8955

31st Fiscal PeriodJAPAN PRIME REALTY INVESTMENT CORPORATION

Presentation Material
For the 31st Fiscal Period Ended June 2017
August 21, 2017

（Asset Manager）
Tokyo Realty Investment Management, Inc.

Table of Contents

1. Characteristics of JPR

2p

2. Operational Status and Growth Strategy

4p2-1. Summary of Financial Results

5p2-2. Internal Growth Strategy

7p2-3. External Growth Strategy

13p

2-4. Financial Strategy

15p

3. Financial Results and Operating Forecasts

16P

4. Appendix

27p（Asset Manager）Tokyo Realty Investment Management, Inc.
Financial Instruments Exchanger (investment management business)
Registration Number: No.362 (Kinsho) Head of Kanto Local Finance Bureau

1

JAPAN PRIME REALTY INVESTMENT CORPORATION

1. Characteristics of JPR

2

1. Characteristics of JPR

A J-REIT in 2002 and managing a combined portfolio with office properties and urban retailproperties as investment targets■Overview of JPR

Name

Japan Prime Realty Investment Corporation(abbreviated as JPR)

Securities code

8955

Listing dateJune 14, 2002 (14 years since listing)Operational
standard of
portfolio（Target investment
ratio）（Ratio by asset class）
Office 70～90% / Retail 10～30%（Ratio by area）
Tokyo 80～90% / Other cities 10～20%

Asset Manager

Tokyo Realty Investment Management Inc.
(abbreviated as TRIM)

Sponsors(shareholding
ratio)

Tokyo Tatemono (52%),
Yasuda Real Estate (18%)
Taisei Corporation (10%)
Sompo Japan Nipponkoa Insurance (10%)
Meiji Yasuda Life Insurance (10%)■Characteristics of JPR
track record of stable management for over 15
1 Ayears
Since listing, JPR has steadily expanded its asset size while enhancing the qualityof its portfolio.

2 A portfolio focused on office properties in Tokyo
JPR has established a portfolio that is focused on office properties in Tokyo,
which feature growth potential, with urban retail properties and office properties
in regional cities to complement profitability.

3 Superiority of a developer-sponsored REIT

JPR has exerted its superiority of a developer-sponsored REIT to acquire
properties having excellent location characteristics centering on large-scale
development projects.

internal growth through high occupancy
4 Continuous
rate and upward revision of rents
The average occupancy rate of the entire portfolio has stayed at 97% or higher
since the 26th fiscal period ended December 2014, and upward revision of rents
continued to surpass downward revision by value for 6 straight fiscal periods.

of a financial base that is stable over
5 Establishment
the long termWith a credit rating of AA- (Stable), JPR has established a financial base centeringon long-term, fixed-interest rate debts with a focus on stability.
1. The indicated figures are as of the date of this document. For Asset size, Investment ratios and (Planned) acquisition price and ratio of properties
from sponsor pipelines, the indicated figures are those after the Asset Replacement is completed.
2. Properties from sponsor pipelines refer to properties acquired from sponsors, etc. and properties acquired based on information provided bysponsors. Sponsors, etc. represent the five sponsor companies of JPR, their affiliated companies and special purpose companies (SPCs) in which thesponsors have made equity investment. Ratio of properties from sponsor pipelines refers to the ratio of (planned) acquisition price of properties
from sponsor pipelines over the total (planned) acquisition price of the entire portfolio.

Asset size
（After the asset replacement）

435.0 bn. yen
Ratio by asset（After the asset replacement）

84.5 %
Office 76.8 %Tokyo（Area）（Asset class）(planned) acquisition price and ratio
of properties from sponsor pipelines（After the asset replacement）

315.4 bn. yen・ 72.5 %Upward revision of rents

6 straight fiscal
periods（Dec. ’14 ～ Jun. ’17）

Credit rating
R&I

AA-

（stable）

3

JAPAN PRIME REALTY INVESTMENT CORPORATION

2. Operational Status and Growth Strategy

42-1. Summary of Financial Results

Cash Distribution from the 31st Fiscal Period Financial Results

Distribution per unit (DPU) came to 7,213 yen, hitting a record high since listing
Compared with forecast at beginning of period up 73 yen

Period-on-period up 165 yen（Over beginning-of-period forecast：7,140 yen）

DPU（compared with forecast

DPU（actual）

7,213
7,048

Historical high 7,122 yen （Jun. ’08 ）（yen/unit）

7,000

6,756
6,588
6,430

6,351
6,093

6,000

5,876

6,031

6,419

6,150
6,006

5,611

5,000

4,0000Jun. '11 Dec. '11 Jun. '12 Dec. '12 Jun. '13 Dec. '13 Jun. '14 Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 （period）

5

2-1. Summary of Financial Results

Business Environment Perception, results and outlook

With plans for the 31st fiscal period ended Jun. 2017 in steady progress, JPR continued toachieve stable growth while paying close attention to the impact of changes in the external
environment

Outlook

Results

Business
environment
perception

Placed emphasis on “continuation of contract renewals with upward revision of rents,” “external growth through strengthened
coordination with the main sponsor” and “enhancement of financial stability”
Internal Growth Strategy

External Growth Strategy

Financial Strategy• Needs to expand office space in the same building
and relocate for larger space remain strong, given
the strong employment conditions• Leasing of large-scale office properties scheduled forcompletion by 2018 in Central Tokyo appears to be
progressing steadily• With vacancy rates on a downward trend
nationwide, rents are also showing an upward trend• Real estate prices in Central Tokyo have mostly
reached the upper limit• Properties in regional cities are also hard toacquire at appropriate prices, with their cap rates
dropping further• The asset management company became aconsolidated subsidiary of the main sponsor (Tokyo
Tatemono) at the end of 2016

• The Bank of Japan (BOJ) continues its monetaryeasing measures amid global trends ofreconsidering monetary easing• Long-term yields remain stable under the yield
curve control measures by the BOJ• Signs of recovery area observed in demand forinvestment corporation bonds.
• Caution must be taken as to the future course ofmonetary policy and yield trends

Progress was made in internal growth mostly
as planned.

Conducted acquisition of a high-classbuilding in Central Tokyo along with asset
replacement by utilizing sponsor pipelines

Conducted public offering in January 2017
• Total number of units
50,000 units• Total purchase price
21,257 million yen• LTV
43.7% → 40.7%
Further flattened repayment amount of each fiscal
period over the long term and reduced debt costs• Average debt cost
1.10% → 1.03%• Occupancy rate based on concluded contracts
98.3%→ 98.5％• Upward revision upon contract renewal (monthly
rent, net)
+8.7 million yen• Raising of rents upon tenant replacement (monthly
rent, net)
+3.4 million yen• The impact of mass supply in Central Tokyo in2018 and thereafter is assumed to be limited,considering the situations of tenant diversification,
rent levels and the gap in rents, etc.
• Contract renewal with upward revision of rents is
assumed to proceed steadily, although focus will bemade on leasing up tenant cancelations at somebuildings as soon as possible• Acquisition）
Tokyo Square Garden• Sale）
Fukuoka Bldg.
JPR Hakata-chou Bldg.

18.4 billion yen
3.1 billion yen
1.9 billion yen• Continue vigorously selective investments in officeproperties in Tokyo and urban retail properties, witha focus on their location and quality.
• Work to reinforce coordination with the sponsor
and focus on acquisitions utilizing it pipelines• Debt procurement capacity（Maximum LTV of 45％） approx. 35.1 billion yen（Maximum LTV of 50％） approx. 83.2 billion yen• Focus on refinances with an emphasis on flatteningof repayment amount of each fiscal period andlengthening the maturity of debts• Find new debt financing providers to expand thescope of available lenders• Enhance refinance risk tolerance by expanding
liquidity on hand and other measures, in
preparation for future changes in the financial
environment6

2-2. Internal Growth Strategy

Occupancy Status

Occupancy rate remains stable at a high level due to strong demand for office spaces■ Occupancy Rate

■ Move-Ins/Move-Outs and Average of Downtime• Occupancy rate based on concluded contracts remained at the 98% leveland occupancy rate based on generated rents stayed at the 97% level.
• By asset class, occupancy rate remain at the 97% level for office properties
and at 100% for retail properties
（%）

100
98

Occupancy rate based on concluded cntracts
Occupancy rate based on generated rents
98.5
98.3
97.8
97.5
97.4
97.2
97.3

96
95.7

Move-out（period）

Jun. '17

98.2

98.2

97.9
97.0

（period）+3,063-980㎡

MS Shibaura Bldg.

+980㎡-2,123㎡

JPR Sendagaya Bldg.

+817㎡

Major Move-out

Beneton Shinsaibashi Bldg.

Dec. ’17 Kawaguchi Center Bldg.

92（forecast） JPR Naha Bldg.

Jun. ’18 Olinas Tower
Yakuin Business GardenTokyo Tatemono Yokohama（forecast）
Bldg.

90
880

-3,648Major Move-in

Jun. ’17 MS Shibaura Bldg.
Tokyo Tatemono Honmachi
Bldg.

-1,531㎡-626㎡-549㎡-3,850㎡-2,909㎡（forecast）（forecast）

Dec. ‘14 Jun. ‘15 Dec. ‘15 Jun. ‘16 Dec. ‘16 Jun. ‘17 Dec. ‘17 Jun. ‘18
95.9
96.2
96.1
96.8
97.5
97.8
97.6
97.4
99.6
99.8
100.0
99.9
100.0 100.0
99.7
100.0

（forecast）（forecast）
1. Occupancy rate based on concluded contracts, occupancy rate based on generated rents and occupancy rate based on concluded contracts byasset class represent period-average figures.
2. The figures for the occupancy rate based on concluded contracts and the occupancy rate based on generated rents for the 32nd fiscal period are
estimates that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period. The respective figures for the
33rd fiscal period are estimates based on assumptions by JPR regarding move-ins and move-outs becoming effective in the fiscal period.

+784㎡+1,168㎡（Average rent-free period）（month）（month）

129（Occupancy rate based on concluded contracts by asset class / %）OfficeRetail

Shinyokohama 2nd Center
bldg.
JPR Dojima Bldg.

-1,060㎡（Average downtime）
Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18（period）（㎡）+7,605

Dec. '17

95.2

Move-in-10,367（forecast）

96.5
95.8

94

97.6

• Approx. 60% of the vacancies that arose at JPR properties in the 31st fiscal
period have already been either occupied or are under new lease contracts（Move-In/Move-Out Space ・ Major Move-in and Move-out）

6
6
3

7.9
0

3.8

4.3

Jun. '16 Dec. '16 Jun. '17 Dec. '17（forecast）

0（period）

2.4

1.9

1.8

Jun. '16 Dec. '16 Jun. '17 Dec. '17 （period）（forecast）

1. Average vacancy period refers to the average period of vacancy between the move-in dates stipulated in the new lease contracts
becoming effective in each fiscal period and the move-out days of the previous tenants for the same leased spaces.
2. Average rent-free period refers to the average of the rent-free periods agreed upon in new lease contracts becoming effective ineach fiscal period.

7

2-2. Internal Growth Strategy

Status of Rent (1)With upward revision of rents and raising of rents upon tenant replacement remaining at highlevels, office rents continued to increase■ Rent Revisions■ Example of value enhancement initiatives （JPR Dojima Bldg.）

Jun. ‘17+14.6 million yen

Rate of upward revision

36.7%+10.8%

Shifting tenant composition in accordance with location characteristics• Changed the operation system (including change in building service hours)
to assume invitation of shop-type tenants, shifting from the conventional
style of mainly inviting office-type tenants, and conducted renovations(common areas, exclusive areas, security and LED lamps)• Took measures to increase earnings, such as effectively using signboards
and other assets for advertisement（compared with the number of contract renewal） （compared with rent including common charges）(million yen)

+20

Upward revision

29.8
+10
+0

Downward revision

25.6

34.0

+15.3
-4.7

+6.0
-0.9

Jun. '15

Dec. '15

Ratio of cntracts with upward revision (right axis)
Upward revision
undernegotiation: 3.2
million yen

32.7

+10.4

+10.9

36.7

+14.6

-0.4

-2.8

-5.8

Jun. '16

Dec. '16

Jun. '17

25

+8.8
-3.5

-10

(%)

50

Successfully invited shop-type tenants
0(25)
Dec. '17 （period）

Floor

Before tenant
replacement

After tenant
replacement

9

Office-type

Office-type

Shop-type

Shop-type

Office-type

Shop-type

Shop-type

Shop-type

Shop-type

Shop-type

Office-type

Office-type5

Office-type

Office-type4

Office-type

Office-type50

3

Office-type

Shop-type02

Office-type

Shop-type1

Shop-type

Shop-type（forecast）
1. Revised amount of monthly rent indicates the sum total (including common charges) of monthly rent after revision minus monthly rent before
revision upon contract renewal with rent revision in each fiscal period. For the revised amount of monthly rent for the 32nd fiscal period, theamount of increase is an estimate based on consents regarding rents becoming effective in the fiscal period, and the amount of decrease is an
estimate assumed for the rents becoming effective in the fiscal period.

■ Rent upon Tenant Replacement (increase/decrease of rent through tenant replacement)
Increase in monthly rent upon tenant
replacement

Jun. ‘17(million yen)

+10

+0

+4.7 million yen
Upward revision

7

71.0%

+16.9%(compared with the number of tenant replacement)(compared with rent including common charges)

6

70.6
36.0

+0.5

+1.7

-6.3

-6.1

(%)
Ratio of tenant replacement with increased rent (right axis)
Upward revision
expected: 2.7
million yen

81.8

+4.6

+5.2

-0.9

-0.3

100

71.0

+4.7

-1.3

-10

+2.0
-0.2

Dec. '15

Jun. '16

Dec. '16

Jun. '17

Significantly contributed to internal growth• Full occupancy achieved in August 2017
• Earnings improved sharply, with appraisal
value also rising(%)

Monthly occupancy rate

100
80
60
40

Before implementing
measures

After implementing
measures＋13.0%＋20.9%＋23.6%

Monthly rent

NOI

Appraisal value

(50)
(100)

Jun. '15

8

Rate of increase inrent upon tenant replacement

Ratio of tenant replacementwith increased rent

Downward revision

33.3• The ratio of shop-type tenants inoffice sections (by area) increased
after tenant replacement

Jun. ’16
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
Jan. ’17
Feb.
Mar.
Apr.
May.
Jun.
Jul.2
Aug.3

Upward revision amount of monthly rent

Ratio of contracts withupward revisionDec. '17 （period）（forecast）
1. Change amount in monthly rent upon tenant replacement indicates the sum total (including common charges) of monthly rent after tenant
replacement minus monthly rent before tenant replacement in each fiscal period. The change amount of monthly rent upon tenant replacement
for the 32nd fiscal period is an estimate based on consents regarding move-ins/move-outs and rents becoming effective in the fiscal period.

Office-type 75%
Shop-type 25%

42%
58%

1. NOI indicates a comparison on the assumption of leased spaces fully occupied and advertisement facilities fully placed withadvertisement .

8

2-2. Internal Growth Strategy

Status of Rent (2)Continuously raise average rent by strategically utilizing target rent
Continue endeavors on upward revision of rents for lease contracts with ongoing rents that are lower than thetarget rents■ Status of Rent Levels by Fiscal Period with Contract Renewal (office properties)■ Target Rents and Average Rents• Although the ongoing rents of office properties JPR owns are at higher levels thanmarket rent (nearly equal to the base rent), JPR will conduct upward revision for
ongoing rents that are lower than the target rent.
• Because many of the ongoing rents of lease contracts to be revised in the future arelower than the target rent, JPR intends to negotiate upward revision upon contract
renewal.

（Target Rents）• JPR sets target rents, primarily for office properties, in order. to raise rent
18,000Target rent

Base rent

Average rent (existing office)（Percentages show period-on-period comparison of target rents）+2.6%

17,000+1.5%

16,000+1.9%（million yen）

+30

+1.5%
Average rent (for officeproperties) surpasses base rent
(nearly equal to market rent).

15,000

+1.0%

+1.0%

Target rent for Dec.
‘17: +8.5% overbasement

0
14,000Jun. '15

Dec. '15

Jun. '16

Dec. '16

Jun. '17

Average rent（existing properties）(Percentages show period-on-period comparison of average rents for existing properties)

Average rent of theportfolio rose due toacquisition of properties inCentral Tokyo

15,00014,600
+0.3%

+0.2%

+0.4%

0
14,200Jun. '15

Dec. '15

Jun. '16

+0.6%

+0.3%

Gap in actual rents+10（Dec. 2017 ～ Jun. 2019）

▲4.7%

-10

Intends to negotiate
upward revision for
ongoing rents lower
than the target rent

-20
-30
-40

+0.7%
Assumed average rent ofexisting properties at fulloccupancy

Dec. '16+20（forecast）

Lower than target rent

15,400

Average rent（portfolio）

Lower than base rent
Higher than base rent and lower than target rent
Higher than target rent （except for new contract）
Higher than target rent （new contract, etc.）+0Dec. '17 （period）（Average Rents）（yen/tsubo）

Higher than target
rent（yen/tsubo）

Jun. '17

Dec. '17（end of period）

Dec. '17（forecast）
1. Base rent refers to the rent level (the lowest limit) JPR sets for each fiscal period as the base for inviting new tenants and revising rents forexisting tenants, primarily for office properties, and are set at roughly the same level as market rent. Target rent is the rent level JPR sets foreach fiscal period in order to raise rents. Target rent is used as a guideline in conducting negotiations on rents, and JPR makes it a policy to set
the base rate as the lowest limit (target rent ≧ base rent).
2. Existing properties represent the properties JPR has continuously owned since the 26th fiscal period (Dec. 2014)

Jun. '18

Dec. '18

Jun. '19 （period）

1. Status of Rent Levels by Fiscal Period with Contract Renewal (office properties) indicates the compilation of the difference of monthly amount,obtained by subtracting the target rent from the ongoing rent for contracts to be renewed in the 32nd fiscal period ending Dec. 2017 through the35th fiscal period ending Jun. 2019, for office properties JPR owns. The compilation is classified as “higher than target rent (new contract)” forongoing rents in new contracts in the last three years higher than the target rent; “higher than target rent (excluding new contract) for ongoingrents excluding said newt contracts higher than the target rent, “lower than target rent and higher than base rate” for ongoing rents lower than
the target rent but higher than the base rate, and “lower than target rent” for ongoing rents lower than the target rent.
2. Gap in actual rents refers to the ratio obtained by dividing the difference of monthly amount (or, of the difference of monthly amount after
deducting the target rent from the ongoing rent for contracts to be renewed in the 32nd fiscal period ending Dec. 2017 through the 35th fiscal
period ending Jun. 2019, the difference of monthly amount after deducting the rents higher than the target rent (excluding new contract rents)from the sum total of rents that are lower than the base rent and rents that are lower than the target rent but higher than the base rent) by themonthly rent that serves as the calculation base.

9

2-2. Internal Growth Strategy

Impact of Mass Supply

The impact of mass supply of large-scale buildings in central Tokyo is limited as the ratio of office properties and large tenants
at high rent levels is low■ Ratio of JPR Properties by Rent Level(Ratio of JPR office properties by rent level(Central Tokyo and Greater Tokyo))
30
Less than 15 thousand
yen orthousandyen
more（Ratio of tenants occupying floor space of 300 tsubos or more）
Center Tokyo office

With a low ratio of owned properties at high 300 tsubo or more・30
rent levels, few properties compete against thousand yen or more
2.6%
large-scale office properties• Of the office properties in Central Tokyo and Greater
Tokyo, 12.7% of the properties have an average rent
per tsubo of at least 30,000 yen (comparison ofmonthly rent).
25 to less than 30• Of which, the ratio is 4.8% for existing properties
thousand yen
excluding Tokyo Square Garden.
19.7%

12.2% 12.7%

15 to less than
20 thousand yen

42.0%

20 to less than
25 thousand yen

13.5%

1. Ratio of JPR office properties by rent level (Central Tokyo and Greater
Tokyo) refers to the ratio of monthly rent, by average unit rent perproperty, against the total monthly rent of office properties JPR owns
in Central Tokyo and Greater Tokyo as of June 30, 2017.

With a low share of large tenants at high rent levels,
Center Tokyo office
300 tubo or more・
the impact of move-outs by large tenants is limited
less than 30
thousand yen• The ratio of tenants occupying floor space of 300 tsubos or more
13.1%
at office properties in Central Tokyo is 15.7%.
Greater Tokyo• Of which, the ratio of tenants with an average unit rent of 30,000
officeyen or more is 2.6%.
300 tsubo or more
• Of which, the ratio for existing properties excluding Tokyo Square
12.4%
Garden is 1.5%.

Other
71.9%

1. Ratio of JPR properties with occupied floor space of 300 tsubos or more per tenantrefers to the ratio of each leased floor space in the “sum total of leased floor with leased
floor space of 300 tsubos or more and with rent of 30,000 yen or more per tsubo at JPR
office properties in Central Tokyo,” “sum total of leased floor with leased floor space of
300 tsubos or more and with rent of less than 30,000 yen per tsubo in the same category
as above,” “sum total of leased floor with leased floor space of 300 tsubos or more at
JPR office properties in Greater Tokyo” and “Others” against the total leased floor spaceof properties JPR owns as of Jun. 30, 2017.

■ Ratio of JPR Properties by Size and by Area
The number of JPR’s competing properties in Chiyoda and Minato Wards, on which mass supply will be focused, is small
The area and percentage figures in the table represent the values based on the floor space for lease, with the figure in parenthesis indicating the number of properties.

Tokyo’s five
central wards
48,602㎡ (4)Very large
15.6%
31,948㎡ (4)
Large
10.3%
Medium- 46,452㎡ (14)
size
14.9%
127,003㎡
Total
(22)
40.8%
Size

Amount of very large office supply（Tokyo’s five central wards,2017-2021）

Chiyoda Ward

3,325㎡
1.1%
13,308㎡
4.3%
16,633㎡
5.3%

(1)
(4)
(5)

abt. 1130
thousand ㎡

Chuo Ward

Minato Ward

5,985㎡
1.9%(1)14,468㎡
4.7%

7,994㎡
2.6%
17,096㎡
5.5%
31,076㎡
10.0%(1)5,401㎡
1.7%
5,106㎡
1.6%
24,976㎡
8.0%

(6)
(8)

abt. 410
thousand ㎡

Shinjuku Ward

Greater Tokyo(1)

28,148㎡
9.1%

(2)

(1)

15,227㎡
4.9%(1)49,033㎡ (4)15.8%
28,114㎡ (4)9.1%
36,729㎡ (6)11.8%
114,183㎡
(14)
36.7%

(2)
(4)

abt. 980
thousand ㎡

Shibuya Ward

10,941㎡
3.5%
10,941㎡
3.5%

(2)
(2)

abt. 550
thousand ㎡

43,376㎡
14.0%(3)

Other cities

43,333㎡
13.9%
26,410㎡
8.5%
69,743㎡
22.4%

Entire portfolio

97,636㎡ (8)31.4%(5) 103,701㎡ (13)33.4%
(6) 109,592㎡ (26)35.2%
310,930㎡(11)(47)
100.0%

abt. 170
thousand ㎡

1. Buildings are classified as “medium-sized,” “large” and “very large” in accordance with the total floor space of “3,000m 2 to less than 10,000m2,” “10,000m2 to less than 30,000m2“ and “30,000m2 or more,” respectively.
2. Land with leasehold interest, such as The Otemachi Tower, is excluded from the calculation.
3. New supply in 2017 and thereafter by floor space is estimated based on the surveys conducted by TRIM.

102-2. Internal Growth Strategy

Retail Portfolio (1)JPR’s retail properties are situated in prime locations or in areas close tostations and with high commercial potential
The 14 properties comprising the retail portfolio are all located within a 5-minute walk from thenearest station
Portfolio breakdown

Type

Urban type

Station-front type

Characteristics

Urban retail properties situated on prime locations in Tokyo and Osaka
6物件

Retail properties located in front of stations near Tokyo and in major regional cities

NOI yield

4.1%

6.2%

8 properties / 54.76 billion yen （asset size）

GINZA GATESJPR Jingumae 432

JPR
Chayamachi
Bldg.

JPR Shibuya
Tower Records Bldg.

Shinjuku
Sanchome
East Bldg.

FUNDES
Suidobashi

Yurakucho
Ekimae Bldg.
( Yurakucho Itocia)

JPR Umeda Loft Bldg.

6 properties / 46.18 billion yen （asset size）

Urban type8 properties

57%

Retail14 properties

Stationfront type6 properties

Tanashi ASTA

Kawasaki Dice Bldg.

JPR
Musashikosugi
Bldg.

Musashiurawa Shopping
SquareCupo-la Main Bldg.

Housing Design
Center Kobe

43%

11

2-2. Internal Growth Strategy

Retail Portfolio (2)■ Commercial Potential of Station-Front Type properties
Musashiurawa Shopping Square

Kawasaki Dice Bldg.

Acquisition price and date

4,335 million yen / Mar. 2007

Acquisition price and date

15,080 million yen / Apr. 2007

Nearest station

3-minute walk from Musashi Urawa Stationon the JR Lines

Nearest station

1-minute walk from Keikyu Kawasaki Station on the
Keikyu Main Lines

Total floor space (entire building)

28,930 ㎡

Total floor space (entire building)

36,902 ㎡

Building ownership ratio

50.0%

Building ownership ratio

46.6 %・ An area of high growth potential due to continuous condominium development, with anincreasing number of passengers getting on and off trains
・ A highly competitive property that can serve customers visiting by train or by car, as it is locatedbetween the station and National Highway Route 17（10 thousand)

5.6■ Example of Sales Status and Measures of Station-Front Properties

Average number of passengers getting on and off
trains per day by fiscal year

・Successfully increased the property-wide sales, number of customers paying at cash registers and rent
revenue by conducting renovations, holding various events and implementing sales promotion measures,
etc.
・Income from holding events almost tripled in the Jul. 2014 and thereafter compared to the results for Jul.
2012 through Jun. 2013
・Continuing to operate at full occupancy since May 2015
・Plans to implement environmentally-friendly renovations in November 2018, timed to the property’s 15th
anniversary

4.8
（pt）

120

Property-wide sales
Number of customers

賃料等収入
Rent revenue, etc.

4.0

Continuing to operate at full occupancy

'11

'12

'13

'14

'15

'16

110

Cupo-la Main Bldg.
Acquisition price and date

2,100 million yen / Mar. 2006

Nearest station

1-minute walk from Kawaguchi Station on
the JR Lines

Total floor space (entire building)

48,321 ㎡

Building ownership ratio

16.7%

・ A property boasting the ability to attract customers, being among the highest in the area, as it is directly
connected to Kawaguchi Station with a pedestrian deck・ Features location advantages in attracting customers, with such public facilities as the city’s Central Library and
Administration Center housed in the property（10 thousand）

8.4

Average number of passengers getting on and off
trains per day by fiscal year

100
90
Jul. ’12-Jun. '13 Jul. ’13-Jun. ’14 Jul. ’14-Jun. ’15 Jul. ’15-Jun. ’16 Jul. ’16-Jun. ’17

Renovations (1) Nov. 2013
Conducted renovations with total construction costs ofapprox. 160 million yen centering on the external façade,entrance and common area environment on the 1st
through 3rd floors, upon celebrating the 10th anniversary
since opening

Renovations (2) Nov. 2015
Conducted environmentally-friendly renovations forthe restaurant floor on the 6th floor, with the intention
to improve eatery sales

7.8
7.2
'11

'12

'13

'14

'15

'16

1. “Average number of passengers getting on and off trains per day by fiscal year” has been prepared by TRIM based on the figures
publicized by the railway company.

1. “Property-wide sales”, ” rent-revenue, etc.” and the “number of customers paying at cash registers” indicate the changes in index, withthe figures for fiscal Jul. 2012- Jun. 2013 set at 100.

12

2-3. External Growth Strategy

Utilization of Sponsor Pipelines

Take advantage of the sponsor pipelines, such as preferential negotiation rights, and opportunities
of asset replacement■ Utilized the Preferential Negotiation Rights Held by the Main Sponsor■ Continue External Growth by Utilizing Asset Replacement（Investment target）（Asset replacement policy）• Aim to build a strong and solid portfolio by systematically promoting asset
replacement.

TargetInvestment Strategy

Office properties in Tokyo that haveexcellent location characteristics and allow
expectations for stable competitiveness
Urban retail properties that secure afterdepreciation yield• Utilized the preferential negotiation rights held by
the main sponsor to acquire co-ownership interest ofTokyo Square Garden• Utilize the sponsor pipelines, such as preferential
negotiation rights held by JPR and the sponsors, toinvestigate acquisitions through negotiated deals.
• When selling properties to the sponsors for redevelopment, investigate asset replacement thatshould contribute to enhancement of the portfolio.

• Relatively low priority of investigation is given
to these properties, as their prices are often
reported to be higher than the assumed fairvalue.

Office properties in regional cities thatwould bring expected returns with risk
premiums considered

Acquisition from Other Right Holders by Utilizing Preferential Negotiation Rights（Case for acquisition of Tokyo Square Garden）
Tokyo Square Garden

Portion to be acquired by JPR and sponsor’s
ownership ratio

Portionowned byother rightholders
45.67%

Portion to beacquired by Tokyo
Tatemono
46.11%JPR• Enhance the quality of the portfolio
and profitability through asset
replacement.

Sponsors

Planned sale

• Sponsors who are developers haveneeds to acquire properties to be redeveloped.

• When properties are sold to thesponsor, discussion on acquisition
after the properties are redevelopedby the sponsors is possible throughpreferential negotiations.

Assetreplacement• The main sponsors support expansionof JPR as part of their strategy toreinforce the comprehensive
strengths of the groups and enhancetheir business portfolio.

• Conduct vigorously selective
investment at assumed fair value.

Acquiring blue-chipproperties• Further reinforcement of the sponsor
commitment to JPR’s growth strategy.

(Replaced properties[acquired in 30th (Dec. 2016)])(Replaced properties[sold in 31st period (Jun. 2017)])FUNDES
Suidobashi

Fukuoka Bldg.

GINZA GATESJPR Hakata-chuo
Bldg.

8.22%

Portion to be acquired by JPR（Portion owned by other right holders）

13

2-3. External Growth Strategy

Urban Development by the Main Sponsor

Urban development business of the main sponsor
 Examples of development projects by Tokyo Tatemono Co., Ltd.
Large-scale redevelopment projects
The Otemachi Tower

Shinjuku Center Bldg.

Owned by JPR
Olinas Tower

Owned by JPR(land with leasehold interest)

Owned by JPR

Yakuin Business Garden

Properties name

Bn. yen1

The Otemachi Tower（land leasehold interest）

36.0

2

Olinas Tower

31.3

3

Shinjuku Center Bldg.

21.0

4

TokyoSquareTower

18.4

5

Kanematsu Bldg.

16.2

Owned by JPR
Kawasaki Dice Bldg.

Break down acquisition priceby acquisition pipeline

Properties acquired
using sponsor pipeline

72.5%

Properties acquired
other than fromsponsors
119.6 bn. yen

27.5%
Properties acquired
based oninformation provided
by sponsors
98.1 bn. yen

Properties
acquisition fromsponsors
217.3 bn. yen

49.9%

22.6%

Owned by JPR

FUNDES Series（Urban compact retail properties）

Hotels specialized in overnight stays

・FUNDES Suidobashi （opened in Aug. ‘15）

・Roppongi （149 guestrooms/ planned to open in Oct. ‘17）
・Ginza （approx. 200 guestrooms/ completion : 2018 (planned)）
・Asakusa （125 guestrooms/ planned to complete in ‘18）
・Midosuji （309 guestrooms/ completion: 2019 (planned)）
・Kyoto （detail to be determined）

Owned by JPR

・FUNDES Jinbocho （opened in Nov. ‘16）
・FUNDES Ueno （opened in Jul. ‘17）・Tenjin（planned completion in ‘18）
・Ginza（planned completion in ‘19）
・Gotanda（details to be determined）

JPR’s top 5 properties were either
acquired through sponsor pipelines
or developed by the main sponsor

FUNDES Ueno

Candeo Hotels Tokyo Roppongi

1. For the properties shown in this slide other than those that are already owned by JPR, no specific negotiations for acquisition are underway with Tokyo Tatemono and JPR has no plans to acquire any of them at present.

Roppongi 6 chome project14

2-4. Financial Strategy

Fund Procurement Status and Outlook

Flatten repayment amount for each fiscal period and reduce debt costs■ Flattening of Repayment Amount for Each Fiscal Period over the Long
Term and Debt Cost Reductions■ Financial Indicators and Credit Rating Status• Reduced average debt cost while extending the average maturity under the
procurement policy focused on stability through borrowing long-term, fixedinterest rate debt
• LTV lowered by 3 percentage points due to public offering in January 2017,
expanding debt procurement capacity
Dec. 2016

Jun. 2017

ChangeNew debt

18.0 bn. yen

19.0 bn. yen+1.0 bn. yen

Average maturity （change）

7.4 years

4.4 years-3.0 years（+2.8 years）（-0.6 years）• Flatten repayment amount for each fiscal period at around 10 billion yen as a target in 34th fiscal period
ending Dec. 2018 and thereafter⇒Secure refinance risks by setting a commitment line with a credit limit that surpasses the annual
repayment amount• For the 31st fiscal period ended Jun. 2017, flattened repayment amount for each fiscal period andreduced debt costs as planned• For the 32nd fiscal period ending Dec. 2017, place emphasis on flattening repayment amounts for eachfiscal period over the long term, and also aim to reduce debt costs
Long-term loans pauable
Investment corporation bonds（100 mn. yen）
新規借入（’17.6期）
新規借入（'17.12期）
New debt (the 32nd FP)
New debt (the 31st FP)
300

0.52 %（-0.52 %）0.37 % （-0.87 %）-0.15 %

Commitment line 2.4 billion yen(Status of Borrowings by Fiscal Period)

Average borrowing interest
rate （change）

200(Status of entire interest-bearing debts)
Total interest-bearing debts
Average maturity
Average debt cost
Ratio of long-term, fixed interest
rate debts

188.9 bn. yen

181.3 bn. yen-7.6 bn. yen

4.2 years

4.3 years+0.1 years

1.10%
96.3%

1.03%
100%

-0.07%

43.7%

40.7%

-3.0%

Acquisition capacity(maximum LTV of 50%)

54.3 bn. yen

83.2 bn. yen+28.9 bn. yen

Acquisition capacity(maximum LTV of 45%)

10. 1 bn. yen

35.1 bn. yen+25.0 bn. yen

5
4
3

100
100

Average maturity

Average debt cost

50

40

50
195

20

40

130
83

0

LTV(based on total assets)（Dec. ’17 forecast）

50

+3.7%

（LTV）

（year）（Jun. ’17 actual）

81

91

80

30

50
110

60

100
48

80

25

85

20
20

50

80

70

70

90
50

19

20

40

Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun.
（period）'17 '17 '18 '18 '19 '19 '20 '20 '21 '21 '22 '22 '23 '23 '24 '24 '25 '25 '26 '26 '27（year）
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0

(Average debt cost by repayment date for the 32nd fiscal period ending Dec. 2017 and thereafter)• The average interest rate on borrowings for the last three fiscal periods was lower than the
average cost of debt that will mature in the future
Average debt cost to be repaid by fiscal period

1.80%

（%）

2.0
1.0
0.0

Jun. '13 Dec. '13 Jun. '14 Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 （period）

1. New debts, average maturity (change from before refinancing) and average borrowing interest (change from before refinancing) havebeen calculated by excluding short-term loans payable. Furthermore, JPR made early repayment of 7.0 billion yen in short-term loans,which JPR newly borrowed in the 30th fiscal period, on January 24, 2017.

1.02%

1.07%

0.97%

Dec. '17

Jun. '18

Dec. '18

1.04%

0.50%
The average interest rate on borrowings
直近3期平均for the last
three fiscal periods

Jun. '19

Dec. '19 （period）

1. The cost indicates the actual interest rate applied to the latest borrowings as a reference figure, and does not mean that it will be applied to futureborrowings.
2. “Average interest rate on borrowings for the last three fiscal periods” indicates the average interest rate on new debt (excluding short-term loans
payable) borrowed in the 30th fiscal period ended Dec. 2016 through the 31st fiscal period ended Jun. 2017.

15

JAPAN PRIME REALTY INVESTMENT CORPORATION

3. Financial Results and Forecasts of Financial Results

16

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 31st Fiscal Period (period-on-period comparison)

Results of the 31st fiscal period ended of June 2017
DPU:7,213 yen (up165 yen, or up 2.3%, period-on-period)
JPR issued new investment units through public offering in January 2017, but will keep stable growth of distribution per unit
JPR internally reserved the gain on sale of real estate regarding in order to secure stable management and distributions in the future
Item

30th Period

31st Period

Operating revenue(Dec.31, 2016)
15,105(Jun. 30, 2017)15,118（Of whichi, gain on sale of properties）

Operating expenses
Revenue andprofit(million yen)

Rserve (million yen)

DPU (yen)

Operatingindicators(million yen)

（Of whichi, loss on sale of properties）

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income
Transferred from reserve(per unit)NOI
NOI yield (book value)
Rental income - real estate
After-depreciation yield (book value)

Depreciation
Capital expenditures
Repairs and maintenance
Average occupancy rate
Period-end occupancy rate

Number of units outstanding (units)

Change(JPY mn)
Major Factors of Period-on-Period Changes*
Impacts
onnet
incomeindicatedby
Net income+714
plus and minus

+12

(0)

(210)

(+210)

7,944

7,370

-574

(300)

-

(-300)

7,161
7
1,015
6,153
6,152
0
7,048
10,090
5.1%
8,206
4.2%
1,884
724
586
98.3%
98.6%

7,747
96
976
6,868
6,867
210
7,213
10,216
5.0%
8,308
4.1%
1,907
563
246
98.5%
98.0%

+586
+88
-38
+714
+714
+209
+165
+125
-0.1%pt+101-0.1%pt
+23
-161
-340
+0.2%pt-0.6%pt

873,000

923,000+50,000

Rental income+101

Increase in rent revenue (existing properties)+78

Contribution in rent revenue (properties acquired in 30th and31st period+459

Lack of rent revenue (properties sold in 30th and 31st period)-78

Decrease in cancellation penalty, etc. and income equivalent
to expense for restoration to original condition-581

Decrease in incidental income
Increase in other income-84

Decrease in utilities expense+23(Reference) Deterioration in the balance of utilities expenses(incidental income-utilities expense)-61

Decrease in repairs and maintenance utilities expenses+340

Increase in other expense
Gain or loss on sale+510
of properties

+8

-64

(Lack of loss on sale of properties in 30th period and gain on sale ofproperties in 31st period)

Nonoperating+127
incomeAppropriation of settlement on management associationaccounts (the item is recorded primarily in fiscal periods
ending June each year)
Decrease in interest expense on loans and investment
corporation bond
Other change in non-operating income and extraordinary
income or loss

+85
+44
-2

1. With regard to the gain on sale of real estate for the 31st fiscal period, JPR recorded 210 million yen as reserve for reduction entry, applying the Special Measures in Case
Land or Other Property is Acquired in Advance in 2009 or 2010 (Article 66-2 of the Act on Special Measures Concerning Taxation).

173. Financial Results and Operating
Forecasts

Overview of Financial Results for the 31st Fiscal Period (compared with forecasts)

Results of the 31st fiscal period ended June 2017
DPU compared with the forecast at beginning of period: up 73 yen (up 1.0%)
Achieved a period-on-period increase in operating revenue due to continuous growth of rent revenue and recording of nonoperating income

Revenue andprofit(million yen)

Rserve (million yen)

DPU (yen)

Operatingindicators(million yen)Item

31st Period

31st Period

ChangeOperating revenue(Forecast)
15,106(Result)
15,118+11(Of which, gain on sale of properties)

(209)

(210)

(+0)

Operating expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income
Transferred from reserve(per unit)NOI
NOI yield (book value)
Rental income - real estate

7,366
7,740
39
978
6,801
6,800
209
7,140
10,224
5.0%
8,310
4.1%
1,913
841
241
98.1%
97.2%

7,370
7,747
96
976
6,868
6,867
210
7,213
10,216
5.0%
8,308
4.1%
1,907
563
246
98.5%
98.0%

+4
+7
+56
-2
+66
+66
+0
+73
-8
- %pt
-2
+0.0%pt-6-278+4+0.4%pt+0.8%pt

923,000

923,000-

After-depreciation yield (book value)

Depreciation
Capital expenditures
Repairs and maintenance
Average occupancy rate
Period-end occupancy rate

Number of units outstanding (units)(JPY mn)
Major Factors of Changes from Forecasts*
Impacts
onnet
incomeindicated by
Net income+66
plus and minus
Rental income-2

Increase in rent revenue+28

Increase in cancellation penalty, etc. and income equivalent
to expense for restoration to original condition+18

Decrease in incidental income
Increase in other income
Increase in utilities expense

-42
+5
-8
-50
-4
+0

(Reference) Deterioration in the balance of utilities(incidental income - utilities expense)
Increase in repairs and maintenance utilities expenses

Decrease in other expense
Nonoperating+59
incomeIncrease in settlement on management associationaccounts
Decrease in interest expense on loans and investment
corporation bond
Other change in non-operating and extraordinary income orloss

1. Forecasts of financial results for the 31st fiscal period ended June 2017 are the figures announced on February 14, 2016, based on the following assumptions.
Investment properties owned: Total 62 properties (assuming a property added by acquisition and two properties reduced by transfer from the properties owned at end of the 31st period),
average occupancy rate: 98.1%(an estimate that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period)
LTV (based on total assets): 40.7% (end of 31st period)

+53
+2
+3

18

3. Financial Results and Forecasts ofFinancial Results

Forecasts of Financial Results for the 32nd Fiscal Period (compared with 31st period)

Forecast of the 32nd fiscal period ending December 2017
DPU: 7,220 yen (up 7 yen, or up 0.1%, from 31st period actual results)
Rent revenue will continue to increase period-on-period, with newly acquired properties operating for the entire fiscal period
Aim to achieve further growth of distribution per unit by steadily implementing measures designed for the medium-term target
Item
Operating revenue（Of whichi, gain on sale of properties）

Revenue andprofit(million yen)

Reserve (million yen)

DPU (yen)

Operatingindicators(million yen)

Operating expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income
Provision of reserve(per unit)NOI
NOI yield (book value)
Rental income - real estate
After-depreciation yield(book value)

Depreciation
Capital expenditures
Repairs and maintenance
Average occupancy rate
Period-end occupancy rate

Number of units outstanding (units)

Change31st Period (Result)

32nd Period (Forecast)

15,11815,073

-45

(210)

-

(-210)

7,370
7,747
96
976
6,868
6,867
210
7,213
10,216
5.0%
8,308
4.1%
1,907
563
246
98.5%
98.0%

7,494
7,578
4
917
6,664
6,664
7,220
10,271
4.9%
8,346
4.0%
1,925
911
278
98.2%
97.9%

+124
-169
-92
-58
-203
-203
-210
+7
+55
-0.1%pt+37-0.1%pt
+17
+347
+31
-0.3%pt-0.1%pt

923,000

923,000-

1. Forecasts of financial results for the 32nd fiscal period ended December 2017 based in the following assumption.
Investment properties owned: Total 62 properties (end of the 31st period)
Average occupancy rate： 98.2% (an estimate that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period)
LTV (based on total assets)： 40.6% (end of 32nd period)(JPY mn)
Major Factors of Period-on-Period Changes*
Impacts
onnet
incomeindicated by
Net income-203
plus and minus
Rental income+37

Increase in rent revenue (existing properties)+52

Contribution in rent revenue (properties acquired in 31st
period+169

Lack of rent revenue (properties sold in 31st period)

Increase in incidental income
Decrease in other income
Increase in utilities expense
Decrease in incidental income

-93
-56
+103
-9
-71
-84

(Reference) Improvement in the balance of utilities expenses(incidental income expenses - utilities expenses)+71

Decrease in cancellation penalty, etc. and income equivalent
to expense for restoration to original condition

Increase in repairs and maintenance utilities expenses

Increase in other expenses
Gain or loss on sale -210
of properties

-31
-24

(Lack of gain on sale of properties in 31st period)

Nonoperating
income-33

Lack of settlement on management association accounts (theitem is recorded primarily in fiscal periods ending June eachyear)
Increase in interest expense on loans and investment
corporation bond
Other change in non-operating income and extraordinary
income or loss

-84
+38
+12

19

3. Financial Results and Operating
Forecasts(Reference) Overview of Rental Income-Real Estate, Etc. for the 33rd Fiscal Period(compared with forecast for the 32nd period)

Forecast of the 33rd fiscal period ending June 2018
Rental income – real estate, etc.: -264 million yen (compared with the 32nd period)
Although a period-on-period decrease in rent revenue and an increase in property taxes and city planning taxes are anticipated,
JPR expects cash distributions to remain at the 32nd fiscal period level due to recording of non-operating income
Item
Rental revenue-real estate (a)Revenue andprofit(million yen)

Expenses related to rent business (b)Gain on sale of properties
Loss on sale of properties
Rental income-real estate, etc.

NOI
NOI yield (book value)
Rental income-real estate（a-b）

Operatingindicators(million yen)

After-depreciation yield (book value)

Depreciation
Capital expenditures
Repairs and maintenance
Average occupancy rate
Period-end occupancy rate

32nd Period (Forecast)

33rd Period (Forecast)

ChangeDec. 2017
15,073
6,727
8,346
10,271
4.9%
8,346
4.0%
1,925
911
278
98.2%
97.9%

Jun. 2018
14,977
6,896
8,081
10,029
4.9%
8,081
4.0%
1,948
1,187
311
98.2%
98.1%

-95
+169
-264
-242
-0.0%pt-264-0.0%pt
+22
+276
+32
-0.0%pt+0.2%pt

1. Rental income – real estate, etc. represents income obtained by adding or subtracting gain or loss on sale of real estate to or from rental income – real estate.
2. Forecasts of financial results for the 33rd fiscal period ending June 2018 based in the following assumption.
Investment properties owned: Total 62 properties (end of the 32nd period)
Average occupancy rate： 98.2% (an estimate that reflects consents regarding move-ins and move-outs that will become effective in the fiscal period)
LTV (based on total assets)：40.6% (end of 33rd period)

Major Factors of Period-on-Period Changes
Rental income – real-264
estate, etc.
Rental income-264
Decrease in rent revenue
Lack of cancellation penalty, etc. and income equivalent to
expense for restoration to original condition(JPY mn)-17-6Decrease in incidental income
Decrease in other income
Decrease in utilities expense

-71
-0
+47
-23

Increase in repairs and maintenance utilities expenses

-32
-165
-18

(Reference) Deterioration in the balance of utilities expenses(incidental income - utilities expense)

Increase in property and other taxes
Decrease in other expense

Gain on sale ofproperties-20

3. Financial Results and Forecasts ofFinancial Results

Change in Rental Business Profits and Gain or Loss on Sale of Real Estate

Rental income – real estate for the 33rd fiscal period ending June 2018 will decrease by 125 million
yen, or down 1.5%, from the 30th fiscal period
Rental income – real estate is expected to increase by 242 million yen if special factors (decreases in cancellation penalties, etc.,
income equivalent to expenses for restoration to original condition and repairs and maintenance) are excluded
Item
Rental revenue - real estate
Rent revenue (fixed income)Rents and common charges
Land rents
Other fixed income
Other rental revenue (variable income)
Incidental income
Cancellation penalty, etc.
Income equivalent to expenses for restoration to original condition

Other variable income
Rental business profits(million yen)

Expenses related to rent business (excluding depreciation)

Outsourcing fees
Utilities expenses
Property and other taxes
Insurance premiums
Repairs and maintenance
Property management fees
Management association accounts
Other expenses related to rent business

NOI
Depreciation
Expenses related to rent business
Rental income - real estate (a)Gain on sale of real estate (b)Gain or loss on sale of realestate (million yen)
Loss on sale of real estate (c )Rental income - real estate, etc. (million yen, a + b‐c)

30th Period

31st Period

32nd Period

33rd Period(Dec. 31, 2016)
15,105
13,664
11,700
1,581
382
1,441
767
398
249
25
5,014
542
794
2,059
25
586
248
591
166
10,090
1,884
6,898
8,206
0
300
7,906

(Jun. 30, 2017)
14,907
14,123
12,149
1,580
393
783
682
31
35
34
4,691
575
770
2,061
25
246
259
578
172
10,216
1,907
6,599
8,308
210
8,518

(Dec. 31, 2017)
15,073
14,251
12,271
1,581
398
821
785
2
8
25
4,801
600
842
2,044
26
278
261
587
161
10,271
1,925
6,727
8,346
8,346

(Jun. 30, 2018)
14,977
14,234
12,205
1,624
404
743
714
4
24
4,948
592
794
2,209
27
311
256
561
195
10,029
1,948
6,896
8,081
8,081

33rd Period (compared with 30th Period)

Amount of Change

-127
+570
+504
+43
+21
-697
-52
-394
-249
-0
-66
+50
+0
+150
+1
-275
+8
-30
+29
-61
+64
-1
-125
-0
-300
+174

%
-0.8
+4.2
+4.3
+2.8
+5.7
-48.4
-6.9
-99.0
-100.0
-3.7
-1.3
+9.3
+0.0
+7.3
+4.6
-47.0
+3.3
-5.1
+17.6
-0.6
+3.4
-0.0
-1.5
-100.0-100.0+2.2

21

3. Financial Results and Forecasts ofFinancial Results

Changein Rent Revenue
賃料等収入の変動状況

Rent revenue in the 33rd fiscal period ending June 2018 to increase by 570 million yen, or up 4.2%,
from 30th fiscal period ended December 2016
■ Rent revenue (factor for period-on-period changes)
Rent revenue

Plus item

Minus item

（JPY mn）

Move
-ins

Acquisition

Sale

-77
Move
-ins

+244 -216

Others+10

14,123

Move
-ins

Move
-outs

Acquisition
Increase Decrease
revisions revisions+49-30 +167

Sale

-91

OthersMove-outs

Increase Decrease

14,251 +179 -304 revisions revisions+5+126 -24

Others

+5 14,234

+451

Move
-outs
Increase Decrease
revisions revisions+298 -224 +45 -44
13,664

Dec. ‘16（30thperiod）

31st Period（Jun. 2017）

32nd Period (Forecast)（Dec. 2017）

33rd Period (Forecast)（Jun. 2018）• Rent revenue increased period-on-period by 450 million yen• A period-on-period increase of 70 million yen from existing
properties• Property replacement in 30th and 31st periods contributed
370 million yen• Rent revenue to increase period-on-period by 120 millionyen• A period-on-period increase of 40 million yen from existing
properties planned• Property replacement in 30th and 31st periods tocontribute 70 million yen• Rent revenue to decrease period-on-period by 10
million yen• Expected upward revision for Otemachi Tower(property and city planning tax) by 40 million yen

1. Rent revenue includes such fixed income as rents, common charges, land rents, parking lot revenues and advertisement charges. Each figure for the 32nd fiscal period is an estimate based on consents regarding move-ins/move-outs and rents becoming effective in the fiscal
period. Each figure for the 33rd fiscal period is an estimate based on the assumptions by JPR regarding move-ins and move-outs becoming effective in the fiscal period and regarding rents.

22

3. Financial Results and Forecasts ofFinancial Results

Fluctuations in Distribution per Unit

Distribution per unit for the 32nd fiscal period to increase by 172 yen (up 2.4%, from 30th fiscal
period)■ Distribution per Unit (factors for period-on-period changes)
Distribution per unit

(yen/unit)

Minus item

Plus item

Dilution by
NonIncrease inrental income – operating public stock
real estate due income
offering
to property
acquisition and
sale

+146

Expensesrelated to rent
business andadministrative Cancellation
Loss on sale
expenses penalty, etc.

-412
+355

Internal
reserveof realestate, etc.

7,048

Rent Other rental +420
revenue revenue

+89

-112

Rent
-241 7,213 revenue
+56

-665

Expensesrelated to rent
Increase in
Other business and Lack of rental income –rental administrative cancellation real estate due Nonrevenue expenses penalty, etc. to property operating
and loss on acquisition andincomesale
sale of realestate

+89

-144

-60

+103

-36

Rent
7,220 revenue

+584

-18

NonExpenses
Other
operatingrelatedtorentrentalincomerevenue business and-85

administrative
expenses-166

31st Period（Jun. 2017）

32nd Period (Forecast)（Dec. 2017）

33rd Period (Forecast)（Jun. 2018）

Lack of cancellation penalty was absorbed by having repairs and maintenanceworks initially planned for the 31st period implemented in the preceding fiscal
periodIncome increased period-on-period due to internal growth, external growthand effects of lowered debt cost

Acquired properties contribute to profit (additional
revenue for 6 months)
Distribution per unit will continue to grow stably

An increase in property taxes and city
planning taxes to be absorbed by nonoperating income
Distribution per unit will continue to growstably30th（Dec. 2016）

•
•
•
•

Decrease in repairs and maintenance
Increase in settlement of management association accounts
Decrease in utilities balance of payments
Decrease in financial costs+389 yen+97 yen- 69 yen+50 yen• Lack of settlement of management association accounts-91 yen• Decrease in financial costs+41 yen• Increase in utilities balance of payments+33 yen• Increase in repairs and maintenance expenses-33 yen* JPR have internal reserve of a part of gain on sale of real estate

1. Fluctuations in distribution per unit show the amounts obtained by dividing the period-on-period fluctuation amounts of respective periods by the total number of investment units outstanding at period end(31st period: as of end of Dec. 2016).

•• Increase in property and other tax-171 yen• Increase in repairs and maintenance expenses-34 yen• Decrease in utilities balance of payments-24 yen• Increase in non-operation income

233. Financial Results and Forecasts ofFinancial Results

Traces of Growth in Distribution per Unit

Realize Growth by Steadily Achieving Targets
Aim to achieve medium-term target by continuing stable growth centering on internal growth■ Results, Forecast and Medium-Term Target of Distribution per UnitManagement Regain 6,000 yen(Dec. 2010 – Dec. 2011)
target

Maintain 6,000 yen

Grow to 6,500 yen

Grow to 7,000 yen(Jun. 2012 – Dec. 2013)(Jun. 2014 – Jun. 2015)(Dec. 2015 – Dec. 2016)

外部成長による収益底上げ
Increaserevenue through external growth

Enhancerevenue centering on internal growth
内部成長中心の収益向上
Target of 6,500 yen set
upon announcing
financial results in Jun.
2014

Target of 6,000 yen in normal
operation set upon announcing
financial results in Dec. 2011

（yen/unit）

Beginning-of-period forecast

Grow to 7,500 yen,surpassing the record high since listing

Target of 7,000 yen set
upon public offering in
Jun. 2015

内部成長の継続
Continue
internal growth
Enhance growth potential through外部成長による成長力の向上

Target of 7,500 yen set
upon announcing financial
results in Jun. 2016

external growth

Results

8,000

7,500

7,000
6,430
6,000

5,680
5,750

5,876 6,400
5,611
5,600

6,031

6,006

6,360
6,050

6,000
5,700

6,150

5,800

5,800

23rd
(Jun. ’13)

24th
(Dec. ’13)

6,419

6,510

6,756

7,000
6,630

7,213
7,140

Approx. 290
yen to reachtarget6,180

Increased due to recording ofproperty tax, etc. on properties
acquired in 21st period to
costs

5,000

4,0000

6,093

6,351

6,588

7,048

18th
(Dec. ’10)

19th
(Jun. ’11)

20th
(Dec. ’11)

21st(Jun. ’12)

22nd
(Dec. ’12)

25th
(Jun. ’14)

26th
(Dec. ’14)

1. Distribution per unit as medium-term target is a management target set by TRIM, and there is no guarantee that the figure is achieved.

27th(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ’16)

31st
（period）(Jun. ’17)

Medium-termtarget24

3. Financial Results and Forecasts ofFinancial Results

Growth Scenario for Distribution per Unit

Growth Scenarios for Achieving Medium-Term Target
Achieve the medium-term target by continuing internal growth, reducing debt costs and realizing external growth■ Simulation for Achieving the Medium-Term Target (contribution amounts to distribution per unit) (Growth Scenario for Distribution per Unit)

95.5

96.0

96.5

97.0

97.5

+0.0

-105

-52

0

52

105

+1.0

-5

48

101

154

207

+2.0

96

149

203

256

310

+3.0

196

250

304

358

412

at least 130円 yen as a target of 35th

• Average debt cost of repayments over four fiscal
periods since the 32nd period: 1.16%
Average debt amount of repayments: about 52.9 billion
yen (until 35th fiscal period ending Jun. 2019)
Average debt cost with assumed refinance:0.5%～0.9%• Work to flatten repayment amount for each fiscal
period while procuring funds focused on long-term
debt in consideration of the recent interest rate trends

Dec. '17 Jun. '18 Dec. '18 Jun. '19

Amount of increase in rental income – realestate through property acquisitions:

13

12

4

45

74

0.80

23

20

10

50

103

0.70

32

27

15

54

128

0.60

42

34

21

59

156

0.50

52

41

26

64

183

at least 200 yen as a target*The estimates in the table to the right do not include fundprocurement costs.

5.0

②

③

Assume to achieve +290 yen for 35th period (reaching 7,500 yen-level in theprevious scenario), with internal growth and financial strategy anticipated toprogress as previously expected)
Expect a significant increase in expenses due to revaluation of property and city
planning taxes for fiscal 2018, and worsening of the balance of utilities
expenses (factors to reduce cash distribution by 200 yen → DPU to fall to 7,300
yen)Assume to achieve 7,500 yen through external growth, though in considerationof the current acquisition environment the period by which this target is to beachieved has not been set
Internal growth

7,500yen

Total

0.90

（Assumptions for after-depreciation yield and acquisition price）• Work to acquire properties that should contributeto earnings from existing portfolio by utilizing
preferential negotiation rights and asset
replacement, etc.
• Acquisition price: 5.0～15.0 billion yen（yen/unit）

Dec. ’17～Jun. ’19（Assumptions of debts costs through future refinancing）

Debt cost (%)

Financial strategy

External growth strategy

occupancy rate based on generated rents
for office properties and rate （%）

Rate of increase in rent
revenue (%)(Assumptions for occupancy rate based on generated rents
for office properties and rate of increase in rent revenue)• Occupancy rate based on generated rents for officeproperties and rate （%）: at least 96.5%• rate of increase in rent revenue (%): at least up 0.4%
• Conservatively set plans while closely monitoring theimpact of mass supply of office spaces in Central
Tokyo in 2018 and thereafter on the market
conditions

Increase by reducing debt costs

財
務
戦
略

（円/口）
at least 160 yen as a target of 35th （yen/unit）

Amount of increase in rent revenue:

Acquisition price(billion Yen)

Internal growth strategy①（yen/unit）

After-depreciation yield （%）
3.2

3.3

3.4

3.5

3.6

3.7

87

89

92

95

98

100 103

3.8

10.0 173 179 184 190 195 200 206
15.0 260 268 276 284 293 301 309
20.0 347 358 368 379 390 401 412

7,213
DPU (31st)① Up throughinternal growth andfinancial strategy
alone

+130
+160

7,213
【Previous scenario】
Up from internal growthand lower financial
costs over 31st period
DPU

Up from internal
growth and lower
financial costs
over 31st period DPU[Previous scenario]

Finance

External growth② Impact ofhigher expenses③ Up throughexternal growth

▲200

+200

7,300

7,300

【Revised scenario】
After reflecting higher
expensesAssumed external
growth• Assumed scenario (previously indicated scenario) that adds expected growth(from internal growth and financial strategy) through 35th period to the 31st
period DPU• As the impact of mass supply of office spaces in Central Tokyo in 2018 andafterward is limited, it is assumed that vacancy rate does not surpass 5% andthe market rent does not fall
• It is assumed that long-term interest rate does not rise significantly from thecurrent level

After reflecting
higher expenses• Scenario that reflects the newly assumed increase in expenses into theprevious scenario

Assumedexternal growth• Scenario that assumes external growth through property acquisitions on topof the increased expenses

1. Each of these figures is just a target or a plan. There is no guarantee that the figures are achieved. The details of these policies may be changed without prior notice in accordance with the real estate market conditions and the investment environment in the future.
2. The contribution amounts to distribution per unit shown in the simulation of internal growth strategy, financial strategy and external growth strategy indicate the figures obtained by dividing the assumed full-period increase amounts based on respective assumptions by the total
number of investment units outstanding assumed for the end of the 31st fiscal period.

25

3. Financial Results and Forecasts ofFinancial Results

Additional Explanations (Assumptions of Growth Scenario for Medium-Term Target)

Increased payment of property and city planning taxes and revised estimate of balance of utilities
expenses will lower DPU for the 35th period by approx. 200 yen■ Estimate Balance of Utilities Expenses• While endeavors are made to reduce utilities expenses such as replacing lightingwith LED lamps, an increase in the fuel cost adjustment for power charges after
hitting bottom at end of 2016 and other factors caused JPR to revise theestimate balance of utilities expenses (incidental income – utilities expenses)[Amounts set for normal operation]
Fiscal period ending June: approx. 80 million yen (equivalent to -87 yen in DPU)
Fiscal period ending December: Approx. 55 million yen (equivalent to -60 yen in
DPU)• Continue such initiatives as switching power providers and changing power
charge invoicing methods as measures to reduce utilities expenses and alleviate
the tax burden

Changes in the balance of utilities expenses (estimate)
Balance of utilies expenses（million yen）

Estimate of previous fiscal period

25

-27

-50

2018

2019

2020

Fiscal period

Jun. ‘18(33rd)

Dec. ‘18(34th)

Jun. ‘19(35th)

Dec. ‘19(36th)

Jun. ‘20(37th)

Dec. ‘20(38th)

Increased amount ofburden（million yen）

74

30

113

69

89

89

Impact on distribution

▲80

▲33

▲122

▲74

▲96

▲96

Increased amount of burden (net)Increases in property and city planning taxes
Portions collectible from The Otemachi Tower(million yen)

300

-56
-83
-97

-125

-200

7

-37

-75

-175

Fiscal year

Forecast increases in property and city planning taxes

-25

-150

• Property and city planning taxes will increase gradually for fiscal 2018 through2020 due to measures to adjust the tax burden• Tax burden will increase by 113 million yen for the 35th period and 89 million
yen for the 37th period and thereafter (compared with the 31st period)• Property and city planning taxes for The Otemachi Tower (Land with Leasehold
Interest) are in principle collectible as rent. Due to the gap from when they arecollected, however, JPR’s burden will increase by three month portions for the
33rd and 35th periods
Increased burden of property and city planning taxes (compared with the 31st period)（yen/unit）

0

-100

■Significant increase in property and city planning taxes inaccordance with their revaluation for fiscal 2018 (estimate)

-135

-97

-88

200

-80

100
0

-145
-100

-172 -177（period）

Jun. '13 Dec. '13 Jun. '14 Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18（forecast） （forecast）
1. Balance of utilities expenses represents the amount obtained by simply deducting the utilities expenses for each fiscal period fromincidental income for the period. Incidental income means revenues mainly from exclusive areas, while utilities expenses accrue mainlyfor exclusive and common areas, etc. Accordingly, the balance of utilities does not indicate the balance of incidental income and utilities
expenses for exclusive areas.

-200
Jun. '18

Dec. '18

Jun. '19

Dec. '19

Jun. '20/ Dec. '20（period）

1. Each of the above figures is an estimate calculated by TRIM, and may not necessarily be the same as the actual amount.

26

JAPAN PRIME REALTY INVESTMENT CORPORATION

4. Appendix

27

4. Appendix

Fund Summary

NOI

30th Period(Dec. 2016)
10,090 million yen

31st Period(Jun. 2017)10,216 million yen

EPS

Operating revenue

7,161 million yen

7,747 million yen

FFO per unit

Interest expenses

931 million yen

887 million yen

6,152 million yen

Net income

30th Period(Dec. 2016)
7,047 yen

31st Period(Jun. 2017)
7,440 yen

9,549 yen

9,293 yen

Net assets per unit

248,154 yen

258,516 yen

6,867 million yen

NAV per unit

283,129 yen

306,192 yen

465,000 yen

405,000 yen

405,945 million yen

373,815 million yen

FFO8,336 million yen

8,577 million yen

Investment unit price (immediately before theex-rights date)

Depreciation

1,884 million yen

1,907 million yen

Market capitalization

Gain or loss on sale of real estate properties-299 million yen

197 million yen

Dividend yield (forecast)

7,612 million yen

8,014 million yen

724 million yen

563 million yen

6,152 million yen

Total assets
Balance of interest-bearing debts
Net assets

3.0%

3.6%

PBR

1.9 times

1.6 times

NAV multiple

1.6 times

1.3 times

6,657 million yen

PER

33.0 times

27.2 times

432,307 million yen

446,068 million yen

ROE

5.7%

5.8%

188,960 million yen

181,394 million yen

FFO multiple

24.3 times

21.8 times

216,639 million yen

238,611 million yen

AFFO payout ratio

80.8%

83.1%

Unitholders’ capital

210,395 million yen

231,653 million yen

Implied cap rate

3.5%

3.8%

Unrealized gains

DSCR

9.9 times

10.7 times

Interest coverage ratio

7.7 times

8.7 times(including loss on retirement of noncurrent assets)

AFFO
Capital expenditure
Total cash distributions

36,686 million yen

50,662 million yen

NOI yield (acquisition value)

4.9%

4.8%

NOI yield (book value)

5.1%

5.0%

NOI yield (appraisal value)

4.7%

4.5%

After-depreciation yield (acquisition price)

4.0%

3.9%

After-depreciation yield (book value)

4.2%

4.1%

After-depreciation yield (appraisal value)

3.8%

3.6%

LTV (total assets)

43.7%

40.7%

LTV (unrealized gains and losses)

40.3%

36.5%

47.3%

43.9%

873,000 units

923,000 units

Cash distribution per unit (result)

7,048 yen

7,213 yen

Cash distribution per unit (forecast)

7,140 yen

7,220 yen

LTV (unitholders’ capital)
Number of units outstanding (end of period)

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.

FFO = Net income＋depreciation－gain or loss on sale of real estate properties (including loss on retirement of noncurrent assets)
AFFO = FFO－capital expenditure
EPS = Net income / number of units outstanding (end of period)
NAV per unit = (Net assets + unrealized gains or losses – total cash distributions) / number of units outstanding (end of period)
Dividend yield (forecast) = Cash distribution per unit (annualized, forecast for the next fiscal period x 2) / investment unit pricePBR (price book-value ratio) = Investment unit price / net assets per unit
NAV multiple = Investment unit price / NAV per unit
PER (price earnings ratio) = Investment unit price / EPS (annualized, most recent result x 2)
ROE (return on equity) ＝ Net income (annualized, most recent result x 2) / net assets
FFO multiple = Investment unit price / FFO per unit (annualized, most recent result x 2))
AFFO payout ratio = Total cash distributions / AFFO
Implied cap rate = NOI (annualized, forecast for the next fiscal period x 2) / (market capitalization + interest-bearing debts – cash anddeposits + tenant leasehold and security deposits)
DSCR = (Net income + depreciation + interest expenses) / interest expenses
Interest coverage ratio = Operating revenue / interest expenses
Interest expenses include interest expenses on investment corporation bonds.

28

4. Appendix

Track Record of 15 Years■ Cash Distribution per Unit and Occupancy Rate
Cash distribution per unit (yen)Occupancy rate (%)

99.0 98.7 98.0 97.0
96.9 97.0 97.2 97.5 97.4 97.8 98.3 98.5
96.2 96.4 96.1
96.1 97.7 98.3
95.2 94.0 93.8
93.6 94.0 95.0 94.8 94.4 95.6
92.6 93.1 94.3 94.9
Occupancy rate

6,912 6,873

6,671
5,738

6,081

6,370 6,411 6,509

6,873 6,996 6,671 7,122 7,092

6,933 6,770

6,430
5,680 5,611 5,876

6,093 6,031 6,006

6,419 6,588
6,150 6,351

6,756

96.1% on average

7,048 7,213

Cash distribution per unit

3,731

6,400 yen on average

2,545(excluding the 1st Period)

1st(Jun. ‘02).

2nd(Dec. ’02)

3rd
(Jun ’03)

4th(Jun ’03)

5th(Jun. ’04)

6th
(Dec. ’04)

7th
(Jun. ’05)

8th
(Dec. ’05)

9th
(Jun. ’06)

10th
(Dec. ’06)

11th
(Jun. ’07)

12th
(Dec. ’07)

13th
(Jun. ’08)

14th
(Dec. ’08)

15th
(Jun. ’09)

16th
(Dec. ’09)

17th
(Jun. ’10)

18th
(Dec. ’10)

19th
(Jun. ’11)

20th
(Dec. ’11)

21st(Jun. ’12)

22nd
(Dec. ’12)

23rd
(Jun. ’13)

24th
(Dec. ’13)

25th
(Jun. ’14)

26th
(Dec. ’14)

27th
(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ‘16)

31st(Jun. ’17)

（period）■ Asset Size
Office properties inTokyo

Office properties in
Other Cities

1,257 1,396
921

1,636

1,796

Retail properties

1,976 2,026 2,092(based on acquisition price; 100 million yen)

2,224

2,453 2,519

2,751 2,806

3,986 4,047 4,047 4,055
3,809 3,919

2,994 3,106

4,095 4,103 4,103 4,214

4,350

3,312 3,415 3,415 3,449

Breakdown by area and byasset class(as of June 30, 2017)
Office properties in Tokyo
293.0 billion yen
Office properties in Other
Cities41.0 billion yen

945

Retail properties

100.9 billion yen
1st(Jun. ‘02).

2nd(Dec. ’02)

3rd
(Jun ’03)

4th(Jun ’03)

5th(Jun. ’04)

6th
(Dec. ’04)

7th
(Jun. ’05)

8th
(Dec. ’05)

9th
(Jun. ’06)

10th
(Dec. ’06)

11th
(Jun. ’07)

12th
(Dec. ’07)

13th
(Jun. ’08)

14th
(Dec. ’08)

15th
(Jun. ’09)

16th
(Dec. ’09)

17th
(Jun. ’10)

18th
(Dec. ’10)

19th
(Jun. ’11)

20th
(Dec. ’11)

21st(Jun. ’12)

22nd
(Dec. ’12)

23rd
(Jun. ’13)

24th
(Dec. ’13)

25th
(Jun. ’14)

26th
(Dec. ’14)

27th
(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ‘16)

31st(Jun. ’17)

（period）

29

4. Appendix

Portfolio Diversification (as of June 30, 2017)

Ratio by Asset Class• Portfolio management standards (target investment ratios):
70 - 90% for office properties / 30 - 10% for retail properties

Ratio by Area
• Portfolio management standards (target investment
ratios): 80 - 90% for Tokyo / 20 - 10% for Other Cities

Medium-sized

Other Cities(3,000 m2 to less than 10,000
m2)

15.5%

Officeproperties

76.8%• Comprised of medium-sized to very large properties with afocus on quality(Small-scale properties with a standard floor of less than 100 tsubos are excluded frominvestment targets.)

Retailproperties

23.2%

Ratio by Asset Size (Office Properties)

Greater Tokyo

28.2%

Central Tokyo

56.3%

30.7%

Very large(30,000 m2 or more)

Large

45.2%

(10,000 m2 to less than
30,000 m2)

24.1%

Ratio by Rent Zone (Office Properties in Tokyo)• Diversify the rent zones to diversify the timing at which
rents are affected by the market
30 thousand yen
moreLess than 15
thousand yen

14.2%

34.9%

• Comprised of tenants mainly in the services, information andcommunication and manufacturing sectors
Medical and Welfare 1.3%
Other 0.9%
Transportation 2.3%
Public Services 3.9%
Real Estate

25 to lessthan 30
thousand yen
or more25.7%

20 to less than 25
thousand yen

14.5%• Obtained preferred negotiation rights for most of the coowned properties, etc.

22.0%

Construction

8.2%

Information andCommunication

Wholesale and Retail

Full ownership
32 buildings

Co-owned
properties, etc.
30 buildings

42.5%

57.5%

18.0%

11.3%
Manufacturing

Finance andInsurance

11.3%

12.8%

1. Ratio by Size (Office Properties) indicated the ratios based on the acquisition price for the total floor space of an entire office property.
2. Ratio by Rent Zone (Office Properties in Tokyo) indicates the ratios of the acquisition price by average unit rent zone (including common
charges and assuming occupancy of vacant spaces at the standard rent set forth by JPR) to the total acquisition price of office properties
in Tokyo that JPR owns. Furthermore, The Otemachi Tower (Land with Leasehold Interest) is excluded from the calculation as it is a land
property.

Ratio of Co-Owned Properties, Etc.

Services

7.9%

10.7%
15 to less than 20
thousand yen

Ratio by Tenant’s Industry (Office Properties)

3. Ratio by Tenant’s Industry (Office Properties) = Leased space of each tenant by industry / sum total of leased office space
4. Ratio of co-owned properties indicates the based on the acquisition price.

30

4. Appendix

Tenant Diversification (as of June 30, 2017)■ Ratio of Tenant Occupancy■ 20 Largest Tenants (by property; based on end tenants)• The number of office tenants other than the sponsors, etc. with tenant
occupancy of 1% or more is only 2 (combined occupancy: 2.4%)(excluding property comprising land with leasehold interest) .
• Many of the retail tenants have long-term lease contracts, and thepossibility for them to cancel is rather small.

Category (No. of
tenants)

TenantLess than 1%

67.3%

1.7%
Other tenants with
2.4%
1% or more

Ratio ofoccupancy（%）

Housing Design Center Kobe

35,444.13

7.5

Seiyu GK

Tanashi ASTA

31,121.71

6.6

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

19,740.95

4.2

JPR Umeda Loft Bldg.

18,586.97

4.0

Musashiurawa Shopping Square

9,558.51

2.0

Tower Records Japan Inc.

JPR Shibuya Tower Records Bldg.

8,076.85

1.7

The Maruetsu, Inc.

Cupo-la Main Bldg.

5,963.00

1.3

Nitori Holdings Co., Ltd.

MusashiurawaShopping Square

5,285.40

1.1

Sponsors, etc. with
1% or more
Tokyo Prime Stage Inc.
(1 company)

The Otemachi Tower (Landwith Leasehold Interest)

7,875.50

1.7

Rise Arena Bldg.

6,023.39

1.3

JPR Nagoya Fushimi Bldg.

5,313.36

1.1

LEVEL-5 Inc.

Yakuin Business Garden

4,579.17

1.0

Sompo Japan Nipponkoa Inc.

Sompo Japan Sendai Bldg.

4,400.03

0.9

ATM Japan, Ltd.

Olinas Tower

4,255.56

0.9

Nihon Suido Consultants Co., Ltd.

Shinjuku Square Tower

4,242.48

0.9

Canon Imaging Systems Inc.

Niigata Ekinan Center Bldg.

4,078.97

0.9

Kajima Corporation

Omiya Prime East

4,005.05

0.9

Mitsubishi Electric Information
Systems Corporation

MS Shibaura Bldg.

3,922.74

0.8

SBS Holdings, Inc.

Olinas Tower

3,850.43

0.8

Security communication
Association (foundation)

Olinas Tower

3,544.12

0.8

Retail tenants with
1% or moreSponsors, etc. with
1% or more

Leasedspace(㎡)

ABC Development Corporation

Retail tenants with The LOFT, Co., Ltd.
1% or more
Olympic Group Corporation(8 companies)

28.6%

Occupying property

Other tenants with Hitachi, Ltd. Infrastructure Systems
Company
1% or more
Hitachi Systems, Ltd.
(2 companies)

Less than 1%(668 companies)

Except for retail properties with long-term lease contracts,
most of the tenants have a tenant occupancy of less than
1% so that the risk of tenant move-outs is mitigated.

1. Ratio of occupancy indicates the figure for each property and is based on end tenants , calculated by using the following formula.
Ratio of occupancy = Leased space of each tenant / leasable floor space of the property
Leased space of each tenant for properties subleased by the tenant to sublessees is calculated based on the space leased to the subleasees.
2. For co-owned properties, etc., the leases space in accordance with JPR’s ownership interest is indicated.

31

4. Appendix

Move-Ins and Move-Outs of Tenants (as of June 30, 2017)■ Breakdown and Changes in Move-Ins and Move-Outs■ Move-In/Move-Out Spaces by Property(Move-in/move-out spaces by area and asset class: m2)
Move-Ins

Office properties inCentral Tokyo
Office properties inGreater Tokyo
Office properties in
Other Cities
Retail properties
Total

Move-Outs

Move-ins – move-outs

Net Increase/DecreaseShin-Kojimachi Bldg.
MS Shibaura Bldg.

0

4,000

-3,453+547

JPR Ichigaya Bldg.

-290

1,671

-1,317+353

Shinjuku Square Tower

0

BYGS Shinjuku Bldg.

224

1,933

-5,458-3,524

Shinagawa Canal Bldg.

171

0

-137

-137

Tokyo Tatemono Kyobashi Bldg.

388

7,605

-10,367-2,761JPR Sendagaya Bldg.

0(Changes in move-in/move-out spaces and rate of move-ins/move-outs)（㎡）

20,000Move-ins (left axis)
Rate of move-ins (right axis)
2.6

2.6
1.8

10,00011,5988,224

2.4

Move-outs (left axis)
Rate of move-outs (right axis)
3.0
2.5
1.7

11,764

10,87013,663

11,310-1.2-7,641-12,890-10,392-10,3412-10,367
-2

-1.7
-2.6

-20,000

4

0-11,603-10,000

（%）

7,605

0
-5,512

-2.3
-2.8

0

-2.3

-2.3
-4

Jun. '14 Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 （period）

Ginza Sanwa Bldg.

59

Science Plaza – Yonbancho Plaza-7

JPR Jingumae 432-137

JPR Chiba Bldg.

9

Shinyokohama 2nd Center Bldg.

213

Move-outs

Move-ins-497 497
-980
980
-290
-191 191
-450
675
171
388
-817
817
59

Niigata Ekinan Center Bldg.

-289

Tokyo Tatemono Honmachi Bldg.

-2,123

JPR Hakata Bldg.

2

JPR Naha Bldg.

0

Tenjin 121 Bldg.

-224

JPR Dojima Bldg.

139

JPR Hakata-chuo Bldg.

0

Yakuin Business Garden-101-225 217-137-131 141
-571
784
-195
-90 200-244 115344-84 84-289-2,123-152 154-81 81-279 55-431 570-359
359-210 109

Beneton Shinsaibashi Bldg.

-928-1,531

Kawaguchi Center Bldg.

-195

Tachikawa Business Center Bldg.

110

Yume-ooka Office Tower-129

Olinas Tower

344

Tokyo Tatemono Yokohama Bldg.

0

1. Rate of move-ins and move-outs = Move-in and move-out spaces of each fiscal period / total leasable space at the end of the previous fiscal period
2. Move-in/Move-Out Spaces by Property indicates only the properties that had tenant moves (including contract changes, etc.) during the 31st fiscal period ended Jun. 2017.
3. JPR Hakata-chuo Bldg. was sold as of April 14, 2017.

（㎡）

602

32

4. Appendix

Yields (as of June 30, 2017)■ Yields by Area and by Asset Class (based on book value) ■ NOI Yield by Property (based on book value)
Central Tokyo(NOI yield)
（%）

10

5

（%）

Circle size = portfolio asset size (book value)
Center of circle = NOI yield0

OfficeOfficeOfficeproperties in
Retailproperties in Greater Tokyo properties inproperties
CentralOther Cities
Tokyo
6.4%
6.2%
5.4%

Kanematsu Bldg.

Portfolio average
5.0%

6.9
5.7
4.6
4.5
5.9
4.2
4.3
7.9
3.8
4.7
7.7
3.1
3.5
4.6
8.2
4.5
5.0
5.8
2.9
3.9
3.5
5.8
6.3
2.9
5.0
3.1
3.6
3.2
3.3
4.3
4.1

Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.

JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Tower
Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.

（%）

Minami Azabu Bldg.

10

Shinagawa Canal Bldg.

Circle size = portfolio asset size (book value)
Center of circle = after-depreciation yield

Rokubancho Bldg.
JPR Harajuku Bldg.
Tokyo Tatemono Kyobashi Bldg.

OfficeOfficeRetailOfficeproperties in properties inproperties
Greater Tokyo properties inCentralOther Cities
Tokyo

5

4.9%
3.5%

JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
The Otemachi Tower(Land with Leasehold Interest)

4.5%

Portfolio average
4.1%

4.6%

Science Plaza-Yonbancho Plaza
Shibadaimon Center Building
Tokyo Square Garden
JPR Shibuya Tower Records Bldg.
JPR Jingumae 432

0Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
GINZA GATESFUNDS Suidobashi
Average of Central Tokyo

1. JPR sold Fukuoka Bldg. and JPR Hakata-chuo Bldg. as of April 14, 2017.

3.6

（%）

0

15

5

10

15

6.3
6.7
6.4

Arca East Bldg.

JPR Ningyo-cho Bldg.

Fukuoka Bldg.

(After-depreciation yield)

10
5.5

Gotanda First Bldg.

05

Kanematsu Bldg. Annex

MS Shibaura Bldg.

4.1%

Greater Tokyo and Other Cities

JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.

8.9
7.8
9.0
7.1
6.6
6.3
5.3
6.7
7.4

Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.
JPR Ueno East Bldg.
Tachikawa Business Center Bldg.
Rise Arena Bldg.
Yume-ooka Office Tower
Olinas Tower
Tokyo Tatemono Yokohama Bldg.
Omiya Prime East

13.9

Tanashi ASTA

8.7

Cupo-la Main Bldg.

4.6

JPR Musashikosugi Bldg.

6.0
5.2
6.7

Musashiurawa Shopping Square
Kawasaki Dice Bldg.
Average of Greater Tokyo

10.1

Niigata Ekinan Center Bldg.

4.6

Tokyo Tatemono Honmachi Bldg.

7.0

JPR Hakata Bldg.

9.8
10.7
10.7

JPR Naha Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.

5.9

Tenjin 121 Bldg.
JPR Dojima Bldg.

4.0
6.6

JPR Hakata-chuo Bldg.

4.7

JPR Nagoya Fushimi Bldg.

6.2
5.2

Yakuin Business Garden
Benetton Shinsaibashi Bldg.
JPR Umeda Loft Bldg.

3.7
6.7

Housing Design Center Kobe
JPR Chayamachi Bldg.
Average of Other Cities

3.0
5.8

33

4. Appendix

Diversification of Lenders and Lender Formation (as of June 30, 2017)

Diversifying fund procurement sources with a lender formation comprising
26 financial institutions and through issuance of investment corporation bonds
Interest-bearing debt balance: 181,394 million yen

Sumitomo/Mitsui/Trust/Bank,
Limited
Tokio/Marine/&/Nichido/Fire
Insurance Co., Ltd
Daido/Life/Insurance Company
The Iyo Bank, Ltd.
Resona Bank, Ltd.
The Hachijuni Bank, Ltd.
Sompo/Japan/Nipponkoa Insurance
Inc.
National/Mutual/Insurance
Federation/of/Agricultural
Cooperatives
Sumitomo/Life/Insurance Company
The Norinchukin BankThe Chugoku Bank, Ltd.
Taiyo Life Insurance Company
The Shinkumi Federation BankORIX Bank Corporation
The Nishi-Nippon City Bank, Ltd.
Meiji/Yasuda/Life/Insurance
Company

1,000

Investment corporation
bonds
34,500(JPY)(Breakdown of investment corporation bonds)

Mizuho Bank, Ltd
26,000Seventh series of bonds
Fourteenth series of bonds

1,000
1,000
1,000
2,000
2,000
2,000

2,000
2,000
3,000
3,000
3,000
3,000
3,000
4,000
4,274

Fifteenth series of bonds

The Bank of TokyoMitsubishi UFJ, Ltd.
18,000

Sixteenth series of bonds
Seventeenth series of bonds
Eighteenth series of bonds

Sumitomo Mitsui Banking
Corporation
12,500Nineteenth series of bonds
Twentieth series of bonds
Twenty-first series of bonds
Twenty-second series of bonds

4,500
2,000
5,000
2,000
5,000
2,000
5,000
2,000
4,000
3,000

Development Bank of Japan,
Inc. 10,220
Shinsei Bank, Ltd. 10,000
Mitsubishi UFJ Trust andBanking, Corp. 8,000
Aozora Bank, Ltd. 7,900

The Bank of Fukuoka, Ltd.
5,000
Mizuho Trust & Banking Co.,
Ltd. 7,000
Shinkin Central Bank 5,000

34

4. Appendix

Appraisal Value (as of June 30, 2017)■ An Increase in Unrealized Gains■ Factors of Change in Appraisal Value• Unrealized gains expanded to 50.6 billion yen due to an increase inappraisal value and property replacement• Appraisal value increased for 50 properties with direct cap rate falling for
55 properties (out of 62 properties in total)
Appraisal value

Unrealized gains

464.5 billion yen

50.6 billion yen(up 26.5 billion yen from 30th
period)(up 13.9 billion yen from 30th
period)(Changes in direct cap rate)• Decreased by 0.9 percentage points from the 17th period ended June 2010
(4.8%), the peak period for office properties in Central Tokyo

Ratio of unrealized gains

Entire portfolio

12.2%(up 3.1%pt from 30th period)

4.8
4.4
4.2

Unrealized gains and losses (left axis)
含み損益（左軸）含み損益率（右軸）
Ratio of un realized gains and losses (right axis)

600
500

5.0
4.6

(Changes in unrealized gains and losses)(100 mn. yen)

Ofice properties in Central Tokyo

5.2

50.6 billion yen

400

(%)

4.0

30

3.8

0.0
3.6
25
20

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

30th

31st（end of period）

Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period

1. The changes in direct cap rate indicate the figures for the 49 properties JPR has owned since the end of June 2009 for the "Entire
portfolio," and for the 15 properties JPR owns since the date for "Office properties in Central Tokyo," respectively.

(Breakdown of unrealized gains and losses)
300

12.2%

200

15
10

• Number of properties with unrealized losses decreased by 2 from 16 properties asof the end of the 30th period（billion yen）

+90
100

5

0

0

Unrealized gains

Unrealized losses+60

48 properties
+30

-100

-5

-200

-10

62 properties
50.6 billion yen

+0

-300

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31-15（end of period）

68.6 billion yen
14 properties-17.9 billion yen-30

Entire portfolio

Breakdown of unrealized gains andlosses35

4. Appendix

Property nameAppraisal Value by Property (as of June 30, 2017)

Appraisalvalue（mn yen）

Direct cap(NCF Cap)(%)

Change（mn yen）

Change（% pt）

DCF
discount
rate
(%)

DCF
ChangeChangeterminal cap(% pt)（% pt）(%)

UnrealizedBookgain orvalue
loss(mn yen) (mn yen)

Property nameAppraisalvalue（mn yen）

Direct cap(NCF Cap)(%)

Change（mn yen）

Change（% pt）

DCF
discount
rate
(%)

DCF
ChangeChangeterminal cap(% pt)（% pt）(%)

UnrealizedBookgain orvalue
loss(mn yen) (mn yen)

Kanematsu Bldg.

13,700

+800

3.6

-0.1

3.4

-0.1

3.8

-0.1

14,685-985

JPR Ueno East Bldg.

4,730

+170

4.2

-0.1

4.0

-0.1

4.4

-0.1

2,953

Kanematsu Bldg. Annex

2,630

+40

4.0

-0.1

3.8

-0.1

4.2

-0.1

2,450

+179

Tachikawa Business Center Bldg.

3,510

+190

4.6

-0.2

4.3

-0.2

4.8

-0.2

2,884

+625

JPR Ningyo-cho Bldg.

2,710

+140

4.2

-0.1

4.0

-0.1

4.4

-0.1

1,972

+737

Rise Arena Bldg.

7,620

-20

4.2

0.0

3.9

-0.1

4.3

-0.1

5,312

+2,307Shin-Kojimachi Bldg.

3,310

+80

4.0

-0.1

3.7

-0.1

4.2

-0.1

2,462

+847

Yume-ooka Office Tower

6,250

+280

4.6

-0.1

4.3

-0.1

4.8

-0.1

5,487

+762

JPR Crest Takebashi Bldg.

3,290

+50

3.9

-0.1

3.7

-0.1

4.1

-0.1

3,273

+16

Olinas Tower

36,700+1,100

4.0

-0.1

3.7

-0.1

4.2

-0.1

27,737+8,962

MS Shibaura Bldg.

11,700

+300

4.3

-0.1

4.0

-0.1

4.5

-0.1

11,059+640

Tokyo Tatemono Yokohama Bldg.

8,200

+220

4.5

-0.1

4.3

-0.1

4.7

-0.1

6,859

+1,340Gotanda First Bldg.

2,630

+110

4.0

-0.1

3.7

-0.1

4.2

-0.1

2,982

-352

Omiya Prime East

7,950

+370

4.7

-0.1

4.5

-0.1

4.9

-0.1

5,887

+2,062JPR Ichigaya Bldg.

5,080

-

3.8

-0.1

3.6

-0.1

4.0

-0.1

5,210

-130

Tanashi ASTA

12,500

-900

5.2

0.0

5.1

0.1

5.4

0.0

7,348

+5,151

Oval Court Ohsaki Mark West

4,840

+260

4.0

-0.1

3.8

-0.1

4.2

-0.1

2,860

+1,979Cupo-la Main Bldg.

2,750

+40

5.3

-0.1

5.1

-0.1

5.5

-0.1

1,731

+1,018

Shinjuku Square Tower

14,400

+600

3.9

-0.1

3.7

-0.1

4.1

-0.1

13,441+958

JPR Musashikosugi Bldg.

5,670

+140

4.8

-0.1

4.6

-0.1

5.0

-0.1

7,052

-1,382BYGS Shinjuku Bldg.

17,800+1,600

3.8

-0.1

3.6

-0.1

4.0

-0.1

15,462+2,337

Musashiurawa Shopping Square

4,290

-

5.0

0.0

4.9

0.0

5.2

0.0

3,734

+555

875

+14

4.7

-0.1

4.5

-0.1

4.9

-0.1

605

+269

Kawasaki Dice Bldg.

16,200

+700

4.2

-0.1

4.1

-0.1

4.4

-0.1

13,549+2,650Shinjuku Center Bldg.

15,000

+600

3.6

-0.1

3.3

-0.1

3.8

-0.1

22,171-7,171

Niigata Ekinan Center Bldg.

2,210

-180

5.9

-0.1

5.9

-0.1

6.1

-0.1

1,641

+568

Minami Azabu Bldg.

2,840

+150

4.2

-0.1

4.0

-0.1

4.4

-0.1

3,846

-1,006

Tokyo Tatemono Honmachi Bldg.

3,380

+50

4.9

-0.1

4.6

-0.1

5.1

-0.1

4,057

-677

Shinagawa Canal Bldg.

1,870

+30

4.2

-0.1

3.9

-0.1

4.4

-0.1

1,737

+132

JPR Hakata Bldg.

3,180

+100

4.6

-0.3

4.5

-0.3

4.8

-0.3

2,944

+235

Rokubancho Bldg.

3,400

+40

5.2

-1.3

4.1

-0.1

4.5

-0.1

2,836

+563

JPR Naha Bldg.

1,580

+50

5.5

-0.3

5.5

-0.3

5.7

-0.3

1,336

+243

JPR Harajuku Bldg.

8,900

+390

3.9

-0.1

3.7

-0.1

4.1

-0.1

8,711

+188

Sompo Japan Sendai Bldg.

3,750

+70

5.3

-0.1

5.1

-0.1

5.6

-0.1

2,467

+1,282

Tokyo Tatemono Kyobashi Bldg.

5,720

-90

4.2

0.0

3.7

0.0

4.3

0.0

5,321

+398

Sompo Japan Wakayama Bldg.

1,710

+10

6.7

-0.1

6.5

-0.1

7.0

-0.1

1,342

+367

JPR Nihonbashi-horidome Bldg.

6,720

+240

4.3

-0.1

4.1

-0.1

4.5

-0.1

4,787

+1,932

Tenjin 121 Bldg.

2,730

+180

4.7

-0.1

4.3

-0.1

4.9

-0.1

2,094

+635

JPR Sendagaya Bldg.

11,800

+300

3.9

-0.1

3.7

-0.1

4.1

-0.1

14,926-3,126

JPR Dojima Bldg.

2,930

+350

4.6

-0.2

4.4

-0.1

4.7

-0.2

2,175

+754

Ginza Sanwa Bldg.

4,020

+290

3.3

-0.2

3.1

-0.2

3.5

-0.2

3,707

+312

JPR Nagoya Fushimi Bldg.

2,810

+80

5.4

-0.1

4.9

-0.1

5.3

-0.1

3,903

-1,093

Yakuin Business Garden

14,800

+900

4.4

-0.1

4.2

-0.1

4.6

-0.1

10,585+4,214Benetton Shinsaibashi Bldg.

4,310

+360

4.0

-0.1

3.7

-0.1

4.1

-0.1

5,042

-732

Across Shinkawa Bldg. Annex+1,77646,000

-

2.9

0.0

2.8

0.0

3.0

0.0

38,388+7,611

Science Plaza - Yonbancho Plaza

3,290

+230

4.2

0.0

3.8

-0.1

4.4

-0.1

2,697

+592

Shibadaimon Center Bldg.

5,850

+390

3.9

-0.1

3.6

-0.1

4.1

-0.1

4,199

+1,650JPR Umeda Loft Bldg.

13,900

-600

4.2

-0.1

3.9

-0.1

4.4

-0.1

12,458+1,441JPR Shibuya Tower Records Bldg.

14,100

-

3.6

-0.1

3.4

-0.1

3.8

-0.1

11,514+2,585

Housing Design Center Kobe

7,120

+190

5.7

-0.1

5.5

-0.1

5.8

-0.1

6,225

+894

JPR Jingumae 432

4,050

+120

3.2

-0.1

3.3

-0.1

3.4

-0.1

4,292

-242

JPR Chayamachi Bldg.

6,770

+480

3.7

-0.1

3.4

-0.1

3.8

-0.1

6,040

+729

Shinjuku Sanchome East Bldg.

2,750

+40

3.7

-0.1

3.2

-0.1

3.9

-0.1

2,629

+120

Yurakucho Ekimae Bldg.

3,060

+120

3.3

-0.3

2.9

-0.1

3.5

-0.1

3,321

-261

Total

444,445 +11,284

395,181 +49,263

Ginza Gates

10,800

-

3.1

0.0

2.8

0.0

3.1

0.0

10,130+669

Central Tokyo

236,605+6,934

224,939 +11,665

FUNDES Suidoubashi

3,470

+90

3.8

-0.1

3.6

-0.1

4.0

-0.1

3,252

+217

Greater Tokyo

136,660+2,310107,926 +28,733

Arca East

6,240

+50

4.2

-0.1

3.9

-0.1

4.4

-0.1

4,317

+1,922Other Cities

71,180+2,04062,315+8,864

JPR Chiba Bldg.

1,660

-180

5.4

-0.1

5.2

-0.1

5.6

-0.1

2,256

-596

JPR Yokohama Nihon Odori Bldg.

2,290

-240

5.0

-0.1

4.8

-0.1

5.2

-0.1

2,487

-197

Properties to be acquired in 31st period

Shinyokohama 2nd Center Bldg.

1,850

+40

5.0

-0.2

4.8

-0.2

5.2

-0.2

1,441

+408

Tokyo Square Garden

20,100+100

18,701+1,398Kawaguchi Center Bldg.

8,250

+350

5.2

-0.1

4.9

-0.1

5.4

-0.1

6,885

+1,364
Total (as of 30 Jun. 2017)464,545 +11,384

The Otemachi Tower (Land with Leasehold Interest)

1. Direct cap indicates the capitalization rate that serves as the standard for calculating the value estimated by income approach based on the direct
capitalization method.
2. DCF discount rate and DCF terminal cap indicate the period income discount rate and the terminal capitalization rate that serve as the standard for
calculating the value estimated by income approach based on the discounted cash flow (DCF) method.

2.8

-0.1

2.6

-0.1

3.0

-0.1

413,882 +50,662

3. The period-on-period changes for properties acquired in the 31st fiscal period indicates a comparison with the figures based on theappraisal values upon their acquisition (as of December 15, 2016). Furthermore, Fukuoka Bldg. and JPR Hakata-chou Bldg. that weresold in the 31st fiscal period is excluded from the calculation of the period-on-period change figures.

36

4. Appendix

Sustainability 1

Maximize corporate value through endeavors on ESG (Environment, Social, Governance) awareness■ Sustainability Policy
TRIM, the asset management company of JPR, has established the "Sustainability Policy" as part of its endeavors to enhance sustainability.
Based on its corporate philosophy of working with integrity and commitment to responsibilities, TRIM is resolved to contribute to the sustainable development of society and the investment
management business through discussion and cooperation with its stakeholders (including investors and tenants), while aiming to maximize value for JPR's unitholders.
1.Initiatives on Behalf of Tenants
We will work with integrity and responsibility in responding to tenants, and endeavor to provide themwith new and distinct values as well as enhancing their satisfaction.

2.Initiatives on Behalf of the Environment
Recognizing the importance of addressing environmental issues, we will aim to reduce environmentalload through managing the assets owned by JPR.
・We will promote energy saving and reduction of greenhouse gas emissions.
・We will endeavor for effective use of water resources and work on the "3Rs" (reuse, reduce andrecycle) of waste.
・We will strive to proactively disclose information on environmental issues.

3.Initiatives on Behalf of Local Communities
We will work to coordinate with local communities through managing the assets owned by JPR, in aneffort to contribute to enhancing the brand value of the entire area in which such assets are located.

4.Initiatives on Behalf of the Society
We will respect each one of our employees to realize an employee-friendly workplace, helping them toenhance abilities in their specialties.

5.Initiatives on Behalf of the Society
We will abide by laws and regulations as well as the rules of society, and conduct business operations
with a focus on transparency and objectivity while holding on to our high moral standards.

■ Social■ Governance
JPR’s corporate governanceIn the belief that it is essential to secure sound and efficient operations of JPR to realize
continuous growth, efforts are made to reinforce and sustain governance.
• Decision-making institutions at JPR
JPR’s decision-making institutions are comprised of the general meeting of unitholders, which is composed of its
unitholders, an Executive Officer, two Supervising Officers, Board of Directors and Independent Auditor.

Initiatives on Behalf of Local Communities

Securing BCP

Endeavor to communicate with local communities, and workto achieve development deeply rooted in relevant areas, suchas providing owned properties as the venue of local
exchanges.

Conducted an earthquake disaster drill to speed up
collection of information on property damages, assuming
an earthquake that directly hits the Greater Tokyo area

Example: Growing sweet potatoes on the roof of Oval Court Ohsaki MarkWest

• Composition of JPR officers
The JPR officers have sufficient experience in practical operations and have a thorough knowledge of the REIT
industry. The Supervising Officers are an attorney and a public accountant, securing the effectiveness of theirmonitoring functions on the business operations of the investment corporation.

• Appointment criteria of JPR officers
JPR officers are appointed on the condition that they have no cause of disqualification as set forth in the Act on
Investment Trusts and Investment Corporations, etc. Furthermore, each JPR officer is to be elected by resolution at
the general meeting of unitholders of JPR.

• Remuneration for officers
The upper limit of the remuneration for the Executive Officer and Supervising Officers is set out in JPR’s Articles ofIncorporation, and the amount of the remuneration shall be determined by the Board of Directors (up to 500,000
yen per month for the Executive Officer and up to 400,000 yen per month for each of the Supervising Officers).

While promoting greenery on the roof, residents and nurseryschool pupils are invited to harvesting ceremonies to holddining parties.

37

4. Appendix

Sustainability 2

Reinforcing Continuous Improvement Initiatives on Environmental Issues■ Energy Consumption■ Results of controlling and emitting greenhouse gases

Reduction of Energy Consumption (Revised Energy Conservation Act)

Situation of greenhouse gas emissions at JPR

Achieved a reduction rate far exceeding the target

Work to reduce emissions per square meter while endeavoring to enhance the portfolio data
coverage ratio

2014

2015

（%）

2016

Power consumption（kwh/㎡）

151.86155.05143.04

Portfolio data coverage ratio

72.8%

70.9%

98.1%

90

Gas consumption（㎥/㎡）

4.41

4.54

4.69

Portfolio data coverage ratio

30.7%

30.9%

47.3%

80

Water consumption（㎥/㎡）

1.47

1.40

1.29

70

Portfolio data coverage ratio

76.2%

76.5%

96.8%
600

CO 2 emissions（tCO 2 /㎡）

57.30

58.49

Target under Revised Energy
Conservation Act
94.1 Achieved a reduction
rate far exceeding
than the target-13.6%pt

Comparison with base year

100

80.6
Actual result of comparison withbase year
'10

'11

'12

'13

'14

'15

'16

（fiscal year）

56.23■ Environment Certification
GRESB
JPR has obtained “Green Star,” the highest ranking, forthree consecutive years

DBJ Green Building
Properties that newly obtained certification in July 2017

JPR has obtained certificationfor 17 properties in total
Olinas Tower
Yakuin Business GardenTokyo Square
GardenMinami Azabu
Bldg.

JPR Chiba Bldg.

1. The target figure (94.1%) under the Revised Energy Conservation Act represents the reduction rate against the base year in 6 years with an annual reduction of 1% year-on-year. The per-unit rate of change for the 6 fiscal years is 99.0% on average.

JPR Sendagaya Bldg.
Shinagawa Canal Bldg.
Rise Arena Bldg.
Omiya Prime East
Yume-ooka Office Tower

38

4. Appendix

Asset Manager■ Decision-Making Process for Property Acquisitions■ Asset Manager and Sponsor• The shareholding ratio of Tokyo Tatemono in TRIM increased from 40% to 52% as ofDecember 22, 2016.
• The increase is part of Tokyo Tatemono’s strategy to further reinforce its comprehensive
strengths and business portfolio.

• An outside attorney is appointed as a special member of the Compliance Committee andexamines and verifies the adequacy and rationality of transactions at the Committee.
• Upon implementing the approved transactions, approval by JPR’s board of directors,
comprising directors who are independent from the shareholders of TRIM, must be
obtained in advance.
Conclude agreement

Decision making on
acquisition
over certain amountFinal decision on
acquisition

Acquisition

TRIM’s Board of Directors

Investment Subcommittee

Auditors

Compliance Committee
JPR’s Board of Directors

Shareholder’s Meeting

Prior review /approval oftransaction withrelated parties■ Organization Chart(Transaction with related parties)• Acquisition and selling of properties• Consignment of property management• Intermediary and agent of buying andselling• Order placement of construction works(costing over 10 million yen)
• Lease of properties

Due diligence
subcommittee

Meiji Yasuda Life Insurance

Due diligence

Sompo Japan Nipponkoa Insurance

The Compliance Committee examines
the adequacy and rationality of thefollowing transactions.

Investment subcommittee

Taisei Corporation

Decision on
acquisition policy

Yasuda Real Estate

Compliance subcommittee

18%
10%
10%
10%

Review, screening

Tokyo Tatemono

Invest management department

52%

Proposal, planning(Asset manager)

Decision Making Based on Stringent Processes

Board of Directors■ Remuneration System of the Asset Manager

President &CEO
Investment Committee

Compliance Committee

Compliance Office
Investment Management Division

Financial DivisionCorporate Planning /Administration Division

Research Grp.

Financial Grp.

Planning Grp.

Investment Grp.

IR Grp.

General Administration
Grp.

Asset Management 1Grp.

Fund Management Grp.

Asset Management 2Grp.
Asset Management 3Grp.
Asset Engineering Grp.

• Employing a management fee system that matches unitholder’s interests andbenefits of the asset management company
Item

Calculation of Compensation

Results ofRemuneration(31st Period)

Share

Fixed fee

12.5 million yen per month

75 million yen

12.5%

Incentive Fee 1

2% of JPR’s total revenue(1.5% for 8 billion yen or higher)

265 million yen

44.3%

212 million yen

35.5%

46 million yen

7.7%

Incentive Fee 2
Incentive Fee 3

3% of JPR’s income before income taxes(income before income taxes before
deducting Incentive Fee 2)
0.25% of the acquisition price upon new
acquisition394. Appendix

Office Property Leasing Market

Net Increase in Leasable Floor Area, Strong Demand and Impact on Vacancy Rate
■ Changes in New Supply/Demand Area, Leasable Floor Area and Vacancy Rate
( Tokyo CBDs )• Net increase in leasable floor area (in stock) over the new supply area is small.

Comparison of increases in new supply area and leasable floor area
+400

The increase in leasable floor area is lower by more than half of theincrease in new supply area
Up 2.00 mn. tsubo• New demand has remained strong, surpassing the increase in leasable floor area by
volume+200• Employed population is on an upward trend, leading new demand.
Increase in labor participation ratio, primarily by females and elderly people, ispromoted by political initiatives and is likely to continue over the medium term.
（thousand tsubo）

300

New supply
New demand

Net increase in leasable floor area
Vacancy rate

Anount of increase in new supply area
Amount of increase in leasable floor area

（10 thousand tsubo）

Up 0.87 mn. tsubo+0'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 （year）（%）

15（空室率は右軸、その他は左軸、新規需要面積は実績のみ表示）

Comparison of increases in leasable floor area and occupied area
Net increase in leasable floor
Increase in occupied area

（10 thousand tsubo）

+200
+150

200

9.01

10

8.67

The increase in occupied area is larger than the increase in leasable
floor area.
Up 1.00 mn. tsubo+100

Up 0.87 mn. tsubo

+50

7.34

+0
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 （year）

5.47
100

4.03

5

3.61

Comparison of employed population and occupied area (’05=100pt)
(pt)

130
120

0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

0
2021 （year）（forecast） （forecast） （forecast） （forecast） （forecast）
1. Actual results of the vacancy rate, leasable floor area and occupied area through December 2016 are based on the Office Report (Tokyo CBDs) by Miki Shoji Co., Ltd. New supply,
new demand and loss areas as well as the leasable floor area and vacancy rate in 2017 and thereafter have been estimated based on surveys and simulations conducted by
TRIM.
2. As an assumption for the simulation, the new supply area uses an estimate obtained by applying a certain multiplying factor to the average of the past results. The lost area isbased on the average of the past results as assumption.
3. The employed population was prepared by TRIM based on the Labor Force Survey, the Ministry of Internal Affairs and Communications.

Employed population
Male
FemaleOccupied area is increasing presumably in sync
with the steady increase in employed population
Demand is led by the increasing labor
participation ratio of females

Occupied area

123 pt116 pt113 pt111 pt

110
100
'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16 (year)40

4. Appendix

For-Sale Office Property Market

Cap Rate of Tokyo Office Properties Continues to Drop
■ Correlation between Price and Rent of Grade A Office
Properties in Tokyo■ Cap Rates of Office Properties in Tokyo• Cap rate dropped in 2016 to 2017
Grade A office properties: 2.90%（year on year: minus 0.05% pt), grade B
office properties 3.50% (year on year minus 0.20 pt)• Cap rate fell below the peak in 2007 and continues to drop further.
Grade A office properties（%）• Rent increased 17.3 points from the bottom in 2012 while price rose 68.1
points from 2010 by index（pt・Q1 2002=100）

Grade B office properties

6.0

Rent index

Price index

300

5.5
250
5.0
200

4.5
Last peak for grade B officeproperties

4.0

Price index up 68.4pt
150Last peak for grade A officeproperties

3.5

100

3.0
0
50

up 17.3pt

Q1 '02Q3 '02Q1 '03Q3 '03
Q1 '04Q3 '04
Q1 '05
Q3 '05
Q1 '06
Q3 '06
Q1 '07
Q3 '07
Q1 '08
Q3 '08
Q1 '09Q3 '09Q1 '10Q3 '10Q1 '11
Q3 '11
Q1 '12Q3 '12
Q1 '13Q3 '13
Q1 '14Q3 '14
Q1 '15Q3 '15
Q1 '16
Q3 '16
Q1 '17

Q1 '17

Q3 '16

Q1 '16

Q3 '15

Q1 '15Q3 '14

Q1 '14Q3 '13

Q1 '13Q3 '12

Q1 '12Q3 '11

Q1 '11

Q3 '10Q1 '10

Q3 '09Q1 '09Q3 '08

Q1 '08

Q3 '07

Q1 '07

Rent index

2.50

1. Prepared by TRIM based on reports publicized by Jones Lang LaSalle K.K

41

4. Appendix

Unitholders (as of June 30, 2017)■ Number of Units by Unitholder Type (923,000 units in total)
Securities
companies
19,6642%

Foreigninvestors
216,596
24%

Other domestic
corporations
82,0869%Unitholder

Financial
institutions
566,724
61%
Of which, investment
trusts incorporating
JPR units296,455
32%■ Number of Unitholders by Unitholder Type (12,535 unitholders in total)
Other domestic
corporations
218
2%■ Top Unitholders

Individuals
37,9304%Foreign investors
416
3%

Securities
companies
220%

No. of units Share（％）

Japan Trustee Services Bank, Ltd. (Trust Account)

225,911

24.5

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

67,906

7.4

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

66,131

7.2

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

37,355

4.0

Tokyo Tatemono Co., Ltd.

29,300

3.2

Kawasaki Gakuen

25,0002.7

Meiji Yasuda Life Insurance Company

24,0002.6

State Street Bank West Client Treaty 505234

23,033

2.5

State Street Bank West Pension Fund Clients Exempt 505233

18,0142.0

State Street Bank and Trust Company 505223

13,154

1.4

529,804

57.4

Total

Financial
institutions
182
2%

Of which, investment
trusts incorporating
JPR units
33
0%Individuals
11,69793%

42

4. Appendix

Investment Unit Price and Yield■ Changes in JPR Unit Price
(pt)

JPR

TSE REIT index(indexed with January 4, 2016 as the base date for J-REITs other than JPR)

130

120

110

100

90
January 2016

April 2016

July 2016

October 2016

January 2017

April 2017

July 2017

January 2017

April 2017

July 2017■ Changes in JPR Dividend Yield
(%)

JPR

TSE REIT index

4.0

3.5

3.0

2.5

0
2.0
January 2016

April 2016

July 2016

October 2016

1. Prepared by TRIM based on Bloomberg data.

43

4. Appendix

Portfolio Map■Central Tokyo

Shinjuku

Ichigaya

A-5

A-4

A-14

SaitamaPrefecture

A-9

A-12
A-24

B-6

Chiyoda Ward

B-1

Tokyo

A-1

A-26

A-21

A-2
A-13

Shibuya Ward

A-5

Harajuku

A-22

B-7

Olinas Tower
Tokyo Tatemono Yokohama Building

B-13

Omiya Prime East

B-1

Tanashi ASTA

B-3

Cupo-la Main Bldg.

B-4

JPR Musashikosugi Bldg.

Yokohama

B-5

Musashiurawa Shopping Square

B-3

B-6

Kawasaki Dice Bldg.

C-12

Sompo Japan Sendai Bldg.

C-1

Niigata Ekinan Center Bldg.

C-19

J PR Nagoya Fushimi Bldg.

C-9

JPR Naha Bldg.

Kawasaki

B-6

B-5

A-15

Shin-Yokohama
B-12

Tamachi
B-10

Tachikawa Business Center Bldg.

B-12

B-4

Kanagawa
Prefecture

Hamamatsucho

JPR Ueno East Bldg.

B-8

Chiba

Musashikosugi

A-25

Kawaguchi Center Bldg.

B-7

B-11

Shibuya
Shinagawa

Chuo Ward

Shibuya

Shinyokohama 2nd Center Bldg.

B-6

Rise Arena Bldg.

Tokyo

Minato WardJPR Yokohama Nihon Odori Bldg.

B-5

Yume-ooka Office Tower

Kinshicho

B-2
A-18

JPR Chiba Bldg.

B-3

B-10

Tokyo

A-3

A-1

Arca East

B-2

B-9

B-1

A-6

Shinbashi

B-1

B-11

Ikebukuro
Shinjuku

Tachikawa

A-19

B-9

Tanashi

B-8

Chiba
Prefecture

B-3

Kawaguchi

A-23
A-3

A-17

B-5

Musashiurawa

A-20

A-4

All other areas of Tokyo, Chiba, Kanagawa
and Saitama Prefectures

B-13

Omiya

A-7

Shinjuku Ward
A-11

■Greater Tokyo

Chiyoda, Chuo, Minato, Shinjuku, Shinagawa
and Shibuya Wards

KamiokaA-6■Other Cities
GotandaShinagawa

A-7
A-16
A-10

OhsakiShinagawa Ward

C-4

Tokyo Tatemono Honmachi Bldg.

C-17

JPR Dojima Bldg.

C-21

Benetton Shinsaibashi Bldg.

C-1

JPR Umeda Loft Bldg.

C-5

JPR Chayamachi Bldg.
SendaiA-1

Kanematsu Bldg.

A-13

Across Shinkawa Bldg. Annex

A-24

Science Plaza - Yonbancho Plaza

A-2

Kanematsu Bldg. Annex

A-14

Shinjuku Center Building

A-25

Shibadaimon Center Bldg.

A-3

JPR Ningyo-cho Bldg.

A-15

Minami Azabu Bldg.

A-1

JPR Shibuya Tower Records Bldg.

A-4

Shin-Kojimachi Bldg.

A-16

Shinagawa Canal Bldg.

A-3

JPR Jingumae 432

A-5

JPR Crest Takebashi Bldg.

A-17

Rokubancho Building

A-4

Shinjuku Sanchome East Bldg.

A-6

MS Shibaura Bldg.

A-18

JPR Harajuku Bldg.

A-5

Yurakucho Ekimae Building (Yurakucho Itocia)

A-7

Gotanda First Bldg.

A-19

Tokyo Tatemono Kyobashi Building

A-6

GINZA GATES

A-9

JPR Ichigaya Bldg.

A-20

JPR Nihonbashi-horidome Building

A-7

FUNDES Suidobashi

A-10

Oval Court Ohsaki Mark West

A-21

JPR Sendagaya Bldg.

A-11

Shinjuku Square Tower

A-22

Ginza Sanwa Bldg.

A-12

BYGS Shinjuku Bldg.

A-23

The Otemachi Tower (Land with Leasehold Interest)

C-7

JPR Hakata Bldg.

C-14

Tenjin 121 Bldg.

C-20

Yakuin Business Garden

Niigata
NagoyaKobe

Fukuoka

Osaka
Wakayama
Naha

Acquired in 31st

A-26

Tokyo Square Garden

C-4

Housing Design Center Kobe

C-13

Sompo Japan Wakayama Bldg.

44

Portfolio List （Central Tokyo）

4. Appendix

A－1 Kanematsu Bldg.

A－2 Kanematsu Bldg. Annex

A－3 JPR Ningyo-cho Bldg.

A－4 Shin-Kojimachi Bldg.

① Chuo-ku① Chuo-ku① Chuo-ku① Chiyoda-ku② S・RC・SRC B2/13F② SRC B1/8F② SRC・RC B1/8F② SRC B1/9F③ Feb. 1993

③ Feb. 1993

③ Dec. 1989

③ Oct. 1984

④ 14,995m2④ 4,351m2④ 4,117m2④ 5,152m2

2

2

2⑤ 3,258m2⑤ 11,906m⑤ 3,455m⑤ 4,117m⑥ 79.4%⑥ 79.4%⑥ 100.0%⑥ 77.2%(87.4%)⑦ Dec. 2001

⑦ Dec. 2001

⑦ Nov. 2001

⑦ Nov. 2001 etc.

⑧ 16,276 mn yen⑧ 2,874 mn yen⑧ 2,100 mn yen⑧ 2,420 mn yen

A－5 JPR Crest Takebashi Bldg.

A－6 MS Shibaura Bldg.

A－7 Gotanda First Bldg.

A－23 The Otemachi Tower (Land with Leasehold Interest)

A－9 JPR Ichigaya Bldg.

① Chiyoda-ku① Minato-ku① Shinagawa-ku① Chiyoda-ku② SRC B1/9F② SRC・RC・S B2/13F② SRC・RC B2/11F② SRC B1/9F③ Sep. 1999

③ Feb. 1988

③ Jul. 1989

③ Mar. 1989

④ 4,790m2④ 31,020m2④ 10,553m2④ 5,888m2⑤ 4,790m2⑤ 15,439m2⑤ 4,035m2⑤ 5,888m2⑥ 100.0%⑥ 58.0%⑥ 59.6%⑥ 100.0%① Chiyoda-ku⑦ Jun. 2002

⑦ Mar. 2003

⑦ Jul. 2003

⑦ May. 2004②－

⑧ 4,000 mn yen⑧ 11,200 mn yen⑧ 2,920 mn yen⑧ 5,100 mn yen③ Apr. 2014
11,034㎡④(ground area)

A－14 Shinjuku Center Building

A－10 Oval Court Ohsaki Mark West

A－11 Shinjuku Square Tower

A－12 BYGS Shinjuku Bldg.

11,034㎡(ground area)⑥ 100%⑤⑦ Mar. 2012
⑧ 36,000 mn yen

A－13 Across Shinkawa Bldg. Annex① Shinagawa-ku① Shinjuku-ku① Shinjuku-ku① Chuo-ku② S・SRC B2/17F② S・RC・SRC B4/30F② SRC B2/14F② S・SRC B2/10F③ Jun. 2001

③ Oct. 1994
78,796m2 (entire④
redevelopment area)⑤ 18,933m2③ Apr. 1985

③ Jun. 1994

④ 25,733m2④ 5,535m2⑤ 25,733m2⑤ 1,233m2⑥ 100.0%⑥ 35.5%⑦ Nov. 2004 etc.

⑦ Nov. 2004

⑧ 15,121 mn yen⑧ 710 mn yen④ 28,575m2⑤ 4,024m2⑥ 23.9%⑦ Jun. 2004
⑧ 3,500 mn yen

A－15 Minami Azabu Bldg.

⑥ 67.4%⑦ Jul. 2004 etc.
⑧ 14,996 mn yen

A－16 Shinagawa Canal Bldg.

A－17 Rokubancho Building

A－18 JPR Harajuku Bldg.

① Minato-ku① Minato-ku① Chiyoda-ku① Shibuya-ku② S 9F② S B1/8F② SRC B3/7F② SRC B1/9F③ Jun. 1992

③ Jul. 2008

③ Oct. 1991

③ Mar. 1989

④ 4,570m2④ 5,216m2④ 4,205m2④ 6,466m2⑤ 4,570m2⑤ 1,677m2⑤ 4,205m2⑤ 4,205m2① Shinjuku-ku⑤ 8,172m2⑥ 100.0%⑥ 45.6%⑥ 100.0%⑥ 100.0%② SRC・RC・S B5/54F⑥ 8.6%⑦ Jul. 2008

⑦ Dec. 2008

⑦ Dec. 2009

⑦ Dec. 2009

③ Oct. 1979

⑦ Mar. 2008

⑧ 3,760 mn yen⑧ 1,870 mn yen⑧ 2,800 mn yen⑧ 8,400 mn yen④ 176,607m2⑧ 21,000 mn yen

1. The property overview indicates (1) location, (2) structure/floors, (3) completion, (4) total floor space (entire building), (5) total floor space (equivalent to equity interest), (6) building ownership ratio (ratio in parenthesis does not include parking spaces), (7) acquisition date and (8) acquisition
price. The same applies hereafter.

45

Portfolio List （Central Tokyo）

4. Appendix

A－19 Tokyo Tatemono Kyobashi Building

A－20 JPR Nihonbashi-horidome Building① Chuo-ku① Shibuya-ku② SRC B1/10F② SRC B1/9F② S 8F③ Jan. 1981

③ Jun. 2002

③ May. 2009

④ 4,419m2④ 7,190m2④ 7,683m2⑤ 4,419m2⑤ 7,190m2⑤ 7,683m2⑥ 100.0%⑥ 100.0%⑥ 100.0%⑦ Feb. 2010

⑦ Mar. 2010

⑦ May. 2010

⑧ 5,250 mn yen⑧ 5,100 mn yen⑧ 15,050 mn yen

A－22 Ginza Sanwa Bldg.

A－24 Science Plaza - Yonbancho Plaza① Chiyoda-ku① Minato-ku② SRC B2/9F② S・SRC・RC B2/12F② S・SRC B1/10F③ Oct. 1982

③ Feb. 1995

③ Jul. 1993

④ 8,851m2④ 24,560m2④ 11,419m2⑤ 2,042m2⑤ 3,213m2⑤ 5,285m2⑥ 26.6%⑥ 22.4%⑥ 65.4%⑦ Aug. 2011

⑦ Dec. 2013

⑦ Dec. 2013 etc.

⑧ 3,400 mn yen⑧ 2,660 mn yen⑧ 4,220 mn yen

A－4 Shinjuku Sanchome East Bldg.

A－3 JPR Jingumae 432① Shibuya-ku① Shinjuku-ku② S・SRC B1/7F② S・SRC・RC B3/14F③ Feb. 2006

③ Jan. 2007

④ 1,066m2④ 24,617m2⑤ 1,066m2⑤ 2,328m2⑥ 100.0%⑥ 12.5%⑦ Mar. 2006

⑦ Mar. 2007 etc.

⑧ 4,275 mn yen⑧ 2,740 mn yen

A－5 Yurakucho Ekimae Building (Yurakucho Itocia)① Chiyoda-ku② S・SRC B4/20F③ Oct. 2007
④ 71,957m2⑤ 1,087m2⑥ 1.9% (2.1%)⑤ 8,449m2⑥ 100.0%⑦ Jun. 2003
⑧ 12,000 mn yen⑦ Aug. 2008
⑧ 3,400 mn yen

Aｰ26 Tokyo Square Garden

A－25 Shibadaimon Center Bldg.

① Chuo-ku

A－1 JPR Shibuya Tower Records Bldg.

①Shibuya-ku② SRC・S B3/8F③ Feb. 1992
④ 8,449m2

A－21 JPR Sendagaya Bldg.

① Chuo-ku① Chuo-ku② SRC B4/24F③ Feb. 2013
④ 112,645㎡⑤ 9,256㎡⑥ 8.22%⑦ Feb. 2017 etc.
⑧ 18,400 mn yen

Aｰ6 GINZA GATES

Aｰ7 FUNDES Suidobashi①Chiyoda-ku②S 9F③Jul. 2015
④1,477㎡⑤1,477㎡⑥100%⑦Dec. 2016
⑧3,250 mn yen① Chuo-ku② S 11F③Jun. 2008
④ 1,821㎡⑤ 1,821㎡⑥ 100.0%⑦ Dec. 2016
⑧ 10,100 mn yen

46

4. Appendix

Portfolio List（Greater Tokyo）

B－1 Arca East

B－2 JPR Chiba Bldg.
① Sumida-ku

B－3 JPR Yokohama Nihon Odori Bldg.

B－5 Shinyokohama 2nd Center Bldg.

B－6 Kawaguchi Center Bldg.
① Kawaguchi, Saitama① Chiba, Chiba① Yokohama, Kanagawa① Yokohama, Kanagawa③ Mar. 1997

② S・SRC B1/13F② SRC B1/11F② S・SRC B2/12F③ Feb. 1994

④ 34,281m2③ Jan. 1991

③ Oct. 1989

③ Aug. 1991

④ 28,420m2② S・SRC B3/19F⑤ 6,911m2④ 9,072m

2④ 9,146m

2④ 7,781m⑥ 38.3%⑤ 9,072m2⑤ 9,146m2⑤ 7,781m2⑥ 86.5%⑦ Nov. 2001

⑥ 100.0%⑥ 100.0%⑥ 100.0%⑦ Feb. 2004

⑧ 5,880 mn yen⑦ Dec. 2001

⑦ Nov. 2001

⑦ Sep. 2002 etc.

⑧ 8,100 mn yen⑧ 2,350 mn yen⑧ 2,927 mn yen⑧ 1,490 mn yen

B－11 Olinas Tower

B－7 JPR Ueno East Bldg.

B－8 Tachikawa Business Center Bldg.

2② S・SRC B2/15F⑤ 15,401m2

B－9 Rise Arena Bldg.

B－10 Yume-ooka Office Tower① Taito-ku① Tachikawa, Tokyo① Toshima-ku② S・SRC B1/8F② S・SRC B1/12F② RC・SRC・S B3/42F③ Oct. 1992

③ Dec. 1994

③ Jan. 2007

2

2

① Yokohama, Kanagawa② S・SRC・RC B3/27F③ Mar. 1997

2

④ 14,706m⑤ 8,490m2⑤ 4,812m2⑤ 5,972m2④ 185,976m2⑥ 100.0%⑥ 47.9%⑥ 25.2%⑤ 14,196m2⑦ Mar. 2004

⑦ Sep. 2005 etc.

⑦ Mar. 2007

⑥ 48.8%⑧ 3,250 mn yen⑧ 3,188 mn yen⑧ 5,831 mn yen⑦ Jul. 2007

④ 8,490m④ 91,280m⑧ 6,510 mn yen

B-12 Tokyo Tatemono Yokohama Building

B－13 Omiya Prime East

① Yokohama, Kanagawa① Saitama, Saitama② SRC B1/9F② S 9F③ May. 1981

③ Feb. 2009

④ 8,772m2④ 9,203m2⑤ 23,692m2⑤ 8,772m2⑤ 9,203m2② SRC・RC・S B2/45F⑥ 23.3%⑥ 100.0%⑥ 100.0%③ Feb. 2006

⑦ Jun. 2009

⑦ Dec. 2010

⑦ Mar. 2013

④ 257,842m2⑧ 31,300 mn yen⑧ 7,000 mn yen⑧ 6,090 mn yen① Sumida-ku

B－1 Tanashi ASTA

B－3 Cupo-la Main Bldg.

B－4 JPR Musashikosugi Bldg.

① Nishitokyo, Tokyo① Kawaguchi, Saitama② SRC B2/17F② S・RC・SRC B2/10F③ Feb. 1995

③ Jan. 2006

② SRC・RC・S B1/6F④ 80,675m2④ 48,321m2③ Mar. 1983

⑤ 20,727m2⑤ 5,870m2④ 18,394m2⑥ 43.6% （51.3%）⑥ 16.7% (19.2%)⑤ 18,394m2⑦ Nov. 2001

⑦ Mar. 2006

⑥ 100.0%⑧ 10,200 mn yen⑧ 2,100 mn yen⑦ Sep. 2006

① Kawasaki, Kanagawa⑧ 7,254 mn yen

B－5 Musashiurawa Shopping Square

B－6 Kawasaki Dice Bldg.

① Saitama, Saitama① Kawasaki, Kanagawa② S B1/4F② S・SRC・RC B2/11F③ Oct. 2005

③ Aug. 2003

④ 28,930m2④ 36,902m2⑤ 14,465m2⑤ 13,925m2⑥ 50.0%⑥ 46.6%⑦ Mar. 2007

⑦ Apr. 2007

⑧ 4,335 mn yen⑧ 15,080 mn yen

47

Portfolio List （Other Cities）

4. Appendix

C－1 Niigata Ekinan Center Bldg.

C－4 Tokyo Tatemono Honmachi Bldg.

① Niigata, Niigata

C－7 JPR Hakata Bldg.

① Osaka, OsakaC－9 JPR Naha Bldg.
① Fukuoka, Fukuoka② S・SRC B1/10F② SRC B3/9F② S・RC B1/12F, S1F③ Mar. 1996

③ Feb. 1970

③ Jun. 1985

④ 19,950m2④ 14,619m2④ 9,828m2⑤ 5,444m2⑤ 7,709m2⑤ 9,828m2⑥ 32.9% (58.0%)⑥ 72.0% (71.0%)⑥ 100.0%⑦ Nov. 2001

⑦ Nov. 2001

⑦ Nov. 2001

⑧ 2,140 mn yen⑧ 4,150 mn yen⑧ 2,900 mn yen

C－13 Sompo Japan Wakayama Bldg.

C－14 Tenjin 121 Bldg.

C－17 JPR Dojima Bldg.

C－12 Sompo Japan Sendai Bldg.
① Naha, Okinawa① Sendai, Miyagi② SRC・S 12F② SRC B1/12F③ Oct. 1991

③ Dec. 1997

④ 5,780m2④ 10,783m2⑤ 5,780m2⑤ 10,783m2⑥ 100.0%⑥ 100.0%⑦ Nov. 2001

⑦ Jun. 2002

⑧ 1,560 mn yen⑧ 3,150 mn yen

C－19 JPR Nagoya Fushimi Bldg.

Wakayama,①
Wakayama① Fukuoka, Fukuoka① Osaka, Osaka① Nagoya, Aichi② S 9F② S・SRC 13F② SRC B2/9F② SRC B1/9F③ Jul. 1996

③ Jul. 2000

③ Oct. 1993

③ Mar. 1991

④ 6,715m2④ 8,690m2④ 5,696m2④ 10,201m2⑤ 6,715m2⑤ 3,117m2⑤ 5,696m2⑤ 10,201m2⑥ 100.0%⑥ 52.2%⑥ 100.0%⑥ 100.0%⑦ Jun. 2002

⑦ Jun. 2002

⑦ Jan. 2004

⑦ Mar. 2005

⑧ 1,670 mn yen⑧ 2,810 mn yen⑧ 2,140 mn yen⑧ 4,137 mn yen

C－20 Yakuin Business Garden

C－3 Benetton Shinsaibashi Bldg.
① Osaka, Osaka② S B2/10F③ Feb. 2003
④ 5,303m2⑤ 5,303m2① Fukuoka, Fukuoka⑤ 22,286m2⑥ 100.0%② SRC 14F

⑥ 100.0%⑦ May. 2005

③ Jan. 2009⑦ Aug. 2012

⑧ 5,430 mn yen④ 22,286m2⑧ 10,996 mn yen

C－1 JPR Umeda Loft Bldg.

C－4 Housing Design Center Kobe

C－5 JPR Chayamachi Bldg.

① Osaka, Osaka① Kobe, Hyogo① Osaka, Osaka② SRC B1/8F② SRC･S B2/11F② S・SRC 9F③ Apr. 1990

③ Jun. 1994

③ Jun. 1994

④ 17,897m2④ 33,877m2④ 3,219m2⑤ 17,897m2⑤ 33,877m2⑤ 3,219m2⑥ 100.0%⑥ 100.0%⑥ 100.0%⑦ May. 2003 etc.

⑦ Sep. 2005

⑦ Aug. 2006

⑧ 13,000 mn yen⑧ 7,220 mn yen⑧ 6,000 mn yen

48

4. Appendix

Introduction to the JPR Website http://www.jpr-reit.co.jp/

Having expanded IR information by adding a variety of contents, JPR provides information in a
8955
timely manner
Property Information• [Occupancy Rate]
Occupancy Rate: data for each property (Excel) updated
monthly• [Property Data Library]
Property Data Book, Property Appraisal Summary,
Historical Data
• [Portfolio data]
Asset class, Area, Ratio of Properties by Property
Acquisition Channel, Ratio of Tenant Occupancy• [Video Presentation of Major Properties]

Overview of Property・Access Map• [Property Overview]
Basic Information, Management Status, Major
Characteristics• [Access Map]
Search function for routes from the nearest
stations (applicable for mobile phones)• Other than these, latest topics regarding
management status are posted at any time

Digest of Financial Results• [Digest of Financial Results]
Provides movie that summarizes the latest analyst
meeting in a compact manner• [IR Mail Delivery Service]
Distribution of News Release49

Disclaimer and Glossary
Disclaimer• This material contains information that constitutes forward-looking statements. Such forward-looking
statements are made by Japan Prime Realty Investment Corporation (JPR) and Tokyo Realty Investment
Management, Inc. (TRIM) based on information currently available, and are therefore not guarantees of
future performance. Actual results may differ materially from those in the forward-looking statements as aresult of various factors including known or unknown risks and uncertainties.
This material is solely for the purpose of providing information, and is not intended for the purpose of offeringor soliciting investment, or as a means of marketing activities. Please refer any inquiries for possible purchaseof investment units or investment corporation bonds of JPR to your securities companies.
Although JPR takes all possible measures to ensure the accuracy of the content provided in this material(including references to legislation and taxation), it makes no guarantee as to the accuracy or reliability of thecontent. Furthermore, the content may be subject to change without prior notice.
• The photos used in this material include those of the assets other than what JPR owns or plans to acquire.
Please note that for assets indicated as land with leasehold interest, JPR owns only the land and does not own
any building on it.
• Unless otherwise noted, the figures indicated in this material are rounded down to the nearest specified unit
for monetary amounts and space areas, and rounded off to the nearest specified unit for percentages andother figures. Accordingly, the sum totals of monetary amounts or percentages of respective items may not
match the sum totals of actual figures.

Glossary
Acquisition price
The transaction price indicated in the sale and purchase agreement for acquisition of properties (hereafter, the “owned properties”) or
properties it plans to acquire (exclusive of expenses related to acquisition, property taxes and consumption taxes, etc.)
Total (acquisition price)
The asset size refers to the total amount of the acquisition prices of the owned properties.
Investment ratio
The investment ratio refers to the ratio of the acquisition price of relevant properties owned by JPR to the total acquisition price of its
portfolio.
Occupancy rate / occupancy rate based on concluded contracts
Total leased space / total leasable space
When simply stated as occupancy rate, it represents the occupancy rate based on concluded contracts.
When occupancy rate for each fiscal period is indicated, it represents the average occupancy rate as of the end of each month that belongs to
the relevant fiscal period (period average of occupancy rate at end of month). Furthermore, it may be described as “average occupancy rate”
in order to distinguish it from “period-end occupancy rate.”
Occupancy rate based on generated rents(Total leased space – total leased space during rent-free and rent-holiday periods) / total leasable space
Average unit rent
Total monthly rent / total leased space
Calculated based on the monthly rents (including common charges) indicated in the lease contracts with tenants; for certain properties, thefigure includes common charges, etc. received by master lessees without being recorded as JPR’s revenue
Number of tenants
The number of tenants counts the parties with whom JPR has concluded lease contracts for the building floors. 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.
NOI yield(Rental revenue - real estate － expenses related to rent business ＋ depreciation) / book value (or acquisition price, depending on the case)
NOI yield is calculated using the above formula, by dividing the book value (or acquisition price) in the formula by 365 days and multiplying itby the number of business days of the relevant fiscal period.
After-depreciation yield(Rental revenue - real estate － expenses related to rent business) / book value (or acquisition price, depending on the case)
Ratio of long-term, fixed interest rate debts
Long-term interest-bearing debts with fixed interests / total interest-bearing debts
Average maturity
Weighted average calculated by dividing the remaining periods to the repayment dates and redemption dates of borrowings and investment
corporation bonds at the end of each fiscal period by the balance of respective borrowings and investment corporation bonds at the end ofeach fiscal period
For borrowings with scheduled repayment in installments, the weighted average of the remaining period to the scheduled repayment datesof each installment payment in accordance with the relevant repayment amount
Average debt cost
Sum total of interest expenses on borrowings and investment corporation bonds, borrowing expenses (excluding expenses for early
repayment of borrowings and for commitment line agreements), amortization of investment corporation bond issuance costs and issuancemanagement expenses, divided by the number of business days for the relevant fiscal period and annualized by multiplying by 365 days /sum total of borrowings and investment corporation bonds
LTVInterest-bearing debts / total assets at end of period (based on total assets)
There are other calculation methods of LTV.
・LTV based on unitholders’ capital) = Interest-bearing debts / (interest-bearing debts + unitholders’ capital)
・LTV (based on valuation) = Interest-bearing debts / (total assets at end of period + unrealized gains or losses from valuation)
Unrealized gains or losses from valuation refer to the difference between appraisal value and book value.
NAV per unit
(Unitholders’ value + reserve for reduction entry, etc. + unrealized gains or losses) / number of units outstanding
Ratio of unrealized gains or losses(Appraisal value – book value) / book value
Cap rate
Capitalization rate by the direct capitalization method
Direct capitalization method is one of the methods to calculate the value estimated by income approach (a method to estimate the value ofthe target property by calculating the sum total of present value of the net operating income which the target property is expected togenerate in the future), and capitalizes the net operating income of a certain period by using the capitalization rate.
Tokyo“Tokyo” defined by JPR as its investment area collectively refers to “Central Tokyo” and “Greater Tokyo” as defined below, and “Other Cities”
refers to other regions.
・Central Tokyo: Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards
・Greater Tokyo: All other areas of Tokyo Prefecture, and Chiba, Kanagawa and Saitama Prefectures50