Corporate Profile
Established on September 14, 2001, Japan Prime Realty Investment Corporation (JPR or theCompany) is a closed-end corporate fund that focuses on a geographically diverse investment
portfolio of office and retail properties. Through its investment activities, JPR has been
awarded high credit ratings from rating agencies, reflecting the Company's high-quality
portfolio, earnings stability and sound financial standing. As of December 31, 2007 JPR had aninvestment portfolio totaling 251.90 billion yen on an acquisition basis, 517 tenants and 49
properties, and is recognized as one of the top diversified REITs in Japan.

Contents Investment Highlights

1

Message to Our Unitholders

2

Account Highlights

3

Investment Unit Status

4

New Acquisitions during the 12th Fiscal Period and After

5

Portfolio Topics

6

Property Portfolio

8

Overview of Portfolio Properties

14

Characteristics and Corporate History

20

Overview of the Asset Manager

22

Overview of Asset Management24

Overview of Investment Corporation

31

Status of JPR's Assets under Management

32

Capital Expenditures of Owned Real Estate

36

Expenses and Liabilities

37

Acquisition and Sale during the 12h Fiscal Period

39

Overview of Accounting/Other

41

Balance Sheets

42

Statements of Income and Retained Earnings

44

Statements of Changes in Unitholders' Equity

45

Notes to Financial Statements

46

Report of Independent Auditors

52

Statements of Cash Flows (Information Only)53

JPR Investment Policies (Reference)

55

Investor Information

65

Investment Highlights
Portfolio Overview
・Top-ranked diversified J-REIT・Focusing on high-quality office buildings and popular retail properties
・Sponsored by major real estate developers, a general contractor, etc.

Growth Strategies
・Selective investment in properties with strong potential using diversified acquisition methods
・Leverage sponsor pipeline
・Focus on acquiring additional properties from Tokyo Tatemono, a main sponsor
・Focus on incorporating development projects in which Taisei Corporation, a sponsor,
participates
・Seek growth through rent hikes
・Continue prudent financial strategy that can effectively handle changes in the financial
environment

Management View
・Targets・Asset size exceeding 300 billion yen
・Raise cash distribution per unit

1Message to Our Unitholders
We are delighted to have this opportunity to provide an overview of the asset management andfinancial results of Japan Prime Realty Investment Corporation (JPR) for its 12th fiscal period (July 1,
2007 – December 31, 2007).
The JPR portfolio grew to 49 properties, or 251.9 billion yen on an acquisition basis, this fiscal
period. This was due to the acquisition of Yume-ooka Office Tower for 6.5 billion yen.
We also acquired preferred securities in the Meieki Nichome Kaihatsu Special Purpose Company
during the fiscal period. Acquisition of the securities gives JPR first option to acquire an amountequal to our preferred capital contribution if the asset being backed by the securities is soldafter construction is completed. JPR believes the acquisition of these securities will contribute toincreasing our blue chip assets in the future while helping us avoid excessive market competition.
As for financing, JPR continued to secure a stable financial status by issuing 9 billion yen and 6
billion yen unsecured corporate bonds, with respective maturities of 5 years and 7 years, in July
2007.
As for our financial results, we posted operating revenues of 10,449 million yen and recurring profitsof 4,170 million yen primarily due to the full-period operations of properties acquired during theprevious fiscal period, as well as the contribution of properties acquired during the 12th fiscal period
and enhanced revenue-generating capabilities of existing properties. These efforts and performances
led to net income for the 12th fiscal period of 4,169 million yen.
As a result, the cash distribution per unit was set at 6,671 yen.
Our expectations are that the environment surrounding the industry will continue to be severe. JPR
will continue working with our asset manager, Tokyo Realty Investment Management, to realize
stable growth over the medium to long term through a continued emphasis on a careful selection ofproperties to be acquired while maintaining a consistent focus on compliance.
We ask for your continued understanding and support of our operations.

Hirohito Kaneko
Executive Officer
Japan Prime Realty Investment Corporation2

Account Highlights(All amounts in millions of yen unless otherwise stated)
8th Fiscal Period
ended
December 2005

9th Fiscal Period
endedJune 2006

10th Fiscal Period
ended
December 2006

11th Fiscal Period
endedJune 2007

12th Fiscal Period
ended
December 2007

Operating revenues

8,587

8,588

9,088

10,056

10,449Recurring profits

3,399

3,450

3,643

4,373

4,170

Net income

3,398

3,449

3,642

4,372

4,169

Total cash distributions

3,397

3,449

3,642

4,372

4,169

Total assets

225,882

231,523

244,691

271,398

278,842

Total unitholders' equity

118,829

118,881

119,074

161,098

160,895

52.6%

51.3%

48.7%

59.4%

57.7%

Unitholders' equity per unit (yen)224,206

224,304

224,668

257,757

257,432

Cash distribution per unit (yen)

6,411

6,509

6,873

6,996

6,671

Equity ratio

Operating Revenues and Net Income

12,000Total Assets and Total Unitholders' Equity

30,000Cash Distribution per Unit

8,000

25,000
6,000

9,000
20,0004,000

15,000

6,000

10,000
2,000

3,000
5,000

0

0
8th
9th
10th
11th
12th
Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period

8th
9th
10th
11th
12th
Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period

Operating revenues (million yen)

Total assets (million yen)

Net income (million yen)

Total unitholders' equity (million yen)

8th
9th
10th
11th
12th
Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period

Cash distribution (yen)3Investment Unit Status
Historical Unit Price
Trading Volume (units)
Unit Price (yen)Trading
VolumeUnit
Price580,000

16,000
As of February 8, 2008
Market capitalization: ¥218.12 billion
High: ¥564,000 (May 7, 2007)
Low: ¥199,000 (June 14, 2002)
Unit price at end of 12th Fiscal Period: ¥450,000 (December 28, 2007)

14,00012,000530,000

PO
Offering: ￥449,820

480,000

10,000430,000

8,000

380,000

6,000

330,000

PO
Offering: ￥272,440

4,000

280,000

PO
Offering: ￥237,160

2,000
0
J
e 14 uly 1
, 20
02

Jun

ListedTokyo Stock Exchange
Offering: ￥200,000
July
Jan
July
Jan
. 5,
. 6,
1
1
200
200
4
3

Jan

. 4,

200

5

July

1

Jan

. 4,

230,000

200

6

July

1

Jan

. 4,

200

7

July

1

180,000
. 8,
200
8

Feb

(Note) Unit prices are based on closing prices.

Breakdown of Unitholders at End of Period

Number ofUnitholders

Units

28,000700,000

600,000

500,000

400,000

530,000 units

530,000 units

530,000 units12.32%
65,324 units

10.72%
56,832 units

9.61%
50,975 units

13.96%
74,030 units

13.84%
73,381 units

14.11%
74,822 units
9.88%
52,366 units

625,000 units

625,000 units

8.43%
52,723 units

7.26%
45,388 units

11.93%
74,598 units

11.78%
73,686 units
20,00022.10%
138,141units

24.42%
152,632 units
16,00012.38%
65,647 units

13.57%
71,947 units
12,000300,000

8,000

200,000
63.67%
337,488 units

62.92%
333,491 units

62.96%
333,697 units

57.52%
359,538 units

56.52%
353,294 units
4,000

100,000

0

8th Fiscal Period

9th Fiscal Period

Financial Institutions(including securities firms)

4

24,000ForeignInvestors

10th Fiscal Period
Other Domestic
Corporations(Note) The composition ratio is rounded to two decimal places.

11th Fiscal Period
Individuals

12th Fiscal Period0

Number of Individual
Investors

New Acquisitions during the 12th Fiscal Period and After
Properties Acquired in the 12th Fiscal Period

B 10

Yume-ooka Office Tower(Office)
Location

Yokohama City , Kanagawa
Acquisition Date

July 10, 2007

Acquisition Price￥6,510 million

Site Area

12,011.00m

2Total Floor Space

185,974.87m

Structure2

Floors

S/SRC/RC

B3/27F

Completed

Property to be Acquired in the 15th Fiscal Period

Property to be Acquired in the 14th Fiscal Period
Konan Nichome Building (tentative name)March 1997

A

KM Fukugo Bldg.(tentative name)(Office)(Retail)

Location

Location

Acquisition Date

Acquisition Date

Acquisition Price

Acquisition Price

Minato Ward, Tokyo
December 2008
￥1,870 million

Site Area

Structure

828.82m

2

S

B1/8F

5,138.40m

2Structure

80,309.87m

2FloorsB1/54F

RC

Completed

March 2009

￥9,250 million

Total Floor Space

5,446.77m
FloorsOsaka City, Osaka

Site Area

2

Total Floor SpaceC

Completed

July 2008 (Planned)

March 2009 (Planned)

Preferred Securities acquired in the 12th Fiscal Period and to be Acquired in the 15th and 17th Fiscal Periods
Meieki Nichome Kaihatsu TMK (SPC) Preferred Securities
Investment
AmountAcquisition Date

Acquisition Price(planned)(thousand yen)Preferred Equity
Ration (%) (Note 1)

November 9, 2007

6,120

340,000

3

May 2009 (planned)

24,4801,643,000

12April 2010 (planned)

51,000TBD

25Location
Site Area
Total Floor Space
Structure

S

Completed

Nagoya City, Aichi
7,463.10m (Note2)249,788.45m (Note3)
2FloorsB1/24F

April 2009 (Planned)

Note 1: Figures indicated is the preferred equity ration after the additional capital contribution is made planned on April 2009.
The preferred equity ration as of the end of the 12th Fiscal Period is 4.63%.
2: The site area is owned separately by the SPC and other owner. The above area indicates the total site area of the office building being developed.
3: The total floor area indicates the figure based on recent area table.

5Portfolio Topics
Portfolio Growth
Occupancy rate (%)

100.0

90.0
Total leasable
floor space (m2)

Total acquisition
price (billion yen)

400,000

3,200

350,000

2,800
Total acquisition priceTotal leasable floor space

2,400

300,000

2,000

250,000

1,600

200,000

1,200

150,000

800

100,000

400

50,00000
End ofNov.
2001

End of
Jun.
2002

40.73

92.18

94,935.49

Occupancy
rate (%)

Properties

Total
acquisition
price(billion yen)Total
leasable
floor
space
(m2 )

Total
numberof tenants

End ofJun.
2003

End ofDec.
2003

End ofJun.
2004

End ofDec.
2004

End ofJun.
2005

End ofDec.
2005

End ofJun.
2006

End ofDec.
2006

End ofJun.
2007

End of
Dec.
2007

94.59

125.79139.64163.65179.62

197.65202.66209.22222.48245.39251.90162,739.50

168,987.78

201,808.72

96.3

94.1

93.4

93.5

92.7

93.2

95.1

95.4

97.2

98.0

98.6

99.0

98.4

13

25

27

30

32

38

42

42

42

44

46

48

49

133

281

311

324

357

437

496

459

441

462

479

491

517

End ofDec.
2002

218,734.67 256,329.13

273,330.52 281,408.97 308,205.26 315,156.84 337,382.05 361,574.77 373,609.99(Note 1) When a single tenant leases multiple rooms in the same property, the tenant is counted as one.
If the leased rooms are in multiple buildings, the tenant is counted in plural.
(Note 2) Each sectional owner of Shinjuku Square Tower leases its portions to Shinjuku Square Tower Management Co., Ltd. collectively, and the firm subleases them to
sub-lessees.
Accordingly, the leasable floor space of the building as it relates to JPR's ownership is calculated by multiplying the total contracted areas of offices, shops
and warehouses the management company can sublease to sub-lessees by 39.70457%, the rent allocation ratio of JPR, to arrive at the rent allocated to JPR.
The subleased areas used to calculate the occupancy rate are the subleased areas to sub-lessees multiplied by the rent allocation ratio.
Each figure has been rounded to the second decimal point.
The number of sub-lessees of the Shinjuku Square Tower is also regarded as the number of tenants.
(Note 3) The tenant of Kawasaki Dice Building has sublet space to a sub-lessee and a lease agreement has been executed where the rent paid by the tenant fluctuatesin accordance with the lease conditions of the sub-lessee. Therefore, the total leasable floor space, total leased floor space and occupancy rate entered for thisbuilding are the figures concerning the sub-lessee of the tenant and the number of sub-lessees is deemed to be the number of tenants.
(Note 4) In the event that the contracted area and the area based on which the rent is calculated differ, the situation was handled by making the latter the leased floor
space through the fiscal period ended December 2006. Since the period ended June 2007, the contracted area has been made the leased area.

6

Portfolio Diversification by Region
Tokyo CBDs

Greater Tokyo

Value breakdownby acquisition price

Other Cities
Value breakdownby monthly rental revenue
at period end( ￥78,977 million)

Tokyo CBDs
33.7%

Other Cities
32.3%( ￥520 million)

Tokyo CBDs
37.7%

Other Cities
31.4%( ￥95,001 million)( ￥543 million)

Value breakdownby leased floor spaceat period end

37.5%

Other Cities(138,130.87 m 2)

Greater Tokyo

Greater Tokyo
30.9%(81,966.25 m 2)

Greater Tokyo
40.2%

34.0%

( ￥77,931 million)

Tokyo CBDs
22.3%

(148,074.79 m2 )( ￥547 million)

Portfolio Diversification by Asset Class
Office buildings

Retail properties

Value breakdownby acquisition price

Value breakdownby monthly rental revenue
at period end

Retail properties
37.3%

Office buildings( ￥93,985 million) 62.7%( ￥157,924 million)

Retail properties
30.4%( ￥490 million)

Value breakdownby leased floor spaceat period end

Office buildings
69.6%

Retail properties
43.7%(160,933.96 m 2)

Name of Property

Leased floor area atperiod end (m2)Percentage of totalleased floor area atperiod end( ￥1,122 million)

Office buildings
56.3%(207,237.95 m2)

Major Tenants(As of December 31, 2007)

Tenant＃1

ABC Development Corporation

Housing Design Center Kobe

35,444.13

9.6%

2

The Seiyu, Ltd.

Tanashi ASTA

31,121.71

8.5%

3

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

19,740.95

5.4%

4

The Loft Co., Ltd.

JPR Umeda Loft Bldg.

18,586.97

5.0%

5Tokyo Tatemono Co., Ltd.

Arca East, Kawasaki Dice Bldg.

14,140.03

3.8%

6

Shinjuku Square Tower Management Co., Ltd. Shinjuku Square Tower

11,096.96

3.0%

7Olympic Corporation

Musashiurawa Shopping Square

9,558.51

2.6%

8

Tower Records Japan, Inc.

JPR Shibuya Tower Records Bldg.

8,076.85

2.2%

9Mitsubishi UFJ Lease & Finance Co., Ltd.

JPR Chiba Bldg.,
Mitsubishi UFJ Lease &Finance Nagoya Head
Office Bldg.

7,287.86

2.0%

10

Sompo Japan Insurance Inc.

Kawaguchi Center Bldg.,
Yume-ooka Office Tower
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.

6,959.56

1.9%(Note) The areas of co-owned buildings corresponding to the portions owned by JPR are indicated.

7

Property Portfolio

A Tokyo CBDs

Ueno

B-7

Shinjuku Ward
Shinjuku

A-11

A-12
A-4

A-5
A-9 Chiyoda
Ward
A-4

IchigayaTokyo

Shibuya Ward

Harajuku

A-3

Shibuya

A-3

A-13
A-1
A-8
Chuo Ward A-2
A-1

A-10

A-2

A-11

A-3

A-12

A-4

A-13

A-5

A-1

A-6

A-2

Kanematsu Bldg. Annex

Minato Ward

A-2

JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.

Tamachi

JPR Crest Takebashi Bldg.

A-6

GotandaA-7
OhsakiShinagawa

A-10

A-

Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Bldg.
Across Shinkawa Bldg. Annex
JPR Shibuya Tower Records Bldg.
JPR Daikanyama

MS Shibaura Bldg.

A3

Gotanda First Bldg.

A-4

Fukuoka Bldg.

14th Fiscal Period Acquisition (Planned)

JPR Ichigaya Bldg.

Konan Nichome Building

A-7
A-8
A-9

Shinagawa Ward

JPR Jingumae 432
Shinjuku Sanchome East Bldg.

A-(tentative name)Minamiurawa
Musashiurawa

B Greater Tokyo

B-5

Kawaguchi

B-6
B-3

SAITAMA

B-8

Kinshicho

Kanematsu Bldg.

A-1

TOKYO
TanashiB-1

Ikebukuro

B-1

B-9 Ueno
B-7 B-1

Shinjuku

Tachikawa

CHIBA

Tokyo

Kinshicho

ShibuyaChiba

B-2

ShinagawaMusashikosugi

B-4
KANAGAWA

KawasakiB-6

B-5
Shin-Yokohama
Yokohama

Nihon-Odori

B-10

8

B-3

Kamiooka

B-1 Arca East
B-2 JPR Chiba Bldg.
B-3 JPR Yokohama Nihon Odori Bldg.
B-5 Shinyokohama 2nd Center Bldg.
B-6 Kawaguchi Center Bldg.
B-7 JPR Ueno East Bldg.
B-8 Tachikawa Business Center Bldg.
B-9 Rise Arena Bldg.
B-10 Yume-ooka Office Tower
B-1 Tanashi ASTA
B-3 Cupo-la Main Bldg.
B-4 JPR Musashikosugi Bldg.
B-5 Musashiurawa Shopping Square
B-6 Kawasaki Dice Bldg.

C Other Cities

SAPPORO

C-10

C-1 Niigata Ekinan Center Bldg.
C-7 JPR Hakata Bldg.
C-9 JPR Naha Bldg.
C-10 NORTH 33 Bldg.
C-12 Sompo Japan Sendai Bldg.
C-13 Sompo Japan Wakayama Bldg.
C-14 Tenjin 121 Bldg.
C-16 JPR Nagoya Sakae Bldg.

SENDAI

C-18 JPR Hakata-chuo Bldg.
C-19 Mitsubishi UFJ Lease &

C-12
C-2

NIIGATA

Finance Nagoya Head Office Bldg.

C-1

C-2 Strasse Ichibancho
C-4 Housing Design Center Kobe
OSAKA
See below
KOBE

C-4

FUKUOKA

C-7
C-14
C-18

NAGOYA

C-16
C-19

WAKAYAMA

C-13

NAHA

C-9

C

C-1
Other Cities
C-5(Osaka City) Hankyu_Umeda

Chiyoda Ward
Chuo Ward
Minato Ward

Osaka

C-2

Tokyo CBDs
C-17
Kitahama

All other areas of Tokyo

CC-4

15th Fiscal Period Acquisition(Planned)
C- KM Fukugo Bldg.(tentative name)Shinagawa Ward
Shibuya Ward

Yodoyabashi

C-2 Meiji Yasuda Life Osaka Umeda Bldg.
C-4 Tokyo Tatemono Honmachi Bldg.
C-17 JPR Dojima Bldg.
C-1 JPR Umeda Loft Bldg.
C-3 Benetton Shinsaibashi Bldg.
C-5 JPR Chayamachi Bldg.

Shinjuku Wardand Chiba, Kanagawa andGreater Tokyo

Saitama Prefectures

HonmachiC-3
Shinsaibashi

Nanba

All other areas in Japan

Other Cities* JPR Chayamachi Bldg. is the new name for the former Chayamachi Grande Bldg.
The name change took place on January 1, 2008.

9

Location

Asset

CategoryClass

Property Name

Location

Completed

Acquired

OfficeA-1

Kanematsu Bldg.

Chuo Ward, Tokyo

1993.2

2001.12

OfficeA-2

Kanematsu Bldg. Annex

Chuo Ward, Tokyo

1993.2

2001.12

OfficeA-3

JPR Ningyo-cho Bldg.

Chuo Ward, Tokyo

1989.122001.11

OfficeA-4

Shin-Kojimachi Bldg.

Chiyoda Ward, Tokyo

1984.10

OfficeA-5

JPR Crest Takebashi Bldg.

Chiyoda Ward, Tokyo

1999.92002.6

OfficeA-6

MS Shibaura Bldg.

Minato Ward, Tokyo

1988.2

2003.3

OfficeA-7

Gotanda First Bldg.

Shinagawa Ward, Tokyo

1989.7

2003.7

OfficeA-8

Fukuoka Bldg.

Chuo Ward, Tokyo

1990.5

2003.10
2005.4

OfficeA-9

JPR Ichigaya Bldg.

Chiyoda Ward, Tokyo

1989.3

2004.5

OfficeA-10

Oval Court Ohsaki Mark West

Shinagawa Ward, Tokyo

2001.6

2004.6

OfficeA-11

Shinjuku Square Tower

Shinjuku Ward, Tokyo

1994.10

2004.7

OfficeA-12

BYGS Shinjuku Bldg.

Shinjuku Ward, Tokyo

1985.4

2004.112005.4

OfficeA-13

Across Shinkawa Bldg. Annex

Chuo Ward, Tokyo

1994.6

2004.11RetailA-1

JPR Shibuya Tower Records Bldg.

Shibuya Ward, Tokyo

1992.2

2003.6

RetailA-2

JPR Daikanyama

Shibuya Ward, Tokyo

2002.7

2004.10RetailA-3

JPR Jingumae 432

Shibuya Ward, Tokyo

2006.2

2006.3Retail

A-4

Shinjuku Sanchome East Bldg.

Shinjuku Ward, Tokyo

2007.1

2007.3

OfficeB-1

Arca East

Sumida Ward, Tokyo

1997.3

2001.11

OfficeB-2

JPR Chiba Bldg.

Chiba City, Chiba

1991.1

2001.12

OfficeB-3

JPR Yokohama Nihon Odori Bldg.

Yokohama City, Kanagawa

1989.10

2001.11

OfficeB-5

Shinyokohama 2nd Center Bldg.

Yokohama City, Kanagawa

1991.8

2002.9

OfficeB-6

Kawaguchi Center Bldg.

Kawaguchi City, Saitama

1994.2

2004.2

OfficeB-7

JPR Ueno East Bldg.

Taito Ward, Tokyo

1992.10

2004.3

OfficeB-8

Tachikawa Business Center Bldg.

Tachikawa City, Tokyo

1994.122005.92007.2

OfficeB-9

Rise Arena Bldg.

Toshima Ward, Tokyo

2007.1

2007.3

OfficeB-10

Yume-ooka Office Tower

Yokohama City, Kanagawa

1997.32007.7RetailB-1

Tanashi ASTA

Nishitokyo City, Tokyo

1995.2

2001.11RetailB-3

Cupo-la Main Bldg.

Kawaguchi City, Saitama

2006.1

2006.3Retail

B-4

JPR Musashikosugi Bldg.

Kawasaki City, Kanagawa

1983.32006.9Retail

B-5

Musashiurawa Shopping Square

Saitama City, Saitama

2005.10

2007.3RetailB-6

Kawasaki Dice Bldg.

Kawasaki City, Kanagawa

2003.82007.42001.11～2004.11

～

Tokyo
CBDs

No.

～

Total

Tokyo

Total

10

Notes: (1) Acquisition price does not include miscellaneous expenses of acquisition (real estate transaction brokerage fee and consumption tax).
(2) Percentages and ratios are rounded to the first decimal point.
(3) The ratio of proprietary ownership is shown on the deed for the land.
(4) Cupo-la Main Bldg. and JPR Musashikosugi Bldg. are leased to single tenants.
JPR was unable to obtain the tenants' approval to disclose rental information.

～

GreaterAcquisition

Percentage

Ownership

Site Area

Total Leasable

Occupancy

No. ofRentalPrice (1)of Total(3) (%)(m 2)

Floor Space

Rate (2)Tenants

Revenueof(millions(2)(m 2 )(thousands

Total (2)

(JPR's portion)of yen)of yen)Percentage

16,276

6.5

79.4

1,751.13

7,994.02

97.5

9

470,728

4,5

2,874

1.1

79.4

679.06

2,291.13

100.0

1108,950

1.0

2,100

0.8

100.0

550.062,788.98

100.0

4104,980

1.0

2,420

1.0

77.3

657.802,105.44
901.36312.533,319.33

100.0
100.0
100.0

11

75,54332,15912,260

0.7
0.3
0.1

4,000

1.6

100.0

636.903,265.34

100.0

9143,592

1.4

11,2004.4

36.0

8,992.18

14,429.09

100.0

8

581,455

5.6

2,920

1.2

61.8

1,551.19

4,243.58

100.0

1140,877

1.4

100.0
100.0

1

64,667
41,468

0.6
0.4

2,920

1.2

21.8

1,302.17

1,250.06
687.34
1,937.40

5,100

2.0

100.0

1,058.04

4,186.09100.0

9193,250

1.9

3,500

1.4

27.1

4,006.00

4,088.44

100.0

4188,276

1.8

10,0004.0

29.3

8,409.52

10,982.03

96.3

23

300,738

2.9

11,821

4.7

75.0

3,522.46

11,357.50

98.5

25

484,198

4.6

710

0.3

100.0

858.481,253.39

100.0

451,0700.5

12,0004.8

100.0

1,010.47

8,076.85

100.0

1345,576

3.3

2,160

0.9

100.0

277.12653.9976.6

343,505

0.4

4,460

1.8

100.0

218.21

1,027.33

100.0

588,879

0.9

540

0.2

100.0

2,578.69

478.51100.0

115,9590.2

95,001

37.7

5,880

2.3

41.1

3,755.01

7,022.76

100.0

6296,103

2.8

2,350

0.9

100.0

1,382.35

5,566.59

91.1

29

145,454

1.4

2,927

1.2

100.0

1,100.59

6,066.53

97.2

10

144,358

1.4

920

0.4

50.0

841.712,641.19

100.0

13

75,338

0.7

8,100

3.2

86.5

4,524.61

15,461.98

97.1

39

466,918

4.5

3,250

1.3

100.0

1,242.97

6,512.45

90.9

8

193,514

1.9

100.0

20

59,106
91,5010.6
0.9

82,373.00

3,188

1.3

46.6

2,047.22

1,747.13
2,980.90
4,728.03

5,831

2.3

15.9

9,377.28

6,023.39

100.0

1244,442

2.3

6,510

2.6

19.7

12,011.00

12,042.54

91.1

35

320,142

3.1

10,2004.0

42.1

12,326.30

31,121.71

100.0

1

596,400

5.7

2,100

0.8

7.3

15,008.28

5,963.00

100.0

1(Note 4)(Note 4)

7,260

2.9

100.0

4,761.62

19,740.95

100.0

1

(Note 4)(Note 4)

4,335

1.7

50.0

8,317.99

14,960.69

100.0

3

129,061

1.2

15,0806.0

52.0

4,475.45

13,089.96

99.2

20

486,880

4.7

77,93130.9

96.1

150,941.77

11

Location

Asset

Category

Class

Other
CitiesTotal

No.

Property Name

Location

Completed

Acquired

OfficeC-1

Niigata Ekinan Center Bldg.

Niigata City, Niigata

1996.3

2001.11

OfficeC-2

Meiji Yasuda Life Osaka Umeda Bldg.

Osaka City, Osaka

2000.6

2001.12

OfficeC-4

Tokyo Tatemono Honmachi Bldg.

Osaka City, Osaka

1970.2

2001.11

OfficeC-7

JPR Hakata Bldg.

Fukuoka City, Fukuoka

1985.6

2001.11

OfficeC-9

JPR Naha Bldg.

Naha City, Okinawa

1991.10

2001.11

OfficeC-10

NORTH 33 Bldg.

Sapporo City, Hokkaido

1992.2

2002.6

OfficeC-12

Sompo Japan Sendai Bldg.

Sendai City, Miyagi

1997.12

2002.6

OfficeC-13

Sompo Japan Wakayama Bldg.

Wakayama City, Wakayama

1996.7

2002.6

OfficeC-14

Tenjin 121 Bldg.

Fukuoka City, Fukuoka

2000.7

2002.6

OfficeC-16

JPR Nagoya Sakae Bldg.

Nagoya City, Aichi

2003.1
1986.122003.9

OfficeC-17

JPR Dojima Bldg.

Osaka City, Osaka

1993.10

2004.1

OfficeC-18

JPR Hakata-Chuo Bldg.

Fukuoka City, Fukuoka

1993.2

2004.6

OfficeC-19

Mitsubishi UFJ Lease & Finance
Nagoya Head Office Bldg.

Nagoya City, Aichi

1991.32005.3RetailC-1

JPR Umeda Loft Bldg.

Osaka City, Osaka

1990.4

2003.5-7

RetailC-2

Strasse Ichibancho

Sendai City, Miyagi

2002.10

2005.2RetailC-3

Benetton Shinsaibashi Bldg.

Osaka City, Osaka

2003.2

2005.5RetailC-4

Housing Design Center Kobe

Kobe City, Hyogo

1994.6

2005.9RetailC-5

JPR Chayamachi Bldg.

Osaka City, Osaka

1994.6

2006.8

Building
Parking

Total
Notes: (1) Acquisition price does not include miscellaneous expenses of acquisition (real estate transaction brokerage fee and consumption tax).
(2) Percentages and ratios are rounded to the first decimal point.
(3) The ratio of proprietary ownership is shown on the deed for the land.
(4) The Benetton Shinsaibashi Bldg. and the Housing Design Center Kobe are leased to single tenants.
JPR was unable to obtain the tenants' approval to disclose rental information.

12Percentage

Acquisition

Percentage

Ownership

Site Area

Total Leasable

Occupancy

No. ofRentalPrice (1)of Total(3) (%)(m 2)

Floor Space

Rate (2)Tenants

Revenueof(millions(2)(m 2 )(thousands

Total (2)

(JPR's portion)of yen)of yen)
2,140

0.8

52.7

2,706.99

5,205.82

100.0

10

133,971

1.3

8,300

3.3

33.3

5,999.33

9,600.37

98.4

27

379,879

3.6

4,150

1.6

64.3

1,432.64

7,210.25

98.9

9245,457

2.4

2,900

1.2

100.0

1,214.63

6,581.15

96.0

26

168,446

1.6

1,560

0.6

100.0

959.87

3,947.70

100.0

19

112,869

1.1

3,700

1.5

100.0

1,382.12

6,642.98

98.9

26

161,985

1.6

3,150

1.3

100.0

1,895.67

7,118.60

99.9

17207,452

2.0

1,670

0.7

100.0

1,128.45

4,874.91

96.8

18

121,689

1.2

2,810

1.1

52.2

1,164.39

3,281.12

100.0

13

120,023

1.2

4,550

1.8

100.0

992.31

5,461.90

87.8

19229,591

2.2

2,140

0.8

100.0

668.11

3,941.40

87.0

9116,328

1.1

1,920

0.8

100.0

680.63

3,349.57

92.5

5

87,354

0.8

4,137

1.6

100.0

1,610.38

7,123.07

100.0

1

192,692

1.9

13,0005.2

100.0

3,518.68

18,586.97

100.0

1

402,411

3.9

4,200

1.7

100.0

648.81

4,136.95

100.0

1

128,388

1.2

5,430

2.2

100.0

609.315,303.98

100.0

1(Note 4)(Note 4)

7,220

2.9

100.0

3,994.47

35,444.13

100.0

1

(Note 4)(Note 4)

6,000

2.4

100.0

592.452,484.39

100.0

8

141,744

1.4

78,97731.4

140,295.22

251,909

100.0

373,609.99

98.4

517

10,415,033

100.0

13

Overview of Portfolio Properties (as of Decenber 31, 2007)(Note)
A 1

Kanematsu Bldg.

A 2

Kanematsu Bldg. Annex

Chuo Ward, Tokyo

Chuo Ward, Tokyo

Acquisition Price

Acquisition Price

Site Area

Site Area￥16,276 million
1,751.13m￥2,874 million

Total Floor Space

4,351.46m

14,995.09m

22Structure/Floors

Structure/Floors

Completed

Completed

S/RC/SRC B2/13F
February 1993

A 3

JPR Ningyo-cho Bldg.

SRC B1/8F

February 1993

A 4

Shin-Kojimachi Bldg.

Chuo Ward, Tokyo

Chiyoda Ward, Tokyo

Acquisition Price

Acquisition Price

Site Area

Site Area￥2,100 million
550.06m￥2,420 million

Total Floor Space

5,152.98m

4,117.70m

22Structure/Floors

Structure/Floors

Completed

Completed

SRC/RC B1/8F

December 1989

A 5

JPR Crest Takebashi Bldg.

A 6
Minato Ward, Tokyo
Acquisition Price

Site Area

Site Area￥11,200 million￥4,000 million
636.90m

8,992.18m

2

2

Total Floor Space

31,020.21m

4,790.68m

2Completed

SRC/RC/S B2/13F

SRC B1/9F

A 7

Gotanda First Bldg.

CompletedFebruary 1988

A 8

Fukuoka Bldg.

Shinagawa Ward, Tokyo

Chuo Ward, Tokyo

Acquisition Price

Acquisition Price

Site Area

Site Area￥2,920 million
1,551.19m￥2,920 million

2

Total Floor Space

10,553.34m

1,302.17m

2

Total Floor Space

11,627.74m

2Structure/Floors

Structure/Floors

Completed

Completed

SRC/RC B2/11F(Note) Properties acquired in the 12th Fiscal Period are on page 5

2Structure/Floors

September 1999

14

October 1984

Acquisition Price

Structure/Floors

SRC B1/9F

MS Shibaura Bldg.

Chiyoda Ward, Tokyo

Total Floor Space

657.80m2

2

Total Floor Space

679.06m

2

2

Total Floor Space

July 1989

2

SRC B2/10F
May 1990

A 9

JPR Ichigaya Bldg.

A 10

Oval Court Ohsaki Mark West

Chiyoda Ward, Tokyo

Shinagawa Ward, Tokyo

Acquisition Price

Acquisition Price

Site Area

Site Area￥5,100 million
1,058.04m￥3,500 million
4,006.00m

2

2

Total Floor Space

Total Floor Space

28,575.80m

5,888.82m

22Structure/Floors
Completed

Structure/Floors

SRC B1/9F

Completed

March 1989

A 11

Shinjuku Square Tower

S/SRC B2/17F
June 2001

A 12

BYGS Shinjuku Bldg.

Shinjuku Ward, Tokyo

Shinjuku Ward, Tokyo

Acquisition Price￥10,000 million

Site Area

8,409.52m

2(entire redevelopment project)

Total Floor Space

78,796.00m

2Acquisition Price￥11,821 million

Site Area

3,522.46m

2

Total Floor Space

25,733.10m(entire redevelopment project)

Structure/Floors

Structure/Floors

Completed

Completed

S/RC/SRC B4/30F

SRC B2/14F
April 1985

October 1994

JPR Shibuya Tower Records Bldg.

A 13

Across Shinkawa Bldg. Annex

A(Retail)

Chuo Ward, Tokyo

Acquisition Price

Site Area

Site Area￥710 million
858.48m￥12,000 million
1,010.47m

2

25,535.90m

Total Floor Space

8,449.56m

2Structure/Floors

Structure/Floors

Completed

Completed

S/SRC B2/10F
June 1994A

JPR Daikanyama (Retail)2￥2,160 million

Structure/Floors
CompletedFebruary 1992

A

3

Shibuya Ward, Tokyo

Acquisition Price

Total Floor Space2

SRC/S B3/8F

JPR Jingumae 432(Retail)Shibuya Ward, Tokyo

Site Area

1

Shibuya Ward, Tokyo

Acquisition Price

Total Floor Space2

277.12m

2668.09m2

RC B2/2F
July 2002

Acquisition Price
Site Area￥4,460 million
218.21m

2

Total Floor Space

1,066.81m

2Structure/Floors
Completed

S/SRC B1/7F

February 2006

15

A 4

Shinjuku Sanchome East Bldg. (Retail)B

Arca East

Shinjuku Ward, Tokyo

Sumida Ward, Tokyo

Acquisition Price

Acquisition Price

Site Area

Site Area￥540 million
2,578.69m

2

Total Floor Space

24,617.65m

2Structure/Floors

B

2

2

S/SRC B3/19F
March 1997

B

1,382.35m

29,072.57m

2Site Area￥2,927 million
1,100.59m

2

Total Floor Space

9,146.52m

Structure/Floors

Structure/Floors

Completed

Completed

S/SRC B1/13F
January 1991

B

5

October 1989

B 6

Kawaguchi City, Saitama

Acquisition Price

Acquisition Price￥920 million
841.71m

2

Total Floor Space

7,781.93m

2Site Area￥8,100 million
4,524.61m

2

Total Floor Space

28,420.85m

2Structure/Floors

Structure/Floors

Completed

Completed

S/SRC B2/12F
August 1991

B

JPR Ueno East Bldg.

7

S/SRC B2/15F

February 1994

B

Tachikawa Business Center Bldg.

Taito Ward, Tokyo

8

Tachikawa City, Tokyo

Acquisition Price
Site Area

2

SRC B1/11F

Kawaguchi Center Bldg.

Yokohama City, Kanagawa

Site Area

3

Acquisition Price￥2,350 million

Shinyokohama 2nd Center Bldg.

￥3,250 million
1,242.97m

2

Total Floor Space

8,490.44m

2

16

34,281.86m

Yokohama City, Kanagawa

Acquisition Price

Total Floor Space2

JPR Yokohama Nihon Odori Bldg.

Chiba City, Chiba

Site Area

3,755.01m

Total Floor Space

Completed

January 2007

JPR Chiba Bldg.

￥5,880 million

Structure/Floors

S/SRC/RC B3/14F

Completed1

Acquisition Price
Site Area￥3,188 million
2,047.22m

2

Total Floor Space

14,706.36m

Structure/Floors

Structure/Floors

Completed

Completed

S/SRC B1/8F

October 1992

2

S/SRC B1/12F

December 1994

B 9

Rise Arena Bldg.

Toshima Ward, Tokyo￥5,831 million
9,377.28m

Acquisition Price￥10,200 million

2

Site Area

2

Total Floor Space

12,326.30m

2（including residential tower)

Total Floor Space

91,280.94m

80,675.27m（entire redevelopment project)

Structure/Floors

Structure/Floors

Completed

Completed

RC/SRC/S B3/42F
January 2007

Cupo-la Main Bldg. (Retail)B 3

Acquisition Price￥2,100 million
15,008.28m

2February 1995

B

48,321.96m

Acquisition Price
Site Area￥7,260 million
4,761.62m

2

Total Floor Space

18,394.32m

2Structure/Floors

Structure/Floors

Completed

Completed

January 2006

B

(Retail)March 1983

Kawasaki Dice Bldg. (Retail)5

Saitama City, Saitama

B

Acquisition Price

Site Area

Site Area￥4,335 million
8,317.99m￥15,080 million

2

Structure/Floors
Completed

28,930.36m

2

1

2

August 2003

Meiji Yasuda Life Osaka Umeda Bldg. C

Niigata City, Niigata

2

Osaka City, Osaka

Acquisition Price
Site Area

36,902.01m

S/SRC/RC B2/11F

Completed

October 2005

C4,475.45m

2

Total Floor Space
Structure/Floors

S B1/4F

Niigata Ekinan Center Bldg.

6

Kawasaki City, Kanagawa

Acquisition Price

Total Floor Space2

SRC/RC/S B1/6F

S/RC/SRC B2/10F

Musashiurawa Shopping Square

4

Kawasaki City, Kanagawa（entire redevelopment project)

Total Floor Space

2

SRC B2/17F

JPR Musashikosugi Bldg. (Retail)Kawaguchi City, Saitama

Site Area

1

Nishitokyo City, Tokyo

Acquisition Price
Site Area

B

Tanashi ASTA (Retail)￥2,140 million
2,706.99m

2

Total Floor Space

19,950.42m

2Acquisition Price
Site Area￥8,300 million
5,999.33m

2

Total Floor Space

52,982.94m

Structure/Floors

Structure/Floors

Completed

Completed

S/SRC B1/10F
March 1996

2

S/SRC B2/31F
June 2000

17

Tokyo Tatemono Honmachi Bldg. C

C

JPR Hakata Bldg.

4

Fukuoka City, Fukuoka

Osaka City, Osaka

Acquisition Price

Acquisition Price

Site Area

Site Area￥4,150 million
1,432.64m￥2,900 million
4,214.63m

2

2

Total Floor Space

Total Floor Space

9,828.73m

14,619.52m

Structure/Floors
Completed

2

S/RC B1/12F

Completed

June 1985

February 1970

C

9

C 10

NORTH 33 Bldg.

Naha City, Okinawa

Sapporo City, Hokkaido

Acquisition Price

Acquisition Price

Site Area

Site Area￥1,560 million
959.87m

2

Total Floor Space

5,780.71m

Structure/Floors
Completed2￥3,700 million
1,382.12m

2

Total Floor Space

10,568.23m

Completed

October 1991

C 12

SRC B1/12F

February 1992

C 13

Sompo Japan Wakayama Bldg.

Sendai City, Miyagi

Wakayama City, Wakayama

Acquisition Price

Acquisition Price

Site Area

Site Area￥3,150 million
1,895.67m

2

Total Floor Space

10,783.52m

2￥1,670 million
1,128.45m

2

Total Floor Space

6,715.07m

Structure/Floors

Structure/Floors

Completed

Completed

SRC B1/12F

December 1997

C 14

Tenjin 121 Bldg.

2

Structure/Floors

SRC/S 12F

Sompo Japan Sendai Bldg.

2

Structure/Floors

SRC B3/9F

JPR Naha Bldg.

7

S 9F
July 1996

C 16

JPR Nagoya Sakae Bldg.

Fukuoka City, Fukuoka

2

Nagoya City, Aichi
Acquisition Price￥4,550 million

Acquisition Price
Site Area￥2,810 million

2

Total Floor Space

8,690.95m

Structure/Floors
Building
Parking

Structure/Floors

18992.31m

1,164.39m

2

Total Floor Space

Completed

Site Area

2

S/SRC 13F
July 2000

7,340.18m

Completed
Building
Parking2

S/ B1/11F
S 1F

January 2003
December 1986

C 17

JPR Dojima Bldg.Bldg.

C 18

JPR Hakata-Chuo Bldg.

Osaka City, Osaka

Fukuoka City, Fukuoka

Acquisition Price

Acquisition Price

Site Area

Site Area￥2,140 million
668.11m￥1,920 million

5,696.01m

Total Floor Space

3,874.81m

22Structure/Floors
Completed

SRC B2/9F

October 1993

Mitsubishi UFJ Lease & Finance
Nagoya Head Office Bldg.

C 19￥4,137 million
1,610.38m

2

Total Floor Space

10,201.44m

Structure/Floors
Completed

2

SRC B1/9F

March 1991

C

Strasse Ichibancho (Retail)Completed

SRC 8F

February 1993

C

2

Acquisition Price￥13,000 million

Site Area

3,518.68m

2

Total Floor Space

17,897.56m

Structure/Floors
Completed

SRC B1/8F

April 1990

Acquisition Price

Site Area

Site Area￥4,200 million
648.81m￥5,430 million

3,445.80m

Total Floor Space

5,303.98m

2Structure/Floors

Structure/Floors

Completed

Completed

RC/S B1/8F

October 2002

4

609.31m

2

2

C

3

Osaka City, Osaka

Acquisition Price

Housing Design Center Kobe (Retail)2

Benetton Shinsaibashi Bldg. (Retail) C

Sendai City, Miyagi

Total Floor Space1

Osaka City, Osaka

Acquisition Price
Site Area

Structure/Floors

JPR Umeda Loft Bldg. (Retail)

Nagoya City, Aichi

680.63m

2

2

Total Floor Space2

S B2/10F

February 2003

JPR Chayamachi Grande Bldg.(Retail) C

Kobe City, Hyogo

5

Osaka City, Osaka

Acquisition Price

Acquisition Price

Site Area

Site Area￥7,220 million
3,994.47m￥6,000 million
592.45m

2

Total Floor Space

33,877.71m

2

Total Floor Space

3,219.36m

2Structure/Floors

Structure/Floors

Completed

Completed

SRC/S B2/11F
June 1994

2

S/SRC 9F
June 1994

19

Characteristics and Corporate History
The Objective and Basic Characteristics of JPR
The fundamental investment policy of JPR consists of our investment strategy based on the basic concept of"investing in urban commercial real estate." JPR's investment targets are primarily comprised of superior
office buildings (urban work facilities), retail properties located in thriving commercial areas, the land on
which they are located and asset-backed securities that have such real estate as their primary investment.
JPR makes investments in properties in which we are convinced that the benefits of portfolio management
can be demonstrated after carefully considering the risks and returns of the investment. JPR also diversifies
its investment geographically by not limiting itself to Tokyo but by also considering assets in other major
cities.

Corporate History

20

Date

Description

September 6, 2001

The founder (Tokyo Realty Investment Management, Inc.) filed for establishment of the Investment
Corporation under the Investment Trust Law

September 14, 2001

Japan Prime Realty Investment Corporation was established

November 16, 2001

Started asset management (acquisition of 13 real estate in trust with underlying trust assets of 11
office buildings and 2 commercial properties; ￥40,730 million in total value)

January 22, 2002

Investment unit split (2.5 units for 1 existing unit)

June 14, 2002

Listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange

Members of the Board (As of December 31, 2007)

Executive Officer

Hirohito Kaneko
Dec. 19, 2001 Executive Officer, Japan Prime Realty Investment Corporation
Representative Counsel, Hirohito Kaneko Law Office (currently held position)
Apr. 1, 1979
Bar admission (Tokyo Bar Association), Shigeru Yamada Law Office
Apr. 1, 1977

Supervising Officer

Sosuke Yasuda
Oct. 1, 2006
Jun. 23, 2006
Jun. 28, 2005
Sep. 14, 2001
Oct. 1, 1999
Jul. 2, 1993
Feb. 16, 1983
Jun. 27, 1980
Dec. 1, 1975
Apr. 1, 1968

CPA and Director, Gyosei Audit Corporation (Tokyo Hakuto & Co. merged with Serizawa Accouting Firm)
Outside Auditor, Nomura Research Institute, Ltd. (currently held position)
Outside Auditor, Mitsui Sumitomo Insurance Company, Limited (currently held position)
Supervising Officer, Japan Prime Realty Investment Corporation
Director and Senior Partner, Tokyo Hokuto & Co. (Tokyo Akasaka Audit Co. merged with Hokuto
Audit Co. ) (currently held position)
Senior Partner, Tokyo Akasaka Audit Co.
Representative, Tokyo Akasaka CPA Joint Office
Sosuke Yasuda Tax Accountant Office (currently held position)
Masamitsu Serizawa Accounting Firm
Main Store, KK Ohgiya

Supervising Officer

Masato Denawa
Sep. 15, 2007
Jul. 10, 2007
Feb. 23, 2005
Jul. 1, 2003
Apr. 1, 2002
Jun. 21, 2000
Jan. 1, 1999
Apr. 1, 1991
Apr. 1, 1990

Supervising Officer of Japan Prime Realty Investment Corporation
Director of Advicelink Co., Ltd. (currently held position)
Part-time auditor of Ulvex Inc. (currently held position)
Partner attorney at Spring Partners (former Okinobu, Ishihara & Sei Law Office) (currently held position)
Adjunct professor (part-time) at Keio University Faculty of Law (Civil law practice) (currently held position)
Part-time auditor of Kinkan Co., Ltd. (currently held position)
Partner of Okinobu, Ishihara & Sei Law Office
Okinobu, Ishihara & Sei Law Office (former Okinobu & Ishihara Law Office)Registered with Daiichi Tokyo Bar Association at Okinobu & Ishihara Law Office21

Overview of the Asset Manager
Corporate Profile
Name

Tokyo Realty Investment Management, Inc. (TRIM)

Core Business

Asset management for investment corporation

Capitalization

350 million yen

Shareholders

Tokyo Tatemono Co., Ltd. (26%)
Meiji Yasuda Life Insurance Company (24%)
Taisei Corporation (20%)
Yasuda Real Estate Co., Ltd. (20%)
Sompo Japan Insurance Inc. (10%)

History

April 28, 2000: Founded
October 13, 2000: Approved for real estate transaction service
March 16, 2001: Approved as discretionary transaction agent
June 20, 2001: Approved for asset management of investment corporation
September 30, 2007: Registered as investment management business

Services(1) Asset management for JPR (including all decision-making in connection with the acquisition/dispositionor leasing of properties and acting as an agent or broker of such transactions based on relevant
evaluation and judgement)(2) Funding by JPR(3) Reporting to JPR(4) Any other services related to or affiliated with the above

Organization
Shareholders Meeting
Auditors
Board of Directors
CEO
Investment Committee

Investment Management
Division

ResearchGroup

Investment
Group

Asset
Management
Group

Compliance Committee

Corporate Plannig /Financial Division

FinancialGroup

Investor
RelationsGroup

Administration Division

FundManagement
Group

Corporate
Planning
Group

Acciunting /HumanResouseGroup

ComplianceGroup

TRIM's Decision-Making Process of Investment Management

The Investment Committee (including the Due Diligence Subcommittee) was established to make investment management
decisions and has the Investment Subcommittee and Fund Management Subcommittee below it. Members of thesecommittees and subcommittees include the CEO, CIO, CFO, CAO. However, regarding the Due Diligence Subcommittee, adirector in charge of Compliance Group and a manager of the Group, etc. are also included to enhance compliance in due
diligence for the targeted investment asset.
The Board of Directors is responsible for the targeted investment assets and policies. The Investment Committee
formulates management plans, while the Investment Subcommittee is in charge of decisions on issues regarding theacquisition and disposition of individual assets. The Fund Management Subcommittee is responsible for issues regarding
the management of individual assets. The Board of Directors is given the final decision-making powers on the acquisitionand disposition of individual assets greater than a certain value.

22

Directors of Tokyo Realty Investment Management, Inc.
President and Chief Exective Officer (CEO)Toshihiro Hagiwara

Jan. 23, 2001
Apr. 1, 1999
Jan. 1, 1998
Mar. 28, 1992
Apr. 20, 1989
Jul. 1, 1985
Apr. 1, 1968

President, Tokyo Realty Investment Management, Inc.
Director and Head of Osaka Branch Office
Head, Development Business Department of Kinshicho Project (Tokyo); led negotiations
for city planning of large-scale developments of more than 28,000m2
Director, Secretary's Office and Human Resources
Planning of redevelopment scheme connecting Akihabara and Okachimachi (Tokyo) for JR
East Urban Development Corporation (joint venture with The East Japan Railway Company)
Property management and acquisition businesses of Building Department
Joined Tokyo Tatemono Co., Ltd.

Director and Chief Administrative Officer (CAO)

Kazuo Kitami

Oct. 1, 2004
Apr. 1, 1997

Apr. 1, 1995
Sep. 1, 1989
Apr. 1, 1977
Apr. 1, 1975

Director and Chief Administrative Officer, Tokyo Realty Investment Management, Inc.
Manager, Credit Assessment Dept. 2 of the Management and Administration Division; Responsible
for loan administration and credit administration involved in the bulk sale of non-performing
loans and participated in self-assessment and formulation of the insurance investigation manual;Manager, Loan Administration between August 2000 and March 2003, responsible forloan-related accounting
Manager of Real Estate Development and responsible for overall operations
Manager of Real Estate Development Dept. of the Real Estate Division; involved in real estate
investment activities, property leasing and property management
Asset Management Division (loans, real estate and other), engaged in loan front office
operations and participated in the establishment of a leasing subsidiary
Joined the Yasuda Mutual Life Insurance Company (currently Meiji Yasuda Life Insurance Company)

Director and Chief Investment Officer (CIO)

Seiji Miwa

Mar. 30, 2006
Oct. 1, 2004
Jul. 1, 2003
Jan. 1, 2000

Jul. 1, 1998

Apr. 1, 1991
Apr. 1, 1989
Apr. 1, 1983

Director and Chief Investment Officer
General Manager, Investment Management Division (responsible for Asset Management Group)
Joined Tokyo Realty Investment Management, Inc.
Engaged in activities relating to the establishment of a J-REIT; appointed Group Leader, responsible
for preparations for the establishment of an asset manager and Japan Prime Realty Investment
Corporation; appointed a member of a J-REIT project team responsible for the acquisition ofassets for the Tokyo Tatemono Group and growing the portfolio up to the public listing; during thisperiod, assumed responsibility for the development of real estate investment structures including
real estate syndications and structured finance; participated in forming structures for investment
and development using SPCsManager, Investment Service Department (currently the Investment Management Division);
responsible for the securitization of serviced apartments, establishment of Takanawa Apartments
Inc. (SPC), which was Japan's first real estate securitization project, the formulation of securitizationplans, the issuance of real estate securities and obtaining a credit rating from Standard & Poor's
for the issuance of qualified bonds
Assistant Manager, Development Department 1
Assigned to Development Department 1
Joined Tokyo Tatemono Co., Ltd.

Director and Chief Financial Officer (CFO)

Yasuo Furuya

Jun. 9, 2006
Apr. 28, 2006
Apr. 1, 2006
Jan. 1, 2004
Apr. 1, 2000
Oct. 21, 1998
Apr. 1, 1997
Apr. 1, 1995
Apr. 1, 1984

Apr. 1, 1983
Apr. 1, 1980

Director and Chief Financial Officer
Chief Financial Officer
Tokyo Realty Investment Management, Inc.
Group Manager, Risk Management of Meiji Yasuda Life Insurance Company
Manager, Investment Risk Management Department
Manager, Investment Planning & Research Department
Manager, Investment Administration Department
Manager, Investment Planning & Research Department
Following completion of outside assignment, transferred to the asset management operations of
The Yasuda Mutual Life Insurance Company; spent eight years in securities investment operations
engaged in interest rate analysis, as well as the establishment of bond investment and asset
management companies; undertook activities related to variable insurance securities management
and oversaw securities investment activities as Chief Bond Trader; later, gained further experience instock market investment operations
Joined the Medium and Small Business Research Institute
Joined the Yasuda Mutual Life Insurance Company (currently Meiji Yasuda Life Insurance Company)

23

Overview of Asset Management(1) Operational Performance of JPR

Unit

Operating Revenues
Real estate rental revenues
Gain on sale of real estate

Million yen

9th
8th
Fiscal Period Fiscal Period(July 1, 2005 - (Jan. 1, 2006 Dec. 31, 2005) June 30, 2006)

11th
12th
Fiscal Period Fiscal Period(Jan. 1, 2007 - (July 1, 2007 June 30, 2007) Dec. 31, 2007)

8,587

8,588

9,088

10,056

10,449

8,372

8,552

9,056

9,496

10,415

214

Dividends received

Operating
Performance

10th
Fiscal Period(July 1, 2006 Dec. 31, 2006)

530
35

31

30

34

4,602

4,564

4,714

4,948

5,443

Million yen

4,044

4,013

4,151

4,315

4,816

Operating Profits

Million yen

3,984

4,024

4,373

5,108

5,006

Recurring Profits

Million yen

3,399

3,450

3,643

4,373

4,170

Net Income

Million yen

3,398

3,449

3,642

4,372

4,169

Total Assets

Million yen

225,882

231,523

244,691

271,398

278,842(% Change)%(+4.3)(+2.5)(+5.7)(+10.9)(+2.7)

Interest-bearing Debt

Million yen

90,966

97,466

109,466

92,966

99,683

Total Unitholders' Equity

Million yen

118,829

118,881

119,074

161,098

160,895(+0.0)(+0.0)(+0.2)(+35.3)(−0.1)

Operating Expenses
Real estate rental expenses
Loss on sale of real estate

Assets, etc.

(% Change)

Cash
Distribution
per Unit, etc.

%

Unitholders' CapitalMillion yen

115,431

115,431

115,431

156,725

156,725

Total Cash Distributions

Million yen

3,397

3,449

3,642

4,372

4,169

Dividend payment ratio

%

99.9

100.0

100.0

99.9

99.9

Number of Units Outstanding

Units

530,000

530,000

530,000

625,000

625,000

Total Unitholders' Equity per Unit

Yen

224,206

224,304

224,668

257,757

257,432

6,411

6,509

6,873

6,996

6,671

6,411

6,509

6,873

6,996

6,671

1.5

1.5

1.5

1.7

1.5

3.0

3.0

3.0

3.4

3.0

2.9

2.9

3.1

3.1

2.6

5.7

5.9

6.1

6.3

5.1

118,807

118,829

118,881

119,074

161,098

Cash Distribution per Unit
Distribution amount

Yen

Exceeding profit distribution amount

Recurring Profits on Total Assets (Note 1)
Annualized (Note 10)

Return on Total Unitholders' Equity (Note 2-1)
Annualized (Note 10)

Total unitholders' equity at beginning of
period (Note 2-2)
Unitholders' Equity Ratio at End of Period (Note 3)%%

Million yen%(Year-on-year increase/decrease)

Financial
IndicesInterest-Bearing Debt to Total Assets at End
of Period (Note 4)%

DSCR (Note 5)
Net income before interest
and amortization

Million yen

Interest paid (Notes 6)

NOI from Leasing (Note 7)
Annualized NOI yield (Notes 9 and 10)

NCF from Leasing (Note 8)
Annualized NCF yield (Notes 9 and 10)

Reference
Information

Million yen%
Million yen
%

52.6

51.3

48.7

59.4

57.7

(-2.3)(-1.3)(-2.7)(+10.7)(-1.7)

40.3

42.1

44.7

34.3

35.7

9.6

9.7

8.8

8.8

8.4

5,261

5,585

5,891

6,230

6,789

545

574

668

705

809

5,860

6,100

6,485

6,863

7,407

5.6

5.9

5.8

5.5

5.8

5,381

5,785

6,053

6,476

6,826
5.4

5.2

5.6

5.4

5.2

Properties Owned (Note 11)

42

44

46

48

49

Number of Tenants

441

462

479

491

517

Total Leasable Floor Spacem2

308,205.26

315,156.84

337,382.05

361,574.77

373,609.99

Occupancy Rate

%

97.2

98.0

98.6

99.0

98.4

(Note 1) Recurring profit / (total assets at beginning of period + total assets at end of period) / 2(Notes 2-1 and 2-2) Net income / (total unitholders' equity at beginning of period + total unitholders' equity at end of period) / 2(Note 3) Total unitholders' equity at end of period/total assets at end of period x 100(Note 4) Interest-bearing debt / total assets at end of period x 100(Note 5) Net income before interest and amortization (excluding gain or loss on sale of real estate) / interest paid
(Note 6) Interest paid in this table includes interest on corporate bonds(Note 7) (Real estate rental revenues - real estate rental expenses) + depreciation(Note 8) NOI from leasing - capital expenditures(Note 9) Annualized NOI from purchase price of property (8th fiscal period: ￥205.76 billion, 9th fiscal period : ￥209.22 billion, 10th fiscal period : ￥222.48 billion, 11th
fiscal period: ￥250.56 billion and 12th fiscal period: ￥251.90 billion)
Annualized NCF from leasing / purchase price of property(Note 10) Annualization is based on 365 days for a year and calculated by using the following management days: 8th fiscal period : 184 days, 9th fiscal period : 181 days,
10th fiscal period : 184 days, 11th fiscal period:181 days and 12th fiscal period : 184 days
(Note 11) Shin-Kojimachi Bldg., Fukuoka Bldg., BYGS Bldg., Tachikawa Business Center Bldg. and JPR Umeda Loft Bldg. were acquired at multiple times but are calculated
as one property.
(Note 12) In the event that the contracted area and the area based on which the rent is calculated differ, the situation was handled by making the latter the leased floor
space through the fiscal period ended December 2006. Since the period ended June 2007, the contracted area has been made the leased area.
(Note 13) Any ratio indicated on financial indices are rounded to the first decimal point (except for the dividend payment ratio, which is rounded off to the first decimal point.)24

(2) 12th Fiscal Period Asset Management
1) Milestones of JPR
Japan Prime Realty Investment Corporation (JPR) was established on September 14, 2001 under theInvestment Trusts and Investment Corporations Law (hereafter, the Investment Trusts Law), and was listedon the Tokyo Stock Exchange Real Estate Investment Trust Section (securities code: 8955) on June 14,
2002, with 289,600 outstanding investment units. JPR made its third additional public offering in February
2007bringing the number of investment units issued and outstanding to 625,000 units. JPR has assigned
the asset management of its portfolio to Tokyo Realty Investment Management Inc., through which JPR aims
to maximize unitholder value by efficiently managing the portfolio of office buildings and retail properties.

2) Management Environment
The Office Building Leasing Market
In Japan, the corporate sector has enjoyed sustained buoyancy. Given this background, robust demand has
continued for office space in Tokyo and core regional cities leading to vacancy rates remaining at low levels.
There is an immense shortage of young large buildings in Tokyo CBDs and their vacancy rate has continued
to stay below 2%. Young large properties have led increases in rents ahead of others, but the rise is showing
a stagnating trend partly because demand has come to a ceiling for new leases and increased floor areas bysome blue-chip companies that can afford to pay high rents. Nevertheless, properties other than those thatare young and large tend to enjoy increases in rents for new and continuing lease contracts. On the other
hand, rents as a whole have generally stopped falling in core regional cities and the rising of rents in somecities has become conspicuous.

The Retail Property Leasing Market
Although the Japanese economy is gradually expanding, the expansion has not spread to households andpersonal consumption remains flat.
Under these circumstances, there have been diverse changes in the retail market in recent years including
reviewing of nationwide expansion of stores and retreating from suburban stores, while the preference forurban stores strengthened and demand rose for stores in good locations of the central parts of major cities.
With consumption lacking dynamism, there is a need to continue to pay careful attention to market trends.

The For-Sale Real Estate Market
The competition in the real estate for-sale market remains intense.
The appetite for investment among private funds, J-REITs and others remains high in central Tokyo but theactual opportunities for investment are limited due to a lack of blue-chip properties and soaring prices.
At the same time, there are some cases in which the sale of certain properties is being sought as difficulties
have arisen in fund raising due to the stir in the financial market triggered by the subprime issues.

3) Portfolio Management Status
New Property Acquisitions by JPR
JPR has continued to acquire properties based on a rigorous standard for selecting excellent office buildings
and retail properties that can generate stable cash flow and possess the potential for future rent increases.
JPR's key strategy in expanding our portfolio has been to stabilize portfolio earnings and balance thediversification of the portfolio both by location and asset class. JPR has been emphasizing the acquisitionof properties in Tokyo and 5 major cities (Osaka, Nagoya, Fukuoka, Sendai and Sapporo). During the 12th
fiscal period, we acquired Yume-ooka Office Tower (6,510 million yen). As a result, the balance of assets
under management now totals 49 properties, or 251.9 billion yen on an acquisition price basis as of the endof December 2007. The total leasable floor space is now 373,609.99m2 and the number of tenants is 517.
In addition, JPR focused on acquiring projects in development, and concluded a purchase agreement on
Konan Nichome Building (tentative name), which is scheduled to be completed in July 2008, at 1.87 billion
yen. The planned acquisition date is December 2008.
Moreover, JPR acquired Meieki Nichome Kaihatsu SPC Preferred Securities at 340 million yen during the
fiscal period. JPR has also concluded an agreement to additionally acquire the preferred securities in thenext month following completion of the office building of Nagoya Prime Central Project (tentative name)(scheduled for May 2009) and one year after the completion of the property (completion scheduled forApril 2010), which supports the preferred securities. Eventually, JPR will acquire 40% of the equity of the
SPC (the equity ratio after implementation of additional capital contribution scheduled for April 2009).
This arrangement allows JPR to obtain the right to acquire equity of the property equivalent to its ratio of
the preferred securities, in the event of sales of the property backing the preferred securities.

25

Operational Management of Portfolio
As in the previous fiscal period, JPR has sought to firmly materialize internal growth of the overall portfolio
by focusing measures on maintaining high occupancy rates and measures to expand rents. During this fiscal
period, JPR strove to raise contracted rents with new tenants and to raise rents of existing tenants at thetime of renewal.
��Occupancy Rate
JPR strove to improve service levels for both the physical property and services, and successfully
maintained an overall occupancy rate of 98.4% for the portfolio that existed at the end of the 12th fiscal
period – almost the same level of occupancy rate as the preceding fiscal period.
��Rent Renewals
JPR has continuously sought increased rents upon the renewal of rental contracts in Tokyo CBDs andGreater Tokyo with the objective of raising them to the levels of new rental contracts. Consequently, JPR
successfully raised rents during renewals of rental contracts in 42 cases this fiscal period.
��Renovations
As a means to increase revenues, JPR is conducting renovations at Yume-ooka Office Tower that was
acquired during the fiscal period, where the top floor used for a restaurant is being converted to officespace. At JPR Hakata Building, construction to renovate air conditioning systems has been completed tosignificantly enhance the adaptability, convenience and comfort.

Fund Procurement
During this fiscal period, JPR further steadied financial stability by raising long-term capital in the
expansion of our portfolio through unsecured corporate bonds at a fixed interest rate with an eye on
avoiding future interest hike risks and by spreading out the repayment maturity dates of borrowings.
As a result, the balance of total outstanding borrowings as of the end of the fiscal period was 38.18 billion
yen, with unsecured corporate bonds of 61.5 billion yen. Of these, long-term interest-bearing debt withrepayment periods of more than one year that hedged against risk of future interest rate hikes now
comprises 90.0% of all interest-bearing debt and the average maturity (Note 1) is 5.0 years.
Additionally, with regards to JPR's overall interest-bearing debt, the average interest as of the end of the
fiscal period (Note 2) is 1.6%, the interest-bearing debt ratio (Note 3) is 38.9% and the LTV (interest-bearing
debt to total assets ratio) at the end of the period (Note 4) is 35.7%.
The following represents the issuer ratings for JPR as of the end of this fiscal period.
In addition, on January 16, 2008, Standard and Poor’s (S&P) raised the issuer rating for JPR from A- to A forthe long-term rating and from A-2 to A-1 for the short-term rating.

Details of Corporate Credit Ratings as of December 31, 2007
Ratings Agency

Corporate Credit Rating

Rating and Investment Information, Inc.

AA- (Stable)

Moody's Investor Services

A2 (Stable)

Standard & Poor's

Long-term: A- (Positive)
Short-term: A-2(Note 1) Average maturity of long-term interest-bearing debt is arrived at by calculating a weighted average of maturities from the end of
the 12th fiscal period to the repayment deadlines for long-term interest-bearing debt with repayment periods of more than one
year, based on the balance of each debt.
(Note 2) Average interest is arrived at by calculating a weighted average of interest rates as of the end of the 12th fiscal period based on thebalance of each debt.
(Note 3) Interest-bearing debt ratio (%): interest-bearing debt/(interest-bearing debt + unitholders' capital) x 100 (unitholders' capital:
156.72 billion yen)
(Note 4) Interest-bearing debt to total assets ratio at end of period (%): interest-bearing debt/total assets at end of period x 100 (total assets
at the end of the 12th fiscal period: 278.84 billion yen)26

(3) Additional Offerings, etc.
The table below indicates additional offerings, etc. in the 12th fiscal period and prior to the 11th fiscal period.
Date

Number of Units Outstanding Unitholders' Capital (million yen)

Event

September 14, 2001 Established by private placement
November 16, 2001 Additional private placement

Balance

Remarks

Variation

Balance

Variation

240

240

120

120

(Note 1)62,00062,24031,00031,120(Note 2)January 22, 2002

Split of investment units

93,360155,600-

31,120(Note 3)June 14, 2002

Initial public offering

134,000

289,600

25,862

56,982(Note 4)

July 15, 2003

Additional public offering

134,400

424,000

30,75887,740(Note 5)

August 9, 2003

Third-party allotment

6,000

430,000

1,373

89,113(Note 6)

February 2, 2005

Additional public offering

95,000525,000

25,001

114,115(Note 7)

March 2, 2005

Third-party allotment

5,000

530,000

1,315

115,431(Note 8)February 6, 2007

Additional public offering

90,000620,000

39,120154,552(Note 9)March 7, 2007

Third-party allotment

5,000

625,000

2,173

156,725(Note 10)

JPR was formed by the investment of three companies -- Tokyo Tatemono Co., Ltd. (100 units), Taisei Corporation (100 units), andTokyo Realty Investment Management, Inc. (40 units) -- at 500,000 yen per unit.
(Note 2) An additional offering was made via private placement at 500,000 yen per unit. JPR then acquired 13 beneficiary interests in realestate trust and started management.
(Note 3) A single investment unit was split into 2.5 units.
(Note 4) New investment units were issued through public offering at 200,000 yen per unit (underwriting price of 193,000 yen per unit) to
repay short-term debt, finance the acquisition of new specific assets and the like.
(Note 5) New investment units were issued through public offering at 237,160 yen per unit (underwriting price of 228,859 yen per unit) to
repay short-term debt, acquire new specific assets, etc.
(Note 6) New investment units were issued through a third-party allotment at 228,859 yen per unit to repay short-term debt, acquire new
specific assets, etc.
(Note 7) New investment units were issued through public offering at 272,440 yen per unit (underwriting price of 263,177 yen per unit) to
repay short-term debt, acquire new specific assets, etc.
(Note 8) New investment units were issued through a third-party allotment at 263,177 yen per unit to repay short-term debt, acquire new
specific assets, etc.
(Note 9) New investment units were issued through public offering at 449,820 yen per unit (underwriting price of 434,673 yen per unit) to
repay debt, acquire new specific assets, etc.
(Note 10) New investment units were issued through a third-party allotment at 434,673 yen per unit to repay debt, acquire new specific assets, etc.
(Note 1)

(4) Cash Distributions
Under the Special Taxation Measures Law of Japan, an investment corporation is allowed to deduct dividends ofprofits paid to investors from its taxable income. In order to have the maximum amount of dividend distribution
deducted, JPR decided to distribute all the retained earnings for the 12th fiscal period except for fractional
portions that make distributions per unit less than 1 yen. As a result, the cash distribution per unit for the 12th
fiscal period was set at 6,671 yen.
(Thousands of yen unless otherwise indicated)

Date
Retained Earnings at End of Period
Internal Reserves
Total Cash Distributions(cash distribution per unit)
Total Cash Distributions from Net Income(cash distribution from net income per unit)
Repayment of Paid-in Capital(repayment of paid-in capital per unit)

8th
Fiscal Period

9thFiscal Period

10th
Fiscal Period

11th
Fiscal Period

12th
Fiscal Period

3,398,137

3,449,967

3,642,765

4,372,752

4,169,727(as ofDecember 31,2005)(as ofJune 30, 2006)(as ofDecember 31,
2006)(as ofJune 30, 2007)(as ofDecember 31,
2007)

307

197

75

252

352

3,397,830

3,449,770

3,642,690

4,372,500

4,169,375(6,411 yen)

(6,509 yen)

(6,873 yen)

(6,996 yen)

(6,671 yen)

3,397,830

3,449,770

3,642,690

4,372,500

4,169,375(6,411 yen)

(6,509 yen)

(6,873 yen)

(6,996 yen)

(6,671 yen)

-

-

-

-

-

(- yen)(- yen)(- yen)(- yen)(- yen)275) Future Management Policy and Vital Issues
The forecast for the future of the Japanese economy is that the corporate sector will maintain its buoyancy,
which will continue to sustain a slow and steady recovery.
However, there is a need to take special note of uncertainties including the stir in the financial and capital
market triggered by the subprime issues, the impact of crude oil prices on the Japanese and overseas
economies, and fluctuations in interest rates and exchange rates.
The outlook of the U.S. economy is becoming increasingly opaque, and it is necessary to fully understandand analyze its impact on the Japanese economy, which is highly reliant on overseas demand.
The office leasing market is experiencing phenomenal demand nationwide and both new rents andcontinuing rents are continuously increasing particularly in Tokyo CBDs, although the increases in newrents enjoyed to date at Class A properties in the CBDs of major cities have started to hit a ceiling, as rents
have exceeded the level companies can bear.
As for the for-sale real estate market, transaction prices have continued to stay at a high level centering onTokyo CBDs. In particular, price hikes of scarce blue-chip properties are not likely to stop for some time,as acquisition demand is increasingly concentrated on such properties. On the other hand, there are somemovements to exit investments through the sale of properties in which competitiveness is questionable.
These facts have led JPR to believe that a bipolar trend will be strengthened in the Japanese real estatemarket.
As a result of these conditions, JPR will proceed with management that exercises caution regarding thefollowing matters as we strive to maximize unitholder value while also taking note of economic and interest
rate trends.

1. Acquisition of New Properties
JPR will implement the following policy while emphasizing our investment policy, increasing
distributions per unit, etc.; striving to improve stability through location and asset classdiversification; and improving investment efficiency through an expansion in the portfolio size.
*JPR will focus its investment on Tokyo and the five other major cities of Osaka, Nagoya,Fukuoka, Sendai and Sapporo and focus on acquiring properties with strong future potential
and competitiveness from a perspective of medium to long-term management. In considering
properties, JPR will strive to acquire properties under appropriate terms by emphasizing thegeographic superiority and future potential of properties while negotiating price based on adetailed market studies and property appraisals.
*JPR will proactively gather information on development-type properties, exit projects of
securitization etc, to ensure a planned acquisition of superior properties and endeavor tosecure properties at an early stage through detailed research and risk analysis to heighten ourcompetitiveness in the acquisition process.
*As for the information channels for available properties, JPR will strive to acquire blue-chipproperties by endeavoring to expand its unique information channels while also collaborating withsponsor companies of JPR's asset manager, Tokyo Realty Investment Management, Inc. (TRIM),
which are Tokyo Tatemono Co., Ltd., Taisei Co., Ltd. and Meiji Yasuda Life Insurance Company.
*JPR is committed to increasing the opportunities to acquire blue-chip properties byemphasizing transaction terms that can eliminate excessive price competition including
negotiation transactions, tightly run bids, etc.
JPR will continue to strive to expand our portfolio by acquiring solid new properties via a proactive
collection of information and carefully researched investment value including determining the future
potential by accurately grasping market trends.

28

2. Management of Portfolio
JPR will promote internal growth by continuously negotiating for increases in rents with existing
tenants while striving to provide high quality services in both operations and facilities including
tenant services and renovations built around the “JPR Brand Strategy,” and a comfortable officeenvironment.
・Brand strategy
In addition to measures it has taken to date, JPR is working to steadily spread and entrench highquality services both in operations and facilities based on our brand concept of “A/3S (Amenity/
Service, Safety and Save Energy). Two of the measures recently initiated are the issuance of the JPR
Brand Report to real estate management companies and building maintenance companies, and theholding of brand workshops.
Additionally, JPR will work to improve customer satisfaction and heighten the quality of its
properties by feeding back the results of continual tenant satisfaction studies to our tenant services
team. Meanwhile, JPR will endeavor to save energy in operations as well as in facilities through theintroduction of energy-saving equipment.
・Renovations
JPR will implement maintenance and renovation work in a planned manner based on the property
lifecycle and a medium- to long-term maintenance and repair plan established for each property.
Furthermore, JPR will proactively implement renovations of entrances, rest rooms and other areas
seeking to create highly competitive buildings that can compete against new properties, as well as therenewal of air conditioning systems and other construction that helps enhance customer satisfaction.
・Measure to increase rents
Continuing on from the 12th fiscal period, measures to increase rents will be given material
importance in the 13th fiscal period. JPR will work to secure a rent level set as an objective forcontracted rents with new tenants and proactively take steps to raise rents with existing tenants upon
the renewal of rental contracts centering on Tokyo CBDs and Greater Tokyo. Moreover, JPR will also
implement measures to achieve increased rents in local cities.
・Cancellation by tenant at Strasse Ichibancho
JPR has received notification concerning cancellation of a lease contract from a tenant at Strasse
Ichibancho, a retail property in Sendai City owned by JPR. Accordingly, JPR will quickly work tosecure a tenant to fill the vacancy.

(6) Fund Procurement
JPR's fundamental policy for fund procurement calls for an efficient combination of long-term steady fundprocurement and short-term fund procurement that emphasizes dynamism. In line with this policy, JPR
will procure funds unsecured and unguaranteed bank borrowings and issuance of corporate bonds. JPR willcontinue to focus on the diversification of fund procurement means and consistently strive to diversify thematurities.

(7) Information Disclosure
JPR has positioned the proactive voluntary disclosure of information as one of its key management policies
and will voluntarily disclose information believed to be essential to investment decisions to JPR alongwith the timely disclosure of items to the Tokyo Stock Exchange. JPR is proactively employing its website(http://www.jpr-reit.co.jp/) as a vital means for implementing voluntary disclosure and, to date, JPR has
promptly disclosed performance information and run movies on its primary properties using this site. We
are committed to further enriching our information disclosure activities.

29

(8) Important Facts Arising after the Settlement
There are no material subsequent events for this fisical period.

30

Overview of Investment Corporation(1) Unitholders' Capital

8th Fiscal Period
as ofDecember 31, 2005

9th Fiscal Period
as ofJune 30, 2006

10th Fiscal Period
as ofDecember 31, 2006

11th Fiscal Period
as ofJune 30, 2007

12th Fiscal Period
as ofDecember 31, 2007

Total number of authorized units

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Total number of units issued
and outstanding

530,000

530,000

530,000

625,000

625,000

Unitholders' capital (millions of yen)

115,431

115,431

115,431

156,725

156,725

Total number of unitholders

19,70917,316

15,60417,002

15,089(2) Primary Investors

The following table shows the 10 largest investors according to the percentage of their owned investment units to the total
number of units outstanding as of the end of the 12th fiscal period.

Name

Number of
Owned Units

Address

Japan Trustee Services Bank, Ltd.
Nikko Citi Trust and Banking Corporation
Trust & Custody Services Bank, Ltd.
Tokyo Tatemono Co., Ltd.
Northern Trust Company (AVFC)AccountShingapore Clients (Standing proxy:
Hongkong and Shanghai Banking
Corporation Limited, Tokyo Branch)
Kawasaki Gakuen
Meiji Yasuda Life Insurance Company
The Master Trust Bank of Japan, Ltd.

Percentage
of Total Units
Outstanding (%)

Chuo Ward, Tokyo
Shinagawa Ward, Tokyo
Chuo Ward, Tokyo
Chuo Ward, Tokyo

48,73444,45532,97329,300

7.80
7.11
5.28
4.69

London, UK(Chuo Ward, Tokyo)

27,246

4.36

Kurashiki City, Okayama
Chiyoda Ward, Tokyo
Minato Ward, Tokyo

25,00024,00021,655

4.00
3.84

UBS AG London Asia Equities(Standing Proxy: UBS Securities Japan Ltd.)

London, UK(Chiyoda Ward, Tokyo)

14,628

2.34

North Pacific Bank, Ltd.

Sapporo City, Hokkaido
Total

3.46

14,312

2.29

282,30345.17(3) Items Related to Directors

A. The Executive Officer, Supervising Officers and Independent Auditors as of the end of the 12th fiscal period are as follows.
Position
Executive Officer

Name

Other Current Assignments

Total Directors'
NumberFee duringof Ownedthe 12th Fiscal PeriodUnits(thousands of yen)

Hirohito Kaneko (Note 4) Representative Counsel, Hirohito Kaneko Law Office

2,300

Senior Partner, CPA, Accountant andShigeru Sugimoto
Real Estate Appraiser, Horwath Sakura & Co.
(Note 3) Representative Director, Sakura & Co.
Supervising
Officers (Note 1)

Sosuke Yasuda

Accountant, Sosuke Yasuda Tax Accountant Office
CPA and Director, Gyosei Audit Corporation

4,000(Note 4) Outside Auditor, Mitsui Sumitomo Insurance Company, Limited
Outside Auditor, Nomura Research Institute, Ltd.

Masato Denawa (Note 4) Partner Attomey, Spring Partners
Independent
Auditor (Note 2)

Ernst & Young
ShinNihon

13,000(Note 1) Supervising officers may be directors of corporations other than those indicated above, but have no conflict of interest with JPR at those and the above positions.
(Note 2) The independent auditor fees include fees regarding auditing of JPR's English financial statements, fees regarding creation of comfort letters for additional offering of new investment
units regaeding Eight and Nineth Series of Unsecured Corporate Bonds.
(Note 3) Shigeru Sugimoto resigned as of due to termination of scheduled term.
(Note 4) Masato Denawa was selected at the General Meeting of Unitholders held on September 5, 2007 and Executive Officer Hirohito Kaneko and Supervising Officers Sosuke Yasuda wasreassigned at the same meeting.

B. Policy on Dismissing and Deciding Not to Reappoint the Independent Auditor

The dismissal of independent auditors shall be considered in accordance with the designations of the Investment
Trust Law. The decision to not reappoint the auditor shall be studied at JPR’s Board of Directors Meetings following
comprehensive consideration of circumstances including audit quality, audit fee and other various conditions.

(4) Asset Manager, Asset Custodian and Administrative Agent

The asset manager, asset custodian and administrative agents of JPR at the end of the 12th fiscal period are as follows.
Outsoursing Category

Name

Asset management company

Tokyo Realty Investment Management, Inc.

Asset custodian

Mizuho Trust & Banking Co., Ltd.

Administrative agent(Administration, etc. concerning
unitholders of record, etc.)

Mizuho Trust & Banking Co., Ltd.

Administrative agent(administration concerning
corporate bonds)

Mizuho Trust & Banking Co., Ltd.
Mizuho Securities Co., Ltd.
Mizuho Corporate Bank, Ltd.
Shinkin Securities Co., Ltd.
Merrill Lynch Japan Securities Co., Ltd.
Nomura Securities Co., Ltd.

31

Status of JPR's Assets under Management(1) JPR's Asset Structure
Asset TypeReal estate

Real estate in trustArea

11th Fiscal Period(as of June 30, 2007)

12th Fiscal Period(as of December 31, 2007)

Assets owned
by JPR(thousands of yen)

Percentage of
total assets (%)

Assets owned
by JPR(thousands of yen)

Percentage of
total assets (%)

Tokyo CBDs

16,588,551

6.1

16,562,518

5.9Greater Tokyo

21,817,044

8.0

28,384,976

10.2

Other Cities

16,009,799

5.9

15,843,873

5.7

Tokyo CBDs

77,047,897

28.4

76,671,239

27.5

Greater Tokyo

47,826,866

17.6

47,521,071

17.0

Other Cities

61,255,988

22.6

61,018,608

21.9

1,558,460

0.6

344,651

0.1

10.8

32,495,148

Preferred securities

29,294,219

Deposits and other assets(

Total assets

)

(

)

(

)

11.7
(

)

271,398,827

100.0

278,842,087

100.0(240,546,148)(88.6)(246,002,287)(88.2)(Note 1) Total assets owned are based on the amounts appropriated on the balance sheet as of the settlement date (book values after depreciation for real estate and real estate in trust).
(Note 2) Figures in parenthesis are portions that practically fall on real estate owned in the object assets.
(Note 3) For separation of areas, refer to PP 8 -9(Note 4) Various survey expenses ( 779,811 thousand yen for the 11th fiscal period and 479,755 thousand yen for the 12th fiscal period ) are appropriated in deposits and other assets
as construction in progress in this table.
(Note 5) JPR owned 8,490 units of 84,900 units of preferred securities issued by Kawasaki Dice TMK (with preferred securities of 10.0%), but with the liquidation completed as of
October 31, 2007, the preferred securities has been repaid. In addition, JPR owns 6,120 units of 132,093 units of preferred securities issued by Meieki Nichome Kaihatsu
SPC (with preferred securities of 4.63%). Furthermore, the value arrived at by multiplying the amounts of real estate and others on Meieki Nichome Kaihatsu SPC’s balance
sheet on it’s latest settlement period was 725,852 yen.

(2) Major Assets Owned by JPR
The following is an overview of the major assets (ten largest properties by book value at end of period)
owned by JPR as of the end of the 12th fiscal period.
Book Value(thousandsof yen)Property Name

Leasable Floor
Space (m2)

Leased Floor
Space (m2)Occupancy
Rate (%)

Rate of Monthly
Contracted Rent
at End of Period (%)

Asset Class

Kawasaki Dice Bldg.

15,498,019

13,089.96

12,981.11

99.2

4.0

RetailKanematsu Bldg.

15,430,346

7,994.02

7,793.18

97.5

4.5

OfficeJPR Umeda Loft Bldg.

12,819,670

18,586.97

18,586.97

100.0

4.2

RetailBYGS Shinjuku Bldg.

11,961,250

11,357.50

11,189.67

98.5

4.6

OfficeJPR Shibuya Tower Records Bldg.

11,818,159

8,076.85

8,076.85

100.0

3.7

RetailMS Shibaura Bldg.

11,181,358

14,429.09

14,429.09

100.0

5.5

OfficeShinjuku Square Tower

9,686,570

10,982.03

10,579.38

96.3

3.1

OfficeTanashi ASTA

8,735,275

31,121.71

31,121.71

100.0

6.3

RetailKawaguchi Center Bldg.

7,756,905

15,461.98

15,017.39

97.1

4.5

OfficeMeiji Yasuda Life Osaka Umeda Bldg.

7,495,678

9,600.37

9,444.39

98.4

3.6

OfficeTotal

112,383,234

140,700.48

139,219.74

98.9

43.8

(Note 1) Rate of monthly contracted rent at end of period is the rate arrived at by dividing the monthly contracted rent at end of period for each property by the total rents for all properties.
(Note 2)The tenant of Kawasaki Dice Bldg. has sublet space to a sub-lessee and a lease agreement has been executed where the rent paid by the tenant fluctuates in accordance with the leaseconditions of the sub-lessee. Therefore, the leasable floor space, leased floor space and occupancy rate entered for this building are the figures concerning the sub-lessee of the tenant.
(Note 3) Each sectional owner of Shinjuku Square Tower leases its portions to Shinjuku Square Tower Management Co., Ltd. collectively, and the firm subleases them to sub-lessees.
Accordingly, the leasable floor space of the building is calculated by multiplying the total contracted areas of offices, shops and warehouses which the company rents and can subleaseto sub-lessees by 39.70457%, the rent allocation ratio of JPR. The subleased areas used to calculate the occupancy rate are the subleased areas to sub-lessees multiplied by the rent
allocation ratio. Each figure has been rounded to the second decimal point.

32

(3) Acquired Properties
A. Real estate and other acquired properties

The overview of the real estate and beneficiary interest in real estate in which JPR invests are as follows.
Location

Asset

CategoryClass

Property Name

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.

(additional acquisition in 2nd fiscal period )Asset TypeBook Value(as of Dec. 31,
2007)(thousands of yen)Appraisal Value(as of Dec. 31, 2007)(thousands of yen)

Chuo Ward, Tokyo

Beneficiary Interest

15,430,346

16,900,000

Chuo Ward, Tokyo

Beneficiary Interest

2,616,012

3,300,000

Chuo Ward, Tokyo

Beneficiary Interest

1,974,010

2,710,000

Location

1,654,999
Chiyoda Ward, Tokyo

Beneficiary Interest(additional acquisition in 6th fiscal period)

OfficeTokyo

JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
Fukuoka Bldg.

(additional acquisition in 7th fiscal period )CBDsRetailOfficeGreater

OfficeOther
CitiesRetailChiyoda Ward, Tokyo

Beneficiary Interest

3,722,655

4,010,000

Minato Ward, Tokyo

Beneficiary Interest

11,181,358

19,600,000

Shinagawa Ward, Tokyo

Beneficiary Interest

2,775,783

3,980,000

Beneficiary Interest

1,799,396

Real Estate

1,156,054

Chuo Ward, Tokyo

3,110,000

Chiyoda Ward, Tokyo

Beneficiary Interest

5,235,213

Shinagawa Ward, Tokyo

Beneficiary Interest

3,414,426

4,500,000

Shinjuku Ward, Tokyo

Beneficiary Interest

9,686,570

13,900,000

Shinjuku Ward, Tokyo

Real Estate

11,961,250

12,300,000

Chuo Ward, Tokyo

Real Estate

679,941

1,090,000

Shibuya Ward, Tokyo

Beneficiary Interest

11,818,159

15,500,000

Shibuya Ward, Tokyo

Real Estate

2,219,377

1,740,000

Shibuya Ward, Tokyo

Beneficiary Interest

4,582,405

4,650,000

Shinjuku Ward, Tokyo

Real Estate

Arca East
JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.
JPR Ueno East Bldg.
Tachikawa Business Center Bldg.

Sumida Ward, Tokyo
Chiba City, Chiba

Rise Arena Bldg.
Yume-ooka Office Tower

Retail3,410,000

204,542JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Bldg.
Across Shinkawa Bldg. Annex
JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432
Shinjuku Sanchome East Bldg.

(additional acquisition in 11th fiscal period )Tokyo

575,358

Tanashi ASTA
Cupo-la Main Bldg.
JPR Musashikosugi Bldg.
Musashiurawa Shopping Square
Kawasaki Dice Bldg.

5,550,000

545,894

563,000

Beneficiary Interest

5,178,206

7,340,000

Beneficiary Interest

2,427,543

1,930,000

Yokohama City, Kanagawa Beneficiary Interest

2,643,660

2,730,000

Yokohama City, Kanagawa Real Estate

905,532

1,630,000

Kawaguchi City, Saitama

Beneficiary Interest

7,756,905

10,800,000

Taito Ward, Tokyo

Real Estate

3,226,270

5,410,000

Tachikawa City, Tokyo

Beneficiary Interest
Real EstateToshima Ward, Tokyo

Real Estate

848,286
2,302,299
5,810,598

3,940,000
8,090,000

Yokohama City, Kanagawa Real Estate
Beneficiary Interest
Nishitokyo City, Tokyo

6,612,025

6,620,000

8,735,275

13,300,000

Kawaguchi City, Saitama

Real Estate

2,052,127

2,800,000

Kawasaki City, Kanagawa Real Estate
Saitama City, Saitama
Beneficiary Interest

7,476,121
4,433,174

7,080,000

Kawasaki City, Kanagawa Beneficiary Interest

15,498,019

15,392,000

4,420,000

Niigata Ekinan Center Bldg.

Niigata City, Niigata

Beneficiary Interest

1,866,895

2,210,000

Meiji Yasuda Life
Osaka Umeda Bldg.

Osaka City, Osaka

Beneficiary Interest

7,495,678

11,200,000

Tokyo Tatemono Honmachi Bldg.
JPR Hakata Bldg.
JPR Naha Bldg.
NORTH 33 Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Nagoya Sakae Bldg.
JPR Dojima Bldg.

Osaka City, Osaka

Beneficiary Interest

4,118,636

4,270,000

Fukuoka City, Fukuoka

Beneficiary Interest

3,258,622

3,190,000

Naha City, Okinawa

Beneficiary Interest

1,457,420

1,710,000

Sapporo City, Hokkaido
Sendai City, Miyagi

Beneficiary Interest

3,513,655

2,960,000

Beneficiary Interest

2,721,813

4,320,000

Wakayama City, Wakayama Beneficiary Interest
Fukuoka City, Fukuoka
Beneficiary Interest

1,469,787

1,970,000

2,549,557

3,180,000

Nagoya City, Aichi

Real Estate

4,535,382

6,190,000

Osaka City, Osaka

Beneficiary Interest

2,154,027

2,900,000

JPR Hakata-chuo Bldg.

Fukuoka City, Fukuoka

Beneficiary Interest

1,881,851

2,360,000

Mistubishi UFJ Lease & Finance
Nagoya Head Office Bldg.

Nagoya City, Aichi

Real Estate

4,043,024

5,040,000

Osaka City, Osaka

Beneficiary Interest

12,819,670

16,300,000

Sendai City, Miyagi

Beneficiary Interest

4,042,992

3,820,000

Osaka City, Osaka

Beneficiary Interest

5,514,277

6,280,000

Kobe City, Hyogo

Real Estate

7,265,466

8,070,000

Osaka City, Osaka

Beneficiary Interest

6,153,721

5,730,000

Total

246,002,287

299,995,000

JPR Umeda Loft Bldg.
Strasse Ichibancho
Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
JPR Chayamachi Grande Bldg.

(Note 1) The calculated values at end of period are either appraisal values or survey values by real estate appraisers, based on the Cabinet Office Order on " Regulations on calculations ofinvestment corporations."(Note 2) Aside from properties indicated in the table above, JPR owns 6,120 units of 132,093 units of preferred securities issued by Meieki Nichome Kaihatsu SPC (with preferred securitiesof 4.63%). Furthermore, the value arrived at by multiplying the amounts of real estate and others on Meieki Nichome Kaihatsu SPC's balance sheet on it's latest settlement
period fiscal period was 725,825 thousand yen.

33

History of Rental Business for Each of JPR's Real Estate and BeneficiaryInterest in Real Estate Investments
Location
Category

Asset
Class

11th Fiscal Period (from Jan. 1, 2007
to June 30, 2007)

Property Name

Number OccupancyofTenants Rate (%)

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.

RetailOfficeOfficeOther
Cities

100.0

100.0
100.0
100.0

1

100.0

9
4
23
25
4
1
3
5
1
6
29
10
13
39
8
20

100.0
100.0
96.3
98.5
100.0
100.0
76.6
100.0
100.0
100.0
91.1
97.2
100.0
97.1
90.9
100.0
96.1

59,106
91,501

0.6
0.9

100.0
91.1
100.0
100.0

244,442 2.3
320,142 3.1
596,400 5.7(Note 2) (Note2)

0.6
0.6

1

100.0

61,936

0.7

1
1

100.0
100.0

596,400 6.3(Note 2) (Note2)

1
35
1
1

Kawasaki Dice Bldg.

1
3
20

100.0
100.0
99.2

(Note 2) (Note2)
73,551 0.8
206,819 2.2

1
3
20

100.0
100.0
99.2

(Note 2) (Note2)
129,061 1.2
486,880 4.7

Niigata Ekinan Center Bldg.

11

100.0

132,019

1.4

10

100.0

133,971

1.3

27

98.4

369,484

3.9

27

98.4

379,879

3.6

9
28
18
24
17
18
14
21

97.3
100.0
93.8
89.5
99.9
96.8
100.0
100.0

2.6
1.7
1.1
1.7
2.2
1.3
1.3
2.3

9
26
19
26
17
18
13
19

98.9
96.0
100.0
98.9
99.9
96.8
100.0
87.8

87.0
100.0

9

91,7861.3

87.0

245,457
168,446
112,869
161,985
207,452
121,689
120,023
229,591
116,328

2.4
1.6
1.1
1.6
2.0
1.2
1.2
2.2

9
6

244,160
156,996
103,843
159,118
205,456
122,172
119,347
218,527
125,408

1.0

5

92.5

87,354

0.8

1

100.0

190,203

2.0

1

100.0

192,692

1.9

1
1
1
1

100.0
100.0
100.0
100.0

402,411 4.2
128,388 1.4(Note 2) (Note2)(Note 2) (Note2)

1
1
1
1

100.0
100.0
100.0

402,411 3.9
128,388 1.2(Note 2) (Note2)(Note 2) (Note2)

8
491

100.0
99.0

138,438 1.5
9,496,106 100.0

8517

JPR Musashikosugi Bldg.
Musashiurawa Shopping Square

Meiji Yasuda Life Osaka Umeda
Bldg.
Tokyo Tatemono Honmachi Bldg.
JPR Hakata Bldg.
JPR Naha Bldg.
NORTH 33 Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Nagoya Sakae Bldg.
JPR Dojima Bldg.
JPR Hakata-chuo Bldg.
Mistubishi UFJ Lease & Finance
Nagoya Head Office Bldg.

Retail2

98
157,41761,444

Rise Arena Bldg.
Yume-ooka Office Tower
Tanashi ASTA
Cupo-la Main Bldg.
Retail

100.0
100.0
100.0

100.0

4.5
1.0
1.0
0.7
0.3
0.1
1.4
5.6
1.4
0.6
0.4
1.9
1.8
2.9
4.6
0.5

100.0
100.0

(additional acquisition in 11th fiscal period)

Tokyo

9
8
1

11

470,728
108,950
104,980
75,54332,15912,260143,592
581,455
140,877
64,667
41,468193,250
188,276
300,738
484,198
51,070345,576
43,50588,87915,959296,103
145,454
144,358
75,338466,918
193,51420

JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
BYGS Shinjuku Bldg.
Across Shinkawa Bldg. Annex
JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Arca East
JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.
JPR Ueno East Bldg.
Tachikawa Business Center Bldg.

Greater

100.0

97.5
100.0
100.0

% of
Total

100.0
100.0
100.0
98.4
100.0
100.0
100.0
86.6
100.0
100.0
94.0
100.0
100.0
98.3
90.9

JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
Fukuoka Bldg.
(additional acquisition in 7th fiscal period )

CBDs

11

9
1
4

RentalRevenues(thousandsof yen)

9
4
23
25
4
1
4
4
1
6
28
12
14
40
8

(additional acquisition in 2nd fiscal period )(additional acquisition in 6th fiscal period)

Tokyo

100.0
100.0
100.0

% of Number OccupancyofTotal Tenants Rate (%)

452,845
102,443
100,783
74,30627,176
11,755
136,267
540,942
135,964
64,66737,822
188,542
176,193
303,328482,271
47,920345,576
47,05692,1989,524
282,376
143,687
138,51474,828471,240
189,921Shin-Kojimachi Bldg.

Office1014RentalRevenues(thousandsof yen)12th Fiscal Period (from July 1, 2007
to Dec. 31, 2007)

JPR Umeda Loft Bldg.
Strasse Ichibancho
Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
Chayamachi Grande Bldg.
Total

4.8
1.1
1.1
0.8
0.3
0.1
1.4
5.7
1.4
0.7
0.4
2.0
1.9
3.2
5.1
0.5
3.6
0.5
1.0
0.1
3.0
1.5
1.5
0.8
5.0
2.0

3.3
0.4
0.9
0.2
2.8
1.4
1.4
0.7
4.5
1.9

1.1

100.0
141,744 1.4
100.0
98.4 10,415,033 100.0(Note 1) The number of tenants at end of period is counted as follows except for Shinjuku Square Tower and Kawasaki Dice Bldg.: when a single tenant leases multiple rooms, it is counted
as one if the tenant uses the same property. If the leased rooms are in multiple buildings, the tenant is counted in plural.The tenant of Kawasaki Dice Bldg. has sublet space to a sublessee and a lease agreement has been executed where the rent paid by the tenant fluctuates in accordance with the lease conditions of the sub-lessee and thus the number of sublessees is deemed to be the number of tenants.
(Note 2) The tenant to whom the entire building is leased has not agreed to our disclosing rents and other information. Therefore, JPR does not disclose them as it falls under cases in which
disclosure is impossible due to inevitable reasons.

34

B. Details of Investment Securities Acquired as Properties
Book Value
Securities Name

Meieki Nichome
Kaihatsu SPC

Asset Type

Preferred securities

Appraisal Value

Units

6,120 units

Unit Price(yen)(thousands of yen)

Value

Unit Price(yen)(thousands of yen)

56,315

344,651

56,315

344,651

Value

Gains or
LossesRemarksfrom
Valuation(Note 1)
(Note 2)

(Note 1) The appraisal value of the preferred securities are their acquisition costs.
(Note 2) JPR owns 6,120 units of 132,093 units of preferred securities issued by Meieki Nichome Kaihatsu SPC (with preferred securities of 4.63%).
Furthermore, the value arrived at by multiplying the amounts of real estate and others on Meieki Nichome Kaihatsu SPC’s balance sheet on it’s latest settlement
period was 725,852 thousands of yen.

(4) Status of Other Properties
Beneficiary interests with real estate as major entrusted properties have been entered under Real Estate andother Aquired Properties in the previous pages.

35Capital Expenditures of Owned Real Estate(1) Planned Capital Expenditures
The following are major items of capital expentidures for currently planned renovations, etc. for JPRowned real estate and entrusted real estate regarding beneficiary interests in real estate. Further, the planned
construction expenses include portions that are classified as expenses in accounting.
Planned (millions of yen)
Property Name

Location

PurposeSchedule

Yume-ooka Office Tower

Yokohama City,
Kanagawa

Renewal work at 24th floor

Oct. 2007~
Feb. 2008

156

JPR Hakata Bldg.

Fukuoka City,
Fukuoka

Replacement work of 11th 12th floor common areas

Apr. 2008~
Jun. 2008

95

Tokyo Tatemono
Honmachi Bldg.

Osaka City,
Osaka

Renewal of mechanicalparking lot

Aug. 2007~
Mar. 2008

95

JPR Chiba Bldg.

Chiba City,
Chiba

Replacement of 6th-10th
floor air-conditioning units

Jan. 2008 ~Jun. 2008

74

North 33 Bldg.

Sapporo City,
Hokkaido

Replacement of 1st-4th,
6th and7th floor
air-conditioning units

Nov. 2007 ~Mar. 2008

55

JPR Yokohama
Nihon Odori Bldg.

Kawasaki City,
Kanagawa

Replacement of 11th
floor air-conditioning units

Apr. 2008 ~Jun. 2008

34

BYGS Shinjuku Bldg.

Shinjuku Ward,Tokyo

Replacement of interior of 9th 11th floor common areas

Dec. 2007 ~Jun. 2008

29

BYGS Shinjuku Bldg.

Shinjuku Ward,Tokyo

Replacement of interior of 6th 8th floor common areas

Mar. 2008~
Jun. 2008

29

JPR Ichigaya Bldg.

Chiyoda Ward,Tokyo

Replacement of 7th
floor air-conditioning units

Apr. 2008~
Jun. 2008

28

Total Value

Payment
duringthe 12th
Fiscal Period

AmountAlreadyPaid(2) Capital Expenditures during the 12th Period
The following are the capital expenditure amounts JPR invested in real estate and entrusted real estate during
the 12th period. Among major capitral expenditures, renewal of exterior repair seals for maintenance arerenovations in an effort to maintain and enhance tenant satisfaction as well as improvements to common-use
areas and the installation of office automation floors for leased offices with the aim of attracting new tenants.
Besides, JPR conducted construction of 258 million yen (Note), which was appropriated as expenditures forrepair and maintenance, aside from these constructions.
Property Name

Location

Purpose

PeriodConstruction Expenses(millions of yen)

JPR Hakata Bldg.

Fukuoka City,
Fukuoka

Replacement of
1st - 4th floor
air-conditioning units

Jul. 2007~
Dec. 2007

108

JPR Ueno East Bldg.

Taito Ward,Tokyo

Replacement of
2nd - 8th floor
air-conditioning units

Jul. 2007~
Oct. 2007

87

North 33 Bldg.

Sapporo City,
Hokkaido

Replacement of 5th and8th - 12th floor airconditioning units

Jun. 2007 ~Oct. 2007

55

Kawasaki Dice Bldg.

Kawasaki City,
Kanagawa

Replacement of interiorof 1st and 6th floor
common areas

Jul. 2007 ~Sep. 2007

55

JPR Chiba Bldg.

Chiba City,
Chiba

Renewal of exterior
repair seals and coatingof polycarbonate plates

Sep. 2007 ~Dec. 2007

41

JPR Chiba Bldg.

Chiba City,
Chiba

Replacement of 1st,
11th - 13th floor airconditioning units

Oct. 2007 ~Dec. 2007

37

BYGS Shinjuku Bldg.

Shinjuku Ward,Tokyo

Replacement of interiorof 12th and 13th floor
common areas

Oct. 2007~
Dec. 2007

22

Other Properties

Repairs of common area, installation of office automation
floors, preparation of parking lots, air conditioners anddisaster prevention facilities

171

Total

580

(Note) Expenditures for repair and maintenance included 6,000,000 yen of construction management fees paid to construction management companies aswell as the amounts for repair and maintenance constructions themselves.

36

(3) Amounts Reserved for Long-Term Repairs and Maintenance Plans
JPR has deposited the following amounts from the redundant cash flow (including one accompanying internal
reserve of profits) such as depreciation in order to conduct large-scale repairs and maintenance work, based onlong-term repairs and maintenance plans for individual properties.

(Millions of yen)

Operation Period

8th Fiscal Period(July 1, 2005 ~Dec. 31, 2005)

9th Fiscal Period(Jan. 1, 2006 ~June 30, 2006)

10th Fiscal Period(July 1, 2006 ~Dec. 31, 2006)

11th Fiscal Period(Jan. 1, 2007 ~June 30, 2007)

12th Fiscal Period(July 1, 2007 ~Dec. 31, 2007)

Balance of deposits at
end of previous period

716

667

678

698

681

Deposits during the period

228

141

297

488

803

Amounts used from
deposits during the period

277

130

277

505

747

Deposits carried forward
to the next period

667

678

698

681

737

Expenses and Liabilities(1) Details of Expenses Related to Management(Thousands of yen)Item

11th Fiscal Period (Jan. 1, 2007 - June 30, 2007)

12th Fiscal Period (July 1, 2007 - Dec. 31, 2007)(a) Asset Management Fees

391,824400,929

Fixed compensation

75,00075,000

Incentive-based compensation 1

181,520

196,963

Incentive-based compensation 2

135,304

128,965(b) Administrative Service and Custodian Fees

81,91969,035(c) Directors' Fee

5,700

6,300

(d) Trust Fees

55,54955,879(e) Other Expenses
Total

98,42994,594

633,423

626,739(2) Status of Borrowings

As of December 31, 2007, JPR has the following borrowings.
Category

Average
Interest Rate(%) (Note 1)(Note 2)

Repayment
Date

0.907

July 5, 2007

Mizuho Corporate
July 5, 2007
Bank, Ltd.

0.873

Sep. 25, 2007

July 9, 2007

0.872

Sep. 25, 2007

0.907

July 5, 2007

0.873

Sep. 25, 2007 sum

Drawdown
Date

LenderApr. 11, 2007

Apr. 11, 2007

Short-Term
Borrowings

Resona Bank,
LimitedBalance as of Balance as ofDecember 31,
June 30,
2007
2007(millions of yen)

2,500

1,000

July 5, 2007

(millions of yen)Use

Principal

0.872

Sep. 25, 2007

July 9, 2007

0.872

Sep. 25, 2007

Bank of TokyoMitsubishi UFJ,Ltd. July 9, 2007

0.872

Sep. 25, 2007

Mitsubishi UFJ
Trust and Banking July 9, 2007
Corporation

0.872

Sep. 25, 2007

repayment(Note 3)

Secured/lump

Dec. 27 2001

4,783

1.700

Dec. 26, 2008 sum

repayment
on maturity

Total

Nonsubordinatedon maturity

Principal
Current
Portionof Long-Term
Borrowings

Unguaranteed/

3,500

Total

Meiji Yasuda
Life Insurance
Company

Remarks

Unsecured/lump

July 9, 2007
Shinsei Bank, Ltd.

Repayment
Method(Note 3)

Unguaranteed/
Nonsubordinated

4,783

37

Long-Term
Borrowings

Balance as ofJune 30,
2007

Balance as of
Average
December 31, Interest Rate Repayment
2007(%) (Note 1) Date(millions of yen) (millions of yen)
(Note 2)

LenderDrawdown
DateZenkyoren(The National
Mutual Insurance
Federation ofAgricultural
Cooperatives)

Nov. 24, 2005

5,000

5,000

1.453 Nov. 27, 2012

Mitsubishi UFJ
Trust and Banking Corp. Aug. 29, 2006

6,000

6,000

1.734 Aug. 29, 2011

Category

Shinsei Bank, Ltd.

Sep. 26, 2006

3,000

3,000

1.356 Sep. 24, 2010

The Bank ofFukuoka, Ltd.

Sep. 26, 2006
Apr. 11, 2007

1,000

1,000

2,000

2,000

1.356 Sep. 24, 2010
1.676 Apr. 11, 2012

The Chugoku
Bank, Ltd.

Sep. 26, 2006

1,000
2,000

1,000
2,000

1.356 Sep. 24, 2010
1.676 Apr. 11, 2012

The Hachijuni
Bank, Ltd.

Sep. 26, 2006

1,000
1,000

1.356 Sep. 24, 2010

Dec. 26, 2006

1,000
1,000

Dec. 26, 2006

1,000

1,000

1.858 Dec. 27, 2013

Daido Life
Insurance Company Dec. 26, 2006

1,000

1,000

1.858 Dec. 27, 2013

Sumitomo Life
Insurance Company Dec. 27, 2006

2,000

2,000

1.858 Dec. 27, 2013

Sompo Japan
Insurance Inc.

Apr. 11, 2007

2,000

2,000

1.676 Apr. 11, 2012

The Iyo Bank, Ltd. Apr. 11, 2007

1,000

1,000

1.676 Apr. 11, 2012

Meiji Yasuda Life
Insurance
Company

Jun. 21, 2002

4,783

4,783

2.050 Jun. 21, 2011

Mar. 28, 2003

4,400

4,400

1.750 Mar. 28, 2013

38,18338,183Apr. 11, 2007

Taiyo Life
Insurance Company

Total

1.642 Apr. 11, 2012

Repayment
MethodUse

Unsecured/Principal

Unguaranteed/

lump
sum
repayment

Remarks

Non-(Note 3) subordinatedon maturity

Secured/
Unguaranteed/
Nonsubordinated(Note 1) The average interest rates are weighted-average figures during the period and are rounded to the third decimal point. Furthermore, fees related to loan arrangement paid
to the above lenders are not included.
(Note 2) Short-term borrowings are floating-rate borrowings. Long-term borrowings are fixed-rate borrowings.
(Note 3) Funds are mainly used for purchasing real estate or real estate beneficiary interest in trust (including accompanying expenses) and repaying borrowings.
(Note 4) Long-term borrowing of 4,783 million yen from Meiji Yasuda Life Insurance Company undertaken on December 27, 2001 was repaid on July 27, 2007. In addition, short-termborrowings of 2.5 billion from Mizuho Corporate Band, Ltd. and 1.0 billion yen from Resona Bank, Ltd. undertaken on July 5, 2007, short-term borrowings of 1.4 billion yen
from Mizuho Corporate Bank, Ltd., 1.4 billion yen from Bank of Tokyo-Mitsubishi UFJ, Ltd., 1.4 billion yen from Mitsubishi UFJ Trust and Banking Corp., 1.4 billion yen from
Shinsei Bank, Ltd. and 1.3 billion yen from Resona Bank, Ltd. undertaken on July 9, 2007 was repaid on July 27, 2007.

(3) Corporate Bonds

Details of corporate bonds outstanding as of December 31, 2007 are as follows.
NameFirst Series ofCorporate
Bonds
Second Series ofCorporate
Bonds
Third Series ofCorporate
Bonds
Fourth Series ofCorporate
Bonds
Fifth Series ofCorporate
Bonds
Sixth Series ofCorporate
Bonds
Seventh Series ofCorporate
Bonds
Eighth Series ofCorporate
Bonds
Ninth Series ofCorporate
Bonds

Total

Issue Date

Balance as of
Balance as ofJune 30, 2007 December 31, 2007 Coupon Rate(per annum)(millions of yen)(millions of yen)

Maturity
Date

Feb. 12, 2004

10,00010,0000.84

Feb. 12,2008

Feb. 12, 2004

7,000

7,000

1.38

Feb. 12,2010

Feb. 12, 2004

5,000

5,000

2.32

Feb. 12,2014

Nov. 4, 2004

10,00010,0000.92

Nov. 4,2009

Nov. 4, 2004

5,000

5,000

1.44

Nov. 4,2011

Nov. 4, 2004

5,000

5,000

2.00

Nov. 4,2014

Dec. 14, 2006

4,500

4,500

2.90

Dec. 14,2026

July 23, 2007

9,000

1.85

July 23,
2012

July 23, 2007

6,000

2.10

July 23,2014

46,500

Redemption

Use

Remarks(Note 1)
Purchase ofproperties
andRepayment ofborrowings

Bullet(Note 2)

payment

Repayment ofborrowings(Note 3)61,500(Note 1) These are equipped with a same rank rider limited among corporate bonds, and with limitations on private placement among small number of investors and on resale among
qualified institutional investors.
(Note 2) These are equipped with a same rank rider limited among corporate bonds and limitations on resale among qualified institutional investors.
(Note 3) These are equipped with a same rank rider limited among certain corporate bonds.

38

Acquisition and Sale during the 12th Fiscal Period(1) Aqcuisition and Sale of Real Estate and Asset-Backed Securities
Acquisition

Sale

Acquired
Date

AcquisitionPrice(thousandsof yen)(Note)

Yume-ooka
Office Tower

July 10,2007

6,510,000

Meieki Nichome
Kaihatsu TMK

Nov. 9,2007

340,000

Type of Asset

Real Estate
Name

Real Estate
BeneficiaryInterest in
Real Estate

Sale
Date

Sale
Book
Difference (C)Price (A)Value (B)(A) - (B)(thousands (thousands (thousands ofof yen)of yen)yen)(Note)

Sale
Expenses(D)(thousandsof yen)Sale Profit
and Loss(C) - (D)(thousandsof yen)6,850,000

Total(Note) Values of "acquisition price" or "sale price" are amounts (transaction price indicated in the transaction contract) excluding expenses (such as real estate transaction brokeragefees) required for acquisition or sale of the relevant real estate.

(2) Acquisition and Sale of Other Assets
There were no acquisitions or sales of other assets.

(3) Survey on Values of Specified Assets, etc.

A. Real Estate Transactions
Acquisition or Sale
Acquisition

Real Estate NameTransaction
Date

Yume-ooka OfficeTower

July 10, 2007

Acquisition Price orSale Price (Note 1)(thousands of yen)
6,510,000

Survey Value ofSpecified Assets (Note 2)(thousands of yen)
5,810,000(Note 1) Values of "acquisition price or sale price" are amounts (transaction price indicated in the transaction contract) excluding expenses (such as real estate transaction brokeragefees) required for acquisition or sale of the relevant real estate.
(Note 2) Surveys on the values of specified assets, etc. indicated above were conducted by Ernst & Young ShinNihon at times of acquisition or sale of properties based on the Report
No. 23, "surveys on values of specified assets, etc. of investment trusts and investment corporations," issued by the Industry Audit Committee of the Japanese Institute ofCertified Public Accountants. Furthermore, aside from the value surveys shown above, JPR has received survey reports on locations, addresses and other items needed for
identifying relevant real estate.

B. Securities Transactions
Acquisition or Sale

Security Name

No. of
Units

Transaction
Date

6,120

Nov. 9, 2007

Acquisition Price orSale Price (Note 1)(thousands of yen)

Survey Value ofSpecified Assets (Note 2)(thousands of yen)

Meieki Nichome
Acquisition

Kaihatsu TMK (SPC)

340,000

411,000

Preferred Securities(Note 1) Values of “acquisition price or sale price” are amounts excluding expenses required for acquisition or sale of the relevant securities.
(Note 2) Surveys on the values of specified assets, etc. indicated above were conducted by Ernst & Young ShinNihon at times of acquisition or sale of properties based on the Report
No. 23, “surveys on values of specified assets, etc. of investment trusts and investment corporations,” issued by the Industry Audit Committee of the Japanese Institute ofCertified Public Accountants. Furthermore, aside from the value surveys shown above, JPR has received reports on locations, addresses and other items of the property
owned by TMK needed for identifying relevant securities.
(Note 3) JPR owns 6,120 units of 132,093 units of the preferred securities issued by Meieki Nichome Kaihatsu SPC (with preferred securities of 4.63%). Furthermore, the value
arrived at by multiplying the amounts of real estate and others on Meieki Nichome Kaihatsu SPC’s balance sheet on it’s latest settlement was 725,825 thousand yen.

39

(4) Transactions with Interested Parties and Major Shareholders
A.Transaction Status
There were no transaction with interested parties or major shareholders.
B.Value of Fee Expenses

Category(Thousands of yen)

Paid Amount(B)

Ratio toTotal
Amount(B/A)(% of total)

Tokyo Tatemono Co., Ltd.

160,713

71.5

Yasuda Real Estate Co., Ltd.

11,621

5.2

Meiji Yasuda Building Management, Co., Ltd.

21,382

9.5

Yuraku Real Estate Co., Ltd.

3,361

1.5

Tokyo Tatemono Co., Ltd.

317,510

66.5

Yasuda Real Estate Co., Ltd.

23,1184.8

Meiji Yasuda Building Management, Co., Ltd.

47,839

10.0

Tokyo Tatemono Co., Ltd.

4,560

45.2

Breakdown of Transactions with Interested Parties
Total Paid Fees(A)

Management Fees
(Note 2)

Outsourcing Fees

Tenant Brokerage Fees,
etc.

Paid Party

224,677

477,158

10,096(Note 1) Interested parties and major shareholders refers to the interested parties of the asset management company who has concluded an asset management agreementwith JPR and is regulated as designated in Article 123 of the Enforcement Order of as the Investment Trusts and Investment Corporations Law and the major
shareholders of the asset management company regulated defined in Article 29-4-2 of the Financial Instruments and Exchange Law.
(Note 2) The management fees indicated in the above table include construction management fees (total of 17,643 thousand yen for JPR) appropriated as assets and nothandled as expenses.
(Note 3) Aside from transactions indicated in the above table, JPR paid the following amounts for repairs, etc. conducted by below parties during the 12th fiscal period.
Tokyo Tatemono Co., Ltd.

296,062 thousand yen

Tokyo Tatemono Techno-build Co., Ltd.

27,800 thousand yen

Yasuda Real Estate Co., Ltd.

112,909 thousand yen

Meiji Yasuda Building Management Co., Ltd.

19,851 thousand yen

Taisei Corporation

45,000 thousand yen

Yuraku Real Estate Co., Ltd.

250 thousand yen(5) Transactions with the Asset Management Company regarding Concurrent
Work Conducted by the Asset Management Company
Tokyo Realty Investment Management, Inc., the asset management company of JPR, does not concurrently conduct
the class 1 financial instruments transaction business, class 2 financial instruments transaction business, land andbuilding transaction business, or real estate syndication business, and has no such transactions with JPR.

40

Overview of Accounting(1) Assets, Liabilities, Principal, and Profits and Loss

Please refer to the Balance Sheets, Statement of Income and Retained Earnings, Statement of Changes
in Unitholders' Equity and Notes to Financial Statements as well as Distribution Information.

(2) Changes in Calculation Method of Depreciation

Please refer to the “Notes to Financial Statements, Significant Accounting Policies, 2. Depreciation
Method for Property and Equipment, (Additional Information).”(3) Changes in Valuation Method of Real Estate
No change has been made.

Other(1) Notice
A. General Meeting of Unitholders
JPR’s 6th General Meeting of Unitholders was held on September 5, 2007.
Major issues related to the items approved at the meeting are as follows.
Proposals

Details
The following changes were made to the Articles of Incorporation.

Partial changes to the
Articles of Incorporation

Changes to words related to the revisions to the Investment Trusts and Investment Corporations
Law and other regulations
Changes to types of assets that were necessary or deemed useful in terms of JPR’s fundamental
investment policies
Changes to and new establishment of regulations related to the issuance of short-term corporate bonds
New establishment of regulations related to the responsibilities of independent auditors andchanges to maximum amount for independent auditor fees
Addition of fees concerning asset acquisitions to the asset manager fees
Other changes to article numbers and adjustments in the text

Partial changes to theConsignment Contractsof Asset Management

Changes made to the consignment contracts of asset management being concluded between theasset manager, Tokyo Realty Investment Management on September 27, 2001 to include asset
acquisition fees

Appointment of one
Executive Officer

Hirohito Kaneko was appointed as executive officer

Appointment of one
Substitute Executive
Officer

Toshihiro Hagiwara was appointed as substitute executive officer

Appointment of two
Company Auditors

Sosuke Yasuda and Masato Denawa were appointed as company auditors

B. Board of Directors Meeting
Details of major issues related to the conclusion and change of major contracts approved by JPR’s Board of
Directors meeting during the fiscal period are as follows.
Date of the Meeting

September 26, 2007

Approved Issues

Details

Conclusion of agreement regarding

The required items of the agreementchange to the Trustee/Asset Custodian

were reviewed in line with organizing andAgreement

clarifying subordinate operations that are
not trustee operations between Mizuho
Trust & Banking and the asset manager

41

Balance Sheets(As of December 31, 2007 and June 30, 2007)(Thousands of yen)

End of 12th Fiscal Period

End of 11th Fiscal Period(as of December 31, 2007)(information only)(as of June 30, 2007)￥ 16,307,505￥ 13,189,044

14,990,073

14,818,371

Rental receivables

174,320

218,417

Prepaid expenses

150,911

96,79467

149% Change

ASSETS
CURRENT ASSETS :Cash and bank deposits
Entrusted cash and deposits

Deferred tax assets
Consumption tax refundable

120,563

Other current assets

251,563

12,504

Total Current Assets

31,874,441

28,455,845

Buildings

25,721,274

21,108,028

Entrusted buildings

79,462,451

79,049,528

12.0%

FIXED ASSETS :PROPERTY AND EQUIPMENT :Structures

6,376

5,260

Entrusted structures

82,64074,774

Machinery and equipment

304,863

271,023

Entrusted machinery and equipment

1,340,537

1,346,426

Tools, furniture and fixtures

15,624

14,860

Entrusted tools, furniture and fixtures

78,08670,901

Land

36,600,710

34,551,599

Entrusted land

117,128,148

117,128,148

622,755

783,596

Construction in progress
Entrusted construction in progress
Less : accumulated depreciation

8,962(14,884,608)(13,090,418)

246,478,860

241,322,687

Other intangible assets

10,368

9,044

Total Intangible Assets

10,3689,044

Investment securities

344,651

1,558,460

Deposits

10,10010,100900

250

Net Property and Equipment

2.1%

Intangible Assets:
14.6%

INVESTMENTS AND OTHER ASSETS :Other
Total Investments and Other Assets
Total Fixed Assets

355,651

1,568,810(77.3%)

246,844,880

242,900,542

1.6%

122,765

42,439122,765

42,439189.3%￥278,842,087￥271,398,827

2.7%

Deferred Assets:
Corporate bond issuance costs
Total Deferred Assets

TOTAL ASSETS(Note) See accompanying Notes to Financial Statements

42

(Thousands of yen)

End of 12th
Fiscal Period(as of December 31, 2007)

End of 11th
Fiscal Period(information only)(as of June 30, 2007)% Change

LIABILITIESCURRENT LIABILITIES :Trade accounts payable￥

1,143,623

Short-term borrowings

998,128
3,500,000

Current portion of long-term borrowings
Current portion of corporate bonds￥

4,783,000
10,000,000

10,000,000

Other accounts payable

536,924566,524

Accrued expenses

297,440

173,958

652

663

Accrued income taxes
Accrued consumption taxes

123,162

Rent received in advance

1,140,748

1,044,124

13,242,552

21,066,400

Corporate bonds

51,500,000

36,500,000

Long-term borrowings

38,183,000

38,183,000

Leasehold and security deposits received

3,975,087

3,613,756

Entrusted leasehold
and security deposits received

11,046,281

10,937,479

Total Long-Term Liabilities

104,704,369

89,234,236

17.3%

117,946,921

110,300,636

6.9%

156,725,438

156,725,438

4,169,727

4,372,752(4.6%)TOTAL UNITHOLDERS' EQUITY

160,895,166

161,098,190(0.1%)TOTAL LIABILITIESAND UNITHOLDERS' EQUITY￥278,842,087￥271,398,827

2.7%

Total Current Liabilities(37.1%)

LONG-TERM LIABILITIES :TOTAL LIABILITIESUNITHOLDERS' EQUITY :Unitholders’ capital
5,000,000 units authorized
625,000 units issued and outstanding
Retained earnings(Note) See accompanying Notes to Financial Statements

43

Statements of Income and Retained Earnings(For the six-month periods ended December 31, 2007 and June 30, 2007)(Thousands of yen)

12th Fiscal Period(July 1, 2007 December 31, 2007)(information only)(January 1, 2007June 30, 2007)

OPERATING REVENUES :￥10,449,831￥10,056,610

Real estate rental revenues

10,415,033

9,496,106

Gain on sale of real estate
Dividends received% Change
3.9%

530,194
34,79730,3095,443,585

4,948,423

4,816,845

4,315,000

Asset management fees

400,929

391,824

Administrative service and custodian fees

69,035

81,919Directors’ fees

6,300

5,700

Trust fees

55,87955,549Other operating expenses

94,594

98,4295,006,245

5,108,186(2.0%)

18,703

94,071(80.1%)

14,061

7,075

OPERATING EXPENSES :Real estate rental expenses

OPERATING INCOME
NON- OPERATING REVENUES :Interest income
Income on settlement of management
association accounts

4,642

3,762

NON-OPERATING EXPENSES :854,410

828,469

Interest expense

334,466

361,542

Loan arrangement fees

16,393

16,405Interest expense on corporate bonds

474,899

343,584

8,010

18,116

3.1%

83,009Unit-issuance costs
Other non-operating expenses

10.0%

83,233

Other non-operating revenues

Amortization of corporatebond issuance costs

20,641

5,811

ORDINARY INCOME

4,170,538

4,373,788(4.6%)

INCOME BEFORE INCOME TAXES

4,170,538

4,373,788(4.6%)

981

1,068

Current income taxes
Deferred income taxes

81

43

4,169,475

4,372,676(4.6%)RETAINED EARNINGSBROUGHT FORWARD

252

75

234.5%RETAINED EARNINGSAT END OF PERIOD￥ 4,169,727￥ 4,372,752(4.6%)NET INCOME(Note) See accompanying Notes to Financial Statements

44

11th Fiscal Period

Statements of Changes in Unitholders' Equity(For the six-month periods ended December 31, 2007 and June 30, 2007)(Thousands of yen)

Unitholders' capital
BALANCE AS OF DECEMBER 31, 2006
Changes during the period
Issuance of units

Total￥115,431,503￥3,642,765￥119,074,268

41,293,935

729,986

42,023,921

41,293,935

Cash distributions paid
Net Income

BALANCE AS OF JUNE 30, 2007

Retained earnings￥156,725,438

41,293,935(3,642,690)(3,642,690)

4,372,676

4,372,676￥4,372,752￥161,098,190

Changes during the period(203,024)(203,024)

Cash distributions paid

(4,372,500)(4,372,500)

Net Income

BALANCE AS OF DECEMBER 31, 2007

￥156,725,438

4,169,475

4,169,475￥4,169,727￥160,895,166(Note) See accompanying Notes to Financial Statements

45

Notes to Financial Statements
Basis of Presenting Financial Statements
Japan Prime Realty Investment Corporation (JPR) maintains its accounting records and prepares its
financial statements in accordance with accounting principles generally accepted in Japan (JapaneseGAAP), including provisions set forth in the Investment Trust Law, the Company Law and the related
regulations, which are different in certain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of JPR,
which were prepared in accordance with Japanese GAAP. In preparing the accompanying financial
statements, certain reclassifications have been made to the financial statements issued domestically inorder to present 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 under Japanese GAAP but ispresented herein as additional information.
JPR's accounting period ends at the end of June and December. JPR's 12th accounting period began on
July 1, 2007 and ended on December 31, 2007.

Significant Accounting Policies
1. Assets Valuation Standards and Methods

Investment securities include other securities. Other securities without market value are stated on a
cost basis using the moving-average method.

2. Depreciation Method for Property and Equipment(1) Property and Equipment (including entrusted properties)
Depreciation is calculated using the straight-line method. The estimated useful lives of major property
and equipment range are as follows:
Buildings
Structures
Machinery and equipment
Tools, furniture and fixtures

3 - 65 years
10 - 35 years
3 - 17 years
4 - 15 years

Assets with acquisition prices of 100,000 yen or more but less than 200,000 yen are depreciated inthree years based on the Corporation Tax Law.
(Additional Information)
From the 12th Fiscal Period, JPR adopted the following accounting procedure for tangible fixed
assets acquired before March 31, 2007 that had already been depreciated for 5% of the acquisition
price. Beginning from the fiscal period following the completion of depreciation for 5% of theaquisition price, the remaining book value will be depreciated over five years, in equal amounts
each fiscal period. The impact on operating income, ordinary income and income before income
taxes following this change is minimal.
(2) Intangible Assets
Intangible assets are depreciated utilizing the straight-line method.

3. Accounting for Deferred Assets

Corporate Bond Issuance Costs
Corporate bond issuance costs are depreciated utilizing the straight-line method over the redemption
periods.

46

4. Standards for Recording Revenues and Expenses
Accounting treatment of Taxes on Properties and Equipment
In connection with property taxes, city planning taxes and depreciated asset taxes, JPR adopt the methodof charging the corresponding amounts of assessed taxes to the current fiscal period as real estate rental
expenses. Furthermore, JPR included an amount equivalent to the property taxes paid to the sellers
during the first fiscal period as an acquisition cost, not as expenses, in connection with the acquisition ofreal estate or entrusted beneficiary interest with real estate as entrusted property. During the 12th fiscal
period, the amount equivalent to the property taxes included as an acquisition cost of real estate was notallocated.

5. Other Significant Items Fundamental to Preparing the Financial Statements(1) Accounting Policies on Trust Beneficiary Interests in Real Estate as Entrusted Property
Regarding trust beneficiary interests in real estate, all asset and liability accounts of entrusted
properties as well as all revenue and expense accounts generated by the entrusted property arerecorded in relevant accounts on the balance sheets and statements of income.
Furthermore, the following material accounts are separately stated in the balance sheet for entrusted
properties recorded in relevant accounts.
a. Entrusted cash and deposits
b. Entrusted buildings, entrusted structures, entrusted machinery and equipment, entrusted
tools, furniture and fixtures, entrusted land and entrusted construction in progressc. Entrusted leasehold and security deposits received(2) Accounting for Consumption Taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

Notes to Balance Sheets
1. Assets Pledged as Collateral and Secured Liabilities(Thousands of yen)

End of 12th Fiscal Period
Assets pledged as collateral are as follows
Entrusted deposits
Buildings
Entrusted buildings
Entrusted structures
Machinery and equipment
Entrusted machinery and equipment
Entrusted tools, furniture and fixtures
Land
Entrusted land
Entrusted construction in progress
Total

Secured liabilities are as follows
Current portion of long-term borrowings
Long - term borrowings
Leasehold and security deposits received
Total(as of December 31, 2007)￥ 2,263,462
142,214
7,278,456
4,055
5,478
16,6762,181
398,201
8,536,013

End of 11th Fiscal Period(information only)(as of June 30, 2007)￥ 2,821,035
10,089,294
7,306
79,742
7,302￥18,646,741

11,024,226
1,979￥24,030,887

End of 12th Fiscal Period

End of 11th Fiscal Period(as of December 31, 2007)￥
9,183,000
15,536￥ 9,198,536(information only)(as of June 30, 2007)￥ 4,783,000
9,183,000￥13,966,000

47

2. Balance of Unused Commitment LineJPR has executed a commitment line agreement with its principal banks to minimize refinancing risks
and enhance financial stability.
(Thousands of yen)

End of 12th Fiscal Period

End of 11th Fiscal Period

December 1, 2006
￥20,000,000(information only)(as of June 30, 2007)
December 1, 2006
￥20,000,000￥20,000,000￥20,000,000(as of December 31, 2007)
Contract execution date
Credit limit
Outstanding debt at end of period
Unused commitment line at end of period

3. Minimum Total Unitholders' Equity Designated in Article 67- 4 in the Investment Trust Law(Thousands of yen)

End of 12th Fiscal Period

End of 11th Fiscal Period(as of December 31, 2007)(information only)(as of June 30, 2007)￥50,000￥50,000

Notes to Statements of Income and Retained Earnings
1. Breakdown of Real Estate Rental Revenues and Expenses(Thousands of yen)

12th Fiscal Period

11th Fiscal Period(July 1, 2007 December 31, 2007)(information only)(January 1, 2007 June 30, 2007)￥7,840,275
1,560,105
214,147
16,347
11,04920,9799,662,904￥7,220,398
1,465,845
212,461
14,706
10,52418,608
8,942,546

Incidental income
704,675
Time-based parking revenues
7,442
Cancellation charges
5,353
Income equivalent to expenses for restoration to as is condition
22,983
Other miscellaneous income
11,674
Sub total
752,129￥10,415,033
Total real estate rental revenues

513,473
8,192
2,494
15,556
13,842
553,560￥9,496,106

A. Real Estate Rental Revenues
Rental revenues
Rents
Common charges
Parking revenues
Advertising expenses
Antenna use fees
Other
Sub total
Other rental revenues

B. Real Estate Rental Expenses
Rental expenses
Outsourcing expenses
Utilities expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts
Depreciation
Other
Total real estate rental expenses
C. Profits (A-B)

48￥

477,158
740,835
764,570
35,005
251,562
207,033
461,431
1,809,469
69,778￥4,816,845￥￥5,598,188￥5,181,106

462,224542,112784,01332,766
189,115
200,930
381,715
1,682,072
40,049￥4,315,000

2. Breakdown of Capital Gain on Sale of Real Estate
12th Fiscal Period(July 1, 2007 December 31, 2007)

Capital gain on sale of real estate
Proceeds from sale of real estate
Cost of real estate sales
Other related sales expense
Capital gain on sale of real estate

11th Fiscal Period(information only)(January 1, 2007 June 30, 2007)￥5,800,000
5,145,005
124,800
530,194￥

Notes to Statements of Changes in Unitholders' Equity
12th Fiscal Period

The number of units outstanding

Tax Effect Accounting

11th Fiscal Period(July 1, 2007 December 31, 2007)(information only)(January 1, 2007 June 30, 2007)

625,000 units

625,000 units

12th Fiscal Period

11th Fiscal Period(Thousands of yen)

1. Breakdown of Main Causes for Deferred Tax Assets
and Deferred Tax Liabilities(Deferred tax assets)(July 1, 2007 December 31, 2007)(information only)(January 1, 2007 June 30, 2007)

￥ 18

￥ 23

48

116
9
149
￥149

Enterprise tax not deductible for income tax purposes
Lump-sum depriciated assets not deductible for tax purposes
Other
Total deferred tax assets
Net deferred tax assets

67￥67

2. Breakdown of Main Items that caused Differences between the Effective Statutory Tax Rate and the
Effective Tax Rate after Applying Tax Effect Accounting

12th Fiscal Period

Effective statutory tax rate
(Adjustment)
Deductible cash distributions
Other
Effective tax rate after applying tax effect accounting

11th Fiscal Period(July 1, 2007 December 31, 2007)(information only)(January 1, 2007 June 30, 2007)

39.39%

39.39%(39.38%)
0.02%
0.03%

(39.38%)
0.02%
0.03%

Property and Equipment Leased to JPR
12th Fiscal Period(July 1, 2007 - December 31, 2007)

11th Fiscal Period (information only)(January 1, 2007 - June 30, 2007)

No property and equipment leased to JPR

No property and equipment leased to JPR

49

Transactions with Interested Parties
12th Fiscal Period(July 1, 2007 - December 31, 2007)

11th Fiscal Period (information only)(January 1, 2007 - June 30, 2007)

No transactions with interested parties

No transactions with interested parties(Yen)

Per Unit Information
Total unitholders' equity per unit
Net income per unit

12th Fiscal Period(July 1, 2007 December 31, 2007)￥257,432￥6,671

11th Fiscal Period(information only)(January 1, 2007 June 30, 2007)￥257,757￥7,223

Net income per unit is computed by dividing net income by the weighted-average number of units outstanding
during the current fiscal period.
Diluted net income per unit has not been presented since no warrants and convertible bonds are outstanding.
(Note) Net income per unit was calculated based on the following data:(Thousands of Yen)

12th Fiscal Period

Net income
Amounts not attributable to ordinary unitholders
Net income attributable to ordinary investment units
Average number of units

50(July 1, 2007 December 31, 2007)￥4,169,475

11th Fiscal Period(information only)(January 1, 2007 June 30, 2007)￥4,372,676￥4,169,475￥4,372,676

625,000 units

605,303 units

Distribution Information
12th Fiscal Period

1. Retained earnings at end of period
2. Cash distributions(Distribution per unit)
3. Retained earnings carried forward(Yen)

11th Fiscal Period(July 1, 2007 December 31, 2007)(information only)(January 1, 2007 June 30, 2007)￥4,169,727,716￥4,372,752,021

4,169,375,000(6,671)
352,716

4,372,500,000(6,996)
252,021

In accordance with the distribution policy stipulated in Article 28-2 of the Articles of Incorporation, JPR
will be able to distribute only to the extent of the profits and needs to distribute in excess of 90% of JPR's
distributable income as stipulated in Article 67-15 of the Special Taxation Measures Law. Based on thispolicy, JPR decided on a total distribution of 4,169,375,000 yen for the 12th fisical period (4,372,500,000 yen
for the 11th fiscal period). This is the maximum value arrived at when the number of units outstanding(625,000 units) is multiplied by an integer, within the limit of retained earnings for the respective fiscal
period. Furthermore, JPR does not make cash distributions in excess of the profit as stipulated in Article28-4 of the Articles of Incorporation.

51

Report of Independent Auditors

52

Statements of Cash Flows (Information Only)(For the six-month periods ended December 31, 2007 and June 30, 2007)(Thousands of yen)

12th Fiscal Period

11th Fiscal Period￥ 4,170,538￥ 4,373,788

1,810,540

1,682,549(July 1, 2007 December 31, 2007)(January 1, 2007 June 30, 2007)

CASH FLOWS FROM OPERATING ACTIVITIES :Income before income taxes
Depreciation
Amortization of corporate bond issuance costs

8,010

18,116

Interest income(14,061)(7,075)Interest expense

809,365

705,127

Decrease (increase) in rental receivables

44,096(84,051)

Decrease (increase) in accrued consumption taxes refundable

120,563(120,563)(Increase) decrease in prepaid expenses(54,116)

41,73684,456

114,413

Increase in trade accounts payable
Increase in other accounts payable

3,738

30,686

Increase (decrease) in accrued consumption taxes

123,162(145,485)

Increase in rental received in advance

96,62330,087

Decrease in entrusted fixed properties due to sale

13,982

5,145,005

Decrease in investment securities
Change in other current assets/liabilities
SubtotalInterest received
Interest paid
Income taxes paid

Net cash provided by operating activities

1,558,460(14,802)(7,499)8,760,557

11,776,835

14,061

7,075(685,883)(715,765)(230,951)(1,573)

7,857,784

11,066,571

CASH FLOWS FROM INVESTING ACTIVITIES :Purchases of property and equipment
Purchases of entrusted property and equipment
Purchases of intangible assets(6,499,695)(9,654,748)(418,800)(20,410,726)(6,624)Purchases of investment securities(344,651)

Payments of leasehold and security deposits received(139,812)

Proceeds from leasehold and security deposits received

445,027

585,426(108,423)(497,112)

Payments of entrusted leasehold and security deposits received
Proceeds from entrusted leasehold and security deposits received

Net cash used in investing activities(16,648)

241,415

1,131,208(6,831,563)(28,862,600)

CASH FLOWS FROM FINANCING ACTIVITIES :Proceeds from short-term borrowings

10,400,000

3,500,000

Repayments of short-term borrowings(13,900,000)(19,500,000)

Proceeds from long-term borrowings

7,000,000

Repayments of long-term borrowings(4,783,000)

Proceeds from issuance of corporate bonds

15,000,000

Payments of corporate bond issuance cost

(88,335)

Proceeds from issuance of units
Distributions to unitholders(7,500,000)

41,293,935(4,364,722)(3,641,218)

Net cash provided by financing activities

2,263,942

21,152,716

NET CHANGES IN CASH AND CASH EQUIVALENTS

3,290,162

3,356,686

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

28,007,415

24,650,729￥31,297,578￥28,007,415

CASH AND CASH EQUIVALENTS AT END OF PERIOD

53

Significant Accounting Policies
Scope of funds (cash and cash equivalents) in the Statements of Cash Flows
Funds (cash and cash equivalents) in the Statements of Cash Flows include the following :(1) Cash on hand and entrusted cash(2) Deposits placed with bank and entrusted deposits that can be withdrawn at any time(3) Short-term investments that are readily convertible to cash, have insignificant risk of price fluctuationand original maturities of three months or less from the acquisition date.

Notes to Statements of Cash Flows(Thousands of yen)

12th Fiscal Period
Breakdown of cash and cash equivalents
Cash and deposits
Entrusted cash and deposits
Cash and cash equivalents

54

11th Fiscal Period(July 1, 2007 December 31, 2007)
As of December 31, 2007
￥16,307,505(information only)(January 1, 2007 June 30, 2007)
As of June 30, 2007
￥13,189,044

14,990,073￥31,297,578

14,818,371￥28,007,415

JPR Investment Policies (Reference)
A. INVESTMENT POLICIESBasic Policies
JPR's basic investment strategy centers on investment in urban commercial real estate. The Company will
invest primarily in real estate, which comprises superior urban office buildings and retail properties foundin thriving commercial areas, the land on which they are located, as well as in asset-backed securities thathave such real estate as their primary investments. In light of the returns and risks of these investments,
the Company will invest not only in Tokyo but will attempt to diversify into other cities so as to maximize
portfolio return.
The Company will diversify investments in terms of both tenants and properties, taking into accountthe amount of investment per property, and will thereby seek to achieve stable medium- and long-term
growth. Investment ratio targets are as shown on page 56 under "(3) Investment stance ii) Investment ratio
targets."
Note: For the definitions of "real estate" and "asset-backed securities that have real estate as their primary investments," please refer to the next section
under "2) Types of Investment Assets I) and II)"

Types of Investment Assets
I) "Real estate" refers to the following:i)Real estateii) Real estate leasing rightsiii) Surface rightsiv) Beneficiary interests in the following trusts (including comprehensive trusts in which cash associated withreal estate is also entrusted, but excludes the marketable securities [referred to as "marketablesecurities" hereinafter] defined in Article 2:5 of the Law Concerning Investment Trusts andInvestment Corporations, No. 198 of 1951, including all subsequent amendments; referred to as the"Investment Trust Law" hereinafter)a) Real estateb) Surface rights and land leaseholdsv) Beneficiary certificates in monetary trusts (limited to trusts for which the primary purpose is investment in
the assets listed in i) to iii) above; excludes equivalents to securities)vi) Equity investment based on a contract that specifies that one party will provide funding to be invested in"theassets identified in i) to v) above and the other party will invest these funds in said assets, with theprofits and losses from these investments distributed to investors ("Tokumei Kumiai equity" in Japanese,referred to as "TK equity" hereinafter)II) "Asset-backed securities that have real estate as their primary investments" refer to investment insecurities with over half of their investment backed by real estate, detailed as follows:i)

Preferred securities as defined the Law Concerning Asset Liquidation (Law No. 105 of 1998, including all
subsequent amendments; referred to as the "Asset Liquidation Law" hereinafter)ii) Beneficiary certificates in investment trusts as defined under the Investment Trust Lawiii) Investment securities as defined under the Investment Trust Lawiv) Beneficiary certificates in special-purpose trusts as defined under the Asset Liquidation Law (excludes
beneficiary certificates in trusts listed in I) iv) and v) above)III) The Company may invest in the following designated assets in order to efficiently utilize surplus funds
remaining after the investments listed in I) and II) above:i)Bank depositsii) Call loansiii) Japanese government bondsiv) Municipal bondsv) Commercial paper (refers to instruments defined in Article 2:1:8 of the Securities and Exchange Law)vi) Transferable certificates of depositvii) Designated bonds as defined under the Asset Liquidation Law (refers to instruments defined in Article
2:1:3:2 of the Securities and Exchange Law; however, this is limited to instruments in which the assets
obtained as the business for liquidation by the special purpose company are primarily real estate)55

viii) Beneficiary certificates in loan credit trusts (refers to instruments defined in Article 2:2:1 of the Securities andExchange Law)ix) Cash credits, excluding securities and promissory notes, as defined in Article 3:12 of the Law Concerning
Investment Trusts and Investment Corporations Cabinet Order (Law No. 480 of 2000, including all subsequent
amendments; referred to as the "Investment Trust Law Cabinet Order" hereinafter) and financial derivativetransactions, as defined in Article 3:14 of the same lawx) Rights resulting from financial futures trading, as defined in Article 3:13 of the Investment Trust Law Cabinet
Orderxi) Rights resulting from financial derivatives trading, as defined in Article 3:14 of the Investment Trust Law
Cabinet Orderxii)Beneficiary interests in monetary trusts for the purpose of investments such as those described in i) to xi)
above. Furthermore, the Company may invest in stock (restricted to the stock of the building managementcompany and other companies in the course of the Company's investment activities in specified assets identifiedin I) and II) above).

IV) In addition to the specified assets identified in I) through III) above, the Company may invest in thefollowing assets when considered appropriate or of benefit to the Company in accordance with its basic
investment management policy:i) Trademarks, exclusive licenses and ordinary use rights based on the Trademark Law (Law No. 127 of 1959,
including all subsequent amendments)ii) Rights to use the source of hot springs as set forth in the Hot Spring Law (Law No. 125 of 1948, including all
subsequent amendments) and facilities related to such hot springsiii) Other assets related to the real estate, which are considered appropriate to acquire together with the subject
real estateV) The Company may invest in assets other than the assets under management when considered appropriate
and in line with the organizational operation of trademarks, etc., relating to the Company's name.

Investment Stancei) Investment horizon
The Company will, in principle, hold assets for the medium- and long-term (one to five years and over five
years, respectively) and will not acquire assets for the purpose of short-term trading (less than one year).
ii) Investment ratio targets
Type of Investment Asset

Real Estate Asset

Target Ratios
By Asset Class

The target allocation ratio between office buildings and retail properties
based on acquisition price shall generally be 8:2

By Location

The target allocation ratio between Tokyo(1) and other cities (2)based on acquisition price shall generally be 6:4

Rental revenues from any individual tenant (total rental revenue when the tenant
occupies multiple compartments and/or properties) will, in principle, be limited to lessthan 10% of total rental revenues (3)Asset-Backed
Securities, etc.

The total after-investment value of asset-backed securities(4) shall, in principle, be limited
to less than 10% of the net worth of the Company

Notes:(1) "Tokyo" includes two categories: CBDs (Central Business Districts) comprising Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards;
and Greater Tokyo comprising all other areas of Tokyo, Chiba, Kanagawa and Saitama Prefectures.
(2) "Other Cities" includes all other areas in Japan.
(3) "Rental revenues" includes common charges, parking revenues and storage revenues, but does not include additional usage fees such as after-hours
airconditioning charges. This ratio may be exceeded, however, if there is any potential for tenant changes or if warranted by general considerationsof leasing conditions and other factors.
(4) Investment in asset-backed securities assumes that there will be an opportunity to obtain the relevant property, etc., at the end of the asset-backed
security period.

56iii) Investment policies for development projects
The Company will, in principle, acquire only real estate that generates or is expected to generate stable rental
revenues or similar revenues at the time of acquisition.
The Company will not engage in development investments (projects in which the Company itself develops
property from land and builds buildings). However, the Company may invest in buildings under construction
by third parties prior to their completion if sufficient potential to secure tenants after construction isdetermined and the buildings are confirmed as non-development investments. In addition, the Company may
invest in rebuilding projects for properties that it has already acquired, provided that sufficient potential tosecure tenants after rebuilding is determined and the projects are confirmed as non-development investments.
iv) Equipment and fixtures investment policies
The Company will invest in equipment and fixtures in accordance with an efficient upkeep plan created foreach property and designed to maintain and improve the competitiveness of the property from medium- andlong-term perspectives. In principle, such investments will be within the scope of the depreciation expense of
the individual property, but final decisions will be made in light of the depreciation expense for the portfolio asa whole. However, repairs to common areas will be implemented quickly by the Company from the perspectiveof tenant operational policies, and reinforcements will be made quickly for buildings requiring earthquake
resistance reinforcements in light of the status of tenant operations.
v) Insurance policiesa) Criteria for selecting underwriting insurance companies:
The Company will select fair underwriting insurance companies through independent brokers. The
underwriting insurance company will, in principle, have an insurance rating of A3 or A- or better from
Moody's Investors Service Inc. (referred to as "Moody's" hereinafter) or Standard & Poor's.
b) Earthquake insurance coverage criteria:
The decision to cover earthquake insurance will be made in light of comparisons between thepotential impact of the disaster and property insurance premiums based on the PML for the entire
portfolio. Earthquake insurance may be purchased individually for properties that have high PML.
Note : "PML" refers to the probable maximum loss in the event of an earthquake. PML may be calculated for individual properties
or for the portfolio as a whole. While there is no strict definition of PML (valuation methods will differ depending on the institution
conducting the survey), it is generally found by calculating the probable damage from the largest foreseeable earthquake during
the expected period of use (50 years is the useful lifetime ordinarily assigned to buildings; the largest foreseeable earthquake isa major earthquake of a size seen once every 475 years, having a 10% probability of occurring during any 50 year span). The figure
represents the ratio of projected expenses for restoration of damage to the price of reacquisition.

vi) Sales policya) The Company will select real estate, asset-backed securities that have real estate as their primary
investments, and other investments in its holdings to be sold based on overall considerations of thecurrent status of the asset to be sold, projections of its future profitability and changes in asset value,
and the asset allocation of the portfolio as a whole.
b) The Company will determine asset values each fiscal term and an investment policy committee will
study whether to sell or hold any property that has declined more than 20% in terms of appraisedvalue compared with book value. In addition, the Company may also consider the sale of otherproperties as it sees fit, as warranted by market conditions and other factors. The following are themain considerations in determining sales:
Market forecast
Development forecast for the surrounding area
Profitability forecast
Estimated amount of future investments
Forecast changes in valuation
Considerations of the portfolio as a whole (diversification by geographical location, tenant andasset class, etc.; impact on dividends, etc.)

57vii) Value-up properties
Value-up properties refer to those properties that exhibit the potential for an increase in profitability and asset
value, and have an immediate income stream on acquisition, along with any of the following characteristics:
1. An occupancy rate of less than 80% at the time of acquisition
2. Significant investment return following effective renovation work
In principle, value-up properties occupy a maximum 15% of the total property portfolio (based on acquisition
price). The additional acquisition of value-up properties is also subject to a total portfolio occupancy rate inexcess of 90%.
Utilizing the know-how of its asset management company, the Company implements the following key strategies
in the management of value-up properties:
1. Reinforce leasing activities with the aim of improving the occupancy rate
2. Carry out effective renovations to enhance market competitiveness3. Implement cost controls by increasing efficiencies in management structure
Value-up properties that contribute to stabilizing the total income of the portfolio and fulfill certain criteria
as determined by the Investment Committee are reclassified as core properties, which have the following
characteristics:
1. Improve occupancy rate
2. Raise property value (on an appraisal basis)
3. Increase and stabilize income
The Company will consider the sale of value-up properties, under the aforementioned criteria, on a mediumterm basis over two to four successive business periods. In addition, properties that are reclassified as coreproperties are, in principle, not reclassified as value-up properties.
The Company will consider the sale of value-up properties as one method to realize asset value appreciation.
Core properties refer to office buildings other than value-up properties. Core properties are positioned as
those properties that contribute to the profit stability of the overall portfolio.

Investment Standards
When investing in individual real estate properties, asset-backed securities that have realestate as their primary investments, or other investments, the Company will, prior to making
the investment, perform a general evaluation that considers the current status, future
profitability, risk, location, building and facilities maintenance and management, deteriorationand obsolescence, earthquake resistance, rights, contracts with current tenants, environment,
topography, as well as other factors.
After acquisition of real estate, asset-backed securities that have real estate as their primary
investments or other investments, the Company will make ongoing and effective investments
in facilities and equipment so as to maintain and improve the value and competitiveness of theasset, and will seek to stabilize and expand profitability by increasing revenues and reducing
costs.

58

The major specific investment criteria of the Company are as follows:i) Geographical location
Real estate to be invested in will be located in the following areas:a) Major urban areas: CBDs in Tokyo, Yokohama, Kawasaki, Chiba, Saitama, Nagoya, Osaka,
Kyoto and Kobeb) Other government-designated cities: CBDs in Sapporo, Sendai, Hiroshima, Fukuoka,
Kitakyushu and othersc) Other core cities such as prefectural capitals with populations of 300,000 or more
When investing in retail properties, the Company will identify and determine an appropriate
business area for the property; analyze the business area from a variety of perspectives,
including population, demographic trends, number of households and average income;appropriately measure the latent buying power and growth potential of the business area;and determine the suitability of the tenants and their businesses to the business area. The
Company will also study and analyze competitiveness from a variety of perspectives,
including current market competition, plans for the opening of competitive stores in thevicinity, and future room for development.
ii) Sizea) Office buildings
In principle, the Company will invest in office buildings with total floor space of at least 3,300
square meters and floor space of approximately 330 square meters for each standard floor above
the second story level.
b) Retail properties
In principle, the Company will invest in retail properties of an appropriate size in light of the
future growth potential of their areas, as determined by local characteristics, business area scale
and the standard property size for similar businesses.
iii)Facilities and equipmenta) Office buildings
Giving general consideration to local characteristics or potential for post-acquisition property
modifications, etc., the Company will evaluate specifications on a case-by-case basis.
b) Retail properties
The Company will decide on retail properties individually, comparing them against standard
qualifications and judging from overall factors, including the local characteristics of theproperty's area, versatility as a retail property, potential for conversion to other uses, visitor
access, etc.
iv) Earthquake resistance

The Company will, in principle, invest only in buildings that meet new earthquake-resistancestandards (specified under the Buildings Standards Law) or for which earthquake-resistancereinforcement work has been completed (including properties for which earthquakeresistance reinforcement work has not been done, but can be completed after acquisition).

v) Tenantsa) Office buildings
In principle, no single tenant will occupy more than 50% of a property (parent companies
and their subsidiaries are considered as a single tenant). If a tenant occupies more than 50%,
the Company can acquire the property after an evaluation of the tenant's creditworthiness,suitability and substitution potential.
b) Retail properties
The Company will make a general evaluation of the tenant's creditworthiness, suitability andsubstitution potential.
vi) Rightsa) Co-ownership

The Company will, in principle, seek a co-ownership ratio above 50% in order to assure
sufficient latitude in property management (leasing, improvements, etc.), but may acquire
properties with an ownership ratio below 50% on a case-by-case basis after considering thenature and creditworthiness of other owners and the characteristics of the property.

59

The Company shall, in order to assure sufficient latitude in disposal of the property, confirm
whether special contracts or other agreements providing for preferential purchasing rights or
options among the other owners will be executed and whether restrictions will be placed on
the transfer of rights, and if so, the nature of these restrictions.
The Company will attempt to assure the stability of revenues by fully confirming the natureand creditworthiness of other owners and, where possible, providing for appropriate
procedures. (This may include, but is not limited to, signing contracts prohibiting thedivision of joint equity and reaching agreements on the registration of rights and the mutual
use of land).
b) Unit ownership
The Company will, in principle, reserve for itself at least 75% of the voting rights inmeetings attended by unit owners in order to assure sufficient latitude in improvements.
However, it may make individual decisions based on a general evaluation of the nature andcreditworthiness of other unit owners.
The Company shall, in order to assure sufficient latitude in disposal of the property, confirm
whether special contracts or other agreements providing for preferential purchasing rights or
options among the other owners will be executed, and whether restrictions will be placed on
the transfer of rights, and if so, the nature of these restrictions.
The Company will attempt to ensure the stability of revenues by confirming the operationsof the management union (reserves, liability ratios, insurance, etc.) and will take suchindividual measures as are required. (This may include, but is not limited to, increasing
accumulated amounts within the Company itself, or providing for insurance on the joint
areas and registration of land rights separately from the management union.)c) Leaseholds
The Company will, in principle, invest in leaseholds as specified in the old Leasehold Law(Law No. 49 of 1921, including all subsequent amendments) and the Land and Building
Leasing Law (Law No. 90 of 1991, including all subsequent amendments).
The Company will carefully study the nature of the proprietary right holder of land and will
make its decision after fully investigating the impact of the provisions for rent revisions,charges for renewing the leasing contract, charges for approval of rebuilding proposals,
charges for the approval of sales proposals and other factors in concerning profitability.
d) Collateral rights and usufructuary rights
The Company will confirm the existence of mortgages or other collateral rights on the
proposed property at the time of purchase, and the possibility of extinguishing such rights on
closing.
The Company will make its decision after confirming the existence of usufructuary rights(for example, surface rights or easements) set forth by third parties and the impact that suchrights will have on profitability.
vii) Investment amounta) Minimum investment per property
The minimum investment per property (only the purchasing price, exclusive of taxes,
acquisition costs, etc.) will, in principle, be more than 1 billion yen. A property can beacquired for a lesser amount under the following circumstances:
When acquiring part of a property valued in total at over 1 billion yen
When acquiring a property with an appraisal value of more than 1 billion yen, but acquired
after negotiation for a lesser amountIn cases where several properties are being acquired together as a packageb) Maximum investment per property
The ceiling on the investment amount per property will be one-third of the total investment
in real estate, asset-backed securities and other investments already held. Generally, however,properties that exceed this ratio can be acquired in cases where this is deemed advisable. The"total investment in real estate, asset-backed securities and other investments already held"refers to the total appraised value of investments up to the previous period, plus the price ofinvestments purchased in the current period (exclusive of taxes, acquisition costs, etc.), plus
the amount to be invested in the new property (exclusive of taxes, acquisition costs, etc.).

60c) Restrictions on acquisition price
The acquisition price for investments including real estate and asset-backed securities will, in
principle, be limited to 105% of the appraised value of the investments. However, provided that theproperty acquisition does not cause the total property acquisition fund to fall below the NOI yield
criterion for the current period, the above-mentioned appraised-value upper limit of 105% can beexceeded in the following cases:
Properties that, by long-term fixed leasing contracts, are forecast to contribute to stable cash flow
and those that are expected to generate a certain profit for dividends in the medium- to long-term
Properties that, in terms of scale, location or general standpoint, are judged to contribute to anincrease in total fund quality and can be expected to generate a certain profit for dividendsviii) Selection guidelines concerning real estate acquisition ownership type
The Company acquires real estate under direct ownership or on an entrusted basis, acquiring
beneficiary interests to the property. The decision as to which form of ownership the Company willtake is determined after considering the requirements of the existing owner, the cost of transferring
rights and a number of other factors.

B. FINANCIAL POLICIESFund Management Policies
I) Leasehold and security deposits
For beneficiary interests
All leasehold and security deposits by tenants will be accumulated within the trust account, but theCompany may consider reducing the reserve amount if warranted by accumulated historical data,
the establishment of commitment lines and other provisions.
For real estate, real estate leaseholds and surface rights
Leasehold and security deposits by tenants will be deposited in full to a commercial bank savings
account or time deposit account. However, the Company may reduce reserves in order to more
effectively utilize these funds if warranted by accumulated historical data, the establishment ofcommitment lines and other provisions for the maintenance of efficiency and security.
II) Cash and bank deposits in the trust account (for real estate in trust)
All cash will be deposited in ordinary savings accounts or time deposit accounts at banks withshort-term debt ratings of at least P-2 from Moody's.
III) Cash and bank deposits in the Company accounts
The provisions of II) above will apply to cash and bank deposits in the Company accounts.
However, this will not include savings accounts established for use in the execution of loans byfinancial institutions or the payment of interest on loans.
Surplus funds will, in principle, be paid out in the following order of priority; any balances will beadministered as described below:
Reinvestment (refers to a use in purchasing properties or capital expenditures)
Cash distribution to investors (however, no cash distributions will be made to investors inexcess of profits in the absence of changes in current tax treatment of cash distributions inexcess of profits)
Partial repayment of borrowings (however, this will be given the highest priority when therepayment maturity date of the loan agreement arrives, regardless of the priorities listed
above)IV) Derivatives
The Company will use financial futures, options and other derivatives only for the purpose ofhedging interest rate fluctuation risks and other risks generated by the liabilities of the Company.

61

Issuance of Additional Investment Units
The Company may issue additional investment units in a progressive manner for the purpose ofassuring stable, long-term asset growth as warranted by an accurate assessment of the market and upon
consideration of the dilution effects to existing units (reduction in equity of existing units from the issuingof new units; reduction in the per-unit net asset value or cash distribution of existing units).

Borrowings and Issuance of Corporate Bonds
I) Basic policies
The Company will seek to actively expand the size of assets and maintain stable cash distributions toinvestors by achieving an effective combination of stable long-term fund-raising and flexible shortterm fund-raising.
II) Loan to value (LTV)
Loan to value (LTV) refers to a ratio calculated as shown below and will be used as a measurementof the ratio of liabilities to total assets of the Company.
LTV = (Borrowings + Corporate bonds) / Total assets
The Company will, in principle, maintain LTV at levels of no higher than 55%, but may temporarily
exceed this level due to the acquisition of properties or changes in appraised values.
Note: For purposes of this calculation, total assets refers to the amount shown in the assets column of the period-end balance sheet for the most recent
period prior to the calculation of LTV, and is found by adjusting the period-end book value of tangible fixed assets for the difference between the
period-end book value of the tangible fixed asset and its appraised value.

C. PROPERTY-RELATED BUSINESS ADMINISTRATION POLICIESProperty-related business refers to property management, general tenant agency, lease manager/
construction manager services and property transfers.
This business is necessary and effective for the achievement of growth for the Company. The Company willadminister this business in accordance with the following policies.

Asset Manager and Property Manager
The growth of the Company requires integrated management by the Asset Manager (AM) and expert
management by the Property Manager (PM), with the PM overseeing the facilities management, leasing
management and construction management of individual properties.
In order to achieve more integrated management, the AM may seek the advice of third-parties regarding
leasing management and construction plans for real estate invested in. The Company initially selectedTokyo Tatemono Co., Ltd. as the party to provide this advice (the Lease Manager/Construction Manager).
The AM will select PMs with high degrees of management expertise, seek to concentrate the PMs for eachgeographical area, rigorously seek to homogenize management across the portfolio and work to maximize
unitholder profits.
The AM will compare the capabilities and merits of a number of companies in its selection of property
managers.
Existing PMs and candidates include: Tokyo Tatemono, a company that supports the AM in its leasing
management activities and refurbishment plans; PMs that operate under existing contracts of properties
acquired by the Company and possess established knowledge of tenants and locations; and other PMs. Final
selection is also based on a variety of factors such as management expertise and efforts to integrate PMs inline with property proximity.

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Commissioned General Tenant Agents
General tenant agencies will be commissioned to Tokyo Tatemono Co., Ltd., Yasuda Real Estate Co., Ltd.,
Taisei Corporation and other agents (Commissioned General Tenant Agents).

Property Transfer Agents
Tokyo Tatemono will be commissioned to provide property transfer services in order to ensure the smooth
execution of property purchases and sales. This will not be limited to the real estate, real estate leasing
rights and surface rights, but will include real estate in trust as well. Services will include confirmationof leasing status, confirmation of building and facility maintenance and management, confirmation andestablishment of rights, preparation and confirmation of delivery and other ancillary work.

Other Investment Policies
I) The Company will administer its assets in such a way that the ratio of the total price of designated realestate (real estate, real estate leasing rights, surface rights, or real estate in trusts for which real estate,land leaseholds, or surface rights are the entrusted assets) to the total price of designated assets ownedby the Company is 75% or more.
II) The Company will administer its assets in such a way that the ratio of real estate, real estate leasing
rights, surface rights, real estate in trusts (refers only to trusts covering real estate, surface rights or landleaseholds), and TK equity (refers to contracts specifying only investment in real estate, real estate leasing
rights or surface rights) to total assets is 75% or more, which is the ratio established by the Ministry of
Finance.
III)The Company may modify the above ratios at any time as warranted by factors such as funding trends,
market trends, general economic conditions and real estate market trends.
IV)Lending of assets in the portfolioa) The Company may lend (for such purposes as parking space and the installation of billboards) realestate, real estate leasing rights and surface rights from among the assets listed on page 55 in "A.
Investment Policies (2) Types of investment assets" in order to more efficiently administer assets andachieve higher investment performance.
b) If the lending of real estate described in a) above results in the acceptance of leasehold and security
deposits or other similar cash funds, the acceptance of these funds will follow the guidelines listed in"B. Financial Policies (1) Fund management policies I) Leasehold and security deposits," on page 61.
c) The Company shall not lend assets other than real estate, real estate leasing rights and surface rights.

D. DISTRIBUTION POLICIESThe Company's fiscal period is for six months, from January 1 to June 30, and from July 1 to December 31,
each year. The Company makes cash distributions to unitholders listed on the unitholders list at the end ofeach fiscal period, or to eligible registered pledgees.

Distributable Amount

Income available for distribution by the Company (the "distributable amount") equals the amount calculated
by adding/deducting capital gains/losses and gains/losses on redemption to rent, common expenses, parking
charges, additional service charges, facility charges, facility installation fees, late payment penalties, termination
penalties or similar cash related to termination of lease agreements generated from real estate (including
beneficiary interests and underlying properties of any other assets acquired by the Company) and other income,interest/dividend income and similar income generated from other rental business and deducting expenses(including depreciation and amortization), interest payments, asset management fees, and after covering theentire amount of net loss carried forward if it exists.

2 Determining Amount of Distribution

The Company determines the amount of distribution, which must exceed 90% of the Company's distributable
income as stipulated in Article 67:15 of the Special Taxation Measures Law (Law No. 26 of 1957, including all
subsequent amendments). However, the actual amount of distribution may not exceed the distributable amount,as defined above. In addition, the Company can reserve funds for capital expenditure, interest payment, dividend
payment or similar purposes, which are necessary for maintenance of or increasing the value of assets.

63

Retained Earnings
Retained earnings not distributed from the distributable amount will be allocated based on the asset
management policy of the Company.

Distribution of Cash Exceeding Earnings
In cases when the distribution is less than 90% of the distributable amount, or when the Company makes
an appropriate decision based on the trend of the economic environment, the real estate market, theleasing market or other conditions, the Company may distribute cash exceeding earnings for the relevant
period, as the sum of the distribution amount set in (2) above and the amount decided by the Company
with the upper limit of the depreciation amount reported at the end of the fiscal period. In such a case, if
the cash distribution does not meet the conditions of special tax treatments for the Company, the amountdecided by the Company for the purpose of meeting the conditions may be distributed in cash.
As long as the current tax treatment requires investors to calculate capital gains/losses each time suchinvestors receive cash distributions exceeding earnings, the Company will not conduct cash distribution
exceeding earnings to investors. However, if the board of the Company decides that cash distributions
exceeding earnings is required to satisfy the "qualification test of distribution deductible", the distribution
exceeding earnings is allowed following the above distribution policy.

Method of Distribution
Distributions are paid in cash based on the number of investment units held to unitholders who are listedon the final unitholders' list at the end of each fiscal period, or to eligible registered pledgees, within threemonths, in principle, from the end of each fiscal period.

Extinctive Prescription
The Company will be released from its payment obligation of distributions after a lapse of three years fromthe date of starting payment. No interest is payable in respect to unpaid distributions in arrears.

Issuance of Additional Investment Units
In the event the Company issues additional investment units during a fiscal period, the Company can pay
cash distributions in connection with the aforementioned additional investment unit issue, calculated on a
pro rata basis and subject to approval by the Company's Board of Directors.

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Investor Information
Address of Japan Prime Realty Investment Corporation (JPR)
9-9 Yaesu 1-chome, Chuo-ku, Tokyo 103-8285, Japan

Date of Establishment
September 14, 2001

Listing

Tokyo Stock Exchange (Securities Code: 8955)

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 of each year

Transfer Agent

Mizuho Trust & Banking Co., Ltd./2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Location of Records

Main Branch, Stock Transfer Agency Division
Mizuho Trust & Banking Co., Ltd./2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Mailing Address

Stock Transfer Agency Division
Mizuho Trust & Banking Co., Ltd.
1-17-7 Saga, Koto-ku, Tokyo 135-8722

AgentsMizuho Trust & Banking Co., Ltd.
(All branches nationwide)
Mizuho Investors Securities Co., Ltd.
(Head office and all branches nationwide)

Web Site

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

Contact (Tokyo Realty Investment Management, Inc.)
Tel: +81-3-3231-1051
Fax: +81-3-3274-7775

Annual Schedule (Provisional)
Release of Business Report OctoberDecemberFiscal period ends

Cash distributions September

AugustAnnouncement of the fiscal
period results

Appropriate disclosure
on web site

June

Fiscal period ends

March
April

February

Announcement of
the fiscal period results

Cash distributions

Release of Business Report

This document contains a translation of selected information described in the Financial Statements and Performance Information Report
prepared pursuant to the Investment Trust Law of Japan and the Financial Instruments and Exchange Law, for the period from July 1,
2007 to December 31, 2007 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 Statements and Performance Information Report for the aforementioned period should be referred to as the originalsof this document. English translations for legal, accounting, tax and business concepts used herein may not convey precisely identicalconcepts 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,
the original Japanese documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc.,
nor any of their respective directors, officers, employees, partners, unitholders, agents or affiliates will be responsible or liable for thecompleteness, appropriateness or accuracy of English translations or the selection of portion(s) of any document(s) translated into
English. No person has been authorized to give any information or make any representations other than 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 been authorized 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 and involve risks and uncertainties, and actual results may
differ materially from those in the forward-looking statements as a result of various factors.

65