<Provisional translation>
March 25, 2019

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

Notice Concerning Acquisition of Domestic Real Estate
Hankyu Hanshin REIT, Inc. (hereafter “Hankyu Hanshin REIT”) hereby notifies that Hankyu Hanshin REIT AssetManagement, Inc., the asset management company that Hankyu Hanshin REIT has selected to manage its
assets (hereafter the “Asset Management Company”), today decided to make the following acquisition.

Details1.

Overview of Acquisition
FUNDES JIMBOCHO
1) Specified asset type:

Right of ownership

2) Property name:

FUNDES JIMBOCHO

3) Planned acquisition price:

2,830,000,000 yen (excluding acquisition-related expenses, property tax,
city planning tax and consumption tax, among others)4) Appraisal value:

2,830,000,000 yen (Date of appraisal: March 1, 2019)5) Planned acquisition date:

March 29, 2019 (planned)

6) Seller:

Domestic corporation (Please refer to “5. Overview of Seller” below) (Note)

7) Acquisition fund:New borrowings as indicated in “Notice Concerning Debt Financing” dated today(Note) The name of the seller is not disclosed as the consent of the seller has not been obtained.

2.

Reason for Acquisition
Hankyu Hanshin REIT aims to establish a well-balanced portfolio and attain steady growth through theacquisition of the property located in the city center of the Tokyo metropolitan area, based on the target andpolicy of asset management stipulated in the Articles of Incorporation. At the same time, Hankyu Hanshin
REIT seeks to further improve distribution by utilizing the borrowing capability enhanced through the public
offering and such to conduct agile property acquisition.
FUNDES JIMBOCHO (hereafter the “Property”) is a property secured utilizing the Asset Management
Company’s own network. As such, Hankyu Hanshin REIT will strive to improve portfolio quality throughacquisition of prime properties by expanding the Asset Management Company’s network while continuing
to press ahead with acquisition utilizing the comprehensive strength of the sponsor group in real estate

1business.
Hankyu Hanshin REIT evaluated the following points upon deciding the acquisition of the Property.
The Property is a relatively new retail facility (opened in November 2016) mainly housing restaurants,
located a one-minute walk from Jimbocho Station on the Tokyo Metro Hanzomon-Line, the Toei Shinjuku
Line and Toei Mita Line. It faces Yasukuni-dori Street, enjoying excellent visibility. The area surrounding
Jimbocho Station has a concentration of universities such as Meiji University and Nihon University andprep schools as well as of office buildings, and thus has many business/school commuters. The dailyridership at the station is quite high (376,000 people in FY2017), and the district also enjoys a great bustle
with a broad range of visitors attracted by the commercial area with a second-hand bookstore quarter,
sporting goods store quarter, musical instrument store quarter, etc. in the vicinity. For these reasons,Hankyu Hanshin REIT believes that the Property is likely to attract a sufficient number of customers anddemonstrate strong potential in the future as well. Hankyu Hanshin REIT will work to enhance yield byutilizing the sponsor group’s abundant track record and expertise in operational management of retailfacilities going forward.
The average yield after depreciation of the portfolio following the acquisition of the Property is expected tobecome 3.7%.
[Status of Portfolio]
End of27th fiscal
period(endedNovember
2018)

Propertytransferred

LaLaport
KOSHIEN(site)

Propertyacquired
GRAND
FRONT
OSAKA
(equivalent of4.9% coownership)(Note 1)

Properties to beacquired(Tentativename)
Valor
Takatsuki
Store(site)

The
Property

1 property

2 properties

1 property

1property(Planned) date oftransfer/acquisition

December
3, 2018

December
5, 2018

March 29,2019

March 29,2019(Planned)transfer/acquisition price

7,960
million yen

15,778million yen

2,258
million yen

2,830
millionyen

Number of properties

Asset scale(Average) NOI yield (Note27
properties

After theacquisition ofproperties tobe acquired(Note 2)30 properties

167,435
million yen

153,918
million yen3)

4.9%

4.0%

4.4%

4.3%

3.4%4.9%(Average) yield after
depreciation

3.8%

4.0%

3.8%

4.3%

2.9%

3.7%

(Note 3)(Note 1) GRAND FRONT OSAKA (equivalent of 4.9% co-ownership) indicates the 2 properties, which are GRAND FRONTOSAKA (Umekita Plaza and South Building) (equivalent of 4.9% co-ownership) and GRAND FRONT OSAKA (NorthBuilding) (equivalent of 4.9% co-ownership).
(Note 2) The figures after the acquisition of properties to be acquired are figures considering only the transfer and (planned)
acquisition described above after the end of the 27th fiscal period and may differ from actual figures.
(Note 3) (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 throughout a year of each property and (b) depreciation
by total acquisition (planned) price. (Average) yield after depreciation is calculated by dividing the sum total ofdifference between the real estate lease operation income and real estate lease operation expenses throughout a2

year of each property by total acquisition (planned) price. (Average) NOI yield and (Average) yield after
depreciation are calculated based on the following figures.
・End of 27th fiscal period and LaLaport KOSHIEN (site): Actual figures for the 27th fiscal period.** For METS OZONE, MANDAI Nigawa Store (site), LAMU Higashiosaka Branch (site) and Vessel Inn
Hakata Nakasu, figures are calculated using the figures stated in the appraisal reports.
・GRAND FRONT OSAKA (equivalent of 4.9% co-ownership) and the Property: The first fiscal year’s operating
revenues and operating costs using the DCF method as indicated in the appraisal reports are used.
・(Tentative name) Valor Takatsuki Store (site): The second year’s operating revenues and operating costs using
the DCF method as indicated in the appraisal report, assuming 100% rent collection are used.
・After the acquisition of properties to be acquired: Figures obtained by subtracting/adding figures of the results ofthe property transferred and in the appraisal reports of properties (to be) acquired from/to the actual
figures for the 27th fiscal period.

3.

Details of the Assets Planned to be Acquired
Property name

FUNDES JIMBOCHOSpecified asset type

Right of ownership

Planned acquisition price

2,830,000,000 yen
2,830,000,000 yen (Date of appraisal: March 1, 2019)(Appraisal organization: The Tanizawa Sogo Appraisal Co., Ltd.)

Appraisal value
Location Lot Number
Land

Building
coverage

1-8-9, 1-8-8, 1-8-10, Kanda-Jimbocho, Chiyoda-ku, Tokyo

Floor area ratio

700%

Zone use

Commercial district

Site area
Form ofownership

Building

80%

built

with flat roof / 11 floors

Use

Retail Storeownership

Construction company

Rinkai Nissan Construction Co., Ltd.

1,339.42 m2
Right of ownership

Bureau Veritas Japan Co., Ltd.

Property manager

Not disclosed (Note)

Earthquake PML

5.3% (Engineering and Risk Services Corporation and OYO RMS(evaluators)Corporation)

Collateral

None

Other matters to note

None(Note) Undisclosed as consent of the seller has not been obtained.

4.

FloorsForm ofRinkai Nissan Construction Co., Ltd.

organization

Steel-frame structurearea

Right of ownership

October 2016

Structure/

Total floor

171.78 m2

Design company
Building recognition

Month/ Year

Overview of Leasing
Total number of tenants

7 (Note 1)

Principal tenant

Not disclosed (Note 2)

Annual rentNot disclosed (Note 2)

Leasable area

1,168.43 m2

Leased area

1,168.43 m2

Occupancy rate

100.0%3

Security deposits

Not disclosed (Note 2)(Note 1) Total number of tenants as of today is indicated.
(Note 2) Undisclosed as consent of the seller has not been obtained.

5.

Overview of Seller
The name, etc. is not disclosed as consent has not been obtained from the seller, which is a domestic
corporation. Please note that there are no capital, personnel or business relationships to be specially noted
between Hankyu Hanshin 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 Property is not an acquisition from parties with special
interests of Hankyu Hanshin REIT or the Asset Management Company.

7.

Transactions with Interested Parties, etc.
Not applicable.

8. Overview of Intermediary
The name, etc. is not disclosed as consent has not been obtained from the intermediary, which is adomestic corporation. Please note that there are no capital, personnel or business relationships to be
specially noted between Hankyu Hanshin REIT or the Asset Management Company and the intermediary.
In addition, the intermediary does not fall under the definition of “related party.”
9. Settlement Method, etc.
Hankyu Hanshin REIT plans to make a full payment to the seller for the acquisition, etc. on the planned
acquisition date.
10．Acquisition Schedule
March 25, 2019

Resolution of acquisition of the Property at the Asset Management Company’s
Board of Directors Meeting

March 29, 2019Conclusion of agreement, payment and acquisition (planned)11．Future Outlook
Since the impact of the acquisition of the Property on the conditions surrounding the management ofHankyu Hanshin REIT’s assets for the fiscal period ending May 2019 (28th fiscal period: December 1, 2018
to May 31, 2019) and the fiscal period ending November 2019 (29th fiscal period: June 1, 2019 toNovember 30, 2019) announced in the “Hankyu Hanshin REIT, Incorporated Financial Results for the 27th
Fiscal Period From June 1, 2018 to November 30, 2018” dated January 24, 2019 is expected to be minimal,
there is no revision to the forecasts.
•

Hankyu REIT website: https://www.hankyuhanshinreit.co.jp/eng/4

<Attached Materials>
・Reference Material 1

Overview of Appraisal Report

・Reference Material 2

Table of Real Estate Portfolio after Acquisition of the Property

・Reference Material 3

Property Photograph and Map of Surrounding Area

5

Reference Material 1<Overview of Appraisal Report>
Property name

FUNDES JIMBOCHO

Appraisal value
Appraisal organization
Date of appraisal

2,830,000,000 yen
The Tanizawa Sogo Appraisal Co., Ltd.
March 1, 2019

Item
Value indicated by the income approach

Value using the direct capitalization method

Value

Basis for valuation

2,830,000,000 yen

With the DCF method as the standard, assessment
through verification using the direct capitalization
method.

2,920,000,000 yen(1) Operating revenues (a + b − c)a. Income from rental fees, etc.
b. Other income－－Undisclosed (Note)c. Loss from non-occupancy, etc.
(2) Operating costs (a+b+c+d+e+f+g+h)－a. Maintenance/Administrative fees, etc.
b. Utilities
c. Repairs
d. Property management fee

Undisclosed (Note)e. Fees for seeking tenants, etc.
f. Public charges and taxes
g. Casualty insurance premiumsh. Other expenses(3) Net operating income (NOI = (1) − (2))

96,328,621 yen(4) Operating profit on deposit and security

917,749 yen

Assessment assuming
management yield.

(5) Capital expenditures

900,000 yen

Assessment based on engineering report, similarcases, etc.

(6) Net cash flow (NCF = (3) + (4) − (5))

96,346,370 yen(7) Capitalization rate
Value using the discounted cash flow (DCF) method

3.3%
2,790,000,000 yen

Discount rate (1st and 2nd year)

3.3%

Discount rate (3rd year and after)

3.4%

Terminal capitalization rate

3.5%

Value indicated by the cost approach－
1.0%

investment－
Assessment referencing investment yields of similar
properties, etc.
－
Assessment taking into account the regional
characteristics, property-specific risks of the target
real estate.
Assessment factoring in future uncertainties, etc.,
into the capitalization rate.

2,650,000,000 yen－

Land ratio

81.9%

－

Building ratio

18.1%

－

Special items toconsider at thetime of making
adjustments toprovisional
calculations anddeciding theappraisal valueaThe target real estate is located close to Jimbocho Station on the Tokyo Metro Hanzomon Line, Toei Subway Mita Lineand Toei Subway Shinjuku Line, and also enjoys excellent visibility. Since there is a concentration of office buildings aswell as several universities in the vicinity, demand for retail facilities centering on restaurants is stable. As to thebuilding, since it is relatively new and houses tenants with different business types, a certain degree of customer flow isseen. Therefore, although a harsh competitive climate exists for each shop, the property has differentiated itself fromother competitive facilities when evaluated as a building in its entirety.
The appraisal value was decided through the value indicated by the income approach, based on the “rental building andits lot” category, setting the value indicated by the income approach assessed using both the direct capitalization
method and DCF method as the standard and verified from the value indicated by the cost approach.

The appraisal value of real estate is no more than an indication of the opinion on 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.
Note: The Asset Management Company decided not to disclose these items as no consent has been obtained from the seller for thedisclosure of rents, etc. For the reason that the assessment is based on actual results for reference, there is a possibility that
disclosure of these items will affect its competitiveness and damage the interests of unitholders.

6Reference Material 2< Table of Real Estate Portfolio After the Acquisition of the Property>
Property
Code(Note)

Property NameHEP FiveFacility(Type ofUse)

RegionAcquisition(Planned) DateAcquisition(Planned)
Price(millions ofyen)

Investment
Ratio

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

RetailKansai

February 1, 2005

6,468

3.9%

R2 (K)
R3 (K)
R4 (K)
R5 (K)

Kitano Hankyu Building
Dew Hankyu Yamada
Takatsuki-Josai Shopping Center
Nitori Ibaraki-Kita Store (site)
Kohnan Hiroshima Nakano-Higashi
Store (site)
Hotel Gracery Tamachi
HANKYU NISHINOMIYA GARDENSRetailRetailRetailRetailKansaiKansaiKansaiKansai
Other

Retail

Other

7,740
6,930
8,600
1,318
2,170
54,160

4.6%
4.1%
5.1%
0.8%

RetailFebruary 1, 2005
February 1, 2005
November 15, 2005
March 29, 2006
October 2, 2006
April 9, 2007
December 25, 2008

RetailKansai

April 16, 2013

18,300

10.9%

RetailKansai

June 27, 2013

8,100

4.8%

RetailKansai

June 27, 2013

1,870

1.1%

RetailKansai

June 4, 2014

3,100

1.9%

RetailRetailRetailRetailRetailRetailRetailRetailRetailKansaiKansaiKansaiKansaiKansai
Other
KansaiKansai
Other

June 4, 2014
June 4, 2014
June 24, 2014
July 1, 2016
November 25, 2016
February 15, 2018
March 27, 2018
March 27, 2018
March 29, 2018

2,770
1,421
4,182
1,631
7,1005,400
2,280
1,850
2,760

1.7%
0.8%
2.5%
1.0%
4.2%
3.2%
1.4%
1.1%
1.6%

RetailKansaiMarch 29, 2019

2,258

1.3%

RetailOther

March 29, 2019

OfficeOther

February 29, 2008

2,830
103,243
19,025

1.7%
61.7%
11.4%

OfficeKansai

April 10, 2013

10,200

6.1%

ComplexKansaiNovember 1, 2005

29,225
2,980

17.5%
1.8%

Complex

Other

October 2, 2007

9,405

5.6%

R6
R8
R11 (K)R12 (K)R13 (K)R14 (K)R15 (K)R16 (K)R17 (K)R18 (K)R19 (K)
R20
R21 (K)R22 (K)
R23
R24 (K)
R25
O1O2 (K)M1 (K)
M2(28% of the quasi co-ownership of thetrust beneficiary interests)

AEON MALL SAKAIKITAHANADA(site)
MANDAI Toyonaka Honan Store(site)
DAILY QANAT Izumiya Horikawa
Marutamachi Store (site)
kotocross Hankyu Kawaramachi
LIFE Shimoyamate Store (site)
MANDAI Gojo Nishikoji Store (site)
KOHYO Onohara StoreOASIS Town Itami Konoike (site)
METS OZONEMANDAI Nigawa Store (site)
LAMU Higashiosaka Branch (site)
Vessel Inn Hakata Nakasu(Tentative name) Valor TakatsukiStore (site)
FUNDES JIMBOCHO
Subtotal
Shiodome East Side Building
Hankyu Corporation
Head Office Building
Subtotal
Ueroku F Building
Sphere Tower Tennozu(33% of the quasi co-ownership of thetrust beneficiary interests)

M3 (K)
M5

1.3%
2.5%

LAXA Osaka
ComplexKansaiJanuary 22, 2009
5,122
3.1%
Kita-Aoyama San cho-me Building
Complex
Other
November 12, 2013
1,680
1.0%
GRAND FRONT OSAKA
ComplexKansaiM6 (K)(Umekita Plaza and South Building)
December 5, 2018
9,212
5.5%
(equivalent of 4.9% co-ownership)
GRAND FRONT OSAKA
M7 (K)(North Building)ComplexKansai
December 5, 2018
6,566
3.9%
(equivalent of 4.9% co-ownership)
Subtotal
34,965
20.9%
Total
167,435
100.0%
Note: “Property code” indicates the codes and numbers assigned to the properties owned by Hankyu Hanshin REIT throughclassification by facility (type of use) and region. The alphabets on the left represent the facility (type of use): (“R” forretail-use facility, “O” for office-use facility and “M” for mixed-use (complex) facility). The numbers are assigned toeach facility in the chronological order of the acquisition. Also, the letter “(K)” in parentheses to the right of thenumerals indicates that the property is located in Kansai Region.

7

Reference Material 3<Property Photograph><Map of Surrounding Area>

8