Japan Real Estate Investment : Announcement of Acquisition of Trust Beneficiary Interest in Domestic Real Estate

NEWS RELEASE

March 28, 2022

For Immediate Release

Investment Corporation

Japan Real Estate Investment Corporation

Yutaka Yanagisawa, Executive Director

(TSE code: 8952)

Asset Management Company

Japan Real Estate Asset Management Co., Ltd.

Naoki Umeda, President & CEO

Contact: Masaru Motooka

Executive Officer & General Manager

Planning Department

Phone: +81‐3‐3211‐7951

Announcement of Acquisition of

Trust Beneficiary Interest in Domestic Real Estate

Japan Real Estate Investment Corporation ("JRE") hereby announces that Japan Real Estate Asset Management Co., Ltd. ("JRE‐AM"), the asset management company to which JRE entrusts asset investment, today decided to acquire trust beneficiary interest in domestic real estate as follows:

• 1. Outline of the Acquisition

  Property name	Toyosu Front (ratio of ownership interest: 24%)
  Acquisition price (planned)	JPY 25,500 million
  Seller	Mitsubishi Estate Co., Ltd.
  Brokerage	No
  Decision date	March 28, 2022
  Contract date (scheduled)	March 29, 2022
  Transfer date (scheduled)	March 29, 2022
  Payment date (scheduled)	March 29, 2022

  (Note) The ratio of ownership interest in the "Property name" indicates the ratio of JRE's co- ownership interest in Toyosu Front.

• 2. Reason for the Acquisition

  In recent years, the roles and functions expected of offices have undergone change against the backdrop of the development of IT, growing environmental awareness, diversification of work styles, and such. In view of the change in the business environment resulting from these new trends, JRE has established a policy to strategically replace its portfolio properties under a proactive perspective, focusing on the medium‐ to long‐term competitiveness of the portfolio.

Toyosu Front is a highly competitive property located in the bay area called Toyosu, where diverse urban functions, including business, commercial and residential areas, are particularly concentrated among the bay areas, with excellent access to the central Tokyo, but with relatively low rent level. JRE believes that the acquisition of the property is in line with its portfolio property replacement policy and will lead to enhancing the portfolio's competitiveness in the medium to long term.

The property was evaluated for the following points in particular:

• (1) Superior location

  The property is connected to Toyosu Station where two lines are available via an underground passageway and faces a large commercial complex, offering great convenience.

  In the nearby redevelopment area, the development of two complex buildings consisting mainly of offices is also underway. Moreover, the subway line at Toyosu Station is scheduled to be extended, and the value of the area is expected to further improve.

• (2) Excellent building and facility

  The property, completed in 2010, boasts a floor plate of more than 5,000 m2 for an office floor and a soaring atrium to the celling, which provides its workers with an open and comfortable working environment.

  In terms of the environment, the property has specifications to reduce environmental burdens such as greening of approximately 36% of the whole site with some 50 types of plants and facilities for taking in outside air and using natural light.

3. Description of the Properties to Be Acquired

Special notes

Matters related to preferential negotiation rights for the transfer of an interest in the property are provided for in the co‐owners agreement.

(Note)

• ・ JRE, upon acquisition of the property, will lease the whole space to be acquired to Mitsubishi Estate, which will then sublease it to third parties under a master lease contract of a pass- through type.

• ・ "Area," "Structure," and "Completion" show the same entries stated in the real property registry. "Usage," however, indicates the main entries, among those listed in the real property registry.

• ・ "Outline of lease" is based on the data provided by the seller and calculated on the basis of JRE's interest. "Total number of tenants" shows the number pertaining to the entire property.

• ・ "Total number of tenants", "Total leased area," "Net rentable area" and "Occupancy rate on the scheduled acquisition date" are forecasts as of the scheduled acquisition date.

• ・ NOI (Net Operating Income): JPY 970 million a year (an estimated amount)

• ・ Depreciation: JPY 273 million a year (an estimated amount)

4. Outline of Seller

5. Status of Owners, Etc. of the Property

• 6. Transaction with Interested Party

  The transaction falls under a transaction with an interested party. In order for such a transaction to proceed, JRE‐AM first goes through the deliberation and approval process at its compliance committee, and then obtains approval from its investment management council pursuant to the rules for interested‐party transactions.

• 7. Settlement Method

  • 1) Acquisition fund Loans

    (Note) For more information about the loans for the acquisition, please refer to the press release "An nouncement of Debt Financing "announced today.

  • 2) Settlement method

    Lump‐sum payment at the time of transfer

• 8. Future Outlook

  There are no revisions to the operating performance forecasts for the fiscal period ending March 2022 (October 1, 2021 to March 31, 2022) and the fiscal period ending September 2022 (April 1, 2022 to September 30, 2022) as the acquisition will likely have only a marginal effect on performance.

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