Financial Briefing for the 22nd Fiscal Period ended …...2013/04/15 · Financial Briefing for the 22nd Fiscal Period ended February 28, 2013 April 12, 2013 Prepared by ORIX Asset

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Financial Briefing for the 22nd Fiscal Periodended February 28, 2013

April 12, 2013Prepared by ORIX Asset Management Corporation

1ContentOJR’s Management Philosophy 2 External Growth StrategyAchievements from FP22 onward Real Estate Market Outlook 27Management Highlights 4 Achievements of External growth strategyInternal Growth Strategy ～Major Leasing Achievements～ 5 ～After the previous PO～ 28External Growth Strategy ～The Strategy of Asset Diversified Investments 29Replacements in Line with Equity Finance through AppendixPublic Offering～ 6 Actual Financial Highlights 31Financial Strategy 7 Major Tenants 32Stable Growth of Unitholders’ Value (1) 8 New Acquisitions from FP22 onward (1) 33Stable Growth of Unitholders’ Value (2) 9 New Acquisitions from FP22 onward (2) 34Future Management Policies and Strategies New Acquisitions from FP22 onward (3) 35Management Tactics in Line with Current New Acquisitions from FP22 onward (4) 36Environment Perceptions 11 New Acquisitions from FP22 onward (5) 37External growth strategy Portfolio Strategy 38～Investment Strategy for Offices～ 12 Utilization of the ORIX Synergy (1) 39External growth strategy Utilization of the ORIX Synergy (2) 40~Investment Strategy for Retail Facilities (1)~ 13 Portfolio Summary 41External growth strategy Portfolio Map 42~Investment Strategy for Retail Facilities (2)~ 14 Portfolio Data (1) 43Financial Strategy ～Cash Management ～ 15 Portfolio Data (2) 44Financial Results and Forecasts Overview of Appraisal Value 45Comparison between FP22 Results and FP22 Forecast 17 Appraisal Value List at the end of FP22 (1) 46FP22 Results and FP23 and FP24 Forecasts 18 Appraisal Value List at the end of FP22 (2) 47Internal Growth Strategy Financial Data 48Maintenance and Improvement of Occupancy Rates 20 Investment Units 49Rent Downward Revision 21 Transactions with Sponsors and Compliance System 50Specific Measures for Enhancing Internal Growth of Organization of OAM 51Office Portfolio 22 Terminology 52～54Approach to Bottoming Out Internal Growth of Offices ～Image (1)～ 23

Approach to Bottoming Out Internal Growth of Offices ～Image (2)～ 24

Composition of Rent Levels 25

2OJR’s Management Philosophy Improve profitability and stability of the portfolio, reduce financial costs and increase

financial stability, aiming for stable growth of unitholders’ value

External Growth Strategy• Diversification of property types and

regions as a diversified portfolio REIT• Property replacement• Utilization of the ORIX synergy

Internal Growth Strategy• Diversification of property types, regions

and tenants as a diversified portfolio REIT• Direct property management• Utilization of the ORIX synergy

AssetImprovement of profitability and stability of the portfolio

Financial Strategy• Reduction of financing costs• Improvement of financial stability• Appropriate cash management

Stable growth of unitholders’ value

Equity

DebtReduction of financial costs and improvement of financial stability

3

Achievements from FP22 onward

4

(Note) As of March 1, 2013, OJR implemented a 5-for-1 split of its investment units. Taking this split into account, one fifth of Actual DPU of FP22 and five times ofForecast DPU from FP23 onward are respectively shown in brackets.

Asset Debt

Equity

Internal growth strategy

External growth strategy

Maintained high occupancy rate for offices at approx. 96.5% at the end of the FP22

Successfully filled up vacated space at Round-Cross Ichi-bancho and Seafort Square with multiple tenants after departures of major tenants

Leasing acceleration, improvement of lease conditions and cost management were successful; rental revenue of existing properties in FP22 increased 133 million yen from initial forecasts

The assumed floor area of tenant departure for FP23 was reduced to approx. 6,200㎡ from 10,000㎡ at the beginning of the period; prospects for a bottoming out of internal growth

■FP22 Acquired 1 senior housing property with nursing care and 1

residential property

■FP23 Acquired 4 retail facilities

Disposed 1 residential property

Entrusted the operational management of 4 acquired retail facilities to an ORIX Group company; utilized the ORIX Synergy, i.e. know-how of retail facility operational management

Increased the portfolio’s profitability and stability Reduced financial costs and increased financial stability

Financial strategy Lengthened borrowing periods and diversified repayment dates

Reduced the average funding costs based on total interest-bearing debts in FP22 by 7 basis points compared to FP21 through refinancing

Newly concluded a commitment line contract of 5 billion yen with Sumitomo Mitsui Banking Corporation

Reduced LTV based on total assets by 1.5% points by equity finance through public offering; increased acquisition capacity

Steadily increased unitholders’ value

Revised actual DPU and DPU forecasts upwards with promotion of various strategies

FP22 (Actual ) ： 11,764yen (2,352yen)Compared with previous

forecast :+564yen

FP23 (Forecast ) ： (11,400yen ) 2,280yenCompared with previous

forecast: +120yen

FP24 (Forecast ) ： (11,600yen ) 2,320yen －

Revised actual DPU and DPU forecasts upwards (note)

Increased the liquidity of investment units through the 5-for-1 split of investment units

Management Highlights

5

Retail Area Retail Area

Internal Growth Strategy～Major Leasing Achievements～

Utilized Direct Property Management and the ORIX Synergy to maintain high occupancy and diversify tenants

Asset

Launched leasing activities that addressed in detail the varying needs of tenants■Filled up vacated space at properties with multiple tenants after departures of major tenants■Addressed positive needs such as relocations for larger spaces and increasing floor area within the

properties■Incorporated business types with strong performance

Property name Factors in Improvements of occupancy rate Improvements of occupancy rateRound-Cross Ichi-bancho

Due to the relocation of a corporation to a self-owned building which it newly acquired, the property was faced with approx. 424 tsubos (2 and a half floors) of vacated space at the end of August 2012.

Succeeded in fully refilling the property and diversifying tenants by addressing the positive needs such as improvement of location and property and relocation for larger spaces of 4 companies including a consulting firm and an IT-related company

End of Sep. 2012

66.5%→

End of Apr. 2012

(prospected)100%

Seafort Square / Center Building Implemented tenant merchandising such as by

incorporating business types that were lacking in the building (for example a Chinese restaurant)

End ofOct. 201159.7%

→End of

Dec. 201282.5%

→End of

Feb. 201384.4%

Even with the departure of a foreign financial institution (approx. 292 tsubos; end of Jan. 2013), a high level of occupancy has been maintained by addressing the positive needs such as improvement of property and relocation for larger spaces of IT-related companies, wholesale companies, etc.

End of Feb. 2012

81.2%→

End of Dec. 2012

96.3%

→End of

Apr. 2013(prospected)

96.0%Carrot Tower The vacated space (approx. 136 tsubos; end of

Aug. 2012) was split and leased to 2 companies. Further, the vacated space on another floor was filled up by addressing the need of a city bank to expand its floor space within the same building.

End of Sep. 2012

88.1%→

End of Jan. 2013

100%

Office Area Office Area

6Asset External Growth Strategy ～Strategy of Asset Replacements in Line with Equity Finance through Public Offering～

Implemented an external growth strategy leading to improvement of DPU

FP21 End FP22 EndReplacements in line with PO As of financial

announcement date（Apr. 12, 2013）Acquisitions Disposition

Acquisition price (million yen) 350,994 355,874 32,770 5,550 383,094

Number of properties 68 70 4 1 73Leasing NOI yield 5.0% 5.0% 5.1% 6.1% 5.0%Yield after depreciation 3.6% 3.6% 4.0% 2.6% 3.6%Occupancy Rates 98.0% 98.4% 99.8% 96.7% 98.5%Unrealized gain/loss (million yen) ▲5,489 ▲2,104 846 404 ▲1,663

Improvement of Portfolio’s Profitability and Stability■Acquisition of 4 Retail Facilities OJR acquired 4 retail facilities that are both profitable and stable

along with the public offering in view of the current real estate market environment.

With diversification of property types and regions of retail facilities, OJR is promoting external growth that will lead to greater profitability and stability.

Neighborhood shopping centers Category killersUrban-type retail facilities

■Asset Replacements Through the disposition of 1 residential property with relatively low

yield after depreciation of 2.6% and acquisition of 4 retail facilities with average yield after depreciation of 4.0%, OJR improved the profitability of the overall portfolio.

■Utilization of the ORIX synergy Entrusted management of acquired retail facilities to an ORIX

Group company Utilized t ORIX Group’s leasing abilities, value-adding abilities and

nationwide network

7Financial StrategyReduced funding costs and increased financial stability Increased Acquisition Capacity by reducing LTV

Debt

Under a favorable financial environment, funding costs (average funding cost ) were reduced while the balance with the stability of the financial base was maintained

Refinancing with an early repayment of borrowings (9.9 billion yen) was implemented using the gain on property sales arising from the property replacements

For refinancings of loans due for repayment, borrowing periods were lengthened and maturity dates were diversified

Increased the acquisition capacity (approximately 9 billion yen to LTV at 50% level) by reducing the interest-bearing debt ratio (LTV)

Newly concluded a commitment line contract of 5 billion yen with Sumitomo Mitsui Banking Corporation, expanding line limit to 31.5 billion yen

Reduced funding costs

Reduced LTV (total asset base)

Increased financial stability

Expansion of commitment line

（millions of yen）

Financial Institution LimitAozora Bank, Ltd. 7,500Sumitomo Mitsui Trust Bank, Limited. 6,000Mitsubishi UFJ Trust and Banking Corporation 6,000Sumitomo Mitsui Banking Corporation 5,000The Bank of Tokyo-Mitsubishi UFJ, Ltd. 4,000Mizuho Corporate Bank, Ltd. 3,000Total 31,500

49.6% 49.6%

50.3%

48.8%48.0%

49.0%

50.0%

51.0%

FP20

(Feb. 2012)

FP21

(Aug. 2012)

FP22

(Feb. 2013)

Financial announcement

(Apr 12, 2013)

11,000

4,0009,900

7,000

5,000

8,460

0

10,000

20,000

30,000

40,000

50,000

60,000

2013 2014 2015 2016 2017 2018 2019 2020 2021

New procurementRefinancing in FP22Refinancing in FP23Investment corporation bondsBorrowings

Early repayment ・refinancing



2.00%1.92%

1.85%

1.5%

2.0%

2.5%

FP20

(Feb. 2012)

FP21

(Aug. 2012)

FP22

(Feb. 2013)FP23 (forecast)

(Aug. 2013)

FP24 (forecast)

(Feb. 2014)

Refinancing New funding

Balance ofinterest-bearing

debt171,068 175,493 9,900 8,460 183,890

Total assets 344,997 349,154 376,703

LTV(total asset base) 49.6% 50.3% 48.8%

Average fundingcost 1.92% 1.85%

Aim for furtherreduction of

funding costs

End of FP21 End of FP22

By equity financethrough public offering As of financial

announcement(Apr.12, 2013)

27,565

▲1.5%points

8

95

100

105

110

115

120

125

1‐Mar‐13 8‐Mar‐13 15‐Mar‐13

東証REIT指数 OJR

8Stable Growth of Unitholders’ Value (1) Split of investment units and equity finance through public offering

As of March 1, 2013, OJR implemented a 5-for-1 split of its investment units.The purpose of split is to further expand the investor base and enhance the liquidity of investment units by

creating an environment favorable to invest by lowering the price of each investment unit.

Split of investment units

Number of OJR investment units issued and outstanding before split 284,434 units

Number of OJR investment units issued and outstanding after split 1,422,170 units

Item Content

Number of new investment units issued168,960 units

(160,915 units in the primary offering and 8,045 units through third-party allotment)

Number of investment units after the issue of new investment units 1,591,130 units

Issue price (offer price) 122,655 yen

Total issue price (total offer price) 20,723 million yen

Paid-in amount (purchase price) 118,629 yen

Total paid-in amount (total purchase price) 20,043 million yen

Date of resolution authorizing issuance March 8, 2013

Pricing date March 18, 2013

Payment date (primary offering) March 26, 2013

Pricing date (March 18)

125,800 yen

Following the decision to issue new investment units, the investment unit price rose by approx. 19% up to the pricing date and outperformed the TSE REIT Index by 7.8%.

Newly issued investment units amounting to approx. 12% the number of investment units issued and outstanding. Due to the increase of investment unit price following the resolution of new issuance, approx. 20 billion yen was procured and realized reduction in LTV and increase of acquisition capacity

Equity

Public Offering implemented in March, 2013

(Note) The number of investment units after the issue of new investment units assumes all of the new investment units scheduled to be issued through third-party allotment (over-allotment) will be issued.

+18.9%Outperformed TSE

REIT Index in the same period by +7.8%

TSE REIT Index

(Note) Indexed with the closing price 105,800 yen of the date of resolution of issuance as 100.

Mar.1, 2013 Mar.8, 2013 Mar.15, 2013

Date of resolution (March 8)

105,800 yen

9

12,571

11,82211,656 11,764

2,160

2,280

2,320

10,000

11,000

12,000

13,000

第19期

（2011/8期）

第20期

（2012/2期）

第21期

（2012/8期）

第22期

（2013/2期）

第23期予想

（2013/8期）

第24期予想

（2014/2期）

分配金実績第21期決算発表時予想第22期決算発表時予想

Stable Growth of Unitholders’ Value (2)

Distributions ＝InternalGrowth ＋

ExternalGrowth ＋

FinancialStrategy

0 ＝＋＋

Distributions ＝InternalGrowth ＋

ExternalGrowth ＋

FinancialStrategy

＝ 0 ＋＋

improving distributions

Aiming for annual DPU of 4,600 yen (23,000 yen) level

(2,514)

(2,364)(2,331) (2,352)

DPU has improved

As of FP21 financial announcement date（Oct. 12, 2012）

As of FP22 financial announcement date

（Apr. 12, 2013）

DPU(yen)

FP22 11,200 （2,240） 11,764 （2,352）

FP23 forecast （10,800） 2,160 （11,400） 2,280

FP24 forecast －（11,600） 2,320

As of end of FP21 As of end of FP22

NAV per unit (yen) 511,213（102,242） 523,112（104,622）（531,626）106,325

(10,800)

(11,600)

11,200(2,240)

Equity

(Note) As of March 1, 2013, OJR implemented a 5-for-1 split of its investment units. Taking this split into account, one fifth of Actual DPU for FP22 and earlier and five times of Forecast DPU from FP23 onward are shown in brackets.

(11,400)Blue ： Actual

Red ： Forecast

（yen）Forecast as at FP21 financial announcementActual DPU Forecast as at FP22

financial announcement

FP19(Aug. 11)

FP20(Feb. 12)

FP21(Aug. 12)

FP22(Feb. 13)

FP23(Aug. 13)forecast

FP24(Feb. 14)forecast

bottoming out distributions

bottoming out distributions improving distributions

(bottoming out)

(Upside from capacity to acquire properties)(bottoming out)

10

Future Management Policies and Strategies

11

Asset Debt

Equity

Internal growth strategy

External growth strategy

Financial strategy

Management Tactics in Line with Current Environment Perceptions

■ Environment perceptions The fundraising environment is excellent due to monetary easing

measures and interest rates continuing to stay low

On the other hand, there is risk of downturn again due to concerns of financial deterioration, etc

■ Financial management tactics Take advantage of the healthy funding environment, promote the

reduction of the average funding costs and improvement of financial stability

Control the total asset based LTV at around 50% and preferentially utilize funds of free cash flow for new acquisition of properties for external growth

■ Environment perceptions (Rental market) The stage where the vacancy rate of offices in central Tokyo was

increasing has ended; new asking rents are making a turnaround primarily on high-grade office

■ Management tactics Realize the bottoming out of internal growth by preventing tenant

departures and start focusing on the next step of improvement of contracted lease conditions

■ Environment perceptions Equity finance by REITs is active due to expectations for recovery of

real estate market

■ Policy Aim to improve DPU and NAV for the stable growth of unitholders’

value

Equity finance in the future shall contribute to the stable growth of unitholders’ value

■ Environment perceptions (Transaction market) Expected yield of residential properties and logistics facilities has

moved to expansion stage but that of offices and retail facilities has been yet in early recovery stage

Investment in retail facilities is an opportunity to gain high profits for investors with operational management abilities as it requires high expertise

Demand for prime properties in the office market is strong and the shortage of prime properties for sale is ongoing but due to the improved outlook of buyers on future rent, the sellers are becoming more aligned to the buyers’ price perceptions

■ Investment tactics Invest primarily in retail facilities to increase profitability and stability

and also consider investment in offices from which growth can be expected

With the inclusion of properties acquired with equity finance through the public offering, retail facilities outperform 5% NOI yield and 3.6% yield after depreciation of the existing portfolio

Work to improve the portfolio’s profitability and quality through property replacements

1212External growth strategy～Investment Strategy for Offices～

Consider investment primarily in medium-sized (Note 1) or larger offices in the Greater Tokyo Area For offices in the outside of Greater Tokyo Area, focus on stability and profitability Consider acquisition of complex facilities comprised primarily of offices and/or offices with retail tenants, etc.

Seafort Square / Center Building

Round-Cross Shinjuku

ORIX Kobe Sannomiya Building

ORE SapporoBuildingORIX Akasaka 2-

chome BuildingAkihabara

Business Center

Greater Tokyo Area Outside of Greater Tokyo Area Complex / Retail-type

(Note1) “Medium-sized” offices stand for offices with a total floor area of 3,000m2 to 15,000m2.(Note2) “Complex facilities comprised primarily of offices” stand for offices including retail facilities and residence units in the same building.

Property type Points

High-spec offices in Greater Tokyo Area’s prime areas such as connected to station, etc. Seek potential for growth in both rental revenue and yields

Offices in cities where there is little concern over supply of new offices in the outside of Greater Tokyo Area

Seek not only growth potential but also stability of rental revenue Utilize ORIX Group’s nationwide network

Complex facilities comprised primarily of offices (Note 2)

occupied by retail tenants, etc. Utilize the features of diversified portfolio REIT and the ability to manage retail

facilities, residential properties, etc.

Older office properties Make decisions based on whether or not increased value is possible

through renovations such as renewal of air conditioning systems, installation of LED lighting, etc.

Offices occupied by single tenant or by large tenants

Make careful decisions on the probabilities of existing tenants’ renewal andof filling up vacated spaces in the case of tenant departures, and the market rent gap

Utilize leasing abilities through direct property management

13

Profitability Stability

Expertise is required; provide opportunities for higher revenues & yield relative to the substantial risks for investors who are able to assess risks and have sufficient operational management abilities

Increase stability through diversifiedinvestment in properties featuring tenants being close to daily life

Investment Policy for retail facilities

< Portfolio level >

Diversification of property types,

Regions, Tenants, etc.Locational features, Trade areas, Tenants

Comprehensively take location feature strengths, trade area, tenants’ business types, priorities and alternatives, as well as lease contract type into consideration

Construct the portfolio with diversification of property types, regions, tenants, etc.

<Individual property level>

Take features of individual properties as well as portfolio diversification into consideration and promote selective investments

Work to realize both profitability and stability

External growth strategy~Investment Strategy for Retail Facilities (1)~

14

Urban-type retail facilities Neighborhood shopping centers (NSC) Category killers

Retail facilities located nearby major train stations in the Greater Tokyo Area and government

ordinance designated cities from which growth in profitability can be expected

Community-oriented retail facilities fully lined up with stores retailing daily necessities

Large-scale specialty stores that specialize in a certain type of products with vast product selection and strong

price competitiveness

Vast trade area(Customers come primarily by train)

Small trade areas with 3 to 5 km radius mainly targeting nearby residential areas

(Customers come by car, bicycle or on foot)Medium-sized trade areas up to 10 km

radius (Customers come mainly by car)

Comprised mainly of tenants dealing with daily used Restaurants, specialty stores, etc.

Comprised mainly of tenants usedon daily basis

Anchor tenants are such as food supermarkets, etc.

National top-class and successful tenants Electronic appliance retailers

Home centers, etc.

Primarily 5 to 10 years Mainly long-term and fixed-term lease Mainly long-term and fixed-term lease and fixed-term business-use leasehold

Urban-type retail facilities

Neighborhood shopping centers (NSC)

Category killers

General merchandise stores (GMS)

Large-scale shopping centers

Others

aune Kohoku

Maruetsu Sagamino Home Center MusashiSendai Izumi (Land)

aune Sapporo Ekimae

Okayama KumeRetail Facility

Morioka Minami Shopping Center Sansa

CUBEDaikanyama

Nihon Jisho Minami Aoyama Building

auneMakuhari

ORE Yurakucho The Kitahama PLAZACROSS GARDEN

KAWASAKIKobe Momoyamadai

Shopping Center (Land)Tecc Land Totsuka (Land)

Type features

Trade area

Tenants

Contract

Owned properties

External growth strategy~Investment Strategy for Retail Facilities (2)~

Investment Strategy for retail facilities Prioritize investment in types of properties where OJR’s strengths such as the ORIX synergy

can be easily utilized

■ Features of property types prioritized investment targetsThe priority of GMS and large shopping centers are low due to the retail environment and other factors

Prioritized investment targets

15

2,2602,485 2,429 2,464

0

500

1,000

1,500

2,000

2,500

3,000

FP19(Aug. 11)

FP20(Feb. 12)

FP21(Aug. 12)

FP22(Feb. 13)

CAPEX Free cash flow

Financial Strategy ～Cash Management ～

New property acquisitions

LTV control

Capital Returns to unitholderincluding OPD =Optimal Payable Distributions

Asset

Debt

Equity

(million yen)

Stable free cash flow generated for each financial period

Status of Free Cash Flow Utilization of Free Cash Flow

Promote an external growth strategy by utilizing the abundant free cash flow

Take the current capital and borrowing costs into consideration and aim for the growth of unitholders’ value through new property acquisitions with profitability greater than that of the existing portfolio, i.e. yield after depreciation of 3.6% with utilization of free cash flow

16

Financial Results and Forecasts

17

3,346 160 3,185

DPU 11,764 yen 564 yen 11,200 yen

(reference distribution) (2,352 yen) (112 yen) (2,240 yen)

Net Income(millions of yen)

(Feb. 2013) (A-B) (Feb. 2013)Item

FP22 Actual (A)FP22 Forcast (Ｂ)(As of FP21 financial

announcement )

(Note) The above reference distribution is five times of DPU after the split of investment unit, shown in consideration of the 5-for-1 split of investment units implemented on March 1, 2013.

Variance between FP22 results and forecast +0

Variance between FP22 results and forecast +133 ・Rental income increase from existing properties +40 ・Decrease of brokerage fee and advertising expenses +41 ・Improvement of utilities costs +26

Variance between FP22 results and forecast +26Total +160

External Growth Factors

Internal Growth Factors

Other

(millions of yen)

[Variance between FP22 actual and forecast]

Comparison between FP22 Results and FP22 ForecastDPU increased 564 yen more than initial forecasts at the beginning of the period due to leasing

acceleration at existing properties, improvement of lease conditions, reduction of advertising expenses, etc.

Increased due to leasing of offices acceleration, improvement of lease conditions, etc.

Decreased due to reduction of advertising expenseswith decreased turnover of residential properties, incurring delay of office brokerage fees, etc.

Improved due to utilities costs management

18

Change ▲ 14 Change +816 Change ▲ 214

・Contribution of properties acquired in FP21 and FP22 +231 ・Contribution of properties acquired

in FP22 and FP23 +644 ・Full Contribution of properties acquired in FP23 +124

・Contribution of properties acquired in FP24

・Operating income of property sold in FP22 ▲ 68 ・Operating income of property sold

in FP23 ▲ 60

・Gain on property sale ▲ 159 ・Gain on property sale +390 ・Gain on property sale ▲ 390・Funding-related expenses ▲ 42・Cost of issuing new investment units ▲ 61 ・Cost of issuing new investment units +61・Fixed asset/city planning tax for properties acquired in 2012 ▲ 53

Change ▲ 49 Change ▲ 307 Change +17・Rental income decrease from existing properties ▲ 123 ・Rental income decrease from

existing properties ▲ 86 ・Rental income decrease from existing properties ▲ 0

・Repair cost decrease from existing properties +105 ・Repair cost increase from existing

properties ▲ 90 ・Repair cost decrease from existing properties +27

・Utilities costs ▲ 21 ・Utilities costs ▲ 29 ・Decrease of brokerage fees +15・Increase of loss on retirement ▲ 35 ・Increase of loss on retirement ▲ 46

Change +94 Change ▲ 227 Change +260・Decrease of funding-related expenses +79 ・Decrease of funding-related expenses +74 ・Decrease of funding-related expenses +52　　― Of this, reduction in funding costs (+52) 　　― Of this, reduction in funding costs (+101) 　　― Of this, reduction in funding costs (+25)　　― Of this, factor of operating day (+27) 　　― Of this, factor of operating day (▲ 27) 　　― Of this, factor of operating day (+27)

・Early repayment expenses ▲ 255 ・Early repayment expenses +255・Asset management fees ▲ 61

Total +30 Total +281 Total +63

FP22 Actual vs FP21 Actual FP23 Forcast vs FP22 Actual FP24 Forcast vs FP23 Forcast

ExternalGrowthFactors

InternalGrowthFactors

OtherFactors

(Note) As of March 1, 2013, OJR implemented a 5-for-1 split of its investment units. Taking this split into account, one fifth of Actual DPU for FP22 and earlier and five times of Forecast DPU from FP23 onward are shown in brackets.

(millions of yen)

FP22 Results and FP23 and FP24 Forecasts

(3) Expected bottoming out of internal growth

(4) Reduced funding costs

(1) Continued increase ofrevenue through property replacements

(2) Upside factors

Acquisition capacity (i + ii):Approx. 11.5 billion yen

i. LTV up to 50%: Approx. 9 billion yen

ii. FCF of FP23: Approx. 2.5 billion yen

Aim for bottoming out of internal growth in FP24 as well as upside with more acquisition capacity generated by equity finance through public offering

3,315 3,346 30 3,627 281 3,691 63

beforesplit 11,656 yen 11,764 yen 108 yen (11,400 yen) (▲364 yen) (11,600 yen) (200 yen)

aftersplit (2,331 yen) (2,352 yen) (21 yen) 2,280 yen ▲72 yen 2,320 yen 40 yen

(Aug. 2013) (C-B) (Feb. 2014) (D-C)Net Income

(millions of yen)

DPU

ItemFP21 Actual (A) FP22 Actual (B) FP23 Forcast (C) FP24 Forcast (D)

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

19

②決算概要及び業績予想

Internal Growth Strategy

20

97.2 97.298.0 98.4

95.6

93.9

96.1 96.5

98.399.1

99.0 99.4

90

95

100Overall Office Non-Office Office（Ｆorecast as of FP 21 financial announcement）

-25,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

-24.2%

-20.3% -20.0%

-17.3%

-30%

-20%

-10%

Period End Occupancy Rates

(％)

Assumed the office occupancy rate will be stable at the current level Tenant departures were successfully suppressed at approx. 6,200㎡ in FP23 against previous

forecast of approx. 10,000㎡

(㎡)

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

Maintenance and Improvement of Occupancy Rates

Tenanted (confirmed to move in for FP23 onward) Vacated (confirmed to vacated for FP23 onward) Projected to be tenanted Projected to be vacated

Projected to be tenanted as of FP21 financial announcement Projected to be vacated as of FP 21 financial announcement

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

FP23(Aug.13)

(Projection)

FP24(Feb.14)

(Projection)

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

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

FP23(Aug.13)

(Projection)

FP24(Feb.14)

(Projection)

21

-17.3%

-9.3% -10.7%-12.4%

-20%

-15%

-10%

-5%

0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

【Rent Downward Revision Area（excluding residential properties）】(㎡)

Existing Tenants’Rent Downward Revision Area and Rent Decline Rate

During FP22, approx. 20,000㎡ of rent decrease realized on other sectors but PL impact was within the scope of initial budget

Aim to suppress the area of rent decrease for FP23 onwards

【Rent Decline Rate（excluding residential properties）】

Rent Downward Revision

(In the case of inclusion of other sectors)

-6.0%

Rent downward revision area is expected to

increase due to major tenant departure

suppressed in FP23

<Reference>Tenants’ renewal with same rent

(floor area ratio)61% 53% 61% 71%

(Excluding other sectors)Fluctuating around 50% to 70%

Rent downward revision area of other sectors (dotted line)

ConfirmedProjectionForecast as of FP21 financial announcement Rent Decline rate (dotted line is projection)

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

FP23(Aug.13)

(Projection)

FP24(Feb.14)

(Projection)(Note) Excluding the renewal rent remained and increased.

FP19(Aug.11)

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

FP23(Aug.13)

(Projection)

FP24(Feb.14)

(Projection)

22Specific Measures for Enhancing Internal Growth of Office Portfolio

Target Measures for the recovery of office rental income

Increase the contract occupancy rate

Contract occupancy rate recovered to 96.1% as of end of FP21 (end of Aug.2012)

Maintained high occupancy at 96.5% as of end of FP22 (end of Feb. 2013)

Reduce tenant departures rate

Aim for an increase of the effective occupancy rate (Note) and reduction of rental income’s decrease when tenants are replaced

Improve contractedlease conditions

Aim for shortening of free rent periods and increase of contracted rent

Step.1

Step.2

Step.3

Strengthening tenant relations through direct PM

Increase the competitiveness of properties through direct PM

Understand tenants’ business performance and business nature; explore potential tenants needs

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

Propose and implement renewal construction in order to increase tenant satisfaction

◇Segmented adaptation of lots ◇Change of use ◇Environmental energy saving measures

Creation of rentable space which is more leasable by proposing relocations within the same building, etc.

Ensure the bottoming out of internal growth in Step 2 and move to the stage of rental income recovery in Step 3

Accomplished

(Note) The effective occupancy rate is the percentage in the total leasable space where rental income is actually being generated (contracted area subtracted by the free rent portion).

23

Approach to Bottoming Out Internal Growth of Offices ~ Image (1) ~

Increase of rental income

Reduction of rental income decline range

Work to increase the effective occupancy rate and improve the rent unit price decline rate byreducing tenant replacement rate through the prevention of departures

Increase of the effective occupancy rate (image)

1.5% increase of effective occupancy rate Impact of free rent on revenues mitigated with reduction of

replacement rate, even assuming long free rent periods

1.0% improvement of rent unit price decline rate

(Note1) The free rent ratio refers to the area for which rent cannot be collected due to free rent on the leasable space.(Note2) The area ratios are the percentages of tenant replacement and renewal with rent decline in the total leasable space of office properties.

Improvement of rent unit price decline rate (image)

24

87%

88%

89%

90%

91%

92%

93%

94%

95%

-4%

-2%

0%

2%

4%

FP20(Feb.12)

FP21(Aug.12)

FP22(Feb.13)

FP23(Aug.13)forecast

FP24(Feb.14)forecast

Actual occupancy factor (left axis)Rent unit price factor (left axis)Increase/decrease rate in rental income (left axis)Effective occupancy rate (right axis)

Rental income bottoming out due to improvement of effective occupancy rate as well as rent unit price declining rate

Image of Rental Income Bottoming Out (Office only)

Step2: Suppress tenant departuresStep1: Improvement of contract occupancy rate

Rental income declining Rental income bottoming out

Rental income

＝ Actual occupancy factor

＋ Unit price factor

△2 to 3％＝ ±0％＋ △2 to 3％

Rental income

＝ Actual occupancy factor

＋ Unit price factor

±0％＝ +1 to 2％＋ △1 to 2％

Rental income bottoming out due to improvement of effective occupancy rate as well as rent unit price declining rate

Rental income bottoming outRental income declining

Income increased due to improvement of effective occupancy rate

Rental income decline range reduced due to improvement in overall rent unit price declining

Approach to Bottoming Out Internal Growth of Offices ~ Image (2) ~

25

16.7%

14.4%

68.9%50.1%

20.3%

22.5%

5.8%

1.3%

21.4%

38.7%16.0%

12.7%

11.2%

30.9%

12.6%

56.5%

As of the end of FP14 (Feb. 09)just after the

“Lehman Shock”

Risk of rent decline and tenant departure decreased due to market rent gap reduction and tenant diversification

Average unit price of monthly rent：20,190 yen per tsubo

As of the end of FP22 (Feb. 13)

Composition of Rent Levels

Average unit price of monthly rent：16,624 yen per tsubo

Declined by Approx.17.7%

Below ¥15,000¥15,000 or higherBelow ¥20,000¥20,000 or higherBelow ¥25,000¥25,000 or higherBelow ¥30,000¥30,000 or higher

（for 1 tsubo / month）

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

Non-office: total 5 tenantsTotal monthly rent

:¥191 million

Office: total 17 tenantsTotal monthly rent

: ¥470 million

Non-office: total 5 tenantsTotal monthly rent

: ¥234 million(Mainly long-term

contracts)

Office: total 9 tenantsTotal monthly rent

: ¥270 million(Rent ratio of largest

tenant is approx. 3.1%)

[Tenant ratio accounting for 1% or more in total contracted rental income(Note2) ]

（Note 1）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 Basis) (Note1) Tenant Diversification and Expansion of Customer Basis

（Note 2）If the same tenant is occupying multiple properties, it is countedas 1 tenant for each property.

26

External Growth Strategy

27

With regard to OJR’s 4 target property types (offices, retail facilities, logistics facilities and residential properties), cap rate of the respective transaction markets are improving in the order of residential properties, logistics facilities, offices and retail facilities, and rents for residential properties and logistics facilities in the rental market of the 4 main property types are in the “Recovery” stage whereas rents for offices and urban-type retail facilities are still in the “Bottom” stage.

Real Estate Market OutlookCurrent Situation

Image of cap rate Image of rents

Expansion

Recovery(Falling

cap rate)

Recession(Rising

cap rate)

Bottom

Residences

Logistics

Offices

Retail

Expansion

Recovery (Rising rents)

Recession(Falling rents)

BottomResidences

Logistics

Offices Retail

28

Dispositions

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

FP19(Aug.2011)

After privious PO

FP20(Feb.2012)

FP21(Aug.2012)

FP22(Feb.2013)

Financialannouncement(Apr.12,2013)

Offices Logistics Retail Residences Others

Achievements of external growth strategy ~After the previous PO~

Promoting flexible asset replacements in consideration of the real estate market changes

Disposed an old and relatively small office building and acquired a new office building

Acquired 2 residential properties as the rental residential market in the Sendai area anticipated a turnaround

Yield after depreciation of entire portfolio increased after disposition of residential properties and acquisition of retail facilities

Disposed a relatively small logistics facility as the logistics facilities transaction market anticipated a turnaround

Asset Acquisitions and Dispositions after the Previous PO Acquisitions


Acquired a 1st fee-based senior housingfacility for OJR

(Note) Variance between sale price and book value at the end of the previous period when the respective disposition recorded is described.

Period Property TypeSale price（million

yen）

SaleGain/Loss

（Note）（mil l ion yen）

Leasing NOIyield before

sale

Yield afterdepreciationbefore sale

FP20 Beside Shirogane Offices 1,360 95 6.9% 5.6%

FP21 Koshigaya Logistics Center Logistics 3,830 144 5.4% 3.9%

Financialannounce

mentShibaura Island Bloom Tower Residences 5,630 426 6.1% 2.6%

10,820 665 5.9% 3.4%Total 3

Period Property Type

Acquisitionprice

（millionyen）

AssumedLeasing NOI

yield atacquisition

AssumedYield after

depreciationat

acquisition

Building ageat

acquisition（years）

To totalappraisalvalue at

acquisition

Komaki Logistics Center Logistics 2,700 6.1% 3.1% 0.8 100.0%

Shibaura Island Air Tower Residences 6,030 6.7% 3.5% 4.4 100.0%

ORIX Kobe Sannomiya Building Offices 3,800 6.3% 3.6% 2.1 99.5%

Retail

（Category killers)

Belle Face Mishuku Residences 2,000 5.7% 4.3% 4.8 94.8%

Belle Face Miyamachi Residences 1,500 7.3% 4.6% 4.6 94.9%

Belle Face Bansui-street Residences 832 6.8% 4.3% 4.2 95.4%

Belle Face Togoshi Statio Residences 2,642 5.4% 3.2% 2.5 95.0%

Retail

（Urban-type)

Retail

（NSC）

GOOD TIME LIVING Shin-urayasu Others 1,550 6.9% 5.8% 5.9 94.5%

Belle Face Meguro Residences 3,330 5.1% 3.7% 2.7 96.0%

31,434 6.3% 4.2% 4.5 96.7%

Retail

（Urban-type)

Retail

（Urban-type)

Retail

（NSC）

Retail

（Category killers)

32,770 5.1% 4.0% 3.8 97.5%

64,204 5.7% 4.1% 4.2 97.1%Total 16

2.1 97.4%

Tecc Land Totsuka (Land) 6,020 5.5% 5.5% - 98.9%Follo

win

g th

e re

cent

PO

Financialannouncement

CROSS GARDEN KAWASAKI 12,950

ORE Yurakucho 9,900 4.2% 3.8%

Total 4

The Kitahama PLAZA 3,900 5.7% 3.1% 4.0

5.4% 3.8%

5.6% 5.7 90.9%

6.0 97.1%

96.9%

FP22

Total 12

6.2% - 95.8%

FP21

aune Sapporo Ekimae 1,900 6.5% 5.7% 18.0 96.0%Afte

r the

pre

viou

s P

O

FP19

FP20 Home Center Musashi SendaiIzumi (Land) 2,350 6.2%

Morioka Minami ShoppingCenter Sansa 2,800 7.4%

29

Aiming to increase the profitability and stability of portfolio by leveraging the strengths of a diversified portfolio REIT and advancing diversified investments

Diversified Investments

Portfolio Overall Offices

Total acquisition price ¥383.0 bil Total acquisition price ¥241.0 bil

No. 73 No. 41

Occupancy rate 98.5% Occupancy rate 96.5%

Leasing NOI yield 5.0% Leasing NOI yield 4.5%

Yield after depreciation 3.6% Yield after depreciation 3.3%

Logistics Facilities Retail Facilities

Total acquisition price ¥30.8 bil Total acquisition price ¥60.7bil

No. 4 No. 14




Residential Properties Others

Total acquisition price ¥33.9 bil Total acquisition price ¥16.5 bil

No. 12 No. 2




As of financial announcement of FP22(April 12, 2013)

Portfolio Diversification (acquisition price base)

Retail Facilities15.9％

Residential Properties

8.9％

Others4.3％

Offices62.9％Logistics

Facilities8.0％

30

Appendix

31Actual Financial Highlights(million yen)

(million yen)

FP18 FP19 FP20 FP21 FP22Feb. 2011 Aug. 2011 Feb. 2012 Aug. 2012 Feb. 2013

Funds From Operation 5,587 5,472 6,090 5,965 6,198

Depreciation 2,171 2,408 2,660 2,722 2,764

Finance Lease Cost 74 85 86 87 87

CAPEX 54 234 262 379 387

Free Cash Flow 2,190 2,260 2,485 2,429 2,464

FP18 FP19 FP20 FP21 FP22Feb. 2011 Aug. 2011 Feb. 2012 Aug. 2012 Feb. 2013

Operating Revenues 10,741 11,533 12,151 12,271 12,177

Operating Income 4,790 4,963 5,187 5,032 5,016

Ordinary Income 3,292 3,245 3,462 3,321 3,356

Net Income 3,291 3,308 3,430 3,315 3,346

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

Net Assets 141,373 154,471 154,326 154,279 154,310

Total Assets 318,738 341,514 345,469 344,997 349,154Number of investment units issued

(units) 251,622 284,434 284,434 284,434 284,434

Net Assets per Unit (yen) 561,847 543,084 542,575 542,409 542,517

Distribution per Unit (yen) 13,083 12,571 11,822 11,656 11,764

32Major TenantsTop 10 Tenants as of 22nd Period End (Reference) As of 21st 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 with the trustee.

Sector Property Name Rented Space(㎡)

Share of TotalRented Space

(%)

1NIPPON EXPRESSCo., Ltd.

Transportation Sakai Logistics Center NorthBuilding 64,004.80 10.2

2Arcland SakamotoCo., Ltd. Retailer

Home Center Musashi SendaiIzumi (Land) 56,109.95 8.9

3 SENKO Co., Ltd. Transportation Ichikawa Logistics Center 37,456.96 6.0

4 Keiyo DistributionWarehouse Co., Ltd. Warehousing Toda Logistics Center 36,158.60 5.8

5 DAIKYO REALDOINCORPORATED

Real Estate

Round-Cross minamiazabuRound-Cross TsukijiWe Will HatchoboriBelle Face Togoshi StatioBelle Face KamataBelle Face Hongo YumichoBelle Face Osaka ShinmachiBelle Face MiyamachiBelle Face Bansui-street

33,998.18 5.4

7 ORIX Real EstateCorporation Real Estate

Morioka Minami ShoppingCenter SansaShibaura Island Bloom TowerGOOD TIME LIVINGShin-urayasu

23,618.26 3.8

6 Fujita Kanko Inc. Hotel Cross Gate 19,744.39 3.1

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

9 Cainz Co., Ltd. Retailer Kobe Momoyamadai ShoppingCenter (Land) 16,715.94 2.7

10

Mitsui Fudosan HousingLease Co.,Ltd.R.A. AssetManegement Inc.(Note 3)

Real Estate Shibaura Island Air Tower 12,357.65 2.0

318,254.49 50.7Total

Name of Tenant Rented Space(㎡)

Share of TotalRented Space

(%)

1 NIPPON EXPRESSCo., Ltd. 64,004.80 10.4

2 Arcland SakamotoCo., Ltd. 56,109.95 9.1

3 SENKO Co., Ltd. 37,456.96 6.1

4 Keiyo DistributionWarehouse Co., Ltd. 36,158.60 5.8

5 DAIKYO REALDOINCORPORATED 33,389.32 5.4

6 Fujita Kanko Inc. 19,744.39 3.2

7 ORIX Real EstateCorporation 19,474.66 3.2

8 (Not disclosed) (Note 2) 18,089.76 2.9

9 Cainz Co., Ltd. 16,715.94 2.7

10

Mitsui Fudosan HousingLease Co.,Ltd.R.A. Asset ManegementInc.(Note 3)

12,423.04 2.0

313,567.42 50.7

Name of Tenant

Total

33

ORE Yurakucho

Location Chiyoda Ward, Tokyo

Acquired April 1, 2013

Price ¥9,900 million

Appraisal Value ¥10,200 million

Price/Appraisal 97.1%

Built February 2007

Floors9 above ground3 below ground

Land Area 454.41㎡

Total Floor Area 4,286.53㎡

Seller ORIX Real Estate Corporation

Acquired a Urban retail facility located nearby JR Yurakucho Station

New Acquisitions from FP22 onward (1)

The tenants are comprised of restaurants, i.e. family restaurants, izakaya, etc. and an amusement facility, i.e. karaoke.

Many of the restaurants can expect not only office workers but also a wide customer base including seniors and lady shoppers throughout day and night, especially the convenient family restaurants and such. All kinds of shops are lined up for various customer scenes.

In addition, synergetic effects among tenants and with close retail facilities can be expected.

Tenant Features

This property is relatively new, completed about 6 years ago, and developed by ORIX Real Estate Corporation.

After the acquisition, operational management was entrusted to ORIX Real Estate Corporation, the previous owner who was involved from the stage of planning and development and is very familiar with the property.

ORIX Synergy

The property is located in Yurakucho, one of Japan’s foremost commercial and office areas.

Access is excellent as the property is directly connected to Hibiya Station on the Tokyo Metro Hibiya Line and is a 2-minute walk from JR Yurakucho Station, and the property is expected to attract a good level of customers due to its high visibility.

Location and Trade Area

34

The Kitahama PLAZA

The property is directly connected to Kitahama Station of the Osaka Municipal Subway Line and faces Sakaisuji.

It is a retail facility with 6 floors aboveground and 1 underground built next to the building of 54 storied 465 condominium units.

A population influx into the neighborhood area is expected due to construction of condominiums in recent years at former sites of old office buildings and such.

Demand from office workers as well as neighborhoodresidents can be expected due to locational features.


The tenants comprise mainly of neighborhood trade area tenants such as a fitness club “Konami Sports”, a medical mall and a food supermarket.

Long-term fixed leasing agreements with periods of more than 10 years are contracted with the three anchor tenants, fitness club, medical mall and food supermarket and stable revenues can be expected.

Tenant Features

After the acquisition, operational management was entrusted to ORIX Real Estate Corporation.

ORIX Synergy

Location Osaka City, Osaka





Built February 2009

Floors6 above ground 1 below ground

Land Area 5,124.56㎡(Note 1)

Total Floor Area 11,111.89㎡(Note 2)

Seller Godo Kaisha North Beach

New Acquisitions from FP22 onward (2) Acquired a Urban retail facility directly connected to Kitahama Station of the

Osaka Municipal Subway Line

(Note 1) The property is a compartmentalized ownership building and the site’s ownership ratio is 175,818 of 1,000,000.

(Note 2) OJR holds 80% of the property’s co-ownership.

35

CROSS GARDEN KAWASAKI

Development is expected for this area in the future such as large-scale developments nearby, i.e. condominiums, etc.

The population within 1 to 5 km radius trade area of the property is increasing.

The ratio of families with 2 to 4 people household is high in the walking distance trade area of 1 km radius and there are many relatively young families in their 30s or 40s.

Customers are expected to not only come by car but also by walk.


With a food supermarket and Yamada Denki Co., Ltd., an large electronic appliance retailer, as the anchor tenants, there are 17 daily life-related tenants in total including a medical mall, drug store, 100 yen = one dollar shop, restaurant and game.

Tenant Features

The property is relatively new, completed about 2 years ago, and was developed by ORIX Real Estate Corporation.

Aiming to stabilize the property’s revenues and add value by entrusting operational management to ORIX Real Estate Corporation, the previous owner who was involved from the stage of planning and development and is very familiar with the property and by contributing to tenant sales with periodic events and such.

ORIX Synergy

Location Kawasaki City, Kanagawa

Acquired March 29, 2013




Built February 2011


Land Area 13,473.70㎡



New Acquisitions from FP22 onward (3) Acquired a NSC located in Kawasaki city, Kanagawa

36

Tecc Land Totsuka (land) Located 1-minute walk from Odoriba Station of the

Yokohama Municipal Subway Line. Area population is increasing and concentrated due to

accessibility to JR Yokohama Station and JR Totsuka Station.

It is located along a main road and is highly accessible by car

The trade area widely ranges from Totsuka Ward and Izumi Ward of Yokohama City to parts of Ayase City and has a rich market population.


A business fixed-term land lease right contract is concluded with Yamada Denki Co., Ltd., a large electronic appliance retailer, and stable cash flow is expected to go forward.

Tecc Land Totsuka is its flagship store with wide shop space of 1,432 tsubos on the first floor and 1,420 tsubos on the second floor, aggregated to total of 2,852 tsubos. Besides home appliances and computers, it sells food, household goods, books, toys, etc., a wide variety of products.

Tenant Features

Acquired a Category Killers located in Yokohama city, Kanagawa

ORIX Real Estate Corporation acquired the land and is renting it to Yamada Denki Co., Ltd.

Yamada Denki opened its Tecc Land Totsuka store in 2011. After the acquisition, operational management was entrusted

to ORIX Real Estate Corporation, the previous owner who is very familiar with the property.

ORIX Synergy

Location Yokohama City, Kanagawa








37

Acquired a Fee-based senior House with nursing care which stable occupancy isexpected to go forward and acquired a residential property in central Tokyo, with excellent convenience as well as profitability & stability


GOOD TIME LIVING Shin-urayasu Belle Face Meguro

Location Shinagawa Ward, TokyoAcquired October 19, 2012Price ¥3,330 million

Appraisal Value ¥3,470 millionPrice/Appraisal 96.0%Built February 2010





Location Urayasu City, ChibaAcquired September 6, 2012


Appraisal Value ¥1,640 millionPrice/Appraisal 94.5%Built October 2006

Floors 4 above ground



SellerHospitality･Residence･Two Special Purpose Companies

38

383.0

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

-50

0

50

100

150

200

250

300

350

400

Portfolio Strategy

（billions of yen）

Office Logistics Retail Residential Others Sold

FP1 FP2 FP3 FP4 FP5 FP6 FP7 FP8 FP9 FP10 FP11 FP12 FP13 FP14 FP15 FP16 FP17 FP18 FP19 FP20 FP21 FP22 Financial

End End End End End End End End End End End End End End End End End End End End End Endannouncem

ent

（8.02）（2.03）（8.03）（2.04）（8.04）（2.05） (8.05）（2.06）（8.06）（2.07）（8.07）（2.08）（8.08）（2.09） (8.09） (2.10) (8.10) (2.11) (8.11) (2.12) (8.12) （2.13） (4.12.13)

Promoted flexible property replacements in consideration of the real estate market changes

Financialannouncement

39Utilization of the ORIX Synergy (1)

The ORIX Group is involved not only in real estate but also debt, equity, operation and other varieties of business. The Group’s vast network is available to OJR for leasing and acquisition of properties.

The Group develops and manages offices, logistics facilities, retail facilities and residential properties and, furthermore, has the developmental and operational abilities for hotels and senior housing. This real estate business know-how of the ORIX Group can be used by OJR as it effectively and appropriately manages properties of a wide range of sectors and regions.

Promoted the utilization of the ORIX Group’s extensive business foundation and network for OJR’s external growth, internal growth and for the enhancement of personnel in the Asset Management Company

Utilization of the ORIX Group’s Business Network

OJR is able to use the ORIX Group’s business network of more than 1,000 based nationwide for leasing, market research, etc.

Utilization of the ORIX Group’s Regional Network

Operation

Debt

Equity

Real Estate

Life Insurance

Banking

Investment

Servicer

Automobilities

Ships/Aircraft

Environment/Energy

Investment Banking

Leasing

1. Group SapporoRepresentatives (54)

ORIX Corporation (1)ORIX Auto Corporation (50)ORIX Rentec Corporation (1)ORIX Life Insurance Corporation (1)Other (1)

Tokyo and Kanto Region (431)ORIX Corporation (22)ORIX Auto Corporation (320)ORIX Rentec Corporation (7)ORIX Life Insurance Corporation (9)ORIX Bank Corporation (2)Other (71)

3. Group Nagoya Representatives (232)ORIX Corporation (11)ORIX Auto Corporation (207)ORIX Rentec Corporation (1)ORIX Life Insurance Corporation (3)Other (10)

4. Group OsakaRepresentatives (139)

ORIX Corporation (8)ORIX Auto Corporation (83)ORIX Rentec Corporation (2)ORIX Life Insurance Corporation (5)ORIX Bank Corporation (1)Other (40)

5. Group Chugoku Representatives (97)


6. Group FukuokaRepresentatives (193)

ORIX Corporation (8)ORIX Auto Corporation (158)ORIX Rentec Corporation (2)ORIX Life Insurance Corporation (4)ORIX Bank Corporation (2)Other (19)

The figures in parenthesis are the number of basesSource: ORIX Corporation

・Development and rental・Facility operation・Asset management・Investment and advisory services

・Loan servicing・Non-performing loan

investment

・Principal investment・Business rehabilitation support・Bond investment・Venture capital

・Car rental・Maintenance services・Vehicle management・Car sharing

・Asset management・Ship/aircraft investment

・Waste disposal and recycling・Energy-saving measures・Sale of solar power systems・Electric business

・M&A advisory・Fund management

Source: ORIX Corporation

・Machinery and equipment leasing・Automobile leasing・Leasing and rental of precision

measuring devices and IT-related equipment

・Ship/aircraft leasing

・Corporate finance・Housing loans・Card loans

Lending

2. Group Sendai Representatives (76)


40

Promoted the utilization of the ORIX Group’s extensive business foundation and network for OJR’s external growth, internal growth and for the enhancement of personnel in the Asset Management Company

Examples of Utilization of the ORIX Synergy at OJR’s owned properties

■ GOOD TIME LIVING Shin-urayasu

Leasing utilized the ORIX Group’s information network

Tenant leasing for this property is conducted using the information network of ORIX Group’s Sapporo branch. Given that the area has a food culture, OJR succeeded in tenanting a local restaurant through the introduction of the ORIX Group’s Sapporo branch.

■ Morioka Minami Shopping Center Sansa

Market research and master leasing utilized the ORIX Group’s information networkBefore the acquisition of the property, OJR used the information of the ORIX Group’s Morioka branch to survey the property’s customer status by day of the week and hour, product strengths, reputation, etc. OJR decided to acquire the property as it evaluated that the local community-oriented services of the tenants was excellent.Following the acquisition, OJR concluded a rent guarantee-type master lessee agreement with ORIX Real Estate Corporation, contributing to the stability of rental income.

Management, operation and master leasing by the ORIX Group

This is OJR’s first investment in a fee-based senior housing facility. ORIX Living Corporation, which is very experienced in managing fee-based senior housing, has managed the property since its opening. In addition, ORIX Living Corporation provided information on the property’s locational features, occupancy status and satisfaction of residents when OJR was considering acquisition. OJR decided to acquire the property after it deemed the property excellent based on the information provided.

■ aune Sapporo Ekimae, formerly known as Heiseikankou Sapporo Ekimae Building (Note)

■ aune Kohoku Leasing utilized the ORIX Group’s information network

A restaurant was brought as a new tenant through the introduction of the ORIX Group. Furthermore, given that the area is one of Japan’s foremost bed towns with a large family population and is very education-oriented even in Kanagawa, some floors of the property were transformed from offices to tutor schools and restaurants, thereby realizing a new tenant composition in line with consumer demand.

■ Belle Face Bansui-Street and Belle Face Miyamachi Market research utilized the ORIX Group’s information network

Using the information network of the ORIX Group’s Sendai branch to grasp at an early stage the turnaround of the Sendai area’s rental market following the Great East Japan Earthquake, 2 rental apartments in Sendai were acquired.

Utilization of the ORIX Synergy (2)

(Note) “aune Sapporo Ekimae” was renamed from “Heiseikankou Sapporo Ekimae Building” as of April 1, 2013.

41

Date Price(￥million)

Toda Logistics Center March 28. 2008 9,600 2.5Ichikawa Logistics Center September 29. 2008 8,300 2.2Subtotal 2 properties 17,900 4.7Sakai Logistics Center North Building March 30. 2010 10,200 2.7Komaki Logistics Center June 30. 2011 2,700 0.7Subtotal 2 properties 12,900 3.4Logistics Facilities Total 4 properties 30,800 8.0Nihon Jisho Minami Aoyama Building October 31. 2003 2,548 0.7CUBE Daikanyama March 31. 2004 2,435 0.6ORE Yurakucho(Note 3) April 1. 2013 9,900 2.6Subtotal 3 properties 14,883 3.9aune Kohoku March 10. 2010 4,000 1.0aune Makuhari March 10. 2010 3,600 0.9Maruetsu Sagamino March 1. 2011 2,350 0.6CROSS GARDEN KAWASAKI(Note 3) March 29. 2013 12,950 3.4Tecc Land Totsuka (Land)(Note 3) April 1. 2013 6,020 1.6Subtotal 5 properties 28,920 7.5Kobe Momoyamadai Shopping Center (Land) March 5. 2010 3,260 0.9Okayama Kume Retail Facility January 31. 2011 2,750 0.7Home Center Musashi Sendai Izumi (Land) January 11. 2012 2,350 0.6aune Sapporo Ekimae(Note 4) June 29. 2012 1,900 0.5Morioka Minami Shopping Center Sansa July 31. 2012 2,800 0.7The Kitahama PLAZA(Note 3) April 1. 2013 3,900 1.0Subtotal 6 properties 16,960 4.4Retail Facilities Total 14 properties 60,763 15.9Park Axis Nishi Azabu Stage December 1. 2001 1,219 0.3We Will Hatchobori June 1. 2011 2,370 0.6Shibaura Island Air Tower July 28. 2011 6,030 1.6Belle Face Togoshi Statio May 9. 2012 2,642 0.7Belle Face Meguro(Note 3) October 19. 2012 3,330 0.9Subtotal 5 properties 15,591 4.1Belle Face Kamata June 1. 2011 3,550 0.9Belle Face Hongo Yumicho June 1. 2011 3,340 0.9Belle Face Mishuku March 30. 2012 2,000 0.5Subtotal 3 properties 8,890 2.3Belle Face Osaka Shinmachi June 1. 2011 3,684 1.0Belle Face Amagasaki June 1. 2011 3,440 0.9Belle Face Miyamachi April 5. 2012 1,500 0.4Belle Face Bansui-street April 5. 2012 832 0.2Subtotal 4 properties 9,456 2.5Residential 12 Total 33,937 8.9Cross Gate January 10. 2002 15,040 3.9GOOD TIME LIVING Shin-urayasu(Note 3) September 6. 2012 1,550 0.4Subtotal 2 properties 16,590 4.3Others Total 2 properties 16,590 4.3

383,094.0 100.0

Other Areas

Other Parts ofthe GreaterTokyo Area

RetailFacilities

ResidentialProperties

Others

AreaType

Other Areas

6 CentralTokyo Wards


Other Areas


RemainingTokyo Wards

LogisticsFacilities

Grand Total 73 properties

% toTotal Acquisition Price

(Note 1)(Note 2)Property

Acquisition


Portfolio Summary

(Note 1) “Percentage to the total acquisition price” refers to the acquisition price of each property under management as a proportion of the total acquisition price.(Note 2) Figures are rounded to the first decimal place for the “Percentage to the total acquisition price.” Totals for the “Percentage to the total acquisition price” may not tally due to this rounding.(Note 3) The properties acquired in and after the 22nd Fiscal Period are GOOD TIME LIVING Shin-urayasu, Belle Face Meguro, ORE Yurakucho, The Kitahama PLAZA, CROSS GARDEN KAWASAKI and Tecc Land Totsuka (Land).(Note 4) “aune Sapporo Ekimae” was renamed from “Heiseikankou Sapporo Ekimae Building” as of April 1, 2013.

Date Price(￥million)

Aoyama Suncrest Building December 1. 2001 3,356 0.9Round-Cross Ichi-bancho December 1. 2001 3,900 1.0Round-Cross Nishi Shinjuku December 1. 2001 2,650 0.7DT Gaien December 21. 2001 2,430 0.6Nihonbashi East Building December 21. 2001 1,720 0.4Yoyogi Forest Building December 21. 2001 1,473 0.4Round-Cross Minami Azabu December 21. 2001 1,394 0.4Round-Cross Akasaka January 10. 2002 2,624 0.7Round-Cross Mita January 10. 2002 1,748 0.5Shiba Daimon Building January 10. 2002 2,195 0.6Round-Cross Tsukiji January 10. 2002 3,378 0.9ORIX Shiba 2-chome Building September 29. 2003 7,500 2.0Aoyama 246 Building March 3. 2004 5,200 1.4Round-Cross Shinjuku April 28. 2006 8,020 2.1

September 30. 2005April 28. 2006

June 26 . 2006December 4. 2006

Round-Cross Shinjuku 5-chome April 26. 2007 4,500 1.2Nihonbashi Honcho 1-chome Building March 28. 2007 10,500 2.7Round-Cross Shibuya March 28. 2008 3,500 0.9ORIX Suidobashi Building March 28. 2008 3,000 0.8ORIX Shinagawa Building June 27. 2008 15,200 4.0ORIX Real Estate Nishi Shinjuku Building March 27. 2009 13,600 3.6OX Tamachi Building March 29. 2010 6,730 1.8Subtotal 23 properties 144,478 37.7Carrot Tower December 1. 2001 5,479 1.4Toyo MK Building December 1. 2001 5,270 1.4Beside Kiba December 21. 2001 2,450 0.6ORIX Ikebukuro Building April 18. 2003 9,577 2.5Round-Cross Kamata March 1. 2006 5,640 1.5KN Jiyugaoka Plaza May 30. 2007 3,110 0.8ORIX Meguro Building July 29. 2010 6,350 1.7Akihabara Business Center June 1. 2011 5,060 1.3Subtotal 8 properties 42,936 11.2Neo City Mitaka December 1. 2001 2,200 0.6Round-Cross Kawasaki April 27. 2004 4,130 1.1Omiya Miyacho Building March 27. 2009 4,400 1.1Omiya Shimocho 1-chome Building March 29. 2010 3,750 1.0Subtotal 4 properties 14,480 3.8Nagoya Itochu Building September 29. 2003 4,500 1.2ORIX Koraibashi Building April 27. 2005 5,560 1.5Lunar Sendai June 28. 2007 8,500 2.2ORIX Nagoya Nishiki Building September 29. 2008 12,500 3.3ORE Sapporo Building October 1. 2010 4,250 1.1ORIX Kobe Sannomiya Building September 29. 2011 3,800 1.0Subtotal 6 properties 39,110 10.2Offices Total 41 properties 241,004 62.9

% toTotal Acquisition

Price(Note 1)(Note 2)

Property

Seafort Square / Center Building

Acquisition

18,000

5.7

Other Areas

4.7

21,860ORIX Akasaka 2-chome Building

Offices


RemainingTokyo Wards


AreaType

List of all real estate owned by ORIX JREIT as of financial announcement (April 12, 2013)

42Portfolio Map

43Portfolio Data (1)Average Disposition/Acquisition Price after IPO Property Size (Floor area)

Acquisition Price Ranges Building Age

Average22,171

㎡

Under3,000 m2

3.17billion yen

5.96billion yen

Average15,734

㎡

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

Over 15,000 m2

3,000 m2-15,000 m2

Under3,000 m2

40.3%

46.0%

13.6% Over 15,000 m2

3,000 m2-15,000 m2

63.6%

28.9%

Financial announcement of FP22(Apr. 12, 2013)

(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-¥5billion50.2% ¥5-¥10billion

15.9%

Under¥1billion

7.2% Over ¥10billion26.7%


¥1-¥5billion34.9%

Over ¥10billion33.9%Average

¥5.24billion

¥5-¥10billion31.0%


5-10yr24.8%

Under 5yr19.0%

15-20yr6.2%

10-15yr29.6%

Over 20yr20.4%

Average 12.1

years

Average10.8

years

5-10yr41.8%

Under 5yr19.2%

15-20yr11.3%

10-15yr11.2%

Over 20yr16.5%

Under ¥1billion 0.2%

7.5%

44Portfolio Data (2)Area Type


Other Area2.1%

Other Parts of the Greater Tokyo Area

17.3%

17.1% 63.5%

6 Central Tokyo Wards

Remaining Tokyo Wards


Other Area20.5% 6 Central

Tokyo Wards

45.7%

Remaining Tokyo Wards

13.5%

20.3%

Other Parts of the Greater Tokyo Area



Residentialproperties

4.1%Retailfacilities 1.5%

Others15.1%

Logisticsfacilities

8.0%

Offices62.9%

Offices79.4%

Retail facilities

15.9%

Others4.3%

8.9%

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.

45Overview of Appraisal Value Unrealized gain/loss continues to improve due to depreciation and property

acquisitions below the appraisal value, etc. in addition to improvement of cap rate

(Note 1) Unrealized gain/loss is calculated in subtracting the book value from the appraisal value, both as of the end of 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 fiscal period.

297.4 289.2273.3 262.2

277.9 285.0314.5 318.1 327.1 333.0

361.015.8

10.5

1.7

-1.8

-4.0 -4.3-3.0 -2.7

-1.7-0.6 -0.5

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

Book value Appraisal value Unrealized gain/loss ratio

FP13 End FP14 End FP15 End FP16 End FP17 End FP18 End FP19 End FP20 End FP21 End FP22 End Financial announcement

（billion yen）（%）

FP13 FP14 FP15 FP16 FP17 FP18 FP19 FP20 FP21 FP22 Financialannouncement

(End ofAug. 2008)

(End ofFeb. 2009)

(End ofAug. 2009)

(End ofFeb. 2010)

(End ofAug. 2010)

(End ofFeb. 2011)

(End ofAug. 2011)

(End ofFeb. 2012)

(End ofAug. 2012)

(End ofFeb. 2013)

(Apr 12.2013)

Number ofproperties 47 48 49 49 52 54 62 63 68 70 73

Appraisal value（billion yen） 297.4 289.2 273.3 262.2 277.9 285.0 314.5 318.1 327.1 333.0 361.0

Book value（billion yen） 256.7 261.8 268.8 266.9 289.4 297.9 324.3 326.7 332.6 335.1 362.6Unrealized

gain/loss （billion yen） 40.6 27.4 4.4 -4.7 -11.4 -12.8 -9.7 -8.6 -5.4 -2.1 -1.6Unrealized

gain/loss ratio (%) 15.8 10.5 1.7 -1.8 -4.0 -4.3 -3.0 -2.7 -1.7 -0.6 -0.5

46Appraisal Value List at the end of FP22 (1)

※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 22nd fiscal period

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

● Aoyama Suncrest Building 3,436 3,360 4.7% -76 -60 -1.8% -0.1% -45

● Round-Cross Ichi-bancho 3,436 3,070 5.0% -366 -10 -0.3% -0.1% 10

● Round-Cross Nishi Shinjuku 2,488 2,810 4.5% 321 100 3.7% -0.1% 107

● DT Gaien 2,229 2,030 4.9% -199 30 1.5% -0.1% 46

● Nihonbashi East Building 1,586 1,210 5.4% -376 0 0.0% -0.1% -10

● Yoyogi Forest Building 1,411 1,260 5.2% -151 10 0.8% -0.1% 16

● Round-Cross Minami Azabu 1,232 1,302 5.9% 69 0 0.0% 0.0% 5

● Round-Cross Akasaka 2,794 2,396 5.6% -398 -26 -1.1% -0.2% -15

● Round-Cross Mita 1,702 1,405 5.4% -297 42 3.1% -0.1% 8

● Shiba Daimon Building 2,266 2,462 5.4% 195 43 1.8% -0.1% 52

● Round-Cross Tsukiji 3,062 3,391 5.5% 328 -36 -1.1% 0.0% -19

● ORIX Shiba 2-chome Building 6,616 8,213 5.1% 1,596 96 1.2% -0.1% 132

● Aoyama 246 Building 5,381 6,693 4.3% 1,311 -7 -0.1% 0.0% 1

● Round-Cross Shinjuku 7,700 8,380 4.4% 679 110 1.3% -0.1% 142

● Seafort Square / Center Building 16,934 13,750 4.8% -3,184 -300 -2.1% -0.2% -259 ● ORIX Akasaka 2-chome Building 20,699 19,250 4.3% -1,449 -90 -0.5% 0.0% 20● Round-Cross Shinjuku 5-chome 4,147 3,220 4.6% -927 30 0.9% -0.1% 65

● Nihonbashi Honcho 1-chome 9,950 8,020 4.1% -1,930 -420 -5.0% -0.3% -364

● Round-Cross Shibuya 3,387 2,240 4.3% -1,147 20 0.9% 0.0% 35

● ORIX Suidobashi Building 2,869 2,620 4.9% -249 0 0.0% 0.0% 17

● ORIX Shinagawa Building 14,776 11,200 4.3% -3,576 0 0.0% 0.0% 60

● ORIX Real Estate Nishi Shinjuku 13,457 11,500 4.4% -1,957 100 0.9% 0.0% 141

● OX Tamachi Building 6,726 6,760 4.8% 33 10 0.1% -0.1% 22

▲ Carrot Tower 4,231 5,550 5.3% 1,318 100 1.8% -0.1% 149

▲ Toyo MK Building 4,199 5,190 5.6% 990 80 1.6% -0.1% 112

▲ Beside Kiba 2,103 2,480 5.5% 376 -10 -0.4% -0.1% 12

▲ ORIX Ikebukuro Building 8,577 10,510 4.9% 1,932 -60 -0.6% 0.0% -8

▲ Round-Cross Kamata 5,245 5,724 5.6% 478 -47 -0.8% -0.1% 2

▲ KN Jiyugaoka Plaza 3,122 2,630 4.5% -492 0 0.0% 0.0% 6

▲ ORIX Meguro Building 6,429 6,130 5.0% -299 -40 -0.6% -0.1% 10

▲ Akihabara Business Center 4,969 5,200 4.7% 230 20 0.4% 0.0% 69

■ Neo City Mitaka 1,948 2,770 5.6% 821 -30 -1.1% -0.1% -15

■ Round-Cross Kawasaki 3,867 5,033 5.5% 1,165 61 1.2% -0.1% 80

■ Omiya Miyacho Building 4,136 4,330 5.6% 193 90 2.1% -0.1% 131

■ Omiya Shimocho 1-chome Building 3,616 3,910 5.6% 293 90 2.4% -0.1% 125

★ Nagoya Itochu Building 4,811 4,530 6.3% -281 50 1.1% -0.1% 86

★ ORIX Koraibashi Building 4,843 4,357 5.2% -486 -20 -0.5% 0.0% 31

★ Lunar Sendai 7,742 5,070 5.8% -2,672 0 0.0% 0.0% 56

★ ORIX Nagoya Nishiki Building 11,678 7,700 5.2% -3,978 0 0.0% 0.0% 111

★ ORE Sapporo Building 3,990 4,547 6.6% 556 19 0.4% 0.0% 91

★ ORIX Kobe Sannomiya Building 3,691 3,840 6.0% 148 20 0.5% 0.0% 71

227,502 216,043 - -11,459 - - - -

■ Toda Logistics Center 9,058 9,300 5.1% 241 170 1.9% -0.1% 244

■ Ichikawa Logistics Center 7,746 7,880 5.3% 133 140 1.8% -0.1% 222

★ Sakai Logistics Center North Building 9,407 11,200 5.6% 1,792 200 1.8% -0.1% 357

★ Komaki Logistics Center 2,599 2,870 5.9% 270 40 1.4% -0.1% 81

28,811 31,250 - 2,438 - - - -

Logi

stic

sFa

cilit

ies

Offi

ces

Type PropertyAreaEnd of the 22nd Fiscal Period Change from the previous Period

Offices　Total

Logistics Facilities Total

47Appraisal Value List at the end of FP22 (2)

(Following are for reference)

(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 two properties acquired during FP22.(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) “aune Sapporo Ekimae” was renamed from “Heiseikankou Sapporo Ekimae Building” as of April 1, 2013.

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


● Nihon Jisho Minami Aoyama Building 2,495 3,356 4.3% 860 0 0.0% 0.0% 4

● CUBE Daikanyama 2,436 2,246 5.0% -190 0 0.0% 0.0% 6

■ aune Kohoku 3,854 3,970 5.6% 115 -30 -0.8% 0.0% -35

■ aune Makuhari 3,427 3,910 5.8% 482 10 0.3% 0.0% 50

■ Maruetsu Sagamino 2,324 2,430 6.0% 105 0 0.0% 0.0% 13

★ Kobe Momoyamadai SC (land) 3,314 3,230 - -84 20 0.6% - 11

★ Okayama Kume Retail Facility 2,671 2,867 6.8% 195 38 1.3% -0.1% 68

★ Home Center Musashi Sendai Izumi (land) 2,381 2,465 - 83 3 0.1% - 3

★ aune Sapporo Ekimae 1,916 2,007 6.1% 90 7 0.4% 0.0% 14

★ Morioka Minami Shopping Center Sansa 2,890 3,080 6.8% 189 0 0.0% 0.0% 0

27,711 29,561 - 1,849 - - - -

● Park Axis Nishi Azabu Stage 1,070 955 5.0% -115 17 1.8% -0.1% 24

● Shibaura Island Bloom Tower 5,203 5,608 5.4% 404 0 0.0% 0.0% 99

● We Will Hatchobori 2,323 2,356 4.8% 32 -13 -0.5% 0.0% 10

● Shibaura Island Air Tower 5,835 6,475 5.4% 639 -27 -0.4% 0.0% 65

● Belle Face Togoshi Statio 2,632 2,812 5.0% 179 28 1.0% -0.1% 56

● Belle Face Meguro 3,347 3,470 4.9% 122 - - - -

▲ Belle Face Kamata 3,464 3,758 5.3% 293 56 1.5% -0.2% 97

▲ Belle Face Hongo Yumicho 3,278 3,439 4.8% 160 -22 -0.6% 0.0% 10

▲ Belle Face Mishuku 2,042 2,148 5.1% 105 26 1.2% 0.0% 38

★ Belle Face Osaka Shinmachi 3,553 4,086 5.6% 532 92 2.3% 0.0% 149

★ Belle Face Amagasaki 3,349 3,403 5.8% 53 0 0.0% 0.0% 48

★ Belle Face Miyamachi 1,491 1,600 6.2% 108 20 1.3% -0.1% 40

★ Belle Face Bansui-Street 831 896 6.1% 64 14 1.6% -0.1% 24

38,423 41,006 - 2,582 - - - -

■ Cross Gate 11,091 13,500 6.3% 2,408 0 0.0% -0.1% 178

■ GOOD TIME LIVING Shin-urayasu 1,563 1,640 6.5% 76 - - - -

12,655 15,140 - 2,484 - - - -

335,104 333,000 - -2,104 - - - -

Type

Ret

ail F

acili

ties

Res

iden

tial P

rope

rtie

s

Total

Retail Facilities Total

Residential Properties Total

OthersOthers Total

AreaChange from the previous PeriodEnd of the 22nd Fiscal Period

Property


Offices 41 227,502 216,043 5.0% -11,459 -35 0.0% -0.1% 1,299

Logistics Facilities 4 28,811 31,250 5.4% 2,438 550 1.8% -0.1% 905

Retail Facilities 8 22,016 23,866 5.8% 1,850 25 0.1% 0.0% 121

Residential Properties 12 35,076 37,536 5.3% 2,460 191 0.5% 0.0% 788

Others 1 11,092 13,500 6.3% 2,408 0 0.0% -0.1% 254

Total （excluding land and propertiesacquired in FP22） 66 324,497 322,195 5.2% -2,303 731 0.2% -0.1% 3,171

Land 2 5,695 5,695 - -1 23 0.4% - 14

Properties acquired in FP22 2 4,911 5,110 5.4% 198 - - - -

Total 70 335,104 333,000 - -2,104 - - - -

End of the 22nd Fiscal Period Change from the previous PeriodNo.ofPropertiesType

48Financial Data

【FP22】【FP23】

Credit ratings

List of lenders Total: 25 institutions163,890 million yen

Total: 20,000 million yenInvestment corporation bonds

Financial indicators(As of April 12, 2013)

Refinancing since FP22

S&P Outlook ： StableR&I Rating outlook ： StableJCR Rating outlook ： Stable

Long-term rating： A-, Short-time rating： A-2Issuer rating： A+Long-term senior debt rating ： AA-

Amount \12.0 billion

Interesttype

Fixed

Interestrate

2.08%

Maturity 3 years

Previous Terms

Amount \5.0 billion \2.0 billion \5.0 billion

Interesttype

Fixed Fixed Fixed

Interestrate

0.76% 0.84% 1.45%

Maturity 5 years 5 years 8 years

New Terms

Amount \14.0 billion

Interesttype

Fixed

Interestrate

1.69%

Maturity 3 years

PreviousTerms

Amount \9.9 billion

Interesttype

Fixed

Interestrate

1.59%

Maturity 5 years

PreviousTerms New Terms

Amount \9.9 billion

Interesttype

Fixed

Interestrate

1.07%

Maturity 6 years

Amount \10.0 billion \4.0 billion

Interesttype

Fixed Fixed

Interestrate

0.75% 0.91%

Maturity 2 years 5 years

New Terms

Balance(million yen)

Interestrate Issued date Period

Unsecured InvestmentCorporation Bond No. 2 5,000 1.44% Aug. 12, 2010 　4 yrsUnsecured InvestmentCorporation Bond No. 3 5,000 1.58% Nov. 18, 2010 　5 yrsUnsecured InvestmentCorporation Bond No. 4 5,000 1.40% Jan. 27, 2011 　3 yrsUnsecured InvestmentCorporation Bond No. 5 5,000 0.76% Feb. 8, 2013 　5 yrs

Financial Institution Outstanding（million) Financial Institution Outstanding

（million)

Sumitomo Mitsui Trust Bank, Limited 26,538 16.2 ％ The Shizuoka Bank, Ltd. 2,000 1.2 ％

Sumitomo Mitsui Banking Corporation 26,094 15.9 ％THE NISHI-NIPPON CITY BANK,LTD. 1,800 1.1 ％

Development Bank of Japan Inc. 21,125 12.9 ％Mitsui Life Insurance CompanyLimited 1,000 0.6 ％

Mitsubishi UFJ Trust and BankingCorporation 19,015 11.6 ％ The Hyakugo Bank, Ltd. 1,000 0.6 ％

National Mutual Insurance Federation ofAgricultural Cooperatives 10,000 6.1 ％ Taiyo Life Insurance Company 1,000 0.6 ％

Mizuho Corporate Bank, Ltd. 9,069 5.5 ％ THE KAGAWA BANK, Ltd. 1,000 0.6 ％

The Norinchukin Bank 8,500 5.2 ％ The Hiroshima Bank,Ltd. 1,000 0.6 ％

Aozora Bank, Ltd. 7,250 4.4 ％ The Bank of Yokohama,Ltd. 1,000 0.6 ％

Resona Bank, Limited 6,300 3.8 ％ Shimane bank, Ltd. 900 0.5 ％

The Shinkumi Federation Bank 5,800 3.5 ％ THE MINATO BANK, LTD. 600 0.4 ％

Shinsei Bank, Limited 4,400 2.7 ％ The Toho Bank, Ltd. 500 0.3 ％

The Bank of Fukuoka, Ltd. 4,000 2.4 ％ ShinGinko Tokyo, Limited 500 0.3 ％

ORIX Bank Corporation 3,500 2.1 ％

Ratio Ratio

Outstandinginterest-bearing debt ¥175,493 million ¥183,890 million

LTV(based on total assets) 50.3 ％ 48.8 ％

LTV(based on unitholders’ capital) 53.8 ％ 52.0 ％

Average interest rate 1.48 ％ 1.35 ％

Average funding cost 1.85 ％ -

Fixed-interest debt ratio 86.6 ％ 86.7 ％

Average remaining years tomaturity 3.1 years 3.5 years

Commitment lines(total for 6 lenders) ¥31,500 million ¥31,500 million

End of FP22（Feb.28, 2013）

Financialannouncement（Apr.12, 2013）

49

Individuals, etc. Financial, Inst. SecuritiesOther Corp. Overseas

Investment Units

21st period284,434 units

22nd 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 Ratio” data.

(Note 2) “STATE STREET BANK AND TRUST COMPANY 505223” was not among the 10 unitholders in the 21st fiscal period, so the numbers of units and share for the previous fiscal period are not shown.

Units Share（%）

Units Share（%）

Units ChangeRatio （%）

Japan Trustee Services Bank, Ltd.(Trust accounts)

46,799 16.4 59,849 21.0 13,050 27.9

Trust & Custody Services Bank, Ltd.(Securities investment trust accounts)

20,846 7.3 18,217 6.4 -2,629 -12.6

The Master Trust Bank of Japan, Ltd.(Trust accounts)

9,021 3.1 13,195 4.6 4,174 46.3

The Nomura Trust and Banking Co., Ltd.(Investment accounts)

16,895 5.9 13,149 4.6 -3,746 -22.2

JP MORGAN CHASE BANK 385174 11,447 4.0 11,343 3.9 -104 -0.9

NOMURA BANK (LUXEMBOURG)S.A.

8,168 2.8 10,395 3.6 2,227 27.3

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

Metlife Alico JPY 4,000 1.4 4,000 1.4 0 0.0

National Mutual Insurance Federation ofAgricultural Cooperatives

3,901 1.3 3,901 1.3 0 0.0

STATE STREET BANK AND TRUSTCOMPANY 505223　　 (Note 2)

- - 3,473 1.2 - -

Top 10 UnitholdersFP21 FP22 Change

UnitsShare（%）

UnitsShare（%）

UnitsChangeRatio（%）

Individuals, etc. 58,270 20.5 51,584 18.1 -6,686 -11.5Financial, Inst. 145,021 51.0 144,139 50.7 -882 -0.6

Major Banks, etc. 2,354 0.8 931 0.3 -1,423 -60.5Regional Banks 14,105 5.0 8,624 3.0 -5,481 -38.9Trust Banks 96,638 34.0 107,504 37.8 10,866 11.2Life Insurance 19,183 6.7 18,314 6.4 -869 -4.5Non-life Ins. 4,201 1.5 500 0.2 -3,701 -88.1Others 8,540 3.0 8,266 2.9 -274 -3.2

Securities 6,221 2.2 3,144 1.1 -3,077 -49.5Other Corp. 7,649 2.7 8,368 2.9 719 9.4Overseas 67,273 23.7 77,199 27.1 9,926 14.8

284,434 100.0 284,434 100.0 - -

UnitholderCategories

FP21 FP22 Change

Total

UnitholdersShare（%）

UnitholdersShare（%）

UnitholdersChangeRatio（%）

Individuals, etc. 17,837 97.1 17,253 96.9 -584 -3.3Financial, Inst. 74 0.4 68 0.4 -6 -8.1

Major Banks, etc. 1 0.0 1 0.0 0 0.0Regional Banks 16 0.1 13 0.1 -3 -18.8Trust Banks 13 0.1 12 0.1 -1 -7.7Life Insurance 8 0.0 7 0.0 -1 -12.5Non-life Ins. 3 0.0 3 0.0 0 0.0Others 33 0.2 32 0.2 -1 -3.0

Securities 21 0.1 16 0.1 -5 -23.8Other Corp. 257 1.4 262 1.5 5 1.9Overseas 185 1.0 205 1.2 20 10.8

18,374 100.0 17,804 100.0 -570 -3.1Total

FP22 ChangeUnitholderCategories

FP21

50

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 estate transaction , etc.)

Asset management company

100% owned

100%owned

・Engages in diversified businesses primarily on the financial and real estate sectors

ORIX Corporation

・Core company of the Group’s real estate business

・Leading the industry in development and transaction of office buildings, logistics facilities, condominiums, etc.

ORIX Real Estate Corporation

Supp

ly o

f pro

pert

ies

(pip

elin

e)

Supp

ly o

f pro

pert

ies

(pip

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e)

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 dispositions and acquisitions

ApplicationInvestment and Operation

Department

Risk Managementand Compliance Department

RiskManagement

and ComplianceCommitteeJointly conduct DD*

Reporting DD* results

Property disposition/acquisition

decided

OJR’s Board of Directorsprimarily comprised

of supervisory directorswithout interest relationship

OAMBoard ofDirectors

（Note）”Due Diligence” is inspection and assessment of properties from physical, legal and economic perspectives.

■OJR’s Board of DirectorsComprised of 1 Executive Director and 3 Supervisory

Directors a real estate appraiser, lawyer and certifiedpublic accountant with no relationship of interest

Acquisitions from and dispositions to interested parties must gain majority approval from the supervisory directors

■Asset Management Company (OAM)Conducts thorough due diligence in accordance to

various 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.

51Organization of OAM

Shareholders’ MeetingIndependent Public

AccountantsBoard of Directors

President and CEO

Corporate Auditor

Established specialized teams for each real estate sector

Investment and OperationDepartment

Finance and AccountingDepartment

Corporate PlanningDepartment

Internal AuditDepartment

Risk Management andCompliance Department

Risk Management andCompliance Committee

52Numerical 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.

Glossary・A “diversified portofolio REIT” is a real estate investment corporation that invests in a variety of sectors of real estate, etc., such as offices, logistics facilities, retail facilities and residences.

・The“ORIX synergy”refers to the cooperative relationship between OJR, ORIX Corporation and its group companies.・“Direct property management” is the supplementation of property management operations by OJR’s asset management company, ORIX AssetManagement Corporation, through leasing activities, adding of value to properties and other means while utilizing the ORIX synergy.

・“Acquisition price” is the price recorded in the sale agreement, etc. and does not include consumption tax or other expenses related to acquisition.

・Calculation of“Leasing NOI (Net Operating Income)”: Rental operating income (Rental operating revenue–Rental operating expenses) +Depreciation “Leasing NOI yield” is obtained by dividing the “annualized leasing NOI” by the “acquisition price”. The figure is rounded to the nearest first decimal place.The“annualized leasing NOI”uses either of the following for each property depending on the period when it was acquired. Properties acquired during the 22nd Fiscal Period (ended February 2013) or earlier: Actual annualized figure for the 22nd Fiscal Period (endedFebruary 2013).Properties acquired during the 23rd Fiscal Period (ending August 2013): The net operating income for the first fiscal year in the discountedcash flow (DCF) method recorded in the appraisal at the time of acquisition.

・“Yield after depreciation” is obtained by dividing the “annualized income after depreciation” by the “book value”. The figure is rounded to thenearest first decimal place.“Annualized income after depreciation” uses either of the following for each property depending on the period when it was acquired.・Properties acquired during the 22nd Fiscal Period (ended February 2013): Actual annualized figure for the 22nd Fiscal Period (endedFebruary 2013).・Properties acquired during the 23rd Fiscal Period (ending August 2013): The net operating income for the first fiscal year in the discountedcash flow (DCF) method recorded in the appraisal at the time of acquisition less the expected depreciation calculated by OJR. OJRcalculates the expected depreciation using the straight-line method depending on the service life of the properties, the same as for OJR’sowned assets,taking into consideration information from engineering reports and such.

・“Book value” uses either of the following for each property depending on the period when it was acquired.・Properties acquired during the 22nd Fiscal Period (ended February 2013) or earlier: The book value as of the end of the 22nd Fiscal Period(ended February 2013). ・Properties acquired during the 23rd Fiscal Period (ending August 2013): The acquisition price.

・“Occupancy rate” is sought by dividing “rented space” by “rentable space” and is rounded to the nearest first decimal place. Figures as of theend of the 22nd Fiscal Period (ended February 2013) are used.“Rented space” and “rentable space” concern either the owned portions and ownership ratio of real estate managed by OJR. “Rented space” refers to the space included in the rentable space for which lease contracts are actually concluded.“Rentable space” refers to the total floor space in OJR’s owned portion of each real estate that is practically leasable (including the concernedspace when leasing common spaces, etc.).

Terminology

53

・“Unrealized gain/loss” is the difference between the “appraisal value” and the “book value”. Figures are rounded off to the nearest specified unit.“Appraisal value” uses either of the following for each property depending on the period it was acquired.・As for the properties acquired before FP 22, appraisal values at the end of FP 22 (Feb. 2013) are indicated. ・Properties acquired during the FP23 (ending August 2013): The appraisal value acquire when the acquisition of the property was decided.

・“Appraisal rate” is obtained by dividing the acquisition price by the appraisal value at the time of acquisition. The figure is rounded to the nearest first decimal place.

・“Sale price” is the amount recorded in the sale agreement, etc. and does not include consumption tax or other expenses related to acquisition.・“FFO” stands for Funds From Operation and is the amount sought by the below formula :

FFO = Net income + Depreciation expenses + Finance lease costs - Gain/loss on sale of real estate・“NAV” or Net Asset Value is the figure derived from the following formula:

NAV = Unitholders’ capital + Unrealized gain/loss based on appraisal value・“Outstanding interest-bearing debt” is rounded down to the nearest whole number.・“LTV (based on total assets)” is sought by dividing debt outstanding as of the specified period by total assets of the same period. The figure is

rounded to the nearest first decimal place. The total assets of “LTV (based on total assets)” as of the date of financial announcement is calculated with the following formula: Total assets at the end of the previous fiscal period + Net increase in unitholders’ capital through public offering + Net increase in interest-bearing debt after the end of the previous fiscal period.

・“LTV (based on unitholders’ capital)” is calculated by dividing the balance of interest-bearing debt by the sum of unitholders’ capital and the balance of interest-bearing debt and is rounded to the nearest first decimal place.

・“Average funding cost” is the annualization of the figure obtained by dividing “the sum of interest expenses, interest on investment corporation bonds, funding related expenses and depreciation of investment corporation bonds issuance costs,” recorded in the profit and loss statements, by the “average outstanding total interest-bearing debt” of the period of concern. The figure is rounded to the nearest second decimal place.

・“Average remaining years to maturity” is based on the weighted average of the remaining period from the specified point of each interest-bearing debt to its repayment date or maturity date based on the balance of outstanding interest-bearing debt as of the specified point. Figures are rounded to the first decimal place.

・“Free cash flow” is the amount sought using the following formula: Free cash flow = Depreciation expenses + Finance lease costs - CAPEX

54

This document was provided and released solely with the intent of providing information. This document 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, or based on, Japan’s Financial Instruments and Exchange Law, Investment Trust and Investment Corporation Law, related

cabinet orders, cabinet office ordinances or rules, the rules governing companies listed on the Tokyo Stock Exchange, or any other applicable rules. This document contains forward-looking statements, including forecasts of financial position, results of operations, and business-related matters, as well as statements related to the plans and goals of the management of ORIX Asset Management Corporation (OAM), the investment trust management company that provides asset management services for OJR. However, there are a number of known and unknown risks and uncertainties that can cause actual results or OJR’s performance to differ materially from any explicit or implicit

forecasts contained herein. These forward-looking statements also 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 business operations.Although the information contained in this document is the best available at the time of publication, no assurances can be given regarding the accuracy, certainty, validity or fairness of this information. The content of this document can be modified or withdrawn without prior notice.

Documents

Financial Briefing for the 22nd Fiscal Period ended …...2013/04/15 · Financial Briefing for the 22nd Fiscal Period ended February 28, 2013 April 12, 2013 Prepared by ORIX Asset