(TSE Code: 8982)

Top REIT, Inc.
Presentation on
Business Results for
The Fourth fiscal Period
November 1, 2007－
April 30, 2008

June 17, 2008

IndexOverview Since IPO
I. Topics
I-1.
I-2.
I-3.
I-4.

Fourth Fiscal Period Acquisition: Harumi Island Triton Square OfficeTower Z
Fourth Fiscal Period Acquisitions: Shiba Koen Building / Faret East
Building 8F (Additional Acquisition)
Fifth Fiscal Period Acquisition: Ecology Toyosu Procentury
Financial Standing: Rated Anew

II. Fourth Fiscal Period Results (Ended April 2008)
II-1. Results of the Fourth Fiscal Period (Summary)II-2. Results of the Past Periods and Forecasts
III. External Growth Strategies
III-1. External Growth Achievements: History of Asset GrowthIII-2. External Growth Achievements: Appreciation of Asset Values
III-3. External Growth Strategies
IV. Internal Growth Strategies
IV-1. Internal Growth: Maintaining High Occupancy Rate
IV-2. Internal Growth: Results from Office Rent Renewal / Room forInternal Growth by Renewing Rents Upward
IV-3. Internal Growth: Results from Residential Rent Renewal / Room forInternal Growth by Renewing Retail Rents Upward
V. Financial Strategies
V-1. Credit Rating and Debt Composition as of April 30, 2008
V-2. Financial Strategies: Preparation for Risk of Fluctuating Interest
Rates and Spreading Out Maturity Dates
IV-3. Financial Strategies

VI. Fourth Fiscal Period Results (Ended April 30, 2008)
VI-1. Income Statement (Summary) / Dividend Statement
VI-2. Balance Sheets (Summary)VI-3. Major Financial Indicators
VI-4. Fifth and Sixth Fiscal Period Earnings Forecast
VI-5. Unitholders
VI-6. Unit Price Performance and Volume (March 1, 2006 – June 30, 2008)
VII. Appendix: Portfolio Overview
VII-1. Portfolio Map
VII-2. Portfolio Overview – Portfolio Summary as of April 30, 2008
VII-3. Portfolio Overview as of May 31, 2008
VII-4. Appraisal Values as of April 30, 2008
VII-5. Appraisal Cap Rate
VIII. Appendix: Property Details
VIII-1. Operating Income by Property Basis (Fourth Fiscal Period)
VIII-2. NEC Head Office Building
VIII-3. Harumi Island Triton Square Office Tower Y
VIII-4. Akasaka Oji Building
VIII-5. Office Properties
VIII-6. Sagamihara Shopping Center
VIII-7. Retail Properties
VIII-8. Fukasawa-House Towers H & I
VIII-9. OAK PLAZA
IX. Appendix: Structure of Asset Manager
IX-1. Decision Making Process for Acquisition and Disposition of
Properties
IX-2. Overview of Asset Manager
X. Appendix: Other Reference
X-1. Summary of Real Estate Market Indicators
X-2. Characteristics of Top REIT and Operational Strategies
X-3. Investment Policy
X-4. Internal Growth Policy
Contact

1

Overview since IPO
Y2008

Y2007

Y2006
Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

First Fiscal Period : Nov 2, 2005 – Oct 31, 2006 364Days
Actual Asset management Period :Mar 1, 2006 – Oct 31, 2006 245Days

Topics Listed(Mar 1, 2006)

New Property Acquired(Jun 30, 2006)

77 Properties
Properties¥104,386mn¥104,386mn

Dec

Jan

Feb

Mar

Apr

May

Second Fiscal Period : Nov 1, 2006 –Apr 30, 2007 181Days

Jun

Jul

Aug

Sep

Oct

Third Fiscal Period : May 1, 2007 –Oct 31, 2007 184Days

Nov

Jan

Feb

Mar

Apr

Fourth Fiscal Period : Nov 1, 2007 –Apr 30, 2008 182Days

May

Jun

Fifth Fiscal Period

New Property Acquired (Mar 19,27, 2008)

Obtained Rating New Property Acquired(Oct 3, 2006)(Dec 8, 2006)

88 Properties
Properties¥113,286mn¥113,286mn

Obtained Rating (Apr 22, 2008)

New Property Acquired(Mar 19,20, 2007)

99 Properties
Properties¥123,921mn¥123,921mn

New Property Acquired(May 30, 2008)11
11 Properties
Properties¥130,846mn¥130,846mn

13
13 Properties
Properties¥157,187mn¥157,187mn

14
14 Properties
Properties¥¥ 162,347mn
162,347mn

Mar 18 Faret East Building 8th Floor ¥571mn
Mar 19 Shiba Koen Building ¥5,770mn
Mar 27 Harumi Island Triton Square
Office Tower Z ¥20,000mn

Mar 1 Harumi Island Triton Square Office Tower Y ¥33,000mn, Akasaka Oji Building ¥9,660mn,
Kanda Park Plaza ¥5,156mn, Faret East Building ¥1,520mn and Nittetsu Honmachi Building ¥1,100mn
Mar 3 NEC Head Office Building ¥41,950mn
External
GrowthDec

Mar 1 Sagamihara Shopping Center ¥12,000mn
Jun 30 Ito-Yokado Higashi-Narashino ¥8,900mn
Mar 19 Musashiurawa Shopping Square ¥4,335mn
May 30 Ecology Toyosu Procentury¥5,160mn

Dec 8 Fukasawa-House Tower H & I ¥10,635mn

Mar 20 OAK PLAZA ¥2,590mn¥33,400mn¥33,400mn¥37,400mn¥37,400mn¥35,900mn¥35,900mn¥47,100mn¥47,100mn¥54,300mn¥54,300mn

Mar 20 Fixed by IRS¥11,000mn May 31 Interest Rate Fixed by Interest Rate Swap Total ¥23,000mn

Financial
Strategy（Debt）

June 30¥4,000mn

Aug 31 ¥2,500mn

Dec 8 ¥13,700mn¥83,000mn¥83,000mn
Aug 6 Fixed by Interest Rate Swap
Total ¥44,000mn

Mar 3 Long-Term Debt ¥33,400mn

Short-Term Debt

¥54,400mn¥54,400mn

Mar 19, 20¥20,900mn

Jun 29
Log-Term Debt ¥54,400mn

May 27
Fixed By IRS
Total ¥62,300mn
May 27 Long-Term
Debt ¥72,700mn

May 19, 27
Short-Term debt ¥10,300mn

Financial
Strategy（Equity）

Initial
Initial Public
Public Offering
Offering¥82,260mn¥82,260mn
Offering at ¥550,000 per unit

Term-end
Unit Price(closing)¥689,000

Term-end
Unit Price(closing)¥843,000

Term-end
Unit Price(closing)¥524,000

Term-end
Unit Price(closing)¥391,0002

I. Topics3I-1. Fourth Fiscal Period Acquisition:
Harumi Island Triton Square Office Tower Z
Address

1-8-12 Harumi, Chuo Ward,Tokyo

AcquisitionPrice

20 billion yen

Site Area

39,569.53m2

Floor
Space

267,132.67m2

Floors4 Basement Floors , 40
Floors Above Ground

Completion

October 2001

Title

Land: Co-ownership(7,601,679/100,000,000)
Building: Compartmentalized
ownership (a part of 17th Floor
and 18th – 22th Floor )■ Harumi Island Triton Square, one of the largest redevelopment projects completed first in the 21st century in Japan, hasa total development area of approximately 100,000 m2 and is composed of office buildings, retail facilities and a highrise condominium.
■ Office Tower Z is one of the superhigh-rise office towers that are the landmark of Harumi Island Triton Square.
■ Obayashi Corporation subleases to end tenants as the master lessee.

4I-2. Fourth Fiscal Period Acquisitions:Shiba Koen Building / Faret East Building 8F (Additional Acquisition)
Shiba Koen Building

Faret East Building

Address

3-5-5 Shiba, Minato Ward, Tokyo

Acquisition Price

5.77 billion yen

Site Area andFloor Space

940.92m2/4,958.29m2

Floors

1 Basement floor,
8 Floors Above Ground

Completion

May 1991

Title

Land: Ownership and Co-ownership partly
Building: Compartmentalized Ownership(1st - 7th Floor)

Address

2-34-7 Akebonocho, Tachikawa City,
Tokyo

Acquisition Price

2.091 billion yen(8th Floor: 0.571 billion yen)

Site Area andFloor Space

2,350.84m2/16,206.34m2

Floors

1 Basement Floor,
12 Floors Above Ground

Completion

December 1994

Title

Land: Co-ownership(54,799,700/100,000,000)
Building: Compartmentalized Ownership(2nd – 5th and a part of 6th and 8th Floor )5

I-3. Fifth Fiscal Period Acquisition: Ecology Toyosu Procentury

Address

8-8-4, Toyosu, Koto Ward, Tokyo

Acquisition Price

5.16 billion yen

Site Area andFloor Space

2,499.10m2/9,630.96m2

Floors

1 Basement Floor,
9 Floors Above Ground

Completion

January 2005

Title

Ownership■ The property is located in a highly convenient area approximately four minutes’ walk from the Toyosu Station of the Tokyo Metro Yurakucho subway line, and aten minutes’ commute to central Tokyo. Toyosu area is considered attractive for rental properties due to its convenient location and favorable environment.
■ The building, completed in January 2005, is a rental condominium with a total of 224 rental units (1 retail unit and 223 residential units) ranging in types from 1R
to 2LDK. The size of the units ranges from approximately 24m² to 53m². The building is equipped with energy-saving exterior thermal insulation.

6

I-4. Financial Standing: Rated Anew

Rated anew by Rating and Investment
Information, Inc. (R&I)

Acquired:April 22, 2008

Rating:AA－ (Stable)

Extract from a Press Release of Rating And Investment Information, Inc. As of April 22, 2008
【Reasons for Rating】
Portfolio is comprised of quality assets. These include major landmark buildings of the district such as NEC Head Office Building,Harumi Island Triton Square, suburban-type shopping centers with robust commercial area near Tokyo Metropolitan Area and highgrade large residential properties. These properties are very competitive in general.
On an acquisition price basis, 60% of its properties under management comprise NEC Head Office Building and Harumi Island
Triton Square (Office Tower Y and Z). Concentration risk is alleviated with their strong competitiveness. Concentration to sometenants is noted but such concentration risk is kept low based on their high creditworthiness and stable lease contracts in place.
Moreover, TOP is expected to diversify its portfolio and tenants through future external growth.
Its sponsors have participated in some way in sourcing all the properties held by TOP, such as mediation by Sumitomo Trust andcontribution by Nippon Steel City Produce and Oji Real Estate Group. TOP intends to make selective investments among
tremendous opportunities it obtains through optimal use of sponsors' broad network. Therefore, steady growth amid the current
harsh investment environment can be expected.
TOP's sponsors are composed of major real estate firms and a financial institution. Therefore, TOP can not only diversify its asset
acquisition route but can also tap into their expertise in investment, operational management and finance. Such composition has
also worked to promote compliance through checks and balances among the sponsors.
The borrowings are on an uncollateralized and unsecured basis since TOP became listed. 88% of its current borrowings are longterm term loans with a period of 3-7 years. 75% of them are on fixed interest rate and maturity dates are relatively diversified. TOP
trades with 8 major domestic banks and trust banks centering on Sumitomo Trust, its sponsor. Its close relationship with Sumitomo
Trust, especially, is considered to support its stable funding, and R&I takes account of such implication to TOP's rating.

7II. Fourth Fiscal Period Results (Ended April 2008)8

II-1. Results of the Fourth Fiscal Period (Summary)(in millions yen, except as otherwise noted)

Fourth Fiscal Period
Results
November 1, 2007 –April 30, 2008

Fourth Fiscal Period
Forecast(Announced on
December 14, 2007)

Period of AssetManagement (Days)

182

182

－

－

184

－

－

Operating Revenue

4,817

4,661

156

+3.3%

4,715

102

+2.2%

Ordinary Income

1,842

1,721

121

+7.0%

1,848

-6

-0.3%

Net Income

1,841

1,720

121

+7.0%

1,847

-6

-0.3%

155,000

155,0000－

155,000

0－¥11,884¥11,100

¥784

+7.1%

¥11,921

-¥37

-0.3%

13

11

2

－

11

2

－

188,035－－－

155,923

32,112+20.6%

Items

Number of Units
Issued (Unit)
Dividend per Unit
(Yen)
Number of Properties
AssumedAppraisal Value Total

Third Fiscal Period
Results
May 1, 2007 – October
31, 2007Net Change(Results vs. Forecast)■ Difference Between Forecast and Actual Results■ Other References
Items

Operating Revenue：¥156mn¾ Increase in rental revenue due to acquisition of three office buildings¾ Favorable rent revenue in terms of Akasaka Oji Bldg. and other properties

Fourth Fiscal Period
Results

Third Fiscal Period
Results

Number of Tenants

43

40

Total Rentable Area

276,833.20m2

261,671.67m2

99.5%

99.7%

Current Depreciation¥987mn¥927mnCurrent Capital
Expenditures¥463mn¥49mn

Term-End Unit Price¥391,000¥524,000

Term-End Market
Capitalization¥60,605mn¥81,220mn

Occupancy Rate
Ordinary Income: ¥121mn¾ Actual maintenance costs were less than the previous forecast due toreviewing efficiency of maintenance work and achieving maintenance cost
reductions through diligent negotiations.
¾ Non-operating income (interest received) was more than the previous
forecast <NCD, etc.>.
¾ Increase in depreciation and interest payment due to increase ofborrowing for acquisition of new properties

Net Change(Fourth Fiscal Period Results
vs. Third Fiscal Period Results)9II-2. Results of the Past Periods and Forecasts
OperatingOperating Revenue
Revenue

OperatingOperating Expenses
Expensesin city planning tax and(in millions Yen) <Difference
fixed assets tax (1)>(in millions Yen)

6,000

5,597

5,618

5,500
5,000
4,500

4,526

4,715

6,000

Tax payment dates for threeproperties are unevenly decided
against our fiscal period.

<Difference in city planning tax and
fixed assets tax (2)>Expenses for Musashiurawa
Shopping Square and OAK PLAZA
will begin to be borne from the fifth
fiscal period.

City Planning Tax and Fixed
Assets Tax imposed

5,000

4,817

Net
Net Income
Income

4,000

2,000

City Planning Tax and Fixed
Assets Tax imposed

4,000

3,000

3,500

6,000
5,000

4,000

4,037

(in millions Yen)

1,610

1,878

2,465
(490)

2,464
(439)

2,974

2,967

(521)

(491)

3,000
2,033
2,000

2,323

1,847
(490)

1,841
(439)

1,937

1,953

(521)

(491)

5th FP

6th FP

3,000
1,000

2,500
2,000

th

th

5 FP
6 FP
1st FP
第1期実績
第2期実績
第3期実績
第4期実績
第5期予想
第6期予想
2nd FP
4th FP
3rd FP(Forecast) (Forecast)

分配金
分配金

0

0

th

(Forecast) (Forecast)Items

18,00014,992

16,00011,921

11,884

12,50012,60013,116

12,00010,000th

6 FP
5 FP 第6期予想
第1期実績
第2期実績
1st FP
2nd FP 第3期実績
4th FP 第5期予想
3rd FP 第4期実績

City Planning Tax and Fixed
Assets Tax imposed(Yen)

14,0001,000

Days of Fiscal
Period

1st FP 第2期実績
2nd FP 第3期実績
4th FP 第5期予想 第6期予想
3rd FP 第4期実績
第1期実績(Forecast) (Forecast)

1st Fiscal
2nd Fiscal Period 3rd Fiscal Period 4th Fiscal Period
Period*1(Reference only)

5th Fiscal
Period(Forecasts)

6th Fiscal
Period(Forecasts)

182.5

181

184

182

184

181

Operating
Revenue¥4,037mn¥4,526mn¥4,715mn¥4,817mn¥5,597mn¥5,618mn

OperatingExpenses¥1,610mn¥1,878mn¥2,465mn¥2,464mn¥2,974mn¥2,967mn

¥0mn

¥0mn

¥490mn¥439mn¥521mn¥491mn¥730mn¥873mn¥927mn¥987mn¥1,149mn¥1,156mn

Net Income¥2,033mn¥2,323mn¥1,847mn¥1,841mn¥1,937mn¥1,953mn

Dividend per Unit

¥13,116¥14,992¥11,921¥11,884¥12,500¥12,600

FFO per Unit

¥17,827¥20,625¥17,903¥18,255¥19,900¥20,050

8,000
Tax & Public Due

6,000

Depreciation

4,000
2,000
0

th

th

6 FP
5 FP
第1期実績
第2期実績
第3期実績
第5期予想
第6期予想
1st FP
2nd FP
4th FP
3rd FP 第4期実績(Forecast) (Forecast)*1. Actual days of the 1st fiscal period was 245 Days. The above numbers are calculated by a following calculation method ( (First Fiscal Period Results) / 245 Days x 365 Days / 2)

10

III. External Growth Strategies

11III-1. External Growth Achievements: History of Asset Growth
History
History ofof Asset
Asset Growth
Growth (on(on anan acquisitionacquisition priceprice basis)
basis)
Increase
Increase inin asset
asset size
size centering
centering on
on offices
offices since
since IPO
IPO

(in billions of yen)

Asset Size
210

250
OfficeRetailResidential

Other
14 Properties
13 Properties

200

157.187

162.347

11 Properties
8 Properties

150

7 Properties

130.846

Offices113.286

104.38675.0%
Offices

100

Additional properties
to be acquired
Approx. 39.0 bn yen

118.727 (73.1%)

Residential/retail/other50
Residential/retail/others

25.0%

43.620 (26.9%)

0

IPO

End of 1st Period End of 2nd Period End of 3rd Period End of 4th Period May 30, 2008

Properties acquired in 4th period

3 office buildings(Period ending April 2010)

Additional properties
to be acquired
Approx.9.0 bn yen

LTV
LTV Scope
Scope forfor operations:operations: 40～50%
40～50%

Faret
Faret East
East Building
Building 8F
8F (additional(additional acquisition)acquisition)¥0.571bn (Acquired on: March 18, 2008)

Shiba
Shiba Koen
Koen Building
Building¥5.77bn (Acquired on: March 19, 2008)

HarumiHarumi Island
Island Triton
Triton Square
Square Office
Office Tower
Tower ZZ

¥20.00bn (Acquired on: March 27, 2008)

Properties acquired in 5th period

8th Period

Dividend
Dividend level:
level: ¥12,000～13,000/unit/period¥12,000～13,000/unit/period
is
is to
to be
be pursued
pursued

1 residential

Ecology
Ecology Toyosu
Toyosu Procentury
Procentury¥5.16bn (Acquired on: May 30, 2008)

Dividendfor 4th FP

Forecast dividendfor 5th FP

Forecast dividendfor 6th period¥11,884¥12,500¥12,600

12

III-2. External Growth Achievements: Appreciation of Asset Values
Appreciation
Appreciation ofof Asset
Asset Values
Values Portfolio overall(in millions of yen)

Policy to invest
mainly into offices
in central Tokyo

Pursuing qualityof assets undermanagement

Increase in
asset values

 Appraisal Gain of Three Major Properties in Central Tokyo(in millions of yen)

NEC Head Office

Harumi Island Triton Square
Office Tower Y

Akasaka Oji Building

13III-3. External Growth Strategies
Comprehensive
Comprehensive REIT
REIT Focusing
Focusing on
on Offices
Offices inin Central
Central Tokyo
Tokyo
Characteristic
Purpose

OfficeGrowing
assetsGrowing
assetsRetailStableassetsResidential

StableassetsFuture Investment Policy/StanceTargetProactive investment

location:Central Tokyo (Mainly 6 wards)《Full use of growthpotential/profitability 》
Proactively reviewing properties
mainly located in central Tokyo

Specifications:
100 tsubo/floor or larger
High-quality specifications(facilities/specifications, etc.)

Carefully-selected properties
reviewed
Centering on multi-use commercial
properties

Flexibility in replacement of tenants:
Multi-tenant type/close to terminal
station/center of commerce/stable tradearea《Pursuing stability》
Properties reviewed with importanceplaced on location, mainly in central
Tokyo

Convenience:
Accessibility to the nearest station andcity center
Convenience of life (retail facilities, etc.)

Investment
rate
75%

Investment target

Investment
rate
25%

Investment target¥157.5bn level¥52.5bn level

14

IV．Internal Growth Strategies

15IV-1. Internal Growth: Maintaining High Occupancy Rate
“Tenants First” = Maintaining and Improving Tenant Satisfaction

Reflecting demand from tenants in facility management plan, thus improving assets quality and value

Building up good relationship with major tenants will support long-term stable cash flows

Five
Five Major
Major Tenants
Tenants

As of April 30, 2008
2008 (4th Fiscal Period End)

Leasing
Leasing Agreement
Agreement with
with Major
Major 22 Tenants
Tenants
Leasing agreement with Ito-Yokado

Name of Tenants

Type ofIndustry

Name of Properties

RentedArea (㎡）

Share
(%)

Ito-Yokado Co., Ltd.

Wholesale/
RetailSagamihara Shopping Center/
Ito-Yokado Higashi-Narashino

112,089.54

40.5

Manufacturing

NEC Head Office Building

72,238.03

26.1

and rent is revised every three years.
 That for Higashi-Narashino is valid until November 30, 2014.
Leasing agreement with NEC

Real Estate

Faret East /OAK PLAZA/
Shiba Koen Building

15,032.51

5.4

 20-years fixed term leasing agreement that runs until Dec 2025 has been

Manufacturing

Harumi Island Triton Square OfficeTower Y11,905.47

4.3

Construction

Harumi Island Triton Square OfficeTower Z

10,914.20

3.9

NEC
Nippon Steel City
Produce
Sumitomo Metal
Industries
ObayashiCorporation

99.8%

99.9%

280,000

全賃貸可能面積(㎡)Gross Rentable Area (㎡)99.5%

261,671.68

260,000
240,000

signed. A rent will be revised in Dec 2013, Dec 2017 and Dec 2021.
(Cancellation option by NEC thereafter under certain conditions)

Maintaining Stable and High Occupancy

Occupancy
Occupancy rate
rate (Transitions)(Transitions)
300,000

 Long-term leasing agreement for Sagamihara is valid until Aug 10, 2013

99.7%

261,671.67

99.8%

261,671.67

99.9%

261,671.67

稼働率
Occupancy Rate
99.8%

261,671.67

99.8%

99.7%

99.5%

276,794.31

276,833.20

261,721.74

98.0%
96.0%
94.0%

229,231.70

92.0%

220,000

90.0%

200,000
180,000

100.0%

178,104.46

88.0%

160,000

86.0%

140,000

84.0%

120,000

82.0%

100,000

March
2006
平成18年3月末
（上場時）
(IPO)

平成18年10月末
Oct－06
End（第1期末）of 1st FP

平成19年4月末
Apr－07
End（第2期末）of 2nd FP

平成19年10月末
Oct－07
End（第3期末）of 3rd FP

平成19年11月末

Nov－07平成19年12月末

Dec－07

平成20年1月末

Jan－08

平成20年2月末

Feb－08

平成20年3月末

Mar－08

平成20年4月末
Apr－08（第4期末）
Endof 4th FP

80.0%

16

IV-2. Internal Growth: Results from Office Rent
Renewal / Room for Internal Growth by Renewing Rents Upward
Office:Office: Rent
Rent Renewal
Renewal Results
Results (End(End ofof 4th
4th FP)/Schedule
FP)/Schedule ofof Future
Future Rent
Rent Renewal
RenewalRent renewal results ＝Rent before renewal(in millions of yen)

Renewed monthly rent

Increase in monthly rent (FP end)(%)

Monthly rent before renewal

Estimated for new tenant market rents

250

Past results

1st
1st FP:
FP: renewal:
renewal: 0.2%
0.2% increase
increase

Future schedule

2nd
2nd FP:
FP: renewal:
renewal: 0.1%
0.1% increase
increase200

3rd
3rd FP:
FP: renewal:
renewal:
9.1%
9.1% increase
increase150

4th
4th FP:
FP: renewal:
renewal:
14.9%
14.9% increase
increase

100

50

0

2nd FP

1st FP

3rd FP

Office:Office: Room
Room forfor Upward
Upward Renewal
Renewal ofof Rents
Rents (by(by area)area)
Potential
Potential upwards
upwards renewal
renewal ofof rents
rents fromfrom thethe 5th
5th FPFP to
to thethe 8th
8th FPFP

4th
4th FPFP rent
rent
renewalrenewal results
results(about54M/period)(about 54M/period)

4th FP(Excluding renewal ofrents for NEC andHarumi Z)

Prospective
Prospective growth
growthinin 5th5th FPFP(about(about 18M/period)
18M/period)

Potential
Potential upward
upwardrenewalrenewal ofof rents
rents(about(about 120M/period)
120M/period)

5th FP

6th FP

5% or higher thanmarket: 2%

More than 10% rise
expected: 3%

Equivalent tomarket: 19%

More than 10% rise
expected: 5%

5% or higher thanmarket :1%

Equivalent tomarket: 23%

NEC
42%

As of end of 3rd FP
Market rentMore than 20% rise
expected: 3%More than 10% rise
expected: 11%

More than
5% rise expected:
23%

4th FP actual rent

8th FP

Ratio
Ratio ofof Potential
Potential Upward
Upward Renewal
Renewal ofof Rents
Rents (by(by rent
rent amount)amount)Increase
Increase dueduetoto properties
properties
newly
acquired
newly acquired

3rd FP actual rent

7th FP

More than 5% rise
expected: 20%

Harumi Z: 13%
NEC35%

As of end of 4th FP

Rent of about 28% of total office floor area may be renewed upward(excluding NEC and Harumi Z)

17

IV-3. Internal Growth: Results from Residential Rents Renewal/ Room for Internal Growth by Renewing Retail Rents Upwardth
Residential:
Residential: Renewal
Renewal Rents
Rents (End(End ofof 44th FP)FP) andand Newly
Newly Contracted
Contracted Rents
Rents

Residential:
Residential: Maintaining
Maintaining HighHigh Occupancy
Occupancy
4thFP

面積(㎡)

(㎡)
nd FP
2第2期

Newly
Newly
contracted
contracted
Rents
Rents

rd FP
3第3期

0

10

20

30

10,747.81

94.6%

10,164.11

89.5%

10,000

Achieved
Achieved 2.6%
2.6% growth
growth (Avg.)(Avg.)

Occupancy Rate
稼働率100.0%

10,914.59 10,831.20
10,633.16 10,922.08 10,984.84
96.7% 96.1%
96.2%
95.4% 10,414.21

91.7% 10,069.11
88.7%

93.6%

95.0%

8,000

90.0%

6,000

85.0%

4,000

80.0%

2,000

75.0%

40
No-change
据置改定
Increased
増額改定
Decreased
減額改定

nd FP
2第2期

RenewalRenewal
Rents
Rents

12,000

Achieved
Achieved 1.2%
1.2% growth
growth (Avg.)(Avg.)th FP
4第4期

Numberof Units
対象戸数(戸)No-change
前賃料と同額Increased
増額
Decreased
減額

Achieved
Achieved 3.1%
3.1% growth
growth (Avg.)(Avg.)

Rented Area
賃貸面積(㎡)

第3期

3rd FP

th FP
4第4期

Numberof Units
対象戸数(戸)0 平成19年12月末 平成19年4月末
Oct 平成19年11月末 平成19年12月末 平成20年1月末
Apr 平成19年10月末
Dec
2006

平成1 8 年1 2 月末

0

10

20

30

40

（ 取得時）

平成1 9 年4 月末

平成1 9 年1 0 月末

(第2期末)期末）At（ 第2end(第3期末)期末）At（ 第3endof 2nd FP

Nov－07
平成1 9 年1 1 月末

of 3rd FP

平成1 9 年1 2 月末

Dec－07Apr
平成20年2月末 平成20年3月末 平成20年4月末 平成20年5月末
Jan－08
Feb－08Mar－08（第4期末）At endth
平成2 0 年1 月末

平成2 0 年2 月末

平成2 0 年3 月末

70.0%

平成2 0 年4 月末

of 4 FP

RetailRetail ：Scheduleof Future
Future Rent
Rent Renewal
Renewal：Schedule of
th FP
5
第5期

Sagamihara
Sagamihara Shopping
Shopping Center
Center

6th FP

第6期

Residential

Newly Contracted Rents:
Continuing to achieve
increased rents mainly fromnew tenants

RetailSagamihara Shopping Center:
Commencing negotiation to
pursue higher rent based on risinglocal land value

IY
IY Higashi-Narashino
Higashi-Narashino(Sales-Based(Sales-Based Rent)
Rent)

th FP
7
第7期
th FP
第8期
8
th FP
第9期
9

Musashiurawa
Musashiurawa Shopping
Shopping Square
Square

第10期
10th FPArea subject torent renewal: ㎡

010,000 20,000 30,000 40,000 50,000 60,000

18

V. Financial Strategies

19V-1.Credit
Rating and Debt Composition as of April 30, 2008
1.
Issuer Rating
Le n de r
Sumitomo Trust
Mizuho CB
SMBC
Term
Bank of Tokyo Mitsubishi UFJ
Loan 1
Chuo Mitsui Trust
Mitsubishi UFJ Trust
Sub TotalＡ２（ Stable）

Assigned by Moody’s Investors Services

ＡＡ－（ Stable）

Assigned by Rating and Investment Information , Inc. (R&I) (Obtained on April 22, 2008)

Lo n gTerm
De bt

Dat e o f
M at u r it y

Re m ain in g
Pe r io d(Du r at io n )Re paym e n t
MethodNo t eMarch 3,
2006

March 3,
2009

10 Months

BulletUnsecured

March 3,
2006

March 3,2011

2 Years &10 Months

BulletUnsecured

1.60%(Fixed)

June 29,
2007

June 30,
2010

2 Years &2 Months

BulletUnsecured

1.95%(Fixed)

June 29,
2007

June 29,2012

4 Years &2 Months

BulletUnsecured

June 29,
2007

June 30,
2014

6 Years &2 Months

BulletUnsecured

March 27,
2008

March 26,
2010

1 Year &11 Months

BulletUnsecured

March 27,
2008

March 27,2013

4 Years &11 Months

BulletUnsecured

March 19,2008
March 27,
2008

March 18,
2009
March 27,2009

In t e r e st Rat e

5,200

1.20%(Floater)

5,500
1.39%(Fixed)
6,000
16,700

5,500
6,000

1.30%(Floater)
1.92%(Fixed)

Sub Total

16,700Same as Term Loan 1

8,500

Sub Total

8,500

Same as Term Loan 1

8,500

Sub Total

8,500

Sumitomo Trust

2,000

2.27%(Fixed)

Term Development Bank of Japan
Loan 5
Dai-Ichi Life

1,000

2.40%(Fixed)

1,000

2.40%(Fixed)

Sub Total
Sumitomo Trust
Mizuho CB
Term SMBC
Loan 6 Bank of Tokyo Mitsubishi UFJ
Mitsubishi UFJ Trust
Sub Total

4,000

Same as Term Loan 66,300

1.48%(Fixed)

3,000

1.53%(Fixed)

Term
Loan 3

Term
Loan 4

Lo n gTerm
De bt

Same as Term Loan 1

Dat e o f
Bo r r o win gs

Term-end
B a l a nce( i n mi l l i on Yen)

5,200
Term
Loan 2

Term
Loan 7 Development Bank of Japan
Sub Total
Lo n g T e r m De bt To t al
Sh o r t
Te r mDe bt

Sumitomo Trust
Same as Term Loan 6

Sh o r t T e r m De bt T o t al
T o t al(Obtained on October 3, 2006)

9,000

1.21%(Fixed)

9,000

9,300
72,7006,700

2 Years & 9 Months (Avg)

1.59% (Avg.)

1.14%(Floater)

11 Months

BulletUnsecured

11 Months

BulletUnsecured

3,600

1.13%(Floater)

10,300

1.14% (Avg.)

11 Months (Avg)

83,0001 . 5 3 % (Avg. )2 Y e ar s & 7
M o n t h s (Avg. )Note: Interest rates are rounded to the second
decimal point, and the remaining periods arerounded to a whole number.
The averages for interest rates and remaining
periods are weighted average figures using
month-end balance.

20V-2. Financial Strategies: Preparation for Risk ofFluctuating Interest Rates and Spreading Out Maturity Dates
Total borrowings:

83 billion yen

Ratio of long-term borrowings:

Loan to value (LTV):

87.6%

47.4%

Ratio of fixed rate interest borrowings:75.1%*Including current portion of long-term borrowings

Ratio
Ratio ofof Long-Term
Long-Term Debt
Debt

End of
1st FPIPO

End of
2nd FP

Ratio
Ratio ofof Fixed
Fixed Rate
Rate Interest
Interest Debt
Debt

End of
3rd FP

Short Term

FloaterLong Term

Fixed

End of
4th FP

End of
1st FP

IPO

Actions
Actions toto SpreadSpread Out
Out Debt
Debt Maturity
Maturity Schedule
Schedule

End of
2nd FP

End of
3rd FP

End of
4th FP

March 19 and 27, 2008: Borrowings for acquisition of new properties(in billion yen)(in billion
yen)
（億円）
30
25
20
15
10
5
0

30
25
20
15
10
5
0
2008

2009

2010

2011

2012

2013

Nov. 1, 2007 –Oct. 31, 2008

Nov. 1, 2008 –Oct. 31, 2009

Nov. 1, 2009 –Oct. 31, 2010

Nov. 1, 2010 –Oct. 31, 2011

Nov. 1, 2011 –Oct. 31, 2012

Nov. 1, 2012 –Oct. 31, 2013

0

16.7

8.5

16.7

8.5

2008

2014

Ma 3, 2009 Jun 30, 2010 Mar 3, 2011 Jun 29, 2012

After
After Borrowings
Borrowings

Nov. 1, 2013 –Oct. 31, 2014

Nov. 1, 2007 – Nov. 1, 2008 –Oct. 31, 2008 Oct. 31, 2009

4.0

2010

2011

2012

2013

2014

Nov. 1, 2009 –Oct. 31, 2010

Nov. 1, 2010 –Oct. 31, 2011

Nov. 1, 2011 –Oct. 31, 2012

Nov. 1, 2012 –Oct. 31, 2013

Nov. 1, 2013 –Oct. 31, 2014

Mar 3, 2009 Mar 27, 2010
Mar 18, 2009 Jun 30, 2010 Mar 3, 2011
Mar 27, 209

Jun 30, 2014
0

2009

54.4
0

27.0

17.5

16.7

Jun 29, 2012 Mar 27, 2013 Jun 30, 2014
8.5

9.3

4.0

83.0

21

V-3. Financial Strategies

Sound Financial Policy
Conservative Financial Operation

Maintaining Multiple Financing Channels

Spreading Out Debt Maturities

Maintaining Good Relationships with Prominent Lenders to
Secure Stable Debt and Additional Borrowing Capability

Preparing for Future Interest Rate Fluctuation
Maintaining a Conservative Leverage Ratio

Consistently
Consistently maintain
maintain LTV
LTV atat aa conservative
conservative 40-50%
40-50% toto ensureensure financing
financing capabilities
capabilities forforforthcoming
forthcoming acquisitions.
acquisitions.

Capacity
Capacity ofof Additional
Additional
Borrowings
Borrowings andandAcquisitions
Acquisitions

Capacity for additional borrowings: Approx.
10bn yen (Borrowings＋money on hand)

Capacity for additionalborrowings: approx. 9.2

Current assets
15.
15.4
Borrowings
83

The refinancing was executed on June 29, 2007 extending
the borrowing periods and spreading out repayment dates.
This policy will continue to be followed as a means toimprove the stability of financial operations.

Hedging against the risk of rising interest rates（in billions of yen)
Capacity for additional
acquisitions

Diversification of borrowing period and repayment
dates

Ceiling
Ceiling LTV＝①
LTV＝①
Operational target
50%(Scope for operations
40～50%)

PeriodPeriod end
end LTV＝②
LTV＝②




The current ratio of fixed rate interest borrowings is 75.1%.
Top REIT will closely monitor conditions of short-term andlong-term interest rate market and take appropriate action
if necessary.

Building of a stable bank formation

As of period end
47.4%

Maintaining financial flexibility & capability

Ratio of interestbearing debt to total
assets48.0%

Security Deposit (with interest) 1.1

Fixed assets
159.
159.7

Other 7

Net assets84All borrowings have been obtained unsecured andan issuer rating has been obtained.
Top REIT continues to maintain stable transactions
with banks that have financing since IPO.
When acquiring a new property in March 2008, a
total of ¥28.6bn was raised through long and shortterm borrowings.

22

VI. Fourth Fiscal Period Results (Ended April 30, 2008)23

VI-1. Income Statement (Summary) / Dividend Statement■ Income Statement

Accounting Item

■ Dividend Statement
4th FP
November 1, 2007 – April
30, 2008 (182 days)

3rd FPMay 1, 2007 – October
31, 2007 (184days)

Value(in millions
yen)

Value
(in millions
yen)

(%)

I. Operating Revenue andExpenses
1. Operating Revenue

4,817

100.0

4,715

2. Operating Expenses

2,464

51.2

2,465

Rental expenses

1,974

1,970

Asset management fees

367

367

Other operating expenses

122

126

Operating Income
II Non-Operating Income andExpenses
1. Non-Operating Income

2,353

24

48.8

0.5

2,250

43

Interest received

23

16

Other non-operating income

127

2. Non-Operating Expenses

534Interest paid

499

414

Amortization of funding costs

55

New investment unit issue
costs

－

－

Other non-operating expenses

29

24

11.1

Ordinary Income

1,842

Net income before income taxes

1,842

1,848

Corporate residents andbusiness taxes

1

1

Corporate tax adjustment

0-0

Net Income
Retained Earnings at the End
of Period

1,841
1,842

38.3

444

38.2

1,848

1,847

Accounting Item

4th FP
3rd FP
November 1, 2007 – April 30, May 1, 2007 – October 31,
2008 (182days)
2007 (184days)
Value(in millions yen)

(%)

Value
(in millions yen)

Retained earnings at
end of period

1,842

1,847

100.0

Total Dividend Amount

1,842

1,847

52.3

(Dividend per Unit)(yen)

11,884

11,921Retained earnings
carried forward

0

0

47.7

0.9

¾ Increase in rental revenue through acquisition ofHarumi Island Triton Square Office Tower Z,
Shiba Koen Building and Faret East Building 8th(portion acquired newly)

9.4【Rental expenses】
Depreciation:
Management expenses:
Utility Cost:¥987mn¥307mn¥154mn and others

39.2

39.2

1,847

24

VI-2. Balance Sheets (Summary)

Accounting Item

4th FP Ended
April 30, 2008
Value
(in millions yen)

3rd FP Ended
October 31, 2007
(%)

Value
(in millions yen)Accounting Item

I Total Current Assets

15,415

Cash and deposits
Cash and deposits held in trust
account
Tenants receivables
Consumption tax refund
receivable
Other current assets

6,054

4,745

8,850

8,243

41

32

398

-

II Total Fixed Assets
1. Total Investment Properties,
net
Buildings

159,783

91.2

132,875

91.0

159,58591.1

132,698

90.9

8.8

70

13,062

1,112

－

4,885

－

Buildings, etc. in trust

50,015

43,524

Land in trust

103,572

89,174

2. Total Intangible Assets

0

Other intangible assets
3. Total Investment and Other
AssetsLeasehold and security
deposits
Long-term prepaid expenses

0.0

0

0.0

0

0.0

0.1

176

0.1

0
196
10

10

79

60

Deferred tax assets

39

57

Other investments

67

48

III Total Deferred Assets
Organization expenses (initialexpense)Total Assets

28

0.0

28
175,226

9.0

40

Land

34

145,972

Liabilities
I Total Current Liabilities
Accounts payable
Short-term debt
Current portion of long-termloans payable
Other account payable
Expenses payable
Consumption tax payable
Rents received in advance
Other current liabilities
II Total Fixed Liabilities
Long-term debt
Tenant lease and security
deposits
Tenant Lease and security
deposits in trust
Derivative debt
Total Liabilities
Net Assets
I Total Unitholders’ Equity
1. Unitholders’ equity
2. Reserves
Retained earnings at period
endTotal reserves

0.0

100.0

3rd FP Ended
October 31, 2007(%)

28,381
158
10,300

16.2

Value(in millions yen)
1,325
57
－

16,700

－

308
181
－
718
14
62,80756,000

240
143
171
710
2
60,62754,400

35.8

169

－

6,526

6,065

(%)

0.9

41.5

111
91,18952.0

162
61,95242.4

84,10282,26048.0
46.9

84,107
82,260

57.6
56.3

1,842

1,847

1,842

1.1

1,847

1.3

-65

-0.0

-88

-0.0

Deferred hedge losses
Total Net Assets-65
84,03748.0-8884,01957.6

Total Liabilities and Net
Assets

175,226100.0

145,972

100.0

II Adjustments for valuation,
conversion, etc.

34
100.0

Value
(in millions yen)(%)

Assets

4th FP Ended
April 30, 2008

Total debts: : ¥83,000mn (1)Of which, interest-bearing debt: ¥1,185mn (2)Tenant leasehold and security deposits, etc(1) + (2) Total interest-bearing debt: ¥84,185mn

25

VI-3. Major Financial Indicators
Items

4th FP
Nov 1, 2007 –April 30, 2008

3rd FPMay 1, 2007 –October 31, 2007

2nd FP
Nov 1, 2006 –April 30, 2007

Remarks

182 days

184 days

181 days

Ratio of interest-bearing debt to total
assets at period end

48.0%

38.1%

38.0%

Interest-bearing debt at period end / total assets at period end

Ratio of debt to total assets atperiod end (“LTV”)

47.4%

37.3%

37.1%

Total debt at period end / total assets at period end¥3,830mn¥3,671mn¥4,010mn

4.8%

5.6%

6.1%

¥2,829mn¥2,775mn¥3,197mn¥18,255¥17,903¥20,625

1.1%

1.3%

1.7％

2.3%

2.5%

3.4%

2.2%

2.2%

2.7%

4.4%

4.3%

5.5%

0.53

0.74

1.23

48.0%

57.6%

57.8%

Days of Fiscal Period

Rental NOI (Net Operating Income)Rental NOI yield

Funds from Operation (FFO)

FFO per unit

Return on Assets (ROA)

Annualized
Return on Equity (ROE)
Annualized
NAV Ratio
Unitholders’ Equity to Total Asset
Ratio at period end

Rental revenue – rental expenses + depreciation for the period
Rental NOI (semi-annualized) x 2 / total acquisition price of portfolio
at period end
Net income + depreciation for the period

FFO/number of outstanding units issued at period end

Ordinary income / (total assets at beginning period (for first fiscal
period, total assets as of March 1, 2006) + average total assets atperiod end) / 2

Net income/(net assets at beginning period (for first fiscal period, net
assets as of March 1, 2006) + average net assets at period end) / 2

Term-end market capitalization/(unitholders’ equity at period end) +(period end appraisal price – acquisition price))
Unitholders’ equity at period end/total assets at period end

26

VI-4. Fifth and Sixth Fiscal Period Earnings Forecast

Items
Period of Asset Management(Days)

5th FP Forecast
May 1, 2008 – October 31, 2008

6th FP Forecast
November 1, 2008 – April 30, 2009

4th FP Results
November 1, 2007 – April 30, 2008

184

181

182

Operating Revenue¥5,597mn¥5,618mn¥4,817mn

Operating Expenses¥2,974mn¥2,967mn¥2,464mn¥1,237mn<Tax and public dues ¥:521mn>¥1,220mn<Tax and public dues ¥:491mn>¥986mn<Tax and public dues ¥:439mn>

Of which, Depreciation Cost

¥1,149mn¥1,156mn¥987mnOperating Income¥2,622mn¥2,650mn¥2,353mn

Ordinary Income¥1,938mn¥1,954mn¥1,842mn

Net Income¥1,937mn¥1,953mn¥1,841mn

Number of Units Issued (units)

155,000

155,000

155,000

Dividend per Unit (yen)¥12,500¥12,600¥11,884

NOI (Rental)¥4,360mn¥4,398mn¥3,830mn

FFO¥3,087mn¥3,109mn¥2,829mn

Of which, Rental Expenses(excluding depreciation cost)

Assumptions

Number of properties: 14 properties
Number of investment units issued: 155,000
Total debt: ¥83bn
Non-operating expenses:
5th Fiscal Period ending October 2008: ¥679mn (of which, interest to be paid:¥660mn)6th Fiscal Period ending April 2009: ¥708mn (of which, interest to be paid: ¥673mn)

Number of properties: 1327

VI-5. Unitholders
Ownership
Ownership Share
Share byby Investor
Investor Criteria
Criteria as
as ofof April
April 30,
30, 2008
2008
Investor Criteria

Number of Units Held

NumberNumber ofof Unitholders
Unitholders

Retail Investors/Others

15,472

10.0%

5,397

93.9%

Financial Institutions(Incl. Security Firms)

100,110

64.6%

130

2.3%

Non-Financial Institutions(Corporate)

11,721

7.6%

121

2.1%

Overseas Investors

27,697

17.9%

99

1.7%

155,000

100.0%

5,747

100.0%

Total

Financial Institutions (incl. Security firms:
Non-Financial Institutions (Corporate):
Overseas Investors:

Number of Unitholders
1st Fiscal Period End
Total Number of
Investors: 6131

3rd Fiscal Period
End Total Number of
Investors: 5,789

Share (%)

1 Japan Trustee Service Bank, trust account

11,6627.52

2 NikkoCiti Trust and Banking Corporation, trust account11,545

7.45

3 The Master Trust Bank of Japan, trust account

8,575

5.53

4 Trust and Custody Services Bank, trust account

6,628

4.28

5 North Pacific Bank

6,139

3.96

6 The Bank of Ikeda

6,008

3.88

7 American Life Insurance Company GAL

3,847

2.48

8 Goldman Sachs International

3,825

2.47

9 Nomura Trust and Banking, trust account

3,812

2.46

10 Bank of New York GCM Client Accounts ElSG

3,699

2.39

11 The Sumitomo Trust & Banking

3,176

2.05

12 Nippon Steel City Produce

3,162

2.04

3,162

2.04

14 Trust & Custody Services Bank, money trust account

3,069

1.98

15 The Fuji Fire and Marine Insurance

3,049

1.97

81,358

52.49

Rank

12

Name

Oji Real Estate

Total

4ｔｈ Fiscal Period
End Total Number of
Investors: 5,747

165 (3.0%)
127 (2.3%)
80 (1.4%)

Retail Investors/Others 5,149 (93.3%)
Financial Institutions (incl. Security firms:
Non-Financial Institutions (Corporate):
Overseas Investors:

Top
Top 1515 Unitholders
Unitholders as
as ofof October
October 31,
31, 2007
2007
Number ofUnits held

Retail Investors/Others 5,769 (94.1%)
Financial Institutions (incl. Security firms:
Non-Financial Institutions (Corporate):
Overseas Investors:

2nd Fiscal Period
End Total Number of
Investors: 5521

171 (2.8%)
146 (2.4%)
45 (0.7%)

156 (2.7%)
123 (2.1%)
85 (1.5%)

Retail Investors/Others 5,425 (93.7%)
Financial Institutions:
Non-Financial Institutions (Corporate):
Overseas Investors:

130 (2.3%)
121 (2.1%)
99 (1.7%)

Retail Investors/Others 5,397 (93.9%)

NumberNumber ofof Units
Units Held
Held
1st Fiscal Period End
Total numberof Units
Outstanding
155,000
2ｎd Fiscal Period End
Total numberof Units
Outstanding
155,000
3rd Fiscal Period End
Total numberof Units
Outstanding
155,000
4th Fiscal Period End
Total numberof Units
Outstanding
155,000

Retail Investors/Others
16,470 (10.6%)

Non-Financial Institutions(Corporate): 13,105 (8.5%)

Financial Institutions (Incl. Security Firms):
110,045 (71.0%)
Retail Investors/Others
13,320 (8.6%)

Non-Financial Institutions(Corporate) : 12,393 (8.0%)

Financial Institutions (Incl. Security Firms):
101,763 (65.7%)
Retail Investors/Others
15,491 (10.0%)

Overseas
Investors
27,524 (17.8%)

Non-Financial Institutions(Corporate) : 11,304 (7.3%)

Financial Institutions (Incl. Security Firms):
101,512 (65.5%)
Retail Investors/Others
15,472 (10.0%)

Overseas
Investors
15,380 (9.9%)

Overseas
Investors
26,693 (17.2%)

Non-Financial Institutions(Corporate) : 11,721 (7.6%)

Financial Institutions (Incl. Security Firms):
100,110 (64.6%)

Overseas
Investors
27,697 (17.9%)28

VI-6. Unit Price Performance & Volume (March 1, 2006 - May 31, 2008)
TOP出来高TOP Trading Volume

TOP
TOP

東証REIT指数（指数化後）
TSE REIT Index

TOPIX（指数化後）
TOPIX

（円）
（JPY）

1st Fiscal
Period950,000

Historical Closing High¥998,000(Feb 16, 2007)

3rd Fiscal
Period

2nd Fiscal
Period（Unit）（口）

4th Fiscal
Period

5th Fiscal
Period10,0008,000
850,000

750,000

6,000

650,000
4,000

550,000

Historical Closing Low¥360,000(Mar 17, 2008)

2,000

450,000

350,000

MarH18.3 H18.4
Jan H19.2
Jan H20.2
July H19.8
H18.3
Apr H18.5
June H18.7
July H18.8
Sep H18.10
Nov H18.12
Apr H19.5
May H19.6
May H18.6
Aug H18.9
Oct H18.11
Dec H19.1
Feb H19.3
Mar H19.4
June H19.7
Aug H19.9
Sep H19.10
Oct H19.11
Nov H19.12
Dec H20.1
Feb H20.3
Mar H20.4
Apr H20.5
May
2006

44thth Fiscal
Fiscal Period
Period End
End
Unit
Unit Price
Price(Closing)(Closing)

2007

JPY 391,000（April 30 ,2008)

0

2008

IPO
IPO PricePrice

JPY 550,000 Mar 1, 2006

Historical
Historical HighHigh since
since IPO
IPO
(Closing(Closing Price)
Price)
Historical
Historical low
low since
since IPO
IPO
(Closing(Closing Price)
Price)

JPY 998,000 Feb 16, 2007
JPY 360,000 Mar 17, 200829

VII. Appendix: Portfolio Overview

30VII-1. Portfolio Map
Tokyo metropolitan
area

Osaka metropolitan
area in Kansai

Musashiurawa
Shopping Square

Amagasaki

Faret East Building
Fukasawa-House
深沢ハウスＨＩ棟
Towers H & I

Ito-Yokado HigashiNarashino Store

Shin-Osaka

Osaka

Kyobashi

日鉄本町ビルNittetsu Honmachi
Building

Fukasawa-House
Towers H & I
Sagamihara
Shopping Center

TennojiHarumi Island Triton Square
OfficeTower Y / Office TowerオフィスタワーＹZ
晴海アイランドトリトンスクエア
Central Tokyo
Iidabashi
OAK PLAZA
Kanda

Akihabara
Kanda Park Plaza

Shinjuku
YotsuyaShibuyaWard

ChiyodaWard

Akasaka Oji
Building
MinatoWard

Shibuya

Shinagawa
Ward

NEC Head
Office Building

Tokyo

Chuo Ward
Shinbashi

Ecology Toyosu
Procentury

Sagamihara
Shopping Center
武蔵浦和ショッピングスクエ
ア

Shiba KoenHarumi Island
Building
Triton Square
Office Tower Y
Office Tower Z

Shinagawa

NEC
Head Office
日本電気本社ビル
Building

31

VII-2．Portfolio Overview – Portfolio Summary as of April 30, 2008

Total Acquisition Price:

100%

11.5%

Number of Properties: 13

PML：2.2%

Asset Class (property type)

Scale (on a total floor area basis)

18.4%

2.0%
8.1%
19.3%

80%
60%

88.5%

1.6%
6.8%
16.1%

その他
Others

81.6%
70.6%

75.5%

Retail
商業施設
Officeオフィスビル(40.2%)(37.0%)(32.1%)(26.7%)

0%

IPO
上場時

End of
第1期末
1st FP

100%

6.0%

5.5%

80%

10.7%
11.5%

17.7%

住宅
Residential

40%
20%

Rentable Area：276,833.20㎡¥157.187 billion

End of 2nd
第2,3期末and 3rd FP

End of
第4期末
4th FP

71.8%

66.2%

1.1%
13.0%

1.0%
19.8%

80%

86.0%

79.2%

0.8%

0.7%

28.6%

24.2%

70.6%

75.1%

20%

： 日本電気本社
Share of NEC（( )）：
Head Office
ビルの比率
Building

0%

IPO
上場時

End of 2nd
第2,3期末and 3rd FP

9.2%

7.6%

57.3%

60.4%

IPO
上場時

End of
第1期末
1st FP

End of 2nd
第2,3期末and3rd FP

End of
第4期末
4th FPLess than
1万㎡未満
10,000m2
10,000m2 –
1万㎡以上5万㎡未満
249,999m
50,000m2 –
5万㎡以上10万㎡未満
299,999m
2
100,000m
10万㎡以上or more0%100%

End of
第4期末
4th FP

4.9%

4.6%

5.9%

4.9%

49.4%

46.5%

40.3%

37.2%

80%

Osaka
関西圏
Metropolitan
東京周辺都市部
Tokyo
Central
東京都心部
Tokyo

14.6%

20
years or more
20年以上
15years – 19 years
15年以上20年未満
10years – 14 years
10年以上15年未満

33.7%

55年以上10年未満
years – 9 years
Less
than 5 years
5年未満

11.4%

9.5%

Average：：12.9 Years
Average
Average：12.9
Years

End of 2nd
第2,3期末and3rd FP

End of
第4期末
4th FP※Weighted Average based on
Acquisition Price

60%
40%
20%

End of
第1期末
1st FP

22.7%

Age of Buildings

60%
40%

26.8%

20%

Area
100%

9.3%

10.6%

60%
40%

6.8%

14.0%

19.8%

17.1%
25.2%

31.6%

0%

IPO
上場時

29.1%
End of
第1期末
1st FP※Numbers on above graphs are calculated based on Acquisition Price

32

VII-3. Portfolio Overview as of May
May 30, 2008
Asset
Class

Address

Acquisition Date

Floor Area(m2)

Rentable
Area (m2)Completion
Date

Acquisition
Price

Share
(%)

Occupancy(%)(Note)

No. ofTenants

NEC Head Office Building

Minato Ward,Tokyo

March 3, 2006

144,476.05

72,238.03

Jan 1990¥41,950mn

25.8

100.0

1

1.6

Harumi Island Triton Square
Office Tower Y

Chuo Ward,Tokyo

March 1, 2006

267,132.67

23,239.62

Oct 2001¥33,000mn

20.3

100.0

7

1.4

Harumi Island Triton Square
Office Tower Ｚ

Chuo Ward,Tokyo

March 27, 2008

267,132.67

10,914.20

Oct 2001¥20,000mn

12.3

100.0

1

1.5

Akasaka Oji Building

Minato Ward,Tokyo

March 1, 2006

10,063.05

7,281.83

Apr 1989¥9,660mn

6.0

100.0

3

6.3

Shiba Koen Building

Minato Ward,Tokyo

March 19, 2008

4,958.29

3,060.43

May 1991¥5,770mn

3.6

100.0

1

9.6

Kanda Park Plaza

Chiyoda Ward,Tokyo

March 1, 2006

5,511.83

4,537.66

Nov 1959¥5,156mn

3.2

100.0

10

14.1

Tokyo
Faret East Building
Metropolitan

Tachikawa City,Tokyo

March 1, 2006

16,206.34

5,850.23

Dec 1994¥2,091mn

1.3

100.0

1

2.8

Osaka

Osaka City, Osaka

March 1, 2006

6,714.09

4,409.52

Jun 1991¥1,100mn

0.7

100.0

11

8.0

131,531.52－¥118,727mn

73.1

100.0

35

－

Area

CentralTokyo

Property

OfficeNittetsu Honmachi Building－

Sub-Total (8 Properties)
Sagamihara Shopping
CenterRetailTokyo
Ito-Yokado HigashiMetropolitan Narashino Store
Musashiurawa Shopping
SquareSagamihara City,
Kanagawa Pref.

March 1, 2006

56,351.42

61,763.28

Aug 1993¥12,000mn

7.4

100.0

2

3.8

Narashino City,
Chiba Pref.

June 30, 2006

45,338.37

51,098.42

Oct 1994¥8,900mn

5.5

100.0

1

7.7

Saitama City,
Saitama Pref.

March 19, 2007

28,930.36

14,960.69

Oct 2005¥4,335mn

2.7

100.0

3

8.5

127,822.39－¥25,235mn

15.5

100.0

6

－

11,357.44

Jun 2004¥10,635mn

6.6

88.7

1

1.6

－

Sub-Total (3 Properties)
Residential

Tokyo
Metropolitan

OthersCentral
Tokyo

PML
(%)

Fukasawa-House Towers
H&I

Setagaya Ward,Tokyo

December 8, 2006

12,135.36

Ecology Toyosu Procentury

Koto Ward, Tokyo

May 30, 2008

9,630.96

6,789.03 January 2007

¥5,160mn

3.2

98.7

1

10.6

－

18,146.47－¥15,795mn

9.7

92.4

2

－

6,121.85

6,121,85

Apr 1985¥2,590mn

1.6

100.0

1

7.7

Sub-Total (1 Property)－

6,121,85－¥2,590mn

1.6

100.0

1

－

Total (14 Properties)－

283,622.23－¥162,347mn

100.0

－

44

－

Sub-Total (2 Properties)OAK PLAZA

Chiyoda Ward,Tokyo

March 20, 2007

(Note) Occupation rate is as of April 30, 200833

VII-4. Appraisal Values as of April 30, 2008
(In millions yen)
Asset
Class

Area

Property

Book Value

Acquisition
Price
(A)

Appraisal Price as of
Oct 31,2006

Appraisal Price as ofApr 30, 2007

Appraisal Price as of
October 31, 2007

Appraisal
Price (B)

Appraisal
Price (C)Appraisal
Price (D)

(B)-(A)(Ｃ)-(A)

Appraisal Price as ofApr 30, 2008
Appraisal
Price （Ｅ）

(D)-(A)(Ｅ)-(A)

NEC Head Office Building

43,20541,95047,0505,100

51,5009,550

52,50010,55055,00013,050

Harumi Island Triton
Square Office Tower Y

32,87433,00039,1006,100

41,3008,300

43,80010,80045,20012,200

Harumi Island Triton
Square Office Tower Z

20,77520,000

－

－

－

－

－

－

20,000

0

9,899

9,660

11,7002,040

14,2004,540

14,3004,640

15,7006,040

Shiba Koen Building

5,997

5,770

－

－

－

－

－

－

5,680

-90

Kanda Park Plaza

5,165

5,156

5,202

46

5,260

104

5,513

357

5,681

525

Tokyo
Metropolitan Faret East Building

2,024

2,091

2,140

620

2,450

930

2,550

1,030

3,470

1,379

Nittetsu Honmachi
Building

1,101

1,100

1,140

40

1,330

230

1,670

570

1,790

690

Sub-Total (8 Properties)

121,043

118,727

106,332

13,946116,040

23,654

120,333

27,947

152,52133,794

Sagamihara Shopping
Center

11,871

12,00012,100100

12,100100

12,100100

12,100

100

8,818

8,900

9,010

110

6,888

-2,012

5,873-3,027

5,845-3,055

Musashiurawa Shopping
Square

4,398

4,335

－

－

4,350

15

4,350

15

4,300

-35

Sub-Total (3 Properties)

25,08825,235

21,110210

23,338-1,89722,323-2,912

22,245-2,990Tokyo
Fukasawa-House Towers
Metropolitan H&I

10,835

10,635－－

10,500-135

10,500-135

10,500-135

Sub-Total (1 Property)

10,835

10,635－－

10,500-135

10,500-135

10,500-135

OAK PLAZA

2,617

2,590

－

－

2,590

0

2,767

177

2,769

179

Sub-Total (1 Property)

2,617

2,590

－

－

2,590

0

2,767

177

2,769

179

Total(13 Properties)

159,585

157,187

127,442

14,156

152,468

21,632

155,923

25,077

188,035

30,848CentralTokyo
OfficeOsaka

Akasaka Oji Building

RetailTokyo
Ito-Yokado HigashiMetropolitan
Narashino Store

Residential
OthersCentralTokyo

34

VII-5. Appraisal Cap Rate

物件名

First Fiscal Period
Discounted Cash Flow
MethodDirectCapitalization
Terminal
Method:Discount
Capitalizati
Rate
Cap Rateon RateSecond Fiscal Period
Discounted Cash Flow
MethodDirectCapitalization
Terminal
Method:Discount
Capitalizati
Rate
Cap Rateon RateThird Fiscal Period
Discounted Cash Flow
MethodDirectCapitalization
Terminal
Method:Discount
Capitaliza
Rate
Cap Ratetion Rate

4.2%

3.5%
(next 6yrs)
4.0%
4.0%
(afterwards)

3.8%(Next 7yrs)
4.1%
4.3%
(afterwards)

4.4%

3.7%
(Next 6yrs)
4.1%
4.2%
(afterwards)

4.6%

4.3%

4.8%

4.4%

4.1%

4.6%

4.3%

－

－

－

－

－

－

Akasaka Oji Building

4.4%

4.6%

4.7%

4.2%

4.4%

Shiba Koen Building

－

－

－

－

Kanda Park Plaza

5.2%

4.8%

5.8%

Faret East Building

5.9%

6.0%

Nittetsu Honmachi Building

6.3%

NEC Head Office Building

Harumi Island Triton Square
Office Tower Y
Harumi Island Triton Square
Office Tower Z

Sagamihara Shopping
Center
Ito-Yokado HigashiNarashino Store
Musashiurawa Shopping
SquareFukasawa-House Towers
H&I
OAK PLAZA

Fourth Fiscal Period
Discounted Cash Flow
MethodDirectCapitalization
Terminal
Method:Discount
Capitalizati
Rate
Cap Rateon Rate4.2%

3.5%
next 5yrs)
4.0%
4.0%
(afterwards)

4.2%

4.0%

4.5%

4.2%

3.9%

4.4%

－

－

－

4.2%

3.9%

4.4%

4.5%

4.2%

4.3%

4.5%

4.2%

4.3%

4.5%

－

－

－

－

－

4.4%

4.2%

4.5%

5.2%

4.8%

5.8%

5.1%

4.7%

5.7%

5.1%

4.7%

5.7%

6.2%

5.7%

5.8%

6.0%

5.5%

5.6%

5.8%

5.2%

4.9%

5.4%

6.3%

6.6%

6.2%

6.2%

6.5%

6.0%

6.2%

6.3%

5.8%

6.0%

6.1%

5.3%

5.2%

5.5%

5.3%

5.2%

5.5%

5.3%

5.1%

5.5%

5.3%

5.1%

5.5%

6.3%

5.4%

6.8%

6.1%

5.8%

6.6%

6.1%

5.2%

6.6%

6.1%

5.2%

6.6%

－

－

－

5.1%

5.0%

5.3%

5.1%

4.8%

5.3%

5.1%

4.8%

5.3%

－

－

－

4.3%

4.0%

4.5%

4.3%

4.0%

4.5%

4.3%

4.0%

4.5%

－

－

－

4.8%

4.3%

5.4%

4.7%

4.2%

5.3%

4.7%

4.2%

5.3%

Appraisers in Charge

Properties

Tanizawa Sogo Appraisal Co., Ltd.
Japan Real Estate Institute

NEC Head Office Building, Akasaka Oji Building, Nittetsu Honmachi Building
Harumi Island Triton Square Office Towers Y&Z, Faret East Building, Fukasawa-House Towers H&I

Chuo Real Estate Appraisal Co., Ltd

Kanda Park Plaza, Ito-Yokado Higashi-Narashino Store, OAK PLAZADAIWA REAL ESTATE APPRAISAL Corporation.

Sagamihara Shopping Center, Musashiurawa Shopping Square

Nippon Tochi-Tatemono Co., Ltd.

Shiba Koen Building

35

VIII. Appendix: Property Details

36

VIII-1. Operating Income by Property Basis (Fourth Fiscal Period)(in millions yen)
NEC Head
OfficeBuilding

Harumi Island Harumi Island Akasaka Oji Shiba Koen Kanda Park Faret East
Triton Square Triton Square Building
Plaza
Building
Building
Office Tower Office Tower
YZ

Nittetsu
Sagamihara Ito-Yokado
Honmachi Shopping
HigashiBuilding
CenterNarashinoStore

Musashiurawa FukasawaShoppingHouse
SquareTowers H&I

OAK
PLAZA

Days of Fiscal
Period182 Days

182 Days

35 Days

182 Days

43 Days

182 Days

182 Days

182 Days

182 Days

182 Days

182 Days

182 Days

182 Days

Total Revenue

1,370

1,320

97

423

32

189

132

106

408

236

129

276

94

1,370

1,320

97

423

32

189

129

106

408

236

129

265

94

226

354

6

100

3

41

59

44

34

64

3

45

2

Property
Management
Fee

1

175

0

37

2

10

24

16

2

1

1

34

0

Taxes andPublicCharges

212

91

0

35

0

13

9

13

28

31

-

3

-

Utility Costs

-

82

5

22

0

12

21

9

-

-

-

0

-

Insurance
Fees

1

2

0

0

0

0

0

0

1

1

0

0

0

RepairExpenses

8

0

-

2

-

2

1

2

1

27

0

5

0

Others

1

2

0

2

-

2

1

2

1

2

1

2

1

1,144

966

90

322

28

148

72

61

373

171

125

231

91

Depreciation &Amortization

236

265

43

31

7

12

35

25

78

124

50

66

9

Operating
Income

907

701

47

291

21

136

36

36

295

47

74

164

82

CapitalExpenditures

401

0

-

-

20

1

11

15

-

-

-

RentalRevenue
Property
Related
Expenses Total

ＮＯＩ-

Fixed asset tax/city planning tax
・Musashiurawa Shopping Square/OAK PLAZA: Expenses caused inand after 5th FP
・Harumi Triton Square Office Tower Z/Shiba Koen Building: Expenses
caused in and after 7th FP

13

Replacing airconditioning
equipments andothersConstruction ofelevator atmechanicalparking tower, etc.

Construction
to expand OA
floors, etc.

Construction
to expandpartitions, etc.

Construction to
renew exteriorpaving, etc.

Construction to
renew rooftop
refrigeration unit,
etc.

37

VIII-2. NEC Head Office Building
Address

5-7-1 Shiba, Minato Ward,Tokyo

AcquisitionPrice

41.95 billion yen

Site Area

21,190.14m2

Floor Space

144,476.05m2

Floors3 Basement Floors
39 Floors Above Ground

Completion

January 1990

Title

Land, Building:
Co-Ownership (50%)■ The building enjoys great transportation convenience with four railway lines usable (JR Yamanote Line, Keihin-Tohoku Line, Toei
Subway Mita Line and Toei Asakusa Line) providing good access to Haneda Airport and various places in central Tokyo.
■ This property is widely referred to as the NEC Super Tower and is a landmark in Tokyo.
■ NEC Corporation has its head office in this building. The area forms a conglomeration of the NEC group affiliates.

38

VIII-3. Harumi Island Triton Square Office Tower Y

Address

1-8-11 Harumi, Chuo Ward,Tokyo

AcquisitionPrice

33 billion yen

Site Area

39,569.53m2

Floor
Space

267,132.67m2

Floors4 Basement Floors , 40 Floors
Above Ground

Completion

October 2001

Title

Land: Co-ownership(16,884,921/100,000,000)
Building: Compartmentalized
ownership (3rd – 15th Floor )■ Harumi Island Triton Square is a large multi-use complex completed in 2001 through coordinated redevelopment of the Harumi district of Tokyo,
a bayside area. The Square has three skyscraper office buildings as its landmark, retail facilities and a high-rise condominium.
■ The property is a 40-story skyscraper that is an intelligent office building built in 2001 and equipped with state-of-the-art specifications/facilities.
■ The Tokyo head office of Sumitomo Metal Industries, Ltd. and the head office of Japan Trustee Services Bank, Ltd. are the main tenants.

39

VIII-4. Akasaka Oji Building
Address

8-1-22 Akasaka, Minato Ward, Tokyo

Acquisition Price

9.66 billion yen

Site Area and Floor
Space

2,023.72m2／10,063.05m2

Floors

1 Basement floor, 9 Floors Above Ground

Completion

April 1989

Title

Ownership■ This building is in an area extending from the Akasaka district of Tokyo, an area home to many hotels and embassies that is also popular among
foreign firms, to the Aoyama district, home to fashion, culture and music with many luxury brand shops.
■ The building faces Aoyama Dori (avenue) and enjoys great transit convenience as the closest station (Aoyama-itchome Station) has tracks for
the Tokyo Metro Subway Ginza and Hanzomon Lines, and for the Toei Subway Oedo Line. Although located in the center of Tokyo, the area isrich in greenery with the Akasaka Imperial Grounds extending along the opposing side of Aoyama Dori.
■ The anchor tenant is Sony Computer Entertainment Inc.

40

VIII-5. Office Properties
Kanda
Park Plaza

Nittetsu Honmachi
Building

Address

2-2-2 Kajicho, Chiyoda Ward, Tokyo

AcquisitionPrice

5.156 billion yen

Site Area andFloor Space

632.98m2／5,511.83m2

Floors

1 Basement floor, 9 Floors Above
GroundCompletion

November 1959
Repair works to enhance earthquake
resistance in 2003

Title

Ownership

Address

1-10-24 Utsubohonmachi, Nishi Ward,
Osaka

Acquisition Price

1.1 billion yen

Site Area andFloor Space

852.55m2／6,714.09m2

Floors2 Basement Floor, 12 Floors Above
GroundCompletion

June 1991

Title

Ownership41

VIII-6. Sagamihara Shopping Center

Address

3-13-33 Kobuchi, Sagamihara City , Kanagawa Pref.

Acquisition Price

12 billion yen

Site Area and Floor
Space

30,949.80m2／56,351.42m2

Floors

1 Basement Floor, 4 Floors Above Ground

Completion

August 1993

Title

Ownership■ Located along national highway 16, a lengthy central thoroughfare in the Tokyo metropolitan area, the large shopping center is also near Kobuchi Station on the
JR Yokohama Line, enjoying excellent access by road or rail. This commercial area has a population of some 620,000 within a 5km radius and about 1.86
million within a 10km radius. Many shopping centers, home centers and specialty stores are found along national highway 16, including the neighboring Jusco
Sagamihara Shopping Center.
■ This property has approximately 19,000m2 in sales space comprised of the directly operated Ito-Yokado and specialty shops, and provides parking for over
1,300 vehicles. The site also features a family restaurant and gardening specialty store.

42

VIII-7. Retail Properties
Musashiurawa Shopping
SquareAddress

7-3-1, Bessho, Minami
Ward, Saitama City,
Saitama Pref.

Acquisition Price

4.3 billion yen

Area of Land/Floor Space

8,317.99.㎡／28,930.36㎡

Structure/Floors

Steel structure with flat
roof / 1 basement floor,
4 floors above ground

Completion

October 2005

Type of Title

Co-ownership ("kyoyu")
of trust beneficiaryinterests in real estate(Ratio of ownership is 50%)

ItoIto-Yokado HigashiHigashi-Narashino Store
Address

7-3-1 Higashinarashino,
Narashino City, Chiba
Pref.

Acquisition Price

8.9 billion yen

Site Area and Floor
Space

29,854.57m2／
45,338.37m2

Floors

1 Basement Floor, 4Floors Above Ground

Completion

October 1994

Title

Ownership43

VIII-8. Fukasawa-House Towers H & I

Address

2-1-2 Fukasawa, Setagaya Ward, Tokyo

Acquisition Price

10.6 billion yen

Site Area andFloor Space

39,840.90m2／12,135.36m2

Floors14 Floors Above Ground

Completion

June 2004

Title

Land: Co-ownership (1,584,269/10,000,000)
Building: Compartmentalized ownership■ The surrounding area has a luxurious and spacious streetscape and is one of the most prestigious housing areas in Tokyo. The property is
adjacent to Komazawa Park and the site itself has rich greenery providing an excellent residential environment.
■ Fukasawa-House is a large housing project that consists of 13 residential towers with 772 units and a retail building within an expansive site. All
residences house underground parking. The subject property is the rental housing buildings in the project and has 124 units ranging in size from
2-4 bedroom units with areas of some 75m2 to 120m2. It comes with excellent anti-disaster facilities including an anti-earthquake structure andpotable water generation system for emergencies.

44

VIII-9. OAK PLAZA

Address

2-10-6 Kanda Awajicho, Chiyoda Ward,Tokyo

Acquisition Price

2.59billion yen

Area of Land/Floor
Space

1,013.49㎡／6,121.85㎡

Structure/Floors

SRC structure with a flat roofFloors / 1
basement floor, 10 floors above ground

Completion

CompletionApril 1985
(Completion Date of the conversion
March 2007)

Type of Title

Ownership■ This property is highly accessible as it is only a 3 to 6 minute walk from six stations including the JR Ochanomizu Station, JR Akihabara Station,
Tokyo Metro Marunouchi Line Awajicho Station. It boasts a sound location near the prime office areas of Marunouchi and Otemachi aroundTokyo Station and the Akihabara area and its IT base. etc.
■Since its completion in 1985, this property was used as a hotel named as Hotel New Kanda and now has been converted to a multi-use buildingthat has, in addition to hotels, offices (service offices and meeting rooms for rent), restaurant and retail shop.

45

IX．Appendix: Structure of Asset Manager

46

IX-1. Decision Making Process for Acquisition and Disposition of Properties

少数意見の報告
Report of minority opinions
（注2）

（注1）

ﾘｽｸ･
ｺﾝﾌﾟﾗｲｱﾝｽ
Risk and
委員会
Compliance(Note 1)

Department
立案部
in charge ofpreparing a
Proposals

ｺﾝﾌﾟﾗｲｱﾝｽ
室Compliance

Committee

審議・決議
Examination

Examination

and（否決） decision
差戻し

投資運用
Investment
委員会
and

取締役会
Board ofDirectors(Rejection)

審議・
決議
Examination
anddecision（否決・中止（注3））(Rejection and/or

決定FinalDecisionManagement
Committee

Office審査(Note 2)

審議・決議
Examination
and（否決） decision(Rejection)（注1）以下いずれかに該当する場合にはリスク・コンプライアンス委員会に付議します。
Suspension) (Note 3)
Return• 利益相反取引規程に定める利害関係者との重要な取引（この場合、全会一致の議決が必要）(Note 1)will be passed to the Risk and Compliance Committee if they fall on either of the followings:• Proposals
コンプライアンス室長がリスク・コンプライアンス委員会での審議を必要と認める場合• Material transactions with interested parties defined in the rules on transactions with interested parties（注2）以下いずれかに該当する場合には取締役会に付議します。
(unanimous vote is required in this case)• 取得又は売却予定額が100億円超かつ本投資法人の総資産額の10%を超える場合• The head of the Compliance Office recognizes the discussion of the issues in the Risk and Compliance Committee to be necessary.
• Proposals
資金調達計画（資金調達に関する最終意思決定は本投資法人の役員会にて行われます。）(Note 2)will be passed to the Board of Directors if they fall under any of the followings:• The price of proposed acquisition or sale is over 10 billion yen and over 10% of Top REIT’s total assets.
• 利益相反取引規程に定める利害関係者との重要な取引• Capital raising plans (Final decisions on raising capital shall be made by the Board of Directors of Top REIT.)（注3）コンプライアンス室長は、投資運用委員会における審議、決議の過程で法令等に照らして問題点がある• Material transactions with interested parties defined in the rules on transactions with interested parties(Noteと判断する場合には、審議及び決議を中止し、立案部に差し戻すことができます。
3) The head of the Compliance Office can suspend discussions and decisions and return the item to the Department in charge of if he or
she judges that the item has legal problems in the process of discussions or decision making at the Investment and Management Committee.

47

IX-2. Overview of Asset Manager
Name

Top REIT Asset Management Co., Ltd.

Address

Nittetsu Nihonbashi Building
1-13-1 Nihonbashi, Chuo Ward, Tokyo

GeneralGeneral Meeting
Meeting ofof Stockholders
Stockholders
AuditorBoard of Directors

EstablishedOct 22, 2004

Paid-in Capital
Shareholders

Investment and Management Committee
Risk and Compliance Committee¥300mnThe Sumitomo Trust & Banking Co., Ltd. 38%
Representative
Nippon Steel City Produce, Inc. 31%
Director and President
Oji Real Estate Co., Ltd. 31%

Business
Description

Planning and
Asset
Investment trust manager andInvestment
Finance
Administrative
Management
Department
Department
Department
Department
asset manager of J-REIT
Registered Financial Instruments Firm (Asset Management),
Finance and Accounting Group
No. 365 (Kinsho), issued by the Director, Kanto Local Finance Bureau

Compliance
OfficeIR Group

Directors

President andRepresentative Director: Nobuhito ENDO

Milestone

Oct 22, 2004
Dec 10, 2004
May 10, 2005

: Top REIT Asset Management (“TRAM”) established: TRAM obtained a license for real estate agent (The Governor’s of Tokyo No. (1) 83904): TRAM obtained an approval for discretionary agent license for real estate transaction(The Minister of Land, Infrastructure and Transport No. 35): TRAM obtained an approval for asset manager for investment corporation(The Prime Minister No. 47): TRAM entered into the Asset Management Agreement with Top REIT, Inc.
: Due to the enforcement of the Financial Instruments and Exchange Act , TRAM deemed
Registered Financial Instruments Business Operator (Investment Management), No. 365 ,issued by the Director, Kanto Local Finance Bureau.
: Formally submitted applications to register as Financial Instruments Business Operator(Investment Management)

Jun 28, 2005
Nov 2, 2005
Sep 30, 2007

Nov 27, 2007

Portfolio Management Group48

X. Appendix: Other Reference49X-1. Summary of Real Estate Market Indicators■ Real Estate Leasing Market
Risk
ﾘｽｸﾌﾟﾚﾐｱﾑ
Premium
丸の内
Marunomuchi

6
4

3.6
1.6

1.7

13,96014,40013,53007年6月期2007.6

13,3201.7

07年12月期
2007.12

1.8

07年9月期2007.94
2.3
13,2302.4
13,12013,04013,18013,11006年3月期2006.3

13,22005年12月期
2005.12

13,35005年9月期2005.913,49005年6月期2005.6

13,67013,67005年3月期2005.3

04年12月期
2004.12

13,83004年9月期2004.913,86004年3月期2004.3

04年6月期2004.6

13,96014,09003年12月期
2003.12

14,19014,22003年9月期2003.914,33003年3月期2003.3

03年6月期2003.6

14,5202.7

06年12月期
2006.12

4.6

2007.1
2007年1月

5.1

06年9月期2006.95.7

20

Source: CBRE “Office Market Report”＜居住用賃貸マンション：首都圏＞
Residential(Condominium) Market in Central Tokyo
1㎡あたり賃料の推移(Historical rents per ㎡)

Yen/㎡
（円/㎡）

8.0

5.7

2.9

02年12月期
2002.12

10,0009,000

Cap Rate:
in 回
Tokyo
東 京Residential
都 内 ・ 賃 貸 住Property
宅 期待利
り

6

2006.11
2006年11月

6

11,000（年）

Source: “The Japanese Real Estate Investor Survey” by Japan Real Estate Institute
Risk Premium: Cap Rate (Marunouchi )-10 Year JGB

8

6

5.1

4.9

4.4

7

06年6月期2006.6

4.2

14,4602007.10

2007.04

2006.10

2006.04

2005.10

2005.04

2004.10

2004.04

2003.10

2003.04

2002.10

2002.04

2001.101.0

6.1
12,000

7.1

6.7

02年9月期2002.92.0

1013,00014,4803.0

12

14,000

02年6月期2002.64.0

14

15,00014,7205.0(%)

16,00002年3月期2002.3

6.0

Average
Vacancy Rate
平均空室率

（円／坪）
Yen/Tsubo

日本橋
Nihonbashi
神田
Kanda
虎ノ門
Toranomon
汐留
Shiodome
赤坂
Akasaka
六本木
Roppongi
港南
KohnanNishi Shinjuku
西新宿
渋谷
Shibuya
池袋
Ikebukuro
上野
Ueno
大崎
Ohsaki

01年12月期
2001.127.0（％）

平均募集賃料
Rents
per Tsubo

Office Leasing「東京主要５区市況エリア」
Market in Central 5 wards in Tokyo

京都心部・オ
ィ ス 期Tokyo
待利回り
Cap 東
Rate:
OfficeinフCentral

（％）

8.0

07年3月期2007.3■ Real Estate Sales Market

3,000

7.5

2,800

7.0

2,600

6.5
6.0

2,400

5.5
2,200

5.0

2007.92007年9月

2007.112007年11月

2008.1
2008年1月

2007年7～9月
Y2007 3Q

Y2007 4Q
2007年10～12月

2007.7
2007年7月

2007年4～6月
Y2007 2Q

2007.5
2007年5月

Y2007 1Q
2007年1～3月

2007.3
2007年3月

2006年10～12月
Y2006 4Q

2006.92006年9月

2006.7
2006年7月

2006.5
2006年5月

2006.3
2006年3月

2006.1
2006年1月

2005.112005年11月

2005.92005年9月

2005.7
2005年7月

2005.5
2005年5月

2005.32005年3月

2005.1
2005年1月

2004.11
2004年11月

2004.92004年9月

2004.7
2004年7月

2004年5月
2004.5

2004.3
2004年3月

2004.1
2004年1月

2003.11
2003年11月

2003.92003年9月

2003.7
2003年7月

ワStudio(“Jyoto
ン ル ー ムArea”
・ 城(East))
東地区
フFamilyァ ミTypeリ ー(“Jyoto
向 けArea”(East))･城 東 地 区
Rise
外High
国人
向Condoけ 高 for級 Expats
賃 貸 住 宅 ･超 高 層 型

2003.5
2003年5月(年）

2003.3
2003年3月

2007.10

2007.04

2006.102,000
2003.1
2003年1月

ワStudioン ル(“Jyonan
ー ム ・Area”
城 南(South
地 区West))フFamilyァ ミTypeリ ー(South
向 けWest･城 Area)
南地区
外Low
国Rise
人 向Condo
け 高for級Expats
賃貸住宅・低層型

2006.04

2005.10

2005.04

2004.10

2004.04

2003.10

4.5

Source: At Home Co. ,Ltd. “at home Data Report”

Source: “The Japanese Real Estate Investor Survey” by Japan Real Estate Institute■ Retail Property Market

東京都内および近郊・商業店舗
期待利回り
Cap Rate: Retail Property in
Tokyo

（％）

Source: “The Japanese Real Estate Investor Survey” by Japan Real Estate Institute

Total
総合

Tenants
テナント

2006年7～9月
Y2006 3Q

2006年4～6月
Y2006 2Q

2006年1～3月
Y2006 1Q

2005年10～12月
Y2005 4Q

2005年7～9月
Y2005 3Q

2005年4～6月
Y2005 2Q

Y2005 1Q
2005年1～3月

2004年10～12月
Y2004 4Q

2004年7～9月
Y2004 3Q

2004年4～6月
Y2004 2Q

2004年1～3月
Y2004 1Q

SuburbanSC
郊外型SC

Y2003 4Q
2003年10～12月

2007.10

2007.04

2006.10

2006.04

2005.10Urban
Retail Property in Omote - Sando area
表参道･都心型高級専門店(年）

2003年7月～9月
Y2003 3Q

Urban
Retail Property in Ginza area
銀座・都心型高級専門店

2005.04

2004.10

2004.04

2003.10

3.5

2003年
4月～6月
Y2003
2Q

4.0

Y2003
1Q
2003年
1月～3月

4.5

2002年7月～9月
Y2002 3Q

5.0

2002年4月～6月
Y2002 2Q

5.5

Y2002
1Q
2002年
1月～3月

6.0

2001年10月～12月
Y2001 4Q

6.5

2001年7月～9月
Y2001 3Q

7.0

2001年4月～6月
Y2001 2Q

4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0

2001年1月～3月
Y2001 1Q

7.5

2002年10月～12月
Y2002 4Q

ＳＣの売上高（対前年同期比）
Shopping Center
Sales (year-on-year comparison)

8.0

Ancor Tenants
キーテナントSource: “Annual Sales Statistics of Shopping Centers” by the Japan Council of Shopping Centers50

X-2. Characteristics of Top REIT and Operational Strategies
Top REIT AssetManagement (TRAM)

OfficeDevelopment
Brokerage
Property
Management
Asset
Management

Top REIT

Asset
Management

Capital+Human
Resources

RetailDNA

Residence

1. Skilled Management of a Diversified Portfolio

Diversified
Portfolio

Three
Major
Asset
Types
Other AssetTypesi.e., hotels andwarehouses

Sponsors(1) Pursuit of both external growth and quality of assets managed(2) Pursuit of stability and growth potential of profitability through unique asset class(3) Strategic application of commissioned reports from a think tank

2. Optimal Application of Sponsor Strengths(1) Steady external growth through pipeline function(2) Agile acquisition of properties through warehousing function

The Sumitomo Trust & Banking

38%(3) Achieving internal growth through “management added something extra

Nippon Steel City Produce
A wholly-owned subsidiary of
Nippon Steel31%

Oji Real Estate
A wholly-owned subsidiary of
Oji Paper31%

SupportSponsors’Strengths

Inheriting Sponsors’ DNA■ Top REIT Asset Management (“TRAM”) was established in collaboration withthree firms – The Sumitomo Trust & Banking, Nippon Steel City Produce and Oji
Real Estate.
■ Excellent personnel have been dispatched to TRAM from the three sponsors toensure real estate investment expertise as well as inheritance of their corporategroups’ assets, that is, a long-term strategic view and diversified know-how
acquired through each of the sponsor’s businesses.

Ensuring Steady
IncomeSteady Growth ofPortfolio

Maximizing Investor Value
Utilizing Sponsor Strengths■ Sponsor skills shall be utilized to achieve steady growth by applying their realestate development abilities, brokerage networks and management skills,
including leasing activities that utilize the leasing demand from sponsors
groups/clients.
Number of group companies (As of March 31, 2008)
Sumitomo Trust Group
44
Nippon Steel Group323
Oji Paper Group
304

51

X- 3. Investment Policy

Diversified Portfolio
Asset Class

Investment Focus

Allocation

Mainly in Central Tokyo
Three major metropolitan areas and coreregional cities

Less than
80%

RetailThree major metropolitan areas and coreregional cities

Less than
50%

Residential

Mainly in Tokyo Metropolitan Area
Plus three major metropolitan areas andcore regional cities

Less than50%

OthersInvestment focus will be determinedbased on characteristics of each asset

Less than
10%

OfficeEstimated Investment Market Size of Real Estate:
Approx. JPY 54.5 Trillion(Aggregation of three types of properties)
Residence
20%

Retail28%

Array of choicesfrom three asset
classes
Enablescreening ofcompetitive
properties

Selective
Investment

Source: STB Research Institute“Estimated Investment Market Size by Property Type” dated October 31, 2005

Pursuing steady external growth through a
blue-chip portfolio of diverse asset types

Effectively Apply the Characteristics
of Each Asset Class

Avoid a Bias with Certain Asset Classes

Office52%

HighlyCompetitive

TargetPursuing External Growth
Office buildings

Pursuit of quality

Pursuing Both Steady Growth and Quality

Retailproperties

Residential
properties

Lowly
Competitive52

X- 4. Internal Growth Policy

Internal Growth Policy
Striving to maintain and improve revenues over the medium to long-term by maintaining and improving tenantsatisfaction (“Tenant First” Policy)
A. Maintaining and improving of tenant relations results in good relationships with tenants and consequently the maintenance of ahigh occupancy
B. The examination of detailed measures to improve earnings by sharing themes and issues with the property manager anddeveloping measures that meet the unique criteria of each property through periodical meetings

C. Maintaining and securing of quality in property management and appropriate revision of maintenance costs

3年

Maintain and Improve Earnings Over the Medium to Long Term

Maintain and improve rent levels

Improve property competitiveness■ Revise rents to appropriate levels based on
trade area and market rents■ Build and maintain good tenant relations

Rent levels

5年

Maintenance of high occupancy■ Maintaining and improving of good tenant
relations■ Grasp tenant needs

Occupancy

Utilities,
property taxes,
city planningtaxes, etc.
Repair andmaintenance
feesManagement
expenses■ Improve the competitiveness of properties(implementation of schedule-based
maintenance and repairs that aim to maintainand improve functions, etc.)

NOI■ Review management specifications andachieve appropriate management expenses

Establish appropriate
management costs

53

Contact

IR Contact
Koji MURATA,
Takashi KIKUCHI
Investor Relations
Top REIT Asset Management Co., Ltd. (Asset Manager)
Phone: +81-3-3243-2181
Fax:+81-3-3243-2182
E-mail： info-top@top-reit-am.co.jp
HP：
http://www.top-reit.co.jp/english/
The contents of this document, including summary notes, quotes, data and other information, are provided solely
for informational purposes and not intended to constitute an offer, solicitation and/or promotion of any specificproducts including investment units of Top REIT, Inc..
Forward looking statements in this document shall not be reviewed as a guaranty of Top REIT’s future
performance.
Although every attention has been paid to the contents of this document, the accuracy and appropriateness of
the information included in this document is not guaranteed and the contents can be revised and/or cancelled
without notice.
All rights regarding use of these materials belong to Top REIT. No copy or use of the content shown in thesematerials shall be permitted without a prior consent of Top REIT.

54