Notice concerning Acquisition of Asset (shinyon curumu)

Transcription

1 This translation of the original Japanese notice is provided solely for information purposes. Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail. REIT Issuer: Daiwa Office Investment Corporation (Stock Code No.: 8976) Representative: Nobuaki Omura, Executive Director November 27, 2012 Asset Manager: Daiwa Real Estate Asset Management Co., Ltd. Representative: Akira Yamanouchi, President and Representative Director Inquiries to: Yuji Shinotsuka, Vice President and Representative Director (Tel: ) Notice concerning Acquisition of Asset (shinyon curumu) We hereby announce that today Daiwa Office Investment Corporation (the Investment Corporation ) determined to acquire a trust beneficial interest in real estate (the Acquisition ) on November 27, 2012 as follows. 1. Summary of Assets to be purchased Type of Assets Property Name Location Acquisition Price Date of Execution of Purchase Agreement Trust beneficial interest in real estate shinyon curumu (the Property ) Shinjuku Shinjuku-ku, Tokyo 9,650 million yen (Excluding acquisition costs, consumption tax, etc.) November 27, Summary of Seller and Date of Delivery No. 1 2 Seller Non-disclosure (Seller A) (Note:3) Non-disclosure (Seller B) (Note:3) Asset Type (Ownership Type) Trust beneficial interest (Compartmentalized ownership) Trust beneficial interest (Compartmentalized ownership) Ratio (Note:1) 359,323/ 685, ,172/ 685,495 Each Acquisition Price (Note:2) 5,090 million yen 4,560 million yen Date of Delivery (scheduled) December 3, 2012 April 12, 2013 Funding for Acquisition Allocation of loans (Note 4) Allocation of loans Payment Method Lump-sum payment at the time of delivery Lump-sum payment at the time of delivery (Note:5) (Note:1) The Property is made up of two compartmentalized ownerships. The Investment Corporation conclude the purchasing contract with each owner of compartmentalized ownership. Totally the Investment Corporation will wholly own the Property. (Note:2) The Investment Corporation, Seller A and Seller B conclude the three-way contract that if either Seller A or Seller B breaks the purchasing contract with the Investment Corporation, the Investment Corporation will revise the acquisition price with the other. (Note:3) Both Seller A and Seller B are domestic industrial companies. Both names are not disclosed by their requests. (Note:4) Please refer to the press release Notice concerning Borrowing of Funds announced on November 27,

2 2012. The funding for acquisition to purchase the compartmentalized ownership of Seller B will be borrowed in time with the date of delivery of Seller B. (Note:5) The Investment Corporation will pay 300 million yen for the deposit to Seller B at the conclusion of the contract. Appropriate measure of protection will be adopted for the deposit. 3. Reason for Acquisition We believe that the Property is appropriate to the basic policy for the asset management set forth in the Articles of Incorporation of the Investment Corporation and the management policy of the Investment Corporation. We decided to acquire the Property because we appreciate the rarity and the profitability of the Property. (1) Location of the Property: The Property is located within about a 4-minute walk from the new south exit of the JR Shinjuku Station and the second basement of the Property is directly connected to the access way of the Shinjuku 3-chome Station on Tokyo Metro Marunouchi Line and Fuku-toshin Line. The number of commuters at JR Shinjuku Station makes the busiest station in Japan. Both shopping and business areas are ample around the Property. Major lines of JR and subway extends to the area of the Property which provides convenient and easy access to major cities in Tokyo as well as other major cities in Japan. In the south exit area, the development of the station building to be opened in the spring of 2016 and infrastructure development are proceeding which places this area to be the center of the evolving city. The Property is located in the commercial zone centering on Takashimaya Times Square and office zone neighboring the commercial zone. Therefore, the Investment Corporation believes that the Property is located in the competitive area of both office and commercial needs. (2) Building Facilities: The Property is provided with 11 stories above ground and 2 below, the total floor area of 9, m2 (2, tsubo), m2 ( tsubo) of standard floor space, 2,700mm of ceiling height for a standard floor (100mm of OA floor) and sufficient spec such as individual air-conditioning and latest crime-prevention system on each floor. Since the Property is a newly-built property, it can be assumed of its competitiveness compared to other similar sized buildings around the Property. 4. Details of the Property to be purchased Property Name Type of Specified Assets Trustee (scheduled) Trust Period Location (Lot Number) Use shinyon curumu Trust beneficial interest in real estate Mitsubishi UFJ Trust and Banking Corporation Seller A: From December 3, 2012 to December 2, 2022 Seller B: From April 12, 2013 to April 11, Shinjuku Shinjuku-ku, Tokyo Office, Store (Description in the register book)

3 Site Area Total Floor Area Structure Construction Date Ownership Form Purchase Price Structural-design Engineer 1, m2 (officially registered) 9, m2 (officially registered) Steel construction / Reinforced concrete with 11 stories above ground and 2 below (Description in the register book) January 25, 2012 (Description in the register book) (i) Land: Ownership (ii) Building: Compartmentalized Ownership (100%) 9,650million yen (excluding acquisition costs and consumption tax, etc.) Ace Consulting Tokyo LTD. Constructor Asanuma Corporation Floor Height/Ceiling Height 4,000mm (for standard floor) / 2,700mm (for standard floor) Air-conditioning System/OA Laying Individual air-conditioning for each floor / OA-capable floor Building certification agency Shinjuku-ku Building Condition Research Management Company TOKIO MARINE & NICHIDO RISK CONSULTING Co., Ltd. Land Pollution Research Management Company Earth-Appraisal Co., Ltd. PML Level (Management Company) 6.50% (NKSJ Risk Management, Inc.) Appraisal Value (Appraisal Date) 10,000million yen (as of October 31, 2012) Appraiser DAIWA REAL ESTATE APPRAISAL CO., LTD Collateral None Acquisition date Acquisition date from seller A : December 3, 2012 Acquisition date from seller B : April 12, 2013 Summary of Tenants Total Number of Tenants 6 (Note 1) Rent Revenue Not disclosed (Note 2) Security Deposit and Guaranty Not disclosed (Note 2) Total Leased Floor Space 3, m2 (Note 1) Total Leasable Floor Space 6, m2 (Note 3) Trend in occupancy rates the last 5 years November 30,, November 30,, November 30, (Note 3) November 30, Scheduled delivery date 51.9% (Note 1) Expected NOI (NOI Yield) 411 million yen (4.3%) (Note 4) Other Relevant Information 1. Although arsenic have been detected to exceed the specified standard level from a part of the land of the Property, Earth-Appraisal Co., Ltd has provided an opinion that arsenic pollution would not spread to the surrounding area and direct ingestion thereof would not affect human health, and that there is no problem with the continuous use

4 of the Property in as-is condition. 2. The investment Corporation will conclude a leasing agreement for some floors on the same day as the date of Execution of Purchase Agreement (the Sublease Agreement ).(Note5) (Note 1) Expected figure for the whole building at scheduled delivery date from Seller A. The figure in the Sublease Agreement described in Other Relevant Information is also included. (Note 2) The figure is not disclosed because of the related persons requests. (Note 3) The above-mentioned figures are based on the data from the Sellers (Note 4) The above-mentioned figures are the expected annual amounts based on leasing agreements as of the scheduled delivery date and taking into account of taxes imposed, and calculated on the assumption that the expected occupancy rate is 96.0%. (These figures are not official forecasts.) (Note 5) The information for the Sublease Agreement is not available for disclosure due to the related person s request. The person who will conclude the Sublease Agreement is not an interested party of the Investment Corporation or the Asset Manager. 5. Details of the Seller Both Seller A and Seller B are domestic industrial companies. The summary of both sellers are not disclosed by their requests. Each seller is not an interested party of the Investment Corporation or the Asset Manager. 6. Status of Owners etc. of Properties The acquisition of the trust beneficial interest is not an acquisition from any persons having a special interest in the Investment Corporation or the Asset Manager. 7. Status of Intermediary (1) Summary of Intermediary (a) Summary for the intermediary of the compartmentalized ownership from Seller A The intermediary for Seller A is a domestic corporation. The summary for the intermediary is not available for disclosure due to the intermediary s request. There is no capital relationship, personal relationship or business relationship required to be stated between the Investment Corporation/Asset Manager and the intermediary. The intermediary does not fall under the Related Persons of the Investment Corporation/Asset Manager. Also, the affiliated persons and the affiliated companies of the Intermediary do not fall under the Related Persons of the Investment Corporation/Asset Manager. This intermediary is one of co-intermediaries for the compartmentalized ownership of Seller B (b) Summary for the intermediaries of the compartmentalized ownership from Seller B The intermediaries for Seller B include two domestic corporations along with the above company. The summary for the each intermediary is not available for disclosure due to each intermediary s request. There is no capital relationship, personal relationship or business relationship required to be stated between the Investment Corporation/Asset Manager and each intermediaries. Each intermediary does not fall under the Related Persons of the Investment Corporation/Asset Manager. Also, the affiliated persons and the affiliated companies of the each Intermediary do not fall under the Related Persons of

5 the Investment Corporation/Asset Manager. (2) Breakdown and amount of intermediary commission The intermediary commission for the Acquisition is not disclosed due to the request of the intermediaries. 8. Acquisition Schedule Date of Determination of the Acquisition November 27, 2012 Date of Execution of Purchase Agreement Scheduled Payment Date Scheduled Delivery Date November 27, 2012 Scheduled payment date for the deposit to Seller B November 27, 2012 Scheduled payment date for the acquisition to Seller A December 3, 2012 Scheduled payment date for the acquisition to Seller B April 12, 2013 Scheduled delivery date from Seller A December 3, 2012 Scheduled delivery date from Seller B April 12, Impact on the Investment Corporation s Financial Standing if Forward Commitments is not Executed The beneficiary interest purchase agreement with Seller B (the Agreement with Seller B ) falls under the forward commitments made by investment corporations determined by The Financial Services Agency s Guidelines for Financial Instruments Business Supervision. For the purchase of the beneficiary interest, the delivery date of the compartmentalized ownership of Seller B is scheduled on April 12, 2013 If there is a violation in any of the provisions in the Agreement with Seller B, the Investment Corporation or the Seller B can cancel the agreement and demand amount equivalent to 10% of the purchasing price of the beneficiary interest as a penalty charge. The funding for acquisition to purchase the beneficiary interest will be borrowed in time with the date of delivery of Seller B. * Forward commitments is defined as a sale and purchase agreement binding for forward and future transactions, with respect to which the settlement and delivery take place one or more months after the signing of the date of agreement; or other similar agreements. 10. Future Outlook The impact of the Acquisition on the fiscal period ending November 2012(14th Fiscal Period) and the

6 fiscal period ending May 2013 (15th Fiscal Period) is limited. The earnings forecasts in 14th Fiscal Period and 15th Fiscal Period are unchanged. - End -

7 Reference Material 1 Summary of Appraisal Report Appraiser DAIWA REAL ESTATE APPRAISAL CO., LTD Appraisal Date October 31, 2012 Appraised Value 10,000million yen Items (million yen) (Note 1) Income Approach Value 10,000 Direct Capitalization Value 10,300 (1) Operating Revenue (a-b) 607 a. Potential Annual Rent Revenue 641 b. Amount of Loss due to Vacancy 34 (2) Operating Expenses (c+d+e+f) 161 c. Maintenance and Operation Cost (including cost of management, utility and PM fee) 87 d. Taxes and Public Charges 67 e. Non-life Insurance Premium 0 f. Other Expenses 6 (3) Net Operating Revenue 446 (4) Profit from Managing Guaranty, etc. 8 (5) Capital Expenditures 9 (6) Net Revenue ( (3)+(4)-(5)) 444 Cap Rate 4.3% Discounted Cash Flow Value 9,910 Discount Rate 4.1% Terminal Cap Rate 4.5% Integrated Value by Using Cost Method 10,200 Ratio of Land 73.7% Ratio of Building 26.3% (Note 1) The above revenue and expenses are based on the appraisal report and is not the revenue and expenses forecasted by the Investment Corporation or the Asset Manager.

8 Reference Material 2 Photograph / Map < External View >

9 < Map >

10 Reference Material 3 Portfolio Overview after Acquisition of the Property Region Five Central Wards of Tokyo (Note 1) Name of Property Date of (Scheduled) Acquisition Acquisition Price (million yen) Investment Ratio (Note 4) Daiwa Ginza 21-Oct-05 14, % Daiwa Ginza Annex 21-Oct-05 3, % Daiwa Shibaura 21-Oct-05 8, % Daiwa Minami-Aoyama 21-Oct-05 4, % Daiwa Sarugakucho (Note 5) 21-Oct-05 3, % Daiwa A Hamamatsucho 21-Oct-05 2, % Daiwa Jingumae 21-Oct-05 2, % Daiwa Shibadaimon 21-Oct-05 2, % Daiwa Misakicho 21-Oct-05 2, % Daiwa Shimbashi Oct-05 2, % BPS Square 27-Jan-06 1, % Daiwa Tsukiji 27-Jan-06 1, % Daiwa Tsukiji Mar-06 2, % Daiwa Tsukishima 24-Mar-06 7, % Nihombashi MS Bldg. 1-May-06 2, % Daiwa Azabudai 1-May-06 1, % Daiwa Shibuya SS 1-May-06 3, % Daiwa Nihombashi Honcho 31-Jul-06 7, % Daiwa Ginza 1-chome 31-Jul-06 4, % Daiwa Kyobashi 31-Jul-06 3, % Sunline Building No. 7 6-Oct-06 2, % Daiwa Onarimon 1-Dec-06 13, % Shinjuku Maynds Tower July 13 /Nov , % SHIBUYA EDGE 13-Jul-07 5, % Daiwa Kodenmacho 31-Aug-07 2, % Daiwa Jumbocho 10-Mar-10 4, % Daiwa Nishi-Shimbashi 13-Aug-10 5, % Daiwa Kudan 2-Sep-10 4, % Daiwa Kayabacho Building 25-Mar-11 5, % Jimbocho Place 29-Mar-11 3, % E SPACE TOWER 8-Jul-11 24, % Nihonbashi Hongokucho Tosei Building 11-May-12 1, % shinyon curumu 3-Dec Apr-13 9, % Total Number of Properties located in Five Central Wards of Tokyo: , % Daiwa Kinshicho 21-Oct-05 3, % Greater Daiwa Higashi-Ikebukuro 21-Oct-05 2, % Tokyo Benex S-3 1-May-06 4, % (Note 2) Daiwa Shinagawa North 13-Jul-07 7, % West Park Osaki 18-Sep-12 1, % Total Number of Properties located in Greater Tokyo: 5 20, % Regional Major Cities Daiwa Minami-Senba 31-Aug-07 4, % (Note 3)

11 Total Number of Properties located in Regional Major Cities: 1 4, % Total Number of Properties: , % (Note 1) Five Central Wards of Tokyo means Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku. (Note 2) (Note 3) Greater Tokyo means Tokyo excluding the Five Central Wards of Tokyo, Kanagawa, Chiba and Saitama Prefectures. Regional Major Cities means Osaka area (i.e., Osaka, Kyoto and Hyogo Prefectures), Nagoya area (Aichi, Mie and Gifu Prefectures), ordinance-designated cities and core cities under Local Autonomy Act. (Note 4) Figures in the Investment Ratio columns represent the percentage of the (scheduled) acquisition price of each property to the aggregate amount of the (scheduled) acquisition price, and are rounded to the nearest first decimal place. Please note that adding up of the investment ratio of the properties may not exactly match the investment ratio for each investment regions or for the overall portfolio. (Note 5) The acquisition price of Daiwa Sarugakucho was changed to 3,190 million yen on March 30, 2012 due to the acquisition of the site in Daiwa Sarugakucho of 190 million yen. * Website URL of the Investment Corporation: