<For translation purposes only>
December 18, 2008
For Immediate Release
REIT Issuer
Hankyu REIT, Inc. (Securities Code: 8977)
19-19 Chaya-machi, Kita-ku, Osaka
Mineo Yamakawa, Executive Director
Asset Management Company
Hankyu REIT Asset Management, Inc.
Mineo Yamakawa, President & Representative Director
Contact:
Hideo Natsuaki
General Manager, Investor Relations Dept.
Email: ir@hankyu-rt.jp

Notice Concerning the Acquisition of Asset

Hankyu REIT, Inc. (hereafter “Hankyu REIT”) hereby notifies today that the acquisition of the asset mentioned below has
been decided.

Details1.

Overview of Acquisition(i)

Acquired asset:

Real estate trust beneficiary interests

Trustee:Mizuho Trust and Banking Co., Ltd.

(ii)

Property name:

Hotel Gracery Tamachi(iii)

Proposed acquisition price: 4,160 million yen(excluding acquisition-related expenses, property tax, city planning tax andconsumption tax, among others)

2.

(iv)

Proposed acquisition date: December 25, 2008(v)

Seller:

E-HOTELS-SB GK(vi)

Acquisition funds:

Debt financing and corporate funds

Reason for Acquisition
Based on policies and properties under management as stipulated in our articles of incorporation, we areacquiring a property to obtain steady growth with a focus on an overall balanced portfolio. The information
about this property was provided by Hankyu Hanshin Holdings Group and this acquisition shows the resultsthat can be achieved through collaboration with the aforesaid Group.
As announced in the press release dated November 28, 2008, “Notice Concerning Partial Changes inInvestment Policy,” Hankyu REIT has partially changed its investment policy to enable investment in hotels.
Also, with the decision to acquire this property, we have made the following assessments:(i)Location Conditions
The property is a brand new hotel for business travelers, which was completed in September 2008 andopen for business in October. It is approx. 5 minutes walking distance from JR Tamachi Station andapprox. 7 minutes walking distance from the Mita subway station. From Mita Station, it is possible to1

reach Haneda Airport in 30 minutes via the Toei Asakusa Line which connects directly to Keikyu Line.
Also, JR Shinagawa Station, an access point on the Tokaido Shinkansen, is just one stop from JRTamachi Station, making the hotel very convenient for business travelers from anywhere in Japan.
The property was developed as a redevelopment project of the site of the former Shibaura Campus ofShibaura Institute of Technology. In April 2009, a new urban block, “Shibaura RENASITE," which will
become three urban-block zones comprised of the property and the adjacent university and officebuilding, is scheduled to be inaugurated. After this occurs, the function that the property will provide thecity into the future, is expected to come into greater play.
(ii)

Property Characteristics
The property is a hotel for business travelers with a total of 216 rooms, mostly single, each exceeding
15m2. Moreover, Fujita Kanko Inc., the hotel’s operator, has given the hotel the newly released hotel
brand “Gracery.” The Gracery brand is one rank higher than the existing “Washington Hotels” brand. It is
expected to perform well due to its competitive strength as a hotel for business travelers that is one rank
higher in facility grade.
The property, with respect to contract format and tenants, conforms to the Hankyu REIT’s investment
policy on hotels that was partially revised on November 28, 2008.

3.

Details of the Acquired Asset
Property name

Hotel Gracery Tamachi

Specific asset type

Trust beneficiary interest

Proposed acquisition price

4,160 million yen

Appraised value

4,160 million yen (As of October 15, 2008)(Appraisal organization：Rich Appraisal Institute K.K.)

Location Address

3-8-1 Shibaura, Minato-ku, Tokyo

Land

60％

Building coverage

Building

Month/Year

September 2008

Built
Floor area ratio

400％

Structure/Floors

Reinforced concrete, steel
frame reinforced concrete,steel frame structure withdeck roof and 11 floors.

Zone use

Light-industrial zone

Use

Hotel,Parkinggarage

space
Total floor
area
Form ofownership

2Lot area

1,724.01 m

Form of ownership

Right of ownership

Design company

Toda Corporation, and Nikken Sekkei Ltd.

Construction company

Toda Corporation

Building recognition
organization

The Building Center of Japan

Author of engineering report

Takenaka Corporation (November 2008)

Property manager

Hankyu Hanshin Building Management Co., Ltd.

PML ofanalysis
Collateralearthquake

risk

4,979.95 m2
Right of ownership

10.2% (Evaluator: Engineering & Risk Services Corporation, OYO RMSCorporation）
None24.

Overview of Leasing
Total number of tenants

1 (Note 1)

Principal tenant

Fujita Kanko Inc.

Annual rent

— (Note 2)

Rental area capacity

4,943.66 m2 (Note 3)

Actual rented area

4,943.66 m2 (Note 3)

Occupancy rate

100% (Note 4)

Security Deposit— (Note 2)

Note 1: The total number of tenants as of the date of this press release. The parking garage space is not included.
Note 2: The information is not permitted to be disclosed (tenant request).
Note 3: Rental area capacity and actual rented area are the figures expressed by the building lease agreement asof the date of this press release. The parking garage space is not included.
Note 4: The ratio of actual rented area to rental area capacity.

5.

Overview of the Seller
Trade name

E-HOTELS-SB GK

Location of headquarters

Tokyo Kyodo Accounting Office, 3-1-1 Marunouchi, Chioda-ku, Tokyo
Representative Company: Garden Capital Limited Liability Intermediary Corporation

Representative
Executor of Duties: Masato Kaida
Capital1 million yen
E-HOTELS-SB GK is a special purpose company in which Garden Capital Limited

Major shareholdersLiability Intermediary Corporation has made investments and Hankyu Corporationand others have invested for the part of anonymous associations.
1. Acquisition, ownership, disposal, lease and management of real estate

Main business activities

2. Acquisition, ownership, and disposal of trust beneficiary interests of real estate
3. Operations related to or of ancillary relationship to, the above operations
Hankyu Corporation, shareholder (100% holding) of asset management company,

Relation to Hankyu REIT

Hankyu REIT Asset Management, Inc., is an interested party as defined by theor asset management

Investment Trust and Investment Corporation Law, and although it comprises a part ofcompany

anonymous associations investing in the seller, it does not qualify as a special
interested party.

Note: Above capital represents the amount as of the date of this press release.

6.

Transactions with Interested Parties, etc.
The property management operations have been consigned to Hankyu Hanshin Building Management Co., Ltd.
Because the aforesaid company falls under the definition of “interested party, etc,” in the Investment Trust Law,
the conditions concerning the conclusion of the property management agreement, have been scrutinized andapproved by the investment management committee, the compliance committee, and the board of directors of
the asset management company in accordance with the asset management company’s rules concerningtransactions involving conflicts of interest, investment management committee regulations, and compliancecommittee regulations, among others.
Details on intermediaries are described in “7. Overview of Intermediaries.”

37.

Overview of Intermediaries(1) Broker: Hankyu Investment Partners, Inc.
Because Hankyu Investment Partners falls under the definition of “interested party, etc,” in the Investment TrustLaw, the conditions concerning consignment of brokerage operations, have been scrutinized and approved by
the investment management committee, the compliance committee, and the board of directors of the asset
management company in accordance with the asset management company’s rules concerning transactions
involving conflicts of, interest, investment management committee regulations, and compliance committee
regulations, among others.

(2) Payment fee: 83,200,000 yen（excluding consumption tax）

8.

Acquisition Process
December 18, 2008

Resolution approving execution of the agreement at the asset managementcompany's board of directors' meeting.

December 25, 2008

Proposed conclusion of agreement to transfer real estate trust beneficiaryinterests and proposed acquisition

9.

Future Outlook
There is no effect from the acquisition of this property on Hankyu REIT's operating conditions in the 7th fiscalperiod (ending November 2008). Forecasts for operating conditions in the 8th fiscal period (ending May 2009)
will be publicly disclosed when financial statements and results for the 7th fiscal period are released.

•The Japanese original document was distributed to press clubs within the Tokyo Stock Exchange (Kabuto Club), Osaka
Securities Exchange, Ministry of Land, Infrastructure and Transport, and to the press club of the construction trade newspaperof the Ministry of Land, Infrastructure and Transport.

•Hankyu REIT website: http://www.hankyu-reit.jp/<Attached materials>
・Reference material 1

Overview of Appraisal Report

・Reference material 2

Table of Real Estate Portfolio After the Acquisition of the Property

・Reference material 3

External photograph, information guide4

Reference Material 1
Overview of Appraisal Report
PROPERTY NAME

Hotel Gracery Tamachi

Appraised Value

4,160,000,000 yen

Appraisal Organization

Rich Appraisal Institute Co., Ltd.

Date of Appraisal

October 15, 2008
ItemValue

Earned Price *Basis for Valuation

4,160,000,000 yen

Earned Price from Direct Capitalization Method

4,210,000,000 yen(i) Operating Return (a + b - c)

238,728,188 yen

a Income from rental fees

243, 600,192 yenb Other income

Assessment based on the building lease agreement

0 yen

c Loss from non-occupancy

4,872,004 yen(ii) Operating Costs (a + b + c + d + e + f)a Maintenance/administrative fees, etc.

Consideration of potential occupancy rate supposing abundled lease package.

32,331,869 yen
4,036,800 yen

b Utilities

Assessment based on the building managementagreement

0 yen

c Repairs

0 yen

d Public charges and taxes

26,398,789 yen

For land, assessment based on actual amount in 2008
For building, Rich Appraisal Institute Co., Ltd.’s
assessment based on engineering report.

e Casualty insurance premiums

1,896,280 yen

Assessment based on quoted amounts

f Other expenses

0 yen(iii) Net operating income (NOI = (i) - (ii))

206,396,319 yen(iv) Gain on investment of lump-summoney

4,589,328 yen

Assessment based on annual security deposit of 2.0%(v) Capital expenditures

4,580,940 yen

Rich Appraisal Institute Co, Ltd.’s assessment basedon engineering report.

(vi) Net cash flow (NCF = (iii) + (iv) - (v))

206,404,707 yen(vii) Capitalization rate

4.9％

Price based on discounted-cash-flow method

4,140,000,000 yen

Discount rate

4.9％

Terminal capitalization rate

5.0％

Estimated Price*

3,690,000,000 yen

Land ratio

62.1％

Building ratio

37.9％

Special items to consider at the time of making
adjustments to provisional calculations anddeciding the appraisal price/value

The property is the “Hotel Gracery Tamachi,” an 11-floor (above ground) hotel forbusiness travelers located approx. 400m south-east of Tamachi Station on the JR
Yamanote Line and approx. 500m south-east of Mita Station on the Toei-Mita Line andToei-Asakusa Line. The area surrounding the property is a mixture of commercial andresidential buildings, including medium- to high-rise retail/office buildings, and multi-unit
dwellings etc. When the earned price is assessed using the DCF-method the discountrate and terminal capitalization rate used to calculate the present value are 4.9% and5.0% respectively. When the earned price is assessed using the direct capitalization
method, the 11th year of net cash flow is used as the standard net cash flow of a stable
period and the capitalization rate is 4.9%. When appraising the value of this property,
priority was placed on assessing the earned price by the DCF method.

The appraised value of real estate is an indication of the opinion of the value by the appraiser of the real estate in question and isconducted by an appraisal in accordance with the law and standards related to real estate appraisals at the time of the appraisal. Theremay be cases where an appraisal of the exact real estate is conducted again, and because of factors such as timing of the appraisal andthe appraisal method used by the appraiser, a different value may result. Furthermore, the appraised valuation of real estate is neither aguarantee nor an obligation, now or into the future, of a sale or purchase of the real estate.

5Reference Material 2
Table of Real Estate Portfolio After the Acquisition of the Property
BuildingNo.

Property Name(Note)

Facility(Type of Use)

Area

Acquisition (TBD)
Date

Acquisition
Price(Actual/Proposed)(in millions)

Investment
Rate

R1 (K)HEP Five

RetailKansai

February 1, 2005

23,10019.9%

R2 (K)

Kitano Hankyu Building

RetailKansai

February 1, 2005

7,740

6.7%

R3 (K)Dew Hankyu Yamada

RetailKansaiFebruary 1, 2005

6,930

6.0%

R4 (K)

Takatsuki-Josai Shopping Center

RetailKansai

November 15, 2005

8,600

7.4%

R5 (K)

Nitori Ibaraki-Kita Store (site)

RetailKansai

March 29, 2006

1,318

1.1%Other

October 2, 2006

2,170

areas

April 9, 2007

KansaiMarch 15, 2007

19,30016.6%

December 25, 2008

4,160

3.6％

73,323

63.2%

February 29, 2008

19,025

16.4%

May 16,2008

11,2009.7%

30,225

26.1%

November 1, 2005

2,980

2.6%

October 2, 2007

9,405

8.1%

Subtotal

12,385

10.7%

Total

115,933

100.0%

R6R7 (K)R8

Kohnan Hiroshima
Nakano-Higashi Store (site)

RetailNU chayamachi

RetailHotel Gracery Tamachi

Retail

Other
areas

Subtotal0102 (K)Shiodome Eastside Building
Hankyu Corporation Head Office
Building

OtherOfficeareasOfficeKansai

Subtotal
M1 (K)
M2

Ueroku F Building

Multi-purpose

Sphere Tower Tennoz

Multi-purpose

KansaiOtherareas

1.9%

5

Note: Numbers represent the classification for properties owned by Hankyu REIT by each region and type of use.
Letters represent retail (“R”), office (“O”) and multi-purpose (“M”).
Numbers represent the chronological order of the acquisition of each facility. Also, the letter “K” in parentheses to the right ofthese numbers indicates that the property is located in the Kansai region.

6Reference Material 3
Photograph of External Facade

Map of Location and Surrounding Area7