Ichigo Office(8975)

Strategic Portfolio Restructuring
April 26, 2017

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

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

www.ichigo-office.co.jp/english

Ichigo Preserves andImproves Real Estate© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Ichigo Office REIT Growth Strategy Roadmap
StageⅠ/Ⅱ/Ⅲ/Ⅳ

Stage V

Multi-Asset REIT

Stage VI

Specialized Office REIT

2011/10

2015/10Goals

2016/4

2016/10Lay Foundation for Sustainable
Dividend Growth

Stable Dividend GrowthTargets

Enhance Profitability

Accretive Growth Cycle

Foundation for Growth

Strengthen Forward Growth Capabilities

JPY 1,904

Total Assets

JPY 165.6B (October 31, 2015)

JPY 191.0B

Credit Rating

A- (Stable)

A- (Stable)■ Organic Growth Strategy■ Organic Growth Strategy

Achieve continuous NOI growth and strengthen
Ichigo Office brand・ Raise rents, especially in Central Tokyo where
supply-demand balance is tight・ Increase rental-related income・ Support branding and sense of Ichigo quality atassets, e.g., prominent Ichigo signage
・ Maintain highest standard of quality in servicing
tenants via Ichigo Property Management Standard

Drive growth with strong Ichigo Office brand and
100 asset portfolio
・Increase competitiveness of Ichigo assets via
strong Ichigo brand・Develop original services for Ichigo tenants
・Drive higher rents within and outside of Tokyo・Maximum return on capex

Target: Increase rents by >2.0% p.a.

Action Plan

2017/10Grow Office Portfolio

JPY 1,706 (actual)

Dividend per Share2017/4■ External Growth Strategy
Increase portfolio size and scale and be smart inportfolio restructuring
・Consider acquiring the 13 assets with preferential
acquisition rights
・ Sell assets with limited potential■ Financing Strategy
Improve credit rating & borrowing terms
・Improve credit rating from A- (Stable)
・Improve borrowing terms (cost/tenor/diversity)
・Acquire bank commitment line
・Deploy negative goodwill to increase dividends
・Prepare to enter global REIT indicesJPY 2,000
JPY 230BA (Stable)■ External Growth Strategy
Aim for asset size of JPY 230B
・Broaden acquisition pipeline via diversified
sourcing
・Use Ichigo sponsor support and diversified
funding capability to close quickly under deadline■ Financing StrategyImprove credit rating and diversify funding・Achieve an A (Stable) credit rating
・ Consider issuance of REIT bonds and broadening
lender base・ Use financial strength and commitment line togrow acquisition capacity
・Further improve borrowing terms
・Enter global REIT indices© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Strategic Portfolio Restructuring Objectives
Increase Portfolio Stability & Quality
 Acquire three Tokyo office assets and sell four Tokyo non-office assets (threeserviced apartments, one retail asset), increasing portfolio’s office weighting anddecreasing earnings volatility
 Sell assets with seasonal earnings volatility and expected high maintenance andrepair costs that could negatively impact future earnings

Increase Base EPS and DPS
 Increase annual NOI by JPY 129 million
 Result: Forecast October 2017 Base EPS +5.9% (+JPY 98) vs. April 2017Lower Interest Rate Costs and Lock-In Low Rates Long-Term Repay existing high-interest rate loans using proceeds from the asset sales andfinance acquisitions with new low-cost, long-term loans* Base EPS = EPS excluding capital gains on asset sales© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Increased Office Weighting and Higher NOI

Asset Sale(A)Asset Acquisition(B)

Difference(B)-(A)

Number of Assets

43-1

Acquisition Price

JPY 4.64B

JPY 7.08B+JPY 2.43B

0%

100%

100%

JPY 226M

JPY 355M+JPY 129MNOI Yield

4.9%5.0%+0.1%

Post-Depreciation NOI Yield

4.1%

4.7%

+0.6%

Occupancy

92.4%

93.3%

+0.9%

925+16Office %Annual NOI

Number of Tenants* Please see page 11 for the basis of calculation© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Ongoing Base EPS & DPS Growth(JPY)Dividend Reserve Reversal
Base EPS

Dividend Per Share
1,904
302

1,602

October 2016

Post-Strategic Restructuring
1,910

1,930
164

1,940
155

242

1,668(+66)

April 2017(Forecast)

1,766(+98)

October 2017
(Forecast)

1,785(+19)

April 2018
(Forecast)* Figures in parentheses are the difference versus previous fiscal period© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Acquisition: Win Gotanda Building (O-86)
Asset Overview
Acquisition Price

JPY 3.10B

Appraisal Value

JPY 3.26B

NOI Yield

5.0%

Asset TypeOffice

Location

1 Chome, Nishi Gotanda,
Shinagawa-ku, Tokyo

Leasable Area

3,689.88m2

Structure

SRC B1F/9F

Date Built

October 1989

Occupancy

100.0%

Location and Features
・ A mid-size office building located within a 3-minute walkfrom Gotanda Station on the JR Yamanote Line, the Toei
Subway Asakusa Line, and the Tokyu Ikegami Line.
・ Each floor has a standard floor plate of 149 tsubo (492m2)
and is equipped with individual air conditioning systems
and raised access floors, therefore catering to thedemands of diverse tenants.
・ The basement floor is occupied by a restaurant tenant
and the upper floors are occupied by office tenants,
including telecommunications companies.

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

8Acquisition: Ichigo Hongo Building (O-87)
Asset Overview
Acquisition Price

JPY 2.30B

Appraisal Value

JPY 2.37B

NOI Yield

4.9%

Asset TypeOffice

Location

5 Chome, Hongo, Bunkyo-ku, Tokyo

Leasable Area

2,722.58m2

Structure

SRC/RC B1F/6F

Date Built

April 1992

Occupancy

100.0%

Location and Features
・ A mid-size office building located within a 3-minute walkfrom Kasuga Station on the Toei Mita and Oedo Lines,
and a 6-minute walk from Korakuen Station on theMarunouchi and Namboku Lines.
・ Each floor has a standard floor plate of 160 tsubo(528m2) and is equipped with individual air conditioning
systems and raised access floors, therefore catering to
the demands of diverse tenants.
・ A small supermarket occupies the first floor and theupper floors are occupied by office tenants such as aconstruction material manufacturer, a construction
company, a plate manufacturer, and a publisher.

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

9Acquisition: Oimachi Center Building (O-88)
Asset Overview
Acquisition PriceJPY 1.68B

Appraisal Value

JPY 1.75B

NOI Yield

5.2%

Asset TypeOffice

Location

1 Chome, Oi, Shinagawa-ku, Tokyo

Leasable Area

2,748.73m2

Structure

SRC B1F/7F

Date Built

December 1987

Occupancy

77.8%

Location and Features
・ A mid-size office building located within a 3-minute walkfrom Oimachi Station on the JR Keihin Tohoku Line anda 4-minute walk from Oimachi Station on the Tokyu
Oimachi Line and Rinkai Line.
・ Each floor has a standard floor plate of 180 tsubo(594m2) and is equipped with individual air conditioning
systems and raised access floors, therefore catering tothe demands of diverse tenants.
・ The upper office floors are occupied by tenants such asa facilities construction company, a real estate
management company, and a stationary manufacturer.

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

10NotesPortfolio outcomes on page 6 are based on the following calculations:

Asset Sale Annual NOI = Actual annualized NOI (October 2016 fiscal period)
Asset Sale NOI Yield = Annual NOI divided by the acquisition price of the asset
Asset Sale Post-Depreciation NOI Yield = Annual NOI* minus annual depreciation* divided by the acquisition price*October 2016 fiscal period annualized
Asset Acquisition Annual NOI = IIA’s forecast annualized NOI
Asset Acquisition NOI Yield = Annual NOI divided by acquisition priceAsset Acquisition Post-Depreciation NOI Yield = Annual NOI minus annual depreciation** divided by acquisition price** IIA’s forecast calculated using the straight-line method
Occupancy and Number of Tenants for assets sold as of March 31, 2017
Occupancy and Number of Tenants for assets acquired as of February 28, 2017

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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MEMO

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

12

MEMO

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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MEMO

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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

Ichigo Office REIT IR Desk
TEL：03-3502-4891 FAX：03-3502-4894
IR_Office@ichigo.gr.jp
www.ichigo-office.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© 2017 Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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