Ichigo Office(8975)

Today’s Strategic Asset Acquisition and SaleMay 29, 2019

Ichigo Office REIT Investment Corporation (8975)
Ichigo Investment Advisors Co., Ltd.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

www.ichigo-office.co.jp/english

This material provides supplementary explanatory information withrespect to today’s asset acquisition and sale as detailed in the below
release:“Acquisition of Office Asset (Ichigo Hakata East Building) and Sale ofRetail Asset (Ichigo Fiesta Shibuya Building),” May 29, 2019

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Make The World
More Sustainable© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

Today’s Transactions Drive Further Growth
Gains on Sale Significantly Exceed Unrealized Gains & Increase Portfolio’s
Exposure to Mid-Size Office Assets with Rental Growth Upside
Objectives– Generate Positive Portfolio Outcomes
Portfolio

JPY 203B → JPY 203.2B

Office %94.6% → 95.5%

NOI+JPY 12M per annum– Drive sustainable growth leveraging Ichigo sponsor support
 Despite sale, retained preferential negotiation right to buy back Ichigo Fiesta Shibuya Building if Ichigo redevelops
 Approach supports sustainable growth strategy leveraging Ichigo’s value-add capabilities– Generate Gains on Sale significantly higher than appraisal-based Unrealized Gains (i.e., Sale Price > Appraisal Value) Gains on sale (JPY 400M) to be retained subject to J-REIT conduit rules and used to fund growth investments
such as the Ichigo Hakata East Building acquisition
Asset Sale (Ichigo Fiesta Shibuya Building)– AreaShibuya-ku, Tokyo– Book Value
JPY 1.96B– Appraisal Value
JPY 2.21B– Closing Date
May 30, 2019
– Sale Price
JPY 2.4B– Gains on Sale
JPY 400M

Asset Acquisition (Ichigo Hakata East Building)
AreaFukuoka

Location

4-min walk from Hakata Station on JR
Lines & Fukuoka City Subway Kuko Line

Closing Date

May 31, 2019

Acquisition Price

JPY 2.25B

NOI Yield atAcquisition

5.2%

Occupancy

98.1%

Description

Mid-size office located in Fukuoka’scentral commercial district© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

4Driving Higher NOI & Harvesting Gains in Strong Market
Acquisitions and Sales Over Past Two Years
April 2017 & October 2017

Sales
(10 assets)

April 2018 & October 2018

Acquisitions & Sales

Acquisitions & Sales• Sold 4 assets (serviced• Sold 3 retail assets toapartments and retailassets) to Ichigo• Sale price JPY 4.4B
(Gains on sales JPY 30M)

Acquisition

April 2019

October 2019

Acquisitions & Sales

Acquisition & Sale

• Sold 2 retail assets to third-

third-party• Sold 1 retail asset

party• Sale price JPY 6B

to Ichigo• Sale price JPY 3.6B

(Gains on sales JPY1.59B)• Sale price JPY 2.4B

(Gains on sales JPY 640M)(Gains on saleJPY 400M)

Ichigo Fiesta Shibuya
Building• Acquired 3 mid-size office• Acquired 2 mid-size• Acquired 1 mid-

• Acquired 2 mid-size office• Acquired 1 mid-size

assets from Ichigo• Acquisition price JPY 7B

office assets fromIchigo• Acquisition price JPY
5.5B

size office asset
from third-party• Acquisition price
JPY 1.9B

assets from third-parties• Acquisition price JPY 6B

office asset from Ichigo• Acquisition price
JPY 2.25BAcquisitions(9 assets)

WinGotanda
Building

IchigoHongo
Building

OimachiCenterBuilding

Win Gotanda
Building 2MIF
Building

IchigoUchi Honmachi Building

Ichigo Minami
IchigoOtsuka Building Nogizaka Building

Portfolio Size

JPY 194.5B → JPY 203.2B (+JPY 8.7B)

NOI Increase*Office %88.1% → 95.5% (+7.4%)

Gains onSales

Outcomes

Ichigo Hakata East
Building

JPY 290M per annum+JPY 2.71B* NOI Increase = Forecast NOI of acquired assets calculated by IIA minus actual NOI of sold assets© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Acquisition: Ichigo Hakata East Building (O-94)
Mid-Size Office Building Located in Fukuoka’s Main Commercial District
Asset Overview
Acquisition Price

JPY 2.25B

Appraisal Value

JPY 2.48B

NOI Yield

5.2%

Asset TypeOffice

Location

1-13-6 Hakataeki Higashi, Hakata-ku,
Fukuoka

Leasable Area

2,918.31m2

Structure

Steel Reinforced Concrete, 8F

Date Built

June 2002

Occupancy

98.1% (as of April 30, 2019)

Location and Features
・A mid-size office building located within a four-minute walk from
Hakata Station on the JR Lines and the Fukuoka City Subway
Kuko Line.
・The building is located in Fukuoka’s main commercial district.
・Each floor has a standard floor plate of 120 tsubo (c. 396m2)
with a standard ceiling height of 2.7m, and is equipped withindividual air conditioning systems and raised-access floors,and is thus capable of catering to diverse tenant needs.
・Tenants include a cosmetics manufacturer, a security company,a construction consultancy, and the branch and sales offices oflisted Japanese companies.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Reference: Remaining Non-Office Assets
Post-Transaction: Five Retail Assets
Unrealized Gains: JPY 1.8B (+21% vs. Acquisition Price)(JPY million)
No.

Asset Name

Z-09 Konami Sports Club Izumi Fuchu

AreaAcquisition
Price(JPY M)

Location

Other Regional Cities Izumi City, Osaka

Book Value(JPY M)

Leasable
Area (m 2)

Oct 2018
Unrealized
Appraisal ValueGain(JPY M)%
Unrealized
Gain

1,210

1,095

3,733.68

1,440+344+31.5%

Z-10 Ichigo Shibuya Bunkamura Dori Building Central Tokyo

Shibuya-ku, Tokyo

2,400

2,464

778.773,220+755+30.6%

Z-11 Twicere Yokohama Isogo (Retail Section) Tokyo Metro Area

Yokohama City, Kanagawa

1,620

1,518

2,717.77

1,880+361+23.8%

Z-12 Lions Square Kawaguchi

Tokyo Metro Area

Kawaguchi City, Saitama

2,430

2,376

7,788.09

2,710

+333

+14.0%

Z-14 Ichigo Kamata Building

Tokyo Metro Area

Ota-ku, Tokyo

1,400

1,447

2,124.68

1,520+72+5.0%

9,060

8,902

17,142.99

10,770+1,867+21.0%

Total

Book Value, Appraisal Value, Unrealized Gain, and % Unrealized Gain (i.e., Book Value premium to Acquisition Price) are as of October 31, 2018.
© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Notesp. 4 Calculations• NOI of sold asset: Annualized NOI of sold asset based on October 2018 actual• NOI of acquired asset: Annualized forecast NOI of acquired asset calculated by IIA• Unrealized Gains: Appraisal value minus book value at time of sale
• Gains on Sale: Sale price (including property and city planning taxes) minus book value and expected sale-relatedexpenses© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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MEMO

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

9

MEMO

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as, anoffer to sell or a solicitation of an offer to buy any securities of Ichigo Office REIT Investment Corporation (“Ichigo Office”).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of management ofIchigo Office with respect to financial condition and future results of operations. These statements are based on certain
assumptions founded on currently available information. Accordingly, such statements are subject to risks, uncertainties andassumptions and there is no assurance as to actual financial conditions or results of operations. Actual results may vary fromthose indicated in the forward-looking statements. Accordingly, please refrain from solely relying on these statements.
These materials have been created by the management of Ichigo Office and Ichigo Investment Advisors Co., Ltd. (IIA) with thebelief that the information contained is accurate. However, there is no assurance given as to the accuracy, certainty, validity or
fairness of any such information. Please note that the content of these materials is subject to revision or retraction without priornotice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation, theJapanese version shall prevail. No copying or reproduction of these materials or part of these materials is allowed withoutobtaining prior consent from Ichigo Office and IIA.

Ichigo Office REIT IR Desk
TEL：03-3502-4891
IR_Office@ichigo.gr.jp
www.ichigo-office.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© Ichigo Investment Advisors Co., Ltd. Ichigo Office REIT Investment Corporation All rights reserved.

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