Notice of Financial Results for Fiscal Year ended March 31, 2006, and Forecast for the Fiscal Year Ending March 31, 2007

• During the fiscal year ended March 31, 2006, the Group's consolidated net sales totaled ¥110,833 million (up 15.2% from the preceding fiscal term). Operating income was ¥21,716 million (up 25.3%), recurring income was ¥18,346 million (up 35.3%) and net income was ¥11,401 million (up 58.7%).
• Leasing business sales and income rose, benefiting from operation of the new Urbannet Nagoya Building, as well as expanded sales from increased rentable space at existing buildings. Consequently, segment net sales expanded 5.0%, to ¥77,488 million, and operating income grew 6.3%, to ¥19,773 million.
• In the residential property sales business, we sold a total of 566 residences, up sharply from the 318 sold in the preceding fiscal year. The Company sold residences at Grand Wellith Seta, Tokyo Front Court, Tanta Town Albo no Oka and Geo Wellith Nishinomiya Kitaguchi. As a result, segment net sales surged 61.3%, to ¥23,543 million, and operating income jumped 212.5%, to ¥4,503 million.

During the fiscal year ending March 31, 2007, the Company forecasts consolidated net sales of ¥123.0 billion, up 11.0% from the preceding fiscal year. We expect operating income of ¥23.5 billion (up 8.2%), recurring income of ¥21.5 billion (up 17.2%) and net income of ¥12.0 billion (up 5.3%). All of these figures amount to historic highs.

• In the future, NTT Urban Development plans to (1) proceed with development projects, including the Shijo Karasuma Project in Kyoto, (2) revise rent levels at existing leased properties, in line with service improvements and market movements, (3) expand its residential property sales business in western Japan, (4) promote the fund business and (5) develop and strengthen corporate social responsibility systems.