LaSalle Japan aims to maximize investment value by formulating a scenario for steady growth through collaboration with the LaSalle Group, a global real estate service provider.

LaSalle Japan REIT Inc. (“LaSalle Japan”) aims to formulate a scenario for growth through collaboration with LaSalle.

※1LaSalle：LaSalle Investment Management K.K. (“LaSalle”)
LaSalle is the Japanese real estate business-related office of LaSalle Investment Management, Inc., a wholly owned subsidiary of general real estate service provider Jones Lang LaSalle Inc. (JLL).
As of the end of December 2006, JLL had around 25,500 employees and had built up a global network of 160 offices in 41 countries, offering a variety of real estate related services-including real estate investment-related management, property management, buying and selling brokerage, leasing brokerage and market research (220 research analysts covering 250 cities in 40 countries)-in more than 450 cities across five continents.
As the core business of the JLL Group (see Note), LIM’s 26 offices in North America, Europe and Asia primarily offer real estate investment management services to investors, including institutional investors and pension funds, managing both public and private real estate funds. (As of the end of December 2006, the value of assets under management totaled approximately $US40.6 billion.)
LaSalle, LIM’s operation in the Asia-Pacific region with six private equity real estate funds (subsequently referred to as “the private equity funds”) in Japan, conducts asset management for real estate funds (as of the end of December 2006, the value of LaSalle’s managed assets totaled approximately $US4.6 billion [\520 billion]).
Note: JLL Group centers on JLL and includes JLL subsidiaries as well as related companies.

Collaboration with LaSalle will enable LaSalle Japan REIT Inc. to gather more reliable property information, improve analytic capability and enhance creditworthiness, all of which will increase LaSalle Japan’s property acquisition opportunities. To quickly expand its asset scale LaSalle Japan will selectively invest in prime properties with high profit and demand potential.

Due to robust corporate sector performance, office building vacancy rates are showing signs of improvement, which has resulted in continued upward trends in rent levels. In the Tokyo Metropolitan area and other economically stable regions, steady demand for office space is expected to continue, even taking into account a certain degree of fluctuation in the Japanese economy.

Lifestyles characterized by motorization and suburban residence have contributed to suburban shopping centers’ improved customer attraction, while Japan’s three urban development laws will serve to increase the scarcity premium of large-scale retail properties. Also, demand remains high for multi-tenanted retail properties in central Tokyo and other highly populated regions, where the profitability of these properties is expected to remain high.

＜Medium- to Long-Term Targets of Portfolio Composition＞

Medium- to Long-Term Targets of Portfolio Composition

＜Investment Guidelines (Allocation by Type of Use)＞

Type of Use	Target Range of Allocation Ratio	Remarks
Office	10-80%	Primary investment target
Retail	10-80%	Primary investment target
Residential	0-20%	Secondary target, can be 0%