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.

January 27, 2022
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Norio Nagamine, Head of Ichigo OfficeTel: +81-3-3502-4891

Acquisition of TK Equity Interest in Four Office Assets (Bridge Fund) andPreferential Negotiation Right With Sponsor Support
Ichigo Office today decided to acquire a TK (tokumei kumiai) equity interest in a bridgefund (“Ichigo Office Bridge Fund”) and received a preferential negotiation right, free ofcharge, to the four underlying office assets in the Ichigo Office Bridge Fund.
1. Acquisition Summary
TK equity interest in trust beneficiary interest in real estate(juekiken)
GK Kizuna1 TK equity interest (Ichigo Office Bridge
Asset Name
Fund)1
Ichigo Hakataeki Higashi Building (Hakata, Fukuoka),
Ichigo Hakata Meiji Dori Building (Hakata, Fukuoka),
Underlying Real Estate
Fukuoka Kensetsu Kaikan (Hakata, Fukuoka), Ogaku
Building (Chiyoda, Tokyo)
Legal Form of Asset

1

Investment Amount

JPY 50 million (excluding ancillary acquisition costs)
0.94% TK equity interest stakeContract Date

January 27, 2022

Closing Date

January 28, 2022

Financing Method

Cash-on-handSettlement Method

Lump-sum payment

GK Kizuna1 is the TK Operator of the Ichigo Office Bridge Fund setup via TK equity
investments. For details, please refer to the TK Operator Profile under Section 3“Asset Summary.”12. Acquisition Rationale
Ichigo Office is working to drive sustainable growth and maximize shareholder value
through both organic growth leveraging Ichigo’s value-add capabilities and acquisitiondriven growth via the use of bridge funds and Ichigo’s sponsor support.
Today a new bridge fund, the Ichigo Office Bridge Fund created with the support of
Ichigo and its subsidiary Ichigo Estate, is acquiring four high-quality mid-size officeassets that offer return stability and upside earnings potential. Ichigo Office is also
receiving a preferential negotiation right, free of charge, to acquire the four assets fromthe Ichigo Office Bridge Fund, therefore securing the opportunity to acquire highquality assets. Ichigo Office is also making optimal use of its cash on hand by acquiring
a TK equity interest in the Ichigo Office Bridge Fund.
Ichigo Trust Pte. Ltd. (“Ichigo Trust”), Ichigo Office’s major shareholder which has asponsor support agreement with Ichigo Office, is acquiring a 99% TK equity interest in
the Ichigo Office Bridge Fund, providing strong support for Ichigo Office’s growth.
The preferential negotiation right acquired by Ichigo Office gives Ichigo Office theoption, not the obligation, to acquire the trust beneficiary interest (juekiken) or theunderlying office assets of the Ichigo Office Bridge Fund. Ichigo Office’s TK equity
investment is expected to yield a 6.5% return, backed by stable rental income from theunderlying assets of the Ichigo Office Bridge Fund.1
Please refer to Section 6 “Asset Details” for additional asset details.
1

The expected yield on the TK equity investment is calculated by dividing Ichigo
Office’s TK equity interest (0.94%) of the forecast distribution amount by Ichigo
Office’s TK equity investment amount. The forecast distribution amount is calculated
by subtracting administrative, management, and borrowing expenses of the Ichigo
Office Bridge Fund from the DCF-based, first-year net operating income shown on
Tanizawa Sogo Appraisal Co., Ltd.’s appraisal report as of November 30, 2021.

3. Asset Summary
A. TK (tokumei kumiai) Overview
TK Operator
TK Agreement
PeriodTotal TK Investment
AmountGK Kizuna1
The later of January 31, 2032 or the business day following
the date on which the TK operator completes repaying all
debt obligations (expected)
JPY 50 million
GK Kizuna1

Trust beneficiaryinterest in real estate(juekiken)
JPY 12,740 million1

TK Agreement
Details1

Non-recourse loan
JPY 7,410 million2
Senior TK equity
JPY 1,500 million3
Subordinated TK equity
JPY 3,830 million4

The amount includes asset acquisition costs, TK
establishment costs, and reserves. The appraisal value of theunderlying assets calculated by Tanizawa Sogo Appraisal
Co., Ltd. as of November 30, 2021 is JPY 13,140 million.
2

2

Non-recourse loan from SMBC (expected)
The senior TK equity holder did not provide consent todisclose its name, but is a domestic securities company thatis not a related party as defined in the Act on Investment
Trusts and Investment Corporations or the internal rules of
Ichigo Investment Advisors (IIA), the asset managementcompany.
4
Ichigo Office and Ichigo Trust will invest JPY 50 million(0.94% ownership) and JPY 3,780 million (70.92%
ownership), respectively, in subordinated TK equity.
Ichigo Trust is not a related party as defined in the Act on
Investment Trusts and Investment Corporations or theinternal rules of IIA.
5
Ichigo Estate is expected to become the asset manager of the
Ichigo Office Bridge Fund, and is a related party as definedin the Act on Investment Trusts and Investment
Corporations and the internal rules of IIA.
6SMBC Nikko Securities Inc. is expected to serve as theprivate placement agent for Ichigo Office’s TK equity
investment.
3

Calculation Period:
Bi-annually (Jan 1st – Jun 30th; Jul 1st – Dec 31st). However,the first calculation period runs from January 28, 2022 until
the end of June 2022, and the last calculation period runs fromthe day following the last day of the calculation period
immediately preceding the last day of the TK agreement, tothe latest of the day all assets from the TK operation other thancash (including related deposits) have been sold, the day the
TK operator’s debt obligation amount is determined, or thelast day of the TK agreement.
Distributions:
Any profits arising in each calculation period will be
distributed generally in the following order.
1. Profits will be distributed to the TK operator up to an
amount equivalent to any cumulative losses (should they
exist) that have been distributed to the TK operator during
prior calculation periods.
2. Profits will be distributed to the senior TK equity holder up
to an amount equivalent to any cumulative losses (should
they exist) that have been distributed to the senior TK
equity holder during prior calculation periods.
3. Profits not distributed to the senior TK equity holder under
2 above due to insufficient profits will be distributed to thesenior TK equity holder.
4. Profits will be distributed to the senior TK equity holder up
to an amount equivalent to profits multiplied by the senior
TK equity holder’s relative interest among TK investors
and further prorated by the number of days in thecalculation period divided by 365.

3

5. Profits will be distributed to each subordinated TK equity
holder according to their respective TK equity interests andup an amount equivalent to any respective cumulative
losses (should they exist) that have been distributed to each
subordinated TK equity holder during prior calculation
periods.
6. Any remainder shall be distributed to each subordinated
TK equity holder according to their respective TK equity
interests.
Any losses arising in a calculation period will be distributed
generally in the following order, after an amount equivalent
to the calculation period’s expected senior profit distribution
is added to the balance of undistributed profits to the senior
TK equity holder.
1. Losses will be distributed to each subordinated TK equity
holder according to their respective TK equity interest, but
not exceeding their respective TK investments.
2. Losses shall be distributed to the senior TK equity holder
but not to exceed the senior TK equity holder’s investment.
3. Any remainder shall be distributed to the TK operator.

Description

Ichigo Office’s preferential negotiation rightfor acquisition of the trust beneficiary interestor underlying real estate. (See Section 6“Asset Details” for details)

Exercise
Period ofPreferential
Negotiation
Right

From January 31, 2022 to January 31, 2025

Preferential
Negotiation Right
Conditions
for ExerciseofPreferential
Negotiation
Right

If Ichigo Office offers to acquire the entire
trust beneficiary interest at a price equivalent
to or above the Acquisition Price detailed
below, the TK Operator shall engage innegotiations in good faith and make the saleto Ichigo Office should an agreement bereached.
Acquisition Price
JPY 12,570 million
Breakdown by Asset
Ichigo Hakataeki Higashi Building:
JPY 3,500 million
Ichigo Hakata Meiji Dori Building:
JPY 3,080 million
Fukuoka Kensetsu Kaikan:
JPY 2,750 million
Ogaku Building:
JPY 3,240 million(all prices above exclude tax)

4

B. TK Operator Profile
Name

GK Kizuna1

Address

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Representative

Managing Member: Ippan Shadan Hojin IES2Manager: Kenta Itoi

Business

1. Investment in trust beneficiary interests in real estate(juekiken)
2. Acquisition, development, holding, management, and sale ofreal estate
3. Other businesses relating to the aforementioned businesses

Paid-In Capital

JPY 100,000

Establishment Date

January 4, 2022

Total Assets

JPY 12,740 million (expected)

Net Assets

JPY 100,000

Relationship to
Ichigo Office or
Ichigo Investment
Advisors (IIA)

Although the TK Operator is not a related party as defined in the
Act on Investment Trusts and Investment Corporations, it is arelated party as defined in the internal rules of IIA, because it
receives asset management services from Ichigo Estate, which isa related party as defined in the Act on Investment Trusts andInvestment Corporations.

C. Related Party Transaction Management
Because Ichigo Estate is providing asset management services to the Ichigo OfficeBridge Fund, the Ichigo Office Bridge Fund is a related party as defined in the internal
rules of the Asset Management Company. The Ichigo Office Bridge Fund is acquiring
the trust beneficiary interest in real estate from Ichigo Estate and a SPC that receives
asset management services from Ichigo Estate.
Because the Ichigo Office Bridge Fund is acquiring the trust beneficiary interest in realestate using funds procured via TK equity investments, including an investment from
Ichigo Office, and Ichigo Office is acquiring a preferential negotiation right to the trust
beneficiary interest in real estate from the Ichigo Office Bridge Fund, these transactions
have been reviewed and managed as acquisitions from a related party per IIA’s rules.
4. Acquisition Schedule
Acquisition Decision Date

January 27, 2022

TK Agreement Execution Date

January 27, 2022

TK Investment Settlement Date

January 28, 2022 (expected)

Asset Acquisition Date

January 31, 2022 (expected)

5. Earnings Outlook
Although the impact of this TK equity interest acquisition on Ichigo Office’s April 2022
and October 2022 fiscal period earnings forecasts announced on December 14, 2021 is
minimal and the forecasts are unchanged, Ichigo Office believes the opportunity toacquire high-quality assets via the Ichigo Office Bridge Fund will contribute to its
sustainable growth and grow long-term value for Ichigo Office shareholders.
56. Asset Details
A. Ichigo Hakataeki Higashi Building(1) Location
The eastern Hakata Station area is part of Fukuoka’s main commercial district where
many hotels and office buildings occupied by financial institutions and major
corporations stand along a major thoroughfare.
The Ichigo Hakataeki Higashi Building is located near Hakata Station, which offers
access to rail lines including the JR Kagoshima Main Line and the Fukuoka City
Subway Kuko Line and conveniently connects to the Tenjin entertainment district andFukuoka Airport.
The eastern Hakata Station area is expected to grow on the back of new redevelopment
projects being planned as a result of Hakata Connected, a policy providing for relaxed
floor-area ratio requirements for buildings meeting certain criteria.
(2) Building Features
The Ichigo Hakataeki Higashi Building is a mid-size office building located within afour-minute walk from the Chikushi Exit of Hakata Station, which offers access to raillines including the JR Kagoshima Main Line and the Fukuoka City Subway Kuko Line.
Each floor is sub-divisible with a standard floor plate of 170 tsubo (c. 560m2) and thebuilding has OA sub-floors and individual air conditioning units, therefore catering to
the needs of the average tenant.
The building is currently occupied by the branch and sales offices of listed companies, a
construction company, and a medical clinic.
(3) Building Photos and Location Map

6

Asset Name
Form of Ownership
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building

Structure
Total Floor Area
Date Built

Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodArchitect1
Builder1
Structural Designer1
Inspection Agency1
Seismic PML (Assessor)

Collateral

Asset Overview
Ichigo Hakataeki Higashi Building
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
March 1, 2007 – January 30, 2032 (expected)
1-13-9 Hakataeki Higashi, Hakata-ku, Fukuoka City
Freehold
950.75m2
Commercial
80%500%
Freehold(1) Office (2) Boiler room(1) Steel Reinforced Concrete 8 floors(2) Reinforced Concrete 1 floor(1) 4,871.45m2 (2) 17.25m2
October 3, 1987
Tanizawa Sogo Appraisal Co., Ltd.
JPY 3,580 million
November 30, 2021
JPY 3,780 million
Tekken Corporation, First-Class Registered Architects Office
Tekken Corporation, Fukuoka Branch
Tekken Corporation, First-Class Registered Architects Office
Fukuoka City
1.01% (Sompo Risk Management Inc.)
A right of pledge is expected to be established for the trust
beneficiary interest, with the lender of the non-recourse loan
to the TK operator as the pledgee. Also, an agreement is
expected to be signed to assign the lender as the mortgage
holder with respect to the underlying real estate.

Lease Overview (as of December 31, 2021)
Number of Tenants
33
Monthly Rental Income
JPY 13.478 million
Tenant Security Deposits
JPY 119.98 million
2
Leasable Area
3,596.71m2
Leased Area2
3,596.71m2
Apr 2020 Oct 2020 Apr 2021 Oct 2021
Occupancy
100%
100%
100%
100%
Property Management
OHI Co., Ltd. (expected)
Company
GK Kizuna1 (expected)
Master Lease Company
Pass-through (expected)
Master Lease Type7

Dec 2021
100%

Special Items
A lease termination notification was received from one of the tenants (leased area: 113.53m2)
on August 30, 2021 and effective March 31, 2022. Occupancy is expected to be 96.8% after thetermination.
1

The names of the architect, builder, structural designer, and inspection agency are those asof when the building was built.

8Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses
Administrative andMaintenance Expenses
Utility Expenses
Repair Expenses
PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment of
Deposits Received
CapitalExpenditure
Net Profit
Cap Rate
Value via DCF Method
Discount Rate
Terminal Cap Rate

Ichigo Hakataeki Higashi Building
JPY 3,580,000,000
Tanizawa Sogo Appraisal Co., Ltd.
November 30, 2021
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and3,580,000,000
verified using a direct capitalization
valuation
3,780,000,000
220,727,719
Based on expected long-term, stablerental income, common area service
232,285,178
income, parking lot income, and otherincomeBased on long-term, normalized
11,557,459
vacancy rates
48,125,862
12,516,551 Based on historical actual amounts
12,257,588 Based on historical actual amounts
Based on engineering reports and3,925,000
reference to similar assets
4,834,372 Based on existing contractual fees
1,785,562 Based on a 10% p.a. turnover rate
11,321,000 Based on FY2021 actual amounts
Based on a quote from an insurance
382,150
company
1,103,639 Based on historical actual amounts
172,601,857
1,532,413 Based on a 1.0% investment yield
7,850,000

Based on engineering reports andreference to similar assets

166,284,270
Based on transactions of similar assets
while taking into account the asset’s
4.4%
location and specific characteristics,
and the relationship to discount rates
3,500,000,000
Based on transactions of similar assets
and the current yield of financial
4.5% assets, taking into consideration theasset’s location and specificcharacteristics
4.6% Cap rate adjusted for uncertainties
9Value via Cost Approach
Ratio of Land

Ratio of Building

3,540,000,000
Based upon the value recorded in thegovernment land assessment
85.0%(koujikakaku) and transactions ofsimilar assets
Based upon the replacement cost
15.0% specified in engineering reports anddepreciation
Notes

None

10

B. Ichigo Hakata Meiji Dori Building(1) Location
The Ichigo Hakata Meiji Dori Building is located in the Gofukucho area adjacent toFukuoka’s prominent commercial districts, the Hakata Station area and the Tenjin area.
The area offers convenient access to public transportation, including multiple subway
lines and route bus lines.
Along Taihaku Dori and Meiji Dori, both major thoroughfares in the Gofukucho area, is
a commercial district with many high-rise office buildings.
The Gofukucho area is expected to enjoy continued growth as recent years has seen
many new buildings built in the vicinity along with ongoing new building constructions
and redevelopment projects.
(2) Building Features
The Ichigo Hakata Meiji Dori Building is a mid-size office building located within aone-minute walk from Gofukucho Station on the Fukuoka City Subway Hakozaki Lineand a four-minute walk from Nakasu Kawabata Station on the Kuko Line.
The standard floor plate is 155 tsubo (c. 512m2) with a ceiling height of 2.9 meters, andthe building has OA sub-floors, individual air conditioning units, and 30 parking spaces,
therefore catering to the needs of the average tenant.
The building is currently occupied by an education company, a lighting equipment
manufacturer, and a financial services company.
(3) Building Photos and Location Map

11

Asset Name
Form of Ownership
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodArchitect1
Builder1
Structural Designer1
Inspection Agency1
Seismic PML (Assessor)

Collateral

Asset Overview
Ichigo Hakata Meiji Dori Building
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
July 30, 2015 – January 30, 2032 (expected)
8-17 Tenyamachi, Hakata-ku, Fukuoka City
Freehold
744.42m2
Commercial
80%600%
Freehold
OfficeSteel 7 floors
4,514.87m2
October 1, 2007
Tanizawa Sogo Appraisal Co., Ltd.
JPY 3,360 million
November 30, 2021
JPY 3,560 million
Kume Sekkei Co., Ltd.
Taisei Corporation
Kume Sekkei Co., Ltd.
The Building Center of Japan
0.67% (Sompo Risk Management Inc.)
A right of pledge is expected to be established for the trust
beneficiary interest, with the lender of the non-recourse loan
to the TK operator as the pledgee. Also, an agreement is
expected to be signed to assign the lender as the mortgage
holder with respect to the underlying real estate.

Lease Overview (as of December 31, 2021)
Number of Tenants
11
Monthly Rental Income
JPY 11.662 million
Tenant Security Deposits
JPY 87.886 million
2
Leasable Area
3,374.97m2
Leased Area2
3,277.52m2
Apr 2020 Oct 2020 Apr 2021 Oct 2021
Occupancy
100%
100%
100%
97.1%
Property Management
Fukuoka Jisho Co., Ltd. (expected)
Company
GK Kizuna1 (expected)
Master Lease Company
Pass-through (expected)
Master Lease Type12

Dec 2021
97.1%

Special Items
None
1

The names of the architect, builder, structural designer, and inspection agency are those asof when the building was built.

13

Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses
Administrative andMaintenance Expenses
Utility Expenses
Repair Expenses
PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment of
Deposits Received
CapitalExpenditure
Net Profit
Cap Rate
Value via DCF Method
Discount Rate
Terminal Cap Rate

Ichigo Hakata Meiji Dori Building
JPY 3,360,000,000
Tanizawa Sogo Appraisal Co., Ltd.
November 30, 2021
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and3,360,000,000
verified using a direct capitalization
valuation
3,560,000,000
210,458,738
Based on expected long-term, stablerental income, common area service
222,087,619
income, parking lot income, and otherincomeBased on long-term, normalized
11,628,881
vacancy rates
51,358,039
11,380,399 Based on historical actual amounts
14,701,369 Based on historical actual amounts
Based on engineering reports and2,940,000
reference to similar assets
4,862,434 Based on existing contractual fees
1,619,773 Based on a 10% p.a. turnover rate
14,430,400 Based on FY2021 actual amounts
Based on a quote from an insurance
371,370
company
1,052,294 Based on historical actual amounts
159,100,699
1,493,171 Based on a 1.0% investment yield
7,350,000

Based on engineering reports andreference to similar assets

153,243,870
Based on transactions of similar assets
while taking into account the asset’s
4.3%
location and specific characteristics,
and the relationship to discount rates
3,280,000,000
Based on transactions of similar assets
and the current yield of financial
4.4% assets, taking into consideration theasset’s location and specificcharacteristics
4.5% Cap rate adjusted for uncertainties
14

Value via Cost Approach
Ratio of Land

Ratio of Building

3,420,000,000
Based upon the value recorded in thegovernment land assessment
75.3%(koujikakaku) and transactions ofsimilar assets
Based upon the replacement cost
24.7% specified in engineering reports anddepreciation
Notes

None

15

C. Fukuoka Kensetsu Kaikan(1) Location
The eastern Hakata Station area is part of Fukuoka’s main commercial district where
many hotels and office buildings occupied by financial institutions and major
corporations stand along a major thoroughfare.
The Fukuoka Kensetsu Kaikan is located near Higashi-Hie Station on the Fukuoka City
Subway Kuko Line and Hakata Station on the JR Kagoshima Main Line, both offering
convenient access to the Tenjin entertainment district and Fukuoka Airport.
The eastern Hakata Station area is expected to grow on the back of new redevelopment
projects being planned as a result of Hakata Connected, a policy providing for relaxed
floor-area ratio requirements for buildings meeting certain criteria.
(2) Building Features
The Fukuoka Kensetsu Kaikan is a mid-size office building located within a two-minute
walk from Higashi-Hie Station on the Fukuoka City Subway Kuko Line.
Each floor is sub-divisible with a standard floor plate of 117 tsubo (c. 386m2) and thebuilding has OA sub-floors and individual air conditioning units, therefore catering to
the needs of the average tenant.
The building is currently occupied by organizations and companies within theconstruction industry, an IT company, and a real estate company.
(3) Building Photos and Location Map

16

Asset Name
Form of Ownership
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value

Asset Overview
Fukuoka Kensetsu Kaikan
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
April 26, 2019 – January 30, 2032 (expected)
3-14-18 Hakataeki Higashi, Hakata-ku, Fukuoka City
Freehold
954.48m2
Commercial(1) 80% (2) 80%(1) 500% (2) 400%
Freehold(1) Office (2) Storage(1) Steel 9 floors (2) Reinforced Concrete 1 floor(1) 4,357.40m2 (2) 4.49m2
November 30, 1997
Tanizawa Real Estate Appraisal Co., Ltd.
JPY 2,820 million
November 30, 2021

Appraisal Date
Value by Direct Capitalization
JPY 2,910 million
MethodFukuoka Sekkei Kyodo Kumiai (FSK), First-Class Registered
Architect1
Architect Office1
Takenaka Corporation, Kyushu Branch
Builder1
Structural Designer
Tokuta Sekkei
1
Inspection Agency
Fukuoka City
Seismic PML (Assessor)
1.32% (Sompo Risk Management Inc.)

Collateral

A right of pledge is expected to be established for the trust
beneficiary interest, with the lender of the non-recourse loan
to the TK operator as the pledgee. Also, an agreement is
expected to be signed to assign the lender as the mortgage
holder with respect to the underlying real estate.

Lease Overview (as of December 31, 2021)
Number of Tenants
11
Monthly Rental Income
JPY 12.077 million
Tenant Security Deposits
JPY 114.549 million
2
Leasable Area
2,949.22m2
Leased Area2
2,949.22m2
Apr 2020 Oct 2020 Apr 2021 Oct 2021
Occupancy
100%
100%
100%
100%
Property Management
OHI Co., Ltd. (expected)
Company
GK Kizuna1 (expected)
Master Lease Company
Pass-through (expected)
Master Lease Type(4)17

Dec 2021
100%

Special Items
None
1

The names of the architect, builder, structural designer, and inspection agency are those
as of when the building was built.

18

Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses
Administrative andMaintenance Expenses
Utility Expenses
Repair Expenses
PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment of
Deposits Received
CapitalExpenditure
Net Profit
Cap Rate
Value via DCF Method
Discount Rate
Terminal Cap Rate

Fukuoka Kensetsu Kaikan
JPY 2,820,000,000
Tanizawa Real Estate Appraisal Co., Ltd.
November 30, 2021
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and2,820,000,000
verified using a direct capitalization
valuation
2,910,000,000
178,743,396
Based on expected long-term, stablerental income, common area service
188,840,153
income, parking lot income, and otherincomeBased on long-term, normalized
10,096,757
vacancy rates
40,898,646
10,266,157 Based on historical actual amounts
10,374,602 Based on historical actual amounts
Based on engineering reports and
5,040,000
reference to similar assets
3,373,630 Based on existing contractual fees
1,419,133 Based on a 10% p.a. turnover rate
8,800,900 Based on FY2021 actual amounts
Based on a quote from an insurance
373,020company
1,251,204 Based on historical actual amounts
137,844,750
1,202,411 Based on a 1.0% investment yield
10,800,000

Based on engineering reports andreference to similar assets

128,247,161
Based on transactions of similar assets
while taking into account the asset’s
4.4%
location and specific characteristics,
and the relationship to discount rates
2,780,000,000
Based on transactions of similar assets
and the current yield of financial
4.5% assets, taking into consideration theasset’s location and specificcharacteristics
4.6% Cap rate adjusted for uncertainties
19Value via Cost Approach
Ratio of Land

Ratio of Building

2,690,000,000
Based upon the value recorded in thegovernment land assessment
77.0%(koujikakaku) and transactions ofsimilar assets
Based upon the replacement cost
23.0% specified in engineering reports anddepreciation
Notes

None

20

D. Ogaku Building(1) Location
The Ogaku Building is located near Akihabara Station on the JR Yamanote, Sobu, andKeihin Tohoku Lines, the Tsukuba Express Line, and the Tokyo Metro Hibiya Line,
offering convenient access to the Tokyo Metropolitan area and various places within
Tokyo.
The Showa Dori area on the east side of Akihabara Station is an attractive commercial
district and home to many mid-size office buildings and retail buildings.
The area around Akihabara Station has seen rapid commercialization in recent years
with many new large-scale buildings being built, and this growth is expected tocontinue with further redevelopment projects.
(2) Building Features
The Ogaku Building is a mid-size office building located within a three-minute walkfrom Akihabara Station on the JR Yamanote and other JR Lines and a one-minute walkfrom Akihabara Station on the Tokyo Metro Hibiya Line.
The standard floor plate is 90 tsubo (c. 297m2), and the building has OA sub-floors,individual air conditioning units, and 24 parking spaces, therefore catering to the needsof the average tenant.
The building is currently occupied by an IT company, a temping agency, and a franchisecoffee shop.
(3) Building Photos and Location Map

21

Asset Name
Form of Ownership
Trustee
Period of Trust Contract
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value
Appraisal Date
Value by Direct Capitalization
MethodArchitect1
Builder1
Structural Designer1
Inspection Agency1
Seismic PML (Assessor)

Asset Overview
Ogaku Building
Trust beneficiary interest in real estate (juekiken)
Sumitomo Mitsui Trust Bank, Ltd.
February 28, 2005 – January 31, 2032 (expected)
2-19 Sakumacho, Kanda, Chiyoda-ku, Tokyo
Freehold
421.21m2
Commercial
80%
800% (600% for part of the building)Freehold
Office, Parking Spaces
Steel Reinforced Concrete, 8 floors & 1 basement floor
2,776.30m2
March 22, 1988
Tanizawa Real Estate Appraisal Co., Ltd.
JPY 3,380 million
November 30, 2021
JPY 3,600 million
NAOI Architecture & Design Office
Sampei Construction Co., Ltd.
NAOI Architecture & Design Office
Chiyoda Ward
6.61% (Sompo Risk Management Inc.)

A right of pledge is expected to be established for the trust
beneficiary interest, with the lender of the non-recourse loan
Collateral
to the TK operator as the pledgee. Also, an agreement is
expected to be signed to assign the lender as the mortgage
holder with respect to the underlying real estate.
Lease Overview (as of December 31, 2021)
Number of Tenants
4Monthly Rental Income
JPY 11.105 million
Tenant Security Deposits
JPY 103.076 million
2
Leasable Area
2,100,93m2
Leased Area2
2,100,93m2
Apr 2020 Oct 2020 Apr 2021 Oct 2021 Dec 2021
Occupancy
100%
100%
100%
100%
100%
Property Management
Ken Corporation Co., Ltd. (expected)
Company
GK Kizuna1 (expected)
Master Lease Company
Pass-through (expected)
Master Lease Type22

Special Items
The boundary line between the road and the south side of the building has yet to be
determined. The south-side boundary line is expected to be pushed back towards the building
by 20~30cm from the L-shaped gutter along the road and any future reconstruction must beplanned within the finalized boundary, which is estimated to have an area of 414.65m2.
1

The names of the architect, builder, structural designer, and inspection agency are those asof when the building was built.

23

Appraisal Details
Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct Capitalization
MethodIncomeMaximum Obtainable
Rental Income
Vacancy Loss
Expenses
Administrative andMaintenance Expenses
Utility Expenses
Repair Expenses
PM FeeLeasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment of
Deposits Received
CapitalExpenditure
Net Profit
Cap Rate
Value via DCF Method
Discount Rate
Terminal Cap Rate

Ogaku Building
JPY 3,380,000,000
Tanizawa Real Estate Appraisal Co., Ltd.
November 30, 2021
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and
3,380,000,000
verified using a direct capitalization
valuation
3,600,000,000
165,429,885
Based on expected long-term, stablerental income, common area service
177,318,300
income, parking lot income, and otherincomeBased on long-term, normalized
11,888,415
vacancy rates
35,820,912
9,529,818 Based on historical actual amounts
8,017,149 Based on historical actual amounts
Based on engineering reports and
3,720,000
reference to similar assets
2,188,852 Based on existing contractual fees
1,168,314 Based on a 10% p.a. turnover rate
9,791,900 Based on FY2021 actual amounts
Based on a quote from an insurance
246,870
company
1,158,009 Based on historical actual amounts
129,608,973
704,949 Based on a 1.0% investment yield
7,905,000

Based on engineering reports andreference to similar assets

122,408,922
Based on transactions of similar assets
while taking into account the asset’s
3.4%
location and specific characteristics,
and the relationship to discount rates
3,290,000,000
Based on transactions of similar assets
and the current yield of financial
3.5% assets, taking into consideration theasset’s location and specificcharacteristics
3.6% Cap rate adjusted for uncertainties
24Value via Cost Approach
Ratio of Land

Ratio of Building

3,690,000,000
Based upon the value recorded in thegovernment land assessment
92.9%(koujikakaku) and transactions ofsimilar assets
Based upon the replacement cost
7.1% specified in engineering reports anddepreciation
Notes

None
7. Broker Profile
N/A

25

Portfolio Reference Information
Post-Acquisition Portfolio
Asset Name

Area1

Acquisition
Price2(JPY million)% ofPortfolio3

O-02 Ichigo Nishisando Building

Central Tokyo

3,254

1.6

O-03 Ichigo Mita Building

Central Tokyo

2,740

1.3

O-04 Ichigo Nanpeidai Building

Central Tokyo

1,920

0.9

O-05 Ichigo Hanzomon Building

Central Tokyo

1,550

0.8

O-06 Ichigo Hijirizaka Building

Central Tokyo

1,200

0.6

O-07 Ichigo Shibuya Kamiyamacho Building

Central Tokyo

1,505

0.7

O-08 Ichigo Akasaka 5 Chome Building

Central Tokyo

735

0.4

O-09 Ichigo Shibakoen Building

Central Tokyo

1,100

0.5

O-10 Ichigo Ebisu Nishi Building

Central Tokyo

1,917

0.9

O-11 Ichigo Ginza 612 Building

Central Tokyo

1,773

0.9

O-12 Ichigo Uchikanda Building

Central Tokyo

1,140

0.6

O-14 Ichigo Yotsuya 4 Chome Building

Central Tokyo

550

0.3

O-15 Ichigo Tameike Building

Central Tokyo

580

0.3

O-16 Ichigo Jimbocho Building

Central Tokyo

1,820

0.9

O-17 Ichigo Hakozaki Building

Central Tokyo

1,150

0.6

O-18 Ichigo Kudan 2 Chome Building

Central Tokyo

763

0.4

O-19 Ichigo Kudan 3 Chome Building

Central Tokyo

844

0.4

O-20 Ichigo Gotanda Building

Central Tokyo

5,060

2.5

O-21 Ichigo Shin Yokohama Building

Tokyo Metro Area

1,816

0.9

O-22 Ichigo Minami Ikebukuro Building

Tokyo Metro Area

1,460

0.7

O-23 Ichigo Nakano North Building

Tokyo Metro Area

764

0.4

O-24 Ichigo Eitai Building

Tokyo Metro Area

1,490

0.7

O-26 Ichigo Ikejiri Building

Tokyo Metro Area

2,030

1.0

O-27 Ichigo Nishi Ikebukuro Building

Tokyo Metro Area

639

0.3

O-28 Ichigo Nishi Gotanda Building

Central Tokyo

765

0.4

O-29 Ichigo Kichijoji Building

2,160

1.0

4,705

2.3

6,710

3.3

O-38 Ichigo Toyamaeki Nishi Building

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

1,645

0.8

O-39 Ichigo Mirai Shinkin Building

Other Regional Cities

1,158

0.6

O-42 Ichigo Takamatsu Building

Other Regional Cities

3,010

1.5

O-46 Ichigo Kanda Nishikicho Building

Central Tokyo

2,130

1.0

O-47 Ichigo Akihabara North Building

Central Tokyo

5,500

2.7

No.

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

26

No.

Area1

Asset Name

Acquisition
Price2(JPY million)% ofPortfolio3

1,940

0.9

2,210

1.1

O-49 Ichigo Kanda Ogawamachi Building

Four Major Regional
CitiesCentral Tokyo

O-50 Ichigo Hatchobori Building

Central Tokyo

1,905

0.9

O-51 Ebisu Green GlassCentral Tokyo

5,900

2.9

O-52 Ichigo Omori Building

Central Tokyo

3,850

1.9

O-53 Ichigo Takadanobaba Building

Central Tokyo

1,580

0.8

O-54 Ichigo Omiya Building

Tokyo Metro Area

3,430

1.7

O-55 Ichigo Sagamihara Building

Tokyo Metro Area

1,174

0.6

O-56 Ichigo Ofuna Building

Tokyo Metro Area

2,000

1.0

O-57 Ichigo Sendai East Building

Other Regional Cities

1,840

0.9

O-58 Ichigo Kumamoto Building

Other Regional Cities

1,450

0.7

O-59 Ichigo Jingumae Building

Central Tokyo

7,200

3.5

O-60 Ichigo Shibuya Dogenzaka Building

Central Tokyo

3,650

1.8

O-61 Ichigo Hiroo Building

Central Tokyo

3,960

1.9

O-62 Ichigo Sasazuka Building

Central Tokyo

4,780

2.3

O-63 Ichigo Nihonbashi East Building

Central Tokyo

4,700

2.3

O-64 Ichigo Sakurabashi Building

Central Tokyo

2,500

1.2

O-65 Ichigo Shinkawa Building

Central Tokyo

2,360

1.1

O-66 Ichigo Kudan Building

Central Tokyo

3,190

1.5

O-67 Ichigo Higashi Gotanda Building

Central Tokyo

3,660

1.8

O-68 Axior Mita

Central Tokyo

1,800

0.9

O-69 Ichigo Higashi Ikebukuro Building

Tokyo Metro Area

4,570

2.2

O-70 Koriyama Big-i (Office Section)

Other Regional Cities

1,660

0.8

O-71 Ichigo Kawasaki Building

Tokyo Metro Area

1,750

0.8

O-72 Ichigo Shibuya East Building

Central Tokyo

1,350

0.7

O-73 Ichigo Ningyocho Building

1,450

0.7

2,190

1.1

1,380

0.7

2,000

1.0

O-77 Ichigo Ikenohata Building

Central Tokyo
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesTokyo Metro Area

5,130

2.5

O-78 Ichigo Ikebukuro East Building

Tokyo Metro Area

3,010

1.5

O-79 Ichigo Motoazabu Building

Central Tokyo

1,890

0.9

O-80 Ichigo Otsuka Building

Tokyo Metro Area
Four Major Regional
Cities

2,740

1.3

3,420

1.7

O-48 Ichigo Sakaisuji Honmachi Building

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

O-81 Ichigo Nagoya Building

27

No.

Area1

Asset Name

Acquisition
Price2(JPY million)% ofPortfolio3

2,340

1.1

1,330

0.6

1,040

0.5

3,500

1.7

O-85 Ichigo Shibuya Udagawacho Building

Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesCentral Tokyo

O-86 Win Gotanda Building

Central Tokyo

3,100

1.5

O-87 Ichigo Hongo Building

Tokyo Metro Area

2,300

1.1

O-88 Oimachi Center Building

Central Tokyo

1,680

0.8

O-89 Win Gotanda Building 2

Central Tokyo

3,300

1.6

O-90 MIF Building

Central Tokyo
Four Major Regional
CitiesTokyo Metro Area

2,200

1.1

1,900

0.9

2,780

1.3

3,315

1.6

2,250

1.1

O-95 Ichigo Nakameguro Building

Central Tokyo
Four Major Regional
CitiesTokyo Metro Area

1,495

0.7

O-96 Ichigo Tachikawa Building

Tokyo Metro Area

3,830

1.9

Subtotal - Office (82 Assets)

199,562

96.8

O-82 Ichigo Fushimi Building
O-83 Ichigo Nishiki Building
O-84 Ichigo Minami Morimachi Building

O-91 Ichigo Uchi Honmachi Building
O-92 Ichigo Minami Otsuka Building
O-93 Ichigo Nogizaka Building
O-94 Ichigo Hakata East Building

Z-09

Konami Sports Club Izumi Fuchu

Other Regional Cities

1,210

0.6

Z-10

Ichigo Shibuya Bunkamura Dori Building

Central Tokyo

2,400

1.2

Z-11

Twicere Yokohama Isogo (Retail Section)

Tokyo Metro Area

1,620

0.8

Z-14

Ichigo Kamata Building

Tokyo Metro Area

1,400

0.7

Subtotal - Other (4 Assets)

6,630

3.2

Total (86 Assets)

206,192

100.0

50

–

TK Equity Investment GK Kizuna1 TK Equity Interest
1

Central Tokyo refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. Tokyo Metro
Area refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, and Saitama Prefectures. Four
Major Regional Cities refers to Osaka, Nagoya, Fukuoka, and Sapporo.
2% of Portfolio is based upon acquisition price.

28