NEWS RELEASE
November 15, 2021
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 of Trust Beneficiary Interest
in Domestic Real Estate and Disposition 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,
decided today to acquire trust beneficiary interest in domestic real estate and dispose of domestic real estate(the “Acquisition” and the “Disposition” respectively; the “Transaction” collectively) as described below.
«Property to be acquired»
Property nameLocation

Acquisition price(planned)

Contract date

Transfer date(scheduled)

Otemachi Financial City
North Tower(additional acquisition)

Chiyoda‐ku,
Tokyo

JPY 6,380 million

November 15, 2021

November 30, 2021

Property nameLocation

Disposition
price (planned)

Contract date

Transfer date(scheduled)

Nagoya Misono Building

Nagoya‐shi
Aichi

JPY 2,629 million

November 15, 2021

March 1, 2022

«Property to be disposed of»1«Purpose of the Transaction»
In recent years, the roles and functions required of office buildings have been changing against the backdropof such factors as progress in information technology, growing environmental awareness and diversificationof working styles. With an eye on changes in the business environment under these new trends, JRE hasestablished a policy to strategically replace its portfolio properties from a proactive perspective, focusing on
the medium‐ to long‐term competitiveness of its portfolio.
The Transaction is part of this replacement strategy. The Acquisition was determined upon comprehensive
assessment which indicated that the addition of the property would contribute to enhancing the medium‐to long‐term competitiveness of the portfolio. Meanwhile, the Disposition was determined throughqualitative and quantitative assessment in view of profitability and asset value.
«Property to be acquired: Otemachi Financial City North Tower (additional acquisition)»
1. Outline of the Acquisition
Otemachi Financial City North Tower
Name of property(ratio of ownership interest: 1.42%)
Acquisition price (planned)
JPY 6,380 million
SellerSankei Building Co., Ltd. (see item 4 below)
Brokerage
Yes (party other than an interested party)
Date of decision
November 15, 2021
Date of contract
November 15, 2021
Date of transfer (scheduled)
November 30, 2021
Date of payment (scheduled) November 30, 2021
(Note) The ratio of ownership interest under “Name of property” indicates the ratio of co‐ownership interest in
the entirety of Otemachi Financial City (including South Tower). Through this additional acquisition, JRE’s
total percentage of ownership interest will be 4.80%.

2. Reason for the Acquisition
The property was built as part of the Otemachi 1‐chome, District 2, Type I Urban Redevelopment Project,
the second phase of the Chain Urban Renaissance Project in Otemachi, and comprises Otemachi Financial
City together with the South Tower built in unison with the property.
In particular, the following points were highly evaluated with regard to the Acquisition.
(1) Building and Facilities
Completed in 2012, the property is a relatively new large‐scale complex consisting of offices and shops, etc.
The office spaces are equipped with approximately 2,300 m2 of rectangular and column‐free floor plate
where a variety of layouts according to various business needs can be accommodated. Also, “St. Luke’s
MediLocus,” an annex of St. Luke’s International Hospital established on the lower floors of the South Tower,
contributes to not only convenience for workers but also local disaster prevention in providing early aid
and such for the surrounding area in times of emergency.
In terms of the environment, the property mitigates the impacts of Tokyo’s urban heat island with greenery
both onsite and offsite, adoption of water‐retentive coating, etc. and is contributing to reducing
environmental load such as through the introduction of high‐efficiency facilities and equipment.
(2) Location
The property is connected via underground passage to Otemachi Station through which five subway lines
pass and thus transportation access is excellent.
Moreover, there are advantages from a business standpoint as the property is located in Otemachi, aninternational financial center, and the above urban renaissance project is expected to further increase thearea’s value.
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3. Description of the Property to Be Acquired
Name of property
Type of specified assets
Type of ownership

Land

Building

Trustee
Location (Building address)
Usage

Otemachi Financial City North Tower(ownership interest ratio: 1.42%)
Trust beneficiary interest in domestic real estate
Trust beneficiary interest pertaining to 12.5% co‐ownershipinterest in right of site below:
・Land on which the right of site is established:
15 lots of land (the former land plots before replotting under
the land readjustment project)
・Ratio of right of site:
1‐5‐1 Otemachi, Chiyoda‐ku, Tokyo and 13 other lots
(provisional replotted land: 2A District 2‐1):
10,004,230/100,000,000
1‐5‐2 Otemachi, Chiyoda‐ku, Tokyo(provisional replotted land: 2A District 2‐2):
10,019,813/100,000,000
Trust beneficiary interest pertaining to 12.5% co‐ownershipinterest in sectional ownership interest below
・ Part of retail spaces (1st underground floor) (237.65 m2)
・ Data center section (4th through 1st underground floors and2nd through 4th floors (in registry: 4th through 1st
underground floors and 3rd through 5th floors) (6357.25 m2)(Note) The above areas include portions attached to thebuilding.
・ Office spaces (23rd through 27th floors (in registry: 24th
through 28th floors)) (11,488.95 m2)
・ Co‐ownership interest in portions treated as common areas
set forth in the management bylaws for the entirety ofOtemachi Financial City
*Building ownership share: 1.42%
Mitsubishi UFJ Trust and Banking Corporation
1‐9‐5 Otemachi, Chiyoda‐ku, Tokyo
Offices and shops

Area
Land

14,108.16 m2 (area for provisional replotted land)

Building

239,769.07 m2 (the gross floor area stated in the real property
registry)

Structure

S/SRC structure with flat roof, 35 stories above the ground and 4
basement levels

Typical floor area
Completion

2,369 m2
October 2012

Matters related to earthquake PML: 1.1% (based on the seismic risk assessment report by Tokio
resistanceMarine dR Co., Ltd.)
Mortgage
Appraisal value (Date of value)
Appraisal institution

No
JPY 7,070 million (As of November 1, 2021)
Daiwa Real Estate Appraisal Co., Ltd.
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Outline of lease
Total number of tenants

10

Total rent revenues

Undisclosed

Security deposit

Undisclosed

Total leased area

2,307 m2

Net rentable area

2,307 m2

Occupancy rate

Special notes

March 31, 2020
September 30, 2020
March 31, 2021
September 30, 2021

100.0%
100.0%
96.1%
100.0%

Scheduled date of acquisition

100.0%

Matters pertaining to the first option on the transfer of sectional
ownership interest in the property are provided for in the co‐owners agreement. Note that a right of site pertaining to thesectional ownership interest is established over said land.

(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.
・The property is located within the Otemachi Land Readjustment Project Area as part of the Tokyo
Urban Planning and Land Readjustment Project. The parcel number and the number of registeredlots of land described herein represent the 15 lots based on the former land plots on which the rightof site is established. Regarding land area, the total designated areas of the following provisional
replotted land plots are described.
①2A District 2‐1: 13,763.00 m2②2A District 2‐2: 345.16 m2
・“Area (Building)”, “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.
・The number of floors above ground in “Structure” refers to the same entry stated in the real property
registry, in which Otemachi Financial City North Tower and South Tower are collectively registered.
Otemachi Financial City North Tower has 31 stories above ground (30 stories indicated in thebuilding).
・“Total number of tenants”, “Total leased area” and “Net rentable area” are forecasts as of thescheduled acquisition date.
・Figures in “Outline of lease” are based on the data provided by the seller and are calculated only for
JRE’s interest to be acquired. However, “Total number of tenants” indicates the total number oftenants in the entire sectional ownership block to be acquired.
・“Total rent revenues” and “Security deposit” are undisclosed as the consent of co‐owners, etc. has
not been obtained.
・JRE’s interest includes the co‐ownership interest of the portions treated as common elements
pursuant to the management bylaws.
・NOI (Net Operating Income): JPY 173 million per year (an estimated amount)・Depreciation: JPY 44 million per year (an estimated amount)44. Outline of the Seller
Corporate nameLocation
Representative
Principal business
Paid‐in capital
Date of establishment
Net assets
Total assets
Major shareholders and theirshareholding percentages(as of Mar. 31, 2021)
Relationship with JRE or JRE‐AM
Capital relationship
Personnel relationships
Business relationshipApplicability to relatedparties

Sankei Building Co., Ltd.
1‐7‐2 Otemachi, Chiyoda‐ku, Tokyo
Kazunobu Iijima, President & CEO
Real estate business
JPY 28,120 million (as of Mar. 31, 2021)
June 11, 1951
(Consolidated): JPY 105,414 million (as of Mar. 31, 2021)(Consolidated): JPY 442,571 million (as of Mar. 31, 2021)
Fuji Media Holdings, Inc.: 100%

None
None
None
No

5. Status of Owners, Etc. of the Property
The property to be acquired is not an acquisition from a party having a special interest with JRE or JRE‐
AM.
6. Settlement Method, Etc.
(1) Acquisition funds
Loan and cash on hand
(Note) A loan for the Acquisition will be announced when determined.
(2) Settlement method
Lump‐sum payment at the time of transfer
7. Summary of Appraisal Report
Property nameAppraisal value
Appraiser
Date of value

Otemachi Financial City North Tower
JPY 7,070 million
Daiwa Real Estate Appraisal Co., Ltd
November 1, 2021
Item

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

7,070,000

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

7,240,000
270,290①Poten al rental income

282,296②Vacancy loss

12,005(2) Operating expenses

74,613
5

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

Maintenance andmanagement fee
Property management fee

32,871(note)

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

Utilities expenses

0

Repair expenses

2,921

Leasing cost

1,900

Not recorded because utilities expenses are expensed
from maintenance fees to the co-ownerʼs management
association
Estimated according to the average annual expenses
stated in the engineering report
Recorded referring to leasing costs of comparable
properties

36,881

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

37
0
195,677

Recorded based on the estimated amount

Property tax and city
planning tax
Insurance Premium
Other expenses(3) Net operating income [(1)‐(2)](4) Operating profit on lump‐sum payments(5) Capital expenditures(6) Net cash flow [(3)+(4) ‐ (5)](7) Capitalization rate

2,437

Estimated under the assumption of an interest rate of
1.0%

2,722

Estimated referring to the average annual
repair/renewal expenses stated in the engineering
report195,392
2.7%

Value indicated by the DCF method

No expense applicable to the said item

Estimated in reference to the market capitalization
rates of comparable properties

6,990,000

Discount rate

2.4%

Terminal capitalization rate

2.8%

Value indicated by the cost approach
Land ratio
Building ratio

6,560,000
83.8%
16.2%

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

Nothing in particularNote: 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 is disclosed 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 policy on the maintenance and managementof target investment properties. This could in turn undermine the interests of its unitholders. Accordingly, themaintenance and management fee and the property management fee are shown by the combined amount.

6«Property to be disposed of: Nagoya Misono Building»
1. Outline of the Disposition
Property name

Nagoya Misono Building

Disposition price (planned)

JPY 2,629 million

Estimated book value

JPY 1,293 million

Estimated gain on disposition

JPY 1,308 million

Buyer

Undisclosed (see item 4 below)

Brokerage

No

Decision dateNovember 15, 2021

Contract dateNovember 15, 2021

Transfer date (scheduled)

March 1, 2022

Payment date (scheduled)

March 1, 2022

・ The disposition price does not include disposition expenses, property tax and city
planning tax adjustments and consumption taxes.
(Notes)・ The estimated book value is the book value estimated as of today, calculated by
JRE‐AM on the basis of capital expenditures planned to be incurred by anddepreciation estimated as of the transfer date.
・ The estimated gain on disposition is the estimated amount as of today derived bysubtracting the estimated book value and disposition expenses (partially
undetermined) from the disposition price.

2. Reason for the Disposition
While the property has maintained a high occupancy rate, the trends in supply and demand for officespaces in the Fushimi area where the property is located need to be watched closely going forward.
Moreover, the property, which is nearly 30 years old, is expected to see increased repair and renewal
expenses, and due to such, maintaining and improving the medium‐ to long‐term competitiveness of theproperty as an office building has become a challenge.
With this backdrop and given that the buyer made a proposal of the transaction at the above disposition
price, JRE‐AM decided on the Disposition as a result of comparing the advantages of continuing to manage
the property over a medium‐ to long‐term with disposing it now as well as considering the capacity for
future internal growth.
Furthermore, it is assumed the gain on the disposition of the property will be partially reserved internallywith the remainder being paid as dividends for the fiscal period ending March 2022.

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3. Description of the Property to Be Disposed
Property name

Nagoya Misono Building

Type of specified assets

Domestic real estate

Type of ownership
Land

Ownership

Building

Ownership

Location (Building address)

1‐10‐21 Sakae, Naka‐ku, Nagoya‐shi, Aichi

Completion

September 1991

Usage
Appraisal value(Date of value)
Appraiser

Offices
JPY 1,760 million (as of November 1, 2021)
Daiwa Real Estate Appraisal Co., Ltd.

Outline of lease
Total number of tenants

17

Total rent revenues

JPY 78,562 thousand

Security deposit

JPY 113,210 thousand

Total leased area

3,448 m2

Net rentable area

3,448 m2

Occupancy rate

Special notes

September 30, 2019100.0%March 31, 2020

100.0%

September 30, 2020

100.0%March 31, 2021

100.0%

September 30, 2021

100.0%

None(Notes)・The property will be transferred in the form of a trust beneficiary interest in real estate after
concluding a real estate management and disposition trust agreement and establishing thetrust on the scheduled date of disposition.
・”Usage” shows the same entry stated in the real property registry.
・”Outline of lease” indicates the figures as of the end of the fiscal period ended September 2021.
4. Outline of the Buyer
The buyer is a domestic TMK. However, the buyer will not be disclosed as consent was not obtained.
Furthermore, the buyer does not fall under a party having a special interest with either JRE or JRE‐AM.
5. Settlement Method
Payment of 20% of the planned disposition price (not including consumption taxes) as a deposit on
December 1, 2021
Payment of the amount after subtracting the deposit from the payment amount including consumption
taxes on the transfer date
(Note) The deposit shall bear no interest.

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

Nagoya Misono Building
JPY 1,760 million
Daiwa Real Estate Appraisal Co., Ltd
November 1, 2021
Item

AmountDescription

Value indicated by the income approach

1,760,000

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

Value indicated by the direct
capitalization method(1) Operating income [①‐②]①Poten al rental income②Vacancy loss(2) Operating expenses
Maintenance andmanagement fee
Property management fee

1,820,000
155,076
163,788
8,712

Recorded on the basis of new rent levels of comparable
properties, etc.
Recorded on the basis of losses incurred in previous
years and average vacancy rates of comparable
properties, etc.

59,206
18,367(note)

Estimated to be the equivalent of 3.0% of rental income,referring to expenses incurred in previous years for the
maintenance and management fee and cases ofcomparable properties for property management fee
Estimated on the basis of expenses incurred in previous
years, taking into account occupancy rates
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

Utilities expenses

11,000

Repair expenses

13,106

Leasing cost

1,026

Property tax and city
planning tax

14,373

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

Insurance Premium

333

Recorded the actual insurance premium rate,
determining it to be reasonable
Recorded contingency fund based on the actual balanceand budget

Other expenses

1,000(3) Net operating income [(1)‐(2)](4) Operating profit on lump‐sum payments

95,869(5) Capital expenditures

11,253(6) Net cash flow [(3)+(4) ‐ (5)]85,558(7) Capitalization rate
Value indicated by the DCF method

942

4.7%

Estimated under the assumption of an interest rate of
1.0%
Estimated on the basis of the replacement cost stated in
the engineering report

Estimated in reference to the market capitalization
rates of comparable properties

1,730,000

Discount rate

4.5%

Terminal capitalization rate

4.9%

Value indicated by the cost approach
Land ratio
Building ratio

1,380,000
71.3%
28.7%

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)9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.

«Future Outlook»
For the operating performance forecasts for the fiscal period ending March 2022 (from October 1, 2021 toMarch 31, 2022) and the fiscal period ending September 2022 (from April 1, 2022 to September 30, 2022),
please see “Financial Results for the Fiscal Period Ended September 2021 (REIT)” released today.

This is the English translation of the announcement in Japanese dated November 15, 2021.
No assurance or warranties are given for the completeness or accuracy of this English translation.
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(Reference) map of Otemachi Financial City North Tower(Reference) Exterior of Otemachi Financial City North Tower

11