OSAKI CN BUILDING and 3 Other Properties)
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May 17, 2021 This notice is the English translation of the Japanese announcement on May 17, 2021 REIT Issuer HEIWA REAL ESTATE REIT, Inc. 9-1 Nihonbashi Kabuto-cho, Chuo-ku, Tokyo Aya Motomura, Executive Director (Securities Code: 8966) Asset Management Company HEIWA REAL ESTATE Asset Management CO., LTD. Masanori Hirano, President & Representative Director Inquiries: Yoshio Ito, General Manager, Planning & Finance Department TEL. +81-3-3669-8771 Notice Concerning Acquisitions of Assets (OSAKI CN BUILDING and 3 Other Properties) HEIWA REAL ESTATE REIT, Inc. (hereinafter referred to as the “Investment Corporation”) announced today that HEIWA REAL ESTATE Asset Management CO., LTD. (hereinafter referred to as the “Asset Management Company”), the company to which the Investment Corporation entrusts its asset management operations, decided to execute the acquisition (hereinafter referred to as the “Acquisition”) of asset (hereinafter referred to as the “The Asset to be Acquired”). The details are as follows. Details 1. Overview of the acquisitions Proposed Appraisal Property Type of Investment Property Name Investment Area Acquisition Price Value Number Specified Asset Category (million yen) (Note 1) (million yen) Primary investment Trust beneficial area Of-47 OSAKI CN BUILDING interest in real Office 5,160 5,420 (Shinagawa -ku, estate Tokyo) Real estate and Primary investment HF SHOKOJI AKABANE Re-95 land lease rights Residence area 1,690 1,850 RESIDENCE Ⅱ (Note 2) (Kita-ku, Tokyo) Real estate and Primary investment Re-96 HF YAHIRO RESIDENCE land lease rights Residence area 1,220 1,330 (Note 2) (Sumida-ku, Tokyo) HF Real estate and Primary investment Re-97 SETAGAYAKAMIMACHI land lease rights Residence area 700 786 RESIDENCE (Note 2) (Setagaya-ku, Tokyo) Total 8,770 9,386 (Note 1) “Proposed acquisition price” is the price described in the trust beneficial interest transaction agreement or real estate transaction agreement (consumption tax excluded), and does not include the amounts of settlement for fixed property tax, city planning tax, etc. (Note 2) The Asset to be acquired is a building with leasing rights (leasing rights for the buildings and land). Land leasing rights are ordinary leasing rights. - 1 - (1) Agreement execution date: May 17, 2021 (2) Scheduled acquisition date: June 4, 2021 (3) Seller:Heiwa Real Estate Co., Ltd. (4) Acquisition financing: The proceeds from the issuance of new investment units (note 1), borrowings (note 2) and cash on hand (5) Payment method: Lump-sum payment at time of delivery (6) Brokerage: Not applicable (Note1) For more information, please see the Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units released today. (Note2) Details of Borrowing will be announced when determined. 2. Reason for the acquisition The Investment Corporation will continue to implement its basic principles, namely the steady growth of its investment portfolio and the achievement of medium and long term sustainable profit. We will aim to maximize unitholder value by striking a balance between steady growth & sustainable profit. We have decided on the acquisition because we expect to expand assets, improve the portfolio and increase unitholder value through property acquisitions and an increase in capital via the first public offering in about five and half years. (1) OSAKI CN BUILDING The property is conveniently located a 3-minute walk from Osaki Station on the JR Yamanote Line, the JR Saikyo Line, the JR Shonan-Shinjuku Line, and the Rinkai Line, and a 5-minute walk from Osakihirokoji Station on the Tokyu Ikegami Line. The Osaki area where the property is located is near Jonan Gozan, Ikedayama, Gotenyama, Shimazuyama, Hanabusayama, and Yatsuyama which have been long known as upscale residential areas where there was once a row of residences owned by Japanese feudal lords or former feudal lords. Since 1982, when the area was designated as a subcenter by the Tokyo Metropolitan Government, the area experienced rapid redevelopment and the expansion of its transport network. It is now a vital hub for transportation connecting central Tokyo and the suburbs. In addition, the development has resulted in a very sophisticated cityscape of large office buildings and high-rise apartment buildings. Additionally, many leading companies are headquartered in the area. The district supports Japanese industry and the economy. In terms of facilities provided, in addition to the features such as the ceiling, the height of which is 2,500 mm, a 100 mm raised floor (for IT cables), and individual air conditioning systems, a large renovation of the outer wall, the interior and the design of the co-owned area was completed in June 2020. Therefore, the property is highly competitive with the other office buildings in the area. One location feature of the property is the area of mixed residential and commercial properties with a row of mid-to-high-rise office buildings and high-rise apartment buildings along Yamate-Dori, which provides an environment of offices that customers visit. (2) HF SHOKOJI AKABANE RESIDENCE Ⅱ The Investment Corporation acquired HF SHOKOJI AKABANE RESIDENCE in March 2020. HF SHOKOJI AKABANE RESIDENCE Ⅱ is a residential property that the Asset Management Company's sponsor company, Heiwa Real Estate Co., Ltd. planned and developed for the Investment Corporation (hereafter "Heiwa Real Estate" in 2. "Reasons for the Acquisition"). The property is a 4-minute walk from Akabane-Iwabuchi Station on the Tokyo Metro Namboku Line, and a 13- - 2 - minute walk from Akabane Station on the JR Keihin-Tohoku Line/Saikyo Line. It has excellent access to central Tokyo and major office areas. For example, it is a 15-minute train ride from Akabane Station to Shinjuku Station (the ride time, hereinafter the same shall apply), a 20-minute train ride to Tokyo Station, and a 30-minute train ride from Akabane-iwabuchi Station to Otemachi Station or Nagatacho Station. The property is also adjacent to Tokyo Route No. 7 and No. 8 which connect to each quarter of central Tokyo and provide excellent accessibility by car. The area surrounding the property includes the colorful banks of the Arakawa River, including Arakawa Akabane Sakura Zutsumi green space, a famous cherry blossom viewing location, and the Arakawa Iwabuchizeki green space where people are able to barbeque. There are also sports facilities, including a baseball field and a soccer field. There are also many facilities that are convenient for daily living, including the Akabane Suzuran shopping district and Akabane Ichibangai shopping district. The property includes a total of 70 units in either a 25.92-26.12 m2 1K unit layout (49 units) or a 55.02-55.72 m2 2LDK unit layout (21 units). Demand is expected to be mainly from singles and two-income households with no children. Regarding the facilities provided, the property is equipped with auto-lock security, home delivery boxes, intercoms with video monitors, and other security features. In addition, the units feature bathrooms separated from toilets, air conditioners, heated bidets, cable TV, etc. It was completed in January 2020 and is fully competitive with nearby properties in terms of its facilities and the age of the property. (3) HF YAHIRO RESIDENCE The property is a residential property that was meticulously planned and developed by Heiwa Real Estate, the Asset Management Company' sponsor company, down to the smallest details including location and specifications, to ensure the properties perform based on the assumption that the Investment Corporation will own and operate them over the long term. The property is a 9-minute walk from Yahiro Station on the Keisei Oshiage Line. Yahiro Station, the nearest station, features convenient transportation to Shinagawa Station, Haneda Airport Station, Narita Airport Station, and the commercial districts of central Tokyo such as Nihombashi Station and Shimbashi Station via the Toei Asakusa Line and the Keikyu Main Line. The property is in a quiet area with mid-to-high-rise apartment buildings and detached houses lining the streets. The popularity of the residential area has increased since TOKYO SKYTREE was completed in May 2012, and the development of apartment buildings has rapidly progressed in the area. The property includes a total of 64 units in either a 25.21 m2 1DK unit layout (44 units) or a 40.48-40.70 m2 1LDK unit layout (20 units). Demand is expected to be mainly from singles and two-income households with no children. Regarding the facilities provided, the property is equipped with auto-lock security, home delivery boxes, intercoms with video monitors, and other security features. In addition, the units feature bathrooms separated from toilets, air conditioners, heated bidets, cable TV, etc. It was completed in November 2020 and is fully competitive with nearby properties in terms of its facilities and the age of the property. (4) HF SETAGAYAKAMIMACHI RESIDENCE The property is a residential property that was meticulously planned and developed by Heiwa Real Estate, the Asset Management Company' sponsor company, down to the smallest details including location and specifications, to ensure the properties perform based on the assumption that the Investment Corporation will own and operate them over the long term. The property is a 4-minute walk from Kamimachi Station on the Tokyu Setagaya Line and is walking distance - 3 - from Kyodo Station on the Odakyu Line. It has excellent access to many areas including central Tokyo. It is a 14- minute train ride (ride time) from Kamimachi Station to Shibuya Station via Sangen-jaya Station and it is walking distance from Sakura-shimmachi Station on the Tokyu Den-en-toshi Line. In addition, the area is blessed with nature and is part of one of Tokyo's most popular residential areas that includes the Shoin Shrine enshrining Shoin Yoshida and his pupils, an academic neighborhood including Nihon University and Kokushikan University, and Baji Koen Equestrian Park, Kinuta Park, and Komazawa Olympic Park, which are all nearby.