(Ended Nov 30, 2007) (PDF:1.9

表紙

Financial Results for the Fiscal Year Ended Nov. 2007

Tosei Corporation （Ticker Symbol Number: 8923）

¾ Overview of Results I. Overview of Results for the Fiscal Year Ended Nov. 2007 －P. 3 ¾ Outlook for the Fiscal Year Ending Nov. 2008 and Medium-term Management Plan II. Tosei’s View of the Operating Environment and Fundamental Development Initiatives for the Fiscal Year Ending Nov. 2008 －P. 20 III. Outlook for the Fiscal Year Ending Nov. 2008 －P. 31 IV. Progress of the Medium-term Management Plan －P. 44

[Reference Materials] I. Introduction to Tosei 1. Tosei Group Overview －P. 48 2. Examples of Tosei Group Properties －P. 53 II. Supplementary Materials to the Results for the Fiscal Year Ended Nov. 2007 －P. 64 III. Supplementary Materials to the Medium-term Management Plan －P. 72 IV. Supplementary Materials on Real Estate Market Conditions －P. 75

Achievements in the Fiscal Year Ended Nov. 2007

¾ December 2006 Tosei Revival Investment Co., Ltd. executes acquisition to obtain real estate ¾ January 2007 Refurbished Value-Up Laboratory showroom opens ¾ February 2007 Completion of an environment-conscious condominium, THE Palms Setagaya Sakura ¾ March 2007 THE Palms Ryogoku and THE Palms Akabane completed; Ginza Wall Building acquired ¾ April 2007 Tosei REIT Advisors, Inc. acquires investment trust management license ¾ April 2007 THE Palms Honkomagome completed ¾ May 2007 ASCOT INC. entrusts Tosei with asset development and management; Ueno Tosei Building completed ¾ October 2007 Tosei Asset Management, Corp. established ¾ November 2007 Company applies for JASDAQ delisting ¾ Other Rooftop greening completed for a cumulative total of 35 buildings (started June 2006)

As of November 30, As of November 30, As of May 31, 2007 2006 2007 ¾Composition of Shareholders ・ Individuals & （） Others 54.33% 52.11% ⇒ 54.79% +2.68p ・ Financial （） institutions 14.68% 16.98% ⇒ 13.95% -3.03p ・ Securities ⇒ （） companies 0.83% 0.63% 0.72% +0.09p ・Overseas investors 13.33% 13.37% ⇒ 13.49% （+0.12p）・Other corporations 16.83% 16.91% ⇒ 17.04% （+0.13p）

Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 4 Overview of Results for the Fiscal Year Ended Nov. 2007 (Consolidated) (¥ million, %) FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 YoY change

(Consolidated) % of revenues (Consolidated) % of revenues %

Revenues 24,741 100.0 40,085 100.0 15,343 62.0

Cost of revenues 16,584 67.0 27,968 69.8 11,384 68.6

Gross profit 8,157 33.0 12,117 30.2 3,959 48.5

Selling, general and administrative expenses 2,256 9.1 3,110 7.7 854 37.8

Operating income 5,900 23.9 9,006 22.5 3,105 52.6

Ordinary income 5,323 21.5 7,949 19.9 2,625 49.3

Net income 2,737 11.1 4,557 11.4 1,820 66.5

Earnings per share (¥) 7,412.80 12,095.04 4,682.24 63.2

Return on equity (%) 23.3 26.4 3.1p

Return on total assets (%) 5.4 6.2 0.8p

Ordinary income per employee 39 40 1 3.1

Substantial growth in both revenues and ordinary income continued.

Ordinary Revenues ■1H (Dec. 1 – May 31) ■1H (Dec. 1 – May 31) ■2H (Jun. 1 – Nov. 30) Income ■2H (Jun. 1 – Nov. 30) （百万円） (¥ million)（百万円） (¥ million)

45,000 9,000 40,085 7,949 40,000 8,000 35,000 7,000 17,880 30,000 24,741 6,000 5,323 5,353 25,000 5,000 1,010 20,000 6,996 4,000 15,000 3,000 22,205 4,313 10,000 17,744 2,000 2,595 5,000 1,000 0 0 FY ended Nov. 30, FY ended Nov. 30, FY ended Nov. 30, FY ended Nov. 30, 2006 2007 2006 2007

(¥ million, %) Increased Personnel Expenses +¥499 million （+38.5%） FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 YoY change Average number of employees：FY ended Nov. 30, 2006: (Consolidated) % of revenues (Consolidated) % of revenues % 120.5 ⇒ FY ended Nov. 30, 2007: 164 （+36.1%） Revenues 24,741 100.0 40,085 100.0 15,343 62.0 Increased Advertising Expenses +¥97 million (+76.2%) Cost of revenues 16,584 67.0 27,968 69.8 11,384 68.6 ¾Billboards in Shibuya, Roppongi and Omote-sando ¾Advertising in subways, etc. Gross profit 8,157 33.0 12,117 30.2 3,959 48.5

Selling, general and Other administrative 2,256 9.1 3,110 7.7 854 37.8 ¾Tax and dues +¥108 million (+70.7%) Operating income 5,900 23.9 9,006 22.5 3,105 52.6 Increase in non-deductible consumption taxes Non-operating income 109 0.4 63 0.2 (46) (42.4) ¾Training expenses +¥14 million (+197.8%) Non-operating Training for additional personnel (management, expenses 687 2.8 1,120 2.8 433 63.1 communication and HR evaluation training) ¾Other remuneration paid +¥76 million (+144.0%) Ordinary income 5,323 21.5 7,949 19.9 2,625 49.3 Increase in auditors’ fees

Revitalization Business +¥3,257 million (+77.1%) Increased Interest Expense ¾Average balance of borrowings +¥18.1 billion (+54.2％) Development Business +¥343 million (+45.9%) FY ended Nov. 2007 ¥51.5 billion FY ended Nov. 2006 ¥33.4 billion Rental Business +¥741 million (+72.1%) ¾Increased interest expense +¥50.4 million (+85.5％)

Fund Business -¥294 million (-20.8%)

Maintain emphasis on revitalization while increasing the relative importance of development in the portfolio.

（） ¾Segment Revenues （Consolidated） Overall revenues were driven by revitalization and Revitalization business development businesses, while revenues from stable Development business Rental business earnings sources (rental and property management Fund business Property management business businesses) were firm. (¥ million) Alternative investment business 45,000 YoY increase 40,085 (decrease) (%) 40,000 Revitalization business 55.3% 35,000 30,000 Development business 128.5% 24,741 24,310 25,000 Rental business 85.7% 20,000 Fund business (19.2%) 15,650 15,000 Property management business 44.7% 8,781 10,000 3,842 Alternative investment business (22.4%) 5,000 1,838 3,415 1,419 1,147 Total 62.0% 1,904 2,755 0 335 260 FY ended FY ended Nov. 30, 2006 Nov. 30, 2007

Note: Total revenues are net of revenues from internal transactions between Group businesses.

The revitalization business secured high earnings through sales of large-scale office buildings and vacant buildings.

¾Revitalization Business Revenues/Income ◆ Major Sales ¾ Revenues and gross profit were driven by sales of large buildings including the Ueno Tosei Building (office building), the Tonegi Revenues Gross profit Revenues Operating income Building (vacant) and Sendagaya 2-chome (vacant) while profits (¥ million) Gross profit Operating income (¥ million) from small and medium-sized buildings grew steadily. 30,000 8,000 (¥ million, %) 7,480 Office Vacant Condos Other Total 7,286 7,000 & Buildings 25,000 Retail 6,000 Tosei Revenues 11,424 2,777 2,807 1,732 18,742 20,000 Gross profit 5,485 1,227 323 161 7,198 5,000 Gross profit 48.0% 44.2% 11.5% 9.3% 38.4% 4,223 15,000 4,040 24,310 4,000 marg in Pegasus Revenues 4,566 – 1,000 – 5,567 3,000 10,000 Gross profit 217 – 65 – 282 15,650 2,000 Gross profit 4.8% – 6.5% – 5.1% marg in 5,000 1,000 Total Revenues 15,991 2,777 3,808 1,732 24,310 Gross profit 5,703 1,227 388 161 7,480 0 0 Gross profit 35.7% 44.2% 10.2% 9.3% 30.8% FY ended FY ended marg in Nov. 30, 2006 Nov. 30, 2007 Properties 7 2 10 3 22 Gross Profit Margin 35.7% 44.2% 10.2% 9.3% 30.8% Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 9 Development Business

Revenues for the period were from residential properties only. Tosei has changed the timing of new office building sales because of the strong market.

¾Development Business Revenues/Income ◆Overview of Business ¾ Due to favorable market conditions, Tosei

Revenues Sales to end-users Gross profit delayed selling some office and residential (¥ million) Sales to investors Operating income Gross profit (¥ million) properties originally scheduled for sale in Operating income the year ended November 2007. 10,000 1,200 8,781 9,000 1,090 1,000 8,000 ◆Major Sales (Sales to investors) 7,000 823 800 ¾ THE Palms Den-en Chofu: sold to a private 6,000 747 3,842 equity fund 5,000 600 8,213 513 (Sales to individual end-users) 4,000 (Sales to individual end-users) 400 ¾ THE Palms Setagaya Sakura: (All 108 units 3,000 2,552 have been sold as of Nov. 30, 2007) 2,000 200 ¾ THE Palms Honkomagome: (All 35 units have 1,000 1,290 been sold as of Nov. 30, 2007) 568 0 0 ¾ THE Palms Yoga (Of a total of 25 units, 1 FY ended FY ended remains unsold as of Nov. 30, 2007) Nov. 30, 2006 Nov. 30, 2007

Holdings of superior assets are a stable source of earnings.

¾Rental Business Revenues/Income

Revenues Rent from current assets Gross profit ◆Overview of Business (¥ million) Rent from fixed assets Operating income Gross profit (¥ million) ¾ Total properties held: 67 (Compared with Nov. 30, 2006:2006 +10) Operating income 4,000 2,000 •Current assets: 44 properties 3,415 (Compared with Nov. 30, 2006 : +8) 3,500 1,768 1,800 (37 non-consolidated; 7 consolidated) 1,630 1,600 Revenues and income grew substantially 3,000 1,400 from medium- and large-scale property 1,838 holdings including the Ginza Wall Building 2,500 1,200 1,027 2,394 and the Kanda Tosei Building. 2,000 1,000 985 1,500 800 1,024 •Fixed assets: 23 properties 600 (Compared with Nov. 30, 2006 : +2) 1,000 400 Toranomon Tosei Building and Takaido 1,020 500 814 200 Tosei Studio reclassified from current assets 0 0 to stabilize operations. FY ended FY ended Nov. 30, 2006 Nov. 30, 2007

Note: Revenues include internal transactions (¥2 million in the FY ended Nov. 30, 2006; ¥39 million in the FY ended Nov. 30, 2007) Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 11 Fund Business (Asset Balance and Fund Lineup)

Fund assets at fiscal year-end totaled ¥93.6 billion, or 81 percent of our goal of ¥166.1billion (123 percent excluding REIT projections). Real Estate Assets under Management by Area (Asset Value Basis) Total assets Area Properties Balance of Fund Assets Under Management (¥ million) Tokyo 23 wards 5.9% Tokyo 23 wards 53 87,192 (¥ million) 100,000 Other Other 7 5,493 Total 60 92,685 90,000

80,000 94.1% 70,000

60,000 Real Estate Assets under Management by Use (Asset Value Basis) 50,000 Total assets 93,691 Use Properties 35,424 オフィスOffice (¥ million) 40,000 Office 31 57,182 レジデンスResidential 30,000 40.9% Residential 29 35,436 20,244 59.1% Total 60 92,685 20,000 14,766 41,251 10,000 1,282 4,991 449 2,559 0 Real Estate Assets under Management by Scale (Asset Value Basis) 3 4 5 6 0 0 0 0 Over ¥2 billion May Nov. 03May Nov. 04May Nov. 05May Nov. 06Nov. 07 20.0% ¥1-2 billion Total assets Scale Properties Under ¥1 billion (¥ million) Over ¥2billion 9 41,701 45.0% ¥1-2 billion 23 32,456 35.0% Under ¥1 billion 28 18,528 Total 60 92,685

Assets under management in funds are expanding rapidly. After deducting brokerage fees, fee income has increased strongly as a result of expansion in fund assets.

¾Fund Business Revenues/Gross Profit ◆Overview of Business ¾ Revenues and income declined due to a decrease in one- Gross profit Revenues Revenues Operating income time brokerage fees compared with the previous fiscal (¥ million) Gross profit (¥ million) Operating income year, and expenses for a subsidiary preparing for REIT listing (¥314 million). However, firm growth in asset 1,600 1,600 management fees due to a higher asset balance 1,417 1,400 1,400 contributed to ensuring a stable earnings base. 1,200 1,200 1,117 1,122 ¥ million Breakdown of Fee Revenues in the Fund Business 1,000 1,000 1,600 Brokerage 1,400 commission/Other 800 1,419 800 Asset management 1,147 1,200 600 600 1,000 Acquisition 586 800 400 400 Disposition 600 Incentive 200 200 400 200 Tokumei Kumiai 0 0 dividends 0 FY ended FY ended FY ended Nov. 30, FY ended Nov. 30, Nov. 30, 2006 Nov. 30, 2007 2006 2007 Note: Revenues include internal transactions (¥14 million in the FY ended Nov. 30, 2006; ¥27 million in the FY ended Nov. 30, 2007) Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 13 Property Management Business

Revenues grew substantially due to a large-scale property acquisition, but income only grew slightly because of higher SG&A expenses for internal management control system improvements.

¾Property Management Business Revenues/Income

Revenues Gross profit Revenues Operating income ◆ Overview of Results (¥ million) Gross profit Operating income (¥ million) ¾ Number of properties managed: 438 3,000 600 (Compared to 11/30/06 : +19) 534 • Office buildings: 300 (+9) 2,500 500 • Residential: 138 (+10) 434 ¾ Revenues grew substantially due to an 2,000 400 increase in buildings under management and 2,755 1,500 300 acquisition of a large-scale property ¾ Operating income was limited to a slight 1,904 1,000 200 increase because SG&A expenses rose on 122 129 outlays to improve management quality and 500 100 to create a strict internal management control

0 0 system. FY ended FY ended Nov. 30, 2006 Nov. 30, 2007

Note: Revenues include internal transactions (¥233 million in the FY ended Nov. 30, 2006) (¥516 million in the FY ended Nov. 30, 2007) Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 14 Alternative Investment Business

Focused on commercializing acquired properties and acquiring new ones.

¾Alternative Investment Business Revenues/Income

Revenues Gross profit ◆Overview of Results Revenues Gross profit Operating income (¥ million) •M&As Operating income (¥ million) ¾ Green House Co., Ltd., acquired in December 2006 to obtain its 400 350 328 property holdings, and merged with TADA MANUFACTORY INC. in September 2007 350 300 ¾ Revenues from these two transactions: 277 300 ¥1,939 million 250 •Debt collection through sale of Ginza 250 211 200 Wall Building Debt and Real Estate Holding Balances 200 ¾ Icarus Capital Co., Ltd. (Debt 335 150 acquired in April 2005) 3,500 Real estate holding balance Debt balance 3,530 150 131 •Debt purchases 260 3,000 100 100 ¾ Three new purchases (¥1,033 million) 2,500 50 2,497 50 •Real estate acquisition through 2,000

0 0 payment in kind 1,500 FY ended FY ended ¾ Two cases 1,000 1,985 Nov. 30, 2006 Nov. 30, 2007 (¥558 million) 1,722 500 1,033

0 Nov. 30, 2005 Nov. 30, 2006 Nov. 30, 2007

(¥ million) As of Nov. 30, As of May 31, As of Nov. 30, Decrease Increase Decrease Increase 2006 2007 2007

Total assets 60,136 17,443 33,039 75,732 15,812 27,003 86,922

Cash and deposits 6,644 638 - 6,005 823 - 5,181

Inventories 40,041 16,341 33,012 56,712 14,407 20,600 62,905 (Real estate)

Non-consolidated 34,229 11,425 28,594 51,399 14,003 20,148 57,543

Pegasus 5,811 4,916 4,418 5,313 403 451 5,361 Capital, Ltd. Fixed assets 8,034 43 27 8,018 581 5,983 13,420 (Real estate)

Other assets 5,416 420 - 4,995 - 419 5,414

[Capital from funds [238] [207] - [31] - - [31] included in above]

Current Inventories Acquisition of Properties for Funds • Current inventories as of Nov. 30, 2007 totaled • Pegasus sold 5 of its 6 properties at the start Increase in Fixed Assets ¥6.29 billion, equivalent to revenues of of the fiscal year, and purchased 4 new • The Toranomon Tosei Building, approximately ¥103.3 billion, or 2.3 years of target properties. The 5 properties are projected to Takaido Tosei Studio, etc. were shifted revenues for the fiscal year ending Nov. 30, 2008. generate 5.8 billion in revenues. from inventories to fixed assets to • During the fiscal year, the revitalization business • For now, Pegasus will continue to operate stabilize operations. sold 22 properties and acquired 40 properties. The as a bridge fund supplying properties to development business sold 4 and acquired 11. other funds.

(¥ million) As of Nov. 30 As of May.31 As of Nov. 30 Decrease Increase Decrease Increase 2006 2007 2007

Total Liabilities and 60,136 31,244 46,840 75,732 53,698 64,887 86,922 Net Assets Interest-bearing 38,547 31,244 43,440 50,743 52,877 61,824 59,690 debt

* * Interest-bearing 13,909 7,414 22,558 29,053 20,794 37,328 45,587 debt (short-term)

* * Interest-bearing 24,638 23,830 20,882 21,690 32,082 24,495 14,103 debt (long-term)

Other liabilities 6,359 - 2,440 8,800 820 - 7,979

Net assets 15,229 - 959 16,189 - 3,062 19,252

Net worth ratio 25.3 21.4 22.1

Increase in Interest-bearing Debt Decrease in Net Worth Ratio •Excluding long-term debt transferred to short-term liabilities pending repayment, • Strong property purchases increased borrowings by ¥21.1 Tosei paid down ¥35.4 billion in interest-bearing debt with funds from property billion. The net worth ratio decreased as a result. sales and took on ¥56.6 billion in new borrowings for additional purchases.

* Includes ¥48,630 million (¥17,675 million in the first half and ¥30,955 million in the second half) transferred from long-term debt to long-term debt and bonds due within one year.

(¥ million) Value of inventories as of Nov. 30, 2007 （Non-consolidated） 57,543 97,515 Assumed revenues Pegasus Capital, Ltd. 5,361 5,818

Total 62,905 Total 103,334

Breakdown of Inventory Balance

Inventory Assumed revenues Total By property Revitalization Development assumed type revenue No. of No. of Revitalization Development Amount properties Amount properties

Office buildings 34,679 45 10,281 7 52,092 21,907 74,000

Condominiums 7,571 17 9,553 14 9,354 18,960 28,314

Single-family - - - - dwellings 0 0 -

Others 819 8 - 0 1,019 - 1,019

Total 43,070 70 19,835 21 62,466 40,868 103,334

FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 Change 1. Net Decreases in Assets and (Consolidated) (Consolidated) Liabilities, Including: Decrease in assets due to sale of inventories, Net cash used in operating activities (10,857) (19,543) (8,686) etc. FY ended Nov. 2006: Income before income taxes ¥16,631 million 5,297 7,960 2,663 FY ended Nov. 2007: Depreciation ¥30,748 million 207 445 238 Increase in assets due to purchase of 1 1 inventories, etc. Net decrease in assets and liabilities (14,568) (24,429) (9,860) FY ended Nov. 2006: ¥30,089 million 2 Others (1,792) (3,519) (1,726) FY ended Nov. 2007: ¥53,612 million Net cash (used in) provided by investing activities 471 (2,066) (2,538) Payments for purchase of fixed assets (128) (188) (60) 2. Cash Flows from Operating Net increase in investments in securities 710 131 (579) Activities Others (110) (2,008)3 (1,898) Increase in deposits received: ¥1,248 million Net cash provided by financing activities 14,339 20,312 5,973 Payments of interest: (¥1,052) million Payments of income taxes: Net increase in debt 10,162 20,837 10,675 (¥3,195 million) Proceeds from stock issue 4,329 0 (4,329) Cash dividends paid (153) (525) (372) 3. Cash Flows from Investing Net increase (decrease) in cash and cash equivalents 3,954 (1,297) (5,251) Activities Increase in guarantee deposits: Cash and cash equivalents at beginning of the year 2,530 6,484 3,954 (¥1,000 million) Decrease in cash and cash equivalents of Acquisition of equity in newly acquired subsidiaries removed from consolidation 0 (5) (5) subsidiary: (¥500 million) Payment of loan receivables: Cash and cash equivalents at end of the year 6,484 5,181 (1,303) (¥650 million)

Small and medium-sized properties in the 23 wards of Tokyo are the Tosei Group’s core market.

By Area By Scale

Increasing revenues from property holdings over ¥1 Concentrating on the 23 wards of Tokyo billion, with a solid base of properties valued under ¥1 billion Revitalization and Development Business Revenues by Revitalization and Development Business Revenues by Area (through the FY ended Nov. 2007) Scale (through the FY ended Nov. 2007)

Tokyo 23 wards Other (¥ million) Under ¥1 billion ¥1-2 billion Over ¥2 billion 120.0% 35,000 27.10% 0.70% 2.2% 100.0% 30,000

80.0% 15,988 25,000 2 properties 2,202 60.0% 1 property 20,000 99.3% 100% 97.8% 40.0% 3,096 72.9% 15,000 1 property 3,694 8,864 10,852 20.0% 1.4 properties 6.6 properties 7.3 properties 10,000 2,308 4,791 0.0% 2 properties 4 properties 8,427 Nov. 30, 2004 Nov. 30, 2005 Nov. 30, 2006 Nov. 30, 2007 5,000 7,495 6,280 6,251 23 properties 20.7 properties 17 properties 16 properties 0 04/11 05/11 06/11 07/11

Note: To simplify counting of properties in these materials, condominium complexes and single family dwelling subdivisions for individuals/end-users are treated as single properties. For sales that extend over two accounting periods, the number of properties is divided between the two periods. Copyright © 2007 TOSEI CORPORATION, All Rights Reserved.. 21 Tosei’s View of the Operating Environment (1) – Changes Affecting the Real Estate Market

Growing importance of compliance in all fields due to regulatory tightening

Changes Affecting the Market Changes Affecting the Real Estate Industry

Solid corporate performance (especially for Credit contraction due to US subprime crisis companies in central Tokyo and large companies) Structural tightening due to implementation of Financial Instruments and Exchange Law Slowdown in growth of individual earnings Stagnant housing investment resulting from Rising land prices implementation of revised Building Standards Law Rising construction costs Change in lending stance for real estate Tendency for consumers to hold back from (borrower selection, etc.) purchasing condominiums because of rising sales prices Growing demand for superior housing stock because of implementation of the Basic Concerns about liquidity drying up as a Act for Housing (tax deductions for result of regulatory tightening (see right) earthquake-resistance work, reduced real estate taxes, etc.)

Industry disclosure of fire-resistance mislabeling and other scandals

The real estate market is growing overall and prices are on the rise, but disparities have emerged based on individual property characteristics such as area and use.

Real estate market until now Real estate market in the future

Growing market with Disparities emerge based on individual property favorable conditions characteristics such as area and use. regardless of property characteristics. z Increasing use of securitized real estate; market expansion continues z Growing recognition of real estate’s high liquidity, leads to z Increasing dominance of the 23 wards of Tokyo market expansion z Particularly strong performance by highly liquid z Rising property asset values medium-sized properties in a firm market for small and regardless of area or use medium-sized properties

z Abundant influx of funds, both z Continuing rise of large-scale properties’ profitability equity and debt and liquidity

z Cap rate remains low as z Difficult conditions for condominiums for sale to individual prices rise users will continue for some time

Weeding out of players due to regulatory tightening and stagnant real estate financing

Real estate industry until now Trend toward fewer exit options; expanding market for skilled companies

Industry prospers overall Impact on the z Weak, small companies will fade as a lack of funding from financial with few differences in revitalization institutions prevents them from purchasing properties and development z The fall in these companies’ buying power will decrease the number of companies’ management exit options, and companies that do not have inherent “value up” capabilities businesses capabilities and abundant exit strategies will be weeded out z Companies lacking the capabilities to procure funds will face tough competition due to increasing burdens caused by the longer time z Real estate industry results required for building certification generally strong due to z The “value up” market will expand as implementation of the Basic Act favorable perception of for Housing increases demand for superior housing stock market conditions

z Some companies pursue Increasing polarization in governance expansion over governance and compliance z Polarization will increase between companies that cope with the Impact on the Financial Instruments and Exchange Law and those that cannot z Even companies without fund business z Financial institutions will be stricter in classifying borrowers (selection “value up” capabilities can on a property by property basis) z Foreign investors will also become more selective, and management of profit from trading with funds that cannot attract a wide range of equity investors will become other players increasingly difficult

Increasing dominance of the 23 wards of Tokyo

Vacancy rate in the 23 wards continues to decrease Average rents in the 23 wards continue to rise drastically compared with other cities

Average Rent by City (¥/tsubo) Vacancy Rate by City (%)

Tokyo 23 wards Sendai Nagoya Osaka Fukuoka Tokyo 23 wards Sendai Nagoya Osaka Fukuoka 14,000 10.0

13,000 8.0 12,000 6.0 11,000 4.0 10,000

9,000 2.0

8,000 0.0 Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07 Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07

Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07 Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07 Tokyo 23 wards 12,680 12,770 12,810 12,980 13,370 Tokyo 23 wards 2.8 2.6 2.0 1.9 1.7 Sendai 9,070 9,120 9,130 9,150 9,260 Sendai 8.4 8.4 8.1 8.0 8.3 Nagoya 9,530 9,630 9,480 9,560 9,600 Nagoya 6.5 5.9 6.3 6.2 6.6 Osaka 8,830 8,750 8,680 8,750 8,820 Osaka 6.6 6.2 5.9 5.8 5.7 Fukuoka 9,450 9,500 9,420 9,390 9,430 Fukuoka 8.1 8.0 7.4 7.4 7.4

Source: Prepared by Tosei based on K.K. Ikoma Data Service System’s “Office Market Report” Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 25 Reference (2) 23 Wards of Tokyo – Office Building Market

In the office building market of the 23 wards of Tokyo, demand for small and medium- sized properties will be stable and the earning power of large-scale properties will continue to grow at a high rate.

Average new tenant lease rates for small and medium-sized properties will be stable; average new tenant lease rates for large-scale properties will continue to rise.

Average Rent by Property Scale in the 23 Wards of Tokyo (¥) Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07 3,000 tsubo and over 1,000-3,000 tsubo 3,000 tsubo and over 20,490 21,300 21,430 21,710 23,760 500-1,000 tsubo Under 500 tsubo 1,000-3,000 tsubo 15,630 15,440 16,040 16,470 17,030 500-1,000 tsubo 13,080 13,170 13,190 13,430 13,880 26,000 Less than 500 tsubo 11,970 12,030 12,130 12,250 12,490 24,000 22,000 Source: Prepared by Tosei based on K.K. Ikoma Data Service System’s “Office Market Report” 20,000 18,000 16,000 14,000 12,000 10,000 8,000 Sept. 06 Dec. 06 Mar. 07 June 07 Sept. 07

The market for small and medium-sized rental properties in the 23 wards of Tokyo is amply stocked and stable.

The market for small and medium-sized rental The largest tenant volumes are in small and medium- properties in the 23 wards is stable due to low polarity sized offices and middle-income earners in rents and limited supply

Tokyo 23 Wards: Offices by Number of Employees Tokyo 23 Wards: Rent Index by Building Scale (December 2001=100) 110.0 Over 30 employees

6.3% 105.0

100.0

95.0 Small and medium- sized offices, 1-29 90.0 employees: 93.7% Source: Ministry of Internal Affairs and Communications, 85.0

002 003 004 005 006 007 Bureau of Statistics, 2 2 2 2 2 2 ept ept ept ept ept ept “Establishment and Dec 2001Mar 2002June 2002S Dec 2002Mar 2003June 2003S Dec 2003Mar 2004June 2004S Dec 2004Mar 2005June 2005S Dec 2005Mar 2006June 2006S Dec 2006Mar 2007June 2007S Enterprise Census 2006” Large-scale buildings Medium-scale buildings Small buildings Source: Prepared by Tosei based on materials from Miki Shoji Co., Ltd. Tokyo 23 Wards: Households in Non-Wood Construction Rental Tokyo 23 Wards: Small and Medium-sized Office Building Construction Starts Housing by Annual Income （㎡）（％） 1,800,000 100.0% ㎡ Unknown 1,600,000 Construction starts on properties with less than 3,000 total floor space 90.0% Percentage of construction starts of less than 3,000㎡ total floor space 5.8% ¥10 million 1,400,000 80.0% 70.0% and over 6.4% 1,200,000 60.0% 1,000,000 50.0% Under ¥3 million 800,000 40.0% 34.4% 600,000 Middle-income Source: Ministry of Internal 30.0% 400,000 20.0% earners Affairs and Communications, ¥3 million- 200,000 10.0% Bureau of Statistics, 0 0.0% ¥10 million “Housing and Land Survey `90 `91 `92 `93 `94 `95 `96 `97 `98 `99 `00 `01 `02 `03 `04 `05 `06 53.3% 2005” Source: Prepared by Tosei based on Ministry of Land, Infrastructure and Transport, “Building Construction Started” Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 27 Reference (4) 23 Wards of Tokyo – Office Buildings Have High Potential

Large-scale developed properties with 100 or more tsubo per floor have substantial potential for higher rents.

A rare new building within the area, A large-scale office-based complex with over 170 tsubo per floor with retail shops, in the Ginza ◆Property Summary ◆ Property Summary Ueno Tosei Building Location: Higashi-Ueno 4-chome, Taito Ginza Wall Building Location: Ginza 6-chome, Chuo Ward Ward Land area: 1,819.62㎡（550.43 tsubo） Land area: 966.28㎡（292.30 tsubo） Floor space: 15,880.47㎡（4,803.84 tsubo） Floor space: 7,170.53㎡（739.70 tsubo） Construction: Steel-reinforced concrete, Construction: Steel frame, 10 floors above reinforced concrete (4 ground basement floors and 12 floors Environs: 3-minute walk to JR Ueno above ground) Station Environs: 3-minute walk to Tokyo Metro Use: Offices Ginza Station Completion: May 2007 Use: Offices, retail, apartment Completion: May 1989 ¾ Average area rents are approx. ¥16,000/tsubo (as of September 2005) ¾ Average area retail rents are approx. ¾ Concluding contracts at rents of ¥21,000- ¥40,000/tsubo (as of April 2007) 26,000/tsubo, which is approximately ¾ Recently raised retail rents from the 29.4% the initial estimate of ¥17,000 initial average of approx. ¥25,000/tsubo ¾ Main tenants are homebuilders and IT to ¥45,000/tsubo, an increase of 180% companies. The occupancy rate is 100% ¾ Main tenants include a music school, an (contract basis). amusement facility and offices. ¾ The occupancy rate is over 90% (as of April 2007)

Deploy Tosei’s advantages in developing a base for further growth.

1) Secure earnings by supplementing stable small and 3) Secure stable earnings sources by increasing fee income medium-sized properties with purchases of highly profitable from fund, rental and property management businesses large-scale properties

z Strategically expand funds through cooperation with major z Create a portfolio by focusing on procuring medium-sized companies and large-scale (¥20 billion and over) properties z While achieving steady profits from stable small and z Aim to register as an investment advisor to strengthen the medium-scale properties, secure high profits by expanding fund business large-scale property initiatives z Based on market trends, postpone J-REIT listing and concentrate on developing private equity funds z Expand market share by carefully selecting and handling properties that become available z Acquire stable revenues from the rental business 2) Manage portfolio built from a diverse development menu

z Maximize value through flexible management of a portfolio 4) Develop an internal framework as a superior company built from a diverse development menu including office buildings, income-producing condominiums, condominiums z Strengthen the compliance framework to ensure strict for sale to individual end-users and commercial facilities. conformance with laws including the Financial Instruments and Exchange Law and revised Building Standards Law z Expand scope of operations by developing commercial facilities near train stations in the 23 wards of Tokyo. z Strengthen the internal control system through the J-SOX Project. z Advance the Core System Project Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 29 Fiscal Year Ending November 2008 – Develop Tosei’s Business Base

Develop a solid foundation and aim for further growth as a winning company.

Real Estate Market Trends Real Estate Industry Trends

The Tokyo area market for small and medium-sized properties The weeding out of industry players will progress due to has been stable, but disparities among properties have increasingly strict internal controls resulting from such factors as emerged based on their characteristics implementation of the Financial Instruments and Exchange Law

Business opportunities will increase as Companies capable of dealing with all properties become available and the number property uses will grow of industry players decreases

Promote Development of the Business Base

・Steadily implement the plan for the current fiscal year (revenues of ¥56.8 billion, ordinary income of ¥12.0 billion) ・Create a stable earnings base and aim for further growth as a winning company

(¥ million, %)

FYFY endingending Nov.Nov. 20082008 FYFY endingending Nov.Nov. 20082008 他社に対する優位性を発揮し、新たな成長に向けた基盤を整備（（Non-consolidatedNon-consolidated））（（ConsolidatedConsolidated））

YoYYoY increaseincrease YoYYoY increaseincrease YoYYoY increaseincrease YoYYoY increaseincrease %% ofof Forecast (Amount) Forecast (Amount) Forecast (Amount) (%)(%) Forecast (Amount) (%)(%) revenuesrevenues RevenuesRevenues 46,61046,610 14,92014,920 47.147.1 56,87256,872 16,78716,787 41.941.9 100.0100.0 OperatingOperating incomeincome 13,11713,117 4,3694,369 50.050.0 13,84313,843 4,8374,837 53.753.7 24.324.3 OrdinaryOrdinary incomeincome 11,54611,546 3,7243,724 47.647.6 12,09012,090 4,1404,140 52.152.1 21.321.3 NetNet incomeincome 6,3506,350 2,1212,121 50.250.2 6,7336,733 2,1752,175 47.747.7 11.811.8

Revenues Ordinary income (¥ million) Operating income (¥ million) Forecast assumptions 60,000 56,872 16,000 2H 1H 13,843 14,000 50,000 ¾ Increased earning power due to expansion initiatives Operating income 17,802 for medium-sized and large-scale properties Ordinary income40,085 12,000 40,000 12,090 9,006 10,000 ¾ Growth will be driven by large increases in the 24,74１ 30,000 5,323 8,000 17,8807,949 revitalization business, as well as other businesses 5,900 6,996 6,000 including fund and alternative investment 20,000 5,323 39,070 4,000 10,000 22,205 ¾ A higher proportion of revenues and income will be 17,744 2,000

recorded in the first half due to earnings generated by 0 0 FY ended FY ended FY ending large-scale properties Nov. 30,2006 Nov. 30,2007 Nov. 30,2008 (Forecast) Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 32 Initiatives for the Fiscal Year Ending Nov. 2008 (1)

Increasing earning power by expanding initiatives in both small and medium-to-large-scale properties

Revitalization business

¾ Ginza Wall Building • Move off the balance sheet and incorporate in fund assets under Group management ¾ Initiatives to secure commercial buildings near train stations in the 23 wards of Tokyo • Expand the Group’s scope of operations by proactively securing well-located commercial buildings near train stations

¾ Expanding initiatives in both small and medium-to-large-scale properties • Increase earning power by expanding initiatives in large- scale properties including the Ginza Wall Building and the Ueno Tosei Building ¾ The revitalization business had inventories totaling Top: Ginza Wall Building approximately ¥43.0 billion as of November 30, 2007 and held Middle left: MS Center Building 70 properties, equivalent to revenues of approximately ¥62.4 Middle right: Ichida Building billion Bottom left: Shimosanakayama Commercial Building

Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 33 Initiatives for the Fiscal Year Ending Nov. 2008 (2) Moving forward with a variety of projects, including income-producing condominiums and condominiums for sale to individual end-users, centered on office buildings

Development business (1)

¾ Initiatives by property type Developments (from lower left) ・Kandagawamachi Building Project The development business had inventories ・Nishi-ikebukuro Building Project totaling approximately ¥19.8 billion as of ・THE Palms Gakugeidaigaku-mae November 30, 2007 and held 21 properties, ・THE Palms Shinkoiwa equivalent to revenues of approximately ・THE Palms Ota Chuo ¥40.8 billion Kanda Tosei Building (Completed in May 2007; fully occupied)

Making progress on commercial building projects near train stations in the 23 wards of Tokyo

Development business (2)

¾ Initiatives by property type Developments (from lower left) The Tosei Group is making progress on multiple Developments (from lower left) ・Kichijoji Commercial Building Project (see p. 62) commercial building projects centered on train ・Kokuritsufukugo Building Project stations in popular areas around the 23 wards of Tokyo. ・Daizawa 5-chome Commercial Building Project ・Tokiwadai Commercial Building Project The Group has concluded a tenant contract with major apparel maker Eddie Bauer for the Kichijoji Commercial Building, scheduled for completion in February.

国立

The start of a project that generates synergy between the development and fund businesses

¾ The Purchase The former owner sold by bid a recently built and highly profitable office 2. Tosei purchases using an building and a run-down warehouse on-balance-sheet transaction as a single property. Tosei subdivided the site to create the requisite floor An office building will be area ratio for an income-producing developed on the site formerly building, and: occupied by a warehouse. 1. Proposed that Tosei purchase the portion for the income-producing Subdivision building via an asset management fund; and ◆Property Overview 2. Proposed that Tosei purchase the run- Location: Ota-ku, Heiwajima 4-Chome down warehouse through an on- Land area: 4,649.48m2 balance sheet transaction for the （1,406.46 tsubo） development of an office building. Zoning: Industrial / Heiwajima Area Plan Designation Collaboration between Tosei’s 1. Tosei purchases via an asset Access: 10-minute walk from development and fund businesses management fund (off- Heiwajima Station balance-sheet purchase) on Keihin Kyuko enabled a purchase on better terms main line than other companies can achieve.

Tosei is now planning for an outstanding environment by integrating an adjacent income-producing property owned by a fund.

¾ A Building Plan Friendly to People and Nature

▼ Site Plan • We will integrate two sites to create open public space. • Greenery will connect with the adjacent Heiwa no Mori Park.

Environment & Energy Conservation ▲ • Double roof and rooftop greenery reduce heat loading from the expansive roof. • Rooftop greenery helps eliminate the heat island effect.

Building Plan ▲ • A wide, glass curtain wall provides views of and reflects the sky and greenery. • Terraces in the space between offices provide access to fresh air.

Expand stable revenue sources, both on and off the balance sheet, to further enhance stability of operations.

Rental business

Main properties reclassified from current assets to fixed assets ¾ The properties were reclassified for stable income while considering the balance between current assets and fixed assets.

¾ The rental business held 67 properties as of November 30, 2007 (44 current asset properties and 23 fixed asset properties). (see p. 11)

Note: Total number of properties held as of November 30, 2006 was 57 (36 current asset properties and 21 fixed asset properties) .

From left: ・Toranomon Tosei Building ・Takaido Tosei Studio

Aiming for 177.5 percent asset balance growth through increased cooperation with Mitsubishi Corporation and the Development Bank of Japan

Fund Business

Balance of Fund Assets Under Management (¥ million) ¾ Increase overall fund balance by increasing individual fund assets and structuring new 180,000 166,151 funds 160,000 • As of November 30, 2007, the asset balance of Tosei’s funds had grown to over ¥93.6 billion (see 140,000 p. 12) • The Group will expand the business through 120,000 funds that specialize in centrally located income- 100,000 93,691 producing properties by cooperating with Mitsubishi Corporation and the Development 80,000 Bank of Japan. The asset balance of such funds as of December 31, 2007 was approximately ¥21.0 60,000 billion. 41,251 40,000 (¥ billion) 20,000 Nov. 30, 2006 Nov. 30, 2007 Nov. 30, 2008

0 Initial plan 41.3 85.0 130.0 Nov. 30, 2006 Nov. 30, 2007 Nov. 30, 2008 Actual/Target 41.2 93.6 166.1 (Target) 41.2 93.6 166.1 (Target)

Enhance fund business Æ Property management Diversify Æ Alternative investment

Property Management Business

Tosei Community Co., Ltd. ¾ Implement reform to establish new management system, as per the Medium-term Management Plan Basic policies: “Increase customer satisfaction by improving quality of service” “Establish new framework to handle a large volume of supply” Properties under management as of November 30, 2007: 438 (Office, etc.: 300; Residential: 138)

Alternative Investment Business

Tosei Revival Investment Co., Ltd. ¾ Diversify range of projects undertaken M&As: Broaden range of projects considered outside the field of real estate business (regional projects, turnaround, unlisted companies, etc.) NPL Funds: Diversify property types (hotels, warehouses, etc.)

Growth driven by the revitalization business due to expansion of medium-to-large-scale property initiatives; firm results in the fund business as the asset balance grows

Revenues Operating income

Revitalization business Revitalization business Development business Development business Rental business Rental business Fund business Fund business (¥ million) Property management business (¥ million) Property management business Alternative investment business Alternative investment business 18,000 70,000 16,677-2,834=16,677-2,834=13,84313,843 57,277-405=57,277-405=56,87256,872 16,000 60,000 14,000 50,000 12,000 40,669-584=40,669-584=40,08540,085 10,588-1,582=10,588-1,582=9,0069,006 40,000 10,000 13,224 41,181 30,000 8,000 24,310 7,286 6,000 20,000 4,000 8,781 6,925 823 500 10,000 3,187 1,594 3,415 1,211 2,000 1,630 1,147 2,778 814 2,755 129 586 186 0 260 1,994 0 131 357 FY ended FY ending FY ended FY ending Nov. 30, 2007 Nov. 30, 2008 (Forecast) Nov. 30, 2007 Nov. 30, 2008 (Forecast) Note: In totals shown calculated as (1) – (2) = (3), (1) is the total including internal transactions; (2) is revenues or operating income from internal transactions and (3) is the total net of internal transactions.

(¥ million, %)

FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 FY ending Nov. 30, 2008 (Forecast) Y oY change

(Consolidated) % of revenues (Consolidated) % of revenues (Consolidated) % of revenues Amount %

Revenues 24,741 100.0 40,085 100.0 56,872 100.0 16,787 41.9 Revitalization business 15,650 63.3 24,310 60.6 41,181 72.4 16,871 69.4 Development business 3,842 15.5 8,781 21.9 6,925 12.2 (1,856) (21.1) Rental business 1,838 7.4 3,415 8.5 3,187 5.6 (228) (6.7) Fund business 1,419 5.7 1,147 2.9 1,211 2.1 64 5.6 Property management business 1,904 7.7 2,755 6.9 2,778 4.9 22 0.8 Alternative investment business 335 1.4 260 0.6 1,994 3.5 1,734 665.9 Internal transactions (250) - (584) - (405) - 178 -

Operating income 5,900 23.9 9,006 22.5 13,843 24.3 4,837 53.7 Revitalization business 4,040 25.8 7,286 30.0 13,224 32.1 5,937 81.5 Development business 513 13.4 823 9.4 500 7.2 (323) (39.2) Rental business 985 53.6 1,630 47.7 1,594 50.0 (36) (2.2) Fund business 1,117 78.7 586 51.1 814 67.3 228 38.9 Property management business 122 6.4 129 4.7 186 6.7 57 44.1 Alternative investment business 277 82.7 131 50.7 357 17.9 225 170.9 Corporate and eliminations (1,155) - (1,582) - (2,834) - (1,251) -

Ordinary income 5,323 21.5 7,949 19.9 12,090 21.3 4,140 52.1 Net income 2,737 11.1 4,557 11.4 6,733 11.8 2,175 47.7

Fundamental Shareholder Returns Policy

¾Providing stable dividends is the most important management task ¾Tosei targets a consolidated payout ratio of 20% for the FY ending November 2008 as a Group management indicator (a non-consolidated payout ratio of 20% has been used up to the FY ended November 2007) ¾The Company’s policy is to consider ways to enhance the liquidity of trading in its stock with an eye on stock market trends.

Year-end dividend forecast for the fiscal year ended Nov. 2008 Cash dividends Payout ratio Dividend per share (¥) Payout ratio (%) 4,000 3,500 35 3,500 2,200 30 FY ended FYFY ended ended 3,000 FY ended FY ended FY ended FY ended Nov. 08 25 FY ended FY ended FY ended Nov. 07 Nov. 08 1,400 19.6 19.6 Nov. 04 Nov. 05 Nov. 06 Nov. 07 (Forecast(Forecast as as 2,500 Nov. 04 Nov. 05 Nov. 06 (Planned) of Jan. 11) 20 (Planned) of Jan. 11) 2,000 19.2 1,500 15 Dividend per 10.3 1,000 10 share (¥) 120.00120.00 450.00450.00 1,400.001,400.00 2,200.002,200.00 3,500.003,500.00 4.2 450 500 120 5 4.2 0 0 PayoutPayout ratioratio 4.2 10.310.3 19.219.2 19.619.6 19.619.6 (non- (non- (non- (non- (consolidated) ) (%)(%) (non- (non- (non- (non- (consolidated) d consolidatedconsolidated)) consolidated)consolidated) consolidated)consolidated) consolidated)consolidated) Nov. 04 Nov. 05 Nov. 06 lanne orecast) P F

Nov. 07 (Nov. 08 ( Note: the dividend for the FY ended Nov. 2004 has been retroactively adjusted to reflect a stock split Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 43 IV. Progress of the Medium-term Management Plan

Results have far exceeded initial plan targets; planning to formulate next medium-term plan during the current fiscal year

Growing Up 2008 (Medium-term management plan, Dec. 2005 - Nov. 2008) Projecting 140% Revenues target Achieved targets ahead Achieved initial targets for FY ending Nov. 2008 in (¥ billion) achievement of schedule FY ended Nov. 2007 60 568 Target 50 Actual 40 Projected results more Expect to achieve over 200 percent of the initial 405 30 than double the target operating income target for FY ending Nov. 2008 20 10

FY Ending 0 FY Ended FY Ended Nov. 2008 FY Ended FY Ended FY Ended FY Ending (¥ billion) Nov. 2005 Nov. 2006 (Projected) Nov. 2005 Nov. 2006 Nov. 2007 Nov. 2008 Initial plan Revenues 17.6 28.4 40.5 Ordinary income Projecting Ordinary (¥ billion) 202% 2.9 4.0 6.0 （億円）¥ billion income 12 120 target Target achievement 10 Actual 8 FY Ending 60 FY Ended FY Ended FY Ended Nov. 2008 6 (¥ billion) Nov. 2005 Nov. 2006 Nov. 2007 (Projected) 4 Actual/ 2 Projected Revenues 17.6 24.7 40.0 56.8 0 Ordinary FY Ended FY Ended FY Ended FY Ending 2.9 5.3 7.9 12.0 Nov. 2005 Nov. 2006 Nov. 2007 Nov. 2008 income Note: Figures for FY ending Nov. 2008 are projections. Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 45 Progress of the Medium-term Management Plan (2)

Results have far exceeded initial plan targets; planning to formulate next medium-term plan during the current fiscal year

Variance with Initial Plan Announced January 2006 (¥ million, %)

FY ended Nov. 05 FY ended Nov. 06 FY ended Nov. 07 FY ending Nov. 08 (Projected) Initial plan 28,484 - 40,500 Revenues 17,644 Actual/Projected 24,741 40,085 56,872 Initial plan 4,042 - 6,000 Ordinary income 2,969 Actual/Projected 5,323 7,949 12,090 Initial plan - - 30.0％ Net worth ratio 20.5% Actual/Projected 25.3% 22.1% 25.2％ Initial plan - - 18.3％ ROE 19.2% Actual/Projected 23.3% 26.4% 30.4％ Initial plan - - 5.5％ ROA 3.9% Actual/Projected 5.4% 6.2% 7.2％ Initial plan 41,300 85,000 130,000 Fund asset balance* 20,244 Actual/Projected 41,251 93,691 166,151 Initial plan 139 157 170 Number of employees 107 Actual/Projected 134 194 250 *Note: Excludes consolidated subsidiary Pegasus Capital Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 46 Progress of the Medium-term Management Plan (3)

Corporate Brand-building Initiatives

¾ Conduct in-house R&D and training to spread the corporate philosophy (Established October 2006) ¾ Reinforce the corporate governance organization and internal control system ・Upgrade risk management framework and manuals Corporate philosophy Compliance guidebook ・Develop a framework and system to ingrain awareness of guide The Tosei Way compliance issues ・Develop a framework for timely disclosure and enhance checking capabilities ¾ Enhance efforts to proactively use media to secure and train personnel ・Conduct initiatives to strengthen hiring of new employees while aiming to increase the satisfaction and skills of existing employees ・Spread awareness of the corporate brand through promotional activities ¾ Promotional activities targeting Tokyo businesspeople ・Proactively use newspapers, magazine ads, billboards, etc. ・Gain publicity through appearances on “Cambrian Palace” and other television shows Print ad Omote-sando billboard ¾ Rooftop greening initiative ・Rooftop greening has steadily progressed since June 2006 and has now been completed for 35 buildings ・This initiative has been widely covered by mass media organizations including television stations Rooftop greening at the Takanawa Tosei Building Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 47 [Reference Materials] I. Introduction to Tosei 1. Tosei Group Overview

NameName TOSEITOSEI CORPORATIONCORPORATION AddressAddress 4-2-34-2-3 Toranomon,Toranomon, Minato-ku,Minato-ku, TokyoTokyo DateDate establishedestablished FebruaryFebruary 2,2, 19501950 CapitalCapital ¥4,148,020,000¥4,148,020,000 RepresentativeRepresentative SeiichiroSeiichiro Yamaguchi,Yamaguchi, PresidentPresident andand CEOCEO FiscalFiscal year-endyear-end NovemberNovember 3030

StockStock listinglisting TSE,TSE, SecondSecond SectionSection (delisted(delisted fromfrom JASDAQJASDAQ onon JanuaryJanuary 1,1, 2008)2008) TotalTotal outstandingoutstanding sharesshares 376,840 376,840 NumberNumber ofof shareholdersshareholders 6,871 6,871 ShareholderShareholder compositioncomposition ・・Individuals/othersIndividuals/others 54.79%54.79% (206,488(206,488 shares)shares) ShareShare statusstatus ・・FinancialFinancial institutions institutions 13.95% 13.95% (52,577(52,577 sharesshares)) ・・SecuritiesSecurities companies companies 0.72%0.72% (2,699(2,699 shares shares)) ・・ForeignForeign companies companies 13.49%13.49% (50,831(50,831 sharesshares)) ・・OtherOther companies companies 17.04%17.04% (64,200(64,200 sharesshares))

EmployeesEmployees 132132 (Non-consolidated)(Non-consolidated) 194194 (Consolidated)(Consolidated) Tosei Revival Investment Co., Ltd. MainMain Tosei Revival Investment Co., Ltd. ToseiTosei CommunityCommunity Co.,Co., Ltd.Ltd. affiliatedaffiliated Tosei REIT Advisors, Inc. companies Tosei REIT Advisors, Inc. companies ToseiTosei AssetAsset ManagementManagement Corp.Corp. As of Nov. 30, 2007 Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 49 Reference History Materials

ChangedChanged company company namename to to Tosei Tosei CorporationCorporation

MovedMoved head head office office Revenues toto Toranomon Toranomon (¥ million) Listed on Tokyo Listed on Tokyo TAM4 established 19501950 Established Established Yukari Yukari Kogyo Kogyo Co., Co., Ltd. Ltd. StockStock Exchange, Exchange, TAM4 established 60,000 SecondSecond Section Section 19831983 Company Company name name changed changed to to Tosei Tosei Building Building Co., Co., Ltd. Ltd. 1 56,000 TRI 1established 1994 Seiichiro Yamaguchi appointed as President 2 TRI established 1994 Seiichiro Yamaguchi appointed as President TC becomes2 consolidated 52,000 TC becomessubsidiary consolidated TRAsubsidiary3 established 48,000 TRA3 established ImplementationImplementation 44,000 ofof real real estate estate BeganBegan developing developing Began real estate M&AsM&As officeoffice buildings buildings and and 40,000 Began real estate using LBOs commercial facilities 36,000 revitalizationrevitalization using LBOs commercial facilities businessbusiness Acquired Real Estate 32,000 Acquired Real Estate Listed on InvestmentInvestment Advisor Advisor Listed on Changed Japanese Changed Japanese BeganBegan developing developing LicenseLicense JASDAQJASDAQ 28,000 company name to company name to singlesingle family family 24,000 Tosei Fudosan EstablishedEstablished Tosei Fudosan dwellingsdwellings 20,000 privateprivate equity equity fundfund 16,000 BeganBegan developing developing 12,000 condominiumscondominiums 8,000 4,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Notes: 1. TRI: Tosei Revival Investment Co., Ltd. (Projected) 2. TC：Tosei Community Co., Ltd. 3. TRA：Tosei REIT Advisors, Inc. 4. TAM: Tosei Asset Management Corp. Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 50 Reference Tosei Group Advantages (1) Capabilities over a Broad Range of Business Areas Materials

With uniform capabilities over a broader range of business areas, Tosei has solid advantages over other companies in the real estate industry. “Only One” Business Model

Businesses Real Real Property Estate Real Estate Development Estate Real Estate Funds Management Revitalization Rental Alternative Investment Company Single Office and Adminis- Increase Condo- Manage Structure Manage tration and type Family Commercial Value miniums Holdings Funds Assets Property Dwellings Facilities Management Tosei ○ ○ ○ ○ ○ ○ ○ ○ ○ Developers ○ ○ ○ Real estate traders △ Principal Investors, Real Estate Funds ○ △ ○ ○ △ Real Estate Funds △ △ ○ ○ ○ Rental/Other △ ○ △ ○

High proportion of negotiated transactions (89.9%*) through original purchasing routes Advantages from business offerings, speedy decision-making and results that other companies can’t provide

What gives Tosei’s original purchasing routes the edge? Relationships of trust with key players in the industry

Business offerings Speed of decision-making Relationships built on trust: Strength in small and Tosei Information Network medium-scale properties Track record of fulfilling 300 companies, Ability to handle all promises 700 players types of properties

¾ Small and medium-sized properties are difficult to bid on for various reasons, including cost effectiveness and the large number that are owned by small businesses or individuals. ¾ Faced with competition, brokers of small and medium-sized properties bring information to those who will make a quick decision and follow through with purchase.

*FY ended November 30, 2007 (including additions to assets in the fund business) Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 52 [Reference Materials] I．Introduction to Tosei 2．Examples of Tosei Group Properties

Revitalization business

Ueno Tosei Building RooftopRooftop GreeningGreening

¾ A large-scale property with 170 ◆Property Overview tsubo/floor, rare in this area ¾ Has high-level utilities and floor Location: Higashi-Ueno 4-chome, Taito ¾ Has high-level utilities and floor plans for this area. Glass and Ward plans for this area. Glass and aluminum construction give the Land area: 966.28㎡（292.30 tsubo） aluminum construction give the exterior a stylish appearance. Floor space: 7,170.53㎡（739.70 tsubo） exterior a stylish appearance. ¾ Average area rents are approx. Construction: Steel frame, 10 floors above ¾ Average area rents are approx. ¥16,000/tsubo (as of September 2005). ground ¥16,000/tsubo (as of September 2005). ¾ Concluding contracts at rents of Environs: 3-minute walk to JR Ueno Contracted rents by ¥21,000 26,000/tsubo, which is Station floor (¥/tsubo) approximately 29.4% more than the Use: Offices approximately 29.4% more than the initial estimate of ¥17,000 Completed: May 2007 1F 26,000 initial estimate of ¥17,000 ¾ Main tenants are homebuilders and 2-3F 22,000 IT companies. The occupancy rate is 4-7F 21,000 100% (contract basis). 8-9F 21,000 ¾ Cap rate at acquisition: 7.75%

Revitalization business

Hatsudai Building RooftopRooftop Greening ¾ Repaired areas that had Greening deteriorated ¾ Expanded small classrooms on the second and third floors to two ◆Property Overview the second and third floors to two rooms each Location: Honmachi 1-chome, Shibuya Ward ¾ Met specifications for offices on Land area: 967.95m2 (292.80 tsubo) Floor space: 1,605.05m2 (485.52 tsubo) the second to fourth floors by Construction: Steel frame, flat roof, 4 floors installing mini-kitchens on Environs: 1-minute walk to Keio Hatusdai second to fourth floors Station ¾ Replaced fountain in vaulted Use: (Before value-up): Vocational school courtyard with sculpture (After value-up): Offices ¾ Greened roof terrace Completed: March 2002 Before Value-Up After

Shibakoen Building Value-Up

◆Property Overview 4F/5F 5F Officeoffice Owner’s residences house Location: Shibakoen 3-chome, Minato Ward ¾ Separated the fourth and 4F Officeoffice Land area: 205.93m2 (62.29 tsubo) 2 fifth floors, which the Floor space: 848.77m (256.75 tsubo) 3F Officeoffice Construction: Steel-reinforced concrete, flat roof, 3F Office previous owner used as a 2 basement floors and 4 floors residence, and converted 2F Office 2F Officeoffice above ground them to office specifications Environs: 1-minute walk to Tokyo Metro Kamiyacho Station 1F Shop ¾ Brought the building 1F Shopshop Use: (Before value-up): Offices and entrance up to legal residences B1F Bar specifications B1F Barbar (After value-up): Offices ¾ Repaired deteriorated Completed: January 2004 B2F Bar ¾ Repaired deteriorated B2F Barbar Before areas of exterior walls After

Revitalization business

Nishi Ayase Condominium ¾ Increased revenues by converting the 140m2 fourth floor, which the former owner had occupied, into three easily leased residences (1LDK and 2LDK) ¾ Improved security with key upgrades for each unit ¾ Dismantled the rebar processing facility on the first floor and used the 6m ceiling height to convert the area into Before a warehouse Value-Up ◆Property Overview

Location: Nishi Ayase 1-chome, Adachi Ward Land area: 875.98m2 （about 264.98 tsubo） Floor space: 1,423.73m2 （about 430.67 tsubo） Construction: Reinforced concrete, steel frame, 5 floors above ground Environs: 2-minute walk to JR Kosuge Station; 9 minutes walk to JR /Tokyo Metro Ayase Station

Use: (Before value-up) Residences and rebar processing facility (After value-up) Residences and warehouse After Completed: June 1990

Revitalization business

Hongo 2-chome Building

① ① ① ①

Value-Up ② ② ② ② Before After ◆Property Overview ¾ Plumbing relocated to expand area available for Location: Hongo 2-chome, Bunkyo Ward office space Land area: 119.00m2 (about 35.99 tsubo) Floor space: 618.53m2 （about 187.10 tsubo） ¾ Removed partition walls to create two apertures Construction: Reinforced concrete, steel-reinforced that allow greater freedom of use and enhance overhanging balconies, 1 basement and 6 floors above ground natural light Environs: 6-minute walk to Tokyo Metro Hongo ¾ Remedied illegal slab apertures Sanchome Station; 9-minute walk to JR Suidobashi Station ¾ Large amount of existing fixtures removed Use: (Before value-up): Offices ¾ Rooftop warehouse and unnecessary structures (After value-up): Offices Completed: October 18, 1983 removed

Revitalization business

Hyakunincho Building RooftopRooftop Greening Greening ¾ Research center that occupied B1 to ◆Property Overview second floor converted to offices ¾ Residences on third floor converted Location: Hyakunincho 1-chome, to small office, home office format Shinjuku Ward ¾ New interior stairways installed Land area: 324.20m2 (about 98.07 tsubo) between second and third floors Floor space: 1,849.71m2 （about 559.54 tsubo） ¾ Dry area cleaned up and design Construction: Reinforced concrete, 2 basement improved levels and 6 floors above ground ¾ Renewal of exterior walls and Environs: 6-minute walk to JR Shinokubo surfaces Station Use: (Before value-up): Research center (After value-up): Offices Completed: April 1, 1987 Before Value-Up After

FujisawachoYowaBuilding ¾ Former owner's residence ◆Property Overview converted to offices to enhance revenues Location: Fujisawacho, Chuo Ward ¾ Corrected 10 illegalities Land area: 275.96m2 (about 83.47 tsubo) such as FAR coverage Floor space: 1,567.46m2 （about 474.15 tsubo） Construction: Steel reinforced concrete, and indication of fire 9 floors above ground extinguishers. Trust Environs: 4-minute walk to Tokyo Metro beneficiary rights can Ningyocho Station now be sold. Use: (Before value-up): Offices and residences (After value-up): Offices Completed: March 1986 Before Value-Up After

Revitalization business

Ochiai Building RooftopRooftop GreeningGreening ¾ Increased rentable area by removing reception counter on the ◆ Property Overview first floor and changing office Location: Kami Ochiai 2-chome, Shinjuku specifications Ward ¾ Converted research areas on B1F Land area: 439.00m2 (about 132.79 tsubo) through fourth floor to offices Floor space: 1,390.92m2 （about 420.75 tsubo） ¾ Eliminated the irregularly shaped Construction: Reinforced concrete, 1 basement reception area on fourth floor to floor and 4 floors above ground create more regular rentable space Environs: 1-minute walk to Tokyo Metro ¾ Added greenery to the roof and roof Ochiai Station terrace Use: (Before value-up): Offices (After value- up): Offices Before Value-Up After Completed: May 8, 1991

Bunkyo Sekiguchi Building ¾ Eliminated existing illegal structures ◆Property Overview on the site ¾ Renewed office interiors and Location: Sekiguchi 1-chome, Bunkyo ward improved amenities Land area: 315.82m2 (about 95.53 tsubo) ¾ Dealt with FAR coverage, created a Floor space: 750.23m2 （about 226.94 tsubo） dry area and brought fire Construction: Steel frame, 1 basement floor and 7 floors extinguishing facilities up to code above ground ¾ Built an approach for the first floor Environs: 9-minute walk toTokyo Metro Waseda Station; entrance and obtained a permit for 11-minute walk to Tokyo Metro Edogawabashi expansion Station Use: (Before value-up): Offices (After value-up): Offices Completed: December 1, 1991 After

Development business

Rooftop THE Palms Honkomagome Rooftop GreeningGreening ◆ Property Overview ◆Property Features Location : Honkomagome 5-chome, Bunkyo Ward Land area : 792.02m2 (about 239.58 tsubo) ¾ An open site on the corner of three Floor space : 2,798.01m2 (about 846.39 tsubo) roads Construction : Reinforced concrete, 6 floors above ¾ A total of 35 units featuring 20 layout ground variations Environs : 8 minutes walk to Tokyo Metro Komagome ¾ Units on the first and top floors Station ; 9 minutes walk to Tokyo Metro feature 3m ceiling height Honkomagome Station ¾ Two elevators, and an atmosphere of Use: 35-unit residential condominium Completed: April 2007 independence and privacy

Rooftop THE Palms Setagaya Sakura Rooftop GreeningGreening ◆Property Overview ◆ Property Features Location: Sakura 1-chome, Setagaya Ward ¾ Planted greenery on roof and along Land area: 3,697.44m2 (about 1,118.47 tsubo) roadways to conserve energy and Floor space: 9,879.09m2 (about 2,988.42 tsubo) Construction: Reinforced concrete maintain ecosystem ¾ Installed storehouse for emergency Environs: 5 minutes walk to Tokyu Setagaya Line toilets, food and drinking water, etc. Kamimachi Station Use: 108-unit residential condominium Completed : February 2007

Development business

Rooftop THE Palms Akabane Rooftop GreeningGreening ◆ Property Overview ◆Property Features Location: Akabane 5-chome, Kita Ward Land area: 327.74m2 (about 99.14 tsubo) ¾ Rapid access to the city center via five Floor space: 1,921.20m2 (about 581.16 tsubo) train lines Construction: Steel-reinforced concrete, 14 floors ¾ Full range of shopping facilities in the above ground area Environs: 4 minutes walk to JR Akabane Station; ¾ All floor plans feature natural light 4 minutes walk to Tokyo Metro from two sides, and options to put Akabaneiwabuchi Station windows in bathrooms, kitchens, etc. Use: 44-unit residential condominium Completed: March 2007

Rooftop THE Palms Akihabara Rooftop GreeningGreening ◆ Property Overview ◆Property Features Location: Kandasakumagashi, Chiyoda Ward Land area: 167.22m2 (about 50.58 tsubo) ¾ In the Akihabara area, which has Floor space: 1,093.25m2 (about 330.71 tsubo) access to five train lines Construction: Reinforced concrete, 14 floors above ¾ 23 south-facing units, all with riverside ground balconies Environs: 6-minute walk to JR Akihabara Station; ¾ A full lineup of floor plans and high- 3-minute walk to Tokyo Metro Akihabara quality utilities and specifications Station Use: 23-unit residential condominium Completed: May 2007

Development business

Rooftop THE Palms Nihonbashi Yokoyamacho Rooftop GreeningGreening ◆Property Overview ◆Property Features Location: Nihonbashi Yokoyamacho, Chuo Ward Land area: 858.35m2 (259.65 tsubo) ¾ Access to four stations on four lines, Floor space: 7,867.28m2 （about 2,379.85 tsubo） including a 1-minute walk to Bakuro Construction: Reinforced concrete, 1 basement floor and Yokoyama Station on the Toei 12 floors above ground Shinjuku Line Environs: 1-minute walk to Toei Shinjuku Line Bakuro Yokoyama Station ; Stations on three other ¾ Primarily 1LDK units targeting the lines “ double income, no kids” segment Use: 121-unit residential condominium and 3 stores ¾ Lobby space in the entrance hall Completion: January 2008 (planned) enables small office, home office use

Rooftop Kichijoji Station-Front Project Rooftop GreeningGreening ◆Property Features ◆Property Overview Location: Kichijoji Minamimachi 1-chome, ¾ Kichijoji consistently ranks at the top of the list Musashino City of desirable places to live among all age groups Land area: 400.61m2 (about 121.18 tsubo) ¾ Inokashira Park is nearby, and young people 2 （） Floor space: 665.99m about 201.46 tsubo visit the area on weekends and holidays Construction: Steel frame, partial reinforced concrete, 1 basement floor and 3 floors above ¾ A stylish exterior with an aluminum curtain ground wall Environs: 3-minute walk to JR Kichijoji Station ¾ Box-shaped commercial area Use: 5-unit residential condominium and stores Completion: February 2008 (planned)

Development business

Rooftop THE Palms Shinkoiwa Rooftop GreeningGreening ◆ Property Overview ◆Property Features Location: Shinkoiwa 3-chome, Katsushika Ward ¾ Easy access to the city center with a Land area: 645.19m2 (about 195.16 tsubo) 5-minute walk to the Sobu Line Shinkoiwa Floor space: 3,071.61m2 (about 929.16 tsubo) Station featuring rapid train service Construction: Reinforced concrete, 14 floors Station featuring rapid train service ¾ All units are 1-room and compact for single above ground ¾ All units are 1-room and compact for single occupancy, and can be used as company Environs: 5-minute walk to JR Shinkoiwa Station occupancy, and can be used as company housing Use: 104-unit residential condominium and 1 store housing ¾ The first-floor store has 200m2 floor space, Completed: March 2008 ¾ The first-floor store has 200m floor space, suitable for large tenants

Fund business

Fujimi East-West

◆Property Overview ◆Property Features Location: Fujimi 2-chome, Chiyoda ward ¾ Fund asset managed by the Tosei Group. Land area: East: 2,090.00m2 (about 632.23 tsubo) Composed of the West building, designed for West: 1,250.05m2 (about 378.14 tsubo) offices, and the East building, containing offices Floor space: East: 5,533.81m2 (about 1,673.98 tsubo) and residential areas West: 2,999.35m2 (about 907.30 tsubo) ¾ Favorably located a 10-minute walk away from the Construction: Reinforced concrete, 1 basement floor JR Chuo and Sobu lines Iidabashi Station and six and 7 floors above ground subway lines Environs: 5-minute walk to JR Iidabashi Station ¾ High-quality lighted public space featuring Use: Offices, residential condominiums abundant greenery and a quiet residential Completed: September 2006 neighborhood

(¥ million, %)

FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 YoY change Revenues (Consolidated） % of revenues (Consolidated） % of revenues Amount %

Total 24,741 100.0 40,085 100.0 15,343 62.0 Revitalization business 15,650 63.3 24,310 60.6 8,659 55.3 Development business 3,842 15.5 8,781 21.9 4,939 128.5 Rental business 1,838 7.4 3,415 8.5 1,576 85.7 Fund business 1,419 5.7 1,147 2.9 (272) (19.2) Property management business 1,904 7.7 2,755 6.9 850 44.7 Alternative investment business 335 1.4 260 0.6 (75) (22.4) Internal transactions (250) - (584) - (334) -

FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 YoY change Cost of revenues (Consolidated） % of revenues (Consolidated） % of revenues Amount %

Total 16,584 67.0 27,968 69.8 11,384 68.6 Revitalization business 11,426 73.0 16,829 69.2 5,402 47.3 Development business 3,095 80.6 7,691 87.6 4,595 148.5 Rental business 811 44.1 1,646 48.2 835 103.0 Fund business 2 0.2 24 2.1 21 892.9 Property management business 1,470 77.2 2,220 80.6 750 51.0 Alternative investment business 6 2.0 48 18.6 41 605.9 Internal transactions (229) - (492) - (263) -

(¥ million, %)

FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 YoY change Gross profit (Consolidated） % of revenues (Consolidated） % of revenues Amount %

Total 8,157 33.0 12,117 30.2 3,959 48.5 Revitalization business 4,223 27.0 7,480 30.8 3,257 77.1 Development business 747 19.4 1,090 12.4 343 45.9 Rental business 1,027 55.9 1,768 51.8 741 72.1 Fund business 1,417 99.8 1,122 97.9 (294) (20.8)

Property management business 434 22.8 534 19.4 100 23.1

Alternative investment business 328 98.0 211 81.4 (116) (35.6) Internal transactions (21) - (91) - (70) -

FY ended Nov. 30, 2006 FY ended Nov. 30, 2007 YoY change Operating income (Consolidated） % of revenues (Consolidated） % of revenues Amount %

Total 5,900 23.9 9,006 22.5 3,105 52.6 Revitalization business 4,040 25.8 7,286 30.0 3,245 80.3 Development business 513 13.4 823 9.4 310 60.4 Rental business 985 53.6 1,630 47.7 645 65.5 Fund business 1,117 78.7 586 51.1 (530) (47.5)

Property management business 122 6.4 129 4.7 7 6.3

Alternative investment business 277 82.7 131 50.7 (145) (52.5)

Corporate and eliminations (1,155) - (1,582) - (426) -

¾ 5-Year Summary of Main Performance Indicators

Non-consolidated Consolidated FY ended FY ended FY ended FY ended FY ended FY ended FY ended FY ended Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, 2003 2004 2005 2006 2007 2005 2006 2007 Operating income ratio 12.8% 14.4% 19.8% 24.9% 27.6% 20.0% 23.9% 22.5%

Ordinary income ratio 9.2% 10.4% 16.5% 22.8% 24.7% 16.8% 21.5% 19.9%

Return on revenues 4.7% 5.5% 8.9% 12.0% 13.3% 9.0% 11.1% 11.4%

Return on equity (ROE) 24.4% 18.2% 20.1% 23.2% 25.0% 19.2% 23.3% 26.4%

Return on total assets (ROA) 2.3% 3.3% 4.4% 6.0% 6.6% 3.9% 5.4% 6.2%

Net worth ratio 10.7% 22.6% 21.4% 29.5% 24.1% 20.5% 25.3% 22.1%

Revenues per employee (¥ million) 242 330 247 278 240 165 181 206

Net ordinary income per employee (¥ million) 22 34 41 63 59 28 39 40

Earnings per share (EPS) (¥) 2,149.41 2,833.01 4,378.97 7,306.24 11,222.02 4,664.46 7,412.80 12,095.04 Book value per share (BPS) (¥) 9,943.36 19,829.73 23,739.56 40,055.23 49,855.74 24,018.05 40,414.50 51,089.15

Issued number of shares at year end 20,580 335,800 344,858 376,838 376,840 344,858 376,838 376,840

Number of properties held by area as of November 30, 2007

¾ Properties handled are concentrated in the 23 wards of Tokyo As of November 30, 2007, properties held or purchased by the Group totaled 114. Of these, 98 (approx. 86 percent) were in the 23 wards of Tokyo.

Ward Revitalization Development Ward Revitalization Development Rental Total Rental Total business business business business business business Adachi 1 1 1 3 Setagaya 3 1 1 5 Arakawa 1 0 0 1 Taito 3 0 1 4 Itabashi 2 1 0 3 Chuo 5 1 2 8 Edogawa 3 0 0 3 Chiyoda 6 3 3 12 Ota 2 2 0 4 Toshima 2 1 2 5 Katsushika 0 1 0 1 Nakano 3 0 0 3 Kita 0 2 2 4 Nerima 2 0 0 2 Koto 2 2 0 4 Bunkyo 5 0 0 5 Shinagawa 2 0 1 3 Minato 5 1 2 8 Shibuya 3 0 2 5 Meguro 1 1 0 2 Shinjuku 5 1 1 7 23 wards 59 19 20 98 Suginami 0 0 1 1 Suburban Tokyo 3 2 2 7 Sumida 3 1 1 5 Other prefectures 8 0 1 9 Total 70 21 23 114

Notes: 1) Note: To simplify counting of properties in these materials, condominium complexes and single family dwelling subdivisions for individuals/end-users are treated as single properties. 2) “Other prefectures” means Kanagawa and Chiba.

By Scale

Revenues ¾ In the year ended November 30, 2007, revenues for small (¥ million) Under ¥1 billion ¥1-2 billion Over ¥2 billion 35,000 and medium-sized properties under ¥1 billion were stable and revenues from large-scale properties over ¥2 billion 30,000 15,988 grew substantially. The Group plans to continue increasing 25,000 2 properties revenues from large-scale properties in the year ending 20,000 2,202 1 properties November 30, 2008 and beyond. 15,000 3,694 8,864 3,096 10,852 1.4 properties 6.6 properties 1 property 7.3 properties 10,000 2,308 4,791 2 properties 4 properties Note: To simplify counting of properties in these materials, 5,000 7,495 8,427 6,280 6,251 condominium complexes and single family dwelling subdivisions for 20.7 properties 17 properties 23 properties 16 properties 0 individuals/end-users are treated as single properties. For sales that FY ended FY ended FY ended FY ended extend over two accounting periods, the number of properties is divided Nov. 2004 Nov. 2005 Nov. 2006 Nov. 2007 between the two periods.

FY ended Nov. 2004 FY ended Nov. 2005 FY ended Nov. 2006 FY ended Nov. 2007 Inventory as of Nov. 07 Revenues No. of Revenues No. of Revenues No. of Revenues No. of (No. of (¥ million) properties (¥ million) properties (¥ million) properties (¥ million) properties properties)

Over ¥2 billion 3,096 1.0 3,694 1.4 2,202 1.0 15,988 2.0 8.0

¥1-2 billion 2,308 2.0 4,791 4.0 8,864 6.6 10,852 7.3 16.0

Under ¥1 billion 7,495 20.7 6,280 17.0 8,427 23.0 6,251 16.0 66.0

Total 12,899 23.7 14,765 22.4 19,493 30.6 33,091 25.3 90.0

By Purchaser ¾ Sales to corporations and individuals account for approx. 53.8% and 19.2% of total properties sold, respectively. ¾ By property type, condominiums accounted for the most sales at 53.8% of sales because of the sale of condominiums in three complexes.

¾ No. of Properties and Percentage by Purchaser ¾ No. of Properties and Percentage by Property Type 11.5% 19.2% 26.9% 26.9%

53.8% 7.7%

57.1%53.8% Office/commercial buildings Vacant buildings Individuals* Corporations Condominiums & single family dwellings Investors, funds & real estate companies Other

No. of No. of Purchaser Percentage Property type Percentage properties properties Individuals* 5 35.7% Office/commercial buildings 7 26.9% Corporations 14 53.8% Vacant buildings 2 7.7% Investors, funds & real estate 7 26.9% companies Condominiums & single family dwellings 14 53.8% Total 26 100.0% Other 3 11.5% Total 26 100.0% * Condominium complexes and single family dwelling subdivisions for individual sale to end-users are counted as single properties. Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 70 Reference Responding to Other Factors Affecting Operating Results Materials

Factors of Particular Concern

¾ Impact of changes in the real estate market

The time frame of projects in the revitalization and development businesses is from 6 months to 2 years. JChanges in the real estate market midway during a project have the potential to affect operating results.

¾ High degree of dependence on interest-bearing debt and interest rate trends

Ratio of interest-bearing debt to total assets (Currently 68.7%) JCost of procuring capital will increase if interest rates rise.

¾ Changes in accounting standards

Changes in interpretation of consolidation of real estate funds could change the scope of consolidation.

Double the scale of business by maximizing the use of Tosei’s capabilities in making exit decisions, a Company strength.

Increase property purchases to expand existing business Offer high-value-added and distinctive products.

z Accelerated activities in the area of negotiated transactions, z Secure adequate profit amid rising purchasing costs by where competitors are few. supplying products tailored to needs. Ratio of negotiated transactions to total transactions: Employ new organizational structure to accurately On balance sheet: 86.0% determine optimal use and investment efficiency for each Off balance sheet: 96.5% property. z Tosei’s ability to decide on a suitable exit with added value Enhance understanding of needs by establishing new value- at the time of property purchase is a value driver because it up laboratories and permanent model rooms for holding reliably generates earnings from acquisitions. seminars and workshops. z Further strengthen the purchasing information network to link exit -decision-making capabilities with business expansion. Stabilize capital procurement Expand scope of VIP Map System application. z Increased number of financial institutions used to 26 as of Nov. 30, 2007 Broaden and deepen information routes (Tosei Information z Use syndicated loans and advance commitment-line contracts in order to Network; 300 companies, 700 players). fund large-scale projects z To avoid risk from interest-rate fluctuations, considering shifting to fixed rates by securing compensatory loans of ¥9.0 billion per property as well Accelerate increase of fund asset balance as the purchase of cap products. During 2007, the short-term prime rate increased 0.5 percent and z Aware that Japan’s fund market has more capacity for TIBOR increased 0.3 points. As a result, the Company’s average interest growth than U.S. and European markets, Tosei will rate on borrowings increased 0.4 points from 1.8 percent to 2.2 percent. Borrowings by interest rate type as of Nov. 2007: accelerate the increase of private equity fund assets. Variable rates Target real estate fund asset balance for Nov. 30, 2008: Short-term prime rate: 55 percent ¥166.1 billion TIBOR-based rates: 40 percent Fixed rates: 5 percent

Tosei’s aim is to establish a corporate brand that offers a combination of “innovation and challenge” and “security and reliability.”

Enhance corporate governance. Expand and train workforce. z Instill awareness and steadily audit status of compliance. zCurrent当社の成長・発展の原動力は人財であり、組織 progress Continue conducting compliance workshops z Target拡大のための人財拡充と一人ひとりの育成のさ workforce size for the fiscal year ending Nov. 30, Establish a compliance auditing system 2008: Increased from 170 to 250 z Strengthen risk management by reinforcing the activities of らなる強化を図る (Employees) Initial Targets (Employees) New Targets the Risk Management Committee. 200・人事制度の改善と福利厚生制度の充実化250 157 170 250 Improve framework to achieve unified management of 150 139 200 194 ・新卒採用の拡大Business Business divisions divisions risk information 107 150 134 100 Administrative 107 ・階層別研修の拡充 Administrative divisions 100 Prepare and distribute a “Risk Management Manual” divisions 50 Affiliated 50 Affiliated Establish “Rules for Responding to Earthquakes and companies companies Other Disasters” 0 0 05 06 07 08 05 06 07 08 z Practice timely disclosure. Strengthen IR activities Initiatives taken toward achieving target for the fiscal year ending Nov. 30, 2008 z Enhanced aggressive use of media linked to brand strategy z Doubled hiring through staffing agencies, etc. → doubled Inculcate the new corporate philosophy. number of referrals z Strengthened graduate recruitment: Increased hiring z Quickly inculcate the new corporate philosophy established frequency from once every two years to once a year in October 2006 and work to incorporate it in business activities. z Enhanced hierarchical education system by defining Recommend and promote a variety of internal research future personnel needs activities z Identified issues of concern by conducting an employee Encourage participation in outside workshops survey and studied measures to resolve them Promote corporate brand strategy z Introduced a self-development system for employees Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 74 [ Reference Materials ] IV. Supplementary Materials on Real Estate Market Conditions

Broadly Defined, a ¥32.7 Trillion Market

Assets (¥ billion) Real Estate Securitization 9,000 10-Year Cumulative Total Approx. ¥32.7 Trillion 8,000 Refinanced/LiquidatedNon-J-REIT – refinance (Included and resale in Other) 7,810.8 OtherNon-J-REIT 6,930.1 7,000 J-REITJ-REIT 1,920 1,170 6,000 Cumulative 9-year total of 5335.0 ¥25 trillion 5,000 1,110 3,983.7 4,000 420 3,990.0 3,860.0 2,777.7 3,000 2,540.9 3,330.0 1,867.0 2,000 2,890.0 2,170.0 1,167.0 2,240.0 1,000 1,770 2,030 61.6 315.5 610 680 900 0 300 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: Ministry of Land, Infrastructure and Transport 2006 Survey of Real Estate Securitization (Annual survey of real estate securitization) To obtain an understanding of the overall volume of real estate securitization, a broad definition has been used. Figures include assets financed by debt and other instruments in addition to the issuance of stock.

Real estate assets securitized during fiscal 2006 increased 13 percent, or approximately ¥7.8 trillion, compared with the previous fiscal year. The cumulative total of real estate assets securitized as of the end of fiscal 2006 was ¥32.7 trillion.

Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 76 Reference Size of the Real Estate Fund Business Market Materials At ¥12.8 Trillion Including Private Equity Funds and J-REITs, and Continuing to Expand

Size of the Private Equity Fund and J-REIT Markets (¥ (¥billion) billion) 8,000 Private equity funds 7,000 ¥6.7 trillion J-REITs ¥6.1 trillion ¥6.1 trillion 6,000 ¥5.4 trillion 5,000 ¥4.4 trillion 4,000 ¥3.4 trillion 3,000 ¥2.2 trillion ¥2.1 trillion 2,000 1,000 0 Dec. 2004 Dec. 2005 Dec. 2006 Dec. 2007

The balance of real estate fund holdings as of June 2007 was ¥6.1 trillion in J-REITs and ¥6.7 trillion in private equity funds. With the addition of Japanese real estate assets held by overseas private equity funds (not included in above), the amount held by private equity funds is about ¥10.2 trillion, for a total of ¥16.3 trillion. Source: Private sector survey organization

Untapped ¥100 Trillion Market, Significant Growth Potential

Japan’s total real estate assets2: ¥2,300 trillion

Corporate holdings of Size of securitized ＋Public sector assets buildings and land in income-producing J-REITs ・ About ¥3 trillion (?) 1 2 Japan : ¥490 trillion real estate market : ¥6.1trillion (Ministry of Finance report: ¥70-100 trillion Unused public land ¥2.1 trillion; （as of Jan. 2003） government buildings and Land: ¥406 trillion Private equity funds4 residences ¥1 trillion) Buildings: ¥84 trillion ¥10.2 trillion ・ ¥400-500 billion (Housing for government workers) Securitized real estate market3 ¥32.7 trillion ＋ Japan Post and local government assets

Notes: 1. Source: Ministry of Land, Infrastructure and Transport basic land survey 2. Source: Ministry of Land, Infrastructure and Transport basic land survey and private sector survey organization 3. Cumulative total of securitized real estate assets: Fiscal 2006 Ministry of Land, Infrastructure and Transport survey of real estate securitization 4. Balance as of June 30, 2007 Source: The Association for Real Estate Securitization According to a government white paper on land, income-producing properties accounted for ¥70 trillion of the ¥500 trillion in assets held by corporations, and a private sector survey organization estimates that the size of the untapped market for revenue-producing real estate is ¥100 trillion. Given this, with ¥32.7 trillion cumulative securitization to date, the market has the potential to double or triple in size. In addition, purchases of public sector assets are also planned. Source: Prepared by Tosei based on materials from private sector survey organization Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 78 Reference Securitization Ratio Materials

Lower in Japan than in Other Countries

U.S.U.S. Real Real Estate Assets Assets (Decemb (December er 3 1 , 231, 0 0 2004 4 ） U） S$US$30.2 3 0 .2 tr illio trillion n ( ap p r(approx. o x . ￥3 ,6 ￥ 0 03,600 tr illio ntrillion) ) Corporate sector Source: Prepared by private sector survey Government

organization based on “Flow of Funds 19% 19% Accounts of the United States” (a statistical Over 68 percent of release of the Federal Reserve) the US$5.6 trillion in corporate sector real estate holdings are Against US$5.6 trillion in corporate sector securitized. real estate assets (as of Dec. 31, 2004), securitized investments totaled US$3.8 trillion in June 2005. Moreover, it is Residential holdings of estimated that over 50 percent of corporate sector real estate has been commoditized as private individuals financial instruments. 62%

The ratio of securitized real estate to total real estate assets in Japan is said to be low compared with rates in the United States, Australia and other countries leading securitization. In the United States, of a total of US$5.6 trillion (about ¥668 trillion) in corporate sector real estate holdings, an estimated US$3.8 trillion (¥452 trillion), or about 68 percent, is securitized. Japan (see previous page) has a total of ¥32.7 trillion in securitized assets, which is only 7 percent of total real estate assets of ¥490 trillion.

Tokyo Is an Appealing Market Compared with Cities in Other Developed Countries.

YieldYield spreads Spread on of real Real esta Estatete Assetsassets in in Major major Cities cities Tokyo 5% London 4% Paris 3% Frankfurt

2% New York

-1%

-2%

-3% 2000 2001 2002 2003 2004 2005 2006 2007 (June)

Yield Spread: Tokyo London Paris Frankfurt New York Earnings rate on investment Dec. 2006 2.11% -1.00％ 0.32％ 1.07％ -1.10％ minus long-term interest rate June 2007 1.56% -2.71％ -1.27％ -0.57％ -1.12％

With continuing increases in interest rates and rental market rates, yield spreads are already negative in London (-2.71 percent) and New York (-1.12 percent). Tokyo, which maintained a yield spread of 1.56 percent as of the end on June 2007, remains an appealing market compared with cities in other developed countries. Source: Jones Lang LaSalle Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 80 Reference Japan’s Real Estate Investment Ratio Materials

Rising Investment by Japanese Corporate Pension Funds, Regular Institutional Investors

Traditional Investment Alternative Investment

Japanese bonds Japanese stocks Hedge funds Real estate

Foreign bonds Foreign stocks Private equity

Changes in Institutional Investor Asset Allocation Sources: Corporate Pension Funds Regular Institutional Investors Corporate pension funds: Mail questionnaire* sent to 609 employee 2004 2005 2006 2007 2004 2005 2006 2007 pension funds, defined-benefit pension Japanese stocks 29.0% 28.2% 29.8% 29.3% 10.5% funds and approved pension schemes 11.6% 13.2% 15.5% Foreign stocks 17.7% 17.4% 18.8% 19.4% 5.8% Regular institutional investors: Japanese bonds 28.7% 22.6% 23.7% 23.6% 59.4% 42.9% 47.6% 38.7% Mail questionnaire* sent to 189 life and Foreign bonds 10.7% 10.4% 11.4% 10.6% 9.2% non-life insurance companies, city banks Real estate and associated financial institutions, trust 0.5% 1.4% 1.2% 2.4% 2.5% 2.6% 6.1% 9.8% banks and regional banks Alternative 6.3% 8.4% 5.7% 7.1% 1.3% 2.3% 3.9% 2.4% Other 7.2% 11.6% 9.5% 7.6% 11.3% 40.6% 29.2% 33.6% * Response rate was 23.6% Investment in real estate by Japanese pension funds and institutional investors is steadily taking hold. Prolonged low interest rates, sluggish share prices and globalization of the economy have raised the importance of diversifying investment, thereby focusing more attention on real estate. The ratio of investment in real estate increased from 1.2 percent in 2006 to 2.4 percent among corporate pension funds and from 6.1 percent to 9.8 percent among regular institutional investors. However, the ratio remains low compared to the 4.4 percent invested by 200 major corporate pension funds in the United States in 2006 (Source: Pensions & Investments, Sept. 2004). The potential for growth* therefore remains. *For example, multiplying ¥80 trillion by the U.S. investment rate of 4.4% yields ¥3.5 trillion.

Source: Goldman Sachs Research Department, based on a questionnaire survey by the Association for Real Estate Securitization Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 81 Reference Real Estate Loan Balance among Domestic Banks Materials

The Rate of Real Estate Lending Is Unchanged.

(Reference) Real Estate Loan Balance Total Loans Real Estate Loans 1980 ¥173 trillion ¥11 trillion （6.6%） Real estate loan balance Total loan balance 1997 ¥514 trillion ¥65 trillion （12.7%） (¥ trillion) （％） Real estate loans as a percentage of total loans 2003 ¥410 trillion ¥48 trillion （11.8%) 600 16.0% 2006 ¥407 trillion ¥54 trillion （13.2%） 14.0% 500 2007 ¥405 trillion ¥54 trillion （13.3%） 12.0% 400 10.0%

300 8.0%

6.0% 200 4.0% 100 2.0%

0 0.0% 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

While the real estate loan balance among domestic banks has decreased since peaking at ¥65 trillion in 1997, amid flaccid demand for capital among companies, it bottomed out at ¥48 trillion in 2003 and recovered to ¥54 trillion in 2006, where it remained in 2007 (13% of total loans). In December 2006 the Financial Services Agency formulated policies for the supervision of major banks and other institutions, which included guidelines for non-recourse loans to real estate funds in particular that require due attention to appropriately managing the risk of sector concentration. As a result, since 2006 both the real estate loan balance and real estate loans as a percentage of total loans have been unchanged.

Source: Compiled from a Bank of Japan report on loans by borrower.

High Level of Supply in Greater Tokyo

投資用マンション発売戸数の年次別推移表(1988年～2007年6月）戸数Units 件数（件） (Units)戸数（戸） Annual Unit Sales of Investment Condominiums (1988 to June 2007) Properties件数 (Properties) 10,000 220 212 199 8,983 8,616 8,548 200 8,939 8,387 183 188 190 180 8,000 172 150 7,238 152 160 142 6,213 6,232 140 6,000 120 5,130 117 120 105 108 4,861 4,591 4,621 82 100 4,000 81 3,758 3,394 69 3,423 80

2,357 60 46 45 38 2,000 1,874 1,678 1,490 40 16 16 647 553 20

0 0 ) ) 7 e 0 1 5 6 0 4 5 6 e 0 n 9 9 92 9 9 0 01 0 0 06 0 6 n 06 u 9 9 9 9 0 0 0 0 0 u 2 J 1988 1989 19 1 1 1993 1994 1 1 1997 1998 1999 2 2 2002 2003 20 2 2 2～ J ～ .- 6.1 .- .1 n n Ja 00 Ja 007 ( 2 ( 2

Against a backdrop of record-low interest rates, the trend toward urban living and purchases by funds to obtain rental income, the supply of investment condominium units continuously increased in Greater Tokyo until 2003. In 2006, supply was at a high level of 8,548 units in 190 properties. Despite a two-year consecutive decrease in newly marketed units following the record 8,983 units in 188 buildings in 2003 caused by rising land prices and the difficulty of finding land for properties in the 23 wards, the property supply in the first six months of 2007 increased compared with the first six months of 2006.

Intense Competition Continued in Greater Tokyo in 2007

Condo units sold in Greater Tokyo Closing rates for condo units in Greater Tokyo Condominium supply in Greater Tokyo (Units) (％) in 2007 is forecast to fall below 65,000 12,000 100.0 units for the first time in 14 years. This is a substantial 12 percent decrease 10,000 80.0 from 2006 and the second consecutive year of declines exceeding 10,000 units. 8,000 60.0 The closing rate has been under 70 6,000 percent for three consecutive months, indicating weak performance. 40.0 4,000 (As of October 2007)

20.0 2,000

0 0.0 05/4 05/7 05/10 06/1 06/4 06/7 06/10 07/1 07/4 07/7 07/10

2007 (Forecast) Consumers’ perception that 2000 2001 2002 2003 2004 2005 2006 2007(forecast) condominium prices are too high Tokyo 23 wards 35,318 31,843 31,574 36,340 39,147 31,025 23,650 16,507 may be behind the severity of (YoY change) (%) -9.8 -0.8 15.1 7.7 -20.7 -23.8 -30.2 condominium market in Greater Tokyo suburbs 10,274 9,638 10,913 10,548 8,321 8,962 7,004 7,731 Tokyo. Against a backdrop of rising YoY change) (%) -6.2 13.2 -3.3 -21.1 7.7 -21.8 10. Kanagawa Pref. 26,501 25,782 24,357 20,880 21,981 23,799 20,456 16,2754 land prices and construction costs, this severity is expected to continue. YoY change) (%) -2.7 -5.5 -14.3 5.3 8.3 -14.0 -20.4 Saitama Pref. 11,149 8,913 10,339 8,820 7,827 10,246 10,532 8,947 (YoY change) (%) -20.1 16.0 -14.7 -11.3 30.9 2.8 -15.0 Chiba Pref. 12,393 13,080 11,333 6,595 8,153 10,116 12,821 10,871 YoY change) (%) 5.5 -13.4 -41.8 23.6 24.1 26.7 -15.2 Source : Real Estate Economic Institute Co., Ltd. Total 95,635 89,256 88,516 83,183 85,429 84,148 74,463 60,331 YoY change) (%) -6.7 -0.8 -6.0 2.7 -1.5 -11.5 -19.0 (As of December 20, 2007) Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 84 Reference National Office and Apartment Rent Index Survey Materials

Office Rent Index for September 2007 Up 6.5 Percent Year-on-Year Expected to be Up 4.7 Percent Year-on-Year in September 2008

September2007年9月全国賃料統計 2007 National Office and Apartment Rent Index Survey Office Rent Index Apartment Rent Index オフィス賃料指数共同住宅賃料指数オフィス賃料指数及び共同住宅賃料指数の動向【全国】 YoY change YoY change Historical Trends of Office and Apartment Rent Indices (All Japan) 前年比前年比 (2005年を100とする指数) 全国 6.5% 0.5% 2005=100 地 130 方北海道地方 2.3% 0.2% By別 All Japan 6.5% 0.5% region東北地方Hokkaido 0.5%2.3% 0.2%1.4% 120 関東地方Tohoku 11.1%0.5% 1.4%0.2% 北陸地方Kanto -0.9%11.1% 0.2%-0.1% 110 中部・東海地方Hokuriku 1.2%-0.9% -0.1%1.0% 近畿地方Chubu, Tokai 5.8%1.2% 1.0%1.1% 中国地方Kinki 1.5%5.8% 1.1%-0.1% 100 四国地方Chugoku -0.6%1.5% -0.1%-0.8% 九州地方 -0.3% 0.6% Shikoku -0.6% -0.8% 沖縄地方 3.7% 0.5% 90 Kyushu -0.3% 0.6% 都市東京圏Okinawa 11.5%3.7% 0.5%0.2% 1995 2000 2002 2003 2004 2005 2006 2007 Greater Tokyo 11.5% 0.2% Urban圏オフィス賃料指数Office Rent Index center大阪圏Metro Osaka 6.3%6.3% 1.2%1.2% 名古屋圏Metro Nagoya 2.4%2.4% 1.9%1.9% 共同住宅賃料指数Apartment Rent Index 三大都市圏以外Other urban centers 0.3%0.3% 0.2%0.2% Highestオフィス上位15地点の賃料変動率（2007年9月末時点の前年比） YoY Rate of Change in Office Rents: Top 15 Locations 1 東京都千代田区・大手町 19.1% 1 Otemachi, Chiyoda Ward, Tokyo 19.1% According to the “National Office and Apartment Rent Index” survey prepared by 2 東京都新宿区･西新宿 18.8% 2 Nishi-Shinjuku, Shinjuku Ward, Tokyo 18.8% the Japan Real Estate Institute every September, 33 東京都渋谷区Shibuya Ward, Tokyo 14.7%14.7% 44 東京都中央区・日本橋Nihonbashi, Chuo Ward, Tokyo 14.0%14.0% ・The national office rent index for September 2007 was up 6.5% from the 55 東京都千代田区・神田Kanda, Chiyoda Ward, Tokyo 12.7%12.7% previous September. 66 東京都新宿区･新宿３Shinjuku 3-chome, Shinjuku Ward, Tokyo 12.4%12.4% 77 東京都港区・南青山Minami-Aoyama, Minato Ward, Tokyo 12.0%12.0% The index rise for metropolitan areas was driven by an 11.5% increase in 88 名古屋市中村区Nakamura Ward, Nagoya 11.7%11.7% Greater Tokyo. 99 横浜市西区Nishi Ward, Yokohama 11.7%11.7% ・The national apartment rent index was down 0.5% year-on-year. 1010 東京都品川区Shinagawa Ward, Tokyo 11.5%11.5% 1111 東京都中央区・日本橋室町Nihonbashi Muromachi, Chuo Ward, Tokyo 9.9%9.9% ・Outlook for September 2008: 1212 東京都・豊島区Toshima Ward, Tokyo 8.3%8.3% Office rent index: +4.7% 1313 東京都港区・虎ノ門Toranomon, Minato Ward, Tokyo 7.6%7.6% 1414 大阪市北区Kita Ward, Osaka 7.5%7.5% Apartment rent index: +0.3% 1515 大阪市中央区Chuo Ward, Osaka 7.3%7.3% Source: The Japan Real Estate Institute Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 85 Reference Impact of the Revised Building Standards Law Materials

Notably Longer Waiting Period for Building Certification

Building Certification and Inspection Flow Number of Building Certifications and Conformance Evaluations* and Main Reasons for Delays to Approval

Building Certification Applications Successful Applications Check of Application Documents is Cumbersome Conformance Evaluation Applications Conformance Evaluation Approvals Application Building Inspector or （Building Certification Applications） (Conformance Evaluations) Building 建築確認件数の推移＜交付件数＞ Designated Examining 70,000 2,000 Owner Building Institution 1,728 Certification 1,800 Examination Based 60,00070,000 5万3218件 on Established 60,000 （対前年同月期 1,600 ▲11.1%） Guidelines 50,00050,000 1,400 3万8231件 Schedule for Conformance 40,000 1,200 Shortage of 40,000 （同▲4.0%） Evaluation of Structural 30,000 Professionals 830 873 1,000 for Peer Check Design Calculations (Set by 20,000 30,000 1万4987件 800 Governor) 10,000 (同▲25.2%） 20,000 600 0 390 Ministerial Authorization Program 合計 208 400 Not Completed 10,000 4月 5月 6月 7月 8月 9月 1～3号建築物 10月 200 66 524号建築物 1 0 1 0 0 *Note: Conformance evaluation of specified structural design calculations April May June July August September October Source: Ministry of Land, Infrastructure and Transport

Major reasons for delays in obtaining building certification under the Building Standards Law (revised June 2007) include 1) a shortage of professionals for the initially planned peer checks (3,000 expected, but only 1,500 at present), and 2) the Ministerial Authorization Program, initially scheduled for early implementation, has not yet been implemented. The number of conformance evaluation applications and approvals has been remarkably small due to the substantial impact of the Revised Building Standards Law, which is affecting the results of those in the industry. Recognizing the worsening in small and medium-sized companies’ business results, on October 9, 2007 the Ministry of Economy, Trade and Industry introduced countermeasures including “safety net” loans and measures to ease debt repayment.

(¥ billion) Real Estate Transaction Trends (No. of Transactions) 50,0005,000 1,600

45,000 Sales (Full Year) 4,355.743,557 4500 4,155.841,558 1,400 Sales (1st Half, Excluding J-REITs) 1,341 40,0004,000 Sales (No. of Transactions) (Full Year) 1,200 Sales (No. of Transactions) (1H, Excluding J-REITs) 1,157 35,0003,500 1,000 30,0003,000 2,627.926,279 2,480.2 2,408.224,082 859 24,802 2,351.7 25,0002,500 846 23,517 800 2,032.520,325 2,112.221,122 20,000 648 2,000 594 1,558.015,580 600 524 1,293.812,938 538 15,0001,500 429 407 400 10,0001,000 200 5,000500

0 0 2000 2001 2002 2003 2004 2005 2006 2007

2000 2001 2002 2003 2004 2005 2006 2005 (1H) 2006 (1H) 2007 (1H) Sales (¥ billion) 2,480.2 2,032.5 2,112.2 2,408.2 2,627.9 4,155.8 4,355.7 1,558.0 1,293.8 2,351.7 No. of transactions 594 524 648 846 859 1,157 1,341 407 429 538 Average price (¥ billion) 4.18 3.88 3.26 2.85 3.06 3.59 3.25 3.83 3.02 4.37 Source: Urban Research Institute, Corp. The number of transactions in the first half of 2007 decreased 12.4 percent year-on-year to 538 from 614, but in monetary terms sales increased 20.2 percent to ¥2,351.7 billion from ¥1,965.2 billion. The main reason for the decrease in transactions in 2007 could be the lack of J-REIT listings that year. Excluding acquisitions by J-REITs on listing, the number of transactions in the first half increased 25.4 percent year-on- year and sales increased over 80 percent on a monetary basis. The substantial monetary increase was likely due to the concentration of high-value property transactions. Copyright © 2007 TOSEI CORPORATION, All Rights Reserved. 87 Reference Global REIT Market －9 Major Countries’ Market Caps－ Materials

Market Caps

(¥ trillion)（億円） 60

55 U.S.A米国 50 REIT markets in major countries are 45 steadily expanding. 40

35 In particular, REIT markets in late

30 starters France (2003) and Britain (2008)

25 have far exceeded Japan’s market cap.

20 (¥ trillion) 14 2004 2005 2006 2007 Australia豪州 13 U.S.A 24 30 44.7 49.6 12 U.S.A. 11 Australia Australia 4 6.5 8.8 12.8 U.K. 10 U.K. 8 France 9 U.K.英国 Japan France 2.0 2.5 4.3 8 8 Franceﾌﾗﾝｽ Netherlands Canada Japan 1.3 1.9 3.4 6.3 7 Japan日本 Singapore Netherlands 1.4 1.7 2.4 3.2 Hong Kong 6 60 Canada 1.1 1.5 2.4 3 5 4 Singapore 0.18 0.5 0.9 2 3 Hong Kong 0.63 1 2 Note: Of the 17 countries with REITS, only the 9 with stock 1 market capitalization over ¥1 trillion are listed here.

Source: ARES Real Estate Securitization Handbook 2004-2007

Corporate Planning Department TEL：03-3435-2864 FAX：03-3435-2866 URL : http://www.toseicorp.co.jp

DISCLAIMER Except for historical facts, all plans, forecasts, strategies and other information contained herein are forward-looking statements. Forward-looking statements include but are not limited to descriptions of future events and performance containing words such as or similar to “believe,” “expect,” “plan,” “strategy,” “anticipate,” “forecast,” and “estimate,” and are based on judgments derived from the information available to the Company at the time of publication. Various factors could cause results to differ materially from any projections presented herein. The Company reserves the right to maintain or change its projections regardless of any new information, conditions or changes in performance. These materials are for informational purposes only, and should not be construed as a recommendation to invest in the Company.