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.

October 31, 2022
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Takaaki Fukunaga, 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

Sale of Portfolio Asset (Ichigo Ikenohata Building)
Ichigo Office decided today to sell one of its assets, the Ichigo Ikenohata Building.
1. Asset Sale Summary

1
2

Asset Number
Asset Name

O-77
Ichigo Ikenohata Building

Asset Type

OfficeDate Built

June 27, 1991

Form of Ownership

Trust beneficiary interest in real estate (juekiken)

Acquisition Date

May 24, 2016

Buyer1A Third-Party Japanese Company

BrokerA Third-Party Broker

Sale Price2 (A)JPY 10,600 million

Book Value3 (B)JPY 5,111 million

Sale Price vs.
Book Value3(A) – (B)JPY 5,488 million

Appraisal Value4

JPY 5,500 million

Contract Date

October 31, 2022

Closing Date

December 20, 2022

Legal Form ofTransaction

Sale of trust beneficiary interest in real estate (juekiken)

The buyer did not provide consent to disclose its name.
Sale Price is the sale price of the asset excluding incidental expenses such as fees andproperty, city planning, and consumption taxes.
13Book Value is an estimate based upon the most recent book value (April 2022 fiscal
period-end), adjusted for expected capital expenditures and depreciation through the
Closing Date.

4

Appraisal Value is calculated by Tanizawa Sogo Appraisal as of April 30, 2022,
pursuant to both the appraisal guidelines of Ichigo Investment Advisors Co., Ltd.
(“IIA”) and the rules of the Investment Trusts Association of Japan.

2. Sales 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, and recently acquired a mid-size office with high growth potential
located in Ikebukuro, a commercial and entertainment district in Toshima Ward, in June
2022.
Today’s asset sale is an office building located in Taito Ward. After receiving an offerfrom the buyer for a price that is 2.1 times book value and 1.9 times recent appraisal
value, Ichigo Office decided that the sale of this asset would be positive for its
shareholders in light of anticipated increases in capital expenditures required for facility
upgrades and the uncertain outlook for rent levels in the area.
This asset sale is forecast to generate a gain on sale of JPY 4.39 billion, of which Ichigo
Office will retain a portion, up to an amount such that no tax burden will arise, as
retained earnings.
Ichigo Office will use the proceeds from this asset sale for strategic investments such as
asset acquisitions and value-add capex to offset any loss of rental income from this asset
sale and therefore maintain portfolio earnings and dividends.

2

3. Details of the Ichigo Ikenohata Building
Asset Name
Form of Ownership
Location
Property Right
Area
Land
ZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Number of Tenants
Monthly Rental Income
Tenant Security Deposits
Leasable Area2
Leased Area2
Occupancy
Acquisition PriceAppraiser
Appraisal
Appraisal Date
Value
Appraisal Value

Asset Overview
Ichigo Ikenohata Building
Trust beneficiary interest in real estate
1-2-18 Ikenohata, Taito-ku, Tokyo
Freehold
1,120.22m2
Commercial
80%600%
Freehold
OfficeSteel Reinforced Concrete, 8 floors & 1 basement floor
7,774.41m2
June 27, 1991
7 (as of September 30, 2022)
JPY 25.284 million (as of September 30, 2022)
JPY 150.517 million (as of September 30, 2022)
5,504.15m2 (as of September 30, 2022)
5,504.15m2 (as of September 30, 2022)
Oct 2020 Apr 2021 Oct 2021 Apr 2022
100%
100%
100%
100%
JPY 5,130 million
Tanizawa Sogo Appraisal Co., Ltd.
April 30, 2022
JPY 5,500 million3

Sep 2022100%

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 Fees
Leasing Brokerage Fees
Taxes
Insurance Premiums
Other Expenses
Net Operating Income(NOI)
Income on Investment of
Deposits Received
CapitalExpenditures
Net Profit

Ichigo Ikenohata Building
JPY 5,500,000,000
Tanizawa Sogo Appraisal Co., Ltd.
April 30, 2022
Amount (JPY)Note
Calculated using an income approach,with a DCF valuation as a basis and
5,500,000,000
verified using a direct capitalization
valuation
5,650,000,000
341,726,432
Based on expected long-term, stablerental income, common area service
361,458,981
income, parking lot income, and otherincomeBased on long-term, normalized
19,732,549
vacancy rates
85,519,462
Based on an analysis of expenses of
19,154,442 similar assets and historical actual
amounts
Based on historical actual amounts and20,211,239
reference to similar assets
Based on engineering reports and
11,350,000
reference to similar assets
Based on existing contractual fees and
4,485,205
reference to similar assets
Based on expected turnover rate and2,504,840 historical actual amounts, andreference to similar assets
26,579,300 Based on FY2021 actual amounts
Based on historical actual amounts and892,710reference to similar assets
341,726 Based on actual amounts
256,206,970
1,378,311 Based on a 1.0% investment yield
26,105,000

Based on engineering reports andreference to similar assets

231,480,281
Based on transactions of similar assets
while taking into account the asset’s
4.1% location and specific characteristics,
rights, and terms and conditions of thecontract

Cap Rate

4

Value via DCF Method

5,440,000,000
Based on yields of similar assets andfinancial assets, taking into
4.2%
consideration the asset’s location andspecific characteristics
4.3% Cap rate adjusted for uncertainties

Discount Rate
Terminal Cap Rate
Value via Cost Approach

5,620,000,000

Based upon the value recorded in thegovernment land assessment
Ratio of Land
89.1%
(koujikakaku) and transactions ofsimilar assets
Based upon the replacement cost
Ratio of Building
10.9% specified in engineering reports anddepreciation
Notes
Given that demand for the building comes primarily from investors, the appraisal value wasdeemed more appropriate as it better reflects current market prices compared to a value
derived from the cost approach.
4. Buyer Profile
Name

The buyer, a third-party Japanese company, did notprovide consent to disclose its name.

Relationship with
Ichigo Office or IIA

The buyer does not have any material capital,
personnel, or transactional relationships with Ichigo
Office or IIA. In addition, the buyer is not a related
party as defined in the Enforcement Ordinance of theInvestment Trust and Investment Corporation Law or
the internal rules of IIA.

5. Broker Profile
Name

The broker did not provide consent to disclose its
name.

Relationship with
Ichigo Office or IIA

The broker is not a related party as defined in the
Enforcement Ordinance of the Investment Trust andInvestment Corporation Law or the internal rules of
IIA.

Brokerage Fee

The broker did not provide consent to disclose
the fee.

6. Forward Commitment
Because the Closing Date is December 20, 2022, over one month from today, the sale ofthe Ichigo Ikenohata 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, the5other party shall have the right to terminate the Sale and claim an amount equivalent to
20% of the purchase price as penalty.
Because Ichigo Office is the seller and therefore does not bear risks such as financing
needs, it is highly unlikely that Ichigo Office will not be able to fulfill its obligations
under the Sale.
1

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

7. Settlement Method
JPY 1,060 million payment on the Contract Date with the remainder fully paid on the
Closing Date.
8. Use of Sale Proceeds
Ichigo Office will distribute the gain on sale as part of dividends to shareholders, andwill deploy the remainder of the sales proceeds towards strategic investments such as
asset acquisitions and value-add capex.
9. Earnings Impact
The impact of today’s asset sale on Ichigo Office’s April 2023 fiscal period earnings has
been reflected in the forecast presented in today’s Ichigo Office release “Earnings
Forecast Revision for the April 2023 Fiscal Period.”
There is no change to the October 2022 fiscal period earnings forecast.

6

Reference: Post-Asset-Sale Portfolio
Asset Name

1

Area

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-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

1.1

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

7

No.

Area1

Asset Name

Acquisition
Price2(JPY million)% ofPortfolio3

1,940

1.0

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

1.2

O-66 Ichigo Kudan Building

Central Tokyo

3,190

1.6

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

0.9

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-78 Ichigo Ikebukuro East Building

Central Tokyo
Four Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesTokyo 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

2,740

1.3

O-48 Ichigo Sakaisuji Honmachi Building

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

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No.

Area1

Asset Name

Acquisition
Price2(JPY million)% ofPortfolio3

3,420

1.7

2,340

1.1

1,330

0.7

1,040

0.5

3,500

1.7

O-85 Ichigo Shibuya Udagawacho Building

Four Major Regional
CitiesFour 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

1.4

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

O-97 Ichigo Higashi Ikebukuro 3 Chome Building Tokyo Metro Area

3,840

1.9

Subtotal - Office (81 Assets)

197,537

96.8

O-81 Ichigo Nagoya Building
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 (85 Assets)

204,167

100

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.

9