COMODIO Shiodome)
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June 28, 2012 To All Concerned Parties Name of REIT Issuer: Nippon Building Fund, Inc. Tsutomu Nishikawa, Executive Director (TSE Code: 8951) Contact: Asset Management Company Nippon Building Fund Management, Ltd. Kenichi Tanaka, President and CEO Person to Contact:Yasushi Akimoto, CIO (TEL. +81-3-6259-8681) Notice of Acquisition of Assets (COMODIO Shiodome) Nippon Building Fund, Inc. (“NBF”) hereby provides notice of its decision on June 28, 2012 to acquire assets as follows: Descriptions 1 Outline of the Acquisition 1) Acquired Assets : Beneficiary interests in trust assets comprising mainly of real estate 2) Name of Assets : COMODIO Shiodome (hereinafter, “the Property”) 3) Acquisition Price : ¥28,800,000,000 (provided, however, that miscellaneous acquisition costs, fixed assets tax, city-planning tax and consumption tax are not included in this amount) 4) Date of Contract : June 28, 2012 5) Date of Transfer : July 2, 2012 (anticipated) 6) Acquired From : Shiodome-Nishi Asset Management Y.K. (please refer to Section 4. hereinbelow for a description of the seller) 7) Acquisition Funds : Own fund plus loans etc. (anticipated) 8) Intermediaries : None 9) Payment Method : Lump-sum payment at the time of transfer 2 Points of Acquisition The acquisition is being undertaken with the intention of enhancing NBF’s portfolio in the Tokyo central business districts (CBDs) in accordance with the asset management objectives and policies set forth in NBF’s Articles of Incorporation. In deciding to acquire the Property, the following points were especially attractive. 1) Location The Property is located in the "West Block", which is along the west side of the JR railroads within the "Shiodome SIO-SITE" in the Shinbashi/Shiodome area (one of the largest redevelopment projects in Japan, developed as an aggregate of 11 blocks in a vast 31 hectare space stretching from the former Shiodome freight terminal through the Hamamatsucho station), and has convenient access to several lines and several stations such as the "Shiodome" station of the Oedo-line of the Tokyo Subway, the "Shiodome" station of the Yurikamome line, the 1 "Shinbashi" station of the JR line and the Ginza-line of the Tokyo Metro, as well as the "Hamamatsucho" station of the JR line and the Tokyo Monorail. 2) Building and Facilities The Property is characterized by its massive and dignified exterior with a platform featuring stone arches, and is equipped with highly competitive, up-to-date office building specifications such as a typical rentable floor area of 748 tsubo (approx. 2,468m2), a ceiling height of 2,700mm, sub-floor cavities for OA connection, and independent air conditioning etc. 3 Outline of Assets 1) Type of Specified Assets Beneficiary interests in trust assets comprising mainly of real estate 2) Trustee Sumitomo Mitsui Trust Bank, Ltd. 3) Address of the Property Since the Shiodome west area where the Property is located is currently subject to a land reallocation project (pre-reallocation), the right with respect to the site of the Property consists of the ownership of the existing land and the usufructuary right to the provisionally allotted land, and the building exists on such provisionally allotted land. (Description in Real Property Registry) Land (existing): 5-ban 37, Higashi-Shinbashi 1-chome, Minato-ku, Tokyo 8-ban 3, 8-ban 4, 8-ban 7, 8-ban 19, Higashi-Shinbashi 1-chome, Minato-ku, Tokyo Building (provisional allotment): 8-banchi 9, 8-banchi 10, 8-banchi 11, 8-ban 21, Higashi-Shinbashi 1-chome, Minato-ku, Tokyo (anticipated lot numbers for the above: 19th block, 8-3,8-19,5-37,8-4, 8-7) (Street Address) 14-ban 1, Higashi-Shinbashi 2-chome, Minato-ku, Tokyo 4) Use (Description in Real Property Registry) Offices 5) Type of Ownership (i) Land : 100% ownership and 100% usufructuary right (ii) Building : 100% ownership 6) Square meters (i) Land : site area (existing): 4,923.17 m2 (Description in Real Property Registry) (provisional allotment): 3,861 m2 (ii) Building : total floor space: 28,796.14 m2 (Description in Real Property Registry) 7) Structure (Description in Real Property Registry) Steel frame and steel framed reinforced concrete structure, flat roof, 9 floors above ground and 1 floor below ground 8) Completion of Construction: (Description in Real Property Registry) July 10, 2006 2 9) Design and Construction Design: Taisei Corporation, 1st Class Registerd Architect Office Construction: Taisei Corporation, Tokyo Branch 10) Valuation Valuation prepared by Daiwa Real Estate Appraisal Co., Ltd. ・Appraisal Value: ¥30,600,000,000 ・Date of Valuation: June 1, 2012 ・Summary of Valuation Item Value Profit price ¥30,600,000,000 Price based on direct capitalization method ¥31,400,000,000 Net revenue ¥1,414,765,000 Cap rate 4.5% Price based on DCF method ¥30,200,000,000 Discount rate 4.3% Terminal cap rate 4.7% Integration value ¥23,900,000,000 Percentage for land 76.8% Percentage for building 23.2% 11) Earthquake PML 7.3% (obtained from the building condition investigation report prepared by Engineering & Risk Services Corporation) 12) Existence of Secured Interests (liens) None. 13) Description of Tenants (Tenancy as of June 28, 2012) Total・ number and summary of lessees: 11 companies (6 general business companies, 4 stores, 1 medical clinic) ・Total rental revenues: ¥1,757 million/year ・Total rentable area: 20,538.19 m2 ・Total leased area: 20,538.19 m2 ・Occupancy Rate: 100% Total・ lease deposit amount: ¥1,401 million 3 4 Outline of Seller 1. Name Shiodome-Nishi Asset Management Y.K. 2. Location 2-ban 3, Marunouchi 3-chome, Chiyoda-ku, Tokyo, c/o Tokyo Kyodo Accounting Office 3. Name and Title of Kazuhiko Suda, Director Representative 4. Description of Business 1. sale, purchase, retention and management of real property trust beneficiary interests; 2. sale, purchase, exchange, lease, possession and management of real property; and 3. all other business activities incidental to each of the foregoing. 5. Capital ¥3 million (as of June 1, 2012) 6. Date of Establishment January 18, 2005 7. Relations with NBF/NBFM Capital Relationship None Personnel None Business Relationship None Does not fall under the category of related parties of either NBF or Related parties NBFM. 5 Status of Owners etc. of the Property The current acquisition of the Property is not an acquisition from a party which falls under the category of any specially-interested party of NBF or its asset management company. 6 Acquisition Schedule June 28, 2012: Determination to make acquisition; execution of sale and purchase agreement of trust beneficiary interests July 2, 2012 : Delivery (anticipated) 7 Forecasted Management Situation as at the close of June, 2012 This acquisition does not change the forecasted management situation of NBF during the period ending June 30, 2012. Impact on the forecast of management situation for the period ending December 31, 2012 will be announced as soon as the same becomes available. 8 Name of Property The name of the Property will be changed to “NBF COMODIO Shiodome” after delivery of the Property. End This English language notice is a translation of the Japanese language notice dated June 28, 2012 and was prepared solely for the convenience of, and reference by, overseas investors. Neither NBF nor Nippon Building Fund Management Ltd. makes any warranties as to its accuracy or completeness. 4 <Attached Materials> 【Reference Material 1】 Estimated Revenues and Expenses from the Property to be Acquired 【Reference Material 2】 Exterior Appearance of the Property 【Reference Material 3】 Standard Floor Plan of the Property 【Reference Material 4】 Summary of Portfolio after Acquisition of the Property 5 【Reference Material 1】 Estimated Revenues and Expenses from the Property to be Acquired 1) Property NOI (Net Operating Income): ¥1,399 million 2) The above figures represent annualized revenues and expenses based on assumptions made as of this date after exclusion of extraordinary factors for the year of acquisition, and revenues are premised on an occupancy rate of 97.0% (and are not estimated figures for the following fiscal year). 6 【Reference Material 2】 Exterior Appearance of the Property 7 【Reference Material 3】 Standard Floor Plan of the Property 8 【Reference Material 4】 Summary of Portfolio after Acquisition of the Property Value (Real Estate Acquisition Price Percentage of Appraisal Value) Area Name of Building (\ in thousands) Percentage each area (\ in thousands) (Note 1) (Note 2) NBF Hibiya Bldg. 63,500,000 6.89% 55,400,000 Nishi-Shinjuku Mitsui Bldg. 45,002,198 4.88% 44,100,000 Gate City Ohsaki 41,731,060 4.53% 40,700,000 Mitsubishi Heavy Industries Head Office Bldg. 36,300,000 3.94% 38,900,000 Shiba NBF Tower 32,000,000 3.47% 26,400,000 NBF Platinum Tower 31,000,000 3.36% 51,200,000 NBF Minami-Aoyama Bldg. 31,000,000 3.36% 16,900,000 NBF COMODIO Shiodome (Note 3) 28,800,000 3.12% 30,600,000 Toranomon Kotohira Tower 24,543,000 2.66% 30,700,000 NBF Nihonbashi Muromachi Center Bldg. 23,945,000 2.60% 27,100,000 Nakameguro GT Tower 23,856,000 2.59% 21,700,000 Mitsuiseimei Ochanomizu Bldg. 20,840,000 2.26% 14,700,000 NBF Ginza Street Bldg. 17,000,000 1.84% 14,500,000 Shinjuku Mitsui Bldg. No.2 16,285,400 1.77% 14,600,000 GSK Bldg. 15,616,000 1.69% 21,700,000 River City M-SQUARE 13,350,000 1.45% 13,800,000 NBF Toranomon Bldg. 13,337,000 1.45% 17,100,000 Tokyo CBDs Kowa Nishi-Shinbashi Bldg. B 13,217,000 1.43% 65.8% 15,700,000 Nippon Steel Bldg. No.2 12,614,118 1.37% 13,970,000 NBF Alliance 9,126,000 0.99% 10,300,000 Yotsuya Medical Bldg.