For Translation Purposes Only May 16, 2012 for Immediate Release
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For Translation Purposes Only May 16, 2012 For Immediate Release United Urban Investment Corporation Yasuhiro Tanaka Executive Officer (Securities Code: 8960) Asset Management Company: Japan REIT Advisors Co., Ltd. Hisamitsu Abe Chairman of the Board, CEO and COO Inquiries: Kenichi Natsume Chief Financial Officer TEL: +81-3-5402-3680 Notice Concerning Acquisition of Property (Yamada Denki Tecc Land Aoba (Site)) United Urban Investment Corporation (“United Urban”) hereby announces its decision to acquire a property as set forth below on May 16, 2012. 1. Acquisition of the Property United Urban will acquire the following real estate (the “Property to be Acquired”). Scheduled Scheduled Property Name Location (lot number) Acquisition Price Acquisition Date (Note 1) Yamada Denki Tecc Land 2-3~11・14・15 Moegino, Aoba-ku, ¥2,150 million May 18, 2012 Aoba (Site) (Note 2) Yokohama, Kanagawa (Notes) 1. The scheduled acquisition price shown is based on the purchase price to be stated in the sale and purchase agreement for the acquisition of the Property to be Acquired. In addition, the price is shown in the amount excluding acquisition costs, property taxes, city planning taxes and consumption taxes and other costs. 2. The property which United Urban will acquire is mainly a site. Buildings and structures situated in the site of the Property to be Acquired are not included in the Property to be Acquired. 2. Details of Acquisition (1) Reason for the Acquisition In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Property to be Acquired for the purpose of expanding its portfolio of retail properties in Tokyo metropolitan Area. In making the decision to acquire such Property to be Acquired, the following aspects were appreciated. 1. Location The Property to be Acquired has excellent access as it is located about 8 minutes walk from Aobadai Station which is the express station on the Tokyu Den-en-toshi Line, and along a major arterial roadway (the national route 246). The area around the Aobadai Station is a popular residential area along the Den-en-toshi Line; it boasts a sound environment with a number of commercial facilities and other convenient facilities for living close-by the station, and rich greenery from its numerous parks. Located in such a convenient and fine environment, the Property to be Acquired is suitable as a site for various types of commercial facilities. In addition, due to such location, the Property to be Acquired 1 can be developed and sold as condominiums for families in the future, and thus it has a high asset value as a site for condominium development. 2. Tenants, etc. The Property to be Acquired has a 20-year fixed term lease agreement (of which the remaining lease period is approximately 8 years) with Yamada Denki Co., Ltd. (the “Tenant”). “Yamada Denki Tecc Land Aoba,” operated by the Tenant, is one of the largest electronics retailers that boasts the highest sales volume in Kanagawa prefecture. Therefore the Property to be Acquired is anticipated to generate stable revenue after United Urban has acquired the Property to be Acquired. (2) Summary of Acquisition 1. Asset to be Acquired : Real estate 2. Name of the property : Yamada Denki Tecc Land Aoba (Site) 3. Scheduled Acquisition Price : ¥2,150,000 thousand (excluding acquisition costs, property taxes, city planning taxes and consumption taxes and other costs) 4. Scheduled Agreement Date : May 18, 2012 (conclusion of the sale and purchase agreement) 5. Scheduled Acquisition Date : May 18, 2012 (transfer of ownership) 6. Seller : Tokyu Corporation 7. Financing : Cash on hand and debt financing (scheduled) 8. Date of Payment : May 18, 2012 (scheduled) (3) Outline of the Property to be Acquired Property Name Yamada Denki Tecc Land Aoba (Site) Type of the Property Real estate 2-3~11・14・15 Moegino, Aoba-ku, Yokohama, Location (Note 1) Lot number Kanagawa Access About 8 minute walk from Aobadai Station (Tokyu Den-en-toshi Line) Land 7,594.00 m2 Site Area (Note 1) Building - Type of Ownership Land: Proprietary Ownership Scheduled Acquisition Price ¥2,150,000 thousand Appraisal Value ¥2,300,000 thousand Date of Value Estimate April 15, 2012 Appraisal Agency Appraisal by Japan Real Estate Institute (Appraisal Method) Probable Maximum Loss (PML) - Collateral None Projected lines of an urban road under an authorized city plan run through the southeast of the Property to be Acquired, and construction of a Special Instructions building within the area affected by the related facilities under the city plan will be subject to certain limitations. Details of Tenant (Note 2) Total Number of Tenants 1 Security Deposit (Note 3) Total Rental Revenues (yearly) (Note 3) Total Leasable Floor Space 7,650.63 m2 (Note 4) 2 Total Leased Floor Space (Note 4) 7,650.63 m Occupancy Ratio (Note 5) 100.0% Reference Estimated NOI (yearly) (Note 6) ¥91,506 thousand (Notes) 1. Each piece of information in “Location (Lot number)” and “Site Area” is described as it appears on the real estate register. 2 2. “Details of Tenant” are figures as of April 30, 2012. 3. “Security Deposit” and “Total Rental Revenues (yearly)” are not disclosed, as the consent by the Tenant, the leasing agreement of which United Urban will succeed, has not been obtained. 4. “Total Leased Floor Space” and “Total Leasable Floor Space” are described as they appear on the lease agreement with the Tenant. Therefore, they differ from the figures listed on the real estate register. 5. “Occupancy Ratio” means the percentage obtained by dividing “Total Leased Floor Space” by “Total Leasable Floor Space”. 6. “NOI (Net Operating Income)” means the figure equal to income from property leasing (rental revenues - rental expenses) plus depreciation and amortization. “Estimated NOI” means the estimated figure, during steady operation, which is calculated based on the terms and conditions of leasing as of April 30, 2012. The estimated occupancy ratio is 100.0%. (4) Seller Profile Company Name Tokyu Corporation Head Office Address 5-6 Nanpeidai-cho, Shibuya-ku, Tokyo Representative Hirofumi Nomoto, President and Representative Director Principal Business Railway and Real estate Capital ¥121,724 million (Note) Date of Foundation September 2, 1922 Net Asset ¥441,920 million (Note) Total Asset ¥1,984,591 million (Note) (As of September 30, 2011) Name Percentage Major Shareholder The Dai-ichi Life Insurance Company, Limited 6.13 % Nippon Life Insurance Company 5.51 % Japan Trustee Services Bank, Ltd. (trust account) 3.41 % Relationship with United Urban or JRA Capital Ties There are no significant capital ties. Personal Relationship There are no significant personal relationships. Business Relationship United Urban acquired one property (acquisition price: ¥2,600 million) from Tokyo Corporation during the previous fiscal period ended on November 30, 2011. Standing to Related Party The seller, Tokyu Corporation, falls under neither the category of “related party, etc.” under the Act on Investment Trusts and Investment Corporations of Japan (the “Related Party”) nor the category of sponsor/stakeholder under the self-imposed rules of Japan REIT Advisors Co., Ltd. (“JRA”), the asset management company (the “Sponsor/Stakeholder”). (Note) As of March 31, 2012 (5) Outline of Brokerage 1. Outline of Broker Company Name Marubeni Asset Management Co., Ltd. Address 2-2-1 Ohtemachi, Chiyoda-ku, Tokyo Representative Hitoshi Murakami, President Investment management services, investment advisory services and the second financial instruments business under Financial Instruments and Exchange Act, building lots and buildings transaction business under Principal Business the Building Lots and Buildings Transaction Business Act, real estate investment advisory business, purchase, management, leasing, renting and operation of real estate and trust beneficial interests, and the brokerage and consulting of such; etc. Capital ¥ 50 million (As of April 30, 2012) Date of Foundation November 14, 2007 Relationship with United Urban or JRA Capital Ties There are no significant capital ties. Personal Relationship There are no significant personal relationships. Business Relationship Marubeni Asset Management Co., Ltd. has served as a broker when United Urban acquired three properties and sold two properties during 3 the fiscal period ended November 30, 2011. In addition, it has served as a broker when United Urban acquired one property during the current fiscal period ending May 31, 2012. Standing to Related Parties Marubeni Asset Management Co., Ltd. falls under the category of Related Party. Moreover, Marubeni Asset Management Co., Ltd. falls under the category of the Sponsor/Stakeholder, and therefore, is abiding by the predetermined limitations and procedures of JRA. (Note) (Note) With a view to avoiding conflicts of interest, JRA sets forth limitations and procedures for transactions, etc. between United Urban and Sponsor/Stakeholder in its internal rules on transactions with Sponsor/Stakeholder, which are called the “Investment Committee Rules on Transactions with Sponsor/Stakeholder.” The specific limitations set forth include the following: (i) When acquiring assets from Sponsor/Stakeholder, the acquisition price shall be the same as or less than the appraisal value; (ii) When selling assets to Sponsor/Stakeholder, the sale price shall be the same as or more than the appraisal value; and (iii) When Sponsor/Stakeholder is involved in the brokerage, etc.