Make The World
More Sustainable[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 25, 2023
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Keisuke Chiba, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Yuji Kamo, Head of Ichigo OfficeTel: +81-3-3502-4891

Withdrawal of Ichigo Trust’s Proposals, Proposed Amendments to Articles
of Incorporation and Nomination of Directors, and Ichigo Office’s Position
on Berkeley Global’s Proposals
Ichigo Office received a shareholder request from Berkeley Global, LLC, as announced
in the March 17, 2023 release “Shareholder Request for Convocation of Extraordinary
Shareholder Meeting.”
As announced in the April 28, 2023 release “Receipt of Shareholder Proposals,” Ichigo
Office also received shareholder proposals from Ichigo Trust Pte. Ltd. (“Ichigo Trust”).
Ichigo Office’s Board of Directors is comprised of independent directors who have no
relationship with Ichigo Office’s asset management company or the Ichigo group. Upon
careful review of both Ichigo Trust’s and Berkeley Global’s proposals under thisindependent governance system, Ichigo Office’s Board of Directors has decided tosupport Ichigo Trust’s proposals and propose them as Ichigo Office for approval at theExtraordinary Shareholder Meeting (EGM).
Ichigo Office received today a written notification from Ichigo Trust that Ichigo Trust
will thus withdraw its proposals, and Ichigo Office’s Board of Directors decided tosubmit the following amendments to its Articles of Incorporation (AOI) and Director
candidates for approval at its EGM scheduled on June 23, 2023.
Berkeley Global’s proposals remain on the EGM agenda.
Ichigo Office’s Board of Directors does not believe Berkeley Global’s proposals
contribute to Ichigo Office shareholder value, and opposes all of Berkeley Global’s
proposals.
1. EGM Proposals(1) Ichigo Office Proposals (Proposals 1~8)
Ichigo Office proposes to amend the relevant parts of its AOI and the Appointment of an
Executive Director and a Supervisory Director as follows.
Proposal 1: Amendment to the Articles of Incorporation (Reduce NOI & Dividend
Performance Fee)1

Proposal 2: Amendment to the Articles of Incorporation (Amend Gains on Sale
Performance Fee)
Proposal 3: Amendment to the Articles of Incorporation (Amend Gains on Merger
Performance Fee)
Proposal 4: Amendment to the Articles of Incorporation (Amend Gains on REIT TOB Sale
Performance Fee)
Proposal 5: Appointment of Mr. Takafumi Kagiyama as Executive Director
Proposal 6: Appointment of Mr. Yuji Maruo as Supervisory Director
Proposal 7: Amendment to the Articles of Incorporation (Reduce upper limit on Director
compensation and add Director compensation shareholder approval requirement)
Proposal 8: Amendment to the Articles of Incorporation (Introduce upper limit on thenumber of Directors)(2) Berkeley Global Shareholder Proposals (Proposals 9~14)
Proposal 9: Partial amendments to the Articles of Incorporation (regarding change in therate of NOI & Dividend Performance Fee)
Proposal 10: Partial amendments to the Articles of Incorporation (regarding abolition of
Gains on Sale Performance Fee, and adoption of Asset Acquisition Fee and Asset Sale Fee)
Proposal 11: Partial amendments to the Articles of Incorporation (regarding abolition of
Gains on Merger Performance Fee and Gains on REIT TOB Sale Performance Fee, andadoption of Merger Fee)
Proposal 12: Appointment of Mr. Toru Sugihara as an executive director
Proposal 13: Appointment of Mr. Akihiko Fujinaga as a supervisory director
Proposal 14: Partial amendments to the Articles of Incorporation (regarding adoption of acap on remuneration for Executive Directors and Supervisory Directors)
2. Ichigo Office Proposal Rationale(1) Proposal 1: Amendment to the Articles of Incorporation (Reduce NOI & Dividend
Performance Fee)
J-REIT shareholders have a shared interest in maximizing the dividend and share price.
Ichigo Office believes that shareholder returns are supported by an asset management
fee structure that is aligned with value creation for shareholders, not a fee structure
based on portfolio size, acquisitions, or sales. In particular, asset management fees
should be paid based on how much value per share (that is, performance) the asset
management company generates, and the no fixed fee, performance fee-only structure
aiming to maximize long-term shareholder value approved at the Ichigo Officeshareholder meeting held in July 2020 (“2020 Shareholder Meeting”) represents Ichigo
Office and Ichigo Investment Advisor’s (“IIA”) shareholder-aligned asset management
philosophy and execution. Ichigo Office believes that maintaining this philosophy andasset management fee structure contributes to shareholder returns.
Ichigo Office’s long-term returns have met shareholders’ expectations, significantly
outperforming the TSE REIT Index. As of March 17, 2023, the date of Berkeley
Global’s EGM convocation request, Ichigo Office’s one-year, three-year, and ten-year
total returns including reinvested dividends were +9.73%, +46.97%, and +129.23%,
respectively. (Source: Bloomberg) Ichigo Office’s outperformance versus the TSE REIT
Index (total return basis) over the same one-year, three-year, and ten-year periods was+13.11%, +17.16%, and +62.52%, respectively, thus showing the appropriateness of
Ichigo Office’s no fixed fee, performance fee-only structure.
2

Berkeley Global observes that Ichigo Office’s current fee structure resulted in higher
fees during the April 2021 to October 2022 fiscal periods than would have been the caseunder our previous fee structure, which is contrary, they claim, to calculations shown at
the 2020 Shareholder Meeting that the now-current fee structure would have resulted inlower fees than the previous structure over the historical five year period from theOctober 2015 to April 2020 fiscal periods. However, there was no flaw in thecalculations. The increase under the new fee structure was due to the favorable
subsequent performance of Ichigo Office. The April 2021 fiscal period earnings forecast
was properly disclosed in the earnings material announced prior to the 2020
Shareholder Meeting and the materials handed out at the Shareholder Meeting.
Asset management fees do impact the dividend, but in asset classes like real estate,
which involve unique assets where asset values deteriorate over time, careful asset
management requiring much time and effort is essential to maintaining and improving
the value of assets. Ichigo Office differentiates itself from other listed J-REITs byacquiring assets with high value-add potential, with IIA leveraging the specialized
know-how and real estate value value-add capabilities of its sponsor Ichigo. Ichigo
Office’s portfolio of older mid-size offices with high liquidity requires greater asset
management services, and Ichigo Office believes that paying IIA an appropriate asset
management fee to maintain high quality asset management services is important tomaximizing shareholder value.
Nonetheless, based on discussions with shareholders, particularly institutional investors,
Ichigo Office believes it is reasonable to expect IIA to continue improving operational
efficiency and repay the outcome to shareholders via lower fees when appropriate.
Ichigo Office has confirmed with IIA that, three years having passed, given the current
portfolio and market environment, they can maintain their management structure andperformance with a c. 10% decrease in the management fee, and proposes a reduction
from 0.0054% to 0.0048%.
(Amended areas underlined)
Current
Attachments

After Amendment
Attachments

Asset Management Fee Structure

Asset Management Fee Structure

1. NOI & Dividend Performance Fee

1. NOI & Dividend Performance Fee

The NOI & Dividend Performance Fee iscalculated by: 1) dividing the Investment
Corporation’s distributable earnings3 (before
the deduction of the NOI & Dividend
Performance Fee) in the relevant fiscal period
by total shares outstanding in the same period
to generate the Dividend per Share (DPS); 2)
multiplying the DPS in 1) by Net Operating
Income (NOI), calculated as total rental
income minus total rent-related expenses(excluding depreciation and losses on disposalof fixed assets) of the relevant fiscal period;and 3) multiplying the amount in 2) by
0.0054%.

The NOI & Dividend Performance Fee iscalculated by: 1) dividing the Investment
Corporation’s distributable earnings3 (before
the deduction of the NOI & Dividend
Performance Fee) in the relevant fiscal period
by total shares outstanding in the same period
to generate the Dividend per Share (DPS); 2)
multiplying the DPS in 1) by Net Operating
Income (NOI), calculated as total rental
income minus total rent-related expenses(excluding depreciation and losses on disposalof fixed assets) of the relevant fiscal period;and 3) multiplying the amount in 2) by
0.0048%.

NOI & Dividend Performance Fee = DPS(before the deduction of the NOI & Dividend

NOI & Dividend Performance Fee = DPS(before the deduction of the NOI & Dividend3Current
Performance Fee) * NOI * 0.0054%

After Amendment
Performance Fee) * NOI * 0.0048%(omitted)(omitted)(2) Proposal 2: Amendment to the Articles of Incorporation (Amend Gains on Sale
Performance Fee)
Ichigo Office’s current Gains on Sale Performance Fee is consistent with the philosophy
set forth in Proposal 1, because it is paid only when gains on sales are recorded. It wasapproved at the 2020 Shareholder Meeting as part of the no fixed fee, performance feeonly structure that aligns the asset management company’s activities with shareholder
value creation. Actively working to enhance the value of Ichigo Office’s assets is therole of an asset management company. Ichigo Office believes that maintaining thecurrent Gains on Sale Performance Fee structure, where the asset management company
is compensated in line with its performance only after it has completed an asset sale,
contributing to maximizing shareholder value.
Berkeley Global argues that this amendment would essentially abolish the Gains on Sale
Performance Fee, but their argument embeds an assumption that the NOI & Dividend
Performance Fee will always exceed the Gains on Sale Performance Fee. This isincorrect. If large gains on sales are generated, the Gains on Sale Performance Fee will
exceed the NOI & Dividend Performance Fee. In such a case a Gains on Sale
Performance Fee will be paid, an outcome fully aligned with the intentions of thecurrent no fixed fee, performance fee-only structure.
The Asset Acquisition Fee and Asset Sale Fee (reference: Proposal 10) proposed by
Berkeley Global are calculated by multiplying the Acquisition Price and Sale Price by amaximum 0.5% respectively, resulting in fees linked to asset size, whether or not theyrealized gains. If an acquired asset is sold at a loss, the asset management company isstill paid a fee while shareholders bear the loss, which is not aligned with shareholder
value.
Current
Attachments

After Amendment
Attachments

Asset Management Fee Structure

Asset Management Fee Structure

2. Gains on Sale Performance Fee

2. Gains on Sale Performance Fee

When the Investment Corporation sells a realestate asset during the relevant fiscal period
and Gains on Sale are generated, a Gains on
Sale Performance Fee shall be calculated bymultiplying the Gains on Sale (before thededuction of the Gains on Sale PerformanceFee) by 15%.

When the Investment Corporation sells a realestate asset during the relevant fiscal period
and Gains on Sale are generated, a Gains on
Sale Performance Fee shall be calculated bymultiplying the Gains on Sale (before thededuction of the Gains on Sale PerformanceFee) by 15%.

Gains on Sale Performance Fee = Gains on
Gains on Sale Performance Fee = Gains on
Sale of a real estate asset (before the deduction Sale of a real estate asset (before the deductionof the Gains on Sale Performance Fee) * 15% of the Gains on Sale Performance Fee) * 15%
However, in cases where the Investment
Corporation’s cumulative sum of all Gains on

However, in cases where the Investment
Corporation’s cumulative sum of all Gains on
4

Current
Sale of real estate assets minus the sum of all
losses on such sales through the relevant fiscal
period is negative, the Gains on Sale
Performance Fee shall be zero.

After Amendment
Sale of real estate assets minus the sum of all
losses on such sales through the relevant fiscal
period is negative, the Gains on Sale
Performance Fee shall be zero.

The Gains on Sale Performance Fee payment
date shall be within three months of therelevant fiscal period.

The Gains on Sale Performance Fee payment
date shall be within three months of therelevant fiscal period.

(New)

Should a Gains on Sale Performance Feearise, the amount will be subtracted from the
NOI & Dividend Performance Fee prescribedin Clause 1 “NOI & Dividend Performance
Fee.”

Payment shall be made within three months of Payment shall be made within three months ofthe end of the Investment Corporation’s
the end of the Investment Corporation’s
relevant fiscal period.
relevant fiscal period.

(3) Proposal 3: Amendment to the Articles of Incorporation (Amend Gains on Merger
Performance Fee)
NOI & Dividend Performance Fee and Gains on Sale Performance Fees, in principle,
reflect the operating results of each fiscal period, based on the value realized forshareholders at that time. Actions taken by the asset management company to generatevalue over a longer-term perspective (for example, sourcing real estate assets at
attractive prices aiming for future capital gains, making wise capex decisions to enhance
property value, and identifying the optimal time to sell real estate assets at the bestprice), are not compensated immediately.
So long as the asset management company continues to conduct Ichigo Office’s asset
management activities, the results of such long-term efforts will eventually be realized
and paid out to the asset management company as performance fees.
However, if the asset management company changes due to an event such as a merger
or TOB, the contract between Ichigo Office and the asset management company ends
without them being fully compensated for their efforts to increase long-term value,
because the events that would have triggered compensation payments (such as realizing
gains on the sale of an asset) have not yet taken place. Ichigo Office believes that a fee
structure that does not provide compensation in this case fails to create the rightincentives for the asset management company to focus on long-term performance.
In cases where the asset management company will change post-merger, the Gains on
Merger Performance Fee, which was approved and introduced at the 2020 Shareholder
Meeting, is designed to reflect the per-share increase in value the asset managementcompany has contributed to Ichigo Office up to that point (specifically, the unrealized
gains per share at the time of the merger agreement). If there are, instead, unrealized
losses, no fees are paid.
Acquiring real estate assets at the lowest possible price and executing value-add actions
to realize the assets’ full potential are what drive shareholder value. The Gains on
Merger Performance Fee incentivizes the asset management company to grow longterm value per share and aligns the asset management company’s activities withshareholder value.
5

Berkeley Global, however, claims that the Gains on Merger Performance Fee and theGains on REIT TOB Sale Performance Fee are unconnected to the services provided by
the asset management company, and proposes a fee structure similar to the one
employed by Ichigo Office prior to the 2020 Shareholder Meeting (reference: Proposal
11). However, this type of fee structure is linked to asset size rather than shareholder
value, mechanically paying more as assets grow regardless of whether assets are
acquired at attractive prices. The Gains on Merger Performance Fee avoids the
drawbacks of a fee structure linked to asset size, and focuses instead on rewarding theasset management company only should they succeed in improving shareholder value,thus invalidating Berkeley Global’s argument.
Berkeley Global also claims that the Gains on Merger Performance Fee and Gains on
REIT TOB Sale Performance Fee are takeover defense measures, but Ichigo Officebelieves that it has the opposite effect. Typically, if a merger or TOB offer would resultin changing the current asset management company, meaning the asset managementcompany is at risk of losing a client, the asset management company may be reluctant towhole-heartedly assist in the merger or TOB process even if the offer would benefit the
REIT shareholders. However, in the case of Ichigo Office the immediate realization of
15% on unrealized gains is assured, so there is instead an incentive for the asset
management company to consider merger or TOB offers in a positive light. Ichigo
Office believes that the Gains on Merger Performance Fee rate, which is equal to theGains on Sale Performance Fee rate, is reasonable.
Given the above, Ichigo Office believes that its Gains on Merger Performance Fee, a fee
paid in line with asset management performance, i.e., driving value per share, should bemaintained. In order to clarify any details regarding the Gains on Merger Performance
Fee under the current AOI, Ichigo Office proposes the following changes.
1) Because Ichigo Office views the Gains on Merger Performance Fee as compensation
for the asset management company’s long-term contributions to Ichigo Office’s
shareholder value, the phrase “in response to a merger proposal” in the current AOI
was meant to refer to a change in asset management company due to a merger. To
clarify this point, Ichigo Office proposes deleting the phrase “in response to amerger proposal” and explicitly stating that the Gains on Merger Performance Fee ispaid when the asset management company changes due to a merger.
2) Ichigo Office believes that the Gains on Merger Performance Fee, equal to 15% of
unrealized gains on real estate assets in the current AOI, is a reasonable level as anincentive for the asset management company to increase long-term shareholder
value. On the other hand, regarding Ichigo Office’s Merger Price, the price is notnecessarily readily evident. Therefore, to incorporate the above and clarify thecalculation basis, Ichigo Office proposes replacing Ichigo Office’s Merger Pricewith Merger Price as of the Merger Agreement Date, and redefining it as follows.
Merger Price as of the Merger Agreement Date is equal to (Net Assets Before
Deducting the Gains on Merger Performance Fee + Unrealized Gains on Real Estate
Assets - Unrealized Losses on Real Estate Assets) divided by Number of Shares
Outstanding as of the Merger Agreement Date, calculated based on a merger ratio
calculation report obtained during negotiations with the bidder.
Unrealized Gains per Share as of the Merger Agreement Date is equal to the above
minus Net Assets per Share as of the Merger Agreement Date, thus clarifying thatthe calculation is based on the unrealized gains of Ichigo Office’s real estate assets.
These calculations are based on the merger agreement date and not the date themerger becomes effective, because there is a time lag between the two. Although theasset value of the two merging Investment Corporations may fluctuate after theagreement date, shareholders will receive the value determined on the merger6agreement date, regardless of any subsequent changes. Because this fee is intended
to align the interests of shareholders and the asset management company, it is fair tocalculate the fee based on the unrealized gains at the time the merger ratio is
determined, which is the signing date.
3) Lastly, because the Gains on Merger Performance Fee is a fee relating to mergers, it
should be clear that a fee will not be paid unless a merger takes effect, but to further
clarify this point, Ichigo Office proposes specifying a merger taking effect as acondition for the payment of the fee. If the merger does not go through for any
reason, despite a signed merger agreement, this fee will not be paid.
Current
Attachments

After Amendment
Attachments

Asset Management Fee Structure

Asset Management Fee Structure

3. Gains on Merger Performance Fee

3. Gains on Merger Performance Fee

When the Investment Corporation merges
with another investment corporation, theGains on Merger Performance Fee shall becalculated by multiplying the merger price pershare minus net assets per share at the time of
the merger (as defined below) by the numberof shares outstanding and multiplying by
15%.

When the Investment Corporation merges
with another investment corporation, theGains on Merger Performance Fee shall becalculated by multiplying the merger price pershare calculated based on a merger ratio
calculation report obtained from a third-party
to be disclosed at the time of the merger
minus net assets per share at the time of themerger agreement (as defined below) by the
number of shares outstanding at the time of
the merger agreement and multiplying by
15%.

Gains on Merger Performance Fee = Gains per Gains on Merger Performance Fee = Gains per
Share (Merger Price – Net Assets per Share) * Share at the Time of the Merger Agreement
Number of Shares Outstanding * 15%(Merger Price at the Time of the Merger
Agreement – Net Assets per Share at the Timeof the Merger Agreement) * Number of Shares
Outstanding at the Time of the Merger
Agreement * 15%
However, where the Gains per Share at theTime of the Merger Agreement is negative, theGains on Merger Performance Fee shall be
zero.
The Gains on Merger Performance Fee arises The Gains on Merger Performance Fee arises
when the Investment Corporation merges with when the Investment Corporation merges withanother investment corporation either via aanother investment corporation either via a
new merged entity or absorption-type merger, new merged entity or absorption-type merger,
in response to a merger proposal from the(including both cases where the Investment
other investment corporation (including cases Corporation is the surviving entity or theboth where the Investment Corporation isextinguished entity in an absorption-typesurviving entity or the extinguished entity inmerger), and the asset management company
an absorption-type merger). “Net Assets perof the Investment Corporation at the time of
Share at the time of the merger” refers to net
the merger agreement does not continue toassets at the time the merger is approved atmanage the assets under management after thethe Shareholder Meeting divided by themerger.
number of shares outstanding at that time.
However, where the Gains per Share isnegative, the Gains on Merger PerformanceFee shall be zero.

7

Current

After Amendment

The Gains on Merger Performance Fee isbased upon the merger price, which is the(Deleted)
appraised value of the real estate assets of theInvestment Corporation used in thecalculation of the merger ratio at the time of
the merger. When the above (before deductionof the Gains on Merger Performance Fee)
exceeds the value of the real estate assets on
the Investment Corporation’s balance sheet atthe time of the merger, 15% of the excess
amount will be the fee to the AssetManagement Company. The calculation shallbe made with due consideration of such
purpose.
(New)The Merger Price at the Time of the Merger
Agreement is based upon the net assets
calculated based on a merger ratio calculation
report (before deduction of the Gains on
Merger Performance Fee), plus the unrealized
gains from real estate assets, minus unrealized
losses from real estate, divided by the numberof shares outstanding at the time of the merger
agreement.
Net Assets per Share at the Time of the
Merger Agreement is based upon the net
assets divided by the number of shares
outstanding at the time of the merger
agreement.
The Gains on Merger Performance Fee willarise when the merger agreement is signed,
contingent on the merger closing, and thepayment date shall be within one month of themerger date.

The Gains on Merger Performance Fee willarise on the date the merger is approved at theshareholder meeting, and the payment dateshall be within one month of the merger date.

(4) Proposal 4: Amendment to the Articles of Incorporation (Amend Gains on REITTOB Sale Performance Fee)
Fees paid to Ichigo Office’s asset management company have been determined based on
the philosophy that fees are compensation for improving value per share, and thisapplies to the Gains on REIT TOB Sale Performance Fee approved and introduced atthe 2020 Shareholder Meeting. If the asset management company changes due to a
TOB, the Gains on REIT TOB Sale Performance Fee is paid in line with thecontribution made by the asset management company to improving value per share up
to the TOB date, or specifically, the unrealized gains of Ichigo Office’s real estate assets
per share as of the TOB date. If there are unrealized losses, no fees are paid. Acquiring
real estate assets at the lowest possible price and executing value-add actions to realize
the assets’ full potential are what drive shareholder value. The Gains on REIT TOB Sale
8

Performance Fee incentivizes the asset management company to grow long-term value
per share and aligns the asset management company’s activities with shareholder value.
Berkeley Global claims that the Gains on REIT TOB Sale Performance Fee isunreasonable because it “lacks any connection” to the provision of services by the asset
management company (that is, the asset management company does not provide
services during the tender offer) and because Ichigo Office and the asset managementcompany are not parties to the tender offer (reference: Proposal 11). However, the Gainson REIT TOB Sale Performance Fee is not intended to compensate for the provision ofservices at the time of the TOB, but rather to create incentives for the asset managementcompany to maximize long-term shareholder value and share price returns. It is not a
takeover defense mechanism, but instead encourages the asset management company tofocus on building long-term shareholder value regardless of any potential TOB.
Given the above, Ichigo Office believes the concept underlying the Gains on REIT TOB
Sale Performance Fee should be maintained. In order to clarify the details regarding theGains on REIT TOB Sale Performance Fee under the current AOI, Ichigo Officeproposes the following changes.
1) Similar to the Gains on Merger Performance Fee, the Gains on REIT TOB Sale
Performance Fee is only paid when there is a change in asset management company
as a result of a TOB. Based on the concept of compensating for increases in value
per share, it is appropriate to compensate the asset management company for longterm increases in Ichigo Office’s shareholder value if there is a change in asset
management company as a result of a TOB. However, if the TOB involves only apartial takeover of Ichigo Office’s shares, and the existing relationship with the asset
management company is maintained after the TOB, the asset management company
would continue to have opportunities to increase shareholder value after the TOB.
The Gains on REIT TOB Sale Performance Fee will be paid only if part of or all of
Ichigo Office’s shares are purchased as part of the TOB, and as of the TOB date, theasset management company is no longer Ichigo Office’s asset managementcompany.
2) Considering the possibility of a squeeze-out by the bidder after a TOB, if a squeezeout is implemented, the shares subject to the squeeze-out are included in thecalculation of additional compensation, and the additional compensation occurs asof the date the squeeze-out is completed.
Current
Attachments

After Amendment
Attachments

Asset Management Fee Structure

Asset Management Fee Structure

4. Gains on REIT TOB Sale Performance Fee

4. Gains on REIT TOB Sale Performance Fee

When the Investment Corporation is acquiredby a third party via a TOB, the Gains on REITTOB Sale Performance Fee shall becalculated by multiplying the TOB price pershare minus net assets per share at the time of
the TOB by the number of shares purchasedby the third-party via the TOB andmultiplying by 15%.

When the Investment Corporation is acquiredby a third party via a TOB, the Gains on REITTOB Sale Performance Fee shall becalculated by multiplying the TOB price pershare minus net assets per share at the time of
the TOB by the number of shares purchasedby the third-party via the TOB (however, if asqueeze-out of minority shareholders is to be
initiated after the TOB, then the shares to besqueezed out are to be included) andmultiplying by 15%.

9

Current

After Amendment

Gains on REIT TOB Sale Performance Fee =Gains per Share (TOB Price – Net Assets per
Share) * Number of Shares Purchased in TOB* 15%

Gains on REIT TOB Sale Performance Fee =Gains per Share (TOB Price – Net Assets per
Share) * Number of Shares Purchased in TOB* 15%

However, where the Gains per Share isnegative, the Gains on REIT TOB Sale
Performance Fee shall be zero.

However, where the Gains per Share isnegative, the Gains on REIT TOB Sale
Performance Fee shall be zero.

The Gains on REIT TOB Sale Performance
Fee arises when the Investment Corporation’sshares are acquired by a third party via a
TOB. “Net Assets per Share at the time of theacquisition” refers to net assets at the time theacquisition is approved at the Shareholder
Meeting divided by the number of shares
outstanding at that time.

The Gains on REIT TOB Sale Performance
Fee arises when the Investment Corporation’sshares are acquired by a third party other thanthe current asset management company of theInvestment Corporation via a TOB, and theasset management company is to change after
the TOB. “Net Assets per Share at the time of
the acquisition” refers to net assets at the time
the acquisition (before deduction of the Gainson REIT TOB Sale Performance Fee) is
approved at the Shareholder Meeting divided
by the number of shares outstanding at thattime.

In addition, the purpose of the Gains on REITTOB Sale Performance Fee is to reward theasset management company, if the Investment
Company is to be acquired, with an amountequivalent to 15% of the excess amount of thetotal appraisal value of real estate assets of theInvestment Corporation (before deduction of
the Gains on REIT TOB Sale PerformanceFee) used as the basis for calculating the TOB
share price versus the total book value of thereal estate assets. The calculation shall bemade with due consideration of such purpose.

The Gains on REIT TOB Sale Performance
Fee will arise when the current asset
management company loses its position as theasset management company of the Investment
Corporation the end of the TOB shareacquisition period. (However, if squeeze-outtransactions are scheduled, the portion of theperformance fee at the time of acquisition that
corresponds to the squeezed-out shares will
be calculated at the time of completion of thesqueeze-out transaction.) The payment dateshall be within one month from time when thecurrent asset management company loses its
The Gains on REIT TOB Sale Performance
position as the asset management company of
Fee will arise on the date the acquisition is
the Investment Corporation after the last day
approved at the shareholder meeting, and theof the tender offer period. (However, thepayment date shall be within one month of the payment date for the portion of the Gains on
acquisition date.
REIT TOB Sale Performance Fee that
corresponds to the squeezed-out shares will
be at the time of completion of the squeezeout transaction.)(5) Proposal 5: Appointment of Mr. Takafumi Kagiyama as Executive Director
Berkeley Global claims there are issues with Ichigo Office’s current asset management
fee structure that undermine shareholder value and proposes the appointment of a new
Executive Director and Supervisory Director with the expertise and experience tonegotiate with the asset management company. As stated in the rationales for Proposals
1 through 4 above, Ichigo Office believes that its current asset management fee structure
is appropriate and that maintaining this fee structure will help differentiate it from other10

J-REITs and contribute to growing shareholder value.
On the other hand, because Ichigo Office’s asset management fee structure is a first in
the J-REIT market, Ichigo Office believes that, as it strives to grow shareholder value, it
must constantly be re-examined and requires ongoing efforts to gain understanding fromshareholders.
Ichigo Office takes very seriously the fact that it has received shareholder proposals
regarding its asset management fee structure, and plans to further strengthen the
supervisory and monitoring functions of Ichigo Office’s Board of Directors through theadditional knowledge and experience of a new Executive Director and Supervisory
Director. Ichigo Office is determined to build a structure that will continue creating
shareholder value via proactively engaging in shareholder-aligned asset management
activities under the revised asset management fee structure based on Proposals 1 to 4.
Ichigo Office is therefore proposing the nomination as Executive Director of Mr.
Takafumi Kagiyama, a real estate and finance expert who fully comprehends Ichigo
Office’s no fixed fee, performance-fee only structure.
To this end, Ichigo Office is nominating Mr. Kagiyama as an Executive Director. Mr.
Kagiyama is a global management professional with extensive experience andknowledge of capital markets in and outside Japan. Considering his deep understandingof capital markets, corporate finance, asset management, ESG, and compliance, Ichigo
Office expects that he will excel as an Executive Director to maximize shareholder
value.
In particular, with his deep understanding of investor needs and the investment business,excellent communication skills, and native-level English, Ichigo Office expects Mr.
Kagiyama to communicate directly with both Japanese and global investors who hold alarge portion of Ichigo Office shares. Ichigo Office expects that he will fulfill the
responsibilities as an Executive Director by understanding and responding to investors’
needs.
Ichigo Office believes that the appointment of Mr. Kagiyama as an Executive Director
will greatly contribute to attracting investments from high-quality, long-term investors
who expect the implementation of global best practices.
Fiduciary duty in real estate investment trusts requires one to gain shareholders’confidence and pursue top-class investment returns. Ichigo Office is proposing theelection of Mr. Kagiyama as Executive Director to maintain and grow Ichigo Office’s
investment returns and further focus on ESG.
Under this proposal, pursuant to Article 19, Clause 3 of the AOI, the term of an Executive
Director ends with the end of the term of the current Executive Director, and the term of
the Executive Director ends at the end of the shareholder meeting held pursuant to Article
9, Clause 2 of the AOI after the Executive Director has been appointed.
This proposal is submitted based on approval by all Directors at the Board of Directors
Meeting held on May 25, 2023.
The candidate’s career history is as follows.

11TitleName(Date of Birth)

Career Summary, Positions, Responsibilities, andImportant Concurrent Positions
December 1981
August 1984
June 1985
May 1990
June 1994
May 1996
June 1998
January 2001
January 2003

Executive
Director(Candidate)(New)

Takafumi Kagiyama(April 17, 1956)

October 2005
April 2006
May 2010

April 2011

April 2020
August 2021

Arthur Andersen and Company
Certified Public Accountant (California)
Kumagai Gumi Co., Ltd., North America
BranchBarings Securities Japan Ltd., Tokyo
BranchLehman Brothers Japan Inc., Tokyo
Branch
D.E. Shaw Securities, Tokyo Branch
Chief Operating Officer, Morgan Stanley
Japan Limited, Tokyo BranchManaging Director, Morgan Stanley Japan
Limited, Tokyo Branch
Head of Sales, Equity Group, Morgan
Stanley Japan Limited
Head of Equity Group, Morgan Stanley
Japan Limited
Representative Director, Morgan Stanley
Japan Limited, Tokyo Branch
Executive Officer, Deputy Head ofOperations Division (Special
Assignment), Mitsubishi UFJ Morgan
Stanley Securities Co., Ltd. (secondment)
Executive Officer, Deputy Head ofOperation Management, Sales, &Corporate Divisions (special assignment),
Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (secondment)
End of secondment at Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.
Statutory Auditor (Non-Executive), UBS
SuMi TRUST Wealth Management Co.,
Ltd. (current)

The above Executive Director candidate does not have Ichigo Office shares and is not a related
party of Ichigo Office.

12

(6) Proposal 6: Appointment of Mr. Yuji Maruo as Supervisory Director
Similar to the rationale for Proposal 5, Ichigo Office proposes the appointment of a new
Supervisory Director, Mr. Yuji Maruo.
Mr. Yuji Maruo has long been engaged in the development, sales, and leasing of midsize buildings, Ichigo Office’s main real estate category. He is a real estate management
professional with extensive experience and knowledge of the real estate market andpractices.
For over a decade, Mr. Maruo has focused on the energy efficiency of buildings andextending the useful life of buildings. He has researched technologies for building
highly energy-efficient properties with a focus on high insulation performance. His
track record in developing buildings that satisfy both economic efficiency and comfort
has often received media attention. Ichigo Office believes that his track record is alignedwith Ichigo Office’s investment policy, focus on ESG, and growth strategy.
Furthermore, Mr. Maruo’s extensive management experience at listed companies and asa real estate consultant for individual investors after establishing his own business is
expected to contribute greatly to Ichigo Office’s asset management, compliance, andrisk management.
Ichigo Office proposes the appointment of Mr. Maruo as a new Supervisory Director
because his multifaceted view as a real estate professional backed by his extensive
experience will enhance Ichigo Office’s monitoring functions and contribute tomaximizing shareholder value.
Under this proposal, pursuant to Article 19, Clause 3 of the AOI, the term of an
Executive Director ends with the end of the term of the current Executive Director, andthe term of the Executive Director ends at the end of the shareholder meeting held
pursuant to Article 9, Clause 2 of the AOI after the Executive Director has been
appointed.
The candidate’s career history is as follows.

13TitleName(Date of Birth)Supervisory
Director(Candidate)(New)Yuji Maruo(August 21, 1971)

Career Summary, Positions, Responsibilities, andImportant Concurrent Positions
April 1994
Fujita Corporation
October 2002 Meiho Enterprise Co., Ltd.
Executive Officer, Head of Shellze
August 2006
Group 1, Meiho Enterprise Co., Ltd.
Executive Officer, Deputy Head ofApril 2007
Shellze Division and Head of ShellzeGroup 1, Meiho Enterprise Co., Ltd.
Executive Managing Officer, Deputy
August 2007
Head of Shellze Division and Head of
Shellze Group, Meiho Enterprise Co.,
Ltd.
Executive Officer, Head of Shellze
August 2008
Group, Meiho Enterprise Co., Ltd.
October 2008 Director & Executive Officer, Head of
Shellze Group, Meiho Enterprise Co.,Ltd.
February 2009 Director & Executive Officer, Head of
Shellze Group and Head of Shellze
Sales Group, Meiho Enterprise Co.,Ltd.
Director & Executive Officer, Head ofNovemberSales and Head of Business
2009
Development, Meiho Enterprise Co.,Ltd.
Director & Executive Managing
November
Officer, Head of Sales and Head of
2010
Business Development, Meiho
Enterprise Co., Ltd.
Executive Officer, Saint Clair Co., Ltd.
March 2012
October 2014 Representative Director, Equity
Partners Co., Ltd. (current)
Senior Managing Director, Saint Clair
June 2015
Co., Ltd.
Representative Director, Equity
June 2018
Partners Co., Ltd. (current)

The above Supervisory Director candidate does not have Ichigo Office shares and is nota related party of Ichigo Office.

14

(7) Proposal 7: Amendment to the Articles of Incorporation (Reduce upper limit on
Director compensation and add Director compensation shareholder approvalrequirement)
Ichigo Office proposes the following changes and addition to Article 20 of the Articles
of Incorporation.
Director compensation is very important for shareholders. In order to ensure thetransparency and objectivity of Director compensation, Ichigo Office proposes that
Director compensation be determined by Shareholder Meeting approval rather than by
Ichigo Office’s Board of Directors.
Ichigo Office also proposes reducing the upper compensation limits for Executive
Directors and Supervisory Directors by 10% to JPY 720,000 per month for Executive
Directors and JPY 450,000 per month for Supervisory Directors.
Under the above proposal, Director compensation will become a shareholder-oriented
decision process, and shareholders will have the right to determine and approve Director
compensation at Shareholder Meetings, taking into account general price and wage
trends, as well as Ichigo Office’s performance. Ichigo Office believes that the postamendment upper compensation limits are appropriate, taking into account the duties
expected of Directors. Because there are existing Directors as of today, Ichigo Officeproposes the amendment take effect after the next General Shareholder Meeting.
If these amendments are approved, Ichigo Office will make a compensation proposal
based on the amendments at the next General Shareholder Meeting.
Current

After Amendment

Article 20

Article 20

Payment Standards for Compensation of
Directors

Payment Standards for Compensation of
Directors

The payment standards and timing of payment The payment standards and timing of payment
for Directors of the Investment Corporation
for Directors of the Investment Corporation
shall be as follows.
shall be as follows.
(1) Compensation for each Executive Director
shall be an amount determined by the Boardof Directors as a reasonable amount in light ofgeneral price trends, wage trends, etc., andlimited to a maximum of JPY 800,000 per
month. Remuneration for the current monthshall be paid by the end of the current montheach month.
In addition, if an Executive Director loses
his/her position as an Executive Director due
to a merger or other organizational
restructuring before the expiration of his/herterm of office, and the Executive Director
does not assume an equivalent position after
the reorganization, the total amount ofmonthly compensation that was scheduled tobe paid to the Executive Director duringhis/her two-year term of office, and thedifference between the total amount ofcompensation actually paid by the Investment
15(1) Compensation for each Executive Director
shall be an amount determined by
Shareholder Meeting approval as a reasonableamount in light of general price trends, wage
trends, etc., and limited to a maximum of JPY
720,000 per month. Remuneration for thecurrent month shall be paid by the end of thecurrent month each month.
In addition, if an Executive Director loses
his/her position as an Executive Director due
to a merger or other organizational
restructuring before the expiration of his/herterm of office, and the Executive Director
does not assume an equivalent position after
the reorganization, the total amount ofmonthly compensation that was scheduled tobe paid to the Executive Director duringhis/her two-year term of office, and thedifference between the total amount ofcompensation actually paid by the Investment

Current
Corporation will be paid as retirement
benefits.
However, this shall not apply in the event that
the Executive Director is dismissed for thereason that he/she is unable to perform his/herduties in accordance with laws andregulations.

After Amendment
Corporation will be paid as retirement
benefits.
However, this shall not apply in the event that
the Executive Director is dismissed for thereason that he/she is unable to perform his/herduties in accordance with laws andregulations.

(2) Compensation for each Supervisory
Director shall be an amount determined by the
Board of Directors as a reasonable amount inlight of general price trends, wage trends, etc.,
and limited to a maximum of JPY 500,000 per
month. Compensation for the current monthshall be paid by the end of the current montheach month.
In addition, if a Supervisory Director loses
his/her position as a Supervisory Director due
to a merger or other organizational
restructuring before the expiration of his/herterm of office, and the Supervisory Director
does not assume an equivalent position after
the reorganization, the total amount ofmonthly compensation that was scheduled tobe paid to the Supervisory Director duringhis/her two-year term of office, and thedifference between the total amount ofcompensation actually paid by the Investment
Corporation will be paid as retirement
benefits.

(2) Compensation for each Supervisory
Director shall be an amount determined by
Shareholder Meeting approval as a reasonableamount in light of general price trends, wage
trends, etc., and limited to a maximum of JPY
450,000 per month. Compensation for thecurrent month shall be paid by the end of thecurrent month each month.
In addition, if a Supervisory Director loses
his/her position as a Supervisory Director due
to a merger or other organizational
restructuring before the expiration of his/herterm of office, and the Supervisory Director
does not assume an equivalent position after
the reorganization, the total amount ofmonthly compensation that was scheduled tobe paid to the Supervisory Director duringhis/her two-year term of office, and thedifference between the total amount ofcompensation actually paid by the Investment
Corporation will be paid as retirement
benefits.

However, this shall not apply in the event that
the Supervisory Director is dismissed for thereason that he/she is unable to perform his/herduties in accordance with laws andregulations.

However, this shall not apply in the event that
the Supervisory Director is dismissed for thereason that he/she is unable to perform his/herduties in accordance with laws andregulations.

(New)(Supplementary Provision)
Changes to Article 20 shall take effect from thedate of the General Shareholders Meeting to beheld following the Extraordinary Shareholders
Meeting scheduled for June 2023 (hereinafterreferred to as the “next General Shareholders
Meeting”). This supplementary provision will
be deleted on the day of the next General
Shareholders Meeting.

16

(8) Proposal 8: Amendment to the Articles of Incorporation (Introduce upper limit on
number of Directors)
If the proposals to appoint two new Directors are approved at the EGM, the number ofofficers will increase. Ichigo Office should avoid having an excessive number of
Directors for a long period of time, and therefore proposes to limit the maximum
number of Directors to five from the next General Shareholder Meeting.
Current

After Amendment

Article 18

Article 18

Number of Directors and Composition of theBoard of Directors

Number of Directors and Composition of theBoard of Directors

The Investment Corporation shall have atleast one Executive Director and at least two
Supervisory Directors (however, the numberof Supervisory Directors shall be the number
of Executive Directors plus at least one). The
Board of Directors is comprised of all
Executive Directors and Supervisory
Directors.
(New)

The Investment Corporation shall have atleast one Executive Director and at least two
Supervisory Directors (however, the numberof Supervisory Directors shall be the number
of Executive Directors plus at least one). The
Board of Directors is comprised of all
Executive Directors and Supervisory
Directors, and is limited to no more than five
Directors.

(New)(Supplementary Provision 2)
Changes to Article 18 shall take effect from thedate of the General Shareholders Meeting to beheld following the Extraordinary Shareholders
Meeting scheduled for June 2023 (hereinafterreferred to as the “next General Shareholders
Meeting”). This supplementary provision will
be deleted on the day of the next General
Shareholders Meeting.

3. Berkeley Global Proposals
The following descriptions and rationale for Proposals 9 to 14 are from Berkeley
Global’s shareholder proposals received on March 17, 2023. (English translation
provided by Berkeley Global)
Proposal 9: Partial amendments to the Articles of Incorporation (regarding change in therate of NOI & Dividend Performance Fee)
[Summary of Proposal]
In Paragraph 1 “NOI & Dividend Performance Fee” of Exhibit “AM fees for AssetManagement Company” of the Articles of Incorporation of IOR, to change the reference
to “0.0054%” to “0.0036%”.
[Reason for Proposal]
At the unitholders’ meeting held in July 2020 (the “2020 Unitholders’ Meeting”), IOR
completely changed its AM fee structure (the “AM Fees Change”) and adopted a new
AM fee structure consisting of “NOI & Dividend Performance Fee”, “Gains on Sale
Performance Fee”, “Gains on Merger Performance Fee” and “Gains on REIT TOB Sale
Performance Fee” (the AM fee structure before the AM Fees Change and after the AM
Fees Change shall be hereinafter referred to as the “Old AM Fee Structure” and the17

“New AM Fee Structure”, respectively).
However, in respect of the amendments proposed in “(1) Partial amendments to the
Articles of Incorporation (regarding change in the rate of NOI & Dividend PerformanceFee)”, “(2) Partial amendments to the Articles of Incorporation (regarding abolition of
Gains on Sale Performance Fee, and adoption of Asset Acquisition Fee and Asset SaleFee)” and “(3) Partial amendments to the Articles of Incorporation (regarding abolitionof Gains on Merger Performance Fee and Gains on REIT TOB Sale Performance Fee,and adoption of Merger Fee)” below, the New AM Fee Structure does not contribute to
an increase in the IOR unitholders’ value.
Furthermore, as stated in item a. of “Reason for Proposal” under “(4) Appointment of
Mr. Toru Sugihara as an executive director” below, the Claimant believes that thedisclosure made by IOR upon the introduction of the New AM Fee Structure wasmisleading to unitholders and did not help unitholders to properly understand the levelof fees that IOR would have to pay if the New AM Fee Structure was introduced.
While the details are as described in items a. to c. below, the “NOI & Dividend
Performance Fee” regarding which the Claimant proposes a change in the fee rate
through this proposal is of a significantly high level. In a situation where the external
growth of IOR has been significantly stagnant, payment of such expensive AM fees is
not only inappropriate in itself but also a factor that may hinder the external growth of
IOR. Therefore, the Claimant considers that it is necessary to change the rate of “NOI &Dividend Performance Fee” in order to reduce it to an appropriate level and thereby
create an environment that facilitates IOR’s external growth.
a. The external growth of IOR is stagnant
IOR has not achieved any external growth accompanying public offerings for sevenyears since the last public offering in May 2016. There are only three listed J-REITs
including IOR that have not achieved external growth accompanying public offerings
since May 2016, among which one listed J-REIT has conducted merger. The external
growth of IOR has been significantly stagnant also in comparison with other listed JREITs.
b. AM fees are of a significantly high level
Regardless of the situation described in item a. above, according to the Claimant’s
calculation, the ratio to total assets of the AM fees IOR pays to its asset managementcompany, Ichigo Investment Advisors (the “Asset Management Company”), is about
0.78%, which is the average of the amount calculated by multiplying the amount of the
AM fees stated in the profit and loss statements of the most recent four fiscal periods up
to the end of October 2022 by 2 and dividing by the total assets as of the end of eachperiod. The ratio to NOI of the said AM fees is about 15.7%, which is the average of theamount calculated by dividing the amount of the AM fees stated in the profit and loss
statements of the most recent four fiscal periods up to the end of October 2022 by the
NOI of each period. These are clearly of a higher level than the average among otherlisted J-REITs of the ratio of AM fees to total assets of about 0.46% and the averageamong other listed J-REITs of the ratio of AM fees to NOI of about 10.2%. For bothratios, the amount of the AM fees for the most recent two fiscal periods are used forrecently listed J-REITs. The ratio of the said AM fees to total assets is the highest
among 60 listed J-REITs.
c. Change in the rate of “NOI & Dividend Performance Fee” leads to optimization of
the amount of fees and securing of opportunities for external growth18In a situation where external growth has not been achieved for a long time, the payment
to the Asset Management Company of expensive AM fees that are significantly higher
than the average of listed J-REITs cannot possibly be justified in itself. In addition, fromthe perspective that expensive AM fees may cause a decline in investment unit prices
and become a factor that creates an environment where it is difficult to conduct a public
offering, the Claimant must say that such expensive AM fees are inappropriate.
Under the current fee structure of IOR, unless events such as a transfer of property or amerger occur, AM fees are mostly “NOI & Dividend Performance Fee”. The Claimant
is of the view that the high rate of “NOI & Dividend Performance Fee” is the maincause of AM fees becoming expensive. Therefore, the Claimant considers that it isnecessary and appropriate for all unitholders that the amount of the AM fee be
optimized by reducing the rate of “NOI & Dividend Performance Fee”, and that IOR by
itself creates an environment that facilities external growth by securing distribution
sources and creating upward pressure on investment unit prices through such reductionof fee rate. According to the Claimant’s calculation based on the financial statements of
IOR for the fiscal period ended October 2022, if the rate of “NOI & Dividend
Performance Fee” was reduced from 0.0054% to 0.0036%, the distribution source
would increase by about 239 million yen. Assuming that all such distribution sources
are distributed as dividends, which the Claimant believes is a realistic assumption inlight of the dividend payout ratio of IOR since a reduction in AM fees leads directly to
an increase in the profit of an investment corporation, the dividends for the fiscal period
ended October 2022 would have been increased by about 158 yen per investment unit.
Ichigo Office’s Position on Proposal 9
Ichigo Office believes that Proposal 9 does not contribute to shareholder value, andopposes Proposal 9.
Ichigo Office differentiates itself from other listed J-REITs by acquiring assets withhigh value-add potential, with IIA leveraging sponsor Ichigo’s know-how and value-add
capabilities to drive asset value. Ichigo Office’s portfolio of older mid-size offices withhigh liquidity requires greater asset management services, and Ichigo Office believes
that paying IIA an appropriate asset management fee to maintain and improve their highquality asset management services is critical to maximizing shareholder value.
Although we believe it is important for the asset management company to improve its
operational efficiency and pass along those savings over time as a reduction in the fee
rate, decreasing the rate excessively would compromise the soundness of the asset
management company and hinder their ability to maintain high quality services, hurting
shareholder value.
In order to maximize long-term shareholder value, it is necessary to set a rate thatbalances shareholder returns with appropriate incentives for the asset managementcompany. Therefore, Ichigo Office believes that its proposals under Proposal 1 areappropriate.

19

Proposal 10: Partial amendments to the Articles of Incorporation (regarding abolition of
Gains on Sale Performance Fee, and adoption of Asset Acquisition Fee and Asset Sale
Fee)
[Summary of Proposal]
To change Exhibit “AM Fees for Asset Management Company” to the Articles ofIncorporation of IOR as follows:a. To delete Paragraph 2 “Gains on Sale Performance Fee”; andb. To add the following provisions as Paragraphs 2 and 3:“2. Asset Acquisition Fee
When IOR acquires real estate or real estate-backed securities among specific assets,
except for succession as a result of a merger, an Asset Acquisition Fee shall becalculated by multiplying its purchase price by a rate separately agreed with the AssetManagement Company but not higher than 0.5%; provided, however, that in the case of
the acquisition of a specific asset from a related party as defined in the regulations ontransactions with related parties of the Asset Management Company, it shall becalculated by multiplying its purchase price of by a rate separately agreed with the AssetManagement Company but not higher than 0.25%.
Payment shall be made within one (1) month from the end of the month in which IOR
acquires the relevant asset (being, in other words, the month in which the transfer of theownership and any other rights in respect of the relevant asset takes effect).
3. Asset Sale Fee
When IOR sells real estate or real estate-backed securities among specific assets, an
Asset Sale Fee shall be calculated by multiplying its sale price by a rate separately
agreed with the Asset Management Company but not higher than 0.5%; provided,
however, that in the case of sale of a specific asset to a related party as defined in theregulations on transactions with related parties of the Asset Management Company, it
shall be calculated by multiplying its sale price by a rate separately agreed with theAsset Management Company but not higher than 0.25%.
Payment shall be made within one (1) month from the end of the month in which therelevant asset is sold (being, in other words, the month in which the transfer of theownership and any other rights on the relevant asset takes effect).”[Reason for Proposal]
As detailed in items a. through c. below, the “Gains on Sale Performance Fee” is set at
15%, which is an extremely high rate, and in the event of an occurrence of a gain on thesale of assets, which is in principle obtained by deducting the asset’s book value fromits sale price, IOR will have to bear extremely high fees. In addition, if a gain on thesale of assets occurs for IOR, the “NOI & Dividend Performance Fee” will also be
increased. As a result, IOR will have to bear two burdens: the accrual of the “Gains on
Sale Performance Fee” and an increase in the “NOI & Dividend Performance Fee”.
Therefore, the Claimant believes that it is necessary to abolish the “Gains on Sale
Performance Fee” and newly adopt a standard asset acquisition fee and asset sale fee toalign with the prevailing fee structure for other listed J-REITs.
Furthermore, as stated in item a. of “Reason for Proposal” under “(4) Appointment of20

Mr. Toru Sugihara as an executive director” below, the Claimant believes that thedisclosure made by IOR upon the introduction of the New AM Fee Structure wasmisleading to unitholders and did not help unitholders to properly understand the levelof fees that IOR would have to pay if the New AM Fee Structure was introduced.
a. Sale of assets affects two types of fees of “Gains on Sale Performance Fee” and “NOI
& Dividend Performance Fee”
In the case where IOR sells its assets, resulting in a gain on the sale of assets, this will
result in an extremely high “Gains on Sale Performance Fee” which is 15% of the gainon the sale of assets as described in item b. below. In addition to this, the gain on thesale of assets will increase dividends per unit, and IOR will have to pay an “NOI &Dividend Performance Fee” which is increased by such increased dividends per unit.
This means that when IOR earns a gain on the sale of assets, it will have to pay to the
Asset Management Company two types of fees of the “Gains on Sale Performance Fee”
and an increased “NOI & Dividend Performance Fee”.
While the Claimant does not always consider that a fee structure is inappropriate solely
based on the fact that a single event affects two types of fees, the total amount of AM
fees is expected to be higher due to the effect on the two types of fees. Accordingly, theClaimant believes that it is necessary to carefully consider the rate of the “Gains on Sale
Performance Fee” when setting it. However, the Claimant suspects that such a carefulconsideration has not been made. In fact, while two other J-REITs adopt similar gains
on sale performance fees, only one of them has a fee structure under which a single
event affects two types of fees, as is the case for IOR.
b. Level of “Gains on Sale Performance Fee” is extremely highGains on a sale of assets owned by an investment corporation should be attributed to its
unitholders who originally bear risks associated with the owned assets. Hence, theClaimant considers that, in order for the AM fees paid to the Asset Management
Company when gains on a sale of assets have accrued to be considered fair, they must
be within a reasonable range as a fee for the relevant “services”. However, the “Gainson Sale Performance Fee” is calculated by multiplying gains on a sale of assets by 15%
and this significantly high rate makes the level of the “Gains on Sale Performance Fee”
extremely high. For example, IOR sold “Ichigo Akasaka 5-chome Building” in thefiscal period ended April 30, 2022, resulting in a gain on the sale of that asset of 940.11
million yen, of which approximately 140 million yen was paid to the Asset Management
Company as a “Gains on Sale Performance Fee”. In addition, IOR plans to sell “Ichigo
Ikenohata Building” in the fiscal period ending April 30, 2023, which will result in again on the sale of that asset of approximately 5,167 million yen, which is calculated by
dividing the gain on that sale of 4,392 million yen (net of the Gains on Sale
Performance Fee announced by IOR), by 85% (100 minus 15). Thus, IOR will pay
approximately 775 million yen (15% of 5,167 million yen above) as the “Gains on Sale
Performance Fee”.
c. Proposed AM Fee Structure
Despite the fact that careful consideration was necessary when setting the rate of the“Gains on Sale Performance Fee”, as described in item a. above, it is evident that the“Gains on Sale Performance Fee” is unreasonable in light of the facts that the level ofthe “Gains on Sale Performance Fee” is set so high that even the “Gains on Sale
Performance Fee” alone is unreasonable, as described in item b. above, and that the“NOI & Dividend Performance Fee” is increased as a result of the accrual of a gain on21

the sale of assets.
As such, the Claimant hereby makes a proposal as described in the “Outline of
Proposal” above as the Claimant believes that it is necessary to abolish the “Gains on
Sale Performance Fee” and set a well-balanced level of fees consisting of the “NOI &Dividend Performance Fee” as a performance-linked fee, and the “Asset Acquisition
Fee” and the “Asset Sale Fee” as fees for the services provided by the AssetManagement Company in relation to acquisition and sale of properties.
Ichigo Office’s Position on Proposal 10
Ichigo Office believes that Proposal 10 does not contribute to shareholder value, andopposes Proposal 10.
Ichigo Office believes that an asset management fee structure that links asset
management fees with Ichigo Office’s shareholder profits, not a fee structure whereasset management fees are linked to buy and sell transactions regardless of profitability,
is aligned with shareholder objectives of maximizing the dividend and shareholder
value.
Introducing an asset management fee structure where compensation is linked to buy andsell transactions regardless of profitability, as proposed under Proposal 10, creates
incentives for the asset management company to transact assets regardless of whether
they can increase those assets’ value. Considering that Ichigo Office’s strategy is toacquire properties with a high potential for value enhancement while leveraging thespecialized know-how and real estate value-add capabilities of its sponsor Ichigo, a fee
structure such as this would be inconsistent with our strategy.
Ichigo Office’s proposals under Proposal 2 maintain the linkage between asset
management fees and shareholder profits and prevents the asset management fee
amount from being excessive.
Proposal 11: Partial amendments to the Articles of Incorporation (regarding abolition of
Gains on Merger Performance Fee and Gains on REIT TOB Sale Performance Fee, andadoption of Merger Fee)
[Summary of Proposal]
To change Exhibit “AM Fees for Asset Management Company” to the Articles ofIncorporation of IOR as follows:a. To delete Paragraph 3 “Gains on Merger Performance Fee” and Paragraph 4 “Gainson REIT TOB Sale Performance Fee”; andb. To add the following provision as Paragraph 4:“4. Merger Fee
If, in the course of a consolidation-type merger or an absorption-type merger, regardlessof whether IOR will be a surviving corporation or a dissolving corporation, (hereinaftercollectively referred to as a “Merger” or “Merge”) executed by IOR, the AssetManagement Company investigates and evaluates the assets held by the counterparty to
the Merger, performs other services related to the Merger, and the Merger comes into
effect, the Merger Fee shall be calculated by multiplying the appraised value at the timeof the Merger (hereinafter referred to as an “Appraised Value”) of the real estate or thereal estate-backed securities held by the counterparty which will be taken over or heldby the new corporation incorporated in the incorporation-type merger or the corporation22

surviving the absorption-type merger, by a rate separately agreed with the AssetManagement Company but not higher than 0.5%; provided, however, that in the case ofa Merger with an investment corporation that falls under a related party as defined in theregulations on transactions with related parties of the Asset Management Company orwith an investment corporation which entrusts the management of its assets to a related
party, it shall be calculated by multiplying the Appraised Value by a rate separately
agreed with the Asset Management Company but not higher than 0.25%.
The date of payment shall be determined by separate negotiation between IOR and theAsset Management Company.”[Reason for Proposal]
As detailed in items a. through d. below, the “Gains on Merger Performance Fee” andthe “Gains on REIT TOB Sale Performance Fee” lack any connection with the services
provided by the Asset Management Company. In addition, while the amount of thesefees can be extremely high, their calculation methods are unclear and, as a result, thesefees are unreasonable and lack rationality as a constructive fee structure. Practically,
they have the effect of discouraging proposals that would contribute to increasing the
IOR unitholders’ value. Therefore, the Claimant believes that it is necessary to abolishthe “Gains on Merger Performance Fee” and the “Gains on REIT TOB Sale
Performance Fee” and to newly adopt the Merger Fee to align with the prevailing fee
structure for other listed J-REITs.
Furthermore, as stated in item a. of “Reason for Proposal” under “(4) Appointment of
Mr. Toru Sugihara as an executive director” below, the Claimant believes that thedisclosure made by IOR upon the introduction of the New AM Fee Structure wasmisleading to unitholders and did not help unitholders to properly understand the levelof fees that IOR would have to pay if the New AM Fee Structure was introduced.
a. “Gains on Merger Performance Fee” and “Gains on REIT TOB Sale PerformanceFee” are unreasonable and lack any connection with the services provided by the AssetManagement Company
The “Gains on REIT TOB Sale Performance Fee” is supposed to accrue wheninvestment units of IOR are acquired by a third party through a tender offer. However,in the first place, the Asset Management Company is not in a position to provide any
services in a tender offer for investment units of IOR. In addition, a tender offer is a saleand purchase transaction of investment units to be executed between a purchaser who
executes the tender offer and the unitholders who apply for the tender offer (in otherwords, who offer to sell their investment units in response to an offer to purchaseinvestment units related to the tender offer). As such, neither IOR nor the AssetManagement Company which are the parties to the asset management agreement will bea party to a tender offer.
The “Gains on Merger Performance Fee” is supposed to accrue only when IOR Merges
in response to a Merger proposal from another investment corporation, regardless ofwhether IOR survives the Merger or not. Thus, no fee should accrue when IOR
proposes a Merger. However, in the case of a Merger between investment corporations,various duties including due diligence with respect to the counterparty are required,regardless of whether IOR survives or dissolves in the Merger, in order for a merger
agreement to be concluded, and, in practice, such duties are generally performed by the
Asset Management Company for and on behalf of IOR which has no employees. Thismeans that when IOR intends to merge, the Asset Management Company will be
required to provide certain services regardless of which investment corporation23

proposes the Merger. Despite this, the “Gains on Merger Performance Fee” makes anextreme difference in fees to the Asset Management Company, which can be either zeroor an exorbitant amount (as detailed below) depending on which investment corporation
proposes the Merger. It can be said that it is an unreasonable fee structure and lacks any
connection with the services provided by the Asset Management Company.
Based on the above, given that the “Gains on Merger Performance Fee” and the “Gainson REIT TOB Sale Performance Fee” are unreasonable and lack rationality as aconstructive fee structure. They have the effect of discouraging mergers andacquisitions that would contribute to increasing the IOR unitholders’ value as describedin item b. below. Therefore, the Claimant cannot help but suspect that these fees wereintroduced with the aim to function as a de facto takeover defense measure.
b. Amount of “Gains on Merger Performance Fee” and “Gains on REIT TOB Sale
Performance Fee” can be exorbitant
As detailed in item c. below, there are some unclear parts in the calculation of the“Gains on Merger Performance Fee” and the “Gains on REIT TOB Sale PerformanceFee”. Nevertheless, the amount of these fees can be exorbitant even with such unclear
parts.
For example, when the Claimant calculates the “Gains on Merger Performance Fee” byusing the management indicators for the fiscal period ended October 31, 2022 disclosed
by IOR, provided that, for convenience, an investment unit price calculated based on amerger ratio was substituted with the NAV (Net Asset Value) per unit for the same
period, the amount of such fee upon a Merger is estimated to be approximately 6,735
million yen, which is equal to 15% of the amount multiplying the difference between an
investment unit price calculated based on a merger ratio, assuming that this is equal to
the NAV per unit for the fiscal period ended October 31, 2022, and the amount of the
net assets per unit as of the end of the fiscal period ended October 31, 2022 by the total
number of the issued and outstanding investment units as of the end of the fiscal period
ended October 31, 2022. Also, if it is calculated in accordance with the provision in the
Articles of Incorporation that “… when the total Appraised Value of real estate-related
assets of IOR (amount before deduction of the Gains on Merger Performance Fee)
exceeds the total book value of the said real estate-related assets at the time of themerger, the Gains on Merger Performance Fee shall be the amount equivalent to 15% of
the said excess amount”, the amount of such fee at the time of a Merger is estimated tobe approximately 7,202 million yen, which is equal to 15% of the difference between
the total Appraised Value of the real estate-related assets and the total book value of thereal estate-related assets. Furthermore, when the Claimant calculates the “Gains on
REIT TOB Sale Performance Fee” on the assumption that all of the investment units are
subject to such fee, it is estimated to be approximately 6,735 million yen which is equal
to 15% of the amount multiplying the difference between the TOB price, assuming that
this is equal to the NAV per unit for the fiscal period ended October 31, 2022, and theamount of the net assets per unit as of the end of the fiscal period ended October 31,
2022, by the total number of the issued and outstanding investment units as of the endof the fiscal period ended October 31, 2022, or approximately 7,202 million which isequal to 15% of the difference between the total Appraised Value of the real estaterelated assets and the total book value of the real estate-related assets.
Each amount of these fees is higher than double of the net income of IOR for the fiscal
period ended October 31, 2022, which was approximately 3,001 million yen and may
exceed the amount of cash and deposits held by IOR which was approximately 8,697
million yen as of the end of the fiscal period ended October 31, 2022, depending on theconsideration for a Merger or a tender offer price. Each amount is so exorbitant that24

IOR may have to consider selling its properties to pay these fees.
It is almost impossible to justify the fee structure that generates such an enormous
amount of fees for the services provided by the Asset Management Company. As statedin item a. above, there are no “services to be provided” by the Asset Management
Company in the case of a tender offer. Furthermore, assuming that such exorbitant fees
are indeed to be paid, proposals for Mergers or tender offers to IOR will be discouraged
even though such proposals are profitable for the unitholders. As such, these fees may
function as a de facto takeover defense measure that prevents mergers and acquisitions
that contribute to the enhancement of the IOR unitholders’ value, and the “Gains on
Merger Performance Fee” and the “Gains on REIT TOB Sale Performance Fee” areirrational also in this respect.
By way of comparison, a merger fee paid by other listed J-REITs that have been mergedin recent years was less than 1.0% of the Appraised Value of the assets to be taken overas a result of the mergers. If this were applied to a Merger between IOR and a J-REIT ofa similar asset size, the Merger Fee would be estimated to be approximately 2,000
million yen. The fee for a Merger and takeover of IOR is more than three times as muchas a normal merger fee even at the lowest estimate, and it is obviously abnormal.
c. “Gains on Merger Performance Fee” and “Gains on REIT TOB Sale PerformanceFee” have unclear parts in their calculation and timing of accrual, and do not align withpractical operation
According to the Articles of Incorporation of IOR, the “Gains on Merger PerformanceFee” is calculated by using the formula of “unrealized gains per unit at the time of a
Merger multiplied by the total number of issued and outstanding investment units
multiplied by 15%”. However, the Articles of Incorporation also stipulate that “it isintended that when IOR is to be Merged with another investment corporation, … when
the total Appraised Value of real estate-related assets of IOR (amount before deductionof Gains on Merger Performance Fee) exceeds the total book value of the real estaterelated assets at the time of the merger, the fees to the Asset Management Company
shall be the amount equivalent to 15% of such excess amount, and the amount of theGains on Merger Performance Fee shall be calculated by taking such intention into
consideration”. This stipulation seems to imply that the Articles of Incorporation assume
the application of a different formula other than the foregoing one in the case where
IOR will be a dissolving corporation. Nevertheless, the Articles of Incorporation do notdescribe how to “take such intention into consideration”, and it is unclear how to
calculate the Gains on Merger Performance Fee in the case where IOR will not survive
such Merger. As described in item b. above, it is extremely inappropriate that thecalculation formula is not clear although the amount of the Gains on Merger
Performance Fee is highly likely to be exorbitant. Therefore, such a fee system should
not be maintained.
Further, in order to calculate the “Gains on Merger Performance Fee” and the “Gains on
REIT TOB Sale Performance Fee,” it is necessary to calculate the amount of the net
assets of IOR at the time of a resolution to approve a merger agreement or at the end of
a tender offer period. However, as the amount of the net assets is normally calculated asof the end of a fiscal period, IOR may need to take procedures for preparing thefinancial statements and undergoing an audit in order to determine the amount of the net
assets at a different point of time. On the other hand, these fees are supposed to accrue
at such an early stage as at the time of a resolution to approve a merger agreement or at
the end of a tender offer period. As such, the Claimant has serious questions about
taking the above procedures at such a time to determine the amount of the net assets,
and executing a Merger or acquisition based on that amount, in light of the costs
25required for such actions.
Finally, the Articles of Incorporation of IOR stipulate that the Gains on Merger
Performance Fee shall “accrue when a resolution to approve a merger agreement is
adopted by a meeting of unitholders of IOR”. However, except for the case of a shortform merger, a Merger between investment corporations requires a resolution toapprove a merger agreement at a meeting of unitholders of the other investment
corporation that is a party to the merger agreement because the Merger will not be
closed until such resolution is made. Nevertheless, the provision of the Articles ofIncorporation of IOR states that the “Gains on Merger Performance Fee” shall accrue atthe end of a meeting of unitholders of IOR alone. This must have been drafted by aperson who has no knowledge of the practice of mergers, and such provision is,therefore, unreasonable.
This means that the “Gains on Merger Performance Fee” and the “Gains on REIT TOB
Sale Performance Fee” are unreasonable and difficult to calculate and apply under
specific circumstances in mergers or acquisitions. The Claimant cannot help but suspectthat they were adopted without any practical verification.
d. Proposed AM fee structure
As described in item a. above, the “Gains on Merger Performance Fee” and the “Gainson REIT TOB Sale Performance Fee” lack any connection with the services provided by
the Asset Management Company. In addition, while the amount can be extremely highas described in item b. above, their calculations are unclear as described in item c.
above and, as a result, these fees are unreasonable and lack rationale as a constructive
fee structure. Practically, they may function as a de facto takeover defense measure to
discourage proposals that would contribute to increasing the IOR unitholders’ value.
For these reasons, the Claimant hereby makes such a proposal as described above in the“Outline of Proposal” as the Claimant believes that it is necessary to abolish the “Gainson Merger Performance Fee” and the “Gains on REIT TOB Sale Performance Fee” andto adopt a Merger Fee to align with the prevailing fee structure for other listed J-REITs.
Ichigo Office’s Position on Proposal 11
Ichigo Office believes that Proposal 11 does not contribute to shareholder value, andopposes Proposal 11.
If there is a change in the asset management company due to a merger or TOB, Ichigo
Office believes the asset management company should be compensated for its long-term
efforts to increase share value by paying a Gains on Merger Performance Fee and Gainson REIT TOB Sale Performance Fee.
Proposal 11 eliminates the current Gains on Merger Performance Fee and Gains on
REIT TOB Sale Performance Fee, and proposes a fee structure that mechanically pays afee to the asset management company linked to asset size regardless of the asset
management company’s success in improving value per share and generating unrealized
gains. Under this fee structure, compensation grows with assets, regardless of any value
creation, thus creating little incentive for the asset management company to acquire
assets at the lowest possible price and to strive to realize the potential value of thoseassets. Furthermore, because an asset management fee will not be paid if there is achange in asset management company, the asset management company may bedisinclined to cooperate with the merger or TOB even if the offer would benefit Ichigo
Office’s shareholders.
26

Ichigo Office believes that its proposals under Proposals 3 and 4, which maintain thecurrent no fixed fee, performance fee-only fee structure that pays a reasonable fee inline with the asset management company’s contributions to improving shareholder
value until the date of the merger or TOB, and clarify the relevant sections of the
Articles of Incorporation, appropriately incentivize the asset management company.
Proposal 12: Appointment of Mr. Toru Sugihara as an executive director[Summary of Proposal]
To appoint the following candidate as an executive director:
Candidate:
Mr. Toru Sugihara (Date of Birth: May 19, 1968)<Profile and Major Concurrent Positions >Apr 1, 1991
Joined Nomura Securities Co. Ltd.
Oct 1, 2006
Joined Barclays Securities Japan Limited
Jul 1, 2012
Joined Kenedix, Inc.
Feb 1, 2015
Joined Star Asia Management Japan Limited, Tokyo Branch
Jun 22, 2015
Representative Director and General Manager of Finance Department,
Star Asia Investment Management Co. Ltd. (seconded)
Aug 20, 2015
Director and General Manager of Finance Department,
Star Asia Investment Management Co. Ltd.
Apr 26, 2019
Representative Member, Lion Partners Godo Kaisha
Aug 2019
Executive Director, Sakura Sogo REIT Investment Corporation
Aug 2020
Director and Vice President, Star Asia Investment Management Co.
Ltd.
(seconded)Feb 2023
Manager, Berkeley Global, LLC (Star Asia Group) (present)(Note 1)
As of March 17, 2023, the above candidate does not hold any investment units of IOR.
(Note 2)
The above candidate and IOR do not have any special relationship with each other.
[Reason for Proposal]
As described in each “Reason for Proposal” in sections “(1) Partial amendments to the
Articles of Incorporation (regarding change in the rate of NOI & Dividend PerformanceFee)” to “(3) Partial amendments to the Articles of Incorporation (regarding abolition of
Gains on Merger Performance Fee and Gains on REIT TOB Sale Performance Fee, andadoption of Merger Fee)” above, the New AM Fee Structure contains a large amount of
unreasonable and inappropriate details that are unlikely to contribute to the increase of
the IOR unitholders’ value. Furthermore, as described in item a. below, there wereserious problems in the way IOR disclosed information at the 2020 Unitholders’Meeting and how it subsequently handled the matter.
In addition, as described in item b. below, the answers by the Asset Management
Company when the Claimant proposed a review of the New AM Fee Structure were far
from sincere in terms of responses to our suggestions. Thus, the Claimant has had nochoice but to conclude that they totally disregard the unitholders’ interests.
The Claimant believes that this attitude of disregard for the unitholders’ interests by27

IOR and the Asset Management Company is due to the fact that the supervision of theAsset Management Company by IOR is not being conducted properly. In order tocorrect this, it is essential to strengthen the governance structure of IOR and strengthen
the supervision and oversight on the Asset Management Company. Therefore, as statedin c. below, the Claimant believes that Mr. Toru Sugihara, who has the proper
knowledge and experience to become an executive director of IOR, shall be appointed
as an executive director of IOR.
a. Problems found in the information disclosure made at the 2020 Unitholders’ Meetingand the subsequent handling of the matterIn the convocation notice of the 2020 Unitholders’ Meeting in connection with the AM
Fees Change, IOR explained that the New AM Fee Structure was intended to “further
improve the IOR unitholders’ value”. In addition, the press release of IOR titled “Noticeof Amendment to the Terms and Appointment of Directors” dated June 15, 2020, which
was disclosed prior to the 2020 Unitholders’ Meeting, compared the total AM fees forthe 5 years from the fiscal period ended October 2015 to the fiscal period ended April
2020 under the Old AM Fee Structure with the estimated total AM fees for the 5 years
from the fiscal period ended October 2015 to the fiscal period ended April 2020 under
the New AM Fee Structure, and included a bar graph showing that the total AM fees
would decrease by 4.2% under the New AM Fee Structure. In other words, the material
disclosed by IOR suggested that if IOR adopted the New AM Fee Structure, the total
amount of AM fees would decrease, leading to an increase of the IOR unitholders’value.
However, the Claimant’s calculation based on the material disclosed by IOR indicatesthat the actual result of the AM fees based on the New AM Fee Structure for the 4
periods from the fiscal period ended April 2021 to the fiscal period ended October 2022
after the AM Fees Change significantly exceeded the amount of the AM fees based on
the Old AM Fee Structure. For example, although the amount of the AM fees for the
fiscal period ended April 2021, which immediately followed the AM Fees Change,
would be approximately 752 million yen under the Old AM Fee Structure (assumingthat the maximum rate is applied; hereinafter the same), the actual result of the AM fees
was increased to 834 million yen under the New AM Fee Structure, which is an increaseof approximately 10.9%. Likewise, the amount for the following fiscal period ended
October 2021 would be approximately 785 million yen under the Old AM Fee
Structure, while the actual result of the AM fees was increased to 871 million yen under
the New AM Fee Structure, which is an increase of approximately 11.0%.
Although the cause of such difference in the total amount of the AM fees between under
the New AM Fee Structure and under the Old AM Fee Structure is not clear, given thefact that there is actually a significant difference between these amounts, it may beconsidered that IOR should have at least been able to fully acknowledge the possibilityof the increase in the total amount of AM fees at the time of the AM Fees Change.
Nevertheless, the material disclosed by IOR before the AM Fees Change indicated that
the AM fees would be reduced due to the AM Fee Change and stated that the IOR
unitholders’ value would increase. This description should be considered questionablefrom the perspective of the accountability of IOR to its unitholders.
Even more importantly, IOR and the Asset Management Company could easily
recognize the fact that the total amount of the AM fees under the New AM Fee Structure
had become larger than the amount calculated under the Old AM Fee Structure. If IOR
had intended to reduce the amount of the AM fees through the introduction of the New
AM Fee Structure as stated in the material disclosed at the 2020 Unitholders’ Meeting,it could have noticed that the actual result had increased by conducting a subsequent28

validation process after the introduction and corrected the situation by reducing the rate
at the unitholders’ meeting held in July 2022 so that there was no discrepancy with thematerial disclosed in July 2020. However, the New AM Fee Structure has not beenrevised to date. As such, there is a governance issue within IOR. Although IOR
implemented the AM Fees Change indicating that the AM fees would decrease, it has
never conducted a subsequent validation to see if the amount actually decreased.
Furthermore, as described in the “Reason for Proposal” in “(3) Partial amendments to
the Articles of Incorporation (regarding abolition of Gains on Merger Performance Feeand Gains on REIT TOB Sale Performance Fee, and adoption of Merger Fee)” above,the details of the “Gains on Merger Performance Fee” and the “Gains on REIT TOB
Sale Performance Fee” were extremely unreasonable and inappropriate and therefore,
the Claimant believes that IOR proposed them at the unitholders’ meeting without
conducting a practical validation based on the actual situations in which such fees were
to be paid.
b. IOR’s attitude of disregard for IOR unitholders’ value which became obvious throughits dialogue with the Claimant
The Claimant has requested IOR through the Asset Management Company to change
the New AM Fee Structure as proposed above since February 9, 2023. However, theClaimant received an answer on March 10, 2023 from the Asset Management Company,as excerpted below, stating that it could not accept the Claimant’s proposal:(Translation of excerpt from the Asset Management Company’s answer)“This AM fee structure, which is intended to change the AM fees into “entirely
performance-based fees” that are linked to the improvement of the unitholders’ value inorder to improve the IOR unitholders’ value, was approved with the support of a large
number of unitholders at the 12th unitholders’ meeting held on July 18, 2020, and has
been adopted for four fiscal periods since the fiscal period ended April 2021.
Considering the details of the AM fee structure which aligns the interests of theunitholders with those of the Asset Management Company, and the fact that it has been
approved by the unitholders as described above, the Asset Management Company
believes that, as the Asset Management Company has already explained, the AM fee
structure is appropriate. On the other hand, IOR also believes that it is important tocontinuously examine the AM fee structure from the perspective of improving the IOR
unitholders’ value.”(End of excerpt)
As described above, although the Claimant pointed out the fact that the fees under the
New AM Fee Structure were extremely high and there were further issues on the New
AM Fee Structure and the Asset Management Company received a proposal from theClaimant to change the New AM Fee Structure, the Asset Management Company did
not enter into a constructive dialogue with the Claimant to discuss and consider whichof the New AM Fee Structure, the current fee structure of IOR, and the fee structure
proposed by the Claimant was more appropriate. Instead, the Asset Management
Company referred only to the results of the voting at the 2020 Unitholders’ Meeting,rejecting the proposal of the Claimant in a desultory manner, thereby showing an
attitude of disregard for the IOR unitholders’ interests.

29

c. Mr. Toru Sugihara’s qualification as an executive director
As stated in items a. and b. above, it is considered that the governance system of IOR is
inadequate to realize the fundamental principle of increasing the unitholders’ value.
One of the reasons why these governance issues have not been resolved is that thecurrent executive director, who was a supervisory director at the time of the 2020
Unitholders’ Meeting, has no practical experience in the real estate industry or
experience in the asset management of investment corporations and is extremely busy
serving as the representative director of another company that provides consulting
services including accounting and taxation services, and thus is not fully engaged in his
duties as an executive director of IOR. Taking this into consideration, and in order toresolve such governance issues, the Claimant believes it is critical to appoint not only asupervisory director but also an executive director from outside the corporation, havethe executive directors appropriately negotiate with the Asset Management Company on
the AM fees from the viewpoint of protecting the IOR unitholders’ interests, and haveboth of the executive director and the supervisory director monitor the governance of
IOR through flexible management by the board of directors.
Mr. Toru Sugihara has significant knowledge and experience in the practice ofinvestment corporations, including many years of practical experience in the real estateindustry, deep experience in asset management at listed J-REITs, and prior experience
as an executive director of a listed J-REIT. Therefore, he is able to supplement the lackof practical ability of IOR to verify the appropriateness of the fee structures, and quickly
recognize and respond, flexibly and appropriately, to events that are contrary to the IOR
unitholders’ interests. From this perspective, the Claimant hereby requests theappointment of Mr. Toru Sugihara, Manager of Berkeley Global, LLC (Star Asia
Group), as an executive director.
The term of office of the executive director under this proposal shall expire at the timeof conclusion of the unitholders’ meeting convened by IOR pursuant to Article 9,
Paragraph 2 of the current Articles of Incorporation of IOR so that such term of office
expires at the same time as the expiration of the term of office of the current executive
director as provided in Article 19, Paragraph 3 of the current Articles of Incorporation.
Ichigo Office’s Position on Proposal 12
Ichigo Office believes that Proposal 12 does not contribute to shareholder value, andopposes Proposal 12.
Ichigo Office believes that linking asset management fees with shareholder profits
contributes to maximizing the dividend and shareholder value. Ichigo Office’s asset
management fee structure was thoughtfully designed, and as mentioned in the Proposal
1 rationale, this fee structure incentivizes the asset management company to help Ichigo
Office differentiate itself and achieve strong long-term returns.
Mr. Toru Sugihara, the candidate proposed under Proposal 12, has expressed views on
Ichigo Office’s asset management fee structure without an adequate understanding of
the underlying rationale or background, and has stated that Ichigo Office’s governancestructure must be strengthened, claiming that Ichigo Office’s fee structure does not
drive shareholder value and is unreasonable and inappropriate, and that there weresignificant problems with Ichigo Office’s disclosures for the 2020 Shareholder Meeting.
However, as explained in the Proposal 1 rationale, Ichigo Office’s fee structure does
indeed lead to increased shareholder value and there were no problems with Ichigo
Office’s disclosures for the 2020 Shareholder Meeting. Therefore, Ichigo Office does30not believe it is necessary to appoint Mr. Sugihara as an Ichigo Office Executive
Director. Ichigo Office instead proposes the nomination of Mr. Kagiyama (Proposal 5)
as an additional Executive Director in order to further drive shareholder value.
Mr. Sugihara has been an employee of Star Asia Group since 2015, and is a Manager ofStar Asia Group’s Berkeley Global, LLC, the shareholder requesting to convene thisEGM. Star Asia Investment Corporation, managed by Star Asia Group, competes forinvestments with Ichigo Office, resulting in a conflict of interest. If Mr. Sugihara isappointed as an Executive Director, there is a concern that, due to his economic relianceon Star Asia Group (discussed further below), he may use his position as Executive
Director to make decisions and act in a way that would prioritize the profits andinterests of Star Asia Group over the profits of Ichigo Office and Ichigo Officeshareholders when making decisions for Ichigo Office.
Because Mr. Sugihara would receive a monthly Director compensation of JPY 10,000
under Proposal 14, he was asked to clarify his position with Star Asia Group during ameeting he attended with all of Ichigo Office’s Directors. Ichigo Office confirmed that
Mr. Sugihara currently intends to remain a Star Asia Group employee and maintain his
relationship with Star Asia Group. That is, he expects to continue receiving economic
support from Star Asia Group, even were he to be appointed as Ichigo Office’s
Executive Director. Under such circumstances, Ichigo Office believes that it would be
difficult to expect Mr. Sugihara to fulfill his Executive Director role prioritizing Ichigo
Office shareholders independently of Star Asia Group, regardless of how sincere andhonorable he may be. Although he did mention that he will consider leaving Star Asia
Group if requested by shareholders, if he were truly independent from Star Asia Grouphe should proactively clear any concerns regarding business-related conflicts of interest
even without the urging of shareholders.
Given the above, Ichigo Office believes it is not appropriate to appoint Mr. Sugihara as
an Executive Director.
Proposal 13: Appointment of Mr. Akihiko Fujinaga as a supervisory director[Summary of Proposal]
To appoint the following candidate as a supervisory director:
Candidate:

Mr. Akihiko Fujinaga (Date of Birth: August 25, 1956)<Profile and Other Major Positions Held Concurrently>
Apr 1980
Joined Tokio Marine Fire Insurance Co., Ltd.
(currently Tokio Marine & Nichido Fire Insurance Co., Ltd.)Sep 2001
Manager of Finance and Accounting Department and Executive
Director,
Japan Real Estate Asset Management Co., Ltd. (seconded)
May 2006
Manager of Management Planning Division,
Secured Capital Japan Co., Ltd. (currently PAG Investment Management Ltd)Apr 2007
Senior Vice President and Executive Director, New City Corporation
K.K.
Dec 2007
CFO and Director, MS Real Estate Advisors K.K.
Jan 2009
COO and Executive Director, LaSalle Investment Management K.K.
Jan 2015
Senior Executive Advisor, LaSalle Investment Management K.K.
Feb 2017
President & Representative Director, Tosei Asset Advisors, Inc.
Feb 2020
Chairperson of the Board, Tosei Asset Advisors, Inc.
31

Feb 2022

Left Tosei Asset Advisors, Inc.

(Note 1)
As of March 17, 2023, the above candidate does not hold any investment units of IOR.
(Note 2)
The above candidate and IOR do not have any special relationship with each other.
[Reason for Proposal]
As stated in the “Reason for Proposal” in “(4) Appointment of Mr. Toru Sugihara as an
executive director” above, it is considered that the governance system of IOR has notbeen well established to realize the fundamental principle of increasing the unitholders’value. In order to resolve such issues on the governance system, the Claimant believes it
is critical to appoint one executive director and one supervisory director from outside
the corporation, have the executive directors appropriately negotiate with the AssetManagement Company on the AM fees from the viewpoint of protecting the IOR
unitholders’ interests, and have both of the executive director and the supervisory
director monitor the governance of IOR through the flexible management by the boardof directors.
Mr. Akihiko Fujinaga has held important positions such as a president, executive
director and other similar positions at many prominent real estate companies and asset
management companies of listed J-REITs and is a person who is extremely well versed
in real estate investment management practices. In addition, he has deep knowledge inthe field of finance, having served as Manager of Finance and Accounting Department
of Japan Real Estate Asset Management Co., Ltd. and CFO of MS Real Estate Advisors
K.K., which enables him to analyze and supervise both the appropriateness of the fee
formula itself based on his knowledge of the real estate industry and the appropriatenessof the payments based on his knowledge of the field of finance. Therefore, he is anappropriate person to be a supervisory director of IOR, where the appropriateness of the
AM fee structure is in issue.
From this perspective, the Claimant hereby requests the appointment of Mr. Akihiko
Fujinaga as a supervisory director.
Pursuant to Article 18 of the Articles of Incorporation of IOR, the number of thesupervisory directors shall be at least one more than the number of the executive
directors. The term of office of the supervisory director under this proposal shall expire
at the time of conclusion of the unitholders’ meeting convened by IOR pursuant to
Article 9, Paragraph 2 of the current Articles of Incorporation of IOR so that such termof office expires at the same time as the expiration of the term of office of the current
supervisory director as provided in Article 19, Paragraph 3 of the current Articles ofIncorporation.
Ichigo Office’s Position on Proposal 13
Ichigo Office believes that Proposal 13 does not contribute to shareholder value, andopposes Proposal 13.
Berkeley Global has proposed the appointment of Mr. Akihiko Fujinaga as Supervisory
Director due to his ability to “analyze and supervise both the appropriateness of the fee
formula itself based on his knowledge of the real estate industry and the appropriatenessof the payments based on his knowledge of the field of finance.” (excerpt fromtranslation provided by Berkeley Global)
32

Ichigo Office opposes this proposal because the reasonableness of our asset
management fee structure has already been established, and the asset managementcompany has performed well in line with the incentives provided by this asset
management fee structure. Ichigo Office believes that the appointments of Mr.
Kagiyama and Mr. Maruo as the Executive Director and Supervisory Director
nominated under Proposals 5 and 6 will add further insights into the real estate andfinance industries to conduct additional reviews of the asset management fee structure
going forward, and do not believe it is necessary to appoint Mr. Fujinaga as anadditional Supervisory Director.
All of Ichigo Office’s Directors interviewed Mr. Fujinaga and deliberated on his
credentials, track record, and expertise. However, in light of Mr. Fujinaga’s relationshipwith Mr. Sugihara, Ichigo Office cannot rule out the possibility that he may prioritize
the conflicted interests of Mr. Sugihara.
Given the above, Ichigo Office believes it is not appropriate to appoint Mr. Fujinaga as
Supervisory Director.
Proposal 14: Partial amendments to the Articles of Incorporation (regarding adoption ofa cap on remuneration for Executive Directors and Supervisory Directors)[Summary of Proposal]
To add the following provision as Item 3 of Article 20 of the Articles of Incorporation of
IOR:(3) The maximum total amount of remuneration for all executive directors andsupervisory directors set forth in the first sentence of Item 1 and the first sentence of
Item 2 shall be 1,090,000 yen per month.
[Reason for Proposal]
The increase in the number of executive directors and supervisory directors proposed in“(4) Appointment of Mr. Toru Sugihara as an executive director” and “(5) Appointmentof Mr. Akihiko Fujinaga as a supervisory director” above is a measure to improve thecorporate governance of IOR and is intended to maintain and increase the IOR
unitholders’ interests. From the perspective of avoiding an unnecessary increase in thecost burden of IOR due to an increase in the number of such directors, the total amountof remuneration should be limited in order to keep it within a reasonable range.
The amount of 1,090,000 yen per month proposed as the upper limit of the total amountof remuneration for the executive directors and the supervisory directors is comprised of
the sum of: (i) the amount of the monthly remuneration for the current directors that canbe confirmed in the asset management report for the 34th fiscal period of IOR; (ii)
10,000 yen per month as the remuneration for the executive director who is requested tobe newly appointed; and (iii) the monthly amount as the remuneration for thesupervisory director who is requested to be newly appointed, which is the same amountcurrently paid for the other current supervisory directors. The specific breakdown is asfollows:
Current executive director:
Two current supervisory directors:
New executive director:
New supervisory director:

360,000 yen per month
480,000 yen per month
10,000 yen per month
240,000 yen per month33

Ichigo Office’s Position on Proposal 14
Ichigo Office believes that Proposal 14 does not contribute to shareholder value, andopposes Proposal 14.
Director compensation is very important for shareholders. In order to ensuretransparency and objectivity with respect to Director compensation, Ichigo Officeproposes that Director compensation be determined via Shareholder Meeting approvalrather than by Ichigo Office’s Board of Directors.
Under Proposal 14, in order to avoid an increase in expenses as a result of additional
directors, Berkeley Global is proposing a substantial reduction in the uppercompensation limit, while retaining the right of the Board to determine Director
compensation. Ichigo Office believes that Berkeley Global’s proposal is inappropriate
because it is based on the assumption that a newly appointed Executive Director will be
paid only a nominal compensation.
If Director compensation is determined via the shareholder-oriented decision process
proposed in Proposal 7, concerns of unreasonable Director compensation expenses will
be eliminated. In addition, shareholders will be able to determine the compensation
amount while taking into account general price and wage trends, as well as Ichigo
Office’s performance. Thus, Ichigo Office believes that Proposal 7 is appropriate.
4. ScheduleMay 25, 2023 (today)
June 1, 2023
June 8, 2023
June 23, 2023

Board of Directors resolution
Shareholder meeting materials publication on website (expected)
Shareholder meeting materials mailed to shareholders (expected)
Shareholder meeting (expected)

5. Other
Ichigo Office will disclose a supplementary material to further explain the reasons forobjection regarding Berkeley Global’s proposals.

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