For Translation Purposes Only June 21, 2013 for Immediate Release
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For Translation Purposes Only June 21, 2013 For Immediate Release United Urban Investment Corporation Hisamitsu Abe Executive Officer (Securities Code: 8960) Asset Management Company: Japan REIT Advisors Co., Ltd. Kenichiro Oikawa President and CEO Inquiries: Kenichi Natsume Chief Financial Officer TEL: +81-3-5402-3680 Notice Concerning Acquisition of Properties United Urban Investment Corporation (“United Urban”) hereby announces its decision to acquire properties as set forth below on June 21, 2013. 1. Acquisition of the Property United Urban will acquire the following trust beneficial interests in real estate (referred to as individually or collectively, the “Property to be Acquired” or “Properties to be Acquired”). Scheduled Scheduled Property Type of Use Property Name Location Acquisition Price Acquisition Date Number (Note 1) (Note 1) Call center, data E3 center, backup Tsubogawa Square Building Naha, Okinawa ¥4,150 million November 1, 2013 office, etc. (Note 2) GRAND-ROUGE D25 Apartment (Note 3) Osaka, Osaka ¥1,380 million June 25, 2013 Nakanoshima-minami Total ¥5,530 million — (Notes) 1. In order to ensure that each of the Properties to be Acquired is acquired on the respective scheduled acquisition dates, United Urban executed a sale and purchase agreement of trust beneficial interest (referred to as collectively or individually the “Sale and Purchase Agreement” or “Sale and Purchase Agreements”) with each seller of the Properties to be Acquired. The scheduled acquisition prices shown are based on the purchase prices stated in the respective Sale and Purchase Agreements. In addition, the prices are shown in the amount excluding acquisition costs, consumption taxes and other costs. Please refer to “4. Matters on Forward Commitments” below for details of the Sale and Purchase Agreements. 2. Specific use based on the current status of the building are shown. 3. Of the types indicated on the real estate register, the primary types are shown. 2. Reasons for Acquisition In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Properties to be Acquired for the purpose of expanding the asset size, enhancing the quality and profitability of the portfolio, and further diversifying its investment assets in the type of use. The Properties to be Acquired is consisted of (i) a building in Naha, Okinawa, which serves primarily as a call center and other uses including a data center and a backup office, and (ii) a rental apartment in Nishi-ku, Osaka, Osaka, and both properties are anticipated to exhibit strong competitiveness as described later. The lineup of these two different types of property is unique to United Urban, a diversified J-REIT. This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of properties by United Urban Investment Corporation, and not for the purpose of soliciting any investment. United Urban asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issue of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by United Urban, and that the investment decisions are made at their discretion and responsibility. 1 United Urban considers that the expansion in asset size and diversification of investment assets to be achieved through the acquisition of the Properties to be Acquired will improve the profitability and stability of the portfolio, which will result in a stable growth in the medium- to long-term, and thus enable United Urban to pay out a stable cash distribution. After the acquisition of the Properties to be Acquired, the asset size of United Urban will total ¥476.7 billion (based on acquisition price), and the number of properties will be 99. Moreover, for details of the Properties to be Acquired, please refer to “3.Details of Acquisition” below. 3. Details of Acquisition A. Tsubogawa Square Building (1) Reason for Acquisition In making the decision to acquire Tsubogawa Square Building (hereinafter, the “Property” in this section A), the following aspects were especially appreciated. 1. Location The property is located in front of Tsubogawa Station on the Okinawa Urban Monorail (“Yui Rail”) in Naha, Okinawa. It is a convenient location as it takes only 5 minutes to Kencho-mae Station in central Naha, and 10 minutes to Naha Kuko (Airport) Station, using the Yui Rail services. The property is facing the national route 329 (“Naha-higashi Bypass”) which is leading to the eastern part of the main island of Okinawa. Using the Naha-higashi Bypass, which is connecting to several national roads running north- and south-bound in Okinawa Prefecture, the Property is easily accessible from both inside and outside of the Naha City. In Okinawa Prefecture, where the Property is located, the manufacturing industry accounts for a small portion in the entire industry. Meanwhile, in the tertiary industry, the call center and data center businesses accounts for a large portion, except for the tourism. It is reflecting a strong corporate demand for call center and data center in Okinawa, due to such reasons as (i) geographical dispersion will mitigate companies’ earthquake risk, (ii) a stable electricity supply based on thermal power generation is available, (iii) labor cost is relatively cheap compared to that in major cities in mainland Japan and (iv) subsidization from the city and the prefecture is available, etc. 2. Building The Property, built in 2009, is relatively new and comprised of a main building (the “Business Tower”) and its attached building (the “Parking Tower”). The building of the Business Tower boasts a high specification with a floor height of 2,800 mm and a maximum floor weight of 1,200kg/m2. The Entrance hall is equipped with a security gate, which is rare in Okinawa, and along with the clerks at the front desk operating round-the-clock, the building security is tight. In addition, the electricity is provided from two different electric power substations, and the tenants are granted places to install emergency power generator, making the building ready for electric blackouts and other disasters. Therefore, this building is suitable not only for a call center, but also for a data center or a backup office. The Parking Tower has a parking space for approximately 450 passenger vehicles. Having this abundant parking space is advantageous not only in day-to-day business but also in hiring employee, especially in Okinawa where an automobile is an important means of transportation. The large capacity of the Parking Tower, along with the high specification of the Business Tower, differentiates the Property from other properties. 3. Tenants, etc. Due to its advantages in its traffic convenience, security and BCP (Business Continuity Planning), the Property has been leased to major IT companies, telecommunication companies, etc. and has been used primarily as a call center and for other uses including a data center and a backup office. In addition, the convenience store on the first floor of the Business Tower is serving for the workers of the Business Tower. (2) Summary of Acquisition 1. Asset to be Acquired : Trust beneficial interest in real estate (Note) This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of properties by United Urban Investment Corporation, and not for the purpose of soliciting any investment. United Urban asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issue of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by United Urban, and that the investment decisions are made at their discretion and responsibility. 2 2. Property Name : Tsubogawa Square Building 3. Scheduled Acquisition Price : ¥ 4,150 million 4. Agreement Date : June 21, 2013 (conclusion of the Sale and Purchase Agreement) 5. Scheduled Acquisition Date : November 1, 2013 (transfer of trust beneficial interest) 6. Seller : RANIKA G. K. 7. Financing : Borrowing (scheduled) 8. Date of Payment : November 1, 2013 (scheduled) (Note) As of today, the Property has not been entrusted. However, the current owner of the Property (the seller) will entrust the Property to Mitsubishi UFJ Trust and Banking Corporation acting as the trustee by the scheduled acquisition date and United Urban will acquire the Property in the form of trust beneficial interest in real estate. (3) Outline of the Property Property Name Tsubogawa Square Building Type of the Property Trust beneficial interest in real estate (Note 1) Trustee Mitsubishi UFJ Trust and Banking Corporation (Note 1) Period of Trust Agreement From November 1, 2013 to June 30, 2023 (Note 1) Lot number 3-3-5, 20 Tsubogawa, Naha, Okinawa Location (Note 2) Residential 3-3-5 Tsubogawa, Naha, Okinawa 1-minute walk from Tsubogawa Station (Okinawa Urban Monorail) (Yui Access Rail) Use (Note 2) Office, retail (attached building: parking lot) Land 5,294.63 m2 Site Area (Note 2) Building 14,742.80 m2 (attached building (Parking Tower: 11,147.79 m2) Structure and Scale(Note 2) S 11F (attached building: RC 7F) Land: Proprietary Ownership Type of Ownership Building: Proprietary Ownership Completion Date (Note 2) June, 2009 Scheduled Acquisition Price ¥4,150 million Appraisal Value ¥4,410 million Date of Value Estimate April 30, 2013 Appraisal Agency Appraisal by Japan Real Estate Institute (Appraisal Method) Probable Maximum Loss (PML) 8% Collateral None (Administrative laws and regulations) The Parking Tower, which is the attached building to the Property, shall serve, in principle, for the users of the Business Tower, which is the main building of the Property. Therefore, it is restricted (i) for a party who is not a user of the Business Tower to use the Parking Tower, and (ii) to lease Special Notations the Parking Tower to an outsider of the Property.