21st

Twenty-First Fiscal Period Business Report
January 1, 2012 - June 30, 2012
Japan Prime Realty Investment Corporation

Message to Our Unitholders
We at Japan Prime Realty Investment Corporation (JPR) would like to express our
sincere gratitude for the continued loyal patronage and support you have extended
to us.
As we have settled the 21st fiscal period (January 1, 2012 – June 30, 2012), allow
us to provide you, our unitholders, with an overview of the asset management andfinancial results of JPR for the period.
First, in terms of the portfolio, JPR newly acquired Otemachi 1-6 Plan (tentativename) (land with land leasehold), located in what is recognized to be a primary officelocation in central Tokyo, at an acquisition price of 36 billion yen. The property
is one of the largest assets owned by JPR and will serve as the new flagship of theportfolio, which was expanded through this new acquisition to 58 properties or 380.9
billion yen on an acquisition price basis as of the end of the 21st fiscal period.
Second, in financing, JPR continued efforts to secure a stable financial standing
during the fiscal period by conducting fund procurement taking into consideration
the diversification of redemption dates, etc. and working to extend procurement sources. Moreover, as the abovementioned acquisition was funded through borrowings, JPR’s outstanding interest-bearing debt was 195.0 billion yen
at the end of the period under review.
As for the financial results of the 21st fiscal period, while the occupancy rates of existing properties decreased slightly,
the land rent revenue from the new property acquired during the period helped boost overall earnings. This and otherfactors led JPR to post 12,345 million yen in operating revenue, 4,597 million yen in ordinary income and 4,596 million
yen in net income.
As a result, the cash distribution per unit for the 21st fiscal period came to 6,430 yen.
Going forward, JPR will continue working with Tokyo Realty Investment Management, Inc., our asset managementcompany, to realize stable growth of our portfolio over the medium to long term by conducting prudent and solid asset
management. Through such efforts and commitment, we are dedicated to meet the expectations of our unitholders.
We ask for your continued understanding and support of our operations.

Hirohito Kaneko
Executive Officer
Japan Prime Realty Investment Corporation

Contents
Message to Our Unitholders
Corporate Profile
Our Corporate Strengths and Highlights
Message from Our Asset Manager
Account Highlights
Investment Unit Status
Status of Unitholders
Portfolio Topics
Property Location
List of Properties
Major Tenants
Overview of Portfolio Properties
Birth of JPR and Its StructureMembers of the Board of JPR
Overview of the Asset Manager
Management of the Asset Manager

1
2
4
8
9
10
11
14
16
19
20
28
29
30
36

Overview of Asset Management
Overview of the Investment Corporation
Status of JPR’s Assets Under Management
Capital Expenditures of Owned Real Estate
Expenses and Liabilities
Related-Party Transactions
Balance Sheets
Statements of Income and Retained Earnings
Statements of Unitholders' Equity
Statements of Cash Flows
Notes to Financial Statements
Report of Independent Auditors
Policies with Respect to Certain Activities
Investor Information

37
45
47
52
53
59
62
64
65
66
67
83
84
89

Corporate Profile
Japan Prime Realty Investment Corporation (JPR) was incorporated on September 14, 2001 as a Japanese
investment corporation (toshi hojin) under the Act on Investment Trusts and Investment Corporations
with the capacity to own and operate real estate and real estate-related assets. This type of investment
corporation is commonly referred to as a J-REIT. Pursuant to the ITA, we are not permitted to have
employees and we outsource basically all of our operations and activities to third parties, including Tokyo
Realty Investment Management, Inc., the Asset Manager.
Our portfolio currently consists of office and retail properties in Japan, with an emphasis on officeproperties in the greater Tokyo area. As of the end of the 21st fiscal period, we own 58 properties,
consisting of 44 office properties and 14 retail properties. Forty-four of our properties are located in thegreater Tokyo area, and our other properties are located in other cities in Japan. These 58 properties
contain a total leasable area of approximately 434,340 m2 as of June 30, 2012. Moreover, entering the 22nd
fiscal period, we acquired Yakuin Business Garden, an office property in the “other cities” category, on
August 8, 2012 (acquisition price: 10.9 billion yen). The acquisition has increased the total leasable area to450,950 m2.
We intend to continue selectively acquiring office and retail properties in order to expand and increase thevalue of our portfolio and to achieve sustainable growth with stable cash distributions to our unitholders
over the medium to long term. Our current investment strategy focuses primarily on office properties in thegreater Tokyo area, although we also invest in retail properties in the greater Tokyo area and we diversify
our investment portfolio geographically by investing in office and retail properties in major cities outside
the greater Tokyo area.
Our units have been listed on the J-REIT section of the Tokyo Stock Exchange since June 14, 2002,
following the initial public offering of our units. Our registered head office is located at 4-16 Yaesu
1-chome, Chuo-ku, Tokyo 103-0028, Japan. Our main telephone number is +81-3-3231-1051.

1

Our Corporate Strengths and Highlights
Our proven ten-year track record in achieving steady growth since our initialpublic offering.
We have steadily increased the asset value of our portfolio to maintain stable distributions to ourunitholders since our initial public offering in June 2002. We hold assets with an aggregate acquisition priceof approximately ¥380,984 million (¥391,980 million after the acquisition of Yakuin Business Garden),which is one of the largest holdings among J-REITs with a portfolio of office and retail properties.

Investments focused on office properties in the greater Tokyo area.
As of June 30, 2012, we own 58 properties in Japan. Based upon
our internal classifications, 44 of our current properties are officeproperties and 14 are retail properties. Our portfolio is focusedon office properties located in the greater Tokyo area, which we
believe have medium- to long-term growth potential. Of the 58
properties, properties in the greater Tokyo area constitute 84.7% of
our total portfolio, office properties constitute 75.0% of our total
portfolio and office properties in the greater Tokyo area constitute
68.0% of our total portfolio, each on an acquisition price basis.

End of the 21st Fiscal Period
Other Cities 15.3%
Retail(Other Cities)
8.3%
Office(Other Cities)
7.0%
RetailOffice(Greater
Tokyo Area)(Central Tokyo)

16.7%

47.8%

Office(Greater Tokyo)

20.3%* Greater Tokyo Area is 82.3%, Other Cities is 17.7%; Office (Central Tokyo) is 46.4%, Office (Greater Tokyo) is 19.7%, Retail (Greater Tokyo Area)
is 16.2%, Office (Other Cities) is 9.6% and Retail (Other Cities) 9.6% as of September 26, 2012.
* The figures have been rounded to the first decimal place.

Greater Tokyo Area 84.7%

Stable financial conditions.
We believe that we have prudent financial governance and effectively control our level of interest-bearing
debt. Although under our Asset Manager’s guidelines, we are required to keep our asset-based loan-to-value(LTV) ratio at or below 55%, we have set our target range of capitalization-based LTV as approximately
40% to 50%, although our capitalization-based LTV may diverge from the target range depending on thecircumstances. In addition, we have diversified maturity dates, have obtained fixed rates for long-term loans
and, to avoid refinancing risks, have established a commitment line in total of ¥28 billion.

Environmental policies that strengthen our brand.
We have adopted environmental policies which we believe
are some of the best among the environmental policies of
J-REITs and public companies in Asia, as reflected by certain
third-party environmental assessments. Part of our brandstrategy includes ensuring customer satisfaction throughsafety and energy-saving services and facilities. To this end,
we have implemented energy conservation policies with anemphasis on cost and energy management, environmental
property analysis, agreements with utility companies, andintroduction of energy-efficient equipment and facilities.

2

Amenity

SafetyCreating a comfortable
space for workers

Providing safety
and security

Service
Providingattentive services

Save Energy
Operating facilities
in an environmentallyconscious manner

Distribution per Unit
20th Fiscal Period (actual)

21st Fiscal Period (actual)

22nd Fiscal Period (forecast)¥5,876¥6,430¥6,000Assets Held

¥380,984 million¥344,984 million(20th period end)

(21st period end)

* Total assets held is ¥391,980 million as of September 26, 2012
(the date of JPR's latest Securities Report).

Occupancy Rate
Stable and High Occupancy

Average occupancy rate for the 1st through 21st fiscal periods
Occupancy rate for the 21st fiscal period

95.7%
94.8%

LTV (interest-bearing debt ratio to total assets)

Conservative operations with LTV at less than 50%

45.2 %(20th period end)

49.3 %(21st period end)

*LTV is 45.2% as of September 26, 2012.

Credit Ratings Assigned to JPR
R&I

AA(Stable)

Standard & Poor's(Long-term)(Short-term)(Stable)(Stable)A A-1

Moody's

A3(Negative)3

Message from Our Asset Manager
investment corporation in Japan, and as of June2012 is now in its tenth year. Its asset size has grownsteadily since listing, surpassing ¥390 billion as ofAugust 31, 2012, which JPR boasts is one of thelargest holdings among J-REITs with a combined
portfolio of office and retail properties.
JPR has also attained progress in diversifying
its portfolio and expanding the size per property
of its owned assets. In these endeavors, JPR seeks
to improve the quality of the portfolio on top of
realizing a quantitative expansion. The occupancy
rate of the entire portfolio has been kept stable at ahigh level, standing at 95.7% on average. This has
enabled JPR to deliver dividends 21 times in total
through the latest fiscal period, achieving a trackrecord with an average distribution per unit of

Satoshi Okubo¥6,185.

President and Chief Executive Officer (CEO)Tokyo Realty Investment Management, Inc.

Focused Investment on Tokyo Office Properties
I would like to extend my heartfelt gratitude to you,

In 2009, following the Lehman Shock, JPR reviewed

our unitholders, for the support you have given

its portfolio management standards with an aim toto Japan Prime Realty Investment Corporation

improve the portfolio quality, and determined to(JPR). On behalf of Tokyo Realty Investment“make investment focused on office properties inManagement, Inc., the asset management company

Tokyo (Central Tokyo and Greater Tokyo)” as itsof JPR, I would like to explain the overview ofprime endeavor for external growth.

management results and future strategies for JPR.

In the about three years to date, JPR conductedfocused investment in 10 office properties in Tokyo

Ten-Year Track Record Since Listing

for a total of ¥117.6 billion (acquisition price basis).

JPR was listed on June 14, 2002 as the fifthConsequently, the percentage of “office properties

End of the 1st Fiscal Period (June 30, 2002)

End of the 21st Fiscal Period (June 30, 2012)
Other
Cities

15.3%
Other Cities

42.1%

GreaterTokyo Area

57.9%

+26.8%

GreaterTokyo Area

84.7%

*Greater Tokyo Area is 82.3% and Other Cities is 17.7% as of September 26, 2012.

4

in Tokyo” in the portfolio expanded from 43.5%

Environment Surrounding Real Estate Businessin the 1st fiscal period to the current 66.1%, with

Although the Japanese economy is on a path to aan asset size of approximately ¥260 billion for 34

modest recovery, the poor business performance ofproperties.

large manufacturers and other companies is feeding

These Tokyo office properties, in which JPR
invested, were acquired when transactions ofa growing sense of economic stagnancy.
Meanwhile, the real estate industry is benefitting

excellent properties in the for-sale real estate market

from the monetary easing policy by the Bank

were limited. Once the office building leasingof Japan, and also sees financial institutions

market enters a recovery cycle, the asset value ofcontinuing to take a positive attitude in lending.

these properties can be expected to increase inWith IPOs and public offerings in the REIT market

association with a recovery in rent levels. As such,being conducted one after another, conditions

JPR recognizes that these properties have helped

for revitalizing the for-sale real estate market are

improve the quality of its portfolio, resulting inbecoming full-fledged.

heightening its growth potential going forward.

In the office building leasing market, against a
backdrop of the improving supply and demand

Overview of Financial Resultsbalance in Tokyo, the volume of new demand

JPR achieved a significant period-on-period

has increased significantly due to the increase inincrease both in revenues and profits, thanks torelocations for office integration and consolidationsuch factors as the acquisition of Otemachi 1-6 Plan

by proactive tenants who consider current prices to(Land with Leasehold Interest) (tentative name) andhave hit bottom. The vacancy rates announced by

the positive impact of accompanying property taxes

major brokers also show a continuously downward

being recorded as acquisition costs. Distribution

trend. As for the rent levels, we believe rents will

per unit was ¥6,430, slightly higher than the ¥6,400

not start rising until after the end of 2013, since it

forecast at the beginning of the fiscal period.

will take more time for the continuous demand for

For the 22nd fiscal period ending December

office space to further decrease the vacancy rate.

2012, earnings from existing portfolio properties
are expected to decrease slightly due to “secondary

Future Investment Strategy

vacancies” from tenant relocations as a result of the

JPR intends to continue focused investment onlarge volume of Tokyo office space supplied in 2012,

office properties in Tokyo to enhance its ability toand due to having to meet the continued requests

grow following the market recovery, while creatingfrom tenants to lower rents, etc. Nevertheless, aa portfolio diversified in terms of asset type (officesignificant period-on-period increase in revenues

and retail properties) and location (Tokyo and otherand profits is anticipated due to the full-period

cities).

contribution of Otemachi 1-6 Plan as well as theGoing forward, as we work to further expand

large contribution of Yakuin Business Garden,

JPR’s investment in office properties in Tokyo, we

an office property in a regional city, which JPR

will make the best use of our sponsors’ support.

acquired in August 2012.

In particular, focus will be placed on acquiring

Distribution per unit is forecast to be ¥6,000 underlarge-scale development properties from Tokyo

the impact of the dilution caused by the global

Tatemono, our main sponsor. Moreover, weoffering of investment units conducted in July 2012.

intend to pursue the reinforcement of the supply
5Message from Our Asset Manager
of properties to JPR with our other four sponsors

strategic asset replacement for those that do notfrom a long-term perspective.

allow expectations of sustainable growth in the

Furthermore, JPR has a track record of property

future. In addition, JPR will conduct strictly

acquisitions from third parties. One method isselective investment in blue-chip properties thatthe utilization of preferential negotiation rights.

can maintain a certain degree of stable revenues toAdditionally, acquiring properties from other co-complement the stability of earnings from the entire

owners and such by utilizing preferential negotiation

portfolio.

rights should, if realized, enable acquisitions
has been granted preferential negotiation rights for

Property Acquired via Sponsor Support:
Otemachi 1-6 Planthe land with leasehold interest it owns and mostA typical example of “focused investment on officeof its 20 office properties in Tokyo currently heldproperties in Tokyo” was materialized in the landin the form of co-ownership or compartmentalizedwith leasehold interest for Otemachi 1-6 Plan, which

ownership.

was acquired in March 2012.

without excessive competition in the market. JPRWith regard to retail properties nationwide and

The property’s features include superiority as

office properties in other cities, JPR will conduct

a property situated in a prime location in central
Tokyo; no burden of depreciation, as it is landwith leasehold interest and highly contributes
to dividends; and NOI yield of 3.6%, which isrelatively high as it surpasses the average yield after
depreciation of office properties in central Tokyo
owned by JPR.
Such highly scarce properties like this are seldom
available in the for-sale real estate market, and thus
the acquisition was only realized due to the supportof the sponsor.
Moreover, preferential negotiation rights havebeen established for the building currently underdevelopment on the land JPR acquired and, if thebuilding is to be sold in the future, JPR shall be able
to preferentially negotiate with the seller.

Internal Growth from Recovery in Occupancy
Rates
The average occupancy rate of JPR’s portfolio was
94.8% for the 21st fiscal period. We anticipate that,after decreasing to 93.9% in the 22nd fiscal period
under the impact of contract cancellations at someproperties, the occupancy rate will increase to95.8% in the 23rd fiscal period. This figure for the6

22nd period is rather conservative and we believe

financial operations built upon stably controllingthat it will end up at a higher level as the number

LTV and other measures, as it conductsof private views by tenants are currently increasing

refinancing to long-term fixed interest debt as wellsignificantly, centering on office properties inas diversifying and leveling repayment dates ofTokyo, due to JPR’s leasing reinforcement measuresborrowings to address future interest rate rises andtaking effect.

refinancing risks.

Although more time is required before office rents
will start to rise, JPR will work to increase earnings

In Closing

from internal growth by improving the occupancy

JPR was able to regain its distribution per unit torate.

the ¥6,000 level for the 21st fiscal period ended June2012.

Conservative Financial Operations

One of the basic policies of fund management

In July 2012, JPR conducted its fifth public offering

established for JPR is to stably maintain itsof investment units through a global offering (Reg-S)

distribution per unit at the ¥6,000 level for normal– a first for JPR. Demand from investors within andoperations without extraordinary events.

outside Japan successfully rose to about five times

Despite the business environment remaining

the offering volume, despite an environment ofsevere, we will endeavor to continue stable portfolio

concerns over the European sovereign debt problem,

management by increasing the occupancy rate andand JPR successfully raised funds totaling ¥20.7

improving NOI. We will also work to conduct

billion. The fund procurement led to JPR’s LTV (onstrictly selective investment in office properties

a total asset basis), which had risen after acquiringin Tokyo and other blue-chip properties, and sell

Otemachi 1-6 Plan, to decrease from 49.3% to 45.2%

properties with unrealized losses. Through these andand aided in JPR regaining its capacity for further

other measures, we aim to construct a portfolio thatdebt financing to acquire properties.

will realize the steady growth of JPR into the future

JPR is resolved to continue its conservativeand enhance unitholder value.

Career HighlightszJoined Tokyo Tatemono Co., Ltd. in 1977.

zServing in the Second Building Leasing Department from 1996, engagedin overall management and administration.

z

Appointed General Manager of Residential Management Department in1998 and supervised development, sale and operational management.

zAppointed Director and Head of Kansai Branch Office in 2005 andsupervised commercial properties, residential development and urban
development businesses.

zJoined Tokyo Realty Investment Management, Inc. in June 2010, took
office as President and CEO and has been supervising the company inthat capacity to date.

7

Account Highlights(All amounts in millions of yen unless otherwise stated)

17th Fiscal Period
endedJune 2010

18th Fiscal Period
ended
December 2010

19th Fiscal Period
endedJune 2011

20th Fiscal Period
ended
December 2011

21st Fiscal Period
endedJune 2012

Operating revenues

12,314

11,87011,529

11,772

12,345

Ordinary income

4,964

4,039

4,075

4,201

4,597

Net income

4,963

4,039

4,010

4,200

4,596

Total cash distributions

4,840

4,061

4,011

4,201

4,597

Total assets

358,339

360,904

360,004

360,699

396,017

Total unitholders' equity

176,303

175,502

175,452

175,640

176,035

49.2

48.6

48.7

48.7

44.5

Unitholders' equity per unit (yen)246,578

245,458

245,387245,651

246,204

Cash distribution per unit (yen)

6,770

5,680

5,611

5,876

6,430

Operating Revenues and Net
IncomeTotal Assets andTotal Unitholders' Equity

Equity ratio (%)

15,000Cash Distribution per Unit
8,000

400,000

350,000
12,0006,000

300,000

250,000

9,000

4,000

200,000
6,000

150,000

100,000

2,000

3,000
50,000

0

8

17th
18th
19th
20th
21st
Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period

0

17th
18th
19th
20th
21st
Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period

Operating Revenues (million yen)

Total Assets (million yen)

Net Income (million yen)

Total Unitholders' Equity (million yen)

0

17th
18th
19th
20th
21st
Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period

Cash Distribution (yen)Investment Unit Status
Our units are listed on the Tokyo Stock Exchange. The following table indicates, for the periods indicated,
the trading price and trading volume of our units on the Tokyo Stock Exchange and:z the high and low levels of the Nikkei Stock Average, an index of 225 selected stocks listed on the First Sectionof the Tokyo Stock Exchange, published by Nikkei Inc.;z the high and low levels of the TOPIX, which is a weighted index of the market value of all stocks tradedon the First Section of the Tokyo Stock Exchange, published by the Tokyo Stock Exchange; andz the high and low levels of the Tokyo Stock Exchange REIT Index, which is a capitalization-weighted index
based on all J-REITs listed on the Tokyo Stock Exchange, published by the Tokyo Stock Exchange.

Historical Unit Price
Trading
Volume32,000

As of August 7, 2012

Trading Volume (units)

Market capitalization: ¥171.0 billion¥564,000 (May 7, 2007)
High:¥130,300 (October 28, 2008)
Low:
Unit price at end of¥224,200 ( June 29, 2012 )21st Fiscal Period:

28,000

Unit Price (yen)

Unit
Price
580,000

520,000

PO
Offering: ¥449,820

24,000460,000

20,000400,000

16,000340,000

PO
Offering: ¥272,440
PO
Offering: ¥237,160

12,000Listed Tokyo Stock Exchange
Offering: ¥200,000

8,000

280,000

220,000

PO
Offering: ¥168,101

4,000

160,000

0
Ju

ne

Ju

ly
1
,2
00
2

14

Ja

n.

6,

Ju

ly

20

03

1

Ja

n.

5,

Ju

ly

20

1

Ja

04

n.

4,

Ju

ly

20

1

Ja

05

n.

4,

Ju

ly

20

06

1

Ja

n.

4,

Ju

ly

20

1

Ja

07

n.

4,

Ju

ly

20

1

Ja

08

n.

5,

Ju

ly

20

1

Ja

09

n.

4.

Ju

ly

20

1

Ja

10

n.

4,

Ju

ly

20

1

Ja

11

n.

100,000Aul
4, y 1 g. 7
20
12
Ju

Note: Unit prices are based on closing prices.

Market Price Information
Tokyo Stock Exchange
Price per Unit (1)Calendar year 2010:
First quarter
Second quarter
Third quarter
Fourth quarter
Calendar year 2011:
First quarter
Second quarter
Third quarter
Fourth quarter
Calendar year 2012:
First quarter
Second quarter
Third quarter
Source: Bloomberg.

High

Low

208,100
224,900
207,300
253,200

172,900
187,700
173,900
189,000

257,500
238,300
214,800
204,000
238,300
243,000
236,000

Average
Daily
Trading
Volume of
Units

NikkeiStock Average

Tokyo Stock
Exchange REIT Index

TOPIX

High

Low

High

Low

High

Low

4,233
1,771
1,367
2,063

11,097.14
11,339.30
9,795.24
10,370.53

9,932.90
9,382.64
8,824.06
9,154.72

979.58998.90870.73908.01881.57841.42804.67803.12948.90999.13940.051,130.70

873.28875.18883.09944.42

192,600
210,000
192,800
173,700

2,187
1,381
1,303
1,174

10,857.53
10,004.20
10,137.73
9,050.47

8,605.15
9,351.40
8,374.13
8,160.01

974.63865.55874.34771.43766.73805.34728.85706.081,156.46
1,079.89
1,032.33
936.25926.83
1,018.94
912.43805.64

170,900
216,700
195,800

1,616
1,677
3,881

10,255.15
10,109.87
9,232.21

8,378.36
8,295.63
8,365.90

872.42856.05778.70725.24695.51
706.46996.381,004.16
1,021.46

819.42883.38933.00Note: (1) Based on the closing price.

9

Status of Unitholders
Breakdown of Unitholders at End of Period
Units
700,000

600,000

500,000

715,000 units
7.56%
54,073 units

715,000 units
7.44%
53,251 units

715,000 units
7.33%
52,430 units

715,000 units
7.34%
52,482 units

715,000 units
7.74%
55,399 units

11.58%
82,846 units

11.55%
82,627 units

11.46%
81,973 units

11.74%
83,982 units

11.27%
80,594 units

28.81%
206,019 units

27.97%
200,030 units

25.27%
180,711 units

25.37%
181,443 units

23.41%
167,425 units

Number ofUnitholders
28,00024,00020,000400,000

16,000300,000

12,000200,000

52.03%
372,062 units

53.01%
379,092 units

55.91%
399,886 units

55.53%
397,093 units

57.55%
411,582 units

100,000

8,000

4,000

0

0
17th Fiscal Period

18th Fiscal Period

Financial Institutions(including securities firms)

19th Fiscal Period

ForeignInvestors

Other Domestic
Corporations

20th Fiscal Period

Individuals

21st Fiscal Period

Number of Individual
Investors

Note: The composition ratio is rounded to two decimal places.

Principal Unitholders
The following table sets forth the number of units held by our principal unitholders and the percentage of our total
outstanding units as of June 30, 2012:
Number of Units
Held

Percentage of
Outstanding U nits(%)

Japan Trustee Services Bank, Ltd. (trust account)

143,607

20.08

The Nomura Trust and Banking Co., Ltd. (investment trust account)

44,278

6.19

Trust & Custody Services Bank, Ltd. (securities investment trust account)

39,390

5.50

Tokyo Tatemono Co., Ltd.

29,300

4.09

Northern Trust Company (AVFC) Account Singapore Clients (Standing proxy: The Hongkong and Shanghai
Banking Corporation Limited, Tokyo Branch)

27,258

3.81

The Master Trust Bank of Japan, Ltd. (trust account)

26,858

3.75

Kawasaki Gakuen

25,0003.49

Meiji Yasuda Life Insurance Company

24,0003.35

Nomura Bank (Luxemburg) S.A. (Standing proxy: Sumitomo Mitsui Banking Corporation)

17,832

2.49

Deutsche Securities, Inc.

9,256

1.29

386,77954.09

Unitholder

Total

10

Portfolio Topics
Property Acquired in the 22nd Fiscal Period

Yakuin Business Garden

C-20(Office)

The acquisition of the Yakuin Business Garden isin accordance with JPR's fundamental investment
policies and investment stance in an effort toenhance and stabilize its investment portfolio by
acquiring a new office building in a major local city.
Location

Fukuoka City, Fukuoka
Type of Ownership

Ownership
Acquisition Date

August 8, 2012
Acquisition Price¥10,996 million
Site Area

4,348.43 m2
Total Floor Space

22,286.35 m2
Structure/Floors

SRC/14F
Completed

January 2009

Aim of Property Acquisition
The Yakuin area where the property is located is near Kyushu’s largest business center, Tenjin in Fukuoka
City. The location is excellent for transportation as it connects to multiple train and bus routes. Also, thearea hosts an assemblage of major companies such as the Kyushu Electric Power Company. Completed in
January 2009, the property is equipped with the latest office specifications, is very spacious with a standard
floor area of 400 tsubos and a ceiling height of 2.8m, and exhibits a very open office environment with glass
wall curtains surrounding three sides. Another feature of the property is its high resistance to earthquakes as
it employs a seismic damping structure design. It also features excellent visibility as the site is connected toroads on all sides.
Therefore, JPR highly evaluates this property as a large-scale regional office building with excellent
competitiveness and ability to attract alternative tenants, with relatively high yields and stable profitability
compared to offices in Tokyo.

11

Portfolio Topics
Portfolio Growth and Change in Average Occupancy Rate
Occupancy Rate (%)
100

95.2

94.0

95

93.8

94.3

93.1

92.6

94.9

96.1

97.7

98.3

99.0

90
85

Total Acquisition Price (billion yen)
400

350

Office Properties
in the Greater Tokyo Area

Retail Properties

Office Properties
outside the Greater Tokyo Area

Cumulative Acquisition
Price of Disposed Properties

300

245.3

250

197.6

200

202.6

209.2

222.4

108.2

179.6
100.1

163.6
150

139.6
125.7

100

92.1

94.5

40.1

41.5
39.7

50

38.8
0

-50

52.7

13.2

99.2
77.4

13.2

100.1

91.2
43.1

57.5

43.9

45.2
47.9

47.9

39.7
33.2

100.1

48.3

45.2

45.2

77.0

93.9

50.0

57.2

63.8

-0.4

-6.2

-9.3

-9.3

-9.3

-14.4

38.2

38.2

40.4

-0.4

-0.4

End of Jun.
2002

End of Dec.
2002

End of Jun.
2003

End of Dec.
2003

End of Jun.
2004

End of Dec.
2004

End of Jun.
2005

End of Dec.
2005

End of Jun.
2006

End of Dec.
2006

End of Jun.
2007

1st Period

2nd Period

3rd Period

4th Period

5th Period

6th Period

7th Period

8th Period

9th Period

10th Period

11th Period

27

30

32

38

42

42

42

44

46

48

3.5

4.1

4.3

4.3

4.2

4.7

4.8

4.7

4.8

5.1

Number of25
properties
Acquisition
price per property 3.6

Notes:(1) “Asset size” represents the aggregate acquisition price of the properties in our portfolio as of the relevant date.
(2) “Cumulative Acquisition Price of Disposed Properties” represents the cumulative acquisition prices (at the time of acquisition) of the properties sold up to the relevant date and includes the relevant
amount in respect to the part of JPR Jingumae 432 which was sold on June 1, 2010.
(3) We changed our investment policy in 2009 to shift our focus to office properties in the greater Tokyo area so that properties in the greater Tokyo area would generally constitute between 80% and
90% of the aggregate investment amount of our portfolio, and office properties would generally constitute between 70% and 90% of the aggregate investment amount of our portfolio (previously,
the percentage of the properties in the greater Tokyo area was generally 60%, and the percentage of the office properties was generally 80% of the aggregate investment amount of our portfolio).
(4) The occupancy rate as of each date above represents the average occupancy rate for the fiscal period ended on such date. The average of all such occupancy rates shown above is 95.7%.

12

98.7

98.0

97.0

96.2

96.4

96.1

93.6

94.0

95.0

94.8

380.9

331.2
299.4
275.1

341.5

341.5

344.9

310.6

280.6
259.2

251.9
184.1

114.7

135.7

391.9

141.6

43.1

43.1

39.4

93.9

96.1

-14.4

209.5

219.8

219.8

259.2

223.2

172.9

37.5

31.1

31.1

26.5

26.5

26.5

26.5

26.5

99.5

95.3

95.3

95.2

95.2

95.2

95.2

95.2

95.2

-14.4

-18.1

-30.6

-30.6

-35.4

-35.4

-35.4

-35.4

-35.4

-35.4

End of Dec.
2007

End of Jun.
2008

End of Dec.
2008

End of Jun.
2009

End of Dec.
2009

End of Jun.
2010

End of Dec.
2010

End of Jun.
2011

End of Dec.
2011

End of Jun.
2012

Sep. 26,2012

12th Period

13th Period

14th Period

15th Period

16th Period

17th Period

18th Period

19th Period

20th Period

21st Period

49

50

52

51

53

55

56

56

57

58

59

5.1

5.5

5.3

5.8

5.8

6.0

6.1

6.1

6.0

6.5

6.6

13

Property Location(As of September 26, 2012)

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-12

14

Kanematsu 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.
Otemachi 1-6 Plan (tentative name)(land with land leasehold)

Retail
■ 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 Prefecture

All other areas in Japan

Shinjuku Ward
Shinagawa Ward
Shibuya WardB Greater Tokyo
Musashiurawa

B-5

Office● 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-7

Shinjuku

B-11
B-1
Kinshicho

TachikawaTokyo
ShibuyaChiba

B-2

ShinagawaMusashikosugi

B-4
KANAGAWA

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

B-6

B-5

Shin-Yokohama

B-12

Yokohama
Nihon-Odori

B-10

Retail
■ B-1
■ B-3
■ B-4
■ B-5

Musashikosugi(New Station)

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
Retail
■ C-1
■ C-3
■ C-4
■ C-5

OSAKA

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

FUKUOKA

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
15

List of Properties
As of June 30, 2012, we own 58 properties in Japan. Our current properties contain a total leasable areaof approximately 434,340 m2 as of the date. Based upon our internal classifications, 44 of our current
properties are office properties and 14 are retail properties.
Office Properties
The following tables provide basic summary information for our 44 current office properties as of June 30, 2012,
unless otherwise specified.

Property
Number

Property Name

Location

Percentage
Acquisitionof Portfolio Book Value
Land (m²)
Price (1)Acquisition (in millions)(in millions)Price (%)

Leasable Area
Owned orCo-ownedby JPR (m²)

Central Tokyo
A-1

Kanematsu Bldg.

Chuo-ku, Tokyo¥16,276

4.3¥14,893

1,751.13

7,994.02

A-2

Kanematsu Bldg. Annex

Chuo-ku, Tokyo

2,874

0.8

2,473

679.06

2,291.13

A-3

JPR Ningyo-cho Bldg.

Chuo-ku, Tokyo

2,100

0.6

1,987

550.062,804.56

A-4

Shin-Kojimachi Bldg.

Chiyoda-ku, Tokyo

2,420

0.6

2,411

657.803,318.81

A-5

JPR Crest Takebashi Bldg.

Chiyoda-ku, Tokyo

4,000

1.0

3,474

636.903,265.34

A-6

MS Shibaura Bldg.

Minato-ku, Tokyo

11,2002.9

10,918

8,992.18 (2)14,470.72

A-7

Gotanda First Bldg.

Shinagawa-ku, Tokyo

2,920

0.8

2,700

1,551.19

4,243.58

A-8

Fukuoka Bldg.

Chuo-ku, Tokyo

2,920

0.8

2,922

1,302.17

1,937.40

A-9

JPR Ichigaya Bldg.

Chiyoda-ku, Tokyo

5,100

1.3

5,303

1,058.04

4,224.96

A-10

Oval Court Ohsaki Mark West

Shinagawa-ku, Tokyo

3,500

0.9

3,145

4,006.00

4,088.44

A-11

Shinjuku Square Tower

Shinjuku-ku, Tokyo

10,1802.6

9,086

8,409.52 (3)11,150.78

A-12

BYGS Shinjuku Bldg.

Shinjuku-ku, Tokyo

15,121

4.0

15,8033,522.46

15,237.87

A-13

Across Shinkawa Bldg. Annex

Chuo-ku, Tokyo

710

0.2

625

858.481,253.39

A-14

Shinjuku Center Bldg.

Shinjuku-ku, Tokyo

21,0005.5

21,734

14,917.11

8,861.34

A-15

Minami Azabu Bldg.

Minato-ku, Tokyo

3,760

1.0

3,866

778.093,405.73

A-16

Shinagawa Canal Bldg.

Minato-ku, Tokyo

1,870

0.5

1,826

828.821,700.57

A-17

Rokubancho Bldg.

Chiyoda-ku, Tokyo

2,800

0.7

2,908

716.952,488.36

A-18

JPR Harajuku Bldg.

Shibuya-ku, Tokyo

8,400

2.2

8,745

1,205.07

4,760.09

A-19

Tokyo Tatemono Kyobashi Bldg.

Chuo-ku, Tokyo

5,250

1.4

5,259

547.103,499.31

A-20

JPR Nihonbashi-horidome Bldg.

Chuo-ku, Tokyo

5,100

1.3

5,138

937.595,299.86

A-21

JPR Sendagaya Bldg.

Shibuya-ku, Tokyo

15,0504.0

15,2842,217.49

6,177.74

A-22 (4)Ginza Sanwa Bldg.

Chuo-ku, Tokyo

3,400

0.9

3,607

1,119.27

1,899.27

A-23

Otemachi 1-6 Plan (Land with Leasehold
Interest)

Chiyoda-ku, Tokyo

36,0009.4

38,388

11,034.78

11,034.78

16

Property
Number

Property Name

Percentage
Acquisitionof Portfolio Book Value
Land (m²)
Price (1)Acquisition (in millions)(in millions)Price (%)

Location

Leasable Area
Owned orCo-ownedby JPR (m²)

Greater Tokyo
B-1

Arca East

Sumida-ku, Tokyo

5,880

1.5

4,662

3,755.01

7,022.76

B-2

JPR Chiba Bldg.

Chiba, Chiba

2,350

0.6

2,422

1,382.35

5,533.78

B-3

JPR Yokohama Nihon Odori Bldg.

Yokohama, Kanagawa

2,927

0.8

2,673

1,100.59

6,066.53

B-5

Shinyokohama 2nd Center Bldg.

Yokohama, Kanagawa

920

0.2

890

841.712,642.38

B-6

Kawaguchi Center Bldg.

Kawaguchi, Saitama

8,100

2.1

7,182

4,524.61

15,461.98

B-7

JPR Ueno East Bldg.

Taito-ku, Tokyo

3,250

0.9

3,129

1,242.97

6,490.05

B-8

Tachikawa Business Center Bldg.

Tachikawa, Tokyo

3,188

0.8

2,988

2,047.22

4,731.04

B-9

Rise Arena Bldg.

Toshima-ku, Tokyo

5,831

1.5

5,585

9,377.28 (5)6,023.39

B-10

Yume-ooka Office Tower

Yokohama, Kanagawa

6,510

1.7

5,991

12,011.00

12,015.15

B-11

Olinas Tower

Sumida-ku, Tokyo

31,3008.2

30,06527,335.29

23,987.40

B-12

Tokyo Tatemono Yokohama Bldg.

Yokohama, Kanagawa

7,000

1.8

7,001

1,110.28

6,494.09

Other Cities
C-1

Niigata Ekinan Center Bldg.

Niigata, Niigata

2,140

0.6

1,660

2,706.99

5,326.88

C-4

Tokyo Tatemono Honmachi Bldg.

Osaka, Osaka

4,150

1.1

4,181

1,432.64

7,162.60

C-7

JPR Hakata Bldg.

Fukuoka, Fukuoka

2,900

0.8

3,221

1,214.63

6,581.15

C-9

JPR Naha Bldg.

Naha, Okinawa

1,560

0.4

1,446

959.87

3,946.41

C-12

Sompo Japan Sendai Bldg.

Sendai, Miyagi

3,150

0.8

2,374

1,895.67

7,129.05

C-13

Sompo Japan Wakayama Bldg.

Wakayama, Wakayama

1,670

0.4

1,308

1,128.45

4,874.91

C-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

2,810

0.7

2,324

1,164.39

3,257.73

C-17

JPR Dojima Bldg.

Osaka, Osaka

2,140

0.6

2,063

668.113,930.21

C-18

JPR Hakata-chuo Bldg.

Fukuoka, Fukuoka

1,920

0.5

1,791

680.633,290.42

C-19

JPR Nagoya Fushimi Bldg.

Nagoya, Aichi

4,137

1.1

4,212

1,610.38

7,086.37¥285,784

75.0¥242,018 146,497.33

274,469.00

Total

Notes:(1) Acquisition price excludes consumption and other taxes.
(2) Includes land of the Trinity Shibaura property, which was developed together with
the MS Shibaura Bldg.

(3) Includes land for the entire redevelopment area that includes the Shinjuku Square Tower.
(4) All properties are office properties, with the exception of A-22, which has both offices andretail stores.
(5) Includes land for the entire redevelopment area that includes the Rise Arena Bldg.

17

List of Properties
Retail Properties
The following tables provide basic summary information for our 14 retail properties.

Property
Number

Property Name

Location

Percentage
AcquisitionofPortfolio Book Value
Land (m²)
Price (1)Acquisition (in millions)(in millions)Price (%)

Leasable Area
Owned orCo-ownedby JPR (m²)

Central Tokyo
A-1

JPR Shibuya Tower Records Bldg.

Shibuya-ku, Tokyo¥12,000

3.1¥11,658

1,010.47

8,076.85

A-2

JPR Daikanyama

Shibuya-ku, Tokyo

2,160

0.6

2,202

277.12651.29A-3

JPR Jingumae 432

Shibuya-ku, Tokyo

4,275

1.1

4,347

198.101,027.33

A-4

Shinjuku Sanchome East Bldg.

Shinjuku-ku, Tokyo

2,740

0.7

2,739

2,578.69

2,347.81

A-5

Yurakucho Ekimae Bldg. (Yurakucho Itocia)

Chiyoda-ku, Tokyo

3,400

0.9

3,383

6,808.12

1,101.92

Greater Tokyo
B-1

Tanashi ASTA

Nishitokyo, Tokyo

10,2002.7

7,827

12,326.30

31,121.71

B-3

Cupo-la Main Bldg.

Kawaguchi, Saitama

2,100

0.6

1,905 15,008.28 (2)5,963.00

B-4

JPR Musashikosugi Bldg.

Kawasaki, Kanagawa

7,260

1.9

7,261

4,761.62

19,740.95

B-5

Musashiurawa Shopping Square

Saitama, Saitama

4,335

1.1

4,101

8,317.99

14,960.69

B-6

Kawasaki Dice Bldg.

Kawasaki, Kanagawa

15,0804.0

14,517

4,475.45

13,066.69

Other Cities
C-1

JPR Umeda Loft Bldg.

Osaka, Osaka

13,000

3.4

12,571

3,518.68

18,586.97

C-3

Benetton Shinsaibashi Bldg.

Osaka, Osaka

5,430

1.4

5,276

609.315,303.98

C-4

Housing Design Center Kobe

Kobe, Hyogo

7,220

1.9

6,665

3,994.47

35,444.13

C-5

JPR Chayamachi Bldg.

Osaka, Osaka

6,000

1.6

6,022

592.452,484.39¥95,200

25.0¥90,862

64,477.05

159,877.71

Total
Notes:(1) Acquisition price excludes consumption and other taxes.
(2) Includes land for the whole redevelopment area that includes the Cupo-la Main Bldg.

18

Major Tenants
Twenty Major Tenants by Leased Floor Area

TenantProperty

Leased Floor Area
as ofJune 30, 2012 (1)(m²)

Percentage to
Total Leased Floor
Area as of June 30,
2012 (1) (%)

ABC Development Corporation

Housing Design Center Kobe

35,444.13

8.6

Tokyo Tatemono Co., Ltd.

Shinjuku Square Tower (2)Shinjuku Center Bldg. (2)Kawasaki Dice Bldg. (2)33,213.32

8.1

The Seiyu, Ltd.

Tanashi ASTA

31,121.71

7.6

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

19,740.95

4.8

The Loft Co., Ltd.

JPR Umeda Loft Bldg.

18,586.97

4.5

Y.K. Tokyo Prime Stage

Otemachi 1-6 Plan (Land with Leasehold Interest)

11,034.78

2.7

Olympic Corporation

Musashiurawa Shopping Square

9,558.51

2.3

Tower Records Japan, Inc.

JPR Shibuya Tower Records Bldg.

8,076.85

2.0

Sompo Japan Insurance Inc.

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

7,461.38

1.8

Yuraku Real Estate Co., Ltd. (3)Rise Arena Bldg. (2)6,023.39

1.5

The Maruetsu, Inc.

Cupo-la Main Bldg.

5,963.00

1.5

Benetton Japan Co., Ltd.

Benetton Shinsaibashi Bldg.

5,303.98

1.3

Nitori Holdings Co., Ltd.

Musashiurawa Shopping Square

5,285.40

1.3

Hitachi Systems, Ltd.

JPR Nagoya Fushimi Bldg.

4,904.64

1.2

ATM Japan Ltd.

Olinas Tower

4,255.56

1.0

CMIC Co., Ltd.

Gotanda First Bldg.

4,236.65

1.0Canon Imaging Systems Inc.

Niigata Ekinan Center Bldg.

4,078.97

1.0

Mitsubishi Electric Information Systems
Corporation

MS Shibaura Bldg.

3,922.74

1.0

Deloitte Touche Tohmatsu LLC

MS Shibaura Bldg.

3,922.74

1.0

Security Electronics and Communications
Technology Association

Olinas Tower

3,544.12

0.9

Notes:(1) The figures have been rounded to the first decimal place. The leased floor areas of co-owned properties are portions owned by JPR.
(2) We have pass-through master lease arrangements with respect to these properties.
(3) The name has been changed to Taisei-Yuraku Real Estate Co., Ltd. as of April 1, 2012.

19

Overview of Portfolio Properties
Central Tokyo

Kanematsu Bldg.

A-1

OfficeKanematsu Bldg. Annex

RetailA-2

Chuo Ward, Tokyo

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Ningyo-cho Bldg.

¥2,874 million
679.06 m2
4,351.46 m2
SRC B1/8F
February 1993

A-3
Chuo Ward, Tokyo
Acquisition Price
Site Area

Acquisition Price
Site Area
Total Floor Space¥16,276 million
1,751.13 m2

Structure/Floors
Completed

Total Floor Space

S/RC/SRC B2/13F

Structure/Floors

February 1993

Completed2

14,995.09 m

Shin-Kojimachi Bldg.

A-4

JPR Crest Takebashi Bldg.

Chiyoda Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

MS Shibaura Bldg.

Acquisition Price
Site Area

657.80 m2

Total Floor Space

5,152.98 m2

Structure/Floors

SRC B1/9F

Completed

October 1984

Gotanda First Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed20¥11,200 million
8,992.18 m2
31,020.21 m2
SRC/RC/S B2/13F
February 1988

4,117.70 m2
SRC/RC B1/8F
December 1989

A-5

¥4,000 million
636.90 m2
4,790.68 m2
SRC B1/9F
September 1999

A-7

Minato Ward, Tokyo
Acquisition Price

550.06 m2

Chiyoda Ward, Tokyo¥2,420 million

A-6¥2,100 million

Shinagawa Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥2,920 million
1,551.19 m2
10,553.34 m2
SRC/RC B2/11F
July 1989

Central Tokyo

Fukuoka Bldg.

OfficeJPR Ichigaya Bldg.

A-8

A-9

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Oval Court Ohsaki Mark West

Chiyoda Ward, Tokyo
Acquisition Price¥2,920 million
1,302.17 m

Site Area

2

Structure/Floors

SRC B2/10F

CompletedMay 1990

Site Area
Total Floor Space
Structure/Floors
Completed

BYGS Shinjuku Bldg.

Shinjuku Square Tower

A-11

Acquisition Price¥10,180 million
Site Area

4,006.00 m2

2

8,409.52 m (entire redevelopment project)
Total Floor Space2

28,575.80 m

78,796.00 m2 (entire redevelopment project)

Structure/Floors

S/SRC B2/17F

S/RC/SRC B4/30F
Completed

June 2001

October 1994

Shinjuku Center Bldg.

A-14
Shinjuku Ward, Tokyo

Shinjuku Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Across Shinkawa Bldg. Annex

SRC B1/9F

Shinjuku Ward, Tokyo¥3,500 million

A-12

5,888.82 m2

March 1989

Shinagawa Ward, Tokyo
Acquisition Price¥5,100 million
1,058.04 m2

Total Floor Space

11,627.74 m2

A-10

Retail¥15,121 million
3,522.46 m2
25,733.10 m2
SRC B2/14F
April 1985

A-13
Chuo Ward, Tokyo

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥710 million
858.48 m2
5,535.90 m2
S/SRC B2/10F
June 1994

Acquisition Price
Site Area
Total Floor Space¥21,000 million
14,917.11 m2

Structure/Floors
Completed

SRC/RC/S B5/54F
October 19792

176,607.89 m

21

Overview of Portfolio Properties
Central Tokyo

Minami Azabu Bldg.

OfficeShinagawa Canal Bldg.

A-15

A-16

Minato Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Rokubancho Bldg.

Minato Ward, Tokyo
Acquisition Price¥3,760 million
778.09 m

Site Area

2

Total Floor Space

4,570.63 m2
S

Structure/Floors

9F

Completed

June 1992

JPR Harajuku Bldg.

A-17

Site Area
Total Floor Space
Structure/Floors
Completed

Tokyo Tatemono Kyobashi Bldg.

Acquisition Price
Site Area

2

Total Floor Space

4,205.09 m2

Structure/Floors

SRC B3/7F

Completed

October 1991

A-19

JPR Nihonbashi-horidome Bldg.

Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Sendagaya Bldg.

828.82 m2
5,216.21 m2
S

B1/8F

July 2008

Shibuya Ward, Tokyo¥2,800 million
716.95 m¥1,870 million

A-18

Chiyoda Ward, Tokyo
Acquisition Price

Retail¥8,400 million
1,205.07 m2
6,466.94 m2
SRC B1/9F
March 1989

A-20
Chuo Ward, Tokyo¥5,250 million
547.10 m2
4,419.79 m2
SRC/S B1/10F
January 1981

A-21
Shibuya Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed22¥15,050 million
2,217.49 m2
7,683.19 m2
S

8F

May 2009

Acquisition Price
Site Area
Total Floor Space¥5,100 million
937.59 m2
2

7,190.82 m

Structure/Floors
Completed

SRC B1/9F
June 2002

Central Tokyo

Ginza Sanwa Bldg.

OfficeOtemachi 1-6 Plan (tentative name)(land with land leasehold)

A-22
Chuo Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Shibuya Tower Records Bldg.

RetailA-23
Chiyoda Ward, Tokyo¥3,400 million
1,119.27 m2
8,851.00 m2
SRC B2/9F
October 1982

A-1
Shibuya Ward, Tokyo

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Daikanyama¥12,000 million
1,010.47 m2
8,449.56 m2
SRC/S B3/8F
February 1992

Acquisition Price
Site Area
Total Floor Space¥36,000 million
11,034.78 m

2Structure/Floors
CompletedA-3
Shibuya Ward, Tokyo

Shibuya Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
CompletedShinjuku Sanchome East Bldg.

Acquisition Price¥2,160 million
277.12 m

Site Area

2

Total Floor Space

668.09 m2

Structure/Floors

RC B2/2F

Completed

July 2002

A-4

Yurakucho Ekimae Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed¥2,740 million
2,578.69 m2
24,617.65 m2
S/SRC/RC B3/14F
January 2007

¥4,275 million
198.10 m2
1,066.81 m2
S/SRC B1/7F
February 2006

A-5

(Yurakucho Itocia)

Shinjuku Ward, Tokyo
Acquisition Price

April 2014 (planned)

approx. 198,000 m2

JPR Jingumae 432

A-2

RC/SRC/S B6/F38

Chiyoda Ward, Tokyo
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥3,400 million
6,808.12 m2
71,957.65 m2
S/SRS B4/20F
October 200723

Overview of Portfolio Properties
Greater Tokyo

Arca East

OfficeJPR Chiba Bldg.

B-1

B-2

Sumida Ward, Tokyo
Acquisition Price
Site Area

Chiba City, Chiba
Acquisition Price¥5,880 million

Site Area

3,755.01 m2

Total Floor Space
Structure/Floors
Completed

34,281.86 m2

Structure/Floors

S/SRC B3/19F

B-3

Completed

Site Area
Total Floor Space
Structure/Floors
Completed

Kawaguchi Center Bldg.

January 1991

B-5

Acquisition Price

Total Floor Space
Structure/Floors
Completed

Tachikawa Business Center Bldg.

1,100.59 m2

841.71 m2

Total Floor Space

9,146.52 m2

Structure/Floors

SRC B1/11F

Completed

October 1989

Site Area
Total Floor Space
Structure/Floors
Completed

24

S/SRC B2/12F

JPR Ueno East Bldg.

B-7
Taito Ward, Tokyo
Acquisition Price¥8,100 million

Site Area

4,524.61 m2

Structure/Floors

S/SRC B2/15F

CompletedFebruary 1994

¥3,250 million
1,242.97 m2

Total Floor Space

28,420.85 m2

8,490.44 m2
S/SRC B1/8F
October 1992

Rise Arena Bldg.

B-8¥3,188 million
2,047.22 m

7,781.93 m2

August 1991

B-9

Tachikawa City, Tokyo
Acquisition Price¥920 million

Site Area

Kawaguchi City, Saitama

Site Area

S/SRC B1/13F

Yokohama City, Kanagawa¥2,927 million

B-6

Acquisition Price

9,072.57 m2

Shinyokohama 2nd Center Bldg.

Yokohama City, Kanagawa
Acquisition Price¥2,350 million
1,382.35 m2

Total Floor SpaceMarch 1997

JPR Yokohama Nihon Odori Bldg.

22

14,706.36 m

S/SRC B1/12F
December 1994

RetailToshima Ward, Tokyo
Acquisition Price¥5,831 million
Site Area

2

9,377.28 m (entire redevelopment project)
Total Floor Space

91,280.94 m2 (including residential tower)

Structure/Floors

RC/SRC/S B3/42F*
Completed

January 2007
*The commercial tower portion has 2 basement floors and 15 floors above ground.

Greater Tokyo

Yume-ooka Office Tower

B-10

OfficeOlinas Tower

B-11

Yokohama City, Kanagawa
Acquisition Price
Site Area

Sumida Ward, Tokyo
Acquisition Price¥6,510 million

Structure/Floors
Completed¥31,300 million

Site Area

12,011.00 m2

Total Floor Space

Retail27,335.29 m2

Total Floor Space

185,974.87 m2

Structure/Floors

S/SRC/RC B3/27F

257,842.41 m2
SRC/RC/S B2/45F*

Completed

March 1997

March 2006

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

Tokyo Tatemono Yokohama Bldg.

B-12

Tanashi ASTA

B-1

Yokohama City, Kanagawa
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Cupo-la Main Bldg.

Nishitokyo City, Tokyo
Acquisition Price¥7,000 million
1,110.28 m2

12,326.30 m2

Total Floor Space

8,772.51 m2

Structure/Floors

SRC B1/9F

February 1995

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

Total Floor Space

Total Floor Space

15,008.28 m2 (entire redevelopment project)
48,321.96 m2

Structure/Floors

4,761.62 m2

Structure/Floors

Completed

Completed

March 1983

January 2006

B-5

Kawasaki Dice Bldg.

B-6

Saitama City, Saitama
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥4,335 million
8,317.99 m2
28,930.36 m2
S

B1/4F

October 2005

18,394.32 m2
SRC/RC/S B1/6F

S/RC/SRC B2/10F

Musashiurawa Shopping Square

80,675.27 m2
SRC B2/17F

CompletedMay 1981

B-3¥10,200 million

Site Area

Kawasaki City, Kanagawa
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥15,080 million
4,475.45 m2
36,902.01 m2
S/SRC/RC B2/11F
August 2003

25

Overview of Portfolio Properties
Other Cities

Niigata Ekinan Center Bldg.

OfficeTokyo Tatemono Honmachi Bldg.

C-1
Niigata City, Niigata

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Hakata Bldg.

Acquisition Price
Site Area

2

Structure/Floors

S/SRC B1/10F

Completed

March 1996

Site Area

JPR Naha Bldg.

Total Floor Space
Structure/Floors
Completed

Sompo Japan Sendai Bldg.

C-9

Acquisition Price
Site Area

2

Structure/Floors

S/RC/S B1/12F/1F

Completed

June 1985

Acquisition Price
Site Area
Total Floor Space
Structure/Floors
CompletedTenjin 121 Bldg.

C-13

Acquisition Price
Site Area

1,895.67 m2

Total Floor Space

10,783.52 m2

Structure/Floors

SRC B1/12F

Completed

December 1997

JPR Dojima Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed26¥2,810 million
1,164.39 m2
8,690.95 m2
S/SRC 13F
July 2000¥1,670 million
1,128.45 m2
6,715.07 m2
S

9F

July 1996

C-17

Fukuoka City, Fukuoka
Acquisition Price

SRC/S 12F

Wakayama City, Wakayama¥3,150 million

C-14

5,780.71 m2

October 1991

Sompo Japan Wakayama Bldg.

Sendai City, Miyagi¥1,560 million
959.87 m2

Total Floor Space

9,828.73 m2

C-12

SRC B3/9F

Naha City, Okinawa¥2,900 million
1,214.63 m

14,619.52 m2

February 1970

Fukuoka City, Fukuoka
Acquisition Price¥4,150 million
1,432.64 m2

Total Floor Space

19,950.42 m2

C-7

C-4
Osaka City, Osaka¥2,140 million
2,706.99 m

RetailOsaka City, Osaka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥2,140 million
668.11 m2
5,696.01 m2
SRC B2/9F
October 1993

Other Cities

JPR Hakata-Chuo Bldg.

OfficeJPR Nagoya Fushimi Bldg.

C-18
Fukuoka City, Fukuoka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

JPR Umeda Loft Bldg.

Acquisition Price
Site Area

2

Total Floor Space

3,874.81 m2

Structure/Floors

SRC 8F

CompletedFebruary 1993

C-1

Benetton Shinsaibashi Bldg.

Osaka City, Osaka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed

Housing Design Center Kobe

Acquisition Price
Site Area

2

Total Floor Space

17,897.56 m2

Structure/Floors

SRC B1/8F

Completed

April 1990

C-4

JPR Chayamachi Bldg.

Site Area
Total Floor Space
Structure/Floors
Completed¥7,220 million
3,994.47 m2
33,877.71 m2
SRC/S B2/11F
June 1994

1,610.38 m2
10,201.44 m2
SRC B1/9F
March 1991

C-3

¥5,430 million
609.31 m2
5,303.98 m2
S B2/10F
February 2003

C-5

Kobe City, Hyogo
Acquisition Price¥4,137 million

Osaka City, Osaka¥13,000 million
3,518.68 m

C-19
Nagoya City, Aichi¥1,920 million
680.63 m

RetailOsaka City, Osaka
Acquisition Price
Site Area
Total Floor Space
Structure/Floors
Completed¥6,000 million
592.45 m2
3,219.36 m2
S/SRC 9F
June 1994

27

Birth of JPR and Its Structure
Birth of JPR
September 6, 2001

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

September 14, 2001

Japan Prime Realty Investment Corporation was established

January 22, 2002

Investment unit split (2.5 units for 1 existing unit)

June 14, 2002

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

Structure of JPR
Asset Manager(3)

Tokyo Realty Investment
Management, Inc.

100%

(1)
Custodian, General
Administrator and Transfer Agent(2)

Mizuho Trust & Banking, Co., Ltd.

General Administrator andTrustees for Investment
Corporation Bonds

Paying Agents for Investment
Corporation Bonds

Japan Prime Realty
Investment Corporation

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

(6)

Mizuho Trust & Banking, Co., Ltd.
Mizuho Corporate Bank, Ltd.

(7)

Our Sponsors

Liabilities
Assets(4)
Unitholders'EquityLenders

Tokyo Tatemono Co., Ltd.
Taisei Corporation
Yasuda Real Estate Co., Ltd.
Meiji Yasuda Life Insurance
Company
Sompo Japan Insurance Inc.

(5)
100%

Public Unitholders

Notes:(1) We have entered into an asset management agreement with the Asset Manager. See "The Asset Manager-Asset Management Agreement."(2) We have entered into a general administration and asset custody agreement and a special accounts administration agreement with Mizuho Trust. See "Custodian, General Administrator, Transfer
Agent, and General Administrators, Trustees and Paying Agents for Investment Corporation Bonds."(3) The Asset Manager is currently owned 40% by Tokyo Tatemono Co., Ltd., 20% by Taisei Corporation, 20% by Yasuda Real Estate Co., Ltd., 10% by Meiji Yasuda Life Insurance Company and 10%
by Sompo Japan Insurance Inc.
(4) As of June 30, 2012, 29,300 of our outstanding units are owned by Tokyo Tatemono Co., Ltd., 1,500 are owned by Taisei Corporation, 5,000 are owned by Yasuda Real Estate Co., Ltd., and 24,000 are
owned by Meiji Yasuda Life Insurance Company.
(5) See "Principal Unitholders" for information regarding our principal unitholders.
(6) We and each of Mizuho Trust and Mizuho Corporate have entered into an agreement for Mizuho Trust and Mizuho Corporate to act as general administration and trustees for certain issues of ourinvestment corporation bonds. See "Custodian, General Administrator, Transfer Agent, and General Administrators, Trustees and Paying Agents for Investment Corporation Bonds."(7) We have entered into an agreement with each of Mizuho Trust, Mizuho Corporate, Merrill Lynch Japan Securities Co., Ltd., Mizuho Securities Co., Ltd., Shinkin Securities Co., Ltd. andNomura Securities Co., Ltd. to appoint each of them as paying agents for certain issues of our investment corporation bonds. See "Custodian, General Administrator, Transfer Agent, andGeneral Administrators, Trustees and Paying Agents for Investment Corporation Bonds."

28

Members of the Board of JPR (As of June 30, 2012)

Executive Officer
Dec. 2001
Apr. 1979
Apr. 1977

Hirohito Kaneko

Executive Officer, Japan Prime Realty Investment Corporation (currently held position)
Representative Counsel, Hirohito Kaneko Law Office (currently held position)
Bar admission (Tokyo Bar Association), Shigeru Yamada Law Office

Supervising Officer
Jan. 2009
Apr. 2008
Jan.
Oct.
Jun.
Jun.
Sep.
Oct.
Jul.
Feb.
Jun.
Dec.
Apr.

2008
2006
2006
2005
2001
1999
1993
1983
1980
1975
1968

Adviser, Gyosei Audit Corporation (currently held position)
Group Representative Partner, GYOSEI Certified Public Tax & Accountants’ Co. (currently held position)
Outside Auditor, Mitsui Sumitomo Insurance Group Holdings, Inc. currently MS&AD Insurance Group Holdings, Inc.
(part-time, currently held position)
Group Representative Partner, Gyosei Audit Corporation (Tokyo Hokuto & Co. merged with Serizawa Accounting Firm)
CPA and Director, Gyosei Audit Corporation
Outside Auditor, Nomura Research Institute, Ltd. (currently held position)
Outside Auditor, Mitsui Sumitomo Insurance Company, Ltd.
Supervising Officer, Japan Prime Realty Investment Corporation (currently held position)
Director and Senior Partner, Tokyo Hokuto & Co. (Tokyo Akasaka Audit Co. merged with Hokuto Audit Co.)
Senior Partner, Tokyo Akasaka Audit Co.
Representative, Tokyo Akasaka CPA Joint Office
Sosuke Yasuda Tax Accountant Office
Masamitsu Serizawa Accounting Firm
Main Store, KK Ohgiya

Supervising Officer
Apr. 2011
Apr.
Sep.
Jul.
Feb.
Jul.
Apr.
Jun.
Jan.
Apr.
Apr.

2009
2007
2007
2005
2003
2002
2000
1999
1991
1990

Sosuke Yasuda

Masato Denawa

Practicing-attorney-professor for civil advocacy, The Legal Training and Research Institute of Japan, Supreme Court of Japan(currently held position)
Adjunct professor (part-time) at Keio Law School (Advanced Commercial Law)
Supervising Officer of Japan Prime Realty Investment Corporation (currently held position)
Director of Advicelink Co., Ltd. (currently held position)
Part-time auditor of Ulvex Inc. (currently held position)
Partner attorney at Spring Partners (former Okinobu, Ishihara & Sei Law Office)Adjunct professor (part-time) at Keio University Faculty of Law (Civil law practice)Part-time auditor of Kinkan Co., Ltd. (currently held position)
Partner of Okinobu, Ishihara & Sei Law Office (currently held position)
Okinobu, Ishihara & Sei Law Office (former Okinobu & Ishihara Law Office)Registered with Daiichi Tokyo Bar Association at Okinobu & Ishihara Law Office currently MS&AD Insurance Group Holdings, Inc.
(part-time, currently held position)

29

Overview of the Asset Manager
Tokyo Realty Investment Management, Inc. (TRIM), a Japanese joint stock corporation established on April
28, 2000, is the Asset Manager. The shareholding of the Asset Manager as of June 30, 2012 is as follows:

Shareholder

Number of Shares Held

Percentage of
Outstanding Shares (%)

Tokyo Tatemono Co., Ltd.

2,800

40

Taisei Corporation

1,400

20

Yasuda Real Estate Co., Ltd.

1,400

20

Meiji Yasuda Life Insurance Company

700

10

Sompo Japan Insurance Inc.

700

10

7,000

100

Total

The Asset Manager is licensed by the Governor of Tokyo and the Minister of the Ministry of Land,
Infrastructure and Transport in accordance with the Building Lots and Building Transactions Business
Law to act as a discretionary transaction agent in real estate transactions, including acquisitions anddispositions of real estate. The Asset Manager is also registered with the Prime Minster to engage ininvestment management business under the FIEA. The Asset Manager currently employs 39 full-time
employees, including real estate, management and finance professionals, with extensive experience in Japanin property acquisitions and dispositions, leasing management, marketing, finance, tax, financial reportingand data processing and risk assessment and management.

Asset Management Agreement
The Asset Manager has entered into an asset management agreement with us with respect to the operation andmanagement of our properties. The current agreement is valid until October 18, 2012 (Note).
Note: The asset management agreement will be renewed each year automatically for an additional one year unless a written notice is given from either JPR or the Asset Managers three months prior
to the end of the term of the agreement, subject to the consent of our general meeting of unitholders in the case of termination by us, or to our consent, which is further subject to approval ofeither a general meeting of our unitholders or the Prime Minister of Japan, in the case of termination by the Asset Manager. Neither we nor the Asset Manager has any current intention toterminate the agreement.

30

Asset Management Fee
Under the asset management agreement that is currently in effect, the Asset Manager receives an asset management
fee which consists of a fixed fee and three types of incentive fees. As of the date of this offering circular, the details of
the fees payable by us for the asset management services provided by the Asset Manager are as follows:

Fixed Fee¥12.5 million per month

The Asset Manager receives a fixed fee of ¥12.5 million per month, payable
subsequently by us at the end of March, June, September and December eachyear. For any period of less than a month, the fee will be calculated on pro-ratabasis.

+
Insentive Fee 1 (Revenue-Based Fee)
2% of our total revenue+
Insentive Fee 2 (Earnings-Based Fee)
3% of our retained earnings

The Asset Manager receives a revenue-based fee equal to 2% of our total revenueof the fiscal period, provided however, for the total revenue exceeding ¥8 billion
in one fiscal period, the revenue-based fee shall be 1.5% of our total revenue (anyamount less than ¥1 will be truncated). Total revenue shall be the total of rent
revenue, common charges, parking revenue, incidental income, fee for use of
facilities, installation fees, late charges, cancellation penalty arising fromcancellation of lease and any other income, interest or distribution arising fromour real estate assets and other related income from the rent business. The
revenue-based fee is payable within three months from the end of each fiscal
term. We paid ¥226.0 million as revenue-based fee for the fiscal period ended
June 30, 2012.

The Asset Manager receives a fee equal to the amount of 3% of our retained
earnings (as specified in Article 30 of our articles of incorporation and less theamount not to be distributed) before deduction of earnings-based fee for eachfiscal period (any amount less than ¥1 will be truncated). The earnings-based fee
is payable within three months from the end of each fiscal term. We paid ¥142.1
million as earnings-based fee for the fiscal period ended June 30, 2012.

+
Insentive Fee 3 (Acquisition Fee)(after Jan. 2008)

0.25% of the acquisition priceFor each real estate property or asset-backed securities that have real estate as
their primary investments which we acquire, the Asset Manager receives a fee
equal to the amount of 0.25% of the acquisition price (net of any acquisition
costs, consumption tax and local consumption tax) (any amount less than ¥1 willbe truncated). The acquisition fee is payable by the end of the month
immediately following the month of acquisition. We paid an acquisition fee of¥90 million for the fiscal period ended June 30, 2012.

31

Overview of the Asset Manager
Services Provided by the Asset Manager
Pursuant to the ITA, our operations and activities related to the real estate and assets we own or operate are entrusted
to third parties, including the Asset Manager. The Asset Manager provides the following services to us:

Investment Management

The Asset Manager formulates and executes our investment strategy based on our basic
investment policy set forth in our articles of incorporation with respect to our portfolio
composition and other characteristics of our investment properties.

Oversight of Property
Management

The Asset Manager directs and supervises our on-site property managers’ implementation ofvarious programs.

Property Acquisition and
Disposition

The Asset Manager is responsible for finding and identifying acquisition targets, purchasing
properties (which may include the restructuring of tenant lease terms and property
refurbishments) and disposing of properties.

Investor Relations andFinancial Reporting

The Asset Manager is responsible for our investor relations, including the disclosure of new
developments with respect to our properties and the release of reports on our financial
performance. The Asset Manager is also responsible for our regulatory filings.

Finance and Accounting

The Asset Manager is responsible for our cash management and other financial affairs, including
planning and budgeting functions, management of debt and equity issuances to fund ouracquisitions.

Acquisition and Disposition Approval Process
The following chart shows the committees and subcommittees set up by our Asset Manager which are involved in thedecision-making process:
Board of Directors, Investment Committee
Identify investment property and strategy / Prepare and carry out management plans

Risk management through internal control

Market, property research, fundprocurement, consistency withfinancial strategy

Compliance Subcommittee

Analyze performance and risk

Confirm compliance with laws,
regulations, investment policies

Due Diligence Subcommittee
Confirm due diligence
Improve value of investment assets

Investment Subcommittee
Decide acquisition plans

Confirm acquisitions

Acquisition

Fund Management Subcommittee
Prepare renovation plans

Board of Directors
Board of Directors has final decision-making authority for acquisitions and dispositions which arebeyond the discretion of each subcommittee
Note: (1) Disposition of properties are determined through procedures similar to these acquisition procedures.

32

z The Asset Manager established the Investment Committee to make investment management decisions with the Investment
Subcommittee (including the Due Diligence Subcommittee) and the Fund Management Subcommittee which support thedecision-making process. Members of these committees include the President and CEO, Chief Investment Management Officer,
Chief Financial Officer (“CFO”) and Chief Planning and Administrative Officer (“CAO”). The Compliance Office General Manager will
also participate in each Committee and Subcommittee to enhance legal compliance.
z The Board of Directors is responsible for the targeted investment assets and policies. The Investment Committee formulates
management plans, while the Investment Subcommittee is in charge of decisions on issues regarding the acquisition anddisposition of individual assets. The Fund Management Subcommittee is responsible for issues regarding the management of
individual assets.
z The decision-making procedure by the Investment Subcommittee entails the following secure procedures that require two
steps: policy decision-making processes concerning the acquisition or disposition and a final decision process on the acquisition or
disposition. In addition, in regard to the acquisition of an individual asset, a Due Diligence Subcommittee meeting will be held after
the acquisition policy is decided to enhance the screening of the details. Furthermore, the Board of Directors has the final decisionmaking power on the acquisition and disposition of individual assets greater than a certain value.
z Decisions and legal procedures by each committee are screened to confirm that they do not violate laws, regulations, our articles
of incorporation and internal rules at the Compliance Subcommittee before committee meetings are held. The Compliance
Office General Manager reports on the presence or absence of violations of laws or rules before the discussion at each committee
meeting and, in addition, instructs each manager to decide at or report to our, or the Asset Manager’s board of Directors incompliance with the rules.
z In addition to the above, transactions with related parties will be reviewed by the Compliance Committee for its validity andreasonableness. See “—Policies Regarding Related-Party Transactions” below.
z The decision-making process of the Asset Manager when acquiring an investment property is shown below. Please note that the
below illustrates a general process, and therefore any part of such process may be changed or omitted to be taken, depending on
the situation of the investment property to be acquired. The Asset Manager will decide whether to acquire additional properties inaccordance with a decision-making process based on strict due diligence.

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

Decision making on acquisition
over certain amountCompliance Subcommittee
Our Board of Directors

Investment Subcommittee

Board of Directors of theAsset Manager

Review procedures at Investment Subcommittee toensure that such procedures are in compliance withlaws, regulations, our policies, internal policies of AssetManager

Decide on acquisition after reviewing disclosed
material from seller, etc.
Review legal compliance, property review,
environmental risk, rights and engineering report; if
there are problems, then review solutions andimprovement plans

Decide on acquisition upon review of due diligencereport and result of negotiations with seller anddetermine whether compliant with policy andappropriateness of acquisition price

Conclude agreement
Acquisitionz Dispositions of properties are determined through procedures similar to these acquisition procedures.

33

Overview of the Asset Manager
Policies Regarding Related-Party Transactions
When a proposed related-party transaction falls into any of the transaction categories listed below, the appropriatenessand reasonableness of the transaction will be reviewed at the monthly Compliance Committee meetings. In order to
conduct such transactions, prior approval from our members who is independent from the shareholders of the AssetManager will also be required:

Asset Acquisition

In the case of real estate properties or trust beneficiary interest in real estate properties, we must obtain priorapproval from our board of directors for such acquisition. For any other assets, we must not acquire the asset
more than the market value, if such market value can be obtained, and if not, then prior approval of our boardof directors is required.

Asset Disposal

In the case of real estate properties or trust beneficiary interest in real estate properties, the disposal price(the sales amount only, not including tax or costs of disposal) must be more than the appraised value. Also,
we must obtain prior approval from our board of directors. For any other assets, we must not sell the asset
less than the appraised value, if such value can be determined, and if not, then the same rule for real estate
properties applies.

Lease

When leasing real estate property to a related party, the terms of the lease must be appropriate, taking into
account general market conditions and general lease terms for a similar property. In addition, we must obtainprior approval from our board of directors. Leasing real estate property to a related party means i) concluding
a new lease agreement with a related party (not including the lease of parking space attached to the leased
property which a) is leased for more than the average fee for the same or similar condition and b) for less than
five cars (not including already leased spaces)) or ii) at the time of renewing the lease agreement, the averagerental fee of the said property (not including the related party) is less than the rate of increase/decrease or isset at the same fee.

Real Estate Management

Real Estate Management will be conducted according to our property business operations standard. Prior
approval of our board of directors will be required when commissioning real estate management to relatedparties and must be conducted according to our real estate management policy.
In the case where a related party acts as an agent for an acquisition or sale, the commission must not be more

Agency for Acquisition, Sale than 3% of the acquisition or sale price plus ¥60,000 (not including consumption tax) and such transaction
will require prior approval from our board of directors. In the case whereby a related party acts as an agent foror Lease and Commission
a lease, the commission must not be more than one month rent of the leased property.

Placing Construction Orders

For construction orders exceeding ¥10 million, an estimate must be obtained from a third party and such
construction order must be placed after obtaining prior approval from our board of directors.

Loans

Loans from related parties must be limited to those with terms which are at market level. In addition, priorapproval of our board of directors on the financial plan (funding and management plans for every threemonths) and the loan must be obtained.

A “related party” for purposes of these policies includes a company and its affiliated companies which are investingin, dispatching an executive or seconding an employee to the Asset Manager.

Corporate GovernanceIndependent Board Composition
In order to maintain a high level of independence, none of the directors and officers of the Asset Manager have a dual
position within our board of directors. We believe such independence enhances our corporate governance and enables
us to generate value to unitholders.

Prudent Procedures within the Asset Manager
The Asset Manager maintains prudent procedures, including the Compliance Committee that has an outside expert
as a member, to make decisions on important matters such as investment decisions and related-party transactions.
Decisions taken by the Compliance Committee require the unanimous agreement of Committee members. We believethat such procedures provide us with a high level of independence, particularly in respect to related-party transactions.
34

Monitoring provided by Our Sponsors
Instead of relying on a single Sponsor, we have five different Sponsors that monitor the Asset Manager as well as
each other, in addition to providing effective support. In order to maintain independence, the employees of the AssetManager, including the Compliance Office General Manager, are not seconded from our Sponsors.

Fiduciary Duty of the Asset Manager
In addition to the Asset Manager’s contractual obligations to us under the Asset Management Agreement, the FIEA
provides that the Asset Manager owes us fiduciary duties of loyalty and care of a good manager and must conduct its
activities as our Asset Manager in good faith. The ITA and the FIEA also prohibit the Asset Manager from engaging incertain specified conduct, including entering into transactions outside the ordinary course of business or with interested
parties of the Asset Manager that are contrary to or violate our interests. The Asset Manager is subject to potential
liability for damages from breaches of its duties to us under the ITA. See “Regulation—Act on Investment Trusts andInvestment Corporations” for additional discussion of the Asset Manager’s duties to us under the ITA and the FIEA.

Units Held by Directors and Corporate Auditors
As of the date of this offering circular, the directors of the Asset Manager hold seven units, and none of the corporate
auditors of the Asset Manager hold any of our units.

Organization
Shareholders’ Meeting
Auditors
Board of Directors
CEO
Investment Committee

Investment Committee
Compliance Office
Corporate Planning GroupOperations related to overall compliance
Operations related to internal and risk control
Work related to legal issues

Investment Management Division
Investment Group
Preparation and verification of acquisition
policies
Operations related to acquisition of assets

Asset Management Group
Preparation and verification ofadministration policies
General work on managing real estate andother assets, including work related toproperty sale as well as building repairs
and renovations

Research Group
Formulation of research plans
Research/analysis of real estate market

Financial Division
Financial Group
Formulation and review of financial
policies of the investment Corporation
Work concerning financing of theinvestment corporation
Work concerning management of
redundant funds

IR Group
Formulation and review of IR policies
IR and disclosure

Fund Management Group

Corporate Planning / Administration
Corporate Planning GroupOperations related to overallmanagement planningWork related to shareholders’ meetings
and Board of Directors meetings
Work concerning management of
redundant funds

Administration
Operations related to overall generalaffairs / human resources
Work of corporate accounting

Management of investment performance
Work related to accounting of investment
corporation

35

Management of the Asset Manager
Directors
The Asset Manager’s board of directors currently consists of five full-time directors and three part-time directors. The directors of
the Asset Manager are as follows:
Satoshi Okubo

CEO and President

Satoshi Okubo has been the CEO and president of the Asset Manager since June 2010. He started his career at Tokyo Tatemono Co., Ltd. in 1977 andhas worked in various departments of the company, gaining experience in investment decisions and real estate transactions, development of realestate and asset management. He was appointed as part-time statutory auditor and as special advisor of Tokyo Tatemono Real Estate Sales Co., Ltd in2010. He was then appointed as representative director of the Asset Manager in 2010.

Kazuo Kitami

Director and Manager of Planning and Administration Department

Kazuo Kitami has been director and manager of planning and administration department of the Asset Manager since October 2004. He joined Meiji
Yasuda Life Insurance Company, formerly Yasuda Life Insurance Company, in 1975. He has experience in the real estate and asset management
departments and was appointed as deliberator in charge of the management operation inquiry of related business of Meiji Yasuda Life Insurance
Company. He was seconded to the Asset Manager in October 2004 and subsequently joined the Asset Manager in March 2012.

Kazuki Sugise

Director and Manager of the Investment Management Division

Kazuki Sugise has been director and manager of the investment management division of the Asset Manager since March 2011. He joined Tokyo
Tatemono Co., Ltd. in 1988 and has experience in the urban development division of the company. He was seconded to the Asset Manager andappointed as manager of the investment management division in July 2007.

Satoshi Eida

Director and Manager of the Finance Department

Satoshi Eida has been director and manager of the finance department of the Asset Manager since March 2012. He joined Tokyo Tatemono Co., Ltd.
in 1986 and has experience at the Sapporo branch and in the management planning division and other divisions of the company. He was appointed
as president and representative director of Shinjuku Center Building Management Co., Ltd. and as director of Shinjuku Square Tower Management
Co., Ltd. in March 2011. He was seconded to the Asset Manager and appointed as director of the Asset Manager in March 2012.

Shigeyuki Sugawara

Director and General Manager of the Compliance Division

Shigeyuki Sugawara has been director and general manager of the compliance division of the Asset Manager since June 2010. He started his career at
Asahi Mutual Life Insurance Co. in 1985 and was seconded to Asahi Jitsugyo Co., Ltd. in April 1999. He was seconded to the Asset Manager in January
2001 and then joined the Asset Manager in October 2002. He was appointed as manager of the planning and administration division of the AssetManager in October 2004 and then appointed as general manager of compliance team of the Asset Manager in April 2008.

Kiyohide Kumakura

Part-Time Director

Kiyohide Kumakura is one of the Asset Manager’s part-time directors and was appointed in June 2011. He joined Tokyo Tatemono Co., Ltd. in 1989
and has experience in the general affairs division and the leasing division of the company. He was seconded to Tokyo Tatemono Amenity Support
Co., Ltd. in January 2004. He has been group leader of the planning and management group of Tokyo Tatemono Co., Ltd. since April 2010 and
director of Tokyo Tatemono Investment Advisors Co., Ltd. since March 2011.

Rei AbePart-Time Director

Rei Abe is one of the Asset Manager’s part-time directors appointed in June 2011. He joined Taisei Corporation in 1979 and has experience in the
management division, the property management division and other divisions of the company. He has been manager of the development planning
division of the company since April 2011.

Yasunori Kuroda

Part-Time Director

Yasunori Kuroda is a part-time director of the Asset Manager and was appointed in April 2012. He joined Sompo Japan Insurance Inc. (formerly
Yasuda Fire and Marine Insurance Co., Ltd.) in 1987 and was then seconded to Sompo Japan Nipponkoa Asset Management Co., Ltd. (formerly Yasuda
Kasai Brinson Investment Management Co., Ltd.). He joined Sompo Japan Insurance Inc. in April 2004. He has been a director of Sompo Japan Credit
Inc. and of Yasuda Enterprise Development Co., Ltd since April 2012.

Corporate Auditors
The corporate auditors of the Asset Manager are as follows:
Masamitsu Kurebayashi

Part-Time Corporate Auditor

Masamitsu Kurebayashi has been a part-time corporate auditor of the Asset Manager since February 2001. He began his career at Showa Ota AuditingFirm, presently Ernst & Young ShinNihon LLC, in 1989, and served in the tax consulting division. He became a representative of Sawa & Kurebayashi
accounting firm (formerly Kurebayashi accounting firm) in October 1999.

Takanori Sakurai

Part-Time Corporate Auditor

Takanori Sakurai has been a part-time corporate auditor of the Asset Manager since June 2010. He started his career at Mizuho Trust & Banking Co., Ltd.,(formerly Yasuda Trust & Banking Co., Ltd.) in 1980 and was appointed as manager of the real estate sales division of Mizuho Trust & Banking Co., Ltd.
(formerly Mizuho Asset Trust & Banking Co., Ltd.) in April 2002. He was appointed as executive director of the company in April 2008 and then appointed
as director of administration of the company in May 2009. He was appointed as manager of the business planning division of Yasuda Real Estate Co., Ltd.
in October 2009. He has been director of the company since June 2011. He resigned from the post of corporate auditor as of November 19, 2012.

36

Overview of Asset Management(1) Selected Financial Information
Our selected financial information for the period ended June 30, 2010, December 31, 2010, June 30, 2011, December 31, 2011
and June 30, 2012 has been derived from our audited financial statements for those periods. Our fiscal periods cover every six
months through the end of June 30 and December 31 of each year, except that our first fiscal period was the period from
September 14, 2001, the date of our incorporation, to June 30, 2002.
We prepare our financial statements in accordance with Japanese GAAP, which differ in certain material respects from IFRS and
U.S. GAAP.

June 30,
2010

As of/for the Fiscal Period Ended
December 31,
June 30,
December 31,
2010
2011
2011
(in thousands, except per unit data and ratios)

June 30,
2012

Statements of Income Data:
Operating revenue:
Rent revenue – real estate
Gain on sale of real estate¥11,855,159
459,648¥11,870,005—¥11,529,624—¥11,772,766—¥12,345,900—

Total operating revenue

12,314,808

11,870,005

11,529,624

11,772,766

12,345,900

Operating expenses:
Expenses related to rent business
Asset management fees
Administrative service and asset custody fees
Directors’ compensation
Trust fees
Other operating expenses

5,144,388
447,576
68,2186,600
48,489115,525

5,361,037
421,951
71,0646,600
49,55273,413

5,296,139
415,874
71,0746,600
49,30087,1385,357,207
421,61374,6596,600
43,737
105,346

5,217,950
443,284
74,5756,600
42,693167,020

Total operating expenses

5,830,796

5,983,620

5,926,127

6,009,163

5,952,124

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary losses
Income before income taxes
Income taxes

6,484,011
79,233
1,598,790
4,964,454—
4,964,454
588

5,886,384
12,8891,859,361
4,039,912—
4,039,912
627

5,603,496
51,9791,580,007
4,075,468
64,122(6)4,011,345
616

5,763,602
10,791
1,573,392
4,201,000—
4,201,000
616

6,393,776
62,447
1,858,935
4,597,288—
4,597,288
605

Net income¥4,963,866¥4,039,284¥4,010,728¥4,200,383¥4,596,683¥358,339,677¥360,904,581¥360,004,870¥360,699,107¥396,017,887

29,499,000

42,899,000

36,116,000

39,016,000

48,143,000

84,263,000
47,500,000
6,463,850
10,804,484
176,303,789

78,505,000
42,500,000
7,428,462
10,345,814
175,502,523

84,147,000
42,500,000
7,342,133
10,283,837
175,452,052

81,489,000
42,500,000
7,711,990
10,147,460
175,640,571

104,438,000
42,500,000
7,408,110
11,289,504
176,035,914¥7,145
8,952
6,770
246,578¥5,6498,353
5,680
245,458¥5,6098,372
5,611
245,387¥5,874
8,428
5,876
245,651¥6,4288,883
6,430
246,204

5.4x
97.5

4.9x
100.5

5.1x
100.0

5.3x
100.0

5.4x
100.0

Balance Sheet Data:
Total assets
Short-term loans payable (including current portionof long-term loans payable and investment
corporation bonds)
Long-term loans payable
Investment corporation bonds
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Total unitholders’ equity
Amounts per Unit(1):Net income(2)Funds from operations (FFO)(3)
Cash distributions
Net assets
Other Financial Data:
Debt service coverage ratio(4)Net income payout ratio(5)Notes:(1) Except for net income per unit, amounts per unit have been calculated using the number of outstanding units as of the end of each relevant fiscal period.
(2) Calculated using the weighted average number of units outstanding during each fiscal period, or 694,690 units for the fiscal period ended June 30, 2010 and
715,000 units for the fiscal periods ended December 31, 2010, June 30, 2011, December 31, 2011 and June 30, 2012.

37

(3) FFO is calculated as net income (or loss) excluding gain (or loss) on sale of real estate properties plus gain (or loss) on sales on investment securities,
extraordinary loss, depreciation and amortization.
(4) Debt service coverage ratio is calculated as net income before interest expense, tax, depreciation and amortization (excluding gain or loss on sale of real estateand extraordinary loss) divided by interest expense (including interest for investment corporation bonds) for the relevant period.
(5) Net income payout ratio is distributions expressed as a percentage of net income. Where the ratio is indicated as “100.0,” the actual net income payout ratio may
be slightly less than 100.0% as the amount distributed is subject to rounding down to the nearest yen based on the number of units outstanding.
(6) Consists of the costs incurred in repairing interiors and facilities damaged as a result of the Great East Japan Earthquake.

38

(2) 21st Fiscal Period Asset Management
1) Milestones of JPR
Japan Prime Realty Investment Corporation (JPR) was established on September 14, 2001 under the Investment Trusts andInvestment Corporations Law (hereafter, the Investment Trusts Law), 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. JPR
made its fourth additional public offering in February 2010, bringing the number of investment units issued and outstanding
to 715,000 units. JPR has assigned the asset management of its portfolio to Tokyo Realty Investment Management Inc.,
through which JPR aims to maximize unitholder value by efficiently managing the portfolio of office properties and retailproperties.
2) Management Environment
During the 21st fiscal period, the Japanese economy kept advancing solidly primarily led by domestic demand, backed byreconstruction demand from the Great East Japan Earthquake as well as such political measures as subsidies for
ecology-friendly vehicles. On the other hand, overseas economies continued to remain weak against the backdrop of theEuropean sovereign debt problem and the slowdown of the Chinese economy, among other things. This, coupled with thetroublesome foreign exchange level, caused Japan to see external demand lose momentum. In general, the domestic
economy is on its way to modest recovery, but the opaqueness of the future outlook still lingers for the external businessenvironment.
The Office Property Leasing Market
In the 23 words of Tokyo, new demand was relatively strong primarily for better locations and for relocations to integrate
offices as a result of considerations given to business continuity plans and the progress in rent adjustments. Nevertheless, thevacancy rate of office properties in the area failed to show improvement, due to construction completion of large-scale
properties in a concentrated manner.
In regional cities, some areas are heading for relative stability in the market as new supply has come down to a modest pace.
Still, the vacancy rate stays at a high level, while rents tend to show weakness.
The Retail Property Leasing Market
The retail property leasing market had a temporarily significant drop in sales last year, impacted by the earthquake. Recently,
however, consumer confidence has been modestly recovering, as exemplified by expensive goods starting to sell at
department stores, etc. Urban retail properties in good locations, such as Ginza and Shinjuku, are presumably almost
bottoming out as a result of rent adjustments and other moves progressed since the financial crisis.
The For-Sale Real Estate Market
Despite the severe capital market environment given the European sovereign debt problem and other issues, conditions forvitalizing the for-sale real estate market are becoming full-fledged, with IPOs and public offerings by REITs being realized
and financial institutions continuing to take a positive attitude in lending to REITs. Meanwhile, as the gap in the price targets
between buyers and sellers remain to be wide, acquisitions of blue-chip properties are being conducted most often by using
the sponsors’ pipelines.
3) Portfolio Management Status
New Property Acquisitions and Asset Replacement
JPR investigates possible investments mainly in office properties in central Tokyo, 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 the portfolio, both in terms of location and asset class.
During the 21st fiscal period, JPR acquired Otemachi 1-6 Plan (Land with Leasehold Interest) (tentative name) (acquisition
price: 36 billion yen), resulting in the balance of assets under management now totaling 58 properties, or 380.9 billion yen
on an acquisition price basis, as of the end of June 2012. The total leasable floor space is now 434,340 m2 and the number oftenants is 502.
Operational Management of Portfolio
Throughout Japan, progress has been seen in integration of offices and relocation for consolidation with an aim to reduce
costs and for better locations, and tenants’ moves have become more activated, starting to create new demand. The leasing
market environment remains tough, however, partly because of the impact of the so-called “secondary vacancy” caused bytenants’ relocations.
Under such circumstances, JPR conducted management under a policy that pursue maintaining and improving occupancy
rates. Based on this policy, JPR kept close cooperation with property management companies, centering on Tokyo Tatemono
Co., Ltd., and brokers to attract new tenants through strategic leasing activities. Nevertheless, with some large tenants
moving out, the period-end occupancy rate decreased by 1.5 points to 94.1% from the 95.6% at the end of the previous fiscal
period.

39

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, and has continuously worked toobtain environmental certifications since 2011 (resulting in the DBJ*1 Green Building Certification and the recognition by
GRESB*2).
*1 Development Bank of Japan Inc.
*2 GRESB stands for the Global Real Estate Sustainability Benchmark.

Fund Procurement
During the 21st fiscal period, JPR continued to maintain its stable financial base through such measures as conducting
refinances to long-term fixed interest funds, with an eye on avoiding future interest rate fluctuation risks and remaining
attentive to the diversification of repayment and redemption maturity dates.
As a result, the balance of total outstanding borrowings as of the end of the fiscal period was 143.58 billion yen, with
unsecured corporate bonds of 51.50 billion yen. With regards to JPR’s overall interest-bearing debt, the average interest rate
as of the end of the fiscal period (Note 1) was 1.5%, the interest-bearing debt ratio (Note 2) was 53.2% and the LTV (ratio ofinterest-bearing debt to total assets) at the end of the period (Note 3) was 49.3%.
Of these, the non-current portion of long-term interest-bearing debt that is hedged against risk of interest rate fluctuations
now comprises 75.3% of all interest-bearing debt, and the average maturity (Note 4) is 3.8 years. The current portion of
long-term interest-bearing debt is 27.54 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, 2012
Credit Rating Agency
Rating and Investment Information, Inc.
Moody's Japan K.K.
Standard & Poor's Ratings Japan K.K.

Corporate Credit Rating
AA- (Stable)
A3 (Negative) (Note 5)Long-term: A (Stable)
Short-term: A-1(Note 1) Average interest is arrived at by calculating a weighted average of interest rates as of the end of the 21st fiscal period based on the balance of eachdebt.
(Note 2) Interest-bearing debt ratio (%): interest-bearing debt / (interest-bearing debt + unitholders' capital) x 100 (unitholders' capital: 171.33 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 21st fiscal period: 396.01 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 21st fiscal period
to the repayment deadlines for long-term interest-bearing debt with repayment periods of more than one year, based on the balance of each debt.
(Note 5) The rating was downgraded from A2 to A3 on May 9, 2012.
(Note 6) JPR had been placed on credit watch with negative implications since March 5, 2012, but the credit watch was removed on August 1, 2012 and theratings were kept unchanged at A/A-1, with the Outlook being stable.

40(3) Additional Offerings, etc.
The table below indicates additional offerings, etc. we have conducted since inception.

Date
September 14, 2001
November 16, 2001
January 22, 2002
June 14, 2002
July 15, 2003
August 9, 2003
February 2, 2005
March 2, 2005
February 6, 2007
March 7, 2007
February 8, 2010
March 12, 2010
July 30, 2012
August 29, 2012

Event
Established by private placement
Additional private placement
Split of investment units
Initial public offering
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment
Additional public offering
Third-party allotment

Number of Units
Outstanding
Variation
Balance240
240
62,00062,24093,360155,600
134,000
289,600
134,400
424,000
6,000
430,000
95,000525,000
5,000
530,000
90,000620,000
5,000
625,000
82,000707,000
8,000
715,000
101,420
816,4208,580
825,000

Unitholders' Capital(million yen)
Variation
Balance120
120
31,00031,12031,120－25,862
56,98230,75887,7401,373
89,11325,001
114,115
1,315
115,431
39,120154,552
2,173
156,725
13,315170,040
1,299
171,339
19,089190,429
1,614
192,044

Remarks(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(Note 11)
(Note 12)(Note 13)
(Note 14)

(Note 1)

JPR was formed by the investment of three companies Tokyo Tatemono Co., Ltd. (100 units), Taisei Corporation (100 units), and Tokyo Realty(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

Investment Management, Inc. (40 units) at 500,000 yen per unit.
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,(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,

finance the acquisition of new specific assets, etc.
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 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 fundacquisition 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.

41

(4) Cash Distribution
In order to maintain favorable tax treatment available to J-REITs under the Special Taxation Measures Act, we must make cash
distributions to our unitholders in each fiscal period in excess of 90% of our distributable profit (defined in the Special Taxation
Measures Act as accounting income before tax and certain adjustments). Our articles of incorporation require that we make cash
distributions for each fiscal period in excess of 90% of our distributable profit, as defined in the Special Taxation Measures Act,
up to the extent of retained earnings as of the end of such fiscal period. If the amount of the retained earnings does not exceed
90% of our distributable profit or we determine it appropriate to do so, our articles of incorporation also permit us to distributecash to our unitholders in excess of retained earnings up to the amount of our retained earnings plus depreciation on our fixed
assets for the relevant fiscal period. If such amount is still below 90% of our distributable profit, our articles of incorporation
further permit us to make distributions in any amount to satisfy the requirement under the Special Taxation Measures Act.
The following table sets forth the amount of our cash distributions to our unitholders over the twenty-one fiscal periods from thefiscal period ended June 30, 2002 to the fiscal period ended June 30, 2012.
Fiscal Period Ended

Distributions per Unit(Note)

June 30, 2002
December 31, 2002
June 30, 2003
December 31, 2003
June 30, 2004
December 31, 2004
June 30, 2005
December 31, 2005
June 30, 2006
December 31, 2006
June 30, 2007
December 31, 2007
June 30, 2008
December 31, 2008
June 30, 2009
December 31, 2009
June 30, 2010
December 31, 2010
June 30, 2011
December 31, 2011
June 30, 2012
(Note) The average distributions per unit between June 30, 2002 and June 30, 2012 were 6,185 yen.

42

¥2,545
6,912
6,873
5,738
6,081
6,671
6,370
6,411
6,509
6,873
6,996
6,671
7,122
7,092
3,731
6,933
6,770
5,680
5,611
5,876
6,430

Total Distributions(in millions)
¥737
2,001
1,990
2,467
2,614
2,868
3,376
3,397
3,449
3,642
4,372
4,169
4,451
4,432
2,331
4,333
4,840
4,061
4,011
4,201
4,597

(5) Future Management Policy and Vital Issues
Going forward, the Japanese economy is anticipated to pick up moderately centering on domestic demand bolstered by the
post-quake reconstruction demand, although the outlook still remains opaque given such factors of concern as the outcome of
the European sovereign debt problem, feared slowdown in the world economy and the currency exchange trends.
In the office property leasing market in the 23 words of Tokyo, new supply peaked in the first half of 2012 but is anticipated toslow down in the latter half and after. If new supply remains at the current level, the supply and demand balance will head for
improvement and the vacancy rate will gradually decrease. However, partly because of the opaque outlook for the future, it willtake more time for the improvement in the supply and demand balance to clearly trigger a rise in rents. Meanwhile, the for-salereal estate market will be ahead of the office property leasing market in regaining recovery, in anticipation for the expected
recovery of the latter.
Based on these conditions, JPR will proceed with management that exercises caution regarding the following matters as we
strive to maximize unitholder value.
1) Acquisition of New Properties and Asset Replacement
JPR will continue to make investment focused in Tokyo and office properties, with an aim to improve the quality of its portfolio
and enhance its growth potential in the recovery cycle of the market. JPR believes that the current situation presents a good
opportunity for acquiring excellent properties, as the office property leasing market still requires more time to bottom out. As forretail properties as well as office properties in regional cities, which allow us to expect higher yields than office properties inTokyo, JPR will work to invest in strictly selected blue-chip properties in order to complement the stability of earnings from theentire portfolio. JPR will strive to acquire new properties under reasonable terms by negotiating prices based on detailed market
studies and property investigations in considering properties.
Entering the 22nd fiscal period, JPR acquired Yakuin Business Garden (acquisition price: ¥10.9 billion), an office property
located in a regional city, on August 8, 2012. JPR will continue to make investment decisions after a proactive collection of
information through such sources as sponsors of the asset management company, accurately grasping market trends andcarefully 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 sustainablegrowth in the future or those that may be sold under better terms and conditions.
2) Management of Portfolio
Given the continuation of the severe leasing environment, JPR will work to raise the occupancy rate of its portfolio byconducting measures to reinforce leases, centering on strategic upgrading constructions with an aim to invite new tenants andenhance satisfaction of existing tenants and on further strengthening coordination with respective tenant brokers. For properties
that have particularly stagnant occupancy rates, JPR will focus on conducting leasing activities by reinforcing the leasing
supervising function of the asset management company and taking other measures, as well as more closely cooperating withproperty management companies, centering on Tokyo Tatemono.
Moreover, under the concept of “Save energy,” which is part of JPR’s brand strategy, JPR will systematically implement“renovations of air conditioning systems aiming to create buildings with high environmental performance” and other measures,in promoting endeavors to meet the energy-saving obligations. On top of these, JPR will continuously take necessary steps,
including energy- saving efforts, to meet the social requirements that have become relevant these years.

(6) Fund Procurement
JPR's fundamental policy for fund procurement calls for an efficient combination of long-term steady fund procurement andshort-term fund procurement that emphasizes dynamism. In line with this policy, JPR will procure funds through unsecured andunguaranteed bank borrowings as well as the issuance of corporate bonds. JPR will continue to focus on the diversification offund 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 run videos on its primary properties
using this site. We are committed to further enriching our information disclosure activities.

43

(8) Important Facts Arising after the Settlement
Issue of New Investment Units through Public Offering
JPR resolved at its Board of Directors Meetings held on July 9, 2012 and July 23, 2012 to issue new investment units as
described below. Pursuant to the following terms and conditions, payment for the new investment units issued via public
offering was completed on July 30, 2012, and payment for the new investment units issued through third-party allotment wascompleted on August 29, 2012. As a result, the total unitholders’ equity was 192,044,238,600 yen as of August 29, 2012, withthe total number of investment units issued at 825,000 units.
[Issuance of New Investment Units via Public Offering]<Domestic primary offering and international offering centering on Europe and Asia (excluding the U.S. and Canada)>
Total number of units issued:

Issue price (offer price):
Total amount of issue price (offer price):
Paid-in amount (purchase price):
Gross proceeds (total purchase price):
Payment date:
Starting date of computation for cash distribution:

101,420 (57,420 units via domestic primary offering and 44,000 units via international
offering (42,580 units underwritten by overseas underwriters and 1,420 units additionallyissued pursuant to the option to purchase the investment units granted to overseas
underwriters))
194,610 yen per unit
19,737,346,200 yen
188,222 yen per unit
19,089,475,240 yen
July 30, 2012
July 1, 2012

[Issue of New Investment Units through Third-Party Allotment (Third-Party Allotment through the Exercise of Greenshoe
Option)]Total number of units offered:
Paid-in amount (purchase price):
Gross proceeds (total purchase price):
Third-party alottee:
Payment date:
Starting date of computation for cash distribution:

8,580 units
188,222 yen per unit
1,614,944,760 yen
Mizuho Securities Co., Ltd.
August 29, 2012
July 1, 2012

[Use of Proceeds]
JPR will use the net proceeds from the public offering and the third-party allotment of new investment units to partly pay for theacquisition costs of a new specified asset and to repay borrowings.
(Note) The number of investment units issued through the exercise of the option, which is granted to the international managers and allows them to purchase theinvestment units to be additionally issued for the international offering, was determined to be 1,420 units on July 26, 2012.

<Reference>
Property Acquisition
JPR acquired the following property after the settlement of the 21st fiscal period.
[Yakuin Business Garden]
Property Overview
Location:
1-1, Yakuin 1-chome, Chuo-ku, Fukuoka-shi, Fukuoka
Type of ownership:
Land: ownership Building: ownership
Total site area:
4,348.43 m2
Gross floor space:
22,286.35 m2
Structure:
SRC, 14F
Completion date:
January 2009
Number of tenants:
17
Total leasable floor space: 16,538.89 m2
Total leased floor space: 16,538.89 m2
Occupancy rate:
100%(Note) The number of tenants, total leasable floor space, total leased floor space and occupancy rate represent the figures as of August 8, 2012.

Transaction Terms
Acquisition price:
Asset type:
Acquisition date:44

10,996 million yen
Real estate
August 8, 2012

Overview of the Investment Corporation(1) Capitalization
The following table sets forth our capitalization, together with our short-term loans payable, as of June 30, 2012.

Total short-term loans payable (including current portion of long-term loans payable and investment corporation bonds)

As of June 30, 2012
(in millions)¥48,143

Noncurrent liabilities:
Long-term loans payable
Investment corporation bonds
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

104,438
42,5007,408
11,289

Total

165,635

Unitholders’ equity:
Units: 5,000,000 units authorized; 715,000 units issued and outstanding as of June 30, 2012
Retained earnings

171,339
4,696

Total unitholders’ equity

176,035

Total capitalization and short-term loans payable¥389,814(2) Items Related to Directors
A. The Executive Officer, Supervising Officers and Independent Auditors as of the end of the 21st fiscal period are as follows.

Position

Name

Executive Officer

Hirohito Kaneko

Supervising
Officers (Note 1)

Sosuke Yasuda

Independent
Auditor (Note 2)

Masato Denawa
Ernst & Young
ShinNihon LLC

Other Current Assignments
Representative Counsel, Hirohito Kaneko Law
OfficeAdviser, 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)
Partner Attorney, Spring Partners―

Total Directors'
Fee during
the 21st Fiscal Period(thousands of yen)
2,400

4,200

Number
of
Owned
Units
―

―

―
12,700―(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 forissuance 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 Law. The
decision to not reappoint the auditor shall be studied at JPR’s Board of Directors Meetings following comprehensive
consideration of circumstances including audit quality, audit fee and other various conditions.

45

(3) Custodian, General Administrator, Transfer Agent, and General
Administrators, Trustees and Paying Agents for Investment Corporation
Bonds
Custodian, General Administrator and Transfer Agent
Mizuho Trust & Banking Co., Ltd., or Mizuho Trust, a Japanese trust and banking subsidiary of Mizuho Financial Group, Inc., isthe custodian of our assets and our general administrator. We and Mizuho Trust are parties to a general administration and asset
custody agreement. It has a two-year term, which is automatically extended for successive two-year periods unless three months’
advance termination notice is provided.
Pursuant to the agreement, Mizuho Trust provides custodial, general administration and transfer agency services to us, including
the following:• administration of the unitholder registry;• administration of issuance of our units;• administration of our unitholders meeting and the board of directors’ meeting;• administration of accounting matters;• administration of distributions to our unitholders;• receipt of notification from our unitholders;• preparation of financial documents;• administration of tax payments; and• custody of our assets.
Under this agreement, we pay to Mizuho Trust a general administration fee and an asset custody fee for each fiscal period
payable by the end of the month immediately following the relevant fiscal period. Since September 14, 2011, the generaladministration fee is 0.04% per fiscal period of our total assets divided by two for the portion of our assets that is¥200,000 million or less, 0.02% per fiscal period of our total assets divided by two for the portion of our assets that is more than¥200,000 million but less than or equal to ¥400,000 million, 0.018% per fiscal period of our total assets divided by two for the
portion of our assets that is more than ¥400,000 million but less than or equal to ¥600,000 million, and 0.016% per fiscal periodof our total assets divided by two for the portion of our assets that is more than ¥600,000 million, plus a fee calculated bymultiplying an amount up to ¥1 million and determined through discussions by the number of properties held directly by us (notthrough a trust structure). Further, under this agreement, each month we pay Mizuho Trust transfer agent fees calculated basedon the number of unitholders and the amount of transfer agency services provided by Mizuho Trust. We also reimburse Mizuho
Trust for certain expenses.
In addition, Mizuho Trust is also our special accounts administrator. We and Mizuho Trust are parties to a special accounts
administration agreement with an undefined term and a customary fee arrangement. Pursuant to this agreement, Mizuho Trust
provides us with special accounts administration services, including the registration and administration of account information.
General Administrators, Trustees and Paying Agents for Investment Corporation Bonds
Mizuho Trust and Mizuho Corporate Bank, Ltd., or Mizuho Corporate, a Japanese corporate banking subsidiary of Mizuho
Financial Group Inc., are general administrators and trustees for certain issues of our investment corporation bonds, respectively.
We and each of Mizuho Trust and Mizuho Corporate has entered into a relevant agreement with customary fee arrangements foreach issue.
In addition, Mizuho Trust, Mizuho Corporate, Merrill Lynch Japan Securities Co., Ltd., Mizuho Securities Co, Ltd., Shinkin
Securities Co., Ltd. and Nomura Securities Co., Ltd. are paying agents for certain issues of our investment corporation bonds,
respectively. We and each of them have respectively entered into a relevant agreement with customary fee arrangements for eachissue.

46

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 otherassets―Total assets―

20th Fiscal Period(as of December 31, 2011)
Assets owned by
Percentage of total
JPR
assets (%)(thousands of yen)
80,395,006
22.3
64,450,594
17.9
10,958,808
3.0
88,142,132
24.4
44,487,473
12.3
44,446,607
12.3
27,818,485
7.7
(－)
(－)
360,699,107
100.0(332,880,621)(92.3)

21st Fiscal Period(as of June 30, 2012)
Assets owned by
Percentage of total
JPR
assets (%)(thousands of yen)
80,564,061
20.3
64,032,992
16.2
10,877,921
2.7
126,270,766
31.9
44,175,336
11.2
44,242,155
11.2
25,854,653
6.5
(－)
(－)
396,017,887
100.0(370,163,234)(93.5)(Note 1) Total assets owned are based on the amounts appropriated on the balance sheet as of the settlement date (book values after depreciation for real estate andreal estate in trust).
(Note 2) Figures in parenthesis are portions that practically fall on real estate owned in the object assets.
(Note 3) Various survey expenses (1,614 thousand yen for the 21st fiscal period) recorded in relation to a property to be acquired have been included in Deposits
and other assets in the table above as construction in progress.

(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 theend of the 21st fiscal period.

Property Name
Otemachi 1-6 Plan (Landwith Leasehold Interest)(tentative name)
Olinas Tower
Shinjuku Center Bldg.
BYGS Shinjuku Bldg.
JPR Sendagaya Bldg.
Kanematsu Bldg.
Kawasaki Dice Bldg.
JPR Umeda Loft Bldg.
JPR Shibuya Tower
Records Bldg.
MS Shibaura Bldg.
Total

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

Asset
Class

100.0

11.9

Office21,894.74
7,977.63
14,765.79
5,813.42
7,592.34
12,911.37
18,586.97

91.3
90.0
96.9
94.1
95.0
98.8
100.0

7.7
3.5
4.1
2.0
2.8
3.1
3.0

OfficeOfficeOfficeOfficeOfficeRetailRetail

8,076.85

8,076.85

100.0

2.9

Retail

14,470.72
127,494.38

13,490.04
122,143.93

93.2
95.8

3.4
44.4

OfficeBook Value(thousands ofyen)

Leasable Floor
Space (m2)

Leased Floor
Space (m2)38,388,259

11,034.78

11,034.78

30,065,491
21,734,596
15,803,714
15,284,697
14,893,422
14,517,132
12,571,199

23,987.40
8,861.34
15,237.87
6,177.74
7,994.02
13,066.69
18,586.97

11,658,277
10,918,406
185,835,196

Occupancy
Rate (%)(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 fluctuates in accordance with the lease conditions of the sub-lessee. Therefore, the leasable floor space, leased floor space and occupancy
rate entered for this building are the figures concerning the sub-lessee of the tenant.

47

Selected Office Properties in the Greater Tokyo Area
Otemachi 1-6 Plan (Land with Leasehold Interest)
On March 13, 2012, we acquired the Otemachi 1-6 Plan (Land with Leasehold Interest), an office property located in the
Chiyoda ward of Tokyo area, at the price of ¥36,000 million. We own only the land, which is approximately 11,000 m². A
building is currently under construction on the land by Taisei Corporation, and is scheduled to be completed in April 2014. The
projected NOI yield for the Otemachi 1-6 Plan (Land with Leasehold Interest), is 3.6%. The property was acquired from Y.K.
Tokyo Prime Stage, or TPS, a special purpose company in which Tokyo Tatemono Co., Ltd. and Taisei Corporation, both ofwhich are our Sponsors, have equity interests. When construction of the property is complete, the building itself will be owned
by TPS as we own only the land.
The Otemachi 1-6 Plan (Land with Leasehold Interest) was an attractive investment for the following reasons: (i) the property issituated in a prime geographical location in central Tokyo and is therefore likely to generate stable long-term rent income as an
A-class property, (ii) the land is not subject to depreciation and thus contributes to greater retained earnings out of which we canmake distributions; (iii) it has a higher projected NOI yield than the average NOI yield (after depreciation) of the officeproperties in central Tokyo in our portfolio, and (iv) the property is likely to have stable income with a leasehold interest of 70
years.
We also have secured certain arrangements under the surface right agreement with the property developer to enhance thestability of rental income, including:• The rent payable in respect of the land is not affected by the rent derived from the building currently under construction.
• The rent payable in respect of the land is indexed against the applicable tax rate, and the net rate payable after deducting
applicable tax will be indexed against the consumer price index, to minimize our property-related tax risk.
We are entitled to preferential negotiating rights in respect of the sale of the building which is currently under construction.
Following the acquisition of the Otemachi 1-6 Plan (Land with Leasehold Interest), “A-class” office properties in Tokyo as apercentage of the aggregate investment amount of our portfolio became approximately 30.6%, and reached approximately 68%
when combined with other large-scale offices in Tokyo.
Olinas Tower
The Olinas Tower is well-situated, approximately five-minutes walking distance from the JR line Kinshicho station and Tokyo
Metro Hanzomon line Kinshicho station. It is approximately ten-minutes by train to Tokyo station from the JR line Kinshicho
station. This property is a competitive, large-scale office property with the latest facilities and is comparable to large-scale officeproperties in downtown Tokyo.
Shinjuku Center Bldg.
The Shinjuku Center Bldg. is an office property located in the Nishi-Shinjuku area, which has one of the highest concentrationsof commercial and high-rise office properties in Japan. The property is attractive and well-known due to its location andproximity to Shinjuku station, which is one of the largest terminal stations in Tokyo.
Kawasaki Dice Bldg.
The Kawasaki Dice Bldg. is a retail property including shops, restaurants and cinemas, located in front of the JR line Kawasaki
station and Keihin Kyuko line Keikyu Kawasaki station. This property is connected to the underground shopping area in front of
the JR line Kawasaki station, has a relatively large floor area of 900 tsubo per floor and is therefore competitive as against otherproperties in the area.

48

(3) Our Current Properties
Basic Information
Office Properties
The following tables provide basic summary information for our 44 current office properties as of June 30, 2012, unlessotherwise specified. Of our office properties, 23 are located in central Tokyo, 11 are located in greater Tokyo and 10 are in other
cities in Japan.

Property
Number

Percentage
of Portfolio
Acquisition
Price
(%)

Book Value(in millions)

Land
(m²)

Leasable
Area
Owned orCo-ownedby JPR(m²)

Property Name

Location

Acquisition
Price(1)(in millions)A-1

Kanematsu Bldg.

Chuo-ku, Tokyo¥16,276

4.3¥14,893

1,751.13

7,994.02

A-2

Kanematsu Bldg.
Annex

Chuo-ku, Tokyo

2,874

0.8

2,473

679.06

2,291.13

A-3

JPR Ningyo-cho
Bldg.

Chuo-ku, Tokyo

2,100

0.6

1,987

550.062,804.56

A-4

Shin-Kojimachi
Bldg.

Chiyoda-ku, Tokyo

2,420

0.6

2,411

657.803,318.81

A-5

JPR Crest Takebashi
Chiyoda-ku, Tokyo
Bldg.

4,000

1.0

3,474

636.903,265.34

A-6

MS Shibaura Bldg.

Minato-ku, Tokyo

11,2002.9

10,918

8,992.18(2)14,470.72

A-7

Gotanda First Bldg.

Shinagawa-ku,
Tokyo

2,920

0.8

2,700

1,551.19

4,243.58

A-8

Fukuoka Bldg.

Chuo-ku, Tokyo

2,920

0.8

2,922

1,302.17

1,937.40

A-9

JPR Ichigaya Bldg.

Chiyoda-ku, Tokyo

5,100

1.3

5,303

1,058.04

4,224.96

A-10

Oval Court Ohsaki
Mark West

Shinagawa-ku,
Tokyo

3,500

0.9

3,145

4,006.00

4,088.44

A-11

Shinjuku Square
Tower

Shinjuku-ku, Tokyo

10,1802.6

9,086

8,409.52(3)11,150.78

A-12

BYGS Shinjuku
Bldg.

Shinjuku-ku, Tokyo

15,121

4.0

15,8033,522.46

15,237.87

A-13

Across Shinkawa
Bldg. Annex

Chuo-ku, Tokyo

710

0.2

625

858.481,253.39

A-14

Shinjuku Center
Bldg.

Shinjuku-ku, Tokyo

21,0005.5

21,734

14,917.11

8,861.34

Central Tokyo

A-15

Minami Azabu Bldg. Minato-ku, Tokyo

3,760

1.0

3,866

778.093,405.73

A-16

Shinagawa Canal
Bldg.

Minato-ku, Tokyo

1,870

0.5

1,826

828.821,700.57

A-17

Rokubancho Bldg.

Chiyoda-ku, Tokyo

2,800

0.7

2,908

716.952,488.36

A-18

JPR Harajuku Bldg. Shibuya-ku, Tokyo

8,400

2.2

8,745

1,205.07

4,760.09

A-19

Tokyo Tatemono
Kyobashi Bldg.

Chuo-ku, Tokyo

5,250

1.4

5,259

547.103,499.31

A-20

JPR Nihonbashihoridome Bldg.

Chuo-ku, Tokyo

5,100

1.3

5,138

937.595,299.86

A-21

JPR Sendagaya
Bldg.

Shibuya-ku, Tokyo

15,0504.0

15,2842,217.49

6,177.74

A-22(4)

Ginza Sanwa Bldg.

Chuo-ku, Tokyo

3,400

0.9

3,607

1,119.27

1,899.27

A-23

Otemachi 1-6 Plan
(Land with
Leasehold Interest)

Chiyoda-ku, Tokyo

36,0009.4

38,388

11,034.78

11,034.78

49

Property
Number

Property Name

Location

Acquisition
Price(1)(in millions)

Percentage
of Portfolio
Acquisition
Price
(%)

Book Value(in millions)

Land
(m²)

Leasable
Area
Owned orCo-ownedby JPR(m²)

Greater Tokyo
B-1

Arca East

Sumida-ku, Tokyo

5,880

1.5

4,662

3,755.01

7,022.76

B-2

JPR Chiba Bldg.

Chiba, Chiba

2,350

0.6

2,422

1,382.35

5,533.78

B-3

JPR Yokohama
Nihon Odori Bldg.

Yokohama,
Kanagawa

2,927

0.8

2,673

1,100.59

6,066.53

B-5

Shinyokohama 2nd
Center Bldg.

Yokohama,
Kanagawa

920

0.2

890

841.712,642.38

B-6

Kawaguchi Center
Bldg.

Kawaguchi, Saitama

8,100

2.1

7,182

4,524.61

15,461.98

B-7

JPR Ueno East Bldg. Taito-ku, Tokyo

3,250

0.9

3,129

1,242.97

6,490.05

B-8

Tachikawa BusinessTachikawa, Tokyo
Center Bldg.

3,188

0.8

2,988

2,047.22

4,731.04

B-9

Rise Arena Bldg.

Toshima-ku, Tokyo

5,831

1.5

5,585

9,377.28(5)6,023.39

B-10

Yume-ooka OfficeTower

Yokohama,
Kanagawa

6,510

1.7

5,991

12,011.00

12,015.15

B-11

Olinas Tower

Sumida-ku, Tokyo

31,3008.2

30,06527,335.29

23,987.40

B-12

Tokyo Tatemono
Yokohama Bldg.

Yokohama,
Kanagawa

7,000

1.8

7,001

1,110.28

6,494.09

C-1

Niigata Ekinan
Center Bldg.

Niigata, Niigata

2,140

0.6

1,660

2,706.99

5,326.88

C-4

Tokyo Tatemono
Honmachi Bldg.

Osaka, Osaka

4,150

1.1

4,181

1,432.64

7,162.60

C-7

JPR Hakata Bldg.

Fukuoka, Fukuoka

2,900

0.8

3,221

1,214.63

6,581.15

C-9

JPR Naha Bldg.

Naha, Okinawa

1,560

0.4

1,446

959.87

3,946.41

C-12

Sompo Japan Sendai
Sendai, Miyagi
Bldg.

3,150

0.8

2,374

1,895.67

7,129.05

C-13

Sompo Japan
Wakayama Bldg.

Wakayama,
Wakayama

1,670

0.4

1,308

1,128.45

4,874.91

Other Cities

C-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

2,810

0.7

2,324

1,164.39

3,257.73

C-17

JPR Dojima Bldg.

Osaka, Osaka

2,140

0.6

2,063

668.113,930.21

C-18

JPR Hakata-chuo
Bldg.

Fukuoka, Fukuoka

1,920

0.5

1,791

680.633,290.42

C-19

JPR Nagoya Fushimi
Nagoya, Aichi
Bldg.

4,137

1.1

4,212

1,610.38

7,086.37¥285,784

75.0¥242,018

146,497.33

274,469.00

Total
Notes:(1) Acquisition price excludes consumption and other taxes.

(2) Includes land of the Trinity Shibaura property, which was developed together with the MS Shibaura Bldg.
(3) Includes land for the entire redevelopment area that includes the Shinjuku Square Tower.
(4) All properties are office properties, with the exception of A-22, which has both offices and retail stores.
(5) Includes land for the entire redevelopment area that includes the Rise Arena Bldg.

50

Retail Properties
The following tables provide basic summary information for our 14 retail properties as of June 30, 2012. Five of our propertiesare located in the central Tokyo, five are located in greater Tokyo and four are located in other cities in Japan.

Property
Number

Property Name

Location

Acquisition
Price(1)(in millions)

Percentage ofPortfolio
Acquisition
Price
(%)

Book Value(in millions)

Land
(m²)

Leasable
Area
Owned orCo-ownedby JPR(m²)

3.1¥11,658

1,010.47

8,076.85

Central Tokyo
A-1

JPR Shibuya Tower
Shibuya-ku, Tokyo
Records Bldg.

¥12,000

A-2

JPR Daikanyama

Shibuya-ku, Tokyo

2,160

0.6

2,202

277.12651.29A-3

JPR Jingumae 432

Shibuya-ku, Tokyo

4,275

1.1

4,347

198.101,027.33

A-4

Shinjuku Sanchome
Shinjuku-ku, Tokyo
East Bldg.

2,740

0.7

2,739

2,578.69

2,347.81

A-5

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

3,400

0.9

3,383

6,808.12

1,101.92

Nishitokyo, Tokyo

10,2002.7

7,827

12,326.30

31,121.71

Greater Tokyo
B-1
Tanashi ASTA

(2)

B-3

Cupo-la Main Bldg. Kawaguchi, Saitama

2,100

0.6

1,905

15,008.28

5,963.00

B-4

JPR Musashikosugi Kawasaki,
Bldg.
Kanagawa

7,260

1.9

7,261

4,761.62

19,740.95

B-5

Musashiurawa
Shopping Square

Saitama, Saitama

4,335

1.1

4,101

8,317.99

14,960.69

B-6

Kawasaki Dice
Bldg.

Kawasaki,Kanagawa

15,0804.0

14,517

4,475.45

13,066.69

C-1

JPR Umeda Loft
Bldg.

Osaka, Osaka

13,000

3.4

12,571

3,518.68

18,586.97

C-3

Benetton
Shinsaibashi Bldg.

Osaka, Osaka

5,430

1.4

5,276

609.315,303.98

C-4

Housing Design
Center Kobe

Kobe, Hyogo

7,220

1.9

6,665

3,994.47

35,444.13

C-5

JPR Chayamachi
Bldg.

Osaka, Osaka

6,000

1.6

6,022

592.452,484.39¥95,200

25.0¥90,862

64,477.05

159,877.71

Other Cities

Total
Notes:(1) Acquisition price excludes consumption and other taxes.

(2) Includes land for the whole redevelopment area that includes the Cupo-la Main Bldg.

51

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 andentrusted real estate regarding beneficiary interests in real estate. Further, the planned construction expenses include portions
that are classified as expenses in accounting.

Property Name

Location

PurposeSchedule

Niigata Ekinan
Center Bldg.
Ginza Sanwa
Bldg.
Shinjuku Center
Bldg.
Shinyokohama
2nd Center Bldg.
Shinjuku Center
Bldg.

Niigata City,
Niigata
Chuo Ward,Tokyo
Shinjuku Ward,Tokyo
Yokohama City,
Kanagawa
Shinjuku Ward,Tokyo

Replacement of air conditioningunits
3rd phase of replacement of air
conditioning units
Replacement of emergency power
generators
2nd phase of replacement of air
conditioning units

Apr. 2012 ~Jul. 2012
Jul. 2012 ~Dec. 2012
Oct. 2011 ~Oct. 2012
Oct. 2012 ~Dec. 2012
Feb. 2012 ~Jul. 2012

3rd phase of replacement of toilets

Planned (millions of yen)
Payment
duringAmountTotal
the 21st
Already
Value
FiscalPaid
Period
182

―

―

43

―

―

37

―

7

31

―

―

30

―

―

(2) Capital Expenditures during the 21st Fiscal Period
The following are the capital expenditure amounts JPR invested in real estate and entrusted real estate during the 21st period.
Among major capital expenditures, JPR conducted replacement of air conditioning units to maintain and enhance tenantsatisfaction, as well as renovation of common-use areas and installation of office automation floors for leased offices with theaim of attracting new tenants. In addition, aside from these constructions, JPR conducted construction of 355 million yen (Note),
which was appropriated as expenditures for repair and maintenance.

Property Name

Location

BYGS Shinjuku Bldg.

Shinjuku Ward, Tokyo

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo

Shinyokohama 2nd
Center Bldg.

Yokohama City,
Kanagawa

Ginza Sanwa Bldg.

Chuo Ward, Tokyo

Kawaguchi Center Bldg.

Kawaguchi City, Saitama

Shinjuku Center Bldg.

Shinjuku Ward, Tokyo

Other Properties

Purpose

Period3rd phase of replacement
Jan. 2012 ~ Jun. 2012of air conditioning units
2nd phase of renewal of
Sep. 2010 ~ Mar. 2012
passenger elevators
1st phase of replacement
Apr. 2012 ~ Jun. 2012of air conditioning units
2nd phase of replacement
Mar. 2012 ~ Jun. 2012of air conditioning units
Renewal of central
Jan. 2012 ~ Mar. 2012
monitoring boards
2nd phase of replacement
Aug. 2011 ~ Jan. 2012of toilets
Repair of common areas, installation of officeautomation floors, replacement of air conditioning
units, etc.

Total

Construction
Expenses(millions of yen)
141
73
32
30
23
21
288
610

(Note) Expenditures for repair and maintenance included 7 million yen of construction management fees paid to construction management companies as well as theamounts for repair and maintenance constructions themselves.

52

(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 long-term repairs and maintenanceplans for individual properties.

Operation Period

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

731

857

737

767

764

238

121

404

389

410

112

241

374

410

357

857

737

767

746

799

Balance of deposits
at beginning ofcurrent period
Deposits during theperiodAmounts used from
deposits during theperiodDeposits carriedforward to the next
periodExpenses and Liabilities(1) Details of Expenses Related to Management
Item(a) Asset Management Fees (Note)
Fixed compensation
Incentive-based compensation 1
Incentive-based compensation 2(b) Administrative Service and Custodian Fees(c) Directors' Fee(d) Trust Fees(e) Other Expenses
Total

20th Fiscal Period(Jul. 1, 2011 – Dec. 31, 2011)
421,61375,000216,723
129,890
74,6596,600
43,737
105,346
651,956(Thousands of yen)
21st Fiscal Period(Jan. 1, 2012- Jun. 30, 2012)
443,284
75,000226,094
142,189
74,5756,600
42,693167,020734,173(Note) Aside from the amounts of the asset management fees entered above, a total 8,500 thousand yen for the 20th fiscal period and a total 90,000 thousand yen forthe 21st fiscal period have been paid for asset management of the acquired properties and have been included in the book value of each property.

53

(2) Status of Loans Payable
For the six-month period ended June 30, 2012:
Beginning
Balance
Category

Increase

EndingBalance

Decrease

Average
Interest
Rate(Note 1)
(Note 2)

Lender(Thousands of yen)MizuhoCorporate Bank,Ltd.
Mitsubishi UFJ

Repayment Repayment
Date
Method¥2,000,000¥-¥-¥2,000,000

0.758%

Jul. 4, 2012-

13,000,000

13,000,000-

0.680%

Mar. 30, 2012-

2,600,000-

2,600,000

0.680%

Jul. 4, 2012

2,000,000--

2,000,000

0.758%

Jul. 4, 2012-

2,000,000-

2,000,000

0.679%

Jul. 4, 2012

2,000,000--

2,000,000

0.758%

Jul. 4, 2012-

2,000,000

2,000,000-

0.680%

Jul. 4, 2012-

1,000,000

0.758%

Jul. 4, 2012

4,000,000-

0.680%

Jul. 4, 2012

Use

Remarks

Trust andBanking
Corporation
Resona Bank,
Limited.
Resona Bank,
Limited.
(Note 11)
Mizuho Trust &Banking Co.,

1,000,000

Ltd.
Mizuho Trust &Banking Co.,-

4,000,000

Short-Term Ltd. (Note 11)
Loans

Aozora Bank,

PayableLtd. (Note 10)
Bank of TokyoMitsubishi UFJ,Ltd.

Principal

Unsecured/

lump sum
repayment(Note 3)on

2,000,000--

2,000,000

0.758%

Aug. 26, 2012

2,000,000--

2,000,000

0.758%

Jul. 4, 2012-

3,000,000-

3,000,000

0.680%

Jul. 4, 2012

1,400,000--

1,400,000

0.758%

Jul. 4, 2012-

3,600,000

3,000,000

600,000

0.680%

Jul. 4, 2012-

3,400,000

3,400,000-

0.680%

Jul. 4, 2012-

5,000,000

5,000,000-

0.680%

Jul. 4, 2012

¥12,400,000¥38,600,000¥30,400,000¥20,600,000¥50,000¥820,000¥25,000¥845,000

1.740%(Note 4)(Note 4)200,000

100,000

100,000

200,000

3.190%(Note 5)(Note 5)200,000

100,000

100,000

200,000

2.449%(Note 6)(Note 6)

Unguaranteed/
NonSubordinatedmaturity

Sumitomo
Mitsui Banking
Corporation
Sumitomo
Mitsui Banking
Corporation(Note 11)
Sumitomo
Mitsui Banking
Corporation(Note 11)
Shinsei Bank,
Ltd. (Note 11)
Total
Development
Bank of JapanInc.
MizuhoCorporate Bank,
Current

Ltd.

Portion of

Bank of Tokyo-

Long-Term Mitsubishi UFJ,
Loans

Ltd.

PayableSumitomo
Mitsui Banking

Unsecured/
166,000

83,00083,000166,000

2.390%(Note 7)(Note 7)100,000

50,00050,000100,000

2.440%(Note 8)(Note 8)-198,000

66,000132,000

1.800%(Note 9)(Note 9)Meiji Yasuda
Company

54

NonSubordinatedCorporation
Life Insurance(Note 3)

Unguaranteed/Beginning
Balance
Category

Increase

EndingBalance

Decrease

Average
Interest
Rate(Note 1)
(Note 2)

Lender(Thousands of yen)

Repayment Repayment
Date
MethodUse

Remarks

Zenkyoren(National
MutualInsurance

5,000,000--

5,000,000

1.453%

Nov. 27, 2012

1,000,000-

1,000,000-

1.642%

Apr. 11, 2012Federation ofAgricultural
Cooperatives)
The Hachijuni
Bank, Ltd.
Sompo Japan

2,000,000-

2,000,000-

1.676%

Apr. 11, 2012

Insurance Inc.

2,000,000-

2,000,000-

2.156%

Jun. 27, 2012

2,000,000-

2,000,000-

1.676%

Apr. 11, 2012

2,000,000-

2,000,000-

1.676%

Apr. 11, 2012

1,000,000-

1,000,000-

1.676%

Apr. 11, 2012

The Chugoku
Bank, Ltd.
The Bank ofFukuoka, Ltd.
The Iyo Bank,
Current

Ltd.

Portion of

Taiyo Life

Long-Term Insurance
Loans

Company

PayableMitsubishi UFJ
Trust and-

1,000,000-

1,000,000

2.035%

Jun. 4, 2013

Unsecured/

repayment(Note 3)onmaturity

1,000,000-

1,000,000-

2.156%

Jun. 27, 2012

900,000--

900,000

2.076%

Jul. 3, 2012-

3,000,000-

3,000,000

1.376%

Feb. 4, 2013-

3,000,000-

3,000,000

1.376%

Feb. 4, 2013-

1,000,000-

1,000,000

1.376%

Feb. 4, 2013-

3,000,000-

3,000,000

1.190%

Jun. 27, 2013

Total

¥17,616,000¥12,351,000¥11,424,000¥18,543,000

Taiyo Life

¥1,000,000¥-¥-¥ 1,000,000

1.858%

Dec. 27, 2013

Insurance

1,000,000-

100,000-

2.035%

Jun. 4, 2013

Company

1,000,000--

1,000,000

1.275% Sep. 24, 2015

Daido Life

1,000,000--

1,000,000

1.858% Dec. 27, 2013

1,000,000--

1,000,000

1.666%

Feb. 5, 2015

2,000,000--

2,000,000

1.858%

Dec. 27, 2013

Banking

Principal
lump sum

Unguaranteed/
NonSubordinatedCorporation
Aozora Bank,Ltd.
The Shinkumi
Federation Bank
Mizuho Trust &Banking Co.,Ltd.
ORIX Bank
Corporation
Sumitomo
Mitsui Banking
Corporation

Insurance
Company
Sumitomo Life
Insurance
Long-Term Company
Loans

Zenkyoren

Payable(National

2,000,000--

2,000,000

2.257%

Jun. 4, 2015

Principal
lump sum
repayment
on maturity (Note 3)

NonSubordinatedMutualInsurance

Unsecured/
Unguaranteed/

2,000,000--

2,000,000

1.725%

Mar. 26, 2015

820,000-

820,000-

1.740%(Note 4)(Note 4)3,300,000-

100,000

3,200,000

3.190%(Note 5)(Note 5)Federation ofAgricultural
Cooperatives)
Development
Bank of Japan
Inc.

55

Beginning
Balance
Category

Increase

EndingBalance

Decrease

Average
Interest
Rate(Note 1)
(Note 2)

Lender(Thousands of yen)

Repayment Repayment
Date
Method5,300,000-

100,000

5,200,000

2.449%(Note 6)(Note 6)

Mizuho3,000,000--

3,000,000

1.279%

Nov. 27, 2013

Principal

Corporate Bank,

5,000,000--

5,000,000

1.414%

Feb. 4, 2016

Ltd.

lump sum

7,000,000-

7,000,000

1.093%

Mar. 30, 2017

4,419,000-

83,0004,336,000

2.390%(Note 7)(Note 7)3,000,000--

3,000,000

1.279%

Nov. 27, 2013

Principal

Ltd.

5,000,000--

5,000,000

1.198%

Mar. 25, 2016

repayment

Sumitomo

2,650,000-

50,0002,600,000

2.440%(Note 8)Mitsui Banking

3,000,000-

3,000,000-

1.190%

Jun. 27, 2013-

6,400,000-

6,400,000

1.093%

Mar. 30, 2017

5,000,000-

3,500,000

1,500,000

3.440%

Sep. 6, 2019

3,000,000-

3,000,000-

1.376%

Feb. 4, 2013-

4,000,000-

4,000,000

1.093%

Mar. 30, 2017

1,000,000-

1,000,000-

1.376%

Feb. 4, 2013

2,000,000--

2,000,000

1.281%

Nov. 27, 2013

3,000,000-

3,000,000-

1.376%

Feb. 4, 2013

Mitsubishi UFJ,

Remarks

repayment-

Bank of Tokyo-

Useon maturity

lump sumon maturity

Corporation(Note 8)AmericanFamily Life
Assurance
Company ofColumbus(Note 11)
Mizuho Trust &Banking Co.,Ltd.
ORIX Bank
Corporation(Note 11)The Shinkumi
Federation Bank
Long-Term Aozora Bank,
Ltd.
Loans

1,000,000--

1,000,000

1.322%

Sep. 30, 2013

Payable1,000,000--

1,000,000

1.070%

Sep. 24, 2013

2,000,000--

2,000,000

1.170%

Jul. 7, 2016-

2,000,000-

2,000,000

0.902%

Oct. 9, 2015
Sep. 24, 2013

The Bank ofFukuoka, Ltd.
Shinsei Bank,Ltd.
The Chugoku
Bank, Ltd.
The Hachijuni
Bank, Ltd.

2,000,000--

2,000,000

1.070%-

5,000,000-

5,000,000

1.397%

Apr. 5, 2019

1,000,000--

1,000,000

1.070%

Sep. 24, 2013-

2,000,000-

2,000,000

0.902%

Oct. 9, 2015

1,000,000--

1,000,000

1.070%

Sep. 24, 2013-

1,000,000-

1,000,000

0.902%

Oct. 9, 2015

3,000,000--

3,000,000

1.149%

May 27, 2016

4,000,000-

198,000

3,802,000

1.800%(Note 9)Principal
lump sum
repayment(Note 3)

City Bank, Ltd.
Meiji Yasuda
Life Insurance(Note 9)Company
Mitsubishi UFJ

5,000,000--

5,000,000

1.184%

Aug. 29, 2017

Trust and

1,000,000--

1,000,000

0.924%

Aug. 31, 2015-

1,000,000-

1,000,000

0.843%

Jun. 26, 2015-

2,000,000-

2,000,000

1.093%

Mar. 30, 2017

Banking
Corporation
Resona Bank,
LimitedTomin Bank,
Limitedrepayment-

1,000,000-

1,000,000

0.786%

Sep. 30, 2015-

1,000,000-

1,000,000

0.786%

Sep. 30 2015

(Note 10)The Bank of
Yokohama, Ltd.
(Note 10)56

Principal
lump sum

The Tokyo

Unguaranteed/
NonSubordinated

The
Nishi-Nippon

Unsecured/on maturity

on maturity

Beginning
Balance
Category

Increase

EndingBalance

Decrease

Lender(Thousands of yen)

Average
Interest
Rate(Note 1)
(Note 2)

Repayment Repayment
Date
MethodUse

Remarks

The Minato
Bank, Ltd.

-

800,000-

800,000

0.786%

Sep. 30 2015-

500,000-

500,000

0.786%

Sep. 30 2015

(Note 10)The Yamaguchi
Bank, Ltd.
Long-Term
Loans
Payable(Note 10)The Chiba
Kogyo Bank,-

100,000-

100,000

0.786%

Sep. 30 2015

Sompo Japan-

2,000,000-

2,000,000

0.981%

Oct. 11, 2016

Insurance Inc.

-

2,000,000-

2,000,000

0.874%

Dec. 25, 2015-

1,000,000-

1,000,000

0.902%

Oct. 9, 2015

¥81,489,000¥38,800,000¥15,851,000¥104,438,000

Ltd. (Note 10)

The Iyo Bank,
Ltd.
Total

Principal

Unsecured/

lump sum

Unguaranteed/

repayment
on maturity(Note 3)

NonSubordinated(Note 1)

The average interest rates are weighted-average figures during the period and are rounded to the third decimal point. Furthermore, fees related to loan

(Note 2)

Short-term loans payable are floating-rate loans payable. Long-term loans payable are fixed-rate loans payable, except those that fall under the categoryarrangement paid to the above lenders are not included.
of Note 11.
(Note 3)Funds are mainly 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 4)The loans payable are subject to repayment of 25 million yen on June 27, 2009 and hereafter every 6 months. In addition, repayment of 820 million yen(Note 5)The loans payable are subject to repayment of 100 million yen on December 27, 2009 and hereafter every 6 months. In addition, repayment of(Note 6)The loans payable are subject to repayment of 100 million yen on December 25, 2009 and hereafter every 6 months. In addition, repayment of(Note 7)The loans payable are subject to repayment of 83 million yen on December 27, 2009 and hereafter every 6 months. In addition, repayment of(Note 8)The loans payable are subject to repayment of 50 million yen on December 25, 2009 and hereafter every 6 months. In addition, repayment ofwill be made on maturity date June 27, 2013.
2,100 million yen will be made on maturity date June 27, 2019.
5,100 million yen will be made on maturity date June 27, 2014.
4,253 million yen will be made on maturity date June 27, 2014.
2,550 million yen will be made on maturity date June 27, 2014.
(Note 9)Concerning the 4,000 million yen in long-term loans payable to Meiji Yasuda Life Insurance Company on June 21, 2011, JPR agreed with the lender on
February 10, 2012 to change the repayment method from lump sum repayment on maturity date, June 21, 2018 to repayment of 66 million yen on the27th day of every six month, starting on June 27, 2012 and repayment of 3,208 million yen on June 21, 2018.

(Note 10)(Note 11)The loans are with floating interest rates.
On March 30, 2012, JPR repaid 2,000 million yen in short-term loans payable to Resona Bank, Limited borrowed on March 12, 2012 prior to therepayment date. On March 30, 2012, JPR repaid 4,000 million yen in short-term loans payable to Mizuho Trust & Banking Co., Ltd. borrowed on March
12, 2012 prior to the repayment date. Of the 3,600 million yen in short-term loans payable to Sumitomo Mitsui Banking Corporation borrowed on March
12, 2012, JPR repaid 3,000 million yen on March 30, 2012 prior to the repayment date. On March 30, JPR repaid 3,400 million yen in short-term loans
payable to Sumitomo Mitsui Banking Corporation borrowed on March 12, 2012 prior to the repayment date. On April 5, 2012, JPR repaid 5,000 million
yen in short-term loans payable to Shinsei Bank, Ltd. borrowed on March 12, 2012 prior to the repayment date. Of the 5,000 million yen in long-termloans payable to American Family Life Assurance Company of Columbus borrowed on September 7, 2009, JPR repaid 3,500 million yen on June 27,
2012 prior to the repayment date.

57

(3) Corporate Bonds
Details of corporate bonds outstanding as of June 30, 2012 are as follows.

Name

Third Series ofCorporate
Bonds
Sixth Series ofCorporate
Bonds
Seventh Seriesof Corporate
Bonds
Eighth Series ofCorporate
Bonds
Ninth Series ofCorporate
Bonds
Eleventh Seriesof Corporate
Bonds
Twelfth Seriesof Corporate
Bonds
Thirteenth
Series ofCorporate
Bonds
Fourteenth
Series ofCorporate
Bonds
Total

Issue
Date

Balance asof January
1, 2012(millions ofyen)

Balance asof June 30,
2012(millions ofyen)

CouponRate(% perannual)Maturity Date

Feb. 12,
2004

5,000

5,000

2.32

Feb. 12, 2014

Nov. 4,
2004

5,000

5,000

2.00

Nov. 4, 2014

Dec. 14,
2006

4,500

4,500

2.90

Dec. 14, 2026

Jul. 23,
2007

9,000

9,000

1.85

July 23, 2012

Jul. 23,
2007

6,000

6,000

2.10

July 23, 2014

Mar. 12,
2010

6,000

6,000

1.68

Mar. 12, 2015

May 21,
2010

7,000

7,000

1.27

May 21, 2015

Oct. 25,
2011

7,000

7,000

0.95

Oct. 25, 2016

Oct. 25,
2011

2,000

2,000

1.34

Oct. 25, 2018

51,50051,500

Redemption

Use

Remarks

Purchase ofproperties andrepayment ofborrowings(Note 1)

(Note 2)

Repayment ofborrowings
Bulletpayment(Note 3)Purchase ofproperties

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

58

Related-Party Transactions
Since January 1, 2009, the first day of our fifteenth fiscal period, we have not entered into material transactions with our
executive or supervisory directors or companies with whom they have a relationship or with any of our principal unitholders oraffiliates, other than those discussed below or elsewhere in this Business Report.
The following sets forth an overview of our material relationships with the Asset Manager and its shareholders, Tokyo Tatemono
Co., Ltd., Taisei Corporation, Yasuda Real Estate Co., Ltd., Meiji Yasuda Life Insurance Company and Sompo Japan Insurance
Inc. We believe that the terms of the transactions described below with each of these related parties were at least as favorable tous as those that we could have obtained from unrelated parties.
Transactions with Tokyo Realty Investment Management, Inc.
Satoshi Okubo has served as our substitute executive director since September 2011 and has been the CEO and Representative
Director of the Asset Manager since June 2010. Our material transactions with the Asset Manager are as follows.
Asset Management and Acquisitions
We have entered into an asset management agreement with the Asset Manager with respect to the operation and management ofour properties. In accordance with this agreement, we pay the Asset Manager a fixed fee of ¥12.5 million per month and three
types of incentive fees. The incentive fees are based on our total revenue, retained earnings and an asset acquisition fee for realestate property or asset-backed securities acquired. For the fiscal period ended June 30, 2012, we paid the Asset Manager anaggregate amount of ¥533 million, of which ¥443,284 thousand was for asset management fees.
Purchase of Our Units
At the time of our incorporation, we issued 40 units to the Asset Manager in return for a capital contribution of ¥20 million.
Following a unit split on January 22, 2002, the number of units owned by the Asset Manager increased to 100. The number ofinvestment units held by the Asset Manager has remained at 100 units through June 30, 2012, or 0.01% of our issued andoutstanding units, with the total investment unchanged at ¥20 million.
Transactions with Tokyo Tatemono Co., Ltd.
Tokyo Tatemono Co., Ltd. currently owns 40% of the Asset Manager’s issued and outstanding share capital. Our materialtransactions with Tokyo Tatemono Co., Ltd. are as follows.
Acquisitions
As part of our strategic replacement of assets, since January 1, 2009, we have acquired three properties from Tokyo Tatemono
Co., Ltd. (including from special purpose companies in which Tokyo Tatemono Co., Ltd. had equity interests): the Olinas Tower,a large scale office property in Tokyo, for the acquisition price of ¥31,300 million, the Tokyo Tatemono Kyobashi Bldg. for theacquisition price of ¥5,250 million, the Tokyo Tatemono Yokohama Bldg. for the acquisition price of ¥7,000 million and JPR
Sendagaya Bldg. for the acquisition price of ¥15,050 million. Tokyo Tatemono Co., Ltd. also acted as the selling agent withrespect to our acquisition of certain properties.
We also acquired the Otemachi 1-6 Plan (Land with Leasehold Interest) (tentative name) in March 2012 from a special purpose
company in which Tokyo Tatemono Co., Ltd. and Taisei Corporation have equity interests.
Various Services
We have appointed Tokyo Tatemono Co., Ltd. as our general tenant services agent, property transfer agent, leasing management
and construction management adviser, environmental legislation adviser and property manager. In consideration of thisappointment, for the fiscal period ended June 30, 2012, we paid Tokyo Tatemono Co., Ltd. an aggregate of ¥591 million in feesthat are partly recognized as property management fees and partly recognized as outsourcing expenses.
For the fiscal period ended June 30, 2012, we paid Tokyo Tatemono Co., Ltd. brokerage fees of ¥1,080 million. We also paid
Tokyo Tatemono Real Estate Sales Co., Ltd., an affiliate of Tokyo Tatemono Co., Ltd., brokerage fees of ¥50 million, andE-State Online Co., Ltd., a wholly-owned subsidiary of Tokyo Tatemono Co., Ltd., advertising fees of ¥1 million over thisperiod.
Purchase of Our Units
At the time of our incorporation, we issued 100 units to Tokyo Tatemono Co., Ltd. in return for a capital contribution of ¥50
million. On November 16, 2001, Tokyo Tatemono Co., Ltd. purchased 19,100 of our units by way of private placement for an59

aggregate price of ¥9,550 million. Following a unit split on January 22, 2002, the number of units owned by Tokyo Tatemono
Co., Ltd. increased to 48,000 units. Tokyo Tatemono Co., Ltd. later sold 8,700 of our units on December 17, 2002 and 10,000
units on January 21, 2004. As of June 30, 2012, Tokyo Tatemono Co., Ltd. owned 29,300 units, or 4.09% of our issued andoutstanding units, making it our fourth largest unitholder.
Repairs
In addition to the transactions referred to above, for the fiscal period ended June 30, 2012, we paid ¥378 million for repairs on
the properties in our portfolio conducted by Tokyo Tatemono Co., Ltd. We also paid ¥145 million and ¥39 million for repairs
conducted by Shinjuku Center Building Management Co., Ltd. and Tokyo Tatemono Techno-build Co., Ltd., both wholly-owned
subsidiaries of Tokyo Tatemono Co., Ltd.
Transactions with Taisei Corporation
Taisei Corporation currently owns 20% of the Asset Manager’s issued and outstanding share capital. Our material transactions
with Taisei Corporation are as follows.
Acquisitions
We acquired the Otemachi 1-6 Plan (Land with Leasehold Interest) (tentative name) in March 2012 from a special purpose
company in which Tokyo Tatemono Co., Ltd. and Taisei Corporation have equity interests.
Property Management Services
For the fiscal period ended June 30, 2012, we paid Taisei-Yuraku Real Estate Co., Ltd. ¥2 million in property management fees.
Purchase of Our Units
At the time of our incorporation, we issued 100 units to Taisei Corporation in return for a capital contribution of ¥50 million. On
November 16, 2001, Taisei Corporation purchased 500 of our units by way of private placement for an aggregate price of ¥250
million. Following a unit split on January 22, 2002, the number of units owned by Taisei Corporation increased to 1,500. As of
July 30, 2012, Taisei Corporation owned 1,500 of our issued and outstanding units.
Repairs
In addition to the transactions referred to above, for the fiscal period ended June 30, 2012, we paid ¥40 million for repairs
conducted by Taisei Corporation and ¥0.14 thousand for repairs conducted by Taisei-Yuraku Real Estate., Co., Ltd. on theproperties in our portfolio.
Transactions with Yasuda Real Estate Co., Ltd.
Yasuda Real Estate Co., Ltd. currently owns 20% of the Asset Manager’s issued and outstanding share capital.
General Tenant Services and Property Management Services
We appointed Yasuda Real Estate Co., Ltd. as our general tenant services agent and property manager in 2002. In considerationof this appointment, for the fiscal period ended June 30, 2012, we paid Yasuda Real Estate Co., Ltd. an aggregate of ¥29 million
in fees that are partly recognized as property management fees and partly recognized as outsourcing expenses.
Purchase of Our Units
On November 16, 2001, Yasuda Real Estate Co., Ltd. purchased 4,000 of our units by way of private placement for an aggregate
price of ¥2 billion. Following a unit split on January 22, 2002, the number of units owned by Yasuda Real Estate Co., Ltd.
increased to 10,000. Yasuda Real Estate Co., Ltd. sold 5,000 of its units on January 23, 2003. As of June 30, 2012, Yasuda Real
Estate Co., Ltd. owned 5,000 of our issued and outstanding units.
Repairs
In addition to the transactions referred to above, for the fiscal period ended June 30, 2012, we paid ¥18 million for repairs
conducted by Yasuda Real Estate Co., Ltd. on the properties in our portfolio.
Transactions with Meiji Yasuda Life Insurance Company
Meiji Yasuda Life Insurance Company currently owns 10% of the Asset Manager’s issued and outstanding share capital.
Transactions with Sompo Japan Insurance Inc.

60

Sompo Japan Insurance Inc. currently owns 10% of the Asset Manager’s issued and outstanding share capital.
Other(1) Notice
There are no major contracts concluded or revised, which have been approved by the Board of Directors of JPR during the 21stfiscal period.
(2) Other
Unless otherwise stated, monetary amounts are rounded down and percentage figures are rounded off to the nearest specified
unit in this Business Report.

61

Audited Financial Statements

Balance Sheets(As of December 31, 2011 and June 30, 2012)
End of 20th Fiscal Period(as of December 31, 2011)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Other¥13,647,529
13,132,684
168,364
218,622
4,594¥12,750,078
11,910,686
256,788
153,433
4,713

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation

27,171,795

25,075,700

50,640,038(6,749,650)

51,044,234(7,505,860)

Buildings, net
Buildings in trust
Accumulated depreciation

43,890,388
75,389,949(19,394,293)

43,538,373
75,570,997(20,326,948)

Buildings in trust, net
Structures
Accumulated depreciation

55,995,656
40,334(6,726)55,244,049
41,823(7,914)Structures, net
Structures in trust
Accumulated depreciation

33,608109,241(41,402)33,908109,441(45,245)

Structures in trust, net
Machinery and equipment
Accumulated depreciation

67,839572,397(244,149)

64,196577,666(261,833)

Machinery and equipment, net
Machinery and equipment in trust
Accumulated depreciation

328,248
1,407,495(921,208)

315,833
1,418,326(956,595)

Machinery and equipment in trust, net
Tools, furniture and fixtures
Accumulated depreciation

486,287
37,912(19,653)

461,731
41,588(21,866)

Tools, furniture and fixtures, net
Tools, furniture and fixtures in trust
Accumulated depreciation

18,259104,732(71,072)

19,721
112,390(76,099)

33,660106,648,291
120,491,113
90,914-36,291
106,669,360
158,879,372
104,711
1,009

328,084,267

365,368,560

4,794,109
7,146

4,794,109
5,956

4,801,255

4,800,065

49,520422,583

49,520577,784

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

62(Thousands of yen)
End of 21st Fiscal Period(as of June 30, 2012)

472,103627,304

333,357,626

370,795,930

169,685

146,257

169,685

146,257¥360,699,107¥396,017,887

End of 20th Fiscal Period(as of December 31, 2011)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Current portion of investment corporation bonds
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Total current liabilities
Noncurrent liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Total noncurrent liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary deposits
Deposits for advanced depreciation(Thousands of yen)
End of 21st Fiscal Period(as of June 30, 2012)¥1,445,952
12,400,000
17,616,000
9,000,000
523,418
337,468
605
126,906
1,759,735¥2,640,312
20,600,000
18,543,000
9,000,000
809,548
302,602605
122,215
2,328,074

43,210,085

54,346,358

42,500,000
81,489,000
7,711,990
10,147,460

42,500,000
104,438,000
7,408,110
11,289,504

141,848,450

165,635,614

185,058,535

219,981,973

171,339,818

171,339,818

73,94673,946

Total voluntary deposits
Unappropriated retained earnings (undisposed losses)

73,9464,226,806

73,946
4,622,149

Total surplus

4,300,752

4,696,096

175,640,571

176,035,914

Total unitholders’ equity
Total net assets
Total liabilities and net assets

175,640,571

176,035,914¥360,699,107¥396,017,887

63

Statements of Income and Retained Earnings(For the fiscal periods ended December 31, 2011 and June 30, 2012)
20th Fiscal Period(Thousands of yen)
21st Fiscal Period(July 1, 2011 –December 31, 2011)(January 1, 2012 –June 30, 2012)

Operating revenue
Rent revenue-real estate¥11,772,766¥12,345,900

Total operating revenue

11,772,766

12,345,900

Operating expenses
Expenses related to rent business
Asset management fee
Administrative service and asset custody fees
Directors’ compensation
Trust fees
Other operating expenses

5,357,207
421,61374,6596,600
43,737
105,346

5,217,950
443,284
74,5756,600
42,693167,020

Total operating expenses

6,009,163

5,952,124

Operating income
Non-operating income
Interest income
Income on settlement of management association accounts

5,763,602

6,393,776

2,790
5,486
2,514

2,666
54,158
5,622

10,79162,447944,718
147,084
457,769
20,1393,681

1,000,168
373,744459,431
23,4282,163

Total non-operating expenses

1,573,392

1,858,935

Ordinary income

4,201,000

4,597,288

Income before income taxes

4,201,000

4,597,288

605
11

605
-

Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Other

Income taxes-current
Income taxes-deferred

616

605

Net income
Retained earnings brought forward

4,200,383
26,422

4,596,683
25,466

Unappropriated retained earnings¥4,226,806¥4,622,149

Total income taxes

64

Statements of Unitholders’ Equity(For the fiscal periods ended December 31, 2011 and June 30, 2012)
20th Fiscal Period(Thousands of yen)
21st Fiscal Period(July 1, 2011 –December 31, 2011)(January 1, 2012 –June 30, 2012)

Unitholders’ equity
Unitholders’ capital
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period¥171,339,818--

Balance at the end of current period

171,339,818

171,339,818

Surplus
Voluntary deposits
Balance at the beginning of current period
Change of items during the period
Total change of items during the period

73,94673,946--

Balance at the end of current period

73,94673,946

4,038,287

4,226,806(4,011,865)
4,200,383(4,201,340)
4,596,683

Unappropriated retained earnings
Balance at the beginning of current period
Changes of items during the period
Dividends from surplus
Net income
Total changes of items during the period
Balance at the end of current period
Total surplus
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Total unitholders’ equity
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Total net assets
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period¥171,339,818

188,518

395,343

4,226,806

4,622,149

4,112,234

4,300,752

188,518

395,343

4,300,752

4,696,096

175,452,052

175,640,571

188,518

395,343

175,640,571

176,035,914

175,452,052

175,640,571

188,518

395,343¥175,640,571¥176,035,914

65

Statements of Cash Flows(For the fiscal periods ended December 31, 2011 and June 30, 2012)
20th Fiscal Period(July 1, 2011 –December 31, 2011)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Increase (decrease) in provision for loss on disaster
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Other, net(Thousands of yen)
21st Fiscal Period(January 1, 2012 –June 30, 2012)¥4,201,000
1,825,438
20,139(3,093)(2,790)1,402,487
41,257(67,100)(50,384)
32,839(63,061)
160,706(16,097)¥4,597,288
1,755,478
23,428(2,666)
1,459,599(88,424)
65,189150,308
6,394(4,691)
568,339(165,208)

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

7,481,343
2,790(1,392,260)
241

8,365,035
2,666(1,494,464)
24

Net cash provided by (used in) operating activities

6,092,114

6,873,261(3,933,256)(250,208)(40,115)410,015(321,835)
201,244(474,731)(37,520,326)(210,491)
49,124(277,809)
1,566,126

Net cash provided by (used in) investing activities(3,934,156)(36,868,108)

Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of investment corporation bonds
Redemption of investment corporation bonds
Dividends paid

16,800,000(14,400,000)
8,000,000(14,158,000)
8,939,826(5,000,000)(4,010,855)

38,600,000(30,400,000)
38,800,000(14,924,000)(4,200,602)

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust(3,829,028)

27,875,397

Net changes in cash and cash equivalents
Cash and cash equivalents at the beginning of current period(1,671,070)
28,451,284(2,119,448)
26,780,213

Cash and cash equivalents at the end of current period¥26,780,213¥24,660,764

Net cash provided by (used in) financing activities

66

Notes to Financial Statements(For the fiscal periods ended December 31, 2011 and June 30, 2012)
Basis of Presenting Financial Statements
Japan Prime Realty Investment Corporation (JPR) maintains its accounting records and prepares its financial
statements in accordance with accounting principles generally accepted in Japan (Japanese GAAP), including
provisions set forth in the Financial Instrument and Exchange Act of Japan, the Act on Investment Trusts andInvestment Corporations (ITA), the Companies Act and the related regulations, which are different in certain
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 wereprepared in accordance with Japanese 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.

Summary of 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 andequipment 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 basedon the Corporation Tax Law.
(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 inreal estate as entrusted property. Taxes on property and equipment capitalized amounted to 11,832 thousand yen and
1,214, 922 thousand yen for the fiscal periods ended December 31, 2011 and June 30, 2012, respectively.
4. Cash and Cash Equivalents
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 have insignificant risk of price fluctuation and original
maturities of three months or less from the acquisition date.

67

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.
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 trustb. Buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, landin trust and construction in progress in trustc. Tenant leasehold and security deposits in trust(2) Accounting for Consumption Taxes
National and local consumption taxes are accounted with the consumption taxes excluded.

68

Notes to Balance Sheets
1. Assets Pledged as Collateral and Secured Liabilities
Assets pledged as collateral are as follows:

Buildings (net)
Machinery and equipment (net)Land

End of 20th Fiscal Period(as of December 31, 2011)¥128,245
4,109
399,183

Total¥531,538(Thousands of yen)
End of 21st Fiscal Period(as of June 30, 2012)¥126,377
3,937
399,183¥529,498

Secured liabilities are as follows:

Tenant leasehold and security deposits

End of 20th Fiscal Period(as of December 31, 2011)¥15,536

Total¥15,536(Thousands of yen)
End of 21st Fiscal Period(as of June 30, 2012)¥15,536¥15,536

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

Credit limit
Outstanding debt at end of period
Unused commitment line at end of period

End of 20th Fiscal Period(as of December 31, 2011)¥28,000,000¥28,000,000(Thousands of yen)
End of 21st Fiscal Period(as of June 30, 2012)¥28,000,000¥28,000,000

3. Minimum Total Unitholders’ Equity Designated in Article 67- 4 in the ITA

End of 20th Fiscal Period(as of December 31, 2011)¥50,000(Thousands of yen)
End of 21st Fiscal Period(as of June 30, 2012)¥50,00069

Notes to Statements of Income and Retained Earnings
1. Breakdown of Rent Revenue-Real Estate and Expenses Related to Rent Business

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)

20th Fiscal Period(Thousands of yen)
21st Fiscal Period(July 1, 2011 December 31, 2011)(January 1, 2012 June 30, 2012)¥8,929,627
1,791,571
211,756
22,265
10,76830,607¥8,731,979
844,537
1,772,110
214,479
22,065
10,94830,31910,996,596

11,626,440

680,935
8,812
42,92035,9007,600

627,775
5,650
29,14943,08013,804776,169

719,459¥11,772,766¥12,345,900¥510,719
711,022
1,061,353
28,499335,943
218,790
554,490
1,824,245
112,143¥496,848
682,325
1,031,480
27,475
347,478
214,971555,947
1,754,353
107,069¥5,357,207¥5,217,950¥6,415,559¥7,127,949

Notes to Statements of Unitholders’ Equity

Total number of authorized units
The number of units outstanding

20th Fiscal Period

21st Fiscal Period(July 1, 2011 –December 31, 2011)(January 1, 2012 –June 30, 2012)

5,000,000 units
715,000 units

5,000,000 units
715,000 units

Notes to Statements of Cash Flows
Breakdown of Cash and Cash Equivalents

Cash and deposits

20th Fiscal Period(Thousands of yen)
21st Fiscal Period(July 1, 2011 –December 31, 2011)(January 1, 2012 –June 30, 2012)¥13,647,529¥12,750,078

Cash and deposits in trust

13,132,684

11,910,686

Cash and cash equivalents¥26,780,213¥24,660,76470

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
20th Fiscal Period

21st Fiscal Period(July 1, 2011 –December 31, 2011)(January 1, 2012 –June 30, 2012)

Effective statutory tax rate

39.33%

39.33%(39.33%)(39.33%)

Other

0.01%

0.01%

Effective tax rate after applying tax effect accounting

0.01%

0.01%

(Adjustment)
Deductible cash distributions

LeasesJPR leases properties on which rental revenues are earned. At December 31, 2011 and June 30, 2012, future lease revenues
under non-cancelable operating leases are summarized as follows:

Due within one year
Due after one year

20th Fiscal Period(As of December 31, 2011)¥6,347,336
24,314,724

Total¥30,662,061(Thousands of yen)
21st Fiscal Period(As of June 30, 2012)¥6,840,868
25,164,877¥32,005,746

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 policy of paying heed to efficiently combining the procurement of long-term funds that are stable and the
procurement of short-term funds that emphasize 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 bycomplying with the JPR Asset Management Guidelines and other rules and regulations. The following outlines the description ofindividual 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 aremanaged through such 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 are managed through such measures as procuring funds from the capital market by increasing capital, executing acommitment line agreement with the main lending financial institutions, and also having statements of cash receipts anddisbursements 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 reasonablecalculations 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, 2011 and June 30, 2012, and the difference
between these amounts. Please note that the following tables do not include those for which discerning of estimated fair value isrecognized to be extremely difficult (please refer to Note 3).

71End of 20th Fiscal Period (as of December 31, 2011)(Thousands of yen)
Carrying Value(Note 1)
1) Cash and deposits
2) Cash and deposits in trust3) Short-term loans payable4) Current portion of long-term loans payable5) Current portion of investment corporation bonds
6) Investment corporation bonds7) Long-term loans payable

Estimated Fair
Value (Note 1)¥13,647,529
13,132,684(12,400,000)(17,616,000)(9,000,000)(42,500,000)(¥81,489,000)¥13,647,529
13,132,684(12,400,000)(17,708,796)(9,055,800)(43,131,115)(¥83,544,955)

Difference¥92,796
55,800631,115¥2,055,955

End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)
Carrying Value(Note 1)
1) Cash and deposits
2) Cash and deposits in trust3) Short-term loans payable4) Current portion of long-term loans payable5) Current portion of investment corporation bonds
6) Investment corporation bonds7) Long-term loans payable

Estimated Fair
Value (Note 1)¥12,750,078
11,910,686(20,600,000)(18,543,000)(9,000,000)(42,500,000)(¥104,438,000)¥12,750,078
11,910,686(20,600,000)(18,654,887)(9,007,799)(43,258,083)(¥105,870,096)

Difference¥111,887
7,799
758,083¥1,432,096(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 isthus stated at that book value.

(3)

Short-term loans payable
As these financial instruments are settled within a short period of time and also have floating interest rates, the estimated fair value is approximately
the same as the book value and is thus stated at that book value.

(4) Current portion of long-term loans payable, and (7) 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 bookvalue, 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 therate assumed as being applicable in the event of a new drawdown corresponding to the remaining loan term.
(5) Current portion of investment corporation bonds, and (6) 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 priceare calculated according to (4) and (7) 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 notsubject to disclosure of estimated fair 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.

72

End of 20th Fiscal Period (as of December 31, 2011)(Thousands of yen)
Carrying Value¥7,711,990¥10,147,460

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)
Carrying Value¥7,408,110¥11,289,504

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust(Note 4) Amount of redemption of monetary claims scheduled to be due after the settlement of accounts.

End of 20th Fiscal Period (as of December 31, 2011)(Thousands of yen)Due in One Year or Less
¥13,647,529¥13,132,684

Cash and deposits
Cash and deposits in trust
End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)Due in One Year or Less
¥12,750,078¥11,910,686

Cash and deposits
Cash and deposits in trust(Note 5) Amount of repayment or redemption of short-term loans payable, investment corporation bonds and long-term loans payable scheduled to be due after thesettlement of accounts.

End of 20th Fiscal Period (as of December 31, 2011)(Thousands of yen)

Short-term loans payable
Investment corporation bonds
Long-term loans payable

Due in One
Year
or Less

Due after
One Yearthrough
Two Years¥12,400,000
9,000,000¥17,616,000¥¥30,486,000

Due after
Two Years
throughThree Years¥16,000,000¥12,103,000

Due afterThree Years
through
Four Years¥13,000,000¥7,200,000

Due after
Four Years
throughFive Years¥7,000,000¥15,200,000

Due after
Two Years
throughThree Years¥24,000,000¥6,332,000

Due afterThree Years
through
Four Years¥¥26,732,000

Due after
Four Years
throughFive Years¥7,000,000¥23,732,000

Due after
Five Years¥6,500,000¥16,500,000

End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)

Short-term loans payable
Investment corporation bonds
Long-term loans payable

Due in One
Year or Less

Due after
One Yearthrough
Two Years¥20,600,000
9,000,000¥18,543,000¥5,000,000¥30,468,000

Due after
Five Years¥6,500,000¥17,174,000

73

Segment Information
Segment information for the fiscal periods ended December 31, 2011 and June 30, 2012 is as follows:(a) Operating Segment Information
Disclosure is omitted as JPR is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise-wide Disclosures(1) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment is in excess of 90% of total revenues.
(2) Information about Geographic Areas
Revenues from Overseas Customers:
Disclosure is not required as revenues from external customers attributed to Japan are in excess of 90% of total revenues.
Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Disclosure is omitted as revenues from major customers are less than 10% of total revenues.

Investment and Rental Properties
JPR owns urban office properties and retail properties for leasing in Tokyo and other regions. The following is the carrying
value, amount of increase (decrease) during the current period and estimated fair value of these investment and rental properties.
End of 20th Fiscal Period (as of December 31, 2011)(Thousands of yen)
Carrying Value
As of July 1, 2011

Amount of Increase(Decrease) During Current Period

As of December 31, 2011

¥330,536,005¥2,344,615¥332,880,621

Estimated Fair Value at
End of Current Period¥314,704,000(Note 1) The carrying value is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) during the current period for investment and rental properties, the amount of increase is primarily attributable toacquisition of Ginza Sanwa Bldg. (3,550,430 thousand yen).
(Note 3) The estimated fair value at the end of the current period is the appraisal value or survey value as appraised by an outside real estate appraiser.

The income (loss) in the 20th fiscal period for investment and rental properties are as presented in the “Notes to Statements ofIncome and Retained Earnings.”
End of 21st Fiscal Period (as of June 30, 2012)(Thousands of yen)
Carrying Value
As of January 1, 2012

Amount of Increase(Decrease) During Current Period

As of June 30, 2012

¥332,880,621¥37,282,613¥370,163,234

Estimated Fair Value at
End of Current Period¥347,558,000(Note 1) The carrying value is the cost of acquisition less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) during the current period for investment and rental properties, the amount of increase is primarily attributable toacquisition of Otemachi 1-6 Plan (Land with Leasehold Interest) (38,388,259 thousand yen).
(Note 3) The estimated fair value at the end of the current period is the appraisal value or survey value as appraised by an outside real estate appraiser.

The income (loss) in the 21st fiscal period for investment and rental properties are as presented in the “Notes to Statements ofIncome and Retained Earnings.”

74

Transactions with Affiliated Parties
Transactions with Affiliated Parties for the fiscal periods ended December 31, 2011 and June 30, 2012 are as follows:(1) Parent Company and Major Corporation Unitholders
Not applicable(2) Subsidiaries
Not applicable(3) Sister Companies
Not applicable(4) Directors and Major Individual Unitholders
Not applicable

Per Unit Information(Yen)
20th Fiscal Period(July 1, 2011 - December 31, 2011)

21st Fiscal Period(January 1, 2012 - June 30, 2012)¥245,651¥5,874¥246,204¥6,428

Total net assets per unit
Net income per unit

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

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

20th Fiscal Period(July 1, 2011 - December 31, 2011)

21st Fiscal Period(January 1, 2012 - June 30, 2012)¥4,200,383¥4,200,383
715,000 units¥4,596,683¥4,596,683
715,000 units

75Subsequent Events
Fiscal period ended June 30, 2012
Issue of New Investment Units through Public Offering
JPR resolved at its Board of Directors Meetings held on July 9, 2012 and July 23, 2012 to issue new investment units as
described below. Pursuant to the following terms and conditions, payment for the new investment units issued via public
offering was completed on July 30, 2012, and payment for the new investment units issued through third-party allotment wascompleted on August 29, 2012. As a result, unitholders’ capital was 192,044,238,600 yen as of August 29, 2012, with the total
number of investment units issued at 825,000 units.
[Issuance of New Investment Units via Public Offering]<Domestic primary offering and international offering centering on Europe and Asia (excluding the U.S. and Canada)>
Total number of units issued：101,420 (57,420 units via domestic primary offering and 44,000 units via
international offering (42,580 units underwritten by overseas underwriters and
1,420 units additionally issued pursuant to the option to purchase the investment
units granted to overseas underwriters))

Issue price (offer price)：194,610 yen per unit

Total amount of issue price (offer price)：19,737,346,200 yen

Paid-in amount (purchase price)：188,222 yen per unit

Gross proceeds (total purchase price)：19,089,475,240 yen

Payment date：July 30, 2012

Starting date of computation for cash distribution：July 1, 2012

[Issue of New Investment Units through Third-Party Allotment (Third-Party Allotment through the Exercise of Greenshoe Option)]
Total number of units offered：8,580 units

Paid-in amount (purchase price)：188,222 yen per unit

Gross proceeds (total purchase price)：1,614,944,760 yen

Third-party alottee：Mizuho Securities Co., Ltd.

Payment date：August 29, 2012

Starting date of computation for cash distribution：July 1, 2012

[Use of Proceeds]
JPR will use the net proceeds from the public offering and the third-party allotment of new investment units to partly pay for theacquisition costs of a new specified asset and to repay borrowings.
(Note) The number of investment units issued through the exercise of the option, which is granted to the international managers and allows them to purchase theinvestment units to be additionally issued for the international offering, was determined to be 1,420 units on July 26, 2012.

76

Details of Tangible Assets
For the six-month period ended June 30, 2012:(Thousands of yen)EndingBalanceAccumulated
Depreciation

Depreciation
for the
PeriodNet Property,
Plant andEquipment¥-¥51,044,234¥7,505,860¥756,210¥43,538,373

181,656

608

75,570,997

20,326,948

932,655

55,244,049

40,334

1,488-

41,823

7,914

1,188

33,908Structures in trust

109,241200-

109,441

45,245

3,843

64,196

Machinery and Equipment

572,397

5,268-

577,666

261,833

17,683315,833

Machinery and Equipment in
trust

1,407,495

10,831-

1,418,326

956,595

35,386

461,731

Tools, Furniture and fixtures

37,912

3,676-

41,58821,866

2,213

19,721Tools, Furniture and fixturesin trust

104,732

7,657-

112,390

76,0995,026

36,291

Land

106,648,291

21,069-106,669,360--

106,669,360

Land in trust

120,491,113

38,388,259-

158,879,372--

158,879,372

90,91461,08047,283

104,711--

104,711

-

1,009

-

1,009

-

-

1,009

¥355,532,422¥39,086,394¥47,891¥394,570,924¥29,202,364¥1,754,209¥365,368,560

Beginning
Balance

Increase

Buildings¥50,640,038¥404,195

Buildings in trust

75,389,949

Structures

Construction in progress
Construction in progress in
trust
Total

Decrease(Note 1) The “Increase” is due to property acquisitions and construction works, etc.
(Note 2) The “Decrease” in construction in progress is due to the transfer to relevant accounts as a result of construction completion, and the “Decrease” inbuildings in trust is due to retirement of assets.

77

Investment Corporation Bonds
For the six-month period ended June 30, 2012:

Name

Issue Date

Beginning
BalanceEndingBalance

Decrease(Thousands of yen)

Coupon Rate
Maturity Date Redemption(Per Annum)

Third Series ofInvestment
Corporation Bonds(Note 1)Feb. 12, 2004

¥5,000,000¥-¥5,000,000

2.32%

Feb. 12, 2014

Sixth Series ofInvestment
Corporation Bonds(Note 2)

Nov. 4, 2004

5,000,000-

5,000,000

2.00%

Nov. 4, 2014

Seventh Series ofInvestment
Corporation Bonds(Note 3)

Dec. 14, 2006

4,500,000-

4,500,000

2.90%

Dec. 14, 2026

Eighth Series ofInvestment
Corporation Bonds(Note 3)

Jul. 23, 2007

9,000,000-

9,000,000

1.85%

Jul. 23, 2012

Ninth Series ofInvestment
Corporation Bonds(Note 3)

Jul. 23, 2007

6,000,000-

6,000,000

2.10%

Jul. 23, 2014

Eleventh Series ofInvestment
Corporation Bonds(Note 3)Mar. 12, 2010

6,000,000-

6,000,000

1.68%

Mar. 12, 2015

Twelfth Series ofInvestment
Corporation Bonds(Note 3)

May 21, 2010

7,000,000-

7,000,000

1.27%

May 21, 2015

Thirteenth Series ofInvestment
Corporation Bonds(Note 3)Oct. 25, 2011

7,000,000-

7,000,000

0.95%

Oct. 25, 2016

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

2,000,000-

2,000,000

1.34%

Oct. 25, 2018

¥51,500,000¥-¥51,500,000

Use

Remarks

Purchase ofproperties
andrepaymentof loans

Repayment of
loans

Total

Bulletrepayment

Unsecured

Purchase ofproperties

Redemptionof investment
corporation
bonds andrepayment 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 number of 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.

78

Status of Loans Payable
For the six-month period ended June 30, 2012:
Beginning
Balance
Category

Increase

EndingBalance

Decrease

Average
Interest
Rate(Note 1)
(Note 2)

Lender(Thousands of yen)

Repayment
Date

Repayment
MethodUse

Remarks

MizuhoCorporate
Bank, Ltd.

¥2,000,000¥-¥-¥2,000,000

0.758%

Jul. 4, 2012-

13,000,000

13,000,000-

0.680%

Mar. 30, 2012-

2,600,000-

2,600,000

0.680%

Jul. 4, 2012

Mitsubishi UFJ
Trust andBanking
Corporation

2,000,000--

2,000,000

0.758%

Jul. 4, 2012-

2,000,000-

2,000,000

0.679%

Jul. 4, 2012

Resona Bank,
Limited.

2,000,000--

2,000,000

0.758%

Jul. 4, 2012

Resona Bank,
Limited.
(Note 11)-2,000,000

2,000,000-

0.680%

Jul. 4, 2012

Mizuho Trust& Banking Co.,Ltd.

1,000,000--

1,000,000

0.758%

Jul. 4, 2012

Mizuho Trust& Banking Co.,Ltd (Note 11)-

4,000,000

4,000,000-

0.680%

2,000,000--

2,000,000

0.758%

Principal
Unsecured/
lump sum
Unguaranteed/
repayment (Note 3)
Nonon
SubordinatedAug. 26, 2012 maturity

2,000,000--

2,000,000

0.758%

Jul. 4, 2012

ShortTerm
Loans Aozora Bank,
Payable Ltd. (Note 10)
Bank of TokyoMitsubishi UFJ,
Ltd.

Jul. 4, 2012-

3,000,000-

3,000,000

0.680%

Jul. 4, 2012

Sumitomo
Mitsui Banking
Corporation

1,400,000--

1,400,000

0.758%

Jul. 4, 2012

Sumitomo
Mitsui Banking
Corporation(Note 11)-3,600,000

3,000,000

600,000

0.680%

Jul. 4, 2012

Sumitomo
Mitsui Banking
Corporation(Note 11)-3,400,000

3,400,000-

0.680%

Jul. 4, 2012

Shinsei Bank,
Ltd. (Note 11)-5,000,000

5,000,000-

0.680%

Jul. 4, 2012

¥12,400,000¥38,600,000¥30,400,000¥20,600,000¥50,000¥820,000¥25,000¥845,000

1.740%(Note 4)(Note 4)200,000

100,000

100,000

200,000

3.190%(Note 5)(Note 5)

MizuhoCorporate
Bank, Ltd.

200,000

100,000

100,000

200,000

2.449%(Note 6)(Note 6)

Bank of TokyoMitsubishi UFJ,Ltd.

166,000

83,00083,000166,000

2.390%(Note 7)(Note 7)

Sumitomo
Mitsui Banking
Corporation

100,000

50,00050,000100,000

2.440%(Note 8)(Note 8)-198,000

66,000132,000

1.800%(Note 9)(Note 9)Total
Development
Bank of JapanInc.

Current Meiji Yasuda
Portion of Life InsuranceLong- Company
Term Zenkyoren
Loans (National
Payable Mutual
Insurance
Federation ofAgricultural
Cooperatives)(Note 3)5,000,000--

5,000,000

1.453%

Nov. 27, 2012

2,000,000-

2,000,000-

1.676%

2,000,000-

2,000,000-

2.156%

Principal
lump sumApr. 11, 2012 repayment
on
Apr. 11, 2012 maturity
Jun. 27, 2012

The Chugoku
Bank, Ltd.

2,000,000-

2,000,000-

1.676%

Apr. 11, 2012

The Bank ofFukuoka, Ltd.

2,000,000-

2,000,000-

1.676%

Apr. 11, 2012

The Hachijuni
Bank, Ltd.
Sompo Japan
Insurance Inc.

1,000,000-

1,000,000-

1.642%

Unsecured/
Unguaranteed/
NonSubordinated79Beginning
Balance
Category

Increase

EndingBalance

Decrease

Lender(Thousands of yen)
The Iyo Bank,
Ltd.

-

1,000,000-

1.676%

Apr. 11, 2012-

1,000,000-

1,000,000

2.035%

Jun. 4, 2013

1,000,000-

1,000,000-

2.156%

Jun. 27, 2012

900,000--

900,000

2.076%

Jul. 3, 2012-

3,000,000-

3,000,000

1.376%

Feb. 4, 2013-

3,000,000-

3,000,000

1.376%

Feb. 4, 2013

ORIX Bank
Corporation-

1,000,000-

1,000,000

1.376%

Feb. 4, 2013

Sumitomo
Mitsui Banking
Corporation-

3,000,000-

3,000,000

1.190%

Jun. 27, 2013

Total

¥17,616,000¥12,351,000¥11,424,000¥18,543,000

Taiyo Life
Insurance
Company¥1,000,000¥-¥-¥ 1,000,000

1.858%

Dec. 27, 2013

1,000,000-

100,000-

2.035%

Jun. 4, 2013

1,000,000--

1,000,000

1.275%

Sep. 24, 2015

Mitsubishi UFJ
Trust andBanking
Corporation
Current Aozora Bank,
Portion of Ltd.
Long- The Shinkumi
Term Federation
Loans Bank
PayableMizuho Trust& Banking Co.,Ltd.

Daido Life
Insurance
Company
Sumitomo Life
Insurance
Company
Zenkyoren(National
MutualInsurance
Federation ofAgricultural
Cooperatives)
Development
Bank of JapanInc.
MizuhoCorporate
Bank, Ltd.

Bank of TokyoMitsubishi UFJ,Ltd.

1,000,000--

1,000,000

1.858%

Dec. 27, 2013

1,000,000--

1,000,000

1.666%

Feb. 5, 2015

2,000,000--

2,000,000

1.858%

2,000,000--

2,000,000

2.257%

2,000,000--

2,000,000

1.725%

Repayment
MethodUse

Remarks

Principal
Unsecured/
lump sum
Unguaranteed/
repayment (Note 3)
Nonon
Subordinatedmaturity

Principal
Dec. 27, 2013 lump sum
Jun. 4, 2015 repayment
on maturity

Mar. 26, 2015

820,000-

820,000-

1.740%(Note 4)(Note 4)3,300,000-

100,000

3,200,000

3.190%(Note 5)(Note 5)5,300,000-

100,000

5,200,000

2.449%(Note 6)(Note 6)3,000,000--

3,000,000

1.279%

Nov. 27, 2013

5,000,000--

5,000,000

1.414%-

7,000,000-

7,000,000

1.093%

4,419,000-

83,0004,336,000

2.390%

3,000,000--

3,000,000

1.279%

5,000,000--

5,000,000

1.198%

Principal
Feb. 4, 2016 lump sum
Unsecured/
repayment
Mar. 30, 2017 on maturity (Note 3) Unguaranteed/
Non(Note 7)(Note 7)
SubordinatedNov. 27, 2013 Principal
lump sumMar. 25, 2016 repayment
on maturity

Sumitomo
Mitsui Banking
Corporation

2,650,000-

50,0002,600,000

2.440%(Note 8)3,000,000-

3,000,000-

1.190%

Jun. 27, 2013-

6,400,000-

6,400,000

1.093%

Mar. 30, 2017

AmericanFamily Life
Assurance
Company ofColumbus(Note 11)5,000,000-

3,500,000

1,500,000

3.440%

Sep. 6, 2019

Mizuho Trust& Banking Co.,
Ltd.

3,000,000-

3,000,000-

1.376%-

4,000,000-

4,000,000

1.093%

Principal
lump sum
repayment
Mar. 30, 2017 on maturity

ORIX Bank
Corporation(Note 11)1,000,000-

1,000,000-

1.376%

Feb. 4, 2013

2,000,000--

2,000,000

1.281%

Nov. 27, 2013

3,000,000-

3,000,000-

1.376%

Feb. 4, 2013

The Shinkumi
Federation
Bank

80

Repayment
Date

1,000,000

Taiyo Life
Insurance
Company

LongTerm
Loans
PayableAverage
Interest
Rate(Note 1)
(Note 2)Feb. 4, 2013

(Note 8)Beginning
Balance
Category

Increase

EndingBalance

Decrease

Lender(Thousands of yen)Aozora Bank,Ltd.
The Bank ofFukuoka, Ltd.

Average
Interest
Rate(Note 1)
(Note 2)

Repayment
Date

1,000,000--

1,000,000

1.322%

Sep. 30, 2013

1,000,000--

1,000,000

1.070%

Sep. 24, 2013

2,000,000--

2,000,000

1.170%

Jul. 7, 2016-

2,000,000-

2,000,000

0.902%

Oct. 9, 2015

Repayment
MethodShinsei Bank,
Ltd.

2,000,000--

2,000,000

1.070%

Sep. 24, 2013-

5,000,000-

5,000,000

1.397%

Apr. 5, 2019

The Chugoku
Bank, Ltd.

1,000,000--

1,000,000

1.070%-

2,000,000-

2,000,000

0.902%

Principal
lump sum
Sep. 24, 2013 repayment
on maturity
Oct. 9, 2015

The Hachijuni
Bank, Ltd.

1,000,000--

1,000,000

1.070%

Sep. 24, 2013-

1,000,000-

1,000,000

0.902%

Oct. 9, 2015

The NishiNippon City
Bank, Ltd.

3,000,000--

3,000,000

1.149%

May 27, 2016

Meiji Yasuda
Life Insurance
Company

4,000,000-

198,000

3,802,000

1.800%(Note 9)Mitsubishi UFJ
Trust andBanking
Corporation

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-

2,000,000-

2,000,000

1.093%

Mar. 30, 2017-

1,000,000-

1,000,000

0.786%

Sep. 30, 2015

The Bank of
Yokohama,
Ltd. (Note 10)-

1,000,000-

1,000,000

0.786%

Sep. 30 2015

The Minato
Bank, Ltd.
(Note 10)-800,000-

800,000

0.786%

Principal
lump sum
repayment
Sep. 30 2015 on maturity

The Yamaguchi
Bank, Ltd.
(Note 10)-500,000-

500,000

0.786%

Sep. 30 2015

The Chiba
Kogyo Bank,
Ltd. (Note 10)-100,000-

100,000

0.786%

Sep. 30 2015

LongTerm
Loans Resona Bank,
Payable Limited
The Tokyo
Tomin Bank,
Limited (Note10)

Sompo Japan
Insurance Inc.
The Iyo Bank,
Ltd.
Total

-

2,000,000-

2,000,000

0.981%

Oct. 11, 2016-

2,000,000-

2,000,000

0.874%

Dec. 25, 2015-

1,000,000-

1,000,000

0.902%

Oct. 9, 2015

¥81,489,000¥38,800,000¥15,851,000¥104,438,000

Use

Remarks(Note 3)

Unsecured/
Unguaranteed/
NonSubordinated(Note 9)(Note 1)

The average interest rates are weighted-average figures during the period and are rounded to the third decimal point.

(Note 2)

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 3)Funds are mainly used for purchasing real estate or real estate beneficiary interests in trust (including accompanying expenses), repaying loans payable

Furthermore, fees related to loan arrangement paid to the above lenders are not included.
Note 11.
and redemption of investment corporation bonds.
(Note 4)The loans payable are subject to repayment of 25 million yen on June 27, 2009 and hereafter every 6 months. In addition, repayment of 820 million yen
will be made on maturity date June 27, 2013.

(Note 5)The loans payable are subject to repayment of 100 million yen on December 27, 2009 and hereafter every 6 months. In addition, repayment of(Note 6)The loans payable are subject to repayment of 100 million yen on December 25, 2009 and hereafter every 6 months. In addition, repayment of(Note 7)The loans payable are subject to repayment of 83 million yen on December 27, 2009 and hereafter every 6 months. In addition, repayment of(Note 8)The loans payable are subject to repayment of 50 million yen on December 25, 2009 and hereafter every 6 months. In addition, repayment of(Note 9)Concerning the 4,000 million yen in long-term loans payable to Meiji Yasuda Life Insurance Company on June 21, 2011, JPR agreed with the lender on

2,100 million yen will be made on maturity date June 27, 2019.
5,100 million yen will be made on maturity date June 27, 2014.
4,253 million yen will be made on maturity date June 27, 2014.
2,550 million yen will be made on maturity date June 27, 2014.
February 10, 2012 to change the repayment method from lump sum repayment on maturity date, June 21, 2018 to repayment of 66 million yen on the 27th
day of every six month, starting on June 27, 2012 and repayment of 3,208 million yen on June 21, 2018.
(Note 10) The loans are with floating interest rates.

81

(Note 11) On March 30, 2012, JPR repaid 2,000 million yen in short-term loans payable to Resona Bank, Limited borrowed on March 12, 2012 prior to therepayment date. On March 30, 2012, JPR repaid 4,000 million yen in short-term loans payable to Mizuho Trust & Banking Co., Ltd. borrowed on March
12, 2012 prior to the repayment date. Of the 3, 600 million yen in short-term loans payable to Sumitomo Mitsui Banking Corporation borrowed on March
12, 2012, JPR repaid 3,000 million yen on March 30, 2012 prior to the repayment date. On March 30, JPR repaid 3,400 million yen in short-term loans
payable to Sumitomo Mitsui Banking Corporation borrowed on March 12, 2012 prior to the repayment date. On April 5, 2012, JPR repaid 5,000 million
yen in short-term loans payable to Shinsei Bank, Ltd. borrowed on March 12, 2012 prior to the repayment date. Of the 5,000 million yen in long-termloans payable to American Family Life Assurance Company of Columbus borrowed on September 7, 2009, JPR repaid 3,500 million yen on June 27,
2012 prior to the repayment date.

Distribution Information(Yen)
20th Fiscal Period(July 1, 2011 - December 31, 2011)

21st Fiscal Period(January 1, 2012 - June 30, 2012)

1. Unappropriated retained earnings
2. Distributions(distribution per unit)¥4,226,806,051
4,201,340,000(5,876)¥4,622,149,494
4,597,450,000(6,430)3. Retained earnings brought forward¥25,466,051¥24,699,494

In accordance with the distribution policy stipulated in Article 30-2 of the Articles of Incorporation, JPR will be able to
distribute only to the extent of the profits and needs to distribute in excess of 90% of JPR’s distributable income as stipulated in
Article 67-15 of the Special Taxation Measures Law. Based on this policy, JPR decided on a total distribution of 4,201,340,000
yen and 4,597,450,000 yen for the 20th fiscal period and the 21st fiscal period. This is the maximum value arrived at when thenumber of units outstanding is multiplied by an integer, within the limit of retained earnings for the respective fiscal period andwithin the limit of not placing a burden of additional income taxes on our unitholders. Furthermore, JPR does not make cash
distributions in excess of the profit as stipulated in Article 30-4 of the Articles of Incorporation.

82

Report of Independent Auditors

83

Policies with Respect to Certain Activities
Investment Policies
We set forth in our articles of incorporation that we shall invest in investment assets with the aim of securing stable revenues
over the medium to long term. The Asset Manager appointed by us establishes asset management guidelines as its internal rules
and determines the management policies that apply to our investment, in accordance with our articles of incorporation and theasset management agreement between us and the Asset Manager and in consideration of the basic policies provided in our
articles of incorporation. The Asset Manager takes due consideration of various factors including the current status and trends inreal estate, capital and financial markets, as well as general economic conditions, market trends of real estate-related products
and our financial condition, when establishing the asset management guidelines. Furthermore, in order to ensure that the asset
management guidelines remain relevant and in tune with changes in market and operating conditions, the asset management
guidelines are amended promptly and actively in consideration of our articles of association and the asset managementagreement.
Basic Policies
We seek to achieve our investment objectives within the framework of basic policies provided by our articles of incorporation.
Our key basic policies are as follows:• We invest in office and retail properties located in the greater Tokyo area and other cities throughout Japan, as well as theland on which such properties are located and asset-backed securities that have such properties as their primary
investments. Our current investment strategy focuses primarily on office properties in the greater Tokyo area.
• We will conduct an investigation and a comprehensive review of all relevant information regarding any prospective
acquisition target, such as anticipated future revenues from the property and related risks, potential of the area in which theproperty is located, building and facilities maintenance and management, deterioration and obsolescence, earthquake
resistance, contracts with current tenants, environmental and topographical features, and related rights attached to suchproperty.
• We will maintain the percentage of the value of our designated real estate assets relative to the value of our total
designated assets at 75% or more at any time. Designated real estate refers to real estate, real estate leasing rights or
surface rights, beneficiary interests in trusts which hold real estate, land leasing rights and surface rights.
• We will maintain the percentage of the value of our real estate, etc. (as defined in Article 22-19 of the Ordinance for
Enforcement of the Act on Special Measures Concerning Taxation Ordinance of the Ministry of Finance No. 15 of 1957,
as amended) relative to the total value of our assets at 70% or more at any time.
• We will maintain the percentage of real property and asset backed securities investing primarily in real estate we own forthe purpose of disposition within one year to be 50% or less of our total assets.
Other Policies
We and the Asset Manager have developed additional policies with respect to our activities. These policies, to the extent thatthey are not addressed in our articles of incorporation, may be amended or revised from time to time without a vote of ourunitholders. For example, in 2009, we revised our investment policy to shift our focus to office properties in the greater Tokyo
area so that properties in the greater Tokyo area would generally constitute between 80% and 90% of the aggregate investment
amount of our portfolio, and office properties would generally constitute between 70% and 90% of the aggregate investment
amount of our portfolio. These policies are not binding and are intended to guide the implementation of our investment
objectives and management of our operations. The Asset Manager has broad discretion to develop our business strategies and to
manage our operations. At any given time, our business operations or the characteristics of our property portfolio may not be
fully consistent with these policies. Various strategies with respect to the achievement of our investment objectives are describedabove under “Our Business,” and certain other policies with respect to the operation of our business are described elsewhere inthis Business Report and below.

84

Portfolio Composition Policies
Our portfolio composition policies with respect to our investment activities include:
Property TypeThe allocation ratio between office properties and retail properties will be approximately 70% to 90% office properties and 10%
to 30% retail properties of the portfolio, based on investment amount. We will consider economic conditions and real estatemarket trends from time to time to revise or determine the appropriate ratio of property type.
Geographic Location
For the allocation ratio between the greater Tokyo area and other areas in Japan, the greater Tokyo area will be approximately
80% to 90% and other areas in Japan will be approximately 10% to 20% of the portfolio, based on investment amount. We willconsider the economic condition of each region as well as market trends from time to time to revise or determine the appropriate
ratio of geographic location.
Tenants
We have set the percentage ratio of rent revenue generated from any individual tenant (or in the case a tenant occupying several
properties, the aggregate rent revenue) to be, as a general rule, less than 10% of the total rent revenue. The percentage ratio may
exceed the maximum upon consideration of the possibility of change in tenants or the credit worthiness of the tenant as a whole.
Asset-Backed Securities
The total acquisition value of asset-backed securities is, in principle, limited to less than 10% of our net assets. To make any
such investment, we must have the opportunity to acquire the real estate underlying the asset-backed securities at the end of theinvestment period.

85Property Specifications
The following property specifications are generally used in the choice of a property:
FeatureSpecifications

Geographic Location(i)

Three big urban areas: Central business area of Tokyo metropolis, Yokohama, Kawasaki, Chiba andSaitama; Nagoya; and Osaka, Kyoto and Kobe.
(ii) Government-designated cities other than those in the three big urban areas: Central business area ofgovernment-designated cities such as Sapporo, Sendai, Hiroshima, Fukuoka and Kita-Kyushu.
(iii) Other major cities: Urban areas such as prefectural capitals with a population, in principle, of 300,000 or
more.
Further, in determining whether to invest in a given retail property, we conduct wide-ranging analyses of the area,
including the population size, demographic characteristics, number of households and average household income
in order to estimate the potential purchasing power of the local population and the potential for business growth in
the area. We also analyze competition as between businesses in the area, opportunities for new businesses and thepotential for development in the future. We then decide whether potential tenants and their businesses would besuited to that area.

Size

Office Properties: minimum total floor space of approximately 3,300 m² and minimum floor space ofapproximately 330 m² per floor above the second floor.
Retail Properties: size dependent on the growth potential of the area in which the property is located, taking into
account regional characteristics of the area including the size and potential for growth of the business area.

Facilities and Equipment

Office Properties: specifications evaluated on a case-by-case basis, in consideration of the characteristics of thelocal area, potential for post-acquisition property modifications etc., and building characteristics, including theshape and divisibility of floors, ceiling height, floor fittings, electricity supply and air-conditioning systems.
Retail Properties: specifications evaluated on a case-by-case basis, in consideration of standard specifications forbuildings of the same type, characteristics of the local area, versatility and potential for conversion to otherbuilding use, visitors’ access and other factors.

Earthquake Resistance(Age of the Property)

Newly acquired properties must meet recent earthquake resistance specifications, as specified by the BuildingStandards Act of Japan, or for which earthquake resistance reinforcement work has been completed (or can becompleted after acquisition).

Tenants

Office Properties: in principle, no single tenant can occupy more than 50% of a given property (parent companies
and their subsidiaries are considered as a single tenant for this purpose). Where a tenant does occupy more than
50% of a given property, we may purchase the property, taking into account the tenant’s creditworthiness,
appropriateness and substitutability.
Retail Properties: there is no limitation on occupancy by a single tenant. In selecting tenants, a number of factors,
including creditworthiness, profitability of individual shops and substitutability are comprehensively considered.
Rigorous investigation is conducted with respect to each property, including an analysis of the relevant businessarea and competition with other businesses, in order to select properties which are able to attract the most tenants.
Tenants are monitored continuously.

RightsCo-ownership:• In principle, seek a co-ownership of more than 50% in order to ensure flexibility in property management(leasing, improvement, etc.) but may acquire properties below this ratio on a case by case basis inconsideration of the nature and creditworthiness of other owners and characteristics of the property.
• In order to ensure sufficient flexibility in the disposal of the property, confirm whether there are special
contracts or agreements which set out preferential purchasing rights or options among owners or the detailsof any restrictions on transfer or assignment.
• Make efforts to ensure the stability of revenues by fully confirming the nature and creditworthiness of otherowners and, where possible, will provide for appropriate procedures (including, but not limited, to executing
an agreement which prohibits division of joint equity and the registration of rights or an agreement withrespect to the mutual use of land).
Compartmentalized ownership:• In principle, reserve at least 75% of voting rights in meetings of compartmentalized owners in order toensure flexibility in improvement. This depends, however, on the types and credits of othercompartmentalized owners.
• In order to ensure sufficient flexibility in the disposal of the property, confirm whether there are special
contracts or agreements which set out preferential purchasing rights or options among owners and the detailsof any restrictions on transfer or assignment.
• Attempt to ensure the stability of revenues by confirming the operations of the management association(reserves, liability ratios, insurance, status etc.) and take such measures as required (including, but notlimited to, increasing our reserves or providing for insurance on the joint areas separately from the
management company).

86

Feature

Specifications
Leased land:• In principle, invest in land over which leasehold interests have been created, as specified in the former
Leasehold Law and the Land and Building Leasing Law.
• Carefully study the nature of the leaseholder and make its decision after fully investigating the impact, etc.
of provisions for rent revisions, charges for renewing the leasing contract, approval of rebuilding proposals
and approval of sales proposals and other factors which impact profitability.
Leasehold properties:• In principle, invest in leasehold properties as specified in the former Leasehold Law and the Land andBuilding Leasing Law.
• Carefully study the nature of the proprietary right holder of land and make its decision after fully
investigating the impact of provisions for rent revisions, charges for renewing the leasing contract, approvalof rebuilding proposals and approval of sales proposals and other factors which impact profitability.
Security interests and usufruct:• Confirm whether or not any mortgage or other security interest has been created on the property to beacquired and if such mortgage has been discharged at the time of the acquisition.
• Confirm whether or not any surface right, servitude or any other usufruct has been created on the property to
be acquired and the contents thereof (if any) and make its decision after fully investigating the impact ofsuch surface right, servitude or usufruct on profitability.

Real Estate Acquisition
Ownership TypeWe acquire real estate under direct ownership or on an entrusted basis, acquiring beneficiary interests to theproperty. Decision as to which form of ownership we take is determined after considering the requirements of theexisting owner, the cost of transferring rights, etc.

Investment Amounts
Minimum Investment Amount. In principle, the minimum investment amount per property (which is the purchase price,
exclusive of taxes, acquisition costs and other expenses) will be ¥1 billion or more, except in the following cases:• where we are acquiring a portion of a property in respect of which the appraised value for the entire building is ¥1 billion
or more;• where as a result of negotiation, the acquisition price of the property is less than ¥1 billion, but the appraised value of theproperty is ¥1 billion or more; and• where the property is ancillary to other properties we are acquiring in bulk.
Maximum Investment Amount. The maximum investment amount per property will be, in principle, one-third of the total
investment in real estate, asset-backed securities and other investment after the acquisition (measured as the total appraised value
as of the end of the previous fiscal period, the total acquisition price of properties and asset-backed securities (excluding
acquisition costs) for the current fiscal period and the investment amount (excluding acquisition costs) for the property inquestion).
Limit on Acquisition Price. The maximum acquisition price is, in general, the appraisal amount, except in the following
cases, provided that the acquisition of the property will not reduce the net operating income yield of the entire portfolio for the
fiscal period of such acquisition as compared to prior to the acquisition:• properties from which we anticipate a steady cash flow from a long-term fixed lease agreement and which can generate a
steady rate of dividends in the medium to long term; and• properties which we anticipate will increase the quality of the fund as a whole when considering the general characteristicsof the property, such as its size and location and can generate a steady rate of dividends in the medium to long term.
Other Investment Policies
We may, through the Asset Manager, make investments other than as previously described. We are permitted to makecertain investments other than real estate-related investments within the restrictions imposed by the Tokyo Stock Exchange’s JREIT listing rules and the Investment Trusts Association’s J-REIT rules and our articles of incorporation. For example, we are
permitted to invest in securities issued in connection with real estate securitizations under Japanese law.
Our articles of incorporation prohibit us from investing in foreign real estate (i.e., real estate not located in Japan), assets or
securities backed by foreign real estate and assets denominated in a currency other than the Japanese yen.

87

Financing Policies
We have the following policies in relation to our finances.
Cash Management
Leasehold and Security Deposit
In the case of real estate trusts, leasehold and security deposits from our tenants are, in general, placed in trust accounts,
however these funds can be reduced on the condition that historical data are accumulated and commitment lines are made. In thecase of real estate, leasing rights and surface rights, leasehold and security deposits from our tenants are placed in ordinary or
fixed deposit bank accounts, however these funds can be reduced with the aim to safely secure and efficiently manage the funds,
on the condition that historical data are accumulated and commitment lines are made.
Cash and Cash Equivalents in Trust AccountIn the case of cash and cash equivalents in trust accounts for real estate funds, such cash and cash equivalents must be placedin either ordinary or fixed deposit accounts at a bank with a short-term rating of P-2 or above from Moody’s.
Cash and Cash Equivalents of Our Company
Our cash and cash equivalents are to be treated in the same way as real estate trust funds, provided however, that ordinaryaccounts opened at the time of borrowing from financial institutions or at the time of dividend payment are not included. In
general, residual funds are to be applied to the following expenses in that order and the remainder shall be managed in the same
way as above: re-investment (expenses related to acquisition of properties or capital expenses), distribution to investors (except
in the case that the dividend amount exceeds the amount of profit) and the repayment of loans payable (except in cases where thepayments are due, then repayment must be made with first priority).
Any derivative transactions should only be conducted to hedge against interest rate and other risks.
Issuance of New Investment Units
We may from time to time issue new investment units with the aim for stable long-term growth of our assets by taking into
account market conditions and dilution of the units (decrease of holding ratio or decrease in total assets or dividends per unit due
to the issuance of new units).
Debt and Issuance of Investment Bonds
In principle, we aim to strategically grow our portfolio and maintain a stable distribution of dividends by effectively
combining long-term stable fund procurement and mobile short-term procurement. In addition we will calculate LTV (loan tovalue), which shows our asset to debt ratio, as follows:
Our maximum fiscal period-end asset based-LTV, which is calculated by dividing the total interest-bearing debt by the valueof the total assets as of the end of the fiscal period, as adjusted for the differences between the appraisals or other valuations ofcertain properties in our portfolio and the book values of such properties, is 55%. The actual percentage may exceed the
maximum fiscal period-end asset-based LTV under limited circumstances due to acquisitions and fluctuation in appraisal values.
In addition, we have set our target range of the capitalization-based LTV, which is calculated by dividing the total interestbearing debt by the sum of interest-bearing debt and unitholders’ capital, as approximately 40% to 50%.

Tax Policies
Compliance with Certain Japanese Tax Law Matters
We intend to manage our investments in such a manner as to qualify for lower property registration and acquisition taxes andfor deductibility of distributions to our unitholders under Japanese tax laws applicable to J-REITs. Also, we intend to comply
with applicable laws and regulations in order to take advantage of lower withholding tax on distributions and capital gains that
may be available to certain overseas unitholders.

88Investor Information
Address of Japan Prime Realty
Investment Corporation (JPR)

4-16 Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan

Date of Establishment

September 14, 2001

Listing

Tokyo Stock Exchange (Securities Code: 8955)

Fiscal Period Ends

June 30 and December 31 of each year

General Meeting of Unitholders

More than once every two years

Cash Distribution Payment
Eligibility

Unitholders of record as of June 30 and December 31 of each year

Transfer Agent

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

Location of Records

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

Mailing Address

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

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

Web Site

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

Contact (Tokyo Realty
Investment Management, Inc.)

Tel: +81-3-3231-1051
Fax: +81-3-3274-7775

Annual Schedule (Provisional)
October

Release of Business Report

December

September

Fiscal period ends

Cash distributions

Announcement of the fiscal period results

Appropriate disclosure
on web site

June

March

AugustFiscal period ends

April

February

Announcement of the fiscal period results

Cash distributions

Release of Business Report

This document contains a translation of selected information described in the Financial Statements and Performance Information Report prepared pursuant to the Act on Investment Trusts andInvestment Corporations of Japan and the Financial Instruments and Exchange Act of Japan, for the period from January 1, 2012 to June 30, 2012 of Japan Prime Realty Investment Corporation(JPR). This English language document was prepared solely for the convenience of and reference by non-Japanese investors and is not intended to constitute a disclosure document. The
Japanese language Financial Statements and Performance Information Report for the aforementioned period should be referred to as the originals of this document. English translations forlegal, accounting, tax and business concepts used herein may not convey precisely identical concepts of the equivalent Japanese terms. With respect to any and all terms herein, including
without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents and English documents, the original
Japanese documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc., nor any of their respective directors, officers, employees, partners,
unitholders, agents or affiliates will be responsible or liable for the completeness, appropriateness or accuracy of English translations or the selection of portion(s) of any document(s) translated
into English. No person has been authorized to give any information or make any representations other than contained in this document in relation to the matters set out in this document, andif given or made, such information or representation must not be relied upon as having been authorized by JPR, Tokyo Realty Investment Management, Inc., or any of their respective directors,
officers, employees, partners, unitholders, agents or affiliates. The financial statements of JPR have been prepared in accordance with generally accepted accounting principles in Japan (JapaneseGAAP), which may materially differ in certain respects from generally accepted accounting principles in other jurisdictions. Many provisions of this document contain information that constituteforward-looking statements. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and actual results may differ materially from thosein the forward-looking statements as a result of various factors.

89http://www.jpr-reit.co.jp/jpr_e/