August 20, 2018
To all concerned parties:

Investment Corporation
MCUBS MidCity Investment Corporation
Representative: Katsuhiro Tsuchiya, Executive Director

TSE Code: 3227, LEI Code: 353800WZPKHG2SQS1P32
URL: http://www.midcity-reit.com/en/

Asset Management Company
MCUBS MidCity Inc.
Representative: Toyota Watanabe, President & CEO
Inquiries:
Naoki Suzuki, Deputy President

TEL: +81-3-5293-4150

Notice Regarding Acquisition, Leasing, Disposition and Cancellation of Leasing ofTrust Beneficiary Interests in Domestic Real Estates(Acquisition of One Office Building and Disposition of Two Office Buildings)
MCUBS MidCity Investment Corporation (hereafter “MCUBS MidCity”) announces that, its asset
management company, MCUBS MidCity Inc. (hereafter the “Asset Management Company”), decided
today to acquire, lease, dispose and cancel leasing of assets, as detailed below (the acquisition of theasset will hereafter be referred to as the “Acquisition” and the disposition of the assets as the“Disposition”, and the “Transactions” collectively).
1. Overview of Transactions(1) Overview of Acquisition (Asset to be Acquired)
Property Name
Type of Specified Asset
Location
Planned Acquisition Price (A)Appraisal Value (B)Difference between Planned Acquisition Priceand Appraisal Value (B-A)
NOI Yield/ NOI Yield after Depreciation (Note 1)
Agreement Execution Date
Planned Acquisition Date
Seller (Note 2)

Yokohama i-land Tower
Trust beneficiary interest in real estate (Note 3)
6-50-1, Honmachi, Naka-ku, Yokohama-shi¥22,100 million¥23,700 million (Appraisal Date: July 1, 2018)＋ ¥1,600 million
5.0% / 4.0%
August 20, 2018
September 14, 2018
A domestic SPC(2) Overview of Disposition (Assets to be Disposed)
Property Name
Type of Specified Asset
Location
Planned Disposition PriceBook Value (Note 4)
Difference between Planned Disposition Priceand Book Value
Appraisal ValueNOI Yield/ NOI Yield after Depreciation (Note 5)
Agreement Execution Date
Planned Disposition Date
Buyer (Note 2)

Matsushita IMP Bldg.
Trust beneficiary interestin real estate
1-3-7, Shiromi, Chuo-ku,
Osaka-shi¥27,000 million¥22,434 million

MID REIT Kyobashi Bldg.
Trust beneficiary interestin real estate
1-5-14, Higashinoda-machi,
Miyakojima-ku, Osaka-shi¥1,700 million¥2,063 million＋ ¥4,565 million− ¥363 million¥22,300 million
4.1% / 1.8%
August 20, 2018
55% quasi co-ownership:
September 5, 2018
45% quasi co-ownership:
March 8, 2019(Note 6)
A domestic SPC¥1,460 million
3.4% / 2.1%
August 20, 20181

September 4, 2018
A domestic SPC

Notes:1.
“NOI Yield” indicates the ratio of the appraisal NOI (under the direct capitalization method) to the Planned Acquisition Price. “NOI Yield after Depreciation”
indicates the ratio of NOI (under the direct capitalization method) after depreciation to the Planned Acquisition Price.
2.
The names of the seller of Yokohama i-land Tower and buyers of Matsushita IMP Bldg. and MID REIT Kyobashi Bldg. are not disclosed because their approval has
not been obtained.
3.
As the property is a sectional ownership building, MCUBS MidCity is to obtain trust beneficiary interest of building’s sectional ownership (ratio of entire common
area co-ownership: 93.41476％, partial high-rise common area co-ownership: 100%) and common area ownership of its land (ratio of co-owner ship: 89.57％).
4.
“Book Value” indicates book value as of the end of 24th Fiscal Period.
5.
“NOI Yield” indicates the ratio of annualized actual NOI of the Assets to be Disposed for the 24th Fiscal Period to the acquisition price. “NOI Yield after depreciation”
indicates the ratio of actual NOI after depreciation of the Assets to be Disposed to the acquisition price.
6.
MCUBS MidCity and the buyer have agreed to dispose quasi co-ownership (45% quasi co-ownership) on March 8, 2019 or the date the parties agree on separate
written agreement during the period from March 8, 2019 to March 15, 2019, based on the trust beneficiary right sales and purchase agreement, concluded on August20, 2018. The same shall apply hereinafter.

2.

Reason for Transactions
MCUBS MidCity is committed to managing assets from a medium- to long-term perspective toassure stable revenues and steady growth of assets under management and emphasizes investmentin the three major metropolitan areas (the Tokyo metropolitan area, the Osaka metropolitan area
and the Nagoya metropolitan area).
After the Transactions, the ratio of properties located in Tokyo metropolitan area to the overall
portfolio (on a basis of (Planned) Acquisition Prices) will increase from 49.6% to 59.2%. MCUBSMidCity made the decision to conduct the Transactions because the Transactions would contributeto reinforcing earnings capacity of the portfolio with an increase in average NOI Yield after
Depreciation and to enhancing the unitholder value, which is represented by distribution per unit,
over a medium- to long-term. In addition, it is scheduled to dispose the Assets to be Disposed, 55%
and 45% quasi co-ownership of trust beneficiary interests in Matsushita IMP Bldg. in two parts, on
September 5, 2018 and March 8, 2019, respectively. Gains on disposition are to be paid out as
distribution and a part to be retained for future stable distribution.
Regarding leasing of tenants for Asset to be Acquired, it is determined to meet the tenant
selection standards indicated on “Report on guideline for issuer of real estate trust funds”,
submitted on March 29, 2018.
For details of the individual Asset to be Acquired and Assets to be Disposed, please refer to “3.
Details of Transactions” (Note 1) below.
BeforeTransactions(24th Fiscal Period)

Asset Size

Asset to be
Acquired

Assets to be
Disposed

After Transactions((Planned) acquisition price basis)¥261.3 billion¥22.1 billion¥26.9 billion¥256.5 billion

Average NOI Yield

4.3%

5.0%

4.1%

4.4%

Average NOI Yield
after Depreciation

3.2%

4.0%

1.8%

3.5%

Ratio of Tokyo Area

49.6%

59.2%

Ratio of OBP

38.4%

28.3%

2

■ Area diversification
based on (planned) acquisition prices■ Tenant diversification
based on the rents andcommon-area fees

■ Unrealized gains/losses ofthe portfolio (ratio) (Note2)

Notes:
1.
Explanations of the descriptions in each column for the overview of Acquisition and Dispositions described in "3. Details of Transactions” below are as follows:
Among the descriptions about the Asset to be Acquired and the Assets to be Disposed, “Land (Site Area),”, “Building (Structure/Floors)”, “Building (Total Floor Area),”“Building (Use),” and “Building (Completion Date)” are based on what is indicated in the registry. “Land (Zoning)” represents types of zoning stipulated in Article 8paragraph 1 item 1 of the City Planning Act. “Land (Floor-Area Ratio)” represents the ratio of the total floor area of a building to the site area, as stipulated in
Article 52 of the Building Standards Act, and indicates the figure applicable to individual trust property in accordance with the zoning, etc. (known as Base volume
ratio). “Land (Building-to-Land Ratio)” represents the ratio of the building area to the site area, as stipulated in Article 53 of the Building Standards Act, andindicates the figure applicable for each individual real estate in trust in accordance with the zoning, etc. (known as Standard Building Coverage Ratio). With regard
to the “Overview of Building Condition Evaluation (PML),” PML (Probable Maximum Loss) is defined as “probable loss for a building with a recurrence interval of
475 years” based on the risk curve showing the relationship between loss and annual exceedance probability as calculated by Engineering and Risk Services
Corporation and OYO RMS Corporation. The probable loss for a building with a recurrence interval of 475 years represents “loss of 10% of exceedance probability
over 50 years” under the BELCA's guidelines.
“Overview of Leasing” indicates the content of the lease agreement effective as of the end of June 2018 regarding Asset to be Acquired, based on the figures andinformation provided by the seller of the asset and actual figures as of 24th Fiscal Period regarding the Assets to be Disposed. “Overview of Leasing (Rentable Area)”indicates the rentable area of the building of the real estate in trust for each of the Asset to be Acquired and Assets to be Disposed (or total rentable area ofrespective buildings in the case where there are multiple buildings for each property; limited to the rental spaces, and not including the areas of warehouses, halls
and parking lots, etc. However, it includes the area of the common area and parking lot area etc, if such area is leased.). “Overview of Leasing (Rental Area)”indicates the total area presented in the lease agreements, etc. with end tenants that are effective as of the end of June 2018 (limited to the rental spaces, and notincluding the areas of warehouses, halls and parking lots, etc. However, it includes the area of the common area and parking lot area etc., if such area is leased).
“Overview of Leasing (Total Tenants)” does not include the number of the end tenants that leases warehouses, halls, and parking lots, etc. only in the calculation.
“Overview of Leasing (Total Annual Rent)” and “Overview of Leasing (Security Deposit/Guarantee, Etc.)” indicate the total amount of the monthly rent, monthly
common area charge, parking lot usage fee, warehouse rent and facility usage fee, etc. (excluding utilities revenue)stated in the lease agreements that are effective
as of the end of June 2018, multiplied by 12, and the balance of security deposits and guarantees (including those for the rental spaces, parking lots and warehouse
lots, etc.), with amounts less than thousand yen rounded down, respectively.
2.
”Unrealized gain/loss on overall portfolio" indicates the sum of differences between book value and appraisal value of assets in our portfolio as of the end of therespective Fiscal Period. The "Unrealized gain/loss in the portfolio" after the Transactions is represented by an amount calculated by adding unrealized gain of theAsset to be Acquired to unrealized gain/loss of the overall portfolio as of the end of June 2018 (excluding the Assets to be Disposed). The “Ratio of unrealized
gain/loss” indicates a ratio of the unrealized gain/loss of the overall portfolio to the total book value of the assets in the portfolio. The total book value of the assets inthe portfolio after the Transactions is represented by an amount calculated by adding the planned acquisition price of the Asset to be Acquired the total book value ofthe assets in the portfolio as of the end of June 2018 (excluding the Assets to be Disposed).

3

3. Details of Transactions(1) Overview of Acquisition (Asset to be Acquired)[Yokohama i-land Tower]
Type of Specified Asset

Location (Indicated for
Residence)
Site Area

Land

Trust beneficiary interest in real estate

Planned Acquisition Price¥22,100,000 thousand

Planned Acquisition Date

September 14, 2018

Appraisal Value

6-50-1, Honmachi, Naka-ku,
Yokohama-shi, Kanagawa

The Tanizawa Sōgō
Appraisal Co., Ltd.

Appraiser
Date ofPreparation ofReport3,840.76 ㎡(Note 1)

ZoningCommercial zone
Type ofFee simple
Ownership
Floor-Area Ratio/
Building-to-Land 1080％∕80％
Ratio (Note 2)¥23,700,000 thousand

Evaluation
Overview of Company
Building
Condition
Short-term
Evaluation Repair Cost

July 2018
Sompo Risk
Management & HealthCare Inc.
¥0

Structure/ Floors S/SRC/RC with flat roof, B3/27F

Long-term
Repair Cost (Note 5)

Total Floor Area

41,154.75 ㎡

PML

Sectional ownership (Note 3)

Rentable Area

25,496.88 ㎡

Use

Office, shop, parking lot

Rental Area

23,967.64 ㎡Completion Date

February 28, 2003

Building Type ofOwnership

Property Management
Consignee
Building Management
Consignee
TrusteeSpecial Notations

THE DAI-ICHI BUILDING CO., LTD.

Overview of Occupancy Rate
Leasing
Total Tenants¥741,463 thousand
3.0%

94.0%
5

THE DAI-ICHI BUILDING CO., LTD.,
Asahi Facilities Inc. (Note 4)

Total Annual¥1,243,209 thousand
Rent
Security Deposit¥16,758 thousand
Sumitomo Mitsui Trust Bank, Limited/ Guarantee, Etc.
１．The Investment Corporation shall not, during the period ending on the date on which ten (10)years will have elapsed since April 9, 2018, (i) transfer all or part of this property and trust
beneficiary interest therein to any third party, (ii) establish, change or transfer any right forthe purpose of use of or earnings from rights, superficies, emphyteusis, easement, rights ofcommon wayleave, loan for use or rights of lease for the purpose of mortgage, pledge, right ofretention, lien or security by way of assignment or any other security, and (iii) use thisproperty for any other purpose other than office, shop or parking lot with certain exceptions,
without approval from Urban Renaissance Agency (“hereinafter referred to as UR”).
２．The Investment Corporation shall not, during the period ending on the date on which ten (10)year will have elapsed since April 9, 2018, change a party to which asset management
regarding this property is entrusted or a party to which property management regarding thisproperty is entrusted, without approval from UR.

Notes:
1.
Ratio of co-owner ship: 89.57%
2.
The property is located on both 800% and 600% Floor-Area Ratio zones; however, permissible Floor-Area Ratio is relaxed to 1080% due to Kita Naka-dori Minami
district reconstruction plan. While restriction of building-to-land ration does not apply to the fire-resistant building located within an area that is zoned forcommercial use and fire protection district in general, the ratio of 80% is applied to the land of this property due to Kita Naka-dori Minami district reconstruction
plan.
3.
Ratio of entire common area co-ownership: 93.41476％, partial high-rise common area co-ownership: 100%
4.
While THE DAI-ICHI BUILDING CO., LTD. is entrusted with property management of exclusive elements of the building of this property, Asahi Facilities Inc. is
entrusted with property management of common area of this building and part of common area of the high-rise part of this building, subject to the property
management service agreement entered into between Yokohama i-land Tower Management Association consisted of unit owners of this property and Asahi Facilities
Inc. on February 28, 2017 (contract period: from April 1, 2017 to March 31, 2022). Therefore, both THE DAI-ICHI BUILDING CO., LTD. and Asahi Facilities Inc.
are indicated as Building Management Consignees.
5.
Calculated by multiplying the figure calculated for one entire building by the ratio of entire common area ownership by MCUBS MidCity (Ratio of entire common
area co-ownership: 93.41476％, Partial high-rise common area co-ownership: 100%)

4

In the decision-making process of acquiring this property, among others, the following aspects wereappreciated.
1. Location with traffic convenienceHigh-rise building directly connected to the station, situated at a cross-point of the Minato
Mirai 21 area and the Kannai area
Located in an area with high growth potential as several redevelopment plans are under way inthe neighborhood
2. One of the largest-sized office buildings in the area
Large-sized office building with total floor area of approximately 12,500 tsubo and standard
floor area of approximately 320 tsubo, standing out in the area mainly filled with small-and
medium-sized buildings and drawing potential tenants
3. Acquisition through PRE proposal for the first time for MCUBS MidCity, and stable relation
with tenants
Acquisition through PRE proposal (Note) by use of capability of the sponsor of MC-UBS Group
Expected steady rent income based on the long-term lease agreement with UR, the main tenant
Note:“PRE proposal” indicates a proposal of optimal and efficient use of public real estate (PRE), with an aim to promote proper and efficient management and operation
thereof based on the public interest purposes.

(Note) As the property is a sectional ownership building, MCUBS MidCity is toobtain trust beneficiary interest of building’s sectional ownership (ratio of
entire common area co-ownership: 93.41476％, partial high-rise common area
co-ownership: 100%) and common area ownership of its land (ratio of co-ownership: 89.57％).

5

(2) Overview of the Disposition (Assets to be Disposed)[Matsushita IMP Bldg.]
Type of Specified Asset
Location (Indicated for
Residence)Land

in real estate
1-3-7, Shiromi, Chuo-ku,
Osaka-shi

Planned Disposition Price¥27,000,000 thousand

Planned Disposition Date

55% quasi co-ownership:
September 5, 2018
45% quasi co-ownership:
March 8, 2019

Site Area

14,968.25 ㎡

Rentable Area

37,299.98 ㎡

ZoningCommercial zone

Rental Area

35,732.90 ㎡

Type ofOwnership
Floor-Area
Ratio/
Building-toLand
Ratio
Floors

B2/26F

Use
Completion
Date
Trustee2016
End of Dec.

468.10％(Note 1)∕100％(Note 2)

S/SRC with flat roof,

Area
Type ofOwnership

End of Jun.

Fee simple

Structure/
Total Floor

Building

Trust beneficiary interest

84,952.57 ㎡

2016
Occupancy Rate
OverviewofLeasing

End of Jun.
2017
End of Dec.
2017
End of Jun.

Fee simple

2018

Office, shop, parking lot
Main: February 23, 1990
Extension: November 26,
2003
Bank, Limited

98.9%

98.3%
86.7%
95.8%

Total Tenants

57

Total Annual
Rent (Note 3)¥ 865,891 thousand

Security Deposit/ Guarantee, Etc.

Sumitomo Mitsui Trust

97.6%¥ 1,498,632 thousand(Note 3)

A sectional surface right held by Osaka City is established on part of the land of thisproperty, for the right holder’s ownership of the structure of facilities of Osaka Metro Co.,Ltd.
2. The regulations on the floor-area ratio applicable to this property is relaxed as stated in Note
1 below as part of the premises of this property is planned as public open spaces. Such public
open spaces shall be available to general passage and properly managed and maintained.
3. This building is connected to Twin 21 via Shiromi Chuo Pedestrian Bridge, a roofed
connecting bridge. The trustee is obliged to bear the burden of such maintenance andmanagement subject to the agreement on maintenance and management of the pedestrian
bridge, which was concluded between Osaka City and the trustee.
4. Although asbestos materials are used for part of this property, stability thereof is confirmed
by periodic surveys on air condition and environment. It is necessary to manage thecondition through surveys and recordings on a continued basis.
1.

Special Notations

Notes:
1. While the floor-area ratio of the land of the property is essentially 400%, due to application of the total design system, it is set at 468.10% after being expanded.
2. While the building-to-land ratio of the property’s land was originally 80%, because the location was within a commercial zone, since it was a fireproof building in afire zone, its ratio was increased, and its applicable building-to-land ratio came to 100%.
3.
“Total Annual Rent” and “Security Deposit/ Guarantee, Etc.” are figures as of 24th Fiscal Period.

Reason for disposition
MCUBS MidCity has decided to sell this property for the following reasons: (i) steady
improvement in the profitability upon change of the main sponsor from Kanden Realty &Development Co., Ltd. to Mitsubishi Corp.-UBS Realty Inc. and spaces vacated by some large-lot
tenants were immediately occupied by new tenants through leasing activities, which resulted inenhancement of the value of this property, and (ii) it is an appropriate time for the MCUBS MidCity
to sell this property in the brisk real estate trading market these days.

6

[MID REIT Kyobashi Bldg.]
Type of Specified Asset
Location (Indicated for
Residence)

Land

g

in real estate

Planned Disposition Price¥1,700,000 thousand

Planned Disposition Date

September 4, 2018

1-5-14, Higashinoda-machi,
Miyakojima-ku, Osaka-shi,
Osaka

Site Area

1,062.53 ㎡

Rentable Area

4,833.88 ㎡

ZoningCommercial zone

Rental Area

4,833.88 ㎡

Type ofOwnership
Floor-Area
Ratio/
Building-toLand
Ratio
Floorssheet roof, 9F

Use
Completion
Date
TrusteeSpecial Notations

2016
End of Dec.

458.94％(Note 1)∕90％(Note 2)

S with galvanized steel

Area
Type ofOwnership

End of Jun.

Fee simple

Structure/
Total Floor
Buildin

Trust beneficiary interest

2016
OverviewofLeasing

Occupancy Rate

End of Jun.
2017
End of Dec.

4,833.88 ㎡

2017
End of Jun.

Fee simple

2018

100%

100%

100%
100%
100%

Office, parking lot

Total Tenant

1

February 29, 2000

Total Annual
Rent

Not disclosed (Note 3)

Security DepositNot disclosed (Note 3)/ Guarantee, Etc.
Bank, Limited
Because a part of the Property is planned as public open space, it has obtained an easing in thefloor-area ratio(Note 1). Such public open spaces shall be available to general passage and properly
managed and maintained.
Sumitomo Mitsui Trust

Notes:
1.
While the floor-area ratio of the land of the property is essentially 400%, due to application of the total design system, is set at 458.94% after being expanded.
2.
While the building-to-land ratio applied to the property is essentially 80%, because the property is located on the corner, it is expanded to 90%.
3.
“Total Annual Rent” and “Security Deposit/ Guarantee, Etc.” are not disclosed since consent has not been obtained from lessee.

Reason of disposition
MCUBS MidCity has decided to sell this property for the following reasons: (i) potential sale ofthis property and asset replacement will likely lead to improvement in profitability as this is one ofthe properties with lower NOI yield after depreciation, and (ii) it will be possible to sell the property
at a price above appraisal value and the expected loss upon sale can offset by the gains on sale ofMatsushita IMP Bldg.

7

4. Overview of Seller and Buyer(1) Seller Overview
While the seller of Yokohama i-land Tower is a domestic SPC, its name and overview, etc. are notdisclosed because the seller’s approval has not been obtained. There are no capital, personal ortransactional ties to be stated between the seller and MCUBS MidCity or the Asset Management
Company. Except for those stated in “5. Status of the Property Owners”, there are no capital, personal ortransactional ties to be specified between the related parties/related companies of MCUBS MidCity or
the Asset Management Company and the related parties/related companies of the seller. The seller or
the related parties/related companies of the seller do not fall under the related party of MCUBS MidCityor the Asset Management Company.
(2) Buyer Overview
While the buyer of Matsushita IMP Bldg. and MID REIT Kyobashi Bldg. are both a domestic SPC
respectively, its name and overview, etc. are not disclosed because each buyer’s approval has not beenobtained. There are no capital, personal or transactional ties to be stated between each buyer and
MCUBS MidCity or the Asset Management Company. There are no capital, personal or transactionalties to be specified between the related parties/related companies of MCUBS MidCity or the Assetmanagement Company and the related parties/related companies of each buyer. Any of the buyer or the
related parties/related companies of the buyer do not fall under the related party of MCUBS MidCity or
the Asset Management Company.
5.

Status of the Property Owner
While the seller of Yokohama i-land Tower which is a domestic SPC has no particular vested
interest with MCUBS MidCity or the Asset Management Company, as described in “4. Overview of Seller
and Buyer (1) Seller Overview”, the seller entrusts the asset management business to MCUBS Japan
Advisors Inc., (“MJA”) a wholly-owned subsidiary of Mitsubishi Corp.-UBS Realty Inc., which is a parent
company of the Asset Management Company. The MJA falls under interested party based on regulationof the Asset Management Company on transactions with interested parties. The acquisition of
Yokohama i-land Tower follows internal regulations of the Asset Management Company, and approval by
the compliance committee and discussion and determination by the investment committee and the boardof directors have been obtained.
Transactions other than Yokohama i-land Tower are not to a party having particular vested
interest with MCUBS MidCity or the Asset Management Company, as described in “4. Overview of Seller
and Buyer (2) Buyer Overview”.
6. Overview of Brokerage(1) Status of Broker
Not applicable for Yokohama i-land Tower. Broker’s names and overview, etc. of Matsushita IMP
Bldg. and MID REIT Kyobashi Bldg. are not disclosed because each broker’s approval has not beenobtained. There are no capital, personal or transactional ties to be stated between each broker and
MCUBS MidCity or the Asset Management Company. There are no capital, personal or transactionalties to be specified between the related parties/related companies of MCUBS MidCity or the Assetmanagement Company and the related parties/related companies of each broker. Any of the broker or the
related parties/related companies of the broker do not fall under the related party of MCUBS MidCity or
the Asset Management Company.
(2) Amount and Details of Commission
The information is not disclosed because disclosure of such information has not been approved by
the broker of Matsushita IMP Bldg. and MID REIT Kyobashi Bldg. The amount of commission does notexceed the upper limit (acquisition price × 3% + ¥60,000, excluding consumption tax and local
consumption tax) stipulated by the Building Lots and Buildings Transaction Business Act.

8

7.

Settlement Method, etc.
MCUBS MidCity will cover the cost of the Acquisition with new borrowing and funds raised from
disposition of Assets to be Disposed. MCUBS MidCity will dispose 55% quasi co-ownership and then 45%
quasi co-ownership of trust beneficiary interests in Matsushita IMP Bldg. on September 5, 2018 andMarch 8, 2019, respectively, and MID REIT Kyobashi Bldg. on September 4, 2018. The proceeds MCUBSMidCity will receive from the second disposition will be used for early repayment of new borrowing andpart of the funds for the acquisition of new specified assets. As for the new borrowing, please refer to“Notice Concerning Debt Financing” announced today. With regard to the settlement method, MCUBSMidCity plans to settle the Acquisition by making a single payment of the entire amount of theacquisition price upon delivery of each property.
8. Schedule for Transactions(1) Schedule for Acquisition
Property Name

Agreement Execution Date

Planned Acquisition Date

Planned Payment Date

August 20, 2018

September 14, 2018

September 14, 2018

Agreement Execution Date

Planned Disposition Date

Planned Payment Date

Matsushita IMP Bldg.

August 20, 2018

55% quasi co-ownership:
September 5, 2018
45% quasi co-ownership:
March 8, 2019

55% quasi co-ownership:
September 5, 2018
45% quasi co-ownership:
March 8, 2019

MID REIT Kyobashi Bldg.

August 20, 2018

September 4, 2018

September 4, 2018

Yokohama i-land Tower(2) Schedule for Disposition
Property Name

9.

OutlookAs for the outlook of the business results for the 25th Fiscal Period (from July 1, 2018 to December
31, 2018) and the 26th Fiscal Period (from January 1, 2019 to June 30, 2019), gains/losses on sales are
expected. For result of the Acquisition of the Asset to be Acquired and Disposition of the Assets to be
Disposed, please refer to “Notice Regarding Revision of Business Outlook and Distributions Forecast forthe 25th Period Ending December 31, 2018 and Notice Regarding Business Outlook and Distributions
Forecast for the 26th Period Ending June 30, 2019” announced today.

910. Overview of Appraisal Report(1) Overview of Appraisal Report of the Asset to be Acquired[Yokohama i-land Tower]
Appraiser
Final Appraisal Value
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses

The Tanizawa Sōgō Appraisal Co., Ltd.
¥23,700,000 thousand
July 1, 2018
Details(thousand yen)
23,700,000 25,700,000 1,635,708
1,721,660
85,952541,504

Maintenance expenses

146,229

Utility expenses

237,774

Repair expenses

17,400PM fees

10,065Tenant solicitation
expenses, etc.

1,745Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment

Capital expenditures

Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate
Terminal Capitalization Rate
Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

Overview, etc.

Assessed based on the building management operations
outsourcing contract and considering actual results ofrevenue and expenditure, etc.
Assessed considering disclosed material and actual resultsof revenue and expenditure, etc.
Assessed by allocating the figure based on the engineering
report and similar cases to repair expenses and capital
expenditures in the proportion of 3 to 7
Assessed based on the PM operations outsourcing contract
and memorandum, etc.
Assessed based on 5.0% annual tenant replacement

Assessed based on a list of amounts of payment of property
taxes and city planning taxes for FY2018
Assessed considering actual results of revenue and
2,320
expenditure, etc.
Assessed considering actual results of revenue and
8,178
expenditure, etc.
1,094,204 117,789

8,670 Assessed by allocating the figure based on the engineering
report and similar cases to repair expenses and capital
75,400 expenditures in the proportion of 3 to 7. In addition, anamount equivalent to the expense for renewal of the common
area is considered.
1,027,474 4.0％ 22,900,000 4.0％
4.1％
22,300,000
66.5％
33.5％
Not applicable.

10-(2) Overview of Appraisal Report of the Assets to be Disposed[Matsushita IMP Bldg.]
Appraiser
Final Appraisal Value
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses

The Tanizawa Sōgō Appraisal Co., Ltd.
¥22,300,000 thousand
June 30, 2018
Details(thousand yen)
22,300,000 21,800,000 2,067,296
2,182,940
115,644957,777

Maintenance expenses

273,864

Utility expenses

260,312

Repair expenses

74,700PM fees

66,629Tenant solicitation
expenses, etc.

9,545

Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment
Capital expenditures
Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate
Terminal Capitalization Rate
Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

Overview, etc.

Assessed based on the memorandum of change of building
management operations outsourcing contract
Assessed considering actual results of revenue andexpenditure, etc.
Assessed by allocating the figure based on the engineering
report and similar cases to repair expenses and capital
expenditures in the proportion of approximately 3 to 7
Assessed based on the PM operations outsourcing contract
and memorandum, etc.
Assessed based on 10.0% annual tenant replacement

Assessed based on property taxes and city planning taxes for
FY20183,594 Assessed based on disclosed materials
Assessed based on actual results of revenue and expenditure
25,841of disclosed materials
1,109,518 12,031
243,290

Assessed by allocating the figure based on the engineering
161,850 report and similar cases to repair expenses and capital
expenditures in the proportion of approximately 3 to 7
959,700 4.4% 22,500,000 4.5%
4.6%
24,500,000
72.7%
27.3%
Not applicable.

11-

[MID REIT Kyobashi Bldg.]
Appraiser
Final Appraisal Value
Appraisal Date

Item
Revenue price
Value Calculated Using Direct
Capitalization (DC) Method
Operating revenues
Potential gross revenue
Vacancy loss, etc.
Operating expenses
Maintenance expenses
Utility expenses
Repair expenses
PM fees
Tenant solicitation
expenses, etc.
Real estate taxes
Insurance premiums
Other expenses
Net operating income (NOI)
Gain on management of income
from lump-sum payment
Capital expenditures
Net Cash Flows
Overall Capitalization Rate
Value Calculated Using Discount Cash
Flow (DCF) Method
Discount Rate
Terminal Capitalization Rate
Cost method value
Ratio of Land Price
Ratio of Building Price
Other items considered by real estateappraisal agent upon appraisal

The Tanizawa Sōgō Appraisal Co., Ltd.
¥1,460,000 thousand
June 30, 2018
Details(thousand yen)
1,460,000 -Overview, etc.

1,470,000 Not disclosed
Not disclosed
Not disclosed
Not disclosed
Not disclosed
Not disclosed
Note
Not disclosed
Not disclosed
Not disclosed
Not disclosed
Not disclosed
Not disclosed 82,185 979 9,800 Assessed by allocating the figure based on the engineering
report and similar cases to repair expenses and capital
expenditures in the proportion of approximately 3 to 7
73,364 5.0% 1,460,000 5.1%
5.2%
1,500,000
52.9%
47.1%

-

Not applicable.

Note:
The asset manager has determined to not disclose as it may give a negative influence on MCUBS MidCity’s performance, hence unitholders
benefit, since the appraisal is based on actual figures.

12

<Reference>
Assumed NOI and depreciation of Asset to be Acquired
Property nameYokohama i-land Tower

Assumed NOI (Note 1)¥913 million per year

Depreciation (Note 2)¥220 million per year

Notes:
1.
Assumed NOI (Net Operating Income) is the estimated amount of property leasing revenue, less property leasing expenses, assuming the burden of property taxes
and city planning taxes for the full year based on the lease agreement terms and conditions, etc. on the planned acquisition date. MCUBS MidCity’s estimatedfigures for time of steady stable occupancy. Assumed NOI presented in the table above have been rounded down to the nearest million yen.
2.
MCUBS MidCity’s estimated figures for time of steady stable occupancy. Depreciation presented in the table above have been rounded down to the nearest million
yen.

The figures above are not the forecast figures for the current period or subsequent periods.
Property Portfolio after the Transactions
Type

RegionAcquisition Price(Planned)(Millions of Yen)

Property Name

Investment
Ratio

Acquisition Date
(Planned)

Office Building

Tokyo
Metropolitan
Area

Osaka
Metropolitan
Area

Other

7,460
12,22017,1307,080
20,0502,705
8,700
10,800
4,000
9,200
4,205
22,10068,700

2.9%
4.8%
6.7%
2.8%
7.8%
1.1%
3.4%
4.2%
1.6%
3.6%
1.6%
8.6%
26.8%

Matsushita IMP Bldg.

--

MID REIT Kyobashi Bldg.

--

MID Imabashi Bldg.
Kitahama MID Bldg.
MID Nishihonmachi Bldg.
Higobashi MID Bldg.
Sendai Capital Tower

3,270
10,800
3,550
3,000
5,500

1.3%
4.2%
1.4%
1.2%
2.1%

220,47085.9%

AEON MALL Tsudanuma

26,10010.2%

August, 2006

Konami Sports Club Kyobashi

2,780

1.1%

August, 2006

Dormy Inn Hakata Gion
Subtotal (3 properties)

2,280
31,1600.9%

September, 2013

12.1%

4,919

1.9%

Sumitomo Fudosan Ueno Bldg. No. 6
G-Square Shibuya Dogenzaka
Shibuya Sakuragaoka Square
Yokohama Creation Square
Cube Kawasaki
Higashi-Nihombashi Green Bldg.
Sasazuka Center Bldg.
USC Bldg.
Yoshiyasu Kanda Bldg.
TOYOTA MOBILITY SERVICE Bldg.
M-City Akasaka 1-chome Bldg.
Yokohama i-land Tower
Twin 21 (Note)

Subtotal (18 properties)

May, 2015
August, 2015
August 2015, etc.
August, 2015
August, 2015
December, 2015
March, 2017
April, 2017, etc.
February, 2018
March, 2018
March, 2018
September, 2018
August, 2006
To be Disposed in
September, 2018(55% quasi
co-ownership)
March, 2019(45% quasi
co-ownership)
To be Disposed in
September, 2018
April, 2007
April, 2008
October, 2008
June, 2013
February, 2017

Other than Office Building
Tokyo
Metropolitan
Area
Osaka
Metropolitan
Area
Other

Silent Partnership Interest for Office Building
NagoyaMetropolitan
Area

Nagoya Lucent Tower(Silent partnership interest)
Subtotal (1 asset)

4,919

1.9%

Total (22 properties)

256,549

100.0%

August, 2015

Notes:
Data for Twin 21 includes the trust beneficiary interest in Twin 21 and Twin 21 (partial ownership of land with leasehold interest), collectively.

13