NEWS RELEASE
March 28, 2022
For Immediate Release
Investment Corporation
Japan Real Estate Investment Corporation
Yutaka Yanagisawa, Executive Director(TSE code: 8952)
Asset Management Company
Japan Real Estate Asset Management Co., Ltd.
Naoki Umeda, President & CEO
Contact: Masaru Motooka
Executive Officer & General Manager
Planning Department
Phone: +81‐3‐3211‐7951

Announcement of Acquisition ofTrust Beneficiary Interest in Domestic Real Estate
Japan Real Estate Investment Corporation (“JRE”) hereby announces that Japan Real Estate AssetManagement Co., Ltd. (“JRE‐AM”), the asset management company to which JRE entrusts asset investment,today decided to acquire trust beneficiary interest in domestic real estate as follows:
1. Outline of the Acquisition
Property nameToyosu Front (ratio of ownership interest: 24%)

Acquisition price (planned)

JPY 25,500 million

SellerMitsubishi Estate Co., Ltd.

Brokerage

NoDecision date

March 28, 2022

Contract date (scheduled)

March 29, 2022

Transfer date (scheduled)

March 29, 2022

Payment date (scheduled)

March 29, 2022

(Note) The ratio of ownership interest in the “Property name” indicates the ratio of JRE’s coownership interest in Toyosu Front.

2. Reason for the Acquisition
In recent years, the roles and functions expected of offices have undergone change against the backdropof the development of IT, growing environmental awareness, diversification of work styles, and such. In
view of the change in the business environment resulting from these new trends, JRE has established apolicy to strategically replace its portfolio properties under a proactive perspective, focusing on themedium‐ to long‐term competitiveness of the portfolio.

1Toyosu Front is a highly competitive property located in the bay area called Toyosu, where diverse urbanfunctions, including business, commercial and residential areas, are particularly concentrated among thebay areas, with excellent access to the central Tokyo, but with relatively low rent level. JRE believes thatthe acquisition of the property is in line with its portfolio property replacement policy and will lead toenhancing the portfolio’s competitiveness in the medium to long term.
The property was evaluated for the following points in particular:(1) Superior location
The property is connected to Toyosu Station where two lines are available via an undergroundpassageway and faces a large commercial complex, offering great convenience.
In the nearby redevelopment area, the development of two complex buildings consisting mainly ofoffices is also underway. Moreover, the subway line at Toyosu Station is scheduled to be extended, andthe value of the area is expected to further improve.
(2) Excellent building and facility
The property, completed in 2010, boasts a floor plate of more than 5,000 m2 for an office floor and asoaring atrium to the celling, which provides its workers with an open and comfortable working
environment.
In terms of the environment, the property has specifications to reduce environmental burdens such as
greening of approximately 36% of the whole site with some 50 types of plants and facilities for taking
in outside air and using natural light.
3. Description of the Properties to Be Acquired
Property name
Type of specified asset
Type of ownership
Land
Building
Trustee
Location (Building address)
Usage
Area
Land
Building
Structure
Typical floor area
Completion
Matters related toearthquake resistanceMortgage
Appraisal value(Date of value)
Appraisal institution
Outline of lease
Total number of tenants
Total rent revenues
Security deposit
Total leased area
Net rentable area
Occupancy rateToyosu Front (ratio of ownership interest: 24%)
Trust beneficiary interest in domestic real estate
Ownership (co‐ownership interest: 24%)
Ownership (co‐ownership interest: 24%)
Mitsubishi UFJ Trust and Banking Corporation
3‐2‐20 Toyosu, Koto‐ku, Tokyo
Offices and shops
13,700.00 m2 (area stated in the real property registry)
104,683.98 m2(gross floor area stated in the real property registry)
S/SRC structure with flat roof, 15 stories above the ground and2 basement levels
5,068.50 m2August 2010
PML: 2.1% (based on the seismic risk assessment report by Tokio
Marine dR Co., Ltd.)No
JPY 26,600 million(as of March 1, 2022)
Daiwa Real Estate Appraisal Co., Ltd.
21
1,363 million yen per year
1,230 million yen
17,221 m2
17,407 m2
March 31, 20202

100.0 %

Special notes

September 30, 2020
100.0 %March 31, 2021
93.0 %
September 30, 2021
98.9 %
Scheduled acquisition date 98.9 %Matters related to preferential negotiation rights for the transfer of
an interest in the property are provided for in the co‐owners
agreement.

(Note)
・ JRE, upon acquisition of the property, will lease the whole space to be acquired to Mitsubishi
Estate, which will then sublease it to third parties under a master lease contract of a passthrough type.
・ “Area,” “Structure,” and “Completion” show the same entries stated in the real property registry.
“Usage,” however, indicates the main entries, among those listed in the real property registry.
・ “Outline of lease” is based on the data provided by the seller and calculated on the basis of JRE’sinterest. “Total number of tenants” shows the number pertaining to the entire property.
・ “Total number of tenants”, “Total leased area,” “Net rentable area” and “Occupancy rate on thescheduled acquisition date” are forecasts as of the scheduled acquisition date.
・ NOI (Net Operating Income): JPY 970 million a year (an estimated amount)・ Depreciation: JPY 273 million a year (an estimated amount)34. Outline of Seller
Corporate name

Mitsubishi Estate Co., Ltd.

Location

1‐1‐1, Otemachi, Chiyoda‐ku, Tokyo

Representative

Junichi Yoshida, President & Chief Executive Officer

Principal businessReal estate business

Paid‐in capital

JPY 142,414 million (as of Dec. 31, 2021)

Date of establishment

May 7, 1937

Net assets(Consolidated): JPY 2,126,523 million (as of Dec. 31, 2021)

Total assets(Consolidated): JPY 6,370,776 million (as of Dec. 31, 2021)

Major shareholders andtheir shareholding
percentages(as of Sep. 30, 2021)

The Master Trust Bank of Japan, Ltd. (Shintaku Acc.): 14.85%
Custody Bank of Japan, Ltd. (Shintaku Acc.): 4.99%
Meiji Yasuda Life Insurance Company: 3.16%

Relationship with JRE and JRE‐AM

Capital relationshipPersonnel
relationship
BusinessrelationshipApplicability torelated parties

Mitsubishi Estate Co., Ltd. (“Mitsubishi Estate”) is a parent companyof JRE‐AM, holding a 100% stake as of March 28, 2022. Mitsubishi
Estate also holds 17,120 investment units of JRE as of September 30,
2021, which accounts for 1.24% of the number of units outstanding.
Thirteen personnel from Mitsubishi Estate are on loan to JRE‐AM asof March 28, 2022, and JRE’s executive director concurrently serves
as corporate advisor of Mitsubishi Estate.
Mitsubishi Estate is the previous owner and trust beneficiary of someof the JRE‐owned properties. It is also a lessee for JRE. In addition, it
has several collateral contracts regarding properties held by JRE.
Mitsubishi Estate falls within the definition of related party of JRE‐AM
under the Regulation for Terminology, Forms, and Preparation
Methods of Financial Statements. Furthermore, Mitsubishi Estate falls
within the definition of interested persons, etc. of JRE‐AM under theOrder for Enforcement of the Act on Investment Trusts andInvestment Corporations (Cabinet Order No. 480 of 2000, including
later amendments), and also falls within the definition of interestedparties under the internal rules of JRE‐AM.

45. Status of Owners, Etc. of the Property
Property nameToyosu Front(Location)(3‐2‐20 Toyosu, Koto‐ku, Tokyo)
Status of owners, etc. of thePrevious ownerproperty
Corporate name

Second previous owner

Mitsubishi Estate Co., Ltd.

Toyosu 3‐1 TMK

Relationship withinterested parties of JRE

See item 4 above“Outline of Seller”

Mitsubishi Estate Co., Ltd., theshareholder of the asset
management company(investment ratio in the asset
management company: 100%) to
which JRE entrusts asset
investment, made a preferred
equity investment in it.

Acquisition backgroundand reason, etc.

Acquisition for the purpose ofinvestment management
Omitted as the previous owner
owned the property for morethan a year
Acquired in May 2015

Acquisition price
Acquisition date

Newly built in 2010――

6. Transaction with Interested Party
The transaction falls under a transaction with an interested party. In order for such a transaction toproceed, JRE‐AM first goes through the deliberation and approval process at its compliance committee,and then obtains approval from its investment management council pursuant to the rules for interested‐party transactions.
7. Settlement Method
1) Acquisition fundLoans(Note) For more information about the loans for the acquisition, please refer to the press release “Announcement of Debt Financing “announced today.
2) Settlement method
Lump‐sum payment at the time of transfer
8. Future Outlook
There are no revisions to the operating performance forecasts for the fiscal period ending March 2022
(October 1, 2021 to March 31, 2022) and the fiscal period ending September 2022 (April 1, 2022 toSeptember 30, 2022) as the acquisition will likely have only a marginal effect on performance.

59. Summary of Appraisal Report
Property nameAppraisal value
Appraiser
Date of value

Toyosu Front
JPY 26,600 million
Daiwa Real Estate Appraisal Co., Ltd
March 1, 2022
Item

AmountDescription

Value indicated by the income approach

26,600,000

Indicated by the income approach, placing more weighton the DCF method that incorporates fluctuations of thefuture net cash flow, while employing the direct
capitalization method for verification

Value indicated by the direct
capitalization method(1) Operating income [①‐②]27,100,000
1,409,990①Poten al rental
income1,469,777②Vacancy loss

59,787(2) Operating expenses
Maintenance andmanagement fee
Property management fee
Utilities expenses

Estimated considering new rent levels of comparable
properties and the medium to long termcompetitiveness of the subject property
Recorded based on average vacancy rates ofcomparable properties, considering the competitivenessof the subject property

378,700
175,040(note)

Estimated based on expenses incurred in previous years
for the maintenance and management fee, and thecurrent contract for property management fee69,556

Estimated based on expenses incurred in previous years

Repair expenses

16,608

Leasing cost

11,210Estimated according to the average annual expenses
stated in the engineering report
Recorded the amount equivalent to the 1.0‐month rent
for new tenants, in light of cases of comparable
properties

Property tax and city
planning tax

99,393

Estimated on the basis of the taxes levied for fiscal year
2021

Insurance Premium

4,250

Other expenses

2,640

Recorded based on the insurance premiums ofcomparable properties
Recorded based on the actual management expenses
for the passageway and pedestrian deck(3) Net operating income [(1)‐(2)](4) Operating profit on lump‐sum payments

1,031,290
13,386

Estimated under the assumption of an interest rate of
1.0%(5) Capital expenditures

71,782Estimated on the basis of the average annual
repair/renewal expenses stated in the engineering
report(6) Net cash flow [(3)+(4) ‐ (5)]972,894(7) Capitalization rate

3.6%

Value indicated by the DCF
method26,400,000

Discount rate

3.4%

Terminal capitalization rate

3.8%

Value indicated by the cost approach
Land ratio
Building ratio

21,700,000
76.5%
23.5%

Estimated referring to the market capitalization rates ofcomparable properties

Estimated from the discount rates in the transactions ofcomparable properties and comparisons with the yields
of other financial instruments, etc.
Estimated on the basis of the capitalization rate, while
taking into account the marketability of the subject
property at the end of the holding period* In thousands of yen (amounts are rounded down to the nearest thousand yen)6Any special considerations in thereconciliation between indicatedvalues and determination of the final
appraisal value
Note:

Nothing in particular

No consent has been obtained from the property management company to disclose the property
management fee as a separate item. Moreover, if the property management fee for the subject property isdisclosed separately, it might potentially affect other deals done by the property management company,
which could negatively affect JRE in efficiently delegating property management services under its policyon the maintenance and management of target investment properties. This could in turn undermine theinterests of its unitholders. Accordingly, the maintenance and management fee and the property
management fee are shown by the combined amount.

7

(Reference) map of Toyosu Front(Reference) Exterior of Toyosu Front8