0120AE2008-VWHOVALUATION REPORT

Prepared for
Waka Baryu

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10 February 2008

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Prepared by
Takashi Yamaguchi (Valuer)
Value Workers, Inc.
20-1-303 Kitamachi, Shinjuku, Tokyo, 162-0834 Japan

Pursuant to your request, I have prepared a summary report of a complete
valuation for the subject property. The attached report details the scope of work,
level of reporting,reporting definition of value,
value valuation methodology
methodology, and pertinent data
researched and analysed in the development of this valuation.

(Note)
The forecasts, projections, or operating estimates contained herein are based on
current market conditions. These forecasts are, therefore, subject to changes with
future conditions.

Certification

I certify
tif tot theth bestb t off my knowledgekl d andd beliefb li f that:
th t

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1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal impartial, and unbiased
professional analyses, opinions, and conclusions.
3. I have no present or prospective interest in the property that is the subject of thisreport, and no personal interest with respect to the parties involved.
4. I have no bias with respect to the property that is the subject of this report or to theparties involved with this assignment.
5. My engagement in and compensation for this assignment were not contingent upondevelopingp g or reportingp
gp
predetermined results,, the amount of the value estimate,, ora conclusion favouring the client.
6. My analyses, opinions, and conclusions were developed, and this report has been
prepared in conformity with IVS (International Valuation Standards).
7. I have the knowledge and experience to complete the assignment competently.
8. No one provided significant professional assistance to the person(s) signing thisreport.
reportSignature:

Date of certification: 10 February 2008

Table of Contents

Ⅰ． Final Opinion, Definition of Value, Effective Date, etc.

Final Opinion of Value, Definition of Value.
Effective Date of Valuation
Reasonable
bl Exposure Timei
History of Subject Property
Ⅱ． Scope of Work
Ⅲ． Identification of the Property
Ⅳ． Property Right Valued
Ⅴ． Owner on the Registryg y Book
Ⅵ． Date of Inspection and Report
Ⅶ． General Assumptions and Limiting Conditions
Ⅷ． Purpose and Intended Use of the Valuation
Ⅸ． Intended User(s)Ⅹ． Valuation Process
1. General Factors
2. General Condition of Community
3. Location and Transportation
4. General Condition of Subject Neighbourhood
5. General Condition of Subject Property, and Zoning
6. Highest and Best Use
7
7.
Application of Valuation Methods
A. Cost Approachi. Value of the Condominium
a. Land Value(1) Market Approach (Land)(2) Income Approach (Land Residual Method)( ) Reconciliation
ili i
(3)
b. Reproduction Cost of the Buildingc. Reproduction Cost of the Condominium
d. Depreciatione. Ratio of Utility
j Unitii. Value of the Subject
B. Market Approach
C. Income Approach (Direct Capitalization Method)
D. Income Approach (DCF Method)
E. Reconciliation and Final Opinion of Value
Sheet-Ⅰ
Land Sale Comparables Analysis
Sheet-Ⅱ
Income Capitalization (Land Residual Procedure)

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1.
2.
3
3.
4.

.... P. 01.... P. 01.... P. 01.... P. 01.... P. 01.... P. 02.... P. 03.... P. 05.... P. 05.... P. 05.... P. 05.... P. 06.... P. 06.... P. 06.... P. 06.... P. 09.... P. 11.... P. 11.... P. 12.... P. 14
P 15.... P.
.... P. 15.... P. 15.... P. 15.... P. 15.... P. 15.... P. 15.... P. 16.... P. 17.... P. 17.... P. 18.... P. 18.... P. 18.... P. 19.... P. 19.... P. 20.... P. 21.... P. 23

Ratio of Utility
Condo Sale Comparables Analysis
Income Capitalization (Direct Capitalization Method)
Income Capitalization (DCF Method)
Rent Comparables.... P. 24.... P.
P 25.... P. 26.... P. 27.... P. 28

A
diAppendices

Ci Map (Land(d Comparables)
C
bl )
City
Aerial Photographs
Topography Map
Residential Map
Public Sectional Map
RegisteredgLand Surveyedy Map
pRegistered Building Drawings
Building Drawings (Subject floor)
Copy of Road Register Book
Document of Building Confirmation
Copy of Public Registry Book
Photographs.. A
App. 01.. App. 02.. App. 03.. App. 04.. App. 05.. App.
pp 06.. App. 07.. App. 08.. App. 09.. App. 10.. App. 11.. App. 12

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Sheet-Ⅲ
Sheet Ⅳ
Sheet-Ⅳ
Sheet-Ⅴ
Sheet-Ⅵ
Sheet-Ⅶ

Ⅰ． Final Opinion, Definition of Value, Effective Date, etc.

1. Final Opinion of Value, Definition of Value.
< FinalFi l Opinion
O i i off ValueV l >JPY 92,200,000.-(In terms of cash)(Excluding consumption tax)

AUD 960,117.-(AUD1 = JPY96.03)

PLE(Date of the rate: 08 Feb 2008)

SAM< Type and Definition of Value >For the purpose of this report, market value is defined as follows:
Marker Value is the estimated amount for which a property should
exchange on the date of valuation between a willing buyer and a willing
seller in an arm ’ s length transaction after proper marketing wherein theparties had each acted knowledgeably, prudently, and without compulsion.
2. Effective Date of Valuation：

08 February 2008

3 Reasonable Exposure Time
3.

：

Around 6 months

4. History of Subject Property：

According to the public registry book:
Subject condominium was built on 14 March 2003, and Sadamasa
K
Kagamii boughtb
ht it on 29 May
M 2003.
2003 At thatth t time,ti
salel pricei off theth subject
bj t
property was JPY82,500,000. (including consumption tax)
Afterwards, Subject property has not been transferred to any otherentities.

Ⅱ． Scope of Work

This valuation is performed based on the following conditions.
1. I checked the location and area (sq.m.) of the subject property with the:Public Registry Book

1

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Property Tax Notice
Public Sectional Map
Registered Land Surveyed Map
Registered Building Drawings; andcontract at the Newly Built Sales.
2. I conducted inspection on the subject property (exterior).
3 I researched3.
h d andd analysed
l d theth reall estatet t market
k t ini theth comparable
bl areas.
4. I collected and examined a lot of recent sale/lease comparables in this area.
(Additional contents are included in each section of this report)

2

Ⅲ． Identification of the Property

1. LandAddress ： 1-2-3 ABCD, EF-ward, Tokyo<Legal description>(sq.m.: square meter)
Category ofArea (sq.m.)
Land(Registered Area)

Lot Number

1-2-3 ABCD,
ABCD EF-ward
EF-ward, Tokyo

Building site

3,092.16

PLE(東京都EF区ABCD一丁目2番3)

Total

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2. Building<Legal description>

Location, House Number

1-2-3 ABCD, EF-ward, Tokyo(EF区ABCD一丁目2番地3)

Buildingg Name: Great Maison(建物の名称: グレートメゾン)

3,092.16(sq.m.: square meter)
Structure, Category

Area (sq.m.)(Registered Area)
Reinforced concrete 1F 1,125.20
Flat roof 2F 1,081.36
8 story 3F 942.70
4F 801.15
5F 664.21
664 21
6F 596.88
7F 518.43
8F 450.81
Total 6,180.74

3

3 Subject property
3.
In this valuation, subject property to estimate is following unit.
Unit Number: ＥＦ一丁目2番3の608
Unit Name:
608
Category:
residence
Area written in the contract:(wall-centre-measurement)
A written
Area
itt ini theth registryi t book:b k (wall-inside-measurement)( ll i idt)
In this valuation, area depends on wall-centre-measurement.

77.91㎡
74 16㎡
74.16㎡
77.91㎡

4. Description on the property tax notice(sq.m., JPY)

Bldg.

Fixed property tax
City planning tax
Fixed property tax
City planning tax

Assessed value

40.32

41,000,000

Tax base

Rate

Tax/year

2,653,312

1.4%

37,1005,668,587

0.3%

17,00010,372,375

1.4%

145,200

10,372,375

0.3%

31,100

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Land

Area

74.16

23,600,000SAM

64,600,000

4

230,400

Ⅳ． Property Right Valued

Fee simple[Occupant: Owner]
In Japanese law (Act on Building Unit Ownership, etc.): Building unit
ownership, Share in a common element, and Right to use the grounds.

Ⅴ． Owner on the Registry Book

As of 25 January 2008
Sadamasa Kagami
Address: 2-19-20 Kanteigaoka, XYZ-ku, Tokyo

01 February 2008
10 February 2008

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Ⅵ． Date of Inspection and Report(Date of Inspection)(Date of Report)

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Ⅶ． General Assumptions and Limiting Conditions

This valuation has been developed under the following general assumptions andlimiting conditions:
1. Valuation of owner-occupied condominium unit.
Subject land and building are occupied and used by the owner. This valuation
is developed under the condition that the properties are free of any rights otherthan ownership.
2. Area (size) of land and building depends on the public registry book. That ofindividual area depends on the wall
wall-centre-measurement
centre measurement in the contract.
3. The property is evaluated free and clear of any or all liens or encumbrances(unless otherwise stated).
4. The forecasts, projections, or operating estimates contained herein are based on
current market conditions. These forecasts are, therefore, subject to changes
with future conditions.
5 Ph
5.
Physicali l test
t t forf checkingh kihhazardousdmaterials,
t i l whichhi h may or may nott bebpresent on the properties, has not been performed. The value estimated in thisreport is predicated on the assumption that no hazardous materials are on or in
the properties that would cause a loss in value. No responsibility is assumed forsuch conditions or for any expertise or engineering knowledge required to
discover them.

56 Any unknown conditions existing at the time of inspection could alter the
6.
value. No responsibility is assumed for latent defects of any nature which may
affect value, nor for any expertise required to disclose such conditions.
7. Valuer who performed this valuation has no present or prospective interest in
the subject property. Compensation for the valuer is not contingent on thereporting of a predetermined value or direction in value that favours the cause
client. This valuation is performed in a manner that is independent,
independentof the client
impartial and objective.

Ⅷ． Purpose and Intended Use of the Valuation

Ⅸ． Intended User(s)PLE

Purpose and Intended Use of this valuation is to assist the financial institution inassessing the collateral value.

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This report is intended for use only by the lender/client.

Ⅹ． Valuation Process

1 General Factors
1.

< Economic conditions >In Japan, poor economic conditions had continued about 1.5 decades since thecollapse of the bubble economy (from 1991). Government had introduced various
anti-deflation measures. Bank of Japan had continued ultra-low-interest rate
policy.
policy But,
But as a whole
whole, Japanese economy had been under severe condition for along time.
But recently flattening-off trend is becoming clearer. Stock price had hit thebottom in 2003 and then it turned up. Corporate activities also turned up.
Afterwards, US subprime loan problem came to light in the latter half of 2007,
and its influence on the world economy is concerned, nowadays.
According to the “Cabinet Office Economy Watchers Survey” in January 2008,
on the whole, the economy is recovering moderately.
< Land price trend >Also, in real estate dealing market, after the collapse of the bubble economy,
demand had diminished under the sluggish economy. Although the transition of6

land price differs with areas, decline trend continued for over ten years.
But recently flattening-off trend is becoming clear in the metropolitan areas.
And there seems Mini-bubble-phenomenon in some particular areas.
According to the public survey of land price as of 1 July 2007, national averageof residential land price declined by 0.7% per year, and commercial land pricerose by 1.0% per year. The average land price seems to be ending its declinationof 16 consecutive years.
years

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Main cause of it is that the three metropolitan areas (Tokyo, Osaka, andNagoya) where demands for condominiums and offices are steady have pushed
up the average land price. Average land price of the commercial area of theseareas rose by 10.4% per year. In Tokyo it rose by 17.2%, and in Osaka it rose by
10.4%. The land price began to rise in the local core cities such as Sendai andFukuoka.
F
k k LandL d pricei ddeflation
fl i afterf theh collapsell
off theh bubbleb bbl economy seems to
be finished in these major areas.
On the other hand, in local areas, land price declined both in the commercial
areas and residential areas, 15 years in a row. Decline trend is continuing still inthese areas. Diversity became larger between measure areas and local areas.

SAM

One of the main factors of the land price rising in the three metropolitan areas is
the huge investment money. Investment money concentrated on the real estatesthat would generate yield and gain. On the other hand, in local areas where
populations are decreasing, yields could not be expected, so the investment
money also could not be expected.
< Transition of Published land price near the subject property >year

yen/sq.m

index

1998

1,392,308

100.0

1999

1,192,308

85.6

2000

1,084,615

77.9

2001

1,030,769
1 030 769

74 0
74.0

2002

1,023,077

73.5

2003

1,023,077

73.5

2004

1,023,077

73.5

2005

1,046,154

75.1

2006

1,153,846

82.9

2007

1,453,846

104.4

Transition of land price

140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

< Market trend of real estate investment such as J-REIT >J-REIT (Japan Real Estate Investment Trust) was founded in 2001. The new7listing increased rapidly from 2005 to 2006,
2006 and the market price rose remarkably
from the latter half of 2006 to the first half of 2007.
However, the US subprime loan problem came to light in June, 2007. The
worldwide financial crisis occurred and the market changed into decline.
< Average Cap-Rates of newly purchased J-REIT properties >The average Cap-Rates of Direct Capitalization Method that were used in thevaluationsl ti
off J-REIT's
J REIT' newly
l purchased
h d properties
ti in
i th
the pastt 3 years in
i Tokyo
T k
23 wards are as follows.
<Residential Property>
Story

Numberpurchased

Sum of thepurchase priceSum of thevaluation value

Average
Cap-Rates

under 10 years

under 20 story437¥779.9billion¥781.9billion

4.93%

10 years or more

under 20 story

125¥97.8billion¥99.2billion

5.41%

under 10 years

20 story or more

8

¥99.6billion¥100.1billion

4.63%

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Years old

10 years or more 20 story or more

4¥35.8billion¥35.9billion

4.63%

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< Condominium market trend >According to the National Real Estate Information Centre, the average unit priceof the new condominiums in Tokyo metropolitan area rose by 13.8% per year in
2007.
In Tokyo 23 wards it rose by 22.50%. In Tokyo Santama Area it rose by 11.6%.
In Kanagawa Prefecture, it rose by 8.4%. In Saitama Prefecture, it rose by 9.3%.
In Chiba Prefecture, it rose by 14.7%. In Ibaraki Prefecture, it rose by 11.5%.
< Transition of average unit price of newly built condominiums in this area >In this table we can see the transition of average unit price of newly built
condominiums in this area.
< EF Ward >10,000yen

10,000yen/3.3sq.m.

sq.m.

U. Price

10,000yen

Year

Bldg.

Units

JPY

Index

1990

6

141

2,115,185
2 115 185

5,704
5 704

11,225.9
225 9

100.0
100 0

1991

3

25

450,108

1,384

1,075.1

87.7

1992

1

15

71,820

337

704.5

1993

8

165

1,543,402

9,940

1994

12

380

2,422,532

1995

8

244

1996

34

1997

sq.m.

Rate/Year Av. Price Av. Area
15,001
15 00140.5
40 5△ 12.318,00455.4

57.5△ 34.5

4,788

22.5

513.3

41.9

△ 27.1

9,354

60.2

21,105

379.5

31.0

△ 26.1

6,375

55.5

1,361,089

13,881

324.1

26.4

△ 14.6

5,578

56.9

919

5,999,875

58,916

336.7

27.5

3.9

6,529

64.1

65

1,652

10,529,130

106,275

327.5

26.7

△ 2.7

6,374

64.3

1998

61

1,075

5,816,330

62,291

308.7

25.2

△ 5.8

5,411

57.9

1999

71

1,995

11,248,900

111,150

334.6

27.3

8.4

5,639

55.7

2000

70

1,909

10,034,400

112,289

295.4

24.1

△ 11.7

5,256

58.8

8

2001

54

1,443

8,720,414

81,576

353.4

28.8

19.6

6,043

56.5

2002

38

1,113

5,737,710

56,583

335.2

27.3

△ 5.1

5,155

50.8

2003

51

1,584

6,334,565

67,488

310.3

25.3

△ 7.4

3,999

42.6

2004

52

1,279

6,300,076

61,918

336.4

27.4

8.4

4,926

48.4

2005

26

617

3,565,392

35,185

335.0

27.3

△ 0.4

5,779

57.0

2006

9

209

2,004,580

16,338

405.6

33.1

21.1

9,591

78.2

2007

13

277

44,619,550
619 550

24,66324 663

619
619.2
2

50
50.5
5

52 7
52.7

16 677
16,67789.0
89 0

2. General Condition of Community

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E< History of EF Ward >EF Ward was born in 1932 as a ward of Tokyo City. It is located in the east ofTokyo, and southwest of Tokyo-23-wards. It has a total area of 15.11 square
kilometres, and is located on the Yodobashi-tableland of which altitude is 30 to
60 meters.

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After the World War II, the commercial area around the EF Station had
recovered as a place of popular resort. After 1960s, highhigh-rise
rise buildings had been
constructed rapidly. After the Tokyo-Olympics in 1964, urban renewal
constructions had been continued. Afterwards, it has grown into one of the most
famous commercial areas in Japan.
EF Ward also includes some of the most famous high-grade residential areas inTokyo. Especially, Shoto area and Yoyogi-uehara area are famous high-grade
residential areas.
And EF Ward is also a famous educational city in which many cultural
facilities, foreign embassies, and universities are located.
< Population >At the peak, EF Ward had population of around 285,000 and number ofhhouseholdh ld off 93,000
93 000 in
i 1963.
1963 Afterwards,
Aftd th
the populationl ti
h d decreased
haddd(particularly in the bubble era). It was backed by the decline of birth rate,
progress of the aging society, and rapid land price hike.
But, after 1997 the population increased under the land price decline.
Particularly, the number of household increased according to the increase of
nuclear families. The average household is 1.7 recently. In 2007, the populationi 197,852, andisd theh numberb off hhousehold
h ld iis 117,776.
Year

Population

Household

30/Jun/1980

240,418

112,591

30/Jun/1985

232,531

114,44030/Jun/1990

207,822

104,4659

30/Jun/1995

184 880
184,880

96 51596,51530/Jun/2000

187,948

103,894

30/Jun/2005

194,891

113,023

30/Jun/2006

197,620

116,85030/Jun/2007

197,852

117,776< Transportation >JR Yamanote Line, JR Chuo Line, JR Saikyo Line, JR Shonan-Shinjuku Line,
Tokyu-Toyoko Line, Tokyu-Den-en-toshi Line, Keio Line, Keio-Inogashira Line,
Odakyu Line, Ginza Subway Line, Hibiya Subway Line, Chiyoda Subway Line,
Hanzomon Subway Line, Shinjuku Subway Line, and Oedo Subway Line run
throughhh thishi ward.
d

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Now new subway line (Fuku-toshin Subway Line) is under construction.
Operation is scheduled to start in June, 2008. It will connect three big stations i.e.
PQR, STU, and EF.
Municipal bus line and private bus lines are running throughout the ward.
Traffic system
is qquite convenient in this ward.
ySAM< Roads >Gaien-nishi-dori Avenue (prefectural belt line), Meiji-dori Avenue (prefectural
belt line), Yamate-dori Avenue (prefectural belt line), Koshu-kaido Avenue(national road), Route 246 (national road), Expressway No.3, and Expressway
No.4, etc., run through this ward.
< Infrastructure >The diffusion of public water service, public sewage service, and city gas
service are almost 100%.
< Commercial
C
i l Base
B>
Harajuku area and Jingumae area are one of the most famous fashion centres inJapan. Shopping area along the Omotesando Street is changing into the most
famous high-class fashion centres in Japan. Commercial area around the Ebisu
Station is a famous business and shopping area. Area around the Daikan-yama
Station has been redeveloped into a fashionable commercial area. Yoyogi area isllocatedd near theh Shi
Shinjuku
j k S
Stationiandd new hi
high-riseh ib ildibuildings
hhas beenbconstructed recently.
< Trading area and Customers >Commercial areas in EF Ward have broad trading areas which expand to Tokyo,

10Kanagawa, and Japan.
< Future Trend >EF Ward had been a famous commercial and residential area for a long time.
Many head offices of IT related industries are concentrated in this ward. And,
nowadays, construction project of a new subway line, reconstruction project of
the Tokyu-Bunka-kaikan,
Tokyu Bunka kaikan redevelopment project of the Sakura-gaoka
Sakura gaoka area,
area etc.,
etc
are proceeding.
This ward would keep the supremacy also in the future as one of the most
famous commercial and residential area in Japan.

PLE

3. Location and Transportation
Nearby railroad station:
EF station on the JR Yamanote Line
Direction and distance (road line) from the nearby railroad station:
650 m
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4. General Condition of Subject Neighbourhood(1) Range

I identified the subject neighbourhood in the following range on the front
street, starting from the subject property.
West
East

About
About

150 m
150 m

(2) Characteristics of the Subject Neighbourhood< Street condition >Paved public road of 8m width is considered to be standard in this area, andarrangement and continuity of the streets are rather good.
< Access >Access to the nearby railroad station:
Access to the nearby shopping centre:
Access to the public offices:

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Considerably good
Considerably good
Considerably good< Environmental conditions >High-rise condominium buildings are located in this area. This area isallowed to use a higher Maximum Floor Area Ratio to build condominiums.
< StStandardd d use off llandd iin ththe area>>
Width of the road:
8m width public road
Standard lot size:
Around 5000 square meters
Standard use:
Site of a condominium

PLE< Future trend >Few factors are observed which change the subject neighbourhood in thenear future.
5. General Condition of Subject Property, and Zoning

The pproperty-specificp y pvalue factors of subject
j land are as follows.

SAM(1) Street conditions< Lot classification >Lot which fronts to three streets< Condition of the streets >Direction
Width
Pavement Classification
West
around 10.0m
Paved
Public roadSoutharound 8.0m
Public road
Paved(2) Lot conditions< Topography >N l flat
Nearlyfl t< Shape >Close to trapezoid< Dimensions >Around90 m X

70 m(3) Lifeline< Electric power service >< Public water service >< Public sewer service >< City gas service >ServedServedServedServed12

Ground height
Equal level
Equal level(4) Zoning Districts< Designation as the City Planning Area >Designated.. Located in the: Urbanization Area
The City Planning Area is the place to which the city plan is designatedand the City Planning Law and other related laws are applied. Cityl i can iin principle
i i l only
l beb carriedi d outt in
i a Cit
City Pl
Planning
i A
Area. Th
The
planning
City Planning Area, whose purpose is to regulate city development andprevent urban sprawl, is divided into 2 areas: the Urbanization Area and the
Urbanization Control Area. The City Planning Areas that have not been
divided are called the Undivided City Planning Area.

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< Local Zoning Regulations >Range: Whole subject land
Basic Zoning:
The subject property is located in an area designated as the:Second-type Residential Zone
This zone is targeted at the residential areas where shops and offices
coexist. This zone is established to p
provide living
g areas wheredevelopments are regulated mainly to protect residential environment.
<Building Restriction>
Maximum Building Coverage Ratio:
60 %Maximum Floor Area Ratio:
200 % ... ** Restriction by the front street width: Not applied(Article 52,
52 2nd clause of the Building Standards Law)

(5) Present use of the land
Site of a condominium(6) Subject Building< CompletionCl ti off construction
t ti >
February 1, 2003
( 5.0 years old )< Grade of materials and construction >Considerably good
< Present use >Condominium unit
< Maintenance and management >Considerably good
< Degree of depreciation >Considerably good13

6. Highest and Best Use

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< Highest and Best Use of the Land as though Vacant >I think the Highest and Best Use of the subject land as though vacant is theuse as the site for condominium.
< Highest
Hi h t andd BestB t UseU off theth Subject
S bj t PropertyPt as ImprovedId>I think the Highest and Best Use of the subject property as improved is theuse as the condominium unit.

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7.

Application of Valuation Methods
In this valuation, I applied Cost Approach, Market Approach, and Income
Approach to estimate the value of subject property.

A.

Cost Approachi. Value of the Condominium

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a. Land ValueIn this valuation, I applied Market Approach and Income Approach toestimate the value of subject land.
In built-up areas, we can hardly apply Cost Approach for lands. It is common
also in other countries.

SAM((1)) Market Approachpp(Land)()
I collected a lot of comparables of land transaction in the subject andcomparable neighbourhoods. Then, I compared the subject land with thecomparables from the viewpoint of market-specific value factors and propertyspecific value factors.
And I estimated the “Value indicated by the Market Approach” for:See Sheet-Ⅰ
384 000 per sq
sq.m.
m ..
.. JPY 11,384,000(2) Income Approach (Land Residual Method)
On the assumption of construction of an office building for rent, land value
was indicated by the land residual method.
All expense was deducted from all income which would be generated from theassumedd improvedid property,
t and
d Net
N t OperatingOti IIncome (NOI) was indicated.
i di t dThen NOI that belongs to the building was deducted from it, and NOI thatbelongs to the land was indicated. NOI that belongs to the land was divided byappropriate capitalization rate.
And I estimated the "Value indicated by the Income Approach" for:See Sheet-Ⅱ.. JPY 1,360,000 per sq.m. ..

(3) Reconciliation
Diversity resulted among indicated values.
Sales Comparison Method was applied with comparative study of many recent
comparables. Various comparisons were performed suitably by checking the15

value factors. They are credible and reliable. So, the indicated value reflects thereality of the market at the effective date of the valuation.
The Value indicated by the Income Capitalization Method is the total present
value of net return expected from the subject land in the future. It isconsiderably difficult to forecast the future NOI. However, it reflects theincome-producing capacity in which the essence of the economic value iscreated Therefore,
created.
Therefore it must be esteemed as a verification means of value.
value

PL
E

I re-examined each stages of valuation process objectively and critically, andreconsidered the feature of the methods and data.
Gov. published land price was also taken into account. And I estimated thevalue of subject land to be:
Unit Value
Land Area
Land Value
X 3,092.16 sq.m. ≒ JPY 4,279,500,000... 1,384,000 per sq.m.

b. Reproduction Cost of the Building
Materials of the building, the grade of construction and the trend of thebuildingg costs were examined,, and I estimated the subject
jbuildingg
reproduction cost as follows.

SA
M

Japanese real estate market is now under the condition that is not easily
foreseeable due to the economic uncertainty. In addition, as a result of therevision of the Building Standards Law in June 2007, building confirmation
procedures stagnated.
Construction-cost-hikeConstruction
cost hike came to light in the latter half of 2007.
2007 Contractors’
estimates soared by 10% to 20% until the end of 2007. One major factor is theprice-hike of construction materials such as steel according to the increased
demand in emerging economies such as China. Another major factor is thestagnated building confirmation. Since the number of constructions decreased
sharply in a short term, contractors started to raise their charge to avoid theirfinancial troubles.
troublesIn this valuation, although depending on the standard cost, cost hike is also
taken into account, I estimated the reproduction cost as follows.
Total Floor Area
Building Cost
Unit Cost
X 6,180.74 sq.m. ≒ JPY 1,588,500,000... 257,000 per sq.m.
Ordinary overheads of the condominium construction were estimated to be:
20% of the sum of Land Value and Building Cost.
→
4,279,500,000→＋ 1,588,500,000 ≒ JPY 5,868,000,000.5,868,000,000
×20%→≒ JPY 1,173,600,000.Reproduction cost which includes ordinary overheads was estimated to be:
1,588,500,000→＋ 1,173,600,000 ≒ JPY 2,762,100,000.-16

c. Reproduction Cost of the Condominium
The land value indicated by (a.) were added to the reproduction cost of thesubject building indicated by (b.), and I estimated the Reproduction cost of thesubject property to be:
4,279,500,000
2,762,100,000..
+＝ JPY 7,041,600,000.-<Calculation p
process>PL
E

d. Depreciation
Depreciated value (based on physical, functional, economical factor, which isestimated by the methods based on economic life and observation) was
deducted from the reconstruction cost of the subject property, and I estimatedthe "Value indicated by the Cost Approach" of the whole condominium to be…
.. JPY 6,747,000,000.(Items)
Land value ..
JPY 4,279,500,000.Building value .. JPY 2,467,500,000.-

Devaluation according to the unsuitable use: 0% is estimated
X 100% ≒ JPY 4,279,500,000.4,279,500,000
Building .. Straight line method
Salvage value of skelton:
0% is estimatedSalvage value of installations:
0% is estimatedskelton: 2,762,100,000 X 0.80 X ( 1 - 5.0 / 100 ) × 100%
+ 2,209,680,000 X 0% ≒ JPY 2,099,200,000.install.: 2,762,100,000 X 0.20 X ( 1 - 5.0 / 15 ) × 100%
X 0% ≒ JPY 368,300,000.+ 552,420,000
subtotal JPY 2,467,500,000.D l ti based
Devaluationb d on observation:bti
0% iis estimatedti t dskelton: 2,099,200,000
X
100% ≒ JPY 2,099,200,000.install.: 368,300,000
X
100% ≒ JPY 368,300,000.subtotal JPY 2,467,500,000.Marketability as a combined property
Devaluation according to the combination:
0% is estimatedLand ..
4,279,500,000
X
100% ≒ JPY 4,279,500,000.Building .. 2,467,500,000
X
100% ≒ JPY 2,467,500,000.Total
JPY 6,747,000,000.-

SA
M

Land ..

e. Ratio of Utility17

I evaluate the ratios of utility as below.
Floor utility ratio:
0.102811
Situation utility ratio:
0.132774.. See Attached Sheet-Ⅲ

ii. Value of the Subject Unit
Whole condominium value was multiplied by Floor utility ratio and Direction
utility ratio, and I estimated the "Value indicated by the Cost Approach" to be...
Whole condo value
Floor
Situation
6,747,000,000
× 0.102811 × 0.132774 ≒ JPY 92,100,000.-

PL
E

Market Approach
Sales Comparison Method was applied with comparative study of many recent
comparables. Various comparisons were performed suitably by checking thevalue factors. They are credible and reliable. So, the indicated value reflects therealityy of the market at the effective date of the valuation.
And I estimated the "Value indicated by the Market Approach" to be…
..
See Sheet-Ⅳ.. JPY 92,200,000.Note:
Along with the market recovery, investment money flowed into the skyscrapercondominiums in the central Tokyo, and their price soared.
The resale prices have exceeded the prices of their new condo sales.
sales
Sometimes it has been higher by 70% to 110%.
However, the property investment declined as the subprime loan problem
came to light.
So, in this valuation, -25% sale condition adjustments were applied to thecomparable of which cap-rates were too low.
N t
Note:
2003 when this condominium was newly sold is the time when the averagesale price of the newly built condominiums in this area had been lowest after
the bubble economy collapsed.

SA
M

B.

18

<Average sale price in EF Ward (JPY10000/3.3sq.m.)>(JPY10000/3 3sq m )>
1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2005

2006

2007

2002

2003

2004

##### ##### 704.5 513.3 379.5 324.1 336.7 327.5 308.7 334.6 295.4 353.4 335.2

310.3

336.4 335.0 405.6 619.2

1400
1200
1000

800
600
400
200

D.

E.

Income Approach (Direct Capitalization Method)All expense was deducted from all income which would be generated from thesubject property, and the Net Operating Income (NOI) was indicated. Then the
NOI was capitalized by the appropriate capitalization rate.
And I estimated the "Value indicated by the Income Approach" to be…
..
See Sheet-Ⅴ
94,800,000.800 000 .. JPY 94

SA
M

C.

PL
E

0

Income Approach (DCF Method)
The future income, expense, capital expenditures, etc. were analysed. And thefuture cash flow which subject property would generate was indicated. Then the
Net Cash flow was discounted to the present value by the appropriate discountrate.
And I estimated the "Value indicated by the Income Approach" to be…
..
See Sheet-Ⅵ.. JPY 90,900,000.-

Reconciliation and Final Opinion of ValueAs above mentioned,
Value indicated by Cost Approach:
Value indicated by Market Approach:

19

JPY 92,100,000.JPY 92,200,000.-

Value indicated by Income Approach (Direct):
Value indicated by Income Approach (DCF):

JPY 94
94,800,000.800 000 JPY 90,900,000.-

SA
M

PL
E

Diversity resulted among indicated values.
Cost Approach was applied with comparative study of many recent land sales.
Various comparisons were performed suitably by checking the value factors.
They are credible and reliable.
reliable And building value was indicated by suitablecalculation. So, the indicated value has reliability. This indicated value isrespected in sales of owner occupied properties other than condominium inJ
Sales Comparison Method was applied with comparative study of many recent
comparables. Various comparisons were performed suitably by checking thevalue factors. They are credible and reliable. So, the indicated value reflects thereality of the market at the effective date of the valuation. This indicated value isrespected especially in owner occupied condominium unit in Japan.
Income Approach indicates the total present value of net return expected fromthe subject property in the future. It is considerably difficult to forecast the future
NOI or Net cash flow. However, it reflects the earning power in which theessence of the economic value is created. This indicated value is especiallyrespected in sales of leased fee properties in Japan. Therefore, it must betd
I re-examined each stages of valuation process objectively and critically, andreconsidered the feature of the methods and data. And, I estimated the value ofthe subject property to be:.. JPY 92,200,000.Values were divided in proportion to the value indicated by Cost Approach.
Land value ..
92,200,000
X 4279.5 ÷ 6747.0 ≒ 58,500,000
Building value .. 92,200,000
X 2467.5 ÷ 6747.0 ≒ 33,700,000(Excluding consumption tax)

20

Land Sale Comparables Analysis

Sale condit Time adjus Standard
Market Adjusted sale price Adjusted price Property
Indicated
Land valuemean
factorsions (B) tment (C) izing(D) factors (E) A×B×C×D×E
category building site
100
140
100
100
1,378,033
ＬＰ1-chome,
826.54sq.m.
1,607,705
size
100
100
100
120
JPY/sq.m.
JPY/sq.m.
ＥＦ-ku date Nov 30,2005①②
category building site
100
133
100
100
90
1,538,000
ＥＦ 1-chome,
340.85sq.m.
1,553,121
1,384,000
1,695,588
size
100
100
120
121
100
JPY/sq.m.
JPY/sq.m.
JPY/sq.m.
JPY/sq.m.
ＥＦ-ku date Aug 07,2006③④⑪
category building site
100
120
100
100
ＥＦ 4-chome,748.49sq.m.
1,319,323
1,453,800
size
100
100
90
121
JPY/sq.m.
JPY/sq.m.
ＥＦ-ku date May 10,2007⑤⑥
Gv. Published Land Price category building site
103
100
100
90
ＧＨ-cho,358.00sq.m.
1,453,846－
1,321,000
－
size
－
100
100
102
100
JPY/sq.m.
JPY/sq.m.
JPY/sq.m.
ＥＦ-ku date Jan 01,2008⑦⑧⑪
category
103
100
100
90
－
－
0
size
－
100
100
100
100
JPY/sq.m.
JPY/sq.m.
JPY/sq.m.
⑪
date Jan 01,2008⑨⑩
Property-specific value factors and standardizing (D)Market-specific value factors (E)Memoenvironstreet
accessregulation
site
total
streetaccess environ- regulation other
total
other
ment
ment
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
120
100
120
①
②
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
120
100
120
100
101
100
120
100
121
③
④
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
100
90
100
101
100
120
100
121
⑤
⑥
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
102
100
100
100
102
⑦
⑧
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
⑨
⑩
100
100
100
100
90
100
90
Memo
100
100
100
100
100
100
100
⑪

C
α
β

A
P.21
B
C
α
β

Time adjustment

01 January 2006
01 January 2007
01 January 2008～～～

31 December 2006
31 December 200708 February 2008

+ 10.3%+ 26.0%+ 2.7%

SheetⅠ- 1

Sub.L.

F
a
c
t
o
r
s

PL
E

B

Sale price
(A)

M

A

Category, size, date

SA

Location

C
o
m
p
a
r
i
s
o
n

SheetⅠ- 1

Value Factors

SheetⅠ- 2

Comparable Ａ Comparable Ｂ Comparable Ｃ Published α Published β Subject Land
Arrangement, Continuity
Pavement
Other
Station, Bus stop
Shopping centre, City office
Access
Other
Pollution, Noise
Environment Residential, Commercial
Other
Maximum floor area ratio
Administration Regulation factors
Other
Corner lot, etc.
Shape
Size
Site
Ground height

Memoranda

F
a
c
t
o
r
s

+ 20

Other

Other

M
a
r
k
e
t

Other

corner lot

- 20

+ 20

+1

+1

+ 20

+ 20

+2

SheetⅠ- 2

F
a
c
t
o
r
s

SA

P.22

Arrangement, Continuity
Pavement
Other
Station, Bus stop
Shopping centre, City office
Access
Other
Pollution, Noise
Environment Living Env., Commercial Env.
Other
Maximum floor area ratio
Administration Regulation factors
Other

Street

+ 10

- 10

M

P
r
o
p
e
r
t
y

PL
E

StreetIncome Capitalization (Land Residual Procedure)
1. Conditions of Lease
Floor
Total Area
1F
1,125.20㎡
C2F
1,081.36㎡
o942.70㎡
3F
n4F
801.15㎡di
5F664.21㎡
t596.88㎡
6F
i
518.43㎡
7F
o8F
450.81㎡

Rentable Area％
89.4%
1,006.00㎡
98.5%
1,065.43㎡
928.57㎡
98.5%
98.4%
787.99㎡
652.56㎡
98.2%
586.00㎡
98.2%
98.0%
508.09㎡
97.8%
440.96㎡

Unit Rent
Rent / Month
4,704/㎡
4,733,000
5,189,000
4,871/㎡
4,643,000
5,000/㎡
4,055,000
5,147/㎡
5,300/㎡
3,459,000
5,369/㎡
3,146,000
5,542/㎡
2,816,000
2,561,000
5,807/㎡

Sheet-Ⅱ

NR-Deposit
3,092.16 ㎡ Available Area
Site Area
3,092.16 ㎡
9,466,000
10,378,000
Condominium
Structure
9,286,000
8,110,000
Building Area
Total
6,180.74 ㎡
6,918,000
6,292,000
JPY 1,593,200,000.Building Value
5,632,000
5,122,000 Memon
In this sheet, new highest and best use building is assumed tos
be constructed.
61,204,000
6,180.74㎡ 96.7%
30,602,000
Sum
5,975.60㎡
61,204,000
4. Calculation of Expense
2. Calculation of Income
Items
Items
Calculation Process
Calculation Process
0.05
JPY 19,785,913
JPY 395,718,256 ×① Cost of repair① RentJPY 367,224,000 JPY 30,602,000 ×
12months
0.03
JPY 367,224,000 ×
JPY 11,016,720② Management fee② Interest on
JPY 4,149,403 Estimate
Land
JPY 1,836,120 JPY 61,204,000 ×
3.0%③ P. Tax
Refundable deposit
1,593,200,000 × 0.5 × 0.017
JPY 13,542,200 Estimate
Bldg③ Interest on
JPY 1,593,200 JPY 1,593,200,000 ×
0.001④ Insurance( 6years 3.0% Annual Amortization)
JPY 11,298,136
N-refundable deposit
JPY 61,204,000 × 0.184598
JPY 0⑤ C-loss-A.
JPY 16,488,261
JPY 395,718,256 × 1 ／ 24
⑥ Vacancy loss
④ Parking lot fees
JPY 40,000 ×
JPY 15,360,000
32
× 12months
0.001
JPY 1,593,200 JPY 1,593,200,000 ×⑦ Replacement-A.
JPY 0⑤ Charges for⑧ Other expense
JPY 0
JPY 0
⑨ Other expense
Common area
Unit price / Site
JPY 22,046/㎡⑥ Total⑩ TotalJPY 395,718,256
JPY 68,168,897
17.2 ％（①～⑤）（①～⑨）
Expense Ratio
3. Interest Rates
5. NOI (Building)ｒ ： Basic Rate
5.0 %ｇ ： Growth Rate
0.0 %Calculation Process
Items
Building Value
JPY
257,000/㎡①
Buildingａ ： Frame
× 6,180.74 ㎡
80 %40.0 year
na ： Economic Life (Frame)
JPY 1,593,200,000
Initial Investment（F.Value／B.Value）
× （ 1 + 0.003 ）ｂ ： Installations
Frame
Installations②
PI-increasing
nb ： Economic Life (Install.)
15.0 year
0.0658908
20 %（I.Value／B.Value）
Amortization rate
0.058278 × 80 % ＋ 0.096342 × 20 %③ Building
1.0 yearm ： Construction term
JPY 104,977,223
NOI （①×②）

SA

P.23

M

PL
E

R-Deposit
9,466,000
10,378,000
9,286,000
8,110,000
6,918,000
6,292,000
5,632,000
5,122,000

6. Value indicated by Income Approach
NOI (Income - Expense)
NOI (Building)
NOI (Land)(A) - (B)
0.94493
NOI (Land)(C
on account of construction term .. (rate)

=
=
=
＝

JPY 327,549,359.JPY 104,977,223.JPY 222,572,136.JPY 210,315,089.-

Land Value:

(D)

÷

5.0 %
（ r-g）

JPY 4,206,300,000.-≒（

JPY 1,360,000/㎡ ）Sheet-Ⅱ

(A)
(B)
(C)
(D)

Sheet-Ⅲ
Ratio of Utility(According to the floor)②
GLA(sq.m.)③
Utility
Product
①×②

1.161
1.108
1.074
1.060
1.029
1.000
0.974
0.941

440.96㎡
508.09㎡
586.00㎡
652.56㎡
787.99㎡
928.57㎡
1,065.43㎡
1,006.00㎡
5,975.60㎡

512.162563.123629.239691.734
811.091928.570
1,037.869
946.541
6,120.328
0.000
6,120.328

5,975.60㎡④
Others(sq.m.)

0.00㎡
0.00㎡

SA
M

8F
7F
6F
5F
4F
3F
2F
1F
s.sum
other
sum

①
Floor
Amenity⑤
Utility
Product①×④⑥
Utility
Product
③＋⑤

0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000

⑥
UtilityRatio⑥÷⑥sum512.16563.12629.24691.73811.09928.57
1,037.87
946.54
6,120.33
0.00
6,120.33

0.083682
0.092009
0.102811
0.113022
0.132524
0.151719
0.169577
0.154655
0.999999
0.000000
0.999999⑤
Utility
Product
①×④
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000

⑥
Utility
Product
③＋⑤
83.83
71.34
71.98
72.62
63.45
89.57
65.62
79.37

⑥
UtilityRatio⑥÷⑥sum0.140242
0.119348
0.120416
0.121484
0.106137
0.149832
0.109767
0.132774

0.000
0.000
0.000

597.770.00
597.771.000000
0.000000
1.000000

PL
E

Floor

(According to the situation on the floor)

No.

601
602
603
604
605
606
607
608

s.sum
other
sum

①
Direction
Amenity
1.081
0.982
0.991
1.000
0.996
1.095
0.977
1.019

②
GLA
(sq.m.)

77.54㎡
72.62㎡
72.62㎡
72.62㎡
63.73㎡
81.83㎡
67.13㎡
77.91㎡

586.00㎡
586.00㎡③
Utility
Product①×②
83.83371.34371.98272.62063.44689.56665.61679.369597.7750.000
597.775④
Others(sq.m.)

0.00㎡
0.00㎡

P.24

Condo Sale Comparables Analysis

Sheet-Ⅳ

Effective Date: 08/Feb/2008

①
②
③
④
⑤

Sale price82,250,000
72,000,000
95,500,000
75,000,000
89,200,000

／
／
／
／
／

(JPY)

GLA
72.62
63.73
81.83
67.13
77.91

≒
≒
≒
≒
≒

Unit price
1,132,608
1,129,766
1,167,054
1,117,235
1,144,911

Value factors

Items

F
to stationT～6 min.

～10 min.

～15 min.

5～10 min.
0～3 min.
0
Fee simple
0

0

-5

-13
～20 min.
-10～15 min.
-16
Leasehold-10～15 min.
-5～6 min.
～10 min.
-3-8
Surface right-5

Actual age

Floor location

Com
②

Com
③

Com
④

Com
⑤

ａ
＋
ｂ

PL
E

Leasehold/Fee simple～3 min.

Com①）

B to bus stopU
S to station

Sub（

Location

All comparables are in the same condominium project.

(JPY/sq.m.)(sq.m.)

-1.0

-1.0

-1.0

7.4

10.8

6.0

6.0

0.0

-2.6

7.4
months

9.8
11

5.0
11

5.0
8

0.0
4

-2.6
0

SA
M

(See: Ratio of Utility)

Direction/view/room(See: Ratio of Utility)

Not good
Not so good
50
Not good
Not so good
6
3
Not good
Not so good
6
3
Not good
Not so good
0
-2.5
0㎡～
5㎡～
10㎡～
-3
-1.5
0

Environment

Design/Construction

Sunshine/Ventilation
Noise/Vibration

Common elements/rec.

Normal-3
Normal0Normal0Normal
-5
20㎡～
3

Good
-5
Good
-3
Good
-3
Good
-10
30㎡～
6

Very good-10
Very good-6
Very good-6
Very good-15
40㎡～ 50㎡～
8
10

Other value factors
sumTime adjustment

sale price

①
②
③
④
⑤

sale condition

1,132,608 ／㎡ ×
1,129,766 ／㎡ ×
1,167,054 ／㎡ ×
1,117,235 ／㎡ ×
1,144,911 ／㎡ ×time adjustment

100 ％ ×100 ％ ×100 ％ ×100 ％ ×100 ％ ×100.0 ％ ×100.0 ％ ×100.0 ％ ×100.0 ％ ×100.0 ％ ×

1,183,561 (JPY/sq.m.)％above adjustment

107.4 ／
107.4 ／
107.4 ／
107.4 ／
107.4 ／

109.8 ≒
105.0 ≒
105.0 ≒
100.0 ≒
97.4 ≒
Average:

Indicated value:

0.0

×

P.25

1,107,315 (JPY/sq.m.)
1,155,326 (JPY/sq.m.)
1,193,457 (JPY/sq.m.)
1,199,672 (JPY/sq.m.)
1,262,037 (JPY/sq.m.)
1,183,561 (JPY/sq.m.)

77.91 sq.m. ≒JPY 92,200,000.-

Income Capitalization (Direct Capitalization Method)
1. Conditions of Lease
Floor
Total Area
Unit Rent％ Rentable Area
Rent / Month C-Common Area
77.91㎡
77.91㎡
JPY 15,000
34F
100.0%
JPY
5,495/㎡ JPY 428,115
C
o
n
d
i
t
i
o
n
s

R-Deposit
JPY 856,230

Sheet-Ⅴ

Site Area

Available Area

Structure㎡

Condominium unit

Building Area

Total

77.91 ㎡
JPY 20,710,897.-

Reproduction Cost

JPY 0

④ Parking lot fees

JPY 0

⑤ Other income

JPY 0
JPY 0

⑥ Vacancy/Collection loss
Operating income（①～⑥）
4. WACC

JPY 5,095,822

Cost of Equity

8.5%

Cost of Debt （long term）

3.0%

Weighted Average
Cost of Capital

4.7%-JPY 221,558

JPY 428,115
Calculation Process

JPY 428,115 ×

12months

JPY 15,000 ×

12months

JPY 40,000 ×

0×

JPY 15,000
JPY 856,230
3. Calculation of Expenses
Items① M/Management② W/Other utilities③ Cost of repair④ P.M.fee⑤ L-commissions
Land⑥ P. Tax
Bldg
12 ヶ月
D.A.
⑦ Insurance

M

P.26

③ W/S/E/Other utilities

77.91㎡⑧ Other expenses

JPY 5,317,380 × 1 ／ 24

SA

Sum
77.91㎡ 100.0%
2. Calculation of Income
Items① Contract
JPY 5,137,380/Market rents② Charges for
JPY 180,000
Common area

PL
E

Memo

Operating expenses（①～⑥）

JPY 180,000
JPY 0
JPY 120,000
JPY 0
JPY 0
JPY 54,100
JPY 176,300
JPY 0
JPY 20,711
JPY 0
JPY 0
JPY 0

Calculation Process
JPY 15,000 ×
12
JPY 0 ×12
JPY 10,000 ×
12
JPY 0 ×12
Actual due
Actual due
Actual due
JPY 20,710,897
JPY 0
JPY 0
JPY 0

×
×
×
×

0.001
12
12
12

JPY 551,111

Weight of Equity

30 %Risk-free rate

1.5%

Weight of Debt

70 %Real estate premium

3.5%

Other risks

3.5%

Operating expense ratio:

Cost of Equity

8.5

10.8 ％%

5. Net Operation Cash Flow
Net Operating Income
Interest on R-deposit
1.5%
Levelled Capital Expenditure
Net Operating Cash Flow

＝
＝
＝
＝

JPY 4,544,711
JPY 12,843
JPY 102,748
JPY 4,454,806

Indicated Value:

(D)

÷

4.7 %

≒

JPY 94,800,000.-

Sheet-Ⅴ

(A)
(B)
(C)
(D)

Income Capitalization (DCF Method)

Sheet-Ⅵ（JPY）

CategoryYear

1st year

2nd year

3rd year

4th year

5th year

6th year

7th year

8th year

9th year

10th year

10th year

IncomeContract/Market rents

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

5,137,380

Charges for Common area

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

W/S/E/ Other utilities

0

0

0

0

0

0

0

0

0

0

0

Parking lot fees

0

0

0

0

0

0

0

0

0

0

0

Other income

0

0

0

0

0

0

0

0

0

0

0

-221,558-221,558-221,558-221,558-221,558-221,558-221,558

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

5,095,822

Maintenance/Management

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

180,000

W/S/E/ Other utilities

0

0

0

0

0

0

0

0

0

0

0

Cost of repair

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

120,000

Property management fee

0

0

0

0

0

0

0

0

0

0

0

0

-221,558-221,558-221,558-221,558

PL
E

Vacancy/Collection loss
Total operating income
Expense

0

0

0

0

0

0

0

0

0

0

54,10054,10054,10054,10054,10054,10054,10054,10054,10054,100Property tax for Bldg

176,300

176,300

176,300

176,300

176,300

176,300

176,300

176,300

176,300

176,300

176,300

Property tax for D.A.

0

0

0

0

0

0

0

0

0

0

0

Insurance

20,711

20,711

20,711

20,711

20,711

20,711

20,711

20,711

20,711

20,711

20,711Other expenses

M054,100

0

0

0

0

0

0

0

0

0

0

0

Total operating expenses

0551,111551,111551,111551,111551,111551,111551,111551,111551,111551,111551,111

Net operating income

04,544,711

4,544,711

4,544,711

4,544,711

4,544,711

4,544,711

4,544,711

4,544,711

4,544,711

4,544,711

4,544,711

10.8%

10.8%

10.8%

10.8%

10.8%

10.8%

10.8%

10.8%

10.8%

10.8%

10.8%

12,843

12,843

12,843

12,843

12,843

12,843

12,843

12,843

12,843

12,843

12,843Operating expense ratio
Interest on R-deposit
Levelled capital expenditure

102,748

102,748

102,748

102,748

102,748

102,748

102,748

102,748

102,748

102,748

102,74804,454,806

4,454,806

4,454,806

4,454,806

4,454,806

4,454,806

4,454,806

4,454,806

4,454,806

4,454,806

4,454,806

1.0000000

0.9569378

0.9157300

0.8762966

0.8385613

0.8024510

0.7678957

0.7348285

0.7031851

0.6729044

0.6439277

0.6439277

04,262,973

4,079,400

3,903,732

3,735,628

3,574,764

3,420,827

3,273,519

3,132,554

2,997,659

2,868,573

Net operating cash flow
Discount factor

SA

P.27

Leasing commissions
Property tax for Land

PV of NOC
Total PV of NOC

JPY 35,249,628.-

Resale value

PV of Reversion value

JPY 55,650,319.-

Sale costs

Indicated Present value

JPY 90,900,000.-(Total PV of Net Income + PV of Reversion)

Discount rate

4.5%Standard rate

Terminal risk rate

0.5%

5.0%
-0.3%
-0.2%
0.0%
0.0%
4.5%
(Discount rate is indicated by reflecting above premiums on the standard rate which derived from comparable sales data.)

89,096,128
3.00%

Reversion+ Area+ Bldg. age+ Grade+ State= Discount rate

2,672,884
086,423,244

Sheet-Ⅵ

Demolition / T-removal

Rent Comparables(Dwellings)

1

Agreed Same condo

77.54sq.m

834.64sq.f. dwelling

2

Agreed Same condo

72.62sq.m

781.68sq.f. dwelling

3

Agreed Same condo

72.62sq.m

781.68sq.f. dwelling

4

Agreed Same condo

72.62sq.m

781.68sq.f. dwelling

5

Agreed Same condo

63.73sq.m

685.99sq.f. dwelling

6

Agreed Same condo

81.83sq.m

880.82sq.f. dwelling

7

Agreed Same condo

67.13sq.m

722.59sq.f. dwelling

8

Agreed Same condo

77.91sq.m

9Agreed Same condo

77.91sq.m

Nearby to station
Station on foot

10

Area

Use

Floor

Frame

Bldg.
Story

Bldg.
Age

Rent
per monthRC

8F

5 y.o.

JPY343,225

Charge for
Common Area
JPY15,000

Total Rent
per month

Total Rent per month
per sq.m.

Refundable Deposit
Deposit/Rent

JPY358,225

JPY4,620/sq.m.

JPY686,449

2.0 mo.

RC

8F

5 y.o.

JPY341,639

JPY15,000

JPY356,639

JPY4,911/sq.m.

JPY683,278

2.0 mo.

RC

8F

5 y.o.

JPY351,654

JPY15,000

JPY366,654

JPY5,049/sq.m.

JPY703,309

2.0 mo.

RC

8F

5 y.o.

JPY366,081

JPY15,000

JPY381,081

JPY5,248/sq.m.

JPY732,163

2.0 mo.

RC

8F

5 y.o.

JPY299,816

JPY15,000

JPY314,816

JPY4,940/sq.m.

JPY599,633

2.0 mo.

RC

8F

5 y.o.

JPY396,253

JPY15,000

JPY411,253

JPY5,026/sq.m.

JPY792,506

2.0 mo.

RC

8F

5 y.o.

JPY351,508

JPY15,000

JPY366,508

JPY5,460/sq.m.

JPY703,017

2.0 mo.

838.62sq.f. dwellingRC

8F

5 y.o.

JPY377,271

JPY15,000

JPY392,271

JPY5,035/sq.m.

JPY754,542

2.0 mo.

838.62sq.f. dwellingRC

8F

5 y.o.

JPY366,526

JPY15,000

JPY381,526

JPY4,897/sq.m.

JPY733,051

2.0 mo.

M

Location

PL
E

Agreedor notNo.

Agreedor notRent/sq.m.

ConditionTimeadjust.

Standardizing

Marketspecific

Adjusted Rent

3

Agreed5,049/sq.m.

100%

100%

97%

100%

4,898/sq.m.

4

Agreed5,248/sq.m.

100%

100%

SA

P.28

No.
on
map

Sheet-Ⅶ

95%

100%

4,986/sq.m.

7

Agreed5,460/sq.m.

100%

100%

95%

100%

5,187/sq.m.

Average

Property-specificIndicated Rent

Rentable Area

Indicated Rent

5,024/sq.m.

109%

JPY5,495/sq.m.

77.91 sq.m.

JPY428,115.-*Note.

*Note.

Sheet-Ⅶ*Note.
*Note.
Indicated rent

M. fee & R. cost deduction

Modified indicated rent

JPY428,115

100.0%JPY428,115.-

Since this report is a sample, following pages are intentionally excluded.
.. App. 01.. App. 02.. App. 03.. App. 04.. App. 05.. App. 06.. App. 07.. App. 08.. App. 09.. App. 10.. App. 11.. App. 12

SA
M

PL
E

City Map (Land Comparables)
Aerial Photographs
Topography Map
Residential Map
Public Sectional Map
Registered Land Surveyed Map
Registered Building Drawings
Building Drawings (Subject floor)
Copy of Road Register Book
Document of Building Confirmation
Copy of Public Registry Book
Photographs