<Provisional translation>
March 27, 2018

For Immediate Release
REIT Issuer
Hankyu REIT, Inc. (Securities Code: 8977)
19-19 Chaya-machi, Kita-ku, Osaka
Yoshiaki Shiraki, Executive Director
Asset Management Company
Hankyu REIT Asset Management, Inc.
Yoshiaki Shiraki, President & Representative Director
Contact:
Hiroshi Yoshida
General Manager, IR and Public Relations Department
Email: hankyureit-ir@hankyu-rt.jp

Notice Concerning Acquisition of Domestic Real Estate
Hankyu REIT, Inc. (hereafter “Hankyu REIT”) hereby notifies that Hankyu REIT Asset Management, Inc., theasset management company that Hankyu REIT has selected to manage its assets (hereafter the “AssetManagement Company”), today decided to make the following acquisition of assets and Hankyu REIT
completed the acquisition.
Details
1. Overview of Acquisition(1) (Tentative name) MANDAI Nigawa Store (site)1) Acquired Asset :Right of ownership

2) Property name:(Tentative name) MANDAI Nigawa Store (site)3) Acquisition price:

2,280,000,000 yen (excluding acquisition-related expenses, property tax, city
planning tax and consumption tax, among others)4) Appraisal value:

2,300,000,000 yen (Date of appraisal: February 28, 2018)5) Acquisition date:

March 27, 20186) Seller:

Domestic corporation (Please refer to “5. Overview of Seller” below) (Note 1)7) Acquisition fund:Cash on hand, etc. (Note 2)(2) LAMU Higashiosaka Branch (site)1) Acquired Asset:

Right of ownership

2) Property name:

LAMU Higashiosaka Branch (site)3) Acquisition price:

1,850,000,000 yen (excluding acquisition-related expenses, property tax, city
planning tax and consumption tax, among others)4) Appraisal value:

1,870,000,000 yen (Date of appraisal: February 28, 2018)5) Acquisition date:

March 27, 20186) Seller:

Domestic corporation (Please refer to “5. Overview of Seller” below) (Note 1)7) Acquisition fund:Cash on hand, etc. (Note 2)(Note 1) The name of the seller is not disclosed as the consent of the seller was not obtained.
(Note 2) Procured funds of 2.0 billion yen indicated in “Notice Concerning Debt Financing” dated today shallsubstantially be allocated to part of the funds for the acquisition of (Tentative name) MANDAI Nigawa Store(site) and LAMU Higashiosaka Branch (site). For details, please refer to the above press release.

12. Reason for Acquisition
Hankyu REIT acquired the sites of community-based retail facilities (hereafter the “Two Properties”) toattain steady growth, based on the target and policy of asset management stipulated in its Articles ofIncorporation.
Acquisition of the Two Properties is a realization of agile property acquisitions utilizing the increased
borrowing capability through the public offering announced on January 25, 2018. With the acquisition, theKansai Region, which is the major investment area of Hankyu REIT, will be strengthened and the stability ofthe portfolio will be improved. Furthermore, the acquisition was determined as both transactions for the Two
Properties are one-on-one transactions utilizing the Asset Management Company’s own network and fellwithin a price range Hankyu REIT deemed appropriate. Focusing on the Kansai Region and in collaboration
with the sponsor group, Hankyu REIT will continue to promote growth that improves the quality of its portfolio
and enhances revenue stability.
Given the yield after depreciation of the Two Properties is 4.2% (Notes 1 and 3) as below and surpassing
the average yield after depreciation of the portfolio at the end of the 25th fiscal period (3.7%), Hankyu REIT
believes it should help to expand the asset scale as well improve revenue stability.
[Status of Portfolio]
End of 25th
fiscalperiod(end ofNovember
2017)
23

Number ofproperties

Assets (to be) acquired

METS
OZONE

(Tentative name)
MANDAI Nigawa
Store (site) (Note3)

LAMU
Higashiosaka
Branch (site)

Vessel Inn
HakataNakasuTotal

1 property

1 property

1 property

1 property

4
properties

February15, 2018

March 27, 2018

March 27, 2018

March 29,
2018

5,400
million yen

2,280
million yen

1,850
million yen

2,760
millionyenproperties

Acquisition(planned)date
Acquisition(planned)
price
Asset scale
Average
NOI yield(Note 1)
Averageyield after
depreciation(Note 1)
Unrealized
gain/loss(Note 2)After theacquisitionof Assets(to be)acquired(Note 4)27
properties

12,290
million yen
153,918
million yen

141,628
million yen
4.9%

5.4%

4.2%

4.2%

4.3%

4.8%

4.9%

3.7%

4.2%

4.2%

4.2%

2.7%

3.9%

3.7%

20,461
million yen-149
million yen-22
million yen-17million yen-49
millionyen-238
million yen

20,222
million yen(Note 1) Average NOI yield is calculated by dividing the sum total of (a) the difference between the real estate lease
operation income and real estate lease operation expenses of each property and (b) depreciation, by totalacquisition (planned) price. Average yield after depreciation is calculated by dividing the sum total of difference
between the real estate lease operation income and real estate lease operation expenses of each property, by totalacquisition (planned) price. Average NOI yield and Average yield after depreciation are calculated based on thefollowing figures.
・End of 25th fiscal period: Actual figures for the 25th fiscal period.*・Assets (to be) acquired: Figures stated in the appraisal reports.
・After the acquisition of Assets (to be) acquired: Figures after adding the figures in the appraisal reports of theAssets (to be) acquired to the actual figures for the 25th fiscal period.** For OASIS Town Itami Konoike (site), figures are calculated using the figures stated in the appraisal reports.
(Note 2) Unrealized gain/loss indicates the difference between the appraisal value and the book value and is calculated2based on the following figures.
・Assets (to be) acquired: Figure calculated based on the book value (expected value) which is the total of theacquisition (planned) price and acquisition expenses that is to be recorded as asset pursuant to the accounting
policy of Hankyu REIT.
・After the acquisition of Assets (to be) acquired: Figure obtained by adding/subtracting unrealized gain/loss of theAssets (to be) acquired to/from unrealized gain/loss at the end of the 25th fiscal period.
(Note 3) As of today, a building is being constructed on top of (Tentative name) MANDAI Nigawa Store (site) by the lessee,and the rent up to either the building’s completion date or September 2, 2018 (whichever comes first) will beequivalent to 51.1% of the rent scheduled to be received on and after said date. The property’s real estate lease
operation income and real estate lease operation expenses are calculated based on the operating revenues andoperating costs in the second year with an assumption of 100% rent collection, using the DCF method described in
the appraisal report.
(Note 4) The figures after the acquisition of Assets (to be) acquired are figures considering only assets acquired or assets tobe acquired after the end of the 25th fiscal period and may differ from actual figures.

Hankyu REIT evaluated the following points upon deciding the acquisition of the Two Properties.
(1) (Tentative name) MANDAI Nigawa Store (site)
The area near Nigawa Station on the Hankyu Imazu Line where the property is located is a dominant areaof the Hankyu Hanshin Holdings Group. It is popular as a commuter town for Osaka and Kobe as both cities
can be accessed in about 30 minutes. Furthermore, the area near Nigawa Station (the station nearest theproperty) is an educational district with schools such as Kwansei Gakuin University, a leading private university
in Kansai, and the population is expected to increase with the current residential development.
A building is currently being built by the lessee of the property, MANDAI Co., Ltd., and is scheduled to open
in fall 2018. MANDAI Co., Ltd., is a company with 147 supermarkets in Kansai area (as of the end of February2018). It is distinguished by the development of community-based attentive stores, and it actively implements adominant strategy through the concentration of store within a given area in order for securing users within the
trade area along with effective logistics and product procurement. It is also capable of extending the three
perishable foodstuffs as well as having price appeal and is evaluated as having high customer reputation.
(2) LAMU Higashiosaka Branch (site)
The area near the property is a residential area with numerous families. The population in the area istrending upwards not only due to those working at nearby factories but also those commuting to Osaka Cityand such, as the price of residences is relatively inexpensive and access to central Osaka is excellent. The
store on the property is a 24-hour discount store handling mainly food and which also has volume sales. It
captures the day-to-day needs of neighborhood customers while on the weekends is bustling with families
arriving by automobile from more distant locations to do larger shopping. The property also has high visibility
as it is located on Prefectural Route No. 21, a major road. Furthermore, Higashiosaka City where the property
is located hosts an accumulation of prominent Japanese small and medium-sized manufacturing companies.
The various products made by those companies with excellent technological abilities are praised both in Japanand abroad and the city ranks fifth in the nation for number of factories and first for factory density.
Daikokuten Bussan Company, the tenant, is a retail distributor and general food wholesaler (listed on theFirst Section of the Tokyo Stock Exchange) which handles the processing of vegetables, fruits, meats,
everyday dishes, etc., as well as breads, noodles and daily foods of private brands. The store on the property
not only provides reasonable prices but also puts effort into making the store enjoyable through the sale byweight of everyday dishes, etc.

3

3. Details of Asset(1) (Tentative name) MANDAI Nigawa Store (site)
Property name(Tentative name) MANDAI Nigawa Store (site)

Specified asset type

Right of ownership

Acquisition price

2,280,000,000 yen

Appraisal value
Location Lot Number
Land

Building
coverage
Floor area
ratio
Zone use
Site area
Form ofownership

2,300,000,000 yen (Date of appraisal: February 28, 2018)(Appraisal organization: DAIWA REAL ESTATE APPRAISAL CO., LTD.)
1-46-1 Nigawa-kita, Takarazuka City, Hyogo Prefecture
1-15 Tajikano-cho, Nishinomiya City, Hyogo Prefecture, etc.
Building

60%

Year built
Structure/200%

FloorsType 1 residential district
9,194.01m

Month/

Use
Total floor

2

areaForm ofRight of ownershipownership

Property manager

Hankyu Hanshin Building Management Co., Ltd.

Collateral

None

―
―
―
―
―

・Hankyu REIT owns the land only.
・As of today, the lessee of the property is constructing a building on the land
and the rent up to either the building’s completion date or September 2,
2018 (whichever comes first) will be equivalent to 51.1% of the rent
scheduled to be received on and after the said date (rent shall be paid in
Other matters to note

full on and after the said date).
・Nishinomiya City has surface rights for part of the site (lot number: 1-211
2

Tajikano-cho, Nishinomiya-shi (527.32m )) for the purpose of continuationof waterworks and sewage (for the period up to May 25, 2044) (nocompensation). Moreover, under the surface rights, the live load on theland surface must be within a certain limit regarding the use of the land.

4(2) LAMU Higashiosaka Branch (site)
Property name

LAMU Higashiosaka Branch (site)

Specified asset type

Right of ownership

Acquisition price

1,850,000,000 yen

Appraisal value

1,870,000,000 yen (Date of appraisal: February 28, 2018)(Appraisal organization: The Tanizawa Sogo Appraisal Co., Ltd.)

Location Lot Number

1-437-1 Kominowa, Higashiosaka City, Osaka Prefecture, etc.

Land

60%

Building

Building

coverage
Floor area
ratio
Zone useYear built
Structure/200%

Floors

Quasi-industrial area,

Use

type 1 residential district
Site area

Month/

8,942.54 m

2

Total floor
area

Form ofRight of ownership

Form ofownershipownership

Property manager

Hankyu Hanshin Building Management Co., Ltd.

Collateral

None

Other matters to note

Hankyu REIT owns the land only.

―
―
―
―
―

4. Overview of Leasing(1) (Tentative name) MANDAI Nigawa Store (site)
Total number of tenants

1

Principal tenant

MANDAI Co., Ltd.

Annual rentNot disclosed (Note 1)

Leasable area

9,194.01 m

Leased area

9,194.01 m (Note 2)

Occupancy rate

100% (Note 3)

Security deposits

Not disclosed (Note 1)

2
2(Note 1) Annual rent, etc., is not disclosed as consent has not been obtained from the tenant.
(Note 2) The areas specified in the lease agreement as of today are indicated.
(Note 3) The ratio of leased area to leasable area.

5(2) LAMU Higashiosaka Branch (site)
Total number of tenants

1

Principal tenant

Daikokuten Bussan Company

Annual rentNot disclosed (Note 1)

Leasable area

8,942.54 m

Leased area

8,942.54 m (Note 2)

Occupancy rate

100% (Note 3)

Security deposits

Not disclosed (Note 1)

2
2(Note 1) Annual rent, etc., is not disclosed as consent has not been obtained from the tenant.
(Note 2) The areas specified in the lease agreement as of today are indicated.
(Note 3) The ratio of leased area to leasable area.

5. Overview of Seller
For each of the Two Properties, the name, etc., is not disclosed as consent has not been obtained from theseller, which is a domestic corporation. Please note that there are no capital, personnel or business
relationships to be specially noted between Hankyu REIT or the Asset Management Company and the seller.
In addition, the seller does not fall under the definition of “related party.”
6. Status of Property Acquirers, etc.
Details are omitted as the acquisition of the Two Properties is not an acquisition from parties with special
interests of Hankyu REIT or the Asset Management Company
7. Transactions with Interested Parties, etc.
Hankyu Hanshin Building Management Co., Ltd., to which the property management operations for the Two
Properties is consigned, falls under the definition of “interested party, etc.” in the Act on Investment Trusts andInvestment Corporations. Accordingly, the property management agreements have been deliberated andapproved by the investment management committee, the compliance committee and the Board of Directors
Meeting of the Asset Management Company in accordance with the Asset Management Company’s rules
concerning transactions involving conflicts of interest set forth in the management guidelines, investment
management committee regulations and compliance committee regulations, etc.
8. Overview of Intermediaries
Not applicable.
9. Settlement Method, etc.
Full payment upon delivery of the Two Properties.
10. Acquisition Schedule
March 27, 2018

Resolution of acquisition of the Two Properties at the Asset Management Company’s
Board of Directors Meeting, conclusion of agreement, payment and acquisition

611. Future Outlook
Since the impact of the acquisition of the Two Properties on the conditions surrounding the management ofHankyu REIT’s assets for the fiscal period ending May 2018 (26th fiscal period: December 1, 2017 to May 31,2018) and the fiscal period ending November 2018 (27th fiscal period: June 1, 2018 to November 30, 2018)
announced in the “Hankyu REIT, Incorporated Financial Results for the 25th Fiscal Period From June 1, 2017
to November 30, 2017” dated January 25, 2018 is expected to be minimal, there is no revision to theforecasts.
•

Hankyu REIT website: http://www.hankyu-reit.jp/eng/<Attached Materials>
・Reference Material 1

Overview of Appraisal Report

・Reference Material 2

Table of Real Estate Portfolio after Acquisition of the Two Properties and Vessel Inn
Hakata Nakasu

・Reference Material 3

Property Photograph and Surrounding Area, Property Photograph and Map ofLocation7

Reference Material 1<Overview of Appraisal Report>
Property nameAppraisal value
Appraisal organization
Date of appraisal(Tentative name) MANDAI Nigawa Store (site)
2,300,000,000 yen
DAIWA REAL ESTATE APPRAISAL CO., LTD
February 28, 2018

Item
Value indicated by the income approach
Value using the direct capitalization method (direct
capitalization over a definite term)(1) Net operating income (NOI)(2) Provisional operating profit on deposit
and security

Value
2,320,000,000 yen
95,876,500 yen
534,000 yen(3) Capital expenditures(4) Net cash flow (NCF=(1)+(2)-(3))

Assessment taking into consideration the investment
management yield both from the management andprocurement perspectives

0 yen
96,410,500 yen(5) Discount rate

Value using the discounted cash flow (DCF)
methodBasis for valuation

2,300,000,000 yen

4.2%

Assessment taking into consideration the investment
yield, risks as an investment target, etc., with discountrates of similar transaction cases as references

2,290,000,000 yen

Discount rate (analysis period and recovery
price)

4.1%

Assessment taking into consideration the investment
yield, risks as an investment target, etc., with discountrates of similar transaction cases as references

Discount rate (end of analysis period)

4.3%

Assessment taking into consideration the investment
yield, risks as an investment target, etc., with discountrates of similar transaction cases as references

Special items to consider
at the time of making
adjustments to provisional
calculations and deciding
the appraisal value

The appraisal decision was based on an assessment of the value indicated by the income approach using both
the direct capitalization method and DCF method at 2,300,000,000 yen and the appraisal value was decidedwith the value.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither aguarantee nor an obligation, now or into the future, of a sale or purchase at that appraisal value.

8

<Overview of Appraisal Report>
Property nameAppraisal value
Appraisal organization
Date of appraisal

LAMU Higashiosaka Branch (site)
1,870,000,000 yen
The Tanizawa Sogo Appraisal Co., Ltd.
February 28, 2018

Item
Value indicated by the income approach
Value using the discounted cash flow (DCF) method

Value

Basis for valuation

1,870,000,000 yen
1,870,000,000 yen

Discount rate per period(Year 1 – Year 8.0)

4.4%

Discount rate per period(Year 9.0 – Year 28.1)

4.5%

Discount rate per period(upon returning to vacant land)

4.5%

Special items to consider
at the time of making
adjustments to provisional
calculations and deciding
the appraisal value

Assessment
comprehensively
taking
into
consideration of the content of the current leaseagreement, land rent levels, lease period, businessrisks and other factors, based on the method tocompare with the yields of land with leasehold righttransaction cases, etc., as well as the accumulation
methodAssessment based on the discount rate for thecurrent agreement period and adding the possibility
to sell the property as vacant land, etc.

The appraisal decision was made using the DCF method at 1,870,000,000 yen for the target property and the appraisal
value was decided with this value.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of the appraisal
conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards, etc. There are cases
where another appraisal of the same real estate may result in a different appraisal value, depending on the real estate appraiser conducting theappraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither a guarantee nor an obligation, now or into the
future, of a sale or purchase at that appraisal value.

9Reference Material 2< Table of Real Estate Portfolio after Acquisition of the Two Properties and Vessel Inn Hakata Nakasu>
Property
Code(Note)

Property Name

Facility(Type of
Use)

RegionAcquisition(Planned) Date

Acquisition(Planned)Price(millions ofyen)

Investment
Ratio

HEP Five
R1 (K)(14% of the quasi co-ownership of thetrust beneficiary interests)

RetailKansaiFebruary 1, 2005

6,468

4.2%

R2 (K)

Kitano Hankyu Building

RetailKansaiFebruary 1, 2005

7,740

5.0%

R3 (K)
R4 (K)Dew Hankyu Yamada
Takatsuki-Josai Shopping Center

RetailRetailKansaiKansaiFebruary 1, 2005
November 15, 2005

6,930
8,600

4.5%
5.6%

R5 (K)

Nitori Ibaraki-Kita Store (site)

RetailKansai

R6

RetailOther

March 29, 2006
October 2, 2006

1,318
2,170

0.9%

Kohnan Hiroshima Nakano-Higashi
Store (site)

R8

5
4,160

1.4%

Hotel Gracery Tamachi

RetailOther

April 9, 2007
December 25, 2008

R9 (K)

LaLaport KOSHIEN (site)
HANKYU NISHINOMIYA GARDENSRetailKansaiJanuary 22, 2009

7,350

4.8%

R11 (K)(28% of the quasi co-ownership of thetrust beneficiary interests)

RetailKansai

April 16, 2013

18,300

11.9%

RetailKansaiJune 27, 2013

8,100

5.3%

RetailKansaiJune 27, 2013

1,870

1.2%

RetailKansaiJune 4, 2014

3,100

2.0%

R12 (K)R13 (K)R14 (K)

AEON MALL SAKAIKITAHANADA(site)
MANDAI Toyonaka Honan Store(site)DAILY QANAT Izumiya Horikawa
Marutamachi Store (site)

2.7%

R15 (K)R16 (K)

kotocross Hankyu Kawaramachi
LIFE Shimoyamate Store (site)

RetailRetailKansaiKansaiJune 4, 2014
June 4, 2014

2,770
1,421

1.8%
0.9%

R17 (K)R18 (K)

MANDAI Gojo Nishikoji Store (site)
KOHYO Onohara Store

RetailRetailKansaiKansaiJune 24, 2014
July 1, 2016

4,182
1,631

2.7%
1.1%

R19 (K)R20OASIS Town Itami Konoike (site)
METS OZONERetailRetailKansai
Other

November 25, 2016
February 15, 2018

7,100
5,400

4.6%
3.5%

R21 (K)(Tentative name) MANDAI Nigawa
Store (site)

RetailKansaiMarch 27, 2018

2,280

1.5%

R22 (K)
R23

LAMU Higashiosaka Branch (site)
Vessel Inn Hakata Nakasu

RetailRetailKansai
Other

March 27, 2018
March 29, 2018

1,850
2,760

1.2%
1.8%

Subtotal
Shiodome East Side Building

OfficeOther

February 29, 2008

105,505
19,025

68.5%
12.4%

OfficeKansai

April 10, 2013

10,200

6.6%

ComplexKansaiNovember 1, 2005

29,225
2,980

19.0%
1.9%

(33% of the quasi co-ownership of thetrust beneficiary interests)

Complex

Other

October 2, 2007

9,405

6.1%

LAXA Osaka

ComplexKansaiJanuary 22, 2009

5,122

3.3%

Kita-Aoyama San cho-me Building

Complex

Other

November 12, 2013

1,680

1.1%

O1
O2 (K)

M1 (K)

Hankyu Corporation
Head Office Building
Subtotal
Ueroku F Building
Sphere Tower Tennozu

M2
M3 (K)
M5

Subtotal

19,187

12.5%

Total

153,918

100.0%

Note: The properties owned by Hankyu REIT are assigned codes and numbers classified by facility (type of use) and region.
The alphabets on the left represent the facility (type of use): (“R” is for retail-use facility, “O” is for office-use facility and“M” is for mixed-use (complex) facility). The numbers are assigned to each facility in the chronological order of theacquisition. Moreover, the letter “(K)” in parentheses to the right of the numerals indicates that the property is located in
Kansai Region.

10

Reference Material 3< (Tentative name) MANDAI Nigawa Store (site)

Property Photograph and Surrounding Area>(Note) A building is currently being built by the lessee of the property, MANDAI Co., Ltd., and is scheduled to open
in fall 2018.

＜(Tentative name) MANDAI Nigawa Store (site)

Map of Location >11< LAMU Higashiosaka Branch (site)

Property Photograph>< LAMU Higashiosaka Branch (site)

Map of Location>

12