http://www.top-reit.co.jp
1-13-1 Nihonbashi, Chuo Ward, Tokyo

Business Report for the 8th Fiscal Period(November 1, 2009 ~ April 30, 2010 )LEAPING TO THE NEXT STAGE

An Open LineTOP REIT’s Declaration

A LETTER FROM THE EXECUTIVE OFFICER OF THE INVESTMENT CORPORATIONTOP REIT is committed to providing our investors with stable results and steady portfolio growth in the medium to long-term
through the management of a diversified portfolio and optimal utilization of our sponsors.

Dear Investor,

BASIC POLICY

Sumitomo
Trust & Banking

property due to its location, facilities,

increase of 6.6%). TOP REIT also raised

tenants and other qualities. We areits dividend per unit to 13,484 yen, aeconomy continuously showed

confident that this excellent acquisition

period-on-period increase of 6.6%.

uncertainty despite signs of recovery

will greatly contribute to the earnings

from the recession and stability.

of TOP REIT. The existing portfolio has

Under such circumstances, TOP REIT

Optimal Utilization of Sponsors

SPONSORS

In the Eighth Fiscal Period (November
1, 2009 – April 30, 2010) the Japaneseacquired the Sumitomo Corporation

also performed solidly thanks to theprudent asset management of TOP REIT

TOP REIT perceives the future to be acontinually demanding period during
which overseas conditions and thepolitical situation in Japan continue toAsset Management.

be uncertain despite the emerging signs

Credibility

Nishiki-cho Building in January 2010

Property pipeline/warehousing function

as the first step in its leap to the next

Consequently, despite the continuedof an economic recovery in Japan.

Personnel support

stage. The Sumitomo Corporationdifficult real estate market, TOP REIT

TOP REIT will continue to utilize the

Nishiki-cho Building is a superior

has achieved increases in revenue andstrengths of our superior sponsors inincome as follows, operating revenues

this difficult environment, and focus onof 5,814 million yen (period-on-period

prudent management of our present

increase of 3.7%), ordinary income of

portfolio and the acquisition of new

2,091 million yen (period-on-periodsuperior properties. We thank you andincrease of 6.7%) and net income ofask for your continued support and

2,090 million yen (period-on-period

understanding.

Nippon Steel City Produce(Nippon Steel Group)

Oji Real Estate(Oji Paper Group)

Hiroaki Amano
Executive Officer
TOP REIT, Inc.
Amano entered Sumitomo Trust and Banking Co., Ltd. in 1970. After serving as the General Manager of the Fukuoka Branch,
and Director and General Manager of Corporate Business Department I at the Head Office, he entered Wakachiku Co., Ltd.
in 2001 and served as Managing Director. He was appointed as Corporate Advisor to TOP REIT Asset Management Co., Ltd.
in July 2009 and he has been Executive Officer of TOP REIT, Inc. since August 2009.

EIGHTH FISCAL PERIOD

Performance Highlights
8th Fiscal Period
Performance

Category

9th Fiscal Period
Forecast(announced on JUNE 17, 2010)

10th Fiscal Period
Forecast(announced on JUNE 17, 2010)

Period of asset management		

181 days		

184 days		

181 days

operating revenue¥

5,814 million¥

6,037 million¥

5,967 million

Operating income¥

2,849 million¥

3,004 million¥

3,000 million

1 TOP REIT’S DECLARATION

12 PROPERTY HIGHLIGHTS

Ordinary income¥

2,091 million¥

2,171 million¥

2,171 million

1 EIGHTH FISCAL PERIOD PERFORMANCE HIGHLIGHTS

14 PORTFOLIO MANAGEMENT

Net income¥

2,090 million¥

2,170 million¥

2,170 million

Number of investment units

		 155,000 units

Dividend per unit¥

13,484

Portfolio size		

15 properties

2 An Open Line: A LETTER FROM THE EXECUTIVE OFFICER 16
OF THE INVESTMENT CORPORATION
17
3 An Open Line: A LETTER FROM THE PRESIDENT OF THE
19
ASSET MANAGEMENT COMPANY
21
9 FINANCIAL STANDING AND STRATEGY
2211 NEW ACQUISITION

Note: The forecasts should not be construed as a guarantee of the actual dividends.

1 Business Report for Eighth Fiscal Period

		 155,000 units¥

		 155,000 units

14,000¥14,000		 15 properties		

15 properties[ CONTENTS ]PORTFOLIO LISTPORTFOLIOTOP REIT ASSET MANAGEMENTASSET MANAGEMENT OVERVIEWUNIT PRICE PERFORMANCE AND VOLUME TABLE/
IR SCHEDULE/UNITHOLDERS

Business Report for Eighth Fiscal Period 2

An Open LineA LETTER FROM THE PRESIDENT OF THE ASSET MANAGEMENTCOMPANYThe TOP REIT

LEAPING TO THE NEXT STAGE

Edge

Sponsor strengths

The following is an overview of TOP REIT, Inc.’s (TOP REIT) performance over its
Eighth Fiscal Period (November 1, 2009 – April 30, 2010) from the perspectiveof the asset manager. The overview is presented by Nobuhito Endo, President
and Representative Director of TOP REIT Asset Management Co., Ltd.

●P
 roperty sourcing…Sponsors provide information on properties by utilizing their pipeline

Nobuhito Endo
President and Representative Director
TOP REIT Asset Management Co., Ltd.
Endo entered Sumitomo Trust and Banking Co.,
Ltd. in April 1978. He was promoted to General
Manager of the Real Estate Management
Department in April 2004 and served as theGeneral Manager of the Real Estate Information
Development Department from April 2006. He wasappointed President and Representative Directorof TOP REIT Asset Management in July 2007 andExecutive Officer of TOP REIT in October 2007. He
resigned as Executive Officer in July 2009 to focus
on his asset management duties.

TOP REIT began managing assets

measures passed and implemented by

the Eighth Fiscal Period thanks to ourupon its listing on the Tokyo Stockthe Japanese government, a recovery

core strengths of a strong portfolio, andExchange on March 1, 2006 and has

in Asian exports and progress instrong fund-raising ability and strong

now successfully entered its fifth year

corporate cost reductions. Theresponsors.

as a J-REIT. I would like to express myare also signs of a gradual shift to asincere gratitude to investors for yourrecovery in personal consumption andcontinued support.
Over the past few years the global
economy has suffered from difficulties.
The financial crisis, triggered by
the subprime loan issue, eventuallyplummeted to a global recession

employment. Thus comprehensively
the economy is showing signs of steadyprogress towards recovery. However,and unemployment remaining high.

The occupancy level surpassed 99%

2008. Fortunately, concerted active

difficult in the office rental market witheconomic measures among globallyvacancies rising due to demands byleading countries have resulted in thetenants to reduce or combine officeglobal economy calming down andspaces as a means to reduce costs andbeginning to gradually recover fromdemands to cut actual rents.

earnings due to the effects of economic

3 Business Report for Eighth Fiscal Period

Estate Market

a high occupancy level since listing.

market. Conditions continue to bealso seeing a recovery in corporate

Growth in a Difficult Realthe economy still unable to fully recover

event following the Lehman Shock inlast year. The Japanese economy is

1. Eighth Fiscal Period: Steady

TOP REIT has continued to maintain

The same also applies to the real estate

Sumitomo Trust and Banking

Nippon Steel City Produce

Oji Real Estate(a wholly-owned subsidiary of Nippon Steel)(a wholly-owned subsidiary of Oji Paper)

Growthin asset size

Superior portfolio
Primarily large-scale office buildings in central Tokyo (3 central wards: 74.7%, S&A class: 67.0%)
M ajor office tenants (59.4%) are well-rated firms that use buildings as headquarters or major
operational basesH igh occupancy rates and stable revenues due to long-term rent agreements (61.6%) of which
fixed-term rents account for 38.4%
Area and
Property Grade

Major Office TenantsLong-Term Agreements

Central 3 wards of Tokyo

Major office building
tenants (top 5 firms)

74.7%

59.4%
NEC

the environment remains severe withreferred to as a “once in a century”

functions and brokerage networks, as well as supplying properties they develop or own● Fund-raising…Fund-raising ability endorsed by the sponsors’ credibility

24.6%

Under
3 years

38.4% Agreements
over 3 years
61.6%

Sumitomo Metal
Industries
Obayashi
Corp

9.9%

S&A classproperties

67.0%(over 3 years)

9.7%

7.5%

*Based on acquisition price

7.7%*Based on monthly rent (overall)*Based on monthly rent (overall)in the Eighth Fiscal Period, as it did in
the Seventh Fiscal Period. This result
is the product of an excellent portfolioand strong tenant relations. We
have also been able to achieve steady
performance through the acquisition ofa new superior property that enhances
our portfolio by utilizing the pipeline

Despite such conditions, TOP REIT has

and brokerage function of our powerfulmanaged to produce stable results insponsors, and by utilizing our fund-

Period-end
occupancy has
been maintained atover 99%
since listing

Dividends(forecast*) (forecast*)

15,00012,00012,863

13,206

12,654

13,48414,00014,000

9,000
3,000
0

Stablepayment of
Dividends

6,000

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP*The forecasts should not be construed as a guarantee of the actual dividends

Business Report for E Fiscal Period 4

An Open LineA LET TER FROM THE PRESIDENT OF THE ASSET MANAGEMENT COMPANY

raising ability backed by the robust

Corporation for 12.7 billion yen.

area neighboring the central business

Third, the building is expected toStable Dividend:buildings are principally leased as their

credit of our sponsors in the market.

TOP REIT had been considering the

district of Otemachi and Marunouchi.

produce a steady occupancy level as

Proof of Portfolio Superiority

head offices or major operational bases.

As a result, we were able to increase

property since information on it was

It is a mere three-minute walk from theit is leased in whole by a subsidiary offirst obtained in fall 2008, but there

Takebashi Subway Station and only aa blue-chip listed firm, with excellent

TOP REIT has continued to steadily

The five major tenants of the TOP REIT

revenue, income and dividends perunit in the Eighth Fiscal Period, posting

had been a rapid collapse in the realcredibility in the market.

deliver a dividend despite the recent

office buildings produce 59.4% of

five-minute walk from the Jimbocho

operating revenue of 5,814 million yen,estate market at that time due to thesevere economic climate. This dividend

monthly rents. In addition, 61.6% ofordinary income of 2,091 million yen

Lehman Shock suddenly worsening

Station. Thus it enjoys excellent

Finally, the assumed NOI yield of thisis supported by the high occupancy ofthe portfolio is comprised of long-term

and, as a result, dividend per unit of

the economy. Later, the market fortransportation access.

property is 6.2%, which surpasses themore than 99% that we have continued

rent agreements of at least three years

some superior office buildings in central

Second, although a number of years

overall NOI yield of the portfolio in theto maintain since listing. The origin

Tokyo began to show signs of real-

Seventh Fiscal Period of 5.3%. Thus thein length and 38.4% of these are fixedhave passed since its construction, theof this robust occupancy level is thebuilding can be considered superior

property will contribute to raising TOP

rents. These factors help the portfolio

superiority of the portfolio. The TOP

New Property Acquisition and Fundestate prices bottoming out. TOP REIT
Asset Management interpreted thisas it had large-scale renovations

REIT’s profitability.

REIT portfolio is focused on large officeRaising as Products of TOP REIT’s

as an excellent opportunity to acquire

conducted in November 2001, installing

Furthermore, despite the severebuildings in the central three wards

Strengths

superior properties. It chose to do soequipment comparable to those of theenvironment for raising funds, TOP REIT

of Tokyo, which comprise 74.7% of

On January 13 of this year, TOP REIT

for several reasons that are outlined

latest office buildings. Furthermore,

was able to raise funds to acquire thisthe overall portfolio. Additionally,acquired the Sumitomo Corporation

below.

anti-seismic reinforcement construction

property. Our robust bank formation

Class S and Class A office buildings

Nishiki-cho Building, an office building

First, the property is situated in a

was conducted in October 2009 inthat is a reflection of the strong market

comprise 67.0% of the portfolio. Theof 14,000 yen for the Ninth Fiscal Period

at 3-chome Kanda Nishiki-cho,competitive location.

accordance with the Act on Seismic

credibility of our sponsors – a strength

major tenants of the portfolio are blue-(period ending in October 2010) andChiyoda Ward, Tokyo, from Sumitomo

is located in the Kanda office area, an

Retrofitting of Buildings.

of TOP REIT – enabled TOP REIT tochip companies like NEC, Sumitomo

Tenth Fiscal Period (period ending insmoothly raise 12.5 billion yen.

Metal and Obayashi Corporation. The

April 2011) have been forecast.

13,484 yen.

This building

History of Occupancy

produce high occupancy levels andstable earnings. Although TOP REIT
Asset Management believes that the realestate market conditions will continue
to suffer for a while, dividends per unit

Growth strategy for the next stage(No. of properties)(Gross rentable floor space: m2)(Occupancy: %)99.8
300,000
275,000

99.9

99.5

99.7

99.5

99.5

99.2

99.2

99.4

99.3

Occupancy (%)
Gross rentable floor space

283,622.23 283,622.23 283,622.23 283,622.23 283,622.23

99.2

99.2

99.1

99.2

99.4

225,000

20

80

229,231.70

a
rw

fo

✣H
 igh-quality
specifications

Next stage

Offices

Asset size: ¥210bn
No. of properties: around 18 – 20
LTV: 40 – 50%

75
70

178,104.46

65

150,000

IPO
Mar.
2006
(End of)Oct.
(1st FP)

Apr.
(2nd FP)2007

5 Business Report for Eighth Fiscal PeriodOct.
(3rd FP)

Apr.
(4th FP)
2008

Oct.
(5th FP)

Apr.
(6th FP)2009

Oct.
(7th FP)Nov.

8th FP

Dec.

Jan.

Feb.

Mar.

Apr.
(8th FP)

May

10

Acquisitions of additional ¥35bn
Appropriately control LTV

8th FP

Asset size: ¥175.047bn
No. of properties: 15
LTV: 50.6%¥150bn¥160bnOther
thanofficesTargeting asset size of ¥210bn,
reducing NEC Head Office Building’s
share of the portfolio to 20%60¥170bn¥180bn¥190bn¥200bn¥210bnPortfolio
share

Central Tokyo

Fu

15

Property acquisition
target✣E xcellent location in

e
rth

85

200,000

125,000

p

ea
rl

90

261,671.68 261,671.67

Futureinvestment
policy/stancerd95

291,647.88 291,647.88 291,647.88 291,647.88 291,647.88

276,833.20

250,000

175,000

Focus on information gathering for property
acquisitions to leap forward100

325,000✣P roperties with strong
Expandasset size
whilemaintaining
present
shares in theportfolio

competitiveness(ability to attract tenants,
long-life and stable
operations)

Approx.

75%✣T arget residential
properties
Located in Central Tokyo
or Tokyo metropolitan
Approx.
area, close to railway
25%
stations and withexcellent transit accessStable occupancy rates
and rent levels●●(Asset size)

Business Report for Eighth Fiscal Period 6

An Open LineA LET TER FROM THE PRESIDENT OF THE ASSET MANAGEMENT COMPANY

2. the targeted Next StageTOP REIT Asset Management
will fully apply the strengths of
TOP REIT to maintain stable dividends
and maximize investor value

then and now has fifteen properties

investment corporations and sponsors

that were acquired for a total of 175,047

filed bankruptcy during those abnormal

million yen.

times. Furthermore, the deterioration in

Asset Management named the period

The J-REIT market was launched in

the real estate market led to an increase

from May 2010, the Ninth Fiscal Period

September 2001 when two major realin vacancies, drop in rents and otheronwards, as the period when we will

estate companies and other sponsors

conditions that were and are severe”Leap to the Next Stage.” TOP REIT

listed two large J-REITs. This means thefor the asset management of J-REITs.

Asset Management’s focus during thismarket itself will enter its tenth year

Within these conditions, some J-REITs

The quantitative definition for the next
TOP REIT’s Strategy to Leap to the Next

ceiling at 60%, but we have striven toStagemaintain it at around 50%. The raising

for TOP REIT
What is this next stage? TOP REIT

The Growth Envisioned for the Next
Stage

period is expanding the portfolio andin September of this year. After themerged and others changed sponsors

stage that TOP REIT is striving for is astabilizing dividends.

market’s creation, backed by major real

leading to a reorganization of theportfolio of about 210 billion yen andestate companies, trading companies
Overview of the J-REIT Market

market. Presently there are 38 J-REITs.

and others, J-REITs listed one after

a stable dividend between 13,000 and
14,000 yen. TOP REIT has maintained

TOP REIT was the 31st J-REIT to be listed

stable dividends even in today’s difficult

42 J-REITs listed. Two years ago theand has just entered its fifth year. TOP

environment, and will have to expand

properties acquired for 104,386 million

market was impacted by the Lehman

REIT has focused on providing stable

its portfolio to keep this dividend level.

yen, and TOP REIT has steadily grown

Shock and the global financial crisis thedividends and expanding the portfolio

The reason that 210 billion yen has

TOP REIT listed with a portfolio of seven

the other. At one time there were

this portfolio in the approximately four

”Shock” triggered. This development

steadily supported by robust sponsors,

been set as the medium- to long-term

years since. TOP REIT added eight

led to a rapid contraction of credit

high quality assets and prudent asset

portfolio target is because we want tomanagement.

lower the portfolio share of the NEC

properties for about 70 billion yen since

and an economic recession, and some

Head Office Building to 20% or less.
Since establishing this target we have
expanded the portfolio steadily throughFuture strategy for the Next Stagethe acquisition of new properties.

 ully utilize the Top REIT Edge❙F
❙ Implement growth strategy with a clear focus on a

Growth Strategy
 hile securing a foothold for revenues, acquire❙W

competitive and highly profitable properties
 lexibly select fund raising means according to the market❙F

environment
Bank loans:
Flexibly utilize strong bank formation
Investment corporation bonds:
Consider in view of market environment, etc.

❙ Secure foothold for revenues through flawless management ofexisting properties
Continue to secure stable revenues by introducing long-term
agreements
Continue to strengthen tenant relations and maintain highoccupancy●●❙ External growth that perceives good acquisition opportunities
for superior properties
Utilize sponsor strengths
Focus on information gathering and examine superior
properties●●❙S elect fund raising means according to the market environment●

 apital increases through public offerings:❙C

Consider level of investment units and property returns,
as well as amount of net assets and dividend (per unit)

Presently the portfolio size is 175 billion
yen and the share of the NEC Head
Office Building has been reduced
from the 40% share upon listing toabout 24%. Thus TOP REIT needs toadditionally acquire about 35 billion yen
in assets to achieve this target.

the Next Stage

Asset Size

Dividend Level

Implement¥210.0bn

Maintain¥13,000 – ¥14,000

Increase Investor Value

Method of Raising New Funds for the
Leap to the Next StageTOP REIT’s financial policy sets the LTV

About 35 billion yen in new acquisitions
are needed to leap to the next stage.
The present TOP REIT portfolio is 75%
office and 25% non-office (retail,residential, etc.). Furthermore, about
75% of the properties are in Central
Tokyo and so the portfolio is mainlycomprised of office buildings in Central
Tokyo. Therefore, we would like tomaintain the present investment ratiowith future acquisitions. In otherwords, the investment target is Class Aof funds to leap to the next stage will
be done using a flexible approach tofund raising. We will first thoroughly
consider the market environment,
pricing and yield of the property to beacquired, and other factors, and thenflexibly select from among various
methods of financing. These include
utilizing cash on hand, borrowings frombanks, investment corporation bonds,
equity offerings and other potential
methods.

office or competitive office buildings

Finally, in managing the assets of TOP

with equal or better specifications in

REIT, TOP REIT Asset Management will

Central Tokyo. As for properties otherfully apply the strengths of TOP REIT tothan office buildings, we would likemaintain stable dividends and maximize

to primarily invest in Central Tokyo

investor value by securing revenues

residential properties. This requires TOP

from our existing portfolio through

REIT Asset Management to fully utilize

prudent management of our portfolio

the real estate brokerage functions

and external growth that recognizesof Sumitomo Trust and Banking, aconditions today to be a perfectsponsor, and the networks of Nippon

opportunity for acquiring properties.

Steel City Produce (Nippon SteelGroup) and Oji Real Estate (Oji Paper●

NEXT STAGE

Future Policy

dividend level of between ¥13,000 and ¥14,000

Leap to the Next Stage
Current Policy

Growth Methods

3. N ew Strategy for Reaching

Group). The asset manager will alsoutilize the information network it has
built as an asset manager and focus on
acquiring superior properties that havebeen “comprehensively considered and

TOP REIT Asset Management
is committed to reinforcing its
management structure to achieve
prudent management of TOP REIT’s
portfolio and growth. We ask for yourcontinued support.

selected after looking at their area, size,
yield and other factors.”

7 Business Report for Eighth Fiscal PeriodBusiness Report for Eighth Fiscal Period 8

Financial Standing and Strategy:
Achieving greater stability through longer borrowing periods and diversified sources

TOP REIT has been conducting prudent financial management within the severe economic environment based on a financial

Financial Policy

policy that focuses on stable financial management. In particular, the following financing was executed in the Eighth Fiscal

Stable Financial Management

Period in order to secure flexibility and to extend borrowing periods and spread out repayment dates.

1) 1 2 .5 bi l l ion ye n wa s r a i s e d a s c apit a l to a c qu i r e t he
Sumitomo Corporation Nishiki-cho Building that was
acquired in January 2010
✣ 9.8 billion yen will be repaid in November 2012 (borrowing
period: 2 years and 11 months), floating interest✣2
 .7 billion yen will be repaid in November 2016 (borrowing
period: 6 years and 11 months), fixed interest✣A new lender was added to the robust bank formation2) 2 2.2 billion yen in bor rowings that were matur ing in
February and March were refinanced✣ Maintain a stable bank formation and secure financial flexibility✣ Extend borrowing periods and spread out repayment dates✣ Manage interest fluctuation risks
As a result of the above, the total borrowings as of the end✣4
 .9 billion yen of short-term borrowings were refinanced
into long-term borrowings prior to the maturity date(November 2009)✣A s for the 8.37 billion yen in short-term borrowings, 6.7
billion yen was refinanced as short-term borrowings and1.67 billion yen was refinanced into long-term borrowings(period of 1 year and 9 months)✣B orrowings of 9.0 billion yen were refinanced as longterm borrowings (length of 2 years and 3 months)of the Eighth Fiscal Period were 94.24 billion yen, giving
TOP REIT an LTV of 50.6%. TOP REIT was also able tosuccessfully extend the borrowing period and spread out
repayment dates. This is evident in the fact that the averageremaining period for interest-bearing liabilities as of theend of the Eighth Fiscal Period was 1 year and 10 months
compared to 1 year and 8 months as of the end of the Seventh
Fiscal Period, and the fact that the long-term borrowing ratio
was 92.9% as of the end of the Eighth Fiscal Period versus

Long-term
750

500

47.4%

47.3%

47.3%

47.3%

103.0

93.0

132.8

132.8

684.6

684.6

LTV

37.1%
27.8%

37.3%

209.0

727.0

25.0
334.0

334.0

IPO

1st FP(End of)2nd FP030, 2010. This route of financing was taken by TOP REIT tofurther diversify borrowing methods and to extend the period

60

Diffusion of Repayment Dates and extension of maturities for borrowings

15

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

June 2010

0

20,00012.4 11.3 16.2 16.2

7.1 7.1

40

61.5

92.9 92.9
83.8 83.8

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP(End of)

9 Business Report for Eighth Fiscal Period

24.0

80.9
42.4

0

75.1

76.0

37.9

52.8

52.8

3

62.1

62.1

47.2

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP(End of)10th FP

11th FP

12th FP

8,500

6,300

13th FP

14th FP(years)
4

47.2

2
1

IPO

8,500
9th FP

No. 1 Unsecured
Investment
Corporation Bonds

New borrowing
in 8th FP

3,000

11,189AVERAGE Remaining Period of borrowings
37.9

100.0
64.1

6,700
8th FP

9,800

4,000
15th FP

16th FPNew borrowing
in 8th FP

8,500

1,823

17th FP

18th FP

19th FP

20th FP

21th FP

22th FP

Fixed

60
40

June
2010

24.9

57.6

20

IPO

19.1

35.9

80

20
0

Floating

9,000

1,273
16,700

5,000

(%)
100

6,578

9,000

Ratio of Loans with Fixed Interest Rates
Long-term

6,700

6,578

0

38.5
93.0

*Scheduled repayment of 67.5 million yen each period between the 9th FP and 21st FP(million yen)

15,000100.0 87.6 88.7

Service, Inc.).

25,000

Short-term

100.0

and Investment Information, Inc.) and A3 (Moody’s Investors

30

Maintain a target LTV of around 50% in
contrast to the official 60% ceiling

Ratio of Long-term Loans80

The rating of this investment corporation bond is AA- (Rating

874.7

Managing the Risk of Fluctuating Interest Rates

7.0f) Collateral and guarantee: No collateral or guarantee

issued under the following conditions.

10,000(%)100e) Interest rate: 1.0% per annumh) Interest payment dates: June 4 and December 4 (annually)of borrowings and spread out repayment dates. The bond was45d) 	Repayment amount: 100 yen per 100 yen of theinvestment corporation bondbond (8.5 billion yen) on June 4, 2010 with the objective of

727.0

544.0
334.0

50.5%
67.0

875.4

28.0%

250

50.6%
67.0

(%)
60

c)	Paid amount: 100 yen per 100 yen of the investment
corporation bond

Further, TOP REIT issued its first investment corporation
repaying the 8.5 billion yen in borrowings maturing on June(100 million yen)
1,000
Short-termb) Issued amount: 8.5 billion yeng)	Maturity: June 4, 2015; The Bonds may be repurchasedand cancelled at any time unless otherwise specified by
the book-entry transfer agent.

83.8% as of the end of the Seventh Fiscal Period.
history of debt structure and ltva)	Name: TOP REIT, Inc. No. 1 Investment Corporation Bonds(with special pari passu conditions among specified TOP
REIT Investment Corporation Bonds)

June
2010

0

3 yr
2 mo

3 yr
1 mo
2 yr

2 yr
7 mo

2 yr
1 mo

2 yr
2 mo

1 yr
8 mo

1 yr
10 mo

2 yr
2 mo

Bank Formation
Sumitomo Trustand Banking

Mizuho Corporate
Bank

Sumitomo-Mitsui
Banking Corporation

Bank of TokyoMitsubishi UFJ

Chuo-Mitsui Trustand Banking

Mitsubishi UFJ Trustand Banking

Development Bankof Japan

Dai-Ichi Mutual Life
Insurance

Resona Bank [NEW](End of) 1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP June
2010
Business Report for Eighth Fiscal Period 10

property HIGHLIGHTs

New Acquisition

SUMITOMO CORPORATION NISHIKI-CHO BUILDINGThe Sumitomo Corporation Nishiki-cho Building is very conveniently located only a 3-minute
walk from the Tokyo Metro Tozai Line Takebashi Subway Station and a mere 5-minute walkfrom Jimbocho Station on the Toei Shinjuku and Mita Subway Lines. Furthermore, it iswithin easy walking distance of Japan’s largest CBD, the Otemachi and Marunouchi
area. The building’s specifications have been upgraded with large-scalerenovations in 2001 and anti-seismic construction in 2009, placing it on parwith new office buildings in the area. In addition, like with other TOP REIT
properties, this property functions as the head office of its tenant. The
tenant is a subsidiary of a listed firm and enjoys high credibility inthe market. Despite being an office building in Central Tokyo,
the property boasts a high NOI yield and has contributed toboth cash flow and earnings since it was acquired.

Address

Jimbocho Stn.

302

Ogawamachi Stn.
Awajicho Stn.

	Ownership

Floor space

12,169.78m

Completion

2

401

Sumitomo Corporation
Nishiki-cho Building

March 1973

Acquisition date

January 13, 2010

Acquisition price

12,700 million yen

Portfolio share

8.0%

The Akasaka Oji Building is located on one of the most renowned streets of Tokyo,
Aoyama Dori (National Highway 246) and is blessed with high visibility. It neighbors theresidence of the Crown Prince and the Canadian Embassy and is blessed with a rich green
environment despite being located in a business district. Access to the building is also
very convenient as it is only a 3-minute walk from Aoyama 1-chome Station on the Tokyo
Metro Ginza and Hanzomon Subway Lines and the Toei Oedo Line.
The Akasaka Oji Building is a 9-floor office building with more than 10,000m2 of floor
space.

Address	3-11-1 Kanda Nishiki-cho,
Chiyoda Ward, Tokyo

Type of title

AKASAKA OJI BUILDING

Takebashi Stn.

Marubeni

403

301

Shuto Expr
esswayImperial Palace
Otemachi Stn.

8-1-22 Akasaka, Minato Ward, Tokyo

Type of title	Ownership

Floor space

10,063.05m

Completion

April 1999

Crown Prince’s
Residence

9,660 million yen

Portfolio share

7.5%

Diet
Building

Akasaka
Aoyama Oji Building

2

Acquisition priceAkasaka
Mitsuke Stn.

Ao

Icchome Stn.
ori
aD
yam

Canadian
Embassy

TBS

3

319

Nogizaka Stn.

AkasakaStn.

Roppongi
Midtown

U.S.
EmbassyArk Hills

Roppongi Stn.

11 Business Report for Eighth Fiscal PeriodBusiness Report for Eighth Fiscal Period 12

property HIGHLIGHTs

PORTFOLIO MANAGEMENT:Long-term leases a key part of success

ITO-YOKADO HIGASHI-NARASHINO STOREThe Ito-Yokado Higashi-Narashino Store is a leading shopping center in the Narashinoarea with Ito-Yokado as its core tenant and a UNIQLO clothing store, Daiso 100 yen
shop and other successful specialty shops as its tenants. The building is four stories tallwith Ito-Yokado and the specialty shop area boasting a total combined sales space of
16,389m2. The center also has 1,100 parking spaces.
Narashino City is a typical Tokyo bed town and the 5km trade area has apopulation of 526,000 people. Additionally, a huge condominium
project with about 1,450 planned units is being constructed
and sold very near this property presently.

J - R E I T p o r t fo l i o m a n a g e m e nt c a n b e d e f i n e d a s t h e

REIT Asset Management, has been able to maintain a strong

conducting of investment by an asset management company

occupancy level and keep negative effects of rent revisions

for its J-REIT in accordance with said J-REIT's investment

to a minimum. The occupancy rate of 99.2% as of the end ofpolicy and the management of said J-REIT's portfolio with

the Eighth Fiscal Period is supported by a series of long-term

the aim of maximizing the value and profitability of theleases.

overall portfolio. TOP REIT pursues both external growth
and the qualitative improvement of its assets based on apolicy of diversif ied portfolio management and optimal
utilization of sponsor strengths. TOP REIT is committed toutilizing the management strengths of its asset managementcompany to accomplish this and create added value for its
investors.

RENT REVISIONS
Likewise key to the success of a J-REIT in delivering strong
and stable dividends is the ability to negotiate the present
severe economy with successful rent negotiations. TOP
REIT, through its asset management company, successfully
negotiated with 15 tenants to renew their contracts andDespite the last two years being difficult for the rental office

the rents were revised downward on average by only 5.8%.

market and many firms suffering from weak occupancy rates

Specifically, rents were left unchanged with seven of theand dropping rents, TOP REIT, through the efforts of TOP

tenants and revised downwards with eight of the tenants.

LONG-TERM LEASES THE KEY TO HIGH OCCUPANCY levels

Main Tenant

Portfolio
Share by Rent

Portfolio
Share by
Leased Space

Expiration

NEC Head Office
Building

NEC Corporation

24.6%

24.8%

Dec. 28,2025

Fixed-rate rent until Dec. 2013 (16th FP)
Cancellation banned until Dec. 2013
(16th FP)

Harumi Island Triton
Square Office Tower Y

Some tenants

9.9%

4.1%

Mar. 31,2011

Ordinary lease contract until Mar. 2012
(12th FP)

Harumi Island Triton
Square Office Tower Z

Ito-Yokado Co.,
Ltd., etc.

9.7%

3.7%

Mar. 31,2011

Fixed-term lease contract (fixed-rate rent)
until Mar. 2011 (10th FP)

Sagamihara Shopping
Center

Ito-Yokado Co.,
Ltd.

7.3%

20.9%

Aug. 10,2013

Next rent revision: Aug. 2011 (11th FP)

Ito-Yokado HigashiNarashino Store

Olympic
Corporation,
Nitori Co., Ltd.

4.2%

17.5%

Nov. 30,
2014

Expiration date of lease :18th FP (some rent
is to be calculated on sales of store)

Musashiurawa
Shopping Square

Nippon Steel City
Produce, Ltd.

2.3%

5.1%

Oct. 31,2025

Cancellation banned until Oct. 2015 (19thFP)
Fixed-rate rent until Oct. 2010 (9th FP)

OAK PLAZA

-

1.7%

2.1%

Mar. 31,2027

Fixed-rate rent until Mar. 2017 (22nd FP)
Cancellation banned until Mar. 2017 (22nd FP)

Others

-

1.8%

1.2%

-

61.6%

79.4%

PropertyLong-TermLease(3 years or more)

Address

7-3-1 Higashi-Narashino, Narashino City, Chiba Prefecture

Type of title	Ownership

Floor space

45,338.37m2

Completion

October 2004

Acquisition price

8,900 million yen

Portfolio share

3.2%

YachiyoMidorigaoka Stn.

Kita-Narashino
Stn.

296

Maehara Stn.

Tsudanuma
Stn.

YachiyoCity Hall

Ito-Yokado
Higashi-NarashinoStore

KeiseiOwada Stn.

Yachiyodai
Stn.

16

KeiseiOkubo Stn.

Total

Notes

-

*Lease agreements with 3 or more years set as the lease period at the time current agreement was executed.
Makuhari
Hongo Stn.

Chiba Kita JCT

Miyanogi JCT

13 Business Report for Eighth Fiscal PeriodBusiness Report for Eighth Fiscal Period 14

Office Rent Revision Results (end of 8th FP)
Monthly rent before revision
Revised monthly rent
(million yen)
250

150

4th FP revision
14.9% increase

1st FP revision
0.2% increase

3rd FP revision
9.1% increase

500

1st FP

Increase in monthly rent(%)
Monthly rent before revision

6th FP revision
0.5% increase

2nd FP revision
0.1% increase

200

100

Rent revision results =2nd FP

3rd FP

4th FP

5th FP revision
7.8% increase

8th FP revision
2.1% increase

7th FP revision
1.4% decrease

5th FP

6th FP

Portfolio list

8th FP revision
5.8% decrease

7th FP

The diversified portfolio of TOP REIT is largely comprised of properties in the Central Tokyo area.
(end of Eighth Fiscal Period)

Portfolio Data

8th FP

Asset
Class

Area

Property Name

Special Case: Harumi Island Triton Square Z

NEC Head Office Building

A special master lease with Obayashi Corporation resulted in rents being raised for the master lessee during the Eighth Fiscal Period.

Obayashi Corporation(Trustee)

Sublease Company(master lessee)A(1) Obayashi Corporation leases the property and then subleases it to tenants as the master lessee.
(2) It was agreed that when sublease rent (B) is revised upwards, an equivalent amount over the original rent (A) will be paid to the trustee.
➔ Obayashi Corporation and the sublessee revised rents upward in April 2010.
➔ Consequently, the rent of Obayashi Corporation, the master lessee, was also raised.

Expansion of Portfolio

End of 7th Fiscal Period
EcologyToyosu Procentury

Ito-Yokado Higashi-NarashinoStore

5.16 billion yen

Sumitomo Corporation
Nishiki-cho Building

12.70 billion yen

Retail20.00 billion yen

8.90 billion yen

Shiba-Koen
Building

15,5008.7

12,70014,100

8.0

Akasaka Oji Building

9,660

13,300

7.5

Shiba-Koen Building

5,770

3,710

2.1

Kanda Park Plaza

5,156

5,047

2.8

Tokyo Metropolitan Area

Faret East Building

2,091

2,500

1.4

Kansai Area

Nittetsu Honmachi Building

1,100

1,390

0.8

131,427

142,597

80.5

Sagamihara Shopping Center

12,00010,700

6.0

Ito-Yokado Higashi-Narashino
Store

8,900

5,613

3.2

Musashiurawa Shopping Square

4,335

3,800

2.1

25,235

20,113

11.4

8 properties

14 properties

Fukasawa House Towers H & I

10,6357,180

4.1

113.29 billion yen

162.35 billion yen

Ecology Toyosu Procentury

5,160

4,560

2.6

Diversification of Uses

Faret East
Building (8th floor)

Retailfacilities

Retailfacilities

18.4%

15,795

11,740

6.6

2,590

2,696

1.5

2,590

2,696

1.5

Diversification of Property Share Risk

Other

33.8%

NEC
Head Office
Building

37.0%

Other

175,047

177,146

100.0

75.1%

NEC
Head Office
Building
Other

25.8%

Subtotal (1 property)

Note: Investment Breakdown indicates the proportion of each property’s appraised value to the total appraised value of all properties.

24.0%
Other

41.5%

Harumi Island Triton Square
Office Tower Z 12.3%

OAK PLAZANECHead Office
Building

45.8%
Harumi Island
Triton Square
Office Tower Y

Harumi Island Triton Square
Office Tower Y 29.1%

Central Tokyo

Total

Office buildings

73.1%

Tokyo Metropolitan Area

Subtotal (2 properties)

Residential 9.0% Other 1.5%

14.4%
Office buildings

81.6%

Residential

175.05 billion yen

Retailfacilities

15.5%
Office buildings

15 properties

0.57 billion yen

Residential 9.7% Other 1.6%

Tokyo Metropolitan Area

Subtotal (3 properties)

5.77 billion yen

27.0

20,000End of 8th Fiscal Period

Harumi Island
Triton Square
Office Tower Z

47,75022.2

Subtotal (9 properties)

End of 1st Fiscal Period

41,95039,300

Officeportfolio history

Investment
Breakdown(%)

33,000Central Tokyo

End Tenants(sublessee)

B

Appraised Valueat End of Period(million yen)Harumi Island Triton Square OfficeTower Y
Harumi Island Triton Square OfficeTower Z
Sumitomo Corporation Nishikicho Building

Master lease agreement containing special covenant with Obayashi Corporation
Top REIT

Acquisition
Value(million yen)

20.3%

Harumi Island
Triton Square
Office Tower Y
Harumi Island Triton Square
Office Tower Z 11.4%

18.9%

Note: The charts represent rounded figures and so totals sometime do not equal 100.0%.

15 Business Report for Eighth Fiscal PeriodBusiness Report for Eighth Fiscal Period 16

TOP REIT Remains Committed to Building a Strong,
Diversified Portfolio Centered on the Tokyo Area

Portfolio

tokyo
metropolitan
area

CentralKeisei Ueno

Tokyo

Asakusa

BUNKYOWARDSHINJUKU
WARD

Oshiage
Faret East
Building

Akihabara
KameidoOak plaza

NAKANO
WARD

Kanda

Shinjuku

CHIBA

TOKYO

Ueno

Takadanobaba

NakanoMusashiurawa
Shopping Square

SAITAMA(as of the end of January 2010)

Kinshicho

CHIYODA
WARD
Sumitomo
Corporation
Nishiki-cho Building

Ito-Yokado HigashiNarashino StoreKANAGAWATokyo

Sagamihara Shopping
CenterSHIBUYA
WARD
Akasaka Oji
Building

MINATO
WARD

Shibuya
Shimokitazawa

CHUO
WARD

Hamamatsucho

SETAGAYAWARD
Sangenjaya

Kanda Park Plaza

Shimbashi

Ecology Toyosu
Procentury

Kansai
Total acquisitions (as of April 30, 2010)

ToyosuOsaka

NEC Head Office
Building

Shinagawa

GotandaAppraised value (as of April 30, 2010)¥177,146 million

Yodoyabashi

MeguroFukasawa House
Towers H & I

Kyobashi

Shinkiba

Sengakuji

MEGURO
WARD¥175,047 million

Umeda

Shiba-Koen
Building

Properties

Harumi Island
Triton Square OfficeTowers Y & Z

Kintetsu Nanba

15

Nanba

Rentable area

Nittetsu Honmachi
Building

291,647.88m2

TOP REIT boasts a diversified portfolio built around central Tokyo office properties
Geographic Area

Diversification of Assets in Portfolio

100%

Other
Retail

11.5%

80%
60%
40%

Retail

18.4%

2.0%

Residential 8.1%
Retail19.3%
Office

88.5%

1.6%

Other

Residential 6.8%
Retail

16.1%

Other

1.6%

Other

1.5%

Residential 9.7%

Residential 9.0%

RetailRetail

15.5%

14.4%

100%

81.6%

Office70.6%

Office75.5%

Office73.1%

Office75.1%

Osaka 1.0%

Osaka 0.8%

Osaka 0.7%

Osaka

Tokyo 13.0%
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Central Tokyo

Central Tokyo

Central Tokyo

4th FP

5th/6th/7th FP

8th FP

80%
60%

OfficeOsaka 1.1%

40%

Central Tokyo

19.8%

86.0%

Central Tokyo

IPO

1st FP(End of)

79.2%

28.6%

Central Tokyo

70.6%

24.2%

75.1%

0.7%

26.6%

72.8%

Osaka

0.6%

24.6%

74.7%

20%

20%

0%

0%
IPO

17 Business Report for Eighth Fiscal Period

1st FP(End of)2nd/3rd FP

4th FP

5th/6th/7th FP

8th FP

2nd/3rd FP

Business Report for Eighth Fiscal Period 18

TOP REIT ASSET MANAGEMENT:
Committed to making TOP REIT a leading J-REIT

Robust Support Key to Stability and Future GrowthA s t h e a s s e t m a n a g e r of TOP R EI T, TOP R EI T A s s e tachieving the healthy and sound growth of the real estate

TOP REIT enjoys the robust support of three Japaneseof Nippon Steel; and Oji Real Estate (31%), the real estate

Ma n ag e m e nt ( T R A M ) i s c om m it t e d to t he s u c c e s sf u linvestment trust market and real estate market, contributing

business leaders through TRAM. TRAM is sponsored anddeveloper and planner for the Oji Paper Group. The support

management of the TOP REIT portfolio and to deliveringto the growth of society and the economy, and the formationow ned by Sum itomo Tr ust and Bank ing (38%); Nippon

provided by these sponsors is outlined in the figure below.

opti mal d iv idends and p er for manc e to i nve stors. T heof a desirable city.

Steel City Produce (31%), the real estate development arm

management philosophy of the company calls for building

The operating philosophy that TRAM follows to achieve

TOP REIT into a “top brand” for investors, contributing tothese goals is outlined in the figure below.

TOP REIT

Building an optimal portfolio with high quality properties
Implementing appropriate management

Mitigation of risk through diversified investment

An external growth strategy that applies
the pipeline function of sponsors

Profitability

Optimal Utilization of Sponsor Strengths

Growthpotential

Stability

Pipeline support
agreement

Building andManaging an
Optimal Portfolio

Fairness

Corporate governancethat thoroughly
emphasizes complianceand risk management

Operating
Structure
Focused on
Investors

Transparency

Information disclosure
Proactive IR
Robust relationships with investors

19 Business Report for Eighth Fiscal Period

Capturing
Trust

Agreement on providing
warehousing support

Sumitomo
Trust & Banking
Financial Strategy
that Effectively
Flexibility
Implements
Financial Know-how

Soundness
Capturinga Top Brand
Position

TOP REIT ASSET MANAGEMENT

Flexible anddynamic
fund raising

Maintenance of a soundfinancial structure

Nippon SteelCity Produce(Nippon Steel Group)

Oji Real Estate(Oji Paper Group)

Provision ofreal estate
investment
opportunities

Provision of
information
on properties
owned ordeveloped bysponsors or
their groups

Pipeline Function
Sponsors provide information
on available third party andsponsor group properties to
TOP REIT

Originationof structures
for acquiringproperties

Investment
andfinancing of
SPCs

Warehousing Function
Sponsors provide a temporary
ownership function for realestate to TOP REIT, enabling it
to secure blue-chip properties
in advanceReal estate
operation
andmanagementthat utilizes
the expertiseand riskmanagement
capabilities ofthe sponsors

Leasing
activities that
apply theinformationon leasing
demandpossessed bysponsorgroupsManagement Expertise
Sponsors provide value-add
property and othermanagement services

Business Report for Eighth Fiscal Period 20

Unit Price Performance and Volume Table

Asset Management Overview:

Unit Price (thousand yen)

Financial summary

4th FP
Nov. 1, 2007 –Apr. 30, 2008

5th FPMay 1, 2008 –Oct. 31, 2008

6th FP
Nov. 1, 2008 –Apr. 30, 2009

7th FPMay 1, 2009 –Oct. 31, 2009

8th FP
Nov. 1, 2009 –Apr. 30, 2010

mn yen

4,817

5,584

5,606

5,608

5,814

mn yen

4,817

5,584

5,606

5,608

5,814

mn yen

2,464

2,933

2,905

2,978

2,964

mn yen

1,974

2,371

2,346

2,429

2,405

Operating income

mn yen

2,353

2,651

2,700

2,630

2,849

Ordinary income

mn yen

1,842

1,994

2,047

1,960

2,091

Net income

mn yen

1,841

1,993

2,046

1,961

2,090

mn yen175,226

173,241

172,850

172,884

186,296%(20.0)(-1.1)(-0.2)

(0.0)

(7.8)

Interest-bearing liabilities

mn yen84,18582,00081,74081,74094,240Net assets

mn yen84,037

84,141

84,20884,14084,289categoryunit(1) Operating results
Operating revenue

Trading Volume (unit)

1,000(Note 1)

(Of which, rent revenue)
Operating expense(Of which, expenses related to rent business)

10,000800

Trading volume
on the first day

Market capitalization

31,893 units

Historical high¥998,000

Historical low¥208,000(based on closing price)(based on closing price)

Unit Price (based on closing price)
Trading Volume¥66,650.0 mn

8,000

as of May 31, 2009

600

IPO Price (¥550,000)

400

4,000

200

2,000

(2) Asset, etc. (end of period)
Total assets(Period-on-period variation)

(0.0)

(0.1)

(0.1)

(-0.1)(0.2)

mn yen82,26082,26082,26082,26082,260Total cash distributions

mn yen

1,842

1,993

2,046

1,961

2,090

Dividend payout ratio

%

100.0

100.0

100.0

100.0

100.0

(Period-on-period variation)%

Unitholders’ capital

0

0
3/1
2006

6/1

9/1

12/1 1/4 3/1
2007

6/1

9/1

12/1 1/4 3/1
2008

6/1

IR Schedule

9/1

12/1 1/4 3/1
2009

6/1

9/1

12/1 1/4 3/1
2010

Net assets per unit

(Note 2)

Dividend per unit

unit

155,000

155,000

155,000

155,000

155,000yen

542,175

542,846543,280

542,842

543,805yen

11,884

12,863

13,206

12,654

13,484(Earnings distribution per unit)

yen

11,884

12,863

13,206

12,654

13,484(Distribution in excess of earnings per unit)

yen

-

-

-

-

-

Ratio of ordinary income to total assets(Note 3)%

1.1 (2.3)

1.1 (2.3)

1.2 (2.4)

1.1 (2.2)

1.2 (2.3)

Ratio of net income to unitholders’ equity(Note 3)%2.2 (4.4)

2.4 (4.7)

2.4 (4.9)

2.3 (4.6)

2.5 (5.0)

48.0

48.6

48.7

48.7

45.2

(-9.6)

(0.6)

(0.1)

(-0.0)(-3.5)

48.0

47.3

47.3

47.3

50.6

3,830

4,360

4,412

4,284

4,535

case

13

14

14

14

15

case

43

44

42

42

44

m

2

276,833.20

283,622.23

283,622.23

283,622.23

291,647.88

%

99.5

99.5

99.2

99.2

99.2

Depreciation and amortization at end of period

mn yen

987

1,147

1,151

1,105

1,127

Capital expenditure at end of period

mn yen

463

59

412

97

544

Ratio of unitholders’ equity to total assets(Period-on-period variation)
LTV

%
%

(Note 4)(6) Other referential information
Number of properties at end of period
Number of tenants at end of period(Note 5)

Total rentable area at period end
Occupancy at end of period(Note 6)(Note 1) Operating revenue, etc. do not include consumption taxes.
(Note 2) Net assets per unit have been rounded to the nearest yen.
(Note 3) The indices above are calculated using the following formulas. In addition, annualized figures derived from the management period are indicated in ().
Ratio of ordinary income to total assets = Ordinary income / ((Total assets at beginning of period + Total assets at end of period) / 2)
Ratio of net income to unitholders’ equity = Ordinary income / ((Total assets at beginning of period + Total assets at end of period) / 2)
(Note 4) Rental NOI (Net operating income) = Rent revenue – Expenses related to rental business + Depreciation and amortization(Note 5) 	Number of tenants at end of period indicates total number of tenants of each property as of the end of the period. In the case a master lease agreement is concluded, it is counted as 1
tenant. In the case 1 tenant rents multiple properties, it is calculated as multiple tenants.
(Note 6) Occupancy at end of period = Leased floor area at end of period / Total leasable floor area at end of period(Note 7) Unless otherwise mentioned in the report, fractions of figures not indicated are rounded off for monetary amounts and rounded for ratios.

124 (1.8%)

26,656 units (17.2%)

Other domestic corporations

Other domestic corporations

End of Eighth Fiscal Period

144 (2.1%)

14,220 units (9.2%)

Financial institutions

MAY(including security firms)

Announce performance ofEighth Fiscal Period

JUNE
JULY

(5) Financial indices

Rental NOI

2010

Overseas corporations/individuals

Overseas corporations/individuals

APRIL

Number of Units outstanding

5/31

Unitholders (end of april 2010)(3) Cash distributions(4) Per unit information

6,000

Individuals/other

Financial institutions

98 (1.4%)

6,513 (94.7%)(including security firms)

94,155 units (60.7%)

Payment of dividend forEighth Fiscal Period

AUGUST

Individuals/other

19,969 units (12.9%)

SEPTEMBEROCTOBEREnd ofNinth Fiscal Period

No. of Units Held

No. of Unitholders

Total No. of Units

Total No. of Unitholders

155,000

6,879

NOVEMBER
DECEMBER

2011

Announce performance ofNinth Fiscal Period

JANUARY

Payment of dividend forNinth Fiscal Period

FEBRUARYMARCHDISCLAIMER: TOP REIT, Inc. makes no assurance or warranty with respect to the completeness or accuracy of this English translation. In
the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. For complete
and accurate information, please refer to the Japanese original.

21 Business Report for Eighth Fiscal PeriodBusiness Report for Eighth Fiscal Period 22