Thirty-Ninth Fiscal Period Semi-Annual Report
January 1, 2021−June 30, 2021

Japan Prime Realty Investment Corporation

Message to Our Unitholders
Dear Unitholders,
We at Japan Prime Realty Investment Corporation (JPR) would like to express our sincere gratitude for the continued loyal patronage
you have extended to us.
We also express our deepest condolences to those who have passed away because of the novel coronavirus (COVID-19) infection, andextend our heartfelt sympathies to those who have been stricken with the virus.
Having settled the 39th fiscal period (January 1, 2021 – June 30, 2021), we would like to report on the performance results.
Faced with the situation in which the government repeatedly declared states of emergency since last year, the office market hasremained on a somewhat sluggish tone for some time. At JPR, while steady progress has been made in newly leasing office properties
with relatively small floor spaces, it is taking time to fill vacancies of those with larger floor spaces.
Under such circumstances, JPR posted a period-on-period decrease of 81 million yen in profits for rent business, impacted by suchfactors as contract cancellations by large tenants and grants of temporary rent reductions in accordance with the repeated declarationsof states of emergency by the Japanese government, despite contributions of a property acquired in the previous fiscal period operating
throughout the 39th fiscal period. However, as both rents and occupancy rates generally remained higher than what were assumed, JPR
achieved distribution per unit of 7,657 yen, securely keeping it at a higher level than the initial forecast.
For the 40th fiscal period ending December 2021 and thereafter, we are likely to see various impacts triggered by COVID-19. To
overcome these hardships, we are resolved to accurately respond to social changes and endeavor achieving appropriate asset
management to grasp new opportunities for growth.
We ask you, our unitholders, to extend us continued support of our operations.

Operating Results

JPR’s Responses in Accordance with the Spread of COVID-19
In the 39th fiscal period, tenants serving people’s daily lives, including food supermarkets that adapted to the consumption trends under
the COVID-19 pandemic, performed well. In contrast, restaurant and eatery tenants who were requested to shorten business hours andsuspend serving alcohol are continuing to face decreasing sales. JPR is providing such retail tenants who have suffered sales declines
and other impacts with financial support for business continuity and operational support through sales promotion, comprehensively
considering the requests from relevant government agencies and the impact on its future asset management.
Looking ahead, JPR anticipates temporary rent reductions to a certain degree in accordance with the request for shorter business hours,
but expects that the performance of such tenants will steadily recover thanks to a rebound in demand along with the progress invaccinations.

1Status of Temporary Rent Reductions (Retail Tenants)

39th Fiscal Period Topics
Value Enhancement Works for Enhancing Tenant Satisfaction and Reinforcing
Competitiveness
JPR believes that providing tenants with comfortable spaces should lead to increased tenant satisfaction and help enhance its earnings
and the value of its assets. Accordingly, JPR periodically conducts tenant satisfaction surveys to grasp tenants’ needs and, based on the
results, promotes effective value enhancement works⑤

2

Sale of JPR Hakata Bldg.

Initiatives on Sustainability
For JPR to grow stably over the medium to long term, it is essential to address such social requirements as considerations to theenvironment, society and governance. JPR will continue its endeavors to enhance sustainability, including its initiatives forenvironmental friendliness.

Materialities and SDGs
Based on the corporate philosophy, JPR and the Asset Manager (TRIM) have identified important agendas (materialities) they should
work on, as described below, and also established strategies and goals for 2030. JPR and TRIM will promote their initiatives for
attaining the goals in an endeavor to contribute to the Sustainable Development Goals (SDGs).

3

JPR Included in the MSCI Japan ESG Select Leaders Index
In May 2021, JPR was included in the MSCI Japan ESG Select Leaders Index provided by MSCI. The Index comprises selected
corporations with excellent ESG performance, and has been chosen as one of the indexes for asset management by Japan’s Government
Pension Investment Fund (GPIF).

*The inclusion of JPR in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names in notices thereof,
do not constitute a sponsorship, endorsement or promotion of JPR by MSCI or any of its affiliates. The MSCI indexes are theexclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.

Initiatives on Environmental Friendliness
Recognizing the importance of addressing environmental issues for real estate investment management, JPR strives to reduce its
environmental footprint by upgrading facilities and improving operation at the properties it owns. It also endeavors to conduct ecofriendly management by giving consideration to the comfort of facility users and biodiversity.

Reduction of CO2 Emissions
With regard to the CO2 emissions in 2020, JPR achieved a reduction of 7.4% annually by working to improve the CO2 emission factor
through switching power suppliers as well as promoting renovations to enhance energy efficiency, such as replacement of lighting
equipment with LED lamps.

Results and Strategy of Reducing CO2 Emissions
JPR is endeavoring on reduction of emissions, aiming to achieve its goal for 2030 (reducing 30% of its CO2 emission intensity). JPR
is taking on a strategic approach toward the goal by periodically reviewing its feasible measures for emission reduction and looking tomore effective measures.

⑨

4

Announcement of Support for TCFDIn May 2021, TRIM announced its support for the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD), which was established by the Financial Stability Board (FSB).

Initiatives on Social Awareness
JPR and TRIM, the Asset Manager, have relationships with a variety of stakeholders that include, on top of the unitholders, the lenders,tenants, local communities, property management companies and the employees of TRIM. We are resolved to conduct business with astrong sense of integrity and responsibility, in order to build a good relationship with the stakeholders over a long term.

Tenant Satisfaction Surveys
Realizing better customer satisfaction of tenants is an important theme for stabilizing cash distributions, as it leads to stable occupancy
over a long term and reduced risks of contract cancellation by tenants. In order to check the level of satisfaction for respective buildings,
TRIM regularly conducts questionnaires for the tenants. Based on the survey results, TRIM works to address the tenant requests as
promptly as possible.

Initiatives on GovernanceIn the belief that it is essential to secure sound and efficient operations of JPR in order to realize its continuous growth, consistentefforts have been made to reinforce and sustain corporate governance of JPR and TRIM, the Asset Manager.

Decision Making Based on Stringent Processes●●●

Upon making decisions on property acquisitions, asset
management and other issues, TRIM conducts stringent
screening and takes other procedures from various
perspectives through designated committees and otherinstitutions.
In particular, material transaction matters conductedwith the sponsors, etc. are screened and verified by theCompliance Committee as to their adequacy andrationality. The Committee employs a unanimous votefor approvals in principle.
An outside attorney has been appointed as a special member of the Compliance Committee.

5

Risk Management●●●

JPR and TRIM have established an effective risk
management system, and endeavor to avoid occurrence ofrisks related to investment management and address risks
in case they occur.
In order to enhance and reinforce risk management
activities, JPR and TRIM continuously work to identify,
assess and respond to risks and monitor and improve thesituation.
In conducting information management, TRIM
implements safety measures against various threats andhas prepared contingency plans to prepare for failures, etc.

Recognition by External Bodies
JPR is endeavoring to enhance energy use efficiency and safety and convenience of users from the perspective of environmental
awareness that is increasingly heightened socially. As part of such endeavors, JPR is promoting acquisition of certifications andrecognitions from external assessment bodies in order to objectively monitor the environmental performance of its owned properties.

Status of Acquisition of Environmental Certifications
As part of the measures to enhance the quality of its portfolio, JPR works to obtain sustainability certifications.
JPR is promoting the building of a portfolio that has a smaller environmental footprint and higher sustainability, aiming to achieve its
goal of 80% for the ratio of properties having acquired environmental certifications by 2030.

6

Trends in the Ratio of Properties with Environmental Certifications and Their Total Floor Spaces

CASBEE, which stands for Comprehensive Assessment System for Built
Environment Efficiency, is a system for comprehensively assessing theenvironmental performance of buildings. Efforts to develop and popularize
the system in Japan are being made under the leadership of the Ministry ofLand, Infrastructure, Transport and Tourism. The system comprehensively
assesses the environmental quality of buildings, including indoor comfort andconsideration for the landscape, on top of the aspect of environmental
consideration such as energy saving and the use of materials and equipmentwith a lower environmental burden.
The DBJ Green Building Certification is a certification system to selectsuperior real estate that meets the demand of the times by scoring buildings
based on the scoring model originally developed by Development Bank ofJapan Inc (DBJ). Its purpose is to promote properties that areenvironmentally friendly, equipped to mitigate disaster and prevent crime, as
well as meet the social requirements surrounding real estate from various
stakeholders (“Green Buildings”). The assessment results are indicated infive ranks.
BELS is an abbreviation for Building-Housing Energy-efficiency Labeling
System. It is a performance labeling system created for the purpose that athird-party organization accurately conducts the evaluation and indication ofenergy efficiency performance of non-residential buildings in accordancewith the Assessment Guidelines on Energy Efficiency Performance of Nonresidential Buildings (2013) established by the Ministry of Land,
Infrastructure, Transport and Tourism.
Third-party organizations assess energy-saving performance, etc. based on avariety of measurement criteria, indicating the results by the number of stars(★ to ★★★★★).

Acquisition of GRESB Real Estate Assessment
GRESB is a benchmarking assessment to measure ESG awareness of real estate companies andfunds, as well as the name of organization which runs the assessment system. Of the survey
subjects, GRESB Real Estate Assessment covers real estate companies and funds that are
mainly engaged in managing existing properties.
JPR was designated as “Green Star” for the seventh consecutive year in the 2020 GRESB Real
Estate Assessment. JPR was also granted the highest rank of “5 Stars” in the GRESB Rating,which makes relative assessments in five ranks based on total scores, for the second consecutive
year.

7

1. Overview of Asset Management(1) Changes in Operating Results and Other Management Data

Operating Revenue
Rent revenue – real estate

Million yen

35th Fiscal
Period(Jan. 1, 2019 Jun. 30, 2019)16,101Million yen

15,69516,005

16,363

16,714Gain on sale of real estate

Million yen

405

–

–

414

783

Million yen

8,147

8,320

8,350

8,596

8,515

Million yen

7,349

7,538

7,436

7,611

7,499

Million yen

7,954

7,684

8,013

8,533

8,789

Million yen

7,216

6,915

7,277

7,840

8,121

Million yen

7,216

6,914

7,276

7,839

8,120

Million yen

452,366

453,467

473,186

484,573484,323

Reference
Information

Financial Indices

Cash Distribution per
Unit, etc.

Assets, etc.

Operating Performance

Fiscal Period

Operating Expenses
Expenses related to rent business
Operating Income
Ordinary Income
Net Income
Total Assets(Period-on-period variation)
Interest-bearing Debts
Total Unitholders Equity(Period-on-period variation)
Unitholders' Capital
Total Cash Distributions
Dividend payout ratio
Number of Units Outstanding
Total Unitholders' Equity per unit
Cash Distribution per Unit
Distribution amountExceeding profit distribution amount
Ordinary Income on Total Assets (Note 1)
Annualized (Note 10)
Net Income on Total Unitholders'Equity (Note 2)
Annualized (Note 10)
Total unitholders' equity at
beginning of period
Unitholders' Equity Ratio at End of
Period (Note 3)(Period-on-period variation)
Interest-bearing Debts to Total Assets at
End of Period (Note 4)
DSCR (Note 5)
Net income before interest andamortization (Note 6)
Interest expenses
NOI from Leasing (Note 7)
Annualized NOI yield(Notes 9 and 10)
NCF from Leasing (Note 8)
Annualized NCF yield(Notes 9 and 10)
Investment Properties Owned (Note 11)
Number of Tenants
Total Leasable Floor Space (Note 12)
Occupancy Rate

Unit

%

36th Fiscal
Period(Jul. 1, 2019 Dec. 31, 2019)
16,00537th Fiscal
Period(Jan. 1, 2020 Jun. 30, 2020)
16,36338th Fiscal
Period(Jul. 1, 2020 Dec. 31, 2020)
17,12939th Fiscal
Period(Jan. 1, 2021 Jun. 30, 2021)
17,305
16,521(+1.2)(+0.2)(+4.3)(+2.4)(-0.1)

Million yen

185,020

185,020

187,020

196,520

196,500

Million yen

239,166

239,269

255,838

256,399

257,093(+0.2)(+0.0)(+6.9)(+0.2)(+0.3)

Million yen

231,653

231,653

247,860

247,860

247,860

Million yen

6,811

6,916

7,277

7,426

7,337

%

94.3

100.0

100.0

94.7

90.3

Units

923,000

923,000

958,250

958,250

958,250

Yen

259,118

259,230

266,984

267,570

268,295

Yen

7,380

7,493

7,595

7,750

7,657

Yen

7,380

7,493

7,595

7,750

7,657

Yen

–

–

–

–

–

%

1.6

1.5

1.6

1.6

1.7

%

3.2

3.0

3.2

3.2

3.4

%

3.0

2.9

2.9

3.1

3.2

%

6.1

5.7

5.9

6.1

6.4

238,712239,166

239,269

255,838

256,399

52.9

52.8

54.1

52.9

53.1

(-0.5)(-0.1)(+1.3)(-1.2)(+0.2)

%

40.9

40.8

39.5

40.6

40.6

Times

12.5

13.2

14.1

14.6

14.6

Million yen

9,536

9,620

10,015

10,208

10,132%Million yen%

Million yen

760

731

710

697

694

Million yen

10,311

10,441

10,954

11,188

11,121

%

4.7

4.7

4.8

4.7

4.8

Million yen

8,986

8,858

9,574

9,534

9,751

%

4.1

4.0

4.2

4.0

4.2

63

63

65

66

65

757

760

851

857

804

m2

480,277.86

480,284.17

499,269.77

501,162.78

496,876.92

%

98.6

99.6

99.7

99.3

98.1

(Note 1) Ordinary income / (total assets at beginning of period + total assets at end of period) / 2(Note 2) Net income / (total unitholders' equity at beginning of period + total unitholders' equity at end of period) / 2(Note 3) Total unitholders' equity at end of period / total assets at end of period x 100(Note 4) Interest-bearing debts at end of period / total assets at end of period x 100(Note 5) Net income before interest and amortization / interest expenses (including interest expenses on investment corporation bonds)(Note 6) Income before income taxes - gain on sale of real estate + loss on sale of real estate + extraordinary loss + interest expenses (including interest expenses oninvestment corporation bonds) + depreciation(Note 7) (Real estate rental revenues - real estate rental expenses) + depreciation(Note 8) NOI from leasing - capital expenditures8

(Note 9) Annualized NOI from leasing / property acquisition price (35th fiscal period: ¥444.77 billion, 36th fiscal period: ¥439.52 billion, 37th fiscal period: ¥457.14 billion,
38th fiscal period:¥468.54 billion and 39th fiscal period:¥467.52 billion)
Annualized NCF from leasing / property acquisition price(Note 10) Annualization is based on 365 days for a year and calculated by using the following management days: 35th fiscal period: 181 days, 36th fiscal period: 184 days,
37th fiscal period: 182 days, 38th fiscal period: 184 days and 39th fiscal period: 181 days.
(Note 11) Properties acquired at multiple times are calculated as one property.
(Note 12) Total leasable floor space in this table indicates the contracted area.
(Note 13) Any ratio indicated on financial indices is rounded to the first decimal place (except for the dividend payout ratio, which is rounded down to the first decimal place).

(2) 39th Fiscal Period Asset Management
1) Milestones of JPR
Japan Prime Realty Investment Corporation (JPR) was established on September 14, 2001 under the Act on Investment Trusts andInvestment Corporations (hereafter, the Investment Trusts Act), and was listed on the Tokyo Stock Exchange Real Estate Investment
Trust Section (securities code: 8955) on June 14, 2002 with 289,600 outstanding investment units. With the subsequently
implemented public offerings and other capital raising measures by JPR, the number of investment units issued and outstanding
totals 958,250 units as of the end of the 39th fiscal period (June 30, 2021). JPR has assigned the asset management of its portfolio
to Tokyo Realty Investment Management, Inc. (hereafter, the Asset Manager), through which JPR aims to maximize unitholder
value by efficiently managing the portfolio primarily comprising office properties and retail properties.
2) Management Environment
During the 39th fiscal period, the Japanese economy remained in a severe situation due to the impact of COVID-19. Some areas
showed a pickup, however, as exports increased moderately and production was on a recovery path. Corporate earnings
demonstrated recovery, mainly within manufacturing industries, although weakness was observed in some industries. Overseas
economies also continued to show pickup amid a severe situation. In spite of these developments, however, with the number of
COVID-19 cases showing signs of re-expansion both in and outside Japan toward the end of the fiscal period under review, there
are concerns about the negative impact on the economy.
The Office Property Leasing Market
In the office property leasing market, the vacancy rate increased and rent levels were on a downward trend, primarily in Central
Tokyo, under the impact of COVID-19.
The Retail Property Leasing Market
Although a pickup was seen temporarily at urban retail properties which JPR targets for investment, it is our concern that restaurants
and eateries will be negatively impacted by the state-of-emergency declarations and focused anti-infection measures against
COVID-19 issued by the government for Tokyo and several other prefectures in the 39th fiscal period.
The For-Sale Real Estate Market
In the for-sale real estate market, active transactions continued to take place against the backdrop of recovery in stock prices andlow interest rates, etc. Investors have maintained a cautious attitude, however, for hotels and urban retail properties that have been
hard hit by COVID-19. For office properties, on the other hand, blue-chip properties in which JPR targets for investment are in
short supply while investors both in and outside Japan still show a strong appetite to acquire them. Thus, with low-yield transactions
continuing to prevail, the acquisition environment remains harsh. Accordingly, investors continue to look for ways to effectively
acquire properties, such as by diversifying the target assets for investment and conducting asset replacement.
3) Portfolio Management Status
Acquisition of New Properties and Asset Replacement
JPR investigates possible investments mainly in office properties in the Tokyo area, plus office properties in regional cities andretail properties, etc., with the primary aim of improving the quality of the portfolio and achieving stable growth of earnings while
giving attention to balancing the diversification of the portfolio, both in terms of location and asset type.
During the 39th fiscal period, JPR investigated possible investments primarily in office properties in the Tokyo area, but noacquisition was closed and completed. As JPR sold the remaining 65% ownership interest in JPR Hakata Bldg. (sale price of therelevant ownership interest: 2,660 million yen) in March 2021, the balance of JPR’s assets under management totaled 65 properties,or 465.6 billion yen on an acquisition price basis as of the end of June 2021, with the total leasable floor space standing at 496,876
m2 and the number of tenants at 804.

9

Operational Management of Portfolio
In the office property leasing market in the 39th fiscal period, the vacancy rate increased and rent levels were on a downward trend
under the impact of COVID-19, as stated above in Management Environment, and close attention must be paid. Under suchcircumstances, JPR endeavored to attract new tenants through strategic leasing activities and enhance the satisfaction of existing
tenants by maintaining close cooperation with property management companies and brokers, with an aim to secure stable earnings
across the entire portfolio as well as its occupancy rate. As a result of these efforts, the occupancy rate at the end of the 39th fiscal
period was kept at a high level, although it decreased 1.2 points period-on-period to 98.1%.
In terms of property management, based on JPR’s brand concept A/3S (Amenity/Service, Safety and Save Energy), JPR continued
to proactively implement value enhancement works based on tenant needs with an aim to create spaces where the workers feelsatisfaction. As an endeavor to implement energy-saving measures, JPR conducted renovation of air-conditioning systems andreplacement of lighting equipment with LED lamps, which are expected to be effective for the endeavor, at its multiple properties.
Moreover, as its initiatives on environmental issues, JPR has continuously obtained environmental certifications. As of June 30,
2021, JPR has acquired DBJ Green Building Certification*1 for 14 properties and CASBEE for Building Certification*2 for 22
properties (including six newly certified properties). In addition, JPR has acquired BELS*3 certification for two of its properties
including one newly certified property. On top of these certifications JPR acquired, its endeavors on environmental issues were so
acknowledged that it was designated as “Green Star” in the GRESB*4 Real Estate Assessment for 2020, marking the seventh
consecutive year of recognition with the highest ranking in the survey. JPR has also been granted the highest rank of “5 Stars” in
the GRESB Rating, which makes relative assessment based on total scores, for two consecutive years.
*1 The DBJ Green Building Certification is a certification system to select superior real estate that meets the demand of the times by scoring buildings based on thescoring model originally developed by Development Bank of Japan Inc. Its purpose is to promote properties that are environmentally friendly, equipped to mitigate
disasters and prevent crime, as well as meet the social requirements surrounding real estate from various stakeholders (“Green Buildings”).
*2 CASBEE, which stands for Comprehensive Assessment System for Built Environment Efficiency, is a system for comprehensively assessing the environmental
performance of buildings. Efforts to develop and popularize the system in Japan are being carried out under the leadership of the Ministry of Land, Infrastructure,
Transport and Tourism.
*3 BELS is an abbreviation for Building-Housing Energy-efficiency Labeling System. It is a performance labeling system created for the purpose that a third-party
organization accurately conducts the evaluation and indication of energy efficiency performance of non-residential buildings in accordance with the Assessment
Guidelines on Energy Efficiency Performance of Non-residential Buildings (2013) established by the Ministry of Land, Infrastructure, Transport and Tourism.
*4 GRESB is an annual benchmarking assessment to measure ESG (Environmental, Social and Governance) awareness of real estate companies and funds, as well as
the name of the organization which runs the assessment system. It was founded in 2009 primarily by major European pension fund groups. Of the survey subjects,
GRESB Real Estate Assessment covers real estate companies and funds that are mainly engaged in managing existing properties.

Fund Procurement
JPR focuses its endeavors on debt financing with an emphasis placed on lengthening debt maturity and diversifying repayment
dates, in an effort to make its financial base more solid and stronger against the backdrop of the favorable fund procurement
environment and low interest rates.
JPR borrowed 13.8 billion yen to fund the refinancing of interest-bearing debts it repaid during the 39th fiscal period. The average
maturity of and the average interest on the new interest-bearing debts stood at 9.7 years and 0.59%, respectively, in contrast to 5.6
years and 0.66% for the relevant interest-bearing debts before refinancing (excluding short-term debts).
As of the end of the 39th fiscal period, the balance of interest-bearing debts totaled 196.5 billion yen, with a balance of borrowingsof 161.0 billion yen and a balance of investment corporation bonds of 35.5 billion yen. The ratio of interest-bearing debt to total
assets (Note 1) was 40.6%, long-term and fixed interest-bearing debt ratio (Note 2) was 99.0%, average debt cost (Note 3) was
0.73% and average maturity (Note 4) was 4.8 years as of the end of the fiscal period.
Moreover, JPR established a commitment line with a credit limit of 24 billion yen with six financial institutions.
The following represents the issuer ratings for JPR as of the end of the 39th fiscal period.
Details of Corporate Credit Ratings as of June 30, 2021
Credit Rating Agency
Rating and Investment Information, Inc.

Corporate Credit Rating
AA- (Stable)

S & P Global Ratings Japan Inc.

Long-term: A (Stable)
Short-term: A-1(Note 1) Ratio of interest-bearing debts to total assets: (balance of borrowings + balance of investment corporation bonds)/ total assets(Note 2) Long-term and fixed interest-bearing debt ratio: long-term, fixed-interest interest-bearing debts / total interest-bearing debts(Note 3) Average debt cost: sum total of interest expenses, interest expenses on 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 investment corporationbond management expenses, divided by the number of business days for each fiscal period and annualized by multiplying by 365 days / average balance ofborrowings and investment corporation bonds for each fiscal period(Note 4) Average maturity is arrived at by calculating a weighted average of maturities from the end of the 39th fiscal period to the repayment deadlines for all
interest-bearing debts based on the balance of each interest-bearing debt.

10

(3) Additional Offerings, etc.
The table below indicates additional offerings, etc. JPR has conducted in the last five years.

Date

Number of Units
Outstanding

Event

Unitholders' Capital(millions of yen)

Remarks

Variation
47,600

Balance
920,600

Variation
20,237

Balance
230,632(Note 1)January 24, 2017

Additional public offering

February 14, 2017

Third-party allotment

2,400

923,000

1,020

231,653(Note 2)

March 3, 2020

Additional public offering

35,250958,250

16,207

247,860(Note 3)(Note 1) New investment units were issued through a public offering at 439,040 yen per unit (underwriting price of 425,152 yen per unit) to fund acquisition of new specificassets and partly repay debts.
(Note 2) New investment units were issued through a third-party allotment at 425,152 yen per unit to fund acquisition of new specific assets and partly repay debts.
(Note 3) New investment units were issued through a public offering at 474,810 yen per unit (underwriting price of 459,790 yen per unit) to fund acquisition of new specified
assets and partly repay debt.

(4) Cash Distributions
With regard to the cash distributions of the 39th fiscal period, JPR decided to distribute part of the retained earnings brought forwardthat had been internally reserved through the 38th fiscal period, with the aim of having the profit distributions deducted as expenses
based on application of the special provision on taxation of investment corporations (Article 67-15 of the Act on Special Measures
Concerning Taxation) and in order to minimize the burden to unitholders incurred by accrual of corporate income tax, etc. JPR alsodecided to internally reserve 783 million yen as reserve for reduction entry from the unappropriated retained earnings, in applicationof the Special Provisions for Taxation in Cases of Repurchase of Specified Assets (Article 65-7 of the Act on Special Measures
Concerning Taxation). As a result, the cash distribution per unit came to 7,657 yen for the 39th fiscal period.
(Thousands of yen unless otherwise indicated)

Fiscal Period

Unappropriated Retained Earnings at End of Period

36th Fiscal
Period37th Fiscal
Period38th Fiscal
Period39th Fiscal
Period(Jan. 1, 2019 Jun. 30, 2019)(Jul. 1, 2019 Dec. 31, 2019)(Jan. 1, 2020 –Jun. 30, 2020)(Jul. 1, 2020 Dec. 31, 2020)(Jan. 1, 2021 –Jun. 30, 2021)

7,229,214

6,926,967

7,287,774

7,849,585

8,129,659

417,474

10,928

9,865

423,148

792,338

Total Cash Distributions

6,811,740

6,916,039

7,277,908

7,426,437

7,337,320(Cash Distribution per Unit)(7,380 yen)

(7,493 yen)

(7,595 yen)

(7,750 yen)

(7,657 yen)

Total Cash Distributions from Net Income

6,811,740

6,916,039

7,277,908

7,426,437

7,337,320(Cash distribution from net income per unit)(7,380 yen)

(7,493 yen)

(7,595 yen)

(7,750 yen)

(7,657 yen)

–

–

–

–

–

(- yen)(- yen)(- yen)(- yen)(- yen)

–

–

–

–

–

(- yen)(- yen)(- yen)(- yen)(- yen)

–

–

–

–

–

(- yen)(- yen)(- yen)(- yen)(- yen)BreakdownInternal Reserves

35th Fiscal
PeriodRepayment of Paid-in Capital(Repayment of paid-in capital per unit)

Of the repayment of paid-in capital, total cash distributions
from the reserve for temporary difference adjustments(Of the repayment of paid-in capital per unit, distribution perunit from the reserve for temporary difference adjustments)
Of the repayment of paid-in capital, total cash distributions
through the reduction in unitholders’ capital for tax purposes(Of the repayment of paid-in capital per unit, distribution perunit through the reduction in unitholders’ capital for tax
purposes)11

(5) Future Management Policies and Vital Issues
Looking ahead, with measures to prevent the spread of COVID-19 implemented and vaccination promoted, the Japanese economy isexpected to continue showing a pickup, supported by the effects of various policies and improvements in overseas economies. However,attention should be paid to the trends of COVID-19, including the repeated declaration of a state of emergency by the Japanese
government, and the impacts of fluctuations in the financial and capital markets, among other factors.
The office property leasing market is anticipated to hit the bottom slightly after the pickup in the economy. Close attention must be
paid, however, to the impact of mass supply of office buildings projected for 2023. In this regard, JPR is resolved to continue its
endeavors to enhance the competitiveness of its owned properties, as it has focused on improving tenant satisfaction through proactive
implementation of value enhancement works and provision of elaborate management services.
In the for-sale real estate market, it has become even more important to discern the growth potential in earnings of respective properties,
while continuously taking into account the impact of COVID-19 on the leasing market. Moreover, given the current situation in which
the low-interest-rate and low-yield environment is maintained, it is necessary to firmly keep the attitude of vigorously selective
investment for implementing real estate investment that assumes possession of properties over the medium to long term.
1) Acquisition of New Properties and Asset Replacement
JPR will continue to make investment focused on office properties in the Tokyo area, with an aim to improve the quality of its
portfolio and enhance its growth potential and stability over the long term. In the for-sale office property market, the purchase cap
rate and expected cap rate levels still stay low, with properties remaining in short supply. Going forward, although close attention
must continuously be paid to the impact of COVID-19, etc., JPR will fully investigate the stability and growth potential of candidate
properties when acquiring them. As for retail properties, etc., JPR will work to invest in strictly selected blue-chip properties thatcan maintain stable revenues at a certain level in order to complement the stability of earnings of the entire portfolio. In doing so,
JPR will have to be more prudent in investigating, paying close attention to the sales trends, etc. of such properties under the
influence of the spread of COVID-19. JPR will continue its endeavors to acquire new properties under reasonable terms bynegotiating prices based on detailed market studies and property due diligence.
Moreover, JPR will continue to make investment decisions after a proactive collection of information through such sources assponsors of TRIM (Tokyo Tatemono Co., Ltd., Yasuda Real Estate Co., Ltd., Taisei Corporation and Meiji Yasuda Life Insurance
Company), accurately following market trends and carefully researching investment value, including the future potential ofcandidate properties.
Furthermore, JPR will also investigate asset replacement by taking into consideration the timing of implementation, in order toimprove the quality of its portfolio and enhance its growth potential over the long term.
2) Management of Portfolio
JPR will aim to secure stable earnings over a medium to long term by working to prevent move-outs of existing tenants, encouragethem to expand office spaces in the same buildings and renew contracts with upward revision of rents through endeavors to enhancetenant satisfaction, while continuously inviting new tenants through strategic leasing activities. Specifically, JPR will conduct
management and operations based on the following policies:- Strengthen coordination with property management companies and respective tenant brokers- Propose leasing terms and conditions in consideration of the current leasing market situations and promote rapid decision making- Conduct strategic value enhancement works with the intent to improve property earnings and increase tenant satisfaction- Reinforce promotion of energy efficiency as well as responses to business continuity plans and environmental friendliness thatcommand high social request- Conduct renovations to enhance energy-saving performance of the properties by utilizing the government’s subsidy programs3) Fund Procurement
In accordance with its basic policy of implementing conservative financial operations that focus on stability, JPR will remain
engaged in conservative leverage control, targeting to basically keep the ratio of interest-bearing debts to total assets at up to 50%.
In debt financing, JPR will endeavor to further lengthen the maturity with a focus on stability in an effort to diversify the repayment
dates and reduce the repayment amount for each fiscal period, with an eye on reducing refinancing risks that may arise in accordancewith future changes in the financial environment. Moreover, JPR intends to work on fund procurement through issuance ofinvestment corporation bonds as it aims to diversify fund procurement means and sources.

12(6) Information Disclosure
Positioning the proactive voluntary disclosure of information as one of its key management policies, JPR voluntarily discloses
information believed to be useful to investment decisions, along with the information disclosure required by the Tokyo Stock Exchange
and set forth by laws and regulations, etc. As a means for implementing voluntary disclosure, JPR is proactively employing its website(http://www.jpr-reit.co.jp/en/) to provide information including monthly occupancy rates of all properties in the portfolio and historical
data, offer expanded information on sustainability and deliver video presentation on financial results sessions for securities analysts.

(7) Significant Subsequent Events
Not applicable132. Overview of the Investment Corporation(1) Unitholders’ Capital
35th Fiscal
Period as ofJune 30, 2019
5,000,000

36th Fiscal
Period as ofDecember 31, 2019
5,000,000

37th Fiscal
Period as ofJune 30, 2020
5,000,000

38th Fiscal
Period as ofDecember 31, 2020
5,000,000

39th Fiscal
Period as ofJune 30, 2021
5,000,000

Total number of units issued andoutstanding

923,000

923,000

958,250

958,250

958,250

Unitholders' capital (millions of yen)

231,653

231,653

247,860

247,860

247,860

Total number of unitholders

10,376

9,841

11,085

10,946

10,531

Total number of authorized units(2) Matters Related to Investment Units (Primary Investors)
The following table shows the ten largest investors according to the percentage of their owned investment units to the total number ofinvestment units outstanding as of the end of the 39th fiscal period.
Name

Address

Number ofPercentage of Total

Owned Units

Units Outstanding (%)

Custody Bank of Japan, Ltd. (Trust Account)

1-8-12 Harumi, Chuo-ku, Tokyo

244,685

25.53

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

2-11-3 Hamamatsucho, Minato-ku, Tokyo

160,193

16.71

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

2-2-2 Otemachi, Chiyoda-ku, Tokyo

37,472

3.91

Tokyo Tatemono Co., Ltd.

1-4-16 Yaesu, Chuo-ku, Tokyo

29,3003.05

Kawasaki Gakuen

577 Matsushima, Kurashiki-shi, Okayama

25,0002.60

Custody Bank of Japan, Ltd. (Securities Investment
Trust Account)

1-8-12 Harumi, Chuo-ku, Tokyo

24,4782.55

Meiji Yasuda Life Insurance Company

2-1-1 Marunouchi, Chiyoda-ku, Tokyo

24,0002.50

JPMorgan Securities Japan Co., Ltd.

Tokyo Building, 2-7-3 Marunouchi,
Chiyoda-ku, Tokyo

14,3501.49

SSBTC CLIENT OMNIBUS ACCOUNT (Standing
proxy: Custody Services Department, Tokyo Branch,
The Hongkong and Shanghai Banking Corporation
Limited)One Lincoln Street, Boston, MA 02111, U.S.A.
(3-11-1 Nihonbashi, Chuo-ku, Tokyo)

13,398

1.39

Custody Bank of Japan, Ltd. (Trust Account 7)

1-8-12 Harumi, Chuo-ku, Tokyo
Total(Note)

12,602

1.31

585,478

61.09

Percentage of total units outstanding is rounded down to the second decimal place.

(3) Items Related to Directors
A. The Executive Officer, Supervising Officers and Independent Auditors as of the end of the 39th fiscal period are as follows.

Position

Name

Other Current Assignments

Yoshihiro Jozaki

President and Chief Executive Officer, Tokyo Realty
Investment Management, Inc.

Masato Denawa

Partner Attorney, Spring Partners

Supervising
Officers (Note 2)

Nobuhisa Kusanagi

Group Representative Partner of GYOSEI Certified
Public Tax & Accountants' Co.
Representative, Nobuhisa Kusanagi Certified Public
Accountant Office

Independent Auditor

EY ShinNihon LLC–

Executive Officer

Total Directors' Fee
during the 39th Fiscal
Period (thousands of yen)–
(Note 1)

Numberof Owned
Units
–
–

4,200

16,500(Note 3)––(Note 1) Yoshihiro Jozaki, Executive Officer, does not receive any compensation from JPR.
(Note 2) Supervising officers may be directors of corporations other than those indicated above, but have no conflict of interest with JPR at those and the above positions.
(Note 3) The independent auditor fees include fees regarding auditing of JPR’s English financial statements and fees regarding preparation of comfort letters for issuanceof investment corporation bonds.

14

B. Policy on Dismissing and Deciding Not to Reappoint the Independent Auditor
The dismissal of independent auditors shall be considered in accordance with the designations of the Investment Trusts Act. The
decision to not reappoint the auditor shall be studied at JPR’s Board of Directors Meetings following comprehensive considerationof circumstances including audit quality, audit fee and other various conditions.

(4) Asset Manager, Asset Custodian and Administrative Agent
The asset manager, asset custodian and administrative agents of JPR at the end of the 39th fiscal period are as follows.

Asset manager

Outsourcing Category

Name
Tokyo Realty Investment Management, Inc.

Asset custodian

Mizuho Trust & Banking Co., Ltd.

Administrative agent (administration, etc. concerning unitholders' list, etc.)

Mizuho Trust & Banking Co., Ltd.

Administrative agent (administration concerning investment corporation
bonds)

Mizuho Bank, Ltd.

15

3. Status of JPR’s Assets Under Management(1) JPR’s Asset Structure
Asset Type

38th Fiscal Period(as of December 31, 2020)

Area

39th Fiscal Period(as of June 30, 2021)

Central Tokyo

Assets owned by JPR(thousands of yen)
98,288,046

Percentage of total
assets (%)
20.3

Assets owned by JPR(thousands of yen)
98,365,928

Percentage of total
assets (%)
20.3

Greater Tokyo

73,476,558

15.2

73,195,537

15.1

Other Cities

19,900,135

4.1

19,853,821

4.1

Central Tokyo

155,950,245

32.2

155,764,625

32.2

Greater Tokyo

49,471,060

10.2

49,248,446

10.2

Other Cities

44,672,408

9.2

42,794,155

8.8

Deposits and otherassets–42,815,071
(–)

8.8
(–)

45,101,021
(–)

9.3
(–)

Total assets–

484,573,526(441,758,455)

100.0(91.2)

484,323,538(439,222,516)

100.0(90.7)

Real estate

Real estate in trust(Note 1) Assets owned by JPR are based on the amounts appropriated on the balance sheets as of the end of the fiscal periods (book values after depreciation for real estate
and real estate in trust).
(Note 2) Figures in parenthesis are portions that practically fall on real estate owned in the object assets.

(2) Major Assets Owned by JPR
The following is an overview of the major assets (ten largest properties by book value at end of period) owned by JPR as of the end of
the 39th fiscal period.
Occupancy Rate(%)

Rate of Monthly
Contracted Rent at
End of Period (%)

Asset Class

11,034.78

100.0

11.7

Office23,987.40

23,987.40

100.0

6.2

Office8,865.71

8,369.66

94.4

3.2

Office18,393,443

5,971.73

5,462.42

91.5

2.4

OfficeBYGS Shinjuku Bldg.

15,382,383

15,227.80

14,755.85

96.9

3.7

OfficeJPR Sendagaya Bldg.

14,706,856

6,177.74

6,177.74

100.0

1.8

OfficeKanematsu Bldg.

14,611,840

8,090.42

8,090.42

100.0

2.6

OfficeSencity Bldg.

13,983,597

13,271.20

13,006.12

98.0

2.9

OfficeShinjuku Square Tower

12,996,916

19,266.38

19,266.38

100.0

2.9

OfficeKawasaki Dice Bldg.

12,950,550

12,087.59

11,820.68

97.8

2.5

Retail, etc.

189,522,881

123,980.75

121,971.45

98.4

39.8

Book Value(thousands of yen)

Leasable Floor
Space (m2)Otemachi Tower (Landwith Leasehold Interest)

38,388,259

11,034.78

Olinas Tower

25,998,984

Shinjuku Center Bldg.

22,110,049

Tokyo Square Garden

Property Name

Total

Leased Floor
Space (m2)(Note 1) Rate of monthly contracted rent at end of period is the rate arrived at by dividing the monthly contracted rent at end of period for each property by the total rents
for all properties.
(Note 2) The tenants of Shinjuku Center Bldg., Tokyo Square Garden, Sencity Bldg., Shinjuku Square Tower and Kawasaki Dice Bldg. have sublet space to a sub-lessee
and a lease agreement has been executed where the rent paid by the tenant fluctuates in accordance with the lease conditions of the sub-lessee. Therefore, theleasable floor space, leased floor space and occupancy rate entered for each of these buildings are the figures concerning the sub-lessees of the tenant.

16(3) Itemized Portfolio Assets
The following table provides an overview of the real estate properties and beneficiary interests in real estate owned by JPR as of theend of the 39th fiscal period (June 30, 2021).

Area Type

Property Name
Kanematsu Bldg.

14-1 Kyobashi 2-chome, Chuo-ku, Tokyo

Kanematsu Bldg. Annex

17-5 Kyobashi 2-chome, Chuo-ku, Tokyo

JPR Ningyo-cho Bldg.

17-4 Nihonbashi Ningyocho 1-chome,
Chuo-ku, Tokyo

Shin-Kojimachi Bldg.

3-3 Kojimachi 4-chome, Chiyoda-ku, TokyoJPR Crest Takebashi Bldg.

21-4, etc., Kanda-Nishikicho 3-chome,
Chiyoda-ku, TokyoMS Shibaura Bldg.

13-23 Shibaura 4-chome, Minato-ku, Tokyo

Gotanda First Bldg.
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Bldg.
OfficeAcross Shinkawa Bldg. Annex

Central Tokyo
Retail, etc.

Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Real estateAppraisal ValueBook Valueas of June 30, 2021
as of June 30, 2021
(thousands of yen)(thousands of yen)
(Note)
14,611,840

14,800,000

2,405,746

3,520,000

2,126,464

2,930,000

2,412,566

4,270,000

3,205,197

3,790,000

10,797,889

15,300,000

2,978,794

4,180,000

5,277,647

4,850,000

2,740,561

5,050,000

12,996,916

14,800,000

15,382,383

20,100,000

Real estate

577,513781,000

Real estate

22,110,049

18,100,000

Real estate

3,808,240

3,170,000

Shinagawa Canal Bldg.

Real estate

1,889,748

2,360,000

Rokubancho Bldg.

2-9, etc., Rokubancho, Chiyoda-ku, Tokyo

2,890,833

3,500,000

JPR Harajuku Bldg.

17-11 Jingumae 6-chome, Shibuya-ku, Tokyo

Real estate
Beneficiaryinterest
Beneficiaryinterest
Real estate

8,768,546

10,500,000

4,850,075

6,810,000

14,706,856

11,900,000

Shinjuku Center Bldg.

JPR Sendagaya Bldg.

11-12 Nihonbashi-Horidomecho 1-chome,
Chuo-ku, Tokyo
23-5 Sendagaya 4-chome, Shibuya-ku, Tokyo

Ginza Sanwa Bldg.
Otemachi Tower (Land with
Leasehold Interest)

6-1 Ginza 4-chome, Chuo-ku, Tokyo
6-6, etc., Otemachi 1-chome, Chiyoda-ku,
Tokyo

Science Plaza-Yonbancho Plaza

9-6, etc., Yonbancho, Chiyoda-ku, Tokyo

Shibadaimon Center Bldg.

10-11 Shibadaimon 1-chome, Minato-ku,
TokyoTokyo Square Garden

1-1 Kyobashi 3-chome, Chuo-ku, TokyoJPR Kojimachi Bldg.

6-1 Kojimachi 5-chome, Chiyoda-ku, Tokyo

Otemachi Financial City North Tower

9-5, Otemachi 1-chome, Chiyoda-ku, Tokyo

JPR Nihonbashi-horidome Bldg.

Real estate
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest

3,678,612

3,750,000

38,388,259

52,500,000

2,777,633

3,320,000

4,165,548

6,290,000

18,393,443

21,400,000

Real estate

5,809,932

6,440,000

Real estate

11,555,675

12,100,000

11,418,103

14,100,000

4,266,200

4,270,000

2,540,802

2,700,000

JPR Shibuya Tower Records Bldg.

22-14 Jinnan 1-chome, Shibuya-ku, TokyoJPR Jingumae 432

32-13 Jingumae 4-chome, Shibuya-ku, Tokyo

Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
(Yurakucho Itocia)
JPR Ginza Namiki-dori Bldg.

1-26, Shinjuku 3-chome, Shinjuku-ku, Tokyo

Beneficiaryinterest
Beneficiaryinterest
Real estate

7-1 Yurakucho 2-chome, Chiyoda-ku, Tokyo

Real estate

3,271,857

3,330,000

5-14 Ginza 5-chome, Chuo-ku, Tokyo
20-8 Kanda Misakicho 2-chome, Chiyoda-ku,
TokyoReal estate
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest

10,143,423

11,100,000

3,183,192

3,480,000

4,178,862

6,930,000

2,214,461

1,830,000

2,347,194

2,350,000

1,399,106

2,380,000

7,223,734

10,300,000

FUNDES Suidobashi
Arca East

2-1 Kinshi 3-chome, Sumida-ku, TokyoJPR Chiba Bldg.

1-7, etc., Shinmachi, Chuo-ku, Chiba, Chiba

JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Office8-1 Nishi-Gotanda 2-chome, Shinagawa-ku,
Tokyo
7-15 Kudan-Minami 4-chome, Chiyoda-ku,
Tokyo
17-1 Higashi-Gotanda 2-chome,
Shinagawa-ku, Tokyo
22-1 Nishi-Shinjuku 6-chome, Shinjuku-ku,
Tokyo
19-1 Shinjuku 2-chome, Shinjuku-ku, Tokyo

Form ofOwnership

16-14 Shinkawa 1-chome, Chuo-ku, Tokyo
25-1 Nishi-Shinjuku 1-chome, Shinjuku-ku,
Tokyo
12-3 Minami-Azabu 2-chome, Minato-ku,
Tokyo
12-33 Konan 2-chome, Minato-ku, Tokyo

Minami Azabu Bldg.

Greater Tokyo

Location

17 Nihon-Odori, Naka-ku, Yokohama,
Kanagawa
19-5, etc., Shinyokohama 3-chome,
Kohoku-ku, Yokohama, Kanagawa

Kawaguchi Center Bldg.

1-8 Honcho 4-chome, Kawaguchi, Saitama

JPR Ueno East Bldg.

3-5 Matsugaya 1-chome, Taito-ku, Tokyo

Real estate

2,880,709

5,520,000

38-5 Akebonocho 2-chome, Tachikawa,Tokyo
5-2 Higashi-Ikebukuro 4-chome, Toshima-ku,
Tokyo
6-1 Kamiooka Nishi 1-chome, Konan-ku,
Yokohama, Kanagawa

Beneficiaryinterest

2,889,106

4,650,000

Real estate

5,166,015

9,900,000

Real estate

5,194,500

7,250,000

Tachikawa Business Center Bldg.
Rise Arena Bldg.
Yume-ooka Office Tower

17

Area Type

Property NameJPR Yokohama Bldg.
Omiya Prime East
Sencity Bldg.
Tanashi ASTA
Cupo-la Main Bldg.

Retail, etc.

Greater Tokyo

OfficeOlinas Tower

JPR Musashikosugi Bldg.
Musashiurawa Shopping Square
Kawasaki Dice Bldg.
FUNDES Ueno
Niigata Ekinan Center Bldg.
Tokyo Tatemono Honmachi Bldg.
JPR Naha Bldg.
Sompo Japan Sendai Bldg.

OfficeOther Cities

Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Dojima Bldg.
JPR Nagoya Fushimi Bldg.
Yakuin Business Garden
JPR Shinsaibashi Bldg.

Retail, etc.

JPR Shinsaibashi West

Location
1-3 Taihei 4-chome, Sumida-ku, Tokyo
5-10 Kitasaiwai 1-chome, Nishi-ku,
Yokohama, Kanagawa
1-1, etc., Shimocho 2-chome, Omiya-ku,
Saitama, Saitama
1000, etc., Shinmachi, Chuo-ku, Chiba-shi,
Chiba,
1-1 Tanashicho 2-chome, Nishitokyo, Tokyo
1-1 Kawaguchi 1-chome, Kawaguchi,
Saitama
420-1,etc., Kosugimachi 3-chome,
Nakahara-ku, Kawasaki, Kanagawa
3-1 Bessho 7-chome, Saitama, Saitama
8-3, etc., Ekimae-Honcho, Kawasaki,
Kanagawa
2-4 Ueno 7-chome, Taito-ku, Tokyo
24 Yoneyama 1-chome, Chuo-ku, Niigata,
Niigata
4-8 Honmachi 3-chome, Chuo-ku, Osaka,
Osaka
1-19 Matsuyama 1-chome, Naha, Okinawa
7-35 Tsutsujigaoka 3-chome, Miyagino-ku,
Sendai, Miyagi
31-1, etc., Misonocho 3-chome, Wakayama,
Wakayama
3-38 Tenjin 1-chome, Chuo-ku, Fukuoka,
Fukuoka
1-23 Sonezaki-Shinchi 2-chome, Kita-ku,
Osaka, Osaka
24-15 Sakae 1-chome, Naka-ku, Nagoya,Aichi
1-1 Yakuin 1-chome, Chuo-ku, Fukuoka,
Fukuoka
2-11 Minami-Senba 4-chome, Chuo-ku,
Osaka, Osaka
11-28 Minamisemba 4 chome, Chuo-ku,
OsakaForm ofOwnership

Appraisal ValueBook Valueas of June 30, 2021
as of June 30, 2021
(thousands of yen)(thousands of yen)
(Note)

Real estate

25,998,984

39,600,000

Real estate

7,479,530

9,930,000

Beneficiaryinterest

5,550,232

9,680,000

Real estate

13,983,597

14,600,000

Beneficiaryinterest

7,022,330

11,000,000

Real estate

1,590,545

2,890,000

Real estate

7,134,694

5,500,000

3,472,867

4,290,000

12,950,550

15,700,000

3,766,959

4,000,000

1,566,731

2,260,000

4,419,548

3,580,000

1,649,687

2,180,000

2,290,635

4,730,000

1,326,068

1,640,000

1,997,449

3,730,000

2,107,939

3,580,000

Real estate

3,814,163

3,420,000

Real estate

9,956,068

21,400,000

5,162,318

4,660,000

Beneficiaryinterest
Beneficiaryinterest
Real estate
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest

Beneficiaryinterest
Beneficiaryinterest
Beneficiaryinterest

3,804,106

4,360,000

12,458,018

14,000,000

JPR Umeda Loft Bldg.

16-7 Chayamachi, Kita-ku, Osaka, Osaka

Housing Design Center Kobe

2-2 Higashi-Kawasakicho 1-chome, Chuo-ku,
Kobe, Hyogo

Real estate

6,083,589

7,590,000

2-19 Chayamachi, Kita-ku, Osaka, Osaka

Beneficiaryinterest

6,011,651

8,410,000

439,222,516

549,331,000

JPR Chayamachi Bldg.
Total(Note) The appraisal values at end of period are either appraisal values or survey values by real estate appraisers, based on the Cabinet Office Order on “Regulations on
calculations of investment corporations.”

18

The following table provides changes in rental business results for each of JPR’s real estate properties and beneficiary interests inreal estate.

OfficeOfficeRetail,etc.

Other Cities

Retail, etc.

Greater Tokyo

Retail, etc.

Central Tokyo

OfficeArea Type

Property Name

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Bldg.
Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.
Minami Azabu Bldg.
Shinagawa Canal Bldg.
Rokubancho Bldg.
JPR Harajuku Bldg.
JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
Otemachi Tower (Land with Leasehold
Interest)
Science Plaza-Yonbancho Plaza
Shibadaimon Center Bldg.
Tokyo Square Garden
JPR Kojimachi Bldg.
Otemachi Financial City North Tower
JPR Shibuya Tower Records Bldg.
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
(Yurakucho Itocia)
JPR Ginza Namiki-dori Bldg.
FUNDES Suidobashi
Arca East
JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.
JPR Ueno East Bldg.
Tachikawa Business Center Bldg.
Rise Arena Bldg.
Yume-ooka Office Tower
Olinas Tower
JPR Yokohama Bldg.
Omiya Prime East
Sencity Bldg.
Tanashi ASTA
Cupo-la Main Bldg.
JPR Musashikosugi Bldg.
Musashiurawa Shopping Square
Kawasaki Dice Bldg.
FUNDES Ueno
Niigata Ekinan Center Bldg.
Tokyo Tatemono Honmachi Bldg.
JPR Hakata Bldg. (Note 3)
JPR Naha Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Dojima Bldg.
JPR Nagoya Fushimi Bldg.
Yakuin Business Garden
JPR Shinsaibashi Bldg.
JPR Shinsaibashi WestJPR Umeda Loft Bldg.
Housing Design Center Kobe
JPR Chayamachi Bldg.
Total

38th Fiscal Period
39th Fiscal Period(from Jul. 1, 2020 to Dec. 31, 2020)(from Jan. 1, 2021 to Jun. 30, 2021)
RentalRentalRatio to Number
Ratio toNumber of Occupancy Revenues
Occupancy Revenues
Total of Tenants
Total
Tenants at Rate at throughout
Rate atthroughout
Rental at Period
RentalPeriod End Period End
PeriodPeriod End
PeriodRevenues
End
Revenues(Note 1)(%)(thousands(%)(thousands(%)(Note 1)(%)
of yen)of yen)11
100.0
404,014
2.4
11
100.0
437,0022.6
1100.0(Note 2) (Note 2)1
100.0(Note 2) (Note 2)
5
100.0
94,4790.6
5100.0
88,9090.5
17100.0
118,9370.7
1585.3
113,4020.7
8
100.0
127,5380.8
8
100.0
121,209
0.7
10
100.0
488,434
2.9
10
100.0
492,7253.0
2100.0
134,8320.8
2
100.0
134,336
0.8
10
100.0
157,568
0.9
10
100.0
159,3701.0
2100.0
204,4641.2
1100.0
211,3201.3
22
97.5
432,789
2.6
22
100.0
418,3992.5
22
98.3
624,1203.7
22
96.9
619,6323.8
4100.0
37,2140.2
2
77.1
35,8920.2
36
98.0
536,2633.2
33
94.4
533,1963.2
1100.0(Note 2) (Note 2)1
100.0(Note 2) (Note 2)
6
100.0
74,2250.4
590.8
72,0310.4
1100.0(Note 2) (Note 2)1
100.0(Note 2) (Note 2)9
100.0
307,9991.8
9
88.5
291,4171.8
5100.0
190,8591.1
5
100.0
192,0841.2
6
100.0
271,0801.6
6
100.0
281,202
1.7
8
92.0
109,6910.7
9
100.0
103,506
0.6
2

100.0

1,793,000

10.7

2

100.0

1,797,500

10.9

25
8
46
6
9
1
7
1

100.0
84.3
100.0
100.0
97.5
100.0
100.0
100.0

116,731
186,315
396,152
154,583
17,960(Note 2)87,086(Note 2)

0.7
1.1
2.4
0.9
0.1
(Note 2)0.5
(Note 2)

24
9
46
6
10
1
7
1

98.3
100.0
91.5
100.0
100.0
100.0
100.0
100.0

117,214163,054
396,905
168,610234,304(Note 2)81,998(Note 2)

0.7
1.0
2.4
1.0
1.4
(Note 2)0.5
(Note 2)1100.0(Note 2)

(Note 2)1100.0(Note 2)

(Note 2)

9
5
6
39
19
20
44
10
23
1
43
16
21
4
72
1
1
1
3
31
10
10
8
41
20
15
17
15
11
5
15
9
13
1
1

100.0
87.2
100.0
97.6
100.0
96.9
100.0
100.0
100.0
100.0
100.0
100.0
98.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
94.3
98.9
97.9
99.7
100.0
100.0
92.1
99.5
99.9
100.0
99.9
100.0
100.0

100.0
87.2
100.0
97.6
98.8
98.1
99.2
100.0
97.6
52.7
100.0
100.0
100.0
100.0
98.0
100.0
100.0
100.0
100.0
97.8
100.0
98.5
94.3
－
100.0
99.9
95.0
98.2
92.1
99.5
92.1
100.0
99.9
100.0
100.0

5

100.0

5

100.0

99.3

1.3
0.5
1.6
0.8
0.8
0.7
2.8
1.1
0.9
(Note 2)
2.1
6.2
1.8
1.8
3.1
(Note 2)
(Note 2)
(Note 2)
0.8
3.1
0.7
0.7
0.9
1.0
0.7
1.2
0.7
0.7
0.8
0.9
3.5
0.8
0.8
(Note 2)
(Note 2)
1.1
100.0

9
5
6
39
18
21
42
10
22
4
43
16
22
4
72
1
1
1
3
27
10
10
7
－
20
15
17
14
11
5
15
9
13
1
1

857

210,970
87,803272,083
139,250
131,099
109,683
472,480
182,630
154,558(Note 2)352,492
1,029,571
294,517
293,872
516,454(Note 2)
(Note 2)
(Note 2)
127,041
511,164
119,213
123,857
153,332
173,319
112,129
193,190108,818
124,999
125,481
154,214581,125
131,809
138,004(Note 2)
(Note 2)
181,311
16,714,986

804

98.1

207,809
66,401
267,818
135,722
131,371
105,123
473,313
175,784
146,572
73,736344,625
1,015,292
293,080
291,306
573,576(Note 2)
(Note 2)
(Note 2)
127,041
479,043
104,239
123,924
153,725
55,006110,949
196,454
105,351
122,330
125,287
156,009576,157
128,636
143,621(Note 2)
(Note 2)
177,888
16,521,229

1.3
0.4
1.6
0.8
0.8
0.6
2.9
1.1
0.9
0.4
2.1
6.1
1.8
1.8
3.5
(Note 2)
(Note 2)
(Note 2)
0.8
2.9
0.6
0.8
0.9
0.3
0.7
1.2
0.6
0.7
0.8
0.9
3.5
0.8
0.9
(Note 2)
(Note 2)
1.1
100.0

19

(Note 1) The number of tenants at end of period is counted as follows except for Shinjuku Square Tower, Shinjuku Center Bldg., the residential section of Science PlazaYonbancho Plaza, Tokyo Square Garden, Otemachi Financial City North Tower, Rise Arena Bldg., Sencity Bldg. and Kawasaki Dice Bldg.: when a single tenantleases 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.
The tenants of Shinjuku Square Tower, Shinjuku Center Bldg., the residential section of Science Plaza-Yonbancho Plaza, Tokyo Square Garden, Otemachi Financial
City North Tower, Rise Arena Bldg., Sencity Bldg. and Kawasaki Dice Bldg. have sublet space to sublessees and lease agreements have been executed where therent paid by the tenants fluctuates in accordance with the lease conditions of the sublessees and thus the numbers of sublessees have been entered as the numbersof tenants.
(Note 2) JPR does not disclose the rental revenues throughout period of the properties and their ratio to total rental revenues due to inevitable reasons, as no consent todisclosure has been obtained from the tenants or co-owners.
(Note 3) For JPR Hakata Bldg., JPR sold its 35.0% co-ownership interest on December 24, 2020, and sold the remaining 65.0% co-ownership interest on March 29, 2021.

(4) Status of Other Assets
Beneficiary interests with real estate as major entrusted properties have been included in (3) Itemized Portfolio Assets above. There
were no additional major assets that are main investment targets of JPR other than those listed under (3) above as of the end of the 39th
fiscal period.

20

4. Capital Expenditures of Owned Real Estate(1) Planned Capital Expenditures
The following are major items of capital expenditures for renovation works, etc. planned as of the end of the 39th fiscal period for JPRowned real estate and entrusted real estate regarding beneficiary interests in real estate. Furthermore, the planned construction expenses
include portions that are classified as expenses in accounting.

Property Name

Kanematsu Bldg.

Location

PurposeSchedule

Chuo-ku, Tokyo

2nd phase of replacement of toilets on standard
floors and corridors and ceilings in common
areas

Apr. 2021–Dec. 2021

131

–

–

Replacement of air-conditioning units

Apr. 2021–Dec. 2021

107

–

–

2nd phase of repair of common areas on 2ndbasement floor through 1st floor

Jul. 2021–Oct. 2021

101

–

–

2nd phase of replacement of toilets

Jul. 2021–Dec. 2021

100

–

–

3rd phase of reinforcement of elevators

Jun. 2021–Dec. 2021

82

–

–

1st through 2nd phases of replacement of
air-conditioning units

Oct. 2021–May 2022

81

–

–

1st through 2nd phases of replacement of
automatic control boards for air-conditioning
units

Jul. 2021–Jun. 2022

69

–

–

Replacement of air-conditioning units

Nov. 2021–Dec. 2021

68

–

–

Replacement of piping equipment

Jun. 2021–Nov. 2021

63

–

–

Repair of exterior walls

Jul. 2021–Oct. 2021

51

–

–

Shift of canteen areas to office specifications

Jul. 2021–Dec. 2021

35

–

–

Sep. 2021–Nov. 2021

32

–

–

Nov. 2021–Nov. 2021

30

–

–

JPR Crest Takebashi
Bldg.

Chiyoda-ku,
TokyoShinjuku-ku,
BYGS Shinjuku Bldg.
Tokyo
JPR Shinsaibashi
Osaka, Osaka
West
Shinjuku-ku,
BYGS Shinjuku Bldg.
Tokyo
JPR Shinsaibashi
Osaka, Osaka
Bldg.
Shinjuku Center Bldg.

Planned (millions of yen)
Payment
AmountTotal
duringAlreadyValue
the 39th
Paid
Fiscal Period

Shinjuku-ku,
TokyoKawasaki,Kanagawa
Shinjuku-ku,
Shinjuku Center Bldg.
Tokyo
JPR Umeda Loft Bldg. Osaka, Osaka
Oval Court Ohsaki
Shinagawa-ku,
Mark West
Tokyo
Tokyo Tatemono
Osaka, Osaka
Honmachi Bldg.
Shinagawa-ku,
Gotanda First Bldg.
Tokyo
Kawasaki Dice Bldg.

2nd phase of shift to variable air-volume
systems on the 5th and 8th floors
Replacement of power-receiving andtransforming facilities(2) Capital Expenditures during the 39th Fiscal Period
The following are the capital expenditure amounts JPR invested in real estate and entrusted real estate during the 39th fiscal period.
Among major capital expenditures, JPR conducted replacement of air conditioning units to maintain and enhance tenant satisfaction,
as well as renovation of common-use areas with the aim of attracting new tenants, among other works. In addition, aside from these
constructions, JPR conducted construction of 516 million yen (Note), which was appropriated as expenditures for repair andmaintenance.
Property Name

Location

Kanematsu Bldg.

Chuo-ku, TokyoBYGS Shinjuku Bldg.

Shinjuku-ku, Tokyo

Sencity Bldg.

Chiba, Chiba

BYGS Shinjuku Bldg.

Shinjuku-ku, Tokyo

Rise Arena Bldg.

Toshima-ku, TokyoJPR Chiba Bldg.

Chiba, Chiba

Yakuin Business Garden

Fukuoka, Fukuoka

JPR Yokohama Bldg.

Yokohama, Kanagawa

Other Properties

Purpose

Period

1st phase of replacement of toilets onstandard floors and corridors andOct. 2020–Mar. 2021
ceilings in common areas
1st phase of repair of common areas on
May 2021–Jun. 2021
2nd basement floor through 1st floor
Replacement of toilets in the West
Jun. 2020–Mar. 2021
Building
2nd phase of reinforcement of elevators
Oct. 2020–Feb. 2021
Replacement of lighting equipment with
LED lamps on 1st floor and 6th throughJul. 2020–Jan. 2021
14th floors
2nd phase of reinforcement of elevators
Dec. 2020–Feb. 2021
Replacement of lighting equipment with
May 2021–Jun. 2021
LED lamps on 2nd through 14th floors
Repair of exterior walls and work on
Nov. 2020–Feb. 2021
exterior signboards
Replacement of air-conditioning units, repair of common areas,
replacement of lighting equipment with LED lamps, etc.
Total

Construction
Expenses(millions of yen)
92
81
70
64
50
48
43
41
876
1,370

(Note) Expenditures for repair and maintenance included 12 million yen of construction management fees paid to construction management companies as well as the amounts
for repair and maintenance constructions themselves.

21

(3) Amounts Reserved for Long-Term Repairs and Maintenance Plans
JPR has deposited the following amounts from the redundant cash flow (including one accompanying internal reserve of profits) suchas depreciation in order to conduct large-scale repairs and maintenance work, based on medium- to long-term repairs and maintenanceplans for individual properties.
(Millions of yen)
35th Fiscal Period(Jan. 1, 2019 Jun. 30, 2019)36th Fiscal Period(Jul. 1, 2019 Dec. 31, 2019)37th Fiscal Period(Jan. 1, 2020 Jun. 30, 2020)

38th Fiscal Period(Jul. 1, 2020 Dec. 31, 2020)

39th Fiscal Period(Jan. 1, 2021 Jun. 30, 2021)

Balance of deposits at
beginning of current period

1,222

1,319

1,310

1,424

1,421

Deposits during the period

1,038

997

939

952

859

941

1,006

825

955

774

1,319

1,310

1,424

1,421

1,506

Operation Period

Amounts used from
deposits during the period
Deposits carried forward to
the next period225. Expenses and Liabilities(1) Details of Expenses Related to Management(Thousands of yen)
38th Fiscal Period(Jul. 1, 2020 – Dec. 31, 2020)
768,21639th Fiscal Period(Jan. 1, 2021 - Jun. 30, 2021)
788,824

Management fee 1

228,570

233,763

Management fee 2

201,124

199,108

Management fee 3

338,521355,952(b) Administrative Service and Custodian Fees

82,32583,053(c) Directors' Fee

4,200

4,200

(d) Trust Fees

21,776

20,946Item(a) Asset Management Fees (Note)(e) Other Expenses
Total(Note)

108,676

119,022985,194

1,016,046

Aside from the amounts of the asset management fees entered above, fees for asset management of the acquired properties (38th fiscal period: 57,000 thousandyen) have been paid and included in the book value of each property, and fees for asset management of the sold property (38th fiscal period: 7,175 thousand yen,
39th fiscal period: 13,325 thousand yen) have been paid and deducted from gain on sale of each property.

(2) Status of Loans Payable
As of June 30, 2021 JPR has the following loans payable.

Long-Term Loans Payable

Short-Term
Loans
PayableCategory

LenderMizuho Bank Ltd. (Note 4)

Drawdown
Date

Balance asof Jan. 1,
2021(millionsof yen)Dec. 24, 2020

6,000

2,000

Total

Balance as
Averageof Jun. 30, interest Rate
Repayment
2021
(%)
Date
(millions(Note 1)of yen)(Note 2)
0.179

Jul.5, 2021

Repayment
MethodUse

Remarks

Principal lump
Unsecured/
sum repayment (Note 3)
Unguaranteedon maturity

6,000

2,000

Mizuho Bank Ltd.

Jun. 27, 2014

5,000

5,000

1.178 Jun. 27, 2023

Mizuho Bank Ltd.

Mar. 11, 2015

2,000

2,000

1.011 Mar. 11, 2024

Mizuho Bank Ltd.

Mar. 24, 2015

2,000

2,000

1.056 Mar. 24, 2025

Mizuho Bank Ltd.

Feb. 4, 2016

5,000

5,000

0.804 Feb. 4, 2026

Mizuho Bank Ltd.

Mar. 30, 2017

3,000

－

0.351 Mar. 30, 2021

Mizuho Bank Ltd.

Mar. 30, 2017

4,000

4,000

0.400 Mar. 30, 2022

Mizuho Bank Ltd.

Nov. 21, 2017

1,000

1,000

0.795 Nov. 19, 2027

Mizuho Bank Ltd.

Dec. 5, 2019

2,000

2,000

0.646 Dec. 5, 2029

Mizuho Bank Ltd.

Mar. 30, 2021

－

3,000

0.675 Mar. 30, 2031

MUFG Bank, Ltd.

Jun. 27, 2014

4,000

－

0.889 Jun. 25, 2021

MUFG Bank, Ltd.

Aug. 31, 2015

1,000

1,000

0.873 Aug. 31, 2023

MUFG Bank, Ltd.

Mar. 25, 2016

5,000

5,000

MUFG Bank, Ltd.

Dec. 15, 2016

2,000

2,000

Principal lump
Unsecured/
0.510 Mar. 25, 2024 sum repayment (Note 3)
Unguaranteedon maturity
0.633 Dec. 13, 2024

MUFG Bank, Ltd.

Aug. 8, 2017

1,000

1,000

0.638 Aug. 8, 2025

MUFG Bank, Ltd.

Aug. 29, 2017

5,000

5,000

0.600 Aug. 29, 2025

MUFG Bank, Ltd.

Sep. 5, 2017

3,000

3,000

0.593 Sep. 5, 2025

MUFG Bank, Ltd.

Jun. 25, 2021

－

4,000

0.450 Jun. 23, 2028

Sumitomo Mitsui Banking Corporation

Jun. 27, 2014

2,500

2,500

1.033 Jun. 27, 2022

Sumitomo Mitsui Banking Corporation

Mar. 30, 2017

2,000

－

0.351 Mar. 30, 2021

Sumitomo Mitsui Banking Corporation

Mar. 30, 2017

4,000

4,000

0.400 Mar. 30, 2022

Sumitomo Mitsui Banking Corporation

Dec. 5, 2019

1,000

1,000

0.245 Dec. 5, 2023

Sumitomo Mitsui Banking Corporation

Jun. 26, 2020

3,000

3,000

0.300 Jun. 26, 2025

Sumitomo Mitsui Banking Corporation

Mar. 30, 2021

－

2,000

0.450 Mar. 30, 2028

23

Category

Drawdown
Date

Balance asof Jan. 1,
2021(millionsof yen)Jun. 27, 2013820－

1.449 Jun. 25, 2021

Development Bank of Japan, Inc.

Dec. 5, 2013

2,000

2,000

1.188 Dec. 3, 2021

Development Bank of Japan, Inc.

Mar. 24, 2015

2,000

2,000

1.056 Mar. 24, 2025

Development Bank of Japan, Inc.

Dec. 15, 2016

3,000

3,000

0.843 Jun. 14, 2027

Development Bank of Japan, Inc.

Nov. 21, 2017

1,000

1,000

0.795 Nov. 19, 2027

Development Bank of Japan, Inc.

Jun. 27, 2019

2,100

2,100

0.572 Jun. 27, 2029

Development Bank of Japan, Inc.

Jun. 25, 2021－

800

0.600 Jun. 25, 2030

Shinsei Bank, Ltd.

Dec. 5, 2014

2,000

2,000

1.134 Dec. 5, 2024

Shinsei Bank, Ltd.

Dec. 15, 2016

1,000

1,000

0.843 Jun. 14, 2027

Shinsei Bank, Ltd.

Apr. 5, 2019

5,000

5,000

0.673

Shinsei Bank, Ltd.

Sep. 24, 2020

1,000

1,000

0.525 Sep. 25, 2028

Shinsei Bank, Ltd.

Sep. 24, 2020

1,000

1,000

0.675 Sep. 24, 2030

Shinkin Central Bank

Dec. 15, 2016

2,000

2,000

0.388 Dec. 14, 2021

Shinkin Central Bank

Dec. 5, 2018

3,000

3,000

0.663

Shinkin Central Bank

Jun. 27, 2019

2,000

2,000

0.447 Dec. 27, 2027

The Norinchukin Bank

Dec. 15, 2016

2,000

2,000

0.388 Dec. 14, 2021

LenderLong-Term Loans Payable

Development Bank of Japan, Inc.

Balance as
Averageof Jun. 30, interest Rate
Repayment
2021
(%)
Date
(millions(Note 1)of yen)(Note 2)

Repayment
MethodUse

Remarks

Apr. 5, 2029

Jun. 4, 2027

The Norinchukin Bank

Dec. 5, 2017

1,000

1,000

0.604

The Norinchukin Bank

Jun. 27, 2019

2,000

2,000

0.405 Jun. 25, 2027

The Norinchukin Bank

Dec. 24, 2020

2,000

2,000

0.525 Dec. 25, 2028

Mizuho Trust & Banking Co., Ltd.

Feb. 4, 2020

3,000

3,000

0.586

Mizuho Trust & Banking Co., Ltd.

Mar. 30, 2020

2,000

2,000

Mizuho Trust & Banking Co., Ltd.

Dec. 24, 2020

2,000

2,000

0.606 Mar. 29, 2030 Principal lump
Unsecured/
sum repayment (Note 3)
Unguaranteed
0.675 Dec. 24, 2030 on maturity

The Bank of Fukuoka, Ltd.

Oct. 9, 2015

2,000

2,000

0.816

Oct. 6, 2023

The Bank of Fukuoka, Ltd.

Jul. 7, 2016

2,000

2,000

0.480

Jul. 7, 2026

The Bank of Fukuoka, Ltd.

Sep. 24, 2019

1,000

1,000

0.554 Sep. 21, 2029

The Bank of Fukuoka, Ltd.

Jan. 30, 2020

1,000

1,000

0.598 Jan. 30, 2030

Aozora Bank Ltd.

Jul. 3, 2017

900

900

Aozora Bank Ltd.

Aug. 25, 2017

1,000

1,000

0.534 Aug. 23, 2024

Aozora Bank Ltd.

Aug. 25, 2017

1,000

1,000

0.574 Feb. 25, 2025

Aozora Bank Ltd.

Aug. 30, 2018

2,000

2,000

0.553 Feb. 25, 2025

Aozora Bank Ltd.

Sep. 24, 2020

500

500

0.525 Sep. 25, 2028

Meiji Yasuda Life Insurance Company

Feb. 5, 2015

1,000

1,000

1.042

Meiji Yasuda Life Insurance Company

Jun. 21, 2018

3,200

3,200

0.813 Jun. 21, 2028

Sumitomo Life Insurance Company

Oct. 11, 2016

2,000

2,000

0.453 Oct. 11, 2024

Sumitomo Life Insurance Company

Jul. 22, 2019

1,000

1,000

0.583 Jul. 20, 2029

Sumitomo Life Insurance Company

Jan. 30, 2020

1,000

1,000

0.598 Jan. 30, 2030

The Shinkumi Federation Bank

Feb. 5, 2018

4,000

4,000

0.404 Aug. 5, 2022

The Nishi-Nippon City Bank, Ltd.

May 27, 2016

3,000

3,000

0.646 May 27, 2026

The Nishi-Nippon City Bank, Ltd.

Dec. 15, 2016

1,000

1,000

0.388 Dec. 14, 2021

Taiyo Life Insurance Company

Sep. 24, 2015

1,000

1,000

0.969 Sep. 24, 2024

Taiyo Life Insurance Company

Jun. 4, 2018

1,000

1,000

0.811

Taiyo Life Insurance Company

Dec. 25, 2020

1,000

1,000

0.675 Dec. 24, 2030

24

0.625

Jun. 5, 2025

Feb. 4, 2030

Jul. 3, 2025

Feb. 5, 2025

Jun. 5, 2028

Long-Term Loans Payable

Category

LenderDrawdown
Date

Balance asof Jan. 1,
2021(millionsof yen)The Chugoku Bank, Ltd.

Oct. 9, 2015

2,000

2,000

0.816

The Chugoku Bank, Ltd.

Sep. 25, 2018

1,000

1,000

0.661 Mar. 25, 2026

The Iyo Bank, Ltd.

Oct. 9, 2015

1,000

1,000

0.816

The Iyo Bank, Ltd.

Jan. 30, 2020

1,000

1,000

0.598 Jan. 30, 2030

National Mutual Insurance Federationof Agricultural Cooperatives

Dec. 15, 2016

2,000

2,000

0.388 Dec. 14, 2021

Sompo Japan Insurance Inc.

Dec. 25, 2015

2,000

2,000

0.759 Dec. 25, 2023

Nippon Life Insurance Company

Nov. 22, 2019

2,000

2,000

0.225 Nov. 22, 2023

The Hachijuni Bank, Ltd.

Sep. 26, 2016

1,000

1,000

0.209 Sep. 24, 2021

The Hachijuni Bank, Ltd.

Oct. 9, 2020

1,000

1,000

0.300

The Yamaguchi Bank, Ltd.

Nov. 21, 2017

1,000

1,000

0.795 Nov. 19, 2027

The Yamaguchi Bank, Ltd.

Jan. 30, 2020

1,000

1,000

0.598 Jan. 30, 2030

Resona Bank, Ltd.

Mar. 30, 2017

2,000

2,000

NTT FINANCE CORPORATION

May 31, 2018

1,000

1,000

The Kiyo Bank, Ltd.

Jan. 30, 2020

1,000

1,000

0.438 Sep. 30, 2022 Principal lump
Unsecured/
sum repayment (Note 3)
0.408 May 31, 2023
Unguaranteedon maturity
0.598 Jan. 30, 2030

The 77 Bank, Ltd.

May 31, 2018

1,000

1,000

0.408 May 31, 2023

Daishi Hokuetsu Bank, Ltd.

Nov. 21, 2017

1,000

1,000

0.396 Nov. 21, 2022

Daido Life Insurance Company

Dec. 27, 2018

1,000

1,000

0.316 Dec. 25, 2023

The Chiba Bank, Ltd.

Oct. 25, 2018

1,000

1,000

0.449 Oct. 25, 2023

Tokio Marine & Nichido Fire InsuranceCo., Ltd.

Dec. 27, 2018

1,000

1,000

0.299 Jun. 27, 2023

The Hyakugo Bank, Ltd.

Oct. 25, 2018

1,000

1,000

0.582 Apr. 25, 2025

The Hiroshima Bank, Ltd.

Nov. 21, 2017

1,000

1,000

0.396 Nov. 21, 2022

Mitsui Sumitomo Insurance Company,
Limited

Oct. 4, 2019

1,000

1,000

0.310

Sumitomo Mitsui Trust Bank Limited

Mar. 25, 2016

1,000

1,000

0.691 Mar. 25, 2026

The Yamanashi Chuo Bank, Ltd.

Apr. 30, 2021

－

1,000

0.600 Apr. 30, 2030

158,020

159,000

Total

Balance as
Averageof Jun. 30, interest Rate
Repayment
2021
(%)
Date
(millions(Note 1)of yen)(Note 2)

Repayment
MethodUse

Remarks

Oct. 6, 2023

Oct. 6, 2023

Oct. 9, 2025

Oct. 2, 2026

(Note 1) The average interest rates are rounded to the third decimal place. Furthermore, fees related to loan arrangement paid to the above lenders are not included.
(Note 2) Short-term loans payable are floating-rate loans payable. Long-term loans payable are fixed-rate loans payable.
(Note 3) Funds are used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable and redemption of
investment corporation bonds.
(Note 4) Of the 6,000 million yen in short-term loans payable that was borrowed on December 24, 2020 from Mizuho Bank, Ltd., JPR made early repayment of 3,000
million yen on March 16, 2021 and 1,000 million yen April 30, 2021.

25

(3) Investment Corporation Bonds
Details of JPR’s investment corporation bonds outstanding as of June 30, 2021 are as follows.
Name

Issue Date

Seventh Series ofDec. 14, 2006
Investment Corporation Bonds
Eighteenth Series of Investment
May 31, 2013
Corporation Bonds
Nineteenth Series of Investment
Feb. 5, 2014
Corporation Bonds
Twenty-first Series of Investment
Jul. 22, 2014
Corporation Bonds
Twenty-second Series ofDec. 4, 2014
Investment Corporation Bonds
Twenty-third Series of Investment
May 31, 2018
Corporation Bonds
Twenty-fourth Series of Investment
Jul. 31, 2019
Corporation Bonds (Green Bonds)
Twenty-fifth Series of Investment
Nov. 26, 2020
Corporation Bonds (Green Bonds)
Twenty-sixth Series of Investment
Mar. 16, 2021
Corporation Bonds
Total

Balance as of
Balance as of
CouponRate
Jan. 1, 2021
Jun. 30, 2021(%)
(millions of yen) (millions of yen)

Maturity Date

4,500

4,500

2.900

Dec. 14, 2026

2,000

2,000

1.460

May 31, 2023

5,000

5,000

1.110

Feb. 5, 2024

4,000

4,000

1.278

Jul. 22, 2026

3,000

3,000

0.831

Dec. 4, 2024

3,000

3,000

0.550

May 31, 2028

5,000

5,000

0.570

Jul. 31, 2029

6,000

6,000

0.510

Nov. 26, 2030

－

3,000

0.760

Mar. 14, 2036

32,50035,500

Redemption
MethodUse

Remarks

Bulletrepayment(Note 1)

(Note 2)

(Note 1) Funds are used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable and redemption of
investment corporation bonds.
(Note 2) These investment corporation bonds are equipped with the same rank rider limited among certain investment corporation bonds.

(4) Subscription Rights to Shares
Not applicable26

6. Acquisitions and Sales during the 39th Fiscal Period(1) Acquisition and Sale of Real Estate and Asset-Backed Securities
Acquisition
Type of Asset

Real Estate Name
Acquisition Date

Beneficiaryinterest

Sale

AcquisitionPrice(millions ofyen)(Note)

Sale Price Book Value Difference
Sale
Sale Profit
(A)
(B)
(C)
Expense and Loss(millions of (millions of (A)-(B)(D)(C)-(D)yen)
yen)(millions of (millions (millions of(Note)(Note)
yen)of yen)yen)

Sale Date

JPR Hakata Bldg.
(65.0% co-ownershipinterest)－－

March 29, 2021

2,665

1,866

798

14

783

Total

－

－

－

2,665

1,866

798

14

783

(Note) Values of Acquisition Price or Sale Price are amounts (transaction price indicated in the transaction contract, etc.) excluding expenses (such as real estate transaction
brokerage fees) required for acquisition or sale of the relevant real estate.

(2) Acquisition and Sale of Other Assets
JPR made no acquisition or sale of other assets in the 39th fiscal period.

(3) Survey on Values of Specified Assets, etc.
Acquisition orType of Asset
Sale

Real Estate NameTransaction Date

Beneficiaryinterest

JPR Hakata Bldg.
(65.0% co-ownershipinterest)

March 29, 2021

Sale

Acquisition Price Real Estate
or Sale Price Appraisal Value
Real Estate Appraiser(Note 1)
(Note 2)
(millions of yen) (millions of yen)Appraisal Date

2,574
(Note 3)

November 30, 2020

2,665

The Tanizawa Sōgō
Appraisal Co., Ltd.

(Note 1) Values of Acquisition Price or Sale Price are amounts (transaction price indicated in the transaction contract, etc.) excluding expenses (such as real estatetransaction brokerage fees) required for acquisition or sale of the relevant real estate.
(Note 2) The appraisal in the table above was conducted by applying to the “Real Estate Appraisal Standards, Specific Thesis Chapter 3: Appraisal on Prices of Real Estate
Subject to Securitization.”(Note 3) The real estate appraisal value of JPR Hakata Bldg. (65.0% co-ownership interest) indicates the value equivalent for 65.0% co-ownership interest of the appraisal
value of the entire property as of November 30, 2020.

(4) Transactions with Interested Parties and Major Shareholders
1) Transaction Status(Thousands of yen)Transaction Amount, Etc.
Category
Purchase Amount, Etc.

Sale Amount, Etc.
－

Total

2,665,000

Breakdown of transactions with interested parties
Tokyo Tatemono Co., Ltd.
Total

－

(－%)

2,665,000(100.0%)－(－%)

2,665,000(100.0%)2) Value of Fee Expenses
Category

Total Paid Fees(A)

Management Fees (Note 2)

334,928

Outsourcing Fees

630,769

Tenant Brokerage Fees

51,446

Breakdown of Transaction with Interested Parties and Major
Shareholders
Paid Party
Paid Amount (B)Tokyo Tatemono Co., Ltd.
242,777
Prime Place Co., Ltd.
22,515
Tokyo Tatemono Co., Ltd.
438,992
Prime Place Co., Ltd.
14,375
Tokyo Tatemono Co., Ltd.
17,566
Prime Place Co., Ltd.
2,642

27

(Thousands of yen)
Ratio to Total
Amount(B/A))
72.5%
6.7%
69.6%
2.3%
34.1%
5.1%

(Note 1) Interested parties and major shareholders refer to the interested parties of the asset management company who has concluded an asset management agreement with
JPR and is regulated as designated in Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations and article 26-1-27 of theregulation on management reports in regard to investment trusts and investment corporations of The Investment Trusts Association, Japan.
(Note 2) The management fees indicated in the above table include construction management fees (total of 32,402 thousand yen) appropriated as assets and not handled as
expenses.
(Note 3) Aside from transactions indicated in the above table, JPR paid the following amounts for repairs, etc. conducted by below parties who are interested parties or
major shareholders during the 39th fiscal period.
Tokyo Tatemono Co., Ltd.

563,119 thousand yen

Prime Place Co., Ltd.

41,570 thousand yen

Tokyo Real Estate Management Co., Ltd.

209,507 thousand yen

Shinjuku Center Building Management Co., Ltd.

35,255 thousand yen(5) Transactions with the Asset Management Company regarding Concurrent
Work Conducted by the Asset Management Company
Tokyo Realty Investment Management, Inc., the asset management company of JPR, does not concurrently conduct any of the class 1
financial instruments transaction business, class 2 financial instruments transaction business, land and building transaction business,or real estate syndication business, and has no such transactions with JPR.

28

7. Overview of Accounting(1) Assets, Liabilities, Principal, and Profits and Loss
Please refer to the Balance Sheets, Statements of Income and Retained Earnings, Statements of Unitholders' Equity and Notes toFinancial Statements as well as Distribution Information on later pages of this report.

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

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

8. Overview of Self-Managed Investment Trust Beneficiary(1) Acquisition
Tokyo Realty Investment Management, Inc., the asset management company of JPR, acquired and holds JPR’s investment units as
indicated below.
Acquisition Date

Number of Units Acquired

Number of Units Disposed

Number of Units Held

September 14, 2001

40

–

40

January 22, 2002 (Note)

60

–

100

Accumulated Total

100

–

100

(Note) The acquisition was due to the investment unit split (2.5 units for one existing unit).

(2) Units Held
Number of Units Held at End
of Period
30th Fiscal Period(Jul. 1, 2016 – Dec. 31, 2016)
31st Fiscal Period(Jan. 1, 2017 – Jun. 30, 2017)
32nd Fiscal Period(Jul. 1, 2017 – Dec. 31, 2017)
33rd Fiscal Period(Jan. 1, 2018 – Jun. 30, 2018)
34th Fiscal Period(Jul. 1, 2018 – Dec. 31, 2018)35th Fiscal Period(Jan. 1, 2019 – Jun. 30, 2019)36th Fiscal Period(Jul. 1, 2019 – Dec. 31, 2019)37th Fiscal Period(Jan. 1, 2020 – Jun. 30, 2020)
38th Fiscal Period(Jul. 1, 2020 – Dec. 31, 2020)
39th Fiscal Period(Jan. 1, 2021 – Jun. 30, 2021)

Total Investment at End of
Period (Note)(millions of yen)

Ratio to Total Units Issued
and Outstanding (%)

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

(Note) Total investment at end of period represents the acquisition price.

29

9. Disclosure on Corporation Owning Foreign Real Estate
Not applicable

10. Disclosure on Real Estate Owned by Corporation Owning Foreign Real Estate
Not applicable

11. Other(1) Notice
Major issues related to the execution and modification, etc. of major agreements approved at JPR’s Board of Directors meeting in the 39th fiscal period
include the following:
Date of Board of Directors Meeting

March 1, 2021

Approved Item

Overview

Consignment of administrative services
concerning the issuance of the TwentySixth Series of Unsecured Investment
Corporation Bonds (Note)

JPR consigned the administrative services related to the issuance of theTwenty-Sixth Series of Unsecured Investment Corporation Bonds toMizuho Securities Co., Ltd. and Mizuho Bank, Ltd., on the condition
that the Executive Officer should decide to issue the relevant Bonds.

(Note) The Board of Directors’ meeting held on April 23, 2020 passed the comprehensive resolution on the issuance of the relevant investment corporation bonds. Based on
this, JPR issued the Twenty-Sixth Series of Unsecured Investment Corporation Bonds on March 16, 2021.

(2) Other
Unless otherwise stated, monetary amounts are rounded down and percentage figures are rounded off to the nearest specified unit inthis Report on Operating and Management Results.

30

(1) Balance Sheets(Thousands of yen)
End of 38th Fiscal Period(Dec. 31, 2020)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net

End of 39th Fiscal Period(Jun. 30, 2021)

28,598,680
12,797,488
271,574
130,517
15,05030,996,393
12,606,208
271,418
129,757
13,36541,813,311

44,017,144

66,826,208(20,760,217)

67,563,186(21,751,330)

46,065,991

45,811,855

Buildings in trust
Accumulated depreciation

95,206,152(37,264,443)

94,393,778(37,637,077)

Buildings in trust, net

57,941,709

56,756,701

73,557(30,266)

77,603(32,353)

Structures
Accumulated depreciation
Structures, net
Structures in trust
Accumulated depreciation

43,29145,250135,419(82,417)

134,930(82,306)

Structures in trust, net

53,001

52,623

Machinery and equipment
Accumulated depreciation

909,004(589,358)

909,004(614,208)

Machinery and equipment, net

319,646

294,796

Machinery and equipment in trust
Accumulated depreciation

1,932,022(1,476,358)

1,938,236(1,471,289)

455,663

466,946

170,010(79,189)

178,884(88,622)

Machinery and equipment in trust, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

90,821

90,262Tools, furniture and fixtures in trust
Accumulated depreciation

279,430(184,639)

289,486(189,451)

94,790100,034

Land
Land in trust
Construction in progress
Construction in progress in trust

Tools, furniture and fixtures in trust, net

133,341,887
191,547,397
1,019
330

133,370,201
190,413,992
858
16,153

Total property, plant and equipment

429,955,550

427,419,677

11,801,831
3,446

11,801,831
3,028

11,805,277

11,804,859

649,549
166,235

689,298
197,510Intangible assets
Leasehold right
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance expenses
Total deferred assets
Total assets

31

815,784

886,809442,576,613

440,111,346

153,146
30,456

171,560
23,487

183,602

195,047

484,573,526

484,323,538

(Thousands of yen)
End of 38th Fiscal Period(Dec. 31, 2020)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other

End of 39th Fiscal Period(Jun. 30, 2021)

2,931,209
6,000,000
19,820,000
1,048,185
88,281605
501,994
2,977,266
302

2,459,629
2,000,000
20,500,000
1,001,109
91,137605
478,592
2,995,945
246

33,367,843

29,527,265

32,500,000
138,200,000
10,100,242
14,005,614

35,500,000
138,500,000
9,973,833
13,728,489

194,805,857

197,702,323

228,173,700

227,229,588

247,860,796

247,860,796

689,444

1,103,494

689,444

1,103,494

Unappropriated retained earnings (undisposed loss)

7,849,585

8,129,659

Total surplus

8,539,029

9,233,153

256,399,826

257,093,950

Total current liabilities
Noncurrent liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Total noncurrent liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Surplus
Voluntary reserve
Reserve for reduction entry
Total voluntary reserve

Total unitholders' equity*2

Total net assets

256,399,826
484,573,526

Total liabilities and net assets

32*2

257,093,950
484,323,538

(2) Statements of Income and Retained Earnings(Thousands of yen)
38th Fiscal Period(Jul. 1, 2020 - Dec. 31, 2020)
Operating revenue
Rent revenue-real estate
Gain on sale of real estate*1*2

16,714,986
414,93139th Fiscal Period(Jan. 1, 2021 – Jun. 30, 2021)*1*2

17,129,917

Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Administrative service and asset custody fees
Directors' compensation
Trust fees
Other operating expenses*1

Total operating expenses
Operating income
Non-operating income
Interest income
Income on settlement of management association accounts
Insurance income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance expenses
Other

7,611,662
768,216
82,325
4,200
21,776108,676

16,521,229
783,966
17,305,196*1

7,499,692
788,824
83,053
4,200
20,946
119,0228,596,857

8,515,738

8,533,060

8,789,457

200
40,720
4,444
1,433

207
66,0674,829
1,237

46,79972,342525,756
24,143
171,817
10,5337,084
198

505,779
25,081
189,149
13,395
6,969
258

739,534

740,633

Ordinary income

7,840,325

8,121,166

Income before income taxes

Total non-operating expenses

7,840,325

8,121,166

Income taxes-current

605

605

Total income taxes

605

605

Net income

7,839,720

8,120,561

Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

9,865
7,849,585

9,097
8,129,65933

(3) Statements of Changes in Unitholders’ Equity(Thousands of yen)
38th Fiscal Period(Jul. 1, 2020 - Dec. 31, 2020)

39th Fiscal Period(Jan. 1, 2021 – Jun. 30, 2021)

247,860,796

247,860,796

Unitholders' equity
Unitholders' capital
Balance at beginning of current period
Changes of items during the period
Issuance of units
Total changes of items during the period
Balance at end of current period
Surplus
Voluntary reserve
Balance at beginning of current period－－

247,860,796

247,860,796

689,444689,444

Changes of items during the period
Provision of reserve for reduction entry

414,050

Total changes of items during the period－

414,050

689,444

1,103,494

7,287,774

7,849,585

Dividends from surplus(7,277,908)(414,050)(7,426,437)

Net income

7,839,720

8,120,561

Balance at end of current period
Unappropriated retained earnings (undisposed loss)
Balance at beginning of current period
Changes of items during the period
Provision of reserve for reduction entry

Total changes of items during the period

561,811

280,073

7,849,585

8,129,659

7,977,218

8,539,029

Dividends from surplus(7,277,908)(7,426,437)

Net income

7,839,720

8,120,561

Balance at end of current period
Total surplus
Balance at beginning of current period
Changes of items during the period
Provision of reserve for reduction entry－

Total changes of items during the period

561,811694,124

Balance at end of current period

8,539,029

9,233,153

Total unitholders' equity
Balance at the beginning of current period

255,838,014

256,399,826

Dividends from surplus(7,277,908)(7,426,437)

Net income

7,839,720

8,120,561

Changes of items during the period
Provision of reserve for reduction entry－

Total changes of items during the period

561,811694,124

Balance at end of current period

256,399,826

257,093,950

Total net assets
Balance at beginning of current period
Changes of items during the period

255,838,014

256,399,826

Dividends from surplus(7,277,908)(7,426,437)

Net income

7,839,720

8,120,561

Provision of reserve for reduction entry－

Total changes of items during the period
Balance at end of current period

34

561,811694,124

256,399,826

257,093,950

(4) Statements of Cash Distributions
38th Fiscal Period(Jul. 1, 2020 - Dec. 31, 2020)

39th Fiscal Period(Jan. 1, 2021 – Jun. 30, 2021)

7,849,585,585 yen
7,426,437,500 yen(7,750 yen)

8,129,659,190 yen
7,337,320,250 yen(7,657 yen)

Voluntary reserve
Provision of reserve for reduction entry

414,050,403 yen

783,942,395 yen

Retained earnings carried forward

9,097,682 yen

8,396,545 yen

Pursuant to the policy on cash distributions
provided in Article 30 (2) of the Articles ofIncorporation of JPR, the distribution amountshall be in excess of an amount equivalent to
90% of the “distributable income amount” asstipulated in Article 67-15 of the Act on
Special Measures Concerning Taxation, but nomore than the amount of earnings. Under suchpolicy, JPR decided to pay out distributions ofearnings of 7,426,437,500 yen, which is thelargest integral multiple of the total number ofinvestment units issued and outstanding(958,250 units) from the balance ofunappropriated retained earnings after
deducting the provision of reserve for
reduction entry pursuant to Article 65-7 of the
Act on Special Measures Concerning
Taxation, while minimizing the burden tounitholders incurred by accrual of corporate
income tax, etc. Furthermore, JPR shall not
distribute cash in excess of earnings as
stipulated in Article 30 (4) of the Articles ofIncorporation.

Pursuant to the policy on cash distributions
provided in Article 30 (2) of the Articles ofIncorporation of JPR, the distribution amountshall be in excess of an amount equivalent to
90% of the “distributable income amount” asstipulated in Article 67-15 of the Act on
Special Measures Concerning Taxation, but nomore than the amount of earnings. Under suchpolicy, JPR decided to pay out distributions ofearnings of 7,337,320,250 yen, which is thelargest integral multiple of the total number ofinvestment units issued and outstanding(958,250 units) from the balance ofunappropriated retained earnings after
deducting the provision of reserve for
reduction entry pursuant to Article 65-7 of the
Act on Special Measures Concerning
Taxation, while minimizing the burden tounitholders incurred by accrual of corporate
income tax, etc. Furthermore, JPR shall not
distribute cash in excess of earnings as
stipulated in Article 30 (4) of the Articles ofIncorporation.

I.
II.

Unappropriated retained earnings
Distribution amount(Distribution amount per unit)

III.
IV.

Method for calculating distribution amount35

(5) Statements of Cash Flows(Thousands of yen)
38th Fiscal Period(Jul. 1, 2020 - Dec. 31, 2020)

39th Fiscal Period(Jan. 1, 2021 – Jun. 30, 2021)

7,840,325

8,121,166

2,085,621
10,5332,100,584
13,395

7,084

6,969

Interest expenses(200)
697,573(207)
694,928

Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable

17,580172,716155

Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable

11,519－760

Increase (decrease) in accounts payable-other(84,519)
138,359(68,528)(47,094)

Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received

365,911(71,113)(23,402)
18,679Decrease in property, plant and equipment in trust due to sale
Other, net

1,011,451(111,233)

1,866,664(141,080)

Subtotal

12,091,609

12,542,989

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance expenses
Interest income

Interest income received
Interest expenses paid
Income taxes (paid) refund

200

207

(688,713)(605)(692,072)(606)

Net cash provided by (used in) operating activities

11,402,490

11,850,518

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment(12,025,561)(988,767)

Purchase of property, plant and equipment in trust
Purchase of intangible assets(1,002,768)(285)(845,241)

Payments of lease and guarantee deposits
Repayments of tenant leasehold and security deposits(37,332)－(39,749)

Proceeds from tenant leasehold and security deposits(192,083)
913,992(476,047)
351,409

Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust(147,585)
206,253(539,969)
371,336(12,285,370)(2,167,027)

Proceeds from short-term loans payable

6,000,000

Repayment of short-term loans payable－(4,000,000)

Proceeds from long-term loans payable
Repayment of long-term loans payable－
8,500,000(11,000,000)

10,800,000(9,820,000)

Proceeds from issuance of investment corporation bonds
Dividends paid

5,955,843(7,277,262)

2,968,190(7,425,248)

Net cash provided by (used in) financing activities

2,178,580(7,477,057)

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities

Net changes in cash and cash equivalents

1,295,701

2,206,433

Cash and cash equivalents at beginning of current period

40,100,467

41,396,168*1

Cash and cash equivalents at end of current period

36

41,396,168*1

43,602,602

(6) Notes to Financial Statements(Basis of Presenting Financial Statements)
Japan Prime Realty Investment Corporation (JPR) maintains its accounting records and prepares its financial statements in accordancewith accounting principles generally accepted in Japan (Japanese GAAP), including provisions set forth in the Financial Instruments
and Exchange Act of Japan, the Act on Investment Trusts and Investment Corporations (the Investment Trusts Act), the Companies Act
and the related regulations, which are different in certain respects as to the adoption and disclosure requirements of International
Financial Reporting Standards.
The accompanying financial statements are basically a translation of the audited financial statements of JPR, which were prepared inaccordance with Japanese GAAP and filed with the Kanto Local Finance Bureau. In preparing the accompanying financial statements,
certain reclassifications have been made to the financial statements issued domestically in order to present them in a format which ismore familiar to readers outside Japan. In addition, the notes to financial statements include information which might not be required
under Japanese GAAP but is presented herein as additional information.
JPR’s accounting periods end at the end of June and December.

(Significant Accounting Policies)
1. Depreciation/Amortization
Method for Long-lived Assets(1) Property and Equipment (including entrusted properties)
Depreciation is calculated using the straight-line method. The estimated useful lives of major property andequipment ranges are as follows:
Buildings ……………………… 3 - 65 years
Structures …………………….. 10 - 35 years
Machinery and equipment …….. 3 - 17 years
Tools, furniture and fixtures ….. 3 - 20 years
Assets with purchase costs of 100,000 yen or more but less than 200,000 yen are depreciated over three years basedon the Corporation Tax Act.
(2) Intangible Assets
Intangible assets are amortized utilizing the straight-line method.
(3) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.
2. Accounting for Deferred Assets(1) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized utilizing the straight-line method over the redemption
periods.
(2) Investment unit issuance expenses
Investment unit issuance expenses are amortized utilizing the straight-line method over three years.
3. Standards for Recording
Accounting Treatment of Taxes on Property and Equipment
Revenues and Expenses
In connection with property taxes, city planning taxes and depreciated asset taxes (the “property taxes”), JPR uses
the method of charging the corresponding amounts of assessed taxes to the current fiscal period as expenses related
to rent business.
Furthermore, JPR capitalized an amount equivalent to the property taxes paid to the sellers during the first fiscal
period as a part of the purchase cost, not as expenses, in connection with the acquisition of real estate or entrusted
beneficiary interests in real estate as entrusted property. Taxes on property and equipment capitalized amounted to1,466 thousand yen for the fiscal period ended December 31, 2020 and were nil for the fiscal period ended June 30,
2021.
4. Scope of Cash and Cash
Cash and cash equivalents in the Statements of Cash Flows include the following items
Equivalents in the Statements of(1) Cash on hand and cash in trust
Cash Flows(2) Deposits placed with banks and deposits in trust that can be withdrawn at any time(3) Short-term investments that are readily convertible to cash and have insignificant risk of price fluctuations andhave original maturities of three months or less from the acquisition date.
5. Other Significant Items(1) Accounting Policies on Trust Beneficiary Interests in Real Estate as Property in Trust
Fundamental to the Preparation ofRegarding trust beneficiary interests in real estate, all asset and liability accounts of entrusted properties as well as
Financial Statements
all revenue and expense accounts generated by the property in trust are recorded in relevant accounts on the balance
sheets and statements of income and retained earnings.
Furthermore, the following material accounts are separately presented in the balance sheets for properties in trust
recorded in relevant accounts.
a. Cash and deposits in trustb. Buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust,land in trust and construction in progress in trustc. Tenant leasehold and security deposits in trust(2) Accounting for Consumption Taxes
Revenues and expenses in the Statements of Income and Retained Earnings do not include consumption taxes.

37

(Notes to Accounting Standards Not Yet Adopted)
・ Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 (revised 2020) issued by the Accounting Standards Boardof Japan (ASBJ) on March 31, 2020)
・ Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30 (revised 2020) issued by
ASBJ on March 26, 2021)
・ Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19 (revised 2020) issued
by ASBJ on March 31, 2020)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) jointly developed acomprehensive accounting standard for revenue recognition, and issued it as Revenue from Contracts with Customers (IFRS 15
issued by IASB and Topic 606 issued by FASB) in May 2014. The IFRS 15 is applicable for accounting periods beginning on
January 1, 2018 and thereafter, and the Topic 606 is applicable for accounting periods beginning after December 15, 2017. In
accordance with this, the ASBJ has developed a comprehensive accounting standard for revenue recognition and issued it together
with its implementation guidance.
In developing the accounting standard for revenue recognition, the ASBJ made it a basic policy to adopt the basic principles of the
IFRS 15 as a starting point. By doing so, the ASBJ established the accounting standard from the viewpoint of comparability, which
is a benefit for securing consistency with the IFRS 15, between financial statements based on the Japanese GAAP and those basedon other accounting standards. Alternative treatments are also to be added, to the extent that they do not harm the comparability, incases where there are items to be considered in the actual practices conducted in Japan to date.
(2) Scheduled date of adoption
JPR will adopt the Accounting Standard, etc. from the beginning of the fiscal period ending December 31, 2021.
(3) Impact of adoption of the accounting standard and implementation guidance
The amount of impact on the financial statements by the adoption of the Accounting Standard and Implementation Guidance for
Revenue Recognition, etc. is being assessed at present.
・ Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30 issued by ASBJ on July 4, 2019)・ Accounting Standard for Financial Instruments (ASBJ Statement No. 10 (revised 2019) issued by ASBJ on July 4, 2019)・ Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31 issued by ASBJ on June17, 2021)
・ Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19 (revised 2020) issued
by ASBJ on March 31, 2020)(1) Overview
IASB and FASB have established detailed guidance for fair value measurement (IFRS 13 “Fair Value Measurement” under theInternational Financial Reporting Standards and Topic 820 “Fair Value Measurement” of the Accounting Standards Codification
under the U.S. accounting standards) containing almost the same content. In light of this, the ASBJ worked to secure consistency of
the Japanese accounting standards with the international accounting standards, mainly in terms of the guidance on and disclosure of
the fair value of financial instruments, and announced the Accounting Standard for Fair Value Measurement, etc.
The basic policy of ASBJ for the development of the Accounting Standard for Fair Value Measurement was to adopt all provisionsof the IFRS 13 as a rule by using a unified calculation method, from the viewpoint of improving the comparability between thefinancial statements of the Japanese and foreign companies. Moreover, in consideration of the practices conducted in Japan to date,
ASBJ determined to establish other treatments for individual items, to the extent that they do not greatly harm the comparability
between the financial statements.
(2) Scheduled date of adoption
JPR will adopt the Accounting Standards, etc. from the beginning of the fiscal period ending December 31, 2021.
(3) Impact of adoption of the accounting standard and implementation guidance
The amount of impact on the financial statements by the adoption of the Accounting Standard and Implementation Guidance for
Fair Value Measurement, etc. is being assessed at present.

38

(Notes to Balance Sheets)
1. Balance of Unused Commitment LineJPR has executed a commitment line agreement with its principal banks primarily to minimize refinancing risks and enhancefinancial stability.
(Thousands of yen)
End of 38th Fiscal Period(as of December 31, 2020)
Credit limit

End of 39th Fiscal Period(as of June 30, 2021)
24,000,000

Outstanding debts at end of period
Unused commitment line at end of period

24,000,000－－

24,000,000

24,000,000*2 Minimum Total Unitholders’ Equity Designated in Article 67- 4 in the Act on Investment Trusts and Investment Corporations(Thousands of yen)
End of 38th Fiscal Period(as of December 31, 2020)

End of 39th Fiscal Period(as of June 30, 2021)
50,00050,000(Notes to Statements of Income and Retained Earnings)*1. Breakdown of Rent Revenue-Real Estate and Expenses Related to Rent Business(Thousands of yen)
38th Fiscal Period(July 1, 2020 – December 31, 2020)

39th Fiscal Period(January 1, 2021 – June 30, 2021)

A. Rent Revenue-Real Estate
Rent Revenue
Rents
Land rents

12,097,265
1,793,000

11,984,455
1,797,500

Common charges

1,519,164

1,446,921

Parking fees
Advertising fees

270,903
38,051

261,871
37,419Antenna usage fees
Other28,626
41,30428,72944,384

15,788,315

15,601,282

Other rental revenues
Incidental rent income
Time-based parking fees

Subtotal

833,557
8,730

676,975
8,855

Cancellation charges

15,30066,725

Income equivalent to expenses for restoration
to original condition

37,722

133,597

Other miscellaneous income

31,35933,792

Subtotal

926,670919,947

Total rent revenue-real estate

16,714,986

16,521,229

Outsourcing expenses
Utilities expenses

630,247
841,010

630,769
714,170

Property and other taxes
Casualty insurance

2,387,806
26,8632,436,042
26,796

Repairs and maintenance
Property management fees

558,378
306,147

504,151
302,526

B. Expenses Related to Rent Business

Management association accounts
Depreciation
Other
Total expenses related to rent business
C. Profits for Rent Business
(A-B)

39

585,595

588,158

2,085,275
190,339

2,100,231
196,8447,611,662

7,499,692

9,103,323

9,021,537

*2. Breakdown of Gain on Sale of Real Estate, etc.
(Thousands of yen)
38th Fiscal Period(July 1, 2020 – December 31, 2020)
JPR Hakata Bldg. (35.0% co-ownership interest)
Proceeds from sale of real estate

39th Fiscal Period(January 1, 2021 – June 30, 2021)

1,435,000－

1,011,451
8,617

－
－

414,931－

Cost of sale of real estate－－

2,665,000
1,866,664

Other expenses related to sale－

14,368Gain on sale of real estate－

783,966

38th Fiscal Period(July 1, 2020 – December 31, 2020)

39th Fiscal Period(January 1, 2021 – June 30, 2021)

Cost of sale of real estate
Other expenses related to sale
Gain on sale of real estate
JPR Hakata Bldg. (65.0% co-ownership interest)
Proceeds from sale of real estate(Notes to Statements of Changes in Unitholders’ Equity)

Total number of authorized units and number of units outstanding
Total number of authorized units
Number of units outstanding

5,000,000 units

5,000,000 units

958,250 units

958,250 units(Notes to Statements of Cash Flows)*1. Reconciliation of the Amounts of the Cash and Cash Equivalents at End of Period in the Statements of Cash Flows with theAmounts of the Corresponding Accounts on the Balance Sheets(Thousands of yen)
38th Fiscal Period(July 1, 2020 – December 31, 2020)

39th Fiscal Period(January 1, 2021 – June 30, 2021)

Cash and deposits

28,598,680

30,996,393

Cash and deposits in trust

12,797,488

12,606,208

Cash and cash equivalents

41,396,168

43,602,602(Leases)
Future minimum lease payments to be received under non-cancelable operating leases(Thousands of yen)
38th Fiscal Period(as of December 31, 2020)

39th Fiscal Period(as of June 30, 2021)

Due within one year

6,117,669

6,058,160

Due after one year

11,016,658

11,002,567

Total

17,134,327

17,060,727(Financial Instruments)
1. Matters Concerning Status of Financial Instruments(1) Policy on Handling Financial Instruments
In an aim to proactively expand asset size and maintain stable cash distributions to unitholders, JPR adopts the asset management
policy of paying heed to efficiently combining the procurement of long-term funds that are stable and the procurement of short-term
funds that emphasize flexibility.
There may be cases where JPR will engage in derivative transactions, but such will be limited to hedging for interest rate fluctuation
risk and other hedging purposes. Please note that JPR is not engaged in derivative transactions at present.

40

(2) Description of Financial Instruments and Associated Risks, and Risk Management Structure
Tokyo Realty Investment Management, Inc. (TRIM), the asset management company of JPR, strives for risk management bycomplying with the JPR Asset Management Guidelines and other rules and regulations. The following outlines the description ofindividual financial instruments and the associated risks, and the risk management.
Deposits are exposed to risks of bankruptcy of the financial institutions holding the deposits and other credit risks, but the risks aremanaged through such measures as setting a minimum credit rating for the financial institutions holding the deposits.
Loans payable and investment corporation bonds are exposed to liquidity risks at the time of repayment/redemption, but the liquidity
risks are managed through such measures as procuring funds from the capital market by increasing capital, executing a commitmentline agreement with the main lending financial institutions, and also having statements of cash receipts and disbursements preparedby the financial division.
(3) Supplementary Explanation on Matters Concerning Fair Value, etc. of Financial Instruments
The fair value of financial instruments, aside from values based on market price, include values based on reasonable calculations
when there is no market price. Certain assumptions are used in calculating those values and there may be cases where the values
will vary when different assumptions are used.
2. Matters Concerning Fair Value, etc. of Financial Instruments
The following are the carrying values and fair values as of December 31, 2020 of financial instruments, and the difference between
these amounts. Please note that the following table does not include those for which discerning of fair value is recognized to be
extremely difficult (please refer to Note 3).
(Thousands of yen)
Carrying Value(Note 1)

Estimated Fair
Value (Note 1)

Difference(1)

Cash and deposits

28,598,680

28,598,680－(2)

Cash and deposits in trust

12,797,488

12,797,488－(3)

Short-term loans payable(6,000,000)(6,000,000)－(4)

Current portion of long-term loans payable(19,820,000)(19,879,337)

59,337(5)

Investment corporation bonds(32,500,000)(33,484,337)

984,337(6)

Long-term loans payable(138,200,000)(139,821,962)

1,621,962

The following are the carrying values and fair values as of June 30, 2021 of financial instruments, and the difference between theseamounts. Please note that the following table does not include those for which discerning of fair value is recognized to be extremely
difficult (please refer to Note 3).
(Thousands of yen)
Carrying Value(Note 1)

Estimated Fair
Value (Note 1)

Difference(1)

Cash and deposits

30,996,393

30,996,393－(2)

Cash and deposits in trust

12,606,208

12,606,208－(3)

Short-term loans payable(2,000,000)(2,000,000)－(4)

Current portion of long-term loans payable(20,500,000)(20,554,180)

54,180(5)Investment corporation bonds(35,500,000)(36,431,425)

931,425(6)

Long-term loans payable(138,500,000)(140,013,949)

1,513,949(Note 1) Liabilities are shown in parentheses.
(Note 2) Method of calculation of fair value of financial instruments(1) Cash and deposits, and (2) Cash and deposits in trust
As these financial instruments are settled within a short period of time, the fair value is approximately the same as the book value and is thus stated at thatbook value.
(3) Short-term loans payable
As these financial instruments are settled within a short period of time and have floating interest rates, the estimated fair value is approximately the same as
the book value and is thus stated at that book value.
(4) Current portion of long-term loans payable, and (6) Long-term loans payable
The fair value of these financial instruments is calculated based on the discounted cash flow method under which the total amount of principal and interests
are discounted by the rate assumed as being applicable in the event of a new drawdown whose term is corresponding to the remaining loan term.

41

(5) Investment corporation bonds
Of the fair value of these financial instruments, those with market price are measured based on market price and those with no market price are calculated inaccordance with (4) and (6) above.
(Note 3) Financial instruments for which discerning of fair value is recognized to be extremely difficult.
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust that are deposited by lessees of lease rental properties are not subject todisclosure of fair value because reasonable estimation of cash flows is recognized to be extremely difficult since there is no market price and also since it is difficult
to estimate the actual lease term. The following is the carrying value of tenant leasehold and security deposits, and tenant leasehold and security deposits in trust.

(Thousands of yen)
End of 38th Fiscal Period(as of December 31, 2020)

Category

End of 39th Fiscal Period(as of June 30, 2021)

Tenant leasehold and security deposits

10,100,242

9,973,833

Tenant leasehold and security deposits in trust

14,005,614

13,728,489(Note 4) Scheduled redemption of monetary claims to be due subsequent to the 38th fiscal period end (December 31, 2020)(Thousands of yen)Due in One
Year or Less

Due after
One Yearthrough Two
Years

Due after
Two Years
throughThree Years

Due afterThree Years
through FourYears

Due after
Four Years
through FiveYears

Due after
Five Years

Cash and deposits

28,598,680

－

－

－

－

－

Cash and deposits in trust

12,797,488

－

－

－

－

－

Scheduled redemption of monetary claims to be due subsequent to the 39th fiscal period end (June 30, 2021)(Thousands of yen)

(Note 5)Due in One
Year or Less

Due after One
Year throughTwo Years

Due after Two
Years throughThree Years

Due afterThree Years
through Four
Years

Cash and deposits

30,996,393

－

－

－

－

－

Cash and deposits in trust

12,606,208

－

－

－

－

－

Due after FourYears throughFive Years

Due after Five
Years

Amount of repayment or redemption of short-term loans payable, investment corporation bonds and long-term loans payable scheduled to be due subsequent to
the 38th fiscal period end (December 31, 2020)(Thousands of yen)

Short-term loans payable

Due in One
Year or Less

Due after One
Year throughTwo Years

Due after Two
Years throughThree Years

Due afterThree Years
through Four
Years

6,000,000

－

－

－

－

－

－

－

2,000,000

8,000,000－

22,500,000

19,820,000

18,500,000

21,000,000

15,000,000

23,900,000

59,800,000

Investment corporation bonds
Long-term loans payable

Due after FourYears throughFive Years

Due after Five
Years

Amount of repayment or redemption of short-term loans payable, investment corporation bonds and long-term loans payable scheduled to be due subsequent to
the 39th fiscal period end (June 30, 2021)(Thousands of yen)

Short-term loans payable

Due in One
Year or Less

Due after One
Year throughTwo Years

Due after Two
Years throughThree Years

Due afterThree Years
through Four
Years

2,000,000

－

－

－

－

－

－

2,000,000

5,000,000

3,000,000－

25,500,000

20,500,000

16,000,000

20,000,000

21,000,000

20,900,000

60,600,000

Investment corporation bonds
Long-term loans payable(Securities)
38th fiscal period (as of December 31, 2020)
Not applicable
39th fiscal period (as of June 30, 2021)
Not applicable42

Due after FourYears throughFive Years

Due after FiveYears

(Derivative Transactions)
38th fiscal period (as of December 31, 2020)
Not applicable as JPR entered into no derivative transactions
39th fiscal period (as of June 30, 2021)
Not applicable as JPR entered into no derivative transactions(Retirement Benefits)
38th fiscal period (as of December 31, 2020)
Not applicable as JPR does not have any retirement benefit plans
39th fiscal period (as of June 30, 2021)
Not applicable as JPR does not have any retirement benefit plans(Tax Effect Accounting)
1. Breakdown of Main Items that Caused Differences between the Effective Statutory Tax Rate and the Effective Tax Rate after
Applying Tax Effect Accounting
38th Fiscal Period(July 1, 2020 – December 31, 2020)
Effective statutory tax rate

39th Fiscal Period(January 1, 2021 – June 30, 2021)

31.46%

31.46%

Deductible cash distributions(29.80%)(28.42%)Other(1.65%)(3.03%)

Effective tax rate after applying tax effect accounting

0.01%

0.01%

(Adjustment)(Equity Method Income and Retained Earnings)
38th fiscal period (July 1, 2020 – December 31, 2020)
Not applicable as JPR does not have any affiliated companies
39th fiscal period (January 1, 2021 – June 30, 2021)
Not applicable as JPR does not have any affiliated companies(Transactions with Related Parties)
1. Parent Company and Major Corporation Unitholders
38th fiscal period (July 1, 2020 – December 31, 2020)
Not applicable
39th fiscal period (January 1, 2021 – June 30, 2021)
Not applicable
2. Affiliated Companies
38th fiscal period (July 1, 2020 – December 31, 2020)
Not applicable
39th fiscal period (January 1, 2021 – June 30, 2021)
Not applicable
3. Sister Companies
38th fiscal period (July 1, 2020 – December 31, 2020)
Not applicable
39th fiscal period (January 1, 2021 – June 30, 2021)
Not applicable
4. Directors and Major Individual Unitholders
38th fiscal period (July 1, 2020 – December 31, 2020)
Not applicable
39th fiscal period (January 1, 2021 – June 30, 2021)
Not applicable43

(Asset Retirement Obligations)
38th fiscal period (July 1, 2020 – December 31, 2020)
Not applicable
39th fiscal period (January 1, 2021 – June 30, 2021)
Not applicable(Segment Information)[Segment Information]
Disclosure is omitted as JPR is comprised of a single operating segment engaged in the property rent business.
[Related Information]
38th fiscal period (July 1, 2020 – December 31, 2020)
1. Information about Products and Services
Disclosure is omitted as sales to external customers for the single product and service unit is in excess of 90% of operating revenue
on the Statements of Income and Retained Earnings.
2. Information about Geographic Areas(1) Revenues from Overseas Customers
Disclosure is omitted as revenues from domestic external customers are in excess of 90% of total revenues on the Statementsof Income and Retained Earnings.
(2) Property, plant and equipment
Disclosure is omitted as the amount of JPR’s property, plant and equipment located in Japan are in excess of 90% of total
property, plant and equipment on the Balance Sheets.
3. Information about Major Customers
Disclosure is omitted as sales to any single external customer accounts for less than 10% of the operating revenue on theStatements of Income and Retained Earnings.
39th fiscal period (January 1, 2021 – June 30, 2021)
1. Information about Products and Services
Disclosure is omitted as sales to external customers for the single product and service unit is in excess of 90% of operating revenue
on the Statements of Income and Retained Earnings.
2. Information about Geographic Areas(1) Revenues from Overseas Customers
Disclosure is omitted as revenues from domestic external customers are in excess of 90% of total revenues on the Statementsof Income and Retained Earnings.
(2) Property, plant and equipment
Disclosure is omitted as the amount of JPR’s property, plant and equipment located in Japan are in excess of 90% of total
property, plant and equipment on the Balance Sheets.
3. Information about Major Customers
Disclosure is omitted as sales to any single external customer accounts for less than 10% of the operating revenue on the Statementsof Income and Retained Earnings.

44

(Investment and Rental Properties)
JPR owns office properties (urban commercial facilities), retail properties (urban retail properties) and urban multi-use facilities forleasing in Tokyo and other regions. The following is the carrying value on the Balance Sheets, amount of increase (decrease) during
the period and fair value of these investment and rental properties.
(Thousands of yen)
38th Fiscal Period(July 1, 2020 – December 31, 2020)
Carrying Value on the Balance Sheets
Balance at Beginning of Period

39th Fiscal Period(January 1, 2021 – June 30, 2021)

431,625,198

441,758,455

Amount of Increase (Decrease) during the Period

10,133,256(2,535,938)

Balance at End of Current Period

441,758,455
549,949,000

439,222,516

Fair Value at End of Period

549,331,000(Note 1) The carrying value on the balance sheets is the purchase cost less accumulated depreciation.
(Note 2) For the 38th fiscal period, the amount of increase is primarily attributable to the acquisition of Otemachi Financial City North Tower (11,541,078 thousand yen),and the amount of decrease is primarily attributable to the sale of JPR Hakata Bldg. (35.0% co-ownership interest) (1,011,451 thousand yen) and depreciation(2,085,275 thousand yen). For the 39th fiscal period, the amount of decrease is primarily attributable to the sale of JPR Hakata Bldg. (65.0% co-ownership interest)(1,866,664 thousand yen) and depreciation (2,100,231 thousand yen).
(Note 3) The fair value at end of the current period is the appraisal value or survey value as appraised by an outside real estate appraiser.

The income (loss) in the 38th and 39th fiscal periods for investment and rental properties are as presented in the “Notes to Statementsof Income and Retained Earnings.”(Per Unit Information)
38th Fiscal Period(July 1, 2020 – December 31, 2020)

39th Fiscal Period(January 1, 2021 – June 30, 2021)

267,570 yen

268,295 yen

8,181 yen

8,474 yen

Total net assets per unit
Net income per unit

(Note 1) Net income per unit is computed by dividing net income by the weighted-average number of units outstanding during the current fiscal period. Diluted net income
per unit has not been presented since no subscription rights to shares are outstanding.
(Note 2) Net income per unit was calculated based on the following data:

Net income (thousands of yen)

38th Fiscal Period(July 1, 2020 – December 31, 2020)
7,839,720

39th Fiscal Period(January 1, 2021 – June 30, 2021)
8,120,561－
7,839,720－
8,120,561

958,250 units

958,250 units

Amounts not attributable to ordinary unitholders (thousands of yen)
Net income attributable to ordinary investment units (thousands of yen)
Average number of units during the fiscal period(Subsequent Events)
Not applicable.

45

(7) Detailed Schedules
1) Schedule of Securities
Not applicable2) Status of Contract Amounts, etc. and Fair Value of Derivative Transactions and Forward Exchange Transactions
Not applicable3) Schedule of Assets Related to Real Estate

Asset Type

Current Assets
Noncurrent Assets(Property, plantand equipment)
Buildings
Structures
Machinery andequipment
Tools,
furniture andfixtures
Land
Constructionin progress
Subtotal(Beneficiaryinterests in trust)Buildings in
trust
Structures intrust
Machineryandequipment in
trust
Tools,
furniture andfixtures intrust
Land in trust
Constructionin progress intrust
Subtotal
Total
Intangible Assets
Leasehold
right
Other
Total

Accumulated Depreciation
Balance as of
Increase during Decrease during Balance as ofDepreciation
January 1,
Or Accumulated
the Period
the Period
June 30, 2021
during the2021
Amortization(thousands of(thousands of (thousands ofPeriod(thousands of(thousands of
yen)
yen)
yen)
(thousands of
yen)
yen)
yen)

Net Balance as ofJune 30, 2021
(thousands of yen)

－

－

－

－

－

－

－

66,826,208
73,557736,977
4,046－－

67,563,186
77,60321,751,330
32,353

991,1122,086

45,811,855
45,250909,004－－

909,004

614,208

24,850294,796

170,010

8,873－

178,884

88,622

9,432

90,262

133,341,887

28,313－

133,370,201－－

133,370,201

1,019

601

762

858

－

－

858

201,321,689

778,812762

202,099,738

22,486,514

1,027,483

179,613,224

95,206,152

565,825

1,378,199

94,393,778

37,637,077

1,032,103

56,756,701

135,419

4,204

4,693

134,930

82,3062,700

52,623

1,932,022

49,86743,653

1,938,236

1,471,289

27,392466,946

279,430

17,187

7,131

289,486

189,451

10,486

100,034

191,547,397－

1,133,404

190,413,992－－

190,413,992

330

16,153330

16,153－－

16,153

289,100,752
490,422,442

653,238
1,432,050

2,567,412
2,568,175

287,186,578
489,286,317

39,380,125
61,866,640

1,072,683
2,100,166

247,806,452
427,419,677

11,801,831－－

11,801,831－－

11,801,831

6,134
11,807,965

－
－

－
－

6,134
11,807,965

3,105
3,105

418
418

3,028
11,804,859

Remarks(Note 1) The “Increase during the Period” is due to construction works, etc.
(Note 2) The “Decrease during the Period” is due to the transfer to relevant accounts as a result of construction completion for construction in progress and construction inprogress in trust, and due to property sale, etc. for buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust and landin trust.

4) Schedule of Other Specified Assets
Not applicable465) Schedule of Investment Corporation Bonds

Name

Seventh Series ofInvestment Corporation
Bonds (Note 1)
Eighteenth Series ofInvestment Corporation
Bonds (Note 1)
Nineteenth Series ofInvestment Corporation
Bonds (Note 1)
Twenty-first Series ofInvestment Corporation
Bonds (Note 1)
Twenty-second Series ofInvestment Corporation
Bonds (Note 1)
Twenty-third Series ofInvestment Corporation
Bonds (Note 1)
Twenty-fourth Series ofInvestment Corporation
Bonds (Green Bonds)(Note 1)
Twenty-fifth Series ofInvestment Corporation
Bonds (Green Bonds)(Note 1)
Twenty-sixth Series ofInvestment Corporation
Bonds (Note 1)

Issue Date

Decrease
Balance as ofduring theJanuary 1, 2021
Period(thousands of(thousands of
yen)
yen)

Balance as ofJune 30, 2021
(thousands ofyen)

CouponRate(%)

Maturity Date

Dec. 14, 2006

4,500,000－

4,500,000

2.900

Dec. 14, 2026

May 31, 2013

2,000,000－

2,000,000

1.460

May 31, 2023

Feb. 5, 2014

5,000,000－

5,000,000

1.110

Feb. 5, 2024

Jul. 22, 2014

4,000,000－

4,000,000

1.278

Jul. 22, 2026

Dec. 4, 2014

3,000,000－

3,000,000

0.831

Dec. 4, 2024

May 31, 2018

3,000,000－

3,000,000

0.550

May 31, 2028

Jul. 31, 2019

5,000,000－

5,000,000

0.570

Jul. 31, 2029

Nov. 26, 2020

6,000,000－

6,000,000

0.510

Nov. 26, 2030

Mar. 16, 2021－－

3,000,000

0.760

Mar. 14, 2036

32,500,000－

35,500,000

Total

Use

Remarks(Note 2)

Unsecured(Note 1) These investment corporation bonds are equipped with the same rank rider limited among certain investment corporation bonds.
(Note 2) Funds are used for purchasing real estate or real estate beneficiary interest in trust (including accompanying expenses), repaying loans payable and redeeming
investment corporation bonds, etc.
(Note 3) Amounts of investment corporation bonds to be redeemed within five years after the date of the balance sheets are as follows.
Due in One YearDue after One YearDue after Two Years
Due after Three Yearsor Less
through Two Years
through Three Years
through Four Years(thousands of yen)(thousands of yen)(thousands of yen)(thousands of yen)

Investment corporation
bonds

－

2,000,000

47

5,000,000

3,000,000

Due after Four Years
through Five Years(thousands of yen)－6) Schedule of Loans Payable
LenderIncrease
Decrease
Balance as ofduringduringBalance as ofJanuary 1,
Current
Current June 30, 2021
2021
PeriodPeriod(thousands(thousands(thousands (thousandsof yen)of yen)of yen)of yen)Average
Interest
Rate(Note 2)
(Note 3)

Repayment
Date

Use

0.179%

Jul.5, 2021

(Note 4)

Average
Interest
Rate(Note 2)
(Note 3)

Repayment
Date

Use

Remarks

Short-Term Loans Payable
Mizuho Bank Ltd. (Note 5)
Total

Lender6,000,000－

4,000,000

2,000,000

6,000,000－

4,000,000

2,000,000

Increase
Decrease
Balance as ofduringduringBalance as ofJanuary 1,
Current
Current June 30, 2021
2021
PeriodPeriod(thousands(thousands(thousands (thousandsof yen)of yen)of yen)of yen)Unsecured/
Unguaranteed

Remarks

Long-Term Loans Payable (Note 1)
Mizuho Bank Ltd.

3,000,000－

3,000,000－

0.351%

Mar. 30, 2021

Mizuho Bank Ltd.

4,000,000－－

4,000,000

0.400%

Mar. 30, 2022

Mizuho Bank Ltd.

5,000,000－－

5,000,000

1.178%

Jun. 27, 2023

Mizuho Bank Ltd.

2,000,000－－

2,000,000

1.011%

Mar. 11, 2024

Mizuho Bank Ltd.

2,000,000－－

2,000,000

1.056%

Mar. 24, 2025

Mizuho Bank Ltd.

5,000,000－－

5,000,000

0.804%

Feb. 4, 2026

Mizuho Bank Ltd.

1,000,000－－

1,000,000

0.795%

Nov. 19, 2027

Mizuho Bank Ltd.

2,000,000－－

2,000,000

0.646%

Dec. 5, 2029

Mizuho Bank Ltd.

－

3,000,000－

3,000,000

0.675%

Mar. 31, 2031

MUFG Bank, Ltd.

4,000,000－

4,000,000－

0.889%

Jun. 25, 2021

MUFG Bank, Ltd.

1,000,000－－

1,000,000

0.873%

Aug. 31, 2023

MUFG Bank, Ltd.

5,000,000－－

5,000,000

0.510%

Mar. 25, 2024

MUFG Bank, Ltd.

2,000,000－－

2,000,000

0.633%

Dec. 13, 2024

MUFG Bank, Ltd.

1,000,000－－

1,000,000

0.638%

Aug. 8, 2025

MUFG Bank, Ltd.

5,000,000－－

5,000,000

0.600%

Aug. 29, 2025

MUFG Bank, Ltd.

3,000,000－－

3,000,000

0.593%

Sep. 5, 2025

MUFG Bank, Ltd.

－

4,000,000－

4,000,000

0.450%

Jun. 23, 2028

Sumitomo Mitsui Banking Corporation

2,000,000－

2,000,000－

0.351%

Mar. 30, 2021

Sumitomo Mitsui Banking Corporation

4,000,000－－

4,000,000

0.400%

Mar. 30, 2022

Sumitomo Mitsui Banking Corporation

2,500,000－－

2,500,000

1.033%

Jun. 27, 2022

Sumitomo Mitsui Banking Corporation

1,000,000－－

1,000,000

0.245%

Dec. 5, 2023

Sumitomo Mitsui Banking Corporation

3,000,000－－

3,000,000

0.300%

Jun. 26, 2025

Sumitomo Mitsui Banking Corporation－

2,000,000－

2,000,000

0.450%

Mar. 30, 2028

Development Bank of Japan, Inc.

820,000－

820,000－

1.449%

Jun. 25, 2021

Development Bank of Japan, Inc.

2,000,000－－

2,000,000

1.188%

Dec. 3, 2021

Development Bank of Japan, Inc.

2,000,000－－

2,000,000

1.056%

Mar. 24, 2025

Development Bank of Japan, Inc.

3,000,000－－

3,000,000

0.843%

Jun. 14, 2027

Development Bank of Japan, Inc.

1,000,000－－

1,000,000

0.795%

Nov. 19, 2027

Development Bank of Japan, Inc.

2,100,000－－

2,100,000

0.572%

Jun. 27, 2029

Development Bank of Japan, Inc.

－

800,000－

800,000

0.600%

Jun. 25, 2030

Shinsei Bank, Ltd.

2,000,000－－

2,000,000

1.134%

Dec. 5, 2024

Shinsei Bank, Ltd.

1,000,000－－

1,000,000

0.843%

Jun. 14, 2027

Shinsei Bank, Ltd.

1,000,000－－

1,000,000

0.525%

Sep. 25, 2028

Shinsei Bank, Ltd.

5,000,000－－

5,000,000

0.673%

Apr. 5, 2029

Shinsei Bank, Ltd.

1,000,000－－

1,000,000

0.675%

Sep. 24, 2030

Shinkin Central Bank

2,000,000－－

2,000,000

0.388%

Dec. 14, 2021

Shinkin Central Bank

3,000,000－－

3,000,000

0.663%

Jun. 4, 2027

Shinkin Central Bank

2,000,000－－

2,000,000

0.447%

Dec. 27, 2027

The Norinchukin Bank

2,000,000－－

2,000,000

0.388%

Dec. 14, 2021

The Norinchukin Bank

1,000,000－－

1,000,000

0.604%

Jun. 5, 2025

The Norinchukin Bank

2,000,000－－

2,000,000

0.405%

Jun. 25, 2027

The Norinchukin Bank

2,000,000－－

2,000,000

0.525%

Dec. 25, 2028

Mizuho Trust & Banking Co., Ltd.

3,000,000－－

3,000,000

0.586%

Feb. 4, 2030

Mizuho Trust & Banking Co., Ltd.

2,000,000－－

2,000,000

0.606%

Mar. 29, 2030

Mizuho Trust & Banking Co., Ltd.

2,000,000－－

2,000,000

0.675%

Dec. 24, 2030

48

(Note 4)

Unsecured/
Unguaranteed

Lender

Increase
Decrease
Balance as ofduringduringBalance as ofJanuary 1,
Current
Current June 30, 2021
2021
PeriodPeriod(thousands(thousands(thousands (thousandsof yen)of yen)of yen)of yen)Average
Interest
Rate(Note 2)
(Note 3)

Repayment
Date

Oct. 6, 2023

Use

Remarks

Long-Term Loans Payable (Note 1)
The Bank of Fukuoka, Ltd.

2,000,000－－

2,000,000

0.816%The Bank of Fukuoka, Ltd.

2,000,000－－

2,000,000

0.480%

Jul. 7, 2026

The Bank of Fukuoka, Ltd.

1,000,000－－

1,000,000

0.554%

Sep. 21, 2029

The Bank of Fukuoka, Ltd.

1,000,000－－

1,000,000

0.598%

Jan. 30, 2030

Aozora Bank Ltd.

1,000,000－－

1,000,000

0.534%

Aug. 23, 2024

Aozora Bank Ltd.

2,000,000－－

2,000,000

0.553%

Feb. 25, 2025

Aozora Bank Ltd.

1,000,000－－

1,000,000

0.574%

Feb. 25, 2025

Aozora Bank Ltd.

900,000－－

900,000

0.625%

Jul. 3, 2025

Aozora Bank Ltd.

500,000－－

500,000

0.525%

Sep. 25, 2028

Meiji Yasuda Life Insurance Company

1,000,000－－

1,000,000

1.042%

Feb. 5, 2025

Meiji Yasuda Life Insurance Company

3,200,000－－

3,200,000

0.813%

Jun. 21, 2028

Sumitomo Life Insurance Company

2,000,000－－

2,000,000

0.453%

Oct. 11, 2024

Sumitomo Life Insurance Company

1,000,000－－

1,000,000

0.583%

Jul. 20, 2029

Sumitomo Life Insurance Company

1,000,000－－

1,000,000

0.598%

Jan. 30, 2030

The Shinkumi Federation Bank

4,000,000－－

4,000,000

0.404%

Aug. 5, 2022

The Nishi-Nippon City Bank, Ltd.

1,000,000－－

1,000,000

0.388%

Dec. 14, 2021

The Nishi-Nippon City Bank, Ltd.

3,000,000－－

3,000,000

0.646%

May 27, 2026

Taiyo Life Insurance Company

1,000,000－－

1,000,000

0.969%

Sep. 24, 2024

Taiyo Life Insurance Company

1,000,000－－

1,000,000

0.811%

Jun. 5, 2028

Taiyo Life Insurance Company

1,000,000－－

1,000,000

0.675%

Dec. 24, 2030

The Chugoku Bank, Ltd.

2,000,000－－

2,000,000

0.816%

Oct. 6, 2023

The Chugoku Bank, Ltd.

1,000,000－－

1,000,000

0.661%

Mar. 25, 2026

The Iyo Bank, Ltd.

1,000,000－－

1,000,000

0.816%

Oct. 6, 2023

The Iyo Bank, Ltd.

1,000,000－－

1,000,000

0.598%

Jan. 30, 2030

National Mutual Insurance Federation ofAgricultural Cooperatives

2,000,000－－

2,000,000

0.388%

Dec. 14, 2021

Sompo Japan Insurance Inc.

2,000,000－－

2,000,000

0.759%

Dec. 25, 2023

Nippon Life Insurance Company

2,000,000－－

2,000,000

0.225%

Nov. 22, 2023

The Hachijuni Bank, Ltd.

1,000,000－－

1,000,000

0.209%

Sep. 24, 2021

The Hachijuni Bank, Ltd.

1,000,000－－

1,000,000

0.300%

Oct. 9, 2025

The Yamaguchi Bank, Ltd.

1,000,000－－

1,000,000

0.795%

Nov. 19, 2027

The Yamaguchi Bank, Ltd.

1,000,000－－

1,000,000

0.598%

Jan. 30, 2030

Resona Bank, Ltd.

2,000,000－－

2,000,000

0.438%

Sep. 30, 2022

NTT FINANCE CORPORATION

1,000,000－－

1,000,000

0.408%

May 31, 2023

The Kiyo Bank, Ltd.

1,000,000－－

1,000,000

0.598%

Jan. 30, 2030

The 77 Bank, Ltd.

1,000,000－－

1,000,000

0.408%

May 31, 2023

Daido Life Insurance Company

1,000,000－－

1,000,000

0.316%

Dec. 25, 2023

Daishi Hokuetsu Bank, Ltd.

1,000,000－－

1,000,000

0.396%

Nov. 21, 2022

The Chiba Bank, Ltd.

1,000,000－－

1,000,000

0.449%

Oct. 25, 2023

Tokio Marine & Nichido Fire InsuranceCo., Ltd.

1,000,000－－

1,000,000

0.299%

Jun. 27, 2023

The Hyakugo Bank, Ltd.

1,000,000－－

1,000,000

0.582%

Apr. 25, 2025

The Hiroshima Bank, Ltd.

1,000,000－－

1,000,000

0.396%

Nov. 21, 2022

Mitsui Sumitomo Insurance Company,
Limited1,000,000－－

1,000,000

0.310%

Oct. 2, 2026

Sumitomo Mitsui Trust Bank Limited

1,000,000－－

1,000,000

0.691%

Mar. 25, 2026－

1,000,000－

1,000,000

0.600%

Apr. 30, 2030

158,020,000

10,800,000

9,820,000

159,000,000

The Yamanashi Chuo Bank, Ltd.
Total
(Note 1)

Amounts of long-term loans payable to be repaid within five years after the date of the balance sheets are as follows.
Due in One YearDue after One YearDue after Two Years
Due after Three Yearsor Less
through Two Years
through Three Years
through Four Years(thousands of yen)(thousands of yen)(thousands of yen)(thousands of yen)
Long-term loans payable(Note 2)

20,500,000

16,000,000

20,000,000

Unsecured/
Unguaranteed

Due after Four Years
through Five Years(thousands of yen)

20,900,000

The average interest rates represent the weighted-averages during the fiscal period, and are rounded to the third decimal place. Furthermore, fees related to loanarrangement paid to the above lenders are not included.

(Note 3)21,000,000(Note 4)

Short-term loans payable are floating-rate loans payable. Long-term loans payable are fixed-rate loans payable.

49

(Note 4)

Funds are used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable and redemptionof investment corporation bonds, etc.

(Note 5)Of the 6,000 million yen in short-term loans payable that was borrowed on December 24, 2020 from Mizuho Bank, Ltd., JPR made early repayment of 3,000
million yen on March 16, 2021 and 1,000 million yen on April 30, 2021.

50

(8) Independent Auditor’s Report

51

52

53

(9) Other Notes (Information only)(Property and Equipment Leased to JPR)
38th Fiscal Period(July 1, 2020 – December 31, 2020)

39th Fiscal Period(January 1, 2021 – June 30, 2021)

No property and equipment was leased to JPR

No property and equipment was leased to JPR(Transactions with Interested Parties)
38th fiscal period (July 1, 2020 – December 31, 2020)
Attribute

Name ofCompany,etc.

Business
Description or
Occupation

Interested
party

Tokyo
TatemonoCo., Ltd.

Real estatebusiness

Asset
CustodianMizuho Trust& BankingCo., Ltd.

Bankingbusiness andtrust business

Percentage of Numberof Investment Units
Held Among Total
Number of Investment
Units

Transactions

Purchase ofreal estate
Sale ofreal estate
beneficiaryinterest
Borrowing of
long-term loans
payableInterest
expenses

3.05%－

Transaction
Amount(thousands ofyen)

Account

Balance at End
of Period(thousands ofyen)

11,400,000－－

1,435,000－－

2,000,000
15,230Long-term
loans
payableAccruedexpenses

7,000,000
747(Note) Transaction terms are determined based on prevailing market conditions.

39th fiscal period (January 1, 2021 – June 30, 2021)
Attribute

Name ofCompany,etc.

Business
Description or
Occupation

Percentage of Numberof Investment Units
Held Among Total
Number of Investment
Units

Interested
party

Tokyo
TatemonoCo., Ltd.

Real estatebusiness

3.05%

Asset
CustodianMizuho Trust& BankingCo., Ltd.

Bankingbusiness andtrust businessTransactions

Sale ofreal estate
beneficiaryinterest
Borrowing of
long-term loans
payableInterest
expenses－(Note) Transaction terms are determined based on prevailing market conditions.

54

Transaction
Amount(thousands ofyen)

2,665,000－
21,422

Account－
Long-term
loans
payableAccruedexpenses

Balance at End
of Period(thousands ofyen)－

7,000,000
591