Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

October 13, 2023
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Keisuke Chiba, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Yuji Kamo, Head of Ichigo OfficeTel: +81-3-3502-4891

Acquisition of Office Asset (Ichigo Kinshicho South Building)
Ichigo Office decided today to acquire an office asset in Tokyo, the Ichigo KinshichoSouth Building.
1. Asset Acquisition Summary
Asset Number
Asset Name1

O-101
Ichigo Kinshicho South Building

Asset Type

OfficeDate Built

January 31, 1993

Legal Form of Asset

Real EstateAppraisal Value2

JPY 2,060 million

Acquisition Price3

JPY 1,875 million

Seller4

A Third-Party Japanese Company

Broker5

A Third-Party Broker

Contract Date

October 13, 2023

Closing Date

October 31, 2023 (expected)

Financing Method

Cash-on-handSettlement Method

Lump-sum payment

1

Ichigo Office will change the building name from the Kuramochi Building 2 to the
Ichigo Kinshicho South Building. For purposes of this release, the building is referred
to as the Ichigo Kinshicho South Building.
2
Appraisal Value is calculated by Tanizawa Sogo Appraisal as of September 1, 2023,
and is in compliance with the appraisal guidelines of Ichigo Investment Advisors(“IIA”) as well as the rules of the Investment Trusts Association of Japan.
3
Acquisition Price excludes incidental expenses such as fees and property, city
planning, and consumption taxes.
1

4

The seller, a third-party Japanese company, did not provide consent to disclose its
name.
5
The broker is not a related party as defined in the Enforcement Ordinance of theInvestment Trust and Investment Corporation Law or the internal rules of the AssetManagement Company.
2. Acquisition Rationale
As a specialized office REIT that delivers robust earnings stability via a diversified
portfolio, Ichigo Office continues to execute on its strategy to grow shareholder value
by focusing its portfolio on high-quality, mid-size office assets.
As announced on September 22, 2023, Ichigo Office is selling the Twicere Yokohama
Isogo (Retail Section) on October 30, 2023, and is using the proceeds from the sale tofinance the acquisition of the Ichigo Kinshicho South Building, a mid-size office inTokyo’s Kinshicho area with earnings stability.
The Kinshicho area offers convenient access by train, and is c. ten minutes via train
from the office areas near Tokyo and Otemachi Stations on the JR Sobu and Tokyo
Metro Hanzomon Lines.
Post-acquisition, Ichigo Office’s portfolio will consist of 85 office assets comprising
97.6% of the portfolio. Upward rent renewals for the majority of the tenants at the
Ichigo Kinshicho South Building have already been negotiated, which is expected todrive future NOI growth. Ichigo Office will draw upon its operational capabilities tocarry out value-add activities at the newly acquired office assets and drive stableearnings growth.
The existing tenants of the Ichigo Kinshicho South Building satisfy the tenant standard
stated in the “Financial Report (Yuka Shoken Hokokusho)” (Japanese only) disclosed on
July 26, 2023.
Please refer to Section 3 “Details of the Ichigo Kinshicho South Building” below for
additional details on the asset’s features and characteristics that underpinned theacquisition decision.
3. Details of the Ichigo Kinshicho South Building(1) Location
The Kinshicho area is one of the seven Tokyo sub-centers designated by the Tokyo
Metropolitan Government, and is a central area in the Joto district following theredevelopment of the area surrounding Kinshicho Station and the Tokyo Sky Tree.
Kinshicho Station is a connecting hub in the Joto district, served by the JR Sobu Line,
JR Sobu Rapid Line, and Tokyo Metro Hanzomon Line, and is 8 minutes to Tokyo
Station, 18 minutes to Shinagawa Station and 12 minutes to Otemachi Station via train.
The area offers convenient access to central Tokyo office areas and Chiba Prefecture,and sees office demand from sales offices and back offices for the Joto and Western
Chiba areas.
(2) Building Features
The Ichigo Kinshicho South Building is a mid-size office building located within a sixminute walk from Kinshicho Station.
The standard floor plate has a leasable area of 93 tsubo (c. 307m2) with a ceiling heightof 2.4 to 2.5 meters, individual air conditioning units, and security systems, catering to2

the needs of many tenants.
Current tenants include an IT company, import-export agent, nursing care company, andan interior construction company.
(3) Building Photos and Location Map

3

Asset Name
Form of Ownership
Location
Property Right
Area
Land
ZoningCoverage Ratio1
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built

Asset Overview
Ichigo Kinshicho South Building
Real Estate
2-2-3 Kotobashi, Sumida-ku, Tokyo
Freehold
430.46m2
Commercial
80%600%
Freehold
Office, Parking lot
Steel Reinforced Concrete, B1F/8F
2,719.50m2
January 31, 1993
Tanizawa Sogo Appraisal Co., Ltd.
JPY 2,060 million
September 1, 2023

Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
JPY 2,110 million
MethodZen Sekkei
Architect22
Tokai Kogyo Co., Ltd., Construction Division
Builder2
Structural Designer
Zen Sekkei
2
Inspection Agency
Sumida Ward
Seismic PML (Assessor)
9.1% (Sompo Risk Management Inc.)
None
Collateral
Lease Details (as of September 30, 2023)
Number of Tenants
7
Monthly Rental Income
JPY 8.473 million
Tenant Security Deposits
JPY 36.603 million
Leasable Area
2,054.47m2
Leased Area
2,054.47m2
Oct 2021 Apr 2022 Oct 2022 Apr 2023 Sep 2023
Occupancy
63.4%
78.5%
93.2%
100%
100%
Property Management
Tokyo Capital Management Co., Ltd. (expected)
Company
None
Master Lease Company
None
Master Lease TypeSpecial Items
1. Some of the building tiles encroach the northeast neighbor and part of the northeast
neighbor’s hood encroaches the building. There is a memorandum of understanding with
the northeast neighbor to rectify the situation when a large-scale renovation orreconstruction is conducted in the future.
2. An engineering report indicates issues with the building from an inspection that have notbeen rectified (broken exterior tiles, a faulty emergency light, and a faulty manhole cover),as well as a malfunction of the cover of the box containing the standpipe on the fourth4floor. The costs associated with fixing the broken exterior tiles have been deducted fromthe sale price. The other issues have been agreed by the seller to be rectified at the seller’s
expense.
1

The coverage ratio is relaxed to 100% from 80% because the property complies with fire
prevention zoning regulations.

2Names of the architect, builder, structural designer, and inspection agency are those as of
the building’s construction date.

5

Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses
Administrative andMaintenance Expenses
Utility Expenses

Ichigo Kinshicho South Building
JPY 2,060,000,000
Tanizawa Sogo Appraisal Co., Ltd.
September 1, 2023
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and2,060,000,000
verified using a direct capitalization
valuation
2,110,000,000
108,648,270
Based on expected long-term, stablerental income, common area service
115,503,442
income, parking lot income, and otherincomeBased on long-term, normalized
6,855,172
vacancy rates
30,999,034
Based on expense receipts and6,681,136
historical actual amounts
9,688,881 Based on historical actual amounts

Repair Expenses

Based on engineering reports,
reference to similar assets, and a 3:7(Repair Expenses: Capital
2,140,000
Expenditure) allocation based on the
Corporate Tax Law Basic Interpretive
Regulations

PM Fee3,034,114

Leasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment of
Deposits Received
CapitalExpenditure

Net Profit

Based on property management
proposal

Based on assumption that 10% of
tenants will change annually
7,219,700 Based on FY2023 actual amounts
Based on quotes from insurance
326,910companies
1,086,483 Based on historical actual amounts
821,810

77,649,236
423,098 Based on a 1.0% investment yield
Based on engineering reports,
reference to similar assets, and a 3:7(Repair Expenses: Capital
4,280,000
Expenditure) allocation based on the
Corporate Tax Law Basic Interpretive
Regulations
73,792,334
6

Cap Rate
Value via DCF Method

3.5%
2,040,000,000

Base rate adjusted for individual risks
assuming a holding period of ten years
3.7% Cap rate adjusted for uncertainties

Discount Rate

3.6%

Terminal Cap Rate
Value via Cost Approach
Ratio of Land
Ratio of Building

Based on transactions of similar assets
located in nearby areas

2,040,000,000
Land value divided by total land andbuilding value
Building value divided by total land
15.8%
and building value
Notes
84.2%

None
Note: Appraisal NOI Yield: 4.1% (calculated by dividing NOI by Acquisition Price)7

4. Seller Profile
Name

The seller, a third-party Japanese company, did not provide
consent to disclose its name.

Relationship to
Ichigo Office or
Ichigo Investment
Advisors (IIA)

The seller does not have any material capital, personnel, ortransactional relationship with Ichigo Office or IIA. In addition,
the seller is not a related party as defined in the Enforcement
Ordinance of the Investment Trust and Investment Corporation
Law or the internal rules of the Asset Management Company.

5. Acquisition Schedule
October 13, 2023

Acquisition Decision Date
Contract Date
Closing Date

October 13, 2023
October 31, 2023 (expected)

6. Earnings Impact
The impact of the acquisition, which will be executed on October 31, 2023, on Ichigo
Office’s October 2023 fiscal period earnings is minimal, and there is no change to theforecast announced in the September 22, 2023 release, “Earnings Forecast Revision for
the October 2023 Fiscal Period.”
Although there is no change to the April 2024 fiscal period earnings forecast, upward
rent renewals for the majority of the tenants at the Ichigo Kinshicho South Building
have already been negotiated, which will drive future NOI growth.

8Reference
1. Earnings Profile of Asset Being Acquired
Ichigo Kinshicho South Building(JPY million)
Forecast1

At Acquisition2

A. Rental Income
B. Rental Expenses(excluding depreciation)3
C. NOI (A-B)

114

104

29

29

84

74

D. NOI Yield4

4.5%

4.0%

E. Depreciation5

13

14

F. Post-depreciation NOI (C-E)

71

59

G. Post-depreciation NOI Yield4

3.8%

3.2%

H. Occupancy6

97.0%

100%

1

Amounts exclude one-off factors in the year of acquisition and are calculated based on
current and future anticipated fluctuations in occupancy.
2
Shows first-year amounts used to calculate the DCF-based valuation, excluding one-off
factors in the year of acquisition.
3
Rental Expenses include incidental expenses such as service provider fees, taxes,
maintenance and repair fees, insurance premiums, and other fees.
4
Calculated based on Acquisition Price.
5
Depreciation is as estimated by Ichigo Office using the straight-line method.
6
Occupancy at acquisition is as of September 30, 2023.
2. Engineering Report Summary
Asset Name

Ichigo Kinshicho South Building

Inspector Name
Inspection Date
Short-Term Repair Expenses1
Long-Term Repair Expenses2
Current Replacement Cost

Tokio Marine dR Co., Ltd.
September 2023–
JPY 103.282 million
JPY 1,072.5 million

1

Short-Term Repair Expenses are defined as repair expenses beyond the scope ofordinary maintenance within a year from the time of inspection.
2
Long-Term Repair Expenses are defined as cumulative repair expenses considerednecessary for the maintenance of the asset within 12 years from the time ofinspection.

93. Post-Transaction Portfolio1
No.
O-02
O-03
O-04
O-05
O-06
O-07
O-09
O-10
O-11
O-12
O-14
O-15
O-16
O-17
O-18
O-19
O-20
O-21
O-22
O-23
O-24
O-26

Area2

Asset Name

O-27
O-28
O-29

Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya Kamiyamacho Building
Ichigo Shibakoen Building
Ichigo Ebisu Nishi Building
Ichigo Ginza 612 Building
Ichigo Uchikanda Building
Ichigo Yotsuya 4 Chome Building
Ichigo Tameike Building
Ichigo Jimbocho Building
Ichigo Hakozaki Building
Ichigo Kudan 2 Chome Building
Ichigo Kudan 3 Chome Building
Ichigo Gotanda Building
Ichigo Shin Yokohama Building
Ichigo Minami Ikebukuro Building
Ichigo Nakano North Building
Ichigo Eitai Building
Ichigo Ikejiri Building
Ichigo Nishi Ikebukuro Building
Ichigo Nishi Gotanda Building
Ichigo Kichijoji Building

O-34

Ichigo Sakae Building

O-37

Ichigo Marunouchi Building

O-38
O-39
O-42
O-46
O-47

Ichigo Toyamaeki Nishi Building
Ichigo Mirai Shinkin Building
Ichigo Takamatsu Building
Ichigo Kanda Nishikicho Building
Ichigo Akihabara North Building

O-48

Ichigo Sakaisuji Honmachi Building

O-49
O-50

Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major Regional
CitiesOther Regional Cities
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Four Major Regional
CitiesCentral Tokyo
Central Tokyo
10

Acquisition
Price(JPY million)% ofPortfolio3

3,254
2,740
1,920
1,550
1,200
1,505
1,100
1,917
1,773
1,140
550
580
1,820
1,150
763
844
5,060
1,816
1,460
764
1,490
2,030
639
765
2,160

1.5
1.3
0.9
0.7
0.6
0.7
0.5
0.9
0.8
0.5
0.3
0.3
0.9
0.5
0.4
0.4
2.4
0.9
0.7
0.4
0.7
1.0
0.3
0.4
1.0

4,705

2.2

6,710

3.2

1,645
1,158
3,010
2,130
5,500

0.8
0.5
1.4
1.0
2.6

1,940

0.9

2,210
1,905

1.0
0.9

No.

Area2

Asset Name

O-51
O-52
O-53
O-54
O-55
O-56
O-57
O-58
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69
O-70
O-71
O-72
O-73

Ichigo Ebisu Green Glass
Ichigo Omori Building
Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Ofuna Building
Ichigo Sendai East Building
Ichigo Kumamoto Building
Ichigo Jingumae Building
Ichigo Shibuya Dogenzaka Building
Ichigo Hiroo Building
Ichigo Sasazuka Building
Ichigo Nihonbashi East Building
Ichigo Sakurabashi Building
Ichigo Shinkawa Building
Ichigo Kudan Building
Ichigo Higashi Gotanda Building
Axior Mita
Ichigo Higashi Ikebukuro Building
Koriyama Big-i (Office Section)
Ichigo Kawasaki Building
Ichigo Shibuya East Building
Ichigo Ningyocho Building

O-74

Ichigo Nishi Honmachi Building

O-75

Ichigo Hakata Building

O-76

Ichigo Nishiki First Building

O-78
O-79
O-80

Ichigo Ikebukuro East Building
Ichigo Motoazabu Building
Ichigo Otsuka Building

O-81

Ichigo Nagoya Building

O-82

Ichigo Fushimi Building

O-83

Ichigo Nishiki Building

O-84

Ichigo Minami Morimachi Building

O-85
O-86

Ichigo Shibuya Udagawacho Building
Win Gotanda Building

Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Other Regional Cities
Tokyo Metro Area
Central Tokyo
Central Tokyo
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesTokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesCentral Tokyo
Central Tokyo
11

Acquisition
Price(JPY million)
5,900
3,850

% of
Portfolio3

1,580
3,430
1,174
2,000
1,840
1,450
7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570
1,660
1,750
1,350
1,450

2.8
1.8
0.7
1.6
0.6
0.9
0.9
0.7
3.4
1.7
1.9
2.3
2.2
1.2
1.1
1.5
1.7
0.8
2.2
0.8
0.8
0.6
0.7

2,190

1.0

1,380

0.7

2,000

0.9

3,010
1,890
2,740

1.4
0.9
1.3

3,420

1.6

2,340

1.1

1,330

0.6

1,040

0.5

3,500
3,100

1.6
1.5

No.
O-87
O-88
O-89
O-90

Ichigo Hongo Building
Oimachi Center Building
Win Gotanda Building 2
MIF Building

O-91

Ichigo Uchi Honmachi Building

O-92
O-93

Ichigo Minami Otsuka Building
Ichigo Nogizaka Building

O-94

Ichigo Hakata East Building

O-95
O-96

Ichigo Nakameguro Building
Ichigo Tachikawa Building
Ichigo Higashi Ikebukuro 3 Chome
Building

O-97

Acquisition
Price(JPY million)% ofPortfolio3

Tokyo Metro Area
Central Tokyo
Central Tokyo
Central Tokyo
Four Major Regional
CitiesTokyo Metro Area
Central Tokyo
Four Major Regional
CitiesTokyo Metro Area
Tokyo Metro Area

2,300
1,680
3,300
2,200

1.1
0.8
1.6
1.0

1,900

0.9

2,780
3,315

1.3
1.6

2,250

1.1

1,495
3,830

0.7
1.8

Tokyo Metro Area

3,840

1.8

1,750

0.8

3,500

1.6

2,750

1.3

1,875
207,412
1,210
2,400
1,400
5,010
212,422

0.9
97.6
0.6
1.1
0.7
2.4
100

38

–

Area2

Asset Name

Four Major Regional
CitiesFour Major Regional
O-99 Ichigo Hakataeki Higashi Building
CitiesFour Major Regional
O-100 Fukuoka Kensetsu Kaikan
CitiesO-101 Ichigo Kinshicho South Building
Tokyo Metro Area
Subtotal - Office (85 Assets)
Z-09 Future IZUMIOther Regional Cities
Z-10 Ichigo Shibuya Bunkamura Dori Building Central Tokyo
Z-14 Ichigo Kamata Building
Tokyo Metro Area
Subtotal - Other (3 Assets)
Total (88 Assets)
O-98

Ichigo Marunouchi South Building

TK Equity Investment GK Kizuna1 TK Equity Interest
1

Excludes the Twicere Yokohama Isogo (Retail Section) (Z-11) scheduled to be sold on October 30, 2023.
For details of the asset sale, please refer to the September 22, 2023 release “Sale of Retail Asset (Twicere
Yokohama Isogo).”2
Central Tokyo refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. Tokyo Metro
Area refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, and Saitama Prefectures. Four
Major Regional Cities refers to Osaka, Nagoya, Fukuoka, and Sapporo.
3% of Portfolio is based upon acquisition price.

12