9th Period
From : July 1, 2005 To : December 31, 2005

NBF Report Jul. – Dec. 2005

Nippon Building Fund lnc.
7-2, Yaesu 2-chome, Chuo-ku, Tokyo, 104-0028, Japan
http://www.nbf-m.com/nbf_e/

Profile
Nippon Building Fund Inc. (formerly: “Office Building Fund of Japan, Inc.” The current name was adopted on
March 14, 2003, hereinafter “NBF”) is a real estate fund structured in the form of an investment corporation asprescribed in the Investment Trust Law of Japan. It was formed on March 16, 2001 in Japan as an investment
corporation with the objective of investing in assets, consisting primarily of Designated Assets (as this term is definedin the Investment Trust Law of Japan). The Investment Trust Law of Japan requires an investment corporation to be
managed by an external entity; management of such assets is entrusted to an asset management company (in thiscase, “Nippon Building Fund Management Ltd.” (formerly “Office Building Fund Management Japan Limited”)
hereinafter “NBFM”) which undertakes such asset management.
NBF’s primary investment objective is to achieve sustainable growth in portfolio value and stable profits on a midterm to long-term basis. NBF intends to achieve this objective by investing in real estate consisting of buildings
primarily used for offices with their underlying land located in Tokyo Central Business Districts (hereinafter “CBDs”),
Other Greater Tokyo and Other Cities in Japan as well as securities, beneficiary certificates representing beneficiaryinterests in trusts (hereinafter “beneficiary certificates”) and other assets backed by office properties (collectively
hereinafter “Real Estate etc.”)
NBF, which is a public corporation, is a closed-end fund whose shares are non-redeemable upon demand by ashareholder. The accounting period is six months, except for the first term. For tax reporting purposes, NBF may
deduct its cash dividends of profits from taxable income under Japanese tax regulations if it distributes to its
shareholders amounts being in excess of 90% of taxable income for the period and complies with other organizationaland operational requirements. NBF will continue its efforts to satisfy these requirements.

History of NBF
March 16, 2001

Established by founders: Mitsui Fudosan Co., Ltd., The Chuo Mitsui Trust and Banking Co.,
Ltd., and NBFM (at the time known as “MF Asset Management Co., Ltd.”)

May 10, 2001

Registration under Article 187 of the Investment Trust Law of JapanMay 23, 2001

Commencement of business (acquiring trust beneficiary certificates with respect to properties
consisting of 22 office buildings held in trust)

September 10, 2001

Listing of common shares on the Japanese Real Estate Investment Trust (hereinafter “J-REIT”)
section of the Tokyo Stock Exchange.

Table of Contents
Strength of NBF
To Our Shareholders
Financial Highlights
Portfolio Highlights
Overview of NBF
New Acquisition
Location of Office Properties
Properties Roster

2
4
5
6
10
16
18

Board of Directors
20
Investment Policies of NBF
21
Distribution Policies of NBF
26
Investment Restrictions
27
I Performance Information Report28
II Financial Statements
39
III Appendix
54
Corporate Data
Back cover

Strength of NBF

The First Listed J-REIT• In September 2001, NBF was listed as the first investment corporation in Japanon the J-REIT section of the Tokyo Stock Exchange.

The Largest Scale of any J-REIT• The largest total market capitalization of any J-REIT(¥553,720 million as of March 31, 2006)• The largest scale of managed assets(¥539,395 million as of December 31, 2005)

Enrichment of Portfolio• Specializes in investing in office buildings• Possesses 52 properties focusing on large-scale office buildings in theTokyo Central Business Districts (as of December 31, 2005)• Diversified in other Tokyo markets as well as in regional cities.
• Total rentable area of 578,243m2 (as of December 31, 2005)• Diversified tenants (number of tenants at the end of the current period:
868)

Financial Stability and Flexibility• Ratings by Rating Agencies (as of May 31, 2006):
Standard & Poor’s

Long-term Corporate: A, Short-term Corporate: A-1, Outlook: positive

Moody’sIssuer Rating: A2, Outlook: positive

R&I

Issuer Rating: AA-• Ratio of Interest-Bearing Debt to Total Assets: 48.5% (as of December 31, 2005)• Ratio of Long Term and Fixed-Interest Rate Debt to total debt: 75.0% (as of December 31, 2005)• Average years remaining till due date for long-term interest-bearing debt: 5.36 years(as of December 31, 2005)• Funding through use of unsecured, non-guaranteed corporate loans

Strategic Partnership with Mitsui Fudosan Co., Ltd.
• Utilization of the know-how of Mitsui Fudosan Co., Ltd., the leading real estate company in Japan.

To Our Shareholders

Operating Environment
In 2005, Japan’s economy strongly confirmed a trend of resumption of newcapital expenditures by business corporations, shortages of manpower, and amoderate but steady trend of continuous economic recovery from a long-term
stagnation lead by domestic demand as evidenced by the recovering mood of
consumer spending.
In the office building lease market, booming companies continue to increase or
integrate their floor space, resulting in high occupancy rates mainly in highly
competitive, newly built, large-scale office buildings. Rent levels as a whole arestarting to mark increases: in local cities, declines in rent levels are slowing, andin the Tokyo and Nagoya areas, rent levels for new contracts are seeing
increases.

Two Topics for 2005

Koichi Nishiyama,
Executive Director of Nippon Building
Fund Inc.
President & CEO of Nippon Building
Fund Management Ltd.,

Sadafumi Abe,
Executive Director of Nippon Building
Fund Inc.

Against this background, there were two major topics for NBF in 2005. One
was the acquisition of the Yamato Seimei Bldg. in October, and the other was our receipt of a termination notice last November from JFE SteelCorporation, the sole tenant of the JFE Bldg.

Acquisition of the Yamato Seimei Bldg.
The Yamato Seimei Bldg., adjacent to the Teikoku Hotel and Hibiya Park, is located in the highest class area of Hibiya, one of the prime central
Tokyo locations for office buildings. The price of the entire building, being 26 stories, was ¥63.5 billion and this prime office building constitutes
part of NBF’s core assets. We are very pleased that NBF was able to acquire this building without competition through private negotiations withthe seller. It was also confirmed with respect to this building that the recent increasing level of rents in Tokyo is available, and an upside effect onearnings yield is appearing.
It is also very satisfactory that NBF was able to achieve, in acquiring the Yamato Seimei Bldg., ¥500 billion (based on acquisition price) in total
assets, which has been NBF’s target since its listing on the stock exchange.

Exchange of the JFE Bldg.
Another topic was NBF’s receipt of a lease termination notice from JFE Steel Corporation. On November 30, 2005 NBF received a termination
notice effective as of March 31, 2007 from JFE Steel Corporation, the tenant of the JFE Bldg. JFE Steel Corporation is leasing the entire JFE Bldg.,
and the percentage represented by rent paid by it to the entire rental revenues from NBF’s portfolio is 11.2%. In light of the importance of the JFE
Bldg. to NBF’s portfolio, measures with respect to the departure of the tenant of the JFE Bldg. were considered by NBF.
Among such measures against the departure of the tenant of the JFE Bldg., NBF specifically studied (1) exchanging the JFE Bldg. for otherperforming properties which can replace the JFE Bldg., (2) enhancing the competitiveness of the JFE Bldg. through large–scale renovation andleasing activities, and (3) reconstruction of the JFE Bldg., etc.
As the result of such review, NBF decided to transfer the JFE Bldg. to Mitsui Fudosan Co., Ltd. and in return to acquire from Mitsui FudosanCo., Ltd. (1) Toranomon Kotohira Tower (additional acquisition), (2) Gate City Ohsaki, (3) Nishi-Shinjuku Mitsui Bldg. (additional acquisition), (4)Parale Mitsui Bldg. and (5) Shinanobashi Mitsui Bldg. (“the Exchange Transaction”). In compliance with the requirements of Article 50 of the
Corporation Tax Law, the appraisal gain from the Exchange Transaction with respect to the JFE Bldg. was transferred to the properties acquiredin exchange without actually accounting for the same, and as the result the performance of NBF’s portfolio was successfully enhanced.
NBF believes that through the Exchange Transaction it succeed in (1) promptly responding to the departure of the tenant of the JFE Bldg., (2)secure and stable cash-flow from the 5 exchanged properties as well as implementation of asset management consistent with NBF’s asset
management policy ( “to achieve sustainable growth in portfolio value and stable profits on a mid-term and long-term basis”), and (3) further
strengthening NBF’s portfolio through acquisition of the 5 very competitive exchanged properties.
2

Prospects of Performance in the 10th and 11th periods
During the 10th period (Jan.-June 2006), NBF foresees operating revenues of ¥24,044 million, net income of ¥9,448 million and a cash
distribution per share of ¥18,600. During the 11th period (July-Dec 2006), NBF foresees operating revenues of ¥25,076 million, net income of¥9,093 million and a cash distribution per share of ¥17,900. (Those figures do not include the effects of future acquisitions of properties or issuesof new shares.)
The reason why the figures for operating revenues, net income and cash distribution during the 10th period are higher is that those figures
include ¥1,440 million of total gain on sale of real properties etc. resulting from sale of the Otemae Center Bldg. and the exchange of the JFE
Bldg. for 5 properties during the 10th period.

Prospects of Performance (JPY mil. Except per Unit Data)
9th Period (actual)

11th Period

10th Period(July 1, 2005-December 31, 2005) (January 1, 2006-June 30, 2006) (July 1, 2006-December 31, 2006)

Revenues from Property Leasing
Capital Gains from Disposal of Properties
Net Income
Distribution Per Unit

19,36322,60425,076

0

1,440

0

7,205

9,448

9,093

¥17,046¥18,600¥17,900

NBF’s Second Phase
NBF believes that its first phase has been completed through the Exchange Transaction as (1) its total assets (based on acquisition price) havereached ¥624.8 billion; (2) the quality of its portfolio has been enhanced; (3) the risk arising from the fact that the largest tenant in its portfolio had
an option to terminate the lease during its term (which was one of the risks that NBF had borne since its listing on the stock exchange) was
eliminated; and (4) it has established a strong portfolio which constitutes a firm foundation for further development in the future.
In the second phase, NBF will pursue enhancement of the NBF brand through maximum utilization of its strong portfolio established during thefirst phase.
Specifically, NBF will strive toward constant internal growth exploiting the platform of Mitsui Fudosan Co., Ltd. with its tenant-leasing ability andbuilding management ability, etc., as well as devoting careful attention to tenants. For external growth, NBF will pursue further growth of asset
scale by rigorously selecting high quality properties, continuously exploiting the pipeline between NBF and Mitsui Fudosan Co., Ltd., andestablishing diversified routes. NBF will pursue stable financial management by controlling LTV (loan-to-value ratio).
Through those measures, NBF expects to maintain its original asset management policy (to“achieve sustainable growth in portfolio value and stable profits on a mid-term and long-termbasis”) while flexibly responding to various circumstances such as fluctuations in occupancy rates
or rent levels of individual properties, changes in economic climate due to interest rates hikes, etc.,
or changes in real estate markets.
While we are grateful to our shareholders for leading and supporting us, our intention is tocontinuously strive to maximize shareholder value by means of establishing an “NBF brand” andfurther confirming our number one position among J-REITs.

Koichi Nishiyama
Executive Director of Nippon Building Fund Inc.
President & CEO of Nippon Building Fund Management Ltd.

3

Financial Highlights

9th Period

8th Period

7th Period

6th Period

5th Period

from July 1, 2005 to
December 31, 2005

from January 1,
2005 to June 30, 2005

from July 1, 2004 to
December 31, 2004

from January 1,
2004 to June 30, 2004

from July 1, 2003 to
December 31, 2003

(Yen in million, except per share data or where otherwise indicated)

Operating revenues¥ 19,363¥ 16,731¥ 16,116¥ 12,554¥ 12,453

7,206

6,162

6,307

4,263

4,094

Income before income taxes
Net income

(a)

7,205

6,161

6,306

4,262

4,093

Total assets(b)564,902449,556

430,378

366,200

314,362

Total shareholders’ equity (“Net assets”)(c)269,375

216,840

216,985

153,161

152,992

Total amount of cash distribution

(e)

7,205

6,161

6,306

4,262

4,093

Total number of common shares issued (shares)(d)422,700

364,700

364,700

280,700

280,700

Net assets per share (Yen)(c) / (d)637,274594,571594,968

545,641545,038

Distribution per share (Yen)(e) / (d)17,046

16,893

17,291

15,185

14,582

NOI from property leasing activities

Note 2

13,333

11,457

10,238

8,311

7,964

FFO per share (Yen)

Note 2

26,50525,88723,06024,20323,141

Note 1: Operating revenues do not include consumption taxes.
Note 2: All valuations are calculated through the following formulas.
NOI (Net Operating Income) from property leasing activities: (Revenue from property leasing - Rental expenses) + Depreciation and amortization
FFO (Funds From Operation) per share: (Net income (excluding Gain on sale of investment properties) + Depreciation and Amortization)/Weighted average number ofcommon shares issued and outstanding during the period.

● Operating revenues
Net income
Operating revenues（Yen in million）

Net income● Total assets● Distribution per share
Net assets per share（Yen in million）（Yen）

20,000600,000

20,00015,000500,000

15,00010,000400,000

10,0005,000

300,000

5,000

0

5 th
Period6 thPeriod7 thPeriod8 thPeriod0

9 thPeriod5 thPeriod6 thPeriod7 thPeriod8 thPeriod9 thPeriod0Distribution
per share

Distribution per share

Net assets per share（Yen）

650,000
600,000
550,000

5 th
Period6 thPeriod7 thPeriod8 thPeriod9 thPeriod500,000
Net assets
per share

Stock Price Performance（Yen）

1,200,000

1,900

NBF stock price (the closing price)
TOPIX (the closing price)

1,150,000
1,100,000
1,050,000

1,700

950,000
1,500

900,000

TOPIX

NBF stock price

1,000,000

850,000
800,000

1,300

750,000
700,000
1,100

650,000
600,000
550,000

900

500,000
450,000
400,000

700
Sep
2001

4

Dec

Jun
2002

Dec

Jun
2003

Dec

Jun
2004

Dec

Jun
2005

Dec

Apr
2006

Portfolio Highlights
Asset Allocation

Regional Allocation

Total Assets ¥564,902 million

Total Real Estate etc. ¥532,098 million
Other Cities¥71,819 million (13.5%)

Real estate¥113,702 million(20.1%)

Other Greater Tokyo¥92,880 million (17.5%)
Real estate held in trust¥418,395 million (74.1%)
Tokyo CBDs
¥367,399 million (69.0%)

Deposits and other assets¥32,804 million (5.8%)
Note: Figures above are based on the book value as of December 31, 2005

Occupancy Rate
（%）
100

95

90

99.7 99.7 99.7 99.7 99.7 99.7 99.7
99.7
98.2 97.9 98.1
97.7 97.9 97.8
97.6 97.5
97.0
96.7
96.7
96.6
96.6
96.4
96.2
96.1 96.2
96.0
95.5
95.8 96.0
95.4 95.5
95.3 95.4 95.2
94.7 95.0
94.8
94.6
94.3
95.6
95.1
95.1
94.9
94.8 95.1 94.7
93.3
94.6 94.9
94.5
92.9
92.9
94.3
94.2
92.6
92.5 92.2
94.0
92.9
92.4
92.3
92.1
91.9
91.8 91.7
91.0
90.1 90.2 90.3 90.4
98.3

99.9 99.8
98.9 99.2
98.1 98.0
97.4
97.5 97.6
96.8 96.9
96.3 96.6 96.5
96.2
95.2
96.4
96.0 95.8
95.0 95.0 94.9 95.0 95.3
94.5 94.4
99.5

98.0

99.8 99.8

99.3 99.3 99.5 99.4 99.4 99.4
98.3 98.1 97.9 97.9 98.1 98.1 98.1 98.5
96.7 96.5 96.3 96.5 96.8 96.9 97.1 97.7
97.0
96.3 96.0 96.2 96.2 96.2 96.5 96.1

88.8

0
Jul 31 Aug 31 Sep 30 Oct 31 Nov 30 Dec 31 Jan 31
2004

5th Period

Feb 29 Mar 31 Apr 30 May 31 Jun 30

Jul 31

Aug 31 Sep 30 Oct 31 Nov 30 Dec 31 Jan 31
2005

6th PeriodTokyo CBDs

Feb 28

7th Period

Other Greater Tokyo

Mar 31 Apr 30 May 31 Jun 30

Jul 31

8th Period
Other Cities

Aug 31 Sep 30 Oct 31 Nov 30 Dec 31 Jan 31
2006

Feb 28

Mar 31

9th Period

Total

Note: Occupancy rate: Ratio of gross leased area to total rentable area

Major Tenants Roster
The outline of NBF’s major tenants as of December 31, 2005 is as follows:

Name of Tenants

Name of Building

01
02

JFE Steel Corporation (*)
Mitsui Fudosan Co., Ltd. (**)

03
04

IBM Japan, Ltd. (*)
GlaxoSmithKline K.K. (*)

05

Fuji Xerox Co.

06
07

Nippon Steel Corporation (*)
Transcosmos Inc. (*)

08
09

NTT Communications
Resona Bank Ltd.

10NEC Facilities, Ltd.

JFE Bldg.
Nakameguro GT Tower
Yotsuya Medical Bldg.
Toranomon Kotohira Tower
NBF Ogawamachi Bldg.
Nishi-Shinjuku Mitsui Bldg.
IST Bldg.
GSK Bldg.
NBF Unix Bldg.
Shinjuku Mitsui Bldg. No.2
Tsukuba Mitsui Bldg.
Nakanosakaue Sunbright Twin
Nippon Steel Building No.2
Shibuya Garden Front
NBF Sapporo Minami Nijo Bldg.
NBF Nagoya Hirokoji Bldg.
Kowa Nishi-Shinbashi Bldg. B
Nihonbashi Muromachi Center Bldg.
NBF Toranomon Bldg.
Aqua Dojima NBF Tower
NBF Hiroshima Tatemachi Bldg.
Sapporo L-PlazaNBF Niigata Telecom Bldg.

Leased Space(m2)

Percentage of Total
Rentable Area***

65,28040,18011.5%
7.1%

28,184
22,7915.0%
4.0%

17,1743.0%

15,333
8,574

2.7%
1.5%

8,493
7,507

1.5%
1.3%

7,483

1.3%

*

Indicates tenants with long-term lease
contracts (JFE Steel Corporation’scontract expires March 2011; IBM
Japan, Ltd.’s contract expires January
2010; GlaxoSmithKline K.K.'s. contract
expires September 2010; Nippon SteelCorporation’s contract expires
November 2009; Transcosmos Inc.’s
contract expires September 2009)**

Mitsui Fudosan Co., Ltd., the soletenant of the property, pools profits
from leasing operations and thendistributes the proceeds proportionallyin accordance with each owner’s
percentage of the total ownershipinterest.

***

Percentage of Total Rentable Area =Leased Space ÷ Total Rentable Areaof All Properties in Portfolio

5Overview of NBF

Track Record of Steady Growth and Dividend
Occupancy rate (%)
100.0
97.5%

96.9%

97.4%

95.0%

94.8%

90.0
Acquisition price(billions of yen)
700

600

92.3%

Acquisition priceTokyo CBDs
Other Greater Tokyo
Other Cities
Occupancy rate
Total rentable area

500
340,497400
277,054300

303,486

247,687
226.5

246.0

358,940

322,344

260.2

276.0

285.6

192.1
200

100
0

22

24

26

28

29

33

Buildings

Buildings

Buildings

Buildings

Buildings

Buildings

June 30, 2002

December 31, 2002

June 30, 2003

December 31, 2003

16,003

16,25315,367

14,582

May 23, 2001
December 31, 2001
(Investment starting date)

19,026

In 2003
NBF’s Year 2003
Problem (problem oftenants moving out of
Shiba NBF Tower andSumitomo Densetsu
Bldg.) was solved.

September 2003
Decided to acquire NBF
Platinum Tower, which is a
development property.
Acquired in March 2006

September 10, 2001
Listed on Tokyo Stock Exchange[Main acquisition][Main acquisition][Main acquisition]

Shiba NBF Tower
Acquired in July 2001

Nakanosakaue Sunbright Twin
Acquired in February 2002 and March 2002

Nakameguro GT Tower
Acquired in February 2003 and September 2003(*) Note: Figures as of April 30, 2006 includes the real properties etc. to be acquired, but excludes those to be assigned during the 10th period.
Furthermore, figures for occupancy rates of properties and for total rentable area owned by NBF as of December 31, 2005 are figures at the date of the statement on December 31, 2005. Figures forother properties are figures at the date of the statement on December 31, 2005 based on the information provided by sellers.

6

97.7%

97.5%

98.1%

98.1%

98.4%
Total rentable area(m2)
670,440624.8

578,243

700,000

600,000

539.3
488,323500,000

414.1

400,000

460,901
419,511
393.8
336.1

300,000

200,000

100,000

43

43

47

52

55

Buildings

Buildings

Buildings

Buildings

Buildings

June 30, 2004

December 31, 2004

June 30, 2005

December 31, 2005

As of April 30, 2006 (*)

15,185

17,291

16,893

17,046-

July and August 2004
Implemented equity finance with total issue
amount of 63.7 billion yen.
August 2005
Implemented equity finance with total issue
amount of 53.1 billion yen.

Distribution per
share (Yen)

October 2005
Achieved the target of
total assets (total ofacquisition price) of 500
billion yen.

Established a solid portfolio[Main acquisition][Main acquisition]

NBF Toranomon Bldg. (formerly Daiya
Toranomon Bldg.)
Acquired in June 2004

IST Bldg.
To be acquired in April 2006
Acquired in September 2005 Gate City Ohsaki, etc.
Yamato Seimei Bldg.
Acquired in October 2005

[Planned acquisition]

7

Overview of NBF

Enhanced Portfolio
NBF achieved the target of the current period to “achieve ¥500 billion (based on the total acquisition price) in assets by theend of March 2006" six months ahead of schedule, without awaiting the end of March 2006.
NBF also completed its first phase by entirely achieving its target for the current period through a transaction whereby the JFE
Bldg. was exchanged for five properties including the Nishi-Shinjuku Mitsui Bldg. (additional acquisition).
In the second phase, NBF will pursue enhancement of the NBF brand through maximum utilization of its strong portfolio
established during the first phase.

(55 properties as of April 30, 2006*)

Enhanced Portfolio
Assets to be acquired through exchange transaction

New acquisitions

IST Bldg.
Nishi-Shinjuku Mitsui Bldg.

Gate City Ohsaki

NBF Platinum Tower

Toranomon Kotohira Tower

Parale Mitsui Bldg.

Yamato Seimei Bldg.

Shin-Kawasaki Mitsui Bldg.

Additional
acquisitions

Shinanobashi Mitsui Bldg.

Nakameguro GT Tower

JFE Bldg.

Sapporo L-Plaza

Otemae Center Bldg.

(*) Note: Figures as of April 30, 2006 includes the real properties etc. to be acquired, but excludes those to be assigned during the 10th period.

8

Enrichment of Portfolio
With the increase in asset value our portfolio has improved in quality, as can be seen in the graphs below which compare ourportfolio at the end of the 1st period, the end of the 9th period, and as of April 30, 2006.

End of the 1st period

End of the 9th period(December 31, 2001)(December 31, 2005)

As of April 30, 2006

Diversifying of tenant risk
(ratio of leased areas of the top 10 tenants to total leased areas)

21.0%
31.9%
54.3%
46.7%

39.0%

Top 10 tenants

Ratio of 9 tenants excluding Mitsui Fudosan Co., Ltd. (top 10
tenants at the end of the 1st period)

Diversifying property concentration risk
(ratio of total acquisition price of top three properties to total acquisition price of all owned properties)

23.0%
32.0%
54.0%

Average age(average age of properties weighted by acquisition price for each property at the end of each period)

20.4%

11.5%

16.38
years

17.72
years
88.5%

25.5%
5.4%

12.36
years
58.1%

74.3%

Over 10 years

16.4%

From over 5 to 10 years or less

5 years or less

Portfolio PML

4.8％

3.8％

3.1％

(*) Note: Figures as of April 30, 2006 includes the real properties etc. to be acquired, but excludes those to be assigned during the 10th period.
Furthermore, figures for occupancy rates of properties and for total rentable area owned by NBF as of December 31, 2005 are figures at the date of the statement on December 31, 2005. Figures forother properties are figures at the date of the statement on December 31, 2005 based on the information provided by sellers.

9New Acquisition

NBF acquired the following properties during the 9th period.

Yamato Seimei Bldg.

10

Tokyo CBDs

Acquisition date

October 20, 2005

Outline of acquired property

fee simple

Acquisition price¥63,500 million

Acquisition structure

Trust

Location

1-7, Uchisaiwaicho 1-chome, Chiyoda-ku, Tokyo

Site area

5,065.35m2

Floor area of building

50,847.51m2

Structure

Above ground 26 floors, below ground 4 floors

Completion

June 30, 1984

IST Bldg.

Other Greater Tokyo

Acquisition date

September 13, 2005

Outline of acquired property

fee simple

Acquisition price¥35,200 million

Acquisition structure

Trust

Location

6-52, Toyosu 5-chome, Koto-ku, Tokyo

Site area

14,335.60m2

Floor area of building

46,002.37m2

Structure

Above ground 11 floors

Completion

September 7, 2004

11

New Acquisition

NBF acquired the following properties during the 10th period.

NBF Platinum Tower

12

Tokyo CBDs

Acquisition date

March 31, 2006

Outline of acquired property

fee simple

Acquisition price¥31,000 million

Acquisition structure

Trust

Location

17-3, Shirokane 1-chome, Minato-ku, Tokyo

Site area

4,373.93m2

Floor area of building

48,762.65m2

Structure

Above ground 26 floors, below ground 2 floors

Completion

November 21, 2005

Shin-Kawasaki Mitsui Bldg.

Other Greater Tokyo

Acquisition date

March 31, 2006

Outline of acquired property

co-ownership

Acquisition price¥20,300 million

Acquisition structure

Ownership

Location

890-12, Kashimada, Saiwai-ku, Kawasaki, Kanagawa

Site area

19,478.07m2 (*)

Floor area of building

138,485.98m2 (*)

Structure

Above ground 32 floors, below ground 2 floors

Completion

May 22, 1989(*) Note: The figures given for “Site area” and “Floor area”
above indicate the total site area and total floor area of
this property. NBF owns about 35.0% of this property.
13New Acquisition

NBF acquired the following properties during the 10th period.

Gate City Ohsaki

Tokyo CBDs

Acquisition date

April 24, 2006

Outline of acquired property

co-ownership of condominium

Acquisition price¥30,100 million

Acquisition structure

Ownership

Location

11-1, 2, 6, Ohsaki 1-chome, Shinagawa-ku, Tokyo

Site area

42,509.31m2 (*)

Floor area of building

287,349.75m2 (*)

Structure

Above ground 24 floors, below ground 4 floors

Completion

January 6, 1999(*) Note: The figures given for “Site area” and “Floor area” above
indicate the total site area and total floor area of thisproperty. NBF owns about 12.89% of this property.

14

Shinanobashi Mitsui Bldg.

Other Cities

Acquisition date

April 24, 2006

Outline of acquired property

co-ownership

Acquisition price¥14,400 million

Acquisition structure

Ownership

Location

11-7, Utsubohonmachi 1-chome, Nishi-ku, Osaka, Osaka

Site area

4,298.26m2 (*)

Floor area of building

36,301.54m2 (*)

Structure

Above ground 12 floors, below ground 2 floors

Completion

September 29, 1982(*) Note: The figures given for “Site area” and “Floor area” above
indicate the total site area and total floor area of thisproperty. NBF owns about 99.0% of this property.

Parale Mitsui Bldg.

Other Greater Tokyo

Acquisition date

April 24, 2006

Outline of acquired property

co-ownership of condominium

Acquisition price¥3,800 million

Acquisition structure

Ownership

Location

8, Higashidacho, Kawasaki-ku, Kawasaki, Kanagawa

Site area

5,673.25m2 (*)

Floor area of building

50,934.97m2 (*)

Structure

Above ground 22 floors, below ground 1 floor

Completion

October 16, 1990(*) Note: The figures given for “Site area” and “Floor area” above
indicate the total site area and total floor area of thisproperty. NBF owns about 72.62% of this property.

15

Location of Office Properties
Tokyo CBDs

As of April 30, 2006

Shiba NBF Tower

Nihonbashi Muromachi
Center Bldg.

Nakameguro GT Tower

Shinjuku Mitsui Bldg. No.2

NBF Toranomon Bldg.

Shibuya Garden Front

Akasaka Sanno Square

NBF Higashi-Ginza Square

Note: The map of the above includes the real properties etc. to be acquired, but excludes those to be assigned during the 10th period.

16

Tohoku S

hinkansenOther Greater Tokyo

Nakanosakaue
Sunbright Twin

Yokohama ST Bldg.

Tsukuba Mitsui Bldg.

S-ino Omiya North Wing

Other Cities

Aqua Dojima
NBF Tower

Sun Mullion
NBF Tower

Sakaisuji-Honmachi
Center Bldg.

Aqua Dojima East

Note: The map of the above includes the real properties etc. to be acquired, but excludes those to be assigned during the 10th period.

17

Properties Roster
The outline of NBF’s properties as of December 31, 2005 is as follows:
Name of Building

Investment
Type

Type of Ownershipof the Buildings

Percentageof Ownership of the
Buildings

Year Built(%)

Acquisition
Price(Yen in millions)Tokyo CBDs
JFE Bldg.
Yamato Seimei Bldg.
Shiba NBF Tower
Nihonbashi Muromachi Center Bldg.
Nakameguro GT Tower
Shinjuku Mitsui Bldg. No.2
GSK Bldg.
NBF Toranomon Bldg.
Kowa Nishi-Shinbashi Bldg. B
Nippon Steel Bldg. No.2
NBF Alliance
Yostuya Medical Bldg.
Shibuya Garden Front
NBF Shibakouen Bldg.
NBF Takanawa Bldg.
Akasaka Sanno Square
Toranomon Kotohira Tower
Sumitomo Densetsu Bldg.
NBF Higashi-Ginza Square
NBF Ogawamachi Bldg.
NBF Ikebukuro Tower
NBF Ikebukuro City Bldg.
NBF Sudacho Verde Bldg.
Nishi-Shinjuku Mitsui Bldg.
NBF Ebisu-minami Bldg.

Trust
Trust
Trust
Trust
Ownership
Trust
Trust
Trust
Trust
Ownership
Trust
Trust
Ownership
Ownership
Trust
Trust
Ownership
Trust
Trust
Ownership
Trust
Trust
Ownership
Ownership
Ownership

fee simple
fee simple
fee simple
fee simple
condominium
fee simple
fee simple
fee simple
co-ownership of condominium
fee simple
fee simple
fee simple
co-ownershipfee simple
fee simple
fee simple
co-ownership of condominium
fee simple
fee simple
condominium
fee simple
fee simple
fee simple
condominium
fee simple

100.0
100.0
100.0
100.0
93.1
100.0
100.0
100.0
83.0
100.0
100.0
100.0
50.0
100.0
100.0
100.0
29.2
100.0
100.0
83.8
100.0
100.0
100.0
4.1
100.0

1974
1984
1986
1986
2002
1983
1990
1963
1994
1989
1989
2004
2003
1990
1987
1989
2004
1991
2005
1986
1993
1993
1988
1999
1991

74,131
63,50032,00023,94523,856
16,285
15,616
13,337
13,217
12,614
9,126
8,800
8,700
6,770
6,667
6,250
6,043
5,365
5,200
4,940
4,695
4,428
2,380
1,603
1,000

71,80264,62632,474
24,17723,514
15,816
14,445
13,707
12,487
12,279
9,431
8,913
8,613
6,778
6,300
6,327
6,168
5,060
5,223
4,995
4,659
4,477
2,469
1,618
1,040

Other Greater Tokyo
IST Bldg.
Nakanosakaue Sunbright Twin
Yokohama ST Bldg.
NBF Atsugi Bldg.
Tsukuba Mitsui Bldg.
NBF Utsunomiya Bldg.
S-ino Omiya North Wing
Daido Life Omiya Bldg.
NBF Urawa Bldg.
NBF Matsudo Bldg.

Trust
Trust
Trust
Ownership
Trust
Ownership
Ownership
Trust
Ownership
Ownership

fee simple
condominium
co-ownershipfee simple
fee simple
fee simple
fee simple
fee simple
fee simple
fee simple

100.0
31.6
75.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

2004
1996
1987
1991
1990
1996
2004
1991
1990
1992

35,2008,979
13,529
2,300
8,876
2,435
16,816
2,361
2,000
2,455

35,158
8,647
12,838
2,260
7,985
2,608
16,694
2,253
2,015
2,422

Other Cities
Sapporo L-PlazaNBF Sapporo Minami Nijo Bldg.
NBF Sendai Honcho Bldg.
NBF Unix Bldg.
NBF Niigata Telecom Bldg.
NBF Nagoya Hirokoji Bldg.
Aqua Dojima NBF Tower
Sun Mullion NBF Tower
Sakaisuji-Honmachi Center Bldg.
NBF Sakai-Higashi Bldg.
NBF Tanimachi Bldg.
Aqua Dojima East
Otemae Center Bldg.
NBF Shijo Karasuma Bldg.
NBF Hiroshima Tatemachi Bldg.
Hiroshima Fukuromachi Bldg.
NBF Hakata Gion Bldg.

Ownership
Trust
Trust
Trust
Trust
Ownership
Trust
Trust
Ownership
Trust
Trust
Trust
Trust
Trust
Ownership
Ownership
Trust

condominium
fee simple
fee simple
fee simple
fee simple
fee simple
fee simple
fee simple
co-ownership of condominium
fee simple
fee simple
co-ownership of condominium
fee simple
fee simple
fee simple
co-ownership of condominium
fee simple

46.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
49.3
100.0
100.0
23.7
100.0
100.0
100.0
10.4
100.0

2003
1990
1987
1994
1989
2000
1996
1996
1991
1991
1993
1993
1992
1991
1991
2002
1993

4,405
1,870
3,566
4,029
3,958
5,406
17,81010,500
6,500
2,227
1,944
1,914
1,826
1,627
2,930
835
2,629

4,420
1,787
3,404
3,545
3,720
5,463
17,935
9,644
6,538
2,092
1,966
1,936
1,682
1,440
3,001
806
2,441

539,395

532,098

Total

Note 1: Percentage of total revenue is the ratio of revenue from each office property to total revenues from all office properties.
Note 2: Consent for disclosure was not obtained from tenants from whom rent revenue accounts for more than 80% of total rent revenues for the property. However, relevant figures areincluded in the total.
Note 3: Figures stated above are based on NBF’s ownership interest.
18

Book ValueAppraisal Value

Rentable
Square Meters

Leased Square
Meters at theEnd of Period

Occupancy
Rates at theEnd of Period(Yen in millions)

(m )

(m )

(%)

87,30060,80026,50026,30023,90018,70018,70017,00014,90013,83011,0009,000
11,900
7,530
7,800
7,100
7,880
5,310
6,210
5,310
5,180
4,830
2,490
1,970
1,360

65,28027,64024,72816,30621,423
14,94622,702
10,354
10,08817,338
4,043
7,450
8,258
7,087
10,473
5,258
4,926
5,978
4,871
4,805
5,736
5,127
2,971
1,576
1,595

65,28026,39524,72816,30621,423
14,712
22,702
10,232
10,08817,338
4,043
7,450
8,258
7,087
10,473
5,258
4,926
5,978
4,871
4,805
5,736
5,127
2,971
1,576
1,595

100
95.5
100
100
100
98.4
100
98.8
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

1
62
28
15
1
36
1
12
2
2
9
1
1
3
5
6
1
1
9
1
12
12
4
1
3

2,175
585
1,060
884
866
662
Note 2
582
Note 2615
286
171
Note 2
Note 2325
233
195
Note 2
232
91
209
183
114
58
57

11.3
3.0
5.5
4.6
4.5
3.4
Note 23.0
Note 23.2
1.5
0.9
Note 2
Note 21.7
1.2
1.0
Note 2
1.2
0.5
1.1
0.9
0.6
0.3
0.3

35,70010,80016,700
2,510
9,260
2,540
18,400
2,280
2,010
2,670

36,764
12,07420,071
5,230
16,842
6,095
20,699
3,574
3,455
4,772

36,144
12,07420,071
4,936
14,365
6,019
20,651
3,574
3,144
4,498

98.3
100
100
94.4
85.3
98.8
99.8
100
91
94.3

8
1
85
19
62
33
34
15
13
25

667
Note 2
745
139
488
136
719
120
51
124

3.4
Note 2
3.8
0.7
2.5
0.7
3.7
0.6
0.3
0.7

4,820
1,630
3,870
4,710
4,440
5,840
19,200
9,900
6,710
2,450
1,970
2,020
2,060
1,660
2,880
881
2,590

11,396
5,352
7,567
13,47910,221
6,873
21,935
14,12011,438
5,327
4,953
3,243
5,532
3,929
5,617
1,310
5,416

11,396
5,352
7,542
12,185
10,124
6,631
21,90013,657
10,084
4,737
4,725
2,720
5,532
3,831
5,336
1,296
5,416

100
100
99.7
90.4
99
96.5
99.8
96.7
88.2
88.9
95.4
83.9
100
97.5
95
99
100

12
10
10
52
37
10
40
27
39
16
2
16
6
15
28
16
8

287
122
225
296
275
234
819
424
319
130
Note 2
104
129
102
202
43
159

1.5
0.6
1.2
1.5
1.4
1.2
4.2
2.2
1.6
0.7
Note 2
0.5
0.7
0.5
1.1
0.2
0.8

583,301

578,243567,298

98.1

868

19,363

100.0

2

2

Total Number ofTenants at theEnd of Period

Revenues

Percentage ofTotal Revenues(Note 1)

(Yen in millions)

(%)

19

Board of Directors

The number of executive directors of NBF is one or more, andthe number of supervisory directors is four or fewer (but always
equal to the number of executive directors, plus a minimum of
one additional supervisory director) (Articles of Incorporation).
At the end of the immediately preceding term the organizationof NBF consisted of, in addition to the general meeting of theshareholders, two executive directors and four supervisory
directors as well as a Board of Directors comprised of theexecutive directors and supervisory directors.
At the end of the immediately preceding term, members of theBoard of Directors of NBF were as set forth in the table below.

Name of executive directors andsupervisory directors

Title

Sadafumi Abe

Executive Director

Koichi Nishiyama

Executive Director

Tomio Hirota

Supervisory Director

LawyerAkira Nishizawa

Supervisory Director

Real Estate Appraiser

Nobutoshi Kozuka

Supervisory Director

Certified Public Accountant, Certified Public Tax Accountant

Hideo Fukazawa

Supervisory Director

Note: Koichi Nishiyama, Executive Director, is concurrently President & CEO of NBFM. No executive or supervisory director directly or indirectly holds any shares in NBF.
Further, while some supervisory directors are concurrently officers in other corporations, there exist no conflicts of interest between said corporations and NBF.

20

■Investment Policies of NBF
1.

Basic Investment Policies

A.

Basic Policies

NBF’s primary investment objective is to achieve sustainable growth in portfolio value and stable profits on a
mid-term to long-term basis. NBF achieves this objective by investing in real estate consisting of buildings primarily
used for offices with their underlying land located in the Tokyo Central Business Districts (hereinafter “CBDs”), Other
Greater Tokyo and Other Cities in Japan as well as securities, beneficiary certificates representing beneficial interests intrusts (hereinafter “beneficiary certificates”) and other assets backed by office properties（collectively hereinafter “RealEstate etc.”）（“Investment Objects and Policies”, Articles of Incorporation）. （Reference to : laws, legal documents,
etc used as the basis or sources hereof are set forth in parenthesis herein.)

B.

Investment Strategy

Nippon Building Fund Management Ltd. (“NBFM”), based on the investment strategy of NBF set forth below,
invests and manages the assets of NBF. NBFM has established asset management guidelines based on the Articles ofIncorporation of NBF and in accordance with the investment strategy of NBF.
(1) Strategy for Creation of the Portfolio
The goal of the portfolio is to generate steady growth and stable profits on a mid-term to long-term basis. The
selection criteria of investment assets is based on, the composition of investment assets in the portfolio and based on
consideration of a quantitative proportion of the office stock located in the various regions of Japan.

Area Diversification
The investment strategy of NBF divides the investment area into three areas consisting of Tokyo CBDs, Other
Greater Tokyo and Other Cities in such manner that 70% or more of total investment assets (Real Estate etc.) is allocatedto Tokyo CBDs and Other Greater Tokyo and 30% or less to Other Cities. The purpose of this area diversification is to
mitigate cash flow risks such as earthquakes, risk of vacancies and so forth.
The following table sets forth abovesaid area diversification strategy.

- 21 -

Area and Allocation Ratio

Area Analysis

Tokyo CBDs
9 central wards in Tokyo :Chiyoda, Minato, Chuo, Shinjuku,
Shinagawa, Shibuya, Toshima,
Bunkyo and Meguro■ Relatively high rent levels and low vacancy rates compared to
Other Cities; also, relatively large market scale (both leasing andpurchase/sale) with high growth rates.
■ Relatively low yearly NOI yields. Relatively high liquidity at
the time of sales.

Other Greater Tokyo
Other 14 wards in Tokyo and
Neighboring Cities (see Note 1 below)
such as Musashino, Tachikawa,
Yokohama, Kawasaki, Chiba,
Kashiwa, Saitama etc.

■ Basic special characteristics are between those of Tokyo CBDsand Other Cities.

Total of above two areas :70% or more
Other Cities
Principal regional cities such as
Sapporo, Sendai, Niigata, Shizuoka,
Hamamatsu, Nagoya, Kyoto, Osaka,
Kobe, Okayama, Hiroshima,
Takamatsu, Fukuoka, Kumamoto etc.

■ Rent levels relatively low and vacancy rates relatively highcompared to Tokyo CBDs.
■ Also, scale of market is relatively small and growth rates
relatively low.
■ Relatively high yearly NOI yields. Relatively low liquidity at thetime of sales.

Total of above area: 30% or less
Note 1: "Neighboring Cities" refers to the Metropolis of Tokyo excluding its 23 wards, and the 6 prefectures of Kanagawa, Chiba,
Saitama, Ibaraki, Gunma and Tochigi.
Note 2: Due to unforeseeable events such as, extreme fluctuations in macro-economic trends, financial trends, real estate market
trends and so forth, it may not always be possible to operate in accordance with each of the above criteria (“ Investment
Objects and Policies”, Articles of Incorporation).

(2) Acquisition Strategy
Ratio of Real Estate Assets
NBF will maintain ratios of 75% or more with respect to the “Designated Real Estate Ratio”. As of March 30,
2006, NBF satisfied the criteria.
The “Designated Real Estate Ratio” means the ratio of the total amount of Designated Real Estate to the total
amount of Designated Assets owned by NBF.
Note:

Designated Real Estate includes real estate, real estate leasehold rights, superficies and beneficiary certificates backed byreal estate, land leasehold rights and superficies (as designated under Article 83.4.3.1 of the Special Taxation Measures
Law of Japan).

- 22 -

Due Diligence
When investing in office properties, selections will be made through comprehensive research and analysis based on
the forecast investment yields resulting from their acquisition costs and their anticipated profits, future prospects andstability of the area of location, availability of measures responding to risks of deterioration and obsolescence,
insurability and so forth. The details of the relevant criteria are set forth in the following table (“Investment Objects andPolicies”, Articles of Incorporation).
Though such consideration will involve the study of the criteria included in the following table, it is possible thatwhen NBF acquires or intends to acquire operating assets, not all of the following criteria will be satisfied.
Item
Scale of building

Construction type andspecifications of facilities
Earthquake resistance

Measures regarding status oflegal title

Tenancy characteristics
Environmental; condition ofland etc.

Points to be reviewed■ Net rentable area, including net rentable area of entire building and standard
net rentable area per floor. Desired total net rentable area is 1,650㎡(approximately 500 tsubo) or more. Standard net rentable area per floor is
330㎡ (approximately 100 tsubo) or more.
■ Building design and floor plan suitable for leasing, with divisibility,
adequate ceiling height, electrical service, HVAC equipment etc.
■ Ensure that construction quality exceeds earthquake standards (meaning
those required pursuant to the Building Standards Law as amended in 1981)
or standards equivalent thereto.
■ In cases such as co-ownership, divided condominium ownership, a building
erected on leased land etc. where NBF will not obtain complete ownershipof a building, following matters are appropriately treated.
・measures to protect security deposits, policies and measures regarding cash
reserves for long-term renovation plans;
・appropriate measures regarding demands for division of co-owned interestsor the sale of a co-owner’s interest etc;
■ Acceptable creditworthiness of tenants, purposes of use by tenants,
configuration, and condition of collectibility of rents etc.
■ Absence of harmful substances such as asbestos, (or countermeasures canbe implemented for any such substances), non-existence of soil pollution
etc.

Uncompleted or Unleasable Properties
In principle, NBF acquires Real Estate etc. which are leased/leasable assets at the time of closing. NBF may
acquire a property which is not yet leasable at the time of closing based on consideration of the impact on NBF's asset
management activities after taking into account the investment amount, the date of completion or of becoming leasable,
estimated revenues and so forth; provided, however, that the contract amount of any such unleasable asset combined withthe total contract amount of previously acquired unleasable assets (but excluding unleasable assets which thereafter
become operational) will not exceed 10% of the total assets indicated on the most recent balance sheet of NBF. For thispurpose, “leased/leasable assets” shall mean property with respect to which the construction of the building has been
completed and such building is leased or leasable. Properties which are owned by NBF and have become operational atsome point shall be deemed “leasable ” thereafter (including such cases as reconstruction or large-scale renovation of abuilding).

- 23 -

(3) Management and Disposition Policies
Regarding acquired operating properties, the goal is to obtain steady growth of operating profits on a mid-term tolong-term basis by planning to maintain and improve asset value and competitive ability through investment in facilities
and by expanding income (increasing rents etc., increasing occupancy rates, extending the term of leases and rendering
them more stable etc.) and reducing property-related expenses.
NBF will, in principle, for the purpose of assuring stable income on a mid-term to long-term basis, lease out all
operating properties included in operating assets (including installation of parking lots, billboards etc.). When
conducting such leasing, security deposits etc. and other similar monies may be received and said monies will be
managed in accordance with the requirements of “Investment Objects and Policies” of the Articles of Incorporation(“Investment Objects and Policies”, Articles of Incorporation).
NBF is entitled to establish reserves for long-term renovations required to maintain and enhance the value of
operating properties, reserves for payables, reserves for cash distributions and any other similar reserves etc. (Articles ofIncorporation).

Reserves for Long-Term Renovations
From the reserves set forth above, a portion corresponding to renovations, repairs and tenant improvements will be
determined based on renovation plans for each building. As of March 30, 2006, foreseen reserves provided fromJanuary to December 2006 are as follows:
Item
ReasonReserves for long-term renovations■ Average annual amount over an approximately 10-year period
based on engineering reports
Reserves for tenant improvements(reserves for future construction expenses
required for spaces leased to tenants)■ Expenses of providing “free access floor” (or raised floor);
expenses for other move-in construction costs (partitions etc.)
Total Foreseen Amount: (annual basis)¥2,434 million

Note 1: In addition to the above-mentioned amount, certain amounts are set aside as cash reserves for renovation pursuant to theadministrative rules of the buildings in which NBF owns condominium interests, etc.
Note 2: The amount of reserves set forth above is the total amount of reserves with respect to the 52 properties owned by NBF as ofthe end of December, 2005.

Measures to Avoid Reductions and Fluctuations in Operating Income
In order to avoid large-scale reductions and fluctuations in operating income due to fire damage, withdrawal oftenants and so forth, efforts, such as area diversification and obtaining adequate fire and casualty insurances etc., will be
exerted.

Appraisal Value etc.
In the event that valuation of real estate, land leasehold rights and superficies (including beneficiary certificates,
securities and tokumei-kumiai ownership interests, and other asset-backed instruments) is undertaken for the purpose of
disclosure in Performance Information Reports etc., the value to be used for disclosure will, in principle, be the appraisal
valuation provided by a certified real estate appraiser (Articles of Incorporation).
The appraisal value of property with respect to the period commencing on the acquisition thereof and ending on thedate of disclosure of such value with respect to the next following closure of NBF's accounting term shall be theacquisition price of the said property (excluding miscellaneous acquisition costs, fixed assets tax, city-planning tax andconsumption tax) as stated in the sale and purchase contract etc. for the said property.
- 24 -

Disposition
In disposing of individual operating properties, selections will be made through comprehensive research andanalysis based on the forecasted income, actual and predicted fluctuations in asset value, future prospects and stability of
the area of location, risks of deterioration and obsolescence of real estate and predicted costs thereof as well as thecomposition of the portfolio etc. Sell/hold studies will be periodically undertaken with respect to all operating properties(“Investment Objects and Policies”, Articles of Incorporation).

(4) Financial Policies
Issuance of Shares
NBF may issue shares in order to undertake acquisition and renovation and so forth of assets and to provide
allowance for funds required for working capital as well as for the repayment of debt (including security deposits,
borrowings and repayment of obligations regarding NBF bonds, etc.)

Debt Financing
NBF may raise capital (including use of the call loan market) and issue bonds in order to undertake acquisition andrenovation and so forth of assets and to provide allowance for funds required for working capital as well as for the
repayment of debt (including security deposits, borrowings and repayment of obligations regarding NBF bonds etc.)(“Investment Objects and Policies”, Articles of Incorporation).
Borrowings are limited to those from Qualified Institutional Investors as specified in Article 2.3.1 of the Securities
and Exchange Law of Japan, in case capital is borrowed. Further, the total limit on all such borrowings and issues of
NBF bonds will be ¥1,000,000 million. When undertaking borrowings or when issuing NBF bonds, NBF may provide
operating assets as collateral (Articles of Incorporation).

Loan to Value Ratio
The ratio of the total amount of borrowings, issues of NBF bonds and lease deposits under management to the total
amount of assets of NBF (Loan-to-Value ratio) is envisioned to be limited to 60%, but may temporarily exceed 60%
when acquiring certain assets, etc. (Long and mid-term operating asset management policy and annual management planestablished by the Asset Management Company).

Derivatives
In order to avoid risks of fluctuation in the prices of operating assets as well as risks of fluctuations in interest rates,
futures transactions, option transactions, swap transactions and forward rate transactions with respect to Japanese interest
rates may be undertaken (“Investment Objects and Policies”, Articles of Incorporation).

- 25 -

■ Distribution Policies of NBFA.

Distributions of Profits

A registered investment corporation may deduct its cash dividends of profits from taxable income under Japanese
tax regulations if it distributes to its shareholders in excess of 90% of its taxable income and complies with otherorganizational and operational requirements. NBF intends to make dividend distributions that ensure that NBF satisfies
those requirements.
NBF will, in principle, effect distributions in accordance with the followings policies (Articles of Incorporation).

Earnings Available for Distributions
NBF’s earnings available for distributions is based on accounting of profits prepared in accordance with theInvestment Trust Law and the Securities and Exchange Law of Japan and in conformity with generally accepted
accounting principles in Japan.
The distributable amount which results from operation of managed assets of NBF (hereinafter, “Distributable
Amount”) shall be the amount of profit (the amount of net assets on the balance sheet less the amount of total expenses,
capital surplus reserves and estimated variances) calculated on each closing date in accordance with the Investment Trust
Law of Japan and corporate accounting principles generally deemed to be fair and appropriate.

Cash Distribution of Profits
The amount of cash distributions will be determined by NBF, such amount being in excess of 90% of taxable
income available for dividends of NBF set forth in Article 67-15 of the Special Taxation Measures Law of Japan(hereinafter "Taxable Income Available for Dividends"); provided, however, that the maximum amount of distributions
will be the Distributable Amount. NBF has the right to allow for long-term reserve for repair, reserve for outstanding
claims, reserve for distributions and other reserves and allowances similar thereto which are deemed necessary for
maintenance or appreciation of the assets of NBF.

B.

Distribution in Excess of Earnings

A registered investment corporation is allowed to distribute cash to its shareholders in excess of retained earnings
under the Investment Trust Law of Japan, although the Investment Trusts Association of Japan has established rules suchthat a corporate-style J-REIT may pay out the excess of retained earnings for the period up to a maximum of 60% ofdepreciation for the period. NBF is entitled to make cash distributions of the amounts described below in excess of theDistributable Earnings in the following cases; provided, however, that the maximum amount of such distributions will be
the amount set forth in the rules of the Investment Trusts Association of Japan (Article 15.2 of the Articles ofIncorporation).
Amount determined by NBF as being eligible for the requirements of the Special Taxation Treatment for
Investment Corporations, in case of the Distributable Earnings being less than the Taxable Income
Available for Dividends
Amount determined by NBF not in excess of the amount of depreciation for the current term less theamount of appropriate reserves for the current term, if NBF determines it appropriate considering trends inmacro-economic environments, real estate markets and leasing markets- 26 -

NBF’s Current Policy on Distributions in Excess of Profits
As for cash distributions in excess of profits, as long as the current Japanese taxation treatment applicable to NBF’sshareholders in Japan to whom such distributions are paid requires them to calculate capital gain or loss at the time ofeach distribution, NBF will not make distributions in excess of profits.
Notwithstanding the above, NBF may make distributions in excess of profits in accordance with the distribution
policies stated above in order to meet “Requirement for Deduction from taxable income of Dividends of Profit, etc.”, andif such distributions in excess of profits are deemed necessary by the Board of Directors of NBF.

C.

Method of Distributions

Distributions will be made in cash, in principle, within three months from the closing date, to such shareholders or
registered pledgees as are listed in the latest Shareholder Registry as of the closing date, in proportion to the number ofshares owned by them (Articles of Incorporation).

D.

Prescription for Cash Distributions etc.

NBF will be discharged from the obligation to pay distributions of profits three calendar years from the date ofcommencing payment. Interest will not accrue on unpaid distributions (Articles of Incorporation).

■Investment Restrictions
NBF will invest neither in real estate located outside of Japan nor in assets denominated in non-Japanese currencies
as specified in the Articles of Incorporation. Please see “Ⅲ Appendix Investment Restrictions” regarding otherinvestment restrictions. Also, refer to "Basic Investment Policies (B) Investment Strategy" hereinabove.

- 27 -

Ⅰ

Performance Information Report■ Overview of NBF
1. Financial Highlights
2. Distribution for the Current Period
3. Capitalization
4. Major Shareholders
5. Categories of Shareholders■ Capital Expenditures
1. Planning
2. Capital Expenditures for the Current Period
3. Cash Reserve for Capital Improvements■ Expenses regarding Entrustment etc.
■ Trading Activities during the Current Period
1. Trading of Real Estate and Real Estate held in Trust
2. Trading of Other Assets Including Total Amount and Transactions
3. Related Parties Transactions- 28 -

■ Overview of NBF
1. Financial Highlights
9th Period

8th Period

7th Period

from July 1, 2005 tofrom January 1, 2005

from July 1, 2004 to

December 31, 2005

to June 30, 2005

December 31, 2004

(Yen in millions, except per share data or where otherwise indicated)

Operating revenues
Revenues from property leasing
Operating expenses
Rental expenses
Income before income taxes
Net income(a)Total assets(b)
Total shareholders’ equity (‘Net assets’)(c)Contributed capital
Total amount of cash distribution(e)Total number of common shares issued (shares) (d)Net assets per share (Yen)(c) / (d)Distribution per share (Yen)(e) / (d)Distribution of accumulated earnings per share (Yen)Distribution in excess of accumulated earnings per share (Yen)
Return on total assets

Note 2

ROE

Note 2

Capital ratio
Payout ratio
Number of days
Other supplementary data:
Number of investment properties
Number of tenants
Total rentable square meters
Occupancy rate
Depreciation and amortization
Capital expenditures
NOI from property leasing activities
FFO per share (Yen)(c) / (b)(e) / (a)Note 4Note 4Note 4Note 2
Note 2¥19,363
19,363
10,582
9,694
7,206
7,205
564,902269,375
262,170
7,205
422,700
637,274
17,046
17,046−
1.42%（2.84%）
2.96%（5.93%）
47.7%
99.9%
184

¥16,731
16,731
9,344
8,554
6,162
6,161
449,556
216,840
210,679
6,161
364,700
594,571
16,893
16,893−1.40%（2.80%）
2.84%（5.68%）
48.2%
99.9%
181

¥16,116
15,178
8,587
7,831
6,307
6,306
430,378
216,985
210,679
6,306
364,700
594,968
17,291
17,291−
1.58%（3.17%）
3.41%（6.82%）
50.4%
100.0%
184

52
868
578,243
98.1%
3,664
618
13,33326,505

47763
488,323
98.1%
3,280
702
11,45725,88743667
460,901
97.5%
2,891
431
10,23823,060Note 1: Operating revenues do not include consumption taxes.
Note 2: All valuations are calculated through the following formulas. The figures in parenthesis are annualized based on the 6 months
figures for the period.
Return on total assets : Income before income taxes / (Initial total assets + Total assets at end of period)÷2
ROE : Net income / (Initial shareholders’ equity + Shareholders’ equity at end of period)÷2
NOI (Net Operating Income) from property leasing activities :(Revenue from property leasing−Rental expenses)＋Depreciation and Amortization
FFO (Funds From Operation) per share :(Net income (excluding Gain on sale of investment properties) + Depreciation and Amortization)/ Weighted average
number of common shares issued and outstanding during the period.
Note 3: As for payout ratio, figures beyond the first decimal place have been disregarded.
Note 4: Number of investment properties means units generally perceived to be one office building. Number of tenants meansgross number of tenants by building. Occupancy rate is ratio of gross leased area to total rentable area at the end of the period.

- 29 -

2. Distribution for the Current Period
Distribution per share for the current period was ¥17,046. NBF expected to distribute almost all taxable
income for the current period to be eligible for special tax treatment (Special Taxation Measures Law of Japan
Article 67-15) that allows NBF to deduct its cash dividends of profits from taxable income.
For the six months ended
December 31,
June 30,
December 31,
2005
2005
2004

Retained earnings
Undistributed earnings
Total cash distribution（Total cash distribution per share）
Distribution of accumulated earnings（Distribution of accumulated earnings per share）
Cash Distribution in excess of accumulated earnings（per share）(Yen in thousands, except per share amount)¥ 7,205,589¥ 6,161,091¥ 6,306,101
245
214
73
7,205,344
6,160,877
6,306,028
17,046
16,893
17,2917,205,344
6,160,877
6,306,028
17,046
16,893
17,291――――――

Note: Above cash distributions were paid after the period end.

3. Capitalization
Balance of Paid-in Capital
NBF was established on March 16, 2001 with initial paid-in capital of ¥100 million. NBF began investing
activities in May 2001 after ¥98,800 million was raised through private placements. As of December 31,
2005, NBF had issued 422,700 common shares out of 2,000,000 total authorized shares. NBF’s commonshares were listed on the J-REIT section of the Tokyo Stock Exchange in September 2001 upon the completionof a public offering. As the Investment Trust Law of Japan does not contain any provision for the issue ofmore than one class of shares, NBF’s common shares comprise the sole class of shares authorized and issued
by NBF.

Issue date

March 16, 2001
May 23, 2001
September 8, 2001
July 14, 2004
August 11, 2004
August 10, 2005

Common Shares
outstanding
Increase
Balance(shares)200
200
197,600
197,800
82,900280,700
80,000360,700
4,000
364,700
58,000422,700

Remarks

Initial capital (private)
Private placement
Public offering
Public offering
Third Party Allocation
Public offering

Paid-in capital
Increase
Balance(Yen in millions)
¥ 100
¥ 100
98,80098,90049,999148,899
58,838207,737
2,942
210,679
51,491
262,170

Notes

Note 1
Note 2
Note 3Note 4Note 5Note 6Note 1: NBF was established with initial capital of ¥500,000 per share.
Note 2: Follow-on private offering at ¥500,000 per share to raise funds for acquisition of 22 properties.
Note 3: Public offering of new units for ¥625,000 per share (excluding underwriting fee: ¥603,125) to repay debt and to fundproperty acquisition.
Note 4: Public offering of new units for ¥759,500 per share (excluding underwriting fee: ¥735,475) to repay debt etc.
Note 5: Additional issue of new units (third party allocation) for ¥735,475 per share undertaken pursuant to the public offering in
Note 4.
Note 6: Public offering of new units for ¥916,300 per share (excluding underwriting fee: ¥887,782) to repay debt and to fundproperty acquisition.
- 30 -

Market Price of shares
High/Low (closing price) of shares on the TSE:
For the six months ended

December 31, 2005
High.
Low.

June 30, 2005

December 31, 2004

(in Yen)¥1,000,000
849,000¥ 1,020,000
891,000¥ 900,000
762,000

Borrowings
Borrowings by financial institution as of December 31, 2005 are shown below.
Short-term debt
Average

Lender

The Chuo Mitsui Trust and Banking Co., Ltd.
The Bank of Tokyo- Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
The Hachijuni Bank, Ltd.
The Bank of Fukuoka, Ltd.
Shinkin Central Bank
The Kagoshima Bank, Ltd.
The Chugoku Bank, Ltd.
The Gunma Bank, Ltd.
Mizuho Corporate Bank, Ltd.
The Shizuoka Bank, Ltd.
The Yamaguchi Bank, Ltd.
The Daishi Bank, Ltd.
Shinsei Bank, Ltd.
The Yamanashi Chuo Bank, Ltd.
Short-term debt Total
Long-term debt
Sumitomo Life Insurance Company

The Chuo Mitsui Trust and Banking Co., Ltd.

Meiji Yasuda Life Insurance Company

The Norinchukin Bank
Mitsui Life Insurance Company, Ltd.

Nippon Life Insurance Company
The Sumitomo Trust and Banking Co, Ltd.

Balanceinterestrate(%)(Note 1)

Due on(Note 2)

(Yen in millions)¥ 5,000
5,000
5,000
3,000
4,000
3,000
2,000
3,000
2,000
4,000
2,000
1,000
4,000
5,000
1,500
¥ 49,500

0.4%
0.4%
0.4%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%
0.4%
0.3%
0.3%
0.3%

January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January16, 2006
January31, 2006
January16, 2006
January16, 2006
January16, 2006

¥ 12,000
5,000
5,000
3,000
10,000
9,000
1,000
5,000
3,000
4,000
1,000
2,000
8,000
2,000
4,000
2,000
3,000
3,000
2,000
2,000
6,000

1.7%
1.7%
2.1%
1.2%
1.3%
1.3%
1.2%
1.6%
2.1%
2.2%
2.2%
1.2%
1.1%
1.7%
1.8%
1.6%
1.6%
0.9%
0.8%
1.1%
1.3%

May 23, 2008
July 16, 2009
July 19, 2011
February 3, 2010
May 23, 2006
July 16, 2007
March 30, 2009
March 30, 2011
December 21, 2011
April 27, 2012
May 23, 2012
February 26, 2010
November 20, 2008
February 13, 2012
March, 30, 2012
November 1, 2012
December 13, 2013
October 30, 2009
April 1, 2010
October 19, 2010
July 16, 2007

- 31 -

Repayment
MethodBulletpayment

Use ofFunds(Note 3)

Notes

Unsecured/unguaranteed/pari passu,
See (Note 4)
Floating rate

Bulletpayment(Note 3)

Unsecured/unguaranteed/pari passu,
See (Note 4)
Fixed rate

Long-term debt（continued)
Average

Lenderinterestrate(%)(Note 1)

Balance(Yen in millions)
The Dai-Ichi Mutual Life Insurance Company
2,000
0.7%
1,000
0.9%
2,000
0.8%
Daido Life Insurance Company
2,000
1.2%
1,000
1.8%
1,000
1.4%
1,000
2.0%
4,000
1.8%
Development Bank of Japan
10,000
1.5%
10,0001.8%
Sumitomo Mitsui Banking Corporation
1,000
1.2%
1,000
1.2%
1,000
1.5%
The Joyo Bank, Ltd.
1,000
0.9%
1,000
1.4%
The Iyo Bank, Ltd.
1,000
0.7%
1,000
0.7%
The Bank of Tokyo- Mitsubishi UFJ, Ltd.
2,000
0.7%
Taiyo Life Insurance Company
1,000
1.2%
1,000
1.7%
Zenkyoren (The National Mutual Insurance
1,000
1.7%
Federation of Agricultural Cooperatives)
10,000
1.5％
Long-term debt Total¥148,000
Borrowings Total(Note 5)¥197,500

Due onRepayment
MethodUse of
Funds

Notes

March 31, 2006
September 29, 2006
February 13, 2008
February 3, 2010
March 30, 2012
October 4,2013
October 31, 2014
November 28, 2014
September 11, 2015
September 27, 2017
March 12, 2007
March 12, 2007
June 30, 2009
May 23, 2006
May 23, 2008
March 31, 2006
February 2, 2007
September 28, 2007
February 12, 2010
December 15，2014
June 1, 2011
September 11, 2015

Note 1:

Average interest rate is stated for each lender (average weighted by borrowing outstanding in case of more than one loan
from the same lender) by rounding to the second decimal place.
Note 2: With respect to the date of drawdown and date of repayment in case of more than one short-term loan from the same lender,
the earliest date of repayment for all such loans coming due is given.
Note 3: Use of funds for the above includes acquisition of real estate or beneficiary interests, repayment of borrowings and working
capital.
Note 4: A special agreement attached to “Loan Agreement” entered into between the NBF and each financial institution provides
that the above borrowings from all financial institutions rank pari passu to each other.
Note 5: The total amount of long-term borrowings (i.e. excluding those expected to be repaid within one year) repayable within 5
years of the date of the balance sheet and expected to be repaid by specific year(s) is as follows.
(Unit：¥1000)
1 to 2 years
Amount Borrowed

2 to 3 years

20,000,000- 32 -

23,000,000

3 to 4 years
10,000,000

4 to 5 years
12,000,000

NBF Bonds
Issue
No.2 Unsecured Bonds
No.3 Unsecured Bonds
No.4 Unsecured Bonds
No.5 Unsecured Bonds
No.6 Unsecured Bonds
No.7 Unsecured Bonds

Issue Date
February 10,
2003
June12,
2003
September 22,
2004
September 22,
2004
March 9,2005
November9,2005

Balance as ofDecember 31, 2005
(Yen in millions)

Total(Note 3)
Note 1:
Note 2:
Note 3:Coupon¥ 10,000

0.75％¥ 10,000

2.00％¥ 10,000

1.04％¥ 10,000

1.60％¥ 10,000

0.80％¥ 10,000

1.85％

Maturity
Date
February 9,
2007
June 12,2018
September 22,
2009
September 22,
2011
March 9,2010
November9,
2015

Redemption
BulletPayment

Use ofProceeds Note
Note 1

Note 2

BulletPayment

Note 1

Note 2

BulletPayment

Note 1

Note 2

BulletPayment

Note 1

Note 2

BulletPayment

Note 1

Note 2

BulletPayment

Note 1

Note 2¥60,000

Use of funds includes acquisition of Real Estate etc., repayment of borrowings and working capital.
The bonds are limited to qualified institutional investors and rank pari passu with other debts issued.
The total amount of bonds repayable within 5 years of the date of the balance sheet and expected to be repaid by specificyear(s) is as follows.
(Unit: ¥1000)

Amount Borrowed

within １ year

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years−

10,000,000−

10,000,000

10,000,000

Others
NBF has security deposits totaling ¥31,489 million as of December 31, 2005.

4. Major Shareholders
The following table sets forth our major shareholders’ information as of December 31, 2005.

Name
Japan Trustee Services Bank, Ltd. .................
The Master Trust Bank of Japan, Ltd. ...........
NikkoCiti Trust and Banking Corporation ....
Mitsui Fudosan Co., Ltd. ...............................
Trust & Custody Services Bank, Ltd. ............

Number ofCommonAddress
SharesOwned
8-11, Harumi 1-Chome, Chuo-ku, Tokyo
39,67911-3 Hamamatsucho 2-chome Minato-ku, Tokyo
20,767
3-14, Higashi Shinagawa 2-chome, Shinagawa-ku, Tokyo
20,5181-1 Nihonbashi Muro-machi, 2-chome Chuo-ku, Tokyo
18,235
Harumi Island Triton Square Office Tower Z,
14,144

Ownership
9.39％
4.91
4.85
4.31
3.35

8-12, Harumi 1-Chome, Chuo-ku, Tokyo

Sumitomo Life Insurance Company ..............
The Chugoku Bank, Ltd. ...............................
Obic Business Consultants Co., Ltd. .............
The Ikeda Bank, Ltd. .....................................

18-24 Tsukiji 7-chome, Chuo-ku, Tokyo

The Gibraltar Life Insurance Co., Ltd. ............

8-11, Harumi 1-Chome, Chuo-ku, Tokyo

15-20 Marunouchi 1-chome, Okayama, Okayama
8-1 Nishi Shinjuku 6-chome, Shinjuku-ku, Tokyo
1-11 Jonan 2-chome, Ikeda, Osaka

Total- 33 -

11,256
10,315
9,812
6,133

2.66
2.44
2.32
1.45

5,701
156,560

1.35
37.03%

5.

Categories of Shareholders（As of December 31, 2005）

Number ofshareholders
Financial institutions
Other legal entities
Overseas investors
Individuals and others
Securities companies
Japanese government and regional authorities
Total

194
412
246
19,00417
19,873- 34 -

Number ofshares owned
248,440
49,06170,013
48,373
6,813
422,700

Percent of
total number ofissued shares
58.78%
11.61
16.56
11.44
1.61
100.0%

■ Capital Expenditures
1. Planning
NBF is planning the following capital expenditures for the renovation of its properties. The amounts below
include repairs and maintenance costs that will be expensed as incurred. Moreover, in addition to a steadyprogram of expenditures for construction, repair and renovation of facilities, a program of renewal construction
is being implemented in order to increase competitive power in the market as well as to increase the level oftenant satisfaction based on the results of tenant satisfaction surveys and neighboring competitive building
specification surveys etc.
Estimated Amounts
Payment for theName of Property

Estimated
DurationObjective

Total
Amounts

Current Period

Cumulativ(from July 1, 2005

e Amount

to December 31,

Paid

2005)

(Yen in millions)
NBF Sendai Honcho
Bldg.
NBF Niigata Telecom
Bldg.

Rework of
air-conditioning (Phase I)
Renovation of Central
Monitoring System

From January 2006
To June 2006
From April 2006
To April 2006

NBF Ikebukuro City
Bldg.

Renovation of HVAC
equipment

NBF Toranomon Bldg.
NBF Sendai Honcho
Bldg.

¥ 93

¥ −

¥ −

39

−

−

From April 2006
To May 2006

44

−

−

Renovation of 8th floor

From July 2006
To November 2006

300

−

−

Rework of
air-conditioning (Phase 2)

From July 2006
To December 2006

113

−

−

2. Capital Expenditures for the Current Period
The following table sets forth the capital expenditures for the current period. NBF posted ¥ 619 million incapital expenditures together with ¥ 462 million for repairs and maintenance expenses.
Name of Property

Objective

NBF Utsunomiya Bldg

Improvement for leasing, enhancement oflighting in common use areas

NBF Sapporo Minami Nijo Bldg.

Renovation of heat source system andparking area etc

Other buildings

Renovations intended to improve the levelof tenant satisfaction

Total

PeriodExpenditure(Yen in millions)¥ 93

From June 2005
To December 2005

41
485
¥ 619

- 35 -

3. Cash Reserve for Capital Improvements
NBF accumulates cash reserves from cash flows to prepare for large-scale mid-term to long-term capital
improvements and repairs and maintenance that will be conducted in accordance with NBF’s business plan foreach property.
As ofDecember 31, 2005

Reserve balance at the beginning of the period . . . . . . . . .
Amount accumulated in current period..............
Withdrawal from reserves in the current period.......
Amount carried forward.........................
Note 1:
Note 2:(Yen in millions)¥ 1,655
1,013
1,501¥ 1,167

As ofJune 30, 2005

¥ 1,498962
805¥ 1,655

Upon the acquisition of Real Estate etc., NBF also assumed accumulated reserves of ¥1,005 million as of December 31,
2005 for capital expenditures from previous owners, which were not included in the above accumulated amounts.
The reserve figures represent only the amount of reserves attributable to NBF's ownership interest, the amount ofreserves attributable to other owners has been excluded.

■ Expenses regarding Entrustment etc.
The following table sets forth the breakdown of entrustment fees etc. paid by NBF.
For the six months ended
Item
Asset management fees ........................
Asset custody fees ................................
Agent fees (stock transfer, accounting
and administrative) ...............................
Directors' remuneration ........................
Auditor’s fees .......................................
Other expenses .....................................
Total

Note:

December 31,
2005
¥ 707
21
57
11
12
80
¥ 888

June 30,
2005(Yen in millions)
¥ 609
19
56
11
12
83
¥ 790

December 31,
2004
¥ 575
17
55
11
12
86
¥ 756

In addition to the amounts stated above, there are asset management fees of ¥ 325 million for the period from July 1, 2005
to December 31, 2005, ¥ 102 million for the period from January 1, 2005 to June 30, 2005 and ¥ 281 million for the period
from July 1, 2004 to December 31, 2004 related to investment in properties which were booked on each property.

- 36 -

■ Trading Activities during the Current Period
1. Trading of Real Estate and Real Estate held in Trust(Yen in millions)
AcquiredName of Building

Date

Acquisition Price (Note 1)

Yotsuya Medical Bldg.
August 31, 2005
8,800
IST Bldg.
September 13, 2005
35,200Naka-Meguro GT Tower
September 27, 2005
5,600
4,200
September 27, 2005
Naka-Meguro GT Tower
2,000
September 30, 2005
NBF Urawa Bldg.
4,940
September 30, 2005
NBF Ogawamachi Bldg.
970
October 5, 2005
Sapporo L-Plaza
63,500
October 20, 2005
Yamato Seimei Bldg.
Total¥ 125,210
Note 1: “Acquisition price” does not include national consumption tax, regional consumption tax and miscellaneous costs ofacquisition.

2. Trading of Other Assets Including Total Amount and Transactions
Other major assets besides real estate and real estate held in trust stated above consist mostly of bank deposits
or bank deposits included in assets held in trust.

- 37 -

3. Related Parties Transactions
1. Ongoing Transactions
None.
2. Fees Paid for the period from July 1, 2005 to December 31, 2005
Description of Transactions with Related Parties (Note 1)

Category

Total Fees Paid
(A)

Paid to(Yen in millions)

Amount ofPayment (B)

B/A（Note 2）

(Yen in millions)

Brokerage commissions
Office management fees etc.

1,364
901

(Note 3)

Property transfer fees
Property maintenance fees

Leasing related service fees

19
1,434

70

Mitsui Fudosan Investment Advisors, Inc
Mitsui Fudosan Co., Ltd.
Mitsui Fudosan Co., Ltd.
NBF Office Management Co., Ltd.
Mitsui Fudosan Co., Ltd.
First Facilities Co., Ltd.
Mitsui Fudosan Co., Ltd.
First Facilities West Co., Ltd.
Mitsui Fudosan Building Management Co.,Ltd.
First Facilities Yokohama Co., Ltd.
Mitsui Fudosan Housing Lease Co., Ltd.
NBF Office Management Co., Ltd.
NBF Office Management Co., Ltd.
Mitsui Fudosan Co., Ltd.
Mitsui Real Estate Sales Co, Ltd.

953
382
879
16
19
229
212
145

69.8%
28.0%
97.5%
1.8%
100.0%
16.0%
14.8%
10.1%

80

5.6%

11
3
1
24
11
1

0.8%
0.2%
0.0%
34.3%
15.9%
0.8%

Note 1:“Related parties” mean parties defined in Article 20 of the government ordinance regarding the Investment Trust Law ofJapan, principally, parties related to an asset management company.
Note 2: Figures indicate percentages of total prices.
Note 3: NBF leases the Naka-Meguro GT Tower, Toranomon Kotohira Tower, NBF Ogawamachi Bldg. and the Nishi-Shinjuku
Mitsui Building to Mitsui Fudosan Co., Ltd., which sub-leases them to sub-lessees. Further, the Sumitomo Trust &Banking Co., Ltd., as trustee, also leases the Yotsuya Medical Bldg. to Mitsui Fudosan Co., Ltd. which sub-leases it to
sub-lessees.Accordingly, NBF does not entrust the office management business for those properties to Mitsui Fudosan.
Instead, NBF Office Management Co., Ltd. has been entrusted to undertake such business on behalf of NBF, the owner andlessor of those properties.
Note 4: This amount represents the handling fees directly paid by NBF to Daiwa Securities SMBC Co., Ltd. for underwriting fees of
the No.6 NBF Bonds. In addition to the above fees, a certain portion of the fees paid by NBF to a third party (a company
supervising investment company securities) for handling payments of principal and interest concerning the No.2, No.3, No.4,
No.5 and No.6 NBF Bonds was paid by the said company to Daiwa Securities SMBC Co., Ltd.
Note 5: A public offering of new investment shares, the payment date for which was August 10, 2005, was conducted through a firm
commitment underwriting agreement, under which an underwriting securities company underwrote shares at an issue priceand sold them at an offering price different from such issue price to general investors (“spread method”). In addition to thefees listed in the above table, a portion of ¥1,654 million, which is the difference between the offering price and the issue
price, comprises actual underwriting fees for Nomura Securities Co., Ltd.
Note 6: In addition to the above fees paid, the following have been paid to related parties for repair and maintenance work.
(Yen in millions)First Facilities Co., Ltd.
First Facilities West Co., Ltd.
Mitsui Fudosan Building Management Co., Ltd.
Mitsui Designtech Co., Ltd.
Mitsui Fudosan Housing Lease Co., Ltd.
First Facilities Yokohama Co., Ltd.
Mitsui Fudosan Co., Ltd.

- 38 -

¥ 128
120
71
47
4
2
1

Ⅱ

Financial Statements
Independent Auditors’ Report
Balance Sheets
Statements of Income
Statements of Shareholders’ Equity
Statements of Cash Flows
Notes to Financial Statements- 39 -

- 40 -

NIPPON BUILDING FUND INC.
BALANCE SHEETSAs of December 31, 2005 and June 30, 2005

As of
As of
December 31, 2005
June 30, 2005
(Yen in millions)

AssetsCurrent Assets:
Cash and cash equivalents
Tenant receivables
Consumption tax refund receivables and other current assets
Total current assets
Investment properties:
Land including trust accounts
Building and improvements including trust accounts
Other tangible assets
Less: accumulated depreciation
Leasehold rights in trust accounts and other intangible assets
Total investment properties, net
Other assets
Total Assets
Liabilities
Current Liabilities:
Short-term loans
Long-term debt due within one year
Accounts payable
Rents received in advanceAccrued expenses and other liabilities
Total current liabilities
Long-term debt
Tenant security deposits
Other liabilities
Total Liabilities
Shareholders’ Equity
Common shares, non-par value
Shares Authorized: 2,000,000 shares
Shares Issued and Outstanding: 422,700 shares
Retained Earnings
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
The accompanying notes to financial statements are an integral part of these balance sheets.

- 41 -¥¥¥¥

29,713238
1,384
31,335352,506
178,416
4,126(22,849)
19,844532,043
1,524
564,90249,50015,000
2,234
3,153
1,104
70,991
193,000
31,48947295,527¥¥¥

39,857280
202
40,339256,439
147,602
3,065(19,188)
19,846
407,764
1,453
449,556

33,70019,000
2,210
2,780
932
58,622147,000
27,04945
232,716

262,170

210,679

7,205
269,375
564,902

6,161
216,840
449,556¥

NIPPON BUILDING FUND INC.
STATEMENTS OF INCOME
For the six months ended December 31, 2005, June 30, 2005 and December 31, 2004

For the six months ended
December 31, 2005

June 30, 2005

December 31, 2004

(Yen in millions)

Revenues:
RentalOther revenues related to property leasing
Gain on sale of investment properties
Total Revenues
Operating Expenses:
Property management fees
Real estate taxes
Insurance
Repairs and maintenance
Other rental expenses
Depreciation and amortization
Asset management fees
Other expenses
Total Operating Expenses
Operating Income
Interest income
Interest expense
New investment shares issue costs
Amortization of deferred bond issue costs
Other expenses, net
Income Before Income Taxes
Current and deferred income taxes
Net Income¥

17,4291,934−
19,363
2,373
1,593
30
462
1,572
3,664
707
181
10,5828,781
1(1,366)
(103)
(57)
(50)
7,206
(1)
¥ 7,205

The accompanying notes to financial statements are an integral part of these statements.

- 42 -¥

15,114
1,617−
16,731

2,050
1,579
27
383
1,235
3,280
609
181
9,344
7,387
10
(1,163)
−
(47)
(25)
6,162
(1)
¥ 6,161¥

13,610
1,568
938
16116
1,954
1,167
37
493
1,289
2,891
575
181
8,587
7,529
1
(1,012)
(154)
(38)
(19)
6,307
(1)
¥ 6,306

NIPPON BUILDING FUND INC.
STATEMENTS OF SHAREHOLDERS’ EQUITY
For the six months ended December 31, 2005, June 30, 2005 and December 31, 2004

(Yen in millions)
Number ofCommonSharesCommonSharesRetained
Earnings

Balance as of June 30, 2004 ........................................................

280,700

148,899

4,262

153,161

Cash Dividends declared .............................................................
Issuance of New Shares through Public Offering as of July 14,
2004 ............................................................................................
Issuance of New Shares through Allocation to a Third Party asof August 11, 2004 ......................................................................

--(4,262)(4,262)80,00058,838-58,838

4,000

2,942

-

2,942

Net income ..................................................................................

-

-

6,306

6,306

Balance as of December 31, 2004 ...............................................

364,700

210,679

6,306

216,985

Cash Dividends declared .............................................................

--(6,306)(6,306)

Net income ..................................................................................

-

-

6,161

6,161

Balance as of June 30, 2005 ........................................................

364,700¥210,679¥6,161¥216,840

Cash Dividends declared .............................................................
Issuance of New Shares through Public Offering as of August
10, 2005 ......................................................................................

--(6,161)(6,161)58,00051,491-51,491

Net income ..................................................................................

-

-

7,205

7,205

Balance as of December 31, 2005 ...............................................

422,700

262,170

7,205

269,375

The accompanying notes to financial statements are an integral part of these statements.

- 43 -Total

NIPPON BUILDING FUND INC.
STATEMENTS OF CASH FLOWSFor the six months ended December 31, 2005, June 30, 2005 and December 31, 2004

For the six months ended
December 31, 2005

June 30, 2005

December 31, 2004

(Yen in millions)
Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Amortization of deferred bond issue costs
Interest expense(Increase) Decrease in tenant receivables
Increase (Decrease) in accounts payable
Increase (Decrease) in rents received in advance
Decrease in investment properties in trust accounts due
to saleCash payments of interest expense(Increase) Decrease in consumption tax refund
receivable
Other, net
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchases of investment properties
Payments for purchases of intangible assets
Proceeds from tenant security deposits
Payments for tenant security deposits
Refunds from security deposits paid to lessors
Payments for security deposits paid to lessors
Payments for purchases of other assets
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from short-term loans
Repayment of short-term loans
Proceeds from long-term debt
Payments for deferred bond issue costs
Proceeds from issuance of common shares
Payment of dividends
Net Cash Provided by Financing Activities
Net Change in Cash and Cash Equivalents
Cash and cash equivalents at the beginning of the period
Cash and Cash Equivalents at the end of the period¥ 7,206
3,664
57
1,366
42
(83)
373

¥ 6,162
3,280
47
1,163
(96)
426
191

¥ 6,307
2,891
38
1,012
59
247
(22)

(1,191)(1,142)

5,939
(919)

(1,074)
11
10,371517
108
10,656(60)(156)
15,336(127,850)
(0)
5,368
(928)
1
(5)
(66)
(123,480)(22,828)(1,123)
2,271(1,407)4(7)(40)(23,130)(62,304)(1,837)
6,133(1,826)
10
(11)
(40)
(59,857)

184,200(168,400)
42,000(63)
51,388(6,160)102,965(10,144)
39,857¥ 29,713

159,000(150,800)
12,000(56)(6,302)
13,842
1,368
38,489¥ 39,857

58,400(96,950)
32,000(99)
61,779(4,262)50,868
6,329
32,160¥ 38,489

The accompanying notes to financial statements are an integral part of these statements.

- 44 -NOTES TO FINANCIAL STATEMENTS
Nippon Building Fund Inc.
December 31, 2005, June 30, 2005 and December 31, 2004

Note 1 –Organization and Basis of Presentation
Organization
Nippon Building Fund Inc. (hereinafter "NBF") was formed on March 16, 2001 as an investment corporation underthe Investment Trust Law of Japan with Mitsui Fudosan Co., Ltd., The Chuo Mitsui Trust and Banking Co., Ltd., andNippon Building Fund Management Ltd. (hereinafter "NBFM") acting as sponsors. Registration with the Kanto Local
Finance Bureau of the Ministry of Finance was completed on May 10, 2001 and NBF started acquisition of officeproperties on May 23, 2001.
NBF is an externally managed real estate fund, formed as an investment corporation. NBFM, as NBF’s asset
management company, is engaged in acquiring, managing, leasing, and renovating office properties. Mitsui FudosanCo., Ltd. currently owns 43 % of NBFM while Sumitomo Life Insurance Company owns 35% and the remaining 22%
is mainly owned by financial institutions.
On September 10, 2001, NBF had raised approximately ¥50,000 million through an initial public offering ofcommon shares. Those common shares are listed on the J-REIT section of the Tokyo Stock Exchange.
As of December 31, 2005, NBF had ownership or beneficiary interests in 52 office properties containing
approximately 578,243 rentable square meters of office space. As of December 31, 2005, NBF had leased office space
to 868 tenants engaged in a variety of businesses. The occupancy rate for the office properties was approximately
98.1%.

Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in theInvestment Trust Law of Japan and the Japanese Securities and Exchange Law and its related accounting regulations,and in conformity with accounting principles generally accepted in Japan, which are different in certain respects as toapplication and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements have been restructured and translated into English (with some expanded
descriptions and the inclusion of statements of shareholders' equity) from the financial statements of NBF prepared inaccordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as
required by the Securities and Exchange Law. Some supplementary information included in the statutory Japanese
language financial statements, but not required for fair presentation, is not presented in the accompanying financial
statements. NBF does not prepare consolidated financial statements, as NBF has no subsidiaries.

Note 2 –Summary of Significant Accounting Policies
Cash and Cash Equivalents
NBF considers all highly liquid investments with original maturity of three months or less to be cash and cash
equivalents.

- 45 -

Investment Properties
Investments properties are recorded at cost, which included the allocated purchase price and related costs andexpenses for acquisition of the office properties and the beneficiary interests of properties in trust. Property andequipment balances are depreciated using the straight-line method over estimated useful lives. Estimated useful livesof the principal tangible fixed assets (including assets held in trust) are as follows:
Buildings and improvements
2-50 years
Structures
2-52 years
Machinery and equipment
2-17 years
Tools, furniture and fixtures
2-18 years
Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures for repairs
and maintenance which do not add to the value or prolong the useful life of a property, are expensed as incurred.

Deferred Bond Issue Costs
Deferred bond issue costs are amortized using the straight-line method over three years.

New Investment Shares Issue Cost
New investment shares issue costs are expensed in the period of payment.
The public offering of new investment shares on August 10, 2005 was conducted through an underwriting
agreement under which an underwriting securities company underwrote all of the newly issued shares at an agreed
issue price and sold them at an offering price different from such issue price to investors (“spread method”). Since,
pursuant to such spread method, the difference between an offering price and an issue price is earned by anunderwriting securities company as substantial underwriting fees, there were no underwriting fees paid by NBF to theunderwriting securities company. In the case of the public offering of new investment shares on August 10, 2005, thetotal amount of the difference between the offering price and the issue price was ¥1,654 million, which would havebeen accounted for as new investment shares issue costs of NBF if it had been conducted through an underwriting
agreement under which an underwriting securities company underwrites shares at an issue price and sells them at anoffering price which is the same as such issue price (“conventional method”). Therefore, under the spread method,
the new investment shares issue costs were recognized ¥1,654 million lower, and the operating income and the income
before income taxes were resulted in ¥1,654 million greater than the case if the conventional method was applied.

Income Taxes
Income taxes are accounted for on the basis of income for financial statement purposes. The tax effect of temporary
differences between the amounts of assets and liabilities for financial statements and for income tax purposes isrecognized as deferred taxes.

Real Estate Taxes
Real estate taxes are imposed on properties on a calendar year basis. NBF is allocated the portion of the real estatetaxes related to the period following the purchase date of each property through the end of the year and the equivalentamounts of those allocated portions are capitalized as part of the acquisition costs of the relative properties. Capitalized
real estate taxes amounted to ¥197 million for the period ended December 31, 2005 and ¥71 million for the period
ended June 30, 2005 and ¥106 million for the period ended December 31, 2004, respectively.

- 46 -

Revenue Recognition
NBF operates office properties that are rented to tenants on lease terms of generally two years, with monthly
payments due in advance. Rental and other property income is recorded when due from tenants and is recognizedmonthly as it is earned. Common area charges provided for in tenant leases are recognized as income when earned andtheir amounts can be reasonably estimated.

Accounting Treatment of Beneficiary Interests in Trust Assets including Real Estate
For trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust as well as all
income generated and expenses incurred from assets in trust are recorded in the relevant balance sheet and income
statement accounts.

Accounting standards for impairment of fixed assets
Effective July 1, 2005, NBF adopted accounting standards for impairment of fixed assets ( Opinion on
Establishment of Accounting Standards for Impairment of Fixed Assets
issued by the Business Accounting
Deliberation Council on August 9, 2002) and the guidance on accounting standards for impairment of fixed
assets (the Financial Accounting Standard Guidance No. 6
issued by the Accounting Standards Board ofJapan on October 31, 2003).
The adoption of the standard had no effect on the statements of income for the fiscal period ended December
31, 2005.

Reclassifications
Certain reclassifications have been made to prior periods' financial statements to conform with the presentation
used for the period ended December 31, 2005.

Note 3 – Schedule of tangible assets of investment properties
Tangible assets as of December 31, 2005 and June 30, 2005 consisted of the following:
As of December 31, 2005

Land
Land in trust
Land including trust total
Buildings and improvements
Buildings and improvements in trust
Building and improvements
including trust
Structures
Machinery and equipment
Tools, furniture and fixtures
Structures in trust
Machinery and equipment in trust
Tools, furniture and fixtures in trust

Construction in process in trust
Other tangible assets total

Total

As of June 30, 2005

(Yen in millions)
Acquisition Accumulated
Acquisition AccumulatedBook ValueBook Value
Costs
Depreciation
Costs
Depreciation¥ 57,979¥¥ 57,979¥ 47,840¥¥ 47,840
294,527
294,527
208,599
208,599352,506
352,506
256,439
256,439
55,303(3,895)51,40847,170(2,875)44,295
123,113(18,000)
105,113
100,432(15,535)
84,897
178,416
890
540
116
1,158
925
492
5
4,126
¥535,048(21,895)
(141)
(82)
(27)
(214)
(288)
(202)
(954)
¥(22,849)- 47 -

156,521
749
458
89
944
637
290
5
3,172
¥512,199

147,602
706
494
106
585
796
361
17
3,065
¥407,106(18,410)
(106)
(54)
(18)
(181)
(245)
(174)
(778)
¥(19,188)

129,192
600
440
88
404
551
187
17
2,287
¥387,918

Note 4 – Shareholders’ Equity
NBF issues only non-par value shares in accordance with the Investment Trust Law of Japan and all of the issue priceof new shares is designated as stated capital. NBF maintains at least ¥50 million as the minimum net assets as required by
the Investment Trust Law of Japan.

Note 5 – Short-Term Loans and Long-Term Debt
Short-term loans consist of short-term notes and short-term borrowings under loan agreements. The annual interest
rates on short-term loans outstanding are floating rates and at December 31, 2005 and June 30, 2005 ranging from 0.24%
to 0.37% and from 0.29% to 0.45%, respectively. Long-term debt is fixed rates and as of December 31, 2005 and June 30,2005 consisted of the following:(Yen in millions)
As of
As of
December 31,
June 30,
2005
2005
Unsecured loans due 2006 to 2017 principally from banks andinsurance companies with interest rates mainly ranging from
0.7% to 2.2% ................................................................................
¥ 148,000¥ 116,000
0.75% unsecured bonds due 2007 .................................................
10,00010,0001.04% unsecured bonds due 2009 .................................................
10,00010,0000.80% unsecured bonds due 2010 .................................................
10,00010,000
1.60% unsecured bonds due 2011 .................................................
10,00010,000
1.85% unsecured bonds due 2015 .................................................
10,0002.00% unsecured bonds due 2018 .................................................
10,00010,000208,000
166,000
Less: amount due within one year.................................................
15,00019,000¥ 193,000¥ 147,000
The annual maturities of long-term debt as of December 31, 2005 were as follows:(Yen in millions)2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥ 15,0002007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,0002008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,0002009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,0002010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,000
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98,000During the period ended December 31, 2005, NBF obtained committed credit lines of ¥30 billion with certain financial
institutions to reduce refinancing risk. The unused amount of such committed credit lines was ¥30 billion at December 31,
2005.

- 48 -

Note 6 –Rental Revenues and Expenses
Rental revenues and expenses for the periods ended December 31, 2005, June 30, 2005, and December 31, 2004 wereas follows:
For the six months ended
December 31, 2005

June 30, 2005

December 31, 2004

(Yen in millions)

Revenues from Property Leasing :Rental:Rental revenues ...........................................................
Common area charges .................................................
Others ..........................................................................
Subtotal ....................................................................
Other revenues related to property leasing:
Parking lots ..................................................................
Facility charge .............................................................
Incidental income ........................................................
Cancellation fees .........................................................
Miscellaneous income .................................................
Subtotal ..................................................................
Total revenues from property leasing ..............................
Rental Expenses:
Property management fee ............................................
Real estate taxes ..........................................................
Repairs and maintenance .............................................
Insurance .....................................................................
Other rental expenses ..................................................
Depreciation and amortization ....................................
Total rental expenses .......................................................
Operating Income from Property Leasing Activities- 49 -¥ 15,356
1,966
107
17,429¥ 13,291
1,741
82
15,114¥ 11,955
1,574
81
13,610

459
70
1,331
49
25
1,934
19,363

412
68
1,025
100
12
1,617
16,731

359
67
1,067
59
16
1,568
15,178

2,373
1,593
462
30
1,572
3,664
9,694
¥ 9,669

2,050
1,579
383
27
1,235
3,280
8,554
¥ 8,177

1,954
1,167
493
37
1,289
2,891
7,831
¥ 7,347

Note 7 – Breakdown of Gain on sale of investment properties
On July 30, 2004, NBF sold four properties set forth below:
Shinjuku Yocho-machi Bldg.
Revenue from sale of investment properties
Cost of investment properties
Other sales expenses
Gain on sale of investment properties(Yen in millions)¥ 2,700
1,977
83
¥ 640

Inage Kaigan Bldg.
Revenue from sale of investment properties
Cost of investment properties
Other sales expenses
Gain on sale of investment properties¥ 2,100
1,831
66
¥ 203

Hamamatsu City Bldg.
Revenue from sale of investment properties
Cost of investment properties
Other sales expenses
Gain on sale of investment properties¥ 1,400
1,284
45
¥ 71

Kyomachibori Center Bldg.
Revenue from sale of investment properties
Cost of investment properties
Other sales expenses
Gain on sale of investment properties

¥ 900
846
30
¥ 24

Total
Revenue from sale of investment properties
Cost of investment properties
Other sales expenses
Gain on sale of investment properties¥7,100
5,937
225
¥ 938

- 50 -

Note 8 –Income Taxes
NBF is subject to income taxes in Japan. The effective tax rate on NBF's income based on applicable Japanese tax law
was 0.01% for the periods ended December 31, 2005 and, 0.02% for the periods ended June 30, 2005 and December 31,
2004, respectively. The following table summarizes the significant differences between the statutory tax rates and
NBF's effective tax rates for financial statement purposes.
For the six months ended
December 31, 2005

June 30, 2005

December 31, 2004

39.39%(39.39)0.01
0.01 %

39.39%(39.38)0.01
0.02 %

39.39%(39.38)0.01
0.02 %

Statutory effective tax rate ...................................
Deductible dividends paid ...................................
Others ..................................................................
Effective tax rate .................................................

NBF was established as an investment corporation under the Investment Trust Law of Japan, and as long as aninvestment corporation distributes to its shareholders at least 90% of taxable income for a period and other requirements
prescribed in Japanese tax regulations are met, the investment corporation is allowed to deduct total amount of dividends
paid in calculating its taxable income under Japanese tax regulations.

Note 9– Per Share Information
Information about earnings per share for the periods ended December 31, 2005, June 30, 2005 and December 31, 2004
and net assets per share as of December 31, 2005 and June 30, 2005 was as follows.
The computation of earnings per share is based on the weighted average number of common shares outstanding during
the period. The computation of net assets per share is based on the number of common shares outstanding at each period
end.
For the six months ended
December 31, 2005

June 30, 2005

December 31, 2004

（Yen）

Earnings per Share of Common Shares:
Net income:¥ 17,570¥ 16,893¥ 17,607

Weighted average number ofcommon shares outstanding:

410,091

364,700

358,157

As of
December 31, 2005

¥ 637,274

Net Assets Per Share:- 51 -

As ofJune 30, 2005

¥ 594,571

Note 10–Leases
NBF leases some of its investment properties to outside parties under non-cancelable operating leases. As of December
31, 2005 and June 30, 2005, the future lease revenues under the non-cancelable operating leases are as follows:
As of December 31, 2005

As of June 30, 2005

(Yen in millions)Due within one year ........................................................
Due after one year ...........................................................
Total.............................................................................

¥ 6,145
6,291¥ 12,436¥ 10,068
11,673¥ 21,741

Note 11– Significant Subsequent Events
Cash Distribution
As of February 24, 2006, the Board of Directors of NBF declared to effect payment of a cash distribution of ¥17,046,
per share aggregating ¥7,205 million, to shareholders of record on December 31, 2005.

Issues of New Shares
On February 24, 2006 and again on March 8, 2006, the Board of Directors of NBF resolved to issue new sharesand having received full payment on March 16, 2006 and March 29, 2006 said shares were issued in accordance withthe following conditions.
As the result, the total amount of stated capital increased to ¥346,447 million and the number of shares issued
increased to 508,000.
A.

Issuance of new shares through public offering(ⅰ) Offering method(ⅱ) Number of shares issued(ⅲ) Offering price per share(ⅳ) Total offering price(ⅴ) Issue price per share(ⅵ) Total issue price(ⅶ) Payment date(ⅷ) Initial date subject to distribution

B.

：Public offering：80,000 shares：1,019,200 Yen per share：81,536 million Yen：988,000 Yen per share：79,040 million Yen：March 16, 2006
：January 1, 2006

Issue of new shares through public allocation to a third party(ⅰ) Offering method(ⅱ) Number of shares issued(ⅲ) Proceeds per share(ⅳ) Aggregate proceeds(ⅴ) Payment date(ⅵ) Initial date subject to distribution(ⅶ) Allottee(ⅸ) Number of allocated shares：Allocation to a third party：5,300 shares：988,000 Yen per share：5,236 million Yen：March 29, 2006
：January 1, 2006
：Nomura Securities Co., Ltd.
：5,300 shares- 52 -

Use of Procured Proceeds
The proceeds procured through this public offering and the allocation to a third party were applied to repaymentof loans and acquisition of real estate etc.

Exchange of Fixed Assets
NBF decided to implement a fixed asset exchange transaction with Mitsui Fudosan Co., Ltd. by entering into an
exchange agreement dated February 24, 2006. The transaction and delivery of the properties were completed on
April 24, 2006.
With respect to the land component of the properties acquired through the exchange transaction, NBF expects toapply the reduced value rule as defined under Article 50 of the Corporation Tax Law .
As a result of out of profits upon the sale of the transferred assets (expected to be approximately ¥18.5 billion) will
be used to off set against to acquisition cost of the properties acquired through the exchange transaction.
If it applies that rule a maximum allowable amount this exchange transaction, approximately ¥700 million of profits
will recorded.
A.

Assets Transferred in Exchange Transaction
JFE Bldg.
・Sales Price・Book Value（December 31, 2005）
・Classification of asset sold

：91,000 million Yen：71,802 million Yen：TrustB. Assets to be Acquired through Exchange Transaction
Nishi-Shinjyuku Mitsui Bldg.(additional acquisition)・Acquisition Price：43,300 million Yen
・Classification of assets acquired：Real Estate
Gate City Ohsaki
・Acquisition Price
・Classification of assets acquired：30,100 million Yen：Real Estate

Toranomon Kotohira Tower(additional acquisition)・Acquisition Price：18,500 million Yen
・Classification of assets acquired：Real Estate and surface rights
Parale Mitsui Bldg
・Acquisition Price
・Classification of assets acquired：3,800 million Yen：Real Estate

Shinanobashi Mitsui Bldg
・Acquisition Price
・Classification of assets acquired：14,400 million Yen：Real Estate- 53 -

Ⅲ Appendix■

Major Interested Parties

Nippon Building Fund Management Ltd. (Asset Management Company and Administrative Agent
regarding the Management of Institutions, herein "NBFM")
NBFM, as Asset Management Company provided for in the Investment Trust Law of Japan, performs
management of NBF's assets and undertakes management of the institutions of NBF. As of March 30, 2006,
NBFM has been entrusted as an asset management company only by NBF.
As of the same date, NBFM has paid-in capital of ¥ 495 million. There is no capital relationship with NBF.
Koichi Nishiyama, President & CEO of NBFM, is concurrently an executive director of NBF.

Operation- Undertakes asset management of NBF pursuant to an Asset Management Entrustment Agreement based on an
entrustment from NBF in accordance with the Articles of Incorporation of NBF and the Investment Objects andPolicies set forth therein.
- Undertakes management of the general affairs of the general meeting of shareholders and the Board of Directors as
Administrative Agent regarding the Management of Institutions based on an entrustment from NBF and pursuant toan Agreement for General Administration Regarding the Management of Institutions.

Fees for the Asset Management Operation
Management Fees 1
The amount equivalent to 2.5% effective from July 1, 2004 of the amount of the revenue arising from Real
Estate etc. as calculated on each closing date (provided, however, that revenues from the sale of Real Estate etc. andother Managed Assets will be excluded) will be payable.
Management Fees 2
The amount equivalent to 3% of income before income tax (provided, however, that in the event a loss iscarried forward, then the amount of income before income taxes remaining after such loss has been covered) prior todeduction of Management Fees 2 as calculated on each closing date will be payable.
Management Fees 3
In the event that Real Estate etc. is newly-acquired, compensation equivalent to the total amount of theacquisition price of said Real Estate etc.(meaning the acquisition price of both land and buildings, and in the eventof the simultaneous acquisition of multiple units of Real Estate etc., the acquisition price of each item; provided,
however, that national consumption tax, regional consumption tax and miscellaneous costs of acquisition are
excluded) multiplied by the following percentage rates will, in principle, be payable; provided, however, that withthe approval of the directors of NBF, compensation will be calculated within the scope decided up to the following
maximum rates.
・The portion up to and including ¥10,000 million
0.5％・The portion exceeding ¥10,000 million up to and including ¥30,000 million
0.2％
・The portion exceeding ¥30,000 million up to and including ¥50,000 million
0.05％
・The portion exceeding ¥50,000 million
nothing- 54 -

History of NBFM
NBFM is an Asset Management Company which is a limited company duly established under the laws of Japan.
Major events in the history of NBFM are as follows.
September 19, 2000
November 17, 2000
January 29, 2001
February 15, 2001
March 7, 2001
March 22, 2001
May 23, 2001
June 16, 2001
March, 2003

EstablishedObtained license as a building lots and building transactions agent under the Building
Lots and Building Transactions Law
Obtained approval as a discretionary transaction agent under the Building Lots andBuilding Transactions Law
Registered as a general real estate investment advisor under the Real Estate
Investment Advisor Registration Regulations
Obtained approval as an Asset Management Company under the Investment Trust Law
of Japan
Increased capital from ¥100 million to ¥198 million
Changed name (from “MF Asset Management Co., Ltd.” to "Office Building FundManagement Japan Limited")
Increased capital from ¥198 million to ¥495 million
Changed name (from "Office Building Fund Management Japan Limited" to "Nippon
Building Fund Management Ltd.")

List of Shareholders （as of December 31, 2005）
Name
Mitsui Fudosan Co., Ltd.
Sumitomo Life Insurance Company
The Chuo Mitsui Trust and Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
Daido Life Insurance Company
Mitsui Sumitomo Insurance Co., Ltd.
Mitsui Mutual Life Insurance Company
Britel Fund Trustees Limited
Total

Number of shares owned
4,257
3,465
495
495
297
297
297
297
9,900

Percent
43.0%
35.0
5.0
5.0
3.0
3.0
3.0
3.0
100.0%

Directors and Staff
As of March 30, 2006, the directors and corporate auditors of NBFM are as follows.
directors and auditors of NBFM is comprised of 17 persons.
Name of Directors and Auditors
Koichi Nishiyama
Hiroyuki Sawa
Riichi Morihiro
Yuri Giga
Tamotsu Shinyama
Yoshinori Nishitsuji
Noriaki Moromachi

The staff other than

Title
President & CEO (standing)
Director, Head of Investment & Finance Group (standing)
Director, Head of Administration Group (standing)
Director
Director
Corporate Auditor
Corporate Auditor- 55 -

Outline of Financial Conditio
An outline of the financial condition of NBFM is as follows.
Outline of Principal Assets and Liabilities for the Most Recent Fiscal Year
Current as of March 31, 2006
Yen in thousands
Total Assets
1,799,163
Total Liabilities
377,888
Shareholders’ Equity
1,421,275
Profit & Loss for the Most Recent Fiscal YearFirst Fiscal Year
From: April 1, 2005
To: March 31, 2006
Operating Income
Ordinary Profit
Net Income- 56 -

Yen in thousands
1,282,093
1,284,785
742,444■Investment Objects
The Investment Objects of NBF specified in the Articles of Incorporation are as follows.

A.

Principal Investment Objects among Designated Assets

NBF will principally invest in the below-listed Designated Assets with the objective of assuring steady growth andstable profits from the Managed Assets.
(1) Real estate, real estate leasehold interests and superficies.
(2) Beneficiary Certificates backed by real estate, land leasehold rights and superficies, including inclusive
trusts consisting of funds appurtenant to real estate.
(3) Tokumei-kumiai ownership interests (provided, however, that this is limited to those the assets of which areprimarily invested and Managed Assets principally referred to in paragraphs (1) and (2) above).
(4) Preferred Investment Certificates of Special Purpose Companies (meaning those specified in Article 2.1.5.3of the Securities and Exchange Law of Japan; provided, however, that this is limited to those the assets ofwhich are primarily invested and Managed Assets principally referred to in paragraphs (1) and (2) above).
(5) Special Purpose Beneficiary Certificates (meaning those specified in Article 2.1.7.4 of the Securities andExchange Law of Japan; provided, however, that this is limited to those the assets of which are primarily
invested and Managed Assets principally referred to in paragraphs (1) and (2) above).
(6) Beneficiary Certificates of investment trusts (meaning those specified in Article 2.1.7 of the Securities andExchange Law of Japan; provided, however, that this is limited to those the assets of which are primarily
invested and Managed Assets principally referred to in paragraphs (1) and (2) above).
(7) Investment Securities (meaning those specified in Article 2.1.7.2 of the Securities and Exchange Law ofJapan; provided, however, that this is limited to those the assets of which are primarily invested andManaged Assets principally referred to in paragraphs (1) and (2) above).
(8) Beneficiary Certificates of Money Trust (limited to those the trust assets of which are primarily invested
and Managed Assets referred to in paragraph (1) above).

B.

Other Investment Objects among Designated Assets
NBF may, for the purpose of efficiently managing surplus funds, invest in the following Designated Assets.
(1) Bank deposits(2) Call loans(3) Japanese Government Bonds, Notes and Bills(4) Regional Treasury Bonds, Notes and Bills(5) Commercial Paper(6) Designated Bonds of Special Purpose Companies (meaning those specified in Article 2.1.3.2 of the
Securities and Exchange Law of Japan; provided, however, that this is limited to asset-backed securities
principally referred to in paragraphs (1) and (2) of section (A) above).
(7) Monetary Claims (excluding those subject to the provisions of Paragraphs 1, 12 and 14 of Article 3 of thegovernment ordinance regarding the Investment Trust Law of Japan).
(8) Beneficiary Certificates of Money Trust invested and managed for the purpose of any of the foregoing
items.
- 57 -

Moreover, in order to avoid risks of fluctuation in the prices of the Managed Assets as well as risks of fluctuations ininterest rates, futures transactions, option transactions, swap transactions and forward rate transactions with respect toJapanese interest rates may be undertaken. In addition, NBF may acquire shares of stock in real estate managementcompanies etc. to the extent that such acquisition is incidental to NBF’s investment in the principal Designated Assets.

C.

Assets other than Designated Assets

NBF may, for the purpose of efficiently managing surplus funds, invest in Certificates of Deposit issued by Japanese
legal entities. In addition, NBF may invest in equity interests of partnerships defined under Article 667 of the Civil Code(but limited to such partnerships established by contribution of real estate, real estate leasehold rights and superficies forthe purpose of leasing, operating or managing etc. of the same) as well as trademark rights to the extent that suchinvestment is incidental to NBF’s investment in the principal Designated Assets.

D.

Investment in Ordinary Securities

NBF does not, in principle, have the objective of investing in and managing assets which are securities, except for
those described in A and B above.

- 58 -

■ Investment Restrictions
A. The investment restrictions specified in the Articles of Incorporation and the asset management
guidelines applicable to NBF. Please also refer to "Investment Policies of NBF 1. Basic Investment
Policies B. Investment Strategy" herein.
Investment Location and Currencies
NBF will invest neither in real estate located outside of Japan nor in assets denominated in non-Japanese currencies("Investment Objects and Policies", Articles of Incorporation).

Borrowing
See “Investment Policies of NBF 1. Basic Investment Policies B. Investment Strategy (4) Financial Policies”.

Concentration of investment
There is no limitation on concentration of investment. See “Investment Policies of NBF 1. Basic Investment Policies
B. Investment Strategy (1) Strategy for Creation of the Portfolio”.

Investment in Other Funds
See “Ⅲ Appendix Investment Objects A. Principal Investment Objects among Designated Assets”.
The real estate held by such funds may not include any real estate located outside of Japan (Articles ofIncorporation).

Subscription and Margin Trading of Securities
NBF may not subscribe to, or conduct margin trading of, securities.

Compliance with Laws and Regulations
The Managed Assets of NBF will be managed in compliance with Investment Trust Law of Japan and related
regulations, the rules stipulated by the Investment Trusts Association (as amended), as well as “Investment Objects andPolicies” of the Articles of Incorporation.

B. Compliance with the Investment Trust Law of Japan
While a registered investment corporation must entrust business related to asset management to an asset
management company, an asset management company is prohibited from performing certain acts related to thebusiness of managing the assets of said investment corporation. As a result, an investment corporation is subject tocertain investment restrictions (all references in parentheses below are to the provisions of the Investment Trust Law ofJapan) besides restrictions applied to a registered investment corporation. NBF will naturally comply with suchinvestment restrictions, a general overview of which follows.

Reciprocal Transactions with Investment Corporations (§34.3.1.5)
Transactions between investment corporations, the assets of which are managed by an asset management company
are prohibited except for certain cases specified in the provisions of the government ordinance regarding theInvestment Trust Law of Japan that are considered unlikely to result in failure to protect the interests of shareholders.

- 59 -

Transactions by an Investment Corporation with Investment Trust Assets (§15.1.3)
Transactions between an investment corporation and investment trust assets subject to asset management areprohibited except for certain cases specified in the provisions of the government ordinance regarding the Investment
Trust Law of Japan that are considered unlikely to result in failure to protect the interests of shareholders.

Transactions for the benefit of Third Parties (§34.3.1.6)
An asset management company may not undertake transactions in certain securities based on fluctuations in theprice, index, value, or amount of consideration related to transactions in the assets of an investment corporation,
without a legally-valid reason, with the objective of benefiting a third party other than NBF or said investment.

Transactions Harmful to the Interests of NBF (§34.3.1.7)
An asset management company may not undertake transactions that are other than upon normal terms andconditions for such transaction, and further, such transaction upon said conditions would be harmful to the interests of
the investment.

Other Transactions specified in the Government Ordinance regarding the Investment Trust Law ofJapan (§34.3.1.8)
In the addition to the foregoing, those acts specified in the government ordinance regarding the Investment Trust
Law of Japan being certain acts committed by an asset management company that would result in failure to protect theinterests of shareholders, damage the fairness of the management of the assets of NBF, and pose a risk of damaging thegood public reputation of NBF are prohibited.

Limitation on Acquisition of the Same Issue of Shares (§194)
A registered investment corporation may not acquire the same shares issued by a corporation in excess of 50/100 of
total number of said issued and outstanding shares.

Restriction on Acquisition of Own Shares and Acceptance of Pledge (§80.1)
An investment corporation may not acquire shares issued by itself, or accept them for the purpose of pledge, unlessit acquires shares issued by itself in the following cases
・ when acquired as the result of merger;
・ if necessary for attaining the purpose of exercising its rights; or・ when purchasing shares pursuant to the provisions of the Investment Trust Law of Japan.

Restriction on Acquisition of Parent Corporation’s Shares by Subsidiary Corporation(§81.1)An investment corporation (e.g. subsidiary), a majority of the shares of which is owned by another investment
corporation (e.g. parent) may not acquire the shares of such parent investment corporation except in the following
cases
・ when acquired as the result of merger; or・ if necessary for attaining the purpose of exercising its rights.

- 60 -

Restrictions of Transactions with Interested Parties(1) Restriction on an asset management company (§34.3)
In accordance with the provisions of laws and regulations, an asset management company is prohibited fromcommitting any of the following acts in connection with transactions with an Interested Party etc. "Interested Partyetc." as used herein means a person who holds a majority of the shares of an asset management company or otherwise
has a close relationship with said asset management company as designated by the government ordinance regarding theInvestment Trust Law of Japan.
a) An investment trust agent, trust company, financial institution engaged in trust business, investment advisor,
residential land and building specialist etc. who is an Interested Party etc. of an asset management company
undertakes a transaction which harms the interests of NBF with the objective of benefiting a customer etc. specified
in the Investment Trust Law of Japan.
b) Undertaking transactions which harm the interests of an investment corporation with the objective of benefiting an
Interested Party etc. of NBFM.
c) Undertaking transactions clearly recognized to be unnecessary in light of the management policies for the assets ofan investment corporation, the amount of net assets of NBF, or market conditions, with the purpose of benefiting asecurities company, registered financial institution, residential land and building specialist or other person specified
in the government ordinance regarding the Investment Trust Law of Japan who is an Interested Party etc. of an asset
management company.
d) In the event that a securities company, who is an Interested Party etc. of an asset management company, acts as anunderwriter in a securities transaction, undertaking transactions with the objective of fraudulently manipulating themarket for the purpose of having an influence upon the conditions of the primary offer or secondary distribution ofsaid securities not reflecting correct market pricing.
e) In the event that an issuer, securities company or registered financial institution, who is an Interested Party etc. ofan asset management company, undertakes a primary offer or secondary distribution of securities or participates inhandling a primary offer, private offering, or secondary distribution at a time when the subscription amount of said
acquisition or the amount of purchase offer of securities to said issuer, securities company or registered financial
institution is not foreseen to reach that otherwise expected by said issuer, securities company or registered financial
institution, acquiring or purchasing said securities with assets of NBF at the request of said issuer, securities
company or registered financial institution.
f) In the event that a specified real estate syndicate, who is an Interested Party etc. of an asset management company,
makes a solicitation in connection with the execution of a specified real estate syndication agreement at a time
when the contract amount of said specified real estate syndication agreement is not foreseen to reach that otherwise
expected by said specified real estate syndicate, acquiring a tokumei kumiai interest pursuant to said specified realestate syndication agreement with assets of NBF at the request of said specified real estate syndicate.

- 61 -

g) In the event that the manager of a tokumei kumiai, who is an Interested Party etc. of an asset management company,
makes a solicitation in connection with the execution of a tokumei kumiai agreement at a time when the total
investment amount otherwise obtained pursuant to said tokumei kumiai agreement is not foreseen to reach that
expected by the manager of said tokumei kumiai, acquiring a tokumei kumai interest pursuant to said tokumei
kumiai agreement with assets of NBF at the request of the manager of said tokumei kumiai.
h) In the event that a trust company, who is an Interested Party etc. of an asset management company, makes asolicitation in connection with the execution of a trust agreement at a time when the amount of trust assets
otherwise obtained pursuant to said trust agreement is not foreseen to reach that expected by said trustee, acquiringa beneficiary certificate pursuant to said trust with assets of NBF at the request of said trustee.
i) In the event that a distributor of trust beneficiary interests, who is an Interested Party etc. of an asset managementcompany, distributes, or acts as an agency or intermediary of distribution of, trust beneficiary interests at a time
when the total amount of purchase offer of said trust beneficiary interests to said distributor of trust beneficiaryinterests is not foreseen to reach that otherwise expected by said distributor of trust beneficiary interests, purchasing
said trust beneficiary interests with assets of NBF at the request of said distributor of trust beneficiary interests.

(2) Submission of written notice when conflict of interest is anticipatedSubmission of written notice when conflict of interest is anticipated (§34.6.2-4 of the Investment
Trust Law)
An asset management company must, in the event that any sale or purchase of, or any other transaction set forth
under the government ordinance regarding the Investment Trust Law with respect to, the Designated Assets (excluding
the specified assets set forth under the Investment Trust Law and such assets as are set forth under the enforcement
regulations of the Investment Trust Law, the same to apply hereinafter in this paragraph) is conducted between an
investment corporation the assets of which are managed by said asset management company on one hand, and said
asset management company, its director or executive officer, any other investment corporation, investment fund which
directs management, Interested Party etc. or other person set forth under the government ordinance regarding theInvestment Trust Law on the other, submit written notice, in accordance with the enforcement regulations of theInvestment Trust Law, to said investment corporation, other investment corporations (which invest in the same kind ofassets as the said Designated Assets) the assets of which are managed by said asset management company and otherpersons set forth under the government ordinance regarding the Investment Trust Law specifying the matters relating
to such transaction; provided, however, that in lieu of such submission of written notice, said asset managementcompany may, in accordance with the government ordinance regarding the Investment Trust Law, provide the mattersto be specified in such written notice by such methods as using electronic information processing systems or othertelecommunication technology which are set forth under the enforcement regulations of the Investment Trust Law withthe consent of said investment corporation the assets of which are managed by said asset management company, otherinvestment corporations (which invest in the same kind of assets as the said Designated Assets) the assets of which aremanaged by said asset management company and other persons set forth under the government ordinance regarding
the Investment Trust Law.

- 62 -

(3) Restriction on an investment corporation
Restrictions on Asset Management(§195)A registered investment corporation must not, in principle, acquire or sell securities, lend or borrow securities,
acquire or sell real estate, lease real estate or entrust the supervision of real estate (provided, however, that, it isacceptable to cause NBFM to act as an agent or broker concerning the purchase or leasing of residential building lots
or buildings) or otherwise engage in transactions concerning Designated Assets other than the preparation ofresidential building lots and design of buildings, with its executive directors or supervisory directors, asset
management companies who perform asset management, close relatives of executive directors or supervisory directors,
or persons or employees who perform duties similar to directors or auditors of an asset management company who
perform asset management.

- 63 -

- 64 -

Nippon Building Fund Inc.
Corporate Data
Corporate Office:7-2, Yaesu 2-chome, Chuo-ku, Tokyo, 104-0028, Japan+81-3-3281-8810
http://www.nbf-m.com/nbf_e

Date of Inception:

March 16, 2001

Capital:Contributed capital and common shares issued and outstanding as of December 31, 2005:¥262,170 million
422,700 shares

Shareholders:

19,873 (As of December 31, 2005)

Transfer Agent:

The Chuo Mitsui Trust and Banking Co., Ltd.
33-1, Shiba 3-chome, Minato-ku, Tokyo, 105-8574, Japan

Business Office of the Transfer Agent:

Stock Transfer Agency Department of the Chuo Mitsui Trust and Banking Co.,Ltd.
8-4, Izumi 2-chome, Suginami-ku, Tokyo, 168-0063, Japan+81-3-3323-7111

Independent Public Accountants:

KPMG AZSA & Co.
AZSA Center Building
1-2, Tsukudo-cho, Shinjuku-ku, Tokyo, 162-8551, Japan

Investor Relations:

For further information, please contact our Asset Management company:
Investor Relations of Financial Department
Nippon Building Fund Management Ltd.
7-2, Yaesu 2-chome, Chuo-ku, Tokyo, 104-0028, Japan+81-3-3281-8810

This document contains translations of selected information described in the Securities Report (Yuka shoken hokokusho) filed on March 30, 2006 pursuant to the
Securities Exchange Law of Japan, and the Financial Statements and the Performance Information Report for the period from July 1, 2005 to December 31, 2005, of
Nippon Building Fund Inc. prepared pursuant to the Investment Trust Law of Japan.
This English language document was prepared solely for the convenience of and reference by overseas investors and neither corresponds to the original Japanese
documents nor is it intended to constitute a disclosure document. The Japanese language Securities Report and the Financial Statements and the Performance
Information Report for the aforementioned period should always be referred to as originals of this document.
English terms for Japanese legal, accounting, tax and business concepts used herein may not be precisely identical to the concept of the equivalent Japanese terms.
With respect to any and all terms herein, including without limitation, financials statements, if there exist any discrepancies in the meaning or interpretation thereof
between the original Japanese documents and English statements contained herein, the original Japanese documents will always govern the meaning and interpretation.
None of Nippon Building Fund Inc., Nippon Building Fund Management Ltd. or any of their respective directors, officers, employees, partners, shareholders, agents oraffiliates will be responsible or liable for the completeness, appropriateness or accuracy of English translations or the selection of the portion(s) of any document(s)translated into English. No person has been authorized to give any informations or make any representations other than as contained in this document in relation to thematters set out in this document, and if given or made, such information or representation must not be relied upon as having been authorized by Nippon Building Fund
Inc., Nippon Building Fund Management Ltd. or any of their respective directors, officers, employees, partners, shareholders, agents or affiliates.
The financial statements of Nippon Building Fund Inc. have been prepared in accordance with generally accepted accounting principles in Japan (Japanese GAAP)
which may materially differ in certain respects from generally accepted accounting principles in other jurisdictions.
Many provisions of this document contain forward-looking statements and information. We base these statements on our beliefs as well as our assumptions based
solely on certain limited information currently available to us. Because these statements reflect our current views concerning future events, these statements involve
known and unknown risks, uncertainties and assumptions. Our future performance could materially differ from those set out in these forward-looking statements. We do
not undertake and will not undertake to release revisions of forward-looking statements to reflect future events or circumstances or of any other statements or information
contained herein.