1 table of potential risks 2 briefing on major risks

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1. Table of Potential Risks 2. Briefing on Major Risks 3. Measures for Risk Management 1. Table of Potential Risks General risks concerning: 1) Legal, tax and other systems involving investment corporations 2) Transactions of investment units on the market 3) Price fluctuations of investment units and corporate bonds 4) Dilution of per-unit value through additional issuance of investment units 5) Distribution of monies Risks related to product design and related parties concerning: 1) Characteristics of investment units 2) Fluctuations of revenues, expenses and cash flows 3) LTV (loan-to-value) ratio 4) Borrowings and corporate bonds 5) Bankruptcy of the investment corporation 6) Possible cancellation of PIC's registration 7) Dependence on related parties external to PIC
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8) Job performance by directors 9) Insider trading regulations 10) The asset manager 11) Property managers 12) Conflicts of interest among corporations involved in PIC's operations Risks particular to trust beneficiary interests concerning: 1) Risks inherent to trust beneficiaries 2) Liquidity of trust beneficiary interests 3) Trustees 4) Co-ownership or other forms of ownership of trust beneficiary interests Risks particular to preferred securities of Special Purpose Company's concerning: 1) Risks inherent to investors in preferred securities 2) Liquidity of preferred securities 3) Other parties investing in preferred securities Risks related to real estate concerning: 1) Liquidity, transaction costs and forward commitment of real estate 2) Competition over property acquisitions 3) Defects and failures of real estate 4) Complexity of rights involving real estate and discrepancy between real estate registration and titles 5) Co-owned properties 6) Compartmentalized properties 7) Properties on leased lands 8) Properties under development 9) Appraisal value and appraisal on property status 10) Decrease in rental revenues 11) Master leases 12) Real estate lease agreements in Japan 13) Forms of use of buildings by tenants
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14) Increase in operational expenses of properties 15) Unpredictable accidents by chance or due to natural disasters 16) Disproportionate dispersion of real estate 17) Concentration of tenants 18) Responsibilities inherent to ownership of real estate 19) Changes in laws and regulations 20) Hazardous materials Risks related to taxation, etc. concerning: 1) General risks concerning application of special measures on taxations in terms of recording dividends from profits as losses, etc. 2) Failure to satisfy the requirement for paying dividends that account for over 90% of profits due to the excessive tax burden 3) Accrual of additional taxes or failure to satisfy requirement of paying dividends that account for over 90% of profits due to correction orders as a result of taxation investigations, etc.
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