Notice Concerning Acquisition of Property (Henn na Hotel Tokyo Hamamatsucho and Smile Hotel Premium Sapporo Susukino)

Transcription

1 For Translation Purposes Only For Immediate Release January 15, 2019 United Urban Investment Corporation Ikuo Yoshida Executive Officer (Securities Code: 8960) Asset Management Company: Japan REIT Advisors Co., Ltd. Norimasa Gaun President and CEO Inquiries: Kenichi Natsume Chief Financial Officer TEL: Notice Concerning Acquisition of Property (Henn na Hotel Tokyo Hamamatsucho and Smile Hotel Premium Sapporo Susukino) United Urban Investment Corporation ( United Urban ) hereby announces that Japan REIT Advisors Co., Ltd. ( JRA ), the asset management company to which United Urban entrusts asset management services, decided today to acquire properties as set forth below. 1. Overview of the Acquisition United Urban will acquire the trust beneficial interest in the following real estate properties (hereinafter individually or collectively called the Asset to be Acquired ). Property Number Type of Use (Note 1) Property Name Location Scheduled Acquisition Price (Note 2) Estimated NOI Yield (Note 3) Estimated NOI Yield After Depreciation (Note 4) Scheduled Acquisition Date C17 Hotel (hotel) Henn na Hotel Tokyo Hamamatsucho Minato-ku, Tokyo 4,456 million 4.4% 3.7% May 15, 2019 C18 Hotel (hotel) Smile Hotel Premium Sapporo Susukino Sapporo, Hokkaido 4,233 million 6.0% 5.0% June 28, 2019 Total/Average (Note 5) 8,689 million 5.2% 4.3% - (Notes) 1. Type of Use determined by United Urban is shown. As for words shown in parentheses, of the types indicated on the real estate register, the primary type is shown. 2. Scheduled Acquisition Price excludes acquisition costs, property taxes, city planning taxes and consumption taxes and other costs. 3. Estimated NOI Yield is calculated by (the Annualized Estimated NOI / the acquisition price) and expressed as a percentage rounded to first decimal place. NOI (Net Operating Income) means the figure equal to an amount subtracting rental expenses (excluding depreciation and amortization) from rental revenues. Annualized Estimated NOI means the estimated NOI for 1 year from the acquisition by United Urban, which is calculated based on the terms and conditions of leasing after the acquisition by United Urban. 4. Estimated NOI Yield After Depreciation is calculated by ((i) an amount deducting Estimated Depreciation and Amortization from Annualized Estimated NOI / (ii) the acquisition price) and is described as a percentage rounded to first decimal place. Estimated Depreciation and Amortization means the estimated depreciation and amortization for 1 year after the acquisition by United Urban, which is calculated under the straight-line method by applying the depreciation ratio to be derived for each depreciable asset of the Asset to be Acquired in accordance with the useful life thereof, based on the accounting policy of United Urban. 5. Estimated NOI Yield and Estimated Post-Depreciation Yield shown in the Average column indicates the values arrived at when the Estimated NOI Yield and Estimated Post-Depreciation Yield of each Anticipated Acquisition are weighted averaged by the scheduled 4 acquisition price of each Anticipated Acquisition and are expressed as a percentage and rounded to first decimal place. 1 / 12

2 2. Details of Acquisition A. Henn na Hotel Tokyo Hamamatsucho (1) Reasons for Acquisition In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Asset to be Acquired for the purpose of further enhancing its portfolio. In making the decision to acquire the Asset to be Acquired, the following aspects (from 1. to 3.) were highly attractive. 1. Location The Asset to be Acquired is located 2 minutes walk from Daimon Station on the Toei Oedo Line and the Asakusa Line, 3 minutes walk from Hamamatsucho Station on the JR Yamanote Line and the Keihin-Tohoku Line, and 3 minutes walk from Monorail Hamamatsucho Station on the Tokyo Monorail. Being on the JR Lines, Hamamatsucho Station near the Asset to be Acquired is the terminal station of Tokyo Monorail run to Haneda Airport. Also, Daimon Station on the Asakusa Line provides access to Haneda Airport and Narita Airport through the Keikyu Line and the Keisei Line. Therefore, the strong demand for lodging from both foreign and domestic tourists is expected in the Asset to be Acquired. There are tourist spots such as Tokyo Tower, Zojoji Temple or Hamarikyu Gardens around the Asset to be Acquired. In addition, Hamamatsucho area is one of the major office areas in Tokyo, and we can expect the steady demand by business travelers from Japanese reginal cities as well as overseas visiting their headquarters in this area. In the neighborhood of the Asset to be Acquired, large-scale redevelopment project, especially those of office, has been underway until One of the completed office buildings has received headquarters functions and expansion needs of large companies. Further increase of offices with the progress of the redevelopment project is expected to bring to lodging demand from business travelers. 2. Building, etc. The building of the Asset to be Acquired (the Building ) was completed in March 2018 and started operation as Henn na Hotel in April It has 118 rooms consisting of mainly single rooms and semi-double rooms considering the locational characteristics mentioned above. It has the robot reception corresponding in four languages (the Humanoid), and a robot concierge for information and sightseeing guidance. It is also equipped with facilities that will bring convenience and amenity for the guests including high-quality bed mattresses. 3. Tenants, etc. H.I.S. Hotel Holdings Co., Ltd. (the Hotel Operator ) operates the hotel in the Building as the 6th hotel in the Henn na Hotel series in Japan (3rd in Tokyo). The long fixed-term lease agreement (lease term: 20 years, remaining term: about 19 years) has been concluded with the Hotel Operator and stable earnings are expected over the mid to long term. (2) Summary of Acquisition 1. Asset to be Acquired : Trust beneficial interest in real estate 2. Property Name : Henn na Hotel Tokyo Hamamatsucho 3. Scheduled Acquisition Price : 4,456 million 4. Scheduled Agreement Date : January 16, 2019 (conclusion of the sale and purchase agreement of the trust beneficial interest) 5. Scheduled Acquisition Date : May 15, 2019 (transfer of the trust beneficial interest) 6. Seller : Hamamatsucho Real Estate Sales Limited Liability Company 7. Financing : To be determined (Note) 8. Scheduled Date of Payment : May 15, 2019 (Note) As of today, financing measure has not been finalized. It will be announced once it is determined. 2 / 12

3 (3) Outline of the Property Property Name Henn na Hotel Tokyo Hamamatsucho Type of the Asset Trust beneficial interest in real estate Trustee Sumitomo Mitsui Trust Bank, Limited Period of Trust Agreement From March 30, 2018 to March 30, 2028 Location Lot number (Note 1) Hamamatsucho, Minato-ku, Tokyo Residential Hamamatsucho, Minato-ku, Tokyo 2-minute walk from Daimon Station (Toei Oedo Line and Asakusa Line) Access 3-minute walk from Hamamatsucho Station (JR Yamanote Line and Keihin-Tohoku Line) 3-minute walk from Monorail Hamamatsucho Station (Tokyo Monorail) Type (Note 1) Hotel (118 rooms) Clinic Site Area (Note 1) Land m 2 Building 2, m 2 Structure and Scale (Note 1) S 14F Type of Ownership Land Proprietary Ownership Building Proprietary Ownership Completion Date (Note 1) March 2018 Initial Building Owner Daiichi Realtor Constructor Rinkai Nissan Construction Co., Ltd. Scheduled Acquisition Price 4,456 million Appraisal Value 4,600 million Date of Value Estimate December 1, 2018 Appraisal Agency (Appraisal Method) Appraisal by Japan Real Estate Institute Probable Maximum Loss (PML) 14.8% Collateral None Special Notations None Details of Tenant (Note 2) Total Number of Tenants 1 Security Deposit Undisclosed (Note 3) Total Rental Revenues (yearly) Undisclosed (Fixed rent) (Note 3) Total Leasable Floor Space 2, m 2 Total Leased Floor Space 2, m 2 Occupancy Ratio 100.0% Reference Estimated Annualized NOI 197 million (Note 4) Estimated NOI Yield (Note 4) 4.4% (Notes) 1. Each piece of information in the Location (Lot number), Type, Site Area, Structure and Scale and Completion Date is described as it appears on the real estate register. 2. Details of Tenant is based on the schedule as of acquisition the Asset to be Acquired. 3. Not disclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the tenant. 4. For the definition of NOI (Net Operating Income) and Estimated Annualized NOI, please refer to Note 3 of 1. Overview of the Acquisition above. The estimated occupancy ratio is 100.0%. (4) The Seller s Profile Company Name Hamamatsucho Real Estate Sales Limited Liability Company Address Seiwa Sogo Accounting Firm., Kudanminami, Chiyoda-ku, Tokyo Representative Shinji Arakawa, Function manager of Hamamatsucho Real Estate Sales Holdings Inc. 1. Acquisition, holding, management and disposal of securities and the trust beneficial interest Principal Business 2. Acquisition, holding, management and disposal of real estate for sale 3. Acquisition, holding and disposal of monetary claim 4. Business incidental to or related to the projects listed in the preceding items Capital (Fund) 100 thousand (As of December 31, 2018) Date of Foundation July 20, 2017 Net Assets Undisclosed (Note) Total Assets Undisclosed (Note) 3 / 12

4 Major Shareholder(s) Undisclosed (Note) Relationship with United Urban or JRA Capital Ties There are no significant capital ties. Personal Relationship There are no significant personal relationships. Business Relationship There are no business relationships. Hamamatsucho Real Estate Sales Limited Liability Company falls under neither the category of related parties, etc. (the Related Party ) under the Act on Investment Trusts and Investment Corporations of Standing to Related Party Japan (Act No. 198 of 1951, as amended) nor the category of the sponsor/stakeholder ( Sponsor/Stakeholder ) under the self-imposed rules (rules for conflicts of interest) of JRA. (Note) Not disclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the seller. (5) Aspects of the Owners of the Property and Others The Asset to be Acquired will not be acquired from special related parties of United Urban or JRA. (6) Outline of Intermediary Not applicable. (7) Transactions with Interested Party and Sponsor/Shareholder Not applicable. B. Smile Hotel Premium Sapporo Susukino (1) Reasons for Acquisition In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Asset to be Acquired for further growth of its portfolio. Upon the decision making to acquire the Asset to be Acquired, the following aspects (from 1. to 3.) were highly considered. 1. Location The Asset to be Acquired is located in northeast part of Susukino area, the busiest amusement center in Hokkaido. It has good access to public transportation; 1 minutes walk from Housuisusukino Station on the Subway Toho Line, 4 minutes walk from Susukino Station on the Subway Nanboku Line and 5 minutes walk from Odori Station on the Subway Toho Line, the Nanboku Line and the Tozai Line. The Asset to be Acquired is within walking distance from the Sapporo s office district and the city center. The Asset to be Acquired is very convenient for hotel guests and has the strong advantage in location. Sapporo is also a sightseeing destination for tourists from Japan and abroad. As the number of foreign tourists visiting Japan has increased, the number of overnight visitors in Sapporo is also on a solid rise. Therefore we can continuously expect a strong demand for accommodation in the future. 2. Building The building of the Asset to be Acquired (the Building ) was completed in December 2017 and started the operation as Smile Hotel Premium Sapporo Susukino in March All the guest rooms in the Property (142 twin bedrooms and 142 double bedrooms) were designed to accommodate double occupancy (lodging by two people sharing the same room), which is suitable for foreign tourists. 3. Tenants, etc. K.K. Hospitality Operations (the Hotel Operator ) operates a hotel part of the Building under the name of Smile Hotel Premium Sapporo Susukino. The Hotel Operator is currently operating 60 hotels across Japan (as of the end of December 2018), mainly in the Smile Hotel brand, and has been steadily expanding business. Therefore the stable operation can be expected in the Building as other hotels of the Hotel Operator. The long fixed-term lease agreement (lease term: 20 years, remaining term: about 19 years) has been concluded with the Hotel Operator and stable earnings are expected over the mid to long term. 4 / 12

5 (2) Summary of Acquisition 1. Asset to be Acquired : Trust beneficial interest in real estate 2. Property Name : Smile Hotel Premium Sapporo Susukino 3. Scheduled Acquisition Price : 4,233 million 4. Scheduled Agreement Date : January 16, 2019 (conclusion of the sale and purchase agreement of the trust beneficial interest) 5. Scheduled Acquisition Date : June 28, 2019 (transfer of the trust beneficial interest) 6. Seller : MG Leasing Corporation 7. Financing : To be determined (Note) 8. Scheduled Date of Payment : June 28, 2019 (Note) As of today, financing measure has not been finalized. It will be announced once it is determined. (3) Outline of the Property Property Name Smile Hotel Premium Sapporo Susukino Type of the Asset Trust beneficial interest in real estate Trustee Mizuho Trust & Banking Co., Ltd. Period of Trust Agreement From March 29, 2018 to March 31, 2028 Location Lot number (Note 1) Minami4jonishi, Chuo-ku, Sapporo, Hokkaido Residential Minami4jonishi, Chuo-ku, Sapporo, Hokkaido (Note 2) 1-minute walk from Hosuisusukino Station (Subway Toho Line) Access 4-minute walk from Susukino Station (Subway Nanboku Line) 4-minute walk from Susukino Station (Streetcar Yamahana Line) 5-minute walk from Odori Station (Subway Tozai Line) Type (Note 1) Hotel (284 rooms) (attached building: parking) Site Area (Note 1) Land m 2 Building 7, m 2 (attached building: m 2 ) Structure and Scale (Note 1) S 13F (attached building: S 1F) Type of Ownership Land Proprietary Ownership Building Proprietary Ownership Completion Date (Note 1) December 2017 Initial Building Owner THE SANKEI BUILDING CO., LTD. Mitsubishi Corporation Constructor HAZAMA ANDO CORPORATION Sapporo branch Scheduled Acquisition Price 4,233 million Appraisal Value 5,320 million Date of Value Estimate December 1, 2018 Appraisal Agency (Appraisal Method) Appraisal by The Tanizawa Sōgō Appraisal Co., Ltd. Probable Maximum Loss (PML) 1% Collateral None Special Notations None Details of Tenant (Note 3) Total Number of Tenants 1 Security Deposit Undisclosed (Note 4) Total Rental Revenues (yearly) Undisclosed (Fixed rent) (Note 4) Total Leasable Floor Space 8, m 2 Total Leased Floor Space 8, m 2 Occupancy Ratio 100.0% Reference Estimated Annualized NOI 254 million (Note 5) Estimated NOI Yield (Note 5) 6.0% (Notes) 1. Each piece of information in the Location (Lot number), Type, Site Area, Structure and Scale and Completion Date is described as it appears on the real estate register. 2. Location (Residential) shows the location indicated on the real estate register for the building as the residential address has not been assigned. 3. Details of Tenant is based on the schedule as of acquisition the Asset to be Acquired. 5 / 12

6 4. Not disclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the tenant. 5. For the definition of NOI (Net Operating Income) and Estimated Annualized NOI, please refer to Note 4 of 1. Overview of the Acquisition above. The estimated occupancy ratio is 100.0%. (4) The Seller s Profile Company Name MG Leasing Corporation Address Josuikai Building Hitotsubashi, Chiyoda-ku, Tokyo Representative Masataka Kuramoto, President & CEO Principal Business General Leasing and Related Business Capital (Fund) 4,500 million (As of March 31, 2018) Date of Foundation December 1993 Net Assets 13,269 million (As of March 31, 2018) Total Assets 167,526 million (As of March 31, 2018) As of March 31, 2018 Major Shareholder(s) Shareholder Rate Sumitomo Mitsui Finance and Leasing Company, Limited 55% Marubeni Corporation 45% Relationship with United Urban or JRA Capital Ties There are no significant capital ties. Personal Relationship There are no significant personal relationships. Business Relationship There are no business relationships. MG Leasing Corporation falls under the category of the Related Party and the category of the Sponsor/Stakeholder. Therefore, in acquiring Standing to Related Party the Property, JRA is abiding by the predetermined limitations and procedures of JRA. (Note) (Note) In view of avoiding the conflicts of interest, JRA has established the restrictions and procedures for transactions, etc. between United Urban and Sponsor/Stakeholder in its internal rules on transactions (including a brokerage of a sale of an asset to be sold) with Sponsor/Stakeholder, which are called the Investment Committee Rules on Transactions with Sponsor/Stakeholder. The specific rules include the following: (i) When acquiring assets from Sponsor/Stakeholder, the acquisition price shall be the same as or less than the appraisal value; (ii) When selling assets to Sponsor/Stakeholder, the sale price shall be the same as or more than the appraisal value; and (iii) When Sponsor/Stakeholder is involved in the brokerage, etc. of acquisition or sale of assets with good reason, the commission for the acquisition or sale of assets shall be not more than 3% of the acquisition or sale price. In addition, specific procedures set forth are that, when United Urban and Sponsor/Stakeholder engage in a transaction, etc., the deliberation and resolution of the Investment Committee (the JRA s autonomous body that enters into deliberations and makes decisions on asset management and performs asset management evaluations, etc.), which includes a chairman and an outside expert, shall be required, and that the resolution must be passed by the unanimous agreement of the members of Investment Committee who have voting rights (a member of the Investment Committee who has a special interest in the resolution may not participate in the vote). The agenda of the Investment Committee are to be deliberated at the Compliance Committee, the chairman of which is Chief Compliance Officer who is in charge of compliance duties, and which includes an outside expert, from the view point of the compliance with laws and regulations, guidelines, internal rules, etc. The same shall apply hereinafter. (5) Aspects of the Owners of the Property and Others Property name Smile Hotel Premium Sapporo Susukino Standing of the property owners Company name / Name Relationship with special related parties Process of acquisition and reasons Current owner or beneficiary of the trust MG Leasing Corporation Interested Party and Sponsor/Stakeholder Previous owner or beneficiary of the trust A party who does not have particular interest with United Urban or JRA Preceding owner or beneficiary of the trust A party who does not have particular interest with United Urban or JRA - - Investment and operation - - Acquisition price Omitted because the current owner will own for more than - - one year (scheduled) Date of acquisition March (6) Outline of Intermediary Not applicable. 6 / 12

7 (7) Transactions with Interested Party and Sponsor/Shareholder Seller MG Leasing Corporation 3. Method of Settlement and Acquisition Schedule MG Leasing Corporation falls under the categories of both the Related Party and the Sponsor/Stakeholder, and therefore, JRA is abiding by the predetermined limitations and procedures of JRA. Concerning the acquisition of the Property, United Urban will pay MG Leasing Corporation 4,233 million (excluding acquisition costs, property tax, city planning tax and consumption tax) as an acquisition price. (1) Method of Settlement As of today, the payment to the Seller will be a lump-sum payment upon the delivery of the Property. However financing method has not been decided as of today. We will announce later, once it is determined. (2) Acquisition Schedule The schedule for acquisition of the Asset to be Acquired is as follows. Henn na Hotel Tokyo Hamamatsucho Smile Hotel Premium Sapporo Susukino Decision of acquisition January 15, 2019 Conclusion of sale and purchase agreement of trust beneficial interest (scheduled) January 16, 2019 Transfer of trust beneficial interest (scheduled) Payment (scheduled) May 15, 2019 June 28, Matters on Forward Commitments (1) Asset to be acquired with Forward Commitments (Note) Acquisition of the Asset to be Acquired might fall into Forward Commitments. (Note) In the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc. of Financial Services Agency, forward commitment is defined as a postdated sales contract under which payment and delivery shall be made at least one month after the conclusion of the contract, or any other contract similar thereto. (2) Impact on United Urban s Financial Standing if Forward Commitment is not executed In order to secure the Assets to be Acquired, United Urban will execute purchase and sale agreement of the trust beneficial interests in real estate (the PSA ) with each seller as of January 16, The PSA provides that either party may terminate the PSA if the other party materially breaches a provision thereof, in which case the party may request the party in breach to pay an amount equivalent to 20% of the acquisition price as penalty charges. In addition, in the event that one party who terminates the PSA and the other suffers a loss exceeding the amount of the penalty charges, such party may request the other party to compensate such loss in the amount exceeding the penalty charges, separately. However, this PSA is subject to the condition precedent to United Urban s fund procurement for acquisition of the Property. Therefore, as for the acquisition of the Asset to be Acquired, the PSA will be terminated with no penalty, if United Urban cannot complete fund procurement on the scheduled acquisition date, and the duty of penalty charge is limited to the range of compensation about legally loss and cost (including reasonable legal fee) each seller suffered in such case of cause attributable to United Urban. In view of the current situation of the financial market and financial standings of United Urban, United Urban considers that material adverse effect on United Urban s financial standing and the payment of cash distributions and other conditions are not likely to be caused in connection with the acquisitions of the Asset to be Acquired. 5. Outlook of Operating Condition United Urban will announce the forecasts of financial results including this effect for the thirty-first fiscal period (period ending May 31, 2019) and the thirty-second fiscal period (period ending November 30, 2019) in its Summary of Financial Report for the thirtieth fiscal period (period ended November 30, 2018) on January 18, / 12

8 6. Summaries of Appraisal Report A. Henn na Hotel Tokyo Hamamatsucho Appraisal Value Appraisal Agency 4,600,000 thousand Japan Real Estate Institute Date of Value Estimate December 1, 2018 (thousands of yen, unless otherwise indicated) Item Details Grounds Income approach price 4,600,000 - Price by Direct Capitalization Method 4,670,000 - (1) Total profit (Note) - (2) Total expenses (Note) - (3) Net operating income (NOI: (1)-(2) ) 196,426 - (4) Operating profit of lump-sum money (Note) - (5) Capital expenditures (including routine repairs) 1,700 The update fee to maintain the building actually occurs irregularly. In here, assumed to accumulate expected expenses on average every fiscal period, and assessed capital expenditures, taking into account the level of capital expenditure, the age for similar real estates and the annual average amount of renewal costs in the relevant engineering report. (6) FF&E reserve (Note) - (7) Net cash flow (NCF: (3)+(4)-(5) -(6)) 191,436 - (8) Cap rate 4.1% Assessed based on a real-estate investment yield set for each area, by adjusting it with the spreads arising from location requirements, standing of the building and other conditions for the subject property and by taking into account any future uncertainties and yields from similar real estate deals, etc. Price by discounted cash flow method 4,520,000 - Discount rate 3.9% - Terminal cap rate 4.3% - Cost approach price 3,400,000 Land ratio: 64.5%, Building ratio: 35.5% (including furniture, fixtures and equipment etc.) Other specific matters the appraisal agency has paid attention in appraising the property The appraiser considered that an income approach price which reliably reproduced price formation process from earnings perspective is more persuasive than a cost approach price. Therefore, the appraiser determined the appraisal value by standardizing on the income approach and by taking note of the cost approach price as reference. (Note) JRA has deemed that disclosing this information would have an adverse effect on United Urban s competitive position and may harm the interests of the unitholders. Therefore, this information will not be disclosed. 8 / 12

9 B. Smile Hotel Premium Sapporo Susukino Appraisal Value Appraisal Agency 5,320,000 thousand The Tanizawa Sōgō Appraisal Co., Ltd. Date of Value Estimate December 1, 2018 (thousands of yen, unless otherwise indicated) Item Details Grounds Income approach price 5,260,000 - Price by Direct Capitalization Method 5,450,000 - (1) Total profit (Note) - (2) Total expenses (Note) - (3) Net operating income (NOI: (1)-(2) ) 253,493 - (4) Operating profit of lump-sum money (Note) - (5) Capital expenditures (including routine repairs) 3,960 The amount is estimated on the annual assessed amount of long-term repair expenses indicated in the engineering report. It is also verified by comparing with various comparable cases, and taking into account the status of building management, grade of the building, and building ages, etc. (6) FF&E reserve (Note) - (7) Net cash flow (NCF: (3)+(4)-(5) -(6)) 250,533 - (8) Cap rate 4.6% The figure is calculated on the cap rates of other comparable properties, taking into account the trend of real estate investment market in a comprehensive manner, and paying attention to the relation with a discount rate. Price by discounted cash flow method 5,260,000 - Discount rate 4.6% - Terminal cap rate 4.8% - Cost approach price 5,150,000 Land ratio: 48.9%, Building ratio: 51.1% (including furniture, fixtures and equipment etc.) Other specific matters the appraisal agency has paid attention in None appraising the property (Note) JRA has deemed that disclosing this information would have an adverse effect on United Urban s competitive position and may harm the interests of the unitholders. Therefore, this information will not be disclosed. Attached Materials 1. Portfolio Summary 2. Photo and Map 9 / 12

10 Reference Material 1 [Distribution by Type of Use] Type of Use Number of Properties (Note 1) Portfolio Summary As of June 28, 2019 (Scheduled) (Scheduled) Acquisition Price (Note 2) Amount (millions of yen) Ratio Retail Properties , % Office Buildings , % Hotels , % Residential Properties 21 45, % Others 13 50, % Total , % [Distribution by Geographical Location] Location (Note 3) Number of Properties (Scheduled) Acquisition Price (Note 2) Amount (millions of yen) 6 Central Wards of Tokyo , % Ratio 23 Wards of Tokyo 12 44, % Tokyo Metropolitan Area , % Other Regions , % Total , % (Notes) 1. Each of maricom-isogo / SYSTEM PLAZA YOKOHAMA (Site), a retail property/office building complex and Shin-Osaka Central Tower and SS30, an office building/hotel complex have been counted as one property for each type of use, while counted as one property in the total row, respectively. Therefore, the number of properties of each type does not add up to the total. 2. Figures have been rounded to the nearest unit. There is the possibility the aggregated figures shown are not the same as the actual figures. The percentage is shown by rounding down to the nearest digit and there is the possibility that the aggregated figures are not the same as the actual total figures. 3. The definition of geographical investment location is as set forth below. Tokyo Metropolitan Area (Note a) Other Regions (Note b) Six Central wards of Tokyo 23 wards of Tokyo Tokyo metropolitan area Major Japanese cities including Chiyoda-ku, Minato-ku, government designated cities Chuo-ku, Shinjuku-ku, 23 wards of Tokyo except Tokyo metropolitan area (excluding those in Tokyo Shibuya-ku, and for six central wards of excluding 23 wards of Metropolitan Area) and the Shinagawa-ku Tokyo Tokyo surrounding areas thereof (Notes) a. Tokyo Metropolitan Area refers to Tokyo as well as Kanagawa, Chiba, Saitama, Ibaraki, Gunma, Tochigi and Yamanashi prefectures. b. Other Regions includes Osaka Area (Osaka Prefecture, Kyoto Prefecture and Hyogo Prefecture), Nagoya Area (Aichi Prefecture, Mie Prefecture and Gifu Prefecture) and Other cities (excluding Tokyo Metropolitan Area, Osaka Area and Nagoya Area). 4. Property to be acquired contained in the above charts is as follows; Type of Use Hotel Hotel Type Location Property Name Hotel Hotel 6 Central Wards of Tokyo Other Regions (Other) Henn na Hotel Tokyo Hamamatsucho Smile Hotel Premium Sapporo Susukino Scheduled Acquisition Date Scheduled Acquisition Price Amount (millions of yen) Ratio May 15, , % June 28, , % 5. As for Himonya Shopping Center, it is excluded from the above table on the assumption that sale will be carried out as scheduled on March 1, In addition to the properties in the above chart, United Urban has an asset as follows; Type of the Asset and Asset Name etc. Outline of the Asset Acquisition Date Acquisition Price (millions of yen) Preferred equity securities of Tenjin 123 1,130 units Apr. 21, Project TMK Total: 93 (the b fukuoka tenjin) 367 units Oct. 3, With acquisition of the Asset to be Acquired, Tenjin 123 Project TMK is scheduled to be dissolved, and United Urban intends to receive liquidation payment according to the equity interest. 7. The latest information about United Urban s portfolio is disclosed on United Urban s website / 12

11 Reference Material 2 A. Henn na Hotel Tokyo Hamamatsucho Photo and Map [Photo] [Map] 11 / 12

12 B. Smile Hotel Premium Sapporo Susukino [Photo] [Map] 12 / 12