JPR-第三期 C1-4-11/7 03.11.21 11:55 AM ページ 1

JPR
Japan Prime Realty Investment Corporation

Third Fiscal Period Business Report
January 1, 2003– June 30, 2003

Printed in Japan

JPR-第三期 C1-4-11/7 03.11.21 11:55 AM ページ 41

PROFILECORPORATE DATA

Established on September 14, 2001, Japan Prime Realty Investment Corporation
is a closed-end, corporate type fund that invests primarily in

Head Office
9-9 Yaesu 1-Chome, Chuo-ku, Tokyo 103-8285, Japan
Tel: 81-3-3231-1051
Fax: 81-3-3274-7775

high-quality office buildings and retail properties

Date of Establishment
September 14, 2001

located in Tokyo and other major cities in Japan.

Listing
Tokyo Stock Exchange (Securities Code: 8955)

With its geographically diverse portfolio, JPR’s primary objective is to achievesustainable growth and stable cash distributions to its investors.

Fiscal Period Ends
June 30 and December 31 of each year
General Meeting of Unitholders
More than once every two years
Cash Distribution Payment Eligibility
Unitholders of record as of June 30 and December 31 ofeach year
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Location of Records
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo
Main Branch, Stock Transfer Agency Division
Mailing Address Mizuho Trust & Banking Co., Ltd.
1-17-7 Saga, Koto-ku, Tokyo 135-8722
Stock Transfer Agency Division
Telephone+81-3-5213-5213 (Representative)
AgentsMizuho Trust & Banking Co., Ltd.
(All branches nationwide)
Mizuho Investors Securities Co., Ltd.
(Head Office and all branches nationwide)
Note: On March 12, 2003, Mizuho Trust & Banking Co., Ltd. merged with
Mizuho Asset Trust & Banking Co., Ltd., to establish a new trust and banking
entity under the name of Mizuho Trust & Banking Co., Ltd. As a result, Mizuho
Trust & Banking's main branch changed its address on the same date.

Websitehttp://www.jpr -reit .co. jp/jpr_e/index.html

English page
This Website has been createdspecifically for our English-speaking
readers.

Performance
Trends in occupancy rate byarea and purpose; trends ininvestment conditions.
Updated monthly.

FAQ
Answers to commonly asked
questions by our unitholders
and investors are found here.

Investor Relations

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Note: Performance Information Report is prepared pursuant to the Investment Trust Law of Japan.

CONTENTS: To Our Investors 1 Financial Highlights 3 Portfolio Breakdown 5 Activity Highlights 7 Subsequent Activity Highlights 9
Property Portfolio of JPR 10 REIT Structure and External Service Providers 21 Management’s Discussion and Analysis 24 Financial Statements 28
Unitholder Information 39 Members of the Board 40 Corporate Data 41

News releases are posted here as appropriate, as well as
information useful to unitholders and investors in evaluating
the status of JPR, including financial statements and otherlegally mandated reports.

This document contains a translation of selected information described in the Financial Report (Kessan Tanshin) dated February 28, 2003 prepared under the timely disclosure
requirements of the Tokyo Stock Exchange, as well as the Financial Statements and Performance Information Report prepared pursuant to the Investment Trust Law of Japan, for theperiod from January 1, 2003 to June 30, 2003 of Japan Prime Realty Investment Corporation (“JPR”).
This English language document was prepared solely for the convenience of and reference by non-Japanese investors and is not intended to constitute a disclosure document. The
Japanese language Financial Report, Financial Statements and Performance Information Report for the aforementioned period should be referred to as the originals of this document.
English translations for legal, accounting, tax and business concepts used herein may not convey precisely identical concepts of the equivalent Japanese terms. With respect to any
and all terms herein, including without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents
and English documents contained herein, the original Japanese documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc. nor anyof their respective directors, officers, employees, partners, unitholders, agents or affiliates will be responsible or liable for the completeness, appropriateness or accuracy of English
translations or the selection of the portion(s) of any document(s) translated into English. No person has been authorized to give any information or make any representations other thanas contained in this document in relation to the matters set out in this document, and if given or made, such information or representation must not be relied upon as having beenauthorized by JPR, Tokyo Realty Investment Management, Inc. or any of their respective directors, officers, employees, partners, unitholders, agents or affiliates.
The financial statements of JPR have been prepared in accordance with generally accepted accounting principles in Japan (Japanese GAAP), which may materially differ in certain
respects from generally accepted accounting principles in other jurisdictions.
Many provisions of this document contain information that constitute forward-looking statements. These forward-looking statements are not a guarantee of future performance andinvolve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors.

JAPAN PRIME REALTY INVESTMENT CORPORATION

41

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TO OUR INVESTORSJapan Prime Realty Investment Corporation (JPR or “the Company”) is pleased to reportfavorable results for the six-month period ended June 30, 2003.
Faced by challenging conditions in the real estate market, JPR and its asset managementcompany Tokyo Realty Investment Management, Inc. (TRIM) have taken steps to continuously enhance the balance and quality of JPR’s portfolio by acquiring new prime properties
and renovating existing properties in the third fiscal period. To steadily expand its asset
base and maintain profitability, JPR raised approximately ¥32,100 million in capital in July
2003, increasing paid-in capital to approximately ¥89,100 million and reducing short-termborrowings by ¥20,800 million.
Looking at results for the six months under review (the Company’s third fiscal period),
JPR recorded operating revenues of ¥5,265 million, operating profits of ¥2,246 million andnet income of ¥1,990 million. This compares with operating revenues in the second fiscal
period of ¥4,973 million, operating profits of ¥2,288 million and net income of ¥2,002 million.
Cash distributions per unit were ¥6,873 for the third fiscal period, compared with ¥6,912 in
the second fiscal period.

Toshihiro Hagiwara
President and CEO,Tokyo Realty Investment Management, Inc.

Hirohito Kaneko
Executive Officer,
Japan Prime Realty Investment Corporation

JAPAN PRIME REALTY INVESTMENT CORPORATION

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OVERVIEW OF THE THIRD FISCAL PERIOD
Acquisitions
To enhance the stability of its revenue stream, JPR strove to improve the balance of its portfolio and to diversify its asset holdings by geographical location and type of use. The asset
base was expanded through targeted investment in large-scale office buildings and retailproperties in central Tokyo and Osaka.
Acquisitions during the third fiscal period include the MS Shibaura Building (investmentof ¥11,200 million, unit ownership) on March 28, 2003. This property will steadily contributeto earnings and increase the overall stability of the portfolio. JPR also acquired the beneficial interest in the Kuraray Nissay Building (investment of ¥8,000 million, co-ownership of
55.3%, increased to 100% following further acquisition in July), on May 15, 2003. The

Targeted investment in central Tokyo and Osaka iscontributing to improving the balance and diversity of
JPR’s expanding asset base.

Kuraray Nissay Building is a retail facility located in central Osaka with The Loft Co., Ltd.,
one of the most popular retailers in Japan, as its key tenant. Then, on June 30, 2003 theCompany acquired the Jinnan 1-chome Building (investment of ¥12,000 million), a retailfacility located in central Tokyo with Tower Records Japan, Inc. as a major tenant.
These acquisitions amounted to ¥31,200 million, bringing the total number of properties held
to 30, with a total acquisition price of ¥125,800 million, total leasable floor space of 201,808.72
square meters, and a total of 324 tenants. JPR believes that these acquisitions helped to
improve the balance and quality of its portfolio and to ensure a stable revenue stream.
Real Estate Leasing
The overall office buildings market is becoming polarized throughout Japan. Recent trends
in the leasing market show that vacancy rates are rising noticeably in aging buildings inless competitive areas, while prime properties are enjoying higher occupancy rates. JPR,
together with TRIM and its tenant agents and property management (PM) companies,
strove to attract new tenants in regions with softening market conditions. The Company

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FINANCIAL HIGHLIGHTS

All amounts in millions of yen
unless otherwise stated

All amounts in millions of yen
unless otherwise stated

3rd period ended
June 30, 2003

2nd period ended
December 31, 2002

All amounts in millions of
U.S. dollars unless otherwise stated (*)

3rd period ended
June 30, 2003

Operating revenues

5,265

4,973

43.9

Operating expenses

3,018

2,685

25.2

Operating profits

2,246

2,288

18.8

Income before income taxes

1,991

2,003

16.6

Net income

1,990

2,002

16.6

Total assets

144,989

106,578

1,210.3

Interest-bearing liabilities

69,50038,930580.1

Total unitholders’ equity

58,97258,984492.3

Unitholders’ capital

56,982

56,982

475.6
16.6

Cash distributions

1,990

2,002

Dividend payout ratio

100.0%

99.9%

Number of units (units)289,600

289,600

Unitholders’ equity per unit (yen/U.S. dollars)

203,634

203,673

1,699.8

Cash distribution per unit (yen/U.S. dollars)

6,873

6,912

57.4

Funds from operations (FFO) per unit (yen/U.S. dollars)

9,962

9,775

83.2

Return on total assets (annualized)

3.2%

3.8%

Return on total unitholders’ equity (annualized)

6.8%

6.8%

Equity ratio

40.7%

55.3%

Interest-bearing liabilities to total assets

47.9%

36.5%

Debt service coverage ratio (times)

10.0

11.3

Property net operating income (NOI)

3,606

3,488

NOI yield (annualized)

5.8%

7.3%

Property net cash flows (NCF)

3,311

3,337

NCF yield (annualized)

5.3%

7.0%

30

27

Number of properties
Number of tenants
Total leasable floor space (square meters)
Occupancy ratio

324

311

201,808.72

168,987.78

93.5%

93.4%

30.1
27.6

(*) The rate of ¥119.80=US$1.00, the foreign exchange rate on June 30, 2003, has been used for translation.

JAPAN PRIME REALTY INVESTMENT CORPORATION

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improved its portfolio occupancy rate to 93.5% as of June 30, 2003, up 0.1 percentage points
from the end of the previous fiscal period. New property acquisitions contributed to the occupancy rate increase.
Retail property, which comprises approximately 26% of the Company’s portfolio on an acquisition price basis, is largely immune to such trends, as the leasing contracts generally cover much
longer periods of time. In JPR’s portfolio, long-term contracts with a remaining period in excess
of five years account for approximately 25% of monthly rent of all leasing contracts.
Cost Reductions and Property Management Strategy
JPR worked to realign property management costs while maintaining a high level of services for tenants by reviewing the contracts for each office building. Specifically, JPR contin-

New property acquisitions are contributing toa higher occupancy rate in JPR’s portfolio of
high-quality properties.

ued to evaluate the capabilities of its PMs in the latest period and proposed measures for
improvement and provided feedback to each PM in order to further improve tenant satisfaction. The Company changed the PMs of the Asahi-Life Fukuoka 3rd and 4th Building,
Asahi-Life Takamatsu 2nd Building and SK Hiroshima Building to Tokyo Tatemono Co.,
Ltd., realizing a total 22.8% reduction in contracted payments for these three properties.
Other Management Initiatives
JPR has established their own rules on transaction limitations based on the Investment
Trust Law. In line with ongoing efforts to avoid conflicts of interest, on June 1, 2003, JPR
added an outside attorney to TRIM’s Compliance Committee, strengthening the monitoringof management functions at TRIM.
A Winning Investment Strategy
Based on the sound management of each investment, JPR is making concerted efforts toincrease investor value through stable cash distributions and by enhancing unitholders’

4 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P1-23 -11/14 03.11.21 11:59 AM ページ 5

PORTFOLIO BREAKDOWNTokyo CBDs(¥50,670 million)

Other cities(¥47,770 million)

Tokyo CBDs(¥906 million)

Other cities(¥1,580 million)

Tokyo CBDs
(39,444.11 m2)

Other cities(86,162.42 m2)

20.9%

25.1%
38.0%

Value
Breakdown
by Region

40.3%

43.8%

NOI
Breakdown
by Region¥125,797
millionTotal Leased
Floor Space
by Region

45.7%

188,668.38
m2¥3,606
million

33.4%
31.1%
21.7%

Greater Tokyo(¥27,357 million)

Greater Tokyo(63,061.84 m2)

Greater Tokyo(¥1,119 million)
Offices(¥92,557 million)

Retail properties(¥33,240 million)

Offices(¥2,825 million)

Retail properties(¥780 million)

Offices(129,608.90 m2)

Retail properties(59,059.47 m2)

21.7%
31.3%

26.4%

Value
Breakdown
by TypeNOI
Breakdown
by Type

Total Leased
Floor Spaceby Type¥125,797
million¥3,606
million188,668.38
m2

73.6%

Banking 1.0%
Real estate 1.0%
Textile 1.5%
Medical 1.6%
Public services 2.1%
Construction and civil engineering 2.3%
Communications 2.4%
Chemical 2.6%
Electronics and electric appliances 3.2%

Other

5.4%

Retail34.5%

Other services

27.0%

Tenancy
Industry
SpreadWholesale 6.4%

Insurance

68.7%

78.3%

8.9%

TOTAL LEASABLE FLOOR SPACE AND OCCUPANCY RATEPORTFOLIO GROWTH

Total leasable floor space (m2)(%) Occupancy rate

220,000

100

200,000

95

90
180,000

Properties

Accumulated
Investment¥125.80 billion

30

25¥94.60 billion¥92.18 billion

27

18

85

¥72.66 billion

160,00080
140,000

1375¥40.73 billion
120,000
70
100,000

65

60

80,000

Nov.
2001

Dec.

Mar.
2002

June

Sept.

Dec.

Mar.
2003

June

Purchase
Period

Nov.
2001

Dec.
2001

June
2002

Sept. 2002 to Jan. 2003 to
Dec. 2002
June 2003

Note: Accumulated investment does not include miscellaneous acquisition
expenses, fixed assets tax, city-planning tax and consumption tax.

JAPAN PRIME REALTY INVESTMENT CORPORATION

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equity. To this end, the Company aims to promote low-cost operations while strengthening
risk analysis, information gathering and analytical capabilities.
When selecting properties, the Company strives to keep risk at a minimum by considering the tenant composition and geographical diversification of its property portfolio. JPR’s
target property portfolio is 80% office buildings and 20% retail properties. By geographic
region, 60% of investment in properties should be located in the Tokyo metropolitan area,with the remaining 40% in other major cities in Japan. JPR plans to maintain these ratios
while expanding its asset base to ¥300,000 million by the end of 2006. The Company makes
every effort to acquire prime properties at favorable terms and conditions based on highly
reliable information on new properties from a broad variety of information sources.

Securing stable long-term growth is dependant on
a strong financial position, continual improvementof existing assets and fine-tuning JPR’s portfolio.

LOOKING AHEAD
Acquisition of Properties
JPR is implementing measures to improve stability through diversification by region andapplication and to increase investment efficiency through greater economies of scale, whileat the same time maintaining its investment policy and firm per-unit cash distribution.
JPR aims to expand its information channels regarding the acquisition of new properties.
The Company will continue to develop a research system capable of quickly accumulating
data on trends according to property type and regional market trends. The Company also
aims to concentrate investment on prime office buildings in Tokyo’s central business districts (CBDs) and highly profitable properties in other areas.
Ongoing Strategy to Increase Value
JPR invests a predetermined percentage of total assets in office buildings that have room for
improvement in profitability and value. These properties, which we refer to as “valueenhanced properties,” have either secure profitability and occupancy rates below 80%, or

6 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P1-23 -11/14 03.11.21 11:59 AM ページ 7

ACTIVITY HIGHLIGHTSMS Shibaura Building
Completed in 1988, the MS Shibaura Building is an
office building with underground parking facilities,
located within an eight-minute walk of Tamachi Stationon the JR Yamanote Line and Keihin Tohoku Line.
Site Area (m2):
8,992.18
Total Floor Space (m2): 31,020.21
Structure/Floors:
SRC/RC/S B2/13F
Completed:February 26, 1988

Kuraray Nissay Building
Beneficiary interest in the Kuraray Nissay Building was
acquired in a private transaction at a favorable price.
Featuring shops, cinemas and parking facilities, thebuilding is centrally located in Osaka and only five minutes from JR Osaka Station. The Loft Co., Ltd. is amajor tenant.
Site Area (m2):
3,518.68
Total Floor Space (m2): 17,897.56
Structure/Floors:
SRC B1/8F
Completed:
April 17, 1990
Note: JPR increased its ownership of this building to 100% in July.

Jinnan 1-chome Building
Located four minutes on foot from Shibuya Station,and served by several train lines, the Jinnan 1-chome
Building is an excellent retail store property with Tower
Records Japan, Inc. as its main tenant. With a modern
design by RB Urban Architects Ltd., the Jinnan
1-chome Building has been well maintained since its
completion in 1992.
Site Area (m2):
1,010.47
Total Floor Space (m2): 8,449.56
Structure/Floors:
SRC/S B3/8F
Completed:February 10, 1992

JAPAN PRIME REALTY INVESTMENT CORPORATION

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growth potential from renovation. Through a variety of means, including better leasing conditions, increasing management efficiency and remodeling, greater profitability and value
can be acquired from each building, increasing the asset’s resale value. This strategy led tothe sale of the Yasuda-Life Tenroku Building in September 2003. It is also being employed
to increase the market value of the Yasuda-Life Ikebukuro Building, which is being reinforced to better withstand earthquakes, receiving enhanced air-conditioning equipment andhaving its interior renovated. These renovations should be completed in March 2004.
Proactive Asset Management
JPR, together with TRIM and its PMs, will continue to work to improve occupancy rates byfocusing on office buildings with lower occupancy rates. JPR will also engage in activities toretain existing tenants in office buildings. Moreover, by inputting the comments andrequests of existing tenants into a database and reflecting them in property management
evaluations, JPR encourages PMs to improve their operations and tenant services. JPR willcontinue to make every effort to improve cost performance through long-term maintenanceand repair plans that consider the entire life cycle, and choosing building maintenance companies with high market competitiveness.

Based on a sound investment policy, JPR’s ongoing goal is to secure stable medium- andlong-term growth. Backed by a strong financial position and future prospects, JPR is confident in its potential of growing into a more competitive position in the marketplace. An
innovative asset management company, TRIM is dedicated to maximizing investment value.
The Company looks forward to the continued support and understanding of all its investors.

Hirohito Kaneko, Executive Officer,
Japan Prime Realty Investment Corporation

Toshihiro Hagiwara, President and CEO,Tokyo Realty Investment Management, Inc.

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SUBSEQUENT ACTIVITY HIGHLIGHTS(Since July 1, 2003)

Property Acquisitions
Kuraray Nissay Building

Gotanda First Building

Nagoya Kowa Building

The remaining beneficiary interest in the
Kuraray Nissay Building was acquiredon July 16. The building is centrally
located in Osaka five minutes from JR
Osaka Station, and contains shops,
cinemas, and parking facilities. The Loft
Co., Ltd. is a major tenant.

The building is a two-minute walkfrom Gotanda Station, serviced by the
JR Yamanote Line, Tokyu Ikegami
Line, and the Toei Asakusa Subway
Line. Major tenants are CMIC CO.,Ltd and NEC Lighting, Ltd.

The building is located in central
Nagoya near Sakae Station on the
Higashiyama and Meijo subway lines.
Major tenants include Giorgio Armani
Japan and Novarese Inc.

Location: Osaka, Osaka
Acquisition Date: July 16, 2003
Acquisition Price: ¥5,000 million

Location: Shinagawa-ku, Tokyo
Acquisition Date: July 23, 2003
Acquisition Price: ¥2,920 million

Location: Naka-ku, Nagoya
Acquisition Date: September 1, 2003
Acquisition Price: ¥4,550 million

Property Divesture
Yasuda-Life Tenroku Building
The Yasuda-Life Tenroku Building was sold in accordancewith JPR’s fundamental investment policy, and in consideration of future real estate trends and the overall asset
portfolio composition.
This building is also the first of the “value-enhanced
properties” to be sold. Such properties have been determined to have potential for improvement in profitability andvalue. Under this strategy, once the building’s status has
been determined, proactive steps are taken to increase
the property’s resale value, including implementing morefavorable leasing conditions, increasing management efficiency and making renovations to improve the physicalstructure.

Issue of New Investment Units
An additional offering of new investment units was completed on July 14, 2003, and a third-party allotment on
August 8. From the capital raised, ¥20,800 million wasused to repay short-term borrowings. This new issue
raised unitholders’ equity to a total of ¥89,113,803,600,
and the number of outstanding units to 430,000.
1. Public Offering
Units Issued:
134,400
Gross Proceeds: ¥30,758,649,600
2. Third-Party Allotment
Units Issued:
6,000
Gross Proceeds: ¥1,373,154,000

Location:
Osaka, Osaka
Sale Date:
September 3, 2003
Book Value:¥421.8 million (June 2003)
Sale Price:¥600 million
Profit on Sale: ¥178.2 million

JAPAN PRIME REALTY INVESTMENT CORPORATION

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PROPERTY PORTFOLIO OF JPR

A Tokyo CBDs
■
■ A-1
■ A-2
■ A-3
■ A-4
■ A-5
■ A-6
● A-1

Locations of Portfolio Properties

C – 10 11

B Greater Tokyo■

Hokkaido

■ B-1
■ B-2
■ B-3
● B-1
● B-2
■ B-4
■ B-5

A Tokyo CBDs
Shinjuku-ku

Office A-5

Office A-3

Office A-4
Chiyoda-ku

Shibuya-ku

Office A-1
Office A-2

C Other Cities—Hokkai■

Office A-6
Minato-ku

C – 12

Hokuriku■ C-10 North 3■ C-11 Park Ea■ C-12 Sompo■ C-1 Niigata

TohokuShinagawa-ku

C – 1

Osaka

A
C – 2

C – 15
8 14

C – 13

C – 5

C Other Cities—Osaka,■■ C-2 Yasuda■ C-3 Yasuda■ C-4 Tokyo T■ C-13 Sompo■ C-15 SK Hiro
■ C-5 Asahi-L■ C-6 JPR Tak● C-1 Kuraray

B

ChugokuC – 7

Arca Ea
JPR ChAsahi-L
Tanashi
TsurumYasudaShinyok

Chuo-ku

Retail A-1

KyushuKanemaKanemaYasudaShin-Ko
Crest YMS ShiJinnan3

4

B Greater Tokyo
Saitama1

Retail B-1

Kinki

Office B-1

C Other Cities—Kyushu
■

Tokyo

Office B-4

6

Kanagawa Retail B-2

Office B-5
Office B-3

Shikoku

Office B-2

Chiba

C – 9

Okinawa

10 JAPAN PRIME REALTY INVESTMENT CORPORATIONTokyo CBDs

Chiyoda, Chuo, Minato, Shinjuku,
Shinagawa, Shibuya

B

Greater Tokyo

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

C

Other Cities

All other areas in JapanA■ C-7 Yasuda■ C-8 Asahi-L■ C-14 Tenjin 1■ C-9 YasudaJPR-第三期 P1-23 -11/14 03.11.21 0:00 PM ページ 11

A Tokyo CBDs
■
■ A-1
■ A-2
■ A-3
■ A-4
■ A-5
■ A-6
● A-1

Kanematsu Bldg.
Kanematsu Bldg. Annex
Yasuda-Life Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
Crest Yasuda Bldg.
MS Shibaura Bldg.
Jinnan 1-chome Bldg. (Retail)

B Greater Tokyo
■
■ B-1
■ B-2
■ B-3
● B-1
● B-2
■ B-4
■ B-5

Arca East
JPR Chiba Bldg.
Asahi-Life Yokohama Nihon Odori Bldg.
Tanashi ASTA (Retail)Tsurumi fuga 1 (Retail)Yasuda-Life Ikebukuro Bldg.
Shinyokohama 2nd Center Bldg.

C Other Cities—Hokkaido, Tohoku and Hokuriku■■ C-10 North 33 Bldg.
■ C-11 Park East Sapporo■ C-12 Sompo Japan Sendai Bldg.
■ C-1 Niigata Ekinan Center Bldg.
C Other Cities—Osaka, Kinki, Chugoku and Shikoku■■ C-2 Yasuda-Life Osaka Bldg.
■ C-3 Yasuda-Life Tenroku Bldg.
■ C-4 Tokyo Tatemono Honmachi Bldg.
■ C-13 Sompo Japan Wakayama Bldg.
■ C-15 SK Hiroshima Bldg.
■ C-5 Asahi-Life Takamatsu 2nd Bldg.
■ C-6 JPR Takamatsu Bldg.
● C-1 Kuraray Nissay Bldg. (Retail)
C Other Cities—Kyushu and Okinawa■■ C-7 Yasuda-Life Hakata Bldg.
■ C-8 Asahi-Life Fukuoka 3rd and 4th Bldg.
■ C-14 Tenjin 121 Bldg.
■ C-9 Yasuda-Life Naha Bldg.

JAPAN PRIME REALTY INVESTMENT CORPORATION

11

JPR-第三期 P1-23 -11/14 03.11.21 0:00 PM ページ 12

Tokyo CBDs

Region

Type

No.

Name

Location

Completed

Acquired

Greater Tokyo

Appraisal
Value(millions of yen)%of total(millions of yen)

Ownersh(%)

OfficeA-1

Kanematsu Bldg.

Chuo-ku, Tokyo

1993. 2

2001.12.27

16,27612.9%

15,60079.

OfficeA-2

Kanematsu Bldg. Annex

Chuo-ku, Tokyo

1993. 2

2001.12.27

2,874

2.3%

2,570

79.

OfficeA-3

Yasuda-Life Ningyo-cho Bldg.

Chuo-ku, Tokyo

1989.122001.11.16

2,100

1.7%

1,920

100.

OfficeA-4

Shin-Kojimachi Bldg.

Chiyoda-ku, Tokyo

1984.10

2001.11.16
2002.11.21(Total)

1,670
550

1.3%
0.4%

1,583
677

49.

21.

OfficeA-5

Crest Yasuda Bldg.

Chiyoda-ku, Tokyo

1999. 92002. 6.21

4,000

3.2%

3,640

100.

OfficeA-6

MS Shibaura Bldg.

Minato-ku, Tokyo

1988. 2

2003. 3.28

11,2008.9%

12,00036.

RetailA-1

Jinnan 1-chome Bldg.

Shibuya-ku, Tokyo

1992. 2

2003. 6.30

12,0009.5%

12,000100.

50,67040.3%

49,980Total
OfficeB-1

Arca East

Sumida-ku, Tokyo

1997. 3

2001.11.16

5,880

4.7%

6,090

41.

OfficeB-2

JPR Chiba Bldg.

Chiba, Chiba

1991. 1

2001.12.13

2,350

1.9%

2,220

100.

OfficeB-3

Asahi-Life Yokohama Nihon Odori Bldg.

Yokohama, Kanagawa

1989.10

2001.11.16

2,927

2.3%

2,831

100.

OfficeB-4

Yasuda-Life Ikebukuro Bldg.

Toshima-ku, Tokyo

1980.10

2002. 6.21

2,040

1.6%

2,040

100.

OfficeB-5

Shinyokohama 2nd Center Bldg.

Yokohama, Kanagawa

1991. 8

2002. 9.25

920

0.7%

1,080

RetailB-1

Tanashi ASTA

Nishitokyo, Tokyo

1995. 2

2001.11.16

10,200

8.1%

10,86050.
42.

RetailB-2

Tsurumi fuga 1

Yokohama, Kanagawa

1985. 92001.11.16

3,040

2.4%

3,187

27,35721.7%

28,308

Total

Other Cities

Acquisition
Price

64.

OfficeC-1

Niigata Ekinan Center Bldg.

Niigata, Niigata

1996. 3

2001.11.16

2,140

1.7%

2,150

52.

OfficeC-2

Yasuda-Life Osaka Bldg.

Osaka, Osaka

2000. 6

2001.12.25

8,300

6.6%

8,600

33.

OfficeC-3

Yasuda-Life Tenroku Bldg.

Osaka, Osaka

1991. 6

2001.11.16

418

0.3%

554

100.

OfficeC-4

Tokyo Tatemono Honmachi Bldg.

Osaka, Osaka

1970. 2

2001.11.16

4,150

3.3%

4,170

64.

OfficeC-5

Asahi-Life Takamatsu 2nd Bldg.

Takamatsu, Kagawa

1981. 8

2001.11.16

872

0.7%

800

100.

OfficeC-6

JPR Takamatsu Bldg.

Takamatsu, Kagawa

1982. 92001.12.18

2,130

1.7%

1,510

100.

OfficeC-7

Yasuda-Life Hakata Bldg.

Fukuoka, Fukuoka

2001.11.16

2,900

2.3%

2,740

100.

OfficeC-8

Asahi-Life Fukuoka 3rd and 4th Bldg.

Fukuoka, Fukuoka

1985. 6
1984. 2 (3rd)1986.10 (4th)2001.11.16

2,873

2.3%

2,799

100.

OfficeC-9

Yasuda-Life Naha Bldg.

Naha, Okinawa

1991.10

2001.11.16

1,560

1.2%

1,610

100.

Office

C-10

North 33 Bldg.

Sapporo, Hokkaido

1992. 2

2002. 6.18

3,700

2.9%

3,370

100.

Office

C-11

Park East Sapporo

Sapporo, Hokkaido

1985.11

2002. 6.18

2,150

1.7%

2,230

100.

OfficeC-12

Sompo Japan Sendai Bldg.

Sendai, Miyagi

1997.12

2002. 6.26

3,150

2.5%

3,230

100.

OfficeC-13

Sompo Japan Wakayama Bldg.

Wakayama, Wakayama

1996. 7

2002. 6.26

1,670

1.3%

1,670

100.

OfficeC-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

2000. 7

2002. 6.21

2,810

2.2%

2,670

52.

Office

C-15

SK Hiroshima Bldg.

Hiroshima, Hiroshima

1989.12

2002.10. 4

947

0.8%

986

RetailC-1

Kuraray Nissay Bldg.

Osaka, Osaka

1990. 4

2003. 5.15

8,000

6.4%

7,830

100.
65.

Total

47,77038.0%

46,919Total

125,797

100.0%

125,207Note 1: Acquisition price does not include miscellaneous expenses of acquisition (real estate agent’s fee and consumption tax)
Note 2: Percentages and ratios are rounded to the first decimal point

12 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P1-23 -11/14 03.11.21 0:00 PM ページ 13

Acquisition
Price

Appraisal
Value

Total Leasable
Floor Space (m2)

Total Leased
Floor Space (m2)

(JPR’s portion)(JPR’s portion)

1,751.13

7,958.59

6,954.37

87.4%

10

480,094

9.1%

79.4%

679.06

2,291.13

2,291.13

100.0%

1

105,471

2.0%

1,920

100.0%

550.062,784.78

2,784.78

100.0%

4

106,390

2.0%

1.3%
0.4%
(1.8%)

1,583
677(2,250)49.0%

1,931.57

21.0%

657.802,105.44
901.36(3,006.80)

901.3691.7%
100.0%(94.2%)

7
3(10)

79,976
31,716(111,692)

1.5%
0.6%
(2.1%)

4,000

3.2%

3,640

100.0%

636.903,265.34

2,074.97

63.5%

6

113,200

2.2%

28

11,2008.9%

12,00036.0%

8,992.18

14,429.08

14,429.08

100.0%

6

316,7696.0%

30

12,0009.5%

12,000100.0%

1,010.47

8,076.85

8,076.85

100.0%

1——

50,67040.3%

49,98014,277.60

41,812.57

39,444.11

94.3%

38

1,233,615

23.4%

16

5,880

4.7%

6,090

41.1%

3,755.01

7,050.10

7,050.10

100.0%

4

348,877

6.6%

13

2,350

1.9%

2,220

100.0%

1,382.35

5,557.05

4,649.96

83.7%

25

154,995

3.0%

16

2,927

2.3%

2,831

100.0%

1,100.59

6,066.56

5,336.35

88.0%

8132,901

2.5%

21

2,040

1.6%

2,040

100.0%

772.77

4,535.03

2,790.49

61.5%

6

86,011

1.6%

25

920

0.7%

1,080

2,641.43

2,534.63

96.0%

10

71,913

1.4%

16

10,200

8.1%

10,86050.0%841.71
42.1% (land)
52.9% (building)12,326.30

31,121.71

31,121.71

100.0%

1

672,182

12.8%

16

3,040

2.4%

3,187

64.4%

1,962.18

9,578.60

9,578.60

100.0%

1

153,279

2.9%

27,35721.7%

28,30822,140.91

66,550.48

63,061.84

94.8%

55

1,620,159

30.8%

16

2,140

1.7%

2,150

52.7%

2,706.99

5,206.82

5,206.82

100.0%

16

133,123

2.5%

25

8,300

6.6%

8,600

33.3%

5,999.33

9,588.17

9,588.16

100.0%

20

378,719

7.2%

16

418

0.3%

554

100.0%

642.062,395.12

2,395.12

100.0%

6

58,051

1.1%

16

4,150

3.3%

4,170

64.3%

1,432.64

7,210.25

7,106.76

98.6%

10

262,239

5.0%

16

872

0.7%

800

100.0%

579.992,518.31

1,875.59

74.5%

18

52,638

1.0%

18

2,130

1.7%

1,510

100.0%

1,407.78

5,036.78

3,864.58

76.7%

20

98,551

1.9%

16

2,900

2.3%

2,740

100.0%

1,214.63

6,568.80

5,672.46

86.4%

26

157,285

3.0%

16

2,873

2.3%

2,799

100.0%

2,500.86

8,439.77

7,778.74

92.2%

15

207,809

3.9%

16

1,560

1.2%

1,610

100.0%

959.87

3,947.07

3,841.57

97.3%

14

114,893

2.2%

18

3,700

2.9%

3,370

100.0%

1,382.12

6,642.76

5,512.87

83.0%

16

198,872

3.8%

18

2,150

1.7%

2,230

100.0%

1,808.26

7,646.59

6,275.80

82.1%

19

168,582

3.2%

26

3,150

2.5%

3,230

100.0%

1,895.67

7,046.44

7,046.44

100.0%

10

207,222

3.9%

26

1,670

1.3%

1,670

100.0%

1,128.45

4,892.17

4,734.59

96.8%

16

124,837

2.4%

21

2,810

2.2%

2,670

52.2%

1,164.39

3,292.02

3,012.28

91.5%

10

118,553

2.2%

4

947

0.8%

986

2,732.29

1,968.33

72.0%

14

62,205

1.2%

15

8,000

6.4%

7,830

100.0%
502.41
65.8% (land)
55.3% (building) 3,518.68

10,282.31

10,282.31

100.0%

1

67,172

1.3%

47,77038.0%

46,91928,844.13

93,445.67

86,162.43

92.2%

231

2,410,752

45.8%

125,797

100.0%

125,20765,262.64

201,808.72

188,668.38

93.5%

324

5,264,525

100.0%(millions of yen)%of total

Ownership

Site Area

(%)

(m2)

(millions of yen)27

16,27612.9%

15,600

79.4%

27

2,874

2.3%

2,570

16

2,100

1.7%

16
21

1,670
550
(2,220)21dRentalOccupancy# ofRevenue
Rate
Tenants (thousandsof yen)%of total

JAPAN PRIME REALTY INVESTMENT CORPORATION

13JPR-第三期 P1-23 -11/14 03.11.21 0:00 PM ページ 14

OVERVIEW OF PORTFOLIO PROPERTIES(as of June 30, 2003)

Tokyo CBDs
A -■
1
■

A -■
3
■

Kanematsu Bldg.

Yasuda-Life Ningyo-cho Bldg.

Chuo-ku, Tokyo

Chuo-ku, Tokyo

Acquisition Price(millions of yen):
16,276

Acquisition Price(millions of yen):

2,100% of Total:

1.7%% of Total: 12.9%

Site Area (m2):550.06Site Area (m2):

Total Floor Space (m2): 4,117.70

1,751.13
Total Floor Space (m2):
14,995.09

Structure/Floors:

SRC/RC
B1/8F

Completed:

December
1989

Structure/Floors:
S/RC/SRC
B2/13F
Completed:February 1993

A -■
4
■

Shin-Kojimachi Bldg.
Chiyoda-ku, Tokyo
Acquisition Price(millions of yen):

A -■
2
■

Kanematsu Bldg. Annex

2,220% of Total:

1.8%

Site Area (m2):

657.80Total Floor Space (m2): 5,152.98

Chuo-ku, Tokyo

Structure/Floors:

SRC
B1/9F

Completed:

October
1984

Acquisition Price (millions of yen):
2,874% of Total:

2.3%

Site Area (m2):679.06

Total Floor Space (m2):

4,351.46

Structure/Floors:

SRC
B1/8F

Completed:February
1993

Note 1: Acquisition price does not include miscellaneous expenses(real estate agent’s fee and consumption tax)

A -■
5
■

Crest Yasuda Bldg.
Chiyoda-ku, Tokyo
Acquisition Price(millions of yen):

4,000% of Total:

3.2%

Site Area (m2):

636.90Total Floor Space (m2): 4,790.68
Structure/Floors:

SRC
B1/9F

Completed:

September
1999

Note 2: Percentages and ratios are rounded to the first decimal point
Note 3: Abbreviations under “Structure/Floors” indicate S: Steel-frame,
RC: Reinforced concrete and SRC: Steel-frame reinforced concrete

14 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P1-23 -11/14 03.11.21 0:01 PM ページ 15

Greater Tokyo
A -■
6
■

B -■
1
■

MS Shibaura Bldg.

Arca East

Minato-ku, Tokyo

Sumida-ku, Tokyo
Acquisition Price(millions of yen):
5,880% of Total: 4.7%
Site Area (m2):
3,755.01
Total Floor Space (m2):34,281.86
Structure/Floors:
S/SRC B3/19F

Acquisition Price (millions of yen):

11,200% of Total:

8.9%

Site Area (m2):

8,992.18

Total Floor Space (m2):

31,020.21

Structure/Floors:

SRC/RC/S B2/13F

Completed:February 1988

Completed:
March 1997

A -●1 (Retail)■B -●1 (Retail)■

Jinnan 1-chome Bldg.

Tanashi ASTA

Shibuya-ku, Tokyo

Nishitokyo, Tokyo

Acquisition Price(millions of yen):
12,000% of Total: 9.5%
Site Area (m2):
1,010.47
Total Floor Space (m2):8,449.56
Structure/Floors:
SRC/S B3/8F
Completed:February 1992

Acquisition Price (millions of yen):

10,200% of Total:

8.1%

Site Area (m2):

12,326.30

Total Floor Space (m2):80,675.27

Structure/Floors:

SRC B2/17F

Completed:February 1995

JAPAN PRIME REALTY INVESTMENT CORPORATION

15JPR-第三期 P1-23 -11/14 03.11.21 0:01 PM ページ 16

B -●2 (Retail)■Tsurumi fuga 1
Yokohama, Kanagawa
Acquisition Price(millions of yen):

3,040% of Total:

2.4%

Site Area (m2):

1,962.18

Total Floor Space (m2): 13,543.32
Structure/Floors:

SRC
B2/7F

Completed:

September
1985

B -■
2
■

B -■
3
■

JPR Chiba Bldg.

Asahi-Life Yokohama Nihon Odori Bldg.

Chiba, Chiba

Yokohama, Kanagawa

Acquisition Price(millions of yen):

2,350

Acquisition Price(millions of yen):

2,927% of Total:

1.9%% of Total:

2.3%

Site Area (m2):

1,382.35

Site Area (m2):

1,100.59

Total Floor Space (m2): 9,072.57

Total Floor Space (m2): 9,146.52

Structure/Floors:

S/SRC
B1/13F

Structure/Floors:

SRC
B1/11F

Completed:

January
1991

Completed:

October
1989

B -■
4
■

B -■
5
■

Yasuda-Life Ikebukuro Bldg.

Shinyokohama 2nd Center Bldg.

Toshima-ku, Tokyo

Yokohama, Kanagawa

Acquisition Price(millions of yen):

2,040

Acquisition Price(millions of yen):920% of Total:

1.6%% of Total:

0.7%

772.77Site Area (m2):

841.71Site Area (m2):

Total Floor Space (m2): 6,468.08

Total Floor Space (m2): 7,781.93

Structure/Floors:

SRC
B1/9F

Structure/Floors:

S/SRC
B2/12F

Completed:

October
1980

Completed:

August1991

16 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P1-23 -11/14 03.11.21 0:01 PM ページ 17

Other Cities — Hokkaido, Tohoku and Hokuriku
C -■
10
■

C -■
11
■

North 33 Bldg.

Park East Sapporo

Sapporo, Hokkaido

Sapporo, Hokkaido

Acquisition Price(millions of yen):

3,700

Acquisition Price(millions of yen):

2,150% of Total:

2.9%% of Total:

1.7%

1,382.12

Site Area (m2):

1,808.26

Site Area (m2):

Total Floor Space (m2): 10,568.23

Total Floor Space (m2): 10,865.75

Structure/Floors:

SRC
B1/12F

Structure/Floors:

SRC
B1/8F

Completed:February
1992

Completed:

November
1985

C -■
12
■

C -■
1
■

Sompo Japan Sendai Bldg.

Niigata Ekinan Center Bldg.

Sendai, Miyagi

Niigata, Niigata

Acquisition Price(millions of yen):

3,150

Acquisition Price(millions of yen):

2,140% of Total:

2.5%% of Total:

1.7%

Site Area (m2):

1,895.67

Site Area (m2):

2,706.99

Total Floor Space (m2): 10,783.52

Total Floor Space (m2): 19,950.42

Structure/Floors:

SRC
B1/12F

Structure/Floors:

S/SRC
B1/10F

Completed:

December
1997

Completed:

March
1996

JAPAN PRIME REALTY INVESTMENT CORPORATION

17

JPR-第三期 P1-23 -11/14 03.11.21 0:01 PM ページ 18

Other Cities — Osaka
C -■
2
■

C -■
3
■

Yasuda-Life Osaka Bldg.

Yasuda-Life Tenroku Bldg.

Osaka, Osaka

Osaka, Osaka
Acquisition Price(millions of yen):418% of Total:

0.3%

Site Area (m2):642.06

Total Floor Space (m2): 3,851.23
Structure/Floors:

SRC
B1/8F

Completed:

June 1991

C -■
4
■

Tokyo Tatemono Honmachi Bldg.
Osaka, Osaka
Acquisition Price(millions of yen):

4,150% of Total:

3.3%

Site Area (m2):

1,432.64

Total Floor Space (m2): 14,619.52

Acquisition Price (millions of yen):

8,300% of Total:

6.6%

Site Area (m2):5,999.33

Total Floor Space (m2):

52,982.94

Structure/Floors:

S/SRC B2/31F

Completed:

June 2000

Structure/Floors:

SRC
B3/9F

Completed:February
1970

C -●1 (Retail)■

Kuraray Nissay Bldg.
Osaka, Osaka
Acquisition Price(millions of yen):

8,000% of Total:

6.4%

Site Area (m2):

3,518.68

Total Floor Space (m2): 17,897.56

18 JAPAN PRIME REALTY INVESTMENT CORPORATION

Structure/Floors:

SRC
B1/8F

Completed:

April
1990

JPR-第三期 P1-23 -11/14 03.11.21 0:01 PM ページ 19

Other Cities — Kinki, Chugoku and Shikoku
C -■
13
■

C -■
15
■

Sompo Japan Wakayama Bldg.

SK Hiroshima Bldg.

Wakayama, Wakayama

Hiroshima, Hiroshima

Acquisition Price(millions of yen):

1,670

Acquisition Price(millions of yen):947% of Total:

1.3%% of Total:

0.8%

Site Area (m2):

1,128.45

Site Area (m2):

502.41

Total Floor Space (m2): 6,715.07

Total Floor Space (m2): 4,268.70

Structure/Floors:

S 9F

Structure/Floors:

SRC B1/9F

Completed:

July 1996

Completed:

December
1989

C -■
5
■

C -■
6
■

Asahi-Life Takamatsu 2nd Bldg.

JPR Takamatsu Bldg.

Takamatsu, Kagawa

Takamatsu, Kagawa

Acquisition Price(millions of yen):872

Acquisition Price(millions of yen):

2,130% of Total:

0.7%% of Total:

1.7%

579.99Site Area (m2):

1,407.78

Site Area (m2):

Total Floor Space (m2): 3,471.55

Total Floor Space (m2): 7,409.08

Structure/Floors:

SRC 8F

Structure/Floors:

SRC
B1/10F

Completed:

August1981

Completed:

September
1982
March
1984
(extension)JAPAN PRIME REALTY INVESTMENT CORPORATION

19JPR-第三期 P1-23 -11/14 03.11.21 0:02 PM ページ 20

Other Cities — Kyushu and Okinawa
C -■
7
■

Yasuda-Life Hakata Bldg.
Fukuoka, Fukuoka
Acquisition Price(millions of yen):

2,900% of Total:

2.3%

Site Area (m2):

1,214.63

Total Floor Space (m2): 9,791.91
Structure/Floors:

S/RC
B1/12F

Completed:

June
1985

C -■
8
■

Asahi-Life Fukuoka 3rd and 4th Bldg.
Fukuoka, Fukuoka
Acquisition Price(millions of yen):
2,873% of Total:
2.3%
2,500.86
Site Area (m2):
Total Floor Space (m2): 7,683.01 (3rd)
Structure/Floors:
SRC B1/10F(3rd)
Completed:February 1984
(3rd)
Total Floor Space (m2): 3,723.68 (4th)Structure/Floors:
SRC 7F (4th)Completed:
October 1986
(4th)

C -■
14
■

C -■
9
■

Tenjin 121 Bldg.

Yasuda-Life Naha Bldg.

Fukuoka, Fukuoka

Naha, Okinawa

Acquisition Price(millions of yen):

2,810

Acquisition Price(millions of yen):

1,560% of Total:

2.2%% of Total:

1.2%

Site Area (m2):

1,164.39

Site Area (m2):

959.87

Total Floor Space (m2): 8,690.95

Total Floor Space (m2): 5,780.71

Structure/Floors:

S/SRC
13F

Structure/Floors:

S/SRC
12F

Completed:

July 2000

Completed:

October
1991

20 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P1-23 -11/14 03.11.21 0:02 PM ページ 21

REIT STRUCTURE AND EXTERNAL SERVICE PROVIDERS

Asset Management Company

Advisor on Construction
Management/
Property Transfer AgentTokyo Realty Investment
Management, Inc.

Tokyo Tatemono Co., Ltd.

Asset Management

Tenant Agents
Investment Corporation

Tokyo Tatemono Co., Ltd.
Yasuda Real Estate Co., Ltd.
Taisei Corporation

Japan Prime Realty
Investment Corporation

Loan

Liabilities

LenderAssetsInvestment

Real Estate etc.

Unitholder

Unitholders’ Equity
Cash Distribution

Property Manager

Unitholder

Asset Custodian

Administrative Agent

Asset Custodian
Mizuho Trust & Banking Co., Ltd.

Administrative Agent
Mizuho Trust & Banking Co., Ltd.

Tokyo Tatemono Co., Ltd. performs agency services for the signing of real estate leasing contracts (“generaltenant agency services”) under a commission from the owners of real estate, in order to provide uniform
tenant recruitment and sales services for the Company. Tokyo Tatemono also has been commissioned by
TRIM to undertake “property transfer services.” Tokyo Tatemono also provides advice on rental operations
management and construction planning management work (“leasing management/construction management
services” or “LM /CM services”) to TRIM.

Yasuda Real Estate Co., Ltd. and Taisei Corporation provide general tenant agency services for real estate, ascommissioned by the trustees.

JAPAN PRIME REALTY INVESTMENT CORPORATION

21

JPR-第三期 P1-23 -11/14 03.11.21 0:02 PM ページ 22

Tokyo Realty Investment Management, Inc.
Tokyo Realty Investment Management, Inc. (“TRIM”) concluded the asset management contract with JPR on
September 27, 2001. Based on the contract, TRIM provides asset management services as a REIT Management
Company under the Investment Trust Law.
TRIM is assigned to provide (1) services regarding asset management for JPR (including all decision-making
in connection with the acquisition or leasing of properties and acting as an agent or broker of such transactions
based on relevant judgement), (2) services regarding funding by JPR, (3) reporting to JPR and (4) any other services related to or affiliated with the above (the above services are collectively called “Asset Management
Service” or “AM Service”).

Shareholders’ Meeting
Auditors
Board of Directors
C E O
Compliance Committee

Investment Committee
Investment Management
Division

ResearchGroup

Investment
Group

Corporate Planning/
Administration Division

Financial Division

Asset
Management
Group

FinanceGroup

IR Group

FundManagement
Group

Accounting
Group

Planning/
Human
ResourcesGroup

Shareholders in TRIM (As of June 30, 2003)
Sompo Japan Insurance Inc.

10%

Tokyo Tatemono Co., Ltd.

26%
Yasuda Real Estate Co., Ltd.

20%

Total

100%

Taisei Corporation

20%

22 JAPAN PRIME REALTY INVESTMENT CORPORATIONThe Yasuda Mutual Life
Insurance Company

24%ComplianceGroupJPR-第三期 P1-23 -11/14 03.11.21 0:02 PM ページ 23

Decision-Making Process of Investment Management
The “Investment Committee” is set as a committee to make investment decisions as well as its sub-organizations, the “Investment Subcommittee” and the “Fund Management Subcommittee.” Members of these organizations include the CEO, CIO, CFO, CAO, Fund Manager, Research Manager, Asset Manager and Investment
Management Manager.
The “Investment Committee” is a committee which formulates fundamental investment policy for the
medium and long term within two fiscal periods, while the “Investment Subcommittee” or “Management
Subcommittee” has charge of decisions on issues regarding acquisitions, dispositions and management of individual assets respectively. The Board of Directors is given the final authorization on acquisitions or dispositionsof individual assets of a certain amount.

Measures to Prevent Conflicts of Interest
TRIM has established the “Compliance Committee” and “Compliance Subcommittee.” The “Compliance
Subcommittee” oversees the aforementioned committees and determines whether their decision-making activities strictly adhere to laws and regulations.
TRIM has rules in place governing transactions with “related parties” so as to avoid conflicts of interest. The
Compliance Committee serves to prevent transactions with conflicts of interest based on the advice of an outside
attorney who is a special member of the committee. Related parties are defined as specific parties with whichtransactions have been made or to which commissions or other payments have been made in the relevant term.
These include the following parties, which have an investment in TRIM or employees serving as directors or
staff at TRIM: Tokyo Tatemono Co., Ltd., The Yasuda Mutual Life Insurance Company, Yasuda Real Estate Co.,
Ltd., Taisei Corporation, Sompo Japan Insurance Inc. (formerly The Yasuda Fire & Marine Insurance Co., Ltd.)and their affiliates.

Such measures include:a) Acquisitions of property or assets from interested parties
The “investment amount” for any real estate or real estate in trust property must be the appraised value orless (deemed to be the purchase price only, exclusive of taxes and acquisition costs, etc.). Prior approval of theBoard of Directors of the Company is required. For other designated assets, the investment amount must be
at market prices for assets for which market prices are available, otherwise at the appraised value or less.
b) Sales of property or assets to interested parties
The “sales price” for any real estate or real estate in trust property must be the appraised value or more(deemed to be sales price only, exclusive of taxes and selling costs, etc.). Prior approval of the Board of
Directors of the Company is required. For other designated assets, the sales price must be at market
prices for assets for which market prices are available, otherwise at the appraised value or more.
c) Leasing of properties to interested parties
Properties may be leased to interested parties provided that leasing is done under appropriate terms andconditions as determined from the viewpoint of market trends and standard leasing terms for the property.
d) Property management commissions to interested parties
Commissions are based on the Property Management Standards. Prior approval of the Board of Directorsof the Company is required.
e) Trading/leasing intermediation fees paid to interested parties
Trading intermediation fees are limited to up to 3% of the trading price. Prior approval of the Board of
Directors of the Company is required. Leasing intermediation fees are limited to the amount equivalent tothe contracted rent for one month.
f) Commissioning of construction work to interested parties
Commissions of construction work worth ¥10 million or more require a comparison against third-party
estimates and proposals. Prior approval of the Board of Directors of the Company is required.
g) Borrowings from interested parties
Terms of borrowings must be at market levels. Prior approval of the Board of Directors of the Company isrequired.
JAPAN PRIME REALTY INVESTMENT CORPORATION

23

JPR 財務11/14 03.11.21 0:13 PM ページ 24

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A LY S I S

The following discussion should be read in connection withthe selected financial data shown on page 3 and with all of

the accompanying financial statements and notes appearing
elsewhere in this report.

RESULTS OF OPERATIONS
The table below shows selected operating information for the periods ended June 30, 2003 and December 31, 2002.

OPERATING REVENUES
Rental revenues

thousands of yen

U.S. dollars

3rd Period(Jan. 1, 2003–
June 30, 2003)

2nd Period(July 1, 2002–
Dec. 31, 2002)

3rd Period(Jan. 1, 2003–
June 30, 2003)

5,264,525

4,972,930

43,944,283

4,898,820

4,568,144

40,891,656

Non-rental revenues

365,705

404,786

3,052,627

OPERATING EXPENSES

3,018,056

2,684,786

25,192,458

OPERATING PROFITS

2,246,469

2,288,144

18,751,825

80,71913,168673,782

NON-OPERATING REVENUESNON-OPERATING EXPENSES

335,842

298,4632,803,351

INCOME BEFORE INCOME TAXES

1,991,346

2,002,849

16,622,256

NET INCOME

1,990,377

2,001,798

16,614,165

The Company receives income primarily from rental revenues
from its office, parking and retail properties including reimbursements from certain tenants for certain operating costs.
The Company’s property holdings for the second fiscal
period, ended December 31, 2002, comprised 27 properties.
The Company’s property holdings as of June 30, 2003, comprised these 27 properties plus one unit ownership acquisition (MS Shibaura Building), one beneficial interest acquisition(Kuraray Nissay Building), and one acquisition (Jinnan 1chome Building). Net operating income (NOI) contribution
from the three additional properties was ¥312 million.
Operating revenues for the six months ended June 30,
2003, JPR’s third fiscal period, totaled ¥5,265 million and comprised rental revenues, common service fees and non-rental
revenues. Non-rental revenues declined due to a decrease inincidental income. Incidental income fluctuates subject tomovements in operating expenses, specifically the actual collection of utility charges. The decline in incidental income
reflects a drop in after-hours air-conditioning charges invoiced

to tenants as a result of unseasonably cool summer weather.
Operating and administrative expenses, including
depreciation of ¥895 million, totaled ¥1,659 million. Repairs
and maintenance expenses for the third fiscal period
increased significantly, as the Company commenced earthquake-proofing maintenance and renovations on the YasudaLife Ikebukuro Building and made repairs to the Asahi-Life
Fukuoka 3rd and 4th Building. Another item affecting operating expenses is taxes on fixed assets, which are recorded as
operating expenses from the fiscal year following purchase of
the property (taxes for the first year are included in the purchase price). As a result of the aforementioned, operating
profits declined ¥42 million, to ¥2,246 million from ¥2,288 million in the previous period.
In non-operating revenues and expenses, interest
expenses rose as a result of an increase in borrowings for theacquisition of new properties.
Accordingly, income before income taxes declined to¥1,991 million and net income to ¥1,990 million.

CASH DISTRIBUTIONS
The cash distribution per unit for the period ended June 30, 2003, was ¥6,873. With 289,600 units outstanding, total cash distributions were ¥1,990 million.
thousands of yen except per unit data

Cash distributions for theperiod ended June 30, 2003

Cash distributions for theperiod ended Dec. 31, 2002

Net Income

1,990,377

2,001,798

Total Cash Distributions

1,990,421

2,001,716

6,873

6,912

Cash Distribution per Unit

24 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR 財務11/14 03.11.21 0:13 PM ページ 25

CAPITALIZATION
Paid-In Capital
For the third fiscal period, ended June 30, 2003, theCompany reported net income of ¥1,990 million and total
unitholders’ equity of ¥58,972 million, with 289,600 units outstanding. (See page 32 and Notes to Financial Statements)
Market Price
The Company was listed on the Tokyo Stock Exchange inJune 2002 under the securities code 8955. The high and low
closing prices for the periods indicated in the table below
were:
yen

Month

June 2002
July 2002
Aug. 2002
Sept. 2002
Oct. 2002
Nov. 2002
Dec. 2002
Jan. 2003
Feb. 2003
Mar. 2003
Apr. 2003
May 2003
June 2003

High

Low

202,000
203,000
205,000
205,000
219,000
240,000
240,000
239,000
227,000
229,000
249,000
283,000
271,000

199,000
200,000
202,000
203,000
203,000
215,000
225,000
220,000
219,000
217,000
227,000
246,000
222,000

Debt Financing
The acquisitions of the MS Shibaura Building, Kuraray Nissay
Building and Jinnan 1-chome Building were funded by anincrease in short-term borrowings. Accordingly, short-termborrowings jumped ¥25.6 billion over the end of the previous
period. The decision to utilize short-term borrowings was
taken as a means to curb finance costs.
Interest-bearing liabilities as of June 30, 2003 stood at¥69.5 billion, with interest-bearing liabilities to total assets
ratio of 47.9%. The Company considers itself to be well positioned to increase borrowings as required. The medium- tolong-term interest-bearing liabilities ratio fell to 57.6%, in linewith the Company’s debt profile.
The average remaining period on the Company’s outstanding debt balance as of June 30, 2003 is 5.1 years,
bearing an average interest rate of 1.2%.

Investment performance of JPR since its IPO on June 14, 2002
Performance (%)

Unit Price (yen)JPR Unit Price Performance (left scale)140

300,000

TOPIX Performance (left scale)130

275,000

JPR Unit Price (right scale)120
250,000
110
225,000
100
200,00090

175,000

80
70
02/6/14150,000
7/1

8/5

9/2

10/7

11/4

12/2

03/1/6

2/3

3/3

4/7

5/5

6/2

JAPAN PRIME REALTY INVESTMENT CORPORATION

25

JPR 財務11/14 03.11.21 0:13 PM ページ 26

Borrowings

Category
Sompo Japan
Insurance Inc.

Balance as ofDec. 31, 2002
(thousands of yen)

Drawdown
Date

LenderBalance as ofJune 30, 2003
(thousands of yen)

June 26, 2002

2,000,000—

Sept. 25, 2002

950,000

950,000

Sept. 30, 2002

980,000

980,000

Mar. 28, 2003—

Average
Interest
Rate

Repayment
Date

1.950%

June 30, 2003

0.584%

Sept. 25, 2003

3,770,000

0.939%

Mar. 27, 2004

Aozora Bank, Ltd.

Short-Term
Borrowings

May 15, 2003—

8,000,000

0.929%

May 14, 2004

Resona Bank, Ltd.

Mar. 28, 2003—

3,000,000

0.939%

Mar. 27, 2004

Mizuho Corporate Bank, Ltd.

June 30, 2003

0.810%

July 31, 2003

Total

Medium-Term
Borrowings

12,800,000
29,500,000

The Chuo Mitsui Trust andBanking Company, Limited

Dec. 27, 2001

10,000,000

10,000,000

1.234%

Dec. 27, 2006

Sumitomo Life
Insurance Company

Dec. 27, 2001

10,000,000

10,000,000

1.234%

Dec. 27, 2006

Resona Bank, Limited

June 19, 2002

2,000,000

2,000,000

1.295%

Dec. 27, 2006

Aozora Bank, Ltd.

June 19, 2002

3,000,000

3,000,000

1.295%

Dec. 27, 2006

25,000,000

25,000,000

Dec. 27, 2001

5,000,000

5,000,000

1.700%

Dec. 26, 2008

June 21, 2002

5,000,000

5,000,000

2.050%

June 21, 2011—

5,000,000

1.750%

Mar. 28, 2013

10,000,000

15,000,000

Total

The Yasuda MutualLife Insurance Company

Long-Term
Borrowings—
3,930,000

Mar. 28, 2003
Total

Repayment
MethodRemarks
Unsecured/
Unguaranteed/
SubordinatedPrincipal
lump sum
repayment
on maturity

Secured/
Unguaranteed/
Non-subordinatedPrincipal
lump sum
repayment
on maturity

Secured/
Unguaranteed/
Non-subordinatedPrincipal
lump sum
repayment
on maturity

Secured/
Unguaranteed/
Non-subordinated

MAJOR TENANTS
The following table shows JPR’s top ten tenants by leased
floor space as of June 30, 2003.
The Company has contracted a special type of long-termlease agreement with its largest tenant, Seiyu, for 20-year
periods in the two buildings it occupies, until February 2015
(Tanashi ASTA) and December 2005 (Tsurumi fuga 1).
Ordinary building leases in Japan are contracted for relatively short periods (generally two years), and renew automatically unless either party gives notice to the contrary. Suchleases also typically allow the tenant to terminate the lease
before expiry of the term, without penalty, with six months#

Tenant1

The Seiyu, Ltd.

2The Loft Co., Ltd.

3The Seibu Department Stores, Ltd.

4

Tohmatsu & Co.

Industryprior written notice. The leases with Seiyu, however, prohibit
termination by the tenant before expiry of the term, and contain provisions requiring payment of damages equivalent to
the rental amount for the remainder of the contract period
should the lease be broken.
JPR continues to strengthen its portfolio by broadening its
tenant base and increasing the percentage of long-term lease
contracts. Specifically, in July 2003, the Company signed
long-term leases with Tower Records Japan Inc. (following
acquisition of the Jinnan 1-chome Building) and The Loft, Co.,
Ltd. (following acquisition of the Kuraray Nissay Building).
Property
Tanashi ASTA

Retail

Accounting Firm

5

Sompo Japan Insurance Inc.

Casualty Insurance

6

Iwatani International Corporation

Wholesale

Tsurumi fuga 1Leased Floor Space(m2)%

40,700.31

21.6

Kuraray Nissay Bldg.

10,282.31

5.4

Jinnan 1-chome Bldg.

8,076.85

4.3

MS Shibaura Bldg.

6,864.79

3.6

6,541.71

3.5

5,959.86

3.2

5,015.78

2.7

Arca East

3,993.50

2.1

MS Shibaura Bldg.

3,922.74

2.1

3,094.50

1.6

Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tokyo Tatemono Honmachi Bldg.
Yasuda-Life Ikebukuro Bldg.
Yasuda-Life Osaka Bldg.

7

The Yasuda Mutual Life Insurance Company

Life Insurance

Yasuda-Life Naha Bldg.
Niigata Ekinan Center Bldg.
Shinyokohama 2nd Center Bldg.

8

Japan Future Information Technology &Systems Co., Ltd.

9

Mitsubishi Electric Information Systems Corporation

10

Kanematsu Electronics Ltd.

26 JAPAN PRIME REALTY INVESTMENT CORPORATIONOther Services

Electronics and Electric Appliances

Kanematsu Bldg.
Kanematsu Bldg. Annex

JPR 財務11/14 03.11.21 0:13 PM ページ 27

CAPITAL EXPENDITURES
Planned Capital Expenditures
Principal capital expenditures during the period under review
relating to repair and improvement of properties and entrusted properties in the Company’s portfolio as of June 30,
Property

Yasuda-Life Ikebukuro Bldg.
JPR Takamatsu Bldg.

2003 are outlined in the following table. The estimated construction amount includes the portion classified as expenses
in the financial statements.

Details

Estimated Construction Amounts(millions of yen)

Period
Total

Payment during
the period

Previously paid
total

Renovation of first floor hall, and 2nd-4th and 7th-9th floor common andleasable areas; upgrade of air-conditioning system and individualadjustment; designer’s supervision; other upgrades and improvements
Renovation of common areas; earth-quake proofing;
upgrade of air-conditioning system

July 2003–Mar. 2004

525

—

—

Aug. 2003–Dec. 2003

73

—

—

Expansion of mechanical parking facility

Feb. 2003–Dec. 2003

58

—

—

Renovation of restrooms on all floors

Aug. 2003–Dec. 2003

37

—

—

Yasuda-Life Hakata Bldg.
Park East Sapporo

Capital Expenditures During the Period Under Review
Capital expenditures made for the Company’s properties andentrusted properties during the period under review are outlined in the following table. Principal expenditures included
earthquake proofing (including design) to improve safety andcomply with new earthquake resistance standards, renova-

Details

PeriodCapital Expenditure(millions of yen)

Earth-quake proofing; renovation of first floor leasable areas and 5th floor common
and leasable areas; upgrade of air-conditioning system and individual adjustment;
designer’s supervision; other upgrades and improvements

Feb. 2003–June 2003

132

Repair of exterior tile, resealing (3rd Bldg.)

May 2003–June 2003

13

Renovation of common areas; construction of IT-ready floors; maintenance to parking facility, air-conditioning,
and fire-prevention equipment

149

Property

Yasuda-Life Ikebukuro Bldg.

tions aimed at maintaining and improving tenant satisfaction,
as well as renovation of common areas and construction of
IT-ready floors in order to attract new tenants. Along with thefollowing, the Company recorded additional repairs and maintenance expenses totaling ¥119 million.*

Asahi-Life Fukuoka 3rd and 4th Bldg.
Other capital expenditures
TOTAL

294

*Repairs and maintenance expenses include the amount for the repair itself, as well as ¥3 million in compensation to the respective real estate companies for management relating to the construction.

SUBSEQUENT EVENTSEvents and other notable items occurring subsequent toJune 30, 2003 (the end of the period under review), included
the issue of new investment units, the acquisition of threeproperties and the divesture of a fourth. Offering of new
investment units was completed on July 14, 2003, and athird-party allotment granted on August 8, 2003, raising
unitholders’ equity to a total of ¥89,113,803,600, and thenumber of outstanding units to 430,000. The Kuraray Nissay
Building in Osaka and the Gotanda First Building in Tokyo
were acquired on July 16 and July 23, respectively, and the
Nagoya Kowa Building in Nagoya acquired on September 1.
The Yasuda-Life Tenroku Building was sold on September 3,
2003.

JAPAN PRIME REALTY INVESTMENT CORPORATION

27

JPR 財務11/14 03.11.21 0:13 PM ページ 28

F I N A N C I A L S TAT E M E N T S

BALANCE SHEETS(As of June 30, 2003 and December 31, 2002)

thousands of yen

U.S. dollars (Note 2)

End of 3rd Period(as of Jun. 30, 2003)

End of 2nd Period(as of Dec. 31, 2002)

End of 3rd Period(as of Jun. 30, 2003)

ASSETS
CURRENT ASSETS:
Cash and bank deposits¥ 19,103,828¥ 12,157,861$ 159,464,343

Rental receivables

63,77460,094532,340

Consumption tax refundable

127,735—

1,066,236

Other current assets

160,065

101,557

1,336,099

19,455,402

12,319,512

162,399,018

Land

73,603,296

49,175,308

614,384,771

Buildings and structures

53,389,709

45,689,809

445,657,002

Machinery and equipment

1,015,212

980,5078,474,224

Total current assets
PROPERTY AND EQUIPMENT AT COST:

Tools, furniture and fixtures

8,584

873

71,654

Construction in progress

16,882

11,928140,919

128,033,683

95,858,425

1,068,728,570(2,518,883)(1,624,277)(21,025,735)

125,514,800

94,234,148

1,047,702,835

10,10010,10084,307Less accumulated depreciation
Net property and equipment
INVESTMENTS AND OTHER ASSETS:
Deposits
Long-term prepaid expenses
TOTAL ASSETS
The accompanying notes form an integral part of these financial statements.

28 JAPAN PRIME REALTY INVESTMENT CORPORATION

9,177

14,70276,604¥144,989,479¥106,578,462$1,210,262,764

JPR 財務11/14 03.11.21 0:13 PM ページ 29

End of 3rd Period(as of Jun. 30, 2003)

thousands of yen

U.S. dollars (Note 2)

End of 2nd Period(as of Dec. 31, 2002)

End of 3rd Period(as of Jun. 30, 2003)

LIABILITIESCURRENT LIABILITIES:
Trade accounts payable¥

772,249¥

434,007$6,446,153

Accounts payable

330,772

264,850

2,761,039

Short-term debt

29,500,000

3,930,000

246,243,740

32,363

7,296

270,143

Accrued expenses
Accrued income taxes
Rent received in advance
Other current liabilities

948

822

7,909

531,244339,236

4,434,424—

79,959—31,167,576

5,056,170

260,163,408

Long-term debt

40,000,000

35,000,000

333,889,816

Deposits received from tenants

14,849,404

7,538,454

123,951,617

Total long-term liabilities

54,849,404

42,538,454

457,841,433

TOTAL LIABILITIES

86,016,980

47,594,624

718,004,841

Unitholders’ capital

56,982,000

56,982,000

475,642,738

Retained earnings

1,990,499

2,001,838

16,615,185

Total current liabilities
LONG-TERM LIABILITIES:UNITHOLDERS’ EQUITYTOTAL UNITHOLDERS’ EQUITYTOTAL LIABILITIES AND UNITHOLDERS’ EQUITY

58,972,499

58,983,838

492,257,923¥144,989,479¥106,578,462$1,210,262,764

JAPAN PRIME REALTY INVESTMENT CORPORATION

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JPR 財務11/14 03.11.21 0:13 PM ページ 30

STATEMENTS OF INCOME AND RETAINED EARNINGS(For the six months ended June 30, 2003 and December 31, 2002)

OPERATING REVENUES:
Rental revenues

thousands of yen

U.S. dollars (Note 2)

3rd Period(Jan. 1, 2003–
Jun. 30, 2003)

2nd Period(Jul. 1, 2002–
Dec. 31, 2002)

3rd Period(Jan. 1, 2003–
Jun. 30, 2003)¥5,264,525¥4,972,930$43,944,283

4,898,820

4,568,144

40,891,656

Non-rental revenues

365,705

404,786

3,052,627

OPERATING EXPENSES:

3,018,056

2,684,786

25,192,458

Property-related expenses

2,553,300

2,307,448

21,313,024

Asset management fees

243,468

236,635

2,032,289

Administrative service fees

51,07765,519426,352

Other operating expenses

170,21175,184

1,420,793

OPERATING PROFITS

2,246,469

2,288,144

18,751,825

80,71913,168673,782

NON-OPERATING REVENUES:Interest income

91

1,092

756

Other non-operating revenues

80,62812,076

673,026

NON-OPERATING EXPENSES:

335,842

298,4632,803,351

Interest expense

320,685

274,087

2,676,836

Loan arrangement fees

15,147

19,393

126,431

10

4,983

84

1,991,346

2,002,849

16,622,256

965

1,040

8,060

Other non-operating expenses
INCOME BEFORE INCOME TAXESINCOME TAXES:
Current
Deferred
NET INCOMERETAINED EARNINGS BROUGHT FORWARD
RETAINED EARNINGS AT END OF PERIOD
The accompanying notes form an integral part of these financial statements.

30 JAPAN PRIME REALTY INVESTMENT CORPORATION

4

11

31

¥1,990,377¥2,001,798$16,614,165

122

40

1,020

¥1,990,499¥2,001,838$16,615,185

JPR 財務11/14 03.11.21 0:13 PM ページ 31

STATEMENTS OF CASH FLOWS (Unaudited)(For the six months ended June 30, 2003 and December 31, 2002)

thousands of yen

U.S. dollars (Note 2)

3rd Period(Jan. 1, 2003–
Jun. 30, 2003)

2nd Period(Jul. 1, 2002–
Dec. 31, 2002)

3rd Period(Jan. 1, 2003–
Jun. 30, 2003)¥ 1,991,346¥ 2,002,849$ 16,622,256

894,606

823,336

7,467,493

CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes
Depreciation
Interest income(91)(1,092)(756)

Interest expense

320,685

274,087

2,676,836

Increase in rental receivables
Decrease (increase) in consumption tax refundable
Increase in prepaid expenses(3,681)(21,636)(30,724)(127,735)

596,493(1,066,236)(6,788)(24,463)(56,658)

338,243(274,196)

2,823,394

Increase (decrease) in accounts payable

86,155(207,369)

719,157

Decrease in accrued consumption taxes(41,770)(5,632)(348,661)

Increase in rent received in advance

192,008

2,693

1,602,737

Decrease in deposits received from tenants(38,189)(287,182)(318,775)

Increase (decrease) in trade accounts payable

Change in other current assets/liabilities
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities(46,198)

5,112(385,630)

3,558,591

2,883,000

29,704,433

91

1,092

756

(295,619)(274,424)(2,467,600)(840)(1,600)(7,012)

3,262,223

2,608,068

27,230,577

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
Purchases of entrusted property and equipment(35,874)(966,304)(299,451)(32,139,384)(1,719,557)(268,275,325)

Payment of leasehold and security deposits received(21,338)(7,674)(178,113)

Proceeds from leasehold and security deposits received

15,256

135,870

127,347

Payment of entrusted leasehold and security deposits received(369,597)(234,488)(3,085,115)

Proceeds from entrusted leasehold and security deposits received

7,686,629

271,352

64,162,173

Payment of leasehold and security deposits

—

(100)

—

(24,864,308)(2,520,901)(207,548,484)

Proceeds from short-term borrowings

27,570,000

1,930,000

230,133,556

Repayment of short-term borrowings(2,000,000)—(16,694,491)

Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from long-term borrowings

5,000,000—

41,736,227

Distributions to unitholders(2,021,948)(701,784)(16,877,693)

Net cash provided by financing activities

28,548,052

1,228,216

238,297,599

NET INCREASE IN CASH AND CASH EQUIVALENTS

6,945,967

1,315,383

57,979,692

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

12,157,861

10,842,478

101,484,651

CASH AND CASH EQUIVALENTS AT END OF PERIOD¥19,103,828¥12,157,861$159,464,343

The accompanying notes form an integral part of these financial statements.

JAPAN PRIME REALTY INVESTMENT CORPORATION

31JPR 財務11/14 03.11.21 0:13 PM ページ 32

STATEMENTS OF CHANGES IN UNITHOLDERS’ EQUITY(For the six months ended June 30, 2003 and December 31, 2002)

BALANCE AS OF JUNE 30, 2002

unitholders’ equity
sharesthousands of yen

289,600

57,719,072

U.S. dollars (Note 2)

Cash distributions paid—

(737,032)

Net income—

2,001,798

289,600

58,983,838

492,352,566—(2,001,716)(16,708,808)

BALANCE AS OF DECEMBER 31, 2002
Cash distributions paid
Net income
BALANCE AS OF JUNE 30, 2003
The accompanying notes form an integral part of these financial statements.

32 JAPAN PRIME REALTY INVESTMENT CORPORATION—

1,990,377

16,614,165

289,600

58,972,499

492,257,923

JPR 財務11/14 03.11.21 0:13 PM ページ 33

NOTES TO FINANCIAL STATEMENTS(June 30, 2003 and December 31, 2002)

1. ORGANIZATION
Japan Prime Realty Investment Corporation (the “Company”),
an externally managed real estate investment corporation,
was incorporated on September 14, 2001 under the Law
Concerning Investment Trusts and Investment Corporationsof Japan, or the Investment Trust Law.
The Company was originally formed by Tokyo Tatemono
Co., Ltd., Taisei Corporation, and Tokyo Realty Investment
Management, Inc. (“TRIM”), and commenced its operation on
November 16, 2001 by acquiring 13 properties. TRIM, alicensed asset management company, provides professional
asset management services of office and retail properties to
the Company. TRIM is currently owned 26% by Tokyo
Tatemono Co., Ltd., 24% by The Yasuda Mutual Life

Insurance Company, 20% by Yasuda Real Estate Co., Ltd.,
20% by Taisei Corporation, and 10% by Sompo Japan
Insurance Inc.
On June 14, 2002, the Company raised ¥25,862 million
through an initial public offering (unitholders’ capital as ofJune 30, 2003: ¥56,982 million) and was listed on the Tokyo
Stock Exchange (Securities code: 8955).
The Company was formed to invest primarily in real estatein Japan. As of June 30, 2003, the Company owned a portfolio of 30 properties containing an aggregate of approximately 201,808.72 square meters of leasable area, andleased its office space to 324 tenants. The occupancy rate is
93.5%.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBASIS OF PRESENTING FINANCIAL STATEMENTS
The Company maintains its accounting records and preparesits financial statements in accordance with accounting principles and practices generally accepted and applied in Japan(“Japanese GAAP”), including provisions set forth in theInvestment Trust Law, the Japanese Commercial Code, theSecurities and Exchange Law of Japan and the related regulations, which may differ in some material respects fromaccounting principles and practices generally accepted incountries and jurisdictions other than Japan.
The accompanying financial statements are a translationof the financial statements of the Company, which were prepared in accordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the
Kanto Local Finance Bureau. In preparing the accompanying
financial statements, certain reclassifications have been madeto the financial statements issued domestically in order topresent them in a format which is more familiar to readers
outside Japan. In addition, the notes to financial statements
include information which might not be required underJapanese GAAP but is presented herein as additional
information.
The Company’s accounting period ends at the end ofJune and December. The Company’s third accounting periodbegan on January 1, 2003 and ended on June 30, 2003.
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of¥119.80=US$1.00, the foreign exchange rate on June 30,
2003, has been used for translation. The inclusion of suchamounts is not intended to imply that Japanese yen havebeen or could be readily converted, realized or settled into
U.S. dollars at that rate or any other rate.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost, less accumulated
depreciation. The costs of land, buildings and building
improvements include the purchase price of property, legal

fees and acquisition costs. Depreciation of property andequipment is calculated on a straight-line basis over the estimated useful lives of the assets ranging as stated as follows:
Buildings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3–60 years
Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10–20 years
Machinery and equipment. . . . . . . . . . . . . . . . . . . . . . . 3–15 years
Tools, furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . 5–15 years
Expenditures for repairs and maintenance are charged tooperations as incurred. Significant renewals and betterments
are capitalized.
REVENUE RECOGNITION
Revenues from leasing of office space are recognized as rent
accrued over the lease period.
TAXES ON PROPERTY AND EQUIPMENT
Property and equipment is subject to property taxes and city
planning taxes on a calendar year basis. These taxes are
generally charged to expense during the period. The sellers of
the properties were liable for property taxes for the calendar
year including the period from the date of purchase by theCompany through the end of the year since the taxes are
imposed on the owner registered in the record as of January
1, based on the assessment made by the local government.
The Company paid the amount equivalent to the property
taxes to the sellers applicable to the period since acquisition
and included the amount equivalent to the taxes in the purchase price of each property and capitalized as cost of theproperty.
CONSUMPTION TAXES
Consumption taxes withheld and consumption taxes paid are
not included in the statements of income. The consumption
taxes paid are generally offset against the balance of consumption taxes withheld. As such, the excess of payments

JAPAN PRIME REALTY INVESTMENT CORPORATION

33

JPR 財務11/14 03.11.21 0:13 PM ページ 34

Investment Trust Law, the Japanese Commercial Code, theSecurities and Exchange Law of Japan and the related regulations. Cash and cash equivalents consist of cash on hand,deposits placed with bank and short-term investments which
are highly liquid, readily convertible to cash and with insignificant risk of price fluctuation, with original maturity of threemonths or less.

over amounts withheld is included in the current assets andthe excess of amounts withheld over payments is included in
the current liabilities.
CASH AND CASH EQUIVALENTS
The statements of cash flows is provided for information purposes only since it is not required to be prepared by the

3. REAL ESTATE
Real estate at June 30, 2003 and December 31, 2002 consisted of the following:

As of June30, 2003
Acquisition Costs

Land

¥

331,677

Buildings

658,986

Accumulated depreciation

18,912

Machinery and equipment

11,227

Accumulated depreciation

1,398

Tools, furniture and fixtures

289

Accumulated depreciation¥

Book Value

Acquisition Costs

331,677¥

325,393

thousands of yen

U.S. dollars

As of December
31, 2002

As of June30, 2003¥

Book Value

Acquisition Costs

325,393$ 2,768,587

629,685
640,0742,768,587

5,500,713

7,425

622,260

11,227
9,829

Book Value$

157,866

5,342,847

93,712559

10,668—

11,66782,045

2,416

17

272

—

—

145

2,271

Entrusted land

73,271,619

73,271,619

48,849,915

48,849,915

611,616,184

611,616,184

Entrusted buildings and structures

52,730,723

Accumulated depreciation

2,356,525

Entrusted machinery and equipment

1,003,985

Accumulated depreciation
Entrusted tools, furniture and fixtures
Accumulated depreciation
Entrusted construction in progress

45,060,124
50,374,198

440,156,289

1,527,362

43,532,762

969,280

141,823

862,162

8,295

19,670,491

420,485,798

8,380,512

88,889880,391873

1,183,830

7,196,682

69,238

208

8,087

43

830

1,736

67,502

16,882

16,882

11,928

11,928140,919

140,919

Total¥125,514,800¥94,234,148$1,047,702,835

4. SHORT-TERM DEBT
Short-term debt at June 30, 2003 and December 31, 2002 consisted of the following:
As of June 30, 2003
Amount(thousandsof yen)Unsecured loans from an insurance company due on June 30, 2003¥

Weightedaverageinterest rate

Amount(thousandsof yen)As of December 31, 2002

As of June 30, 2003

Weightedaverageinterest rate

Amount(U.S. dollars)——¥2,000,000

1.950%

Secured loans from a bank due on September 25, 2003

1,930,000

0.584%

1,930,000

0.571%

16,110,184

Secured loans from banks due on March 27, 2004

6,770,000

0.939%——

56,510,851

Secured loans from a bank due on May 14, 2004

8,000,000

0.929%——

66,777,964

Secured loans from a bank due on July 31, 2003

12,800,000

0.810%——

106,844,741

Total¥29,500,000¥3,930,000$—$246,243,740

5. MEDIUM-TERM DEBT (1 TO 5 YEARS)
Medium-term debt at June 30, 2003 and December 31, 2002 consisted of the following:
As of June 30, 2003
Amount(thousandsof yen)Secured loans from a trust bank and an insurance company due on December 27, 2006
Secured loans from banks due on December 27, 2006
Total

34 JAPAN PRIME REALTY INVESTMENT CORPORATIONAs of December 31, 2002

As of June 30, 2003

Weightedaverageinterest rate

Amount(U.S. dollars)¥20,000,000

1.234%$166,944,908

5,000,000

1.295%

Weightedaverageinterest rate

Amount(thousandsof yen)¥20,000,000

1.234%

5,000,000

1.295%¥25,000,000¥25,000,000

41,736,227$208,681,135

JPR 財務11/14 03.11.21 0:13 PM ページ 35

6. LONG-TERM DEBT (OVER 5 YEARS)Long-term debt at June 30, 2003 and December 31, 2002 consisted of the following:
As of June 30, 2003
Amount(thousandsof yen)Secured loans from an insurance company due on December 26, 2008

Weightedaverageinterest rate

Amount(thousandsof yen)As of December 31, 2002

As of June 30, 2003

Weightedaverageinterest rate

Amount(U.S. dollars)$ 41,736,227¥ 5,000,000

1.700%¥ 5,000,000

1.700%

Secured loans from an insurance company due on June 21, 2011

5,000,000

2.050%

5,000,000

2.050%

41,736,227

Secured loans from an insurance company due on March 28, 2013

5,000,000

1.750%——

41,736,227

Total¥15,000,000¥10,000,000$125,208,681

7. SECURED ASSETSAt June 30, 2003 and December 31, 2002, the following assets were pledged as collateral for the following debt:
Pledged assets:

Cash and bank deposits

thousands of yen

U.S. dollars

As of June30, 2003

As of December
31, 2002

As of June30, 2003¥ 17,614,344¥ 8,762,242$ 147,031,248

Land

73,157,065

42,753,744

610,659,973

Buildings and structures

50,892,478

38,116,814

424,812,005

Machinery and equipment

871,991

721,682

7,278,727

Tools, furniture and fixtures

8,359

—

69,773

Construction in progress

16,882

11,928140,919¥142,561,119¥90,366,410$1,189,992,645

Total

Debt secured by pledged assets:
thousands of yen

U.S. dollars

As of June30, 2003

As of December
31, 2002

As of June30, 2003

Short-term debt

¥29,500,000¥ 1,930,000$246,243,740

Medium- and long-term debt

40,000,000

35,000,000

333,889,816

Total¥69,500,000¥36,930,000$580,133,556

8. UNITHOLDERS’ EQUITY
Under the Investment Trust Law and the related regulations,the appropriations of retained earnings and the declaration ofa cash distribution for the current accounting period aremade by a resolution of the Board of Directors held subse-

quent to the close of such accounting period. As such, theretained earnings of unitholders’ equity at June 30, 2003
included cash distribution of ¥1,990,421 thousand($16,614,531) subsequently made.

9. INCOME TAXESAt June 30, 2003, the Company’s deferred tax assets consisted mainly of the enterprise tax, which is not deductible fortax purposes. The reconciliation of tax rate difference
between the adjusted statutory tax rates and the effective tax
rates for the six months ended June 30, 2003 and December
31, 2002 were as follows:
For the period
from January 1, 2003
to June 30, 2003

For the period
from July 1, 2002
to December 31, 2002

Statutory tax rate

39.39%

39.39%

Deductible dividends distribution(39.37%)(39.37%)

Others

0.03%

0.03%

Effective tax rate

0.05%

0.05%

The Company is subject to Japanese corporate income
taxes on all of its taxable income. However, under the Special

Taxation Measures Law of Japan, or the STML, an investment corporation is allowed to deduct dividends of accounting profits, or dividend distributions, paid to investors from its
taxable income if certain tax requirements are satisfied. Suchtax requirements include dividend distributions in excess of
90% of its taxable income for the accounting period as stipulated by Article 67–15 of the STML. Based on the distribution
policy provided by the Articles of Incorporation, the Company
made a dividend distribution of approximately 100% of
retained earnings in the amount of ¥1,990,421 thousand($16,614,531) at June 30, 2003 and treated it as tax
deductible dividend. The Company will not distribute the dividends in excess of accounting profit under the Articles ofIncorporation.

JAPAN PRIME REALTY INVESTMENT CORPORATION

35

JPR 財務11/14 03.11.21 0:13 PM ページ 36

10. PER UNIT INFORMATION
The following table summarizes information about net assets per share and net income per unit at June 30, 2003 and December
31, 2002, and for the fiscal periods then ended:

Net assets at period-end per unit
Net income per unit

In calculating the net assets per unit, the amount of the
net assets included the cash distribution declared in the subsequent period.
Net income per unit is computed by dividing net incomeby the weighted-average number of units outstanding during

yen

U.S. dollars

For the period
from January 1, 2003
to June 30, 2003

For the period
from July 1, 2002
to December 31, 2002

For the period
from January 1, 2003
to June 30, 2003

¥203,634¥203,673$1,700

6,872

6,912

57

each period. The weighted-average number of units used in
the calculation was 289,600 units for the six months ended
June 30, 2003 and December 31, 2002. Diluted net income
per unit has not been presented since no warrants and convertible bonds were issued during the period.

11. RELATED PARTY TRANSACTIONSThe Company entered into the following related party transactions.

Property management fees

thousands of yen

U.S. dollars

For the period
from January 1, 2003
to June 30, 2003

For the period
from July 1, 2002
to December 31, 2002

For the period
from January 1, 2003
to June 30, 2003

¥118,707¥93,313$990,874

Commissions for property acquisitions

56,00016,500467,446

Leasing commissions

4,512

129

37,663

Outsourced property operation

262,742

262,619

2,193,168

Repairs and maintenance364,770

146,976

3,044,824

12. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
For the six months ended June 30, 2003 and December 31, 2002.
thousands of yen

U.S. dollars

For the period
from January 1, 2003
to June 30, 2003

For the period
from July 1, 2002
to December 31, 2002

For the period
from January 1, 2003
to June 30, 2003

¥5,264,525¥4,972,930$43,944,283

4,898,820

4,568,144

40,891,656

3,795,176

3,562,518

31,679,266

Common area charges

929,753

851,041

7,760,880

Parking revenues

149,986

142,5231,251,974

Other rental revenues

23,905

12,062

199,536

Non-Rental Revenues

365,705

404,786

3,052,627

Incidental income

344,583

388,194

2,876,316

Cancellation charges

3,905

3,350

32,599Other miscellaneous revenues

17,217

13,242

143,712

Property-Related Expenses

2,553,300

2,307,448

21,313,024

Property management fees

125,111

104,500

1,044,335

Utilities expenses

379,307444,611

3,166,170

Property and other taxes

425,826

336,958

3,554,474

Casualty insurance

34,19434,261

285,422

Repairs and maintenance

116,158

52,400969,603

Depreciation

894,606

823,336

7,467,493

Property-Related Revenues
Rental Revenues
Rental revenues

Other rental expenses
Profits

36 JAPAN PRIME REALTY INVESTMENT CORPORATION

578,098

511,3824,825,527¥2,711,225¥2,665,482$22,631,260

JPR 財務11/14 03.11.21 0:13 PM ページ 37

13. LEASESThe Company leases office buildings and earns rent income. As of June 30, 2003 and December 31, 2002, the future lease
revenue under the non-cancelable operating leases are as follows:
thousands of yen

U.S. dollars

As of June 30, 2003

As of December 31, 2002

As of June 30, 2003

Due within one year

¥ 2,276,148¥ 1,863,143$ 18,999,567

Due after one year

17,379,292

15,606,473

145,069,213

Total¥19,655,440¥17,469,616$164,068,780

14. SUBSEQUENT EVENTSADDITIONAL ISSUE OF NEW INVESTMENT UNITSAt the Board of Directors’ meeting held on June 17, 2003,
the Company approved the resolution to issue new units asfollows. The issuance payments were completed on July 14

and August 8, 2003 under the conditions stated below. As aresult of the issuance of additional units, the Company had
total equity of ¥89,113,804 thousands ($743,854,788) with
430,000 units at August 9, 2003.

Public Offering for the Additional Units

Third-Party Allotment (Greenshoe option)(1) Total number of units to be issued(2) Offer price

134,400(1) Total number of units to be issued

6,000¥237,160 per unit

(2) Purchase price(3) Total amount of offer price¥31,874,304,000(3) Gross proceeds(4) Purchase price¥228,859 per unit

(4) Third party

Mizuho Securities Co., Ltd.

(5) Gross proceeds¥30,758,649,600(5) Closing dateAugust 8, 2003

(6) Closing dateJuly 14, 2003

(7) Starting date of computation for cash distributionof the 4th fiscal period

July 1, 2003

¥228,859 per unit
¥1,373,154,000(6) Starting date of computation for cash distributionof the 4th fiscal period

July 1, 2003

JAPAN PRIME REALTY INVESTMENT CORPORATION

37

JPR 財務11/14 03.11.21 0:13 PM ページ 38

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Unitholders of Japan Prime Realty Investment Corporation

We have audited the accompanying balance sheets of Japan Prime Realty Investment Corporation as of June30, 2003 and December 31, 2002, the related statements of income and retained earnings, and changes inunitholders’ equity for the six months ended June 30, 2003 and December 31, 2002, all expressed in yen.
These financial statements are the responsibility of the Company’s management. Our responsibility is to independently express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards, procedures and practices generally accepted
and applied in Japan. Those standards, procedures and practices require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Japan Prime Realty Investment Corporation at June 30, 2003 and December 31, 2002, and theresults of its operations for the six months ended June 30, 2003 and December 31, 2002 in conformity withaccounting principles and practices generally accepted in Japan.
The U.S. dollar amounts in the accompanying financial statements with respect to the six-month period ended
June 30, 2003 are presented solely for convenience. Our audit also included the translation of yen amounts
into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 2
to the financial statements.

Shin Nihon & Co.

Tokyo, Japan
August 19, 2003

See Note 2 to the financial statements, which explains the basis of presentation of the financial statements ofJapan Prime Realty Investment Corporation under Japanese accounting principles and practices.

38 JAPAN PRIME REALTY INVESTMENT CORPORATIONJPR-第三期 P39-40-11/12 03.11.21 11:49 AM ページ 39

U N I T H O L D E R I N F O R M AT I O N

Breakdown of Unitholders (As of June 30, 2003)
By Number of Units Held
Individuals and others

15.1%
Financial institutions

Foreign investors

11.1%

49.7%

Total

100%
Other domestic
corporations

24.1%

By Composition
Financial institutions

Other domestic corporations

0.5%

1.6%
Foreign investors

0.2%
Total

100%
Individuals and others

97.7%

Major Unitholders (As of June 30, 2003)
Units

(%)

Tokyo Tatemono Co., Ltd.

39,300

13.57

The Yasuda Mutual Life Insurance Company

38,000

13.12

Japan Trustee Services Bank, Ltd.

19,412

6.70

Goldman Sachs International

17,538

6.06

The Hiroshima Bank, Ltd.

10,046

3.47

Kawasaki Gakuen

10,000

3.45

The Daisan Bank, Ltd.

8,500

2.94

The Joyo Bank, Ltd.

7,450

2.57

The Bank of Ikeda, Ltd.

7,182

2.48

The Chugoku Bank, Ltd.

6,030

2.08

JAPAN PRIME REALTY INVESTMENT CORPORATION

39JPR-第三期 P39-40-11/12 03.11.21 11:49 AM ページ 40

MEMBERS OF THE BOARD(As of June 30, 2003)

Title

Name
Biography*Number of Investment Units Held

Japan Prime Realty Investment Corporation

Tokyo Realty Investment Management, Inc.

Executive Officer

President and CEO

Hirohito Kaneko*0Dec. 19,2001 Executive Officer of Japan Prime Realty Investment

Toshihiro Hagiwara

Corporation
Representative Counsel (currently on service)of Hirohito Kaneko Law Office
Apr. 1,1977 Bar admission (Tokyo Bar Association)
Shigeru Yamada Law Office
Apr. 1,1979

Mar.28,1992
Apr. 20,1989
Supervising Officer

Sosuke Yasuda*0

Sept. 14,2001 Supervising Officer, Japan Prime Realty Investment
Oct. 1,1999

July 2,1993
Feb. 16,1983
June 27,1980
Dec. 1,1975
Apr. 1,1968

Corporation
Director and Senior Partner (currently on service),
Tokyo Hokuto & Co., (Tokyo Akasaka Audit Co.
and Hokuto Audit Co. merged)
Senior Partner, Tokyo Akasaka Audit Co.
Representative of Tokyo Akasaka CPA Joint Office
Sosuke Yasuda Tax Accountant Office(currently on service)
Masamitsu Serizawa Accounting Firm
Main Store, KK Ohgiya

Sept. 14,2001 Supervising Officer, Japan Prime Realty Investment

July 1,1985
Apr. 1,1968

Kinshicho Project (Tokyo) and led negotiations forcity planning of large-scale development of morethan 28,000m2
Director of Secretary’s Office and Human Resources
Planning of redevelopment scheme connecting
Akihabara and Okachimachi (Tokyo) for JR East
Urban Development Corporation (Joint Venture ofJapan Railway East)
Property management and acquisition businesses of
Building Department
Tokyo Tatemono Co., Ltd.

Director and Chief Financial Officer

Takeshi Maki

*0

July 1, 2001 Director and Chief Financial Officer, Tokyo Realty

Investment Management, Inc.
General Manager of Pension Management Department
Manager of International Investment Department incharge of investments in overseas real estate andfinancing activities
Oct. 1,1989 Investment Banking Division of Paine Webber Japan
Inc. in Tokyo, where he was involved with M&A andIPO businesses
Oct.23,1983 New York representative office of Yasuda Life
Apr. 1 1973 Finance Department of The Yasuda Mutual Life
Insurance Company
Apr. 1,2000
Apr. 1,1991

Supervising Officer

Shigeru Sugimoto*0

Jan.23, 2001 President, Tokyo Realty Investment Management, Inc.
Apr. 1,1999 Director and Head of Osaka Branch OfficeJan. 1,1998 Head of Development Business Department of*0

Corporation
June 1,2001 Auditor, Morimoto Co., Ltd. (currently on service)
Oct. 2,1999 Representative Director of Tokyo SPC Services
June 24,1998
Dec. 1,1996
Dec. 22,1995
July 1,1988
Nov. 1,1985
Apr. 1,1982(currently on service)
Senior Partner (currently on service) of Horwath
Sakura & Co. (ex- Sakura Audit Corporation)
Horwath International
Sakura Audit Corporation
Representative Director of Sakura & Co.
(currently on service)
Ohta Showa Audit Corporation
Housing and Urban Development Public
Corporation

Director and Chief Investment Officer

Yukio Furuya*0

Jan.23, 2000 Director and Chief Investment Officer of Tokyo
Apr. 1,1999
Jan. 1,1998
June 1,1993
Nov. 1,1990
Apr. 1,1981

Realty Investment Management, Inc.
Group leader of the Sales Planning Group
Structured a system of property management services
Tenant-leasing team leader
Took charge of tenant leasing
Tokyo Tatemono of America
Tokyo Tatemono Co., Ltd. Involved in real estate
investment, leasing to tenants and appraisalsof real estate

Director and Chief Administrative Officer

Shuichi Yoneta
Jan.23, 2001 Director and Chief Administrative Officer of Tokyo

Realty Investment Management, Inc.
Manager of Real Estate Planning Group of Real
Estate Department
At the same time, responsible for internal rules,
regulations and legal matters
Apr. 1,1981 The Yasuda Mutual Life Insurance Company
Apr. 1,1998

40 JAPAN PRIME REALTY INVESTMENT CORPORATION*0JPR-第三期 C1-4-11/7 03.11.21 11:55 AM ページ 41

PROFILECORPORATE DATA

Established on September 14, 2001, Japan Prime Realty Investment Corporation
is a closed-end, corporate type fund that invests primarily in

Head Office
9-9 Yaesu 1-Chome, Chuo-ku, Tokyo 103-8285, Japan
Tel: 81-3-3231-1051
Fax: 81-3-3274-7775

high-quality office buildings and retail properties

Date of Establishment
September 14, 2001

located in Tokyo and other major cities in Japan.

Listing
Tokyo Stock Exchange (Securities Code: 8955)

With its geographically diverse portfolio, JPR’s primary objective is to achievesustainable growth and stable cash distributions to its investors.

Fiscal Period Ends
June 30 and December 31 of each year
General Meeting of Unitholders
More than once every two years
Cash Distribution Payment Eligibility
Unitholders of record as of June 30 and December 31 ofeach year
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Location of Records
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo
Main Branch, Stock Transfer Agency Division
Mailing Address Mizuho Trust & Banking Co., Ltd.
1-17-7 Saga, Koto-ku, Tokyo 135-8722
Stock Transfer Agency Division
Telephone+81-3-5213-5213 (Representative)
AgentsMizuho Trust & Banking Co., Ltd.
(All branches nationwide)
Mizuho Investors Securities Co., Ltd.
(Head Office and all branches nationwide)
Note: On March 12, 2003, Mizuho Trust & Banking Co., Ltd. merged with
Mizuho Asset Trust & Banking Co., Ltd., to establish a new trust and banking
entity under the name of Mizuho Trust & Banking Co., Ltd. As a result, Mizuho
Trust & Banking's main branch changed its address on the same date.

Websitehttp://www.jpr -reit .co. jp/jpr_e/index.html

English page
This Website has been createdspecifically for our English-speaking
readers.

Performance
Trends in occupancy rate byarea and purpose; trends ininvestment conditions.
Updated monthly.

FAQ
Answers to commonly asked
questions by our unitholders
and investors are found here.

Investor Relations

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Note: Performance Information Report is prepared pursuant to the Investment Trust Law of Japan.

CONTENTS: To Our Investors 1 Financial Highlights 3 Portfolio Breakdown 5 Activity Highlights 7 Subsequent Activity Highlights 9
Property Portfolio of JPR 10 REIT Structure and External Service Providers 21 Management’s Discussion and Analysis 24 Financial Statements 28
Unitholder Information 39 Members of the Board 40 Corporate Data 41

News releases are posted here as appropriate, as well as
information useful to unitholders and investors in evaluating
the status of JPR, including financial statements and otherlegally mandated reports.

This document contains a translation of selected information described in the Financial Report (Kessan Tanshin) dated February 28, 2003 prepared under the timely disclosure
requirements of the Tokyo Stock Exchange, as well as the Financial Statements and Performance Information Report prepared pursuant to the Investment Trust Law of Japan, for theperiod from January 1, 2003 to June 30, 2003 of Japan Prime Realty Investment Corporation (“JPR”).
This English language document was prepared solely for the convenience of and reference by non-Japanese investors and is not intended to constitute a disclosure document. The
Japanese language Financial Report, Financial Statements and Performance Information Report for the aforementioned period should be referred to as the originals of this document.
English translations for legal, accounting, tax and business concepts used herein may not convey precisely identical concepts of the equivalent Japanese terms. With respect to any
and all terms herein, including without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents
and English documents contained herein, the original Japanese documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc. nor anyof their respective directors, officers, employees, partners, unitholders, agents or affiliates will be responsible or liable for the completeness, appropriateness or accuracy of English
translations or the selection of the portion(s) of any document(s) translated into English. No person has been authorized to give any information or make any representations other thanas contained in this document in relation to the matters set out in this document, and if given or made, such information or representation must not be relied upon as having beenauthorized by JPR, Tokyo Realty Investment Management, Inc. or any of their respective directors, officers, employees, partners, unitholders, agents or affiliates.
The financial statements of JPR have been prepared in accordance with generally accepted accounting principles in Japan (Japanese GAAP), which may materially differ in certain
respects from generally accepted accounting principles in other jurisdictions.
Many provisions of this document contain information that constitute forward-looking statements. These forward-looking statements are not a guarantee of future performance andinvolve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors.

JAPAN PRIME REALTY INVESTMENT CORPORATION

41

JPR-第三期 C1-4-11/7 03.11.21 11:55 AM ページ 1

JPR
Japan Prime Realty Investment Corporation

Third Fiscal Period Business Report
January 1, 2003– June 30, 2003

Printed in Japan