[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
June 28, 2021
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset Manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Sale of Domestic Trust Beneficiary Interest
Invincible Investment Corporation (“INV”) is pleased to announce the decision to sell a trust beneficiary interest(the “Sale”) in Lexington Plaza Hachiman, a retail facility (the “Property” or “Asset to be Sold”) as decided
today by Consonant Investment Management Co., Ltd. (“CIM”), the asset manager of INV.
1.

Overview of Sale(in million yen)
Property
Number

Property Name

B17

Lexington Plaza Hachiman

Book
Value1

AnticipatedSale Price2

ExpectedGain on
Sale3

2,980

3,660

590

Transferee4
KubotaHoldings

AnticipatedSale DateJuly 2, 2021

(Note 1) As of December 31, 2020. The same shall apply hereinafter.
(Note 2) Anticipated sale price does not include adjustments for property taxes or city planning taxes, or national or local
consumption taxes. The same shall apply hereinafter.
(Note 3) Expected gain on sale is calculated by deducting the estimated transfer related cost and is an estimate as of today, andis subject to change upon finalization of the financial results. The same shall apply hereinafter.
(Note 4) For an overview of the transferee, please refer to “4. Overview of Transferee” as described below.
(Note 5) The broker in connection with the Sale is not a related party of INV/CIM.
(Note 6) Amounts are rounded down to the nearest million yen. The same shall apply hereinafter.

2.

Reasons for Sale
CIM decided to sell the Property by comprehensively considering portfolio strategy, trends in the real estatemarket and characteristics of the Property.

While the Property is a retail facility, which falls into thecategory of non-core asset (Note) in INV’s portfolio, the sale price of the Property is equal to the latest
This English language notice is a translation of the Japanese-language notice released on June 28, 2021 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances aregiven regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

1appraisal value and exceeds the book value by 22.8%, which will deliver a gain on sale of JPY 590 million
for the fiscal period ending December 2021.
INV’s investors.

Thus INV believes that the Sale is in the best interest ofIn addition, as described in “7. Use of Sale Proceeds” below, INV will appropriate a large

portion of the sale proceeds to the repayment of debt in an indirect way, in an aim to maintain anappropriate LTV ratio.
(Note) Properties other than Core Assets, i.e., hotels and residential properties.

3.

Details of the Assets to be Sold
Details of the Assets to be Sold and the appraisal reports are as follows.
Unless otherwise noted, information on the date is as of December 31, 2020 and total rental revenue
indicates that for the fiscal period ended December 31, 2020.
[Details]
B17: Lexington Plaza Hachiman

Type of Specified Assets

Trust Beneficiary Right

Property Right

Land: Ownership / Building: Ownership

Location

3-1-50 Hachiman, Aoba-ku, Sendai-shi, Miyagi

Purpose of Use
Appraisal Value
Valuation)

Retail(DateofAppraisal Firm

JPY 3,660 million (as of June 30, 2021)
JLL Morii Valuation & Advisory K.K.

Outline of a Lease Contract
Total number of tenants

1Rental Revenue

JPY 159,025 thousand

Tenant Leasehold
and security deposit

JPY 146,777 thousand

Total Leasable area (m2)2

Total Leased area (m )Occupancy Trend

8,419.15
8,294.42
As of the end of
Dec. 2018

As of the end ofJun. 2019

As of the end ofDec. 2019

As of the end ofJun. 2020

As of the end ofDec. 2020

100.0％

100.0％

98.5％

98.5％

98.5％

This English language notice is a translation of the Japanese-language notice released on June 28, 2021 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances aregiven regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancybetween this translation and the Japanese original, the latter shall prevail in all respects.

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[Summary of Real Estate Appraisal Report]
B17: Lexington Plaza Hachiman
Summary of Real Estate Appraisal Report
Appraisal Value

JPY 3,660 million

Appraisal Firm

JLL Morii Valuation & Advisory K.K.

Date of Valuation

June 30, 2021 (Note)
Item

1. Value of Profits using the Profit Capitalization Method(1) Direct Capitalization Method

ContentsOverview(JPY thousand)
3,660,000
3,660,000(I) Operating Revenue [(a)-(b)]324,901(a) Total Potential Revenue

334,895(b) Vacant Room Losses, etc.

9,994

Based on medium-to long-term potential revenue of current leasing
conditions and market level
Based on occupancy rate and supply and demand trends ofcomparable assets and historical data from previous years of subject
real estate(II) Operating Costs (Expense Rate)[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]122,830
Based on maintenance and management costs of historical data(c) Maintenance and Management Costs

19,868(d) Utility Costs

70,902(e) Repair Costs

2,515

30% of estimate in the engineering report(f) Property Management Fee

4,795

Based on historical data, contract and market(g) Tenant Solicitation Expenses

1,467(h) Taxes and Public Dues

23,018(i) Non-life Insurance Premiums(j) Other Costs(III) Net Operating Income [(I)-(II)]265

from the previous year and comparable assets
Based on utility costs of historical data from the previous year andcomparable assets

Based on historical data from previous years and terms of rental ofcomparable assets
Based on the documents relating to taxes and public dues
Based on insurance premiums as well as comparable assets0202,071(k) One-time Investment Gains

1,360

Assume investment return as 1.0%(l) Capital Improvements and Expenses

5,868

70% of estimate in the engineering report(IV) Net Income[(III)+(k)-(l)-(m)]197,563
Based on local standard yield which is adjusted by adding andCapitalization Yield

5.4％

subtracting spreads with consideration of the property’s individuality,building and other conditions, future uncertainty and comparable
assets’ transaction yields(2) DCF Method
Discount Rate

3,650,000

4.9％

Based on comparable assets’ investment yield with consideration ofthe characteristics of the property
Based on comparable assets’ transaction yield with consideration ofFinal Capitalization Yield

5.6％

future trend in investment yield, risks as an investment target, general
forecasts of future economic growth rates, trends in real estate prices
and rents, etc.

2. Estimated Price using Cost Method

3,190,000

Land Ratio

73.7％

Building Ratio

26.3％
Judged that income approach value truly replicates the price formation process from an

Other Points to be Noted for Appraisal by Appraisal Firm

income perspective, is more persuasive and adopted the Income Price, with the cost approachvalue as a referenceThis English language notice is a translation of the Japanese-language notice released on June 28, 2021 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances aregiven regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

3

(Note) In connection with the decision of the Sale, INV obtained a real estate appraisal report on June 23, 2021
with a valuation date of June 30, 2021, which is immediately prior to the anticipated sale date.

4.

Overview of Transferee
(i)

Name

Kubota Holdings

(ii)
(iii)

4-4-33 Ichiban-cho, Aoba-ku, Sendai, Miyagi

(iv)
(v)

Location
Title and name ofrepresentative officer
BusinessCapital(vi)

Date of establishment

March, 2015

(vii)

Net Assets

Not disclosed (Note)(viii

Not disclosed (Note)
Total Assets
Major
shareholders
andNot disclosed (Note)shareholding ratio
Relationship between INV/Asset Manager and the Company
The company does not have any capital relationship of note with
Capital relationships
INV or CIM.
The company does not have any personnel relationship of note with
Personnel relationships
INV or CIM.

(ix)
(x)

Transactional relationships
Whether the Tenant/Operator
is a related party

Sadamu Kubota, Representative Director and President
Real estate business and solar power generation business
JPY10 million (as of March 31, 2021)

The company does not have any transactional relationship of notewith INV or CIM.
The company is not a related party of INV/CIM. Further, related
persons and affiliates of the company are not related parties ofINV/CIM. Furthermore, the company is not an interested party, etc.
of CIM as provided in Investment Trust Act.

(Note) Not disclosed because consent from the transferee has not been obtained.

5.

Transactions with Interested Persons etc.
Not applicable.

6.

Schedules
Sale decision date:
Anticipated agreement execution date:
Anticipated sales date:
Anticipated sale proceeds payment method:

7.

June 28, 2021
July 2, 2021
Lump-sum payment on settlement

Use of Sale Proceeds
The proceeds of the Sale will be reserved as cash on hand.

Prior to the Sale, or on June 30, 2021, INV

plans to repay Term Loan (D) in the amount of JPY 2,733 million due on June 30, 2021, with cash on hand.
Therefore, INV intends to replenish the cash on hand which will decrease by such repayment.

This English language notice is a translation of the Japanese-language notice released on June 28, 2021 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances aregiven regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

48.

Future Outlook
INV is expected to report a gain on sale of JPY 590 million from the Sale for the fiscal period ending
December 2021.
Since INV needs to carefully assess the impact of COVID-19, the forecast of financial results for the fiscal
period ending December 2021 (from July 1, 2021 to December 31, 2021) will be announced at a later date,once we have a clearer outlook.

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on June 28, 2021 and was prepared solely for the convenience of, and referenceby, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own
investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances aregiven regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5