Financial
Statements
8th Fiscal Period
From November 1, 2008 to April 30, 2009
Report of Independent Auditors
Balance Sheets
Statements of Income and Retained Earnings
Statements of Changes of Unitholders’ Equity
Notes to Financial Statements
Statements of Cash Flows and Related Notes (Unaudited)

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BALANCE SHEETs
As of April 30, 2009 and October 31, 2008

In thousands of yen
As of April 30, 2009

As of October 31, 2008

AssetsCurrent assets:
Cash and bank deposits¥

Rental receivables
Consumption tax refundable

15,608,085¥

13,029,801

260,568

187,278-

180,365

73,324

67,696

15,941,977

13,465,141

Land

153,829,839

155,906,794

Buildings and structures

74,328,940

74,546,241

Machinery and equipment

901,145905,705

Tools, furniture and fixtures

379,847

382,011(7,543,943)(6,230,362)

221,895,828

225,510,389

Ground leasehold

285,350

285,350

Organization costs

10,17915,269Corporate bond issuance costs

45,52551,306

Unit issuance costs

47,36888,837

Other assets

518,783

232,306

Other current assets
Total current assets
Property and equipment, at cost:Less-accumulated depreciation
Net property and equipment
Other assets:

Total assets¥

238,745,010¥

614,834¥

239,648,598

Liabilities and Unitholders' Equity
Liabilities
Current liabilities:
Trade and other payables¥

19,000,000

Short-term debt
Deposits received
Rents received in advance728,71124,000,000

68,644

6,411

1,173,618

1,238,195

416,183

177,80921,273,279

26,151,126

Corporate bonds

12,000,000

12,000,000

Long-term debt

67,750,000

62,750,000

Leasehold and security deposits received

10,306,968

10,643,623

Other current liabilities
Total current liabilities

16,665

Other liabilities
Total liabilities

16,272¥

111,346,912¥

111,561,020¥

124,973,750¥

124,973,750

Unitholders' equity
Unitholders' capital
Units authorized:2,000,000units
Units issued and outstanding:200,000units
As of April 30, 2009 and October 31, 2008, respectively
2,434,458(10,110)Retained earnings
Unrealized gain from deferred hedge transactions

127,398,098

Total unitholders' equity
Total liabilities and unitholders' equity

3,123,699(9,872)¥

238,745,010

128,087,577¥

239,648,598

See notes to financial statements

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STATEMENTS OF INCOME AND RETAINED EARNINGSFor the period from May 1, 2008 to October 31, 2008, and the period from November 1, 2008 to April 30, 2009

In thousands of yen
From November 1, 2008
to April 30, 2009

From May 1, 2008
to October 31, 2008

Operating Revenues:
Rental revenues¥

8,204,122¥

8,156,517-

299,7178,204,122

8,456,234

Property-related expenses

3,603,207

3,678,720

Loss on sale of real estate

492,463-

Asset management fees

434,811442,470

Administrative service and custodian fees

78,432

74,276

Other operating expenses

132,023

116,030

4,740,936

4,311,495

Profit on sale of real estate
Total operating revenues
Operating Expenses:

Total operating expenses
Operating income¥

3,463,186¥

4,144,738¥

858,419¥803,790

Non-Operating Expenses:
Interest expense

107,828

145,680

Amortization of organization costs

5,089

5,090

Amortization of unit issuance costs

41,46941,469Amortization of corporate bond issuance costs

5,782

5,878

Others, net

9,270

18,4252,435,329

3,124,407

970

793

2,434,359

3,123,614

99

85

Financing related expense

Income before income taxes
Income taxes
Net income
Retained earnings at the beginning of period
Retained earnings at the end of period¥

2,434,458¥

3,123,699

See notes to financial statements

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Statements of Changes OF Unitholders’ Equity
For the period from May 1, 2008 to October 31, 2008 and the period from November 1, 2008 to April 30, 2009

In thousands of yen
Unitholders' Equity
Unitholders'
capitalBalance as of May 1, 2008¥

124,973,750

Retainedearnings¥

3,342,285

Unrealized
gain fromdeferred hedgetransactions¥(1,873)

Total¥

128,314,162

Changes during the fiscal period
New unit issuance

-

-

-

-

Payment of dividends-(3,342,200)-(3,342,200)

Net income-

3,123,614-

3,123,614

Interest-rate swap--

(7,998)(7,998)-(218,586)(7,998)(226,584)

Total changes
during the fiscal period
Balance as of October 31, 2008¥

124,973,750¥

3,123,699¥(9,872)¥

128,087,577

Changes during the fiscal period
New unit issuance

-

-

-

-

Payment of dividends-(3,123,600)-(3,123,600)

Net income-

2,434,359-

2,434,359

Interest-rate swap

-

-

(238)

(238)

-

(689,241)(238)(689,479)

Total changes
during the fiscal period
Balance as of April 30, 2009¥

124,973,750¥

2,434,458¥(10,110)¥

127,398,098

See notes to financial statements

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Notes to Financial Statements
For the period from May 1, 2008 to October 31, 2008, and the period from November 1, 2008 to April 30, 2009

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Realty Investment Corporation (“the Investment Corporation”) is a real estate investment corporation
whose units are listed on the Tokyo Stock Exchange. The Investment Corporation is engaged in ownership andoperation of selected office buildings, residential and retail properties in Japan. The Investment Corporation
was incorporated as an investment corporation under the Law Concerning Investment Trusts and Investment
Corporations of Japan, or the Investment Trust Law. Pursuant to this law, the Investment Corporation isexternally managed by a registered asset management company, Kenedix REIT Management, Inc. ("the AssetManagement Company"), a subsidiary of Kenedix, Inc. (“Kenedix”).
On May 6, 2005, the Investment Corporation was originally formed with ¥200 million of initial capital contributions
from Kenedix, the Asset Management Company and their executives and employees. On July 20, 2005, theInvestment Corporation raised ¥41,869 million of equity capital through an initial public offering of 75,000
investment units and was listed on the J-REIT section of the Tokyo Stock Exchange on the following day.
On August 1, 2005, 29 properties with an aggregate purchase price of ¥61,083 million were acquired with additional
debt proceeds of ¥23,000 million and substantial operations of the Investment Corporation were commenced fromthat date.
On August 16, 2005, the Investment Corporation completed third-party allotment of 3,970 investment units,
generating an additional ¥2,216 million. Subsequent to that, the Investment Corporation acquired 2 additional
properties in September, 2005. During the period ended April 30, 2006, the Investment Corporation acquired 4
additional properties by utilizing internal cash and bank borrowings.
On May 1, 2006, the Investment Corporation raised ¥42,172 million of equity capital through a public offering of
73,660 investment units and 26 properties with an aggregate purchase price of ¥58,033 million were acquired withadditional debt proceeds of ¥16,000 million.
On May 26, 2006, the Investment Corporation completed third-party allotment of 3,970 investment units,
generating an additional ¥2,273 million. During the period ended October 31, 2006, the Investment Corporation
sold 2 properties and acquired 5 properties.
On March 15, 2007, the Investment Corporation issued corporate bonds. Their total amount is ¥12,000 million andterms are five years and ten years.
On February 1, 2008, the Investment Corporation sold 23 residential properties (initial total acquisition price of¥30,343 million) to a wholly owned subsidiary of Kenedix and acquired 9 office buildings (total acquisition price of¥31,980 million) from a wholly owned subsidiary of Kenedix. In addition, the Investment Corporation acquired 5
office buildings (total acquisition price of ¥14,121 million), during the period ended April 30, 2008.
During the period ended October 31, 2008, the Investment Corporation acquired 3 properties by utilizing internal
cash and bank borrowings, and sold 2 properties.
During the period ended April 30, 2009, the Investment Corporation sold 2 properties. As of April 30, 2009,
the Investment Corporation had total unitholders’ capital of ¥124,974 million with 200,000 investment units
outstanding. The Investment Corporation owned a portfolio of 67 properties with total acquisition price of¥218,999 million containing total leasable area of 250,364m2. The occupancy ratio was 95.7%. The portfolio of
67 properties consists of 58 office buildings, 7 residential properties and 2 central urban retail properties; 57
properties are located in the Tokyo Metropolitan Area and 10 properties are located in Other Regional Areas.

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Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in theInvestment Trust Law of Japan, the Japanese Corporation Law, the Financial Instruments and Exchange Law ofJapan and related regulations, and in conformity with accounting principles and practices generally acceptedin Japan (“Japanese GAAP”), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards or accounting principles generally accepted in the
United States of America.
The accompanying financial statements are basically a translation of the audited financial statements thatwere prepared for Japanese domestic purposes from the accounts and records maintained by the Investment
Corporation. In preparing the accompanying financial statements, relevant notes have been added and certain
reclassifications have been made from the financial statements issued domestically in order to present them ina form that is more familiar to readers outside Japan. The Investment Corporation’s fiscal period is a six-month
period which ends at the end of April and October of each year, respectively. The Investment Corporation does
not prepare consolidated financial statements because it has no subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a) Property and Equipment
Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line
basis over the estimated useful lives of the assets ranging as stated below:
From November 1, 2008 to April 30, 2009

From May 1, 2008 to October 31, 2008

Buildings and structures

2-49 years

2-49 years

Machinery and equipment

3-17 years

3-17 years

Tools, furniture and fixtures

3-20years

3-20 years(b) Organization Costs
Organization costs are amortized over a period of five years, comprised of ten fiscal periods, with an equal amountamortized in each fiscal period.

(c) Unit Issuance Costs
Unit issuance costs are amortized over a period of three years under the straight-line method.

(d) Corporate Bond Issuance Costs
Corporate bond issuance costs are amortized over a loan period under the straight-line method.

(e) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial
properties in Japan, all assets and liabilities within trust are recorded in the relevant balance sheet and income
statement accounts.

(f) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating
revenues including utility charge reimbursements, parking space rental revenues and other miscellaneous
revenues. Rental revenues are generally recognized on an accrual basis over the life of each lease. Utility charge
reimbursements are recognized when earned and their amounts can be reasonably estimated. Reimbursementsfrom tenants including utility charge reimbursements are recorded on a gross basis and such amounts arerecorded both as revenue and expense during the fiscal period, respectively.

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Notes to Financial Statements(g) Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposedon properties on a calendar year basis. Under the Japanese tax rule, the seller of the property at the time ofdisposal is liable for these taxes on the property from the date of disposal to the end of the calendar year in which
the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued property-related
tax liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related
taxes related to the period following the purchase date of each property through the end of the calendar year. The
amounts of those allocated portions of the property-related taxes are capitalized as part of the acquisition costsof the related properties. In subsequent calendar years, such property-related taxes are charged as operating
expenses in the fiscal period in which the installments of such taxes are paid to the relevant tax authorities.

(h) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements andincome tax bases of assets and liabilities using the statutory tax rates.

(i) Derivative Financial Instruments
The Investment Corporation utilizes interest-rate swap agreements as derivative financial instruments only for the
purpose of hedging its exposure to changes in interest rates. The Investment Corporation deferred recognitionof gains or losses resulting from changes in fair value of interest-rate swap agreements because its interest-rate
swap agreements met the criteria for deferral hedging accounting. But, the Investment Corporation adopted
special treatment for interest-swap agreements if its interest-rate swap agreements met the criteria for hedging
accounting under this treatment, the net amount to be paid or received under the interest rate swap contract is
added to or deducted from the interest on the assets or liabilities for which the swap contract was executed.

(j) Rounding of Amounts Presented
Amounts have been truncated in the Japanese financial statements prepared in accordance with Japanese GAAP
and filed with regulatory authorities in Japan, whereas amounts have been rounded to the nearest million in theaccompanying financial statements. Totals shown in the accompanying financial statements do not necessarily
agree with the sums of the individual amounts.

3. SCHEDULE OF PROPERTY
In millions of yen
As of April 30, 2009
Acquisition
costs

Accumulated
depreciation

As of October 31, 2008

Book value

Acquisition
costs

Accumulated
depreciation

Book value¥153,830--¥ 153,830¥155,907-¥ 155,907

74,329¥7,13367,19674,546¥5,89068,656

Machinery and equipment

901

290

611

906

241

665

Tools, furniture and fixtures

380

121

259

382

100

282

¥ 229,440¥ 7,544¥ 221,896¥ 231,740¥ 6,230¥ 225,510

Land
Buildings and structures

Total

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4. SHORT-TERM AND LONG-TERM DEBTS
The following summarizes short-term and long term debt outstanding as of April 30, 2009:(As of April 30, 2009)Classification

Short-term debt

Current portion of long-term debt

Drawdown date

Repayment date

Weighted-averageinterest rate

October 31, 2008

October 30, 20091.16%

¥ 1,500

October 31, 2008

October 31, 2009

1.52%

1,000

November 4, 2008

November 2, 2009

1.16%

1,000

December 8, 2008

December 8, 2009

1.52%

500
1,000

January 13, 2009

January 13, 2010

1.38%

February 27, 2009

February 26, 2010

1.12%

500

April 30, 2009

October 30, 2009

1.91%

2,500

April 30, 2009

April 30, 2010

1.91%

2,000

October 31, 2007

October 31, 2009

1.34%

2,000

April 25, 2008

October 25, 2009

1.56%

1,000

April 25, 2008

October 25, 2009

1.46%

1,500

April 2, 2007

April 2, 2010

1.57%

2,000

July 31, 2008

January 31, 2010

1.68%

SubtotalLong-term debt

Balance(In millions of yen)

2,500
¥ 19,000

August 1, 2005

July 31 ,2010

1.29%¥ 9,500

May 1, 2006

April 30, 2011

2.20%

2,500

May 1, 2006

April 30, 2016

2.73%

5,000

July 14, 2006

July 13, 2011

2.15%

1,000

September 1, 2006

August 31, 2013

2.12%

3,000

December 1, 2006

November 30, 2011

1.96%

2,500

April 2, 2007

April 2, 2012

1.88%

2,000

April 17, 2007

April 16, 2011

1.65%

1,500

January 10, 2008

January 10, 2012

1.50%

2,500

February 29, 2008

February 28, 2011

1.37%

2,000

February 29, 2008

August 31, 2011

1.43%

1,500

March 31, 2008

September 30, 2011

1.61%

3,000

March 31, 2008

September 30, 2011

1.56%

2,000

May 1, 2008

November 1, 2011

1.91%

1,000

June 30, 2008

February 28, 2011

1.99%

1,000

June 30, 2008

June 30, 2012

2.15%

1,500

June 30, 2008

December 28, 2012

2.26%

3,000

July 15, 2008

March 31, 2011

1.87%

2,000

July 31, 2008

January 31, 2011

1.87%

3,500

July 31, 2008

July 31, 2011

1.99%

3,500

September 1, 2008

September 1, 2011

1.78%

1,000

September 22, 2008

March 22, 2011

1.71%

1,250

September 30, 2008

March 31, 2011

1.82%

2,000

October 31, 2008

October 31, 2010

1.57%

500

February 27, 2009

February 29, 2012

2.07%

500

February 27, 2009

August 31, 2012

2.04%

1,000

April 30, 2009

April 28, 2011

2.23%

1,500

April 30, 2009

April 28, 2011

2.23%

1,000

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Notes to Financial Statements(As of April 30, 2009)Classification
Long-term debt

Repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

April 30, 2009

October 31, 2011

2.51%

3,500

April 30, 2009

April 27, 2012

2.51%

Drawdown date

Subtotal
Corporate bonds

2,000¥ 67,750

March 15, 2007

March 15, 2012

1.74%

March 15, 2007

March 15, 2017

2.37%

Subtotal¥ 9,000
3,000¥ 12,000

Total¥ 98,750

5. LINE OF CREDIT
The Investment Corporation established credit commitment lines with two lenders. The total available
borrowings under the commitment line agreements are ¥5 billion yen. The Investment Corporation had an
outstanding balance of ¥5 billion yen as of April 30, 2009 and therefore fully utilized the maximum amount of thecommitment lines.
The commitment period with The Bank of Tokyo-Mitsubishi UFJ, Ltd. under the ¥2.5 billion commitmentline agreement has already expired and it matures March 31, 2011 in accordance with the memorandum of
understanding executed on September 26, 2008.
The commitment period with Citibank Japan, Ltd. under the ¥2.5 billion commitment line agreement has expired
and the maturity date has already passed without any renewal.

6. ASSETS PLEDGED AS COLLATERAL AND SECURED LOANS PAYABLE(As of April 30, 2009)

Assets pledged as collateral
Cash and bank deposits

In thousands of yen¥4,821,046

Land¥105,959,738

Buildings and structures¥49,913,721

Machinery and equipment¥548,396

Tools, furniture and fixtures¥138,626

Other assets
Total¥1,383¥161,382,910

Secured loans payable
Short-term loans debt

¥19,000,000

Long-term loans debt

¥67,750,000

Total¥86,750,000

7. PER UNIT INFORMATIONThe net asset value per unit as of April 30, 2009 and October 31, 2008 was ¥636,990 and ¥640,437. Net income perunit as of April 30, 2009 and October 31, 2008 was ¥12,171 and ¥15,618.
The number of units outstanding at end of period of 200,000 was used for the computation of the amount of net
asset value per unit as of April 30, 2009 and October 31, 2008.
The weighted average number of units outstanding of 200,000 was used for the computation of the amount of net
income per unit as of April 30, 2009 and October 31, 2008.

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8. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately
40%. However, the Investment Corporation may deduct from its taxable income amounts distributed to its
unitholders, provided the requirements are met under the Special Taxation Measure Law of Japan. Under thislaw, the Investment Corporation must meet a number of tax requirements, including a requirement it currently
distribute in excess of 90% of its net income for the fiscal period in order to be able to deduct such amounts. If
the Investment Corporation does not satisfy all of the requirements, the entire taxable income of the Investment
Corporation will be subject to regular corporate income taxes. Since the Investment Corporation distributed
approximately 100% of its distributable income in the form of cash distributions totaling ¥2,434 million and ¥3,124
million for the periods ended April 30, 2009 and October 31, 2008. Such distributions were treated as deductible
distributions for purposes of corporate income taxes. The effective tax rate on the Investment Corporation’s
income was 0.04% and 0.03% for the periods ended April 30, 2009 and October 31, 2008. The following summarizes
the significant difference between the statutory tax rate and the effective tax rate:

Statutory tax rate

From November 1, 2008
to April 30, 200939.33%

From May 1, 2008
to October 31, 2008
39.39%(39.31%)(39.38%)

Other

0.02%

0.02%

Effective tax rate

0.04%

0.03%

Deductible cash distributions

9. UNITHOLDERS’ EQUITYThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Law. The
entire amount of the issue price of new units is designated as stated capital. The Investment Corporation isrequired to maintain net assets of at least ¥50 million as required by the Investment Trust Law.

10. RELATED-PARTY TRANSACTIONSTransactions with Kenedix REIT Management, Inc.
Kenedix REIT Management, Inc., subsidiary of Kenedix, provides the Investment Corporation with property
management services and related services. For these services, the Investment Corporation pays Kenedix
REIT Management, Inc. property management fees in accordance with the terms of its Property Management
Agreements. For these services, The Investment Corporation paid ¥324 million to Kenedix REIT Management, Inc.

11. B
 REAKDOWN OF RENTAL AND OTHER OPERATING REVENUES AND PROPERTYRELATED EXPENSES
Rental and other operating revenues and property-related expenses for the periods from November 1, 2008 to
April 30, 2009 and from May 1, 2008 to October 31, 2008 consist of the following:
In thousands of yen
From November 1, 2008
to April 30, 2009

From May 1, 2008
to October 31, 2008

Rental and other operating revenues:¥ 5,985,836¥ 5,847,510

Common area charges

1,246,786

1,263,583

Subtotal

7,232,622

7,111,093

Rental revenues

Others:Kenedix Realty Investment Corporation ❘ 28

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Notes to Financial Statements

Parking space rental revenues

241,962250,006

Utility charge reimbursement559,130

668,719

Miscellaneous

170,408

126,700

971,500

1,045,424

Total rental and other operating revenues¥ 8,204,122¥ 8,156,517

Property management fees and facility management fees¥¥

Subtotal

799,004

792,077

1,429,329

1,445,267

Utilities

578,389

611,722Taxes

494,867

406,439

Insurance

16,533

17,035

Repairs and maintenance

138,371

188,401

Trust fees

45,27446,904

OthersDepreciation

101,440

163,023

Loss on retirement of fixed assets

-

7,853

Total property-related expenses¥ 3,603,207¥ 3,678,720

Profit on sale of real estate:¥ 5,578,810

Revenue from sale of investment properties-

Cost of investment properties

5,100,280
178,813

Other sales expenses
Profit on sale of real estate¥

299,717

Loss on sale of real estate
Revenue from sale of investment properties¥ 2,670,000

Other sales expenses
Loss on sale of real estate-

3,108,892

Cost of investment properties¥

53,571
492,463

12. LEASESThe Investment Corporation, as lessor, has entered into leases whose fixed monthly rents are due in advancewith lease term of generally two years for office buildings and residential properties and with lease term ranging
from two to ten years for retail properties. The future minimum rental revenues under existing non-cancelable
operating leases as of April 30, 2009 and October 31, 2008 are as follows:
In thousands of yen
As of April 30, 2009

As of October 31, 2008

Due within one year

¥ 1,314,069¥ 1,493,056

Due after one year

7,930,499

8,487,580¥ 9,244,568¥ 9,980,637

Total

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13. DERIVATIVES AND HEDGE ACCOUNTINGThe Investment Corporation has entered into interest-rate swap agreements with several Japanese financial
institutions to hedge its variable rate long-term debt obligations. The Investment Corporation utilizes interestrate swap agreements, which are derivative financial instruments, only for the purpose of mitigating future risksof fluctuations of interest rates, but does not enter into such transactions for speculative or trading purposes. The
Investment Corporation entered into such derivative transactions to hedge risk in accordance with its Articles ofIncorporation and the established risk management policies of the Asset Management Company.
The following summarizes the notional principal amounts and the estimated unrealized loss from interest rate
swap contracts as of April 30, 2009:
The estimated unrealized loss does not include the interest rate swap contracts that met the criteria for the
special treatment.
(As of April 30, 2009)
Type
Interest-rate swap:
Fixed rate payable and floating rate receivable

Notional amount

Unrealized loss

¥29,500 million¥(17 million)

14. PROPERTY INFORMATION
Details of the property portfolio as of April 30, 2009 were as follows:
Type

Office Buildings

Residential Properties

Central Urban
Retail Properties

Tokyo
Metropolitan
Area

Other Regional
Areas

Tokyo
Metropolitan
Area

Other Regional
Areas

Tokyo
Metropolitan
Area

49

9

6

1

2

¥165,246¥28,665¥10,909¥1,800¥12,380

75.45%

13.09%

4.98%

0.82%

5.65%

Net book value

168,354

28,581

10,751

1,877

12,620Appraisal value at year end

166,451

25,844

9,768

1,510

12,88076.90%

11.94%

4.51%

0.70%

5.95%

Location
Number of properties

Property information (In millions of yen)
Acquisition price
Percentage of total acquisition costs

Percentage of total appraisal value

Financial results for the period ended April 30, 2009 (In thousands of yen)
¥ 6,134,879¥ 1,269,712¥ 348,922¥ 91,072¥ 359,536

Rental revenues

5,430,893

1,080,028

316,503

80,092

325,106

Other revenues

703,986

189,685

32,42010,98034,430Rental and other operating revenues

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Notes to Financial Statements

Office Buildings

Type

Residential Properties

Central Urban
Retail Properties

Location

Tokyo
Metropolitan
Area

Other Regional
Areas

Tokyo
Metropolitan
Area

Other Regional
Areas

Tokyo
Metropolitan
Area

Property-related expenses

1,555,055

433,303

66,10847,24872,166

Property management fees

561,043

175,068

30,917

7,927

24,049Taxes

343,707107,240

16,0308,516

19,373

Utilities

446,068

105,311

4,173

2,202

20,635

Repairs and maintenance

95,432

21,6506,288

13,626

1,375

Insurance

10,038

4,808

858

496

333

Trust fees and other expenses

98,766

19,226

7,842

14,481

6,401

4,579,825

836,410

282,81443,824

287,370

964,821281,524

94,40522,65265,926

3,615,003

554,886

188,40921,172

221,445

Capital expenditures

838,487

45,629

578

838

6,440

NCF (Net Cash Flow)

3,741,337

790,781282,237

42,986

280,930

NOI (Net Operating Income)Depreciation expenses
Operating income from property leasing
activities

A breakdown of property-type as of April 30, 2009 was as follows:				
Area

Balance at the end of period(In millions of yen)

Percentage of
total assets

Tokyo Metropolitan Area

¥168,354

70.5%

Other Regional Areas

28,581

12.0%

196,935

82.5%

Tokyo Metropolitan Area

10,751

4.5%

Other Regional Areas

1,877

0.8%

12,627

5.3%

12,6205.3%¥222,183

93.1%

Bank deposits and other assets¥ 16,562

6.9%

Total assets

238,745100.0%

Total liabilities

111,347

46.6%

Net assets¥127,398

53.4%

Class of assets

Property type
Office Buildings
Subtotal

Property andequipment

Residential Properties
Subtotal
Central Urban Retail
Properties
Total

Tokyo Metropolitan Area				

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STATEMENTS OF CASH FLOWS (Unaudited)
For the period from May 1, 2008 to October 31, 2008 and the period from November 1, 2008 to April 30, 2009

In thousands of yen
From November 1, 2008
to April 30, 2009

From November 1, 2007
to April 30, 2008¥¥

Cash Flows from Operating Activities:
Income before income taxes

2,435,329

3,124,407

Adjustments to reconcile income before income taxes
to net cash provided by operating activities:
1,571,996

1,535,995

Interest expense

858,419803,790

Interest expense

-

7,853

Rental receivables(73,290)(28,275)

Consumption tax refundable

180,365(180,365)

Accrued consumption tax

252,054(179,988)

Trade and other payables(114,984)(66,480)

Rents received in advance(64,577)

65,520Property and equipment due to sale

3,108,890

5,100,280

Others, net(320,267)(151,165)

Subtotal

7,833,935

10,031,573(872,143)(751,791)

Depreciation and amortization

Changes in assets and liabilities:

Cash payments of interest expense

(605)

(769)

6,961,187

9,279,013(923,618)(15,579,837)

Proceeds from leasehold and security deposits received

441,191

1,147,506

Payments of leasehold and security deposits received(777,846)(680,726)

Cash payments of income taxes
Net cash provided by operating activities
Cash Flow from Investing Activities:
Purchases of property and equipment(1,390,000)

-

(563)

(574,468)

Proceeds from restricted bank deposits

820,124

1,299,219

Others, net(1,178)

11,100(1,831,890)(14,377,206)

Proceeds from short-term debt

12,000,000

5,500,000

Payment of short-term debt

(7,000,000)(6,250,000)

Payments of time deposits
Payments of restricted bank deposits

Net cash used in investing activities
Cash Flows from Financing Activities:

Proceeds from long-term debt

9,500,000

22,750,000

Payment of long-term debt

(14,500,000)(13,000,000)

Payment of dividends(3,121,451)(3,340,016)

Net cash (used in) provided by financing activities(3,121,451)

5,659,984

Net change in cash and cash equivalents

2,007,846

561,791

Cash and cash equivalents at the beginning of period

11,703,649

11,141,858

Cash and cash equivalents at the end of period¥

13,711,495¥

11,703,649

See related notes

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STATEMENTS OF CASH FLOWS (Unaudited)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Unaudited)
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which
are highly liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturitiesof three months or less from the date of purchase.

CASH AND CASH EQUIVALENTS (Unaudited)
Cash and cash equivalents consisted of the following as of April 30, 2009 and October 31, 2008:
In thousands of yen
As of April 30, 2009
Cash and bank deposits
Restricted bank deposits held in trust(Note 1)More than 3 months fixed deposits (Note 2)
Cash and cash equivalents

As of October 31, 2008

¥ 15,608,085¥ 13,029,801(506,590)(1,326,152)(1,390,000)-¥ 13,711,495¥ 11,703,649

Notes: 1. Restricted bank deposits held in trust are retained for repayment of tenant leasehold and security deposits
2. More than 3 months fixed deposits are fixed deposits which have deposit terms of more than 3 months

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