JAPAN PRIME REALTY INVESTMENT CORPORATION
Presentation Material
for the 24th Fiscal Period Ended December 2013
February 19, 2014
URL : http://www.jpr-reit.co.jp(Asset Manager)
Tokyo Realty Investment Management, Inc.

Table of Contents
I.

Operating Results and Forecasts of Financial Results

III.

Characteristics of JPR

4.

Financial Highlights for the 24th Fiscal Period Ended December 201327.

Characteristics of JPR

5.

Changes in Financial Results

28.

Establishment of Portfolio that Enhances Growth Potential and Profitability

6.

Statement of Income and Retained Earnings for the 24th Fiscal Period Ended December 201329.

Steady External Growth Achieved since Listing

7.

Comparison with Forecasts of Financial Results for the 24th Fiscal Period Ended December 201330.

Operation Management through Comprehensive Capabilities of Respective Special

8.

Balance Sheet for the 24th Fiscal Period Ended December 20139.

Forecasts of Financial Results for the 25th Fiscal Period Ending June 201410.

(Reference) Forecasts of Rent Revenue – Real Estate and Expenses Related to Rent Business forGroups within the Asset Manager

the 26th Fiscal Period Ending December 2014

II.

Management Status and Strategies

31.

Proactive Initiatives on Environmental Friendliness

32.

Sponsor Support

33.

Governance System Established with Focus on Independence

IV. Appendix

12.

Occupancy Rate Stayed at the 96% Level, Surpassing Beginning-of-Period Assumption

35.

Demand and Supply of Blue-Chip Properties in the Transaction Market Grew Tighter

13.

Rents for Office Properties Continued to Show Improving Trend

36.

Vacancy Rate of Office Properties Remained on a Downward Trend

14.

Outlook of Rent Revenue

37.

Fund Summary

15.

Promoted Leasing Strategies that Should Enable Future Upside Gains

38.

Track Records

16.

Properties Subject to Reinforced Leasing Activities

39.

NOI Yield by Property in 24th Fiscal Period

17.

Endeavors to Enhance Property Value: Renewal of Kawasaki Dice Building

40.

Contracting Status of Tenants by Property in 24th Fiscal Period

18.

Acquired Blue-Chip Office Property in the Central Tokyo Area: Science Plaza – Yonbancho Plaza

41.

Status of Tenant Diversification in the 24th Fiscal Period

19.

Acquired Blue-Chip Office Property in the Central Tokyo Area: Shibadaimon Center Building

42.

Appraisal Value by Property for the 24th Fiscal Period

20.

Reinforce Pipelines Centering on Sponsors’ Pipelines and Obtain Opportunities for Strategic

43.

Status of Unitholders in the 24th Fiscal Period

Investment

44.

Portfolio List (Central Tokyo)

21.

Appraisal

45.

Portfolio List (Greater Tokyo and Other Cities)

22.

Conservative Financial Operations Continued

46.

Portfolio Map

23.

Diversification of Lenders and Utilization of Investment Corporation Bonds

24.

Interest-Bearing Debt Costs Reduced and Shift to Long-Term, Fixed Interest Rate Debts Promoted

25.

Review of Distribution per Unit (DPU)

V.

Disclaimer Regarding Forward-Looking Statements(Note) The figures to the left of each item represents the relevant page number.

2

Operating Results and Forecasts of Financial Results

Operating Results and Forecasts of Financial Results

Financial Highlights for the 24th Fiscal Period Ended December 2013
 In the 24th fiscal period ended December 2013, the portfolio size exceeded JPY 400 billion and distribution per unit (DPU) cameto JPY6,006, surpassing the JPY5,800 announced at the beginning of the period
 Strategies and measures including external growth initiatives successfully generated results, establishing an earnings base for
future growthPrevious period

Current period(Jun. 30, 2013)(23rd period)(Dec. 31, 2013)(24th period)

Management Status for the 24th Fiscal Period

ChangeOperating revenue

JPY13,278mn

JPY13,591mn

JPY312mn

2.4%

NOI

JPY8,953mn

JPY8,925mn-JPY28mn-0.3%

Net income

JPY4,974mn

JPY4,954mn-JPY20mn-0.4%

6,031yen

6,006yen-25yenTotal number of units outstanding

825,000units

825,000units

Properties owned at end of period

60properties

Total acquisition priceAppraisal value

Internal GrowthMove-ins totaled approx. 10,000m2 (up approx. 2,600m2 overassumption)

Occupancy rate stood at 96.5% (down 0.4 %p period-on-period andup 0.4%p from forecast)
Minami Azabu Building was leased up (full occupancy)

-0.4%



Average unit rent remained almost flat, standing at JPY 14.1
thousand at the end of 24th period (down 0.4% period-on-period)- units－%

Implemented leasing with a focus on rent levels

62properties

2properties

3.3%

External Growth

JPY398,640mn

JPY404,720mn

JPY6,080mn

1.5%

JPY365,214mn

JPY376,995mn

JPY11,781mn

3.2%

NOI yield (before depreciation)

4.6%

4.4%

-0.2%p-

NOI yield (after depreciation)

3.6%

3.5%

-0.1%p-

Period-end occupancy rate

96.9%

96.5%

-0.4%p-Average unit rent per tsubo

14.1thousand yen

14.1thousand yen-0.1thousand yen-0.4%

Average interest rate of interestbearing debts

1.57%

1.53%

-0.04%p

-

48.1%

48.0%

-0.1%p-207,597yen

215,648yen

8,051yen

3.9%

Distribution per unit

LTV (based on gains or losses
from valuation)

NAV per unitAcquired two office properties in Central Tokyo for JPY 6 billion
Science Plaza - Yonbancho Plaza (Chiyoda Ward)
Shibadaimon Center Building (Minato Ward)
Utilized sponsor support from the Yasuda Real Estate Group

Conducted continuous information exchange with the main sponsor
and further reinforced pipelines other than those of the main sponsor

Financial Operations and Others(Note) Figures for total number of units outstanding, properties as owned at end of period, total acquisition price, appraisal value, period-end occupancy rate, average
unit rent per tsubo, LTV and NAV per unit are as of the end of each fiscal period.

Decreased the average interest-bearing debt costs to 1.53% for the
24th period (down 0.04%p period-on-period)
Borrowed JPY 23 billion in the 24th period, with average interest rateof 0.869%
Diversified financial institutions from which JPR borrowed funds to 30
banks
Unrealized gains or losses improved due to increased appraisal
valuesRatio of unrealized gains or losses was -3.6% at end of the 24th
period (up 1.8%p period-on-period)

4

Operating Results and Forecasts of Financial Results

Changes in Financial Results
 Distribution per unit (DPU) kept at the JPY 6,000 level for 4 consecutive fiscal periods since the 21st Period ended June 2012
 NAV per unit increased to JPY 215,648 due to improvement in unrealized gains or losses

Changes in Distribution per Unit

(JPY)

250,000

8,000
7,000
6,000

Changes in NAV per Unit

(JPY)

5,611

5,876

6,430

6,093

6,006

6,031

5,000

211,438214,353

19th Period(Jun. 2011)

207,597

215,648

208,158

206,592

20th Period

21st Period

22nd Period

23rd Period

24th Period(Dec. 2011)(Jun. 2012)(Dec. 2012)(Jun. 2013)(Dec. 2013)

200,000

150,000

4,000
100,000

3,000
2,000

50,0001,000
019th Period

20th Period

21st Period

22nd Period

23rd Period

24th Period(Jun. 2011)(Dec. 2011)(Jun. 2012)(Dec. 2012)(Jun. 2013)(Dec. 2013)0

19th Period

20th Period

21st Period

22nd Period

23rd Period

24th Period

Jun. 2011

Dec. 2011

Jun. 2012

Dec. 2012

Jun. 2013

Dec. 2013

Operating revenue

JPY11,529 mn

JPY11,772 mn

JPY12,345 mn

JPY12,963 mn

JPY13,278 mn

JPY13,591 mn

Net income

JPY4,010 mn

JPY4,200 mn

JPY4,596 mn

JPY5,025 mn

JPY4,974 mn

JPY4,954 mn

Total assets

JPY360,004 mn

JPY360,699 mn

JPY396,017 mn

JPY401,984 mn

JPY409,715 mn

JPY413,974 mn

Distribution per unit (DPU)

5,611 yen

5,876 yen

6,430 yen

6,093 yen

6,031 yen

6,006 yen

FFO per unit

8,372 yen

8,428 yen

8,883 yen

8,311 yen

8,313 yen

8,270 yen

Net assets per unit

245,387 yen

245,651 yen

246,204 yen

238,992 yen

238,929 yen

238,903 yen

NAV per unit

211,438 yen

214,353 yen

208,158 yen

206,592 yen

207,597 yen

215,648 yen

5Operating Results and Forecasts of Financial Results

Statement of Income and Retained Earnings for the 24th Fiscal Period Ended December 2013
(JPY mn)

23rd Period

24th Period

ChangeBreakdown of increase/decrease in income (JPY mn)
Increase Decrease(Jan. 1, 2013 - Jun. 30, 2013) (Jul. 1, 2013 - Dec. 31, 2013)

AmountRental revenue
Other rental revenue
Rental revenue - real estate (1)Operating revenue
Property and other taxes
Other expenses related businessOutsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fee
Management association accounts
OthersDepreciation
Expenses related rent business (2)Asset management fees
Other operating expenses
Operating expenses
Operating income
Profits ((1) - (2))
Net operating income (NOI)
Non-operating income
Interest expenses
Other non-operating expenses
Non-operating expenses
Ordinary income
Extraordinary income
Income before income taxes
Net income
Unappropriated retained earnings
Total number of units outstanding at end of period

Distributions per units (DPU)

12,509768
13,27813,278
1,884
2,440
505
768
26
244
213
563
119
1,883
6,208
468
216
6,893
6,385
7,070
8,953
60
1,304
164
1,469
4,975
－
4,975
4,974
4,998
825,000 units
6,031 yenAmount12,694897
13,591
13,591
1,879
2,786
516
969
27
330
217
556
169
1,869
6,534
473
215
7,223
6,368
7,056
8,925
16
1,325
159
1,485
4,899
54
4,954
4,954
4,976
825,000 units
6,006 yen

Conversion
to DPU

Amount

184
128
312
312
-5
346
11
201
0
85
3
-7
50
-14
326
4
-1
329
-16
-13
-28
-43
20
-5
15
-75
54
-20
-20
-21

External grow th (properties acquired in 24th and 23rd periods)

Increase in NOI of properties acquired in 24th period
Increase in NOI of properties acquiredin 23rd period (operating throughout 24th period)

128
26
125

+155 yen

Increase in depreciation related to the above properties

23

Internal growth (continuously owned properties)

145
179

Decrease in NOI(Revenues) Increase in rent revenue
Increase in incidental income (seasonal f actors, etc.)

12137

Increase in repairs and maintenance
Increase in others

Decrease in depreciation

3
58
43

Financial costs and other non-operating income and expenses
Decrease in settlement of management association accounts, etc.

(Expenses) Decrease in interest expenses (excluding new procurement)

1

Extraordinary income
Increase in subsidy income-71 yen
The item is recorded only in oddnumbered fiscal periods

22

Increase in interest expenses (new procurement)

Decrease in other non-operating expenses

Decrease in NOI was mainly due toincrease in utilities expenses, repairs
and maintenance, brokerage fee andadvertisement expenses, etc.

37

Increase in asset management f ees
and administration serv ice f ees(Income)-176 yen
Rent revenue from existing
properties remained almost flat

20
185
87
36

Decrease in cancellation penalty, etc.
(Expenses) Increase in utilities expenses (seasonal f actors, etc.)

Properties acquired in 24th period
contributed for approx. 1 month;properties acquired in 23rd period
contributed for approx. 3 months
longer than in 23rd period due to fullperiod operations

5
54
54

+66 yenRecorded subsidies granted toproperties under the EnergyEfficient Renovation Promotion
Program (2 properties)- units-25 yen6Operating Results and Forecasts of Financial Results

Comparison with Forecasts of Financial Results for the 24th Fiscal Period Ended December 2013
(JPY mn)

24th Period (Forcasts) 24th Period (Results)

Changes

Breakdown of increase/decrease in income (JPY mn)
Increase Decrease(Jul. 1, 2013 - Dec. 31, 2013) (Jul. 1, 2013 - Dec. 31, 2013)

AmountRental revenue
Other rental revenue
Rental revenue - real estate (1)Operating revenue
Property and other taxes
Other expenses related businessOutsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fee
Management association accounts
OthersDepreciation
Expenses related rent business (2)Asset management fees
Other operating expenses
Operating expenses
Operating income
Profits ((1) - (2))
Net operating income (NOI)
Non-operating income
Interest expenses
Other non-operating expenses
Non-operating expenses
Ordinary income
Extraordinary income
Income before income taxes
Net income
Unappropriated retained earnings
Total number of units outstanding at end of period

Distributions per units (DPU)

12,642827
13,47013,470
1,885
2,756
519
906
27
350
221
556
174
1,872
6,514
465
225
7,205
6,264
6,955
8,828
11
1,329
160
1,490
4,786
－
4,786
4,785
4,809
825,000 units
5,800 yenAmount12,694897
13,591
13,591
1,879
2,786
516
969
27
330
217
556
169
1,869
6,534
473
215
7,223
6,368
7,056
8,925
16
1,325
159
1,485
4,899
54
4,954
4,954
4,976
825,000 units
6,006 yen

Conversion
to DPU

Amount

51
69
121
121
-6
30
-3
63
0
-20
-4
0
-4
-3
20
7
-10
18
103
100
97
5
-3
-1
-5
113
54
168
168
167
- units
206 yen(Note 1) The forecast for the current (24th) fiscal period was made upon the announcement of financial results of the previous fiscal period.

External grow th (properties acquired in 24th and 23rd periods)

Increase in NOI of properties acquired in 24th period

18
26
4
3

Increase in NOI of properties acquiredin 23rd period (operating throughout 24th period)

Increase in depreciation related to the above properties

Internal growth (continuously owned properties)

Increase in NOI(Revenues) Increase in rent revenue
Increase in incidental income (seasonal f actors, etc.)

Increase in cancellation penalty, etc.

85
75
19
33
34

Decrease in others

Decrease in depreciation
Decrease in asset management f ees
and administration serv ice f ees

Financial costs and other non-operating income and expenses(Income)Increase in settlement of management association accounts, etc.

(Expenses) Decrease in interest expenses (excluding new procurement)

Extraordinary income
Increase in subsidy income

Caused mainly by decreasein contract renewal withdownward revision ofrents(+15)

22
24
7
2
10
5
7

Increase in NOI was mainly
due to increase incancellation penalty, etc. anddecrease in repairs andmaintenance and others+12 yen3

Increase in interest expenses (new procurement)

Decrease in other non-operating expenses+103 yen

58(Expenses) Increase in utilities expenses (seasonal f actors, etc.)

Decrease in repairs and maintenance+21 yen
Properties acquired in 24th
period contributed forapprox. 1 month

1
54
54

+66 yenRecorded subsidies granted
to properties under the
Energy-Efficient Renovation
Promotion Program(2 properties)

Assumptions for the 24th Fiscal Period Forecast
Assets owned: Total of 60 properties (owned as of the end of the 23rd fiscal period)Average occupancy rate: 96.7% (based on confirmed contract status only,reflecting newly concluded contracts and already notified cancellations, etc.)
Total units outstanding: 825,000 unitsLTV(based on unitholders’ capital ):49.3% (at end of 24th fiscal period)

7

Operating Results and Forecasts of Financial Results

Balance Sheet for the 24th Fiscal Period Ended December 2013
（JPY mn)

23rd Period

24th Period( As of Jun. 30, 2013)( As of Dec. 31, 2013)％

AmountCurrent assets％

Amount

22,895

5.6%

Cash and deposits

10,852

Cash and deposits in trust

11,568■ Cash and deposits status

Change(JPY mn)

End of 23rd Period End of 24th Period％

AmountCash and deposits

22,420

5.3%

-756

-3.3%

2.6%

9,781

2.4%

-1,071

-9.9%

2.8%

11,856

2.9%

287

2.5%

■Noncurrent assets(JPY mn)

474

0.1%

501

0.1%

26

5.6%

Property acquisition+6,153

Noncurrent assets

386,61494.4%

391,656

94.6%

5,042

1.3%

Capital expenditure+845

Tangible assets

381,290

93.1%

386,429

93.3%

5,138

1.3%

Depreciation-1,869Intangible assets

4,798

1.2%

4,798

1.2%

-0

-0.0%

Other

-87

524

0.1%

429

0.1%

-95

-18.2%

Total+5,042

Lease and guarantee deposits

49

0.0%

49

0.0%

－

－

Others

475

0.1%

379

0.1%

-95

-20.1%

205

0.1%

178

0.0%

-27

-13.3%

Investments and other assets

Deferred assets
Investment corporation bond issuance costs

Total assets

Current liabilities

Change

0.1%

178

0.0%

-27

-13.3%

Short-term loans payable

2,000

－

+2,000413,974

100.0%

4,258

1.0%

Long-term loans payable

21,00018,399+2,601

Investment corporation bonds

－

－

－

23,00018,399+4,60135,4608.6%-5,442-13.3%

－

2,000

0.5%

2,000

－

Current portion of long-term loans payable

30,468

7.4%

12,2353.0%-18,233-59.8%

Current portion of investment corporation bonds

5,000

1.2%

16,0003.9%

11,000220.0%

Other current liabilities

5,434

1.3%

5,225

1.3%

-209

-3.9%

171,69641.9%

181,419

43.8%

9,723

5.7%

Long-term loans payable

100,19024.5%

121,024

29.2%

20,83420.8%

Investment corporation bonds

51,50012.6%

40,5009.8%-11,000-21.4%

20,006

4.9%

19,895

4.8%

-110

-0.6%

Total liabilities

212,59951.9%

216,879

52.4%

4,280

2.0%

Unitholders' capital

192,04446.9%

192,044

46.4%

－

－

5,072

1.2%

5,050

1.2%

-21

-0.4%

Total net assets

197,11648.1%

197,095

47.6%

-21

-0.0%

Total liabilities and net assets

409,715100.0%

413,974

100.0%

4,258

1.0%

Surplus

Repayment/ redemption

100.0%

10.0%

Tenant leasehold and security deposits(JPY mn)

New procurement205－

Noncurrent liabilities■ Interest-bearing debt status

409,715

40,902

Short-term loans payable-783

Tenant leasehold and security deposits (except tenant
10,506
10,395-110leasehold and security deposits) (Note)(Note) Amount equivalent to laesehold deposits released from tenants (9,500 million yen at end of 23rd period and 9,500
million yen at and of 24th period) are excluded.

22,139Other current assets

21,637

ChangeTotal

8Operating Results and Forecasts of Financial Results

Forecasts of Financial Results for the 25th Fiscal Period Ending June 2014
(JPY mn)

24th Period

25th Period (Forcasts)

Changes

Breakdown of increase/decrease in income (JPY mn)
Increase Decrease(Jul. 1, 2013 - Dec. 31, 2013) (Jul. 1, 2013 - Dec. 31, 2013)

AmountRental revenue
Other rental revenue
Rental revenue - real estate (1)Operating revenue
Property and other taxes
Other expenses related businessOutsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fee
Management association accounts
OthersDepreciation
Expenses related rent business (2)Asset management fees
Other operating expenses
Operating expenses
Operating income
Profits ((1) - (2))
Net operating income (NOI)
Non-operating income
Interest expenses
Other non-operating expenses
Non-operating expenses
Ordinary income
Extraordinary income
Income before income taxes
Net income
Unappropriated retained earnings
Total number of units outstanding at end of period

Distributions per units (DPU)

12,694897
13,591
13,591
1,879
2,786
516
969
27
330
217
556
169
1,869
6,534
473
215
7,223
6,368
7,056
8,925
16
1,325
159
1,485
4,899
54
4,954
4,954
4,976
825,000 units
6,006 yenAmount12,879751
13,63013,630
1,992
2,732
530
857
27
398
224
562
131
1,837
6,562
474
244
7,281
6,348
7,067
8,904
49
1,263
141
1,405
4,992
－
4,992
4,991
5,013
825,000 units
6,050 yen

Conversion
to DPU

Amount

184
-146
38
38
113
-53
14
-111
0
68
6
6
-38
-31
27
1
29
58
-20
11
-20
32
-62
-17
-79
92
-54
37
37
36
- units
44 yenExternal growth (properties acquired in 24th and 23rd periods)
Increase in NOI of properties acquired in 23rd period(operating throughout 24th period)

122
142

+148 yen

Increase in depreciation related to the above properties

19

Internal growth (continuously owned properties)
Decrease in NOI

142
163
22
123
33
94

(Revenues) Decrease in rent revenue

Decrease in incidental (seasonal factors, etc.)
Decrease in cancellation penalty, etc.
(Expenses) Increase in property and other taxes

Decrease in utilities expenses (seasonal factors, etc.)

12960

Increase repairs and maintenanceDecrease in others
Decrease in depreciation(Income)Increase in settlement of management association accounts, etc.

(Expenses) Decrease in interest expenses

Decrease in other non-operating expenses-172 yen
Mainly due to excess in tenant
move-outs (-21)

Decrease in NOI mainly due toincrease in property and othertaxes and repairs andmaintenance

40
51
31

Increase in asset management fees and administration service fees

Financial costs and other non-operating income and expenses

Properties acquired in 23rd
period to contribute for approx. 5months by operating throughout
the 25th period

112
32
62
17

Extraordinary income
Decrease in subsidy income+136 yen
To be recorded only in oddnumbered fiscal periods

54
54-66 yenAssumptions for the 25th Fiscal Period Forecast
Assets owned: Total of 62 properties (owned as of the end of the 24th fiscal period)Average occupancy rate: 96.6% (based on confirmed contract status only,reflecting newly concluded contracts and already notified cancellations, etc.
Total units outstanding: 825,000 unitsLTV(based on unitholders’ capital): 49.9% (at end of 25th fiscal period)

9

Operating Results and Forecasts of Financial Results(Reference) Forecasts of Rent Revenue – Real Estate and Expenses Related toRent Business for the 26th Fiscal Period Ending December 2014
(JPY mn)

25th Period (Forcasts) 26th Period (Forcasts)

Breakdown of increase/decrease in income (JPY mn)
Increase Decrease(Jan. 1, 2014 - Jun. 30, 2014) (Jul. 1, 2014 - Dec. 31, 2014)

AmountRental revenue

AmountAmount61

12,87912,951

72

751

877

126

Increase in NOI

75

Rental revenue - real estate (1)13,63013,828

198(Revenues) Increase in rent revenue

72

Property and other taxes

1,992

1,986

-5

Other expenses related business

2,732

2,861

128

Other rental revenue

Conversion
to DPU

ChangesInternal growth (continuously owned properties)

Increase in incidental income(seasonal factors, etc.)+74 yenIncrease in rent revenue due
to excess in tenant move-ins(+51), etc.

1369Decrease in cancellation penalty, etc.
(Expenses) Increase in utilities expenses(seasonal factors, etc.)

162

Outsourcing expenses

530

528

-2

Utilities expenses

857

1,020

162

Casualty insurance

27

27

0

Decrease in others

Repairs and maintenance

398

362

-36

Increase in depreciation

Property management fee

224

226

2

Management association accounts

562

557

-5

Others

131

138

7

Depreciation

1,837

1,851

14

Expenses related rent business (2)

6,562

6,698

136

Profits ((1) - (2))

7,067

7,129

61

Net operating income (NOI)

8,904

8,980

75

Capital expenditure

873

1,313

439

Average occupancy rate: 96.8% (assuming some new contracts, etc. in addition to
the assumptions for the 25th fiscal period)

Net cash flow (NCF)

8,031

7,667

-363

Total units outstanding: 825,000 units

Decrease in repairs and maintenance

36

4
14

Assumptions for the 26th Fiscal Period Forecast
Assets owned: Total of 62 properties (owned as of the end of the 24th fiscal period)

10Management Status and Strategies

Management Status and Strategies (24th Fiscal Period ended December 2013; Occupancy Rate)

Occupancy Rate Stayed at the 96% Level, Surpassing Beginning-of-Period Assumption
 In the 24th fiscal period ended December 2013, despite the impact of large move-outs at some properties, progress was made inrefilling vacated spaces in a number of other properties
 Progress was made in leasing new tenants, surpassing beginning-of-period assumption, with period-end occupancy rate standing at
96.5% (+0.4% over beginning-of-period assumption)
Move-ins: +2,583㎡
Move-outs: -694㎡

Changes in Move- In and Move- Out Spaces(㎡)

Move - outs

20,000Move-ins－Move-outs

Move - ins(Compared with beginning-of-period assumptions)

15,89813,511

11,10410,0009,994

10,417
6,617-20,000-7,897-7,856-8,723-12,051-13,940100

19th Period

20th Period

21st Period

22nd Period

Entire portfolio
99.8

99.8

OfficeMove-ins －Move-outs

3,406

0

+3,406800-3,443-2,643711-1,885-1,173BYGS Shinjuku Bldg

672

-1,669-997

MS Shibaura Bldg.

980

0

+980

24th Period

Major Properties with Changes in
Occupancy Rate

(Compared with beginning-of-period assumption)

Retail properties
99.8

99.8

Property name
99.8

99.7

End of 23th

End of 24th

PeriodPeriod(%)

Change【Properties with an increase】
96.9
95.6
94.7

94.1
95.4

92

96.5

94.9

94

90

23rd Period

+0.4%

98
96

Move - outs

Move - ins

Reference: total leasable space was 467,207 m2 at end of 24th period

Changes in Occupancy Rates of Properties(%)-6,60824th Fiscal Period

Property nameMinami Azabu Building
Tokyo Tatemono
Kyobashi Building
Olinas Tower0-10,000

Major Properties with Changes in Move-In
and Move-Out Spaces
(㎡)

94.8

92.2
90.7

88

0
86
End of 19th Period

End of 21th Period
End of 20th Period

0.0

100.0

+100.0p

MS Shibaura Bldg.

93.2

100.0

+6.8p

Shinyokohama 2nd Center

85.1

91.4

+6.3p

JPR Ueno East Bldg.

94.3

100.0

+5.7p

JPR Dojima Bldg.

83.6

88.8

+5.2p

Tokyo Tatemono
Kyobashi Building
Crest Takebashi Bld.

100.0

24.1

-75.9p70.6

51.4-19.2pAcross Shinkawa Bld. Annex

100.0

84.0

-16.0pJPR Jingumae 432

100.0

86.6

-13.4pJPR Hakata-chuo Bldg.

100.0

87.3

-12.7p【Properties with a decrease】

93.1
91.5

Minami Azabu Building

End of 23th Period
End of 22th Period

End of 24th Period

12Management Status and Strategies (24th Fiscal Period ended December 2013; Rent Level)

Rents for Office Properties Continued to Show Improving Trend
 Move-out rate increased In the 24th fiscal period, impacted by move-outs from properties with rents in high levels
 Rent revenue and average unit rent for existing properties (on a same-store basis) largely remained flat

Changes in Move-ins, Move-outs and Revision of Monthly Rents
Move-ins

(%)

5

2.8

2.3

3
1
-1
-3
-5

Move-outs

Rent revision
3.5

3.3

(Indexed with end of 19th fiscal period set at 100)
105

-0.2

-0.3

100

2.0

1.6

-0.5

-0.7

-1.0

Changes in Average Unit Rent

100

100

98

99

-1.8

98

-2.3

-2.2

-4.1

-2.1

-2.0

19th
Period20th
Period21stPeriod22nd
Period23rd
Period

97

96
95

95

-4.7

94

96

24th
PeriodMove-ins

3.4

2.8

1.6

2.7

3.8

2.2

Move-outs

-2.0

-2.2

-3.4

-1.9

-1.6

-2.7

(Note) Rate of change in monthly rent = total changes in monthly rents due to change factors for each fiscal
period / total monthly rents at end of each preceding fiscal period (both including common charges)
The change factors are move-ins, move-outs and rent revisions. Rent revisions include stage rents, etc.
Rate of change in space = total changes in space due to change factors (move-ins and move-outs) for
each fiscal period / total leased space at end of each preceding fiscal period

90

93

93

93

(Reference) Changes in the rate of change in space through move-ins and move-outs (%)

99

98

Portfolio (all properties)

93

90

89

Portfolio (on a same-store basis)
Office85

Unit rent on a same-store
basis largely remaining flat

Retail800

Changes in Rent Revenue

19th Period

20th Period

21st Period

22nd Period

23rd Period

24th Period(JPY mn)

15,00010,0005,000

Acquisition properties

10,825

10,996
68

2,909

2,900

7,916

8,027

Retail (on a same-store basis)

Office (on a same-store basis)

12,16012,50912,694

945

1,815

2,095

2,277

2,872

2,819

2,847

2,850

11,626

7,808

7,525

7,567

7,567

Office unit rent on a samestore basis remaining flat0

19th Period

20th Period

21st Period

22nd Period

23rd Period

24th Period(Note) The graph shows the rent revenue (total fixed income including rents and common charges) for eachfiscal period. Properties on a same store basis represent those owned continuously from the 19th period
through the 24th period.

(Average unit rent (including common service fee) : thousand yen/tsubo)
19th
Period20th
Period21stPeriod22nd
Period23rd
Period24th
PeriodPortfolio (all properties)

15.0

14.9

14.5

14.3

14.1

14.1

Portfolio(on a same-store basis)

14.9

14.7

14.3

14.1

13.9

13.8

Office

18.5

18.2

17.7

17.1

16.6

16.4

Retail

9.9

9.9

9.7

9.7

9.8

9.8

(Note) The graph above shows the average unit rent at end of each fiscal period in a relative figure withthe end of the 19th period set at 100. Properties on a same store basis represent those owned
continuously from the 19th period through the 24th period.

13

Management Status and Strategies (Future Leasing Strategies)

Outlook of Rent Revenue
 Contract renewal with downward revision of rents shows a diminishing trend, and JPR plans to conduct leasing of spaces vacatedby tenant move-outs at a level that should largely maintain the average occupancy rate
 It is anticipated that increase in revenues through property acquisitions, higher occupancy rate and other factors will surpass
decrease in revenues through downward revision and tenant move-outs, resulting in higher earnings(JPY mn)

13,400Changes in Factors of Changes in Rent Revenue from Previous Fiscal Periods
Work to increase revenues from existing
properties by increasing move-ins of tenantswith confirmed contracts

Increased slightly for existing properties in
the 24th period

13,200

237

-540
-4

12,800

3

-186
15

5

Others

541

-299

Rent
revisions278
13,00012,951

12,879207

39

Others12,600-27

Rent
revisions

12,694Given contract renewal with downward revision of rents on adiminishing trend, work to increase earnings by reducing further
rent reductions and promoting upward revision of rents upon
contract renewal

171

Existing properties
23rd
Period24th Period

Existing properties
25th Period Forecast

Rent
revenue

Move-outs

Move-ins

Newly
acquiredproperties

Rent
revenue

OthersRent
revisionsMove-outs

Move-ins

Newly
acquiredproperties

Rent
revenue

Move-outs

Move-ins

Newly
acquiredproperties

12,4000

Rent
revenue

12,509

Existing properties
26th Period Forecast(Note) Rent revenue include land rent, parking lot revenues, advertisement charges and vending machine installation charges as well as rents and common charges.

14

Management Status and Strategies (Future Leasing Strategies)

Promoted Leasing Strategies that Should Enable Future Upside Gains Revenues from existing properties largely remained stable during the 24th fiscal period despite negative impact of contract
cancellations
 Reinforced endeavors to “raise new rents” upon inviting new tenants and “revise contract with upward revision of rents”

Reinforcement of Leasing Measures

Improvement ofoccupancy rates

 Increase occupancy rates of office properties having room for
upward moves to 94.8% (end of the 24th fiscal period)
Potential when increasing to 97%

Outlook of Occupancy Rate(%)

Based on concluded contracts

99

Based on generated rents98→ up approx. JPY 180 million per period(96.9% in average)

Reduction of rentfree periods anddown time Diminishing of rent-free periods will proceed smoothly in the
25th fiscal period
Occupancy rate based on generated rents improved to 95.9%(up 1.7%p period-on-period) Work to set up appropriate free-rent periods and reduce downtime, focusing on rent level

Move-ins: approx. 6,500 m2(confirmed contracts)(96.6% in average)(96.8% in average)

96.7

96.6

96.5

97

Move-ins: approx. 5,600 m2(confirmed contracts)

96
95.9
95

95.5

94
94.2

Rise in new rents

Reduction ofcontract renewal
with downward
revision of rents

 Achieved new contract rents higher by 20% on average thanthe market rent levels (24th fiscal period)93

 Focus on raising new contract rents that should contribute toimproved earnings in the future092 Number of requests from tenants to reduce rents showed adecreasing trend, with 17 cases in the 24th fiscal period(25 cases in the 23rd fiscal period and 47 cases in the 22nd
fiscal period)

Rent-free periods have been set
conservatively for some ofassumed new contracts

Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
24th Period
25th Period (forecast)
26th Period (forecast)(Note) Occupancy rate for the 25th fiscal period is only for contracts confirmed at beginning of period including new contracts
and already notified cancelations.
Occupancy rate for the 26th fiscal period assumes some new contracts, etc. on top of the assumptions for the 25th
fiscal period.

Outlook of Average Unit Rent
(thousand yen/tsubo)

14.1
14.1

Promotion ofcontract renewal
with upwardrevision of rents

Diminishing rent-free periods will give
expanded impact on occupancy rate
based on concluded contracts

14.1 thousand
yen/tsubo

Expected to remain largely flat, though slight decreasein anticipated, in the 25th fiscal period forecast

14.1



Work to achieve upward revision of rents upon futurecontract renewals, centering on properties with competitive
advantages

14.0
14.0
14.0
0.0
14.0

End of 24th period

End of 25th period (forecast)End of 26th period (forecast)(Note) The average unit rent at end of each fiscal period is indicated, with considerations given to the tenant move-ins andmove-outs, rent revisions and other factors assumed in the forecasts of financial results for the 25th fiscal period andthereafter.

15

Management Status and Strategies (Future Leasing Strategies)

Properties Subject to Reinforced Leasing Activities
 Promoted leasing strategies, primarily for properties with decreased occupancy rates, in accordance with the status of
the area markets and advantages of individual properties(Note)The assumed occupancy rate of each property is the occupancy rate assumed in the forecasts of financial results.

Tokyo Tatemono Kyobashi Building

MS Shibaura Bldg.

Perspective of Occupancy RatePerspective of Occupancy Rate

End of Dec. 2013(actual results)

End of Jun. 2014(assumption)

End of Dec. 2014(assumption)

End of Dec. 2013(actual results)

End of Jun. 2014(assumption)

End of Dec. 2014(assumption)

24.1%

46.0%

78.8%

100.0%

100.0%

72.9%

Advertised floor and space[Floors] 5F

Advertised floor and space[Space] 580tsubos(Space per floor : 117 tsubos)• Partial cancellation by a tenant having a blanket lease contract at the end of July 2013
• Contracts concluded for 2 floors after completion of renewal work in August 2013
• Highly evaluated by new occupying tenants for the location, convenience and other factors• With demand confirmed from a wide range of industries and business types including
tenants that serve visiting guests, promote leasing activities targeting for upper zones ofrent levels[Floors] 2F[Space] 1,186tsubos(Space per floor : 590 tsubos)• Received a notification of cancellation from a major tenant at the end of January 2014 (scheduled
cancellation date: end of July 2014)• Though the property is not so advantageous in terms of convenient access to stations, it receives highevaluation for its specifications, large regularly-shaped sections and other factors• Completed renewal work of elevator halls, rest rooms, etc. in August 2013
• Reinforce targeted leasing to fill vacated spaces in a short period of time, based on such achievements
as large-scale relocations for office consolidation to the property without down time,

JPR Hakata Bldg.

JPR Crest Takebashi Bldg.
Perspective of Occupancy RatePerspective of Occupancy Rate

End of Dec. 2013(actual results)

End of Jun. 2014(assumption)

End of Dec. 2014(assumption)

End of Dec. 2013(actual results)

End of Jun. 2014(assumption)

End of Dec. 2014(assumption)

51.4%

51.4%

75.7%

97.7%

67.7%

82.5%

Advertised floor and space[Floors] 4F[Space] 480tsubos(Space per floor : 120 tsubos)

Advertised floor and space[Floors] 5F[Space] 600tsubos(Space per floor :160tsubos)• In the 24th period, the occupancy rate rose to 75.7% due to new leases but subsequently
dropped to 51.4% as a result of cancellations for 2 floors• The occupancy rate dropped to 67.7% at the end of the 24th period due to cancellation by alarge tenant• Although the Kanda Nishikicho area is slow in demand recovery, the property receives certain
evaluation from tenants for its grade and specifications, and a blanket application for the entire
4th floor was confirmed during the 24th fiscal period (conclusion of contract not yet determined)• Featuring high visibility in a business area in front of Hakata Station and good access throughdirect connection to the subway station, the property maintained average occupancy rate of over
90% since the renewal of air-conditioning systems in 2007

• As the property has strong appeal to tenants who weigh environmental considerations,
implement leasing activities with a broadened scope• Reinforce leasing activities to achieve both an increase in the occupancy rate and a rise in rent
levels, as new inquiries are continuously received and applications with rents higher than before
the move-outs are confirmed

16

Management Status and Strategies (Future Leasing Strategies)

Endeavors to Enhance Property Value: Renewal of Kawasaki Dice Building Profitability and appraisal value increased significantly due to renewal and change of contract format (1-3 floors; from a
blanket contract to individual contracts, adoption of percentage-of-sales rents, etc.)

Initiatives on Value Enhancement
Total investment of JPY

Renewal84 million

Improved visibility and comfort through flow planning andenvironmental-friendly renewal
Simultaneously conducted renewal of individual shops

RenewalChange ofcontract format

Rent (fixed)+3.7%
Expanded sales floors by reviewing visitor circulation
planning

Before renewal

After renewal

NOI yield

4.2%

4.4%

Appraisal value

JPY14.4 bn

JPY14.8 bn(Note) NOI yield has been calculated based on the results of the 24th fiscal period, assuming the NOI
from assumed income and expenditures before and after the renewal.

Merchandising by multiple tenants
including UNIQLO and TSUTAYAOne company (1-3F; blanket contract)
11companies (individual contracts)
Up JPY 27.9million/year, up 10.5%
Significantly increased fixed rents through new contracts

Renewal work

 Renovation of common environment including the entrance andvisitor circulation
 Renovation of external façade and lighting equipment
 Renovation of rest rooms and new installation of powder corners
 Renovation of signboards

Flow line to escalators

Rent(sales-linked)

Rest room and power corner

10 companies (newly adopted),
up JPY 5.0 million/year (based on sales of previous year)
Newly set up sales-linked rents, aside from fixed rents

17

Management Status and Strategies (24th Fiscal Period ended December 2013; Investment Properties)

Acquired Blue-Chip Office Property in the Central Tokyo Area: Science Plaza – Yonbancho Plaza
Otsuma Women’s
University
JPR Ichigaya
Bldg.
SophiaUniversity

Science Plaza
Joshigakuin
Junior and SeniorHigh School

Rokubancho
Bldg.

NittereKojimachi
Bldg.
Embassy of
IsraelShinjuku-doriStreet5-minute walk from Kojimahci Station on the Tokyo Metro Yurakucho Line,
6-minute walk from Ichigaya Station on the JR Sobu Lineand 8-minute walk from Hanzomon Station on the Tokyo Metro Hanzomon LineNOI yield
Location

9-6 Yonbancho, Chiyoda-ku, Tokyoand others

5.2%[Actual NOI yield for current period] 5.3%

Completion

February 1995

(Reference) 24th fiscal period portfolio average: 4.4%

Total floor space

24,560.36㎡

Type ofownership

Sectional Ownership(22.4％ of ownership)

SellerCotone Capital YK

Acquisition price

2,660 million yen

Appraisal value

2,720 million yen(as of November 1, 2013)

Acquisition date

December 6, 2013

[Assumed NOI yield upon acquisition]

NOI yield after depreciation■ Acquisition Highlights• Realized a negotiated transaction by taking advantage of the support from the Yasuda Real Estate Group,
one of the sponsors• Acquired with NOI yield of 5.2%, which surpasses the portfolio average• Acquired compartmentalized ownership to secure opportunities for future external growth through utilizing
preferential negotiation rights, etc.

■ Property Characteristics• Features a size (standard floor space of 300 tsubos) that is superior in the area and high grade that exerts
scarcity value• An incorporated administrative agency, the major tenant, has been housed in the property over a long time
to use it as a main base
• The area has a concentration of incorporated administrative agencies and incorporated foundations that
seek proximity to Nagatacho and Kasumigaseki (the government areas) , foreign firms that prefer a quiet
environment for offices, and others

4.4%[Actual NOI yield for current period] 4.6%

[Assumed NOI yield upon acquisition](Reference) 24th fiscal period portfolio average:：3.5%

Assumptions for calculating yield
Assumed NOI yield upon acquisition:
Calculated based on the assumed income and expenditures for the 12 months that take into account such factors as
tenant replacements and rental fluctuations occurring in the ten years after the acquisition of the property; the averageoccupancy rate for the period is assumed to be 95% (for office sections).
Actual NOI yield for current period:
Calculated by deducting the amount equivalent to the property and other taxes to be included in the acquisition price uponacquisition from the annualized value of the actual NOI for the 24th fiscal period; furthermore, the occupancy rate at theend of the 24th fiscal period was 90.2%.

18Management Status and Strategies (December 2013; Investment Properties)

Acquired Blue-Chip Office Property in the Central Tokyo Area: Shibadaimon Center Building

Shibadaimon
Center Building
Tokyo Prince
Hotel

Minato City
OfficeZojoji Temple

World Trade
Center BuildingTokyo
Meilparque Hall

Kyushibarikyu
Onshi Garden

3-minute walk from Daimon Station on the Toei Subway Asakusa Line and Oedo Line,
4-minute walk from Onarimon Station on the Toei Subway Mita Lineand 9-minute walk from Hamamatsucho Station on the JR Ymanote Line and Keihin
Tohoku LineNOI yield

5.1%[Actual NOI yield for current period] 5.6%

[Assumed NOI yield upon acquisition]

Location

1-703-3 Shibadaimon, Minato-ku,
Tokyo and otherCompletion

July 1993

Total floor space

11,419.93㎡

Type ofownership

Sectional Ownership(52.8％ of ownership)

SellerCotone Capital YK(Reference) Portfolio average:：4.4%■ Acquisition Highlights• Realized a negotiated transaction by taking advantage of the support from the Yasuda Real Estate Group,
one of the sponsors• Acquired with NOI yield of 5.1%, which surpasses the portfolio average• Acquired compartmentalized ownership to secure opportunities for future external growth through utilizing
preferential negotiation rights, etc.

■ Property Characteristics• The property, which has total floor space of over 3,000 tsubos, exerts superiority in the area where there aremany small- and medium-sized office buildings• Offers good access to such wide-area traffic networks as Haneda Airport and Shinagawa Station on the JR
lines• The market of the area shows a strong improvement trend, allowing expectations for future internal growth• Vacancy rate of the area: 7.3% (as of 4th quarter of 2013; down 3.3%p from 4th quarter of 2012)(Note) The vacancy rate above is based on the data for the Hamamatsucho – Shibakoen zone in the Japan Office Market View publicized by CBRE.

NOI yield after depreciation

Acquisition price

3,420 million yen

4.1%[Actual NOI yield for current period] 4.6%

Appraisal value

3,590 million yen(as of November 1, 2013)(Reference) Portfolio average:：3.5%

Acquisition date

December 6, 2013

[Assumed NOI yield upon acquisition]

Assumptions for calculating yield
Assumed NOI yield upon acquisition:
Calculated based on the assumed income and expenditures for the 12 months that take into account such factors as tenant replacements andrental fluctuations occurring in the ten years after the acquisition of the property; the average occupancy rate for the period is assumed to be 95%(for office sections).
Actual NOI yield for current period:
Calculated by deducting the amount equivalent to the property and other taxes to be included in the acquisition price upon acquisition from theannualized value of the actual NOI for the 24th fiscal period; furthermore, the occupancy rate at the end of the 24th fiscal period was 90.2%.

19Management Status and Strategies (Future Investment Strategy)

Reinforce Pipelines Centering on Sponsors’ Pipelines and Obtain Opportunities for Strategic Investment
 JPR has realized NOI yield after depreciation of 3.9% on average for office properties it acquired in recent years, thanks to highsourcing abilities that enable negotiated transactions
 Aim to obtain opportunities to invest in office properties having larger growth potential, along with acquisitions of such officeproperties producing large earnings and achievement of higher stability of earnings from existing properties
 Pipelines of large-scale office properties
developed and owned by the main sponsor,
etc.

Main
sponsor Acquisition results of major properties
developed by the main sponsor
 Continuously conduct information exchange
and discern investment opportunities in a
strategic manner

Other
sponsors

Acquisition
fromexternal
sources

Co-owned
properties(Reference) Examples of major developments by Tokyo Tatemono

Otemachi Tower(Land with Leasehold Interest)

Yakuin Business Garden Reinforced initiatives over recent years on
sponsor support from Yasuda Real Estate,
Taisei Corporation and other sponsors
 Achieved acquisition of 2 office properties inCentral Tokyo in the 24th fiscal period byutilizing support from the Yasuda Real EstateGroup With many achievements ofnegotiated transactions withgeneral business corporations,promote acquisitions by taking
advantage of strong sourcing
abilities
 Participate in bid deals after
vigorously selecting projects

 JPR has negotiation rights forthe portions other than its
equity interests (25% on
average)

Science Plaza Yonbancho Plaza

Shibadaimon Center
Building

49.6

Ginza Sanwa Building

Aug. 2011

Negotiation withexternal source

3.9

3.6

Otemachi Tower (Land with
Leasehold Interest)

Mar. 2012

Main sponsor

3.6

3.6

Yakuin Business Garden

Aug. 2012

Main sponsor

5.5

3.8

Omiya Prime East

Mar. 2013

Negotiation withexternal source

7.0

5.4

Mar. 2013

Preferential
negotiation

7.8

5.7

Dec. 2013

Other sponsors

5.3

4.6

30.1

Properties
acquired fromthe sponsors,etc.

Dec. 2013

Other sponsors

19.5
Properties acquired
based on information
obtained from thesponsors(Note) Sponsors, etc. represent the five sponsor
companies of JPR, their affiliate companies andspecial purpose companies (SPCs) in which thesponsors have made equity investment.

after
depreciation

5.6

4.6

Average of acquired
properties

4.4

3.9

Portfolio average

4.4

3.5

Shibadaimon Center Building

Properties acquired other thanfrom sponsors, etc.

50.4

Shinyokohama 2nd
Center Bldg.

Deal type

Shinyokohama 2nd Center
Bldg.
Science Plaza - Yonbancho
Plaza

NOI
yield

NOI yield

Acquisiti
on dateProperty name

Transactions with third parties

 Of the 62 properties in theportfolio, JPR has 30 co-owned
properties totaling JPY 229.1
billionNakano Central Park

Properties Acquired in the 20th Period and Thereafter (%)

Property Acquisition
Results by Channel

Omiya Prime East

Tokyo Square Garden(Note)At present, there is no decision
made for JPR to acquire theseproperties.

Secured NOI yield after depreciation of 3.9% through vigorously selective investment
in office properties
Investment ratio of the above:
72.0% for Central Tokyo, 10.5% for Greater Tokyo and 17.4% for Other Cities(Note) The NOI yield and NOI yield after depreciation have been calculated based on actual
results for the 24th fiscal period. For properties acquired in the 23rd and 24thh fiscal
periods, the figures have been calculated by deducting the amount equivalent to theproperty and other taxes to be included in the acquisition price upon acquisition from the
NOI for these fiscal periods

20Management Status and Strategies (24th Fiscal Period ended December 2013; Appraisal)

Appraisal Unrealized losses have continued to improve since the 22nd fiscal period as properties with increased appraisal values inline with a decrease in cap rates took a majority of the portfolio
Number of Properties with Increase/Decrease in
Appraisal Value and Cap Rate

Period-End Appraisals

60

No. of properties

End of 24th Period

Change62(excluding properties
acquired during the period)+2(cases)Change60-

Appraisal value

JPY365.2
billion

JPY376.9
billion+JPY11.7
billion

JPY370.4
billion+JPY5.2
billionBook value

JPY386.0
billion

JPY391.2
billion+JPY5.1
billion

JPY385.0
billion-JPY1.0
billionUnrealized gains
or losses-JPY20.8
billion-JPY14.2
billion+JPY6.6
billion-JPY14.5
billion+JPY6.2
billionRatio of unrealized
gains or losses

-5.4%

-3.6%

+1.8％pAppraisal value

End of 24th
PeriodDec. 31, 2013

-3.8%

End of 22nd Period50

End of 24th Period

18

19

30
20
22

10

50

26

38

Increase(cases)18

12

Unchanged

End of 22nd period

1710

Decrease

End of 23rd period

End of 24th period

40
30
20
10
0

+1.6％pEnd of 23rd Period

400

Cap rate

End of 23rd
PeriodJun. 30, 2013

36
17

38

18

42
17

Increase

4

Unchanged

71
Decrease(Note) The figures represent the number of properties that had changes in appraisal values(increase/flat/decrease) and cap rates (decrease/flat/increase) by comparing appraisal values
and cap rates of each point of time on a period-on-period basis. Furthermore, properties
acquired in the 24th fiscal period are not included.

Changes in Unrealized Gains or Losses(JPY100 mn)

(%)

600

Unrealized gains or losses (left axis)

500

Ratio of unrealized gains or losses (right axis)

30
21.9%
18.5%

400
9.3%

200
100

5.3%
7

0
-100
-200
-300

0.8%

1

-3
-40

0.1% -0.2%
-2.9%

-83

-74

-5.1% -4.1%

-38
-1.9%

105

446
312

20

13.9%

14.3%

300

25

20.3%

539

15

544
381

10

2.7%

5

192
79

-11
-0.4%

-146

-159

-172

-181

-226

-217

-208

-142

0
-5

-3.6%
-4.5% -4.8% -5.2% -5.4%-6.1% -5.7% -5.4%

1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
20th
21st
22nd
23rd
24th
Jun. 2002 Dec. 2002 Jun. 2003 Dec. 2003 Jun. 2004 Dec. 2004 Jun. 2005 Dec. 2005 Jun. 2006 Dec. 2006 Jun. 2007 Dec. 2007 Jun. 2008 Dec. 2008 Jun. 2009 Dec. 2009 Jun. 2010 Dec. 2010 Jun. 2011 Dec. 2011 Jun. 2012 Dec. 2012 Jun. 2013 Dec. 2013

-10
-15

21

Management Status and Strategies (24th Fiscal Period ended December 2013; Financial Operation)

Conservative Financial Operations Continued
 Conducted financial operations with ratio of interest-bearing debt (LTV) set at the target range of up to 50% (based onunitholders’ capital) as a rule
 (Also investigated possible operations with LTV surpassing this level and up to 50% based on gains or losses from valuationin accordance with property acquisitions, fluctuations in appraisal values and other factors)
Credit Rating Status

Main Data
End of 23rd Period End of 24th Period
Jun. 2013
Dec. 2013

49.4%

LTV (based on unitholders’ capital)

50.0%(as of December 31, 2013)

Credit Rating Agency

Change+0.6%pCorporate Credit Rating (Outlook)

R&I

AA- (Stable)(Rating and Investment Information, Inc.)LTV (based on gains or losses fromvaluation)

48.1%

48.0%

-0.2%pRatio of long-term, fixed interest rate
debts

98.2%

97.2%

-1.0%pMaturity of interest-bearing debts

3.3 years

3.5 years+0.2 years

Average interest rate of interestbearing debts

1.57%

1.53%

-0.04%pLong-term : A (Stable)

S&P

Short-term: A-1(Standard & Poor’s Ratings Japan K.K.)

Moody’s

A3(Moody’s Japan K.K.)(Stable)(Note) JPR had its ratings assigned by Moody’s Japan K.K. withdrawn on January 21, 2014.

Changes in Unitholders’ Capital and Ratio of Interest-Bearing Debts (LTV)(JPY bn)

Unitholders’ capital

54.9

300

LTV (based on unitholders’ capital)

46.4
40.6

200
35.3

42.0
48.0

37.1

44.1

45.8

48.9

48.7
44.1

48.7

37.2
38.5

38.9

44.6
34.5

34.4

48.5

48.9

48.7

48.8

48.5

49.4

50.0
50

52.2

38.9

39.7
29.4

49.0

45.2

44.4
39.3

36.5

60

53.2

51.1

39.4

(％)

LTV (based on gains or losses from valuation)

45.5

46.9

47.5

47.5

47.6

47.5

48.1

48.0

37.2

40
30

29.9

100

20
10

0

56

56

56

89

89

89

115

115

115

115

156

156

156

156

156

156

171

171

171

171

171

192

192

192

1st

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

17th

18th

19th

20th

21st

22nd

23rd

24th

0

Jun. 2002 Dec. 2002 Jun. 2003 Dec. 2003 Jun. 2004 Dec. 2004 Jun. 2005 Dec. 2005 Jun. 2006 Dec. 2006 Jun. 2007 Dec. 2007 Jun. 2008 Dec. 2008 Jun. 2009 Dec. 2009 Jun. 2010 Dec. 2010 Jun. 2011 Dec. 2011 Jun. 2012 Dec. 2012 Jun. 2013 Dec. 201322

Management Status and Strategies (24th Fiscal Period ended December 2013; Financial Operation)

Diversification of Lenders and Utilization of Investment Corporation Bonds
 Established a lender formation with 30 financial institutions, making it the basic policy to do business with them in negotiateddeals (Newly invited two banks in the 24th fiscal period) Issued investment corporation bonds in a dynamic and flexible manner since listing, aiming to diversify lenders and reduce
financing costs
Status of Borrowings
LenderStatus of Corporate Bonds
Balance as of Dec.
31, 2013 (JPY mn)

Mizuho Bank, Ltd.

22,100

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

18,253

Sumitomo Mitsui Bank

12,950Aozora Bank, Ltd.

7,900

Shinsei Bank, Limited

7,000

Mizuho Trust & Banking Co., Ltd.

7,000

Mitsubishi UFJ Trust and Banking Corporation

7,000

Development Bank of Japan Inc.

5,920

The Bank of Fukuoka, Ltd.

5,000

Sompo Japan Insurance Inc.

4,000

Lenders of Interest-bearing Debts

Mega Bank
Corporate bonds
56.5 billion yen

53.3 billion yen
28%

30%

Interest-bearing
191.7 billion yen

Meiji Yasuda Life Insurance Company

3,736

ORIX Bank Corporation

3,000

Shinkin Central Bank

3,000

The Shinkumi Federation Bank

3,000

Taiyo Life Insurance Company

3,000

The Chugoku Bank, Ltd.

3,000

The Nishi-Nippon City Bank, Ltd.

3,000

Sumitomo Life Insurance Company
Zenkyoren (The National Mutual Insurance

2,000

Central Bank

2,000

30 financial institutions
Corporate bonds
Regional Bank
17.4 billion yen

9%

13%
2%

Large Bank
11%

7%

Name

Balance as of Dec.
31, 2013 (JPY mn)

3rd Series of Corporate Bonds

5,000

6th Series of Corporate Bonds

5,000

7th Series of Corporate Bonds

4,500

9th Series of Corporate Bonds

6,000

11th Series of Corporate Bonds

6,000

12thSeries of Corporate Bonds

7,000

13th Series of Corporate Bonds

7,000

14th Series of Corporate Bonds

2,000

15th Series of Corporate Bonds

5,000

16th Series of Corporate Bonds

2,000

17th Series of Corporate Bonds

5,000

18th Series of Corporate Bonds

2,000

Balance of corporate bonds

56,50025.8 billion yen

Daido Life Insurance Company

2,000

4.0 billion yen Insurance
Company

The Hachijuni Bank, Ltd. (Note 2)

2,000

20.7 billion yen

Resona Bank, Limited

2,000

The Iyo Bank, Ltd.

1,000

Mizuho Bank, Ltd.

4,000

Tokyo Marine & Michido Fire Insurance Co., Ltd.

1,000

The Bank of Tokyo-Mitsubishi

4,000

The Nourinchukin Bank (Note 3)

1,000

Sumitomo Mitsui Bank

4,000

Tokyo Tomin Bank Limited (Note 4)

1,000

Aozora Bank, Ltd.

4,000

The Bank of Yokohama, Ltd. (Note 4)

1,000

Mizuho Trust & Banking Co.,
Mitsubishi UFJ Trust and Banking
Corporation
Resona Bank, Limited

4,000

Federation of Agricultural Cooperatives)

The Minato Bank, Ltd. (Note 4)

800

The Yamaguchi Bank, Ltd. (Note 4)

500

The Chiba Kogyo Bank, Ltd. (Note 4)
Total borrowings

100
135,259

Trust Bank

Status of Commitment Line Contract

14.0 billion yen(Note 1) All borrowings are unsecured and Unguaranteed.
(Note 2) Of the JPY 2,000 million in loan balance, JPY 1,000 million wasborrowed in short-term loans.
(Note 3) Borrowed in short-term loans(Note 4) These are borrowings made through originating a syndicated loan.
(Note 5) All borrowings are long-term, fixed interest rate debt except for
those in (Note 2) through (Note 4).

LenderTotal commitment line

Balance as of Dec.
31, 2013 (JPY mn)

4,000
4,000
28,00023

Management Status and Strategies (24th Fiscal Period ended December 2013; Financial Operation)

Interest-Bearing Debt Costs Reduced and Shift to Long-Term, Fixed Interest Rate Debts Promoted
 Lowering of interest rates and promotion of shift to long-term, fixed interest rate debts realized by refinances of long-termborrowings that matured in the 24th fiscal period
Borrowings Made in the 24th Period
After refinancing

6.0 years, 0.890%
Borrowingdate

LenderLoanamountChanges in Average Maturity
and Average Costs of Interest-Bearing Debts+1.9 years- 0.462%

4.1 years, 1.352%

Term

Loan
amountInterest rate

Before refinancing

Term

(％)

(years)2.0
1.84Interest rate

Shinsei Bank, Limited

2,000

7 years

1.076%

2,000

3 years

1.070%The Bank of Fukuoka, Ltd.

1,000

6 years0.911%

1,000

3 years

1.070%The Chugoku Bank, Ltd.

1,000

5 years

0.758%

1,000

3 years

1.070%The Hachijuni Bank, Ltd.

1,000

1 year

0.471%

1,000

3 years

1.070%

Aozora Bank, Ltd.

1,000

7 years

1.069%

1,000

3.5 years

1.322%

Mizuho Bank, Ltd.

3,000

7 years

0.970%

3,000

4 years

1.279%The Bank of Tokyo-Mitsubishi

3,000

7 years

0.970%

3,000

4 years

1.279%ORIX Bank Corporation

2,000

5 years

0.762%

2,000

4 years

1.281%

Average interest-bearing debt costs (left axis)

1.8

1.73
1.62

Sep. 24

Sep. 30

Nov. 27

Taiyo Life Insurance Company

1,000

7 years

1.011%

1,000

7 years

1.858%

Daido Life Insurance Company

1,000

5 years

0.710%

1,000

7 years

1.858%

Tokyo Tomin Bank Limited

1,000

5 years

0.710%

2,000

7 years

1.858%

Total and average of refinance

17,0006.0 years

0.890%

18,0004.1 years

1.352%

Shinkin Central Bank

3,000

5 years0.689%Development Bank of Japan Inc.

2,000

8 years

1.188%The Nourinchukin Bank

1,000

1 year

0.398%

6,000

5.3 years

0.807%

Dec. 27

Dec. 5

Total and average of new borrowings

23,0005.8 years

4

1.57
1.6

1.53

1.4
3
1.2

3.0 years

2.9 years

20th Period

21st Period

3.3 years

3.3 years

22nd Period

23rd Period

3.5 years

0.0
1.0

20
24th Period(Note) Average interest-bearing debt costs =(Interest expenses + borrowing-related expenses + interest expenses for investment corporation bonds+ investment corporation bond issuance costs) / balance of interest-bearing debt through the fiscal period

Diversification of Repayment Dates of Interest-Bearing Debts(JPY100 mn)(as of December 31, 2013)250
Total and average of 24th period

5

Average maturity (right axis)

Corporate bonds

Long-term borrowings

Short-term borrowings

0.869%

200(Reference) Issuance of Investment Corporation Bonds (25th fiscal period)
Feb. 5,19th Series of Corporate

2014

Bonds

150
5,000

10 years

50

50

1.110％(Note1)The short-term loans have floating interests, and the interest rates as of the end of December
2013 are indicated.
(Note2)The loans made as of December 5, 2013 was newly borrowed in association of property
acquisitions.
(Note3)The investment corporation bonds as of February 5, 2014 were issued in association withredemption of the Third Series of Investment Corporation Bonds (with a balance of JPY 5,000
million)

130
100
110
50

135

120
1

0

50

195

20

61

131

20

20

70
120
83
41

81

91

80

100
60
8

20

25th Period 26th Period 27th Period 28th Period 29th Period 30th Period 31st Period 32nd Period 33rd Period 34th Period 35th Period 36th Period 37th Period 38th Period 39th Period 40th Period
Jun. 2014 Dec. 2014 Jun. 2015 Dec. 2015 Jun. 2016 Dec. 2016 Jun. 2017 Dec. 2017 Jun. 2018 Dec. 2018 Jun. 2019 Dec. 2019 Jun. 2020 Dec. 2020 Jun. 2021 Dec. 2021

45

20
-

43rd Period
Jun. 2023-

50th Period
Dec. 2026

24

Management Status and Strategies (Future Distribution per Unit)

Review of Distribution per Unit (DPU) While earnings from existing properties will apparently be nearing the bottom in the 25th fiscal period and thereafter, reductions infinancial costs will effectively help increase distribution per unit
 In terms of change factors for internal growth, an increase in property and other taxes, utilities expenses, repairs and maintenance othercosts will cause a negative impact, and JPR will continue to focus on thorough control of costs

Breakdown of Major Change Factors for Distribution per Unit
(JPY)

6,400

Repayment and Redemption Amounts
in the 25th Fiscal Period and Thereafter
For the 24th and 25th periods, rent revenue
largely stay flat but a decrease is recorded
in internal growth due to an increase in
expenses related to rent business, etc.

6,300

6,200

Increase in repairs and maintenance-106
Increase in others of expenses related
to rent business-44

Assumes cost reductions through refinances,
as repayment of borrowings with an averageinterest rate of over 2% and others are planned
for the 25th fiscal period and thereafter

Increase in property and other taxes-114
Increase in repairs and maintenance
-73

71

6,100

6,050

6,030

6,006

6,000
-176

155

-172

5,900

148

Repayment
and redemption
amountInterest rate

25th Period

JPY16.9 bn

2.395%

26th Period

JPY11.0 bn

2.055%

Total andaverage

JPY27.9 bn

2.261%

6,198

Simulation through Refinancing

74

Contribution throughout the two fiscal periods for the
25th and 26th periods

70-5

Fiscal period

Increase in settlement of management
association accounts, etc. +39
Decrease in financial costs+96
Decrease in extraordinary income-66

Assumedinterest rate forrefinancing

Contribution to
profits per period

Distribution per
unit

1.6%

+JPY0.17 bn+206 yen

1.4%+JPY0.19 bn+234 yen

1.2%+JPY0.22 bn+262 yen

1.0%+JPY0.24 bn+289 yen(Note)The above simulation is a result of simple calculations
under assumptions based on JPR’s results, and JPR
does not assure its accurateness and certainty.

5,800
0
DPU

23th
PeriodInternal
growthExternal
growthFinancial
operations,etc.

24th Period

DPU

Internal
growthExternal
growthFinancial
operations,etc.

25th Period (forecast)

DPU

Internal
growthFinancial
operations,
etc.

DPU

26th Period (forecast)25

Characteristics of JPR

Characteristics of JPR

Characteristics of JPR
Portfolio

External Growth

A large-scale REIT with a portfolio of office and urban retail properties

Investment strategy that utilizes multiple pipelines Portfolio size: JPY 404.7 billion (based on acquisition price) Property diversification[By area]
Tokyo:

83%, Other Cities:17%→ Enhancing growth potential[By asset class] Office: 76%, Retail: 24%→ Enhancing stability[By size]
Very large: 41%, Large: 27%, Medium-sized: 32%→ Securing opportunities for growth Established a portfolio with enhanced profitability through diversificationin each aspect
NOI yield: 4.4%

office properties in Central Tokyo: 3.6%
others: 5.2%

Multiple pipelines(1) Main sponsor(2) Other sponsors(3) Preferential negotiation rights(4) Information from external sources

Acquisition from sponsors, etc.:
Acquisition from third parties:

50%
50%



Achievements in acquiring major properties developed by Tokyo Tatemono, themain sponsor (such as Otemachi Tower (Land with Leasehold Interest)

Have steadily acquired properties in each fiscal period since listing in 2002
(except for 2011 when the Great East Japan Earthquake broke out)Of the portfolio, approximately 57% totaling 229.1 billion yen (based on
acquisition price) are co-owned properties, etc., for most of which JPR has
preferential negotiation rights

Stable Growth of Distributions and Enhancement of Asset Value

Enhance Investment Value of Unitholders
Internal Growth

Financial Strategy

Operation management through comprehensive capabilities ofrespective special groups within the Asset Manager

Conservative control of LTV and shift to long-term,
fixed interest rate debts

 Maintains stable occupancy rate since listing

95.7% (past average)

 Established a leasing system under the initiative of the Asset Manager
 The Asset Manager has formed special groups for leasing, research andasset engineering on top of the asset management group
Asset Management
Groups
Leasing teamResearch Group× Asset Engineering
Group(Note) Respective figures above are based on the actual results as of the end of the 24th fiscal period.

50% or less (target)
R&I: AA- S&P: A
Borrowings from 30 financial institutions

 Policy to conservatively manage LTV
 High-level credit ratings
 Stable bank formation

 Dynamic and flexible issuance of investment corporation bonds

19 series of bonds issued to date
 Consistent fund procurement policy through long-term, fixed interest rate
debts
Ratio of long-term, fixed interest rate debts: 97.2%
Average maturity: 3.5 years
27Characteristics of JPR

Establishment of Portfolio that Enhances Growth Potential and Profitability
 Makes the best of management advantages of a compound portfolio, achieving management returns that are among
the highest of J-REITs mainly investing in office properties
Overview of Portfolio

Portfolio that Enhances Growth Potential and Profitability

No. of properties

Leasable space

No. of tenants

Occupancy rate

NOI yield

After-depreciationyield

62 properties

470,000㎡

610 tenants

96.5%

4.4%

3.5%

While enhancing growth potential through investment in office properties in Tokyo, enhance
profitability through diversified investment in office properties in Other Cities and retailproperties

7

6

Diversification by Area

Retailproperties

Other Cities
Officeproperties 17.1%

23.5%

76.5%

Diversification by Asset Class and Area
Retail properties
in Other Cities

7.8%
52.5% Office properties

Central Tokyo

Office properties
in Tokyo

67.2%

in Other Cities

NOI yield (％)

Enhanced Stability through Diversification
Diversification by Asset Class(End of the 24th period)

Office properties
in Greater Tokyo

5

Retail properties
in Tokyo

30.4%

15.7%

JPY37.5 bn
5.5%Retail properties

JPY95.2 bn
4.9%

in Central Tokyo

Average NOI yield: 4.4%

4

9.3%
Greater Tokyo

JPY83.9 bn
Office properties
5.3%

Office properties
in Other Cities

JPY188.0 bn
3.6%Enhance profitability throughdiversified investment

3
Bubble size = portfolio size (based on acquisition price)

20
Complement stability by incorporating some retail properties
and land with leasehold interest into the portfolio

Complement profitability by vigorously selective investment inproperties in Other Cities

Diversification by Size

JPR owns preferential negotiation rights for most of the co-owned properties, etc.
that occupy approx. 57% of the portfolio

Tenant DiversificationA

Medium-sized

Very large

32.0%

41.3%

B
C
D

L

The Otemachi Tower
1 (Land with Leasehold Interest)

8.9%

2 Olinas Tower

7.7%

Large

3 Shinjuku Center Building

5.2%

26.7%

4 Kanematsu Bldg.

4.0%

5 BYGS Shinjuku Bldg.

3.7%

Secure opportunities for property acquisitions by incorporating
properties with different sizes into the portfolio

K

JI

Growth Potential through Preferential Negotiation Rights

E
F
G
H

A Tokyo Tatemono

8.2%

B ABC Development

7.8%

C Seiyu

6.9%

D Ito-Yokado

4.4%

E The LOFT

4.1%

F Tokyo Prime Stage

2.4%

G Olympic Group

2.1%

H Tower Records JapanI Sompo Japan Insurance
J Taisei-Yuraku Real Estate

1.8%
1.8%
1.3%

K Tenants with over 1% share

5.9%

L Tenants with 1% or less share

53.3%

Reduce move-outs risk through tenant diversification(Note) All figures are as of the end of the 24th fiscal period, and the investment ratios represent the ratios based on the acquisition price(while tenant diversification is based on leased space).

Ratio of co-owned properties, etc.
(based on acquisition price)
Co-owned properties, etc.: 30 properties
Full ownership: 32 properties
JPY 175.6 billion
43.4%

JPY

229.1 billion
56.6%(Reference)
Total asset value of the entire buildings ofco-owned properties, etc.
Approx. JPY 900 billion(JPR’s average equity interest: approx. 25%)
(Note)The total asset value of the entire buildings represents the sum total of the values (converted to acquisition prices) of theentire buildings of respective co-owned properties, etc. owned by JPR, estimated after its equity interests and preferential
negotiation rights, etc. in each of them.

28

Characteristics of JPR

Steady External Growth Achieved since Listing
History of Growth of Portfolio Size
(JPY 100 mn)

4,500

OfficeOffice(Tokyo)(Other Cities)

4,000

Retailproperties

Total properties
sold

3,500

3,312
2,994

3,000

2,751
2,453

2,500
2,000
1,636

1,500
1,000

1,257
921
401

500
0
-500

945

527

415
397

388

397

132

132

332

1st Period 2nd Period 3rd Period
Jun. 2002 Dec. 2002 Jun. 2003

(JPY 100 mn)

1,796

1,396
575
439
382
-4

774

479
382
-4

4th Period 4th Period
Dec. 2003 Jun. 2004

912

1,976

992

2,026

1,001

2,092

1,001

452

452
572

638

770

404

500

-4

-62

-93

-93

-93

5th Period 7th Period
Dec. 2004 Jun. 2005

2,592

2,658

2,719

2,806

1,357

1,416

2,592

2,095

2,198

2,198

2,232

311

265

265

265

265

265

375

375

375

1,729

1,841

311

1,082

1,147

431

431

431

394

939

939

961

995

953

953

952

952

952

952

952

952

952

952

-144

-144

-144

-181

-306

-306

-354

-354

-354

-354

-354

-354

-354

-354

8th Period 9th Period 10th Period 11th Period 12th Period 13th Period 14th Period 15th Period 16th Period 17th Period 18th Period 19th Period 20th Period 21st Period 22nd Period 23rd Period 24th Period
Dec. 2005 Jun. 2006 Dec. 2006 Jun. 2007 Dec. 2007 Jun. 2008 Dec. 2008 Jun. 2009 Dec. 2009 Jun. 2010 Dec. 2010 Jun. 2011 Dec. 2011 Jun. 2012 Dec. 2012 Jun. 2013 Dec. 2013

Properties acquired based on information provided by sponsors

Properties acquired from sponsors, etc.

Continued acquisition mainly based onsponsor support at times when property
information in the market was scarce

534
500

0

4,047

3,449

2,519

750

215
172

3,415

3,986

1,001

483

479

3,415

3,919

3,106

2,224

452

Properties acquired other than from sponsors, etc.

1,000

250

3,809

Average increase in assets from the 1st through 24th fiscal periods: JPY 13.0 billion/period

192
5
18

120

29
50
63

21
67
151

31
128

89
148

81

21
44

72
60

280

232
65

313
90
1

360

203
112

51

70
33

34

109

60
5

60

29

Characteristics of JPR

Operation Management through Comprehensive Capabilities of Respective Special Groups
within the Asset Manager
Functions of Respective Special Groups of the Asset Manager

Endeavors on Leasing under TRIM’s Initiative
Established a leasing system under the initiative of the Asset Manager by enhancing expertiseof respective operations that are directly connected to leasing
The leasing team works to enhance its leasing capabilities by strengthening direct pipelines
with brokers while taking advantage of leasing abilities of the sponsor groups through close
coordination with property management companies

Groups and teams organized by Tokyo Realty Investment Management, Inc. (TRIM)

Asset Management Group

Planning and implementation of
measures to enhance NOIManagement of strategic rent
negotiations



PDCA management of the CS Quality
Control Program in coordination withproperty management companies andbuilding management companies

Research Group

Analysis of market situations and pricetrends in each areaEstablishment of rent policies based onmarketing analyses

Portfolio analysis and strategy creation

TRIM

Brokers
Leasing team×

Leasing team

Asset Engineering Group

Formation of special leasing
teams



Deployment of dedicated engineersPlanning and implementation ofstrategies for individual properties

Implementation of renewal work that is
effective for leasing

Reinforcement of pipelines withbrokersPromotion of safeguarding of assets,
environmental responsiveness andenergy saving

Initiatives to Improve Customer Satisfaction
Based on the quality control program, TRIM periodically conducts customer
satisfaction surveys to tenants, and works to handle matters to be improved
and issues requested by tenants.
[Survey items]
・Status of environmental preservation
・Status of cleaning
・Tenant services by property managers and building managers
・Disaster/crime prevention
・Emergency responses
・Other matters on operations in general
Confirm management
issues and discusscountermeasuresamong persons incharge at liaison
meetings of the AssetManager, property
managers andbuilding managers

Customer satisfaction survey to tenants

Evaluation on property managers

Utilize the leasing capabilities of property
management companies (belonging tosponsor groups)

Research Group

Rent policy based on the analysis ofmarket rent and competition situations

Asset Management
GroupsStrategic management of negotiations

Asset EngineeringGroup

Renewal works effective for leasing

Tenants
Property
managementcompanies

Changes in Tenant Satisfaction in Customer Satisfaction Surveys
Unsatisfied

Somewhat unsatisfied

Somewhat satisfied(%)

Satisfied(left axis for all items to the left)

Average value (right axis)(points)

100

4

80
3.16

3.24

3.27

3.29

3.33

3.29

3.35

3.39

3.43

3

60

PDCA cycle

and building managers by tenants

Strengthening of pipelines with brokers

2
Feedback on quality ofoperations and levelsof services(Introduction of the
JPR Best PerformanceAward)

40
Average total satisfaction: 3.43 / 4.00 points
Ratio of “satisfied” and “Somewhat satisfied”: 94.2%(Results of the 2013 survey)

20
0

2005

2006

2007

2008

2009

2010

2011

2012

2013

1

0

30

Characteristics of JPR

Proactive Initiatives on Environmental Friendliness JPR has proactively conducted environmental-friendly management operations, including effective reduction of energy costs andenhancement of greening in consideration of urban environment, and have received certain recognition from external organizations.

Acquisition of DBJ Green Building Certification

Continuous Participation in GRESB Survey

Obtained the DBJ Green Building Certification, a system by Development Bank of Japan
Inc. (DBJ) to certify real estate properties evincing high environmental and social
awareness, for multiple properties

Participated in the GRESB Survey, which evaluates and analyzes environmental
considerations and sustainability, since 2011 and has obtained a certain appreciation for
the endeavors
Established a consistent system among all business partners involved in building
operations, from the Asset Manager to property managers and building maintenancecompanies, under a clear environmental policy
Participated in by real estate companies, investment funds
and other players from various countries of the world

Properties withexceptionally highenvironmental & social
awareness

Properties withexcellentenvironmental & social
awareness

Olinas Tower

Yakuin Business Garden

JPR Sendagaya
Bldg.

Shinagawa Canal
Bldg.

Properties with highenvironmental & social
awareness
JPR Crest Takebashi Bldg.

Properties with
sufficientenvironmental social
awareness

JPR Ueno East
Bldg.

JPR Nihonbashi-horidome Building

BYGS Shinjuku
Bldg.

Kanematsu Bldg.

DBJ Green Building Certification

GRESB Survey

DBJ awards five levels of certification, namely Platinum, Gold, Silver, Bronze and Certified, in
accordance with the degrees at which office buildings have environmental and social awareness.

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

31

Characteristics of JPR

Sponsor Support
Ratio of Properties Acquired by Taking Advantage ofSponsor Support
The ratio of “properties acquired from sponsors, etc.”and “properties acquired based on information
Properties acquired
obtained from the sponsors” stands 69.9%
other than fromsponsors, etc.
(on an acquisition price basis) of the entire
30.1
portfolio
Properties
acquired basedon information
provided bysponsors

Japan Prime Realty Investment Corporation

Properties
acquired fromsponsors, etc.

50.4
Properties acquired bytaking advantage ofsponsor support

19.5

Entrust the asset
management

69.9(Note) Sponsors, etc. represent the five sponsor companies of JPR, their affiliate companies andspecial purpose companies (SPCs) in which the sponsors have made equity investment.

Major Properties Acquired from Respective Sponsors, Etc.
Tokyo
TatemonoCo., Ltd.

Tokyo Realty Investment Management, Inc.

Otemachi Tower

Support on human resources through dispatching personnel to TRIM andother measuresProvision of know-how on real estate management in general, including
tenant leasing and technical supportSupply of properties and provision of information on property acquisitions

Fund procurement support including funding through debt finance

40%

20%

20%

10%

(land with land leasehold)

Yurakucho Ekimae Bldg.
(Yurakucho Itocia)

Shinjuku Sanchome
East Bldg.

Meiji
Yasuda Life
Insurance
Company
JPR Ningyocho Bldg.

*Figures represent the ratio of shares owned by the respective sponsor companies against
the number of shares outstanding of the Asset Manager.

Kawasaki Dice Bldg.

Taisei
Corporation
Rise Arena Bldg.

10%

Olinas Tower

Sompo
Japan
Insurance
Inc.
Sompo Japan Sendai
Bldg.

JPR Hakata Bldg.

Yasuda Real
EstateTanashi Asta

JPR Crest Takebashi
Bldg.

32

Characteristics of JPR

Governance System Established with Focus on Independence Securing independence of JPR’s Executive Officer•

Not only the supervising officers but also the executive officer of JPR (investment corporation) isbanned from concurrently serving as directors of the Asset Manager. Human resources with highexpertise, such as attorneys and accountants, have been appointed as the officers so that theindependence of JPR is firmly secured.

Concurrent Services as Directors of AssetManagers and Executive Officers of Investment
Corporations among J-REITs(as of December 31, 2013)

 Independence of Asset Manager from Sponsors•

The sponsors comprise five companies, with the shareholder composition of the largest equity holder(Tokyo Tatemono) standing at 40%. As such, the structure allows mutual checks among the sponsors.

•

TRIM President and CEO has assumed office after having his employment transferred to TRIM,
instead of being seconded from the sponsor company he belonged to.

•

The position of Compliance Office general manager in charge of internal control is assumed by acareer employee.

•With a high proportion of career employees, the personnel structure of TRIM also serves to help
secure independence as an asset manager.

15
26
investment
corporations
withexecutive
officers
servedconcurrently

investment
corporations
withindependent
executive
officers

37%

63%

 Decision Making Based on Stringent Processes
Property acquisitions from the sponsors are screened and verified by the Compliance Committee, inwhich an outside attorney participates as a special member. The Committee employs unanimous vote,not majority vote, for approvals in principle.

Investment Subcommittee

Due Diligence Subcommittee

Prior review / approval oftransaction with related parties

Final decision on
acquisition

Decision making on
acquisition over certain amountConcludeagreement

AcquisitionDue diligence

TRIM’s Board of
Directors

Decision on
acquisition policy

Investment Subcommittee

Review, screening

Compliance Committee
JPR’s Board of
Directors

Proposal, planning

Compliance Subcommittee

Governance System of Asset Manager

Investment Management
Department•

33

Appendix

Appendix

Demand and Supply of Blue-Chip Properties in the Transaction Market Grew Tighter Property acquisition values by J-REITs has shown an expanding trend, with an increasing trend in the acquisitions of retail properties andlogistics facilities, etc.
 Information on superior office properties in Tokyo has remained to be limited, resulting in a relative increase in the ratio of retail properties aswell as office properties in regional cities investigated

Changes in Number of Cases with Property Information
Obtained and Investigated by TRIM

Changes in Acquisition Values by J-REITs by Property Type(JPY trillion)

Others2.5

Logistics

RetailResidential(Cases)

OfficeNumber of cases with information obtained
Number of cases with information investigated

150

2.0

100

1.5
1.0

50

0.5
0.0

0
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

17th Period
Jun. 2010

18th Period
Dec. 2010

19th Period
Jun. 2011

20th Period
Dec. 2011

21st Period
Jun. 2012

22nd Period
Dec. 2012

23rd Period
Jun. 2013

24th Period
Dec. 2013(Note) Prepared by TRIM based on the data publicized by The Association for Real Estate Securitization (ARES)

Changes in Acquisition Cap Rates of Office Properties in Tokyo (J-REITs)(%)

8

The acquisition cap rates of office properties, which had been mostly
around mid-5% in 2010, fell significantly to lower mid-4% level in 2013

7
6
5
4
3
2
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
(Note) The indicated cap rates are for the office properties located in 23 Wards of Tokyo and acquired by J-REITs,
and have been prepared by TRIM based on the press releases by respective J-REITs.

Changes in Number of Cases with Property Information Obtained
and Investigated by TRIM
(End of 23rd Period)
Retailproperties
19%

Office properties
in other cities
18%(End of 24th Period)

Office properties
in Tokyo
63%
11%
4%

85%

Retailproperties
21%

Office properties
in Tokyo
58%

27%
6%

67%

Office properties
in other cities
21%

Outer ring: number of cases with information obtained
Inner ring: number of cases with information investigated35Appendix

Vacancy Rate of Office Properties Remained on a Downward Trend
 The vacancy rate of office properties in Tokyo took a downward turn after peaking at the end of June 2012, and has fallen sharply since July 2013
due to restraint on new supply

Changes in Supply and Demand Trend and Vacancy Rate of Office
Properties in Tokyo

Changes in Vacancy Rate of Office Properties in Tokyo(%)

Miki Shoji

Sanko Estate

CBRE

10
9.4

Drop over a year and six months(thousand tsubos)

7.3

7.8

7.3 (-2.1)(model A)
New demand of 150,000 tsubos per year
(model B)
New demand of 200,000 tsubos per year
(%)

10
4.9

4.9

5

5.3

200

8

Simulation assumptions

Forecast

6.0

250

8.2

3.5

2.9

150

0

100

7

-5

6.5 (-1.7)

50
0

6

5

8.7

300

9

New supply (left axis)
New demand (actual results; left axis)
New demand (model A)
New demand (model B)
Vacancy rate (model A)
Vacancy rate (model B)
Vacancy rate (actual results; right axis)

6.1 (-1.7)

The above figures inparentheses represent
the rate of drop since theend of June 2012

40

2012

2013

2014

2015

2016

-10

(Actual results for 2001 through 2011)(thousand tsubos)

(%)

450

10

300

5

150

0

0

-5

Dec. 2010 Jun. 2011 Dec. 2011 Jun. 2012 Dec. 2012 Jun. 2013 Dec. 2013
-150
(Note) Prepared by TRIM based on the figures for the five central wards of Tokyo announced
by respective companies.

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

-10

(Note) Actual results through 2013 are based on the Office Report (Tokyo CBDs) publicized by Miki Shoji Co., Ltd.,and new supply as well as new demand (model A and model B) and vacancy rate (model A and model B)
in 2014 and thereafter have been prepared based on surveys and simulations conducted by TRIM.

36

Appendix

Fund Summary
23rd Period
Jun. 2013

24th Period
Dec. 2013

23rd Period
Jun. 2013

24th Period
Dec. 2013

1 Operating revenue

13,278 mn yen

13,591 mn yen

29 Number of units outstanding

825,000 units

825,000 units

2 Rent revenue – real estate

13,278 mn yen

13,591 mn yen

30 Total cash distributions

4,975 mn yen

4,954 mn yen

3 Expenses related to rent business

6,208 mn yen

6,534 mn yen

31 Distribution per unit (fiscal period)

6,031 yen

6,006 yen

4 Profits

7,070 mn yen

7,056 mn yen

32 Distribution per unit (annualized)

12,161 yen

11,914 yen

5 Depreciation

1,883 mn yen

1,869 mn yen

33 Net assets per unit

238,929 yen

238,903 yen

6 Net income

4,974 mn yen

4,954 mn yen

34 FFO per unit (annualized)

16,764 yen

16,405 yen

7 Total assets

409,715 mn yen

413,974 mn yen

8 Short-term loans payable- mn yen

2,000 mn yen

9 Long-term loans payable

130,658 mn yen

10 Investment corporation bonds

56,500 mn yen

11 Capital expenditure

35 AFFO payout ratio
36 Investment unit price

79.4%

82.9%

281,100 yen

326,500 yen

133,259 mn yen

37 PER

23.12 times

27.41 times

56,500 mn yen

38 FFO multiple

16.77 times

19.90 times

39 PBR

1.18 times

1.37 times

4.3%

3.6%

171,268 mn yen

177,909 mn yen(immediately before the ex-rights date)

594 mn yen

845 mn yen

12 Net assets

197,116 mn yen

197,095 mn yen

40 Distribution yield (%)

13 Unitholders’ capital

192,044 mn yen

192,044 mn yen

41 NAV

14 NOI

8,953 mn yen

8,925 mn yen

42 NAV per unit

207,597 yen

215,648 yen

15 NOI yield (based on acquisition price)

4.5%

4.4%

43 NAV multiple

1.4 times

1.5 times

16 NOI yield (based on book value)

4.7%

4.5%

44 Appraisal value

365,214 mn yen

376,995 mn yen

17 NOI yield (based on appraisal value)

4.9%

4.7%

45 Book value

386,086 mn yen

391,225 mn yen

18 Implied cap rate

4.2%

3.9%

46 Unrealized gains or losses-20,872 mn yen-14,230 mn yen

19 FFO (annualized)

13,830 mn yen

13,534 mn yen

47 PML value

3.4%

3.5%

20 AFFO

6,263 mn yen

5,977 mn yen

48 Acquisition price398,640 mn yen

404,720 mn yen

21 EBITDA

8,268 mn yen

8,237 mn yen

6.3 times

6.1 times

49 Operating revenue

13,470 mn yen

13,630 mn yen

23 LTV (based on total assets)

45.7%

46.3%

50 Net income

4,785 mn yen

4,991 mn yen

24 LTV (based on gains or losses from valuation)

48.1%

48.0%

51 Distribution per unit (fiscal period)

5,800 yen

6,050 yen

25 LTV (based on unitholders’ capital)

49.4%

50.0%

52 Distribution per unit (annualized)

11,505 yen

12,200 yen

26 Ratio of long-term interest-bearing debts

98.2%

97.2%

27 Average interest rate of interest-bearing debts

1.57%

1.53%

28 Average maturity of interest-bearing debts

3.3 years

3.5 years

22 DSCR

Next fiscal period (forecast)37

Appendix

Track Records of JPR
Changes in Distribution per Unit
(JPY/ unit)

8,000

6,912

6,873
5,738

6,000
4,000

6,081

6,671

6,370

6,509

6,411

6,873

6,996

6,671

7,122

7,092

6,933

6,770
5,680

5,611

5,876

6,430

6,093

6,031

6,006

3,731
2,545

2,000

Average distribution per unit from the 1st through 24th fiscal periods: JPY 6,168

Changes in Average Occupancy Rate
(%)

100

95.2

96.1
94.0

93.8

95

92.6

93.1

94.3

97.7

98.3

94.9

99.0

98.7

98.0

97.0

96.2

96.4

96.1
93.6

94.0

95.0
94.8

94.4

95.6

96.9

90

Average of period-average occupancy rate from the 1st through 24th fiscal periods: 95.7%

85

Changes in Operating Revenue(JPY mn)

16,00014,00012,00010,0008,000

14,330

6,000
4,000
2,000
0

4,469

4,972

5,264

6,421

6,790

7,685

8,503

8,587

8,588

9,088

11,171
10,056 10,449 10,830

11,493

12,314 11,870 11,529 11,772 12,345 12,963

13,278 13,591

1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
20th
21st
22nd
23rd
24th
Jun. 2002 Dec. 2002 Jun. 2003 Dec. 2003 Jun. 2004 Dec. 2004 Jun. 2005 Dec. 2005 Jun. 2006 Dec. 2006 Jun. 2007 Dec. 2007 Jun. 2008 Dec. 2008 Jun. 2009 Dec. 2009 Jun. 2010 Dec. 2010 Jun. 2011 Dec. 2011 Jun. 2012 Dec. 2012 Jun. 2013 Dec. 201338

Appendix

NOI Yield by Property (24th Fiscal Period)
Portfolio NOI: 4.4%
02

4

Kanematsu Bldg.

Office building NOI: 4.3%

68

10 (%)

0

3.2

2

4

Entire portfolio: 4.4%
6.1
5.8

JPR Yokohama Nihon Odori Bldg.

5.5

Shin-Kojimachi Bldg.

8.5

Shinyokohama 2nd Center Bldg.

5.6

4.9

Kawaguchi Center Bldg.

JPR Crest Takebashi Bldg.

2.0
7.1

JPR Ueno East Bldg.

MS Shibaura Bldg.

Greater Tokyo

4.0

Gotanda First Bldg.

5.8

Fukuoka Bldg.

3.3

JPR Ichigaya Bldg.

4.5

Oval Court Ohsaki Mark West

6.8

Shinjuku Square Tower

5.4

Tachikawa Business Center Bldg.

5.6

Rise Arena Bldg.

4.5

Yume-ooka Office Tower

4.7

Olinas Tower
Tokyo Tatemono Yokohama
Building

6.4
7.6

Omiya Prime East

2.7

BYGS Shinjuku Bldg.

9.9

Tanashi ASTA

4.0

7.1

Cupo-la Main Bldg.

7.7
4.4

JPR Musashikosugi Bldg.

Shinjuku Center Building

2.6

5.2

Musashiurawa Shopping Square

0.4

3.7

Kawasaki Dice Bldg.

Shinagawa Canal Building

4.1

Rokubancho Building

7.5

JPR Harajuku Building

Niigata Ekinan Center…

3.8

8.0

Tokyo Tatemono…
Tokyo Tatemono Kyobashi Building

2.0
6.1

JPR Sendagaya Building

3.6

Science Plaza – Yonbancho Plaza

6.0

Shibadaimon Center Building

6.2

JPR Shibuya Tower Records Bldg.

4.7
2.0

JPR Jingumae 432

1.9

6.2

Sompo Japan Sendai…
3.9

JPR Daikanyama

6.5

JPR Naha Bldg.

2.5

Ginza Sanwa Building
Otemachi Tower (land with land leasehold)

4.9

JPR Hakata Bldg.

JPR Nihonbashi-horidome Building

Other Cities

Central Tokyo

Across Shinkawa Bldg. Annex

Minami Azabu Building

10 (%)

8

JPR Chiba Bldg.

4.0

JPR Ningyo-cho Bldg.

64.0

Arca East

Entire portfolio: 4.4%
Kanematsu Bldg. Annex

Retail property NOI: 4.9%

7.5

Sompo Japan…

8.4

Tenjin 121 Bldg.
JPR Dojima Bldg.
JPR Hakata-chuo Bldg.
JPR Nagoya Fushimi…

4.4
3.3
3.6
3.8

Yakuin Business…

5.5

JPR Umeda Loft Bldg.
Benetton…

Shinjuku Sanchome East Bldg.

3.4

Housing Design…

Yurakucho Ekimae Building

3.2

JPR Chayamachi …

5.3
3.7
5.6
3.5

39

Appendix

Contracting Status of Tenants by Property (24th Fiscal Period)

Central Tokyo

Net Increase / Decrease of
Floor Space
Kanematsu Bldg.

-402

Shin-Kojimachi Bldg.

-295

JPR Crest Takebashi Bldg.

-629

MS Shibaura Bldg.

980

Shinjuku Square Tower-289

BYGS Shinjuku Bldg.

-997

Across Shinkawa Bldg. Annex-200

Shinjuku Center Building

58

-396

101

-794

165
980
-289

-1,669

672
-200
-21

79
3,406
90

90

Tokyo Tatemono Kyobashi Building -2,643

Greater Tokyo(㎡)

Occupied Floor Space-402

Minami Azabu Building 3,406
JPR Harajuku Building

Other Cities

Vacated Floor Space

Science Plaza – Yonbancho Plaza-56

JPR Jingumae 432-138

JPR Chiba Bldg.

-155

Shinyokohama 2nd Center Bldg.

329

Kawaguchi Center Bldg.

137

JPR Ueno East Bldg.

371

Tachikawa Business Center Bldg.

-149

Yume-ooka Office Tower

491-3,443

800
-56
-411

329
137
371
-674

0

Kawasaki Dice Bldg.

-950

Tokyo Tatemono Honmachi Bldg.

-50

JPR Hakata Bldg.

244

JPR Naha Bldg.

81

JPR Dojima Bldg.

204

JPR Hakata-chuo Bldg.

-418

Yakuin Business Garden-855-5,000

525
-260

750

-1,885

Olinas Tower -1,173
Tokyo Tatemono Yokohama Building

274

-155

711
-74

74

-4,275

3,324
-50
244
81
204
-418
-855

-4,000-3,000-2,000-1,000

0

1,000

3,000

4,000
(㎡)

(Note 1) The above graphs exclude properties at which there were no changes in tenants during the 24th fiscal period, but include
changes in tenants from the amendment of lease contracts, etc.
(Note 2) The changes in occupied and vacated floor spaces at Kawasaki Dice Bldg. were due to a change in the contract format(changed from blanket contract to individual contract for the first through third floors)

2,000

VacatedFloor Space
7,214

Net Increase / Decrease

Office (Central Tokyo)

Occupied
Floor Space
6,293

Office (Greater Tokyo)

3,172

3,458

-286

Office (Other cities)

529

1,323

-794

3,324

4,331

-1,007of Floor Space-921

RetailTotal

13,31916,326-3,007(When excluding Kawasaki Dice Bldg.)(9,994)(12,051)(-2,057)

40

Appendix

Status of Tenant Diversification in the 24th Fiscal Period
Tenant Ratio by Industry(Office Properties Only, Based on Leased Floor Space)
Medical andwelfare2.4%(As of end of 24th Period)

Transportation
2.1%

20 Largest Tenants (Based on Leased Floor Space)
Rank

1

Services
24.7%

Finance andinsurance
9.7%
Information andcommunication
17.2%

Real estate
10.0%

Tenant Name

Others0.4%

Public services
3.9%
Construction
7.4%

OfficeRank

Wholesale andretail10.0%
Manufacturing
12.3%

1

Tokyo Tatemono Co., Ltd.

Name of Occupying Property

Use

Shinjuku Square Tower

OfficeShinjuku Center Building

OfficeOlinas Tower

OfficeLeased Space at
End of 24th
Period (m2)

Ratio to Total
Leased Space at
End of Period

37,166.37

8.2

Kawasaki Dice Bldg.

RetailTokyo Tatemono Honmachi Bldg.

OfficeHousing Design Center Kobe

Retail

35,444.13

7.8

Retail31,121.71

6.9

2

-

3

-

Seiyu GK

Tanashi ASTA

4-

Ito-Yokado Co., Ltd.

JPR Musashikosugi Bldg.

Retail

19,740.95

4.4

5

-

JPR Umeda Loft Bldg.

Retail

18,586.97

4.1

6

2

YK Tokyo Prime Stage

Otemachi Tower (land with land leasehold)

Office11,034.78

2.4

7

-

Olympic Group Corporation

Musashiurawa Shopping Square

Retail

9,558.51

2.1

8

-

Tower Records Japan Inc.

JPR Shibuya Tower Records Bldg. Retail8,076.85

1.8

Office7,941.96

1.8

Rise Arena Bldg.

Office6,023.39

1.3

5,963.00

1.3

ABC Development Corporation

The LOFT Co., Ltd.

Kawaguchi Center Bldg.

Ratio of Tenants Occupying at Least 1% Each
(Office Properties Only, Based on Leased Floor Space)

93

Sompo Japan Insurance Inc.

(As of end of 24th Period)

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

10

4

11

-

Tenant occupyingat least 1%

The Maruetsu, Inc.

Cupo-la Main Bldg.

Retail12-

BENETTON JAPAN CO., LTD.

Benetton Shinsaibashi Bldg.

Retail5,303.98

1.2

27.1%

13

-

Nitori Holdings Co., Ltd.

Musashiurawa Shopping Square

Retail

5,285.40

1.2

Office5,146.03

1.1

Taisei-Yuraku Real Estate Co.,Ltd.

Shinagawa Canal Building

Tenant occupying
less than 1%

14

5

Level-5 Inc.

72.9%

15

6

Hitachi Systems, Ltd.

JPR Nagoya Fushimi Bldg.

Office4,904.64

1.1

16

7

ATM Japan, Ltd.

Olinas Tower

Office4,255.56

0.9

17

8

Gotanda First Bldg.

Office4,236.65

0.9

18

9

Canon Imaging Systems Inc.

Niigata Ekinan Center Bldg.

Office4,078.97

0.9

19

10

Kajima Corporation

Omiya Prime East

Office4,005.05

0.9

20

11

Mitsubishi Electric Information Systems Corporation MS Shibaura Bldg.

Office3,922.74

0.9

20

11

Deloitte Touche Tohmatsu LLC

Office3,922.74

0.9(Note) “Tenant Ratio by Industry” indicates the ratios of total leased spaces by relevant
category to the total leased spaces of respective properties comprising the portfolio.
“Ratio of Tenants Occupying at Least 1% Each” indicates the ratios of total leased
spaces by tenants occupying at least 1% and less than 1% each, respectively, tothe total leased spaces of office properties. Furthermore, with regards to tenants
conducting sublease, the ratio is calculated based on the floor spaces subleased totheir sublessees.

CMIC HOLDINGS Co., Ltd.

Yakuin Business Garden

MS Shibaura Bldg.

41

Appendix

Appraisal Value by Property for the 24th Fiscal Period(JPY mn, %)Property nameAcquisitionPrice

End of 23rd
PeriodAppraisal
Yield
Value

Book Value at
End of 24th
PeriodEnd of 24th
PeriodAppraisal
Yield
Value

ChangeAppraisal
Value

Yield

Property name

Kanematsu Bldg.

16,276

11,7004.3

14,768

11,700

4.2

-

-0.1

Olinas Tower

Kanematsu Bldg. Annex

2,874

2,250

4.7

2,447

2,280

4.6

30

-0.1

JPR Ningyo-cho Bldg.

2,100

2,200

5.0

1,968

2,260

4.9

60

Shin-Kojimachi Bldg.

2,420

2,970

4.7

2,395

3,000

4.6

JPR Crest Takebashi Bldg.

4,000

3,090

4.6

3,392

2,840

MS Shibaura Bldg.

11,20011,300

4.9

10,997

Gotanda First Bldg.

2,920

2,700

4.9

Fukuoka Bldg.

2,920

2,790

4.5

JPR Ichigaya Bldg.

5,100

4,660

Oval Court Ohsaki Mark West

3,500

4,370

Shinjuku Square Tower

10,180

7,361

4.2

8,945

BYGS Shinjuku Bldg.

15,121

13,4004.5

15,688AcquisitionPrice

End of 23rd
PeriodAppraisal
Yield
Value

Book Value at
End of 24th
PeriodEnd of 24th
PeriodAppraisal
Yield
Value

ChangeAppraisal
Value

Yield

31,30032,700

4.6

29,32733,400

4.5

700

-0.1

Tokyo Tatemono Yokohama Building

7,000

6,880

5.6

6,939

6,970

5.5

90

-0.1

-0.1

Omiya Prime East

6,090

6,270

5.7

6,238

6,370

5.6

100

-0.1

30

-0.1

Tanashi ASTA

10,20012,5005.7

7,673

12,500

5.7

-

-

4.5

-250

-0.1

Cupo-la Main Bldg.

2,100

2,540

5.8

1,854

2,540

5.8

-

-

11,000

4.9

-300

-

JPR Musashikosugi Bldg.

7,260

5,140

5.2

7,195

5,260

5.3

120

0.1

2,676

2,700

4.8

-

-0.1

2,912

2,790

4.5

-

-

4.5

5,268

4,640

4.5

-20

-

4.7

3,055

4,460

4.6

90

-0.1

7,646

4.3

285

0.1

13,600

4.4

200

-0.1

Musashiurawa Shopping Square

4,335

3,990

5.4

3,992

4,090

5.4

100

-

Kawasaki Dice Bldg.

15,08014,4004.7

14,266

14,800

4.6

400

-0.1

Greater Tokyo

122,891

122,340-

112,879

124,320

-

1,980

-

Niigata Ekinan Center Bldg.

2,140

2,180

6.7

1,762

2,230

6.6

50

-0.1

Tokyo Tatemono Honmachi Bldg.

4,150

3,220

5.7

4,146

3,230

5.7

10

-

JPR Hakata Bldg.

2,900

2,780

6.0

3,134

2,640

5.9

-140

-0.1

Across Shinkawa Bldg. Annex

710

813

5.4

609

809

5.4

-4

-

JPR Naha Bldg.

1,560

1,370

6.7

1,405

1,350

6.6

-20

-0.1

Shinjuku Center Building

21,00012,8004.2

22,006

12,8004.2--

Sompo Japan Sendai Bldg.

3,150

3,280

6.3

2,307

3,280

6.3

-

-

Minami Azabu Building

3,760

2,290

5.4

3,918

2,330

5.2

40

-0.2

Sompo Japan Wakayama Bldg.

1,670

1,580

7.2

1,263

1,580

7.2

-

-

Shinagawa Canal Building

1,870

1,800

4.9

1,800

1,780

4.8

-20

-0.1

Tenjin 121 Bldg.

2,810

2,060

5.7

2,247

2,080

5.6

20

-0.1

Rokubancho Building

2,800

3,120

7.2

2,887

3,180

7.1

60

-0.1

JPR Dojima Bldg.

2,140

2,090

5.4

2,196

2,020

5.5

-70

0.1

JPR Harajuku Building

8,400

6,760

4.4

8,753

6,980

4.5

220

0.1

JPR Hakata-chuo Bldg.

1,920

1,640

5.8

1,866

1,630

5.7

-10

-0.1

Tokyo Tatemono Kyobashi Building

5,250

4,580

4.9

5,343

4,950

4.8

370

-0.1

JPR Nagoya Fushimi Bldg.

4,137

2,800

6.2

4,115

2,830

6.1

30

-0.1

JPR Nihonbashi-horidome Building

5,100

5,760

4.8

5,033

5,920

4.9

160

0.1

Yakuin Business Garden

10,996

11,300

5.4

11,231

11,400

5.3

100

-0.1

JPR Sendagaya Building

15,05010,6004.3

15,173

11,100

4.3

500

-

JPR Umeda Loft Bldg.

13,00013,600

4.6

12,514

13,800

4.8

200

0.2

Ginza Sanwa Building

3,400

3,250

3.8

3,643

3,350

3.9

100

0.1

5,430

4,360

4.8

5,197

4,360

4.8

-

-

Otemachi Tower (land with land leasehold)

36,00036,8003.6

38,38837,900

3.5

1,100

-0.1

7,220

6,460

6.3

6,526

6,470

6.3

10

-

JPR Shibuya Tower Records Bldg.

12,00012,300

4.3

11,61912,600

4.2

300

-0.1

Benetton Shinsaibashi Bldg.
Housing Design Center Kobe
JPR Chayamachi Building

6,000

4,610

5.0

5,993

4,640

5.0

30

-

JPR Daikanyama

2,160

1,450

4.3

2,194

1,460

4.2

10

-0.1

Other Cities

69,223

63,330-65,90863,540-210-

JPR Jingumae 432

4,275

3,320

4.0

4,327

3,320

3.9

-

-0.1

Shinjuku Sanchome East Bldg.

2,740

2,440

4.3

2,706

2,500

4.2

60

-0.1

Total

398,640

365,214-385,075

370,485

-

5,271

-

Yurakucho Ekimae Building

3,400

2,670

4.1

3,365

2,730

4.0

60

-0.1

Central Tokyo

206,526

179,544-

206,287

182,625

-

3,081

-

Property Acquired in the 24th Period

Arca East

5,880

5,980

4.6

4,516

6,040

4.6

60

-

Science Plaza – Yonbancho Plaza

2,660

-

-

2,700

2,780

4.6

-

-

JPR Chiba Bldg.

2,350

1,640

6.1

2,375

1,670

6.0

30

-0.1

Shibadaimon Center Building

3,420

-

-

3,449

3,730

4.6

-

-

JPR Yokohama Nihon Odori Bldg.

2,927

2,380

5.7

2,619

2,380

5.6

-

-0.1

6,080

-

-

6,149

6,510

-

-

-

Yokohama No. 2 Center Bldg.

1,490

1730

6.1

1,482

1,700

6.1

-30

-

Kawaguchi Center Bldg.

8,100

7,400

6.0

7,125

7,400

5.9

-

-0.1

JPR Ueno East Bldg.

3,250

4,420

5.0

3,080

4,430

4.9

10

-0.1

Tachikawa Business Center Bldg.

3,188

2,890

5.5

2,968

2,910

5.4

20

-0.1

Rise Arena Bldg.

5,831

6,240

5.1

5,503

6,450

4.9

210

-0.2

Yume-ooka Office Tower

6,510

5,240

5.6

5,718

5,410

5.5

170

-0.1

Total

Difference between Appraisal Value and Book
Value at the end of 24th fiscal period-14,230(Note) The yield is the capitalization rate based on the Direct Capitalization Method.

42

Appendix

Status of Unitholders in the 24th Fiscal Period■Number of Units by Investor TypeEnd of 23rd Period
Jun. 30, 2013
No. of units■Top 10 of Principle Unitholders
End of 24th Period
Dec. 31, 2013
No. of units

Top 10 of Principle Unitholders

Share
(%)

Number ofUnits Owned

Share
(%)

Japan Trustee Services Bank, Ltd. (Trust Account)

175,60321.3

193,340

23.4

0.1

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

44,644

5.4

51,876

6.3

43,3295.3

51,822

6.3

No. of units

Share (%)

51,023

6.2

42,326

5.1-8,697-1.1

Financial institutions

459,64655.7

488,650

59.2

29,004

3.5

-

-

571

0.1

571

77,192

9.4

79,387

9.6

2,195

0.3

Trust & Custody Services Bank, Ltd.

313,652

38.0

343,97341.7

30,321

3.7

The Nomura Trust and Banking Co., Ltd.

46,982

5.7

45,5495.5-1,433-0.2

Nonlife insurance companies

1,654

0.2

3,448

0.4

1,794

0.2

Credit unions (Shinkin banks)

9,963

1.2

9,856

1.2

-107

-0.0

10,203

1.2

5,866

0.7

-4,337

Regional banks
Trust banks
Life insurance companies

Others(Securities Investment Trust Account)(Investment Trust Account)

44,503

5.4

41,571

5.0

Tokyo Tatemono Co., Ltd.

29,3003.6

29,300

3.6

Kawasaki Gakuen

25,0003.0

25,0003.0-0.5

Meiji Yasuda Life Insurance Company

24,0002.9

24,0002.9

21,733

2.6

13,920

1.7

9,579

1.2

11,419

1.4

Other domestic companies

81,343

9.9

82,717

10.0

1,374

0.2

Nomura Bank (Luxembourg) S. A.

Foreign investors

209,07825.3

189,869

23.0-19,209-2.3

State Street Bank West Client Treaty

Securities companies

23,9102.9

21,4382.6-2,472-0.3

State Street Bank West Pension Fund Clients Exempt

825,000

100.0

825,000

100.0

-

-

Total

■Number of Unitholders by Investor TypeEnd of 23rd Period
Jun. 30, 2013
Number of
Share (%)
Unitholders

Total

End of 24th Period
Dec. 31, 2013
Number of
Share (%)
Unitholders

Increase/decrease
Number ofUnitholders(%)

Share (%)

100

95.4

12,21394.8-1,111

-0.1

90

121

0.9

122

0.9

1

0.0

-

-

1

0.0

1

0.0

Regional banks

45

0.3

46

0.4

1

0.0

Trust banks

12

0.1

12

0.1

-

-

8

0.1

8

0.1

-

-

50

Nonlife insurance companies

3

0.0

4

0.0

1

0.0

40

Credit unions (Shinkin banks)

34

0.2

34

0.3

-

-

30

Others

19

0.1

17

0.1

-2

-0.0

Other domestic companies

213

1.5

209

1.6

-4

-0.0

Foreign investors

285

2.0

311

2.4

26

0.0

Securities companies

22

0.2

22

0.2

-

-

13,965100.0

12,877100.0-1,088-0.1

Financial institutions
Major banks with national networks

Life insurance companies

Total

9,406

1.1

9,734

1.2

427,09751.8

451,982

54.8■Unitholder Ratio (by Number of Investment Units)

13,324

Individuals

End of 24th Period
Dec. 31, 2013

Number ofUnits Owned

Share (%)

Individuals

Major banks with national networks

Share (%)

End of 23rd Period
Jun. 30, 2013

Increase/decrease

80
70
60

Foreign Investors

28.0

11.6

53.0

Other Domestic Companies

Financial Institutions

Individuals

25.3

25.4

23.4

25.9

25.3

23.0

11.5

11.7

11.3

10.3

9.9

10.0

55.9

55.5

57.6

57.4

58.6

61.8

20
10
0

7.4

7.3

7.3

7.7

6.5

6.2

18th

19th

20th

21st

22nd

23rd

24th

Dec. 2010

Jun. 2011

Dec. 2011

Jun. 2012

Dec. 2012

Jun. 2013

Dec. 2013

5.1

43

Appendix

Portfolio List (Central Tokyo)

A-1 Kanematsu Bldg.

A-2 Kanematsu Bldg. Annex

A-14 Shinjuku Center Building

A-24 Science Plaza– Yonbancho Plaza

A-25 Shibadaimon Center
Building

A-3 JPR Ningyo-cho Bldg.

A-4 Shin-Kojimachi Bldg.

A-5 JPR Crest Takebashi Bldg.

A-6 MS Shibaura Bldg.

A-7 Gotanda First Bldg.

A-8 Fukuoka Bldg.

A-9 JPR Ichigaya Bldg.

A-10 OvalCourt Ohsaki MarkWest

A-11 Shinjuku Square Tower

A-12 BYGS Shinjuku Bldg.

A-13 Across Shinkawa Bldg.
Annex

A-15 Minami Azabu Building

A-16 Shinagawa Canal Building

A-17 Rokubancho Building

A-18 JPR Harajuku Building

A-19 Tokyo Tatemono Kyobashi
Building

A-20 JPR Nihonbashi-horidome
Building

A-21 JPR Sendagaya Building

A-22 Ginza Sanwa Building

A-1 JPR ShibuyaTower RecordsBldg.

A-2 JPR Daikanyama

A-3 JPR Jingumae 432

A-4 Shinjuku Sanchome East
Bldg.

A-5 Yurakucho Ekimae Building(Yurakucho Itocia)

A-23 Otemachi Tower (land with land leasehold)44

Appendix

Portfolio List (Greater Tokyo and Other Cities)

B-1 Arca East Bldg.

B-2 JPR Chiba Bldg.

B-3 JPR Yokohama Nihon
Odori Bldg.

B-5 Shinyokohama 2nd Center

B-6 Kawaguchi Center Bldg.

B-7 JPR Ueno East Bldg.

B-8 Tachikawa Business Center
Bldg.

B-9 Rise Arena Bldg.

B-11 Olinas Tower

B-12 Tokyo Tatemono
Yokohama Building

B-13 Omiya Prime East

B-1 Tanashi ASTA

B-3 Cupo-la Main Bldg.

B-4 JPR Musashikosugi Bldg.

B-5 Musashiurawa Shopping
SquareB-6 Kawasaki Dice Bldg.

C-1 Niigata Ekinan Center
Bldg. .

C-4 Tokyo Tatemono
Honmachi Bldg.

C-7 JPR Hakata Bldg.

C-7 JPR Hakata Bldg.

C-12 Sompo Japan Sendai
Bldg.

C-13 Sompo Japan Wakayama Bldg.

C-14 Tenjin 121 Bldg.

C-17 JPR Dojima Bldg.

C-19 JPR Nagoya Fushimi
Bldg.

C-20 Yakuin Business Garden

C-1 JPR Umeda Loft Bldg

C-3 Benetton Shinsaibashi
Bldg.

C-4 Housing Design Center Kobe

C-5 JPR Chayamachi Building

B-10 Yume-ooka Office Tower

C-18 JPR Hakata-chuo Bldg.

45

Appendix

Portfolio Map
ACentral Tokyo Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards

Geographical distribution(End of 24th Period; based on acquisition price)
Other cities:

Ueno

15 properties
JPY 69.2 billion(17.1%)

Shinjuku Ward

A-11

Kinshicho

Ichigaya

A-12

A-24

A- 4

Sendai

C-12

Sompo Japan Sendai Bldg.

Niigata

C-1

Niigata Ekinan Center Bldg.

NagoyaC-19

JPR Nagoya Fushimi Bldg.

Wakayama

C-13

Sompo Japan Wakayama Bldg.

Osaka

C-4

Tokyo Tatemono Honmachi Bldg.

C-17

JPR Dojima Bldg.

C-1

JJPR Umeda Loft Bldg.

C-3

Benetton Shinsaibashi Bldg.

C-5

JPR Chayamachi Building

Kobe

C-4

Housing Design Center Kobe

FukuokaC-7

JPR Hakata Bldg.

C-14

Tenjin 121 Bldg.

C-18

JPR Hakata-chuo Bldg.

C-20

Yakuin Business Garden

C-9

JPR Naha Bldg.

A-20

A-9

Chiyoda Ward

A-17

Other Cities

C

30 properties
JPY 212.6 billion(52.5%)

A-5

Shinjuku
A-14

Central Tokyo:

A-3

A-4
A-23

A-21

Tokyo

A-13

A-8

Shibuya WardA- 5

Harajuku

A-3

A-19
A-22

A-18

A-1

A-25

ShibuyaA-1
A-2

Chuo Ward

Greater Tokyo:
17 properties
JPY 122.8 billion(30.4%)

Minato Ward

A-2

Tamachi

A-15

A-6
GotandaShinagawa

A-10

A-16

A-7
OhsakiShinagawa Ward
OimachiOkinawa

B Greater Tokyo
A-1

Kanematsu Bldg.

A-16

Shinagawa Canal Building

A-2

Kanematsu Bldg. Annex

A-17

Rokubancho Building

A-3

JPR Ningyo-cho Bldg.

A-18

JPR Harajuku Building

A-4

Shin-Kojimachi Bldg.

A-19

Tokyo Tatemono Kyobashi Building

A-5

JPR Crest Takebashi Bldg.

A-20

JPR Nihonbashi-horidome Building

A-6

MS Shibaura Bldg.

A-21

JPR Sendagaya Building

A-7

Gotanda First Bldg.

A-22

Ginza Sanwa Building

A-8

Fukuoka Bldg.

A-23

Otemachi Tower (land with land leasehold)All other areas of Tokyo, Chiba, Kanagawa and Saitama Prefectures
Omiya

B-13

B-5
B-6

SAITAMA

Musashiurawa

B-3

Kawaguchi

B-1

Arca East

B-11

B-2

JPR Chiba Bldg.

B-12

B-3

JPR Yokohama Nihon Odori Bldg..

B-13

Olinas Tower
Tokyo Tatemono
Yokohama Building
Omiya Prime East

B- 5

Shinyokohama 2nd Center Bldg.

B-1

Tanashi ASTA

B-6

Kawaguchi Center Bldg.

B-3

Cupo-la Main Bldg.

B-7

JPR Ueno East Bldg.

B-4

JPR Musashikosugi Bldg.
Musashiurawa Shopping
SquareKawasaki Dice Bldg.

A-9

JPR Ichigaya Bldg.

A-24

Science Plaza・Yonbancho Plaza

A-10

OvalCourt OhsakiMark West

A-25

Shiba Daimon Center Bldg.

A-11

Shinjuku Square Tower

A-1

JPR Shibuya Tower Records Bldg.

A-12

BYGS Shinjuku Bldg.

A-2

JPR Daikanyama

A-13

Across Shinkawa Bldg. Annex

A-3

JPR Jingumae 432

B- 8

Tachikawa Business Center Bldg.

B-5

A-14

Shinjuku Center Building

A-4

Shinjuku Sanchome East Bldg.

B-9

Rise Arena Bldg.

B-6

A-15

Minami Azabu Building

A-5

Yurakucho Ekimae Building (Yurakucho Itocia)

B-10

Yume-ooka Office Tower

CHIBA
B-1
Ikebukuro
B-9

B-8
TanashiTachikawaB-7

Shinjuku

TOKYO

B-11
B-1

Ueno
Kinshicho
Tokyo

Shibuya

Chiba
ShinagawaB-2

Musashikosugi
B-4

KANAGAWA
B-5
B-12
B-3
B-10

KawasakiB-6
Shin-Yokohama
Yokohama
Nihon-odoori
Kamiooka46

Disclaimer Regarding Forward-Looking Statements
Disclaimer
1.

This material contains information that constitutes forward-looking statements. Such forward-looking
statements are made by Japan Prime Realty Investment Corporation and Tokyo Realty Investment
Management, Inc. based on information currently available, and are therefore not guarantees of future
performance. Actual results may differ materially from those in the forward-looking statements as aresult of various factors including known or unknown risks and uncertainties.
This material is solely for the purpose of providing information and it is not intended for the purpose ofoffering or soliciting investment, or as a recommendation to purchase or sell any specific product.
Please refer any inquiries for possible purchases of units or other products of Japan Prime Realty
Investment Corporation to a securities dealer.
Although Japan Prime Realty Investment Corporation takes all possible measures to ensure theaccuracy of the content provided in this material (including references to legislation and taxation), it
makes no guarantee as to the accuracy of the content. Furthermore, the content may be subject tochange without prior notification.
Please further note that this English material is a provisional translation of the original Japanese material.

2.

The photos used in this material include those of the assets other than what JPR owns or plans toacquire. Please note that for land with leasehold interest, JPR owns only the land.

3.

Unless otherwise noted, the figures indicated in the body texts of this material are rounded down to thenearest specified unit for monetary amounts space areas, and rounded off to the nearest specified unit
for percentages, numbers of years and average values. Accordingly, the sum totals of monetaryamounts or percentages of respective items may not match the sum totals of actual figures.

6.

NOI yield(Rent revenue - real estate – expenses related to rent business + depreciation) / acquisition price7.

NOI yield after depreciation(Rent revenue - real estate – expenses related to rent business) / acquisition priceThe rent revenue - real estate, expenses related to rent business and depreciation in the formula
above are calculated and annualized by dividing their respective actual values by the number ofoperating days for the relevant fiscal period and then multiplying them by 365 days. In addition,
the “assumed NOI yield upon acquisition” and the “assumed NOI yield after depreciation uponacquisition” are calculated based on assumed income and expenditures for the 12 months thattake into account such factors as tenant replacements and rental fluctuations occurring in the ten
years after the acquisition of the property.

8.

Ratio of long-term, fixed interest rate debts

9.

Average maturity

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

Average maturity is a weighted average of the remaining period to maturity of interest-bearing
debts, calculated in accordance with the balance of respective interest-bearing debts.

10. Average interest-bearing debt costs(Interest expenses + borrowing-related expenses + interest expenses for investment corporation
bonds + investment corporation bond issuance costs) / balance of interest-bearing debt throughthe fiscal period

11. LTV (based on unitholders’ capital)

Explanations and definitions of terms used in this material
1.

Acquisition price
The sales price indicated in the purchase agreement for the relevant property executed with theseller (rounded down to the nearest hundred million yen), exclusive of expenses related toacquisition, consumption tax and other expenses)

2.

Occupancy rate (based on concluded contracts)
Total leased space / total leasable space
When simply stated as occupancy rate, it represents the occupancy rate based on concluded
contracts.

3.

Occupancy rate (based on generated rents)
Total leased space that generates rents and other revenues / total leasable space(excludes leased space subject to rent-free periods)

4.

Average occupancy rate
Average figure of the occupancy rates at the end of each month of the fiscal period (period
average of occupancy rates at end of months)

5.

Average unit rentMonthly rent per tsubo of occupied spaces including common charges

Interest-bearing debts / (interest-bearing debts + unitholders’ capital)

12. LTV (based on gains or losses from valuation at end of period)
Interest-bearing debts / (total assets at end of period + gains or losses from real estate valuation)

13. NAV per unit
(Unitholders’ capital + reserve for reduction entry, etc. + unrealized gains or losses) / number ofunits outstanding

14. FFO per unit
(Net income (excluding gains or losses on sale of real estate and extraordinary income or loss) +depreciation) / number of units outstanding

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

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

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