September 26, 2018
For Immediate Release<Investment Corporation>
Japan Real Estate Investment Corporation
Hiroshi Nakajima, Executive Director(TSE code: 8952)<Asset Management Company>
Japan Real Estate Asset Management Co., Ltd.
Naoki Umeda, President & CEO
Contact: Ryuta Yoshida
Director, Senior Executive Officer &General Manager, Planning Department
Phone: +81-3-3211-7951

Announcement of Partial Disposal of Domestic Property
Japan Real Estate Investment Corporation (“JRE”) announced today that Japan Real Estate AssetManagement Co., Ltd., an asset management company to which JRE entrusts the management of its
assets, decided on September 26, 2018 the partial disposal of domestic property as follows:

1. Outline of the disposal
1) Name of property:2) Property to be disposed:

3) Disposition price:

Lit City Building (retail unit)(Okayama city, Okayama prefecture)
Domestic property
Land:
Freehold (share of co-ownership)
Building: Compartmentalized building units (retail unit)(share of ownership of the building: 3.15%) (Note 1)¥650 million (Note 2)4) Estimated book value:
5) Difference between thedisposition price andestimated book value:
6) Scheduled contract date:¥370 million (Note 3)¥279 million (Note 4)
September 27, 20187) Scheduled closing date:

September 28, 20188) Buyer:

Domestic business corporation (Note 5)9) Method of Settlement:

Lump sum payment at closing of disposition(Note 1) JRE acquired 27.75% share of ownership of the building on February 1, 2006. JRE will continue to have theownership of the office unit even after the above disposal and JRE’s share of ownership of the building willbe 24.60%.
(Note 2) Disposal costs, adjustment amounts of property taxes and city planning taxes and consumption taxes, etc.
are not included in the disposition price.

1

(Note 3) The estimated book value means the estimated book value as of September 26, 2018 computed by the asset
management company based on the book value at the end of the period ended March 31, 2018, thescheduled capital expenditures and the estimated depreciation for up to September 26, 2018. The number isrounded down to the nearest million.
(Note 4) It does not mean the actual gain on disposition as it does not include other costs. The number is rounded
down to the nearest million.
(Note 5) The details concerning the domestic business corporation are undisclosed due to non-approval of disclosure
by the corporation.

2. Reasons for the partial disposal
Customer flow is separated between the subject retail unit and the office area of this building. Thus,
integrated operation of the said retail unit and the office unit owned by JRE is difficult to berealized.
Under such circumstances, JRE received a proposal from the buyer to dispose the said retail unit of
the building and the disposal was decided after reviewing the current and future portfolio strategy
taking into consideration the characteristic of the building, the profitability of the portfolio and thereal estate market trend, etc. with the asset management basic policy and the investment attitude
stipulated in the Article of the Company.
3. Details of the property to be partially disposed
The relevant information is as set out below; provided that the information on “area,” “structure”
and “completion date” is derived from the land registry, “usage” described below is among the main
usages listed in the land registry.
Entire property
Name of property

Lit City Building

Type of specified assets Real estate
Location (Address)15-1 Ekimoto-machi, Okayama City, Okayama Prefecture

Usage

Offices and shops

Area
Land
Building
Structure

7,596.44 m2 (total land area for the building site)
52,653.19 m2 (total floor space for the entire building)
Steel-framed, reinforced concrete structure, flat roof
Above ground: 20 floors Below ground: 2 floors

Completion dateJune 2005

Date of acquisition

February 2006

Acquisition price¥ 4,650 million

Property to be disposed (retail unit)
Type of ownership
Land

Ownership (share of co-ownership: 27,911/1,000,000 )Building

Compartmentalized building units (retail unit)*share of ownership of the building: 3.15%

Acquisition price¥ 555 million
2Appraisal value at the
point of disposal(Appraisal institution)(Appraisal date)¥ 514 million(Daiwa Real Estate Appraisal Co., Ltd.)(as of September 1, 2018)

Tenant details
Total number oftenants

9 (as of September 26, 2018. Same applies to below)

Total leasable space

1,058 m2

Total leased space

1,058 m2

Occupancy rate

100.0 %

Rent revenues¥ 24,037 thousand (as of March 2018 period)

Security deposit¥ 37,180 thousand (as of September 26, 2018)

4. Outline of the buyer
Buyer is a domestic business corporation, but the details concerning the domestic businesscorporation are undisclosed due to non-approval of disclosure by the corporation. The domestic
business corporation is not applicable to a party with special interest.
5. Transaction with related parties
Transactions with interested parties stipulated by the Act on Investment Trusts and Investment
Corporations of Japan will not be conducted with the disposal of the property.
6. Outline of the brokerage
Not applicable
7. Schedule of the disposal
September 26, 2018
September 27, 2018
September 28, 2018

Decision of the disposal of the property
Execution of the agreement for the disposal (scheduled)
Closing of transaction (scheduled)

8. Performance projection
As the impact of the partial disposal of this property on the JRE’s management performance for the
September 2018 period from April 1, 2018 to September 30, 2018 and the March 2019 period from
October 1, 2018 to March 31, 2019 is expected to be minor, no revision of the forecast for
performance will be made.
A part of the gain on this disposal will be considered to be reserved for reduction entry by utilizing
special taxation measure “Exceptions of the Taxation in case of the Replacement by Purchase ofSpecific Assets” in Article 65-7 of the Special Taxation Measures Act for the purpose of stabilizing
and leveling distribution per unit in the future.

3

9. Outline of appraisal report
Name of property
Appraisal value
Appraisal institution
Date of appraisal

Lit City Building¥ 514,000 thousand
Daiwa Real Estate Institute
September 1, 2018
AmountItem

General Outline(thousand yen)

Estimated with DCF method which is referring

Capitalization Value

514,000 future net cash flow and also with the validation ofcapitalization value by direct method.

515,000
53,181

Direct Capitalization Value(1)Operating Revenue [①－②]

Estimated based on level and trend of comparable① Annual Rent Revenue

55,826 cases referring to medium-to long term

② Amount of Loss due to Vacancy(2)Operating Expenses

competitiveness etc.
Calculated with the estimation of medium-to longterm sustainable vacancy rate based on a level of
2,644 comparable cases and considering competitiveness
etc.

20,069Maintenance Cost for Building

5,917 Calculated respectively based on the actual costs in

Property Management Fee(Note) past years.
Monthly cost referring to comparable property

Brokerage Fee etc.

252 cases.

Calculated based on the actual costs in the past

Utilities Expenses

7,000 considering occupancy rate.

Repairing Expenses

1,729 the engineering reports.

Property and Other Taxes

4,815 2018.

Estimated based on annual average costs listed on
Estimated based on the actual figures for fiscal

Casualty Insurance

275 Estimated based on comparable properties cases.

Other Expenses

80 reserve such as supplies expenses.

Calculated based on the estimated discretionary(3)Net Operating Income [(1)－(2)](4)Profit from Managing Security Deposit

33,112322 Assessed at a rate of return on investment of 1%.

(5)Capital Expenditure

3,591 engineering reports.

(6)Net Cash Flow [(3)+(4)－(5)]29,843(7)Cap Rate

5.8% cases and individual characteristics of the property

Estimated based on annual average costs in the

Estimated taking account of comparable properties’such as location and building age etc.

Value under DCF method

513,000
Estimated with reference to comparable discountDiscount Rate

5.6% rate etc.

Terminal Cap Rate

6.0%

Integrated Value
Ratio of Land
Ratio of Building

519,000
31.1%
68.9%

* Values below a thousand yen are cut off.

4

Estimated with consideration of the marketability
etc. of subject property upon termination ofanalyzing the cap rate.

Any special considerations made in thereconciliation of estimated value anddetermination of the final appraisal value

None in particular(Note) The property management company of the subject property did not agree to disclose the property management
fee. If the fee for the subject property were to be disclosed, it may impact on other deals related to the property
management company, which could negatively affect JRE to delegate effective property management service
based on JRE’s policy of property maintenance and operation. This could in turn undermine the interest of JRE’s
unitholders. Accordingly, maintenance costs for the building and property management fees are shown in total
amount.

This is the English translation of the announcement in Japanese dated September 26, 2018.
No assurance or warranties are given for the completeness or accuracy of this English translation.

5

List of all the properties of JRE after the disposal of the property
Area

Name

Type of property

Acquisition date

Acquisition price (Note 1)(thousand yen)

Percentage
of portfolio

Kitanomaru Square

Chiyoda-ku, Tokyo

Real property

February 24, 2006

８１，５５５，５００

８．０％

MD Kanda Building

Chiyoda-ku, Tokyo

Real property

May 31, 2002

９，５２０，０００

０．９％

Kandabashi Park Building

Chiyoda-ku, Tokyo

Real property

August 15, 2002

４，８１０，０００

０．５％

Otemachi Financial City
North Tower

Chiyoda-ku, Tokyo

Real property

March 31, 2014

１５，４６２，９００

１．５％

Nibancho Garden

Chiyoda-ku, Tokyo

Real property

April 1, 2005

１４，７００，０００

１．４％

Mitsubishi UFJ Trust and Banking
Building

Chiyoda-ku, Tokyo

Real property

March 28, 2007

４４，７００，０００

４．４％

Burex Kojimachi Building

Chiyoda-ku, Tokyo

Real property

July 29, 2005

７，０００，０００

０．７％

１０，２００，０００

Sanno Grand Building

Chiyoda-ku, Tokyo

Real property

January 31, 2005
April 3, 2006
Total

１０，７００，０００
２０，９００，０００

２．１％

Yurakucho Denki Building

Chiyoda-ku, Tokyo

Real property

August 1, 2003

７，２００，０００

０．７％

Kodenmacho Shin-Nihonbashi Building
Front Place Nihonbashi
Kyodo Building(Kayabacho 2Chome)

Chuo-ku, Tokyo
Chuo-ku, Tokyo

Trust beneficiary rights
Real property

September 25, 2001
January 19, 2018

３，１７３，０００

０．３％

１７，５６０，０００

１．７％

Chuo-ku, Tokyo

Trust beneficiary rights

March 1, 2011

４，４１０，０００

０．４％

Chuo-ku, Tokyo

Real property

July 22, 2002

５，２５０，０００

Ginza 1Chome East Building

Chuo-ku, Tokyo

Trust beneficiary rights

March 2, 2015

６，４５９，０００

０．６％

Ginza Sanwa Building

Chuo-ku, Tokyo

Real property

March 10, 2005

１６，８３０，０００

１．７％

５，３５３，５００２，６４５，９２２

０．８％

Burex Kyobashi Building

Ryoshin Ginza East Mirror Building

Chuo-ku, Tokyo

Real property

Harumi Front

Chuo-ku, Tokyo

Real property

January 7, 2013

３１，３００，０００

３．１％

Harumi Center Building

Chuo-ku, Tokyo

Real property

December 18, 2007

２６，８００，０００

２．６％

Akasaka Park Building

Minato-ku, Tokyo

Real property

November 15, 2011

６０，８００，０００

６．０％

Aoyama Crystal Building

Minato-ku, Tokyo

Real property

March 14, 2003

７，６８０，０００

０．８％

Clover Shiba-koen

Minato-ku, Tokyo

Trust beneficiary rights

４，５００，０００

０．４％

Shiba 2Chome Daimon Building
Cosmo Kanasugibashi Building

Minato-ku, Tokyo
Minato-ku, Tokyo

Trust beneficiary rights
Trust beneficiary rights

January 20, 2015
December 19, 2008
January 15, 2010
May 1, 2015
March 30, 2017
September 1, 2017
Total
September 10, 2001
September 25, 2001

Tamachi Front Building

Minato-ku, Tokyo

Real property

Shinjuku Eastside Square

Shinjuku-ku, Tokyo

Trust beneficiary rights

Minato-ku, Tokyo

Trust beneficiary rights

７，９９９，４２２

２１，２５０，０００
５４，６００，０００
１０，１００，０００
１０，４５０，０００

１０．５％

１０，５３０，０００
１０６，９３０，０００
４，８５９，０００２，８０８，０００

０．５％
０．３％

March 30, 2017

６，２１０，０００

０．６％

２３，１００，０００

５５，２２０，０００
２５，０２５，０００

２．５％
０．８％

Shinjuku Front Tower

Shinjuku-ku, Tokyo

Trust beneficiary rights

October 1, 2014
January 25, 2017
March 30, 2018
Total
April 17, 2018

Shinwa Building

Shinjuku-ku, Tokyo

Real property

September 1, 2004

７，８３０，０００
９，３５０，０００２２，４２６，８３１
２２，０００，０００

Tokyo Opera City Building

Shinjuku-ku, Tokyo

Real property

September 13, 2005
March 24, 2010
Total

TIXTOWER UENO

Taito-ku, Tokyo

Real property

June 15, 2012

６，６６０，０００２５，４６０，０００

３．１％

３１，７７６，８３１
２．２％

Shinagawa-ku, Tokyo

Real property

November 1, 2004

５，５００，０００

０．５％

Osaki Front Tower

Shinagawa-ku, Tokyo

Real property

February 1, 2011

１２，３００，０００

１．２％

Omori-Eki Higashiguchi Building

Ota-ku, Tokyo

Trust beneficiary rights

September 10, 2001
March 24, 2004

５，１２３，０００

０．５％

August 23, 2013

－１，１７０，０００

Total

５，５００，０００

６，６７０，０００

Shinjuku South Gate Project(tentative name)(Land with leasehold interest)

Shibuya-ku, Tokyo

Yoyogi 1Chome Building

Shibuya-ku, Tokyo

Real property

April 1, 2004

８，７００，０００

Jingumae Terrace

Shibuya-ku, Tokyo

Real property

November 22, 2002

４，８８５，０００

０．５％

Jingumae Media Square Building

Shibuya-ku, Tokyo

Real property

October 9, 2003

１２，２００，０００

１．２％

November 30, 2001

３４，６００，０００

Shibuya Cross Tower(Land with leasehold interest)

Shibuya-ku, Tokyo

Real property

January 18, 2018

－８，０７６，０００

Total

２６，５２４，０００
３，７４０，０００
３６０，０００

Ebisu Neonato

Shibuya-ku, Tokyo

Real property

Harmony Tower

Nakano-ku, Tokyo

Real property

Otsuka Higashi-Ikebukuro Building
Ikebukuro 2Chome Building

Toshima-ku, Tokyo
Toshima-ku, Tokyo

Trust beneficiary rights
Trust beneficiary rights

November 14, 2003
April 1, 2004
February 18, 2014
Total
February 28, 2005
December 19, 2012
March 27, 2015
Total
September 25, 2001
September 25, 2001

Ikebukuro YS Building

Toshima-ku, Tokyo

Real property

Hachioji First Square

Hachioji City, Tokyo

Real property

Saitama Urawa BuildingTokyo
metropolitan
area(excluding 23 wards)

MM Park Building
Queen's Tower A
Kawasaki Isago Building
Musashi Kosugi STM Building

８，５００，０００
５２０，０００

０．９％

２．６％

１．４％

１．１％

０．３％

１，７２８，０００

０．２％

August 2, 2004

４，５００，０００

０．４％

March 31, 2005
March 19, 2008
Total
September 25, 2001
October 11, 2001
Total

３，３００，０００２，３７９，１１２

０．６％

March 24, 2008

３７，４００，０００

３．７％

Trust beneficiary rights

January 31, 2014

１７，２００，０００

１．７％

Trust beneficiary rights

September 25, 2001

３，３７５，０００

０．３％

Real property

March 25, 2008

４，０００，０００

０．４％

８４７，７２９，７６６

８３．５％

Real property

Yokohama City,
Kanagawa Prefecture

Real property

Yokohama City,
Kanagawa Prefecture
Kawasaki City,
Kanagawa Prefecture
Kawasaki City,
Kanagawa Prefecture

１０，５１２，０００
１４，６１２，０００

０．５％

２，１００，０００
１１，１２０，０００
３，５４１，０００

Saitama City,
Saitama Prefecture

Total: Tokyo metropolitan area

6

７６．６％

５．４％

Higashi-Gotanda 1Chome Building

Real property

Percentage
by area

０．５％

March 15, 2005
May 24, 2010
Total

Shiodome BuildingTokyo
metropolitan
area(23 wards)

Location

５，６７９，１１２
１，２３２，０００
１，３４２，０００

０．３％

２，５７４，０００
６．９％

８３．５％

Hokkaido

8 • 3 Square Kita Building
Jozenji Park Building

TohokuregionHokuriku
regionJune 1, 2007

７，１００，０００

０．７％

Real property

January 31, 2005

１，０００，０００

０．１％

Higashi Nibancho Square

Sendai City,
Miyagi Prefecture

Real property

January 7, 2013

９，９５０，０００

１．０％

Sendai Honcho Honma
Building

Sendai City,
Miyagi Prefecture

Trust beneficiaryrights

September 25, 2001
June 28, 2006
Total

２，９２４，０００
２５０，０００３，１７４，０００

０．３％

AER

Sendai City,
Miyagi Prefecture

Real property

September 1, 2015

１８，６４０，０００

１．８％

２，８８０，０００
１，７００，０００
４，５８０，０００

０．５％

Kanazawa City,
Ishikawa Prefecture

Real property

Kanazawa Kamitsutsumicho
Building

Kanazawa City,
Ishikawa Prefecture

Real property

October 3, 2016

２，７８０，０００

０．３％

Nishiki Park Building

Nagoya City,
Aichi Prefecture

Real property

October 2, 2006
November 1, 2006
June 9, 2014
April 1, 2016
Total

３，８５０，０００
１，３００，０００
６５０，０００
１７５，０００５，９７５，０００

０．６％

Trust beneficiaryrightsJuly 31, 2013８，５６７，０００

０．８％Real property

September 10, 2001

１４，５３３，０００

１．４％

Real property

August 8, 2003

１，８６５，０００

０．２％

Real property

September 3, 2013

４，４００，０００

０．４％

April 1, 2015

１５，５２３，５２０

１．５％
２．４％

Nagoya Hirokoji Place

Nagoya Misono Building
Shijo Karasuma Center Building
Umeda Square Building
Shin-Fujita Building

Nagoya City,
Aichi Prefecture
Nagoya City,
Aichi Prefecture
Nagoya City,
Aichi Prefecture
Kyoto City,
Kyoto Prefecture
Osaka City,
Osaka Prefecture
Osaka City,
Osaka Prefecture

Trust beneficiaryrightsTrust beneficiaryrightsSakaisujihonmachi Building

Osaka City,
Osaka Prefecture

Real property

Midosuji Daiwa Building

Osaka City,
Osaka Prefecture

Trust beneficiaryrightsAmagasaki Front Building

Amagasaki City,
Hyogo Prefecture

Trust beneficiaryrightsLit City Building

Okayama City,
Okayama Prefecture

NHK Hiroshima Broadcasting
Center Building
Tosei Tenjin Building

KyushuregionTenjin Crystal Building
Hinode Tenjin Building

Hiroshima City,
Hiroshima
Prefecture
Fukuoka City,
Fukuoka Prefecture
Fukuoka City,
Fukuoka Prefecture
Fukuoka City,
Fukuoka Prefecture

September 1, 2008

２４，０００，０００

September 25, 2001
December 26, 2003
Total
September 25, 2001
February 28, 2002
Total

２，２６４，０００
１，９００，０００４，１６４，０００６，９３４，０００
７，３８０，０００
１４，３１４，０００

０．７％

０．４％

March 25, 2015

９，３００，０００
４，６５０，０００－５５５，１３１４，０９４，８６８
１，３２０，０００
１，４５０，０００
２，７７０，０００

Real property

September 25, 2001

１，５５０，０００

０．２％

Real property

June 1, 2005

５，０００，０００

０．５％

September 10, 2001

３，６５７，０００

０．４％

Real property

Trust beneficiaryrightsTotal: Other major cities
Total: Portfolio

３．０％

７．１％

１．４％

February 1, 2006
September 28, 2018
Total
March 25, 2004
March 3, 2008
Total

Real property

０．７％

３．２％

Kanazawa Park Building

Nagoya Hirokoji Building

ChugokuregionReal property

February 28, 2002
March 3, 2003
Total

Chubu
regionKinki
regionSapporo City,
Hokkaido
Sendai City,
Miyagi Prefecture

０．９％

０．４％
０．７％
０．３％

１．０％

１６６，９３７，３８８

１６．５％

１６．５％

１，０１４，６６７，１５４

１００．０％

１００．０％(Note1) Acquisition prices are expressed by eliminating the numbers below a thousand.
(Note2) Ratio and ratio by region are rounded to the nearest first decimal place.
(Note3) The acquisition price of Shinjuku South Gate Project (tentative name) (Land with leasehold interest) represents the acquisition price ofthe land and building net of the acquisition price of the building on March 24, 2004, as the building section was disposed on August 23,
2013.
(Note4) The acquisition price of Jingumae Media Square Building is the price of the property on the date of acquisition (October 9, 2003),
including the sales cost (￥614 million) of the part of the property that was sold on October 30, 2009.
(Note5) The acquisition price of Shibuya Cross Tower (Land with leasehold interest) represents the acquisition price of the land and building netof the acquisition price of the building on November 30, 2001, as the building section was disposed on January 18, 2018.
(Note6) The acquisition price of Lit City Building excludes the acquisition price of the retail unit that is to be disposed on September 28, 2018.

7