23rd

Report on Operating and Management Results
Twenty-Third Fiscal Period Semi-Annual Report
January 1, 2013 – June 30, 2013
Japan Prime Realty Investment Corporation

Japan Prime Realty Investment Corporation (JPR) is a J-REIT having one of the largest asset
holdings in Japan with a combined portfolio that is focused on office properties in Tokyo* andcomplemented by urban retail properties.
Since its listing in 2002, JPR has steadily expanded its asset size while maintaining stable cash
distributions. Going forward, JPR will endeavor to further improve the quality of its portfolio
and manage its assets so that steady growth and enhancement of unitholder value is secured as it
moves ahead.
*"Office properties in Tokyo" represent office properties located in Central Tokyo (Chiyoda, Chuo, Minato, Shinjuku,
Shinagawa and Shibuya Wards) and Greater Tokyo (all other areas of Tokyo, Chiba, Kanagawa and Saitama
Prefectures) (the same applies throughout this report).

Features of JPR

1. Proven ten-year track record in achieving steady growth andstable management since listing

2. High-quality portfolio of assets centering on office properties
in Tokyo

3. Stable financial operations
4.

 trong support from five sponsor companies including
S
Tokyo Tatemono

Japan Prime Realty Investment Corporation

Cash Distribution per Unit
Determined cash distribution (for the 23rd fiscal period)¥6,031(Distribution starting on September 10, 2013)

Assets Held¥398.6 billion
Properties Owned

60 properties
Occupancy Rate at End of Period

96.9%
Contents
I. Account Highlights
1. Operating Performance Topics
2. Message from Asset Manager

55
6

II. Overview of JPR
1. Portfolio Growth
2. Investment Strategy
3. Operational Strategy
4. Financial Strategy
5. Initiatives on Governance
6. Initiatives on Environmental Friendliness7. Overview of Portfolio Properties
8. Structure and History of JPR
9. Overview of Asset Manager

10
10
12
14
15
16
17
18
32
33

III. Asset Management Report
1. Overview of Asset Management
2. Overview of the Investment Corporation
3. Status of JPR’s Assets Under Management
4. Capital Expenditures of Owned Real Estate

34
34
39
40
43

5. Expenses and Liabilities
6. Acquisitions and Sales during the 23rd Fiscal Period
7. Overview of Accounting
8. Overview of Self-Managed Investment
		 Trust Beneficiary Cerificates
9. Other

44
46
48
48
49

IV. Financial Statements(1) Balance Sheets(2) Statements of Income and Retained Earnings(3) Statements of Unitholders’ Equity(4) Statements of Cash Distributions(5) Statements of Cash Flows(6) Notes to Financial Statements(7) Detailed Statements(8) Report of Independent Auditors(9) Other Notes (Information Only)

V. Investor Information

50
52
53
54
55
56
64
69
70
71

3

Message to Our Unitholders

Japan Prime Realty
Investment Corporation

Hirohito Kaneko
Executive Officer

Sosuke Yasuda
Supervising Officer

Masato Denawa
Supervising Officer(from left to right) Masato Denawa, Hirohito Kaneko and Sosuke Yasuda

Dear Investors,
We at Japan Prime Realty Investment Corporation (JPR) would like to express our sincere
gratitude for the continued loyal patronage you have extended to us.
Having settled the 23rd fiscal period (January 1, 2013 – June 30, 2013) at the end of June 2013, we
renew our heartfelt appreciation for your advocacy and encouragement.
Going forward, JPR will continue working with Tokyo Realty Investment Management, Inc.
(TRIM), to which we entrust asset management, to realize stable growth of our portfolio overthe medium to long term while taking into full account the governance of JPR as an investment
corporation.
We ask for your continued understanding and support of our operations.

4I . Account Highlights

Japan Prime Realty Investment Corporation

1. Operating Performance Topics(All amounts in millions of yen unless otherwise stated)

19th Fiscal Period 20th Fiscal Period 21st Fiscal Period 22nd Fiscal Period 23rd Fiscal Period
ended
ended
ended
ended
ended
June 2011
December 2011
June 2012
December 2012
June 2013
Operating revenues

11,529

11,772

12,345

12,963

13,278

Ordinary income

4,075

4,201

4,597

5,026

4,975

Net income

4,010

4,200

4,596

5,025

4,974

Total cash distributions

4,011

4,201

4,597

5,026

4,975

Total assets

360,004

360,699

396,017

401,984

409,715

Total unitholders' equity

175,452

175,640

176,035

197,168

197,116

48.7

48.7

44.5

49.0

48.1

Unitholders' equity per unit (yen)245,387245,651

246,204

238,992

238,929

Cash distribution per unit (yen)

5,611

5,876

6,430

6,093

6,031

Equity ratio (%)

Operating Revenues andNet Income

Total Assets andTotal Unitholders' Equity

15,000500,000

12,000400,000

Cash Distribution per Unit

8,000

6,000

300,000

9,000

4,000
6,000

200,000

3,000

100,000

2,000

0

19th
20th
Fiscal Fiscal
Period Period

21stFiscalPeriod22nd
FiscalPeriod23rd
FiscalPeriod

0

19th
20th
Fiscal Fiscal
Period Period

21stFiscalPeriod22nd
FiscalPeriod23rd
FiscalPeriodOperating Revenues (million yen)

Total Assets (million yen)

Net Income (million yen)

Total Unitholders' Equity (million yen)0

19th
FiscalPeriod20th
FiscalPeriod21st
FiscalPeriod22nd
FiscalPeriod23rd
FiscalPeriodCash Distribution (yen)5

I. Account Highlights

2. Message from Asset Manager

Satoshi Okubo
President and Chief Executive Officer (CEO)Tokyo Realty Investment Management, Inc.
Career Highlights
2010:	Took office as President and CEO of Tokyo Realty
Investment Management, Inc.
2005:	Appointed Director and Head of Kansai Branch
Office1998:	Appointed General Manager of Residential
Management Department
1977: Joined Tokyo Tatemono Co., Ltd.

Acquisition of blue-chip office properties, which contribute to increased earningsof the portfolio, and recovery in occupancy helped reinforce JPR’s revenue base.
We aim to enhance JPR’s ability to produce stable earnings by working to expand
the asset size through steady external growth.

I would like to extend my heartfelt gratitude to you, our unitholders, for the support you havegiven to Japan Prime Realty Investment Corporation (JPR).
In the 23rd fiscal period that ended June 2013, JPR acquired two blue-chip office properties that
contribute to increased earnings of the portfolio. In addition, the occupancy rate of the portfolio
at end of period increased to 96.9%, surpassing the initial forecast. Endeavors were also made tofurther strengthen the stable financial base by reducing interest-bearing debt costs and promoting
a shift to long-term, fixed interest rate debts.
These developments led to a period-on-period increase in operating revenue for the fifth
consecutive fiscal period, and helped revise the distribution per unit upward from the forecasted¥5,800 (as announced in February 2013) to ¥6,031.
Below, on behalf of Tokyo Realty Investment Management, Inc. (TRIM), the Asset Manager ofJPR, I would like to give an overview of management results for the 23rd fiscal period and future
outlook of JPR.
6

Japan Prime Realty Investment Corporation

Q1: Can you brief us on the operating results for the 23rd fiscal period ended June 2013?
Revenues increased period-on-period for the fifth consecutive fiscal period, and

A1: distribution per unit was set at ¥6,031.

Distribution per unit was ¥6,031, up by approximately 4% from the ¥5,800 that was initially announced and keeping
the 6,000-yen level for three consecutive periods since the 21st fiscal period.
Revenues increased period-on-period for the fifth consecutive fiscal period, thanks to the acquisition of two blue-chip
office properties that contribute to increased earnings of the portfolio and because of the occupancy rate significantly
surpassing the initial assumption, which enabled the existing portfolio to generate more revenues.
Changes in Distribution per Unit and Operating Revenue(Yen/unit)
18,000(Millions of yen)

Distribution per unit (yen, left axis)

14,00011,772

11,52916,000Operating revenue (million yen, right axis)

12,963

12,34514,00013,27012,00010,00010,000
6,000

5,611

5,876

19th Period
ended Jun. 2011

20th Period
ended Dec. 2011

6,430

6,093

6,031

21st Period
ended Jun. 2012

22nd Period
ended Dec. 2012

23rd Period
ended Jun. 2013

8,000
0

0

Q2: What is the background of the increased occupancy rate?
A2: Strengthened leasing ability resulted in an increase in the occupancy rate.
The occupancy rate at the end of the 23rd fiscal period rose to 96.9%, significantly surpassing what was initiallyassumed. Earlier, tenants relocated their offices primarily for the purpose of reducing costs. Thanks to the “Abenomics”
effect and other factors, however, tenant companies have improved their business confidence, which has led toincreased relocations for expansion and larger leased spaces within the same building. Meanwhile, TRIM formed a
new team last year to strengthen leasing. Continuously
Changes in the Occupancy Rate of JPR Properties
working proactively, the team can perceive the changes(%)
96.9
in the market, which has started to make positive moves,
97.0
96.4
ahead of others and accurately respond to tenant needs.
96.5This has also helped increase the occupancy rate.
96.0
95.5

We are proud that we picked up andresponded to tenant needs ahead of others.

95.0
94.5
94.0

94.9 95 94.9

94.7
94.3 94.2

94.3

95.1
95.5

93.9

93.5

Masaki Handou
Leasing Team Leader
Group Head, Asset Management 2 Group
Investment Management Division

93.0
0Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May
2012
2013
22nd Fiscal Period
23rd Fiscal Period

Jun.

7

I. Account Highlights

Q3: What reasons are behind the successful acquisition of highly profitable properties?
A3: We conducted professional activities for acquisition.
During the 23rd fiscal period, we worked for JPR to
newly acquire Omiya Prime East with an NOI yield of
7.0% that significantly surpassed the average figure of
4.6% for the entire portfolio, and acquire additional
ownership of Shinyokohama 2nd Center Building withan NOI yield of 9.0%. Both properties were acquired
from the general for-sale market, and we are proud thatour professional activities to acquire properties enabled
the acquisition.

Proprietary channels for property acquisition(Transaction with third parties)
Shinyokohama 2nd Center Building

Property acquisition fromsponsors’ pipelines

Utilization of sponsors’
brokerage function(Transaction with third parties)
Omiya Prime East

Omiya Prime East: Recognition of Information Collection Ability and Assuredness of Transaction
The city of Omiya has good traffic
accessibility with multiple railway lines
including the Shinkansen bullet trains,and features location characteristics
as the gateway from Tokyo to the
Joshinetsu and Tohoku regions. JPR
had long paid attention to the city as atarget area and endeavored to dig forand collect information. Furthermore,
the seller appreciated the assuredness andcreditworthiness of transaction with JPR.
These and other factors have enabledsmooth implementation of the transaction.

The Omiya area has solid demandfor office spaces and commands highoccupancy rates even when comparedwith those in central Tokyo.

Masahiro Araki
In charge of acquisitions
Deputy Manager
Investment Group
Investment Management Division

Shinyokohama 2nd Center Building: Use of Preferential Negotiation Rights and Relationship of
Mutual Trust over Many Years
As JPR already has 50% co-ownership
As we had long been fully aware of theof the property, the latest acquisition
property, the knowledge was of great
help when actually acquiring it.
represents additional ownership by taking
advantage of preferential negotiationrights. Nevertheless, the firm relationshipof mutual trust with the counterparty
established through the co-ownershipand management operations over theyears made no small contribution to
Chisei Kaji
the closing of the deal. JPR holds many
In charge of acquisitions
buildings that are co-owned with other
Senior Manager
Investment Group Investment
parties, and has realized acquisitions ofManagement Division
additional ownership through the use ofpreferential negotiation rights or based on
the relationship of mutual trust with the counterparties, as in the latest case of Shinyokohama 2nd Center Bldg., for
BYGS Shinjuku Bldg. and other properties. As such, this approach has proven to be effective as a means for achieving
external growth.
JPR has steadily achieved external growth even through the periods when it faced difficult market conditions. We
believe that the latest acquisition of the two properties is extremely significant in that the acquisition was madewithout failing to take precious acquisition opportunities and without being involved in excessive price competition.
As we move forward, we will continue to make strategic acquisition activities in a diligent manner as professionals.
8Japan Prime Realty Investment Corporation

Q4: What is the current situation of the office property leasing market?
A4: The office property leasing market in the Tokyo area is gradually recovering.
The office property leasing market in the 23 wards of Tokyo is on track to recovery, due to expansion in new demand,
including increased office space within the same buildings, in accordance with the recovery of business confidence due
to Abenomics and other factors, on top of new supply becoming more controlled. Moreover, the rent levels for new
contracts took an upward turn for large-scale buildings. Meanwhile, tenants continue to take a stringent attitude interms of requirements for facility levels, such as measures for energy saving and disaster prevention, as well as cost
consciousness. Accordingly, the market will make a modest recovery going forward, with polarization by property
further advancing. Given such a situation, recognition of the facility levels of the properties owned by REITs as wellas the high level of tenant satisfaction at those properties will be renewed.
Changes in Rents and Occupancy Rate of Large-Scale Buildings in the 23 Wards of Tokyo（%）(Thousands of yen)Occupancy rate of large-scale buildings (23 wards of Tokyo) (left axis)

93.5

15,500Rents of large-scale buildings (23 wards of Tokyo) (right axis)
93.0
15,00092.5

92.0
14,500
91.5

0

0
Jul.
2012

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2013

Feb.

Mar.

Apr.

May

Jun.

Jul.

(Note) Prepared by TRIM based on “Monthly Office Market Survey Report (23 Wards of Tokyo)” by Sanko Estate Co., Ltd.

Q5: What strategies do you intend to employ for JPR in the future?
aim to enter the next stage of growth by steadily achieving internal growth and
A5: Weexternal growth.
Positive changes are becoming increasingly notable, as the occupancy rate of JPR’s portfolio has recovered quickly
and requests from tenants for reduced rents have decreased significantly.
JPR will endeavor to improve its earnings by reducing the period of vacancy and increasing the rent levels at its
properties while working to prevent contract cancellation by tenants. At the same time, JPR will aim to enter the nextstage of growth by achieving external growth that should contribute to increased revenues and profits.

9II. Overview of JPR

1. Portfolio Growth
Occupancy Rate at End of Period (%)
100

96.3

94.1

95

93.5

93.4

93.2

92.7

98.6

98.0

97.2

95.4

95.1

99.0

90
85

Asset Size, etc. and Results of Distributions per Unit (billions of yen)
400
Office properties in Tokyo

Office properties in Other Cities

Retail properties

350

300

245.3

250
209.2

202.6

197.6

200

222.4
108.2

179.6

100.1

163.6
150

139.6

125.7
100

50

0

92.1

94.5

40.1

41.5

38.8

39.7

13.2

13.2

Nov. 16, 2001 End of Jun.
2002
Start of
1st Period
management

Number ofproperties
Total numberof tenants
Leasable floor
space (m2)Distribution
per unit (yen)

100.1

77.4

43.1

57.5

52.7

47.9

47.9

43.9

39.7

40.7
12.5
14.9
13.2

100.1

99.2
91.2

48.3

45.2

45.2

57.2

63.8

45.2

93.9

77.0

33.2

38.2

38.2

40.4

50.0

End of Dec.
2002
2nd Period

End of Jun.
2003
3rd Period

End of Dec.
2003
4th Period

End of Jun.
2004
5th Period

End of Dec.
2004
6th Period

End of Jun.
2005
7th Period

End of Dec.
2005
8th Period

End of Jun.
2006
9th Period

End of Dec.
2006
10th Period

End of Jun.
2007
11th Period

13

25

27

30

32

38

42

42

42

44

46

48

133

281

311

324

357

437

496

459

441

462

479

491

94,935

162,739

168,987

201,808

218,734

256,329

273,330

281,408308,205

315,156

337,382

361,574

–

2,545

6,912

6,873

5,738

6,081

6,671

6,370

6,411

6,509

6,873

6,996

Property Diversification
Retail in Tokyo
15.9%

Retail 23.9%

Retail in Other Cities
7.9%

Office in Other Cities
9.4%

82.6%

Target investment ratio by asset class
Office in Tokyo
66.7%

Office 76.1%

10Target investment ratio by area
Tokyo:
80 - 90%
Other Cities: 20 - 10%

Tokyo

Other Cities
17.4%

Portfolio Management Standards

Office: 70 - 90%
Retail: 30 - 10%(Note) 	The figures in the graph to the left show the investment ratios, which represent the ratiosof the total acquisition price of properties in respective categories to the total acquisition
price of the entire portfolio, rounded to the first decimal place.

Japan Prime Realty Investment Corporation

98.4

97.5

96.8

96.4

96.4

95.5

95.6

94.7

93.5

380.9
341.5

331.2

391.9

398.6

344.9

341.5

310.6

299.4
280.6

275.1
251.9

184.1
141.6

135.7

114.7

96.9

94.9

94.1

43.1

43.1

39.4

93.9

96.1

End of Dec.
2007
12th Period

End of Jun.
2008
13th Period

219.8

209.5

172.9

259.2

259.2

265.8

223.2

219.8

31.1

31.1

26.5

26.5

26.5

26.5

26.5

37.5

37.5

99.5

95.3

95.3

95.2

95.2

95.2

95.2

95.2

95.2

95.2

End of Dec.
2008
14th Period

End of Jun.
2009
15th Period

End of Dec.
2009
16th Period

End of Jun.
2010
17th Period

End of Dec.
2010
18th Period

End of Jun.
2011
19th Period

End of Dec.
2011
20th Period

End of Jun.
2012
21st Period

End of Dec.
2012
22nd Period

End of Jun.
2013
23rd Period

49

50

52

51

53

55

56

56

57

58

59

60

517

537

499

476

476

460

479

493

501

502

534

564

373,609383,491

383,215

393,532

400,751

410,326

420,544421,371423,311434,340

450,943

460,452

6,671

7,122

7,092

3,731

6,933

6,770

5,680

5,611

5,876

6,430

6,093

6,031

(Note 1) The asset size represents the aggregate acquisition price of the respective properties in JPR’s portfolio as of the relevant date, rounded off to the nearest 100 million yen.
(Note 2)	The number of tenants at end of period is counted as follows: when a single tenant leases multiple rooms, it is counted as one if the tenant uses the same property. If the leased rooms are in
multiple buildings, the tenant is counted in plural.
(Note 3) 	For Shinjuku Square Tower, each compartmentalized owner leases respective exclusive space to Tokyo Tatemono Co., Ltd. in a lump sum, and Tokyo Tatemono subleases the space tosublessees. Accordingly, the leasable floor space of the building is calculated by multiplying the total contracted space of offices, shops and warehouses that are leased by Tokyo Tatemono andcan be sublet, by JPR’s rent distribution rate (39.70457% through June 30, 2008 and 40.31465% since the 14th fiscal period in accordance with the additional acquisition in September 2008),
while the leased floor space for calculating the occupancy rate is calculated by multiplying the floor space sublet to sublessees by the rent distribution rate. Both figures are rounded to thesecond decimal place.
In addition, the number of the sublessees is deemed to be the number of tenants for the building.
(Note 4) 	The tenants of Shinjuku Center Bldg., Rise Arena Bldg. and Kawasaki Dice Bldg. have sublet space to sublessees and lease agreements have been executed where the rent paid by the tenants
fluctuates in accordance with the lease conditions of the sublessees. Accordingly, the total leasable floor space, total leased floor space and the occupancy rate of the building indicate those forthe sublessees of the tenants, and the number of the sublessees is deemed as the number of its tenants.
(Note 5) 	When the contracted floor space and the floor space for calculating rents differ, the latter was treated as the leased floor space through the 10th fiscal period. Since the 11th fiscal period,
however, the contracted floor space has been used as the leased floor space.
(Note 6) The occupancy rate at end of period has been rounded to the first decimal place.
(Note 7) The total leasable floor space has been rounded off to the nearest integer.

11II. Overview of JPR

2. Investment Strategy
JPR is resolved to continuously work on investment focused on office properties in Tokyo in order toenhance its growth potential over the long term, while conducting vigorously selective investment in retailproperties as well as office properties in regional cities that are expected to generate relatively high yields.

Focusedinvestment in
office properties
in Tokyo

Vigorously
selective
investment inretail properties
as well as officeproperties inregional cities

Improve the quality of the portfolio by making investment focused on office properties inTokyo that are expected to contribute to long-term growth
Compared with other regional cities, Tokyo allows expectations for more stable occupancy andhigher rent levels, and is believed to offer larger rooms for an upward turn of rents when the leasing
market starts to recover. Looking ahead, JPR will continue to make investment focused on officeproperties in Tokyo, with an aim to further improve the quality of its portfolio and enhance its
growth potential in the recovery cycle of the market.

For retail properties as well as office properties in regional cities, which allow JPR to expect
higher yields, work to invest in strictly selected blue-chip properties that can keep stablerevenues at a certain level
Retail properties as well as office properties in regional cities tend to have relatively higher yields
than office properties in Tokyo, although there are some properties that are somewhat less stable interms of earnings subject to the market situation. While securing growth potential by making focusedinvestment in office properties in Tokyo, JPR will make vigorously selective investment in urban retailproperties with long-term, fixed-rent contracts and in large office properties in regional cities having
a high competitive advantage in the areas, in order to complement the stability of earnings from theentire portfolio.

Changes in Investment Ratios by Asset Class and Area
Over the last five years, JPR made investments in 15 office properties in Tokyo totaling 130 billion yen (acquisition
price), enhancing the quality of its portfolio.
End of 1st Fiscal Period (June 30, 2002)

Office in
Other Cities
42.1%
Retailin Tokyo
14.4%

End of 23rd Fiscal Period (June 30, 2013)
Retail in
Other Cities
Office in 7.9%
Other Cities
9.4%

Office in
Tokyo
43.5%

Retailin Tokyo
15.9%

Increase in investment ratio
of office properties in Tokyothrough focused investment:

Officein Tokyo

66.7%+23.2%(Note) 	The figures in the graphs show the investment ratios, which represent the ratios of the total acquisition price of properties in respective categories to the total acquisition price of the entire
portfolio, rounded to the first decimal place.

Portfolio Management Standards of JPR

12Target investment ratio by area

Target investment ratio by asset classTokyo:
80 - 90%
Other Cities: 20 - 10%

Office: 70 - 90%
Retail: 30 - 10%

Japan Prime Realty Investment Corporation

In the for-sale real estate market, transactions of blue-chip properties have been rather limited. Given
the situation, JPR will work to invest in blue-chip properties by fully implementing various acquisition
strategies based on its high sourcing abilities while utilizing sponsor support.
Utilization of sponsor
support from the Fuyo
Group companies
including Tokyo
Tatemono

Supply of blue-chip properties among office properties in Tokyo is still inadequate in thefor-sale real estate market, and their acquisition opportunities are rather limited.

Investment strategies
based on diversified
property acquisition
methods and highsourcing abilities

To acquire properties from third parties other than the sponsors, JPR exercises its highsourcing abilities and takes advantage of various information channels to make access to
wide-ranging property information.

JPR will take advantage of support from Tokyo Tatemono Co., Ltd. and other sponsors tosecure opportunities to invest in blue-chip properties at reasonable price levels without being
exposed to excessive competition in the market.

For properties with co-ownership or compartmentalized ownership, JPR implements
various methods to acquire properties, including acquisition of additional equity by utilizing
preferential negotiation rights.

Cases in which JPR Acquired Properties by Utilizing Sponsor Support
JPR has displayed its strength of having sponsors comprising real estate developers, a general contractor and financial
institutions in acquiring blue-chip properties.
<Sponsors>

The Otemachi Tower(Land with Leasehold Interest)*

Yakuin Business GardenTokyo Tatemono

Taisei Corporation

Yasuda Real Estate

Sompo Japan Insurance

Meiji Yasuda Life Insurance

The Otemachi Tower (Land with
Leasehold Interest) was acquired froman SPC in which Tokyo Tatemono andTaisei Corporation had equity interests.

Yakuin Business Garden was acquired
from an SPC in which Tokyo Tatemono
has equity interests.

Japan Prime Realty
Investment Corporation(securities code: 8955)

Property Acquisition Results by Channel
At JPR, the ratio of properties acquired from its
sponsors, etc. (Note) and that of properties acquired fromthird parties (total of properties acquired based on theinformation provided by the sponsors and those acquired
other than from the sponsors, etc.) are almost equal,
standing at 51.2% for the former and 48.8% for the latter(on an acquisition price basis).
JPR will work to increase property acquisition
opportunities and conduct vigorously selective investment
in blue-chip properties by building sourcing abilities on
its own instead of depending solely on sponsor support.
(Note)	Sponsors, etc. represent the five sponsor companies of JPR, their affiliate companies andspecial purpose companies (SPCs) in which the sponsors have made equity investment.

Transactions with third parties

48.8%

Properties acquired
other than fromsponsors, etc.

30.6%
18.3%

Properties
acquired fromsponsors, etc.

51.2%

Properties acquired
based on information
provided by sponsors*The property was renamed from “Otemachi 1-6 Plan (Land with Leasehold Interest) (tentative name)” to “The Otemachi Tower (Land with Leasehold Interest)” as of August 30, 2013.

13

II. Overview of JPR

3. Operational Strategy
JPR endeavors to implement its leasing strategies focused on maintaining and increasing the occupancyrate, with an aim to keep revenues from the portfolio stable in a continuous manner.

Organizational
reinforcement ofleasing activities

Tokyo Realty Investment Management, Inc. (TRIM) has established a group that supervises leasing,which implements leasing strategies that are based on property characteristics. Endeavors arebeing exerted to enhance the leasing framework by not only reinforcing coordination with property
management companies but also receiving support on leasing and obtaining market information frommajor brokerage firms, so that JPR can provide lease terms and conditions that take into account themarket conditions, accelerate decision-making and take other measures to strengthen leasing.

Maintenanceand improvementof tenantsatisfaction

TRIM periodically conducts questionnaire surveys to tenants, and works to improve tenantsatisfaction by grasping comments, requests and other feedback from tenants and promptly
responding. By doing so, TRIM aims to prevent move-outs of existing tenants and encourage themto expand office spaces in the same buildings, so as to secure stable earnings of JPR over a medium tolong term.

Strategic valueenhancement
works

TRIM has established a group dedicated to construction management, reinforcing its responses tobusiness continuity plans, promotion of energy saving and other initiatives that are strongly requested
by society. In addition, while working to enhance NOI and tenant satisfaction, TRIM strategicallyconducts value enhancement works that should strengthen competitive advantages of properties aswell as help attract tenants.

Changes in the Occupancy Rate
The initiatives on reinforcing leasing activities andimproving tenant satisfaction successfully bore fruit,achieving a significant increase in the occupancy rate of
office properties for the 23rd fiscal period. As a result,the occupancy rate of the entire portfolio stood at 96.9%
as of June 30, 2013, an increase of 2.0 percentage points
from the end of the previous fiscal period.

（%）

Entire portfolio

98

96.4%

97
96
95

94.9%

95.0%

94.9%

Dec. 2012

Jan. 2013

Feb. 2013

95.1%

96.9%

95.5%

94
0

Mar. 2013

Apr. 2013

May 2013

Jun. 2013

Strategic Value Enhancement Works
JPR has been strategically conducting value enhancement works that should lead to invitation of new tenants andimprovement in tenant satisfaction.
Renovation works have been implemented for common use areas at such properties as Shinjuku Center Bldg. and MS
Shibaura Bldg., which have proven effective in tenant leasing.
MS Shibaura Bldg.

Examples of value enhancement works for common use areas
Shinjuku Center Bldg.

Before14

After

BeforeAfterJapan Prime Realty Investment Corporation

4. Financial Strategy
JPR maintains AA-rank credit ratings, with recognition given to its conservative financial operations suchas heightening the ratio of long-term, fixed interest rate debts while stably controlling the ratio of interestbearing debt (LTV).
LTV (Note 1)

JPR makes it a basic policy to conservatively control LTV, which has stably remained at or
below 50% since listing.

45.7%
Ratio of long-term,
fixed interest rate debts (Note 2)

79.2%
Average interest rate of longterm interest-bearing debts (Note 3)

1.30%

Under the basic policy of procuring interest-bearing debts with fixed interest over a longterm, JPR keeps the ratio of long-term, fixed interest rate debts at a high level (which stands
at 98.2% when including the current portion of long-term interest-bearing debts).
JPR endeavors to reduce interest-bearing debt costs, taking advantage of the favorable
fund procurement environment to the utmost.

(Note 1) LTV (ratio of interest-bearing debts to total assets) = Interest-bearing debts / total assets(Note 2) Ratio of long-term, fixed interest rate debt = Long-term interest-bearing debts with fixed interest (excluding current portion) / total interest-bearing debt
(Note 3)	Average interest rate of long-term interest-bearing debts is a weighted average of interest rate as of the end of the 23rd fiscal period, calculated in accordance with the balance of respective
interest-bearing debts, for long-term interest-bearing debts maturing in more than one year.

Status of Corporate Credit Ratings Assigned to JPR
JPR maintains high credit ratings, with recognition given to its conservative financial operations.
R&I

S&P

Moody's(Rating and Investment Information, Inc.)(Standard & Poor's Ratings Japan K.K.)(Moody's Japan K.K.)

AA-

A

A-1

(Long-term)(Short-term)

A3

Issuance of Investment Corporation Bonds
JPR issued the following investment corporation bonds in the 23rd fiscal period, in a continuous effort to reduce
interest costs and promote a shift to longer-term funding.
Name
Seventeenth Series of Investment
Corporation Bonds (5-year bonds)
Eighteenth Series of Investment
Corporation Bonds (10-year bonds)

Issue Date

Issue Amount

Coupon Rate

Maturity Date

May 31, 2013

5 billion yen

0.65%

May 31, 2018

May 31, 2013

2 billion yen

1.46%

May 31, 2023

Redemption Method
Bullet repayment
upon maturity

Diversification of Repayment Dates of Interest-Bearing Debts
JPR works to mitigate refinance risks by establishing a commitment line totaling 28 billion yen while having
repayment dates of debts more diversified.
(100 million yen)

Long-term loans payable

250

Investment corporation bonds

200
150
100
50
0

50
183
120

50

130
135

110
1

61

131

70
41

50

195
120

83

20
20
21

71

70

60

8

24th
25th
26th
27th
28th
29th
30th
31st
32nd
33rd
34th
35th
36th
37th
38th
39th
periodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingEndingDec. 2013 Jun. 2014 Dec. 2014 Jun. 2015 Dec. 2015 Jun. 2016 Dec. 2016 Jun. 2017 Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019 Dec. 2019 Jun. 2020 Dec. 2020 Jun. 2021

20
43th
periodEndingJun. 2023

45
50th
periodEndingDec. 202615

II. Overview of JPR

5. Initiatives on GovernanceIn the belief that it is essential to secure sound and efficient operations of JPR in order to realize its continuous growth,
consistent efforts have been made to reinforce and sustain corporate governance of JPR and TRIM, the Asset Manager.

Highly Independent Board Composition❚❚   At JPR, the executive officer as well as the supervising
officers has no concurrent assignment as officer of TRIM so
as to firmly secure the independence of JPR, the investment
corporation.

Executive Officer:❚❚   The JPR officers comprise attorneys and a certified public
accountant with various experiences and high expertise, whohave a thorough knowledge of the REIT industry as well.

Supervising Officer: Masato Denawa (attorney)

Members of the Board of JPR

Hirohito Kaneko (attorney)

Supervising Officer: Sosuke Yasuda(certified public accountant)Diversified Shareholder Composition and Reinforced Independence❚❚   With the sponsors comprising five companies, thediversified shareholder composition also contributes
to securing the independence of the Asset Manager.
❚❚   TRIM President and CEO has assumed office after
having his employment transferred to TRIM, insteadof being seconded from the sponsor company hebelonged to.
❚❚   The Compliance Office general manager in charge ofinternal control is a career employee, not seconded
from the sponsor company he belonged to.

Shareholder Composition of TRIM
real estateTokyo Tatemono

real estate

Shareholding ratio:

40%

Taisei Corporation

Yasuda Real Estate

Shareholding ratio:

20%

20%

Shareholding ratio:

financefinance

Meiji Yasuda Life Insurance

Shareholding ratio:

construction

10%(Asset Manager)
Tokyo Realty Investment
Management, Inc.

Sompo Japan Insurance

10%

Shareholding ratio:

Decision Making Based on Stringent Processes❚❚   Upon making decisions on property acquisitions,asset management and other issues, TRIM conducts
stringent screening and takes other procedures fromvarious perspectives through designated committees
and other institutions.
❚❚   In particular, material transaction matters conductedwith the sponsors, etc. are screened and verified by
the Compliance Committee as to their adequacy andrationality. The Committee employs unanimous votefor approvals in principle.
❚❚   An outside attorney has been appointed as a special
member of the Compliance Committee.
Members of the Compliance Committee of TRIM
President and CEO

16

Proposal, planning

Investment Management Department

Review, screening

Compliance Subcommittee

Decision on acquisition policy

Investment Subcommittee

Due diligence

Due Diligence Subcommittee

Prior review / approval oftransaction with related parties

Final decision on acquisition

Corporate Planning/Administration
Division general manager

Investment Management Division
general manager

Financial Division
general manager

Compliance Officegeneral manager
Special member(outside attorney)

Stringent Decision-Making Process(for property acquisitions)

Decision making on acquisition
over certain amountConclude agreement

Compliance Committee
JPR’s Board of Directors

Investment Subcommittee

TRIM’s Board of Directors

Acquisition

Japan Prime Realty Investment Corporation

6. Initiatives on Environmental Friendliness
From early on, JPR has implemented various initiatives on environmental friendliness.
JPR has proactively worked on effective reduction of energy costs, enhancement of greening inconsideration of urban environment and other measures under the basic concept of “environmentallyfriendly buildings.” Such endeavors have also been recognized by external organizations.

Acquisition of DBJ Green Building Certification❚❚   JPR has obtained the DBJ Green Building Certification, a system by Development Bank of Japan Inc. (DBJ) tocertify real estate properties evincing high environmental and social awareness, for multiple properties it owns.
DBJ Green Building

DBJ Green Building

DBJ Green Building

DBJ Green BuildingGold

SilverGold

Silver

DBJ Green Building

DBJ Green Building

Certified

DBJ Green Building

2013

Properties
with
DBJ Green Building
exceptionally highenvironmental&
Bronze
DBJ
Green Building
2013
social awareness

Gold

2013

2013

DBJ Green Building

2013
Olinas Tower

Silver2013

DBJ Green Building

Upgraded
DBJ Green Building

BronzeCertified

2013

2013

2013

Bronze2013
Yakuin Business
Garden2013

Gold

Upgraded

DBJ Green Building Certification

Properties
DBJ
Green Building
with excellent
environmental
Certified &DBJ Green Building
2013
social awarenessSilver2013

DBJ Green Building

DBJ Green Building

BronzeCertified

2013

Properties withhigh environmental& social awareness
JPR Crest Takebashi
Bldg.

2013

JPR Ueno East
Bldg.

JPR Sendagaya
Bldg.

2013

Properties
with sufficientenvironmental &social awareness

JPR Nihonbashi
Horidome Bldg.

DBJ awards five levels of certification (Platinum, Gold, Silver, Bronze and Certified) to officebuildings in accordance with the degree of environmental and social awareness they demonstrate.

Continuous Participation in GRESB Survey❚❚   JPR participated in the GRESB Survey, which evaluates and analyzes
environmental considerations and sustainability, for two consecutive years
in 2011 and 2012 and each time obtained a certain appreciation for its
approach to environment-friendly initiatives.
❚❚   JPR believes that its endeavors have been recognized as a result of
having diligently worked to reduce energy consumption by establishinga consistent system among all business partners involved in building
operations, from the Asset Manager to property managers and building
maintenance companies, under a clear environmental policy as well as asking
for cooperation with tenants.

GRESB, which stands for Global Real
Estate Sustainability Benchmark, isa benchmark system for analyzing
and evaluating sustainability interms of environmental friendlinessand social nature. It is based on
surveys conducted by a private
sector group established primarily
by major pension funds in Europe.

Taking Advantage of Environmental Friendliness Know-How of Sponsors❚❚   JPR and TRIM have consigned operations related to environmental laws and regulations to Tokyo Tatemono Co.,
Ltd., one of the sponsors, and established a system early on to receive know-how and advices from Tokyo Tatemono.
❚❚   TRIM has reinforced its initiatives on environmental friendliness by allocating dedicated staff to the section in chargeof construction planning for the portfolio properties, bolstered by the technological know-how of Taisei Corporation,
one of the sponsors.
17II. Overview of JPR

7. Overview of Portfolio Properties
List of Properties (60 Properties for the Entire Portfolio)
Central Tokyo (28 Properties)
Property
Number

Property Name

Location

Acquisition Date

AcquisitionPrice(in millions)

Percentage of
Leasable
Portfolio Acquisition
Floor Space (m²)
Price (%)

A-1

Kanematsu Bldg.

Chuo-ku, Tokyo

Dec. 27, 2001

¥16,276

4.1

7,994.02

2.9

A-2

Kanematsu Bldg. Annex

Chuo-ku, Tokyo

Dec. 27, 2001

2,874

0.7

2,291.13

7.4

A-3

JPR Ningyo-cho Bldg.

Chuo-ku, Tokyo

Nov. 16, 2001

2,100

0.5

2,804.56

5.8

Nov. 16, 2001
Nov. 21, 2002
Nov. 12, 2004

2,420

0.6

3,319.60

8.6

A-4

Shin-Kojimachi Bldg.

Chiyoda-ku, Tokyo

A-5

JPR Crest Takebashi Bldg.

Chiyoda-ku, Tokyo

Jun. 21, 2002

4,000

1.0

3,265.34

6.8

A-6

MS Shibaura Bldg.

Minato-ku, Tokyo

Mar. 28, 2003

11,2002.8 14,469.72

4.0

A-7

Gotanda First Bldg.

Shinagawa-ku, Tokyo

Jul. 23, 2003

2,920

0.7

4,243.58

4.4

2,920

0.7

1,937.40

7.1

A-8

Fukuoka Bldg.

Chuo-ku, Tokyo

Oct. 15, 2003
Apr. 15, 2005

A-9

JPR Ichigaya Bldg.

Chiyoda-ku, Tokyo

May 28, 2004

5,100

1.3

4,224.96

8.0

A-10

Oval Court Ohsaki Mark West

Shinagawa-ku, Tokyo

Jun. 1, 2004

3,500

0.9

4,088.44

1.6

10,1802.6 11,150.78

2.0

15,121

3.8 15,196.08

3.7

Jul. 2, 2004
Sep. 26, 2008
Nov. 9, 2004
Apr. 12, 2005
Jul. 13, 2010

A-11

Shinjuku Square Tower

Shinjuku-ku, Tokyo

A-12

BYGS Shinjuku Bldg.

Shinjuku-ku, Tokyo

A-13

Across Shinkawa Bldg. Annex

Chuo-ku, Tokyo

Nov. 26, 2004

710

0.2

1,253.39

5.0

A-14

Shinjuku Center Bldg.

Shinjuku-ku, Tokyo

Mar. 27, 2008

21,000

5.3

8,863.98

2.4

A-15

Minami Azabu Bldg.

Minato-ku, Tokyo

Jul. 14, 2008

3,760

0.9

3,405.73

4.3

A-16

Shinagawa Canal Bldg.

Minato-ku, Tokyo

Dec. 19, 2008

1,870

0.5

1,700.57

6.8

A-17

Rokubancho Bldg.

Chiyoda-ku, Tokyo

Dec. 2, 2009

2,800

0.7

2,488.36

4.4

A-18

JPR Harajuku Bldg.

Shibuya-ku, Tokyo

Dec. 25, 2009

8,400

2.1

4,760.09

7.1

A-19

Tokyo Tatemono Kyobashi Bldg.

Chuo-ku, Tokyo

Feb. 12, 2010

5,250

1.3

3,499.31

7.7

A-20

JPR Nihonbashi-horidome Bldg.

Chuo-ku, Tokyo

Mar. 31, 2010

5,100

1.3

5,299.89

4.7

A-21

JPR Sendagaya Bldg.

Shibuya-ku, Tokyo

May 31, 2010

15,0503.8

6,177.74

4.7

A-22

Ginza Sanwa Bldg.

Chuo-ku, Tokyo

Aug. 29, 2011

3,400

0.9

1,899.27

8.2

A-23

The Otemachi Tower(Land with Leasehold Interest)

Chiyoda-ku, Tokyo

Mar. 13, 2012

36,0009.0 11,034.78–

A-1

JPR Shibuya Tower Records Bldg.

Shibuya-ku, Tokyo

Jun. 30, 2003

12,0003.0

A-2

JPR Daikanyama

Shibuya-ku, Tokyo

Oct. 5, 2004

2,160

A-3

JPR Jingumae 432

Shibuya-ku, Tokyo

Mar. 24, 2006

4,275

A-4

Shinjuku Sanchome East Bldg.

Shinjuku-ku, Tokyo

A-5

Yurakucho Ekimae Bldg. (Yurakucho
Itocia)Chiyoda-ku, Tokyo

OfficeRetailSubtotalMar. 14, 2007
Apr. 24, 2008
Aug. 27, 2008

8,076.85

5.0

0.5

651.2911.1

1.1

1,027.33

3.0

2,740

0.7

2,347.81

2.0

3,400

0.9

1,101.92

2.3

51.8 138,573.92—¥206,526(Note 1) The table above shows properties owned by JPR as of June 30, 2013.
(Note 2) The leasable floor space indicates only the portions owned by JPR. For co-owned properties, the figure indicates the portions corresponding to the equity interest held by JPR.

18

PML (%)

Japan Prime Realty Investment Corporation

Greater Tokyo (17 Properties)
Property
NumberOfficeRetailProperty Name

Location

Acquisition Date

AcquisitionPrice(in millions)

Percentage of
Leasable
Portfolio Acquisition
Floor Space (m²)
Price (%)

PML (%)

B-1

Arca East

Sumida-ku, Tokyo

Nov. 16, 2001

¥5,880

1.5

7,022.76

3.2

B-2

JPR Chiba Bldg.

Chiba, Chiba

Dec. 13, 2001

2,350

0.6

5,536.38

2.6

B-3

JPR Yokohama Nihon Odori Bldg.

Yokohama, Kanagawa

Nov. 16, 2001

2,927

0.7

6,066.53

10.2

1,490

0.4

5,284.75

6.4

B-5

Shinyokohama 2nd Center Bldg.

Yokohama, Kanagawa

Sep. 25, 2002
Mar. 28, 2013

B-6

Kawaguchi Center Bldg.

Kawaguchi, Saitama

Feb. 13, 2004

8,100

2.0 15,455.90

4.7

B-7

JPR Ueno East Bldg.

Taito-ku, Tokyo

Mar. 1, 2004

3,250

0.8

6,490.05

3.1

3,188

0.8

4,731.04

5.2

B-8

Tachikawa Business Center Bldg.

Tachikawa, Tokyo

Sep. 30, 2005
Feb. 28, 2007

B-9

Rise Arena Bldg.

Toshima-ku, Tokyo

Mar. 22, 2007

5,831

1.5

6,023.39

2.5

B-10

Yume-ooka Office Tower

Yokohama, Kanagawa

Jul. 10, 2007

6,510

1.6 12,014.32

1.2

B-11

Olinas Tower

Sumida-ku, Tokyo

Jun. 29, 2009

31,3007.9 23,987.40

3.3

B-12

Tokyo Tatemono Yokohama Bldg.

Yokohama, Kanagawa

Dec. 27, 2010

7,000

1.8

6,494.09

9.5

B-13

Omiya Prime East

Saitama, Saitama

Mar. 22, 2013

6,090

1.5

6,871.45

4.4

B-1

Tanashi ASTA

Nishitokyo, Tokyo

Nov. 16, 2001

10,2002.6 31,121.71

6.6

B-3

Cupo-la Main Bldg.

Kawaguchi, Saitama

Mar. 31, 2006

2,100

0.5

5,963.00

6.3

B-4

JPR Musashikosugi Bldg.

Kawasaki, Kanagawa

Sep. 28, 2006

7,260

1.8 19,740.95

10.9

B-5

Musashiurawa Shopping Square

Saitama, Saitama

Mar. 19, 2007

4,335

1.1 14,960.69

8.0

B-6

Kawasaki Dice Bldg.

Kawasaki, Kanagawa

Apr. 12, 2007

Subtotal

15,080

3.8 13,066.69

4.0¥122,891

30.8 190,831.10—

AcquisitionPrice(in millions)

Percentage of
Leasable
Portfolio Acquisition
Floor Space (m²)
Price (%)

PML (%)

Other Cities (15 Properties)
Property
NumberC-1

OfficeRetailProperty Name

Location

Niigata Ekinan Center Bldg.

Niigata, Niigata

Acquisition Date

Nov. 16, 2001

¥2,1400.5

5,326.88

1.9

C-4

Tokyo Tatemono Honmachi Bldg.

Osaka, Osaka

Nov. 16, 2001

4,150

1.0

7,163.08

10.5

C-7

JPR Hakata Bldg.

Fukuoka, Fukuoka

Nov. 16, 2001

2,900

0.7

6,568.43

1.1

C-9

JPR Naha Bldg.

Naha, Okinawa

Nov. 16, 2001

1,560

0.4

3,946.36

4.5

C-12

Sompo Japan Sendai Bldg.

Sendai, Miyagi

Jun. 26, 2002

3,150

0.8

7,129.05

0.5

C-13

Sompo Japan Wakayama Bldg.

Wakayama, Wakayama

Jun. 26, 2002

1,670

0.4

4,875.12

11.2

C-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

Jun. 21, 2002

2,810

0.7

3,257.73

1.3

C-17

JPR Dojima Bldg.

Osaka, Osaka

Jan. 23, 2004

2,140

0.5

3,930.21

11.1

C-18

JPR Hakata-chuo Bldg.

Fukuoka, Fukuoka

Jun. 11, 2004

1,920

0.5

3,290.42

1.6

C-19

JPR Nagoya Fushimi Bldg.

Nagoya, Aichi

Mar. 22, 2005

4,137

1.0

7,086.37

10.0

C-20

Yakuin Business Garden

Fukuoka, Fukuoka

Aug. 8, 2012

10,996

2.8 16,654.33

1.4

13,0003.3 18,586.97

11.6

May 30, 2005

5,430

1.4

12.7

May 15, 2003

C-1

JPR Umeda Loft Bldg.

Osaka, Osaka

C-3

Benetton Shinsaibashi Bldg.

Osaka, Osaka

C-4

Housing Design Center Kobe

Kobe, Hyogo

Sep. 28, 2005

7,220

1.8 35,444.13

4.8

C-5

JPR Chayamachi Bldg.

Osaka, Osaka

Aug. 30, 2006

6,000

1.5

2,484.39

14.8

Jul. 16, 2003

5,303.98

Subtotal¥69,223

17.4 131,047.45

—

Total

¥398,640

100.0 460,452.47

3.4(Note 3) The PML indicates the figures stated in the Portfolio Earthquake PML Valuation Report prepared by Sompo Japan Nipponkoa Risk Management Inc., rounded off to the second decimal place.

19II. Overview of JPR

Portfolio Map
A Central Tokyo
Shinjuku

A-11

A-14

Shinjuku Ward

A-12

A-5

Ichigaya

A-9
Chiyoda
Ward
A-17
A-4

A-4

Tokyo

A-21
Shibuya Ward

A-23

Harajuku

A-3
A-1

A-18

A-20
A-3
A-2 A-1

A-13

A-8
A-19
A-5 A-22

Chuo Ward

ShibuyaMinato Ward

A-2
Tamachi

A-15

A-6

Shinagawa

Gotanda

A-7

A-16

A-10
OhsakiShinagawa Ward

Office
● A-1
● A-2
● A-3
● A-4
● A-5
● A-6
● A-7
● A-8
● A-9
● A-10● A-11● A-1220

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

● A-13● A-14● A-15● A-16● A-17● A-18● A-19● A-20● A-21● A-22● A-23

Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.
Minami Azabu Bldg.
Shinagawa Canal Bldg.
Rokubancho Bldg.
JPR Harajuku Bldg.
Tokyo Tatemono Kyobashi Bldg.
JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
The Otemachi Tower(Land with Leasehold Interest)

■ A-1
■ A-2
■ A-3
■ A-4
■ A-5

JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.
(Yurakucho Itocia)

A Central Tokyo

B Greater Tokyo

C Other Cities

Chiyoda Ward
Chuo Ward
Minato Ward

All other areas of Tokyo andChiba, Kanagawa andSaitama Prefectures

All other areas in Japan

Shinjuku Ward
Shinagawa Ward
Shibuya Ward

Japan Prime Realty Investment Corporation

B Greater Tokyo (all other areas of Tokyo, Chiba, Kanagawa and Saitama Prefectures)
Office

Omiya

B-13

Musashiurawa

B-5● B-1 Arca East
● B-2 JPR Chiba Bldg.
● B-3 JPR Yokohama Nihon
Odori Bldg.
● B-5 Shinyokohama 2nd
Center Bldg.
● B-6 Kawaguchi Center Bldg.
● B-7 JPR Ueno East Bldg.
● B-8 Tachikawa BusinessCenter Bldg.
● B-9 Rise Arena Bldg.
● B-10 Yume-ooka Office Tower● B-11 Olinas Tower● B-12 Tokyo Tatemono
Yokohama Bldg.

Minamiurawa
Kawaguchi

B-6
B-3

SAITAMA

CHIBA

B-8

Ikebukuro

B-1

TOKYO Tanashi

B-9 Ueno

B-11
B-1

B-7

Shinjuku

Kinshicho

TachikawaTokyo
Shibuya

RetailChiba

B-2

Shinagawa

■ B-1
■ B-3
■ B-4
■ B-5

Tanashi ASTA
Cupo-la Main Bldg.
JPR Musashikosugi Bldg.
Musashiurawa Shopping
Square■ B-6 Kawasaki Dice Bldg.

Musashikosugi

B-4

Musashikosugi(New Station)

KANAGAWA

KawasakiB-6

B-5

Shin-Yokohama

B-12

Yokohama
Nihon-Odori

B-10

23rd Fiscal Period Acquisitions● B-5 Shinyokohama 2nd
Center Bldg.
(additional acquisition)● B-13 Omiya Prime East

B-3

Kamiooka

C Other Cities
Office● C-1 Niigata Ekinan Center Bldg.
● C-4 Tokyo Tatemono Honmachi Bldg.
● C-7 JPR Hakata Bldg.
● C-9 JPR Naha Bldg.
● C-12 Sompo Japan Sendai Bldg.
● C-13 Sompo Japan Wakayama Bldg.
● C-14 Tenjin 121 Bldg.
● C-17 JPR Dojima Bldg.
● C-18 JPR Hakata-chuo Bldg.
● C-19 JPR Nagoya Fushimi Bldg.
● C-20 Yakuin Business Garden

OSAKA

Retail
■ C-1
■ C-3
■ C-4
■ C-5

FUKUOKAJPR Umeda Loft Bldg.
Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
JPR Chayamachi Bldg.

C-7
C-14
C-18
C-20
NAHA

C-9

C-4
C-17
C-1
C-3
C-5

SENDAIC-12

NIIGATA

C-1

KOBE

C-4
NAGOYA

C-19

WAKAYAMA

C-13
21

II. Overview of JPR

Properties Newly Acquired in the 23rd Fiscal PeriodOmiya Prime East

B-13
JPR acquired a relatively-newly built property that features comparatively
high specifications, located in the Omiya area where demand for officespaces is solid and the vacancy rate is kept as low as in central Tokyo.

1. Property Overview
Location

1-1, etc. 2-chome, Shimo-cho, Omiya-ku, Saitama-Shi, Saitama

Completion

February 2009

Structure/Floors
Total site area

S/9F
2,268.09m2

Total floor spaceUse

9,203.98m2
office2. Transaction Summary
SellerDomestic operating company

Acquisition priceAppraisal value
Acquisition date

¥6,090 million
6,270 million yen (as of March 1, 2013)
March 22, 2013

3. Assumed Income
NOI yield

Entrance

Elevator hall

6.1%

(Note)	The NOI yield of the property has been calculated by dividing the assumed income for the 12months in which the acquisition was made, based on the rent level, the occupancy rate andother factors upon acquisition, by the acquisition price.

Shinyokohama 2nd Center Building (additional ownership)

B-5

JPR successfully acquired additional ownership at a price far lower than theappraisal value by utilizing preferential negotiation rights, achieving JPR’s
full ownership of the property.

1. Property Overview
Location

19-5, etc. 3-chome, Shinyokohama, Kohoku-ku, Yokohama-shi, Kanagawa

Completion

August 1991

Structure/Floors
Total site area

S, SRC B2/12F
841.71m2

Total floor spaceUse

7,781.93m2
office2. Transaction Summary
SellerDomestic special purpose entity

Acquisition price¥570 million

Appraisal valueMarket value based on special consideration (assemblage orcomponent value) 870 million yen (as of February 1, 2013)

Acquisition date

March 28, 2013

3. Assumed Income(Note) 	The NOI yield of the property has been calculated by dividing the assumed income
for the 12 months in which the acquisition was made, based on the rent level, theoccupancy rate and other factors upon acquisition, by the acquisition price.

22

NOI yield

7.9%

Japan Prime Realty Investment Corporation

Portfolio Properties
Central Tokyo

OfficeRetailKanematsu Bldg.

Kanematsu Bldg. Annex

A-1

A-2

Chuo Ward, Tokyo

Chuo Ward, Tokyo
Acquisition Price¥2,874 million
Site Area

679.06 m2

Total Floor Space

4,351.46 m2

Structure/Floors

SRC B1/8F
CompletedFebruary 1993
Property Manager

Tokyo Tatemono Co., Ltd.

JPR Ningyo-cho Bldg.

A-3
Chuo Ward, Tokyo
Acquisition Price¥2,100 million
Site Area

550.06 m2

Total Floor Space
Acquisition Price
Site Area
Total Floor Space

Structure/Floors¥16,276 million
1,751.13 m

2

14,995.09 m

2

S/RC/SRC B2/13F

Completed

SRC/RC B1/8F
CompletedFebruary 1993

December 1989

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Shin-Kojimachi Bldg.

Tokyo Tatemono Co., Ltd.

MS Shibaura Bldg.

A-4

A-6

Chiyoda Ward, Tokyo
Acquisition Price

4,117.70 m2

Structure/Floors

Minato Ward, Tokyo¥2,420 million

Site Area

657.80 m2

Total Floor Space

5,152.98 m2

Structure/Floors

SRC B1/9F

Completed

October 1984

DBJ Green Building
Property Manager

DBJ Green Building

Tokyo Tatemono Co., Ltd.

Gold

2013

Silver2013

DBJ Green Building

DBJ Green Building

BronzeA-5
Certified

JPR Crest Takebashi Bldg.

2013

2013

Chiyoda Ward, Tokyo
Acquisition Price¥4,000 million
Site Area
Total Floor Space

636.90 m2
4,790.68 m2

Acquisition Price

SRC B1/9F

Site Area (Note)

September 1999

Total Floor Space

Completed
Property Manager

Yasuda Real Estate Co., Ltd.

Structure/Floors¥11,200 million

Structure/Floors

8,992.18 m2
31,020.21 m

2

SRC/RC/S B2/13F
CompletedFebruary 1988
Property Manager

Tokyo Tatemono Co., Ltd.

(Note) Includes land of the Trinity Shibaura property, which was developed together with the MS Shibaura Bldg.

23

II. Overview of JPR

Portfolio Properties
Central Tokyo

OfficeRetailGotanda First Bldg.

A-7

Fukuoka Bldg.

A-8
Chuo Ward, Tokyo

Shinagawa Ward, Tokyo
Acquisition Price

Acquisition Price¥2,920 million¥2,920 million
Site Area

Site Area

1,551.19 m2

Total Floor Space

10,553.34 m2

SRC B2/10F

SRC/RC B2/11F

Completed

CompletedMay 1990

July 1989

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Co., Ltd.

A-9

11,627.74 m2

Structure/Floors

Structure/Floors

JPR Ichigaya Bldg.

1,302.17 m2

Total Floor Space

Oval Court Ohsaki Mark West

A-10

Chiyoda Ward, Tokyo

Shinagawa Ward, Tokyo
Acquisition Price

Acquisition Price¥3,500 million¥5,100 million
Site Area

Site Area

4,006.00 m2

1,058.04 m2

Total Floor Space

Total Floor Space

28,575.80 m2

5,888.82 m2
Structure/Floors

Structure/Floors

S/SRC B2/17F

SRC B1/9F
Completed

Completed

June 2001

March 1989
Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Co., Ltd.

Shinjuku Square Tower

A-11

BYGS Shinjuku Bldg.

A-12

Shinjuku Ward, Tokyo

Shinjuku Ward, Tokyo

Acquisition Price¥10,180 million
Site Area

8,409.52 m2 (entire redevelopment project)

Total Floor Space

78,796.00 m2 (entire redevelopment project)

Structure/Floors

S/RC/SRC B4/30F
Completed

October 1994
Property Manager

Tokyo Tatemono Co., Ltd.

Across Shinkawa Bldg. Annex

A-13
Chuo Ward, Tokyo

Acquisition Price¥710 million
Site Area

858.48 m2

Total Floor Space

5,535.90 m2
Acquisition Price

Structure/Floors

Site Area

Completed

3,522.46 m

June 1994
Property Manager

Tokyo Tatemono Co., Ltd.

24

Structure/Floors¥15,121 million

S/SRC B2/10F
Total Floor Space2

25,733.10 m2

SRC B2/14F
Completed

April 1985
Property Manager

Tokyo Tatemono Co., Ltd.

Japan Prime Realty Investment Corporation

Central Tokyo

OfficeRetailShinjuku Center Bldg.

A-14

Minami Azabu Bldg.

A-15

Shinjuku Ward, Tokyo

Minato Ward, Tokyo
Acquisition Price
Site Area¥3,760 million
778.09 m2

Total Floor Space

4,570.63 m2

Structure/Floors
CompletedS

9F

June 1992

Property Manager

Tokyo Tatemono Co., Ltd.

Shinagawa Canal Bldg.

A-16
Minato Ward, Tokyo
Acquisition Price¥1,870 million
Site Area

828.82 m2

Total Floor Space
Acquisition Price

Structure/Floors¥21,000 million
Site Area

14,917.11 m
Total Floor Space

176,607.89 m

2

2

SRC/RC/S B5/54F

S

Completed

October 1979

July 2008
Property Manager

Tokyo Tatemono Co., Ltd.

A-17

B1/8F

Completed

Property Manager

Rokubancho Bldg.

5,216.21 m2

Structure/Floors

Tokyo Tatemono Co., Ltd.

JPR Harajuku Bldg.

A-18

Chiyoda Ward, Tokyo

Shibuya Ward, Tokyo

Acquisition Price¥2,800 million
Site Area

716.95 m2

Total Floor Space

4,205.09 m2

Structure/Floors

SRC B3/7F
Completed

October 1991
Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Kyobashi Bldg.

A-19
Chuo Ward, Tokyo

Acquisition Price¥5,250 million
Site Area

547.10 m2

Total Floor Space

4,419.79 m2
Acquisition Price

Structure/Floors

Site Area

Completed

January 1981
Property Manager

Tokyo Tatemono Co., Ltd.

Structure/Floors¥8,400 million

SRC/S B1/10F

1,205.07 m2

Total Floor Space

6,466.94 m

2

SRC B1/9F
Completed

March 1989
Property Manager

Tokyo Tatemono Co., Ltd.

25

II. Overview of JPR

Portfolio Properties
Central Tokyo

DBJ Green Building

DBJ Green BuildingGold

SilverOfficeRetail2013

2013

DBJ Green Building

DBJ Green Building

JPR Nihonbashi-horidomeBronze
Bldg.

Certified

2013

2013

Chuo Ward, Tokyo
Acquisition Price¥5,100 million
Site Area
Total Floor SpaceDBJ Green Building

DBJ Green BuildingGold

SilverJPR Sendagaya Bldg.

A-20

2013

2013

A-21

Shibuya Ward, Tokyo

DBJ Green Building

DBJ Green Building

BronzeCertified

2013

2013

937.59 m2
7,190.82 m2

Structure/Floors

SRC B1/9F
Completed

June 2002
Property Manager:

Tokyo Tatemono Co., Ltd.

Ginza Sanwa Bldg.

A-22
Chuo Ward, Tokyo
Acquisition Price¥3,400 million
Site Area
Total Floor Space

1,119.27 m2
8,851.00 m2
Acquisition Price

Structure/Floors

Site Area

Completed

October 1982
Total Floor Space

Property Manager

Mitsubishi Jisho Property Management Co., Ltd.

The Otemachi Tower

A-23(Land with Leasehold Interest)

Structure/Floors¥15,050 million

SRC B2/9F

2,217.49 m2
7,683.19 m2

S 8F
CompletedMay 2009
Property Manager

Tokyo Tatemono Co., Ltd.

A-1

JPR Shibuya Tower Records Bldg.

Chiyoda Ward, Tokyo

Acquisition Price

Structure/Floors–
Site Area

11,034.78 m2

Total Floor Space–
Acquisition Price

Completed–
Site Area

Property Manager–*	Since the property consists of land with leasehold interest only, no property managementcompany has been appointed.

26

Shibuya Ward, Tokyo*
Total Floor Space

¥12,000 million
1,010.47 m2
8,449.56 m

2Structure/Floors
Completed
Property Manager

SRC/S B3/8F
February 1992

Tokyo Tatemono Co., Ltd.

Japan Prime Realty Investment Corporation

Central Tokyo

Office/ Greater Tokyo Office Retail

RetailJPR Daikanyama

A-2

Yurakucho Ekimae Bldg.

A-5(Yurakucho Itocia)

Shibuya Ward, Tokyo

Chiyoda Ward, Tokyo

Acquisition Price¥2,160 million
Site Area

277.12 m2
Total Floor Space

668.09 m2
Structure/Floors

RC B2/2F
Completed

July 2002
Property Manager

Jones Lang LaSalle K.K.

JPR Jingumae 432

A-3
Shibuya Ward, Tokyo
Acquisition Price¥4,275 million
Site Area

198.10 m2

Total Floor Space

1,066.81 m2
Acquisition Price

Structure/Floors

Structure/Floors¥3,400 million

S/SRC B1/7F
Site Area

Completed

6,808.12 m

February 2006
Total Floor Space

Property Manager

Jones Lang LaSalle K.K.

Shinjuku Sanchome East Bldg.

A-4

2

71,957.65 m2

S/SRS B4/20F
Completed

October 2007
Property Manager

Tokyo Tatemono Co., Ltd.

Arca East

B-1
Sumida Ward, Tokyo

Shinjuku Ward, Tokyo
Acquisition Price

Acquisition Price¥2,740 million
Site Area

2,578.69 m2

Total Floor Space

24,617.65 m2

Structure/Floors

S/SRC/RC B3/14F
Completed

January 2007
Property Manager¥5,880 million
Site Area

B-2

S/SRC B3/19F
Completed

March 1997
Property Manager

Tokyo Tatemono Co., Ltd.

JPR Yokohama Nihon Odori Bldg.

Chiba City, Chiba

B-3
Yokohama City, Kanagawa

Acquisition Price

Acquisition Price¥2,927 million¥2,350 million
Site Area

1,382.35 m2

Total Floor Space

34,281.86 m2

Structure/Floors

Tokyo Tatemono Co., Ltd.

JPR Chiba Bldg.

3,755.01 m2

Total Floor Space

9,072.57 m2

Site Area

1,100.59 m2

Total Floor Space

9,146.52 m2

Structure/Floors

Structure/Floors

SRC B1/11F

S/SRC B1/13F
Completed

Completed

October 1989

January 1991
Property Manager

Tokyo Tatemono Co., Ltd.

Property Manager

Tokyo Tatemono Co., Ltd.

27

II. Overview of JPR

Portfolio Properties
Greater Tokyo

OfficeRetail

Shinyokohama 2nd Center Bldg.

Kawaguchi Center Bldg.

B-5

B-6

Yokohama City, Kanagawa

Kawaguchi City, Saitama
Acquisition Price

Acquisition Price¥8,100 million¥920 million
Site Area

Site Area

4,524.61 m2

841.71 m2
Total Floor Space

Total Floor Space

28,420.85 m2

7,781.93 m2
Structure/Floors

Structure/Floors

S/SRC B2/15F

S/SRC B2/12F
Completed

CompletedFebruary 1994

August 1991
Property Manager
DBJ Green Building

Property Manager

DBJ Green Building

Nomura Building Management Co., Ltd.

Nomura Building Management Co., Ltd.

GoldJPR Ueno East Bldg.

Silver

2013

2013

DBJ Green Building

DBJ Green Building

BronzeB-7
Certified

2013

Tachikawa Business Center Bldg.

B-8

2013

Tachikawa City, Tokyo

Taito Ward, Tokyo
Acquisition Price

Acquisition Price¥3,188 million¥3,250 million
Site Area

Site Area

2,047.22 m2

1,242.97 m2

Total Floor Space

Total Floor Space

14,706.36 m2

8,490.44 m2
Structure/Floors

Structure/Floors

S/SRC B1/12F

S/SRC B1/8F
Completed

Completed

December 1994

October 1992
Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Yasuda Real Estate Co., Ltd.

DBJ Green Building

Rise Arena Bldg.

B-9

Olinas Tower

Gold

Toshima Ward, Tokyo
Acquisition Price2013

DBJ Green Building

B-11
Silver2013

Sumida Ward,Tokyo
DBJ Green Building
DBJ Green Building

Bronze¥5,831 million

2013

Certified

2013

Site Area

9,377.28 m2 (entire redevelopment project)

Total Floor Space

91,280.94 m2 (including residential tower)

Structure/Floors

RC/SRC/S B3/42F*

Completed

January 2007

Property Manager

Taisei-Yuraku Real Estate Co., Ltd.

*The commercial tower portion has 2 basement floors and 15 floors above ground.

Yume-ooka Office Tower

B-10
Yokohama City, Kanagawa
Acquisition Price¥6,510 million
Site Area

12,011.00 m2

Total Floor Space

185,974.87 m2

Structure/Floors

S/SRC/RC B3/27F
Completed

March 1997
Property Manager

Tokyo Tatemono Co., Ltd.

28

Acquisition Price

Structure/Floors¥31,300 million

SRC/RC/S B2/45F*

Site Area

Completed

27,335.29 m2 (entire site area)
Total Floor Space
257,842.41 m2

Property Manager(includes commercial tower andresidential tower)

March 2006
Tokyo Tatemono Co., Ltd.

*The office building has 31 floors above ground and 2 floors underground.

Japan Prime Realty Investment Corporation

Greater Tokyo

Office/ Other Cities Office Retail

RetailTokyo Tatemono Yokohama Bldg.

B-12

Tanashi ASTA

B-1

Yokohama City, Kanagawa

Nishitokyo City, Tokyo

Acquisition Price

Acquisition Price¥7,000 million
Site Area¥10,200 million
Site Area

1,110.28 m2

Total Floor Space

12,326.30 m2

Total Floor Space

8,772.51 m2

Structure/Floors

80,675.27 m2

Structure/Floors

SRC B1/9F

SRC B2/17F

Completed

CompletedMay 1981

February 1995

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Cupo-la Main Bldg.

B-3

Tokyo Tatemono Co., Ltd.

JPR Musashikosugi Bldg.

B-4

Kawaguchi City, Saitama

Kawasaki City, Kanagawa
Acquisition Price

Acquisition Price¥7,260 million¥2,100 million

Site Area

Site Area

4,761.62 m2

2

15,008.28 m (entire redevelopment project)

Total Floor Space

Total Floor Space

18,394.32 m2

48,321.96 m2

Structure/Floors

Structure/Floors

SRC/RC/S B1/6F

S/RC/SRC B2/10F

Completed

Completed

March 1983

January 2006

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Co., Ltd.

Musashiurawa Shopping Square

B-5

Acquisition Price
Site Area

Kawasaki Dice Bldg.

B-6

Saitama City, Saitama

Kawasaki City, Kanagawa¥4,335 million
8,317.99 m2

Total Floor Space
Structure/Floors
Completed

28,930.36 m2
S

B1/4F

October 2005

Property Manager

Nippon Steel Kowa Real Estate Co., Ltd.
Tokyo Tatemono Co., Ltd.

Niigata Ekinan Center Bldg.

C-1
Niigata City, Niigata

Acquisition Price¥2,140 million
Site Area

2,706.99 m2

Total Floor Space

19,950.42 m2

Structure/Floors

Acquisition Price

S/SRC B1/10F
Completed

Structure/Floors¥15,080 million
Site Area

March 1996
Property Manager

Jones Lang LaSalle K.K.

4,475.45 m
Total Floor Space2

36,902.01 m2

S/SRC/RC B2/11F
Completed

August 2003
Property Manager

Tokyo Tatemono Co., Ltd.

29

II. Overview of JPR

Portfolio Properties
Other Cities

OfficeRetailTokyo Tatemono Honmachi Bldg.

JPR Hakata Bldg.

C-4

C-7

Osaka City, Osaka

Fukuoka City, Fukuoka
Acquisition Price

Acquisition Price¥2,900 million¥4,150 million
Site Area

1,432.64 m
Total Floor Space

Site Area
Total Floor Space

14,619.52 m2

S/SRC B1/12F

SRC B3/9F

Completed

Completed

June 1985

February 1970

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Co., Ltd.

Sompo Japan Sendai Bldg.

C-9

C-12

Naha City, Okinawa

Sendai City, Miyagi

Acquisition Price

Acquisition Price¥1,560 million
Site Area

959.87 m
Total Floor Space

¥3,150 million
Site Area

2

1,895.67 m2

Total Floor Space

5,780.71 m2

Structure/Floors

SRC/S 12FSRC B1/12F
Completed

October 1991

December 1997

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Co., Ltd.

Tenjin 121 Bldg.

C-13

C-14
Fukuoka City, Fukuoka

Wakayama City, Wakayama
Acquisition Price

Acquisition Price¥1,670 million
Site Area

1,128.45 m
Total Floor Space

¥2,810 million
Site Area

2

1,164.39 m2

Total Floor Space

6,715.07 m2

Structure/Floors

S

9F

S/SRC 13F
Completed

July 1996

July 2000

Property Manager

Property Manager

Tokyo Tatemono Co., Ltd.

Tokyo Tatemono Co., Ltd.

JPR Hakata-Chuo Bldg.

C-17

C-18

Osaka City, Osaka
Acquisition Price¥2,140 million
Site Area

668.11 m
Total Floor Space2

5,696.01 m2

Structure/Floors

SRC B2/9F
Completed

October 1993
Property Manager

Tokyo Tatemono Co., Ltd.

30

8,690.95 m2

Structure/Floors

Completed

JPR Dojima Bldg.

10,783.52 m2

Structure/Floors

Completed

Sompo Japan Wakayama Bldg.

9,828.73 m2

Structure/Floors

Structure/Floors

JPR Naha Bldg.

1,214.63 m2

2

Fukuoka City, Fukuoka
Acquisition Price¥1,920 million
Site Area

680.63 m2

Total Floor Space

3,874.81 m2

Structure/Floors

SRC 8F
CompletedFebruary 1993
Property Manager

Tokyo Tatemono Co., Ltd.

Japan Prime Realty Investment Corporation

Other Cities

OfficeRetail

DBJ Green Building

DBJ Green Building

JPR Nagoya Fushimi Bldg.

Yakuin Business Garden

C-19

Gold

Nagoya City, Aichi

Bronze¥4,137 million
1,610.38 m
Total Floor Space

2013

Fukuoka City, Fukuoka
DBJ Green Building
DBJ Green Building

Acquisition Price
Site Area

2013

C-20
Silver2013

Certified2013

2

10,201.44 m2

Structure/Floors

SRC B1/9F
Completed

March 1991
Property Manager

Tokyo Tatemono Co., Ltd.

Benetton Shinsaibashi Bldg.

C-3
Osaka City, Osaka

Acquisition Price
Site Area¥5,430 million
609.31 m2

Total Floor Space

5,303.98 m2

Structure/Floors

S B2/10F
CompletedFebruary 2003
expansion in January 2005
Property Manager

Tokyo Tatemono Co., Ltd.

JPR Umeda Loft Bldg.

C-1

Acquisition Price

Structure/Floors¥10,996 million
Site Area

4,348.43 m2

Total Floor Space2

SRC/14F
Completed

January 2009
Property Manager

22,286.35 m

Tokyo Tatemono Co., Ltd.

Housing Design Center Kobe

C-4

Osaka City, Osaka

Kobe City, Hyogo
Acquisition Price¥7,220 million
Site Area

3,994.47 m2

Total Floor Space

33,877.71 m2

Structure/Floors

SRC/S B2/11F
Completed

June 1994
Property Manager

Tokyo Tatemono Co., Ltd.

JPR Chayamachi Bldg.

C-5
Osaka City, Osaka
Acquisition Price¥6,000 million
Site Area

592.45 m2

Total Floor Space
Acquisition Price

Structure/Floors¥13,000 million
Site Area

SRC B1/8F
Completed

3,518.68 m2
Total Floor Space

April 1990
Property Manager

17,897.56 m

2

Tokyo Tatemono Co., Ltd.

3,219.36 m2

Structure/Floors

S/SRC 9F
Completed

June 1994
Property Manager

Tokyo Tatemono Co., Ltd.

31

II. Overview of JPR

8. Structure and History of JPR
The Objective and Basic Characteristics of JPR
With the basic concept of “investing in urban commercial real estate,” JPR’s investment targets are primarily
comprised of superior office properties (urban work facilities), retail properties located in thriving commercial
areas, the land on which they are located and asset-backed securities that have such real estate as their primary
investment. JPR also makes it a basic policy to diversify its investment geographically by not limiting properties
to Tokyo but also considering assets in other regional cities, after carefully considering the risks and returns of theinvestment, so that the benefits of portfolio management can be demonstrated.

Corporate History
Date

Description

September 6, 2001

The founder (Tokyo Realty Investment Management, Inc.) filed for establishment of the investment corporation under Article69-1 of the Act on Investment Trusts and Investment Corporations (Investment Trusts Act)

September 14, 2001

Japan Prime Realty Investment Corporation was registered and established under Article 166 of the Investment Trusts Act

November 16, 2001

Started asset management (acquisition of real estate beneficiary interests in trust for 13 underlying trust assets comprising 11
office properties and 2 retail properties) (¥40,730 million in total)

January 22, 2002

Investment unit split (2.5 units for 1 existing unit) pursuant to Article 87 of the Investment Trusts Act

June 14, 2002

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

Structure of JPR

Administrative Agent forEnvironment-Related Laws andRegulations

40%

20%

20%

10%

10%

Tokyo Tatemono

Taisei Corporation

Yasuda Real Estate

Sompo Japan
Insurance

Meiji Yasuda
Life Insurance

Asset Manager
Tokyo Realty Investment
Management, Inc.

Tokyo Tatemono Co., Ltd.

Entrustment of
Asset Management

Tenant Agents

Tokyo Tatemono Co., Ltd.

Japan Prime Realty
Investment Corporation

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

Loans / Issue
of Investment
Corporation
Bonds

Asset
Management
Property

General Tenant Services Agent /Construction Management Agent /Property Transfer Agent /Administrative Agent forEnvironment-Related Laws andRegulations

Liabilities
EquityInvestment

AssetsUnitholders'EquityProperty Manager

Cash
Distribution

Lender / Investment
Corporation Bond Investor

Unitholders
Transaction
Unitholders

Entrustment of Entrustment ofgeneralasset custodyadministration

32

Asset Custodian

General Administrator

Mizuho Trust & Banking, Co., Ltd.

Mizuho Trust & Banking, Co., Ltd.
and others

Japan Prime Realty Investment Corporation

9. Overview of Asset Manager
Overview
Name
Business Description
Capitalization

Shareholder
Composition (Note 1)

Tokyo Realty Investment Management, Inc. (TRIM)
Asset management for investment corporation¥350 million
Tokyo Tatemono Co., Ltd. (40%)
Taisei Corporation (20%)
Yasuda Real Estate Co., Ltd. (20%)
Sompo Japan Insurance Inc. (10%)
Meiji Yasuda Life Insurance Company (10%)

Corporate History

April 28, 2000

EstablishedObtained license as real estate transaction agent(currently: No. (3) 79025 licensed by Governor of Tokyo)
Obtained license as discretionary transaction agent under the Building Lots and Building Transactions Business Act(Approval Number: No. 3)
Obtained license as asset management agent for investment corporation under the Act on Investment Trusts andInvestment Corporations (Approval Number: No. 7 licensed by the Prime Minister)
Registered for financial instruments exchange business (investment management business)(Registration Number: No.362 (Kinsho) Head of Kanto Local Finance Bureau) (Note 2)

October 13, 2000
March 16, 2001
June 20, 2001
September 30, 2007
November 28, 2007

Applied for registration and submitted application form for financial instruments exchange business(Note 1) The percentage represents the ratio of the number of respective shares with voting rights to the total number of shares with voting rights.
(Note 2) 	Tokyo Realty Investment Management, Inc. was deemed to have been registered as investment management business, applicable to the Supplementary Provisions Article 159-1 of the Act for
Partial Revision of the Securities and Exchange Act, etc. (Act No. 65 of 2006).

Organization Chart
Shareholders’ Meeting
Auditors
Board of Directors
President & CEO

Investment Committee(Investment Subcommittee /Fund Management
Subcommittee)

Compliance Committee(Compliance Subcommittee)
Compliance Office

Investment Management
Division

Financial DivisionCorporate Planning /Administration Division

Research Group
Investment
Group

Asset
Management
1 Group

Asset
Management
2 GroupAsset
Engineering
Group

FinancialGroup

IR Group

FundManagement
Group

Planning
Group

GeneralAdministration
Group

Decision-Making Institutions for Investment Management
TRIM has established the Investment Committee as the institution to make investment management decisions,as well as the Investment Subcommittee (including the Due Diligence Subcommittee) and the Fund Management
Subcommittee as subsidiary bodies of the Committee. These committees comprise the President and CEO,
Investment Management Division General Manager, Financial Division General Manager, and Corporate Planning/ Administration Division General Manager. The Compliance Office General Manager also participates in thesecommittees to enhance confirmation in terms of legal compliance.
Matters concerning the targets and policies of investment management are decided by the Board of Directors, andmatters concerning planning and implementation of asset management are decided by the Investment Committee.
Matters concerning acquisition, disposition or management of individual properties are decided by the Investment
Subcommittee or the Fund Management Committee, respectively. Moreover, the Board of Directors has final
decision-making authority for acquisitions and dispositions of individual assets having over a certain amount of value.
33III. Asset Management Report

1. Overview of Asset Management

Reference
Information

Financial Indices

Cash Distribution per
Unit, Etc.

Assets, etc.

Operating
Performance(1) Changes in Operating Results and Other Management Data
19th Fiscal Period

20th Fiscal Period

21st Fiscal Period

22nd Fiscal Period

23rd Fiscal Period(Jan. 1, 2011 - Jun.
30, 2011)(Jul. 1, 2011 - Dec.
31, 2011)(Jan. 1, 2012 - Jun.
30, 2012)(Jul. 1, 2012 - Dec.
31, 2012)(Jan. 1, 2013 - Jun.
30, 2013)

11,52911,529
5,926
5,296
5,603
4,075
4,010
360,004(-0.2)
162,763
175,452(-0.0)
171,339
4,011
100.0
715,000
245,387
5,611
5,611

11,772
11,772
6,009
5,357
5,763
4,201
4,200
360,699(+0.2)
163,005
175,640(+0.1)
171,3394,201
100.0
715,000
245,651
5,876
5,876

12,345
12,345
5,952
5,217
6,393
4,597
4,596
396,017(+9.8)
195,081
176,035(+0.2)
171,3394,597
100.0
715,000
246,204
6,430
6,430

12,963
12,963
6,198
5,519
6,765
5,026
5,025
401,984(+1.5)
180,557
197,168(+12.0)
192,0445,026
100.0
825,000
238,992
6,093
6,093

13,27813,278
6,893
6,208
6,385
4,975
4,974
409,715(+1.9)
187,158
197,116(-0.0)
192,044
4,975
100.0
825,000
238,929
6,031
6,031

Yen

–

–

–

–

–

%
%

1.1
2.3

1.2
2.3

1.2
2.4

1.3
2.5

1.2
2.5

%

2.3

2.4

2.6

2.7

2.5

%

4.6

4.7

5.2

5.3

5.1

175,502

175,452

175,640

176,035

197,168

48.7

48.7

44.5

49.0

48.1

(+0.1)(-0.0)(-4.2)(+4.6)(-0.9)

45.2

45.2

49.3

44.9

45.7

Fiscal Period

Unit

Operating Revenue
Rent revenue – real estate
Operating Expenses
Expenses related to rent business
Operating Income
Ordinary Income
Net Income
Total Assets(Period-on-period variation)
Interest-bearing Debt
Total Unitholders Equity(Period-on-period variation)
Unitholders' Capital
Total Cash Distributions
Dividend payout ratio
Number of Units Outstanding
Total Unitholders' Equity per Unit
Cash Distribution per Unit
Distribution amountExceeding profit distribution
amountOrdinary Income on Total Assets (Note 1)
Annualized (Note 10)
Net Income on Total Unitholders’Equity (Note 2)
Annualized (Note 10)
Total unitholders’ equity at
beginning of period
Unitholders' Equity Ratio at End of
Period (Note 3)(Period-on-period variation)
Interest-bearing Debt to Total Assets
at End of Period (Note 4)
DSCR (Note 5)
Net income before interest andamortization (Note 6)
Interest expenses
NOI from Leasing (Note 7)
Annualized NOI yield (Notes 9 and 10)
NCF from Leasing (Note 8)
Annualized NCF yield(Notes 9 and 10)
Investment Properties Owned (Note 11)
Number of Tenants
Total Leasable Floor Space
Occupancy Rate

Million yen
Million yen
Million yen
Million yen
Million yen
Million yen
Million yen
Million yen%
Million yen
Million yen%
Million yen
Million yen
%
Units
Yen
Yen
Yen

Million yen
%

%
Times

5.1

5.3

5.4

6.0

6.3

Million yen

7,438

7,427

7,811

8,226

8,163

Million yen
Million yen%
Million yen

1,451
8,144
4.8
7,597

1,402
8,239
4.7
7,628

1,459
8,882
4.7
8,271

1,368
9,275
4.7
8,595

1,304
8,953
4.5
8,359

%

4.5

4.4

4.4

4.4

4.2

m2
%

56
493
421,371.51
94.7

57
501
423,311.93
95.6

58
502
434,340.04
94.1

59
534
450,943.43
94.9

60
564
460,452.47
96.9

Notes:(1) Ordinary income / (total assets at beginning of period + total assets at end of period) / 2(2) Net income / (total unitholders' equity at beginning of period + total unitholders' equity at end of period) / 2(3) Total unitholders' equity at end of period / total assets at end of period x 100(4) Interest-bearing debt / total assets at end of period x 100(5) Net income before interest and amortization / interest expenses (including interest expenses on investment corporation bonds)(6)	Net income - gain on sale of real estate + loss on sale of real estate + loss on sale of investment securities + extraordinary loss + interest expenses (including interest expenses on investment
corporation bonds) + depreciation(7) (Real estate rental revenues - real estate rental expenses) + depreciation(8) NOI from leasing - capital expenditures(9)	Annualized NOI from leasing / property acquisition price (19th fiscal period: ¥341.58 billion, 20th fiscal period: ¥344.98 billion, 21st fiscal period: ¥380.98 billion, 22nd fiscal period: ¥391.98
billion and 23rd fiscal period: ¥398.64 billion)
Annualized NCF from leasing / property acquisition price(10)	Annualization is based on 365 days for a year and calculated by using the following management days: 19th fiscal period: 181 days, 20th fiscal period: 184 days, 21st fiscal period: 182days,
22nd fiscal period: 184 days and 23rd fiscal period: 181 days.
(11)	Shin-Kojimachi Bldg., Fukuoka Bldg., Shinjuku Square Tower, BYGS Shinjuku Bldg., Shinjuku Sanchome East Bldg., Shinyokohama 2nd Center Bldg., Tachikawa Business Center Bldg. and
JPR Umeda Loft Bldg. were acquired at multiple times but are calculated as one property.
(12) Total leasable floor space in this table indicates the contracted area.
(13)	Any ratio indicated on financial indices is rounded to the first decimal place (except for the dividend payout ratio, which is rounded off to the first decimal place).

34

Japan Prime Realty Investment Corporation(2) 23rd Fiscal Period Asset Management
1) Milestones of JPR	Japan Prime Realty Investment Corporation (JPR) was established on September 14, 2001 under the Act on Investment Trusts and Investment
Corporations (hereafter, the Investment Trusts Act), and was listed on the Tokyo Stock Exchange Real Estate Investment Trust Section(securities code: 8955) on June 14, 2002 with 289,600 outstanding investment units. Subsequently, JPR conducted five public offerings and other
equity financing measures, with the number of investment units issued and outstanding totaling 825,000 units at present. JPR has assigned theasset management of its portfolio to Tokyo Realty Investment Management, Inc., through which JPR aims to maximize unitholder value by
efficiently managing the portfolio of office properties and retail properties.

2) Management Environment	At the beginning of the 23rd fiscal period, the market saw a shift in trends for the weakening yen and higher stock prices due to expectations forthe “Abenomics” comprising the three pillars of bold monetary easing, dynamic fiscal stimulus package and growth strategies, and the trends
continued throughout the period. Consequently, the Japanese economy maintained positive growth, led primarily by an increase in consumer
spending in line with the recovering business confidence. On the other hand, the large-scale monetary easing measures were accompanied bywide fluctuations in interest rates, foreign exchange rates and stock prices.

The Office Property Leasing Market
	In the 23 wards of Tokyo, an improving trend was observed in the supply and demand balance in the office property leasing market due toexpansion in new demand, including increased office space within the same buildings, in accordance with the recovery of business confidence, on
top of new supply becoming more controlled. Given this situation, the rent levels for new contracts took an upward turn for Class S and Class A
buildings. Nevertheless, tenants continue to take a stringent attitude in terms of requirements for office specifications, such as considerations forenergy saving and business continuity plans, as well as cost consciousness.

The Retail Property Leasing Market
	Recovery of business confidence helped improve consumers’ willingness to buy, with consumption of luxury goods remaining strong particularly
due to the financial assets effect as a result of higher stock prices. Urban retail properties in good locations, such as Ginza and Shinjuku, arepresumably en route for bottoming out and about to take an upward turn. On other hand, there has arisen a gap among tenants in terms of theirability to bear rent burdens, as the positive impact of the recovery in consumer spending has not yet spread across all retail businesses.

The For-Sale Real Estate Market
	The transaction volume expanded, including deals of large-scale projects, as initial public offerings and public offerings by REITs took place
one after another against the backdrop of a favorable fund procurement environment. However, with a distinct trend of acquisitions of bluechip properties by REITs being made from their sponsors, the supply and demand situation in the for-sale real estate market is becoming
increasingly tighter, mainly for quality properties. Under such circumstances, the transaction price of real properties started to be formed withthe anticipated recovery in the leasing market taken into account.

3) Portfolio Management Status
New Property Acquisitions and Asset Replacement
	JPR investigates possible investments mainly in office properties in the Tokyo area, plus retail properties and office properties in regional cities,
with the primary aim of improving the quality and stabilizing earnings of the portfolio while paying attention to balancing diversification of theportfolio, both in terms of location and asset class.
	During the 23rd fiscal period, JPR acquired Omiya Prime East (acquisition price: 6.09 billion yen) and Shinyokohama 2nd Center Building(additional ownership) (acquisition price; 570 million yen), resulting in the balance of assets under management now totaling 60 properties, or
398.6 billion yen on an acquisition price basis, as of the end of June 2013. The total leasable floor space is now 460,452m2 and the number oftenants has reached 564.

Operational Management of Portfolio
	The vacancy rate in the office property leasing market showed a downward trend in the 23rd fiscal period, given the supply and demand balance
improving in Tokyo and other areas. Under such circumstances, JPR endeavored to attract new tenants through strategic leasing activities
and enhance the satisfaction of existing tenants by keeping close cooperation with property management companies and brokers, with an aim
of improving occupancy rates. As a result, JPR successfully secured new leases and expansion of office space in the same buildings by existing
tenants primarily for office properties in central Tokyo and the greater Tokyo area, with the period-end occupancy rate increasing significantly
by two percentage points to 96.9% from 94.9% at end of the previous fiscal period.
	In terms of property management, based on JPR’s brand concept A/3S (Amenity/Service, Safety and Save Energy), JPR continued to proactively
implement renovations in an aim to create spaces where the workers feel satisfaction. As an endeavor to implement energy-saving measures,
JPR conducted replacement of lighting equipment in the common areas with LED lamps and renovation of air-conditioning systems, which
are expected to be effective in saving energy, at its multiple properties. Furthermore, JPR is proactively engaged in environmental friendliness,
continuously working to obtain environmental certifications (the DBJ Green Building Certification*1 and the recognition by GRESB*2).
*1	The DBJ Green Building Certification is a certification system by Development Bank of Japan Inc., designed to select superior real estate that meets the demand of the times, with a purposeof promoting properties that are environmentally friendly, equipped to mitigate disaster and prevent crime, as well as meet the various social requirements surrounding real estate fromstakeholders (“Green Buildings”)*2	GRESB, which stands for Global Real Estate Sustainability Benchmark, is a benchmark system for analyzing and evaluating sustainability of real estate companies, REITs and real estate private
placement funds, in terms of environmental friendliness and social nature. It is based on surveys conducted by a group of the same name composed of more than 20 organizations worldwide
such as European pension asset managers.

35III. Asset Management Report

Fund Procurement
	During the 23rd fiscal period, JPR continued to pursue further financial stability by issuing unsecured investment corporation bonds andconducting bank borrowings at long-term fixed interest rates with an eye on avoiding future interest rate fluctuation risks and remaining
attentive to the diversification of repayment and redemption maturity dates. By doing so, JPR pursued further financial stability.
	As a result, the balance of total outstanding borrowings as of the end of the fiscal period was 130.6 billion yen, with unsecured corporate bondsof 56.5 billion yen. With regard to JPR’s overall interest-bearing debt, the average interest rate as of the end of the fiscal period (Note 1) was 1.4%,
the interest-bearing debt ratio (Note 2) was 49.4% and the LTV (ratio of interest-bearing debt to total assets) at end of the period (Note 3) was
45.7%.
	Of these, the non-current portion of long-term interest-bearing debt now comprises 79.2% of all interest-bearing debt, and the average maturity(Note 4) is 4.0 years. The current portion of long-term interest-bearing debt is 35.4 billion yen.
The following represents the issuer ratings for JPR as of the end of this fiscal period.

Details of Corporate Credit Ratings as of June 30, 2013
Credit Rating Agency

Corporate Credit Rating

Rating and Investment Information, Inc.

AA- (Stable)

Standard & Poor's Ratings Japan K.K.

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

Moody's Japan K.K.

A3 (Stable)(Note 1) Average interest is arrived at by calculating a weighted average of interest rates as of the end of the 23rd fiscal period based on the balance of each debt.
(Note 2) Interest-bearing debt ratio (%): interest-bearing debt / (interest-bearing debt + unitholders' capital) x 100 (unitholders' capital: 192.00 billion yen)
(Note 3) LTV at end of period (%): interest-bearing debt/total assets at end of period x 100 (total assets at the end of the 23rd fiscal period: 409.7 billion yen)
(Note 4) 	Average maturity of long-term interest-bearing debt is arrived at by calculating a weighted average of maturities from the end of the 23rd fiscal period to the repayment deadlines forlong-term interest-bearing debt with repayment periods of more than one year, based on the balance of each debt.

(3) Additional Offerings, etc.
The table below indicates additional offerings, etc. JPR has conducted since inception through the 23rd fiscal period.
Date

September 14, 2001

Event

Established by private placement

Number of Units Outstanding

Unitholders' Capital (million yen)

Variation

Variation

Balance

240

Balance

240

120

120

Remarks(Note 1)

November 16, 2001

Additional private placement

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

Split of investment units

93,360155,600–

31,120(Note 3)June 14, 2002

Initial public offering

134,000

289,600

25,862

56,982(Note 4)

July 15, 2003

Additional public offering

134,400

424,000

30,75887,740(Note 5)

August 9, 2003

Third-party allotment

6,000

430,000

1,373

89,113(Note 6)

February 1, 2005

Additional public offering

95,000525,000

25,001

114,115(Note 7)

March 1, 2005

Third-party allotment

5,000

530,000

1,315

115,431(Note 8)February 6, 2007

Additional public offering

90,000620,000

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

Third-party allotment

5,000

625,000

2,173

156,725(Note 10)February 8, 2010

Additional public offering

82,000707,000

13,315170,040(Note 11)

March 12, 2010

Third-party allotment

8,000

715,000

1,299

171,339(Note 12)

101,420

816,420

19,089190,429(Note 13)8,580

825,000

1,614

192,044(Note 14)

July 30, 2012

Additional public offering

August 29, 2012

Third-party allotment(Note 1)	JPR was formed by the investment of three companies Tokyo Tatemono Co., Ltd. (100 units), Taisei Corporation (100 units), and Tokyo Realty Investment Management, Inc. (40 units)
at 500,000 yen per unit.
(Note 2) An additional offering was made via private placement at 500,000 yen per unit. JPR then acquired 13 beneficiary interests in real estate trust and started management.
(Note 3) A single investment unit was split into 2.5 units.
(Note 4)	New investment units were issued through a public offering at 200,000 yen per unit (underwriting price of 193,000 yen per unit) to repay short-term debt, finance the acquisition of new
specific assets, etc.
(Note 5) New investment units were issued through a public offering at 237,160 yen per unit (underwriting price of 228,859 yen per unit) to repay short-term debt, acquire new specific assets, etc.
(Note 6) New investment units were issued through a third-party allotment at 228,859 yen per unit to repay short-term debt, acquire new specific assets, etc.
(Note 7) New investment units were issued through a public offering at 272,440 yen per unit (underwriting price of 263,177 yen per unit) to repay short-term debt, acquire new specific assets, etc.
(Note 8) New investment units were issued through a third-party allotment at 263,177 yen per unit to repay short-term debt, acquire new specific assets, etc.
(Note 9) New investment units were issued through a public offering at 449,820 yen per unit (underwriting price of 434,673 yen per unit) to repay debt, acquire new specific assets, etc.
(Note 10) New investment units were issued through a third-party allotment at 434,673 yen per unit to repay debt, acquire new specific assets, etc.
(Note 11) 	New investment units were issued through a public offering at 168,101 yen per unit (underwriting price of 162,382 yen per unit) to repay short-term debt, redeem investment corporation
bonds, acquire new specific assets, etc.
(Note 12) New investment units were issued through a third-party allotment at 162,382 yen per unit to repay short-term debt, redeem investment corporation bonds, acquire new specific assets, etc.
(Note 13) 	New investment units were issued through a public offering at 194,610 yen per unit (underwriting price of 188,222 yen per unit) to partly fund acquisition of new specific assets and repay
debts.
(Note 14) New investment units were issued through a third-party allotment at 188,222 yen per unit to partly fund acquisition of new specific assets and repay debts.

36

Japan Prime Realty Investment Corporation(4) Cash Distribution
With regard to the cash distributions, JPR decided to distribute part of the retained earnings brought forward that had been internally reserved
through the 22nd fiscal period, with the aim of having the profit distributions deducted as expenses based on application of the special provision on
taxation of investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation) and in order to minimize the burden tounitholders incurred by accrual of corporate income tax, etc. As a result, the cash distribution per unit came to 6,031 yen for the 23rd fiscal period.
(Thousands of yen unless otherwise indicated)
Fiscal Period

Breakdown

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

19th Fiscal Period 20th Fiscal Period 21st Fiscal Period 22nd Fiscal Period 23rd Fiscal Period(Jan. 1, 2011 - Jun. (Jul. 1, 2011 - Dec. (Jan. 1, 2012 - Jun. (Jul. 1, 2012 - Dec. (Jan. 1, 2013 - Jun.
30, 2011)
31, 2011)
30, 2012)
31, 2012)
30, 2013)

4,038,287
26,422
4,011,865(5,611 yen)
4,011,865(5,611 yen)–(-yen)

4,226,806
25,4664,201,340(5,876 yen)
4,201,340(5,876 yen)–(-yen)

4,622,149
24,6994,597,450(6,430 yen)
4,597,450(6,430 yen)–(-yen)

5,050,424
23,6995,026,725(6,093 yen)
5,026,725(6,093 yen)–(-yen)

4,998,468
22,893
4,975,575(6,031 yen)
4,975,575(6,031 yen)–(-yen)(5) Future Management Policies and Vital Issues
As for the prospects of the Japanese economy, expectations are placed on the emergency economic measures proving effective as well as private
capital investment increasing in line with the recovery of corporate performances. Whether the economic recovery, which has been preceded by
expectations, will turn out to be a continuous recovery in the economy accompanied by actual demand will require monitoring.
In the office property leasing market, the general recovery in the market situation will presumably be a modest one, as polarization by property willfurther advance even though the supply and demand condition will continue to improve. In Osaka, despite relatively solid demand for office spaces,
the supply and demand balance worsened as multiple large-scale redevelopment properties were supplied; it will take a certain amount of time forthe situation to recover on a full scale.
When conducting real estate transactions in the market where polarization of earnings by property will further advance, it is likely to become
increasingly important to discern the growth potential of earnings of respective properties.
Currently, REITs are positioned as powerful buyers of properties. However, their ability to procure funds will be largely affected by the interest ratelevels. As such, it will be required to keep attentive monitoring of the future trends in interest rates.

1) Acquisition of New Properties and Asset Replacement
	JPR will continue to make investment focused on the Tokyo office properties, with an aim to improve the quality of its portfolio and enhance its
growth potential in the recovery cycle of the market. Real estate transactions are heading for expansion, as a decrease in purchase cap rate andexpected cap rate levels has been observed along with increasing expectations for recovery in the rental office property market conditions, andwe believe property supply to the transaction market will increase going forward. As for retail properties as well as office properties in regional
cities, which allow us to expect higher yields than the Tokyo office properties, JPR will work to invest in strictly selected blue-chip properties
that can keep stable revenues at a certain level in order to complement the stability of earnings from the entire portfolio. JPR will strive toacquire new properties under reasonable terms by negotiating prices based on detailed market studies and property due diligence in considering
properties.
	JPR will continue to make investment decisions after a proactive collection of information through such sources as sponsors of the AssetManager, accurately grasping market trends and carefully researching investment value, including the future potential of candidate properties.
	Moreover, JPR will continue to investigate asset replacement, centering on properties that do not allow us to expect sustainable growth in the
future or those that may be sold under better terms and conditions.

2) Management of Portfolio
	JPR will aim to secure stable earnings over the medium to long term by working to prevent move-outs of existing tenants and encourage themto expand office spaces in the same buildings through endeavors to enhance tenant satisfaction, while continuously inviting new tenants throughstrategic leasing activities. Specifically, JPR will conduct management and operations based on the following policies:		 - Strengthen coordination with property management companies and respective tenant brokers
		 - Propose leasing terms and conditions in anticipation of the recovery in the leasing market and accelerate decision making
		 - Conduct strategic value enhancement works with the intent to improve property earnings and tenant satisfaction- Reinforce responses to energy saving, business continuity plans and other matters commanding high social requests

37

III. Asset Management Report(6) Fund Procurement
JPR's fundamental policy for fund procurement calls for an efficient combination of long-term steady fund procurement and short-term fundprocurement that emphasizes dynamism. In line with this policy, JPR will procure funds through unsecured and unguaranteed bank borrowings aswell as the issuance of investment corporation bonds. JPR will continue to focus on the diversification of fund procurement means and consistently
strive to diversify maturities.

(7) Information Disclosure
JPR has positioned the proactive voluntary disclosure of information as one of its key management policies and will voluntarily disclose
information believed to be essential to investment decisions concerning JPR, along with the timely disclosure of items to the Tokyo Stock Exchange.
JPR is proactively employing its website (http://www.jpr-reit.co.jp/jpr_e/) as well as its specified website for retail investors (http://www.jpr-reit.
co.jp/kojin/index.html (Japanese only)) as a vital means for implementing voluntary disclosure, and JPR has promptly disclosed performance
information and has provided videos on its primary properties using this site. We are committed to further enriching our information disclosure
activities.

(8) Significant Subsequent Events
There is no relevant matter.

38

Japan Prime Realty Investment Corporation

2. Overview of the Investment Corporation(1) Unitholders’ Capital
19th Fiscal Period as ofJune 30, 2011

20th Fiscal Period as ofDecember 31, 2011

21st Fiscal Period as ofJune 30, 2012

22nd Fiscal Period as ofDecember 31, 2012

23rd Fiscal Period as ofJune 30, 2013

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

715,000

715,000

715,000

825,000

825,000

171,339
14,576

171,339
14,513

171,339
14,148

192,044
14,525

192,044
13,965

Total number of authorized units
Total number of units issued andoutstanding
Unitholders' capital (millions of yen)
Total number of unitholders(2) Matters Related to Investment Units (Primary Investors)
The following table shows the 10 largest investors according to the percentage of their owned investment units to the total number of units
outstanding as of the end of the 23rd fiscal period.
Number of
Owned Units

Percentage ofTotal Units
Outstanding(%)

1-8-11 Harumi, Chuo-ku, Tokyo
2-11-3 Hamamatsucho, Minato-ku, Tokyo

175,60344,64421.28
5.41

2-2-2 Otemachi, Chiyoda-ku, Tokyo

44,503

5.39

Trust & Custody Services Bank, Ltd. (Securities Investment Harumi Island Triton Square Office Tower Z Building
Trust Account)
1-8-12 Harumi, Chuo-ku, Tokyo

43,329

5.25

Tokyo Tatemono Co., Ltd.
Kawasaki Gakuen
Meiji Yasuda Life Insurance Company

29,30025,00024,000

3.55
3.03
2.90

21,733

2.63

11,0091.33

10,0651.22

429,186

52.02

Name

Address

Japan Trustee Services Bank, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Nomura Trust and Banking Co., Ltd. (Investment
Trust Account)

Nomura Bank (Luxembourg) S. A. (Standing Proxy:
Sumitomo Mitsui Banking Corporation)
State Street Bank and Trust Company (Standing Proxy:
The Hongkong and Shanghai Banking Tokyo Branch)
SIX SIS LTD. (Standing Proxy: The Bank of Tokyo
Mitsubishi UFJ, Ltd.)

1-9-9 Yasesu, Chuo-ku, Tokyo
577 Matsushima, Kurashiki-shi, Okayama
2-1-1 Marunouchi, Chiyoda-ku, Tokyo
Batiment A, 33, Rue de Gasperich, L-5826, Luxembourg(1-2-3 Otemachi, Chiyoda-ku, Tokyo)
P. O. Box 351, Boston, Massachusetts 02101 U. S. A.
(3-11-1 Nihonbashi, Chuo-ku, Tokyo)
Baslerstrasse 100, CH-4600, Olten, Switzerland(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)

Total(Note) Percentage of total units outstanding is rounded off to the second decimal place.

(3) Items Related to Directors
A. The Executive Officer, Supervising Officers and Independent Auditors as of the end of the 23rd fiscal period are as
follows.
Position

Executive Officer

Supervising Officers (Note 1)

Name

Other Current Assignments

Total Directors'
Fee during the23rd Fiscal Period(thousands of yen)

Numberof Owned
Units

Hirohito Kaneko

Representative Counsel, Hirohito Kaneko Law Office

2,400

–

Sosuke Yasuda

Adviser, Gyosei Audit Corporation
Group representative partner, GYOSEI Certified
Public Tax & Accountants’ Co.
Outside Auditor, Nomura Research Institute, Ltd.
(part-time)
Outside Auditor, MS&AD Insurance Group Holdings(part-time)

4,200

–

Masato Denawa

Partner Attorney, Spring Partners

Ernst & Young
Independent Auditor (Note 2)
ShinNihon LLC––
16,200–(Note 1) Supervising officers may be directors of corporations other than those indicated above, but have no conflict of interest with JPR at those and the above positions.
(Note 2) 	The independent auditor fees include fees regarding auditing of JPR’s English financial statements and fees regarding preparation of comfort letters for issuance of investment corporation
bonds.

B. Policy on Dismissing and Deciding Not to Reappoint the Independent Auditor
The dismissal of independent auditors shall be considered in accordance with the designations of the Investment Trust Act. The decision to notreappoint the auditor shall be studied at JPR’s Board of Directors Meetings following comprehensive consideration of circumstances including
audit quality, audit fee and other various conditions.

39III. Asset Management Report(4) Asset Manager, Asset Custodian and Administrative Agent
The asset manager, asset custodian and administrative agents of JPR at the end of the 23rd fiscal period are as follows.
Outsourcing Category

Name

Asset management company
Tokyo Realty Investment Management, Inc.
Asset custodian
Mizuho Trust & Banking Co., Ltd.
Administrative agent (administration, etc. concerning unitholders' list, etc.) Mizuho Trust & Banking Co., Ltd.
Mizuho Trust & Banking Co., Ltd.
Mizuho Corporate Bank, Ltd. (presently Mizuho Bank, Ltd.)
Merrill Lynch Japan Securities Co., Ltd.
Administrative agent (administration concerning corporate bonds)
Mizuho Securities Co., Ltd.
Shinkin Securities Co., Ltd.
Nomura Securities Co., Ltd.

3. Status of JPR’s Assets Under Management(1) JPR’s Asset Structure
Asset TypeReal estate

Real estate in trust

Area

Central Tokyo
Greater Tokyo
Other Cities
Central Tokyo
Greater Tokyo
Other Cities

Deposits and other assets
Total assets––

22nd Fiscal Period(as of December 31, 2012)
Assets owned by JPR
Percentage of total assets(thousands of yen)(%)

80,527,907
63,605,799
22,225,682
126,035,548
43,885,908
44,237,996
21,465,473(–)
401,984,316(380,518,842)

23rd Fiscal Period(as of June 30, 2013)
Assets owned by JPR
Percentage of total assets(thousands of yen)
(%)

20.0
15.8
5.5
31.4
10.9
11.0
5.3
(–)
100.0
(94.7)

80,640,667
62,240,380
22,051,788
125,720,443
51,343,259
44,090,258
23,628,900(–)
409,715,697(386,086,796)

19.7
15.2
5.4
30.7
12.5
10.8
5.8
(–)
100.0
(94.2)(Note 1) Total assets owned are based on the amounts appropriated on the balance sheet as of the end of the fiscal period (book values after depreciation for real estate and real estate in trust).
(Note 2) Figures in parenthesis are portions that practically fall on real estate owned in the object assets.

(2) Major Assets Owned by JPR
The following is an overview of the major assets (ten largest properties by book value at end of period) owned by JPR as of the end of the 23rd
fiscal period.

Property Name

The Otemachi Tower(Land with Leasehold Interest)

Book Value(thousands of yen)

Leasable Floor
Space (m2)

Leased Floor Space(m2)

38,388,259

11,034.78

11,034.78

Occupancy Rate
(%)

100.0

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

12.5

Asset Class

OfficeOlinas Tower

29,574,967

23,987.40

23,769.88

99.1

7.1

OfficeShinjuku Center Bldg.

21,974,636

8,863.98

7,944.81

89.6

3.2

OfficeBYGS Shinjuku Bldg.

15,720,719

15,196.08

15,022.56

98.9

3.9

OfficeJPR Sendagaya Bldg.

15,209,889

6,177.74

6,177.74

100.0

2.0

OfficeKanematsu Bldg.

14,809,990

7,994.02

7,994.02

100.0

2.8

OfficeKawasaki Dice Bldg.

14,301,778

13,066.69

12,911.37

98.8

2.9

RetailJPR Umeda Loft Bldg.

12,541,505

18,586.97

18,586.97

100.0

3.0

RetailJPR Shibuya Tower Records
Bldg.

11,636,159

8,076.85

8,076.85

100.0

2.6

RetailYakuin Business Garden

11,324,229

16,654.33

16,644.71

99.9

3.0

Office185,482,135

129,638.84

128,163.69

98.9

42.8

Total

(Note 1) Rate of monthly contracted rent at end of period is the rate arrived at by dividing the monthly contracted rent at end of period for each property by the total rents for all properties.
(Note 2) 	The tenants of Shinjuku Center Bldg. and Kawasaki Dice Bldg. have sublet space to a sub-lessee and a lease agreement has been executed where the rent paid by the tenant fluctuatesin accordance with the lease conditions of the sub-lessee. Therefore, the leasable floor space, leased floor space and occupancy rate entered for each of these buildings are the figuresconcerning the sub-lessee of the tenant.

40

Japan Prime Realty Investment Corporation(3) Itemized Portfolio Assets
The following table provides overview of the real estate properties and beneficiary interests in real estate owned by JPR as of the end of the 23rd
fiscal period (June 30, 2013).

OfficeOfficeOfficeRetailOther Cities

RetailGreater Tokyo

RetailCentral Tokyo

Area Type

Property Name
Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
Fukuoka Bldg.
Fukuoka Bldg. (additional acquisition in 7th period)
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
Shinjuku Square Tower(additional acquisition in 14th period)
BYGS Shinjuku Bldg.
Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.
Minami Azabu Bldg.
Shinagawa Canal Bldg.
Rokubancho Bldg.
JPR Harajuku Bldg.
Tokyo Tatemono Kyobashi Bldg.
JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
The Otemachi Tower (Land with Leasehold Interest)
JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg. (Yurakucho Itocia)
Arca East
JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.
JPR Ueno East Bldg.
Tachikawa Business Center Bldg.
Tachikawa Business Center Bldg.
(additional acquisition in 11th period)
Rise Arena Bldg.
Yume-ooka Office Tower
Olinas Tower
Tokyo Tatemono Yokohama Bldg.
Omiya Prime East
Tanashi ASTA
Cupo-la Main Bldg.
JPR Musashikosugi Bldg.
Musashiurawa Shopping Square
Kawasaki Dice Bldg.
Niigata Ekinan Center Bldg.
Tokyo Tatemono Honmachi Bldg.
JPR Hakata Bldg.
JPR Naha Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Dojima Bldg.
JPR Hakata-chuo Bldg.
JPR Nagoya Fushimi Bldg.
Yakuin Business Garden
JPR Umeda Loft Bldg.
Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
JPR Chayamachi Bldg.
Total

Location
14-1 Kyobashi 2-chome, Chuo-ku, Tokyo
17-5 Kyobashi 2-chome, Chuo-ku, Tokyo
17-4 Nihonbashi Ningyocho 1-chome, Chuo-ku, Tokyo
3-3 Kojimachi 4-chome, Chiyoda-ku, Tokyo
21-4, etc., Kanda-Nishikicho 3-chome, Chiyoda-ku, Tokyo
13-23 Shibaura 4-chome, Minato-ku, Tokyo
8-1 Nishi-Gotanda 2-chome, Shinagawa-ku, Tokyo
8-7 Yaesu 2-chome, Chuo-ku, Tokyo
7-15 Kudan-Minami 4-chome, Chiyoda-ku, Tokyo
17-1 Higashi-Gotanda 2-chome, Shinagawa-ku, Tokyo
22-1 Nishi-Shinjuku 6-chome, Shinjuku-ku, Tokyo
19-1 Shinjuku 2-chome, Shinjuku-ku, Tokyo
16-14 Shinkawa 1-chome, Chuo-ku, Tokyo
25-1 Nishi-Shinjuku 1-chome, Shinjuku-ku, Tokyo
12-3 Minami-Azabu 2-chome, Minato-ku, Tokyo
12-33 Konan 2-chome, Minato-ku, Tokyo
2-9, etc., Rokubancho, Chiyoda-ku, Tokyo
17-11 Jingumae 6-chome, Shibuya-ku, Tokyo
6-18 Kyobashi 3-chome, Chuo-ku, Tokyo
11-12 Nihonbashi-Horidomecho 1-chome, Chuo-ku, Tokyo
23-5 Sendagaya 4-chome, Shibuya-ku, Tokyo
6-1 Ginza 4-chome, Chuo-ku, Tokyo
6-6, etc., Otemachi 1-chome, Chiyoda-ku, Tokyo
22-14 Jinnan 1-chome, Shibuya-ku, Tokyo
20-5 Daikanyamacho, Shibuya-ku, Tokyo
32-13 Jingumae 4-chome, Shibuya-ku, Tokyo
1-25, Shinjuku 3-chome, Shinjuku-ku, Tokyo
7-1 Yurakucho 2-chome, Chiyoda-ku, Tokyo
2-1 Kinshi 3-chome, Sumida-ku, Tokyo
1-7, etc., Shinmachi, Chuo-ku, Chiba, Chiba
17 Nihon-Odori, Naka-ku, Yokohama, Kanagawa
19-5, etc., Shinyokohama 3-chome, Kohoku-ku, Yokohama, Kanagawa
1-8 Honcho 4-chome, Kawaguchi, Saitama
3-5 Matsugaya 1-chome, Taito-ku, Tokyo
38-5 Akebonocho 2-chome, Tachikawa, Tokyo

Form of OwnershipBeneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Real estate
Beneficiary interest
Beneficiary interest
Beneficiary interest
Real estateBook Value As of
Appraisal Value as ofJune 30, 2013
June 30, 2013
(thousands of yen)(thousands of yen) (Note)
14,809,990
11,700,000
2,458,010
2,250,000
1,980,195
2,200,000
2,398,551
2,970,000
3,421,259
3,090,000
10,858,250
11,300,000
2,683,160
2,700,000
1,773,904
2,790,000
1,141,782
5,281,239
4,660,000
3,085,398
4,370,000
8,814,573
7,361,000
177,302

Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Beneficiary interest
Real estate
Beneficiary interest
Real estate
Real estate
Beneficiary interest
Beneficiary interest
Real estate
Beneficiary interest
Real estate
Real estate
Beneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Beneficiary interest
Real estate
Beneficiary interest

15,720,719
613,863
21,974,636
3,930,851
1,810,289
2,893,834
8,728,974
5,244,204
5,068,243
15,209,889
3,637,070
38,388,259
11,636,159
2,197,589
4,334,271
2,717,355
3,371,277
4,547,971
2,395,259
2,639,515
1,489,911
7,147,644
3,094,556
783,132

Real estate

2,190,871

5-2 Higashi-Ikebukuro 4-chome, Toshima-ku, Tokyo
Real estate
6-1 Kamiooka Nishi 1-chome, Konan-ku, Yokohama, Kanagawa
Real estate
1-3 Taihei 4-chome, Sumida-ku, Tokyo
Real estate
5-10 Kitasaiwai 1-chome, Nishi-ku, Yokohama, Kanagawa
Real estate
1-1, etc., Shimocho 2-chome, Omiya-ku, Saitama, Saitama
Beneficiary interest
1-1 Tanashicho 2-chome, Nishitokyo, Tokyo
Beneficiary interest
1-1 Kawaguchi 1-chome, Kawaguchi, Saitama
Real estate420-1,etc., Kosugimachi 3-chome, Nakahara-ku, Kawasaki, Kanagawa
Real estate
3-1 Bessho 7-chome, Saitama, Saitama
Beneficiary interest
8-3, etc., Ekimae-Honcho, Kawasaki, Kanagawa
Beneficiary interest
24 Yoneyama 1-chome, Chuo-ku, Niigata, Niigata
Beneficiary interest
4-8 Honmachi 3-chome, Chuo-ku, Osaka, Osaka
Beneficiary interest
4-4 Hakataeki-mae 1-chome, Hakata-ku, Fukuoka, Fukuoka
Beneficiary interest
1-19 Matsuyama 1-chome, Naha, Okinawa
Beneficiary interest
7-35 Tsutsujigaoka 3-chome, Miyagino-ku, Sendai, Miyagi
Beneficiary interest
31-1, etc., Misonocho 3-chome, Wakayama, Wakayama
Beneficiary interest
3-38 Tenjin 1-chome, Chuo-ku, Fukuoka, Fukuoka
Beneficiary interest
1-23 Sonezaki-Shinchi 2-chome, Kita-ku, Osaka, Osaka
Beneficiary interest
6-12 Hakataeki-mae 2-chome, Hakata-ku, Fukuoka, Fukuoka
Beneficiary interest
24-15 Sakae 1-chome, Naka-ku, Nagoya, Aichi
Real estate
1-1 Yakuin 1-chome, Chuo-ku, Fukuoka, Fukuoka
Real estate16-7 Chayamachi, Kita-ku, Osaka, Osaka
Beneficiary interest
2-11 Minami-Senba 4-chome, Chuo-ku, Osaka, Osaka
Beneficiary interest
2-2 Higashi-Kawasakicho 1-chome, Chuo-ku, Kobe, Hyogo
Real estate
2-19 Chayamachi, Kita-ku, Osaka, Osaka
Beneficiary interest

5,531,192
5,801,159
29,574,967
6,958,109
6,287,358
7,721,627
1,872,249
7,217,274
4,029,059
14,301,778
1,781,172
4,145,290
3,160,029
1,419,849
2,346,606
1,279,412
2,273,348
2,134,764
1,781,703
4,144,956
11,324,229
12,541,505
5,224,126
6,582,601
6,002,450
386,086,796

13,400,000
813,000
12,800,000
2,290,000
1,800,000
3,120,000
6,760,000
4,580,000
5,760,000
10,600,000
3,250,000
36,800,000
12,300,000
1,450,000
3,320,000
2,440,000
2,670,000
5,980,000
1,640,000
2,380,000
1,730,000
7,400,000
4,420,000
2,890,000
6,240,000
5,240,000
32,700,000
6,880,000
6,270,000
12,500,000
2,540,000
5,140,000
3,990,000
14,400,000
2,180,000
3,220,000
2,780,000
1,370,000
3,280,000
1,580,000
2,060,000
2,090,000
1,640,000
2,800,000
11,300,000
13,600,000
4,360,000
6,460,000
4,610,000
365,214,000(Note) 	The appraisal values at end of period are either appraisal values or survey values by real estate appraisers, based on the Cabinet Office Order on “Regulations on calculations of investment
corporations.”41III. Asset Management Report

The following table provides changes in rental business results for each of JPR’s real estate properties and beneficiary interests in real estate.
22nd Fiscal Period (from Jul. 1, 2012 to Dec. 31, 2012)

OfficeType

OfficeOfficeRetailOther Cities

RetailGreater Tokyo

RetailCentral Tokyo

Area

Property Name

Number ofRate at Period
Tenants at Period Occupancy
End (%)
End

Rental Revenues
throughout Period(thousands of yen)

23rd Fiscal Period (from Jan. 1, 2013 to Jun. 30, 2013)

Number of
Ratio to Total Rental Tenants
Rate at Period
at Period Occupancy
Revenues (%)
End (%)
End

Rental Revenues
throughout Period(thousands of yen)

Ratio to Total Rental
Revenues (%)

Kanematsu Bldg.

10

100.0

357,220

2.8

10

100.0

365,544

2.8

Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
Shin-Kojimachi Bldg.
(additional acquisition in 2nd period)
Shin-Kojimachi Bldg.
(additional acquisition in 6th period)
JPR Crest Takebashi Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
Fukuoka Bldg.
Fukuoka Bldg.
(additional acquisition in 7th period)
JPR Ichigaya Bldg.
Oval Court Ohsaki Mark West
Shinjuku Square Tower
Shinjuku Square Tower(additional acquisition in 14th period)
BYGS Shinjuku Bldg.
Across Shinkawa Bldg. Annex
Shinjuku Center Bldg.
Minami Azabu Bldg.
Shinagawa Canal Bldg.
Rokubancho Bldg.
JPR Harajuku Bldg.

1
5

100.0
100.0
100.0

(Note 2)
61,42376,240(Note 2)
0.5
0.6

1
4

100.0
100.0

(Note 2)
63,883(Note 2)
0.5

78.6

19,037

0.1

15

100.0

99,340

0.7

32.4

659

0.0

58.5
93.2
100.0
100.0

63,452404,818
136,987(Note 2)

0.5
3.1
1.1
(Note 2)

6
7
2

70.6
93.2
100.0
100.0

70,725356,555
131,419(Note 2)

0.5
2.7
1.0
(Note 2)100.0

(Note 2)

(Note 2)100.0

(Note 2)

(Note 2)

100.0
100.0
94.0

173,734
180,287
195,681

1.3
1.4
1.5

100.0
100.0
100.0

163,324
178,310
184,459

1.2
1.3
1.4

94.0

3,006

0.0

100.0

2,834

0.0

23
4
25
0
4
1
9

97.3
100.0
92.5
0.0
100.0
100.0
100.0

538,555
37,508440,956–
67,717(Note 2)
199,084

4.2
0.3
3.4
0.0
0.5
(Note 2)
1.5

24
4
29
0
4
1
8

98.9
100.0
89.6
0.0
89.9
100.0
98.1

546,651
39,701
441,255
5
62,276(Note 2)
208,392

4.1
0.3
3.3
0.0
0.5
(Note 2)
1.6

Tokyo Tatemono Kyobashi Bldg.

2

100.0

(Note 2)

(Note 2)2100.0(Note 2)

(Note 2)

JPR Nihonbashi-horidome Bldg.
JPR Sendagaya Bldg.
Ginza Sanwa Bldg.
The Otemachi Tower(Land with Leasehold Interest)
JPR Shibuya Tower Records Bldg.
JPR Daikanyama
JPR Jingumae 432
Shinjuku Sanchome East Bldg.
Yurakucho Ekimae Bldg.(Yurakucho Itocia)
Arca East
JPR Chiba Bldg.
JPR Yokohama Nihon Odori Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.

7
6
8

100.0
94.1
100.0

179,262
248,531108,903

1.4
1.9
0.8

7
6
8

100.0
100.0
100.0

185,498
244,790
116,486

1.4
1.8
0.9

1

100.0

1,408,500

10.9

1

100.0

1,439,171

10.8

1
3
6
1
1
4
36
13
13
37

100.0
76.5
100.0
100.0
100.0
77.5
89.4
100.0
80.6
77.8

(Note 2)
31,686
74,795(Note 2)
(Note 2)
216,562
115,133
131,830
51,039328,551(Note 2)0.2
0.6
(Note 2)
(Note 2)
1.7
0.9
1.0
0.4
2.5

1
3
6
1
1
5
39
13
14
41

100.0
76.5
100.0
100.0
100.0
93.1
95.1
100.0
85.1
92.9

(Note 2)28,36089,478(Note 2)
(Note 2)226,951
122,356
129,936
71,016
338,039(Note 2)0.2
0.7
(Note 2)
(Note 2)
1.7
0.9
1.0
0.5
2.5

JPR Ueno East Bldg.

7

7

Tachikawa Business Center Bldg.
Tachikawa Business Center Bldg.
(additional acquisition in 11th period)
Rise Arena Bldg.
Yume-ooka Office Tower
Olinas Tower
Tokyo Tatemono Yokohama Bldg.
Omiya Prime East
Tanashi ASTA
Cupo-la Main Bldg.
JPR Musashikosugi Bldg.
Musashiurawa Shopping Square
Kawasaki Dice Bldg.
Niigata Ekinan Center Bldg.
Tokyo Tatemono Honmachi Bldg.
JPR Hakata Bldg.
JPR Naha Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Tenjin 121 Bldg.
JPR Dojima Bldg.
JPR Hakata-chuo Bldg.
JPR Nagoya Fushimi Bldg.
Yakuin Business Garden
JPR Umeda Loft Bldg.
Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
JPR Chayamachi Bldg.
Total

12

5
7
2
1
9
3
24

17
1
32
11
13
–
1
1
1
3
20
8
9
27
16
13
12
16
8
5
3
17
1
1
1
6
534

94.3

160,810

1.2

100.0

59,322

0.5

96.3

93,601

0.7

100.0
86.9
92.7
100.0
–
100.0
100.0
100.0
100.0
98.8
100.0
77.6
90.5
80.8
98.4
84.9
100.0
100.0
100.0
89.7
99.9
100.0
100.0
100.0
100.0
94.9

(Note 2)
311,513
999,168
302,589–(Note 2)
(Note 2)
(Note 2)129,061
470,658
127,564
146,599
137,764
76,449192,530
104,175
95,343
120,388
80,822
117,937
358,308(Note 2)
(Note 2)
(Note 2)
137,387
12,963,538(Note 2)
2.4
7.7
2.3
–
(Note 2)
(Note 2)
(Note 2)
1.0
3.6
1.0
1.1
1.1
0.6
1.5
0.8
0.7
0.9
0.6
0.9
2.8
(Note 2)
(Note 2)
(Note 2)
1.1
100.0

1
9
3
26

18
1
32
10
14
4
1
1
1
3
20
8
10
30
19
13
12
16
7
5
3
18
1
1
1
6
564

94.3

161,409

1.2

100.0

58,8260.4

100.0

89,990

0.7

100.0
91.3
99.1
100.0
100.0
100.0
100.0
100.0
100.0
98.8
100.0
94.9
94.0
93.2
95.3
98.3
100.0
83.6
100.0
89.7
99.9
100.0
100.0
100.0
100.0
96.9

(Note 2)
313,4291,020,694
297,704
145,286(Note 2)
(Note 2)
(Note 2)
129,222479,832
127,810147,040
141,758
76,662
183,731
98,672
98,76592,75480,294
128,462
471,730(Note 2)
(Note 2)
(Note 2)
135,829
13,278,813(Note 2)
2.4
7.7
2.2
1.1
(Note 2)
(Note 2)
(Note 2)
1.0
3.6
1.0
1.1
1.1
0.6
1.4
0.7
0.7
0.7
0.6
1.0
3.6
(Note 2)
(Note 2)
(Note 2)1.0
100.0

(Note 1) 	The number of tenants at end of period is counted as follows except for Shinjuku Square Tower, Shinjuku Center Bldg., Rise Arena Bldg. and Kawasaki Dice Bldg.: when a single tenantleases multiple rooms, it is counted as one if the tenant uses the same property. If the leased rooms are in multiple buildings, the tenant is counted in plural.
	The tenants of Shinjuku Square Tower, Shinjuku Center Bldg., Rise Arena Bldg. and Kawasaki Dice Bldg. have sublet space to sublessees and lease agreements have been executed where therent paid by the tenants fluctuates in accordance with the lease conditions of the sublessees and thus the numbers of sublessees have been entered as the numbers of tenants.
(Note 2) 	JPR does not disclose the rental revenues of the properties throughout the period and their ratio to total rental revenues due to inevitable reasons.

42

Japan Prime Realty Investment Corporation(4) Status of Other Assets
Beneficiary interests with real estate as major entrusted properties have been entered under (3) Itemized Portfolio Assets above.
There is no incorporation of main specific assets which are main investment targets of JPR other than those listed under (3) above as of the end of
the 23rd fiscal period.

4. Capital Expenditures of Owned Real Estate(1) Planned Capital Expenditures
The following are major items of capital expenditures for currently planned renovations, etc. for JPR-owned real estate and entrusted real estate
regarding beneficiary interests in real estate. Furthermore, the planned construction expenses include portions that are classified as expenses inaccounting.

Property Name

Location

PurposeScheduleof toilets and commonMinato Ward, Tokyo Replacement
use corridors

MS Shibaura Bldg.

Planned (millions of yen)
Payment
duringAmountTotal
the 23rd
Already
Value
FiscalPaid
PeriodJan. 2013 ~ Aug. 2013

155

3

–

Renovation of common-use andexclusive areas

Jul. 2013 ~ Aug. 2013

152

–

–

Replacement of air conditioning units

May 2013 ~ Sep. 2013

105

–

–

Kawasaki Dice Bldg.

Fukuoka City,
Fukuoka
Kawasaki City,
Kanagawa

Refurbishment and value enhancement Sep. 2013 ~ Oct. 2013

84

–

–

JPR Dojima Bldg.

Osaka City, Osaka

2nd phase of replacement of air
conditioning units

Jul. 2013 ~ Dec. 2013

73

–

–

MS Shibaura Bldg.

Minato Ward, Tokyo Renewal of humidifier units

Sep. 2013 ~ Dec. 2013

61

–

–

JPR Harajuku Bldg.

Shibuya Ward, Tokyo Replacement of exterior walls

Aug. 2013 ~ Dec. 2013

40

–

–

Tokyo Tatemono Kyobashi Bldg. Chuo Ward, TokyoJPR Hakata-chuo Bldg.

Fukuoka Bldg.
(additional acquisition in 7th period) Chuo Ward, Tokyo

1st phase of replacement of air
conditioning units, etc.

Jul. 2013 ~ Dec. 2013

34

–

–

Tokyo Tatemono Honmachi Bldg. Osaka City, Osaka

Renewal of central monitor boards

Oct. 2013 ~ Dec. 2013

32

–

–

(2) Capital Expenditures during the 23rd Fiscal Period
The following are the capital expenditure amounts JPR invested in real estate and entrusted real estate during the 23rd fiscal period.
Among major capital expenditures, JPR conducted replacement of air conditioning units to maintain and enhance tenant satisfaction, as well as
renovation of common-use areas and installation of office automation floors for leased offices with the aim of attracting new tenants. In addition,
aside from these constructions, JPR conducted construction of 249 million yen (Note), which was appropriated as expenditures for repair andmaintenance.
Property Name

Location

Construction
Expenses(millions of yen)

Purpose

PeriodOsaka City, Osaka

1st phase of replacement of air conditioning units

May 2013 ~ Jun. 201389

Minami Azabu Bldg.

Minato Ward, Tokyo

Replacement of air conditioning units

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo 3rd phase of renewal of passenger elevators

JPR Dojima Bldg.

Jun. 2013 ~ Jun. 2013

79

Jul. 2011 ~ Mar. 201371

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo 4th and 5th phases of replacement of toilets

Aug. 2012 ~ Jun. 201364

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo 2nd phase of replacement of substation facilities

Oct. 2011 ~ Mar. 2013

42

Repair of common areas, installation of office automation floors, replacement of
air conditioning units, etc.

246

Other Properties

Total

594

(Note)	Expenditures for repair and maintenance included 5 million yen of construction management fees paid to construction management companies as well as the amounts for repair andmaintenance constructions themselves.

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

19th Fiscal Period(Jan. 1, 2011 Jun. 30, 2011)

20th Fiscal Period(Jul. 1, 2011 Dec. 31, 2011)

21st Fiscal Period(Jan. 1, 2012 Jun. 30, 2012)

22nd Fiscal Period(Jul. 1, 2012 Dec. 31, 2012)

23rd Fiscal Period(Jan. 1, 2013 Jun. 30, 2013)

Balance of deposits at beginning of current period

737

767

764

799

810

Deposits during the period

404

389

410

376

376

Amounts used from deposits during the period

374

410

357

365

370

Deposits carried forward to the next period

767

746

799

810

816

43

III. Asset Management Report

5. Expenses and Liabilities(1) Details of Expenses Related to Management
Item

22nd Fiscal Period (Jul. 1, 2012 - Dec. 31, 2012)

23rd Fiscal Period (Jan. 1, 2013 - Jun. 30, 2013)(a) Asset Management Fees (Note)

465,059

468,829

Fixed compensation

75,00075,000

Incentive-based compensation 1

234,593239,945

Incentive-based compensation 2

155,465

153,883

77,58878,883(b) Administrative Service and Custodian Fees(c) Directors’ Fee

6,600

6,600

(d) Trust Fees

40,19436,752(e) Other Expenses
Total

89,011

94,250678,454685,315(Note 1)	Aside from the amounts of the asset management fees entered above, a total of 27,490 thousand yen for the 22nd fiscal period and a total of 16,650 thousand yen for the 23rd fiscal period
have been paid for asset management of the acquired properties and have been included in the book value of each property.

(2) Status of Loans Payable
As of June 30, 2013 JPR has the following loans payable.

Category

LenderCurrent Portion of Long-Term Loans Payable

Development Bank of Japan Inc.
Mizuho Corporate Bank, Ltd.
(Note 11)
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking
Corporation
Meiji Yasuda Life Insurance
Company
Taiyo Life Insurance Company
Daido Life Insurance Company
Sumitomo Life Insurance Company
ORIX Bank Corporation
The Shinkumi Federation Bank
Mizuho Trust & Banking Co., Ltd.
Aozora Bank, Ltd.
Mizuho Corporate Bank, Ltd.
(Note 11)
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinsei Bank, Ltd.
The Chugoku Bank, Ltd.
The Hachijuni Bank, Ltd.
The Bank of Fukuoka, Ltd.
Total

44

Balance as of Balance as of
AverageJan. 1, 2013 Jun. 30, 2013 Interest Rate
Drawdown Date(millions of (millions of (%) (Note 1)
yen)
yen)
(Note 2)

Repayment
Date

Repayment
MethodMar. 31, 2009
Jun. 26, 2009

820
200

–
200

1.740
3.190

(Note 5)(Note 6)(Note 5)(Note 6)

Jun. 26, 2009

200

5,200

2.449

(Note 7)(Note 7)

Jun. 26, 2009

166

4,336

2.390

(Note 8)(Note 8)Jun. 29, 2009

100

2,600

2.440

(Note 9)(Note 9)Jun. 21, 2011

132

132

1.800

(Note 10)(Note 10)

Dec. 26, 2006
Jun. 4, 2008
Dec. 26, 2006
Dec. 27, 2006
Feb. 4, 2010
May 28, 2010
Feb. 4, 2010
Feb. 4, 2010
Mar. 30, 2010

1,000
1,000
1,000
2,000
1,000
2,000
3,000
3,000
1,000

1,000
–
1,000
2,000
–
2,000
–
–
1,000

May 28, 2010

3,000

3,000

May 28, 2010

3,000

3,000

Jul. 8, 2010

3,000

–

1.190 Jun. 27, 2013

Sep. 24, 2010
Sep. 24, 2010
Sep. 24, 2010
Sep. 24, 2010

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

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

1.070 Sep. 24, 2013
1.070 Sep. 24, 2013
1.070 Sep. 24, 2013
1.070 Sep. 24, 2013

30,61830,468Use

Remarks

1.858 Dec. 27, 2013
2.035 Jun. 4, 2013
1.858 Dec. 27, 2013
Unsecured
1.858 Dec. 27, 2013
Unguaranteed
1.376 Feb. 4, 2013
(Note 4)
NonSubordinated1.281 Nov. 27, 2013
1.376 Feb. 4, 2013
Principal
1.376 Feb. 4, 2013
lump sum
1.322 Sep. 30, 2013 repaymenton1.279 Nov. 27, 2013
maturity
1.279 Nov. 27, 2013

Japan Prime Realty Investment Corporation

Category

LenderDaido Life Insurance Company

Feb. 5, 2008
Mar. 26, 2008

1,000
2,000

1,000
2,000

Zenkyoren (National Mutual Insurance
Federation of Agricultural Cooperatives) Mar. 26, 2008
Sumitomo Life Insurance Company
Jun. 4, 2008
Jun. 26, 2009
Feb. 4, 2011
Mizuho Corporate Bank, Ltd. (Note 11) Mar. 30, 2012

2,000

2,000

2,000
5,100
5,000
7,000

2,000
–
5,000
7,000

Dec. 5, 2012

2,000

2,000

Jun. 26, 2009
Mar. 25, 2011
Aug. 8, 2012
Aug. 8, 2012
Sep. 5, 2012
Dec. 5, 2012
Jun. 26, 2009

4,253
5,000
1,000
1,000
3,000
1,000
3,100

–
5,000
1,000
1,000
3,000
1,000
3,000

Jun. 27, 2013–

820

Jun. 29, 2009
Mar. 30, 2012
Sumitomo Mitsui Banking Corporation
Dec. 5, 2012
Jun. 27, 2013
Sep. 24, 2010
Taiyo Life Insurance Company
Jun. 4, 2013
The Nishi-Nippon City Bank, Ltd.
May 27, 2011
Meiji Yasuda Life Insurance Company
Jun. 21, 2011
Jul. 7, 2011
The Bank of Fukuoka, Ltd.
Apr. 11, 2012
Aug. 29, 2011
Mitsubishi UFJ Trust and Banking
Aug. 29, 2011
Corporation
Jun. 27, 2012
Mar. 30, 2012
Mizuho Trust & Banking Co., Ltd.
Feb. 4, 2013
Resona Bank, Limited
Mar. 30, 2012
The Tokyo Tomin Bank, Limited (Note 3) Mar. 30, 2012
The Bank of Yokohama, Ltd. (Note 3)
Mar. 30, 2012
The Minato Bank, Ltd. (Note 3)
Mar. 30, 2012
The Yamaguchi Bank, Ltd. (Note 3)
Mar. 30, 2012
The Chiba Kogyo Bank, Ltd. (Note 3)
Mar. 30, 2012
Shinsei Bank, Ltd.
Apr. 5, 2012
Apr. 11, 2012
Sompo Japan Insurance Inc.
Jun. 27, 2012
The Chugoku Bank, Ltd.
Apr. 11, 2012
The Iyo Bank, Ltd.
Apr. 11, 2012
The Hachijuni Bank, Ltd.
Apr. 11, 2012
Jul. 3, 2012
Aug. 8, 2012
Aozora Bank, Ltd.
Aug. 27, 2012
Aug. 30, 2012
The Shinkumi Federation Bank
Feb. 4, 2013
ORIX Bank Corporation
Feb. 4, 2013

2,550
6,400
1,000
–
1,000
–
3,000
3,736
2,000
2,000
5,000
1,000
1,000
4,000
–
2,000
1,000
1,000
800
500
100
5,000
2,000
2,000
2,000
1,000
1,000
900
2,000
2,000
2,000
–
–

–
6,400
1,000
3,000
1,000
1,000
3,000
3,670
2,000
2,000
5,000
1,000
1,000
4,000
3,000
2,000
1,000
1,000
800
500
100
5,000
2,000
2,000
2,000
1,000
1,000
900
2,000
2,000
2,000
3,000
1,000

100,439

100,190

Bank of Tokyo-Mitsubishi UFJ, Ltd.

Development Bank of Japan Inc.

Long-Term Loans Payable

Balance as of Balance as of
AverageJan. 1, 2013 Jun. 30, 2013 Interest Rate
Drawdown Date(millions of (millions of (%) (Note 1)
yen)
yen)
(Note 2)

Total

Repayment
Date

Repayment
MethodUse

Remarks

1.666 Feb. 5, 2015
1.725 Mar. 26, 2015

Principal
lump sum
1.725 Mar. 26, 2015 repayment
on maturity
2.257 Jun. 4, 2015
2.449 (Note 7)(Note 7)1.414 Feb. 4, 2016 Principal
1.093 Mar. 30, 2017 lump sum
repayment
1.027 Dec. 5, 2019 on maturity
2.390 (Note 8)(Note 8)
1.198 Mar. 25, 2016
1.178 Aug. 8, 2019 Principal
lump sum
0.948 Aug. 8, 2017
repayment
0.919 Sep. 5, 2017 on maturity
1.027 Dec. 5, 20193.190 (Note 6)(Note 6)
Principal
lump sum
1.449 Jun. 25, 2021
repayment
on maturity
2.440 (Note 9)(Note 9)1.093 Mar. 30, 20171.027 Dec. 5, 2019 Principal
1.265 Jun. 26, 2020 lump sum
1.275 Sep. 24, 2015 repayment
0.949 Jun. 4, 2018 on maturity

Unsecured

Unguaranteed
1.149 May 27, 2016
(Note 4)
Non1.800 (Note 10)(Note 10)Subordinated1.170 Jul. 7, 2016
0.902 Oct. 9, 2015
1.184 Aug. 29, 20170.924 Aug. 31, 2015
0.843 Jun. 26, 2015
1.093 Mar. 30, 2017
1.076 Feb. 4, 2020
1.093 Mar. 30, 20170.738 Sep. 30, 2015
0.738 Sep. 30, 2015
0.738 Sep. 30, 2015
0.738 Sep. 30, 2015 Principal
lump sum
0.738 Sep. 30, 2015
repayment
1.397 Apr. 5, 2019 on maturity
0.981 Oct. 11, 2016
0.874 Dec. 25, 2015
0.902 Oct. 9, 2015
0.902 Oct. 9, 2015
0.902 Oct. 9, 2015
0.994 Jul. 3, 2017
1.178 Aug. 8, 2019
0.985 Aug. 25, 20171.146 Aug. 30, 2018
0.786 Feb. 5, 2018
0.786 Feb. 5, 2018

(Note 1)	The average interest rates are weighted-average figures during the period and are rounded to the third decimal place. Furthermore, fees related to loan arrangement paid to the above lenders are not included.
(Note 2) Long-term loans payable are fixed-rate loans payable, except those that fall under the category of Note 3.
(Note 3) The loans are with floating interest rates.
(Note 4)	Funds are used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable and redemption of investment corporation bonds.
(Note 5)	The loans payable were subject to repayment of 25 million yen on June 27, 2009, thereafter, every 6 months. In addition, repayment of 820 million yen was made on maturity date June 27, 2013.
(Note 6)	The loans payable are subject to repayment of 100 million yen on December 27, 2009, thereafter, every 6 months. In addition, repayment of 2,100 million yen will be made on maturity date June 27, 2019.
(Note 7)	The loans payable are subject to repayment of 100 million yen on December 25, 2009, thereafter, every 6 months. In addition, repayment of 5,100 million yen will be made on maturity date June 27, 2014.
(Note 8)	The loans payable are subject to repayment of 83 million yen on December 27, 2009, thereafter, every 6 months. In addition, repayment of 4,253 million yen will be made on maturity date June 27, 2014.
(Note 9)	The loans payable are subject to repayment of 50 million yen on December 25, 2009, thereafter, every 6 months. In addition, repayment of 2,550 million yen will be made on maturity date June 27, 2014.
(Note 10)	The loans payable are subject to repayment of 66 million yen on June 24, 2012, thereafter, every 6 months. In addition, repayment of 3,208 million yen will be made on maturity date June 21, 2018.
(Note 11)	Mizuho Corporate Bank, Ltd. was renamed to Mizuho Bank, Ltd. on July 1, 2013 in accordance with the merger with Mizuho Bank, Ltd.

45

III. Asset Management Report(3) Investment Corporation Bonds
Details of JPR’s investment corporation bonds outstanding as of June 30, 2013 are as follows.
Name

Issue Date

Balance as of
Balance as ofJan. 1, 2013
Jun. 30, 2013
(millions of yen) (millions of yen)

Third Series of Investment
Feb. 12, 2004
Corporation Bonds
Sixth Series of Investment
Nov. 4, 2004
Corporation Bonds
Seventh Series of Investment
Dec. 14, 2006
Corporation Bonds
Ninth Series of Investment
Jul. 23, 2007
Corporation Bonds
Eleventh Series of Investment Mar. 12, 2010
Corporation Bonds
Twelfth Series of Investment
May 21, 2010
Corporation Bonds
Thirteenth Series of Investment Oct. 25, 2011
Corporation Bonds
Fourteenth Series of Investment Oct. 25, 2011
Corporation Bonds
Fifteenth Series of Investment Nov. 22, 2012
Corporation Bonds
Sixteenth Series of Investment Nov. 22, 2012
Corporation Bonds
Seventeenth Series ofInvestment Corporation Bonds May 31, 2013
Eighteenth Series of Investment May 31, 2013
Corporation Bonds
Total

CouponRate(%)

Maturity Date

5,000

5,000

2.32 Feb. 12, 2014

5,000

5,000

2.00 Nov. 4, 2014

4,500

4,500

2.90 Dec. 14, 2026

6,000

6,000

2.10 Jul. 23, 2014

6,000

6,000

1.68 Mar. 12, 2015

7,000

7,000

1.27 May 21, 2015

7,000

7,000

0.95 Oct. 25, 2016

2,000

2,000

1.34 Oct. 25, 2018

5,000

5,000

0.68 Nov. 22, 2017

2,000

2,000

1.03 Nov. 22, 2019

–

5,000

0.65 Mar. 31, 2018

–

2,000

1.46 Mar. 31, 2023

49,50056,500

Redemption

Use

Remarks

Purchase ofproperties andrepaymentof loans(Note 1)
(Note 2)

Repaymentof loans

Bulletrepayment

Purchase ofproperties
Redemptionof investment
corporation(Note 3)bonds andrepayment of loans

Repaymentof loans(Note 1)	These investment corporation bonds are equipped with the same rank rider limited among investment corporation bonds, and with limitations on private placement among a small numberof investors and on resale among qualified institutional investors.
(Note 2) These investment corporation bonds are equipped with the same rank rider limited among investment corporation bonds and limitations on resale among qualified institutional investors.
(Note 3) These investment corporation bonds are equipped with the same rank rider limited among certain investment corporation bonds.

6. Acquisitions and Sales during the 23rd Fiscal Period(1) Acquisition and Sale of Real Estate and Asset-Backed Securities, etc.
Type of Assets

Real Estate Name

Acquisition
Sale
Difference
Sale
Sale Profit
Acquisition
Sale PriceBook(C)
Expenses and Loss
Price
(A)
Value
Acquisition
Sale(A) – (B)(D)(C) – (D)(thousands of Date (thousands(B)
Date(thousands (thousands (thousands (thousands
yen)of yen)of yen)of yen)of yen)of yen)(Note)(Note)

Beneficiary interest in Omiya Prime East
March 22, 2013
real estate
Shinyokohama 2nd Center
Beneficiary interest in Building
March 28, 2013
real estate(additional ownership)Total–

6,090,000

–

–

–

–

–

–

570,000

–

–

–

–

–

–

6,660,000

–

–

–

–

–

–

(Note) 	Values of “acquisition price” or “sale price” are amounts (transaction price indicated in the transaction contract) excluding expenses (such as real estate transaction brokerage fees) required
for acquisition or sale of the relevant real estate.

(2) Acquisition and Sale of Other Assets
JPR made no acquisition or sale of other assets in the 23rd fiscal period.

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

Acquisition

Beneficiary interest in realestateOmiya Prime East

Acquisition

Beneficiary interest in realestateShinyokohama 2nd Center
Building(additional ownership)

Real Estate Name

Acquisition Price
Real Estate
or Sale PriceAppraisal Value Real Estate Appraisal Date
(Note 1)
(Note 2)
Appraiser(thousands of yen) (thousands of yen)Japan RealMarch 22, 2013
6,090,000
6,270,000
March 1, 2013
Estate InstituteTransaction
Date

March 28, 2013

570,000

870,000

Japan Real
February 1, 2013
Estate Institute(Note 1)	Values of "acquisition price" or "sale price" are amounts (transaction price indicated in the transaction contract) excluding expenses (such as real estate transaction brokerage fees) required
for acquisition or sale of the relevant real estate.
(Note 2)	The appraisals in the table above were conducted by applying to the “Real Estate Appraisal Standards, Specific Thesis Chapter 3: Appraisal on Prices of Real Estate Subject toSecuritization.”46

Japan Prime Realty Investment Corporation(4) Transactions with Interested Parties and Major Shareholders
1) Transaction Status
No transaction of specified assets or other deals with interested parties and major shareholders were conducted during the 23rd fiscal period.

2) Value of Fee Expenses
Category

Total Paid Fees (A)Property Brokerage Fees

182,700

Management Fees (Note 2)

227,936

Outsourcing Fees

506,374

Tenant Brokerage Fees
Advertising Cost of the Company

23,241
5,965

Breakdown of Transaction with Interested Parties and Major
Shareholders
Paid Party
Paid Amount (B)Tokyo Tatemono Co., Ltd.
182,700
Tokyo Tatemono Co., Ltd.
201,490
Yasuda Real Estate Co., Ltd.
5,781
Taisei-Yuraku Real Estate Co., Ltd.
3,279
Tokyo Tatemono Co., Ltd.
408,448
Yasuda Real Estate Co., Ltd.
22,051
Tokyo Tatemono Co., Ltd.
2,475
E-State Online Co., Ltd.
223

Ratio to Total Amount(B/A)
100.0%
88.4%
2.5%
1.4%
80.7%
4.4%
10.6%
3.7%

(Note 1)	Interested parties and major shareholders refers to the interested parties of the asset management company who has concluded an asset management agreement with JPR and is regulated
as designated in Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations and article 26-27 of the regulation on management reports in regard
to investment trusts and investment corporations of The Investment Trusts Association, Japan and the major shareholders of the asset management company defined in Article 29-4-2 ofthe Financial Instruments and Exchange Act.
(Note 2) The management fees indicated in the above table include construction management fees (total of 14,200 thousand yen) appropriated as assets and not handled as expenses.
(Note 3)	Aside from transactions indicated in the above table, JPR paid the following amounts for repairs, etc. conducted by below parties who are interested parties or major shareholders during
the 23rd fiscal period.
Tokyo Tatemono Co., Ltd.
255,557 thousand yen
Yasuda Real Estate Co., Ltd.
2,274 thousand yen
Shinjuku Center Building Management Co., Ltd.
311,229 thousand yen
Taisei-Yuraku Real Estate Co., Ltd.
372 thousand yen
Tokyo Real Estate Management Co., Ltd.
96,000 thousand yen
Tokyo Tatemono Techno-build Co., Ltd.
90,200 thousand yen	Furthermore, Tokyo Tatemono Techno-build Co., Ltd. was merged by Tokyo Real Estate Management Co., Ltd. as of July 1, 2013 after transferring part of its businesses to Tokyo
Tatemono Amenity Support Co., Ltd. through absorption-type split on the same date.

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

47

III. Asset Management Report

7. Overview of Accounting(1) Assets, Liabilities, Principal, and Profits and Loss
Please refer to the Balance Sheets, Statements of Income and Retained Earnings, Statements of Unitholders’ Equity and Notes to Financial
Statements as well as Distribution Information on later pages of this report.

(2) Changes in Calculation Method of Depreciation
No change has been made.

(3) Changes in Valuation Method of Real Estate
No change has been made.

8. Overview of Self-Managed Investment Trust Beneficiary Certificates(1) Acquisition
Tokyo Realty Investment Management, Inc., the asset management company of JPR, acquired and holds JPR’s investment units as indicated below.
Acquisition Date

Number of Units Acquired

September 14, 2001
January 22, 2002 (Note)
Accumulated Total

Number of Units Disposed

Number of Units Held

40
60
100

–
–
–

40
100
100

Number of Units Held at End of
PeriodTotal Investment at End of Period(Note) (millions of yen)

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

100

20

0.0

(Note) The acquisition was due to the investment unit split (2.5 units for one existing unit).

(2) Units Held
14th Fiscal Period(Jul. 1, 2008 – Dec. 31, 2008)
15th Fiscal Period(Jan. 1, 2009 – Jun. 30, 2009)
16th Fiscal Period(Jul. 1, 2009 – Dec. 31, 2009)17th Fiscal Period(Jan. 1, 2010 – Jun. 30, 2010)
18th Fiscal Period(Jul. 1, 2010 – Dec. 31, 2010)
19th Fiscal Period(Jan. 1, 2011 – Jun. 30, 2011)
20th Fiscal Period(Jul. 1, 2011 – Dec. 31, 2011)
21st Fiscal Period(Jan. 1, 2012 – Jun. 30, 2012)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)
23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)(Note) Total investment at end of period represents the acquisition price.

48

Ratio to Total Units Issued andOutstanding (%)

Japan Prime Realty Investment Corporation

9. Other(1) Notice
Major issues related to the execution and modification, etc. of major agreements approved at JPR’s Board of Directors meeting include thefollowing:
Date of Board of Directors Meeting

May 9, 2013

Approved Item

Overview

Consignment of administrative services
concerning the issuance of the Seventeenth
Series and the Eighteenth Series of Unsecured
Bonds (Note)

JPR consigned the administrative services
related to the issuance of the Seventeenth
Series and the Eighteenth Series of Unsecured
Bonds to Mizuho Securities Co., Ltd., SMBC
Nikko Securities Inc., Mitsubishi UFJ Morgan
Stanley Securities Co., Ltd. and Mizuho
Corporate Bank, Ltd (presently Mizuho Bank,Ltd.) based on the decision by the executive
director to issue these bonds.

(Note)	The comprehensive resolution regarding the issuance of these investment corporation bonds was made at the Board of Directors meeting held on April 25, 2013. The Seventeenth Series andthe Eighteenth Series of Unsecured Bonds were issued on May 31, 2013 based on this resolution.

(2) Other
Unless otherwise stated, monetary amounts are rounded down and percentage figures are rounded off to the nearest specified unit in this AssetManagement Report.

49

IV. Financial Statements(1) Balance Sheets(Thousands of yen)
End of 22nd Fiscal Period(Dec. 31, 2012)

End of 23rd Fiscal Period(Jun. 30, 2013)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures
Accumulated depreciation
Structures, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
LandLand in trust
Construction in progress
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold right
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets

50

*1

*1

*1

8,402,885
11,596,061
229,329
203,381259,150
5,689
20,696,498

10,852,097
11,568,818
321,458
145,408–
8,023
22,895,806

57,328,085(8,339,934)
48,988,151
75,979,066(21,257,423)
54,721,643
44,461(9,160)35,300111,925(49,146)
62,778
720,700(283,078)
437,622
1,442,809(990,861)
451,947
42,589(23,853)
18,735
119,049(80,300)
38,749111,970,153
158,879,372
114,764
3,399
375,722,618

56,930,266(8,971,882)
47,958,383
80,339,792(22,438,604)
57,901,188
44,858(10,165)
34,692
113,070(53,337)
59,733
713,742(293,404)
420,338
1,567,896(1,039,658)
528,237
44,529(24,556)
19,972
127,009(85,579)
41,429111,638,476
162,616,535
66,3295,319
381,290,637

*1

*1

*1

4,794,109
5,359
4,799,469

4,794,109
4,763
4,798,872

49,520539,667
589,187
381,111,275

49,520475,065
524,585
386,614,096

176,542
176,542
401,984,316

205,794
205,794
409,715,697

Japan Prime Realty Investment Corporation(Thousands of yen)
End of 22nd Fiscal Period(Dec. 31, 2012)

End of 23rd Fiscal Period(Jun. 30, 2013)

Liabilities
Current liabilities
Operating accounts payable

1,722,706

1,824,580

Current portion of long-term loans payable

30,618,000

30,468,000–

5,000,000

Accounts payable-other581,266

694,658

Accrued expenses

211,449

208,428605

605

Current portion of investment corporation bonds

Income taxes payable
Accrued consumption taxes

64,194

191,538

Advances received

2,461,001

2,515,043

Total current liabilities

35,659,223

40,902,854

Noncurrent liabilities
Investment corporation bonds

49,500,000

51,500,000

Long-term loans payable

100,439,000

100,190,000

Tenant leasehold and security deposits*1

7,871,730*1

7,959,356

Tenant leasehold and security deposits in trust

11,345,751

12,046,833

Total noncurrent liabilities

169,156,482

171,696,190

204,815,706

212,599,044

192,044,238

192,044,238

Deposits for advanced depreciation

73,94673,946

Total voluntary deposits

73,94673,946

Unappropriated retained earnings(undisposed losses)

5,050,424

4,998,468

Total surplus

5,124,371

5,072,414

Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Surplus
Voluntary deposits

Total unitholders' equity
Total net assets
Total liabilities and net assets

197,168,609*3

197,168,609
401,984,316

197,116,653*3

197,116,653
409,715,697

51

IV. Financial Statements(2) Statements of Income and Retained Earnings(Thousands of yen)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)*1*1

Operating revenue
Rent revenue-real estate
Total operating revenue

12,963,538
12,963,538

13,278,813
13,278,813

Operating expenses
Expenses related to rent business*1

5,519,704*1

6,208,456

Asset management fee

465,059

468,829

Administrative service and asset custody fees

77,58878,883

Directors' compensation

6,600

6,600

Trust fees

40,19436,752Other operating expenses

89,011

94,250Total operating expenses

6,198,159

6,893,772

6,765,379

6,385,040

Operating income
Non-operating income
Interest income

2,665

2,012

Income on settlement of management associationaccounts

5,570

48,287

Other

2,082

9,713

Total non-operating income

10,31860,013

Interest expenses

972,379

896,962

Non-operating expenses
Borrowing expenses

260,539

138,013Interest expenses on investment corporation bonds

396,043

408,001

Amortization of investment corporation bondissuance costs

20,07023,356

Unit-issuance costs

98,328

–

Other

2,005

3,346

1,749,367

1,469,680

Total non-operating expenses
Ordinary income
Income before income taxes*1

5,026,329*1

4,975,373

5,026,329

4,975,373

Income taxes-current

605

605

Total income taxes

605

605

5,025,724

4,974,768

24,69923,6995,050,424

4,998,468

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed losses)

52

Japan Prime Realty Investment Corporation(3) Statements of Unitholders’ Equity(Thousands of yen)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

Unitholders' equity
Unitholders' capital
Balance at beginning of current period

171,339,818

192,044,238

20,704,420–

Changes of items during the period
Issuance of units
Total changes of items during the period
Balance at end of current period

20,704,420–

192,044,238

192,044,238

73,94673,946

Surplus
Voluntary deposits
Balance at beginning of current period
Changes of items during the period
Total changes of items during the period––

73,94673,946

4,622,149

5,050,424

Dividends from surplus(4,597,450)(5,026,725)

Net income

5,025,724

4,974,768

428,274(51,956)

5,050,424

4,998,468

4,696,096

5,124,371

428,274(51,956)

5,124,371

5,072,414

176,035,914

197,168,609

Balance at end of current period
Unappropriated retained earnings(undisposed losses)
Balance at beginning of current period
Changes of items during the period

Total changes of items during the period
Balance at end of current period
Total surplus
Balance at beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at end of current period
Total unitholders' equity
Balance at beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at end of current period

21,132,694(51,956)

197,168,609

197,116,653

176,035,914

197,168,609

Total net assets
Balance at beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at end of current period

21,132,694(51,956)

197,168,609

197,116,653

53

IV. Financial Statements(4) Statements of Cash Distributions
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

I.

Unappropriated retained earnings

5,050,424,442 yen

4,998,468,027 yen

II.

Distribution amount

5,026,725,000 yen

4,975,575,000 yen(6,093 yen)

(6,031 yen)

23,699,442 yen

22,893,027 yen

Pursuant to the policy on cash distributions
provided in Article 30 (2) of the Articles
of Incorporation of JPR, the distribution
amount shall be in excess of an amountequivalent to 90% of the “distributable
income amount” as stipulated in Article 67-15
of the Act on Special Measures Concerning
Taxation, but no more than the amountof earnings. Based on such policy, JPR
decided to pay out distributions of earningsof 5,026,725,000 yen, which is the largest
integral multiple of the number of investment
units issued and outstanding (825,000 units)
in an amount not in excess of unappropriatedretained earnings while minimizing theburden to unitholders incurred by accrual of
corporate income tax, etc. Furthermore, JPR
shall not distribute cash in excess of earnings
as stipulated in Article 30 (4) of the Articles
of Incorporation.

Pursuant to the policy on cash distributions
provided in Article 30 (2) of the Articles
of Incorporation of JPR, the distribution
amount shall be in excess of an amountequivalent to 90% of the “distributable
income amount” as stipulated in Article 67-15
of the Act on Special Measures Concerning
Taxation, but no more than the amountof earnings. Based on such policy, JPR
decided to pay out distributions of earningsof 5,026,725,000 yen, which is the largest
integral multiple of the number of investment
units issued and outstanding (825,000 units)
in an amount not in excess of unappropriatedretained earnings while minimizing theburden to unitholders incurred by accrual of
corporate income tax, etc. Furthermore, JPR
shall not distribute cash in excess of earnings
as stipulated in Article 30 (4) of the Articles
of Incorporation.

(Distribution amount per unit)
III. Retained earnings carried forward
Method for calculating distribution amount54

Japan Prime Realty Investment Corporation(5) Statements of Cash Flows(Thousands of yen)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

Net cash provided by (used in) operating activities
Income before income taxes

5,026,329

4,975,373

Depreciation and amortization

1,831,992

1,884,122

Amortization of investment corporation bond issuance costs

20,07023,356

Unit-issuance costs

98,328–Interest income(2,665)(2,012)

Interest expenses

1,368,423

1,304,963

Decrease (increase) in operating accounts receivable

27,458(92,129)

Decrease (increase) in consumption taxes receivable(259,150)

259,150

Decrease (increase) in prepaid expenses(49,948)

57,973

Increase (decrease) in operating accounts payable(112,886)

437,933

Increase (decrease) in accounts payable-other

21,53039,369

Increase (decrease) in accrued consumption taxes(58,020)

127,344

Increase (decrease) in advances received

132,92754,041Other, net

25,222

21,798Subtotal

8,069,613

9,091,286

Interest income received
Interest expenses paid
Income taxes (paid) refund

2,665

2,012

(1,459,576)(1,307,984)

0

124

6,612,702

7,785,438

Purchase of property, plant and equipment(11,867,274)(343,297)

Purchase of property, plant and equipment in trust(1,122,899)(7,446,034)

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities

Repayments of tenant leasehold and security deposits(289,918)(256,076)

Proceeds from tenant leasehold and security deposits

631,339

506,908

Repayments of tenant leasehold and security deposits in trust(371,566)(190,202)

Proceeds from tenant leasehold and security deposits in trust

310,522842,206(12,709,796)(6,886,496)

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Increase in short-term loans payable

23,600,000

7,000,000

Decrease in short-term loans payable(44,200,000)(7,000,000)

Proceeds from long-term loans payable

15,900,000

11,820,000

Repayment of long-term loans payable(7,824,000)(12,219,000)

Proceeds from issuance of investment corporation bonds

6,949,644

6,947,523

Redemption of investment corporation bonds(9,000,000)–

Proceeds from issuance of units

20,606,594–

Dividends paid

(4,596,962)(5,025,496)

Net cash provided by (used in) financing activities

1,435,276

1,523,026

Net changes in cash and cash equivalents(4,661,817)

2,421,968

Cash and cash equivalents at beginning of current period

24,660,764

19,998,947

Cash and cash equivalents at end of current period*119,998,947*1

22,420,916

55

IV. Financial Statements(6) Notes to Financial Statements(Basis of Presenting Financial Statements)
Japan Prime Realty Investment Corporation (JPR) maintains its accounting records and prepares its financial statements in accordance withaccounting principles generally accepted in Japan (Japanese GAAP), including provisions set forth in the Financial Instrument and Exchange Act
of Japan, the Act on Investment Trusts and Investment Corporations (ITA), the Companies Act and the related regulations, which are different incertain respects as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of JPR, which were prepared in accordance withJapanese GAAP. In preparing the accompanying financial statements, certain reclassifications have been made to the financial statements issued
domestically in order to present them in a format which is more familiar to readers outside Japan. In addition, the notes to financial statements
include information which might not be required under Japanese GAAP but is presented herein as additional information.
JPR’s accounting period ends at the end of June and December.
(Significant Accounting Policies)
1. Depreciation Method for Property and Equipment(1)		Property and Equipment (including entrusted properties)
		 Depreciation is calculated using the straight-line method. The estimated useful lives of major property and equipment ranges are as follows:			Buildings
3 - 65 years
			Structures
10 - 35 years
			 Machinery and equipment
3 - 17 years
			 Tools, furniture and fixtures
3 - 20 years
Assets with acquisition prices of 100,000 yen or more but less than 200,000 yen are depreciated in three years based on the Corporation Tax Act.
		(2) Intangible Assets
		 Intangible assets are amortized utilizing the straight-line method.
(3) Long-term Prepaid Expenses
		 Long-term prepaid expenses are amortized utilizing the straight-line method.
2. Accounting for Deferred Assets
Investment Corporation Bond Issuance Costs
		 Investment corporation bond issuance costs are amortized utilizing the straight-line method over the redemption periods.
3. Standards for Recording Revenues and Expenses
Accounting Treatment of Taxes on Properties and Equipment
		In connection with property taxes, city planning taxes and depreciated asset taxes, JPR uses the method of charging the corresponding
amounts of assessed taxes to the current fiscal period as real estate rental expenses.
		Furthermore, JPR included an amount equivalent to the property taxes paid to the sellers during the first fiscal period as an acquisition cost,
not as expenses, in connection with the acquisition of real estate or entrusted beneficiary interests in real estate as entrusted property. Taxeson property and equipment capitalized amounted to 25,739 thousand yen and 36,206 thousand yen for the fiscal periods ended December 31,
2012 and June 30, 2013, respectively.
4. Scope of Cash and Cash Equivalents in the in the Statements of Cash Flows
Cash and cash equivalents in the Statements of Cash Flows include the following:(1) Cash on hand and cash in trust(2) Deposits placed with banks and deposits in trust that can be withdrawn at any time(3)	Short-term investments that are readily convertible to cash and have insignificant risk of price fluctuation and original maturities of threemonths or less from the acquisition date.
5. Other Significant Items Fundamental to Preparing the Financial Statements(1) Accounting Policies on Trust Beneficiary Interests in Real Estate as Property in Trust		Regarding trust beneficiary interests in real estate, all asset and liability accounts of entrusted properties as well as all revenue and expense
accounts generated by the property in trust are recorded in relevant accounts on the balance sheets and statements of income and retained
earnings.
		 Furthermore, the following material accounts are separately stated in the balance sheet for properties in trust recorded in relevant accounts.
		a. Cash and deposits in trust		b.	Buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust and constructionin progress in trust		c. Tenant leasehold and security deposits in trust(2) Accounting for Consumption Taxes		 National and local consumption taxes are accounted with the consumption taxes excluded.

56

Japan Prime Realty Investment Corporation(Notes to Balance Sheets)*1. Assets Pledged as Collateral and Secured Liabilities
Assets pledged as collateral are as follows:(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)
Buildings (net)124,508

122,639

3,766

3,595

399,183

399,183

527,458

525,418

Machinery and equipment (net)
Land
Total

End of 23rd Fiscal Period(as of June 30, 2013)

Secured liabilities are as follows:(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)
Tenant leasehold and security deposits
Total

End of 23rd Fiscal Period(as of June 30, 2013)15,536

15,536

15,536

15,536

2. Balance of Unused Commitment LineJPR has executed a commitment line agreement with its principal banks primarily to minimize refinancing risks and enhance financial stability.
End of 22nd Fiscal Period(as of December 31, 2012)
Credit limit
Outstanding debt at end of period
Unused commitment line at end of period

End of 23rd Fiscal Period(as of June 30, 2013)

28,000,000 thousand yen

28,000,000 thousand yen––

28,000,000 thousand yen

28,000,000 thousand yen*3. Minimum Total Unitholders’ Equity Designated in Article 67- 4 in the Act on Investment Trusts and Investment Corporations
End of 22nd Fiscal Period(as of December 31, 2012)

End of 23rd Fiscal Period(as of June 30, 2013)
50,000 thousand yen

50,000 thousand yen

57

IV. Financial Statements(Notes to Statements of Income and Retained Earnings)*1. Breakdown of Rent Revenue-Real Estate and Expenses Related to Rent Business(Thousands of yen)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)
A. Rent Revenue-Real Estate
Rent Revenue
Rents
Land rents
Common charges
Parking revenues
Advertising expenses
Antenna use fees
Other
Subtotal
Other rental revenues
Incidental income
Time-based parking revenues
Cancellation charges
Income equivalent to expenses for restoration to as is condition
Other miscellaneous income
Subtotal
Total rent revenue-real estate
B. Expenses Related to Rent BusinessOutsourcing expenses
Utilities expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts
Depreciation
Other
Total expenses related to rent business
C. Profits(A–B)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

8,662,183
1,408,500
1,802,419
219,381
21,936
12,221
33,412
12,160,054

8,922,614
1,439,000
1,847,619
230,708
21,67014,25634,00812,509,879

763,2645,226
12,1444,800
18,048803,483
12,963,538

684,413
5,541
29,32329,73019,925
768,934
13,278,813

510,545833,900
1,025,198
28,033378,880
208,729563,215
1,831,461
139,740
5,519,704

505,069
768,052
1,884,698
26,666244,149
213,735
563,301
1,883,591
119,191
6,208,456

7,443,833

7,070,356(Notes to Statements of Unitholders’ Equity)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)
Total number of authorized units and the number of units outstanding
Total number of authorized units
The number of units outstanding

5,000,000 units
825,000 units

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)
5,000,000 units
825,000 units(Notes to Statements of Cash Flows)*1. Relationship between the Cash and Cash Equivalents at End of Period in the Statements of Cash Flows and the Amounts of the Corresponding
Accounts on the Balance Sheets

Cash and deposits
Cash and deposits in trust
Cash and cash equivalents

22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)
8,402,885 thousand yen
11,596,061 thousand yen
19,998,947 thousand yen

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)
10,852,097 thousand yen
11,568,818 thousand yen
22,420,916 thousand yen

End of 22nd Fiscal Period(as of December 31, 2012)
6,489,594 thousand yen
22,043,187 thousand yen
28,532,781 thousand yen

End of 23rd Fiscal Period(as of June 30, 2013)
6,112,479 thousand yen
20,398,477 thousand yen
26,510,957 thousand yen(Leases)
Future lease revenues under non-cancelable operating leases

Due within one year
Due after one year
Total

58

Japan Prime Realty Investment Corporation(Financial Instruments)
1. Matters Concerning Status of Financial Instruments(1)	Policy on Handling Financial Instruments	In an aim to proactively expand asset size and maintain stable cash distributions to unitholders, JPR adopts the asset management policyof paying heed to efficiently combining the procurement of long-term funds that are stable and the procurement of short-term funds thatemphasize flexibility.
	There may be cases where JPR will engage in derivative transactions, but such will be limited to management for interest rate fluctuation risk
and other hedging purposes. Please note that JPR is not engaged in derivative transactions at present.
(2)	Description of Financial Instruments and Associated Risks, and Risk Management Structure	Tokyo Realty Investment Management, Inc. (TRIM), the asset management company of JPR, strives for risk management by complying
with the JPR Asset Management Guidelines and other rules and regulations. The following outlines the description of individual financial
instruments and the associated risks, and the risk management.
	Deposits are exposed to risks of failure of the financial institutions holding the deposits and other credit risks, but risks are managed throughsuch measures as setting a minimum credit rating for the financial institutions holding the deposits.
	Loans payable and investment corporation bonds are exposed to liquidity risks at the time of repayment/redemption, but liquidity risks aremanaged through such measures as procuring funds from the capital market by increasing capital, executing a commitment line agreementwith the main lending financial institutions, and also having statements of cash receipts and disbursements prepared by the financial division.
(3)	Supplementary Explanation on Matters Concerning Estimated Fair Value, etc. of Financial Instruments
	The estimated fair value of financial instruments, aside from values based on market price, include values based on reasonable calculations
when there is no market price. Certain assumptions, etc. are used in calculating those values and there may be cases where the values will vary
when different assumptions, etc. are used.
2. Matters Concerning Estimated Fair Value, etc. of Financial Instruments
The following are the carrying values and estimated fair values as of December 31, 2012, and the difference between these amounts. Please note thatthe following tables do not include those for which discerning of estimated fair value is recognized to be extremely difficult (please refer to Note 3).
(Thousands of yen)
Carrying Value(Note 1)

(1) Cash and deposits(2) Cash and deposits in trust(3) Current portion of long-term loans payable(4) Current portion of investment corporation bonds(5) Investment corporation bonds(6) Long-term loans payable

8,402,885
11,596,061(30,618,000)–(49,500,000)(100,439,000)

Estimated Fair
Value (Note 1)

8,402,885
11,596,061(30,781,610)–(50,236,953)(102,100,426)

Difference––
163,610–
736,953
1,661,426

The following are the carrying values and estimated fair values as of June 30, 2013, and the difference between these amounts. Please note that thefollowing tables do not include those for which discerning of estimated fair value is recognized to be extremely difficult (please refer to Note 3).
(Thousands of yen)
Carrying Value(Note 1)

(1) Cash and deposits(2) Cash and deposits in trust(3) Current portion of long-term loans payable(4) Current portion of investment corporation bonds(5) Investment corporation bonds(6) Long-term loans payable

10,852,097
11,568,818(30,468,000)(5,000,000)(51,500,000)(100,190,000)

Estimated Fair
Value (Note 1)

10,852,097
11,568,818(31,024,288)(5,105,525)(52,397,133)(101,514,029)

Difference––
556,288
105,525
897,133
1,324,029(Note 1) Items stated under liabilities are shown in parentheses.
(Note 2) Method of calculation of estimated fair value of financial instruments(1)	Cash and deposits, and (2) Cash and deposits in trust
			 As these financial instruments are settled within a short period of time, the estimated fair value is approximately the same as the book value and is thus stated at that book value.
(3) 	Current portion of long-term loans payable, and (6) Long-term loans payable			Of the estimated fair value of these financial instruments, the fair value of long-term loans payable with floating interest rates is based on the book value, as it reflects the market
interest rate within a short period of time and thus is considered to be nearly equal to the book value. The fair value of long-term loans payable with fixed interest rates is based on
the method of calculating by discounting the total amount of principal and interest by the rate assumed as being applicable in the event of a new drawdown corresponding to theremaining loan term.
(4)	Current portion of investment corporation bonds, and (5) Investment corporation bonds.
			Of the estimated fair value of these financial instruments, those with market price are calculated based on market price and those with no market price are calculated according to thefair value of long-term loans payable with fixed interest rates in (3) and (6) above.
(Note 3) 	Financial instruments for which discerning of estimated fair value is recognized to be extremely difficult.
	Tenant leasehold and security deposits and tenant leasehold and security deposits in trust that are deposited by lessees of lease rental properties are not subject to disclosure of estimatedfair value because reasonable estimation of cash flows is recognized to be extremely difficult since there is no market price and also since it is difficult to calculate the actual deposit period
from when lessees move in to when they move out. The following is the carrying value of tenant leasehold and security deposits and the carrying value of tenant leasehold and security
deposits in trust.

59

IV. Financial Statements(Thousands of yen)
End of 22nd Fiscal Period(as of December 31, 2012)
7,871,730
11,345,751

Category

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

End of 23rd Fiscal Period(as of June 30, 2013)
7,959,356
12,046,833(Note 4) Scheduled redemption of monetary claims to be due after the account closing date of the 22nd fiscal period (December 31, 2012)(Thousands of yen)Due in One Yearor Less
Cash and deposits
Cash and deposits in trust

Due after One
Year throughTwo Years

8,402,885
11,596,061

Due after Three
Years throughFour Years

Due after Two
Years throughThree Years
–
–

–
–

Due after FourYears throughFive Years––

Due after
Five Years
–
–

–
–

Scheduled redemption of monetary claims to be due after the account closing date of the 23rd fiscal period (June 30, 2013)(Thousands of yen)Due in One Yearor Less
Cash and deposits
Cash and deposits in trust

Due after One
Year throughTwo Years

10,852,097
11,568,818

Due after Three
Years throughFour Years

Due after Two
Years throughThree Years
–
–

–
–

Due after FourYears throughFive Years––

Due after
Five Years
–
–

–
–

(Note 5)	Amount of repayment or redemption of investment corporation bonds and long-term loans payable scheduled to be due after the account closing date of the 22nd fiscal period (December
31, 2012)(Thousands of yen)Due in One Yearor Less
Investment corporation bonds
Long-term loans payable–
30,618,000

Due after One
Year throughTwo Years
16,000,000
12,235,000

Due after Two
Years throughThree Years
13,000,000
19,732,000

Due after Three
Years throughFour Years
7,000,000
17,332,000

Due after FourYears throughFive Years
5,000,000
31,632,000

Due after
Five Years
8,500,000
19,508,000

Amount of repayment or redemption of investment corporation bonds and long-term loans payable scheduled to be due after the account closing date of the 23rd fiscal period (June 30, 2012)(Thousands of yen)
Due after One
Due in One Year
Year through Twoor Less
Years
Investment corporation bonds
5,000,000
24,000,000
Long-term loans payable
30,468,000
6,332,000(Securities)
22nd fiscal period (as of December 31, 2012)
		 Not applicable
23rd fiscal period (as of June 30, 2013)
		 Not applicable(Derivative Transactions)22nd fiscal period (as of December 31, 2012)
		 Not applicable as JPR conducted no derivative transactions
23rd fiscal period (as of June 30, 2013)
		 Not applicable as JPR conducted no derivative transactions(Retirement Benefits)
22nd fiscal period (as of December 31, 2012)
		 Not applicable as JPR does not have any retirement benefit plan
23rd fiscal period (as of June 30, 2013)
		 Not applicable as JPR does not have any retirement benefit plan60

Due after Three
Due after FourYears through Four Years through Five
Years
Years
–
7,000,000
10,000,000
26,732,000
23,732,000
20,374,000

Due after Two
Years throughThree Years

Due after FiveYears
10,500,000
23,020,000Japan Prime Realty Investment Corporation(Tax Effect Accounting)
1. 	Breakdown of Main Items that caused Differences between the Effective Statutory Tax Rate and the Effective Tax Rate after Applying Tax
Effect Accounting
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)
Effective statutory tax rate

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)36.59%

36.59%(36.59%)(36.59%)

Other

0.01%

0.01%

Effective tax rate after applying tax effect accounting

0.01%

0.01%

(Adjustment)
Deductible cash distributions(Equity Method Income and Retained Earnings)
22nd fiscal period (July 1, 2012 – December 31, 2012)		
Not applicable as JPR does not have any affiliated companies
23rd fiscal period (January 1, 2013 – June 30, 2013)		
Not applicable as JPR does not have any affiliated companies(Transactions with Affiliated Parties)
1. Parent Company and Major Corporation Unitholders
		 22nd fiscal period (July 1, 2012 – December 31, 2012)
			 Not applicable		 23rd fiscal period (January 1, 2013 – June 30, 2013)
			 Not applicable
2. Subsidiaries
		 22nd fiscal period (July 1, 2012 – December 31, 2012)
			 Not applicable		 23rd fiscal period (January 1, 2013 – June 30, 2013)
			 Not applicable
3. Sister Companies
		 22nd fiscal period (July 1, 2012 – December 31, 2012)
			 Not applicable		 23rd fiscal period (January 1, 2013 – June 30, 2013)
			 Not applicable
4. Directors and Major Individual Unitholders
		 22nd fiscal period (July 1, 2012 – December 31, 2012)
			 Not applicable		 23rd fiscal period (January 1, 2013 – June 30, 2013)
			 Not applicable(Asset Retirement Obligations)		 22nd fiscal period (July 1, 2012 – December 31, 2012)
			 Not applicable		 23rd fiscal period (January 1, 2013 – June 30, 2013)
			 Not applicable61

IV. Financial Statements(Segment Information)[Segment Information]
Disclosure is omitted as JPR is comprised of a single reportable segment engaged in the property rental business.
[Related Information]
22nd Fiscal Period (July 1, 2012 – December 31, 2012)
1. Information about Products and Services
Disclosure is omitted as sales to external customers for the single product and service segment is in excess of 90% of operating revenue on theStatements of Income and Retained Earnings.
2. Information about Geographic Areas	(1)	Revenues from Overseas Customers
		Disclosure is omitted as sales to external customers attributed to Japan are in excess of 90% of operating revenue on the Statements ofIncome and Retained Earnings.
(2) Tangible Fixed Assets
		 Disclosure is omitted as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets on the Balance Sheets.
3. Information about Major Customers(Thousands of yen)
Customer Name

Operating Revenue

Y.K. Tokyo Prime Stage

Related Segment

1,408,500

Property rental business23rd Fiscal Period (January 1, 2013 – June 30, 2013)
1.	Information about Products and Services
	Disclosure is omitted as sales to external customers for the single product and service segment is in excess of 90% of operating revenue on theStatements of Income and Retained Earnings.
2. Information about Geographic Areas(1) Revenues from Overseas Customers
			Disclosure is omitted as sales to external customers attributed to Japan are in excess of 90% of operating revenue on the Statements ofIncome and Retained Earnings.
(2) Tangible Fixed Assets
			 Disclosure is omitted as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets on the Balance Sheets.
3. Information about Major Customers(Thousands of yen)
Customer Name

Y.K. Tokyo Prime Stage

Operating Revenue

Related Segment

1,439,000

Property rental business(Investment and Rental Properties)
JPR owns office properties (urban commercial facilities) and retail properties for leasing in Tokyo and other regions. The following is the carrying
value on the balance sheets, amount of increase (decrease) during the period and estimated fair value of these investment and rental properties.
(Thousands of yen)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

Carrying Value on the Balance Sheets
Balance at Beginning of Period

370,163,234

380,518,842

Amount of Increase (Decrease) during the Period

10,355,608

5,567,954

Balance at End of Period

380,518,842

386,086,796

Estimated Fair Value at End of Period

358,816,000

365,214,000(Note 1) The carrying value on the balance sheets is the cost of acquisition less accumulated depreciation.
(Note 2)	Of the amount of increase (decrease) during the periods for investment and rental properties, the amount of increase for the 22nd fiscal period is primarily attributable to acquisition of
Yakuin Business Garden (11,416,663 thousand yen), and the amount of increase for the 23rd fiscal period is primarily attributable to acquisition of Omiya Prime East (6,287,358 thousandyen) and Shinyokohama 2nd Center Building (additional ownership) (581,106 thousand yen).
(Note 3)	The estimated fair value at end of period is the appraisal value or survey value as appraised by an outside real estate appraiser.

The income (loss) in the 22nd and 23rd fiscal periods for investment and rental properties are as presented in the “Notes to Statements of Income
and Retained Earnings.”

62

Japan Prime Realty Investment Corporation(Per Unit Information)
22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

Total net assets per unit
Net income per unit

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

238,992 yen

238,929 yen

6,233 yen

6,030 yen

(Note 1)	Net income per unit was calculated by dividing net income by the weighted-average number of units outstanding during the current fiscal period. Diluted net income per åunit has not beenpresented since no warrants and convertible bonds are outstanding.
(Note 2) Net income per unit was calculated based on the following data:

22nd Fiscal Period(Jul. 1, 2012 – Dec. 31, 2012)

Net income (thousands of yen)

23rd Fiscal Period(Jan. 1, 2013 – Jun. 30, 2013)

5,025,724

4,974,768

Amounts not attributable to ordinary unitholders (thousands of yen)––

Net income attributable to ordinary investment units (thousands of yen)

5,025,724

4,974,768

806,264 units

825,000 units

Average number of units during the fiscal period(Subsequent Events)
23rd Fiscal Period(January 1, 2013 – June 30, 2013)

There are no material subsequent events for this fiscal period.

63

IV. Financial Statements(7) Detailed Statements
1) Detailed statements on securities
Not applicable2) Status of contract amounts, etc. and estimated fair value of derivative transactions and forward exchange transactions
Not applicable3) Summary table from detailed statements on real estate

Asset TypeBalance as ofJanuary 1,
2013(thousandyen)

Current Assets

Increaseduring the
Period(thousandyen)

Accumulated Depreciation
Balance as
Net BalanceOr
Depreciation as of Juneof June 30,
Accumulated during the2013
30, 2013
Period(thousand Amortization(thousand(thousand(thousand
yen)
yen)
yen)
yen)

Decreaseduring the
Period(thousand
yen)

–

–

–

–

–

–

–

Remarks

Noncurrent Assets(Property, plant and equipment)
Buildings

57,328,085

389,544787,363

56,930,266

8,971,882

844,977

47,958,383

Structures

44,461

1,541

1,145

44,858

10,165

1,260

34,692

Machinery and equipment

720,700

8,870

15,828713,742

293,404

21,912

420,338

Tools, furniture and fixtures

42,589

3,439

1,498

44,52924,556

1,948

19,972

Land

111,970,153–

114,764

27,385

331,676 111,638,476–– 111,638,476

75,82066,329––170,220,756

430,780

1,213,333 169,438,203

9,300,009

870,099 160,138,194

Buildings in trust

75,979,066

4,361,005

280

80,339,792

22,438,604

968,248

57,901,188

Structures in trust

111,925

1,145–

113,070

53,3373,934

59,733

1,442,809

125,087–

1,567,896

1,039,658

37,210528,237

119,049

7,960–

127,00985,5794,033

41,429158,879,372

3,737,163– 162,616,535–– 162,616,535

3,399

1,920

–

5,319

–

–

Subtotal

236,535,622

8,234,281

280 244,769,624

23,617,180

1,013,426 221,152,443

Total

406,756,378

8,665,062

1,213,613 414,207,827

32,917,189

1,883,526 381,290,637

4,794,109–

Construction in progress
Subtotal

66,329(Beneficiary interests in trust)

Machinery and equipment in
trust
Tools, furniture and fixtures intrust
Land in trust
Construction in progress intrust

Propertyacquisitions

Propertyacquisitions

5,319

Intangible Assets
Leasehold rights
Other
Total

–

4,794,109––

4,794,109

7,917

–

–

7,917

3,154

596

4,763

4,802,027––

4,802,027

3,154

596

4,798,872(Note 1)	The “Increase during the Period” is due to property acquisitions and construction works, etc. For buildings in trust, structures in trust, machinery and equipment in trust, tools, furnitureand fixtures in trust and land in trust, the increase includes the transfer from real estate to beneficiary interests in trust as a result of executing an additional trust agreement.
(Note 2) 	The “Decrease during the Period” in construction in progress and buildings in trust is due to the transfer to relevant accounts as a result of construction completion for the former and asset
retirement for the latter. For structures, machinery and equipment, tools, furniture and fixtures and land, the decrease is due to the transfer from real estate to beneficiary interests in trust
as a result of executing an additional trust agreement. For building, the decrease is due to the transfer from real estate to beneficiary interests in trust as a result of executing an additional
trust agreement and asset retirement.

4) Detailed statements on other specified assets
Not applicable64Japan Prime Realty Investment Corporation

5) Status of investment corporation bonds

Name

Issue Date

Decrease
Balance as ofduring theJan. 1, 2013
Period(thousands of yen) (thousandsof yen)Balance asof Jun. 30, Coupon
2013
Rate
(thousands(%)
of yen)Maturity
Date

Third Series of Investment
Corporation Bonds (Note 1)

Feb. 12, 2004

5,000,000–

5,000,000

2.32 Feb. 12, 2014

Sixth Series of Investment
Corporation Bonds (Note 2)

Nov. 4, 2004

5,000,000–

5,000,000

2.00 Nov. 4, 2014

Seventh Series of Investment
Corporation Bonds (Note 3)

Dec. 14, 2006

4,500,000–

4,500,000

2.90 Dec. 14, 2026

Ninth Series of Investment
Corporation Bonds (Note 3)

Jul. 23, 2007

6,000,000–

6,000,000

2.10 Jul. 23, 2014

Eleventh Series of Investment
Corporation Bonds (Note 3)

Mar. 12, 2010

6,000,000–

6,000,000

1.68 Mar. 12, 2015

Twelfth Series of Investment
Corporation Bonds (Note 3)

May 21, 2010

7,000,000–

7,000,000

1.27 May 21, 2015

Thirteenth Series of Investment
Corporation Bonds (Note 3)

Oct. 25, 2011

7,000,000–

7,000,000

0.95 Oct. 25, 2016

Fourteenth Series of Investment
Oct. 25, 2011
Corporation Bonds (Note 3)

2,000,000–

2,000,000

1.34 Oct. 25, 2018

Fifteenth Series of Investment
Corporation Bonds (Note 3)

Nov. 22, 2012

5,000,000–

5,000,000

0.68 Nov. 22, 2017

Sixteenth Series of Investment
Corporation Bonds (Note 3)

Nov. 22, 2012

2,000,000–

2,000,000

1.03 Nov. 22, 2019

Seventeenth Series of Investment
May 31, 2013
Corporation Bonds (Note 3)––

5,000,000

0.65 May 31, 2018––

2,000,000

1.46 May 31, 2023

49,500,000–

56,500,000

Eighteenth Series of Investment
May 31, 2013
Corporation Bonds (Note 3)
Total

Use

Remarks

Purchase ofproperties andrepayment ofloans

Repayment ofloans

Purchase ofproperties
Redemptionof investment
corporation
bonds andrepayment ofloans

Unsecured

Repayment ofloans(Note 1)	These investment corporation bonds are equipped with the same rank rider limited among investment corporation bonds, and with limitations on private placement among a small numberof investors and on resale among qualified institutional investors.
(Note 2) These investment corporation bonds are equipped with the same rank rider limited among investment corporation bonds and limitations on resale among qualified institutional investors.
(Note 3) These investment corporation bonds are equipped with the same rank rider limited among certain investment corporation bonds.
(Note 4) Amounts of investment corporation bonds to be redeemed within five years after the date of the balance sheet are as follows.

Due in One Yearor Less(thousands of yen)
Investment corporation
bonds

5,000,000

Due after One Yearthrough Two Years(thousands of yen)
24,000,000

Due after Two Years
through Three Years(thousands of yen)–

Due after Three Years
through Four Years(thousands of yen)

Due after Four Years
through Five Years(thousands of yen)

7,000,000

10,000,000

65IV. Financial Statements

6) Status of loans payable

LenderAverage
Balance as of
Increase
Decrease
Balance as ofInterest Rate Repayment
January 1,during theduring theJune 30, 2013
(Note 2)
Date
2013
PeriodPeriod(thousand yen)
(Note 3)(thousand yen) (thousand yen) (thousand yen)

Short-term loans payable
Mizuho Corporate Bank, Ltd.
(Note 12) (Note 13)
Sumitomo Mitsui Banking
Corporation (Note 12)
Total

Lender–5,000,000

5,000,000––

2,000,000

2,000,000––

7,000,000

7,000,000–

Use

Remarks

Unsecured/
0.506% Jul. 5, 2013 (Note 4) Unguaranteed/
NonSubordinated0.506% Jul. 5, 2013

Average
Balance as of
Increase
Decrease
Balance as ofInterest Rate Repayment
January 1,during theduring theJune 30, 2013
(Note 2)
Date
2013
PeriodPeriod(thousand yen)
(Note 3)(thousand yen) (thousand yen) (thousand yen)

Use

Remarks

Current Portion of Long-Term
Loans Payable
Development Bank of Japan Inc.

820,000–

820,000–

1.740%(Note 5)Development Bank of Japan Inc.

200,000

100,000

100,000

200,000

3.190%(Note 6)200,000

5,100,000

100,000

5,200,000

2.449%(Note 7)

166,000

4,253,000

83,0004,336,000

2.390%(Note 8)100,000

2,550,000

50,0002,600,000

2.440%(Note 9)132,000

66,00066,000132,000

1.800%(Note 10)Mizuho Corporate Bank, Ltd.
(Note 13)
Bank of Tokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui Banking
Corporation
Meiji Yasuda Life Insurance
Company
Taiyo Life Insurance Company

1,000,000––

1,000,000

1.858% Dec. 27, 2013

Taiyo Life Insurance Company

1,000,000–

1,000,000–

2.035% Jun. 4, 2013

Daido Life Insurance Company

1,000,000––

1,000,000

1.858% Dec. 27, 2013

Sumitomo Life Insurance
Company

2,000,000––

2,000,000

1.858% Dec. 27, 2013

ORIX Bank Corporation

1,000,000–

1,000,000–

ORIX Bank Corporation

2,000,000––

2,000,000

The Shinkumi Federation Bank

3,000,000–

3,000,000–

1.376% Feb. 4, 2013

Mizuho Trust & Banking Co.,
Ltd.

3,000,000–

3,000,000–

1.376% Feb. 4, 2013

Aozora Bank, Ltd.

1,000,000–––

1.322% Sep. 30, 2013

3,000,000––

3,000,000

1.279% Nov. 27, 2013

3,000,000––

3,000,000

1.279% Nov. 27, 2013

3,000,000–

3,000,000–

1.190% Jun. 27, 2013

Shinsei Bank, Ltd.

2,000,000––

2,000,000

1.070% Sep. 24, 2013

The Chugoku Bank, Ltd.

1,000,000––

1,000,000

1.070% Sep. 24, 2013

The Hachijuni Bank, Ltd.

1,000,000––

1,000,000

1.070% Sep. 24, 2013

The Bank of Fukuoka, Ltd.

1,000,000––

1,000,000

1.070% Sep. 24, 2013

30,618,000

12,069,000

12,219,000

30,468,000

Mizuho Corporate Bank, Ltd.
(Note 13)
Bank of Tokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui Banking
Corporation

Total

66

Unsecured/
Unguaranteed/(Note 4)
Non1.376% Feb. 4, 2013
Subordinated1.281% Nov. 27, 2013

Japan Prime Realty Investment Corporation

LenderAverage
Decrease
Balance as of
Balance as of
Increase during
Interest Rateduring theJanuary 1,
June 30, 2013
the Period(Note 2)
Period2013(thousand yen)(thousand yen)
(Note 3)(thousand yen)(thousand yen)

Repayment
Date

Use

Remarks(Note 4)

Unsecured
Unguaranteed/
NonSubordinatedLong-Term Loans Payable (Note 1)
Daido Life Insurance Company

1,000,000––

1,000,000

1.666% Feb. 5, 2015

Zenkyoren (National Mutual
Insurance Federation of Agricultural
Cooperatives)

2,000,000––

2,000,000

1.725% Mar. 26, 2015

Sumitomo Life Insurance Company

2,000,000––

2,000,000

2.257% Jun. 4, 2015

5,100,000–

5,100,000–

5,000,000––

5,000,000

1.414% Feb. 4, 2016

7,000,000––

7,000,000

1.093% Mar. 30, 2017

2,000,000––

2,000,000

1.027% Dec. 5, 2019

Bank of Tokyo-Mitsubishi UFJ, Ltd.

4,253,000–

4,253,000–

Bank of Tokyo-Mitsubishi UFJ, Ltd.

5,000,000––

5,000,000

1.198% Mar. 25, 2016

Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000,000––

1,000,000

1.178% Aug. 8, 2019

Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000,000––

1,000,000

0.948% Aug. 8, 2017

Bank of Tokyo-Mitsubishi UFJ, Ltd.

3,000,000––

3,000,000

0.919% Sep. 5, 2017

Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000,000––

1,000,000

1.027% Dec. 5, 2019

Development Bank of Japan Inc.

3,100,000–

100,000

3,000,000

Development Bank of Japan Inc.

–

820,000–

820,000

2,550,000–

2,550,000–

6,400,000––

6,400,000

1.093% Mar. 30, 2017

1,000,000––

1,000,000

1.027% Dec. 5, 2019–

3,000,000–

3,000,000

1.265% Jun. 26, 2020

Mizuho Corporate Bank, Ltd.
(Note 13)
Mizuho Corporate Bank, Ltd.
(Note 13)
Mizuho Corporate Bank, Ltd.
(Note 13)
Mizuho Corporate Bank, Ltd.
(Note 13)

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation

2.449%

2.390%

3.190%(Note 7)(Note 8)(Note 6)1.449% Jun. 25, 2021
2.440%(Note 9)

Taiyo Life Insurance Company

1,000,000––

1,000,000

1.275% Sep. 24, 2015

Taiyo Life Insurance Company–

1,000,000–

1,000,000

0.949% Jun. 4, 2018

The Nishi-Nippon City Bank, Ltd.

3,000,000––

3,000,000

1.149% May 27, 2016

Meiji Yasuda Life Insurance
Company

3,736,000–

66,0003,670,000

1.800%The Bank of Fukuoka, Ltd.

2,000,000––

2,000,000

1.170% Jul. 7, 2016

The Bank of Fukuoka, Ltd.

2,000,000––

2,000,000

0.902% Oct. 9, 2015

5,000,000––

5,000,000

1.184% Aug. 29, 2017

1,000,000––

1,000,000

0.924% Aug. 31, 2015

1,000,000––

1,000,000

0.843% Jun. 26, 2015

4,000,000––

4,000,000

1.093% Mar. 30, 2017

Mitsubishi UFJ Trust and Banking
Corporation
Mitsubishi UFJ Trust and Banking
Corporation
Mitsubishi UFJ Trust and Banking
Corporation
Mizuho Trust & Banking Co., Ltd.
Mizuho Trust & Banking Co., Ltd.

(Note 10)–3,000,000–

3,000,000

1.076% Feb. 4, 2020

2,000,000––

2,000,000

1.093% Mar. 30, 2017

1,000,000––

1,000,000

0.738% Sep. 30, 2015

1,000,000––

1,000,000

0.738% Sep. 30, 2015

The Minato Bank, Ltd. (Note 11)

800,000––

800,000

0.738% Sep. 30, 2015

The Yamaguchi Bank, Ltd. (Note 11)

500,000––

500,000

0.738% Sep. 30, 2015

The Chiba Kogyo Bank, Ltd.
(Note 11)

100,000––

100,000

0.738% Sep. 30, 2015

5,000,000––

5,000,000

1.397% Apr. 5, 2019

Resona Bank, Limited
The Tokyo Tomin Bank, Limited(Note 11)
The Bank of Yokohama, Ltd.
(Note 11)

Shinsei Bank, Ltd.

67

IV. Financial Statements

LenderAverage
Decrease
Balance as of
Balance as of
Increase during
Interest Rateduring theJanuary 1,
June 30, 2013
the Period(Note 2)
Period2013(thousand yen)(thousand yen)
(Note 3)(thousand yen)(thousand yen)

Repayment
Date

Use

Remarks

Long-Term Loans Payable (Note 1)
Sompo Japan Insurance Inc.

2,000,000––

2,000,000

0.981% Oct. 11, 2016

Sompo Japan Insurance Inc.

2,000,000––

2,000,000

0.874% Dec. 25, 2015

The Chugoku Bank, Ltd.

2,000,000––

2,000,000

0.902% Oct. 9, 2015

The Iyo Bank, Ltd.

1,000,000––

1,000,000

0.902% Oct. 9, 2015

The Hachijuni Bank, Ltd.

1,000,000––

1,000,000

Aozora Bank, Ltd.

900,000––

900,000

Aozora Bank, Ltd.

2,000,000––

2,000,000

Unsecured
Unguaranteed/(Note 4)
Non0.994% Jul. 3, 2017
Subordinated1.178% Aug. 8, 2019

Aozora Bank, Ltd.

2,000,000––

2,000,000

0.985% Aug. 25, 2017

Aozora Bank, Ltd.

2,000,000––

2,000,000

1.146% Aug. 30, 2018

The Shinkumi Federation Bank–

3,000,000–

3,000,000

0.786% Feb. 5, 2018

ORIX Bank Corporation–

1,000,000–

1,000,000

0.786% Feb. 5, 2018

100,439,000

11,820,000

12,069,000

100,190,000

Total

0.902% Oct. 9, 2015

(Note 1) Amounts of long-term loans payable (excluding current portion of long-term loans payable) to be repaid within five years after the date of the balance sheet are as follows.

Long-term loans payable

Due after One Yearthrough Two Years(thousands of yen)
6,332,000

Due after Two Years
through Three Years(thousands of yen)
26,732,000

Due after Three Years
through Four Years(thousands of yen)
23,732,000

Due after Four Years
through Five Years(thousands of yen)
20,374,000(Note 2)	The average interest rates are weighted-average figures during the period and are rounded to the third decimal place. Furthermore, fees related to loan arrangement paid to the above
lenders are not included.
(Note 3) Short-term loans payable are floating-rate loans payable. Long-term loans payable are fixed-rate loans payable, except those that fall under the category of Note 11.
(Note 4)	Funds are used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable and redemption of investment corporation
bonds, etc.
(Note 5)	The loans payable were subject to repayment of 25 million yen on June 27, 2009 and thereafter every 6 months. In addition, repayment of 820 million yen was made on maturity date June27, 2013.
(Note 6)	The loans payable are subject to repayment of 100 million yen on December 27, 2009 and thereafter every 6 months. In addition, repayment of 2,100 million yen will be made on maturity
date June 27, 2019.
(Note 7)	The loans payable are subject to repayment of 100 million yen on December 25, 2009 and thereafter every 6 months. In addition, repayment of 5,100 million yen will be made on maturity
date June 27, 2014.
(Note 8)	The loans payable are subject to repayment of 83 million yen on December 27, 2009 and thereafter every 6 months. In addition, repayment of 4,253 million yen will be made on maturity
date June 27, 2014.
(Note 9)	The loans payable are subject to repayment of 50 million yen on December 25, 2009 and thereafter every 6 months. In addition, repayment of 2,550 million yen will be made on maturity
date June 27, 2014.
(Note 10)	The loans payable are subject to repayment of 66 million yen on June 24, 2012 and thereafter every 6 months. In addition, repayment of 3,208 million yen will be made on maturity dateJune 21, 2018.
(Note 11) The loans are with floating interest rates.
(Note 12)	On May 31, 2013, JPR repaid 5,000 million yen in short-term loans payable to Mizuho Corporate Bank, Ltd. borrowed on March 21, 2013 prior to the repayment date. On May 31, 2013,
JPR repaid 2,000 million yen in short-term loans payable to Sumitomo Mitsui Banking Corporation borrowed on March 21, 2013 prior to the repayment date.
(Note 13) Mizuho Corporate Bank, Ltd. was renamed to Mizuho Bank, Ltd. on July 1, 2013 in accordance with the merger with Mizuho Bank, Ltd.

68

Japan Prime Realty Investment Corporation(8) Report of Independent Auditors69

IV. Financial Statements(9) Other Notes (Information only)(Property and Equipment Leased to JPR)
22nd Fiscal Period(July 1, 2012 – December 31, 2012) (Reference)

23rd Fiscal Period(January 1, 2013 – June 30, 2013)

No property and equipment was leased to JPR

No property and equipment was leased to JPR(Transactions with Interested Parties)
22nd fiscal period (July 1, 2012 – December 31, 2012) (Reference)

Attribute

Percentage
of NumberofInvestment
Business Description or Units Held
Name of Company, etc.
Occupation
Among
Total
Number ofInvestment
Units

Transactions

Repaymentof short-termloans payable
Short-termloans payable
Asset Custodian

Mizuho Trust &Banking Co., Ltd.

Banking business andtrust business–––
Interest
expenses

Transaction
Amount(thousands ofyen)

Account

Balance at
End of Period(thousands ofyen)

2,000,000––

1,000,000––

Current portionof long-termloans payable
Long-term–loans payable
Accrued
43,457
expenses–

3,000,000
4,000,000
931(Note) Transaction terms are determined based on prevailing market conditions.

23rd fiscal period (January 1, 2013 – June 30, 2013)

Attribute

Asset Custodian

Percentage
of NumberofInvestment
Business Description or Units Held
Name of Company, etc.
Occupation
Among
Total
Number ofInvestment
Units

Mizuho Trust &Banking Co., Ltd.

Banking business andtrust business(Note) Transaction terms are determined based on prevailing market conditions.

70–

Transactions

Repayment oflong-term loans
payableLong-termloans payable
Interest
expenses

Transaction
Amount(thousands ofyen)

3,000,000

Account

Balance at
End of Period(thousands of
yen)

–

–

Long-termloans payable
Accrued38,550expenses

3,000,000

7,000,000624

V. Investor Information

Japan Prime Realty Investment Corporation

Status of Investment Unit Price (as of August 6, 2013)
Trading
Market capitalization: ¥230.9 billion
Volume¥564,000 (May 7, 2007)(units) High:¥130,300 (October 28, 2008)
32,000 Low:

Unit price at end of
23rd Fiscal Period:

28,000

Trading volume (units)

Unit price (yen) Unit

Price
580,000¥303,500 (June 28, 2013)

520,000

Offer price at additional offering: ¥449,820

24,000460,000

20,000400,000

16,000340,000

Offer price at additional offering: ¥272,440

12,000280,000

Offer price at additional offering: ¥237,160
8,000

220,000

Offer price at IPO: ¥200,000

4,000

Offer price at additional offering: ¥194,610
160,000
Offer price at additional offering: ¥168,1010

100,000

Jun. 14 Jul. 1 Jan. 6 Jul. 1 Jan. 5 Jul. 1 Jan. 4 Jul. 1 Jan. 4 Jul. 3 Jan. 4 Jul. 2 Jan. 4 Jul. 1 Jan. 5 Jul. 1 Jan. 4 Jul. 1 Jan. 4 Jul. 2 Jan. 4 Jul. 2 Jan. 4 Aug. 7
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2002
2003
(Note) Unit prices are based on closing prices.

Breakdown of Unitholders (as of June 30, 2013)
Other domestic
corporations

Foreign investors

285

213

(2.04%)(1.52%)(6.18%)

Foreign investors

209,078 units

Financial institutions(including securities firms)

Number ofunitholders
by investor type(1.02%)

13,965143

Individuals

51,023 units(25.34%)

Number ofinvestment units
by investor type

Other domestic
corporations

81,343 units
Individuals

825,000
units(9.85%)

Financial institutions(including securities firms)

483,556 units

13,324(58.61%)(95.40%)(Note) The composition ratio is rounded to the second decimal place.

Annual Schedule (Provisional)
December

September

Sending of asset management report for the fiscal period ending June
Start of cash distributions for the fiscal period ending June
Information disclosure

AugustAnnouncement of financial results
for the fiscal period ending June

June

Fiscal term ends

on the website as
appropriate

March

Fiscal term ends

February

Announcement of financial results
for the fiscal period ending December

Start of cash distributions for the fiscal period ending December
Sending of asset management report for the fiscal period ending December

71Notes for Investors
Fiscal Period Ends

June 30 and December 31 of each year

General Meeting of Unitholders

More than once every two years

Base Date of General Meeting of Unitholders The date designated pursuant to Article 12-2 of JPR’s Articles of Incorporation
Cash Distribution Payment Eligibility
Transfer Agent

Unitholders of record as of June 30 and December 31 of each year
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo
Main Branch, Stock Transfer Agency Division

Location of Records

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

Mailing Address

Mizuho Trust & Banking Co., Ltd.
2-8-4 Izumi, Suginami-ku, Tokyo 168-8507

Contact by Phone

0120-288-324

Listing

Tokyo Stock Exchange (Securities Code: 8955)

Procedures for Change of Address
For filing or inquiring about a change of address, please contact your securities company with whom you have an account.
For unitholders who have not utilized Japan Securities Depository Center, Inc. before the dematerialization of stock certificates, accounts (special accounts)
have been opened at Mizuho Trust & Banking Co., Ltd., JPR’s transfer agent. For filing or inquiring about a change of address and other matters with regard
to your special account, please direct them to the contact number indicated above.
Cash Distributions
Cash distributions can be collected by bringing the “unitholder dividend receipt” to the nearest Japan Post Bank main or branch office, sub-branch officeor post office (bank agent) in Japan. If the collection period has elapsed, please make your collection by designating the collection method on the back of
the “unitholder dividend receipt” and mailing it to Mizuho Trust & Banking’s Stock Transfer Agency Division. Cash distributions can also be collected at
the main or branch offices of Mizuho Trust & Banking (excluding the Trust Lounge) and Mizuho Bank, Ltd. (Mizuho Securities Co., Ltd. (excluding theCustomer Plaza) only provides intermediation services).
If you wish to designate a transfer of cash distributions to a bank, etc., please contact your securities company (if you have an account with the company) or
Mizuho Trust & Banking (if a special account has been opened), as in the case of changing the address, etc. above.
(Note)	According to the provisions of JPR’s Articles of Incorporation, cash distributions will become irretrievable if they remain unclaimed for three full years from the date on which payment commenced.
We advise that cash distributions be received as soon as possible.