Tokyo Realty Investment Management, Inc.

Japan Prime Realty Investment Corporation
Company Presentation September 2007

Japan Prime Realty Investment Corporation(Securities Code: 8955 TSE)
URL: http://www.jpr-reit.co.jp/jpr_e/

Sep. 2007

Profile of Japan Prime Realty Investment Corporation

Profile Overview(as of August 31,
31, 2007)

TickerMarket Cap.
Asset Size (based on acquisition price)
Investment Target (type)
Investment Target (area)
Real Estate IndicesCredit Rating: 8955 (Tokyo Stock Exchange): JPY 295.6 bn: JPY 251.9 bn: Office: 80%; Retail: 20%: Tokyo: 60%; Other Selected Cities: 40%: MSCI Japan Index, TSE REIT Index, GPR, EPRA/NAREIT: R&I: AA-; Moody’s: A2; S&P: A-

Asset Management Company

Market Cap. of Major Diversified J-REITs

Tokyo Realty Investment Management (TRIM)

350

Sponsors (Shareholders of Asset Management Company)

300

Tokyo Tatemono (8804:TSE)

26%

250

24%

200

20%

150

Meiji Yasuda Life

Real Estate
Insurance

Taisei Corp. (1801:TSE)

Construction

Yasuda Real Estate

Real Estate

Sompo Japan Insurance(8755:TSE)

20%(as of August 31,
31, 2007)(JPY bn)
296

213
185

179
158

155
130

120

117

117

TOP

NCI

103

102

FRC

MID

100
50

Insurance

10%
JPR

MTR

TRE

OJR

JER

KRI

UUR

MHR

Top Ranked Diversified J-REIT with Strong Sponsor Capability
Japan Prime Realty Investment Corporation 2

Financial Results and Forecast
7th Period

8th Period

9th Period

10th Period

11th Period

12th Period (E)Ended June 2005

Ended Dec. 2005

Ended June 2006

Ended Dec. 2006

Ended June 2007

Ending Dec. 2007 (E)Operating revenues

8,503

8,587

8,588

9,088

10,056

10,354

Operating profits

3,954

3,984

4,024

4,373

5,108

4,926

Net income

3,376

3,398

3,449

3,642

4,372

4,062

DPU (JPY)

6,370

6,411

6,509

6,873

6,996

6,500

FFO

4,353

4,715

5,010

5,222

5,524

5,876

FFO per unit (JPY)

8,214

8,896

9,453

9,853

8,839

9,402

Total units outstanding (Units)

530,000

530,000

530,000

530,000

625,000

625,000

LTV (%)

42.0%

44.1%

45.8%

48.7%

37.2%

38.9%

Total assets

216,574

225,882

231,523

244,691

271,398

-

42

42

44

46

48

49

94.9%

96.1%

97.7%

98.3%

99.0%

98.5%

(JPY mn)

Number of properties
Average occupancy rate (%)

11th Fiscal Period Results

12th Fiscal Period Forecast (as of Aug. 2007)

9 2 properties acquired in the 10th Fiscal Period contributing to
the 11th Fiscal Period

9Contribution of 1 property newly acquired in the 11th
Fiscal Period- Chayamachi Grande Bldg. and JPR Musashikosugi Bldg. (JPY 13.2 bn)

9 5 properties newly acquired in the 11th Fiscal Period- Tachikawa Business Center Bldg. (additional ownership), Shinjuku
Sanchome East Bldg., Rise Arena Bldg., Musashiurawa Shopping Squareand Kawasaki Dice Bldg. (JPY 28.0 bn)- Yume-ooka Office Tower (JPY 6.5 bn)

9Assuming Kawasaki Dice TMK is liquidated during the12th Fiscal Period.
9Total units outstanding is based on 625,000 units.

9 Increase in occupancy rate

Steady Increase in Revenues and FFO
Net Income and DPU Expected to Drop Mainly Due to Absence of Gain on Real Estate Sale____________________
Note: FFO = Net Income + Depreciation and Amortization – Capital Gains (Losses) from Disposal of Properties
DPU and FFO per unit are calculated using the number of units outstanding as of the end of each fiscal period.
LTV = Interest Bearing Debt ÷ (Interest Bearing Debt + Unitholders’ Capital) × 100

Japan Prime Realty Investment Corporation 3

JPR’s Market Recognition History
Steady Market Cap Growth through Equity Finance(as of August 31,
31, 2007)(Market Cap)(JPY bn)

3rd AddAdd-on Offering
Feb. 7, 2007
95,000 units

300

250

(Unit Price)(JPY)

550,000

2nd AddAdd-on Offering
Feb. 2, 2005
100,000 units

500,000

Add-on Offering Price:
JPY 449,820 (2007)200

450,000

May 13, 2005
MSCI Japan Index

AddAdd-on Offering
July 15, 2003
144,400 units

IPO
June 14, 2002
182,000 units

400,000

350,000

150

100

300,000

Add-on Offering Price:
JPY 272,440 (2005)
Add-on Offering Price:
JPY 237,160 (2003)

250,000

50
200,000

IPO Offering Price:
JPY 200,000 (2002)

0

150,000

Dec.
2001

June
2002

Dec.
2002

June
2003

Dec.
2003

June
2004

Dec.
2004

June
2005

Dec.
2005

June
2006

Dec.
2006

June
2007

Aug.
2007

Japan Prime Realty Investment Corporation 4

Towards a Target Portfolio Size of Over 300 Billion Yen
Striving for a Target Portfolio Size of 300 Billion Yen while Maintaining a Prudent Investment Policy

JPY 300 bn

The portfolio size on acontracted basis as of August17, 2007 is 261.1 billion yen(50 properties)

Portfolio Size
(Acquisition price basis)

Office (Tokyo CBDs and Greater Tokyo)

JPY 38.9 bn
48 Buildings
JPY 245.3 bn

Office (Other Cities)

Stable external growth

Retail Facilities
Sale of Property(44.1)(45.0)(47.9)(50.2)(50.8)(17.6)(41.2)

25 Buildings
JPY 92.1 bn(20.4)(42.0)

Share(43.5)(44.0)(42.1)(42.0)(24.5)(31.6)(14.4)(14.0)

June 2002

Dec. 2002(31.4)(29.3)(22.3)(21.6)(26.7)(26.4)(27.4)(23.4)(22.5)

June 2003

Dec. 2003

June 2004

Dec. 2004(25.3)

June 2005(28.3)

Dec. 2005(30.5)

June 2006(34.6)

Dec. 2006

Total properties sold: 8 properties totaling JPY 14.4 bn____________________
Note: JPR listed on June 14, 2002. Portfolio size is based on acquisition prices.

(38.3)

June 2007

Aug.
2007

Improvementof quality(47.3)(49.4)

Japan Prime Realty Investment Corporation 5

Recent Acquisitions (11th Fiscal Period)
Tachikawa Business Musashiurawa
Center Bldg.
Shopping(additional acquisition)
SquareKawasaki Dice
Bldg.

Rise Arena Bldg.

Shinjuku Sanchome
East Bldg.

OfficeRetailRetailOfficeRetailAcquisition Date

Feb. 2007

Mar. 2007

Apr. 2007

Mar. 2007

Mar. 2007

Acquisition Price

JPY 2.30 bn

JPY 4.33 bn

JPY 15.08 bn

JPY 5.83 bn

JPY 0.54 bn

Appraisal Value(as of June 30, 2007)

JPY 2.42 bn

JPY 4.40 bn

JPY 15.18 bn

JPY 8.05 bn

JPY 0.55 bn

Tachikawa-shi, Tokyo

Saitama-shi, Saitama

Kawasaki-shi, Kanagawa

Toshima-ku, Tokyo

Shinjuku-ku, Tokyo

Co-ownership 29.7%(total % to be 46.7%)

Co-ownership 50.0%

Ownership,
Co-ownership of surface
rights 52.0%

Co-ownership 15.9%

Ownership 2.7%
(Unit ownership)

Unit ownership

Unit ownership(co-ownership ofbeneficiary interest)

Unit ownership(co-ownership ofbeneficiary interest)

Unit ownership,
Co-ownership of unit
ownership

Co-ownership of unit
ownership

5.8% (total)

5.0%

4.6%

5.5%

4.3%

Taisei Corporation(sponsor)

Taisei Corporation(sponsor)Type of Use

Location

OwnershipLand

Building

Expected NOI %

SellerTokyo Tatemono Co., Ltd.
(sponsor)

Kawasaki Dice TMK
Musashiurawa Retail(An SPC originated by
Properties Y.K.
(An SPC originated by Tokyo Tatemono Co., Ltd.)Tokyo Tatemono Co., Ltd.)

Continuous Acquisition of Blue-Chip Properties
through Collaborations with Sponsor Companies

Japan Prime Realty Investment Corporation 6

Acquisition in 12th Fiscal Period and Contracted Future Acquisition
Portfolio Expansion through Continuous Acquisitions

Property Name

Acquisition Highlights

Yume-ooka Office Tower*Blue-chip office building in Tokyo metropolitan area
*Acquired from public body through bidding

KM Fukugo Building (tentative name)(redevelopment project)*Acquisition that avoided over-competition throughadvance investment into a blue-chip development
project (3F-6F: Tenants already finalized)

Property Characteristic

A blue-chip office building directly connected to
Kamiooka Station on the Keikyu Line

Retail property directly connected to Kitahama
Station on the Osaka City Subway Sakaisuji Line

Date of Acquisition

July 2007

Contracted in March 2007
<Acquisition in March 2009 (planned)>

Acquisition Price

JPY 6.51 bn

JPY 9.25 bn (planned)

Rights, etc.
(percentage of equity interest)

Land: Co-ownership (19.7%)
Building: Unit ownership

Land: Ownership (21.42%)
Building: Unit ownership

Implied NOI Return upon
Acquisition

4.8%

－

The City of Yokohama

Sanyo Homes Co., Ltd., Haseko Corporation andothers for a total of 8 companies

SellerContinuous Acquisitions of Blue-Chip Properties Mainly from Sponsor Companies Utilizing
41.3 Billion Yen of Equity Raised in February 2007
Japan Prime Realty Investment Corporation 7

Establishing the Core Portfolio and Diversifying Risks
Continuing Diversified Investment into Tokyo and 5 Major Cities Where Stability and Growth are Expected Portfolio Diversification (as of the end of June 2007)

Geographic Diversification (as of June 2007)
Fukuoka, Sendai
and Sapporo

Tokyo CBDs andGreater Tokyo: 67.8%
Tokyo, Osaka andNagoya: 90.2%

Sapporo1 property
JPY 3.7 bn

22.4%

7.6%

5 majorcitiesOsaka andNagoya2.2%

Other cities

Tokyo
CBDs

38.7%

GreaterTokyo

Average Property Age: 13.0 yrs

Tokyo
67.8%

29.1%
Naha
1 property
JPY 1.6 bn

Fukuoka
3 properties
JPY 7.6 bn

Property Type (as of June 2007)
Niigata
1 property
JPY 2.1 bn

RetailOffice

38.3%

Osaka
7 properties
JPY 46.2 bn

Wakayama
1 property
JPY 1.7 bn

61.7%

Sendai2 properties
JPY 7.4 bn

Tokyo CBDs and Greater Tokyo
30 properties
JPY 166.4 bn
Nagoya2 properties
JPY 8.7 bn★The 3 owned properties outside of
the 6 major cities (including Tokyo) arerecognized as highly competitive andadvantageous buildings

Tenant Diversification (as of June 2007)
Top 5 tenants
Other tenants

22.0%

66.6%
11.4%
6th-10thlargest tenants*Based on total monthly rents.
____________________*Portfolio (acquisition price) as of June 2007, not including the Yume-ooka Office Tower acquired in July 2007, the KM Fukugo Building (tentative name) to be acquired in
March 2009 and the Kawasaki Dice TMK preferred securities acquired in December 2005.

Japan Prime Realty Investment Corporation 8

Internal Growth
Achieving Higher Rents Upon Rent Renewals with Existing Tenants
 Example of upward revisions for office buildings in Tokyo CBD and
and Greater Tokyoz Achieved upward revisions by introducing commission for renewals at higher rents,

setting detailed objectives for renewals at higher rents, etc.
[11th Fiscal Period Performance]
Positive rent revisions: Up to 3,000 yen/tsubo
yen/tsubo per month
Revision rate: Max. 45%, Avg. 9.4%
z Contribution to NOI increase in 12th fiscal period and after
Limited to Tokyo CBD and Greater Tokyo Offices
Timing of Rent Increase
10th fiscal period(December 2006 period)
11th fiscal period(June 2007 period)
12th fiscal period(December 2007 period)
13th fiscal period(June 2008 period)
Total

RevisedContracts(JPY 1,000)

160,799
10,741

119,801

Contribution to Profit Increase (1,000 yen)
Total No. ofContracts

73,933

10th
11th
12th
13th
fiscal period fiscal period fiscal period fiscal period%

7 cases

271

2.6%

4,395

6,720

6,720

6,720

49 cases

278

17.6%

0

39,881

69,404

69,40428 cases

278

10.1%

0

0

43,67773,93313 cases

278

4.7%

0

0

0

10,741

97 cases

278

34.9%
vs. 9thfiscal period rents

4,395

46,601

119,801

160,799

0.2%

1.6%

4.2%

5.7%

*1. The revision performance figures are the number of revision cases on a contract base. *2. The numbers of contracts are thefigures for the end of the 10th and 11th fiscal period and the 12th
12th and 13th fiscal period use the figure for the end of the 11th
11th fiscal
period. *3. The range of this study is limited to offices in Tokyo and suburban
suburban Tokyo and excludes the additional acquisition of theTachikawa Business Center Building acquired in the 10th fiscal period and after and the Rise Arena Building. *4. The contribution toincreased profits is calculated based on a comparison to 9th fiscal
fiscal period rents and is based only the rents and excludes common
expenses.

43,67746,601
Total
4,395

69,4044,395

10th
fiscal period

69,40439,881
6,720

6,720

11th
fiscal period

12thfiscal period

6,720

13th
fiscal period

10th fiscal period contribution by revisions

11th fiscal period contribution by revisions

12th fiscal period contribution by revisions

13th fiscal period contribution by revisions(No. of cases)
15

Tokyo
CBDs

Greater
Tokyo

Other
Cities

10

15
5

9

5

0

6

-5

No. of contracts
exceeding average Status of New Tenant Contracts in 11th Fiscal Periodzz

Rents for new tenants are also increasing in local cities
Rental income again grew due to proactive increased
unit rent prices resulting from rent levels higher thanpresent market levels upon the replacement of tenants

7-10

Number of cases exceeding average

第10期末平均を上回る件数
at end of 10th fiscal period

Number of cases below average

第10期末平均を下回る件数
at end of 10th fiscal period

Japan Prime Realty Investment Corporation 9

Growth Potential of Cash Flow: History of Rent Revenues
Rental Revenues from 25 Properties at End of 4th Fiscal Period(Note 1) Bottomed Out in 7th Fiscal Period
 History of Rent Revenues from the Entire Portfolio and from the 25 Properties Owned Since theEnd of the 4th Fiscal Period (Ended Dec. 2003)(Note 2)(JPY mn)
mn)
8,942

9,000

8,455
7,792

8,000
7,097
7,000

8,072
104.7

7,340

105.0

103.4

6,388

102.3

6,000
5,000

9,786 Change (%)
110.0

9,626

100.4
100.0
100.0
99.9

4,000
3,000

Portfolio
as of Endof Dec. 2003

98.4

98.2
96.8

25 properties

2,000

5,292
5,055

4,962

4,895

4,972

5,049

5,077

5,170

5,227

5th Period

6th Period

7th Period

8th Period

9th Period

10th Period

11th Period

12th Period

Dec. 2004

June 2005

Dec. 2005

June 2006

Dec. 2006

June 2007

Dec. 2007 (E) June 2008 (E)

95.0

1,000
0

90.0
June 2004____________________

13th Period

Total rent revenues from the entire portfolio (left axis)
Total rent revenues from the 25 properties owned since the end of Dec. 2003 (left axis)
Rate of change in total rent revenues from the 25 properties owned since the end of Dec. 2003 (right axis)

Notes: (1) The rent revenues represent the fixed revenues designated in the contracts with tenants, including rent, common expenses and parking fees.
(2) The 25 properties owned since the 4th Fiscal Period (ended Dec. 2003) are the 32 properties owned in the 4th Fiscal Period (ended Dec. 2003) minus JPR Ikebukuro Bldg.,
JPR Park West Takamatsu and JPR Square Hakata East/West that were sold in March 2005, SK Hiroshima Bldg. that was sold in September 2005, Park East Sapporo that was
sold in Nov. 2005, and Tsurumi fuga 1 and JPR Takamatsu Bldg. that were sold in April 2007.

Japan Prime Realty Investment Corporation 10

Financial Strategy (1) -- LTV
LTV Ratio
Ratio
Add-on Offering Reduced the LTV Ratio
Able to Achieve the Target Portfolio Size of 300 Billion Yen by Increasing LTV<LTV ratio at end of June dropped to approx. 37% with add-on offering>z Since the add-on offering of February 2005, the JPR LTV ratio has fluctuated at

between 40 and 50%
z The LTV ratio dropped to approx. 36% with the add-on offering of 95,000 units in

February 2007 (approx. 18% of total units outstanding)<Debt capacity>
Property Acquisition Capacity by Raising LTV Ratio (simulation)
LTV Ratio
Present Capacity− Issued prices: 449,820 yen for both public offering and 3rd party allotment（38.9%）

Property Acquisition
Capacity

Portfolio Size (Acquisition Price)－251.9 bn yen− Issued units: 90,000 units in public offering and 5,000 units in 3rd party

allotment− Raised capital: 39.12 billion yen in public offering and 2.17 billion yen in

3rd party allotment45%

28.5 bn yen

280.4 bn yen

50%

57.0 bn yen

308.9 bn yenz LTV ratio has risen to approx. 39% with recent property acquisition at end of July

2007

Total Unitholders’ Capital and LTV Ratio(JPY bn)
200

Total unitholders’ capital (left axis)
54.9

51.1

60%
LTV ratio (right axis)

48.7

46.4
44.1
150

45.8

JPY
156.7 bn

39.4

50%

38.9
42.0

40.6
37.1
100

40%

JPY 115.4 bn
37.2

JPY 89.1 bn
Unitholders’capitalJPY 56.9 bn

30%

20%

The target portfolio size of 300
billion yen is achievable without
new issue of additional equity

50
10%

0

0%

June / Dec.June / Dec. June / Dec.June / Dec.June / Dec. June / July
2007
2002
2003
2004
2005
2006
LTV ＝ Interest-bearing Debt ÷ (Interest-bearing Debt + Unitholders’ Capital) ×100

Japan Prime Realty Investment Corporation 11

Financial
Financial Strategy
Strategy (2)(2) -- Diversifying
Diversifying Maturities
Maturities andand Source
Source ofof Debt
Debt
Reducing Refinance Risks throughDiversified Debt Maturity

Diversify Source of Debt to Secure
Future Property Acquisitions<Corporate bonds issued in July have maturities of 5 and 7 years>
Issue No. Issued Amount

Procurement
MethodMaturity

8th series

9 bn yen

July 2012 (5 years)

9th series

6 bn yen

July 2014 (7 years)<Expanding sources of both direct and indirect finance>

Short-termborrowings

Current Status
・A credit limit of 34 billion yen arranged with
7 banks
・A commitment line of 20 billion yen arranged
with 5 banks

Debt Maturity Ladder(JPY 100 mn)

250

Repayment prior to maturity throughissuance of corporate bonds
Total commitment line: 20 bn yen

200
150

100.0
100
50
0

100.0

Long-term
borrowings

・Approx. 38 billion yen has been borrowed
from 12 financial institutions

Corporatebonds

・Shelf registration of 100 billion yen in bondissues has been arranged (remainder 80.5
billion yen)

Commercial
paper (CP)・Preparatory studies anticipating future legal
revisions

Total 140.0
Corporate bonds
90.0Long-term debt
50.0 Corporate
Total 110.0
bonds
50.0
110.0
60.0

70.0
60.0
47.8

80.0
50.0
44.040.0

45.0

Dec. June/Dec. June/Dec.June/Dec.June/Dec.
June/Dec.June/Dec.June/Dec.
2007 2008
2009
2010
2011
2012
2013
2014

Dec.
2026

(Fiscal period)

JPR can utilize flexible financemethods to secure future property
acquisitions
Japan Prime Realty Investment Corporation 12

Financial Strategy (3) -- Interest
Interest Cost
Cost Management
Management
Low Cost Debt Finance due toHigh Credit Ratings<Backed by high ratings…><Increasing fixed rate debt finance>
Current Ratings

AgencyEmphasis on Long-term andFixed Interest Debt

IssuerEnd of December 2006

OutlookFixed rate（82%）

z S&P raised the outlook

R&I

AA-

StableMoody’s

A2

StableS&P

A-

Positive

Floating rate（18%）

End of June 2007
Floating rate
（4%）

Fixed rate
（96%）

End of July 2007
Fixed rate （100%）in March 2007
z R&I raised the issuer

rating in April 2007

Interest-bearing debt: 109.5
bn yenLong-term interest-bearing
debt’s average remaining
years: 5.1 years
Long-term interest-bearing
debt’s average interest rate:
1.6%

Interest-bearing debt: 93.0
bn yenLong-term interest-bearing
debt’s average remaining
years: 5.1 years
Long-term interest-bearing
debt’s average interest rate:
1.7%

Interest-bearing debt: 99.7
bn yenLong-term interest-bearing
debt’s average remaining
years: 5.4 years
Long-term interest-bearing
debt’s average interest rate:
1.7%

z All long-term debt is fixed ratez Corporate bonds issued in July were used to repay all short-termloans<Taking steps to raise capital at low costs>
Issued 8th series and 9th series of unsecured corporate bonds in July 2007
Nominal
LIBOR Spread*Issue No. AmountInterest
8th series

9 bn yen

1.85%

14bp

9th series

6 bn yen

2.10%

18bp

Reducing interest rate hike risks*Source: Reuters

Japan Prime Realty Investment Corporation 13

Future Investment and Management Policy
Expand Portfolio Size with Focus on Quality and Profitability Enhancement
 External Growth・Continuous portfolio expansion with focus on quality
JPR will continue to expand its portfolio with selective
investment focused on location and future potential

・Collaboration with sponsors
JPR will seek further collaboration with Tokyo
Tatemono, JPR’s main sponsor, and utilize the stable
and continual pipeline with Taisei Construction(potential acquisition of development projects)

・Focused investment on Tokyo and 5 major cities
Focused investment towards areas with high growthpotential: Tokyo (Tokyo CBDs and Greater Tokyo) and 5
major cities (Osaka metropolitan area, Nagoya, Fukuoka,
Sapporo and Sendai)

Striving
Strivingfor
foraaportfolio
portfoliosize
size
ofofmoremorethanthan
300
300billion
billionyenyen
andandgrowth
growthinindividend
dividendperperunitunit Internal Growth・Internal growth by raising rental income mainly for officesin the three major metropolitan areas of Tokyo, Osaka andNagoyaJapan Prime Realty Investment Corporation 14

Acquisition Market Conditions and JPR’s Policies
JPR is Taking Steps to Further Diversify Acquisition Methods amidst Intense Property
Acquisition Competition and the Limited Opportunities for Acquisition
Market Conditions

JPR Acquisition Policy

Case Study<Avoid Intensive Acquisition Competition><Demand>Inflow of investment money
backed by excessive liquidity
globally
Competition to acquire
properties with increase inbuyers<Supply>z Acquisitions through negotiatedtransactionsz Avoid excessive price competitionz Kawasaki Dice Buildingz Yume-ooka Office Tower

by adding first option to purchase topreferred investmentsz Carefully select properties that are

being sold through bidding<Use of Sponsor Pipeline>

Decrease in property sales
from for-profit corporations,etc.
Lack of investment-grade
properties

Secure blue-chip properties bybuying development properties from
Tokyo Tatemono and Taisei
Corporation= The strongest acquisition pipelinez Tachikawa Business Center

Buildingz Musashiurawa Shopping

Centerz Rise Arena Bldg.

<Enjoy merits of advance investment><Price>Risen to level that takes into
account future rent hikes

Acquire or make preferred investment
at the development stage of a property
by appropriately judging the leasing
and development risks

Drop in cap rates

z KM Fukugo Building (tentative name)*JPR will promote the acquisition ofproperties through advanced
investments into development
projects

Enhancement of implied return

JPR is Striving to Achieve a Target Portfolio Size of 300 Billion Yen
Centering on Acquisitions from Sponsors
Japan Prime Realty Investment Corporation 15

Summary
Profile Overview
z Top-ranked diversified J-REITz Focusing on high-quality office buildings and popular retail properties
z Sponsored by major real estate developers, a general contractor, etc.

Growth Strategies
z Select investment in properties with strong potential by diversifying

acquisition methods
z Leverage sponsor pipeline
 Focus on acquiring additional properties from Tokyo Tatemono, a mainsponsor Focus on incorporating development projects in which Taisei
Corporation, a sponsor, participatesz Seek growth through rent hikes
z Continue prudent financial strategy that can effectively handle changes in
the financing environment

Management View
z Target Asset size exceeding JPY 300 bn
 Aim to raise cash distribution per unit

Japan Prime Realty Investment Corporation 16

1. Financial Summary

Appendix

2. Property Summary
3. Overview of TRIM

Financial Summary

Balance Sheet as of the End of the 11th Fiscal Period
New Acquisitions Increase Total Assets andExpansion in Acquisition Capacity through Add-on Offering
Total current assets
Cash and bank deposits
Entrusted cash and deposits
Other current assets
Total fixed assets
Property and equipment

Real estate
Buildings and structures
Land
Entrusted real estate
Buildings and structures
Land
Total intangible assets
Other intangible assets
Total investments and other assets

Investment securities
Deposits
Long-term prepaid expenses
Total deferred assets
Corporate bond issuance costs

Total assets
Total current liabilities

As of June 30, 2007
Amount
%28,455 10.5%
13,1894.9%
14,818
5.5%
448
0.2%
242,900 89.5%
241,322 88.9%
55,194 20.3%
20,643
7.6%
34,551 12.7%
186,127 68.6%
68,999 25.4%
117,128 43.2%
9
0.0%
9
0.0%
1,568
0.6%
1,558
0.6%
10
0.0%
0
0.0%
42
0.0%
42
0.0%
271,398 100.0%

As of Dec. 31, 2006
Amount%24,933 10.2%
10,653
4.4%
13,997
5.7%
282
0.1%
219,697 89.8%
218,123 89.1%
46,007 18.8%
17,425
7.1%
28,581 11.7%
172,116 70.3%
63,292 25.9%
108,824 44.5%
5
0.0%
5
0.0%
1,568
0.6%
1,558
0.6%
10
0.0%
0
0.0%
60
0.0%
60
0.0%
244,691 100.0%(JPY mn)
ChangeAmount
%
3,522
14.1%
2,535
23.8%
821
5.9%
165
58.5%
23,202
10.6%
23,199
10.6%
9,187
20.0%
3,218
18.5%
5,969
20.9%
14,011
8.1%
5,707
9.0%
8,304
7.6%
3
65.3%
3
65.3%
－
－
－
－
－
－
－
－
-18 -29.9%-18 -29.9%
26,706
10.9%

Long-term borrowings
Corporate bonds
Total liabilities

21,066
1,739
1,044
3,500
(Note) 4,783
10,00089,234
14,551
38,18336,500110,300

7.8%
0.6%
0.4%
1.3%
1.8%
3.7%
32.9%
5.4%
14.1%
13.4%
40.6%

29,741
1,727
1,014
19,5007,500－
95,876
13,41035,96646,500125,617

12.2%
0.7%
0.4%
8.0%
3.1%
－
39.2%
5.5%
14.7%
19.0%
51.3%

-8,6741230-16,000-2,717
10,000-6,6421,140
2,217-10,000-15,317-29.2%
0.7%
3.0%-82.1%-36.2%
－
-6.9%
8.5%
6.2%
-21.5%-12.2%

Unitholders' capital
Retained earnings
Total unitholders' equity

156,725
4,372
161,098

57.7%
1.6%
59.4%

115,4313,642
119,074

47.2%
1.5%
48.7%

41,293729
42,023

35.8%
20.0%
35.3%

244,691 100.0%

26,706

10.9%

Accounts payable and accrued expenses

Rent received in advance
Short-term borrowings
Current portion of long-term borrowings
Current portion of corporate bonds

Total long-term liabilities
Deposits received from tenants

Total liabilities and unitholders' equity

Note: Figures were rounded off to a million yen

271,398 100.0%(JPY mn)
1. Balance of interest-bearing debt
Total
(Breakdown)Unsecured borrowings
Secured borrowings
Unsecured corporate bonds
2. Interest-bearing debt ratio etc.

End of 11th End of 10th
Fiscal Period Fiscal Period

92,96632,50013,96646,500109,466
49,00013,96646,500

Variation-16,500-16,500－－

End of 11th End of 10th Variation (P)Fiscal Period Fiscal Period(1) Interest-bearing debt ratio
Interest-bearing debt / (Interest-bearing debt + Unitholders' capital)
37.2%
48.7%
-11.4
(2) Interest-bearing debt to total assets① Interest-bearing debt / Total assets at end of period
34.3%
44.7%
-10.5
② Interest-bearing debt / (Total assets at end of period + Gains or losses
from real estate valuation)
29.4%
39.7%
-10.3
(3) Ratio of long-term fixed-rate borrowings (Note)
Long-term fixed-rate interest-bearing debt (*) / Interest-bearing debt
85.5%
75.3%
10.1
*Total amount of long-term fixed-rate debt with over 1 year to maturity

3. Commitment line status

End of 11th End of 10th
Fiscal Period Fiscal Period

Variation－
20,00020,000① Credit limit (total)－－－② Outstanding debt at the end of the per③ Unused commitment line at the end of the period－
20,00020,000④ Lenders (as of the end of the period)
Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ,
Resona Bank, Mitsubishi UFJ Trust and Banking, Shinsei Bank
* Agreements have been concluded separately with respective banks
listed above.
4. Investment units status

End of 11th End of 10th
Fiscal Period Fiscal Period① Total number of units issued and outstanding (units)
625,000 530,000② Total unitholders' equity per unit (yen) 257,757 224,668

Variation

95,00033,089Note: The 4,783 million yen in long-term debt scheduled for repayment on December 26, 2008 was repaid in advance on July 27,
2007. Therefore, it is entered in the item long-term debt to be paid within one year for accounting purposes.
Further, the long-term fixed interest ratio indicates the ratio of long-term fixed interest with repayment deadlines of more than a year
in the future within interest-bearing liabilities. Therefore, it is calculated with this loan included.

Japan Prime Realty Investment Corporation 19

Income Statement for the 11th Fiscal Period(JPY mn, unless otherwise indicated)

11th Fiscal Period

10th Fiscal Period

Jan. 1, 2007 – June 30, 2007

July 1, 2006 – Dec. 31, 2006

ChangeAmount
8,942
553
9,496
530
30
10,056

%
88.9%
5.5%
94.4%
5.3%
0.3%
100.0%

Amount
8,455
600
9,056
－
31
9,088

%
93.0%
6.6%
99.7%
－
0.3%
100.0%

Amount
486
-47
439
530
-1
968

%
5.8%
-7.9%
4.9%
－
-4.1%
10.7%

784
1,848
462
542
32
189
200
381
40
1,682
4,315
391
81
5
55
98
4,948

7.8%
18.4%
4.6%
5.4%
0.3%
1.9%
2.0%
3.8%
0.4%
16.7%
42.9%
3.9%
0.8%
0.1%
0.6%
1.0%
49.2%

744
1,826
467
590
34
146
171
367
49
1,579
4,151
356
63
5
51
85
4,714

8.2%
20.1%
5.1%
6.5%
0.4%
1.6%
1.9%
4.0%
0.5%
17.4%
45.7%
3.9%
0.7%
0.1%
0.6%
0.9%
51.9%

39
21
-4
-48
-1
42
29
14
-9
102
163
35
18
－
3
12
234

5.3%
1.2%
-1.0%
-8.3%
-4.4%
28.9%
17.3%
3.9%
-18.7%
6.5%
3.9%
10.0%
28.6%
－
6.9%
14.9%
5.0%

5,108

50.8%

4,373

48.1%

734

16.8%

5,181
6,863
94
828
705
16
18
83
5
4,373

51.5%
68.2%
0.9%
8.2%
7.0%
0.2%
0.2%
0.8%
0.1%
43.5%

4,905
6,485
4
734
668
18
42
－
5
3,643

54.0%
71.4%
0.0%
8.1%
7.4%
0.2%
0.5%
－
0.1%
40.1%

275
5.6%
377
5.8%
89 2047.5%
93
12.8%
37
5.6%
-2 -11.4%-24 -57.1%
－
83
-0
-1.2%
730
20.0%

Income before income taxes

4,373

43.5%

3,643

40.1%

730

20.0%

Net income

Rental revenues
Other rental revenues
Real estate rental revenues ①
Gain on sale of real estate
Dividends income
Operating revenues
Property and other taxes
Other rental expenses
Outsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts

Other
Depreciation
Real estate rental expenses ②
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses
Operating profits
Profits (①-②)
Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Interest expenses (including corporate bonds)

Loan arrangement fees
Amortization of corporate bond issuance costs

New unit-issuance costs
Other non-operating expenses
Recurring profits

4,372

43.5%

3,642

40.1%

730

20.0%

Retained earnings at the end of period

4,372

43.5%

3,642

40.1%

729

20.0%

Distribution per unit (JPY)6,996

Note: Figures were rounded off to a million yen

6,873

Distribution per unit: 6,996 yen

123

1.
1. Rental
Rental businessbusiness income
income**Whole-period
Whole-period contribution
contribution ofof22 properties
properties
acquiredacquired inin 10th10thfiscal
fiscal period
period+136+136 mn
mn yenyen** In-period
In-period rental
rental ofof 55 properties
properties (including(including
additional
additional acquisition)acquisition) acquired
acquired inin 11th
11th
fiscalfiscal period
period+364+364 mn
mn yenyen** Improved
Improved profitability
profitabilityofof existing
existing properties
properties+83+83 mnmn yenyen** Rental
Rental revenue
revenue decrease
decrease fromfrom sale
sale ofof 22
properties
properties inin 11th
11th fiscal
fiscal period
period-97-97 mnmn yenyen

2.
2. Additional
Additional use
use fees/utilities
fees/utilities** Additional-48
Additional use
use fees:
fees:-48 mnmn yenyen** Utilities:-48
Utilities:-48 mnmn yenyen(Decreased(Decreased due
due toto seasonalseasonal factors)
factors)3.
3. Non-operating
Non-operating profits
profits andand losses
losses(1)(1)Non-operating
Non-operatingprofits
profits** Income
Income fromfrom settlement
settlement ofof management
management
accounts+83
accounts+83 mnmn yenyen(2)(2) Non-operating
Non-operating expenses
expenses** Paid+37
Paid interest
interest+37 mnmn yenyen(Increasefromrefinancing
tolong-term(Increase from refinancing to long-term
andand fixed
fixed rate
rate debt)
debt)(Long-term,(Long-term, fixed
fixed interest
interestratio:
ratio:
EndEndof
of previous
previous period
period 75.3%
75.3%
→
→ End
End ofofthisthis period
period 85.5%)
85.5%)** Amortization
Amortizationofof corporate
corporate bondbond issuanceissuance
costs
-25
costs
-25 mnmn yenyen(completed(completed forfor 1st-3rd
1st-3rd series
series bonds)
bonds)** New
New investment
investment unit
unit issuanceissuance costs
costs
+83
+83 mnmn yenyen(Reference)
In January 2002 (before IPO) investment units (500,000 yen a unit)
were split into 2.5 units (200,000 yen a unit) to make investment units
easier to invest in. Therefore, the distribution per unit based on the
pre-split level would be 17,490 yen.

Japan Prime Realty Investment Corporation 20

Forecast for the 12th Fiscal Period(JPY mn, unless otherwise indicated)

Forecasts for the 12th Fiscal Period
July 1, 2007 – December 31, 2007
48 properties asof the end of 11th
Fiscal Period

Rental revenues
Other rental revenues
Real estate rental revenues ①
Gain on sale of real estate
Dividends income
Operating revenues
Property and other taxes
Other rental expenses
Outsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts

Other
Depreciation
Real estate rental expenses ②
Loss on sale of real estate
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses
Operating profits
Profits (①-②)
Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Recurring profits
Income before income taxes
Net income
Retained earnings at the end of period
Distribution per unit (JPY)
Note: Figures were rounded off to a million yen

9,333
692
10,026－－
10,026
764
2,083
464
683
33
237
195
390
78
1,722
4,570
－

5,456
7,178

Kawasaki Dice
TMK
Preferred
Securities

－
－
－
－
35
35
－
－
－
－
－
－
－
－
－
－
－
－

－
－

Yume-ooka
Office Tower

292
－
292
－
－
292
－
117
13
18
1
2
7
73
0
91
209
－

83
175

Total
9,626
692
10,319－35
10,354
764
2,201
477
701
34
240
203
464
78
1,813
4,779
－
396
71
6
55
118
5,427
4,926
5,539
7,353
8
871
4,063
4,063
4,062
4,062

Change from the 11th
Fiscal Period Results
%
93.0%
6.7%
99.7%
－
0.3%
100.0%
7.4%
21.3%
4.6%
6.8%
0.3%
2.3%
2.0%
4.5%
0.8%
17.5%
46.2%
－
3.8%
0.7%
0.1%
0.5%
1.1%
52.4%
47.6%
53.5%
71.0%
0.1%
8.4%
39.2%
39.2%
39.2%
39.2%

6,500
Total units outstanding (Units)
625,000

AmountPremises behind
Forecasts for 12th Fiscal
Period Management (1)

%

683
139
823
-530
4
297
-19
352
15
159
1
51
2
83
38
131
464
－
4
-10
0
0
19
479
-181
358
490
-85
42
-310
-310
-310
-310
-496
-

7.6%
25.2%
8.7%
-100.0%
15.5%
3.0%
-2.5%
19.1%
3.3%
29.5%
5.5%
27.0%
1.1%
21.8%
96.9%
7.8%
10.8%
－
1.1%
-12.2%
10.5%
0.5%
20.1%
9.7%
-3.6%
6.9%
7.1%
-91.2%
5.1%
-7.1%
-7.1%
-7.1%
-7.1%

<Portfolio>
Portfolio>
Portfolio as of end of 11th fiscal
period: 48 properties
Preferred securities: 1
Properties to be acquired in 12th
fiscal period and after: 1*The preferred securities are based on
the premise of liquidation of the
Kawasaki Dice TMK<Average Monthly Occupancy
during Period>
98.5％
98.5％
<Total Number of Units
Outstanding>
625,000 units<LTV Ratio>
38.9％
38.9％
(Reference)
Comparison with the distribution per unit of the 11th
fiscal period minus the capital gains from the sale ofreal estate
11th fiscal period: 6,148 yen*1 The Kawasaki Dice TMK preferred securities are investment securities and thus not included in real estate rental revenues.

12th fiscal period: 6,500 yen (+352 yen)

For details on assumptions for the 12th Fiscal Period forecast, please refer to the “Assumptions for the 12th Fiscal Period Forecast (July 1, 2007 December 31, 2007)” on pages 4 and 5 of the “Japan Prime Realty Investment Corporation 11th Fiscal Period Results (January 1, 2007 - June 30, 2007).”

Japan Prime Realty Investment Corporation 21

Breakdown of Unitholders (Units by Owner)
The Add-on Offering Led to an Increase in Total Units and No. of Individual andOther Domestic Corporation Investors and the Units they Held, but the Ratio they Held Decreased
Number ofUnitholders

625,000
600,000
530,000

530,000

530,000

530,000

9.9%
52,36612.4%
65,647

13.6%
71,94714.1%
74,822

14.0%

6.9%

500,000

Units
outstanding
430,000

36,564430,000

14.6%
77,214430,000
7.2%

400,000

10.8%
46,542
20.3%
87,474

10.8%
46,59017.5%

52.3%
224,870

200,000

100,000

56.2%
241,691

74,03013.8%
73,381

62.9%
333,491

63.0%
333,697

253
(+49)
11.9%
74,59816.9%
63.8%
338,145

72,727

60.4%
259,891

63.7%
337,488

Of whichtrust banksown

Of whichtrust banksown

Of whichtrust banksown

Of whichtrust banks
own

20.3%

22.9%

22.5%

24.5%

107,342

121,481

119,104

129,658

Of whichtrust banks
own

57.5%
359,538
Of whichtrust banks
own
24.9%
155,575

Of whichtrust banksown

Of whichtrust banks
own

10.2%

13.4%

43,77957,76916.5%
71,114

15.4%

15.5%

66,421

66,438

14.7%
78,07712.3%
65,324

10.7%
56,832

9.6%
50,975

8.4%
52,723

Dec.
2003

June
2004

Dec.
2004

June
2005

Dec.
2005

June
2006

Dec.
2006

June
2007

178
(+30)
of which,
12 are trust
banks
(+5)

16.2%
69,6660

Individuals

220
(+19)

138,141

30,94475,298300,000

22.1%

17,002(+1,398)

Financial Institutions

Other Domestic Corporations

16,351(+1,300)

Foreign Investors____________________
Note: The composition ratio is rounded to one decimal place.

Japan Prime Realty Investment Corporation 22

Property SummaryProjected Trends of Occupancy Rates
11th Period (June 2007)

13th Period (June 2008)

12th Period (Dec. 2007)
Forecast

100%
99%

99.2%

98%

99.0%

97%

98.0%

96%

A 1.8% increase compared tothe 97.2% forecasted at thetime of announcing the 10th
Fiscal Period results

95%
94%

Includes finalized new tenants
and contract cancellations

93%
92%
91%

Average Occupancy Rate
99.0％

98.5％

99.1％

90%

(Reference) Total leasable area: 361,574.77㎡ (end of the 11th fiscal period)
(1)
or 49
-ooka Office
ffor
Yume
(1) TheThe occupancy
occupancy rate
rate forfor thethe 12th
12th fiscal
fiscal period
period andand after
after isis for49 properties
properties including
including YumeYume-ooka
Office Tower
Tower toto be
be acquired
acquired
in
July
2007.
in July 2007.
(2)
ideration allcons
13(2) TheThe occupancy
occupancy forfor thethe 12th
12th fiscal
fiscal period
period has
has taken
taken into
into considerationconsideration
all ofof thethe contract
contract terminations
terminations known
known asas ofof AugustAugust 13,
13,,
2007
2007 andand included
included only
only executed
executed contracts
contracts forfor thethe scheduledscheduled new
new tenants.
tenants.
(3)
enants inttenants(3) TheThe occupancy
occupancy forfor thethe 13th
13th fiscal
fiscal period
period includes
includes some
some newnew tenants
in addition
addition toto thethe above
above (2).
(2).

Japan Prime Realty Investment Corporation 24

NOI
NOI Yield
Yield byby Property
Property forfor thethe 11th
11th Fiscal
Fiscal Period
Period (Tokyo(Tokyo CBDs
CBDs andand Greater
Greater Tokyo)
Tokyo)(Jan. 1, 2007 – June 30, 2007)
1 2 .0 %1 1 .9 %Portfolio NOI 5.8%
1 0 .1 %1 0 .0 %Office Buildings NOI 6.0%

1 0 .0 %Retail Properties NOI 5.6%
8 .1 %

8 .0 %

7 .7 %
7 .2 %
6 .9 %

6 .9 %

6 .6 %

6 .7 %

6 .4 %

6 .6 %

6 .3 %
5 .2 % 5 .6 %5 .3 %

6 .0 %

5 .5 %

4 .9 %

5 .9 %

5 .7 %

5 .1 %

5 .2 %

5 .0 %

4 .7 %

4 .8 %

4 .7 %

4 .1 %
3 .9 %

4 .0 %

3 .5 %

2 .2 %

2 .0 %

0 .0 %
A

Type

Area

B

C

D

E

F

G

H

I

J

K

L

M

N

OfficeTokyo CBDs

A: Kanematsu Building
I: JPR Ichigaya Building
B: Kanematsu Building Annex
J: Oval Court Ohsaki Mark West
K: Shinjuku Square Tower
C: JPR Ningyo-cho Building
L: BYGS Shinjuku Building
D: Shin-Kojimachi Building
E: JPR Crest Takebashi Building M: Across Shinkawa Building Annex
F: MS Shibaura Building
N: JPR Shibuya Tower Records Building
G: Gotanda First Building
O: JPR Daikanyama
H: Fukuoka Building
P: JPR Jingumae 432

O

PRetail

Q

R

S

T

U

V

W

X

Y

Z

Office

A
A

A
B

A
C

A
D

RetailGreater Tokyo
Q: Shinjuku Sanchome East Building
Y: Rise Arena Building
R: Arca East
Z: Tanashi ASTA
S: JPR Chiba Building
AA: Cupo-la Main Building
T: JPR Yokohama Nihon Odori Building AB: JPR Musashikosugi Building
U: Shinyokohama 2nd Center Building AC: Musashiurawa Shopping Square
V: Kawaguchi Center Building
AD: Kawasaki Dice Building
W: JPR Ueno East Building
X: Tachikawa Business Center Building

Japan Prime Realty Investment Corporation 25

NOI
NOI Yield
Yield byby Property
Property forfor thethe 11th
11th Fiscal
Fiscal Period
Period (Other(Other selected
selected cities)
cities)(Jan. 1, 2007 – June 30, 2007)

1 2 .0 %Portfolio NOI 5.8%
1 0 .0 %1 0 .2 %Office Buildings NOI 6.0%

9 .4 %
9 .1 %

Retail Properties NOI 5.6%
8 .4 %

8 .3 %

8 .0 %
7 .1 %
6 .8 %

5 .8 %

6 .7 %

5 .9 %

5 .7 %

5 .7 %

6 .0 %

6 .6 %
6 .0 %

5 .4 %

4 .3 %

4 .2 %
3 .7 %

4 .0 %

2 .0 %

0 .0 %
a

Type
Area

b

c

d

Officeef

RetailOsaka

a: Meiji Yasuda Life Osaka Umeda Buildingb: Tokyo Tatemono Honmachi Buildingc: JPR Dojima Buildingd: JPR Umeda Loft Building
e: Benetton Shinsaibashi Building
f: Housing Design Center Kobe
g: Chayamachi Grande Building

g

h

i

j

k

OfficeOfficeNagoyaFukuokah: JPR Nagoya Sakae Buildingi: Mitsubishi UFJ Lease & Finance
Nagoya Head Office Building
j: JPR Hakata Building
k: Tenjin 121 Building
l: JPR Hakata-Chuo Building

l

m

n

OfficeoRetailSapporo/Sendai

p

q

r

OfficeOther cities

m: NORTH 33 Building
n: Sompo Japan Sendai Buildingo: Strasse Ichibancho
p: Niigata Ekinan Center Building
q: Sompo Japan Wakayama Buildingr: JPR Naha Building

Japan Prime Realty Investment Corporation 26

Profit or Loss Valuation

As of June 30, 2007

 Real Estate valuation (June 2007)(\ mn)
Book value(A)(%)

Acquisition price(%)
Tokyo CBDs
OfficeRetailSubtotal
Greater Tokyo
OfficeRetailSubtotal
Other Cities
OfficeRetailSubtotal
Total

Appraisal value(B)(%)

Profit or loss valuation

(B-A)

(%)

75,841
19,16095,001

30.9%
7.8%
38.7%

74,423
19,214
93,636

30.9%
8.0%
38.9%

90,157
21,635
111,792

31.6%
7.6%
39.2%

15,734
2,421
18,156

21.1%
12.6%
19.4%

32,44638,97571,421

13.2%
15.9%
29.1%

31,19238,452
69,644

13.0%
16.0%
29.0%

40,47042,604
83,074

14.2%
14.9%
29.1%

9,278
4,152
13,430

29.7%
10.8%
19.3%

49,94017.5%
40,37014.2%
90,31031.7%
285,176 100.0%

8,654
4,390
13,044
44,630

21.0%
12.2%
16.9%
18.6%

43,12717.6%
35,85014.6%
78,97732.2%
245,399 100.0%

41,28617.2%
35,98015.0%
77,26632.1%
240,546 100.0%

 Development of Potential Gain/Loss on Holding Real Estate(JPY mn)
mn)

45,00035,00044,630

Profit or loss valuation

25,00031,24315,000

10,5825,000< Recovery of the Japanese economy >Improvement of leasing market
Real estate market booming

19,230-5,000-15,000-8,323June
2004-7,451
Dec.
2004-3,868
June
2005

Dec.
2005

June
2006

Dec.
2006

June
2007

Asset value is expected toincrease with the growth ofcash flow
Japan Prime Realty Investment Corporation 27

Overview of TRIM

Overview of TRIM -- Biography
Biography ofof Management
Management
Name
Toshihiro Hagiwara
President & Chief Executive Officer

Kazuo Kitami
Director & Chief Administrative Officer

Seiji Miwa
Director & Chief Investment Officer

Yasuo Furuya
Director & Chief Financial Officer

Biography
 Has over 30 years of experience in investment, brokerage and development
development ofreal estate as well as property management since joining Tokyo Tatemono
Tatemono Co.,
Ltd. in 1968. At Tokyo Tatemono, he worked on acquisitions of leasingleasing building
companies with a total transaction value in the tens of billions of yen. He was
Director and Head of the Osaka Branch of Tokyo Tatemono before assuming
assuming his
current role of President and CEO of Tokyo Realty Investment Management,
Management, Inc.
(TRIM) in January 2001. In addition, he assumed the concurrent rolerole asSubstitute Executive Officer of Japan Prime Realty Investment Corporation
Corporation (JPR)in September 2007.
 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life
Insurance Company) in 1975. Since then, he has been involved in a widewide-rangeof finance business and real estate investment for almost 30 years.
years. His
experience includes overseeing the insurer’insurer’s loan management as its credit
manager, formulation of a series of regulations such as selfself-assessment in linewith the insurance inspection manual and supervising credit management
management basedon such regulations.
 Joined Tokyo Tatemono in 1983. After working in Design Supervision,
Supervision, Planningand Development for 15 years, he was responsible for real estate securitizationfrom 1998. He became a member of the JJ-REIT Composition Project Team after
the formation of the first securitization deal based on the JapaneseJapanese SPC law. He
was responsible for the establishment of TRIM and was one of the key members in
the launch of JPR. In 2003, he was seconded to TRIM to work in asset
asset
management. He is a firstfirst-class architect.
 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life

Insurance Company) in 1980. Spent eight years in securities investment
investment
operations engaged in interest rate analysis, as well as the establishment
establishment of bondinvestment and asset management companies. Undertook activities related tovariable insurance securities management and oversaw securities investment
activities as Chief Bond Trader. Later, he gained further experience
experience in stock
market investment operations.
Japan Prime Realty Investment Corporation 29

Overview of TRIM -- Measures
Measures toto Avoid
Avoid Conflicts
Conflicts ofof Interests
Interests
Transactions with Interested Parties<1st check > Compliance Committee

 Acquisitions/sales of individual assets
 Property management commissions
 Trading intermediation or agent
 Large-scale renovation works, etc.

Asset Manager’s Compliance Committee
Prior examination of appropriateness/rationalityof transactions by members including outside
attorney, 4 full-time directors + compliancemanager + outside attorney (Special Committee)【Prior Examination】<Decision Making Organization>< 2nd check > Compliance Subcommittee
Asset Manager’s Compliance
Subcommittee

Board of Directors【 Prior Review】

 4 full-time directors: Dispatched fromshareholders, except the President
 4 part-time directors: Interlocking

directors with shareholders

Prior review of decision making procedures ofvarious committees by members including 4 fulltime directors + deal manager + compliancemanagerOR

Committees(Investment Policy Committee / Investment
Subcommittee / Management Subcommittee)
 4 full-time directors
 4 managers in each committee< 3rd check > Investment Committee
JPR : BoD Meeting
Prior approval of transactions by a committee
independent from shareholders of the asset
manager, based on investor-oriented decision【Prior Approval】

Execution of Selected Deals Only
Japan Prime Realty Investment Corporation 30

-Making Process
Overview of TRIM -- Decision
Decision-Making
Process ofof Property
Property Acquisition
Acquisition
Enhanced Due Diligence Process upon Acquisition
Draft

Investment Management Division

Review

Compliance Subcommittee*1

Reviews whether or not the decision procedure of theInvestment Subcommittee violates any laws, ordinances, rules,
bylaws of the investment corporation, internal rules, etc.

Determineacquisition
policyInvestment Subcommittee

Determines the acquisition policy for the property based on
the materials disclosed by the seller and other content

Due diligence

Due Diligence Subcommittee

Transactions withinterested parties,
advanceverification/approval

Finalization of
acquisition
Determination of
acquisition ofproperties valued at a
certain level or greater

Conclusion ofcontract

Compliance Committee/Board of
Officers of Investment
Corporation

Investment Subcommittee

The Subcommittee verifies the content, importance and such oflegal compliance, site related studies, environmental risks,interests and other items indicated by the engineering report(ER) that the Investment Subcommittee had conducted prior toacquisition and also verifies the appropriateness of solutions
and improvements regarding problems

After obtaining the results of due diligence and negotiations
with the seller, it judges the compliance with investment
standards and the appropriateness of the acquisition price andmakes the decision on the acquisition

Board of Directors*2

Acquisition*1: The Compliance Subcommittee holds a session whenever there isis asession of the Investment Subcommittee or Due Diligence Subcommittee.
Subcommittee.
*2: The Board of Directors of the asset manager must discuss any acquisitions(sales) of individual assets valued at a certain level or greater
greater and exercise
caution in their management.

Japan Prime Realty Investment Corporation 31

Overview of TRIM -- The
The FeeFee Structure
Structure ofof TRIM
TRIM AM Fee Structure (No fees for purchase/sale of property)
Merits from Economies of Scalez Fixed(JPY 12.5 mn every 6 months)+
Incentive Fee 1AM fee structure initially designed to enjoy
economies of scaleIncentive Fee 1
Æ 2% of total revenues, decreasing to 1.5% for+amounts exceeding JPY 8 bnz Incentive Fee 2

Incentive for Cost Reductions
Incentive fee linked to distributable amountÆ 3% of the amount available for distribution prior to+deduction of relevant fees will be allocated as
Incentive Fee 2z Incentive Fee 3

Incentive for Acquiring Blue-Chip Properties

0.25% of the price for assets being acquired(excluding acquisition costs, consumption taxes,etc.)Japan Prime Realty Investment Corporation 32

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

Web site URL: http://www.jpr-reit.co.jp/jpr_e/
Japan Prime Realty Investment Corporation 33