NEWS RELEASE
July 31, 2023
For Immediate Release
Investment Corporation
Japan Real Estate Investment Corporation
Jo Kato, Executive Director(TSE code: 8952)
Asset Management Company
Japan Real Estate Asset Management Co., Ltd.
Shojiro Kojima, President & CEO
Contact: Masaru Motooka
Executive Officer & General Manager
Strategic Planning Department
Phone: +81-3-3211-7951

Announcement of Acquisition of 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 domestic real estate as follows:
1. Outline of the Acquisition
Property name

Forecast Sakaisujihonmachi (ratio of ownership interest: 100%)

Acquisition price (planned)

JPY 17,215 million

SellerUndisclosed (see item 4 below)

Brokerage

Yes (not an interested party)

Decision dateJuly 31, 2023

Contract date (scheduled)

August 1, 2023

Transfer date (scheduled)

August 31, 2023

Payment date (scheduled)
August 31, 2023
(Note) The ratio of ownership interest in the field of “Property name” indicates the percentage of JRE’sownership interest in the entire property.

2. Reason for the Acquisition
JRE will acquire the property pursuant to the policies and types of assets targeted for asset investment
stipulated in its Articles of Incorporation. The property is situated in a favorable location in central Osaka,
where office buildings are concentrated. It is also built with high-specifications and well functioned. For theforegoing features, JRE decided to acquire the property, determining it will contribute to enhancing themedium- to long-term competitiveness and expanding the asset size.
The property was evaluated for the following points in particular:(1) Excellent building and facilities
Forecast Sakaisujihonmachi is an office building completed in 2009 with high specification features1

including a ceiling height of 2.7 meters, a raised floor of 100 millimeters, and an electrical capacity of
60VA/m2. Typical office floors are equipped with a rectangular floor plate of some 940 m2, adopting aceiling grid system and an air conditioning control system that can be divided into up to 15 separatezones. Therefore, the property can accommodate a wide range of tenants’ needs in leasing, enablingthem to arrange their workplaces with flexibility. In 2018, renovations have been carried out oncommon areas, thanks to which an entrance on the 1st floor and common areas on the typical floors
are refurbished into a quality and sophisticated space. The property also has specifications to reduce
environmental burdens such as adoption of an automatic dimming system on each floor and received
A rank under the CASBEE Certification, demonstrating high competitiveness in terms of functionalityand environment.
(2) Superior location
The property is located in the Sakaisuji-Hommachi area, an area with solid demand for office spaces
where various companies have long been concentrated. Right in front of the property is an entrance
to Sakaisuji-Hommachi station, where two subway lines are available, thereby offering easy access of
one minute walk to the station. It is also eight minutes on foot from Hommachi station, which is atransfer station for three subway lines, including one directly connecting major areas such as Umeda,
Shinsaibashi, and Namba. As for car transportation including company cars and taxis, it offers great
convenience because it sits on the highly visible corner lot facing the main road, which runs from east
to west through the center of Osaka City, as well as being close to an entrance/exit of the Hanshin
Expressway.
3. Description of the Property to Be Acquired
Property name
Forecast Sakaisujihonmachi (ratio of ownership interest: 100%)
Type of specified asset
Domestic real estate
Type of ownership
Land
Ownership
Building
Ownership
Location (Building address)
1-6-29 Kyutaromachi, Chuo-ku, Osaka City, Osaka Prefecture
UsageOffices and shops
AreaLand
1,666.6 m2 (area stated in the real property registry)
16,392.93 m2
Building(gross floor area stated in the real property registry)
S/RC structure with flat roof, 13 stories above the ground and 1Structure
basement level
Typical floor area
940 m2Completion
July 2009
Matters related to
PML: 4.4% (based on the seismic risk assessment report by Tokio
earthquake resistanceMarine dR Co., Ltd.)
Mortgage
No
Appraisal value
JPY 17,300 million(Date of value)(as of July 1, 2023)
Appraisal institution
Chuo Real Estate Appraisal Co., Ltd.
Outline of lease
Total number of tenants 7
Total rent revenuesJPY 742 million per year
Security deposit
JPY 611 million
Total leased area
10,973 m2
Net rentable area
11,913 m2
September 30, 2021
100.0%March 31, 2022
100.0%
Occupancy rate
September 30, 2022
100.0%March 31, 2023
100.0%
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Scheduled acquisition date 92.1 %Special notes
Nothing in particular(Note)・ “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.
・ “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 604 million a year (an estimated amount)・ Depreciation: JPY 184 million a year (an estimated amount)
4. Outline of Seller
The seller’s information is undisclosed due to the absence of its consent.
Note that it does not fall under an interested party of JRE or JRE-AM.
5. Status of Owners, Etc. of the Property
This property is not acquired from any party that falls under an interested party of JRE or JRE-AM.
6. Settlement Method
1) Acquisition fund (anticipated)
Loans and cash on hand(Note) For more information about loans for the acquisition, the details will be announced once they are determined.

2) Settlement method
Lump-sum payment at the time of transfer
7. Future Outlook
There are no revisions to the operating performance forecasts for the fiscal period ending September
2023 (April 1, 2023 to September 30, 2023) and the fiscal period ending March 2024 (October 1, 2023 toMarch 31, 2024) as the acquisition will likely have only a marginal effect on performance.
<Reference>
Performance forecasts announced on May 15, 2023 and actual results for the previous period

Period ended

March 31,2023(Actual)September 30,2023(Forecast)March 31,2024(Forecast)

Operating
Revenues

Operating
ProfitOrdinary
ProfitNet Profit

Dividend perUnit (excluding
dividend inexcess ofearnings)

JPY million

JPY million

JPY million

JPY million

JPY

JPY

37,34517,041

16,172

16,161

11,667

038,610

17,39016,38016,37011,500041,05019,320

18,26017,62011,55003

Dividend inexcess ofearnings perunit8. Summary of Appraisal Report
Property nameAppraisal value
Appraiser
Date of value

Forecast Sakaisujihonmachi
JPY 17,300 million
Chuo Real Estate Appraisal Co., Ltd.
July 1, 2023
Item

Value indicated by the income approach
Value indicated by the direct
capitalization method(1) Operating income [①-②]AmountDescription

17,300,000

Indicated by putting more weight on the DCF method,which weaves fluctuation of the future net cash flows
into the value, while employing the direct capitalizationmethod for verification

18,600,000
809,469①Poten al rental income

829,889②Vacancy loss

20,420(2) Operating expenses
Maintenance andmanagement fee

187,705

Property management fee

52,057(note)

Utilities expenses

68,366

Repair expenses

6,988

Leasing cost

6,052

Estimated considering new rent levels of comparable
properties and the current contracts of the subject
property
Estimated considering the occupancy rates of thesubject property and comparable properties and market
trend forecasts
Estimated referring to the levels of expenses ofcomparable properties and expenses incurred inprevious years on the basis of the current contract for themaintenance and management fee. Estimated based on
the current contract referring to the levels of expenses ofcomparable properties for the property management fee
Estimated considering fee levels of comparable
properties on the basis of expenses incurred in previousyears
Estimated according to the average annual expenses
stated in the engineering report
Estimated considering levels of expenses of comparable
properties and average tenant turnover period on thebasis of current PM contract condition

Property tax and city
planning taxInsurance Premium
Other expenses(3) Net operating income [(1)-(2)](4) Operating profit on lumpsum payments

53,333

Recorded on the basis of recent results889
20621,764

Recorded on the basis of recent results

7,259

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

16,782Estimated referring to the average annual repair/renewal expenses stated in the engineering report(6) Net cash flow [(3)+(4) - (5)]612,241(7) Capitalization rate
Value indicated by the DCF method

3.3%

Recorded on the basis of recent resultsDetermined by referring to market capitalization rates
of comparable properties, while taking into accountindividuality of the subject property

16,700,000

Discount rate

3.1%

Terminal capitalization rate

3.5%

Value indicated by the cost approach
Land ratio
Building ratio

12,000,000
75.0%
25.0%

Determined based on the standard investment yield forthe subject area, while taking into account individualityof the subject property
Determined based on the standard investment yield forthe subject area, while taking into account individualityof the subject property and the risk of decline in its
asset value until the termination of its retention period* In thousands of yen (amounts are rounded down to the nearest thousand yen)4Any special considerations in thereconciliation between indicatedvalues and determination of the final
appraisal value
Note:

Although there is a discrepancy between values indicated by theincome approach and the cost approach, as the demand for thesubject property is mainly from investors who put more weighton profitability as a profit-making property, the appraisal value
is determined based on the income approach while the cost
approach is used just as reference.

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.

This is the English translation of the announcement in Japanese dated July 31, 2023.
No assurance or warranties are given for the completeness or accuracy of this English translation.
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(Reference) map of Forecast Sakaisujihonmachi(Reference) Exterior view of Forecast Sakaisujihonmachi

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