4%

16.2%

57,76969,666

63.8%

63.7%

62.9%

63.0%

338,145

337,488

333,491

333,697148
Of whichtrust banks
own
20.3%

22.9%

22.5%

24.5%

121,481

119,104

129,658

12.3%
65,324

10.7%
56,832

9.6%
50,975

Dec.
2005

June
2006

Dec.
2006

16.5%

15.4%

15.5%

14.7%

71,114

66,421

66,43878,077

June
2003

Dec.
2003

June
2004

Dec.
2004

June
2005

Financial Institutions

Of whichtrust banksown

107,342

15.1%
43,749Individuals

Of whichtrust banksown

Of whichtrust banks
own

Other Domestic Corporations(of which,
7 are trustbanks)

15,051

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

Japan Prime Realty Investment Corporation 24

Property SummaryProjected Trends of Occupancy Rates
10th Period (Dec. 2006)

12th Period (Dec. 2007)

11th Period (June 2007)
Forecast

100%

98.7%
99%
98%

98.6%

97%

97.2%

96%
95%

A 0.8% increase compared tothe 97.8% forecasted at thetime of announcing the 9th
Fiscal Period results

94%
93%
92%

Includes finalized new tenants
and contract cancellations

Average Occupancy Rate

91%

98.3％

98.4％

98.4％

90%

(Reference) Total leasable area: 337,382.05㎡ (end of the 10th fiscal period)((1)1) Assumptions
Assumptions forfor thethe calculation
calculation ofof occupancy
occupancy inin thethe 11th
11th Fiscal
Fiscal Period
Period andand afterafter
A.
A. January
January 2007
2007:: Occupancy
Occupancy rate
rate ofof allall 4646 properties
properties

B.
2007
B. February
February 20072007-:: Occupancy
Occupancy rate
rate ofof allall 4646 properties
properties including
including thethe Tachikawa
Tachikawa BusinessBusiness Center
Center Bldg.
Bldg. toto be
be acquired
acquired inin February
February 2007
2007

C
2007
C.. March
March 20072007-:: Occupancy
Occupancy rate
rate ofof allall 4848 properties
properties including
including thethe Shinjuku
Shinjuku Sanchome
Sanchome Bldg.
Bldg. andand Rise
Rise Arena
Arena Bldg.
Bldg. toto be
be acquired
acquired in
in March
March 2007
2007

D
2007
D.. April
April 20072007-:: Occupancy
Occupancy ofof allall 4646 properties
properties excluding
excluding Tsurumi
Tsurumi fuga
fuga 11 andand JPRJPR Takamatsu
Takamatsu Bldg.,
Bldg., which
which areare toto be
be sold
sold inin April
April 20072007

e scheduled
nly actually
(2)
th
oonly
(2) TheThe occupancy
occupancy rate
rate forfor thethe 11th
11th Fiscal
Fiscal Period
Period includes
includes all
all ofof thethescheduled contract
contract cancellations
cancellations as
as ofof February
February 13,
13, 20072007 andand only
actually contracted
contracted
new
new tenants
tenants areare included.
included.

(3)(3) TheThe occupancy
occupancy rate
rate forfor thethe 12th
12th Fiscal
Fiscal Period
Period includes
includes some
some newnew tenants
tenants inin addition
addition toto whatwhat isis indicatedindicated inin (2)(2) above.
above.

Japan Prime Realty Investment Corporation 26

NOI Yield by Property for the 10th Fiscal Period (Tokyo CBDs and Greater Tokyo)(July 1, 2006 – Dec. 31, 2006)

12.0%
10.5%

Portfolio NOI 5.9%

9.9%

10.0%

9.3%

Office Buildings NOI 5.9%
Retail Properties NOI 5.9%

8.3%
7.6%

8.0%

7.5%

7.9%

6.9%

6.5%

6.2%

6.0%

6.0%

6.4%
5.9%

5.4%
4.4%

4.6%

4.6%

4.2%

5.3%

5.1%

5.2%

5.1%

5.3%

8.2%

4.0%

3.8%

4.0%

3.8%

2.0%

0.0%
A

Type

Area

B

C

D

E

F

G

H

I

J

K

L

M

OfficeTokyo CBDs

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

NO

Retail

P

Q

R

S

T

U

V

W

X

OfficeYZAARetailGreater Tokyo
O: JPR Daikanyama
V: JPR Ueno East Building
P: JPR Jingumae 432
W: Tachikawa Business Center Building
Q: Arca East
X: Tanashi ASTA
R: JPR Chiba Building
Y: Tsurumi fuga 1
S: JPR Yokohama Nihon Odori Building Z: Cupo-la Main Building
T: Shinyokohama 2nd Center Building AA: JPR Musashikosugi Building
U: Kawaguchi Center Building

Japan Prime Realty Investment Corporation 27

NOI Yield by Property for the 10th Fiscal Period (Other selected cities)(July 1, 2006 – Dec. 31, 2006)
12.0%

Portfolio NOI 5.9%
Office Buildings NOI 5.9%

10.0%

9.7%
9.2%

Retail Properties NOI 5.9%

8.6%

8.8%
7.8%

7.9%

8.0%

7.2%
6.5%

6.0%

5.4%

5.8%

5.6%

5.9%

6.3%
5.5%
5.3%

5.1%

4.3%
4.1%

4.0%

4.0%

2.0%

0.0%
a
Type
Area

b

c

d

Officeef

RetailOsaka

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

g

h

I

j

k

l

m

n

o

OfficeOfficeOfficeNagoyaFukuoka

Sapporo/Sendai

g: Chayamachi Grande Buildingh: JPR Nagoya Sakae Building
i: UFJ Central Leasing Head Office Building
j: JPR Hakata Building
k: Tenjin 121 Building
l: JPR Hakata-Chuo Building

Retailpqrs

OfficeOther cities

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

Japan Prime Realty Investment Corporation 28

Overview of TRIM

Overview of TRIM –– Biography of M
anagement
Management
Name
Toshihiro Hagiwara
President & Chief Executive Officer

Kazuo Kitami
Director & Chief Administrative Officer

Seiji Miwa
Director & Chief Investment Officer

Yasuo Furuya
Director & Chief Financial Officer

Biography
 Has over 30 years of experience in investment, brokerage and development
development ofreal estate as well as property management since he joined Tokyo Tatemono Co.,
Ltd. in 1968. At Tokyo Tatemono, he worked on acquisitions of leasingleasing building
companies in total transaction value of tens of billions of yen. He was Directorand Head of the Osaka Branch of Tokyo Tatemono before assuming thethe current
role of President and CEO of Tokyo Realty Investment Management, Inc. (TRIM)
in January 2001.
 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life

Insurance Company) in 1975. Since then, he has been involved in a range offinance business and real estate investment for almost 30 years. His experience
includes overseeing the insurer’insurer’s loan management as its credit manager,
formulation of a series of regulations such as selfself-assessment in line with theinsurance inspection manual and supervising credit management based
based on such
regulations.
 Joined Tokyo Tatemono in 1983. After working in Design Supervision,
Supervision, Planningand Development for 15 years, he was responsible for real estate securitizationfrom 1998. He became a member of the JJ-REIT Composition Project Team after
the formation of the first securitization deal based on the JapaneseJapanese SPC law. He
was responsible for the establishment of TRIM and launch of JPR as one of its key
members. In 2003, he was seconded to TRIM to work in asset management.
management. He isa firstclassarchitect.
first Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life

Insurance Company) in 1980. Spent eight years in securities investment
investment
operations engaged in interest rate analysis, as well as the establishment
establishment of bondinvestment and asset management companies. Undertook activities related tovariable insurance securities management and oversaw securities investment
activities as Chief Bond Trader. Later, gained further experience
experience in stock market
investment operations.
Japan Prime Realty Investment Corporation 30

Overview of TRIM – Measures to Avoid Conflict of Interests
Transactions with Interested Parties<1st check > Compliance Committee

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

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

Board of Directors【 Prior Review】

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

directors with shareholders

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

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

Execution of Selected Deals Only
Japan Prime Realty Investment Corporation 31

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

Investment Management Division

Review

Compliance Subcommittee*1

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

Determineacquisition
policyInvestment Subcommittee

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

Due diligence

Due Diligence Subcommittee

Transactions withinterested parties,
advanceverification/approval

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

Conclusion ofcontract

Compliance Committee/Board of
Officers of Investment
Corporation

Investment Subcommittee

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

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

Board of Directors*2

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

Japan Prime Realty Investment Corporation 32

Overview of TRIM – The Fee Structure of TRIM

 AM Fee Structure (No fees for purchase/sale of property)zFixed ＋ Incentive Fee 1＋

Incentive Fee 2(JPY 12.5 mn every 6 months)

Merits from Economies of Scale

AM fee structure initially designed toIncentive for Cost Reductions
Incentive fee linked to distributableenjoy economies of scaleamountIncentive Fee 1

Æ 3% of the amount available forÆ 2% of total revenues, decreasing to

1.5% for amounts exceeding JPY 8 bn

distribution prior to deduction of
relevant fees will be allocated as
Incentive Fee 2

Japan Prime Realty Investment Corporation 33

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

Japan Prime Realty Investment Corporation 34