Japan Retail Fund Investment Corporation ("JRF" or the "Fund") entered into an asset management agreement with Mitsubishi Corp.-UBS Realty Inc. (the "Asset Manager") in September 2001. The Asset Manager, which is the first cross-border J-REIT asset management company, is comprised of 51% ownership by Mitsubishi Corporation and 49% ownership by UBS AG. Pursuant to the Investment Trust Law governing J-REITs (Japanese Real Estate Investment Trusts), J-REITs are not permitted to have employees and, as such, are required to outsource various functions relating to their operations (e.g. asset management, custody and other administrative functions) to third-party service providers (the Asset Manager in the case of our asset management activities). Accordingly, the Asset Manager has broad discretion over the Fund's investment and financing strategies, asset acquisition and disposition policies and property management.

By way of background, the intent of Mitsubishi Corporation, the original sponsor of our Fund and one of Japan's leading enterprises, was to capitalize on the complementary skill set of UBS, which is not only one of the world's leading financial firms, but also one of the largest asset managers in the world (including ranking as one of the largest global real estate asset managers). We believe that the resulting blend of complementary skills and expertise within our cross-border joint venture asset management company distinguishes us in the J-REIT marketplace. Moreover, within our Asset Management Company, we have striven to put in place some of the strongest real estate asset management practices from around the world.

In terms of our choice of the retail asset class as our Fund's exclusive property sector focus, we undertook considerable and rigorous analysis prior to coming to the conclusion that Japan's retail property sector, which was on the cusp of significant restructuring and rationalization, could lead to opportunities for the acquisition as well as repositioning of properties in creating shareholder value within the Fund.

In terms of our corporate governance, approval from six of the eight directors of the Asset Manager's board of directors is required for any significant matter/transaction involving the Fund, its shareholders and/or their subsidiaries/affiliates, including those which may involve perceived potential conflicts of interest. This supermajority rule helps provide additional collaborative support for the fairness and integrity of each transaction and serves as an added safeguard for our Fund's shareholders' interests. Four of our Asset Manager's eight directors are from each of Mitsubishi Corporation and UBS.

Our Asset Manager utilizes the services of an independent full-time auditor, thereby providing continuous oversight of its asset management activities. Moreover, our Fund is audited semi-annually by an outside auditing firm. In addition, we utilize the services of a trustee, which serves as our custodian. Services rendered by our custodian trustee include the custody of assets owned by the Fund, the issuance and transfer of units issued by the Fund and the payment of shareholder distributions.