NEWS RELEASE
February 16, 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 ofTrust Beneficiary Interests 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 interests in domestic real estate as follows:≪Properties to be acquired≫
Property namethe ARGYLE aoyama(ownership interest
ratio: 50%)
Toyosu Foresia(ownership interest
ratio: 9%)

Location

Acquisition Price(planned)

Minato-ku
Tokyo

JPY 23,900 million

Koto-kuTokyo

Contract date

Transfer date(scheduled)February 16, 2023

February 27, 2023

JPY 8,100 million(Note) The ownership interest ratio in the “Property name” indicates the ratio of JRE’s co-ownership interest ineach property.

≪Reason for the Acquisitions≫
JRE will acquire the properties pursuant to the policies and types of assets targeted for asset investment
stipulated in its Articles of Incorporation. Both properties are situated in favorable locations in central Tokyoand have high basic specifications and functionality. Therefore, JRE decided the acquisitions determining it
will enhance its medium- to long-term competitiveness and expand its asset size.

1≪Property to be acquired: the ARGYLE aoyama≫
1. Outline of the Acquisition
Property namethe ARGYLE aoyama (ratio of ownership interest: 50%)

Acquisition price (planned)

JPY 23,900 million

SellerDairoku Mec Toshikaihatsu TMKBrokerage

No

Decision dateFebruary 16, 2023

Contract dateFebruary 16, 2023

Transfer date (scheduled)February 27, 2023

Payment date (scheduled)February 27, 2023

2. Reason for the Acquisition
The property was evaluated for the following points in particular:(1) Superior location
The property is located in the Aoyama area, which is known as the epicenter of fashion and other trend,
and where galleries and verdant spots such as Meiji Jingu Gaien are scattered. The area also enjoys
high demand for office spaces from companies in various industries including apparel, design, and IT.
The property serves as an excellent landmark, as it is on a highly visible corner lot at the intersectionof two major arteries, where the former “Aoyama Bell Commons,” previously a symbol of the area,
was located. It also has easy walking access to several stations.
In addition, a large-scale mixed-use redevelopment is planned in the neighboring area, so the value ofthe area is expected to further improve.
(2) Brand new building and excellent facilities
The ARGYLE aoyama, just completed in 2020, is a complex facility consisting of office, hotel, andcommercial zones. The property offers high-specification workspaces on its typical office floors, suchas a regular-shaped floor plate of approx. 830 m2, a ceiling height of 2.8 meters, and a raised floor of
100 millimeters. There is a verdant public square on its northwest side, where office workers andvisitors can stay relaxed, and at the same time, which contributes to the local community with benches
installed there that can also be used as a furnace if the seat is removed in the event of disasters.
Furthermore, the property is equipped with solar panels installed on the roof and facilities for BCP
such as an emergency power generator capable of 48-hour operation and emergency supply storageon each office floor. Thus, it demonstrates high competitiveness in terms of the environment anddisaster mitigation.
3. Description of the Property to Be Acquired
Property name
Type of specified asset
Type of ownership
Land
Building
Trustee
Location (Building address)
Usage
Area
Land
Building
Structure

the ARGYLE aoyama (ratio of ownership interest: 50%)
Trust beneficiary interest in domestic real estate
Ownership (quasi-co-ownership interest: 50/100)
Ownership (quasi-co-ownership interest: 50/100)
Sumitomo Mitsui Trust Bank, Limited
2-14-4 Kita-aoyama, Minato-ku, Tokyo
Offices, hotel, and shops
2,142.24 m2 (area stated in the real property registry)
22,009.57 m2(gross floor area stated in the real property registry)
S/SRC structure with flat roof, 20 stories above the ground and2

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 rate

Special notes

2 basement levels
831.74 m2
June 2020
PML: 1.6% (based on the seismic risk assessment report by Tokio
Marine dR Co., Ltd.)No
JPY 24,100 million(as of January 31, 2023)
Daiwa Real Estate Appraisal Co., Ltd.
12
1,015 million yen per year
913 million yen
7,478 m2
7,478 m2
March 31, 2021
100.0 %
September 30, 2021
100.0 %March 31, 2022
100.0 %
September 30, 2022
100.0 %
Scheduled acquisition date 100.0 %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 pass‐through 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’s
interest. “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 682 million a year (an estimated amount)・ Depreciation: JPY 169 million a year (an estimated amount)34. Outline of Seller
Corporate name

Dairoku Mec Toshikaihatsu TMK

Location

2-27-1, Shinkawa, Chuo-ku, Tokyo

Representative

Syogo Kikuchi, Director

Principal business(1) Operations related to transfer, administration, and disposition of
specified assets in line with the Asset Securitization Plan set forthin the Act on the Securitization of Assets(2) All other operations incidental thereto

Paid-in capital

JPY 37,300 million (as of Feb. 28, 2022)

Date of establishment

January 6, 2014

Net assets

JPY 38,171 million (as of Feb. 28, 2022)

Total assets

JPY 38,425 million (as of Feb. 28, 2022)

Major shareholders and theirshareholding percentages
Mitsubishi Estate Co., Ltd.: 100.0%(as of Feb. 16, 2023)
Relationship with JRE and JRE-AM
Capital relationship

Mitsubishi Estate Co., Ltd., a wholly owning parent company of JREAM, has a preferred equity investment in Dairoku Mec
Toshikaihatsu TMK (hereinafter “the company”).

Personnel relationship

None

Business relationship

None

Applicability to relatedparties

The company falls within the definition of related party of JRE-AM
under the Regulation for Terminology, Forms, and Preparation
Methods of Financial Statements. Furthermore, the company falls
within the definition of interested persons, etc. of JRE-AM under
the Order 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 interested
parties under the internal rules of JRE-AM.

4

5. Status of Owners, Etc. of the Property
Property namethe ARGYLE aoyama(Location)(2-14-4 Kita-aoyama, Minato-ku, Tokyo)
Status of owners, etc. of thePrevious owner
Second previous ownerproperty
Corporate name

Dairoku Mec Toshikaihatsu TMK―

Relationship withinterested parties of JRE
Acquisition backgroundand reason, etc.
Acquisition priceSee item 4 above“Outline of Seller” on page 4―

Newly built in June 2020

―

―

―

―

―

Acquisition date
6. Summary of Appraisal Report
Property nameAppraisal value
Appraiser
Date of value

the ARGYLE aoyama
JPY 24,100 million
Daiwa Real Estate Appraisal Co., Ltd
January 31, 2023
Item

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

24,100,000

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

24,900,000
1,000,795①Poten al rental
income1,032,728②Vacancy loss

31,933(2) Operating expenses
Maintenance andmanagement fee
Property management fee

Estimated considering new rent levels of comparable
properties and the medium- to long-termcompetitiveness of the subject property
Recorded based on expenses incurred in previous years
and average vacancy rates of comparable properties,
considering the competitiveness of the subject property

320,125
108,892(note)

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

Utilities expenses

71,939Repair expenses

9,867

Leasing cost

5,959

Estimated referring to expenses incurred in previous
years
Estimated 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

118,925

Estimated on the basis of the taxes levied for fiscal year
2022

Insurance Premium

1,826

Other expenses

2,714

Recorded based on insurance premiums incurred inprevious years
Recorded based on consumable expenses and expenses
incidental to the maintenance and management fee,etc.

(3) Net operating income [(1)(2)](4) Operating profit on lumpsum payments

680,670
05

Not recorded because no security deposit is depositedin accordance with the master lease contract

(5) Capital expenditures

9,773(6) Net cash flow [(3)+(4) - (5)]Estimated based on the replacement cost of thebuilding referring to repair/renewal expenses ofcomparable properties

670,897(7) Capitalization rate

2.7%

Value indicated by the DCF
method23,800,000

Discount rate

2.5%

Terminal capitalization rate

2.9%

Value indicated by the cost approach
Land ratio
Building ratio

23,800,000
80.4%
19.6%

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)

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.

6≪Property to be acquired: Toyosu Foresia≫
1.

Outline of the Acquisition
Property nameToyosu Foresia (ratio of ownership interest: 9%)

Acquisition price (planned)

JPY 8,100 million

SellerToyosu 3 Chome Kaihatsu TMKBrokerage

No

Decision dateFebruary 16, 2023

Contract dateFebruary 16, 2023

Transfer date (scheduled)February 27, 2023

Payment date (scheduled)February 27, 2023

2. Reason for the Acquisition
The property was evaluated for the following points in particular:(1) Superior location
The property is located in the Toyosu area where diverse urban functions, including business,
commercial, and residential areas, are particularly concentrated within the Tokyo Bay area. It isconnected to Toyosu Station, where two lines are available, via a pedestrian passageway covered withgreen, enjoying smooth access to central Tokyo. The property also faces a large commercial complex,
offering great convenience.
In the nearby redevelopment area, development of complexes consisting mainly of offices is also
underway. Moreover, the subway line at Toyosu station is scheduled to be extended, so the value ofthe area is expected to further improve.
(2) Excellent building and facilities
Completed in 2014, the property has a typical floor plate of approximately 4,500 m2 and a ceilingheight of 2.85 meters. It has also specifications to reduce environmental burdens such as greening of
44% of the whole site and solar concentrators that bring abundant natural light into the atrium. In
addition, it is highly competitive as an office building, boasting excellent performance also in terms ofdisaster mitigation through its adoption of a basic seismic isolation structure, an emergency power
generator capable of 72-hour operation, and by having core facilities on the second floor in preparation
for flood risk.
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

Toyosu Foresia (ratio of ownership interest: 9%)
Trust beneficiary interest in domestic real estate
Ownership (co-ownership interest: 9/100)
Ownership (co-ownership interest: 9/100)
Mitsubishi UFJ Trust and Banking Corporation
3-2-24 Toyosu, Koto-ku, Tokyo
Offices and shops
16,242.68 m2 (area stated in the real property registry)
98,176.19 m2(gross floor area stated in the real property registry)
S/SRC structure with flat roof, 16 stories above the ground and2 basement levels
4,594.02 m2
June 20147

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 rate

Special notes

PML: 0.8% (based on the seismic risk assessment report by Tokio
Marine dR Co., Ltd.)No
JPY 8,180 million(as of February 1, 2023)
Daiwa Real Estate Appraisal Co., Ltd.
31
440 million yen per year
468 million yen
5,908 m2
6,032 m2
March 31, 2021
97.9 %
September 30, 2021
97.9 %March 31, 2022
97.9 %
September 30, 2022
97.9 %
Scheduled acquisition date 97.9 %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 pass‐through 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’s
interest. “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 292 million a year (an estimated amount)・ Depreciation: JPY 102 million a year (an estimated amount)84.

Outline of Seller
Corporate nameToyosu 3 Chome Kaihatsu TMK

Location

2-27-1, Shinkawa, Chuo-ku, Tokyo

Representative

Syogo Kikuchi, Director

Principal business(1) Operations related to transfer, administration, and disposition of
specified assets in line with the Asset Securitization Plan set forthin the Act on the Securitization of Assets(2) All other operations incidental thereto

Paid-in capital

JPY 30,400 million (as of April 15, 2022)

Date of establishment

November 29, 2011

Net assets

JPY 31,833 million (as of April 15, 2022)

Total assets

JPY 32,064 million (as of April 15, 2022)

Major shareholders and theirshareholding percentages
Mitsubishi Estate Co., Ltd.: 100.0%(as of Feb. 16, 2023)
Relationship with JRE and JRE-AM
Capital relationship

Mitsubishi Estate Co., Ltd., a wholly owning parent company of JREAM, has a preferred equity investment in Toyosu 3 Chome Kaihatsu
TMK (hereinafter “the company”).

Personnel relationship

None

Business relationship

None

Applicability to relatedparties

The company falls within the definition of related party of JRE-AM
under the Regulation for Terminology, Forms, and Preparation
Methods of Financial Statements. Furthermore, the company falls
within the definition of interested persons, etc. of JRE-AM under
the Order 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 interested
parties under the internal rules of JRE-AM.

9

5.

Status of Owners, Etc. of the Property
Property nameToyosu Foresia(Location)(3-2-24 Toyosu, Koto-ku, Tokyo)
Status of owners, etc. of thePrevious ownerproperty
Corporate nameToyosu 3 Chome Kaihatsu TMK―

Relationship withinterested parties of JRE
Acquisition backgroundand reason, etc.
Acquisition priceSee item 4 above“Outline of Seller” on page 9―

Newly built in June 2014

―

―

―

―

―

Acquisition date
6.

Second previous owner

Summary of Appraisal Report
Property nameAppraisal value
Appraiser
Date of value

Toyosu Foresia
JPY 8,180 million
Daiwa Real Estate Appraisal Co., Ltd
February 1, 2023
Item

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

8,180,000

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

8,320,000
474,354①Poten al rental
income495,786②Vacancy loss

21,432(2) Operating expenses
Maintenance andmanagement fee
Property management fee

Estimated considering the current average rent, themedium- to long-term competitiveness of the subject
property and the new rent level of comparable
properties
Recorded based on average vacancy rates ofcomparable properties, considering the competitivenessof the subject property

159,868
66,753(note)

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

Utilities expenses

37,281

Repair expenses

5,593

Leasing cost

3,692

Estimated referring to expenses incurred in previous
years
Estimated 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

41,765

Estimated on the basis of the taxes levied for fiscal year
2022

Insurance Premium

1,492

Other expenses

3,289

Recorded based on insurance premiums of comparable
properties
Recorded based on consumable expenses and expenses
incidental to the maintenance and management fee,etc.

(3) Net operating income [(1)(2)](4) Operating profit on lumpsum payments

314,486
0
10

Not recorded because no security deposit is depositedin accordance with the master lease contract

(5) Capital expenditures

15,163(6) Net cash flow [(3)+(4) - (5)]299,322(7) Capitalization rate

3.6%

Value indicated by the DCF
method8,120,000

Discount rate

3.4%

Terminal capitalization rate

3.8%

Value indicated by the cost approach
Land ratio
Building ratio

9,090,000
70.3%
29.7%

Estimated referring to the average annual repair/renewal expenses stated in the engineering report
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)

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.

≪Transaction with Interested Party≫
Those transactions fall 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 interestedparty transactions.
≪Settlement Method≫
1) Acquisition fundthe ARGYLE aoyama: Loan and cash on hand
Toyosu Foresia: Loan and cash on hand2) Settlement method
Lump-sum payment at the time of transfer(Note) For more information about loans for the acquisitions, the details will be announced once they are
determined.

≪Future Outlook≫
There are no revisions to the operating performance forecasts for the fiscal period ending March 2023
(October 1, 2022 to March 31, 2023) and the fiscal period ending September 2023 (April 1, 2023 to
September 30, 2023) as the acquisitions will likely have only a marginal effect on performance.

11

<Reference>
Performance forecasts announced on Nov. 15, 2022 and actual results for the previous period

Period ended

September 30,2022(Actual)March 31,2023(Forecast)
September 30,2023(Forecast)

Operating
Revenues

Operating
ProfitOrdinary
ProfitNet Profit

Dividend per
Unit (excluding
dividend inexcess of
earnings)

JPY million

JPY million

JPY million

JPY million

JPY

JPY

37,65418,042

17,256

16,79011,500036,98016,67015,81015,79011,400037,18016,57015,67015,66011,3000This is the English translation of the announcement in Japanese dated February 16, 2023.
No assurance or warranties are given for the completeness or accuracy of this English translation.
12

Dividend inexcess of
earnings perunit

(Reference) map of the ARGYLE aoyama(Reference) Exterior of the ARGYLE aoyama

13

(Reference) map of Toyosu Foresia(Reference) Exterior of Toyosu Foresia

14