Strategic Portfolio Restructuring Update
May 9, 2016

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

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

www.ichigo-office.co.jp/english

This material is a summary of the following three releases detailing Ichigo Office REIT’s strategic portfolio
restructuring as described in its Growth Strategy Roadmap:“Acquisition of Five Office Assets,” April 8, 2016
“Acquisition of Eight Office Assets,” May 9, 2016
“Earnings and Dividend Forecasts for the April 2016, October 2016, and April 2017 Fiscal Periods,”
May 9, 2016
These materials are for informational purposes only, and do not constitute or form a part of, and should
not be construed as, an offer to sell or a solicitation of an offer to buy any securities of Ichigo Office REIT
Investment Corporation.
These materials may contain forward-looking statements regarding the intent, belief or current
expectations of management of Ichigo Office REIT with respect to financial condition and future results ofoperations. These statements are based on certain assumptions founded on currently available
information. Accordingly, such statements are subject to risks, uncertainties and assumptions and there is
no assurance as to actual financial conditions or results of operations. Actual results may vary from thoseindicated in the forward-looking statements. Accordingly, please refrain from relying solely on thesestatements.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

2

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

Stage V

Stage VI

Specialized Office REIT

Multi-Asset REIT

2011/10

2015/10

2016/4

2016/102017/42017/10Grow Office Portfolio
Goals

Lay Foundation for Sustainable
Dividend Growth

Strengthen Forward Growth Capabilities

Enhance Profitability

Accretive Growth Cycle

Foundation for 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

Stable Dividend Growth■ 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© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

3

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© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. All rights reserved.

Ichigo Nagoya Building

Nishiki First Building

Ichigo Fushimi Building Ichigo Nishiki Building

Ichigo Nishi Honmachi Building

Ichigo Hakata Building

4Strategic Portfolio Restructuring Objectives
Increase Portfolio Quality, Size, and Scale to Drive NOI and Dividendü Sell low-upside assets into a strong market and recycle the capital to acquire higherquality, higher-return assets
ü Drive ongoing NOI and dividend growth by focusing portfolio on Central Tokyo and four
major regional cities (Osaka, Nagoya, Fukuoka, and Sapporo) with rising rents andcontinued economic growth potential

Increase Asset Profitability to Further Drive NOI and Dividendü Increase asset-level profitability and asset value by fully using Ichigo’s deep expertise inleasing and value-add of mid-size office buildings

Further Strengthen Financial Base
ü Refinance to reduce borrowing costs and improve borrowing terms, taking advantage ofthe current low interest rate environment
ü Retain asset sale profits in the dividend reserve and deploy to stabilize and increase
future dividends© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

5

Portfolio Results: Increased NOI and Portfolio Quality

Pre-Acquisition

Asset

Asset

1

Post2

Sales

Acquisitions

Acquisition3

77

4

13

86

Acquisition Price (billion yen)

165.6

2.9

29.2

191.9

Office Ratio

85.5%

69.5%

100.0%

88.0%

9.1

0.2

1.5

10.4

Post-Depreciation NOI Yield

4.5%

5.1%

4.6%

4.5%

Average Occupancy

96.0%

93.8%

97.7%

96.6%

Number of Tenants

725

50

197

872

Unrealized Gains (billion yen)

+8.4

0

+0.8

+9.3

Number of Assets

Annual NOI (billion yen)

1 Asset Sales refers to the four asset sales in the April 2016 fiscal period.
2 Asset Acquisitions refers to the thirteen asset acquisitions in the October 2016 fiscal period.
3 Post-Acquisition numbers (excluding Number of Assets, Acquisition Price, and Office Ratio) are values expected as of today based on certain preconditions,and may not match the actual post-acquisition results.
For additional details on asset acquisitions, please refer to today’s release “Acquisition of Eight Office Assets.”© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Portfolio Results: Further Dividend Growth
Revising Up October 2016 and April 2017 Dividend Forecasts
Post-Strategic Restructuring

1,890 yen

1,900 yen

October 2016
New Forecast

April 2017
New Forecast

1,760 yen

October 2016
Initial Forecast

Note: The October 2016 initial forecast was 1,760 yen, and the first revised forecast was 1,850 yen. The April 2017 initial forecast was 1,860 yen.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. All rights reserved.

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Acquisition: Ichigo Ikenohata Building（O-77）
Asset Overview
Acquisition Price

5,130 mm yen

Appraisal Value

5,220 mm yen

NOI Yield

5.1%

Asset Type

OfficeAddress

1 Chome, Ikenohata, Taito-ku, Tokyo

Leasable Area

5,504.02 m2

Structure

SRC B1F/8F

Construction Date

June 1991

Occupancy

100.0%

Location and 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 area 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 of major companies, atelecommunications company, a government-affiliatedcompany, and a medical corporation currently occupy thebuilding.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

8

Acquisition: Ichigo Ikebukuro East Building（O-78）
Asset Overview
Acquisition Price

3,010 mm yen

Appraisal Value

3,110 mm yen

NOI Yield

5.0%

Asset Type

OfficeAddress

2 Chome, Higashi Ikebukuro,
Toshima-ku, Tokyo

Leasable Area

3,118.69 m2

Structure

SRC/RC 8F

Construction Date

June 1993

Occupancy

100.0%

Location and Features
This building is a 9-minute walk from the Higashi
Ikebukuro Station on the Tokyo Metro Yurakucho Lineand the Otsuka Station on the JR Yamanote Line. It isalso 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 accessflooring.
The first floor tenant is a supermarket. Consulting firms
and telecommunications company tenants occupy theupper floors.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

9Acquisition: Ichigo Motoazabu Building（O-79）
Asset Overview
Acquisition Price

1,890 mm yen

Appraisal Value

1,940 mm yen

NOI Yield

4.3%

Asset Type

OfficeAddress

3 Chome, Motoazabu, Minato-ku, Tokyo

Leasable Area

1,329.96 m2

Structure

RC B1F/2F

Construction Date

July 1992

Occupancy

100.0%

Location and Features
This mid-size office building is a 9-minute walk from
Hiroo Station on the Tokyo Metro Hibiya Line, and islocated 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.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

10Acquisition: Ichigo Otsuka Building（O-80）
Asset Overview
Acquisition Price

2,740 mm yen

Appraisal Value

2,820 mm yen

NOI Yield

5.3%

Asset Type

OfficeAddress

3 Chome, Minami Otsuka, Toshima-ku,
Tokyo

Leasable Area

3,688.77 m2

Structure

SRC 8F

Construction Date

March 1989

Occupancy

100.0%

Location and Features
The building is a mid-size office building, a 4-minute walkfrom Otsuka Station on the JR Yamanote Line and a 6minute walk from Shin-Otsuka Station on the Tokyo
Metro Marunouchi Line.
The 180-tsubo (590 m2) standard floor plate with 2.6
meter high ceilings is relatively large compared to otheroffice buildings in the vicinity. The size and easy-to-use
standard shape of the floor plate is expected to help
support stable rental income.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

11

Acquisition: Ichigo Nagoya Building（O-81）
Asset Overview
Acquisition Price

3,420 mm yen

Appraisal Value

3,500 mm yen

NOI Yield

5.5%

Asset Type

OfficeAddress

4 Chome, Meieki, Nakamura-ku,
Nagoya City, Aichi Prefecture

Leasable Area

4,930.30 m2

Structure

SRC B2F/8F

Construction Date

February 1982

Occupancy

94.8%

Location and 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 a variety of public transport. The building islocated on a wide avenue called Hirokoji Dori in acommercial area that enjoys consistent demand fromoffice and retail tenants.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

12Acquisition: Ichigo Fushimi Building（O-82）
Asset Overview
Acquisition Price

2,340 mm yen

Appraisal Value

2,360 mm yen

NOI Yield

5.7%

Asset Type

OfficeAddress

1 Chome, Nishiki, Naka-ku,
Nagoya City, Aichi Prefecture

Leasable Area

4,152.22 m2

Structure

SRC B1F/9F

Construction Date

September 1984

Occupancy

92.8%

Location and 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 the Fushimi 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 tenantsfrom the bridal industry and sales offices for interior
goods and electrical equipment occupy the upper floors.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

13

Acquisition: Ichigo Nishiki Building（O-83）
Asset Overview
Acquisition Price

1,330 mm yen

Appraisal Value

1,360 mm yen

NOI Yield

5.4%

Asset Type

OfficeAddress

1 Chome, Nishiki, Naka-ku,
Nagoya City, Aichi Prefecture

Leasable Area

2,006.78 m2

Structure

SRC 9F

Construction Date

January 1991

Occupancy

96.6%

Location and 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 is situatedin a commercial district with a concentration of high-riseoffice 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 threeunits to suit the tenants’ needs. The building iscompetitive in the area due to its renovated common
areas and specifications including raised access flooringand individual air conditioning units.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

14

Acquisition: Ichigo Minami Morimachi Building（O-84）
Asset Overview
Acquisition Price

1,040 mm yen

Appraisal Value

1,090 mm yen

NOI Yield

5.8%

Asset Type

OfficeAddress

Matsugaecho, Kita-ku, Osaka

Leasable Area

2,521.51 m2

Structure

Steel B1F/9F

Construction Date

February 1994

Occupancy

100.0%

Location and 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.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

15

Acquisition in Oct 2016 Period: Ichigo Shibuya East Building（O-72）
Asset Overview
Acquisition Price

1,350 mm yen

Appraisal Value

1,450 mm yen

NOI Yield

4.6%

Asset Type

OfficeAddress

1 Chome, Higashi, Shibuya-ku, Tokyo

Leasable Area

1,041.36m2

Structure

RC 6F

Construction Date

October 1985

Occupancy

100.0%

Location and Features
This mid-size office building is a 9-minute walk from
Shibuya Station, which is serviced by a large number ofrailways such as JR, Tokyu, and Keio Railways.
The standard floor area is 58 tsubo (190 m2). The
building has specifications suited for the demands of thetypical tenant, such as individual air conditioning systems
for each floor and raised access flooring.
A convenience store occupies the first floor, and theother floors are occupied by tenants in thetelecommunications industry.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

16

Acquisition in Oct 2016 Period: Ichigo Ningyocho Building（O-73）
Asset Overview
Acquisition Price

1,450 mm yen

Appraisal Value

1,530 mm yen

NOI Yield

5.2%

Asset Type

OfficeAddress

1 Chome, Nihonbashi-horidomecho,
Chuo-ku, Tokyo

Leasable Area

1,769.09 m2

Structure

SRC 11F

Construction Date

March 1984

Occupancy

100.0%

Location and Features
This mid-size office building is a 4-minute walk from
Ningyocho Station on the Toei Asakusa Line and theTokyo Metro Hibiya Line, and Kodenmachi Station on theTokyo Metro Hibiya Line.
The standard floor area of this building is 60 tsubo (190m2), with individual air conditioning systems and raised
access flooring, making it a competitive offering in thearea.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

17

Acquisition in Oct 2016 Period: Ichigo Nishi Honmachi Building（O-74）
Asset Overview
Acquisition Price

2,190 mm yen

Appraisal Value

2,290 mm yen

NOI Yield

6.2%

Asset Type

OfficeAddress

2 Chome, Awaza, Nishi-ku, Osaka

Leasable Area

6,151.98 m2

Structure

SRC 14F

Construction Date

October 1990

Occupancy

94.1%

Location and Features
This mid-size office building situated on Chuo Odori
Boulevard is a 4-minute walk from Awaza Station on the
Osaka Municipal Subway Chuo Line and Sennichimae
Line.
Each floor has a standard floor of 162 tsubo (530 m2)
which is sub-divisible to suit the needs of tenants. The
common areas in the building were renovated in
February 2014.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

18

Acquisition in Oct 2016 Period: Ichigo Hakata Building（O-75）
Asset Overview
Acquisition Price

1,380 mm yen

Appraisal Value

1,410 mm yen

NOI Yield

6.0%

Asset Type

OfficeAddress

Gioncho, Hakata-ku, Fukuoka

Leasable Area

2,423.86 m2

Structure

SRC B1F/9F

Construction Date

April 1989

Occupancy

100.0%

Location and Features
This mid-size office building is conveniently located withinwalking distance from Tenjin and Central Hakata and is
only a one-minute walk from Gion Station of the Fukuoka
City Subway Kuko Line.
The building has an aluminum curtain wall façade. With astandard floor area of 88 tsubo (290 m2) and ceilings thatare 2.5 meters high, the building has highcompetitiveness in the area thanks to its individual air
conditioning systems and mechanical parking garage
accommodating up to 36 cars.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

19

Acquisition in Oct 2016 Period: Nishiki First Building（O-76）
Asset Overview
Acquisition Price

2,000 mm yen

Appraisal Value

2,050 mm yen

NOI Yield

5.8%

Asset Type

OfficeAddress

1 Chome, Nishiki, Naka-ku,
Nagoya City, Aichi Prefecture

Leasable Area

3,324.54 m2

Structure

SRC B1F/7F

Construction Date

October 1984

Occupancy

100.0%

Location and Features
This mid-size office building is a 6-minute walk from
Fushimi Station on the Nagoya City Subway Tsurumai
Line and Higashiyama Line.
The standard floor plate is 180 tsubo (594 m2) offering a
relatively large space for tenants seeking office space in
the Fushimi area. The building is competitive from aleasing perspective, with 2.5 meters high ceilings,
individual air conditioning for the office spaces, raised
access flooring, and frequently-refreshed common areas.
A subsidiary of a TSE First Section-listed
telecommunications company is currently the single
tenant renting the whole building.

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

20

MEMO

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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

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

© 2016 Ichigo Real Estate Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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