Top REIT Announces Summary of Earnings Results for the Fiscal Period
Ended April 30, 2008 (From November 1, 2007, to April 30, 2008)
Operating revenue ¥4,817 million—The increased portfolio now comprises 13 properties.
Top REIT, Inc. (TOKYO: 8982) hereby announces its earnings results for the fiscal period ended April 30, 2008
(from November 1, 2007, to April 30, 2008).
This summary of earnings results has been prepared in accordance with generally accepted accounting
principles in Japan and Japanese law. Figures are in millions of yen with fractional amounts omitted except asotherwise noted.

1.

Performance for the Fourth Fiscal Period (From November 1, 2007, to April 30, 2008)(1) Business Results
Operating
Revenue

Change(%)(in millions of yen with fractional digits omitted, except as otherwise noted)
Operating
ChangeOrdinary
ChangeIncome(%)
Income(%)

Fourth Fiscal Period

4,817

2.2

2,353

4.6

1,842

(0.3)

Third Fiscal Period

4,715

4.2

2,250

(15.0)

1,848(20.5)Net Income to
Net Assets
Ratio (%)

Ordinary
Income toTotal Assets
Ratio (%)

Ordinary
Income toOperating
Revenue Ratio(%)

Net
IncomeNet Income
Per Unit(Yen)

Change(%)

Fourth Fiscal Period

1,841

(0.3)

11,884

2.2

1.1

38.3

Third Fiscal Period

1,847(20.5)

11,921

2.2

1.3

39.2

Note: Net income per unit is rounded to the nearest yen.

(2) Dividend(in millions of yen with fractional digits omitted, except as otherwise noted)
Dividend per
Unit (Yen)(Excluding
Dividend in
Excess ofEarnings)

Fourth Fiscal Period

Third Fiscal Period

Total Amount of
Dividends

Dividend in
Excess ofEarnings
per Unit(Yen)

Total Amount of
Dividends in
Excess ofEarnings

Dividend
Payout Ratio(%)

11,884

1,842

0

－

100.0

2.2

11,921

1,847

0

－

100.0

2.2

1

Dividend to
Net Asset
Ratio
(%)

(3) Financial Position(in millions of yen with fractional digits omitted, except as otherwise noted)
Net Assets
Net Assets
Net Assets
to Total Assets (%)
per Unit (Yen)

Total Assets
Fourth Fiscal Period

175,226

84,03748.0

542,175

Third Fiscal Period

145,972

84,01957.6

542,060

Reference: Net Assets
As of April 30, 2008
¥84,037 Million
As of October 31, 2007
¥84,019 Million
Note: Net assets per unit are rounded to the nearest yen.

(4) Cash Flows
Cash Flows fromOperating Activities(in millions of yen with fractional digits omitted, except as otherwise noted)
Cash and Cash
Cash Flows from
Cash Flows from
Equivalents at End of
Investing Activities
Financing Activities
PeriodFourth Fiscal Period

2,231(27,068)

26,752

14,904

Third Fiscal Period

5,000

(222)

(2,223)

12,9892. Forecast of Earnings Results for the Fifth Fiscal Period (From May 1, 2008, to October 31, 2008)(in millions of yen with fractional digits omitted, except as otherwise noted)
Operating
Revenue

Fifth Fiscal Period

5,597

Change(%)

16.2

Operating
IncomeChange(%)

2,622

Ordinary
IncomeChange(%)

Net
IncomeChange(%)

Dividend per
Unit (Yen)(Excluding
Dividend in
Excess ofEarnings)

1,938

5.2

1,937

5.2

12,500

11.5

Dividend
in ExcessofEarnings
per Unit(Yen)

0

Reference: Estimated net income per unit for the fifth fiscal period: ¥12,500

3. Others(1) Changes in Accounting Policies
a. Changes accompanying revisions in accounting standards, etc.
b. Changes aside from a above(2) Number of investment units issued
a. Number of units issued (including treasury units)
As of April 30, 2008
155,000 units
As of October 31, 2007 155,000 units
b. Number of treasury units issued
As of April 30, 2008
0 units
As of October 31, 2007 0 units

No.
No.

Explanation related to the appropriate application of the earnings results forecasts and other items
Certain forward-looking statements contained in this document such as business results forecasts are based on reasonable assumptions judged byand information currently available to Top REIT, and the actual results may differ materially due to various factors. Accordingly, Top REIT does
not guarantee any forecasted dividend amount.
The information above is translated from the Japanese “Kessan Tanshin” report, dated June 13, 2008. Consequently, discrepancies may exist, andTop REIT, Inc. makes no assurance or warranty with respect to the completeness or accuracy of this English translation. To guarantee complete
and accurate information, please refer to the original report in Japanese.

2

A. Main Developments at Top REIT (Since IPO)
Top REIT, Inc. (hereinafter “Top REIT”) was established on November 2, 2005, in accordance with the Investment
Trusts and Investment Corporations Law (Law No. 198 of 1951, as amended, hereinafter “ITL”). On March 1, 2006,
Top REIT (Securities Code: 8982) listed with 145,500 total units outstanding on the REIT Section of the Tokyo Stock
Exchange (hereinafter “TSE”). Top REIT issued new units (9,500) by private placement on March 23, 2006. The total
number of units issued is 155,000 as of April 30, 2008.
Top REIT acquired three office properties (one of which was an additional acquisition to an existing property) in the
fourth fiscal period in addition to the eleven properties acquired up until the end of the third fiscal period since the period
Top REIT listed on the TSE. As of the end of the fourth fiscal period, Top REIT holds thirteen properties with a totalacquisition price of ¥157,187 million.
Top REIT manages its assets with a strategic focus on two areas: (1) the “skilled management of a diversified portfolio,”and (2) the “optimal use of our sponsors’ strengths” in order to maximize unitholder value with stable growth in bothincome and portfolio assets over the medium to long term.
(Note) Unless otherwise stated, fractions less than a unit are omitted as to amounts or rounded as to ratios.
B. Operational Results for the Fourth Fiscal Period(a) Acquisitions and transfers of assets
Top REIT began the period under review with eleven properties under management (total acquisition price:¥130,846 million). Amidst the intensifying competition for the acquisition of excellent properties, Top REIT,
while making “optimal use of our sponsors’ strengths," collected information on many properties with a viewto proactively acquire properties, in particular office buildings in central Tokyo. Top REIT acquired thefollowing highly-competitive office buildings in the Tokyo metropolitan area: “Faret East Building Eighth
Floor (additional acquisition)” (acquisition price ¥571 million; acquisition date March 18, 2008), “Shiba-Koen
Building” (acquisition price ¥5,770 million; acquisition date March 19, 2008), “Harumi Island Triton Square
Office Tower Z” (acquisition price ¥20,000 million; acquisition date March 27, 2008). The total of theacquisition price is ¥26,341 million. Of the three properties acquired in the fiscal period under review, one
property (Faret East Building) acquisition was an additional acquisition to an existing property ofcompartmentalized ownership rights (“kubun shoyu-ken”). The other two properties were acquisitions madeby utilizing pipeline support functions that Top REIT has with its sponsors.
As a result, the total acquisition price of our assets under management at the end of the fourth fiscal period was¥157,187 million.
(b) Operation and management of portfolio properties
The basic operational strategy of Top REIT is to maintain and increase profits over the medium to long term by
maintaining and improving tenant satisfaction (“Tenant First" Policy) and keeping management costs at
appropriate levels.
Top REIT strives to maintain trust with its tenants, understand tenant needs using its property managementcompany (hereinafter “PM company”), and maintain high occupancy levels. As a result of an increase in thefloor space for existing tenants and the attraction of new tenants, the occupancy rate of our overall portfolio
properties reached 99.5%. In addition, based on the yearly management plans of individual properties, Top
REIT revised rents to attract new tenants and wholeheartedly implemented measures to improve earnings
through rent increases for existing tenants after grasping the discrepancies in these rents with current market
levels.

3

Regarding management of each property, while carrying out a follow-up role based on ensuring fullunderstanding of operational and management conditions and steadily implementing the property’s
management plans, Top REIT made efforts to reduce management costs for a portion of our managed assets.
Also, based on management plans, Top REIT carried out maintenance and repair works that contributed to theimprovement of the competitiveness of properties, and the maintenance and improvement of the property
functionality. The company kept costs at appropriate levels for planned maintenance and repair works andreviewed the timing for carrying out these works.
(c) Funds procurement
Top REIT procures funds with a financial policy based on stable financial management. During this period,
Top REIT procured a total of ¥6,700 million on March 19, 2008, as funds to acquire “Faret East Building
Eighth Floor” and “Shiba-Koen Building,” by utilizing short-term credit facility based on a basic loan
agreement. Also, on March 27, 2008, Top REIT procured a total of ¥21,900 million as funds to acquire“Harumi Island Triton Square Office Tower Z,” from multiple financial institutions, by long-term loan basedon the basic agreement and by utilizing short-term credit facility based on a basic loan agreement. As a result, atthe end of this fiscal period, our total outstanding loan amounts are ¥83,000 million. The loan/total asset ratio is
47.4%, interest bearing debt/total asset ratio is 48.0%, and the long term loan ratio (including the current portionof long-term loans payable) is 87.6%, and the fixed interest rate ratio at the end of this fiscal period is 75.1%.
The credit ratings of Top REIT as of the date of this report:
Rating agency
Moody’s Investors Service Inc.
Rating and Investment Information, Inc.

Issuer Rating [Outlook]
A2 [Stable]
AA- [Stable](d) Business results and dividends
As a result of business operations mentioned above, the company posted as operation results this fiscal period
operating revenue of ¥4,817 million, operating income of ¥2,353 million, ordinary income of ¥1,842 million,
and net income of ¥1,841 million.
As for dividends, Top REIT plans for the amount corresponding to profit dividends to be counted as a tax
deductible dividend by applying a “special treatment" of corporate tax (stipulated in Article 67-15 of theSpecial Taxation Measures Law), and the dividends per unit shall be ¥11,884, distributing the total amount of
unappropriated retained earnings for the current period excluding the amounts consisted from the less than one
yen per each unit.

C. Forecasts for Fifth Fiscal Period(a) Operational strategy of existing properties
The basic operational strategy of Top REIT continues to be “Tenant First” = “Maintenance and Improvementof Tenant Satisfaction,” as well as to maintain and improve profits in the medium to long term by keeping
management costs at appropriate levels. By strongly focusing our attention on maintaining trust with tenants
and securing leases for vacant properties, Top REIT will maintain stable occupancy rates over the medium tolong term and negotiate to revise rents to appropriate levels based on an understanding of conditions incommercial areas and current market rents.
While striving to be always fully aware of the operational and management conditions of each property, Top
REIT will continue to maintain and improve its revenues while developing effective policies to reduce
operational and management costs. In addition, by carrying out planned maintenance and repair works whose
purpose is to maintain and improve the functionality of our properties as well as increase their competitiveness,
we aim to ensure stable profits in the medium to long term.
4(b) Investment strategy of new properties
Top REIT is aiming for medium to long term improvements in dividends, through achieving external growthfrom the acquisition of new properties. Although the current environment is severe for the acquisition of new
and good quality properties, Top REIT continues to utilize even more the pipeline support functions from its
sponsor companies as well as: collect information on a wide range of new properties; select from a broad rangeof new property information concentrating on highly competitive office buildings but including the three areasof office buildings, retail properties and residential properties; and pursue both external growth and quality asset
management.
The policy of Top REIT is to restrict investment in a single property to within 20% of the total portfolio value
over the medium to long term. As of the end of this fiscal period, by externally growing its portfolio, Top REIT
was able to lower the ratio of acquisition value of the NEC head office building to the total acquisition value of
its portfolio to 26.7%. We are trying to reduce the concentration of risk in a single, specific property by steadily
moving forward with further external growth activities hereafter.
(c) Financial strategy
As for funds for the acquisition of new properties, Top REIT will select from among multiple procurement
measures, including making use of agile procurement of short-term loans based on a basic loan agreement withan uncommitted short-term facility and taking into consideration financial market trends.
For further acquisition of new properties, we continue to secure flexible financing arrangements and reduce
procurement risks by extending the period of loans and spreading out maturity dates in preparation for the riskof rising interest rates and refinancing. We will maintain financial soundness by keeping an appropriate level ofleverage.
(d) Forecast of earning results
The forecast of earnings results for the fifth fiscal period (From May 1, 2008, to October 31, 2008) is as follows.
Operating revenue¥5,597 million
Ordinary income¥1,938 million
Net income¥1,937 million
Dividend per unit
¥12,500
Dividend in excess of earnings per unit¥0
The forecast of earnings results for the sixth fiscal period (From November 1, 2008, to April 30, 2009) is asfollows.
Operating revenue¥5,618 million
Ordinary income¥1,954 million
Net income¥1,953 million
Dividend per unit
¥12,600
Dividend in excess of earnings per unit
¥0
(Note) Forecasts presented above are based on certain assumptions at this moment in time. Actual operating
revenue, ordinary income, net income, dividend per unit and dividend in excess of earnings per unit may differ
according with changes in circumstances. Top REIT does not guarantee any forecasted dividend amount.

5D. Financial Statements(a) Balance Sheet
PeriodAccounting Item

Third Fiscal Period

Fourth Fiscal Period(As of October 31, 2007)(As of April 30, 2008)

Value

(％)

(Thousand yen)

Change
Value

Value

(％)

(Thousand yen)(Thousand

(％)

yen)

（Assets）
I Current Assets
Cash and deposits

4,745,435

6,054,171

1,308,735

Cash and deposits held in trust account8,243,700

8,850,048

606,348

Tenants receivables

32,84741,961

9,114

Prepaid expenses

38,30463,88025,576

Deferred tax assets
Corporate tax refund receivable
Consumption tax refund receivable
Other current assets
Total Current Assets

21

2,962

2,940

1,863

3,336

1,473

-

398,573

398,573

415

395
9.0

13,062,588

15,415,329

(20)
8.8

2,352,741

18.0

II Fixed Assets
1. Investment Properties
Buildings (Including accompanying
facilities)
Accumulated depreciation
Structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools and furniture
Accumulated depreciation-

1,104,579
-

6,855

-

-

144

-

1,097,723

3,485

3,485

10,92910,92911,436
-

507

-

Land

1,097,723

3,630

506
-

21

-

484

484

4,885,146

4,885,146

49,266,942

6,292,406

552,670

133,277

170,234

57,934

Buildings in trust (Including accompanying
facilities)
Accumulated depreciation
Structures in trust

45,681,902
2,703,775
56,506

Machinery and equipment in trust

112,956

Accumulated depreciation

13,554

Accumulated depreciation
Land in trust
Total Investment Properties

3,653,406

475,899

Accumulated depreciation

Tools and furniture in trust

52,920,348
42,978,127

629,045419,393

76,375
190,814

99,401

20,58034,2796,786

35,96527,492

10,44989,174,514
132,698,929

90.9

25,516

7,330

103,572,802

14,398,288

159,585,937

91.1

26,887,007

20.3

2. Intangible Assets
Other intangible assets
Total Intangible Assets

340

318

340

0.0

318

(21)
0.0

(21)

(6.3)

3. Investment and Other Assets
Leasehold and security deposits

10,00010,000-Long-term prepaid expenses

60,09979,91819,818(18,242)

Deferred tax assets

57,57039,328Other investments

48,707

67,588

Total Investment and Other Assets
Total Fixed Assets

18,881

176,3770.1

196,835

0.1

20,457

11.6

132,875,647

91.0

159,783,091

91.2

26,907,443

20.3

III Deferred Assets
Organization expenses (initial expense)

34,020Total Deferred Assets

34,0200.0

28,3500.0(5,670)(16.7)

145,972,255

100.0

175,226,770

100.0

29,254,514

20.0

Total Assets

28,350

6(5,670)Period
Accounting Item

Third Fiscal Period

Fourth Fiscal Period(As of October 31, 2007)(As of April 30, 2008)

Value

(％)

(Thousand yen)

Value

Change(％)(Thousand yen)

Value
(Thousand yen)(％)

(Liabilities)
I Current Liabilities
Accounts payable

57,858158,370

100,512-

10,300,000

10,300,000-

16,700,000

16,700,000

Other account payable

240,694308,917

68,223

Expenses payable

143,390

181,845

38,454

55

42

(12)

Consumption tax payable

171,120-(171,120)

Rents received in advance

710,169

718,375

8,206-

11,048

11,048

2,044

3,326

1,282

Short-term debt
Current portion of long-term loans
payableIncome taxes payable

Derivative debt
Other current liabilities
Total Current Liabilities

1,325,332

0.9

28,381,926

16.2

27,056,593

2,041.5

II Fixed Liabilities
Long-term debt
Tenant lease and security deposits

54,400,000

56,000,000

1,600,000-

169,769

169,769

6,065,431

6,526,349

460,917

Tenant lease and security deposits intrust
Derivative debt
Total Fixed Liabilities
Total Liabilities

162,131

111,639(50,491)

60,627,563

41.5

62,807,759

35.8

2,180,195

3.6

61,952,895

42.4

91,189,685

52.0

29,236,789

47.2

82,260,100

56.3

82,260,100

46.9

-

-

（Net Assets）
I Unitholders’ Equity
1.

Unitholders’ equity

2.

Reserves

Retained earnings at period end

1,847,845

1,842,032(5,812)

Total Reserves

1,847,845

1.3

1,842,032

1.1(5,812)(0.3)

Total Unitholders’ Equity

84,107,945

57.6

84,102,132

48.0(5,812)(0.0)

II Adjustments for Valuation, Conversion,etc.
Deferred hedge losses(88,585)(65,047)

23,537

Total Adjustments for Valuation,
Conversion, etc.

(88,585)(0.0)(65,047)(0.0)

23,537

26.6

Total Net Assets

84,019,360

57.6

84,037,085

48.0

17,7250.0

Total Liabilities and Net Assets

145,972,255

100.0

175,226,770

100.0

29,254,514

20.0

7

(b) Income Statement
PeriodFourth Fiscal Period

Third Fiscal Period(From May 1, 2007 to October 31, 2007)

Accounting Item

Value

(％)

(Thousand yen)

(From November 1, 2007 to April 30,

Change

2008)
Value

(％)

(Thousand yen)

Value
(Thousand yen)(％)

1. Operating Revenue
Rental revenue
Other rental revenue

4,695,566
19,6594,802,941
4,715,226

100.0

14,425

4,817,366

100.0

102,1402.2

2,464,319

51.2

(693)

(0.0)

2,353,047

48.8

102,833

4.6

24,2920.5(18,951)(43.8)

534,389

11.1

89,78920.2

1,842,951

38.3(5,907)(0.3)

1,842,951

38.3(5,907)

(0.3)

1,008

0.0

(30)

(3.0)

1,841,942

38.2(5,876)(0.3)

2. Operating Expenses
Rental expenses

1,970,563

1,974,314

Asset management fees

367,691

367,640

Asset custody fees

6,567

6,993

Administrative agency fees

55,20855,964

Officers remuneration

3,600

3,600

Audit fee

10,00010,000

Other operating expenses

51,381

Operating Income

2,465,012

52.3

2,250,213

47.7

45,806

3. Non-Operating Income
Interest received

16,061Other non-operating income

27,182

23,12343,2440.9

1,169

4. Non-Operating Expenses
Interest paid

414,765499,672

Amortization of funding costs

5,670

5,670

Other non-operating expenses

24,164

Ordinary Income
Net income before income taxes
Corporate residents and business taxes
Corporate tax adjustment
Net Income
Retained earnings brought forward

444,599

9.4

1,848,858

39.2

1,848,858

39.2

1,039
(0)

29,046

1,003
1,039

0.0

1,847,819

39.2

4

26

90

64

1,847,845

1,842,032(5,812)

Unappropriated Retained Earnings
at the End of Period8(c) Statement of Cash Flows
Item

I

Third Fiscal Period

Fourth Fiscal Period(From May 1, 2007 to October 31, 2007)(From November 1, 2007 to April 30, 2008)

Value (Thousand yen)

Value (Thousand yen)

Cash Flows from Operating Activities:
Net income before income taxes

1,848,858

1,842,951

Depreciation

927,266

987,715

5,670

5,670

Amortization of organization expenses
Amortization of trademark

21

21Interest received and on securities(16,061)(23,123)

Interest paid

414,765499,672(Increase)/decrease in tenants receivables(2,105)(9,114)

2,052,417(390,616)(Increase)/decrease in corporate tax refund receivable(1,290)(1,473)(Increase)/decrease in prepaid expenses

11,686(25,576)(Increase)/decrease in other current assets

(415)

38

Increase/ (decrease) in accounts payable

11,260(7,563)

Increase/(decrease) in other accounts payable(10,787)(7,002)

Increase/(decrease) in consumption tax payable

171,248(171,248)

Increase/(decrease) in rents received in advance(21,706)

8,206(Increase)/decrease in long-term prepaid expenses(22,365)(19,818)(Increase)/decrease in consumption tax refund

Other, net(15,107)(17,598)

Subtotal

5,353,354

2,671,138

Interest received
Interest paid
Income taxed paid
Net cash provided by operating activities

16,061

23,104(367,165)(461,826)(1,413)(1,016)5,000,836

2,231,400

II Cash Flows from Investing Activities:
Purchase of investment properties
Purchase of investment properties in trust-(6,003,688)(127,364)(21,697,104)-

171,314

Proceeds of tenant lease and security deposits in trust

33,712575,926

Payments of tenant lease and security deposits in trust(128,365)(115,009)

Net cash flow used in investing activities(222,016)(27,068,561)

Proceeds from short-term debt-

10,300,000

Repayments of short-term debt

(20,900,000)-

Proceeds from long-term debt

21,000,000

18,300,000

Dividend payments(2,323,760)(1,847,755)

Net cash provided by (used in) financing activities(2,223,760)

26,752,245

IV Net change in cash and cash equivalents

2,555,060

1,915,083

V Cash and cash equivalents at beginning of period

10,434,076

12,989,136

VI Cash and cash equivalents at end of period

12,989,136

14,904,219

Proceeds of tenant lease and security deposits

III Cash Flows from Financing Activities:

9About Top REIT
Top REIT, Inc. (listed on the Tokyo Stock Exchange with securities code 8982) manages a diversified portfolio investing
primarily in the three real estate sectors of office, retail and residential properties in Japan. Top REIT strives to build afoundation upon which to stably and steadily expand its portfolio size by aiming to diversify and maximize investment
opportunities rather than setting limits on the scope of usage of its investment assets. At the same time, Top REIT believes thatwhile striving for external growth, it is also possible to strive for quality of its portfolio assets by making investment choices
based on a careful selection of highly competitive real estate from a wide range of investment targets.
With respect to acquiring, operating and managing portfolio assets, Top REIT strives to steadily and stably achieve growth of
its portfolio assets through making maximum use of its: broad network comprising The Sumitomo Trust & Banking Co., Ltd.,
Nippon Steel City Produce, Inc. (member of the Nippon Steel Group), Oji Real Estate Co., Ltd. (member of the Oji Paper
Group) and the trading partner companies belonging to the sponsor companies’ groups; real estate development capabilities;
agency capabilities; operational and management capabilities; investment management capabilities; and technical capabilities.
Moreover, to realize each strategy, Top REIT entrusts the management of these assets to its asset management company (AssetManager), which was established by gathering from our sponsor companies various professionals from fields such as real estatedevelopment, brokerage, property operation and management, and investment management. Top REIT’s Asset Manager Top
REIT Asset Management Co., Ltd. has inherited know-how and principles concerning real estate and finance that have been
accumulated by the sponsor companies over many years and strives to maximize the value for the unitholders of Top REIT.
Top REIT has acquired an A2 rating from Moody’s Investors Service, Inc., and an AA- rating from Rating and Investment
Information, Inc. (R&I).
For more information, please visit our website http://www.top-reit.co.jp/english/
Contact for inquiries in Japanese;
Top REIT Asset Management Co., Ltd. (Asset Manager)
Hiroyuki Hayashi, Director, General Manager, Planning & Administrative Department+81-3-3243-2181
Contact for inquiries in English:
Top REIT Asset Management Co., Ltd. (Asset Manager)
E-mail address: info-top@top-reit-am.co.jp

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