Ichigo Preserves and Improves Real Estate[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.

February 21, 2019
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/english
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Wataru Orii, PresidentInquiries: Hiroto Tajitsu, Head of Administration
Tel: +81-3-3502-4891

Sale of Section of Underlying Land
(Ichigo Toyamaeki Nishi Building)
Ichigo Office decided today to sell to Toyama Prefecture a section of the underlying
land of the Ichigo Toyamaeki Nishi Building.
1. Asset Sale Summary
Asset Name

Ichigo Toyamaeki Nishi Building

Asset Type/Asset Number

Office/O-38

Legal Form of Asset1

Real EstateAppraisal Value2

JPY 9,470,000

Sale Price3 (A)JPY 12,369,952

Book Value4 (B)Sale Price vs. Book Value4(A) – (B)Contract Date

JPY 4,734,000

February 21, 2019

Transaction Date

February 21,2019

Buyer
Settlement Method

JPY 7,635,000

Toyama Prefecture
Cash payment within 30 days from the day Toyama
Prefecture receives a payment request from Ichigo
Office that is in compliance with the Purchase and Sales
Agreement.

1

While the asset is currently a trust beneficiary interest in real estate (juekiken), the trust
will be cancelled before the sale and the asset’s legal form will change to real estate.
2
Appraisal Value is calculated by Tanizawa Sogo Appraisal as of December 1, 2018,
and is in compliance with the appraisal guidelines of Ichigo Investment Advisors(“IIA”) as well as the rules of the Investment Trusts Association of Japan.
1

3Sale Price is the total sale price indicated in the Purchase and Sales Agreement. Inaddition, Ichigo Office will receive a compensation of JPY 11,800,110 for the closing
and removal of a paid parking lot. The compensation will be recorded in Ichigo
Office’s April 2019 fiscal period.
4Book Value is an estimate based upon the most recent book value (October 2018 fiscalperiod) calculated proportionate to the section’s land area.
2. Sale RationaleThe road adjacent to the northwestern side of the building is a prefectural road subject
to the Ushijima Ninagawa Road Urban Planning Project (as established March 31, 1959
and amended April 27, 2005). An additional section of the underlying land also became
subject to the Project on April 11, 2011. After negotiations with Toyama Prefecture,
Ichigo Office has agreed to sell the section of land to the Prefecture.

2

3. Details of the Land being Sold
Asset Overview
Form of Ownership
Location
Property RightAreaLand
ZoningCoverage Ratio
Floor Area Ratio

Real Estate
1-1-19 Jinzu Honmachi, Toyama City, Toyama
Freehold
96.04m2 of 3,718.62m2
Neighborhood Commercial
80%
300%

Asset Name
Appraisal Value
Appraiser
Appraisal Date
Appraisal Value via Land ResidualMethod
Appraisal Value (Total Land)
IncomeMaximum 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

Appraisal Details
Ichigo Toyamaeki Nishi Building Underlying Land
SectionJPY 9,470,000
Tanizawa Real Estate Appraisal Co., Ltd.
December 1, 2018
Amount (JPY)
Note
Appraisal value of total land divided@83,600/m2
by total area
Net profit of maximum obtainable
311,000,000 rental income assuming maximum useof the building
310,402,470
Based on an analysis of potential rental
326,484,622 income, parking lot income, common
area service income, and other income
16,082,152 Based on long-term vacancy rates
92,445,549
Based on similar assets and past actual
26,837,335
amounts
Based on similar assets and past actual
15,999,181
amounts
Based on engineering reports and3,737,967
similar assets
Based on similar assets and past actual
6,809,386
amounts
Based on expected turnover rate and2,922,813 tenant acquisition costs for similar
assets34,437,200 Based on FY2018 actual amounts
Based on similar assets and past actual
770,460
amounts
931,207 Consumable goods, etc.
217,956,921
1,251,010 Based on a 1.0% investment yield
3Amount (JPY)
CapitalExpenditurea. Net Profit
b. Cap Rate

Note
Based on similar assets and past actual
5,778,450
amounts
213,429,481
Based on the leasing terms and anassessment of the asset’s location and5.0%
expected use as well as overall
financial market trends

c. Projected NOI Growthd. Discount Factor
e. Development Cost andExpected Development
Profitf. Amortization Rate to
Calculate Profit
Attributable to theBuilding
g. Net Profit Attributable to
the Building

0.5% Based on long-term CPI trends
0.906541

Based on an assumed two-year
development period (no income)

Total of construction cost, design
supervision fee, property taxes during
3,852,300,000 development, real estate acquisition
tax, initial leasing cost, anddevelopment profit
0.050670

Based on forecast useful life of 50
years

195,196,041 e×f

h. Adjusted Net Income
Attributable to the Land

16,529,361 (a – g)×di. Annual Reserve forDemolition Costs

2,366,810

j. Property Taxes During
Non-Income-Producing
Development Period

Based on building structure andforecast useful life

171,538

Net Profit Attributable to theLand

13,991,013 h – i – j

Cap Rate Attributable to theLand

4.5% b – cAppraisal Value via Comparable
Asset Method@98,600/m2
Notes

As the Land Residual Method resulted in undervalued and fluctuating Appraisal Values,the Comparable Asset Method was used to correctly reflect the land’s market value.

44. Buyer Details
Name

Toyama Prefecture

Relationship with Ichigo
Office or IIA

The buyer does not have any capital, personnel, or business
relationship of note with Ichigo Office or IIA. In addition,
the buyer is not an interested party as defined in theEnforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal rules of theAsset Management Company.

5. Broker Details
N/A
6. Use of Sale Proceeds
Proceeds from the asset sale will be retained for future use.
7. Transaction Schedule
Ichigo Office
Board Resolution Date
Contract Date
Transaction Date

February 21, 2019
February 21, 2019
February 21, 2019

8. Earnings Outlook
Because the earnings impact of the sale is minimal, there is no change to Ichigo Office’s
April 2019 and October 2019 earnings forecasts.

5Reference
1. Transaction Outcomesa. Appraisal Value of Ichigo Toyamaeki Nishi Building(JPY million)

Appraisal Value

Appraisal Date

Pre-Sale Appraisal Value

1,730

December 1, 2018

Post-Sale Appraisal Value

1,730

December 1, 2018

Appraisal Value is calculated by Tanizawa Sogo Appraisal. Pre-Sale Appraisal Value isof the building and the underlying land; Post-Sale Appraisal Value excludes the landsold in this transaction.
b. Earnings Impact Details
Expenses of JPY 5 million are anticipated to remove a parking lot and repair thepavement. The sale will thus result in lower parking lot income from the removal of theeight parking spaces. Ichigo Office will receive JPY 11,800,110 from Toyama
Prefecture as a compensation for the closing and removal of the parking lot.
c. Legal Details
The sale will not result in the breach of any Japanese laws or regulations, including withrespect to floor-area ratios (FAR) and building coverage ratios (BCR).
2. Diagram of Land to be Sold

6

Portfolio Reference Information
Post-Sale Portfolio
No.
O-02
O-03
O-04
O-05
O-06
O-07
O-08
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
O-27
O-28
O-29

Area1

Asset Name
Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya Kamiyamacho Building
Ichigo Akasaka 5 Chome Building
Ichigo Shibakoen Building
Ichigo 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

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
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major Regional
CitiesOther Regional
CitiesOther Regional
CitiesOther Regional
CitiesCentral Tokyo
Central Tokyo

O-34 Ichigo Sakae Building
O-37 Ichigo Marunouchi Building
O-38 Ichigo Toyamaeki Nishi Building
O-39 Ichigo Mirai Shinkin Building
O-42 Ichigo Takamatsu Building
O-46 Ichigo Kanda Nishikicho Building
O-47 Ichigo Akihabara North Building
7

Acquisition
Price2(JPY million)% ofPortfolio3

3,254
2,740
1,920
1,550
1,200
1,505
735
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

1.6
1.3
0.9
0.8
0.6
0.7
0.4
0.5
0.9
0.9
0.6
0.3
0.3
0.9
0.6
0.4
0.4
2.5
0.9
0.7
0.4
0.7
1.0
0.3
0.4
1.1

4,705

2.3

6,710

3.3

1,645

0.8

1,158

0.6

3,010

1.5

2,130
5,500

1.02.7

No.

Area1Asset Name

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

O-48 Ichigo Sakaisuji Honmachi BuildingO-49
O-50
O-51
O-52
O-53
O-54
O-55
O-56

Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building
Ebisu Green Glass
Ichigo Omori Building
Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Ofuna Building

O-57 Ichigo Sendai East Building
O-58 Ichigo Kumamoto Building
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69

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

O-70 Koriyama Big-i (Office Section)
O-71 Ichigo Kawasaki Building
O-72 Ichigo Shibuya East Building
O-73 Ichigo Ningyocho Building
O-74 Ichigo Nishi Honmachi Building
O-75 Ichigo Hakata Building
O-76 Ichigo Nishiki First Building
O-77
O-78
O-79
O-80

Ichigo Ikenohata Building
Ichigo Ikebukuro East Building
Ichigo Motoazabu Building
Ichigo Otsuka Building

O-81 Ichigo Nagoya Building
8Acquisition
Price2(JPY million)% ofPortfolio3

1,940

1.0

2,210
1,905
5,900
3,850

1.1

1,580
3,430
1,174
2,000

0.9
2.9
1.9
0.8
1.7
0.6
1.0

1,840

0.9

1,450

0.7

7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570

3.5
1.8
2.0
2.4
2.3
1.2
1.2
1.6
1.8
0.9
2.3

1,660

0.8

1,750
1,350
1,450

0.9
0.7
0.7

2,190

1.1

1,380

0.7

2,000

1.0

5,130
3,010
1,890
2,740

2.5
1.5
0.9
1.3

3,420

1.7

AcquisitionPrice2(JPY million)% ofPortfolio3

O-82 Ichigo Fushimi Building

2,340

1.2

O-83

1,330

0.7

1,040

0.5

3,500
3,100
2,300
1,680
3,300
2,200

1.7
1.5
1.1
0.8
1.6
1.1

1,900

0.9

2,780
3,315
191,987
1,970

1.4
1.6
94.6
1.0

1,210

0.6

2,400
1,620

1.2
0.8
1.2
0.7
5.4
100.0

No.

O-84
O-85
O-86
O-87
O-88
O-89
O-90
O-91
O-92
O-93
Z-02
Z-09
Z-10
Z-11
Z-12
Z-14

Area1

Asset Name

Four Major Regional
CitiesFour Major Regional
Ichigo Nishiki BuildingCities
Four Major Regional
Ichigo Minami Morimachi Building
CitiesIchigo Shibuya Udagawacho Building
Central Tokyo
Win Gotanda Building
Central Tokyo
Ichigo Hongo Building
Tokyo Metro Area
Oimachi Center Building
Central Tokyo
Win Gotanda Building 2
Central Tokyo
MIF Building
Central Tokyo
Four Major Regional
Ichigo Uchi Honmachi Building
CitiesIchigo Minami Otsuka Building
Tokyo Metro Area
Ichigo Nogizaka Building
Central Tokyo
Subtotal - Office (79 Assets)
Ichigo Fiesta Shibuya Building
Central Tokyo
Other Regional
Konami Sports Club Izumi FuchuCities
Ichigo Shibuya Bunkamura Dori Building
Central Tokyo
Twicere Yokohama Isogo (Retail Section)
Tokyo Metro Area
Lions Square Kawaguchi
Tokyo Metro Area
Ichigo Kamata Building
Tokyo Metro AreaSubtotal - Other (6 Assets)
Total (85 Assets)

1

2,430
1,400
11,030203,017

Central Tokyo refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. Tokyo Metro
Area refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, and Saitama Prefectures. Four
Major Regional Cities refers to Osaka, Nagoya, Fukuoka, and Sapporo.
2Acquisition Price excludes incidental expenses such as consumption taxes and other fees.
3% of Portfolio is based upon acquisition price.

9