April 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(A-FLAG KITA SHINSAIBASHI)
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)

Property name
Asset to be disposedof(iii) Disposition price
(iv)
(v)

Book value (Note)
Difference between
disposition price andbook value(vi) Date of sales contract(vii) Date of delivery(viii) Acquirer of property(ix) Settlement method: A-FLAG KITA SHINSAIBASHI: Trust beneficiary interest in the property as a trust asset (the “Asset to beDisposed of”)
: ¥5,100 million(excluding expenses for the disposition, consumption tax, etc.): ¥4,830 million: ¥269 million: April 27, 2022 (plan): June 30, 2022 (plan): Not disclosed because the acquirer approval was not obtained.
: Total amount to be received at the time of delivery(Note) Anticipated book value as of June 30, 2022.

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 46 properties with the total acquisition price of 543.3 billion yen.
A-FLAG KITA SHINSAIBASHI, the Asset to be Disposed of, is an urban retail property enjoying its
favorable location, facing the arcade of Shinsaibashisuji North shopping street in the Shinsaibashi area of Osaka,1which is one of the busiest streets in western Japan. API appreciated the location, high stability and growthpotential for the medium to long term of the Asset to be Disposed of and acquired it in December 2017
After the acquisition, the Asset to be Disposed of has maintained its occupancy rate at 100% for almost thewhole holding period and contributed to the stability of API’s portfolio. Though, after the consideration of its
underlying yield level and further stability and growth potential, API determined the Disposition. This wasbased on the judgement that to utilize the fund from the Disposition for future asset replacement will lead theenhancement of the unitholder value for the medium to long term. For the Disposition, API leveraged thesourcing capability of TRM and achieved a disposition price higher than both its book value and appraisal value,
which will offset the current unrealized loss of the Asset to be Disposed of.
API will continue its asset replacement strategy by leveraging the networks of both the sponsor and TRM.

3.

Overview of the Asset to be Disposed ofProperty nameSpecified asset category
Trustee
Trust establishment date
Trust maturity date
Transportation
Location (address)
Location
Building to land ratio
Plot ratioLand
Use district
Land area
OwnershipCompletion date
Structure
Registered usage
Building
Gross floor area
Parking facility
Ownership
Property management company
Master lessee
Acquisition priceAppraisal value(Date of value estimate)Appraisal agency
Earthquake PML
Hypothecation
Lease overview (Note 4)
Total leasable area
Total leased area
Occupancy rate
Number of tenants
Annual rent
Expected NOITenant leasehold andsecurity deposits
Remarks(Note 1) The data is based on the registry.

A-FLAG KITA SHINSAIBASHI
Trust beneficiary interest
Sumitomo Mitsui Trust Bank, Limited
June 16, 2017
December 31, 2027
3-minute walk from Shinsaibashi Station on the Osaka Metro
Midosuji Line and Nagahori Tsurumi-ryokuchi Line
10-11, Minami Senba 3-chome, Chuo-ku, Osaka City, Osaka
2-2, Minami Senba 3-chome, Chuo-ku, Osaka City, Osaka (Note 1)
100.00% (Note 2)
1,000.00%
Commercial district
627.13 m2 (Note 1)
Owned
March 25, 2008 (Note 1)
SRC, steel framed / 7 floors above and 1 floor underground (Note 1)
Retail, office and parking (Note 1)
3,096.18 m2 (Note 1)
2 vehicles inside of the building site / 3 vehicles outside (Note 3)
Owned
Tokyu SC Management Corporation
Tokyu SC Management Corporation (pass-through)¥5,100 million¥4,670 million(November 30, 2021)

Japan Valuers Co., Ltd.
2.7%(According to an earthquake PML report of Sompo Risk Management Inc.)

None

2,538.13 m2
2,538.13 m2
100.0%
5¥186 million¥157 million¥129 million
None2

(Note 2) The figure includes the margin since the building receives the margin due to the fire-resistant building on fire prevention
district.
(Note 3) It has the number of parking facilities required by the “Regulations on parking facilities and similar facilities affiliatedwith buildings in Osaka City.”(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.

4．Profile of the acquirer
The acquirer is a Japanese business company, though as an unavoidable case, the name shall not be disclosed
because the approval from the acquirer was not obtained. There is no capital, personnel or business relationshiprequired to be stated between the acquirer and API, TRM, and the related parties or affiliates of API and TRM.
Further, no relevant person or affiliate of the acquirer or the acquirer itself is a related party of API or TRM.

5．Outline of intermediary
There is no capital, personnel or business relationship required to be stated between the intermediary and API,TRM, and the related parties or affiliates of API and TRM. Further, no relevant person or affiliate of theintermediary or the intermediary itself is a related party of API and TRM.

6.

Schedule of the Disposition (plan)
Determination of disposition
Conclusion of sales contract
Payment reception date
Disposition date

7.

April 27, 2022
April 27, 2022
June 30, 2022
June 30, 2022

Transaction with related parties
Not applicable

8.

Item regarding forward commitment contracts, etc.

(1) Asset to be Disposed of under forward commitment contracts, etc. (Note)
Property
No.
UR-14

Property name
A-FLAG KITASHINSAIBASHI

Date of sales contract

Scheduled disposition date

April 27, 2022

June 30, 2022

(Note) A forward commitment contract is defined as “a postdated purchase and sale contract under which settlement and delivery
shall be made at least one month after the conclusion of the contract, or any other contract similar thereto”.

3(2) Impact on API’s finance when forward commitment contracts cannot be executed
With respect to the sales contract pertaining to the disposition of the Asset to be Disposed of, in casethere are any violations by API or the acquirer concerning the provisions which have a material adverse
effect on the achievement of the purpose of the sales contract, API or the acquirer can urge the acquirer orAPI, as applicable, to fulfill the obligation in a fixed period of time. When the acquirer or API does notcorrect the violations within that time frame, API or the acquirer may cancel the contract and make a claim
to the acquirer or API for the penalty equivalent to up 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 of and 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 tobe made on June 30, 2022. As to the fiscal period ending November 30, 2022 (the 22nd fiscal period, from June
1, 2022 to November 30, 2022), the impact on API’s management performance will be minimal.
10.

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

A-FLAG KITASHINSAIBASHI¥4,670 million
Japan Valuers Co., Ltd.
November 30, 2021

Capitalization
Value by the direct capitalization
methodOperating revenue
Potential gross income

Amount(million yen)
4,670
4,750
238
243

Loss (e.g. vacancy)

4

Operating expense
Maintenance expenses
Property managementfee
Utility expenses
Repair expenses

5111

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

Remarks
Estimated by the DCF method and the direct
capitalization method.

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

(Note)

172
1
15
02
187
14

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%.

Capital expenditure

3NCF (Net Cash Flow)
Capitalization rate

185
3.9%

Value by the DCF method
Discount rate

4,590
3.6%

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

4.0%
3,610
95.2%
4.8%

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

Estimated based on the annual average of capital
expenditure on the Engineering Report (ER).
Estimated based on transaction cases of similar
real estates 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 withreference to marketability when the holding periodby API terminates.

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 and property
management fee.

<Exhibit>
Portfolio after the Disposition*Website of API: https://www.activia-reit.co.jp/en/5Category

ExhibitPortfolio after the Disposition
Location

Acquisition dateUR-1

Tokyu Plaza Omotesando
Harajuku

Shibuya, Tokyo

June 13, 2012

Shibuya, Tokyo

June 13, 2012

8,430

1.6Kyoto, Kyoto

June 13, 2012

8,860

1.6

UR-7

Q plaza EBISU
Kyoto Karasuma Parking
Building
Kobe Kyu Kyoryuchi 25Bankan

Kobe, Hyogo

December 19, 2013

21,3303.9

UR-8

A-FLAG SAPPORO

Sapporo, Hokkaido

December 19, 2013

4,410

0.8

UR-9

A-FLAG SHIBUYA

Shibuya, Tokyo

December 19, 2013

6,370

1.2

UR-10

Q plaza SHINSAIBASHI

Osaka, Osaka

December 16, 2015

13,350

2.5

A-FLAG KOTTO DORI

Minato, Tokyo

December 20, 2016

4,370

0.8

A-FLAG BIJUTSUKAN DORI

Minato, Tokyo

December 2, 2016

4,7000.9UR-13

A-FLAG DAIKANYAMA WEST

Shibuya, Tokyo

January 6, 2017

0.4

UR-15

DECKS Tokyo Beach

Minato, Tokyo

January 5, 2018

2,280
12,740UR-16

Tokyu Plaza Ginza (Land)

Chuo, Tokyo

January 10, 2019

UR-17

Q plaza HARAJUKUShibuya, Tokyo

January 10, 2019

TO-1

TLC Ebisu Building

Subtotal
Shibuya, Tokyo

June 13, 2012

7,400

33.6
1.4

A-PLACE Ebisu Minami

Shibuya, Tokyo

June 13, 2012

9,640

1.8

A-PLACE Yoyogi

Shibuya, Tokyo

June 13, 2012

4,070

0.7

TO-4

A-PLACE Aoyama

Minato, Tokyo

June 13, 2012

8,790

1.6

TO-5

Luogo ShiodomeMinato, Tokyo

June 13, 2012

0.8

TO-6

TAMACHI SQUARE (Land)

Minato, Tokyo

June 13, 2012

4,540
2,338

TO-7

UR-5

Urban Retail Properties

Investment
ratio

Property name

UR-3

UR-11
UR-12

TO-2
TO-3

Tokyo Office Properties

Acquisition
price(Millions ofyen)

PropertyNo.

45,000(Note 2)

(Note 2)37,500(Note 2)

13,200(Note 2)

182,540(Note 3)(%)(Note 1)

8.3

2.3
3.9
2.4

0.4

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 GotandaShinagawa, 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

2.0

TO-12

Shiodome Building (Note 4)

Minato, Tokyo

10,69071,600TO-13

A-PLACE Ebisu Higashi

Shibuya, Tokyo

July 29, 2015

7,072

1.3

TO-14

A-PLACE Shibuya Konnoh

Shibuya, Tokyo

October 1, 2015

4,810

0.9

TO-15

A-PLACE Gotanda Ekimae

Shinagawa, Tokyo

July 1, 2016

7,280

1.3

TO-16

A-PLACE Shinagawa Higashi

Minato, Tokyo

March 16, 2017

3.5

TO-18

Ebisu Prime Square

Shibuya, Tokyo

January 10, 2020

18,80030,700TO-19

Tamachi East Building

Minato, Tokyo

October 29, 2021

TO-20

December 2, 2016

(Note 2)

(Note 2)6,800
(Note 6)

13.2

5.7
1.3

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
257,200
439,74047.3
80.9

Subtotal
Subtotal of UR and TO6

1.6

Activia Account Properties

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

A-PLACE Kanayama
Osaka Nakanoshima Building

Nagoya, Aichi

June 13, 2012

6,980

1.3

Osaka, Osaka

December 19, 2014

11,1002.0

icot Omori

Ota, Tokyo

December 19, 2013

5,790

1.1

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, 201919,800103,570
543,310

3.6

AA-6
AA-7
AA-8
AA-9(Note 5)

Subtotal
Total

19.1
100.0

(Note 1) “Investment ratio” is ratio of acquisition price for each property to total acquisition price rounded to the first decimalplace.
(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 was January
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.

7