Presentation on Business Results for the Second Fiscal Period（TSE Code：8982）（November 1, 2006 – April 30, 2007）

June 18, 2007

IndexI. Second Fiscal Period Results (Ended April 30, 2007)
I-1
I-2
I-3
I-4
I-5
I-6
I-7

Highlights of the First & Second Period Activities
Unit Price Performance & Volume(March 1, 2006 – April 30, 2007）
Results of the Second Fiscal Period (Summary)
Income Statements (Summary) / Dividends Statements
Balance Sheets (Summary)
Major Financial Indicators
Unitholders

II. Second Fiscal Period Operations (Ended April 30, 2007)
II-1
II-2
II-3
II-4
II-5
II-6
II-7
II-8

II-9
II-10

External Growth: Sponsors’ Strengths
External Growth: Musashiurawa Shopping Square
External Growth: OAK PLAZA
External Growth: Fukasawa-House Tower H&I
Internal Growth: Maintaining High Occupancy Rate
Internal Growth: Highlights of the Second Fiscal Period
Financial Strategies: Debt Rating and Outstanding Debt
as of end of Second Fiscal Period
Financial Strategy: Hedging Against the Risk ofFluctuating Interest Rates and Diversifying Repayment
Dates
Ito-Yokado Higashi-Narashino Store: Handling of Early
Contact Termination Notice
Portfolio and Operations Compliance

IV. Growth Strategies
IV-1

External Growth Strategies

IV-2

Internal Growth Strategies

IV-3

Financial Strategies

V. Asset Management
V-1

Decision Making Process for Acquisition and
Disposition of Properties

V-2

Overview of Asset Manager

VI. Appendix
VI-1

Portfolio Map

VI-2

Portfolio Overview

VI-3

Appraisal Value Comparison between First andSecond Fiscal Periods

VI-4

Performance on Property Basis

VI-5

General Real Estate Market Conditions

VI-6

Portfolio Property Details

VI-7

Characteristics and Investment Strategies of Top REIT

III. Portfolio Overview and Forecast for Third and FourthFiscal Periods
III-1
III-2
III-3

Appraisal Values as of End of Second Fiscal Period
Portfolio Data (Summary)
Forecasts for the Third and Fourth Fiscal Periods

Table of Contents
1

I. Second Fiscal Period Results (Ended April 30, 2007)

Ⅰ2

I-1 Highlights of the First & Second Fiscal Period Activities
Y2005

Y2006

Nov. Dec. Jan. Feb.

Mar.

Apr

May

Jun.

Y2007
Jul.

Aug.

Sep

Oct.

Established(Nov 2, 2005)

Actual Asset management Period: Mar 1, 2006 – Oct 31, 2006 245Days
Obtained
New Property
Rating A2
Listed (Mar 1, 2006)
Acquired (Jun 30, 2006)(Oct 3, 2006)

77 Properties
Properties¥104,386mn¥104,386mn

Dec.

Jan.

Feb.

Mar.

Apr

Second Fiscal Period Nov 1, 2006 – Apr 30, 2007

First Fiscal Period : Nov 2, 2005 – Oct 31, 2006 364Days

TopicsNov.

88 Properties
Properties¥113,286mn¥113,286mn

New Property
Acquired (Dec 8, 2006)
99 Properties
Properties¥123,921mn¥123,921mn

May

Jun,

Third Fiscal Period

New Properties
Acquired (Mar 19,20, 2007)11
11 Properties
Properties¥130,846mn¥130,846mn

Mar 1 Harumi Triton Square Office Tower Y ¥33,000mn, Akasaka Oji Building ¥9,660mn, Kanda Park Plaza ¥5,156mn,|
Faret East Building ¥1,520mn and Nittetsu Honmachi Building ¥1,100mn
Mar 3 NEC Head Office Building ¥41,950mn

External
GrowthMar 1 Sagamihara Shopping Center ¥12,000mn
Jun 30 Ito-Yokado Higashi-Narashino ¥8,900mn

Mar 19 Musashiurawa
Shopping
Square¥4,335mn
Dec 8 Fukasawa-House tower H & I ¥10,635mn
Mar 20 OAK PLAZA ¥2,590
mn¥33,400mn¥33,400mn¥37,400mn¥37,400mn

Mar 3

Financial
Strategy(Debt)¥35,900mn¥35,900mn¥47,100mn¥47,100mn¥54,300mn¥54,300mn

Long-Term Debt ¥33,400mn（3.20 固定化

(May 31 Fixed by IRS Total: ¥23,000mn)

Refinance(Scheduled)(Mar 20Fixed11,000百万円）
by IRS ¥11,000mn)

Jun 30 ¥4,000mn Aug 31 ¥2,500mn

Dec 8 ¥13,700mn

Mar 19, 20 ¥20,900mn

Short-Term Debt

Financial
Strategy(Equity)Net
Net Assets
Assets¥100mn¥100mnInitial
Initial Public
Public Offering
Offering¥82,260mn¥82,260mn

Term-end Unit Price(closing)¥689,000

Term-end Unit Price(closing)¥843,000

Offering at ¥550,000 per unit

Ⅰ-1
3

I-2 Unit Price Performance & Volume (March 1, 2006- April 30, 2007）
31,893 Units March 1, 2006
31,893口（3/1）

Highest:¥998,000(Feb 16, 2007)

1,000,000(Yen)

TOP出来高TOP Trading Volume

TOP
TOP

TSE REIT Index
東証REIT指数（指数化後）

TOPIX
TOPIX（指数化後）

10,000(Unit)

900,000

8,000

First Fiscal Period

Second Fiscal Period

800,000

6,000

700,000

4,000

600,000
Lowest:¥556,000(March 7, 2006)

2,000

500,000

Mar
Apr
H18.4
H18.3 H18.3
2006 H18.42006

May
H18.5
H18.5
2006

Term-end Unit Price(closing)

June
H18.6
H18.6
2006

July
H18.7
H18.7
2006

Aug
H18.8
H18.8
2006

¥843,000（April 27, 2007）

Sep
H18.9
H18.9
2006

Oct
H18.10
H18.102006

Nov
H18.11
H18.11
2006

Dec
H18.12
H18.12
2006

Jan
H19.1
H19.1
2007

Feb
H19.2
H19.2
2007

Mar
H19.3
H19.3
2007

Apr
H19.4
2007H19.4

0

IPO Price¥550,000March 1, 2006

Highest since IPO (Closing)¥998,000

Feb 16, 2007

Lowest since IPO(Closing)¥556,000March 7, 2006
Ⅰ-2
4

I-3 Results of the Second Fiscal Period (Summary)
Item

Second Fiscal
Period Results

Second Fiscal Period
Forecast

Nov 1, 2006 – Apr 30,
2007(Announced on
December 18, 2006)

Normalized First Fiscal
Period Results

Net Change

Net Change

Reference only
(First Fiscal Period Results)/ 245 Days x 365 Days / 2(Results vs. Forecast)(Second Fiscal Period Results
vs. Normalized First Fiscal
Period Results)

Length of AssetManagement (days)

181

181

－

－

182.5

－

－

Operating Revenue¥4,526mn¥4,437mn

¥89mn

+2.0%

¥4,037mn¥488mn+12.1%

Ordinary Income¥2,324mn¥2,093mn¥231mn+11.0%¥2,034mn¥290mn+14.3%Net Income¥2,323mn¥2,092mn¥231mn+11.0%¥2,033mn¥290mn+14.3%

Number of Units Issued

155,000

155,0000－

155,000

0－

Dividend per Unit

¥14,992¥13,500¥1,492+11.0%¥13,116¥1,876+14.3%

11

9

2

－

8

+3

－

¥152,468mn

－

－

－

¥127,442mn¥25,026mn+19.6%

Number of Properties
AssumedAppraisal Value Total■Other Reference■ Difference between Forecast and Actual Results
Operating Revenue：¥ 89mn
¾ Acquisition of Musashiurawa Shopping Square and ＯＡＫ ＰＬＡＺＡ¾ Improving occupancy of Harumi Triton Square Office Tower Y¾ Ito-Yokado Higashi Narashino Store: Discharging preliminarily
estimated rent reduction

Ordinary Income: ¥231mn¾ Increased operating revenue¾ Reduction of repairing Costs¾ Reduction of “Interest Paid” and other expenses

Items

Second Fiscal
PeriodFirst Fiscal
PeriodNumber of Tenants

39

34

Total Rentable Area

261,671.68㎡

229,231.70㎡

Occupancy Rate

99.5％

99.9％

Current Depreciation¥873mn¥980mn*（730mn）

Current Capital Expenditures¥80mn¥241mn*（179mn）*Normalized (182.5days) basis

Term-end Unit PriceTerm-end Market Capitalization¥843,000¥689,000¥130,665mn¥106,795mn

Ⅰ-3
5

I-4 Income Statement (Summary) / Dividend Statement■Income Statement
Accounting Item

■Dividend Statement
2nd Period
Nov 1, 2006 – April 30,
2007 (181days)

1st Period
Nov 2, 2005 – Oct31, 2006 (245days)

Value(million yen)

Value(million yen)(%)

Accounting Item(%)

I. Operating Income and Expenses

2nd Period
Nov 1, 2006 –April 30, 2007

1st Period
Nov 2, 2005 – Oct 31,
2006

Value (million yen)

Value (million yen)

Retained earnings at
end of period

2,323

2,729

2,323

2,729

1. Operating Income

4,526

100.0

5,420

100.0

Total Dividend Amount

2. Operating Expenses

1,878

41.5

2,161

39.9

(Dividend per Unit)(14,992 yen)

(17,609 yen)

Rental expenses

1,388

1,632

0

0

Asset management fees

367

414

Retained earnings
carried forward

Other operating expenses

122

114

【External Growth】

2,647

58.5

3,258

60.1

1. Non-Operating Income

10

0.2

4

0.1

Interest received

7

Operating Income
II Non-Operating Income and Expenses

Other non-operating income
2. Non-Operating Expenses

2

2
332

532
273

Amortization of funding costs

5

11

New investment unit issue costs

--

190

Other non-operating expenses

19
2,324

Net income before income taxes

2,324

2,731

1

1

Corporate tax adjustment

51.4

0

Net Income

2,323

Retained Earnings at the End of Period

2,323¾ Improving Occupancy Rate (Harumi Triton Square Office Tower Y:
100%, in December 2006)

9.8【Rental expenses】¾ Depreciation: ¥873mn¾ Management expenses: ¥319mn¾ Utility Cost: ¥143mn and others

57

Ordinary Income

Corporate residents and business taxes【Internal Growth】

2
7.3

307

Interest paid

¾ Acquisition of Fukasawa-House Tower H&I,
Musashiurawa Shopping Square and OAK PLAZA

2,731

50.4

【New investment unit issue costs】¾ Expenses related to listing on the Tokyo Stock Exchange, etc.

-0
51.3

2,729

50.4

2,729

Ⅰ-4
6

I-5 Balance Sheets (Summary)
2nd Period
As of April 30, 2007

1st Period
As of Oct 31, 2006

Value
(million yen)

(%)

Value
(million yen)(%)

I Total Current Assets

12,571

8.6

11,9799.4

Cash and deposits593

2nd Period
1st Period
As of April 30, 2007 As of Oct 31, 2006

Accounting Item
Accounting Item

AssetsCash and deposits held in trust accountTenants receivables
Consumption tax refund receivable(refundable)
Other current assets

9,840

7,622

30

29

2,055

1,846

50

26

Accounts payable

133,706

91.4

116,315

90.6

1. Total Investment Properties, net

133,576

91.3

116,187

90.5

Building, etc.

44,402

38,102

Land

89,17478,084819
49

Rents received in advance

731

670

Other current liabilities
Long-term debt

33,40033,400Tenant Lease and security
deposits in trust
Derivative debt

6,160

5,774

0.0

0

0.0

Net Assets

129

0.1

0.1

41

Deferred tax assets

46

55

Other investments

34

20

III Total Deferred Assets

39

Organization expenses(initial expense)

39

Total Assets

146,317

Tenant leasehold and security
deposits, etc

0.0

45

0.0

45
100.0

128,340100.0

539,701

0

37

3

II Total Fixed Liabilities

Other intangible assets

Long-term prepaid expenses

3.1

43

88

0.0

10

4,088

Expenses payable

0

10

15.1

95

2,500

0.0

Leasehold and security deposits

22,103

283

0

128

(%)

20,9002. Total Intangible Assets

3. Total Investment and Other Assets

Value(millionyen)

Other account payable

Short-term debt

II Total Fixed Assets(%)

Liabilities
I Total Current Liabilities

2,453

Value
(million
yen)

27.1

39,347

141

30.7

173

61,80542.2

43,43633.8

I Total Unitholders’ Equity

84,58357.8

84,98966.2

1. Unitholders’ equity

82,26056.2

82,26064.1

2. Reserves
Retained earnings at
period end
Total reserves

2,323

Total Liabilities

II Adjustments for valuation,
conversion, etc.
Deferred hedge losses

Total Net Assets
Total Liabilities and Net Assets
Total debts: : ¥54,300mn (1)

2,729

2,323

1.6

2,729

2.1

-71

-0.0

-86

-0.0

84,511

57.8

84,903

66.2

146,317100.0

128,340

100.0

-71

-86

Of which, interest-bearing
debt: ¥１,365mn (2)(1) + (2) Total interest-bearing debt: ¥55,665mn

Ⅰ-5
7

I-6 Major Financial Indicators

2nd Fiscal Period
Nov 1, 2006 –April 30, 2007

Term

Actual Period of Asset Management

Normalized 1st
Period Results
Nov 2, 2005 –Oct 31, 2006

Remarks

Indicators of First Fiscal Period have been calculated as follows(First Fiscal Period Results) / 245 Days x 365 Days / 2

181 Days

182.5 Days

Ratio of interest-bearing debt to total assets at period end

38.0%

29.1%

Interest-bearing debt at period end / total assets at period end

Ratio of debt to total assets at period end (“LTV”)

37.1%

28.0%

Total debt at period end / total assets at period end¥4,010mn¥3,551mn

6.1%

6.3%

¥3,197mn¥2,763mn¥20,625¥17,827

1.7%

1.9%

Ordinary income / (total assets at beginning period (for first fiscal
period, total assets as of March 1, 2006) + average total assets atperiod end) / 2(3.4%)(3.9%)

Converted to annual return based on actual management period

2.7%

2.5%

Net income/(net assets at beginning period (for first fiscal period,
net assets as of March 1, 2006) + average net assets at periodend) / 2

Annualized(5.5%)(5.0%)

Converted to annual return based on actual management period

Unitholders’ Equity to Total Asset Ratio at period end

57.8%

66.2%

Unitholders’ equity at period end/total assets at period end

Rental NOI (Net Operating Income)Rental NOI yield
Funds from Operation (FFO)
FFO per unit

Return on Assets (ROA)
Annualized
Return on Equity (ROE)

Rental income – rental expenses + depreciation for the period
Rental NOI (semi-annualized) x 2 / total acquisition price of
portfolio at period end
Net income + depreciation for the period
FFO/number of outstanding units issued at period end

Ⅰ-6
8

I-7 Unitholders■ Number of Unitholders■ Ownership Share by Investor Criteria as of April 30, 2007

Financial Institutions （Incl. Security Firms) : 171 （2.8%）
Non-Financial Institutions (Corporate): 146 （2.4%）
Overseas Investors: 45 （0.7%）
1st Fiscal
Period end
第 1期
Total
Number ofInvestors:
6131

Retail Investors/Others 5,769（94.1%）
Financial Institutions （Incl. Security Firms): 165 （3.0%）
Non-Financial Institutions (Corporate): 127 （2.3%）
Overseas Investors: 80 （1.4%）

2nd Fiscal
Periodend Total
Number
第 2of期Investors:
5521

20%

40%

60%

2nd Fiscal
Period end
Total
number
第 2期
of units
outstanding
155,000

RetailInvestors/Others
16,470（10.6%）

RetailInvestors/Others
13,320（8.6%）

80%

100%

0%

Non-Financial Institutions(Corporate)
13,105（8.5%）
Overseas
Investors
Financial Institutions （Incl. Security Firms) :15,380110,045 （71.0%）（9.9%）

Financial Institutions （Incl. Security Firms) :101,763 (65.7%）

20%

40%

13,320

8.6%

5,149

93.3%

Financial Institutions

101,763

65.7%

165

3.0%

Non-Financial Institutions(Corporate)

12,393

8.0%

127

2.3%

Overseas Investors

27,524

17.8%

80

1.4%

155,000

100.0%

5,521

100.0%

Number ofUnits held

Share (%)

■Top 15 Unitholders as of April 30, 2007

■ Number of Units held
1st Fiscal
Period end
Total numberof units
第 1期
outstanding
155,000

Number of Unitholders

Retail Investors/Others

Total

Retail Investors/Others: 5,149（93.3%）0%Number of Units Held

Investor Criteria

Overseas Investors
27,524 （17.8%）

Non-Financial Institutions(Corporate)
12,393 （8.0%）
60%
80%
100%

R
a
n
k

Name

1 Japan Trustee Service Bank, trust account10,545

6.80

2 NikkoCiti Trust and Banking Corporation, trust account

9,763

6.30

3 The Master Trust Bank of Japan, trust account

7,090

4.57

4 The Bank of Ikeda

6,850

4.42

5 Trust and Custody Services Bank, trust account

5,853

3.78

6 The Joyo Bank

4,157

2.68

7 The Fuji Fire and Marine Insurance

4,117

2.66

8 American Life Insurance Company GAL

3,847

2.48

9 The Bank of New York, Treaty JASDEC account

3,537

2.28

10 The Sumitomo Trust & Banking

3,176

2.05

11 Nippon Steel City Produce
11 Oji Real Estate
13 North Pacific Bank

3,162
3,162
3,112

2.04
2.04
2.01

14 The Hiroshima Bank

3,060

1.97

15 The Nomura Trust and Banking, mutual fund account

2,305

1.49

Total

73,736

47.57

Ⅰ-7
9

II. Second Fiscal Period Operations (Ended April 30, 2007)

Ⅱ10

II-1 External Growth: Sponsors’ Strengths
Top REIT Inc.
Top REIT Asset Management

Utilizing Sponsors’ Strengths
Agreement on Provision ofInformation & Brokerage Information

The Sumitomo Trust & Banking

Harumi Island
Triton Square
Office Tower Y

Nippon Steel City Produce

Oji Real Estate■Number of group companies
Sumitomo Trust Group 42
Nippon Steel Group326
Oji Paper Group305“Sponsors’ Strengths”
has been applied to All
Properties underManagement

Properties brokered bysponsors
NEC Head Office

Agreement on Warehousing

Fukasawa-House
tower H & I

Structuring

Providing
EquityProperties previously owned or developedby sponsor group companies

Ito-Yokado
Higashi-NarashinoMusashiurawa
Shopping SquareOAK PLAZA

Nittetsu
Honmachi
Building

Faret East
Building

Sagamihara
Shopping Center

Akasaka Oji
Building

Pipeline

Kanda Park
Plaza

Warehousing

II-1
11

II-2 External Growth:Musashiurawa Shopping Square (Second Fiscal Period)

Address
Acquisition PriceArea of Land/Floor Space
Structure/Floors

7-3-1, Bessho, Minami-ward, Saitamacity, Saitama
4.335 billion Yen
8,317.99㎡／28,930.36㎡
Steel structure with flat roof /1 basement floor, 4 floors above ground

Completion

October 2005

Type of Title

Co-ownership ("kyoyu") of trust beneficiaryinterests in real estate(Ratio of ownership is 50%)■This property is situated very close to a JR station in Metropolitan Tokyo■To avoid excessive competition for acquisition of the property, Top REIT decided to jointly acquire thisproperty with another J-REIT (JPR).
■ Acquired from SPC in which NSCP has invested. (Use of the pipeline function (sponsor strength))Ⅱ-2
12

II-3 External Growth: OAK PLAZA (Second Fiscal Period)
Address
Acquisition PriceArea of Land/Floor Space
Structure/Floors

2-10-6 Kanda Awajicho, Chiyoda-ward,
Tokyo
2.59Billion yen
1,013.49㎡／6,121.85㎡
SRC Structure with a Flat Roof /1 Basement Floor, 10 Floors above
GroundCompletion

Completion April 1985
(Completion of the conversion:
March 2007)

Type of Title

Ownership

After
Conversion

OfficeOffice
Reception
Meeting Room
Reception
Meeting
Room(3rd Floor) (2nd Floor)(3rd Floor)(2nd Floor)

Hotel Reception
Hotel Reception

BeforeConversion■ This multi-use building, located in Central Tokyo, has offices (service offices and meeting rooms for rent),
restaurants and retail shops, in addition to hotel spaces■This property, formerly owned by NSCP, is being acquired by Top REIT, after NSCP carries out the conversion
construction, (use of the pipeline function (sponsor strength))Ⅱ-3
13

II-4 External Growth: Fukasawa-House Tower H&I (Second Fiscal Period)

Address

2-1-2 Fukasawa, Setagaya Ward, Tokyo

Acquisition Price

10.635 billion yen

Area of land/Floor
Space

39,840.90m2/12,135.36m2

Structure/Floors

RC with concrete and flat rooves/14F above
groundCompletion

June 2004

Type of Title

Compartmentalized ownership interest(Fukasawa-House Tower H&I)

■ First residential property acquired by Top REIT
■ Rental housing block (Tower H&I) of Fukasawa-House Project, a project rich in greenery developed as an essential
element of a large-scale housing project■ Acquired through brokerage of Sumitomo Trust & Banking (use of the pipeline function (sponsor strength))Ⅱ-4
14

II-5 Internal Growth: Maintaining High Occupancy Rate
“Tenants First” = Maintaining and Enhancing Customer Satisfaction

Reflecting demand from tenants in facility management plan, thus improving assets quality and value

Deepening relationship with major tenants will support long-term stable cash flows■ Five Major Tenants

As of October 31 2006 (1st Fiscal Period End)As of April 30, 2007 (2nd Fiscal Period End)
Name of Tenants

Type ofIndustry

Name of Properties

RentedArea (㎡）

Share
(%)

Name of Tenants

Type ofIndustry

Name of Properties

RentedArea (㎡）

Share
(%)

Ito-Yokado Co., Ltd.

Wholesale/
RetailSagamihara Shopping Center/
Ito-Yokado Higashi-Narashino

112,089.54

43.0

Ito-Yokado Co., Ltd.

Wholesale/
RetailSagamihara Shopping Center/
Ito-Yokado Higashi-Narashino

112,089.54

49.0

Manufacturing

NEC Head Office Building

72,238.03

27.7

NEC

Manufacturing

NEC Head Office Building

72,238.03

31.6

Manufacturing

Harumi Island Triton Square OfficeTower Y11,905.47

4.6

Manufacturing

Harumi Island Triton Square
Office Tower Y

11,905.47

5.2

Real Estate

Faret East /OAK PLAZA

10,785.18

4.1

Harumi Island Triton Square
Office Tower Y

7,753.13

3.4

Real Estate

Fukasawa-House Tower H&I

10,164.11

3.9

Akasaka Oji Building

5,080.98

2.2

NEC
Sumitomo Metal
Industries
Nippon Steel City
Produce
R.A. AssetManagement■History of Occupancy

97.5%

1st Fiscal Period

2nd Fiscal Period

92.5%
90.0%

系列1

Sep-05 Mar-06

Apr-06 May-06 Jun-06

Jul-06

Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07

Feb-07 Mar-07

Apr-07

99.7%

99.8%

99.9%

99.9%

99.6%

99.5%

99.8%

99.8%

Financial/
Insurance
Wholesale/
Retail■Leasing Agreement with Major Tenants

100.0%

95.0%

Sumitomo Metal
Industries
Japan Trustee
Services Bank
Sony ComputerEntertainment

99.9%

99.9%

99.9%

99.9%

99.8%

99.6%

99.7%

¾ Leasing agreement with Ito-YokadoLong-term leasing agreement for Sagamihara is valid until
Aug 10, 2013, and for Higashi-Narashino is valid until Nov 30,
2014.
¾ Leasing agreement with NEC
20-years fixed term leasing agreement that runs until Dec
2025 has been signed. A rent will be revised in Dec 2013, Dec
2017 and Dec 2021. (Cancellation option by NEC thereafter
under certain conditions)

Maintaining High and Stable Occupancy
Term-End Occupancy Rate: 99.5%

Ⅱ-5
15

II-6 Internal Growth: Highlights of the Second Fiscal Period
Measures to Maintain and Improve Earnings in line with Characteristics of Individual Properties
Harumi Island Triton Square Office Tower Y
Improve occupancy by grasping the floor space needs of existing tenants (100% occupancy from December 2006);
area 280.31m2
Smooth contract renewals with all existing tenantsContracts were renewed with all 7 tenants at market rents (total rented area 23,239.62m2)

Akasaka Oji Building
Improved earnings by master leasing the parking lot that suffered from low occupation (executed December 2006)
Parking lot operator: PARK 24 Co., Ltd. Spaces: 35 Annual improvement in earnings of about 15 million yen
Review of maintenance and repair work unit costs and other cost reduction measures to improve earnings

FukasawaFukasawa-House tower H & I
Established rents according to a new standard
based on area marketing, etc. and continued
activities to solicit tenants
8 units had tenant changes for a 3.0% jump inmonthly rent since Dec 2006

Office Buildings
Closely reviewing market rents and negotiating rents in atimely manner with the cooperation of the property manager
Revised rents: 11 (2 increased, 9 remained the same)*Also, so far, 2 tenants have agreed to rent increases inthe third fiscal period
A task force for promoting appropriate management costs
was formed to establish and the foundation for reducing costs
next fiscal period onward

Ⅱ-6
16

II-7 Financial Strategies:
Credit Rating and Outstanding Debt as of end of Second Fiscal Period
Issuer Rating
A2(Stable)

Assigned by Moody’s Investors Service.
LenderSumitomo Trust
Mizuho CB

Short
Term
Debt

Sumitomo Trust
Mizuho CB
SMBCBank of Tokyo Mitsubishi UFJ
Chuo Mitsui Trust
Mitsubishi UFJ Trust

Execution
Date
June 30,
2006
Dec 8,
2006
March 19,
2007
March 20,
2007

Sub-Total

Term
Loan 13Years
Long
Term
Debt

Term
Loan 2
5YearsSumitomo Trust
Mizuho CB
SMBCBank of Tokyo Mitsubishi UFJ
Chuo Mitsui Trust
Mitsubishi UFJ Trust

Sub-Total
Sub-Total
TOTAL¥2,500mn¥11,200mn¥4,600mn¥2,600mn¥20,900mn

March 3,
2006

Sub-Total

Sumitomo Trust
Mizuho CB
SMBCBank of Tokyo Mitsubishi UFJ
Chuo Mitsui Trust
Mitsubishi UFJ Trust

Term-end
Balance

March 3,2006

¥5,200mn¥5,500mn¥6,000mn¥16,700mn¥5,200mn

Interest Rate
0.96%
（Floating rate）
0.96%（Floating rate）
0.96%（Floating rate）
0.96%（Floating
rate）

Date ofMaturity
June 29,
2007
Nov. 30,
2007
March 19,2008
March 19,2008

*Weighted average after
interest rate swaps

1.27%(Avg.)
1.11%(Floating
rate）

Payment
MethodNote

2 Months

BulletUnsecured

7 Months

BulletUnsecured

11 Months

BulletUnsecured

11 Months

BulletUnsecured

BulletUnsecured

BulletUnsecured

8 Months(Avg.)

0.96%(Avg.)
1.01%(Floating rate)
1.39%(Fixed)

Remaining
PeriodMar 3,
2009

1 Year &10 Months--

Mar 3,
2011

3 Year10 Months¥5,500mn

1.92%（Fixed）¥6,000mn¥16,700mn*Weighted average after
interest rate swaps

1.66%(Avg.)-¥33,400mn

1.47%(Avg.)-¥54,300mn

1.27%(Avg.)-

2Year &
10Months(Avg.)
2 Year
(Avg.)

Note: Interest rates are rounded to the second decimal point, and the remaining periods are rounded to a whole number. The averages for interest rates andremaining periods are weighted average figures using period-end balance.

Ⅱ-7
17

II-8 Financial Strategy: Hedging Against the Risk
of Fluctuating Interest Rates and Diversifying Repayment Dates
Total borrowings: 54.3 billion yen (after refinancing 54.4 billion yen)

Loan to value (LTV): 37.1%

Ratio of long-term borrowings: 61.5% (after refinancing 100%)

Ratio of fixed interest borrowings: 42.4% (after refinancing 46.0%)

Decided on June 8, 2007 to finance long-term debt and repay all existing short-term debt with the objective of diversifying loan repayment
dates and hedging against interest rate fluctuations. (Scheduled date of refinancing: June 29, 2007)■ Ratio of Long-term Debt
100%

■ Ratio of Fixed Interest Borrowings
100%

7.0%
38.5%

80%

35.9%

80%

54.0%

57.6%

ShortShort-term

60%
100.0%

100.0%

93.0%

40%

Variable60%
100.0%LongLong-term

61.5%
20%

Fixed

40%
64.1%
42.4%

46.0%

End of second
periodAfter refinancing(planned)

20%

0%
IPO

End of first period

End of second period0%After refinancing(planned)

IPO■ Diversifying Repayment Dates(bn yen)(bn yen)200

Pre-refinancing
Pre-refinancing

150

Average
Average length
length till
till maturity:
maturity:
22
22 months
monthsEnd of first period

Flexibly review the ratio of fixed interest loans based ona constant analysis of interest conditions after therefinancing

200

After
After refinancing
refinancing

150

Average
Average length
length until
until maturity:
maturity:
41
41 months
months100*Calculated using 6/29/07 as thestandard*Calculated using 6/29/07 as the standard

100
50

50

0
PeriodPeriods
Periods
Periods
Periods
Periods
Periods
Periods
ending 10/07 ending 4/08 ending 4/09 ending 4/10 ending 4/11 ending 4/12 ending 4/13 ending 4/14
and 10/08
and 10/09
and 10/10
and 10/11
and 10/12
and 10/13
and 10/14 (period)
Periods
Periodending 4/08
ending 10/07
and 10/08

Periods
ending 4/09
and 10/09

Periods
ending 4/10
and 10/10

3/3/2009
25

184

167

Periods
ending 4/11
and 10/11

Periods
ending 4/12
and 10/12

Periods
ending 4/13
and 10/13

Periods
ending 4/14
and 10/14

0Periods

Periods

Periods

Periods

Periods

ending 10/07 ending 4/08

PeriodPeriods

ending 4/09

ending 4/10

ending 4/11

ending 4/12

ending 4/13

ending 4/14 (period)and 10/08

and 10/09

and 10/10

and 10/11

and 10/12

and 10/13

and 10/14

Periods
Periodending 4/08
ending 10/07
and 10/08

Periods
ending 4/09
and 10/09

Periods
ending 4/10
and 10/10

Periods
ending 4/11
and 10/11

Periods
ending 4/12
and 10/12

Periods
ending 4/13
and 10/13

Periods
ending 4/14
and 10/14

3/3/2009

6/30/2010

3/3/2011

6/29/2012

167

85

167

85

3/3/2011
0

167

0

0

0

543

0

0

Periods

6/30/2014
0

40

544

Ⅱ-8
18

II-9 Ito-Yokado Higashi-Narashino Store:
Handling of Early Contract Termination Notice
Overview of Lease
Agreement

Negotiations with thetenant¾ Term of Lease: December 1, 1994 to November 30, 2014 (for 20 years)
years)¾ Rent revisions: review every three years (most recent revision date:
date:
December 1, 2006)

Ito-Yokado

9 Requested a substantial reduction in rent

Top REIT¾ Proposed a reconsideration of the rent
and continuation of negotiations

Ito-Yokado

9 Submitted an early termination notice(requesting early termination as of February
29, 2008)¾ Prohibition of early termination
a. Termination is prohibited for the first thirteen years (until November 30,
2007)2007) regardless of reasons thereofb. Even after the period set forth in a., early termination is prohibitedprohibited
unless continuation of the agreement is impracticable for unavoidable
unavoidable
reasons.

Key Factors in
Acquiring the Property¾ Location assessment:
A market potential assessment was conducted by an outside expert,
expert, that
concluded as follows:
・Market volume is standard for a suburban area;
・The building is a store in a small commercial area ;・Located in a highly competitive area, but competitive because of
sufficient parking spaces and other factors.

¾ Rent/price assessment:
assessment:
The rent and return were calculated based on the results of the locationassessment and the analysis of the real estate market condition¾

Ｔop REIT¾

Explained that Top REIT did not believe therequested termination fell under any reasons forearly termination stipulated in the lease agreement
Reinformed Ito-Yokado that Top REIT intended tocontinue negotiations to revise the rent

Negotiations still
under way

Future policy¾ Continue negotiations over rental revisions with thetenant.

¾ Consider and formulate possible counter measures in linewith the progress in negotiations with the tenant andimplement measures in an appropriate time frame

Ⅱ-919

II-10 Portfolio and Operations Compliance
Update on implementation of Business Improvement Plan as of November 13, 2006
Action Plans Set Forth In The Business Improvement Plan

Follow Up(1) Reconfirm respective responsibilities of directors and receive pledges oncompliance with laws and regulations

Received pledges from directors (at the meeting of board of directors held on November 27, 2006)(2) Reinforce supervisory function of supervising directors

Hold preliminary meetings of supervisory directors (pursuant to the rules of the board of directors
revised by a resolution of the board of directors made on November 27, 2006)(3) Prepare annual schedule for the meeting of the board of directors

Prepare an annual schedule and hold the meetings of the board of directors in accordance withthe schedule(4) Review operational rules for the meeting of the board of directors andclarify administrative procedures for holding and operating such meetings

Prepared manual for operation of the meeting of the board of directors in August 2006
Established administrative process rules in November 2006

Handling and Confirmation of Recent Property Issues
Asbestos

PCB
9
9

No PCBs are found in portfolio properties
According to expert views, it cannot be denied that there is a possibility that traces of PCBs arefound in insulating oil in converters and other equipment manufactured during or before 1989.
Inspections are conducted when electricity is cut for maintenance. It has been verified that there
are no PCBs in portfolio properties that have been inspected.

Elevator Inspection Status
9 Elevators maintained and managed by Nippon Otis Elevator: Faret East Building=> Emergency inspection was conducted and no abnormalities were found.
9 Elevators maintained and managed by Hitachi Building Systems: Kanda Park Plaza, Ito-Yokado
Higashi-Narashino Store and OAK PLAZA,
9 Elevators maintained and managed by Fujitec: Musashiurawa Shopping Square=> No problems were found in the legal inspections, and emergency inspections are planned

9

Confirmed through expert reports that no asbestos that is detrimental to human bodies or theirhealth (such as sprayed asbestos without measures to prevent dispersion) was involved in
portfolio properties.
The following laws and regulations have been effective since October 2006 and stipulate“restrictions to the use of materials that can disperse asbestos (*1)” and “measures to be taken in
rebuilding or expanding existing buildings (*2)”.
At present, there is no specific impact from the above laws and regulations. Top REIT will
confirm the use of asbestos by implementing an environmental investigation before acquiring abuilding and take necessary measures in accordance with the laws and regulations.
*1 Use of sprayed asbestos and rock wool that contains asbestos from more than 0.1% of its
weight is prohibited.
*2 In principal, the removal of asbestos is required when rebuilding, expanding, carrying out
large-scale repairs or refurbishment on existing buildings built using materials set forth in *1
above. (The sealing or enclosing of asbestos is allowed when rebuilding or expanding does notexceed half the existing floor space.)

Falsified Structure Calculation Issue
9 Judgment on building before acquisition:acquisition: Obtain reports of earthquake risk analysis by experts that include
include verification of building structure.
9 Calculation of PML score: The PML score for the overall portfolio is 2.2% (as of March 2007).
2007).
9 No involvement of professionals in question: TOP REIT confirmed that no professionals reported to falsify structural
structural calculations were involved in the construction of
the portfolio properties.

Ⅱ-10
20

III. Portfolio Overview and Forecast for Third and Fourth Fiscal Periods

Ⅲ21

III-1 Appraisal Values as of End of Second Fiscal Period
Asset
Class

Area

Property

Appraisal
CAP

Appraisal
Price (B)(Million Yen)

(B)-(A)（Million
Yen）

Appraisal Price & CAP as of Apr
30,2007

Appraisal
CAP

Appraisal
Price (C)(Million Yen)

(Ｃ)-(A)(Million
Yen)

Appraisal
CAP

41,950

4.5%

47,050

5,100

4.1%

51,500

9,550

4.1%

Harumi Island Triton Square
Office Tower Y

33,40533,000

5.3%

39,100

6,100

4.6%

41,300

8,300

4.4%

Akasaka Oji Building

9,948

9,660

4.8%

11,700

2,040

4.4%

14,200

4,540

4.2%

Kanda Park Plaza

5,179

5,156

5.2%

5,202

46

5.2%

5,260

104

5.2%

Tokyo
Metropolitan

Faret East Building

1,482

1,520

6.3%

2,140

620

5.9%

2,450

930

5.7%

KansaiNittetsu Honmachi Building

1,121

1,100

6.5%

1,140

40

6.3%

1,330

230

6.2%

94,411

92,386－

106,332

13,946

4.4%

116,040

23,654

4.3%

Sagamihara Shopping Center

12,007

12,0005.3%

12,100100

5.3%

12,100100

5.3%

Ito-Yokado Higashi-Narashino

9,051

8,900

6.3%

9,010

110

6.3%

6,888

-2,012

6.1%

Musashiurawa Shopping Square

4,499

4,335

5.1%

－

－

－

4,350

15

5.1%

Sub-Total (2 Properties)

25,55925,235－

21,110210

5.7%

23,338-1.897

5.5%

Fukasawa-House tower H&I

10,968

10,635

4.3%

－

－

－

10,500-135

4.3%

Sub-total (1 property)

10,968

10,635－－－－

10,500-135

4.3%

OAK PLAZA

2,637

2,590

4.8%

－

－

－

2,590

0

4.8%

Sub-total (1 property)

2,637

2,590

－

－

－

－

2,590

0

4.8%

Total(11Properties)

133,576

130,846－

127,442

14,1564.6%

152,468

21,622

4.5%

Sub-Total (6 Properties)

OthersAcquisition
Price (A)(Million Yen)

Appraisal Price & CAP as of Oct 31,2006

43,273

OfficeResidential

Acquisition Price & CAP

NEC Head Office Building
Central Tokyo

RetailBook
Value(Million
Yen)

Tokyo
Metropolitan

Tokyo
Metropolitan

CentralTokyo

Note: Appraisal CAPs are the cap rates used when calculating the capitalized value using the direct capitalization method.
CAPs indicated in the subtotal and total columns are average cap rates weighted by the acquisition price (at acquisition) or value calculated at period end (at period end).

Ⅲ-1
22

III-2 Portfolio Data (Summary)
Total Acquisition Price:

Rentable Area: 261,671.68㎡¥130.846Billion

PML:

Number of Properties: 11

Usage
100%

11.5%

80%
60%

88.5%

Scale (based on total floor area)
2.0%
8.1%
19.3%

18.4%
81.6%

Othersその他
Residential
住宅

70.6%

Retail
商業施設

40%
20%
0%

2.2%

100%
80%

(37.0%)(32.1%)IPO
上場時

End of
第1期末
1st period

End of 2
第2期末PeriodOfficeオフィスビルnd（ ）： Share of NEC
Head Office
Building

5.5%

10.7%
11.5%

17.7%

1.1%
13.0%

1.0%
19.8%

80%

26.8%
10,000m2 –
1万㎡以上5万㎡未満

9.2%

49,999m2

50,000m –5万㎡以上10万㎡未満
2
2

71.8%

99,999m

66.2%

57.3%

20%
0%

IPO
上場時

End ofst period
1第1期末

End of 2
第2期末Period100,000m2

10万㎡以上or more
nd

Age
0.8%

100%

4.9%

4.6%

5.9%
20 years
20年以上

28.6%
Kansai
関西圏

60%
40%

Less than

1万㎡未満
10,000m2

10.6%

AREA
100%

6.8%

60%
40%

(40.2%)

6.0%

or more

80%
49.4%

46.5%

40%

14.0%

19.8%

20%

31.6%

29.1%

IPO
上場時

End of
1st第1期末
period

40.3%

60%
86.0%

79.2%

70.6%

Metropolitan
東京周辺都市部
Tokyo
Central
東京都心部
Tokyo

20%
0%

IPO
上場時

End of
1st第1期末
periodEnd of 2nd
第2期末Period

17.1%
25.2%
11.4%

0%

End of 2nd
第2期末Period15 years –15年以上20年未満
19 years
10 years –10年以上15年未満
14 years
5 years –5年以上10年未満
9 years
Less than
5年未満
5 years

Avg.
Avg. :: 12.8
12.8 years
years※Weighted Average based on
Acquisition Price※Numbers on above graphs are calculated based on Acquisition Price

Ⅲ-2
23

III-3 Forecasts for the Third and Fourth Fiscal Periods
Item

Third Fiscal Period
May 1, 2007 – Oct 31,
2007

Fourth Fiscal Period
Nov 1, 2007 – Apr 30,
2008

Second Fiscal Period
Results
Nov 1, 2006 – Apr 30,
2007

Reference only
(Normalized First Fiscal
Period Results) ÷ 245 Days ×
365 Days ÷ 2Length of AssetManagement (days)

184

182

181

182.5

Operating Revenue¥4,698mn¥4,634mn¥4,526mn¥4,037mn

Operating Expenses¥2,584mn¥2,509mn¥1,878mn¥1,610mn

Property expenses(Except Depreciation)¥1,113mn¥1,049mn¥515mn¥485mn(Tax & Public Due: ¥492mn)(Tax & Public Due: ¥433mn)(Tax & Public Due 0)(Tax & Public Due 0)

Depreciation¥926mn¥931mn¥873mn¥730mnOperating Income¥2,113mn¥2,125mn¥2,647mn¥2,427mn

Ordinary Income¥1,644mn¥1,628mn¥2,324mn¥2,034mn

Net Income¥1,643mn¥1,627mn¥2,323mn¥2,033mn

Number of Units Issued

155,000

155,000

155,000

155,000

Dividend per Unit

¥10,600¥10,500¥14,992¥13,116

NOI(Rental)¥3,584mn¥3,585mn¥4,010mn¥3,551mn

FFO¥2,569mn¥2,559mn¥3,197mn¥2,763mn

118Assumptions

Number of Properties Assumed:11
Total number of units outstanding: 155,000
Outstanding Debt : ¥54.3Bil after Refinance June 29,
2007 ¥54.4bil
Non-Operating Expenses
3rd Fiscal Period ¥496mn (Interest Paid ¥428mn)
4th Fiscal Period ¥497mn (Interest Paid ¥455mn)

Ⅲ-3
24

IV. Growth StrategiesⅣ25

IV-1 External Growth Strategies: Investment Policies
Diversified Portfolio
Asset Class
OfficeRetailResidence

Investment Focus

Allocation

Mainly in Central Tokyo
Three major metropolitan areasand core regional cities

Less Than
80%

Three major metropolitan areasand core regional cities

Less Than
50%

Mainly in Tokyo Metropolitan
Area Plus three major
metropolitan areas and coreregional cities

Less Than
50%

Investment focus will be determinedbased on characteristics of each asset

OthersLess Than
10%

Estimated Candidate Real Estate Market Nationally：
Approx. JPY 54.5Trillion(Aggregation of three types of properties)

Residence
20%
28％
RetailAn array of
Choices fromThree Asset Class
Enable to ScreenCompetitive
Properties

Office52％

Source: STB Research Institute“Estimated Investment Market Size by Property Type” dated Oct 31, 2005

Pursuing steady external growth through a
blue-chip portfolio of diverse asset types

Effectively Applying theCharacteristics of Each Asset ClassTo avoid a Bias on Certain Asset Classes

EnableSelective
Investment

HighlyCompetitive

TargetPursuing External Growth
Office buildings

Focusing on Blue-Chip
Properties

Pursuing Both Steady Growth and Quality

Retailproperties

Residential
properties

Lowly
Competitive

IV-1
26

IV-1 External Growth Strategies (2)External Growth Policy
Steps to Ensure Stable Dividends
Growth in the Medium to Long Term

Utilizing Sponsor Strengths

Achieving External Growth

Intense Competition for
Acquiring New Properties

Pipeline & Warehousing Functions

Pursuing
Blue-Chip Properties■Growth Image for Medium to Longong-term Portfolio■Property Sourcing Information Conditions(May 1 – October 31, 2006)

To reduce investment share in NEC Head Office Building
Additional acquisition: about 80 billion yen

Information from
Sponsors

Use

Of which,development

bn yen(November 1, 2006 – April 30, 2007)

Information from
non-sponsors

Information from
Sponsors

Of which,development

Information from
non-sponsors

Of which,development

Of which,development

Office

24

8

51

0

14

0

25

2

Retail

12

3

14

0

5

0

14

1

Residential

24

6

69

4

8

5

23

3

Other

8

4

9

4

2

1

3

0

68

21
211

143

4

29

6
94

65

6

2,500

2,100
2,000

1,500

1,043

1,132

About
¥80Bil

1,308

Other
26.6%

1,000

500

Additional
acquisition

31.6%

29.1%

25.2%

25.7%

40.2%

37.0%

32.1%

20.0%

At IPOEnd of 1st period

End of 2nd period

External growth
image

0

Harumi Island
Triton Square
Office Tower Y
NEC Head Office
Building■Selection of Properties by Use
Use*Ratio of sponsor information: About 30% (meaningful information that meetsinvestment standards)■Impact on dividend (image) caused by new acquisitions usingborrowings (10 billion yen)
Assumptions: NOI return: 4.0~5.0%
Borrowings interest: 1.5%; No. of investment units: 155,000 units

PolicyOfficeProactively examine properties centering on offices in central Tokyo

RetailExamine properties including urban retail facilities that can highly utilize
characteristics of each location and usage

Residential

Total

Emphasize and study location centered on sponsor development properties

Depreciation and administrative
expenses
About 160 mn p.a.
NOI 4.0-5.0%

Non-operating expenses

400-500 mn p.a.

about 155 mn p.a.
Total dividend
About 85-185 mn p.a.

(based on cruising speed after paying real
property and city taxes)

Impact on dividend+ about 250 yen ~ 600 yen/unit
x period

Ⅳ-1
27

IV-2 Internal Growth Strategies
Internal Growth Policy
Striving to maintain and improve revenues over the medium to long-term by maintaining and improving tenantsatisfaction (“Tenant First” Policy)
A. The maintaining and improving of tenant relations results in good relationships with tenants andconsequently the maintenance of a high occupancy
B. The examination of detailed measures to improve earnings by sharing themes and issues with the property
manager and developing measures that meet the unique criteria of each property
C. Maintenance and securing of quality in property management and promotion of appropriate maintenance
costs

3年

Maintain and Improve Earnings Over the Medium to Long-term

Maintain and improve rent levels

Improve property competitiveness■ Revise rents to appropriate levels based on tradearea and market rents■ Build and maintain good tenant relations

Maintenance of high occupancy■ Build and maintain good tenant relations■ Grasp tenant needs

Rent levels

Utilities, property
taxes, city planningtaxes, etc.

Occupancy

Repair andmaintenance fees
Management
expenses

5年

ＮＯＩ■ Improve the competitiveness of properties(implementation of schedule-based maintenanceand repairs that aim to maintain and improvefunctions, etc.)

Establish appropriate
management costs■ Review management specifications and achieve
appropriate management expenses

Ⅳ-2
28

IV-3 Financial Strategies
Conservative Financial Policy
Conservative Financial Policy

Maintaining Multiple Financing Channels

Diversifying Debt Maturities

Maintaining Good Relationships with Prominent
Lenders to Secure Stable Debt and Additional
Borrowing Capability

Countering Future Interest Rate Fluctuation

Diversification of borrowing
period and repayment dates

Maintaining a Conservative Leverage Ratio Consistently
Consistently maintain
maintain LTV
LTV atat aa conservative
conservative 40-50%
40-50% toto ensureensure

financingfinancing capabilities
capabilities forfor forthcoming
forthcoming acquisitionsacquisitions
Capacity
Capacity ofof Additional
Additional Borrowings
Borrowings
andand Acquisitions
Acquisitions
Approx. ¥37 bn
Capacity for additional borrowings（Unit: Billion Yen）

Ceiling
Ceiling LTV
LTV == ①①

3年

Borrowings
54.
54.3

②②

Current Assets
12.
12.6

Capacity of
Additional Borrowings
Approx. 37.0①①

Capacity of
Additional Acquisitions
Approx. 37.0

Operational goal 50%(Scope for operations: 4050%)

Period-end
Period-end LTV
LTV == ②②
Period-end 37.1%

Guarantee (with interest)1
interest)1.36

5年

Hedging against the risk ofrising interest rates
 The refinancing has raised the ratio of fixed interest
borrowings to 46.0%. Top REIT will continue tohedge against interest rate fluctuation risks while
analyzing conditions of market interest.

Building of a stable bank formation
Securing a dynamic financial policy

Deposits and guarantees 4.8

Other 1.3

Fixed Assets
133.
133.7

Ratio of interest-bearing debt
to total assets
38.0%

Net assets 84.5

The refinancing to be executed on June 29, 2007
extended the borrowing periods and diversified
repayment dates. This policy will continue to befollowed as a means to improve the stability offinancial operations.

All borrowings have been obtained unsecured andan issuer rating has been obtained.
Top REIT continues to maintain stable transactions
with six banks Top REIT dealt with at the time of
the IPO. Development Bank of Japan and DaiDai-Ichi
Mutual Life Insurance is planned to join as new
lenders (7-years, at time of refinancing).

Ⅳ-3
29

V. Asset ManagementⅤ30

V-1 Decision Making Process for Acquisition and Disposition of Properties

少数意見の報告
Report of minority opinions
（注2）

（注1）

ﾘｽｸ･
ｺﾝﾌﾟﾗｲｱﾝｽ
Risk and
委員会
Compliance(Note 1)

Department
立案部
in charge ofpreparing a
Proposals

ｺﾝﾌﾟﾗｲｱﾝｽ
室Compliance

Committee

審議・決議
Examination

Examination

and（否決） decision
差戻し

投資運用
Investment
委員会
and

取締役会
Board ofDirectors(Rejection)

審議・
決議
Examination
anddecision（否決・中止（注3））(Rejection and/or

決定FinalDecisionManagement
Committee

Office審査(Note 2)

審議・決議
Examination
and（否決） decision(Rejection)（注1）以下いずれかに該当する場合にはリスク・コンプライアンス委員会に付議します。
Suspension) (Note 3)
Return• 利益相反取引規程に定める利害関係者との重要な取引（この場合、全会一致の議決が必要）(Note 1)will be passed to the Risk and Compliance Committee if they fall on either of the followings:• Proposals
コンプライアンス室長がリスク・コンプライアンス委員会での審議を必要と認める場合• Material transactions with interested parties defined in the rules on transactions with interested parties（注2）以下いずれかに該当する場合には取締役会に付議します。
(unanimous vote is required in this case)• 取得又は売却予定額が100億円超かつ本投資法人の総資産額の10%を超える場合• The head of the Compliance Office recognizes the discussion of the issues in the Risk and Compliance Committee to be necessary.
• Proposals
資金調達計画（資金調達に関する最終意思決定は本投資法人の役員会にて行われます。）(Note 2)will be passed to the Board of Directors if they fall under any of the followings:• The price of proposed acquisition or sale is over 10 billion yen and over 10% of Top REIT’s total assets.
• 利益相反取引規程に定める利害関係者との重要な取引• Capital raising plans (Final decisions on raising capital shall be made by the Board of Directors of Top REIT.)（注3）コンプライアンス室長は、投資運用委員会における審議、決議の過程で法令等に照らして問題点がある• Material transactions with interested parties defined in the rules on transactions with interested parties(Noteと判断する場合には、審議及び決議を中止し、立案部に差し戻すことができます。
3) The head of the Compliance Office can suspend discussions and decisions and return the item to the Department in charge of if he or
she judges that the item has legal problems in the process of discussions or decision making at the Investment and Management Committee.

Ⅴ-1
31

V-2 Overview of Asset Manager
Name

Top REIT Asset Management Co., Ltd.

名

称

Address

Nittetsu Nihonbashi Building地
東京都中央区日本橋一丁目13番1号日鐵日本橋ビル
1-13-1
Nihonbashi, Chuo Ward, Tokyo所

在

トップリート・アセットマネジメント株式会社（Top REIT Asset Management Co., Ltd.）

EstablishedOct 22, 2004

設立

平成16年10月22日

株主総会
株主総会

Paid-in Capital ¥300mn
資本金と株主構成
The 3億円
Sumitomo Trust & Banking Co., Ltd. 38%
Shareholders
住友信託銀行株式会社
38%
Nippon Steel City Produce, Inc. 31%
株式会社新日鉄都市開発
31%
Oji Real
Estate Co., Ltd. 31%

王子不動産株式会社
Business
Description
事 業 内

Investment trust manager andasset
manager of J-REIT
容投資法人資産運用業

Directors者

代表

President and代表取締役社長
Representative Director

平成19年7月1日より代表取締役社長

Milestone沿Oct 22, 2004
2004
革Dec 10,
平成16年12月10日
May 10, 2005

平成17年5月10日

Jun 28, 2005

平成17年6月28日
Nov 2,
2005
平成17年11月2日

監査役
取締役会
投資運用委員会

ﾘｽｸ･ｺﾝﾌﾟﾗｲｱﾝｽ委員会

31%
代表取締役社長: Kyoichi TSUCHIDA (Incumbent President: Till June 30, 2006)
土田 京一
投資運用部
企画・管理部
ｺﾝﾌﾟﾗｲｱﾝｽ室
財務部: Nobuhito ENDO (New
President: Effective
date of appointment:
July 1, 2007)

遠藤 晋民: Top REIT Asset Management (“TRAM”) established:宅地建物取引業の免許取得
TRAM obtained a license for real東京都知事（1）第83904号
estate agent (The Governor’s of Tokyo No. (1) 83904): TRAM obtained an approval for discretionary agent license for real estate transaction
宅地建物取引業法上の取引一任代理等の認可取得(The Minister of Land, Infrastructure and Transport No. 35)
国土交通大臣認可第35号: TRAM obtained an approval for asset manager for investment corporation
投資信託委託業者の認可取得
内閣総理大臣第47号(The Prime Minister No. 47):トップリート投資法人と資産運用委託契約の締結
TRAM entered into the Asset Management Agreement with Top REIT, Inc.

※全て平成19年6月20日現在

Ⅴ-2
32

VI. Appendix

Ⅵ
33

VI-1 Portfolio Map
Tokyo
metropolitan area

Osaka
metropolitan area

Musashiurawa
Shopping Square

Amagasaki

Faret East Building
Fukasawa-House
深沢ハウスＨＩ棟
tower H & I

Ito-Yokado
Higashi-Narashino

Fukasawa-House
tower H & I
Sagamihara
Shopping Center

Shin-Osaka

Osaka

Kyobashi

日鉄本町ビルNittetsu Honmachi
Building
TennojiHarumiIsland Triton Square オフィスタワーＹ
Office Tower Y
晴海アイランドトリトンスクエア

Central Tokyo

Akihabara

Iidabashi
OAK PLAZA
Kanda

Kanda Park Plaza

Shinjuku
YotsuyaShibuyaWard

ChiyodaWard

Akasaka Oji
Building

Shibuya

Shinagawa
Ward

Tokyo

Chuo Ward
Shinbashi

MinatoWard

武蔵浦和ショッピングスクエア
Musashiurawa
Shopping Square

Harumi Island Triton
Square Office Tower Y

NEC Head
Office Building

Shinagawa

NEC
Head Office
日本電気本社ビル
Building

Ⅵ-1
34

VI-2 Portfolio Overview■End of Second Fiscal Period
Asset
Class

Address

Acquisition Date

Floor Area(m2)

Rentable
Area (m2)Completion
Date

Acquisition
Price

Share
(%)

NEC Head Office
Building

Minato Ward,Tokyo

March 3, 2006

144,476.05

72,238.03

Jan 1990¥41,950mn

32.1

100.0

1

1.6

Harumi Island Triton
Square Office Tower Y

Chuo Ward,Tokyo

March 1, 2006

267,132.67

23,239.62

Oct 2001¥33,000mn

25.2

100.0

7

1.4

Akasaka Oji Building

Minato Ward,Tokyo

March 1, 2006

10,063.05

7,281.83

Apr 1989¥9,660mn

7.4

100.0

3

6.3

Chiyoda Ward,Tokyo

March 1, 2006

5,511.83

4,537.66

Nov 1959¥5,156mn

3.9

100.0

10

14.1

Tokyo
Faret East Building
Metropolitan

Tachikawa,
Tokyo

March 1, 2006

16,206.34

4,663.33

Dec 1994¥1,520mn

1.2

100.0

1

2.9

Nittetsu Honmachi
Building

Osaka City,
Osaka

March 1, 2006

6,714.09

4,409.53

Jun 1991¥1,100mn

0.8

100.0

9

8.0

－

116,370.00－¥92,386mn

70.6

－

31

－

Area

CentralTokyo

Property

OfficeKanda Park Plaza

Kansai

Sub-Total (6 Properties)
March 1, 2006

56,351.42

61,763.28

Aug 1993¥12,000mn

9.2

100.0

2

3.8

Narashino, Chiba

June 30, 2006

45,338.37

51,098.42

Oct 1994¥8,900mn

6.8

100.0

1

7.7

Saitama City,
SaitamaMarch 19, 2007

28,930.36

14,960.69

Oct 2005¥4,335mn

3.3

100.0

3

8.5

－

127,822.39－¥25,235mn

19.3

100.0

6

－

12,135.36

11,357.44

June 2004¥10,635mn

8.1

89.5

1

1.6

－

11,357.44－¥10,635mn

8.1

89.5

1

－

6,121.85

6,121,85

April 1985

¥2,590mn

2.0

100.0

1

7.7

Sub-Total (1 Property)－

6,121,85－¥2,590mn

2.0

100.0

1

－

Total (11 Properties)－

261,671.68－¥130,846mn

100.0

99.5

39

2.2

Tokyo
Metropolitan Ito-Yokado HigashiNarashinoMusashiurawa
Shopping Square
Sub-Total (3Properties)

Fukasawa-House

Tokyo
Residential Metropolitan tower H & I

Setagaya Ward, December 8, 2006
Tokyo

Sub-Total (1 Property)
CentralOthers Tokyo

PML
（％）

Sagamihara,
Kanagawa

Sagamihara
Shopping Center

RetailOccupancy No. of
Tenants(%)

OAK PLAZA

Chiyoda Ward,Tokyo

March 20 2007

Ⅵ-2
35

VI-3 Appraisal Value Comparison between First and Second Fiscal Periods■End of Second Fiscal Period
Properties

NEC Head Office
Building

Appraisal
Values(Million
Yen)

DirectCapitalization
Method:Cap Rate

51,500

4.1%■ End of First Fiscal Period
Discounted Cash Flow Method
Discount Rate

Terminal
Capitalization
Rate

3.7% (For first 6yrs)
4.2% (7 yrs onward)

4.2%

Harumi Island Triton
Square Office Tower Y

41,300Akasaka Oji Building

14,200

4.2%

4.4%

4.5%

Kanda Park Plaza

5,260

5.2%

4.8%

5.8%

Faret East Building

2,450

5.7%

5.8%

6.0%

4.4%

4.1%

1,330

Sagamihara Shopping
Center12,100

5.3%

5.2%

5.5%

Ito-Yokado HigashiNarashino

6,888

6.1%

5.8%

6.6%

Musashiurawa
Shopping Square

4,350

5.1%

5.0%

5.3%

Fukasawa-House
tower H&I

10,500

4.3%

4.0%

4.5%

OAK PLAZA

2,590

4.8%

4.3%

5.4%

6.2%

Appraisers in Charge

Discounted Cash Flow Method
Terminal
Capitalization
Rate

Discount Rate

NEC Head Office
Building

47,0504.1%

3.8% (For first 7yrs)
4.3% (8 yrs onward)

4.4%

Harumi Island Triton
Square Office Tower Y

39,100

4.6%

4.3%

4.8%

Akasaka Oji Building

11,700

4.4%

4.6%

4.7%

Kanda Park Plaza

5,202

5.2%

4.8%

5.8%

Faret East Building

2,140

5.9%

6.0%

6.2%

Nittetsu Honmachi
Building

1,140

6.3%

6.3%

6.6%

Sagamihara Shopping
Center12,100

5.3%

5.2%

5.5%

Ito-Yokado HigashiNarashino

9,010

6.3%

5.4%

6.8%

Musashiurawa
Shopping Square

－

－

－

－

Fukasawa-House tower
H&I

－

－

－

－

OAK PLAZA

－

－

－

－

4.6%

Nittetsu Honmachi
Building

6.2%

Properties

DirectAppraisal
Capitalization
Values
Method:(Million Yen)
Cap Rate

6.5%

Properties

Tanizawa Sogo Appraisal Co., Ltd.

NEC Head Office Building, Akasaka Oji Building, Faret East Building, Nittetsu Honmachi Building

Japan Real Estate Institute

Harumi Island Triton Square Office Tower Y, Fukasawa-House tower H&I

Chuo Real Estate Appraisal Co., Ltd

Kanda Park Plaza, Ito-Yokado Higashi-Narashino, OAK PLAZADAIWA REAL ESTATE APPRAISAL Corporation.

Sagamihara Shopping Center, Musashiurawa Shopping Square

Ⅵ-3
36

VI-4 Performance on Property Basis
NEC Head
OfficeBuilding
Length ofManagement (days)

Harumi Island Akasaka Oji
Triton Square Building
Office Tower Y

Kanda Park
Plaza

Faret East
Building

Nittetsu
Honmachi
Building

Sagamihara
Shopping
Center

Unit: Million
Yen
Fukasawa- OAK PLAZA

Ito-Yokado
HigashiNarashinoMusashiuraw
a Shopping House Tower
H&I
Square

181

181

181

181

181

181

181

181

43

144

42

Total Revenue

1,370

1,313

396

181

123

105

408

363

30

212

22

Rental Revenue

1,370

1,313

396

181

123

105

408

363

30

204

22

Property RelatedExpenses Total

5

275

70

27

50

31

8

11

0

33

0

Property
Management Fee

1

192

41

8

24

16

2

2

0

28

0

Taxes and Public
Charges

－

0

－

－

－

－

－

－

－

0

0

Utility Costs

－

77

21

11

23

9

－

－

－

0

－

Insurance Fees

1

2

0

0

0

0

1

1

0

0

0

Repair Expenses

－

0

3

4

－

2

3

4

0

2

－

Others

1

2

2

2

1

2

1

3

0

2

0

1,365

1,037

326

153

73

73

399

351

29

179

21

232

266

31

12

29

23

77

123

16

55

3

1,133

771

295

141

43

49

321

227

12

123

18

30

1

15

0

－

27

4

2

－

－

－

ＮＯＩ
Depreciation &Amortization
Operating Income

Capital Expenditures

Property Tax will be charged from 3rd Fiscal
Period except Musashiurawa and OAK
Plaza. Property Tax for these properties will
be charged from 5th fiscal period.

Repairing cost forexterior wall andothersRepairing cost forexterior wall andothersReplacing airconditioning
equipments andothersⅥ-4
37

2003.10

Luxury specialty store
in city center (Ginza)

2004.04
2004.10
2005.04
2005.10Luxury specialty store
in city center (Omotesando)

2006.04
4.0

5

-5.0

3
Suburban Shopping Mall

Source: “The Japanese Real Estate Investor Survey” by Real Estate Institute2006.10
May
June
July

Total

Aug
Sep

Tenants
Tenant
総合 Anchor
テナント

Oct
Nov
Dec
Jan

10.8

Feb

13,230

2.7
2.4

Periodended
Mar 2007

13,12013,04013,1102.9

Periodended
Dec 2006

Periodended
Sep 2006

13,18013,22013,35013,49013,67013,67013,83013,86013,96014,09014,19014,22014,33014,52014,46014,48014,7204

Periodended
Mar 2006
Periodended
Jun 2006

Periodended
Dec 2005

Periodended
Sep 2005

14,67014,520

5.7

Periodended
Jun 2005

Periodended
Mar 2005

Periodended
Dec 2004

Periodended
Sep 2004

Periodended
Mar 2004
Periodended
Jun 2004

Periodended
Dec 2003

Periodended
Sep 2003

Periodended
Jun 2003

Periodended
Mar 2003

Periodended
Dec 2002

Periodended
Sep 2002

14,72014,7406

2006年 10～ 12月（¥1,000/Tsubo）

6

2006年 7～ 9月

6Office Leasing Market in 5 Major Wards in Tokyo

2006年 4～ 6月

Apr

3.6

2005年10～12月
2005年 7～ 9月
Oct – Dec 20057
6.7

2006年1～3月
2005年 10～ 12月
Jan - Mar 2006
2006年4～6月
2006年 1～ 3月
Apr – Jun 2006

2006.10

4.4

2005年7～9月
2005
年 4～ 6月
Jul – Sep 2005

9,000

5.1

2005年4～6月
2005
年 1～ 3月
Apr – Jun 2005

8
10,000

3.4
6

2005年1～3月
2004年
10～ 12月
Jan - Mar 2005

9
6.1

2004年10～12月
7～2004
9月
2004
Oct
–年
Dec

Expected returns (Retail Property in Tokyo and its surroundings)
4.9

2004年7～9月
4～2004
6月
2004
Jul
–年
Sep

10
12,0007.1

1～20043月
2004
2004年4～6月
Apr
–年
Jun

Source: “The Japanese Real Estate Investor Survey” by Real Estate Institute13,0002003年
10～ 12月
Jan2004年1～3月- Mar 2004
Jan - Mar 2004

Expected returns (Residential Property in Tokyo)

4.2

Periodended
Jun 2002

3
3.4

Periodended
Mar 2002

2.5
11,000
3.6

Periodended
Dec 2001

3.5

Periodended
Sep 2001

4

Periodended
Jun 2001

4.5

Periodended
Mar 2001

5

5

6

2003
年
7月～20039月
2003年10～12月
Oct
– Dec
Oct – Dec 2003

2006.04

Oct 2006

5.5

Luxuryrentalhousing forforeigners(high-rise)5

Apr 2006

Oct 2005

6.5

Risk Premium
Marunouchi
Nihonbashi
Kanda
Akihabara
Toranomon
Shiodome
Akasaka
Ropongi
Kohnan(Shinagawa)Nishi Shinjuku
Shibuya
Ikebukuro
Ueno
Ohsaki

3月
～2003
Apr
– Jun
2003年
4月～6月
Apr – Jun 2003

2005.10Luxuryrentalhousing forforeigners(low-rise)

5.5

Apr 2005

Oct 2004

Apr 2004

（％）

2003年
4月～2003
6月
Jul
– Sep
2003年7月～9月
Jul – Sep 2003

2005.04(yen/Tsubo)

Jan
- Mar
2003
2003年
1月～3月
Jan
- Mar
2003

2004.10

Family Type
(Joto area)

5.2

7

Jul – Sep 2001
2001年7月～9月
Jul – Sep 2001
Oct – Dec 2001
2001年10月～12月
Oct – Dec 2001
Jan - Mar 2002
2002年 1月～3月
Jan - Mar 2002
Apr – Jun 2002
2002年4月～6月
Apr – Jun 2002
Jul – Sep 2002
2002年7月～9月
Jul – Sep 2002
Oct – Dec 2002
2002年10月～12月
Oct – Dec 2002

2004.04
Oct 2003

Apr 2003

Oct 2002

Expected returns (office Property in central Tokyo)

Jan - Mar 2001

4

Family Type
(Jonan area)

5.5

Apr 2002

Oct 2001■Trends in Real Estate Sales Market

Jan - Mar 2001
Apr – Jun 2001
2001年4月～6月
Apr– Jun 2001

5.7

2003.10

4

（％）

4

（％）
10
9
8
7
6
5
4
3
5.1

2

Studio(Joto area)

Studio(Jonan area)

VI-5 General Real Estate Market Conditions■Trends in Real Estate Leasing Market
16,000

平均募集賃料
平均空室率
(%)
14

15,00014,000

12

7
8

10

5.7
5.1
4.6
3.6
6

2.3
4

2

0

Source: “The Japanese Real Estate Investor Survey” by Real Estate InstituteSource “Office Market Report” by CB Richard Ellis
11.0

Rental Condominium Market in Tokyo(Historical Unit Rent per tsubo )FY2003
FY2004
FY2005
FY2006

10.6

10.4

10.2

10.0

9.8
Mar

Source: “Rental Information For Rent Edition: Monthly Report” by Recruit■Trends in Retail Property Market

3.0

Shopping Center Sales (year-on-year comparison)
Shopping Center Sales (year-on-year comparison)

2.0

-1.0

1.0

0.0

-2.0
-3.0

-4.0

Source: “Annual Sales Statistics of Shopping Centers” by the Japan Council of Shopping Centers
キーテナントⅥ-5
38

VI-6-1 NEC Head Office Building
Address

5-7-1 Shiba, Minato-ku,
TokyoAcquisitionPrice

41.95 billion yen

Site Area

21,190.14m2

Floor Space

144,476.05m2

Floors3 Basement Floors
39 Floors Above Ground

Completion

January 1990

Title

Land, Building:
CoOwnership (50%)■ The building enjoys great transportation convenience with four railway lines usable (JR Yamanote Line, Keihin-Tohoku Line, Toei
Subway Mita Line and Toei Asakusa Line) providing good access to Haneda Airport and various places in central Tokyo.
■ This property is widely referred to as the NEC Super Tower and is a landmark in Tokyo.
■ NEC Corporation has its head office in this building. The area forms a base of the NEC group with affiliates concentrating nearby.

VI-6
39

VI-6-2 Harumi Island Triton Square Office Tower Y
Address

1-8-11 Harumi, Chuo-ku,
TokyoAcquisitionPrice

33 billion yen

Site Area

39,569.53m2

Floor
Space

267,132.67m2

Floors4 Basement Floors , 40 Floors
Above Ground

Completion

October 2001

Title

Land: Co-ownership(16,884,921/100,000,000)
Building: Compartmentalized
ownership (3rd – 15th Floor )■ Harumi Island Triton Square is a large multi-use complex completed in 2001 through coordinated redevelopment of the Harumi district of Tokyo,
a bayside area. The Square has three skyscraper office buildings as its landmark, retail facilities and a high-rise condominium.
■ The property is a 40-story skyscraper that is an intelligent office building built in 2001 and equipped with state-of-the-art specifications.
■ The Tokyo head office of Sumitomo Metal Industries and the head office of Japan Trustee Services Bank are the main tenants.

VI-6
40

VI-6-3 Akasaka Oji Building
Address

8-1-22 Akasaka, Minato-ku, Tokyo

Acquisition Price

9.66 billion yen

Site Area and Floor
Space

2,023.72m2／10,063.05m2

Floors

1 Basement floor, 9 Floors Above
GroundCompletion

April 1989

Title

Ownership■ This building is in an area extending from the Akasaka district of Tokyo, an area home to many hotels and embassies that is also popular among
foreign firms, to the Aoyama district, home to fashion, culture and music with many luxury brand shops.
■ The building faces Aoyama Dori (avenue) and enjoys great transit convenience as the closest station (Aoyama-itchome Station) has tracks for
the Tokyo Metro Subway Ginza and Hanzomon Lines, and for the Toei Subway Oedo Line. Although located in the center of Tokyo, the area isrich in greenery with the Akasaka Imperial Grounds extending along the opposing side of Aoyama Dori.
■ The anchor tenant is Sony Computer Entertainment.

VI-6
41

VI-6-4 Kanda Park Plaza
Address

2-2-2 Kajimachi, Chiyoda-ku, Tokyo

Acquisition Price

5.156 billion yen

Site Area and Floor
Space

632.98m2／5,511.83m2

Floors

1 Basement floor, 9 Floors Above
GroundCompletion

November 1959

Title

Ownership■ This building faces Chuo-Dori, which leads to Nihonbashi and Ginza, and is located a stone's throw from Kanda Station with tracks for JR Lines
and the Tokyo Metro Ginza Line. This building enjoys great transit convenience and is located in a popular commercial district.
■ The building was originally built in 1959 but then completely renovated and reinforced to meet anti-seismic specifications in 2003. The building iscomparatively large within the area and highly competitive with its excellent location.
■ The building houses a retail tenant ideal for the location on the first floor, and houses multiple tenants that value transit convenience.

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VI-6-5 Faret East Building
Address

2-34-7 Akebonocho, Tachikawa,Tokyo

Acquisition Price

1.52 billion yen

Site Area and Floor
Space

2,350.84m2／16,206.34m2

Floors

1 Basement Floor, 12 Floors Above
GroundCompletion

December 1994

Title

Land: Co-ownership (44,544,000/100,000,000)
Building: Compartmentalized Ownership(2rd – 5th and a part of 6th Floor )■ Tachikawa is a traditional railway hub with JR Tachikawa Station serving as a major terminal station for the Ome, Nambu and Chuo (connects to downtown
Tokyo) Lines. The convenience has heightened with the establishment of the Tama Toshi Monorail that runs through the Tama district.
■ The area is thriving with energy with a variety of stores centering on department stores and other large-scale commercial facilities concentrated in front of thestation.
■ The Faret Tachikawa area, where the property is located, is a business zone completed through the redevelopment of the former Tachikawa Air Force Base,and is a concentration of large, high-grade office buildings, hotel, etc.

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VI-6-6 Nittetsu Honmachi Building
Address

1-10-24 Utsubohonmachi, Nishi-ku,
Osaka

Acquisition Price

1.1 billin yen

Site Area and Floor
Space

852.55m2／6,714.09m2

Floors2 Basement Floor,
12 Floors Above Ground

Completion

June 1991

Title

Ownership■ This building is located close to Yotsubashi Avenue, one of the major streets connecting the renowned Umeda and Shinsaibashi/Nanba districtsof Osaka (Umeda district is a business base and Shinsaibashi/Nanba district is a commercial base in Osaka). It is also within walking distanceof the thriving Yodoyabashi business district, and close to the Honmachi Station on the Yotsubashi and Chuo Lines. Located near to green-rich
Utsubo Park, the property enjoys a good environment though it stands in a city center.
■ This office building was designed using Design Comprehensive System Design with particular attention to harmony with its surroundings andfeatures significant open public space.

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VI-6-7 Sagamihara Shopping Center

Address

3-13-33 Kobuchi, Sagamihara, Kanagawa

Acquisition Price

12 billion yen

Site Area and Floor
Space

30,949.80m2／56,351.42m2

Floors

1 Basement Floor, 4 Floors Above Ground

Completion

August 1993

Title

Ownership■ Located along national highway 16, a lengthy central thoroughfare in the Tokyo metropolitan area, the large shopping center is also near Kobuchi Station on the
JR Yokohama Line, enjoying excellent access by road or rail. This commercial area has a population of some 620,000 within a 5km radius and about 1.86
million within a 10km radius. Many shopping centers, home centers and specialty stores are found along national highway 16, including the neighboring Jusco
Sagamihara Shopping Center.
■ This property has approximately 19,000m2 in sales space comprised of the directly operated Ito-Yokado and specialty shops, and provides parking for over
1,300 vehicles. The site also features a family restaurant and gardening specialty store.

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VI-6-8 Ito-Yokado Higashi-Narashino Store

Address

7-3-1 Higashi Narashino, Narashino, Chiba

Acquisition Price

8.9 billion yen

Site Area and Floor
Space

29,854.57m2／45,338.37m2

Floors

1 Basement Floor, 4 Floors Above Ground

Completion

October 1994

Title

Ownership■ Located approximately 30km east of central Tokyo, Higashi-Narashino is a typical suburban bed town neighboring Funabashi City (west),
Yachiyo City (north) and the Hanamigawa Ward of Chiba City (east).
■ Having a total sales floor area of about 17,000m2 comprised of the directly operated Ito-Yokado store and specialty shops, the property has asize typical for Ito-Yokado's suburban stores and serves the community market. The property has parking for over 1,100 vehicles, and boasts
sufficient competitiveness as a suburban store. Anchored by the Ito-Yokado store, the shopping center also secures such specialty stores as
UNIQLO, Daiso and Shinseido as a convenient lifestyle facility.

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VI-6-9 Musashiurawa Shopping Square (Newly Acquired Asset in the Second Fiscal Period)

Address

7-3-1, Bessho, Minami-ward, Saitamacity, Saitama

Acquisition Price

4.335 billion yen

Area of Land/Floor Space

8,317.99.㎡／28,930.36㎡

Structure/Floors

Steel structure with flat roof /1 basement floor, 4 floors above ground

Completion

October 2005

Type of Title

Co-ownership ("kyoyu") of trust beneficiaryinterests in real estate(Ratio of ownership is 50%)

■ This property has convenient access to various transportation networks. It is situated very close to Musashiurawa Station, the nearest station, andmay therefore potentially attract customers using the JR Saikyo Line and JR Musashino Line, as well as those traveling via National Highway No.
17.This commercial area has a population of approximately 290,000 within a 3km radius area and approximately 670,000 within a 5km radius.Over
the past five years, the population and the number of households have generally increased in the 5km radius, making it an attractive market as aretail property.
■ The major tenants of this property are Olympic located in basement and 1st floor and Nitori located on 2nd floor. The area of space for shops isapproximately 14,000 m2 and the capacity for parking spaces can accommodate more than 350 cars and 500 bicycles and motorcycles. Thesefeatures make this facility a competitive property as a station-front suburban type shopping mall.

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VI-6-10 Fukasawa-House tower H & I (Newly Acquired Asset in the Second Fiscal Period)

Address

2-1-2 Fukasawa, Setagaya Ward, Tokyo

Acquisition Price

10.6 billion yen

Site Area andFloor Space

39,840.90m2／12,135.36m2

Floors14 Floors Above Ground

Completion

June 2004

Title

Land: Co-ownership (1,584,269/10,000,000)
Building: Compartmentalized ownership■ The surrounding area has a luxurious and expansive streetscape and is one of the most prestigious housing areas in Tokyo. The property is
adjacent to Komazawa Park and the site itself has rich greenery providing an excellent residential environment.
■ Fukasawa-House is a large housing project that consists of 13 residential tower with 772 units and a retail building within an expansive site. All
residences house underground parking. The subject property is the rental housing buildings in the project and has 124 units ranging in size from
2-4 bedroom units with areas of some 75m2 to 120m2. It comes with excellent disaster facilities including an anti-earthquake structure andpotable water generation system for emergencies.

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VI-6-11 OAK PLAZA (Newly Acquired Asset in the Second Fiscal Period)

Address

2-10-6 Kanda Awajicho, Chiyoda-ward,
TokyoArea

Acquisition Price

2.59billion yen

Area of Land/Floor
Space

1,013.49㎡／6,121.85㎡

Structure/Floors

SRC structure with a flat roofFloors / 1
basement floor, 10 floors above ground

Completion

CompletionApril 1985
(Completion Date of the conversion
March 2007)

Type of Title

Ownership■ This property is highly accessible as it is only a 3 to 6 minute walk from six stations including the JR Ochanomizu Station, JR Akihabara Station,
Tokyo Metro Marunouchi Line Awajicho Station. It boasts a strong location near the prime office areas of Marunouchi and Otemachi with Tokyo
Station at their center and the Akihabara area and its IT base. etc.
■Since its completion in 1985, this property was used as a hotel named as Hotel New Kanda and now and has been converted to a multi-use
building that has, in addition to hotels spaces, offices (service offices and meeting rooms for rent), restaurants and retail shops.

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Ⅵ-7 Characteristics and Investment Strategies of Top REIT
Top REIT AssetManagement（”TRAM”)

Asset
Management

DNA

Development

Capital+Property
Management Personnel

Top REIT

OfficeRetailBrokerage

Diversified
Portfolio

Three Major
Asset Classes

Residence
Other AssetClassesi.e., hotels andwarehouses

AssetManagement

Pursuing both steady growth and quality through a
blue-chip portfolio of excellent properties and prudent
management measures firmly founded in real estateexpertise
Strategic application of commissioned reports from athink tank

2. Optimal Application of Sponsor Strengths
Ensuring steady growth through the pipeline andwarehousing functions of sponsors

Sponsors
The Sumitomo Trust & Banking

1. Skilled Management of a Diversified Portfolio

Applying unique sponsor strengths to secure growth inasset value

38%

Nippon Steel City Produce
A wholly-owned subsidiaryof Nippon Steel31%

Oji Real Estate
A wholly-owned subsidiaryof Oji Paper

31%

SupportSponsorStrengths

Inheriting Sponsors’ DNA■ Top REIT Asset Management (“TRAM”) was established in collaboration withthree firms – The Sumitomo Trust & Banking, Nippon Steel City Produce andOji Real Estate.
■ Excellent personnel have been dispatched to TRAM from the three sponsors
to ensure real estate investment expertise as well as inheritance of theircorporate groups’ assets, that is, a long-term strategic view and diversified
know-how acquired through each of the sponsor’s businesses.

Ensuring Steady
IncomeSteady Growth ofPortfolio

Maximizing Investor Value
Utilizing Sponsor Strengths■ Sponsor skills shall be utilized to achieve steady growth by applying theirreal estate development abilities, brokerage networks and management
skills, including leasing activities that utilize the leasing demand of oursponsor groups.
■ Number of group companies (As of March 31, 2007)
Sumitomo Trust Group42
Nippon Steel Group326
Oji Paper Group
305

Ⅶ-7
50

Contact

IR Contact
Hiroyuki HAYASHI, Katsuhiko FUJIMOTO Investor Relations
Top REIT Asset Management Co., Ltd. (Asset Manager)
Phone: +81-3-3243-2181
Fax:+81-3-3243-2182
E-mail： info-top@top-reit-am.co.jp
HP：
http://www.top-reit.co.jp/english/

The contents of this document, including summary notes, quotes, data and other information, are provided solely
for informational purposes and not intended to constitute an offer, solicitation and/or promotion of any specificproducts including investment units of Top REIT, Inc..
Forward looking statements in this document shall not be reviewed as a guaranty of Top REIT’s future
performance.
Although every attention has been paid to the contents of this document, the accuracy and appropriateness of
the information included in this document is not guaranteed and the contents can be revised and/or cancelled
without notice.
All rights regarding use of these materials belong to Top REIT. No copy or use of the content shown in thesematerials shall be permitted without a prior consent of Top REIT.

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