KAJIMA CORPORATION | Annual Report 2008

Kajima has expanded its real estate development business internationally, pursuing opportunities along with the globalization of its construction business. We operate mainly in the United States under Kajima U.S.A. Inc. (KUSA), Southeast Asia under Kajima Overseas Asia Pte Ltd. (KOA), and Europe under Kajima Europe (KE). This global diversification has generated stable earnings for many years.

Selection and concentration have strengthened our overseas real estate development business.

Few companies match the breadth and creativity of the technologies we deploy.

Decisive concepts for projects and strong relationships with local partners enhance our global presence.

We balance stable lease income from property holdings with capital gains from strategic asset sales.

A Long-Term, Local Perspective

Our first priority in overseas development is long-term commitment and localization. We enter markets after prudent consideration, and then continuously enhance our presence in them. Carefully navigating changing markets, we work to maximize the long-term value of projects, which reinforces our presence in each region we serve. In the United States, our first development was the revitalization of the Little Tokyo area in downtown Los Angeles, California in the 1960s. Since then, we have expanded our U.S. real estate development business from the East Coast to Hawaii. In Asia, our first investment was a hotel project in Singapore in the early 1980s, and it is still a core property in our Asian portfolio. In each region, we optimize our operating organization and structure in accordance with local customs and practices. In Asia, longstanding business relationships with local partners help us to move complex projects forward.

Embracing New Business Models

Our second priority is innovative business models and properties. U.S. subsidiary Industrial Developments International, Inc. (IDI) is representative. As an innovative “merchant developer” of properties for sale in a short business cycle, IDI determines exact tenant needs and quickly provides investment grade properties. IDI is recognized as a pioneer of the industrial development business because of its consistent success. Moreover, KUD International, a subsidiary of KUSA, has been providing program management services for large-scale developments such as sports stadiums and aquariums. In Europe, KE has been proactive as a key organizer of private finance initiatives (PFIs), which have subsequently been introduced in Japan. KE is also the developer of an innovative business park near Heathrow Airport. In Asia, KOA’s large-scale mixed-used developments attract large numbers of visitors and vitalize the regions in which they are located.

Comprehensive Capabilities

Our third priority is to maximize the advantages of our wide range of capabilities based on internal resources. Our planning, design, engineering and construction functions support advanced project management. These capabilities enable us to sense market needs, define the best use for a property to maximize its value, and produce quality buildings for users. Moreover, our credibility supports project funding. Few other companies besides Kajima are able to handle projects ranging from large-scale mixed-use developments in central business districts to high-profile island resorts. We are also committed to high standards of excellence and customer satisfaction. For example, KOA’s large-scale design-build developments in Jakarta and Bangkok demonstrate a commitment to superior quality and the use of best practices, while the highest quality of warehouse construction has supported IDI in the industrial development business.

We will continue to develop attractive businesses and projects worldwide.

Kajima Group company IDI is one of the top 10 warehouse developers in North America because it meets tenant needs.

Consistently ranked among the top industrial developers in the United States, Atlanta-based Industrial Developments International, Inc. (IDI) is a national, full-service developer that provides strategically located warehouse and distribution facilities to high-profile tenants, including many Fortune 500 companies. Since its founding in 1989, IDI has increased its assets from US$89 million to more than US$925 million, and also holds long-term investments valued at more than US$1.2 billion.

IDI has developed 114 million total square feet of institutional-quality industrial properties valued at US$5.3 billion and ranging in size from 80,000 square feet to more than 1 million square feet. These properties include inventory buildings in master-planned business parks available for immediate-lease occupancy, as well as build-to-suit facilities for long-term leasing or ownership.

Operating under a short cycle from investment to return, IDI is able to deal with economic trends quickly. This and other features offer powerful advantages from the perspective of hedging risk. In addition to developing and leasing properties, IDI provides a comprehensive array of services, including property management, that allow tenants to raise the efficiency of logistics operations. IDI is skilled at matching location and functions with demand, and tenants hold its properties in high regard.

Hamilton Mill Building I is located within the Hamilton Mill Business Center in Buford, Georgia, which is northwest of Atlanta. Completed in November 2007, it is a leading-edge logistics center that IDI developed and now manages. With a total floor area of 870,480 square feet, it is one of the largest logistics centers in the United States. Features such as a clear height of 32 feet, a 185-foot truck court and a maximum column spacing of 54 feet by 50 feet deliver cutting-edge functionality.

Senayan Square sets a new standard of excellence for the bustling city of Jakarta. This mixed-use development encompasses office, residential and commercial properties, and a third stage of development will further enhance function and appeal.

Our advanced project and property management skills have helped make Senayan Square one of the best developments in Jakarta.

Located in a thriving business district of Jakarta, Indonesia’s capital, Senayan Square is a large mixed-use complex with retail, office and residential properties. In 1989, Kajima Overseas Asia Pte Ltd. (KOA) concluded a joint cooperation agreement with the Indonesian government, under which KOA committed to redeveloping 19 hectares of land, operating the properties for 40 years, and then transferring the land and buildings to the government.

A unique feature of the project is that KOA provides design and construction, and then manages completed properties through local subsidiary P.T. Senayan Trikarya Sempana. The shopping center, Plaza Senayan, opened in 1996, followed by the first office building, twin luxury apartment towers, and other properties. With the opening of the second office building in February 2008, the total gross floor area of the complex now exceeds 360,000 square meters.

Leading the Local Market

KOA is using its expertise in a wide range of fields to manage Senayan Square. Successful despite challenges due to the economic crisis and social unrest of the late 1990s, the development today commands average rental rates for each property that are the highest in their respective local markets. Numerous specialty shops, including high-end international fashion brand stores, and approximately 15 million visitors per year demonstrate the quality of Plaza Senayan.

The development of Senayan Square continues. In 2008, KOA plans to start constructing a third office building with total floor area of 62,000 square meters, with completion scheduled for 2010. KOA will also expand the retail and residential properties over the medium to long term and add a hotel.