35

Japan Prime Realty Investment Corporationth Fiscal Period

Securities code 8955

Presentation Material
For the 35th Fiscal Period Ended June 2019

(Asset Manager)
Tokyo Realty Investment Management, Inc.

Table of Contents and Disclaimer

Disclaimer

Table and Contents

1. Characteristics of JPR

2p

2. Operational Status and Growth Strategy

4p2-1. Summary of Financial Results

5p2-2. Internal Growth Strategy

7p2-3. External Growth Strategy

15p

2-4. Financial Strategy

20p

2-5. Sustainability

21P

3. Financial Results and Operating Forecasts

26p

4. Appendix

39p

5. Glossary

62p(Asset Manager)Tokyo Realty Investment Management, Inc.
Financial Instruments Exchanger (investment management business)
Registration Number: No.362 (Kinsho) Head of Kanto Local Finance Bureau• This material contains information that constitutes forward-looking
statements. Such forward-looking statements are made by Japan Prime
Realty Investment Corporation (JPR) and Tokyo Realty Investment
Management, Inc. (TRIM) based on information currently available, and are
therefore not guarantees of future performance. Actual results may differ
materially from those in the forward-looking statements as a result ofvarious factors including known or unknown risks and uncertainties.
• This material is solely for the purpose of providing information, and is notintended for the purpose of offering or soliciting investment, or as a meansof marketing activities. Please refer any inquiries for possible purchase ofinvestment units or investment corporation bonds of JPR to your securities
companies.
• Although JPR takes all possible measures to ensure the accuracy of thecontent provided in this material (including references to legislation andtaxation), it makes no guarantee as to the accuracy or reliability of thecontent. Furthermore, the content may be subject to change without priornotice.
• The photos used in this material include those of the assets other than what
JPR owns or plans to acquire. Please note that for assets indicated as landwith leasehold interest, JPR owns only the land and does not own any
building on it.
• Unless otherwise noted, the figures indicated in this material are rounded
down to the nearest specified unit for monetary amounts and space areas,
and rounded off to the nearest specified unit for percentages and otherfigures. Accordingly, the sum totals of monetary amounts or percentages ofrespective items may not match the sum totals of actual figures.

Cover photograph：JKY Kojimachi Bldg. and FUNDES Ueno

1

JAPAN PRIME REALTY INVESTMENT CORPORATION

1. Characteristics of JPR

2

1. Characteristics of JPR

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

Japan Prime Realty Investment Corporation(abbreviated as JPR)

Securities code

8955

Listing dateJune 14, 2002 (17 years since listing)End of fiscal
periodOperational
standard of
portfolio(Target investment
ratio)

Asset Manager

Sponsors(shareholding
ratio)

June and December(Ratio by asset class)
Office 70～90% / Retail 10～30%(Ratio by area)
Tokyo 80～90% / Other cities 10～20%
Tokyo Realty Investment Management Inc.
(abbreviated as TRIM)
Tokyo Tatemono (52%)
Yasuda Real Estate (18%)
Taisei Corporation (10%)
Sompo Japan Nipponkoa Insurance (10%)
Meiji Yasuda Life Insurance (10%)■Characteristics of JPR
track record of stable management for over 17
1 Ayears
Since listing, JPR has steadily expanded its asset size while enhancing the qualityof its portfolio.

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

3 Superiority of a developer-sponsored REIT

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

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

Asset size
(After the asset replacement)

63 properties 439.5 bn. yen
Ratio by asset(After the asset replacement)(Area)

Tokyo(Asset class)

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

317.7 bn. yen・ 72.3 %Upward revision of rents

10 consecutive fiscal
periods(Dec. ’14 ～ Jun. ’19)

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

84.7 %
76.2 %

LTV

40.9 %
Ratio of long-term, fixed interest rate debts

98.9%
Credit rating

1. Properties from sponsor pipelines refer to properties acquired from sponsors, etc. and properties acquired based on information provided bysponsors. Sponsors, etc. represent the five sponsor companies of JPR, their affiliated companies and special purpose companies (SPCs) in which thesponsors have made equity investment. Ratio of properties from sponsor pipelines refers to the ratio of (planned) acquisition price of properties
from sponsor pipelines over the total (planned) acquisition price of the entire portfolio.

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

3

JAPAN PRIME REALTY INVESTMENT CORPORATION

2. Operational Status and Growth Strategy

4

Status of Distribution per unit and NAV

2-1. Summary of Financial Results

Distribution per unit (DPU) and NAV per unit have continued to increase stably over a long periodof timeDPU 7,380 yen

NAV per Unit 353,795 yen

Continuing a record high since listing
Compared with forecast +30 yen
Period-on-period comparison +54 yen / +0.7 %Continuing to increase steadily
Period-on-period comparison+12,788 yen / +3.8 %(Forecast DPU：7,350 yen)

DPU(actual)

DPU(compared with forecast)

NAV per unit

（yen/unit）（yen/unit）

7,500

7,213

7,223

7,245

7,326

7,380

400,000

353,795

7,048

306,192

7,000

300,000

6,756

6,500

320,060

329,845

341,007273,915 283,129

200,000

6,0000100,0000
Jun. '16

Dec. '16

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19 （period）

Jun. '16

Dec. '16

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19（period）

5

2-1. Summary of Financial Results

Business Environment Perception, results and outlook

Plans for the 35th fiscal period ended Jun. 2019 are progressing steadily thanks to a buoyant officeproperty leasing market and JPR continued to achieve stable growth.

Outlook

Results

Business
environment
perception

Emphasis was placed on “continuation of contract renewals with upward revision of rents,” “measures to increase NOI,” “Vigorous selective
investment” and “Diversify funding methods”
Internal Growth Strategy

External Growth Strategy

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

• Real estate prices in Central Tokyo have mostly reachedthe upper limit• Properties in regional cities are also hard to acquire at
appropriate prices, with their cap rates dropping further• Long-term interest rates have fallen sharply since the endof 2018, and the risk of rising interest rates has receded.
• Due to mounting political and economic risks worldwide,
the monetary easing policies of the US Federal Reserveand the European Central Bank are more aligned.
• The BOJ has also stated that it will continue its monetaryeasing measures for the time being.

• Occupancy rate based on concluded contracts
99.2%(previous period 99.2%)• Upward revision upon contract renewal (monthly rent,net)+15.2 million yen• Acquisition of additional stake in Shinagawa Canal Building[Debt procurement result in the 35th fiscal period (short-termloans excepted)]• Average maturity• Raising of rents upon tenant replacement (monthly rent,net)+5.1 million yen• Occupancy rate based on generated rents during theperiod remained above 98%.
• The revision of rents made progress as planned.

• The favorable market environment is assumed to continue.
• The high occupancy rate is expected to be maintained, andthe revision of rents is assumed to make steady progress.
• Deterioration of business confidence is feared in face ofChina’s economic slowdown and the consumption tax hikein October 2019.
• Aim to maintain growth pace by maintaining andimproving building competitiveness and improving tenant
relations

Acquisition price 170 million yen• Implementation of asset replacement with Tokyo
Tatemono
Total acquisition price: 9,550 million yen (2 properties)
Sale price: 5,800 million yen• Continue vigorously selective investments with a focus on
their location and quality.
• Investigate acquisitions focusing on sponsors’ pipelines forthe time being.
• Plan to add hotels (urban accommodation properties) toinvestment targets.

(Before refinancing)7.4 years ➔ (After refinancing) 9.4
years• Average debt interest rate

(Before refinancing) 1.67% ➔ (After refinancing) 0.56%• JPR issued Green Bonds for the first time in July 2019
Issue amount: 5,000 million yen
Maturity: 10 years• Continue refinancing with an emphasis on lengthening
borrowing periods while endeavoring to reduce interest
costs.
• Diversify funding methods and ensure short-term liquidity
to enhance refinance risk tolerance.

62-2. Internal Growth Strategy

Occupancy Status

Vacancies were filled quickly and high occupancy was maintained.
Occupancy rate are expected to remain stable at a high level in and after the Dec. ’19 period.
■ Move-Ins/Move-Outs■ Occupancy Rate

(Change in move-in/ move-out spaces and forecast)Occupancy rate based on concluded cntracts
Occupancy rate based on generated rents

(%)

100

97.8

98

98.3

97.3
96

99.2

98.5

98.4

99.3

99.0

98.6

98.8

98.6

98.2
98.3

97.9

97.6

99.2

Jun. ‘19
move-in/move-out net
space

End of Jun. ’19 period
Vacancyspace

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

End of Dec. ‘19period
assumed vacancy
space3,939 m2

-2,362 m2

6,559 m2

-1,648 m2

4,928 m2

(Move-in/ move-out spaces)
Move-out

Move-in(㎡)(period)

96.9

96.5

End of Dec. ’18period
Vacancyspace

9,979

Jun. '19

94

Dec. '19

The most recent
5-period average
9,573 m2

7,616

7,688

The most recent
5-period average
9,676 m2

9,337

(forecast)(Major move-in/move-out properties)
920

Dec. '19

Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 Dec. '19 Jun. '20 (period)(forecast)Jun. '19
Move-out(forecast)Jun. '19

Dec. '19 (period)

Move-in(㎡)

JPR Harajuku Bldg.

■ Average rent free period

Olinas Tower(month)6-701

BYGS Shinjuku Bldg.
Kanematsu Bldg.

3

Kanematsu Bldg. Annex

2.4

0-1,708

1.9

1.8

2.0

1.5

1.8

1.0
Yume-ooka Office Tower
Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 Dec. '19 (period)
JPR Sendagaya Bldg.
(forecast)

1. Occupancy rate based on concluded contracts and occupancy rate based on generated rents represent period-average figures.
2. The figures for the occupancy rate based on concluded contracts and the occupancy rate based on generated rents for the 36th fiscal period (Dec. ‘19)
are estimates that reflect consents regarding move-ins and move-outs that will become effective in the fiscal period. The respective figures for the 37th
fiscal period (Jun. ‘20) are estimates based on assumptions by JPR regarding move-ins and move-outs becoming effective in the fiscal period.

1,706
701

-250 -675 231 706-1,205-1,222480-2,291

2,445
2,291

-925

925

-817

817

7

Status of Rent

2-2. Internal Growth Strategy

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

Jun. ‘19(million yen)

+30

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

Upward revision amountRate of upward revision

Ratio of contracts with upwardrevision+17.1 million yen (monthly rent)

+6.8%

51.9%

Upward revision (left axis)
Rate of upward revision (right axis）

Downward revision (left axis)

Upward revision
undernegotiation: 5.9
million yen

10.8
7.4

+20

7.6

7.5

6.8

+10
+14.6

+10.0

+23.2

+7.4

+17.1

-5.8

-3.9

-3.0

-0.2

-1.9

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19-10

Jun. ‘19(%)(million yen)

13

+15

9

+10

5

+5

1

+0

-1.6
-3
Dec. '19 （period）

36.7

44.6

45.9

48.1

Ratio of contracts withupward revision (right axis)

51.9

0Dec. '17

Jun. '18

Dec. '18

Jun. '19（%）

80(No. ofcontracts)

50

40

25

0
Dec. '19 （period）

0100

Jun. '17

Downward revision (left axis)
Upward revision (left axis)
Rate of increase in rent upon tenant replacement (right axis)

27.6

16.9

(%)

30

23.7

16.0

20
10

+4.7

+3.7

+9.0

+7.2

+6.9

+9.4

-1.3

-1.0

-4.7

-0.6

-1.8

-1.2

'17.6

'17.12'18.6'18.12'19.6-10'19.12 （period）

0(Ratio of contracts with increase in rent upon tenant replacement)

Number of contracts withupward revision (left axis)

200

75.0%

（forecast）(Ratio of contracts with upward revision)(No. ofcontracts)+23.7%-5（forecast）

Number of contract
renewals (left axis)+6.9 million yen(monthly rent)

21.1

+8.3

+0

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

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

Number of tenant
replacements (left axis)

71.0

67.6

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

61.0

76.9

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

100

75.0

50

Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '190Dec. '19 （period）（forecast）

8

Status of Rent

2-2. Internal Growth Strategy

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

Lower than market rent

Higher than market range (new contract, etc.)

19,000Within market range

Higher than market range (except for new contract)

18,000Higher than market
rent（million yen）

+30

Ratio by period-on-period+0.8%

17,000

+1.0%

+0.4%

+1.7%

+0.7%

+1.7%

16,000+15

15,000+0

Jun '16 Dec '16 Jun '17 Dec '17 Jun '18 Dec '18 Jun '19 （period）
Gap in rents

Lower than market
rent

-15

5.1

-30
-45
Dec. '19

Jun. '20

Dec. '20

Jun. '21（period）%(period-on-period
comparison -0.9%)(Reference)
Gap in actual rents-10.4%(period-on-period-1.6%)■ Change in Average Rents by Area (existing office properties)◼ Percentages of space◼ Ratio of change in upward revisionby the time of contract renewal
Dec. ‘21 fiscal'21.12期以降
period later

9%Dec. ‘19 fiscal
period19%

Jun. ‘21 fiscal
period

Twice
34%

26%

Dec.’20 fiscal
period13%

Three times
9%
Total 98
contracts

Central Tokyo（yen/tsubo）

23,00021,000Greater Tokyo

Other cities

Ratio by period-on-period

+0.7%

+2.8%

+0.9%

+1.5%

+0.3%

+1.0%

0.1%

+0.6%

+0.3%

+1.4%

+0.5%

+0.3%

+4.7%

+1.5%

+2.1%

+0.8%

+1.0%

+0.5%

19,00017,00015,000Once
57%

Jun.’20 fiscal
period34%

1. “Market rent” and “Market range” refers to rent level set by TRIM for office buildings held by JPR based on assessment of CBRE Inc. and advice from Tokyo Tatemono.
2. “Gap in rents” refers to the difference between the market rent (Dec. ‘19~ Jun. ‘21) and the ongoing rent, and “Gap in actual rents” refers to the difference between
the top of market range and the ongoing rent.

13,00011,000Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 （period）
1. “Existing office properties” refer to properties held continuously since the Jun. ‘16 period.
2. Average rent indicates the assumed average rent at full occupancy.

92-2. Internal Growth Strategy

Internal Growth Initiatives

On top of measures to achieve continuous raising of rents and effective value enhancement, energeticallyendeavor to reduce expenses■ Basic Strategy
Set target rents, the target for raising rents for new contracts
and contract renewals, for respective office properties. Byclarifying the target, aim to conduct strategic negotiations forraising rents and maximizing rents upon tenant replacement

Strategically utilize
target rents

Reinforce investmentsfor value enhancement

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

Internal Growth
Deliberately responding to tenants and creating safe andsecured environments are important initiatives that positively
affect rent negotiations as well as help prevent contract
cancellations from happening

Continuously enhancetenant satisfaction

Increase NOI by
reviewing property
management andoperation methods

Review property management and operation methods while
paying attention to maintaining and improving the management
quality, in an effort to promote reduction of rental expenses andincreasing incidental revenues■ Example of construction works for value enhancement (Kanematsu Bldg. and Kanematsu Bldg. Annex)
Significant improvement in earnings was achieved through comprehensive measures
including strategic leasing activities, negotiations to raise rents, and conversion.
Increase in rent upon tenant replacement

Rate of increase in monthly rent
+17.1%
Kanematsu Bldg.

Kanematsu Bldg. Annex

Large spaces totalling 1,062 tsubo
were vacated in the above two
properties in the Jun. ‘19 period

Upward revision of rent at time of contract
renewalRate of increase in monthly rent
+6.4%

Estimated contribution to DPU
Rate of increase inmonthly rent
(Total for affected
tenants)+13.9%

Increase of rental space through conversion ofcommon-use areas+49 yen/fiscal period
Appraisal value of Kanematsu
Bldg. Annex (YoY change)+930 million yen+36.9%

1. The rate of increase in monthly rent is estimated based on tenant changes agreed for period from January 2019 to January 2020.

10

2-2. Internal Growth Strategy

Status of Construction Works

JPR actively carried out value-adding construction work aimed at increasing property competitiveness.
Maintenance work was carried out continuously based on appropriate repair plans.
■ Example of construction works for renovation (Jun. ’19 period)■ Changes in Construction Costs and Depreciation
Depreciation(million yen)

2,000

1,921

1,907

1,943

<Tokyo Tatemono Yokohama Bldg. Building Age: 38 Years 1F entrance>

Repairs and maintenance
修繕費

Capital expenditures

1,943

1,965

1,988

1,983

1,974
1,824
1,500

1,325
1,146

1,000

500

563

624
216

306

383

1,126
523

505

526
418
施工前

After construction works
施工後<JPR Naha Bldg. Building Age: 27 Years Toilets in common-use areas>0Jun. '17

Dec. '17

Jun. '18

Dec. '18

Jun. '19

Dec. '19(forecast)Jun. '20 (period)(forecast)■ Summary of Construction Works and Properties (Jun. ‘19)
• Total construction costs=>Of which, works of value enhancement=>(Of which, works to switch to LED lamp, etc.)

1,848 million yen
1,026 million yen
165 million yen◆Kawaguchi Center Bldg. (184 million yen Air-conditioning, security, etc.)◆JPR Ningyo-cho Bldg. (142 million yen Toilets, etc.)◆Tokyo Tatemono Yokohama Bldg. (173 million yen Interior, air-conditioning, etc.)◆JPR Naha Bldg. (102 million yen EV, RN, etc.)

Before1. Repairs and maintenance expenses indicate the amount obtained by deducting the repairs and maintenance expenses equivalent to the expenses for restoration to original condition, paid by tenants, from the amount actually recorded for each fiscal period.
2. EV and RN represent “work on elevators” and “renovation”, respectively. 3. Each of the construction costs indicates the amount that includes construction management fees.
4. Construction works (planned) are extracts from long-term plans and do not guarantee implementation.

After

11

MEMO

12

2-2. Internal Growth Strategy

Retail Portfolio

JPR’s retail properties are situated in prime locations or in areas close to stations and with highcommercial potential
The 15 properties comprising the retail portfolio are all located within a 5-minute walk from the nearest station
The majority of these are located within a 1-minute walk from the nearest station.
Portfolio breakdown

Type

Urban type

Station-front type

Characteristics

Urban retail properties situated on prime locations in Tokyo and Osaka

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

6物件

NOI yield

4.1%(acquisition price)

5.8%

9 properties / 58.5 billion yen (asset size)

FUNDES
Ueno

JPR
Chayamachi
Bldg.

FUNDES
Suidobashi

JPR
Jingumae432

JPR Ginza
Namiki-dori
Bldg.

Yurakucho
Ekimae Bldg.
(Yurakucho Itocia)

6 properties / 46.1 billion yen (asset size)

Shinjuku
Sanchome
East Bldg.

Station-front
Urban type
type
Retail9 properties 14 properties 6 properties

56%

JPR Shibuya
JPR Umeda Loft Bldg.
Tower Records Bldg.

1. Ratios of urban front and station front-type properties are calculated based on acquisition price.

Tanashi ASTA

Kawasaki Dice Bldg.

JPR
Musashikosugi
Bldg.

Musashiurawa Shopping
SquareCupo-la Main Bldg.

Housing Design
Center Kobe

44%

13

2-2. Internal Growth Strategy

Status of Occupancy Rate and Lease Contract in Retail properties

The occupancy rate of JPR’s retail properties remains stable at almost full occupancy.
■ Occupancy Rate (Retail properties)
(%)

99.9

100.0

100.0

99.7

99.9

99.9

99.9

99.6

100.0
98.0

■ Example of Internal Growth of Retail Property (Kawasaki DICE Bldg.)
99.9

99.4

99.4

99.2

99.9

99.9

100.0

99.8

99.9

99.9

Kawasaki DICE bldg.

Space of 481 tsubo on 4F was vacated in Apr. ‘18.
Measures such as relocation of existing tenants within building
and leasing activities to find new tenants were implemented.

96.0
Occupancy rate based on concluded cntracts
Occupancy rate based on generated rents

94.00<Illustration of Tenant Replacement>

Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 Dec. '19 Jun. '20 (period)(forecast)(forecast)■ Status of Lease Contract (Retail properties)
Type of tenant (space ratio)

4F
Apr. ‘18
VacatedType of rent (space ratio)



Fixed rent + Commission

5%

3F



Multi tenants

Jul. ‘18
Moved tolarger spaceJul ‘19
Moved in23%

Entire building

Fixed rent

77%

95%

Type of contract (space ratio)

Remaining contract period(space ratio)

Fixed-termbuilding lease

13%

Less than
2 years

41%

30%
2 years or more andless than 3 years
Ordinary building lease

87%

1%

3 years or more andless than 5 years

Jan. ‘19
Moved tolarger space

2F

5 years
or morethrough the replacement of tenants occupying as much as 18% (705tsubo) of the total leasable area and agreements to raise the rents ofexisting tenants,as shown in the figure above.
Monthly rent increased by 11.5% (total for affected tenants)

28%

1. The rate of increase in monthly rent is estimated based on tenant changes agreed for period from August 2018 to August 2019.

14

2-3. External Growth Strategy

Investment Policy

Addition of Hotels (Urban Accommodation Properties) to Investment Targets[Investment Policy] Continue vigorously selective investments focusing on quality, mainly office properties in Tokyo[Composition of Portfolio]

Office [Investment Ratio] 70 to 90%
Characteristics

Category

GrowthPotential- Relatively high growth can be expected- Rents and occupancy fluctuate depending on
corporate earnings and real estate rental
market conditions

Office in Tokyo

Office inOher Cities

Urban retail properties, etc.
[Investment Ratio] 10 to 30%
Characteristics

Stability

Category- Stable occupancy- Stable earnings can be generated due to highproportion of tenants on long-term fixed rent
contracts
Urban Retail
Properties

Urban Accommodation
Properties (Hotels)[To be added]■ Addition of hotels (urban accommodation properties) to asset classes• Submission of proposal for amendment of Articles of Incorporation
to the 12th General Meeting of Unitholders (to be held on
September 5, 2019)[Aims]• Achieve sustainable growth of JPR and improve
unitholder value by increasing investment
opportunities• Further expansion in demand for hotel assets can be
expected in the future mainly due to government
policy to promote Japan as a tourism-oriented country.

[Operating strategy] Focus on stability of earnings• Conclude long-term lease agreements generally with fixed
rent with outside specialists with a proven track record inoperating hotels[Acquisition strategy]• Main sponsor is currently developing hotels specializing inaccommodation located in busy areas in Central Tokyo andregional urban centers• Expect to acquire properties through as sponsor pipeline

15

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

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

Shinagawa Canal Bldg. (Ownership interest to be additionally acquired: 4.6%)
Location

2 Konan, Minato-ku, Tokyo

Asset class

OfficeFloorsB1 / 8F

Completed

July, 2008 (10 years since completion)

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

Total floor space

5,216.21 m2 (entire building)Leasable floor space

169.93 m2 (additional ownership)

21 properties 190.4 billion yen

Acquisition price

171 million yen

43.3％

Acquisition date

March 8, 2019

Full ownership

33 properties
189.1 billion yen

Co-owned properties(not preferential
Negotiation right)(Acquisition Highlights)

9 properties 59.8 billion yen(Example of main acquisition utilizing preferential negotiation right)
Ownership
interest on
initialacquisition

Additional
acquisition

Current
ownership
interest

Shinagawa Canal Bldg.

45.6%

4.6%

50.2%

Tokyo Square Garden

－

－

8.22%

Shinjuku Square Tower

38.9%+23.7% => +4.7%

67.4%

Shibadaimon Center Bldg.

52.8%+12.6%

65.4%

Shinyokohama 2nd Center Bldg.

50.0%+50.0%

100%

BYGS Shinjuku Bldg.

25.0%+50.0% => +25.0%

100%

Property

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

• East exit area of Shinagawa Station is area where further development can be expected as thestarting station for the Chuo Shinkansen Project• Already own ownership interest of 45.6% in the property (for the fifth to seventh floors)• By acquiring additional interest equivalent to 4.6% (for the eighth floor) JPR will have themajority of ownership interest (50.2%) in the property.

Significant improvement as a result of leasing activities
after acquisition(Estimateafter move-in)

NOI Yield
After depreciationyield(Increase/
Decrease)

4.9%

⇒

5.9%

+1.0%pt

3.8%

⇒

4.8%

+1.0%pt(End Jun. 19)(Rate ofincrease)(At acquisition)

Appraisal Value(Estimate atacquisition)

182⇒
million yen

215

million yen

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

+18%

16

2-3.
Growth Strategy
2-2. External
内部成長戦略Utilization of Sponsor Pipelines

Promote vigorously selective investments and asset replacement by utilizing the sponsor pipelines■ Continue External Growth by Utilizing Asset Replacement■ Investigation of acquisitions throughnegotiated deals(Utilizing sponsor pipeline)(Asset replacement policy)• Aim to build a strong and solid portfolio by promoting asset replacement.
JPR• Enhance the quality of the portfolio andprofitability through strategical asset
replacement.
• Rejuvenate the age and improve profitability.
• When properties are sold to the sponsor,
discussion on acquisition after the propertiesare redeveloped by the sponsors is possible
through preferential negotiations.
• Conduct vigorously selective investment atassumed fair value.

Strategically saleSponsors

Asset
replacement• Sponsors who are developers have needs toacquire properties to be re-developed.
• The main sponsors support expansion of JPR aspart of their strategy to reinforce thecomprehensive strengths of the groups andenhance their business portfolio.
• Further reinforcement of the sponsor
commitment to JPR’s growth strategy.

Properties acquired
other than fromsponsors
121.7 billion yen

Properties
acquisition fromsponsors
219.4 billion yen
Properties acquired
49.9%
based on information
Properties
provided by sponsors
acquired using
98.2 billion yen

27.7%

Acquiring blue-chipproperties

22.4%(Asset Replacement in Jun. ‘19 Period)◆Acquired Properties
KY Kojimachi Bldg.

72.3%◆Sold Properties
FUNDES Ueno

sponsor pipelines

Tokyo Tatemono Kyobashi Bldg.

(Largest top 5 properties)

Sale Price
Property

Replacement Effects

5,800 million yen

Asset Value+4,300 million yen

Building Age-25.4 years+400 million yen

NOI(Annualized)+91 million yen

Building Age

1

Otemachi Tower(land with leasehold interest)

36.0

2

Olinas Tower

31.3

3

Shinjuku Center Bldg.

21.0

4

Tokyo Square Garden

18.4

5

Kanematsu Bldg.

16.2

Gain on Sale

38 yearsInternal reserve of gain on sale of real estate
An amount equal to the gain on the sale of the above
property will be reserved internally as reserve for
reduction entry for the purpose of stable operationand distribution in the future.

Billion yen

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

17

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

Acquired Property (Jun. 2019 fiscal period) 「KY Kojimachi Bldg.」 「FUNDES Ueno」■ KY Kojimachi Bldg.

■ FUNDES Ueno

(Acquisition Highlights)( Acquisition Highlights )• Yotsuya/Kojimachi area has attracted quite a few head offices of large companies andembassies and thus has solid office demand• 4-minute walk from Yotsuya Station and Kojimachi Station, with easy access to 2 stations and5 lines• Located near Shinjuku-dori Street, and clearly stands out with unique appearance of glass wallcovering the entire exterior• Acquisition of property under FUNDES Series (compact urban commercial facility developed bysponsor) following acquisition of FUNDES Suidobashi• Located a 1-minute walk from east side exit of Ueno Station, with a concentration of public
facilities such as the Taito Ward Government Office, office buildings and hotels in theneighborhood.
• Relatively newly built building with eating and drinking establishments commands a scarcity value
and can expect to draw a diverse customer base centering on business persons and hotel guests

Acquisition priceAppraisal value
NOI Yield(Estimate at acquisition)

After depreciation yield(Estimate at acquisition)

Appraisal yield(As of June 1, 2019)

5,750

Location

million yen

6,280

Use

5 Kojimachi, Chiyoda-ku,
Tokyo
Officemillion yen
Floors

3.8 %
3.3 %
3.4 %

BF/9F

CompletedFebruary 1999
(Building age: 20 years)

Leasable floor
space

3,493.67 m2

Acquisition
dateJune 27, 2019

Acquisition priceAppraisal value

NOI Yield(Estimate at acquisition)

After depreciation yield(Estimate at acquisition)

Appraisal yield(As of June 1, 2019)

3,800

Location

7 Ueno, Taito-ku, Tokyo

Use

Commercial facility

FloorsB1/10F

Completed

July 2017 (Building age: 2
years)

Leasable floor
space

1,989.66 m2

Acquisition
dateJune 27, 2019

million yen

3,930
million yen

4.1 %
3.3 %
3.8 %

18

Urban Development by the Main Sponsor

2-3. External Growth Strategy

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

Owned by JPR

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

Urban compact retailproperties

Urban hotel

Total floor area
(m2)

No.
guestroom

Completion/planne
d completion

FUNDES Suidobashi (owned by JPR)

1,477

-

Jul. ‘ 15

FUNDES Ueno (owned by JPR)

2,249

-

Jul. ’17

FUNDES Gotanda

1,498

-

Jul. ’19

FUNDES Ginza

Unfixed-Nov. ‘19

Candeo Hotels Tokyo Roppongi

4,700

149

Sep. ’17

The Square Hotel Ginza

5,700

182

Aug. ’18

Hotel Gracery Asakusa

3,700

125

Sep. ’18

The b Osaka Midosuji

10,700306

Feb. ’19

Candeo Hotels Omiya

10,100321

Aug. ‘19(Name to be determined) Kyoto Sanjo

Unfixed122

Nov. ‘19

Unfixed106

Spring ‘21

5,800

-

Spring ‘20

Property name(Name to be determined)Kyoto Shijo

The Otemachi Tower

Tokyo Square Garden

Owned by JPR

Owned by JPR

Shinjuku Center Bldg.

Olinas Tower

Medium-sized officeSendai Kakyoin Terrace

Owned by JPR

FUNDES Ueno

FUNDES Gotanda

The b Osaka Midosuji

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

Sendai Kakyoin Terrace

192-4. Financial Strategy

Fund Procurement Status and Outlook

Flattening of Repayment Amount and Reduction of Cost of Debts■ Lengthening of Maturity and Flattening of Repayment Amount for
300Each Fiscal Period to Around 10 Billion Yen■ Debt Procurement Results in the 35th Fiscal Period(short-term loans excepted, 11.1 billion yen)

(as of Aug. 14, ‘19)

Average maturity
Beforerefinancing

7.4

Years

+2.0

Average debt interest rate

After
refinancing

years

Beforerefinancing

9.4

1.67%

years

After
refinancing-1.11% pt

20

Dec. 2018

Jun. 2019

Change11.1 bn. Yen+1.1 bn. yen

Average maturity (change)

6.7 years

9.4年
years(+2.0years)+2.7 years

0.54%

0.56%

+0.02% pt(-0.38%pt)(-1.11%pt)(+1.1 years)(Status of entire interest-bearing debts)
1,850 bn. Yen+40 bn. yen

Average maturity

4.5 years

4.5 years-0.0 years

Average debt cost

0.90%

0.87%

-0.03%pt

Ratio of long-term, fixed interest
rate debts

100%

98.9%

-1.1%pt

91

0

50
30

20

40
80

100 110 98 100 105

80

80

100
70

80

20
85

100 99 100

30
70

20

71

42

30

20

60

Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. (period)'19 '19 '20 '20 '21 '21 '22 '22 '23 '23 '24 '24 '25 '25 '26 '26 '27 '27 '28 '28 '29 '29■ Average Interest on Debt for Last Three Fiscal Periods and Average
Cost of Debts To be Matured
1.04%

0.56%

The average interest rate on borrowings
Dec. '19
列1three fiscal periods
for the last

0.87%

0.96%

Jun. '20

Dec. '20

0.66%

0.53%

Jun. '21

Dec. '21(period)■ Change in LTV(LTV)Acquisition capacity(maximum LTV of 45%)

10

100
100

Average debt cost to be repaid by fiscal period

181.0 bn. Yen

LTV (based on total assets)(Jun. ’19 Actual debt)(Dec. ’19 Actual debt)

10.0 bn. yen

Total interest-bearing debts

Commitment line 24.0 bn. yen

200

New debt

Average borrowing interest
rate (change)

Investment corporation bonds(100 million yen)

0.56%

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

Long-term loans payable

(%)

40.5%

40.9%

+0.4% pt

36.7 bn. yen

33.7 bn. yen-3.0 bn. Yen(Credit rating)LTV

50
45 42.1

Control, aiming for maximum LTV of 40-45%

42.1

42.1

43.7

Dec '15

Jun '16

Dec '16

40.7

40.6

40.6

40.5

40.9

Jun '17

Dec '17

Jun '18

Dec '18

Jun '19 (period)

40

R&I

AA- (Stable)

S&P

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

35
Jun '1520

2-5. Sustainability

Sustainability (SDGs、PRI, etc.)

Seek to contribute to the sustainable growth of society■ Signing of the Principles for Responsible Investment (PRI)■ Sustainability Promotion System
Sustainability Committee meets at least twice a year, with eye on sustainable growth.

Sustainability committee
Members

Activities

President and CEO
CIO, CFO, CAO, Compliance Office generalmanager
Secretariat for Sustainability

JPR’s board
ReportSetting sustainability targets
Monitoring and assessing sustainability activities
Raising awareness among officers and employees

TRIM’s board■ Contribution to SDGs

■ Stakeholder Engagement

JPR and TRIM empathize with the principles underlying the SDGs and contribute totheir achievement through their business activities.
(Materialities of JPR and TRIM)
Areas

TRIM supports the basic approach of the Principles of Responsible Investment(PRI) and became a signatory in May 2019.

Goals of SDGs

Details of contribution

Importance is attached to stakeholder engagement(Stakeholder Engagement of JPR and TRIM)
Stakeholders

Thinking of dialogue

Methods of dialogue

Initiatives on behalf ofthe environment

Increase energy efficiency by renewing
facilities and equipment.

Tenants

Work to improve services and the level ofsatisfaction by reflecting voices of tenants.

• Tenant satisfaction survey• Collaboration in energy saving anddisaster prevention

Initiatives on
disaster prevention

Promote preparedness for responding tolarge-scale natural disasters affected byclimate change, etc.

Local communities

Contribute to local communities byworking to enhance their value throughcommunity activities.

• Participation of volunteers in cleaning
activities, etc.
• Participation in local events andfestivals

Initiatives on behalf of
local communities

Support personal connections in cities
through various local contribution andwelfare support activities.

Employees

Make efforts to cultivate professional
human resources by working to realize arewarding workplace where employees
can sense their growth• Variety of education and training• Award programs• Periodic personnel interviews• Employee satisfaction surveys

Human capitaldevelopment

Work to cultivate human resources toaccelerate the growth of TRIM employees

Unitholders andinvestors

Aim to build a long-term relationship oftrust with unitholders and investors• General meeting of unitholders• Results briefings• IR meetings (Japan and overseas)• Seminars for individual investors

Business partners
such as property
managers (PMs)

Aim to establish a relationship of trust andachieve mutual development through fairand equitable transactions with business
partners.

• Periodic information sharing• Implementation of workshops

Initiatives on tenantsatisfaction
Respect for humanrightsAim to contribute to economic
development through the provision of
offices that satisfy tenants.
Work on respect for human rights, theprohibition of acts of discrimination andharassment and the creation of a pleasantwork environment.

21

2-5. Sustainability

Sustainability (environmental certification, Green bond)

Promoted acquisition of environmental certification and issued Green Bonds■ Acquisition of environmental certification■ JPR’s first issuance of Green Bonds

Focus on improving rate of acquisition of environmental certification, aiming for
portfolio with low environmental impact and high sustainability
Item

Dec. 2018

Number of properties

Jun. 2019

ChangePurpose of Issuance

17

21

+4

Total area (㎡)

223,389

352,458+129,068

Ratio

34.0 %

53.4 %+19.4 %(DBJ Green Building Certification)
Ranking

Property name

Issuance of 10-year investment corporation bonds of 5,000 million yen or
more at minimum coupon rate
• Further promote ESG initiatives• Diversify and enhance fundraising methods• Contribute to expansion of green finance market• Promote dialogue with investors interested in ESG investment

Criteria of Eligible Green Assets★★★★★

Tokyo Square Garden, Olinas Tower• DBJ Green Building Certification: 5 stars, 4 stars or 3 stars★★★★

Oval Court Ohsaki Mark West, Shinjuku Center Bldg. JPR
Sendagaya Bldg.

• CASBEE: B+ Rank, A Rank or S Rank★★★

Kanematsu Bldg., BYGS Shinjuku Bldg., Shinagawa Canal
Bldg., Omiya Prime East, Rise Arena Bldg., Yume-ooka
Office Tower, Kawasaki Dice Bldg.

★★

JPR Crest Takebashi Bldg., Shinjuku Square Tower,
Minami Azabu Bldg., JPR Chiba Bldg.

(CASBEE for Building Certification)
Ranking

Property name★★★★★

Musashiurawa Shopping Square, JPR Umeda Loft Bldg.,
Housing Design Center Kobe★★★★

JPR Shibuya Tower Records Bldg., Yakuin Business
Garden Large■ Continued acquisition of high ratings in GRESB Real
Estate Assessment• Acquisition of “Green Star,” the highest ranking, for five consecutive
years• Acquisition of high “4 Stars” rating in GRESB Rating, which is a relative
rating based on overall score, for three consecutive years• Acquisition of the highest ranking of “A” in ESG information disclosurelevel assessment.

Overview of Green Bonds
Issue dateJuly 31, 2019

Total issue
amount5,000 million yen

Maturity

10 yearsInterest rate

0.57%

Use ofproceeds

Repayment of funds borrowed for Yakuin Business
Garden and JPR Sendagaya Building

Evaluation
organization

Obtained Green 1 (F) Rating , the highest possible,
in a “Green Finance Framework Evaluation” by
Japan Credit Rating Agency, Ltd. (JCR)22

2-5. Sustainability

Sustainability (Environment)

Reinforcing Continuous Improvement Initiatives on Environmental Issues■ Introduction of energy management system
Introduced by TRIM for more precise portfolio monitoring and forecasting of utility
expenses(Change in implement refurbishment to highly energy-efficient facilities(million yen)

400
339

Compliance withenvironmental laws
and regulations

Compliance withrequirements fordisclosure of information
to authorities

Appropriate and efficient
data aggregation

Actions to meetsocietal demands

Improvement of ability
to manage
environmental impact

Precise management of
actual versus budget/
Strengthening of ability tosave energy and reduce costs

Adaptation to futurechanges in energy
marketSelect appropriate
supplier

Select optimal supplier

310
300

260

258
227

211

185

200

130

123

105

125

115

100

0
Jun. '17

Dec. '17

Jun. '18

LED construction

Dec. '18

Jun. '19

Dec. '19 (period)(forecast)

Work on air condition units

The AI (artificial intelligence)-based control unit incorporates cutting-edge technologythat achieves optimal control by taking the operating status of equipment into
consideration, thus reducing environmental impact and energy expenses.

■ CO2 Emission Data
Item

Units

Electricity Use

mWh/m2

Gas UseWater Use
CO2 Emission■ Introduction of AI-based optimal control system (Kawasaki DICE Bldg.)

FY2018Change

0.153

0.149

-0.003mWh/m2

0.024

0.024

0.000

㎥/m2

0.832

0.800

-0.031

t-CO2/m2

FY2017

0.089

0.080

-0.009Automatic control

Conservation of energy

Automatically controls schedule,
temperature, humidity, CO2,
power, etc.

Builds system capable of data
analysis and implementation ofenergy-saving measures

Reduction of running costs

Reduction of CO2 emissions

Seeks to reduce running costs
through system improvements

Also considers the environment
by making reductions based onunderstanding of overall energy
picture23

2-5. Sustainability

Sustainability (society)

Initiatives for Enhancement of Tenant Satisfaction■ Initiatives on Behalf of Tenants■ Social Contribution and Disaster Drill

Periodical Tenant Satisfaction Surveys•••

Entrance Performance

Although the number of subject properties fell due to tenant contract
cancellations, overall satisfaction is in a recovery trend.
Efforts were made to respond quickly to feedback from tenants and PMs.
At properties about which dissatisfaction was expressed, communication withtenants was promoted.

(number of property)

80
60

3.1

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

Overall satisfaction (average) (score)
4.0
3.5 3.5
3.4 3.4 3.4
3.4
3.3
3.3 3.3
3.3
3.5
3.2 3.2 3.2
3.2
Number of subject property

40
20

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

3.0
41 39 40 40 45 42
31 32 31 32 32 36 37 37 38

00

2.5
2.0
0

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19[Overview of the 2019 CS survey]
Average value with 4 points being the highest
Survey period: May-Jun. 2018
Surveyed building: 42 building with 508 tenant
Questionnaire item: management and administration, responses to tenants, crime
prevention and safety, emergency responses and environmental preservation, etc.

Distribution of Anti-disaster Goods

Disaster Drill

Sought to raise disaster mitigation awarenessand distributed mobile chargers to cope withpower outages in the event of earthquake, etc.

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

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

Improvement ofmanagement issues
Improve problematic situations incooperation with property managers andbuilding managers of respective properties

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

Periodical liaison meeting
Clarify managerial issues and discusscountermeasures among the asset manager,
property managers and building managers

242-5. Sustainability

Sustainability (corporate governance)

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

Decision-making process for property acquisitions

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

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

Criteria for appointing investment corporation officers and remuneration■ Risk Management

Acquisition－

Conclude agreement

13,300Investment Subcommittee－

Ernst & Young
ShinNihon LLC－

Final decision on
acquisition

Gyosei Certified Public Tax
Accountants' Co.
Group Representative Partner

4,200

Nobuhisa Kusanagi－

Compliance Committee
JPR’s Board of Directors

Partner Attorney, Spring Partners

1

Prior review /approval oftransaction withrelated parties

Masato Denawa

2,400

Due diligence
subcommittee－

Due diligence

Satoshi Okubo

Investment subcommittee

Independent
AuditorFee (Jun. ‘19) Owned
units(thousand yen)

Decision on
acquisition policy

Supervising
Officer

Other Current Assignments

Compliance subcommittee

Executive
Officer

Name

Review, screening

Position

Invest management department

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

Proposal, planning••

Decision making on
acquisition
TRIM’s Board of Directors
over certain amount•

Decision-Making Based on Stringent Processes

TRIM’s Risk Response Scheme• Has strengthened risk resilience bycontinuously responding to risks based on risk
response scheme• When managing information, implements safetymeasures to address various threats anddevelops contingency plans in case of failure,etc.

Decision-making based on stringent processes

Identifica
tion ofrisks• Develops effective risk management systemand endeavor to avoid risk
Improvement

Monitoring

Assessment

Response

1. Executive Officer Satoshi Okubo will resign with effect September 5, 2019. As a result, President
and CEO of Tokyo Realty Investment Management, Inc. Yoshihiro Jozaki will become Executive
Office on September 5, 2019.

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

25

JAPAN PRIME REALTY INVESTMENT CORPORATION

3. Financial Results and Forecasts of Financial Results

26

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 35th Fiscal Period (Jun. ’19) (period-on-period
comparison)

Results of the 35th fiscal period ended June 2019
DPU: 7,380 yen (up 54 yen, period-on-period)
Rent revenue continued to increase, reflecting steady progress in attracting new tenants and revising rents upward.
Increase in property tax was absorbed and cash distributions increased for the 11 th consecutive period.
Item

34ｔh Period

Operating revenue
Rental revenue
Gain on sale of properties
Operating expense
Expenses related to rent business
Revenue andSelling,
general and adminisutrative expenses
profit(million yen) Operating income

Non-operating income
Non-operating expenses
Ordinary income
Net income
Reserve (million yen) Transferred from reserve
DPU (yen) (per unit)
Number of units outstanding

Operating revenue

35th Period(Dec. 31, 2018) (Jun. 30, 2019)15,652
16,101
15,652
15,695
405
8,066
8,147
7,311
7,349
755
797
7,586
7,954
27
72
851
810
6,761
7,216
6,760
7,216
405
7,326
7,380
923,000

Change34th Period
35th Period(Dec. 31, 2018) (Jun. 30, 2019)
Operating revenue
15,652
15,695
Rental revenue
14,723
14,857
Rents and common charge
12,63012,723
Land rent
1,679
1,726
Other fixed income
413
407
Other rental revenue
929
838
Incidental income
801
683
Cancellation penalty, etc
16
46
Income equivalent to expense for restoration
77
71
to original condition
Other variable income
33
36
Expenses related to rent business
7,311
7,349
Outsourcing fees
594
593
Utilities expenses
891
782
Property and other taxes
2,210
2,349
Insurance premiums
24
24
Repairs and maintenance569
578
Property management fees
279
293Management association accounts
568
569
Depreciation
1,943
1,965
Other expenses related to rent business
227
192
NOI
10,285
10,311NOI yield (book value)
5.0%
5.1%
Rental income-real estate
8,341
8,346
After-depreciation (book value)
4.0%
4.1%
Rent-paying occupancy rate (period average)
98.3%
98.6%
Item

+448
+43
+405
+80
+38
+42
+368
+45
-41
+455
+455
+405
+54

923,000-

Increased (up 0.7% from the previous period) due to progress in attracting new tenants and① ［Rents and common charge] upwardly revising rents
rent of Otemachi Tower (land with leasehold interest) was revised as a result of increase in property tax② ［Land rent] Land
(contributed for three months from April)③ ［Incidental income] Decreased mainly due to seasonal factors

Expenses related to rent business④ ［Utilities expense] Decreased mainly due to seasonal factors and the balance of utilities expenses deteriorated (-8 million yen)
⑤ ［Properties and other taxes］ Increased due to property and other taxes⑥⑦

Change
+43
+134
+93
+47
-6
-91
-117
+30
-6
+3
+38
-1
-109
+138
-0
+8
+14
+0
+22
-35
+26
+0.1%pt+4+0.1%pt+0.3%pt

①
②

③

④
⑤

Non-operating income and expenses

Likely to increase in the settlement on management association accounts (mainly recorded in the⑥ ［Nonoperating income］ June period every year)⑦ ［Non-operating expenses］ Financial costs such as interest expense on loans and investment corporation bonds decreased27

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 35th Fiscal Period (Jun. ’19) (period-on-period
comparison)

Result of the 35th fiscal period ended June 2019
Total assets: 452.3 billion yen, NAV per unit: 259,118 yen
Item

BalanceSheet(million yen)

34ｔh Period(Dec. 31, 2018)35,516
Current Asset
Cash and deposits (including trust)
35,056
Other current asset
459
411,514
Noncurrent assets
Property, plant and equipment
396,273
Intangible assets
14,690Investments and other assets
549
127
Deferred assets
Investment corporaton bond issuance costs
111
Investment unit issuance expenses
15
447,157
Total assets
27,383Current liabilities
Short-term loans payable
Current portion of long-term loans payable
17,100Current portion of investment corporation bonds 4,000
6,283
Other current liabilities
181,062
Noncurrent liabilities
138,420
Long-term loans payable
21,500Investment corporation bonds
21,142Tenant leasehold and security deposits
208,445
Total liabilities
231,653
Unitholders' capital
7,059
Surplus284
Reserve for reduction entry
6,774
Unappropriated retained earnings
238,712
Total net assets

35th Period

ChangeIncrease or decrease in cash and deposits(Jun. 30, 2019)36,80336,267536
415,453
403,064
11,806
583
109
101
8
452,366
30,6162,000
18,0004,000
6,616
182,583
139,520
21,50021,563
213,199
231,653
7,513
284
7,229
239,166+1,287+1,210+77+3,939+6,790-2,884
+33
-18
-10
-7
+5,208+3,233+2,000+900+333+1,521+1,100+421+4,754
+454
+454
+454

Net cash provided by operating activities+14,527

Income before income taxes+7,216

Depreciation and amortization+1,965

Other, net+5,344

Item

ChangeNet cash provided by investing activities-10,555-10,929

Purchase of property, plant and equipment

Other, net+374

Net cash provided by financing activities-2,761

Proceeds from lisbilities+13,100

Repayment of liabilities-9,100

Dividends paid

-6,761

Total cash and deposits+1,210

Increase or decrease in noncurrent assets
Item
Acquisition of properties

Change+9,816

Sale of propreties-5,271

Capital expenditures+1,325

Depreciation-1,965

Others+35

Total noncurrent assets+3,939

Increase or decrease in liabilities
Item

Repayment/
redemption

New procurement

Balance at end ofcurrent period

ChangeShort-term loans payable

2,000

-

2,000

+2,000Long-term loans payable

11,1009,100

157,520+2,000Investment corporation bonds--

25,500-13,1009,100

185,020+4,000Total liabilities28

3. Financial Results and Operating
Forecasts

Overview of Financial Results for the 35th Fiscal Period (Jun. ’19) (compared with forecast)

Results of the 35th fiscal period ended June 2019
DPU compared with the forecast : up 30 yen
Result was higher than initially forecast mainly due to recording of cancellation penalties
Item

35th Period

35th Period

Non-operating income
Non-operating expenses
Ordinary income
Net income
Reserve (million yen) Transferred from reserve
DPU (yen) (per unit)(forecast)
15,58015,580
8,045
7,270
775
7,534
63
812
6,785
6,784
7,350

(Result)
16,101
15,695
405
8,147
7,349
797
7,954
72
810
7,216
7,216
405
7,380

+521
+115
+405
+101
+79
+21
+419
+8
-2
+431
+431
+405
+30

Number of units outstanding

923,000

923,000-

Operating revenue
Rental revenue
Gain on sale of properties
Operating expense
Expenses related to rent business
Revenue andSelling, general and adminisutrative expenses
profit(million yen) Operating income

Rental revenue① ［Rents and common charge]

ChangeItem

Lost rent, etc. due to agreement cancellation was received as penalty for contract
cancellation
Increase/decrease in real terms ( + ’) is +38 million yen

Expenses related to rent business
Increased largely due to the occurrence of construction work to restore properties to② ［Repair and maintenance cost］ their original condition③ ［Property management fees］ Fees for upward revisions of rent increased due to progress with rent revisions④

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

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

Depreciation
Other expenses related to rent business

NOI
NOI yield (book value)
Rental income-real estateNon-operating income and expenses④ ［Other rental revenue］ Increased in the settlement on management association accounts

After-depreciation (book value)
Rent-paying occupancy rate (period average)

35th Period(Forecast)

35th Period(Result)

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

15,695
14,857
12,723
1,726
407
838
683
46
71
36
7,349
593
782
2,349
24
578
293
569
1,965
192
10,311
5.1%
8,346
4.1%
98.6%

+115
-3
-8
-0
+4
+119
-1
+46
+71
+3
+79
-8
+8
-1
-0
+82
+10
+0
-5
-7
+30
+0.1%pt+36- %pt-0.3%pt

①

①'

②
③

29

3. Financial Results and Operating
Forecasts

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

Forecast of the 36th fiscal period ending December 2019
DPU: 7,430 yen (up 50 yen from 35th period (Jun. ‘19) actual results)
Cash distributions are expected to continue increasing in the 36 th period, mainly due to asset replacement conducted in the previous period
Aim to accumulate further profit under favorable leasing market conditions.
Item

35th Period

Operating revenue
Rental revenue
Gain on sale of properties

Operating expense
Expenses related to rent business
Revenue andSelling,
general and adminisutrative expenses
profit(million yen) Operating income

Non-operating income
Non-operating expenses
Ordinary income
Net income
Reserve (million yen) Transferred from reserve
DPU (yen) (per unit)
Number of units outstanding

Rental revenue

36th Period(Jun. 30, 2019) (Dec. 31, 2019/ forecast)
16,101
15,886
15,695
15,886
405
8,147
8,250
7,349
7,456
797
793
7,954
7,636
72
3
810
779
7,216
6,859
7,216
6,858
405
7,380
7,430
923,000

923,000

Change
-214
+190
-405
+103
+106
-3
-318
-69
-30
-357
-357
-405
+50

Item
Operating revenue
Rental revenue
Rents and common charge⑥⑦-

Land rent
Other fixed income
Other rental revenue
Incidental income
Cancellation penalty, etc
Income equivalent to expense forrestoration

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

Revenue is expected to increase mainly due to full-year contribution of tenants that moved in① ［Rents and common charge] in the previous period and upward revision of rents② ［Land rent］ Revision of land rent of Otemachi Tower (land with leasehold interest) will boost revenue throughout period.
③ ［Incidental income] Expected to increase mainly due to seasonal factors

Expenses related to rent business④ ［Utilities expense］ Expected to increase mainly due to seasonal factors and balance of utilities expenses is expected to improve⑤ ［Other expenses related to rent business］ Brokerage fees, etc. will increase

Management association accounts

Depreciation
Other expenses related to rent business

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

Non-operating income and expenses

Likely to decrease in the absence of settlement on management association accounts (mainly⑥ ［Nonoperating income］ recorded in the June period every year)⑦ ［Non-operating expenses］ Financial costs such as interest expense on loans and investment corporation bonds will decrease

36th Period
35th Period(Dec. 31, 2019)(Jun. 30, 2019)(forecast)

15,695
14,857
12,723
1,726
407
838
683
46
71
36
7,349
593
782
2,349
24
578
293
569
1,965
192
10,311
5.1%
8,346
4.1%
98.6%

15,88615,034
12,895
1,774
364
852
813
2
36
7,456
617
897
2,336
25
513
287
578
1,983
217
10,413
5.0%
8,429
4.0%
98.8%

ChangeReplaced properties

+190
+176
+171
+47
-42
+14
+130
-43
-71
-0
+106
+24
+114
-13
+0
-65
-6
+9
+17
+25
+101
-0.1%pt+83-0.1%pt+0.2%pt※1

Existing properties

+64
+31
+68
-36
+33
+29
+4
+15
+6
+23
-6
+0
+13
+2
+8
-31
+57

+125
+144
+103
+47
-5
-19
+100
-43
-71
-4
+91
+18
+91
-6
+0
-79
-9
+9
+9
+56
+44

+49

+34

※2

①
②

③

④

⑤

*1 Increase/Decrease due to asset replacement conducted in the 35th Period*2 Increase/Decrease for existing properties excluding the above30

3. Financial Results and Operating
Forecasts

Forecasts of Financial Results for the 37th Fiscal Period (Jun. ‘20) (compared with forecast forthe 36th period (Dec. ‘19)

Forecast of the 37th fiscal period ending June 2019
DPU: 7,500 yen (up 70 yen from 36th period (Dec. ‘19) forecast)Medium-term DPU target of 7,500 yen is expected to be reached.
Aim for stable growth through continuous upward revision of rents, reduction of financial costs and cost control.
Item36th Period

37th Period(Dec. 31, 2019/ forecast) (Jun. 30, 2020/ forecast)

Operating revenue
Rental revenue
Operating expense

ChangeItem
Operating revenue
Rental revenue
Rents and common charge
Land rent
Other fixed income
Other rental revenue
Incidental income
Cancellation penalty, etc

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

15,886
15,886
8,250
7,456
793
7,636
3
779
6,859
6,858
7,430

15,841
15,841
8,215
7,289
926
7,626
54
756
6,923
6,923
7,500

-44
-44
-34
-167
+132
-10
+51
-23
+64
+64
+70

Number of units outstanding

923,000

923,000-

Expenses related to rent business

Rental revenue⑤⑥

Current pace of upward revision in rents is expected to be maintained① ［Rents and common charge] Average rent-paying occupancy rate for period is set at 98.6%② ［Incidental income] Expected to decrease mainly due to seasonal factors

Income equivalent to expense for restoration
to original condition

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

Expenses related to rent business
Expected to decrease mainly due to seasonal factors and balance of utilities expenses is expected to be③ ［Utilities expense］ mostly unchanged④ ［Property and other taxes］ Expected to increase mainly due to property and other taxes

Non-operating income and expenses
Expected to increase largely due to recording of settlement on management association accounts⑤ ［Nonoperating income］ (mainly recorded in the June period every year)⑥ ［Non-operating expenses］ Financial costs such as interest expense on loans and investment corporation bonds will decrease

Depreciation
Other expenses related to rent business

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

36th Period(Dec. 31, 2019)(forecast)

37th Period(Jun. 30, 2020)(forecast)

Change15,88615,034
12,895
1,774
364
852
813
2
36
7,456
617
897
2,336
25
513
287
578
1,983
217
10,413
5.0%
8,429
4.0%
98.8%

15,841
15,095
12,948
1,783
363
746
708
38
7,289
609
794
2,399
24
409
304
578
1,988
180
10,540
5.1%
8,552
4.1%
98.6%

-44
+60
+52
+9
-1
-105
-104
-2
+2
-167
-8
-102
+63
-0
-104
+17
-0
+5
-37
+127
+0.1%pt+122+0.1%pt-0.2%pt

①

②

③
④

31

3. Financial Results and Operating
Forecasts

Change in Rental Business Profits etc.

Internal growth is progressing steadily and upward trend in rental revenue will continue
Item

33rd Period(Jun. 30, 2018)15,204
14,38012,343
1,630
406
Other rental revenue (variable income)824
incidental income
673
Cancellation penalty, etc.
14
Income ecquivalent to expense for restoration to original condition
101
Other variable income
35
Expenses related to rent business (excluding depreciation)
5,171
Rental business profits
Outsourcing fees
586
(million yen)
Utilities expenses
748
Property and other taxes
2,217
Insurance premiums
24
Repairs and maintenance473
Property management fees
289
Management association accounts
567
Other expenses related to rent business
262
NOI
10,033
Depreciation
1,943
Expenses related to rent business
7,114
Rental income-real estate（a）
8,090
Gain on sale of real estate（b）
Gain or loss on sale ofproperties (million yen)
Loss on sale of real estate（c）
Rental income-real estate, etc. (million yen, a+b-c）
8,090
Operating revenue
Rental revenue (fixed income)Rents and common charge
Land rent
Other fixed income

34th Period
Change

0.4%
0.9%
0.6%
3.1%
-7.1%
-14.6%

5.8%-2.0%-14.8%
8.5%
43.8%

-2.1%
1.1%
4.5%
-2.9%

-2.9%

(Dec. 31, 2018)
15,652
14,723
12,630
1,679
413
929
801
16
77
33
5,367
594
891
2,210
24
569
279
568
227
10,285
1,943
7,311
8,341
8,341

35th Period
Change

2.9%
2.4%
2.3%
3.0%
12.7%
19.0%

3.8%
1.3%
19.1%
-0.3%
20.3%

2.5%
0.0%
2.8%
3.1%

3.1%

(Jun. 30, 2019)15,695
14,857
12,723
1,726
407
838
683
46
71
36
5,384
593
782
2,349
24
578
293
569
192
10,311
1,965
7,349
8,346
405
8,751

36th Period
Change

0.3%
0.9%
0.7%
2.8%
-9.8%
-14.7%

0.3%-0.2%-12.3%
6.3%
1.6%

0.3%
1.1%
0.5%
0.1%

4.9%

(Dec. 31, 2019)15,88615,034
12,895
1,774
364
852
813
2
36
5,473
617
897
2,336
25
513
287
578
217
10,413
1,983
7,456
8,429
8,429

37th Period
Change

1.2%
1.2%
1.3%
2.7%
1.7%
19.0%

1.7%
4.2%
14.7%
-0.6%
-11.3%

1.0%
0.9%
1.5%
1.0%

-3.7%

(Jun. 30, 2020)
15,841
15,095
12,948
1,783
363
746
708
38
5,301
609
794
2,399
24
409
304
578
180
10,540
1,988
7,289
8,552
8,552

Change

-0.3%
0.4%
0.4%
0.5%
-12.4%-12.9%-3.1%-1.4%-11.4%
2.7%-20.3%

1.2%
0.3%
-2.2%
1.5%

1.5%

32

3. Financial Results and Operating
Forecasts

Changein Major Items
主要項目の変動状況

Rent revenue will increase by 170 million yen (from the 35th fiscal period (Jun. ‘19)) for the36th fiscal period (Dec. ‘19) and by 60 million yen (from the 36th fiscal period (Dec. ‘19)) for the
37th fiscal period (Jun. ‘20)
■ Forecast of Property Taxes and City Planning Taxes■ Rent revenue (factor for period-on-period changes)(million yen)

Plus item

Rent revenue

2,500

Minus item

(million yen)

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

2,000
1,500

+31 +5

Other fixedincomeOtemachiTower’s rent

+221 -153 +47 -42+232 -211+30 +9Other fixedincomeOtemachiTower’s rent

Move
-ins
Move
-outs
Revisions,etc.

Other fixedincomeSale

OtemachiTower’s rent

15,03415,095

Rents andcommon +52
charge

1,000
500
0

-1
Actual increase of
burden, converted
to DPU(period-on-period)

+42

1,237

1,191

1,274

1,221

1,268

Jun. '18

Dec. '18

Jun. '19

Dec. '19

Jun. '20(forecast)(forecast)(forecast)+57 yen-50 yen+10 yen―+49 yen-90 yen

1,258

Dec. '20 (period)■ Balance of Utilities Expenses (utilities expense-incidental income)+47 -6(forecast) (forecast)-3

Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun. Dec. Jun.
(period)'15 '15 '16 '16 '17 '17 '18 '18 '19 '19 '20

0

Revisions,etc.

14,723

Sale+341 -280

Acquisition

Move
-ins
Move
-outs
Revisions,
etc.

入居

+381 -321

Acquisition

14,857

Rents andcommon +93
charge

Move
-ins
Move
-outs
Revisions,etc.

Rents andcommoncharge +171

-40
-80

34th period(Dec. ‘18)

35th period(Jun. ‘19)
Rent revenue+130 mn. yen

Of which, rent revision (net) +30 mn. yen

36th period (Forecast)(Dec. ‘19)
Rentrevenue+170 mn. yen

Of which, rent revision (net) +40 mn. yen

37th period (Forecast)(Jun. ‘20)
Rentrevenue+60 mn. yen

Of which, rent revision (net) +30 mn. yen

-120
-160
-200
(million yen)

Effect of reduction of utilities
expenses due to review of
power companies (estimate)

1. ” Amount of burden (net)” includes increase in property tax as a result of asset replacement in Jun. ‘19 period.

33

3. Financial Results and Operating
Forecasts

Fluctuations in Distribution per Unit

7,326

Main changing Items

34th period(Dec.’ 18)

-34

-143

+55

Non-operating expense

-114

+181

Non-operating income+65

Administrative expense-75

Expenses related to rent business+3

Other rental revenue

+53

7,430

Rent revenue-98

Non-operating expense-20

Non-operating income

Other rental revenue+157

Administrative expense

7,380

Rent revenue-438Internal reserve+49

Non-operating expense-45

Non-operating income

+45
+439

Administrative expense-98

Minus item

Gain on sale of properties

Other rental revenue+144

Expenses related to rent business

Rent revenue(yen/unit)

Plus item

Rental income-real estate due to property
acquisition and sale

Distribution per unit

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

Rental income-real estate due to property
acquisition and sale

In Dec. ‘19 period, cash distributions are expected to increase mainly due to increase in rental profit
resulting from tenant replacement
Medium-term target of 7,500 yen is expected to be reached in Jun. ‘20 period.

7,500

+25

+33

-6

35th Period(Jun. 2019)(Rent revenue, etc.)
Increase in rents and common charge
Increase in land rent
(Other rental revenue)
Decrease in incidental income(Expenses related to rent business)
Decrease in utilities expense
Increase in property and other tax(Non-operating income and expense)
Increase in management association accounts (*)

36th Period (Forecast)(Dec. 2019)+99yen+51 yen-126 yen(Rent revenue, etc.)
Increase in rents and common charge
Increase in land rent
(Other rental revenue)
Increase in incidental income
Decrease in income equivalent to expense for restoration to original condition+118yen-150 yen+59 yen(Expenses related to rent business)
Increase in utilities expense
Decrease in repairs and maintenance expense(Non-operating income and expense)
Lack of management association accounts (*)

37th Period (Forecast)(Jun. 2020)+113 yen+51 yen-+108 yen
-77yen-99 yen+85 yen-60 yen(Rent revenue, etc.)
Increase in rents and common charge+56 yen(Other rental revenue)
Decrease in incidental income-113yen(Expenses related to rent business)
Decrease in utilities expense+111yenIncrease in property and other tax-69 yenDecrease in repairs and maintenance expense+112yen(Administrative expense)
Increase in asset management fee-133 yen(Non-operating income)
Increase in management association accounts (*) +52yen(*) Management association accounts refer to the surplus of management association fees, etc., which are contributed by JPR in buildings managed under the form of a management association, to be refunded as
settlement money at the time of account settlement of the management association.

34

3. Financial Results and Operating
Forecasts

Medium-term Target

Existing target of 7,500 yen is expected to be reached in Jun. ‘20 period
Set new target of 7,800 yen and aim for further growth[Growth policy] Stable growth of cash distributions/ Disciplined expansion of asset size /Further improvement of portfolio quality■ Results and Medium-Term Target of Distribution per Unit
Existing target 1

Existing target 2
Growth to 7,500 yen
Achievement expected inJun. ’20 period

Growth to 7,300 yen by Jun. ’19 period
Achieved early in Dec. ’18 period
8,000

New target
Growth to 7,800 yen

7,800(yen/unit)

7,500

7,213

7,223

7,245

Jun. '17

Dec. '17

Jun. '18

7,326

7,380

7,430

Jun. '19

Dec. '19

7,500

7,048
7,000

6,756
6,500

6,000
0

Jun. '16

Dec. '16

Dec. '18(forecast)Jun. '20 (period)(forecast)Target

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

35

3. Financial Results and Operating
Forecasts

Medium-term Target

Simulation of DPU Growth■ Target contributions to distributions of each growth driver
Contribution to distributions(per unit)

Growth drivers

Internal growth

1% growth in rents and common charges (per annual rate)* Assuming that balance of rents and common charges grewat annualized rate of 1% in Jun. ’19 period(用途)

Around 68 yen(エリア)

External growth

Assuming acquisition of 10 billion yen property with after
depreciation yield of 3.3% (not including financing costs)

Around 179 yen

Financial strategy

0.01% reduction in average cost of debt (per period)* Result of most recent year was reduction of 0.03% perperiodAround 9 yen■ Other major factors that affect DPU• Increase or decrease in incidental income such as land rent andparking lot income• Increase in management expenses• Balance of utilities expenses (see page 33)• Increase in property taxes and other property costs (see page 33)• Increase or decrease in repairs and maintenance and depreciation(see page 11)■ Estimated increase in DPU as a result of property acquisition
After depreciation yield (%)
3.0
Acquisition
cost(billion yen)

3.1

3.2

3.3

3.4

3.5

3.6

5

81

84

87

89

92

95

98

10

163

168

173

179

184

190

195

15

244

252

260

268

276

284

293

20

325

336

347

358

368

379

390

1. The above figures are TRIM’s estimates of the impact of various measures on performance based on certain assumptions and TRIM makes no guarantee whatsoever concerning the achievability of the figures or the amounts and timings
2. Contribution to distributions is the estimated increase in distributions over the period based on various assumptions divided by the number of investment units outstanding at the end of the Jun. ’19 period.
3. “Estimated increases in DPU as a result of property acquisition” does not include financing cost.

36

3. Financial Results and Operating
Forecasts

Change of AM Fee Structure

Change to fee structure linked to operating targets, with goal of sustainable growth ofunitholder value (plan to change in Jun. ’20 period)[Proposal to General Meeting of Unitholders to be held September 5, 2019]
Goal

Changes in environment
surrounding JPR• Increase in listed REITs• Need for further strengthening ofmanagement framework• Growing new societal demands such as
ESG

Issue with asset management fees
Lack of link between unitholders’ interestsand operating targets

Sustainable growth of unitholder
value

17 years have passed since
JPR’s listing

OperatingTargets

New AM Fee Structure

Stable growth of
DPU

Fee linked to cash
40%
distributions

Disciplined
expansion in asset
size
Further
improvement in
portfolio quality

Percentage of
total fee

Fee linked toassets32%

Fee linked torevenue28%

Acquisition fee
Sale fee
Merger fee

1. The above percentages are based on estimates for the Jun. ‘20
period.

37

3. Financial Results and Operating
Forecasts

Change of AM Fee Structure✓Fixed fees will be scrapped.
✓Lower percentage of revenue-linked fee and shift to fee structure mainly consisting of cash distribution-linked fee.
Existing AM Fee Structure

New AM Fee Structure

12.5 million yen per monthManagement fee 1(Asset-linked fee)

Total acquisition price×0.05％

Incentive Fee 1(Revenue-linked fee)

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

Management fee 2(Revenue-linked fee)

Total revenue×1.2%

Incentive Fee 2(Income-linked fee)

3% of JPR’s income before income
taxesManagement fee 3(Cash distribution-linked
fee)

Distributable base amount
×3.8%×Rate of fluctuation of
distributable base amount per unit

Incentive Fee 3(Acquisition fee)

0.25% of the acquisition price upon
new acquisition

Management fees 4/5(Acquisition/Merger fee)
(Sale fee)

Property value×0.5%

Fixed fee

■ Comparison based on estimate for Jun. ’20 period■ AM Fee of Each J-REIT
1.00%

AssetLinked fee

現報酬体系
Existing
fee（'20.6期見通しを Fixedstructure
fee
前提に試算）(Calculatedonassumption of
forecast forJun. ’20 period) 0

Revenuelinked fee

Revenuelinked fee

200

Cash
distributionlinked fee

AM Fee Ratio (Ratio of Asset Size)

New fee
新報酬体系
structure（'20.6期想定）(Estimate forJun. ’20.6
period)Income-linked
fee

400

600

800 (million yen)

0.80%
0.60%
0.40%

JPR (After change)
0.20%

JPR (Before change)

0.00%
0

2,000

4,000

6,000

1. Estimated by TRIM based on data published by Jun. 2019

8,000

10,00012,00038

JAPAN PRIME REALTY INVESTMENT CORPORATION

4. Appendix

39

4. Appendix

Fund Summary
30th Period(Dec. 2016)

32nd Period(Dec. 2017)

33rd Period(Jun. 2018)34ｔｈ Period(Dec. 2018)35th Period(Jun. 2019)(book value)

43.7%
40.3%
4.9%
5.1%
4.7%
4.0%
4.2%

40.7%
36.5%
4.8%
5.0%
4.5%
3.9%
4.1%

40.6%
35.5%
4.7%
4.9%
4.3%
3.8%
4.0%

40.6%
34.9%
4.7%
4.9%
4.2%
3.8%
4.0%

40.5%
34.2%
4.7%
5.0%
4.1%
3.8%
4.0%

40.9%
33.9%
4.8%
5.1%
4.2%
3.9%
4.2%

(appraisal value)

3.8%

3.6%

3.5%

3.4%

3.4%

3.4%

FFO

3.5%
2.8%
8,336 million yen

3.8%
3.1%
8,577 million yen

3.9%
3.2%
8,587 million yen

3.7%
3.0%
8,632 million yen

3.7%
3.0%
8,707 million yen

3.3%
2.7%
9,181 million yen

AFFO

7,612 million yen

8,014 million yen

7,962 million yen

7,485 million yen

7,581 million yen

7,856 million yen

FFO per unit
EPS
Cash distribution per unit
Dividend yield
ROE
Reserve for reduction entry per unit
Net asset per unit
NAV per unit

9,549 yen
7,047 yen
7,048 yen
3.0%
5.6%
84 yen248,154 yen
283,129 yen

9,293 yen
7,440 yen
7,213 yen
3.6%
5.8%
308 yen258,516 yen
306,192 yen

9,303 yen
7,221 yen
7,223 yen
3.9%
5.6%
308 yen258,525 yen
320,060 yen

9,352 yen
7,243 yen
7,245 yen
3.5%
5.6%
308 yen258,546 yen
329,845 yen

9,433 yen
7,324 yen
7,326 yen
3.5%
5.7%
308 yen258,626 yen
341,007 yen

9,947 yen
7,818 yen
7,380 yen
3.0%
6.0%
746 yen259,118 yen
353,795 yen

Investment unit price465,000 yen

405,000 yen

367,000 yen

416,500 yen

423,000 yen

490,500 yen

1.6 times
1.9 times
33.0 times
24.3 times
77.3%
80.8%

1.3 times
1.6 times
27.2 times
21.8 times
77.6%
83.1%

1.1 times
1.4 times
25.4 times
19.7 times
77.6%
83.7%

1.3 times
1.6 times
28.7 times
22.3 times
77.5%
89.3%

1.2 times
1.6 times
28.9 times
22.4 times
77.7%
89.2%

1.4 times
1.9 times
31.4 times
24.7 times
74.2%
86.7%

LTV

(total assets)

31st Period(Jun. 2017)(unrealized gains and losses)(acquisition value)

NOI yield(book value)(appraisal value)

Afterdepreciationyield(acquisition value)

Implied cap
rate

NOI yield
After-depreciation yield(immediately before the ex-right date)

NAV multiple
PBR
PER
FFO multiple
Pay out ratio（FFO）（AFFO）

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

5. Dividend yield = Cash distribution per unit (annualized, most recent result x 2) /investment unit price6. ROE (return on equity) ＝ Net income (annualized, most recent result x 2) / net assets
7. NAV per unit = (Net assets + unrealized gains or losses – total cash distributions) /number of units outstanding (end of period)
8. NAV multiple = Investment unit price / NAV per unit
9. PBR (price book-value ratio) = Investment unit price / net assets per unit

10.
11.
12.
13.
14.

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

40

4. Appendix

Track Record of 17 Years■ Cash Distribution per Unit and Occupancy Rate
Cash distribution per unit (yen)Occupancy rate (%)
Occupancy rate
99.2 99.2
97.7 98.3 99.0 98.7 98.0 97.0 96.2 96.4 96.1
96.9 97.0 97.2 97.5 97.4 97.8 98.3 98.5 98.4 98.2
95.2 94.0 93.8
94.9 96.1
93.6 94.0 95.0 94.8 94.4 95.6
92.6 93.1 94.3

6,912 6,873

6,671
5,738

6,081

6,370 6,411 6,509

6,873 6,996 6,671

7,122 7,092

6,933 6,770

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

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

6,351

6,756
6,419 6,588

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

96.4％ on average

7,326 7,380

3,731

Cash distribution per unit

6,505 yen on average

2,545(excluding the 1st Period)

1st

2nd

(Jun. ‘02) (Dec. ’02)

3rd

4th

(Jun ’03)(Jun ’03)

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

30th

31st

32nd

33rd

34th

35th

(Jun. ’04) (Dec. ’04) (Jun. ’05) (Dec. ’05) (Jun. ’06) (Dec. ’06) (Jun. ’07) (Dec. ’07) (Jun. ’08) (Dec. ’08) (Jun. ’09) (Dec. ’09) (Jun. ’10) (Dec. ’10) (Jun. ’11) (Dec. ’11) (Jun. ’12) (Dec. ’12) (Jun. ’13) (Dec. ’13) (Jun. ’14) (Dec. ’14) (Jun. ’15) (Dec. ’15) (Jun. ’16) (Dec. ‘16) (Jun. ’17) (Dec. ’17) (Jun. ’18) (Dec. ’17) (Jun. ’19)

（period）■ Asset Size
Office properties in
Tokyo

1,257

921

Office properties in
Other Cities

1,396

1,636

1,796

Retail properties

1,976 2,026 2,092(based on acquisition price; 100 million yen)

2,224

2,453 2,519

2,751 2,806

2,994 3,106

3,986
3,809 3,919
3,312 3,415 3,415

4,047 4,047 4,055 4,095 4,103 4,103

4,214

4,350 4,350 4,350 4,350 4,395

3,449

Breakdown by area andby asset class(as of Jun. 30, 2019)
Office properties inTokyo
293.6 billion yen
Office properties in Other
Cities41.0 billion yen

945

Retail properties

104.7 billion yen
1st

2nd

(Jun. ‘02) (Dec. ’02)

3rd

4th

(Jun ’03)(Jun ’03)

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

25th

26th

27th

28th

29th

30th

31st

32nd

33rd

34th

35th

(Jun. ’04) (Dec. ’04) (Jun. ’05) (Dec. ’05) (Jun. ’06) (Dec. ’06) (Jun. ’07) (Dec. ’07) (Jun. ’08) (Dec. ’08) (Jun. ’09) (Dec. ’09) (Jun. ’10) (Dec. ’10) (Jun. ’11) (Dec. ’11) (Jun. ’12) (Dec. ’12) (Jun. ’13) (Dec. ’13) (Jun. ’14) (Dec. ’14) (Jun. ’15) (Dec. ’15) (Jun. ’16) (Dec. ‘16) (Jun. ’17) (Dec. ’17) (Jun. ’18) (Dec. ’17) (Jun. ’19)

（period）

41

4. Appendix

Portfolio Diversification (as of June 30, 2019)

Ratio by Asset Class

Ratio by Area

Ratio by Asset Size

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

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

Retailproperties

23.8%

Medium-sized

Other Cities

15.3%
Officeproperties
Greater Tokyo

76.2%(3,000 m2 to less than 10,000
m2)

Central Tokyo

30.8%

Very large(30,000 m2 or more)

55.9%

28.8%

45.1%

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

24.1%

Ratio by Rent Zone

Ratio by Tenant’s Industry

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

Less than 15
thousand yen

Transportation 1.3%

2.6%

30 thousand yen
more
15 to less than 20
thousand yen

0.9%

Fixed-term lease contract

Public Services 3.8%

Real Estate 6.5%

29.5%

Services

Wholesale and Retail

20 to less than 25
thousand yen 19.6%

25 to lessthan 30
thousand yen

14.5%

23.6%

Construction 7.3%

32.6%

15.7%

Other

Medical and Welfare 3.5%

Information andCommunications

Ordinary lease contract

20.0%

85.5%

9.4%

Finance and11.7% Manufacturing
Insurance

12.1%

42

4. Appendix

Portfolio Strategy

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

Extra-large
11.0%

Medium-sized

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

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

35.3%

20.4%

Large

Large and medium-sized

68.6%(10 thousand m2 to lessthan 30 thousand m2)

33.3%

If Other very large is included,

89.0%
1. Ratio by Size (Office properties) indicates the ratios based on the total leased space of office properties in each size
category, which is classified by the total leasable space of an entire office property. Furthermore, The Otemachi Tower(Land with Leasehold Interest) is excluded from the calculation as it is a land property.

■Ratio by Rent Zone (Central Tokyo, Greater Tokyo)
330 thousand yen or more
Of which, Tokyo Square Garden accounts for
7.7%.

Less than 15
thousand yen

40.4%

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

1.23
million m2

5.61
million m2(forecast)

1,000

500

0

500

(thousand m2)

1,000

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

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

Class A Bldg.

Class B Bldg.

Class C Bldg.

45,00024.4%

2.2%
15 to less than
20 thousand yen

Very large(30,000 m2 or more)

Less than 30 thousand yen
25 to less than 30
thousand yen

20 to less than
25 thousand yen

14.7%

75.6%

35,00025,00015,000

18.4%

5,000
Jun. '07
1. “Ratio by Rent Zone (Central Tokyo, Greater Tokyo)” indicates the ratio of monthly rent by average rent per tsubo ofeach property to the total monthly rent of office properties held in Central Tokyo and Greater Tokyo as of the end of
the Jun. ’19 period.

(month year)

Jun. '10

Jun. '13

Jun. '16

Jun. '19

1． Prepared by TRIM based on the statistics data publicized by Sanko Estate Co., Ltd. and NLI Research Institute.
2．Please refer to glossary for definition of building classes.

43

4. Appendix

Tenant Diversification (as of June 30, 2019)■ Ratio of Tenant Occupancy■ 20 Largest Tenants (by property; based on end tenants)• The number of office tenants other than the sponsors, etc. with tenant
occupancy of 1% or more is only 4 (combined occupancy: 4.7%)(excluding property comprising land with leasehold interest) .
• Many of the retail tenants have long-term lease contracts, and thepossibility for them to cancel is rather small.

Category(No. of tenants)

Tenant28.2%

Less than 1%

65.4%

Sponsors, etc. with
1% or more

1.7%
Other tenants with
4.7%
1% or more

Housing Design Center Kobe

35,444.13

7.5

Seiyu GK

Tanashi ASTA

31,121.71

6.6

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

19,740.95

4.2

JPR Umeda Loft Bldg.

18,586.97

3.9

Musashiurawa Shopping Square

9,558.51

2.0

Tower Records Japan Inc.

JPR Shibuya Tower Records Bldg.

8,076.85

1.7

The Maruetsu, Inc.

Cupo-la Main Bldg.

5,963.00

1.3

A companyMusashiurawa Shopping Square

5,285.40

1.1

The Otemachi Tower(land with Leasehold Interest

7,875.50

1.7

Yakuin Business Garden

6,029.57

1.3

Rise Arena Bldg.

6,023.39

1.3

JPR Nagoya Fushimi Bldg.

5,263.77

1.1

JPR Nagoya Fushimi Bldg.

4,904.64

1.0

Sompo Japan Nipponkoa Inc.

Sompo Japan Sendai Bldg.

4,379.30

0.9

Ｆcompany

Olinas Tower

4,255.56

0.9

Ｇ company

Shinjuku Square Tower

4,242.48

0.9

Ｈ company

Niigata Ekinan Center Bldg.

4,078.97

0.9

Ｉ company

Omiya Prime East

4,005.05

0.9

Ｊ company

MS Shibaura Bldg.

3,922.74

0.8

Ｋ company

Gotanda First Bldg.

3,869.35

0.8

Sponsors, etc. with
1% or more
Tokyo Prime Stage Inc.
(1 company)
Ｂ company
Other tenants with Ｃ company
1% or more
Ｄ company(4 companies)
Ｅ company

Less than 1%(745 companies)

Ratio of
Leased space
occupancy(㎡)(%)

ABC Development Corporation

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

Retail tenants with
1% or more

Occupying property

44

4. Appendix

Move-Ins and Move-Outs of Tenants (as of June 30, 2019)■ Breakdown and Changes in Move-Ins and Move-Outs■ Move-In/Move-Out Spaces by Property(Move-in/move-out spaces by area and asset class: m2)

Move-Ins
Office properties inCentral Tokyo
Office properties inGreater Tokyo
Office properties in
Other Cities
Retail properties
Total(Move-ins)‐(move-out)

Net Increase/DecreaseMove-Outs

20,0003.0

10,00013,6637,605

0-10,392-10,341-10,367-10,000-20,000-30,000-2.3

JPR Ichigaya Bldg.

+343-1,609+963

BYGS Shinjuku Bldg.

-444

901

-1,282-381

Shinjuku Center Building+4

Shinagawa Canal Bldg.

704

-433

+270

+169

JPR Harajuku Bldg.

-1

7,616

-9,979-2,362

（%）

5

1.5

1.4

6,858

6,387
-3,707
-0.8

-2.3

-396

2,572

1.6

3

19,916
11,310JPR Crest Takebashi Bldg.

-3,2152.5
1.7-2,291-6,653Move-ins (left axis)
Move-outs (left axis)
Rate of move-ins (right axis)
Rate of move-outs (right axis)
4.3

30,000-742

Kanematsu Bldg. Annex

3,437(Changes in move-in/move-out spaces and rate of move-ins/move-outs)（㎡）

Kanematsu Bldg.

-5,039-18,773

7,616-9,979

-4.1

-1

-1.1
-2.2

-2.3

1

-3
-5

Jun. '16 Dec. '16 Jun. '17 Dec. '17 Jun. '18 Dec. '18 Jun. '19 （period）

Move-ins

Move-outs

（㎡）

480

-1,222-2,291
-396

343
-675

231

4
-144

313

-1,708

1,706
-197

197

-18

160

Science Plaza - Yonbancho Plaza+0

Tokyo Square Garden+141

FUNDES Suidobashi

+0

-174

JPR Chiba Bldg.

-73

-73

JPR Yokohama Nihon Odori Bldg.

+370

Shinyokohama 2nd Center Bldg.

+277

Kawaguchi Center Bldg.

+0

Tachikawa Business Center Bldg.

+389

Yume-ooka Office Tower

+115

174
370
635

-357
-61

61

389
-115

Olinas Tower+0

Tokyo Tatemono Yokohama Bldg.

-0

Kawasaki DICE Bidg.

+270

Tokyo Tatemono Honmachi Bldg.

+236

JPR Hakata Bldg.

+4

JPR Naha Bldg.

-339

Tenjin 121 Bldg.

-0

JPR Nagoya Fushimi Bldg.

-408

-408

JPR Shinsaibashi Bldg.

+125

-328

115

-701

701
-299
-259

299
529

-50

287

-99

104

-339
-55

55

453

45

4. Appendix

Occupancy Rate and Rent

■ Changes in Occupancy Rate, Average Downtime and Rents

RetailOfficeItem(forecast)Jun. 2016(29th period)

Dec. 2016(30th period)

Jun. 2017(31st period)

Dec. 2017(32nd period)

Jun. 2018(33rd period)

Dec. 2018(34th period)

Jun. 2019(35th period)

Dec. 2019(35th period)

96.8

97.5

97.8

97.8

97.6

98.8

98.8

99.0

Occupancy rate based on
concluded contract, %Occupancy rate based on
generated rents, %Average rent (entire area), yen

94.7

96.0

96.5

97.1

95.8

97.8

98.1

98.2

16,961

17,003

17,57917,626

17,85917,98018,17718,328Average rent (central Tokyo), yen

19,663

19,71520,70520,74820,882

21,053

21,45921,661

Average rent (greater Tokyo), yen

16,813

16,77816,861

16,88817,134

17,233

17,24017,288Average rent (other cities), yen

11,967

12,347

12,164

12,322

13,032

13,14913,375

13,456

Gap in actual rent, %Occupancy rate based on
concluded contract, %Occupancy rate based on
generated rents, %

-6.3

-4.1

-4.7

-7.0

-7.5

-8.8

-10.4

-

99.9

100.0

100.0

99.7

99.4

99.9

99.9

99.9

99.9

99.9

99.9

99.6

99.2

99.4

99.8

99.9

■ Leased Area by Rent Level/Ratio of Contracts
with Upward Rent Revision (Contracts renewed Jun. ’19 period)■ Status of Rent revision, Rent Through Tenant Replacement andContribution Rate (Jun. ‘19)
Number ofcontracts

Area
(m2)

Area ratio(%)

Increase/
Decrease(million yen)

Increase/
Decreaseratio (%)

189

113.2

94.3

+15.2

+3.4

Upward revision of rent

98

49.3

41.1

+17.1

+6.8

Downward revision of rent
Neither upward or
downward revision of rent
Tenant replacement subtotal
Increase through tenant
replacement
Decrease through tenant
replacements
Total (Rent revision + Tenant
replacement)

1

35.4

29.5

-1.9

-4.8

90

28.5

23.7

0.0

0.0

32

6.8

5.7

+5.1

+11.6

24

4.6

3.9

+6.9

+23.7

8

2.2

1.8

-1.8

-13.0

221

120.1

100.0

+20.3

+4.1

Item
Rent revision subtotal

Area(thousand m2)

Area ratio(%)

Ratio ofcontracts withupwardrevision (%)

Less than market rent

31.4

53.7

82.0

Within market rent

12.9

22.1

12.5

Market rent more

14.2

24.2

19.4

Item

■ Leased Area by Rent Level(Contracts renewed Dec. ‘19. period - Jun. ’21 period)
Area (thousand m2)

Area ratio (%)

Less than market rent

139.2

55.5

Market rent

59.0

23.5

Market rent more

52.6

21.0

Item

■ Breakdown of Reasons for Move-ins (Jun. ’19 Period)
Newestablishment/
Expansion

Relocation
within samebuilding

Downsizing/Cost
reduction

14

5

0

Consolidation

Location
Better building

Eviction, etc.

0

7

1

46

4. Appendix

Yields (as of June 30, 2019)■ Yields by Area and by Asset Class (based on book value)

Central Tokyo(NOI yield)
（%）

10

5

■ NOI Yield by Property (based on book value)

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

0

OfficeOfficeOfficeproperties in
Retailproperties in Greater Tokyo properties in
Other Cities properties
Central
Tokyo
6.6%
6.6%
5.3%

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

JPR Ichigaya Bldg.
Oval Court Ohsaki Mark WestBYGS Shinjuku Tower0

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

(After-depreciation yield)

Shinagawa Canal Bldg.
Rokubancho Bldg.

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

JPR Harajuku Bldg.

10

Tokyo Tatemono Kyobashi Bldg.

OfficeOfficeOfficeproperties in
Retailproperties in Greater Tokyo properties in
Other Cities properties
Central
Tokyo

5

4.9%
3.5%

0

4.8%

Portfolio average
4.1%

4.4%

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

Science Plaza-Yonbancho Plaza
Shibadaimon Center Building
Tokyo Square Garden
KY Kojimachi Bldg.
JPR Shibuya Tower Records Bldg.
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
JPR Ginza Namiki-dori Building
FUNDS Suidobashi
Average of Central Tokyo

0

5

10

JPR Yokohama Nihon Odori Bldg.

2.9

8.0
4.4
5.1
4.6
3.2
3.3
4.2
5.9
4.3
5.3
6.4
2.9
4.0
3.3
5.4
7.0
3.1
4.6
4.9
3.2
3.7
3.1
3.3
4.3
4.1

15

6.4
7.6
6.7
8.7
7.8
8.5
6.3
7.4
6.7
5.8
5.5
7.8

Arca East Bldg.

5.1
5.9
6.4

JPR Crest Takebashi Bldg.

（%）

15
JPR Chiba Bldg.

6.6

Gotanda First Bldg.

Portfolio average
5.1%

10

3.5
4.6
4.6

Shin-Kojimachi Bldg.

Shinjuku Square Tower（%）

5

MS Shibaura Bldg.

4.1%

Greater Tokyo and Other Cities

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

14.3

Tanashi ASTA

8.8

Cupo-la Main Bldg.

4.4

JPR Musashikosugi Bldg.
Musashiurawa Shopping Square
Kawasaki Dice Bldg.
FUNDES Ueno
Average of Greater Tokyo

6.2
5.1
3.9
6.8
11.1

Niigata Ekinan Center Bldg.
Tokyo Tatemono Honmachi Bldg.

3.8
6.8

JPR Hakata Bldg.

9.1

JPR Naha Bldg.

10.9
9.4

Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.

7.7

Tenjin 121 Bldg.

6.4

JPR Dojima Bldg.

4.6

JPR Nagoya Fushimi Bldg.

7.8

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

2.9
4.9
5.0
4.5
5.9

47

4. Appendix

Diversification of Lenders and Lender Formation (as of June 30, 2019)

Diversifying fund procurement sources with a lender formation comprising
31 financial institutions and through issuance of investment corporation bonds

Sompo Japan Nipponkoa Insurance Inc.

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

National Mutual Insurance Federation ofAgricultural Cooperatives

2,000

Sumitomo Life Insurance Company

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

Yamaguchi Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd
Hiroshima Bank, Ltd.
The Hyakugo Bank, Ltd.
Tokyo Marine & Nichido Fire Insurance
The Chiba Bank, Ltd.
Daido Life Insurance Company
Daishi Bank, Ltd
The 77 Bank, Ltd.
NTT FINANCE CORPORATIONThe Iyo Bank, Ltd

The Hachijuni Bank, Ltd

The Chugoku Bank, Ltd
Taiyo Life Insurance Company
Resona Bank, Ltd
The Nishi-Nippon City Bank, Ltd.
The Shinkumi Federation Bank
Meiji Yasuda Life Insurance Company(million yen)Interest-bearing debt balance: 185,020 million yen

Investment corporation
bonds
25,500(Breakdown of investment corporation bonds)
Seventh series of bonds

Mizuho Bank, Ltd
27,000

Sixteenth series of bonds
Eighteenth series of bonds
Nineteenth series of bonds
Twentieth series of bonds

The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
26,000Sumitomo Mitsui Banking
Corporation
12,500Development Bank of Japan,
Inc.
10,920Shinsei Bank, Ltd. 10,000

The Bank of Fukuoka, Ltd.
The Norinchukin Bank 5,000
5,000

Aozora Bank, Ltd. 7,900

Mizuho Trust & Banking Co.,
Ltd. 7,000
Shinkin Central Bank 7,000

Twenty-first series of bonds
Twenty-second series ofbonds
Twenty-third series of bonds

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

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

Credit
Limit

4,000
4,000
4,000
4,000
4,000
4,000
24,00048

4. Appendix

Appraisal Value (as of June 30, 2019)■ An Increase in Unrealized Gains■ Factors of Change in Appraisal Value• Unrealized gains expanded to 94.17 billion yen due to an increase inappraisal value• Appraisal value increased for 42 properties with direct cap rate falling for
37 properties (out of 63 properties in total)
Appraisal value
Unrealized gains
Ratio of unrealized gains
50.90 billion yen
94.1 billion yen
22.7%(Changes in direct cap rate)(up 15.3 billion yen from 34th
period (Dec. ‘18))

4.9(up 11.3 billion yen from 34th
period (Dec. ‘18))• Decreased by 1.1 percentage points from the 17th period ended June 2010
(4.8%), the peak period for office properties in Central Tokyo
Entire portfolio（％）(up 2.6% pt from 34th period(Dec. ‘18))

4.6
4.3

(Changes in unrealized gains and losses)

4.0

Unrealized gains and losses（left axis）（％）（100 million yen）

1,000

94.1 billion yen 50

900

45

800

40

700

35

600

30

22.7%

500

25

3.7
3.4
0.0

Jun.
'09

（100 million yen）

300

15

1,200

200

10

900

100

5

0

0

-100

-5

-200

-10

-300

-15
Jun. '19

Jun. '07

Jun. '09

Jun. '11

Jun. '13

Jun. '15

Jun. '17（period）

Jun.
'11

Jun.
'12

Jun.
'13

Jun.
'14

Jun.
'15

Jun.
'16

Jun.
'17

Jun.
'18

Jun.
'19 （period）(Breakdown of unrealized gains and losses)• Amounts of both unrealized gains and unrealized losses improved from theend of the 34th period (Dec. ’18).

20

Jun. '05

Jun.
'10

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

400

Jun. '03

Office properties in Central Tokyo

5.2

Unrealized gains

Unrealized losses

600

Total 63 properties

51 properties

300

94.1 billion yen

107.3 billion yen

ポートフォリオ合計
Entire portfolio-13.1 billion yen
Breakdownof unrealized
gains内訳
and losses

0

12 properties

-300

49

4. Appendix

Property nameAppraisal Value by Property (as of June 30, 2019)

Appraisalvalue（mn yen）

Change（mn yen）

Direct cap(NCF Cap)(%)

Change（% pt）

DCF
discountrate(%)

Change(% pt)

DCF
terminal
cap(%)

Change（% pt）

Appraisalvalue（mn yen）

Change（mn yen）

Direct cap(NCF Cap)(%)

Change（% pt）

DCF
discountrate(%)

Change(% pt)

DCF
terminal
cap(%)

Change（% pt）

Book value(mn yen)

Unrealized
gain or loss
(mn yen)Tachikawa Business Center Bldg.

4,260

+300

4.2

-0.1

3.9

-0.1

4.4

-0.1

2,864

+1,395

Rise Arena Bldg.

9,090

+530

3.9

-0.1

3.6

-0.1

4.0

-0.1

5,203

+3,886

Yume-ooka Office Tower

6,910

+250

4.1

-0.1

3.8

-0.1

4.3

-0.1

5,328

+1,581

Olinas Tower

39,300 +1,200

3.7

-0.1

3.4

-0.1

3.9

-0.1

26,987+12,312

Tokyo Tatemono Yokohama Bldg.

9,250

+380

4.1

-0.2

3.9

-0.1

4.3

-0.1

7,128

+2,121

Omiya Prime East

9,190

+430

4.4

-0.1

4.2

-0.1

4.6

-0.1

5,686

+3,503

UnrealizedBook value
gain or loss
(mn yen)(mn yen)Kanematsu Bldg.

14,000

-

3.5

0.0

3.3

0.0

3.7

0.0

14,605-605

Kanematsu Bldg. Annex

3,450

+930

3.9

0.0

3.7

0.0

4.1

0.0

2,436

+1,013

JPR Ningyo-cho Bldg.

2,780

+70

3.9

-0.1

3.7

-0.1

4.1

-0.1

2,096

+683

Shin-Kojimachi Bldg.

3,990

+130

3.7

-0.1

3.4

-0.1

3.9

-0.1

2,437

+1,552

Property name

JPR Crest Takebashi Bldg.

3,580

+10

3.8

0.0

3.6

0.0

4.0

0.0

3,227

+352

MS Shibaura Bldg.

13,900

+400

4.2

-0.1

3.9

-0.1

4.4

-0.1

10,909+2,990Gotanda First Bldg.

3,710

+200

3.8

-0.1

3.5

-0.1

4.0

-0.1

2,913

+796

Tanashi ASTA

12,500

-

5.2

0.0

5.1

0.0

5.4

0.0

7,184

+5,315JPR Ichigaya Bldg.

4,840

+10

3.8

0.1

3.6

0.1

4.0

0.1

5,204

-364

Cupo-la Main Bldg.

2,910

+50

5.0

-0.1

4.8

-0.1

5.2

-0.1

1,660

+1,249Oval Court Ohsaki Mark West

4,760

-190

3.9

0.0

3.7

0.0

4.1

0.0

2,797

+1,962

JPR Musashikosugi Bldg.

5,670

-20

4.7

0.0

4.5

0.0

4.9

0.0

6,975

-1,305

Shinjuku Square Tower

14,900

+100

3.7

0.0

3.5

0.0

3.9

0.0

13,210+1,689Musashiurawa Shopping Square

4,350

-

4.9

0.0

4.8

0.0

5.1

0.0

3,590

+759

BYGS Shinjuku Bldg.

20,200 +1,300

3.7

0.0

3.5

0.0

3.9

0.0

15,342+4,857

Kawasaki Dice Bldg.

16,200

-

4.1

-0.1

4.0

-0.1

4.3

-0.1

13,146+3,053
+677

895

+1

4.6

0.0

4.4

0.0

4.8

0.0

583

+311

Niigata Ekinan Center Bldg.

2,260

+10

5.6

-0.1

5.6

-0.1

5.8

-0.1

1,582

Shinjuku Center Bldg.

17,100

+500

3.3

-0.1

3.0

-0.1

3.5

-0.1

22,136-5,036

Tokyo Tatemono Honmachi Bldg.

3,610

+110

4.5

-0.1

4.2

-0.1

4.7

-0.1

4,250

-640

Minami Azabu Bldg.

2,910

+10

3.9

-0.1

3.7

-0.1

4.1

-0.1

3,807

-897

JPR Hakata Bldg.

3,920

+270

4.3

-0.1

4.2

-0.1

4.5

-0.1

2,932

+987

Shinagawa Canal Bldg.

2,134

+114

4.0

-0.1

3.7

-0.1

4.2

-0.1

1,708

+425

JPR Naha Bldg.

2,000

+50

5.1

-0.1

5.1

-0.1

5.3

-0.1

1,425

+574

Rokubancho Bldg.

3,550

+60

4.9

-0.1

3.8

-0.1

4.2

-0.1

2,855

+694

Sompo Japan Sendai Bldg.

4,580

+470

4.9

-0.1

4.7

-0.1

5.2

-0.1

2,374

+2,205

JPR Harajuku Bldg.

11,100

+100

3.7

0.0

3.5

0.0

3.9

0.0

8,722

+2,377

Sompo Japan Wakayama Bldg.

1,640

+20

6.3

-0.1

6.1

-0.1

6.6

-0.1

1,315

+324

Tokyo Tatemono Kyobashi Bldg.

6,830

-

4.2

0.0

4.0

0.0

4.4

0.0

4,702

+2,127

Tenjin 121 Bldg.

3,340

+190

4.3

-0.1

3.9

-0.1

4.5

-0.1

2,042

+1,297

JPR Sendagaya Bldg.

12,100

-

3.8

0.0

3.6

0.0

4.0

0.0

14,804-2,704

JPR Dojima Bldg.

3,490

+80

4.2

-0.1

4.0

-0.1

4.4

0.0

2,152

+1,337

Ginza Sanwa Bldg.

4,090

+10

3.1

0.0

2.8

0.0

3.2

0.0

3,694

+395

JPR Nagoya Fushimi Bldg.

3,310

+280

4.9

-0.2

4.5

-0.1

4.9

-0.1

3,828

-518

50,000 +1,700

2.7

-0.1

2.6

-0.1

2.8

-0.1

38,388 +11,611

Yakuin Business Garden

19,000 +1,000

4.1

-0.1

3.9

-0.1

4.3

-0.1

10,222+8,777

Science Plaza - Yonbancho Plaza

3,260

-210

3.9

-0.1

3.5

-0.1

4.1

-0.1

2,738

+521

Benetton Shinsaibashi Bldg.

4,550

+130

3.7

-0.1

3.4

-0.1

3.8

-0.1

5,125

-575

Shibadaimon Center Bldg.

6,020

-810

3.6

-0.1

3.3

-0.1

3.8

-0.1

4,153

+1,866

JPR Umeda Loft Bldg.

14,200

-

3.9

0.0

3.6

0.0

4.1

0.0

12,417+1,782

Tokyo Square Garden

20,600

-

2.7

0.0

2.5

0.0

2.9

0.0

18,539+2,060

Housing Design Center Kobe

7,550

+120

5.3

-0.1

5.1

-0.1

5.4

-0.1

6,082

+1,467

JPR Shibuya Tower Records Bldg.

14,100

-

3.5

0.0

3.3

0.0

3.7

0.0

11,460+2,639JPR Chayamachi Bldg.

7,820

+310

3.3

-0.1

3.0

-0.1

3.4

-0.1

6,020

+1,799JPR Jingumae 432

4,210

+100

3.0

-0.1

3.1

-0.1

3.2

-0.1

4,267

-57

Across Shinkawa Bldg. Annex

The Otemachi Tower (Land with Leasehold Interest)

Shinjuku Sanchome East Bldg.

2,880

-90

3.3

0.0

2.8

0.0

3.5

0.0

2,584

+295

Total

498,639 +10,575

405,051+93,588

Yurakucho Ekimae Bldg. (Yurakucho Itocia)

3,300

-

3.0

0.0

2.6

0.0

3.2

0.0

3,296

+3

Central Tokyo

270,109 +4,425

236,982+33,126

Ginza Gates

11,300

-

2.9

0.0

2.6

0.0

2.9

0.0

10,138+1,161

Greater Tokyo

147,260 +3,110

106,295+40,964

FUNDES Suidoubashi

3,620

-20

3.6

0.0

3.4

0.0

3.8

0.0

3,218

+401

Other Cities

81,270 +3,040

61,772+19,497

Arca East

6,850

+280

3.9

-0.1

3.6

-0.1

4.1

-0.1

4,220

+2,629JPR Chiba Bldg.

1,780

-

5.3

0.0

5.1

0.0

5.5

0.0

2,194

-414

Properties to be acquired in 35th period

JPR Yokohama Nihon Odori Bldg.

2,350

+10

4.9

0.0

4.7

0.0

5.1

0.0

2,415

-65

Shinagawa Canal Bldg. (additional acquisition)

Shinyokohama 2nd Center Bldg.

2,110

+180

4.6

-0.1

4.4

-0.1

4.8

-0.1

1,423

+686

Kawaguchi Center Bldg.

9,330

-670

4.8

-0.1

4.5

-0.1

5.0

-0.1

7,344

+1,985JPR Ueno East Bldg.

5,210

+190

3.8

-0.1

3.6

-0.1

4.0

-0.1

2,940

+2,269

215

+33

4.0

-0.5

3.7

-0.1

4.2

-0.1

183

+31

KY Kojimachi Bldg.

6,280

-

3.4

0.0

3.1

0.0

3.5

0.0

5,811

+468

FUNDES Ueno

3,930

-

3.8

0.0

3.5

0.0

4.0

0.0

3,820

+109

414,867+94,197

Total (as of 30 Jun. '19)

509,065 +10,609

1. Direct cap indicates the capitalization rate that serves as the standard for calculating the value estimated by income approach based on the direct capitalization method.
2. DCF discount rate and DCF terminal cap indicate the period income discount rate and the terminal capitalization rate that serve as the standard for calculating the value estimated by income approach based on the discounted cash flow (DCF) method.
3. The period-on-period changes, acquired in the 35th fiscal period indicates a comparison with the figures based on the appraisal values upon their acquisition (Shinagawa Canal Bldg.: as of 15 Jan. ‘19, KY Kojimaachi Bldg. and FUNDES Ueno: as of 1 Jun. ‘19). Furthermore Tokyo Tatemono
Kyobashi Bldg. that was sold in 35th fiscal period is excluded from calculation of the period-on-period change figures.

50

4. Appendix

Asset Manager■ Summary of Asset Manager■ Sponsors(as of June 30, 2019)

Name

Tokyo Realty Investment Management, Inc. (TRIM)

Address

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

Date of Foundation

April 28, 2000

Paid-in Capital(as of June 30, 2019)

Name

No. ofShareholding
seconded staff
ratiofrom sponsors

Tokyo Tatemono

52%

10

350 million yen

Yasuda Real Estate

18%－

Business Description

Asset management for investment corporation

Taisei Corporation

10%－

President and CEO

Yoshihiro Jozaki

Directors

9 (4 full-time and 5 part-time)

Sompo Japan Nipponkoa Insurance

10%

1

Number of Officers

38

Meiji Yasuda Life Insurance

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

Summary of sponsors support

1

Personnel support through dispatching personnel to TRIM
and other measures

2

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

3

Supply of properties and provision on information onproperty acquisition

4

Fund procurement support including funding through debt
finance

Board of Directors
President & CEO
Investment Committee

Compliance Committee
Compliance Office

Investment Management Division

Financial DivisionCorporate Planning /Administration Division

Research Grp.

Financial Grp.

Planning Grp.

Investment Grp.

IR Grp.

General Administration Grp.

Asset Management 1Grp.

Fund Management Grp.

Asset Management 2Grp.
Asset Management 3Grp.
Asset Engineering Grp.

51

4. Appendix

Office Property Leasing Market

Net Increase in Leasable Floor Area, Strong Demand and Impact on Vacancy Rate
■ Changes in New Supply/Demand Area, Leasable Floor Area and Vacancy Rate

Comparison of increases in new supply area and leasable floor area

( Tokyo CBDs )• Net increase in leasable floor area (in stock) over the new supply area is small.

+400• New demand has remained strong, surpassing the increase in leasable floor area by
volumeUp 2.34 mn. tsubo• Employed population is on an upward trend, leading new demand in Tokyo.
Increase in labor participation ratio, primarily by females and elderly people, ispromoted by political initiatives and is likely to continue over the medium term.

+200

Net increase in leasable
floor area+0

New supply（thousand tsubo）

300

New demand

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

（100 thousand tsubo）

Vacancy rate

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

15(Vacancy rate: right axis, Others: left axis, New supply and new demand indicate actual number)Comparison of increases in leasable floor area and occupied area
Net increase in leasable floor
Increase in occupied area

（100 thousand tsubo)

2019-2023
Average of new supply

2002-2018
Average of new supply
200

+200

Up 1.34 mn. tsubo

+150

10

+100

Up 1.09 mn. tsubo

+50

7.34

+0

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

5.47
4.03

100

5

3.61

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

3.12

Employed population

140

1.88

Male

FemaleOccupied area

134pt

130

123pt
119pt
115pt

120

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

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

110
100
'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

'18 （year）

52

4. Appendix

For-Sale Property Market

Cap Rate of Tokyo Office Properties Continues Low Level

Apr. '19

Apr. '18

Apr. '17

Apr. '16

Apr. '15

Apr. '14

Apr. '13

Apr. '12

Apr. '11

Economy hotel for lodging (Osaka)

Apr. '10

Retail property (Osaka)

Economy hotel for lodging (Tokyo)

Apr. '09

Apr. '19

Apr. '18

Apr. '17

Apr. '16

Apr. '15

Apr. '14

Apr. '130
3.0

Apr. '12

3.00

Apr. '11

4.0

Apr. '10

4.0

Apr. '09

5.0

Apr. '08

5.0

Apr. '07

6.0

Apr. '06

6.0

Apr. '05

7.0

Apr. '04

7.0

Retail property (Ginza)

Apr. '08

8.0

Apr. '05

8.0(%)

Apr. '04(%)

Nagoya (around Nagoya Sta.)
Osaka (Umeda)

Apr. '07

Tokyo (Otemachi, Marunouchi)
Osaka (Midosuji)
Fukuoka (Tenjin)■ Expected Cap Rate of Retail Properties and Economy Hotel for Lodging

Apr. '06■ Expected Cap Rate of Office (major cities)

1. Prepared by TRIM based on the Japanese real estate investor survey publicized Japan Real Estate Institute.

53

4. Appendix

Unitholders (as of June 30, 2019)■ Number of Units by Unitholder Type (923,000 units in total)
Individuals
30,9163%■ Top Unitholders
Rank

Securities
companies
38,0444%Foreign investors
245,831
27%

Financial
institutions
524,90357%

Of which, investment
Trusts incorporating
JPR units
264,957
29%

Other domestic
corporation
83,306
9%Name

Number of
Owned
Units

Share(%)

1

Japan Trustee Services Bank, Ltd. (Trust Account)

192,223

20.8

2

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

129,745

14.1

3

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

33,642

3.6

4State Street Bank West Client Treaty 505234

30,834

3.3

5Tokyo Tatemono Co., Ltd.

29,300

3.2

6

Kawasaki Gakuen

25,0002.7

7

Meiji Yasuda Life Insurance Company

24,000

2.6

8

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

20,297

2.2

9

JP Morgan Securities Japan Co., Ltd.

14,625

1.6

10Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

13,0191.4

512,685

55.5■ Number of Unitholders by Unitholder Type (10,376 unitholders in total)
Foreign investors
485
Other domestic
5%
corporation
189
2%
Financial
institutions
171
2%

Securities
companies
20
0%

Individuals
9,511
92%

Total

54

4. Appendix

Investment Unit Price and Yield■Changes in JPR Dividend Yield■ Changes in JPR Unit Price

(pt)

JPR

TSE REIT Index

(%)

130

JPR

TSE REIT Index

Aug. '18

Oct. '18

5.0

4.5

120

4.0
110
3.5
100
3.0

90

80
0
Jun. '18

2.5

Aug. '18

Oct. '18

Dec. '18

Feb. '19

Apr. '19

Jun. '19(month, year)

2.0
0
Jun. '18

Dec. '18

Feb. '19

Apr. '19

Jun. '19 (month, year)

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

55

4. Appendix

Portfolio Map■Central Tokyo

Shinjuku

Ichigaya

A-12
A-14

A-4

A-5

A-9

A-17

A-24

A-27

A-4

SaitamaPrefecture

B-5

Musashiurawa

A-20

B-6

A-3

Chiyoda Ward

A-1

A-26

A-13

A-22

B-7

Olinas Tower
Tokyo Tatemono Yokohama Building

B-13

Omiya Prime East

B-1

Tanashi ASTA

B-3

Cupo-la Main Bldg.

B-4

JPR Musashikosugi Bldg.

Yokohama

B-5

Musashiurawa Shopping Square

B-3

B-6

Kawasaki Dice Bldg.

Kawasaki

B-6

B-5

A-15

Shin-Yokohama
B-12

Tamachi
B-10

Tachikawa Business Center Bldg.

B-12

B-4

Kanagawa
Prefecture

Hamamatsucho

JPR Ueno East Bldg.

B-8

Chiba

Musashikosugi

A-25

Kawaguchi Center Bldg.

B-7

B-11

Shibuya
Shinagawa

Chuo Ward

Shibuya

Shinyokohama 2nd Center Bldg.

B-6

Rise Arena Bldg.

Tokyo

Minato WardJPR Yokohama Nihon Odori Bldg.

B-5

Yume-ooka Office Tower

Kinshicho

B-2
A-18

JPR Chiba Bldg.

B-3

B-10

Tokyo

A-3

A-1

Arca East

B-2

B-9

B-1

A-6

Shinbashi

B-1

B-11

Ikebukuro
Shinjuku

Tachikawa

A-5

Harajuku

B-9

Tanashi

B-8

A-2

Shibuya Ward

B-7

B-1

Tokyo

Chiba
Prefecture

B-3

Kawaguchi

A-23

A-21

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

B-13

Omiya

A-7

Shinjuku Ward
A-11

■Greater Tokyo

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

Acquired in 35th

Kamioka

B-7

FUNDES Ueno

C-12

Sompo Japan Sendai Bldg.

C-1

Niigata Ekinan Center Bldg.

C-19

J PR Nagoya Fushimi Bldg.

C-9

JPR Naha Bldg.

A-6■Other Cities
GotandaShinagawa

A-7
A-16
A-10

OhsakiShinagawa Ward

C-4

Tokyo Tatemono Honmachi Bldg.

C-17

JPR Dojima Bldg.

C-21

JPR Shinsaibashi Bldg.

C-1

JPR Umeda Loft Bldg.

C-5

JPR Chayamachi Bldg.
SendaiA-1

Kanematsu Bldg.

A-13

Across Shinkawa Bldg. Annex

A-25

Shibadaimon Center Bldg.

A-2

Kanematsu Bldg. Annex

A-14

Shinjuku Center Building

A-26

Tokyo Square Garden

A-3

JPR Ningyo-cho Bldg.

A-15

Minami Azabu Bldg.

A-1

JPR Shibuya Tower Records Bldg.

A-4

Shin-Kojimachi Bldg.

A-16

Shinagawa Canal Bldg.

A-3

JPR Jingumae 432

A-5

JPR Crest Takebashi Bldg.

A-17

Rokubancho Building

A-4

Shinjuku Sanchome East Bldg.

A-6

MS Shibaura Bldg.

A-18

JPR Harajuku Bldg.

A-5

Yurakucho Ekimae Building (Yurakucho Itocia)

A-7

Gotanda First Bldg.

A-20

JPR Nihonbashi-horidome Building

A-6

JPR Ginza Namiki-dori Building

A-9

JPR Ichigaya Bldg.

A-21

JPR Sendagaya Bldg.

A-7

FUNDES Suidobashi

A-10

Oval Court Ohsaki Mark West

A-22

Ginza Sanwa Bldg.

A-11

Shinjuku Square Tower

A-23

The Otemachi Tower

A-12

BYGS Shinjuku Bldg.

A-24

Science Plaza - Yonbancho Plaza(Land with Leasehold Interest)

C-7

JPR Hakata Bldg.

C-14

Tenjin 121 Bldg.

C-20

Yakuin Business Garden

Niigata

NagoyaKobe

Fukuoka

Osaka
Wakayama
Naha

Acquired in 35th

A-27

KY Kojimachi Bldg.
C-4

Housing Design Center Kobe

C-13

Sompo Japan Wakayama Bldg.

56

4. Appendix

A－1 Kanematsu Bldg.

Portfolio List (Central Tokyo)

A－2 Kanematsu Bldg. Annex

A－3 JPR Ningyo-cho Bldg.

A－4 Shin-Kojimachi Bldg.

A－5 JPR Crest Takebashi Bldg.

① Chuo-ku① Chuo-ku① Chiyoda-ku① Chiyoda-ku② B1/8F② B1/8F② B1/9F② B1/9F③ Feb. 1993

③ Dec. 1989

③ Oct. 1984

③ Sep. 1999

④ 4,351m2④ 4,117m2④ 5,152m2④ 4,790m2

A－6 MS Shibaura Bldg.

A－7 Gotanda First Bldg.

A－9 JPR Ichigaya Bldg.

A－10 Oval Court Ohsaki Mark West

① Minato-ku① Shinagawa-ku① Chiyoda-ku① Shinagawa-ku② B2/13F② B2/11F② B1/9F② B2/17F③ Feb. 1988

③ Jul. 1989

③ Mar. 1989

③ Jun. 2001

④ 31,020m2④ 10,553m2④ 5,888m2④ 28,575m2① Chuo-ku② B2/13F③ Feb. 1993
④ 14,995m2

A－11 Shinjuku Square Tower

A－12 BYGS Shinjuku Bldg.

A－13 Across Shinkawa Bldg. Annex

A－14 Shinjuku Center Building① Chuo-ku① Minato-ku② B2/14F② B2/10F② 9F③ Apr. 1985

③ Jun. 1994

③ Jun. 1992

④ 25,733m2④ 5,535m2④ 4,570m2

A－16 Shinagawa Canal Bldg.

A－17 Rokubancho Building① Minato-ku① Chiyoda-ku② B1/8F② B3/7F③ Jul. 2008

③ Oct. 1991

④ 5,216m2④ 4,205m2① Shinjuku-ku① Shinjuku-ku② B4/30F② B5/54F③ Oct. 1994
78,796m2 (entire④
redevelopment area)③ Oct. 1979

1.
2.

A－15 Minami Azabu Bldg.

① Shinjuku-ku

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

④ 176,607m2

57

4. Appendix

Portfolio List (Central Tokyo)

A－18 JPR Harajuku Bldg.

A－20 JPR Nihonbashi-horidome Building

A－21 JPR Sendagaya Bldg.

A－22 Ginza Sanwa Bldg.

① Shibuya-ku① Chuo-ku① Shibuya-ku① Chuo-ku② B1/9F② B1/9F② 8F② B2/9F③ Mar. 1989

③ Jun. 2002

③ May 2009

③ Oct. 1982

④ 6,466m2④ 7,190m2④ 7,683m2④ 8,851m2

A－24 Science Plaza - Yonbancho Plaza

A－25 Shibadaimon Center Bldg.

① Chiyoda-ku① Minato-ku② B2/12F② B1/10F③ Feb. 1995

③ Jul. 1993

④ 24,560m2④ 11,419m2

Aｰ26 Tokyo Square Garden

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

A-27 KY Kojimachi Bldg.

① Chiyoda-ku②－③ Apr. 2014
11,034㎡④(ground area)

A－1 JPR Shibuya Tower Records Bldg.

A－4 Shinjuku Sanchome East Bldg.

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

③ Jan. 2007

④ 1,066m2④ 24,617m2

A－5 Yurakucho Ekimae Building (Yurakucho Itocia)① Chuo-ku① Chiyoda-ku② SRC B4/24F② B1/9F③ Feb. 2013

③ Feb. 1999

④ 112,645㎡④ 4,438㎡

Aｰ6 JPR Ginza Namiki-dori Building

Aｰ7 FUNDES Suidobashi① Chiyoda-ku③ Oct. 2007

① Chuo-ku② 11F③ Jun. 2008

④ 71,957m2④ 1,821㎡④ 1,477㎡① Chiyoda-ku② B4/20F② S 9F③ Jul. 2015

① Shibuya-ku② B3/8F③ Feb. 1992
④ 8,449m2

58

4. Appendix

Portfolio List (Greater Tokyo)

B－1 Arca East

B－2 JPR Chiba Bldg.

B－3 JPR Yokohama Nihon Odori Bldg.

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

③ Jan. 1991

④ 34,281m2④ 9,072m2

B－7 JPR Ueno East Bldg.

B－8 Tachikawa Business Center Bldg.

① Yokohama, Kanagawa① Yokohama, Kanagawa② B1/11F② B2/12F③ Oct. 1989
④ 9,146m① Toshima-ku② B1/8F② B1/12F② B3/42F③ Oct. 1992

③ Dec. 1994

③ Jan. 2007

④ 8,490m2④ 14,706m2

B－13 Omiya Prime East

B－1 Tanashi ASTA

① Saitama, Saitama① Nishitokyo, Tokyo② B1/9F② 9F② B2/17F③ May 1981

③ Feb. 2009

③ Feb. 1995

④ 8,772m2④ 9,203m2④ 80,675m2

B－3 Cupo-la Main Bldg.

B－4 JPR Musashikosugi Bldg.

④ 7,781m④ 91,280m2① Yokohama, Kanagawa① Kawaguchi, Saitama② B2/15F③ Feb. 1994
④ 28,420m2

2

B－10 Yume-ooka Office Tower

B－9 Rise Arena Bldg.

① Tachikawa, Tokyo

B－6 Kawaguchi Center Bldg.

③ Aug. 1991

2

① Taito-ku

B-12 Tokyo Tatemono Yokohama Building

B－5 Shinyokohama 2nd Center Bldg.

B－11 Olinas Tower① Yokohama, Kanagawa① Sumida-ku② B3/27F② SRB2/45F③ Mar. 1997

③ Feb. 2006

④ 185,976m2④ 257,842m2

B-7 FUNDES Ueno

B－6 Kawasaki Dice Bldg.

① Taito-ku① Kawasaki, Kanagawa② B1/10F② B2/11F③ Jul. 2017

③ Aug. 2003

④ 2,235m2④ 36,902m2

B－5 Musashiurawa Shopping Square① Kawaguchi, Saitama① Kawasaki, Kanagawa① Saitama, Saitama② B2/10F② B1/6F② B1/4F③ Jan. 2006

③ Mar. 1983

③ Oct. 2005

④ 48,321m2④ 18,394m2④ 28,930m2

59

4. Appendix

Portfolio List (Other Cities)

C－1 Niigata Ekinan Center Bldg.

C－4 Tokyo Tatemono Honmachi Bldg.

C－7 JPR Hakata Bldg.

C－9 JPR Naha Bldg.

① Niigata, Niigata① Fukuoka, Fukuoka② B1/10F② B1/12F, S1F③ Mar. 1996

③ Jun. 1985
④ 9,828m④ 19,950m2

C－13 Sompo Japan Wakayama Bldg.

2

C－14 Tenjin 121 Bldg.

① Sendai, Miyagi② 12F② B1/12F③ Oct. 1991

③ Dec. 1997

④ 5,780m2④ 10,783m2

C－17 JPR Dojima Bldg.

C－19 JPR Nagoya Fushimi Bldg.
① Nagoya, Aichi② 13F① Osaka, Osaka② B2/9F③ Jul. 2000

③ Oct. 1993

③ Mar. 1991

Wakayama,①
Wakayama① Fukuoka, Fukuoka② 9F③ Jul. 1996

C－12 Sompo Japan Sendai Bldg.
① Naha, Okinawa④ 5,696m④ 8,690m2② B1/9F

2④ 10,201m2④ 6,715m2① Osaka, Osaka② B3/9F③ Feb. 1970
④ 14,619m2

C－20 Yakuin Business Garden① Fukuoka, Fukuoka② 14F③ Jan. 2009
④ 22,286m

2

C－3 JPR Shinsaibashi Bldg.

C－1 JPR Umeda Loft Bldg.

C－4 Housing Design Center Kobe

C－5 JPR Chayamachi Bldg.

① Osaka, Osaka① Osaka, Osaka① Kobe, Hyogo① Osaka, Osaka② B2/10F② B1/8F② B2/11F② 9F③ Feb. 2003

③ Apr. 1990

③ Jun. 1994

③ Jun. 1994

④ 5,303m2④ 17,897m2④ 33,877m2④ 3,219m2

60

4. Appendix

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

8955

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

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

Information of initiatives on sustainability• Sustainability policy & management
・Initiatives on behalf of tenants
・Initiatives on behalf of the environment
・Local community initiatives
・Safety and security initiatives
・Initiatives aimed at employees
・Initiatives aimed at unitholders/investors

Extensive ESG related information
Regularly announce updated data61

5. Glossary
Term

Term

Meaning

Definition of buildingclasses

The definitions of building classes used in “Changes in the average rent of the 23
wards of Tokyo” on page 43 are as follows.
Target area: Major business districts in 5 central wards of Tokyo and areas with highpercentage of office buildings in surrounding wards (Gotanda/Osaki, Kitashinagawa/Higashi-shinagawa, Yushima/Hongo/Koraku, Meguro-ku)
Class A: Total floor area of 10,000 tsubo or more, floor size of 300 tsubo or more,
age less than 15 years
Facilities (as a general rule): Ceiling height of 2.7m or more, individual airconditioning, high earthquake resistance and environmental performance
Class B: Floor size of 200 tsubo or moreClass C: Floor size of 100 tsubo or more but less than 200 tsubo

Meaning

Rent

The rents stated in this report include common charges.

Acquisition price

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

Asset size

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

Investment ratio

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

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

Occupancy rate /occupancy rate based on
concluded contracts

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

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

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

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

Ratio of long-term,
fixed interest ratedebts

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

Average maturity

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

Average debt cost

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

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

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

Average unit rent

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

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

Revised amount ofmonthly rent

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

Change amount inmonthly rent upontenant replacement

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

Cap rate

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

Target rent

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

Tokyo/ Other cities“Tokyo” defined by JPR as its investment area collectively refers to “Central Tokyo”
and “Greater Tokyo” as defined below, and “Other Cities” refers to other regions.
・Central Tokyo: Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards
・Greater Tokyo: All other areas of Tokyo Prefecture, and Chiba, Kanagawa andSaitama Prefectures62