August 27, 2012
For Immediate Release
Real Estate Investment Trust Japan Logistics Fund, Inc. Kenichiro Matsuoka, Executive Director (Security Code: 8967)
Asset Management Company Mitsui & Co., Logistics Partners Ltd. Takayuki Kawashima, President, CEO Kenichiro Matsuoka, Director, CFO TEL +81-3-3238-7171
Notice Concerning Acquisition of a New Asset (Tatsumi Logistics Center)
Japan Logistics Fund, Inc. (hereinafter referred to as the “Fund”) announced today that the Fund has decided to acquire a new asset, as detailed below:
1. Outline of the acquisition (1) Asset to be acquired: The trust beneficiary right of a domestic real estate (Note) (2) Name of the asset: Tatsumi Logistics Center (3) Acquisition price: 9,000 million yen (excluding expenses associated with the acquisition, fixed property tax, urban planning tax, and consumption tax) (4) Date of contract: September 3, 2012 (Expected) (5) Date of closing: September 3, 2012 (Expected) (6) Seller: Tatsumi 3-chome Development Special Purpose Company (7) Fund source: Bank loans and cash in hand (8) Payment method: Lump-sum payment on the day of closing
(Note) This property has not yet placed in trust beneficiary right as of today. The seller will entrust the property before the Fund’s acquisition.
2. Outline of the property to be acquired (Note1) Outline of the asset Outline of the appraisal Trust beneficiary right of real Tanizawa Sogo Appraisal Co., Asset type Real estate appraiser estate (Note) Ltd. Date of the acquisition September 3, 2012 Date of the appraisal July 1, 2012 (Expected) Acquisition price 9,000 million yen Appraisal value 9,510 million yen Mitsubishi UFJ Trust and Trustee (Expected) Banking Corporation Income approach 9,510 million yen End of the trust (Expected) August 31, 2022 Location 8-5, Tatsumi 3-chome, Koto- Discounted cash flow (Address) ku, Tokyo 9,510 million yen approach Site area (Note 2) 9,939.01 m² Zoning Semi-industrial area Discount rate 4.9%
Floor-area ratio 300% Terminal cap rate 5.3% Land 70% (Regulated building- to-land ratio 60% + Building-to-land Incremental building-to- Direct capitalization ratio 9,520 million yen floor ratio for corner approach location 10%) Type of ownership Ownership Reinforced concrete, steel- Structure/Story framed structure w/ steel roof, Cap rate 5.0% (Note 2) 5-story building Date of the Completion February 20, 2012 (Note 2) Building Total floor area Cost approach 9,250 million yen 29,394.56 m² (Note 2) Total rentable area 29,394.56 m² Usage (Note 2 ) Warehouse Land 5,580 million yen Type of Ownership (Percentage) (60.3%) Ownership Property management company Mitsui Fudosan Building Building 3,670 million yen (Expected) Management Co., Ltd. (Percentage) (39.7%) Outline of the lease contract Outline of the engineering report Investigator Shimizu Corporation Number of tenants 1 Issuing Date of Engineering- Annual rent (excluding August 27, 2012 Not disclosed (Note3) report consumption tax) Lease deposit Not disclosed (Note3) Urgent repairs - Short-term repairs - Total rent area (Note4) 29,394.56 m² Long-term repairs 36,215 thousand yen Occupancy 100.0% PML 14.6% Design company, construction company and building Expected income/expense (Note 5) certification company Income (including auxiliary Not disclosed (Note3) Design company Kajima Corporation income) NOI（Net Operating Income） 501 million yen Construction Company Kajima Corporation NOI yield (based on acquisition 5.6% Building certification company Bureau Veritas Japan Co., Ltd. price) Special Remarks: 1. The construction wastes used for reclamation of land remain under the ground of this site. The Fund decided the acquisition price taking into account the estimated cost (14 million yen) of extracting and removing a part of these wastes at the time of future reconstruction. 2. The Fund believes neither Soil Contamination Countermeasures Act nor the Ordinance on the Environment for the Preservation of the Health and Safety of Tokyo Residents (effective since December 22, 2000) will apply to this site. After investigation, however, the Fund found that a part of this site contains certain amount of hazardous materials exceeding standard level. The
Fund confirmed Shimizu Corporation, the investigator, that the hazardous materials give quite limited impact on environment and that there is no problem in using this site as it is. Of course the Fund realizes that the hazardous materials must be removed in accordance with related regulations in future reconstruction opportunity. Still, the Fund believes the amount of the hazardous materials is relatively small that enables the Fund to remove the materials without special treatment and cost. Notes: 1. This property has not yet placed in trust beneficiary right as of today. The seller will entrust the property before the Fund’s acquisition. 2. According to the indication of the real estate registry. 3. Not disclosed, for unable to obtain the tenants’ consent. 4. In general, there are minor differences between the definition of “rentable area” determined by the Fund and the definition of “rent area” determined by lease contracts. It is possible that some of the rent area is not included in rentable area. The total rent area represents the sum of the rentable area included in rent area. 5. The figures are not the forecasts for the fiscal period ending January 31, 2013 or the fiscal period ending July 31, 2013, but the normalized estimation based on annual income/expense projection.
3. Rationale for the acquisition In order to improve the quality of the Fund’s portfolio, it has authorized to acquire this asset in accordance with its investment targets and policies stipulated in its Articles of Incorporation.
(1) Geographical characteristics Tatsumi locates in Koto-Ku in Tokyo 23 wards, the largest center of consumption in Japan. Koto-ku and its surrounding bay area is the prime region as the logistics center with the excellent access to the logistics gateways such as the Port of Tokyo (Oi Terminal) and the Tokyo International Airport (Haneda). The area gains popularity as storage/delivery centers of consumer products, including imported goods, to the Tokyo Metropolitan Area. The property is about 2 km from the Ariake Junction of the Tokyo Metropolitan Expressway Bay Shore Rout that gives Tatsumi area easy access to major arterial roads. This geographical uniqueness of Tatsumi area provides wide range of coverage of the Tokyo Metropolitan Area. Furthermore, the asset’s site setting qualifies as the first class logistics center because it is in a semi-industrial area which enables the tenants to operate 24 hours, and because it is in high commutable convenience area which enables them to recruit labor relatively easy.
(2) Facility characteristics The facility is a large-scale and versatile logistic center with effective column interval of 10.0 m, effective ceiling height of 5.5 m, and standard floor load capacity of 1.5 t/ m², an idealistic spec. The facility was designed for multiple tenant use, and has enough office space and truck berths. In addition, the facility has 6 elevators and 2 lifts so that the tenants are able to operate effectively. The tenants can use the facility either as a warehouse (stock-use) or as a logistics center (flow-use).
(3) Tenants The Fund concluded the fixed-term leasing contract (10 years) with Nakano Shokai Co., Ltd., a third-party- logistics company operating mainly in east Japan. The company uses the facility as a delivery center of high- end apparel etc.
4. Outline of the tenant (Lease contract) (Note1) Annual rent Type of Name of tenant Total rent area Ratio (excluding Lease period Lease deposit business consumption tax) Nakano Shokai Logistics Not disclosed From March 1, 2012 Not disclosed 29,394.56 m² 100.0% Co., Ltd. Company (Note) To February 28, 2022 (Note) Contract renewal/revision： Type of contract： Fixed-term lease contract (10 years) Rent revision： Unable to change. Contract renewal: No contract will be renewed, unless otherwise agreed between the tenant and the Fund to initiate a new contract. Lease cancellation: Unable to cancel. Major items Electric equipment, Apparel (Note) Not disclosed, for unable to obtain the tenants’ consent.
5. Outline of the seller Name of the company Tatsumi 3-chome Development Special Purpose Company Tokyo Kyodo accounting Office, 1-1, Marunouchi 3-chome, Chiyoda-ku, Address Tokyo Date of establishment December 16, 2009 President Masato Kaida Capital 100 thousand yen Shareholders Mitsui & Co., Ltd. and Mitsubishi Estate Co., Ltd. Principal business lines Asset acquisition, management, and disposal as an SPC The seller qualifies as the interested party defined by the Act on Investment Relation to the Fund Trust and Investment Corporations (hereafter referred to as “the Investment and the asset Trust Act”) as well as defined by the asset management company’s anti- management company conflict of interest rule.
6. Current conditions of the property Current owner Name of the company Tatsumi 3-chome Development Special Purpose Company Special interest w/ the Fund / AM See above 5. Outline of the seller Reason of acquisition Development Acquisition price - Acquisition date -
7. Transaction with the interested party The seller qualifies as the interested party defined by the asset management company’s anti-conflict of interest rule. This acquisition was approved by the board of directors and compliance committee of the asset management company by strictly following the rule. Also, the asset management company will notify to the Fund by the document regarding this transaction with the interested party in accordance with the Investment Trust Act.
8. Brokers No brokers in this transaction
9. Future Prospects The Fund will notify the impacts on its 15th and 16th fiscal period forecasts associated with this acquisition in the 14th period financial statements expected to be announce on September 7, 2012.
This notice is the English translation of the Japanese press release announced on August 27, 2012 on our website. No assurance or warranties are given for the completeness or accuracy of this English translation.
【Reference Materials】 Reference Material 1: Exterior Photograph of the Building Reference Material 2: Map of the Property Reference Material 3: Portfolio list after the acquisition
(End)
*The Fund’s website: http://8967.jp/eng/
【Reference Materials】
Reference Material 1: Exterior Photograph of the Building
TOKYO SKYTREE
Metropolitan Expressway Route No.9 Fukagawa
Tatsumi Sta.
Tatsumi Logistics Center Bayshore Route
Reference Material 2: Map of the Property
Wide area map
Neighboring area map
Reference Material 3: Portfolio after acquisition
Acquisition # Property Name Location Price Ratio （Million Yen） M-1 Funabashi Funabashi, Chiba 8,675 5.5% M-2 Urayasu Urayasu, Chiba 2,902 1.8% M-3 Hiratsuka Hiratsuka, Kanagawa 1,466 0.9% M-4 Shinkiba Koto-ku, Tokyo 2,454 1.5% M-5 Urayasu Chidori Urayasu, Chiba 6,000 3.8% M-6 Funabashi Nishiura Funabashi, Chiba 5,700 3.6% M-7 Funabashi Nishiura II Funabashi, Chiba 9,330 5.9% M-8 Kawasaki Kawasaki, Kanagawa 10,905 6.9% M-9 Narashino Narashino, Chiba 1,690 1.1% M-10 Yokosuka Yokosuka, Kanagawa 3,305 2.1% M-11 Yachiyo Yachiyo, Chiba 2,266 1.4% M-12 Yokohama Fukuura Yokohama, Kanagawa 9,800 6.2% M-13 Yachiyo II Yachiyo, Chiba 5,300 3.3% M-14 Urayasu Chidori II Urayasu, Chiba 1,640 1.0% M-15 Ichikawa Ichikawa, Chiba 4,550 2.9% M-16 Shinonome Koto-ku, Tokyo 11,800 7.4% M-17 Narashino II Narashino, Chiba 7,875 5.0% M-18 Ichikawa II Ichikawa, Chiba 17,415 11.0% M-19 Souka Souka, Saitama 6,360 4.0% M-20 Tatsumi Koto-ku, Tokyo 9,000 5.7% Metropolitan Area (Bay, Inland) Subtotal 128,433 81.0% T-1 Daito Daito, Osaka 9,762 6.2% T-2 Osaka Fukuzaki Osaka, Osaka 4,096 2.6% T-3 Chubu Haruhi Kiyosu, Aichi 685 0.4% T-4 Kadoma Kadoma, Osaka 989 0.6% T-5 Komaki Komaki, Aichi 2,100 1.3% T-6 Komaki II Komaki, Aichi 1,800 1.1% Kinki Area, Chubu Area and Kyushu Area Subtotal 19,432 12.3% O-1 Maebashi Maebashi, Gunma 1,230 0.8% O-2 Hanyu Hanyu, Saitama 1,705 1.1% O-3 Saitama Kisai Kitasaitama, Saitama 4,010 2.5% O-4 Kazo Kazo, Saitama 3,790 2.4% Other Area Subtotal 10,735 6.8% Portfolio Total 158,600 100.0%