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-Quarterly Report January 2014

Trends in investment units (October – December 2013)
◆Trends in Japanese stock market
In early and mid October, the Japanese stock market declined, reflecting concerns over the fiscal debate in the United States, but subsequently rose. In late October, the market declined again, mainly due to the appreciation of the yen. The market continued to fall in early November, chiefly attributable to results of major domestic companies falling short of analysts’ expectations. Subsequently, the market rose to the end of the month on U.S. employment statistics far exceeding analysts’ expectations, the incoming FRB chair’s cautious stance on the early tapering of quantitative easing, and the Bank of Japan governor’s suggestion of the possibility of additional monetary easing, among other factors. In December, the market fell as concern over tapering increased in the United States, but then climbed, given the moderate pace of tapering, the indication that the low-interest rate regime would be maintained, the weakening of the yen associated with strong U.S. economic indicators, and other factors. Towards the end of the month, the market hit a high for the year. The Nikkei Stock Average at the end of the month was 16,291 yen.
◆REIT indices
In October, the REIT index moved like the stock market, based on almost the same factors as those for stock prices and concern over strong financing associated with new listings and public stock offerings. In November, the index fluctuated on the same factors affecting stock prices, as the J-REIT market entered a correction phase. In the first half of December, the index declined chiefly due to continued sales to lock in profits associated with the abolition of the securities tax break. Subsequently, and to the end of the month, the index climbed, primarily reflecting the elimination of pressure to sell to lock in profits and expectations of money inflows into J-REITs through the NISA (Nippon Individual Savings Account) system, which was introduced in 2014. The Tokyo Stock Exchange REIT Index was 2524.39 (including dividends) at the end of December.
Appraisal Cap Rate during acquisition:5.5% on average (5.3% last quarter)

Area Minato,Chuo,Chiyoda wards:4.7%(4.7% last qtr.) Other major cities6.0%(5.9% last qtr.)

Asset type Office:5.2%(4.8% last qtr.) Residential:5.3%(5.3% last qtr.)

Office Minato,Chuo,Chiyoda wards:4.8%(4.5% last qtr.) Other major cities:5.9%(5.4% last qtr.)

Residential Minato,Chuo,Chiyoda wards: 4.8%(4.9% last qtr.) Other major cities:5.8%(5.8% last qtr.)


NOI Cap Rate:5.6% on average(5.6% last qtr.)

Area Minato,Chuo,Chiyoda wards:4.8%(4.9% last qtr.) Other major cities:6.4%(6.4% last qtr.)

Asset type Office:5.3%(5.4% last qtr.) Residential:5.7%(5.7% last qtr.)

Office Minato,Chuo,Chiyoda wards:4.7%(4.8% last qtr.) Other major cities:6.3%(6.3% last qtr.)

Residential Minato,Chuo,Chiyoda wards:5.0%(5.1% last qtr.) Other major cities:6.5%(6.5% last qtr.)


Rent level ¥12,790/tsubo/mon.
Expense ratio 26.7%
Qtr.-end total amount index ¥2,270,740/tsubo
Occupancy rate 96.8%
NOI Index ¥35,390/sq. meters/yr.
NOI Cap Rate(compared to previous settlement):5.6%(previously 5.7%)
Properties whose accounts were settled between July and September 2013 are selected and the values of the previous accounts are then compared.

Area Minato,Chuo,Chiyoda wards:4.8%(previously 4.9%) Other major cities:6.5%(previously 6.5%)

Asset type Office:5.3%(previously 5.5%) Residential:5.7%(previously 5.7%)

Office Minato,Chuo,Chiyoda wards:4.5%(previously 4.7%) Other major cities:6.4%(previously 6.5%)

Residential Minato,Chuo,Chiyoda wards:4.9%(previously 5.0%) Other major cities:6.6%(previously 6.6%)


Rent level ¥12,670/tsubo/mon
Expense ratio 25.5%
Quarter-end total amount index ¥2,282,230/tsubo
Occupancy rate 97.3%
NOI Index ¥35,150/sq. meters/yr.

Cap rate (month to month basis) Rise in Red, Flat in Orange, Down in Green.

Report for January 2014 (January 31, 2014)

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