<Translation of Japanese Original>
March 18, 2020
For Immediate Release
REIT Issuer
Hankyu Hanshin REIT, Inc. (Securities Code: 8977)
19-19 Chaya-machi, Kita-ku, Osaka
Yoshiaki Shiraki, Executive Director
Asset Management Company
Hankyu Hanshin REIT Asset Management, Inc.
Yoshiaki Shiraki, President & Representative Director
Contact:
Kiyotaka Okano
General Manager, Financial and IR Department
Email: IR_PR@hhram.co.jp
Notice Concerning Acquisition of Domestic Real Estate, and Transfer of Domestic Real Estate Trust
Beneficiary Interest and Domestic Real Estate
Hankyu Hanshin REIT, Inc. (hereafter “HHR”) hereby notifies that Hankyu Hanshin REIT Asset Management,
Inc., the asset management company that HHR has selected to manage its assets (hereafter the “AssetManagement Company”), today decided to make the following acquisition and transfer of assets.

Details
1. Overview of Acquisition and Transfer(1) Overview of Acquisition(A) nanohana Ebisubashi (site)1) Specified asset type:

Right of ownership

2) Property name:nanohana Ebisubashi (site)

3) Planned acquisition price:

4,230,000,000 yen(excluding acquisition-related expenses, property tax, city planning tax
and consumption tax, among others)4) Appraisal value:

4,310,000,000 yen (Date of appraisal: February 29, 2020)

5) Planned acquisition date:

March 31, 2020

6) Seller:

Hankyu Hanshin Properties Corp.

7) Acquisition fund:

Proceeds from funds procured from the transfer of Kohnan Hiroshima
Nakano-Higashi Store (site), new borrowings as indicated in “NoticeConcerning Debt Financing” dated today and cash on hand (planned).

(B) MANDAI Shimoshinjo Store
1) Specified asset type:

Right of ownership

2) Property name:

MANDAI Shimoshinjo Store

3) Planned acquisition price:

674,000,000 yen(excluding acquisition-related expenses, property tax, city planning tax

1and consumption tax, among others)4) Appraisal value:

704,000,000 yen (Date of appraisal: December 31, 2019)5) Planned acquisition date:

March 31, 2020

6) Seller:

Hankyu Corporation

7) Acquisition fund:

Proceeds from funds procured from the transfer of Kohnan Hiroshima
Nakano-Higashi Store (site), new borrowings as indicated in “NoticeConcerning Debt Financing” dated today and cash on hand (planned).

(C) SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)1) Specified asset type:

Right of ownership

2) Property name:SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)3) Planned acquisition price:

3,475,000,000 yen(excluding acquisition-related expenses, property tax, city planning tax
and consumption tax, among others)4) Appraisal value:

3,510,000,000 yen (Date of appraisal: March 1, 2020)

5) Planned acquisition date:

May 28, 2020

6) Seller:

NIPPON STEEL KOWA REAL ESTATE CO., LTD.
NIPPON TOCHI-TATEMONO Co., Ltd.

7) Acquisition fund:

Proceeds from funds procured from the transfer of Hotel Gracery
Tamachi (planned)(2) Overview of Transfer(A) Kohnan Hiroshima Nakano-Higashi Store (site)1) Specified asset type:

Right of ownership

2) Property name:

Kohnan Hiroshima Nakano-Higashi Store (site)

3) Planned transfer price:

1,926,800,000 yen

4) Appraisal value:

1,880,000,000 yen (Date of appraisal: November 30, 2019)5) Planned transfer date:

March 19, 2020

6) Planned buyer:

Domestic business corporation (Please refer to postscript “6. Overview
of Buyer and Seller”) (Note)(Note) Not disclosed as consent has not been obtained from the transferee.

(B) Hotel Gracery Tamachi
1) Specified asset type:

Trust Beneficiary Interest

2) Property name:

Hotel Gracery Tamachi

3) Planned transfer price:① 3,879,000,000 yen (equivalent of 90% quasi co-ownership)② 431,000,000 yen (equivalent of 10% quasi co-ownership)
Total 4,310,000,000 yen

4) Appraisal value:

4,310,000,000 yen (Date of appraisal: November 30, 2019)5) Planned transfer date:① May 28, 2020
② August 28, 2020

6) Planned buyer:

NIPPON STEEL KOWA REAL ESTATE CO., LTD.
NIPPON TOCHI-TATEMONO Co., Ltd.

2

2. Reason for Acquisition and Transfer
HHR has been examining the asset replacements for improving the quality of our portfolio andcontinuously increasing distributions. As a result, it has been decided that a strategic asset replacement(hereafter the “Replacement”), in which an urban commercial facility (nanohana Ebisubashi (site) in
central Osaka and a community-based commercial facility (MANDAI Shimoshinjo Store) owned byHankyu Hanshin Holdings Group (hereafter “the Sponsor Group”) and an office building in central Tokyo(SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)) (total of three properties; hereafter
the “Three Assets Planned to be Acquired”) are acquired and a community-based retail facility owned by
HHR “Kohnan Hiroshima Nakano-Higashi (site)” and “Hotel Gracery Tamachi” (total of two properties;
hereafter the “Two Assets Planned to be Transferred) are transferred, will be conducted.
The “nanohana Ebisubashi (site)” is a development project of the Sponsor Group following the “Valor
Takatsuki Store (site)” acquired in March 2019, and is the first urban retail facility in the “Osaka Minami”
area of HHR. The property is located in a prime area (Note 1) near Namba Station (Note 2) and can
expect many customer visits. As such, HHR believes that the acquisition of the property will contribute toincreasing unitholder value.
The MANDAI Shimoshinjo Store is a development project of the Sponsor Group and is located along
the railway of the Sponsor Group. This property may not meet some of the investment criteria forcommercial facilities in the Investment Guidelines (in principle, the investment amount is above 1 billion
yen and the total floor area should be more than 3,300 m2). However, the property can achieve higher
yield than the average yield after depreciation of HHR’s portfolio (3.7%) (Note 3), is a community-based
retail facility with stable cash flows expected over the medium to long term and could contribute tostabilize the entire portfolio. As a result of the comprehensive review of the above factors, it wasdetermined that the acquisition of the property would contribute to the enhancement of unitholder value.
As the acquisition of "SHIBAURA RENASITE TOWER" (equivalent of 10% co-ownership) involves thetransfer of "Hotel Gracery Tamachi", the mutual trading transaction will take place between the transfereewith preferential negotiation rights and HHR. Since the property has high transportation convenience andis a high-spec office building that is expected to have stable cash flows in the future, it is determined thatthe acquisition of the property will contribute to the enhancement of unitholder value.
"Kohnan Hiroshima Nakano-Higashi Store (Site)" is located along Japan National Route 2 in theeastern part of Hiroshima City, and is located in a relatively good location as a commercial area. On theother hand, the property has an unrealized loss. Considering the future risks to HHR in case of continued
holding, it has been determined that the transfer of the property will contribute to strengthening thestructure of the portfolio.
"Hotel Gracery Tamachi" is a property with unrealized gain. By transferring the property coupled with
“Kohnan Hiroshima Nakano-Higashi Store (Site)”, it is possible to offset the transfer loss of “Kohnan
Hiroshima Nakano-Higashi Store (Site)” with the gain from the transfer of the property. After discussions
with the transferee with preferential negotiation rights, it was determined that the mutual tradingtransaction of “SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)” will improve thequality of the portfolio (Note 4).
Regarding the transfer of “Hotel Gracery Tamachi”, HHR plans to transfer a quasi co-ownershipequivalent of 90% on May 28, 2020 and a quasi co-ownership equivalent of 10% on August 28, 2020. As
a result, gain on sale of investment property of 659 million yen and reserve for tax purpose reduction

3

entry of 221 million yen in the fiscal period ending May 31, 2020 (the 30th fiscal period), and gain on saleof investment property of 74 million yen and reserve for tax purpose reduction entry of 57 million yen in
the fiscal period ending November 30, 2020 (31st fiscal period) are expected to be booked. HHR
believes that stabilization of future distributions will be beneficial to unitholders’ profits through the split
transfers and the internal reserves of the gain from the transfer (recording of reserve for tax purpose
reduction entry).
(Note 1) Prime area means that the location is favorable in terms of access from important transportation hubs
such as large-scale terminal stations.
(Note 2) "Namba" station is called different names depending on the railway company ("Namba (Hiragana)" station
for Osaka Metro and Nankai Electric Railway, "Namba (Kanji)" station for JR and "Osaka Namba" forHanshin Electric Railway and Kintetsu Railway).
(Note 3) The figures as of the end of the 29th period.
(Note 4) Please refer to postscript “4. Details of the Assets Planned to be Acquired and Transferred (2) Details of
Assets to be Transferred” for detail figures of loss on transfer and gain on transfer.
(Note 5) Utilizing the system of "Special provisions for taxation on replacement of specific assets" (Article 65-7 of
the act on special measures concerning taxation), it is assumed that the funding limit specified in "Rules
on calculation of investment corporations" is to be used as the reserve for tax purpose reduction entry.

HHR evaluated the following points upon deciding the acquisition of the Three Assets Planned to be
Acquired.
(A) nanohana Ebisubashi (site)
The property is an urban commercial facility located a 5-minute walk from a major terminal station,"Namba" station, which is connected to Hanshin Electric Railway, Osaka Metro (Midosuji Line,
Yotsubashi Line, Sennichimae Line), Kintetsu Railway, Nankai Electric Railway, and JR via undergroundpassages.
The property is a healthcare and cosmetics specialty Store, targeting not only overseas tourists but
also female customers in Japan.
Osaka Minami area, Shinsaibashi and Namba, where the property is located, is one of the leading
downtown areas in Japan, representing Osaka City, and is being developed in response to growing
inbound demand in recent years. The property faces the Dotonbori River, the prime spot in Osaka Minami,
and is located in a place with high visibility and wide recognition.
The end tenant of the property is Nanohana West Japan Co., Ltd. The Medical System Network Group,
including the company, is engaged in several pharmaceutical-related businesses and medical
welfare-related businesses. The group is a leader in the network of pharmaceutical wholesalers anddispensing pharmacies, as well as in the volume of business. They have a unique strength in providing a
network system developed in-house. Also, the Group has been developing two core businesses, a
medical products network business and a community-based dispensing pharmacy business centered on
Nanohana Pharmacy, and this property will be a new business.

(B) MANDAI Shimoshinjo StoreThis property is a community-based retail facility located a 10-minute walk from Shimoshinjo Station on
the Hankyu Senri Line.

4

The area around the property is a market with a high percentage of people in their 20s and 30s, as it isclose to the center of Osaka City, and is expected to continue to see development of large condominiums.
As the number of condominium developments increases, there will be a possibility that the characteristicsof the residents will also change significantly, and it is considered to be a high potential area.
MANDAI Co., Ltd., the tenant of the property, is a leading supermarket in Kansai Region. Its sales havebeen increasing at a rate of 2-6% YoY since FY02 / 10 with 155 Stores in the Kansai Region (as of June2019). This is the fourth property owned by HHR after "MANDAI Toyonaka Honan Store (site)", "MANDAI
Gojo Nishikoji Store (site)", and "MANDAI Nigawa Store (site)". MANDAI`s properties owned by HHR
have good operating records.
The property was renewed in June 2018.

(C) SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)
This property is an office building located a 4-minute walk from Tamachi Station on the JR Yamanote
Line/Keihin Tohoku Line, a 7-minute walk from Mita Station on the Toei Asakusa Line, and a 9-minute
walk from Mita Station on the Toei Mita Line.
The property has an extremely high transportation convenience as JR Yamanote Line stations withhigh business convenience are within a 5 minute walk and you can access major train stations, Haneda
Airport and Narita Airport without changing trains via Toei Subway Lines.
New developments are in progress around the property. In addition to lush greenery in thedevelopment block, there are various facilities to support people’s lives and businesses such as luxury
hotels and conference rooms, book stores, supermarkets, nursery schools, gyms, etc. Going forward,
further development is planned, which stimulates great improvement in business integration. The
evaluation of office locations around Tamachi Station and Mita Station will also drastically increase in the
future.
The property has a total floor area of 26,808.72m2 and a standard floor space for rent of about 1,000m2(Note 1). Rental rooms on the standard floor are rectangular with no pillars and the layout efficiency ofthe property is high. With the relatively old age of 11 years, HHR believes that the specifications of theproperty are sufficient for tenants considering occupancy. The property has also received CASBEE2017"S Rank" and "Minato City Local Green City Development Award" (fiscal 2010) (Note 2).
(Note 1) Both the total floor area and the floor area for standard floor rental are equivalent of 100% co-ownership.
(Note 2) The award is for the entire block including Shibaura Institute of Technology and Hotel Gracery Tamachi.

After the Replacement (planned), the average yield after depreciation of the entire portfolio is expected toremain at the same level, 3.7%, as at the end of the 29th fiscal period (ended November 2019).

5

[Status of Portfolio]
End of29th fiscal
period(endedNovember
2019)

Two assets planned to betransferred

Three assets planned to be acquired

KohnanHiroshima
Nakano-Higashi
Store (site)

Hotel Gracery
Tamachinanohana
Ebisubashi(site)

MANDAI
Shimoshinjo
Store

SHIBAURARENASITE
TOWER(equivalent of10%
co-ownership)

1 property

1 property

1 property

1 property

1 property

Date ofacquisition/transfer(planned)

March 19, 2020

May 28, 2020
(equivalent of
90% quasi
co-ownership)
August 28,
2020(equivalent of
10% quasi
co-ownership)

March 31,2020

March 31,2020

May 28, 2020

Acquisition/transfer
price (planned)

1,926.8
million yen

4,310
million yen

4,230
million yen

674
million yen

3,475
million yen

Number ofproperties

30
properties

Afterplannedasset
replacement(Note 3)31
properties

Asset scale

167,435
millionyen(Average) NOI
yield (Note 1)

4.9%

5.7%

4.4%

3.5%

4.9%

3.6%

4.9%

3.7%

5.7%

2.8%

3.5%

4.4%

3.1%

3.7%

(Average) yield
after depreciation(Note 1)
Unrealized
gain/loss(Note 2)

169,479
million yen

31,333
-400
778
42
12
-15
31,650
millionmillion yen
million yen
million yen
million yen
million yen
million yen
yen(Note 1) (Average) NOI yield is calculated by dividing the sum total of (a) the difference between the real estate lease
operation income and real estate lease operation expenses of each property and (b) depreciation, by totalacquisition planned price. (Average) yield after depreciation is calculated by dividing the sum total of difference
between the real estate lease operation income and real estate lease operation expenses of each property, by
total acquisition planned price. (Average) NOI yield and (Average) yield after depreciation are calculated basedon the following figures.
・End of 29th fiscal period:
Actual figures for the 29th fiscal period.
・2 assets to be transferred:
Actual figures for the 29th fiscal period.
・3 assets to be acquired:
For all properties, operating revenues and operating costs using
the DCF method as indicated in the appraisal report are used.
・After the Replacement (planned): Figures after adding the figures of the Two Assets Planned to beTransferred and the Three Assets Planned to be Acquired tothe actual figures for the 29th fiscal period(Note 2) Unrealized gain/loss indicates the difference between the appraisal value and the book value and is calculated
based on the following figures.
・2 Assets to be transferred:
Actual figures for the 29th fiscal period.
・3 Assets to be acquired:Figures calculated based on the book value (expected value) which are
the total of the acquisition price (planned) and acquisition expenses thatare to be recorded as assets pursuant to the accounting policy of Hankyu
Hanshin REIT.
・After the Replacement (planned): Figure obtained by adding/subtracting unrealized gain/loss of the Asset
Planned to be Transferred and the Three Assets Planned to be Acquired
as well as expected capital expenditures and depreciation in the 30th and31st fiscal periods to/from unrealized gain/loss at the end of the 29th
fiscal period.
(Note 3) The figures after the Replacement (planned) are figures considering only the transfer of the Asset Planned to beTransferred and the acquisition of the Three Assets Planned to be acquired (as for unrealized gain/loss,
expected capital expenditures and depreciation in the 30th and 31st fiscal periods are also added/subtracted)
after the end of the 29th fiscal period and may differ from actual figures.

6

3. Use of the transfer price
The use of the transfer price of “Kohnan Hiroshima Nakano-Higashi Store (Site)”, scheduled on March 19,
2020, will be used to fund the acquisition of “nanohana Ebisubashi (Site)” and “MANDAI ShimoShinjo
Store”. The use of the transfer price of “Hotel Gracery Tamachi” (equivalent of 90% quasi co-ownership)scheduled on May 28, 2020 will be based on the acquisition funds for “SHIBAURA RENESITE TOWER(equivalent of 10% co-ownership)”. With regards to the use of the transfer price of the property (equivalentof 10% quasi co-ownership) to be transferred on August 28, 2020, we plan to replenish our own funds oruse it to fund the acquisition of future specified assets.

4. Details of the Assets Planned to be Acquired and Transferred1) Details of Assets Planned to be Acquired(A) nanohana Ebisubashi (site)
Property namenanohana Ebisubashi (site)

Specified asset type
Planned acquisition

Right of ownership
4,230,000,000 yen

priceAppraisal value

4,310,000,000 yen (Date of appraisal: February 29, 2020)(Appraisal organization: DAIWA REAL ESTATE APPRAISAL CO., LTD.)

Location Lot Number

2-4-5 Shinsaibashisuji, Chuo-ku, Osaka City

Building
coverage
Floor area
ratio
Land

Month/
80%

Year built
Structure/

500%

Zone use

Commercial district

Site area

302.40m2

FloorsBuilding Use
Total floor
area
Form ofForm ofownership

Right of ownershipownership

―
―
―
―
―

Property manager

Hankyu Hanshin Building Management Co., Ltd. (Planned)

Collateral

None

Other matters to note

・HHR is scheduled to own only the land.

(B) MANDAI Shimoshinjo Store
Property name

MANDAI Shimoshinjo StoreSpecified asset type
Planned acquisition

Right of ownership
674,000,000 yen

priceAppraisal value

704,000,000 yen (Date of appraisal: December 31, 2019)(Appraisal organization: Japan Real Estate Institute)

Location Lot Number

3-10-22 Shimoshinjo, Higashiyodogawa-ku, Osaka City

Building
coverageLand

Month/
60%

Year built

Floor area
ratio
Zone use

Building Structure/
Floors200%
Quasi-industrial area

Use

7

December 1998
Steel frame structureroof / 2 floors
ShopSite area

Total floor

2,211.56m2

areaForm ofForm ofownership
Design company
Construction company
Building recognition
organization
Property manager
Earthquake PML(evaluators)

Right of ownershipownership

1,550.65m2
Right of ownership

Hankyu Engineering (Time of new construction)
Hankyu Sekkei Consultant (Time of extension)Mori-Gumi Co., Ltd.
Osaka City
Hankyu Hanshin Building Management Co., Ltd. (Planned)
5.3% (ERS Corporation and OYO RMS Corporation)

Collateral

None

Other matters to note

None(C) SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)
Property nameSHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)

Specified asset type
Planned acquisition

Right of ownership
3,475,000,000 yen

priceAppraisal value

3,510,000,000 yen (Date of appraisal: March 1, 2020)(Appraisal organization: Richi Appraisal Institute Co., Ltd.)

Location Lot Number

3-9-1 Shibaura, Minato-ku, Tokyo

Building
coverageMonth/
60%

Year built

Floor area
ratio

Structure/
400%

FloorsLand

Building
Zone use
Site area

Use

Office, parking lot

3,216.78m2 (equivalent

Total floor

26,808.72m2 (equivalentof 100% co-ownership)areaof 100% co-ownership)Form ofRight of ownershipownership

Design company

TODA CORPORATION, Nikken Sekkei Ltd.

Construction company
Building recognition

TODA CORPORATION

organization
Property manager
Earthquake PML(evaluators)
Collateral

Steel-frame, steel-frame
reinforced concrete andconcrete structure withflat roof/19floors with 2
underground floors

Quasi-industrial area

Form ofownership

March 2009

Right of ownership

The Building Center of JapanNIPPON STEEL KOWA REAL ESTATE CO., LTD. (Planned)
2.0% (ERS Corporation and OYO RMS Corporation)None

8Other matters to note

・The transaction agreement for the acquisition corresponds to a forward
commitment, etc. (referring to transaction agreements dated forward inwhich settlement and handing over of property is conducted more than
one month after the conclusion of the agreement, and other relatedagreements) stipulated in the Comprehensive Guidelines forSupervision of Financial Instruments Business Operators, etc. Also, if
HHR acts in serious violation of the terms of the transaction agreement(Including cases where it was found that the representations andindemnifications under the sales contract were incorrect or incorrect inimportant respects), the seller may cancel the agreement. It has been
agreed that if the agreement is cancelled in such a situation HHR shall
pay the seller an amount equivalent to 20% of the sale price as apenalty. However, it is the premise of HHR's obligation to pay the trading
value that the transfer of the quasi co-ownership interest of Hotel
Gracery Tamachi scheduled to be transferred on May 28, 2020
(equivalent of 90% ownership) is objectively assured. The plannedtransfer price of the quasi co-ownership interest (equivalent of 90%
ownership) of Hotel Gracery Tamachi, which is a condition and isscheduled to be transferred on May 28, 2020, exceeds the planned
acquisition price of the property.
・The target land and the adjacent land are certified as one complex basedon the Building Standards Law, and certain regulations of the BuildingStandards Law, such as floor area ratio and building coverage, will beapplied assuming that the whole estate is the site of the target property.
According to the agreement concluded with the neighboring land ownerregarding the single housing complex certification, ( ⅰ ) preferential
negotiation right to sell the subject real estate is granted to theneighboring land owner, and (ⅱ) it is agreed to obtain the writtenconsent of the owner of the neighboring land in case of rebuilding of thesubject building and making changes to the permit from the government.

(2) Details of Asset to be Transferred(A) Kohnan Hiroshima Nakano-Higashi Store (site)
Property nameSpecified asset type
Proposed transfer price

Kohnan Hiroshima Nakano-Higashi Store (site)
Right of ownership
1,926,800,000 yen

Appraisal value
Book Value

1,880,000,000 yen (Date of appraisal: November 30, 2019)(Appraisal organization: The Tanizawa Sogo Appraisal Co., Ltd.)2,280,000,000 yen (Note 1)

Gain/loss on transfer–401,000,000 yen (expected amount)

Location (Address)
Acquisition date
Building
coverage
Floor area

7-28-1 Nakano-higashi, Aki-ku, Hiroshima City
October 2, 2006
Month/
60%―
Year built
Structure/200%―
Floors
Quasi-industrial
Building Use―
area
Total floor
25,529.73m2―
areaForm ofRight of ownership―ownership

ratio
Land

Zone use
Site area

Form ofownership
Tenant details
Total number oftenants
Total rent income
Security deposits
Leasable area
Leased area

1
137 million yen (Note 2)
127 million yen (Note 3)
25,529.73m2
25,529.73m2

9Occupancy rate
Other matters to note

100.0%
・HHR owns only the land.
・Of the target land, lot number 4363-3 (area 25.65m2) has an easement
for transmission lines established by Chugoku Electric Power Co., Inc.

(Note 1) The figure (expected value) as of March 19, 2020 is indicated with amounts rounded down to the nearest
million yen.
(Note 2) The total of actual figures for the 28th fiscal period (ended May 2019) and 29th fiscal period (ended
November 2019) is indicated.
(Note 3) The total of amounts shown in the lease agreements as of today is indicated.

(B) Hotel Gracery Tamachi
Property nameSpecified asset type
Proposed transfer priceAppraisal value
Book Value

Gain/loss on transfer
Location (Address)
Acquisition date
Building
coverage
Floor area
ratio
Land
Zone use
Site area
Form ofownership
Tenant details
Total number oftenants
Total rent income
Security deposits
Leasable area
Leased area
Occupancy rate

Other matters to note

Hotel Gracery Tamachi
Trust beneficiary interest①
3,879,000,000 yen②
431,000,000 yen
Total 4,310,000,000 yen
4,310,000,000 yen (Date of appraisal: November 30, 2019)(Appraisal organization: Richi Appraisal Institute Co., Ltd.)①

3,149,000,000 yen (equivalent of 90% quasi co-ownership) (Note 1)
348,000,000 yen (equivalent of 10% quasi co-ownership) (Note 2)
Total 3,497,000,000 yen②①
659,000,000 yen (expected amount)②
74,000,000 yen (expected amount)
Total 733,000,000 yen (expected amount)
3-8-1 Shibaura, Minato-ku, Tokyo
December 25, 2008
Month/
60%
September 2008
Year built
Reinforced concrete,
Structure/ Steel-frame reinforced
400%
concrete, steel structure
Floorsroof / 11 floors
Building
Quasi-industrial
Use
Hotel, parking lot
area
Total floor
1,724.01m2
4,979.95m2
area
Right ofForm ofRight of ownershipownershipownership
1 (Note 3)
225million yen (Note 4)
Undisclosed (Note 5)
4,943.66m2
4,943.66m2
100.0%
・The transaction agreement for the acquisition corresponds to a forward
commitment, etc. (referring to transaction agreements dated forward inwhich settlement and handing over of property is conducted more than
one month after the conclusion of the agreement, and other relatedagreements) stipulated in the Comprehensive Guidelines forSupervision of Financial Instruments Business Operators, etc. Also, if
HHR acts in serious violation of the terms of the transaction agreement(Including cases where it was found that the representations andindemnifications under the sales contract were incorrect or incorrect inimportant respects), the buyer may cancel the agreement. It has been
agreed that if the agreement is cancelled in such a situation HHR shall
pay the buyer an amount equivalent to 20% of the sale price as apenalty.
・The target land and the adjacent land are certified as one complex
based on the Building Standards Law, and certain regulations of the10Building Standards Law, such as floor area ratio and building coverage,
will be applied assuming that the whole estate is the site of the target
property. According to the agreement concluded with the neighboring
land owner regarding the single housing complex certification, (ⅰ) trust
beneficiary right or preferential negotiation right to sell the subject realestate is granted to the neighboring land owner, and (ⅱ) it is agreed toobtain the written consent of the owner of the neighboring land in caseof rebuilding of the subject building and making changes to the permit
from the government.
(Note 1) The figure (expected value) as of May 28, 2020 is indicated with amounts rounded down to the nearest
million yen.
(Note 2) The figure (expected value) as of August 28, 2020 is indicated with amounts rounded down to thenearest million yen.
(Note 3) Parking lot is not included.
(Note 4) The total of actual figures for the 28th fiscal period (ended May 2019) and 29th fiscal period (ended
November 2019) is indicated.
(Note 5) Not disclosed as tenant's consent has not been obtained.

5. Overview of Leasing(1) nanohana Ebisubashi (site)
Total number of tenants

1

Principal tenant

Hankyu Hanshin Properties Corp.

Annual rent

153 million yen

Leasable area

302.40m2

Leased area

302.40m2

Occupancy rate

100.0%

Security deposits

76 million yen(2) MANDAI Shimoshinjo Store
Total number of tenants

1

Principal tenant

MANDAI Co., Ltd.

Annual rent

Undisclosed (Note)

Leasable area

1,608.65m2

Leased area

1,608.65m2

Occupancy rate

100.0%

Security deposits

Undisclosed (Note)(Note) Not disclosed as tenant's consent has not been obtained.

(3) SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)
Total number of tenants

10 (Note 1)

Principal tenant

Undisclosed (Note 2)

Annual rent

Undisclosed (Note 2)

Leasable area

1,833.96m2 (Note 3)

Leased area

1,833.96m2 (Note 3)

Occupancy rate

100.0%

11

Security deposits

Undisclosed (Note 2)(Note 1) Parking lot not included.
(Note 2) Not disclosed as tenant's consent has not been obtained.
(Note 3) Leasable area and leased area are areas equivalent to the 10% co-ownership.

6. Overview of Buyer and Seller(1) Overview of Sellers(A) nanohana Ebisubashi (site)
Name

Hankyu Hanshin Properties Corp.

Location

Hankyu Terminal Building 1-1-4 Shibata, Kita-ku, Osaka City

Title and name ofrepresentative

Tsuneo Wakabayashi, President and Representative Director

Main business activities

Sale of land, residences and condominiums, land utilization, brokerage andmediation for real estate, extension/reconstruction and renovation and leasemanagement of land and buildings

Capital12,426 million yen (as of April 1, 2019)

Date of establishment

February 17, 1947

Net assets and total
assets in theimmediately preceding
fiscal year
Major shareholders andNet assets:

144,355 million yen

Total assets:

431,971 million yen

their shareholding ratio(as of March 31, 2019)
Hankyu Hanshin Holdings, Inc. 100.0%
A unitholder of HHR (investment unit holding ratio: 3.22%). It
is the parent company of the Asset Management Company
Capitalrelationships(investment unit holding ratio: 100%) and falls under the
category of interested parties, etc. as defined in the Act on
Investment Trusts and Investment Corporations (Act No. 198of 1951) (hereinafter referred to as the “Investment TrustAct”).

Personnel
relationships

There are no personnel relationships to be noted between
HHR or the Asset Management Company and the seller (asof today).

Relationship between
HHR or the AssetManagement Company
and the Company

Business relationships with HHR:Management fees: 1,031 thousand yen
Rent paid: 557 thousand yen(29th fiscal period (June 1, 2019 to November 30, 2019))
Business

Businessrelationships

Company:

relationships

with

the

Asset

Management

Rent paid: 53,992 thousand yen(Previous fiscal year (April 1, 2018 to March 31, 2019))
Besides the above, the seller has concluded an information
sharing-related agreement with the Asset Management
Company.
Applicability to

The parent company of the Asset Management Company

related parties(100% ownership) and is a related party.

12

(B) MANDAI Shimoshinjo Store
Name

Hankyu Corporation

Location

1-1 Sakae-machi, Ikeda City, Osaka Prefecture

Title and name ofrepresentative

Takehiro Sugiyama, President and Representative Director

Main business activities

Urban transportation business, real estate business and entertainment business

Capital

100 million yen (as of March 31, 2019)

Date of establishment

October 19, 1907

Net assets and total
assets in theimmediately preceding
fiscal year

Net assets:

224,386 million yen

Total assets: 1,009,805 million yen(as of March 31, 2019)

Major shareholders andtheir shareholding ratio

Hankyu Hanshin Holdings, Inc. 100.0%
The seller is a subsidiary of the parent company of the Asset
CapitalManagement Company’s parent company and thus falls

relationships

under interested parties, etc., as defined in the Investment
Trusts Act.
One director/employee has been seconded to the AssetManagement Company and serves as President andPersonnel

Representative Director of the Asset Management Company

relationships

and Executive Director of HHR.
Two directors/employees concurrently hold positions at theRelationship between
HHR or the AssetManagement Company
and the Company

Asset Management Company (as of today).
Business relationships with HHR:
Rental income: 1,224,753 thousand yen
Rent paid: 13,939 thousand yen
Business(29th fiscal period (June 1, 2019 to November 30, 2019))

relationships

Businessrelationships

with

the

Asset

Management

Company:
The seller has concluded an information sharing-relatedagreement with the Asset Management Company.
Applicability to

A subsidiary of the parent company of the Asset Management

related parties

Company and is a related party.

(C) SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)Name

NIPPON STEEL KOWA REAL ESTATE CO., LTD.

Location

1-8-1 Akasaka, Minato-ku, Tokyo

Title and name ofrepresentative

Yasuhiko Imaizumi, President and Representative Director
Development, leasing and management of office buildings. Development, sale,

Main business activities

and leasing of condominiums and detached houses. Development, leasing, andmanagement of logistics facilities and commercial facilities, etc. Leasing andmanagement of luxury condominiums for foreigners. Real estate sales,13brokerage, appraisal and consulting. Planning and investment in real estate
securitization products.
Capital19,824 million yen (as of March 31, 2019)

Date of establishment

March 24, 1997

Net assets and total
assets in theimmediately preceding
fiscal year

Net assets:

165,263 million yen

Total assets:

785,758 million yen

Major shareholders and

NIPPON STEEL & SUMITOMO METAL CORPORATION

their shareholding ratio

31, 2019) (Note)

Relationship between
HHR or the AssetManagement Company
and the Company(as of March 31, 2019)45.0% (as of March

CapitalThere are no capital relationships to be noted between HHR

relationships

or the Asset Management Company and the seller

Personnel

There are no personnel relationships to be noted between

relationships

HHR or the Asset Management Company and the seller

Business

There are no business relationships to be noted between

relationships

HHR or the Asset Management Company and the seller

Applicability torelated parties

Not a related party(Note) This company changed its name to NIPPON STEEL CORPORATION as of April 1, 2019.

Name

NIPPON TOCHI-TATEMONO Co., Ltd.

Location

1-4-1 Kasumigaseki, Chiyoda-ku, Tokyo

Title and name ofrepresentative

Tetsuro Hiramatsu, President and Representative Director
Development, leasing and management of office buildings, commercial facilities
and logistics facilities, etc. Development, sales and leasing of condominiums

Main business activities

and detached houses. Consulting on CRE (corporate real estate) strategies.
Consulting on effective use and investment of real estate. Real estateappraisals. Real estate survey, analysis. Due diligence.

Capital

17,000 million yen (as of March 31, 2019)

Date of establishment

May 12, 1954

Net assets and total
assets in theimmediately preceding
fiscal year

Net assets:

193,600 million yen

Total assets:

658,166 million yen(as of March 31, 2019)

Major shareholders andtheir shareholding ratio

NISSHIN TATEMONO CO., LTD.

8.2% (as of March 31, 2019)

CapitalThere are no capital relationships to be noted between HHR

relationships

or the Asset Management Company and the seller

Relationship between
HHR orthe Asset Management
Company and the

Personnel

There are no personnel relationships to be noted between

relationships

HHR or the Asset Management Company and the seller

Business

There are no business relationships to be noted between

Company

relationships

HHR or the Asset Management Company and the seller

Applicability torelated parties

Not a related party

14

(2) Overview of Buyer(A) Kohnan Hiroshima Nakano-Higashi Store (site)
Not disclosed because consent has not been obtained from the transferee domestic businesscorporation regarding disclosure of the name, etc. There is no capital, personnel or business
relationships to note between HHR or the Asset Management Company and the corporation. It is not a
related party.

(B) Hotel Gracery Tamachi
Same as the seller of SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership) (Mutual
trading)

7.

Status of Property Acquirers, etc.
(1) nanohana Ebisubashi (site)
Previous owner

Second previous owner

Company name
Relationship to
special interested
partiesAcquisition
background,reasons, etc.

Hankyu Hanshin Properties Corp.

Acquisition date
Acquisition priceNon-interested party

See 6. Overview of Buyer andSeller above.

－

Development purpose－

September 21, 2018
The acquisition price is omitted
since the property was owned forover a year.

－－(2) MANDAI Shimoshinjo Store
Previous owner
Company name
Relationship to
special interested
partiesAcquisition
background,reasons, etc.

Hankyu Corporation

Acquisition date
Acquisition priceSecond previous owner
Non-interested party

See 6. Overview of Buyer andSeller above.

－

Revenue purpose－

August 23, 1976
The acquisition price is omitted
since the property was owned forover a year.

－－(3) SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)
Acquisition of the Property is omitted because it does not correspond to acquisition from a person who
has a special interest in HHR or the Asset Management Company.

8.

Transactions with Interested Parties, etc.
The buyers of nanohana Ebisubashi (site) and MANDAI Shimoshinjo Store among three properties tobe acquired fall under interested parties, etc., as defined in the Investment Trusts Act. Accordingly, theacquisition of the two assets has been deliberated and approved by the investment management
committee, the compliance committee and the Board of Directors Meeting of the Asset Management

15Company in accordance with the Asset Management Company’s rules concerning transactions involving
conflicts of interest set forth in the management guidelines, investment management committee
regulations, compliance committee regulations, etc.

9.

Overview of Intermediaries(1) Kohnan Hiroshima Nakano-Higashi Store (site)
Not disclosed because consent has not been obtained from the domestic business corporation as theintermediary regarding disclosure of the name, etc. There is no capital, personnel or business
relationships to note between HHR or the Asset Management Company and the corporation. It is not a
related party.

(2) Hotel Gracery Tamachi
Not disclosed because consent has not been obtained from the domestic business corporation as theintermediary regarding disclosure of the name, etc. There is no capital, personnel or business
relationships to note between HHR or the Asset Management Company and the corporation. It is not a
related party.

Not applicable for other properties.

10．Settlement Method, etc.
Collective payment for each transfer date

11．Schedule of Acquisition and Transfer
March 18, 2020

Resolution of acquisition of the Three Assets Planned to be Acquired and transfer of
the Two Assets Planned to be Transferred at the Asset Management Company’s
Board of Directors Meeting.

March 19, 2020

Conclusion of all property agreements (planned)
Receiptofpayment

forandtransfer(planned)of

KohnanHiroshima

Nakano-Higashi Store (site)
March 31, 2020

Payment for and acquisition (planned) of nanohana Ebisubashi (site) and MANDAI
Shimoshinjo StoreMay 28, 2020

Receipt of payment for and transfer (planned) of Hotel Gracery Tamachi (equivalentof 90% quasi co-ownership)
Payment for and acquisition (planned) of SHIBAURA RENASITE TOWER(equivalent of 10% co-ownership)

August 28, 2020

Receipt of payment for and transfer (planned) of Hotel Gracery Tamachi (equivalentof 10% quasi co-ownership)

12．Future Outlook
For the impact on the conditions surrounding management for the fiscal period ending May 2020
(30th fiscal period: December 1, 2019 to May 31, 2020) and fiscal period ending November 2020 (31st
Fiscal Period: June 1, 2020 to November 30, 2020), please see “Notice Concerning Revision to the16Forecasts of Financial Results and Distribution for the Fiscal Periods Ending May 31, 2020 andNovember 30, 2020” dated today.

*HHR website: https://www.hankyuhanshinreit.co.jp/eng/<Attached Materials>


Reference Material 1

Overview of Appraisal ReportReference Material 2

Table of Real Estate Portfolio After the Replacement

Reference Material 3

Property Photograph or Image View and Map of Surrounding Area

17

Reference Material 1<Overview of Appraisal Report>
nanohana Ebisubashi (site)

Property nameAppraisal value
Appraisal organization
Date of appraisal

4,310,000,000 yen
DAIWA REAL ESTATE APPRAISAL CO., LTD.
February 29, 2020
Item

Value indicated by the income approach

Value

Basis for valuation

4,310,000,000 yen

Value using the direct capitalization (Fixed-term
capitalization) method

4,310,000,000 yen(1) Operating revenues (a + b − c)

156,797,800 yen

a. Rent income

153,415,900 yen

Judging the contract rent is appropriate andbooked.

b. Other income

3,381,900 yen

Adjustments booked due to rising taxes anddues.

c. Loss from non-occupancy, etc.

0 yen(2) Operating costs (total of a to g)

8,747,800 yen

a. Maintenance/Administrative fees, etc.

0 yen

b. Utilities

0 yen

c. Repairs

0 yen

d. Property management fee

1,200,000 yen

Assessed with reference to the PM contract
contents of similar real estate.

e. Public charges and taxes

7,547,800 yen

Assessed based on the actual amount, taking
into account the burden level and land pricetrends.

f. Casualty insurance premiums

0 yen

g. Other expenses

0 yen(3) Net operating income (NOI = (1) − (2))

148,050,000 yen(4) Operating profit on deposit and security

767,080 yen(5) Capital expenditures(6) Net cash flow (NCF = (3) + (4) − (5))

0 yen
148,817,080 yen(7) Capitalization rate

Value using the discounted cash flow (DCF) method

3.3%

Assessed by taking into account theinvestment yield, risk of investment, etc.,
referring to the discount rate for similartransaction cases, etc.

4,310,000,000 yen

Discount rate (Holding period and return price)

Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value

Assessed after comprehensively consideringboth operational and procurement aspects

3.3%

Assessed by taking into account theinvestment yield, risk of investment, etc.,
referring to the discount rate for similartransaction cases, etc.

In this case, the appraisal value was determined to be 4,310,000,000 yen using both the direct capitalization
method (fixed-term capitalization method) and the DCF method, and the appraisal value was finalized based on
the profit level.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither a guarantee
nor an obligation, now or into the future, of a sale or purchase at that appraisal value.

18

<Overview of Appraisal Report>
MANDAI Shimoshinjo Store

Property nameAppraisal value
Appraisal organization
Date of appraisal

704,000,000 yen
Japan Real Estate InstituteDecember 31, 2019
Item

Value indicated by the income approach
Value using the direct capitalization method

Value
704,000,000 yen

Basis for valuation
Assessment through associating the value
indicated by the income approach using the direct
capitalization method and the value indicated by
the income approach using the DCF method.

710,000,000 yen(1) Operating revenues (a + b − c)a. Income from rental fees, etc.
b. Other income

Undisclosed (Note)c. Loss from non-occupancy, etc.
(2) Operating costs (total of a to g)a. Maintenance/Administrative
fees, etc.
b. Utilities
c. Repairs

Undisclosed (Note)d. Property management fee
e. Public charges and taxes
f. Casualty insurance premiums
g. Other expenses(3) Net operating income (NOI = (1) − (2))

33,134,000 yen(4) Operating profit on deposit and security

1,315,000 yen

Assessed as an investment yield of 1.0%

(5) Capital expenditures

2,488,000 yen

Assessed by taking into account the level of capital
expenditure of similar real estate, the age of thebuilding, and the annual average of repair and renewal
costs in the engineering report(6) Net cash flow (NCF = (3) + (4) − (5))

31,961,000 yen(7) Capitalization rate
Value using the discounted cash flow (DCF) method

4.5%

Assessed by comprehensively considering theindividuality of the target real estate, referring to theinvestment yield in transactions for similar real estate

697,000,000 yen

Discount rate

4.2%

Assessed by comprehensively considering theindividuality of the target real estate, referring to theinvestment yield in transactions for similar real estate

Terminal capitalization rate

4.7%

Assessed in consideration of aging of buildings,
uncertainty in the leasing market trends, decline inliquidity, etc.

Value indicated by the cost approach

690,000,000 yen

Land ratio

88.1%

Building ratio

11.9%

Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value

Considering the location characteristics of the target real estate, various attributes of the real estate such asbuilding use, and main customers, etc., it is determined that the profit level assessed using both the direct
capitalization method and the DCF method is more convincing. We decided on the appraisal value by using the
profit level and referring to the accumulated amount.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither a guarantee
nor an obligation, now or into the future, of a sale or purchase at that appraisal value.
Note: The Asset Management Company decided not to disclose these items as no consent has been obtained from the suppliers for thedisclosure of rents, etc., the assessment is based on actual results for reference and there is a possibility that disclosure of these
items will affect its competitiveness and damage the interests of unitholders.

19<Overview of Appraisal Report>
SHIBAURA RENASITE TOWER

Property nameAppraisal value
Appraisal organization
Date of appraisal

3,510,000,000 yen
Richi Appraisal Institute Co., Ltd.
March 1, 2020
Item

Value indicated by the income approach
Value using the direct capitalization method

Value

Basis for valuation

3,510,000,000 yen

We verify the profit level by the direct capitalization
method, focusing on the profit level by the DCF
method, taking into account 1/10 of equity

35,500,000,000 yen

Before considering equity(1) Operating revenues (a + b − c)a. Income from rental fees, etc.
b. Other income

Undisclosed (Note)c. Loss from non-occupancy, etc.
(2) Operating costs (total of a to g)）a. Maintenance/Administrative
fees, etc.
b. Utilities
c. Repairs

Undisclosed (Note)d. Property management fee
e. Public charges and taxes
f. Casualty insurance premiums
g. Other expenses(3) Net operating income (NOI = (1) − (2))

1,245,058,261 yen(4) Operating profit on deposit and security

13,106,135 yen

Assessed as an investment yield of 1.0%

51,357,000 yen

Assessed by taking into account the level of capital
expenditure of similar real estate, the age of thebuilding, and the annual average of repair andrenewal costs in the engineering report(5) Capital expenditures(6) Net cash flow (NCF = (3) + (4) − (5))

1,206,807,396 yen(7) Capitalization rate
Value using the discounted cash flow (DCF) method

3.4%
34,900,000,000 yen

Discount rate (1 to 10 years)

3.2%

Discount rate (from 11 years)-

Terminal capitalization rate
Value indicated by the cost approach

3.5%
3,530,000,000yen

Land ratio

83.9%

Building ratio

16.1%

Assessed by referring to the transaction yield ofsimilar real estate, taking into account theindividuality of the real estate, etc.
Before considering equity
Assessed by referring to the transaction yield ofsimilar real estate, taking into account theindividuality of the real estate, etc.
Assessed taking into account future building
deterioration, economic trends, rent trends, etc.
Taking into account 1/10 of equity

Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value
The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither a guarantee
nor an obligation, now or into the future, of a sale or purchase at that appraisal value.
Note: The Asset Management Company decided not to disclose these items as no consent has been obtained from the suppliers for thedisclosure of rents, etc., the assessment is based on actual results for reference and there is a possibility that disclosure of these
items will affect its competitiveness and damage the interests of unitholders.

20<Overview of Appraisal Report>
Kohnan Hiroshima Nakano-Higashi Store (site)

Property nameAppraisal value
Appraisal organization
Date of appraisal

1,880,000,000 yen
The Tanizawa Sogo Appraisal Co., Ltd.
November 30, 2019
Item

Value indicated by the income approach
Value using the discounted cash flow (DCF) method

Value
1,880,000,000 yen
1,880,000,000 yen

Discount rate per period (Year 1 – Year 6.7)

Discount rate per period(upon returning to vacant land)Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value

Basis for valuation

5.4%

Assessment comprehensively taking into
consideration of the content of the current
lease agreement, land rent levels, lease
period, business risks and other factors,
based on the method to compare with theyields of land with leasehold right transaction
cases, etc., as well as the accumulation
method.

5.4%

Assessment based on the discount rate for thecurrent agreement period and adding thepossibility to sell the property as vacant land,etc.

In the assessment the appraisal value of the target real estate was determined to be 1,880,000,000 yen with thevalue indicated by the income approach using the discounted cash flow (DCF) method, in light of the typology of
the target real estate of being a “site (land with lease-land right)” and considering to the process by which theprice was formulated, placing emphasis on profitability of the market participants (demanders) of the targeted realestate, the objectives of the appraisal request, etc.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither aguarantee nor an obligation, now or into the future, of a sale or purchase at that appraisal value.

21

<Overview of Appraisal Report>
Hotel Gracery Tamachi

Property nameAppraisal value
Appraisal organization
Date of appraisal

4,310,000,000 yen
Richi Appraisal Institute Co., Ltd.
November 30, 2019
Item

Value

Basis for valuation

4,310,000,000 yen

We verify the profit level by the direct
capitalization method, focusing on the profit levelby the DCF method.

Value indicated by the income approach

Value using the direct capitalization method

4,390,000,000 yen(1) Operating revenues (a + b − c)

226,309,992 yena. Income from rental fees, etc.
b. Other income

216,000,000 yen

Assessed taking into account current rent levels
and market level.

10,309,992 yen

Assessed taking into account the current level ofparking.

c. Loss from non-occupancy, etc.
(2) Operating costs (total of a to g)

0 yen

Taking into account current usage and contract
details, etc., not accounted for in this case.

36,511,542 yen

a. Maintenance/Administrative fees, etc.

0 yen

Do not book as tenants` costb. Utilities

0 yen

Do not book as tenants` costc. Repairs

0 yen

Do not book as tenants` costd. Property management fee

2,940,000 yen

Assessed taking into account current standards

e. Public charges and taxes

32,885,600 yen

Assessed based on the actual amount in FY2019

679,942 yen

Assessed taking into account current standards

6,000 yen

Assessed taking into account current standards

f. Casualty insurance premiums
g. Other expenses(3) Net operating income (NOI = (1) − (2))

189,798,450 yen(4) Operating profit on deposit and security

2,168,592 yen

Assessed as an investment yield of 1.0%

(5) Capital expenditures

11,920,000 yen

Assessed by taking into account the level ofcapital expenditure, building usage, age, size,
etc. of similar real estate.

(6) Net cash flow (NCF = (3) + (4) − (5))

180,047,042 yen
4.1%(7) Capitalization rate
Value using the discounted cash flow (DCF) method

Assessed by referring to the transaction yield ofsimilar real estate, taking into account theindividuality of the real estate, etc.

4,280,000,000 yen

Discount rate (1 to 10 years)

4.0%

Discount rate (from 11 years)-

Terminal capitalization rate

4.2%

Value indicated by the cost approach

3,840,000,000 yen

Land ratio

78.3%

Building ratio

21.7%

Assessed by referring to the transaction yield ofsimilar real estate, taking into account theindividuality of the real estate, etc.
Assessed taking into account future building
deterioration, economic trends, rent trends, etc.

Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value
The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither a guarantee
nor an obligation, now or into the future, of a sale or purchase at that appraisal value.

22

Reference Material 2< Table of Real Estate Portfolio After the Replacement>
Property
Code(Note)
R1(K)
R2(K)
R3(K)
R4(K)
R5(K)
R6
R8
R11(K)
R12(K)
R13(K)
M5
R14(K)
R15(K)
R16(K)
R17(K)
R18(K)
R19(K)
R20
R21(K)
R22(K)
R23
R24(K)
R25
R26(K)
R27(K)
O1
O2(K)
O3
M1(K)
M2
M3(K)
M6(K)
M7(K)

Property NameHEP Five(14% of the quasi co-ownership of thetrust beneficiary interests)
Kitano Hankyu Building
Dew Hankyu Yamada
Takatsuki-Josai Shopping Center
Nitori Ibaraki-Kita Store (site)
Kohnan Hiroshima Nakano-Higashi Store(site)
Hotel Gracery Tamachi
HANKYU NISHINOMIYA GARDENS(28% of the quasi co-ownership of thetrust beneficiary interests)
AEON MALL SAKAIKITAHANADA (site)
MANDAI Toyonaka Honan Store (site)
Kita-Aoyama San cho-me Building
DAILY QANAT Izumiya Horikawa
Marutamachi Store (site)
kotocross Hankyu Kawaramachi
LIFE Shimoyamate Store (site)
MANDAI Gojo Nishikoji Store (site)
KOHYO Onohara StoreOASIS Town Itami Konoike (site)
METS OZONEMANDAI Nigawa Store (site)
LAMU Higashiosaka Branch (site)
Vessel Inn Hakata Nakasu
Valor Takatsuki Store (site)
FUNDES JIMBOCHO
nanohana Ebisubashi (site)
MANDAI Shimoshinjo Store
Subtotal
Shiodome East Side Building
Hankyu Corporation Head Office Building
SHIBAURA RENASITE TOWER(equivalent of 10% co-ownership)
Subtotal
Ueroku F Building
Sphere Tower Tennozu(33% of the quasi co-ownership of thetrust beneficiary interests)
LAXA Osaka
GRAND FRONT OSAKA(Umekita Plaza and South Building)(equivalent of 4.9% co-ownership)
GRAND FRONT OSAKA(North Building)(equivalent of 4.9% co-ownership)
Subtotal
Total

Acquisition(Planned) Date

Acquisition(Planned)Price(millions ofyen)

Investment
Ratio

KansaiFebruary 1, 2005

6,468

3.8%

RetailRetailRetailRetailKansaiKansaiKansaiKansaiFebruary 1, 2005
February 1, 2005
November 15, 2005
March 29, 2006

7,740
6,930
8,600
1,318

4.6%
4.1%
5.1%
0.8%

RetailOther

To be transferred――

RetailOther

To be transferred――

RetailKansai

April 16, 2013

18,300

10.8%

RetailRetailRetailKansaiKansai
Other

June 27, 2013
June 27, 2013
November 12, 2013

8,100
1,870
1,680

4.8%
1.1%
1.0%

RetailKansaiJune 4, 2014

3,100

1.8%

RetailRetailRetailRetailRetailRetailRetailRetailRetailRetailRetailRetailRetailKansaiKansaiKansaiKansaiKansai
Other
KansaiKansai
Other
Kansai
Other
KansaiKansaiJune 4, 2014
June 4, 2014
June 24, 2014
July 1, 2016
November 25, 2016
February 15, 2018
March 27, 2018
March 27, 2018
March 29, 2018
March 29, 2019
March 29, 2019
March 31, 2020
March 31, 2020

OfficeOfficeOther
KansaiFebruary 29, 2008
April 10, 2013

2,770
1,421
4,182
1,631
7,100
5,400
2,280
1,850
2,760
2,258
2,830
4,230
674
103,492
19,025
10,200

1.6%
0.8%
2.5%
1.0%
4.2%
3.2%
1.3%
1.1%
1.6%
1.3%
1.7%
2.5%
0.4%
61.1%
11.2%
6.0%

OfficeOther

May 28, 2020

3,475

2.1%

ComplexKansaiNovember 1, 2005

32,700
2,980

19.3%
1.8%

Complex

Other

October 2, 2007

9,405

5.5%

ComplexKansaiJanuary 22, 2009

5,122

3.0%

ComplexKansai

December 5, 2018

9,212

5.4%

ComplexKansai

December 5, 2018

6,566

3.9%

33,285
169,479

19.6%
100.0%

Facility(Type of
Use)

RegionRetail(Note) The “Property Code” is a classification of properties owned by HHR by facility (type of use) and region,
with a code and number assigned according to the facility category at the time of acquisition. The
letters on the left represent the facility (type of use): (“R” is for retail-use facility, “O” is for office-use
facility and “M” is for mixed-use (complex) facility). The numbers are assigned to each facility in thechronological order of the acquisition. Also, the letter “(K)” in parentheses to the right of the numerals
indicates that the property is located in the Kansai Region.

23

Reference Material 3< “nanohana Ebisubashi (site)” Property Photograph >< “nanohana Ebisubashi (site)” Map of Surrounding Area>24

< “MANDAI Shimoshinjo Store” Property Photograph >< “MANDAI Shimoshinjo Store” Map of Surrounding Area>25

< “SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)” Property Photograph >Photo: KOKYU MIWA ARCHITECTURAL PHOTOGRAPHY< “SHIBAURA RENASITE TOWER (equivalent of 10% co-ownership)” Map of Surrounding Area>

26