Make The World
More Sustainable[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.

September 22, 2023
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Keisuke Chiba, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Yuji Kamo, Head of Ichigo OfficeTel: +81-3-3502-4891

Sale of Retail Asset(Twicere Yokohama Isogo)
Ichigo Office decided today to sell a retail asset, the Twicere Yokohama Isogo (retailsection).
1. Asset Sale Summary
Asset Number
Asset Name

Z-11 Twicere Yokohama Isogo (Retail Section)

Asset Type

Other (Retail)

Date Built

July 6, 2009

Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

Date Acquired

December 10, 2013

Buyer1A Third-Party Japanese CompanyBroker

A Third-Party Broker

Sale Price2 (A)JPY 1,600 million

Book Value3 (B)Sale Price vs. Book
Value 4(A) – (B)
Appraisal Value5

JPY 1,418 million

Contract Date

September 22, 2023

Closing Date

October 30, 2023

JPY 181 million
JPY 1,510 million

1The buyer, a third-party Japanese company, did not provide consent to disclose itsname.
2
Sale Price is the sale price of the asset excluding incidental expenses such as fees andproperty, city planning, and consumption taxes.
13Book Value is an estimate based upon the most recent book value (April 2023 fiscal
period-end), adjusted for expected capital expenditures and depreciation through theClosing Date.
4The difference between the Sale Price and Book Value is not equal to the gains on salefrom today’s sale.
5Appraisal Value is calculated by Daiwa Real Estate Appraisal as of April 30, 2023,
pursuant to the appraisal guidelines stipulated in Ichigo Office’s Articles ofIncorporation and the rules of the Investment Trusts Association of Japan.
2. Sale Rationale
As a specialized office REIT that delivers robust earnings stability via a diversified
portfolio, Ichigo Office continues to execute on its strategy to grow shareholder value
by focusing its portfolio on high-quality, mid-size office assets.
Today’s asset sale is the retail section on the basement to third floors of Twicere
Yokohama Isogo, a condominium located in Yokohama that is directly accessible via apedestrian walkway from Isogo Station on the JR Negishi Line.
Although the retail section had been fully occupied since Ichigo Office’s acquisition inDecember 2013, occupancy decreased in May 2020 after a major tenant accounting forthe most rental income departed due to a change in business strategy. As a result ofIchigo Office’s leasing activities focused on earnings recovery, Ichigo Officesuccessfully leased up half of the vacant space to a notable retail tenant.
After receiving an offer from the buyer for a price that exceeds book value and therecent appraisal value, Ichigo Office decided that the sale of this asset would be positivefor its shareholders in light of anticipated increases in capital expenditures required forfacility upgrades and the uncertain outlook for rent levels in the area. With this asset
sale, Ichigo Office’s post-transaction portfolio will be 97.6% office assets.
Ichigo Office will use the proceeds from this asset sale for strategic investments such as
asset acquisitions and value-add capex to offset any loss of rental income from this asset
sale and therefore maintain portfolio earnings and dividends.

2

3. Asset Details
Asset Name
Form of Ownership
Location
Property RightAreaLandZoningCoverage Ratio1
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Number of Tenants
Monthly Rental Income2
Tenant Security Deposits2Leasable Area
Leased Area
Occupancy
Acquisition PriceAppraiser
Appraisal
Appraisal Date
Value
Appraisal Value

Asset Overview
Twicere Yokohama Isogo (Retail Section)
Trust beneficiary interest in real estate (juekiken)
1-7-10 Mori, Isogo-ku, Yokohama City
Freehold (48.7% Ownership)
1,576.48m2
Commercial
80%400%Freehold (48.7% Ownership)
Office/Retail/Parking Lot
Reinforced Concrete, B1F/8F
7,479.46m2
July 6, 20098 (as of August 31, 2023)
JPY 7.895 million (as of August 31, 2023)
JPY 54.270 million (as of August 31, 2023)
2,708.87m2 (as of August 31, 2023)
2,429.53m2 (as of August 31, 2023)
Oct 2021 Apr 2022 Oct 2022 Apr 2023
80.8%
80.8%
80.8%
80.8%
JPY 1,620 million
Daiwa Real Estate Appraisal Co., Ltd.
April 30, 2023
JPY 1,510 million

Aug 2023
89.7%

1

The coverage ratio is relaxed to 100% from 80% because the property complies with fire
prevention zoning regulations.

2Monthly rental income and tenant security deposits are based on the monthly rental
income (including common area service income) and tenant security deposits pursuant totenant rental contracts.

3Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy LossExpenses
Administrative andMaintenance Expenses
Utility Expenses
Repair Expenses
PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment ofDeposits Received
CapitalExpenditure
Net Profit

Twicere Yokohama Isogo (Retail Section)
JPY 1,510,000,000
Daiwa Real Estate Appraisal Co., Ltd.
April 30, 2023
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and1,510,000,000
verified using a direct capitalization
valuation
1,530,000,000
125,417,479
Based on expected long-term, stablerental income, common area service
131,734,188
income, parking lot income, and otherincome6,316,709 Based on a vacancy rate of 5.0%
45,904,635
Based on management expenses
9,403,200
pursuant to management agreement
Based on historical actual amounts and19,731,360
reference to similar assets
Calculated by subtracting repair
expenses based on engineering reports
4,402,680
from the repair reserve based on longterm repair plans
2,114,709 Based on existing contractual fees
Based on tenant acquisition costs at
836,129
similar assets
8,355,700 Based on FY2022 actual amounts
433,770 Based on current actual amounts
Variable expenses based on historical
627,087
actual amounts and forecasts
79,512,844
612,428 Based on a 1.0% investment yield
3,705,000

Based on the average of the past 12years of engineering reports

76,420,272
Based on transactions of similar assets,
while taking into account the asset’s
5.0% location and specific characteristics,rights, and terms and conditions of thecontract

Cap Rate

4

Value via DCF Method

1,500,000,000
Based on transactions of similar assets
and the current yield of financial assets

Discount Rate

4.9%

Terminal Cap Rate

Based upon current NOI adjusted for
5.3% expected marketability at the end ofownership period.

Value via Cost Approach
Ratio of Land

Ratio of Building

1,450,000,000
Based upon the value recorded in thegovernment land assessment
63.0%(koujikakaku) and transactions ofsimilar assets
Based on current replacement costs
37.0% and depreciation due to building age
from engineering reports
NotesIchigo Office determined that the value by direct capitalization method, which takes into
consideration the market price from a profitability perspective, is more appropriate than thevalue via cost approach.

54. Buyer Profile
Name

The buyer, a third-party Japanese company, did not provide
consent to disclose its name.

Relationship toIchigo Office orIchigo Investment
Advisors (IIA)

The seller does not have any material capital, personnel, ortransactional relationship with Ichigo Office or IIA. In addition,
the seller is not a related party as defined in the Act on Trusts andInvestment Corporations or the internal rules of IIA.

5. Forward Commitment
Because the contract date is October 30, 2023, one month and 8 days from today, theasset sale constitutes a forward commitment by Ichigo Office as stipulated in theComprehensive Guidelines for Supervision of Financial Instruments Business Operators
by the Financial Services Agency1.
In the event of a violation of the provisions of the asset sale by Ichigo Office of thebuyer, the other party shall have the right to terminate the sale and claim up to 10% ofthe sale price as a penalty.
Because Ichigo Office is the seller, it is highly unlikely that Ichigo Office will incur thepenalty or suffer a negative material impact on its financial position.
1

Refers to a post-dated purchase and sales agreement under which payment andproperty delivery shall be made at least one month after the conclusion of theagreement, or any other agreement similar thereto.

6. Transaction MethodIchigo Office will receive a deposit of JPY 160 million on the contract date and will
receive the remainder on the closing date.
7. Use of Proceeds
Ichigo Office will distribute the gains on sale of c. JPY 112 million (calculated bysubtracting book value, brokerage fee, IIA’s gains on sale performance fee, and otherasset sale-related expenses from the sale price) as part of dividends to shareholders, andwill deploy the remainder of the sales proceeds towards strategic investments such as
asset acquisitions and value-add renovations.
8. Earnings Impact
Today’s sale has been factored into Ichigo Office’s October 2023 fiscal period earnings
forecast announced in today’s release, “Earnings Forecast Revision for the October
2023 Fiscal Period.”
There is no change to the April 2024 fiscal period earnings forecast.

6Reference: Post-Sale Portfolio
No.
O-02
O-03
O-04
O-05
O-06
O-07
O-09
O-10
O-11
O-12
O-14
O-15
O-16
O-17
O-18
O-19
O-20
O-21
O-22
O-23
O-24
O-26

1Asset Name

O-27
O-28
O-29

Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya Kamiyamacho Building
Ichigo Shibakoen BuildingIchigo Ebisu Nishi Building
Ichigo Ginza 612 Building
Ichigo Uchikanda Building
Ichigo Yotsuya 4 Chome Building
Ichigo Tameike Building
Ichigo Jimbocho Building
Ichigo Hakozaki Building
Ichigo Kudan 2 Chome Building
Ichigo Kudan 3 Chome Building
Ichigo Gotanda Building
Ichigo Shin Yokohama Building
Ichigo Minami Ikebukuro Building
Ichigo Nakano North Building
Ichigo Eitai Building
Ichigo Ikejiri Building
Ichigo Nishi Ikebukuro Building
Ichigo Nishi Gotanda Building
Ichigo Kichijoji Building

O-34

Ichigo Sakae Building

O-37Ichigo Marunouchi Building

O-38
O-39
O-42
O-46
O-47

Ichigo Toyamaeki Nishi Building
Ichigo Mirai Shinkin Building
Ichigo Takamatsu Building
Ichigo Kanda Nishikicho Building
Ichigo Akihabara North Building

O-48

Ichigo Sakaisuji Honmachi Building

O-49
O-50

Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building

Area

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro AreaTokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major RegionalCities
Four Major RegionalCities
Other Regional Cities
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Four Major RegionalCities
Central Tokyo
Central Tokyo
7

Acquisition
Price(JPY million)% ofPortfolio2

3,254
2,740
1,920
1,550
1,200
1,505
1,100
1,917
1,773
1,140
550
580
1,820
1,150
763
844
5,060
1,816
1,460
764
1,490
2,030
639
765
2,160

1.5
1.3
0.9
0.7
0.6
0.7
0.5
0.9
0.8
0.5
0.3
0.3
0.9
0.5
0.4
0.4
2.4
0.90.7
0.4
0.7
1.0
0.3
0.4
1.0

4,705

2.2

6,710

3.2

1,645
1,158
3,010
2,130
5,500

0.8
0.6
1.4
1.0
2.6

1,940

0.9

2,210
1,905

1.1
0.9

No.

Area1Asset Name

O-51
O-52
O-53
O-54
O-55
O-56
O-57
O-58
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69
O-70
O-71
O-72
O-73

Ichigo Ebisu Green Glass
Ichigo Omori Building
Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Ofuna Building
Ichigo Sendai East Building
Ichigo Kumamoto Building
Ichigo Jingumae Building
Ichigo Shibuya Dogenzaka Building
Ichigo Hiroo Building
Ichigo Sasazuka Building
Ichigo Nihonbashi East Building
Ichigo Sakurabashi Building
Ichigo Shinkawa Building
Ichigo Kudan Building
Ichigo Higashi Gotanda Building
Axior Mita
Ichigo Higashi Ikebukuro Building
Koriyama Big-i (Office Section)
Ichigo Kawasaki Building
Ichigo Shibuya East Building
Ichigo Ningyocho Building

O-74

Ichigo Nishi Honmachi Building

O-75

Ichigo Hakata Building

O-76

Ichigo Nishiki First Building

O-78
O-79
O-80

Ichigo Ikebukuro East Building
Ichigo Motoazabu Building
Ichigo Otsuka Building

O-81

Ichigo Nagoya Building

O-82

Ichigo Fushimi Building

O-83

Ichigo Nishiki Building

O-84

Ichigo Minami Morimachi Building

O-85
O-86

Ichigo Shibuya Udagawacho Building
Win Gotanda Building

Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Other Regional Cities
Tokyo Metro Area
Central Tokyo
Central Tokyo
Four Major RegionalCities
Four Major Regional
CitiesFour Major Regional
CitiesTokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesCentral Tokyo
Central Tokyo
8

Acquisition
Price(JPY million)
5,900
3,850

% of
Portfolio2

1,580
3,430
1,174
2,000
1,840
1,450
7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570
1,660
1,750
1,350
1,450

2.8
1.8
0.8
1.6
0.6
1.0
0.9
0.7
3.4
1.7
1.9
2.3
2.2
1.2
1.1
1.5
1.7
0.9
2.2
0.8
0.8
0.6
0.7

2,190

1.0

1,380

0.7

2,000

1.0

3,010
1,890
2,740

1.4
0.9
1.3

3,420

1.6

2,340

1.1

1,330

0.6

1,040

0.5

3,500
3,100

1.7
1.5

No.
O-87
O-88
O-89
O-90

Ichigo Hongo Building
Oimachi Center Building
Win Gotanda Building 2
MIF Building

O-91

Ichigo Uchi Honmachi Building

O-92
O-93

Ichigo Minami Otsuka Building
Ichigo Nogizaka Building

O-94

Ichigo Hakata East Building

O-95
O-96

Ichigo Nakameguro Building
Ichigo Tachikawa Building
Ichigo Higashi Ikebukuro 3 Chome
Building

O-97

Acquisition
Price(JPY million)% ofPortfolio2

Tokyo Metro Area
Central Tokyo
Central Tokyo
Central Tokyo
Four Major Regional
CitiesTokyo Metro Area
Central Tokyo
Four Major Regional
CitiesTokyo Metro Area
Tokyo Metro Area

2,300
1,680
3,300
2,200

1.1
0.8
1.6
1.0

1,900

0.9

2,780
3,315

1.3
1.6

2,250

1.1

1,495
3,830

0.7
1.8

Tokyo Metro Area

3,840

1.8

1,750

0.8

3,500

1.7

2,750

1.3

205,537
1,210
2,400
1,400
5,010
210,547

97.6
0.6
1.1
0.7
2.4
10038–

Area1

Asset Name

Four Major Regional
CitiesFour Major Regional
O-99 Ichigo Hakataeki Higashi Building
CitiesFour Major Regional
O-100 Fukuoka Kensetsu KaikanCities
Subtotal - Office (84 Assets)
Z-09 Future IZUMIOther Regional Cities
Z-10 Ichigo Shibuya Bunkamura Dori Building Central Tokyo
Z-14 Ichigo Kamata Building
Tokyo Metro Area
Subtotal - Other (3 Assets)
Total (87 Assets)
O-98

Ichigo Marunouchi South Building

TK Equity Investment GK Kizuna1 TK Equity Interest
1

Central Tokyo refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. Tokyo MetroArea 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% of Portfolio is based upon acquisition price.

9