<Provisional translation>
March 10, 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:
Akihisa Nakano
General Manager, Corporate Planning Dept.
Email: hankyureit-ir@hankyu-rt.jp

Notice Concerning Transfer of Domestic Real Estate Trust Beneficiary Interests(Namba-Hanshin Building and Richmond Hotel Hamamatsu)
Hankyu REIT, Inc. (hereafter “Hankyu REIT”) hereby notifies that Hankyu REIT Asset Management, Inc., theasset management company that Hankyu REIT has selected to manage its assets (hereafter the “AssetManagement Company”), today decided to make the following transfer of assets (hereafter the “Transfer”).
Details1.

Overview of Transfer
Name of
Namba-Hanshin Building Richmond Hotel Hamamatsu
asset to be transferredType ofReal estate
Real estate
asset to be transferredtrust beneficiary interests
trust beneficiary interests
Acquisition date
January 22, 2009
January 22, 2009
Facility (Type of use)
Mixed-use (complex) facility
Retail-use facility
Proposed transfer price
3,230 million yen
2,200 million yen(Note 1)
Book value (Note 2)
3,836 million yen
1,454 million yen
Difference between−606 million yen
745 million yen
proposed transfer priceand book value
Appraisal value (Note 3)
2,600 million yen
2,160 million yen
Proposed contract date
March 11, 2016
Proposed transfer date
April 8, 2016 (Note 4)
Proposed transferee
See “5. Overview of Transferees” later in this document

Total

―

5,430 million yen
5,290 million yen
139 million yen
4,760 million yen―

Note 1: Excluding transfer-related expenses, the amount of the settlement of property tax and city planning tax, andconsumption tax, among others.
Note 2: The projected value at the proposed transfer date, rounded down to the nearest million yen.
Note 3: Appraisal organization of Namba-Hanshin Building: Daiwa Real Estate Appraisal Co., Ltd. (Date ofappraisal: February 20, 2016)
Appraisal organization of Richmond Hotel Hamamatsu: Rich Appraisal Institute Co., Ltd. (Date of appraisal:
February 20, 2016)
Note 4: In the agreement to transfer beneficiary interests concluded with the respective proposed transferee theparties have agreed to such provisions as that, in cases where the agreement on transfer pertaining to trust
beneficiary interests of the other party ends or expires for any reason whatsoever, said agreement totransfer beneficiary interests shall also cease to be effective as a matter of course.

1

2.

Reason for Transfer
With establishment of a new Investment Planning Office at the Asset Management Company in April
2015 for the purpose of enhancing portfolio management and such, Hankyu REIT has been continuing toconsider measures for enhancement of portfolio quality as part of its growth strategies.
Under such circumstances, pursuing a stronger portfolio structure through bulk transfer of the concerned
two properties—the yield after depreciation of which is lower than the average and the level ofcontribution to distributions of which is low out of the properties in the Hankyu REIT portfolio—this time
and then aiming for new property acquisition using the transfer proceeds are judged to serve to realize
the growth strategies of Hankyu REIT.
Furthermore, the Transfer is expected to not only enhance the average NOI yield and the average yield
after depreciation but also eliminate the unrealized loss of Namba-Hanshin Building and thereby lead togreater unrealized income of the entire portfolio.
[Impact on portfolio]

Number of properties

Before transfer

After transfer

Difference(A)(B) (Note 5)(B − A)

23 properties

21 properties−2 properties−6,410 million yen

Asset scale (Note 1)

139,307 million yen 132,897 million yen

Unrealized income/loss (Note 2)

8,479 million yen

9,066 million yen

587 million yen

Average NOI yield (Note 3)

4.8%

4.9%

0.1 ptAverage yield after depreciation (Note 4)

3.4%

3.6%

0.2 ptNote 1: Asset scale is the sum total of acquisition price.
Note 2: The difference between appraisal value and book value as of the end of the 21st fiscal period (end of
November 2015).
Note 3: The figure arrived at when the sum total of the amount of property lease operating revenues minus property
lease operating costs plus depreciation is divided by acquisition price based on actual results for the 21stfiscal period (fiscal period ended November 2015) and budget for the 22nd fiscal period (fiscal period
ending May 2016) (the figures of the forecasts of the conditions surrounding the management of Hankyu
REIT’s assets for the fiscal period ending May 2016 announced in the “Financial Results for the 21st Fiscal
Period from June 1, 2015 to November 30, 2015”; the same shall apply hereafter).
Note 4: The figure arrived at when the sum total of the amount of property lease operating revenues minus property
lease operating costs is divided by acquisition price based on actual results for the 21st fiscal period (fiscal
period ended November 2015) and budget for the 22nd fiscal period (fiscal period ending May 2016).
Note 5: Calculated on the basis that there are no changes in cash flows, appraisal value, etc., from those before
transfer in the case of the properties other than the properties to be transferred.

3.

Use of Transfer Proceeds
The planned use of transfer proceeds is allocation to funds for acquisition of new properties in the future,
etc.

2

4.

Details of Assets to be Transferred(1) Namba-Hanshin Building
Property nameNamba-Hanshin BuildingType

Trust beneficiary interests

Location (Address)

4-7-14 Namba, Chuo-ku, Osaka

Acquisition date

January 22, 2009

Building coverage

80%

Month/Year built

March 1992

Floor area ratio

1,000%

Structure / Floors

Steel-frame, steel-frame
reinforced concrete structurewith flat roof / 2 undergroundLand

levels, 11 floors

Building
Zone use

Commercial district

Use

Office, store andparking garage space2

Lot area

971.61 m

Form of ownership

Right of ownership2

Total floor area

9,959.01 m

Form of ownership

Right of ownership

Tenant details
Total number of tenants

1 (20) (Note 1)

Total rent income

266 million yen (Note 2)

Security deposits

139 million yen (Note 3)

Leasable area

9,959.01 m (6,452.69 m ) (Note 4)

Leased area

9,959.01 m (6,192.06 m ) (Note 4)

Occupancy rate

100% (96.0%) (Note 5)

2

2

2

2

Note 1: The total number of tenants is considered as 1 because the property is entirely leased to tenants under the
pass-through master lease method. In parentheses is the total number of end-tenants as of today.
Note 2: The sum total of the actual figures for the 20th fiscal period (fiscal period ended May 2015) and the 21stfiscal period (fiscal period ended November 2015).
Note 3: The sum total of the amount specified in the lease agreement as of today. The amount is rounded down to
the nearest million yen. Storage, parking garage space, machinery room, etc., are not included.
Note 4: The leasable area and leased area are both the contractual area specified in the master lease agreement.
The leasable area in parentheses is the area thought to be leasable to end-tenants as of today and theleased area in parentheses is the sum total of the contractual area specified in the lease agreement with
end-tenants as of today. Storage, parking garage space, machinery room, etc., are not included.
Note 5: The ratio of leased area to leasable area as of today. The occupancy rate in parentheses is the occupancy
rate calculated on the basis that the leasable area is the area thought to be leasable to end-tenants as oftoday and the leased area is the leased area specified in the lease agreement with end-tenants as of today.
The rates are rounded to one decimal place. Storage, parking garage space, machinery room, etc., are notincluded.

3

(2) Richmond Hotel Hamamatsu
Property nameRichmond Hotel Hamamatsu

Type

Trust beneficiary interests

Location (Address)

218-1 Motoshiro-cho, Naka-ku, Hamamatsu

Acquisition date

January 22, 2009

Building coverage

80%

Month/Year built

September 2002

Floor area ratio

600%

Structure / Floors

Steel-frame structure withflat roof / 11 floors

Land

Building
Zone use

Commercial district

Lot area

1,264.43 m

Form of ownership

Right of ownership

2

Use

Hotel and store

Total floor area

6,995.33 m (Note 1)

Form of ownership

Right of ownership2

Tenant details
Total number of tenants

1 (Note 2)

Principal tenant

RNT HOTELS Co., Ltd.

Total rent income

Undisclosed (Note 3)

Security deposits

Undisclosed (Note 3)

Leasable area

6,995.33 m (Note 4)

Leased area

6,995.33 m (Note 4)

Occupancy rate

100% (Note 5)222

Note 1: Including the area of 4 annexed buildings (1 parking garage and 3 changing rooms) totaling 114.24 m .
Note 2: The total number of tenants is considered as 1 because the property is entirely leased to tenants under the
master lease method.
Note 3: The Asset Management Company decided not to disclose these items as no consent has been obtained
from the tenants for the disclosure of rents, etc. and there is a possibility that the disclosure of actual Total
rent income and Security deposits will affect its competitiveness and damage the interests of unitholders.
Note 4: The area specified in the registry as of today.
Note 5: The ratio of leased area to leasable area as of today.

5.

Overview of Transferees(1) Namba-Hanshin Building
The name, etc., are undisclosed as consent has not been obtained from the transferee, which is adomestic corporation. Please note that there are no capital relationships, personnel relationships orbusiness relationships to be specially noted between Hankyu REIT or the Asset Management Company
and the Corporation. In addition, the Corporation does not fall under the definition of “related party.”(2) Richmond Hotel Hamamatsu
Name

MG Leasing Corporation

Location

2-1-1 Hitotsubashi, Chiyoda-ku, Tokyo

Title and name ofrepresentative

Shigemasa Sonobe, President & CEO

Business activities

General leasing and related business4

Capital

4,500 million yen

Date of establishment

December 1993

Net assets

10,467 million yen

Total assets

111,587 million yen

Major shareholders andtheir shareholding ratio

Sumitomo Mitsui Finance and Leasing Co., Ltd. (Shareholding ratio: 55%)
Marubeni Corporation (Shareholding ratio: 45%)

Relationship between Hankyu REIT or the Asset Management Company and the Company
Capitalrelationships
Personnel
relationships
Businessrelationships
Applicability as
related party, etc.
6.

There are no capital relationships to be stated between Hankyu REIT or the
Asset Management Company and the Company.
There are no personnel relationships to be stated between Hankyu REIT or
the Asset Management Company and the Company.
There are no business relationships to be stated between Hankyu REIT or
the Asset Management Company and the Company.
The Company does not fall under the definition of “related party” of Hankyu
REIT or the Asset Management Company.

Overview of Intermediary
The name, etc., are undisclosed as consent has not been obtained from the intermediary, which is adomestic corporation. Please note that there are no capital relationships, personnel relationships orbusiness relationships to be specially noted between Hankyu REIT or the Asset Management Company
and the Corporation. In addition, the Corporation does not fall under the definition of “related party.”

7.

Transfer Schedule
March 10, 2016

Resolution of transfer of two properties at the Asset Management
Company’s board of directors’ meeting

8.

March 11, 2016 (planned)

Conclusion of agreement to transfer beneficiary interests of two properties

April 8, 2016 (planned)

Transfer of two properties

Transactions with Interested Parties, etc.
Not applicable.

9.

Future Outlook
Concerning the forecasts of 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)
announced in the “Financial Results for the 21st Fiscal Period from June 1, 2015 to November 30,
2015” dated January 22, 2016, as a result of factoring in the net gain on transfer, intermediary feesand other transfer-related expenses, etc., arising from the Transfer, the impact on property lease
operating income, etc., is expected to be minimal and the distribution forecast is not expected toincrease by 5% or more and there is thus no revision to the forecasts for such.

•

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.

5•Hankyu REIT website: http://www.hankyu-reit.jp/eng/<Attached Materials>
・Reference Material 1

Overview of Appraisal Report of Assets to be Transferred・Reference Material 2

Table of Real Estate Portfolio After the Asset Transfer

6

・Reference Material 1
Overview of Appraisal Report of Assets to be Transferred(1) Namba-Hanshin Building
Property nameAppraisal value
Appraisal organization
Date of appraisal

Namba-Hanshin Building
2,600,000,000 yen
Daiwa Real Estate Appraisal Co., Ltd.
February 20, 2016
Item

Value indicated by the income approach
Value using the direct capitalization method(1) Operating revenues (a + b − c)Value

Basis for valuation

2,600,000,000 yen
2,730,000,000 yen
304,305,192 yena. Income from rental fees, etc.

265,391,520 yen

Assessment based on the appropriate rent level
recognized to be stable over the medium to long termb. Other income

58,550,200 yen

Recorded utilities and other income

c. Loss from non-occupancy, etc.

19,636,528 yen

Assessment based on assumption that the occupancy ratelevel will be stable over the medium to long term(2) Operating costs (a + b + c + d + e + f)

136,454,181 yena.Maintenance/Administrative fees, etc.

46,175,300 yen

Assessment based on existing agreement content andtaking as reference the maintenance/administrative fees,
etc. level of similar real estateb. Utilities

34,771,400 yen

Assessment based on past actual amount and taking as
reference the utilities level of similar real estatec. Repairs

14,610,150 yen

Assessment based on level of repair expenses of similar
real estated. Public charges and taxes

37,671,080 yen

Assessment based on actual amounte. Casualty insurance premiums

1,400,451 yen

Assessment based on actual amountf. Other expenses

1,825,800 yen

Recorded by assessment of property management fees(3) Net operating income (NOI = (1) − (2))

167,851,011 yen(4) Operating profit on deposit and security

2,938,300 yen

Assessment taking into consideration the investment
management yield from the perspective of both theinvestment management aspect and procurement aspect(5) Capital expenditures

34,090,350 yen

Assessment based on level of renewal expenses of similar
real estate(6) Net cash flow (NCF = (3) + (4) − (5))

136,698,961 yen(7) Capitalization rate

Value using the discounted cash flow (DCF) method

5.0%

Assessment taking into consideration the appraised realestate’s location conditions, building conditions,agreement conditions, etc. in a comprehensive manner

2,540,000,000 yen

Discount rate

4.8%

Assessment taking into consideration the long-term
financial instruments investment yield, borrowing interest
rates, risks as an investment target, etc.

Terminal capitalization rate

5.2%

Assessment taking into consideration the appraised realestate’s location conditions, building conditions andagreement conditions in a comprehensive manner

Value indicated by the cost approach

2,630,000,000 yen

Land ratio

56.4%

Building ratio

43.6%

Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value

The appraisal decision was based on an assessment of the value indicated by the income approach using both thedirect capitalization method and DCF method at 2,600,000,000 yen and taking as reference the value indicated by
the cost approach. As a result, the appraisal value was decided at 2,600,000,000 yen.

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 the appraisal
conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards, etc. There arecases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estate appraiser
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.

7(2) Richmond Hotel Hamamatsu
Property nameAppraisal value
Appraisal organization
Date of appraisal

Richmond Hotel Hamamatsu
2,160,000,000 yen
Rich Appraisal Institute Co., Ltd.
February 20, 2016
Item

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

Value

Basis for valuation

2,160,000,000 yen
2,180,000,000 yen(1) Operating revenues

Undisclosed (Note)(2) Operating costs

Undisclosed (Note)(3) Net operating income (NOI = (1) − (2))

132,768,795 yen(4) Operating profit on deposit and security

2,960,000 yen

Assessment based on management of security deposits
with annual return of 2.0%

(5) Capital expenditures

11,615,000 yen

Assessment based on engineering report(6) Net cash flow (NCF = (3) + (4) − (5))

124,113,795 yen(7) Capitalization rate
Value using the discounted cash flow (DCF) method

5.7%
2,150,000,000 yen

Discount rate

5.5%

Terminal capitalization rate
Value indicated by the cost approach

5.9%
1,410,000,000 yen

Land ratio

25.7%

Building ratio

74.3%

Special items toconsider at the time ofmaking adjustments toprovisional calculations
and deciding theappraisal value

The subject real estate is Richmond Hotel Hamamatsu located about 1 km north-west of Hamamatsu Station on JR
Lines (Tokaido Shinkansen and Tokaido Main Lines) and about 160 m south-east from Hamamatsu City Hall. The
subject neighborhood is a commercial district in which store, office and other buildings are concentrated along
National Route 152. The value using the DCF method was based on assessment of the value indicated by the
income approach using the DCF method with the discount rate and terminal capitalization rate used to calculate thepresent value as 5.5% and 5.9%, respectively. The value using the direct capitalization method was based on
assessment of the value indicated by the income approach using the direct capitalization method with net income in
the first fiscal year as the standard net income of a stable period and capitalization rate as 5.7%. In this appraisal, theappraisal value was decided with a weighting towards the value using the DCF method.

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 the appraisal
conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards, etc. There arecases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estate appraiser
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 disclosure of these items
will affect its competitiveness and damage the interests of unitholders.

8・Reference Material 2
Table of Real Estate Portfolio After the Asset Transfer
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

4.9%

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

6.5%

R5 (K)

Nitori Ibaraki-Kita Store (site)

RetailKansaiMarch 29, 2006

1,318

1.0%

RetailOther

October 2, 2006

2,170

April 9, 2007

5

Kohnan Hiroshima Nakano-Higashi

R6

Store (site)

1.6%

R8

Hotel Gracery Tamachi

RetailOther

December 25, 2008

4,160

3.1%

R9 (K)

LaLaport KOSHIEN (site)

RetailKansaiJanuary 22, 2009

7,350

5.5%

R10

Richmond Hotel Hamamatsu
HANKYU NISHINOMIYA GARDENSRetailOther

Transfer--

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

RetailKansai

April 16, 2013

18,300

13.8%

RetailKansaiJune 27, 2013

8,100

6.1%

RetailKansaiJune 27, 2013

1,870

1.4%

RetailKansaiJune 4, 2014

3,100

2.3%

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

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

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%

84,484

63.6%

Subtotal
O1

Shiodome East Side Building

O2 (K)

Hankyu Corporation
Head Office Building

OfficeOther

February 29, 2008

19,025

14.3%

OfficeKansai

April 10, 2013

10,2007.7%

29,22522.0%

Subtotal
M1 (K)

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

7.1%

M3 (K)LAXA Osaka

ComplexKansaiJanuary 22, 2009

5,122

3.9%

M4 (K)

Namba-Hanshin Building

ComplexKansaiTransfer--

Kita-Aoyama 3 cho-me Building

Complex

Other

November 12, 2013

1,680

1.3%

Subtotal

19,187

14.4%

Total

132,897

100.0%

M2

M5

Note: The properties owned by Hankyu REIT are assigned codes classified by facility (type of use) and region.
The letters 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 chronological order of theacquisition. Also, the letter “K” in parentheses to the right of the numerals indicates that the property is located in
the Kansai region.

9