For Immediate Release

Transcription

1 For Immediate Release 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: ORIX JREIT Announces Asset Acquisitions and Lease Contracts with New Tenants ORE Nishiki 2-chome Bldg., ORE Ikebukuro, SO-CAL LINK OMOTESANDO, Friend Town Fukaebashi (Land), R-Styles Musashi-Kosugi, Iwatsuki Logistics Center TOKYO, September 1, 2014 ORIX JREIT Inc. ( OJR ) announced that our asset management company, ORIX Asset Management Corporation ( OAM ), resolved to propose the following asset acquisitions and lease contracts with new tenants at OAM board meeting held on September 1, OJR resolved to acquire and lease with new tenants at OJR board meeting held on the same day. 1. Acquisition Summary (1) ORE Nishiki 2-chome Bldg. Asset to be acquired : Real estate trust beneficial interest Scheduled acquisition price : 10,900,000,000 (excluding national and local consumption taxes, etc.) Scheduled purchase and sales agreement date : September 1, 2014 Scheduled acquisition date (Note 1) : October 1, 2014 Current owner and seller Funding method Payment terms : ORIX Corporation : Proceeds from the issuance of new investment units through public offering, borrowings (scheduled) (Note 3) and cash on hand : 100% on delivery (2) ORE Ikebukuro Asset to be acquired : (Note 4) Real estate trust beneficial interest (scheduled) Scheduled acquisition price Scheduled purchase and : September 1, 2014 sales agreement date Scheduled acquisition date : September 30, 2014 : 6,410,000,000 (excluding national and local consumption taxes, etc.) Current owner and seller : Tokutei Mokuteki Kaisha Joint Ark 14 Funding method : Proceeds from the issuance of new investment units through public offering, borrowings (scheduled) (Note 3) and cash on hand Payment terms : 100% on delivery 1/31

2 (3) SO-CAL LINK OMOTESANDO Asset to be acquired : Real estate trust beneficial interest Scheduled acquisition price : 2,300,000,000 (excluding national and local consumption taxes, etc.) Scheduled purchase and : sales agreement date September 1, 2014 Scheduled acquisition date : (Note 1) October 1, 2014 Current owner and seller : ORIX Corporation Funding method : Proceeds from the issuance of new investment units through public offering, borrowings (scheduled) (Note 3) and cash on hand Payment terms : 100% on delivery (4) Friend Town Fukaebashi (Land) Asset to be acquired : (Note 4) Real estate trust beneficial interest (scheduled) Scheduled acquisition price Scheduled purchase and : September 1, 2014 sales agreement date Scheduled acquisition date : September 30, 2014 Current owner and seller Funding method Payment terms : 2,400,000,000 (excluding national and local consumption taxes, etc.) : ORIX Real Estate Corporation : Proceeds from the issuance of new investment units through public offering, borrowings (scheduled) (Note 3) and cash on hand : 100% on delivery (5) R-Styles Musashi-Kosugi Asset to be acquired : (Note 4) Real estate trust beneficial interest (scheduled) Scheduled acquisition price : 4,433,000,000 (excluding national and local consumption taxes, etc.) Scheduled purchase and : sales agreement date September 1, 2014 Scheduled acquisition date : (Note 1) October 1, 2014 Current owner and seller : ORIX Life Insurance Corporation (quasi co-ownership: 97%) House Mate Partners Co., Ltd. (quasi co-ownership:3%) Funding method : Proceeds from the issuance of new investment units through public offering, borrowings (scheduled) (Note 3) and cash on hand Payment terms : 100% on delivery (6) Iwatsuki Logistics Center Asset to be acquired : Real estate trust beneficial interest Scheduled acquisition price Scheduled purchase and : September 1, 2014 sales agreement date Scheduled acquisition date : October 1, 2014 Current owner and seller Funding method Payment terms : 6,300,000,000 (excluding national and local consumption taxes, etc.) (Note 1) : ORIX Corporation : Proceeds from the issuance of new investment units through public offering, borrowings (scheduled) (Note 3) and cash on hand : 100% on delivery Notes: 1. The trust beneficial interest sale and purchase agreement for ORE Nishiki 2-chome Bldg., SO-CAL LINK OMOTESANDO, R-Styles Musashi-Kosugi and Iwatsuki Logistics Center (the Purchase and Sales Agreements ) fall under the category of Forward Commitment, etc. as provided in the Comprehensive Guideline for Supervision of Financial Instruments Business Operators, etc. set by the Financial Services Agency as they are postdated Purchase and 2/31

3 Sale agreements where the settlement and delivery of the properties are to take place one month or more after the conclusion of agreement and such. Financial Impact on OJR in the Event that it Fails to Fulfill the Forward Commitment, Etc. In this regard, the Purchase and Sales Agreement has cancellation provisions that set forth the following conditions. i. When either the seller or the buyer breaches the provisions of the Purchase and Sales Agreement (such a party referred to as the Breaching Party ), the counterparty shall set a certain period and demand the Breaching Party to meet its obligations within the period. If the Breaching Party fails to correct its violations within that period, the counterparty shall be able to cancel the Purchase and Sales Agreement. ii. When either the seller or the buyer breaches the provisions of the Purchase and Sales Agreement, the Breaching Party shall be obliged to compensate or indemnify for the resulting damages, etc. of the counterparty within the scope of an equivalent cause-and-effect relationship. iii. Except for R-Styles Musashi-Kosugi, after the conclusion of the Purchase and Sales Agreements, the seller confirms that the buyer is scheduled to acquire funds for the scheduled acquisition properties (Note 2) by issuing additional investment units (the Acquisition Funds ) and if it is the case that the Acquisition Funds for the whole purchase price cannot be reached by the scheduled acquisition date (including cases where the buyer deems the issuance of investment units is unreasonable such as due to the fluctuation of the investment unit price or where it is reasonably assumed that it will not be reached), the buyer may unconditionally terminate the Purchase and Sales Agreements. iv. Concerning R-Styles Musashi-Kosugi, if OJR cancels the Purchase and Sales Agreement due to breaches of the provisions of said agreement by a seller, in principle, the breaching seller shall indemnify the damages incurred by the other seller through the cancellation. However, if demanded by the other seller, OJR shall advance the money for the damages (limited to actual expenses) incurred by the other seller and shall claim the amount equivalent to the advanced amount against the breaching seller. 2. The scheduled acquisition properties refers to the individual property or collectively to all the properties indicated above. 3. 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. Besides, the details of the borrowings shall be announced at a later date, as soon as it is determined. 4. As of today, no trust has been established for ORE Ikebukuro, Friend Town Fukaebashi (Land) and R-Styles Musashi-Kosugi. OJR plans to establish trusts for these assets upon their acquisitions. Reference: Overview Profitability etc. of the Scheduled Acquisition Properties Property Type Area (Note 1) Seller (Note 2) Scheduled acquisition yen Appraisal yen (1/2) vs. Appraisal Value (%) NOI Yeild (Note 3) (%) Yeild after Depreciation (Note 4) (%) ORE Nishiki 2-chome Bldg. Office Other Areas (Nagoya-shi) Sponsor (Development) 10,900 11, ORE Ikebukuro Retail Facility (Urban Type) (Note 5) Remaining Tokyo Wards Sponsor (Development) 6,410 6, SO-CAL LINK OMOTESANDO Retail Facility (Urban Type) (Note 5) 6 Central Tokyo Wards Sponsor (Development) 2,300 2, Friend Town Fukaebashi (Land) Retail Facility (NSC) (Note 5) Other Areas (Osaka-shi) Sponsor (Development) 2,400 2, R-Styles Musashi-Kosugi (Note 6) Iwatsuki Logistics Center Residential Property Logistic Facility Other Parts of the Greater Tokyo Area Other Parts of the Greater Tokyo Area Sponsor (Development) Sponsor (Development) 4,433 4, ,300 6, Total 32,743 33, (Note 7) Existing Portfolio /31

4 Notes: 1. 6 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. 2. As to the Seller column, Sponsor (development) is indicated for the acquired properties that were planned, developed and attracted by the ORIX Group among the properties which OJR acquired from the ORIX Group. ORIX Group refers to ORIX Corporation and its group companies. 3. The "NOI Yield of scheduled acquisition properties 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. 4. The " Yield after Depreciation of scheduled acquisition properties 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. 5. Under the retail facility categories, urban-type refers to retail facilities located near major train stations in the Greater Tokyo Area and in government ordinance designated cities from which growth in profitability can be expected. OJR defines the Greater Tokyo Area as Tokyo, Kanagawa, Saitama and Chiba prefectures. NSC stands for neighborhood shopping centers which are shopping centers that target small trade zones such as nearby residential areas, have a drugstore, home center and such as tenants, and a supermarket, etc. as the anchor tenant. 6. The sellers are ORIX Life Insurance Corporation, which belongs to the ORIX Group, and House Mate Partners Co., Ltd., which does not belong to the ORIX Group. Since ORIX Life Insurance Corporation holds a 97/100 co-ownership interest of the scheduled acquisition property and a 97/100 quasi co-ownership of the land leasehold, the seller is indicated as Sponsor. 7. Existing portfolio is the total of properties owned as of February 28, 2014 and nine properties SHIBUYA PINE Bldg., MG Ichigaya Building, JouLe SHIBUYA, intervillage OH! MAGARI, Valor Suzuka Shopping Center, The Kitahama PLAZA, West Park Tower IKEBUKURO, myatria Higashijujo and SENDAI HARVEST BLDG acquired after March 1, NOI Yield and Yield after Depreciation of existing portfolio are calculated based on the annualized actual figures for properties owned as of February 28, 2014 and the figures for the nine properties after March 1, 2014 are calculated based on the appraisal reports at the acquisition time. 2. Purpose of the Acquisition and Lease The current economic environment surrounding OJR is considered to be in the economic recovery phase period moving toward inflation with further economic boost expected from the Abenomics economic growth strategies and expansion of various investment activities and consumption brought on by Tokyo s successful bid to host the Olympic Games and such. However the degree and timing of inflation in the period moving toward inflation is thought to be difficult to forecast. In order to flexibly respond to such changes in the environment, OJR promotes the following growth strategies from the perspective of aiming for stable growth of unitholders value by improving the portfolio s profitability and stability. 1) Utilize strengths as a diversified portfolio REIT and implement carefully selective investment in properties regardless of asset type by foreseeing environment changes (Note 1) 2) Manage risks of investment properties by utilizing the ORIX Synergy 3) While considering NAV per unit, acquire portfolio of properties with cap rates exceeding that of the existing portfolio which can contribute to the increase of DPU Through carefully selective investment from ORIX Group pipelines based on the above growth strategies, OJR decided to acquire a portfolio of a total of six properties; one office property, two urban-type retail facilities, one neighborhood shopping center, one residential property and one logistics facility. Since all the properties are developed by the ORIX Group, further utilization of the ORIX Group s expertise, nationwide network (ORIX Synergy), direct PM (Note 2), etc. will be possible. Therefore, stable growth can be expected through the combination of growth potential, profitability, stability, etc. of each property by taking advantage of the strengths as a diversified portfolio REIT. OJR will continuously strive to increase the portfolio s profitability and stability, even in a market environment of intensifying competition for acquisitions, with the aim of realizing stable growth in unitholders value going forward. OJR judges that the lessees of the properties to be acquired satisfy the criteria for the selection of tenants set (Note 3) by OAM. 4/31

5 Notes: 1. The ORIX Synergy refers to the cooperative relationship between ORIX Group companies and OJR. 2. Direct PM is the support of property management operations by OAM, through leasing activities, adding of value to properties and other means while utilizing the ORIX synergy. 3. OAM confirms credit information, etc. of tenant prospects. When the tenant is a company, its financial performance, credit reporting, etc. are investigated utilizing the databases, etc. of outside research organizations. If no special concerns are believed to exist, economic conditions such as rent, lease agreement period, deposit as well as tenant s business category, competitiveness/uniformity with other tenants in the relevant property, requested space size or form and other matters are comprehensively discussed before deciding whether to allow its tenancy. 5/31

6 3.Summary of Acquisition Properties (1) ORE Nishiki 2-chome Bldg. Specified asset category Real estate trust beneficial interest Trustee Sumitomo Mitsui Trust Bank, Limited. Term of trust agreement October 1, 2014 September 30, 2024 Address Land Building Previous owner 4-15, Nishiki 2-chome, Naka-ku, Nagoya-shi, Aichi Registered Area 2, m 2 Type of ownership Registered usage Registered completion date Fee simple ownership Office, Retail August, 2012 Type of ownership Fee simple ownership Registered Area 19, m 2 Registered construction Scheduled acquisition price Steel-framed with flat roof, 13 floors ORIX Corporation Appraised value 11,100,000,000 Appraisal date August 1, 2014 Appraiser Scheduled acquisition date October 1, 2014 Public transit access Usage restrictions Architect Structural engineer General contractor Building inspection agency Property Manager (scheduled) Main facilities and specifications Earthquake resistance Collateral Special notes Special features of the property 10,900,000,000 (excluding national and local consumption taxes, etc.) DAIWA REAL ESTATE APPRAISAL CO.,LTD. Approx. 3-minute walk from Marunouchi Station on Nagoya municipal subway Commercial zone Obayashi Corporation First-Class Architect Office Obayashi Corporation First-Class Architect Office Obayashi Corporation Bureau Veritas Japan Co., Ltd. ORIX Corporation Elevator: 7 Parking: 110 vehicles (mechanical parking system:104, ground space:6) Leased area (Standard floor area): Approx. 1,246 m 2 (roughly 377 tsubo) Ceiling height Standard floor area: 2,800 mm, Raised floors for computer wiring:100 mm Others: Individually controlled air conditioning PML: 12% (based on Sompo Japan Nipponkoa Risk Management, Inc. (Note 1) report) None None The property is a relatively new large-scale office building developed by the ORIX Group located in the Fushimi area, which is Nagoya s leading business district, with its concentration of financial institutions and major corporations. Situated about a 3-minute walk from Marunouchi Station on the Nagoya Municipal Subway, with Fushimi Station, Sakae Station, Hisaya-odori Station on the subway as well as Sakae Station on the Meitetsu Seto Line in a walking distance, the property provides excellent transportation convenience. While having ample standard floor area of approximately 370 tsubo, it can offer a highly flexible layout with a regular shape floor 6/31

7 No. of tenants 27 (as of June 30, 2014) Gross rental income dividable into a maximum of 8 sections, individually controlled (20 separate areas) air conditioning on each floor, grid system ceiling and such. Thus the property is capable of responding to various tenant needs. The property is highly competitive since it has high specifications including 7 elevators, 2,800 mm-high ceiling, 100 mm-raised OA floors, large parking tower for 110 cars, car sharing, carriage porch, etc. As for environmental consideration, it has obtained the A rank in CASBEE (Note2) Nagoya and boasts high energy-saving performance through introduction of BEMS (Note 3), Low-E glass (Note 4) and such. It houses 27 tenants such as a major cosmetic company, local leading tax accountant corporation group and insurance company. The shop space on the first floor is currently used as a showroom for high-end foreign cars. 60 million per month (excluding car parking space etc., as of June 30, (Note 5) 2014) (Note 5) Security deposits 526million (as of June 30, 2014) Total rent space 14, m 2 (as of June 30, 2014) Total rentable space 15, m 2 (as of June 30, 2014) Occupancy rate 98.3% (as of June 30, 2014) (Note 5) 587 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: 95.0% 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. CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a tool for assessing and rating the environmental performance of buildings and built environment. In addition to evaluating environmental considerations such as using materials and equipment which contribute to energy-saving and reduced environmental burden, it makes comprehensive assessment of building quality including indoor comfort and consideration to the landscape. The assessment results are ranked in 5 levels from S (excellent), A (very good), B+ (good), B- (not very good) and C (poor). 3. BEMS is an abbreviation for Building Energy Management System and refers to a building management system, which aims to reduce energy consumption by managing the operations of building equipment, facilities, etc. 4. Low-E glass is an abbreviation for Low Emissivity glass and refers to double-layered glass with special metallic film attached on the internal sides. It has higher heat insulating performance compared to conventional double layered glass as the metallic film achieves conduction of radiant heat. 5. Figures are rounded down to the nearest million yen. 7/31

8 Photo and map 8/31

9 (2) ORE Ikebukuro (Note 1) Specified asset category Real estate trust beneficial interest (scheduled) Trustee (scheduled) Term of trust agreement (scheduled) Address Land Building Mitsubishi UFJ Trust and Banking Corporation September 30, 2014 September 30, , Higashi Ikebukuro 1-chome, Toshima-ku, Tokyo Registered Area m 2 Type of ownership Registered usage Registered completion date Fee simple ownership Office, Parking August, 2010 Type of ownership Fee simple ownership Registered Area 5, m 2 Registered construction Steel-frame, Steel-frame reinforced concrete, reinforced concrete with flat roof, 12 floors with 2 underground floors Previous owner Tokutei Mokuteki Kaisha Joint Ark 14 Scheduled acquisition price Appraised value 6,460,000,000 Appraisal date August 1, 2014 Appraiser 6,410,000,000 (excluding national and local consumption taxes, etc.) Japan Real Estate Institute Scheduled acquisition date September 30, 2014 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 property Approx. 3-minute walk from Ikebukuro Station on JR Yamanote, Saikyo and Shonan-Shinjuku Line Approx. 3-minute walk from Ikebukuro Station on Tokyo Metro Marunouchi, Yurakucho and Fukutoshin Line Approx. 3-minute walk from Ikebukuro Station on Seibu Ikebukuro Line Approx. 3-minute walk from Ikebukuro Station on Tobu Tojo Line Commercial zone Taisei Corporation First-Class Architect Office Taisei Corporation First-Class Architect Office Taisei Corporation Tokyo Metropolitan Center for Fire Prevention, Architecture, and Town Planning ORIX Corporation Elevator: 4 Parking: 18 vehicles (mechanical parking system:15, ground space:3) PML: 7% (based on Sompo Japan Nipponkoa Risk Management, Inc. (Note 2) report) None None It is a relatively new urban-type retail facility developed by the ORIX Group standing in the commercial district at the east exit of Ikebukuro Station, which is a leading downtown area in Tokyo. Large retail facilities including fast fashion stores, amusement facilities, major interior goods stores and home appliances mass retailers are concentrated in the commercial district stretching from the east exit of Ikebukuro Station, one of the largest terminal stations in the Greater Tokyo Area, to Sunshine City. Customers from various areas such as the western and northern areas of the 23 wards of Tokyo and Saitama, which are connected by Tobu Tojo 9/31

10 No. of tenants 1 (as of June 30, 2014) Gross rental income Line, Seibu Ikebukuro Line and JR Saikyo Line, can be expected. Since the property stands facing the corner of Sunshine-dori, it is highly visible and very competitive in terms of customer attraction. Future development can be expected in the area due to a large development project of Toshima ward s government buildings, etc. being planned. A large retail facility is scheduled to open as early as this fall in the area, possibly bringing more customers to the area going forward. The property is occupied by the food business (cafés and izakayas), retail business (100 yen shop) and an amusement facility (karaoke shop) targeting a broad customer base of students, office workers, housewives, etc. This composition is likely to generate synergistic effects among the tenants as well as the surrounding retail facilities. (Note 3) 24 million per month (excluding car parking space etc., as of June 30, (Note 4) 2014) (Note 4) Security deposits 196 million (as of June 30, 2014) Total rent space 3, m 2 (as of June 30, 2014) Total rentable space 4, m 2 (as of June 30, 2014) Occupancy rate 92.0% (as of June 30, 2014) (Note 4) 296 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: 97.6% 2) Taxes: Taxes are calculated on the standard tax amount for fiscal Notes: 1. As of today, no trust has been established for ORE Ikebukuro. OJR plans to establish trust for it upon its acquisition. 2. 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. 3. A pass through-type master lease agreement has currently been concluded with ORIX Corporation, and ORIX Corporation has concluded lease agreements with 12 tenants. 4. Figures are rounded down to the nearest million yen. 10/31

11 Photo and map 11/31

12 (3) SO-CAL LINK OMOTESANDO Specified asset category Real estate trust beneficial interest Trustee Mizuho Trust & Banking Co., Ltd. Term of trust agreement April 27, 2007 October 1, 2024 Address Land Building Previous owner 9-8, Jingumae 4-chome, Shibuya-ku, Tokyo Registered Area m 2 Type of ownership Registered usage Registered completion date Fee simple ownership Retail April, 2014 Type of ownership Fee simple ownership Registered Area m 2 Registered construction Scheduled acquisition price Steel-framed with roofing, single floor ORIX Corporation Appraised value 2,420,000,000 Appraisal date August 1, 2014 Appraiser 2,300,000,000 (excluding national and local consumption taxes, etc.) Japan Real Estate Institute Scheduled acquisition date October 1, 2014 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 property Approx. 3-minute walk from Omote-sando Station on the Tokyo Metro Chiyoda Line and Hanzomon Line Category 1 exclusive districts for medium and high residential buildings Asai Ken Architectural Research Inc. Asai Ken Architectural Research Inc. SKcreed co., Ltd. JAPAN ERI CO.,LTD. ORIX Corporation None PML: 6% (based on Sompo Japan Nipponkoa Risk Management, Inc. (Note 1) report) None The boundary with the adjacent land on the southwestern side (lot number: ) has not yet been finalized. It is a newly constructed urban-type retail facility co-developed by the ORIX Group and the tenant, and is about a 3-minute walk from Omotesando Station on the Tokyo Metro Line. It is visible from Haranihon-Dori street connecting Omotesando and Gaien-Nishi-Dori street that many shoppers use. The Omotesando area is concentrated with domestic and foreign brand shops including a popular grocery store from Northern Europe near the property. The area, therefore, collects trend-sensitive people and many tourists from Japan and abroad, boasting excellent branding effects as a trendsetting city. With its characteristic gable roof and wide opening, it has excellent visibility and customer-attracting capability. It is a single floor building with an open feeling, and its wall-free indoor structure enables flexible store layouts. The tenant is Planet Blue Japan CO., LTD., a subsidiary of major 12/31

13 (Note 2) No. of tenants 1 (as of June 30, 2014) Gross rental income apparel company TSI HOLDINGS CO., LTD. (listed on TSE 1st section), which operates a select shop. In addition to a lifestyle shop operated by the above company offering fashion and novelty goods from the U.S. west coast, the property is occupied by a natural cosmetic store and an organic coffee shop. *Not disclosed as consent has not been obtained from the tenant. Security deposits *Not disclosed as consent has not been obtained from the tenant. Total rent space m 2 (as of June 30, 2014) Total rentable space m 2 (as of June 30, 2014) Occupancy rate 100.0% (as of June 30, 2014) (Note 3) 98 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: 100.0% 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. The trustee has currently concluded a pass through-type master lease agreement with ORIX Corporation, and upon acquisition the trustee will conclude directly with tenants. 3. Figures are rounded down to the nearest million yen. 13/31

14 Photo and map 14/31

15 (4) Friend Town Fukaebashi (Land) (Note 1) Specified asset category Real estate trust beneficial interest (scheduled) Trustee (scheduled) Term of trust agreement (scheduled) Address Land Previous owner Mitsubishi UFJ Trust and Banking Corporation September 30, 2014 September 30, and other, Nagata 3-chome, Joto-ku, Osaka-shi, Osaka Registered Area 9, m 2 Type of ownership Scheduled acquisition price Fee simple ownership ORIX Real Estate Corporation Appraised value 2,500,000,000 Appraisal date August 1, 2014 Appraiser Scheduled acquisition date September 30, 2014 Public transit access Usage restrictions Scheduled Property Manager Collateral Special notes Special features of the property 2,400,000,000 (excluding national and local consumption taxes, etc.) DAIWA REAL ESTATE APPRAISAL CO.,LTD. Approx. 9-minute walk from Fukaebashi Station on Osaka municipal subway line Secondary-industrial zone ORIX Corporation None No. of tenants 1 (as of June 30, 2014) The notarial deed of the fixed-term lease right establishment agreement for business purposes between the previous owner and the lessee of the property dated April 16, 2014 requires the owner, when wishing to transfer the property, to grant the lessee with a preferential negotiation right on the acquisition of the property. This obligation will be succeeded to the trustee of the property. It is a neighborhood shopping center (NSC) co-developed and opened by the ORIX Group and the tenant in April, 2014 and is about a 9-minute walk from Fukaebashi Station on Osaka Municipal Subway Chuo Line. Joto ward is the area where population concentration has been progressing the most in Osaka City. The trade area population is dense, with a population of about 12,000 within 0.5km, about 51,000 within 1km and about 433,000 within 3km. The surrounding area is experiencing a population increase due to the inflow of new families brought by condominium developments and such. Stable operation of the facility by the tenant can be expected going forward. With parking space for 284 cars and good access due to roads on all four sides, it can be convenient for daily use with cars. The tenant, Heiwado Co., Ltd., is a leading company in the industry which operates food supermarkets centering on the Kansai area. Co-development was realized based on the long business relationship with the ORIX Group, and a favorable tenant relationship is expected to continue going forward. In addition to the food supermarket, a total of 25 tenants, mainly specialty stores targeting a broad age range of customers such as a daily clothes store, drug store, 100 yen shop and shoes mass retailer, are housed. A fixed-term lease right establishment agreement for business purposes has been concluded for a long contract term allowing expectations for stable revenues. 15/31

16 Gross rental income Security deposits *Not disclosed as consent has not been obtained from the tenant. *Not disclosed as consent has not been obtained from the tenant. Total rent space 9, m 2 (as of June 30, 2014) Total rentable space 9, m 2 (as of June 30, 2014) Occupancy rate 100.0% (as of June 30, 2014) (Note 3) 121 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: 100.0% 2) Taxes: Taxes are calculated on the standard tax amount for fiscal Notes: 1. As of today, no trust has been established for Friend Town Fukaebashi (Land). OJR plans to establish trusts for it upon its acquisition. 2. The building address recorded in the registry is indicated as there is no residence indication. 3. Figures are rounded down to the nearest million yen. 16/31

17 Photo and map 17/31

18 (5) R-Styles Musashi-Kosugi (Note 1) Specified asset category Real estate trust beneficial interest (scheduled) Trustee(scheduled) Term of trust agreement (scheduled) Sumitomo Mitsui Trust Bank, Limited. October 1, 2014 September 30, ) (West) 135-1, Nakamarukoaza-nakamachi, Nakahara-ku, Address (Note 2) Kawasaki-shi, Kanagawa 2) (East) and other, Nakamarukoaza-shinjukukochi, Nakahara-ku, Kawasaki-shi, Kanagawa Registered Area 8,493.17m 2 Land Type of ownership Fixed-term leasehold Building Previous owner Registered usage Registered completion date Type of ownership Registered Area Registered construction Scheduled acquisition price Apartment complex 1,2)September, 2006 Fee simple ownership 1) 9, m 2 2) 7, m 2 Appraised value 4,580,000,000 Appraisal date August 1, 2014 Appraiser 1,2)Reinforced concrete with flat roof, 12 floors ORIX Life Insurance Corporation (97% of quasi co-ownership) Housemate Partners Co., Ltd. (3% of quasi co-ownership) 4,433,000,000 (excluding national and local consumption taxes, etc.) Japan Real Estate Institute Scheduled acquisition date October 1, 2014 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 property Approx. 5-minute walk from Musashikosugi Station on JR Yokosuka Line Approx. 8-minute walk from Musashikosugi Station on JR Nanbu Line Approx. 7-minute walk from Musashikosugi Station on Tokyu Toyoko Line Industrial zone Institute of New Architecture Kazuka Kikaku Co., Ltd. Taisei Corporation Center for Better Living House Mate Partners Co., Ltd. 1) Elevator: 2 Parking: 91 vehicles (mechanical parking system:83, ground space:8) 2) Elevator: 2 Parking: 69 vehicles (mechanical parking system:50, ground space:19) PML: 4% (based on Sompo Japan Nipponkoa Risk Management, Inc. (Note 3) report) None The property is a building with fixed-term land leasehold (land leasehold details: establishment on April 28, 2005; for building ownership for rental residence operation; period of duration until April 27, 2075). It is a rental apartment developed by the ORIX Group and is about a 5-minute walk from Musashi-kosugi Station on the JR Line and 18/31

19 (Note 4) No. of tenants 1 (as of June 30, 2014) about a 7-minute walk from Musashi-kosugi Station on the Tokyu Toyoko Line. Musashi-kosugi is an area which has been rapidly gaining popularity in rankings of want-to-live-in towns. The area is recognized for its transportation convenience allowing direct access to major terminal stations in central Tokyo and Kanagawa Prefecture as well as offering multiple line choice. The area can expect further development as a residential area with improving evaluation for its daily convenience driven by successive openings of retail facilities such as Tokyu Square and LaLa Terrace over the past few years in addition to a scheduled opening of a large flagship store of the Seven & i Group this fall. It is an apartment building with a total of 261 units (total of two buildings, east and west) mainly of 1LDK to 3LDK(56 m2 to 78 m2 )for families and DINKS. It boasts high specifications such as floor heating and concierge service. Demand for residence in the Musashikosugi area is strong, and supply centers on for-sale condominiums. Therefore, rental apartments with high specifications such as this property are rare and valued. The agreement to establish an ordinary fixed-term lease has been concluded with Urban Renaissance Agency (UR) for the remaining period of approximately 60 years. Gross rental income 47 million per month ( as of June 30, 2014) Security deposits 94million (as of June 30, 2014) (Note 5) Total rent space 15, m 2 (as of June 30, 2014) Total rentable space 15, m 2 (as of June 30, 2014) Occupancy rate 94.4% (as of June 30, 2014) (Note 5) (Note 5) 276 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: 95.0% 2) Taxes: Taxes are calculated on the standard tax amount for fiscal Notes: 1. As of today, no trust has been established for the property. OJR plans to establish trust for it upon acquiring it. 2. The building address recorded in the registry is indicated as there is no residence indication. 3. 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. 4. A pass through-type master lease agreement has currently been concluded between ORIX Life Insurance Corporation and Housemate Partners Co., Ltd. 5. Figures are rounded down to the nearest million yen. 19/31

20 Photo and map 20/31

21 (6) Iwatsuki Logistics Center Specified asset category Trustee Real estate trust beneficial interest Sumitomo Mitsui Trust Bank, Limited. Term of trust agreement June 25, 2014 September 30, 2024 (Note 1) Address and other, Giranuma, Mashito, Kasukabe-Shi, Saitama Land Building Previous owner Registered Area 20, m Type of ownership Registered usage Registered completion date 2 (Note 2) Fee simple ownership (2, m 2 of which is common area (hereinafter the common area ), co-ownership ratio of the common area is 52.5%) Warehouse April, 2013 Type of ownership Fee simple ownership Registered Area 28, m 2 Registered construction Scheduled acquisition price Steel-framed, alloy-coated steel plate roof, 4 floors ORIX Corporation Appraised value 6,520,000,000 Appraisal date August 1, 2014 Appraiser 6,300,000,000 (excluding national and local consumption taxes, etc.) Japan Real Estate Institute Scheduled acquisition date October 1, 2014 Public transit access Usage restrictions Architect Structural engineer General contractor Building inspection agency Property Manager (scheduled) Main facilities and specifications Earthquake resistance Collateral Special notes Approx. 1.4 km from Toyoharu Station on Tobu Noda Line Approx. 4.5 km from Iwatsuki IC, Tohoku Expressway None (Urbanization control area) Asai Ken Architectural Research Inc. Asai Ken Architectural Research Inc. Kumagai Gumi Co., Ltd. The Building Center of Japan CBRE K.K. Elevator: 6 (for freight : 4, for passenger : 2) Parking: 122 vehicles PML: 8% (based on Sompo Japan Nipponkoa Risk Management, Inc. (Note 3) report) None Easement has been established for part of the land for Tokyo Electric Power Company Incorporated (TEPCO) for the purpose of erection of a transmission line, and the registration has been completed. For the common area, pursuant to the memorandum concluded between the previous owner and other co-owners on August 30, 2012, 1) when transferring co-ownership of the common area separately from the solely owned portion of the land of the property (solely owned portion), permission from other co-owners must be obtained, 2) divided claim for co-ownership is prohibited, 3) when transferring the ownership of the solely owned portion, the intent for purchase of the entire land of the property must be confirmed with other co-owners. This obligation has been succeeded to the trustee of the property. For a part of the solely owned portion, access rights for the purpose of allowing cars in the common area of other co-owners has been 21/31

22 Special features of the property No. of tenants 2 (as of June 30, 2014) Gross rental income Security deposits established in accordance with the aforementioned memorandum. The property is located 4.5km from the Tohoku Expressway Iwatsuki IC along National Route 16 within 35km from central Tokyo. It is a rare location with excellent access to all areas in the Greater Tokyo Area, the northern Kanto region and the Tohoku region. It stands in a walking distance from Toyoharu Station on the Tobu Noda Line and this is a positive factor for securing workers. It is also an area where around-the-clock operation is possible. Further improvement in convenience as a logistics base can be expected due to the opening of the Metropolitan Inter-City Expressway (Kenodo Expressway) scheduled in the future. It is a relatively new large logistics facility developed by the ORIX Group with 4 floors above ground. There is a truck berth on the 1st and 2nd floors and direct access to the 2nd floor is possible using a slope. It is highly versatile with floor loading of 1.5t/ m2, effective ceiling height of 5.5m, column spacing of 10.0m and road wide of about 13m or more and 4 freight elevators, as well as allowing additional installment of elevators and vertical conveyors. Emergency power generators are equipped, allowing elevator operations and use of lighting for about 27-consecutive hours even in an emergency. Therefore stalled logistics functions can be averted. Lease agreements have been concluded with two major logistics companies for medium to long term, thus stable cash flow can be expected. *Not disclosed as consent has not been obtained from the tenant. *Not disclosed as consent has not been obtained from the tenant. Total rent space 28,048.04m 2 (as of June 30, 2014) Total rentable space 28,048.04m 2 (as of June 30, 2014) Occupancy rate 100.0% (as of June 30, 2014) (Note 4) 340 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: 100.0% 2) Taxes: Taxes are calculated on the standard tax amount for fiscal Notes: 1. The building address recorded in the registry is indicated as there is no residence indication. 2. Actual area of the land of the property is 17, m2 of sole owned area 18, m2 of the total registered land area 20, m2. OJR plans to re-register the land area of the property after its acquisition. As a result of this re-registration, the land area on the registry will decrease. 3. 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. 4. Figures are rounded down to the nearest million yen. 22/31

23 Photo and map 23/31

24 4. Profile of Owner/Seller (as of August 12, 2014) (1) ORE Nishiki 2-chome Bldg., (3) SO-CAL LINK OMOTESANDO and (6) Iwatsuki Logistics Center Company name ORIX Corporation ( the Company ) Address 4-1, Hamamatsu-cho 2-chome, Minato-ku, Tokyo Representative President and CEO: Makoto Inoue Primary business Lease, installment sales and other financial services, real estate-related businesses, etc. Shareholders equity 220,051 million Major shareholders Japan Trustee Services Bank, Ltd. (trust account) Net Assets (As of March 31, 2014) 2,095,178 million Total Assets (As of March 31, 2014) 9,069,392 million Date of establishment March 28, 1950 Relationships with OJR or its asset management company Capital relationship Personal relationships There is no capital relationship required for reporting between OJR and the Company. However, the Company is the parent company of OAM and falls under related parties of OAM as stipulated in the Act on Investment Trusts and Investment Corporations (the Investment Trusts Act ). As of August 31, 2014, 55 persons of the officers and employees of OAM are seconded from 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. As mentioned above, the Company falls under the related parties of OAM as stipulated in the Investment Trusts Act. (2) ORE Ikebukuro Company name Tokutei Mokuteki Kaisha Joint Ark 14 ( the Company ) c/o Tokyo Kyodo Accounting Office Address 1-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo Representative Director: Masato Kaida Businesses related to receiving, management and disposition of specified Primary business assets pursuant to the asset securitization plans based on the Act on Securitization of Assets Shareholders equity 100,000 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 August 18, 2008 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 preferred equity investments in the Company. Personal relationships There is no personal relationship required for reporting between OJR or OAM and the Company. Business relationships There is no business relationship required for reporting between OJR or OAM and the Company. 24/31