For Immediate Release

Transcription

1 For Immediate Release ORIX JREIT Announces Asset Acquisitions PRIME SQUARE HIROSE-DORI and Central Crib Roppongi REIT Issuer: ORIX JREIT Inc. (TSE: 8954) Hiroshi Yasuda President and Executive Director Asset Management Company: ORIX Asset Management Corporation Yoshitaka Kamemoto President and CEO Inquiries: Junko Kanazawa Director, Corporate Senior Vice President TEL: TOKYO, March 2, 2015 ORIX JREIT Inc. ( OJR ) announced that our asset management company, ORIX Asset Management Corporation ( OAM ), resolved to propose the following asset acquisitions at OAM board meeting held on March 2, Acquisition Summary (1) PRIME SQUARE HIROSE-DORI Asset to be acquired : Real estate trust beneficial interest Scheduled acquisition price : 7,280,000,000 (excluding national and local consumption taxes, etc.) Scheduled purchase and : sales agreement date March 2, 2015 Scheduled acquisition date : April 1, 2015 Current owner and seller : Godo Kaisha Hirose-dori Jigyokaihatsu Funding method : Proceeds from the issuance of new investment units through public offering (Note1 ) (Note 2) and cash on hand Payment terms : 100% on delivery (2) Central Crib Roppongi Asset to be acquired : Real estate trust beneficial interest Scheduled acquisition price : 7,493,000,000 (excluding national and local consumption taxes, etc.) Scheduled purchase and sales agreement date : March 2, 2015 Scheduled acquisition date : April 1, 2015 Current owner and seller Funding method Payment terms : DSMI Juno Co. Ltd. : Proceeds from the issuance of new investment units through public offering (Note 1) (Note 2) and cash on hand : 100% on delivery 1/15

2 Notes: 1. For details, please refer to the press release ORIX JREIT Announces Issue of New Investment Units and Secondary Offering of Units to be announced at a later date. 2. Borrowing may be subject to be executed depending on the amount of proceeds from the issuance of new investment units through public offering. Reference: Profitability Overview etc. of Assets to be Acquired (Note 1) Asset Type Area (Note 2) Seller (Note 3) Scheduled Acquisition yen Appraisal yen (1/2) vs. Appraisal Value (%) NOI Yeild (Note 4) (%) Yeild after Depreciation (Note 5) (%) PRIME SQUARE HIROSE-DORI Office Other Areas (Sendai-shi) Sponsor (Development) 7,280 7, Central Crib Roppongi Residential Property 6 Central Tokyo wards Sponsor 7,493 7, Total 14,773 15, Existing Portfolio (Note 6) Notes: 1. Assets to be acquired refers to the individual asset or collectively to all the assets indicated above central Tokyo wards refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya and Shinagawa wards and Remaining Tokyo wards refers to the remaining Tokyo wards other than the 6 central Tokyo wards. Other Parts of the Greater Tokyo Area refers to parts of Tokyo other than the 6 central Tokyo wards and Remaining Tokyo wards, Kanagawa, Saitama and Chiba Prefectures. Other areas refers to areas other than the 6 central Tokyo wards, Remaining Tokyo wards and Other Parts of the Greater Tokyo Area. 3. As to the Seller column, Sponsor (Development) is indicated for properties that were planned, developed and attracted by the ORIX Group. ORIX Group refers to ORIX Corporation and its group companies. 4. The "NOI Yield of Assets to be acquired is calculated by using the formula: Annualized net revenue in the direct capitalization method recorded in the appraisal reports at the time of decision to acquire / Scheduled acquisition price; the figures are rounded to the first decimal place. 5. The " Yield after Depreciation of Assets to be acquired is calculated by using the formula: ( Annualized net revenue in the direct capitalization method recorded in the appraisal reports at the time of decision to acquire depreciation assumed by OJR) / Scheduled acquisition price; the figures are rounded to the first decimal place. 6. Existing portfolio is the total assets owned as of August 31, 2014 and seven properties (ORE Nishiki 2-chome Bldg., ORE Ikebukuro, SO-CAL LINK OMOTESANDO, Friend Town Fukaebashi (Land), R-Styles Musashi-Kosugi, Iwatsuki Logistics Center, and Dojima Plaza Bldg.,) acquired after September 1, NOI Yield and Yield after Depreciation of existing portfolio are calculated based on the annualized actual figures for assets owned as of August 31, 2014 and the figures for the seven assets acquired after September 1, 2014 are calculated based on the figures in appraisal reports at the acquisition time. 2. Purpose of the Acquisition The current economic environment surrounding OJR is characterized by a moderate recovery trend due to the effects of Abenomics, additional monetary easing measures by the Bank of Japan and expectations for the 2020 Tokyo Olympic Games. However, there still remain concerns regarding, for example, in Japan, the effect of the consumption tax hike, and overseas, economic slowdown in Russia, Europe and China. With such a perception of the environment OJR aims to realize the stable growth of unitholders value under any business climate while managing risks by conducting selective acquisitions from the three perspectives of growth potential, profitability and stability, regardless of asset types, based on the investment policy utilizing ORIX Synergy (Note) and the strength as Diversified REIT. 1) Utilize strength as Diversified REIT and implement carefully selective investment in assets regardless of asset type by foreseeing environment changes 2) Manage risks of assets to invest by utilizing the ORIX Synergy 2/15

3 Based on the above investment policy, OJR has carefully selected from the pipeline of ORIX Group and decided to acquire one relatively new office building developed by ORIX Group which is located in central Sendai, and one residential asset which is located in central Tokyo, where stable demand can be expected. OJR will continuously strive to increase the portfolio s profitability and stability aiming to realize stable growth in unitholders value going forward utilizing the strength of ORIX Synergy and Diversified REIT. Note: The ORIX Synergy refers to the cooperative relationship between ORIX Group companies and OJR. 3. Summary of Assets to be acquired (1) PRIME SQUARE HIROSE-DORI Specified asset category Real estate trust beneficial interest Trustee Sumitomo Mitsui Trust Bank, Limited Term of trust agreement March 30, 2007 March 31, 2025 Address Land Building 9-27, Chuo 2-chome, Aoba-ku, Sendai-shi, Miyagi Registered Area 1, m 2 Type of ownership Registered usage Registered completion date Fee simple ownership Office, Retail, Parking May 2009 Type of ownership Fee simple ownership Registered Area 14, m 2 Registered construction Previous owner (beneficiary) Scheduled acquisition price Appraisal value 7,500,000,000 Date of Appraisal February 1, 2015 Appraiser Steel-frame, Steel-frame reinforced concrete with flat roof, 14 floors with 1 underground floor Godo Kaisha Hirose-dori Jigyokaihatsu 7,280,000,000 (excluding national and local consumption taxes, etc.) Japan Real Estate Institute Scheduled acquisition date April 1, 2015 Public transit access Usage restrictions Architect Structural engineer General contractor Building inspection agency Scheduled Property Manager Main facilities and specifications Earthquake resistance Collateral Special notes Special features of the asset Approx. 1-minute walk from Hirose-dori Station on Sendai Subway Namboku Line Commercial zone HAZAMA ANDO CORPORATION First-Class Architect Office HAZAMA ANDO CORPORATION First-Class Architect Office HAZAMA ANDO CORPORATION The Building Center of Japan MITSUI FUDOSAN BUILDING MANAGEMENT CO.,LTD Elevator: 4 Parking: 101 vehicles (mechanical parking system:100, ground space:1) Leased Area (Standard floor area): Approx.774 m 2 (Approx. 234 tsubo) Ceiling Height: 2,800 mm Raised floors for computer wiring:100 mm Others: Individually controlable air conditioning PML: 2% (based on Sompo Japan Nipponkoa Risk Management, Inc. (Note 1) report) None None The asset is a relatively new office building developed by the sponsor. 3/15

4 No. of tenants 35 (as of December 31, 2014) Gross rental income The asset is located approx. 1-minute walk from Hirose-dori Station on the Sendai Subway Namboku Line and also within walking distance from Sendai Station, making it highly convenient to access. A flexible leasing can be adopted due to factors including the asset having a standard floor area of approx. 230 tsubo and a regular floor shape divisible into a maximum of 6 sections, and its location in a major office area of Sendai close to public offices, so demand from a wide variety of businesses can be expected. The office market in Sendai area temporarily worsened from 2008 to 2010 due to a large supply, but the vacancy rate has been in a trend of steady decline since the Great East Japan Earthquake and there is a sense of rents bottoming out. In addition, new supply in the near future appears limited. Current tenants of the asset are diverse with 35 companies including manufacturers, call centers, etc., and stable operation can be expected. The asset has parking space available for 101 vehicles attracting tenants holding many vehicles for business use. 39 million per month (excluding car parking space etc., as of (Note 2) December 31, 2014) (Note 2) Security deposits 363 million (as of December 31, 2014) Total rent space 10, m 2 (as of December 31, 2014) Total rentable space 10, m 2 (as of December 31, 2014) Occupancy rate 97.5% (as of December 31, 2014) (Note 2) 412 million per annum (Note) The net operating income (NOI) represents the assumed revenue/expenditure balance under stabilized occupancy, based on the terms of the lease contract, Assumed net operating etc. at the scheduled acquisition date, but excluding extraordinary factors income (NOI) that may occur during the first year of acquisition. The preconditions are as below; these figures are not what OJR expects for the current fiscal year. 1) Occupancy rate: 96% 2) Taxes: Taxes are calculated on the standard tax amount for fiscal Notes: 1. PML (Probable Maximum Loss) shows the ratio (%) of cost of recovering a building after it is damaged to its state before the damage occurred against repurchase price, when assuming an earthquake that may occur once in 475 years in average in probability statistics (recurrence interval of 475 years). The earthquake risk of a building is evaluated based on the event risk curve that shows the relationship of amount of expected loss (horizontal axis) and probability for the loss to exceed the year (vertical axis). However, the risk curve has variability because loss evaluation comes with uncertainties in earthquake resistance performance of the building, behavior of earthquake vibration, etc. Accordingly, the above PML figures use the risk curve with credibility level of 90%, and are rounded to the nearest whole number. 2. Figures are rounded down to the nearest million yen. 4/15

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6 (2) Central Crib Roppongi Specified asset category Trustee Real estate trust beneficial interest Mitsubishi UFJ Trust and Banking Corporation Term of trust agreement February 17, 2004 March 31, 2025 Address Land Building Ⅰ: 3-5, Roppongi 2-chome, Minato-ku, Tokyo Ⅱ: 3-6, Roppongi 2-chome, Minato-ku, Tokyo Ⅲ: 3-7, Roppongi 2-chome, Minato-ku, Tokyo Registered Area 1, m 2 Type of ownership Registered usage Registered completion date Type of ownership Registered Area Registered construction Previous owner (beneficiary) Scheduled acquisition price Fee simple ownership Ⅰ: Apartment Complex, Retail Ⅱ: Apartment Complex, Retail Ⅲ: Apartment Complex, Retail Ⅰ: January 2006 Ⅱ: February 2006 Ⅲ: February 2006 Fee simple ownership Ⅰ: 2, m 2 Ⅱ: 3, m 2 Ⅲ: 3, m 2 Ⅰ: Reinforced concrete, Steel-frame reinforced concrete with flat roof, 15 floors with 1 underground floor Ⅱ: Reinforced concrete, Steel-frame reinforced concrete with flat roof, 15 floors with 2 underground floors Ⅲ: Reinforced concrete, Steel-frame reinforced concrete with flat roof, 15 floors with 1 underground floor DSMI Juno Co. Ltd. Appraisal value 7,730,000,000 Date of Appraisal February 1, 2015 Appraiser 7,493,000,000 (excluding national and local consumption taxes, etc.) Japan Real Estate Institute Scheduled acquisition date April 1, 2015 Public transit access Usage restrictions Architect Structural engineer General contractor Building inspection agency Property Manager (scheduled) Main facilities and specifications Approx. 3-minute walk from Roppongi-itchome Station on Tokyo Metro Namboku Line Commercial zone Ⅰ: RUI SEKKEISHITSU Co., Ltd. Ⅱ: RUI SEKKEISHITSU Co., Ltd. Ⅲ: RUI SEKKEISHITSU Co., Ltd. Ⅰ: RUI SEKKEISHITSU Co., Ltd. Ⅱ: RUI SEKKEISHITSU Co., Ltd. Ⅲ: RUI SEKKEISHITSU Co., Ltd. Ⅰ: SHIMIZU CORPORATION Ⅱ: SHIMIZU CORPORATION Ⅲ: SHIMIZU CORPORATION The Building Center of Japan Tosei Community Co., Ltd. Ⅰ: Elevator: 1 Parking: 6 vehicles (mechanical parking system) Ⅱ: Elevator: 1 Parking: 6 vehicles (mechanical parking system) 6/15

7 Earthquake resistance Collateral Special notes Special features of the property No. of tenants Gross rental income Ⅲ: Elevator: 1 Parking: 6 vehicles (mechanical parking system) PML (Note 1) : Ⅰ: 5% Ⅱ: 5% Ⅲ: 5% (based on Sompo Japan Nipponkoa Risk Management, Inc. report) None Some of the rainwater pipes of a building in the adjacent land on the northeast side (lot number 38-14) cross over the border of the asset. Some of the ducts and exhaust pipes of a building in the adjacent land on the southwest side (lot number 45-4) cross over the border of the asset. Some of the blindfold boards, ducts and pipe covers of a building in the adjacent land on the southwest side (lot number 46-5) cross over the border of the asset. The asset is located approx. 3-minute walk from Roppongi-itchome station on Tokyo Metro Namboku Line and within walking distance from 5 stations and 5 lines, which include Roppongi Station, Kamiyacho Station, Tameike-sanno Station and Akasaka Staiton. The asset features 210 rentable rooms, mainly one-room studios (1R) and one-bedroom apartments (1LDK) below 40m 2. The main rent range is around 140,000 yen to 180,000 yen targeting upper-middle-class single person who prioritize convenient commuting. Many of tenants work for economy-sensitive companies in IT, service and financial sectors and are mainly in their 20s and 30s. Approx. half of tenants work in Minato Ward. With the progress of redevelopment in the surrounding area, an increase in the number of workers is expected and stable demand can be expected as it is a rare asset satisfying the need for home and workplace proximity. 179 (as of December 31, 2014) (Note2) 32 million per month (excluding car parking space etc., as of (Note 3) December 31, 2014) Security deposits 50 million (as of December 31, 2014) (Note 3) Total rent space 7, m 2 (as of December 31, 2014) Total rentable space 7, m 2 (as of December 31, 2014) Occupancy rate 92.8% (as of December 31, 2014) (Note 3) 345 million per annum (Note) The net operating income (NOI) represents the assumed revenue/expenditure balance under stabilized occupancy, based on the terms of the lease contract, Assumed net operating etc. at the scheduled acquisition date, but excluding extraordinary factors income (NOI) that may occur during the first year of acquisition. The preconditions are as below; these figures are not what OJR expects for the current fiscal year. 1) Occupancy rate: 95% 2) Taxes: Taxes are calculated on the standard tax amount for fiscal Notes: 1. PML (Probable Maximum Loss) shows the ratio (%) of cost of recovering a building after it is damaged to its state before the damage occurred against repurchase price, when assuming an earthquake that may occur once in 475 years in average in probability statistics (recurrence interval of 475 years). The earthquake risk of a building is evaluated based on the event risk curve that shows the relationship of amount of expected loss (horizontal axis) and probability for the loss to exceed the year (vertical axis). However, the risk curve has variability because loss evaluation comes with uncertainties in earthquake resistance performance of the building, behavior of earthquake vibration, etc. Accordingly, the above PML figures use the risk curve with credibility level of 90%, and are rounded to the nearest whole number. 2. As a pass through-type master lease agreement will be concluded with Tosei Community Co., Ltd. upon acquisition, there is scheduled to be one tenant. 3. Figures are rounded down to the nearest million yen. 7/15

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9 4. Profile of Owner/Seller (as of January 30, 2015) (1) PRIME SQUARE HIROSE-DORI Company name Godo Kaisha Hirose-dori Jigyokaihatsu ( the Company ) c/o Tokyo Kyodo Accounting Office Address 1-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo Representative Partner: General Incorporated Association Sendai Representative Jigyokaihatsu Functional Manager: Shinji Arakawa Primary business Acquisition, holding, disposition, leasing and management, etc. of real estate Shareholders equity 1 million Major shareholders Net Assets Total Assets *Not disclosed as consent has not been obtained from the Company. *Not disclosed as consent has not been obtained from the Company. *Not disclosed as consent has not been obtained from the Company. Date of establishment February 23, 2007 Relationships with OJR or its asset management company There is no capital relationship required for reporting between OJR or OAM and the Company. However, ORIX Corporation, the parent company of Capital relationship OAM (a related party of OAM as stipulated in the Investment Trusts Act), has preferred and subordinated silent partnership investments in the Company. Personal relationships There is no personal relationship required for reporting between OJR or OAM and the Company. Business relationships Applicability to related parties There is no business relationship required for reporting between OJR or OAM and the Company. The Company does not fall under related party of OJR. Furthermore, ORIX Real Estate Investment Advisors Corporation (a related party of OAM as stipulated in the Investment Trusts Act) is contracted to provide asset management for the Company. The Company falls under related party as stipulated in the Affiliated Company Transaction Regulations, which are internal rules of OAM. (2) Central Crib Roppongi Company name Address Representative Primary business Shareholders equity Major shareholders Net Assets Total Assets Date of establishment June 14, 1991 DSMI Juno Co. Ltd. ( the Company ) c/o Tokyo Kyodo Accounting Office 1-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo Director: Masakazu Hongo Sales, brokerage and mediation of monetary claims, real estate and stocks 3 million *Not disclosed as consent has not been obtained from the Company. *Not disclosed as consent has not been obtained from the Company. *Not disclosed as consent has not been obtained from the Company. 9/15

10 Relationships with OJR or its asset management company There is no capital relationship required for reporting between OJR or OAM and the Company. However, ORIX Corporation, the parent company of Capital relationship OAM (a related party of OAM as stipulated in the Investment Trusts Act), has a silent partnership investment in the Company. Personal relationships There is no personal relationship required for reporting between OJR or OAM and the Company. Business relationships Applicability to related parties There is no business relationship required for reporting between OJR or OAM and the Company. The Company does not fall under related party of OJR. Furthermore, ORIX Real Estate Investment Advisors Corporation (a related party of OAM as stipulated in the Investment Trusts Act) is contracted to provide asset management for the Company. The Company falls under related party as stipulated in the Affiliated Company Transaction Regulations, which are internal rules of OAM. 5. Information of previous Ownership, etc. (1) PRIME SQUARE HIROSE-DORI Previous owner Godo Kaisha Hirose-dori Company name Jigyokaihatsu Special relationships Refer to Section 4 Profile of involved Owner/Seller above New development Background to and reason for (Construction completed in May, acquisition 2009) Acquisition date - - Acquisition price - - Owner before previous owner Not a party having special relationship of interest (2) Central Crib Roppongi Previous owner Owner before previous owner Company name DSMI Juno Co. Ltd. Not a party having special relationship of interest Special relationships Refer to Section 4 Profile of involved Owner/Seller above - Background to and reason for Acquired for the purpose of acquisition investment and management - Acquisition date June 23, Acquisition price Omitted, as previous owner held - property for over a year Profile of Intermediary (Common to All Assets) None 7. Transaction with Related-Party, etc. The following transaction has followed procedures in accordance with the Affiliated Company Transaction Regulations which are internal rules of OAM. OJR will acquire PRIME SQUARE HIROSE-DORI from Godo Kaisha Hirose-dori Jigyokaihatsu, Central Crib Roppongi from DSMI Juno Co. Ltd., For a summary of these related parties, etc. Please see 4. Profile of Owner/Seller above. 10/15

11 8. Future Outlook With regards to impact on the financial forecast for the 27 th fiscal period (from March 1, 2015 through August 31, 2015) and 28 th fiscal period (from September 1, 2015 through February 29, 2016) due to the asset acquisitions, please refer to the press release ORIX JREIT Announces Revisions of Earnings & Distributions Forecasts for the 26 th Fiscal Period (Ended February 28, 2015) and the 27 th Fiscal Period (Ending August 31, 2015), and Earnings & Distributions Forecasts for the 28 th Fiscal Period (Ending February 29, 2016) announced today. 9. Appraisal Summary I. Appraisal summary (1) PRIME SQUARE HIROSE-DORI Name of asset PRIME SQUARE HIROSE-DORI Date of Value Appraisal Value (In thousands of yen) Appraiser Item Content Capitalization Method 7,500,000 Valuation by the Direct Capitalization 7,600,000 (1) Gross Operating Revenue [(a)-(b)] 565,273 (a) Effective gross revenue Grounds (In thousands of yen) 589,053 Assumed based on expected stable mid- to long-term rent Assumed based on expected stable mid- to long-term occupancy (b) Vacancy loss 23,780 rate (2) Operating Expensed 155,735 Estimated by referring to historical figures and current cost as Maintenance Expenses 36,000 well as cost of comparable properties, and considering the specific characteristics of the property Estimated based on historical figures and by referring to Utility Expenses 54,000 occupancy rates, etc. of rental room portions Estimated by referring to considering historical figures, the level Repair Expenses 2,915 of such costs of similar properties and an annual average of repair costs in the engineering report, etc. Property Management Fee 9,415 Tenant Advertisement Cost 4,096 Estimated by referring to the rates based on the existing terms and conditions and considering the rate for similar properties and the specific characteristics of the property Estimated based on the average annual amount calculated based on the anticipated turnover period of the tenant Tax and Public Dues 48,383 Estimated based on the standard taxable value, etc. for fiscal 2014 Casualty Insurance Estimated considering insurance quotes and insurance rates of 908 similar properties, etc. Other Expenses Estimated with expenses on the neighborhood association as 18 other expenses (3) Net Operating Income [(1)-(2)] 409,538 (4)Profit from Managing Security Deposit (5)Capital Expenditure 6,690 (6)Net Revenue [(3)+(4)-(5)] 410,319 February 1, ,500,000 Japan Real Estate Institute 7,471 Calculated with investment yield at 2.0% Calculated under an assumption that expected expenditure is accumulated every term on average, considering level of capital expenditure and age of similar properties and an annual average of renewal costs in the engineering report 11/15

12 (7)Cap Rate 5.4% DCF Method 7,390,000 Calculated by adding or reducing a spread derived from the locational, building and other conditions of the property, also considering future uncertainties and investment yields for transactions of similar properties, etc. Calculated comprehensively considering specific characteristics Discount Rate 5.2% of the property by referring to investment yields for transactions of similar properties, etc. Calculated comprehensively considering future trends of investment yields, risks in the property as an investment target, Terminal Cap Rate 5.6% general forecasts for economic growth rate and trends in property prices and rents, etc. by referring to investment yields for transactions of similar properties, etc. Cost Approach 7,100,000 Ratio of Land 50.7% Ratio of building 49.3% Any special considerations made in the reconciliation of estimated value Determined using the Income Approach Value with the Cost Approach Value used only for reference considering that the Income Approach Value is more convincing because the price determination process is accurately reproduced with respect to earnings. (2) Central Crib Roppongi Name of asset Central Crib Roppongi Date of Value Appraisal Value (In thousands of yen) Appraiser Item Content Capitalization Method 7,730,000 Valuation by the Direct Capitalization 7,760,000 (1) Gross Operating Revenue [(a)-(b)] 427,950 (a) Effective gross revenue Grounds (In thousands of yen) 450,833 Assumed based on expected stable mid- to long-term rent Assumed based on expected stable mid- to long-term occupancy (b) Vacancy loss 22,883 rate (2) Operating Expensed 76,963 Estimated by referring to historical figures and current cost as Maintenance Expenses 7,650 well as cost of comparable properties, and considering the specific characteristics of the property Estimated based on historical figures and by referring to Utility Expenses 7,000 occupancy rates, etc. of rental room portions Estimated by restored costs for original states when tennats replace, referring to considering historical figures and future Repair Expenses 7,813 maintenance plans, the level of such costs of similar properties and an annual average of repair costs in the engineering report, etc. Property Management Fee 9,508 Tenant Advertisement Cost 19,581 February 1, ,730,000 Japan Real Estate Institute Estimated by referring to the rates based on the existing terms and conditions and considering the rate for similar properties and the specific characteristics of the property Estimated based on the average annual amount calculated based on the anticipated turnover period of the tenant Tax and Public Dues 22,732 Estimated based on the standard taxable value, etc. for fiscal /15

13 Casualty Insurance Estimated considering insurance quotes and insurance rates of 461 similar properties, etc. Other Expenses Estimated with expenses on usage of the Internet and CATV as 2,218 other expenses (3) Net Operating Income [(1)-(2)] 350,987 (4)Profit from Managing Security Deposit (5)Capital Expenditure 10, Calculated with investment yield at 2.0% Calculated under an assumption that expected expenditure is accumulated every term on average, considering level of capital expenditure and age of similar properties and an annual average of renewal costs in the engineering report (6)Net Revenue [(3)+(4)-(5)] 341,497 Calculated by adding or reducing a spread derived from the locational, building and other conditions of the property, also (7)Cap Rate 4.4% considering future uncertainties and investment yields for transactions of similar properties, etc. DCF Method 7,690,000 Calculated comprehensively considering specific characteristics Discount Rate 4.1% of the property by referring to investment yields for transactions of similar properties, etc. Calculated comprehensively considering future trends of investment yields, risks in the property as an investment target, Terminal Cap Rate 4.5% general forecasts for economic growth rate and trends in property prices and rents, etc. by referring to investment yields for transactions of similar properties, etc. Cost Approach 7,590,000 Ratio of Land 82.2% Ratio of building 17.8% Any special considerations made in the reconciliation of estimated value Determined using the Income Approach Value with the Cost Approach Value used only for reference considering that the Income Approach Value is more convincing because the price determination process is accurately reproduced with respect to earnings. II. Long-Term Projected Repairs According to the engineering reports, the maintenance and renewal costs over the next 12 years following the survey date are as follows. Asset name Company name Maintenance Cost Replacement Cost (In millions of yen) (In millions of yen) PRIME SQUARE HIROSE-DORI TOKIO MARINE & NICHIDO RISK CONSULTING Co., Ltd ,006 Central Clib Roppongi TOKIO MARINE & NICHIDO RISK CONSULTING Co., Ltd ,977 Reference Materials Portfolio summary after acquisition of the two assets Notes: 1. This is the English translation of original Japanese documents and is provided solely for information purposes. If there are any discrepancies between the translation and the Japanese original, the latter shall prevail. 2. The original Japanese version of this announcement is being distributed today to the Kabuto Club, the Ministry of Land, Infrastructure, Transport and Tourism Press Club, and the Ministry of Land, Infrastructure, Transport and Tourism Construction Specialty Publication Press Club 13/15

14 Portfolio summary after acquisition of the assets to be acquired Assets to be acquired Property (Note 2) Acquisition % to (Note 1) Date Price( million) Total Acquisition Price Offices 6 Central Aoyama Suncrest Building December , Tokyo Wards Round-Cross Ichi-bancho December , Round-Cross Nishi Shinjuku December , DT Gaien December , Nihonbashi East Building December , Yoyogi Forest Building December , Round-Cross Minami Azabu December , Round-Cross Akasaka January , Round-Cross Mita January , Shiba Daimon Building January , Round-Cross Tsukiji January , ORIX Shiba 2-chome Building September , Aoyama 246 Building March , Round-Cross Shinjuku April , Seafort Square Center Building September April , ORIX Akasaka 2-chome Building June December , Round-Cross Shinjuku 5-chome April , Nihonbashi Honcho 1-chome Building March , Round-Cross Shibuya March , ORIX Suidobashi Building March , ORIX Shinagawa Building June , ORIX Real Estate Nishi Shinjuku Building March , OX Tamachi Building March , MG Shirokanedai Building November , SHIBUYA PINE Bldg. March , MG Ichigaya Building April , Subtotal 159, Remaining Carrot Tower December , Tokyo Wards Toyo MK Building December , Beside Kiba December , ORIX Ikebukuro Building April , Round-Cross Kamata March , KN Jiyugaoka Plaza May , ORIX Meguro Building July , Akihabara Business Center June , Subtotal 42, Other Parts of Neo City Mitaka December , the Greater Tokyo Area Round-Cross Kawasaki April , Omiya Miyacho Building March , Omiya Shimocho 1-chome Building March , Subtotal 14, Other Areas Nagoya Itochu Building September , ORIX Koraibashi Building April , Lunar Sendai June , ORIX Nagoya Nishiki Building September , ORE Sapporo Building October , ORIX Kobe Sannomiya Building September , ORE Nishiki 2-chome Bldg. October , DOJIMA PLAZA BLDG. December , PRIME SQUARE HIROSE-DORI April 1, 2015 (scheduled) 7, Subtotal 66, Offices Total 283, Logistics Other Parts of Toda Logistics Center March , Facilities the Greater Tokyo Area Ichikawa Logistics Center September , Iwatsuki Logistics Center October , Subtotal 24, Other Areas Sakai Logistics Center North Building March , Komaki Logistics Center June , Subtotal 12, Logistics Facilities Total 37, /15

15 Property (Note 2) Acquisition % to (Note 1) Date Price( million) Total Acquisition Price Retail 6 Central Nihon Jisho Minami Aoyama Building October , Facilities Tokyo Wards CUBE Daikanyama March , aune Yurakucho April , Cross Avenue Harajuku November , J-ONE SQUARE January , JouLe SHIBUYA April , SO-CAL LINK OMOTESANDO October , Subtotal 31, Remaining ORE Ikebukuro September , Tokyo Wards Subtotal 6, Other Parts of aune Kohoku March , the Greater Tokyo Area aune Makuhari March , Maruetsu Sagamino March , CROSS GARDEN KAWASAKI March , Tecc Land Totsuka (Land) April , Clio Fujisawaekimae December , Subtotal 32, Other Areas Kobe Momoyamadai Shopping Center (Land) March , Okayama Kume Retail Facility January , Home Center Musashi Sendai Izumi (Land) January , aune Sapporo Ekimae June , Morioka Minami Shopping Center Sansa July , The Kitahama PLAZA (Co-Ownership:80%) April , The Kitahama PLAZA (Co-Ownership:20%) March AEON TOWN Sendai-Izumiosawa(Land) November , GRAN MART Tegata November Cross Mall Shimonoseki-Chofu January , intervillage OH! MAGARI April , Valor Suzuka Shopping Center April , SENDAI HARVEST BLDG. June , Friend Town Fukaebashi (Land) September , Subtotal 37, Retail Facilities Total 107, Apartment 6 Central Park Axis Nishi Azabu Stage December , We Will Hatchobori June , Shibaura Island Air Tower July , Belle Face Togoshi Statio May , Belle Face Meguro October , Central Crib Roppongi April 1, 2015 (scheduled) 7, Subtotal 23, Remaining Belle Face Kamata June , Tokyo Wards Belle Face Hongo Yumicho June , Belle Face Mishuku March , West Park Tower IKEBUKURO April , Belle Face Higashijujo April , Subtotal 32, Other Parts of R-Styles Musashi-Kosugi October , the Greater Tokyo Area Subtotal 4, Other Areas Belle Face Osaka Shinmachi June , Belle Face Amagasaki June , Belle Face Miyamachi April , Belle Face Bansui-street April Belle Face Kanazawa Kohrinbo November , Subtotal 11, Residential Total 71, Others Other Parts of Cross Gate January , the Greater Tokyo Area GOOD TIME LIVING Shin-urayasu September , Subtotal 16, Others Total 16, Grand Total 98 properties 516, Notes: 1. Acquisition price above refers to acquisition price (fractions rounded down) specified in the purchase and sale agreement. Consumption taxes are not included in the price. 2. Fractions are rounded to two decimal places for the Percentage of total acquisition price. Totals for the Percentage of total acquisition price may not tally as a result of this rounding. 15/15