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

Fifth Fiscal Period Results(July 31, 2007 to January 31, 2008)

March 14, 2008

Prospect Residential Investment Corporation
Disclaimer
This document contains a translation of information provided in the Financial Report (Kessan Tanshin) of Prospect
Residential Investment Corporation (“PRI”) dated March 14, 2008, and prepared under the timely disclosure
requirements of the Tokyo Stock Exchange for the period from August 1, 2007 to January 31, 2008.
This English language document is provided solely for the convenience of and reference by non-Japanese investors, andis not intended to constitute a disclosure document. The Japanese language Financial Report should be referred to as theoriginal of this document. The English translation of legal, accounting, tax and business terms used herein may notprecisely convey the identical meaning of equivalent Japanese terms. With respect to any and all terms herein, including
without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between
the original Japanese document and English translation contained herein, the original Japanese document will govern
the meaning and interpretation. Neither PRI, Prospect Residential Advisors, Co., Ltd. (“the Asset Management
Company”) nor any of their respective directors, officers, employees, partners, shareholders, agents or affiliates will be
responsible or liable for the completeness, appropriateness or accuracy of this English translation or any portion(s) of
any document(s) translated into English. No person has been authorized to give any information or make any
representations other than those contained in this document in relation to matters set out in this document, and if given
or made, such information or representation must not be relied upon as having been authorized by PRI, Prospect
Residential Advisors, Co., Ltd. or any of their respective directors, officers, employees, partners, shareholders, agents oraffiliates.
The financial statements of PRI have been prepared in accordance with generally accepted accounting principles inJapan (Japanese GAAP), which may materially differ in certain respects from generally accepted accounting principles
in other jurisdictions.
Many provisions within this document contain information that constitutes forward-looking statements. These
forward-looking statements are not a guarantee of future performance and involve risks and uncertainties. Therefore,
actual results may differ materially from those in the forward-looking statements as a result of various factors.
Contact Information:
Investor Relations
Prospect Residential Advisors, Co., Ltd.
ir@proresi-advisors.co.jp

2

Prospect Residential Investment Corporation

Prospect Residential Investment Corporation("PRI" or "the Investment Corporation")
Representative: Takeo Nishiyoshi, Executive Officer
Address: 2-2-1 Marunouchi, Chiyoda-ku, Tokyo
Prospect Residential Investment Corporation is listed
as a Japanese Real Estate Investment Trust (J-REIT) on
the Tokyo Stock Exchange with the securities code 8969
(URL of English website http://www.prospect-reit.co.jp/en/index.html)
Planned date of submission of the Company Report (Yukashoken Hokokusho): April 22, 2008
Planned date of distribution payment commencement: April 16, 2008
(1) Operating Performance and Assets for the Fiscal Period Ended January 31, 2008
1) Operating Performance(Millions of yen rounded down unless otherwise stated)
Fiscal Period
Ended

Operating Revenues

Operating Income

Ordinary Income

Net Income

%

%

%

%

January 31, 2008

2,330

8.5

1,057

8.8

663

-6.7

662

-6.6

July 31, 2007

2,148

-3.7

972

-3.2

710

-4.5

709

-4.6

Fiscal Period
Ended

Return on Net
AssetsNet Income per Unit
Yen
8,820
9,448

January 31, 2008
July 31, 2007

%
1.9
2.0

Ordinary Income toTotal Assets
%
0.9
1.1

Ordinary Income toOperating Revenues
%
28.5
33.1

2) Distributions
Fiscal Period
Ended
January 31, 2008
July 31, 2007

Distributions per
Unit Excluding
Excess ofEarnings (Yen)
8,820
9,448

Total
Distribution
662
709(Millions of yen rounded down unless otherwise stated)
Distributions
Total
Distributio
Payoutin Excess ofDistribution
n Ratio to
Earnings per
s in Excess
Ratio
Net Assets
Unit (Yen)of Earnings−−
100.0%
1.9%
−
−
99.9%
2.1%

3) Financial Position
Fiscal Period
Ended
January 31, 2008
July 31, 2007

(Millions of yen rounded down unless otherwise stated)
Net Assets
Net Assets
Net Assets
to Total Assets
per Unit (Yen)
35,203
47.4%
468,752
35,31652.3%
470,265

Total Assets
74,34367,589(Reference Material) Net worth, JPY 35,203 million as of January 31, 2008 and JPY 35,316 million as of January 31, 2007

4) Cash Flow Situation
Fiscal Period
Ended
January 31, 2008
July 31, 2007

Cash Flows fromOperating
Activities
2,050
1,630

(Millions of yen rounded down unless otherwise stated)
Cash Flows from
Cash Flows from
Cash and CashInvesting
FinancingEquivalents at The
Activities
Activities
End of The Period-8,296
5,884
2,963-11,343
10,1633,324(2) Forecast of Revenues and Earnings (for the Sixth Fiscal Period: February 1, 2008 to July 31, 2008)(Millions of yen rounded down unless otherwise stated, yoy % change)
Fiscal PeriodEndingOperating
Revenues

Operating
IncomeJuly 31, 2008

2,491 (6.8)

1,106 (4.6)

Ordinary
Income679(2.5)

Net Income

678(2.5)

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

9,039

−

(Reference Material) Estimated net income per unit for the sixth fiscal period ending July 31, 2008: JPY 9,039

3

Prospect Residential Investment Corporation(3) Others
1) Changes in accounting policies
A. Changes due to accounting standards: None
B. Other changes: None
2) Investment units outstanding
A. Investment units outstanding (including units owned by PRI) at fiscal period-ends:
75,100 units as of January 31, 2008; 75,100 units as of July 31, 2007
B. Investment units owned by PRI at fiscal period-ends:
0 units as of January 31, 2008; 0 units as of July 31, 2007
(Note) Please refer to ‘Information per Unit’ on page 24 with respect to the number of investment units used as thebase to calculate the aforementioned ‘net income per investment unit.’* Disclaimer regarding ‘Forecasts of Revenues and Earnings’
Forward-looking statements such as forecasts of revenues and earnings in this document are based on many sources
including current information available to PRI’s management as well as the assumptions judged to be rational bymanagement. These forward-looking statements are not guarantees of future performance and they involve risks anduncertainties. As a result of various factors, actual results may differ materially from those in the forward-looking
statements. With respect to the assumptions underlying such forecasts, please refer to 2) Management Policy andOperating Conditions (2) Operating Conditions.

4

Prospect Residential Investment Corporation
1) Structure of the Investment Corporation
Please refer to “Structure of the Investment Corporation” on page 48.
2) Management Policy and Operating Conditions(1) Management Policy
Because there have been no changes from the last Company Report (Yukashoken Hokokusho), submitted on October 25,
2007, disclosure is omitted.
(2) Operating Conditions
The Asset Management Company, as founder, filed for the establishment of PRI in accordance with theInvestment Trust and Investment Corporation Law. PRI was established on April 22, 2005 with total
capitalization of JPY 201 million, and registered on May 25, 2005 with the Kanto Local Finance Bureau(Registration No. 34). Thereafter, PRI undertook a public offering of additional investment units (74,698
units) raising JPY 34,420 million. On July 12, 2005, PRI was listed on the Real Estate Investment Trust
Section of the Tokyo Stock Exchange under the securities code 8969. To date, PRI has continued to pursue
business activities focusing on residential properties for rental purposes pursuant to its management policy.
1) Operating Conditions during the Fiscal Period under Review
A. Investment Environmenta. In the fifth fiscal period, the six-month period ended January 31, 2008, the Japanese economy
faced increased uncertainty stemming from the negative effects of the subprime loan crisis in
the United States. This was despite sustained strength, primarily in the corporate sector.
Year-on-year results reported in the monthly mining and industrial output index from June2007 onwards displayed consecutive positive numbers for three quarters from the April–Junequarter in 2007. Nevertheless, it seems increasingly likely that these figures will turn negativein the January–March quarter in 2008. The employment situation also became unclear as theunemployment rate slightly worsened to 3.8% in December 2007, rising from 3.6% in July
2007, while the number of workers with regular employment grew by more than 1.5% year on
year over the same time span. Total cash wage income, according to the Working Statistics
Survey, also showed a year-on-year decline of 1.9% as of December 2007 on a flash reportbasis. Statistical indicators for personal consumption showed only slight upward trends. With
respect to financial markets, the subprime loan crisis in the United States had various negative
effects on a worldwide basis. In particular, there were simultaneous drops in the world’s equity
markets in January 2008. The Nikkei Stock Average dropped below JPY 13,000 in late
January 2008, and the Average displayed more than 20% depreciation during the six-month
period ended January 31, 2008. While various measures were taken by the world’s financial
authorities, these moves have not yet ameliorated the negative effects and uncertainty infinancial markets.
b. From an investment perspective, competition for the acquisition of prime properties, not onlyin the Tokyo Metropolitan area, but also in other major cities, continued to be strong. This is
attributed to persistent high demand from overseas investors, including Sovereign WealthFunds, even though demand from Japan’s real estate investment trust companies andinvestment funds has peaked. The prices of residential complexes for rental purposes hoveredat a high level. There were some areas with a slight oversupply of such complexes, and it isthus unlikely that further price appreciation will occur.
c. Demand for prime rental residential properties remains firm due to the continuing shift in
population toward Tokyo and other major cities, cutbacks in corporate dormitories andhousing, as well as other factors. While certain companies that have successfully bolstered
their financial standing are undertaking development of their idle property holdings, the trend
toward large-scale leasing demand is showing signs of decline.
During the fiscal period under review, occupancy and rental rates for prime residential
properties continued to rise. Based on a survey by Recruit Co., Ltd., residential property rental
rates in the Tokyo Metropolitan area bottomed out in autumn 2005. In certain select city center
locations, rental rates have experienced a moderate increase.

5Prospect Residential Investment Corporation
B. Management Performancea. As of August 1, 2007, Prospect Residential Investment Corporation (“PRI”) managed aportfolio comprising 49 properties (3,022 rental condominiums with a total leasable floor
space of 122,495.72 m2) worth JPY 62,746 million on an acquisition price basis and for the
first time had more than 3,000 units under management at the beginning of the fiscal period.
Consistent with its basic management policy to secure steady growth and stable earnings froma medium- to long-term perspective, PRI carried out aggressive acquisition activities andacquired six properties during the fiscal period under review. Five of the six properties are
relatively new, having been completed within the past year, and therefore contributed to
improving the overall quality of the portfolio and lowering the average building age. The
majority of the six properties are located in areas in which future rental rates are expected toincrease. In descending order of acquisition date, the names of the newly acquired properties
are as follows:
Prospect KALON Minowa, Prospect Kawasaki, Prospect Nihonbashi-Koamicho, Prospect
Nakanoshima, Palais D’Or Maruyama, and Prospect Ogikubo.
In order to improve the quality of the portfolio through an active replacement strategy of
selective property purchases and sales, PRI considers selling certain properties that are either
located in highly competitive urban areas or characterized by comparatively low earnings. PRI
sold Garden City Kita-Toda in August 2007, posting a net gain on sale of JPY 84 million.
b.

As a result of its management performance in the period under review, PRI acquired six
properties worth JPY 7,723 million on an acquisition price basis, with a total leasable floor
space of 15,131.25 m2, and sold one property at a sales price of JPY 811 million, with total
leasable floor space of 3,678.83 m2. As of January 31, 2008, PRI maintained an investment
property portfolio comprising 54 properties (3,311 rental condominiums with a total leasable
floor space of 133,950.14 m2) worth JPY 69,739 million on an acquisition price basis.
Bolstering its capabilities in investment property acquisition and management, PRI will also
promote stronger ties with interested-party Prospect Co., Ltd.*(the "Sponsor Company"),
taking into account issues relating to third-party transactions and conflicts of interest. The
Sponsor Company serves as the provider of such functions as property warehousing,development and information collection. Leveraging these functions provided by the Sponsor
Company, the Investment Corporation acquires properties that have potential for highinvestment returns at favorable acquisition prices.
* Prospect Co., Ltd. is the sole shareholder of Prospect Residential Advisors Co., Ltd., the Investment
Corporation’s Asset Management Company.

The warehousing function allows the Sponsor Company to acquire a newly constructed
property on behalf of the Investment Corporation through a special purpose company. Aftersuch acquisition, the Sponsor Company conducts leasing operations and works to raise theoccupancy rate of the property. Once the occupancy rate has improved, the Investment
Corporation purchases the property at the market price. This approach reduces the Investment
Corporation’s exposure to risks associated with leasing operations.
Utilizing the warehousing functions of its Sponsor Company, Prospect Co., Ltd.*, PRI
acquired the following three properties: Prospect Kawasaki, Prospect Nakanoshima, andProspect Nihonbashi-Koamicho.
* Prospect Co., Ltd. is the sole shareholder of Prospect Residential Advisors Co., Ltd., PRI’s
Asset Management Company.
c.

Existing property management (Internal Growth)
In an effort to increase occupancy rates and profitability, PRI examined the merits of a variety
of property management companies in terms of their individual characteristics, strengths,
service contents and fees. Furthermore, property management companies were selected and6

Prospect Residential Investment Corporation
dismissed, and property management rates set and revised, based on quantitative andqualitative assessments by the Asset Management Company.
PRI also carried out large-scale renovations of SK Residence, which was constructed 17 years
ago, with earnings improving as a result.
d.

Funds procurement
In March 2007, PRI procured long-term debt financing totaling JPY 2,924 million for a periodof five years from Lehman Brothers Japan Inc., and this contributed to a strengthening of
PRI’s financial stability. PRI also executed a commitment line agreement with Aozora Bank,
Ltd. and the Norinchukin Bank in March 2007. Based on this agreement, PRI repaid JPY
1,700 million in September 2007, and procured debt financing totaling JPY 2,400 million fromthese two banks as flexible fund raising.
In July 2007, PRI received a long-term issuer credit rating of A– for long-term senior debt
from Japan Credit Rating Agency, Ltd. Then in September 2007, PRI submitted a“Registration for Issuance of Investment Corporation Bonds” to the Kanto Finance Office of
the Financial Services Agency, applying for a maximum issuance of JPY 50,000 million.
Based on this registration, PRI issued the first series of unsecured investment corporation
bonds of JPY 5,000 million in October 2007. As of July 31, 2007, the balance of debt
financing was JPY 37,558 million, and the ratio of interest-bearing debt to total assets was
50.5%.
Subsequently, PRI concluded an interest swap contract covering the entire investment
corporation bonds issue totaling JPY 5,000 million. As a result, the interest rate for the
two-year bond issue has been fixed at 2.183%. In July and August 2007, PRI concluded four
contracts for the purchase of yen interest rate caps covering a total of JPY 20,000 million in
debt financing (bank borrowings), with the goal of hedging against the risk of increases ininterest rate.
* The rating of long-term senior debts represents an assessment of an obligor’s financial capacity to pay
their overall financial obligations. This rating differs from ratings concerning specific financial
obligations, which take into account the nature and provisions of the obligation and its senior/subordinate
status, as well as the obligor’s standing in terms of bankruptcy or liquidation. (Source: JCR’s English
Web site)For further details of the rating, please refer to JCR’s Web sites: http://www.jcr.co.jp/english/ (English);http://www.jcr.co.jp/ (Japanese)e.
PRI and PRA have been studying various measures, supported by a financial advisor, aiming
at attaining remarkable growth in PRI’s corporate value, including asset growth and astrengthening of its fundamentals. Such advisory fees and related expenses were posted as
non-operating expenses.
C. Operating Results and Cash Distribution
Accounting for the aforementioned factors, operating revenues totaled JPY 2,330 million in thefiscal period ended January 31, 2008. Ordinary income was JPY 663 million while net income
amounted to JPY 622 million.
PRI distributes the total amount of its inappropriate retained earnings for each period. Accordingly,
cash distribution for the third fiscal period was JPY 8,820 per unit (rounded down to the nearestyen).
2) Outlook
A. Operating Environment
From an investment perspective, we forecast that competition for the acquisition of prime
properties, not only in the Tokyo Metropolitan area, but also other major cities, will continue to be7

Prospect Residential Investment Corporationstrong. This forecast is attributed to persistent high demand from overseas investors, including
Sovereign Wealth Funds, even though demand from Japan’s real estate investment trust companies
and investment funds has peaked. The prices of residential complexes for rental purposes hoveredat a high level. Against the background of a deteriorating condominium sales market, it would bepossible for condominium developers to shift to sales of condominiums as complexes for leasing
purposes, although this would create some negative factors for complex prices.in late 2008 and2009.
The price increase in rental properties in Tokyo has not, however, extended across Japan. Impacted
by the high level of supply since 2006, certain regional areas are experiencing slight excesses.
Rental rates for residential properties are currently increasing only in select areas, but increasing
rates are anticipated to gradually spread into other areas.
B. Acquisition of New Properties (External Growth)
Under these circumstances and in addition to trust banks that have traditionally served as a key
source of information, PRI will foster a wide variety of relationships with the aim of collecting
invaluable property information. Through these means, PRI will pursue the acquisition of prime
properties from a medium- to long-term perspective.
In an effort to expand its asset scale, and taking into consideration future increases in interest rates,
PRI will focus on properties that can generate profit growth and provide a basis for improved cash
distribution.
Utilizing the functions provided by Prospect Co., Ltd., PRI’s Sponsor Company, such as property
warehousing, development and information collection, PRI will acquire properties with highinvestment values at appropriate prices. PRI will also step up efforts in connection with due
diligence and place the utmost priority on tenant and investor satisfaction.
C. Property Management (Internal Growth)
Carrying on from the previous fiscal period, PRI shall examine the merits of a variety of property
management companies in terms of their individual characteristics, strengths, service contents andfees. Based on a philosophy of strict competition, PRI shall select property management companies
that can contribute to increasing occupancy and profitability. Furthermore, PRI will continue to
implement checks by internal specialists including first-class architects with the aims of reducing
costs and securing the increased trust of tenants and investors.
D. Financial Strategy
PRI aims to carry out flexible procurement of short- and long-term loans with conservative LTV(Loan To Value) level while broadening the types of lenders and diversifying repayment dates. PRI
will work to extend the repayment periods of debt and to obtain fixed-interest rates by continuing toissue the second series Investment Corporation bonds in the future.
(3) Important Subsequent Events
1) Property Sales
Property Code
Property Name
Location(Address)
Sales Price (Note 1)
Book Value (Note 2)
Expected Profit From
Sale of Real Estate
Expected Sales Date

S003
Maison de Ville Azabudai
2-3-7 Azabudai, Minato-ku, Tokyo
JPY2,956 million
JPY2,790 million
Approximately JPY160 million
April 23, 2008

Note 1: Excluding fixed-asset tax, city planning tax, and consumption taxes.
Note 2: As of January 31, 20088

Prospect Residential Investment Corporation(4) Forecast of Revenues and Earnings
Forecast of revenues and earnings for the fifth fiscal period (August 1, 2007 to January 31, 2008) is as follows. These
forecasts are based on “Assumptions for Forecasts for the Fifth Fiscal Period” mentioned afterwards.
Forecast of revenues and earnings for the sixth fiscal period (February 1, 2008 to July 31, 2008)
Operating revenues
JPY2,491 million
Ordinary income
JPY 679 million
Net income
JPY 678 million
Distributions per unit
JPY9,039
Note: Forecasts for operating revenues, ordinary income, net income and distributions per unit may differ from actual results due tochanges in the operating environment and a variety of factors. Accordingly, PRI does not guarantee any distribution amount.

Assumptions for Forecasts for the Sixth Fiscal Period (February 1, 2008 to July 31, 2008)

Operating Period
Managed Assets

Investment Units
IssuedInterest-Bearing
Debt Ratio

Operating Expenses

Assumptions
Sixth fiscal period: From February 1, 2008 to July 31, 2008 (184 days)
Forecasts are based on a property portfolio comprising 53 properties held as of January 31,
2008. This total excludes one property sold as of the date of this report (please refer to page 7
and 8 for details). The property portfolio may change, however, due to property acquisition or
sale.
Forecasts are based on the assumption that PRI shall not issue additional investment units.
The interest-bearing debt ratio as of January 31, 2008 was 52.0%. Forecasts are, however,based on an interest-bearing debt ratio of approximately 51.0% as of July 31, 2008, taking into
account an increase in debt financing to acquire additional properties as well as repayment
stemming from the above sale of one property.
The interest-bearing debt ratio is calculated as follows:
Interest-bearing debt ratio = Interest-bearing debt ÷ (Interest-bearing debt + Unitholders’capital) × 100
Of the amount of property tax and city planning tax assessed for the property portfolio, theapplicable portion is recorded as rental business expenses for each fiscal period. For properties
acquired during each period, property tax and city planning tax are allocated to the seller andpurchaser on a pro rata basis at the time of acquisition settlement. In the case of PRI, anamount equivalent to the portion allocated to the purchaser is included in the acquisition priceof the property and not recorded as an expense.
Repairs, maintenance and renovation expenses are estimated based on amounts consideredessential for each property for each fiscal period. Actual repairs, maintenance and renovation
expenses for each fiscal period, however, may differ significantly from these amounts due tounforeseen circumstances or emergencies. Forecasts are based on the assumption that PRI shallpost repairs, maintenance and renovation expenses of JPY 72 million (an increase of JPY 11
million compared with the previous fiscal period) and shall post property tax and city planningtax of JPY 107 million (an increase of JPY 29 million).

Non-Operating
Expenses
Cash Distribution

Depreciation is calculated using the straight-line method inclusive of incidental expenses.
Forecasts are based on the assumption that PRI shall post depreciation expenses of JPY 496
million (an increase of JPY 13 million compared with the previous fiscal period).
Forecasts are based on the assumption that PRI shall post total interest expenses and related
expenses of JPY 330 million (an increase of JPY 26 million compared with the previous fiscal
period).
Forecasts are based on the assumption that PRI shall distribute the full amount of retained
earnings each fiscal period in line with its distribution policy. Forecasts are also based on theassumption that PRI shall not undertake distribution in excess of earnings.

9

Prospect Residential Investment Corporation
3) Financial Statements(1) Balance Sheets(Thousands of yen)
Notes
ASSETS
ＩCurrent assets
Cash and deposits
Entrusted cash and deposits
Rental receivables
Prepaid expenses
Deferred tax assets
Consumption tax and otherreceivables
Derivative assets
Other current assets
Total current assets
II Fixed assets
1. Property and equipment:
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Entrusted buildings
Accumulated depreciation
Entrusted structures
Accumulated depreciation

＊1

＊1
＊1
＊1
＊1
＊1
＊1
＊1

Entrusted machinery andequipment

Accumulated depreciation
Entrusted tools, furniture and fixtures

Accumulated depreciation
Entrusted land
Total property and equipment

2. Intangible assets:
Other intangible assets
Total intangible assets
3. Investments and other assets:Long-term prepaid expenses
Deferred tax assets
Leaseholdanddeposits received

security

Long-term derivative assets
Total investments
other assets

Total fixed assets
III. Deffered assets:

andFourth Fiscal Period(As of July 31, 2007)＊1

846,350
56,785
417
195
6,189
1,582
315
25

Fifth Fiscal Period(As of January 31, 2008)

1,671,760
1,652,851
22,309119,950
9,437

1,122,528
1,841,193
24,663
104,425
2,344

78,412
3,258
1,291
3,559,271−
844
11,0093,107,008

5.3

857,92273,780
1,131
252
6,189
1,978
2,835
90

789,565
222
4,606
289
794,545

28,268,874
1,321,531 26,947,342
115,899
19,36896,530257,481
53,776
203,705
37,881
4,682
33,19934,940,138

Increase(Decrease)

4.2 △452,262△12.7

784,141
879
4,211
2,744
794,545

32,525,381
1,734,521 30,790,860
141,241
23,654
117,587
320,034
67,001
253,032
44,116
7,788
36,32838,187,083

63,810,145

94.4

70,971,413

95.5

7,161,268

11.2

5,168
5,168

0.0

4,447
4,447

0.0

△721

△14.0

0.3
95.8

19,7209.2

7,180,266

11.2

136,940-

117,133
50,26011,382
66,55638,35228,852214,879
64,030,194

10

0.3
94.7

234,599
71,210,460

Prospect Residential Investment Corporation
Expenses to issue Investment
Corpration Bonds
Total deffered assets−−

Total assets

Notes

LIABILITIESＩ Current liabilities
Operating payables
Short-term debt
Other payables
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Other current liabilities
Total current liabilities
II Long-term liabilities
Investment Corporation Bonds
Long-term debt

＊1

Leasehold and security deposits
Total long-term liabilities
Total liabilities＊2
NET ASSETS
I Unitholders’ capital
1. Unitholders’ capital
Unitholders’ capital
2. Retained earnings
Unappropriated retained
earnings for the period
Total retained earnings
Total unitholders’ capital
II Evaluation and conversions
1. Earnings on deferred hedgetransactions
Total evaluation andconversions
Total net assets
Total liabilities and net assets

26,020−26,02067,589,465 100.0

74,343,489

Fourth Fiscal Period(As of July 31, 2007)

84,2498,800,000
33,006
189,811
1,030−
224,786255
9,333,141

13.8

Fifth Fiscal Period(As of January 31, 2008)

123,753
8,000,000
65,337244,398602
12,342259,530
189
8,706,154

0.0−

26,020100.0 6,754,024(Thousands of yen)

10.0

Increase(Decrease)

11.7△626,986△6.7

22,134,000

5,000,000
24,558,000

805,398
22,939,398
32,272,539

33.9
47.7

876,02230,434,022
39,140,177

40.9

7,494,624

32.7

52.6

6,867,638

21.3

34,621,838

51.2

34,621,838

46.6

−

−

1.1
52.3

662,390662,390
35,284,228

0.9
47.5

△47,174△47,174△6.6△0.1△14,476 △0.0
35,316,925 52.3

△80,916 △0.1
35,203,312 47.4

△66,439−△113,613△0.3

67,589,465 100.0

74,343,489 100.0

6,754,024

10.0

709,564
709,564
35,331,402△14,476

11△80,916

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

Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to
January 31, 2008)

Increase(Decrease)

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

Other rental revenues
Gain on sale of real estate＊2

1,884,684

2,157,743

117,059

89,150146,548

2,148,292 100.0

84,0532,330,947 100.0

182,654

8.5

1,273,198

54.6

96,9318.2

1,057,748

45.4

85,723

8.8

3,919

0.2

3,019

335.4

398,30717.1

136,116

51.9

II. Operating Expenses
Real estate rental expenses＊1

918,295

984,820132,273

147,748

Custodian fees

3,181

3,613

Administrative service fees

20,24921,722

Directors’ fees

4,800

6,000

Other operating expenses

97,467

Asset management fees

Operating income

1,176,267

54.8

972,02545.2

109,294

III. Non-Operating Income
Interest income

883

2,187

Additional refunds

−

1,335

Other non-operating income

16

900

0.0

396

IV. Non-Operating Expenses
Interest expense

172,163

265,286

Bonds interest expense−

33,193

Bonds issuance expense

−

4,726

Debt-related expenses

87,332

92,626

Other non-operating expenses

2,693

262,190

12.2

Ordinary income

710,735

33.0

663,36128.5△47,374△6.7

Income before income taxes

710,735

33.0

663,36128.5△47,374

△6.7

990

0.0

△192

△16.3

662,37028.4△47,182△6.6

Income taxes

1,191

Deferred taxes△9

Net income
Retainedearnings
forward

2,473

979
1,182

0.0

709,552

33.0

10

brought

Retained earnings at the end of
the period

11

19

8

71.8

709,564

662,390△47,174△6.6

12

Prospect Residential Investment Corporation(3) Statement of Changes in Net Assets(February 1, 2007 to July 31, 2007)

Unitholders’ Capital
Retained Earnings
Unitholders’Capital*1
Balance as of theprevious fiscal
period-end
Movements during
the fiscal period
ended July 31,
2007
Issue
of
new
investment units
Distributionofretained earnings
Net income
Net change due toitems other thanunitholders’ capital
Total
Balance as of July
31, 2007

UnappropriatedRetained
Earnings

Total
Retained
Earnings

Total
Unitholders’Capital(Thousands of yen)
Evaluation andConversions
Earnings
Total Net
Total
(Loss) on
Assets
Evaluation
DeferredandHedge
Conversions
Transactions

34,621,838

743,576

743,576

35,365,414

2,962

2,962

35,368,377−△743,565△743,565△743,565−−△743,565−−

709,552−

709,552−

709,552−−△17,438−△17,438

709,552△17,438−
34,621,838△34,012709,564△34,012709,564△34,01235,331,402△17,438△14,476△17,438△14,476△51,451
35,316,925

34,621,838

743,576

743,576

35,365,414

2,962

2,962

35,368,377(August 1, 2007 to January 31, 2008)

Unitholders’Capital*1
Balance as of theprevious fiscal
period-end
Movements during
the fiscal period
ended January 31,
2008
Issue
of
new
investment units
Distributionofretained earnings
Net income
Net change due toitems other thanunitholders’ capital
Total
BalanceasofJanuary 31, 2008

Unitholders’ Capital
Retained Earnings
Unappropriated
Total
Retained
Retained
Earnings
Earnings

Total
Unitholders’Capital(Thousands of yen)
Evaluation andConversions
Total Net
Earnings on
Total
AssetsDeferred
Evaluation
Hedge
and
Transactions Conversions

34,621,838

709,564

709,564

35,331,402△14,476△14,476

35,316,925−△709,544△709,544△709,544−−△709,544−−

662,370−

662,370−

662,370−−△66,439−△66,439662,370△66,439△66,439△66,439−
34,621,838△47,174
662,390△47,174
662,390△47,174
35,284,228△80,916△80,916△113,613
35,203,312

34,621,838

709,564

709,564

35,331,402△14,476△14,476

35,316,925

13

Prospect Residential Investment Corporation(4) Basis for Calculating Cash Distribution
Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)
I

Unappropriated retained earnings
at the end of the fiscal period
II Total distribution(Distribution per unit)
III Retained earnings carried forward
Method of Calculating the Amountof Distribution(Yen)
Fifth Fiscal Period(August 1, 2007 to
January 31, 2008)

709,564,207

662,390,183

709,544,800

662,382,000（9,448）19,407（8,820）8,183

PRI determines the amount of
distribution in accordance with
Article 34.1 of its Articles ofIncorporation. The amount must
exceed 90% of distributable
income as stipulated in Articles
67.15 of the Special Taxation
Measures Law.

PRI determines the amount of
distribution in accordance with
Article 36.1 of its Articles ofIncorporation. The amount must
exceed 90% of distributable
income as stipulated in Articles
67.15 of the Special Taxation
Measures Law.

PRI has therefore decided to
distribute the maximum amountof retained earnings at the end of
the period: JPY 709,544,800 to
75,100units
issuedandoutstanding. Procedures for the
distributionofamounts
exceeding distributable income
are outlined in Article 34.1-4 of
PRI’s Articles of Incorporation.
PRI decided not to distributecash in excess of distributable
income for the fiscal period.

PRI has therefore decided to
distribute the maximum amountof retained earnings at the end of
the period: JPY 662,382,000 to
75,100units
issuedandoutstanding. Procedures for the
distributionofamounts
exceeding distributable income
are outlined in Article 34.1-4 of
PRI’s Articles of Incorporation.
PRI decided not to distributecash in excess of distributable
income for the fiscal period.

14

Prospect Residential Investment Corporation(5) Statements of Cash Flows(Thousands of yen)
Fourth Fiscal Period(February 1, 2007 to
July 31, 2007)
I Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Interest income
Amortization for issuance expense ofinvestment corporation bonds
Interest expense
Decrease (increase) in operating receivables
Decrease in other receivables
Decrease in consumption tax and otherreceivables(Increase) decrease in prepaid expenses(Decrease) increase in operating payables
Decrease in other payables
Increase in accrued consumption taxes(Decrease) increase in accrued expenses(Decrease) increase in advances received
Decrease in long-term prepaid expenses
Loss on sale of entrusted property andEquipment
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities
II Cash flows from investing activities:
Payments for the purchase of property andEquipment
Payments for the purchase of entrusted
property and equipment
Payments for leasehold and security deposits
Proceeds from leasehold and security
deposits received
Payments for leasehold and security deposits
Received
Net cash used in investing activities
III Cash flows from financing activities:
Proceeds from short-term debt
Payments of short-term debt
Proceeds of long-term debt
Payments of long-term debt
Proceeds of investment corporation bonds
Payments for issuance expense ofinvestment corporation bonds
Payments for distributions to unitholders
Net cash (used in) provided by financing
Activities
IV Net change in cash and cash equivalents
VI Cash and cash equivalents at the beginningof the period
VI Cash and cash equivalents at the end of
the period

Fifth Fiscal Period(August 1, 2007 to
January 31, 2008)

Increase(Decrease)710,735
417,583△883

663,361
483,370
4,726△47,374
65,786
4,726−
172,163△883△556△2,187△1,303

298,479△2,353
1,042
78,412

126,316△1,4701,599
156,824

15,52486
31,05012,342
25,48834,74319,80628,443△12,381
40,675
164,360△3,952
21,134
156,746

932,423△93,595
1,802,591
883△172,163△1,127
1,630,184

724,903△69,715
2,319,082
2,187△269,380△1,4182,050,470△207,520
23,879516,490
1,303△97,216△291
420,286△290△5,879△5,588△11,415,292△176△8,323,524△37,570

3,091,767△37,393

166,838

138,658△28,179△94,142△11,343,063△68,033△8,296,348

26,1083,046,714

19,700,000△30,926,432
22,634,000△500,000−

2,400,000△3,200,000
2,924,000△500,000
5,000,000△17,300,000
27,726,432△19,710,000−
5,000,000−△744,010△30,747△30,747△708,264

35,745

10,163,557

5,884,988△4,278,569

450,678△360,889△811,568

2,873,933

3,324,611

450,678

3,324,611
15

2,963,721△360,889△78,412△12,918
12,468△9,625△152,017
29,44013,608△136,940

Prospect Residential Investment Corporation(6) Notes for Items Related to Important Accounting Policies
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)
1. Depreciation
method for fixed
assets2.
Accounting
standards to post
revenues
andexpenses

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)(1) Tangible fixed assets (including entrusted (1) Tangible fixed assets (including entrusted
assets)assets)
The straight-line method has been adopted. Same as fourth fiscal period
Estimated years of use for major tangible
fixed assets are as follows:
Buildings
3 – 58 years
Structures
2 – 45 years
Machinery and equipment 3 – 15 years
Tools, furniture, and fixtures 3 – 15 years(2) Intangible fixed assets
The straight-line method has been adopted.

(2) Intangible fixed assets
Same as fourth fiscal period(3) Long-term prepaid expenses
The straight-line method has been adopted.

(3) Long-term prepaid expenses
Same as fourth fiscal period

Method to post fixed asset taxes and other Method to post fixed asset taxes and other
taxes
taxes
In terms of fixed asset taxes, city planningtaxes, depreciable taxes, and others levied onholding real estate and others, the tax amountto be paid in this period is posted as expenses
in the period.

In terms of fixed asset taxes, city planningtaxes, depreciable taxes, and others levied onholding real estate and others, the tax amountto be paid in this period is posted as expenses
in the period.

In terms of settled amounts for fixed asset
taxes and other taxes for the first year in thecase of acquiring real estate or trust
beneficiary rights (with real estate as
entrusted assets) from sellers, such amounts
are not posted as expenses but included inbook values at the time of acquisition of such
real estate or trust beneficiary rights.

In terms of settled amounts for fixed asset
taxes and other taxes for the first year in thecase of acquiring real estate or trust
beneficiary rights (with real estate as
entrusted assets) from sellers, such amounts
are not posted as expenses but included inbook values at the time of acquisition of such
real estate or trust beneficiary rights.

Such fixed assets and other taxes included inbook values at the time of acquisition of such
real estate and trust beneficiary rights totaled
JPY 200,075 thousand.

Such fixed assets and other taxes included inbook values at the time of acquisition of such
real estate and trust beneficiary rights totaled
JPY 4,599 thousand.

16

3.
Hedge
accounting
methodProspect Residential Investment Corporation(1) Hedge accounting method
Deferred hedge method. In the cases ofinterest swaps meet conditions for special
treatment, special treatment is adopted.

(1) Hedge accounting method
Deferred hedge method(2) Hedge type and objective
Hedge typeInterest rate swap transaction
Interest rate cap transaction
Hedge objective
Interest payment on borrowing(2) Hedge type and objective
Same as fouth fiscal period(3) Hedge policy(3) Hedge policy
PRI carries out derivative transactions to Same as fouth fiscal period
hedge risks based on its risk management
policy and in accordance with the Articles of
the Investment Corporation.
(4) Method to evaluate effectiveness ofhedge accounting
PRI judges the effectiveness of hedge
accounting based on such indicators asaccumulated cash flow changes incomparison with hedging objects andhedging methods, during commence ofhedge and the time to judge effectives.

4. Compositionof cash and cash
equivalents
inthe statements ofcash flows(4) Method to evaluate effectiveness ofhedge accounting
PRI judges the effectiveness of hedge
accounting based on such indicators asaccumulated cash flow changes incomparison with hedging objects andhedging methods, during commence ofhedge and the time to judge effectives. In thecases of interest swaps meet conditions for
special treatment, effective judgement isomitted.

Cash and cash equivalents in the statements Same as fourth fiscal periodof cash flows consist of cash in hand,
entrusted cash, cash and entrusted deposits
that can be withdrawn easily, and short-term
investments redeemable within three months
from acquisition that pose minimal risk ofvalue fluxuations and are easily convertible
to cash.

17

5.
Other
important items
for the basis ofcompilingfinancialstatements

Prospect Residential Investment Corporation(1) Accounting method with respect to trust (1) Accounting method with respect to trust
beneficiary rights to real estate and other beneficiary rights to real estate and otherentrusted assets
entrusted assets
With respect to trust beneficiary rights to real Same as fourth fiscal period
estate and other entrusted assets, all of theasset and liability items within entrusted
assets as well as all revenue and expense
items generated from entrusted assets areposted in the corresponding items in thebalance sheets and statements of income.
Among entrusted asset items posted in suchcorresponding items, the following important
items are posted independently in thebalance sheets.
1) Entrusted cash and entrusted
deposits
2) Entrusted buildings,
entrusted
structures, entrusted machinery andequipment,
entrusted
tools,
furnitureandfixtures,andentrusted land
(2) Accounting method for consumption tax (2) Accounting method for consumption tax
and others
and others
The accounting method for consumption tax Same as fourth fiscal period
and local consumption tax is the
tax-exclusive
method.
Undeductableconsumption taxes for asset acquisition are
included in book values at the time of each
respective asset acquisition.

18

Prospect Residential Investment Corporation(7) Notes to the Financial Statements[Notes for the Balance Sheets]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)

Note 1. Assets put up for collateral or assets put up for Note 1. Assets put up for collateral or assets put up forcollateral of secured debt are as follows:collateral of secured debt are as follows:(Thousands(Thousandsof yen)of yen)Entrustedcash
andEntrustedcash
and1,652,851
1,724,166
entrusted deposits
entrusted deposits
Buildings
789,565
Buildings
784,141
Structures
222
Structures
879
Machinery
andMachinery
and
4,606
4,211
equipment
equipment
Tools, furniture andTools, furniture and
289
2,744
fixturesfixtures
Entrusted buildings
794,545
Entrusted buildings
794,545
Entrusted buildings
26,947,342
Entrusted buildings
26,983,714
Entrusted structures
96,530
Entrusted structures
98,231
Entrusted machinery and
Entrusted machinery and203,705
214,030
equipment
equipment
Entrusted tools, furniture
Entrusted tools, furniture
33,19936,091and fixturesand fixtures
Entrusted land
34,940,138
Entrusted land
35,495,345
Total
65,462,997
Total
66,138,101
Secured debt with collateral are as follows:
Short-term debt
Long-term debt
Total

Secured debt with collateral are as follows:

8,800,000
22,134,000
30,934,000

Short-term debt
Long-term debt
Total

Note 2. Commitment line contracts
PRI has commitment line contracts with client banks(Thousands of yen)
Total of commitment line contracts
7,000,000
Loan balance at the end of
the third fiscal period
5,300,000
Balance of unused contract
at the end of the third fiscal period
1,700,00

8,000,000
24,558,000
32,558,000

Note 2. Commitment line contracts
PRI has commitment line contracts with client banks(Thousands of yen)
Total of commitment line contracts
7,000,000
Loan balance at the end of
the third fiscal period
6,000,000
Balance of unused contract
at the end of the third fiscal period
1,000,000

Note 3. Minimum net assets set by Article 67.4 of the Note 3. Minimum net assets set by Article 67.4 of theInvestment Trust and Investment Corporation Law
Investment Trust and Investment Corporation Law
JPY 50,000 thousand

Same as fourth fiscal period

19

Prospect Residential Investment Corporation[Notes to the Statements of Income]Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)

Note 1. Breakdown of real estate rental revenues and Note 1. Breakdown of real estate rental revenues and(Thousands of yen)earnings(Thousands of yen) earnings
A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
1,717,265
Common area maintenance
71,603fee revenues
Parking revenues
71,865
Other related revenues
23,949Other rental revenues
Other rental revenues
117,059
Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
160,810expenses
Repair expenses
79,776
Water, electricity, and other38,534
rates
Taxes
81,482
Insurance premiums against
7,098
lossesTrust fees
34,865
Depreciation expenses
416,862
Other rental expenses
98,864
Total real estate rental
expenses
C. Real estate rental business earnings (A –B)

A. Real estate rental
revenues
Real estate rental revenues
Rental revenues
1,974,742
Common area maintenance
77,776fee revenues
Parking revenues
79,267
Other related revenues
25,956
Other rental revenues
Other rental revenues
89,150Total real estate rental
revenues
B. Real estate rental
expenses
Real estate rental expenses
Property
management
160,806
expenses
Repair expenses
61,338Water, electricity, and other
43,563rates
Taxes
78,672
Insurance premiums against
8,105
lossesTrust fees
45,711
Depreciation expenses
482,648
Other rental expenses
103,973
Total real estate rental
expenses
C. Real estate rental business earnings (A –B)

1,884,684
117,059
2,001,744

918,295
918,295
1,083,448

2,157,743
89,1502,246,894

984,820984,820
1,262,073

Note 2. Breakdown of real estate rental revenues and Note 2. Breakdown of real estate rental revenues andearnings(Thousands of yen)earnings(Thousands of yen)
O Fort Nishi-Kasai
Revenues from sale ofreal estate and others
Book value for sold realestate and others
Other expenses for sales
Profit from sale of realestate and others

Garden City Kita-Toda
Revenues from sale ofreal estate and others
Book value for sold realestate and others
Other expenses for sales
Profit from sale of realestate and others

1,080,000
932,423
1,027
146,54820

811,100
725,167
1,878
84,053

Prospect Residential Investment Corporation[Notes to the Statement of Changes in Net Assets]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)

Note 1. Total number of investment units authorized for Note 1. Total number of investment units authorizedissuance and outstanding
for issuance and outstanding
Total number of investment units
Same as fourth fiscal periodauthorized for issuance
2,000,000
Total number of investment units
outstanding
75,100[Notes to the Statement of Cash Flows]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)

Note 1. Relationship between cash and cash
equivalents at the end of the period and items posted on
the balance sheets
As of July 31, 2007 (Thousands of yen)
Cash and deposits
1,671,760
Entrusted cash and entrusted deposits
1,652,851
Cash and cash equivalents
3,324,611

Note 1. Relationship between cash and cash
equivalents at the end of the period and items postedon the balance sheets
As of January 31, 2008 (Thousands of yen)
Cash and deposits
1,122,528
Entrusted cash and entrusted deposits
1,841,193
Cash and cash equivalents
2,963,721(Disclosure is omitted for notes regarding lease transactions, derivatives transactions and others because of small
necessity to disclose in this Financial Report <Kessan Tanshin>)[Notes regarding information per investment unit]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)

Net assets per investment unit
JPY 470,265
Net assets per investment unit
JPY 468,752
Net income per investment unit
JPY 9,448
Net income per investment unit
JPY 8,820
Because there are no latent investment units, PRI does Same as third fiscal period
not record net income per investment unit after
adjustment of latent investment units.
Note: Net income per investment unit is calculated using the following average investment units in the respective
periods.
Average investment units in the third and fourth fiscal periods:
Fifth fiscal period (August 1, 2007 to January 31, 2008): 75,100 (no changes during the period)
Fourth fiscal period (February 1, 2007 to July 31, 2007): 75,100 (no changes during the period)

Net income
Net income not distributed
unitholders
Net income distributed tounitholders
Average number of units

toFourth Fiscal Period(February 1, 2007 to
July 31, 2007)(JPY thou)
709,552-

21

Fifth Fiscal Period(August 1, 2007 to
January 31, 2008)(JPY thou)
662,370-

709,552

662,370

75,100 units

75,100 units

Prospect Residential Investment Corporation[Notes regarding subsequent events]
Fourth Fiscal Period(February 1, 2007 to July 31, 2007)

Fifth Fiscal Period(August 1, 2007 to January 31, 2008)

1. Property Sales
PRI carried out the following sale of property
Garden City Kita-Toda
Sales Price
JPY811 million
Contract Date
July 19, 2007
Sales Date
August 31, 2007
Buyer
Chuo Jutaku Co. Ltd
Profits from real estate sale of approximately JPY 80
million to be posted as revenues

1. Property Sales
PRI carried out the following sale of property
Maison de Ville Azabudai
Sales Price
JPY2,956 million
Contract Date
February 15, 2008
Expected Sales Date April 23, 2008
Buyer
Phillip Estate Co. Ltd
Profits from real estate sale of approximately JPY 160
million to be posted as revenues

2. Debt Financing
PRI undertook the following debt financing after July
31, 2007
LenderLehman Brothers Japan Inc.
Drawdown Date September 7,2007
Debt Financing JPY 2,924 million
Repayment method
Repayment as a lump sum on repayment date
Interest Rate
1.78917%(Floating)Maturity Date
October 31, 2012
Lenders

Aozora Bank, Ltd.,The Norinchukin Bank
September 7, 2007
JPY 2,400 million

Drawdown Date
Debt Financing
Repayment method
Repayment as a lump sum on repayment date
Interest Rate
1.78917%(Floating)Maturity Date
September 5, 2008
3. Debt Repayment
PRI undertook the following debt repayment after July
31, 2007(1) Long-term debt
Lenders
Aozora Bank, Ltd.,
Sumitomo Mitsui Banking Corporation
The Sumitomo Trust & Banking Corporation
The Norinchukin Trust & Bankig Co.,Ltd
The Musashino Bank, Ltd.
NTT Finance Corp.
Debt Repayment
JPY 500 million
Drawdown Date
March 15, 2007
Repayment Date
August 31, 200722

Prospect Residential Investment Corporation(2) Short-term debt
LenderMitsubishi UFJ Trust andCorporation
Debt Repayment
JPY 3,940 million
Drawdown Date
March 30, 2007
Repayment Date
September 7,2007
Lenders
Aozora Bank, Ltd.,The Norinchukin Bank
Debt Repayment JPY 1,700 million
Repayment Date
September 7, 2007
Drawdown Date
April 16, 2007

Banking(8) Changes in total investment units outstanding
Public and private offerings from the establishment of PRI to the end of the fourth fiscal period (ended July 31, 2007)
are as follows:

Date

Type

April 22, 2005

Total investment units
outstanding (unit)
ChangeBalance402
402

Paid-in capital(Millions of yen)
ChangeBalance
201
201

Notes

Established by private（Note 1）
offering
July 12, 2005
Public offering
74,69875,10034,42034,621（Note 2）
Note 1: PRI’s investment units were set at JPY 500,000 per unit at the time of establishment.
Note 2: PRI issued new investment units priced at JPY 480,000 per unit (underwritten price set at JPY 460,800) througha public offering for the purpose of raising funds mainly for the new acquisition of property.

1.

Officers and directors

Officers of PRI are as follows:

Title

Executive
OfficerSupervising
Officer

Name

Takeo
Nishiyoshi

ChikaoNomuraNumber ofInvestment
Units Held

Career Summary
Apr.
1988

Entered the Supreme Court Legal Training and Research Instituteof Japan

Apr.
1990

Admission to the Bar (The Daini Tokyo Bar Association)
Entered the law firm Saruyama & Fujimaki

Jun.
2004

Opened the law firm Saruyama, Nishiyoshi & Sasaki (present
post)

Apr.
2007

Appointed Executive Officer, Prospect Residential Investment
Corporation (present post)

Apr.
1992

Entered the Management and Coordination Agency in Japan

Apr.
2003

Entered the Supreme Court Legal Training and Research Instituteof Japan

Oct.
2004

Admission to the Bar (The Daiichi Tokyo Bar Association)
Entered Hiroshi Hori Law Firm (currently Hori Law Firm)(present post)

Apr.
2005

Appointed Supervising Officer, Prospect Residential Investment
Corporation (present post)

23

0

0

Oct.
1982

Supervising
Officer

Kazuhiko
Chiba

Prospect Residential Investment Corporation
Entered the auditing firm Arthur Anderson in Japan (currently
KPMG AZSA & Co.)

Aug.
1988

Registered as a certified public accountant

May
2000

Appointed Managing Partner of Asahi & Co. (currently KPMG
AZSA & Co.)

Apr.
2004

Appointed Representative Director of AP Outsourcing Ltd.
(present post)

Jun.
2004

Registered as a certified public tax accountant

Apr.
2005

Appointed Supervising Officer, Prospect Residential Investment
Corporation (present post)0

Directors of the Asset Management Company are as follows:
Title

Name

Number of
Shares Held

Career Summary
Apr. Entered Yasuda Life Insurance Company (currently Meiji
1973 Yasuda Life Insurance Company)
Apr.
Seconded to Paine Webber Securities Company
1988
Apr. Appointed Manager of International Finance Section,
1991 International Investment Department, Yasuda Life Insurance
Company
Apr. Appointed Deputy General Manager of Market Finance1997 Department, Yasuda Life Insurance Company
Apr. Appointed Deputy General Manager of Pension Fund1999 Administrative Department, Yasuda Life Insurance Company

Representative
Director andPresident

Takeshi Maki

Apr. Appointed General Manager of Pension Fund Investment
2000 Department, Yasuda Life Insurance Company
Appointed Director and General Manager, Tokyo Realty
Jul.
Investment Management Co., Ltd (seconded from Yasuda
2001
Life Insurance Company)
Resigned Director and General Manager, Tokyo Realty
Apr.
Investment Management Co., Ltd as well as Yasuda Life
2006
Insurance Company
May
Appointed Adviser, Prospect Residential Advisors Co., Ltd
2006
Jun. Appointed Representative Director and President, Prospect
2006 Residential Advisors Co., Ltd (present post)
Apr. Appointed Substitute Executive Officer, Prospect Residential
2007 Investment Corporation24-

Prospect Residential Investment Corporation
Entered Mitsui Trust and Banking Corporation (currently
Apr. 1987
Chuo Mitsui Trust and Banking Corporation)
Apr. 1992

Seconded to Proper Real Estate Transaction Promotion
Foundation

Apr. 1999 Appointed Manager of Development Business Group, Real
Estate Department, Head Office, Mitsui Trust and Banking
Corporation
DirectorandGeneralManager of Yasushi Yoda
Investment
Department

Apr. 1999 Appointed Manager, Asset Finance Sales Department,
Mitsui Trust and Banking Corporation
Jul. 2001

Appointed General Manager of Finance Department,
Prospect Co., Ltd

Jul. 2003

Appointed Representative Director and President, ProspectCo., Ltd

Jul. 2004

Appointed Director and General Manager of Investment
Department, Prospect Co., Ltd

Sep. 2004

Appointed Director and General Manager of Investment
Department, Prospect Residential Advisors Co., Ltd-

Appointed Director, General Manager of Investment
Jun. 2006 Department, and General Manager of Finance Department,
Prospect Residential Advisors Co., Ltd
Jun. 2007

Appointed Director and General Manager of Investment,
Prospect Residential Advisors Co., Ltd (present post)

Apr. 1988 Entered Nikko Securities Co., Ltd.
Sep. 1989 Entered Shearson Lehman Brothers Securities Co., Ltd.

Director(part-time)

Curtis Freeze

June 1990

Entered DB Morgan Grenfell Asset Management as SeniorFund Manager

Sep. 1994

Established Prospect Asset Management (USA), appointed
as Director-

June 2003 Appointed Director of Prospect Co., Ltd.
Sep. 2004

Appointed Director of Prospect Residential Advisors Co.,
Ltd. (present post)

Nov. 2004 Appointed Representative Director of Prospect Co., Ltd.
Dec. 2004 Appointed Director of Prospect Co., Ltd.
Aug. 2007

Appointed Representative Director of Prospect Co., Ltd.
(present post)

Apr. 1982

Entered Mitsui Trust and Banking Corporation (currently
Chuo Mitsui Trust and Banking Corporation)

Sep. 1991 Entered Mori Tax and Accounting firm
Auditor(part-time)

May 1994 Entered the auditing and law firm Taiyo Kowa
Akihiro Hirano
Apr. 1997

Registered as a certified public accountant, established
Hirano Public Accountant Office (present post)

Jun. 2004 Appointed Auditor, Prospect Co., Ltd
Sep. 2004

Appointed Auditor, Prospect Residential Advisors Co., Ltd(present post)25

0Prospect Residential Investment Corporation
2. Reference material(1) Investment breakdown
A breakdown of PRI’s investment assets as of the end of the fifth fiscal period (ended January 31, 2008) is as follows:
Fourth Fiscal Period(As of July 31, 2007)
Type of asset

Use

Total held
(Millions of yen)

Residential
rental units
Residential
Real estate
rental units
Deposit and other assets

Trust beneficiary rights
in real estate

Fifth Fiscal Period(As of January 31, 2008)

Proportion tototal (%）

Total held
(Millions of yen)

Proportion tototal (%）

62,22092.1

69,384

92.3

1,589

2.4

1,586

2.1

3,023

5.5

3,372

4.6

Total assets
67,589100.0
74,343
Note: Total held amounts are recorded on the balance sheets (total of book values after deducting depreciation).

100.0(2) Investment properties classified as real estate or entrusted real estate① Overview of investment properties
The following chart lists investment properties owned by PRI as of January 31, 2008. With the exception of properties
S017, F017, and F022, which are classified as real estate, all other assets are classified as trust beneficiary rights in realestate.

Code

Property Name

Acquisition Price(Millions of Yen)
(Note 1)

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

S001

TK Flats Shibuya

6,399

9.2

6,230

July 12, 2005

S002

Prospect Shinonomebashi

3,353

4.8

3,540

July 12, 2005

S003

Maison de Ville Azabudai

2,720

3.9

2,760

July 14, 2005

S004

Maison de
Gyoranzaka

1,768

2.5

1,860

S005

Prospect Omori-Kaigan

1,807

2.6

1,840

July 14, 2005

S006

Abreast Shin-Osaka

1,826

2.6

1,917

July 12, 2005

S007

Maison de Ville Naka-Meguro

1,189

1.7

1,220

July 14, 2005

S008

Roppongi Rise House

1,184

1.7

1,140

July 12, 2005

S009

Prospect Nihonbashi-Honcho

1,070

1.5

1,040

July 12, 2005

S011

Fragrance Kawasaki

624

0.9

619

July 12, 2005

S012

Abreast Sakuragawa

516

0.7

474

July 12, 2005

S013

Dome Takamine

322

0.5

268

July 12, 2005

S014

Dome Yotsuya

275

0.4

223

July 12, 2005

S015

TK Flats Denenchofu Annex

249

0.4

216

July 12, 2005

S016

Abreast Nagase

209

0.3

176

July 12, 2005

S017

Living Stage Higashi-Sendai

435

0.6

417

August 31, 2005

S018

Prospect Toyonaka Hattori

396

0.6

453

February 10, 2006

S019

Prospect Bishoen

376

0.5

385

February 15, 2006

S020

Prospect Shimogamo

411

0.6

390

March 15, 2006

S021

Prospect Kawaramachi-Gojo

803

1.2

734

March 15, 2007

Ville

Takanawa

26

July 14, 2005

Prospect Residential Investment Corporation
1.0
700
March 15, 2007

S022

Prospect Chuo-Rinkan

700

S023

Sky Hills N15

932

1.3

957

May 31, 2007

S024

Sky Hills Sakaimachi

1,115

1.6

1,120

May 31, 2007

S025

Domy Chitose

592

0.8

603

May 31, 2007

S026

Sky Hills Kodai I

691

1.0

710

May 31, 2007

S027

Exceria Ikebukuro West II

1,020

1.5

1,000

June 20, 2007

S028

Prospect Monzennakacho

1,250

1.8

1,220

June 20, 2007

S029

Prospect KALON Minowa

1,930

2.8

1,910

September 7, 2007

S030

Prospect Nakanoshima

1,000

1.4

1,010

October 19, 2007

S031

Prospect Ogikubo

880

1.3

893

November 7, 2007

F001

Prospect Kiyosumi-Teien

2,780

4.0

2,940

July 14, 2005

F002

Park Terrace Ebisu

2,712

3.9

2,700

July 14, 2005

F003

BELNOS34

2,534

3.6

2,250

July 12, 2005

F004

Prospect Dogenzaka

2,294

3.3

2,190

July 12, 2005

F005

U House Daikan-Cho

1,548

2.2

1,408

July 12, 2005

F006

U House Gokiso

1,406

2.0

1,343

July 12, 2005

F007

Angel Heim Nishi-Rokugo No.2

1,401

2.0

1,349

July 14, 2005

F008

Prospect Onshi-Koen

1,196

1.7

1,280

July 12, 2005

F009

Deim-Hashimoto

992

1.4

1,020

July 12, 2005

F010

SK Residence

1,020

1.5

1,010

July 12, 2005

F012

Garden City Urawa

878

1.3

863

July 12, 2005

F014

U House Tsurumai II

685

1.0

567

July 12, 2005

F017

Living Stage Minami-Sendai

275

0.4

277

August 31, 2005

F019

Prospect Glarsa Hiroo

3,905

5.6

4,510

February 15, 2006

F020

Prospect Katsura

570

0.8

557

March 03, 2006

F021

Crown Heim Nishi-Tanabe

601

0.9

598

March 03, 2006

F022

Takasagoseki Nibankan

810

1.2

806

March 15, 2006

F023

Prospect Machiya

547

0.8

557

November 07, 2006

F024

Prospect Hatsudai

730

1.0

732

March 15, 2007

F025

Prospect Morishita

1,480

2.1

1,510

March 15, 2007

F026

Prospect Nishi-Sugamo

1,419

2.0

1,420

March 30, 2007

F027

Palais D’Or Maruyama

1,250

1.8

1,200

October 19, 2007

F028

Prospect Kawasaki

1,717

2.5

1,790

October 19, 2007

F029

Prospect Nihonbashi-Koamicho

946

1.4

968

October 19, 2007

69,739100.0

69,873

Total

Note 1: Acquisition price does not include real estate brokerage fees and other expenses incurred through the acquisition ofproperties.
Note 2: Figures are rounded to the nearest first decimal place.
Note 3: Based on the Cabinet Office Ordinance Concerning Balance Sheets, Income Statements, Asset Management Reports,

27

Prospect Residential Investment Corporation
Cash Distribution Statements and Other Supplementary Documents to be Prepared by Investment Corporations, appraisal
values are drawn from valuation reports prepared by Aoyama Realty Advisors Inc., Chuo Real Estate Appraisal Co., Ltd.,
Tanizawa Sogo Appraisal Co., Ltd., Mitsui Real Estate Sales Co., Ltd., and Daiwa Real Estate Appraisal Co., Ltd as of theInvestment Corporation’s closing date. The properties appraised by each appraiser are shown below, with the property
codes corresponding to those in the above table.
Aoyama Realty Advisors Inc.: S001 to S005, S007 to S009, S018 to S021, S029, F001, F003, F004, F009, F010, F012, F019
to F023, and F026, F027
Chuo Real Estate Appraisal Co., Ltd.: S006, S011 to S017, F005 to F007, F013, F014 and F017
Tanizawa Sogo Appraisal Co., Ltd.: S023 to S026, S030, F002, F008 and F029
Mitsui Real Estate Sales Co., Ltd.: S022, F024, and F025
Daiwa Real Estate Appraisal Co., Ltd.: S027, and S028
HIRO & REAS network Co., Ltd : S031

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

S001 TK Flats

S002

S003

S004

S005

Shibuya
Prospect
Shinonomeba
shi
Maison de
Ville
Azabudai
Maison de
Ville
Takanawa
Gyoranzaka
Prospect
Omori-KaiganS006 Abreast

Shin-Osaka
Maison de
S007 Ville
Naka-Meguro
S008 Roppongi

Rise House
Prospect
S009 Nihonbashi-H
oncho
S011 Fragrance

KawasakiS012 Abreast

Sakuragawa
S013 Dome

Takamine
S014 Dome

YotsuyaLocation

(m2)

(m2)

(m2)

(Note 1)

(Note 2)

(Note 3)

Shibuya-ku,
Tokyo

1,800.47

6,903.54

Koto-ku,Tokyo

1,385.45

Minato-ku,
Tokyo

Annex

(%)

(%)

(Note 8)(Note 9)6,209.31

194

175

28,187

1

89.9

90.2

4,849.20

4,849.20

171

171

18,165

1

100.0

100.0

444.01

2,567.09

2,417.91

91

86

12,011

1

94.2

94.5

638.65

1,778.37

1,753.32

70

69

8,489

1

98.6

98.6

Ota-ku,Tokyo856.82

2,478.04

2,446.04

89

88

8,836

1

98.7

98.9

Osaka-shi,
Osaka766.13

2,984.64

2,610.84

92

81

16,377

49

87.5

88.0

Meguro-ku,
Tokyo

275.36

1,275.00

1,275.00

50

50

6,038

1

100.0

100.0

Minato-ku,
Tokyo

574.65

1,209.87

1,180.80

34

33

5,353

1

97.6

97.1

Chuo-ku,Tokyo

174.36

1,290.49

1,169.63

50

46

5,015

1

90.6

92.0

Kawasaki-shi,
Kanagawa

228.05

1,065.96

1,065.96

45

45

3,738

1

100.0

100.0

Osaka-shi,
Osaka

361.991,009.92

946.68

48

45

2,804

1

93.7

93.8

Nagoya-shi,
Aichi

983.60946.04738.32

36

28

1,532

1

78.0

77.8

Nagoya-shi,
Aichi

812.09765.90744.60

36

35

1,645

1

97.2

97.2

Ota-ku,Tokyo

286.90429.50398.83

14

13

1,402

1

92.9

92.9

28

(Note 7)

Occupancy
Ratio (ByNo. ofResidential
Units)(Note 5)

Minato-ku,
Tokyo(Note 6)

Occupancy
Ratio (BySpace)(Note 4)TK Flats

S015 Denenchofu

Site Area

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

Prospect Residential Investment Corporation
S016 Abreast

Higashiosakashi, Osaka

318.54532.98532.98

26

26

1,405

26

100.0

100.0

Sendai-shi,
Miyagi904.001,539.41

1,279.60

52

43

2,356

1

83.1

82.7

Toyonaka-shi,
Osaka

352.75986.34986.34

34

34

2,448

1

100.0

100.0

Osaka-shi,
Osaka313.24901.15901.15

26

26

2,266

1

100.0

100.0

Kyoto-shi,
Kyoto

234.53675.51675.51

31

31

1,966

1

100.0

100.0

Shimogamo
ProspectKawaramachi-Gojo

Shimogyo-ku,
Kyoto

234.98

1,528.12

1,250.12

52

43

3,736

1

81.8

82.7

S022

Prospect
Chuo-Rinkan

Yamato-shi,
Kanagawa

589.73

1,098.24

1,075.36

48

47

3,408

1

97.9

97.9

S023

Sky
N15

Hills

Sapporo-shi,
Hokkaido

1,232.73

4,754.86

4,754.86

111

111

5,106

1

100.0

100.0

S024

Sky
Hills
Sakaimachi

Chitose-shi,
Hokkaido

4,189.46

6,775.39

6,775.39

134

134

6,776

1

100.0

100.0

S025

Domy
Chitose

Chitose-shi,
Hokkaido

1,796.60

3,383.02

3,383.02

111

111

4,244

1

100.0

100.0

Sky
Hills
Kodai I
Exceria
S027 IkebukuroWest II

Chitose-shi,
Hokkaido

2,401.78

4,712.47

4,712.47

120

120

5,594

1

100.0

100.0

Toshima-ku,
Tokyo

290.14

1,379.52

1,126.68

48

40

4,275

1

81.7

83.3

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

Bishoen
S020 Prospect

S021

S026

S028

ProspectMonzennakacho

Koto-ku,Tokyo

613.01

1,790.56

1,790.56

62

62

5,850

1

100.0

100.0

S029

Prospect
KALON
MinowaTaito-ku,Tokyo

613.01

1,790.56

1,790.56

62

62

5,850

1

100.0

100.0

ProspectNakanoshima

Kita-ku,Osaka

613.01

1,790.56

1,790.56

62

62

5,850

1

100.0

100.0

ProspectOgikubo
Prospect
F001 KiyosumiTeien

Suginami-ku,
Tokyo

613.01

1,790.56

1,790.56

62

62

5,850

1

100.0

100.0

Koto-ku,Tokyo

1,586.77

5,556.73

5,517.29

77

76

14,742

1

99.3

98.7

F002 Park Terrace

Shibuya-ku,
Tokyo

790.182,705.09

2,663.77

51

50

12,140

1

98.5

98.0

Ebisu

Katsushika-ku, Tokyo

3,092.58

5,321.89

4,986.64

100

93

13,521

1

93.7

93.0

BELNOS 34

Shibuya-ku,
Tokyo

274.24

2,058.53

1,878.15

47

43

9,358

1

91.2

91.5

Nagoya-shi,
Aichi

2,060.52

5,944.44

5,842.38

96

94

9,758

1

98.3

97.9

Nagoya-shi,
Aichi

3,113.87

5,127.19

4,538.67

78

74

8,005

1

88.5

94.9

Ota-ku,Tokyo

1,666.28

2,776.64

2,776.64

40

40

6,716

1

100.0

100.0

Koto-ku,Tokyo

772.002,033.77

2,003.95

61

60

6,499

1

98.5

98.4

S030

S031

F003

F004 Prospect

Dogenzaka
F005 U House

Daikan-Cho
F006 U House

GokisoAngel Heim
F007 Nishi-Rokugo
No.2
F008 Prospect

Onshi-Koen

29

Prospect Residential Investment Corporation
F009 Deim-Hashim

Sagamihara-shi, Kanagawa

898.13

3,170.41

2,698.57

92

76

5,691

1

85.1

82.6

oto

Toshima-ku,
Tokyo

474.55

1,624.49

1,581.56

30

29

5,237

1

97.4

96.7

SK Residence

Saitama-shi,
Saitama

1,557.49

2,468.51

2,468.51

30

30

4,965

1

100.0

100.0

Nagoya-shi,
Aichi

615.51

2,262.63

2,191.20

34

33

3,752

1

96.8

97.1

Sendai-shi,
Miyagi476.23

1,277.10

1,135.35

27

24

1,868

1

88.9

88.9

Shibuya-ku,
Tokyo

803.31

3,846.27

3,820.63

112

111

19,718

1

99.3

99.1

Kyoto-shi,
Kyoto

1,354.29

1,769.96

1,769.96

29

29

3,167

1

100.0

100.0

Osaka-shi,
Osaka444.201,517.86

1,453.20

22

21

2,978

1

95.7

95.5

Sendai-shi,
Miyagi

1,794.83

3,336.52

2,815.93

41

34

4,739

1

84.4

82.9

Arakawa-ku,
Tokyo

251.441169.37

1,169.37

21

21

3,074

1

100.0

100.0

Machiya
Prospect
HatsudaiShibuya-ku,
Tokyo

586.68817.71778.61

22

21

3,237

1

95.2

95.5

ProspectMorishita
ProspectF026 Nishi-SugamoKoto-ku,Tokyo

736.43

2,399.23

2,351.24

45

44

7,252

1

98.0

97.8

Koto-ku,Tokyo

368.152,023.42

2,023.42

42

42

6,610

1

100.0

100.0

F010

F012 Garden City

Urawa
F014 U House

Tsurumai II
Living Stage
F017 Minami-Send
aiF019 Prospect

Glarsa Hiroo
F020 Prospect

KatsuraF021 Crown Heim

Nishi-Tanabe
F022 Takasagoseki

Nibankan
F023 Prospect

F024

F025

F027

Palais D’Or
Maruyama

Chuo-ku,
Sapporo2,236.99

4,678.32

3,676.71

64

51

6,490

1

78.6

79.7

F028

ProspectKawasaki

Saiwai-ku,
Kawasaki

1,218.89

3,377.53

3,377.53

52

52

9,007

1

100.0

100.0

Chuo-ku,Tokyo

273.37

1,364.02

1,314.27

37

36

5,043

1

96.4

97.3

133,950.14

125,999.43

3,311

3,128

357,797

127

94.1

94.5

ProspectF029 NihonbashiKoamicho

Total

Note 1. In the ‘Site Area’ column, figures for total site area of real estate or entrusted real estate are based on data inregister books or records. In some cases, such data might not be completely accurate.
Note 2. In the ‘Total Leasable Floor Space’ column, figures represent leasable floor space for portions of real estate or
entrusted real estate acquired by PRI.
Note 3. In the ‘Total Leased Floor Space’ column, figures represent leased floor space with lease contracts concluded
with end-tenants. Such floor space excludes leased site (land) area. Figures are based on lease contracts between
end-tenants and master lessers or trust beneficiaries. Nevertheless, in cases of apparent errors in lease contracts, floor
space data are based on information given by the previous owner of the acquired properties, information shown on plansat completion, etc.
Note 4. In the ‘Total Leasable Residential Units’ column, figures represent leasable units for portions of real estate or
entrusted real estate acquired by PRI.
Note 5. In the ‘Total Leased Residential Units’ column, figures represent leased units to end-tenants with lease contracts
concluded between end-tenants and master lessers or trust beneficiaries as of January 31, 2008.
Note 6. In the ‘Total Monthly Rental Revenues’ column, figures represent total monthly revenues as recorded in lease
contracts concluded between end-tenants and master lessers or trust beneficiaries as of January 31, 2008. Such revenues
include common area maintenance fee revenues but exclude revenues from monthly contracted parking spaces or suchsupplemental facilities as storage and locker space.
Note 7. In the ‘Total Number of Tenants’ column, ‘1’ represents cases of lease contracts concluded between trust
beneficiaries and master lessers. In such cases, figures are based on the assumption that all end-tenants have agreed with
their master lesser to be lessers (sub-lessers). In the cases that one tenant leases more than one unit, the number oftenants is recorded as ‘1.’ These figures are based on information current as of January 31, 2008.

30

Prospect Residential Investment Corporation
Note 8. In the ‘Occupancy Ratio (By Space)’ column, percentage figurees represent the proportion of leased floor space
to leasable floor space of each real estate or entrusted real estate property. In addition, percentage numbers are rounded
to the nearest first decimal place. The ‘Total’ percentage figure represents the proportion of total leased floor space tototal leasable floor space as of January 31, 2008.
Note 9. In the ‘Occupancy Ratio (By No. of Residential Units)’ column, percentage figures represent the proportion ofleased floor space to leasable floor space of each asset. In the ‘Occupancy Ratio (By Space)’ column, percentage figures
are rounded to the nearest first decimal place. The ‘Total’ percentage figure represents the proportion of total leased
floor space to total leasable floor space as of January 31, 2008.
(３）Capital Expenditures for Investment Properties① Capital Expenditure Plan (consisting of items from JPY 1 million)

Property Name

Planned work amount (millions of
yen)
Note
Paid in this
Total
Total
periodpaid

PurposePlanned period

BELNOS 34

Waterproofing of roof set-back

Early February 2008

1

−

−

BELNOS 34

Renovation of office space on
the second floor

Early February 2008

30

−

−

Angel Heim Nishi-Rokugo No.2

Waterproofing of roof

Early April 2008

2

−

−

Sky Hills Sakaimachi

New installation of security
cameras

Early March 2008

2

Sky Hills Kodai I

Repair of common corridors

Late May 2008

6

−

−

Takasagoseki Nibankan

Replacementment of watertaps and cooking facilities inkitchens for 10 units

Mid-March 2008

1

Deim-Hashimoto

Renovation of two rooms

Early March 2008

5

−

−

Deim-Hashimoto

Repair of entrance

Early June 2008

5

−

−

Late March 2008

1

−

−

Dome Takamine

Replacementment of cooking
facilities in kitchens for 5
units
Replacementment of electricwater heaters for 5 units

Late March 2008

1

−

−

Palais D’Or Maruyama

Replacementment of facility

Mid-February 2008

5

−

−

U House Gokiso

Renovation of room No. 303

Late February 2008

3

−

−

U House Gokiso

Renovation of room No. 306

Late February 2008

3

−

−

U House Gokiso

Renovation of room No. 403

Late February 2008

3

−

−

U House Gokiso

Renovation of room No. 409

Late February 2008

3

−

−

U House Gokiso

Renovation of room No. 802

Late February 2008

3

−

−

U House Gokiso

Renovation of room No. 902

Late February 2008

3

−

−

U House Gokiso

Renovation of office space on
the first floor

Early March 2008

20

−

−

U House Daikan-Cho

Large-scale repair work

Early April 2008

70

−

−

OthersReplacementmentof
airconditioners, water heaters,
and others

3

−

−

Dome Takamine

Note. Numbers are rounded down to the nearest first decimal place.

31

Prospect Residential Investment Corporation②Capital expenditures in the period under review

Amount paid
(millions of yen)

Purpose

PeriodSK Residence

Large-scale repair work

From November 19, 2007
January 31, 2008

toTK Flats Shibuya

Replacement of lids on drains

From September 13, 2007
September 13, 2007

toAbreast Shin-Osaka

Bathroom ceiling and tilingwork

From January 21, 2008
January 29, 2008

to

Sky Hills Takadai I

Replacement of remote water
meter for residential units

From November 19, 2007 to
November 26, 2007

4

Takasagoseki Nibankan

Repair of external walls andwater proofing facility

From November 1, 2007 to
December 27, 2007

7

Deim-Hashimoto

New installation work forwaterproof pans for washingmachines and new installation
work of closets for 10 units

From December 1, 2007 to
December 30, 2007

3

Deim-Hashimoto

Renovation of room No. 903

From December 1, 2007 to
December 30, 2007

2

Dome Takamine

Replacement ofunits for 8 units

mini-kitchen

From November 8, 2007 to
November 30, 2007

1

Maison de Ville Naka-Meguro

Replacement of door locks ofresidential units and buildings

From October 31, 2007 to
December 20, 2007

1

U House Gokiso

Renovation of room No. 223

From October 19, 2007 to
November 30, 2007

2

U House Gokiso

Renovation of room No. 1201

From August 23, 2007
October 31, 2007

to3

U House Gokiso

Renovation of room No. 705

From August 29, 2007
September 30, 2007

to

U House Daikancho

New installation facilities forterrestrial digital broadcasting

From December 11, 2007 to
December 11, 2007

1

U House Daikancho

New installation of security
camerasFrom January 21, 2008 to
January 22, 2008

1

U House Tsurumai II

Replacement of pull-up pumps

From January 21, 2008 to
January 21, 2008

1

U House Tsurumai II

New installation of security
camerasFrom December 5, 2007 to
December 5, 2007

1

U House Tsurumai II

New installation facilities forterrestrial digital broadcasting

From December 11, 2007 to
December 11, 2007

1

Living Stage Higashi-Sendai

New installation of aluminum
fixtures and glass

From January 15, 2008
January 30, 2008

1

Other properties

Replacement of air conditioners
and
water
heaters,
newinstallation of security cameras,
and others
Total

to

28
1
2

3

1

90

Note. Numbers are rounded down to the nearest first decimal place.

32

③Reserve for repair expenses
PeriodItems
Reserve balance at the end of
previous fiscal period

Prospect Residential Investment Corporation(Millions of yen)
Fourth Fiscal Period
Fifth Fiscal Period(February 1, 2007 to July 31, 2007)(August 1, 2007 to January 31, 2008)
376

384

Reserved amount in the period

64

73

Withdrawal in the period
Balance carried forward

57
384

28
428

４）Figures in Engineering Reports① Outline of building engineering reports
In addition to receiving support from research firms, PRI commissions them for the following items for eachof its investment real estate or entrusted real estate properties.
―Examination of building deterioration, planning of short- and long-term repair expenses, research ofcompliance in accordance with the Building Standards Law, research of hazardous material contents inbuildings, and research of soil conditions.
Nevertheless, the contents of these reports are the opinions of the respective research firms, and PRI does notguarantee the appropriateness and accuracy of such contents.
② Outline of earthquake risk reports
PRI commissions Tokyo Bldg-Tech Center Co., Ltd. (TBTC) for earthquake risk reports and other reports foreach investment real estate and entrusted real estate property.
Nevertheless, the contents of the reports are the opinions of TBTC, and PRI does not guarantee theappropriateness and accuracy of such contents.

Code

S001
S002
S003
S004
S005
S006
S007
S008
S009
S011
S012
S013
S014
S015
S016
S017
S018
S019
S020
S021

Property nameTK Flats Shibuya
Prospect Shinonomebashi
MaisondeVille
Azabudai
Maisonde
Ville
Takanawa Gyoranzaka
Prospect Omori-Kaigan
Abreast Shin-Osaka
MaisondeVille
Naka-Meguro
Roppongi Rise House
ProspectNihonbashi-Honcho
Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
TK Flats Denenchofu
Annex
Abreast Nagase
LivingStage
Higashi-Sendai
ProspectToyonaka
Hattori
Prospect Bishoen
Prospect Shimogamo
ProspectKawaramachi-Gojo

Research firm
(Note 1)

Estimate of repair expenses(thousands of yen rounded
down)
Urgen Withint
one year

Takenaka
TBTC
TBTC

−
−

490
−

−

TBTC

Rebuilding
price ofbuilding(millionsof yenOver 12roundedyears
down)
184,420
2,174
10,1801,450Month andyear ofbuilding
engineering
reports
April 2005
April 2005
April 2005

Probable Month andMaximumyear of
Loss (%) earthquake(Note 2) risk reports
8 January 2008
19

January 2008

10

January 2008

12

January 2008

10

January 2008

12

January 2008−

31,550772−−

47,800

463

TBTC
TBTC
TBTC

−
−

−
−

6,830
94,760600
910

April 2005
May 2005−−

37,070372

April 2005

7

January 2008

TBTC
TBTC

−

−

3,570

15

January 2008

−

−

3,830

362 February 2005
April 2005
385

12

January 2008

TBTC
TBTC
Takenaka
Takenaka
TBTC

−
−
−
−

−
−
870
370

2,990
11,57049,76049,250

274
275
161
138

13

January 2008

15

January 2008

6

January 2008

5

January 2008−−

21,040108

April 2005
May 2005
April 2005
April 2005
April 2005

10

January 2008

TBTC
TBTC

−

−

21,200160

May 2005

12

January 2008−

300

46,660312

August 2005

7

January 2008−−

18,490277

9January 2008

−

−

8,360

209

14

January 2008

−

−

2,460

203

December
2005
December
2005
March 2004

5

January 2008

−

−

4,320

440

January 2007

12

January 2008

Takenaka
Takenaka
TBTC
TBTC

33

April 2005

Prospect Residential Investment Corporation
S022
S023
S024
S025
S026
S027
S028
S029
S030
S031
F001
F002
F003
F004
F005
F006

TBTC
Prospect Chuo-Rinkan
Sky Hills N15
Takenaka
Takenaka
Sky Hills Sakaimachi
Takenaka
Domy Chitose
Takenaka
Sky Hills Kodai I
Exceria Ikebukuro West TBTCIIProspect Monzennakacho TBTC
Prospect
KALON TBTC
MinowaProspect Nakanoshima
TBTC
Prospect Ogikubo
TBTC
Prospect Kiyosumi-Teien Takenaka
TBTCPark Terrace Ebisu
TBTC
BELNOS34
TBTC
Prospect Dogenzaka
Takenaka
U House Daikan-Cho
Takenaka
U House Gokiso
Angel
Heim
Takenaka
Nishi-Rokugo No.2
TBTC
Prospect Onshi-Koen
TBTC
Deim-Hashimoto
TBTC
SK Residence
TBTC
Garden City Urawa
U House Tsurumai II
Takenaka
LivingStage TBTC
Minami-Sendai

−
300
−
300
1,200

−
−
−
−
680

3,960
52,71098,66063,750133,960

301
609
850
415
581

February 2007
March 2007
March 2007
March 2007
March 2007

14

January 2008

2

January 2008

4
3
4

January 2008
January 2008
January 2008

−

−

4,860

350

May 2007

10

January 2008

−

−

5,400

410

May 2007

19

January 2008

−

−

8,000

970

July 2007

14

January 2008

−
−
−
−
−
−
−
−

−
−
100
−
150
−
1,990
500

5,210
3,300
238,790
41,750174,670
4,130
260,200
165,900

534
August 2007
305
August 2007
1,332
March 2003
April 2005
700
April 2005
1,735
552 February 2005
1,181
March 2003
1,141
July 2007

12

January 2008

11

January 2008

15

January 2008

11

January 2008

12

January 2008

9

January 2008

11

January 2008

10

January 2008
January 2008−

130

108,540

580

March 2003

11

−
−
0
−
−

−
150
0
0
820

4,980
38,28036,93054,830125,540

574
646
447
605
491

February 2005
April 2005
April 2005
April 2005
April 2005

25

January 2008

13
5

January 2008
January 2008
January 2008

17

January 2008−

150

36,750300

August 2005

7

January 2008−

270

16,6801,185

7January 2008−−

41,620351

7January 2008

−

160

7,070

405

March 2006

11

January 2008

F022
F023
F024
F025
F026
F027

Prospect Katsura
Crown
Heim
Nishi-Tanabe
TBTC
Takasagoseki Nibankan
TBTC
Prospect Machiya
TBTC
Prospect Hatsudai
TBTC
Prospect Morishita
TBTC
Prospect Nishi-Sugamo
Palais D’Or Maruyama
TBTC

December
2005
March 2006

−
−
−
−
−
0

150
−
−
−
−
300

80,220
2,680
2,190
4,930
3,890
96,650F028

Prospect Kawasaki

TBTC

0

0

5,810

761 February 2006
290 October 2006
179 Janurary 2007
616 February 2007
504 February 2007
975
August 2007
September
862
2007

TBTC

0

0

4,150

399

1,800

7,580

2,593,100

32,185

F007
F008
F009
F010
F012
F014
F017
F019
F020
F021

Prospect Glarsa Hiroo

TBTC
TBTC

ProspectNihonbashi-Koamicho
Total portfolio
F029

TBTC

August 2007

11

11

January 2008

14

January 2008

8

January 2008

11

January 2008

10

January 2008

2

January 2008

10

January 2008

12

January 2008

7.6

Note 1. In the ‘Research firm’ column, TBTC stands for Tokyo Bldg-Tech Center Co., Ltd., and Takenaka stands for
Takenaka Corporation.
Note 2. Probable Maximum Loss (PML) is a ratio that represents the probability of a maximum loss, and is calculated
for each asset and the overall portfolio. In this document, PML is defined as a ratio of a building’s estimated restoration
cost to its rebuilding price resulting from a maximum-magnitude earthquake projected to occur within a 50-year period
every 475 years, therefore having a 10% probability every 50 years.
Note 3. PRI has purchased earthquake insurance for this property.
Note 4. The month and year of building engineering reports and the month and year of earthquake risk reports refer tothe first reports issued.

34

Prospect Residential Investment Corporation5）Outline of tenants and others① Outline of leasing conditions for each real estate or entrusted real estate property

Code

Property Name

Total Leasable
Floor Space

Total Leased
Floor Space

(㎡)

(㎡)

(As of January 31, 2008)
Total Monthly
Percentage
RentalNumber ofshare
to total
Revenues
revenues
tenants(Thousands of
(%)
Yen)

S001

TK Flats Shibuya

6,903.54

6,209.31

1

187

8.3

S002

Prospect Shinonomebashi

4,849.20

4,849.20

1

113

5.1

S003

Maison de Ville Azabudai

2,567.09

2,417.91

1

75

3.4

S004

Maison de Ville Takanawa
Gyoranzaka

1,778.37

1,753.32

1

56

2.5

S005

Prospect Omori-Kaigan

2,478.04

2,446.04

1

58

2.6

S006

Abreast Shin-Osaka2,984.64

2,610.84

49

98

4.4

S007

MaisondeNaka-Meguro

1,275.00

1,275.00

1

38

1.7

S008

Roppongi Rise House

1,209.87

1,180.80

1

35

1.6

S009

ProspectNihonbashi-Honcho

1,290.49

1,169.63

1

32

1.5

S011

Fragrance Kawasaki

1,065.96

1,065.96

1

24

1.1

S012

Abreast Sakuragawa

1,009.92

946.68

1

18

0.8

S013

Dome Takamine

946.04738.32

1

10

0.5

S014

Dome Yotsuya

765.90744.60

1

10

0.5

S015

TK Flats
Annex

429.50398.83

1

8

0.4

S016

Abreast Nagase

532.98532.98

26

8

0.4

S017

LivingHigashi-Sendai

1,539.41

1,279.60

1

16

0.7

S018

Prospect Toyonaka Hattori

986.34986.34

1

15

0.7

S019

Prospect Bishoen

901.15870.55

1

13

0.6

S020

Prospect Shimogamo

675.51675.51

1

12

0.6

S021

ProspectKawaramachi-Gojo

1,528.12

1,257.03

1

23

1.1

S022

Prospect Chuo-Rinkan

1,098.24

1,052.48

1

23

1.0

S023

Sky Hills N15

4,754.86

4,754.86

1

32

1.4

S024

Sky Hills Sakaimachi

6,775.39

6,775.39

1

42

1.9

S025

Domy Chitose

3,383.02

3,383.02

1

26

1.2

Ville

Denenchofu

Stage

35

Prospect Residential Investment Corporation
S026

Sky Hills Kodai I

4,712.47

4,712.47

1

35

1.6

S027

Exceria Ikebukuro West II

1,379.52

1,379.52

1

31

1.4

S028

Prospect Monzennakacho

1,790.56

1,790.56

1

38

1.7

S029

Prospect KALON Minowa

3,032.27

2,968.02

1

46

2.1

S030

Prospect Nakanoshima

1,572.48

1,422.72

1

18

0.8

S031

Prospect Ogikubo

1,106.63

976.96

1

10

0.5

F001

Prospect Kiyosumi-Teien

5,556.73

5,480.42

1

95

4.3

F002

Park Terrace Ebisu

2,705.09

2,597.21

1

76

3.4

F003

BELNOS34

5,321.89

4,513.03

1

89

4.0

F004

Prospect Dogenzaka

2,058.53

1,776.48

1

61

2.7

F005

U House Daikan-Cho

5,944.44

5,837.95

1

62

2.8

F006

U House Gokiso

5,127.19

4,139.51

1

53

2.4

F007

Angel Heim Nishi-Rokugo
No.2

2,776.64

2,702.05

1

54

2.4

F008

Prospect Onshi-Koen

2,033.77

2,033.77

1

41

1.9

F009

Deim-Hashimoto

3,170.41

2,483.12

1

35

1.6

F010

SK Residence

1,624.49

1,624.49

1

36

1.6

F012

Garden City Urawa

2,468.51

2,468.51

1

29

1.3

F013

Garden City Kita-Toda

3,678.83

3,603.66

1

6

0.3

F014

U House Tsurumai II

2,262.63

2,189.55

1

27

1.2

F017

LivingMinami-Sendai

1,277.10

1,087.90

1

11

0.5

F019

Prospect Glarsa Hiroo

3,846.27

3,710.75

1

123

5.5

F020

Prospect Katsura

1,769.96

1,769.96

1

23

1.1

F021

Crown Heim Nishi-Tanabe

1,517.86

1,453.20

1

19

0.9

F022

Takasagoseki Nibankan

3,336.52

2,815.93

1

34

1.5

F023

Prospect Machiya

1,169.37

1,169.37

1

18

0.8

F024

Prospect Hatsudai

817.71778.61

1

19

0.9

F025

Prospect Morishita

2,399.23

2,351.24

1

46

2.1

F026

Prospect Nishi-Sugamo

2,023.42

2,023.42

1

39

1.8

Stage

36

Prospect Residential Investment Corporation
F027

Palais D’Or Maruyama

4,678.32

3,676.71

1

25

1.1

F028

Prospect Kawasaki

3,377.53

3,377.53

1

32

1.5

F029

ProspectNihonbashi-Koamicho

1,364.02

1,314.27

1

17

0.8

Total

133,950.14

125,999.43

127

2,246

100.0

Note: Leasing operations started from September 2007 for Prospect KALON Minowa (Code: S029). Leasing operations
started from October 2007 for Prospect Nakanoshima (S030), Palais D’Or Maruyama (F027), Prospect Kawasaki(F028), and Prospect Nihonbashi-Koamicho (F029). Leasing operations started from November 2007 for Prospect
Ogikubo (S031). Leasing operations ended on August 31, 2007 for Garden City Kita-Toda.
② Occupancy rates
Code

Property Name

S001
S002
S003

S005
S006
S007
S008
S009
S011
S012
S013
S014
S015
S016
S017
S018
S019
S020
S021
S022
S023
S024
S025
S026
S027
S028
S029

TK Flats Shibuya
Prospect Shinonomebashi
Maison de Ville Azabudai
Maison de Ville Takanawa
Gyoranzaka
Prospect Omori-Kaigan
Abreast Shin-Osaka
Maison de Ville Naka-Meguro
Roppongi Rise House
Prospect Nihonbashi-Honcho
Fragrance Kawasaki
Abreast Sakuragawa
Dome Takamine
Dome Yotsuya
TK Flats Denenchofu Annex
Abreast Nagase
Living Stage Higashi-Sendai
Prospect Toyonaka Hattori
Prospect Bishoen
Prospect Shimogamo
Prospect Kawaramachi-Gojo
Prospect Chuo-Rinkan
Sky Hills N15
Sky Hills Sakaimachi
Domy Chitose
Sky Hills Kodai I
Exceria Ikebukuro West II
Prospect Monzennakacho
Prospect KALON Minowa

S030

Prospect Nakanoshima

S031
F001
F002
F003
F004
F005
F006
F007
F008
F009

Prospect Ogikubo
Prospect Kiyosumi-Teien
Park Terrace Ebisu
BELNOS34
Prospect Dogenzaka
U House Daikan-Cho
U House Gokiso
Angel Heim Nishi-Rokugo No.2
Prospect Onshi-Koen
Deim-Hashimoto

S004(End of each month)
July
2007

August2007

September
2007

October
2007

85.9
96.4
89.0

87.6
97.0
94.9

88.6
96.9
97.5

89.4
94.4
96.5

87.9
94.5
94.5

87.8
96.7
95.5

89.9
100.0
94.2

98.6

98.6

97.2

100.0

100.0

98.6

98.6

100.0
91.6
92.0
90.5
96.5
98.0
95.8
83.5
80.7
100.0
100.0
77.1
100.0
100.0
100.0
81.8
97.9
100.0
100.0
100.0
100.0
81.7
100.0

100.0
87.5
98.0
97.6
94.8
98.0
93.8
80.8
86.2
92.9
100.0
75.0
100.0
100.0
100.0
80.0
93.8
100.0
100.0
100.0
100.0
94.0
100.0

96.9
87.5
100.0
100.0
94.8
100.0
95.8
78.0
100.0
92.9
100.0
77.1
100.0
100.0
100.0
81.9
100.0
100.0
100.0
100.0
100.0
94.9
97.2

98.8
87.5
100.0
100.0
87.3
100.0
95.8
78.0
97.2
85.7
100.0
77.1
100.0
96.6
100.0
81.9
95.8
100.0
100.0
100.0
100.0
96.4
100.0

99.0
86.4
98.0
100.0
81.5
100.0
95.8
78.0
97.2
85.7
100.0
81.0
100.0
100.0
100.0
82.0
95.8
100.0
100.0
100.0
100.0
98.2
100.0

98.7
86.4
98.0
100.0
85.2
100.0
93.7
78.0
97.2
85.7
100.0
83.1
100.0
96.6
100.0
80.4
93.8
100.0
100.0
100.0
100.0
100.0
100.0

98.7
87.5
100.0
97.6
90.6
100.0
93.7
78.0
97.2
92.9
100.0
83.1
100.0
96.6
100.0
82.3
95.8
100.0
100.0
100.0
100.0
100.0
100.0

83.7

84.3

95.0

97.9

97.9

96.8

95.2

92.1

90.5

80.4

82.9

88.3

96.8
98.7
88.8
96.5
96.2
85.0
100.0
98.1
81.0

95.5
95.6
85.8
91.8
96.2
83.7
97.3
100.0
77.7

98.6
96.0
84.8
86.3
98.2
80.7
97.3
100.0
78.3

99.3
98.5
93.7
91.2
98.3
88.5
100.0
98.5
85.1

100.0
100.0
88.2
86.5
97.7
87.0
100.0
100.0
84.5

37

100.0
100.0
88.8
90.2
97.2
85.7
100.0
100.0
82.3

98.4
98.7
89.7
94.3
96.2
85.0
97.3
96.6
79.7

November December
2007
2007

January
2008

Prospect Residential Investment Corporation
F010
F012
F013
F014
F017
F019
F020
F021
F022
F023
F024
F025
F026
F027
F028
F029

SK Residence
Garden City Urawa
Garden City Kita-Toda
U House Tsurumai II
Living Stage Minami-Sendai
Prospect Glarsa Hiroo
Prospect Katsura
Crown Heim Nishi-Tanabe
Takasagoseki Nibankan
Prospect Machiya
Prospect Hatsudai
Prospect Morishita
Prospect Nishi-Sugamo
Palais D’Or Maruyama
Prospect Kawasaki
Prospect Nihonbashi-Koamicho

97.4
100.0
98.0
96.8
88.9
99.3
93.2
95.7
93.2
100.0
100.0
98.1
100.0

100.0
100.0

97.3
100.0

97.3
100.0

100.0
100.0

100.0
100.0

100.0
100.0

94.4
88.9
99.3
89.8
95.7
91.0
100.0
95.2
98.1
100.0

97.5
88.9
99.3
93.1
95.7
91.0
100.0
95.2
100.0
100.0

91.2
85.2
97.9
100.0
100.0
88.8
100.0
95.2
100.0
100.0
79.4
98.3
92.7

100.0
88.9
99.4
100.0
100.0
88.8
95.1
95.2
100.0
100.0
78.6
100.0
88.6

100.0
85.2
97.0
100.0
100.0
84.4
100.0
95.2
97.5
100.0
78.6
100.0
96.4

96.8
85.2
96.5
100.0
95.7
84.4
100.0
95.2
98.0
100.0
78.6
100.0
96.4

Note: The formula to calculate occupancy rate is ‘leased floor space/leasable floor space,’ with results rounded to thenearest first decimal place.
（６）Information related to major real estate and major entrusted real estate
None of the real estate or entrusted real estate properties owned by PRI independently accounted for at least 10%of total real estate rental revenues in the fifth fiscal period.
（７）Portfolio diversification
Portfolio diversification by region, years after construction, and type of units is as follows:① By region

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

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

Number ofproperty

26

47,783

68.5

63,787.24

47.6

5

4,911

7.0

11,180.65

8.4

23

17,04424.4

58,982.25

44.0

54

69,738100.0

133,950.14

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

38

Prospect Residential Investment Corporation② Years after construction

Years after construction

Percentage share
Percentage share
Total leasable
Acquisition priceof acquisitionof floor space tofloor space(millions of yen
price to total
totalrounded down)
(㎡)
(%)
(%)
(Note 1)
(Note 3)(Note 2)
(Note 2)

Number ofproperty

Up to one year
More than one year and up to fiveyears
More than five years and up to ten
years
More than ten years
Total

3

3,756

5.4

5,502.92

4.1

22

27,88340.0

40,069.17

29.9

12

21,181

30.4

37,671.49

28.1

17

16,91824.3

50,706.56

37.9

54

69,738100.0

133,950.14

100.0Note 1. Transaction prices exclude consumption tax recorded on sales contracts.
Note 2. Percentage numbers are rounded to the nearest first decimal place.
Note 3. Leasable space owned by PRI excluding certain sites (ground-level parking spaces).
（8）Outline of major tenants and outline of overall tenants① List of major tenants
The following chart shows the names of major tenants with leased floor space and total monthly rents forproperty owned by PRI at the end of the fourth fiscal period. To be designated as a major tenant, leased floor
space must account for at least 10% of the total leased floor space of PRI’s portfolio. All of these tenants aremaster lessers.

Percentage share to
Total Leased Floor
Space
(％)
(Note 2)

Total Monthly
RentalRevenues(Thousands of
Yen)(Note 3)

Percentage share tototal revenues(%)(Note 4)

Tenant Name

Industry

Total Leased
Floor Space(㎡)

Haseko Livenet Co., LtdRealestate51,141.54

38.2

155,554

43.5

Tokyu Community Co., LtdRealestate33,641.58

25.1

48,723

13.6

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

Realestate18,671.95

13.9

68,06019.0

Total of Major Tenants

103,455.07

77.2

272,338

76.1

Total Portfolio

125,999.43

100.0

357,797100.0

Note 1. Mitsui Fudosan Residential Lease Co., Ltd. succeeded the condominium leasing operations of Mitsui Fudosan
Real Estate Sales Co., Ltd. on April 1, 2003. Hence, Mitsui Fudosan Real Estate Sales is used in master lease contracts.
Note 2. Percentage numbers are rounded to the nearest first decimal place.
Note 3. In the ‘Total monthly rents’ column represents total monthly rent received by trust beneficiaries of real estate or
entrusted real estate properties based on master lease contracts.
Note 4. Percentage numbers are rounded to the nearest first decimal place.

② Leasing conditions of major tenants
Tenants mentioned in section ① are master lessers holdingmaster lease contracts with the purpose of sub-leasing to thethird parties. Rents received from these tenants are of the pass-through type, equal to rents received from end-tenants,
and exclude rent assurance, with the exception of contracts for Sky-Hills Sakaicho. The following chart shows property
names, major leasing conditions such as contract periods, and master lesser details.

39

Prospect Residential Investment Corporation
Name of master lesser: Haseko Livenet
TK Flats Shibuya
Fragrance Kawasaki
Prospect Shinonomebashi Roppongi Rise House
From December 1, 2007 to From April 1, 2007 to From April 1, 2007 to From April 1, 2007 toContract period
March 31, 2008
March 31, 2008
November 30, 2008
March 31, 2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to one month notice up to three notice up to three notice up to threeprior to the end of months prior to the end months prior to the end months prior to the end
Methodforcontract periods, the of contract periods, the of contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Property Name

Property Name

Abreast Sakuragawa

Dome Takamine

Dome Yotsuya

TK Flats Denenchofu
Annex

From November 1,
From September 1, From May 1, 2007 to
From December 1, 20076
2006 to October 31,
to November 30, 20082007 to August 31, 2008 April 30, 2008
2007
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to three notice up to one month
months prior to the end months prior to the end months prior to the end prior to the end of
Methodforof contract periods, the of contract periods, the of contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Contract period

Property Name

Prospect Dogenzaka

Contract period

From April 1, 2007 to
March 31, 2008

In cases when lessers
and tenants give no
notice up to threemonths prior to the end
Methodforof contract periods, thecontracts renewal
leasing contracts are
renewed for a further
one year with the same
conditions.

U House Daikan-Cho

U House Gokiso
Deim-Hashimoto
From November 1,
From May 1, 2007 to
From July 3, 2006 to2007 to October 31,
April 30, 2008
Septem 30, 20122008
In cases when lessers In cases when lessers None.
and tenants give no and tenants give no
notice up to three notice up to threemonths prior to the end months prior to the endof contract periods, the of contract periods, theleasing contracts are leasing contracts are
renewed for a further renewed for a further
one year with the same one year with the same
conditions.
conditions.

U House Tsurumai II
BE LNOS 34
From May 1, 2007 to From February 1, 2007
Contract period
April 30, 2008
to January 31, 2008
In cases when lessers In cases when lessers
and tenants give no and tenants give no
notice up to three notice up to one month
months prior to the end prior to the end of
Methodforof contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are
renewed for a further renewed for a further
one year with the same one year with the same
conditions.
conditions.
Property Name

40

Prospect Hatsudai
From March 1, 2007 to
February 29, 2008
In cases when lessers
and tenants give no
notice up to one monthprior to the end ofcontract periods, theleasing contracts are
renewed for a further
one year with the same
conditions.

Prospect Morishita
From March 1, 2007 to
February 29, 2008
In cases when lessers
and tenants give no
notice up to one monthprior to the end ofcontract periods, theleasing contracts are
renewed for a further
one year with the same
conditions.

Prospect Residential Investment Corporation
Prospect Monzennakacho
Prospect KALON
Prospect Nakanoshima
Exceria Ikebukuro
Property Name
MinowaWest II
From June 28, 2007 to From June 28, 2007 to From March 1, 2007 to From October 1, 2007
Contract period
June 30, 2008
September 30, 2008
to September 30, 2008
June 30, 2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to one month notice up to one month notice up to one month notice up to one monthprior to the end of prior to the end of prior to the end of prior to the end of
Methodforcontract periods, the contract periods, the contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Prospect Kawasaki
From October 1, 2007
Contract period
to September 30, 2008
In cases when lessers
and tenants give no
notice up to one monthprior to the end of
Methodforcontract periods, thecontracts renewal
leasing contracts are
renewed for a further
one year with the same
conditions.
Property Name

Name of master lesser: Mitsui Fudosan Residential Lease
Maison de Ville
Maison de Ville
Prospect
Maison de Ville
Property Name
Azabudai
Takanawa Gyoranzaka
Omori-Kaigan
Naka-Meguro
From October 1, 2007 to From October 1, 2007 From April 1, 2007 to From October 1, 2007
Contract period
to September 30, 2008 March 31, 2008
to September 30, 2008
September 30, 2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to three notice up to threemonths prior to the end months prior to the end months prior to the end months prior to the end
Methodforof contract periods, the of contract periods, the of contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
ProspectPark
TerraceAngel
Heim
Kiyosumi-Teien
Ebisu
Nishi-Rokugo No.2
From April 1, 2007 to From October 1, 2007 to From March 28, 2002 toContract period
March 31, 2008
March 31, 2012
September 30, 2008
In cases when lessers In cases when lessers None.
and tenants give no and tenants give no
notice up to three notice up to threemonths prior to the end months prior to the end
Methodforof contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are
renewed for a further renewed for a further
one year with the same one year with the same
conditions.
conditions.
Property Name

41

Prospect Residential Investment Corporation
Name of master lesser: Tokyu Community

Property Name

Living Stage
Higashi-Sendai

Prospect Shimogamo

Living Stage
Minami-Sendai

Prospect Katsura

From September 1,
From April 1, 2007 to From September 1, 2007 From April 1, 2007 to2007 to August 31,
March 31, 2008
March 31, 2008
to August 31, 2008
2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to one month notice up to three notice up to one month
months prior to the end prior to the end of months prior to the end prior to the end of
Methodforof contract periods, the contract periods, the of contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Contract period

Property Name

Crown Heim
Nishi-Tanabe

Takasagoseki Nibankan

ProspectKawaramachi-Gojo

Sky Hills N15

From April 1, 2007 to From April 1, 2007 to From March 15, 2007 to From October 1, 2007
March 31, 2008
March 31, 2008
March 31, 2008
to September 30, 2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to one month notice up to three notice up to one month notice up to threeprior to the end of months prior to the end prior to the end of months prior to the end
Methodforcontract periods, the of contract periods, the contract periods, the of contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Contract period

Property Name

Sky Hills Sakaimachi

Domy Chitose

Sky Hills Takadai I

Palais D’Or Maruyama

From October 1, 2007 From October 1, 2007 From October 1, 2007 From August 1, 2007 to
to September 30, 2008 to September 30, 2008 to September 30, 2008 July 31, 2008
In cases when lessers In cases when lessers In cases when lessers In cases when lessers
and tenants give no and tenants give no and tenants give no and tenants give no
notice up to three notice up to three notice up to three notice up to one month
months prior to the end months prior to the end months prior to the end prior to the end of
Methodforof contract periods, the of contract periods, the of contract periods, the contract periods, thecontracts renewal
leasing contracts are leasing contracts are leasing contracts are leasing contracts are
renewed for a further renewed for a further renewed for a further renewed for a further
one year with the same one year with the same one year with the same one year with the same
conditions.
conditions.
conditions.
conditions.
Note: With respect to Prospect Shinonomebashi, Roppongi Rise House, Fragrance Kawasaki, Prospect Dogenzaka,
Prospect Omori-Kaigan, Prospect Kiyosumi-Teien, Prospect Shimogamo,
Prospect Katsura, Crown Heim
Nishi-Tanabe, Takasagoseki Nibankan, Prospect Kawaramachi-Gojo, the contract will be renewed for a further one year
because no notices were issued from lessers or tenants as of the date of this document.
Contract period

42Prospect Residential Investment Corporation
６． Corporations and entities related to PRI (in reference material 1．Corporations and entities related to PRI）
（1）Structure of the Investment Corporation

Property Provider
Prospect Co., Ltd.

Memorandum
Concerning
Preferential
Information
Provision

Prospect Residential
Investment Corporation

Asset Custody
Contract

Asset Custodian
Sumitomo Trust andBanking Co., Ltd.

Adminstrative
Duty Contract

Administrative Agent
Sumitomo Trust andBanking Co., Ltd.

General Meeting ofUnitholders
Board of Officers
Executive officer:
Property Information
ProviderMitsui Real Estate Sales
Co., Ltd.

Memorandum
Concerning
Information
Provision

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

Unitholders’RegisterAdministration
Contract

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

Asset Management
Contract
Memorandum Concerning
Information Provision

Asset Management Company
Prospect Residential Advisors
Co., Ltd.

Memorandum
Concerning Preferential
Information Provision

43

Accouting Auditor
Ernst & Young ShinNihon

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

Names

Outline of related operations

Investment Corporation

Prospect Residential Investment
Corporation

Asset Management Company

Prospect Residential Advisors Co.,Ltd.

PRI invests primarily in properties wholly or partly forresidential use, and defined as real estate or real estate
related assets (Notes) backed by real estate. With the aim ofachieving steady growth and securing stable earnings andprofits over the medium to long term, PRI carries out the
management of its investment assets.
PRI outsources all asset management operations to Prospect
Residential Advisors Co., Ltd. (the "Asset Management
Company"). Based on the Asset Management Contract
signed between the two parties on April 22, 2005 (the"Contract," as amended thereafter), the Asset Management
Company has formulated its Investment Management
Policy (the "Policy") to function as in-house rules andregulations regarding the management of the Investment
Assets.
In accordance with the Policy, the Asset Management
Company formulates Annual Asset Management Plans("Plans") for each of the Investment Corporation's operating
periods. The Plans present period-specific reports
concerning the acquisition, disposition and management ofreal estate-related assets; fund procurement and otherfinancing schemes; and distribution strategies.
The outsourced operations to the Asset Management
Company from PRI are as follows:① Operations for asset management, ② fund raising
operations, ③ reporting on asset conditions ④compilingproperty management plans , ⑤ related operations of ①
and ④ which are commissioned occasionally by PRI.

Asset Custodian

Sumitomo Trust and Banking Co.,

Administrative Agent

Ltd.

44

Sumitomo Trust engages in the following operations basedon the Administrative Duty Contract as an administrative
duty contractor, in accordance with the Investment TrustLaw:① Operations for calculations of PRI (excluding
unitholders’ register administrative operations), ②
operations to compile accounting books for PRI, ③
taxation accounting for PRI, ④ operations for board
meetings of officers of PRI and general meetings ofunitholders of PRI, and ⑤ related operations of ① and④ . Sumitomo Trust also engages in asset custodyoperations and related cash management and book keeping
operations as an asset custodian in accordance with theAsset Custody Contract and the Investment Trust Law:

Unitholders’ Register
Administrator

Mizuho Trust and Banking Co., Ltd.

Prospect Residential Investment Corporation
Mizuho Trust engages in the following operations based on
the Unitholders’ Register Administrative Contracts as aunitholders’ register administrator, in accordance with theInvestment Trust Law:
① Change of names of unitholders, ② operations to issue
investment securities, ③ operations to compile invitations
to general meetings of unitholders, notices of decisions
made on such meetings and reference documents, proxydocuments, and reception support at such meetings, ④operations to calculate and pay distributions to unitholders,⑤ operations to respond to inquiries about investment
units, to issue related certificates, and to handle applicationsof mishaps, ⑥ operations to sort out and keep documents
and undelivered postal items related to outsourced
operations, ⑦ operations to compile statistics ofinvestment units needed by PRI based on related laws andprovisions as well as contracts with PRI, and ⑧ related
operations of ① and ⑦.

Notes:
Real estate related assets are defined in a. and c.
PRI primarily invests in the following designated assets, as set in Item 28.1of its Articles of Incorporationa. real estateb. real estate equivalent assets, as follows
i)leasing rights to real estateii)
surface rights
iii)
trust beneficiary rights to real estate, leasehold, and surface rights
iv)
cash trust beneficiary rights to real estate, leasehold, and surface rightsv)
equity contracts with the above a. and b.i), and iv) as investment assetsvi)
cash trust beneficiary rights to anonymous partnership equity with real estate as major trust assets
c. More than half or equal to half of backed assets investmented in real estatei)
preferred equity securities (according to Article 2.12 of the Asset Liquidation Act)ii)
beneficiary securities (according to Article 2.12 of the Investment Trust Law)iii)
investment securities (according to Article 2.22 of the Investment Trust Law)iv)
beneficiary securities for designated purpose trusts (according to Article 2.15 of the Asset Liquidation Act,
excluding the above b. iii. iv. and v.)（３）Major related parties other than the aforementioned
Names

Operational roles

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

Prospect Co., Ltd. (KKP)

memorandum, KKP agrees to supply certain information about(Note)

real estate and to give preferential negotiation rights to PRI withrespect to acquiring real estate as well as real estate related assets

Property Information
ProviderMitsui Real Estate Sales Co.,Ltd.

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

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

45