JPR-第五期 C1-4 04.10.27 4:09 PM ページ 1

J PR
Japan Prime Realty Investment Corporation
Fifth Fiscal Period Business Report
January 1, 2004– June 30, 2004

Printed in Japan

JPR-第五期 C2-3 04.10.27 4:14 PM ページ 41

PROFILECORPORATE DATA

Established on September 14, 2001, Japan Prime Realty Investment Corporation
is a closed-end, corporate type fund that invests primarily inhigh-quality office buildings and retail properties locatedHead Office
9-9 Yaesu 1-Chome, Chuo-ku, Tokyo 103-8285, Japan
Tel: +81-3-3231-1051
Fax: +81-3-3274-7775
Date of Establishment
September 14, 2001
Listing
Tokyo Stock Exchange (Securities Code: 8955)

in Tokyo and other major cities in Japan.
With its geographically diverse portfolio, JPR’s primary objective is to achievesustainable growth and stable cash distributions to its investors.

Fiscal Period Ends
June 30 and December 31 of each year
General Meeting of Unitholders
More than once every two years
Cash Distribution Payment Eligibility
Unitholders of record as of June 30 and December 31 ofeach year
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Location of Records
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo
Main Branch, Stock Transfer Agency Division
Mailing Address Mizuho Trust & Banking Co., Ltd.
1-17-7 Saga, Koto-ku, Tokyo 135-8722
Stock Transfer Agency Division
Telephone+81-3-5213-5213 (Representative)
AgentsMizuho Trust & Banking Co., Ltd.
(All branches nationwide)
Mizuho Investors Securities Co., Ltd.
(Head Office and all branches
nationwide)
Note: On March 12, 2003, Mizuho Trust & Banking Co., Ltd. merged with Mizuho
Asset Trust & Banking Co., Ltd., to establish a new trust and banking entity under thename of Mizuho Trust & Banking Co., Ltd. As a result, Mizuho Trust & Banking's mainbranch changed its address on the same date.

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

English page
This Web site has been createdspecifically for our English-speaking
readers.

Performance
Trends in occupancy rate byarea and purpose; trends ininvestment conditions.
Updated monthly.

ANNUAL SCHEDULE (PROVISIONAL)

DEC.

12 Balance date for the six-month period ended December 31
FAQ
FEB.

2

Announcement of results for the six-month period ended December 31
MAR.

of December Performance Information Report
3 Publication
Payment of cash distributions for the six-month period ended December 31

Answers to commonly asked
questions by our unitholders
and investors are found here.

Investor Relations
News releases are posted here as appropriate, as well as
information useful to unitholders and investors in evaluating
the status of JPR, including financial statements and otherlegally mandated reports.

Balance date for the six-month period ended June 30

6 JUNE

Announcement of results for the six-month period ended June 30

8 AUG.

Publication of June Performance Information Report
Payment of cash distributions for the six-month period ended June 30

9 SEPT.

Note: Performance Information Report is prepared pursuant to the Investment Trust Law of Japan.

CONTENTS: TO OUR INVESTORS 1

FINANCIAL HIGHLIGHTS 3

ACTIVITY HIGHLIGHTS 7

PORTFOLIO BREAKDOWN 5

SUBSEQUENT ACTIVITY HIGHLIGHTS 9

REIT STRUCTURE AND EXTERNAL SERVICE PROVIDERS 21
FINANCIAL STATEMENTS 28

PROPERTY PORTFOLIO OF JPR 10

MANAGEMENT’S DISCUSSION AND ANALYSIS 24

UNITHOLDER INFORMATION 39

MEMBERS OF THE BOARD 40 C ORPORA T E D A T A 41

This document contains a translation of selected information described in the Financial Report (Kessan Tanshin) dated August 19, 2004 prepared under the timely disclosure requirements of theTokyo Stock Exchange, as well as the Financial Statements and Performance Information Report prepared pursuant to the Investment Trust Law of Japan, for the period from January 1, 2004 toJune 30, 2004 of Japan Prime Realty Investment Corporation (“JPR”).
This English language document was prepared solely for the convenience of and reference by non-Japanese investors and is not intended to constitute a disclosure document. The Japanese
language Financial Report, Financial Statements and Performance Information Report for the aforementioned period should be referred to as the originals of this document.
English translations for legal, accounting, tax and business concepts used herein may not convey precisely identical concepts of the equivalent Japanese terms. The figures presented in thefinancial statements may differ from the Company’s Financial Report (Kessan Tanshin) due to rounding. With respect to any and all terms herein, including without limitation, financial
statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents and English documents contained herein, the original Japanese
documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc. nor any of their respective directors, officers, employees, partners, unitholders,
agents or affiliates will be responsible or liable for the completeness, appropriateness or accuracy of English translations or the selection of the portion(s) of any document(s) translated into English.
No person has been authorized to give any information or make any representations other than as contained in this document in relation to the matters set out in this document, and if given or
made, such information or representation must not be relied upon as having been authorized by JPR, Tokyo Realty Investment Management, Inc. or any of their respective directors, officers,
employees, partners, unitholders, agents or affiliates.
The financial statements of JPR have been prepared in accordance with generally accepted accounting principles in Japan (Japanese GAAP), which may materially differ in certain respects
from generally accepted accounting principles in other jurisdictions.
Many provisions of this document contain information that constitute forward-looking statements. These forward-looking statements are not a guarantee of future performance and involve risks
and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors.

41

TO OUR INVESTORSJapan Prime Realty Investment Corporation (JPR) again reported upward trends in its key financial indicators for the six-month period ended June 30, 2004 (the Company’s fifth fiscal period).
Operating revenues rose 5.8% compared with the previous fiscal period to ¥6,791 million, operating profits edged up 4.4% to ¥3,062 million and net income showed a 6.0% increase to ¥2,615
million. The occupancy rate as of June 30, 2004 increased 0.5 of a percentage point to 93.2%.
From a profit perspective, factors that helped generate improved results include the contributions for the full fiscal period of properties acquired during the previous period, partial contributions from properties newly acquired during the fifth period, improvements in occupancy rates,
and cost reductions.
In the fifth fiscal period, cash distribution per unit was ¥6,081, representing 100.0% of distributable income, an increase of approximately 6.0% compared with ¥5,738 (99.9%) for the fourthfiscal period. The number of investment units issued and outstanding at the end of the fifth fiscal
period remained unchanged and stood at 430,000.

Positive Signs of a General Improvement
Office Buildings

In the Tokyo office leasing market, the effects and concerns relating to the “Year 2003 Problem”
continued to dissipate. At the same time, occupancy rates trended upward, particularly in the caseof large-scale properties. The momentum for this tendency was the move among large corporations toward consolidated operations in one high-specification building, allied tothe benefits to be gained from reduced rents caused by the overall high availabilityof properties in this sector.
Even in the regional business districts, where low occupancy rates
remain and generally harsh conditions seem set to continue, agradual improvement began to emerge at the start of the year in
Sapporo, Niigata, Osaka, Takamatsu and Fukuoka. There is a particularly strong correlation in the regional business districts
between a recovery in company performance and increasing
demand for office space. Rent reductions for companies downsizing

Hirohito Kaneko (left)
Executive Officer, Japan Prime Realty Investment Corporation

Toshihiro Hagiwara (right)
President and CEO, Tokyo Realty Investment Management, Inc.

1

“ The current tendency among large corporations toward

consolidating operations in one high-specification officebuilding has dissipated concerns in the Tokyo office leasing market.”to save costs or to assist tenants to remain in the properties remain likely during this transitional
phase in the office market.

Commercial Facilities

In the commercial facilities sector too, there were clear signs of a recovery as exports and demandfor digital consumer electronics acted as catalysts for market improvements from manufacturers toretailers and an overall brightness returned to the consumer market. This was however temperedby continued concern over an increase in interest rates and the appreciation of the yen.
Within the Tokyo metropolitan area, the rental market conditions of the previous six months
persisted. High demand among retailers for new stores in high-end commercial districts lead to therecording of steady rent performances and an ongoing trend saw store openings by volume domestic appliance retailers, “do-it-yourself” home improvement centers and the like.
In the suburbs, rents continued to decline and the harsh environment continued unabated.

Investment Activity in the Fifth Fiscal Period

It is a fundamental investment policy of both JPR and its asset management company, Tokyo Realty
Investment Management, Inc. (TRIM) to enhance and stabilize its investment portfolio throughthe acquisition of prime real estate both in Tokyo and in major cities located in regional areas.
In accordance with this, the period under review witnessed the successful acquisition of six tenanted properties for a total of ¥24,010 million, based on acquisition value.
In Tokyo’s CBDs, the Oval Court Ohsaki Mark West in Shinagawa ward was acquired inJune 2004 for an investment of ¥3,500 million. In the previous month, an investment of ¥5,100
million had secured the acquisition of the Kenwa Building in Chiyoda ward.
In the Tokyo area, the Kawaguchi Center Building just outside Tokyo and the SEF Building in
Taito ward were added to the portfolio for ¥8,100 million in February and ¥3,250 million in
March, respectively.
In other major urban regions, two office properties were added to JPR’s asset base, the Dojima F
Building in Osaka and the Semba Fukuoka Building in Fukuoka, for a total investment of ¥4,060 million.

2

FINANCIAL HIGHLIGHTS

All amounts in millions of yen
unless otherwise stated

All amounts in millions of yen
unless otherwise stated

5th period ended
June 30, 2004

4th period ended
December 31, 2003

5th period ended
June 30, 2004

Operating revenues

6,791

6,421

62.6

Operating expenses

3,729

3,487

34.4

Operating profits

3,062

2,934

28.2

Income before income taxes

2,616

2,468

24.1

Net income

2,615

2,467

24.1

Total assets

182,254

156,576

1,680.8

Interest-bearing liabilities

77,16652,466

711.7

Total unitholders’ equity

91,72991,581846.0

Unitholders’ capital

89,114

89,114

821.9

Cash distributions

2,614

2,467

24.1

Dividend payout ratio

100%

99.9%

—

Number of units (units)

430,000

430,000—

Unitholders’ equity per unit (yen/U.S. dollars)

213,322

212,979

1,967.4

Cash distribution per unit (yen/U.S. dollars)

6,081

5,738

56.1

Funds from operations (FFO) per unit (yen/U.S. dollars)

8,874

7,778

81.8

Return on total assets (annualized)

3.1%

3.2%

—

Return on total unitholders’ equity (annualized)

5.7%

6.5%

—

Equity ratio

50.3%

58.5%

—

Interest-bearing liabilities to total assets

42.3%

33.5%

—

Debt service coverage ratio (times)

10.4

10.5

—

Property net operating income (NOI)

4,722

4,298

43.5

NOI yield (annualized)

5.8%

5.7%

—

Property net cash flows (NCF)

4,253

3,651

39.2

NCF yield (annualized)

5.2%

4.8%

—

Number of properties

37

32

—

Number of tenants

437

357

—

256,329.13

218,734.67

—

93.2%

92.7%

—

Total leasable floor space (square meters)
Occupancy rate

All amounts in millions of
U.S. dollars unless otherwise stated (*)(*) The rate of ¥108.43=US$1.00, the foreign exchange rate on June 30, 2004, has been used for translation.

3

“To increase brand awareness in conjunction with our logo,
the end of the fifth fiscal period saw six properties that have names

beginning with JPR...this number will have increased to nine”by June 30, 2005.

Using the acquisition value benchmark, our now 38-property portfolio showed a marked
increase, to ¥163,659 million, during the period. Leasable floor space increased 37,594.46 square
meters, to 256,329.13 square meters, and the number of tenants grew by 80 to 437.
We will continue to seek stable medium- and long-term growth through adherence to ourinvestment policy and TRIM’s diligent efforts.

Mid-Term Financing Status

Under a Company strategy that attaches the utmost importance to financial stability, the fifth
fiscal period witnessed the raising of short-term funds to assist with financial maneuverability inthe medium term. To further improve our position and encourage the long-term stabilization of
liabilities, the Company issued corporate bonds to the value of ¥22,000 million in February 2004.
The bonds were rated at A-, A+ and A3 by Standard & Poors, Rating and Investment
Information, Inc. and Moody’s Investors Service, respectively. In another development, JPR set up
a ¥4,000 million commitment line of credit.
As a result, the balance of interest-bearing debt stood at ¥55,166 million as at June 30, 2004
and corporate bonds totaled ¥22,000 million.

The JPR Brand

There are several facets to the establishment of the JPR brand. The Company’s A/3S concept, forexample, emphasizes “Amenities” based on a three “S” platform of Service, Safety and Savingenergy. JPR is committed to supplying high-quality amenity space based on service, safety andsaving energy with an overriding emphasis on client satisfaction.
To increase brand awareness in conjunction with our logo, the end of the fifth fiscal period saw
six properties that have names beginning with JPR. It is expected that this number will haveincreased to nine by June 30, 2005.
Another aspect of the brand strategy is the introduction of standardized brand criteria into
every facet of our operations, divided along management (service, rapid response criteria, etc.) andbuilding (safety, energy-saving criteria, etc.) lines.

4

PORTFOLIO BREAKDOWN

Value Breakdown by Region

NOI Breakdown by Region

Total Leased Floor Space by Region¥163,659 million¥4,722 million

238,789.03 m2

Other cities(¥60,962 million)

Tokyo CBDs(¥63,990 million)

37.2%

Other cities(¥1,864 million)

Tokyo CBDs(¥1,385 million)

Tokyo CBDs
(52,656.03 m2)

22.0%

29.3%

39.5%

39.1%

Other cities(100,702.10 m2)

42.2%
35.8%

31.2%

23.7%

Greater Tokyo(85,430.90 m2)

Greater Tokyo (¥38,707 million)

Greater Tokyo (¥1,473 million)

Value Breakdown by TypeNOI Breakdown by Type

Total Leased Floor Space by Type¥163,659 million¥4,722 million

238,789.03 m2

Retail properties(¥38,240 million)

Retail properties(¥1,391 million)

Retail properties(67,364.13 m2)

23.4%

28.2%

29.5%
76.6%

71.8%

70.5%

Offices(¥125,419 million)

Offices(¥3,331 million)

Total Leasable Floor Space and Occupancy Rate

Offices(171,424.90 m2)

Portfolio Growth

Total leasable floor space (m2)(%) Occupancy rate

Accumulated
Investment

100

260,000

240,000

Properties

95

38¥163.65 billion
220,000

90

32¥139.65 billion

200,00085¥125.80 billion

80¥94.60 billion¥92.18 billion

75¥72.66 billion

30

180,000
160,000

25

27

18

140,000
70

120,000¥40.73 billion

1365100,000

60

80,000

Nov.
2001

Dec.

Mar.
2002

June

Sept.

Dec.

Mar.
2003

June

Dec.

June
2004

Purchase
Period

Nov.
2001

Dec.
2001

June
2002

Sept. 2002 to Jan. 2003 to July. 2003 to Jan. 2004 to
Dec. 2002 June 2003 Dec. 2003 June 2004

Note: Accumulated investment does not include miscellaneous acquisition expenses,
fixed assets tax, city-planning tax and consumption tax.

5

“The Company is supporting its image and making

constant growth a reality through the implementation of its‘Value Up, Cost Down’ three-pillar strategy.”This will lead to improvements in occupancy rates, rental income and portfolio value and culminate in higher property income and investor returns.

Stable Growth, “Value Up, Cost Down” Strategies

The Company also has a three-pillar strategy in place to support its brand image and to make constant growth a reality. This entails:•••

Increasing stability and income by safeguarding that derived from the core office and commercial
premises real estate sector, combined with the early elimination of vacant space in properties and curtailment of free rent periods
Efforts toward cost controls through the dropping of commission charges to external suppliers, reviewing
fees paid to property management (PM) companies and savings on energy, etc.
Increasing profitability by carrying out effective refurbishment to raise property values and strengthening leasing activity
To give just one example of the cost savings that can be made in property management, chang-

ing the management specification related to refurbishment work carried out on the JPR Ikebukuro
Building in Tokyo, brought about a reduction of fees paid to external suppliers of 30%.

Property Management Company Strategy

The Company has been actively addressing the strengthening of its operations to promoteincreased client satisfaction and to make it even more efficient. Its future strategy regarding PM
companies has been formulated following an evaluation carried out by independent third parties.
This evaluation is conducted annually.
An area strategy comprising a collective management system will be adopted against a background of rising PM expertise and quality levels, strengthened leasing operations and cost reductions. This will ultimately bring day-to-day property repair and maintenance operations under theumbrella of a small, select number of highly efficient PM providers that will themselves be able toenjoy the concomitant scale benefits.

6

ACTIVITY HIGHLIGHTS

Oval Court Ohsaki Mark West
June 1, 2004, saw JPR purchase the Oval Court Ohsaki Mark West, an office space
only three minutes on foot from Ohsaki Station, JR Yamanote Line and six minutes
on foot from Gotanda Station, Toei Asakusa Subway Line. The building has two
tenants namely Mitsui Fudosan Co., Ltd. and KOBELCO CONSTRUCTION
MACHINERY CO., LTD.

• Site Area (m2):
4,006.00• Total Floor Space (m2): 28,575.80• Structure/Floors:• Completed:

S/SRC B2/17F
June 2001

Kenwa Building
In accordance with JPR’s fundamental investment policies to acquire new officebuildings in Tokyo Central Business Districts, the Kenwa Building was purchased on
May 28, 2004. Consisting not only of office space but also shops, residences andparking facilities, this building is conveniently located three minutes on foot from
Ichigaya Station, JR Sobu Line and one minute on foot from Ichigaya Station, Toei
Shinjuku Line.
• Site Area (m2):• Total Floor Space (m2):

1,058.04
5,888.82• Structure/Floors:• Completed:

SRC B1/9F
March 1989

Kawaguchi Center Building
On February 13, 2004, JPR acquired the Kawaguchi Center Building situated in
Saitama Prefecture some three-minutes walk from Kawaguchi Station, JR Keihin
Tohoku Line. Consisting primarily of office space and attendant parking facilities,
major tenants in this property are Media Communications Inc. and the Japan
Science and Technology Agency.

• Site Area (m2):
4,524.61• Total Floor Space (m2): 28,420.85• Structure/Floors: S/SRC B2/15F• Completed: February 1994

SEF Building
Major tenants in this office space situated only four minutes on foot from Inaricho
Station, Tokyo Metro Ginza Subway Line include KUBOTA Environmental Service
Co., Ltd. and BANDAI VISUAL Co., Ltd. Facilities include shops and parking area.

• Site Area (m2):• Total Floor Space (m2):

1,242.97
8,490.44• Structure/Floors:• Completed:

S/SRC B1/8F
October 1992

7

“The Company has already made progress with furthering its

acquisition strategy in the current six-month period, and forecasts afurther increase in operating revenues by the end of this term.”

Through the implementation of the PM strategy, JPR will be able to improve reporting channels and ensure the highest client satisfaction levels at all times.

Looking Ahead

The Company has already made progress with furthering its acquisition strategy in the current sixmonth period, which will end December 31, 2004. On July 2, 2004 it acquired the 30-story
Shinjuku Square Tower office building in central Tokyo for ¥10,000 million.
At the end of the current term, the Company forecasts a further increase in operating revenues
to ¥7,488 million. Operating profit is forecast to rise to ¥3,256 million while net income will
decline slightly to ¥2,580 million, triggered by seasonal increases in the cost of utilities and theabsence of management association payments. Over the current term, the occupancy ratio is
expected to show only minor fluctuations and average around the same or slightly above the previous term’s level. Looking further ahead, we are anticipating average occupancy rates to again
increase at the close of the seventh fiscal period on June 30, 2005.

From the preceding, I trust that we have provided all our valued investors with a clear understanding of our current status and future direction. Supported by TRIM, and backed by highly reputablesponsors*, we have the resources in place to tap the potential of the property market.

With grateful appreciation for your support and understanding.

Hirohito Kaneko, Executive Officer,
Japan Prime Realty Investment Corporation

Toshihiro Hagiwara, President and CEO,Tokyo Realty Investment Management, Inc.

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

8Dojima F Building
Located in the Kita-ku area of Osaka city a two-minute walk from Nishi-Umeda
Station, Yotsubashi Subway Line, this office building replete with parking facilities
houses the GEOS Corporation.

• Site Area (m2):• Total Floor Space (m2):

668.11
5,696.01• Structure/Floors:• Completed:

SRC B2/9F
October 1993

Semba Fukuoka Building
Located only five minutes on foot from Hakata Station, JR Line and Fukuoka City
Subway Line this office space boasts six tenants the major of which are The NishiNippon Bank, Ltd. and Semba Co., Ltd.

• Site Area (m2):• Total Floor Space (m2):

680.633,874.81• Structure/Floors:• Completed:

SRC 8F
February 1993

SUBSEQUENT ACTIVITY HIGHLIGHTS

Shinjuku Square Tower
Acquired on July 2, 2004, this conveniently located office space is amere eight minutes on foot from Nishi-Shinjuku Station, on the busy
Tokyo Metro Marunouchi Subway Line. The single tenant is the
Shinjuku Square Tower Management Co., Ltd.

• Site Area (m2):
8,409.52• Total Floor Space (m2): 78,796.00• Structure/Floors: S/SRC B4/30F• Completed:
October 1994

• Location:
Shinjuku-ku, Tokyo• Acquisition Date:
July 2, 2004
• Acquisition Price: ¥10,000 million

9

PROPERTY PORTFOLIO OF JPR

Locations of Portfolio Properties
A Tokyo CBDs
Shinjuku-ku Office A-9

Office A-5

Office A-3

Hokkaido

Office A-1
Office A-2
Office A-8

C – 10 11

Office A-4
Chiyoda-ku

Shibuya-ku

Retail A-1

Chuo-ku

Office A-6
Minato-ku
Shinagawa-ku

Office A-7
Office A-10

B Greater Tokyo
Saitama

Office B-6

C – 12

Office B-7

Retail B-1

TohokuTokyo

Office B-4
Kanagawa

Office B-5
Office B-3

Office B-1

Office B-2

Hokuriku

Retail B-2

C – 1

Chiba

B

ChugokuA

C – 15

C – 16 Chubu

Osaka
C – 2

C – 5

Shikoku

Kyushu
C – 7

8

6

4

17

1

C – 13

Kinki

14 18
Tokyo CBDs

Chiyoda, Chuo, Minato, Shinjuku,
Shinagawa, Shibuya

B

Greater Tokyo

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

C

Other Cities

All other areas in Japan

A
C – 9

Okinawa10

A Tokyo CBDs
■

■ A-1
■ A-2
■ A-3
■ A-4
■ A-5
■ A-6
■ A-7
■ A-8
■ A-9
■ A-10● A-1

Kanematsu Bldg.
Kanematsu Bldg. Annex
JPR Ningyo-cho Bldg.
Shin-Kojimachi Bldg.
Crest Yasuda Bldg.
MS Shibaura Bldg.
Gotanda First Bldg.
Fukuoka Bldg.
Kenwa Bldg.
Oval Court Ohsaki Mark West
Jinnan 1-chome Bldg. (Retail)

B Greater Tokyo
■

■ B-1
■ B-2
■ B-3
● B-1
● B-2
■ B-4
■ B-5
■ B-6
■ B-7

Arca East
JPR Chiba Bldg.
Asahi-Life Yokohama Nihon Odori Bldg.
Tanashi ASTA (Retail)Tsurumi fuga 1 (Retail)JPR Ikebukuro Bldg.
Shinyokohama 2nd Center Bldg.
Kawaguchi Center Bldg.
SEF Bldg.

C Other Cities—Hokkaido, Tohoku and Hokuriku■■ C-10■ C-11■ C-12■ C-1

North 33 Bldg.
Park East Sapporo
Sompo Japan Sendai Bldg.
Niigata Ekinan Center Bldg.

C Other Cities—Chubu, Osaka, Kinki, Chugoku and Shikoku■■ C-16■ C-2■ C-4■ C-17■ C-13■ C-15
■ C-5
■ C-6
● C-1

Nagoya Kowa Bldg.
Meiji Yasuda-Life Osaka Umeda Bldg.
Tokyo Tatemono Honmachi Bldg.
Dojima F Bldg.
Sompo Japan Wakayama Bldg.
SK Hiroshima Bldg.
Asahi-Life Takamatsu 2nd Bldg.
JPR Takamatsu Bldg.
Kuraray Nissay Bldg. (Retail)

C Other Cities—Kyushu and Okinawa
■

■ C-7
■ C-8
■ C-14■ C-18■ C-9

JPR Hakata Bldg.
Asahi-Life Fukuoka 3rd and 4th Bldg.
Tenjin 121 Bldg.
Semba Fukuoka Bldg.
JPR Naha Bldg.

11

Tokyo CBDs

Region

Type

No.

Name

OfficeA-1

Kanematsu Bldg.

Office

A-2

OfficeLocation

Completed

Acquired

Chuo-ku, Tokyo

1993. 2

2001.12.27

Kanematsu Bldg. Annex

Chuo-ku, Tokyo

1993. 2

2001.12.27

A-3

JPR Ningyo-cho Bldg.

Chuo-ku, Tokyo

1989.122001.11.16

OfficeA-4

Shin-Kojimachi Bldg.

Chiyoda-ku, Tokyo

1984.10

OfficeA-5

Crest Yasuda Bldg.

Chiyoda-ku, Tokyo

1999. 92001.11.16
2002.11.21(Total)2002. 6.21

OfficeA-6

MS Shibaura Bldg.

Minato-ku, Tokyo

1988. 2

2003. 3.28

OfficeA-7

Gotanda First Bldg.

Shinagawa-ku, Tokyo

1989. 7

2003. 7.23

OfficeA-8

Fukuoka Bldg.

Chuo-ku, Tokyo

1990. 5

2003.10.15

OfficeA-9

Kenwa Bldg.

Chiyoda-ku, Tokyo

1989. 3

2004. 5.28

OfficeA-10

Oval Court Ohsaki Mark West

Shinagawa-ku, Tokyo

2001. 6

2004. 6. 1

RetailA-1

Jinnan 1-chome Bldg.

Shibuya-ku, Tokyo

1992. 2

2003. 6.30

OfficeB-1

Arca East

Sumida-ku, Tokyo

1997. 3

2001.11.16

OfficeB-2

JPR Chiba Bldg.

Chiba, Chiba

1991. 1

2001.12.13

OfficeB-3

Asahi-Life Yokohama Nihon Odori Bldg.

Yokohama, Kanagawa

1989.10

2001.11.16

OfficeB-4

JPR Ikebukuro Bldg.

Toshima-ku, Tokyo

1980.10

2002. 6.21

OfficeB-5

Shinyokohama 2nd Center Bldg.

Yokohama, Kanagawa

1991. 8

2002. 9.25

OfficeB-6

Kawaguchi Center Bldg.

Kawaguchi-shi, Saitama

1994. 2

2004. 2.13

OfficeB-7

SEF Bldg.

Taito-ku, Tokyo

1992.10

2004. 3. 1

RetailB-1

Tanashi ASTA

Nishitokyo, Tokyo

1995. 2

2001.11.16

RetailB-2

Tsurumi fuga 1

Yokohama, Kanagawa

1985. 92001.11.16

OfficeC-1

Niigata Ekinan Center Bldg.

Niigata, Niigata

1996. 3

2001.11.16

OfficeC-2

Meiji Yasuda-Life Osaka Umeda Bldg.

Osaka, Osaka

2000. 6

2001.12.25

OfficeC-4

Tokyo Tatemono Honmachi Bldg.

Osaka, Osaka

1970. 2

2001.11.16

OfficeC-5

Asahi-Life Takamatsu 2nd Bldg.

Takamatsu, Kagawa

1981. 8

2001.11.16

OfficeC-6

JPR Takamatsu Bldg.

Takamatsu, Kagawa

1982. 92001.12.18

OfficeC-7

JPR Hakata Bldg.

Fukuoka, Fukuoka

OfficeC-8

Asahi-Life Fukuoka 3rd and 4th Bldg.

Fukuoka, Fukuoka

OfficeC-9

JPR Naha Bldg.

Naha, Okinawa

1985. 6
2001.11.16
1984. 2 (3rd)1986.10 (4th) 2001.11.16
1991.10
2001.11.16

Office

C-10

North 33 Bldg.

Sapporo, Hokkaido

1992. 2

2002. 6.18

Office

C-11

Park East Sapporo

Sapporo, Hokkaido

1985.11

2002. 6.18

OfficeC-12

Sompo Japan Sendai Bldg.

Sendai, Miyagi

1997.12

2002. 6.26

OfficeC-13

Sompo Japan Wakayama Bldg.

Wakayama, Wakayama

1996. 7

2002. 6.26

OfficeC-14

Tenjin 121 Bldg.

Fukuoka, Fukuoka

2000. 7

2002. 6.21

Office

C-15

SK Hiroshima Bldg.

Hiroshima, Hiroshima

2002.10. 4

Office

C-16

Nagoya Kowa Bldg.

Nagoya-shi, Aichi

2003. 9. 1

OfficeC-17

Dojima F Bldg.

Osaka, Osaka

1989.12
building 2003. 1
parking 1986.12
1993.10

OfficeC-18

Semba Fukuoka Bldg.

Fukuoka, Fukuoka

1993. 2

2004. 6.11

RetailC-1

Kuraray Nissay Bldg.

Osaka, Osaka

1990. 4

2003. 5.15

Greater Tokyo

Total

Other Cities

Total

Total
Total

12 Note 1: Acquisition price does not include miscellaneous expenses of acquisition (real estate agent’s fee and consumption tax)
Note 2: Percentages and ratios are rounded to the first decimal point

2004. 1.23

Acquisition
Price

Appraisal
Value(millions of yen)%of total(millions of yen)

16,276

10.0%

2,874

Total Leasable
Floor Space (m2)

Total Leased
Floor Space (m2)

(JPR’s portion)

1,751.13

79.4%
100.0%

Ownership

Site Area

(%)

(m2)

(JPR’s portion)

Occupancy
Rate

# of
Tenants

12,70079.4%

7,958.58

7,757.74

97.5%

1.8%

2,480

679.06

2,291.13

2,291.13

2,100

1.3%

1,850

550.062,788.98

1,670
550(2,220)
4,000

1.0%
0.3%
(1.3%)
2.5%

2,140
3,250

100.0%

11,2006.8%

11,300

2,920

1.8%

1,800

RentalRevenue(thousands of yen)%of total

10389,2145.7%

100.0%

1

102,8441.5%

2,409.75

86.4%

3

93,3891.4%

657.80636.902,105.44
901.36(3,006.80)
3,265.34

1,725.02
901.36(2,626.38)
3,265.34

81.9%
100.0%(87.4%)
100.0%

73(10)
962,18930,422(92,611)
122,3210.9%
0.4%(1.3%)
1.8%

36.0%

8,992.18

14,429.08

12,467.70

86.4%

6

499,473

7.4%

2,870

61.8%

1,551.19

4,240.98

4,240.98

100.0%

3

146,897

2.2%

1.1%

1,798

14.3%

1,302.17

1,250.06

1,250.06

100.0%

1

64,668

1.0%

5,100

3.1%

5,080

100.0%

1,058.04

4,181.66

4,181.66

100.0%

935,097

0.5%

3,500

2.1%

3,400

27.1%

4,006.00

4,088.44

4,088.44

100.0%

2

29,2630.4%

12,000

7.3%

12,100100.0%

1,010.47

8,076.85

8,076.85

100.0%

1

345,576

5.1%

63,99039.1%

58,96822,195.00

55,577.90

52,656.03

94.7%

55 1,921,353

28.3%

5,880

3.6%

5,760

41.1%

3,755.01

7,050.10

7,050.10

100.0%

5299,273

4.4%

2,350

1.4%

2,085

100.0%

1,382.35

5,558.06

4,935.22

88.8%

27

143,725

2.1%

2,927

1.8%

2,650

100.0%

1,100.59

6,066.54

5,467.14

90.1%

10

139,962

2.1%

2,040

1.2%

2,150

100.0%

772.77

4,597.35

3,531.96

76.8%

6

103,339

1.5%

920

0.6%

1,020

50.0%

841.712,640.80

2,274.23

86.1%

10

66,518

1.0%

8,100

5.0%

8,180

86.5%

4,524.61

15,478.43

15,478.43

100.0%

38

380,171

5.6%

3,250

2.0%

3,330

6,512.45

5,993.52

92.0%

9127,656

1.9%

10,200

6.2%

10,83031,121.71

31,121.71

100.0%

1

672,183

9.9%

3,040

1.9%

3,173

100.0%
1,242.97
42.1% (land) 12,326.30
52.9% (building)
64.4%
1,962.18

9,578.60

9,578.60

100.0%

1

153,279

2.2%

38,70723.7%

39,17827,908.49

88,604.04

85,430.91

96.4%

107 2,086,106

30.7%

2,140

1.3%

2,035

52.7%

2,706.99

5,206.82

4,669.16

89.7%

15

126,881

1.9%

8,300

5.1%

8,570

33.3%

5,999.33

9,600.08

9,061.74

94.4%

21

365,459

5.4%

4,150

2.5%

3,990

64.3%

1,432.64

7,210.25

7,106.76

98.6%

10

249,200

3.7%

872

0.5%

741

100.0%

579.992,518.30

1,604.38

63.7%

19

51,109

0.7%

2,130

1.3%

1,330

100.0%

1,407.78

5,032.33

4,033.07

80.1%

22

83,140

1.2%

2,900

1.8%

2,660

100.0%

1,214.63

6,581.10

5,633.23

85.6%

27

152,640

2.2%

2,873

1.7%

2,610

100.0%

2,500.86

8,447.48

6,671.94

79.0%

14

182,669

2.7%

1,560

1.0%

1,470

100.0%

959.87

3,947.38

3,253.31

82.4%

14

106,831

1.6%

3,700

2.3%

2,910

100.0%

1,382.12

6,642.98

5,933.74

89.3%

24

141,368

2.1%

2,150

1.3%

1,850

100.0%

1,808.26

7,647.76

5,546.82

72.5%

22

115,659

1.7%

3,150

1.9%

3,180

100.0%

1,895.67

7,056.39

6,835.97

96.9%

9

199,529

2.9%

1,670

1.0%

1,620

100.0%

1,128.45

4,892.17

4,646.19

95.0%

14

123,020

1.8%

2,810

1.7%

2,590

52.2%

1,164.39

3,292.02

2,565.71

77.9%

12

96,313

1.4%

947

0.6%

862

100.0%

502.412,732.29

2,362.60

86.5%

16

58,090

0.9%

4,550

2.8%

4,597

100.0%

992.31

5,461.90

5,207.19

95.3%

19

208,711

3.1%

2,140

1.3%

2,150

100.0%

668.11

3,941.40

3,633.75

92.2%

10

109,748

1.6%

1,920

1.2%

1,950

100.0%

680.63

3,349.57

3,349.57

100.0%

6

10,421

0.2%

13,0007.9%

11,800100.0%

3,518.68

18,586.97

18,586.97

100.0%

1

402,4115.9%

60,962

37.2%

56,91530,543.12

112,147.19

100,702.10

89.8%

275 2,783,199

41.0%

163,659

100.0%

155,061

80,646.61

256,329.13

238,789.04

93.2%

437 6,790,658 100.0%

49.0%
21.0%

13

Overview of Portfolio Properties(As of June 30, 2004)

Tokyo CBDs
A -■
1
■

Chuo-ku, Tokyo

Kanematsu Bldg.

Chuo-ku, Tokyo

JPR Ningyo-cho Bldg.
Acquisition Price(millions of yen):

2,100% of Total:

1.3%

Site Area (m2):550.06

Total Floor Space (m2):

4,117.70

Structure/Floors:

SRC/RC
B1/8F

Completed:

December
1989

Chiyoda-ku, Tokyo

Shin-Kojimachi Bldg.
Acquisition Price(millions of yen):

2,220% of Total:

1.3%

Site Area

(m2)

(m2)

:

5,152.98

16,276% of Total:

10.0%

Site Area (m2):

1,751.13

Total Floor Space (m2):

14,995.09

Structure/Floors:

S/RC/SRC B2/13F

Completed:February 1993

Chuo-ku, Tokyo

Kanematsu Bldg. Annex

A -■
2
■

Structure/Floors:

SRC
B1/9F

Completed:

October
1984

Chiyoda-ku, Tokyo

Crest Yasuda Bldg.

Acquisition Price(millions of yen):

2,874

Acquisition Price(millions of yen):

4,000% of Total:

1.8%% of Total:

2.4%

679.06Site Area

4,351.46

Total Floor Space

Structure/Floors:

SRC
B1/8F

Structure/Floors:

SRC
B1/9F

Completed:February
1993

Completed:

September
1999

Site Area(m2):

Total Floor Space

(m2)

:

A -■
4
■

657.80:Total Floor Space
Acquisition Price (millions of yen):

A -■
3
■

(m2)

A -■
5
■

636.90:(m2):

4,790.68

Note 1: Acquisition price does not include miscellaneous expenses (real estate agent’s fee and consumption tax)
Note 2: Percentages and ratios are rounded to the first decimal point
Note 3: Abbreviations under “Structure/Floors” indicate S: Steel-frame, RC: Reinforced concrete, and SRC: Steel-frame reinforced concrete

14

Minato-ku, TokyoMS Shibaura Bldg.

A -■
6
■

Shinagawa-ku, Tokyo

Gotanda First Bldg.

Acquisition Price(millions of yen):

11,200Acquisition Price(millions of yen):

2,920% of Total:

6.8%% of Total:

1.8%

Site Area (m2):

8,992.18

Site Area (m2):

1,551.19

Total Floor Space (m2):

31,020.21

Total Floor Space (m2):

10,553.34

Structure/Floors:

SRC/RC/S
B2/13F

Structure/Floors:

SRC/RC
B2/11F

Completed:February
1988

Completed:

July
1989

Chuo-ku, Tokyo

Fukuoka Bldg.

A -■
8
■

A -■
9
■

Chiyoda-ku, Tokyo

Kenwa Bldg.

Acquisition Price(millions of yen):

1,800

Acquisition Price(millions of yen):

5,100% of Total:

1.1%% of Total:

3.1%

1,302.17

Site Area

Total Floor Space (m2):

11,627.74

Total Floor Space (m2):

5,888.82

Structure/Floors:

SRC
B2/10F

Structure/Floors:

SRC
B1/9F

Completed:May 1990

Completed:

March 1989

Site Area(m2):

Shinagawa-ku, Tokyo

Oval Court Ohsaki Mark West

A -■
10
■

(m2)

1,058.04:

Shibuya-ku, Tokyo

Jinnan 1-chome Bldg.

Acquisition Price(millions of yen):

3,500

Acquisition Price(millions of yen):

12,000% of Total:

2.1%% of Total:

7.3%

Site Area (m2):

4,006.00

Site Area

Total Floor Space (m2):

28,575.80

Total Floor Space

Structure/Floors:

S/SRC
B2/17F

Structure/Floors:

SRC/S
B3/8F

Completed:

June 2001

Completed:February
1992

(m2)

A -■
7
■

A -●
1 (Retail)■1,010.47

:
(m2)

:

8,449.56

15

Greater Tokyo
B -■
1
■

Sumida-ku, Tokyo

Arca East
Acquisition Price(millions of yen):

5,880% of Total:

3.6%

Site Area

(m2)

(m2)

:

34,281.86

Structure/Floors:

S/SRC
B3/19F

Completed:

March
1997

Chiba, Chiba

JPR Chiba Bldg.

B -■
2
■

Acquisition Price (millions of yen):

10,200% of Total:

6.2%

Site Area (m2):
Total Floor Space

:80,675.27
SRC B2/17F

Completed:February 1995

2,350

% of Total:

1.4%

Site Area (m2):

1,382.35

Yokohama, Kanagawa

Total Floor Space (m2):

9,072.57

Tsurumi fuga 1

Structure/Floors:

S/SRC
B1/13F

Completed:

January
1991

Asahi-Life Yokohama Nihon Odori Bldg.

12,326.30(m2)Structure/Floors:

Acquisition Price(millions of yen):

Yokohama, Kanagawa

16

Tanashi ASTA

3,755.01:

Total Floor SpaceB -●1 (Retail)■Nishitokyo, TokyoB -●2 (Retail)
■

B -■
3
■

Acquisition Price(millions of yen):

2,927

Acquisition Price (millions of yen):

3,040% of Total:

1.8%% of Total:

1.9%

Site Area (m2):

1,100.59

Total Floor Space (m2):9,146.52

Structure/Floors:

SRC
B1/11F

Completed:

October
1989

Site Area (m2):

1,962.18

Total Floor Space (m2):

13,543.32

Structure/Floors:

SRC B2/7F

Completed:

September 1985

Toshima-ku, Tokyo

JPR Ikebukuro Bldg.

B -■
4
■

Yokohama, Kanagawa

Shinyokohama 2nd Center Bldg.

Acquisition Price(millions of yen):

2,040

Acquisition Price(millions of yen):920% of Total:

1.2%% of Total:

0.6%

Site Area (m2):

772.77Site Area (m2):

841.71

Total Floor Space (m2):

6,468.08

Total Floor Space (m2):

7,781.93

Structure/Floors:

SRC
B1/9F

Structure/Floors:

S/SRC
B2/12F

Completed:

October
1980

Completed:

August1991

Kawaguchi, Saitama

Kawaguchi Center Bldg.

B -■
6
■

B -■
7
■

Taito-ku, TokyoSEF Bldg.

Acquisition Price(millions of yen):

8,100

Acquisition Price(millions of yen):

3,250% of Total:

4.9%% of Total:

2.0%

4,524.61

Site Area

Total Floor Space (m2):

28,420.85

Total Floor Space (m2):

8,490.44

Structure/Floors:

S/SRC
B2/15F

Structure/Floors:

S/SRC
B1/8F

Completed:February
1994

Completed:

October
1992

Site Area

(m2)

:

(m2)

:

B -■
5
■

1,242.97

Other Cities — Hokkaido, Tohoku and Hokuriku
Sapporo, Hokkaido

North 33 Bldg.

C -■
10
■

Sapporo, Hokkaido

Park East Sapporo

Acquisition Price(millions of yen):

3,700

Acquisition Price(millions of yen):

2,150% of Total:

2.3%% of Total:

1.3%

Site Area (m2):

1,382.12

Site Area (m2):

1,808.26

Total Floor Space (m2):

10,568.23

Total Floor Space (m2):

10,865.75

Structure/Floors:

SRC
B1/12F

Structure/Floors:

SRC
B1/8F

Completed:February
1992

Completed:

November
1985

C -■
11
■

17

Sendai, Miyagi

Sompo Japan Sendai Bldg.

C -■
12
■

Niigata, Niigata

Niigata Ekinan Center Bldg.

Acquisition Price(millions of yen):

3,150

Acquisition Price(millions of yen):

2,140% of Total:

1.9%% of Total:

1.3%

Site Area (m2):

1,895.67

Site Area (m2):

2,706.99

Total Floor Space (m2):

10,783.52

Total Floor Space (m2):

19,950.42

Structure/Floors:

SRC
B1/12F

Structure/Floors:

S/SRC
B1/10F

Completed:

December
1997

Completed:

March
1996

C -■
1
■

Other Cities — Osaka
Osaka, Osaka

Meiji Yasuda-Life Osaka Umeda Bldg.

Osaka, Osaka

Kuraray Nissay Bldg.

Acquisition Price(millions of yen):

8,300

Acquisition Price(millions of yen):

13,000% of Total:

5.1%% of Total:

7.9%

Site Area (m2):5,999.33

Site Area (m2):

3,518.68

Total Floor Space (m2):

52,982.94

Total Floor Space (m2):

17,897.56

Structure/Floors:

S/SRC
B2/31F

Structure/Floors:

SRC
B1/8F

Completed:

June 2000

Completed:

April
1990

Osaka, Osaka

Tokyo Tatemono Honmachi Bldg.

18

C -■
2
■

C -■
4
■

Osaka, Osaka

Dojima F Bldg.

Acquisition Price(millions of yen):

4,150

Acquisition Price(millions of yen):

2,140% of Total:

2.5%% of Total:

1.3%

Site Area (m2):

1,432.64

Site Area (m2):

668.11

Total Floor Space (m2):

14,619.52

Total Floor Space (m2):

5,696.01

Structure/Floors:

SRC
B3/9F

Structure/Floors:

SRC
B2/9F

Completed:February
1970

Completed:

October1993

C -●1 (Retail)
■

C -■
17
■

Other Cities — Chubu, Kinki, Chugoku and Shikoku
Nagoya-shi, Aichi

Nagoya Kowa Bldg.

C -■
16
■

Wakayama, Wakayama

Sompo Japan Wakayama Bldg.

Acquisition Price(millions of yen):

4,550

Acquisition Price(millions of yen):

1,670% of Total:

2.8%% of Total:

1.0%

Site Area (m2):

992.31Site Area (m2):

1,128.45

Total Floor Space (m2):

7,340.18

Total Floor Space (m2):

6,715.07

Structure/Floors:

S 9F

Completed:

July 1996

Structure/Floors:

Building: S B1/11F
Parking: S 1F

C -■
13
■

Completed:

Building: January
2003
Parking: December
1986

Hiroshima, Hiroshima

SK Hiroshima Bldg.

C -■
15
■

Takamatsu, Kagawa

Asahi-Life Takamatsu 2nd Bldg.

Acquisition Price(millions of yen):

947

Acquisition Price(millions of yen):872% of Total:

0.6%% of Total:

0.5%

Site Area (m2):

502.41Site Area (m2):

579.99Total Floor Space (m2):

4,268.70

Total Floor Space (m2):

3,471.55

Structure/Floors:

SRC B1/9F

Structure/Floors:

SRC 8F

Completed:

December
1989

Completed:

August1981

Takamatsu, Kagawa

JPR Takamatsu Bldg.
Acquisition Price(millions of yen):

2,130% of Total:

1.3%

Site Area (m2):

1,407.78

Total Floor Space (m2):

7,409.08

Structure/Floors:

SRC
B1/10F

Completed:

September
1982
March
1984
(extension)

C -■
5
■

C -■
6
■

19

Other Cities — Kyushu and Okinawa
Fukuoka, Fukuoka

JPR Hakata Bldg.

C -■
7
■

Naha, Okinawa

JPR Naha Bldg.

Acquisition Price(millions of yen):

2,900

Acquisition Price(millions of yen):

1,560% of Total:

1.8%% of Total:

1.0%

Site Area (m2):

1,214.63

Site Area (m2):

959.87

Total Floor Space (m2):

9,828.73

Total Floor Space (m2):

5,780.71

Structure/Floors:

S/SRC
12F

Completed:

October
1991

Structure/Floors:

Building: S/RC
B1/12F
Parking: S1F
Completed:

C -■
9
■

Building: June 1985
Parking: November
2003

C -■
8
■

Fukuoka, Fukuoka

Asahi-Life Fukuoka 3rd and 4th Bldg.
Acquisition Price(millions of yen):

2,873% of Total:

1.8%

Site Area(m2)

2,500.86:

Total Floor Space (m2):

7,683.01
(3rd)

(4th)

SRC
B1/10F(3rd)

Structure/Floors:

February
1984
(3rd)

Completed:Fukuoka, Fukuoka

Tenjin 121 Bldg.

C -■
14
■

Structure/Floors:

SRC 7F(4th)

Completed:

October1986(4th)

Fukuoka, Fukuoka

Semba Fukuoka Bldg.

Acquisition Price(millions of yen):

2,810

Acquisition Price(millions of yen):

1,920% of Total:

1.7%% of Total:

1.2%

1,164.39

Site Area

8,690.95

Total Floor Space

Structure/Floors:

S/SRC
13F

Structure/Floors:

SRC
8F

Completed:

July 2000

Completed:February
1993

Site Area(m2):

Total Floor Space

20

Total Floor Space (m2): 3,723.68

(m2)

:

(m2)

680.63:(m2):

3,874.81

C -■
18
■

REIT STRUCTURE AND EXTERNAL SERVICE PROVIDERS

Asset Management Company

Advisor on Construction
Management/
Property Transfer AgentTokyo Realty Investment
Management, Inc.

Tokyo Tatemono Co., Ltd.

Asset Management

Tenant Agents

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

Investment Corporation

Japan Prime Realty
Investment Corporation

Loan
Corporate Bonds

Liabilities

LenderCorporate Bond
Investor

AssetsInvestment

Real Estate etc.

Unitholder

Unitholders’ Equity

Cash Distribution

Property Manager

Unitholder

Asset Custodian

Asset Custodian
Mizuho Trust & Banking Co., Ltd.

Tokyo Tatemono Co., Ltd. performs agency services forthe signing of real estate leasing contracts (“generaltenant agency services”) under a commission from theowners of real estate, in order to provide uniform tenant
recruitment and sales services for the Company. Tokyo
Tatemono also has been commissioned by TRIM toundertake “property transfer services.” Tokyo Tatemono

Administrative Agent

Administrative Agent
Mizuho Trust & Banking Co., Ltd.

also provides advice on rental operations management
and construction planning management work (“leasing
management/construction management services” or“LM /CM services”) to TRIM.
Yasuda Real Estate Co., Ltd. and Taisei Corporation
provide general tenant agency services for real estate, ascommissioned by the trustees.

21

making in connection with the acquisition or leasing ofproperties and acting as an agent or broker of suchtransactions based on relevant judgement), (2) services
regarding funding by JPR, (3) reporting to JPR and (4)any other services related to or affiliated with the above(the above services are collectively called “AssetManagement Service” or “AM Service”).

Tokyo Realty Investment Management, Inc.
Tokyo Realty Investment Management, Inc. (“TRIM”)
concluded the asset management contract with JPR on
September 27, 2001. Based on the contract, TRIM provides asset management services as a REIT Management
Company under the Investment Trust Law.
TRIM is assigned to provide (1) services regarding
asset management for JPR (including all decision-

Shareholders’ Meeting
Auditors
Board of Directors
C E O
Compliance Committee

Investment Committee
Investment Management
Division

ResearchGroup

Investment
Group

Corporate Planning/
Administration Division

Financial Division

Asset
Management
Group

FinanceGroup

FundManagement
Group

IR Group

AccountingGroup

Shareholders in TRIM (As of June 30, 2004)
Sompo Japan Insurance Inc.
Tokyo Tatemono Co., Ltd.

10%
Yasuda Real
Estate Co., Ltd.

26%
20%

20%
Taisei Corporation

24%
Meiji Yasuda-Life
Insurance Company*

Note: The Yasuda Mutual Life Insurance Company and Meiji Life Insurance Company
merged on January 1, 2004 to form Meiji Yasuda-Life Insurance Company.

22

Planning/
Human
ResourcesGroup

ComplianceGroupDecision-Making Process of Investment Management
The “Investment Committee” is set as a committee tomake investment decisions as well as its sub-organizations, the “Investment Subcommittee” and the “FundManagement Subcommittee.” Members of these organizations include the CEO, CIO, CFO, CAO, FundManager, Research Manager, Asset Manager andInvestment Management Manager.
The “Investment Committee” is a committee which
formulates fundamental investment policy for the
medium and long term within two fiscal periods, whilethe “Investment Subcommittee” or “Management
Subcommittee” has charge of decisions on issues regarding acquisitions, dispositions and management of individual assets respectively. The Board of Directors isgiven the final authorization on acquisitions or dispositions of individual assets of a certain amount.

Such measures include:a) Acquisitions of property or assets from interested parties
The “investment amount” for any real estate or real estatein trust property must be the appraised value or less(deemed to be the purchase price only, exclusive of taxes
and acquisition costs, etc.). Prior approval of the Board of
Directors of the Company is required. For other designatedassets, the investment amount must be at market prices for
assets for which market prices are available, otherwise at
the appraised value or less.

b) Sales of property or assets to interested parties
The “sales price” for any real estate or real estate in trust
property must be the appraised value or more (deemed to besales price only, exclusive of taxes and selling costs, etc.).
Prior approval of the Board of Directors of the Company isrequired. For other designated assets, the sales price mustbe at market prices for assets for which market prices areavailable, otherwise at the appraised value or more.

Measures to Prevent Conflicts of Interest
TRIM has established the “Compliance Committee”
and “Compliance Subcommittee.” The “Compliance
Subcommittee” oversees the aforementioned committees and determines whether their decision-making
activities strictly adhere to laws and regulations.
TRIM has rules in place governing transactions with“related parties” so as to avoid conflicts of interest. The
Compliance Committee serves to prevent transactions
with conflicts of interest based on the advice of an
outside attorney who is a special member of the committee. Related parties are defined as specific parties
with which transactions have been made or to which
commissions or other payments have been made in therelevant term. These include the following parties,
which have an investment in TRIM or employees
serving as directors or staff at TRIM: Tokyo Tatemono
Co., Ltd., The Meiji Yasuda-Life Insurance Company(formed following the merger between The Yasuda
Mutual Life Insurance Company and Meiji Life
Insurance Company on January 1, 2004), Yasuda Real
Estate Co., Ltd., Taisei Corporation, Sompo Japan
Insurance Inc. (formerly The Yasuda Fire & Marine
Insurance Co., Ltd.) and their affiliates.

c) Leasing of properties to interested parties
Properties may be leased to interested parties provided thatleasing is done under appropriate terms and conditions as
determined from the viewpoint of market trends and standard leasing terms for the property.

d) Property management commissions to interested parties
Commissions are based on the Property Management
Standards. Prior approval of the Board of Directors of theCompany is required.

e) Trading/leasing intermediation fees paid to interested
parties
Trading intermediation fees are limited to up to 3% of the
trading price. Prior approval of the Board of Directors of
the Company is required. Leasing intermediation fees arelimited to the amount equivalent to the contracted rent forone month.

f) Commissioning of construction work to interested parties
Commissions of construction work worth ¥10 million ormore require a comparison against third-party estimatesand proposals. Prior approval of the Board of Directors of
the Company is required.

g) Borrowings from interested parties
Terms of borrowings must be at market levels. Prior
approval of the Board of Directors of the Company isrequired.

23

MANAGEMENT’S DISCUSSION AND ANALYSISRESULTS OF OPERATIONS
The table below is a summary of business results for the periods ended June 30, 2004 and December 31, 2003.
thousands of yen

U.S. dollars

5th Period(Jan. 1, 2004–
June 30, 2004)

4th Period(July 1, 2003–
Dec. 31, 2003)

5th Period(Jan. 1, 2004–
June 30, 2004)

OPERATING REVENUES:¥6,790,658¥6,421,099$62,627,110

Real estate rental revenues

6,790,658

6,250,395

62,627,110

Gain on sale of real estate—

170,704—

OPERATING EXPENSES

3,729,108

3,487,138

34,391,846

OPERATING PROFITS

3,061,550

2,933,961

28,235,264

109,341

1,329

1,008,398

NON-OPERATING REVENUESNON-OPERATING EXPENSES

555,137

466,923

5,119,763

INCOME BEFORE INCOME TAXES

2,615,754

2,468,367

24,123,899

NET INCOME¥2,614,785¥2,467,358$24,114,964

In the fifth fiscal period ended June 30, 2004, JPR experienced
across-the-board growth in most facets of its business operations.
The Company’s property portfolio as of June 30, 2004,
comprised 38 properties, an increase of six tenanted properties,
amounting to ¥163,659 million, covering a leasable floor spaceof 256,329.13 square meters and 437 tenants. During the period,
JPR acquired the Kenwa Building on May 28 for an investmentof ¥5,100 million and the Oval Court Ohsaki Mark West on
June 1 for an investment of ¥3,500 million. Both properties arelocated in Tokyo’s CBD. In the Greater Tokyo area, theKawaguchi Center Building and the SEF Building were added tothe portfolio for ¥8,100 million on February 13 and ¥3,250
million on March 1, respectively. In regions outside of Tokyo,
JPR acquired two office buildings, the Dojima F Building in
Osaka on January 23, and the Semba Fukuoka Building inFukuoka on June 11 for a total investment of ¥4,060 million.
Accordingly, the Company’s property portfolio increased a totalof ¥24,010 million based on acquisition value, which
contributed significantly to JPR’s increased revenues andearnings for the period. During the period under review, theCompany did not divest any of its interests.
Operating revenues for the fifth fiscal period rose 5.8% to¥6,791 million and comprised real estate rental revenues, which
climbed 8.6% from ¥6,250 million. For the period under review,
the occupancy rate increased 0.5 of a percentage point to 93.2%.
Operating expenses, amounted to ¥3,729 million, an increase of
6.9%, which included property tax and other items expensed
during the period. As a result of the aforementioned factors,
operating profits edged up 4.3% to ¥3,062 million. In nonoperating revenues and expenses, JPR reported income on
settlement of management association accounts of ¥107 million.
Such income is reported only for the fiscal period ended June 30
since the accounts of the management association are settled
only once a year, normally in May or June. In line with theacquisition of additional properties, JPR incurred an increase in
non-operating expenses relating to the increased debt and theissue of corporate bonds. Despite these factors, income before
income taxes rose 6.0% to ¥2,616 million and net income
climbed by the same margin to ¥2,615 million.

CASH DISTRIBUTIONSIn the fifth fiscal period, cash distribution per unit was ¥6,081,
representing 100% of distributable income, compared with
¥5,738 in the fourth fiscal period. The number of investment

units outstanding at the end of June 30, 2004 remained
unchanged standing at 430,000 units
thousands of yen except per unit data

Cash distributions for theperiod ended June 30, 2004

Cash distributions for theperiod ended Dec. 31, 2003

Net income¥2,614,785¥2,467,358

Total cash distributions

2,614,830

2,467,340

6,081

5,738

Cash distribution per unit

CAPITALIZATION
Paid-In Capital
For the fifth fiscal period JPR reported net income of ¥2,615
million and total unitholders’ equity of ¥91,729 million.

24

Unit Information
The Company was listed on the Tokyo Real Estate Investment
Trust Stock Exchange on June 14, 2002 under the securities

code 8955 with the issue of 289,600 investment units. Since
initial public offering, JPR has increased capital through an
additional public offering in July 2003, with the current numberof investment units outstanding at the end of June 30, 2004
totaling 430,000. The high and low closing prices for theperiods indicated are provided in the table on the following page.

yen

Month

June 2002
July 2002
Aug. 2002
Sept. 2002
Oct. 2002
Nov. 2002
Dec. 2002
Jan. 2003
Feb. 2003
Mar. 2003
Apr. 2003
May 2003
June 2003

High

Low

202,000
203,000
205,000
205,000
219,000
240,000
240,000
239,000
227,000
229,000
249,000
283,000
271,000

199,000
200,000
202,000
203,000
203,000
215,000
225,000
220,000
219,000
217,000
227,000
246,000
222,000

yen

Month

July 2003
Aug. 2003
Sept. 2003
Oct. 2003
Nov. 2003
Dec. 2003
Jan. 2004
Feb. 2004
Mar. 2004
Apr. 2004
May 2004
June 2004

Equity and Debt Financing
As part of its strategy that places the utmost importance on
financial stability, the Company concerned itself with steadilyextending asset value, undertaking the raising of stablemedium-term and flexible short-term financing. In addition, as
one of its diversified debt financing methods, the Company set
up a commitment line. Moreover, JPR issued series of bonds.

High

Low

255,000
251,000
254,000
265,000
270,000
268,000
272,000
264,000
305,000
299,000
293,000
293,000

234,000
241,000
240,000
251,000
260,000
260,000
260,000
257,000
262,000
269,000
272,000
282,000

Striving to ensure an acceptable debt maturity profile, a portionof JPR’s corporate bonds are of 10-year maturity. On the issue ofcorporate bonds, JPR was assigned a rating of A– from Standard& Poors, A+ from Rating and Investment Information, Inc.
and A3 from Moody’s Investors Service. As a result, debts
outstanding were ¥55,166 million as of June 30, 2004 and thebalance of corporate bonds had reached ¥22,000 million.

Investment performance of JPR since its IPO on June 14, 2002
Unit Price (yen)Performance (%)

JPR Unit Price Performance (left scale)160

300,000

TOPIX Performance (left scale)140

275,000

JPR Unit Price (right scale)120

250,000

100

225,000

80

200,00060

175,000

40
2002/6 7

8

9

10

11

12 2003/1 2

3

4

5

6

150,000
7

8

9

10

11

12 2004/1 2

3

4

5

6

Borrowings-1
Category

LenderThe Bank of Fukuoka, Ltd.
The Chugoku Bank, Ltd.
The Norinchukin Bank
The Bank of Tokyo-Mitsubishi, Ltd.
UFJ Bank Limited
The Mitsubishi Trust & Banking Corp.

Short-Term
Borrowings

Aozora Bank, Ltd.
The Iyo Bank, Ltd.
Resona Bank, LimitedAozora Bank, Ltd.

140
Resona Bank, Limited
Total

130
120
110

Drawdown
DateJan. 23, 2004
Feb. 13, 2004
May 27, 2004
Feb. 13, 2004
Feb. 27, 2004
Mar. 25, 2004
May 27, 2004
May 27, 2004
June 10, 2004
May 27, 2004
June 10, 2004
Mar. 28, 2003
Sept. 1, 2003
Oct. 15, 2003
Mar. 28, 2003
Sept. 25, 2003

Balance as ofJune 30, 2004
(thousands of yen)
¥ 2,000,000
4,000,000
1,000,000
3,500,000
3,000,000
2,000,000
3,500,000
3,000,000
1,000,000
1,000,000
1,200,000—————¥25,200,000

Balance as ofDec. 31, 2003
(thousands of yen)
¥
—
—
—
—
—
—
—
—
—
—
—
3,770,000
2,400,000
1,800,000
3,000,000
1,930,000¥12,900,000

Average
Interest
Rate
0.686%
0.585%
0.520%
0.685%
0.530%
0.577%
0.520%
0.520%
0.520%
0.620%
0.520%
0.928%
0.827%
0.828%
0.928%
0.828%

Repayment
Date
Jan. 23, 2005
Feb. 10, 2005
May 27, 2005
Feb. 10, 2005
Feb. 25, 2005
Mar. 25, 2005
Jan. 27, 2005
Jan. 27, 2005
Jan. 27, 2005
Jan. 27, 2005
Jan. 27, 2005
Mar. 27, 2004
Mar. 27, 2004
Mar. 27, 2004
Mar. 27, 2004
Mar. 27, 2004

Repayment
MethodPrincipal
lump sum
repayment
on maturity

Remarks

Unsecured/
Unguaranteed /Non-subordinated

Secured /Unguaranteed /Non-subordinated25

Borrowings-2
Category

Lender
Sompo Japan Insurance Inc.

Long-Term
Borrowings

The Chuo Mitsui Trust andBanking Company, Limited
SumitomoLife Insurance Company
Resona Bank, LimitedAozora Bank, Ltd.
Meiji Yasuda
Life Insurance Company

Drawdown
Date

Balance as ofJune 30, 2004
(thousands of yen)Mar. 25, 2004

¥ 1,000,000

Dec. 27, 2001

Average
Interest
Rate

Repayment
Date—

0.873%

Mar. 23, 2007

6,500,000

10,000,000

1.234%

Dec. 27, 2006

Dec. 27, 2001

6,500,000

10,000,000

1.234%

Dec. 27, 2006

June 19, 2002
June 19, 2002
Dec. 27, 2001
June 21, 2002
Mar. 28, 2003

1,000,000
1,000,000
4,783,000
4,783,000
4,400,000¥29,966,000¥55,166,000

2,000,000
3,000,000
4,783,000
4,783,000
5,000,000¥39,566,000¥52,466,000

1.295%
1.295%
1.700%
2.050%
1.750%

Dec. 27, 2006
Dec. 27, 2006
Dec. 26, 2008
June 21, 2011
Mar. 28, 2013

Total
Total Borrowings Balance

Balance as ofDec. 31, 2003
(thousands of yen)¥

Repayment
MethodPrincipal
lump sum
repayment
on maturity

Remarks
Unsecured/Unguaranteed/
Non-subordinated

Secured /Unguaranteed /Non-subordinatedCorporate Bonds
Total Issue
AmountSubscription
Date

Payment
Date

Issue Price

Coupon Rate
0.84% perannum

Jan. 29, 2004

Feb. 12, 2004

Unsecured/
Unguaranteed

CollateralFirst Series of Corporate Bonds
Japan Prime Realty Investment Corporation’sFirst Series Unsecured Bonds¥10 billion¥100 with a parvalue of ¥100

Second Series of Corporate Bonds
Japan Prime Realty Investment Corporation’s
Second Series Unsecured Bonds¥7 billion¥100 with a parvalue of ¥100

1.38% perannum

Jan. 29, 2004

Feb. 12, 2004

Unsecured/
Unguaranteed

Third Series of Corporate Bonds
Japan Prime Realty Investment Corporation’s
Third Series Unsecured Bonds¥5 billion¥100 with a parvalue of ¥100

2.32% perannum

Jan. 29, 2004

Feb. 12, 2004

Unsecured/
Unguaranteed

MAJOR TENANTS
The following table shows JPR’s top ten tenants by leased floor
space as of June 30, 2004. The only major changes to occur
during this period were the addition of the Kawaguchi Center#

TenantBldg. to the list of properties that house Sompo Japan Insurance
Inc. operations and the decline in floor space leased to Meiji
Yasuda Life Insurance Company.

Industry

Property

Leased Floor Space(m2)%

40,700.31

17.0

18,586.97
8,076.85

7.8
3.4

7,547.25

3.2

5,959.86
5,884.10

2.5
2.5

2
3

The Loft Co., Ltd.
TOWER RECORDS JAPAN INC.

4

Sompo Japan Insurance Inc.

Casualty Insurance

5
6

Iwatani International Corporation
Tohmatsu & Co.

Wholesale
Accounting Firm

Tanashi ASTA
Tsurumi fuga 1
Kuraray Nissay Bldg.
Jinnan 1-chome Bldg.
Sompo Japan Sendai Bldg.
Sompo Japan Wakayama Bldg.
Kawaguchi Center Bldg.
Tokyo Tatemono Honmachi Bldg.
MS Shibaura Bldg.

7

Japan Future Information Technology &Systems Co., Ltd.

Other Services

Arca East

4,475.62

1.9

8

Mitsubishi Electric Information Systems
Corporation

Electronics and Electrical Appliances

MS Shibaura Bldg.

3,922.74

1.6

3,669.13

1.5

3,094.50

1.3

1

The Seiyu, Ltd.
Retail9

Meiji Yasuda Life Insurance Company

Life Insurance

10

Kanematsu Electronics Ltd.

Electronics and Electrical Appliances

JPR Ikebukuro Bldg.
Meiji Yasuda Life Osaka Umeda Bldg.
JPR Naha Bldg.
Niigata Ekinan Center Bldg.
Shinyokohama 2nd Center Bldg.
Kanematsu Bldg.
Kanematsu Bldg. Annex

PROPERTY MANAGEMENT
In order to establish a portfolio that successfully attracts new
tenants and highlights differentiation with other competing
properties, planned refurbishment and repair work, together
with proactive measures, are necessary. To give particular

26

examples, installation of upgraded air-conditioning equipment
at the Asahi-Life Takamatsu 2nd Building and refurbishment of
space shared by the Asahi-Life Fukuoka 3rd and 4th Buildings,
is intended to strengthen their competitiveness.

But as a result of the continuing difficult business conditions in
the office leasing market in regional cities, the overall
occupancy rate at the end of the period was 93.2%, an increaseof 0.5 of a percentage point compared with the end of theprevious fiscal period.
Property Name

North 33 Bldg.

Planned Capital Expenditures
JPR has the following capital expenditure plan for maintenanceas of June 30, 2004, on its properties. Planned project costs
include portions classified into expenses for accounting
purposes.
PurposeSchedule

Planned Project Cost (Millions of yen)

Total

Paid infiscal year
under review

Total
payments—

Renew exterior repair seals

Aug. 2004 – Nov. 2004

41—

Kanematsu Bldg.

Renew exterior repair seals (stage 1 construction)

Aug. 2004 – Nov. 2004

26

—

—

Asahi-Life Yokohama Nihon Odori Bldg.

Renew exterior repair seals (stage 2 construction)

Aug. 2004 – Nov. 2004

42

—

—

Kuraray Nissay Bldg.

Exterior maintenanceSept. 2004 – Dec. 2004

71

—

—

SK Hiroshima Bldg.

New air conditioner on 2nd floor

Aug. 2004 – Nov. 2004

21

—

—

SK Hiroshima Bldg.

Renew exterior repair seals

Aug. 2004 – Sept. 2004

28

—

—

JPR Takamatsu Bldg.

Maintenance on exterior of parking facility

Sept. 2004 – Dec. 2004

23

—

—

Repair interior of common spaces (stage 2 construction)

Aug. 2004 – Sept. 2004

21

—

—

Asahi-Life Fukuoka 3rd/4th Bldg.

Capital Expenditures During Fiscal Year Under Review
JPR made the following capital expenditures related to its
properties.
Most capital expenditures comprised repair work tomaintain and improve tenant satisfaction, maintenance oncommon areas to attract new tenants and construction
including the installation of an IT floor for leased offices. JPR
also spent ¥139 million on improvements besides those listed.
PurposeSchedule

Capital Expenditure(Millions of yen)

Renew air conditioner packages on each floor

Mar. 2004 – May 2004

110

Renovation (maintenance on common area of 1st floor hall, repairs on
special common area on 6th floor, upgraded air-conditioning system toindividually controlled units, engineering supervising, etc.

Jan. 2004 – Apr. 2004

108

Property Name

Asahi-Life Takamatsu 2nd Bldg.
JPR Ikebukuro Bldg.
JPR Takamatsu Bldg.

Renew air-conditioning chiller

Apr. 2004 – May 2004

26

MS Shibaura Bldg.

Maintenance on emergency generator

Apr. 2004 – June 2004

22

Asahi-Life Fukuoka 3rd/4th Bldg.

Repairs on interior of common areas

Apr. 2004 – May 2004

17

Repairs of common areas, installation of office equipment floors,
maintenance of parking, air conditioners and disaster prevention facilities

182

Other capital expenditures
Total

465

Note: Improvement costs include construction management compensation (¥3 million) paid to real estate management companies in addition to amounts for
improvement work.

Cost Reductions
With regard to management costs, changing the nature andrequirements related to refurbishment work carried out on the
JPR Ikebukuro Building brought about a reduction of fees paid
to external suppliers of 30%, those of the MS Shibaura Buildingby 10%. JPR changed the property manager of The Asahi-Life
Yokohama Nihon Odori Building to the Tokyo Tatemono Co.,
Ltd. as a part of the strategy to consolidate property management (PM) companies and the implementation of property
management fee reductions.

Value Up Realty Strategy
Regarding the Company’s Value Up Realty Strategy, of the six
properties to which the value up strategy applies, threeincluding the JPR Ikebukuro Building had witnessed
improvements in occupancy rates of over 10% at the end of theperiod under review following completion of large-scalerenovations.

SUBSEQUENT EVENTSIn the subsequent six-month period, ending December 31,
2004, JPR has continued to make progress with furthering its
acquisition strategy. As a part of this strategy, the Company

acquired the Shinjuku Square Tower office building in central
Tokyo for ¥10,000 million on July 2, 2004.

27

FINANCIAL STATEMENTS
BALANCE SHEETS(As of June 30, 2004 and December 31, 2003)
thousands of yen

End of 5th Period(as of June 30, 2004)

U.S. dollars (Note 2)

End of 4th Period
End of 5th Period(as of Dec. 31, 2003) (as of June 30, 2004)ASSETS
CURRENT ASSETS:
Cash and cash equivalents¥ 17,999,938¥ 17,111,017$ 166,005,146

Rental receivables

148,578

105,570

1,370,272

Consumption tax refundable

372,948—

3,439,525

Other current assets

208,133

118,038

1,919,512

18,729,597

17,334,625

172,734,455

Land

97,139,926

83,695,367

895,876,843

Buildings and structures

69,736,603

57,990,142

643,148,607

Machinery and equipment

1,230,050

1,066,039

11,344,183

Tools, furniture and fixtures

12,687

9,071

117,005

Total current assets
PROPERTY AND EQUIPMENT AT COST:

Entrusted construction in progress
SubtotalLess accumulated depreciation

1,869

2,444

17,237

168,121,135

142,763,063

1,550,503,875(4,737,067)(3,538,924)(43,687,790)

163,384,068

139,224,139

1,506,816,085

Deposits

10,10010,10093,148Long-term prepaid expenses

4,450

7,322

41,038Net property and equipment
INVESTMENTS AND OTHER ASSETS:

Deferred corporate bond issuance
TOTAL ASSETS
The accompanying notes form an integral part of these financial statements.

28

125,393—

1,156,446¥182,253,608¥156,576,186$1,680,841,172

thousands of yen

End of 5th Period(as of June 30, 2004)

U.S. dollars (Note 2)

End of 4th Period
End of 5th Period(as of Dec. 31, 2003) (as of June 30, 2004)

LIABILITIESCURRENT LIABILITIES:
Trade accounts payable¥

890,323¥

979,067$

8,211,045

Accounts payable

352,922350,816

3,254,836

Short-term debt

25,200,000

12,900,000

232,408,005

Accrued expenses

139,995

10,934

1,291,109

930

1,027

8,575

Accrued income taxes
Accrued consumption taxes
Rent received in advance
Total current liabilities—

56,860—766,494555,270

7,069,021

27,350,664

14,853,974

252,242,591

22,000,000—

202,895,878

LONG-TERM LIABILITIES:Corporate bonds
Long-term debt

29,966,000

39,566,000

276,362,630

Deposits received from tenants

11,208,259

10,574,972

103,368,615

Total long-term liabilities

63,174,259

50,140,972

582,627,123

TOTAL LIABILITIES

90,524,923

64,994,946

834,869,714

Unitholders’ capital

89,113,804

89,113,804

821,855,608

Retained earnings

2,614,881

2,467,436

24,115,850

UNITHOLDERS’ EQUITYTOTAL UNITHOLDERS’ EQUITYTOTAL LIABILITIES AND UNITHOLDERS’ EQUITY

91,728,685

91,581,240

845,971,458¥182,253,608¥156,576,186$1,680,841,172

29

STATEMENTS OF INCOME AND RETAINED EARNINGS(For the six-month periods ended June 30, 2004 and December 31, 2003)
thousands of yen

U.S. dollars (Note 2)

5th Period(Jan. 1, 2004–
June 30, 2004)

4th Period(July 1, 2003–
Dec. 31, 2003)

5th Period(Jan. 1, 2004–
June 30, 2004)

OPERATING REVENUES:¥6,790,658¥6,421,099$62,627,110

Real estate rental revenues

6,790,658

6,250,395

62,627,110

Gain on sale of real estate—

170,704—

OPERATING EXPENSES:

3,729,108

3,487,138

34,391,846

Real estate rental expenses

3,268,801

2,996,386

30,146,648

Asset management fees

293,872

276,3442,710,248

Administrative service fees

64,52975,607595,123

Other operating expenses
OPERATING PROFITSNON-OPERATING REVENUES:Interest received
Income on settlement of management association accounts
Other non-operating revenues
NON-OPERATING EXPENSES:

101,906

138,801

939,827

3,061,550

2,933,961

28,235,264

109,341

1,329

1,008,398

114

103

1,051

106,678—

983,840

2,549

1,226

23,507555,137

466,923

5,119,763

294,764

350,649

2,718,468

Loan arrangement fees

95,80830,704

883,590

Interest expense on corporate bonds

113,262—

1,044,564

Interest expense

Amortization of corporate bond issuance costs

25,079—231,289

Other non-operating expenses

26,22485,570241,852

INCOME BEFORE INCOME TAXES

2,615,754

2,468,367

24,123,899

953

1,047

8,785

INCOME TAXES:
Current
Deferred
NET INCOMERETAINED EARNINGS BROUGHT FORWARD
RETAINED EARNINGS AT END OF PERIOD
The accompanying notes form an integral part of these financial statements.

30

16

(38)

150

2,614,785

2,467,358

24,114,964

96

78

886

¥2,614,881¥2,467,436$24,115,850

STATEMENTS OF CASH FLOWS (Unaudited)(For the six-month periods ended June 30, 2004 and December 31, 2003)
thousands of yen

U.S. dollars (Note 2)

5th Period(Jan. 1, 2004–
June 30, 2004)

4th Period(July 1, 2003–
Dec. 31, 2003)

5th Period(Jan. 1, 2004–
June 30, 2004)

CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes
Depreciation
Amortization of corporate bond issuance costs
Interest income
Interest expense
Increase in rental receivables
Increase (decrease) in consumption tax refundable
Increase in prepaid expenses¥ 2,615,754
1,200,523
25,079(114)
408,026(43,008)(372,948)(31,221)¥ 2,468,367
1,044,355—(103)
350,649(41,796)
127,735(11,708)$ 24,123,899
11,071,873
231,289(1,051)
3,763,032(396,645)(3,439,524)(287,936)

Decrease (increase) in trade accounts payable
Decrease (increase) in accounts payable
Decrease (increase) in accrued consumption taxes
Increase in rent received in advance
Decrease in entrusted fixed properties
Long-term prepaid expenses paid
Change in other current assets/liabilities
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities(88,743)(12,603)(56,860)
211,224—(3,900)(51,195)
3,800,014
114(278,965)(1,050)3,520,113

206,818
18,56356,86024,026418,920—
59,176
4,721,862
103(372,079)(968)
4,348,918(818,440)(116,234)(524,390)
1,948,017—(35,968)(472,144)
35,045,778
1,051(2,572,764)(9,681)
32,464,384

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
Purchases of entrusted property and equipment
Payment of leasehold and security deposits received(3,420,184)(21,941,192)(25,262)(4,721,223)(10,454,938)(11,629)(31,542,785)(202,353,517)(232,980)

Proceeds from leasehold and security deposits received
Payment of entrusted leasehold and security deposits received
Proceeds from entrusted leasehold and security deposits received
Net cash used in investing activities

442,706(1,272,811)
1,488,654(24,728,089)

373,594(5,997,449)
1,361,052(19,450,593)

4,082,875(11,738,551)
13,729,169(228,055,789)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings
Repayment of short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from corporate bonds
Payments of corporate bond issuance costs
Proceeds from issuance of units
Distributions to unitholders
Net cash provided by financing activities
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODCASH AND CASH EQUIVALENTS AT END OF PERIOD

25,200,000(12,900,000)
1,000,000(10,600,000)
22,000,000(150,472)—(2,452,631)
22,096,897
888,921
17,111,017¥17,999,938

6,130,000(22,730,000)—(434,000)——
32,131,804(1,988,940)
13,108,864(1,992,811)
19,103,828¥17,111,017

232,408,005(118,970,765)
9,222,540(97,758,923)
202,895,878(1,387,735)—(22,619,485)
203,789,515
8,198,110
157,807,036$166,005,146

The accompanying notes form an integral part of these financial statements.

31

STATEMENTS OF CHANGES IN UNITHOLDERS’ EQUITY(For the six-month periods ended June 30, 2004 and December 31, 2003)
unitholders’ equity

BALANCE AS OF JUNE 30, 2003
Public offering

sharesthousands of yen

289,600¥ 58,972,499

140,400

32,131,804—(1,990,421)

Cash distributions paid
Net income

U.S. dollars (Note 2)—

2,467,358

430,000

91,581,240$ 844,611,636

Cash distributions paid—

(2,467,340)(22,755,142)

Net income—

2,614,785

24,114,964

430,000¥91,728,685$845,971,458

BALANCE AS OF DECEMBER 31, 2003

BALANCE AS OF JUNE 30, 2004
The accompanying notes form an integral part of these financial statements.

NOTES TO FINANCIAL STATEMENTS(June 30, 2004 and December 31, 2003)

1. ORGANIZATION
Japan Prime Realty Investment Corporation (the “Company”),
an externally managed real estate investment corporation, wasincorporated on September 14, 2001 under the Law
Concerning Investment Trusts and Investment Corporations ofJapan, or the Investment Trust Law. The Company was formed
to invest primarily in real estate in Japan.
The Company was originally formed by Tokyo Tatemono
Co., Ltd., Taisei Corporation, and Tokyo Realty Investment
Management, Inc. (“TRIM”), and commenced its operation on
November 16, 2001 by acquiring 13 properties. TRIM, alicensed asset management company, provides professional asset
management services of office and retail properties to theCompany. TRIM is currently owned 26% by Tokyo Tatemono
Co., Ltd., 24% by Meiji Yasuda Life Insurance Company, 20%

by Yasuda Real Estate Co., Ltd., 20% by Taisei Corporation,and 10% by Sompo Japan Insurance Inc.
On June 14, 2002, the Company raised ¥25,862 million
through an initial public offering and was listed on the Tokyo
Stock Exchange (Securities code: 8955).
On July 14, and August 9, 2003, the Company raised¥32,132 million ($299,933 thousand) through a second offering(unitholders’ capital as of December 31, 2003: ¥89,114 million($831,829 thousand)).
As of June 30, 2004, the Company owned a portfolio of 38
properties containing an aggregate of approximately 256,329.13
square meters of leasable area, and leased its office space to 437
tenants. The occupancy rate is 93.2%.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBASIS OF PRESENTING FINANCIAL STATEMENTS
The Company maintains its accounting records and prepares its
financial statements in accordance with accounting principles
generally accepted in Japan (“Japanese GAAP”), including
provisions set forth in the Investment Trust Law, the JapaneseCommercial Code, the Securities and Exchange Law of Japanand the related regulations, which are different in certain
respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.
The accompanying financial statements are a translation of
the financial statements of the Company, which were preparedin accordance with Japanese GAAP and were presented in the
Securities Report of the Company filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial
statements, certain reclassifications have been made to the32

financial statements issued domestically in order to present
them in a format which is more familiar to readers outside
Japan. In addition, the notes to financial statements include
information which might not be required under Japanese
GAAP but is presented herein as additional information.
The Company’s accounting period ends at the end of Juneand December. The Company’s fifth accounting period began
on January 1, 2004 and ended on June 30, 2004.
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of¥108.43=US$1.00, the foreign exchange rate on June 30, 2004,
has been used for translation. The inclusion of such amounts is
not intended to imply that Japanese yen has been or could bereadily converted, realized or settled into U.S. dollars at thatrate or any other rate.

the properties were liable for property taxes for the calendar
year including the period from the date of purchase by theCompany through the end of the year since the taxes are
imposed on the registered owner as of January 1, based on theassessment made by the local government. The Company paid
the amount equivalent to the property taxes to the sellers
applicable to the period since acquisition and included theamount equivalent to the taxes in the purchase price of each
property and capitalized as cost of the property.

PROPERTY AND EQUIPMENT
Property and equipment is stated at cost, less accumulated
depreciation. The costs of land, buildings and building
improvements include the purchase price of property, legal fees
and acquisition costs. Depreciation of property and equipment
is calculated on a straight-line basis over the estimated useful
lives of the assets ranging as follows:
Buildings.......................................................................3–64 years
Structures ...................................................................10–20 years
Machinery and equipment ...........................................3–15 years
Tools, furniture and fixtures .........................................5–15 years

CONSUMPTION TAXES
Consumption taxes withheld and consumption taxes paid are
not included in the statements of income. The consumption
taxes paid are generally offset against the balance ofconsumption taxes withheld. As such, the excess of payments
over amounts withheld is included in the current assets and theexcess of amounts withheld over payments is included in thecurrent liabilities.

Expenditures for repairs and maintenance are charged tooperations as incurred. Significant renewals and betterments
are capitalized.
DEFERRED ASSETS
Corporate bond issuance costs are amortized over a period of
approximately three years, comprised of six fiscal periods, withan equal amount amortized in each fiscal period.

CASH AND CASH EQUIVALENTS
The statements of cash flows are provided for information
purposes only since they are not required to be prepared by theInvestment Trust Law, the Japanese Commercial Code, theSecurities and Exchange Law of Japan and the related
regulations. Cash and cash equivalents consist of cash on hand,deposits placed with bank and short-term investments which
are highly liquid, readily convertible to cash and withinsignificant risk of price fluctuation, with original maturities ofthree months or less.

REVENUE RECOGNITION
Revenues from leasing of office space are recognized as rent
accrued over the lease period.
TAXES ON PROPERTY AND EQUIPMENT
Property and equipment is subject to property taxes and city
planning taxes on a calendar year basis. These taxes are
generally charged to expenses during the period. The sellers of

3. REAL ESTATE
Real estate at June 30, 2004 and December 31, 2003 consisted of the following:

As of June30, 2004
Acquisition Costs

Land¥ 4,750,736

Buildings¥

Book Value

Acquisition Costs

4,750,736¥ 3,171,216

4,352,438

Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation

111,841

U.S. dollars

As of December
31, 2003

As of June30, 2004¥

Book Value

Acquisition Costs

3,171,216$ 43,813,851

2,540,669
4,240,597

40,122
4,809

thousands of yen

48,12635,3132,237

43,813,851

40,140,535
2,492,543

11,227289

Book Value$

1,031,457

39,109,078

370,028
8,990

290

44,348

325,680

2,669

69

220

44

246

641

2,028

Entrusted land

92,389,190

92,389,190

80,524,151

80,524,151

852,062,992

852,062,992

Entrusted buildings and structures

65,384,165

Accumulated depreciation

4,361,012

Entrusted machinery and equipment

1,189,928

55,449,473
61,023,153

3,292,514

603,008,072
52,156,959

1,054,812
195,453

Accumulated depreciation

258,336
12,398859,359

Accumulated depreciation

1,000

11,398

550

8,231

9,227

Entrusted construction in progress

1,869

1,869

2,444

2,444

17,237

8,781¥163,384,068

562,788,469

10,974,155

Entrusted tools, furniture and fixtures

Total

931,592

40,219,603
2,382,514

8,591,641

114,336¥139,224,139

105,109
17,237$1,506,816,085

33

4. SHORT-TERM DEBT
Short-term debt at June 30, 2004 and December 31, 2003 consisted of the following:
As of June30, 2004

As of December
31, 2003

As of June30, 2004

Amount(thousandsof yen)Weightedaverageinterest rate

Amount(U.S. dollars)

Amount(thousandsof yen)Weightedaverageinterest rate

Unsecured loans from a bank due on January 23, 2005

¥ 2,000,000

0.686%——$ 18,445,080

Unsecured loans from a bank due on February 10, 2005

4,000,000

0.585%——

36,890,160

Unsecured loans from a bank due on May 27, 2005

1,000,000

0.520%——

9,222,540

Unsecured loans from a bank due on February 10, 2005

3,500,000

0.685%——

32,278,889

Unsecured loans from a bank due on February 25, 2005

3,000,000

0.530%——

27,667,619

Unsecured loans from a bank due on March 25, 2005

2,000,000

0.577%——

18,445,080

Unsecured loans from banks and a trust bank due on January 27, 2005

8,700,000

0.520%——

80,236,097

Unsecured loans from a bank due on January 27, 2005

1,000,000

0.620%——

9,222,540

Secured loans from banks due on March 27, 2004——

6,770,000

0.935%—

Secured loans from a bank due on February 27, 2004——

2,400,000

0.829%—

Secured loans from a bank due on March 27, 2004——

1,800,000

0.838%—

Secured loans from a bank due on March 27, 2004——

1,930,000

0.849%

Total¥25,200,000¥¥12,900,000—$232,408,005

5. CORPORATE BONDS
Pursuant to a resolution of the Board of Directors’ meeting held on January 28, 2004, the Company undertook an issue of corporate
bonds as follows. The issuance payments were completed on February 12, 2004.
As of June30, 2004
Amount(thousandsof yen)As of December
31, 2003

As of June30, 2004

Interest rate(%)

Amount(thousandsof yen)Interest rate(%)

Amount(U.S. dollars)

Unsecured bonds due on February 12, 2008

¥10,000,000

0.84%

¥—

—%

$ 92,225,399

Unsecured bonds due on February 12, 2010

7,000,000

1.38%

—

—%

64,557,779

Unsecured bonds due on February 12, 2014

5,000,000

2.32%

—

—%

46,112,700¥22,000,000

—%

¥—

—%

$202,895,878

As of December
31, 2003

As of June30, 2004

Amount(thousandsof yen)Weightedaverageinterest rate

Amount(U.S. dollars)

Total

6. LONG-TERM DEBT
Long-term debt at June 30, 2004 and December 31, 2003 consisted of the following:
As of June30, 2004
Amount(thousandsof yen)Weightedaverageinterest rate

Unsecured loans from an insurance company due on March 27, 2007

¥ 1,000,000

0.873%¥——

Secured loans from a trust bank and an insurance company
due on December 27, 2006

13,000,000

1.234%

20,000,000

1.234%

Secured loans from banks due on December 27, 2006

2,000,000

1.295%

5,000,000

1.295%

18,445,080

Secured loans from an insurance company due on December 26, 2008

4,783,000

1.700%

4,783,000

1.700%

44,111,408

Secured loans from an insurance company due on June 21, 2011

4,783,000

2.050%

4,783,000

2.050%

44,111,408

Secured loans from an insurance company due on March 28, 2013

4,400,000

1.750%

5,000,000

1.750%

Total

34¥29,966,000¥39,566,000$

9,222,540

119,893,019

40,579,175$276,362,630

7. SECURED ASSETSAt June 30, 2004 and December 31, 2003, the following assets were pledged as collateral for the following debt:
Pledged assets:
As of June30, 2004

thousands of yen

U.S. dollars

As of December
31, 2003

As of June30, 2004

Cash and bank deposits¥ 6,257,041

9,604,410$ 57,705,819

Land

37,676,782

54,633,535

347,475,623

Buildings and structures

28,623,946

41,624,667

263,985,487

Machinery and equipment

415,183

785,3083,829,040

Tools, furniture and fixtures

3,419

7,995

31,527

Construction in progress

1,050

1,625

9,684

¥72,977,421¥106,657,540$673,037,180

Total

¥

Debt secured by the pledged assets:
thousands of yen

U.S. dollars

As of June30, 2004

As of December
31, 2003

As of June30, 2004

Short-term debt¥—

¥12,900,000$

Long-term debt

28,966,000

39,566,000

267,140,090

—

Total

¥28,966,000¥52,466,000$267,140,090

8. UNITHOLDERS’ EQUITY
Under the Investment Trust Law and the related regulations,the appropriations of retained earnings and the declaration of acash distribution for the current accounting period are made by
the resolution of the Board of Directors at a meeting held

subsequent to the close of the accounting period. As such, theretained earnings of unitholders’ equity at June 30, 2004
included cash distribution of ¥2,614,830 thousand($24,115,374) subsequently made.

9. INCOME TAXESAt June 30, 2004, the Company’s deferred tax assets consisted
mainly of the accrued enterprise tax, which is not deductible
until paid for tax purposes. The reconciliation of tax rate
difference between the adjusted statutory tax rates and theeffective tax rates for the six-month periods ended June 30,
2004 and December 31, 2003 were as follows:
For the period
from January 1, 2004
to June 30, 2004

For the period
from July 1, 2003
to December 31, 2003

Statutory tax rate

39.39%

39.39%

Deductible dividends distribution(39.38%)(39.37%)

Others

0.03%

0.02%

Effective tax rate

0.04%

0.04%

The Company is subject to Japanese corporate income taxes on
all of its taxable income. However, under the Special Taxation
Measures Law of Japan, or the STML, an investment
corporation is allowed to deduct dividends of accounting
profits, or dividend distributions, paid to investors from its
taxable income if certain tax requirements are satisfied. Suchtax requirements include dividend distributions in excess of
90% of its taxable income for the accounting period as
stipulated by Article 67-15 of the STML. Based on the
distribution policy provided by the Articles of Incorporation,
the Company made a dividend distribution of approximately
100% of retained earnings in the amount of ¥2,614,830
thousand ($24,115,373) at June 30, 2004 and treated it as tax
deductible dividend. The Company will not distribute thedividends in excess of accounting profit under the Articles ofIncorporation.

35

10. PER UNIT INFORMATION
The following table summarizes information about net assets per unit and net income per unit at June 30, 2004 and December 31,
2003, and for the six-month periods then ended:

Net assets at period-end per unit
Net income per unit

In calculating the net assets per unit, the amount of the net
assets included the cash distribution declared in the subsequent
period.
Net income per unit is computed by dividing net income by
the weighted-average number of units outstanding during eachperiod. The weighted-average number of units used in theyen

U.S. dollars

For the period
from January 1, 2004
to June 30, 2004

For the period
from July 1, 2003
to December 31, 2003

For the period
from January 1, 2004
to June 30, 2004

¥213,322¥212,979$1,967

6,081

5,895

56

calculation was 430,000 units for the six months ended June 30,
2004 and 418,502 units for the six months ended December 31,
2003. Diluted net income per unit has not been presented since
no warrants and convertible bonds were issued during theperiod.

11. RELATED PARTY TRANSACTIONSThe Company entered into the following related party transactions:
thousands of yen

U.S. dollars

For the period
from January 1, 2004
to June 30, 2004

For the period
from July 1, 2003
to December 31, 2003

For the period
from January 1, 2004
to June 30, 2004

¥ 46,224¥143,777$ 426,303

1,654

27,895

15,253

Outsourced property operation

114,727

333,982

1,058,076

Repairs and maintenance

84,63799,223

780,568

Property management fees
Leasing commissions36

12. BREAKDOWN OF OPERATING REVENUES AND EXPENSES
For the six-month periods ended June 30, 2004 and December 31, 2003.
thousands of yen

U.S. dollars

For the period
from January 1, 2004
to June 30, 2004

For the period
from July 1, 2003
to December 31, 2003

For the period
from January 1, 2004
to June 30, 2004

Real Estate Rental Revenues¥6,790,658¥6,250,395$62,627,110

Rental Revenues

6,388,795

5,754,165

58,920,911

Rental revenues

5,034,902

4,584,941

46,434,580

Common charges

1,155,042

992,892

10,652,421

Parking revenues

171,596

153,359

1,582,552

Other rental revenues

27,25522,973

251,358

Non-Rental Revenues

401,863496,230

3,706,199

Incidental income

386,432

462,940

3,563,884

548

—

5,056

14,88333,290137,259

Cancellation charges
Other miscellaneous revenues
Real Estate Rental Expenses

3,268,801

2,996,386

30,146,648

Property management fees

144,554

128,900

1,333,157

Utilities expenses

452,721513,937

4,175,236

Property and other taxes

541,486

424,885

4,993,880

Casualty insurance

34,36436,271

316,922

Repairs and maintenance

135,619

188,291

1,250,748

1,200,523

1,044,355

11,071,873

759,534

659,747

7,004,832

3,521,857

3,254,009

32,480,462

Depreciation
Other rental expenses
Profits

thousands of yen

U.S. dollars

For the period
from January 1, 2004
to June 30, 2004

For the period
from July 1, 2003
to December 31, 2003

For the period
from January 1, 2004
to June 30, 2004

Proceeds from sale of real estate¥—¥609,335$—

Cost of real estate—

418,920—

Other related sales expenses—

19,711—Gain on sale of real estate—

170,704—

13. LEASESThe Company leases office buildings and earns rental income. As of June 30, 2004 and December 31, 2003, the future lease revenues
under the non-cancelable operating leases are as follows:
thousands of yen

U.S. dollars

As of June 30, 2004

As of December 31, 2003

As of June 30, 2004

Due within one year

¥ 3,966,507¥ 3,010,179$ 36,581,272

Due after one year

22,883,779

21,794,572

211,046,566

Total

26,850,286

24,804,751

247,627,838

14. SUBSEQUENT EVENTSAPPROPRIATION OF RETAINED EARNINGS
On August 19, 2004, the Board of Directors resolved to effect the payment of a cash distribution of ¥6,081 per share aggregating¥2,615million ($24,115 thousand) to unitholders at the record date of June 30, 2004.

37

REPORT OF INDEPENDENT AUDITORS

38

UNITHOLDER INFORMATION

Breakdown of Unitholders (As of June 30, 2004)
By Number of Units Held
Individuals and others

15.4%
Foreign investors

10.8%

Financial institutions

56.3%
Other domestic
corporations

17.5%
By Composition
Financial institutions 0.7%
Other domestic
corporations

1.5%

Foreign investors

0.2%

Individuals and others

97.6%

Major Unitholders (As of June 30, 2004)
Units

(%)

Japan Trustee Services Bank, Ltd.

39,350

9.2

Tokyo Tatemono Co., Ltd.

29,300

6.8

Meiji Yasuda Life Insurance Company

24,000

5.6

Kawasaki Gakuen

19,700

4.6

Goldman Sachs International

17,257

4.0

AIG Star Life Insurance Co., Ltd.

11,940

2.8

Trust & Custody Service Bank, Ltd.

11,230

2.6

The Hiroshima Bank, Ltd.

10,018

2.3

North Pacific Bank, Ltd.

9,399

2.2

Deutche Bank AG London PB Non-Treaty Clients

8,792

2.0

39

MEMBERS OF THE BOARD (As of October 1, 2004)

Name Title
Biography*Number of Investment Units Held

Japan Prime Realty Investment Corporation

Hirohito Kaneko Executive Officer*0

Shigeru Sugimoto Supervising Officer*0

Dec. 19, 2001

Executive Officer of Japan Prime Realty Investment
Corporation

Sept. 14, 2001

Supervising Officer, Japan Prime Realty Investment
Corporation

Apr. 1, 1979

Representative Counsel (currently on service)of Hirohito Kaneko Law Office

June 1, 2001

Auditor, Morimoto Co., Ltd. (currently on service)

Oct. 2, 1999

Apr. 1, 1977

Bar admission (Tokyo Bar Association)
Shigeru Yamada Law Office

Representative Director of Tokyo SPC Services(currently on service)

June 24, 1998

Senior Partner (currently on service) of Horwath
Sakura & Co. (ex- Sakura Audit Corporation)

Sosuke Yasuda Supervising Officer*0

Dec. 1, 1996

Horwath International

Sept. 14, 2001

Supervising Officer, Japan Prime Realty Investment
Corporation

Dec. 22, 1995

Sakura Audit Corporation

Oct. 1, 1999

Director and Senior Partner (currently on service),
Tokyo Hokuto & Co., (Tokyo Akasaka Audit Co.
and Hokuto Audit Co. merged)

July 1, 1988

Representative Director of Sakura & Co.
(currently on service)

Nov. 1, 1985

Ohta Showa Audit Corporation

Apr. 1, 1982

Housing and Urban Development Public
Corporation

July 2, 1993

Senior Partner, Tokyo Akasaka Audit Co.

Feb. 16, 1983

Representative of Tokyo Akasaka CPA Joint Office

June 27, 1980

Sosuke Yasuda Tax Accountant Office(currently on service)

Dec. 1, 1975

Masamitsu Serizawa Accounting Firm

Apr. 1, 1968

Main Store, KK Ohgiya

Tokyo Realty Investment Management, Inc.

Toshihiro Hagiwara President and CEO

President, Tokyo Realty Investment Management, Inc.

Apr. 1, 1999

Director and Head of Osaka Branch OfficeJan. 1, 1998

Head of Development Business Department of
Kinshicho Project (Tokyo) and led negotiations forcity planning of large-scale development of morethan 28,000m2

Mar. 28, 1992

Director of Secretary’s Office and Human Resources

Apr. 20, 1989

Planning of redevelopment scheme connecting
Akihabara and Okachimachi (Tokyo) for JR East
Urban Development Corporation (Joint Venture ofJapan Railway East)

July 1, 1985

Property management and acquisition businesses of
Building Department

Apr. 1, 1968

Yukio Furuya Director and Chief Investment Officer*0

July 1, 2001

Director and Chief Financial Officer, Tokyo Realty
Investment Management, Inc.

Apr. 1, 2000

General Manager of Pension Management Department

Apr. 1, 1991

Manager of International Investment Department
in charge of investments in overseas real estate andfinancing activities

Oct. 1, 1989

Investment Banking Division of Paine Webber
Japan Inc. in Tokyo, where he was involved with
M&A and IPO businesses

Oct. 23, 1983

New York representative office of Yasuda Life

Apr. 1, 1973

Finance Department of The Yasuda Mutual Life
Insurance Company*0Jan. 23, 2000

Director and Chief Investment Officer of Tokyo
Realty Investment Management, Inc.

Apr. 1, 1999

Group leader of the Sales Planning Group Structureda system of property management services

Jan. 1, 1998

Tenant-leasing team leader

June 1, 1993

Took charge of tenant leasing

Nov. 1, 1990

Tokyo Tatemono of America

Apr. 1, 1981

Tokyo Tatemono Co., Ltd. Involved in real estate
investment, leasing to tenants and appraisalsof real estateKazuo Kitami Director and Chief Administrative Officer*0

Oct. 1, 2004

Director and Chief Administrative Officer, Tokyo
Realty Investment Management, Inc.

Apr. 1, 1997

Manager of Credit Assessment Dept. 2, Management
and Administration Division. Responsible for loanadministration. Responsible for credit administration
involved in the bulk sale of non-performing loans,involved in self-assessment and formulation of insurance investigation manual. Manager, Loans
Administration between Aug. 2000 through Mar.
2003, responsible for loan-related accounting.

Apr. 1, 1995

Manager of Real Estate Development responsible
for overall operations.

Sept. 1, 1989

Manager of Real Estate Development Dept., Real
Estate Division. Involved in real estate investment
activities, property leasing and property management.

Mar. 1, 1977

Asset Management Division (Loans, Real Estate
and Other). Engaged in loan front office operations.
Involved in the establishment of a leasing subsidiary.

Apr. 1, 1975

The Yasuda Mutual Life Insurance Company(Currently Meiji Yasuda Life Insurance Company)

Tokyo Tatemono Co., Ltd.

Takeshi Maki Director and Chief Financial Officer

40*0Jan. 23, 2001

JPR-第五期 C2-3 04.10.27 4:14 PM ページ 41

PROFILECORPORATE DATA

Established on September 14, 2001, Japan Prime Realty Investment Corporation
is a closed-end, corporate type fund that invests primarily inhigh-quality office buildings and retail properties locatedHead Office
9-9 Yaesu 1-Chome, Chuo-ku, Tokyo 103-8285, Japan
Tel: +81-3-3231-1051
Fax: +81-3-3274-7775
Date of Establishment
September 14, 2001
Listing
Tokyo Stock Exchange (Securities Code: 8955)

in Tokyo and other major cities in Japan.
With its geographically diverse portfolio, JPR’s primary objective is to achievesustainable growth and stable cash distributions to its investors.

Fiscal Period Ends
June 30 and December 31 of each year
General Meeting of Unitholders
More than once every two years
Cash Distribution Payment Eligibility
Unitholders of record as of June 30 and December 31 ofeach year
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo

Location of Records
Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo
Main Branch, Stock Transfer Agency Division
Mailing Address Mizuho Trust & Banking Co., Ltd.
1-17-7 Saga, Koto-ku, Tokyo 135-8722
Stock Transfer Agency Division
Telephone+81-3-5213-5213 (Representative)
AgentsMizuho Trust & Banking Co., Ltd.
(All branches nationwide)
Mizuho Investors Securities Co., Ltd.
(Head Office and all branches
nationwide)
Note: On March 12, 2003, Mizuho Trust & Banking Co., Ltd. merged with Mizuho
Asset Trust & Banking Co., Ltd., to establish a new trust and banking entity under thename of Mizuho Trust & Banking Co., Ltd. As a result, Mizuho Trust & Banking's mainbranch changed its address on the same date.

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

English page
This Web site has been createdspecifically for our English-speaking
readers.

Performance
Trends in occupancy rate byarea and purpose; trends ininvestment conditions.
Updated monthly.

ANNUAL SCHEDULE (PROVISIONAL)

DEC.

12 Balance date for the six-month period ended December 31
FAQ
FEB.

2

Announcement of results for the six-month period ended December 31
MAR.

of December Performance Information Report
3 Publication
Payment of cash distributions for the six-month period ended December 31

Answers to commonly asked
questions by our unitholders
and investors are found here.

Investor Relations
News releases are posted here as appropriate, as well as
information useful to unitholders and investors in evaluating
the status of JPR, including financial statements and otherlegally mandated reports.

Balance date for the six-month period ended June 30

6 JUNE

Announcement of results for the six-month period ended June 30

8 AUG.

Publication of June Performance Information Report
Payment of cash distributions for the six-month period ended June 30

9 SEPT.

Note: Performance Information Report is prepared pursuant to the Investment Trust Law of Japan.

CONTENTS: TO OUR INVESTORS 1

FINANCIAL HIGHLIGHTS 3

ACTIVITY HIGHLIGHTS 7

PORTFOLIO BREAKDOWN 5

SUBSEQUENT ACTIVITY HIGHLIGHTS 9

REIT STRUCTURE AND EXTERNAL SERVICE PROVIDERS 21
FINANCIAL STATEMENTS 28

PROPERTY PORTFOLIO OF JPR 10

MANAGEMENT’S DISCUSSION AND ANALYSIS 24

UNITHOLDER INFORMATION 39

MEMBERS OF THE BOARD 40 C ORPORA T E D A T A 41

This document contains a translation of selected information described in the Financial Report (Kessan Tanshin) dated August 19, 2004 prepared under the timely disclosure requirements of theTokyo Stock Exchange, as well as the Financial Statements and Performance Information Report prepared pursuant to the Investment Trust Law of Japan, for the period from January 1, 2004 toJune 30, 2004 of Japan Prime Realty Investment Corporation (“JPR”).
This English language document was prepared solely for the convenience of and reference by non-Japanese investors and is not intended to constitute a disclosure document. The Japanese
language Financial Report, Financial Statements and Performance Information Report for the aforementioned period should be referred to as the originals of this document.
English translations for legal, accounting, tax and business concepts used herein may not convey precisely identical concepts of the equivalent Japanese terms. The figures presented in thefinancial statements may differ from the Company’s Financial Report (Kessan Tanshin) due to rounding. With respect to any and all terms herein, including without limitation, financial
statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents and English documents contained herein, the original Japanese
documents will govern the meaning and interpretation. Neither JPR, Tokyo Realty Investment Management, Inc. nor any of their respective directors, officers, employees, partners, unitholders,
agents or affiliates will be responsible or liable for the completeness, appropriateness or accuracy of English translations or the selection of the portion(s) of any document(s) translated into English.
No person has been authorized to give any information or make any representations other than as contained in this document in relation to the matters set out in this document, and if given or
made, such information or representation must not be relied upon as having been authorized by JPR, Tokyo Realty Investment Management, Inc. or any of their respective directors, officers,
employees, partners, unitholders, agents or affiliates.
The financial statements of JPR have been prepared in accordance with generally accepted accounting principles in Japan (Japanese GAAP), which may materially differ in certain respects
from generally accepted accounting principles in other jurisdictions.
Many provisions of this document contain information that constitute forward-looking statements. These forward-looking statements are not a guarantee of future performance and involve risks
and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors.

41

JPR-第五期 C1-4 04.10.27 4:09 PM ページ 1

J PR
Japan Prime Realty Investment Corporation
Fifth Fiscal Period Business Report
January 1, 2004– June 30, 2004

Printed in Japan