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.

August 8, 2024
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
2-6-1 Marunouchi, Chiyoda-ku, Tokyo
Representative: Takafumi Kagiyama, 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: +81-3-4485-5231

Sale of Portfolio Asset (Ichigo Yotsuya 4 Chome Building)
Ichigo Office decided today to sell the Ichigo Yotsuya 4 Chome Building.
1. Asset Sale Summary
Asset Number
Asset Name

O-14
Ichigo Yotsuya 4 Chome Building

Asset Type

OfficeDate Built

October 4, 2006

Legal Form of Asset

Trust beneficiary interest in real estate (juekiken)

Date Acquired

November 1, 2011

Buyer

Trust East Real Estate Investment Company Limited

Broker

N/ASale Price1 (A)JPY 1,000 million

Book Value2 (B)Sale Price vs. Book
Value3(A) – (B)Gains on Sale

JPY 495 million

Appraisal Value4

JPY 591 million

Contract Date

August 8, 2024

Closing Date

November 29, 2024

JPY 504 million
JPY 422 million

1

Sale Price is the sale price of the asset excluding incidental expenses such as fees andproperty, city planning, and consumption taxes.
2Book Value is an estimate based upon the most recent book value (April 2024 fiscal
period-end), adjusted for expected capital expenditures and depreciation through theClosing Date.
1

3

The difference between the Sale Price and Book Value is not equal to the gains on salefrom today’s sale.
4Appraisal Value is calculated by Daiwa Real Estate Appraisal as of April 30, 2024,
pursuant to the appraisal guidelines stipulated in Ichigo Office’s Articles ofIncorporation and the rules of the Investment Trusts Association of Japan.
2. Sale Rationale
Ichigo Office continues to work to improve the quality of its portfolio and drive
earnings by focusing its portfolio on high-quality, mid-size office assets that generate
stable cash flow.
Today’s asset sale is an office building located in Shinjuku-ku, Tokyo. Ichigo Office’sasset management company, IIA, was approached by the buyer, the owner of an
adjacent land, regarding the potential sale of the building, and after directly conducting
negotiations, it received an offer that values the building at 2.0X book value and 1.7X
appraisal value. Ichigo Office decided the sale of this asset would be positive forshareholders because 18% of the asset’s leasable area, categorized as a residence, islegally difficult to convert into an office section, and would drive long-term shareholder
value due to the gains on sale and shareholder returns.
With this asset sale, Ichigo Office’s post-transaction portfolio will be 97.8% officeassets.
Ichigo Office will use the proceeds from this asset sale for strategic investments such as
asset acquisitions and value-add capex.

2

3. Acquisition Details
Asset Name
Form of Ownership
Location
Trustee
Period of Trust Contract
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Number of Tenants
Monthly Rental IncomeTenant Security Deposits
Leasable Area
Leased Area
Occupancy
Acquisition PriceAppraiser
Appraisal
Appraisal Date
ValueAppraisal Value

Asset Overview
Ichigo Yotsuya 4 Chome Building
Trust beneficiary interest in real estate (juekiken)
4-3-20 Yotsuya, Shinjuku-ku, Tokyo
Mizuho Trust & Banking Co., Ltd.
November 30, 2010 – November 30, 2030
Freehold
123.79m2
Commercial
80%700%
Freehold
Office, Residence, RetailSteel, 11F
868.47m2
October 4, 2006
9 (as of June 30, 2024)
JPY 2.893 million (as of June 30, 2024)
JPY 28.023 million (as of June 30, 2024)
780.64m2 (as of June 30, 2024)
638.52m2 (as of June 30, 2024)
Oct 2022 Apr 2023 Oct 2023 Apr 2024
81.8%
81.8%
90.9%
81.8%
JPY 550 million
Daiwa Real Estate Appraisal Co., Ltd.
April 30, 2024
JPY 591 million

3Jun 2024
81.8%

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 ofDeposits Received
CapitalExpenditure
Net Profit
Cap Rate
Value via DCF Method
Discount Rate
Terminal Cap Rate

Ichigo Yotsuya 4 Chome Building
JPY 591,000,000
Daiwa Real Estate Appraisal Co., Ltd.
April 30, 2024
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and592,000,000
verified using a direct capitalization
valuation
596,000,000
35,589,137
Based on rent levels under current
contract, new rent levels and trends of40,620,144 similar assets located in nearby areas,
and the asset’s long-termcompetitiveness
2,031,007 Based on a vacancy rate of 5%
12,630,102
2,975,994 Based on historical actual amounts
2,550,852 Based on historical actual amounts
Based on an amount equivalent to 30%
1,240,250 of the average of the past 12 years ofengineering reports
1,093,053 Based on existing contractual fees
Equivalent to one month rent for a new
303,626 tenant based on tenant acquisition
costs at similar assets
4,237,300 Based on FY2023 actual amounts
74,670 Based on current actual amounts
154,357 Based on historical actual amounts
25,959,035
191,838 Based on a 1.0% investment yield
Based on an amount equivalent to 70%
2,893,917 of the average of the past 12 years ofengineering reports
23,256,956
3.9%
590,000,000
Base rate adjusted for individual risks
3.7%
assuming a holding period of ten years
4.1% Cap rate adjusted for uncertainties

4

Value via Cost Approach

682,000,000

Based upon the value recorded in thegovernment land assessment
Ratio of Land
84.8%(koujikakaku) and transactions ofsimilar assets
Based on current replacement costs
Ratio of Building
15.2% and depreciation due to building age
from engineering reports
Notes
Although the amount of lead contained in the soil underneath the building exceeds thegovernment standard, Ichigo Office has executed concrete coating measures pursuant to theSoil Contamination Countermeasures Act.

5

4. Seller Profile
Name

Trust East Real Estate Investment Company Limited

Address

6-20-2 Shinbashi, Minato-ku, Tokyo

Representative

Representative Director, Kinton Chan

CapitalJPY 100 million

Establishment Date

December 13, 2019

Net Assets

Renovation and sale of real estate investments, long-term
assets, and rental and investment properties; landdevelopment; real estate development and ownership
JPY 7,198 million (as of December 31, 2023)

Total Assets

JPY 28,835 million (as of December 31, 2023)

Major Shareholderand Shareholding
Ratio

TRUST BROWN REAL ESTATE INVESTMENT
LIMITED (Macau) 100%

Principal Business

Relationship to Ichigo Office and IIA
CapitalRelationship

N/A

Personnel
Relationship

N/A

Transactional
Relationship

N/A

Related Party
Treatment

N/A

5. Forward Commitment
Because the Transaction Date is November 29, 2024, the sale of the Ichigo Yotsuya 4
Chome Building (the “Sale”) constitutes a “forward commitment” by Ichigo Office as
stipulated in the “Comprehensive Guidelines for Supervision of Financial Instruments
Business Operators” by the Financial Services Agency.1
In the event of a violation of the provisions of the Sale by Ichigo Office or the buyer, theother party shall have the right to terminate the Sale and claim an amount equivalent to
10% of the purchase price as penalty.
As Ichigo Office is the seller, it is highly unlikely that Ichigo Office will not be able tofulfill its obligations under the Sale.
1

Forward commitment refers to a post-dated purchase and sales agreement under which
payment and property delivery shall be made at least one month after the conclusion of
the agreement, or any other agreement similar thereto.

6. Settlement Method
Ichigo Office will receive a deposit of JPY 50 million on the contract date and will
receive the remainder on the closing date.

6

7. Use of Proceeds
Ichigo Office will retain c. JPY 101 million of the JPY 422 million of gains on sale asretained earnings without incurring a tax burden, and distribute the remaining amounts
as dividends to shareholders for the April 2025 fiscal period. Gains on sale is calculated
by subtracting book value, brokerage fee, IIA’s gains on sale performance fee, and otherasset sale-related expenses from each building’s sale price. Ichigo Office will deploy theremainder of the sales proceeds towards strategic investments such as asset acquisitionsand value-add renovations to maximize shareholder value.
8. Earnings Impact
Today’s sale has been factored into Ichigo Office’s April 2025 fiscal period earnings
forecast announced in today’s release, “Upward Earnings Forecast Revision for theApril 2025 Fiscal Period.”7

(Reference) Post-Sale Portfolio
No.

Area1

Asset Name

O-02
O-03
O-04
O-05
O-06
O-07
O-09
O-10
O-11
O-12
O-15
O-16
O-17
O-19
O-20
O-21
O-22
O-23
O-24
O-26
O-27
O-28
O-29

Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya Kamiyamacho Building
Ichigo Shibakoen Building
Ichigo Ebisu Nishi Building
Ichigo Ginza 612 Building
Ichigo Uchikanda Building
Ichigo Tameike Building
Ichigo Jimbocho Building
Ichigo Hakozaki Building
Ichigo Kudan 3 Chome Building
Ichigo Gotanda Building
Ichigo Shin Yokohama Building
Ichigo Minami Ikebukuro Building
Ichigo Nakano North Building
Ichigo Eitai Building
Ichigo Ikejiri Building
Ichigo Nishi Ikebukuro Building
Ichigo Nishi Gotanda Building
Ichigo Kichijoji Building

O-34

Ichigo Sakae Building

O-37

Ichigo Marunouchi Building

O-38
O-39
O-42
O-46
O-47

Ichigo Toyamaeki Nishi Building
Ichigo Mirai Shinkin Building
Ichigo Takamatsu Building
Ichigo Kanda Nishikicho Building
Ichigo Akihabara North Building

O-48

Ichigo Sakaisuji Honmachi Building

O-49
O-50
O-51
O-52

Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building
Ichigo Ebisu Green Glass
Ichigo Omori Building

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major RegionalCities
Other Regional Cities
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Four Major RegionalCities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
8Acquisition
Price(JPY million)% ofPortfolio2

3,254
2,740
1,920
1,550
1,200
1,505
1,100
1,917
1,773
1,140
580
1,820
1,150
844
5,060
1,816
1,460
764
1,490
2,030
639
765
2,160

1.4
1.2
0.9
0.7
0.5
0.7
0.5
0.9
0.8
0.5
0.3
0.8
0.5
0.4
2.3
0.8
0.7
0.3
0.7
0.9
0.3
0.3
1.0

4,705

2.1

6,710

3.01,645
1,158
3,010
2,130
5,500

0.7
0.5
1.3
0.9
2.4

1,940

0.9

2,210
1,905
5,900
3,850

1.0
0.8
2.6
1.7

No.

Area1Asset Name

O-53
O-54
O-55
O-57
O-58
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69
O-70
O-71
O-72
O-73

Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Sendai East Building
Ichigo Kumamoto Building
Ichigo Jingumae Building
Ichigo Shibuya Dogenzaka Building
Ichigo Hiroo Building
Ichigo Sasazuka Building
Ichigo Nihonbashi East Building
Ichigo Sakurabashi Building
Ichigo Shinkawa Building
Ichigo Kudan Building
Ichigo Higashi Gotanda Building
Axior Mita
Ichigo Higashi Ikebukuro Building
Koriyama Big-i (Office Section)
Ichigo Kawasaki Building
Ichigo Shibuya East Building
Ichigo Ningyocho Building

O-74

Ichigo Nishi Honmachi Building

O-75

Ichigo Hakata Building

O-76

Ichigo Nishiki First Building

O-78
O-79
O-80

Ichigo Ikebukuro East Building
Ichigo Motoazabu Building
Ichigo Otsuka Building

O-81

Ichigo Nagoya Building

O-82

Ichigo Fushimi BuildingO-83

Ichigo Nishiki Building

O-84

Ichigo Minami Morimachi Building

O-85
O-86
O-87
O-88
O-89

Ichigo Shibuya Udagawacho Building
Win Gotanda Building
Ichigo Hongo Building
Oimachi Center Building
Win Gotanda Building 2

Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Other Regional Cities
Tokyo Metro Area
Central Tokyo
Central Tokyo
Four Major RegionalCities
Four Major RegionalCities
Four Major RegionalCities
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesCentral Tokyo
Central Tokyo
Tokyo Metro Area
Central Tokyo
Central Tokyo
9

Acquisition
Price(JPY million)% ofPortfolio2

1,580
3,430
1,174
1,840
1,450
7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570
1,660
1,750
1,350
1,450

0.7
1.5
0.5
0.8
0.6
3.2
1.6
1.8
2.1
2.1
1.1
1.1
1.4
1.6
0.8
2.0
0.7
0.8
0.6
0.6

2,190

1.0

1,380

0.6

2,000

0.9

3,010
1,8902,740

1.3
0.8
1.2

3,420

1.5

2,340

1.0

1,330

0.6

1,040

0.5

3,500
3,100
2,300
1,680
3,300

1.6
1.4
1.0
0.7
1.5

No.
O-90

MIF Building

O-91

Ichigo Uchi Honmachi Building

O-92
O-93

Ichigo Minami Otsuka Building
Ichigo Nogizaka Building

O-94

Ichigo Hakata East Building

O-95
O-96

Ichigo Nakameguro Building
Ichigo Tachikawa Building
Ichigo Higashi Ikebukuro 3 Chome
Building

O-97
O-98
O-99
O-100
O-101
O-102
O-103
O-104
O-105
O-106
O-107
Z-09
Z-10
Z-14

Acquisition
Price(JPY million)% ofPortfolio2

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

2,200

1.0

1,900

0.8

2,780
3,315

1.2
1.5

2,250

1.0

1,495
3,830

0.7
1.7

Tokyo Metro Area

3,840

1.7

1,750

0.8

3,500

1.6

2,750

1.2

1,875
3,240

0.8
1.4

3,080

1.4

1,700

0.8

1,550

0.7

3,950
1,946
219,565
1,210
2,400

1.8
0.9
97.8
0.5
1.1
0.6
2.2
100

Area1

Asset Name

Four Major Regional
CitiesFour Major Regional
Ichigo Hakataeki Higashi Building
CitiesFour Major Regional
Fukuoka Kensetsu Kaikan
CitiesIchigo Kinshicho South Building
Tokyo Metro Area
Ichigo Akihabara East Building
Central Tokyo
Four Major Regional
Ichigo Hakata Meiji Dori Building
CitiesFour Major Regional
Ichigo Hakata Gion Building
CitiesFour Major Regional
Ichigo Tenjin North Building
CitiesIchigo Gotanda West Building
Central Tokyo
Ichigo Otemachi North Building
Central Tokyo
Subtotal - Office (88 Assets)
Future IZUMIOther Regional Cities
Ichigo Shibuya Bunkamura Dori Building Central Tokyo
Ichigo Kamata Building
Tokyo Metro Area
Subtotal - Other (3 Assets)
Total (91 Assets)
Ichigo Marunouchi South Building

1

1,400
5,010
224,575

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.

10