Creating peace of mind through honest and committed management.

[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

March 4, 2016
REIT Issuer
Ichigo Office REIT Investment Corporation (8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/english
Asset Management Company
Ichigo Real Estate Investment Advisors Co., Ltd.
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Hiroto Tajitsu, Head of Administration & Statutory Executive Officer
Tel: +81-3-3502-4891

Sale of Portfolio Assets(Ichigo Meieki Building, Ichigo Yokohama Nishiguchi Building)
Ichigo Real Estate Investment Advisors Co., Ltd. (IRE), the asset management company of
Ichigo Office REIT, today contracted to sell the Ichigo Meieki Building and the Ichigo
Yokohama Nishiguchi Building.
1. Sale Overview(1) Ichigo Meieki Building
Name
Asset Type/Property No.
Building Completion Date
Legal Form of Asset
Acquisition Date
(Original acquisition date)
Sale Price1
Forecast Book Value2
Difference between Sale
Price and Forecast Book
Value
Appraisal ValueContract Date
Transfer Date
Settlement Date
Transfer Method

Ichigo Meieki Building
Office O-33
March 22, 2001
Trust beneficiary interest in real estate (juekiken)
November 1, 2011 (Ichigo Office REIT merger)(March 15, 2006)
799,595,200 yen
737,993,309 yen
61,601,891 yen
719,000,000 yen (as of October 31, 2015)
March 4, 2016
April 15, 2016
April 15, 2016
Assignment of trust beneficiary interest in real estate1(2) Ichigo Yokohama Nishiguchi Building
Name
Asset Type/Property No.
Building Completion Date
Legal Form of Asset
Acquisition Date
(Original acquisition date)
Sale Price1
Forecast Book Value2
Difference between Sale
Price and Forecast Book
Value
Appraisal ValueContract Date
Transfer Date
Settlement Date
Transfer Method

Ichigo Yokohama Nishiguchi Building
Other Z-06
January 26, 1984
Trust beneficiary interest in real estate (juekiken)
November 1, 2011 (Ichigo Office REIT merger)(March 16, 2006)
1,150,000,000 yen
893,907,975 yen
256,092,025 yen
984,000,000 yen (as of October 31, 2015)
March 4, 2016
March 30, 2016
March 30, 2016
Assignment of trust beneficiary interest in real estate

1

Sale price excludes incidental expenses such as property, city planning, and consumption
taxes.
2
Forecast Book Value is an estimate for book value based upon the most recent book value(October 2015 fiscal period) adjusted for any capital expenditure and depreciation between
the most recent book value and the Settlement Date.
2. Sale Rationale
As part of its current Stage V of its Growth Strategy Roadmap (“Lay Foundation for Sustainable
Dividend Growth”), Ichigo Office REIT is executing on its strategy of “Increase portfolio sizeand scale and be smart in portfolio restructuring.”
Ichigo Office REIT regularly reviews its portfolio for profitability and makes a determination
whether it is in the best interest of shareholders to continue to own each asset based upon its
maintenance needs and competitiveness with nearby assets. In this case, Ichigo Office REIT
concluded that selling the assets is consistent with its Stage V objective of selling assets withlimited potential in order to improve its portfolio and increase shareholder value.

2

3. Asset Overview(1) Ichigo Meieki Building
Name
Legal Form of Asset
Location

Land

Property Right
Size
ZoningCoverage Ratio
Floor Area Ratio

Property Right
Use
Structure
Building
Total Floor Area
Construction Date
Number of Tenants
Monthly Rent3
Tenant Security Deposits3
Leasable Area
Leased Area
Occupancy
Acquisition PriceAppraiser
Date
Appraisal
Value

Asset Overview
Ichigo Meieki Building
Trust beneficiary interest in real estate (juekiken)
5-30-1 Meieki, Nakamura-ku, Nagoya City, Aichi
Prefecture
Ownership
374.39 m2

Commercial
80%
800%
Ownership
Office, Clinic, Retail
Steel 10F
2,716.21 m2
March 22, 2001
10 (as of March 4, 2016)
5,168 thousand yen (as of March 4, 2016)
48,926 thousand yen (as of March 4, 2016)
2,063.52 m2 (as of March 4, 2016)
2,063.52 m2 (as of March 4, 2016)
100.0 % (as of March 4, 2016)
837 million yen
Rich Appraisal Institute Co., Ltd.
October 31, 2015
719 million yen

3(2) Ichigo Yokohama Nishiguchi Building
Name
Legal Form of Asset
Location

Land

Property Right
Size
ZoningCoverage Ratio
Floor Area Ratio

Property Right
Use
Structure
Building
Total Floor Area
Construction Date
Number of Tenants
Monthly Rent3
Tenant Security Deposits3
Leasable Area
Leased Area
Occupancy
Acquisition PriceAppraiser
Date
Appraisal
Value
3

Asset Overview
Ichigo Yokohama Nishiguchi Building
Trust beneficiary interest in real estate (juekiken)
2-13-12 Minami-Saiwai, Nishi-ku, Yokohama City,
Kanagawa
Ownership
289.65 m2
Commercial
80%
500%
Ownership
Office
SRC 8F
1,315.19 m2
January 26, 1984
9 (as of March 4, 2016)
5,998 thousand yen (as of March 4, 2016)
134,508 thousand yen (as of March 4, 2016)
1,264.26 m2 (as of March 4, 2016)
1,264.26 m2 (as of March 4, 2016)
100.0 % (as of March 4, 2016)
903 million yen
Daiwa Real Estate Appraisal Co., Ltd.
October 31, 2015
984 million yen

Monthly Rent and Tenant Security Deposits refer to those stated in the rental contract.
Monthly Rent includes cost of utilities.

44. Appraisal Overview
Appraisal Overview
Asset Name

Ichigo Meieki Building

Appraisal Value

719,000,000 yen

AppraiserRich Appraisal Institute Co., Ltd.

Appraisal Date

October 31, 2015
AmountAppraisal Value
Value by Direct Capitalization
MethodIncome719,000,000 yen

Notes
Valuation determined via integrating a direct capitalization
valuation and DCF valuation

764,000,000 yen
74,661,364 yen

Maximum Obtainable
Rental Income

80,834,732 yen

Based on rental income, common area service income, parking
lot income, and other income

Vacancy Loss

6,173,368 yen

Based on mid- to long-term vacancy rate

Expenses

27,979,897 yen

Administrative andMaintenanceExpenses

6,456,000 yen

Based on similar assets and past actual amounts

Utility Expenses

8,463,000 yen

Based on similar assets and past actual amounts

Repair Expenses

3,083,000 yen

Based on engineering reports and similar assets

PM Fees

1,875,226 yen

Based on similar assets and past actual amounts

Leasing Brokerage
Fees
Taxes

560,821 yen
7,232,400 yen

Based on the expected turnover rate and tenant acquisition costs
for similar assets
Based on FY2015 actual amounts

Insurance Premiums

131,050 yen

Based on the standard of similar assets and past actual amounts

Other Expenses

178,400 yen

Based on materials provided by the client

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure
Net Profit
Cap Rate
Value via DCF Method

46,681,467 yen
1,002,219 yen

Based on 2.0% investment yield

7,194,000 yen
40,489,686 yen

Based on engineering reports and similar assets

5.3%

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual characteristics,
market trends, etc.

699,000,000 yen
5.2%

Based on transactions of similar assets and the yields of financial
assets with the asset’s individual characteristics taken into
account

Terminal Cap Rate

5.5%

Based upon risk-adjusted NOI

Value via Cost Approach

727,000,000 yen

Discount Rate

Land

45.1%

Property

54.9%
Notes

None

5

Appraisal Overview
Asset Name

Ichigo Yokohama Nishiguchi Building

Appraisal Value

984,000,000 yen

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Date

October 31, 2015
AmountAppraisal Value
Value by Direct Capitalization
MethodIncome984,000,000 yen

Notes
Valuation determined via integrating a direct capitalization
valuation and DCF valuation

982,000,000 yen
74,567,931 yen

Maximum Obtainable
Rental Income

78,345,296 yen

Based on rental income, common area service income, parking
lot income, and other income

Vacancy Loss

3,777,365 yen

Based on mid- to long-term vacancy rate

Expenses

19,206,878yen

Administrative andMaintenanceExpenses

4,359,816 yen

Based on similar assets and past actual amounts

Utility Expenses

5,277,672 yen

Based on similar assets and past actual amounts

Repair Expenses

2,011,000 yen

Based on engineering reports and similar assets

PM Fees

1,592,201 yen

Based on similar assets and past actual amounts

Leasing Brokerage
Fees
Taxes

481,821 yen
5,031,600 yen

Based on the expected turnover rate and tenant acquisition costs
for similar assets
Based on FY2015 actual amounts

Insurance Premiums

70,200 yen

Based on the standard of similar assets and past actual amounts

Other Expenses

382,568 yen

Based on materials provided by the client

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure
Net Profit
Cap Rate
Value via DCF Method

55,361,053 yen
923,391 yen
5,216,667 yen
51,067,777 yen
5.2%

Based on 2.0% investment yield
Based on engineering reports and similar assets
Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual characteristics,
market trends, etc.

985,000,000 yen
5.0%

Based on transactions of similar assets and the yields of financial
assets with the asset’s individual characteristics taken into
account

Terminal Cap Rate

5.4%

Based upon risk-adjusted NOI

Value via Cost Approach

563,000,000 yen

Discount Rate

Land

85.9%

Property

14.1%
Notes

None

6

5. Buyer Profile(1) Ichigo Meieki Building
Name

The buyer is a domestic operating company,4 but did notgive consent to disclose its name.

Relationship with Ichigo Office
REIT or IRE

The buyer does not have any capital, personnel, or business
relationship of note with Ichigo Office REIT or IRE. In
addition, the seller is not an interested party as defined in
the Enforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal regulations of
the Asset Management Company.

(2) Ichigo Yokohama Nishiguchi Building

4

Name

The buyer is a domestic operating company,4 but did notgive consent to disclose its name.

Relationship with Ichigo Office
REIT or IRE

The buyer does not have any capital, personnel, or business
relationship of note with Ichigo Office REIT or IRE. In
addition, the seller is not an interested party as defined in
the Enforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal regulations of
the Asset Management Company.

The buyers are two separate operating companies.

6. Broker Profile(1) Ichigo Meieki Building, (2) Ichigo Yokohama Nishiguchi Building
Name
Address
Representative
Principal Businesses
CapitalEstablished Date

Relationship with Ichigo Office
REIT or IRE

Brokerage Fee

Nomura Real Estate Urban Net Co., Ltd.
1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Seishi Miyajima, President
Real estate brokerage
1,000 million yen
November 6, 2000
The broker does not have any capital, personnel, or
business relationship of note with Ichigo Office REIT/IRE.
In addition, the seller is not an interested party as definedin the Enforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal regulations of
the Asset Management Company.
The broker did not give consent to disclose the fee.

7. Forward Commitment
The sale agreement for the Ichigo Meieki Building (hereafter, the “Conveyance Agreement”)
constitutes a forward commitment or similar agreement5 by Ichigo Office REIT as stipulated in
the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators,etc.” by the Financial Services Agency.
In the event of a violation of the provisions of the Conveyance Agreement by Ichigo Office
REIT or the seller, the other party shall have the right to terminate the Conveyance Agreement
and claim an amount equivalent to 20% of the purchase price as penalty for the agreement
termination. The Conveyance Agreement does not prohibit the other party to claim additional7

damages if the amount of damages exceeds the above-mentioned amount.
Since Ichigo Office REIT is the seller, it is highly unlikely that Ichigo Office REIT will not beable to fulfill its obligations under the Conveyance Agreement.
5

Refers to a postdated purchase and sale agreement under which payment and property
delivery shall be made at least 1 month after the conclusion of the agreement, or any otheragreement similar thereto.

8. Use of Sale Proceeds
Ichigo Office REIT will allocate part of the sale proceeds towards prepayment of existing loans
and the rest will be retained as cash-on-hand for future strategic use including asset acquisitions.
Details of the loan prepayment will be announced as soon as they have been decided.
9. Future Outlook
The impact of the sale on Ichigo Office REIT’s earnings and dividend forecasts for the April
2016 and October 2016 fiscal periods is minimal, and therefore the forecasts are unchanged.
The capital gains from the sale will be allocated to dividend reserve to maintain stability of
future dividends.

8

Portfolio Reference Information
1. Post-Sale Portfolio Summary
Before Sale (A)After Sale (B)

95.9%1

95.9%

Difference(B-A)－

83.0%/17.0%

83.4%/16.6%+0.4%/-0.4%

Occupancy
Diversification by Area –Greater Tokyo Area/Other Areas2
1
2

As of January 31, 2016
“Greater Tokyo Area” refers to “Central Tokyo” and “Tokyo Metropolitan Area.” “Other
Areas” refers to “Four Major Regional Cities” and “Other Regional Cities.” The ratio is basedon acquisition prices.

2. Post-Sale Portfolio Assets
Area1

Acquisition
Price2(mm yen)% ofPortfolio3

O-02 Ichigo Nishisando Building

Central Tokyo

3,254

2.0%

O-03 Ichigo Mita Building

Central Tokyo

2,740

1.7%

O-04 Ichigo Nanpeidai Building

Central Tokyo

1,920

1.2%

O-05 Ichigo Hanzomon Building

Central Tokyo

1,550

0.9%

O-06 Ichigo Hijirizaka Building

Central Tokyo

1,200

0.7%

O-07 Ichigo Shibuya Kamiyamacho Building

Central Tokyo

1,505

0.9%

O-08 Ichigo Akasaka 5 Chome Building

Central Tokyo

735

0.4%

O-09 Ichigo Shibakoen Building

Central Tokyo

1,100

0.7%

O-10 Ichigo Ebisu Nishi Building

Central Tokyo

1,917

1.2%

O-11 Ichigo Ginza 612 Building

Central Tokyo

1,773

1.1%

O-12 Ichigo Uchikanda Building

Central Tokyo

1,140

0.7%

O-14 Ichigo Yotsuya 4 Chome Building

Central Tokyo

550

0.3%

O-15 Ichigo Tameike Building

Central Tokyo

580

0.4%

O-16 Ichigo Jimbocho Building

Central Tokyo

1,820

1.1%

O-17 Ichigo Hakozaki Building

Central Tokyo

1,150

0.7%

O-18 Ichigo Kudan 2 Chome Building

Central Tokyo

763

0.5%

O-19 Ichigo Kudan 3 Chome Building

Central Tokyo

844

0.5%

O-20 Ichigo Gotanda Building

Central Tokyo

5,060

3.1%

O-21 Ichigo Shin Yokohama Building

Tokyo Metropolitan Area

1,816

1.1%

O-22 Ichigo Minami Ikebukuro Building

Tokyo Metropolitan Area

1,460

0.9%

O-23 Ichigo Nakano North Building

Tokyo Metropolitan Area

764

0.5%

O-24 Ichigo Eitai Building

Tokyo Metropolitan Area

1,490

0.9%

O-25 Ichigo Yokosuka Building

Tokyo Metropolitan Area

971

0.6%

O-26 Ichigo Ikejiri Building

Tokyo Metropolitan Area

2,030

1.2%

O-27 Ichigo Nishi Ikebukuro Building

Tokyo Metropolitan Area

639

0.4%

O-28 Ichigo Nishi Gotanda Building

Central Tokyo

765

0.5%

No.

Property9

Acquisition
Price2(mm yen)% ofPortfolio3

2,160

1.3%

4,705

2.9%

6,710

4.1%

O-38 Ichigo Toyamaeki Nishi Building

Tokyo Metropolitan Area
Four Major Regional
CitiesFour Major Regional
CitiesOther Regional Cities

1,650

1.0%

O-39 Ichigo Mirai Shinkin Building

Other Regional Cities

1,158

0.7%

O-40 Ichigo Saga Building

Other Regional Cities

659

0.4%

O-42 Ichigo Takamatsu Building

Other Regional Cities

3,010

1.8%

O-46 Ichigo Kanda Nishikicho Building

Central Tokyo

2,130

1.3%

O-47 Ichigo Akiharaba North Building

5,500

3.4%

1,940

1.2%

O-49 Ichigo Kanda Ogawamachi Building

Central Tokyo
Four Major Regional
CitiesCentral Tokyo

2,210

1.4%

O-50 Ichigo Hatchobori Building

Central Tokyo

1,905

1.2%

O-51 Ebisu Green GlassCentral Tokyo

5,900

3.6%

O-52 Ichigo Omori Building

Central Tokyo

3,850

2.4%

O-53 Ichigo Takadanobaba Building

Central Tokyo

1,580

1.0%

O-54 Ichigo Omiya Building

Tokyo Metropolitan Area

3,430

2.1%

O-55 Ichigo Sagamihara Building

Tokyo Metropolitan Area

1,174

0.7%

O-56 Ichigo Ofuna Building

Tokyo Metropolitan Area

2,000

1.2%

O-57 Ichigo Sendai East Building

Other Regional Cities

1,840

1.1%

O-58 Ichigo Kumamoto Building

Other Regional Cities

1,450

0.9%

O-59 Ichigo Jingumae Building

Central Tokyo

7,200

4.4%

O-60 Ichigo Shibuya Dogenzaka Building

Central Tokyo

3,650

2.2%

O-61 Ichigo Hiroo Building

Central Tokyo

3,960

2.4%

O-62 Ichigo Sasazuka Building

Central Tokyo

4,780

2.9%

O-63 Ichigo Nihonbashi East Building

Central Tokyo

4,700

2.9%

O-64 Ichigo Sakurabashi Building

Central Tokyo

2,500

1.5%

O-65 Ichigo Shinkawa Building

Central Tokyo

2,360

1.4%

O-66 Ichigo Kudan Building

Central Tokyo

3,190

2.0%

O-67 Ichigo Higashi Gotanda Building

Central Tokyo

3,660

2.2%

O-68 Axior Mita

Central Tokyo

1,800

1.1%

O-69 Ichigo Higashi Ikebukuro Building

Tokyo Metropolitan Area

4,570

2.8%

O-70 Koriyama Big-i (Office Section)

Other Regional Cities

1,660

1.0%

O-71 Ichigo Kawasaki Building

Tokyo Metropolitan Area

1,750

1.1%

Subtotal - Office (59 Properties)

140,277

85.9%

No.

Area1

Property

O-29 Ichigo Kichijoji Building
O-34 Ichigo Sakae Building
O-37 Ichigo Marunouchi Building

O-48 Ichigo Sakaisuji Honmachi Building

10

Area1

Acquisition
Price2(mm yen)% ofPortfolio3

Central Tokyo

1,360

0.8%

Central Tokyo

701

0.4%

R-09 Ichigo Serviced Apartments Ginza

Central Tokyo

946

0.6%

Z-02 Ichigo Fiesta Shibuya

Central Tokyo

1,970

1.2%

Z-03 Ichigo Burg Omori

Tokyo Metropolitan Area

3,218

2.0%

Z-04 Ichigo Pagoda Asakusa

Tokyo Metropolitan Area

1,640

1.0%

Z-05 Ichigo Machida East Building
Ichigo Sapporo Minami 2 Nishi 3
Z-07
Building

Tokyo Metropolitan Area
Four Major Regional
CitiesFour Major Regional
CitiesOther Regional Cities

1,310

0.8%

558

0.3%

638

0.4%

1,210

0.7%

Central Tokyo

2,400

1.5%

Tokyo Metropolitan Area

1,620

1.0%

Tokyo Metropolitan Area

2,430

1.5%

Tokyo Metropolitan Area

1,700

1.0%

Tokyo Metropolitan Area
Subtotal - Others (15 Properties)

1,400
23,101

0.9%
14.1%

Total (74 Properties)

163,378

100.0%

Motoazabu Holdings GK TK Equity Interest

1,000

－

Ikenohata Holdings GK TK Equity Interest

1,000

－

2,000

－

No.

Property

Ichigo Serviced Apartments
Takanawadai
R-06 B-SITE Hamamatsucho
R-04

Z-08 Ichigo Daimyo Balcony
Z-09 Konami Sports Club Izumi Fuchu
Ichigo Shibuya Bunkamura Dori
Z-10
Building
Twicere Yokohama Isogo
Z-11(Retail Section)
Z-12 Lions Square Kawaguchi
Ichigo Shin Yokohama Arena Dori
Z-13
Building
Z-14 Ichigo Kamata Building

Investments in
Securities

Total (2 TK Equity Interests)
1“Central Tokyo” refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. “Tokyo
Metropolitan Area” refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, and Saitama
Prefectures. “Four Major Regional Cities” refers to Osaka, Nagoya, Fukuoka, and Sapporo.
2
Acquisition Price excludes consumption tax. For the 39 assets acquired via the REIT merger on
November 1, 2011 (O-02 to O-42 and Z-02 to Z-08), the appraisal value is shown as of October 31,
2011.
3% of Portfolio is the Acquisition Price of the Total Acquisition Price and rounded to the nearest second
decimal place.

11