<Provisional translation>
June 24, 2016

For Immediate Release
REIT Issuer
Hankyu REIT, Inc. (Securities Code: 8977)
19-19 Chaya-machi, Kita-ku, Osaka
Yoshiaki Shiraki, Executive Director
Asset Management Company
Hankyu REIT Asset Management, Inc.
Yoshiaki Shiraki, President & Representative Director
Contact:
Hiroshi Yoshida
General Manager, IR and Public Relations Department
Email: hankyureit-ir@hankyu-rt.jp

Notice Concerning Acquisition of Domestic Real Estate
Hankyu REIT, Inc. (hereafter “Hankyu REIT”) hereby notifies Hankyu REIT Asset Management, Inc., the asset
management company that Hankyu REIT has selected to manage its assets (hereafter the “AssetManagement Company”), today decided to make the following acquisition of asset.

Details1.

Overview of Acquisition(1) Asset to be acquired:

Right of ownership(2) Property name:

KOHYO Onohara Store(3) Proposed acquisition price: 1,631,000,000 yen(excluding acquisition-related expenses, property tax, city planning tax
and consumption tax, among others)(4) Appraisal value:

1,640,000,000 yen (Date of appraisal: June 1, 2016)(5) Proposed acquisition date: July 1, 20162.

(6) Seller:

Hanshin Electric Railway Co., Ltd.

(7) Acquisition fund:Cash on hand

Reason for Acquisition
Hankyu REIT will acquire a community-based retail facility (hereafter the “Property”) developed by its
sponsor group company, Hanshin Electric Railway Co., Ltd., in order to attain steady growth, based on
the target and policy of asset management stipulated in its Articles of Incorporation. Furthermore, this will
be Hankyu REIT’s first direct acquisition from Hanshin Electric Railway Co., Ltd., one of sponsor groupcompanies.
Acquisition of the Property utilizes part of proceeds from the transfer conducted on April 8, 2016 with anintention to enhance portfolio quality and profitability through a series of such measures. Hankyu REIT
will seek sustainable growth by continuing to utilize the remaining proceeds for future new acquisition ofproperties and such.

1[Status of portfolio]

Number of properties
Average NOI yield(Note 1)
Average yield after
depreciation (Note 1)
Unrealized income/loss (Note 2)

End of 21st fiscal
period (end of
November 2015)
23 properties

Transfer property(Note 3)

The Property

After acquisition(Note 4)2 properties

1 property

22 properties

4.8%

3.8%

5.3%

4.9%

3.4%

0.6%

4.4%

3.6%

8,479 million yen-587 million yen-34 million yen

9,032 million yen

Note 1: Average NOI yield is calculated by dividing the sum total of (a) the difference between the real estate lease
operation income and real estate lease operation expenses and (b) depreciation, by total acquisition price.
Average yield after depreciation is calculated by dividing the sum total of difference between the real estatelease operation income and real estate lease operation expenses, by total acquisition price. Average NOI
yield and Average yield after depreciation are based on the actual figures for the 20th and 21st fiscal
periods for End of 21st fiscal period and for Transfer property; the figure stated in the appraisal report for
The Property; and figures by adding the figure in the appraisal report of the Property to the existing
properties’ actual figures for the 20th and 21st fiscal periods for After acquisition.
Note 2: Unrealized income/loss indicates the difference between the appraisal value and the book value. The figure
for Transfer property indicates a figure at the end of the 21st fiscal period; for The Property a figure
calculated based on the book value (expected value) which is the total of the proposed acquisition price andacquisition expenses that is to be recorded as asset pursuant to the accounting policy of Hankyu REIT; andfor After acquisition a figure obtained by adding/subtracting unrealized income/loss of Transfer property and
the Property to/from unrealized income/loss at the end of the 21st fiscal period.
Note 3: “Transfer property” refers to Namba-Hanshin Building and Richmond Hotel Hamamatsu that weretransferred on April 8, 2016. For the details of Transfer property, please refer to “Notice Concerning Transfer
of Domestic Real Estate Trust Beneficiary Interests (Namba-Hanshin Building and Richmond Hotel
Hamamatsu)” dated March 10, 2016.
Note 4: The figures for After acquisition are figures considering only the asset transfer and asset acquisition since
the end of the 21st fiscal period and may differ from actual figures.

Hankyu REIT evaluated the following points upon deciding on the acquisition of the Property.
Onohara-Toyonaka Road on which the Property stands along is a community road that allows east-west
mobility through the new town connecting Osaka Prefectural Route 1 (3-laned road) on the east side,running along Osaka monorail underneath its elevated railway tracks, and Osaka Prefectural Route 12
and 119 on the west side. The fine circular road network spreads into the residential area from the road,providing good access to the Property.
According to the national census in 2010, population by trade area is approximately 18,000 within 1km,
approximately 57,000 within 2km and approximately 129,000 within 3km. More detached home sales areobserved in the Onohara-nishi district to the west of the Property and the population is on an increasing
trend.
KOHYO, a tenant which opened on May 20, 2016, is a main brand of the food supermarkets operated by
KOHYO Co., Ltd., a consolidated subsidiary of AEON Co., Ltd. It has a reputation for its quality-oriented
items and fresh products (meat, fish, vegetables and ready-to-eat food), and differentiates itself fromother supermarket chains in the Kansai region by offering a sophisticated sales space.

2

3.

Details of Assets to be Acquired
Property name

KOHYO Onohara StoreSpecified asset type

Right of ownership

Proposed acquisition
price1,631,000,000 yen

Appraisal value

1,640,000,000 yen (Date of appraisal: June 1, 2016)(Appraisal organization: The Tanizawa Sogo Appraisal Co., Ltd.)

Location Address

6-2-1 Onoharahigashi, Minoh-shi, OsakaLand

Building
coverage

Building

80%

Month/Yearbuilt

May 2016
Steel-frame structure

Floor area ratio

200%

Structure/with flat roof andFloorsgalvanized alloy steel
sheet roofing / 2 floors

Zone use
Site area
Form ofownership

Neighborhood

Usecommercial district
4,479.14m

Total floor

2

areaForm ofRight of ownershipownership

Design company

Sanyo Construction Corporation

Construction company

Sanyo Construction Corporation

Building recognition
organization

Store
3,310.31m

2

Right of ownershipJapan ERI Co., Ltd.

Property manager

HankyuHanshin Building Management Co., Ltd. (planned)

Earthquake PML

5.3% (Engineering and Risk Service Corporation and OYO RMS(Evaluators)

Corporation）

CollateralNone

4. Overview of Leasing
Total number of tenants

1 (Note1)

Principal tenant

KOHYO Co., Ltd.

Annual rentNot disclosed (Note 2)

Leasable area

3,310.31m (Note 3)

Leased area

3,310.31m (Note 3)

Occupancy rate

100% (Note 4)

Security deposits

Not disclosed (Note 2)22

Note 1: The total number of tenants is considered as 1 because the property is entirely leased to tenants under the
master lease method.
Note 2: The Asset Management Company decided not to disclose these items as no consent has been obtained fromthe tenants for the disclosure of annual rent, etc., and there is a possibility that the disclosure of Annual rent
and Security deposits may affect competitiveness of Hankyu REIT and eventually damage the interests ofunitholders.
Note 3: The areas specified in the lease agreement as of today are indicated.
Note 4: The ratio of leased area to leasable area.

35. Overview of Seller
NameHanshin Electric Railway Co., Ltd.

Location

1-1-24 Ebie, Fukushima-ku, Osaka-shi, Osaka

Title and name of

Takaoki Fujiwara, President and Representative Director

representative
Capital29,384 million yen (Note)

Main business activities

Railway business, real estate business, sports and leisure business, etc.

Date of establishment

June 12, 1899

Net assets and total
assets in immediately
preceding fiscal year

Net assets: 131,814 million yen
Total assets: 358,324 million yen(as of March 31, 2016)

Major shareholders andHankyu Hanshin Holdings, Inc. 100%

their shareholding ratio

Relationship to Hankyu
REIT or AssetManagement Company

Capital relationships:
The Seller is a subsidiary of the parent company of the Asset Managementcompany and thus falls under interested parties, etc., as defined in theInvestment Trusts Act.
Personnel relationships:
1 director/employee has been seconded to the Asset Management Company
1 director/employee concurrently holds a position at the Asset Management
Company (as of today)
Business relationships:
Business relationship with Hankyu REIT
Rent income: 254,412 thousand yen
Rent paid: 17,250 thousand yen(21st fiscal period (June 1, 2015 – November 30, 2015))
Business relationship with the Asset Management Company
There are no business relationships to be stated between the AssetManagement Company and the Company.
Applicability as related party:
The Seller is a subsidiary of the parent company of the AssetManagement Company, and thus falls under a related party.

Note: The capital as of the date of this press release.

6. Status of Property Acquirers, etc.

Company name
Relationship to
special interested
partiesAcquisition
background,reasons, etc.
Acquisition date
Acquisition pricePrevious owner
Hanshin Electric Railway Co.,
Ltd.

Second previous owner
Parties other than those withspecial interests

See “5. Overview of Seller” above－

Development purpose－

March 31, 2015 (land)
Completed in May 9, 2016
(building)
Omitted because ownershipexceeds one year

7. Transactions with Interested Parties, etc.

4－－Hanshin Electric Railway Co., Ltd., which is the seller of KOHYO Onohara Store, falls under the definition of“interested party, etc.” in the Investment Trusts Act. Accordingly, the real estate purchase and saleagreement has been deliberated and approved by the investment management committee, the compliancecommittee and the board of directors meeting of the Asset Management Company in accordance with theAsset Management Company’s rules concerning transactions involving conflicts of interest set forth in the
management guidelines, investment management committee regulations, compliance committee
regulations, etc.
HankyuHanshin Building Management Co., Ltd., to which the property management operations for theProperty are planned to be consigned, falls under the definition of “interested party, etc.” in the Investment
Trusts Act. Accordingly, the property management agreement has been deliberated and approved by theinvestment management committee, the compliance committee and the board of directors meeting of theAsset Management Company in accordance with the Asset Management Company’s rules concerningtransactions involving conflicts of interest set forth in the management guidelines, investment management
committee regulations, compliance committee regulations, etc.
8.

Overview of Intermediaries
Not applicable.

9.

Settlement Method, etc.
Hankyu REIT plans to pay the sellers the acquisition price in full on the proposed acquisition date.

10.

Acquisition Schedule
June 24, 2016

Resolution of acquisition of the Property at the Asset Management Company’sboard of directors meeting

July 1, 2016

Conclusion of agreement, Payment and acquisition of the Property (proposed)

11. Future Outlook
Since the proposed acquisition date of the Property is July 1, 2016, the acquisition will have no impact on
the conditions surrounding the management of Hankyu REIT’s assets for the fiscal period ending May
2016 (22nd fiscal period: December 1, 2015 to May 31, 2016). Forecast to be released on July 15, 2016
for the management of Hankyu REIT’s assets for the fiscal period ending November 2016 (23rd fiscal
period: June 1, 2016 to November 30, 2016) reflecting the impact of the acquisition of the Property will beannounced in the “Financial Results for the 22nd Fiscal Period from December 1, 2015 to May 31, 2016.”••

The Japanese original document was distributed to press clubs within the Tokyo Stock Exchange (Kabuto Club), Osaka
Securities Exchange, and the Ministry of Land, Infrastructure, Transport and Tourism, and to the press club of the construction
trade newspaper of the Ministry of Land, Infrastructure, Transport and Tourism.
Hankyu REIT website: http://www.hankyu-reit.jp/eng/<Attached Materials>
・Reference Material 1

Overview of Appraisal Report

・Reference Material 2

Table of Real Estate Portfolio After the Asset Acquisition

・Reference Material 3

Property Photograph and Map of Location and Surrounding Area

5

・Reference Material 1<Overview of Appraisal Report>
Property name

KOHYO Onohara Store

Appraisal value

1,640,000,000 yen

Appraisalorganization

The Tanizawa Sogo Appraisal Co., Ltd.

Date of appraisal

June 1, 2016
Item

Value indicated by the income approach
Value using the direct capitalization method

Value

Basis for valuation

1,640,000,000 yen

Provisional calculation with weight on the DCF method
and verified from the direct capitalization method

1,660,000,000 yen－(1) Operating revenues (a + b − c)a. Income from rental fees, etc.
b. Other income

Not disclosed (Note)c. Loss from non-occupancy, etc.
(2) Operating costs (a + b + c + d + e + f + g)
a. Maintenance/Administrative fees,etc.
b. Utilities
c. Repairs

Not disclosed (Note)d. Property Management fees
e. Public charges and taxes
f. Casualty insurance premiums
g. Other expenses(3) Net operating income (NOI = (1) − (2))

86,007,071 yen－(4) Operating profit on deposit and security

1,020,000 yen

Assessment assuming a 2.0% investment
management yield(5) Capital expenditures

780,000 yen(6) Net cash flow (NCF = (3) + (4) − (5))

86,247,071 yen(7) Capitalization rate

5.2%

Value using the discounted cash flow (DCF) method

1,630,000,000 yen

Discount rate (1st – 10th year)

5.2%

Discount rate (11th year)

5.3%

Terminal capitalization rate

5.4%

Assessment based on engineering report, similarcases, etc.
－
Assessment taking as reference the market-derived
capitalization rate, etc., of similar real estate－
Assessment taking into account the appraised realestate’s regional characteristics, property-specificrisks, etc.
Assessment factoring in future uncertainties, etc., into
the capitalization rate

1,920,000,000 yen－

Land ratio

76.0%

－

Building ratio

24.0%

－

Value indicated by the cost approach

Special items to consider at thetime of making adjustments toprovisional calculations anddeciding the appraisal value

The subject real estate is a retail facility housing a food supermarket as its main tenant. It is locatedapproximately 2,300m northeast of Kita-senri Station on the Hankyu Senri Line standing along asemi-arterial road which is used as a main community road. Behind the road is an excellent residential
area mainly with medium-sized detached houses as well as some apartments, etc. In addition, withrelatively new land lots for sale in the vicinity, further influx of population is expected, making the areaan advantageous trade zone.
The appraisal value was decided by the value indicated by the income approach, based on the “rentalbuilding and its lot” category, setting the value indicated by the income approach assessed using both
the direct capitalization method and DCF method as the standard and verified from the value indicatedby the cost approach.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither a guarantee
nor an obligation, now or into the future, of a sale or purchase at that appraisal value.
Note: The Asset Management Company decided not to disclose these items as no consent has been obtained from the tenants for thedisclosure of rents, etc., the assessment is based on actual results for reference and there is a possibility that the disclosure of these
items will affect its competitiveness and damage the interests of unitholders.

6・Reference Material 2
Table of Real Estate Portfolio After the Asset Acquisition
Property
Code(Note)

Property Name

Facility(Type of
Use)

RegionAcquisition Date

Acquisition
Investment
Price
Ratio
(million yen)

HEP Five
R1 (K)(14% of the quasi co-ownership of thetrust beneficiary interests)

RetailKansaiFebruary 1, 2005

6,468

4.8%

R2 (K)

Kitano Hankyu Building

RetailKansaiFebruary 1, 2005

7,740

5.8%

R3 (K)Dew Hankyu Yamada

RetailKansaiFebruary 1, 2005

6,930

5.2%

R4 (K)

Takatsuki-Josai Shopping Center

RetailKansaiNovember 15, 2005

8,600

6.4%

R5 (K)

Nitori Ibaraki-Kita Store (site)

RetailKansaiMarch 29, 2006

1,318

1.0%

RetailOther

October 2, 2006

2,170

April 9, 2007

5

Hotel Gracery Tamachi

RetailOther

December 25, 2008

4,160

3.1%

R9 (K)

LaLaport KOSHIEN (site)
HANKYU NISHINOMIYA GARDENSRetailKansaiJanuary 22, 2009

7,350

5.5%

R11 (K)(28% of the quasi co-ownership of thetrust beneficiary interests)

RetailKansai

April 16, 2013

18,300

13.6%

RetailKansaiJune 27, 2013

8,100

6.0%

RetailKansaiJune 27, 2013

1,870

1.4%

RetailKansaiJune 4, 2014

3,100

2.3%

Kohnan Hiroshima Nakano-Higashi

R6

Store (site)

R8

R12 (K)R13 (K)R14 (K)

AEON MALL SAKAIKITAHANADA(site)
MANDAI Toyonaka Honan Store(site)DAILY QANAT Izumiya Horikawa
Marutamachi Store (site)

1.6%

R15 (K)

kotocross Hankyu Kawaramachi

RetailKansaiJune 4, 2014

2,770

2.1%

R16 (K)

LIFE Shimoyamate Store (site)

RetailKansaiJune 4, 2014

1,421

1.1%

R17 (K)

MANDAI Gojo Nishikoji Store (site)

RetailKansaiJune 24, 2014

4,182

3.1%

R18 (K)

KOHYO Onohara Store

RetailKansaiJuly 1, 2016

1,631

1.2%

86,11564.0%

Subtotal
O1

Shiodome East Side Building

O2 (K)

Hankyu Corporation
Head Office Building

OfficeOther

February 29, 2008

19,025

14.1%

OfficeKansai

April 10, 2013

10,200

7.6%

29,225

21.7%

Subtotal
M1 (K)M2
M3 (K)
M5

Ueroku F Building
Sphere Tower Tennozu

ComplexKansaiNovember 1, 2005

2,980

2.2%

(33% of the quasi co-ownership of thetrust beneficiary interests)

Complex

Other

October 2, 2007

9,405

7.0%

LAXA Osaka

ComplexKansaiJanuary 22, 2009

5,122

3.8%

Kita-Aoyama San cho-me Building

Complex

Other

November 12, 2013

1,680

1.2%

Subtotal

19,187

14.3%

Total

134,528100.0%

Note: The properties owned by Hankyu REIT are assigned codes and numbers classified by facility (type of use) andregion.The alphabets on the left represent the facility (type of use): (“R” is for retail-use facility, “O” is for office-use
facility and “M” is for mixed-use (complex) facility.) The numbers are assigned to each facility in the chronologicalorder of the acquisition. Also, the letter “K” in parentheses to the right of the numerals indicates that the property is
located in the Kansai region.

7

・Reference Material 3<Property photograph><Map>8