November 29, 2019

FOR IMMEDIATE RELEASE

Activia Properties Inc.
21-1, Dogenzaka 1-chome, Shibuya-ku, Tokyo
Kazushi Sato
Executive Director(Code: 3279)
Asset Management Company
TLC REIT Management Inc.
Hiroyuki Tohmata
President & CEO
Inquiries
Kazuyuki Murayama
General Manager of Strategy Department
Activia Management Division(Tel: +81-3-6455-3377)

Notice of Acquisition and Disposition of Assets and Lease Contract with New Tenants
Activia Properties Inc. (“API”) announces that TLC REIT Management Inc.(“TRM”), to which API
entrusts its asset management operations, decided to acquire (the “Acquisition”) and lease an asset (the“Lease”), and dispose of an asset (the “Disposition”) (hereinafter the Acquisition and the Disposition arecollectively referred to as the “Replacement”) today.
Under Article 201-2 of the Act on Investment Trusts and Investment Corporations (“ITA”) and the internal
rules regarding transactions with related parties of TRM, TRM has obtained API’s approval for the abovetransactions at API’s board of directors meeting. Details are as follows.
1.

Overview of the Replacement(1) Overview of the Acquisition① Property name
② Asset to be acquired③ Acquisition price④ Date of purchase
contract⑤ Date of acquisition⑥ Seller of property⑦ Funds for acquisition⑧ Settlement method(Note): Ebisu Prime Square: The 51% co-ownership trust beneficiary interest in a property (Ebisu
Prime Square) as a trust asset (the “Anticipated Asset”): ¥30,700 million(excluding expenses for the acquisition, consumption tax, etc.): November 29, 2019 (plan)::::

January 10, 2020 (plan)
Rouge LLC
Borrowings (plan) (Note)
Total amount to be paid at the time of delivery

Details of the borrowings will be announced upon determination.

1(2) Overview of the Disposition① Property name
② Asset to be disposed of③ Disposition price④ Book value (Note)⑤ Difference between
anticipated disposition
price and book value⑥ Date of sales contract⑦ Date of delivery⑧ Acquirer of property⑨ Purpose of use of funds
raised by the
Disposition⑩ Settlement method(Note)

2.

: A-PLACE Shinbashi Ekimae: The trust beneficiary interest in a property (A-PLACE Shinbashi Ekimae)
as a trust asset (the “Asset to be Disposed of”)
: ¥21,000 million(excluding expenses for the disposition, consumption tax, etc.): ¥20,824 million: ¥175 million

:
:
:
:

November 29, 2019 (plan)
March 19, 2020 (plan)
ASUNARO Limited Liability Company
Funds will be used for repayment of the borrowing related to theAcquisition and for distributions (plan): Total amount to be received at the time of delivery

Anticipated book value as of March 19, 2020.

Reasons of the Acquisition, the Lease and the Disposition
In accordance with the subjects and policies of asset management stipulated in its bylaws, API willconduct the Replacement with aim to reinforce its portfolio. Following the Replacement, the portfolio willconsist of 44 properties with an approximate anticipated total acquisition price of ¥509.2 billion (plan) which
will contribute to increase our unitholder value through DPU and NAV growth.
Furthermore, API judges that the lessees of the Anticipated Asset satisfy the criteria for the selection oftenants stated in the “Report on the Management Structure and System of the Issuer of Real Estate
Investment Trust Units and Related Parties” set by TRM on August 30, 2019.
For the details of the Acquisition, the Lease and the Disposition, please see below.

(1) Acquisition and Lease of Ebisu Prime Square① Location
The property is a 6-minute walk from Ebisu Station on JR lines and the Tokyo Metro lines with a directaccess to central Tokyo such as Shibuya, Shinjuku, Roppongi and other areas. The Ebisu area enjoys good
location where office demand from diverse companies such as technologies firms and foreign capitalcompanies can be anticipated and is well known and popular for commercial and residential purposes as it isadjacent to Daikanyama and Hiroo areas lined with high-end residences and apparel shops.
API holds three office buildings namely TLC Ebisu Building, A-PLACE Ebisu Minami and A-PLACE
Ebisu Higashi, and all of them contribute to increase the profitability of our portfolio with high occupancy
and ability to lead to internal growth.
② Characteristics of the property
The property is a multi-use complex with an aesthetic unity of stone architecture consisting of an officebuilding with a standard floor area of approximately 300 tsubo enabling several layouts, a residential towerof total 62 condominiums of diverse types and a commercial building, extended in approximately 4,000 tsubosite area with a taste of European townscape. The office building, a 22-story skyscraper facing a main street,2

enjoys high visibility and rarity value in the area. The property will belong in the “Tokyo Office Properties”
as over 70% of the contracted rent of the property is derived from office.
API considers that the property will be a key property in the greater Shibuya area (Note), one of API’s
target areas, and contribute to strengthen its portfolio.
(Note) The greater Shibuya area is Shibuya and its surrounding areas with distinctive characteristics connected to each other inmultiple aspects, including Ebisu, Aoyama, Omotesando, Harajuku, Daikanyama, etc., attracting a considerable worldwide
attention as a “mix-city” combining modern entertainment, work, and housing.

(2) Disposition of A-PLACE Shinbashi Ekimae
Since acquisition at IPO in June 2012, API has operated A-PLACE Shinbashi Ekimae, formerly named
Shinbashi Place, as one of stable and profitable properties in API’s portfolio. The whole building had beenleased to a tenant since the commencement of operation by API in June 2012, though it has departed in May
2018. And we succeeded to lease to new tenants all ten floors without down-time, taking advantage of theprime location of property, which is one-minute walk from Shinbashi Station.
Although, the renovation work after the former tenant’s departure included specification change as thebuilding had been designed to the tenant, and following the work, the property has suffered decrease in total
leasable area and profitability.
API deems therefore that it would be reasonable to dispose of the property as replacement to Ebisu Prime
Square with aim to increase distributions per unit through improvement in the profitability of portfolio andto wipe out the unrealized loss on asset.

3.

Overview of the Anticipated Asset and the Asset to be Disposed of(1) Outline of the Anticipated Asset and the scheduled lease
Property nameSpecified asset category
Trustee
Trust establishment date
Trust maturity date
Transportation
Location (address)

Land

Location
Building to land ratio
Plot ratio
Usage restrictions
Land area
OwnershipCompletion date
Structure

Building
Registered usage
Gross floor area
Parking facilities

Ebisu Prime Square
Trust beneficiary interest
Mizuho Trust & Banking Co., Ltd.
March 21, 2001
April 30, 2024
6-minute walk from Ebisu Station on the JR Yamanote Line andSaikyo Line, Shonan-Shinjuku Line and the Tokyo Metro Hibiya Line
① 1-39, Hiroo 1-chome, Shibuya-ku, Tokyo
② 1-40, Hiroo 1-chome, Shibuya-ku, Tokyo
③ 1-7, Hiroo 1-chome, Shibuya-ku, Tokyo
48-2, 48-5, Hiroo 1-chome, Shibuya-ku, Tokyo (Note 1)
70.00% (Note 2)
471.90%Category 2 residential district
12,179.49 m2 (Note 1)
Ownership (51% co-ownership interest)
January 31, 1997 (Note 1)① Steel frame, reinforced concrete, steel-framed reinforced concrete /22 floors above and 3 floor underground② Reinforced concrete / 2 floors above and 2 floors underground③ Steel-framed reinforced concrete, reinforced concrete /13 floors above and 2 floors underground (Note 1)① Office, retail and parking② Retail and parking③ Residence, sport club and parking (Note 1)
67,581.00 m2 (Note 1) (Note 3)
211 vehicles

3

Ownership
Property management company
Master lessee
Acquisition priceAppraisal value(Date of value estimate)Appraisal agency
Earthquake PML
Hypothecation
Lease overview (Note 6)
Total leasable area
Total leased area
Occupancy rate
Number of tenants
Annual rent
Expected NOI
Tenant leasehold andsecurity deposits

Remarks

Ownership (51% co-ownership interest)(Office, retail) Tokyu Community Corp. (plan) (Note 4)(Residence) Tokyu Housing Lease Corporation (Note 4)(Office, retail) Tokyu Community Corp. (pass-through)(plan) (Note 4)(Residence) Tokyu Housing Lease Corporation (pass-through)(plan)(Note 4)¥30,700 million¥31,000 million(October 1, 2019)

JLL Morii Valuation & Advisory K.K.
1.7%

(According to an earthquake PML report of Sompo Risk Management Inc.)

None

18,063.02 m2 (Note 5)
17,578.15 m2 (Note 5)
97.3%
100
¥1,457 million (Note 5)¥1,148 million (Note 5)¥1,095 million (Note 5)
Holders of the co-ownership interests in the property will agree thefollowing: If a holder of the co-ownership interest in the property has
intention to dispose of the interest, the party shall notify in advanceother co-owners of its intention and, upon consent, may sell the interest
to the co-owner with purchase intention.
If there is no mutual consent and the said co-owner agrees that thedisposition is held to a third party, the holder shall notice once again
other co-owners the condition of the disposition. And in the case there
is a co-owner who has intention to acquire the interest under the same
condition, the interest is to be sold to the co-owner.

(Note 1) The data is based on the registry.
(Note 2) The figure includes the margin since the buildings receive the margin due to the fire-resistant buildings on fire
prevention district.
(Note 3) Total gross floor areas of the three buildings.
(Note 4) Tokyu Community Corp. and Tokyu Housing Lease Corporation to which API outsources master lessee and property
management, are related parties of TRM under “Rules Regarding Related-party Transactions”, the internal rules of
TRM. Therefore, in accordance with the Rules Regarding Related-party Transactions, TRM has obtained resolution at
the compliance committee and the investment committee, following deliberation of each committee.
(Note 5) The figures provided reflect our anticipated pro rata share of the 51% co-ownership interest(Note 6) The figures are estimates at the anticipated date of acquisition (January 10, 2020) as of November 29, 2019.

(2) Outline of the Asset to be Disposed of
Property nameSpecified asset category
Trustee
Trust establishment date
Trust maturity date
Transportation
Location (address)
LocationLand
Building to land ratio

A-PLACE Shinbashi Ekimae
Trust beneficiary interest
Mitsubishi UFJ Trust and Banking Corporation
Land: March 30, 2005 / June 29, 2006
Building: May 15, 2008
June 30, 2022
1-minute walk from Shinbashi Station on the JR Tokaido Line,
Yamanote Line, Keihin Tohoku Line and Yokosuka Line, the Tokyo
Metro Ginza Line, the Toei Asakusa Line and the Tokyo Waterfront
New Transit Waterfront Line (Yurikamome)
12-9, Shinbashi 1-chome, Minato-ku, Tokyo
14-1, Shinbashi 1-chome, Minato-ku, Tokyo (Note 1)
100.00% (Note 2)

4

Plot ratio
Usage restrictions
Land area
OwnershipCompletion date
Structure
Building

Registered usage
Gross floor area
Parking facilities
Ownership
Property management company
Master lessee
Disposition priceAppraisal value(Date of value estimate)Appraisal agency
Earthquake PML
Hypothecation
Lease overview (Note 3)
Total leasable area
Total leased area
Occupancy rate
Number of tenants
Annual rent
Expected NOI
Tenant leasehold andsecurity deposits
Remarks

800.00%Commercial district
1,001.39 m2 (Note 1)
Ownership
April 25, 2008 / partial demolition and extension on May 14, 2018
(Note 1)

Steel frame, steel-framed reinforced concrete /10 floors above and1 floor underground (Note 1)
Retail, office and parking (Note 1)
8,541.44 m2 (Note 1)
34 vehicles
Ownership
Tokyu Community Corp.
Tokyu Community Corp. (pass-through)¥21,000 million¥20,200 million(May 31, 2019)
Daiwa Real Estate Appraisal Corp.,
6.8%(According to an earthquake PML report of Sompo Risk Management Inc.)

None

6,484.57 m2
6,484.57 m2
100.0%
6¥781 million¥635 million¥600 million
Not applicable(Note 1) The data is based on the registry.
(Note 2) The figure includes the margin since the building receives the margin due to the fire-resistant building on fire
prevention districts.
(Note 3) As of November 29, 2019.

4．Profile of the seller and acquirer(1) Outline of the seller (Ebisu Prime Square)
Name
Rouge LLC
Address
Nihonbashi 1-chome Building, 4-1, Nihonbashi 1-chome, Chuo-ku,
TokyoManagement
Akira Sugai
Amount of capital¥1 million
Establishment
July 20, 2007
- (Note)Net assets- (Note)Total assets- (Note)Major shareholder
Business description
1. Acquisition, possession and disposal of real estate trust
beneficiary interest
2. Acquisition, possession, disposal, leasing and management ofreal estate
3. Acquisition, possession and disposition of shares and interests ofcorporations of which the purpose is related to each item listed above
4. Any other related businesses to each item listed above

5

Relationships with API and TRM
Rouge LLC is a SPC, in which Tokyu Land Corporation, the 100%
Capital relationshipparent company of TRM, holds anonymous association (tokumei
kumiai) interests.
Personnel relationship None
Business relationship
None
Rouge LLC is not a related party of API but is a related party of TRM
Related party statusunder TRM’s internal policies. Also, Rouge LLC is a related party
defined under the ITA.

(Note) Not disclosed because the seller approval was not obtained.

(2) Outline of the acquirer (A-PLACE Shinbashi Ekimae)
Name
Address
Management
Amount of capital
Establishment
Net assets
Total assets
Major shareholder
Business description

ASUNARO Limited Liability Company
Tokyo Kyodo Accounting Office, 1-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo
Masakazu Hongo¥100 thousand
October 8, 2019
- (Note)- (Note)- (Note)1.
2.

Acquisition, possession, disposal, lease and management of realestateAcquisition, possession and disposal of real estate trust
beneficiary interest
Any other related businesses to each item listed above

3.
Relationships with API and TRM
ASUNARO Limited Liability Company is a SPC, in which Tokyu
Capital relationshipLand Corporation, the 100% parent company of TRM, holds
anonymous association (tokumei kumiai) interests.
Personnel relationship None
Business relationship
None
ASUNARO Limited Liability Company is not a related party of API
Related party statusbut is a related party of TRM under TRM’s internal policies.

(Note) Not disclosed because the acquirer approval was not obtained.

6

5．Status of the sellers
Acquisition of property from related parties, including special purpose companies (subsidiarycompanies) managed by related parties are described below. The following table indicates (1) company
name, (2) relationship with the specially related parties and (3) transaction history, reasons for acquisition.
Property name
(Location)(TO-18)Ebisu Prime
Square(1-7, 1-39, 1-40,
Hiroo 1-chome,
Shibuya-ku,
Tokyo)

Previous owner, etc.
(1), (2), (3)Acquisition (disposition)
priceTiming of acquisition(disposition)(1) Rouge LLC(2) Rouge LLC is a SPC
owned by Tokyu Land
Corporation, the parent
company of TRM, and forwhich TLC CapitalManagement Inc., a related
party of TRM, provides
asset management services(3) Acquired for the
purpose of investment
Omitted as the holding
period was longer than one
year
April 2014

6.

SecondPrevious owner, etc.
(1), (2), (3)Acquisition (disposition)
priceTiming of acquisition(disposition)(1) Godo Kaisha Pionelo(2) Godo Kaisha Pionelo is
a SPC owned by Tokyu
Land Corporation, theparent company of TRM
and provides asset
management services(3) Acquired for the
purpose of investment

Third
Previous owner, etc.
(1), (2), (3)Acquisition (disposition)
priceTiming of acquisition(disposition)
Persons other than speciallyrelated parties

Omitted as the holding
period of the previous
owner, etc. was longer than
one year
December 2013-

Outline of intermediary
Not applicable

7.

Schedule of the Replacement (plan)(1) Schedule of the Acquisition
Determination of acquisition
Conclusion of purchase contract
Payment date
Acquisition dateNovember 29, 2019
November 29, 2019
January 10, 2020
January 10, 2020

(2) Schedule of the Disposition
Determination of disposition
Conclusion of sales contract
Payment reception date
Disposition dateNovember 29, 2019
November 29, 2019
March 19, 2020
March 19, 2020

7-

8．Transaction with related parties(1) Acquisition of asset
The previous owner, etc. of the Anticipated Asset is a subsidiary or similarly related party of Tokyu Land
Corporation, the parent company of TRM. Such party is a related party as provided for in Article 201 of ITA,
Article 123 of the Enforcement Ordinance of ITA and the ”Rules Regarding Related-party Transactions”, theinternal rules of TRM. Therefore, TRM carried out the appropriate procedures as provided for in the rules
concerning transactions with related parties in connection with the acquisition of the Anticipated Property fromthe party, including obtaining API’s approval for the above transaction at API’s board of directors meeting.

(2) Disposition of asset
The acquirer of the Asset to be Disposed of is a SPC which will be partially funded by Tokyu Land Corporation.
Such party is a related party as provided for in Article 201 of ITA, Article 123 of the Enforcement Ordinance of
ITA and the “Rules Regarding Related-party Transactions”, the internal rules of TRM. Therefore, TRM carriedout the appropriate procedures as provided for in the rules concerning transactions with related parties inconnection with the disposition of the Asset to be Disposed of to the party, including obtaining API’s approval
for the above transaction at API’s board of directors meeting.

(3) Conclusion of lease agreement and property management agreement
For the office and retail portion of the Anticipated Property, the trustee and Tokyu Community Corp. will enter
into lease agreement and property management agreement, and for the residence portion, the trustee and Tokyu
Housing Lease Corporation will hold the existing lease agreement and property management agreement.
Tokyu Community Corp. and Tokyu Housing Lease Corporation are wholly owned subsidiaries of Tokyu
Fudosan Holdings Corporation, which is the parent company of Tokyu Land Corporation. The entities fall into
interested party as defined by Article 201 of ITA and Article 123 of Order for Enforcement of ITA as well as“Rules Regarding Related-party Transactions”, the internal rules of TRM. Therefore, TRM has carried out theappropriate procedures as provided for in the rules concerning transactions with related parties in order that thetrustee shall outsource the property management and master lease services to the parties.
< Overview of the outsourcing contractors >(Office, retail)Name
Address
Management
Amount of capital
Established
Business description

Tokyu Community Corp.
10-1, Yoga 4-chome, Setagaya-ku, Tokyo
President, Saiga Katsuhide¥ 1,653 million
April 8, 1970
1． Condominium life support
2． Building management
3． Reform business
4． Environmental service and services to assist elderly
Relationships with API and TRM
Tokyu Community Corp. is a wholly owned subsidiary of Tokyu
Capital relationship
Fudosan Holdings which is the 100% parent company of the Tokyu
Land Corporation, a 100% parent company of TRM.
Certain personnels have been seconded to TRM from Tokyu
Personnel relationshipCommunity Corp.

8

Business relationship

Related party status

The trustee has contracted the building maintenance agreements and thelease agreements and/or the property management agreements with Tokyu
Community Corp. for some properties with the trust beneficiary interests
held by API.
Tokyu Community Corp. is not a related party of API but is a related
party of TRM under TRM’s internal rules. Also, Tokyu Community
Corp. is a related party defined under ITA.

(Residence)
Name
Address
Management
Amount of capital
Established
Business description

Tokyu Housing Lease Corporation
3-1, Nishi Shinjuku 2-chome, Shinjuku-ku, Tokyo
President, Katsushi Miki¥ 100 million
April 1, 2014
1. Property management and tenant leasing
2. Corporate rental housing management
3. Support business related to rental housing
Relationships with API and TRM
Tokyu Housing Lease Corporation is a wholly owned subsidiary of
Capital relationship
Tokyu Fudosan Holdings which is the 100% parent company of the
Tokyu Land Corporation, a 100% parent company of TRM.
Personnel relationship None
Business relationship
None
Tokyu Housing Lease Corporation is not a related party of API but is arelated party of TRM under TRM’s internal rules. Also, Tokyu
Related party status
Housing Lease Corporation is a related party defined under ITA.

9. Item regarding forward commitment contracts, etc.
(1) Anticipated Asset and Asset to be Disposed of under forward commitment contracts, etc. (Note)
Property
No.
TO-18

Property
No.
TO-17<Anticipated Asset>
Property name
Ebisu Prime Square

Date of purchase contract

Scheduled acquisition dateNovember 29, 2019

January 10, 2020

<Asset to be Disposed of>Property nameDate of sales contract

Scheduled disposition date

A-PLACE Shinbashi
EkimaeNovember 29, 2019

March 19, 2020

(Note) A forward commitment contract is defined as “a postdated purchase and sale contract under which settlement and delivery
shall be made at least one month after the conclusion of the contract, or any other contract similar thereto”.

(2) Impact on API’s finance when forward commitment contracts cannot be executed
With respect to the purchase and sale contracts pertaining to the acquisition of the Anticipated Asset andthe disposition of the Asset to be Disposed of, in case there are any violations by API, a seller or an acquirer
concerning the provisions which have a material adverse effect on the achievement of the purpose of thepurchase and sale contract, API, the seller or the acquirer can urge the seller, the acquirer or API, asapplicable, to fulfill the obligation in a fixed period of time. When the seller, the acquirer or API does notcorrect the violations within that time frame, API, the seller or the acquirer may cancel the contract andmake a claim to the seller, the acquirer or API for the penalty equivalent to up to 5% of the sale or purchaseprice.

9However, the purchase contract pertaining to the acquisition of the Anticipated Asset into which API has
entered contain certain clauses stating that API, as the acquirer, will be able to acquire the Anticipated
Asset by paying the total acquisition price, only when the financing to fund for the anticipated acquisition
has been completed. If such financing is not completed as of March 31, 2020, the contract will expire,
which would render the above penalty clause invalid. Thus, API does not anticipate that the failure to
execute of the contract due to a lack of financing will have a material negative impact on its financial
condition. Also, API does not anticipate that the conditions stipulated in the contract pertaining to the
Disposition will have a material impact on its financial condition as it is a seller for the disposition of theAsset to be Disposed of and has no funding risk that the acquirer assumes for fulfillment of payment
obligation.

10.

OutlookWith regard to the impact of the Replacement on the management performance of API for the fiscal period
ending May 31, 2020 (The 17th fiscal period, from December 1, 2019 to May 31, 2020) and the fiscal period
ending November 30, 2020 (The 18th fiscal period, from June 1, 2020 to November 30, 2020), please refer to“Notice Concerning Revision to Forecast of Management Performance for the Fiscal Period Ending May 31, 2020and Forecast of Management Performance for the Fiscal Period Ending November 30, 2020” announced as oftoday.

11.

Outline of appraisal reports(1) The Anticipated Asset
Property nameAppraisal value
Appraisal agency
Date of value estimate

Ebisu Prime Square¥31,000 million
JLL Morii Valuation & Advisory K.K.
October 1, 2019

Capitalization
Value by the direct capitalization
methodOperating revenue
Potential gross income

Amount (Note 1)(million yen)
31,00031,4001,708
1,785

Loss (e.g. vacancy)

77

Operating expense
Maintenance expenses
Property managementfee
Utility expenses
Repair expenses

577
152

Remarks
Estimated by the DCF method and the direct
capitalization method.

Estimated based on receivable rent, etc. for midto-long term.
Estimated based on operational level for mid-tolong term.
Assessed based on the past records.

(Note 2)239
29

Leasing expenses

18

Taxes and public dues

120

10

Estimated based on the past records.
Estimated based on the annual average of repair
expenses on the Engineering Report (ER).
Recorded the amount equivalent to one monthrent revenue.
Estimated based on the past records.

Insurance
Other expenses
NOI (Net Operating Income)Investment income from
temporary deposits
Capital expenditure

2
13
1,130
9

NCF (Net Cash Flow)
Capitalization rate

1,068
3.4%

Value by the DCF method
Discount rate

30,5003.2%

Terminal capitalization rate
Value by the cost method
Land ratio
Building ratio

71

3.6%
31,000
91.9%
8.1%

Other facts which the appraisal agency have taken
into account for the appraisal report

Estimated with replacement cost of building.
Estimated based on the past records.
Estimated with investment yield as 1%.
Estimated based on the annual average of capital
expenditure on the Engineering Report (ER).
Estimated with reference to discount rate withprofitability and the fluctuation risk of principal.
Estimated with reference to a comparison withtransaction cases of similar real estates, yield/
interest (rate) of financial asset and the result ofinvestor’s analysis.
Estimated with reference to capitalization ratewith uncertainty of the future, deterioration of thebuilding, etc.

Nothing in particular(Note 1) Based on our anticipated pro rata share of the co-ownership interest (51%).
(Note 2) By disclosing maintenance expenses and property management fee separately, the other businesses of the entrusted companies
with operations for both building management and property management could be influenced. As a result, it could impede API’s
efficient outsourcing and harm the value for API’s investors. Thus, the above shows the sum of maintenance expenses and property
management fee.

(2) The Asset to be Disposed of
Property nameAppraisal value
Appraisal agency
Date of value estimate

A-PLACE Shinbashi Ekimae¥20,200 million
Daiwa Real Estate Appraisal Co., Ltd.
May 31, 2019

Capitalization
Value by the direct capitalization
methodOperating revenue
Potential gross income

Amount(million yen)
20,20020,700923
961

Loss (e.g. vacancy)

37

Operating expense
Maintenance expenses
Property managementfee
Utility expenses
Repair expenses

172
39

Remarks
Estimated by the DCF method and the direct
capitalization method.

Estimated based on receivable rent, etc. for midto-long term.
Estimated based on operational level for mid-tolong term.
Estimated based on cases of similar real estates.

(Note)

35
6

11

Estimated based on the past records.
Estimated based on the annual average of repair
expenses on the Engineering Report (ER).

Leasing expenses

6

Taxes and public dues
Insurance
Other expenses
NOI (Net Operating Income)Investment income from
temporary deposits
Capital expenditure

76
0
8
751
6

NCF (Net Cash Flow)
Capitalization rate

746
3.6%

Value by the DCF method
Discount rate

20,0003.3%

Terminal capitalization rate
Value by the cost method
Land ratio
Building ratio

10

3.7%
17,600
91.5%
8.5%

Other facts which the appraisal agency have taken
into account for the appraisal report

Recorded the amount equivalent to one monthrent revenue.
Estimated based on the past records.
Estimated with replacement cost of building.
Budgeted as operating reserve, etc.
Estimated with investment yield as 1.0%.
Estimated based on the annual average of capital
expenditure on the Engineering Report (ER).
Estimated based on transaction cases of similar
real estates, with reference to discount rate withprofitability and the fluctuation risk of principal.
Estimated with reference to a comparison withdiscount rate in transaction cases of similar realestates, yield/ interest (rate) of financial asset, etc.
Estimated based on capitalization rate withreference to marketability when the holding
period by API terminates.

Nothing in particular(Note) By disclosing maintenance expenses and property management fee separately, the other businesses of the entrusted companies with
operations for both building management and property management could be influenced. As a result, it could impede API’s efficient
outsourcing and harm the value for API’s investors. Thus, the above shows the sum of maintenance expenses and property
management fee.

12

<Exhibits>
Exhibit 1 Outline of building condition assessment report
Exhibit 2 Photographs of the anticipated asset, a map of the area
Exhibit 3 Portfolio after the Replacement*Distribution of this material: This material is distributed to the Kabuto Club; the press club for the Ministry ofLand, Infrastructure, Transport and Tourism; and the press club for construction trade newspapers at the
Ministry of Land, Infrastructure, Transport and Tourism.
*Website of API: https://www.activia-reit.co.jp/en/

13

Exhibit 1 Outline of a building condition assessment report
Assessment company
Date of estimate
Short-term renovation expense (thousand yen)
(Note 1) (Note 2)Long-term renovation expense (thousand yen)

HI International Consultant Co., LTD
September 6, 2019¥44,217 thousand¥1,197,873 thousand(Note 1) (Note 3)(Note 1) The short-term renovation expense and long-term renovation expense are based on the building condition assessment report andour anticipated pro rata share of the co-ownership interest (51%).
(Note 2) The short-term renovation expense is the total expense for renovations needed within 1 year of the date of the building conditionassessment report.
(Note 3) The long-term renovation expense is the total expense for renovations needed within 12 years of the date of the building
condition assessment report.

14

Exhibit 2 Photographs of the anticipated asset, a map of the area

15

Category

Exhibit 3 Portfolio after the Replacement
Location(Anticipated)
Acquisition dateUR-1

Tokyu Plaza Omotesando
Harajuku

Shibuya, Tokyo

June 13, 2012

UR-2

Tokyu Plaza Akasaka

Chiyoda, Tokyo

June 13, 2012

UR-3

Q plaza EBISU
Kyoto Karasuma Parking
Building
Kobe Kyu Kyoryuchi 25Bankan

Shibuya, Tokyo

June 13, 2012

8,430

1.7

Kyoto, Kyoto

June 13, 2012

8,860

1.7

Kobe, Hyogo

December 19, 2013

21,330

4.2

A-FLAG SAPPORO

Sapporo, Hokkaido

December 19, 2013

4,410

0.9

UR-9

A-FLAG SHIBUYA

Shibuya, Tokyo

December 19, 2013

6,370

1.3

UR-10

Q plaza SHINSAIBASHI

Osaka, Osaka

December 16, 2015

13,3502.6

UR-11

A-FLAG KOTTO DORI

Minato, Tokyo

December 20, 2016

4,370

0.9

UR-12

A-FLAG BIJUTSUKAN DORI

Minato, Tokyo

December 2, 2016

4,700

0.9

A-FLAG DAIKANYAMA WEST

Shibuya, Tokyo

January 6, 2017

2,280

0.4

UR-14

A-FLAG KITA SHINSAIBASHI

Osaka, Osaka

December 1, 2017

0.9

UR-15

DECKS Tokyo Beach

Minato, Tokyo

January 5, 2018

4,725
12,740UR-16

Tokyu Plaza Ginza (Land)

Chiyoda, Tokyo

January 10, 2019

UR-17

Q plaza HARAJUKUShibuya, Tokyo

January 10, 2019

TO-1

TLC Ebisu Building

Subtotal
Shibuya, Tokyo

June 13, 2012

198,715
7,400

39.0
1.5

TO-2

A-PLACE Ebisu Minami

Shibuya, Tokyo

June 13, 2012

9,640

1.9

A-PLACE Yoyogi

Shibuya, Tokyo

June 13, 2012

4,070

0.8

A-PLACE Aoyama

Minato, Tokyo

June 13, 2012

8,790

1.7

TO-5

Luogo Shiodome

Minato, Tokyo

June 13, 2012

0.9

TO-6

TAMACHI SQUARE (Land)

Minato, Tokyo

June 13, 2012

4,540
2,338

TO-7

A-PLACE Ikebukuro

Toshima, Tokyo

June 13, 2012

3,990

0.8

A-PLACE Shinbashi

Minato, Tokyo

April 19, 2013

5,650

1.1

TO-9

A-PLACE Gotanda

Shinagawa, Tokyo

January 10, 2014

5,730

1.1

TO-10

A-PLACE Shinagawa

Minato, Tokyo

January 10, 2014

3,800

0.7

TO-11

OSAKI WIZTOWER

Shinagawa, Tokyo

June 24, 2014

10,6902.1

TO-12

Shiodome Building (Note 4)

Minato, Tokyo

TO-13

A-PLACE Ebisu Higashi

Shibuya, Tokyo

July 29, 2015

7,072

1.4

A-PLACE Shibuya Konnoh

Shibuya, Tokyo

October 1, 2015

4,810

0.9

TO-15

A-PLACE Gotanda Ekimae

Shinagawa, Tokyo

July 1, 2016

7,280

1.4

TO-16

A-PLACE Shinagawa Higashi

Minato, Tokyo

March 16, 2017

3.7

TO-18

Ebisu Prime Square

Shibuya, Tokyo

January 10, 2020(plan)

18,80030,700UR-7
Urban Retail Properties

Investment
ratio

Property name

UR-5
UR-8

UR-13

TO-3
TO-4

Tokyo Office Properties(Anticipated)
Acquisition price(Millions of yen)

Property
No.

TO-8

TO-14

Subtotal
Subtotal of UR and TO

December 2, 2016

45,000(Note 2)

11,450(Note 2)

(Note 2)37,500(Note 2)

13,200(Note 2)

(Note 3)71,600(Note 2)

(Note 2)206,900
405,615

16(%)(Note 1)

8.8
2.2

2.5
7.4
2.6

0.5

14.1

6.0
40.6
79.7

Activia Account Properties

AA-1

Amagasaki Q’s MALL (Land)

Amagasaki, Hyogo

June 13, 2012

12,0002.4

AA-2

icot Nakamozu

Sakai, Osaka

June 13, 2012

8,500

1.7

AA-4

icot Mizonokuchi

Kawasaki, Kanagawa

June 13, 2012

2,710

0.5

AA-5

icot Tama Center

Tama, Tokyo

June 13, 2012

2,840

0.5

A-PLACE Kanayama
Osaka Nakanoshima Building

Nagoya, Aichi

June 13, 2012

6,980

1.4

Osaka, Osaka

December 19, 2014

11,1002.2

icot Omori

Ota, Tokyo

December 19, 2013

5,790

1.1

Market Square Sagamihara

Sagamihara, Kanagawa

January 9, 2015

4,820

0.9

AA-10

Umeda Gate Tower

Osaka, Osaka

September 21, 2016

19,000

3.7

AA-11

A-PLACE Bashamichi

Yokohama, Kanagawa

October 6, 2016

3,930

0.8

AA-12

Commercial Mall Hakata

Fukuoka, Fukuoka

January 5, 2018

6,100

1.2

EDGE Shinsaibashi

Osaka, Osaka

AA-6
AA-7
AA-8
AA-9

(Note 5)

3.9
January 10, 201919,800Subtotal
103,570
20.3
Total
509,185100.0(Note 1) “Investment ratio” is ratio of (anticipated) acquisition price for each property to total acquisition price rounded to the first decimal
place.
(Note 2) (Anticipated) Acquisition prices of “Tokyu Plaza Omotesando Harajuku”, “Tokyu Plaza Akasaka”, “DECKS Tokyo Beach”,“Tokyu Plaza Ginza (Land)”, “Q plaza HARAJUKU”, “Shiodome Building” and “Ebisu Prime Building” are described based on
their pro rata share (75%, 50%, 49%, 30%, 60%, 35% and 51%, respectively).
(Note 3) Acquisition price of “TAMACHI SQUARE (Land)” is based on the acquisition price of the land as of acquisition date (June 13,2012).
AA-13(Note 4) The acquisition date of “Shiodome Building” is the date of the third acquisition. The first acquisition date was January 9, 2015,
and the second acquisition date was December 16, 2016. The acquisition price is total amount of the first, the second and the third
acquisition prices (¥30,300 million, ¥20,400 million and ¥20,900 million) and the investment ratio reflects total acquisition price.
(Note 5) The Acquisition date of “Osaka Nakanoshima Building” is the date of the second acquisition. The first acquisition date was
January 25, 2013. The acquisition price of “Osaka Nakanoshima Building” is total amount of the first and the second acquisition
prices (¥5,250 million and ¥5,850 million) and the investment ratio reflects the total acquisition price.

17