This translation of the original Japanese notice is provided solely for information purposes. Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
May 9, 2012 REIT Issuer: Daiwa Office Investment Corporation (Stock Code No.: 8976) Representative: Kazuo Otaka, Executive Director
Asset Manager: Daiwa Real Estate Asset Management Co., Ltd. Representative: Akira Yamanouchi, President and Representative Director Inquiries to: Yuji Shinotsuka, Vice President and Representative Director (Tel: +81-3-6215-9649)
Notice concerning Acquisition of Asset (Execution of Agreement)
We hereby announce that today Daiwa Office Investment Corporation (the “Investment Corporation”) determined to acquire a trust beneficial interest in real estate (the “Acquisition”) on May 9, 2012 as follows.
1. Summary of Assets to be purchased
Type of Assets Trust beneficial interest in real estate Property Name Nihonbashi Hongokucho Tosei Building (the “Property”) (Note 1) Location 4-2-16 Nihonbashi Hongokucho Chuo-ku, Tokyo Acquisition Price 1,721 million yen (Excluding acquisition costs, consumption tax, etc.) Date of Execution of Purchase May 9, 2012 Agreement Date of Delivery (scheduled) May 11, 2012 Seller Tosei Corporation (the “Seller”) Funding for Acquisition Allocation of loans and cash deposit (Note 2) Payment Method Lump-sum payment at the time of delivery Intermediary N/A (Note 1) After the Acquisition, the property name will be changed, but not decided yet. (Note 2) Please refer to the press release “Notice concerning Borrowing of Funds” announced on May 9, 2012
2. Reason for Acquisition
We believe that the Property is appropriate to the basic policy for the asset management set forth in the Articles of Incorporation of the Investment Corporation and the management policy of the Investment Corporation. We decided to acquire the Property because we appreciate the rarity and profitability of the Property.
(1) Location of the Property:
The Property is located near the most popular office area of Otemachi, Marunouchi and Nihonbashi. For transportation, the 4 stations and 10 lines are available. The Property is located within about a 4-minute walk to the south exit of Kanda Station on the JR Chuo, JR Yamanote, JR Keihin-Tohoku lines and Tokyo Metro Ginza line, about a 6-minute walk to the A2 exit of Otemachi Station on the Tokyo Metro Marunouchi line, Chiyoda line, Tozai line, Hanzomon line and Toei Mita line, about a 6-minute walk to Shin-Nihonbashi Station on the JR Sobu line, about a 8-minute walk to the A9 exit of Mitsukoshimae Station on Tokyo Metro Ginza line and about a Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
6-minute walk to the B1 exit of Mitsukoshimae station, therefore the Property has a good transportation convenience. This area is a traditional commercial area where there are many relatively small office buildings, the diversity of small and medium-sized enterprise is high and no special industries and businesses gather. The Property is expected to ensure stable profitability after the Acquisition, taking into account strong office demand of this area.
(2) Building Facilities: The Property is provided with 8 stories above ground, the total floor area of 2,386.51 ㎡(721.91 tsubo), its standard floor features 287.71 ㎡(87.03 tsubo) of floor space, 2,800mm of ceiling height for a standard floor (100mm of OA floor) and sufficient spec like individual air-conditioning and card key system. Because the Property built in May 2010 is a new building, the Property is more competitive than other buildings around the Property. We consider that the Property is a rare building.
3. Details of the Property to be purchased
Property Name Nihonbashi Hongokucho Tosei Building (Note1) Type of Specified Assets Trust beneficial interest in real estate Trustee (scheduled) Mitsubishi UFJ Trust and Banking Corporation Trust Period From May 11, 2012 to May 11, 2022 Location (Lot Number) 4-10-20-3 Nihonbashi Hongokucho Chuo-ku, Tokyo Use Office, Store, Parking (Description in the register book) Ownership Form (i) Land: Ownership (ii) Building: Ownership Site Area 393.01 ㎡ (officially registered) Total Floor Area 2,386.51 ㎡ (officially registered) Steel construction with 8 stories above ground Structure (Description in the register book) Construction Date May 25, 2010 (Description in the register book) Building Engineer SPACETECH Co., Ltd. first-class registered architects office Constructor ICHIKEN Co., Ltd. Structural-design Engineer Toto Sekkei Co., Ltd. first-class registered architects office Floor Height/Ceiling Height 4,100 mm (for standard floor) / 2,800mm (for standard floor) Air-conditioning System/OA Laying Individual air-conditioning for each floor / OA-capable floor Building Inspection Agency Japan Constructive Inspect Association Building Condition Research TOKIO MARINE & NICHIDO RISK CONSULTING Co., Ltd. Management Company Land Pollution Research Earth-Appraisal Co., Ltd. Management Company PML Level (Management 6.93% (NKSJ Risk Management, Inc.) Company) 1,721million yen (excluding acquisition costs and consumption Purchase Price tax, etc.) Appraisal Value 1,810million yen (Appraisal Date) (as of April 30, 2012) Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
Appraiser DAIWA REAL ESTATE APPRAISAL CO., LTD Collateral None Summary of Tenants Total Number of Tenants 6 Rent Revenue Not disclosed (Note 4) Security Deposit and Not disclosed (Note 4) Guaranty 2,143.08 ㎡ (estimated as of the scheduled delivery date) Total Leased Floor Space (Note 2)
Total Leasable Floor Space 2,143.08 ㎡(Note 2) April 30, 2008 - Trend in occupancy rates April 30, 2009 - the last 5 years April 30, 2010 - (Note 2) April 30, 2011 0% Scheduled delivery date 100.0% Expected NOI (NOI Yield) 92 million yen (5.4%) (Note 3) (1) The borderline between a partial of the land of the Property (lot number:10-10) and the land next the Property (lot number:10-16) is not determined. (2) A road faced on the north-west side of the Property is prescribed under Article 42 paragraph 2 of the Building Other Relevant Information Standard Act. The space of 16.3 ㎡ of the Property is supplied for the road. (3) The Investment Corporation will enter into a leasing agreement with the Seller for the floors of the Property on the same date as the delivery date. (Note 4)
(Note1) After the Acquisition, the property name will be changed, but not decided yet. (Note 2) The above-mentioned figures, based on the data from the Seller (Note 3) The above-mentioned figures are the expected annual amounts based on leasing agreements as of the scheduled delivery date and taking into account of taxes imposed, and calculated on the assumption that the expected occupancy rate is 100.0%. (These figures are not official forecasts.) (Note 4) The figure is not disclosed because of the Seller’s requests.
4. Details of the Seller
(1) Company Name Tosei Corporation (2) Location 4-2-3 Toranomon, Minato-ku, Tokyo (3) Title and Name of President and CEO / Seiichiro Yamaguchi Representative (4) 1. Revitalization Business 2. Development Business of condominiums, detached houses, Description of Business office buildings and commercial facilities 3. Rental Business of its own office buildings and condominiums 4. Fund Business (5) Amount of Capital 5,454,673 thousand yen (6) Date of Incorporation February 2, 1950 Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
(7) Relationship with the Investment Corporation/Asset Manager
There is no capital relationship required to be stated between the Capital Relationship Investment Corporation/Asset Manager and the Seller.
There is no personnel relationship required to be stated between Personnel Relationship the Investment Corporation/Asset Manager and the Seller.
There is no business relationship required to be stated between Business Relationship the Investment Corporation/Asset Manager and the Seller.
The Seller does not fall under the Related Persons of the Investment Corporation/Asset Manager. Also, the affiliated Whether or not to be the persons and the affiliated companies of the Seller do not fall Related Persons under the Related Persons of the Investment Corporation/Asset Manager.
5. Status of Owners etc. of Properties The acquisition of the Trust Beneficial Interest is not an acquisition from any persons having a special interest in the Investment Corporation or the Asset Manager.
6. Transactions with Interested Persons The Seller does not fall under Interested Persons of the Investment Corporation or the Asset Manager.
7. Status of Intermediary
N/A
8. Acquisition Schedule
Date of Determination of the Acquisition May 9, 2012 Date of Execution of Purchase Agreement May 9, 2012 Scheduled Payment Date May 11, 2012 Scheduled Delivery Date May 11, 2012
9. Outlook
The impact of the Acquisition on the fiscal period ending May 2012 (13th Fiscal Period) and the fiscal period ending November 2012 (14th Fiscal Period) is limited. The earnings forecasts in 13th Fiscal Period and 14th Fiscal Period are unchanged.
- End -
Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
【Reference Material 1】 Summary of Appraisal Report
Appraiser DAIWA REAL ESTATE APPRAISAL CO., LTD Appraisal Date April 30, 2012 Appraised Value 1,810million yen
Items (million yen) (Note 1) Income Approach Value 1,810
Direct Capitalization Value 1,870
(1) Operating Revenue (a-b) 118
a. Potential Annual Rent Revenue 124
b. Amount of Loss due to Vacancy 6
(2) Operating Expenses (c+d+e+f) 22 c. Maintenance and Operation Cost 11 (including cost of management, utility and PM fee) d. Taxes and Public Charges 8
e. Non-life Insurance Premium (Note 2) 0
f. Other Expenses 1
(3) Net Operating Revenue 95
(4) Profit from Managing Guaranty, etc. 1
(5) Capital Expenditures 2
(6) Net Revenue ( (3)+(4)-(5)) 95
Cap Rate 5.1%
Discounted Cash Flow Value 1,790
Discount Rate 4.9%
Terminal Cap Rate 5.3%
Integrated Value by Using Cost Method 1,340
Ratio of Land 53.0%
Ratio of Building 47.0%
(Note 1) The above revenue and expenses are based on the appraisal report and is not the revenue and expenses forecasted by the Investment Corporation or the Asset Manager.
Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
【Reference Material 2】 Photograph / Map
< External View >
Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
< Map >
Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
【Reference Material 3】 Portfolio Overview after Acquisition of the Property
Acquisition Investment Date of (Scheduled) Price Region Name of Property Ratio (%) Acquisition (million yen) (Note 5) (Note 4) Daiwa Ginza 21-Oct-05 14,100 4.5 Daiwa Ginza Annex 21-Oct-05 3,050 1.0 Daiwa Shibaura 21-Oct-05 8,265 2.6 Daiwa Minami-Aoyama 21-Oct-05 4,550 1.5 Daiwa Sarugakucho (Note 6) 21-Oct-05 3,190 1.0 Daiwa A Hamamatsucho 21-Oct-05 2,865 0.9 Daiwa Jingumae 21-Oct-05 2,800 0.9 Daiwa Shibadaimon 21-Oct-05 2,578 0.8 Daiwa Misakicho 21-Oct-05 2,346 0.7 Daiwa Shimbashi 510 21-Oct-05 2,080 0.7 BPS Square 27-Jan-06 1,560 0.5 Daiwa Tsukiji 27-Jan-06 1,240 0.4 Daiwa Tsukiji 616 24-Mar-06 2,440 0.8 Daiwa Tsukishima 24-Mar-06 7,840 2.5 Nihombashi MS Bldg. 1-May-06 2,520 0.8 Five Central Daiwa Azabudai 1-May-06 1,600 0.5 Wards of Tokyo Daiwa Shibuya SS 1-May-06 3,930 1.3 (Note 1) Daiwa Nihombashi Honcho 31-Jul-06 7,420 2.4 Daiwa Ginza 1-chome 31-Jul-06 4,620 1.5 Daiwa Kyobashi 31-Jul-06 3,460 1.1 Sunline Building No. 7 6-Oct-06 2,680 0.9 Daiwa Onarimon 1-Dec-06 13,860 4.4 July 13 /November Shinjuku Maynds Tower 133,800 42.7 26, 2007 SHIBUYA EDGE 13-Jul-07 5,900 1.9 Daiwa Kodenmacho 31-Aug-07 2,460 0.8 Daiwa Jumbocho 10-Mar-10 4,150 1.3 Daiwa Nishi-Shimbashi 13-Aug-10 5,000 1.6 Daiwa Kudan (Note 6) 2-Sep-10 4,000 1.3 Daiwa Kayabacho Building 25-Mar-11 5,600 1.8 Jimbocho Place 29-Mar-11 3,550 1.1 E SPACE TOWER 8-Jul-11 24,000 7.7 Nihonbashi Hongokucho Tosei Building 11-May-12 1,721 0.5 Total Number of Properties located in Five Central Wards of Tokyo: 32 289,175 92.3 Greater Daiwa Kinshicho 21-Oct-05 3,653 1.2 Tokyo Daiwa Higashi-Ikebukuro 21-Oct-05 2,958 0.9 (Note 2) Benex S-3 1-May-06 4,950 1.6 Daiwa Shinagawa North 13-Jul-07 7,710 2.5 Total Number of Properties located in Greater Tokyo: 4 19,271 6.2 Regional Major Cities Daiwa Minami-Senba 31-Aug-07 4,810 1.5 (Note 3) Total Number of Properties located in Regional Major Cities: 1 4,810 1.5 Total Number of Properties: 37 313,256 100
Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.
(Note 1) “Five Central Wards of Tokyo” means Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku. (Note 2) “Greater Tokyo” means Tokyo excluding the Five Central Wards of Tokyo, Kanagawa, Chiba and Saitama Prefectures. (Note 3) “Regional Major Cities” means Osaka area (i.e., Osaka, Kyoto and Hyogo Prefectures), Nagoya area (Aichi and Mie Prefectures), ordinance-designated cities (Sapporo, Sendai, Niigata, Shizuoka, Hamamatsu, Okayama, Hiroshima, Kita-Kyushu, Fukuoka and Kumamoto Cities), and Hakodate, Asahikawa, Aomori, Morioka, Akita, Koriyama, Iwaki, Utsunomiya, Maebashi, Toyama, Kanazawa, Nagano, Gifu, Otsu, Nara, Wakayama, Kurashiki, Fukuyama, Shimonoseki, Takamatsu, Matsuyama, Kochi, Kurume, Nagasaki, Kumamoto, Oita, Miyazaki and Kagoshima Cities. (Note 4) Figures in the “(Scheduled) Acquisition Price” columns represent the acquisition price of trust beneficial interests (excluding consumption tax, etc.) for each property. (Note 5) Figures in the “Investment Ratio” columns represent the percentage of the (scheduled) acquisition price of trust beneficial interests for each property to the aggregate amount of the (scheduled) acquisition price, and are rounded to the nearest first decimal place. Please note that adding up of the investment ratio of the properties may not exactly match the investment ratio for each investment regions or for the overall portfolio. (Note 6) The acquisition price of Daiwa Sarugakucho was changed to 3,190 million yen on March 30, 2012 due to the acquisition of the site in Daiwa Sarugakucho of 190 million yen.
* Website URL of the Investment Corporation: http://www.daiwa-office.co.jp/en/
Note: This press release was prepared as a public announcement regarding the Investment Corporation’s acquisition of assets and was not prepared with the aim of soliciting investments.