[For Information Purpose Only]
May 28, 2019
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Sale of Domestic Trust Beneficiary Interest
Invincible Investment Corporation (“INV”) hereby announces the decision today to sell Royal Parks
Tower Minami-Senju (the “Sale”), a residential property located in Tokyo (hereinafter, the “Property”) by
Consonant Investment Management Co., Ltd. (“CIM”), the asset manager of INV.
1. Overview of Sale(in JPY million)
Use

Property
numberResidential
property

A105

Property
nameAcquisition
price

Book
1
value

Anticipated2
sale price

Expectedgain on3
sale

21,87922,13027,7005,509

Categoryof specified
assetsTransferee

Undisclosed

Royal Parks
Tower

Trust

Minami-Senju(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)4

BeneficiaryInterest

As of December 31, 2018.
Anticipated sale price does not include adjustments for real estate taxes or city planning taxes, or
national or local consumption taxes; hereinafter the same.
Expected gain on sale is calculated by deducting the estimated transfer related cost and is an estimate
as of today, and is subject to change.
The name of the transferee is not disclosed, as the transferee’s consent has not been obtained fordisclosure. For an overview of the transferee, please refer to “4. Overview of Transferee” below.
Amounts are rounded down to the nearest million yen; hereinafter the same.

2. Reasons for Sale
INV is pleased to announce the sale of Royal Parks Tower Minami-Senju for an NOI cap rate1 of
4.26%, and an NOI cap rate after depreciation2 of 2.59%. The Sale is a part of INV’s effort tocontinuously improve its profitability for unitholders including through pursuing asset replacement.
CIM decided to dispose of the Property after evaluating the characteristics of the Property, theresidential transaction markets and INV’s portfolio strategy. Due to the level of NOI cap rate andNOI cap rate after depreciation, the Sale is expected to have an accretive impact on INV's overall
NOI yield before and after depreciation.
This English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

1

Since its acquisition in March 2017, the Property has shown both consistent and strong NOI growth
as a result of INV’s effort to increase rents and reduce expenses. INV was able to increase
the rent per tsubo3 by 8.9% between March 31, 2017 and April 30, 2019. INV was also able toreduce the PM fee by JPY 15.7 million4, or 40.9%, on an annualized basis after the change of themaster lease and property management company for the Property in December 2017. As a result,
INV increased NOI on the property by 13.4% as compared with pre-acquisition NOI5.
INV originally acquired the Property from a sponsor related entity in March 2017 for JPY 21.8
billion. With its value added approach, INV increased the Property’s NOI as described above andexpects to sell for JPY 27.7 billion (representing a price that is 24.9% above book value), which willallow INV to recognize a JPY 5.5 billion expected gain on sale. The sale price is also 18.4% above
the most recent appraisal value (as of April 1, 2019).
In addition, INV obtained net cash flow6 of approximately JPY 2.5 billion from the Property during
the holding period (from March 14, 2017 to the anticipated sale date) and was able to earn a 20.5%
leveraged IRR7 based on the average leverage at INV, showing that this was an accretivetransaction for INV.
INV plans to retain substantially all of the sale proceeds8 in order to acquire additional assets in the
future as a part of its asset replacement strategy. After initiating its asset replacement strategy in2017, INV has been working to improve the profitability of its portfolio through the strategic
replacement of assets. The closing of the Sale is expected to occur on June 7, 2019. INV is notchanging its forecasted DPU guidance announced today to incorporate any proceeds from the Saleand plans to pay out dividends as if the Property was held through June 30, 2019. INV currently
has a pipeline with its sponsor and can further consider acquisitions from the sponsor pipeline byutilizing the sale proceeds of the Property.
(Note1) Calculated by dividing aggregated actual NOI for January 1, 2018 – December 31, 2018 of the Property by
the anticipated sale price.
(Note2) Calculated by dividing aggregated actual NOI (after deducting depreciation expenses) for January 1, 2018
– December 31, 2018 of the Property by the anticipated sale price.
(Note 3) Monthly rent per tsubo as of the relevant date calculated as the weighted average monthly rent per tsubo
for the units leased to end tenants based on leased area.
(Note 4) Difference in PM fee between the 12 months ended March 31, 2017 when INV acquired the Property andthe 12 months ended April 30, 2019.

The PM fee before acquisition by INV is based on the data provided

by the previous owner.
(Note 5) The NOI increase is a comparison between the 12 months ended March 31, 2017 and the 12 months
ended April 30, 2019.

The actual results before acquisition of the Property by INV on March 14, 2017 arebased on the data provided by the previous owner.
(Note 6) NOI minus capital expenditure and estimated interest expenses (as described in (Note 7) below).
(Note 7)The Leveraged Internal Rate of Return (Leveraged IRR) is an estimated figure calculated by CIM as theinternal rate of return (compound annual rate), after adjusting for estimated leverage, for the initial
This English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

2

investment amount for the Property based on the net cash flow obtained from the Property during theholding period (from March 14, 2017 to the anticipated sale date).
Adjustments for the estimated leverage, or borrowings, are applied by (i) deducting the estimatedborrowing amount, which calculated by multiplying the appraisal value of the Property at the time of theacquisition by INV’s average appraisal LTV during the holding period, from the initial investment amount,and (ii) deducting estimated interest expenses when calculating the net cash flow using the averageinterest rate for such estimated borrowing amount.
(Note 8) Investment corporations under the J-REIT system can deduct the amount of cash distributions in
calculating its taxable income as long as they satisfy certain conditions (conduit requirements), in order toprevent double taxation between J-REIT and unitholders. Due to the fact that the gain from sale of theProperty will be retained by INV, the distribution payout ratio will not be large enough to fulfill the tax
conduit requirement of paying out at least 90% of net distributable income as dividends. However, INV
has tax-loss carry forwards in the amount of JPY 22.6 billion (mainly arising out of disposition of the assets
in December 2010 fiscal period) which is more than enough to fully offset the expected taxable income.
As a result, INV does not expect to be required to pay any income taxes for the fiscal period ending June
2019.

3. Details of the Property
a. “Outline of Specified Assets and Properties” column:
・ “Category of specified assets” shows the type (the legal form) of real estate and otherassets as specified asset.
・ “Acquisition Date” shows the date when an acquisition is executed, which is specified in thepurchase and sale agreement or the trust beneficiary interest purchase and saleagreement.
・ “Acquisition Price” shows a purchase price of the Property specified in the purchase andsale agreement or the trust beneficiary interest purchase and sale agreement;
consumption tax is not included, and the price is rounded down to the nearest million yen.
・ The details in “Location“ (excluding address), “Lot Area (m2)“ of the “Land“, “Total Floor
Area (m2) ,” “Structure/No. of Stories,“ “Purpose of Use,“ and “Completion Date” of the“Building“ are, unless otherwise specified, as shown in the property register. The “Total
Floor Area“ is the gross floor area (if there is no annotation otherwise, an annex building is
not included), and with respect to “Purpose of Use,” the primary purposes appearing in theproperty register are listed. Further, the “Completion Date” lists the time at which thebuilding was newly constructed, as appearing in the property register.
・ “Transport“ shows the amount of time it takes to walk to the nearest station based on thedescription in the Real Estate Appraisal Report (in case there is no description of time
distance in the Real Estate Appraisal Report, “Transport“ is calculated by assuming
walking time on a road for a distance of 80 meters per minute in accordance with the Fair
Competition Code on the Real Estate Representations (Fair Trade Commission
Notification No.2 of 2003, including subsequent revisions) (hereinafter, referred to as the“Fair Competition Code”) and the Ordinance for Enforcement of the Fair Competition Code.
If unidentified, it is based on the description in other materials.
・ In “Zoning,“ the class of zoning under the respective items of Article 8(1) of the City
This English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

3Planning Act (Act No. 100 of 1968) is listed.
・ In “Building Coverage Ratio,“ the ratio of a building’s area with regard to the land area as
set forth under Article 53 of the Building Standards Act (Act No. 201 of 1950, as amended;
the “Building Standards Act“) is listed.
・ In “Floor Area Ratio,“ the ratio of a building’s total floor area with regard to the land area as
set forth under Article 52 of the Building Standards Act is listed.
・ In “Trustee,“ the current trustee of the Property is listed as to the Property.
・ In “Master Lease/Property Management Company,” with respect to the properties forwhich a master lease agreement has been entered into, the type of lease (either apass-through master lease or a fixed rent) is indicated. “Pass-through master lease” isdefined as a lease under which, pursuant to the pass-through master lease agreement
entered into between the master lease company and INV or the trustee, the amount equal
to the rent under the sublease agreement between the master lease company and the end
tenant shall be paid to INV or the trustee. “Guaranteed rent” is defined as a lease underwhich a specified rent shall be paid to INV or the trustee, regardless of the rent under thesublease agreement between the master lease company and the end tenant.
b. “Lease Overview” column:
・ Based on the lease agreement effective as of December 31, 2018.
・ “Total No. of Tenant(s)” is calculated by counting a lessee who has directly concluded alease agreement for each property as one tenant, and a tenant who has rented two or
more rooms in a single property is calculated as one tenant.
・ In “Leasable Area,” the total leasable floor area for guest room, residential, office, retailand others for the area owned by INV is listed.
・ In “Leased Area,” the total sum of the leased area with respect to which a lease agreementwith an end-tenant has actually been entered into and which are leased to the end-tenant(the area specified in the lease agreement) is listed.
・ In “Security Deposit/Guarantee,” the amount of the security deposit/guarantee money after
amortization pursuant to the lease agreement is listed.
・ In “Occupancy Rate,” the ratio of the leased area to the leasable area is shown, rounded
to the first decimal place.
c. “Income and Expenditures, Etc.” column:
・ Based on the information for the operating period from July 1, 2018 to December 31, 2018.
・ Amounts are rounded down to the nearest thousand yen. Therefore, the figures may notnecessarily match the total value when added together. Unless otherwise specifically
noted, the amounts do not include consumption tax, etc.
・ “Taxes and Public Dues” include property tax and city planning tax, which are generally
imposed on the owner on January 1 of each year.
・ ”Non-life Insurance Premiums” is the total amount of paid insurance premiums distributed
proportionally over the relevant period.
d. “Summary of Real Estate Appraisal Report” column:
INV has requested a real estate appraisal for the Property from an appraisal agency based on
the matters for consideration in a real estate appraisal under the Act on Investment Trust andThis English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

4Investment Corporations (the “Investment Trust Act”), the Act on Real Estate Appraisal (Act No.
152 of 1963, as amended; the “Act on Real Estate Appraisal”) and real estate appraisal
standards. An appraisal value of a property is merely an opinion of the real estate appraiser
regarding the value of the appraised property at the time the appraisal was conducted inaccordance with the Act on Real Estate Appraisal and real estate appraisal standards, etc. A realestate appraisal is neither a guarantee nor a promise that an asset can be sold or purchased atsuch appraisal value either now or in the future.

Outline of Specified Assets and Properties.
Legal Form of Asset
LocationTransport
Acquisition Date
Acquisition PriceLand

Building

Master Lease/Property
Management Company
Type of Agreement
Outline of a Lease Contract

Trust Beneficiary Interest

Trustee(Lot Number)
4-346-48 Minami-Senju, Arakawa-ku, Tokyo(Address)
4-7-3 Minami-Senju, Arakawa-ku, Tokyo
5-minute walk from Minami-Senju Station on Tokyo Metro Hibiya Line, JR Joban Line, Tsukuba Express Line
March 14, 2017
Income and Expenditures, Etc.
（JPY thousand）
JPY 21,879 million
July 1, 2018 ～Operating Period
Property Right
Land lease
December 31, 2018
ZoningSemi-industrial area
Rental revenues (a)782,653
Lot Area (m2)
8,738.44
Rent Income
703,844
Building Coverage /60%/200% (Note 1)
Other income etc.
78,808
Ratio/Floor Area Ratio
Property Right
Ownership
Total expenses (b)498,964
Condominiums,
Maintenance and management
122,064
Purpose of Use
SeniorCitizens
expenses etc.
Properties / OfficeTotal Floor Area (m2)47,424.89 (Note 2)
Taxes and Public Dues
35,516Structure/No. of Stories

RC B1/39F

Completion Date

May 2008

Non-Life Insurance Premiums
Depreciation (c)Other expenses
Profit and Loss (a) – (b)NOI (a) – (b) + (c)Goodworks Co., Ltd.
Pass through master lease

Total number of tenants

1

2

Leased area (m )Occupancy Trend

Sumitomo Mitsui Trust Bank,
LimitedAs of the end of
Dec. 2016－

36,734.68
As of the end ofJun. 201792.7%

Tenant Leasehold and security
deposit
Leasable area (m2)
As of the end of
As of the end of
Dec. 2017
Jun. 2018
94.1%
93.1%

1,328
310,440
29,614
283,689594,129

JPY 195,181 thousand
39,113.46
As of the end of
Dec. 2018
93.9%(Note 1) The floor area ratio is relaxed to 500% in accordance with the relaxation of the floor area ratio in “Minami-Senju North District
City Plan (W1 City Block).”(Note 2) In addition, parking building (5,700.54 m2) as an annex building exists.

This English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5Summary of Real Estate Appraisal Report
Appraisal Value

JPY 23,400 million

Appraisal Firm

Japan Real Estate InstituteTime of Valuation

April 1, 2019
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

Contents

Overview(JPY thousand)
23,400,000
23,500,000(I) Operating Revenue [(a)-(b)]1,567,442(a) Total Potential Revenue

1,643,606(b) Vacant Room Losses, etc.

Based on mid-to-long term potential revenue of current leasing
conditions and market level

76,164(II) Operating Costs (Expense Rate)
323,212[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance and Management Costs

73,000(d) Utility Costs

40,000

Based on maintenance and management costs of historical data fromprevious year and comparable assets
Based on utility costs of historical data from previous year andcomparable assets
Based on repair costs level of historical data and comparable assets(e) Repair Costs

33,852(f) Property Management Fee

23,116(g) Tenant Solicitation Expenses

34,885(h) Taxes and Public Dues

71,035

Based on the documents relating to taxes and public dues(i) Non-life Insurance Premiums

2,000

Based on insurance premiums as well as comparable assets(j) Other Costs

45,324

Including land lease fees

(III) Net Operating Income [(I)-(II)]and repair costs etc. in the engineering report
Based on historical data, contract[s] and market
Based on historical data from previous years and [terms of rental] ofcomparable assets

1,244,230(k) One-time Investment Gains

2,580

Assume investment return as 1.0%(l) Guarantee Deposits Loss

8,969

Assume investment return as 1.0%(m) Capital Improvements and Expenses

40,880

Based on comparable assets and estimate in the engineering report(IV) Net Income［(III)+(k)-(l)-(m)]1,196,961
Based on locl standard yield which is adjusted by adding andCapitalization Yield

5.1％

subtracting spreads with consideration of the property’s individuality,
building and other conditions, future uncertainty and comparable
assets’ transaction yields(2) DCF Method

23,300,000

Discount Rate

4.0％

Final Capitalization Yield

5.8％

2. Estimated Price using Cost Method

Based on comparable assets’ investment yield with consideration of
the characteristics of the property
Based on comparable assets’ transaction yield with consideration of
the characteristics of the property

19,600,000

Land Ratio

36.5％

Building Ratio

63.5％
Judged that income approach value truly replicates the price formation process from an income

Other Points to be Noted for Appraisal by Appraisal Firm

perspective, is more persuasive and adopted the Income Price, with the costapproach value asa referenceThis English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

64. Overview of Transferee
Because consent for disclosure has not been obtained from the transferee of the Property, the nameof the transferee is not disclosed. The transferee is a Japanese TMK (Tokutei Mokuteki Kaisha).
As of today, there are no capital, personnel, or transactional relationships that should be noted
between INV/CIM and the transferee. Further, the transferee is not a related party of INV or CIM,
and as of today, the transferee is not an interested person, etc. as provided in the Investment Trust
Act or a sponsor-related person under the voluntary rules specified by CIM as countermeasuresagainst conflicts of interests in the management of INV’s investments.
5. Transactions with Interested Persons etc.
Not applicable.
6. Overview of Brokerage
Because consent for disclosure has not been obtained from the brokers, the names of the brokers
are not disclosed. The brokerage with regard to the Property has been jointly conducted by twocompanies.
Broker 1:
As of today, there are no capital and personnel relationships that should be noted between INV andthe broker, and there are no capital, personnel, and transactional relationships that should be noted
between CIM and the broker, but there is a certain transactional relationships based on laws andregulations between INV and the broker. Further, the broker is not a related party of INV or CIM,
and as of today, the broker is not an interested person, etc. as provided in the Investment Trust Act
or a sponsor-related person under the voluntary rules specified by CIM as countermeasures against
conflicts of interests in the management of INV’s investments.
Broker 2:
As of today, there are no capital or personnel relationships that should be noted between INV andthe broker, and there are no capital or personnel or transactional relationships that should be noted
between CIM and the broker, but there is a certain transactional relationships related to asset
management between INV and the broker. Further, the broker is not a related party of INV or CIM,
and as of today, the broker is not an interested person, etc. as provided in the Investment Trust Act
or a sponsor-related person under the voluntary rules specified by CIM as countermeasures against
conflicts of interests in the management of INV’s investments.
7. Schedule
Sale decision date:
Agreement execution date:
Anticipated sale date:
Anticipated sale proceeds payment method:

May 28, 2019
June 7, 2019
Lump-sum payment

This English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

78. Use of Sale Proceeds
Almost all of the sale proceeds of the Property, together with the proceeds from the planned sale of
Spacia Ebisu1, which is scheduled to be sold on June 19, 2019, is expected to be reinvested for new
acquisitions as is consistent with INV’s track record of asset replacement. We have not determined
any specific acquisitions as of today, and we will announce promptly when any are determined.
(Note1) See “Notice concerning Sale of Domestic Trust Beneficiary Interest” dated May 17, 2019 for details of thesale of Spacia Ebisu.

9. Future Outlook
Please refer to “Notice concerning Revision of Forecast of Financial Results and Distribution for the
32nd Fiscal Period Ending June 2019” announced today for the revision of the forecasts for the fiscal
period ending June 2019. Moreover, there are no changes to the forecasts of financial results forthe fiscal period ending December 2019.

Website of INV: http://www.invincible-inv.co.jp/eng

This English language notice is a translation of the Japanese-language notice released on May 28, 2019 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

8