Fiscal Period 18. A Hybrid REIT Investing in Office and Residential Space in the Tokyo Metro Area

Transcription

1 A Hybrid REIT Investing in Office and Residential Space in the Tokyo Metro Area 18 (6 months ended November 2010) Materials for Analyst Meeting Asset Management Company Financial Instruments Business Agent Reg. No. 316, Director-General, Kanto Finance Bureau (Financial Instruments and Exchange Act) Member, The Investment Trusts Association, Japan

2 Table of Contents 18th (6 months ended November 2010) Materials for Analyst Meeting Ⅰ Overview of 18th Finantial Highlights 3 Main Topics 4 Ⅱ Basic Philosophy and Characteristics of the Investment Corporation Basic Philosophy 6 Portfolio Focused on Tokyo 23 Wards 7 Portfolio Focused on Office and Residence 8 Overview of the Sponsor 9 Sponsor Support 10 Ⅲ Merger with Japan Single-residence REIT (JSR) Merger Overview 12 Merging Investment Corporations 13 Strengthening Management Structure 14 Advantage of Merger 15 Expansion of Asset Size and Improvement of Quality 16 Utilization of Negative Goodwill 17 Liquidity of Investment Units 18 Ⅳ Operations of 18th External Growth: Policies for Portfolio Building, Historical Asset Size, etc. 20 Internal Growth: Historical Occupancy Rates 21 Internal Growth: Efforts to Cut Energy 22 (Reference) Data on Portfolio (Reference) Data on Portfolio Financial Condition: List of Interest-bearing Liabilities, Lender Share 25 Financial Condition: Balance of Interest-bearing Liabilities, Shift in Average Remaining Years to Maturity 26 Financial Condition: Diversification of Refinance and Repayment Dates 27 Ⅴ Forecasts and Growth Strategies for 19th 1 2 Ⅵ Appendix Forecasts for 19th Operations 29 Growth Strategies 30 Balance Sheet 32 Profit and Loss Statement 33 Profits from Rental Business 34 Portfolio Map 35 Portfolio Overview and Performance 36 Property Acquisition Routes 55 Historical Appraisal Values 56 Historical NOI Return 57 Historical Occupancy (by property) 58 Condition of Collaterals 59 Condition of Investment Unit Price 60 Overview of Asset Management Company 61 Management Policy of Asset Management Company 62 These materials have been prepared for the sole purpose of providing information and are not intended for soliciting, encouraging, or marketing specific products. Please contact securities firms when considering purchasing our investment securities. The contents of these materials contain forward looking statements but these statements are not a guarantee of the future performance, management results or financial results of Heiwa Real Estate REIT, Inc.. In addition, Heiwa Real Estate REIT, Inc. does not guarantee the accuracy or reliability of the contents of these materials. Please note that the content of these materials may be changed or cancelled without any prior warning. The contents of these materials may not be duplicated or transcribed without prior permission. 1

3 Ⅰ Overview of 18th

4 1 Finantial Highlights Merge with Japan Single-residence REIT Inc. (JSR) in October 2010 Operating revenues was 3,374 million yen (+ 19.2% year-on- year), Operating profit was 1,486 million yen (+ 22.0% year-on- year), Net profit was 10,868 million yen, Gain on negative goodwill was 10,026 million yen, Net profit excluding gain on negative goodwill was 841 million yen (+ 21.2% year-on- year) Distribution per unit was 1,375 yen (+ 4.4% year-on- year) Management Performance for 18th 17th 18th Forecast Variation (Unit: million yen) CIC 95, JSR 577, building compensation for m2 Harajuku in Operating revenues 2,830 3, previous term (127) CIC (1), JSR 198, Selling, General and Administrative Operating expenses 1,611 1, Expense 79 Operating profit 1,218 1, Factor (million yen) 10,000 8,000 2,585 <History of Performance> 2,210 (yen) 2,500 2,000 Non-operating earnings Non-operating expenses ,000 1,317 1,375 1,500 Leasing business 347 (CIC 95, JSR 378, m2 Harajuku Ordinary profits (127), Selling, General and Administrative Expense 79, Non-operating (121) Extraordinary profits - 10,026 10,026 Gain on negative goodwill Outstanding investment units at end of period (units) Distribution per unit (yen) 17th : December 1, 2009 May 31, th : June 1, 2010 November 30, 2010 Net profits ,868 10,173 Current State of Portfolio * , ,006 * Investment units before split * Figure before considering split for comparison purposes * 1,317 1, (before considering split: 5,268 yen) End of 17th (May 31, 2010) End of 18th (November 30, 2010) Asset size (acquisition price) 96,915 million yen 143,727 million yen Number of properties 47 (22 office building, 25 residential) 90 (22 office building, 64 residential and 4 hotels) Rentable floor area 110, m2 200, m2 Occupied floor area 101, m2 187, m2 Occupancy rate 91.48% 93.47% Portfolio NOI yield 4.37% 4.89% 4,000 2, ,306 3,135 1,650 1,502 1, th 15th 2,889 * Distribution per unit for the 14th through the 17th are divided by four since a one-for-four investment unit split was implemented on October 1, th 2,830 3,374 1,218 1, th th Operating revenues Operating profit Net profits Distribution per unit (after investment unit split) 1,

5 2 Main Topics Merged with JSR on October 1, 2010 and name changed to Heiwa Real Estate REIT, Inc. (HFR) Asset size: 143,727 million yen (based on acquisition price) Enhanced stability of revenues with the expansion of asset size and brand power for improved degree of recognition Due to the investment unit split, the number of outstanding investment units increased from 131,891 units (previous fiscal period end) to 695,897 units Stabilized investment unit price and expanded investors due to higher liquidity of investment units Gain of 10,026 million yen in negative goodwill Allocate when losses on sales occur due to replacement of assets, securing flexibility in distribution policy Internal growth strategies Occupancy rate at fiscal period end: 93.47% (previous fiscal period end: 91.48%) Change the property management company of 8 residential properties to Haseko Livenet in order to further increase operational efficiency Occupancy rate of residential properties rose to 93.37% (previous fiscal period end: 89.89%) Financial strategies Refinanced 15,345 million yen in loans on October 27, 2010 (lengthening, diversifying) (1 year: 7,425 million yen,, 3 years: 4,950 million yen, 5 years: 2,970 million yen) Previous fiscal period end At time of merger Current fiscal period end Balance of interest-bearing liabilities (million yen) 39,959 70,263 70,263 LTV (%) Average interest rate of liabitity (%) Average remaining period (year)

6 Ⅱ Basic Philosophy and Characteristics of the Investment Corporation

7 1 Basic Philosophy Basic Philosophy of the investment corporation To manage with the goal of securing solid growth of portfolio and stable medium-to long-term revenues Solid Growth of Portfolio Stable Medium- to Long-term Revenues External Growth Concentrated investment in Tokyo s 23 wards with high tenant demand Utilization of Heiwa Real Estate s pipeline Internal Growth Adequate management through collaboration with property management companies Leasing market trend analysis realization of early lease-ups Maintenance of stable occupancy rates, rent levels through concentrated investment in office and residential properties in Tokyo 23 wards Impact of diversification of portfolio, risk reduction Adequate operation and management through collaboration with property management companies Optimal financial strategies through creditworthiness of Heiwa Real Estate Maximization of Portfolio Value Medium- to Long-term EPS Growth/Rise in Investment Unit Price Maximization of Investors Value 6

8 2-1 Portfolio Focused on Tokyo 23 Wards We position Tokyo 23 wards as our main investment area, but we will invest in other areas also in consideration of the market conditions of each area (amount of stock of acquisition properties, conditions of transaction prices, conditions of leasing market, etc.) Tokyo 23 Wards 70.4 % 60 properties, billion yen Office building Residential Hotel The height of the bar graphs indicate asset size of each property type in each area (based on acquisition price) 100,000 80,000 60,000 Sapporo 0.4 % 2 properties, 630 million yen 40,000 20, ,000 <Excess Population Shift (1997 to 2009)> Tokyo has received excess population shift for more than the past 10 years in a row Tokyo 23 Wards Nagoya City Osaka City Fukuoka City Fukuoka 2.3 % 4 properties, 3.33 billion yen Kansai 11.6 % 10 properties, billion yen Surrounding Area of Tokyo 11.5 % 8 properties, billion yen Nagoya 1.1% 2 properties, 1.7 billion yen Sendai 2.4 % 4 properties, 3.47 billion yen (Source) Ministry of Internal Affairs and Communications Statistics Bureau, Annual Report on the Internal Migration in Japan Derived from the Basic Resident Registers <Future Population Estimate by Prefecture (Indicated in indices with 2005 as 100> Future Population of Tokyo Pref. is estimated bullish. Nationwide Tokyo Aichi Prefecture Osaka Prefecture Fukuoka Prefecture (Source)Prepared based on National Institute of Population and Social Security Research s material Japan s Population Prospects by Prefecture (May 2007 estimate) 7

9 2-2 Portfolio Focused on Office and Residence Hybrid REIT with concentrated investment in Office and Residence centered on Tokyo 23 wards estimated by high tenant demand Office Abundant demand in the widest tenant segment Residence Strong tenant demand supported by high demand for housing Relatively large number of small- and mediumsized businesses considered to be the main tenant demographic of target Large number of offices and employees in Tokyo s 23 wards Tends to be influenced by demand and rent trends in favorable economic conditions (profitability) profitability and stability due to hybrid portfolio Population is increasing in Tokyo Larger population and number of households compared to other major cities/prefectures Does not tend to be influenced by demand and rent trends in bad economic conditions (stability) (offices) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 <Offices and Employees in Major Cities, 2006 (All Industries)> (No. of Offices) Comparatively large number of small-/medium-sized offices The percentage of offices with less than 50 employees among offices in Tokyo s 23 wards is 95.9% (thousands) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 (No. of Employees) 12.30% Numerous Employees in Tokyo 3.78% 2.47% 1.38% over 300 Tokyo 23 Wards Nagoya City Osaka City Fukuoka City Tokyo 23 Wards Nagoya City Osaka City Fukuoka City employees (Source) Ministry of Internal Affairs and Communications Statistics Bureau, 2006 National Office/Corporate Statistics Survey National Results 8

10 3-1 Overview of the Sponsor Heiwa Real Estate was founded in 1947 for the purpose of leasing facilities, such as stock exchange facilities, located in Tokyo, Osaka, Nagoya, etc. to stock exchanges and securities firms. Since then, it has exclusively owned stock exchange facilities which sustain the Japanese securities market and is responsible for their management, operations and development as a comprehensive real estate company. Heiwa Real Estate Co., Ltd. Company Name Heiwa Real Estate Co., Ltd. Established July 1947 Head Office Address 1-10, Nihonbashi Kabutocho, Chuo-ku, Tokyo Branches Representative Osaka Branch, Nagoya Branch, Fukuoka Branch and Sapporo Branch Sadao Yoshino, President and Director Paid-in Capital 15,797 million yen (as of March 31, 2010) Stock Exchange Listed Line of Business First sections of Tokyo Stock Exchange, Nagoya Stock Exchange and Osaka Securities Exchange, and Fukuoka and Sapporo 1. Building business 2. Housing business 3. Asset development business 4. Real estate brokerage business 5. Other businesses Tokyo Stock Exchange Building Osaka Securities Exchange Building Tokyo Twin Parks * Heiwa Real Estate owns, manages and operates the Tokyo Stock Exchange Building and Osaka Securities Exchange Building and Tokyo Twin Parks has been subdivided for sale. They are not owned by HFR. 9

11 3-2 Support by Sponser Ⅰ Strengthened Sponsorship by Heiwa Real Estate Acquisition of all shares of asset management company On October 19, 2009, investment ratio of Heiwa Real Estate Asset Management Co., Ltd. increased from 29.2% to 100% Dispatch directors to asset management company Heiwa Real Estate dispatched the representative director, two full-time directors, one part-time directors, one part-time auditor and one staff for a total of six people and strengthened governance Underwriting investment units issued through third-party allotment (around 3 billion yen) Commitment as investor to own around 14.7% of outstanding investment units Ⅱ Clarification of Support Structure Support for property acquisition On March 29, 2010, acquired Kayabacho Heiwa Building at 4,798 million yen, NOI yield of 7.33%/Occupancy rate of 100% Support for internal growth Improved occupancy rate: 87.74% (end of November 2009) 93.47% (end of November 2010) Financial support New loans from three financial institutions including Sumitomo Mitsui Banking Corporation as a new lender (October 27, 2009, 8.5 billion yen) Credit ratings (R&I): BB+ BBB (November 13, 2009) Removal of GC note (January 21, 2010) Borrow 2 billion yen from Aozora Bank, Resona Bank (March 29, 2010) Name change of asset management company Heiwa Real Estate Asset Management Co., Ltd. Name change of investment corporation Heiwa Real Estate REIT, Inc. Ⅲ Further expand credit base and strengthen real estate management capacity 10

12 Ⅲ Merger with Japan Single-residence REIT (JSR)

13 1 Merger Overview Merged with 科 JSR 目 on October 1, 2010 to establish a foundation for growth Asset management companies merged as well the same day Merger Overview Investment Unit Split Merger Method Merger Ratio Absorption-type merger leaving Crescendo Investment Corporation (CIC) as the surviving entity and JSR as the absorbed entity. CIC:JSR = 1 : 0.75 Issued investment units 131,891 CIC investment unit 4:1 split 527,564 units Effective Date October 1, 2010 Issued investment units 56,111 CIC investment unit 3:1 split (per JSR unit) 168,333 units Issued Investment Units 695,897 units Merger of Asset Management Companies Absorption-type Merger Japan Single-residence Asset Management Corp. Heiwa Real Estate Asset Management Co., Ltd. Heiwa Real Estate Asset Management acquires all shares of Japan Single-residence Asset Management and absorption-type merger executed the same day as the effective date of the merger of investment corporations Succeeded personnel, integration of operational systems 12

14 2 Merging Investment Corporations Item Corporation Surviving Absorptiontype Merger Corporation Dissolving in Absorption-type Merger Name Crescendo Investment Corporation Japan Single-residence Investment Corporation Corporation Surviving Absorption-type Merger (Name Change) Heiwa Real Estate REIT, Inc. Executive Director Masaaki Higashihara Akihiko Soga Masaaki Higashihara Supervisory Directors Kazutoshi Otsubo Eiichiro Yokoyama Takashi Sugiura Akito Hattori Yasuo Ide Kazutoshi Otsubo Eiichiro Yokoyama Takashi Sugiura Listing Date March 8, 2005 July 13, 2005 March 8, 2005 Securities Code Total Investment Amount 59,412 million yen 27,317 million yen 59,412 million yen Investment Units Outstanding 131,891 units 56,111 units 695,897 units End May, November January, July May, November Asset Management Company HEIWA REAL ESTATE Asset Management Co., Ltd. Japan Single-residence Asset Management Co., Ltd. Sponsor Heiwa Real Estate Co., Ltd. Apamanshop Sublease Co., Ltd. Lehman Brothers Investments Japan Inc. K.K. davinci Holdings Portfolio (based on acquisition price) HEIWA REAL ESTATE Asset Management Co., Ltd. Heiwa Real Estate Co., Ltd. 96,915 million yen 56,591 million yen 143,727 million yen Appraised Value 83,752 million yen(as of May 31, 2010) 47,393 million yen(as of July 31, 2010) 128,955 million yen(as of November 30, 2010) Market Capitalization 20,522 million yen (as of June 21, 2010) 5,538 million yen (as of June 21, 2010) 35,560 million yen (as of November 30, 2010) Total Amount of Interestbearing Liabilities 39,959 million yen 30,454 million yen 70,263 million yen 13

15 3 Strengthening Management Structure Implemented structural reform of asset management company in line with the merger Subdivided organization according to specialty area Before Change After Change General Meeting of Shareholders Board of Auditors General Shareholders Meeting Corporate Auditor Board of Directors Board of Directors Compliance Committee Representative Director Compliance Office Compliance Committee Representative Director Compliance and Risk Management Office Investment Committee Investment Committee Auditing Office Administration Department Fund Management Section Financial Affairs Section Management Department Investment Management Section Audit Office Planning Division Business Planning Department Investment Management Division Office Investment Management Department IR Department Residence Investment Management Department Due to the merger, we have accepted 11 employees from Japan Single-residence Asset Management, divided the Management Department to Office Investment Management Department and Residence Investment Management Department, and manage efficiently according to asset type Launched the IR Department and Business Planning Department and strengthened management structure General Affairs Department Finance and Accounting Department 14

16 4-1 Advantage of Merger Improve degree of recognition and brand power through expansion of asset scale 96.9 billion yen billion yen Risk diversification and stabilization of revenues by increase in number of properties 47 properties 90 properties Synergy achieved by efficient operation Portfolio occupancy rate 91.48% 93.47% Sales and general management costs expected to decrease around 70 million yen for the full fiscal period compared to the total of former CIC and former JSR in their latest fiscal periods Gain on negative goodwill: 10,026 million yen Gained ability to replace properties strategically and flexibly Negative goodwill applied to loss on sale Increased liquidity, stabilized unit price as well as expansion of investors through unit split and issue of new units Year before date of merger (October 1, 2009 September 30, 2010) From date of merger to the end of 18th (October 1, 2010 November 30, 2010) Variation (%) Average unit price (yen) 35,501 45, Average volume (unit) 1,209 2,

17 4-2 Expansion of Asset Size and Improvement of Quality As a result of merger, asset scale expanded from 96.9 billion yen to billion yen Investment ratio of residential expanded to 60.9%, ratio of regional areas increased <Asset size> <Investment Area Breakdown (Overall)> 17th 96.9 billion yen 18th billion yen Other Tokyo 8.66% metropolitan area 15.11% Tokyo 23 wards 29.94% Central 5 wards 46.29% Other (regional area) increased with merger Other 18.07% Tokyo metropolitan area 11.50% Tokyo 23 wards 28.11% Central 5 wards 42.32% <Investment Type Breakdown> *The central 5 wards are Chiyoda, Minato, Chuo, Shibuya and Shinjuku wards Residential 46.27% Office 53.73% residential increased with merger Residential 60.86% Hotel 2.91% Office 36.23% <Investment Area Breakdown (Office)> Other 16.11% Tokyo metropolitan area 10.47% Tokyo 23 wards 18.07% Central 5 wards 55.35% Other 16.11% Tokyo metropolitan area 10.47% Tokyo 23 wards 18.07% Central 5 wards 55.35% <Asset Age Breakdown> 20 years or Under 5 years more 15.09% 15.39% years 37.32% years 2.42% 5-10 years 29.78% Average asset age: 14.2 years Average asset age of properties decreased with merger years 24.20% 20 years or more Under 5 years 11.34% 20.73% years 3.09% 5-10 years 40.64% Average asset age: 11.6 years *The central 5 wards are Chiyoda, Minato, Chuo, Shibuya and Shinjuku wards <Investment Area Breakdown (Residential)> Tokyo metropolitan area 20.50% Tokyo 23 wards 43.73% Central 5 wards 35.77% *The central 5 wards are Chiyoda, Minato, Chuo, Shibuya and Shinjuku wards Tokyo metropolitan area 10.51% Tokyo 23 wards 36.39% Central 5 wards 36.59% * Each figure in the graphs indicates the percentage of acquisition price of each item among the total acquisition price in each category Other 16.52% 16

18 4-3 Utilization of Negative Goodwill Aim to enhance value for investors by utilizing negative goodwill gained through merger Gaining Negative Goodwill Gained 10,026 million yen in negative goodwill as a result of the merger Negative Goodwill =Assets received Liabilities received Consideration of merger Costs concerning merger Provided a fair market value of 49,161 million yen to assets received from JSR based on Purchase Method Consideration of Merger was calculated as former CIC unit price of 44,000 yen (closing price on October 1, 2010) x 168,333 units Strategies to Utilize Negative Goodwill Assets (58,477) Liabilities (31,415) Net Assets (27,062) Fair Market Valuation Assets Received (49,161) (Unit: million yen) Liabilities Received (31,407) Negative Goodwill (10,026) Consideration of Merger (7,406) Costs concerning Merger(319) Apply negative goodwill to loss on sale Ability to replace properties strategically and flexibly under long-term vision Improvement of portfolio quality Secure flexibility in distribution policy Ability to utilize negative goodwill when distribution declines 17

19 4-4 Liquidity of Investment Units Improved liquidity and increased trading volume through unit split and issue of new units (yen) Trading Value Investment Unit Price (thousand yen) 200,000,000 55,000 45,000 September 2008: Lehman Brothers Bankruptcy 180,000, ,000, ,000, ,000,000 35, ,000,000 80,000,000 25,000 October 19, 2009: HEIWA REAL ESTATE becomes sole sponsor of asset management company June 21, 2010: JSR Merger Agreement October 1, 2010: JSR Merger (Investment Unit Split) 60,000,000 40,000,000 20,000,000 15,000 0 End of September 2008 End of November 2008 End of May 2009 End of November 2009 End of May 2010 End of End of November December (Note ) A one-for-four investment unit split conducted on October 1, 2010; accordingly, the pre-split investment unit price is divided by four. (million yen) <Trend in Trading Value Before and After the Effective Date of Merger> JSR, times HFR, CIC, 43 0 Before effective date of merger (Note 1) After effective date of merger (Note 2) (Note 1) Average daily trading value during 12 months up to October 1, 2010, which is the effective date of the merger (Note 2) Average daily trading value from October 1, 2010, the effective date of the merger, through November 30,

20 Ⅳ Operations of 18th

21 1 External Growth: Policies for Portfolio Building, Shift in Asset Size, etc. In accordance with the merger, asset size expanded from 96.9 billion yen to billion yen Number of properties increased from 47 to 90, contributing to diversification of portfolio Acquired 4 hotels, which were not among conventional investment criteria, continue to own them as exceptional assets Office and Residence Investment Ratio Office Residence 50% as a rule (30 to 70%) 50% as a rule (30 to 70%) Primary Investment Area Secondary Investment Area Regional Investment Area Primary Investment Area Secondary Investment Area Regional Investment Area More than 70% Up to 30% (*) More than 60% Up to 40% (*) Primary Investment Area Secondary Investment Area Regional Investment Area Tokyo 23 Wards Tokyo (other than Primary), major cities in Kanagawa Prefecture, Chiba Prefecture, Saitama Prefecture Major government-ordinancedesignated cities other than Primary and Secondary investment areas * Investments in regional office buildings, regional residences, and exceptional assets shall total 30% or less of the overall portfolio (based on acquisition price) (billion yen) Portfolio History Asset Scope: 90 Properties billion Portfolio Composition As of November 30, Office Hotel Hotel () number of properties 4.2 (4) 87.5 (64) Hotel 2.91% Office 36.23% (15) 17.0 (6) 16.4 (16) 19.5 (7) 24.4 (21) 25.0 (10) 25.5 (22) 28.7 (12) 27.3 (23) 28.7 (12) 45.1 (27) 46.6 (16) 44.2 (25) 52.7 (20) 44.8 (25) 57.1 (23) 44.8 (25) 57.1 (23) 44.8 (25) 44.8 (25) 57.1 (23) 47.3 (21) IPO 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th (Note) The amounts refer to the investment amount of the entire portfolio (based on acquisition price) (25) 52.1 (22) 52.1 (22) Residential 60.86% 20

22 2-1 Internal Growth: Shift in Occupancy Rates Established specialized organization for office management. Occupancy rates that were temporarily in a downward trend successfully recovered with strategic leasing activities. Gained expertise in residential management. Residential occupancy increases to 93.37% (89.89% in previous fiscal period) due to merger with JSR, which is extremely capable in residential management. (%) 100 Office Residence Hotel Comprehensive Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct-2010 Nov

23 2-2 Internal Growth: Efforts to Cut Energy Implement energy cuts in accordance with energy conservation plan During 18th, we conducted renovation of air conditioning facilities in 13 office buildings (total construction costs: 70,870,000 yen) Example of construction in 18th Aria Ikebukuro 8th Floor Outdoor Unit CIC Toranomon Building 9th Floor Outdoor Unit KCA Building 5th Floor Indoor Unit September 2010 Construction fee: 2,900,000 yen June 2010 Construction fee: 2,900,000 yen September 2010 Construction fee: 4,500,000 yen (Reference) Energy Conservation Plan for Medium to Long Term Year Energy Used FY ,057 Amount of Energy Reduction Commitment (kl) Target Energy Amount (kl) Planned Energy Reduction Amount (kl) FY , FY , FY , FY , FY , Total Comparison with FY % We will continue proactive efforts to reduce the use of energy, such as renovation starting with air conditioning facilities and use of LED illumination. 22

24 (Reference) Data on Portfolio - 1 End Average Rent Level (Office) End of 14th (November 2008) End of 15th (May 2009) End of 16th (November 2009) End of 17th (May 2010) End of 18th (November 2010) End of 18th Year-on-year comparison Monthly rent per tsubo 19,631 yen 19,631 yen 17,436 yen 17,901 yen 18,577 yen +3.77% End Average Rent Level (Residential) End of 14th (November 2008) End of 15th (May 2009) End of 16th (November 2009) End of 17th (May 2010) End of 18th (November 2010) End of 18th Year-on-year comparison Monthly rent per tsubo 10,844 yen 10,875 yen 10,867 yen 10,643 yen 10,928 yen +2.67% Office Building End Tenant Conditions [Diversification of Industry Type] 0.65% 0.65% Service 4.58% 4.58% Wholesale/Retail, Restaurant 5.23% Manufacturing Residential Occupancy Rate by Room Type Single Type (Less than 40m 2 ) Room Type (Area) Investment Share Occupancy Rate at End 78.61% 94.72% Financial/Insurance Real Estate 9.15% 43.14% DINKS Type (40m 2 or more, less than 60m 2 ) 14.17% 91.93% Transport/Communications Construction Accounting Medical 11.76% 20.26% Family Type (60m 2 or more) 7.22% 90.35% Total 100% 93.32% * Excluding store area Total number of office tenants: 154 Diversified to numerous industry types Percentage of Single Type increased due to merger with JSR Operating rate of Single Type is strong 23

25 (Reference) Data on Portfolio - 2 Turnover rates for office and residential, which have been higher in the recent period, indicates a declining trend in the current fiscal period <Shift in Office Occupancy and Turnover Rate (converted to annual basis)> Ended May 2008, Ended May 2008, 13 Occupancy Rate (converted to annual basis) Ended November 2008, Ended November 2008, 14 Ended May 2009, 15 Occupancy Rate (converted to annual basis) Ended May 2009, Ended November 2009, 16 Turnover Rate (converted to annual basis) Ended November 2009, Ended May 2010, Ended May 2010, Ended November 2010, 18 Turnover Rate (converted to annual basis) Ending May 2011, 19 (Note) The figure for the 19th fiscal period (ending May 2011) is an estimated figure based on notices of terminations received by the end of the 18th fiscal period (ended November 2010). <Shift in Residential Occupancy and Turnover Rates (converted to annual basis)> Ended November 2010, 18 Average Occupancy Rate 11.28% (yearly) Average Turnover Rate 9.78% (yearly) Average Occupancy Rate 26.10% (yearly) Average Turnover Rate 22.66% (yearly) 100.0% 97.5% 95.0% 92.5% 90.0% 87.5% 85.0% 82.5% 80.0% Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Revised rent levels to respond to the market <Office Occupancy Rates and Sanko Index> Dec-2009 Sanko Index HRR HRR Index Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Enhanced leasing activities (conducting open houses, etc.) and revised rents (Note 1) Change in occupancy rate of mid-sized buildings in 23 wards by Sanko Estate (Note 2) Change in office occupancy rates of Heiwa Real Estate REIT (Note 3) Weighted average of occupancy rates of mid-sized buildings in 23 wards/mid-sized buildings in metropolitan area/mid-sized buildings in Kobe city by leasable area of Heiwa Real Estate REIT Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct-2010 Nov

26 Long-term Borrowings Secured and Unguaranteed Long-term Borrowings Due within One Year Secured and Unguaranteed Short-Term Borrowings Secured and Unguaranteed 3-1 Financial Condition: List of Interest-bearing Liabilities, Lender Share Due to the merger, lender formation largely expanded and trust banks newly joined Loans Breakdown Balance at Borrowing Date Lender End The Chuo Mitsui Trust and Banking Co., Ltd. 1,972,600 Aozora Bank, Ltd. 1,874,700 Mizuho Trust & Banking Co., Ltd. 1,874,700 August 31, 2010 Sumitomo Mitsui Banking Corporation 1,874,700 Tokyo-Mitsubishi UFJ, Ltd. 1,479,000 Resona Bank, Ltd. 1,479,000 Aozora Bank, Ltd. August 31, ,130,000 Musashino Bank, Ltd. September 30, ,600 Tokyo Star Bank, Limited June 30, ,250,000 Subtotal 30,454,300 Aozora Bank, Ltd. March 5, ,554,000 Aozora Bank, Ltd. 792,000 Sumitomo Mitsui Banking Corporation 990,000 The Norinchukin Bank 2,970,000 Resona Bank, Ltd. October 27, ,000 Nishi-Nippon City Bank, Ltd. 990,000 Sompo Japan Insurance Inc. 495,000 The Hokkaido Bank, Ltd. 198,000 Subtotal 11,979,000 Aozora Bank, Ltd. 5,940,000 October 31, 2007 Resona Bank, Ltd. 1,980,000 Aozora Bank, Ltd. 995,000 March 29, 2010 Resona Bank, Ltd. 995,000 Aozora Bank, Ltd. 2,970,000 Sumitomo Mitsui Banking Corporation October 27, ,000 Resona Bank, Ltd. 990,000 Aozora Bank, Ltd. 990,000 Sumitomo Mitsui Banking Corporation October 27, ,000 Resona Bank, Ltd. 990,000 Subtotal 17,830,000 Total 60,263,300 * Applicable interest rates as of November 30, (as of November 30, 2010, unit: thousand yen) Interest Rate (%) (Note) Repayment Date May 31, 2011 May 31, 2011 May 31, 2011 June 30, October 31, 2011 October 31, 2011 October 31, 2012 October 31, 2012 October 31, 2013 October 31, 2015 Description Lender Share 17th End 18th End REIT Bonds (as of May 31, 2010, unit: thousand yen) Lender Balance Share Aozora Bank, Ltd. 16,323, % Resona Bank, Ltd. 5,975, % Sumitomo Mitsui Banking Corporation 2,985, % The Norinchukin Bank 2,985, % Nishi-Nippon City Bank, Ltd. 995, % Sompo Japan Insurance Inc. 497, % The Hokkaido Bank, Ltd. 199, % Total 29,959, % (as of November 30, 2010, unit: thousand yen) Lender Balance Share Aozora Bank, Ltd. 24,245, % Tokyo Star Bank, Limited 13,250, % Resona Bank, Ltd. 7,424, % Sumitomo Mitsui Banking Corporation 4,844, % The Norinchukin Bank 2,970, % The Chuo Mitsui Trust and Banking Co., Ltd 1,972, % Mizuho Trust & Banking Co., Ltd. 1,874, % Tokyo-Mitsubishi UFJ, Ltd. 1,479, % Nishi-Nippon City Bank, Ltd. 990, % Musashino Bank, Ltd. 519, % Sompo Japan Insurance Inc. 495, % The Hokkaido Bank, Ltd. 198, % Total 60,263, % Bond name Second unsecured investment corporation bond Issue date Amount (thousand yen) Total 10,000,000 Applied coupon rate (%) Maturity rate October 31, ,000, October 31,

27 3-2 Financial Condition: Shift in Interest-bearing Liabilities, etc. As a result of the merger, interest-bearing liabilities outstanding became 70,263 million yen and LTV 45.8% Interest-Bearing Liabilities and LTV (billion yen) % 41.3% % % 48.9% Average Remaining Terms and Average Interest of Interest-Bearing Liabilities 39.1% % 44.4% 44.5% 44.6% % 38.3% IPO 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th ( ) Interest-bearing liabilities due after 1 year (maturity) Interest-bearing liabilities due within 1 year (maturity) % 42.4 (%) (Note 1) LTV = Interest-bearing liabilities / Total assets (Note 2) Total asset figures used to calculate LTV for after IPO (as of property acquisition on March 10, 1995) has not been audited. (year, %) % % % % % % 3.0yrs 1.5yrs 1.9yrs 1.3yrs 1.0yrs 3.3yrs 2.7yrs 2.2yrs 1.7yrs 1.8yrs 1.5yrs 1.4yrs 7th End May th End November th End May th End November th End May th End November % 13th End May 2008 Average remaining years to maturity % 14th End November % 15th End May % 1.931% 16th End November 2009 Average interest 17th End May % 18th End November

28 3-3 Financial Condition: Diversification of Refinance and Repayment Dates Successful in lengthening borrowing period and lowering borrowing rates Also successful in lowering interest on former JSR s loans, already starting to contribute to revenues Interest-Bearing Liabilities Outstanding by Maturity (million yen) 30,000 Short-Term Loans Long-term Loans Bond Refinance in 18th Of former CIC s loans, we refinanced term loans of 8,415 million yen and 6,931 million yen that have reached their repayment dates during the current period and diversified it to 7,425 million yen (one year), 4,950 million yen (three year) and 2,970 million yen (five years). As for former JSR s loans, we repeatedly negotiated with the group of former JSR s banks at the time of refinancing before the merger. As a result, the following reductions in interest rates were achieved: Loan Amount (thousand yen) After revision Before revision Remarks 20,000 7,425 Term Loan A 10,554, % 1.69% Term Loan B 6,130, % 2.19% -Lowered by 0.5% at refinance after merger -Lowered by 0.5% at refinance after merger 4,554 10,000 Term Loan C 519, % 1.89% -Lowered by 0.2% at refinance after merger 10,000 15,345 17,204 Maturities concentrate in May and June Refinancing for former JSR to be conducted for the first time since the merger. Based on track records, we will aim to lengthen and equalize former JSR s debts as well, and lower their interest rates. 13,250 9,910 Average remaining years to maturity (year) Average interest (%) 0 4,950 2,970 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th Former CIC portion Former JSR portion Total

29 Ⅴ Forecasts and Growth Strategies for 19th

30 1 Forecasts for 19th Operations 19th (Dec 1, 2010-May 31, 2011) Forecast distribution per unit 1,425 yen (Unit: million yen) 18th 19th Forecast Variation Factor Operating revenues CIC (40), JSR 1,167 Operating expenses CIC 83, JSR 594, Selling, General and Administrative Expense 122 Operating profit Non-operating earnings Non-operating expenses (6.0) Ordinary profits Extraordinary profits ( ) Net profits (9876.0) Outstanding investment 695, ,897 - units at end of period (units) The forecast values are present values calculated based on certain conditions, and the actual net profit and distributions Distribution may vary per if unit conditions (yen) change. This forecast is also not a guarantee of the distribution amount. 1,375 1, th : June 1, 2010 November 30, th : December 1, 2010 May 31,

31 2 Growth Strategies With the growth foundation created with strengthened sponsor relationships and merger, further growth will be targeted External Growth Strategy Improve portfolio quality by replacing properties (consider applying negative goodwill to any loss on sale) Acquire excellent quality properties by utilizing sponsor pipeline Internal Growth Strategy Integration of platform, advantage of scale Efforts toward improvement in financial base Improve debt composition Reduce financial costs Equalization and lengthening of borrowing period Brand Strategy Strengthening IR activities Standardizing property names Commitment by Heiwa Real Estate External Growth Strategy: Supplying properties, underwriting assets for sale, warehousing Internal Growth Strategy: Leasing, value-up support (such as energy conservation renewal work) 30

32 Ⅵ Appendix

33 1 Balance Sheet Assets 17th 18th H H Variation Category Amount Share Share Share Amount Amount (%) (%) (%) (Assets) I. Current assets Cash and deposits 4,098,754 4,715, ,929 Cash and deposits in trust 2,915,488 4,781,784 1,866,296 Operating accounts receivables 24,780 55,527 30,747 Prepaid expenses 169, ,525 3,718 Deferred tax assets 21 - (21) Other 97, (96,235) Allowance for doubtful accounts - (8,432) (8,432) Total current assets 7,305, ,718, ,413, II. Noncurrent assets 1. Property, plant and equipment * 1 Buildings 13,423,596 13,227,953 (195,643) Structures 53,018 49,996 (3,022) Machinery and equipment 141, ,304 (2,250) Tools, furniture and fixture 40,164 39,591 (573) Land 37,091,822 37,091,822 0 Buildings in trust 11,108,714 29,882,779 18,774,065 Structures in trust 45, , ,062 Machinery and equipment in trust 78, , ,780 Tools, furniture and fixtures in trust 17, , ,087 Land in trust 33,373,413 60,558,673 27,185,260 Total property, plant and equipment 95,374, ,752, ,377, Intangible assets Leasehold right 715, ,719 0 Leasehold rights in trust 843, ,410 0 Other 172 6,214 6,042 Total intangible assets 1,559, ,565, , Investment and other assets Guarantee deposits 10,000 20,000 10,000 Long-term prepaid expenses 128, ,273 73,349 Other 40,263 98,053 57,789 Total investments and other assets 179, , , Total noncurrent assets 97,113, ,637, ,524, III. Deferred assets Investment unit issuance 14,861 12,256 (2,604) Investment corporation bond issuance costs 27,318 21,666 (5,652) Total deferred assets 42, ,922 0 (8,256) (20) Total assets 104,461, ,390, ,929, Figures below a thousand yen have been rounded off. Percentage are shown with figures rounded to the tenth place. (unit: thousand yen) Liabilities and Unitholders Equity (Liabilities) Category I. Current liabilities II. Noncurrent liabilities (Net assets) I. Unitholders' equity 17th Amount H th H Variation Share Share Share Amount Amount (%) (%) (%) Operating accounts payable 213, ,817 59,552 Short-term loans payable 8,457,500 30,454,300 21,996,800 Current portion of long-term loans payable 6,965,000 11,979,000 5,014,000 Accrued expenses 535, , ,437 Income tax payable (74) Accrued consumption taxes - 36,408 36,408 Advances received 411, , ,716 Other 7,742 26,276 18,533 Total current liabilities 16,590, ,265, ,674, Investment corporation bond 10,000,000 10,000,000 - Long-term loans payable 14,537,000 17,830,000 3,293,000 Tenant leasehold and security deposits Tenant leasehold and security deposits in trust 1,508,951 1,484,512 (24,439) 1,717,115 2,123, ,459 Total noncurrent liabilities 27,763, ,438, ,675, Total liabilities 44,353, ,703, ,349, Unitholders' capital * 2 59,412, ,412, Surplus Investment surplus - 7,406,652 7,406,652 Unappropriated retained earnings 694, ,868, ,173,647 1,464 Total surplus 694, ,275, ,173, Total unitholders' equity 60,107, ,687, ,173, Total net assets * 3 60,107, ,687, ,173, Total liabilities and net assets 104,461, ,390, ,938, *1 The cumulated depreciation is directly subtracted from property, plant and equipment Cumulated depreciation: 17th fiscal period: 3,805,974 thousand yen; 18th 4,389,872 thousand yen *2 Total outstanding investment units 17th fiscal period: 131,891 units; 18th fiscal period: 695,897 units *3 Net assets per investment unit 17th fiscal period: 455,733 yen; 18th fiscal period: 111,636 yen (unit: thousand yen) 32

34 2 Profit and Loss Statement Category 1. Operating revenue *1 2. Operating expenses 16th (Jun 1, 2009-Nov 30, 2009) Amount 17th (Dec 1, 2009-May 31, 2010) Rent revenue-real estate 2,565,203 2,349,032 3,114,095 Other lease business revenue 275, , ,782 Gain on sales of real estate properties 49, Share (%) Amount Share (%) (unit: thousand yen) 18th (Jun 1, 2010-Nov 30, 2010) Compensation for Property Removals - 2,889, ,923 2,830, ,374, Expenses related to rent business *2 1,195,329 1,203,593 1,401,208 Loss on sales of real estate properties 369, Asset management fee 280, , ,461 Asset custody fee 20,563 19,135 19,406 Administrative service fee 27,824 31,116 34,583 Directors compensation 4,800 7,645 7,800 Audit fee 9,200 8,300 8,300 Other operating expenses 65,665 1,974, ,920 1,611, ,992 1,888, Operating income 915, ,218, ,486, Non-operating income 4. Non-operating expenses Interest income 2,292 2, Other 1,836 4, ,732 3, ,532 6, Interest expense 190, , ,316 Borrowing related expenses 58, , ,514 Interest expenses on investment corporation bond Amortization of investment unit issuance expenses 247, , ,500 23,608 5,652 5,652 New investment unit issuance costs 9,783 11,906 3,218 Other 1, , , , , , Ordinary income 388, , , Extraordinary profit Gain on negative goodwill ,026,646 10,026,646 Income before income taxes 388, , ,869, Income taxes-current 605 1, Income taxes-deferred (21) 1, Net income 387, , ,868, Retained earning brought forward Unappropriated retained earnings 387, ,874 10,868,521 Amount Share (%) * Figures below a thousand yen have been rounded off. Percentage are shown with figures rounded to the tenth place *1 The management days of each period are 183 days for the 16th fiscal period, 182 days for the 17th fiscal period and 183 days for the 18th fiscal period. *2 The depreciation costs of this total are 506,399 thousand yen for the 16th fiscal period, 491,001 thousand yen for the 17th fiscal period and 584,908 thousand yen for the 18th fiscal period. 33

35 3 Profits from Rental Business <Total> Rents and common expenses 16th 17th 18th 2,565,203 2,349,032 3,114,095 Other income 275, , ,782 Rental business income total 2,840,259 2,703,214 3,374,878 PM fees 58,754 55,032 70,309 FM fees 155, , ,608 Public charges and taxes 184, , ,159 Maintenance and repair fees 75,249 81,969 83,910 Other expenses 215, , ,311 Rental business expenses total 688, , ,299 NOI 2,151,329 1,990,623 2,558,578 Depreciation 506, , ,908 Rental business profit 1,644,930 1,499,621 1,973,670 <Office> Rents and common expenses 16th 17th 18th 1,490,337 1,313,756 1,464,318 Other income 197, , ,833 Rental business income total 1,687,696 1,578,720 1,628,151 PM fees 35,882 29,666 31,582 FM fees 99,185 93,842 97,254 Public charges and taxes 118, , ,225 Maintenance and repair fees 35,873 34,945 41,951 Other expenses 155, , ,325 Rental business expenses total 444, , ,338 NOI 1,242,905 1,183,784 1,179,812 Depreciation 230, , ,717 Rental business profit 1,012, , ,094 <Residence> Rents and common expenses 16th 17th 18th 1,074,865 1,035,276 1,600,191 Other income 77,697 89,217 96,949 Rental business income total 1,152,563 1,124,494 1,697,141 PM fees 22,872 25,365 38,727 FM fees 56,356 55,881 83,354 Public charges and taxes 65,945 65,379 67,934 Maintenance and repair fees 39,376 47,023 41,959 Other expenses 59, , ,092 Rental business expenses total 244, , ,068 NOI 908, ,838 1,330,072 Depreciation 275, , ,505 Rental business profit 632, , ,566 <Hotel> Rents and common expenses Other income 16th 17th 18th 49,586 Rental business income total 49,586 PM fees FM fees Public charges and taxes Maintenance and repair fees Other expenses 892 Rental business expenses total (unit: thousand yen) NOI 48,693 Depreciation 11,685 Rental business profit 37,

36 4 Portfolio Map Central 5 wards of Tokyo 34 properties billion yen Shinjuku Ward Shinjuku Stn. Chiyoda Ward Office Residential Hotel Tokyo s 23 wards and Surrounding Area 34 properties billion yen Nerima Ward Suginami Ward Setagaya Ward Nakano Ward Itabashi Ward Kita Ward Toshima Ward Bunkyo Ward Adachi Ward Arakawa Ward Taito Ward Sumida Ward Katsushika Ward Koto Ward Edogawa Ward Tokyo Stn. Meguro Ward Shinagawa Ward Shibuya Ward Ota Ward Chuo Ward Saitama Pref. Shibuya Stn. Minato Ward Tokyo Kanagawa Pref. Chiba Pref. Shinagawa Stn. (Note) Amounts are indicated based on acquisition price Other areas 22 properties billion yen 35

37 5 Portfolio Overview and Performance (Office) Property Names Of-01 Asahi Life Insurance Gotanda Building Of-05 Suitengu Heiwa Building Of-06 NV Tomioka Building Of-07 Hamamatsucho SS Building Of-08 Kokusai Tameike Building Addresses Shinagawa Ward, Tokyo Chuo Ward, Tokyo Koto Ward, Tokyo Minato Ward, Tokyo Minato Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 2, , , , , Constructed May, 1980 August, 1991 December, 1990 December, 1991 February, 1992 Occupancy Rate (%) Acquisition Prices (mm yen) 1,290 1,550 2,500 1,530 2,700 Appraisal Prices (mm yen) 1,393 1,378 2,560 1,560 2,620 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 56,171 53,345 58,417 51,805 89,346 83,105 53,422 49,934 62,695 65,487 Other income 4,333 4,243 4,338 4,852 9,216 9,878 5,979 6,351 7,249 8,948 Rental business income total 60,504 57,588 62,755 56,658 98,563 92,984 59,401 56,285 69,945 74,436 PM fees 1,738 1,612 1,937 1,309 2,766 2,512 1,614 1,593 1,283 1,422 FM fees 3,900 3,900 4,932 4,932 8,220 8,220 2,713 2,713 3,105 2,991 Public charges and taxes 4,833 5,280 5,102 5,223 6,125 6,382 6,710 7,281 7,436 7,660 Maintenance and repair fees 1,293 1, , ,154 3,494 Other expenses 4,547 5,366 5,723 7,113 9,035 10,212 4,744 5,936 7,033 9,578 Rental business expenses total 16,311 17,279 18,645 20,807 26,174 28,086 16,711 18,139 22,014 25,146 NOI 44,193 40,309 44,110 35,851 72,388 64,897 42,689 38,146 47,930 49,289 Depreciation 5,771 5,829 7,714 7,813 15,488 15,006 5,994 6,094 5,406 5,473 Rental business profit 38,421 34,479 36,395 28,037 56,900 49,891 36,694 32,051 42,524 43,815 36

38 5 Portfolio Overview and Performance (Office) Property Names Of-09 Grace Building Sengakujimae Of-10 Nisso Dai 15 Building Of-11 Nihonbashi Daiichi Building Of-12 Hatchobori SF Building Of-13 Shibuya AX Hills Addresses Minato Ward, Tokyo Yokohama City, Kanagawa Prefecture Chuo Ward, Tokyo Chuo Ward, Tokyo Shibuya Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 2, , , , , Constructed June, 1994 February, 1993 March, 1988 October, 1991 March, 2006 Occupancy Rate (%) Acquisition Prices (mm yen) 1,220 1,550 2,150 3,060 1,860 Appraisal Prices (mm yen) 1,440 1,450 2,050 2,330 1,440 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 49,854 49,361 47,842 47,842 68,034 64,424 71,329 66,707 27,628 24,861 Other income 13,744 9,337 3,480 3,480 7,936 8,362 9,954 6,706 4,666 2,966 Rental business income total 63,599 58,699 51,322 51,322 75,971 72,786 81,284 73,414 32,294 27,827 PM fees 1,530 1, ,184 2,009 1,313 1, FM fees 3,180 3, ,677 3,687 4,998 4,998 2,280 2,280 Public charges and taxes 2,533 2,546 5,199 5,189 5,078 5,188 8,558 8,701 2,824 2,960 Maintenance and repair fees ,948 1, , Other expenses 10,827 11, ,143 7,896 6,307 6,782 2,613 3,443 Rental business expenses total 18,630 19,598 5,823 5,459 19,031 19,833 21,836 23,520 8,897 9,694 NOI 44,968 39,100 45,498 45,862 56,940 52,953 59,447 49,893 23,397 18,132 Depreciation 7,748 7,788 19,659 15,416 9,305 9,715 10,769 9,637 4,629 4,626 Rental business profit 37,219 31,311 25,839 30,446 47,635 43,237 48,678 40,256 18,767 13,505 37

39 5 Portfolio Overview and Performance (Office) Property Names Of-14 KCA Building Of-15 Daiwa Nakameguro Building Of-16 Anwa Tsukasacho Building Of-17 Hatchobori MF Building Of-18 M2 Harajuku Addresses Chiyoda Ward, Tokyo Meguro Ward, Tokyo Chiyoda Ward, Tokyo Chuo Ward, Tokyo Shibuya Ward, Tokyo Lot Area (m 2 ) , Total Floor Area (m 2 ) 1, , , , , Constructed November, 1987 February, 1988 October, 1990 January, 1988 January, 1970 Occupancy Rate (%) Acquisition Prices (mm yen) 1,730 2,870 1,385 1,110 3,418 Appraisal Prices (mm yen) 1,093 2,220 1, ,135 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 32,202 33,254 65,730 70,056 38,378 35,930 31,969 29,320 34, ,122 Other income ,061 17,473 4,237 5,453 2,547 2, ,221 12,701 Rental business income total 32,682 33,417 82,791 87,530 42,615 41,383 34,516 31, , ,824 PM fees ,125 1, ,270 3,207 FM fees 4,502 4,502 4,788 4,788 1,585 1,585 1,500 1,500 2,086 2,031 Public charges and taxes 3,896 4,070 6,878 7,221 2,381 2,444 2,722 2,820 5,433 4,110 Maintenance and repair fees ,984 3,689 1,426 1, ,535 1, Other expenses 1,268 1,433 9,003 9,038 3,208 3,459 2,869 3,365 5,707 18,119 Rental business expenses total 10,231 10,603 28,779 25,917 9,181 9,190 7,809 9,637 16,247 27,869 NOI 22,451 22,814 54,012 61,612 33,433 32,193 26,706 22, ,851 88,955 Depreciation 4,811 4,408 17,616 16,305 11,762 11,072 4,594 4,429 5,420 7,677 Rental business profit 17,639 18,405 36,396 45,307 21,671 21,120 22,112 17, ,430 81,277 38

40 5 Portfolio Overview and Performance (Office) Property Names Of-19 Sannomiya Sanwa Toyo Building Of-20 Funabashi Face Building Of-21 Adesso Nishiazabu Of-22 CIC Toranomon Building Of-23 Aria Ikebukuro Addresses Kobe City, Hyogo Prefecture Funabashi City, Chiba Prefecture Minato Ward, Tokyo Minato Ward, Tokyo Toshima Ward, Tokyo Lot Area (m 2 ) 1, Total Floor Area (m 2 ) 8, , , , Constructed November, 1990 April, 2003 October, 2003 November, 1990 December, 1993 Occupancy Rate (%) Acquisition Prices (mm yen) 8,390 3, ,675 1,314 Appraisal Prices (mm yen) 6,230 3, ,322 1,060 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 200, , , ,035 11,277 12,783 40,392 34,277 34,611 30,973 Other income 26,841 30,121 6,077 6, ,748 2,607 4,926 4,525 Rental business income total 227, , , ,385 11,926 13,646 43,141 36,885 39,538 35,498 PM fees 3,149 3,012 2,302 2, , FM fees 19,617 19,617 14,966 14, ,104 1,104 1,302 1,302 Public charges and taxes 15,090 15,312 8,088 8, ,769 3,904 2,200 2,270 Maintenance and repair fees 10,079 17, ,479 3,098 2,095 Other expenses 18,768 21,663 10,379 10,693 1,579 2,305 2,766 3,124 3,954 5,309 Rental business expenses total 66,705 77,268 35,826 36,054 3,167 4,238 8,979 10,564 11,528 11,833 NOI 160, ,322 90,504 90,331 8,759 9,408 34,161 26,320 28,010 23,665 Depreciation 30,792 28,209 20,940 20,940 2,200 2,200 4,787 4,897 6,313 6,343 Rental business profit 130, ,112 69,564 69,391 6,558 7,207 29,374 21,422 21,696 17,321 39

41 5 Portfolio Overview and Performance (Office) Property Names Of-24 CIC Yushima Building Of-25 Kayabacho HEIWA Building Addresses Bunkyo Ward, Tokyo Chuo Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 2, , Constructed July, 1989 April, 1992 Occupancy Rate (%) Acquisition Prices (mm yen) 1,434 4,798 Appraisal Prices (mm yen) 1,310 5,080 (unit: thousand yen) 17th 18th 17th 18th Rents and common expenses 48,299 48,410 70, ,809 Other income 5,281 5,939 2,991 10,093 Rental business income total 53,580 54,349 73, ,903 PM fees 1,401 1,402 1,868 3,614 FM fees 2,864 2,864 1,918 5,490 Public charges and taxes 2,610 2, Maintenance and repair fees Other expenses 8,098 9,250 3,470 11,423 Rental business expenses total 15,143 16,299 7,257 21,295 NOI 38,437 38,050 66, ,608 Depreciation 7,451 7,547 5,641 11,282 Rental business profit 30,985 30,502 60, ,325 (Note) Transferred a part of the land on October 6,

42 5 Portfolio Overview and Performance (Residence) Property Names Re-03 Concord Ichikawa Re-05 CIC Meguro Re-09 Regulus Higashikasai Re-11 Mirum Wakabayashi Koen Re-12 Mirum Himonya Addresses Ichikawa City, Chiba Meguro Ward, Tokyo Edogawa Ward, Tokyo Setagaya Ward, Tokyo Meguro Ward, Tokyo Lot Area (m 2 ) , Total Floor Area (m 2 ) , , , Constructed March, 2003 April, 2003 November, 2002 February, 2004 February, 2004 Occupancy Rate (%) Acquisition Prices (mm yen) ,610 1,560 Appraisal Prices (mm yen) ,358 1,441 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 17,280 17,280 18,593 19,532 22,658 22, , ,666 41,458 42,845 Other income ,089 11,176 3,194 1,926 Rental business income total 17,301 17,280 19,086 20,085 23,344 23, , ,843 44,653 44,771 PM fees ,752 2,277 1,281 1,342 FM fees ,308 1, ,718 2,718 1,567 1,567 Public charges and taxes 1, ,083 1,078 1,370 1,356 5,176 7,144 1,944 2,724 Maintenance and repair fees , , ,722 3, Other expenses ,299 1,782 1,121 1,296 12,372 9,660 5,236 3,497 Rental business expenses total 3,878 3,274 6,546 5,080 4,335 3,476 27,740 24,840 10,645 9,854 NOI 13,423 14,005 12,540 15,004 19,008 19,847 82,989 92,002 34,007 34,917 Depreciation 2,593 2,593 3,002 3,002 3,720 3,760 22,267 22,289 7,300 7,312 Rental business profit 10,829 11,411 9,537 12,001 15,287 16,086 60,722 69,713 26,706 27,605 41

43 5 Portfolio Overview and Performance (Residence) Property Names Re-14 Main Stage Minami Azabu III Re-15 Cosmos Gracia Azabujuban Re-16Advantage Gakugeidaigaku Re-17 Hermitage Higashikanda Re-18 Hermitage Higashinihonbashi Addresses Minato Ward, Tokyo Minato Ward, Tokyo Meguro Ward, Tokyo Chiyoda Ward, Tokyo Chuo Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , Constructed April, 2004 January, 2005 March, 2005 June, 2005 June, 2005 Occupancy Rate (%) Acquisition Prices (mm yen) 1,370 1,260 1,000 1,100 1,210 Appraisal Prices (mm yen) 1,206 1, ,070 1,180 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 28,915 34,029 24,204 27,886 20,903 23,505 30,840 32,778 36,814 37,927 Other income 915 1,199 2,074 1,921 1,294 1, ,650 1,808 1,780 Rental business income total 29,830 35,229 26,278 29,808 22,198 24,511 31,801 34,428 38,622 39,707 PM fees 913 1,001 1, ,157 1,137 FM fees 1,159 1,158 1,386 1, ,547 1,547 1,589 1,589 Public charges and taxes 2,106 2,093 1,892 1, ,683 1,658 1,951 1,924 Maintenance and repair fees 1,858 1,617 2,128 1, ,152 1, Other expenses 5,525 4,354 5,334 4,330 3,332 2,720 3,139 2,299 4,145 2,943 Rental business expenses total 11,562 10,226 12,408 10,257 5,994 5,528 8,468 7,660 9,349 8,295 NOI 18,267 25,003 13,869 19,550 16,203 18,982 23,333 26,767 29,272 31,412 Depreciation 5,083 5,127 8,731 8,731 4,903 4,982 10,710 10,716 11,501 11,511 Rental business profit 13,184 19,875 5,138 10,819 11,300 14,000 12,622 16,051 17,771 19,901 (Note 1) The name has been changed from FLEG Meguro as of November 30, 2009 (Note 2) Transferred on July 28,

44 5 Portfolio Overview and Performance (Residence) Property Names Re-19 Hermitage Nerima Re-20 Landstage Shirokanetakanawa Re-21Urbyl Berger Meidaimae Re-22 Joy City Nihonbashi Re-23 Grefas Kamishakujii Addresses Nerima Ward, Tokyo Minato Ward, Tokyo Setagaya Ward, Tokyo Chuo Ward, Tokyo Nerima Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , , Constructed May, 2005 August, 2005 June, 2005 May, 2005 May, 2006 Occupancy Rate (%) Acquisition Prices (mm yen) 690 4,030 1,070 1, Appraisal Prices (mm yen) 676 3, (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 23,199 22,392 97, ,608 26,392 27,845 30,152 30,296 30,455 31,283 Other income 531 1,263 11,296 8,499 2, , ,746 2,885 Rental business income total 23,731 23, , ,107 28,744 28,832 32,203 30,802 32,201 34,168 PM fees ,117 3, FM fees 1,362 1,362 4,825 4,825 1,248 1,248 1,338 1,338 1,461 1,461 Public charges and taxes 1,339 1,320 4,283 4,189 1,624 1,612 1,461 1,448 1,210 1,921 Maintenance and repair fees ,205 3,533 2, , Other expenses 1,973 1,562 10,820 7,026 5,082 1,288 5,541 3,268 2,936 1,619 Rental business expenses total 5,624 5,708 26,251 22,843 10,959 5,569 10,668 7,935 7,272 6,812 NOI 18,106 17,947 82,594 89,264 17,785 23,262 21,534 22,866 24,928 27,356 Depreciation 6,730 6,735 23,984 23,984 5,239 5,239 4,847 4,859 5,691 5,691 Rental business profit 11,376 11,212 58,609 65,279 12,545 18,023 16,686 18,007 19,236 21,664 43

45 5 Portfolio Overview and Performance (Residence) Property Names Re-24 T&G Kinshicho Mansion Re-25 Glenpark Ginza EAST Re-26 Glenpark Shinyokohama Re-27 Glenpark Ikedayama Re-28 Rune Higashiterao Addresses Sumida Ward, Tokyo Chuo Ward, Tokyo Yokohama City, Kanagawa Prefecture Shinagawa Ward, Tokyo Yokohama City, Kanagawa Prefecture Lot Area (m 2 ) , Total Floor Area (m 2 ) 1, , , , , Constructed March, 2005 March, 2005 September, 2006 July, 2003 April, 1992 Occupancy Rate (%) Acquisition Prices (mm yen) 1,100 5,940 3,350 1,640 4,500 Appraisal Prices (mm yen) 985 4,040 2, ,830 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 30,636 31,461 88,293 93,247 68,114 76,781 21,179 20, , ,661 Other income 1,190 1,526 6,484 4,936 7,669 8, ,831 14,312 12,274 Rental business income total 31,826 32,987 94,777 98,184 75,784 85,497 22,035 22, , ,935 PM fees ,373 1,601 1,098 1, ,735 1,870 FM fees 1,320 1,320 4,200 4,200 3,394 3,394 1,309 1,309 13,452 13,452 Public charges and taxes 1,556 1,543 4,664 4,577 3,297 3,226 1,794 1,817 12,289 12,299 Maintenance and repair fees ,796 1,486 1, , ,483 5,991 Other expenses 2,262 1,642 10,727 9,660 11,155 5,796 4,198 5,539 9,177 5,959 Rental business expenses total 6,583 6,123 22,761 21,526 19,985 14,239 9,670 9,450 48,138 39,572 NOI 25,243 26,863 72,016 76,657 55,798 71,257 12,364 12,738 70,788 84,362 Depreciation 5,294 5,294 27,618 27,636 20,572 20,577 6,226 6,239 45,688 41,694 Rental business profit 19,948 21,569 44,397 49,021 35,225 50,680 6,138 6,499 25,099 42,667 44

46 5 Portfolio Overview and Performance (Residence) Property Names Re-29 Residence Mukogaoka Re-30 Residence Hiagashimagome Re-31 Glenpark Gakugeidaigaku Re-33 Advantage Kameido Re-34 Vante Tanashi Addresses Bunkyo Ward, Tokyo Ota Ward, Tokyo Meguro Ward, Tokyo Koto Ward, Tokyo Nishi Tokyo City, Tokyo Lot Area (m 2 ) 1, , , Total Floor Area (m 2 ) 3, , , , , Constructed January, 2000 August, 2001 January, 2005 January, 2008 March, 1989 Occupancy Rate (%) Acquisition Prices (mm yen) 2,350 1,630 1,650 1, Appraisal Prices (mm yen) 1,600 1,140 1, (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 48,521 51,198 35,143 37,380 27,907 28,624 34,710 33,597 26,097 28,583 Other income 4,540 3,551 5,288 4, ,524 5, ,923 2,154 Rental business income total 53,062 54,749 40,431 41,516 28,773 31,148 40,279 33,672 29,020 30,738 PM fees , FM fees 2,132 2,132 1,170 1,170 1,410 1,410 1,440 1,440 2,154 2,154 Public charges and taxes 3,883 3,857 3,380 3,392 1,437 1,423 1,252 1,229 2,510 2,506 Maintenance and repair fees 1,009 1,447 2, , ,198 2,723 Other expenses 4,043 2,062 3,225 2,200 2,860 4,069 3,700 1,051 2,981 1,673 Rental business expenses total 11,835 10,357 10,425 8,344 7,457 7,852 7,423 4,717 11,663 9,933 NOI 41,227 44,392 30,005 33,172 21,316 23,296 32,855 28,955 17,356 20,805 Depreciation 12,045 12,023 11,467 11,296 6,488 6,494 5,891 5,891 8,573 8,553 Rental business profit 29,181 32,368 18,537 21,875 14,827 16,801 26,964 23,063 8,783 12,251 45

47 5 Portfolio Overview and Performance (Residence) Property Names Re-35 Single-residence Shiba-koen Re-36 Single-residence Mita Re-37 Single-residence Takanawa Re-38 La Residence de Shirokanedai Re-39 Single-residence Ginzahigashi Addresses Minato Ward, Tokyo Minato Ward, Tokyo Minato Ward, Tokyo Minato Ward, Tokyo Chuo Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , , Constructed August, 2003 March, 2004 February, 2003 February, 2004 February, 1999 Occupancy Rate (%) Acquisition Prices (mm yen) 836 1, ,460 Appraisal Prices (mm yen) 836 1, ,460 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 8,738 12,184 7,599 8,511 16,194 Other income Rental business income total 9,492 12,242 7,738 8,511 16,743 PM fees FM fees Public charges and taxes Maintenance and repair fees Other expenses , Rental business expenses total ,464 1,493 2,284 NOI 8,610 11,243 5,274 7,017 14,459 Depreciation 1,565 2,116 1,510 1,064 2,664 Rental business profit 7,044 9,126 3,764 5,953 11,795 46

48 5 Portfolio Overview and Performance (Residence) Property Names Re-40 Single-residence Hatchobori II Re-41 Single-residence Hatchobori III Re-42 Single-residence Ginza Re-43 TOUR JAUNE Komazawa-koen Re-44 Single-residence Umeda TOWER Addresses Chuo Ward, Tokyo Chuo Ward, Tokyo Chuo Ward, Tokyo Setagaya Ward, Tokyo Osaka City, Osaka Lot Area (m 2 ) , Total Floor Area (m 2 ) 3, , , , , Constructed January, 2002 January, 2004 July, 2004 January, 2001 August, 2003 Occupancy Rate (%) Acquisition Prices (mm yen) 1, ,520 1,920 Appraisal Prices (mm yen) 1, ,510 1,920 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 19,457 8,879 10,342 67,205 27,772 Other income 1, ,446 1,191 Rental business income total 20,627 9,105 10,442 69,652 28,963 PM fees , FM fees ,418 2,711 Public charges and taxes Maintenance and repair fees , Other expenses 1,367 1, ,431 1,653 Rental business expenses total 3,220 2,322 2,280 17,269 5,385 NOI 17,407 6,782 8,162 52,383 23,578 Depreciation 4,161 2,466 2,733 8,240 7,898 Rental business profit 13,245 4,316 5,429 44,143 15,680 47

49 5 Portfolio Overview and Performance (Residence) Property Names Re-45 Single-residence Nakanoshima Re-46 Single-residence Awaza Re-47 Single-residence Marunouchi Re-48 Single-residence Hirao Re-49 Single-residence Kawaramachi Nijo Addresses Osaka City, Osaka Osaka City, Osaka Nagoya City, Aichi Fukuoka City, Fukuoka Kyoto City, Kyoto Lot Area (m 2 ) , ,84 Total Floor Area (m 2 ) 1, , , , , Constructed June, 2001 March, 2002 February, 2004 March, 2003 February, 2005 Occupancy Rate (%) Acquisition Prices (mm yen) , Appraisal Prices (mm yen) , (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 6,651 8,372 8,503 24,285 6,540 Other income , Rental business income total 6,935 8,505 8,840 26,041 6,909 PM fees FM fees , Public charges and taxes Maintenance and repair fees Other expenses ,050 2, Rental business expenses total 1,229 1,231 2,022 5,137 1,424 NOI 5,705 7,273 6,817 20,903 5,484 Depreciation 1,261 2,007 2,520 5,745 1,252 Rental business profit 4,443 5,265 4,297 15,158 4,231 48

50 5 Portfolio Overview and Performance (Residence) Property Names Re-50 Single-residence Miami 6 Jyo Re-51 Single-residence Tenjinminami Re-52 Single-residence Tenjinhigashi Re-53 Single-residence Shijyo Kawaramachi Re-54 La Residence de Sendagi Addresses Sapporo City, Hokkaido Fukuoka City, Fukuoka Fukuoka City, Fukuoka Kyoto City, Kyoto Bunkyo Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , , Constructed March, 2004 February, 1998 August, 2005 March, 2007 February 2006 Occupancy Rate (%) Acquisition Prices (mm yen) , Appraisal Prices (mm yen) , (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 3,515 9,310 7,692 23,152 9,630 Other income ,383 - Rental business income total 3,639 9,911 8,249 25,536 9,630 PM fees FM fees , Public charges and taxes Maintenance and repair fees Other expenses , Rental business expenses total 1,001 2,228 2,046 4,412 1,057 NOI 2,638 7,682 6,203 21,123 8,572 Depreciation 1,001 1,255 2,206 4,030 1,265 Rental business profit 1,636 6,426 3,996 17,093 7,307 49

51 5 Portfolio Overview and Performance (Residence) Property Names Re-55 Single-residence Sendagi Re-56 Single-residence Komazawa-koen Re-57 Single-residence Musashikoyama Re-58 Single-residence Kokubunji Re-59 Single-residence Hisayadori Addresses Bunkyo Ward, Tokyo Setagaya Ward, Tokyo Shinagwa Ward, Tokyo Kokubunji City, Tokyo Nagoya City, Aichi Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , , Constructed February, 2006 July, 2006 November, 2006 January, 2006 March, 2006 Occupancy Rate (%) Acquisition Prices (mm yen) ,080 Appraisal Prices (mm yen) ,080 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 10,483 6,334 9,252 10,358 14,981 Other income Rental business income total 10,484 6,766 9,732 10,632 15,268 PM fees FM fees Public charges and taxes Maintenance and repair fees Other expenses 343 1,988 1, Rental business expenses total 1,357 2,683 2,181 1,126 1,828 NOI 9,126 4,082 7,551 9,506 13,439 Depreciation 1,458 1,139 1,212 1,455 2,138 Rental business profit 7,668 2,943 6,339 8,050 11,300 50

52 5 Portfolio Overview and Performance (Residence) Property Names Re-60 Single-residence Karasuma Kuramaguchi Re-61 Single-residence Nishishinjuku WEST Re-62 Single-residence Nishishinjuku EAST Re-63 Single-residence Higashishinjuku Re-64 Single-residence Higashishinsaibashi Addresses Kyoto City, Kyoto Shinjuku Ward, Tokyo Shinjuku Ward, Tokyo Shinjuku Ward, Tokyo Osaka City, Osaka Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , , Constructed March, 2006 March, 2006 March, 2006 March, 2007 September, 2006 Occupancy Rate (%) Acquisition Prices (mm yen) 572 1,990 1,170 1, Appraisal Prices (mm yen) 572 1,990 1,170 1, (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 6,785 20,872 12,584 15,681 7,454 Other income Rental business income total 6,954 21,233 12,798 15,697 7,586 PM fees FM fees , Public charges and taxes Maintenance and repair fees Other expenses 406 1, Rental business expenses total 951 3,642 1,954 2,523 1,279 NOI 6,002 17,590 10,844 13,174 6,306 Depreciation 1,165 2,419 1,527 2, Rental business profit 4,837 15,171 9,316 10,840 5,377 51

53 5 Portfolio Overview and Performance (Residence) Property Names Re-65 Single-residence Kitayobancho Re-66 Single-residence Atagobashi Re-67 Single-residence Kyudaibyoin-mae Re-68 Single-residence Asakusabashi Re-69 Single-residence Ichibancho Addresses Sendai City, Miyagi Sendai City, Miyagi Fukuoka City, Fukuoka Taito Ward, Tokyo Sendai City, Miyagi Lot Area (m 2 ) Total Floor Area (m 2 ) 2, , , , , Constructed January, 2007 January, 2007 January, 2007 September, 2006 February, 2007 Occupancy Rate (%) Acquisition Prices (mm yen) Appraisal Prices (mm yen) (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 11,425 9,929 5,797 8,339 11,290 Other income Rental business income total 11,899 10,462 6,060 8,375 11,832 PM fees FM fees Public charges and taxes Maintenance and repair fees Other expenses 1, Rental business expenses total 2,739 1,479 1,800 1,703 1,783 NOI 9,159 8,983 4,259 6,672 10,049 Depreciation 2,243 2,201 1,303 1,190 2,020 Rental business profit 6,915 6,782 2,955 5,482 8,028 52

54 5 Portfolio Overview and Performance (Residence) Property Names Re-70 Single-residence Higashinakano Re-71 Single-residence Minami 5 Jyo Re-72 Single-residence Waseda First Square Re-73 Single-residence Waseda Second Square Addresses Nakano Ward, Tokyo Sapporo City, Hokkaido Shinjuku Ward, Tokyo Shinjuku Ward, Tokyo Lot Area (m 2 ) Total Floor Area (m 2 ) 1, , , , Constructed February, 2007 January, 2007 May, 2007 May, 2007 Occupancy Rate (%) Acquisition Prices (mm yen) , Appraisal Prices (mm yen) , (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 10,255 5,551 25,448 10,392 Other income , Rental business income total 10,640 5,878 26,460 10,479 PM fees FM fees 428-1, Public charges and taxes Maintenance and repair fees Other expenses ,969 1,026 Rental business expenses total 1, ,876 1,717 NOI 9,023 4,933 22,584 8,762 Depreciation 1,446 1,213 2,761 1,135 Rental business profit 7,577 3,720 19,822 7,627 53

55 5 Portfolio Overview and Performance (Hotel) Property Names Ho-01 Super Hotel Osaka Tennoji Ho-02 Super Hotel Kyoto Karasumagojyo Ho-03 Super Hotel Saitama Omiya Ho-04 Super Hotel Sendai Hirose-dori Addresses Osaka City, Osaka Kyoto City, Kyoto Saitama City, Saitama Sendai City, Miyagi Lot Area (m 2 ) Total Floor Area (m 2 ) 2, , , , Constructed January, 2004 January, 2004 July, 2006 January, 2007 Occupancy Rate (%) Acquisition Prices (mm yen) 1, ,050 1,150 Appraisal Prices (mm yen) 1, ,050 1,150 (unit: thousand yen) 17th 18th 17th 18th 17th 18th 17th 18th Rents and common expenses 12,540 10,394 11,912 14,740 Other income Rental business income total 12,540 10,394 11,912 14,740 PM fees FM fees Public charges and taxes Maintenance and repair fees Other expenses Rental business expenses total NOI 12,325 10,184 11,680 14,503 Depreciation 2,771 2,317 2,793 3,802 Rental business profit 9,553 7,867 8,886 10,701 54

56 6 Property Acquisition Routes (As of November 30, 2010) Acquisition Route Property Name Acquisition Price (mm yen) Investment Ratio (%) Acquisition Route Property Name Acquisition Price (mm yen) Investment Ratio (%) JSR Re-35 Single-residence Shiba-koen Re-36 Single-residence Mita 1, Re-37 Single-residence Takanawa Re-38 La Residence de Shirokanedai Re-39 Single-residence Ginzahigashi 1, Re-40 Single-residence Hatchobori II 1, Re-41 Single-residence Hatchobori III Re-42 Single-residence Ginza Re-43 TOUR JAUNE Komazawa-koen 6, Re-44 Single-residence Umeda TOWER 1, Re-45 Single-residence Nakanoshima Re-46 Single-residence Awaza Re-47 Single-residence Marunouchi Re-48 Single-residence Hirao 1, Re-49 Single-residence Kawaramachi Nijo Re-50 Single-residence Minami 6 Jyo Re-51 Single-residence Tenjinminami Re-52 Single-residence Tenjinhigashi Re-53 Single-residence Shijy o Kawaramachi 1, Re-54 La Residence de Sendagi Re-55 Single-residence Sendagi Re-56 Single-residence Komazawa-koen Re-57 Single-residence Musashikoyama Re-58 Single-residence Kokubunji Re-59 Single-residence Hisayaodori 1, Re-60 Single-residence Karasuma Kuramaguchi Re-61 Single-residence Nishishinjuku WEST 1, Re-62 Single-residence Nishishinjuku EAST 1, Re-63 Single-residence Higashishinjuku 1, Re-64 Single-residence Higashishinsaibashi Re-65 Single-residence Kitayobancho Re-66 Single-residence Atagobashi Re-67 Single-residence Kyudaibyoin-mae Re-68 Single-residence Asakusabashi Re-69 Single-residence Ichibancho Re-70 Single-residence Higashinakano Re-71 Single-residence Minami 5 Jyo Re-72 Single-residence Waseda First Square 2, Re-73 Single-residence Waseda Second Square Ho-01 Super Hotel Osaka Tennoji 1, Ho-02 Super Hotel Kyoto Karasumagojyo Ho-03 Super Hotel Saitama Omiy a 1, Ho-04 Super Hotel Sendai Hirose-dori 1, properties in total 46, Heiwa Real Estate MSC (Morgan Stanley Capital K.K.) Other Of -05 Suitengu Heiwa Bldg 1, Of -07 Hamamatsucho SS Bldg 1, Of -25 Kayabacho Heiwa Bldg 4, Re-05 CIC Meguro Re-09 Regulus Higashikasai Re-14 Main Stage Minami Azabu III 1, Re-21 Urby l Berger Meidaimae 1, Re-22 Joy City Nihonbashi 1, properties in total 12, Of -12 Hatchobori SF Bldg 3, Of -13 Shibuya AX Hills 1, Of -14 KCA Bldg 1, Of -19 Sannomiy a Sanwa Toyo Bldg 8, Of -20 Funabashi Face Bldg 3, Re-25 Glenpark Ginza EAST 5, Re-26 Glenpark Shin-yokohama 3, Re-27 Glenpark Ikedayama 1, Re-28 Rune Higashiterao 4, Re-29 Residence Mukogaoka 2, Re-30 Residence Higashimagome 1, Re-31 Glenpark Gakugeidaigaku 1, properties in total 40, Of -01 Asahi Life Insurance Gotanda Building 1, Of -06 NV Tomioka Bldg 2, Of -08 Kokusai Tameike Bldg 2, Of -09 Grace Building Sengakujimae 1, Of -10 Nisso Dai 15 Bldg 1, Of -11 Nihonbashi Daiichi Bldg 2, Of -15 Daiwa Nakameguro Bldg 2, Of -16 Anwa Tsukasacho Bldg 1, Of -17 Hatchobori MF Bldg 1, Of -18 M2 Harajuku 3, Of -21 Adesso Nishiazabu Of -22 CIC Toranomon Bldg 1, Of -23 Aria Ikebukuro 1, Of -24 CIC Yushima Bldg 1, Re-03 Concord Ichikawa Re-11 Mirum Wakabayashi Koen 3, Re-12 Mirum Himonya 1, Re-15 Cosmos Gracia Azabujuban 1, Re-16 Advantage Gakugeidaigaku 1, Re-17 Hermitage Higashikanda 1, Re-18 Hermitage Higashinihonbashi 1, Re-19 Hermitage Nerima Re-20 Landstage Shirokane Takanawa 4, Re-23 Grefas Kamishakujii Re-24 T&G Kinshicho Mansion 1, Re-33 Advance Kameido 1, Re-34 Vante Tanashi properties in total 44, properties in portfolio total 143, (Note) Includes brokered properties 55

57 7 Historical Appraisal Values <Office> Property Names Acquisition Prices 13th 14th Appraisal Amount 15th 16th 17th 18th (A) 18th Book Value (B) (unit: million yen) Latent Profits and Profit/Loss Losses (A) Ratio (%) (B) Asahi Life Insurance Gotanda Of-01 Building 1,290 1,699 1,667 1,542 1,546 1,515 1,393 1, Of-05 Suitengu Heiwa Bldg 1,550 1,902 1,814 1,682 1,651 1,579 1,378 1,498 (120) (8.07) Of-06 NV Tomioka Bldg 2,500 2,590 2,670 2,580 2,560 2,560 2,560 2, Of-07 Hamamatsucho SS Bldg 1,530 1,780 1,780 1,700 1,640 1,600 1,560 1, Of-08 Kokusai Tameike Bldg 2,700 2,990 3,080 2,930 2,780 2,720 2,620 2,787 (167) (6.00) Of-09 Grace Building Sengakujimae 1,220 1,490 1,570 1,500 1,490 1,450 1,440 1, Of-10 Nisso Dai 15 Bldg 1,550 1,590 1,560 1,510 1,450 1,450 1,450 1, Of-11 Nihonbashi Daiichi Bldg 2,150 2,410 2,420 2,310 2,210 2,180 2,050 2,227 (177) (7.95) Of-12 Hatchobori SF Bldg 3,060 3,090 2,940 2,770 2,580 2,450 2,330 3,106 (776) (25.00) Of-13 Shibuya AX Hills 1,860 1,870 1,870 1,700 1,640 1,580 1,440 1,859 (419) (22.56) Of-14 KCA Bldg 1,730 1,668 1,429 1,207 1,173 1,130 1,093 1,740 (647) (37.19) Of-15 Daiwa Nakameguro Bldg 2,870 2,680 2,470 2,360 2,310 2,240 2,220 2,925 (705) (24.13) Of-16 Anwa Tsukasacho Bldg 1,385 1,380 1,290 1,190 1,130 1,100 1,090 1,357 (267) (19.68) Of-17 Hatchobori MF Bldg 1,110 1,180 1,150 1,090 1,040 1, ,128 (186) (16.50) Of-18 M2 Harajuku (*) 3,418 6,067 5,807 5,432 4,106 4,134 4,135 3, Of-19 Sannomiya Sanwa Toyo Bldg 8,390 7,670 7,170 6,610 6,410 6,330 6,230 8,509 (2,279) (26.78) Of-20 Funabashi Face Bldg 3,900 3,660 3,340 3,180 3,140 3,150 3,150 3,818 (668) (17.50) Of-21 Adesso Nishiazabu (160) (25.06) Of-22 CIC Toranomon Bldg 1,675 1,680 1,612 1,478 1,411 1,336 1,322 1,727 (405) (23.48) Of-23 Aria Ikebukuro 1,314 1,350 1,270 1,170 1,130 1,090 1,060 1,339 (279) (20.85) Of-24 CIC Yushima Bldg 1,434 1,470 1,450 1,390 1,340 1,320 1,310 1,476 (166) (11.26) Of-25 Kayabacho Heiwa Bldg 4,798 5,080 5,080 4, Total Office Building 52,074 50,842 48,973 45,891 43,280 47,536 46,332 52,435 (6,103) (11.64) (*) The acquisition price was adjusted from 4,760 mm yen due to partial sale of the asset on October 6, <Residential> Property Names Acquisition Prices 13th 14th Appraisal Amount 15th 16th 17th 18th (A) 18th Book Value (B) (unit: million yen) Latent Profits and Losses (A) (B) Profit/Loss Ratio (%) Re-03 Concord Ichikawa Re-05 CIC Meguro (131) (20.59) Re-09 Regulus Higashikasai Re-11 Mirum Wakabayashi Koen 3,610 4,059 3,810 3,644 3,480 3,399 3,358 3,402 (44) (1.29) Re-12 Mirum Himonya 1,560 1,737 1,649 1,474 1,474 1,434 1,441 1,508 (67) (4.45) Re-14 Main Stage Minami Azabu III 1,370 1,433 1,348 1,257 1,208 1,201 1,206 1,353 (147) (10.92) Re-15 Cosmos Gracia Azabujuban 1,260 1,275 1,249 1,209 1,168 1,081 1,060 1,248 (188) (15.06) Re-16 Advantage Gakugeidaigaku 1, (146) (15.05) Re-17 Hermitage Higashikanda 1,100 1,170 1,140 1,100 1,100 1,070 1,070 1, Re-18 Hermitage Higashinihonbashi 1,210 1,290 1,290 1,240 1,210 1,200 1,180 1, Re-19 Hermitage Nerima Re-20 Landstage Shirokane Takanawa 4,030 4,450 4,410 4,230 4,100 3,980 3,920 4,015 (95) (2.38) Re-21 Urbyl Berger Meidaimae 1,070 1,070 1, ,053 (173) (16.48) Re-22 Joy City Nihonbashi 1,130 1,120 1, ,120 (195) (17.44) Re-23 Grefas Kamishakujii (29) (3.11) Re-24 T&G Kinshicho Mansion 1,100 1,160 1, ,138 (153) (13.51) Re-25 Glenpark Ginza EAST 5,940 5,710 5,060 4,500 4,280 4,200 4,040 5,890 (1,850) (31.41) Re-26 Glenpark Shin-yokohama 3,350 2,880 2,650 2,470 2,370 2,330 2,330 3,309 (979) (29.60) Re-27 Glenpark Ikedayama 1,640 1,530 1,310 1,100 1,070 1, ,645 (647) (39.34) Re-28 Rune Higashiterao 4,500 3,630 3,290 3,070 2,970 2,900 2,830 4,410 (1,580) (35.83) Re-29 Residence Mukogaoka 2,350 1,990 1,820 1,720 1,650 1,600 1,600 2,350 (750) (31.93) Re-30 Residence Higashimagome 1,630 1,350 1,230 1,150 1,140 1,140 1,140 1,613 (473) (29.34) Re-31 Glenpark Gakugeidaigaku 1,650 1,300 1,170 1,090 1,070 1,050 1,050 1,645 (595) (36.20) Re-33 Advance Kameido 1,050 1,120 1,100 1,070 1, ,084 (97) (9.02) Re-34 Vante Tanashi (99) (10.80) <Residential> Property Names <Residential, Hotel> Acquisition Prices 13th 14th Appraisal Amount 15th 16th 17th 18th (A) 18th Book Value (B) (unit: million yen) Latent Profits and Losses (A) (B) Profit/Loss Ratio (%) Re-35 Single-residence Shiba-koen Re-36 Single-residence Mita 1,080 1,080 1, Re-37 Single-residence Takanawa Re-38 La Residence de Shirokanedai (0.05) Re-39 Single-residence Ginzahigashi 1,460 1,460 1, Re-40 Single-residence Hatchobori II 1,890 1,890 1, Re-41 Single-residence Hatchobori III Re-42 Single-residence Ginza Re-43 TOUR JAUNE Komazawa-koen 6,520 6,510 6,513 (3) (0.06) Re-44 Single-residence Umeda TOWER 1,920 1,920 1, Re-45 Single-residence Nakanoshima Re-46 Single-residence Awaza Re-47 Single-residence Marunouchi Re-48 Single-residence Hirao 1,780 1,780 1, Single-residence Kawaramachi Re-49 Nijo Re-50 Single-residence Minami 6 Jyo Re-51 Single-residence Tenjinminami Re-52 Single-residence Tenjinhigashi Single-residence Shijyo Re-53 Kawaramachi 1,820 1,830 1, Re-54 La Residence de Sendagi Re-55 Single-residence Sendagi Re-56 Single-residence Komazawa-koen Re-57 Single-residence Musashikoyama Re-58 Single-residence Kokubunji Appraisal Amount 15th 16th 18th Book Value (B) (unit: million yen) Latent Profits and Losses (A) (B) Acquisition 13th 14th 17th 18th Profit/Loss Property Names Prices Ratio (%) (A) Re-59 Single-residence Hisayaodori 1,080 1,080 1, Single-residence Karasuma Re-60 Kuramaguchi Single-residence Nishishinjuku Re-61 WEST 1,990 1,990 1, Single-residence Nishishinjuku Re-62 EAST 1,170 1,170 1, Re-63 Single-residence Higashishinjuku 1,360 1,360 1, Re-64 Single-residence Higashishinsaibashi Re-65 Single-residence Kitayobancho Re-66 Single-residence Atagobashi Single-residence Kyudaibyoinmae Re Re-68 Single-residence Asakusabashi Re-69 Single-residence Ichibancho Re-70 Single-residence Higashinakano Re-71 Single-residence Minami 5 Jyo Single-residence Waseda First Re-72 Square 2,090 2,100 2, Single-residence Waseda Second Re-73 Square Total Residential Buildings 87,473 42,779 40,895 38,296 37,129 36,216 78,443 86,707 (8,264) (9.53) Super Hotel Osaka Ho-01 Tennoji 1,080 1,080 1, Ho-02 Super Hotel Kyoto Karasumagojyo Super Hotel Saitama Ho-03 Omiya 1,050 1,050 1, Ho-04 Super Hotel Sendai Hirose-dori 1,150 1,150 1, Total Hotels 4,180 4,180 4, Total properties in portfolio 143,727 93,621 89,868 84,187 80,409 83, , ,311 (14,356) (10.02) 56

58 8 Historical Actual NOI Return Actual NOI Returns* (%) Property Names 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th Of-01 Asahi Life Insurance Gotanda Building Of-02 Kibun Daiichi Building * Daihyaku Life Insurance Of-03 Shinjuku Building * Of-04 Ebisu Square * Of-05 Suitengu Heiwa Bldg Of-06 NV Tomioka Bldg Of-07 Hamamatsucho SS Bldg Of-08 Kokusai Tameike Bldg Of-09 Grace Building Sengakujimae Of-10 Nisso Dai 15 Bldg Of-11 Nihonbashi Daiichi Bldg Of-12 Hatchobori SF Bldg Of-13 Shibuya AX Hills Of-14 KCA Bldg Of-15 Daiwa Nakameguro Bldg Of-16 Anwa Tsukasacho Bldg Of-17 Hatchobori MF Bldg Of-18 M2 Harajuku * Of-19 Sannomiya Sanwa Toyo Bldg Of-20 Funabashi Face Bldg Of-21 Adesso Nishiazabu Of-22 CIC Toranomon Bldg Of-23 Aria Ikebukuro Of-24 CIC Yushima Bldg Of-25 Kayabacho Heiwa Bldg Total Office Building Re-01 DJR Kitashinjuku * Re-02 Concord Maihama * Re-03 Concord Ichikawa Re-04 FLEG Kagurazaka * Property Names 7th 8th 9th 10th Actual NOI Returns* (%) 12th 13th 14th 15th 16th 17th 18th 11th Re-35 Single-residence Shiba-koen 6.18 Re-36 Single-residence Mita 6.25 Re-37 Single-residence Takanawa 4.23 Re-38 La Residence de Shirokanedai 5.77 Re-39 Single-residence Ginzahigashi 5.94 Re-40 Single-residence Hatchobori II 5.53 Re-41 Single-residence Hatchobori III 5.13 Re-42 Single-residence Ginza 5.19 Re-43 TOUR JAUNE Komazawa-koen 4.82 Re-44 Single-residence Umeda TOWER 7.37 Re-45 Single-residence Nakanoshima 7.56 Re-46 Single-residence Awaza 7.56 Re-47 Single-residence Marunouchi 6.56 Re-48 Single-residence Hirao 7.05 Re-49 Single-residence Kawaramachi Nijo 6.16 Re-50 Single-residence Minami 6 Jyo 6.91 Re-51 Single-residence Tenjinminami 7.31 Re-52 Single-residence Tenjinhigashi 7.41 Re-53 Single-residence Shijyo Kawaramachi 6.96 Re-54 La Residence de Sendagi 6.27 Re-55 Single-residence Sendagi 6.29 Re-56 Single-residence Komazawa-koen 3.98 Re-57 Single-residence Musashikoyama 5.38 Re-58 Single-residence Kokubunji 6.80 Re-59 Single-residence Hisayaodori 7.47 Re-60 Single-residence Karasuma Kuramaguchi 6.30 Re-61 Single-residence Nishishinjuku WEST 5.30 Re-62 Single-residence Nishishinjuku EAST 5.56 Re-63 Single-residence Higashishinjuku 5.81 Re-64 Single-residence Higashishinsaibashi 6.69 Re-65 Single-residence Kitayobancho 6.79 Re-66 Single-residence Atagobashi 7.88 Re-67 Single-residence Kyudaibyoin-mae 6.00 Re-68 Single-residence Asakusabashi 5.19 Re-69 Single-residence Ichibancho 7.23 Property Names 7th 8th 9th 10th Actual NOI Returns* (%) 12th 13th 14th 15th 16th 17th 18th 11th Re-05 CIC Meguro Re-06 E-stage Kaminoge * Re-07 Blue Mare * Re-08 Maia Shibuya Sakuragaoka * Re-09 Regulus Higashikasai Re-10 ZESTY Kugahama * Re-11 Mirum Wakabayashi Koen Re-12 Mirum Himonya Re-13 Sun Terrace Tanmachi Koen * Re-14 Main Stage Minami Azabu III Re-15 Cosmos Gracia Azabujuban Re-16 Advantage Gakugeidaigaku Re-17 Hermitage Higashikanda Re-18 Hermitage Higashinihonbashi Re-19 Hermitage Nerima Re-20 Landstage Shirokanetakanawa Re-21 Urbyl Berger Meidaimae Re-22 Joy City Nihonbashi Re-23 Grefas Kamishakujii Re-24 T&G Kinshicho Mansion Re-25 Glenpark Ginza EAST Re-26 Glenpark Shin-yokohama Re-27 Glenpark Ikedayama Re-28 Rune Higashiterao Re-29 Residence Mukogaoka Re-30 Residence Hiagashimagome Re-31 Glenpark Gakugeidaigaku Re-32 Wako Gakusei Heights * Re-33 Advance Kameido Re-34 Vante Tanashi Property Names 7th 8th 9th 10th Actual NOI Returns* (%) 12th 13th 14th 15th 16th 17th 18th 11th Re-70 Single-residence Higashinakano 5.75 Re-71 Single-residence Minami 5 Jyo 7.26 Re-72 Single-residence Waseda First Square 6.48 Single-residence Waseda Second Re-73 Square 6.03 Total Residential Building Ho-01 Super Hotel Osaka Tennoji 6.85 Ho-02 Super Hotel Kyoto Karasumagojyo 6.79 Ho-03 Super Hotel Saitama Omiya 6.67 Ho-04 Super Hotel Sendai Hirose-dori 7.57 Total Hotels 6.99 Total properties in portfolio *Actual NOI return = (Actual NOI / managed days x 365 days) / acquisition price. *1 Transferred on May 31, *2 Transferred on August 31, 2009 *3 Transferred a part of land on October 6, 2009 *4 Transferred on July 31, 2007 *5 Transferred on July 28, 2008 *6 Transferred on June 23, 2006 *7 Transferred on April 25,

59 9 Historical Occupancy (by property) (%) Property Names 5/31/2010 6/30/2010 7/31/2010 8/31/2010 9/30/ /31/ /30/2010 Of-01 Asahi Life Insurance Gotanda Building Of-05 Suitengu Heiwa Bldg Of-06 NV Tomioka Bldg Of-07 Hamamatsucho SS Bldg Of-08 Kokusai Tameike Bldg Of-09 Grace Building Sengakujimae Of-10 Nisso Dai 15 Bldg Of-11 Nihonbashi Daiichi Bldg Of-12 Hatchobori SF Bldg Of-13 Shibuya AX Hills Of-14 KCA Bldg Of-15 Daiwa Nakameguro Bldg Of-16 Anwa Tsukasacho Bldg Of-17 Hatchobori MF Bldg Of-18 M2 Harajuku Of-19 Sannomiya Sanwa Toyo Bldg Of-20 Funabashi Face Bldg Of-21 Adesso Nishiazabu Of-22 CIC Toranomon Bldg Of-23 Aria Ikebukuro Of-24 CIC Yushima Bldg Of-25 Kayabacho Heiwa Bldg Total Office Building Re-03 Concord Ichikawa Re-05 CIC Meguro Re-09 Regulus Higashikasai Re-11 Mirum Wakabayashi Koen Re-12 Mirum Himonya Re-14 Main Stage Minami Azabu III Re-15 Cosmos Gracia Azabujuban Re-16 Advantage Gakugeidaigaku Re-17 Hermitage Higashikanda Re-18 Hermitage Higashinihonbashi Re-19 Hermitage Nerima Re-20 Landstage Shirokane Takanawa Re-21 Urbyl Berger Meidaimae Re-22 Joy City Nihonbashi Re-23 Grefas Kamishakujii Re-24 T&G Kinshicho Mansion Re-25 Glenpark Ginza EAST Re-26 Glenpark Shin-yokohama Re-27 Glenpark Ikedayama Re-28 Rune Higashiterao Re-29 Residence Mukogaoka Re-30 Residence Higashimagome Re-31 Glenpark Gakugeidaigaku Re-33 Advance Kameido Re-34 Vante Tanashi Property Names 5/31/2010 6/30/2010 7/31/2010 8/31/2010 9/30/ /31/ /30/2010 Re-35 Single-residence Shiba-koen Re-36 Single-residence Mita Re-37 Single-residence Takanawa Re-38 La Residence de Shirokanedai Re-39 Single-residence Ginzahigashi Re-40 Single-residence Hatchobori II Re-41 Single-residence Hatchobori III Re-42 Single-residence Ginza Re-43 TOUR JAUNE Komazawa-koen Re-44 Single-residence Umeda TOWER Re-45 Single-residence Nakanoshima Re-46 Single-residence Awaza Re-47 Single-residence Marunouchi Re-48 Single-residence Hirao Re-49 Single-residence Kawaramachi Nijo Re-50 Single-residence Minami 6 Jyo Re-51 Single-residence Tenjinminami Re-52 Single-residence Tenjinhigashi Re-53 Single-residence Shijyo Kawaramachi Re-54 La Residence de Sendagi Re-55 Single-residence Sendagi Re-56 Single-residence Komazawa-koen Re-57 Single-residence Musashikoyama Re-58 Single-residence Kokubunji Re-59 Single-residence Hisayaodori Re-60 Single-residence Karasuma Kuramaguchi Re-61 Single-residence Nishishinjuku WEST Re-62 Single-residence Nishishinjuku EAST Re-63 Single-residence Higashishinjuku Re-64 Single-residence Higashishinsaibashi Re-65 Single-residence Kitayobancho Re-66 Single-residence Atagobashi Re-67 Single-residence Kyudaibyoin-mae Re-68 Single-residence Asakusabashi Re-69 Single-residence Ichibancho Re-70 Single-residence Higashinakano Re-71 Single-residence Minami 5 Jyo Re-72 Single-residence Waseda First Square Re-73 Single-residence Waseda Second Square Total Residential Buildings Ho-01 Super Hotel Osaka Tennoji Ho-02 Super Hotel Kyoto Karasumagojyo Ho-03 Super Hotel Saitama Omiya Ho-04 Super Hotel Sendai Hirose-dori Total Hotels Total properties in portfolio

60 Hotel Residential Residential Office Residential Office 10 Condition of Collaterals <Collaterals Properties> Property Names Asset Format Appraisal Value (Note) Of-01 Asahi Life Insurance Gotanda Building Trust beneficial interest 1,393 Of-05 Suitengu Heiwa Bldg Trust beneficial interest 1,378 Of-06 NV Tomioka Bldg Trust beneficial interest 2,560 Of-07 Hamamatsucho SS Bldg Trust beneficial interest 1,560 Of-08 Kokusai Tameike Bldg Trust beneficial interest 2,620 Of-09 Grace Building Sengakujimae Trust beneficial interest 1,440 Of-10 Nisso Dai 15 Bldg Real estate 1,450 Of-11 Nihonbashi Daiichi Bldg Trust beneficial interest 2,050 Of-12 Hatchobori SF Bldg Real estate 2,330 Of-13 Shibuya AX Hills Real estate 1,440 Of-14 KCA Bldg Real estate 1,093 Of-15 Daiwa Nakameguro Bldg Real estate 2,220 Of-16 Anwa Tsukasacho Bldg Real estate 1,090 Of-17 Hatchobori MF Bldg Real estate 942 Of-19 Sannomiya Sanwa Toyo Bldg Real estate 6,230 Of-20 Funabashi Face Bldg Real estate 3,150 Of-22 CIC Toranomon Bldg Real estate 1,322 Of-23 Aria Ikebukuro Real estate 1,060 Of-25 Kayabacho Heiwa Bldg Trust beneficial interest 5,080 Re-03 Concord Ichikawa Trust beneficial interest 439 Re-09 Regulus Higashikasai Trust beneficial interest 622 Re-11 Mirum Wakabayashi Koen Trust beneficial interest 3,358 Re-12 Mirum Himonya Trust beneficial interest 1,441 Re-14 Main Stage Minami Azabu III Trust beneficial interest 1,206 Re-15 Cosmos Gracia Azabujuban Trust beneficial interest 1,060 Re-17 Hermitage Higashikanda Trust beneficial interest 1,070 Re-18 Hermitage Higashinihonbashi Trust beneficial interest 1,180 Re-19 Hermitage Nerima Trust beneficial interest 676 Re-20 Landstage Shirokane Takanawa Real estate 3,920 Re-21 Urbyl Berger Meidaimae Real estate 880 Re-23 Grefas Kamishakujii Real estate 906 Re-24 T&G Kinshicho Mansion Real estate 985 Re-26 Glenpark Shin-yokohama Real estate 2,330 Re-28 Rune Higashiterao Real estate 2,830 Re-29 Residence Mukogaoka Real estate 1,600 Re-30 Residence Higashimagome Real estate 1,140 Re-33 Advance Kameido Real estate 987 Re-34 Vante Tanashi Real estate 825 (unit: million yen) Property Names Asset Format Appraisal Value (Note) Re-35 Single-residence Shiba-koen Trust beneficial interest 836 Re-36 Single-residence Mita Trust beneficial interest 1080 Re-37 Single-residence Takanawa Trust beneficial interest 749 Re-38 La Residence de Shirokanedai Trust beneficial interest 729 Re-39 Single-residence Ginzahigashi Trust beneficial interest 1460 Re-40 Single-residence Hatchobori II Trust beneficial interest 1890 Re-41 Single-residence Hatchobori III Trust beneficial interest 793 Re-42 Single-residence Ginza Trust beneficial interest 944 Re-43 TOUR JAUNE Komazawa-koen Trust beneficial interest 6,510 Re-44 Single-residence Umeda TOWER Trust beneficial interest 1,920 Re-45 Single-residence Nakanoshima Trust beneficial interest 453 Re-46 Single-residence Awaza Trust beneficial interest 576 Re-47 Single-residence Marunouchi Trust beneficial interest 624 Re-48 Single-residence Hirao Trust beneficial interest 1,780 Re-49 Single-residence Kawaramachi Nijo Trust beneficial interest 533 Re-50 Single-residence Minami 6 Jyo Trust beneficial interest 230 Re-51 Single-residence Tenjinminami Trust beneficial interest 631 Re-52 Single-residence Tenjinhigashi Trust beneficial interest 502 Re-53 Single-residence Shijyo Kawaramachi Trust beneficial interest 1,830 Re-54 La Residence de Sendagi Trust beneficial interest 820 Re-55 Single-residence Sendagi Trust beneficial interest 870 Re-56 Single-residence Komazawa-koen Trust beneficial interest 615 Re-57 Single-residence Musashikoyama Trust beneficial interest 842 Re-58 Single-residence Kokubunji Trust beneficial interest 839 Re-59 Single-residence Hisayaodori Trust beneficial interest 1,080 Re-60 Single-residence Karasuma Kuramaguchi Trust beneficial interest 572 Re-61 Single-residence Nishishinjuku WEST Trust beneficial interest 1,990 Re-62 Single-residence Nishishinjuku EAST Trust beneficial interest 1,170 Re-63 Single-residence Higashishinjuku Trust beneficial interest 1,360 Re-64 Single-residence Higashishinsaibashi Trust beneficial interest 566 Re-65 Single-residence Kitayobancho Trust beneficial interest 810 Re-66 Single-residence Atagobashi Trust beneficial interest 684 Re-67 Single-residence Kyudaibyoin-mae Trust beneficial interest 427 Re-68 Single-residence Asakusabashi Trust beneficial interest 771 Re-69 Single-residence Ichibancho Trust beneficial interest 834 Re-70 Single-residence Higashinakano Trust beneficial interest 941 Re-71 Single-residence Minami 5 Jyo Trust beneficial interest 408 Re-72 Single-residence Waseda First Square Trust beneficial interest 2,100 Re-73 Single-residence Waseda Second Square Trust beneficial interest 874 Ho-01 Super Hotel Osaka Tennoji Trust beneficial interest 1,080 Ho-02 Super Hotel Kyoto Karasumagojyo Trust beneficial interest 900 Ho-03 Super Hotel Saitama Omiya Trust beneficial interest 1,050 Ho-04 Super Hotel Sendai Hirose-dori Trust beneficial interest 1,150 Total 114,686 <Properties Other Than Collateral Properties> Property Names Asset Format (unit: million yen) Appraisal Value (Note) Of-18 M2 Harajuku Trust beneficial interest 4,135 Of-21 Adesso Nishiazabu Trust beneficial interest 479 Of-24 CIC Yushima Bldg Real estate 1,310 Re-05 CIC Meguro Trust beneficial interest 507 Re-16 Advantage Gakugeidaigaku Trust beneficial interest 825 Re-22 Joy City Nihonbashi Trust beneficial interest 925 Re-25 Glenpark Ginza EAST Trust beneficial interest 4,040 Re-27 Glenpark Ikedayama Trust beneficial interest 998 Re-31 Glenpark Gakugeidaigaku Trust beneficial interest 1,050 Total 14,269 Note: Appraisal Value is an opinion of real estate appraisers concerning the price of appraised real estate as of November 30, Real estate appraisers conducted the appraisal in according to points of concerns in real estate appraisal based on Act on Investment Trust and Investment Corporation, Act on Real Estate Appraisal (Law No. 152 in 1963, including revision thereafter) and Real Estate Standards. Heiwa Real Estate REIT, Inc. is not to guarantee the validity or correctness of the concerned opinion, nor the possibility of transaction to be made at the concerned appraisal value at present or future. The appraisal value may vary even for the same real estate, depending on real estate appraiser to conduct the appraisal, method of the appraisal or timing of the appraisal. 59

61 11 Condition of Investment Unit Price 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% <History of Investment Unit Price> September 2008 Bankruptcy of Lehman Brothers End End September November th October 19, 2009 Heiwa Real Estate becomes sole sponsor of asset management company End May 2009 Heiwa Real Estate REIT Investment Corporation 16th End November 2009 June 21, 2010 Execute Merger Agreement with JSR 17th End May 2010 TSE REIT Index October 1, 2010 Merged with JSR (investment unit split) 18th End November 2010 Total market value High during period (closing price) Low during period (closing price) End of period investment unit price (closing price) Historical high (closing) Historical low (closing) bn yen (as of November 30, 2010) 51,100 yen (November 30, 2010) 34,500 yen (June 7, 2010) 51,100 yen (November 30, 2010) 184,750 yen (July 3, 2007) 19,625 yen (October 16, 2008) (Note 1) Figures as of March 8, 2005 for investment unit price and TSE REIT Index are indicated as 100%. (Note 2) A one-for-four investment unit split conducted on October 1, 2010; accordingly, the pre-split investment unit price is divided by four. <Configuration of Investors at end of 18th > (As of November 30, 2010) Based on number of investors (5,363 investors) Financial institutions (including securities firms) 40 investors (0.43%) Based on quantity of investment units (131,891 units) Financial institutions (including securities firms) 254,235 units (0.43%) Other Japanese corporations 147 investors (1.61%) Other Japanese corporations 142,482 units (1.61%) (Note) Breakdown of investors are rounded to the hundredth place. Foreign corporations, etc. 85 investors (0.93%) Foreign corporations, etc. 194,135 units (0.93%) Individual and others 8,831 investors (97.01%) Individual and others 105,045 units (97.01%) <Condition of Unitholders at the end of 18th > Name (As of November 30, 2010) Units Owned (units) (Note) Ratio of investment units owned against total investment units outstanding are rounded to the hundredth place. Share (%) 1 GOLDMAN SACHS INTERNATIONAL 132, Japan Trustee Services Bank, Ltd. (trust account) 124, Heiwa Real Estate Co., Ltd. 102, The Nomura Trust and Banking Co., Ltd. (trust account) 49, Trust & Custody Services Bank, Ltd. (securities investment trust account) 25, The Master Trust Bank of Japan,Ltd. (trust account) 20, MSREF VI RIVER SIX, LIMITED JAPAN 10, Ravita 1, Limited 9, Toyo Property Co., Ltd. 7, Minami Nippon Bank Ltd. 7, Total 490,

62 12 Overview of Asset Management Company In October 2009, Canal Investment Trust Co., Ltd. became a wholly owned subsidiary of HEIWA REAL ESTATE CO., LTD., serving to strengthen the foundation of the HEIWA REAL ESTATE Group as a J-REIT asset management company. To clarify and increase the profile of HEIWA REAL ESTATE sponsorship, Canal Investment Trust Co., Ltd. changed its business name to HEIWA REAL ESTATE Asset Management CO., LTD. on July 1, Asset Management Company Profile Name HEIWA REAL ESTATE Asset Management CO., LTD. (Changed name from Canal Investment Trust Co., Ltd. on July 1, 2010) Established March 24, 2000 Head Office Representative Atago Green Hills MORI Tower Atago, Minato-ku, Tokyo Takaya Ichikawa, Representative Director Capital 295,575 thousand (as of March 31, 2010) Shareholder Composition Business Lines Registrations, Licenses HEIWA REAL ESTATE CO., LTD. (100%) Investment management services Financial Instruments Business Building Lots and Buildings Transaction Business Discretionary Transaction Agent Reg. No. 316, Director-General, Kanto Finance Bureau (Financial Instruments and Exchange Act) Lic. No. (2) 79529, Governor of Tokyo Lic. No. 8, Minister of Land, Infrastructure, Transportation and Tourism Takaya Ichikawa President & Representative Director Thirty-three years of service at HEIWA REAL ESTATE Served as general manager, HEIWA REAL ESTATE Osaka Branch; general manager, building business Transferred to HEIWA REAL ESTATE Asset Management in January 2010, assuming title of president and representative director. Participated in development of major projects with the Tokyo and Osaka stock exchanges during his tenure at HEIWA REAL ESTATE. Satoru Yamanaka Executive Managing Director Served in various positions at Sumitomo Life Insurance Company over 29 years. Contributed to the launch of Nippon Building Fund, Inc., the first publicly traded REIT in Japan. Assumed role as director and investment division general manager with the asset management company. After serving as representative director at asset management company Lasalle Japan REIT, assumed role of executive management director of HEIWA REAL ESTATE Asset Management in May Takanori Higuchi Director, General Manager, Planning Division Served in various positions at HEIWA REAL ESTATE for 18 years. After experience in finance and logistics divisions, transferred to HEIWA REAL ESTATE Asset Management in October Named Director, General Manager, Planning Division Nobuhiro Seo Director, General Manager, Investment Management Division Served in various positions at HEIWA REAL ESTATE for 17 years. After experience in the asset management office of the business planning division and building business division, transferred to HEIWA REAL ESTATE Asset Management, assuming the title of Director, General Manager, Investment Management Division 61

63 13 Management Policy of Asset Management Company Management Policy Mission PEACE At HEIWA REAL ESTATE Asset Management, our mission is to play a role in the enduring growth of the J-REIT market, contributing to society and to the economy through our dedication and high aspirations. 1. Priority Our number one priority is to improve investor value. 2. Earning Trust We work to ensure that our asset management services earn the trust of all of our stakeholders, including our investors, our tenants, and our financial institution partners. 3. Aggressiveness We are a highly expert professional organization, engaged in aggressive, high-quality fund management that generates growing and stable profits with the assets under management. 4. Comfort We provide comfortable spaces for urban life and other related services through investments and management of numerous profitable properties. 5. Ethics We conduct our business under the highest ethical standards. We are committed to organization-wide compliance and transparency. 62

64 Asset Management Company Financial Instruments Business Agent Reg. No. 316, Director-General, Kanto Finance Bureau (Financial Instruments and Exchange Act) Member, The Investment Trusts Association, Japan