32

nd Fiscal Period
Securities code 8955

Presentation Material
For the 32nd Fiscal Period Ended December 2017
February 20, 2018

（Asset Manager）

Tokyo Realty Investment Management, Inc.

Table of Contents and Disclaimer

Disclaimer

Table of Contents

1. Characteristics of JPR

2p

2. Operational Status and Growth Strategy

4p2-1. Summary of Financial Results

5p2-2. Internal Growth Strategy

7p2-3. External Growth Strategy

13p

2-4. Financial Strategy

15p

2-5. Sustainability

16P

3. Financial Results and Operating Forecasts

19p

4. Appendix

29p

5. Glossary

52p（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 theforward-looking statements as a result of various factors including known or unknown risks anduncertainties.
This material is solely for the purpose of providing information, and is not intended for the purposeof offering or soliciting investment, or as a means of marketing activities. Please refer any inquiries
for possible purchase of investment units or investment corporation bonds of JPR to your securities
companies.
Although JPR takes all possible measures to ensure the accuracy of the content provided in thismaterial (including references to legislation and taxation), it makes no guarantee as to the accuracy
or reliability of the content. Furthermore, the content may be subject to change without prior notice.

• This material is solely for the purpose of providing information, and is not intended forthe purpose of offering or soliciting investment, or as a means of marketing activities.
Please refer any inquiries for possible purchase of investment units or investment
corporation bonds of JPR to your securities companies.
• Although JPR takes all possible measures to ensure the accuracy of the content provided
in this material (including references to legislation and taxation), it makes no guarantee asto the accuracy or reliability of the content. Furthermore, the content may be subject tochange without prior notice.
• The photos used in this material include those of the assets other than what JPR owns or plans toacquire. Please note that for assets indicated as land with leasehold interest, JPR owns only the landand 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 other figures. Accordingly, the sum totals of monetary amounts or percentagesof respective items may not match the sum totals of actual figures.

Cover photograph：Otemachi Tower (Otemachi no Mori)

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

Asset Manager

Tokyo Realty Investment Management Inc.
(abbreviated as TRIM)

Sponsors(shareholding
ratio)

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

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

3 Superiority of a developer-sponsored REIT

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

internal growth through high occupancy
4 Continuous
rate and upward revision of rents
The average occupancy rate of the entire portfolio has stayed at 97% or higher
since the 26th fiscal period ended December 2014, and upward revision of rents
continued to surpass downward revision by value for 7 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

7 consecutive fiscal
periods（Dec. ’14 ～ Dec. ’17）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

40.6 %
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

DPU and NAV from the 32nd Fiscal Period (Dec. ‘17) Financial Results

Distribution per unit (DPU) and NAV per unit have continued to increase stably over a long periodof timeNAV per Unit 320,060 yen

DPU 7,223 yen

Period-on-period increase in NAV per unit for 9
consecutive fiscal periods since Jun. ‘13

Continuing a record high since listing
Compared with forecast at beginning of period +3 yen
Period-on-period comparison +10 yen / +0.1 %Period-on-period comparison+13,868 yen / +4.5 %（Forecast DPU：7,220 yen）

DPU（compared with forecast）

DPU（actual）（yen/unit）

7,048

7,000

6,351 6,419
6,031 6,006

6,588

7,223
7,213

6,756

NAV per unit

306,192（yen/unit）

300,000

6,150

6,000

320,060
283,129
273,915
263,026
251,804

250,000
230,437
220,672
215,648
207,597
200,000

5,000

150,0000

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

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

5

2-1. Summary of Financial Results

Business Environment Perception, results and outlook

With plans for the 32nd fiscal period ended Dec. 2017 in steady progress, JPR continued toachieve stable growth by reinforcing its resilience to changes in the external environment
Placed emphasis on “continuation of contract renewals with upward revision of rents,” “measures to increase NOI,” “continuous external growth” and “stable fundprocurement”• Needs to expand office space in the same building andrelocate for larger space remain strong, given the strong
employment conditions• Leasing of large-scale office properties scheduled forcompletion by 2019 in Central Tokyo appears to be
progressing steadily• With vacancy rates on a downward trend nationwide,
rents are also showing an upward trend• Costs of holding properties are projected to increase inaccordance with the revaluation of fixed assets for fiscal
2018

Results

Financial Strategy

Progress was made in internal growth mostly as planned• Occupancy rate based on conclude contracts
98.4%（previous period 98.5%）• Upward revision upon contract renewal （monthly rent,net） +6.1 million yen• Raising of rents upon tenant replacement (monthly rent,net) +2.7 million yen• Steady progress was made in leasing of spaces scheduled
to be vacated in the 33rd fiscal period (Jun. ‘18) by contract
cancellations• 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

Further flattened lengthening the maturity of debts andreduced debt costs【Debt financing 32nd fiscal period (Dec. ‘18)】• Average maturity（Before refinancing）5.2 years⇒（After refinancing）7.9 years• Average interest rate on borrowingss（Before refinancing）0.91%⇒（After refinancing）0.61%

Outlook

External Growth Strategy

Business
environment
perception

Internal Growth Strategy• The impact of mass supply in Central Tokyo is assumed tobe limited, considering the situations of tenant
diversification, rent levels, etc.
• Contract renewal with upward revision of rents is assumed
to proceed steadily• Endeavor to increase NOI through cost reduction and othermeasures in preparation for a possible future increase inmanagement costs• 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• Debt procurement capacity（Maximum LTV of 45％） approx. 35.8 billion yen

Continue to take measures in preparation for changes in thefinancial environment• 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
• Enhance refinance risk tolerance by expanding liquidity on
hand and other measures• 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• The Bank of Japan (BOJ) continues its monetary easing
measures amid continuous cutbacks of monetary easing
schemes in the U.S. and Europe• Long-term yields remain stable under the yield curve
control measures by the BOJ• Caution must be taken as to the future course of monetary
policy and yield trends

6

2-2. Internal Growth Strategy

Occupancy Status

Occupancy rate remains stable at a high level due to strong demand for office spaces■ Move-Ins/Move-Outs■ Occupancy Rate
• Occupancy rate based on concluded contracts remained at the 98% level and occupancy rate
based on generated rents stayed at the 97% level.
• Occupancy rate will drop temporarily in the 33rd fiscal period (Jun. ‘18) but is anticipated to pickup in the 34th fiscal period (Dec. ‘18) to the level of the 32nd fiscal period (Dec. ‘17) or higher（%）

Occupancy rate based on concluded cntracts
Occupancy rate based on generated rents

100

98

97.5

97.4

97.8

98.5

98.3

94

920

98.5

（Change in move-in/ move-out spaces and forecast）
End of Jun. ’17 period
Dec. ‘17
Jun. ‘18
End of Jun. ’18 period
VacancyspaceMove-in/move-out net space Move-in/move-out net space assumed vacancy space

97.0

96.5
95.7

97.9

97.9

97.6

97.3
96

98.4

• The vacancies that arose at JPR properties in the 31st fiscal period (Jun. ‘17) have been
almost fully leased up.
• Approx. 80% of the vacancies that arose at JPR properties in the 32nd fiscal period (Dec. ‘17)
have already been either occupied or are under new lease contracts• Move-outs will surpass 18,000m2 in the 33rd fiscal period (Jun. ‘18) but the total vacant
space is projected to remain at the same level as the 32nd fiscal period (Dec. ‘17) due toleasing up of the vacancies as soon as possible

97.2

9,465㎡-2,680㎡

9,923㎡（Move-in/ move-out spaces and major move-in/move-out properties

95.2（period）

Move-out

Move-in

Dec. '17

3,707

6,387

18,638Jun. '18

Jun. '15 Dec. '15 Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18（period）（forecast）（forecast）（㎡）

15,500（forecast）（period）

Dec. ’17■ Average rent free period

Major Move-out
Kawaguchi Center Bldg.
JPR Naha Bldg.

（month）

Major Move-in
730㎡
549㎡

JPR Dojima Bldg.
JPR Naha Bldg.
JPR Nihonbashi-horidome Bldg.

6Jun. ’18 Olinas Tower（forecast） Yakuin Business Garden

3
3.4
0

+3,138㎡

Jun. '15

JPR Ueno East Bldg.

2.3

2.4

1.9

1.8

2.0

Dec. '15

Jun. '16

Dec. '16

Jun. '17

Dec. '17

Jun. '18（period）（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 33rd fiscal period (Jun.
‘18) are estimates that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period. The respective figures forthe 34th fiscal period (Dec. ‘18) are estimates based on assumptions by JPR regarding move-ins and move-outs becoming effective in the fiscal
period.

Gotanda First Bldg.
Tokyo Tatemono Yokohama
Bldg.

4,185㎡
3,429㎡
2,359㎡
1,179㎡
1,096㎡

Olinas Tower
Yakuin Business Garden
JPR Ueno East Bldg.
Gotanda First Bldg.
Tokyo Tatemono Honmachi
Bldg.
Benetton Shinsaibashi Bldg.
Kawaguchi Center Bldg.

1,168㎡
549㎡
620㎡
3,850㎡
3,429㎡
780㎡
1,179㎡
2,100㎡
1,511㎡
582㎡

1. The move-in/move-out space in the 33rd fiscal period (Jun. ‘18) indicates the figure based on the lease contracts confirmed as of thedate of this document.

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
Ratio of contracts withupward revision

Rate of upward revision+10.0 million yen

44.6%

+7.4%

Ratio of contract with upward revision (right axis)
Upward revision
undernegotiation: 6.1
million yen

Downward revision(million yen)

+30
+20

25.6

34.0

+0

+6.0
-0.9

36.7

32.7

44.6

(%)

50

25

+10

+14.6

+10.9

+10.4
-0.4

-2.8

-5.8

+19.3
+10.0
-3.9

(25)
Jun. '16

Dec. '16

Jun. '17

Dec. '17

Jun. '18 （period）（forecast）■ Rent upon Tenant Replacement (increase/decrease of rent through tenant replacement)
Increase in monthly rent upontenant replacement

Dec. ’17(million yen)

+3.7 million yen
Upward revision

+10

36.0
+0

+1.6
-6.0

Ratio of tenant replacement withincreased rent

70.6

81.8

+4.5

+5.1

Rate of increase inrent upon tenant replacement

67.6%+21.1%(compared with the number of tenant replacement)(compared with rent including common charges)

Downward revision

Ratio of tenant replacement with increased rent (right axis)
Expected net
increase: 1.6
million yen

71.0

67.6

+4.7

+3.7

(%)

100
50

-0.9

-0.3

-1.3

-1.0

+4.9
-2.7

-10
Jun. '16

Dec. '16

Jun. '17

Dec. '17

+30
+15

-15

Gap in actual rents-30%
Period-on-period down 2.3%

7.0

（Jun. 2018 ～ Dec. 2019）-45-60
Jun. '18

Dec. '18

Ratio of cases with upward revision

0
(50)

Twice
27%

Jun. '18 （period）（forecast）

1. Revised amount of monthly rent indicates the sum total (including common charges) of monthly rent after revision minus monthly rent
before revision upon contract renewal with rent revision in each fiscal period. For the revised amount of monthly rent for the 33rd fiscal
period (Jun. ‘18), the amount of increase is an estimate based on consents regarding rents becoming effective in the fiscal period, and theamount of decrease is an estimate assumed for the rents becoming effective in the fiscal period.
2. Change amount in monthly rent upon tenant replacement indicates the sum total (including common charges) of monthly rent after
tenant replacement minus monthly rent before tenant replacement in each fiscal period. The change amount of monthly rent upon tenant
replacement for the 33rd fiscal period (Jun. ‘18) is an estimate based on consents regarding move-ins/move-outs and rents becoming
effective in the fiscal period.

Jun. '19

Dec. '19 （period）■ Status of Upward Rent Revision in Dec. ’17
Three times
3%

(100)
Dec. '15

Lower than base rent
Higher than base rent and lower than target rent
Higher than target rent （except for new contract）（million yen）

+0

0
-3.7

-10
Dec. '15• Target rent: the rent level JPR sets on its own in order to raise rents（compared with the number of contract renewal） （compared with rent including common charges）

Higher than target
rent

Upward revision• Gap in actual rents: difference between target rents and ongoing rents

Lower than target rent

Dec. ’17■ Status of Rent Levels by Fiscal Period with Contract Renewal (office properties)

Upward revision amount ofmonthly rent

once
70%

Ratio of change in upward revision
(%)

10

0
Once

Twice

Three
times

1. Gap in actual rents refers to the ratio obtained by dividing the difference of monthly amount (or, of the difference of monthly
amount after deducting the target rent from the ongoing rent for contracts to be renewed in the four fiscal periods through the 36th
fiscal period ended Dec. 2019, the difference of monthly amount after deducting the rents higher than the target rent (excluding
new contract rents) from the sum total of rents that are lower than the base rent and rents that are lower than the target rent but
higher than the base rent) by the monthly rent that serves as the calculation base.
2. Base rent refers to the rent level (the lowest limit) TRIM sets for each fiscal period as the base for inviting new tenants and revising
rents for existing tenants, primarily for office properties, and are set at roughly the same level as market rent.

82-2. Internal Growth Strategy

Internal Growth Initiatives

On top of measures to achieve continuous raising of rents, energetically endeavor to increaseother revenues and reduce expenses■ Basic Strategy■ Initiatives for Increasing NOI
Set target rents, the target for raising rents for new contracts and contract

Strategically utilize
1. target rents

renewals, for respective office properties. By clarifying the target, aim to
conduct strategic negotiations for raising rents and maximizing rents upontenant replacement

Reinforce investments

2. for value

In addition to reinforcing property competitiveness, proactively invest ininterior fittings and facilities, etc. that meets tenant needs, with an intention toenhancement

raise rents for new contracts

Continuously enhance
3. tenant satisfaction

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 from happening

Increase NOI by reviewing
4. property management andoperation methods

Review property management and operation methods while paying attention
to maintaining and improving the management quality, in an effort to promote
reduction of rental expenses and increasing incidental revenues• Reduction of power charges
Conducted bidding by several power providers to switch power supply
contracts(Buildings fully owned by JPR)

Reductions in power
charges (annual estimate)

Approx. 63 million yen

Rate of reductions (subject
properties)

Down 9.7％

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

【A case for increased NOI: Yakuin Business Garden】
JPR Best Performance Award 2017

■ Target Rents• Conduct rent revisions and leasing by pursuing the target rents• Review the target rents each fiscal period to realize continuous raising of
office rents• Highly evaluated by tenants in terms of building management status, cleaning
status and responses of staff in charge of facilities and cleaning• Good communications kept with tenants, allowing prompt responses to theircomplaints, etc.
• These results of improved tenant satisfaction have led to filling of vacancies,
which occurred after move-outs of large tenants, with expansion of leased floors
within the same building as soon as possible and contract renewals with upwardrevision of rents, successfully increasing NOI（yen/tsubo）

18,500（Percentages show period-on-period comparison of target rents）

17,500+2.6%

16,500

+1.9%

+1.0%

+3.4%
+1.0%

+2.0%

15,5000Dec. '15

Jun. '16

+4.0%
+3.0%

Target rent
Average rent（existing properties）+1.5%

Dec. '16

Jun. '17

Dec. '17+13.4%+17.9%+16.5%NOI

Appraisal value

Revision
Tenant replace

+1.0%

+0.0%
Jun. '18 （period）（foecast）

27 properties

Subject properties

列2
列3
Monthly rent

9

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 value enhancement in the 32nd fiscal
period: replacement with LED lamps at Olinas Tower■ Changes in Construction Costs and Depreciation
Depreciation

修繕費
Repairs and maintenanceCapital expenditures

Replaced lighting equipment in exclusive and common-use areas with
LED lamps in the 31st (Jun. ‘17) through 33rd (Jun. ‘18) fiscal periods, as
an energy-saving measure and for enhancing tenant satisfaction(million yen)
2,000

1,875

1,885

1,884

1,907

1,921

1,947

Reduction effect of power consumption - 52%

1,500

After：Refresh corner

After：Elevator hall

1,521
1,000
772
846

724

500

624
563

239

387

352

Jun. '16

Dec. '16

216

306

359

Jun. '17

Dec. '17

Jun. '18

0Dec. '15(period)（forecast）■ Summary of Construction Works in the 32nd Fiscal Period (Dec. ‘17) ■ Construction works scheduled for the 33rd fiscal period (Jun. ‘18)
• Total construction costs⇒Of which, works for value enhancement⇒Of which, works to switch to LED lamp, etc.

931 million yen
301 million yen
156 million yen＜Main construction＞
Kawaguchi Center Bldg.（AC etc./111 million
yen）
Olinas Tower（LED etc./87 million yen）

Benetton Shinsaibashi Bldg.（AC etc./92 million yen）

Shinjuku Center Bldg.（AC・water supply and drainage,
etc./73 million yen）

BYGS Shinjuku Bldg.（LED etc./59 million yen）
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 AC represent “renovation,” “work on elevators” and “work on air condition units”, respectively.
3. Each of the construction costs indicates the amount that includes construction management fees.

Large-scale renovations as well as replacement of air conditioning units and adoption of LED lamps
are planned with an aim to maintain and enhance the value of owned properties provide spacesthat satisfy tenants and other users＜Main construction＞
Tokyo Tatemono Honmachi Bldg.（RN・AC etc./390
million yen）
Benetton Shinsaibashi Bldg.（refurbishment, etc./154
million yen）
Olinas Tower（LED/98 million yen）
JPR Naha Bldg.（replacement of power generators/56
million yen）

Kawaguchi Center Bldg.（AC etc./235 million yen）
Tokyo Tatemono Yokohama Bldg.（RN・EV, etc./122
million yen）
BYGS Shinjuku Bldg.（LED etc./88 million yen）
JPR Umeda Loft Bldg.（RN etc./53 million yen）

10

2-2. Internal Growth Strategy

Portfolio Strategy

A portfolio centering on large and medium-sized office properties secures JPR’s superiority
in the market■ Office supply has been centered on very large properties in Central Tokyo in recent years■ Properties owned by JPR exert their competitiveness in the large and medium-sized officeproperty market through appropriate maintenance and control operations as well as management

Ratio by Asset Size
（Office）
Extra-large

Ratio by Rent Zone
（Central Tokyo, Greater Tokyo）（Tokyo CBDs and 60
thousand m2 or more over）

11.0%

9.9%

Other very large（3 thousand m2 to lessthan 10 thousand m2）

20.4%

35.3%

25 to less than 30
thousand yen（30 thousand m2
or more over）

15 to less than
20 thousand yen

44.6%

33.4%

21.9%

20 to less than
20 thousand yen

13.6%

Large

（10 thousand m2 to lessthan 30 thousand m2）

Market rent

18,000

Very large（30,000m2 or more）(year)

2012
2013
2014
2015
1.06
2016
million m2
20172018 (forecast)2019 (forecast)2020 (forecast)

4.56
million m2(thousand m2)

500

0

500

1,000

1. Prepared by TRIM based on the Office Report (Tokyo CBDs) by Miki Shoji Co., Ltd.
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.

■ Average rent of office properties owned by JPR has stayed higher than the market rent
（yen/tsubo）

Large and medium-sized（less than 30,000m2）■Changes in the average rent of the 23 wards of Tokyo
Very large(yen/tubo)

Average rent (existing properties)

17,00025,000Compared with market rent
up 4.3%15,000Medium-sized

A clear disparity exists in the rent
zones for very large properties andlarge and medium-sized properties

30,00016,000Large

35,00020,00015,000Oct. '16

Jan. '16

Apr. '15

Jul. '14

Oct. '13

Jan. '13

Apr. '12

Dec '17 （period）

Jul. '11

Jun '17

Oct. '10

Dec '16Jan. '10

Jun '16

Apr. '09

Dec '15

Jul. '08

Jun '15

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.
2. Ratio of JPR office properties by rent level refers to the ratio of acquisition price, by average unit rent (including common charges) zone, against the total acquisition
price of office properties JPR owns in Central Tokyo and Greater Tokyo.
3. Existing properties represent the properties JPR has continuously owned since the 27th fiscal period (Jun. ‘15).
4. Market rent represents the market rent level (medium value between the upper and lower limits), appraised by CBRE Japan K.K., for the office properties owned by
JPR.

Oct. '07

10,0000
14,000(year)

Jul. '17

Medium-sized

30 thousand
yen or more
Less than 15
thousand yen 10.0%■Office Supply (Increase in Leasable Floor in Tokyo’s Five Central Wards)

1．Prepared by TRIM based on the statistics data publicized by Sanko Estate Co., Ltd.
2．For the Changes in the average rent of the 23 wards of Tokyo, very large, large and medium-sized properties referto the properties with a standard floor space of at least 200 tsubos, between 100 and 200 tsubos, and between 50
and 100 tsubos, respectively.

11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

Station-front type

Characteristics

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

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

NOI yield

4.1%

6.0%

8 properties / 54.76 billion yen （asset size）

GINZA GATESJPR Jingumae 432

JPR
Chayamachi
Bldg.

JPR Shibuya
Tower Records Bldg.

Shinjuku
Sanchome
East Bldg.

FUNDES
Suidobashi

Yurakucho
Ekimae Bldg.
( Yurakucho Itocia)

JPR Umeda Loft Bldg.

6 properties / 46.18 billion yen （asset size）

Urban type8 properties

57%

Retail14 properties

Station-front
type
6 properties

Tanashi ASTA

Kawasaki Dice Bldg.

JPR
Musashikosugi
Bldg.

Musashiurawa Shopping
SquareCupo-la Main Bldg.

Housing Design
Center Kobe

43%

12

2-3. External Growth Strategy

Utilization of Sponsor Pipelines

Utilize sponsor pipelines to conduct vigorously selective investments and asset replacement

Implement external growth strategy with a focus on quality, by utilizing acquisition capacity
through debt procurement■ Utilizing the Preferential Negotiation Rights and the Main Sponsorof Pipelines
Investment Target

Investment Strategy

Office properties in Tokyo that haveexcellent location characteristics andallow expectations for stablecompetitiveness• Utilized the preferential negotiation rights held by the mainsponsor to acquire co-ownership interest of Tokyo Square
Garden• Utilize the sponsor pipelines, such as preferential negotiationrights held by JPR and the sponsors, to investigate acquisitions
through negotiated deals.
• When selling properties to the sponsors for re-development,
investigate asset replacement that should contribute toenhancement of the portfolio.

Urban retail properties that secure
after-depreciation yield

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

Additional acquisitions

Tokyo Square Garden

－

－

8.22%

Shinjuku Square Tower

38.9%+23.7% ⇒ +4.7%

67.4%

52.8%

Sponsors

Planned sale

• Enhance the quality of the portfolio
and profitability through asset
replacement.

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

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

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

• Conduct vigorously selective
investment at assumed fair value.

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

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

Ownership
ratio upon
initialacquisition

Shibadaimon Center Bldg.

JPR• Continue investigations on acquiring properties
developed by the sponsors

Major cases for property acquisitions utilizing preferential negotiation rights

Property name■ Continue External Growth by Utilizing Asset Replacement(Asset replacement policy)• Aim to build a strong and solid portfolio by systematically promoting asset
replacement.

+12.6%

Current
ownership ratio

65.4%

Shinyokohama 2nd Center Bldg.

50.0%+50.0%

100%

BYGS Shinjuku Bldg.

25.0%+50.0% ⇒ +25.0%

100%(Ratio of Co-Owned
Properties, Etc. )（Ratio of Properties by Property
Acquisition Channel）

Co-owned properties(not preferential
Negotiation right)

9 properties 59.8 bn. yen
Full ownership
32 properties
Co-owned properties(existing preferential
Negotiation right)

21 properties 190.3 bn. yen

1. JPR acquired Tokyo Square Garden by utilizing the preferential negotiation rights of Tokyo Tatemono, while acquiring the other properties in the above table byutilizing its own preferential negotiation rights.

184.8 bn. yen

Properties acquired
other than fromsponsors
119.6 bn. yen

Properties
acquisition fromsponsors
27.5%
217.3 bn. yen
Properties acquired
based on information 49.9%
provided by sponsors
98.1 bn. yen（ Top 5 properties）
Properties name

Bn. Yen1

The Otemachi Tower（land leasehold interest）

36.0

2

Olinas Tower

31.3

3

Shinjuku Center Bldg.

21.0

4

TokyoSquareGarden

18.4

5

Kanematsu Bldg.

16.2

22.6%

Properties acquired using
sponsor pipelines

72.5%

JPR’s top 5 properties were either
acquired through sponsor pipelines ordeveloped by sponsors

13

2-3. External Growth Strategy

Urban Development by the Main Sponsor

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

Owned by JPR

Urban compact retail properties （FUNDES series）
Property nameUrban compact retailproperties

FUNDES Suidobashi（Owned by JPR）

July 2015

FUNDES Jinbocho

November 2016

FUNDES Ueno

July 2017(Name to be
determined)Tenjin

July 2018

FUNDES Gotanda

July 2019

FUNDES Ginza

October 2019

Owned by JPR

FUNDES Suidobashi

FUNDES Ueno

Urban hotels
The Otemachi Tower

Tokyo Square Garden

Owned by JPR

Owned by JPR

Shinjuku Center Bldg.

Olinas Tower

No.
guestroom

Completion/plannedcompletion

Candeo Hotels Tokyo Roppongi

149

September 2017

The Square Hotel Ginza

182

August 2018

(Tentative name) Hotel Gracery
Asakusa

125

September 2018

(Tentative name) The b Osaka
Shinsaibashi

309

February 2019

(Tentative name) Candeo Hotels
Omiya

321

June 2019(Name to be determined) Kyoto
Shijo

UnfixedSummer 2020

(Name to be determined)Kyoto
Sanjo

UnfixedUnfixedHotel name

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.

Candeo Hotels
Tokyo Roppongi14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 32nd Fiscal Period (Dec. ‘17)
Average maturity
Beforerefinancing

5.2years

Average debt interest rate

After
refinancing+2.7years

Beforerefinancing

7.9years

0.91%■ Lengthening of Maturity and Flattening of Repayment Amount for EachFiscal Period to Around 10 Billion Yen
300

Jun. 2017-0.31%pt

Dec. 2017

New debt

19.0 bn. yen

17.9 bn. yen

Average maturity （change）

4.4 years

7.9 years（-0.6 years）（+2.7 years）

Average borrowing interest
rate （change）

0.61%（as of February 20, 2020）
Commitment line 24.0 bn. yen

200

0.37%

0.61%

（-0.72%pt）（-0.31%pt）（Dec. ’17 actual）（Jun. ’18 actual）

Change100

180 40-1.1 bn. Yen

81

43+3.5 years+0.24%pt

181.3 bn. yen

91

40
100 110 98 100 105
80
20
20

181.2 bn. yen
4.6 years+0.3 years

Average debt cost

1.03%

0.96%

-0.07%pt

Ratio of long-term, fixed interest
rate debts

100%

100%

±0%pt

（LTV）
Acquisition capacity(maximum LTV of 45%)

50

70

70

85

99

90

50

20

40

30

■ Average Interest on Debt for Last Three Fiscal Periods and Average
Cost of Debts To be Matured
0.97%

Jun. '18

Dec. '18

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

40.6%
35.8 bn. yen-0.1%pt+0.6 bn. yen

1.80%

1.07%

Jun. '19

1.04%

0.87%

Dec. '19

Jun. '20 （period）■ Average Maturity and Average Debt Cost
Average maturity（year）

35.1 bn. yen

20
80

Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec.（period）'17 '18 '18 '19 '19 '20 '20 '21 '21 '22 '22 '23 '23 '24 '24 '25 '25 '26 '26 '27 '27-0.1 bn. yen

4.3 years

40.7%

20

Average debt cost to be repaid by fiscal period

Average maturity

LTV (based on total assets)

10
30

50

0

50

40

20

（ Status of entire interest-bearing debts）
Total interest-bearing debts

Investment corporation bonds
新規調達（'18.6期）
New debt (Jun. ’18)

After
refinancing■ Financial Indicators and Credit Rating Status(Status of Borrowings by Fiscal Period)

Long-term loans payable
新規調達（'17.12期）
New debt (Dec. ’17)（100 mn. yen）

8

1.53%

Average debt cost

2.0%
1.44%

6

1.27%

1.21%

1.19%

1.16%

1.11%

1.03%

1.5%
0.96%

4

（Credit rating）
R&I

AA- （Stable）

2

S&P

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

0

1.0%
3.5

3.8

3.9

4.0

4.0

4.2

4.2

4.3

4.6

0.5%
0.0%

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

15

2-5. Sustainability

Sustainability (Realizing better tenant satisfaction)

Initiatives for Enhancement of Tenant Satisfaction■ Enhancement of Tenant Services■ Initiatives on Behalf of Tenants

Coordination with Property Managers and Building Managers

Periodical Tenant Satisfaction Surveys•••

Questionnaires are periodically conducted to check the tenant service levels by each property
The survey results are used to respond to tenants’ requests as promptly as possible, in aneffort to improve any problematic situation
Surveys are consigned to a third-party think tank to ensure that respondents can make a fairevaluation

3.6

Overall satisfaction (average)

3.48 3.49

3.5

3.50 3.51

3.43
3.39

3.4
3.3
3.2

3.35

3.33
3.24

3.27

3.29

3.29
［Overview of the 2017 CS survey］
Average value with 4 points being the highest
Survey period：Apr.-Jun. 2017
Surveyed building：40 building with 467 tenant
Questionnaire item：management and administration,
responses to tenants, crime prevention and safety,
emergency responses and environmental preservation, etc.

3.16

3.1
0
'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

Inspection Flow Chart for CS
Tenant satisfaction survey and inspection
Conduct periodical questionnaires••

Building management companies with excellent management levels are recognized andhonored as a model for other properties
Tenant satisfaction is set as the criteria for the honor, providing incentives to enhancesatisfaction
Excellent initiatives at honored properties are shared with the staff for other properties toraise the level of the entire portfolio

JPR Best Performance Award 2017： Yakuin Business Garden

Change in tenant satisfaction survey results（score）•• Good communications are maintained by prompt responses to tenants andother measures• Expansion of leased floors within the building has kept the property at highoccupancy even after move-outs by large tenants• Tenants give high evaluation for the responses of the staff in charge of facilities
and cleaning• Steady building management activities on a daily basis make great
contributions to increased earnings of the portfolio■ Social Contributions and Securing BCP
Initiatives of JPR Sendagaya Bldg.

Earthquake Drills/Distribution of Anti-Disaster Goods

On-site sales of snacks and sweets were conducted by
Palette, a non-profit organization. The event, arranged
by way of Daikyo Incorporated which is a tenant of theproperty, was intended to support social participationand independence of handicapped people throughsales of snacks and sweets.

• Drills to cope with earthquake disasters are
periodically conducted, assuming an earthquakethat directly hits the Greater Tokyo area
• Anti-disaster goods are distributed to tenants
to let them prepare for and learn about
disasters

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

162-5. Sustainability

Sustainability (Environmental Issues)

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

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

Systematically implement refurbishment to highly energy-efficient facilities（million yen）

Trends of construction works related to energy saving

500

394

400

300

•
•

211

215

200

131

195

186

•

100
0
Jun. '17

Dec. '17

JPR has been granted “Green Star,” thehighest ranking of assessment, for four
consecutive years
JPR was granted a higher rank of “4Stars” in the GRESB Rating, which makes
relative assessment based on total scores
JPR was assessed as level B, the second
highest, in the GRESB Public Disclosure(measuring the level of ESG disclosure)Jun. '18（forecast）

LED lightning

Air-conditioning renewal■ Solar Power Generation■ DBJ Green Building
17 properties in total have been certified, representing 28.2% of the portfolio
based on leasable floor space
Tokyo Square Garden was granted a 5-star assessment in July 2017

Utilize renewable energy by solar power generation

Solar power generation (kWh)Property name
Olinas Tower
Tokyo Square Garden

2016
8,483
53,152

2017
9,082
55,386•••
Tokyo Square Garden (roof)

Olinas Tower (solar panel)

Recognition was given to efforts
concerning energy saving such as
installation of LED lighting both in thecommon and exclusive areas
Recognition was given to efforts
concerning disaster prevention such as
installation of an emergency power
generator
Recognition was given to heat island
countermeasures such as large-scale
greening

17

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• Employing a management fee system that matches unitholder’s interests and benefits of theasset management company

Item

Calculation of Compensation

Remuneration(Dec. ‘17)
(million yen)

Share

Fixed fee

12.5 million yen per month

75

13.7%

Incentive Fee 1

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

267

48.7%

Incentive Fee 2

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

206

37.6%

Incentive Fee 3

0.25% of the acquisition price upon new acquisition－－

Acquisition

Remuneration System of the Asset Manager

Conclude agreement－

13,000

TRIM’s Board of Directors－

Investment Subcommittee－

Final decision on
acquisition

Gyosei Certified Public Tax Accountants' Co.
Group Representative Partner

Compliance Committee
JPR’s Board of Directors

4,200

Prior review /approval oftransaction withrelated parties

Nobuhisa
Kusanagi
Independent Ernst & Young
AuditorShinNihon LLC－

Partner Attorney, Spring Partners

Due diligence
subcommittee

Masato Denawa－

Due diligence

Supervising
Officer1
2,400

Investment subcommittee

Hirohito Kaneko

Tokyo Realty Investment Management Inc.
Director
Representative Counsel, Hirohito Kaneko
Law Office

Owned
units

Decision on
acquisition policy

Satoshi Okubo

Executive
OfficerFee (Dec ’17)(thousand yen)

Other Current Assignments

Compliance subcommittee

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•

Decision-Making Based on Stringent Processes

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

1. Satoshi Okubo was newly appointed as Executive Officer at the 11th General Meeting of Unitholders held on September 5, 2017 and took office on September 15, 2017. Hirohito Kaneko, former Executive Officer, retired from office on September 14, 2017 due to expiration of the term ofoffice.

18

JAPAN PRIME REALTY INVESTMENT CORPORATION

3. Financial Results and Forecasts of Financial Results

193. Financial Results and Operating
Forecasts

Overview of Financial Results for the 32nd Fiscal Period (Dec. ’17) (period-on-period
comparison)

Results of the 32nd fiscal period ended December 2017
DPU:7,223 yen (up10 yen, period-on-period)
On top of the properties acquired in the 31st fiscal period operating for the entire fiscal period, rent revenue from existing properties continued to increase period-on-period
Reduction of financial costs also contributed to achieving a period-on-period increase in cash distributions for the 8th consecutive fiscal period

Item
Operating revenue（Of whichi, gain on sale of properties）

Revenue andprofit(million yen)

Operating expenses
Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income

Rserve (million yen)Transferred from reserve

DPU (yen)(per unit)NOI

NOI yield (book value)
Rental income - real estate

Operatingindicators(million yen)

After-depreciation yield (book value)

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

Number of units outstanding (units)

31st Period

32nd Period

Change(Jun. 30, 2017)15,118(Dec. 31, 2017)15,141

+23

(210)

-

(-210)

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

7,572
7,569
8
910
6,666
6,665
7,223
10,252
4.9%
8,331
4.0%
1,921
624
329
98.4%
98.5%

+202
-178
-88
-65
-201
-201
-210
+10
+36
-0.1%pt+22-0.1%pt+13+61+83-0.1%pt+0.5%pt

923,000

923,000-

1. With regard to the gain on sale of real estate for the 31st fiscal period (Jun. ‘17), JPR recorded 210 million yen as reserve for reduction entry, applying the Special
Measures in Case Land or Other Property is Acquired in Advance in 2009 or 2010 (Article 66-2 of the Act on Special Measures Concerning Taxation).

Major Factors of Period-on-Period Changes
Net income-201
Rental income+22(JPY mn)* Impacts on net income indicated byplus and minus

Increase in rent revenue (existing properties)+68

Contribution in rent revenue (properties acquired in 31st
period (Jun. ‘17))+156

Lack of rent revenue (properties sold in 31st period (Jun. ‘17))-93

Decrease in incidental income+ 106

Increase in Increase in utilities expense(Reference) Deterioration in the balance of utilities (incidental
income - utilities expense)
Increase in outsourcing fees

-108

Increase in repairs and maintenance utilities expenses

Gain or loss on saleof properties

-1
- 22
-83

−210

(Lack of gain on sale of properties in 31st period (Jun. ‘17))

Nonoperating
income−22

Lack of settlement on management association accounts
Decrease in interest expense on loans and investment
corporation bonds

−84
+44

20

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 32nd Fiscal Period (Dec. ’17)(compared with forecasts)

Results of the 32nd fiscal period ended December 2017
DPU compared with the forecast at beginning of period: up 3 yen
Despite negatively impacted by an increase in utilities expenses and other expenses, DPU eventually reached the level surpassing the forecast at beginning of period due to suchfactors as an increase in cancellation penalty and a reduction in financial costs

Item
Operating revenue
Operating expenses

Revenue andprofit(million yen)

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income

DPU (yen)
NOI
NOI yield (book value)
Rental income - real estate

Operatingindicators(million yen)

After-depreciation yield (book value)

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

Number of units outstanding (units)

32nd Period

32nd Period

Change(Forcast)
15,073
7,494
7,578
4
917
6,664
6,664
7,220
10,271
4.9%
8,346
4.0%
1,925
911
278
98.2%
97.9%

(Result)
15,141
7,572
7,569
8
910
6,666
6,665
7,223
10,252
4.9%
8,331
4.0%
1,921
624
329
98.4%
98.5%

+68
+77
-9
+3
-6
+1
+1
+3
-19
-0.0%pt-14-0.0%pt-4-286+51+0.2%pt+0.6%pt

923,000

923,000-

1. Forecasts of financial results for the 32nd fiscal period ended December 2017 are the figures announced on August 14, 2017, based on the following assumptions.
Investment properties owned: Total 62 properties (the properties owned at end of the 31st period ended June 2017)
Average occupancy rate: 98.2%(an estimate that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period)
LTV (based on total assets): 40.6% (end of 32nd period (Dec. ‘17))(JPY mn)
Major Factors of Changes from Forecasts*
Impacts
onnet
incomeindicatedby
Net income+1plus and minus

Rental income-14

Increase in rent revenue+3

Increase in cancellation penalty, etc. and income equivalent
to expense for restoration to original condition
Increase in incidental income
Increase in utilities expense+54(Reference) Deterioration in the balance of utilities(incidental income - utilities expense)
Increase in repairs and maintenance utilities expenses-33

Nonoperating
income

+2
-36
-51

+10

Decrease in interest expense on loans and investment
corporation bonds+521

3. Financial Results and Forecasts ofFinancial Results

Forecasts of Financial Results for the 33rd Fiscal Period (Jun. ‘18) (compared with 32nd period)

Forecast of the 33rd fiscal period ending June 2018
DPU: 7,220 yen (down 3 yen from 32nd period (Dec. ‘17) actual results)
Rent revenue will continue to increase period-on-period, although an increase in such expenses as property taxes is projected, DPU is expected to be almost at the same level as
the 32nd fiscal period (Dec. ‘17) due to recording of non-operating income(JPY mn)

Item
Operating revenue
Operating expenses

Revenue andprofit(million yen)

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Net income

DPU (yen)(per unit)NOI
NOI yield (book value)
Rental income - real estate

Operatingindicators(million yen)

After-depreciation yield(book value)

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

Number of units outstanding (units)

32nd Period (Result)

33rd Period (Forecast)(Dec. 31, 2017)15,141
7,572
7,569
8
910
6,666
6,665
7,223
10,252
4.9%
8,331
4.0%
1,921
624
329
98.4%
98.5%

(Jun. 30, 2018)15,085
7,757
7,327
213
877
6,664
6,664
7,220
10,028
4.9%
8,080
4.0%
1,947
1,521
373
97.9%
97.9%

923,000

923,000

ChangeMajor Factors of Period-on-Period Changes
Net income-1 * Impacts on net income indicated byplus and minus

-56
+185
-241
+205
-33
-1
-1
-3
-224
-0.0%pt-250-0.1%pt
+26
+896
+43
-0.5%pt-0.6%pt

Rental income-250

Increase in rent revenue+81

Decrease in cancellation penalty, etc. and income equivalent
to expense for restoration to original condition-42

Decrease in incidental income
Decrease in utilities expense(Reference) Improvement in the balance of utilities expenses(incidental income expenses - utilities expenses)
Increase in property and other taxes (property and planningtaxes)
Increase in repairs and maintenance utilities expenses
Increase in depreciation
Increase in brokerage fee
Increase in management fees (including compensation for
upward revision rents)

Nonoperating
income

-90
+104
+14
-164
-43
-26
-45
-15

+239

Appropriation of settlement on management associationaccounts+208

Decrease in interest expense on loans and investment
corporation bonds+28-

1. Forecasts of financial results for the 33rd fiscal period ending June 2018 based in the following assumption.
Investment properties owned: Total 62 properties (end of the 32nd period (Dec. ‘17))
Average occupancy rate： 97.9% (an estimate that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period)
LTV (based on total assets)： 40.6% (end of 33rd period (Jun. ‘18))22

3. Financial Results and Operating
Forecasts(Reference) Overview of Rental Income-Real Estate, Etc. for the 34ｔｈ Fiscal Period (Dec, ‘18)
(compared with forecast for the 33rd period (Jun. ‘18))

Forecast of the 34th fiscal period ending December 2018
Rental income – real estate, etc.: +220 million yen (compared with the 33rd period (Jun. ‘18))
With upward revision of rents and leasing up of vacancies making a steady progress, rent revenue is projected to show a significant period-on-period increase
Aim to further increase income by filling the lack of non-operating income to be recorded in the 33rd fiscal period (Jun. ‘18)

Item
Rental revenue-real estate (a)Revenue andprofit(million yen)

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

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

Operatingindicators(million yen)

After-depreciation yield (book value)

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

33rd Period (Forecast)

34th Period (Forecast)

Change(Jun. 30, 2018)15,085
7,005
8,080
10,028
4.9%
8,080
4.0%
1,947
1,521
373
97.9%
97.9%

(Dec. 31, 2018)15,376
7,076
8,300
10,261
4.9%
8,300
4.0%
1,960
1,633
417
98.5%
98.9%

Major Factors of Period-on-Period Changes(JPY mn)
Rental income – real
* Impacts on net income indicated by+220
estate, etc.

+291
+70
+220
+232
+0.0%pt+220+0.1%pt
+12
+112
+44
+0.6%pt+1.0%pt

Rental income

plus and minus

1. Rental income – real estate, etc. represents income obtained by adding or subtracting gain or loss on sale of real estate to or from rental income – real estate.
2. Forecasts of financial results for the 34th fiscal period ending December 2018 based on the following assumptions.
Investment properties owned: Total 62 properties (end of the 33rd period (Jun. ‘17))
Average occupancy rate： 98.9% (an estimate that reflects consents regarding move-ins and move-outs that will become effective in the fiscal period)
LTV (based on total assets)：40.6% (end of 34th period (Dec. ‘18))+220

Increase in rent revenue
Lack of cancellation penalty, etc. and income equivalent to
expense for restoration to original condition
Increase in incidental income
Increase in utilities expense(Reference) Improvement in the balance of utilities expenses(incidental income - utilities expense)
Increase in repairs and maintenance utilities expenses
Decrease in brokerage fee

+229
-23
+83
-71
+12
-44
+18

23

3. Financial Results and Forecasts ofFinancial Results

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

Rental income – real estate for the 34th fiscal period ending December 2018 will decrease by 7
million yen from the 31st fiscal period (Jun. ‘17)
Rents and common charges are expected to increase period-on-period by 326 million yen(up 264 million yen from existing properties (up 1.5% when annualized), up 61 million yen from the properties acquired and sold in the 31st fiscal period (Jun. ‘17))

Item
Rental revenue - real estate
Rent revenue (fixed income)Rents and common charges
Land rents
Other fixed income
Other rental revenue (variable income)
Incidental income
Cancellation penalty, etc.
Income equivalent to expenses for restoration to original condition

Other variable income
Rental business profits(million yen)

Expenses related to rent business (excluding depreciation)

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

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

31st Period

32nd Period

33rd Period (Forecast)

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

(Dec. 31, 2017)15,141
14,254
12,275
1,580
398
887
788
35
29
33
4,889
598
878
2,044
25
329
268
584
160
10,252
1,921
6,810
8,331
8,331

(Jun. 30, 2018)15,085
14,335
12,297
1,628
410
749
698
23
28
5,057
591
774
2,209
26
373
283
568
230
10,028
1,947
7,005
8,080
8,080

(Dec. 31, 2017)15,376
14,565
12,475
1,675
414
810
781
29
5,115
599
845
2,201
25
417
270
562
191
10,261
1,960
7,076
8,300
8,300

34th Period (compared with 31st period)

Change
+469
+442
+326
+94
+21
+26
+99
-31
-35
-5
+424
+23
+75
+140
-0
+171
+10
-15
+19
+45
+52
+476
-7
-210
-218

%
+3.1
+3.1
+2.7
+6.0
+5.4
+3.4
+14.6
-100.0-100.0
-16.8
+9.0
+4.1
+9.7
+6.8
-0.0
+69.7
+4.1
-2.7
+11.0
+0.4
+2.8
+7.2
-0.1
-100.0-2.6

24

3. Financial Results and Forecasts ofFinancial Results

Change in Major Items
賃料等収入の変動状況

Rent revenue will increase by 80 million yen (from the 32nd fiscal period (Dec. ‘17)) for the
33rd fiscal period (Jun. ‘18) and by 230 million yen (from the 33rd fiscal period (Jun. ‘18)) for
the 34th fiscal period (Dec. ‘18)
Property taxes and city planning taxes will increase significantly in accordance with the revaluation of fixed assets, while the balance of utilities expenses payment is
expected to improve■ Property Taxes and City Planning Taxes Expected to Increase■ Rent revenue (factor for period-on-period changes)
Rent revenue

Plus item(from the 32nd fiscal period (Dec. ‘17))• Property taxes and city planning taxes are projected to increase significantlyin accordance with the revaluation of fixed assets in fiscal 2018
• Property taxes and city planning taxes for The Otemachi Tower will becollected by adding them on rents, starting three months after paying thetaxes
Increase in property and city planning taxes

Minus item

（million yen）

Collection of Otemachi Tower's rent
Increase amount of burden (net)（million yen）

200

Move Move
-outs
-ins
Move Move
-outs
-ins

14,123

14,254

Existing properties
Move Move
-ins
-outs

+264 -222

Acquisition

Sale-91 Others
Increase Decrease +167+5+360 -239 Increase Decrease

14,565100

revisions revisions+363 -454

14,335+117 -12

Others69
0Increase Decrease
revisions revisions Others

Jun. '18-75 yen-24 yen（forecast）+172 -11 +12

Actual increase of
burden,converted to DPU

revisions revisions+50 -43

105
22
Dec. '18（forecast）

60

81

Jun. '19

Dec. '19

Jun. '20

Dec. '20 （period）-114 yen-65 yen-88 yen-88 yen（forecast）（forecast）（forecast）

81（forecast）■ Balance of Utilities Expenses (incidental income-utilities expense)• The balance for the 32nd fiscal period (Dec. ‘17) worsened by 34 million yen
from the 31st fiscal period (Jun. ‘17) forecast• The balance is expected to improve in the 33rd fiscal period (Jun. ‘18) andthereafter due to cost reductions including switches of power providers（forecast）（forecast）

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

0
31st Period

32nd Period(Dec. ‘17)

(Jun. ’17)
Rentrevenue+130 million yen

Existing properties+50 million yen

Propertiesacquired andsold +70 million yen

33rd Period (Forecast)(Jun. ‘18)
Rentrevenue+80 million yen

Increaserevisions +170 million yen*Excludes rent revision in accordance with
the increase in property taxes and city
planning taxes+120 million yen

34th Period (Forecast)(Dec. ‘18)
Rentrevenue+230 million yen

Increaserevisions +110 million yen*Excludes rent revision in accordance with
the increase in property taxes and city
planning taxes+100 million yen

-50
-100
-150
-200

（million yen）
1. Balance of utilities expenses represents the amount obtained by simply deducting the utilities expenses for each fiscal
period from incidental income for the period. Incidental income means revenues mainly from exclusive areas, while
utilities expenses accrue mainly for exclusive and common areas, etc. Accordingly, the balance of utilities does notindicate the balance of incidental income and utilities expenses for exclusive areas.

25

3. Financial Results and Forecasts ofFinancial Results

Fluctuations in Distribution per Unit

DPU for the 33rd fiscal period (Jun. ‘18) is expected to remain almost at the same level with the 32nd fiscal
period (Dec. ‘17), despite a significant increase in property taxes and city planning taxes and other factors
Aim to increase DPU period-on-period for the 34th fiscal period (Dec. ‘18) by continuously increasing rents■ Distribution per Unit (factors for period-on-period changes)
Distribution per unit

Plus item

Minus item

(yen/unit)
Existing
properties

Rent
revenue

Expenses

7,213

Rent
revenue+74

31st Period

Main changing Items（Jun. 2017）

Other rental related to rent Rental income –Rental income –real estate due
business
revenuereal estate due Administrative
to property
acquisition

+100
-236

to property
sale

+147

-61

expense.

+9-95

32nd Period（Dec. 2017）（Existing properties other rent revenue）
Increase in incidental income（Existing properties other rent expense）
Increase in utilities expense
Increase in repairs and maintenance expense（Non operating income）
Decrease in management association accounts

Nonoperating
income+107yen-115 yen-88yen-92yenNonoperating
expense

+70

7,223

Rent
revenue+88

Other rental
revenue-149

Expensesrelated to rent
business andadministrative
expenses

Nonoperating
income-200+223

Nonoperating
expense

7,220

+66

-87

Nonoperating
profit and
loss

+248

+36

33rd Period (Forecast)（Jun. 2018）（Other rent revenue）
Decrease in incidental income
Lack of cancellation penalty, etc.
（Rent expense and administrative expense）
Decrease in utilities expense
Increase in property and other tax
Increase in repairs and maintenance expense（Non operating income）
Decrease in management association accounts

Expensesrelated to rent
business andOther rental administrative
revenue
expenses

34th Period (Forecast)（Dec. 2018）-98yen-38yen+113yen-179yen-48yen（Other rent revenue）
Increase in incidental income+91yen（Rent expense and administrative expense）
Increase in utilities expense-78yenIncrease in repairs and maintenance expense -48 yen（Non operating profit and loss）
Lack of management association accounts
Decrease in financial cost

+226yen26

3. Financial Results and Forecasts ofFinancial Results

Traces of Growth in Distribution per Unit

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

Maintain 6,000 yen

Grow to 6,500 yen

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

Enhance revenue centering on internal growth

Increase revenue through external growthTarget of 6,500 yen set
upon announcing
financial results in Jun.
2014

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

（yen/unit）

Beginning-of-period forecast

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

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

Continue internal growth
Enhance growth potential throughexternal growthTarget of 7,500 yen set
upon announcing financial
results in Jun. 2016

Internal growth
Financial strategy

Results

8,000

7,000
6,430
6,000

5,680
5,750

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

6,031

6,006

6,360
6,050

6,000
5,700

6,150

5,800

5,800

23rd
(Jun. ’13)

24th
(Dec. ’13)

6,419

6,510

6,756

7,000

7,213

7,223

7,500

7,200
7,140

6,630

6,180

Increased due to recording ofproperty tax, etc. on properties
acquired in 21st period(Jun. ’12) to costs

5,000

4,000
0

6,093

6,351

6,588

7,048

7,300

External
growth18th(Dec. ’10)

19th
(Jun. ’11)

20th
(Dec. ’11)

21st(Jun. ’12)

22nd
(Dec. ’12)

25th
(Jun. ’14)

26th
(Dec. ’14)

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

27th(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ’16)

31st(Jun. ’17)

32nd
(Dec. ’17)

Jun. ‘19（period）
Medium-termtarget27

3. Financial Results and Forecasts ofFinancial Results

Growth Scenario for Distribution per Unit

Growth Scenarios for Achieving Medium-Term Target
Achieve the medium-term target by continuing internal growth, reducing debt costs and realizing external growth+0.0 -105

-53

0

53

105

158

+1.0

-4

49

102

156

209

262

+2.0

97

151

205

259

312

366

+3.0 199

253

307

361

416

470

2.

Expecting a progress made in internal growth and financial strategy as previously
assumed, DPU is projected to reach 7,300 yen for 35th period (Jun. ‘19)
Assume to achieve 7,500 yen through external growth, though in consideration of
the current acquisition environment the period by which this target is to beachieved has not been set• Average debt cost of repayments over three fiscal
periods since the 33rd period (Jun. ‘18): 1.16%
Average debt amount of repayments: about 32.3 billion
yen (until 35th fiscal period ending Jun. 2019)
Average debt cost with assumed refinance:0.5%～0.9%• Work to flatten repayment amount for each fiscal
period while procuring funds focused on long-term
debt in consideration of the recent interest rate trends

0.90（yen/unit）

Jun. ‘18～Jun. ’19
Jun. '18 Dec. '18 Jun. '19
12
4
45
20

10

50

80

0.70

27

15

54

96

0.60

34

21

59

114

0.50

41

26

64

131

Amount of increase in rental income – real at least 200 yen as a target
estate through property acquisitions:• Work to acquire properties that should contributeto earnings from existing portfolio by utilizing
preferential negotiation rights and asset
replacement, etc.
• Acquisition price: 10.0～15.0 billion yen

Total
61

0.80

（Assumptions for after-depreciation yield and acquisition price）

5

3.

【Assumed Scenario】

Internal growth

Financial strategy

External growth

1. Impact of

2. Up throughinternal growth andfinancial strategy

3. Up throughexternal growthhigher tax

at least 95 yen as a target of 35th

（Assumptions of debts costs through future refinancing）*The estimates in the table to the right do not include fundprocurement costs.

The scenario for achieving the medium-term target was revised in 31st period (Jun.
‘17), in consideration of a significant increase in expense burdens in accordancewith the fiscal 2018 revaluation of property taxes and city planning taxes, etc.

96.0 96.5 97.0 97.5 98.0 98.5

Debt cost (%)

Financial strategy
External growth strategy

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

Rate of increase in rent
revenue (%)(Assumptions for occupancy rate based on generated rents
for office properties and rate of increase in rent revenue)• Occupancy rate based on generated rents foroffice properties and rate （%）: at least 97.0%• rate of increase in rent revenue (%): at least up
0.4%

Increase by reducing debt costs

1.

at least 100 yen as a target of 35th （yen/unit）

Amount of increase in rent revenue:

Acquisition price(billion Yen)

Internal growth strategy■ Simulation for Achieving the Medium-Term Target (contribution amounts to distribution per unit) (Growth Scenario for Distribution per Unit)（yen/unit）

After-depreciation yield （%）
3.2

3.3

3.4

3.5

3.6

3.7

3.8

87

89

92

95

98

100 10310 173 179 184 190 195 200 206

15 260 268 276 284 293 301 309
20 347 358 368 379 390 401 412

7,500 yen+200
7,300 yen

7,223
D P DPUU (32ND)(Dec. 2017)

▲114

7,109
After considering theimpact of increased
property taxes and city
planning taxes for 35th
period (Jun. ‘19)

+95
+100
7,109

7,300

DPU for 35th period (Jun.
‘19) projected to be 7,300
yenAssumed external growth

DPU (Dec. ’17)＋
Considering the impact
of increased property
taxes and city
planning taxes＋
Up through internal
growth and financial
strategy until Jun. ‘19• Deduct the impact amount of increased property taxes and city planningtaxes for 35th period (Jun. ‘19) from the 32nd period (Dec. ‘17) DPU• Assumption that adds expected growth (from internal growth and financial
strategy) through 35th period (Jun. ‘19)
• As the impact of mass supply of office spaces in Central Tokyo in 2018 andafterward is limited, it is assumed that vacancy rate does not surpass 5% andthe market rent does not fall
• It is assumed that long-term interest rate does not rise significantly from thecurrent level＋Assumedexternal growth• Scenario that assumes external growth through property acquisitions

1. Each of these figures is just a target or a plan. There is no guarantee that the figures are achieved. The details of these policies may be changed without prior notice in accordance with the real estate market conditions and the investment environment in the future.
2. The contribution amounts to distribution per unit shown in the simulation of internal growth strategy, financial strategy and external growth strategy indicate the figures obtained by dividing the assumed full-period increase amounts based on respective assumptions by the total
number of investment units outstanding assumed for the end of the 32nd fiscal period (Dec. ‘17).

28

JAPAN PRIME REALTY INVESTMENT CORPORATION

4. Appendix

29

4. Appendix

Fund Summary
27th Period(Jun. 2015)

32nd Period(Dec. 2017)

After-depreciation yield (acquisition price)

42.1%
39.4%
4.6%
4.9%
3.7%

43.7%
40.3%
4.9%
5.1%
4.0%

40.7%
36.5%
4.8%
5.0%
3.9%

40.6%
35.5%
4.7%
4.9%
3.8%

After-depreciation yield (book value)

3.8%

3.8%

3.9%

4.2%

4.1%

4.0%

Implied cap rate

3.6%

3.5%

3.7%

3.5%

3.8%

3.9%

FFO

7,457 million yen

7,624 million yen

7,783 million yen

8,336 million yen

8,577 million yen

8,587 million yen

AFFO

6,796 million yen

6,778 million yen

7,010 million yen

7,612 million yen

8,014 million yen

7,962 million yen

FFO per unit

8,543 yen

8,733 yen

8,915 yen

9,549 yen

9,293 yen

9,303 yenEPS6,418 yen

6,586 yen

6,754 yen

7,047 yen

7,440 yen

7,221 yen

Net asset per unit
NAV per unit

6,419 yen
3.2%
5.2%
84 yen247,529 yen
251,804 yen

6,588 yen
3.1%
5.3%
84 yen247,696 yen
263,026 yen

6,756 yen
3.2%
5.5%
84 yen247,862 yen
273,915 yen

7,048 yen
3.0%
5.6%
84 yen248,154 yen
283,129 yen

7,213 yen
3.6%
5.8%
308 yen258,516 yen
306,192 yen

7,223 yen
3.9%
5.6%
308 yen258,525 yen
320,060 yen

Investment unit price

397,000 yen

420,500 yen

422,500 yen

465,000 yen

405,000 yen

367,000 yen

1.6 times
1.9 times
30.9 times
23.2 times
82.4%
7.9 times
6.2 times

1.7 times
1.9 times
31.9 times
24.1 times
84.8%
8.7 times
6.9 times

1.5 times
1.7 times
31.3 times
23.7 times
84.1%
8.7 times
7.2 times

1.6 times
1.9 times
33.0 times
24.3 times
80.8%
9.1 times
7.7 times

1.3 times
1.6 times
27.2 times
21.8 times
83.1%
10.7 times
8.7 times

1.1 times
1.4 times
25.4 times
19.7 times
83.7%
11.2 times
9.0 times

NOI yield (acquisition value)
NOI yield (book value)

Cash distribution per unit (result)Dividend yield
ROE
Reserve for reduction entry per unit

（immediately before the ex-right date）

NAV multiple
PBR
PER
FFO multiple
AFFO payout ratio
DSCR
Interest coverage ratio

3.
4.

31st Period(Jun. 2017)

42.1%
40.3%
4.6%
4.8%
3.7%

LTV (unrealized gains and losses)

2.

30th Period(Dec. 2016)

42.1%
41.2%
4.6%
4.8%
3.7%

LTV (total assets)

1.

29th Period(Jun. 2016)

28th Period(Dec. 2015)

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 = (Net income + 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.

30

4. Appendix

Track Record of 16 Years■ Cash Distribution per Unit and Occupancy Rate
Cash distribution per unit (yen)Occupancy rate (%)

99.0 98.7 98.0 97.0
96.9 97.0 97.2 97.5 97.4 97.8 98.3 98.5 98.4
96.2 96.4 96.1
96.1 97.7 98.3
95.2 94.0 93.8
93.6 94.0 95.0 94.8 94.4 95.6
92.6 93.1 94.3 94.9

6,912 6,873

6,671
5,738

6,081

6,370 6,411 6,509

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

6,933 6,770

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

6,093 6,031 6,006

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

6,756

Occupancy rate

96.2％ on average

7,048 7,213 7,223

Cash distribution per unit

3,731

6,427 yen on average

2,545(excluding the 1st Period)

1st(Jun. ‘02).

2nd(Dec. ’02)

3rd
(Jun ’03)

4th(Jun ’03)

5th(Jun. ’04)

6th
(Dec. ’04)

7th
(Jun. ’05)

8th
(Dec. ’05)

9th
(Jun. ’06)

10th
(Dec. ’06)

11th
(Jun. ’07)

12th
(Dec. ’07)

13th
(Jun. ’08)

14th
(Dec. ’08)

15th
(Jun. ’09)

16th
(Dec. ’09)

17th
(Jun. ’10)

18th
(Dec. ’10)

19th
(Jun. ’11)

20th
(Dec. ’11)

21st(Jun. ’12)

22nd
(Dec. ’12)

23rd
(Jun. ’13)

24th
(Dec. ’13)

25th
(Jun. ’14)

26th
(Dec. ’14)

27th
(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ‘16)

31st(Jun. ’17)

32nd
(Dec. ’17)

（period）■ Asset Size
Office properties inTokyo

1,257 1,396

Office properties in
Other Cities

1,636

1,796

Retail properties

1,976 2,026 2,092

3,986 4,047 4,047 4,055
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

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

4,350 4,350

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

Breakdown by area and byasset class(as of December 31, 2017)
Office properties in Tokyo
293.0 billion yen
Office properties in Other
Cities41.0 billion yen

921 945

Retail properties

100.9 billion yen
1st(Jun. ‘02).

2nd(Dec. ’02)

3rd
(Jun ’03)

4th(Jun ’03)

5th(Jun. ’04)

6th
(Dec. ’04)

7th
(Jun. ’05)

8th
(Dec. ’05)

9th
(Jun. ’06)

10th
(Dec. ’06)

11th
(Jun. ’07)

12th
(Dec. ’07)

13th
(Jun. ’08)

14th
(Dec. ’08)

15th
(Jun. ’09)

16th
(Dec. ’09)

17th
(Jun. ’10)

18th
(Dec. ’10)

19th
(Jun. ’11)

20th
(Dec. ’11)

21st(Jun. ’12)

22nd
(Dec. ’12)

23rd
(Jun. ’13)

24th
(Dec. ’13)

25th
(Jun. ’14)

26th
(Dec. ’14)

27th
(Jun. ’15)

28th
(Dec. ’15)

29th
(Jun. ’16)

30th
(Dec. ‘16)

31st(Jun. ’17)

32nd
(Dec. ’17)

（period）

31

4. Appendix

Portfolio Diversification (as of December 31, 2017)

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

Ratio by Area
• Portfolio management standards (target investment
ratios): 80 - 90% for Tokyo / 20 - 10% for Other Cities• Comprised of medium-sized to very large properties with afocus on quality(Small-scale properties with a standard floor of less than 100 tsubos are excluded frominvestment targets.)

Retailproperties

Medium-sized

Other Cities

15.5%

23.2%

Officeproperties

76.8%

Ratio by Asset Size (Office Properties)

Greater Tokyo

28.2%(3,000 m2 to less than 10,000
m2)

Central Tokyo

30.7%

Very large(30,000 m2 or more)

56.3%
Large

45.2%

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

24.1%

Ratio by Rent Zone (Office Properties in Tokyo)

30 thousand yen
moreLess than 15
thousand yen

9.1%
15 to less than 20
thousand yen

12.6%
25 to lessthan 30
thousand yen
or more36.6%

Ratio by Tenant’s Industry (Office Properties)• Comprised of tenants mainly in the services, information andcommunication and manufacturing sectors
Medical and Welfare 2.7%
Other 1.6%
Transportation 1.7%
Public Services 4.1%
Construction

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

Services

8.2%

21.7%

Real Estate

8.8%

Information andCommunications

27.3%
20 to less than 25
thousand yen

Ratio of Co-Owned Properties, Etc.

16.4%

Wholesale and Retail

Full ownership
32 buildings

Co-owned
properties, etc.
30 buildings

42.5%

57.5%

and
10.2% FinanceInsurance
Manufacturing

11.1%

13.6%

32

4. Appendix

Tenant Diversification (as of December 31, 2017)■ Ratio of Tenant Occupancy (by property; based on end tenants)• The number of office tenants other than the sponsors, etc. with tenant
occupancy of 1% or more is only 2 (combined occupancy: 2.4%)(excluding property comprising land with leasehold interest) .
• Many of the retail tenants have long-term lease contracts, and thepossibility for them to cancel is rather small.

■ 20 Largest Tenants (by property; based on end tenants)
Category (No. of
tenants)

TenantLess than 1%

67.5%

1.7%
Other tenants with
2.4%
1% or more

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

Nitori Holdings Co., Ltd.

MusashiurawaShopping Square

5,285.40

1.1

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

The Otemachi Tower(land with Leasehold Interest)

7,875.50

1.7

Rise Arena Bldg.

6,023.39

1.3

JPR Nagoya Fushimi Bldg.

5,313.36

1.1

LEVEL-5 Inc.

Yakuin Business Garden

4,579.17

1.0

Sompo Japan Nipponkoa Inc.

Sompo Japan Sendai Bldg.

4,400.03

0.9

ATM Japan, Ltd.

Olinas Tower

4,255.56

0.9

Nihon Suido Consultants Co., Ltd.

Shinjuku Square Tower

4,242.48

0.9

Canon Imaging Systems Inc.

Niigata Ekinan Center Bldg.

4,078.97

0.9

Kajima Corporation

Omiya Prime East

4,005.05

0.9

Mitsubishi Electric Information
Systems Corporation

MS Shibaura Bldg.

3,922.74

0.8

SBS Holdings, Inc.

Olinas Tower

3,850.43

0.8

Security communication
Association (foundation)

Olinas Tower

3,544.12

0.8

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

Less than 1%(734 companies)

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

Ratio ofoccupancy（%）

Housing Design Center Kobe

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

Leasedspace(㎡)

ABC Development Corporation

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

28.4%

Occupying property

33

4. Appendix

Move-Ins and Move-Outs of Tenants (as of December 31, 2017)■ Breakdown and Changes in Move-Ins and Move-Outs■ Move-In/Move-Out Spaces by Property(Move-in/move-out spaces by area and asset class: m2)
Move-Ins
Office properties inCentral Tokyo
Office properties inGreater Tokyo
Office properties in
Other Cities
Retail properties
Total

Move-ins – move-outs

Net Increase/DecreaseMove-Outs

20,00010,000-7,641-10,000-22

JPR Nihonbashi-Horidome Bldg.

+629

3,028

-1,435+1,593

Science Plaza – Yonbancho Plaza

+140

622

-776

-153

ＧＩＮＺＡ ＧＡＴＥＳ

-146

-457

6,387

-3,707+2,679Arca East

-482

-482

JPR Chiba Bldg.

+334

-98

432

JPR Yokohama Nihon Dori Bldg.

+331

-74

405

Shinyokohama 2nd Center Bldg.

+98

Kawaguchi Center Bldg.

-304

Niigata Ekinan Center Bldg.

+210

Tokyo Tatemono Honmachi Bldg.

+50

JPR Hakata Bldg.

+10

JPR Naha Bldg.

-0

Sompo Japan Wakayama Bldg.

-163

Tenjin 121 Bldg.

+279

Move-outs (left axis)
Rate of move-outs (right axis)

13,663

11,310

7,605-20,000

1.4

4-10,341-10,367

2

6,387-3,707-10,392

（%）

2.5

0

-2.3

-2.3

629
140
310

98
-730

426
210
50
-72

82

-549

549
-326

162
279

JPR Dojima Bldg. +1,168

-0.8
-2

-1.7
-2.5

202

-1,385

2.4-12,890

290

1,362

0
-11,603

+290
+202

3.0

10,870JPR Ichigaya Bldg.
Shinjuku Center Bldg.

1.7
11,764111+0+1,262

1.8

8,224

-111

Shin-Kojimachi Bldg.

（㎡）

-111

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

Move-ins

1,373(Changes in move-in/move-out spaces and rate of move-ins/move-outs)（㎡）

Move-outs

-2.3

-2.9
-4

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

1,168

JPR Nagoya Fushimi Bldg.

+321

Yakuin Business Garden

+0

-203

Beneton Shinsaibashi Bldg.

-283

-283

JPR Chayamachi Bldg.

-7

-319

321

203
311

34

4. Appendix

Occupancy Rate and Rent

■ Changes in Occupancy Rate, Average Downtime and Rents
Occupancy rate based on
conclude contract (office),%Occupancy rate based on
conclude contract (retail), %Occupancy rate based on
generated rents (office), %Occupancy rate based on
generated rents (retail), %Average downtime, monthJun. 2015(27th period)

Dec. 2015(28th period)

Jun. 2016(29th period)

Dec. 2016(30th period)

Jun. 2017(31st period)

Dec. 2017(32nd period)

96.2

96.1

96.8

97.5

97.8

99.8

100.0

99.9

100.0

93.7

92.9

94.7

99.6

99.9

Jun. 2018 (forecast) Dec. 2018 (forecast)(33rd period)(34th period)

97.8

97.3

98.2

100.0

99.7

99.3

99.3

96.0

96.5

97.1

95.9

96.2

99.9

99.9

99.9

99.6

99.2

99.2

12.2

8.5

7.9

3.8

4.3

9.5

3.6

-

Target rents (average), yen

16,21816,456

16,886

17,206

17,38017,561

18,157-

Base rent (average), yen
Average rent (existing
properties), yen

14,817

15,127

15,602

15,933

16,031

16,196

16,802-

14,381

14,406

14,463

14,563

14,654

14,70814,861-

Dec. 2014(26th period)

Jun. 2015(27th period)

Dec. 2015(28th period)

Jun. 2016(29th period)

Dec. 2016(30th period)

Jun. 2017(31st period)

Dec. 2017(32nd period)

+5.9

+15.3

+6

+10.4

+10.9

+14.6

+10

-1.4

-5.1

-0.9

-0.4

-2.8

-5.8

-3.9

+4.5

+10.2

+5.1

+10

+8.1

+8.8

+6.1

■ Changes in Rent Revision
Upward revision amount ofmonthly rent, million yen
Downward revision amount ofmonthly rent, million yen
Net revision amount ofmonthly rent, million yen■ Status of Rent revision, Rent Through Tenant Replacement and Contribution Rate

Upward revision
Downward revision
Not change revision
Increase in rent upon tenant
replacement
Decrease in rent upon tenant
replacement
Total

Amount ofmonthly rent,
million yen
+10.0
-3.9
0.0

Number of cases

Percentage ofcases, %

62
7
70

35.8
4.0
40.4

+3.7

23

13.3

-1.0

11

6.4

+8.8

173

100.0

■ Change in Gap Actual Rent(%)

Contribution rate

0+0.43%-2

1. Average rent (existing properties) indicates the assumed average rent at full occupancy for the properties that JPR has continuously held since the 27th fiscal period (Jun. ’15).
2. Contribution ratio indicates the figure obtained by dividing the sum total of increases and decreases in rents through rent revisions and upon tenant replacement by the assumed averagerent at full occupancy for the properties that JPR has continuously held since the 27th fiscal period (Jun. ‘15).

-4
-6

-4.1
-6.3

-4.7
-7.0

-8

Jun. '16 Dec. '16 Jun. '17 Dec. '17 (period)35

4. Appendix

Yields (as of December 31, 2017)■ 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 yield0

OfficeOfficeproperties in
Retailproperties in Greater Tokyo
OfficeCentralproperties
properties inTokyo
Other Cities
6.4%
5.4%
5.1%
4.2%

Portfolio average
4.9%

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Tower0

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

(After-depreciation yield)（%）

10

Shinagawa Canal Bldg.

JPR Harajuku Bldg.
Tokyo Tatemono Kyobashi Bldg.

5

4.9%
3.6%

JPR Nihonbashi-horidome Bldg.

Retailproperties
Officeproperties in
Other Cities
4.5%
3.3%

Portfolio average
4.0%0

Rokubancho Bldg.

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

OfficeOfficeproperties in properties inCentralGreater Tokyo
Tokyo

Greater Tokyo and Other Cities

JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
The Otemachi Tower(land with leasehold Interest)

Science Plaza-Yonbancho Plaza
Shibadaimon Center Building
Tokyo Square Garden
JPR Shibuya Tower Records Bldg.
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
GINZA GATESFUNDS Suidobashi
Average of Central Tokyo

5

10

3.6
5.4
6.7
5.3
4.5
5.6
6.9
4.4
8.0
4.0
5.0
7.8
3.1
3.2
5.0
6.4
4.4
5.3
5.8
2.9
4.0
3.5
5.8
6.1
3.5
4.9
3.0
3.7
3.2
3.1
4.4
4.1

15

（%）

-5

0

5

10

15

5.8
6.5
6.7

Arca East Bldg.
JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.

8.9
7.5
8.8
6.7
6.5
5.7
5.6
6.7
7.3

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

13.8

Tanashi ASTA

8.6

Cupo-la Main Bldg.

4.5

JPR Musashikosugi Bldg.

5.9
5.2
6.7

Musashiurawa Shopping Square
Kawasaki Dice Bldg.
Average of Greater Tokyo

9.1

Niigata Ekinan Center Bldg.

2.5

Tokyo Tatemono Honmachi Bldg.

7.0

JPR Hakata Bldg.

10.1
10.4
10.3

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

6.4

Tenjin 121 Bldg.

4.5
4.4

JPR Dojima Bldg.
JPR Nagoya Fushimi Bldg.

6.1

Yakuin Business Garden
Benetton Shinsaibashi Bldg.
JPR Umeda Loft Bldg.
Housing Design Center Kobe
JPR Chayamachi Bldg.
Average of Other Cities

-2.5
5.0
6.4
4.3
5.1

36

4. Appendix

Diversification of Lenders and Lender Formation (as of December 31, 2017)

Diversifying fund procurement sources with a lender formation comprising
29 financial institutions and through issuance of investment corporation bonds
Interest-bearing debt balance: 181,228 million yen

Sompo Japan Nipponkoa Insurance Inc.

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

National Mutual Insurance Federation ofAgricultural Cooperatives

2,000

Sumitomo Life Insurance Company

2,000
3,000
3,000
3,000
3,000
3,000
4,000
4,208

Yamaguchi Bank, Ltd. 【new borrower】
Hiroshima Bank, Ltd. 【new borrower】
Daishi Bank, Ltd 【new borrower】
Sumitomo Mitsui Trust Bank, Ltd
Tokyo Marine & Nichido Fire Insurance
Daido Life Insurance Company
The Iyo Bank, Ltd
Resona Bank, Ltd
The Hachijuni Bank, Ltd

The Norinchukin BankThe Chugoku Bank, Ltd
Taiyo Life Insurance Company
The Shinkumi Federation BankORIX Bank Corporation
The Nishi-Nippon City Bank, Ltd.
Meiji Yasuda Life Insurance Company（million yen）

(Breakdown of investment corporation bonds)
Investment corporation
bonds
29,500Seventh series of bonds

Mizuho Bank, Ltd
27,000Fourteenth series of bonds
Sixteenth series of bonds
Seventeenth series of bonds
Eighteenth series of bonds

The Bank of TokyoMitsubishi UFJ, Ltd.
18,000Sumitomo Mitsui Banking
Corporation
12,500Development Bank of Japan,
Inc.
11,120

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

Shinsei Bank, Ltd. 10,000
Mitsubishi UFJ Trust andBanking, Corp. 8,000
Aozora Bank, Ltd. 7,900

Nineteenth series of bonds
Twentieth series of bonds
Twenty-first series of bonds
Twenty-second series of bonds

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

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

Credit Limit

4,000
4,000
4,000
4,000
4,000
4,000
24,00037

4. Appendix

Appraisal Value (as of December 31, 2017)■ An Increase in Unrealized Gains■ Factors of Change in Appraisal Value• Unrealized gains expanded to 63.4 billion yen due to an increase inappraisal value• Appraisal value increased for 43 properties with direct cap rate falling for
35 properties (out of 62 properties in total)(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

Appraisal value

Unrealized gains

Ratio of unrealized gains

476.0 billion yen

63.4 billion yen

15.4%(up 11.5 billion yen from 31st
period (Jun. ‘17))(up 12.8 billion yen from 31st
period (Jun. ‘17))(up 3.1%pt from 31st period(Jun. ‘17))

Ofice properties in Central Tokyo

5.0
4.8
4.4

Unrealized gains and losses（left axis）
700

Entire portfolio

4.6(Changes in unrealized gains and losses)（100 million yen）

（％）

5.2

4.2

Ratio of unrealized gains and losses（right axis）（％）

63.4 billion yen

35

4.0

3.8
3.6
0.0

600

30

500

25

1. The changes in direct cap rate indicate the figures for the 48 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.

20(Breakdown of unrealized gains and losses)

300

15

• Number of properties with unrealized losses decreased by 1 from 14 properties asof the end of the 31st period (Jun. ‘17)

200

10

Dec '09 Dec. '10 Dec. '11 Dec. '12 Dec. '13 Dec.'14 Dec. '15 Dec. '16 Dec. '17

400

15.4%

（billion yen）

+90

100

5

0

0

-100

-5

-200

-10

+0

-15
Dec. '17 （end of period）

-30

-300

Dec. '03 Dec. '05 Dec. '07 Dec. '09 Dec. '11 Dec. '13

Dec '15+60+30

Unrealized gains

Total 62
properties

63.4 billion yen（period）

Unrealized losses

49 properties

79.6 billion yen
13 properties-16.2 billion yen

Entire portfolio

Breakdown of unrealized gains andlosses38

4. Appendix

Appraisal Value by Property (as of December 31, 2017)

Appraisalvalue（mn yen）

Change（mn yen）

Direct cap(NCF Cap)(%)

Change（% pt）

DCF
discountrate(%)

Change(% pt)

DCF
terminal
cap(%)

Change（% pt）

Kanematsu Bldg.

13,800

+100

3.5

-0.1

3.3

-0.1

3.7

-0.1

14,642-842

Kanematsu Bldg. Annex

2,520

-110

3.9

-0.1

3.7

-0.1

4.1

-0.1

2,437

+82

JPR Ningyo-cho Bldg.

2,710

-

4.2

0.0

4.0

0.0

4.4

0.0

1,959

Shin-Kojimachi Bldg.

3,310

-

4.0

0.0

3.7

0.0

4.2

0.0

2,454

JPR Crest Takebashi Bldg.

3,330

+40

3.8

-0.1

3.6

-0.1

4.0

-0.1

MS Shibaura Bldg.

11,700

-

4.4

0.1

4.1

0.1

4.6

0.1

Gotanda First Bldg.

2,780

+150

4.0

0.0

3.7

0.0

4.2

0.0

JPR Ichigaya Bldg.

5,210

+130

3.7

-0.1

3.5

-0.1

3.9

-0.1

Oval Court Ohsaki Mark West

4,940

+100

3.9

-0.1

3.7

-0.1

4.1

-0.1

2,844 +2,095

Shinjuku Square Tower

14,400

-

3.9

0.0

3.7

0.0

4.1

0.0

13,379 +1,020

BYGS Shinjuku Bldg.

19,000 +1,200

15,447 +3,552

Property nameAppraisalvalue（mn yen）

Change（mn yen）

Direct cap(NCF Cap)(%)

Change（% pt）

DCF
discountrate(%)

Change(% pt)

DCF
terminalcap(%)

Arca East

6,250

+10

JPR Chiba Bldg.

1,680

+20

4.2

0.0

5.3

-0.1

3.9

0.0

5.1

-0.1

+750

JPR Yokohama Nihon Odori Bldg.

2,340

+50

4.9

-0.1

4.7

+855

Shinyokohama 2nd Center Bldg.

1,750

-100

4.9

-0.1

3,265

+64

11,005+694

Kawaguchi Center Bldg.

8,980

JPR Ueno East Bldg.

4,500

+730

5.1

-230

4.2

2,958

-178

Tachikawa Business Center Bldg.

3,810

+300

5,205

+4

Rise Arena Bldg.

8,500

Yume-ooka Office Tower
Olinas Tower

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

Property name

Change（% pt）

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

4.4

0.0

4,294 +1,955

5.5

-0.1

2,232

-0.1

5.1

-0.1

2,464

-124

4.7

-0.1

5.1

-0.1

1,425

+324

-0.1

4.8

-0.1

5.3

-0.1

6,941 +2,038

0.0

3.9

-0.1

4.3

-0.1

2,947 +1,552

4.5

-0.1

4.2

-0.1

4.7

-0.1

2,871

+880

4.1

-0.1

3.8

-0.1

4.2

-0.1

5,285 +3,214

6,510

+260

4.5

-0.1

4.2

-0.1

4.7

-0.1

5,447 +1,062

36,800

+100

4.0

0.0

3.7

0.0

4.2

0.0

27,560 +9,239

-552

+938

3.7

-0.1

3.5

-0.1

3.9

-0.1

Tokyo Tatemono Yokohama Bldg.

8,260

+60

4.5

0.0

4.2

-0.1

4.6

-0.1

6,850 +1,409

890

+15

4.6

-0.1

4.4

-0.1

4.8

-0.1

600

+289

Omiya Prime East

8,380

+430

4.6

-0.1

4.4

-0.1

4.8

-0.1

5,837 +2,542

Shinjuku Center Bldg.

15,800

+800

3.5

-0.1

3.2

-0.1

3.7

-0.1

22,179-6,379Tanashi ASTA

12,500

-

5.2

0.0

5.1

0.0

5.4

0.0

7,306 +5,193

Minami Azabu Bldg.

2,840

-

4.2

0.0

4.0

0.0

4.4

0.0

3,838

-998

Cupo-la Main Bldg.

2,800

+50

5.2

-0.1

5.0

-0.1

5.4

-0.1

1,713 +1,086

Shinagawa Canal Bldg.

1,870

-

4.2

0.0

3.9

0.0

4.4

0.0

1,728

+141

JPR Musashikosugi Bldg.

5,740

+70

4.8

0.0

4.6

0.0

5.0

0.0

7,027

-1,287

Rokubancho Bldg.

3,410

+10

5.2

0.0

4.1

0.0

4.5

0.0

2,836

+573

Musashiurawa Shopping Square

4,290

-

5.0

0.0

4.9

0.0

5.2

0.0

3,698

+591

JPR Harajuku Bldg.

9,140

+240

3.9

0.0

3.7

0.0

4.1

0.0

8,698

+441

Kawasaki Dice Bldg.

16,500

+300

4.2

0.0

4.1

0.0

4.4

0.0

13,436 +3,063

Tokyo Tatemono Kyobashi Bldg.

5,720

-

4.2

0.0

3.7

0.0

4.3

0.0

5,311

+408

Niigata Ekinan Center Bldg.

2,230

+20

5.8

-0.1

5.8

-0.1

6.0

-0.1

1,628

JPR Nihonbashi-horidome Bldg.

6,720

-

4.3

0.0

4.1

0.0

4.5

0.0

4,753 +1,966

Tokyo Tatemono Honmachi Bldg.

3,470

+90

4.8

-0.1

4.5

-0.1

5.0

-0.1

4,036

-566

JPR Sendagaya Bldg.

11,800

-

3.9

0.0

3.7

0.0

4.1

0.0

14,891-3,091

JPR Hakata Bldg.

3,400

+220

4.5

-0.1

4.4

-0.1

4.7

-0.1

2,935

+464

4,060

+344

+394

Across Shinkawa Bldg. Annex

+601

+40

3.3

0.0

3.1

0.0

3.5

0.0

3,715

JPR Naha Bldg.

1,720

+140

5.4

-0.1

5.4

-0.1

5.6

-0.1

1,325

47,700 +1,700

2.8

-0.1

2.7

-0.1

2.9

-0.1

38,388 +9,311

Sompo Japan Sendai Bldg.

3,950

+200

5.2

-0.1

5.0

-0.1

5.5

-0.1

2,442 +1,507

Science Plaza - Yonbancho Plaza

3,290

-

4.2

0.0

3.8

0.0

4.4

0.0

2,694

Sompo Japan Wakayama Bldg.

1,590

-120

6.6

-0.1

6.4

-0.1

6.9

-0.1

1,324

+265

Shibadaimon Center Bldg.

6,390

+540

3.9

0.0

3.6

0.0

4.1

0.0

4,184 +2,205

Tenjin 121 Bldg.

2,930

+200

4.6

-0.1

4.2

-0.1

4.8

-0.1

2,079

+850

Tokyo Square Garden

20,400

+300

2.7

-0.1

2.5

-0.1

2.9

-0.1

18,658 +1,741

JPR Dojima Bldg.

3,000

+70

4.5

-0.1

4.3

-0.1

4.6

-0.1

2,171

+828

JPR Shibuya Tower Records Bldg.

14,400

+300

3.5

-0.1

3.3

-0.1

3.7

-0.1

11,508 +2,891

JPR Nagoya Fushimi Bldg.

2,890

+80

5.3

-0.1

4.8

-0.1

5.2

-0.1

3,876

-986

JPR Jingumae 432

4,100

+50

3.1

-0.1

3.2

-0.1

3.3

-0.1

4,286

-186

Yakuin Business Garden

16,200 +1,400

4.4

0.0

4.1

-0.1

4.5

-0.1

10,494 +5,705

Ginza Sanwa Bldg.
The Otemachi Tower (Land with Leasehold Interest)+595

Shinjuku Sanchome East Bldg.

2,820

+70

3.6

-0.1

3.1

-0.1

3.8

-0.1

2,618

+201

Benetton Shinsaibashi Bldg.

4,240

-70

4.1

0.1

3.6

-0.1

4.0

-0.1

5,093

Yurakucho Ekimae Bldg. (Yurakucho Itocia)

3,140

+80

3.2

-0.1

2.8

-0.1

3.4

-0.1

3,315

-175

JPR Umeda Loft Bldg.

13,900

-

4.2

0.0

3.9

0.0

4.4

0.0

12,423 +1,476-853

Ginza Gates

10,800

-

3.1

0.0

2.8

0.0

3.1

0.0

10,144+655

Housing Design Center Kobe

7,260

+140

5.6

-0.1

5.4

-0.1

5.7

-0.1

6,175 +1,084

FUNDES Suidoubashi

3,570

+100

3.7

-0.1

3.5

-0.1

3.9

-0.1

3,243

+326

JPR Chayamachi Bldg.

7,120

+350

3.6

-0.1

3.3

-0.1

3.7

-0.1

6,039 +1,080

Total

476,050 +11,505

412,586 +63,463

Central Tokyo

262,560 +5,855

243,195 +19,364

Greater Tokyo

139,590 +2,930

107,343 +32,246

Other Cities

73,900 +2,720

62,046 +11,853

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.
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.

39

4. Appendix

Asset Manager■ Summary of Asset Manager■ Sponsors（as of December 31, 2017）（as of December 31, 2017）

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

37

Meiji Yasuda Life Insurance

10%2■ 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.

40

Impact of Mass Supply

4. Appendix

The number of JPR’s competing properties in Chiyoda and Minato Wards, on which mass
supply will be focused, is limited■ Ratio of JPR Properties by Size and by Area
Supply of very large office space（Tokyo CBDs: 2018-2021）

Size
Very
large

Tokyo’s five central
wards
48,601㎡

Approx.
1.02 million ㎡

Approx.
0.30million ㎡

Approx.
0.97 million ㎡

Approx.
0.32 million ㎡

Approx.
0.15 million ㎡

Chiyoda Ward

Chuo Ward

Minato Ward

Shibuya Ward

Shinjuku Ward

5,985㎡

4

1.9%

15.6%
31,947㎡

1

4

3,325㎡

1

7,994㎡

14,468㎡

1

28,148㎡

4.7%
15,401㎡

Shinagawa Ward2

Greater Tokyo
49,033㎡

9.0%
115,227㎡

Other City

Total

4

97,634㎡

15.8%
18,329㎡

2

20,173㎡

8

31.4%
2

43,333㎡

5103,782㎡

13

Large
10.3%
Middlesize

46,451㎡

1.1%
14

14.9%
126,999㎡

13,308㎡

2.6%
4

4.3%
22

16,633㎡

17,096㎡

1.7%
6

5.5%
5

31,075㎡

5,106㎡

4.9%
2

1.6%
8

24,975㎡

10,941㎡

2.7%

6.5%

2

36,742㎡

3.5%
4

10,941㎡

13.9%
6

11.8%
2

43,375㎡

3

8,329㎡

2

105,948㎡

26,410㎡

33.4%
6

8.5%
12

69,851㎡

109,711㎡

26

35.3%
11

311,127㎡

47

Total
40.8%

5.3%

10.0%

8.0%

3.5%

13.9%

2.7%

1. Buildings are classified as “medium-sized,” “large” and “very large” in accordance with the total floor space of “3,000m 2 to less than 10,000m2,” “10,000m2 to less than 30,000m2“ and “30,000m2 or more,” respectively.
2. Figures for area and ratio in the table are based on leasable floor area.
3. Land with leasehold interest, such as The Otemachi Tower, is excluded from the calculation.
4. New supply in 2018 and thereafter by floor space is estimated based on the surveys conducted by TRIM.

34.1%

22.5%

100.0%

41

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 )Anount of increase in new supply area
Amount of increase in leasable floor area
Net increase in leasable floor area is lower by more than half of theincrease in new supply area
Up 2.11 mn. tsubo• Net increase in leasable floor area (in stock) over the new supply area is small.

（10 thousand tsubo）• New demand has remained strong, surpassing the increase in leasable floor area by
volume+400• 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.

+200

Net increase in leasable
floor area+0

（thousand tsubo）

300

New supply

Vacancy rate

New demand

Up 0.92 mn. tsubo'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 （year）

（%）

15

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

Comparison of increases in leasable floor area and occupied area
Net increase in leasable floor
Increase in occupied area
Net increase in occupied area is larger than the increase in leasable
floor area.
Up 1.08 mn. tsubo（10 thousand tsubo）

+200
+150

200

10

8.67

+100

Up 0.92 mn. tsubo

+50

7.34

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

5.47
100

4.03

5

3.61
3.12

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

120

0

2012

2013

2014

2015

2016

2017

Employed population

130

2018

2019

2020

2021

0
2022 （year）（forecast） （forecast） （forecast） （forecast） （forecast）
1. Actual results of the vacancy rate, leasable floor area and occupied area through December 2017 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 2018 and thereafter have been estimated based on surveys and simulations conducted by
TRIM.
2. As an assumption for the simulation, the new supply area uses an estimate obtained by applying a certain multiplying factor to the average of the past results. The lost area isbased on the average of the past results as assumption.
3. The employed population was prepared by TRIM based on the Labor Force Survey, the Ministry of Internal Affairs and Communications.

Male

FemaleOccupied area

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

123 pt116 pt113 pt111 pt

110
100
'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16 (year)42

4. Appendix

For-Sale Office Property Market

Cap Rate of Tokyo Office Properties Continues to Drop
■ Cap Rates of Office Properties in Tokyo• Cap rate dropped in 2016 to 2017
Grade A office properties: 2.90%（year on year: minus 0.05% pt), grade B
office properties: 3.50% (year on year: minus 0.10 pt)• Cap rate fell below the peak in 2007 and continues to drop further.
Grade A office properties（%）

Grade B office properties■ Correlation between Price and Rent of Grade A Office Properties in Tokyo• Rent increased 17.9 points from the bottom in 2012 while price rose 69.1
points from 2010 by index

Rent index（pt・’02Q1=100）

6.0

Price index

300

5.5
250
5.0
200

4.5

Price index up 69.1pt

Last peak for grade B officeproperties

4.0

150

3.5

Last peak for grade A officeproperties

100

3.0

'17 Q4'17 Q1'16 Q2'15 Q3up 17.9pt'14 Q4'14 Q1'13 Q2'12 Q3'11 Q4'11 Q1'10 Q2'09 Q3'08 Q4'08 Q1'07 Q2'06 Q3'05 Q4'04 Q2'05 Q1'03 Q3'02 Q4500'02 Q1'17 Q3'17 Q1'16 Q3'16 Q1'15 Q3'15 Q1'14 Q3'14 Q1'13 Q3'13 Q1'12 Q3'12 Q1'11 Q3'11 Q1'10 Q3'10 Q1'09 Q3'09 Q1'08 Q3'08 Q1'07 Q3

2.50'07 Q1

Rent index

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

43

4. Appendix

Unitholders (as of December 31, 2017)■ Number of Units by Unitholder Type (923,000 units in total)■ Top Unitholders

Individuals
38,111
4%
Securities
companies
17,7052%Name

Foreigninvestors
231,521
25%

Financial
institutions
554,328
60%

Japan Trustee Services Bank, Ltd. (Trust Account)

228,332

24.7

2

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

94,61910.3

39,607

4.3

30,274

3.3

4
Other domestic
corporation
81,335
9%■ Number of Unitholders by Unitholder Type (12,196 unitholders in total)
Foreign investors
421
Other domestic
3%
corporations
210
2%

Securities
companies
24
0%

Financial金融機関
institutions
182
1%
Of which, investment
Trusts incorporating
JPR units
33
0%Share(%)

1

3

Of which, investment
Trusts incorporating
JPR units
287,80431%

Number of
Owned
Units

The Nomura Trust and Banking Co., Ltd. (Investment
Trust Account)
Trust & Custody Services Bank, Ltd. (Securities Investment
Trust Account)

5

Tokyo Tatemono Co., Ltd.

29,300

3.2

6State Street Bank West Client Treaty 505234

25,815

2.8

7Kawasaki Gakuen

25,0002.7

8

Meiji Yasuda Life Insurance Company

24,0002.6

9State Street Bank West Pension Fund Clients Exempt
50523318,7002.0

10

DFA International Real Estate Securities Portfolio

11,306

1.2

526,953

57.1

Total

Individuals
11,35993%

44

4. Appendix

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

Dividend Yield(%)

500,000

4.5

450,000

4.0

400,000

3.5

350,000

3.0

0300,000
Jan '16

2.5
0
Apr '16

Jul '16

Oct '16

Jan '17

Apr '17

Jul '17

Oct '17

Jan '18

1. Prepared by TRIM based on Bloomberg data.

45

4. Appendix

Portfolio Map■Central Tokyo

Shinjuku

Ichigaya

A-5

A-4

A-14

SaitamaPrefecture

A-9

A-12
A-24

B-6

Chiyoda Ward

B-1

Tokyo

A-1

A-26

A-21

A-2
A-13

Shibuya Ward

A-5

Harajuku

A-22

B-7

Olinas Tower
Tokyo Tatemono Yokohama Building

B-13

Omiya Prime East

B-1

Tanashi ASTA

B-3

Cupo-la Main Bldg.

B-4

JPR Musashikosugi Bldg.

Yokohama

B-5

Musashiurawa Shopping Square

B-3

B-6

Kawasaki Dice Bldg.

C-12

Sompo Japan Sendai Bldg.

C-1

Niigata Ekinan Center Bldg.

C-19

J PR Nagoya Fushimi Bldg.

C-9

JPR Naha Bldg.

Kawasaki

B-6

B-5

A-15

Shin-Yokohama
B-12

Tamachi
B-10

Tachikawa Business Center Bldg.

B-12

B-4

Kanagawa
Prefecture

Hamamatsucho

JPR Ueno East Bldg.

B-8

Chiba

Musashikosugi

A-25

Kawaguchi Center Bldg.

B-7

B-11

Shibuya
Shinagawa

Chuo Ward

Shibuya

Shinyokohama 2nd Center Bldg.

B-6

Rise Arena Bldg.

Tokyo

Minato WardJPR Yokohama Nihon Odori Bldg.

B-5

Yume-ooka Office Tower

Kinshicho

B-2
A-18

JPR Chiba Bldg.

B-3

B-10

Tokyo

A-3

A-1

Arca East

B-2

B-9

B-1

A-6

Shinbashi

B-1

B-11

Ikebukuro
Shinjuku

Tachikawa

A-19

B-9

Tanashi

B-8

Chiba
Prefecture

B-3

Kawaguchi

A-23
A-3

A-17

B-5

Musashiurawa

A-20

A-4

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

B-13

Omiya

A-7

Shinjuku Ward
A-11

■Greater Tokyo

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

KamiokaA-6■Other Cities
GotandaShinagawa

A-7
A-16
A-10

OhsakiShinagawa Ward

C-4

Tokyo Tatemono Honmachi Bldg.

C-17

JPR Dojima Bldg.

C-21

Benetton Shinsaibashi Bldg.

C-1

JPR Umeda Loft Bldg.

C-5

JPR Chayamachi Bldg.
SendaiA-1

Kanematsu Bldg.

A-13

Across Shinkawa Bldg. Annex

A-24

Science Plaza - Yonbancho Plaza

A-2

Kanematsu Bldg. Annex

A-14

Shinjuku Center Building

A-25

Shibadaimon Center Bldg.

A-3

JPR Ningyo-cho Bldg.

A-15

Minami Azabu Bldg.

A-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

GINZA GATES

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.

46

Portfolio List （Central Tokyo）

4. Appendix

A－1 Kanematsu Bldg.

A－2 Kanematsu Bldg. Annex

A－3 JPR Ningyo-cho Bldg.

A－4 Shin-Kojimachi Bldg.

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

③ Feb. 1993

③ Dec. 1989

③ Oct. 1984

④ 14,995m2④ 4,351m2④ 4,117m2④ 5,152m2

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. The property overview indicates (1) location, (2) structure/floors, (3) completion, and (4) total floor space (entire building). The same applies hereafter.

47

Portfolio List （Central Tokyo）

4. Appendix

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 GINZA GATES

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

48

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

49

Portfolio List （Other Cities）

4. Appendix

C－1 Niigata Ekinan Center Bldg.

C－4 Tokyo Tatemono Honmachi Bldg.

① Niigata, Niigata

C－7 JPR Hakata Bldg.

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

③ Feb. 1970

③ Jun. 1985

④ 19,950m2④ 14,619m2④ 9,828m2

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 Benetton 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

50

4. Appendix

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

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

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

Digest of Financial Results• [Digest of Financial Results]
Provides movie that summarizes the latest analyst
meeting in a compact manner• [IR Mail Delivery Service]
Distribution of News Release51

5. Glossary

Term
Acquisition price

Meaning

Term

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.)

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

Sum total of interest expenses on borrowings and investment corporation bonds,
borrowing expenses (excluding expenses for early repayment of borrowings and forcommitment line agreements), amortization of investment corporation bondissuance costs and issuance management expenses, divided by the number ofbusiness days for the relevant fiscal period and annualized by multiplying by 365 days
/ sum total of borrowings and investment corporation bonds

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

NAV per unit

(Unitholders’ value + reserve for reduction entry, etc. + unrealized gains or losses) /number of units outstanding

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

Cap rate

Capitalization rate by the direct capitalization method
Direct capitalization method is one of the methods to calculate the value 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

Total (acquisition price)

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

Investment ratio

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

Occupancy rate /occupancy rate basedon 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
be described as “average occupancy rate” in order to distinguish it from “periodend occupancy rate.”

Occupancy rate basedon generated rents(Total leased space – total leased space during rent-free and rent-holiday periods)/ total leasable space

Average unit rent

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

Average downtime

The average period of vacancy between the move-in dates stipulated in the new lease
contracts becoming effective in each fiscal period and the move-out days of the previous
tenants for the same leased spaces.

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

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(or acquisition price, depending on the case)

Meaning52