ORIX JREIT Inc. · FP21 financial results, FP22 forecast and FP23 forecast 6 New Acquisition from...

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October 12, 2012 Prepared by ORIX Asset Management Corporation

ORIX JREIT Inc.The 21st Fiscal Period Results (ended August 31,2012)

1List of Contents

Highlights of FP21 Appendix

Highlights of FP21 (ended August 31, 2012) 3 Financial Highlights （Results) 22

Financial Results and Forecasts FP21 Leasing Results ①～③ 23～25

Comparison between FP21 results and FP21 forecast 5 Major Tenants 26

and new FP22 forecastApproach to bottoming out Internal Growth (Image) ①～② 27～28

FP21 financial results, FP22 forecast and FP23 forecast 6 New Acquisition from FP21 onwards①～⑤ 29～33

Internal Growth External Growth ～Basic Investment Policy～ 34

Highlights of Improved Occupancy Rates in FP21 8 Market Outlook and Investment Strategy 35

Maintenance and Improvement of Occupancy Rates 9 Retail Market Outlook and Investment Strategy 36

Rent Downward Revision 10 OJR’s Target Retail Facilities 37

Composition of Rent Levels 11 Office Market Outlook and Investment Strategy 38

External Growth Residential Market Outlook and Investment Strategy 39

External Growth in FP21 13 Industrial Market Outlook and Investment Strategy 40

Financial Strategy Portfolio Strategy 41

Financial Strategy 15 Effect of Property Type Diversification 42

Future Management Policies and Strategies List of Properties Disposition 43

Future Management Policies and Strategies 17 Synergy with the ORIX Group 44

Change of Distributions 18 Portfolio Summary 45

Approaching to bottoming out Internal Growth 19 Portfolio Map 46

Summary 20 Portfolio Data ①～② 47～48

Overview of Appraisal Value 49

Appraisal Value List at the end of FP21 ①～② 50～51

Financial Data 52

Investment Units 53

Transactions with Sponsors and Compliance System 54

Organization of OAM 55

2

Highlights of FP21

3

Acquired 2 retail facilities and 4 residences Sold 1 logistics facility Already acquired 2 properties (a senior house and a residence) in FP22 Concluded rent guarantee-type master lease agreements with our sponsor for 2 properties acquired

from outside

Reduced average funding costs (based on total interest-bearing debts, ¥171 billion) by approximately0.1% annual rate through refinancings

Newly concluded a commitment line contract with the Tokyo-Mitsubishi UFJ Bank, Ltd. (¥4 billion) Controlled the total asset-based LTV at 50% level

Achieved distributions of ¥11,656, exceeding initial forecast by ¥1,156 Secured ¥11,095 without gain on property sale

FP21 Actual: ¥11,656(+¥1,156 compared to initial forecast)

Office occupancy rate increased from 93.9% at end of FP20 to 96.1% Succeeded in completely filling RC Shibuya and RC Shinjuku where major tenants vacated (including

cancellation noticed)

Reduced funding costs, maintained and strengthened stabilityof financial base

Office occupancy rate increased

Increased stability and profitability through diversifiedinvestments

Highlights of FP21 (ended August 31, 2012)

Internal Growth

External Growth

Financial Strategy

Distributions

4

Financial Results and Forecasts

5

Variance between FP21 Actual vs. Forecast +74 Variance between FP22 New and Old Forecast ▲ 1

・Asset/city planning tax decrease for existing properties +61・Asset/city planning tax decrease for existing properties

acquired in 2011+62

・Rental income increase from existing properties +12 ・Rental revenue increase from existing properties +13

・Utilities costs +21 ・Increase of brokerage fee and advertising expenses ▲ 39

・Repair cost increase for existing properties ▲ 38 ・Utilities costs ▲ 27

・Repair costs increase for existing properties ▲ 20

Variance between FP21 Actual vs. Forecast +220 Variance between FP22 New and Old Forecast +215

・3 Properties acquired in FP21 (Togoshi,Sapporo,Morioka)

+66･Income from sale and acquisition of properties in FP21and FP22

+215

・Property sold in FP21 (Koshigaya) +160―Of this, 3 Properties acquired in FP21 (Togoshi, Sapporo, Morioka)

and 2 Properties acquired in FP22 (Shinurayasu, Meguro)(+287)

―Of this, Loss of incomes from Property sold in FP21 (Koshigaya) (▲ 73)

Variance between FP21 Actual vs. Forecast +35 Variance between FP22 New and Old Forecast ▲ 15

Total ＋328 Total +199

Internal Growth Factors Internal Growth Factors

External Growth Factors External Growth Factors

Other Factors Other Factors

Net Income 3,315 328 2,986 Net Income 3,185 199 2,986

Distribution per Unit 11,656 yen 1,156 yen 10,500 yen Distribution per Unit 11,200 yen 700 yen 10,500 yen

Distribution per Unit

（excluding the property

sale gain)11,095 yen 595 yen 10,500 yen


（excluding the property

sale gain)11,200 yen 700 yen 10,500 yen

Item

(millions of yen)

FP21 ActualFP21 Forcast（Ｂ)(as at FP20 account

announcement )Item

(millions of yen)

FP22 Forcast（A)(as at FP21 account announcement )

FP22 Forcast（Ｂ)(as at FP20 account

announcement )

(Aug. 2012) (A-B) (Aug. 2012) （Feb. 2013） (A-B) （Feb. 2013）

（millions of yen）

ActualActual Distribution for FP21 wasDistribution for FP21 was ¥¥11,656, exceeding11,656, exceeding initial forecast,initial forecast, without propertywithout property sale gainsale gain ¥¥11,09511,095was achieved.was achieved.

Forecast distribution for FP22 is increased toForecast distribution for FP22 is increased to ¥¥11,200 by11,200 by ¥¥700 plus from initial forecast.700 plus from initial forecast.【Variance between FP21 Actual vs. Forecast】【Variance between FP22 New and Old Forecast】

① Increase ofrental income

by leasingacceleration

② Increase ofincome fromcontinuous

propertyreplacements

Comparison between FP21 results and FP21 forecastand new FP22 forecast

6

Net Income 3,430 3,315 ▲ 115 3,185 ▲ 129 3,071 ▲ 113

Distribution per Unit 11,822 yen 11,656 yen ▲ 166 yen 11,200 yen ▲ 456 yen 10,800 yen ▲ 400 yen


（excluding the

property sale gain)

11,752 yen 11,095 yen ▲ 657 yen 11,200 yen 105 yen 10,800 yen ▲ 400 yen

FP23 Forcast（D)

(Feb. 2012) (Aug. 2012) (B-A) (Feb. 2013) (C-B)

Item

(millions of yen)

FP20 Actual(A) FP21 Actual(B) FP22 Forcast（C)

(Aug. 2013) (D-C)

Cange ▲ 328 Cange ▲ 174 Cange ▲ 146

・Asset/city planning tax decrease for existing

properties+65 ・Repair cost decrease for existing properties +107 ・Decrease of brokerage fees +33

・Rental income decrease from existing properties ▲ 236 ・Rental income decrease from existing properties ▲ 156 ・Rental income decrease from existing properties ▲ 134

・Repair cost increase for existing properties ▲ 175 ・Utilities ▲ 49 ・Increase of loss on retirement ▲ 36

･Decrease of penalty and cancellation fees ▲ 41 ・Decrease of other operating income（ex. utilities） ▲ 29 ・Decrease of penalty and cancellation fees ▲ 19

・Decrease of penalty and cancellation fees ▲ 19

Cange +131 Cange ▲ 24 Cange ▲ 39

･Income from acquisition of properties

in FP21 and FP22+175

･Income from acquisition of properties

in FP21 and FP22+136

― Of this, 2 Properties acquired in FP20 (Kobe

Sannomiya, Musashi Sendai) and 6 Properties

acquired in FP21 (Mishuku,Miyamachi, Bansui,

Togoshi, Sapporo, Morioka)

(+224)

― Of this, 6 Properties acquired in FP21 (Misyuku,

Miyamachi, Bansui,Togoshi,Sapporo,Morioka)

and 2 Properties acquired in FP22

(Shinurayasu,Meguro)

(+220)・Fixed asset/city planning tax for 9 properties

acquisition in 2012▲ 54

― Of this, increase of funding-related

expenses for acquisition(▲ 23)

― Of this, increase of funding-related expenses

for acquisition(▲ 18)

― Of this, Property sold in FP20 (Shirogane) (▲ 26) ― Of this, Property sold in FP21 (Koshigaya) (▲ 67)

・Increase of property sale gain +72・Loss of sale gain from property sold in

FP21 (Koshigaya)▲ 160

― Property sold in FP21 (Koshigaya) (+160)

― Property sold in FP20 (Shirogane) (▲ 88)

・Fixed asset/city planning tax for 12 properties

acquisition in 2011▲ 110

Cange +82 Cange +68 Cange +72

・Decrease of funding-related expenses +54 ・Decrease of funding-related expenses +86 ・Decrease of funding-related expenses +66

― Of this, reduction in interest expenses (+72) ―Of this, reduction in interest expenses (+59) ―Of this, reduction in interest expenses (+93)

― Of this, factor of operating days (▲ 19) ―Of this, factor of operating days (+27) ―Of this, factor of operating days (▲ 27)

・Decrease of general business commission

(asset storage and accounting) expenses+43

Total ▲ 115 Total ▲129 Total ▲113

FP21 Actual vs FP20 Actual FP22 Forcast vs FP21 Actual FP23 Forcast vs FP22 Forcast

Internal

Growth

Factors

External

Growth

Factors

Other

Factors

(millions of yen)

②Reduction ofFunding costs

③ Increase of income fromproperty replacements continues

④Upside factors

①Improvement ofrental incomedecline rangeat existingproperties

FP21 financial results,FP22 forecast and FP23 forecast

Aim for bottoming out distribution per unit atAim for bottoming out distribution per unit at ¥¥11,00011,000 level by continuously progressing inlevel by continuously progressing inproperty acquisitions through asset replacements.property acquisitions through asset replacements.

7

②決算概要及び業績予想

Internal Growth

8

Major Leasing Results

Highlights of Improved Occupancy Rates in FP21

End ofJun. 2012

79.4%

End ofOct. 2011

60.3%

End ofFeb. 2012

81.2%

End ofJune 2012

74.7%

End ofDec. 2012

100%

End ofFeb. 2012

100%

→

→

→

→

End ofJan. 2013

61.5%

End ofApr. 2012

0%

→

→

→

→

aune Kohoku

Seafort SquareCenter Building

Aoyama SuncrestBuilding

Round-CrossShinjuku

Round-CrossShibuya

Increase in Occupancy RatesFactorsName of Property

End ofOct. 2012

93.0%

Implementation of renewal strategy in utilizingarea characteristics

Filled up office vacant space with tutor schoolsand restaurants highly demanded in surroundingarea

End ofOct. 2012

82.2%

End ofAug. 2012

95.8%

Implementation of leasing strategies that utilizingproperty and area characteristics

End ofJuly 2012

98.6%

Implementation of flexible leasing strategiesincluding the short-term use

End ofFeb. 2013

100%

Utilizing location characteristic, 1st and 2nd floorleased to retail tenant, higher floor leased tofinancial service company

100% filled up space vacated by a major tenantdeparture

End ofSep. 2012

100%

100% filled up entire space vacated by a singletenant departure mainly with multi tenants

Implementation of direct property management in utilizing areacharacteristics

Implementation of tenant merchandising

Strengthen relationships with tenants

Retail Lots

Office Lots

Retail Lots

Office Lots

Retail Lots

Office Lots

Utilizing ORIX groupUtilizing ORIX group’’s leasing network.s leasing network. Achieved high occupancy rates by taking care ofAchieved high occupancy rates by taking care ofvarious tenant needsvarious tenant needs

9

-25,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

【 Period End Occupancy Rates 】

【Tenanted/Vacated Area and Rent Fluctuation Rate at Tenant Replacement (excluding residences）】

96.2

97.2 97.298.0

92.7

95.6

93.9

96.1

99.2 98.399.1 99.0

90

95

100

Overall Office Non-Office Office（Ｆorecast as at FP 20 account settlement）

Tenanted (confirmed to move in for FP22 onward)

Vacated (confirmed to vacated for FP22 onward)

Projected to be tenantedProjected to be vacated

-18.0%

-24.2%

-20.3% -20.0%

Period End Occupancy Rates and Tenanted/Vacated Area

(％)

Office occupancy rate increased to 96.1%, exceedingOffice occupancy rate increased to 96.1%, exceeding initialinitial forecastforecast

(㎡)

PL impact ofapprox.▲¥100 millionby DepartureAssumed

Maintenance and Improvement of Occupancy Rates

Projected to be tenanted as at FP20 financial announcement

Projected to be vacated as at FP 20 financial announcement

Rent Fluctuation rate at Tenant Replacements (dotted line is projection) -30%

-20%

-10%

FP18(Feb.11)

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

(Projection)

FP23(Aug.13)

(Projection)

FP18(Feb.11)

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

(Projection)

FP23(Aug.13)

(Projection)

10

-8.9%

-17.3%

-9.3%-10.7%

-20%

-15%

-10%

-5%

0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

【Rent Downward Revision Area（exclude residences）】(㎡)

Rent Downward Revision Area and Rent Decline Rate

Rent Downward Revision AreaRent Downward Revision Area ofof FPFP21 was suppressed to a level below forecast at the beginning21 was suppressed to a level below forecast at the beginningofof fiscalfiscal periodperiod

Rent Downward Revision Area and RentRent Downward Revision Area and Rent DeclineDecline RatRatee inin FPFP22 and22 and FPFP23 are assumed to23 are assumed to bebeapproximately as sameapproximately as same levellevel between Decline FP18 and FP21between Decline FP18 and FP21

Note: Excluding the rent remained and increased.

【Rent Decline Rate（exclude residences）】

Rent Downward Revision

Confirmed

Projection

Forecast as at FP20 financial announcement

Rent Decline rate (dotted line is projection)

FP18(Feb.11)

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

(Projection)

FP23(Aug.13)

(Projection)

FP18(Feb.11)

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

(Projection)

FP23(Aug.13)

(Projection)

11

48.9%

20.5%

23.6%

5.8%

1.2%

21.4%

38.7%16.0%

12.7%

11.2%

30.9%

12.6%

56.5%

18.0%

14.5%

67.5%

As at the end ofFP14 (Feb. 09)just after the

Lehman Shock

Risk of rentRisk of rent declinedecline and tenant departure decreased due to market rent gapand tenant departure decreased due to market rent gapreductionreduction and tenant diversificationand tenant diversification

Average unit price of monthly rent：¥20,190/tsubo

As at the end ofFP21 (Aug. 12)

Composition of Rent Levels

Average unit price of monthly rent：¥16,813/tsubo

Declined by Approx.16.7%

¥30,000 or higher

Below ¥30,000

¥25,000 or higher

Below ¥25,000

¥20,000 or higher

Below ¥20,000

¥15,000 or higher

below ¥15,000

（for 1 tsubo / month）

OtherRent ratio 1% or more (non-office)Rent ratio 1% or more (office)

Non-office: total 5 tenantsTotal monthly rent

:¥191 million

Office: total 17 tenantsTotal monthly rent

: ¥470 million

Non-office: total 5 tenantsTotal monthly rent

: ¥235 million(Mainly long-term contracts)

Office: total 10 tenantsTotal monthly rent

: ¥292 million(Rent ratio of largest

tenant is approx. 3.1%)

[Tenant ratio accounting for 1% or more in total contracted rental income]

Note:Calculation based on total rentable area of OJR’s office buildings, excluding office area for non-office use.

Composition of Rent Levels (Offices only, Area Base) (Note) Tenant Diversification and Expansion of Customer Base

12

External Growth

13

SoldSold aa relatively smallrelatively small scale logistics facilityscale logistics facility and selectively acquired retail facilities andand selectively acquired retail facilities andresidences with high stability and profitabilityresidences with high stability and profitability

3.9%

5.4%

Propertiessold in

FP21（Note 3)

4.6%Yield after

depreciation

6.3%

Propertiesacquired inFP21（Note 2)

Leasing NOIyield

Profitability

10.8 yearsExisting properties

(as of August 31, 2012)

16.6 yearsNew acquisition in FP21

（at time of acquisition）

Average age

Belle Face Mishuku (Note1）

Acquired

Sold

Belle Face Togoshi Statio

Belle Face Miyamachi

Heiseikankou SapporoEkimae Building

Belle Face Bansui-Street

Morioka MinamiShopping Center Sansa

94.8%Price/appraisal rate

GK CREPinvestment J

Seller

5.1%Leasing NOI yield

¥2,110 millionAppraisal Value¥2,000 millionPrice

SetagayaWard，Tokyo

Location


ORIX RealEstateCorporation

Seller



Shinagawaward, TokyoLocation



Seller



Sapporo City,Hokkaido

Location



Seller



Sendai City,Miyagi

Location



Seller


¥873 millionAppraisal Value¥832 millionPrice

Sendai City,Miyagi

Location


Dufftown GKSeller7.3%Leasing NOI yield


Morioka City,Iwate

Location

Koshigaya LogisticsCenter （Note 3）

Mitsui FudosanPrivate REIT Inc.Buyer

¥159 millionGain on sale5.4%Leasing NOI yield¥3,830 millionSale price Acquired 6 properties

(Total:¥11,674 million） andsold 1 property （¥3,830million）

94.1%Properties acquired in FP21

Acquisition Price/AppraisalValue Ratio

Properties indicatedwith blue frame wereacquired from outsideof ORIX Group.

External Growth in FP21

(Note 1) “Belle Face Mishuku” was renamed from “Lios Mishuku” asof October 1, 2012.

(Note 2) Calculated in dividing the anticipated income/expenditurebalance under the stabilized occupancy (but excludingextraordinary factors that may occur in the first year ofacquisition calculated by Asset Management Company) bythe acquisition price.

(Note 3) Leasing NOI yield is calculated in dividing the actual figuresof the 20FP by the acquisition price.Yield after depreciation is calculated in dividing the actualfigures of the 20FP by the book value.

14

Financial Strategy

15

Amount \15.0 billion \3.5 billion

Interest type Fixed Variable

Interest rate 1.10% 0.84%

Average maturity 5.53 years 5 years

New Terms


Interest type Fixed Variable


Average maturity 4.13 years 3 years

PreviousTerms


Interest type Variable Variable


Average maturity 5 years 4 years

New TermsPrevious Terms

Amount \20.0 billion

Interest type Fixed

Interest rate 1.79%

Average maturity 5 years

Note: Average funding costs is calculated in dividing annualized total amount of interest expense, interest on investment corporation bonds, loan fees and depreciation ofinvestment corporation bonds issuance costs by average outstanding total interest-bearing debts during borrowing period.

2.01% 2.02% 2.00%

1.92%

1.5%

2.0%

2.5%

第18期

(2011/2期)

第19期

(2011/8期)

第20期

(2012/2期)

第21期

(2012/8期)

第22期想定

(2013/2期)

第23期想定

(2013/8期)

Refinancing since FP21

FP21 FP22

Reduced averageReduced average fundingfunding costcostss under favorable financialunder favorable financial circumstancecircumstance Controlled (total asset based) LTV at 50%Controlled (total asset based) LTV at 50% levellevel Concluded a commitment line contract (Concluded a commitment line contract (¥¥4.0 billion) newly with the Bank of Tokyo4.0 billion) newly with the Bank of Tokyo--Mitsubishi UFJMitsubishi UFJ

(expanded(expanded CLCL¥¥22.5 billion22.5 billion ⇒⇒ CLCL¥¥26.5 billion)26.5 billion)

Financial Indicators(as of August 31, 2012)

Average Funding Costs (Note)

Financial Strategy

FP18(Feb.11)

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

(Projection)

FP23(Aug.13)

(Projection)

Debts outstanding \171.0 billions

LTV (Total asset base) 49.6 ％

LTV (Unitholders' equity base) 53.1 ％

Average interest rate 1.61 ％

Average funding cost 1.92 ％

Fixed-interest debt ratio 86.3 ％

Commitment Lines

(Total for 5 lenders)\26.5 billions

16

Future Management Policiesand Strategies

17

Circumstance Future Policies and StrategiesE

xte

rnal

Gro

wth

Inte

rnalG

row

thF

inan

cia

lS

trate

gy

Economic recovery situation is inconsistent but OJR aim for continuous increase of distributions

Future Management Policies and Strategies

Rental Market in Japan (Office)

Vacancy rates affected by large supply in Tokyo are peaking out

Companies dependent on foreign demand continue to shrink orvacate as future global economy is still uncertain

Domestic demand is relatively steady, and optimistic rental demandis increasing particularly from information and communications-related companies, etc.

Overall, improvement of lease conditions will still need some time

Bottoming out rental revenue from existingproperties without depending on market recovery

Maintain high occupancy rate

Increase actual occupancy rates and reduce rental income declineat tenant replacements, by reducing tenant departures rate

Property Market in Japan

There is a strong drive by REITs, etc. to acquire properties. Caprates trend downward

Market sentiment of prime properties shortage still remains.Property transactions are especially limited for offices as sale priceperception between sellers and buyers don't match

Number of transactions trends upward for retail and residentialproperties including those in regional areas

Continuously progressing in improvement onprofitability and quality of portfolio through assetreplacements in placing emphasis on yield afterdepreciation

Invest in retail and other properties that are both “stable” and“profitable”

Utilize ORIX Group’s pipeline and also focus on external source

Financial Market in Japan

Japanese financial institutions continue to keep their positivelending stance.

While stock market is soft, REIT market is steady due to stabledistributions

Continuously progressing in costs reduction andstrengthening of stability

Reduce funding costs

Expand number of financial institutions

Exte

rnalG

row

th

18

12,571

11,82211,656

10,500 10,500

11,200

10,800

10,000

11,000

12,000

13,000

FP19（Aug. '11）

FP20（Feb. '12）

FP21（Aug. '12）

FP22（Feb. '13）forecast

FP23（Aug. '13）forecast

FP24onwards

projection

Actual Distributions Forecast as at FP20 financial announcement

Forecast as at FP21 financial announcement Target Distributions

Red ： Actual figures

Blue ： Forecast figures

Distributions

Distributions Forecasts

Aim for distributionAim for distribution ¥¥11,000 or more for FP23 through external growth11,000 or more for FP23 through external growth

Aim forAim for bottoming outbottoming outdistributionsdistributions

Aim for bottoming out distributions by externalAim for bottoming out distributions by externalgrowth and financial strategygrowth and financial strategy

Aim for improving distributions by bottomingAim for improving distributions by bottomingout rental revenueout rental revenue

（yen）

ExternalGrowth

＋

＋

＋＝±0

FinancialStrategy

＋InternalGrowth

＝Distributions

Change of Distributions

FP22: ¥11,200 per unit (+¥700 compared to initial forecast) / FP23: ¥10,800 per unit (Existing portfolio base)

improving distributionsimproving distributionsbottoming out distributionsbottoming out distributions

bottoming out distributions ：FP21 to FP23 improving distributions ：FP24 onwards

ExternalGrowth

＋

＋

＋±0＝

FinancialStrategy

＋InternalGrowth

＝Distributions

19

Propose and implement renewal construction in order to increase tenant satisfaction

◆Segmented adaptation

◆Change of use

◆Environmental and energy saving measures

Creation of rentable space which can be more leaseable by proposing relocations and ,etc.in the same building

SStetep.1p.1

Specific Measures for ImprovingInternal Growth

Steps for Improving Internal Growth

The following measuresThe following measures areare implemented to maintain high occupancy rates and suppress tenanimplemented to maintain high occupancy rates and suppress tenantt

departuresdepartures

Approaching to bottoming out Internal Growth

Understand tenants’ business performance and business nature; Explore tenant potential needs

Promote existing tenant space expansion and relocation in the same building, and short-term use, etc.

Strengthen tenant relationship through direct PM

Increase competitiveness of properties

Utilize the ORIX Group’s nation-wide leasing network

Step.Step.22

SStetep.p.33

Improvement of contractoccupancy rate

Suppress tenantdepartures

Improvement of leaseterms

Office contract occupancy rate: Achieved 96.1% at end of FP21

Improve effective occupancy rate and reduce rentalincome decline at tenant replacements

Shorten free rent periods and increase contracted rent

Realize bottoming out internal growth

Move on to stage of full-fledged recovery of rental income

20

FP21 (Aug. 2012) Actual Results

Future Policies

Summary

Aim for improvement of annual distribution per unit

from the ¥22,000 level to the ¥23,000 level

Internal growthInternal growth

External growthExternal growth

Financial strategyFinancial strategy

Occupancy rate increased primarily in offices

Improved stability and profitability through diversified investments

Reduce financial costs, maintain and strengthen stability on financial base

Endeavor to bottom out rental revenue without depending on market recovery

Promote improvement of profitability and quality of portfolio through assetreplacement while continuously emphasizing on yield after depreciation

Continuously promote cost reduction and reinforce stability on financial base

Achieved ¥11,656 distribution per unit

(¥1,156 more than forecast at the beginning of fiscal period)

Internal growthInternal growth

External growthExternal growth

Financial strategyFinancial strategy

21

Appendix

22Financial Highlights （Results)

FP17 FP18 FP19 FP20 FP21

Aug. 2010 Feb. 2011 Aug. 2011 Feb. 2012 Aug. 2012

Depreciation 2,069 2,171 2,408 2,660 2,772

Funds From Operation 5,293 5,537 5,472 6,090 5,965

CAPEX 78 54 234 262 379

(Million yen)

(Million yen)

FP17 FP18 FP19 FP20 FP21

Aug. 2010 Feb. 2011 Aug. 2011 Feb. 2012 Aug. 2012

Operating Revenues 11,701 10,741 11,533 12,151 12,271

Operating Income 5,887 4,790 4,963 5,187 5,032

Net Income 4,308 3,291 3,308 3,430 3,315

Unitholders' Capital 137,814 137,814 150,895 150,895 150,895

Net Assets 142,122 141,373 154,471 154,326 154,279

Total Assets 305,619 318,738 341,514 345,469 344,997

No.of investment units issued (units) 251,622 251,622 284,434 284,434 284,434

Net Assets per Unit (yen) 564,825 561,847 543,084 542,575 542,409

Distribution per Unit (yen) 16,061 13,083 12,571 11,822 11,656

Funds Fom Operations=Calculated in adding depreciation and amortization expenses to earnings excruded sale gain&loss

23

Round-Cross Shibuya Round-Cross Shinjuku

Incorporated the needs of shops based on customervisits utilizing the property’s good accessibility fromShinjuku Station and visibility as it is located on Koshu-kaido Street, and attracted a convenience store to the1st floor and a retail store to the 2nd floor.

Attracted a finance-related firm to the upper floorswhich are office areas.

Succeeded in 100% leasing up without down time.

Aoyama Suncrest Building

Implementation of flexible leasing strategiesImplementation of flexible leasing strategies

Feb. 2012100％

Apr. 20120％

Sep. 2012100％

Dec. 2012100％

Jan. 201361.5％

Feb. 2013100％

Jun. 201274.7％

Jul. 201298.6％

FP21 Leasing Results ① Completely filled up the building vacated byCompletely filled up the building vacated by aa

single tenantsingle tenant Fully filled up the space vacated by aFully filled up the space vacated by a

major tenantmajor tenant

Single tenant vacated in March 2012

We dug deep into the needs of domestic demand relatedcompanies such as information and communications-relatedcompanies, utilizing the characteristics of the Shibuya areawhich is home to many IT-related companies. After attentiveinteraction with several candidate tenants, the property wassuccessfully filled up 100% by the end of September 2012.

Incorporated short-term use needs from the property’scloseness to Gaienmae Station and location excellence as it issituated along Aoyama-dori Street, and attracted a residentialmodel room by the fixed-time house rental.

24

・

Tenants with various business lines were strategically attracted to the propertyutilizing its merits as a complex facility comprised of offices, retail and hotelsections, etc., and strategically formulating the property’s overall image,direction, brand, etc. after conducting a survey of the market area.

Realized a composition of a variety of tenants, most from business typeslacking in the area, such as clinics, a variety of restaurants, wedding hall, etc.

Leased out primarily to Asian firms and companies with many business tripsinside and outside the company by advertising the property’s favorableaccess to Haneda Airport.

Attentively dealt with companies that are small but growing significantlysuch as by segmenting floor space. Succeeded in contracting with 12tenants during FP21 by utilizing the mobility of direct PM.

Implementation of leasing strategies in utilizing characteristicImplementation of leasing strategies in utilizing characteristics property and areas property and area

Seafort Square Center Building

Re

tail

Lo

tO

ffice

Lo

t

Implementation of Tenant MerchandisingImplementation of Tenant Merchandising

Strengthening of Tenant RelationsStrengthening of Tenant Relations

Stronger relations were established with existing tenants with attentiveinteraction such as operational cooperation, etc.

Contracts were renewed with all 7 tenants (out of a total of 26 tenants) whosecontracts expired. Rents were successfully increased with a portion of tenants.The stable occupancy of existing tenants was firmly maintained.

Implementation of Direct PM Utilizing Area CharacteristicsImplementation of Direct PM Utilizing Area Characteristics

Feb. 201281.2％

Dec. 201295.8％

Oct. 201160.3％

Oct. 201282.2％

FP21 Leasing Results ②

25

7F6F5F New shop4F3F2F1FB1F OfficeB2F Shop

Tutorschool

Shop

7F6F5F4F3F2F1FB1F OfficeB2F Shop

Office

Shop

aune Kohoku

5Fchangedproperty use

Before After

Introduce new tenants by changing property useIntroduce new tenants by changing property use

Jan. 2012

79.4％

Oct. 201293.0％

＜Image of new restaurant area＞

FP21 Leasing Results ③Implementation of renewal strategy to meet area characteristicsImplementation of renewal strategy to meet area characteristics

The property’s superiority as a retail facility is high, with its transportation convenience (1-minutewalk from Yokohama Municipal Subway Center-Minami Station) and excellent visibility due to itslocation in front of station square.

This property is located in one of Japanese preeminent commuter towns, Kohoku New Town.Two tutor schools were brought into the upper floors by utilizing the characteristics which is oneof the highest educational standard neighborhood in Kanagawa Prefecture.

The neighborhood is short of restaurant against the number of office workers at ward office,etc. , so the leasing strategy for the 5th floor was changed from office to retail. Consequently,the extension of contract periods was realized.

Under the market circumstance mentioned above, the restaurant zone composed of four floorsis a strong point. By implementing the tenant merchandising to meet the propertycharacteristics which can target office workers on weekdays and families on weekends, arestaurant which opens their shop in Kanagawa market was successfully secured.Contracted first lease with one tenant. Received lease applications from two tenants.

26Major Tenants

Top 10 Tenants as of 21th Period End (Reference) As of 20th Period End

Note 1. Share of total rented space uses figures as of the end of the fiscal period.

Note 2. The name is not disclosed because the tenant has not consented to disclosure.

Note 3. The master lessees of the same level listed in the master lease agreement.

Sector Property NameRented Space

(㎡)

Share of Total

Rented Space

（％）

1NIPPON EXPRESS

Co., Ltd.Transportation

Sakai Logistics Center

North Building64,004.80 10.4

2Arcland Sakamoto

Co., Ltd.Retailer

Home Center Musashi

Sendai Izumi (Land)56,109.95 9.1

3 SENKO Co., Ltd. Transportation Ichikawa Logistics Center 37,456.96 6.1

4Keiyo Distribution

Warehouse Co., Ltd.Warehousing Toda Logistics Center 36,158.60 5.8

5DAIKYO REALDO

INCORPORATEDReal Estate

Belle Face Osaka Shinmachi

Belle Face Miyamachi

Belle Face Kamata

Belle Face Hongo Yumicho

Belle Face Togoshi Statio

We Will Hatchobori

Belle Face Bansui-street

Round-Cross minamiazabu

Round-Cross Tsukiji

33,389.32 5.4

6 Fujita Kanko Inc. Hotel Cross Gate 19,744.39 3.2

7ORIX Real Estate

CorporationReal Estate

Morioka Minami Shopping

Center Sansa

Shibaura Island Bloom

Tower

19,474.66 3.2

8 (Not disclosed)Note 2 Transportation Komaki Logistics Center 18,089.76 2.9

9 Cainz Co., Ltd. RetailerKobe Momoyamadai

Shopping Center (Land)16,715.94 2.7

10

Mitsui Fudosan

Housing Lease

Co.,Ltd.

R.A. Asset

Manegement Inc.Note 3

Real Estate Shibaura Island Air Tower 12,423.04 2.0

313,567.42 50.7Total

Name of Tenant

Rented

Space

(㎡)

Share of Total

Rented Space

（％）

1NIPPON EXPRESS

Co., Ltd.64,004.80 10.7

2Arcland Sakamoto

Co., Ltd.56,109.95 9.4

3 SENKO Co., Ltd. 37,456.96 6.3

4Keiyo Distribution

Warehouse Co., Ltd.36,158.60 6.0

5DAIKYO REALDO

INCORPORATED21,967.72 3.7

6 Fujita Kanko Inc. 19,744.39 3.3

7 (Not disclosed)Note 2 19,200.00 3.2

8 (Not disclosed)Note 2 18,089.76 3.0

9 Cainz Co., Ltd. 16,715.94 2.8

10

Mitsui Fudosan

Housing Lease

Co.,Ltd.

R.A. Asset

Manegement Inc.Note 3

12,528.51 2.1

301,976.63 50.4

Name of Tenant

Total

27

Free Rent Rate (Note1): approx. 4％

＝ Tenant replacement rate: 8％ per 6months

× (Free rent: approx. 3 months ÷ 6 months）

Effective Occupancy Rate： approx. 92%

＝ Contracted Occupancy Rate: approx. 96％－ Free Rent Rate: approx.4％

Average of Actual Occupancy Rates(Current situation)

Rent Unit Price (Current situation)

Rent unit price decline rate at tenantreplacement improved due toreduced tenant replacement ratethrough suppressing tenantdepartures

(Note2) Area ratio is the ratio of area where tenant replacements and rent downward revision respectively occur in total rentable area of office properties

Increase of rental income

Reduction of rental incomedecline range

Impact of free rent on rental revenueshrunk due to reduced tenantreplacement rate throughsuppressing tenant departures

△14％×18％＝△2.6％(Total)

△10％×10％＝△1.0％Renewal withrent decline

△20％×8％＝△1.6％Tenant

replacement

Individual unitprice decline

rate×

Area ratio(Note2)＝

Overall rent unitprice decline

rate

Reduced tenant replacement rate by focusing on suppressing tenanReduced tenant replacement rate by focusing on suppressing tenantt departuresdepartures

By reducing tenant replacement rate, work to increaseBy reducing tenant replacement rate, work to increase effectiveeffective occupancy rate and improveoccupancy rate and improverent unit price decline raterent unit price decline rate

(Note1) Free rent rate is the ratio of area where is affected by free rent in total rentable area of office properties

(Office only)

Approach to bottoming out Internal Growth (Image) ①

(Office only)

28

87%

88%

89%

90%

91%

92%

93%

94%

95%

-4%

-2%

0%

2%

4%

FP20(Feb. '12)

FP21(Aug. '12)

FP22(Feb. '13)forecast

FP23(Aug. '13)forecast

FP24onwards

projection

Actual occupancy factor (left axis)

Rent unit price factor (left axis)

Increase/decrease in rental income (left axis)

Effective occupancy rate (right axis)

RentalRental incomeincome bottoming out due tobottoming out due to improvement of effectiveimprovement of effective occupancy rateoccupancy rate as well asas well as rentrentunit priceunit price decliningdeclining raterate

-1 to 2％＋+1 to 2％＝±0％

Unit price factor＋Actual occupancyfactor

＝Rentalincome

RentalRental incomeincome bottoming out due tobottoming out due to improvement of effectiveimprovement of effective occupancyoccupancyraterate as well as rent unit price decliningas well as rent unit price declining raterate

Rental income declining Rental income bottoming out

-2 to 3％＋±0％＝-2 to 3％

Unit price factor＋Actual occupancyfactor

＝Rentalincome

Image of Rental IncomeBottoming Out

Rental income bottoming outRental income bottoming outRental income decliningRental income declining

Rental income decline reduced due to improvement inoverall rent unit price declining

Income increased due to improvement ofeffective occupancy rate

Step2: Suppress tenant departuresStep2: Suppress tenant departuresStep1: Improvement of contractoccupancy rate

Step1: Improvement of contractoccupancy rate

(Office only)

Approach to bottoming out Internal Growth (Image) ②

29

HeiseikankouHeiseikankou SapporoSapporo EkimaeEkimae BuildingBuilding

96.0%Price/Appraisal

¥1,980 millionAppraisal Value

2,685.39㎡Total Floor Area

ORIX Real Estate CorporationSeller

323.96㎡Land Area

8 above ground and 2 belowground

Floors

Jul. 1994Built

¥1,900 millionPrice

June 29, 2012Acquired

Sapporo City, HokkaidoLocation

The property is a retail facility located an approximatelytwo minutes walk from JR Sapporo Station and a oneminute walk from the Sapporo Municipal SubwaySapporo Station in Chuo-ku of Sapporo City.

The surrounding area is a central commercial andbusiness area with many large-scale retail facilities andoffices. As it is very close to the entrance/exit of anunderpass connecting JR Sapporo Station and theMunicipal Subway Odori Station, the location hasexcellent accessibility to transportation.

LocationLocation

The property is a retail facility built in July 1994 with 8floors above ground and 2 floors underground. In 1995the building received the 7th Sapporo Urban DesignAward, given to buildings that positively contribute tothe urban landscape.

Currently, the property is contracted with 4 tenantswith medium to long-term lease agreements of 5 to 10years, and stable cash flow can be expected goingforward.

Building Facilities and TenantsBuilding Facilities and Tenants

Acquired aAcquired a ““StationStation--Front Retail FacilityFront Retail Facility”” nearby JR Sapporo Station with excellent transportationnearby JR Sapporo Station with excellent transportationaccessaccess

New Acquisition from FP21 onwards ①

30

Morioka Minami Shopping Center Sansa Located in a dense residential area approximately 5

kilometers south of central Morioka City. New generationfamily with high purchasing power make up a large proportionof the population in that area.

Population growth rate of the surrounding area showssignificant growth in Iwate Prefecture, with the trade zonehaving a population of approximately 57,000 within a 3kilometer radius and approximately 125,000 within a 5kilometer radius.

Location, trade areaLocation, trade area

Tenants are composed of approximately 30 shops with thesupermarket Universe, a supermarket with superiority inproduct lineup and freshness of goods, both considered topclass in the community, and drugstore Sundrug as the coretenants as well as mall-type shops selling daily commodities.

Mainly composed of shops selling goods that support dailyliving for the residents of the community, the commercialfacility has the ability to attract other customers as well.

Universe Co., Ltd., a main tenant, enjoys highcreditworthiness as it belongs to the ARCS group, whichconducts supermarket business centering on Hokkaido andNorth Tohoku districts and boasts the second largest salesvolume among food supermarket operators in Japan.

Business types, competitiveness, etc.Business types, competitiveness, etc.

AcquiredAcquired a Na Neighborhoodeighborhood--typetype SShoppinghopping CCenter (NSC) located inenter (NSC) located in thethe suburban area of Moriokasuburban area of MoriokaCityCity growinggrowing populationpopulation

Stable earnings is expected as a rent guarantee-type masterlease agreement was signed with ORIX Real EstateCorporation.

Contract TypeContract Type



1 above groundfloor

Floors

November 2006Built

Dufftown GKSeller

17,101.50m2Total Floor Area

35,690.97m2Land Area


July 31, 2012Acquired

Morioka City, IwateLocation

New Acquisition from FP21 onwards ②

31

Belle Face Miyamachi Belle Face Bansui-Street

AcquiAcquiredred 22 rresidenceesidence propertiesproperties in Sendaiin Sendai AArea, expected for future growth.rea, expected for future growth.


￥1,580 millionAppraisal Value


ORIX Real EstateCorporation

Seller

3,769.88㎡(Privateroad (common use)247.25 ㎡)

Land Area

10 above groundFloors

September 2007Built

￥1,500 millionPrice

April 5，2012Acquired

Sendai City,Miyagi

Location


￥873 millionAppraisal Value


ORIX Real EstateCorporation

Seller

537.51㎡Land Area

12 above ground

1 below groundFloors

January 2008Built

￥832 millionPrice

April 5，2012Acquired

Sendai City,

MiyagiLocation

New Acquisition from FP21 onwards ③

32

Belle Face Togoshi Statio Belle Face MeguroBelle Face Mishuku

Acquired 3Acquired 3 residenceresidence properties in central Tokyoproperties in central Tokyo,, with excellent conveniencewith excellent convenienceas well as proas well as profitability & stabilityfitability & stability


￥2,110 millonAppraisal Value

Building: 3,239.37 ㎡ (total floor area,includes 24.44 ㎡ garbage collectionancillary)

Total Floor Area

GK CREP investment JSeller

1,677.56㎡Land Area

4 above ground 1 below groundFloors

June 2007Built

￥2,000 millonPrice

March 30，2012Acquired

Setagaya Ward，TokyoLocation



3,894.90m2Total Floor Area


703.12m2Land Area


November 2009Built


May 9, 2012Acquired

Shinagawa ward, TokyoLocation






14 above ground 1 below groundFloors

Feburuary 2010Built


October 19, 2012Acquired (schedule)

Shinagawa ward, TokyoLocation

Note: “Belle Face Mishuku” was renamed from “Lios Mishuku” as of October 1, 2012.

New Acquisition from FP21 onwards ④

33

A highly popular area due to a superior livingenvironment with a cityscape of residential andcommercial facilities, parks and greenery, as well asroadways, etc. due to a well-planned land blockreorganization.

Property type is expected to have high demand into thefuture due to the advance of the aging society.

GOOD TIME LIVING Shin-urayasu




HospitalityResidence/TwoSpecial PurposeCompanies

Seller



October 2006Built


September 6, 2012Acquired

Urayasu City, ChibaLocation

Location and Business PotentialLocation and Business Potential

The property is designed as fee-based senior housingwith nursing care and is comprised of 74 rooms in total,of which 66 rooms are single occupancy and 8 roomsare double occupancy. In addition, the facility includesrestaurants, party rooms, beauty/hair salon, etc.,providing “high quality living” not just limited to nursingcare and medical services.

The operator, ORIX Living Corporation, operates 20facilities in the greater Tokyo area and the Kansai areawith the concept of “providing a thorough combinationof living, nursing care and medical services” as part ofthe ORIX Group.

Building Facilities and OperatorsBuilding Facilities and Operators

AcquiredAcquired aa FFeeee--basedbased senior Hsenior Housousee with nursing care which stable occupancy is expected goingwith nursing care which stable occupancy is expected goingforwardforward

A rent guarantee-type master lease agreement hasbeen signed with ORIX Real Estate Corporation andstable earnings are expected.

Contract TypeContract Type

New Acquisition from FP21 onwards ⑤

34External Growth ～Basic Investment Policy～

Use Region

Property Size Portfolio Management

Generally speaking, we will invest in office-use real estate-relatedassets with a value of 60% or more (on an acquisition price basis)of our total portfolio. Also through investing in a wide variety ofreal estate-related assets, including logistics facilities, retailfacilities, residential and other properties, we aim to construct aportfolio based on an integrated model. Diverse investments areexpected to reduce exposure to risk, and help maintain andincrease the stability and growth potential of distributions over themedium to long term.

We will invest 80% or more of the total portfolio (on anacquisition price basis) in the greater Tokyo area (Tokyo,Kanagawa, Saitama and Chiba). In order to improveprofitabilityin total portfolio, we also invest in candidates based on setcriteria outside the greater Tokyo area.

For offices in particular, our general rule for investment is to focuson medium-sized or larger real estate-related assets, but at thesame time, reduce the investment risk concentrated in eachspecific property. With regard to real estate-related assets fornon-office use, OJR will make investment decisions taking intoconsideration a variety of factors including the characteristics ofeach sector such as property size.

To enable us to respond effectively to changes in the businessenvironment by adjusting our portfolio accordingly, we employa flexible policy allowing us to make swift decisions onacquiring, holding, and selling real estate-related assets.

Aiming at creating strong portfolio with both stability and growth potential

×

OthersOthers

GreaterTokyo AreaOffices

35

Yield

H

L

Current Situation

Investment Strategy

Investment focused on retail with both “profitability”and “stability” as caution is still required for the timebeing with regard to the office market.

By continuously selling properties with relatively low yieldafter depreciation as well as older small-scale properties,endeavor to improve the portfolio profitability (yieldafter depreciation) and quality by promoting assetreplacements.

Image of Acquisition Yields

Image of Positioning for Each Sector

Bottom Recovery Expansion Recession

Image of Rents Rents for residential and logistics are in a recovery but

that of offices and urban retail are still at the bottom. The vacancy rate of offices is high due to the excessive

supply in central Tokyo but a gradual improvement isexpected going forward. However, the situation stillneeds to be watched with caution due to globaleconomic uncertainties. Though rents seem to bebottoming out, some more time is thought to be neededfor a recovery.

For retail, sales at NSCs and category killers thathandle daily necessities are steady, generating stablerental revenue.

Market Outlook and Investment Strategy

Property MarketProperty Market

Rental MarketRental Market

Acquisition yields are on a recovery trend in the orderof residential, logistics, office and retail.

There is a strong drive primarily among REITs toacquire properties in all sectors, but there is shortage ofprime properties.


Note: Ovals indicate the range of properties that OJR envisages as targets for acquisition.

RetailOffice

Residential

Logistics

Retail

Office

Residential

Logistics

Office

Retail

Residential Logistics

More growth potential Profitability More stability

36

New asking rents are being adjusted especially in central Tokyo whererents had once increased, and there is a sense that rents are bottomingout.

Sales of supermarket and category killers that are closely-attached toliving are steady.

In the real estate rental market, there is an increasing drive amongrestaurants and retail stores to open, and new activities such as openingnew business type stores are seen.

Current Situation

Investment Strategy

Market sentiment image

NSC・Category killerRent

Yield

Selectively invest to construct stable portfolio.

• Comprehensive consideration of location, population size ofcommercial area, tenant business type, ease of tenant replacement,contract types, etc.

• Diversification of property types, regions, tenants, etc. In present environment, prioritize NSCs having supermarkets as core

tenants.

Urban-type rent

Transactions of retail facilities (including lands)

Sales by major retail business type(Year-on-year, all store basis)




Movement of acquisitions including in regional areas due in part to an increasein equity finance including IPOs by REITs.

Acquisitions are on an increasing trend with 2009 at the bottom. Competition over prime properties seen in line with improvement in fund

procurement environment.

Retail Market Outlook and Investment Strategy

Source: Prepared by OAM based on official data by Association of Japan Department Store,Association of Japan Franchise Chain, Association of Japan Super Market, Association of All JapanSuper Market, Association of New Japan Supermarket Market.

Source: Prepared by OAM based on real estate market Report second half of 2012 byTMAX Co, Ltd.

-5

0

5

10

15

1st halfof 2008

2nd halfof 2008

1st halfof 2009

2nd halfof 2009

1st halfof 2010

2nd halfof 2010

1st halfof 2011

2nd halfof 2011

1st halfof 2012

（No. of property）

Tokyo Metropolitan area SoldDistrict Increase

37OJR’s Target Retail Facilities

○○○△△

Urban-type retailfacilities

Category killersNSC

（Neighbourhood ShoppingCenter）(Note2)

Large-scaleShopping Center

GMS（General Marchandise

Store）(Note1)

Community-based NSCsCommunityCommunity--basedbased NSCsNSCs Category killersCategory killersCategory killers Urban retail facilitiesUrban retail facilitiesUrban retail facilities

Automobile Distance+ Walking Distance

Retail facilities with growthRetail facilities with growthpotentialpotential

by introducing tenants reflectingtrends

Specialty storesSpecialty storesretailing highly specialized products or

products with competitive price

HighHigh＜＜visiting frequencyvisiting frequency＞＞facilitiesfacilitiesfully lined up with stores retailing daily

necessities

Features

TargetArea

Tenant

Contract

Example(Miyagi Prefecture)

Maruetsu Sagamino

（Kanagawa Prefecture）

Home Center MusashiSendai Izumi

Okayama KumeRetail Facility

(Okayama Prefecture)

Morioka Minami ShoppingCenter Sansa

（Iwate Prefecture）

Heiseikankou SapporoEkimae Building

(Sapporo, Hokkaido Prefecture)

aune Kohoku

(Kanagawa Prefecture)

(Note 1) General merchandise stores (GMS) refer to supermarkets that develop large-scale stores comprehensively stocked with products necessary for living, fromfood, clothes, home electrical appliances to household goods, in a nationwide manner.

(Note 2) Neighborhood shopping centers (NSC) refer to shopping centers targeting small trade zones such as nearby communities and having a drugstore, homecenter, etc. as tenants and a supermarket as the core tenant.

Food stores and supermarkets anchoredFood stores and supermarkets anchored

Wide variety of tenants fromnational chain stores to local

leading companies

<Daily use>

Walking Distance targetingneighborhood residents

Successful category killers(national top class stores)

<Daily use & weekends>

HHome centers, discount stores, etc.ome centers, discount stores, etc.

Mix of tenants by taking advantageof the location’s features

<Visited by office workers on weekdaysand families on weekends>

RRestaurants and specialty shopsestaurants and specialty shops

Mainly long-term and fixed-term lease

Mainly long-term andfixed-term lease

Mainly medium-term (about 5 years)lease which can be expected upside rent

Terminal stationsin Greater Tokyo Area

38

0

1

2

3

4

5

6

7

8

9

10

0

5,000

10,000

15,000

20,000

25,000

Jan-2002 Jan-2003 Jan-2004 Jan-2005 Jan-2006 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012

(%)（Yen/Tsubo）

Average rent/Average Vacancy rate/Average

4.5

5.0

5.5

6.0

6.5

7.0

1st half of2006

1st half of2007

1st half of2008

1st half of2009

1st half of2010

1st half of2011

1st half of2012

(%)

National average Sendai The 23 wards of Tokyo Osaka

Office Vacancy Rate and Rentin Tokyo Business Area

Capitalization Rates Change

Investment Strategy

Current Situation



Strong demand primarily among REITs to acquire properties, butshortage of prime properties. Concentration of new supply onClass S buildings, Market transactions are limited as priceperception between sellers and buyers does not match. However,the number of transactions is starting to increase.

Acquisition yields are showing signs of gradual decline mainly inGreater Tokyo Area.

It seems to be movements to acquire regional prime properties aspart of portfolio strategies.

Vacancy rate remains high due to excessive supply in centralTokyo. A gradual improvement is expected but the situation stillneeds to be watched with caution due to global economicuncertainties.

Rent seems to be bottoming out but it is believed that more timeis yet needed for recovery.

Place our emphasis on stability and selectively invest inproperties for which future potential can be expected.

• Properties of medium size (note) or larger with widetenant classes

• Competitive and relatively new properties in primelocations

• Properties with small market rent gap

Note: Medium-sized properties, particularly for offices, refer to those witha total floor area of 3,000m2 to 15,000m2.

Office Market Outlook and Investment Strategy

Source: Prepared by OAM based on data from Miki Shoji Co., Ltd.

Source: Prepared by OAM based on real estate market Report second half of 2012 by TMAX Co, Ltd.

39

4.5

5.0

5.5

6.0

6.5

7.0

1st half of2009

2nd half of2009

1st half of2010

2nd half of2010

1st half of2011

2nd half of2011

1st half of2012

（％）


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1st half of2009

2nd half of2009

1st half of2010

2nd half of2010

1st half of2011

2nd half of2011

1st half of2012

(Yen/Tsubo)


Occupancy Rate Change by Region

Investment Strategy

Contract Rent Change by Region

Capitalization Rate Change by Region

Residential Market Outlook and Investment Strategy

Current Situation



Demand for prime properties in Tokyo is strong and there isa sense of scarcity. As such, demand is spreading toregional areas and a decline of yields can be seen includingin the Sendai area.

Occupancy rates are improving both in central Tokyo andregional areas.

Sendai in particular has an occupancy rate close to 100%and rents are also rising due to factors such as relocationdemand due to the earthquake and such.

Primarily invest in single/compact types* targeting middle-income groups (the volume market) in which demand isstrong as rents are steady.

Focus on location, such as convenience in terms of work andschool commute (distance to nearest station and city center).

Target buildings 10 years old or less (at acquisition).

Note: The “single” type is defined as having less than 40m2 of exclusive area;the “compact” type as having at least 40m2 but less than 60m2.


85

90

95

100

1st half of2009

2nd half of2009

1st half of2010

2nd half of2010

1st half of2011

2nd half of2011

1st half of2012

(%)


40

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1st halfof 2012

（Yen/Tsubo）

Tokyo Kanagawa Saitama Chiba

5.0

5.5

6.0

1st half of2009

2nd half of2009

1st half of2010

2nd half of2010

1st half of2011

2nd half of2011

1st half of2012

（％）

National average Tokyo Metropolitan AreaKeihanshin district

Current Situation

Investment Strategy

New Supply Space Change

Capitalization Rate Change

Average Asking Rent Change for Large Logistics Facilitiesin Tokyo Metropolitan Area

Industrial Market Outlook and Investment Strategy



Partly due to entry of new players such as REITs, overseasinvestors and private placement funds, there is a strong drive toacquire properties. On the other hand, the situation withshortage of prime properties is continuing and transaction yieldsare trending downwards.

Demand is steady especially for large and high-spec properties,coinciding with the business line expansion of third partylogistics (3PL) and the mail-order industry. There were signs ofrents increasing in some regions, but the upper limit of rent maybe slow to improve as there is large supply scheduled for theMisato and Kashiwa area and Atsugi and Sagamihara area inthe future.

Note : 「3PL」 refers to inclusive and comprehensive outsourcing services thataim to make logistics functions in corporate activities more effective andsophisticated.

Selective investment in properties that combine outstandinglocation with high standard specifications.

Emphasis on tenant credit worthiness and long-term leasecontract for build to suit (BTS) (Note 1); tenant substitutionand contract type for multiple-type (Note 2) facilities.

Note 1: Build to Suit (BTS) is a logistics facility developed to meet buildingspecifications requested by the tenant.

Note 2: A multiple type is a logistics facility developed on the assumption that itcan be used by multi-tenants at the same time.ｃ

Source: Prepared by OAM based on data CBRE Japan K.K.

Source: Prepared by OAM based on data CBRE Japan K.K.


0

500,000

1,000,000

1,500,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(Scheduled)

2013

（㎡）

41

99.6 104.9114.4

141.5153.2 148.9

176.7 174.8

197.9209.0

235.6 231.0

262.3 269.5 277.5 277.5

300.8311.0

338.4 343.3 350.9 355.8

-100.0

-50.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0 Office Retail Residential Other 系列5 Sold

Portfolio Strategy

（billions of yen）

Improvement of portfolio quality through asset replacementsImprovement of portfolio quality through asset replacements

Office Logistics Retail Residential Others Sold

（11.2）End

FP18

(11.8)End

FP19

(12.2)End

FP20

(10.8)End

FP17

(10.2)（09.8）（09.2）（08.8）（08.2）（07.8）（07.2）（06.8）（06.2）（05.8）（05.2）（04.8）（04.2）（03.8）（03.2）（02.8）EndEndEndEndEndEndEndEndEndEndEndEndEndEndEndEnd

FP16FP15FP14FP13FP12FP11FP10FP9FP8FP7FP6FP5FP4FP3FP2FP1

(12.8)End

FP21

Flexible and dynamic property acquisition, keeping stepFlexible and dynamic property acquisition, keeping stepwith changes in the circumstancewith changes in the circumstance

42

as of the end of FP21 (August 2012)

Portfolio Diversification (acquisition price base)

Retail Facilities8.0％

ResidentialProperties

10.3％

Others4.3％

Maintained overall portfolioMaintained overall portfolio’’s yield by selectively investing in residences, retail facilities yield by selectively investing in residences, retail facilitiessand logistics facilities with staband logistics facilities with stabilityility

Offices68.7％

LogisticsFacilities

8.8％

4.1%Yield after depreciation3.5%Yield after depreciation

5.7%Leasing NOI yield6.1%Leasing NOI yield

100.0%Occupancy rate95.7%Occupancy rate

1No.12No.

¥15.0 bilAcquisition price ratio¥36.1 bilAcquisition price ratio

Others (Cross Gate)Residential Properties




10No.4No.


Retail FacilitiesLogistics Facilities




41No.68No.


OfficesPortfolio Overall

Effect of Property Type Diversification

Note: Leasing NOI yields are calculated in dividing leasing NOI in 21FP byacquisition price. Yield after depreciation are calculated in dividinggain/loss from properties in 21FP by the book value.

43List of Properties Disposition

Note 1. The age of property is recorded on the date of sale.

Note 2. The book value is based on figures at the end of the fiscal period before the fiscal period in which the date of the sale falls.

Note 1Note 2

Note 1Note 2

(Note1) (Note2)

Disposition Old , SmallDisposition Old , Small--Scaled Properties in consideration of PL impactScaled Properties in consideration of PL impact

FP of

Disposition

Date of

DispositionProperty

TypeAge of

property

(years)

Acquisition

Price

（Million yen）

Sale Price

（①）

（Million yen）

Book value

（②）（Million yen）

①－②

（Million yen）

Landic Akasaka Building Office 33.4 11,580 12,950 11,799 1,150

Landic Akasaka Building 3 Office 25.0 698 850 728 121

10th Sep 1, 2006 Akasaka Kyowa Building Office 28.3 2,087 2,500 2,077 422

12th Dec 26, 2007 Round-Cross Aoyama Office 21.2 4,529 5,250 4,723 526

14th Sep 25, 2008 Round-Cross Shinsaibashi Office 22.4 13,600 14,500 14,199 300

15th Mar 27, 2009 ORE Nagoya Fushimi Building Office 5.1 10,040 10,680 9,469 1,210

Mar 10, 2010 ORIX Jimbo-cho Building Office 13.0 4,177 4,150 3,989 160

Mar 26, 2010 ORIX Shinjuku Building Office 6.9 8,300 9,000 7,872 1,127

Jun 10, 2010 Grand Maison Hakusan Residential 17.1 455 425 411 13

Jul 15, 2010 Round-Cross Akasaka Mitsuke Office 22.5 1,650 1,785 1,661 123

18th Dec 27, 2010 Sonet Kami Ikebukuro Residential 13.9 2,377 2,146 2,061 84

19th Mar 1, 2011 Round-Cross Moto Yoyogi Office 18.9 5,091 4,807 4,393 413

20th Feb 14, 2012 Beside Shirogane Office 22.5 1,300 1,360 1,264 95

21th Aug 28, 2012 Koshigaya Logistics Center Logistics 6.6 4,000 3,830 3,685 144

9th

17th

Jun 1, 2006

(Note 1) (Note 2)

44

¥857.5 billionTotal

0,50.3Logistics

209.9Retail

163.2Rental condo

120.4Other

313.7Office

Balance of Leased Real Estate Assetsin Real Estate Segment (billions of yen)

Summary of Properties Acquired throughSynergies with the ORIX Group since IPO

Newconstruction

(2 years old orless)

51.0%

Over 2 yearsof age

Strengths of ORIX

Composed of domestic andforeign companies ranging

from small to mid-sized, andstable medium-scale to major

companies

Customer Base

Needs Propose solutions

MaintenanceLease

Realestate

Corporatefinancialservices

Retail Investment inbusinesses

Overseas

UniqueUniqueanswersanswers

Fusion ofFusion ofknowledgeknowledge

and team playand team play

Provide unique answers through the fusion ofknowledge and team play

Average age(Note)

4.2 years

Synergy with the ORIX Group

Source: Financial briefing materials for the 1st quarter of thefiscal year ending March 2013, ORIX Corporation

¥303.1 billionTotal acquisitionprice

89.7％

Ratio of allpropertiesacquired sinceIPO

50No. of propertiesacquired

〔As of August 31, 2012〕〔By building age (Note)〕

Note: Age at time of acquisition.

45Portfolio Summary

Note : “Belle Face Mishuku” was renamed from “LIOS Mishuku” as of October 1, 2012

List of all real estate owned by ORIX JREIT at the end of the 21th fiscal period

Date Price(￥million)

Aoyama Suncrest Building December 1. 2001 3,356 1.0

Round-Cross Ichi-bancho December 1. 2001 3,900 1.1

Round-Cross Nishi Shinjuku December 1. 2001 2,650 0.8

DT Gaien December 21. 2001 2,430 0.7

Nihonbashi East Building December 21. 2001 1,720 0.5

Yoyogi Forest Building December 21. 2001 1,473 0.4

Round-Cross Minami Azabu December 21. 2001 1,394 0.4

Round-Cross Akasaka January 10. 2002 2,624 0.7

Round-Cross Mita January 10. 2002 1,748 0.5

Shiba Daimon Building January 10. 2002 2,195 0.6

Round-Cross Tsukiji January 10. 2002 3,378 1.0

ORIX Shiba 2-chome Building September 29. 2003 7,500 2.1

Aoyama 246 Building March 3. 2004 5,200 1.5

Round-Cross Shinjuku April 28. 2006 8,020 2.3

September 30. 2005

April 28. 2006

June 26 . 2006

December 4. 2006

Round-Cross Shinjuku 5-chome April 26. 2007 4,500 1.3

Nihonbashi Honcho 1-chome Building March 28. 2007 10,500 3.0

Round-Cross Shibuya March 28. 2008 3,500 1.0

ORIX Suidobashi Building March 28. 2008 3,000 0.9

ORIX Shinagawa Building June 27. 2008 15,200 4.3

ORIX Real Estate Nishi Shinjuku Building March 27. 2009 13,600 3.9

OX Tamachi Building March 29. 2010 6,730 1.9

Subtotal 23 properties 144,478 41.2

Carrot Tower December 1. 2001 5,479 1.6

Toyo MK Building December 1. 2001 5,270 1.5

Beside Kiba December 21. 2001 2,450 0.7

ORIX Ikebukuro Building April 18. 2003 9,577 2.7

Round-Cross Kamata March 1. 2006 5,640 1.6

KN Jiyugaoka Plaza May 30. 2007 3,110 0.9

ORIX Meguro Building July 29. 2010 6,350 1.8

Akihabara Business Center June 1. 2011 5,060 1.4


Neo City Mitaka December 1. 2001 2,200 0.6

Round-Cross Kawasaki April 27. 2004 4,130 1.2

Omiya Miyacho Building March 27. 2009 4,400 1.3

Omiya Shimocho 1-chome Building March 29. 2010 3,750 1.1


Nagoya Itochu Building September 29. 2003 4,500 1.3

ORIX Koraibashi Building April 27. 2005 5,560 1.6

Lunar Sendai June 28. 2007 8,500 2.4

ORIX Nagoya Nishiki Building March 29. 2010 12,500 3.6

ORE Sapporo Building October 1. 2010 4,250 1.2

ORIX Kobe Sannomiya Building September 29. 2011 3,800 1.1


Offices Total 41 properties 241,004 68.7

AreaType

Offices

6 Central

Remaining

Other Parts of

Other Areas

5.1

21,860ORIX Akasaka 2-chome Building

% to

Total Acquisition

Price

Property

Seafort Square Center Building

Acquisition

18,000

6.2

Date Price(￥million)

Toda Logistics Center March 28. 2008 9,600 2.7

Ichikawa Logistics Center September 29. 2008 8,300 2.4


Sakai Logistics Center North Building March 30. 2010 10,200 2.9

Komaki Logistics Center June 30. 2011 2,700 0.8


Logistics Facilities Total 8 properties 30,800 8.8

Nihon Jisho Minami Aoyama Building October 31. 2003 2,548 0.7

CUBE Daikanyama March 31. 2004 2,435 0.7


aune Kohoku March 10. 2010 4,000 1.1

aune Makuhari March 10. 2010 3,600 1.0

Maruetsu Sagamino March 1. 2011 2,350 0.7


Kobe Momoyamadai Shopping Center (Land) March 5. 2010 3,260 0.9

Okayama Kume Retail Facility January 31. 2011 2,750 0.8

Home Center Musashi Sendai Izumi (Land) January 11. 2012 2,350 0.7

Heiseikankou Sapporo Ekimae Building June 29. 2012 1,900 0.5

Morioka Minami Shopping Center Sansa July 31. 2012 2,800 0.8


Retail Facilities Total 10 properties 27,993 8.0

Park Axis Nishi Azabu Stage December 1. 2001 1,219 0.3

Shibaura Island Bloom Tower January 31. 2011 5,550 1.6

We Will Hatchobori June 1. 2011 2,370 0.7

Shibaura Island Air Tower July 28. 2011 6,030 1.7

Belle Face Togoshi Statio May 9. 2012 2,642 0.8


Belle Face Kamata June 1. 2011 3,550 1.0

Belle Face Hongo Yumicho June 1. 2011 3,340 1.0

Belle Face Mishuku March 30. 2012 2,000 0.6


Belle Face Osaka Shinmachi June 1. 2011 3,684 1.0

Belle Face Amagasaki June 1. 2011 3,440 1.0

Belle Face Miyamachi April 5. 2012 1,500 0.4

Belle Face Bansui-street April 5. 2012 832 0.2


Residential 12 Total 36,157 10.3

Cross Gate January 10. 2002 15,040 4.3


Others Total 1 properties 15,040 4.3

350,994.0 100.0Grand Total 68 properties

% to

Total Acquisition

Price

Property

Acquisition

the Greater

Tokyo Area

Other Areas

6 Central

Remaining

Logistics

Facilities

Other Areas

Other Parts of

Retail

Facilities

Apartment

Others

AreaType

Other Areas

6 Central

Other Parts of

46Portfolio Map

47Portfolio Data ①

Average Disposition/Acquisition Price after IPO Property Size (Floor area)

Acquisition Price Ranges Building Age

Average24,084

㎡

Under3,000 m2

8.1%

3.08

Billion yen

5.92Billion yen

Average15,734

㎡

End of 1st Period(Aug. 31, 2002)

Over 15,000 m2

3,000 m2 to15,000 m2

Under3,000 m2

40.3%

46.0%

13.6% Over 15,000 m2

3,000 m2 to15,000 m2

63.0%

28.9%

End of 21th Period(Aug. 31, 2012)

Note: Pie charts show the acquisition price of each property as a proportion of the total acquisition price for all properties with each figure rounded to the first decimal place.Totals may not tally due to rounding.

Disposition Acquisition



Average¥2.55billion

¥1 to ¥5 billion50.2%

¥5 to¥10 billion

15.9%

Under ¥1 billion7.2%

Over ¥10 billion

26.7%


¥1 to ¥5 billion

35.6%

Over ¥10 billion

33.3%Average¥5.16billion

¥5 to ¥10 billion30.9%


5-10yr

24.8%

Under 5yr19.0%

15-20yr6.2%

10-15yr29.6%

Over 20yr

20.4%

Average12.1

years

Average10.7

years

5-10yr

40.3%

Under 5yr

20.7% 15-20yr

10.1%

10-15yr12.3%

Over 20yr

16.6%

Under ¥1 billion

0.2%

48Portfolio Data ②

Area Type


Other Area2.1%

Other Parts of theGreater Tokyo Area

17.3%

17.1%63.5%

6 CentralTokyoWardsRemaining

Tokyo Wards


Other Area21.2% 6 Central

TokyoWards

47.7%

Remaining TokyoWards

14.8%

16.3%

Other Parts of theGreater Tokyo Area



Residentialproperties

4.1%

Retailfacilities1.5%

Others

15.1%

Logisticsfacilities

8.8% Offices

68.7%Offices

79.4%

Retailfacilities

8.0%

Others

4.3%10.3%

Residentialproperties

Note: Pie charts show the acquisition price of each property as a proportion of the total acquisition price for all properties with each figure rounded to the first decimal place.Totals may not tally due to rounding.

49

（％）（billion yen）

Overview of Appraisal Value

Appraised NCF of existing properties are improving due to reductAppraised NCF of existing properties are improving due to reduction of fixed asset/city planning taxion of fixed asset/city planning taxOverall unrealized gain/loss improved due to depreciation expensOverall unrealized gain/loss improved due to depreciation expenses, property acquisitions belowes, property acquisitions below

appraisal value, etc.appraisal value, etc.

Note 1: Unrealized gain/loss is calculated in subtracting the book value from the appraisal value (both as of the end of the fiscal period).Note 2: Unrealized gain/loss ratio is calculated in dividing the unrealized gain/loss by the book value (both as of the end of the fiscal period).

FP12 FP13 FP14 FP15 FP16 FP17 FP18 FP19 FP20 FP21（End of

Feb. 2008）（End of

Aug. 2008）（End of








Aug. 2012）

Number ofproperties

43 47 48 49 49 52 54 62 63 68

Appraisal value(billion yen)

2,653 2,974 2,892 2,733 2,622 2,779 2,850 3,145 3,181 3,271

Book value(billion yen)

2,266 2,567 2,618 2,688 2,669 2,894 2,979 3,243 3,267 3,326

Unrealized gain/loss(billion yen)

386 406 274 44 -47 -114 -128 -97 -86 -54

Unrealized gain/lossratio(%)

17.1 15.8 10.5 1.7 -1.8 -4.0 -4.3 -3.0 -2.7 -1.7

2,653 2,9742,892

2,733 2,622

2,7792,850

3,145 3,181 3,271

17.1%15.8%

10.5%

1.7%

-1.8%

-4.0% -4.3%-3.0% -2.7%

-1.7%

-10

-5

0

5

10

15

20

0

500

1,000

1,500

2,000

2,500

3,000

3,500

FP12 End FP13 End FP14 End FP15 End FP16 End FP17 End FP18 End FP19 End FP20 End FP21 End

Book value Appraisal value Unrealized gain/loss ratio

50

Book value Appraisal CR Gain/loss Change % Change CR Change Chg gain/Loss（\million）（\million）（\million） (\million) (\million)

● Aoyama Suncrest Building 3,451 3,420 4.8% -31 -110 -3.1% 0.0% -97● Round-Cross Ichi-bancho 3,457 3,080 5.1% -377 -220 -6.7% 0.0% -193● Round-Cross Nishi Shinjuku 2,496 2,710 4.6% 213 20 0.7% 0.0% 29● DT Gaien 2,245 2,000 5.0% -245 10 0.5% 0.0% 26● Nihonbashi East Building 1,575 1,210 5.5% -365 30 2.5% 0.0% 17● Yoyogi Forest Building 1,418 1,250 5.3% -168 0 0.0% 0.0% 7● Round-Cross Minami Azabu 1,238 1,302 5.9% 63 5 0.4% 0.0% 13● Round-Cross Akasaka 2,804 2,422 5.8% -382 -38 -1.5% 0.0% -32● Round-Cross Mita 1,669 1,363 5.5% -306 11 0.8% 0.0% 16● Shiba Daimon Building 2,275 2,419 5.5% 143 13 0.5% 0.0% 17● Round-Cross Tsukiji 3,079 3,427 5.5% 347 -50 -1.4% 0.0% -34● ORIX Shiba 2-chome Building 6,652 8,117 5.2% 1,464 58 0.7% 0.0% 105● Aoyama 246 Building 5,390 6,700 4.3% 1,309 -127 -1.9% 0.0% -117● Round-Cross Shinjuku 7,733 8,270 4.5% 536 240 3.0% -0.1% 270● Seafort Square Center Building 16,975 14,050 5.0% -2,925 -200 -1.4% 0.0% -120● ORIX Akasaka 2-chome Building 20,810 19,340 4.3% -1,470 -10 -0.1% 0.0% 90● Round-Cross Shinjuku 5-chome 4,183 3,190 4.7% -993 80 2.6% -0.1% 115● Nihonbashi Honcho 1-chome 10,006 8,440 4.4% -1,566 -10 -0.1% 0.0% 45● ST WORLD Building 3,402 2,220 4.3% -1,182 -10 -0.4% 0.0% 5● ORIX Suidobashi Building 2,886 2,620 4.9% -266 0 0.0% 0.0% 16● ORIX Shinagawa Building 14,837 11,200 4.3% -3,637 0 0.0% 0.0% 60● ORIX Real Estate Nishi Shinjuku 13,498 11,400 4.4% -2,098 100 0.9% 0.0% 144● OX Tamachi Building 6,738 6,750 4.9% 11 0 0.0% 0.0% 9▲ Carrot Tower 4,281 5,450 5.4% 1,168 -130 -2.3% 0.0% -87▲ Toyo MK Building 4,232 5,110 5.7% 877 20 0.4% 0.0% 64▲ Beside Kiba 2,126 2,490 5.6% 363 -30 -1.2% 0.0% -6▲ ORIX Ikebukuro Building 8,629 10,570 4.9% 1,940 -30 -0.3% 0.0% 24▲ Round-Cross Kamata 5,295 5,771 5.7% 475 16 0.3% 0.0% 53▲ KN Jiyugaoka Plaza 3,128 2,630 4.5% -498 -10 -0.4% 0.0% -2▲ ORIX Meguro Building 6,479 6,170 5.1% -309 10 0.2% 0.0% -54▲ Akihabara Business Center 5,019 5,180 4.7% 160 20 0.4% 0.0% 69■ Neo City Mitaka 1,963 2,800 5.7% 836 -130 -4.4% 0.0% -129■ Round-Cross Kawasaki 3,886 4,972 5.6% 1,085 -85 -1.7% 0.0% -55■ Omiya Miyacho Building 4,178 4,240 5.7% 61 -110 -2.5% 0.0% -68■ Omiya Shimocho 1-chome Building 3,652 3,820 5.7% 167 10 0.3% 0.0% 45★ Nagoya Itochu Building 4,847 4,480 6.4% -367 10 0.2% -0.1% 39★ ORIX Koraibashi Building 4,894 4,377 5.2% -517 97 2.3% -0.1% 146★ Lunar Sendai 7,799 5,070 5.8% -2,729 90 1.8% 0.0% 171★ ORIX Nagoya Nishiki Building 11,790 7,700 5.2% -4,090 -60 -0.8% 0.0% 52★ ORE Sapporo Building 4,063 4,528 6.6% 464 33 0.7% 0.0% 105★ ORIX Kobe Sannomiya Building 3,742 3,820 6.0% 77 0 0.0% 0.0% 51

228,836 216,078 - -12,758 - - - -

■ Toda Logistics Center 9,132 9,130 5.2% -2 60 0.7% 0.0% 134■ Ichikawa Logistics Center 7,828 7,740 5.4% -88 50 0.7% 0.0% 132★ Sakai Logistics Center North Building 9,564 11,000 5.7% 1,435 100 0.9% 0.0% 258★ Komaki Logistics Center 2,640 2,830 6.0% 189 50 1.8% -0.1% 91

29,167 30,700 - 1,532 - - - -

Offices

Offices Total

Logistics

Facilities

Logistics Facilities Total

Type Area PropertyEnd of the 21st Fiscal Period Change from the previous Period

※Area symbol: ● 6 Central Tokyo Wards ▲ Remaining Tokyo Wards ■ Other Parts of the Greater Tokyo Area ★ Other Areas

Appraisal value of all properties at the end of the 21st fiscal period

Appraisal Value List at the end of FP21 ①

51

Land 2 5,687 5,672 - -15 29 0.5% - 30

Properties acquired in FP21 6 11,882 12,448 5.9% 565 - - - -

Total 68 332,625 327,136 - -5,489 - - - -


Offices 41 228,836 216,078 5.0% -12,758 -487 -0.2% 0.0% 818Logistics Facilities 4 29,167 30,700 5.5% 1,532 260 0.9% -0.0% 616Retail Facilities 6 17,298 18,761 5.6% 1,462 84 0.4% 0.0% 220Residential Properties 8 28,482 29,977 5.4% 1,494 440 1.5% 0.0% 839Others 1 11,270 13,500 6.4% 2,229 0 0.0% 0.0% 151Total （excluding land and propertiesacquired in FP21）

60 315,054 309,016 5.2% -6,038 297 0.1% -0.0% 2,646

No. of

Properties

End of the 21th Fiscal Period Change from the previous Period

Type


● Nihon Jisho Minami Aoyama Building 2,500 3,356 4.3% 855 -46 -1.4% 0.0% -41● CUBE Daikanyama 2,442 2,246 5.0% -196 -27 -1.2% 0.0% -20■ aune Kohoku 3,849 4,000 5.6% 150 0 0.0% -0.1% 43■ aune Makuhari 3,467 3,900 5.8% 432 90 2.4% -0.1% 129■ Maruetsu Sagamino 2,337 2,430 6.0% 92 40 1.7% -0.1% 52★ Kobe Momoyamadai SC (land) 3,305 3,210 - -95 20 0.6% - 21★ Okayama Kume Retail Facility 2,701 2,829 6.9% 127 27 1.0% 0.0% 57★ Home Center Musashi Sendai Izumi (land) 2,381 2,462 - 80 9 0.4% - 9★ Heiseikankou Sapporo Ekimae Building 1,923 2,000 6.1% 76 - - - -★ Morioka Minami Shopping Center Sansa 2,889 3,080 6.8% 190 - - - -

27,799 29,513 - 1,713 - - - -

● Park Axis Nishi Azabu Stage 1,078 938 5.1% -140 4 0.4% 0.0% 11● Shibaura Island Bloom Tower 5,303 5,608 5.4% 304 0 0.0% 0.0% 100

● We Will Hatchobori 2,346 2,369 4.8% 22 12 0.5% 0.0% 35

● Shibaura Island Air Tower 5,927 6,502 5.4% 574 322 5.2% 0.0% 418

● Belle Face Togoshi Statio 2,661 2,784 5.1% 122 - - - -

▲ Belle Face Kamata 3,505 3,702 5.5% 196 35 1.0% 0.0% 75

▲ Belle Face Hongo Yumicho 3,310 3,461 4.8% 150 2 0.1% 0.0% 34

▲ Belle Face Mishuku 2,054 2,122 5.1% 67 - - - -

★ Belle Face Osaka Shinmachi 3,611 3,994 5.6% 382 70 1.8% -0.1% 127

★ Belle Face Amagasaki 3,397 3,403 5.8% 5 -5 -0.1% -0.1% 35★ Belle Face Miyamachi 1,511 1,580 6.3% 68 - - - -★ Belle Face Bansui-Street 841 882 6.2% 40 - - - -

35,551 37,345 - 1,793 - - - -

■ Cross Gate 11,270 13,500 6.4% 2,229 0 0.0% 0.0% 15111,270 13,500 - 2,229 - - - -

332,625 327,136 - -5,489 - - - -

ResidentialProperties

Residential Properties Total

OthersOthers Total

Total

End of the 21st Fiscal Period Change from the previous Period

RetailFacilities

Retail Facilities Total

Type Area Property

(Following are for reference)

Appraisal value by type (*2) (*3)

Appraisal Value List at the end of FP21 ②

Note 1: For the Kobe Momoyamadai SC (land) and Home Center Musashi Sendai Izumi (land), the appraisal value and CR are not calculated based on the direct capitalization method.Note 2: For fair comparison with the previous period, figures for “CR” in “Appraisal value by Type” are calculated excluding the Kobe Momoyamadai SC (land) and Home Center Musashi Sendai Izumi (land) for which the CR is

not calculated based on the direct capitalization method and also excluding the six properties acquired during FP21.Note 3: Figures for “CR” in “Appraisal value by Type” are calculated on a weighted average basis and rounded to the first decimal place.Note 4: “Belle Face Mishuku” was renamed from “LIOS Mishuku” as of October 1, 2012.

52

13,500

5,000

0

10,000

20,000

30,000

40,000

50,000

60,000

2012 2013 2014 2015 2016 2017 2018 2019

Refinanced in FP22

Refinanced in FP22

Bond

Loan

Financial Institution Limit

Aozora Bank, Ltd. 7,500 28.3 ％Sumitomo Mitsui Trust Bank, Limited. 6,000 22.6 ％Mitsubishi UFJ Trust and Banking Corporation 6,000 22.6 ％The Bank of Tokyo-Mitsubishi UFJ, Ltd. 4,000 15.1 ％Mizuho Corporate Bank, Ltd. 3,000 11.3 ％

Ratio

Financial Institution Outstanding Financial Institution Outstanding

Sumitomo Mitsui Trust Bank, Limited 24,000 16.7 ％ ORIX Bank Corporation 3,500 2.4 ％

Sumitomo Mitsui Banking Corporation 23,556 16.4 ％ THE NISHI-NIPPON CITY BANK, LTD. 1,800 1.2 ％

Mitsubishi UFJ Trust and Banking Corporation 16,900 11.7 ％ Mitsui Life Insurance Company Limited 1,000 0.7 ％

Development Bank of Japan Inc. 16,313 11.3 ％ Hyakugo Bank, Ltd. 1,000 0.7 ％

National Mutual Insurance Federation of

Agricultural Cooperatives10,000 6.9 ％ Shizuoka Bank, Ltd. 1,000 0.7 ％

Norinchukin Bank 8,500 5.9 ％ Taiyo Life Insurance Company 1,000 0.7 ％

Mizuho Corporate Bank, Ltd. 5,800 4.0 ％ Fuji Fire and Marine Insurance 1,000 0.7 ％

Shinkumi Federation Bank 5,800 4.0 ％ THE KAGAWA BANK, Ltd. 1,000 0.7 ％

Aozora Bank, Ltd. 5,700 4.0 ％ Shimane bank, Ltd. 900 0.6 ％

Resona Bank, Limited 5,300 3.7 ％ THE MINATO BANK, LTD. 600 0.4 ％

Shinsei Bank, Limited 4,400 3.1 ％ Toho Bank, Ltd. 500 0.3 ％

Bank of Fukuoka, Ltd. 4,000 2.8 ％ ShinGinko Tokyo, Ltd. 500 0.3 ％

Ratio Ratio

49.7 49.0 49.6 49.6

45

50

55

FP18 End

(Feb. 2011)

FP19 End

(Aug. 2011)

FP20 End

(Feb. 2012)

FP21 End

(Aug. 2012)

1.7

2.8

2.4 2.5

1.0

1.5

2.0

2.5

3.0

FP18 End

(Feb. 2011)

FP19 End

(Aug. 2011)

FP20 End

(Feb. 2012)

FP21 End

(Aug. 2012)

Average years of outstanding borrowing period

History of total asset based LTV

Commitment Lines

Credit Ratings

List of Lenders

Financial Data

4 yrsAug. 12, 20101.44％15,000Unsecured Investment Corporation Bond No. 2

5 yrsNov. 18, 20101.58％15,000Unsecured Investment Corporation Bond No. 3

3 yrsJan. 27, 20111.40％15,000Unsecured Investment Corporation Bond No. 4

2.08％

Interest

3 yrs

Period

12,000

Balance

Feb. 25, 2010Unsecured Investment Corporation Bond No. 1

Issued

Investment Corporation Bonds

Debts outstanding according to Maturity

（years）

（％）

Total: 24 institutions,144,068 million yen

Total: 27,000 million yen



Rating outlook: StableIssuer rating: A+R&I

Rating outlook: StableLong-term senior debt rating: AA-JCR

Outlook: StableLong-term rating: A-, Short-term rating: A-2S&P


Total: 5 institutions,26,500 million yen


53

Individuals, etc. Finance Securities

Other Corp. Overseas

Investment Units

20th period284,434 units

21th period284,434 units

Note 1. In the Top 10 Unitholders table, the second decimal place of the ownership share is cut off, except for “Change” data

Note 2. Metlife Alico JPY. and National Mutual Insurance Federation of Agricultural Cooperatives were not among the 10 unitholders in the 21 th fiscal period, so the numbers of units and share for theprevious fiscal period are not shown.

UnitsShare

（%）Units

Share

（%）Units

Share

（%）Individuals, etc. 56,607 19.9 58,270 20.5 1,663 2.9

Finance 146,575 51.5 145,021 51.0 -1,554 -1.1

Major Banks 5,950 2.1 2,354 0.8 -3,596 -60.4

Regional Banks 19,899 7.0 14,105 5.0 -5,794 -29.1

Trust Banks 90,255 31.7 96,638 34.0 6,383 7.1

Life Insurance 15,082 5.3 19,183 6.7 4,101 27.2

Non-life Ins. 6,515 2.3 4,201 1.5 -2,314 -35.5

Others 8,874 3.1 8,540 3.0 -334 -3.8

Securities 3,924 1.4 6,221 2.2 2,297 58.5

Other Corp. 7,216 2.5 7,649 2.7 433 6.0

Overseas 70,112 24.6 67,273 23.7 -2,839 -4.0

Total 284,434 100.0 284,434 100.0 - -

Unitholder

Categories

FP20 FP21 Change

UnitholdersShare

（%）Unitholders

Share

（%）Unitholders

Share

（%）Individuals, etc. 17,863 97.0 17,837 97.1 -26 -0.1

Finance 78 0.4 74 0.4 -4 -5.1

Major Banks 2 0.0 1 0.0 -1 -50.0

Regional Banks 17 0.1 16 0.1 -1 -5.9

Trust Banks 13 0.1 13 0.1 0 0.0

Life Insurance 7 0.0 8 0.0 1 14.3

Non-life Ins. 4 0.0 3 0.0 -1 -25.0

Others 35 0.2 33 0.2 -2 -5.7

Securities 25 0.1 21 0.1 -4 -16.0

Other Corp. 260 1.4 257 1.4 -3 -1.2

Overseas 182 1.0 185 1.0 3 1.6

Total 18,408 100.0 18,374 100.0 -34 -0.2

FP21 ChangeUnitholder

Categories

FP20 UnitsShare

（%）Units

Share

（%）Units

Share

（%）Japan Trustee Services Bank, Ltd.

(Trust accounts)35,440 12.4 46,799 16.4 11,359 32.1

Trust & Custody Services Bank, Ltd.

(Securities investment trust accounts)24,472 8.6 20,846 7.3 -3,626 -14.8

The Nomura Trust and Banking Co., Ltd.

(Investment accounts)20,585 7.2 16,895 5.9 -3,690 -17.9

JP MORGAN CHASE BANK 385174 11,543 4.0 11,447 4.0 -96 -0.8

The Master Trust Bank of Japan, Ltd.

(Trust accounts)6,873 2.4 9,021 3.1 2,148 31.3

ORIX Life Insurance Corporation 8,905 3.1 8,905 3.1 0 0.0

NOMURA BANK (LUXEMBOURG)

S.A.6,554 2.3 8,168 2.8 1,614 24.6

Metlife Alico JPY (Note 2) - - 4,000 1.4 - -

The Asahi Fire & Marine Insurance Co.,

Ltd.3,924 1.3 3,924 1.3 0 0.0

National Mutual Insurance Federation of

Agricultural Cooperatives (Note 2)- - 3,901 1.3 - -

FP20 FP21 Change

Top 10 Unitholders

54

ORIX JREIT Inc. (OJR)

ORIX Asset Management Corporation(OAM)

Paid-in capital: ¥100 million

Asset management agreement

Advisory agreement(provision of information

relating to real estatetransaction , etc.)

Asset management company

Investment (100%)

Investment(100%)

・Engages in diversifiedbusinesses centering on thefinancial and real estate sectors

ORIX Corporation

・Core company of the Group’s real estatebusiness

・Leading the industry in development andtransaction of office buildings, logisticsfacilities, condominiums, etc.

ORIX Real Estate Corporation

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Transactions with Sponsors and Compliance System

Avoid the excessive competition of bidding and acquire properties at appropriate prices from our sponsors

Compliance system for property sales and acquisitions

DraftInvestment andAsset Management

Department

Risk Managementand Compliance Department

RiskManagement

and ComplianceCommitteeJointly conduct DD*

Report DD* results

Property sale/acquisitiondecided

OJR’s Board of Directors（predominantly comprised

of supervisory directorswith no relationship

of interest)

OAMBoard ofDirectors

*Due Diligence

Inspection and assessment of properties from physical, legal and economic perspectives.

■OJR’s Board of Directors

・Comprised of 1 Executive Director and 3 SupervisoryDirectors (a real estate appraiser, lawyer and certifiedpublic accountant with no relationship of interest)

・Acquisitions from and sales to interested parties musthave majority support of the supervisory directors

■Asset Management Company (OAM)

・Conducts thorough due diligence* in accordance tovarious in-house regulations.

・If problems pertaining to compliance are detected, thedirector in charge of the Risk Management andCompliance Department will offer advice to discontinue,rectify, change, etc.

55Organization of OAM

Corporate PlanningDepartment

Executive Officer

Shareholders’ Meeting

Risk Management andCompliance Committee

Finance and AccountingDepartment

Independent PublicAccountants

Board of Directors

President and CEO

Investment andAsset Management Department

Executive Officer

Risk Management andCompliance Department

Internal AuditDepartment

Corporate Auditor

Executive Officer

Established specialized teams for each sector・3 teams for offices・1 team for logistics and retail facilities・1 team for residential properties

56

Numerical Data・Numerical data is rounded down to the nearest whole number, except that percentages for occupancy rates,

interest-bearing debt ratio, etc., are rounded to the first decimal place.

Real Estate Glossary・The “Greater Tokyo area” refers to the three prefectures (Kanagawa, Saitama and Chiba) in addition to Tokyo.・“Acquisition price” is the sale price recorded in the sale agreement, etc. with fractions rounded down to the nearest

whole number. The price does not include consumption tax or other expenses related to acquisition (brokerage fees,taxes and public charges).

・“Occupancy rate” records the total leased area as a proportion of the total leaseable area, as of the last day of eachmonth.

・“Property size (total floor area)” refers to the total floor space of the buildings, regardless of the equity stake of thecompany in the property.

・The Kobe Momoyamadai Shopping Center (land) and Home Center Musashi Sendai Izumi (land) are not included in“Property size” and “Building age.”

・Calculation of Leasing NOI YieldLeasing net operating income (NOI) yield = leasing NOI (rental operating revenues – rental operating expenses +depreciation + finance lease cost) ÷acquisition priceRental operating revenues and rental operating expenses include leasing sales amount and leasing cost of salesamount respectively.Leasing NOI is calculated by adding back the leasing cost of sales amount to rental operating income (rentaloperating revenue – rental operating expenses).

Finance Glossary・“LTV (unitholders’ equity base)” is obtained by dividing interest-bearing debts outstanding by the total amount of

interest-bearing debts outstanding and unitholders’ capital.・“LTV (total asset base)” is obtained by dividing interest-bearing debts outstanding by total assets .・“Average interest rate” represents the weighted-average interest rate (annual rate). With regard to the average

interest rate on the portion of borrowings for which the company concluded interest-rate swap agreements to hedgeagainst interest rate fluctuation risk, the company used weighted-average interest rates adjusted for the effect ofrelevant interest-rate swaps.

・“Fixed-interest debt ratio” is obtained by dividing outstanding fixed-rate interest-bearing debts by outstandinginterest-bearing debts.

Terminology

5757

This document was provided and released solely with the intent of providing information. Thisdocument should not be construed as an offer or solicitation to buy or sell any specific product,including investment units.

This document is not a disclosure document or statement of financial performance required by, orbased on, Japan’s Financial Instruments and Exchange Law, Investment Trust and InvestmentCorporation Law, related cabinet orders, cabinet office ordinances or rules, the rules governingcompanies listed on the Tokyo Stock Exchange, or any other applicable rules.

This document contains forward-looking statements, including forecasts of financial position, results ofoperations, and business-related matters, as well as statements related to the plans and goals of themanagement of ORIX Asset Management Corporation (OAM), the investment trust managementcompany that provides asset management services for OJR. However, there are a number of knownand unknown risks and uncertainties that can cause actual results or OJR’s performance to differmaterially from any explicit or implicit forecasts contained herein. These forward-looking statementsalso rest on a number of assumptions with regard to OJR’s present and future management strategies,as well as the political and economical environments in which OJR will conduct its future businessoperations.

Although the information contained in this document is the best available at the time of publication, noassurances can be given regarding the accuracy, certainty, validity or fairness of this information. Thecontent of this document can be modified or withdrawn without prior notice.

ORIX JREIT Inc. · FP21 financial results, FP22 forecast and FP23 forecast 6 New Acquisition from...

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