July 12, 2024
To All Concerned Parties
Name of REIT Issuer:
Nippon Building Fund, Inc.
Koichi Nishiyama, Executive Director(TSE Code：8951)
Contact:
Asset Management Company
Nippon Building Fund Management, Ltd.
Daisuke Yamashita, President and CEO
Person to Contact:
Yukio Handa, General Manager(TEL. +81-3-3516-3370)

Notice Concerning Partial Disposition of Domestic Real Estate Trust BeneficiaryInterests and Conclusion of General Fixed-term Leasehold Contract(NBF Toranomon Bldg.)
Nippon Building Fund Management Ltd. (“NBFM”), to which Nippon Building Fund Inc. (“NBF”) entrusts
asset management services, hereby provide notice of the decision made on July 12, 2024 on thedisposition ("Disposition”) of the trust beneficiary pertaining to the building portion ("Building") of the NBF
Toranomon Bldg. ("Property") and entering into a new general fixed-term leasehold agreement for theland of the Property ("Land") (hereinafter referred to as the 'Initiative'), as follows.
Description
1.

Outline of the Disposition
NBF Toranomon Bldg. (Building)*The subject of the disposition is the building portion of the Property,
excluding the land portion. As of the scheduled disposition date, NBF
Name of Asset

will dispose the trust beneficiary interest in the entire Property as
trust assets by dividing (i) the trust beneficiary interest in the land as
a trust asset ("land beneficiary interest") and (ii) the trust beneficiaryinterest in the existing building as a trust asset ("building beneficiaryinterest"), and only the building beneficiary interests will be disposed.
860 million yen

Disposition Price(Miscellaneous disposition costs, adjusted amount of property tax,
etc. as well as consumption tax, etc. are excluded.)Book Value

909 million yen (*1)

Profit on Disposition

1 million yen (*2)

1Transferee

Mitsui Fudosan Co., Ltd. ("Mitsui Fudosan") (Please refer to Section
6 hereinbelow for an overview of the transferee and lessee.)Intermediary

None

Date of Contract

July 12, 2024

Scheduled Disposition Date

January 6, 2025

Specific Use of Disposition
Funds
Payment Method

Cash on hand, etc.
Lump-sum payment at the time of delivery*1 The Book Value may differ from the actual figures at the time of disposition, which is as ofDecember 31, 2023.
*2 The profit on disposition is based on information currently available to NBF and certain
assumptions that NBF deems reasonable and may differ from the actual profit or loss on
disposition. Amounts are rounded down to the nearest unit.
2.

Reasons for the Disposition and the Initiative
Since the acquisition of this property in June 2004, NBF has managed it as a highly visible property locatedin a good location with easy access from multiple train lines and stations. However, it is now 61 years old(completed in April 1963) and large-scale renovation works are expected to occur in the future. Therefore,
we have considered several options for the property from the viewpoint of how to manage the property bytaking advantage of its characteristics (superiority of location and low book value of the Land), which willcontribute to the enhancement of unitholder value.

【Main options】
a. Continue current operation of the Property
b. Sell the Property and acquire a replacement property
c. Redevelop by NBF
d. Dispose the Building and continue to hold the Land (operation of the Land with leasehold interest) ("theInitiative")【Summary of options】
a. Continue current operation of the Property✓

Major maintenance work, such as tenant improvement and renewal of special sections, is expected
to be required for ongoing operations, and the Building's age also limits its competitiveness and cash
flow potential in the area.

b. Sell the Property and acquire a replacement property✓

Although profit on disposition is expected to be recorded, the hurdle is high to acquire a similar2

property that will replace the property, and the possibility is uncertain.
c. Redevelop by NBF✓

Although NBF can enjoy the benefits of development, the income during the rebuilding period will belost, and there will be a significant impact on P/L, such as the recording of building demolition costs
and loss on disposal, etc. In addition, the development risk is significant for NBF.

d. Dispose the Building and continue to hold the Land (operation of the Land with leasehold interest) ("theInitiative")✓

Dispose the building beneficiary interest and enter into a general fixed-term leasehold agreement for
the land with Mitsui Fudosan, the sponsor.

✓

At the same time, NBF will acquire the preferential negotiating rights for the acquisition of a newbuilding to be redeveloped after the demolition of the Building (the "Redeveloped building") by Mitsui
Fudosan.

As a result of the above verification, we have determined that the initiative will enable us to take fulladvantage of the Property's characteristics and will contribute to the enhancement of unitholder value. In
addition, when NBF acquires the Redeveloped building through the initiative, NBF will be able to enjoy
stable income over the long term. Even if NBF does not acquire the Redeveloped building, it is possible tosecure a stable yield on the land, and we determined that the initiative has the greatest potential tomaximize the value of the property.
3.

Outline of Forward Commitment etc.
The Disposition will be made pursuant to forward commitments (settlement/handover occurring one monthafter the execution of the contract). In case the sales contract is terminated due to a violation of contractual
commitments by NBF, it shall be required to pay to the buyer 10% of the disposition price.

4.

Details of the Asset to be Disposed
Name of Asset

NBF Toranomon Bldg. (the Building)Type of Specified Asset

Beneficiary interest in trust

Type of Ownership

Ownership

Location(Description in Real Property Registry)
6-17, 6-8, 6-9, 6-10, 6-11, 6-12, 6-13, 6-14, 6-15, 6-16, 6-33, 634, 6-35, 6-36, 6-37, 6-38, 6-39, 6-40, 6-41, 6-42, NishiShinbashi 1-chome, Minato-ku, Tokyo(Street Address)
6-21, Nishi-Shinbashi 1-chome, Minato-ku, Tokyo

Use (primary use listed in Real
Property Registry)

Office, warehouse, and night duty room

GFA (Description in Real
Property Registry)

18,082.47m2
3Structure (Description in Real
Property Registry)
Completion of Construction(Description in Real Property
Registry)
Acquisition Date
Acquisition Price

Steel frame reinforced concrete structure, flat roof, 9 floors above
ground and 5 floors below ground
April 17, 1963
Extension on April 25, 1971
June 30, 2004
1,921 million yen *3(Acquisition price of the Property: 13,337 million yen)Appraisal Value

827 million yen(Date of Valuation)(May 31, 2024)(Valuation as a building with a general fixed-term leasehold)Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Description of Tenants

All lease agreements with tenants of the property are scheduled
to expire by the scheduled disposition date.

Total number of tenants-

Total rental revenues-

Lease deposit-

Total rentable area-

Total rented area-

Occupancy Rate-

Other Special Matters

None*3 The acquisition price of the Building is at the time of acquisition.
5.

Details of assets held by NBF after this Disposition (Summary of general fixed-term leasehold agreement)
NBF has agreed with Mitsui Fudosan to establish a general fixed-term land leasehold with Mitsui Fudosan
as the leaseholder on the land that it will continue to own after the Disposition, and will execute a general
fixed-term land leasehold establishment agreement simultaneously with the sales contract for the
Disposition.
The details of the property after the sale are as follows.
Name of Assets

NBF Toranomon Bldg. (the Land)

Type of Specified Asset

Beneficiary interest in trust

Type of Ownership

Ownership

Location(Description in Real Property Registry)
6-17, 6-8, 6-9, 6-10, 6-11, 6-12, 6-13, 6-14, 6-15, 6-16, 6-33, 634, 6-35, 6-36, 6-37, 6-38, 6-39, 6-40, 6-41, 6-42 Nishi-Shinbashi
1-chome, Minato-ku, Tokyo

Land use zone

Commercial zone

Site area (Description in Real
Property Registry)

1,804.45 m2
4

Collateral

None

Description of the Lease
LessorMitsubishi UFJ Trust and Banking Corporation

LesseeMitsui Fudosan Co., Ltd.

Contract Type

General fixed-term leasehold agreement

Contract period

From January 6, 2025 to January 5, 2075 (50 years)

Land rent

From January 6, 2025 to March 5, 2028
16,375,384 yen per month
From March 6, 2028 to January 5, 2075
42,821,629 yen per month
However, it may be revised in accordance with changes inproperty taxes, and other changes in prices and social
conditions, etc., discussed upon between the parties.

Deposit

246,880,198 yen

Total number of tenants

1

Leasable area

1,804.45 m2

Leased area

1,804.45 m2

Occupancy Rate

100%

Other items of special note

・Treatment of buildings at the end of the contract
The lessee is obligated to remove at its own expense all buildings
and other structures on the land or attached to the land by thelessee, restore the land to its original state, and return the land
to the lessee by the end of the term of this agreement. In
addition, the lessee may not demand the purchase of thebuilding.
・Preferential negotiating rights
NBF has entered into an agreement with Mitsui Fudosan
regarding preferential negotiation rights and has preferential
negotiation rights for the acquisition of the Redeveloped building.
・Purpose of Contract
The lessee must classify at least 50% of the floor area of the
Redeveloped building as office space, and at least 50% of its
rental income must be derived from the portion that is classified
as office space.
・Disposition of leasehold interest
If the lessee intends to dispose or sublease this leasehold to athird party, the lessee must obtain the prior written consent of thelessor.
・Disposition of the Land
If the lessor intends to dispose the land to a third party, the lessor
5must obtain the prior written consent of the lessee and, if theLand is disposed to a third party, the lessee's obligation to returnthe deposit to the lessee must be assumed by such third party.
・Duty of care
The lessee, in consideration of the fact that the Redevelopedbuilding will be constructed on the Land, it must be used andmanaged with due care and attention, including the building's
legal compliance and safety during the building construction
process.
6.

Summary of the transferee and lessee
Name

Mitsui Fudosan Co. Ltd.

Location

1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo

Representative

Takashi Ueda, President and Chief Executive Officer

Business

Real estate business, etc.

Capital

341,000 million yen (as of March 31, 2024)

Date of Establishment

July 15, 1941

Net assets

3,234,656 million yen (as of March 31, 2024)

Total assets

9,489,527 million yen (as of March 31, 2024)

Major Shareholders andInvestment Ratio

The Master Trust Bank of Japan, Ltd. (Trust Account) 17.50%,
The Custody Bank of Japan, Ltd. (Trust Account) 7.87%(as of March 31, 2024)

Relationship with the Investment Corporation/Asset Manager
Capital relationship

Shareholder of NBFM (investment ratio: 46%)
Holds 57,630 investment units of NBF

Personnel relationshipCertain personnel seconded to NBFM

Business relationship

NBF’s contractor of office management services, new tenantarranger, broker for real property sale and purchase etc., tenant
of NBF’s properties, etc.

Related parties

Not a related party to NBF
Parent company of NBFM and a related party

6

7.

Forecasts of Operating Results for the Periods ending June 30, 2024 and ending December 31, 2024
Since the delivery date in the Disposition is for the period ending June 30, 2025, there is no change in theforecast of operating results for the period ending June 30, 2024 and the period ending December 31,
2024.

Forecasts of current period performance (as announced on February 15, 2024) and actual results for the previous period

Operatingrevenues

OperatingincomeOrdinary
incomeNet
incomeYen inmillions

Yen inmillions

Yen inmillions

Yen inmillions

Distributions perDistributions inunit (excludingexcess of
distributions inearnings per
excess of earnings)
unit
Yen

Yen

2H 2023(Actual)47,34920,767

19,513

19,513

11,500-

1H 2024(Forecast)

50,11323,751

22,377

22,377

12,500-

2H 2024(Forecast)

50,41923,58022,07722,077

12,000-End

7

【Reference Material】Summary of Portfolio after the Transaction
Area

Central 5
Wards

23 Wardsof Tokyo

Acquisition Price(\ in thousands)(Note 1)

Property Name

Percentage

Percentage of eacharea

Value (Real EstateAppraisal Value)(\ in thousands)(Note 2)

Shinjuku Mitsui Bldg.

170,000,000

11.7%

180,000,000

IIDABASHI GRAND BLOOM

138,909,102

9.5%

154,000,000

Roppongi T-CUBE

62,800,000

4.3%

62,700,000

Nishi-Shinjuku Mitsui Bldg.

45,392,204

3.1%

45,900,000

Celestine Shiba Mitsui Bldg.

42,000,000

2.9%

47,000,000

NBF Shinagawa Tower

36,300,000

2.5%

49,000,000

Shiba NBF Tower

32,000,000

2.2%

29,300,000

NBF Platinum Tower

31,000,000

2.1%

64,300,000

NBF COMODIO Shiodome

28,800,000

2.0%

36,600,000

G-BASE TAMACHI

28,200,000

1.9%

29,500,000

Toranomon Kotohira Tower

24,543,000

1.7%

35,800,000

NBF Shibuya Garden Front

20,269,000

1.4%

34,500,000

NBF Ginza Street Bldg.

17,000,000

1.2%

19,100,000

Shinjuku Mitsui Bldg. No.2

16,285,400

1.1%

20,600,000

Kowa Nishi-Shinbashi Bldg. B

13,473,200

0.9%

14,200,000

River City M-SQUARE

13,350,000

0.9%

Shinbashi M-SQUARE

11,900,000

0.8%

NBF Toranomon Bldg. (Land with leasehold interest) (Note 3)

11,416,000

0.8%

GranTokyo South Tower (Note 4)

9,398,168

0.6%

9,590,000

NBF ALLIANCE

9,126,000

0.6%

13,600,000

Yotsuya Medical Bldg.

8,800,000

0.6%

7,990,000

NBF Shibuya East

8,000,000

0.5%

10,100,000

NBF Takanawa Bldg.

6,667,200

0.5%

7,780,000

NBF Akasaka Sanno Square

6,250,000

0.4%

7,540,000

NBF Kandasudacho Bldg.

5,960,000

0.4%

8,670,000

NBF Ogawamachi Bldg.

5,420,000

0.4%

6,890,000

Sumitomo Densetsu Bldg.

5,365,000

0.4%

5,320,000

NBF Higashi-Ginza Square

5,200,000

0.4%

8,210,000

Nihonbashi Kabuto-cho M-SQUARE

4,850,000

0.3%

5,540,000

NBF Hatchobori Terrace

4,528,349

0.3%

5,460,000

Ryukakusan Bldg.

4,050,000

0.3%

4,920,000

Jingumae M-SQUARE

3,700,000

0.3%

4,980,000

NBF Osaki Bldg.

66,660,000

4.6%

86,100,000

Gate City Ohsaki

57,281,060

3.9%

71,700,000

Toyosu Bayside Cross Tower

36,300,000

2.5%

37,000,000

Toyosu Bayside Cross Tower (Additional Acquisition) (Note 5)

43,800,000

3.0%

43,900,000

NBF Toyosu Canal Front

35,200,000

2.4%

38,400,000

Ueno East Tower

35,000,000

2.4%

39,400,000

NBF Toyosu Garden Front

25,018,000

1.7%

Osaki Bright Core - Bright Plaza

24,380,000

1.7%

Nakameguro GT Tower

23,856,000

1.6%

20,700,000

Osaki Bright Tower

13,970,000

1.0%

14,600,000

NBF Ikebukuro East

8,630,000

0.6%

13,600,000

Higashi Gotanda Square

8,350,000

0.6%

8,850,000

NBF Ikebukuro Tower

4,695,000

0.3%

5,760,000

NBF Ikebukuro City Bldg.

4,428,000

0.3%

5,750,000

8

57.1%

13,700,000
14,300,000
17,073,000

83.7%

29,700,000
25,600,000

Area

Other Greater
Tokyo

Other Cities

Acquisition Price(\ in thousands)(Note 1)

Property Name

Percentage

Percentage of eacharea

Value (Real EstateAppraisal Value)(\ in thousands)(Note 2)

Chofu South Gate Bldg.

9,320,000

0.6%

9,780,000

Yokohama ST Bldg.

16,749,300

1.2%

22,300,000

Parale Mitsui Bldg.

3,800,000

0.3%

S-ino Omiya North Wing

16,816,345

1.2%

NBF Urawa Bldg.

2,000,000

0.1%

2,120,000

NBF Matsudo Bldg.

2,455,000

0.2%

2,490,000

Sapporo L-Plaza

4,404,405

0.3%

8,420,000

NBF Sapporo Minami Nijo Bldg.

1,870,300

0.1%

1,600,000

Sumitomo Mitsui Banking Nagoya Bldg.

14,900,000

1.0%

16,600,000

Nagoya Mitsui New Bldg.

13,200,000

0.9%

14,200,000

Nagoya Mitsui Main Bldg.

13,050,000

0.9%

14,100,000

NBF Nagoya Hirokoji Bldg.

7,232,000

0.5%

6,630,000

Nakanoshima Mitsui Bldg.

44,000,000

3.0%

47,600,000

Aqua Dojima NBF Tower

17,810,000

1.2%

Nakanoshima Central Tower

14,900,000

1.0%

Shinanobashi Mitsui Bldg.

14,400,000

1.0%

13,800,000

Sakaisuji-Honmachi Center Bldg.

12,700,000

0.9%

14,900,000

Yodoyabashi Flex Tower

9,833,000

0.7%

10,300,000

Hiroshima Fukuromachi Bldg.

2,215,000

0.2%

2,350,000

NBF Matsuyama Nichigin-mae Bldg.

3,310,000

0.2%

3,890,000

Hakata Gion M-SQUARE

8,000,000

0.5%

12,700,000

NBF Kumamoto Bldg.
Total

4,500,000

0.3%

1,455,986,034

100%

3.5%

12.8%

4,880,000
24,600,000

20,500,000
19,500,000

4,330,000
100%

1,692,813,000"Acquisition Price" represents the price for which NBF acquired the property in principle.
As for the property to be acquired, the figure represents the purchase and sale price set forth in the relevant purchase and sale contract, etc. at the time ofthe decision to acquire the property (excluding miscellaneous acquisition costs, fixed assets tax, etc.).
(Note 2) "Value (Real Estate Appraisal Value)" represents the appraisal value as of the end of 2H/'23 (as of December 31, 2023.).
(Note 3) The building portion of "NBF Toranomon Bldg." will be disposed on January 6, 2025.
The "Acquisition Price" of the "NBF Toranomon Bldg. (Land with leasehold interest)" is the land acquisition price at the time of acquisition of the property.
The "Value (Real Estate Appraisal Value)" is the appraisal value of the entire property less the appraisal value of the building portion as of May 31, 2024.
(Note 4) The "Value (Real Estate Appraisal Value)" of GranTokyo South Tower is as of June 30, 2023.
(Note 5) The "Value (Real Estate Appraisal Value)" of Toyosu Bayside Cross Tower (Additional Acquisition) is as of November 30, 2023.
(Note 6) "Tsukuba Mitsui Bldg." will be disposed on September 30, 2024.

(Note 1)9