Ichigo Office(8975)

Today’s Strategic Asset Acquisitions and Sales
December 14, 2018

Ichigo Office REIT Investment Corporation (8975)
Ichigo Investment Advisors Co., Ltd.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

www.ichigo-office.co.jp/english

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

This material is a summary of the following releases detailing today’s
strategic acquisitions and sales:“Acquisition of Two Office Assets and Sale of Two Non-Office Assets,”
December 14, 2018
“Earnings Forecast Revision for the April 2019 Fiscal Period andEarnings Forecast for the October 2019 Fiscal Period,” December 14,
2018© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

3

Ichigo Office Growth Strategy Roadmap
Stage I - VI
2011/10

Stage VII

The Next Decade

Lay Foundations for Long-Term GrowthPremier Mid-Size Office J-REIT

2017/10Goals

Durably and Dynamically Grow Ichigo Office – Invest forGrowth・Sell non-office assets to secure funds for growth investments
・Adjust dividend reserve release policy
Invest for Sustainable Growth in Shareholder Value・Acquire high-quality assets via portfolio restructuring andusing borrowing capacity
・Carry out value-add capex

Actions■ Organic Growth Strategy
・Achieve minimal downtime between leases
・Carry out value-add capex to drive higher returns
・Implement environmental sustainability initiatives to growlong-term value
・Build a trusted Ichigo brand■ Acquisition-Driven Growth Strategy
・Use acquisitions to raise portfolio quality
・Acquire assets to increase shareholder value
・Consider M&A■ Financing Strategy
・Further improve borrowing terms・Diversify funding via issuance of bonds
・Raise credit rating
・Enter global REIT indices© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Build Win-Win Relationships with Tenants toGrow Shareholder Value and Contribute to
the Development of the Japanese Economy■ Ichigo Office Differentiation Strategy
・Drive high occupancy and earnings through atenacious focus on tenant satisfaction
・Support the growth of startup tenants throughtenant networking and business matchingservices
・Deliver services and spaces matched to tenant
needs
・Build a strong Ichigo Office brand centered on
tenant satisfaction■ Ichigo Office Portfolio Construction
・Further develop a specialized mid-size officeportfolio
・Drive sustainable growth through preserving
and improving Ichigo Office assets
・Be a leader in creating infrastructure andecosystem to support Japanese mid-size
offices and tenants4

Today’s Transactions Drive Further Growth (1)Executing on Strategy to Grow Shareholder Value by Focusing Portfolio on
High-Quality Office Assets
 Transaction counterparties: Japanese real estate companies
 Increased portfolio size to JPY 200B
 +JPY 69M annual NOI, +JPY 322 NAV per share
Economics
Portfolio Size% Office Assets

JPY 199.9B → JPY 203.0B
93.0% →

94.6%NOI+JPY 69M per annum

NAV per Share+JPY 322

Annualized forecast NOI of acquired assets calculated by IIA minus annualized NOI of sold assets based on October 2018 actual

Harvesting Gains on Sale in a Strong Real Estate Market
 Sale price +22% vs. book value, +8% vs. appraisal value
 JPY 370M of JPY 640M gains on sale retained for growth investments (includingthese acquisitions) in compliance with J-REIT conduit rules Part of proceeds used to increase April 2019 dividend by JPY 270M

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

5Today’s Transactions Drive Further Growth (2)Sale of Two Non-Offices and Acquisition of Two Mid-Size Offices in Central Tokyo (JPY 6B)
SalesAcquisitions
Ichigo Minami Otsuka Building

Ichigo Nogizaka Building

Closing Date

December 21, 2018

December 28, 2018

Area

Toshima-ku, Tokyo

Minato-ku, Tokyo

Features

Convenient access to central Tokyo only
1 station away from Ikebukuro Station, amajor rail hub

At center of the Akasaka, Roppongi,
Minami Aoyama areas favored by foreign
corporations

JPY 2.78B

JPY 3.32B

4.6%

4.1%

Location

6-min walk from Otsuka Station on JR
Yamanote Line and a 3-min walk fromShin-Otsuka Station on Marunouchi Line2-min walk from Nogizaka Station on
Chiyoda Line and an 8-min walk fromRoppongi Station on Oedo Line

Occupancy

100%

100%

SellerThird Party(Domestic)

Third Party(Domestic)

Asset
Ichigo Machida Ichigo Shin Yokohama
Arena Dori Building
East Building(Yokohama)(Machida City,Tokyo)

 Asset Type: Retail Book Value

JPY 2.947B
 Appraisal Value

JPY 3.33B
 Closing Date

December 20, 2018
 Expected Sales Price

JPY 3.6B
 Expected Gains on Sales

JPY 640M
 BuyerThird Party(Domestic)

Acquisition
Price
NOI Yield atAcquisition© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Growing Shareholder Value: Continued Growth in Base EPS
Base EPS +15.6% vs. April 2017
April 2019 Dividend +JPY 176 on Gains on Sale
Gains on Sale
Release from Dividend Reserve and Negative Goodwill Reserve
Base EPS

Dividend

1,923241

1,682April 2017

1,930

1,9641061071,824

October 2017

(JPY)

2,014

2,215
176

2,070

696969

1,857

1,945

1,970

2,001

April 2018

October 2018

April 2019
(Forecast)

October 2019
(Forecast)Base EPS = EPS - Capital Gains© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Acquisition: Ichigo Minami Otsuka Building (O-92)
A mid-size office building in an area with easy access to Tokyo CBD
Asset Overview
Acquisition Price

JPY 2,780 million

Appraisal Value

JPY 3,080 million

NOI Yield

4.6%

Asset TypeOfficeLocation

3-10-10 Minami Otsuka, Toshima-ku, Tokyo

Leasable Area

3,127.84m2

Structure

Steel Reinforced Concrete, 7F

Date Built

May 1987

Occupancy

100% (as of October 31, 2018)

Location and Features
・A mid-size office building located within a six-minute walk fromOtsuka Station on the JR Yamanote Line and a three-minute
walk from Shin-Otsuka Station on the Tokyo Metro Marunouchi
Line
・The area near Otsuka Station has undergone extensive
redevelopment, and there are many office buildings due to its
convenient location.
・Each floor has a standard floor plate of 528m2 (160 tsubo) andis equipped with individual air conditioning systems and raisedaccess floors, therefore catering to the demands of diversetenants.
・The building’s common areas have been refurbished.
・Tenants include a real estate company, an IT company, and aconstruction material manufacturer.

* Ichigo Office will change the building name from Minami Otsuka Square Building to Ichigo Minami Otsuka Building. For purposes of this presentation,
the building is referred to as the Ichigo Minami Otsuka Building.
© Ichigo Investment Advisors Co., Ltd. All rights reserved.

8

Acquisition: Ichigo Nogizaka Building (O-93)
A mid-size office building in an area popular with global companies
Asset Overview
Acquisition Price

JPY 3,315 million

Appraisal Value

JPY 3,510 million

NOI Yield

4.1%

Asset TypeOffice

Location

8-11-37 Akasaka, Minato-ku, Tokyo

Leasable Area

2,175.88m2

Structure

Steel Reinforced Concrete, B1F/7F

Date Built

May 1983

Occupancy

100% (as of October 31, 2018)

Location and Features
・A mid-size office building located within a two-minute walkfrom Nogizaka Station on the Tokyo Metro Chiyoda Line andan eight-minute walk from Roppongi Station on the Toei
Oedo and Tokyo Metro Hibiya Lines.
・Located near the popular Akasaka, Roppongi, and Minami
Aoyama commercial districts, and benefits from convenient
access to transportation.
・Each floor has a standard floor plate of 280m2 (85 tsubo) andis equipped with individual air conditioning systems andraised-access floors, therefore catering to the demands ofdiverse tenants.
・Tenants include an auto parts importer, office equipment
manufacturer, and apparel company.

* Ichigo Office will change the building name from Unizo Nogizaka Building to Ichigo Nogizaka Building. For purposes of this presentation, the building is referred to as
the Ichigo Nogizaka Building.
© Ichigo Investment Advisors Co., Ltd. All rights reserved.

9Reference: Portfolio (Other Asset Types)
JPY 2.1B in Unrealized Gains
as of October 31, 2018
LeasableBook Vakue
Area(JPY M)2(m )No.

Asset Name

Area

Location

Acquisition
Price(JPY M)

Z-02

Ichigo Fiesta Shibuya Building

Central Tokyo

Shibuya-ku, Tokyo

1,970

1,963

1,185.85

2,210

+246

+12.5%

Z-09

Konami Sports Club Izumi Fuchu

Other Regional Cities

Izumi City, Osaka

1,210

1,095

3,733.681,440+344+31.5%

Z-10

Ichigo Shibuya Bunkamura Dori Building

Central Tokyo

Shibuya-ku, Tokyo

2,400

2,464

778.773,220+755+30.6%

Z-11

Twicere Yokohama Isogo (Retail Section)

Tokyo Metro Area

Yokohama City, Kanagawa

1,620

1,518

2,717.77

1,880+361+23.8%

Z-12

Lions Square Kawaguchi

Tokyo Metro Area

Kawaguchi City, Saitama

2,430

2,376

7,788.09

2,710+333+14.0%

Z-14

Ichigo Kamata Building

Tokyo Metro Area

Ota-ku, Tokyo

1,400

1,446

2,124.68

1,520+73+5.1%

11,03010,86518,328.84

12,980+2,114+19.5%Total

Oct 2018
Appraisal Value(JPY M)

Unrealized
Gains/Losses%
ChangeLeasable Area and Occupancy are provisionally calculated using data of assets held as of October 31, 2018 and assets acquired inthe October 2018 period.
© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

10Notesp. 5 Calculations• Asset Sale NOI Yield = Annual NOI (October 2017 fiscal period annualized) divided by the sale price of the asset• NAV = (Net Assets + Unrealized Gains/Losses) / Total Shares Outstanding (Period-End) Pre-Assets and Sales Unrealized Gains
October 2018 Fiscal Period-End Appraisal Value minus October 2018 Fiscal Period-End Book Value Post-Assets and Sales Unrealized Gains
Portfolio Assets (83 assets): October 2018 Fiscal Period-End Appraisal Value minus April 2019 Fiscal Period-EndForecast Book Value※
Asset Acquisition: Appraisal Value at Acquisition minus April 2019 Fiscal Period-End Forecast Book Valuep. 6 Calculations• Asset Sale Forecast Book Value = Forecast book value as of the sale date calculated by IIA• Asset Sale Appraisal Value is as of October 31, 2018
• Asset Sale Gains on Sale = Sale Price minus Forecast Book Value and Other Expenses Relating to Asset Sale
• Asset Acquisition Forecast NOI Yield = Forecast annual NOI calculated by IIA divided by acquisition price© Ichigo Investment Advisors Co., Ltd. All rights reserved.

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Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as, anoffer to sell or a solicitation of an offer to buy any securities of Ichigo Office REIT Investment Corporation (“Ichigo Office”).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of management ofIchigo Office with respect to financial condition and future results of operations. These statements are based on certain
assumptions founded on currently available information. Accordingly, such statements are subject to risks, uncertainties andassumptions and there is no assurance as to actual financial conditions or results of operations. Actual results may vary fromthose indicated in the forward-looking statements. Accordingly, please refrain from solely relying on these statements.
These materials have been created by the management of Ichigo Office and Ichigo Investment Advisors Co., Ltd. (IIA) with thebelief that the information contained is accurate. However, there is no assurance given as to the accuracy, certainty, validity or
fairness of any such information. Please note that the content of these materials is subject to revision or retraction without priornotice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation, theJapanese version shall prevail. No copying or reproduction of these materials or part of these materials is allowed withoutobtaining prior consent from Ichigo Office and IIA.

Ichigo Office REIT IR Desk
TEL：03-3502-4891
IR_Office@ichigo.gr.jp
www.ichigo-office.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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