May 27, 2022
FOR IMMEDIATE RELEASE

Activia Properties Inc.
21-1, Dogenzaka 1-chome, Shibuya-ku, Tokyo
Nobuhide Kashiwagi
Executive Director(Code: 3279)
Asset Management Company
TLC REIT Management Inc.
Masaoki Kanematsu
President & CEOInquiries
Kazuyuki Murayama
General Manager of Strategy Department
Activia Management Division(Tel: +81-3-6455-3377)

Notice of Disposition of Asset (Luogo Shiodome)
Activia Properties Inc. (“API”) announces that TLC REIT Management Inc. (“TRM”), to which API
entrusts its asset management operations, decided today to dispose of an asset (the “Disposition”).
Details are as follows.

1. Overview of the Disposition
(i)
(ii)
(iii)

(iv)

Property
nameAsset to bedisposed ofDisposition： Luogo Shiodome

price(1) ¥1,822 million(20 % co-ownershipinterest)： ¥ 4,339 million in total(1) ¥873 million(20 % co-ownershipinterest)： ¥4,770 million in total(1) ¥948 million

Book value(Note)(v)(vi)

Difference
betweendisposition
price andbook value
Date of sales
contract： Trust beneficiary interest in the property as a trust asset(the “Asset to be Disposed of”)
： ¥9,110 million in total (excluding expenses for the disposition, consumption tax, etc.)： May 27, 2022 (plan)

1(2) ¥2,642 million(29 % co-ownershipinterest)(3) ¥4,646 million(51 % co-ownershipinterest)(2) ¥1,257 million(29 % co-ownershipinterest)(3) ¥2,208 million(51 % co-ownershipinterest)(2) ¥1,384 million(3) ¥2,437 million

(vii)(viii)(ix)

Date ofdelivery(plan)
Acquirer ofproperty
Settlement
method： (1) November 30, 2022
(2) May 31, 2023
(3) June 1, 2023
(20 % co-ownership(29 % co-ownership(51 % co-ownershipinterest)
interest)
interest)： Not disclosed because the acquirer approval was not obtained.
： Amount specified for each installment to be received at the time of each delivery(Note) Anticipated book value as of each date of delivery.

2. Reasons for the Disposition
API will conduct the Disposition with aim to improve the profitability of its future portfolio, as a part of theasset replacement strategy which is a pillar of its growth strategy. The portfolio after the Disposition will consistof 45 properties with the total acquisition price of 538.7 billion yen.
Luogo Shiodome, the Asset to be Disposed of, is a Tokyo office property located close to Shiodome Stationand Shimbashi Station. API has managed the Asset to be Disposed of for almost 10 years since its IPO in June
2012. During the time, taking advantage of its superior location, the Asset to be Disposed of maintained a highoccupancy rate while capturing relocation demand of affiliated companies and business partners of large corporate
tenants having previously been in large-scale buildings near Shiodome Station. It has contributed API’s internal
growth during the growth period of the Tokyo office market enjoying a stable and high profitability.
Though, API determined the Disposition after having considered the underlying yield level and further stability
and growth potential of the Asset to be Disposed of. This determination was based on the findings that to utilize
the fund from the Disposition for future asset replacement will lead the enhancement of the unitholder value forthe medium to long term.
Since the Disposition will be made at a total price significantly higher than the book value and appraisal value,
we will control over the distribution amount by disposing of the Asset to be Disposed of in three installments,
taking into consideration the future portfolio management situation, etc. We will utilize the proceeds from theDisposition to stabilize and increase the unitholder value over the medium to long term, while retaining a part ofthe capital gain as internal reserves and for other purposes.
API will continue its asset replacement strategy by leveraging the networks of both TRM and the sponsor.

3. Overview of the Asset to be Disposed ofProperty nameSpecified asset category
Trustee
Trust establishment date
Trust maturity date

Transportation

Location (address)
Land

Location

Luogo Shiodome
Trust beneficiary interest
Mitsubishi UFJ Trust and Banking Corporation
March 18, 2011
June 30, 2022
4-minute walk from Shiodome Station on the Toei Oedo Line and theTokyo Waterfront New Transit Waterfront Line (Yurikamome)
5-minute walk from Shimbashi Station on the JR Tokaido, Yamanote,
Keihin Tohoku and Yokosuka Lines, the Tokyo Metro Ginza Line,
Toei Asakusa Line, and the Tokyo Waterfront New Transit Waterfront
Line (Yurikamome)
3-3 Higashi-Shinbashi 2-chome, Minato-ku, Tokyo51-6 Higashi-Shinbashi 2-chome, Minato-ku, Tokyo and other(Note 1) (Note 2)2

Building to landratio
Plot ratio
Use district
Land area
OwnershipCompletion date
Structure
Registered usage
Gross floor area
Parking facility
Ownership
Property managementcompany
Master lessee
Anticipated disposition priceAppraisal value(Date of value estimate)Appraisal agency
Building

Earthquake PML
Hypothecation
Lease overview (Note 4)
Total leasable area
Total leased area
Occupancy rate
Number of tenants
Annual rent
Expected NOI
Tenant leasehold andsecurity deposits

Remarks

100.00% (Note 3)
700.00%Commercial district
1,134.44 m2 (Note 1)
Owned
July 30, 2004 (Note 1)
Steel frame, steel framed reinforced concrete; 11 floors above and one
floor underground (Note 1)
Office (Note 1)
8,242.61 m2 (Note 1)
28
Owned
Tokyu Community Corp.
Tokyu Community Corp. (pass-through)¥9,110 million in total¥6,350 million(November 30, 2021)
Daiwa Real Estate Appraisal Co., Ltd.
0.3%
(According to an earthquake PML report of Sompo Risk Management Inc.)

None
4,476.35 m23,540.65 m2
79.1%
5¥279 million¥176 million¥254million
The property is anticipated to be co-owned by API and the acquirer for aperiod of time from November 30, 2022 to June 1, 2023 (plan). API willconclude with the acquirer an agreement on trust beneficiary coownership interest when the property will be co-owned.
Under the agreement, the co-owner will be required not to dispose of thewhole or a part of the trust beneficiary interests except as agreed in thesales contract pertaining to the Disposition and to have prior agreement ina written form by other parties for the creation of pledge or security
interest, or disposition other than sale.

(Note 1) The data is based on the registry.
(Note 2) The lot numbers are reflected the disposal of the converted land.
(Note 3) The figure includes the margin since the building receives the margin due to the fire-resistant building on fire
prevention district.
(Note 4) The figures are as of November 30, 2021. The expected NOI is the amount equivalent to two times the actual
NOI for the period ended November 30, 2021.

3

4. Profile of the acquirerAs an unavoidable case, the name shall not be disclosed because the approval from the acquirer was notobtained. There is no capital, personnel or business relationship required to be stated between the acquirer andAPI, TRM, and the related parties or affiliates of API and TRM. Further, none of the relevant person or affiliateof the acquirer or the acquirer itself is a related party of API or TRM.
5. Outline of intermediary(1) Outline of intermediary
Name
Address
Management
Amount of capital
Establishment
Business Description

Tokyu Livable, Inc.
1-9-5 Dogenzaka, Shibuya-ku, Tokyo
Yoichi Ota, Representative Director and President¥1,396 million
March 10, 1972
1. Real estate brokerage (purchase/sale and leasing brokerage)
2. Seller agency (sales representation for new condominiums/houses
built for sale, etc.)
3. Property sales (new condominium lots, renovation services, etc.)
Relationships with API and TRM
Capital relationship
Wholly-owned subsidiary of Tokyu Fudosan Holdings Corporation, the
100% parent of Tokyu Land Corporation, the 100% parent of TRM
Personnel relationship None
Business relationship None
Related party status
Tokyu Livable, Inc. is not a related party of API, but is a related partyof TRM under TRM’s internal rules and the Act on Investment Trusts
and Investment Corporations (“ITA”).
(2) Breakdown and amount of intermediary fees¥273 million in total (excluding consumption tax, etc.).

6. Schedule of the Disposition (plan)
Determination of disposition
Conclusion of sales contract
Payment reception date
Disposition dateNovember 30, 2022
November 30, 2022

May 27, 2022
May 27, 2022
May 31, 2023
May 31, 2023

June 1, 2023
June 1, 2023

7. Transaction with related parties
The intermediary for the Disposition is a wholly-owned subsidiary of Tokyu Fudosan Holdings Corporation,
which is the parent of Tokyu Land Corporation, the parent company of TRM.
The intermediary is a related party as provided for in Article 201 of the ITA and Article 123 of the Enforcement
Ordinance of the ITA as well as “Rules Regarding Related-party Transactions”, the internal rules of TRM.
Therefore, TRM carried out the appropriate procedures as provided for in the rules regarding transactions with arelated party for entrusting the intermediary to that party.

4

8. Items regarding forward commitment contracts, etc.
(1) Asset to be Disposed of under forward commitment contracts, etc. (Note)
Property No.

Property nameDate of sales contract

Scheduled disposition dateNovember 30, 2022

TO-5

Luogo Shiodome

May 27, 2022

May 31, 2023
June 1, 2023

(Note) Forward commitment contracts, etc. are defined as “a postdated purchase and sale contract under which settlement anddelivery shall be made at least one month after the conclusion of the contract, or any other contract similar thereto”.

(2) Impact on API’s finance when forward commitment contracts, etc. cannot be executed
With respect to the sales contract pertaining to the disposition of the Asset to be Disposed of, in case there areany violations by API or the acquirer concerning the provisions which have a material adverse effect on theachievement of the purpose of the sales contract, API or the acquirer can urge the acquirer or API, as applicable,
to fulfill the obligation in a fixed period of time. When the acquirer or API does not correct the violations withinthat time frame, API or the acquirer may cancel the contract and make a claim to the acquirer or API as damages,
an amount equivalent to 20% of the sales price.
Also, API does not anticipate that the conditions stipulated in the contract pertaining to the Disposition will
have a material impact on its financial condition as it is a seller for the disposition of the Asset to be Disposed ofand has no funding risk that the acquirer assumes for fulfillment of payment obligation.

9. Outlook
There will be no impact of the Disposition on the API’s management performance for the fiscal period ending
May 31, 2022 (the 21st fiscal period, from December 1, 2021 to May 31, 2022) as the Disposition is scheduled
to be made on November 30, 2022, May 31, 2023, and June 1, 2023. As to the fiscal period ending November 30,2022 (the 22nd fiscal period, from June 1, 2022 to November 30, 2022), we may not revise the forecast ofmanagement performance as we plan to retain a part of the capital gain from the Disposition as internal reserves.
The updated forecast of management performance for the fiscal period ending November 30, 2022 (the 22ndfiscal period, from June 1, 2022 to November 30, 2022) will be announced in the Financial Report for the Fiscal
Period Ending May 31, 2022, which is scheduled to be released on July 14, 2022.

10.

Outline of appraisal report
Property nameAppraisal value
Appraisal agency
Date of value estimate

Luogo Shiodome¥6,350 million
Daiwa Real Estate Appraisal Co., Ltd.
November 30, 2021

5

Capitalization
Value by the direct capitalization
methodOperating revenue
Potential gross income

Amount(millionyen)
6,350

Estimated by the DCF method and the direct
capitalization method.

6,470
346
366

Loss (e.g. vacancy)

19

Operating expense
Maintenance expenses

10926

Property managementfee
Utility expenses
Repair expenses(Note)

25
7

Leasing expenses
Taxes and public dues
Insurance
Other expenses
NOI (Net Operating Income)Investment income from
temporary deposits
Capital expenditure

24402237
2

NCF (Net Cash Flow)
Capitalization rate

226
3.5%

Value by the DCF method
Discount rate

6,300
3.3%

133.7%
Terminal capitalization rate
Value by the cost method
Land ratio
Building ratio

Remarks

Estimated based on receivable rent, etc. for a medium
to long term.
Estimated based on operational level for a medium tolong term.
Estimated based on the past records, etc.

Estimated based on the past records, etc.
Estimated based on the annual average of repair
expenses on the Engineering Report (ER).
Estimated based on the past records, etc.
Estimated based on the past records, etc.
Estimated with replacement cost of building.
Estimated based on the past records, etc.
Estimated with investment yield as 1.0%.
Estimated based on the annual average of capital
expenditure on the Engineering Report (ER).
Estimated based on transaction cases of similar realestates with reference to discount rate withprofitability and the fluctuation risk of principal.
Estimated with reference to a comparison withtransaction cases of similar real estates, yield/ interest(rate) of financial assets.
Estimated based on capitalization rate with reference
to marketability when the holding period by API
terminates.

6,020
79.6%
20.4%

Other facts which the appraisal agency has taken
into account for the appraisal report

Nothing in particular(Note) By disclosing maintenance expenses and property management fee separately, the other businesses of the entrusted companies
with operations for both building management and property management could be influenced. As a result, it could impede API’s
efficient outsourcing and harm the value for API’s investors. Thus, the above shows the sum of maintenance expenses andproperty management fee.

<Exhibit>
Portfolio after the Disposition*Website of API: https://www.activia-reit.co.jp/en/

6Category

ExhibitPortfolio after the Disposition

Property
No.
UR-1
UR-3

Location

Acquisition date(%)(Note 1)Tokyu Plaza Omotesando
Harajuku

Shibuya, Tokyo

June 13, 2012

Q plaza EBISU

Shibuya, Tokyo

June 13, 2012

8,430

1.6

Kyoto, Kyoto

June 13, 2012

8,860

1.6

Kobe, Hyogo

December 19, 2013

21,3304.0(Note 2)

8.4

UR-7
UR-8

A-FLAG SAPPORO

Sapporo, Hokkaido

December 19, 2013

4,4100.8

UR-9

A-FLAG SHIBUYA

Shibuya, Tokyo

December 19, 2013

6,370

1.2

UR-10

Q plaza SHINSAIBASHI

Osaka, Osaka

December 16, 2015

13,3502.5

UR-11

A-FLAG KOTTO DORI

Minato, Tokyo

December 20, 2016

4,370

0.8

Minato, Tokyo

December 2, 2016

4,700

0.9

Shibuya, Tokyo

January 6, 2017

2,2800.4

UR-13

A-FLAG BIJUTSUKAN
DORI
A-FLAG DAIKANYAMA
WEST

UR-15

DECKS Tokyo Beach

Minato, Tokyo

January 5, 2018

UR-16

Tokyu Plaza Ginza (Land)

Chuo, Tokyo

January 10, 2019

UR-17

Q plaza HARAJUKUShibuya, Tokyo

January 10, 2019

UR-12

Subtotal

Tokyo Office Properties

45,000Investment
ratio

Kyoto Karasuma Parking
Building
Kobe Kyu Kyoryuchi
25Bankan

UR-5

Urban Retail Properties

Property nameAcquisition
price(Millions ofyen)

12,740(Note 2)37,500(Note 2)

13,200(Note 2)

2.4
7.0
2.5

182,540

33.9

TO-1

TLC Ebisu Building

Shibuya, Tokyo

June 13, 2012

7,400

1.4

TO-2

A-PLACE Ebisu Minami

Shibuya, TokyoJune 13, 2012

9,640

1.8

TO-3

A-PLACE Yoyogi

Shibuya, Tokyo

June 13, 2012

4,070

0.8

TO-4

A-PLACE Aoyama

Minato, Tokyo

June 13, 2012

8,790

1.6

TO-6

TAMACHI SQUARE(Land)

Minato, Tokyo

June 13, 2012

TO-7

A-PLACE Ikebukuro

Toshima, Tokyo

June 13, 2012

3,990

0.7

TO-8

A-PLACE Shinbashi

Minato, Tokyo

April 19, 2013

5,650

1.0

TO-9

A-PLACE Gotanda

Shinagawa, Tokyo

January 10, 2014

5,730

1.1

TO-10

A-PLACE Shinagawa

Minato, Tokyo

January 10, 2014

3,800

0.7

TO-11

OSAKI WIZTOWER

Shinagawa, Tokyo

June 24, 2014

10,6902.0TO-12

Shiodome Building (Note 4)

Minato, Tokyo

December 2, 2016

TO-13

A-PLACE Ebisu Higashi

Shibuya, Tokyo

July 29, 2015

7,072

1.3

Shibuya, Tokyo

October 1, 2015

4,810

0.9

Shinagawa, Tokyo

July 1, 2016

7,280

1.4

Minato, Tokyo

March 16, 201718,800

3.5

Shibuya, Tokyo

January 10, 2020

TO-16

A-PLACE Shibuya
KonnohA-PLACE Gotanda
EkimaeA-PLACE Shinagawa
HigashiTO-18

Ebisu Prime Square

TO-14
TO-15

72,338(Note 3)71,600(Note 2)30,700(Note 2)

0.4

13.3

5.7

TO-19A-PLACE Tamachi East

Minato, TokyoOctober 29, 2021

6,800

1.3

TO-20

Meguro Tokyu Building

Shinagawa, Tokyo

September 10, 2021

16,3003.0

TO-21

Q plaza Shinjuku-3chome

Shinjuku, Tokyo

September 10, 2021

18,400

3.4

TO-22

A-PLACE Shibuya
Nampeidai

Shibuya, Tokyo

September 10, 2021

8,800

1.6

252,660

46.9

435,200

80.8

Subtotal

Activia Account Properties

Subtotal of UR and TO
AA-1

Amagasaki Q’s MALL
(Land)

Amagasaki, Hyogo

June 13, 2012

12,0002.2

AA-2

icot Nakamozu

Sakai, Osaka

June 13, 2012

8,500

1.6

AA-4

icot Mizonokuchi

Kawasaki,Kanagawa

June 13, 2012

2,710

0.5

AA-5

icot Tama CenterTama, Tokyo

June 13, 2012

2,840

0.5

AA-6

A-PLACE Kanayama

Nagoya, Aichi

June 13, 2012

6,980

1.3

AA-7

Osaka Nakanoshima
Building

Osaka, Osaka

December 19, 2014

11,1002.1

AA-8

icot Omori

Ota, Tokyo

December 19, 2013

5,790

1.1

AA-9

Market Square Sagamihara

Sagamihara,
Kanagawa

January 9, 2015

4,820

0.9

AA-10

Umeda Gate Tower

Osaka, Osaka

September 21, 2016

19,000

3.5

AA-11

A-PLACE Bashamichi

Yokohama,
Kanagawa

October 6, 2016

3,930

0.7

AA-12

Commercial Mall Hakata

Fukuoka, Fukuoka

January 5, 2018

6,100

1.1

AA-13

EDGE Shinsaibashi

Osaka, Osaka

January 10, 201919,8003.7

103,570

19.2

538,770100.0(Note 5)

Subtotal
Total(Note 1) “Investment ratio” is ratio of acquisition price for each property to total acquisition price rounded to the first decimal place.
(Note 2) Acquisition prices of “Tokyu Plaza Omotesando Harajuku”, “DECKS Tokyo Beach”, “Tokyu Plaza Ginza (Land)”, “Q plaza
HARAJUKU”, “Shiodome Building” and “Ebisu Prime Building” are described based on their pro rata share of the co-ownershipinterests (75%, 49%, 30%, 60%, 35% and 51%, respectively).
(Note 3) Acquisition price of “TAMACHI SQUARE (Land)” is based on the acquisition price of the land as of acquisition date (June 13,2012).
(Note 4) The acquisition date of “Shiodome Building” is the date of the third acquisition. The first acquisition date was January 9, 2015, andthe second acquisition date was December 16, 2015. The acquisition price is total amount of the first, the second and the thirdacquisition prices (¥30,300 million, ¥20,400 million and ¥20,900 million) and the investment ratio reflects total acquisition price.
(Note 5) The Acquisition date of “Osaka Nakanoshima Building” is the date of the second acquisition. The first acquisition date wasJanuary 25, 2013. The acquisition price of “Osaka Nakanoshima Building” is total amount of the first and the second acquisition
prices (¥5,250 million and ¥5,850 million) and the investment ratio reflects the total acquisition price.

8