34th Fiscal Period

Securities code 8955

Presentation Material
For the 34th Fiscal Period Ended December 2018
February 19, 2019
(Asset Manager)
Tokyo Realty Investment Management, Inc.

Table of Contents and Disclaimer

Disclaimer

Table and Contents

1. Characteristics of JPR

2p

2. Operational Status and Growth Strategy

4p2-1. Summary of Financial Results

5p2-2. Internal Growth Strategy

7p2-3. External Growth Strategy

15p

2-4. Financial Strategy

19p

2-5. Sustainability

20P

3. Financial Results and Operating Forecasts

25p

4. Appendix

35p

5. Glossary

57p(Asset Manager)Tokyo Realty Investment Management, Inc.
Financial Instruments Exchanger (investment management business)
Registration Number: No.362 (Kinsho) Head of Kanto Local Finance Bureau• This material contains information that constitutes forward-looking
statements. Such forward-looking statements are made by Japan Prime
Realty Investment Corporation (JPR) and Tokyo Realty Investment
Management, Inc. (TRIM) based on information currently available, and are
therefore not guarantees of future performance. Actual results may differ
materially from those in the forward-looking statements as a result ofvarious factors including known or unknown risks and uncertainties.
• This material is solely for the purpose of providing information, and is notintended for the purpose of offering or soliciting investment, or as a meansof marketing activities. Please refer any inquiries for possible purchase ofinvestment units or investment corporation bonds of JPR to your securities
companies.
• Although JPR takes all possible measures to ensure the accuracy of thecontent provided in this material (including references to legislation andtaxation), it makes no guarantee as to the accuracy or reliability of thecontent. Furthermore, the content may be subject to change without priornotice.
• The photos used in this material include those of the assets other than what
JPR owns or plans to acquire. Please note that for assets indicated as landwith leasehold interest, JPR owns only the land and does not own any
building on it.
• Unless otherwise noted, the figures indicated in this material are rounded
down to the nearest specified unit for monetary amounts and space areas,
and rounded off to the nearest specified unit for percentages and otherfigures. Accordingly, the sum totals of monetary amounts or percentages ofrespective items may not match the sum totals of actual figures.

Cover photograph：JPR Shinsaibashi Bldg.

1

JAPAN PRIME REALTY INVESTMENT CORPORATION

1. Characteristics of JPR

2

1. Characteristics of JPR

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

Japan Prime Realty Investment Corporation(abbreviated as JPR)

Securities code

8955

Listing dateJune 14, 2002 (16.5 years since listing)End of fiscal
periodOperational
standard of
portfolio(Target investment
ratio)

Asset Manager

Sponsors(shareholding
ratio)

June and December(Ratio by asset class)
Office 70～90% / Retail 10～30%(Ratio by area)
Tokyo 80～90% / Other cities 10～20%

Tokyo Realty Investment Management Inc.
(abbreviated as TRIM)
Tokyo Tatemono (52%)
Yasuda Real Estate (18%)
Taisei Corporation (10%)
Sompo Japan Nipponkoa Insurance (10%)
Meiji Yasuda Life Insurance (10%)■Characteristics of JPR
track record of stable management for over 16
1 Ayears
Since listing, JPR has steadily expanded its asset size while enhancing the qualityof its portfolio.

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

3 Superiority of a developer-sponsored REIT

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

internal growth through high occupancy
4 Continuous
rate and upward revision of rents
The average occupancy rate of the entire portfolio has stayed at 97% or higher
since the 26th fiscal period ended December 2014, and upward revision of rents
continued to surpass downward revision by value for 8 straight fiscal periods.

Asset size
(After the asset replacement)

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

Tokyo(Asset class)

Office(planned) acquisition price and ratio
of properties from sponsor pipelines(After the asset replacement)

315.4 bn. yen・ 72.5 %Upward revision of rents

9 consecutive fiscal
periods(Jun. ’14 ～ Dec. ’18)

of a financial base that is stable over
5 Establishment
the long termWith a credit rating of AA- (Stable), JPR has established a financial base centeringon long-term, fixed-interest rate debts with a focus on stability.

84.5 %
76.8 %

LTV

40.5 %
Ratio of long-term, fixed interest rate debts

100.0%
Credit rating

1. The indicated figures are as of the date of this document. For Asset size, Investment ratios and (Planned) acquisition price and ratio of properties
from sponsor pipelines, the indicated figures are those after the Asset Replacement is completed.
2. Properties from sponsor pipelines refer to properties acquired from sponsors, etc. and properties acquired based on information provided bysponsors. Sponsors, etc. represent the five sponsor companies of JPR, their affiliated companies and special purpose companies (SPCs) in which thesponsors have made equity investment. Ratio of properties from sponsor pipelines refers to the ratio of (planned) acquisition price of properties
from sponsor pipelines over the total (planned) acquisition price of the entire portfolio.

AA- (stable)
S&P A (stable)
R&I

3

JAPAN PRIME REALTY INVESTMENT CORPORATION

2. Operational Status and Growth Strategy

42-1. Summary of Financial Results

Status of Distribution per unit and NAVDistribution per unit (DPU) and NAV per unit have continued to increase stably over a long periodof timeDPU 7,326 yen

NAV per Unit 341,007 yen

Continuing a record high since listing
Compared with forecast +46 yen
Period-on-period comparison +81 yen / +1.1 %Continuing to increase steadily
Period-on-period comparison+11,162 yen / +3.4 %(Forecast DPU：7,280 yen)

DPU(actual)

DPU(compared with forecast)

7,326(yen/unit)

7,048

7,000

6,351 6,419
6,000

NAV per unit

6,006

6,588

7,213 7,223 7,245

6,756

6,150

5,000

341,007329,845
320,060(yen/unit)

306,192
300,000

283,129
273,915
263,026
251,804
250,000
230,437
220,672
215,648
200,000

4,0000150,0000
Dec. '13 Jun. '14 Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 (period)

Dec. '13 Jun. '14 Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18(period)52-1. Summary of Financial Results

Business Environment Perception, results and outlook

Plans for the 34th fiscal period ended Dec. 2018 progressing steadily thanks to a buoyant officeproperty leasing market and JPR continued to achieve stable growth.

Results

Business
environment
perception

Emphasis was placed on “continuation of contract renewals with upward revision of rents,” “measures to increase NOI,”“continuous external growth” and “stable fund procurement.”
Internal Growth Strategy

External Growth Strategy

Financial Strategy• Office demand from companies is still robust.
• Leasing of large-scale office properties scheduled forcompletion by 2020 in Central Tokyo appears to be
progressing steadily• Vacancy rates in Central Tokyo fell to a historically low
level, and rents also continued to rise.
• The supply and demand balance continued to tighten in
major regional cities as well.

• Real estate prices in Central Tokyo have mostly reachedthe upper limit• Properties in regional cities are also hard to acquire at
appropriate prices, with their cap rates dropping further• While the long-term interest rate temporarily rose slightly
due to the revision of the monetary policy by the Bank ofJapan (BOJ) in July 2018, interest rates are expected toremain stable under the control of BOJ.
• Amid rising concern about political and economic risks
worldwide, cutbacks of monetary easing schemes in the
U.S. and Europe are proceeding at a slower pace.
• The BOJ continues its monetary easing measures.

• Occupancy rate based on concluded contracts
99.2%(previous period 98.2%)• Upward revision upon contract renewal (monthly rent,net)+7.2 million yen• Not much information was available in the for-sale realestate market on properties that suit JPR’s acquisition
criteria• Despite collecting and investigating property informationfrom the sponsors and through proprietary channels likeclose business connections, no acquisition was closed andcompleted【Debt procurement result in the 34th fiscal period (Dec. ’18)】• Average maturity(Before refinancing) 5.6 years ⇒ (After refinancing) 6.7
years• Average debt interest rate
(Before refinancing) 0.92% ⇒ (After refinancing) 0.54%• Number of lender 30 institutions ⇒ 32 institutions• Continue vigorously selective investments in officeproperties in Tokyo and urban retail properties, with afocus on their location and quality.
• With the number of properties in the sponsors’ pipelines
steadily increasing, discussions on acquisition will be madeafter discerning the occupancy status, etc. of theproperties• Also investigate the addition of asset types.

• Focus on refinances with an emphasis on flattening of
repayment amount of each fiscal period and lengthening
the maturity of debts• Expand the scope of financial institutions to deal with• Diversify funding methods• Enhance refinance risk tolerance by expanding liquidity on
hand and other measures• Raising of rents upon tenant replacement (monthly rent,net)+6.5 million yen

Outlook• Occupancy rate based on concluded contracts during theperiod remained above 99%.
• The revision of rents made progress as planned.

• The favorable market environment is assumed to continue.
• The high occupancy rate is expected to be maintained, andthe revision of rents is assumed to make steady progress.
• Deterioration of business confidence is feared in face ofChina’s economic slowdown and the consumption tax hikein October 2019.
• Continue to implement both measures to maintain andimprove building competitiveness and measures toimprove tenant satisfaction.

6

2-2. Internal Growth Strategy

Occupancy Status

Almost full occupancy was maintained from the start of the period.
Occupancy rate are expected to remain stable at a high level in and after the Jun. ’19 period.
■ Move-Ins/Move-Outs■ Occupancy Rate
Occupancy rate based on concluded cntracts
Occupancy rate based on generated rents

(%)

100

97.4

98

97.8

98.3

98.4

99.2

99.4
98.7

98.2
98.3

97.9

97.6

98.3

96.9

96.5

• In the Jun. ’19 period, move-outs are expected to remain at a low level and theprospects for leasing up are also good.
(Change in move-in/ move-out spaces and forecast)

98.9
97.3

96

98.5

• In the Dec. '18 period, leasing up of vacancies outpaced move-outs.

End of Jun. ’18 period
Vacancyspace

Dec. ‘18
move-in/move-out net
space

End of Dec. ’18period
Vacancyspace

Jun. ‘19
Assumed movein/move-out net
space

End of Jun. ‘19 period
assumed vacancy
space

5,787 m2

-1,818 m2

3,939 m2

112 m2

4,134 m2

(Move-in/ move-out spaces and major move-in/move-out properties

94

Dec. '18

920

Jun. '19
Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 Dec. '19 (period)(forecast)(forecast)(forecast)(period)■ Average rent free period

The most recent
5-period average
9,645 m2

6
3
2.3

2.4

1.9

1.8

2.0

1.5

1.8

Dec. '15

Jun. '16

Dec. '16

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19 (period)

5,039

6,858

6,184

6,071

Major Move-out'18.12 Kawasaki DICE Bldg.

(month)0Move-out(period)

95.2

Shinjuku Square Tower
JPR Dojima Bldg.
'19.6 JPR Harajuku Bldg.
(forecast)Olinas Tower
BYGS Shinjuku Bldg.
'19.12 Kanematsu Bldg.
(forecast)
Kanematsu Bldg. Annex(m2)

The most recent
5-period average
10,415 m2
Major Move-in

529 m2494 m2429 m2
1,708 m2
701 m2675 m2
1,222 m2
2,291 m2

Kawasaki DICE Bldg.
Shinjuku Square Tower
JPR Dojima Bldg.
JPR Harajuku Bldg.
Olinas Tower
Kawasaki DICE Bldg.
Kanematsu Bldg.

1,543 m2
494 m2572 m2
1,706 m2
701 m2529 m2
1,222 m2

(forecast)
1. Occupancy rate based on concluded contracts and occupancy rate based on generated rents represent period-average figures.
2. The figures for the occupancy rate based on concluded contracts and the occupancy rate based on generated rents for the 35th fiscal period (Jun. ‘19)
are estimates that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period. The respective figures for the 36th
fiscal period (Dec. ‘19) are estimates based on assumptions by JPR regarding move-ins and move-outs becoming effective in the fiscal period.

7

2-2. Internal Growth Strategy

Status of Rent

With steady progress made in upward revision of rents and raising of rents upon tenant replacement,
office rents continued to increase■ Rent Revisions

Dec. ‘18(million yen)

+30

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

Upward revision amountRate of upward revision

Ratio of contracts with upwardrevision+7.4 million yen (monthly rent)

+7.5%

48.1%

Increase in monthly rent upontenant replacement

Dec. ‘18

Upward revision
Downward revision(million yen)

+15

Upward revision
undernegotiation: 3.1
million yen

+20

+10.9

+14.6

+10.0

+7.4

-2.8

-5.8

-3.9

-3.0

-0.2

+12.1

Dec. '16

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19 (period)

Number of contracts withupward revision (Left axis)

100

Dec. '16

Jun. '17

44.6

Ratio of contracts withupward revision (Right axis)

45.9

0Dec. '17

+4.7

+3.7

+9.0

+7.2

+6.0

-0.3

-1.3

-1.0

-4.7

-0.6

-1.7

Dec. '16

Jun. '17

Dec. '17

Jun. '18

Dec. '18-10
Jun. '19 (period)(Ratio of contracts with increase in rent upon tenant replacement)

200
36.7

+5.1

(forecast)(Ratio of contracts with upward revision)

32.7

Upward revision
Downward revision

-5

-4.0

(forecast)

Number of contract
renewals (Left axis)

76.9%

+0

-10

(

+27.6%+5+0(No. ofcontracts)+7.2 million yen(monthly rent)

+10

+23.2

+10

Ratio of contracts with increase inRate of increase inrent upon tenant replacement rent upon tenant replacement

Jun. '18(%)(No. ofcontracts)

80

50

48.1

40

25

0
Dec. '18 (period)

0

1. Figures in “Rent Revisions” are values excluding the land rent of the Otemachi Tower (Land with Leasehold Interest).

Number of tenant
replacements (Left axis)

81.8

Number of contracts with increase
in rent upon tenant replacement (Left axis)

71.0

67.6

Ratio of contracts with increase(%)
in rent upon tenant replacement (Right axis)

76.9

100

61.0

50

Dec. '16

Jun. '17

Dec. '17

Jun. '18

0Dec. '18 (period)8

2-2. Internal Growth Strategy

Status of Rent

With rents still being revised upward, the gap in rents will widen further due to solid demand.
■ Status of Gap in Rent (Office)■ Status of Average Rent (existing office properties, all area)(yen/tsubo)+45
Higher than market
rent

マ
ー
ケ
ッ
ト
賃
料
以
上

(million yen)

Lower than market rent

Higher than market range (new contract, etc.)

19,000Within market range

Higher than market range (except for new contract)

18,000+30

Ratio by period-on-period+0.6%

17,000

+0.8%

+1.0%

+0.4%

+1.7%

+0.7%

16,000+15

15,000Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 (period)+0
Gap in rents

Lower than market
rent

マ
ー
ケ
ッ
ト
賃
料
未
満

-4.1%

-15

-30
Jun. '19

Dec. '19

Jun. '20

Dec. '20(period)■ Change in Average Rents by Area (existing office properties)(period-on-period
comparison -0.9%)(Reference)
Gap in actual rents-8.8%(period-on-period-1.3%)◼ Percentages of space◼ Ratio of change in upward revisionby the time of contract renewal
Jun. ‘21 fiscal
period later

14%Jun.’19 fiscal
period21%

Four times
Three times 3%
11%Dec.’20 fiscal
period14%

Jun.’20 fiscal
periodDec. ‘19 fiscal
period

19%

Twice
19%

Total 64
contracts

Central Tokyo(yen/tsubo)

21,000Greater Tokyo

Ratio by period-on-period

Other cities
+0.7%

+1.5%

+1.0%

+0.9%

+0.3%

+1.1%

-0.3%

+0.1%

+0.6%

+0.3%

+1.4%

+0.5%

+2.1%

+0.8%

+4.7%

+1.0%

+0.5%

19,00017,00015,00013,000

Once
67%

32%

1. “Market rent” and “Market range” refers to rent level set by TRIM for office buildings held by JPR based on assessment of CBRE Inc. and advice from Tokyo Tatemono.
2. “Gap in rents” refers to the difference between the market rent (Jun. ‘19~ Dec. ‘20) and the ongoing rent, and “Gap in actual rents” refers to the difference between
the top of market range and the ongoing rent.
3. “Leased floor space by rent level” expresses for each rent level the sum total of the floor space of tenants whose contracts will come up for renewal Jun. ‘19 - Dec. '20.

+0.8%

11,000Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 (period)
1. “Existing office properties” refer to properties held continuously since the Dec. ‘15 period.
2. Average rent indicates the assumed average rent at full occupancy.

92-2. Internal Growth Strategy

Internal Growth Initiatives

On top of measures to achieve continuous raising of rents and effective value enhancement,
energetically endeavor to reduce expenses■ Example of construction works for value enhancement(Olinas Tower)■ Basic Strategy
Set target rents, the target for raising rents for new contracts andcontract renewals, for respective office properties. By clarifying thetarget, aim to conduct strategic negotiations for raising rents andmaximizing rents upon tenant replacement

In addition to reinforcing property competitiveness, proactively invest
in interior fittings and facilities, etc. that meets tenant needs, with anintention to raise rents for new contracts

Reinforce investments for2. value enhancement

Deliberately responding to tenants and creating safe and secured
environments are important initiatives that positively affect rent
negotiations as well as help prevent contract cancellations fromhappening

Continuously enhance

3. tenant satisfaction

Increase NOI by reviewing
4. property management andoperation methods

Acquisition price / date

31,300 million yen / Jun. 2009

Nearest station

3-minute walk from Kinshicho Station on theTokyo Metro Line
5-minute walk from Kinshicho Station on the
JR LineTotal floor space/ Building
ownership ratio

257,842 m2 / 23.3%• Installation of LED light fittings in exclusively-owned spaces and common-use spaces helped improve thebuilding’s score in its assessment for DBJ Green Building certification and the property was upgraded to
five stars, the highest ranking, at certification renewal in the 34th Fiscal Period (Dec. ‘18).

Before work

Review property management and operation methods while paying
attention to maintaining and improving the management quality, inan effort to promote reduction of rental expenses and increasing
incidental revenues

After work
Elevator hall

Strategically utilize target

1. rents■ Initiatives for Increasing NOI

Project 1(conducted in the Dec. ’17
period - Jun. ’18 period)

Project 2(conducted in the Jun. ’18
period – Dec. ’18)

Subject
properties

Reductions in power
charges (annual
estimate)

Effect of reductions(annual estimate)

27 properties

Approx. 63 million yen-9.7 %

10 properties

Approx. 35 million yen-15.1 %

1. The reduction amount indicates the difference the past results of power use at the subject buildings and the estimated amount after switching
power providers based on the past results

Properties withexceptionally highenvironmental & social
awareness

Rating upgrade(Reduction of power charges)
Conducted bidding by several power providers to switch power supply contracts

Properties with the bestclass environmental &social awareness10

2-2. Internal Growth Strategy

Status of Construction Works

JPR maintained and enhanced property competitiveness through continuous maintenance
operations based on appropriate repair plans as well as through investments for valueenhancement■ Example of construction works for renovation(Tokyo Tatemono Yokohama Bldg.)■ Changes in Construction Costs and Depreciation
Depreciation(million yen)

2,000

1,884

Capital expenditures

1,907

1,921

Repairs and maintenance

1,943

1,943

1,970
1,898

1,988
1,938

1,500

Acquisition price and date

7,000 million yen / Dec. 2010

CompletedMay 1981

Nearest station

4-minute walk from Yokohama
Station on each line

Total floor space/ Building
ownership ratio

8,772 m2 / 100.0%

Contracts were cancelled by two tenants for
385 tsubo in the 33rd Fiscal Period (Jun. ‘18)
A decrease in rent on tenant replacement was assumed dueto the rent gap and the age of the building.
1,146

1,000

1,126
<Challenges>

500

724

352

624

563

216

306

383

505

508

438

0
Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 Dec. '19 (period)(forecast)(forecast)■ Summary of Construction Works in the 34th Fiscal Period (Dec. ‘18)
• Total construction costs=>Of which, works of value enhancement=>(Of which, works to switch to LED lamp, etc.)

1,631 million yen
675 million yen
114 million yen◆Tokyo Tatemono Yokohama Bldg. (224 million yen RN・EV,
etc.)◆Kawaguchi Center Bldg. (209 million yen air condition,
etc.)◆Shinjuku Center Bldg. (103 million yen ESL, etc.)◆JPR Ningyocho Bldg. (83 million yen RN, etc.)

Minimization of
decrease in rent on
tenant replacement
Minimization of
downtime<Leasing Measures>
Target tenants
whose customers
will visit the property
Renovate common-use
spaces<Results>
Rent +3.0%(from before tenant
replacement)
Average downtime
0.7 months<Details of renewal> Cost of construction work: Approx. 370 million yen, including 180
million yen on construction works for value enhancement
Sought increase in rent and early leasing up
of vacancies through renovation offollowing common-use-areas in keepingwith target tenants.

(i) Elevators (ii) Common-use areas oneach floor (iii) Entrance (iv) Leased
space partitioning

Example of renovations (Elevator Hall)

Return on Investment (ROI) is expected to be more higher than initial estimate of 11%.
Appraisal value rose to 8.87 billion yen (+370 million yen from previous fiscal period)

1. Repairs and maintenance expenses indicate the amount obtained by deducting the repairs and maintenance expenses equivalent to the expenses for restoration to original condition, paid by tenants, from the amount actually recorded for each fiscal period.
2. RN, EV and ESL represent “renovation,” “work on elevators” and “work on escalator”, respectively. 3. Each of the construction costs indicates the amount that includes construction management fees.
4. Construction works (planned) are extracts from long-term plans and do not guarantee implementation.

11

2-2. Internal Growth Strategy

Portfolio Strategy

Amid office supply centered on very large properties in Central Tokyo in recent years, JPR is building aportfolio centered on large and medium-sized office properties.
■Ratio by Asset Size (Office properties)■Office Supply (Increase in Leasable Floor in Tokyo’s Five Central Wards)

Extra-large
11.0%
Medium-sized(year)

Other very large(3 thousand m2 to lessthan 10 thousand m2)(30 thousand m2 or
more)

35.3%

20.4%

Large

Large and medium-sized

68.7%(10 thousand m2 to lessthan 30 thousand m2)

33.4%

If Other very large is included,

89.1%
1. Ratio by Size (Office properties) indicates the ratios based on the total leased space of office properties in each size
category, which is classified by the total leasable space of an entire office property. Furthermore, The Otemachi Tower(Land with Leasehold Interest) is excluded from the calculation as it is a land property.

■Ratio by Rent Zone (Central Tokyo, Greater Tokyo)
Less than 15
thousand yen

2.2%
15 to less than
20 thousand yen

52.7%

330 thousand yen or more
Of which, Tokyo Square Garden accounts for
7.7%.

19.3%

25 to less than 30
thousand yen

7.1%
20 to less than
25 thousand yen

Very large(30,000 m2 or more)

Large and medium-sized(less than 30,000 m2)(Tokyo CBDs and 60
thousand m2 or more)

Less than 30 thousand yen

80.7%

18.8%

2012
2013
2014
2015
2016
2017
2018
2019
2020 (forecast)
2021 (forecast)
2022
2023

1.21
million m2

6.09
million m2(thousand m2)

1,000

500

0

500

1,000

1. Prepared by TRIM based on market research agency.
2. The figures indicate the sum total of the increase in leasable floor, caused by the supply of newly-built
office properties, for each year.

■Changes in the average rent of the 23 wards of Tokyo(yen/tsubo)

Class A Bldg.

Class B Bldg.

Class C Bldg.

45,00035,00025,00015,0005,000
Dec.
Sep. '08

1. Ratio of JPR office properties by rent level refers to the ratio of acquisition price, by average unit rent (includingcommon charges) zone, against the total acquisition price of office properties JPR owns in Central Tokyo andGreater Tokyo.

Dec.'10Sep.

Dec. '12
Sep.

Dec.'14
Sep.

Dec.'16
Sep.

(month,Dec. '18 year)
Sep.

1．Prepared by TRIM based on the statistics data publicized by Sanko Estate Co., Ltd. and NLI Research Institute.

12

2-2. Internal Growth Strategy

Retail Portfolio

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

Type

Urban type

Characteristics

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

NOI yield

4.0%(acquisition price)

Station-front type
Retail properties located in front of stations near Tokyo and in major regional
cities5.7%

8 properties / 54.76 billion yen (asset size)

JPR Ginza
Namiki-dori
Bldg.

JPR
Chayamachi
Bldg.

JPR Shibuya
Tower Records Bldg.

JPR Jingumae 432

Shinjuku
Sanchome
East Bldg.

FUNDES
Suidobashi

Yurakucho
Ekimae Bldg.
( Yurakucho Itocia)

6 properties / 46.18 billion yen (asset size)

Urban type8 properties

57%

JPR Umeda Loft Bldg.

Retail14 properties

Station-front
type
6 properties

Tanashi ASTA

Kawasaki Dice Bldg.

JPR
Musashikosugi
Bldg.

Musashiurawa Shopping
SquareCupo-la Main Bldg.

Housing Design
Center Kobe

43%

1. Ratios of urban front and station front-type properties are calculated based on asset size.

132-2. Internal Growth Strategy

Status of Occupancy Rate and Lease Contract in Retail properties

The occupancy rate of JPR’s retail properties remains stable at almost fulloccupancy.
■ Commercial Potential of Station-Front Type properties■ Occupancy Rate (Retail properties)
(%)

100.0

99.9

100.0

100.0

99.9

99.9

99.9

99.7
99.6

98.0
96.0
94.0
0

99.4

99.9

99.2

99.9

99.4

99.8

99.4

Dec. '16

Jun. '17

Dec. '17

Jun. '18

15,080 million yen / Apr. 2007

Nearest station

1-minute walk from Keikyu Kawasaki
Station on the Keikyu Main Lines
5-minutes walk from Kawasaki Stationon the JR Lines

Total floor space/ Building
ownership ratio

36,902 m2 / 46.6%<Tenant replacement/Sales promotional measures>Dec. '18

Jun. '19

Dec. '19 (period)(forecast)(forecast)■ Status of Lease Contract (Retail properties)
Type of tenant (space ratio)

Acquisition price / date

99.4

Occupancy rate based on concluded cntracts
Occupancy rate based on generated rents
Jun. '16

Kawasaki DICE Bldg.

• Existing tenant GU moved to a larger space that had been vacated by a tenant in
the Jun. ‘18 period and opened a larger store, one of only four in Japan.
• Aim to improve profitability through further tenant replacement.
• Planning various sales promotional measures to increase the number of visitors.

Type of rent (space ratio)
Fixed rent + Commission

5%
Multi tenants

22%

New larger store
Entire building

Fixed rent

78%

95%

Type of contract (space ratio)

Remaining contract period(space ratio)

Fixed-termbuilding lease

12%

Less than
2 years

Christmas Grand Raffle Draw

• Renovated smoking room and baby room which had long been in need of
improvement.

5 years
or more30%

40%

2 years or more andless than 3 years

1%
Ordinary building lease88%

3 years or more andless than 5 years

28%

Baby room

Smoking room

14

2-3.
Growth Strategy
2-2. External
内部成長戦略Investment Policy

Continue vigorously selective investments focusing on quality, mainly office properties in Tokyo.
Investigate adding urban hotel properties with stable earnings and growth potential
to investment targets.
■ Basic Policy■ Investigate the addition of urban hotel properties to asset types(Asset)(Background to investigation)(Area)

Basic
Operation• Relatively stable earnings are expected

OfficeUrban retailpropertyTokyo

Other cities• Growth potential is expected, partly due to Government policy of
promoting Japan as a Tourism-Oriented Country

70 ~ 90 %10 ~ 30 %80 ~ 90 %10 ~ 20 %• Pipeline through sponsor can be expected(76.8 %)

(23.2 %)

(84.5 %)

(15.5 %)

Figures in parentheses are investment ratios as of the date of this material.

(Details of investigation)• Urban hotels located in busy areas with great transport links• Hotels that specialize in accommodation(Investment Policy)
Investment Target
Offices in Tokyo- Properties that still have strong
growth potential

Investment Strategy• Conclusion of long-term fixed rate lease contracts with tenants, inprinciple, to eliminate operational risk and ensure stable earnings• Continue to acquire property informationfrom the sponsors• Investment within the investment standards for urban retailproperty (10-30%)• Utilize pipelines such as preferential
negotiation rights to investigate acquisitions
through negotiated deals• Investigate amendment to Articles of Incorporation at General
Meeting of Unitholders

Urban retail property- Excellent location, easy toreplace tenants• Continue to investigate properties
developed by the sponsor

Profitable properties in regional
cities• Investigate properties held by the sponsor
and properties with the possibility ofnegotiated deals

Strategic asset replacement• Investigate asset replacement that willcontribute to the portfolio with the sponsors■ Acquisition Capacity by Debt
LTV (based on total assets)

40.5%

Acquisition capacity(maximum LTV of 45%)36.7 billion yen

15

2-3.
Growth Strategy
2-2. External
内部成長戦略Utilizing preferential negotiation right

Making rigorously selected investments by utilizing preferential negotiation right■ Property to be Acquired in the June 2019 Period■ Utilizing preferential negotiation right(Ratio of co-owned properties, etc. (existing preferential negotiation right))

Shinagawa Canal Bldg. (Ownership interest to be additionally acquired: 4.6%)◼ Acquisition Highlights(Ratio of co-owned properties, etc.)• East exit area of Shinagawa Station is area where further
development can be expected as the starting station for
the Chuo Shinkansen Project• Already own ownership interest of 45.6% in the property(for the fifth to seventh floors)• By acquiring additional interest equivalent to 4.6% (for theeighth floor) JPR will have the majority of ownershipinterest (50.2%) in the property.

Full ownership

32 properties
184.8 billion yen

Co-owned properties, etc.
(existing preferential
negotiation right)

21 properties 190.3 billion yen

Location

2 Konan, Minato-ku, Tokyo

44.0％

Asset class

OfficeFloorsB1 / 8F

Completed

July, 2008 (10 years since completion)

Total floor space

5,216.21 m2 (entire bulding)Leasable floor space

169.93 m2 (additional ownership)

Acquisition date

March 8, 2019

Co-owned properties(not preferential
Negotiation right)

9 properties 59.8 billion yen(Example of main acquisition utilizing preferential negotiation right)
Property

Ownership
interest on
initialacquisition

Additional
acquisition

Current
ownership
interest

Shinagawa Canal Bldg.

45.6%

4.6%

50.2%

Tokyo Square Garden

－

－

8.22%

Shinjuku Square Tower

38.9%+23.7% => +4.7%

67.4%

Shibadaimon Center Bldg.

52.8%+12.6%

65.4%

Shinyokohama 2nd Center Bldg.

50.0%+50.0%

100%

BYGS Shinjuku Bldg.

25.0%+50.0% => +25.0%100%

1. Tokyo Square Garden was acquired by utilizing the preferential negotiation right of Tokyo Tatemono and the otherproperties were acquired by utilizing the preferential negotiation right of JPR.

Acqui s i ti on pri ce
Appra i s a l va l ue
NOI yi el d(planned acquition price)

After depreci a ti on yi el d

171 mi l l i on yen
182 mi l l i on yen

10 minute walk from Shinagawa Station on the
JR Line, Keihin Express Main Line and Tokaido
Shinkansen Line.

4.9%
3.8%

(planned acquition price)

Ca pi ta l i za ti on ra te(as of janury 15, 2019)(Note 1)
(Note 2)

4.5%

NOI yield and after depreciation yield represent the averageannual values for the 10-year period after the property
becomes stably operated through leasing.
Appraisal NOI yield is the capitalization rate based on the
direct capitalization method.

16

2-3.
Growth Strategy
2-2. External
内部成長戦略Utilizing the sponsor pipelines

Promote vigorously selective investments and asset replacement by utilizing the sponsor
pipelines■ Investigation of acquisitions through negotiated deals■ Continue External Growth by Utilizing Asset Replacement(Asset replacement policy)• Aim to build a strong and solid portfolio by promoting asset replacement.

(Utilizing sponsor pipeline)(Ratio of Properties by Property
Acquisition Channel)
Properties acquired
other than fromsponsors
119.6 billion yen
27.5%
Properties acquired
based on information
provided by sponsors
98.1 billion yen
22.6%

Properties
acquisition fromsponsors
217.3 billion yen
49.9%

JPR

Properties acquired
using sponsor pipelines

72.5%• Enhance the quality of the portfolio
and profitability through strategicalasset replacement.
• Rejuvenate the age and improve
profitability.
• When properties are sold to thesponsor, discussion on acquisition
after the properties are redevelopedby the sponsors is possible throughpreferential negotiations.
• Conduct vigorously selective
investment at assumed fair value.

Sponsors

Strategically saleAssetreplacement

Acquiring blue-chipproperties• Sponsors who are developers haveneeds to acquire properties to be redeveloped.
• The main sponsors support expansionof JPR as part of their strategy toreinforce the comprehensive
strengths of the groups and enhancetheir business portfolio.
• Further reinforcement of the sponsor
commitment to JPR’s growth strategy.

(Recent asset replacement record)(Largest top 5 properties)
Property(100 million yen)

Billion yen

1Otemachi Tower(land with leasehold interest)

36.0

2

Olinas Tower

31.3

3

Shinjuku Center Bldg.

21.0

4

Tokyo Square Garden

18.4

5

Kanematsu Bldg.

16.2

All are properties acquired using sponsor pipelines orproperties developed by the sponsors.

Acquisition

200

JPR Ginza Namiki-dori Bldg. (101)FUNDES Suidobashi (32)Acquisition
Tokyo Square Tower (184)
Acquisition date: Feb. ’17 and Apr. ‘17

100
Sale

Sale Bldg.
JPR Daikanyama
JPR Daikanyama(18) Bldg.(18)

0

+133

Sale
物件売却

+92

+92

-18

Fukuoka Bldg. (31)Fukuoka
Bldg.(31)JPR
Hakata-chuo
Bldg.
JPR Hakata-chou(19) Bldg.(19)

-50

-100

'16.9
Sep.
‘16

'16.12
Dec.
‘16

'17.2
Feb.
‘17

1. Figures in parentheses indicate the acquisition price or the sale price.

'17.4
Apr.
‘17

'17.4
Apr.
‘17

(year, month)17

2-3. External Growth Strategy

Urban Development by the Main Sponsor

Urban development business of the main sponsor◼ Examples of development projects by Tokyo Tatemono Co., Ltd.
Large-scale redevelopment projects
Owned by JPR(land with leasehold interest)

Owned by JPR

Urban compact retail property, Urban hotel, Medium-seized office
Asset class

Urban compact retailproperties

Urban hotel

Total floor area
(m2)

No.
guestroom

Completion/planne
d completion

FUNDES Suidobashi(owned by JPR)

1,477

-

2015/7FUNDES Ueno

2,249

-

2017/7(Tentative name) FUNDES Gotanda

Unfixed-2019/7(Tentative name) FUNDES Ginza

Unfixed-2019/11

Candeo Hotels Tokyo Roppongi

4,700

149

2017/9The Square Hotel Ginza

5,700

182

2018/8

Hotel Gracery Asakusa

3,700

125

2018/9The b Osaka Midosuji

10,700306

2019/2(Tentative name) Candeo Hotels Omiya

10,100321

2019/8(Name to be determined) Kyoto Shijo

UnfixedUnfixedSpring ‘21

UnfixedUnfixedUnfixed

5,800-

Spring ‘20

Property name(Name to be determined)Kyoto Sanjo

The Otemachi Tower

Tokyo Square Garden
Medium-sized office

Owned by JPR(Tentative name) Kakyoin Sendai
Project

Owned by JPR
Owned by JPR

Shinjuku Center Bldg.

Olinas Tower

FUNDES Suidobashi

FUNDES Ueno

Hotel Gracery Asakusa

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

(Tentative name)Kakyoin Sendai Project18

2-4. Financial Strategy

Fund Procurement Status and Outlook

Flatten repayment amount for each fiscal period and reduce debt costs■ Debt Procurement Results in the 34th Fiscal Period (10 billion yen)
Average maturity
Beforerefinancing

5.6

+1.1

Average debt interest rate

After
refinancing

years

years

Beforerefinancing

6.7

0.92%

years

■ Lengthening of Maturity and Flattening of Repayment Amount for EachFiscal Period to Around 10 Billion Yen(100 million yen)300

Long-term loans payable-0.38% pt

Commitment line 24.0 bn. yen

0.54%

200
(Dec. ’18 Actual debt)■ Financial Indicators and Credit Rating Status(Status of Borrowings by Fiscal Period)

New debt
Average maturity (change)

Jun. 2018

Dec. 2018

Change13.29 bn. yen

10.0 bn. yen-3.2 bn. Yen

6.7 years(+2.1 years)(+1.1 years)

0.57%

0.54%

(-0.43%pt)(-0.38%pt)+0.03%pt

181.1 bn. yen

181.0 bn. Yen-0.1 bn. yen

Average maturity

4.6 years

4.5 years-0.1 years

Average debt cost

0.94%

0.90%

-0.04% pt

100%±0% pt-0.9 years(Status of entire interest-bearing debts)
Total interest-bearing debts

Ratio of long-term, fixed interest
rate debts

100%

100

0

91

80

S&P

100 105

80

70

80

70

30

30

80

70

10
99

85

90

Dec. Jun.
'18 '19

Dec. Jun.
'19 '20

Dec. Jun.
'20 '21

Dec. Jun.
'21 '22

Dec. Jun.
'22 '23

Dec. Jun. Dec. Jun. Dec. Jun.
'23 '24 '24 '25 '25 '26

30

30
40

30

42

Dec. Jun.(period)'27 '28

Dec. Jun.
'26 '27■ Average Interest on Debt for Last Three Fiscal Periods and Average
Cost of Debts To be Matured
1.80%
0.58%
The average interest rate on borrowings
Jun. '19
列1three fiscal periods
for the last

1.04%

0.87%

0.96%

Dec. '19

Jun. '20

Dec. '20

0.66%

Jun. '21 (period)■ Average Debt Cost
40.6%

40.5%

-0.1% pt

35.8 bn. yen

36.7 bn. yen+0.8 bn. yen(Credit rating)
R&I

98

20

20

Average debt cost(%)

Acquisition capacity(maximum LTV of 45%)

100 110

10
20

Average debt cost to be repaid by fiscal period(LTV)
LTV (based on total assets)

50

40
20
81

7.6 years

Average borrowing interest
rate (change)

New debt (Dec. '18)
新規借入（'18.12期）

Investment corporation bonds

Afterrefinancing

AA- (Stable)
Long-term: A (Stable), Short-term : A-1

1.5
1.2

1.27

1.21

1.19

1.16

1.11

1.03

0.96

0.94

0.90

0.9
～

0.6
0.0％

Dec. '14 Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18(period)192-5. Sustainability

Sustainability (promotion system ・ environmental certification)

Consistent Initiatives on Behalf of Sustainability■ Sustainability Policy
Based on its corporate philosophy of working with integrity and commitment to responsibilities, TRIM is resolved tocontribute to the sustainable development of society and the investment management business through discussion
and cooperation with its stakeholders (including investors and tenants), while aiming to maximize value for JPR's
unitholders.

1.Initiatives on Behalf of Tenants
We will work with integrity and responsibility in responding to tenants, and endeavor toprovide them with new and distinct values as well as enhancing their satisfaction.
2.Initiatives on Behalf of the Environment
Recognizing the importance of addressing environmental issues, we will aim to reduce
environmental load through managing the assets owned by JPR.
・We will promote energy saving and reduction of greenhouse gas emissions.
・We will endeavor for effective use of water resources and work on the "3Rs" (reuse,
reduce and recycle) of waste.
・We will strive to proactively disclose information on environmental issues.
3.Initiatives on Behalf of Local Communities
We will work to coordinate with local communities through managing the assets owned
by JPR, in an effort to contribute to enhancing the brand value of the entire area in whichsuch assets are located.
4.Initiatives on Behalf of the Employees
We will respect each one of our employees to realize an employee-friendly workplace,helping them to enhance abilities in their specialties.
5.Initiatives on Behalf of the Society
We will abide by laws and regulations as well as the rules of society, and conductbusiness operations with a focus on transparency and objectivity while holding on to ourhigh moral standards.

■ Sustainability Promotion System
Established the Sustainability Committee with a view to sustainable growth.
•

Set goals and conduct monitoring and assessment for the purpose ofincreasing sustainability.

•

The members are the President and CEO (chairman), the general managers of
the Financial Division, the Investment Management Division, the Corporate
Planning/Administration Division and the Compliance Office and the Executive
Office.

•Meetings of the Executive Office are held monthly to report on progress interms of goals, collect information and work on educational activities in thecompany.

•

The Sustainability Committee is held twice or more each year and makes areport to TRIM’s board of directors and JPR’s board of directors once or moreeach year.

■ Acquisition of Environmental Certification
Acquisition of certification: 17 properties, 33.4% of total floor space
1. The above figures are as of the end of the Dec. ’18 period. Due to factors such as the expiration of certification, the status ofacquisition is expected to be 14 properties or 30.1% of total floor space as of the February 18, 2019 and 16 properties or 37% of
total floor space as of the end of March 2019.

■ DBJ Green Building
As a result of reassessment and the promotion of environmental andenergy-saving measures at 10 already certified properties, five properties
improved their rankings.
Ranking

Property
Olinas Tower
JPR Sendagaya Bldg.
Oval Court Ohsaki Mark West
Kanematsu Bldg.
BYGS Shinjuku Bldg.

■ GRESB
Acquisition of “Green Star,” the highest
ranking, for five consecutive years

Beforereassessment
★★★★
★★★
★★
★★
★★

After
reassessment
★★★★★
★★★★
★★★★
★★★
★★★

■ CASBEE Certification
Yakuin Business Garden was granteda A-rank assessment in 2018

Yakuin Business Garden

202-5. Sustainability

Sustainability (Environment)

Reinforcing Continuous Improvement Initiatives on Environmental Issues■ Construction Works for Reducing Environmental Load

■ Major Energy-saving Construction Works in December 2018 Period

Systematically implement refurbishment to highly energy-efficient facilities

Change in construction cost of ESG issue(million yen)

400

339

300

332

(LED/Human sensor installation work)• JPR Ningyo-cho Bldg.
• JPR Ichigaya Bldg.
• Sompo Japan Sendai Bldg.
• Olinas Tower(Air-conditioning improvement work)• Kawaguchi Center Bldg.
• Rise Arena Bldg.
• JPR Nagoya Fushimi Bldg.
• Shinjuku Center Bldg.

■ Cooperation with tenants

258

227

211

185

200

(Promotion of green lease)
Adopted a green lease clause in the basic contract in both operation and facility
renovation to contribute to the environment in cooperation with tenants (April 2018).

160

130

123

105

100

Contracts with Green Lease Clause0

Number ofcontracts withgreen lease clause

Total number of
new contracts

June 2018 Period (33rd Fiscal Period, from April 2018)

12

26

46.2%

December 2018 Period (34th Fiscal Period)

38

49

77.6%

Fiscal Period

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19(forecast)LED construction

Work on air condition units■ Effect of adopting LED lamps (annual estimate)■ Cooperation with PM and BM

Made cost-effective investments.
Item

Jun. ’18

Dec. ‘18

Construction work costs (million yen)

123.18105.88Reduction in electric bills (million yen)

7.48

8.86

230.88251.481.87

2.37

Reduction in CO2 emissions (t-CO2)
Reduction in CO2emissions/Investment
amount (million yen)(period)

Ratio(Formulation of a green procurement policy)
JPR and TRIM have formulated a green procurement policy tofocus on the procurement of equipment in consideration of theenvironment, health and amenity, in addition to quality, price,delivery time and compliance with laws and regulations.
(Publication of JPR brand newsletter)
JPR publishes information on issues such as improving tenantsatisfaction, raising awareness of ESG and renovation work
twice a year (March and September) to raise brand awarenessamong building staff. JPR published its 30th newsletter in
September 2018.

21

2-5. Sustainability

Sustainability (society)

Initiatives for Enhancement of Tenant Satisfaction■ Enhancement of Tenant Services■ Social Contribution and Disaster Drill

JPR Best Performance Award 2018： BYGS Shinjuku Bldg.
•

Awarded to outstanding building management companies as good examples forother properties since 2006
Awarded based on tenant satisfaction, therefore, serving as an incentive toimprove satisfaction.
Outstanding initiatives of recipient buildings are shared with those in charge ofother buildings to raise overall level of portfolio.

••

Entrance Performance

Morning Clean-up Activity

Sought to improve services throughinteractions with users by adding seasonal
performances in building entrances.

Regularly conduct cleaning activity in the
Nihonbashi, Yaesu and Kyobashi areas with
Tokyo Tatemono. Take initiatives for achieving
interactions with the local people and making
contributions to local communities.

Recipient
BYGS Shinjuku Bldg. Management Office, Tokyo
Metropolitan Area Branch Office No. 3, TOKYOFUDOSAN KANRI K.K.
Reason for award•

Effective management of a building that ischallenging to manage, being a large building withmany tenants and a variety of people visiting its
retail floor•

Achievement of high scores in tenant satisfaction
surveys every year•

Excellent handling of large-scale renovation, etc.

BYGS Shinjuku Bldg.

■ Inspection Flow Chart for CS

Tenant satisfaction survey and inspection
Conduct periodical questionnaires

Distribution of Anti-disaster Goods

Disaster Drill

Distributed smart emergency bottles totenants to raise disaster mitigation
awareness in face of increasing frequencyof natural disasters in Japan.

TRIM undertakes an earthquake drill exercise
twice a year, in principle. It works to improve its
disaster response skills by dealing with issues at
the time of the exercise.

TRIM brand study session
Verify the questionnaire results and check how
popular the brand has become

Improvement of management issues

Periodical liaison meeting

Improve problematic situations in cooperation
with property managers and building managers
of respective properties

Clarify managerial issues and discusscountermeasures among the asset manager,
property managers and building managers(Conducted drill for power outage in December 2018.)22

2-5. Sustainability

Sustainability (corporate governance)

Endeavor to secure and enhance the soundness of business management as an investment
corporation and an asset management company that are reliable and trustworthy■ TRIM’s Corporate Governance■ JPR’s Corporate Governance
JPR’s decision-making organs

Decision-making process for property acquisitions

It is stipulated (Article 18 of the regulations) that JPR shall have up to two executive officers and up to
four supervising officers (there must be at least one more supervising officer than executive officers).

The following procedures are taken for cases of transactions with interested parties:• An outside attorney is appointed as a special member of the Compliance Committee and examines andverifies the adequacy and rationality of transactions at the Committee.
• Upon implementing the approved transactions, approval by JPR’s board of directors, comprising directors
who are independent from the shareholders of TRIM, must be obtained in advance.

Criteria for appointing investment corporation officers and remuneration

Decision-Making Based on Stringent Processes• Employing a management fee system that matches unitholder’s interests and benefits of theasset management company

Item

Calculation of Compensation

Acquisition

Remuneration System of the Asset Manager

Conclude agreement－

TRIM’s Board of Directors

13,300Investment Subcommittee－

Ernst & Young
ShinNihon LLC－

Final decision on
acquisition

Gyosei Certified Public Tax
Accountants' Co.
Group Representative Partner

4,200

Nobuhisa Kusanagi－

Compliance Committee
JPR’s Board of Directors

Partner Attorney, Spring Partners

1

Prior review /approval oftransaction withrelated parties

Masato Denawa

2,400

Due diligence
subcommittee

Tokyo Realty Investment
Management Inc.
DirectorDue diligence

Satoshi Okubo

Investment subcommittee

Independent
AuditorFee (Dec. ‘18) Owned(thousand yen)units

Decision on
acquisition policy

Supervising
Officer

Other Current Assignments

Compliance subcommittee

Executive
Officer

Name

Review, screening

Position

Invest management department

None of the grounds for disqualification stipulated in the laws concerning investment trusts and investment
corporations
Officers are appointed by means of a resolution of the General Meeting of Unitholders.
The remuneration for executive officers and supervising officers is stipulated in the investment corporation
regulations as the amount decided by the Board of Directors (up to a maximum of 500,000 yen per month foreach executive officer and 400,000 yen per month for each supervising officer).

Proposal, planning••

Decision making on
acquisition
over certain amount•

Remuneration(Dec. ‘18)

Share

Fixed fee

12.5 million yen per month

75 million yen

13.4%

Incentive Fee 1

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

275 million yen

49.2%

Incentive Fee 2

3% of JPR’s income before income taxes(income before income taxes before deducting Incentive Fee 2)

209 million yen

37.4%

Incentive Fee 3

0.25% of the acquisition price upon new acquisition－－

Decision-making based on stringent processes(Interested parties: 5 sponsor companies and their parent companies, subsidiaries
and affiliates)• Acquisition of properties or assets from interested parties• Sale of properties or assets to interested parties• Consignment of property management to interested parties• Brokerage or agency by interested parties for transactions• Placement of orders for construction works (costing over 10 million yen) tointerested parties• Leasing of properties to interested parties

23

MEMO

24

JAPAN PRIME REALTY INVESTMENT CORPORATION

3. Financial Results and Forecasts of Financial Results253. Financial Results and Operating
Forecasts

Overview of Financial Results for the 34th Fiscal Period (Dec. ’18) (period-on-period
comparison)

Results of the 34th fiscal period ended December 2018
DPU:7,326 yen (up81 yen, period-on-period)
Rent revenue continued to increase, reflecting steady progress in attracting new tenants and revising rents
upward. The absence of non-operating income posted the previous period was absorbed and cash distributions
increased for the 10th consecutive fiscal period.
Item

33rd Period

34th Period(Jun. 30, 2018) (Dec. 31, 2018)
Operating revenue
15,204
15,652
Rental revenue
15,204
15,652
Operating expense
7,869
8,066
Expenses related to rent business
7,114
7,311
Revenue andSelling, general and adminisutrative expenses
754
755
profitOperating income
7,335
7,586
(million yen)
Non-operating income
22727
Non-operating expenses
877
851
Ordinary income
6,685
6,761
Net income
6,686
6,760
DPU (yen) (per unit)
7,245
7,326
Number of units outstanding

923,000

923,000

Change
+447
+447
+197
+196
+0
+250
-200
-25
+75
+74
+81
-

Operating revenue(up 2.3% from the previous period) due to progress in attracting new tenants and① ［Rents and common charge]Increased
新規テナントの誘致や賃料増額改定が進捗し増収（前期比+2.3%）
upwardlyrevising rents
Revision of land rent of Otemachi Tower (land with leasehold interest) contributed throughout the whole period② ［Land rent] 大手町タワー（底地）の地代改定が通期寄与
Increased mainly due to seasonal factors③ ［Incidental income] 主に季節要因により増収

Expenses related to rent business
Increased mainly due to seasonal factors and the balance of utilities expenses deteriorated (-14 million yen)
④ ［Utilities expense] 主に季節要因により増加、水道光熱収支は悪化（-14百万円）
Brokerage fees and other expenses decreased⑤ ［Other operating expenses］ 仲介手数料等が減少

Non-operating income and expenses
Decreased mainly due to absence of settlement on management association accounts⑥ ［Nonoperating income］ 管理組合精算金の剥落（臨時精算金の剥落を含む）等により減収(including for extraordinary accrual)⑦ ［Non-operating expenses］ 支払利息・投資法人債利息等の財務コストが減少
Financial costs such as interest expense on loans and investment corporation bonds decreased

Item

⑥
⑦

Operating revenue
Rental revenue
Rents and common charge
Land rent
Other fixed income
Other rental revenue
Incidental income
Cancellation penalty, etc
Income equivalent to expense for restoration
to original condition

Other variable income
Expenses related to rent businessOutsourcing fees
Utilities expenses
Property and other taxes
Insurance premiums
Repairs and maintenance
Property management fees
Management association accounts

Depreciation
Other expenses related to rent business

NOI
NOI yield (book value)
Rental income-real estate
After-depreciation (book value)
Rent-paying occupancy rate (period average)

33rd Period

34th Period(Jun. 30, 2018)(Dec. 31, 2018)15,204
14,38012,343
1,630
406
824
673
14
101
35
7,114
586
748
2,217
24
473
289
567
1,943
262
10,033
4.9%
8,090
4.0%
96.9%

15,652
14,723
12,630
1,679
413
929
801
16
77
33
7,311
594
891
2,210
24
569
279
568
1,943
227
10,285
5.0%
8,341
4.0%
98.3%

Change
+447
+342
+286
+49
+7
+104
+128
+1
-23
-1
+196
+7
+143
-6
+0
+96
-10
+0
+0
-34
+251
+0.1%pt+250- %pt+1.4%pt

①
②

③

④

⑤

26

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 34th Fiscal Period (Dec. ’18) (period-on-period
comparison)

Result of the 35th fiscal period ended December 2018
Total assets: 447.1 billion yen, NAV per unit: 258,626 yen
Item
Current Asset
Cash and deposits (including trust)
Other current asset

Noncurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets

Deferred assets
Investment corporaton bond issuance costs

Investment unit issuance expenses

BalanceSheet(million yen)

Total assets
Current liabilities
Short-term loans payable
Current portion of long-term loans payable

Current portion of investment corporation bonds
Other current liabilities

Noncurrent liabilities
Long-term loans payable
Investment corporation bonds
Tenant leasehold and security deposits

Total liabilities
Unitholders' capital
SurplusReserve for reduction entry
Unappropriated retained earnings
Total net assets

33rd Period

34th Period(Jun. 30, 2018)(Dec. 31, 2018)33,83633,181
655
412,314397,104
14,690
519
146
123
22
446,297
24,88917,2002,000
5,689
182,769
136,420
25,50020,849207,659
231,653
6,985
284
6,701
238,638

35,51635,056459
411,514396,273
14,690
549
127
111
15
447,157
27,383
17,1004,000
6,283
181,062
138,420
21,50021,142
208,445
231,653
7,059
284
6,774
238,712

ChangeIncrease or decrease in cash and deposits
Change+1,679+1,875
-195
-800
-830
-0
+30
-19
-11
-7
+859
+2,494-100+2,000+594-1,707+2,000-4,000
+292
+786
+73
+73
+73

Net cash provided by operating activities+9,229

Income before income taxes+6,761

Depreciation and amortization+1,943

Other, net+524

Net cash provided by investing activities

-568
-815

Purchase of property, plant and equipment

Other, net+247

Net cash provided by financing activities-6,785

Proceeds from lisbilities+10,000

Repayment of liabilities-10,100

Dividends paid

-6,685

Total cash and deposits+1,875

Increase or decrease in noncurrent assets
ChangeCapital expenditures+1,126

Depreciation-1,943

Others+17

Noncurrent assets-800

Increase or decrease in liabilities
Repayment/
redemption

New procurement

Balance at end ofcurrent period

ChangeShort-term loans payable

-

-

-

-

Long-term loans payable

10,0008,100

155,520+1,900Investment corporation bonds

-

2,000

25,500-2,00010,00010,100

181,020-100

Total liabilities27

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 34th Fiscal Period (Dec. ’18) (compared with forecast)

Results of the 34th fiscal period ended December 2018
DPU compared with the forecast : up 46 yen
Results were higher than initially forecast thanks to increases in rent revenue and penalties for contract cancellation,
among other factors
Item34th Period

34th Period

Revenue andSelling, general and adminisutrative expenses
profitOperating income(million yen)
Non-operating income
Non-operating expenses
Ordinary income
Net income
DPU (yen) (per unit)(Forecast)
15,54015,540
7,970
7,191
778
7,569
4
852
6,720
6,720
7,280

(Result)
15,652
15,652
8,066
7,311
755
7,586
27
851
6,761
6,760
7,326

Number of units outstanding

923,000

923,000

Operating revenue
Rental revenue
Operating expense
Expenses related to rent businessChange
+112
+112
+96
+119
-23
+16
+23
-1
+40
+40
+46

Item

④

-

Rental revenue① ［Rents and common charge] Increased mainly due to the attraction of new tenants and the moving back ofcontract cancellations by existing tenants

Expenses related to rent business② ［Utilities expense] Increased mainly due to the intense heat③ ［Repair and maintenance expense］ Increased largely due to the occurrence of construction work to restore

properties to their original condition and to increase earthquake resistanceNon-operating income and expenses④ ［Nonoperating income］ Increased chiefly due to recording of insurance claim income

Operating revenue
Rental revenue
Rents and common charge
Land rent
Other fixed income
Other rental revenue
Incidental income
Cancellation penalty, etc
Income equivalent to expense for restoration
to original condition

Other variable income
Expenses related to rent businessOutsourcing fees
Utilities expenses
Property and other taxes
Insurance premiums
Repairs and maintenance
Property management fees
Management association accounts

Depreciation
Other expenses related to rent business

NOI
NOI yield (book value)
Rental income-real estate
After-depreciation (book value)
Rent-paying occupancy rate (period average)

34th Period(Forecast)

34th Period(Result)

Change15,54014,705
12,612
1,679
413
835
805
2
26
7,191
600
877
2,211
25
471
274
570
1,952
207
10,301
5.0%
8,348
4.0%
98.3%

15,652
14,723
12,630
1,679
413
929
801
16
77
33
7,311
594
891
2,210
24
569
279
568
1,943
227
10,285
5.0%
8,341
4.0%
98.3%

+112
+18
+17
-0
+0
+94
-3
+13
+77
+6
+119
-6
+14
-0
-0
+98
+5
-1
-9
+19
-16
- %pt
-7
- %pt
- %pt

①

②

③

28

3. Financial Results and Operating
Forecasts

Forecasts of Financial Results for the 35th Fiscal Period (Jun. ‘18) (compared with 34th period)

Forecast of the 35th fiscal period ending June 2018
DPU: 7,350 yen (up 24 yen from 34th period (Dec. ‘18) actual results)
DPU is expected to continue increasing, mainly thanks to higher rent revenue despite an increased
property tax burden. Aim to accumulate further profit under favorable leasing market conditions.
Item

34th Period

35th Period

Revenue andSelling, general and adminisutrative expenses
profitOperating income(million yen)
Non-operating income
Non-operating expenses
Ordinary income
Net income
DPU (yen) (per unit)

15,652
15,652
8,066
7,311
755
7,586
27
851
6,761
6,760
7,326

(Forecast)
15,58015,580
8,045
7,270
775
7,534
63
812
6,785
6,784
7,350

Number of units outstanding

923,000

923,000

Operating revenue
Rental revenue
Operating expense
Expenses related to rent businessChange
-72
-72
-20
-40
+20
-51
+36
-39
+24
+24
+24

Item

⑥
⑦

-

Rental revenue
Expected to increase due to contribution of move-ins in 34th period throughout the 35th period① ［Rents and common charge] and upward revision of rents
will be a revision of land rent for Otemachi Tower (land with leasehold interest) associated with increased property② ［Land rent］Theretax (increased land rent for three months from April will boost revenue)③ ［Incidental income] Expected to decrease mainly due to seasonal factors

Expenses related to rent business④ ［Utilities expense］Expected to decrease mainly due to seasonal factors, with almost no change in the balance of utilities expenses⑤ ［Property and other taxes］Property tax burden will increase

Non-operating income and expenses

Expected to increase largely due to recording of settlement on management association accounts⑥ ［Nonoperating income］ (mainly recorded in the June period every year)⑦ ［Non-operating expenses］Financial costs such as interest expense on loans and investment corporation bonds will decrease

Operating revenue
Rental revenue
Rents and common charge
Land rent
Other fixed income
Other rental revenue
Incidental income
Cancellation penalty, etc
Income equivalent to expense for restoration
to original condition

Other variable income
Expenses related to rent businessOutsourcing fees
Utilities expenses
Property and other taxes
Insurance premiums
Repairs and maintenance
Property management fees
Management association accounts

Depreciation
Other expenses related to rent business

NOI
NOI yield (book value)
Rental income-real estate
After-depreciation (book value)
Rent-paying occupancy rate (period average)

34th Period

35th Period(Forecast)

Change15,652
14,723
12,630
1,679
413
929
801
16
77
33
7,311
594
891
2,210
24
569
279
568
1,943
227
10,285
5.0%
8,341
4.0%
98.3%

15,58014,861
12,731
1,726
403
718
685
33
7,270
601
773
2,351
24
496
282
568
1,970
200
10,280
5.0%
8,309
4.1%
98.9%

-72
+138
+101
+47
-10
-210
-116
-16
-77
+0
-40
+6
-117
+140
+0
-73
+3
-0
+27
-27
-4
- %pt
-31
+0.1%pt+0.6%pt

①
②

③

④
⑤

29

3. Financial Results and Operating
Forecasts

Forecasts of Financial Results for the 36th Fiscal Period (Dec. ‘19) (compared with forecast forthe 35th period (Jun. ‘19)

Forecast of the 36th fiscal period ending December 2019
DPU: 7,380 yen (up 30 yen from 35th period (Jun. ‘19) forecast)
DPU is expected to continue to increase.
Aim for stable growth through continuous upward revision of rents, reduction of financial costs and cost control.
Item35th Period

36th Period

Revenue andSelling, general and adminisutrative expenses
profitOperating income(million yen)
Non-operating income
Non-operating expenses
Ordinary income
Net income
DPU (yen) (per unit)(Forecast)
15,58015,580
8,045
7,270
775
7,534
63
812
6,785
6,784
7,350

(Forecast)
15,71015,710
8,113
7,336
777
7,596
3
787
6,812
6,812
7,380

Number of units outstanding

923,000

923,000

Operating revenue
Rental revenue
Operating expense
Expenses related to rent businessChange
+130
+130
+68
+66
+1
+62
-60
-25
+27
+27
+30
-

Rental revenue① ［Rents and common charge] Current pace of upward revision in rents is expected to be maintained
Average rent-paying occupancy rate for period is set at 98.3%② ［Land rent] Revision of land rent of Otemachi Tower (land with leasehold interest) will boost revenue throughout period.
③ ［Incidental income] Expected to increase mainly due to seasonal factors

Item

⑤
⑥

Operating revenue
Rental revenue
Rents and common charge
Land rent
Other fixed income
Other rental revenue
Incidental income
Cancellation penalty, etc
Income equivalent to expense for restoration
to original condition

Other variable income
Expenses related to rent businessOutsourcing fees
Utilities expenses
Property and other taxes
Insurance premiums
Repairs and maintenance
Property management fees
Management association accounts

Depreciation
Other expenses related to rent business

Expenses related to rent business④ ［Utilities expense］ Expected to increase largely owing to seasonal factors, and balance of utilities expenses will
deteriorate (-9 million yen)

Non-operating income and expenses
to decrease in the absence of settlement on management association accounts (mainly⑤ ［Nonoperating income］ Likely
recorded in the June period every year)⑥ ［Non-operating expenses］ Financial costs such as interest expense on loans and investment corporation bonds will decreaseNOI
NOI yield (book value)
Rental income-real estate
After-depreciation (book value)
Rent-paying occupancy rate (period average)

35th Period(Forecast)

36th Period(Forecast)

Change15,58014,861
12,731
1,726
403
718
685
33
7,270
601
773
2,351
24
496
282
568
1,970
200
10,280
5.0%
8,309
4.1%
98.9%

15,71014,895
12,717
1,774
404
815
784
30
7,336
611
883
2,344
25
427
279
573
1,988
203
10,361
5.0%
8,373
4.0%
98.3%

+130
+33
-14
+47
+0
+96
+99
-3
+66
+10
+109
-7
+0
-68
-3
+4
+17
+3
+81
- %pt
+63
-0.1%pt-0.6%pt

①
②

③

④

30

3. Financial Results and Operating
Forecasts

Changein Major Items
主要項目の変動状況

31

Rent revenue will increase by 130 million yen (from the 34th fiscal period (Dec. ‘18)) for the
35th fiscal period (Jun. ‘19) and by 30 million yen (from the 35th fiscal period (Jun. ‘19)) for the36th fiscal period (Dec. ‘19)
■ Forecast of Property Taxes and City Planning Taxes■ Rent revenue (factor for period-on-period changes)

Total of property and city planning taxes
Collection of property taxes included in Otemachi land rent
Amount of burden (net)(million yen)

Rent revenue

Plus item

Minus item

2,500

+470 -296+49+47 -10+13+198 -280 +67 +47

Other fixedincomeMove-outs

Rents andcommoncharge -14

Move
-ins

Other fixedincomeOtemachiTower’s rent

14,861

Revisions,etc.

+320 -237

Revisions,etc.

Other fixedincomeRevisions,
etc.

Move
-ins
Move
-outs

Rents andcommon +286
chargeOtemachiTower’s rent

14,723

Move
-ins
Move
-outs

Rents andcommoncharge +101

OtemachiTower’s rent

(million yen)

14,895

+0

+7

2,000
1,500
1,000
500
0

+112

Actual increase of
burden, converted to
DPU(period-on-period)

14,380

1,237

1,191

1,276

1,229

1,258

1,248

Jun. '18

Dec. '18

Jun. '19

Dec. '19

Jun. '20

Dec. '20 (period)―+49 yen(forecast)-91 yen(forecast)+51 yen(forecast)-31 yen(forecast)+10 yen■ Balance of Utilities Expenses (utilities expense-incidental income)(forecast) (forecast)Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 Dec. '19

33rd period(Jun. ‘18)

34th period(Dec. ‘18)
Rent revenue+340 mn. yen

Of which, rent revision (net) +110 mn. yen

35th period (Forecast)(Jun. ‘19)
Rentrevenue+130 mn. yen

Of which, rent revision (net) +10 mn. yen

36th period (Forecast)(Dec. ‘19)
Rentrevenue+30 mn. yen

Of which, rent revision (net) +60 mn. yen

0
-20
-40
-60
-80
-100
-120
-140
-160
-180
-200
(million yen)(period)

Reduction of utilities expenses through review of power providers
First round (Dec. ‘17 period – Jun. ‘18 period); Reduction of 31 million yen
Second round (Jun. ‘18 period – Dec. ‘18 period); Reduction of 17 million yen

31

3. Financial Results and Operating
Forecasts

Fluctuations in Distribution per Unit

Distribution per unit is expected to trend upward, driven by an increase in rent revenue,
despite an expected increase in property and other taxes in the 35th fiscal period (Jun. ’19).
The upward trend is likely to continue in the 36th fiscal period (Dec. ‘19).

+27

+44

+36

-1

-65

Non-operating
expense-72

Non-operating
income+104

Administrative
expense.

+39

7,350

Other rental
revenue

-21

+42

Rent
revenue

Non-operating
income7,326

Non-operating
expense-228

Non-operating
income

-217

+27

7,380

Non-operating
expense+0
Administrative
expense.

-213
Expenses related
to rent business

7,245

+113

Other rental
revenueRent
revenue+371

Administrative
expense.

+149(yen/unit)

Expenses related
to rent business

Minus item
Other rental
revenue

Plus item

Rent
revenue

Distribution per unit

Expenses related
to rent business■ Distribution per Unit (factors for period-on-period changes)

その他賃貸収入
7,388

Main changing Items

33rd period(Jun. 2018)

34th Period(Dec. 2018)(Rent revenue, etc.)
Increase in rents and common charge
Increase in Otemachi Tower’s rent
(Other rental revenue)
Increase in incidental income(Expenses related to rent business)
Increase in utilities expense
Increase in repairs and maintenance expense(Non-operating income and expense)
Lack of management association accounts (*)

35th Period (Forecast)(Jun. 2019)+310yen+53 yen+138 yen(Rent revenue, etc.)
Increase in rents and common charge
Increase in Otemachi Tower’s rent
(Other rental revenue)
Decrease in incidental income
Decrease in income equivalent to expense for restoration to original condition-155yen-104 yen-230 yen

36th Period (Forecast)(Dec. 2019)+110 yen+51 yen-126 yen-84yen(Expenses related to rent business)
Decrease in utilities expense+127 yen
Increase in property and other tax-152 yen
Decrease in repairs and maintenance expense+79 yen(Non-operating income and expense)
Increase in management association accounts (*) +53 yen(Rent revenue, etc.)
Decrease in rents and common charge
Increase in Otemachi Tower’s rent
(Other rental revenue)
Increase in incidental income(Expenses related to rent business)
Increase in utilities expense
Decrease in repairs and maintenance expense(Non-operating income and expense)
Lack of management association accounts (*)(*) Management association accounts refer to the surplus of management association fees, etc., which are contributed by JPR in buildings managed under the form of a management association, to be refunded as
settlement money at the time of account settlement of the management association.

-15 yen+51yen+107yen-118yen+74yen-54yen32

3. Financial Results and Operating
Forecasts

Medium-term Target

Aim to achieve medium-term target (DPU of 7,300 yen through internal growth and financial
strategy) ahead of schedule.
While striving for continued internal growth, enhance growth potential with external growth
and aim for DPU of 7,500 yen.
■ Results, Forecast and Medium-Term Target of Distribution per Unit
Increase revenue throughexternal growth

Enhance revenue centering on
internal growth

Grow to 6,500 yen

Grow to 7,000 yen

Managementtarget(yen/unit)

Beginning-of-period forecast

Continue internal growth andfinancial strategy

Medium-term target
Grow to 7,300 yen (Jun. '19)

Results

7,000

6,006

6,756

6,588

6,419

6,351

Grow to 7,500 yen

Achievement aheadof schedule

8,000

6,150

Enhancement of growthpotential with external growth

6,510

7,048

7,223

7,213
7,140

7,220

7,245
7,220

7,326

7,500
7,300

7,280

7,000

External
growth

6,630

6,360

6,000
6,050

6,180

5,800

5,000

4,000024th(Dec. ’13)

25th
(Jun. ’14)

26th
(Dec. ’14)

27th
(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ’16)

31st(Jun. ’17)

32nd
(Dec. ’17)

33rd
(Jun. ’18)

34th
(Dec. ’18)

Medium-termtarget(Jun. '19)

Medium-term(period)
target

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

33

3. Financial Results andOperating Forecasts

Medium-term Target

Simulation of DPU Growth■ Target contributions to distributions of each growth driver

Growth drivers

1% growth in rents and common charges
Internal growth(per period)
(用途)
(エリア)

Contribution to
distributions

Notes

Around 68 yen

Assuming that income from rents and communal charges
in the Dec. ‘18 period increased 1%(not including incidental income such as land rent andparking lot income)

Assuming acquisition of 10 billion yen

External growth property with after depreciation yield ofBorrowing capacity as of the end of the Dec. ‘18 period

Around 190 yen was 36.7 billion yen

3.5% (not including financing costs)

Financialstrategy

0.01% reduction in average cost of debt
(per period)(Assuming increase in borrowing until LTV reaches 45%)

Around 9 yen■ Other major factors that affect DPU• Increase or decrease in incidental income such as land rent andparking lot income• Increase in management expenses• Balance of utilities expenses (see page 31)• Increase in property taxes and other property costs (see page 31)• Increase or decrease in repairs and maintenance and depreciation(see page 11)

Reduction of 0.03% per term based on actual reductions
over most recent one-year period■ Estimated increase in DPU as a result of property acquisition
After depreciation yield (%)
3.2
Acquisition
cost(billion yen)

3.3

3.4

3.5

(Yen per unit)

3.6

3.7

3.8

5

87

89

92

95

98

100

103

10

173

179

184

190

195

200

206

15

260

268

276

284

293

301

309

20

347

358

368

379

390

401

412

1. The above figures are TRM’s estimates of the impact of various measures on performance based on certain assumptions and TRIM makes no guarantee whatsoever concerning the achievability of the figures or the amounts and timings
2. Contribution to distributions is the estimated increase in distributions over the period based on various assumptions divided by the number of investment units outstanding at the end of the Dec. ’18 period.
3. “Estimated increases in DPU as a result of property acquisition” does not include financing cost.

34

JAPAN PRIME REALTY INVESTMENT CORPORATION

4. Appendix

35

4. Appendix

Fund Summary(total assets)

42.1%

43.7%

40.7%

40.6%

33rd Period(Jun. 2018)
40.6%(unrealized gains and losses)

39.4%

40.3%

36.5%

35.5%

34.9%

34.2%

(acquisition value)

4.6%

4.9%

4.8%

4.7%

4.7%

4.7%

(book value)

4.9%

5.1%

5.0%

4.9%

4.9%

5.0%

(appraisal value)

4.5%

4.7%

4.5%

4.3%

4.2%

4.1%

(acquisition value)

3.7%

4.0%

3.9%

3.8%

3.8%

3.8%

(book value)

3.9%

4.2%

4.1%

4.0%

4.0%

4.0%

(appraisal value)

3.6%

3.8%

3.6%

3.5%

3.4%

3.4%

3.7%

3.5%

3.8%

3.9%

3.7%

3.7%

FFO

7,783 million yen

8,336 million yen

8,577 million yen

8,587 million yen

8,632 million yen

8,707 million yen

AFFO

7,010 million yen

7,612 million yen

8,014 million yen

7,962 million yen

7,485 million yen

7,581 million yen

FFO per unit

8,915 yen

9,549 yen

9,293 yen

9,303 yen

9,352 yen

9,433 yenEPS6,754 yen

7,047 yen

7,440 yen

7,221 yen

7,243 yen

7,324 yen

Cash distribution per unit

6,756 yen

7,048 yen

7,213 yen

7,223 yen

7,245 yen

7,326 yen

Dividend yield

3.2%

3.0%

3.6%

3.9%

3.5%

3.5%

ROE

5.5%

5.6%

5.8%

5.6%

5.6%

5.7%

29th Period(Jun. 2016)LTV

NOI yield
Afterdepreciation
yield
Implied cap rate

34ｔｈ Period(Dec. 2018)40.5%

84 yen84 yen308 yen308 yen308 yen308 yen248,154 yen

258,516 yen

258,525 yen

258,546 yen

258,626 yen

NAV per unit

273,915 yen

283,129 yen

306,192 yen

320,060 yen

329,845 yen

341,007 yen

Investment unit price422,500 yen

465,000 yen

405,000 yen

367,000 yen

416,500 yen

423,000 yen

NAV multiple

1.5 times

1.6 times

1.3 times

1.1 times

1.3 times

1.2 times

PBR

1.7 times

1.9 times

1.6 times

1.4 times

1.6 times

1.6 times

PER

31.3 times

33.0 times

27.2 times

25.4 times

28.7 times

28.9 times

FFO multiple

23.7 times

24.3 times

21.8 times

19.7 times

22.3 times

22.4 times

84.1%

80.8%

83.1%

83.7%

89.3%

89.2%

DSCR

8.7 times

9.1 times

10.7 times

11.2 times

11.6 times

12.0 times

Interest coverage ratio

7.2 times

7.7 times

8.7 times

9.0 times

9.0 times

9.6 times

AFFO payout ratio

3.
4.

32nd Period(Dec. 2017)

247,862 yen(immediately before the ex-right date)2.

31st Period(Jun. 2017)

Net asset per unit

Reserve for reduction entry per unit

1.

30th Period(Dec. 2016)

Implied cap rate = NOI (annualized, forecast for the next fiscal period x 2) / (market
capitalization + interest-bearing debts – cash and deposits + tenant leasehold andsecurity deposits)
FFO = Net income + depreciation – gain on loss on sale of real estate properties(including loss on retirement of non-current assets)
AFFO = FFO – capital expenditures
EPS = Net income / number of units outstanding (end of period)

5.
6.
7.
8.
9.

Dividend yield = Cash distribution per unit (annualized, most recent result x 2) /investment unit priceROE (return on equity) ＝ Net income (annualized, most recent result x 2) / net
assetsNAV per unit = (Net assets + unrealized gains or losses – total cash distributions) /number of units outstanding (end of period)
NAV multiple = Investment unit price / NAV per unit
PBR (price book-value ratio) = Investment unit price / net assets per unit

10.
11.
12.
13.
14.
15.

PER (price earnings ratio) = Investment unit price / EPS (annualized, most recent result x 2)
FFO multiple = Investment unit price / FFO per unit (annualized, most recent result x 2)
AFFO payout ratio = Total cash distributions / AFFODSCR = (Income before income taxes + depreciation + interest expenses) / interest expenses
Interest coverage ratio = Operating revenue / interest expenses
Reserve for reduction entry indicates the figure calculated by adding or subtracting the amounts brought
forward or reversed in the relevant fiscal period to or from the balance at the end of the fiscal period.

36

4. Appendix

Track Record of 17 Years■ Cash Distribution per Unit and Occupancy Rate
Cash distribution per unit (yen)Occupancy rate (%)
Occupancy rate

95.2

94.0

93.8

92.6

93.1

6,912 6,873
5,738

96.1

97.7

94.3

94.9

6,671

6,370 6,411 6,509

6,081

98.3

99.0

98.7

6,873 6,996 6,671

98.0

97.0

96.2

7,122 7,092

96.4

96.1

93.6

94.0

95.0

6,933 6,770

94.8

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

94.4

95.6

96.9

97.0

6,093 6,031 6,006 6,150

97.8

97.2

97.5

6,351

6,756
6,419 6,588

97.4

98.2

99.2

7,048 7,213 7,223 7,245

7,326

98.3

98.5

98.4

3,731

96.3％ on average

Cash distribution per unit

6,479 yen on average

2,545(excluding the 1st Period)

1st

2nd

3rd

4th

5th

6th

7th

8th

9th

(Jun. ‘02)

(Dec. ’02)

(Jun ’03)(Jun ’03)(Jun. ’04)

(Dec. ’04)

(Jun. ’05)

(Dec. ’05)

(Jun. ’06)

10th

11th

(Dec. ’06) (Jun. ’07)

12th

13th

(Dec. ’07) (Jun. ’08)

14th

15th

16th

17th

18th

(Dec. ’08)

(Jun. ’09)

(Dec. ’09)

(Jun. ’10)

(Dec. ’10)

19th

20th

(Jun. ’11) (Dec. ’11)

21st

22nd

(Jun. ’12) (Dec. ’12)

23rd

24th

(Jun. ’13)

(Dec. ’13)

25th

26th

(Jun. ’14) (Dec. ’14)

27th

28th

29th

30th

31st

32nd

33rd

34th

(Jun. ’15)

(Dec. ’15)

(Jun. ’16)

(Dec. ‘16)

(Jun. ’17)

(Dec. ’17)

(Jun. ’18)

(Dec. ’17)

(period)■ Asset Size
Office properties in
Tokyo

1,257
921

Office properties in
Other Cities

1,396

1,636

1,796

Retail properties

1,976 2,026 2,092

3,986 4,047 4,047
3,809 3,919(based on acquisition price; 100 million yen)

2,224

2,453 2,519

2,751 2,806

2,994 3,106

3,312 3,415 3,415

4,055 4,095 4,103 4,103

4,214

4,350 4,350 4,350 4,350

3,449

Breakdown by area andby asset class(as of Dec. 31, 2018)
Office properties inTokyo
293.0 billion yen
Office properties in Other
Cities41.0 billion yen

945

Retail properties
1st(Jun. ‘02)

2nd
(Dec. ’02)

3rd
(Jun ’03)

4th(Jun ’03)

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

30th

100.9 billion yen
31st

32nd

33rd

34th

(Jun. ’04) (Dec. ’04) (Jun. ’05) (Dec. ’05) (Jun. ’06) (Dec. ’06) (Jun. ’07) (Dec. ’07) (Jun. ’08) (Dec. ’08) (Jun. ’09) (Dec. ’09) (Jun. ’10) (Dec. ’10) (Jun. ’11) (Dec. ’11) (Jun. ’12) (Dec. ’12) (Jun. ’13) (Dec. ’13) (Jun. ’14) (Dec. ’14) (Jun. ’15) (Dec. ’15) (Jun. ’16) (Dec. ‘16) (Jun. ’17) (Dec. ’17) (Jun. ’18) (Dec. ’17) (period)37

4. Appendix

Portfolio Diversification (as of December 31, 2018)

Ratio by Asset Class

Ratio by Area

Ratio by Asset Size

(Ratio of Acquisition Price)(Ratio of Acquisition Price)(Office Properties, Ratio of Acquisition Price)• Portfolio management standards :• Portfolio management standards :70 - 90% for office properties / 30 - 10% for retail properties

80 - 90% for Tokyo / 20 - 10% for Other Cities

23.2%
Retailproperties

Medium-sized

Other Cities

15.5%
Officeproperties
Greater Tokyo(3,000 m2 to less than 10,000
m2)

Central Tokyo

30.7%

Very large(30,000 m2 or more)

56.3%

28.2%

45.2%

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

76.8%

24.1%

Ratio by Rent Zone

Ratio by Tenant’s Industry

Ratio by Contract Type(Office Properties in Central Tokyo, Ratio of Acquisition Price)(Office Properties, Area Ratio)(Office Properties, Area Ratio)

Less than 15
thousand yen

Medical and Welfare 1.2%
1.5%

2.6%

Other

1.1%

Fixed-term lease contract

Transportation 3.1%
3.3%

30 thousand yen
more

24.7%

Public Services 3.8%
Real Estate

6.3%

15 to less than 20
thousand yen

13.6%

Services

23.3%

Construction

7.2%

6.5%

43.1%

20 to less than 25
thousand yen

23.2%

25 to lessthan 30
thousand yen

Wholesale and Retail

9.9%
Finance andInsurance

11.4%

Information andCommunications

Ordinary lease contract

19.1%

86.4%

Manufacturing

13.3%

38

4. Appendix

Tenant Diversification (as of December 31, 2018)■ Ratio of Tenant Occupancy■ 20 Largest Tenants (by property; based on end tenants)• The number of office tenants other than the sponsors, etc. with tenant
occupancy of 1% or more is only 3 (combined occupancy: 3.7%)(excluding property comprising land with leasehold interest) .
• Many of the retail tenants have long-term lease contracts, and thepossibility for them to cancel is rather small.

Category(No. of tenants)

Tenant28.2%

Less than 1%

66.5%

Sponsors, etc. with
1% or more

1.7%
Other tenants with
3.7%
1% or more

Housing Design Center Kobe

35,444.13

7.5

Seiyu GK

Tanashi ASTA

31,121.71

6.6

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

19,740.95

4.2

JPR Umeda Loft Bldg.

18,586.97

3.9

Musashiurawa Shopping Square

9,558.51

2.0

Tower Records Japan Inc.

JPR Shibuya Tower Records Bldg.

8,076.85

1.7

The Maruetsu, Inc.

Cupo-la Main Bldg.

5,963.00

1.3

A companyMusashiurawa Shopping Square

5,285.40

1.1

The Otemachi Tower(land with Leasehold Interest

7,875.50

1.7

Yakuin Business Garden

6,029.57

1.3

Rise Arena Bldg.

6,023.39

1.3

JPR Nagoya Fushimi Bldg.

5,313.36

1.1

Ｅ company

Olinas Tower

4,561.87

1.0

Sompo Japan Nipponkoa Inc.

Sompo Japan Sendai Bldg.

4,379.30

0.9

Ｆcompany

Olinas Tower

4,255.56

0.9

Ｇ company

Shinjuku Square Tower

4,242.48

0.9

Ｈ company

Niigata Ekinan Center Bldg.

4,078.97

0.9

Ｉ company

Omiya Prime East

4,005.05

0.8

Ｊ company

MS Shibaura Bldg.

3,922.74

0.8

Ｋ company

Gotanda First Bldg.

3,869.35

0.8

Sponsors, etc. with
1% or more
Tokyo Prime Stage Inc.
(1 company)
Other tenants with Ｂ company
1% or more
Ｃ company(3 companies)
Ｄ company

Less than 1%(735 companies)

Ratio of
Leased space
occupancy(㎡)(%)

ABC Development Corporation

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

Retail tenants with
1% or more

Occupying property

39

4. Appendix

Move-Ins and Move-Outs of Tenants (as of December 31, 2018)■ Breakdown and Changes in Move-Ins and Move-Outs■ Move-In/Move-Out Spaces by Property(Move-in/move-out spaces by area and asset class: m2)

Move-ins – move-outs
Kanematsu Bldg.

Move-Ins

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

Net Increase/DecreaseMove-Outs

2,231-2,745

-514

1,635

-758

+876

1,448

-1,005

+442

1,543

-529

+1,014

6,858-5,039+1,818(Changes in move-in/move-out spaces and rate of move-ins/move-outs)
Move-ins (left axis)
Move-outs (left axis)
Rate of move-ins (right axis)
Rate of move-outs (right axis)

(㎡)

(%)

30,00020,000

5
3.0
2.4

4.3
2.5
1.7

10,00010,87013,663

19,916
11,3107,605

0-7,641-10,3923
1.4-10,341-10,367-10,000

6,858

6,387
-3,707-0.8

1.5-5,039-18,773

1
-1

-1.1

-1.7
-20,000-30,000

-2.3

-2.3

-3

-2.3
-4.1

-5

Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 (period)-401

JPR Ningyo-cho Bldg.

-2

Shin-Kojimachi Bldg.

+0

JPR Crest Takebashi Bldg.

+0

JPR Ichigaya Bldg.

-338

Tokyo Square Tower

0

BYGS Shinjuku Bldg.

+12

Shinjuku Center Building+14

JPR Harajuku Bldg.

0

Science Plaza - Yonbancho Plaza-84

Tokyo Square Garden+284

JPR Chiba Bldg.

+86

Shinyokohama 2nd Center Bldg.

-277

Kawaguchi Center Bldg.

0

Tachikawa Business Center Bldg.

+432

Yume-ooka Office Tower+0

Olinas Tower+334

Tokyo Tatemono Yokohama Bldg.

+299

Kawasaki DICE Bidg.

+1,014

Niigata Ekinan Center Bldg.

+79

Tokyo Tatemono Honmachi Bldg.

+79

Sompo Japan Sendai Bldg.

-20

Sompo Japan Wakayama Bldg.

+80

Tenjin 121 Bldg.

0

JPR Dojima Bldg.

+142

Yakuin Business Garden+9

JPR Shinsaibashi Bldg.

+71

Move-outs

Move-ins

-402
-378
-111
-396
-338
-494
-250
-201
-89
-84

(㎡)

376
111
396
494
262
216
89
284
86

-277
-225
-100
-154

225
533
154
334
299

-529

1,543
79
234

-154
-20

80
-119

119

-429
-282

572
291
71

40

4. Appendix

Occupancy Rate and Rent

■ Changes in Occupancy Rate, Average Downtime and Rents

RetailOfficeItem(forecast)

Dec. 2015(28th period)

Jun. 2016(29th period)

Dec. 2016(30th period)

Jun. 2017(31st period)

Dec. 2017(32nd period)

Jun. 2018(33rd period)

Dec. 2018(34th period)

Jun. 2019(35th period)

96.1

96.8

97.5

97.8

97.8

97.6

98.8

99.1

Occupancy rate based on
concluded contract, %Occupancy rate based on
generated rents, %Base rent, yen

92.9

94.7

96.0

96.5

97.1

95.8

97.8

98.4

15,12015,596

15,933

15,98016,523

17,11017,535

17,975

Target rent, yen

16,447

16,887

17,206

17,33817,934

18,512

18,91919,371

Average rent (entire area), yen
Average rent (central Tokyo),
yen
Average rent (greater Tokyo),
yen
Average rent (other cities), yen

16,716

16,961

17,003

17,57917,626

17,85917,98018,176

19,321

19,663

19,71520,70520,74820,882

21,053

21,387

17,233

16,813

16,77816,861

16,88817,134

17,233

17,23813,149

11,967

12,347

12,164

12,322

13,032

13,14913,333

-

-6.3

-4.1

-4.7

-7.0

-7.5

-8.8

-

100.0

99.9

100.0

100.0

99.7

99.4

99.9

99.9

99.9

99.9

99.9

99.9

99.6

99.2

99.4

99.8

Gap in actual rent, %Occupancy rate based on
concluded contract, %Occupancy rate based on
generated rents, %■ Status of Rent revision, Rent Through Tenant Replacement andContribution Rate (Dec. ‘18)

■ Leased Area by Rent Level/Ratio of Contracts
with Upward Rent Revision (Contracts renewed Dec. ’18 period)
Area(thousand m2)

Area ratio(%)

Ratio ofcontracts withupwardrevision (%)

Less than market rent

4.4

45.3

71.0

+7.5

Within market rent

3.7

38.7

39.3

-0.2

-7.5

Market rent more

1.5

16.0

8.3

41.0

0.0

0.0

6,784

14.1

+6.5

+18.9

20

5,429

11.3

+7.2

+27.6

Decrease through tenant
replacements

6

1,355

2.8

-0.6

Total (Rent revision + Tenant
replacement)

159

47,972

100.0

+13.7

Number ofcontracts

Area
(m2)

Area ratio(%)

Increase/
Decrease(million yen)

Increase/
Decreaseratio (%)

133

41,188

85.9

+7.2

+3.4

Upward revision of rent

64

21,135

44.1+7.4

Downward revision of rent

2

400

0.8

Neither upward or downward
revision of rent

67

19,652Tenant replacement subtotal

26

Increase through tenant
replacement

Item
Rent revision subtotal

Item■ Leased Area by Rent Level(Contracts renewed Jun. ‘19. period - Dec. ’20 period)
Area (thousand m2)

Area ratio (%)

Less than market rent

118.3

48.7

-7.7

Market rent

63.0

25.9

+5.6

Market rent more

61.7

25.4

Item

41

4. Appendix

Yields (as of December 31, 2018)■ Yields by Area and by Asset Class (based on book value)

Central Tokyo(NOI yield)
(%)

10

5

■ NOI Yield by Property (based on book value)

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

0

OfficeOfficeOfficeproperties in
Retailproperties in Greater Tokyo properties in
Other Cities properties
Central
Tokyo
6.5%
6.2%
5.2%

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.

4.1%

Portfolio average
5.0%

Gotanda First Bldg.
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Tower0

Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.
Minami Azabu Bldg.

(After-depreciation yield)(%)

Shinagawa Canal Bldg.

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

Rokubancho Bldg.
JPR Harajuku Bldg.

10

Tokyo Tatemono Kyobashi Bldg.

OfficeOfficeproperties in properties in
RetailOfficeCentralGreater Tokyo properties in properties
Tokyo
Other Cities

5

4.6%
3.6%

4.7%

Portfolio average
4.0%

JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
The Otemachi Tower
Science Plaza-Yonbancho Plaza

4.3%

Shibadaimon Center Building
Tokyo Square Garden
JPR Shibuya Tower Records Bldg.
JPR Jingumae 432
Shinjuku Sanchome East Bldg.

0

Greater Tokyo and Other Cities

Yurakucho Ekimae Bldg.
JPR Ginza Namiki-dori Building
FUNDS Suidobashi
Average of Central Tokyo

5

10

3.4
4.8
6.8
5.1
4.2
5.5
6.2
5.3
7.9
4.3
4.9
7.8
3.1
3.2
5.1
6.4
4.0
5.3
6.5
2.9
3.9
3.5
5.6
5.9
3.0
4.8
2.9
3.5
3.1
3.1
4.3
4.1

(%)

15

0

5

10

Arca East Bldg.

6.3

JPR Chiba Bldg.

6.2

JPR Yokohama Nihon Odori Bldg.

5.9

Shinyokohama 2nd Center Bldg.

15

9.3

Kawaguchi Center Bldg.

7.5

JPR Ueno East Bldg.

7.7

Tachikawa Business Center Bldg.

5.1

Rise Arena Bldg.

6.4

Yume-ooka Office Tower

6.3

Olinas Tower

5.6

Tokyo Tatemono Yokohama Bldg.

5.0

Omiya Prime East

7.6

Tanashi ASTA

14.0

Cupo-la Main Bldg.

8.8

JPR Musashikosugi Bldg.

4.4

Musashiurawa Shopping Square

6.0

Kawasaki Dice Bldg.

4.3

Average of Greater Tokyo

6.4

Niigata Ekinan Center Bldg.
Tokyo Tatemono Honmachi Bldg.

9.4
3.9

JPR Hakata Bldg.

7.0

JPR Naha Bldg.

10.1

Sompo Japan Sendai Bldg.

10.8

Sompo Japan Wakayama Bldg.

10.9

Tenjin 121 Bldg.

7.4

JPR Dojima Bldg.

6.3

JPR Nagoya Fushimi Bldg.

4.5

Yakuin Business Garden

7.5
4.8

JPR Umeda Loft Bldg.
JPR Shinsaibashi Bldg.

2.9

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

6.3
4.1
5.9

42

4. Appendix

Diversification of Lenders and Lender Formation (as of December 31, 2018)

Diversifying fund procurement sources with a lender formation comprising
32 financial institutions and through issuance of investment corporation bonds
The Hyakugo Bank, Ltd. (new borrower)
The Chiba Bank, Ltd. . (new borrower)
Yamaguchi Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd
Hiroshima Bank, Ltd.
Tokyo Marine & Nichido Fire Insurance
Daido Life Insurance Company
Daishi Bank, Ltd
The 77 Bank, Ltd.

NTT FINANCE CORPORATIONThe Iyo Bank, Ltd
Resona Bank, Ltd
The Hachijuni Bank, Ltd
Sompo Japan Nipponkoa Insurance Inc.
National Mutual Insurance
Agricultural Cooperatives

Federationof

Sumitomo Life Insurance Company

ORIX Bank Corporation
The Norinchukin BankThe Chugoku Bank, Ltd
Taiyo Life Insurance Company

The Nishi-Nippon City Bank, Ltd.
The Shinkumi Federation Bank
Meiji Yasuda Life Insurance Company

1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
2,000
2,000
2,000
2,000
2,000
2,000
3,000
3,000
3,000
4,000
4,000
4,200

(million yen)Interest-bearing debt balance: 181,020 million yen

Investment corporation
bonds
25,500(Breakdown of investment corporation bonds)
Mizuho Bank, Ltd
27,000Seventh series of bonds
Sixteenth series of bonds
Eighteenth series of bonds
Nineteenth series of bonds
Twentieth series of bonds
Twenty-first series of bonds

The Bank of Tokyo-Mitsubishi
Twenty-second series ofUFJ, Ltd.
bonds
26,000Twenty-third series of bonds

Sumitomo Mitsui Banking
Corporation
12,500Development Bank of Japan,
Inc.
10,920Shinsei Bank, Ltd. 10,000

The Bank of Fukuoka, Ltd. 5,000
Shinkin Central Bank 5,000
Aozora Bank, Ltd. 7,900
Mizuho Trust & Banking Co.,
Ltd. 7,000

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

(Status of commitment line)
LenderMizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Aozora Bank, Ltd
Mizuho Trust & Banking Co,
Ltd.
Resona Bank, Ltd
Total

Credit
Limit

4,000
4,000
4,000
4,000
4,000
4,000
24,00043

4. Appendix

Appraisal Value (as of December 31, 2018)■ An Increase in Unrealized Gains• Unrealized gains expanded to 82.7 billion yen due to an increase inappraisal value• Appraisal value increased for 39 properties with direct cap rate falling for
36 properties (out of 62 properties in total)
Appraisal value
Unrealized gains
Ratio of unrealized gains
49.37 billion yen
82.7 billion yen
20.1%(up 9.4 billion yen from 33rd
period (Jun. ‘18))(up 10.3 billion yen from 33rd
period (Jun. ‘18))(up 2.5% pt from 33rd period(Jun. ‘18))■ Factors of Change in Appraisal Value(Changes in direct cap rate)• Decreased by 1.0 percentage points from the 17th period ended June 2010
(4.8%), the peak period for office properties in Central Tokyo(％)

Entire portfolio

Office properties in Central Tokyo

5.2
4.9
4.6
4.3

(Changes in unrealized gains and losses)
Unrealized gains and losses（left axis）
Ratio of unrealized gains and losses（right axis）

4.0(100million yen)

(％)

900
800

40
82.4 billion yen
35

700

30

600

3.4
Dec.
'09

0.0

Dec.
'10

Dec.
'11

Dec.
'12

Dec.
'13

Dec.
'14

Dec.
'15

Dec.
'16

Dec.
'17

Dec.
'18 (period)

1. The changes in direct cap rate indicate the figures for the 47 properties JPR has owned since the end of June 2009 for the "Entire
portfolio," and for the 15 properties JPR owns since the date for "Office properties in Central Tokyo," respectively.

25

500

20

400
15

(Breakdown of unrealized gains and losses)• Amounts of both unrealized gains and unrealized losses improved from theend of the 33rd period (Jun. ’18).
(100 million yen)

1,000

300
10

800

5

600

0

400

200
100
0

200

-100

-5

-200

-10

-300

3.7

Dec. '02

Dec. '04

Dec. '06

Dec. '08

Dec. '10

Dec. '12

Dec. '14

Dec. '16-15
Dec. '18 (period)

Unrealized gains

Unrealized losses

Total 62 properties

49 properties

82.7 billion yen

97.2 billion yen

0

13 properties-200-14.4 billion yen-400

Entire portfolio

Breakdown of unrealized gains andlosses44

4. Appendix

Property nameAppraisal Value by Property (as of December 31, 2018)

Appraisal value Change（mn yen）（mn yen）

Direct cap(NCF Cap)(%)

Change（% pt）

DCF
discountrate(%)

Change(% pt)

DCF
terminal
cap(%)

Change（% pt）

UnrealizedBook value
gain or loss
(mn yen)(mn yen)

Property nameAppraisal value Change（mn yen）（mn yen）

Direct cap(NCF Cap)(%)

Change（% pt）

DCF
discountrate(%)

Change(% pt)

DCF
terminal
cap(%)

Change（% pt）

Book value(mn yen)

Unrealized
gain or loss
(mn yen)Kanematsu Bldg.

14,000

+100

3.5

0.0

3.3

0.0

3.7

0.0

14,578-578

Arca East

6,570

+150

4.0

-0.1

3.7

-0.1

4.2

-0.1

4,242

+2,327

Kanematsu Bldg. Annex

2,520

-

3.9

0.0

3.7

0.0

4.1

0.0

2,418

+101

JPR Chiba Bldg.

1,780

-

5.3

0.0

5.1

0.0

5.5

0.0

2,219

-439

JPR Ningyo-cho Bldg.

2,710

+220

4.0

-0.1

3.8

-0.1

4.2

-0.1

1,985

+724

JPR Yokohama Nihon Odori Bldg.

2,340

-

4.9

0.0

4.7

0.0

5.1

0.0

2,438

-98

Shin-Kojimachi Bldg.

3,860

+280

3.8

-0.1

3.5

-0.1

4.0

-0.1

2,449 +1,410

Shinyokohama 2nd Center Bldg.

1,930

+120

4.7

-0.1

4.5

-0.1

4.9

-0.1

1,408

+521

JPR Crest Takebashi Bldg.

3,570

+210

3.8

0.0

3.6

0.0

4.0

0.0

3,236

Kawaguchi Center Bldg.

10,000

+410

4.9

-0.1

4.6

-0.1

5.1

-0.1

7,240

+2,759MS Shibaura Bldg.

13,500 +1,200

4.3

0.0

4.0

0.0

4.5

0.0

10,905 +2,594

JPR Ueno East Bldg.

5,020

+170

3.9

-0.1

3.7

-0.1

4.1

-0.1

2,952

+2,067

Gotanda First Bldg.

3,510

+700

3.9

-0.1

3.6

-0.1

4.1

-0.1

2,919

+590

Tachikawa Business Center Bldg.

3,960

+20

4.3

-0.1

4.0

-0.1

4.5

-0.1

2,877

+1,082JPR Ichigaya Bldg.

4,830

-400

3.7

0.0

3.5

0.0

3.9

0.0

5,190

-360

Rise Arena Bldg.

8,560

-70

4.0

0.0

3.7

0.0

4.1

0.0

5,231

+3,328Oval Court Ohsaki Mark West

4,950

+10

3.9

0.0

3.7

0.0

4.1

0.0

2,812 +2,137

Yume-ooka Office Tower

6,660

+150

4.2

-0.1

3.9

-0.1

4.4

-0.1

5,369

+1,290Shinjuku Square Tower

14,800

-

3.7

-0.1

3.5

-0.1

3.9

-0.1

13,264 +1,535

Olinas Tower

38,100

+600

3.8

-0.1

3.5

-0.1

4.0

-0.1

27,143+10,956

BYGS Shinjuku Bldg.

18,900

-100

3.7

0.0

3.5

0.0

3.9

0.0

15,391 +3,508

Tokyo Tatemono Yokohama Bldg.

8,870

+370

4.3

-0.1

4.0

-0.1

4.4

-0.1

7,018

+1,851

894

+3

4.6

0.0

4.4

0.0

4.8

0.0

588

+305

Omiya Prime East

8,760

+150

4.5

-0.1

4.3

-0.1

4.7

-0.1

5,738

+3,021

Shinjuku Center Bldg.

16,600

+800

3.4

-0.1

3.1

-0.1

3.6

-0.1

22,183-5,583

Tanashi ASTA

12,500

-

5.2

0.0

5.1

0.0

5.4

0.0

7,224

+5,275

Minami Azabu Bldg.

2,900

-30

4.0

-0.1

3.8

-0.1

4.2

-0.1

3,820

-920

Cupo-la Main Bldg.

2,860

+60

5.1

-0.1

4.9

-0.1

5.3

-0.1

1,678

+1,181

Shinagawa Canal Bldg.

2,020

+150

4.1

-0.1

3.8

-0.1

4.3

-0.1

1,718

+301

JPR Musashikosugi Bldg.

5,690

-

4.7

0.0

4.5

0.0

4.9

0.0

6,999

-1,309

Rokubancho Bldg.

3,490

+50

5.0

-0.1

3.9

-0.1

4.3

-0.1

2,823

+666

Musashiurawa Shopping Square

4,350

-

4.9

0.0

4.8

0.0

5.1

0.0

3,627

+722

JPR Harajuku Bldg.

11,000 +1,330

3.7

0.0

3.5

0.0

3.9

0.0

8,674 +2,325

Kawasaki Dice Bldg.

16,200

-

4.2

0.0

4.1

0.0

4.4

0.0

13,248+2,951

Tokyo Tatemono Kyobashi Bldg.

5,700

-20

4.0

-0.2

3.5

-0.2

4.1

-0.2

5,285

Niigata Ekinan Center Bldg.

2,250

+20

5.7

-0.1

5.7

-0.1

5.9

-0.1

1,598

+651

JPR Nihonbashi-horidome Bldg.

6,830

-

4.2

0.0

4.0

0.0

4.4

0.0

4,710 +2,119

Tokyo Tatemono Honmachi Bldg.

3,500

+10

4.6

-0.1

4.3

-0.1

4.8

-0.1

4,256

-756

JPR Sendagaya Bldg.

12,100

+100

3.8

0.0

3.6

0.0

4.0

0.0

14,824-2,724

JPR Hakata Bldg.

3,650

+180

4.4

-0.1

4.3

-0.1

4.6

-0.1

2,955

+694

4,080

-

3.1

0.0

2.8

0.0

3.2

0.0

3,701

+378

JPR Naha Bldg.

1,950

+90

5.2

-0.1

5.2

-0.1

5.4

-0.1

1,346

+603

48,300

-

2.8

0.0

2.7

0.0

2.9

0.0

38,388 +9,911

Sompo Japan Sendai Bldg.

4,110

+70

5.0

-0.1

4.8

-0.1

5.3

-0.1

2,403

+1,706

Across Shinkawa Bldg. Annex

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

+333

+414

Science Plaza - Yonbancho Plaza

3,470

+90

4.0

-0.1

3.6

-0.1

4.2

-0.1

2,716

Sompo Japan Wakayama Bldg.

1,620

-

6.4

-0.1

6.2

-0.1

6.7

-0.1

1,324

+295

Shibadaimon Center Bldg.

6,830

+170

3.7

-0.1

3.4

-0.1

3.9

-0.1

4,160 +2,669

Tenjin 121 Bldg.

3,150

+120

4.4

-0.1

4.0

-0.1

4.6

-0.1

2,053

+1,096

Tokyo Square Garden

20,600

-

2.7

0.0

2.5

0.0

2.9

0.0

18,582 +2,017

JPR Dojima Bldg.

3,410

+310

4.3

-0.1

4.1

-0.1

4.4

-0.1

2,164

+1,245

JPR Shibuya Tower Records Bldg.

14,100

-400

3.5

0.0

3.3

0.0

3.7

0.0

11,478 +2,621

JPR Nagoya Fushimi Bldg.

3,030

+70

5.1

-0.1

4.6

-0.1

5.0

-0.1

3,849

-819

JPR Jingumae 432

4,110

-

3.1

0.0

3.2

0.0

3.3

0.0

4,273

-163

Yakuin Business Garden

18,000 +1,400

4.2

-0.1

4.0

-0.1

4.4

-0.1

10,312+7,687

Benetton Shinsaibashi Bldg.

4,420

-70

3.8

0.0

3.5

0.0

3.9

0.0

5,147

-727

JPR Umeda Loft Bldg.

14,200

+100

3.9

-0.1

3.6

-0.1

4.1

-0.1

12,402+1,797+753

Shinjuku Sanchome East Bldg.

2,970

+60

3.3

-0.2

2.8

-0.2

3.5

-0.2

2,595

+374

Yurakucho Ekimae Bldg. (Yurakucho Itocia)

3,300

+60

3.0

-0.1

2.6

-0.1

3.2

-0.1

3,302

-2

Ginza Gates

11,300

-

2.9

0.0

2.6

0.0

2.9

0.0

10,142 +1,157

Housing Design Center Kobe

7,430

+150

5.4

-0.1

5.2

-0.1

5.5

-0.1

6,099

+1,330FUNDES Suidoubashi

3,640

-

3.6

0.0

3.4

0.0

3.8

0.0

3,228

JPR Chayamachi Bldg.

7,510

+310

3.4

-0.1

3.1

-0.1

3.5

-0.1

6,034

+1,475+411

Total (Dec. 31, '18)

493,764 +9,473

410,964+82,799

Central Tokyo

271,384 +4,583

242,355+29,028

Greater Tokyo

144,150 +2,130

106,659+37,490

Other Cities

78,230 +2,760

61,949+16,280

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

45

4. Appendix

Asset Manager■ Summary of Asset Manager■ Sponsors(as of December 31, 2018)(as of December 31, 2018)

Name

Tokyo Realty Investment Management, Inc. (TRIM)

Address

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

Date of Foundation

April 28, 2000

Paid-in CapitalName

No. ofShareholding
seconded staff
ratiofrom sponsors

Tokyo Tatemono

52%

11

350 million yen

Yasuda Real Estate

18%－

Business Description

Asset management for investment corporation

Taisei Corporation

10%－

President and CEO

Yoshihiro Jozaki

Directors

10 (5 full-time and 5 part-time)

Sompo Japan Nipponkoa Insurance

10%

1

Number of Officers

35

Meiji Yasuda Life Insurance

10%1■ Organization Chart■ Sponsors Support
Shareholder’s Meeting
Auditorsno.

Summary of sponsors support

1

Personnel support through dispatching personnel to TRIM
and other measures

2

Provision of know-how on real estate management ingeneral, including tenant leasing and technical support

3

Supply of properties and provision on information onproperty acquisition

4

Fund procurement support including funding through debt
finance

Board of Directors
President & CEO
Investment Committee

Compliance Committee
Compliance Office

Investment Management Division

Financial DivisionCorporate Planning /Administration Division

Research Grp.

Financial Grp.

Planning Grp.

Investment Grp.

IR Grp.

General Administration Grp.

Asset Management 1Grp.

Fund Management Grp.

Asset Management 2Grp.
Asset Management 3Grp.

Asset Engineering Grp.

46

4. Appendix

Office Property Leasing Market

Net Increase in Leasable Floor Area, Strong Demand and Impact on Vacancy Rate
■ Changes in New Supply/Demand Area, Leasable Floor Area and Vacancy Rate
Comparison of increases in new supply area and leasable floor area

( Tokyo CBDs )• Net increase in leasable floor area (in stock) over the new supply area is small.
• New demand has remained strong, surpassing the increase in leasable floor area by
volume+400

Up 2.34 mn. tsubo• Employed population is on an upward trend, leading new demand in Tokyo.
Increase in labor participation ratio, primarily by females and elderly people, ispromoted by political initiatives and is likely to continue over the medium term.
Net increase in leasable
floor area

New supply(thousand tsubo)300

New demand

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

（100 thousand tsubo）+200

Up 1.09 mn. tsubo+0

Vacancy rate

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 (year)(%)

15(Vacancy rate: right axis, Others: left axis, New supply and new demand indicate actual number)

2019-2023
Average of new supply

2002-2018
Average of new supply

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

（thousand tsubo）

+300
+200

200

Up 1.34 mn. tsubo

10
+100

7.34

Up 1.09 mn. tsubo+0'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 (year)

5.47
100

4.03

3.61

5
3.12

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

Employed population

130

Male

FemaleOccupied area

128pt

1.88

119pt
115pt
113pt

120

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

0
2023 (year)(forecast)(forecast)(forecast)(forecast)(forecast)
1. Actual results of the vacancy rate, leasable floor area and occupied area through December 2018 are based on the Office Report (Tokyo CBDs) by Miki Shoji Co., Ltd. New
supply, new demand and loss areas as well as the leasable floor area and vacancy rate in 2019 and thereafter have been estimated based on surveys and simulations
conducted by market research agency and TRIM.
As an assumption for the simulation, the new supply area uses an estimate obtained by applying a certain multiplying factor to the average of the past results. The lost area isbased on the average of the past results as assumption.
2. The employed population was prepared by TRIM based on the Labor Force Survey, the Ministry of Internal Affairs and Communications.

110
100

’05

’06

’07

’08

’09

’10

’11

’12

’13

’14

’15

’16

’17 (year)47

4. Appendix

For-Sale Office Property Market

Cap Rate of Tokyo Office Properties Continues to Dro■ Correlation between Price and Rent of Grade A Office Properties in Tokyo■ Cap Rates of Office Properties in Tokyo(%)

Grade A office properties

Rent index(pt・’02Q1=100)

Grade B office properties

Price index

300

6.0
5.5

250
5.0
200

4.5

-0.6pt150

Last peak for grade A officeproperties

100

up 22.0pt
Q2 '16

Q3 '18Q3 '15Q4 '14Q2 '13Q3 '12

Q4 '11

Q1 '11Q2 '10

Q3 '09Q4 '08

Q1 '08

Q2 '07

Q3 '06

Q4 '05

Q1 '05

Q2 '04Q3 '03Q4 '02500

Q1 '02

2.50

Rent index-0.4ptQ1 '07
Q3 '07
Q1 '08
Q3 '08
Q1 '09Q3 '09Q1 '10Q3 '10Q1 '11
Q3 '11
Q1 '12Q3 '12
Q1 '13Q3 '13
Q1 '14Q3 '14
Q1 '15Q3 '15
Q1 '16
Q3 '16
Q1 '17
Q3 '17
Q1 '18Q3 '18Grade A

Q1 '143.0

Q4 '17

3.5

Grade BQ1 '17

4.0

Last peak for grade B officeproperties

Price index up 81.4pt

1. Prepared by TRIM based on reports publicized by Jones Lang LaSalle K.K
2. Grade A: Central 5 wards, total floor area of 30,000m2 or more, at least 20 floors, completed since 1990
Grade B: Central 5 wards, total floor area of 5,000m2 or more but less than 30,000m2, at least 8 floors, completed since 1982

48

4. Appendix

Unitholders (as of December 31, 2018)■ Number of Units by Unitholder Type (923,000 units in total)
Individuals
33,301
3%
Securities
companies
16,3852%■ Top Unitholders
Name

Foreign investors
250,458
27%

Financial
institutions
541,83459%

Of which, investment
Trusts incorporating
JPR units261,758
28%

Other domestic
corporation
81,022
9%■ Number of Unitholders by Unitholder Type (10,050 unitholders in total)
Foreign investors
460
Other domestic
4%
corporation
199
2%

Securities
companies
190%

Financial
institutions
金融機関

186
2%

Number of
Owned
Units

Share(%)

1

Japan Trustee Services Bank, Ltd. (Trust Account)

194,981

21.1

2

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

121,463

13.2

3

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

34,595

3.7

4State Street Bank West Client Treaty 505234

31,979

3.5

5Tokyo Tatemono Co., Ltd.

29,300

3.2

6

Kawasaki Gakuen

25,0002.7

7

Meiji Yasuda Life Insurance Company

24,000

2.6

8

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

21,7082.4

9JP Morgan Chase Bank 385771

12,1001.3

10State Street Bank and Trust company 505103

9,089

1.0

504,215

54.6

Total

Individuals
10,18692%

49

4. Appendix

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

130

JPR

(%)

TSE REIT Index

5.0

120

4.5

110

4.0

100

3.5

90

3.0

80

2.5

700
Jan. '18

Mar. '18

May. '18

Jul. '18

Sep. '18

Nov. '18

2.00
Jan. '18

JPR

Mar. '18

TSE REIT Index

May. '18

Jul. '18

Sep. '18

Nov. '18

1. Prepared by TRIM based on Refinitiv (Thomson Reuters) data.

50

4. Appendix

Portfolio Map■Central Tokyo

Shinjuku

Ichigaya

A-12
A-14

A-17

A-4

SaitamaPrefecture

A-5

A-9
A-24

B-5

Musashiurawa

A-20

A-4

B-6

A-3

Chiyoda Ward

B-1

Tokyo

A-1

A-26

A-2
A-13

Shibuya Ward

A-5

Harajuku

A-22

B-7

Olinas Tower
Tokyo Tatemono Yokohama Building

B-13

Omiya Prime East

B-1

Tanashi ASTA

B-3

Cupo-la Main Bldg.

B-4

JPR Musashikosugi Bldg.

Yokohama

B-5

Musashiurawa Shopping Square

B-3

B-6

Kawasaki Dice Bldg.

C-12

Sompo Japan Sendai Bldg.

C-1

Niigata Ekinan Center Bldg.

C-19

J PR Nagoya Fushimi Bldg.

C-9

JPR Naha Bldg.

Kawasaki

B-6

B-5

A-15

Shin-Yokohama
B-12

Tamachi
B-10

Tachikawa Business Center Bldg.

B-12

B-4

Kanagawa
Prefecture

Hamamatsucho

JPR Ueno East Bldg.

B-8

Chiba

Musashikosugi

A-25

Kawaguchi Center Bldg.

B-7

B-11

Shibuya
Shinagawa

Chuo Ward

Shibuya

Shinyokohama 2nd Center Bldg.

B-6

Rise Arena Bldg.

Tokyo

Minato WardJPR Yokohama Nihon Odori Bldg.

B-5

Yume-ooka Office Tower

Kinshicho

B-2
A-18

JPR Chiba Bldg.

B-3

B-10

Tokyo

A-3

A-1

Arca East

B-2

B-9

B-1

A-6

Shinbashi

B-1

B-11

Ikebukuro
Shinjuku

Tachikawa

A-19

B-9

Tanashi

B-8

Chiba
Prefecture

B-3

Kawaguchi

A-23

A-21

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

B-13

Omiya

A-7

Shinjuku Ward
A-11

■Greater Tokyo

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

KamiokaA-6■Other Cities
GotandaShinagawa

A-7
A-16
A-10

OhsakiShinagawa Ward

C-4

Tokyo Tatemono Honmachi Bldg.

C-17

JPR Dojima Bldg.

C-21

JPR Shinsaibashi Bldg.

C-1

JPR Umeda Loft Bldg.

C-5

JPR Chayamachi Bldg.
SendaiA-1

Kanematsu Bldg.

A-13

Across Shinkawa Bldg. Annex

A-24

Science Plaza - Yonbancho Plaza

A-2

Kanematsu Bldg. Annex

A-14

Shinjuku Center Building

A-25

Shibadaimon Center Bldg.

A-3

JPR Ningyo-cho Bldg.

A-15

Minami Azabu Bldg.

A-26

Tokyo Square Garden

A-4

Shin-Kojimachi Bldg.

A-16

Shinagawa Canal Bldg.

A-1

JPR Shibuya Tower Records Bldg.

A-5

JPR Crest Takebashi Bldg.

A-17

Rokubancho Building

A-3

JPR Jingumae 432

A-6

MS Shibaura Bldg.

A-18

JPR Harajuku Bldg.

A-4

Shinjuku Sanchome East Bldg.

A-7

Gotanda First Bldg.

A-19

Tokyo Tatemono Kyobashi Building

A-5

Yurakucho Ekimae Building (Yurakucho Itocia)

A-9

JPR Ichigaya Bldg.

A-20

JPR Nihonbashi-horidome Building

A-6

JPR Ginza Namiki-dori Building

A-10

Oval Court Ohsaki Mark West

A-21

JPR Sendagaya Bldg.

A-7

FUNDES Suidobashi

A-11

Shinjuku Square Tower

A-22

Ginza Sanwa Bldg.

A-12

BYGS Shinjuku Bldg.

A-23

The Otemachi Tower (Land with Leasehold Interest)

C-7

JPR Hakata Bldg.

C-14

Tenjin 121 Bldg.

C-20

Yakuin Business Garden

Niigata

NagoyaKobe

Fukuoka

Osaka
Wakayama
Naha

C-4

Housing Design Center Kobe

C-13

Sompo Japan Wakayama Bldg.

51

4. Appendix

Portfolio List (Central Tokyo)

A－1 Kanematsu Bldg.

A－2 Kanematsu Bldg. Annex

A－3 JPR Ningyo-cho Bldg.

A－4 Shin-Kojimachi Bldg.

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

③ Feb. 1993

③ Dec. 1989

③ Oct. 1984

④ 14,995m2④ 4,351m2④ 4,117m2④ 5,152m2

A－5 JPR Crest Takebashi Bldg.

A－6 MS Shibaura Bldg.

A－7 Gotanda First Bldg.

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

A－9 JPR Ichigaya Bldg.

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

③ Feb. 1988

③ Jul. 1989

③ Mar. 1989

④ 4,790m2④ 31,020m2④ 10,553m2④ 5,888m2① Chiyoda-ku②－③ Apr. 2014
11,034㎡④(ground area)

A－14 Shinjuku Center Building

A－10 Oval Court Ohsaki Mark West

A－11 Shinjuku Square Tower

A－12 BYGS Shinjuku Bldg.

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

③ Oct. 1994
78,796m2 (entire④
redevelopment area)③ Apr. 1985

③ Jun. 1994

④ 25,733m2④ 5,535m2④ 28,575m2

A－15 Minami Azabu Bldg.

A－16 Shinagawa Canal Bldg.

A－17 Rokubancho Building

A－18 JPR Harajuku Bldg.

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

③ Jul. 2008

③ Oct. 1991

③ Mar. 1989

④ 4,570m2④ 5,216m2④ 4,205m2④ 6,466m2① Shinjuku-ku② SRC・RC・S B5/54F③ Oct. 1979
④ 176,607m2
1.
2.

The property overview indicates (1) location, (2) structure/floors, (3) completion, and (4) total floor space (entire building). The same applies hereafter.
DBJ Green Building certification is as of December 2018; the same applies hereinafter.

52

4. Appendix

Portfolio List (Central Tokyo)

A－19 Tokyo Tatemono Kyobashi Building

A－20 JPR Nihonbashi-horidome Building

A－21 JPR Sendagaya Bldg.

① Chuo-ku① Chuo-ku① Shibuya-ku② SRC B1/10F② SRC B1/9F② S 8F③ Jan. 1981

③ Jun. 2002

③ May 2009

④ 4,419m2④ 7,190m2④ 7,683m2

A－22 Ginza Sanwa Bldg.

A－24 Science Plaza - Yonbancho Plaza

Aｰ26 Tokyo Square Garden

A－25 Shibadaimon Center Bldg.

① Chuo-ku① Chiyoda-ku① Minato-ku② SRC B2/9F② S・SRC・RC B2/12F② S・SRC B1/10F③ Oct. 1982

③ Feb. 1995

③ Jul. 1993

④ 8,851m2④ 24,560m2④ 11,419m2① Chuo-ku② SRC B4/24F③ Feb. 2013
④ 112,645㎡
A－1 JPR Shibuya Tower Records Bldg.

A－4 Shinjuku Sanchome East Bldg.

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

③ Jan. 2007

④ 1,066m2④ 24,617m2

A－5 Yurakucho Ekimae Building (Yurakucho Itocia)① Chiyoda-ku② S・SRC B4/20F③ Oct. 2007
④ 71,957m2① Shibuya-ku② SRC・S B3/8F③ Feb. 1992
④ 8,449m2

Aｰ6 JPR Ginza Namiki-dori Building

Aｰ7 FUNDES Suidobashi①Chiyoda-ku②S 9F③Jul. 2015
④1,477㎡① Chuo-ku② S 11F③Jun. 2008
④ 1,821㎡

53

4. Appendix

Portfolio List (Greater Tokyo)

B－1 Arca East

B－2 JPR Chiba Bldg.

B－3 JPR Yokohama Nihon Odori Bldg.

① Sumida-ku① Chiba, Chiba② S・SRC B3/19F② S・SRC B1/13F③ Mar. 1997

③ Jan. 1991

④ 34,281m2④ 9,072m2

B－11 Olinas Tower

B－7 JPR Ueno East Bldg.

B－5 Shinyokohama 2nd Center Bldg.

① Kawaguchi, Saitama① Yokohama, Kanagawa① Yokohama, Kanagawa② SRC B1/11F② S・SRC B2/12F③ Feb. 1994

③ Oct. 1989

③ Aug. 1991

④ 28,420m2④ 9,146m

2

B－8 Tachikawa Business Center Bldg.

④ 7,781m② S・SRC B2/15F

2

B－9 Rise Arena Bldg.

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

③ Dec. 1994

③ Jan. 2007

④ 8,490m2④ 14,706m2④ 91,280m

B-12 Tokyo Tatemono Yokohama Building

B－6 Kawaguchi Center Bldg.

2① Yokohama, Kanagawa② S・SRC・RC B3/27F③ Mar. 1997
④ 185,976m2

B－13 Omiya Prime East
① Saitama, Saitama① Yokohama, Kanagawa② S 9F② SRC B1/9F③ Feb. 2009

③ May 1981

④ 9,203m2④ 8,772m2① Sumida-ku② SRC・RC・S B2/45F③ Feb. 2006
④ 257,842m2

B－1 Tanashi ASTA

B－3 Cupo-la Main Bldg.

B－4 JPR Musashikosugi Bldg.

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

③ Jan. 2006

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

① Kawasaki, Kanagawa④ 18,394m2

B－5 Musashiurawa Shopping Square

B－6 Kawasaki Dice Bldg.

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

③ Aug. 2003

④ 28,930m2④ 36,902m2

54

4. Appendix

Portfolio List (Other Cities)

C－1 Niigata Ekinan Center Bldg.

C－4 Tokyo Tatemono Honmachi Bldg.

① Niigata, Niigata

C－7 JPR Hakata Bldg.

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

③ Feb. 1970

③ Jun. 1985

④ 19,950m2④ 14,619m2④ 9,828m2

C－13 Sompo Japan Wakayama Bldg.

C－14 Tenjin 121 Bldg.

C－17 JPR Dojima Bldg.

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

③ Dec. 1997

④ 5,780m2④ 10,783m2

C－19 JPR Nagoya Fushimi Bldg.

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

③ Jul. 2000

③ Oct. 1993

③ Mar. 1991

④ 6,715m2④ 8,690m2④ 5,696m2④ 10,201m2

C－20 Yakuin Business Garden

C－3 JPR Shinsaibashi Bldg.
① Osaka, Osaka② S B2/10F③ Feb. 2003
④ 5,303m2① Fukuoka, Fukuoka② SRC 14F
③ Jan. 2009
④ 22,286m2

C－1 JPR Umeda Loft Bldg.

C－4 Housing Design Center Kobe

C－5 JPR Chayamachi Bldg.

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

③ Jun. 1994

③ Jun. 1994

④ 17,897m2④ 33,877m2④ 3,219m2

55

4. Appendix

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

8955

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

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

Information of initiatives on sustainability• Sustainability policy & management
・Initiatives on behalf of tenants
・Initiatives on behalf of the environment
・Local community initiatives
・Safety and security initiatives
・Initiatives aimed at employees
・Initiatives aimed at unitholders/investors
Extensive ESG related information
Regularly announce updated data56

5. Glossary
Term

Term

Meaning

Definition of buildingclasses

The definitions of building classes used in “Changes in the average rent of the 23
wards of Tokyo” on page 12 are as follows.
Target area: Major business districts in 5 central wards of Tokyo and areas with highpercentage of office buildings in surrounding wards (Gotanda/Osaki, Kitashinagawa/Higashi-shinagawa, Yushima/Hongo/Koraku, Meguro-ku)
Class A: Total floor area of 10,000 tsubo or more, floor size of 300 tsubo or more,
age less than 15 years
Facilities (as a general rule): Ceiling height of 2.7m or more, individual airconditioning, high earthquake resistance and environmental performance
Class B: Floor size of 200 tsubo or moreClass C: Floor size of 100 tsubo or more but less than 200 tsubo

NOI yield(Rental revenue - real estate － expenses related to rent business ＋ depreciation) /book value (or acquisition price, depending on the case)
NOI yield is calculated using the above formula, by dividing the book value (oracquisition price) in the formula by 365 days and multiplying it by the number ofbusiness days of the relevant fiscal period.

After-depreciation
yield(Rental revenue - real estate － expenses related to rent business) / book value (oracquisition price, depending on the case)Number of tenants

The number of tenants counts the parties with whom JPR has concluded lease
contracts for the building floors. When a single tenant leases multiple rooms, it iscounted as one if the tenant uses the same property. If the leased rooms are in
multiple buildings, the tenant is counted in plural.

Ratio of long-term,
fixed interest ratedebts

Long-term interest-bearing debts with fixed interests / total interest-bearing debts

Average maturity

Weighted average calculated by dividing the remaining periods to the repayment
dates and redemption dates of borrowings and investment corporation bonds at theend of each fiscal period by the balance of respective borrowings and investment
corporation bonds at the end of each fiscal period
For borrowings with scheduled repayment in installments, the weighted average ofthe remaining period to the scheduled repayment dates of each installment payment
in accordance with the relevant repayment amount

Average debt cost

Weighted average calculated by dividing the remaining periods to the repayment
dates and redemption dates of borrowings and investment corporation bonds at theend of each fiscal period by the balance of respective borrowings and investment
corporation bonds at the end of each fiscal period
For borrowings with scheduled repayment in installments, the weighted average ofthe remaining period to the scheduled repayment dates of each installment payment
in accordance with the relevant repayment amount

LTVInterest-bearing debts / total assets at end of period (based on total assets)
There are other calculation methods of LTV.
・LTV based on unitholders’ capital) = Interest-bearing debts / (interest-bearing debts+ unitholders’ capital)
・LTV (based on valuation) = Interest-bearing debts / (total assets at end of period +unrealized gains or losses from valuation)
Unrealized gains or losses from valuation refer to the difference between appraisal
value and book value.

Ratio of unrealized
gains or losses(Appraisal value – book value) / book value

Cap rate

Capitalization rate by the direct capitalization method
Direct capitalization method is one of the methods to calculate the value estimatedby income approach (a method to estimate the value of the target property by
calculating the sum total of present value of the net operating income which thetarget property is expected to generate in the future), and capitalizes the net
operating income of a certain period by using the capitalization rate.

Tokyo/ Other cities“Tokyo” defined by JPR as its investment area collectively refers to “Central Tokyo”
and “Greater Tokyo” as defined below, and “Other Cities” refers to other regions.
・Central Tokyo: Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards
・Greater Tokyo: All other areas of Tokyo Prefecture, and Chiba, Kanagawa andSaitama Prefectures

Meaning

Rent

The rents stated in this report include common charges.

Acquisition price

The transaction price indicated in the sale and purchase agreement for acquisitionof properties (hereafter, the “owned properties”) or properties it plans to acquire(exclusive of expenses related to acquisition, property taxes and consumption taxes,
etc.)

Asset size

The asset size refers to the total amount of the acquisition prices of the owned
properties.

Investment ratio

The investment ratio refers to the ratio of the acquisition price of relevant
properties owned by JPR to the total acquisition price of its portfolio.

Occupancy rate /occupancy rate based on
concluded contracts

Total leased space / total leasable space
When simply stated as occupancy rate, it represents the occupancy rate based on
concluded contracts.
When occupancy rate for each fiscal period is indicated, it represents the averageoccupancy rate as of the end of each month that belongs to the relevant fiscal
period (period average of occupancy rate at end of month). Furthermore, it may bedescribed as “average occupancy rate” in order to distinguish it from “period-end
occupancy rate.”

Occupancy rate based on
generated rents(Total leased space – total leased space during rent-free periods) / total leasable
space

Average unit rent

Total monthly rent / total leased space
Calculated based on the monthly rents (including common charges) indicated in thelease contracts with tenants; for certain properties, the figure includes common
charges, etc. received by master lessees without being recorded as JPR’s revenue

Average rent-free
periodThe average of the rent-free periods agreed upon in new lease contracts becoming
effective in each fiscal period.

Revised amount ofmonthly rent

Revised amount of monthly rent indicates the sum total (including common charges) ofmonthly rent after revision minus monthly rent before revision upon contract renewal withrent revision in each fiscal period. For the revised amount of monthly rent for the 34th
fiscal period (Dec. ‘18), the amount of increase is an estimate based on consents regarding
rents becoming effective in the fiscal period, and the amount of decrease is an estimate
assumed for the rents becoming effective in the fiscal period.

Change amount inmonthly rent upontenant replacement

Change amount in monthly rent upon tenant replacement indicates the sum total(including common charges) of monthly rent after tenant replacement minus monthly rent
before tenant replacement in each fiscal period. The change amount of monthly rent upontenant replacement for the 35ｔｈ fiscal period (Jun. ‘19) is an estimate based on consents
regarding move-ins/move-outs and rents becoming effective in the fiscal period.

Target rent

Target rent refers to the rent level (the highest limit) TRIM sets for each fiscal period as thetarget for inviting new tenants and revising rents for existing tenants, and are set atroughly the same level as the highest limit of market rent.

Base rent

Base rent refers to the rent level (the lowest limit) TRIM sets for each fiscal period as thebase for inviting new tenants and revising rents for existing tenants, and are set at roughly
the same level as market rent.

57