Building a richer future together[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.

May 9, 2016
REIT Issuer
Ichigo Office REIT Investment Corporation (8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
Asset Management Company
Ichigo Real Estate Investment Advisors Co., Ltd.
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Hiroto Tajitsu, Head of Administration & Statutory Executive Officer
Tel: 03-3502-4891

Acquisition of Eight Office Assets
Ichigo Real Estate Investment Advisors Co., Ltd. (IRE), the asset management company of
Ichigo Office REIT Investment Corporation (“Ichigo Office REIT”), has decided today toacquire eight assets (total acquisition price 20,900,000,000 yen).
I. Acquisition Summary
Total appraisal value: 21,400,000,000 yen, total acquisition price: 20,900,000,000 yen
Asset Name1
Asset Type
Date Built
Legal Form of
Asset
Appraisal Value2
Acquisition Price3
SellerContract Date
Closing Date(expected)
Financing
MethodSettlement
MethodIchigoIkenohata Building
Office O-77
June 1991
Trust beneficiaryinterest in real estate(juekiken)
5,220,000,000 yen
5,130,000,000 yen
Ikenohata Holdings
GK
May 9, 2016

Ichigo Ikebukuro
East Building
Office O-78
June 1993
Trust beneficiaryinterest in real estate(juekiken)
3,110,000,000 yen
3,010,000,000 yen
Ikenohata Holdings
GK
May 9, 2016

Ichigo Motoazabu
Building
Office O-79
July 1992
Trust beneficiaryinterest in real estate(juekiken)
1,940,000,000 yen
1,890,000,000 yen
Motoazabu
Holdings GK
May 9, 2016

Ichigo Otsuka
Building
Office O-80
March 1989
Trust beneficiaryinterest in real estate(juekiken)
2,820,000,000 yen
2,740,000,000 yen
Motoazabu
Holdings GK
May 9, 2016

May 24, 2016

May 24, 2016

May 24, 2016

May 24, 2016

New share issuance, borrowing, and cash-on-hand4
Lump-sum payment

1Asset Name1
Asset Type
Date Built
Legal Form of
Asset
Appraisal Value2
Acquisition Price3
SellerContract Date
Closing Date(expected)
Financing
MethodSettlement
MethodIchigo Nagoya
Building
Office O-81
February 1982
Trust beneficiaryinterest in real estate(juekiken)
3,500,000,000 yen
3,420,000,000 yen
Motoazabu
Holdings GK
May 9, 2016

Ichigo Fushimi
Building
Office O-82
September 1984
Trust beneficiaryinterest in real estate(juekiken)
2,360,000,000 yen
2,340,000,000 yen
Ikenohata
Holdings GK
May 9, 2016

Ichigo Nishiki
Building
Office O-83
January 1991
Trust beneficiaryinterest in real estate(juekiken)
1,360,000,000 yen
1,330,000,000 yen
Motoazabu
Holdings GK
May 9, 2016

Ichigo Minami
Morimachi Building
Office O-84
February 1994
Trust beneficiaryinterest in real estate(juekiken)
1,090,000,000 yen
1,040,000,000 yen
Ikenohata Holdings
GK
May 9, 2016

May 24, 2016

May 24, 2016

May 24, 2016

May 24, 2016

New share issuance, borrowing, and cash-on-hand4
Lump-sum payment

The current building names “MG Ikenohata Building,” “Higashi Ikebukuro Q Building,”“Vanguard Motoazabu Building,” “Otsuka Saint Core Building,” “EME Nagoya Building,”“HF Fushimi Building,” “Dai 41 Ocean Building,” and “Sun Center Building” will be changed
to “Ichigo Ikenohata Building,” “Ichigo Ikebukuro East Building,” “Ichigo Motoazabu
Building,” “Ichigo Otsuka Building,” “Ichigo Nagoya Building,” “Ichigo Fushimi Building,”“Ichigo Nishiki Building,” and “Ichigo Minami Morimachi Building,” respectively.
2
Appraisal value is as of March 1, 2016.
3
Acquisition price excludes incidental expenses such as property, city planning, andconsumption taxes.
4
Financing details will be announced when determined.
1

2

II. Acquisition Rationale
Ichigo Office REIT continues to execute on its strategy to “Increase portfolio size and scale andbe smart in portfolio restructuring” as described in Stage V (“Lay Foundation for Sustainable
Dividend Growth”) of its Growth Strategy Roadmap.1
Consistent with this growth strategy, Ichigo Office REIT has been conducting a strategic
portfolio restructuring, selling four assets located in lower-quality locations during the April
2016 fiscal period and completing today the acquisition of five office assets as announced in its
April 8, 2016 release “Acquisition of Five Office Assets.”2,3
These transactions are expected to drive further growth in earnings and dividends. The eightassets acquired are located in Central Tokyo, where rents have been rising, and Nagoya andOsaka, where economic growth is expected to continue. The expected post-depreciation NOI
yield of the acquired assets is 4.7%, and the average occupancy is 97.7%.4,5
Today’s acquisition is the result of exercising the preferential negotiation rights that Ichigo
Office REIT obtained when it acquired TK (tokumei kumiai) trust beneficiary interests in realestate for 13 assets owned by Motoazabu Holdings GK and Ikenohata Holdings GK on July 29,
2015.6
When deciding whether to exercise the preferential negotiation rights, Ichigo Office REIT took
into consideration current appraisal values, acquisition costs and timing, and the acquisition’s
earning impact to determine whether the acquisition price was attractive.
For details, please refer to “Portfolio Reference Information: Ichigo Office REIT Growth
Strategy Roadmap” at the end of this release.
2
For details, please refer to the January 28, 2016 release “Sale of Portfolio Asset (Akita Sanno
21 Building),” the March 4, 2016 release “Sale of Portfolio Assets (Ichigo Meieki Building,
Ichigo Yokohama Nishiguchi Building),” and the March 16, 2016 release “Sale of Portfolio
Asset (Ichigo Saga Building).”3
For details, please refer to today’s release “Notice of Completion of Asset Acquisitions (Five
Office Assets).”
4
The average post-depreciation NOI Yield is calculated as the Net Operating Income (NOI)
minus depreciation divided by the total acquisition price of the eight assets.
5
The average occupancy is as of February 29, 2016.
6
For details, please refer to the July 28, 2015 release “Real Estate Acquisition.”
13

III. Tenant Selection
Tenants of today’s acquired assets, including sub-tenants for assets under a master lease, meet
Ichigo Office REIT’s selection criteria as stated below.
a. Potential tenants are screened, using external databases as appropriate, based on the criteria
in the following table. They are initially screened for credit strength, followed by anevaluation that takes into consideration the rent, lease term, deposit amount, tenant business
type, synergies with existing tenants (if any), and the potential tenant’s space and layout
requirements.
Tenant Type
Corporate

Individual

Review Criteria
i. Industry, industry experience, earnings (soundness of management), etc.
ii. Tenancy conditions (purpose, contract type, contract term, price, deposits, sizeof leased area, renovation needs, etc.)
iii. Existence of guarantor and the classification of the guarantor
i. Workplace, years of employment at current workplace.
ii. Annual income (percentage of total rent versus annual income)iii. Tenancy conditions (purpose, contract type, contract term, price, size ofleased area, number of occupants, etc.)
iv. Existence of guarantor and the type of the guarantor

b. Ichigo Office REIT conducts regular interviews to understand the needs of existing and new
tenants to support and maintain long-term relationships.

IV. Asset Details
The eight assets are well-located with high occupancy (currently 97.7%). Ichigo Office REIT
intends to employ its deep understanding of the mid-size office building market to further
increase asset value and NOI. Further details of each asset are below.

4(1) Ichigo Ikenohata Building(i) Location
This building is located in the Ikenohata area of southwestern Taito Ward, boastingeasy access to Chiyoda Ward, one of the main business centers in Tokyo, and to
Bunkyo Ward which has an abundance of educational and cultural facilities.
The building is also walking distance to Ueno Station on the JR Line, one of the
major stations in Tokyo, drawing additional demand from companies who value thataccess.
(ii) Features
The building is a mid-size office building on Shinobazu Dori, a 3-minute walk from
Yushima Station on the Tokyo Metro Chiyoda Line and 7-minute walk from Ueno
Hirokoji Station on the Tokyo Metro Ginza Line.
The standard floor plate is a little over 200 tsubo (660 m2). The building is highly
competitive in the leasing market thanks to its 2.5 meter high ceilings, individual air
conditioning units, and raised access flooring. Tenants including subsidiaries ofmajor companies, a telecommunications company, a government-affiliated company,
and a medical corporation currently occupy the building.
(iii) Property Photos and Location

5

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

Trustee

Sumitomo Mitsui Trust Bank, Limited

Period of Trust Contract

October 31, 1989 - July 31, 2025 (Expected)

Location

1-2-18 Ikenohata, Taito-ku, Tokyo

Land

Building

Property Right

FreeholdSize

1,120.22 m2

ZoningCommercial

Coverage Ratio/Floor
Area Ratio

80%/600%

Property Right

Freehold

ZoningOffice, Training Area

Structure

SRC B1F/8F

Total Floor Area

7,774.41 m2

Construction Date

June 27, 1991

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Value

5,220,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

5,440,000,000 yen

Architect1

Kume Kenchiku Co. Ltd.

Builder1

Kajima Corporation Tokyo Office

Structural Strength Assessor1
1

Kume Kenchiku Co. Ltd.

Inspection Agency

City of Tokyo

PML (Assessor)

4.29% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

6

Monthly Rental Income

21,249 thousand yen

Deposit126,202 thousand yen

Leasable Space

5,504.02 m2

Leased Space

5,504.02 m2

Occupancy

100.0%

Property Management Company

Shimizu Comprehensive Development Co., Ltd. (Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type
Assumed NOI (NOI yield)
Depreciation Rate4

Pass-through (Expected)
3

222 million yen (4.3%)
0.5%

6

Special Items
Part of the doorpost of a security door, some concrete earth-retaining tiles, and the concrete foundation encroach upon thesouthern neighbor. A memorandum of understanding exists which agrees to rectify the situation when these encroachingitems are modified in the future.
1

This trust beneficiary interest in real estate (juekiken) consists of two interests owned by Sumitomo Mitsui Trust
Bank, Limited, and Ichigo Office REIT is acquiring both interests. There is an agreement between the trustees andthe beneficiaries of both interests to operate and transfer the assets as a single building.
2
The names of the architect, builder, structural strength assessor, and inspection agency are those of when thebuilding was built.
3
Assumed NOI is the assumed annual net operating income excluding any special factors from the year ofacquisition, and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI
yield is calculated by dividing Assumed NOI by the Acquisition Price. The above is an expected NOI and not aforecast for the October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in
the appraisal report’s direct capitalization valuation method divided by the Acquisition Price is 5.1%.
4
Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the
Acquisition Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April
2017 fiscal periods.

7

Appraisal Overview
Name

Ichigo Ikenohata Building

Appraisal Value

5,220,000,000 yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Date

March 1, 2016
AmountAppraisal Value
Value by Direct Capitalization
MethodIncomeNote

5,220,000,000 yen

Valuation determined via both a direct capitalization
valuation and DCF valuation

5,440,000,000 yen
344,500,992 yen

Maximum Obtainable
Rental Income

363,481,344 yen

Based on rental income, common area service income,parking lot income, and other income

Vacancy Loss

18,980,352 yen

Based on mid- to long-term vacancy rate

Expenses

80,945,142 yen

Administrative andMaintenance Expenses

16,974,336 yen

Based on similar assets and past actual amounts

Utility Expenses

19,748,352 yen

Based on similar assets and past actual amounts

Repair Expenses

11,200,000 yen

Based on the average of the past 12 years of engineering
reports

PM Fee4,630,705 yen

Based on contract rate and similar assets

Leasing BrokerageFees2,525,378 yen

Based on the standard turnover rate with competition, pastactual amounts, and similar assets into accountTaxes

25,014,900 yen

Based on FY2015 actual amounts

Insurance Premiums

506,970 yen

Based on the standard of similar assets and past actual
amounts

Other Expenses

344,501 yen

Consumable goods, etc.

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

263,555,850 yen
2,786,696 yen

Based on 2.0% investment yield

26,880,000 yen

Based on the average of the past 12 years of engineering
reports

Net Profit

239,462,546 yen

Cap Rate

4.4%

Value via DCF Method

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual
characteristics, property right, etc.

5,130,000,000 yen

Discount Rate

4.5%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics
taken into account

Terminal Cap Rate

4.6%

Based upon risk-adjusted NOI

Value via Cost Approach

4,990,000,000 yen

Land

86.0%

Building

14.0%
Notes

None

8

(2) Ichigo Ikebukuro East Building(i) Location
The Higashi Ikebukuro area refers to the east side of Ikebukuro Station, a major
station for multiple train lines in Tokyo, including the JR Yamanote Line, JR Saikyo
Line, Tokyo Metro Marunouchi Line, Fukutoshin Line, Yurakucho Line, Seibu
Ikebukuro Line, and the Tobu Tojo Line.
Convenient access to the Metropolitan Expressway also supports demand from officetenants.
(ii) Features
This building is a 9-minute walk from the Higashi Ikebukuro Station on the Tokyo
Metro Yurakucho Line and the Otsuka Station on the JR Yamanote Line. It is also a
12-minute walk from Ikebukuro Station on the JR Yamanote Line.
Each floor is sub-dividable with a standard floor plate of 140 tsubo (460 m2) and a
2.6 meter high ceiling. The specifications of the building compare favorably withother buildings in the area due to such offerings as individual air conditioning units
and raising access flooring.
The first floor tenant is a supermarket. Consulting firms and telecommunications
company tenants occupy the upper floors.
(iii) Property Photos and Location

9

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

TrusteeMizuho Trust & Banking Co., Ltd.

Period of Trust Contract

May 18, 2007 – July 31, 2025 (Expected)

Location

2-23-2 Higashi Ikebukuro, Toshima-ku, Tokyo

Land

Building

Property Right

FreeholdSize

744.66 m2

ZoningCommercial/ Category I residential

Coverage Ratio/Floor
Area Ratio

80%/600%, 60%/400%

Property Right

Freehold

ZoningOffice, Parking

Structure

SRC/RC 8F

Total Floor Area

3,837.35 m2

Construction Date

June 8, 1993

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Value

3,110,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

3,210,000,000 yen

Architect1

Daisue Construction Co., Ltd. First-Class Registered Architects Office

Builder

1

Daisue Construction Co., Ltd.

Structural Strength Assessor1
1

Daisue Construction Co., Ltd. First-Class Registered Architects OfficeInspection Agency

Toshima Ward

PML (Assessor)

6.50% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

4Monthly Rental Income

13,124 thousand yen

Deposit

112,820 thousand yen

Leasable Space

3,118.69 m2

Leased Space

3,118.69 m2

Occupancy

100%

Property Management Company

Shimizu Comprehensive Development Co., Ltd.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type
Assumed NOI (NOI yield)
Depreciation Rate

3

Pass-through (Expected)
2

136 million yen (4.5%)
0.5%
Special Items

None

10

1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when thebuilding was built.
2
Assumed NOI is the assumed annual net operating income excluding any special factors from the year ofacquisition, and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI
yield is calculated by dividing Assumed NOI by the Acquisition Price. The above is an expected NOI and not aforecast for the October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in
the appraisal report’s direct capitalization valuation method divided by the Acquisition Price is 5.0%.
3Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the
Acquisition Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April
2017 fiscal periods.

11

Appraisal Overview
Name

Ichigo Ikebukuro East Building

Appraisal Value

3,110,000,000 yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Date

March 1, 2016
Amount

Note
Valuation determined via both a direct capitalization

Appraisal Value
Value by Direct Capitalization
MethodIncome3,110,000,000 yen

valuation and DCF valuation

3,210,000,000 yen
199,193,527 yen

Maximum Obtainable
Rental Income

211,891,081 yen

Based on rental income, common area service income,parking lot income, and other income

Vacancy Loss

12,697,554 yen

Based on mid- to long-term vacancy rate

Expenses

49,545,717 yen

Administrative andMaintenance Expenses

10,291,743 yen

Based on similar assets and past actual amounts

Utility Expenses

19,573,024 yen

Based on similar assets and past actual amounts

Repair Expenses

4,440,000 yen

Based on engineering reports and similar assets

PM Fee2,123,646 yen

Based on contract rate and similar assets

Leasing BrokerageFees

1,232,810 yen

Based on the standard turnover rate with competition, pastactual amounts, and similar assets into accountTaxes

11,434,900 yen

Based on FY2015 actual amounts

Insurance Premiums

250,400 yen

Based on the standard of similar assets and past actual
amounts

Other Expenses

199,194 yen

Consumable goods, etc.

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

149,647,810 yen
2,720,259 yen

Based on 2.0% investment yield

11,100,000 yen

Based on engineering reports and similar assets

Net Profit

141,268,069 yen

Cap Rate

4.4%

Value via DCF Method

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual
characteristics, property right, etc.

3,070,000,000 yen

Discount Rate

4.5%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics
taken into account

Terminal Cap Rate

4.6%

Based upon risk-adjusted NOI

Value via Cost Approach

3,050,000,000 yen

Land

85.7%

Building

14.3%
Notes

None

12

(3) Ichigo Motoazabu Building(i) Location
The building is located in the Azabu area of western Minato Ward. It is a high-end
residential area with large houses and luxury apartments. Many embassies andambassadors’ residences are located in the area, creating a lively and international
atmosphere.
The area attracts international companies, as well as design offices, media companies,
and IT firms. Companies that value robust disaster prevention measures also seek
offices in the area.
(ii) Features
This mid-size office building is a 9-minute walk from Hiroo Station on the Tokyo
Metro Hibiya Line, and is located within walking distance of the
Roppongi/Azabujuban area.
The standard floor area is 170 tsubo (560 m2), with a 2.7 meter high ceiling. The
exterior wall has an exposed concrete finish. The building is currently occupied by IT,
design, and bridal industry tenants.
(iii) Property Photos and Location

13

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

TrusteeMizuho Trust & Banking Co., Ltd.

Period of Trust Contract

August 31, 2004 - July 31, 2025 (Expected)

Location

3-4-26 Motoazabu, Minato-ku, Tokyo

Land

Building

Property Right

FreeholdSize

1,022.12 m2

ZoningCategory I Mid/High-Rise Residential

Coverage Ratio/Floor
Area Ratio

60%/300%

Property Right

Freehold

ZoningOfficeStructure

RC B1F/2F

Total Floor Area

1,503.03 m2

Construction Date

July 1, 1992

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Value

1,940,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

2,010,000,000 yen

Architect1

I.M.A. Architects & Associates

Builder

1

Komatsu Kensetsu Kogyo Corporation

Structural Strength Assessor

1

I.M.A. Architects & Associates

Inspection Agency1

Minato Ward

PML (Assessor)

8.02% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

3

Monthly Rental Income

7,544 thousand yen

Deposit78,279 thousand yen

Leasable Space

1,329.96 m2

Leased Space

1,329.96 m2

Occupancy

100%

Property Management Company

Ken Corporation Ltd.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type

Pass-through (Expected)

Assumed NOI (NOI Yield)2

79 million yen (4.2%)

Depreciation Rate

3

0.2%

14

Special Items
1.

2.

2

A portion of land (105m ) on the property’s eastern border is designated as a road pursuant to Article 42 Paragraph 1
Item 5 of the Building Standards Act. A memorandum of understanding exists with the eastern neighbor regarding
this portion of land.
The land was rezoned after the building was built and therefore the building does not meet existing zoning
regulations.

1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when thebuilding was built.
2
Assumed NOI is the assumed annual net operating income excluding any special factors from the year ofacquisition, and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI
yield is calculated by dividing Assumed NOI by the Acquisition Price. The above is an expected NOI and not aforecast for the October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in
the appraisal report’s direct capitalization valuation method divided by the Acquisition Price is 4.3%.
3
Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the
Acquisition Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April
2017 fiscal periods.

15

Appraisal Overview
Name

Ichigo Motoazabu Building

Appraisal Value

1,940,000,000 yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Date

March 1, 2016

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
IncomeVacancy Loss
Expenses

AmountNote

1,940,000,000 yen

Valuation determined via both a direct capitalization valuation
and DCF valuation

2,010,000,000 yen
107,654,018 yen
113,446,335 yen
5,792,317 yen

Based on rental income, common area service income, parking
lot income, and other income
Based on mid- to long-term vacancy rate

27,138,208 yen

Administrative andMaintenanceExpenses

3,622,811 yen

Based on similar assets and past actual amounts

Utility Expenses

6,607,241 yen

Based on similar assets and past actual amounts

Repair Expenses

2,580,000 yen

Based on the average of the past 12 years of engineering reports

PM Fees

2,363,551 yen

Based actual contract amount and similar assets

Leasing Brokerage
Fees
Taxes

700,091 yen
11,054,200 yen

Based on the expected turnover rate and tenant acquisition costs
for similar assets
Based on FY2015 actual amounts

Insurance Premiums

102,660 yen

Based on the standard of similar assets and past actual amounts

Other Expenses

107,654 yen

Consumable goods and other expenses

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

80,515,810 yen
1,603,407 yen

Based on 2.0% investment yield.

5,805,000 yen

Based on the average of the past 12 years of engineering reports

Net Profit

76,314,217 yen

Cap Rate

3.8%

Value via DCF Method

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual characteristics,
market trends, etc.

1,910,000,000 yen

Discount Rate

3.9%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics taken
into account

Terminal Cap Rate

4.0%

Based upon risk-adjusted NOI

Value via Cost Approach

1,860,000,000 yen

Land

95.1%

Property

4.9%
Notes

None

16

(4) Ichigo Otsuka Building(i) Location
The Minami Otsuka Area is at the southeastern edge of Toshima Ward. There is acommercial district around Otsuka Station where the station building, hotels, andshopping streets are located. Many office buildings are found in the area due to its
proximity to the station.
The area has convenient access to train stations on the JR Yamanote Line, Tokyo
Metro Marunouchi Line, and the Toden Arakawa Line. Otsuka Station is one stopaway from Ikebukuro Station, one of the major terminal stations in the city, providing
easy access to Central Tokyo.
(ii) Features
The building is a mid-size office building, a 4-minute walk from Otsuka Station on
the JR Yamanote Line and a 6-minute walk from Shin-Otsuka Station on the Tokyo
Metro Marunouchi Line.
The 180 tsubo (590 m2) standard floor with 2.6 meter high ceilings is relatively large
compared to other office buildings in the vicinity. The size and easy-to-use standard
shape of the floor plate is expected to help support stable rental income.
(iii) Property Photos and Location

17

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

TrusteeMizuho Trust & Banking Co., Ltd.

Period of Trust Contract

July 30, 2015 - July 31, 2025 (Expected)

Location

3-46-3 Minami Otsuka, Toshima-ku, Tokyo

Land

Building

Property Right

FreeholdSize

976.82 m2

ZoningCommercial

Coverage Ratio/Floor
Area Ratio

80%/500%

Property Right

Freehold

ZoningOfficeStructure

SRC 8F

Total Floor Area

4,573.06 m2

Construction Date

March 10, 1989

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Value

2,820,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

2,930,000,000 yen

Architect1

Akasaka Architectural Office

Builder

1

Fujita Engineering Company Ltd. Tokyo Branch

Structural Strength Assessor1
1

Akasaka Architectural OfficeInspection Agency

City of Tokyo

PML (Assessor)

4.00% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as February 29, 2016)

Number of Tenants

7

Monthly Rental Income

12,288 thousand yen

Deposit106,505 thousand yen

Leasable Space

3,688.77 m2

Leased Space

3,688.77 m2

Occupancy

100%

Property Management Company

Shimizu Comprehensive Development Co., Ltd.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type
Assumed NOI (NOI Yield)
Depreciation Rate

3

Pass-through (Expected)
2

122 million yen (4.5%)
0.8%
Special Items

1. A part of a metal frame encroaches on the northwestern neighbor. A memorandum of understanding exists for theowner to remove the frame and to bear all related expense and risk of accidents.
2. A construction inspection report indicates that there is a need to replace the emergency power supply. The seller has

18

agreed to rectify the situation at the seller’s cost.
3. A lease termination notification has been received from one of the tenants (leased area: 135.60 m2) on October 29,
2015 to terminate the contract as of April 30, 2016. The occupancy of the building is expected to be 96.3% after thetermination.4
1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when thebuilding was built.
2
Assumed NOI is the assumed annual net operating income excluding any special factors from the year ofacquisition, and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI
yield is calculated by dividing Assumed NOI by the Acquisition Price. The above is an expected NOI and not aforecast for the October 2016 and April 2017 fiscal periods. The NOI calculated using the NOI employed in theappraisal report’s direct capitalization valuation method divided by the Acquisition Price is 5.3%.
3
Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the
Acquisition Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April
2017 fiscal periods.
4
A new lease contract has been signed with an existing tenant (leased area: 126.53 m2) for additional areas(including the area to be vacated due to the above termination notification). The new contract is for a total leased
area of 426.14 m2 commencing on May 1, 2016. The total leasable area of the building is currently in the process of
being changed to 3,679.70 m2. The occupancy of the building will be 100% with the commencement of this newlease contract.

19

Appraisal Overview
Name

Ichigo Otsuka Building

Appraisal Value

2,820,000,000 yen

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.

Appraisal Date

March 1, 2016

Appraisal Value
Value by Direct Capitalization
MethodIncomeAmountNote

2,820,000,000 yen

Valuation determined via both a direct capitalization valuation
and DCF valuation

2,930,000,000 yen
194,167,083 yen

Maximum Obtainable
Income207,582,193 yen

Based on rental income, common area service income, parking
lot income, and other income

Vacancy Loss

13,415,110 yen

Based on mid- to long-term vacancy rate

Expenses

50,083,096 yen

Administrative andMaintenanceExpenses

8,301,403 yen

Based on similar assets and past actual amounts

Utility Expenses

16,293,712 yen

Based on similar assets and past actual amounts

Repair Expenses

6,660,000 yen

Based on engineering reports and similar assets

PM Fees

3,345,305 yen

Based on similar assets and past actual amounts

Leasing BrokerageFees1,255,159 yen

Based on the expected turnover rate and tenant acquisition costs
for similar assets

Taxes

13,709,400 yen

Based on FY2015 actual amounts

Insurance Premiums

323,950 yen

Based on the standard of similar assets and past actual amounts

Other Expenses

194,167 yen

Consumable goods and other expenses

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

144,083,987 yen
2,766,107 yen

Based on 2.0% investment yield.

14,800,000 yen

Based on engineering reports and similar assets

Net Profit

132,050,094 yen

Cap Rate

4.5%

Value via DCF Method

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual characteristics,
market trends, etc.

2,770,000,000 yen

Discount Rate

4.6%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics taken
into account

Terminal Cap Rate

4.7%

Based upon risk-adjusted NOI

Value via Cost Approach

2,760,000,000 yen

Land

83.0%

Property

17.0%
Notes

None

20

(5) Ichigo Nagoya Building(i) Location
The building is located near the center of Meieki area, which is centered on Nagoya
Station, a major station with easy access to multiple train lines including the Nagoya
Municipal Subway Higashiyama Line, Sakura-Dori Line, JR Lines, Tokaido
Shinkansen Line, Meitetsu Lines, and Nagoya Rinkai Rapid Transit Aonami Line.
From Nagoya Station, passengers can easily travel not only to neighboring areas but
also cities across Japan.
Just east of Nagoya Station is a business district with a concentration of officebuildings housing major corporations including banks and securities companies.
Following a series of large-size office buildings being redeveloped around Nagoya
Station, small- and mid-size buildings are now also being redeveloped, generating
demand for space from tenants who must relocate.
(ii) Features
This mid-size office building is a 7-minute walk from Nagoya Station on the Nagoya
Municipal Subway Higashiyama Line and Sakura-Dori Line, and has easy access to avariety of public transport. The building is located on a wide avenue called Hirokoji
Dori in a commercial area that enjoys consistent demand from office and retailtenants.
(iii) Property Photos and Location

21

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

Trustee

Sumitomo Mitsui Trust Bank, Limited

Period of Trust Contract

May 22, 2002 – July 31, 2025 (Expected)

Location

4-24-8 Meieki, Nakamura-ku, Nagoya, Aichi Prefecture

Land

Building

Property Right

Freehold, Leasehold

Size

1,001.17 m2

ZoningCommercial

Coverage Ratio/Floor
Area Ratio

80%/800%

Property Right

Freehold

Zoning(1)Office, Retail, Warehouse (2)Parking

Structure(1)SRC B2F/8F (2)Steel 1F

Total Floor Area

(1)7,375.12 m2 (2)43.00 m2

Construction Date

February 23, 1982

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Value

3,500,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

3,590,000,000 yen

Architect

1

Kume Kenchiku Co., Ltd.

Builder1
Structural Strength Assessor

Kajima Corporation Nagoya Branch
1

Kume Kenchiku Co., Ltd.

Inspection Agency1

City of Nagoya

PML (Assessor)

9.61% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

33

Monthly Rental Income

19,478 thousand yen

Deposit200,553 thousand yen

Leasable Space

4,930.30 m2

Leased Space

4,675.52 m2

Occupancy

94.8 %

Property Management Company

THE DAI-ICHI BUILDING CO., LTD.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type

Pass-through (Expected)

Assumed NOI (NOI Yield)2

171 million yen (5.0%)

Depreciation Rate3

0.5%

22

Special Items
2

1
A part of the property (132.45 m ) is leasehold. The size of the land indicated above includes this leaseholdproperty.
2. A part of the concrete block wall encroaches the western neighbor. A memorandum of understanding exists which
agrees to rectify the situation when the wall is modified in the future.
3. Part of a stone curb encroaches the eastern neighbor. A memorandum of understanding exists which agrees to rectify
the situation when the stone curb is modified in the future.
4. No official document exists to state the boundary between the leasehold land and the western neighbor, the easternneighbor, or the northern neighbor.
5. A fire inspection report indicates that a guide light need be repaired. The seller has agreed to rectify the situation at
the seller’s expense.
1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when thebuilding was built.
2
Assumed NOI is the assumed annual net operating income excluding any special factors from the year ofacquisition, and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI
yield is calculated by dividing Assumed NOI by the Acquisition Price. The above is an expected NOI and not aforecast for the October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in
the appraisal report’s direct capitalization valuation method divided by the Acquisition Price is 5.5%.
3
Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the
Acquisition Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April
2017 fiscal periods.
4
A new lease contract has been signed on March 31, 2016 with a new tenant commencing on April 1, 2016 for aleased area of 54.10 m2. The occupancy of the building is expected to be 95.9% with the commencement of thisnew contract.

23

Appraisal Overview
Name

Ichigo Nagoya Building

Appraisal Value

3,500,000,000 yen

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Date

March 1, 2016
AmountAppraisal Value
Value by Direct Capitalization
MethodIncomeNote
Valuation determined via both a direct capitalization
valuation and DCF valuation

3,500,000,000 yen
3,590,000,000 yen
290,901,981 yen

Maximum Obtainable
Rental Income

306,672,282 yen

Based on rental income, common area service income,parking lot income, and other income

Vacancy Loss

15,770,301 yen

Based on mid- to long-term vacancy rate

Expenses

103,137,325 yen

Administrative andMaintenance Expenses

15,645,400 yen

Based on similar assets and past actual amounts

Utility Expenses

34,051,692 yen

Based on similar assets and past actual amounts

Repair Expenses

2,269,750 yen

Based on the average of the past 12 years of engineering
reports

PM Fee5,345,424 yen

Based on similar assets

Leasing BrokerageFees

1,988,614 yen

Based on the expected turnover rate, past actual amount, andtenant acquisition costs for similar assets

Taxes

28,051,173 yen

Based on FY2015 actual amounts

Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

15,319,922 yen

Consumable goods, etc.

187,764,656 yen
3,786,153 yen

Based on 2.0% investment yield

19,166,250 yen

Based on the average of the past 12 years of engineering
reports

Net Profit

172,384,559 yen

Cap Rate

4.8%

Value via DCF Method

Based on the standard of similar assets and past actual
amounts

465,350 yen

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual
characteristics, property right, etc.

3,460,000,000 yen

Discount Rate

4.6%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics
taken into account

Terminal Cap Rate

5.0%

Based upon risk-adjusted NOI

Value via Cost Approach

4,520,000,000 yen

1

92.0%

Building

8.0%

Land

Notes
1

Includes leasehold property (8.9%)24

(6) Ichigo Fushimi Building(i) Location
The Fushimi area is a major business district with many offices and financial
institutions that is located between Nagoya’s two major commercial districts, Meieki
and Sakae.
The area attracts major companies headquartered in Tokyo or Osaka seeking regional
branch offices as well as companies based in the greater Nagoya region seeking
headquarter offices.
(ii) Features

This mid-size office building is a 4-minute walk from Fushimi Station on the Nagoya
Municipal Subway Higashiyama Line and Tsurumai Line.
The standard floor is 130 tsubo (420 m2) offering a relatively large space for theFushimi area. The main entrance and the southern side of the building (facing themain road) have been recently improved.
A restaurant occupies the basement floor, while tenants from the bridal industry andsales offices for interior goods and electrical equipment occupy the upper floors.

(iii) Property Photos and Location

25

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

TrusteeMizuho Trust Bank, Limited

Period of Trust Contract

July 30, 2015 - July 31, 2025(Expected)

Location

1-18-24 Nishiki, Naka-ku, Nagoya, Aichi Prefecture

Land

Building

Property Right

FreeholdSize

770.43 m2

ZoningCommercial

Coverage Ratio/Floor
Area Ratio

80%/800%

Property Right

Freehold

ZoningOffice, Retail

Structure

SRC B1F/9F

Total Floor Area

6,290.43 m2

Construction Date

September 21, 1984

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Value

2,360,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

2,430,000,000 yen

Architect1

Kajima Corporation Nagoya Branch 1st Architect Office

Builder1

Kajima Corporation Nagoya Branch

Structural Strength Assessor1
1

Kajima Corporation Nagoya Branch 1st Architect OfficeInspection Agency

City of Nagoya

PML (Assessor)

10.21% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

38

Monthly Rental Income

11,978 thousand yen

Deposit107,720 thousand yen

Leasable Space

4,152.22 m2

Leased Space

3,853.90 m2

Occupancy

92.8%

Property Management Company

THE DAI-ICHI BUILDING CO., LTD.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type
Assumed NOI (NOI Yield)
Depreciation Rate3

Pass-through (Expected)
2

116 million yen (5.0%)
0.7%

26

Special Items
1. The concrete block foundation and U-shaped drain encroaches the northeastern neighbor. A memorandum of
understanding exists which agrees to rectify the situation when this is to be removed, moved, or modified in the
future.
2. The rainwater inlet encroaches the southwestern neighbor. A memorandum of understanding exists which agrees torectify the situation when this is to be removed, moved, or modified in the future.
3. Lease termination notifications have been received from five tenants (total leased area: 614.47 m2)
Leased area: 39.60 m2, contract termination as of March 21, 2016, notification received on February 25, 2016
Leased area: 39.60 m2, contract termination as of March 31, 2016, notification received on September 24, 2015
Leased area: 147.69 m2, contract termination as of April 30, 2016, notification received on October 30, 2015
Leased area: 160.70 m2 & 147.69 m2, contract termination as of June 24, 2016, notification received on December 24,
2015
Leased area: 79.19 m2, contract termination as of August 31, 2016, notification received on February 25, 2016
The occupancy is expected to be 78.0% after the terminations.4
1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when thebuilding was built.
2
Assumed NOI is the assumed annual net operating income excluding any special factors from the year ofacquisition, and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI
yield is calculated by dividing Assumed NOI by the Acquisition Price. The above is an expected NOI and not aforecast for the October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in
the direct capitalization valuation method from the appraisal report divided by the Acquisition Price is 5.7%.
3
Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the
Acquisition Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April
2017 fiscal periods.
4
A new lease contract has been signed on February 29, 2016 with a new tenant commencing on April 1, 2016 for aleased area of 160.70 m2. Another new lease contract has been signed on March 22, 2016 with a new tenantcommencing on that same date for a leased area of 39.60 m2. Another new lease contract has been signed on April
11, 2016 with a new tenant commencing on that same date for a leased area of 39.60 m2. The occupancy of thebuilding is expected to be 83.8% with the commencement of these new contracts.

27

Appraisal Overview
Name

Ichigo Fushimi Building

Appraisal Value

2,360,000,000 yen

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Date

March 1, 2016
AmountAppraisal Value
Value by Direct Capitalization
MethodIncomeNote
Valuation determined via both a direct capitalization
valuation and DCF valuation

2,360,000,000 yen
2,430,000,000 yen
189,280,774 yen

Maximum Obtainable
Rental Income

201,726,772 yen

Based on mid- to long- term rental income, common area
service income, parking lot income, and other income

Vacancy Loss

12,445,998 yen

Based on mid- to long-term vacancy rate

Expenses

56,420,018 yen

Administrative andMaintenance Expenses

11,304,600 yen

Based on similar assets and past actual amounts

Utility Expenses

19,594,692 yen

Based on similar assets and past actual amounts

Repair Expenses

2,151,667 yen

Based on the average of the past 12 years of engineering
reports

PM Fee3,411,443 yen

Based on similar assets

Leasing BrokerageFees

1,223,986 yen

Based on the expected turnover rate and tenant acquisition
costs for similar assets

Taxes

17,037,195 yen

Based on FY2015 actual amounts

Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

371,470 yen
1,324,965 yen

Consumable goods, etc.

132,860,756 yen
2,390,641 yen

Based on 2.0% investment yield

13,558,083 yen

Based on the average of the past 12 years of engineering
reports

Net Profit

121,693,314 yen

Cap Rate

5.0%

Value via DCF Method

Based on the estimate and standard of similar assets

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual
characteristics, property right, etc.

2,330,000,000 yen

Discount Rate

4.8%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics
taken into account

Terminal Cap Rate

5.2%

Based upon risk-adjusted NOI

Value via Cost Approach

2,820,000,000 yen

Land

87.0%

Building

13.0%
Notes

None

28

(7) Ichigo Nishiki Building(i) Location
The Fushimi area is a major business district with many offices and financial
institutions that is located between Nagoya’s two major commercial districts, Meieki
and Sakae.
The area attracts major companies headquartered in Tokyo or Osaka seeking regional
branch offices as well as companies based in the greater Nagoya region seeking
headquarter offices.
(ii) Features
This is a mid-size office building located within a 3-minute walk from Fushimi
Station of the Nagoya Municipal Subway Higashiyama and Tsurumai Lines. It issituated in a commercial district with a concentration of high-rise office buildings
along a street near Fushimi Dori Avenue.
The standard floor is 73 tsubo (240 m2) and the ceiling is 2.5 meters high. The floor
can be sub-divided into three units to suit the tenants’ needs. The building iscompetitive in the area due to its renovated common areas and specifications
including raised access flooring and individual air conditioning units.
(iii) Property Photos and Location

29

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

TrusteeMizuho Trust& Banking Co., Ltd.

Period of Trust Contract

July 30, 2015 – July 31, 2025 (Expected)

Location

1-5-27 Nishiki, Naka-ku, Nagoya, Aichi Prefecture
Property RightLand

Building

Freehold1

Size

421.38 m2

ZoningCommercial

Coverage Ratio/Floor
Area Ratio

80%/600%

Property Right

Freehold

ZoningOffice, Retail, Parking

Structure

SRC 9F

Total Floor Area

2,600.69 m2

Construction Date

January 31, 1991

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Value

1,360,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

1,390,000,000 yen

Architect2

Kokubu Architects Corporation

Builder

2

JDC Corporation

Structural Strength Assessor2
2

Kokubu Architects Corporation

Inspection Agency

City of Nagoya

PML (Assessor)

8.78% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

22

Monthly Rental Income

6,277 thousand yen

Deposit

52,845 thousand yen

Leasable Space

2,006.78 m2

Leased Space

1,939.34 m2

Occupancy

96.6%

Property Management Company

THE DAI-ICHI BUILDING CO., LTD.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type

Pass-through (Expected)

Assumed NOI (NOI Yield)3

68 million yen (5.2%)

Depreciation Rate3

1.3%
Special Items

A lease termination notification has been received from one of the tenants (leased area: 67.44 m2) on October 29, 2015 toterminate the contract as of April 30, 2016. The occupancy of the building will be 93.3% after the termination. 430

1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when the building wasbuilt.
2
NOI at Acquisition is the assumed annual net operating income excluding any special factors from the year of acquisition,and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI yield at Acquisition is
calculated by dividing NOI at Acquisition by the Acquisition Price. The above is an expected NOI and not a forecast for the
October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in the appraisal report’s
direct capitalization valuation method divided by the Acquisition Price is 5.4%.
3
Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the Acquisition
Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April 2017 fiscal periods.
4
A new lease contract has been signed on February 9, 2016 with a new tenant commencing on May 1, 2016 for a leased areaof 67.44 m2. Another new lease contract has been signed on February 16, 2016 with a new tenant commencing on May 1,2016 for a leased area of 67.44 m2. The occupancy of the building is expected to be 100% with the commencement of thisnew contract.

31

Appraisal Overview
Name

Ichigo Nishiki Building

Appraisal Value

1,360,000,000 yen

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Date

March 1, 2016
AmountAppraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses

Note
Valuation determined via both a direct capitalization
valuation and DCF valuation

1,360,000,000 yen
1,390,000,000 yen
97,831,603 yen

Based on mid- to long- term rental income, common area
service income, parking lot income, and other income

103,532,372 yen
5,700,769 yen

Based on mid- to long-term vacancy rate

25,605,336 yen

Administrative andMaintenance Expenses

7,284,400 yen

Based on similar assets and past actual amounts

Utility Expenses

6,555,924 yen

Based on similar assets and past actual amounts

Repair Expenses

1,647,750 yen

Based on the average of the past 12 years of engineering
reports

PM Fee1,338,876 yen

Based on current PM fee

Leasing Brokerage
Fees
Taxes

Based on the expected turnover rate and tenant acquisition
costs for similar assets

657,319 yen
7,152,284 yen

Based on FY2015 actual amounts

Insurance Premiums

186,130 yen

Based on the estimate and standard of similar assets

Other Expenses

782,653 yen

Consumable goods, etc.

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

72,226,267 yen
1,169,485 yen

Based on 2.0% investment yield

5,305,583 yen

Based on the average of the past 12 years of engineering
reports

Net Profit

68,090,169 yen

Cap Rate

4.9%

Value via DCF Method

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual
characteristics, property right, etc.

1,350,000,000 yen

Discount Rate

4.7%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics
taken into account

Terminal Cap Rate

5.1%

Based upon risk-adjusted NOI

Value via Cost Approach

995,000,000 yen

Land

71.5%

Building

28.5%
Notes

None

32

(8) Ichigo Minami Morimachi Building(i) Location
The area is conveniently located near stations serving multiple train lines, including
the JR Tozai Line, Osaka City Subway Tanimachi Line, and Sakaisuji Line, and isalso easy to access by car due to its proximity to the Minami Morimachi Entrance ofthe Hanshin Expressway. Mid- and high-rise office buildings are built on the majorroads running in front of the station, and slightly away from the major roads are
mid-rise buildings and residences such as condominiums.
The area is a subordinate business center of Osaka populated with small- to mid-size
office buildings that generate steady demand from existing tenants and has relatively
little new supply of larger buildings. Therefore, the lease market of the area is stable.
(ii) Features
This building is a 6-minute walk from Osaka-Tenmangu Station on the JR Tozai Line,located in a nice area with mid-size office buildings and condominiums.
The leased space of a standard floor is 90 tsubo (290 m2) and the ceiling is 2.58
meters high. The building is highly competitive in the area thanks to individual air
conditioning units, raised access flooring, and parking space for 34 cars.
(iii) Property Photos and Location

33

Asset Overview
Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

TrusteeMizuho Trust Bank, Limited

Period of Trust Contract

July 30, 2015 - July 31, 2025(Expected)

Location

1-3 Matsugaecho, Kita-ku, OsakaLand

Building

Property Right

FreeholdSize

661.54 m2

ZoningCommercial

Coverage Ratio/Floor
Area Ratio

80%/600%

Property Right

Freehold

Zoning(1) Office, Parking, Machine Room (2) Warehouse

Structure(1) Steel B1F/9F (2) RC 1F

Total Floor Area

(1) 3,851.25 m2 (2) 6.84 m2

Construction Date

February 15, 1994

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Value

1,090,000,000 yen

Appraisal Date

March 1, 2016

Value by Direct Capitalization Method

1,100,000,000 yen

Architect1

Konoike Construction Co., Ltd. Osaka Head Office 1st Architect Office

Builder1

Joint Venture of Konoike Construction Co., Ltd. and Yutaka Construction Co.,
Ltd.

Structural Strength Assessor1

Konoike Construction Co., Ltd. Osaka Head Office 1st Architect OfficeInspection Agency1

City of Osaka

PML (Assessor)

4.14% (Sompo Risk Management & Health Care Inc.)

Collateral

None
Rent Overview (as of February 29, 2016)

Number of Tenants

12

Monthly Rental Income

6,224 thousand yen

Deposit55,821 thousand yen

Leasable Space

2,521.51 m2

Leased Space

2,521.51 m2

Occupancy

100%

Property Management Company

Japan Property Solutions Co., Ltd.(Expected)

Master Lease Company

Ichigo Office REIT Investment Corporation (Expected)

Master Lease Type

Pass-through (Expected)

Assumed NOI (NOI Yield)2

58 million yen (5.6%)

Depreciation Rate3

1.4%
Special Items

None

34

1

The names of the architect, builder, structural strength assessor, and inspection agency are those of when the building wasbuilt.
2
NOI at Acquisition is the assumed annual net operating income excluding any special factors from the year of acquisition,and it is the net operating income of the first year used by the appraiser in their DCF valuation. NOI yield at Acquisition is
calculated by dividing NOI at Acquisition by the Acquisition Price. The above is an expected NOI and not a forecast for the
October 2016 and April 2017 fiscal periods. The NOI yield calculated using the NOI employed in the direct capitalization
valuation method from the appraisal report divided by the Acquisition Price is 5.8%.
3Depreciation Rate is derived from the expected annual amount of depreciation at acquisition divided by the Acquisition
Price. The above is an expected depreciation rate and not a forecast for the October 2016 and April 2017 fiscal periods.

35

Appraisal Overview
Name

Ichigo Minami Morimachi Building

Appraisal Value

1,090,000,000 yen

Appraiser

Daiwa Real Estate Appraisal Co., Ltd.

Appraisal Date

March 1, 2016
AmountAppraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses

Note
Valuation determined via both a direct capitalization
valuation and DCF valuation

1,090,000,000 yen
1,100,000,000 yen
99,499,438 yen

Based on rental income, common area service income,parking lot income, and other income

104,244,600 yen
4,745,162 yen

Based on mid- to long-term vacancy rate

39,315,116 yen

Administrative andMaintenance Expenses

11,441,300 yen

Based on similar assets and past actual amounts

Utility Expenses

10,525,950 yen

Based on similar assets and past actual amounts

Repair Expenses

3,641,250 yen

Based on the average of the past 12 years of engineering
reports

PM Fee2,179,625 yen

Based on similar assets

Leasing Brokerage
Fees
Taxes

Based on the expected turnover rate and tenant acquisition
costs for similar assets

495,525 yen
10,279,039 yen

Based on FY2015 actual amounts

Insurance Premiums

254,930 yen

Based on the standard of similar assets and past actual
amounts

Other Expenses

497,497 yen

Consumable goods, etc.

Net Operating Income(NOI)
Income on Investmentof Deposits Received
Capital Expenditure

60,184,322 yen
844,170 yen

Based on the average of the past 12 years of engineering
reports

7,002,417 yen

Net Profit

54,026,075 yen

Cap Rate

4.9%

Value via DCF Method

Based on 2.0% investment yield

Based on transactions of similar assets and comprehensive
assessment of the asset’s location, its individual
characteristics, property right, etc.

1,080,000,000 yen

Discount Rate

4.7%

Based on transactions of similar assets and the yields offinancial assets with the asset’s individual characteristics
taken into account

Terminal Cap Rate

5.1%

Based upon risk-adjusted NOI

Value via Cost Approach

1,230,000,000 yen

Land

68.0%

Building

32.0%
Notes

None

36

V. Seller Profile
Name
Address
Representative

Principal Businesses

CapitalEstablishment Date
Equity Holder

Relationship with the Ichigo
Office REIT or AssetManager1

Name
Address
Representative

Principal Businesses

CapitalEstablishment Date
Equity Holder

Relationship with the Ichigo
Office REIT or AssetManager11Motoazabu Holdings GK
1-1-1 Uchisaiwaicho, Chiyoda-ku, TokyoManaging Member: Ippan Shadan Hojin Star Holding
Manager: Mariko Hirano
1. The acquisition, holding, and sale of trust
beneficiary interest (juekiken)
2. The holding, management, and sale of real estate
3. Other businesses relating to the aforementioned
businesses
100,000 yen
June 8, 2015
Ippan Shadan Hojin Star Holding
While the Seller is not a related party as defined in the
Act on Investment Trusts and Investment Corporations(the “Act”), the acquisition process has followed theinternal rules of IRE vis-à-vis related party transactions
for the following reasons. First, Ichigo Inc., the 100%
owner of IRE, is a related party according to the Act,and Ichigo Inc. owns more than half of the equity ofMotoazabu Holdings GK. Second, Ichigo Estate Co.,
Ltd., a related party as defined in the Act, has provided
asset management advisory services to IRE.
Ikenohata Holdings GK
1-1-1 Uchisaiwaicho, Chiyoda-ku, TokyoManaging Member: Ippan Shadan Hojin Star Holding
Manager: Hiroshi Sasaki
1. The acquisition, holding, and sale of trust
beneficiary interest (juekiken)
2. The holding, management, and sale of real estate
3. Other businesses relating to the aforementioned
businesses
100,000 yen
June 8, 2015
Ippan Shadan Hojin Star Holding
While the Seller is not a related party as defined in the
Act on Investment Trusts and Investment Corporations(the “Act”), the acquisition process has followed theinternal rules of IRE vis-à-vis related party transactions
for the following reasons. First, Ichigo Inc., the 100%
owner of IRE, is a related party according to the Act,and Ichigo Inc. owns more than half of the equity of
Ikenohata Holdings GK. Second, Ichigo Estate Co.,
Ltd., a related party as defined in the Act, has provided
asset management advisory services to IRE.

Ichigo Office REIT followed strict related-party procedures to manage potential
conflicts of interest. Ichigo Office REIT also obtained second opinions to assess thefairness of the transaction prices.

37

VI. Ownership History
Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date
Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date
Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date
Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date

Ichigo Ikenohata Building
Current Owner
Ikenohata Holdings GK
Related Party as defined in theinternal rules of IRE. Pleasesee “Seller Profile” in Section
V.

Previous Owner
Unrelated Party―

Investment―

5,050,000,000 yen
July 30, 2015――

Ichigo Ikebukuro East Building
Current Owner
Previous Owner
Ikenohata Holdings GK
Unrelated Party
Related Party as defined in theinternal rules of IRE. Please―see “Seller Profile” in Section
V.
Investment―

2,950,000,000 yen
July 30, 2015――

Ichigo Motoazabu Building
Current Owner
Motoazabu Holdings GK
Related Party as defined in theinternal rules of IRE. Pleasesee “Seller Profile” in Section
V.

Previous Owner
Unrelated Party―

Investment―

1,850,000,000 yen
July 30, 2015――

Ichigo Otsuka Building
Current Owner
Motoazabu Holdings GK
Related Party as defined in theinternal rules of IRE. Pleasesee “Seller Profile” in Section
V.

Previous Owner
Unrelated Party―

Investment―

2,690,000,000 yen
July 30, 2015

―
―

38

Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date

Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date

Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date

Asset Name
Overview
Name
Relationship to
Ichigo Office REIT
Acquisition
Rationale
Acquisition Price
Acquisition Date

Ichigo Nagoya Building
Current Owner
Motoazabu Holdings GK
Related Party as defined in theinternal rules of IRE. Pleasesee “Seller Profile” in Section
V.

Previous Owner
Unrelated Party―

Investment―

3,350,000,000 yen
July 30, 2015――

Ichigo Fushimi Building
Current Owner
Ikenohata Holdings GK
Related Party as defined in theinternal rules of IRE. Pleasesee “Seller Profile” in Section
V.

Previous Owner
Unrelated Party―

Investment―

2,300,000,000 yen
July 30, 2015――

Ichigo Nishiki Building
Current Owner
Motoazabu Holdings GK
Related Party as defined in theinternal rules of IRE. Pleasesee “Seller Profile” in Section
V.

Previous Owner
Unrelated Party―

Investment―

1,300,000,000 yen
July 30, 2015――

Ichigo Minami Morimachi Building
Current Owner
Previous Owner
Ikenohata Holdings GK
Unrelated Party
Related Party as defined in theinternal rules of IRE. Please―see “Seller Profile” in Section
V.
Investment―

1,020,000,000 yen
July 30, 2015

―
―

39

VII.

Broker Profile

N/A

VIII.

Acquisition Schedule

Contract Date

May 9, 2016

Acquisition and Settlement Date

May 24, 2016 (Expected)

IX. Earnings Outlook
For the acquisition’s earnings impact, please refer to today’s release “Earnings and Dividend
Forecast Revision for the April 2016, October 2016, and April 2017 Fiscal Periods.”

40

Portfolio Reference Information
I.

Ichigo Office REIT Growth Strategy Roadmap

StageⅠ/Ⅱ/Ⅲ/Ⅳ

Stage V

Multi-Asset REIT

Stage VI

Specialized Office REIT

2011/10

2015/10

2016/42017/4

2016/102017/10Grow Office Portfolio
Goals

Strengthen Forward Growth Capabilities

Enhance Profitability

Accretive Growth Cycle

Foundation for Growth

II.

Lay Foundation for Sustainable
Dividend Growth

Stable Dividend Growth■ 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 at
assets, e.g., prominent Ichigo signage
・ Maintain highest standard of quality in servicing
tenants via Ichigo Property Management Standard

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

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

Action Plan

■ External Growth Strategy
Increase portfolio size and scale and be smart in
portfolio restructuring
・ Further expand portfolio size and scale via thisacquisition・ 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 indices■ External Growth Strategy
Aim for portfolio size and scale of JPY 230B
・Enhance acquisition pipeline via diversified
sourcing routes
・Use Ichigo sponsor support and diverse funding
capability to close quickly under deadline■ Financing Strategy
Improve credit rating and diversify funding・Achieve A (Stable) credit rating
・ Consider issuance of REIT bonds and broadeningof lender base・ Use financial strength and commitment line togrow acquisition capacity
・Further improve borrowing terms
・Enter global REIT indices

Strategic Portfolio Restructuring
4 Asset Sales

Sold

4 assets, JPY 2.9B
Reasons for Sale:– Vacancy risk
– Capex burden– Increased competition in the area

Akita Sanno 21
Building

Ichigo Saga
Building

Ichigo Yokohama
Nishiguchi Building

Ichigo Meieki
Building

Strategic Portfolio
Restructuring

2016/4

Bought2016/1013 assets, JPY 29.2B

13 Asset Acquisitions

Ichigo Ikenohata Building

Ichigo Ikebukuro East Building

Ichigo Minami Morimachi Building

Ichigo Motoazabu Building

Ichigo Shibuya East Building

Ichigo Otsuka Building

Ichigo Ningyocho Building

41

Ichigo Nagoya Building

Nishiki First Building

Ichigo Fushimi Building

Ichigo Nishi Honmachi Building

Ichigo Nishiki Building

Ichigo Hakata Building

III.

Ichigo Office REIT Strategic Restructuring Objectives

1.

Increase NOI and Dividend
Increase NOI with High-Quality Acquisitions using Proceeds from Asset Sales and
Low-Cost Debt (Low LTV = Additional Borrowing Capacity)
Reduce Cost of Debt by Paying Down Higher-Cost Existing Debt with the Proceedsfrom Asset Sales, while Funding New Acquisitions with Lower-Cost Debt

Revise Up October 2016 Dividend (+90 yen vs. Initial Forecast)2.

Increase Portfolio Quality
Sold Low-Upside Assets
Acquired High-Quality Prime Location Assets via Ichigo’s Sponsor Support

3.

Generate Capital Gains on Low-Upside Asset Sales into Strong Market
Sell Low-Upside Assets into a Strong Market and Generate JPY 300M in Capital
Gains
Retain Capital Gains in Dividend Reserve and Deploy against Future Dividends

42

IV.

Post-Acquisition Portfolio

Pre-Acquisition

Asset

Asset

Post-

Sales1

Acquisitions2

Acquisition3

77

4

13

86

Acquisition Price (billion yen)

165.6

2.9

29.2

191.9

Office Ratio3

85.5%

69.5%

100.0%

88.0%

9.14

0.2

1.5

10.4

Number of Assets

Annual NOI (billion yen)4

Post-Depreciation NOI Yield

4.5%

5.1%

4.6%

4.5%

Average Occupancy5,6

96.0%

93.8%

97.7%

96.6%

Number of Tenants 6

725

50

197

872

Unrealized Gains (billion yen)7

+8.4

0

+0.8

+9.3

1

Asset Sales refers to the four assets sold during the April 2016 fiscal period.
Indices are forecasts and may differ from actual.
3
Office Ratio is the percentage of the total acquisition price of office areas among the totalacquisition price of all assets.
4
Pre-Acquisition Annual NOI = Total NOI of all owned assets as of October 31, 2015
Pre-Acquisition Average Post-Depreciation NOI Yield = Total NOI of all owned assets as of
October 31, 2015 minus depreciation divided by the total acquisition price of all assets owned
as of as of October 31, 2015
5
Average Occupancy is the percentage of leased area among the total leasable area, i.e., thetotal space of the individual properties that is available to be leased.
6
Average Occupancy and Number of Tenants is as of December 31, 2015 for Pre-Acquisition
and Asset Sales, and as of February 29, 2016 for Asset Acquisitions and Post-Acquisition.
7
Pre-Acquisition and Asset Sales Unrealized Gains are calculated using the appraisal value andperiod-end book value of the October 2015 fiscal period. Asset Acquisitions Unrealized Gainsare calculated based on the appraisal value at acquisition and the expected acquisition price.
2

43

Post-Acquisition Portfolio Assets
Area1

Acquisition
Price2(mm yen)% ofPortfolio

O-02 Ichigo Nishisando Building

Central Tokyo

3,254

1.7

O-03 Ichigo Mita Building

Central Tokyo

2,740

1.4

O-04 Ichigo Nanpeidai Building

Central Tokyo

1,920

O-05 Ichigo Hanzomon Building

Central Tokyo

1,550

1.0
0.8

O-06 Ichigo Hijirizaka Building

Central Tokyo

1,200

0.6

O-07 Ichigo Shibuya Kamiyamacho Building

Central Tokyo

1,505

0.8

O-08 Ichigo Akasaka 5 Chome Building

Central Tokyo

735

0.4

O-09 Ichigo Shibakoen Building

Central Tokyo

1,100

0.6

O-10 Ichigo Ebisu Nishi Building

Central Tokyo

1,917

1.0

O-11 Ichigo Ginza 612 Building

Central Tokyo

1,773

0.9

O-12 Ichigo Uchikanda Building

Central Tokyo

1,140

0.6

O-14 Ichigo Yotsuya 4 Chome Building

Central Tokyo

550

0.3

O-15 Ichigo Tameike Building

Central Tokyo

580

0.3

O-16 Ichigo Jimbocho Building

Central Tokyo

1,820

0.9

O-17 Ichigo Hakozaki Building

Central Tokyo

1,150

0.6

O-18 Ichigo Kudan 2 Chome Building

Central Tokyo

763

0.4

O-19 Ichigo Kudan 3 Chome Building

Central Tokyo

844

0.4

O-20 Ichigo Gotanda Building

Central Tokyo

5,060

2.6

O-21 Ichigo Shin Yokohama Building

Tokyo Metropolitan Area

1,816

0.9

O-22 Ichigo Minami Ikebukuro Building

Tokyo Metropolitan Area

1,460

0.8

O-23 Ichigo Nakano North Building

Tokyo Metropolitan Area

764

0.4

O-24 Ichigo Eitai Building

Tokyo Metropolitan Area

1,490

0.8

O-25 Ichigo Yokosuka Building

Tokyo Metropolitan Area

971

0.5

O-26 Ichigo Ikejiri Building

Tokyo Metropolitan Area

2,030

1.1

O-27 Ichigo Nishi Ikebukuro Building

Tokyo Metropolitan Area

639

0.3

O-28 Ichigo Nishi Gotanda Building

Central Tokyo

765

0.4

O-29 Ichigo Kichijoji Building

2,160

1.1

4,705

2.5

6,710

3.5

O-38 Ichigo Toyamaeki Nishi Building

Tokyo Metropolitan Area
Four Major Regional
CitiesFour Major Regional
CitiesOther Regional Cities

1,650

0.9

O-39 Ichigo Mirai Shinkin Building

Other Regional Cities

1,158

0.6

O-42 Ichigo Takamatsu Building

Other Regional Cities

3,010

1.6

O-46 Ichigo Kanda Nishikicho Building

Central Tokyo

2,130

1.1

O-47 Ichigo Akihabara North Building

Central Tokyo

5,500

2.9

No.

Property

O-34 Ichigo Sakae Building
O-37 Ichigo Marunouchi Building

44

No.

Area1

Property

Acquisition
Price2(mm yen)% ofPortfolio

1,940

1.0

2,210

1.2

O-49 Ichigo Kanda Ogawamachi Building

Four Major Regional
CitiesCentral Tokyo

O-50 Ichigo Hatchobori Building

Central Tokyo

1,905

1.0

O-51 Ebisu Green GlassCentral Tokyo

5,900

3.1

O-52 Ichigo Omori Building

Central Tokyo

3,850

2.0

O-53 Ichigo Takadanobaba Building

Central Tokyo

1,580

0.8

O-54 Ichigo Omiya Building

Tokyo Metropolitan Area

3,430

1.8

O-55 Ichigo Sagamihara Building

Tokyo Metropolitan Area

1,174

0.6

O-56 Ichigo Ofuna Building

Tokyo Metropolitan Area

2,000

1.0

O-57 Ichigo Sendai East Building

Other Regional Cities

1,840

1.0

O-58 Ichigo Kumamoto Building

Other Regional Cities

1,450

0.8

O-59 Ichigo Jingumae Building

Central Tokyo

7,200

3.8

O-60 Ichigo Shibuya Dogenzaka Building

Central Tokyo

3,650

1.9

O-61 Ichigo Hiroo Building

Central Tokyo

3,960

2.1

O-62 Ichigo Sasazuka Building

Central Tokyo

4,780

2.5

O-63 Ichigo Nihonbashi East Building

Central Tokyo

4,700

2.4

O-64 Ichigo Sakurabashi Building

Central Tokyo

2,500

1.3

O-65 Ichigo Shinkawa Building

Central Tokyo

2,360

1.2

O-66 Ichigo Kudan Building

Central Tokyo

3,190

1.7

O-67 Ichigo Higashi Gotanda Building

Central Tokyo

3,660

1.9

O-68 Axior Mita

Central Tokyo

1,800

0.9

O-69 Ichigo Higashi Ikebukuro Building

Tokyo Metropolitan Area

4,570

2.4

O-70 Koriyama Big-i (Office Section)

Other Regional Cities

1,660

0.9

O-71 Ichigo Kawasaki Building

Tokyo Metropolitan Area

1,750

0.9

O-72 Ichigo Shibuya East Building

Tokyo Metropolitan Area

1,350

0.7

O-73 Ichigo Ningyocho Building

1,450

0.8

2,190

1.1

1,380

0.7

2,000

1.0

O-77 Ichigo Ikenohata Building

Tokyo Metropolitan Area
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesTokyo Metropolitan Area

5,130

2.7

O-78 Ichigo Ikebukuro East Building

Tokyo Metropolitan Area

3,010

1.6

O-79 Ichigo Motoazabu Building

Central Tokyo

1,890

1.0

O-80 Ichigo Otsuka Building

Tokyo Metropolitan Area
Four Major Regional
Cities

2,740

1.4

3,420

1.8

O-48 Ichigo Sakaisuji Honmachi Building

O-74 Ichigo Nishi Honmachi Building
O-75 Ichigo Hakata Building
O-76 Nishiki First Building

O-81 Ichigo Nagoya Building45

Acquisition
Price2(mm yen)% ofPortfolio

O-82 Ichigo Fushimi Building

2,340

1.2

O-83

1,330

0.7

1,040

0.5

168,888

88.0

1,360

0.7

701

0.4

No.

O-84

R-04
R-06

Area1

Property

Four Major Regional
CitiesFour Major Regional
Ichigo Nishiki Building
CitiesFour Major Regional
Ichigo Minami Morimachi Building
CitiesSubtotal - Office (71 Properties)
Ichigo Serviced Apartments
Central Tokyo
Takanawadai
B-SITE Hamamatsucho
Central Tokyo

R-09 Ichigo Serviced Apartments Ginza

Central Tokyo

946

0.5

Z-02 Ichigo Fiesta Shibuya

Central Tokyo

1,970

1.0

Z-03 Ichigo Burg Omori

Tokyo Metropolitan Area

3,218

1.7

Z-04 Ichigo Pagoda Asakusa

Tokyo Metropolitan Area

1,640

0.9

Z-05 Ichigo Machida East Building
Ichigo Sapporo Minami 2 Nishi 3
Z-07
Building

Tokyo Metropolitan Area
Four Major Regional
CitiesFour Major Regional
CitiesOther Regional Cities

1,310

0.7

558

0.3

638

0.3

1,210

0.6

Central Tokyo

2,400

1.3

Tokyo Metropolitan Area

1,620

0.8

Tokyo Metropolitan Area

2,430

1.3

Tokyo Metropolitan Area

1,700

0.9

Tokyo Metropolitan Area

1,400

0.7

Subtotal - Others (15 Properties)

23,101

12.0

Total (86 Properties)

191,989

100.0

Z-08 Ichigo Daimyo Balcony
Z-09 Konami Sports Club Izumi Fuchu
Ichigo Shibuya Bunkamura Dori
Z-10
Building
Twicere Yokohama Isogo
Z-11(Retail Section)
Z-12 Lions Square Kawaguchi
Ichigo Shin Yokohama Arena Dori
Z-13
Building
Z-14 Ichigo Kamata Building“Central Tokyo” refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards.
“Tokyo Metropolitan 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.
2
Acquisition Price excludes incidental expenses such as acquisition fees, property, city
planning, and consumption taxes, and other fees. For the 38 assets acquired via the REIT
merger on November 1, 2011 (O-02 to O-42 and Z-02 to Z-08), the appraisal value as of
October 31, 2011 is shown.
1

46