Notice of Acquisition of Assets (Aqua Dojima Daiwa Dojima Building)

Transcription

1 September 8, 2004 To All Concerned Parties Name of REIT Issuer: Nippon Building Fund, Inc. Toshihiko Fukase, Executive Director Code Number: 8951 Person to Contact: Asset Management Company Nippon Building Fund Management, Ltd. Satoru Yamanaka, Chief Operating Officer TEL Notice of Acquisition of Assets (Aqua Dojima Daiwa Dojima Building) Nippon Building Fund, Inc. ( NBF ) hereby provides notice of its decision on August 26, 2004 to acquire assets as follows: Description 1 Outline of the Acquisition Anticipated 1) Acquired Assets: Beneficiary interests in trust assets comprised mainly of real estate 2) Name of Acquired Assets: Aqua Dojima Daiwa Dojima Building 3) Acquisition Price: 17,810,000,000 (provided, however, that miscellaneous acquisition costs, fixed assets tax, city-planning tax and consumption tax are not included in this amount) 4) Date of Acquisition Contract: August 27, ) Date of Transfer: September 30, ) Acquired From: Raison Property Ltd. (please refer to Section 4 hereinbelow for a description of the seller) 7) Broker: Mitsui Fudosan Co., Ltd. Broker's Fees: 273,780,000 (exclusive of consumption tax) 8) Acquisition Funds: Existing capital plus loans (anticipated) 2 Reason for Acquisition The acquisition is being undertaken with the intention of enhancing NBF s portfolio in the local cities other than Tokyo (the Other Cities) in accordance with the asset management objectives and policies set forth in NBF s Articles of Incorporation. In deciding to acquire this property, the following points were especially attractive. 1) Portfolio Positioning As Osaka is the largest area for investment in the Other Cities, NBF has accumulated a 1

2 substantial number of acquisitions there. This property is the fifth acquisition within the city of Osaka (excluding properties already sold), and in addition to being located in the largest of the Other Cities, this property is the third biggest (based on the disclosed appraised value) of the entire portfolio. In light of the ample cross-section of tenants for a single building, it represents, in the estimation of the asset management company, a significant core property with respect to the balance of the composition of the portfolio. 2) Location Osaka s Dojima District is a powerful office zone within Osaka with Yotsubashi Street as its axis that, in the estimation of the asset management company, is a prime area with the Nishi-Umeda District to the north and the Nakanoshima District to the south that has experienced large-scale development and renewal in recent years. This area has so far fulfilled the needs of a wide range of tenants such as mass communications companies, electrical and telecommunications manufacturers, legal and accounting firms and so forth and it is believed that its primacy in the Osaka market will increasingly strengthen. From this property it is possible to use a number of trains and subway lines. For example, it is 10 minutes walk to the JR Osaka Station, 7 minutes to the JR Kitashinchi Station, 6 minutes to the Higobashi Station of the Yotsubashi Subway Line, 7 minutes to the Nishi-Umeda Station of the same line and 10 minutes to the Yodoyabashi Station of the Midosuji Subway Line, and as it faces Yotsubashi Street and the Dojima River, this property is excellent in terms of convenience and visibility. 3) Building and Facilities This property is a large scale office building with total rentable square meters of 22,263 and the following highly competitive specifications equal to those of recently built properties: Exterior aluminum curtain walls with half-mirrored glass Rental floor nicely configured no pillar floors (approximately 1,155 ), ceiling height of 2700mm, 75mm sub-floor cavity for connection of OA equipment, floor weight capacity of 500kg/ Facilities separate air conditioning system (24 hours), card key door locking system Moreover, this property, together with the ownership interest in the Aqua Dojima East - Fontana acquired by NBF on June 30, 2004, represents the development of an entire city block.. 3 Outline of Assets to be Acquired 1) Type of Specified Assets Beneficiary interests in real estate held in trust 2) Trustee Resona Bank, Limited 2

3 NBF plans to change the trustee at the time of its acquisition of the beneficiary interests in trust. 3) Location Description in Real Property Registry Land: 54-ban 4 & 19-ban 8, Dojimahama 1-chome, Kita-ku, Osaka City, Osaka Prefecture Building: 19-banchi 8 & 54-banchi 4, Dojimahama 1-chome, Kita-ku, Osaka City, Osaka Prefecture (Street Address) 4-16, Dojimahama 1-chome, Kita-ku, Osaka City 4) Use (primary use listed in Real Property Registry) Office/Store 5) Type of Ownership Land: 54-ban 4 & 19-ban 8, Dojimahama 1-chome, Kita-ku, Osaka City, Osaka Prefecture (sole ownership) Building: 19-banchi 8 & 54-banchi 4, Dojimahama 1-chome, Kita-ku, Osaka City, Osaka Prefecture i) House number: 19-ban 1, Dojimahama 1-chome (sole ownership) ii) House number: 19-ban 2, Dojimahama 1-chome (sole ownership) 6) Square meters Description in Real Property Registry i) Land: total site area for the building: 3, ii) Building: total floor space of the building: 35, ) Structure Description in Real Property Registry Steel frame, steel framed reinforced concrete and reinforced concrete structure, flat roof, 19 floors above ground with 2 floors below ground 8) Completion Description in Real Property Registry Expanded on December 2, 1996 (Certificates of inspection were obtained in April 1993 for the eastern portion of the property, in October 1995 for the western portion of the property, and in December 1996 for the underground parking lot on the north side of the property, which were completed in three stages.) 9) Valuation Valuation prepared by Daiwa Real Estate Appraisal Co., Ltd. Appraisal Value: 18.4 billion Date of Valuation:August 20, ) Earthquake PML (*) 4.7% obtained from the building condition investigation report prepared by Engineering & Risk Services Corporation 3

4 ( )PML=Probable Maximum Loss. While there is no standardized, precise definition of this term, with respect to buildings, earthquake PML indicates the ratio (%) of restoration costs against the costs of reconstruction of a building resulting from the amount of destruction suffered due to a foreseeable catastrophic earthquake (being an earthquake which may occur every 475 years, and whose possibility of occurrence is 10% during a 50 year period) occurring during the building s foreseeable useful life (50 years being the general useful life of buildings). The PML percentage appearing above indicates a 90% level of reliability. As a building s earthquake resistance and the characteristics of the magnitude of an earthquake are inter-related, the 90% level of reliability means a PML not exceeding the figures for up to 90 buildings out of a hundred buildings. However, in general, PML indicates the damage ratio only for buildings (structural materials, non-structural materials, and construction facilities) while incidental damages such as damage to production equipment or machinery, furniture or fixtures, damage due to water or fire, indemnification of affected persons, or loss of business due to suspension of business etc., are not included. 11) Existence of Security Interests (Liens) A right of pledge has been established on the property, which is expected to be extinguished before acquisition by NBF. 12) Tenancy, etc. (i) Tenants The number of tenants of this property whose lease contracts have been concluded as of August 26, 2004 is thirty-two (32). (ii) Area Total Rentable Square Meters: 22, Total Leased Square Meters: 17, Occupancy Rate: The occupancy rate as of August 26, 2004 is 78.2%, based on the concluded lease contracts of the tenants. 4 Outline of Seller 1) Name: Raison Property Ltd. 2) Address: 2-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo 3) Representative: Akira Sugai 4) Capital: 3,000,000 (as of January 20, 2004) 5) Principal Business: leasing, management, ownership and operation of real estate, acquisition, ownership and disposition of beneficiary interests in real estate held in trust, etc. 6) Miscellaneous: Raison Property Ltd. is a 100% subsidiary of Raison Holdings, Ltd., a 4

5 limited liability intermediate corporation. As of this date, the acquisition funds for the beneficiary interests in the said property held in trust have been procured through Mitsui Fudosan's investment in a "tokumei kumiai" partnership as well as by means of loans from financial institutions. 5 Transactions with Interested Parties etc. 1) Asset Management Services etc. for Seller NBF s current acquisition of these beneficiary interests in trust does not fall under the category of Related Parties Transactions as defined in the Law concerning Investment Trusts and Investment Corporations of Japan. However, Raison Property Ltd., the seller, entrusts its asset management business to Mitsui Fudosan Co., Ltd., one of the related parties of Nippon Building Fund Management, Ltd., and its decisions are based on advice provided by Mitsui Fudosan Co., Ltd. Moreover, as set forth above, Mitsui Fudosan Co., Ltd.'s investment in the form of a "tokumei kumiai" partnership investment has already been accepted. 2) Operation and Management For real estate etc. acquired by NBF, Office Management Business including profit management, operation and management of real estate etc. is in principle entrusted to Mitsui Fudosan Co., Ltd., one of the related parties of Nippon Building Fund Management, Ltd. The same will apply to the current acquisition. 6 Acquisition Schedule August 26, 2004 Determination to make acquisition August 27, 2004 Execution of sale and purchase agreement of land and building September 30, 2004 Anticipated date of transfer 7 Forecasted Management Situation as at the close of December, 2004 There is no change to the forecasted management situation during the period ending December 31, 2004, as this acquisition will have little impact upon the management situation of NBF during such period.. End. This English language notice is a translation of the Japanese language notice dated August 26, 2004 and was prepared solely for the convenience of, and reference by, overseas investors. NBF makes no warranties as to its accuracy or completeness. 5

6 <Attached Materials> Reference Material 1 Reference Material 2 Reference Material 3 Estimated Revenues and Expenses from the Property to be Acquired Photo of the Exterior of the Property Summary of Portfolio after Acquisition of the Property Reference Material 1 Estimated Revenues and Expenses from the Property to be Acquired (in million yen) Revenues (including ancillary revenues) 1,666 Expenses (excluding depreciation) 530 public imposts and taxes 174 miscellaneous 355 expenses management entrustment fees, costs of repair etc. 354 insurance premiums 1 Property NOI (Net Operating Income) 1,136 Premises upon which Estimated Revenues and Expenses are based 1. The above figures represent annualized revenues and expenses after exclusion of extraordinary factors for the year of acquisition (not the forecasted figures for the coming period). 2. Revenues are premised on an occupancy rate of 93%. 3. Among expenses, figures given for management entrustment fees are estimates based on reductions from the current contract amounts. 6

7 Reference Material 2 Photo of the Exterior of the Property 7

8 Reference Material 3 Summary of Portfolio after Acquisition of the Property Area Name of Building JFE Bldg. Shirokane 1-chome East Area Redevelopment Project(Note 1) Shiba NBF Tower Shinjuku Mitsui Bldg. No.2 GSK Bldg. Naka-Meguro GT Tower Daiya Toranomon Bldg. Kowa Nishi Shinbashi Bldg. B Nippon Steel Bldg. No.2 Nihonbashi Muro-machi Center Bldg. Alliance Shibuya Garden Front Shiba A Bldg. Takanawa 1-chome Bldg. Sumitomo Densetsu Bldg. Higashi-Ginza Square(tentative name, Note 2) Daiya Ikebukuro Bldg. Ikebukuro TG Homest Bldg. Sudacho Verde Bldg. Nishi-Shinjuku Mitsui Bldg. Ebisu CS Bldg. Nakano-Sakaue Sunbright Twin Yokohama ST Bldg. NBF Atsugi Bldg. Tsukuba Mitsui Bldg. S-ino Omiya North Wing (Note 3) Daido Life Omiya Bldg. Matsudo City Bldg. Sapporo L-Plaza Sapporo Minami Nijo Bldg. NBF Sendai Honcho Bldg. Unix Bldg. Niigata Telecom Bldg. Hirokoji Toei Bldg. Aqua Dojima Daiwa Dojima Bldg. (Note 4) Sun Mullion NBF Tower Sakai Higashi Center Bldg. Tanimachi Kowa Bldg. Aqua Dojima East Otemae Center Bldg. Shijo Karasuma Minami Bldg. NBF Hiroshima Tatemachi Bldg. Hiroshima Fukuromachi Bldg. Hakata Gion 21 Bldg. Book Value Yen Percentage of Percentage in thousands each area The Price figures in the above table are in principle the appraisal value disclosed as of the end of June 2004 (the appraisal value of real estate with date of valuation being June 30, 2004); provided, however, for properties acquired (or to be acquired) after July 2004, prices are acquisition prices (excluding miscellaneous acquisition costs, fixed assets tax, city-planning tax and consumption tax) as stated in the respective sale and purchase contracts as of the dates of the decision to acquire such properties. (Note 1) Expected to be acquired on March 31, 2006; provided, however, that in the event that profitability is improved as the result of tenants attracted by the seller, the price may be 8

9 increased to a maximum of 31,000,000,000 by the transfer date in accordance with certain rules. (Note 2) Expected to be acquired on March ; provided, however, that, in the same manner as in Note 1, in the event that profitability is improved as the result of tenants attracted by the seller, the price may be increased to a maximum of 5,200,000,000 by the transfer date in accordance with certain rules. (Note 3) Expected to be acquired on October 1, (Note 4) Expected to be acquired on September 30,