,,

Corporate Profile
Established on September 14, 2001, Japan Prime Realty Investment Corporation (JPR or the Company) is a
closed-end corporate type fund that focuses on a geographically diverse investment portfolio of office andretail properties. Through its investment activities, JPR has received high credit ratings from rating
agencies, reflecting the Company's high-quality portfolio, earnings stability and sound financial standing.
As of June 30, 2006, JPR had an investment portfolio totaling 209.2 billion yen on an acquisition basis,
462 tenants and 44 properties, and is recognized as one of the top ranked diversified REITs in Japan.

Contents
Investment Highlights

1

Message to Our Unitholders

2

Account Highlights

3

Investment Unit Status

4

New Acquisitions during the 9th Fiscal Period

5

Portfolio Topics

6

Property Portfolio

8

Overview of Portfolio Properties

14

Characteristics and Corporate History

21

Overview of the Asset Manager

23

Overview of Asset Management

25

Overview of Investment Corporation

31

Status of JPR's Assets under Management

32

Capital Expenditures of Owned Real Estate

36

Expenses and Liabilities

37

Acquisition and Sale during the 9th Fiscal Period

39

Overview of Accounting / Other

41

Balance Sheets

42

Statement of Income and Retained Earnings

44

Statement of Changes in Unitholders' Equity

45

Notes to Financial Statements

46

Report of Independent Auditors

51

Statements of Cash Flows (Information Only)52

JPR Investment Policies (Reference)

54

Investor Information

64

Investment Highlights
Selective Investments
・Investment Results
・Portfolio size of 209.2 billion yen as of the end of June 2006 (based on acquisition price)・Prioritize prime locations and future potential for selective investments from a long-term perspective
・Acquisition of superior new development-type properties through collaboration with sponsors

・Establishment of Core Portfolio
・Strategic replacement of properties for a strong, quality core portfolio・Completion of the initial value-up strategy
・Well designed portfolio with a core of six major cities where stability and growth is anticipated

Sustainable Growth of Cash Flow
・Stabilization of Cash Flow・Tenant concentration: Downslide in share of the largest tenant(further reduction via sale of Tsurumi fuga 1)
・Reduce top five properties concentration by acquisition price・Cash Flow Growth・Growth in rental revenue of office buildings: Increase in new rental unit rates,
renewal rent rates and occupancy rates
・Undertaking of growth-type retail properties
・Sound Financial Strategy Focused on Long-Term Stability

1Message to Our Unitholders
I am delighted with this opportunity to provide an overview of the asset management andfinancial results of Japan Prime Realty Investment Corporation (JPR) for its 9th fiscal period(January 1, 2006 to June 30, 2006).
First, the JPR portfolio grew to 44 properties, or 209.2 billion yen on an acquisition pricebasis, as of the end of June 30, 2006 due to the acquisition of two properties (totaling 6.56
billion yen on an acquisition price basis) including the JPR Jingumae 432. The funds required
for these acquisitions were acquired within the credit limits set forth by lenders and wecontinue to maintain our stable financial standing.
As for our financial results, we posted operating revenues of 8,588 million yen and recurring
profits of 3,450 million yen primarily due to the full-period operations of properties acquired
during the previous period, partial contribution of properties acquired during the 9th fiscal
period, enhanced occupancy of existing properties and our efforts to reduce expenses. These
efforts and performance led to net income for the 9th fiscal period reaching 3,449 million
yen.
As a result, the cash distribution per unit was set at 6,509 yen.
We expect the environment surrounding the real estate investment trust industry to continue
being severe, particularly with regards to acquiring properties. We will continue to work with
our asset manager, Tokyo Realty Investment Management, within these circumstances torealize stable growth over the medium to long-term while maintaining a consistent focus oncompliance.
We ask for your continued understanding and support of our operations.

Hirohito Kaneko
Executive Officer
Japan Prime Realty Investment Corporation2

Account Highlights(All amounts in millions of yen unless otherwise stated)
5th period ended
June 2004

6th period ended
December 2004

7th period ended
June 2005

8th period ended
December 2005

9th period ended
June 2006

Operating revenues

6,790

7,685

8,503

8,587

8,588

Recurring profits

2,615

2,869

3,377

3,399

3,450

Net income

2,614

2,868

3,376

3,398

3,449

Total cash distributions

2,614

2,868

3,376

3,397

3,449

Total assets

182,253

198,673

216,574

225,882

231,523

Total unitholders' equity

91,72891,982

118,807

118,829

118,881

Equity ratio

50.3%

46.3%

54.9%

52.6%

51.3%

Unitholders' equity per unit (yen)213,322

213,912224,165

224,206

224,304

Cash distribution per unit (yen)

6,081

6,671

6,370

6,411

6,509

Oper
at
i
ngRevenuesandNetI
ncome

Tot
alAs
s
et
sandTot
alUi
t
hol
der
s
'Equi
t
y

25,
000

10,
000

Cas
hDi
s
t
r
i
but
i
onperUni
t

8,
000

20,
000
7,
500

6,
000

15,
000
5,
000

4,
000
10,
000

2,
500

2,
000
5,
000

0

0
5t
h
6t
h
7t
h
8t
h
9t
h
per
i
od peri
od peri
od peri
od per
i
od

0
5t
h
6t
h
7t
h
8t
h
9t
h
per
i
od peri
od peri
od peri
od per
i
od

Oper
at
i
ngr
evenues(milli
onyen)

Tot
alas
s
et
s(
mi
l
l
i
onyen)

Neti
ncome(
milli
onyen)

Tot
aluni
t
hol
der
s
'equi
t
y(
mi
l
l
i
onyen)

5t
h
6t
h
7t
h
8t
h
9t
h
per
i
od peri
od peri
od peri
od per
i
od

Cas
hdi
s
t
r
i
but
i
on(
yen)

3

Investment Unit Status
Historical Unit Price
Trading
VolumeUnit
Price

Trading Volume (units)
Unit Price (yen)10,000
9,000
8,000
7,000

380,000
As of August 9, 2006
Market capitalization: ￥187 billion
High: ￥376,000 (May 9, 2006)
Low: ￥199,000 (June 14, 2002)
Unit price at end of period: ￥344,000 (June 30, 2006)

360,000
340,000
320,000

6,000

300,000

5,000
4,000

1,000

260,000

PO
Offering: ￥237,160

3,000
2,000

280,000

PO
Offering: ￥272,440

240,000
220,000

Listed on Tokyo Stock Exchange
Offering: ￥200,000

0
Jun Julye 14, 2001
2

Jan.
6, 20
03

July
1

200,000

Jan.
5, 20
04

July
1

Jan.
4,

July
1

2005

Jan.
4,

2006

July Aug.91

180,000(Note) Unit prices are based on closing prices.

Breakdown of Unitholders at End of Period

Number ofUnitholders

Units
550,000

530,000 units

500,000

14.73%
78,077 units

450,000

430,000 unit

430,000 unit

400,000

15.44%
66,421 units

15.45%
66,438 units17.51%
75,298 units

16.91%
72,727 units

350,000

300,000

250,000

530,000 units

10.83%
46,590 units12.32%
65,324 units

14.56%
77,214 units

530,000 units

27,50010.72%
56,832 units

25,00014.11%
74,822 units

13.96%
74,030 units

9.88%
52,366 units

12,38%
65,647 units

20,0006.89%
36,564 units

12,50010,000150,000

7,500
56.20%
241,691 units

60.43%
259,891 units

63.80%
338,145 units

63.67%
337,488 units

62.92%
333,491 units

50,000

0

5,000

2,500

5th fiscal period

6th fiscal period

Financial Institutions(including securities firms)

7th fiscal period

ForeignInvestors

8th fiscal period

Other Domestic
Corporations(Note) The composition ratio is rounded to two decimal places.

4

17,50015,0007.19%
30,944 units

200,000

100,000

22,500Individuals

9th fiscal period
Number of Individual
Investors0New Acquisitions during the 9th Fiscal Period(Retail) A

JPR Jingumae 432

3

Location

Shibuya Ward, Tokyo

Acquisition Date

March 24, 2006

Acquisition Price￥4,460 million

Site Area2

218.21m

Total Floor Space2

1,066.81m
Floors

Structure

B1/7F

S/SRC
CompletedFebruary 2006

(Retail) B

Cupo-la Main Building

3

Location

Kawaguchi City, Saitama
Acquisition Date

March 31, 2006
Acquisition Price￥2,100 million
Site Area2

15,008.28m
Total Floor Space2

48,321.96m
Floors

Structure

S/RC/SRC

B2/10F

Completed

January 2006
Type of ownershipLand

Co-ownership(JPR percentage
share of the totalsite area is 7.3%)

Building

Unit ownership(parts of each floor
between the 1st
and 3rd floors)

5Portfolio Topics
Portfolio Growth
Occupancy rate (%)

Occupancy rate (%)

100.0
90.0
Total leasable
floor space (m2)

Total acquisition priceTotal leasable floor space

Total acquisition price(billion yen)

2,800

350,000

2,400

300,000

2,000

250,000

1,600

200,000

1,200

150,000

800

100,000

400

50,00000
End ofNovember
2001

Total
acquisition
price(billion yen)

End ofJune
2002

End ofDecember
2002

End ofJune
2003

End ofDecember
2003

139.64End ofDecember
2004

179.62End ofDecember
2005

94.59

94,935.49

162,739.50

168,987.78

Occupancy
rate (%)

96.3

94.1

93.4

93.5

92.7

93.2

95.1

95.4

97.2

98.0

Properties

13

25

27

30

32

38

42

42

42

44

Total numberof tenants

133

281

311

324

357

437

496

459

441

462

256,329.13 273,330.52

197.65209.22

281,408.97 308,205.26 315,156.84(Note 1) When a single tenant leases multiple rooms in the same property, the tenant is counted as one.
If the leased rooms are in multiple buildings, the tenant is counted in plural.
(Note 2) Each sectional owner of Shinjuku Square Tower leases its portions to Shinjuku Square Tower Management Co., Ltd.
collectively, and the firm subleases them to sub-lessees.
Accordingly, the leasable floor space of the building is calculated by multiplying the total contracted areas of offices, shops
and warehouses which the company rents and can sublease to sub-lessees by 39.70457%, the rent allocation ratio of JPR.
The subleased areas used to calculate the occupancy rate are the subleased areas to sub-lessees multiplied by the rent allocation ratio.
Each figure has been rounded to the second decimal point.
Moreover, the number of sub-lessees of the Shinjuku Square Tower is regarded as the number of tenants.

6

202.66End of
June
2006

92.18

201,808.72 218,734.67

163.65End of
June
2005

40.73

Total
leasable
floor
space
(m2 )

125.79End ofJune
2004

Portfolio Diversification by Region
Tokyo CBDs

Greater Tokyo

Value breakdownby acquisition price

Other Cities

Other cities
Value breakdownby monthly rental revenue
at period end

Tokyo CBDs

35.9％

45.1％

（￥75,107 million）（￥94,461 million）

Other Cities

Tokyo CBDs

37.2％（￥511 million）

37.5％（￥516 million）

Value breakdownby leased floor spaceat period end

Other Cities
44.6％

26.3％
2

（137,838.68m ）25.4％（￥349 million）

19.0％（￥39,655 million）（81,198.44m2 ）29.1％（90,054.18m2 ）Greater Tokyo

Gr
eat
erTokyoGreater Tokyo

Tokyo CBDs

Portfolio Diversification by Asset Class
Retail properties

Office buildings

Value breakdownby monthly rental revenue
at period end

Value breakdownby acquisition price

Retail properties
30.5％（￥63,810 million） Office buildings

69.5％

Retail properties
27.2％（￥374 million）
Office buildings
72.8％（￥1,002 million）（￥145,413 million）

Value breakdownby leased floor spaceat period end

Retail properties
38.4％
2 Office buildings（118,618.47m ）61.6％
2（190,472.83m ）Major Tenants#

Property

TenantLeased floor areaat period end (m 2 )Percentage of totalleased floor areaat period end

1

The Seiyu, Ltd.

Tanashi ASTA, Tsurumi fuga 1

40,700.31

13.2%

2

ABC Development Corporation

Housing Design Center Kobe

35,444.13

11.5%

3

The Loft Co., Ltd.

JPR Umeda Loft Bldg.

18,586.97

6.0%

4

Shinjuku Square Tower Management Co., Ltd.

Shinjuku Square Tower

10,982.03

3.6%

5

TOWER RECORDS JAPAN INC.

JPR Shibuya Tower Records Bldg.

8,076.85

2.6%

6

UFJ Central Leasing Co., Ltd.

UFJ Central Leasing Head Office Bldg.

7,123.07

2.3%

6,432.52

2.1%

Kawaguchi Center Bldg.,

7

Sompo Japan Insurance Inc.

Sompo Japan Sendai Bldg.,
Sompo Japan Wakayama Bldg.

8

The Maruetsu, Inc.

Cupo-la Main Building

5,963.00

1.9%

9Iwatani International Corporation

Tokyo Tatemono Honmachi Bldg.

5,959.86

1.9%

10

Benetton Japan Co., Ltd.

Benetton Shinsaibashi Bldg.

5,303.98

1.7%(Note) Areas of co-ownership buildings indicate those of portions owned by JPR.

7

Property Portfolio
A

Tokyo CBDs

Chiyoda,Chuo,Mi
nat
o,Shi
nj
uku
Shi
nagawaandShi
buyaWar
ds

Al
lot
herar
easofTokyoand Chiba,

B Greater Tokyo KanagawaandSaitamaPrefectures
A Tokyo CBDs

A-1
A-2
A-3
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
A-12
A-13
A-1
A-2
A-3

Kanematsu Bldg.

8

Other Cities

Al
lot
herar
easi
nJ
apan

Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.

A Tokyo CBDs

Gotanda First Bldg.
Fukuoka Bldg.
JPR Ichigaya Bldg.

Shinjuku Ward

Oval Court Ohsaki Mark West
Shinjuku Square Tower

ChiyodaWard

Shibuya Ward

BYGS Shinjuku Bldg.

Chuo Ward
Minato Ward

Across Shinkawa Bldg. Annex
JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432

B Greater Tokyo

B-1
B-2
B-3
B-5
B-6
B-7
B-8
B-1
B-2
B-3

C

Arca East
JPR Chiba Bldg.

Shinagawa Ward

B Greater Tokyo
SAITAMACHIBA

JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.

TOKYO

JPR Ueno East Bldg.
Tachikawa Business Center Bldg.
Tanashi ASTA
Tsurumi fuga 1
Cupo-la Main Building

KANAGAWAC Other Cities

C-1
C-2
C-4
C-6
C-7
C-9
C-10
C-12
C-13
C-14
C-16
C-17
C-18
C-19
C-1
C-2
C-3
C-4

HOKKAIDO

Niigata Ekinan Center Bldg.
Meiji Yasuda Life Osaka Umeda Bldg.
Tokyo Tatemono Honmachi Bldg.
JPR Takamatsu Bldg.
JPR Hakata Bldg.

C Other Cities

JPR Naha Bldg.
NORTH 33 Bldg.

TOHOKU

HOKURIKU

Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Nagoya Sakae Bldg.

CHUGOKU

Dojima F Bldg.

A

OSAKA

Semba Fukuoka Bldg.

B

CHUBU

UFJ Central Leasing Head Office Bldg.
JPR Umeda Loft Bldg.

SHIKOKU
KYUSHU

Strasse Ichibancho

KINKI

Benetton Shinsaibashi Bldg.
Housing Design Center Kobe

Acquisitions in the 10th and 11th Fiscal Periods
ChayamachiGr
andeBui
l
di
ng

Ri
s
eAr
enaBui
l
di
ng
(
Hi
gas
hi
I
kebukuro4chomeRedevel
opmentPr
oj
ect)

Property Acquired in the 10th Fiscal Period

Ret
ai
l

Property to be Acquired in the 11th Fiscal Period

10th C 5
Location

Osaka City, Osaka

Acquisition dateAugust 30, 2006

Acquisition price￥6,000 million

Site area

592.45m2

Gloss total floor area

3,219.36m2

Structure

S/SRC

Floors9F

Completion dateJune 1994

Of
f
i
ce

11th B

Location

Toshima Ward, Tokyo

Acquisition date

March 2007 (planned)

Acquisition price￥5,467 million (planned)

Site area

9,377.28m2

Gloss total floor area

37,596.19m2

Structure

S/SRC/RC

FloorsB2/15F

Completion

January 2007 (planned)

Type of ownership:Land

Co-ownership (15.9% of the total site)

Building

Unit ownership (10F

12F)

Co-ownership (9F [partial])(Note) The image of the property is based on architectural designs and plans.
The actual property may differ from the image provided following construction completion.

9

Location
Category

Tokyo
CBDs

Asset
Class

No.

OfficeA-1

Kanematsu Bldg.

Office

A-2

OfficeName

Location

Completed

Acquired

Chuo Ward, Tokyo

1993. 2

2001.12

Kanematsu Bldg. Annex

Chuo Ward, Tokyo

1993. 2

2001.12A-3

JPR Ningyo-cho Bldg.

Chuo Ward, Tokyo

1989.122001.11

OfficeA-4

Shin-Kojimachi Bldg.

Chiyoda Ward, Tokyo

1984.10

2001.11〜2004.11

OfficeA-5

JPR Crest Takebashi Bldg.

Chiyoda Ward, Tokyo

1999. 92002. 6

OfficeA-6

MS Shibaura Bldg.

Minato Ward, Tokyo

1988. 2

2003. 3

OfficeA-7

Gotanda First Bldg.

Shinagawa Ward, Tokyo

1989. 7

2003. 7

OfficeA-8

Fukuoka Bldg.

Chuo Ward, Tokyo

1990. 5

2003.10〜
2005. 4

OfficeA-9

JPR Ichigaya Bldg.

Chiyoda Ward, Tokyo

1989. 3

2004. 5

OfficeA-10

Oval Court Ohsaki Mark West

Shinagawa Ward, Tokyo

2001. 6

2004. 6

OfficeA-11

Shinjuku Square Tower

Shinjuku Ward, Tokyo

1994.10

2004. 7

OfficeA-12

BYGS Shinjuku Bldg.

Shinjuku Ward, Tokyo

1985. 4

2004.11〜
2005. 4

OfficeA-13

Across Shinkawa Bldg. Annex

Chuo Ward, Tokyo

1994. 6

2004.11RetailA-1

JPR Shibuya Tower Records Bldg.

Shibuya Ward, Tokyo

1992. 2

2003. 6

RetailA-2

JPR Daikanyama

Shibuya Ward, Tokyo

2002. 7

2004.10RetailA-3

JPR Jingumae 432

Shibuya Ward, Tokyo

2006. 2

2006. 3

OfficeB-1

Arca East

Sumida Ward, Tokyo

1997. 3

2001.11

OfficeB-2

JPR Chiba Bldg.

Chiba City, Chiba

1991. 1

2001.12

OfficeB-3

JPR Yokohama Nihon Odori Bldg.

Yokohama City, Kanagawa

1989.10

2001.11

OfficeB-5

Shinyokohama 2nd Center Bldg.

Yokohama City, Kanagawa

1991. 8

2002. 9

OfficeB-6

Kawaguchi Center Bldg.

Kawaguchi City, Saitama

1994. 2

2004. 2

OfficeB-7

JPR Ueno East Bldg.

Taito Ward, Tokyo

1992.10

2004. 3

OfficeB-8

Tachikawa Business Center Bldg.

Tachikawa City, Tokyo

1994.122005. 9RetailB-1

Tanashi ASTA

Nishitokyo City, Tokyo

1995. 2

2001.11RetailB-2

Tsurumi fuga 1

Yokohama City, Kanagawa

1985. 92001.11RetailB-3

Cupo-la Main Building

Kawaguchi City, Saitama

2006. 1

2006. 3

Total

Greater
Tokyo

Total
Notes: (1) Acquisition price does not include miscellaneous expenses of acquisition (real estate transaction brokerage fee and consumption tax).
(2) Percentages and ratios are rounded to the first decimal point.
(3) The ratio of proprietary ownership is shown on the deed for the land.
(4) Cupo-la Main Building is leased to single tenants.
JPR was unable to obtain the tenants' approval to disclose rental information.

10

Acquisition
price (1)(millionsof yen)Percentage
of Total(2)

Ownership(3) (%)

Site Area(m 2 )

Total Leasable
Floor Space(m2 )(JPR's portion)

Occupancy
Rate (2)

No. ofTenants

Rentalrevenue(thousandsof yen)Percentage
of
Total (2)16,276

7.8

79.4

1,751.13

7,994.02

100.0

10

439,467

5.1

2,874

1.4

79.4

679.06

2,291.13

100.0

1102,721

1.2

2,100

1.0

100.0

550.062,788.98

100.0

498,477

1.2

2,420

1.2

77.3

657.8

3,319.33

84.8

10

118,801

1.4

4,000

1.9

100.0

636.9

3,265.34100.0

9127,045

1.5

11,2005.4

36.0

8,992.18

14,429.09

100.0

8

529,991

6.2

2,920

1.4

61.8

1,551.19

4,243.58

100.0

2132,815

1.6

2,920

1.4

21.8

1,302.17

1,937.40

100.0

2

102,489

1.2

5,100

2.4

100.0

1,058.04

4,186.09

100.0

9

182,763

2.1

3,500

1.7

27.1

4,006.00

4,088.44

100.0

4

170,518

2.0

10,0004.8

29.3

8,409.52

10,982.03

98.8

25

277,465

3.2

11,821

5.6

75.0

3,522.46

11,357.50

98.3

25

449,609

5.3

710

0.3

100.0

858.481,253.39

100.0

446,2450.5

12,0005.7

100.0

1,010.47

8,076.85

100.0

1345,576

4.0

2,160

1.0

100.0

277.12653.99100.0

447,132

0.6

4,460

2.1

100.0

218.21

1,027.33

100.0

549,237

0.6

94,46145.1

35,480.79

81,894.49

99.0

123

5,880

2.8

41.1

3,755.01

7,022.76

100.0

6

253,745

3.0

2,350

1.1

100.0

1,382.35

5,562.97

89.5

26

135,338

1.6

2,927

1.4

100.0

1,100.59

6,066.53

97.5

11

138,288

1.6

920

0.4

50.0

841.712,641.19

100.0

15

74,231

0.9

8,100

3.9

86.5

4,524.61

15,461.98

98.0

37

486,763

5.7

3,250

1.6

100.0

1,242.97

6,512.45

90.9

8

188,623

2.2

888

0.4

16.9

2,047.22

1,747.13

100.0

456,8990.7

10,2004.9

42.1

12,326.30

31,121.71

100.0

1

596,400

7.0

3,040

1.5

64.4

1,962.18

9,578.60

100.0

1145,200

1.7

2,100

1.0

7.3

15,008.28

5,963.00

100.0

1(Note 4)(Note 4)39,65519.0

44,191.22

91,678.32

98.2

110

11

OtherCities

Asset
Class

No.

OfficeC-1

Niigata Ekinan Center Bldg.

Office

C-2

OfficeName

Location

Completed

AcquiredNiigata City, Niigata

1996. 3

2001.11

Meiji Yasuda Life Osaka Umeda Bldg.

Osaka City, Osaka

2000. 6

2001.12

C-4

Tokyo Tatemono Honmachi Bldg.

Osaka City, Osaka

1970. 2

2001.11

OfficeC-6

JPR Takamatsu Bldg.

Takamatsu City, Kagawa

1982. 92001.12

OfficeC-7

JPR Hakata Bldg.

Fukuoka City, Fukuoka

1985. 6

2001.11

OfficeC-9

JPR Naha Bldg.

Naha City, Okinawa

1991.10

2001.11

OfficeC-10

NORTH 33 Bldg.

Sapporo City, Hokkaido

1992. 2

2002. 6

OfficeC-12

Sompo Japan Sendai Bldg.

Sendai City, Miyagi

1997.12

2002. 6

OfficeC-13

Sompo Japan Wakayama Bldg.

Wakayama City, Wakayama

1996. 7

2002. 6

OfficeC-14

Tenjin 121 Bldg.

Fukuoka City, Fukuoka

2000. 7

2002. 6

OfficeC-16

JPR Nagoya Sakae Bldg.

Nagoya City, Aichi

B 2003.1
P 1986.12

2003. 9

OfficeC-17

Dojima F Bldg.

Osaka City, Osaka

1993.10

2004. 1

OfficeC-18

Semba Fukuoka Bldg.

Fukuoka City, Fukuoka

1993. 2

2004. 6

Office

C-19

UFJ Central Leasing Head Office Bldg. Nagoya City, Aichi

1991. 32005. 3RetailC-1

JPR Umeda Loft Bldg.

Osaka City, Osaka

1990. 4

2003.5_7

RetailC-2

Strasse Ichibancho

Sendai City, Miyagi

2002.10

2005. 2RetailC-3

Benetton Shinsaibashi Bldg.

Osaka City, Osaka

2003. 2

2005. 5RetailC-4

Housing Design Center Kobe

Kobe City, Hyogo

1994. 6

2005. 9

Total
Total

B Building
P ParkingNotes: (1) Acquisition price does not include miscellaneous expenses of acquisition (real estate transaction brokerage fee and consumption tax).
(2) Percentages and ratios are rounded to the first decimal point.
(3) The ratio of proprietary ownership is shown on the deed for the land.
(4) The Benetton Shinsaibashi Building and the Housing Design Center Kobe are leased to single tenants.
JPR was unable to obtain the tenants' approval to disclose rental information.

12

No. oftenants

RentalRevenue(thousandsof yen)Percentage
of
Total (2)

100.0

11

133,1681.6

9,600.62

98.5

27

358,652

4.2

1,432.64

7,210.25

97.3

9251,550

2.9

100.0

1,407.78

5,037.06

80.5

28

88,009

1.0

1.4

100.0

1,214.63

6,581.15

81.5

26

144,595

1.7

1,560

0.7

100.0

959.87

3,947.69

95.3

16

101,315

1.2

3,700

1.8

100.0

1,382.12

6,642.98

95.5

23

168,978

2.0

3,150

1.5

100.0

1,895.67

7,118.60

97.1

15

197,319

2.3

1,670

0.8

100.0

1,128.45

4,874.91

95.1

17

114,903

1.3

2,810

1.3

52.2

1,164.39

3,292.02

91.5

14

109,757

1.3

4,550

2.2

100.0

992.31

5,461.90

100.0

21

218,083

2.5

2,140

1.0

100.0

668.11

3,941.40

100.0

11

118,205

1.4

1,920

0.9

100.0

680.63

3,349.57

100.0

682,344

1.0

4,137

2.0

100.0

1,610.38

7,123.07

100.0

1

190,7102.2

13,0006.2

100.0

3,518.68

18,586.97

100.0

1

402,413

4.7

4,200

2.0

100.0

648.81

2,861.91

100.0

1

128,388

1.5

5,430

2.6

100.0

609.315,303.98

100.0

1(Note 4)(Note 4)

7,220

3.5

100.0

3,994.47

35,444.13

100.0

1

(Note 4)(Note 4)

75,10735.9

32,014.57

141,584.03

97.4

229

209,223

100.0

111,686.58

315,156.84

98.0

462

8,552,819

100.0

Acquisition
price (1)(millionsof yen)Percentage
of Total(2)

Ownership(3) (%)

Site Area(m 2 )

Total Leasable
Floor Space(m 2 )(JPR's portion)

Occupancy
Rate (2)

2,140

1.0

52.7

2,706.99

5,205.82

8,300

4.0

33.3

5,999.33

4,150

2.0

64.3

2,130

1.0

2,900

13

Overview of Portfolio Properties (as of June 30, 2006)
Tokyo CBDs

A 1

Kanematsu Bldg.

A 2

Kanematsu Bldg. Annex

Chuo Ward, Tokyo

Chuo Ward, Tokyo

Acquisition Price

Acquisition Price

Percentage of Total

Percentage of Total￥16,276 million

Site Area￥2,874 million

7.8%

1.4%
Site Area

2

1,751.13m

Total Floor Space

679.06m2
Total Floor Space2

14,995.09m

4,351.46m2

Structure / Floors

Structure / Floors

Completed

Completed

S/RC/SRC B2/13F

SRC B1/8F

February 1993

A 3

JPR Ningyo-cho Bldg.

February 1993

A 4

Shin-Kojimachi Bldg.

Chuo Ward, Tokyo

Chiyoda Ward, Tokyo

Acquisition Price

Acquisition Price￥2,100 million￥2,420 million

Percentage of Total

Percentage of Total

1.0%
Site Area

1.2%
Site Area22550.06m
Total Floor Space

657.80m
Total Floor Space2

4,117.70m

5,152.98m2

Structure / Floors

Structure / Floors

SRC/RC B1/8F

SRC B1/9F

Completed

Completed

December 1989

A 5

JPR Crest Takebashi Bldg.

October 1984

A 6

MS Shibaura Bldg.

Chiyoda Ward, Tokyo
Acquisition Price

Minato Ward, Tokyo
Acquisition Price￥4,000 million
Percentage of Total￥11,200 million
Percentage of Total

5.4%

1.9%
Site Area

2

Site Area

8,992.18m2

636.90m
Total Floor Space2

Total Floor Space

Structure / Floors

SRC B1/9F
Completed

September 1999

14

2

31,020.21m

4,790.68m

Structure / Floors

SRC/RC/S B2/13F
CompletedFebruary 1988

A 7

Gotanda First Bldg.

A 8

Fukuoka Bldg.

Chuo Ward, Tokyo

Shinagawa Ward, Tokyo
Acquisition Price

Acquisition Price￥2,920 million￥2,920 million
Percentage of Total

Percentage of Total

1.4%

1.4%
Site Area

Site Area

221,302.17m

1,551.19m
Total Floor Space

Total Floor Space2

11,627.74m

10,553.34m2
Structure / Floors

Structure / Floors

SRC B2/10F

SRC/RC B2/11F
Completed

CompletedMay 1990

July 1989

A 9

JPR Ichigaya Bldg.

A 10

Oval Court Ohsaki Mark West

Shinagawa Ward, Tokyo

Chiyoda Ward, Tokyo
Acquisition Price

Acquisition Price￥5,100 million￥3,500 million

Percentage of Total

Percentage of Total

2.4%
Site Area

1.7%
Site Area

2

1,058.04m

2

4,006.00m

Total Floor Space

Total Floor Space

5,888.82m2

28,575.80m2

Structure / Floors

Structure / Floors

SRC B1/9F

S/SRC B2/17F

Completed

Completed

March 1989

A 11

Shinjuku Square Tower

June 2001

A 12

BYGS Shinjuku Bldg.

Shinjuku Ward, Tokyo
Acquisition Price

Shinjuku Ward, Tokyo
Acquisition Price￥10,000 million
Percentage of Total￥11,821 million
Percentage of Total

4.8%
Site Area2

5.6%
Site Area

8,409.52m
Total Floor Space

Total Floor Space

78,796.00m2
Structure / Floors

25,733.10m2
Structure / Floors

S/RC/SRC B4/30F
Completed23,522.46m

SRC B2/14F
Completed

October 1994

April 1985

15

JPR Shibuya Tower Records Bldg.

A 13

Across Shinkawa Bldg. Annex

A 1(Retail)

Chuo Ward, Tokyo

Shibuya Ward, Tokyo

Acquisition Price

Acquisition Price￥12,000 million￥710 million
Percentage of Total

Percentage of Total

5.7%

0.3%
Site Area

Site Area221,010.47m

858.48m
Total Floor Space

Total Floor Space2

2

8,449.56m

5,535.90m
Structure / Floors

Structure / Floors

SRC/S B3/8F

S/SRC B2/10F
Completed

CompletedFebruary 1992

June 1994

Greater TokyoA 2

JPR Daikanyama (Retail)B 1

Arca East

Shibuya Ward, Tokyo
Acquisition Price

Sumida Ward, Tokyo
Acquisition Price￥2,160 million
Percentage of Total￥ 5,880 million
Percentage of Total

1.0%
Site Area2

2.8%
Site Area2

277.12m
Total Floor Space2

3,755.01m
Total Floor Space2

668.09m
Structure / Floors

34,281.86m
Structure / Floors

RC B2/2F
Completed

S/SRC B3/19F
Completed

July 2002

B 2

JPR Chiba Bldg.

March 1997

B 3

JPR Yokohama Nihon Odori Bldg.

Chiba City, Chiba
Acquisition Price

Yokohama City, Kanagawa
Acquisition Price￥2,350 million
Percentage of Total￥2,927 million
Percentage of Total

1.1%
Site Area2

1.4%
Site Area
2

1,382.35m
Total Floor Space

1,100.59m
Total Floor Space2

2

9,072.57m
Structure / Floors

9,146.52m
Structure / Floors

S/SRC B1/13F
Completed

Completed

January 199116

SRC B1/11F
October 1989

B 6

Kawaguchi Center Bldg.

B 5

Shinyokohama 2nd Center Bldg.

Yokohama City, Kanagawa
Acquisition Price

Kawaguchi City, Saitama
Acquisition Price￥8,100 million￥920 million
Percentage of Total

Percentage of Total

3.9%

0.4%
Site Area

2

Site Area

24,524.61m

841.71m
Total Floor Space2

Total Floor Space

Structure / Floors

228,420.85m

7,781.93m

Structure / Floors

S/SRC B2/15F

S/SRC B2/12F
Completed

CompletedFebruary 1994

August 1991

B 7

JPR Ueno East Bldg.

B 8

Tachikawa Business Center Bldg.

Taito Ward, Tokyo

Tachikawa City, Tokyo

Acquisition Price

Acquisition Price

Percentage of Total

Percentage of Total￥3,250 million￥888 million

1.6%
Site Area2

0.4%
Site Area

2

1,242.97m
Total Floor Space2

2,047.22m
Total Floor Space

8,490.44m
Structure / Floors

2

14,706.36m
Structure / Floors

S/SRC B1/8F
Completed

S/SRC B1/12F
Completed

October 1992

B 1

Tanashi ASTA (Retail)December 1994

B

Tsurumi fuga 1 (Retail)Nishitokyo City, Tokyo

Yokohama, Kanagawa

Acquisition Price

Acquisition Price

Percentage of Total

Percentage of Total￥10,200 million

Site Area

4.9%
2

12,326.30m

Total Floor Space2

80,675.27m￥3,040 million
1.5%

Site Area

2

1,962.18m
Total Floor Space

Structure / Floors

Completed

CompletedFebruary 1995

2

13,543.32m

Structure / Floors

SRC B2/17F

2

SRC B2/7F
September 1985

17

Other Cities

Niigata Ekinan Center Bldg.

C 1

C 2

Meiji Yasuda Life Osaka Umeda Bldg.

Osaka City, Osaka

Niigata City, Niigata
Acquisition Price

Acquisition Price

Percentage of Total

Percentage of Total￥2,140 million

Site Area￥8,300 million

1.0%

4.0%
Site Area

22,706.99m

Total Floor Space2

5,999.33m
Total Floor Space2

19,950.42m

252,982.94m

Structure / Floors

Structure / Floors

Completed

Completed

S/SRC B1/10F

S/SRC B2/31F

March 1996

C 4

Tokyo Tatemono Honmachi Bldg.

June 2000

C 6

JPR Takamatsu Bldg.

Takamatsu City, Kagawa

Osaka City, Osaka
Acquisition Price

Acquisition Price￥2,130 million￥4,150 million
Percentage of Total

Percentage of Total

1.0%

2.0%
Site Area

Site Area

1,407.78m2

1,432.64m2
Total Floor Space

Total Floor Space

Structure / Floors

Structure / Floors

SRC B1/10F

SRC B3/9F
Completed

Completed

September 1982

February 1970

C 7

JPR Hakata Bldg.

Acquisition Price￥2,900 million
Percentage of Total

1.4%
Site Area
2

1,214.63m
Total Floor Space

2

9,828.73m
Structure / Floors

S/RC B1/12F
S 1F

Completed

Building
June 1985
Parking November 2003

18

C 9

JPR Naha Bldg.

Fukuoka City, Fukuoka

Building
Parking

2

7,409.08m

14,619.52m2

Naha City, Okinawa
Acquisition Price￥1,560 million
Percentage of Total

0.7%
Site Area

959.87m2
Total Floor Space

5,780.71m2
Structure / Floors

SRC/S 12F
Completed

October 1991

C 10

NORTH 33 Bldg.

C 12

Sompo Japan Sendai Bldg.

Sapporo City, Hokkaido

Sendai City, Miyagi

Acquisition Price

Acquisition Price￥3,700 million￥3,150 million

Percentage of Total

Percentage of Total

1.8%

1.5%

Site Area

Site Area
2

1,382.12m2

1,895.67m

Total Floor Space

Total Floor Space2

10,568.23m2

10,783.52m

Structure / Floors

Structure / Floors

SRC B1/12F

SRC B1/12F

Completed

CompletedFebruary 1992

C 13

Sompo Japan Wakayama Bldg.

December 1997

C 14

Tenjin 121 Bldg.

Fukuoka City, Fukuoka

Wakayama City, Wakayama
Acquisition Price

Acquisition Price￥2,810 million￥1,670 million
Percentage of Total

Percentage of Total

1.3%

0.8%
Site Area

Site Area

22

1,164.39m

1,128.45m
Total Floor Space

Total Floor Space2

8,690.95m

6,715.07m2
Structure / Floors

Structure / Floors

S/SRC 13F

S 9F
Completed

Completed

July 2000

July 1996

C 16

JPR Nagoya Sakae Bldg.

C 17

Dojima F Bldg.

Osaka City, Osaka

Nagoya City, Aichi
Acquisition Price

Acquisition Price￥4,550 million
Percentage of Total￥2,140 million
Percentage of Total

2.2%
Site Area

1.0%
Site Area2

2

992.31m
Total Floor Space668.11m
Total Floor Space2

7,340.18m
Structure / Floors

Building
Parking

S B1/11F
S 1F

Completed

January 2003
Building
Parking December 1986

5,696.01m2
Structure / Floors

SRC B2/9F
Completed

October 1993

19

C 18

Semba Fukuoka Bldg.

C 19

UFJ Central Leasing Head Office Bldg.

Fukuoka City, Fukuoka
Acquisition Price

Nagoya City, Aichi
Acquisition Price￥4,137 million￥1,920 million
Percentage of Total

Percentage of Total

2.0%

0.9%
Site Area

2

Site Area

2

1,610.38m

680.63m
Total Floor Space2

Total Floor Space

Structure / Floors

2

10,201.44m

3,874.81m

Structure / Floors

SRC B1/9F

SRC 8F
Completed

Completed

March 1991

February 1993C 1

JPR Umeda Loft Bldg. (Retail)C 2Strasse Ichibancho (Retail)Osaka City, Osaka

Sendai City, Miyagi

Acquisition Price

Acquisition Price

Percentage of Total

Percentage of Total￥13,000 million￥4,200 million

6.2%
Site Area2

2.0%
Site Area

3,518.68m
Total Floor Space2

648.81m2
Total Floor Space

17,897.56m
Structure / Floors

Structure / Floors

SRC B1/8F
Completed

RC/S B1/8F
Completed

April 1990

C 3

Benetton Shinsaibashi Bldg. (Retail)

October 2002

C 4

Housing Design Center Kobe (Retail)Osaka City, Osaka

Kobe City, Hyogo

Acquisition Price

Acquisition Price

Percentage of Total

Percentage of Total￥5,430 million

Site Area

2.6%
2

609.31m

Total Floor Space2

5,303.98m

Structure / Floors

S B2/10F

CompletedFebruary 2003

20

2

3,445.80m￥7,220 million

Site Area

3.5%
2

3,994.47m

Total Floor Space2

33,877.71m

Structure / Floors

SRC/S B2/11F

Completed

June 1994

Characteristics and Corporate History
The Objective and Basic Characteristics of JPR
The fundamental investment policy of JPR consists of our investment strategy based on the basic conceptof “investing in urban commercial real estate.” JPR’s investment targets are primarily comprised ofsuperior office buildings (urban work facilities), retail properties located in thriving commercial areas, theland on which they are located and asset-backed securities that have such real estate as their primary
investment. JPR makes investments in properties in which we are convinced that the benefits of portfolio
management can be demonstrated after carefully considering the risks and returns of the investment and
JPR also diversifies its investment geographically by not limiting itself to Tokyo alone but by also
considering assets in other major cities.

Corporate History
Description

Date
September 6, 2001

The founder (Tokyo Realty Investment Management, Inc.) filed
for establishment of the Investment Corporation under the Investment Trust Law

September 14, 2001

Japan Prime Realty Investment Corporation was established

November 16, 2001

Started asset management (acquisition of 13 real estate in trust with underlying trust assets of 11
office buildings and 2 commercial properties) (¥40,730 million in total value)

January 22, 2002

Investment unit split (2.5 units for 1 exiting unit)

June 14, 2002

Listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange

Investment Corporation Structure
Asset Management Company

General Tenant Services Agent/
Property Transfer Agent/
Construction Management AgentTokyo Tatemono Co., Ltd.

Tokyo Realty Investment
Management, Inc.
Asset Management

Asset Management
Invest Corporation

Tenant Agents
Tokyo Tatemono Co., Ltd.
Yasuda Real Estate Co., Ltd.
Taisei Corporation

Japan Prime Realty
Investment Corporation
Loans
Liabilities

Property, etc.

AssetsLenderCorporate Bond Investor

Corporate Bonds

Investment

Unitholder

Unitholders'EquityProperty Manager

Cash Distribution
Asset Custodian

Asset Custodian
Mizuho Trust & Banking Co., Ltd.

Unitholder

Administrative Agent
Administrative Agent
Mizuho Trust & Banking Co., Ltd.

21

Members of the Board (As of June 30, 2006)

Executive Officer

Hirohito Kaneko
Dec. 19, 2001 Executive Officer of Japan Prime Realty Investment Corporation
Apr. 1, 1979 Representative Counsel (currently held position) of Hirohito Kaneko Law Office
Apr. 1, 1977 Bar admission (Tokyo Bar Association)Shigeru Yamada Law Office
Supervising Officer

Sosuke Yasuda
Jun. 23, 2006
Jun. 28, 2005
Sep. 14, 2001
Oct. 1, 1999
Jul. 2, 1993
Feb. 16, 1983
Jun. 27, 1980
Dec. 1, 1975
Apr. 1, 1968

Outside Auditor, Nomura Research Institute, Ltd. (currently held position)
Outside Auditor, Mitsui Sumitomo Insurance Company, Limited (currently held position)
Supervising Officer, Japan Prime Realty Investment Corporation
Director and Senior Partner (currently held position), Tokyo Hokuto & Co.
(Tokyo Akasaka Audit Co. merged with Hokuto Audit Co. )Senior Partner, Tokyo Akasaka Audit Co.
Representative of Tokyo Akasaka CPA Joint Office
Sosuke Yasuda Tax Accountant Office (currently held position)
Masamitsu Serizawa Accounting Firm
Main Store, KK Ohgiya

Supervising Officer

Shigeru SugimotoJan. 24, 2006

Representative Director (currently held position) of SAKURA Holdings Corporation(former Sakura Holdings Co., Ltd.)
Sep. 14, 2001 Supervising Officer, Japan Prime Realty Investment Corporation
Auditor, Moriomoto Co., Ltd. (currently held position)
Jun. 1, 2001
Representative Director of Tokyo SPC Services (currently held position)
Oct. 2, 1999
Jun. 24, 1998 Senior Partner (currently held position) of Horwath Sakura & Co.
(former Sakura Audit Corporation)
Dec. 1, 1996 Horwath International
Dec. 22, 1995 Representative Partner, Sakura Audit Corporation
Representative Director of Sakura & Co. (currently held position)
Jul. 1, 1988
Nov. 1, 1985 Ohta Showa Audit Corporation
Apr. 1, 1982 Housing and Urban Development Public Corporation (currently Urban Renaissance Agency)

22

Overview of the Asset Manager
Corporate Profile
Name

Tokyo Realty Investment Management, Inc. (TRIM)

Core Business

Asset management for investment corporation

Capitalization

350 million yen

Shareholders

Tokyo Tatemono Co., Ltd. (26%)
Meiji Yasuda Life Insurance Company (24%)
Taisei Corporation (20%)
Yasuda Real Estate Co., Ltd. (20%)
Sompo Japan Insurance Inc. (10%)

History
Organization

April 28, 2000 Founded
October 13, 2000 Approved for real estate transaction service
March 16, 2001 Approved as discretionary transaction agent
April 23, 2001 Approved as comprehensive real estate investment advisor
June 20, 2001 Approved for asset management of investment corporation

Services(1) Asset management for JPR (including all decision-making in connection
with the acquisition/disposition or leasing of properties
and acting as an agent or broker of such transactions basedon relevant evaluation and judgment),(2) Funding by JPR,
(3) Reporting to JPR, and(4) Any other services related to or affiliated with the above.

Organization

Shareholder's Meeting

Auditors

Board of Directors
CEO
Investment Committee

Compliance Committee

Investment Management
Division

ResearchGroup

Investment
Group

Corporate Plannig/
Administration Division

Financial Division

Asset
Management
Group

FinancialGroup

IR Group

FundManagement
Group

GeneralAdministrationGroup

Planning
Group

ComplianceGroup

TRIM's Decision-Making Process of Investment Management

The Investment Committee is a committee to make investment decisions along with its sub-organizations, the Investment
Subcommittee and the Fund Management Subcommittee. Members of these committees and subcommittees include
the CEO, CIO, CFO, CAO, Fund Manager, Research Manager, Asset Manager, Investment Management Manager, and otherrelated Group managers.
The Investment Committee formulates long-term fundamental investment policies within two fiscal periods, while theInvestment Subcommittee is in charge of decisions on issues regarding acquisitions and dispositions. The Fund Management
Committee is responsible for issues regarding the management of individual assets. The Board of Directors is given the
final authorization on acquisitions and dispositions of individual assets of a certain amount.

23

Directors of Tokyo Realty Investment Management, Inc.
President and CEO

Toshihiro Hagiwara
Jan. 23, 2001
Apr. 1, 1999
Jan. 1, 1998

President, Tokyo Realty Investment Management, Inc.
Director and Head of Osaka Branch Office
Head, Development Business Department of Kinshicho Project (Tokyo); Led negotiations
for city planning of large-scale developments of more than 28,000m2
Director, Secretary’s Office and Human Resources
Planning of redevelopment scheme connecting Akihabara and Okachimachi (Tokyo) for JR
East Urban Development Corporation (Joint Venture with The East Japan Railway Company)
Property management and acquisition businesses of Building Department
Joined Tokyo Tatemono Co., Ltd.

Mar. 28, 1992
Apr. 20, 1989
Jul. 1, 1985
Apr. 1, 1968

Director and Chief Administrative Officer

Kazuo Kitami

Oct. 1, 2004
Apr. 1, 1997

Director and Chief Administrative Officer, Tokyo Realty Investment Management, Inc.
Manager, Credit Assessment Dept. 2 of the Management and Administration Division; Responsible
for loan administration and credit administration involved in the bulk sale of non-performing
loans and participated in self-assessment and formulation of the insurance investigation manual;Manager, Loan Administration between August 2000 and March 2003, responsible forloan-related accounting

Apr. 1, 1995
Sep. 1, 1989

Manager of Real Estate Development and responsible for overall operations
Manager of Real Estate Development Dept. of the Real Estate Division; Involved in real estate
investment activities, property leasing and property management
Asset Management Division (Loans, Real Estate and Other), engaged in loan front office
operations and participated in the establishment of a leasing subsidiary
Joined the Yasuda Mutual Life Insurance Company (currently Meiji Yasuda Life Insurance Company)

Mar. 1, 1977
Apr. 1, 1975

Director and Chief Investment Officer

Seiji Miwa
Mar. 30, 2006
Oct. 1, 2004
Jul. 1, 2003
Jan. 1, 2000

Jul. 1, 1998

Apr. 1, 1991
Apr. 1, 1989
Apr. 1, 1983

Director and Chief Investment Officer
General Manager, Investment Management Division (responsible for Asset Management Group)
Joined Tokyo Realty Investment Management, Inc.
Engaged in activities relating to the establishment of a J-REIT; Appointed Group Leader, responsible
for preparations for the establishment of an asset manager and Japan Prime Realty Investment
Corporation; Appointed a member of a J-REIT project team responsible for the acquisition ofassets for the Tokyo Tatemono Group and growing the portfolio up to the public listing; During thisperiod, assumed responsibility for the development of real estate investment structures including
real estate syndications and structured finance; Participated in forming structures for investment
and development using SPCsManager, Investment Service Department (currently the Investment Management Division);
responsible for the securitization of serviced apartments, establishment of Takanawa Apartments
Inc. (SPC), which was Japan’s first real estate securitization project, the formulation of securitizationplans, the issuance of real estate securities and obtaining a credit rating from Standard & Poor’s
for the issuance of qualified bonds.
Assistant Manager, Development Department 1
Assigned to Development Department 1
Joined Tokyo Tatemono Co., Ltd.

Director and Chief Financial Officer

Yasuo Furuya

Jun. 9, 2006
Apr. 28, 2006
Apr. 1, 2006
Jan. 1, 2004
Apr. 1, 2000
Oct. 21, 1998
Apr. 1, 1997
Apr. 1, 1995
Apr. 1, 1984

Apr. 1, 1983
Apr. 1, 1980

24

Director and Chief Financial Officer
Chief Financial Officer
Tokyo Realty Investment Management, Inc.
Group Manager, Risk Management of Meiji Yasuda Life Insurance Company
Manager, Investment Risk Management Department
Manager, Investment Planning & Research Department
Manager, Investment Administration Department
Manager, Investment Planning & Research Department
Following completion of outside assignment, transferred to the asset management
operations of The Yasuda Mutual Life Insurance Company; Spent eight years in securities
investment operations engaged in interest rate analysis, as well as the establishment of bondinvestment and asset management companies; Undertook activities related to variable insurance
securities management and oversaw securities investment activities as Chief Bond Trader; Later,
gained further experience in stock market investment operations.
Joined the Medium and Small Business Research Institute
Joined the Yasuda Mutual Life Insurance Company (currently Meiji Yasuda Life Insurance Company)

Overview of Asset Management(1) Operational Performance of JPR

Unit
Operating Revenues
Real estate rental revenues
Gain on sale of real estate

Million yen

5th
7th
8th
9th
6th
Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period(Jan. 1, 2004 - (July 1, 2004 - (Jan. 1, 2005 - (July 1, 2005 - (Jan. 1, 2006 June 30, 2004) Dec. 31, 2004) June 30, 2005) Dec. 31, 2005) June 30, 2006)

6,790

7,685

8,503

8,587

8,588

6,790

7,685

7,801

8,372

8,552

702

214

Dividends received

35

Operating
Performance Operating Expenses

3,729

4,216

4,548

4,602

4,564

Million yen

3,268

3,672

3,768

4,044

4,013

Operating Profits

Million yen

3,061

3,469

3,954

3,984

4,024

Recurring Profits

Million yen

2,615

2,869

3,377

3,399

3,450

Net Income

Million yen

2,614

2,868

3,376

3,398

3,449

Total Assets

Million yen

231,523

Real estate rental expenses
Loss on sale of real estate

235(% Change)
Assets, etc.

182,253

198,673

216,574

225,882(+16.4)(+9.0)(+9.0)(+4.3)(+2.5)

Interest-bearing Debt

Million yen

77,166

93,066

83,66690,966

97,466

Total Unitholders' Equity

Million yen

91,72891,982

118,807

118,829

118,881(+0.2)(+0.3)(+29.2)(+0.0)(+0.0)(% Change)
Unitholders' CapitalMillion yen

89,113

89,113

115,431

115,431

115,431

Total Cash Distributions

Million yen

2,614

2,868

3,376

3,397

3,449

%

100.0

99.9

100.0

99.9

100.0

Dividend payment ratio

CashDistribution Number of Units Outstanding
per Unit, etc.
Total Unitholders' Equity per Unit

Units

430,000

430,000

530,000

530,000

530,000

Yen

213,322

213,912224,165

224,206

224,304

6,081

6,671

6,370

6,411

6,509

6,081

6,671

6,370

6,411

6,509

1.5

1.5

1.6

1.5

1.5

3.1

3.0

3.3

3.0

3.0

2.9

3.1

3.2

2.9

2.9

5.7

6.2

6.5

5.7

5.9

91,581

91,72891,982

118,807

118,829

Cash Distribution per Unit
Distribution amount

Yen

Exceeding profit distribution amount

Recurring Profits on Total Assets (Note 1)
Annualized (Note 10)

Return on Total Unitholders' Equity (Note 2-1)
Annualized (Note 10)
Total unitholders' equity
at beginning of period (Note 2-2)

Unitholders' Equity Ratio
at End of Period (Note 3)
Financial
Indices%%Million yen%(Year-on-year increase/decrease)

Interest-Bearing Debt toTotal Assets at End of Period (Note 4)%

DSCR (Note 5)
Net income before interest
and amortization

Million yen

Interest paid (Notes)

NOI from Leasing (Note 7)
Annualized NOI yield (Notes 9 and 10)

NCF from Leasing (Note 8)
Annualized NCF yield (Notes 9 and 10)

Million yen%
Million yen%

Properties Owned (Note 11)
Reference
Information

Number of Tenants

50.3

46.3

54.9

52.6

51.3

(-8.2)(-4.0)(+8.6)(-2.3)(-1.3)

42.3

46.8

38.6

40.3

42.1
9.7
5,585

10.4

9.4

9.3

9.6

4,224

4,771

4,878

5,261

408

510

524

545

574
6,100

4,722

5,404

5,476

5,860

5.8

6.0

5.4

5.6

5.9

4,253

4,939

5,119

5,381

5,785

5.2

5.5

5.1

5.2

5.6

38

42

42

42

44

441

462

437

496

459

Total Leasable Floor Spacem2

256,329.13

273,330.52

281,408.97

Occupancy Rate

%

93.2

95.1

95.4

308,205.26 315,156.84
97.2(Note 1) Recurring profit/(total assets at beginning of period + total assets at end of period)/2(Notes 2-1 and 2-2) Net income/(total unitholders' equity at beginning of period + total unitholders' equity at end of period)/2(Note 3) Total unitholders' equity at end of period/total assets at end of period x 100(Note 4) Interest-bearing debt / total assets at end of period x 100(Note 5) Net income before interest and amortization (excluding gain or loss on sale of real estate)/interest paid
(Note 6) Interest paid in this table includes interest on corporate bonds.
(Note 7) (Real estate rental revenues - real estate rental expenses) + depreciation(Note 8) NOI from leasing - capital expenditures(Note 9) Annualized NOI from leasing/purchase price of property (5th fiscal period: ￥163.65 billion, 6th fiscal period: ￥179.62 bilion, 7th fiscal period: ￥203.43 billion,
8th fiscal period: ￥205.76 billion and 9th fiscal period: ￥209.22 billion)
Annualized NCF from leasing/purchase price of property(Note 10) Annualization is based on 365 days for a year and calculated by using the following management days:
5th fiscal period: 182 days, 6th fiscal period: 184 days, 7th fiscal period: 181 days, 8th fiscal period: 184 days and 9th fiscal period: 181 days
(Note 11) The following properties are counted as one for respective purchases in different fiscal periods: Shin-Kojimachi Bldg. (1st, 2nd and 6th fiscal periods),
Fukuoka Bldg. (4th and 7th fiscal periods), BYGS Shinjuku Bldg. (6th and 7th fiscal periods) and JPR Umeda Loft Bldg. (3rd and 4th fiscal periods).
(Note 12) Any ratio indicated on financial indices are rounded to the first decimal point (except for dividend payment ratio, which is rounded off to the first decimal point.)

98.0

25

(2) 9th Fiscal Period Asset Management
1) Milestones of JPR
Japan Prime Realty Investment Corporation (JPR) was established on September 14, 2001 under theInvestment Trusts and Investment Corporations Law (hereafter, the Investment Trusts Law), and was listedon the Tokyo Stock Exchange Real Estate Investment Trust Section (securities code: 8955) on June 14,
2002, with 289,600 outstanding investment units. JPR made an additional public offering of 140,400
units (including an over allotment of 6,000 units) in July 2003, followed by another public offering of
100,000 units (including over allotment of 5,000 units) in February 2005. These public offerings havebrought the number of investment units issued and outstanding to 530,000 units today. JPR has assigned
the asset management of its portfolio to Tokyo Realty Investment Management, through which JPR aims tomaximize unitholder value by efficiently managing the portfolio of office buildings and retail properties.

2) Management Environment
The Office Building Leasing Market
The recovery of the Japanese economy has increased in its clarity with overall corporate performancesteadily expanding. Demand for offices is strong throughout Japan and especially in large metropolitan
areas, with vacancies dropping. Some cities are struggling to improve the supply-demand balance ofoffice space but as a whole the improvement is clear.
Vacancy rates in the Tokyo CBDs have surpassed a balance in the supply-demand and decreased toaround 3%, irrefutably a lesser's market. In particular, large "Class A" buildings are almost entirely
occupied with both new and renewed rents starting to show signs of rising rates. The sense of shortage
that has emerged among the large buildings, has also led to improved vacancy rates in the small- andmedium-sized buildings.
Among local principal cities, vacancy rates in Sapporo, Sendai, Nagoya, Osaka and Fukuoka all improved,with Nagoya and Osaka falling to below 7%. The speed in this vacancy rate reduction has also accelerated.

The Retail Property Leasing Market
The economic recovery has caused the unemployment rate to drop and the overall employment
environment to take a favorable turn. This is evident in the fact that the hiring of new college graduates
has increased for the fourth consecutive year. The result has been a growth in income and gradualincrease in personal spending. Although some regions continue to lag in their recovery, the increased
personal spending helped to raise sales, though rather gradually, in most sectors of the retail industry,including shopping centers, large retail stores, department stores and supermarkets. The retail property
leasing market in urban areas was relatively strong backed by the active opening and renovation of stores.
There have also been revisions to the three urban planning laws known as the Machi Zukuri Sanpo (Three
City Creation Laws), that will strictly regulate the opening of large stores in suburban areas. The legal
revisions make it even more essential to closely watch market trends hereafter.

The For-Sale Real Estate Market
Low interest rates and a difficult fund management environment have caused a continuous inflow ofinvestment funds (both Japanese and foreign) into the real estate market seeking strong investment
targets. This has caused even more intense competition for deals in the real estate market. In Tokyo CBSs,
expected returns have dropped and property prices soared due to a shortage in excellent investment
properties and proactive investment by foreign capital and other players. On the other hand, this rise in
prices and shortage in available properties in Tokyo has provided a strong impetus to invest in real estatein other cities, leading to increasingly heated real estate investment activities in other parts of Japan.

3) New Property Acquisitions by JPR
JPR has continued to acquire properties based on a rigorous standard for selecting excellent officebuildings and retail properties that can generate stable cash flow and possess the potential for future rent
increases. JPR's key strategy in expanding our portfolio has been to stabilize portfolio earnings andbalance the diversification of the portfolio both by location and asset class. During the ninth period, we
acquired JPR Jingumae 432 (acquisition price of 4.46 billion yen) and Cupo-la Main Building (2.1 billionyen). As a result, the balance of assets under management now totals 44 properties, or 209.22 billion yen
on an acquisition price basis. The total leasable floor space is now 315,156.84m2 and the number oftenants is 462.

264) Operational Management of Portfolio*Brand Strategy
JPR has implemented its brand strategy while pursuing the provision of a comfortable office environment
based on the brand concept known as A/3S (Amenity/Service, Safety and Save Energy). During the 9th
fiscal period, a brand manual was prepared to further spread our thinking about the JPR brand andtraining sessions were conducted for our property management firms. In addition, we created a plan to
conduct a tenant satisfaction survey, which as was conducted last year, with the objective of heightening
management quality and improving tenant services. We applied the results of the tenant satisfaction
survey and administration content checking by the property managers to steadily implement newmeasures for spreading and penetrating the brand including establishing a system for the asset manager
awarding superior property managers and administrative agents.
*Occupancy Rate
JPR took into consideration the trend of rising rents in the office building leasing market and conductedactivities to attract tenants that sought to secure higher rents in addition to just improving occupancy
rates by lessening vacancies.
Our efforts were successful due in part to the overheating and lack of quality properties in Tokyo CBDs
as well as to steady attraction of tenants, and the occupancy of our overall portfolio as of the end of June 2006
rose to 98.0%, a period-on-period increase of 0.8%.

5) Fund Procurement
JPR procured capital this fiscal period to expand our portfolio. This was done using short-termborrowings that emphasized dynamism in the use of funds.
As a result, the balance of total outstanding borrowings as of the end of the 9th fiscal period reached55.46 billion yen, with unsecured corporate bonds now totaling 42.00 billion yen. Of these, long-term
interest-bearing debt with repayment periods of more than one year that hedge against the risk of futurerises in interest rates made up 62.6% of all interest-bearing debt and the average maturity was 4.6 years(Note 1).
As for interest-bearing debt as a whole, the average interest (Note 2) as of the end of this fiscal period was
1.2%, while the interest-bearing debt ratio (Note 3) and the interest-bearing debt to total assets ratio at
end of period (Note 4) for the same period were also 45.8% and 42.1% respectively.
The following is the corporate credit ratings of JPR and ratings of unsecured corporate bonds issued as ofthe end of the 9th fiscal period.

Details of Unsecured Corporate Bonds and Corporate Credit Ratings as of June 30, 2006
Ratings Agency

Corporate Credit Rating

Corporate Bonds(1st to 6th Issuance)

Rating and Investment Information, Inc.

A+ (Stable)

A+

Moody's Investor Services

A3 (Stable)

A3

Standard & Poor's

Long-term: A- (Stable)
Short-term: A-2 (Stable)

A-(Note 1) Average maturity of long-term interest-bearing debt is arrived at by calculating a weight average of maturities
from the end of the 9th fiscal period to the repayment deadlines for long-term interest-bearing debt
with repayment periods of more than one year, based on the balance of each debt.
(Note 2) Average interest is arrived at by calculating a weight average of interest rates as of the end of the 9th fiscal period
based on the balance of each debt.
(Note 3) Interest-bearing debt ratio (%): interest-bearing debt/(interest-bearing debt + Unitholders' capital) x 100(Unitholders' capital: 115.43 billion yen)
(Note 4) Interest-bearing debt to total assets ratio at end of period (%): interest-bearing debt/total assets
at end of period x 100 (total assets at the end of the 9th fiscal period: 231.52 billion yen)27

(3) Additional Offerings, etc.
JPR did not make any additional offerings during the 9th fiscal period and there was no change in unitholders' capital.
The table below indicates offerings provided by JPR prior to the 8th fiscal period.

Date

Number of Units Outstanding

Event

Unitholders' Capital (million yen)

Remarks

Variation

Balance

Variation

Balance

240

240

120

120

(Note 1)

September 14, 2001 Established by private placement

62,00062,24031,00031,120(Note 2)January 22, 2002

Split of investment units

93,360155,600-

31,120(Note 3)June 14, 2002

Initial public offering

134,000

289,600

25,862

56,982(Note 4)

134,400

424,000

30,75887,740(Note 5)

November 16, 2001 Additional private placement

July 15, 2003

Additional public offering

August 9, 2003

Third-party allotment

6,000

430,000

1,373

89,113(Note 6)

February 2, 2005

Additional public offering

95,000525,000

25,001

114,115(Note 7)

March 2, 2005

Third-party allotment

5,000

530,000

1,315

115,431(Note 8)(Note 1) JPR was formed by the investment of three companies -- Tokyo Tatemono Co., Ltd. (100 units), Taisei Corporation (100 units),
and Tokyo Realty Investment Management, Inc. (40 units) -- at 500,000 yen per unit.
(Note 2) Additional offering was made for private placement at 500,000 yen per unit, and JPR acquired 13 beneficiary interests in real estate trustand started management.
(Note 3) A single investment unit was split to 2.5 units.
(Note 4) New investment units were issued through public offering at 200,000 yen per unit (underwriting price of 193,000 yen per unit)
to repay short-term debt and finance acquisition of new specific assets and the like.
(Note 5) New investment units were issued through public offering at 237,160 yen per unit (underwriting price of 228,859 yen per unit)
to repay short-term debt and acquire new specific assets and the like.
(Note 6) New investment units were issued through a third-party allotment at 228,859 yen per unit to repay short-term debt
and acquire new specific assets and the like.
(Note 7) New investment units were issued through public offering at 272,440 yen per unit (underwriting price of 263,177 yen per unit)
to repay short-term debt and acquire new specific assets and the like.
(Note 8) New investment units were issued through a third-party allotment at 263,177 yen per unit to repay short-term debt
and acquire new specific assets and the like.

(4) Cash Distributions
Under the Special Taxation Measures Law of Japan, an investment corporation is allowed to deduct dividends ofaccounting profits paid to investors from its taxable income. In order to have the maximum amount of dividend
distribution to be deducted, JPR determined to distribute all the retained earnings for the 9th fiscal period except for
fractional portions that make distribution per unit at less than 1 yen. As a result, the cash distribution per unitfor the
9th fiscal period was set at 6,509 yen.
(Thousands of yen unless otherwise indicated)

Date
Retained Earnings at End of Period
Internal Reserves
Total Cash Distributions(Cash distribution per unit)
Total Cash Distributions from Net Income(Cash distribution from net income per unit)
Repayment of Paid-in Capital(Repayment of paid-in capital per unit)

28

5thfiscal period(as ofJune 30, 2004)

6th
fiscal period(as ofDecember 31,
2004)

7th
fiscal period(as ofJune 30, 2005)

8th
fiscal period(as ofDecember 31,
2005)

9th
fiscal period(as ofJune 30, 2006)

2,614,881

2,868,599

3,376,139

3,398,137

3,449,967

51

69

39

307

197

2,614,830

2,868,530

3,376,100

3,397,830

3,449,770(6,081 yen)

(6,671 yen)

(6,370 yen)

(6,411 yen)

(6,509 yen)

2,614,830

2,868,530

3,376,100

3,397,830

3,449,770(6,081 yen)

(6,671 yen)

(6,370 yen)

(6,411 yen)

(6,509 yen)

-

-

-

-

-

(-)

(-)

(-)

(-)

(-)

(5) Future Management Policy and Vital Issues
A. Management Projections
The Japanese economy is transforming from a recovery phase to an expansion phase with the enormous
appetite for capital investment among companies and the increase in corporate revenues. This is also
backed by the advancement of the Bank of Japan's basic economic judgment from a steady recovery to a
gradual expansion. The overall employment environment is also improving with more than one job
advertised for each individual seeking a job. The elements are also in place for a rapid escape fromdeflation with the Bank of Japan ending its loose monetary policy in March and ending its zero-interestrate policy for the first time in about six years in July. However, there are also concerns about negative
pressure on corporate revenues including the rising crude oil prices caused by instability in the Middle
East and the rise of other industrial raw material prices.
The recovery is also inconsistent in its appearance. Despite the buoyant turn in the economies of major
metropolises including Tokyo, Osaka and Nagoya, most local cities are only beginning or have yet to see
any improvement and small- and medium-sized companies have a much more severe interpretation of thebusiness climate than major corporations.
In the office building leasing market, vacancies have dropped centering on Tokyo and rents have also
risen in Tokyo CBDs.
In the for-sale real estate market, prices of deals are soaring with expected returns dropping andexpectations for increased rents emerging with the economic recovery. Furthermore a rise in long-term
interest rates caused by the removal of the zero interest policy by the Bank of Japan is unavoidable,
making it even more critical to weight investments by the superiority/inferiority of properties and the
profitability of the investments themselves.
In the real estate investment trust market, the market continues to expand with more investment
corporations (J-REITs) listing, but with the market expansion has come a greater importance placed oncompliance.
Based on the above conditions, JPR shall focus its management efforts on the following points with evengreater emphasis placed on compliance.
1. Acquisition of New Properties
JPR will implement the following policy while emphasizing our investment policy, distributions per unit, etc.
and striving to improve stability through location and asset class diversification and improve the investment
efficiency through an expansion in the portfolio size.
*JPR will focus on and acquire properties that have future potential and are competitive from the perspectiveof medium to long-term management. In considering properties, JPR will emphasize the geographic
superiority and future potential of properties while negotiating price based on a detailed market study andproperty appraisal so that we can acquire the property under appropriate conditions.
*JPR will proactively gather information on development-type properties to ensure a planned acquisition ofsuperior properties and endeavor to secure properties at an early stage through detailed research and risk
analysis to heighten our competitiveness in the acquisition process.
*As for the information route on properties for acquisition, JPR will expand our own proprietary informationroute with the management company and further reinforce the relationship with existing information routes
to ensure the fast acquisition of good quality information.
JPR will continue to strive to expand our portfolio by acquiring solid new properties via a proactive
acquisition of information and carefully researched investment value including determining the future
potential by accurately grasping market trends.

2. Management of Portfolio
JPR will strive to raise tenant satisfaction and maintain our high portfolio occupancy rate by providing highquality service and a comfortable office space environment built around the JPR Brand Strategy. JPR will also
strive to raise rents for both new and existing tenants as a means to expand the internal growth of our overall
portfolio. Moreover, JPR will promote reduced costs as a means to raise profitability while also giving due
consideration to safety and the quality of management standards.

Brand Strategy

JPR will continue to implement various measures to steadily spread the provision of high quality services bothin software and hardware based on the brand concept of A/3S (Amenity/Service, Safety and Save Energy).
In addition, JPR will feed back the results of the tenant satisfaction survey, as it did last time, as a means toimprove property quality.

Tenant Marketing

JPR will study the management policies of each property from a long-term perspective with an eye on
increasing rents while maintaining high occupancy rates and continue measures to proactively increase
income.

Reduction of Operating and Management Costs

JPR will continue to tackle cost reductions by reducing business costs centering on outsourcing fees, but thiswill be implemented with attention paid to the brand concept so that service quality is maintained and safety
is secured rather than just emphasizing the reducing of costs.

Renovations

Renovations will be implemented in a planned manner based on the long-term repairs and maintenance plansestablished for each property. Priority will be given to renovations that heighten tenant satisfaction by
analyzing tenant needs based on the results of the tenant satisfaction study. In this manner, JPR will realize
the JPR brand it has conceptualized and focused on to date.

29

(6) Fund Procurement
JPR's fundamental policy for fund procurement calls for an efficient combination of long-term steady fundprocurement and short-term fund procurement that emphasizes dynamism. In line with this policy, JPR
will procure funds centering on unsecured and unguaranteed bank borrowings. JPR will continue to focus
on the diversification of fund procurement means and consistently strive to diversify the maturities
employed by also considering the issuance of corporate bonds with an eye on the trends of the bondmarket, etc.

(7) Information Disclosure
JPR has positioned the proactive voluntary disclosure of information as one of its key management policies
and will voluntarily disclose information believed to be essential to investment decisions of JPR along withthe timely disclosure of items to the Tokyo Stock Exchange. JPR will proactively employ its website(http://www.jpr-reit.co.jp/) as a vital means for implementing voluntary disclosure and to date JPR has
promptly disclosed performance information and run movies on its primary properties using this site. We
will work to further enrich our information disclosure activities hereafter.

(8) Important Facts Arising after Settlement
Sale of Properties
As of July 26, 2006, JPR decided to sell the following properties in accordance with JPR's investment policy
stipulated in its regulations.
The sale price is the price after removing adjustment amounts equivalent to property taxes and city
planning taxes as well as consumption tax.
Details of the buyer have not been disclosed at the request of the buyer.

Tsurumi fuga 1 and JPR Takamatsu Bldg.
a) Asset type: Beneficiary interest in real estateb) Sale price: 5,800 million yenc) Contract date: July 26, 2006d) Settlement date: January 11, 2007e) Impact on profit and loss: JPR plans to appropriate approximately 535 million yen of gain on sale of realestate as operating revenues for the 11th fiscal period (January 1, 2007 to June 30, 2007).

< Reference Information >Property Acquisition
JPR has acquired the following property.

Chayamachi Grande Building
Property overview
Address:
Type of ownership:
Sate area:
Gloss total floor area:
Type of structure:
Completion date:
Number of tenants:
Total leasable floor space:
Total leased floor space:Occupancy rate:

2-19, Chayamachi, Kita-ku, Osaka-shi, Osaka (residential)
Land: Fee simple
Building: Fee simple
592.45m
3,219.36m
S, SRC, 9F
June 1994
8
2,484.39m
2,484.39m
100％
2

2

2

2

*The number of tenants, total leasable floor space, total leased floor space and the occupancy rate are the figures as of August 22, 2006.

Transaction Terms
Acquisition price: 6,000 million yen
Asset type: Beneficiary interest in real estate
Acquisition date: August 30, 200630

Overview of Investment Corporation(1) Unitholders' Capital

5th fiscal period
as ofJune 30, 2004

Total number of authorized units

6th fiscal period
as ofDecember 31, 2004

7th fiscal period
as ofJune 30, 2005

8th fiscal period
as ofDecember 31,2005

9th fiscal period
as ofJune 30, 2006

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Total number of units issued
and outstanding

430,000

430,000

530,000

530,000

530,000

Unitholders' capital (millions of yen)

89,113

89,113

115,431

115,431

115,431

Total number of unitholders

18,62018,636

22,674

19,70917,316(2) Primary Investors

The following table shows the 10 largest investors by the percentage of their owned investment units to the total number ofunits outstanding as of the end of the 9th fiscal period.

Name

Number ofowned units

Address

Japan Trustee Services Bank, Ltd.

Percentage
to the total units
outstanding (%)

Chuo Ward, Tokyo

42,221

7.97

Nikko Citi Trust and Banking Corporation

Shinagawa Ward, Tokyo

35,340

6.67

Tokyo Tatemono Co., Ltd.

Chuo Ward, Tokyo

29,3005.53

Kawasaki Gakuen

Kurashiki City, Okayama

25,0004.72

Meiji Yasuda Life Insurance Company

Chiyoda Ward, Tokyo

24,000

4.53

Trust & Custody Services Bank, Ltd.

Chuo Ward, Tokyo

19,9193.76

The Master Trust Bank of Japan, Ltd.

Minato Ward, Tokyo

18,476

3.49

AIG Star Life Insurance Co., Ltd.

Chuo Ward, Tokyo

13,1902.49

The Senshu Bank, Ltd.

Kishiwada City, Osaka

10,568

1.99

The Hiroshima Bank, Ltd.

Hiroshima City, Hiroshima

9,355

1.77

Total

227,36942.90(3) Items Related to Directors
Other Assignments
Currently on Service

Position

Name

Executive Officer

Hirohito Kaneko

Representative Counsel of Hirohito Kaneko Law Office

Sosuke Yasuda

Accountant of Sosuke Yasuda Tax Accountant Office
CPA, Director and Senior Partner of Tokyo Hokuto & Co.
Outside Auditor, Mitsui Sumitomo Insurance Company, Limited
Outside Auditor, Nomura Research Institute, Ltd.

Supervising
Officer(Note 1)
Shigeru Sugimoto

Senior Partner, CPA, Accountant,
Real Estate Appraiser of Horwath Sakura & Co.

Total Directors'
Fee during
the 9th fiscal Period(
thousands of yen)

Numberof Owned
Units

2,100

3,600

Representative Director of Sakura & Co.
Independent
Auditor(Note 2)

Earnst & Young
ShinNihon

9,500(Note 1) Supervising officers may be directors of corporations other than those indicated above, but have no conflict of interest with JPR at those andabove positions.
(Note 2) The independent auditor fees include fees regarding auditing of JPR's English financial statements.

(4) Asset Manager, Asset Custodian and Administrative Agent

The asset manager, asset custodian and administrative agents of JPR at the end of the 9th fiscal period are as follows.
Name

Outsoursing Category
Asset management company

Tokyo Realty Investment Management, Inc.

Asset custodian

Mizuho Trust & Banking Co., Ltd.

Administrative agent(registration change
for investment units, etc.)

Mizuho Trust & Banking Co., Ltd.

Administrative agent(administration concerning
corporate bonds)

Mizuho Trust & Banking Co., Ltd.
Mizuho Investors Securities Co., Ltd.
Mizuho Corporate Bank, Ltd.
Shikin Securities Co., Ltd.
Merrill Lynch Japan Securities Co., Ltd.
Nomura Securities Co., Ltd.

31

Status of JPR's Assets under Management(1) JPR's Asset Structure
8th Fiscal Period(as of December 31, 2005)
Asset TypeReal estate

Real estate in trustArea

9th Fiscal Period(as of June 30, 2006)

Assets owned
by JPR

Percentage tototal assets (%)

Tokyo CBDs

16,140,890

7.1

16,116,501

7.0Greater Tokyo

4,246,866

1.9

6,300,287

2.7

Other Cities

16,313,033

7.2

16,229,852

7.0Tokyo CBDs

73,635,508

32.6

77,824,365

33.6

Greater Tokyo

31,504,291

13.9

31,235,719

13.5

Other Cities

58,179,378

25.8

57,837,269

25.0

1,558,460

0.7

1,558,460

0.7

10.8

24,420,843

Preferred securities

24,303,746

Deposits and other assets(

Total assets)(

Assets owned
by JPR)(

Percentage tototal assets (%)

)

10.5
(

)

225,882,175

100.0

231,523,301

100.0(200,019,969)(88.6)(205,543,997)(88.8)(Note 1) Total assets owned are based on the amounts appropriateed on the balance sheet as of the settlement date (book values after depreciation for real estate and real estate in trust).
(Note 2) Figures in parenthesis are portions that practically falls on real estate owned in the object assets.
(Note 3) For separation of areas, refer to PP・8 -9(Note 4) Various survey expenses (4,700 thousand yen for 8th fiscal period and 3,120 thousand yen for 9th fiscal period) appropriated with regard to planned acquisition
properties are appropriated in deposits and other assets as construction in progress in this table.
(Note 5) JPR owns 8,490 units from 84,900 units of preferred securities issued by Kawasaki Dice TMK (with preferred securities of 10.0%). Furthermore, the value arrived at bymultiplying the amounts of real estate and others on the balance sheed of Kawasaki Dice TMK for the latest settlement period by JPR's preferred securities is 1,756,864 thousand
yen for the 8th fiscal period and 1,736,623 thousand yen for the 9th fiscal period.

(2) Major Assets Owned by JPR
The following is the overview of the major assets (ten largest properties by book value at end of period)
owned by JPR as of the end of the 9th fiscal period.
Property Name (Note 1)

Book Value(
thousandsof yen)Leasable Floor
Space (
m2 )Leased Floor
Space (
m2 )Occupancy
Rate (%)

Rate of Monthly
Contracted Rent
Asset Classat End of Period (%)

Kanematsu Bldg.

15,716,947

7,994.02

7,994.02

100.0

5.1

OfficeJPR Umeda Loft Bldg.

12,936,455

18,586.97

18,586.97

100.0

5.0

RetailBYGS Shinjuku Bldg.

12,019,111

11,357.50

11,166.84

98.3

5.2

OfficeJPR Shibuya Tower Records Bldg.

11,943,473

8,076.85

8,076.85

100.0

4.3

RetailMS Shibaura Bldg.

11,288,486

14,429.09

14,429.09

100.0

5.8

OfficeShinjuku Square Tower

9,961,985

10,982.03

10,847.67

98.8

3.7

OfficeTanashi ASTA

9,094,832

31,121.71

31,121.71

100.0

7.4

RetailKawaguchi Center Bldg.

7,982,461

15,461.98

15,157.98

98.0

5.4

OfficeMeiji Yasuda Life Osaka Umeda Bldg.

7,697,964

9,600.62

9,457.54

98.5

4.1

OfficeHousing Design Center Kobe

7,422,904

35,444.13

35,444.13

100.0

3.2

Retail

106,064,621

163,054.90

162,282.80

99.5

49.2

Total

(Note 1) Rate of monthly contracted rent at end of period is the rate arrived at by dividing the monthly contracted rent at end of period for each property by the total rents for all properties.
(Note 2) Each sectional owner of Shinjuku Square Tower leases its portions to Shinjuku Square Tower Management Co., Ltd. collectively, and the firm subleases them to sub-lessees.
Accordingly, the leasable floor space of the building is calculated by multiplying the total contracted areas of offices, shops and warehouses which the company rents and can subleaseto sub-lessees by 39.70457%, the rent allocation ratio of JPR. The subleased areas used to calculate the occupancy rate are the subleased areas to sub-lessees multiplied by the rent
allocation ratio. Each figure has been rounded to the second decimal point.

32

(3) Acquired Properties
A.Real estate and other acquired properties

The overview of the real estate and beneficiary interest in real estate that JPR invests are as follows.

Location
Category

Asset
Class

Name

Beneficiary Interest

15,716,947
2,692,908

14,300,000

Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.

Chuo Ward, Tokyo

Beneficiary Interest

2,008,028

2,240,000

1,667,757
558,694
206,630

2,710,000

Chiyoda Ward, Tokyo

Beneficiary Interest

JPR Crest Takebashi Bldg.

Chiyoda Ward, Tokyo

Beneficiary Interest

3,800,156

3,510,000

MS Shibaura Bldg.

Minato Ward, Tokyo

Beneficiary Interest

11,288,486

14,000,000

Shinagawa Ward, Tokyo Beneficiary Interest

2,810,202

3,160,000

1,815,526
1,163,441

2,950,000

Fukuoka Bldg.

Chuo Ward, Tokyo

Beneficiary Interest
Real estate

JPR Ichigaya Bldg.

Chiyoda Ward, Tokyo

Beneficiary Interest

5,248,829

5,330,000

Oval Court Ohsaki Mark West

Shinagawa Ward, Tokyo Beneficiary Interest

3,504,160

4,160,000

Shinjuku Square Tower

Shinjuku Ward, Tokyo

Beneficiary Interest

9,961,985

9,580,000

BYGS Shinjuku Bldg.

Shinjuku Ward, Tokyo

Real estate

12,019,111

12,100,000

Across Shinkawa Bldg. Annex

Chuo Ward, Tokyo

JPR Shibuya Tower Record Bldg.

Shibuya Ward, Tokyo

Real estate
Beneficiary Interest

Shibuya Ward, Tokyo

Real estate

Shibuya Ward, Tokyo

Beneficiary Interest

4,600,579

1,730,000
4,560,000

Arca East

Sumida Ward, Tokyo

Beneficiary Interest

5,350,088

6,530,000

JPR Chiba Bldg.

Chiba City, Chiba

Beneficiary Interest

2,351,537

2,060,000

JPR Yokohama Nihon Odori Bldg.

Yokohama City, Kanagawa Beneficiary Interest

2,694,009

2,620,000

Shinyokohama 2nd Center Bldg.

Yokohama City, Kanagawa Real estate

940,790

1,340,000

Kawaguchi Center Bldg.

Kawaguchi City, Saitama Beneficiary Interest

7,982,461

9,760,000

JPR Ueno East Bldg.

3,254,810

4,210,000

Tachikawa Business Center Bldg.

Taito Ward, Tokyo
Tachikawa City, Tokyo

Tanashi ASTA

Nishitokyo City, Tokyo

Tokyo Tatemono Honmachi Bldg.

Real estate
Beneficiary Interest
Beneficiary Interest

875,973

1,150,000

9,094,832

13,200,000

Yokohama City, Kanagawa Beneficiary Interest

2,886,817

3,720,000

Kawaguchi City, Saitama Real estate

2,104,686
1,934,364

2,420,000

7,697,964

9,780,000
4,230,000

Niigata City, Niigata

Meiji Yasuda Life Osaka Umeda Bldg. Osaka City, Osaka

Beneficiary Interest
Beneficiary Interest
Beneficiary Interest

2,140,000

JPR Takamatsu Bldg.

Osaka City, Osaka
Takamatsu City, Kagawa Beneficiary Interest

4,134,062
2,293,054

1,400,000

JPR Hakata Bldg.

Fukuoka City, Fukuoka

Beneficiary Interest

2,972,366

2,840,000

JPR Naha Bldg.

Naha City, Okinawa

Beneficiary Interest

1,499,878

1,440,000

Sapporo City, Hokkaido Beneficiary Interest

2,910,000

Beneficiary Interest

3,569,863
2,841,764

Sompo Japan Wakayama Bldg.

Wakayama City,Wakayama Beneficiary Interest

1,516,505

1,800,000

Tenjin 121 Bldg.

Beneficiary Interest

2,626,506

2,660,000

JPR Nagoya Sakae Bldg.

Fukuoka City, Fukuoka
Nagoya City, Aichi

Real estate

4,610,359

5,550,000

Dojima F Bldg.

Osaka City, Osaka

2,148,196

2,420,000

Semba Fukuoka Bldg.

Fukuoka City, Fukuoka

Beneficiary Interest
Beneficiary Interest

1,938,499

2,060,000

Real estate

4,196,588

4,400,000

Office NORTH 33 Bldg.
Sompo Japan Sendai Bldg.

Sendai City, Miyagi

UFJ Central Leasing Head Office Bldg. Nagoya City, Aichi

Total

793,000
15,200,000

JPR Jingumae 432

Cupo-la Main Bldg.
Niigata Ekinan Center Bldg.

Retail706,451
11,943,473
2,227,497

Retail Tsurumi fuga 1

Other
Cities2,880,000

Shin-Kojimachi Bldg.

Retail JPR Daikanyama

GreaterTokyo

Book Value
Appraisal Value(as of June 30, (as of June 30, 2006)
2006)(thousands of yen)(
thousands of yen)

Beneficiary Interest

Office Gotanda First Bldg.

OfficeAsset Type

Chuo Ward, Tokyo
Chuo Ward, Tokyo

Kanematsu Bldg.

Tokyo
CBDs

Location

3,700,000

JPR Umeda Loft Bldg.

Osaka City, Osaka

Beneficiary Interest

12,936,455

13,980,000

Strasse Ichibancho

Sendai City, Miyagi

Beneficiary Interest

4,134,443

3,960,000

Benetton Shinsaibashi Bldg.

Osaka City, Osaka

Beneficiary Interest

5,593,343

5,680,000

Housing Design Center Kobe

Kobe City, Hyogo

Real estate

7,422,904

7,610,000

205,543,997

224,773,000(Note 1) The calculated values at end of period are either appraisal values or survey values by real estate appraisers, based on the Cabinet Office Order on " Regulations on
calculations of investment corporations ".
(Note 2) Aside from properties indicated in the table above, JPR owns 8,490 units from 84,900 units of preferred securities issued by Kawasaki Dice TMK(with preferred securities of 10.0%).
Furthermore, the value arrived at by multiplying the amounts of real estate and others on the balance sheet of Kawasaki Dice TMK for the latest settlement period by JPR's preferred
securities is 1,756,864,000 yen for the 8th fiscal period and 1,736,623,000 yen for the 9th fiscal period.

33

History of Rental Business for JPR's Each Real Estate and Beneficiary Interest in
Real Estate Investments.
Location
Category

Tokyo
CBDs

9th Fiscal Period (from Jan. 1, 2006
to June 30, 2006)

8th Fiscal Period (from July 1, 2005
to Dec. 31, 2005)

Asset
Class

Name

NumberofTenants

RentalOccupancy Revenues
thousands
rate (%) (of yen)

% of
Total

% of
Total

10

100.0

434,317

5.2

10

100.0

439,467

5.1

Kanematsu Bldg. Annex

1

100.0

105,7381.3

1102,721

1.2

JPR Ningyo-cho Bldg.

100.0

4

100.0

100,377

1.2

4

100.0

98,477

1.2

Shin-Kojimachi Bldg.

11

100.0

112,329

1.3

10

84.8

118,801

1.4

JPR Crest Takebashi Bldg.

9

100.0

132,824

1.6

9

100.0

127,045

1.5

MS Shibaura Bldg.

8

100.0

521,002

6.2

8

100.0

529,991

6.2

Office Gotanda First Bldg.
Fukuoka Bldg.

2

100.0

133,918

1.6

2

100.0

132,815

1.6

2

100.0

102,489

1.2

2

100.0

102,489

1.2

JPR Ichigaya Bldg.

9

100.0

188,019

2.2

9

100.0

182,763

2.1

Oval Court Ohsaki Mark West

4

100.0

171,879

2.1

4

100.0

170,518

2.0

Shinjuku Square Tower

21

89.6

249,532

3.0

25

98.8

277,465

3.2

BYGS Shinjuku Bldg.

22

90.6

417,076

5.0

25

98.3

449,609

5.3

Across Shinkawa Bldg. Annex

4

100.0

47,867

0.6

4

100.0

46,245

0.5

JPR Shibuya Tower Record Bldg.

1

100.0

345,576

4.1

1

100.0

345,576

4.0

4

100.0

41,924

0.5

4

100.0

47,132

0.6

5

100.0

JPR Jingumae 432
Arca East

5

JPR Chiba Bldg.

28

JPR Yokohama Nihon Odori Bldg.

11

Office Shinyokohama 2nd Center Bldg.

14

Kawaguchi Center Bldg.

38

JPR Ueno East Bldg.

9

Tachikawa Business Center Bldg.

4

Tanashi ASTA

1
1

GreaterTokyo

Retail Tsurumi fuga 1

49,2370.6

93.1

203,046

2.4

6

100.0

253,745

3.0

90.5

143,237

1.7

26

89.5

135,3381.6

97.5

139,077

1.7

11

97.5

138,2881.6

96.0

68,124

0.8

15

100.0

74,231

0.9

99.5

498,415

6.0

37

98.0

486,763

5.7

192,387

2.3

8

90.9

188,623

2.2

100.0

28,166

0.3

4

100.0

56,8990.7

100.0

596,400

7.1

1

100.0

596,400

7.0

100.0

145,200

1.7

1

100.0

145,200

1.7

1

100.0

Note 3)(Note 3)(100.0

Cupo-la Main Bldg.

Office100.0

134,255

1.6

11

100.0

133,1681.6

94.2

360,781

4.3

27

98.5

358,6524.2

98.8

251,534

3.0

9

97.3

251,550

2.9

29

85.6

102,082

1.2

28

80.5

88,0091.0

87.7

157,214
99,29726
16

144,595

84.6

1.9
1.2

81.5

JPR Naha Bldg.

26
14

95.3

101,315

1.7
1.2

NORTH 33 Bldg.

23

96.9

174,580

2.1

23

95.5

168,978

2.0

102,106

1.2

Niigata Ekinan Center Bldg.

12

Meiji Yasuda Life Osaka Umeda
Bldg.

24

Tokyo Tatemono Honmachi Bldg.

10

JPR Takamatsu Bldg.
JPR Hakata Bldg.

Park East Sapporo (Note 2)
Sompo Japan Sendai Bldg.

13

94.2

194,448

2.3

15

97.1

197,319

2.3

Sompo Japan Wakayama Bldg.

16

91.6

112,813

1.3

17

95.1

114,903

1.3

Tenjin 121 Bldg.

12

88.1

112,292

1.3

14

91.5

109,757

1.3

28,872

0.3

SK Hiroshima Building (Note 2)

Retail

Total

RentalRevenues(
thousandsof yen)Kanematsu Bldg.

Retail JPR Daikanyama

Other
CitiesNumber Occupancyofrate (%)
Tenants

JPR Nagoya Sakae Bldg.

20

100.0

230,029

2.7

21

100.0

218,083

2.5

Dojima F Bldg.

9

84.9

121,420

1.5

11

100.0

118,205

1.4

Semba Fukuoka Bldg.
UFJ Central Leasing Head Office
Bldg.

5

87.5

82,627

1.0

6

100.0

82,344

1.0

1

100.0

193,754

2.3

1

100.0

190,710

2.2

JPR Umeda Loft Bldg.

1

100.0

402,413

4.8

1

100.0

402,413

4.7

Strasse Ichibancho

1

100.0

128,388

1.5

1

100.0

128,388

1.5

Benetton Shinsaibashi Bldg.

1

100.0

(
Note 3)(Note 3)1100.0Note 3)(Note 3)(

Housing Design Center Kobe

1

100.0

(
Note 3)(Note 3)

1

100.0

(
Note 3)(Note 3)462

98.0

8,552,819 100.0

441

97.2

8,372,711 100.0(Note 1) The number of tenants at end of period is counted as follows except for Shinjuku Square Tower: when a single tenant leases multiple rooms, it is counted as one
if the tenant uses the same property. If the leased rooms are in multiple buildings, the tenant is counted in plural.
(Note 2) The SK Hiroshima Building and the Park East Sapporo were sold on September 27, 2005 and November 30, 2005 respectively.
(Note 3) The tenant to whom the entire building is leased has not agreed to our disclosing rents and other information. Therefore, JPR does not disclose them as it falls on
case in which disclosure is impossible due to inevitable reasons.

34

B. Details of Investment Securities Acquired as Properties
Book Value
Securities Name

Kawasaki Dice TMK

Asset Type

Preferred securities

Units

8,490 units

Unit
Price (yen)Value (yen)Appraisal Value
Unit
Price (yen)Value (yen)Gains or
LossesRemarksfrom
Valuation

183,564 1,558,460,000 183,564 1,558,460,000(Note 1)
(Note 2)

(Note 1) The appraisal value of the preferred securities are their acquisition cost.
(Note 2) JPR owns 8,490 units from 84,900 units of preferred securities issued by Kawasaki Dice TMK (with preferred securities of 10.0%).

(4) Status of Other Properties

Beneficiary interests with real estate as major entrusted properties have been entered in the Real Estate andother Aquired Properties in the previous page.

35

Capital Expenditures of Owned Real Estate(1) Planned Captal Expenditures

The following are major items of capital expentidures for currently planned renovations, etc, for JPR-owned realestate and entrusted real estate regarding beneficiary interests in real estate. Further, the planned construction
expenses include portions that are classified as expenses in accounting.
Planned (millions of yen)
Property Name

Location

PurposeSchedule

Payment

Total Value during
the 9thfiscal Period

Housing Design Center Kobe

Kobe City,
Hyogo

Renewal of exterior
repair seals

Aug. 2006~
Dec. 2006

108

JPR Hakata Bldg.

Fukuoka City,
Fukuoka

Replacement of
9th - 11th floor
air-conditioning units

Aug. 2006~
Dec. 2006

104

Shin-Kojimachi Bldg.

Chiyoda Ward,Tokyo

Renewal of
second floor

June 2006~
July 2006

31

JPR Umeda Loft Bldg.

Osaka City,
Osaka

Repairs of 4th and5th floor toilets

June 2006~
July 2006

28

UFJ Central Leasing
Head Office Bldg.

Nagoya City,
Aichi

Renewal of exterior
repair seals

Aug. 2006~
Nov. 2006

21

Interior renewal ofcommon area

Aug. 2006~
Dec. 2006

18

Repairs of 2nd, 4th, 6th
and 8th floor toilets

Aug. 2006~
Nov. 2006

16

Sompo Japan Wakayama Bldg. Wakayama City,
Wakayama
JPR Chiba Bldg.

Chiba City,
Chiba

AmountAlreadyPaid(2) Capital Expenditures during the 9th Period

The following are the capital expenditure amounts JPR invested in real estate and entrusted real estate during the 9th
period. Among major capitral expenditures are renovations in an effort to maintain and enhance tenant satisfaction
as well as improvements to common-use areas and the installation of office automation floors for leased offices
with the aim of attracting new tenants. Besides, JPR conducted construction of 170 million yen (*), which wasappropriated as expenditures for repair and maintenance, aside from these constructions.
Property Name

Location

Purpose

PeriodConstruction Expenses(millions of yen)

JPR Chiba Bldg.

Chiba City,
Chiba

Renewal of air conditioner
and heating and coolingwater generator

Mar. 2006 ~Apr. 200650

JPR Umeda Loft Bldg.

Osaka City,
Osaka

Repairs of 6th, 7th and8th floor toilets

Mar. 2006 ~June 2006

37

JPR Chiba Bldg.

Chiba City,
Chiba

Repairs of 1st, 3rd, 5th
and 7th floor toilets

Apr. 2006 ~June 2006

16

NORTH 33 Bldg.

Sapporo City,
Hokkaido

Interior renewal ofcommon area

Mar. 2006 ~May 2006

10

Other Properties

Repairs of common area, installation of office automation
floors, preparation of parking lots, air conditioners anddisaster prevention facilities

198
314

Total
* Expenditures for repair and maintenance included 4,000,000 yen of construction management fees paid toconstruction management companies as well as the amounts for repair and maintenance constructions themselves.

(3) Amounts Reserved for Long-Term Repairs and Maintenance Plans

JPR has deposited the following amounts from the redundant cash flow (including one accompanying internal
reserve of profits) such as depreciation in order to conduct large-scale repairs and maintenance work, based onlong-term repairs and maintenance plans for individual properties.
(Millions of yen)

36

Operation Period

5th Fiscal Period(Jan. 1, 2004 ~June 30, 2004)

6th Fiscal Period(July 1, 2004 ~Dec. 31, 2004)

7th Fiscal Period(Jan. 1, 2005 ~June 30, 2005)

8th Fiscal Period(July 1, 2005 ~Dec. 31, 2005)

9th Fiscal Period(Jan. 1, 2006 ~June 30, 2006)

Balance of deposits at
end of previous period

640

750

850

716

667

Deposits during the period

220

220

43

228

141

Amounts used from
deposits during the period

110

120

177

277

130

Deposits carried forward
to the next period

750

850

716

667

678

Expenses and Liabilities(1) Details of Expenses Related to Management
Item(Thousands of yen)

8th Fiscal Period (July 1, 2005 - Dec. 31, 2005) 9th Fiscal Period (Jan. 1, 2006 - June 30, 2006)(a) Asset Management Fees

￥350,947￥345,844

Fixed compensation￥75,000￥75,000

Incentive-based compensation 1￥165,728￥169,249

Incentive-based compensation 2￥105,115￥106,697(b) Administrative Service and Custodian Fees

￥73,471￥68,880(c) Directors' Fee￥5,700￥5,700(d) Trust Fees

￥52,288￥50,561(e) Other Expenses￥81,069￥75,316￥558,374￥551,405

Total(2) Status of Borrowings

As of June 30, 2006, JPR has the following borrowings.
LenderCategory

Mitsubishi UFJ
Trust andBanking Corp.
Shinsei Bank, Ltd.

Short-Term
Borrowings

The Hachijuni
Bank, Ltd.
MizuhoCorporate
Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank,
LimitedThe Bank ofTokyo-Mitsubishi
UFJ, Ltd.

Drawdown
Date
Sept. 27, 2005

Repayment
Date

5,000

0.359

1,000

0.435

Sept. 27, 2006
July 5, 2006

1,500

0.358

July 5, 2006

1,500

0.385

July 5, 2006

1,000

0.369

Mar. 23, 2006

1,000

0.435

Mar. 23, 2006

1,000

0.435

July 5, 2006

Mar. 23, 2006

1,000

0.435

July 5, 2006

Mar. 23, 2006

1,000

0.435

July 5, 2006

5,000

Mar. 30, 2006
Sept. 27, 2005

1,500

Mar. 30, 2006
Sept. 27, 2005

Total

1,000

7,500

Repayment
MethodUse

14,000Mar. 25, 2004

1,000

0.873

Mar. 23, 2007

Nippon Life
Insurance Company

Mar. 31, 2005

2,000

0.493

Apr. 13, 2007

The Bank ofFukuoka, Ltd.

Apr. 11, 2005

2,000

0.478

Apr. 11, 2007

Apr. 11, 2005

1,500

0.478

Apr. 11, 2005

1,000

0.478

Unsecured/
Unguaranteed/
Non-subordinatedTrust and Banking
Company, Limited

Dec. 27, 2001

6,500

6,500

1.234

Apr. 11, 2007 Principal
lump
Apr. 11, 2007 sum
repayment (Note 3)
on maturity
Dec. 27, 2006

SumitomoLife Insurance
Company

Dec. 27, 2001

6,500

6,500

1.234

Dec. 27, 2006

June 19, 2002
June 19, 2002

1,000
1,000
15,0001,000
1,000
22,500

1.295
1.295

Dec. 27, 2006

Sompo Japan
Insurance Inc.

Mar. 25, 2004

1,000

0.873

Mar. 23, 2007

Nippon Life
Insurance Company

Mar. 31, 2005

2,000

0.493

Apr. 13, 2007

The Bank ofFukuoka, Ltd.

Apr. 11, 2005

2,000

0.478

Apr. 11, 2007

Apr. 11, 2005

1,500

0.478

Apr. 11, 2007

Apr. 11, 2005

1,000

0.478

Apr. 11, 2007

Zenkyoren(The National
Mutual Insurance
Federation ofAgricultural
Cooperatives)

Nov. 24, 2005

5,000

5,000

1.453

Nov. 27, 2012

Meiji Yasuda Life
Insurance Company

Dec. 27, 2001
June 21, 2002
Mar. 28, 2003

4,783

4,783

1.700

4,783

4,783

2.050
1.750

Dec. 26, 2008
June 21, 2011

Aozora Bank, Ltd.
Resona Bank, Limited
Total

The Chugoku Bank,Ltd.
The Iyo Bank, Ltd.

Total

Remarks

Principal
Unsecured/
Sept. 27, 2006 lump
(Note 3) Unguaranteed/sum
Non-subordinated
repayment
July 5, 2006 on maturity

Sompo Japan
Insurance Inc.

The Chugoku
Current
Bank, Ltd.
Portionof Long-Term The Iyo Bank, Ltd.
Borrwoings
The Chuo MitsuiLong-Term
Borrowings

Balance as of Balance as of Average
Interest Rate
December 31, June 30,(%) (Note 1)
2006
2005
(millions of yen) (millions of yen) (Note 2)

4,400

4,400

26,466

18,966

Secured/
Unguaranteed/
Non-subordinatedDec. 27, 2006

Mar. 28, 2013

Unsecured/
Unguaranteed/
Principal
Non-subordinatedlump(Note 3)sum
repayment
on maturity

Secured/
Unguaranteed/
Non-subordinated(Note 1) The average interest rates are weighted-average figures during the period and are rounded to the third decimal point.
Furthermore, fees related to loan arrangement paid to the above lenders are not included.
(Note 2) Short-term borrowings are floating-rate borrowings. Long-term borrowings are fixed-rate borrowings.
(Note 3) Funds are mainly used for purchasing real esate or real estate beneficiary interest in trust (including accompanying expenses)
and repaying borrowings.

37

(3) Corporate Bonds

Details of corporate bonds outstanding as of June 30, 2006 are as follows.

Issue DateFirst Series ofCorporate
Bonds

Feb. 12, 2004

Balance as of
Balance as ofJune 30, 2006
Dec. 31, 2005
(millions of yen) (millions of yen)

10,00010,000

Coupon Rate(per annum)

Maturity
Date

0.84

Feb. 12,
2008

Redemption

Use

Remarks(Note 2)
Second Series ofCorporate
Bonds

Feb. 12, 2004

Third Series ofCorporate
Bonds

Feb. 12, 2004

Fourth Series ofCorporate
Bonds

Nov. 4, 2004

10,000Nov. 4, 2004

5,000

Fifth Series ofCorporate
Bonds
Sixth Series ofCorporate
Bonds

Total

7,000

5,000

7,000

5,000

10,0001.38

2.32

Feb. 12,2010
Feb. 12,
2014

0.92

Nov. 4,2009

1.44

Nov. 4,2011(Note 4)

Bulletpayment (Note 1)(Note 3)5,000

(Note 4)
Nov. 4, 2004

5,000

5,000

42,00042,0002.00

Nov. 4,2014(Note 1) The corporate bonds are mainly used for purchasing real estate or real estate beneficiary interest in trust (including
accompanying expenses) and repaying borrowings.
(Note 2) These are equipped with a same rank rider limited among corporate bonds, and with limitations on private placement
among small number of investors and on resale among qualified institutional investors.
(Note 3) These are equipped with a same rank rider limited among corporate bonds and limitations on resale among qualified
institutional investors.
(Note 4) Redemption through purchasing is possible at any time on and after the next day of the issuance date.

38

Acquisition and Sale during the 9th Fiscal Period(1) Aqcuisition and Sale of Real Estate and Asset-Backed Securities
Acquisition
Real Estate
Name

Type of Asset

Sale

Acquired
Date

AcquisitionPrice(thousandsof yen)(Note)

Real Estate

Cupo-laMain Building

Mar. 31,2006

2,100,000

BeneficiaryInterest in
Real Estate

JPR
Jingumae 432

Mar. 24,2006

4,460,000

Total

Sale
Date

Sale
Price (A)(thousandsof yen)(Note)

Book
Value (B)(thousandsof yen)Difference(C)(A) - (B)(thousandsof yen)Sale
Expenses(D)(thousandsof yen)Sale Profit
and Loss(C) - (D)(thousandsof yen)6,560,000(Note) Values of "acquisition price" or "sale price" are amounts (transaction price indicated in the transaction contract) excluding
expenses (such as real estate transaction brokerage fees) required for acquisition or sale of the relevant real estate.

(2) Acquisition and Sale of Other Assets
There were no acquisitions or sales of other assets.

(3) Survey on Values of Specified Assets, etc.
Acquisition Price orSale Price (Note 1)(thousands of yen)Transaction
Date

Survey Value ofSpecified Assets (Note 2)(thousands of yen)

Acquisition or Sale

Real Estate Name

Acquisition

JPR Jingumae 432

Mar. 24, 2006

4,460,000

4,460,000

Acquisition

Cupo-la Main Building

Mar. 31, 2006

2,100,000

2,420,000(Note 1) Values of "acquisition price or sale price" are amounts (transaction price indicated in the transaction contract)
excluding expenses (such as real estate transaction brokerage fees) required for acquisition or sale of the relevant real estate.
(Note 2) Surveys on the values of specified assets indicated above were conducted by Ernst & Young ShinNihon at times ofacquisition or sale of properties based on the Report No. 23, "surveys on values of specified assets of investment trusts andinvestment corporations," issued by the Industry Audit Committee of the Japanese Institute of Certified Public Accountants.
Besides, aside from the value surveys shown above, JPR has received survey reports on locations, addresses and other items
needed for identifying relevant real estate.

(4) Transactions with Interested Parties and Major Shareholders
A.Transaction Status(Thousands of yen)Transaction Price, etc.
Purchase Price, etc.

Total Amount￥6,560,000
Of which, purchase pricefrom interested parties, etc.
￥2,100,000 (32.0%)

Sale Price, etc.

Of which, sales priceto interested parties, etc.
(-%)

Breakdown of Transactions with Intersted Parties, etc.
Taisei Corporation￥2,100,000 (100.0%)

(-%)

Total

￥2,100,000 (100.0%)

(-%)

39

B.Values of Fee Expenses(Thousands of yen)
Breakdown of Transactions with Interested Parties
Total Paid Fees(A)

Paid Party

Tokyo Tatemono Co., Ltd.
Management Fees
(Note 2)

Outsourcing Fees

Tenant Brokerage Fees,
etc.

177,101

456,304

21,093

Paid Amount(B)

Ratio to Total
Amount (B/A)(Percent of total)

120,687

68.1

Yasuda Real Estate Co., Ltd.

8,174

4.6

Meiji Yasuda Building Management, Co., Ltd.

20,503

11.6

Sompo Japan Building Management, Co., Ltd.

10,182

5.7

Tokyo Tatemono Co., Ltd.

299,311

65.6

Yasuda Real Estate Co., Ltd.

25,706

5.6

Meiji Yasuda Building Management, Co., Ltd.

44,7589.8

Sompo Japan Building Management, Co., Ltd.

28,970

6.3

Tokyo Tatemono Co., Ltd.

15,71074.5

Yasuda Real Estate Co., Ltd.

2,340

11.1

Meiji Yasuda Building Management, Co., Ltd.

2,182

10.3

Sompo Japan Building Management, Co., Ltd.

675

3.2

(Note 1) Among the interest parties of the asset management company who has concluded an asset management agreementwith JPR and is regulated in Article 20 of the Enforcement Order of the Investment Trusts and Investment Corporations Law
and the major shareholders of the asset management company regulated in Article 9-3 of the Investment Trusts and Investment
Corporations Law, those who had transactions with JPR during the 9th fiscal period are Tokyo Tatemono Co., Ltd., Tokyo Tatemono
Techno-build Co.,Ltd., Taisei Corporation, Yasuda Real Estate Co., Ltd., Meiji Yasuda Building Management, Co., Ltd., and Sompo
Japan Building Management, Co., Ltd.
(Note 2) The management fees indicated in the above table include construction management fee (total of 10,408 thousand yen for JPR)
appropriated as assets and not handled as expenses.
(Note 3) Aside from transactions indicated in the above table, JPR paid the following amounts for repairs, etc. conducted by the parties
indicated during the 9th fiscal period.
Tokyo Tatemono Co., Ltd.
Tokyo Tatemono Techno-build Co., Ltd.
Yasuda Real Estate Co., Ltd.
Meiji Yasuda Building Management, Co., Ltd.
Sompo Japan Building Management, Co., Ltd.

293,549 thousand yen
16,190 thousand yen
7,421 thousand yen
9,523 thousand yen
18,891 thousand yen(5) Transactions with the Asset Management Company regarding Concurrent
Work Conducted by the Asset Management Company
Tokyo Realty Investment Management, Inc., the asset management company of JPR, does not concurrently conduct
securities business, land and building transaction business, or real estate syndication business, and has
no such transactions with JPR.

40

Overview of Accounting(1) Assets, Liabilities, Principal and Profits and Loss
Please refer to the Balance Sheet and Statement of Income.

(2) Changes in Calculation Method of Depreciation
No change has been made.

(3) Changes in Valuation Method of Real Estate
No change has been made.

Other(1) Notice
During the 9th fiscal period, there was no issue related to conclusion or change of major contracts
approved by JPR's Board of Directors meeting.

(2) Other
Unless otherwise stated, figures indicated in this Business Report are rounded off for values androunded up for ratios to the last figure. The aggregation of each individual item will not add up
to the total from hereon.

41

Balance Sheets(As of June 30, 2006 and December 31, 2005)(Thousands of yen)

End of 9th Fiscal Period End of 8th Fiscal Period(information only)(June 30, 2006)(December 31, 2005)￥10,478,692￥10,875,646

13,600,136

13,035,294

Rental receivables

157,002126,225

Prepaid expenses

97,900145,600

Deferred tax assets

467

676

Other current assets

11,506% Change

ASSETS
CURRENT ASSETS:
Cash and bank deposits
Entrusted cash and deposits

24,345,705

24,183,444

Buildings

16,316,514

14,828,967

Entrusted buildings

71,065,665

70,282,732

Total Current Assets

0.67%

FIXED ASSETS:PROPERTY AND EQUIPMENT:

Structures

4,714

3,830

Entrusted structures

68,03462,512

Machinery and equipment
Entrusted machinery and equipment
Tools, furniture and fixtures

148,754

141,734

1,332,492

1,326,357

12,3108,416

58,46649,647

Land

23,036,551

22,309,882

Entrusted land

103,665,465

99,611,067

3,853

5,433

Entrusted tools, furniture and fixtures

Construction in progress
Entrusted construction in progress200(
10,169,358)(
8,608,682)

205,543,666

200,021,898

Other intangible assets

5,969

6,467

Total Intangible Assets

5,969

6,467

1,558,460

1,558,460

10,10010,100Less: accumulated depreciation
Net Property and Equipment

2.76%

Intangible Assets:（7.70%）INVESTMENTS AND OTHER ASSETS:
Investment securities
Deposits
Long-term prepaid expenses
Other
Total Investments and Other Assets
Total Fixed Assets

292
250

250

1,568,810

1,569,102（0.02%）

207,118,445

201,597,468

2.74%

59,149101,263

59,149101,263（41.59%）￥231,523,301￥225,882,175

2.50%

Deferred Assets:
Corporate bond issuance costs
Total Deferred Assets

TOTAL ASSETS(Note) See accompanying Notes to Financial Statements

42

(Thousands of yen)

End of 9th
Fiscal Period(June 30, 2006)

End of 8th
Fiscal Period(information only)% Change(December 31, 2005)

LIABILITIESCURRENT LIABILITIES:
Trade accounts payable￥785,828￥782,906

Short-term borrowings

14,000,000

7,500,000

Current portion of long-term borrowings

22,500,000

15,000,000

Other accounts payable

441,179

435,459

Accrued expenses

169,453

165,059

Accrued income taxes
Accrued consumption taxes

773

1,159

147,979

223,857

946,386

921,591

38,991,600

25,030,033

Corporate bonds

42,000,000

42,000,000

Long-term borrowings

18,966,000

26,466,000

Leasehold and security deposits received

2,718,246

3,739,949

Entrusted leasehold
and security deposits received

9,965,983

9,816,551

Rent received in advance
Total Current Liabilities

55.78%

LONG-TERM LIABILITIES:

Total Long-Term Liabilities

TOTAL LIABILITIES

73,650,230

82,022,500（10.21%）

112,641,830

107,052,534

5.22%

115,431,503

115,431,503

UNITHOLDERS' EQUITY:
Unitholders' capital
5,000,000 units authorized
530,000 units issued and outstanding

Retained earnings

3,449,967

3,398,137

TOTAL UNITHOLDERS' EQUITY

118,881,470

118,829,641

0.04%

TOTAL LIABILITIESAND UNITHOLDERS' EQUITY￥231,523,301￥225,882,175

2.50%(Note) See accompanying Notes to Financial Statements

43

Statements of Income and Retained Earnings(For the six-month periods ended June 30, 2006 and December 31, 2005)(Thousands of yen)

9th Fiscal Period(Jan.1, 2006-June 30, 2006)￥8,588,774￥8,587,373

Real estate rental revenues

8,552,819

8,372,711

Dividends received
OPERATING EXPENSES:
Real estate rental expenses% Change(July 1, 2005-Dec.31, 2005)

OPERATING REVENUES:

Gain on sale of real estate

0.02%

214,662
35,9554,564,632

4,602,617（0.83%）

4,013,227

4,044,243

Asset management fees

350,947

345,844

Administrative service
and custodian fees

68,88073,471

Directors' fee

5,700

5,700

Trust fees

50,561

52,288Other operating expenses

75,316

81,0694,024,141

3,984,756

0.99%

67,43213,805388.46%

93

96

OPERATING PROFITSNON-OPERATING REVENUES:Interest income
Income on settlement ofmanagement association accounts

60,249Other non-operating revenues

7,089

13,709640,847

599,292

Interest expense

296,526

264,210

Loan arrangement fees

18,241

5,957

Interest expense on corporate bonds

277,882

281,358

Amortization of
corporate bond issuance costs

42,113

42,113

Other non-operating expenses

6,083

5,651

Recurring Profits

3,450,727

3,399,269

1.51%

Income Before Income Taxes

3,450,727

3,399,269

1.51%

Current income taxes

858

1,178

Deffered income taxes

208

(
6)

3,449,659

3,398,097

1.52%

RETAINED EARNINGSBROUGHT FORWARD

307

39

687.18%RETAINED EARNINGSAT END OF PERIOD￥3,449,967￥3,398,137

1.53%

NON-OPERATING EXPENSES:NET INCOME(Note) See accompanying Notes to Financial Statements

44

8th Fiscal Period(information only)

6.93%

Statement of Changes in Unitholders' Equity(For the six-month period ended June 30, 2006)(Thousands of yen)

Balance as of Jan. 1, 2006

Unitholders' capital

Retained earnings

Total￥115,431,503￥3,398,137￥118,829,641

51,82951,829(3,397,830)(3,397,830)

3,449,659

3,449,659￥3,449,967￥118,881,470

Changes during the period
Cash distributions paid
Net Income

Balance as of June 30, 2006

￥115,431,503(Note) See accompanying Notes to Financial Statements

45

Notes to Financial Statements
Basis of Presenting Financial Statements

Japan Prime Realty Investment Corporation (“JPR”) maintains its accounting records and prepares its
financial statements in accordance with accounting principles generally accepted in Japan (“Japanese
GAAP”), including provisions set forth in the Investment Trust Law, the Company Law and the related
regulations, which are different in certain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.

The accompanying financial statements are basically a translation of the financial statements of JPR,
which were prepared in accordance with Japanese GAAP, the Investment Trust Laws and the related
regulations. In preparing the accompanying financial statements, certain reclassifications have been
made to the financial statements issued domestically in order to present them in a format which is morefamiliar to readers outside Japan. In addition, the notes to financial statements include information
which might not be required under Japanese GAAP but is presented herein as additional information.
JPR's accounting period ends at the end of June and December. JPR's 9th accounting period began on
January 1, 2006 and ended on June 30, 2006.

Significant Accounting Policies
1. Assets Valuation Standards and Methods
Investment securities include other securities. Other securities without market value are stated on a costbasis using the moving-average method.

2. Depreciation Method for Property and Equipment(1) Property and Equipment (including entrusted properties)
Depreciation is calculated using the straight-line method. The estimated useful lives of major property
and equipment range are as follows:

Buildings
Structures
Machinery and equipment
Tools, furniture and fixtures

3 - 65 years
10 - 20 years
3 - 17 years
5 - 15 years

Assets with acquisition prices of 100,000 yen or more but less than 200,000 yen are depreciated inthree years based on the Corporation Tax Law.
(2) Intangible Assets
Intangible assets are depreciated utilizing the straight-line method.

3. Accounting for Deferred Assets
Corporate bond issuance costs are depreciated over three years, with an equal amount depreciated in eachfiscal period.

4. Standards for Recording Revenues and Expenses
Accounting treatment of Taxes on Properties and Equipment
In connection with property taxes, city planning taxes and depreciated asset taxes, JPR adopt themethod of charging the corresponding amounts of assessed taxes to the current fiscal period as realestate rental expenses. Furthermore, JPR included an amount equivalent to the property tax paid to thesellers during the first fiscal period as an acquisition cost in connection with the acquisition of realestate or entrusted beneficiary interest with real estate as entrusted property. During the 9th fiscal
period, the amount equivalent to the property taxes included as an acquisition cost of real estate
totaled 8,322 thousand yen.

46

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

Notes to Balance Sheets
1. Assets Pledged as Collateral and Secured Liabilities
Assets pledged as collateral are as follows
Entrusted deposits
Entrusted buildings
Entrusted structures
Entrusted machinery and equipment
Entrusted tools, furniture and fixtures
Entrusted Land
Total

Secured liabilities are as follows
Current portion of long-term borrowings
Long-term borrowings
Total（Thousands of yen)

9th Fiscal Period(as of June 30, 2006)

8th Fiscal Period(information only)(as of Dec.31, 2005)￥5,955,605
23,033,094
30,750200,20920,40235,821,302￥65,061,363￥5,885,258
23,444,992
31,619215,672
17,84535,821,302￥65,416,690

9th Fiscal Period(as of June 30, 2006)

8th Fiscal Period(information only)(as of Dec.31, 2005)￥15,000,000
13,966,000￥28,966,000￥15,000,000
13,966,000￥28,966,000（Thousands of yen)

2. Balance of Unused Commitment LineJPR has executed a commitment line agreement with its principal banks to minimize refinancing risks
and enhance financial stability.
（Thousands of yen)

9th Fiscal Period

Contract execution date
Credit limit
Outstanding debt at the end of the period
Unused commitment line at the end of the period(as of June 30, 2006)

8th Fiscal Period(information only)(as of Dec.31, 2005)

December 1, 2005
￥20,000,000

December 1, 2005
￥20,000,000￥20,000,000￥20,000,000

3. Minimum Total Unitholders' Equity Designated in Article 67-4 in the Investment Trust and Investment
Corporation Law（Thousands of yen)

9th Fiscal Period(as of June 30, 2005)

8th Fiscal Period(information only)(as of Dec.31, 2005)￥50,000￥50,000

47

Notes to Statement of Income
1. Breakdown of Real Estate Rental Revenues and Expenses（Thousands of yen)

9th Fiscal Period

A.Real Estate Rental Revenues
Rental revenues(Jan.1, 2006-June30, 2006) (July 1, 2005-Dec.31, 2005)

Rents
Common charges
Parking revenues
Advertising expenses
Antenna use fees
Other
Sub total
Other rental revenues
Incidental income
Time-based parking revenues
Cancellation charges
Income equivalent to expenses for restoration to as is condition
Other miscellaneous income
Sub total
Total real estate rental income

8th Fiscal Period(information only)￥6,450,655
1,381,089
208,516
11,886
7,793
12,6898,072,631￥6,182,585
1,374,408
203,751
11,257
7,776
13,1797,792,957

425,901
9,051
9,752
11,77023,711
480,188￥8,552,819

516,675
8,830
9,695
27,41917,133579,753￥8,372,711￥456,304
472,936
745,563
33,879165,731
166,693355,207
1,560,732
56,177￥4,013,227￥484,909
545,835
682,687
38,987
182,611
166,359
345,290
1,531,773
65,787￥4,044,243￥4,539,591￥4,328,467

B. Real Estate Rental Expenses
Rental expenses
Outsourcing expenses
Utilities expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts
Depreciation
Other
Real estate rental expenses

C. Profits (A-B)

Notes to Statements of Changes in Unitholders' Equity
The number of units outstanding for the 9th period is 530,000 units.

48

Tax Effect Accounting

1. Breakdown of Main Causes for Deferred Tax Assets and Deferred Tax Liabilities
9th Fiscal Period(Deferred tax assets)（Thousands of yen)

8th Fiscal Period(information only)(Jan.1, 2006-June30, 2006) (July 1, 2005-Dec.31, 2005)
Enterprise tax not deductible for income tax purposes￥61￥28
Lump-sum depriciated assets not deductible for tax purposes
406
648
Total deferred tax assets
467
676
Net deferred tax assets
￥467
￥676

2. Breakdown of Main Items that caused Differences between the Effective Statutory Tax Rate and the
Effective Tax Rate after Applying Tax Effect Accounting
9th Fiscal Period
8th Fiscal Period(information only)(Jan.1, 2006-June30, 2006) (July 1, 2005-Dec.31, 2005)
Effective statutory tax rate
39.39%
39.39%(Adjustment)
Deductible cash distributions(39.37%)(39.38%)
Other
0.01%
0.02%
Effective tax rate after applying tax effect accounting
0.03%
0.03%

Property and Equipment Leased to JPR
JPR does not have any property or equipment leased to JPR for the 9th period.

Transactions with Interested Parties
JPR has no transactions with interested parties during the 9th period requiring disclosures.

Per Unit Information
Total unitholders' equity per unit
Net income per unit

（Yen)

￥224,304￥6,508Net income per unit is computed by dividing net income by the weighted-average number of units
outstanding during the current fiscal period.
Diluted net income per unit has not been presented since no warrants and convertible bonds areoutstanding.
(Note) Net income per unit for the 9th period was calculated based on the following data:（Thousands of yen)

Net income for the 9th period
Amounts not attributable to ordinary unitholders
Net income attributable to ordinary investment units
Average number of units during the 9th period￥3,449,659￥3,449,659
530,000 units

49Subsequent Events
Appropriation of retained earnings
On August 22, 2006, the Board of Directors resolved to effect the payment of a cash distribution of 6,509
yen per share aggregating 3,449,770,000 yen to unitholders at the record date of June 30, 2006.

Sales of properties
As of July 26, 2006, JPR decided to sell the following properties in accordance with JPR's investment policy
stipulated in its regulations.
The sale price dose not include the prorated amounts for property taxes and city planning taxes as well as
consumption taxes.
Details of the buyer have not been disclosed at the request of the buyer.

〈Tsurumi fuga 1 and JPR Takamatsu Bldg.〉a) Asset typeb) Sale pricec) Contract date

Trust beneficiary interest in real estate
5,800 million yen
July 26, 2006d) Settlement datee) Impact on profit and loss

January 11, 2007
JPR plans to record a gain on sale of properties in the amountof approximately 535 million yen in capital as operating
revenues during the 11th period(January 1, 2007-June 30, 2007).

Distribution Information
9th Fiscal Period
1. Retained earnings at end of period
2. Cash distributions(Distribution per unit)
3. Retained earnings carried forward（Yen)

8th Fiscal Period(information only )(Jan.1, 2006-June30, 2006) (July 1, 2005-Dec.31, 2005)￥3,449,967,136￥3,398,137,679
3,449,770,000
3,397,830,000(6,509)(6,411)￥197,136￥307,679

In accordance with the distribution policy stipulated in Article 28-2 of the Articles of Incorporation, JPR
will be able to distribute only to the extent of the profits and needs to distribute in excess of 90% of JPR's
distributable income as stipulated in Article 67-15 of the Special Taxation Measures Law. Based on thispolicy, JPR decided on a total distribution of 3,449,770,000 yen for the 9th fiscal period (3,397,830,000 yen for
8th fiscal period). This is the maximum value arrived at when the number of units outstanding (530,000
units) is multiplied by an integer, within the limit of retained earnings for the respective fiscal period.
Furthermore, JPR does not make cash distributions in excess of the profit as stipulated in Article 28-4 of
the Articles of Incorporation.

50

Statements of Cash Flows (Information Only)(For the six-month period ended June 30, 2006 and December 31, 2005)(Thousands of yen)

9th Fiscal Period

8th Fiscal Period(Jan.1, 2006-June 30, 2006) (July 1, 2005-Dec.31, 2005)

CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes
Depreciation
Amortization of corporate bond issuance costs￥3,450,727￥3,399,269

1,561,173

1,531,780

42,113

42,113

Interest income

(93)

(96)

Interest expense

574,408

545,569(Increase) decrease in rental receivables(30,776)

60,629Decrease in consumption tax refundable

51,772

Decrease (increase) in prepaid expenses

47,699(57,344)

Increase (decrease) in trade accounts payable

93,398(302,858)

Increase in other accounts payable

13,5392,605(75,878)

223,857(Decrease) increase in accrued consumption taxes
Increase in rental received in advance

24,795Decrease in entrusted fixed properties due to sale
Change in other current assets/liabilities
SubtotalInterest received
Interest paid
Income taxes paid

71,4583,154,113(45,793)(27,286)

5,655,314

8,695,586

93

96(570,014)(541,524)(1,159)(1,617)

5,084,234

8,152,540

Purchases of property and equipment(2,204,753)(7,583,649)

Purchases of entrusted property and equipment(4,968,166)(1,163,463)

Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of intangible assets(3,583)Purchases of investment securities
Payment of leasehold and security deposits received
Proceeds from leasehold and security deposits received
Payment of entrusted leasehold and security deposits received
Proceeds from entrusted leasehold and security deposits received

Net cash used in investing activities(1,558,460)(1,210,549)(147,309)

196,265

1,914,214(124,217)(474,687)

291,048

545,429(8,020,372)(8,471,509)

6,500,000

7,500,000

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings
Repayment of short-term borrowings(5,200,000)

Proceeds from long-term borrowings
Distributions to unitholders

Net cash provided by financing activities
NET CHANGES IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODCASH AND CASH EQUIVALENTS AT END OF PERIOD

52

5,000,000(3,395,973)(3,374,217)

3,104,026

3,925,782

167,887

3,606,814

23,910,940

20,304,126￥24,078,828￥23,910,940

Siginificant Accounting Policies
Scope of funds (cash and cash equivalents) in the Statements of Cash Flows
Funds (cash and cash equivalents) in the Statements of Cash Flows include the following:(1) Cash on hand and entrusted cash(2) Deposits placed with bank and entrusted deposits that can be withdrawn at any time(3) Short-term investments that are readily convertible to cash, have insignificant risk of price fluctuationand original maturities of three months or less from the acquisition date.

Notes to Statements of Cash Flows
Breakdown of cash and cash equivalents
Cash and deposits
Entrusted cash and deposits
Cash and cash equivalents（Thousands of yen)

9th Fiscal Period

8th Fiscal Period(Jan.1, 2006-June30, 2006) (July 1, 2005-Dec.31, 2005)￥10,478,692
13,600,136￥24,078,828￥10,875,646
13,035,294￥23,910,940

53JPR Investment Policies (Reference)
A. INVESTMENT POLICIES
1 Basic Policies

JPR’s basic investment strategy centers on investment in urban commercial real estate. The Company will
invest primarily in real estate, which comprises superior urban office buildings and retail properties foundin thriving commercial areas, the land on which they are located, as well as in asset-backed securities thathave such real estate as their primary investments. In light of the returns and risks of these investments,
the Company will invest not only in Tokyo but will attempt to diversify into other cities so as to maximize
portfolio return.
The Company will diversify investments in terms of both tenants and properties, taking into account theamount of investment per property, and will thereby seek to achieve stable medium- and long-term
growth. Investment ratio targets are as shown on page 55 under “(3) Investment stance ii) Investment ratio
targets.”
Note: For the definitions of “real estate” and “asset-backed securities that have real estate as their primary investments,” please refer to the next section
under “(2) Types of Investment Assets I) and II)”

2 Types of Investment AssetsI) “Real estate” refers to the following:i) Real estateii) Real estate leasing rightsiii) Surface rightsiv) Beneficiary interests in the following trusts (including comprehensive trusts in which cash associated withreal estate is also entrusted, but excludes the marketable securities [referred to as “marketablesecurities” hereinafter] defined in Article 2:5 of the Law Concerning Investment Trusts andInvestment Corporations, No. 198 of 1951, including all subsequent amendments; referred to as the“Investment Trust Law” hereinafter)a) Real estateb) Surface rights and land leaseholdsv) Beneficiary certificates in monetary trusts (limited to trusts for which the primary purpose is investment in
the assets listed in i) to iii) above; excludes equivalents to securities)vi) Equity investment based on a contract that specifies that one party will provide funding to be invested in
the assets identified in i) to v) above and the other party will invest these funds in said assets, with theprofits and losses from these investments distributed to investors (“Tokumei Kumiai equity” in Japanese,referred to as “TK equity” hereinafter).

II) “Asset-backed securities that have real estate as their primary investments” refer to investment insecurities with over half of their investment backed by real estate, detailed as follows:i) Preferred securities as defined the Law Concerning Asset Liquidation (Law No. 105 of 1998, including all
subsequent amendments; referred to as the “Asset Liquidation Law” hereinafter)ii) Beneficiary certificates in investment trusts as defined under the Investment Trust Lawiii) Investment securities as defined under the Investment Trust Lawiv) Beneficiary certificates in special-purpose trusts as defined under the Asset Liquidation Law (excludes
beneficiary certificates in trusts listed in I) iv) and v) above)III) The Company may invest in the following designated assets in order to efficiently utilize surplus funds
remaining after the investments listed in I) and II) above:i) Bank depositsii) Call loansiii) Japanese government bondsiv) Municipal bondsv) Commercial paper (refers to instruments defined in Article 2:1:8 of the Securities and Exchange Law)vi) Transferable certificates of depositvii) Designated bonds as defined under the Asset Liquidation Law (refers to instruments defined in Article
2:1:3:2 of the Securities and Exchange Law; however, this is limited to instruments in which the assets
obtained as the business for liquidation by the special purpose company are primarily real estate)54

viii) Beneficiary certificates in loan credit trusts (refers to instruments defined in Article 2:2:1 of the
Securities and Exchange Law)ix) Cash credits, excluding securities and promissory notes, as defined in Article 3:12 of the Law
Concerning Investment Trusts and Investment Corporations Cabinet Order (Law No. 480 of 2000,
including all subsequent amendments; referred to as the “Investment Trust Law Cabinet Order”
hereinafter) and financial derivative transactions, as defined in Article 3:14 of the same lawx) Rights resulting from financial futures trading, as defined in Article 3:13 of the Investment Trust Law
Cabinet Orderxi) Rights resulting from financial derivatives trading, as defined in Article 3:14 of the Investment Trust
Law Cabinet Orderxii) Beneficiary interests in monetary trusts for the purpose of investments such as those described in i) to xi) above.
Furthermore, the Company may invest in stock (restricted to the stock of the building managementcompany and other companies in the course of the Company’s investment activities in specified assets
identified in I) and II) above).

IV) In addition to the specified assets identified in I) through III) above, the Company may invest in thefollowing assets when considered appropriate or of benefit to the Company in accordance with its basic
investment management policy:i) Trademarks, exclusive licenses and ordinary use rights based on the Trademark Law (Law No. 127 of
1959, including all subsequent amendments)ii) Rights to use the source of hot springs as set forth in the Hot Spring Law (Law No. 125 of 1948,
including all subsequent amendments) and facilities related to such hot springsiii) Other assets related to the real estate, which are considered appropriate to acquire together with thesubject real estateV) The Company may invest in assets other than the assets under management when consideredappropriate and in line with the organizational operation of trademarks, etc., relating to the Company’s name.

3 Investment Stancei) Investment horizon
The Company will, in principle, hold assets for the medium- and long-term (one to five years and over
five years, respectively) and will not acquire assets for the purpose of short-term trading (less than one year).
ii) Investment ratio targets

Type of Investment Asset

Real Estate

Target Ratios

By Asset Class

The target allocation ratio between office buildings and retail properties
based on acquisition price shall generally be 8:2

By Location

The target allocation ratio between Tokyo (1) and other cities (2)based on acquisition price shall generally be 6:4

Rental revenues from any individual tenant (total rental revenue when the tenant occupies
multiple compartments and/or properties) will, in principle, be limited to less than 10%
of total rental revenues (3)Asset-Backed
Securities,etc.

The total after-investment value of asset-backed securities(4) shall, in principle, be limited
to less than 10% of the net worth of the Company

Notes:(1) “Tokyo” includes two categories: CBDs (Central Business Districts) comprising Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards;
and Greater Tokyo comprising all other areas of Tokyo, Chiba, Kanagawa and Saitama Prefectures.
(2) “Other cities” includes all other areas in Japan.
(3) “Rental revenues” includes common charges, parking revenues and storage revenues, but does not include additional usage fees
such as after-hours airconditioning charges. This ratio may be exceeded, however, if there is any potential for tenant changes
or if warranted by general considerations of leasing conditions and other factors.
(4) Investment in asset-backed securities assumes that there will be an opportunity to obtain the relevant property,
etc., at the end of the asset-backed security period.

55iii) Investment policies for development projects
The Company will, in principle, acquire only real estate that generates or is expected to generate stablerental revenues or similar revenues at the time of acquisition.
The Company will not engage in development investments (projects in which the Company itself develops
property from land and builds buildings). However, the Company may invest in buildings underconstruction by third parties prior to their completion if sufficient potential to secure tenants after
construction is determined and the buildings are confirmed as non-development investments. In addition,
the Company may invest in rebuilding projects for properties that it has already acquired, provided thatsufficient potential to secure tenants after rebuilding is determined and the projects are confirmed as
non-development investments.
iv) Equipment and fixtures investment policies
The Company will invest in equipment and fixtures in accordance with an efficient upkeep plan createdfor each property and designed to maintain and improve the competitiveness of the property frommedium- and long-term perspectives. In principle, such investments will be within the scope of thedepreciation expense of the individual property, but final decisions will be made in light of thedepreciation expense for the portfolio as a whole. However, repairs to common areas will be implemented
quickly by the Company from the perspective of tenant operational policies, and reinforcements will bemade quickly for buildings requiring earthquake resistance reinforcements in light of the status of tenant
operations.
v) Insurance policiesa) Criteria for selecting underwriting insurance companies:
The Company will select fair underwriting insurance companies through independent brokers. The
underwriting insurance company will, in principle, have an insurance rating of A3 or A- or betterfrom Moody’s Investors Service Inc. (referred to as “Moody’s” hereinafter) or Standard & Poor’s.
b) Earthquake insurance coverage criteria:
The decision to cover earthquake insurance will be made in light of comparisons between thepotential impact of the disaster and property insurance premiums based on the PML for the entire
portfolio. Earthquake insurance may be purchased individually for properties that have high PML.

Note: “PML” refers to the probable maximum loss in the event of an earthquake. PML may be calculated for individual properties
or for the portfolio as a whole. While there is no strict definition of PML (valuation methods will differ depending on the institution
conducting the survey), it is generally found by calculating the probable damage from the largest foreseeable earthquake during
the expected period of use (50 years is the useful lifetime ordinarily assigned to buildings; the largest foreseeable earthquake isa major earthquake of a size seen once every 475 years, having a 10% probability of occurring during any 50 year span). The figure
represents the ratio of projected expenses for restoration of damage to the price of reacquisition.

vi) Sales policya) The Company will select real estate, asset-backed securities that have real estate as their primary investments,and other investments in its holdings to be sold based on overall considerations of the current status of the asset
to be sold, projections of its future profitability and changes in asset value, and the asset allocation of the portfolio as a whole.

b)The Company will determine asset values each fiscal term and an investment policy commiteew will study
whether to sell or hold any property that has declined more than 20% in terms of appraised value
compared with book value. In addition, the Company may also consider the sale of other properties
as it sees fit, as warranted by market conditions and other factors. The following are the main considerations
in determining sales:56• Market forecast• Development forecast for the surrounding area
• Profitability forecast• Estimated amount of future investments• Forecast changes in valuation• Considerations of the portfolio as a whole (diversification by geographical location, tenant andasset class, etc.; impact on dividends, etc.)vii) Value-up properties
Value-up properties refer to those properties that exhibit the potential for an increase in profitability andasset value, and have an immediate income stream on acquisition, along with any of the following characteristics:
1. An occupancy rate of less than 80% at the time of acquisition
2. Significant investment return following effective renovation work
In principle, value-up properties occupy a maximum 15% of the total property portfolio. (based on acquisition price)
The additional acquisition of value-up properties is also subject to a total portfolio occupancy rate in excess of 90%.
Utilizing the know-how of its asset management company, the Company implements the following key
strategies in the management of value-up properties:
1. Reinforce leasing activities with the aim of improving the occupancy rate
2. Carry out effective renovations to enhance market competitiveness3. Implement cost controls by increasing efficiencies in management structure
Value-up properties that contribute to stabilizing the total income of the portfolio and fulfill certain
criteria as determined by the Investment Committee are reclassified as “core properties,” which have thefollowing characteristics:
1. Improve occupancy rate
2. Raise property value (on an appraisal basis)
3. Increase and stabilize income
The Company will consider the sale of value-up properties, under the aforementioned criteria, on a
medium-term basis over two to four successive business periods. In addition, properties that arereclassified as core properties are, in principle, not reclassified as value-up properties.
The Company will consider the sale of value-up properties as one method to realize asset value
appreciation.
Core properties refer to office buildings other than value-up properties. Core properties are positioned as
those properties that contribute to the profit stability of the overall portfolio.

4 Investment Standards
When investing in individual real estate properties, asset-backed securities that have real estateas their primary investments, or other investments, the Company will, prior to making theinvestment, perform a general evaluation that considers the current status, future profitability,
risk, location, building and facilities maintenance and management, deterioration andobsolescence, earthquake resistance, rights, contracts with current tenants, environment,
topography, as well as other factors.
After acquisition of the investment, the Company will make ongoing and effective investments infacilities and equipment so as to maintain and improve the value and competitiveness of the asset,
and will seek to stabilize and expand profitability by increasing revenues and reducing costs.

57

The major specific investment criteria of the Company are as follows:i) Geographical location
Real estate to be invested in will be located in the following cities:a) Major urban areas: CBDs in Tokyo, Yokohama, Kawasaki, Chiba, Saitama, Nagoya, Osaka,
Kyoto and Kobeb) Other government-designated cities: CBDs in Sapporo, Sendai, Hiroshima, Fukuoka,
Kitakyushu and othersc) Other core cities such as prefectural capitals with populations of 300,000 or more
When investing in retail properties, the Company will identify and determine an appropriate
business area for the property; analyze the business area from a variety of perspectives,
including population, demographic trends, number of households and average income;appropriately measure the latent buying power and growth potential of the business area;and determine the suitability of the tenants and their businesses to the business area. The
Company will also study and analyze competitiveness from a variety of perspectives,
including current market competition, plans for the opening of competitive stores in thevicinity, and future room for development.
ii) Sizea) Office buildings
In principle, the Company will invest in office buildings with total floor space of at least
3,300 square meters and floor space of approximately 330 square meters for each standard
floor above the second story level.
b) Retail properties
In principle, the Company will invest in retail properties of an appropriate size in light of
the future growth potential of their areas, as determined by local characteristics, businessarea scale and the standard property size for similar businesses.
iii) Facilities and equipmenta) Office buildings
Giving general consideration to local characteristics or potential for post-acquisition
property modifications, etc., the Company will evaluate specifications on a case-by-case basis.
b) Retail properties
The Company will decide on retail properties individually, comparing them against standard
qualifications and judging from overall factors, including the local characteristics of theproperty’s area, versatility as a retail property, potential for conversion to other uses, visitor
access, etc.
iv) Earthquake resistance
The Company will, in principle, invest only in buildings that meet new earthquake-resistancestandards (specified under the Buildings Standards Law) or for which earthquake-resistancereinforcement work has been completed (including properties for which earthquakeresistance reinforcement work has not been done, but can be completed after acquisition).
v) Tenantsa) Office buildings
In principle, no single tenant will occupy more than 50% of a property (parent companies
and their subsidiaries are considered as a single tenant). If a tenant occupies more than 50%,
the Company can acquire the property after an evaluation of the tenant’s creditworthiness,suitability and substitution potential.
b) Retail properties
The Company will make a general evaluation of the tenant’s creditworthiness, suitability andsubstitution potential.
vi) Rightsa) Co-ownership• The Company will, in principle, seek a co-ownership ratio above 50% in order to assure
sufficient latitude in property management (leasing, improvements, etc.), but may acquire
properties with an ownership ratio below 50% on a case-by-case basis after considering thenature and creditworthiness of other owners and the characteristics of the property.

58• The Company shall, in order to assure sufficient latitude in disposal of the property, confirm whether
special contracts or other agreements providing for preferential purchasing rights or options among theother owners will be executed and whether restrictions will be placed on the transfer of rights, and if so,
the nature of these restrictions.
• The Company will attempt to assure the stability of revenues by fully confirming the nature andcreditworthiness of other owners and, where possible, providing for appropriate procedures. (This may
include, but is not limited to, signing contracts prohibiting the division of joint equity and reaching
agreements on the registration of rights and the mutual use of land).
b) Unit ownership• The Company will, in principle, reserve for itself at least 75% of the voting rights in meetings attended
by unit owners in order to assure sufficient latitude in improvements. However, it may make individual
decisions based on a general evaluation of the nature and creditworthiness of other unit owners.
• The Company shall, in order to assure sufficient latitude in disposal of the property, confirm whether
special contracts or other agreements providing for preferential purchasing rights or options among theother owners will be executed, and whether restrictions will be placed on the transfer of rights, and if so,
the nature of these restrictions.
• The Company will attempt to ensure the stability of revenues by confirming the operations of the
management union (reserves, liability ratios, insurance, etc.) and will take such individual measures as are
required. (This may include, but is not limited to, increasing accumulated amounts within the Company
itself, or providing for insurance on the joint areas and registration of land rights separately from the
management union.)c) Leaseholds• The Company will, in principle, invest in leaseholds as specified in the old Leasehold Law (Law No. 49 of1921, including all subsequent amendments) and the Land and Building Leasing Law (Law No. 90 of 1991,
including all subsequent amendments).
• The Company will carefully study the nature of the proprietary right holder of land and will make its
decision after fully investigating the impact of the provisions for rent revisions, charges for renewing theleasing contract, charges for approval of rebuilding proposals, charges for the approval of sales proposals
and other factors in concerning profitability.
d) Collateral rights and usufructuary rights• The Company will confirm the existence of mortgages or other collateral rights on the proposed
property at the time of purchase, and the possibility of extinguishing such rights on closing.
• The Company will make its decision after confirming the existence of usufructuary rights (for example,
surface rights or easements) set forth by third parties and the impact that such rights will have on
profitability.
vii) Investment amounta) Minimum investment per property
The minimum investment per property (only the purchasing price, exclusive of taxes, acquisition costs,etc.) will, in principle, be more than 1 billion yen. A property can be acquired for a lesser amount under
the following circumstances:• When acquiring part of a property valued in total at over 1 billion yen• When acquiring a property with an appraisal value of more than 1 billion yen, but acquired afternegotiation for a lesser amount• In cases where several properties are being acquired together as a packageb) Maximum investment per property
The ceiling on the investment amount per property will be one-third of the total investment in real estate,
asset-backed securities and other investments already held. Generally, however, properties that exceed
this ratio can be acquired in cases where this is deemed advisable. The “total investment in real estate,
asset-backed securities and other investments already held” refers to the total appraised value ofinvestments up to the previous period, plus the price of investments purchased in the current period(exclusive of taxes, acquisition costs, etc.), plus the amount to be invested in the new property (exclusiveof taxes, acquisition costs, etc.).

59c) Restrictions on acquisition price
The acquisition price for investments including real estate and asset-backed securities will, in principle, belimited to 105% of the appraised value of the investments. However, provided that the property
acquisition does not cause the total property acquisition fund to fall below the NOI yield criterion for thecurrent period, the above-mentioned appraised-value upper limit of 105% can be exceeded in thefollowing cases:• Properties that, by long-term fixed leasing contracts, are forecast to contribute to stable cash flow andthose that are expected to generate a certain profit for dividends in the medium- to long-term• Properties that, in terms of scale, location or general standpoint, are judged to contribute to an increase
in total fund quality and can be expected to generate a certain profit for dividendsviii) Selection guidelines concerning real estate acquisition ownership type
The Company acquires real estate under direct ownership or on an entrusted basis, acquiring beneficiaryinterests to the property. The decision as to which form of ownership the Company will take is determined
after considering the requirements of the existing owner, the cost of transferring rights and a number ofother factors.

B. FINANCIAL POLICIES

1 Fund Management Policies
I) Leasehold and security deposits
For beneficiary interests
All leasehold and security deposits by tenants will be accumulated within the trust account, but theCompany may consider reducing the reserve amount if warranted by accumulated historical data, theestablishment of commitment lines and other provisions.
For real estate, real estate leaseholds and surface rights
Leasehold and security deposits by tenants will be deposited in full to a commercial bank savings accountor time deposit account. However, the Company may reduce reserves in order to more effectively utilize
these funds if warranted by accumulated historical data, the establishment of commitment lines and otherprovisions for the maintenance of efficiency and security.
II) Cash and bank deposits in the trust account (for real estate in trust)
All cash will be deposited in ordinary savings accounts or time deposit accounts at banks with short-term
debt ratings of at least P-2 from Moody’s.
III) Cash and bank deposits in the Company accounts
The provisions of II) above will apply to cash and bank deposits in the Company accounts. However, thiswill not include savings accounts established for use in the execution of loans by financial institutions or
the payment of interest on loans.
Surplus funds will, in principle, be paid out in the following order of priority; any balances will beadministered as described below:• Reinvestment (refers to a use in purchasing properties or capital expenditures)• Cash distribution to investors (however, no cash distributions will be made to investors in excess of
profits in the absence of changes in current tax treatment of cash distributions in excess of profits)• Partial repayment of borrowings (however, this will be given the highest priority when the repayment
maturity date of the loan agreement arrives, regardless of the priorities listed above)IV) Derivatives
The Company will use financial futures, options and other derivatives only for the purpose of hedging
interest rate fluctuation risks and other risks generated by the liabilities of the Company.

60

2 Issuance of Additional Investment Units

The Company may issue additional investment units in a progressive manner for the purpose of assuring
stable, long-term asset growth as warranted by an accurate assessment of the market and upon
consideration of the dilution effects to existing units (reduction in equity of existing units from the issuingof new units; reduction in the per-unit net asset value or cash distribution of existing units).

3 Borrowings and Issuance of Corporate Bonds
I) Basic policies
The Company will seek to actively expand the size of assets and maintain stable cash distributions toinvestors by achieving an effective combination of stable long-term fund-raising and flexible short-termfund-raising.
II) Loan to value (LTV)
Loan to value (LTV) refers to a ratio calculated as shown below and will be used as a measurement of theratio of liabilities to total assets of the Company.
LTV = (Borrowings + Corporate bonds) / Total assets
The Company will, in principle, maintain LTV at levels of no higher than 55%, but may temporarily exceed
this level due to the acquisition of properties or changes in appraised values.
Note: For purposes of this calculation, total assets refers to the amount shown in the assets column of theperiod-end balance sheet for the most recent period prior to the calculation of LTV, and is found by
adjusting the period-end book value of tangible fixed assets for the difference between the period-end
book value of the tangible fixed asset and its appraised value.

C. PROPERTY-RELATED BUSINESS ADMINISTRATION POLICIESProperty-related business refers to property management, general tenant agency, lease manager/construction
manager services and property transfers.
This business is necessary and effective for the achievement of growth for the Company. The Company
will administer this business in accordance with the following policies.

1 Asset Manager and Property Manager
The growth of the Company requires integrated management by the Asset Manager (AM) and expert
management by the Property Manager (PM), with the PM overseeing the facilities management, leasing
management and construction management of individual properties.
In order to achieve more integrated management, the AM may seek the advice of third-parties regarding
leasing management and construction plans for real estate invested in. The Company initially selectedTokyo Tatemono Co., Ltd. as the party to provide this advice (the Lease Manager/Construction Manager).
The AM will select PMs with high degrees of management expertise, seek to concentrate the PMs for eachgeographical area, rigorously seek to homogenize management across the portfolio and work to maximize
unitholder profits.
The AM will compare the capabilities and merits of a number of companies in its selection of property
managers.
Existing PMs and candidates include: Tokyo Tatemono, a company that supports the AM in its leasing
management activities and refurbishment plans; PMs that operate under existing contracts of properties
acquired by the Company and possess established knowledge of tenants and locations; and other PMs.
Final selection is also based on a variety of factors such as management expertise and efforts to integrate
PMs in line with property proximity.

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2 Commissioned General Tenant Agents
General tenant agencies will be commissioned to Tokyo Tatemono Co., Ltd., Yasuda Real Estate Co., Ltd.,
Taisei Corporation and other agents (Commissioned General Tenant Agents).

3 Property Transfer Agents
Tokyo Tatemono will be commissioned to provide property transfer services in order to ensure the smooth
execution of property purchases and sales. This will not be limited to the real estate, real estate leasing
rights and surface rights, but will include real estate in trust as well. Services will include confirmation ofleasing status, confirmation of building and facility maintenance and management, confirmation andestablishment of rights, preparation and confirmation of delivery and other ancillary work.

4 Other Investment Policies
I) The Company will administer its assets in such a way that the ratio of the total price of designated realestate (real estate, real estate leasing rights, surface rights, or real estate in trusts for which real estate,land leaseholds, or surface rights are the entrusted assets) to the total price of designated assets owned by
the Company is 75% or more.
II) The Company will administer its assets in such a way that the ratio of real estate, real estate leasing
rights, surface rights, real estate in trusts (refers only to trusts covering real estate, surface rights or landleaseholds), and TK equity (refers to contracts specifying only investment in real estate, real estate leasing
rights or surface rights) to total assets is 75% or more, which is the ratio established by the Ministry of Finance.
III) The Company may modify the above ratios at any time as warranted by factors such as funding trends,
market trends, general economic conditions and real estate market trends.
IV) Lending of assets in the portfolioa) The Company may lend (for such purposes as parking space and the installation of billboards) realestate, real estate leasing rights and surface rights from among the assets listed on page 54 in “A.
Investment Policies (2) Types of investment assets” in order to more efficiently administer assets andachieve higher investment performance.
b) If the lending of real estate described in a) above results in the acceptance of leasehold and security
deposits or other similar cash funds, the acceptance of these funds will follow the guidelines listed in “B.
Financial Policies (1) Fund management policies I) Leasehold and security deposits,” on page 60.
c) The Company shall not lend assets other than real estate, real estate leasing rights and surface rights.

D. DISTRIBUTION POLICIESThe Company’s fiscal period is for six months, from January 1 to June 30, and from July 1 to December 31,
each year. The Company makes cash distributions to unitholders listed on the unitholders’ list at the endof each fiscal period, or to eligible registered pledgees.

1 Distributable Amount

Income available for distribution by the Company (the “distributable amount”) equals the amount calculated byadding/deducting capital gains/losses and gains/losses on redemption to rent, common expenses, parking
charges, additional service charges, facility charges, facility installation fees, late payment penalties, termination
penalties or similar cash related to termination of lease agreements generated from real estate (including
beneficiary interests and underlying properties of any other assets acquired by the Company) and otherincome, interest/dividend income and similar income generated from other rental business and deducting
expenses (including depreciation and amortization), interest payments, asset management fees, and after
covering the entire amount of net loss carried forward if it exists.

2 Determining Amount of Distribution
The Company determines the amount of distribution, which must exceed 90% of the Company’s distributable
income as stipulated in Article 67:15 of the Special Taxation Measures Law (Law No. 26 of 1957, including all
subsequent amendments). However, the actual amount of distribution may not exceed the distributableamount, as defined above. In addition, the Company can reserve funds for capital expenditure, interest
payment, dividend payment or similar purposes, which are necessary for maintenance of or increasing thevalue of assets.

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3 Retained Earnings
Retained earnings not distributed from the distributable amount will be allocated based on the asset
management policy of the Company.

4 Distribution of Cash Exceeding Earnings
In cases when the distribution is less than 90% of the distributable amount, or when the Company makes
an appropriate decision based on the trend of the economic environment, the real estate market, theleasing market or other conditions, the Company may distribute cash exceeding earnings for the relevant
period, as the sum of the distribution amount set in (2) above and the amount decided by the Company
with the upper limit of the depreciation amount reported at the end of the fiscal period. In such a case, if
the cash distribution does not meet the conditions of special tax treatments for the Company, the amountdecided by the Company for the purpose of meeting the conditions may be distributed in cash.
As long as the current tax treatment requires investors to calculate capital gains/losses each time suchinvestors receive cash distributions exceeding earnings, the Company will not conduct cash distribution
exceeding earnings to investors. However, if the board of the Company decides that cash distributions
exceeding earnings is required to satisfy the “qualification test of distribution deductible”, the distribution
exceeding earnings is allowed following the above distribution policy.

5 Method of Distribution
Distributions are paid in cash based on the number of investment units held to unitholders who are listedon the final unitholders’ list at the end of each fiscal period, or to eligible registered pledgees, within threemonths, in principle, from the end of each fiscal period.

6 Extinctive Prescription
The Company will be released from its payment obligation of distributions after a lapse of three years fromthe date of starting payment. No interest is payable in respect to unpaid distributions in arrears.

7 Issuance of Additional Investment Units

In the event the Company issues additional investment units during a fiscal period, the Company can pay
cash distributions in connection with the aforementioned additional investment unit issue, calculated on a
pro rata basis and subject to approval by the Company’s Board of Directors.

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Investor Information
Address of Japan Prime Realty Investment Corporation (JPR)
9-9 Yaesu 1-chome, Chuo-ku, Tokyo 103-8285, Japan

Date of Establishment

September 14, 2001

Listing

Tokyo Stock Exchange (Securities Code: 8955)

Fiscal Period Ends

June 30 and December 31 of each year

General Meeting of Unitholders

More than once every two years

Cash Distribution Payment Eligibility

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

Transfer Agent

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

Location of Records

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

Mailing Address

Stock Transfer Agency Division
Mizuho Trust & Banking Co., Ltd.
1-17-7 Saga, Koto-ku, Tokyo 135-8722

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

Web Site

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

Contact (Tokyo Realty Investment Management, Inc.)
Tel: +81-3-3231-1051
Fax: +81-3-3274-7775

Annual Schedule (Provisional)

Release of Business Report OctoberDecemberFiscal period ends

Cash distributions September

AugustAnnouncement of the fiscal
period results

Appropriate disclosure
on web site

February

Announcement of
the fiscal period results

June

Fiscal period ends

March
April

Cash distributions

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64