Notice Concerning Acquisition of Property (GRAN FONTE)

Transcription

1 For Translation Purposes Only For Immediate Release March 29, 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 (GRAN FONTE) 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 the property as set forth below. 1. Acquisition of the Property United Urban will acquire the trust beneficial interest in the following real estate (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 D30 Residence (apartment) GRAN FONTE Nerima-ku, Tokyo 2,700 million 5.3% 4.4% April 1, 2019 (Notes) 1. Type of Use determined by United Urban is shown. For the details, please refer to (1) Reason for Acquisition of 2. Details of Acquisition below. 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. 2. Details of Acquisition (1) Reasons for Acquisition In accordance with the basic asset management policy and the investment approach prescribed in the 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 were highly attractive. 1 / 8

2 Location The Asset to be Acquired is located 5 minutes walk from Ōizumi-gakuen Station on the Ikebukuro Line. It takes only about 15 minutes from the station to Ikebukuro Station, one of the busiest stations in Tokyo. It is a popular residential area for families with convenient access to various facilities around the station, including retail shops such as supermarkets and drug stores, financial institutions, public facilities, clinics, schools. Building The building of the Asset to be Acquired (the Property ) is a rental apartment completed in 1998 with 11 floors above the ground. The Property has 88 residential units and a retail space; most of the units are designed for families with 2DK+S (66.75m 2 ) type while there are 1DK and 3LDK types. Also, the Property has a seismic isolation structure that has received structural certification from the Building Center of Japan and has been certified by the Minister of Construction (currently: Minister of Land, Infrastructure, Transport and Tourism). Tenants, etc. The 1st floor is taken up by a hair salon, a drug store and a flower shop respectively. floor and the 2nd floor or higher are let by residents. A part of the 1st (2) Summary of Acquisition 1. Asset to be Acquired : Trust beneficial interest in real estate 2. Property Name : GRAN FONTE 3. Scheduled Acquisition Price : 2,700 million 4. Scheduled Agreement Date : April 1, 2019 (conclusion of the sale and purchase agreement of the trust beneficial interest) 5. Scheduled Acquisition Date : April 1, 2019 (transfer of the trust beneficial interest) 6. Seller : Domestic company (undisclosed) 7. Financing : Cash on hand (scheduled) 8. Scheduled Date of Payment : April 1, 2019 (3) Outline of the Property Property Name GRAN FONTE Type of the Asset Trust beneficial interest in real estate Trustee Mizuho Trust & Banking Co., Ltd. Period of Trust Agreement From November 30, 2012 to April 30, 2029 (scheduled) , Higashioizumi, Lot number (Note 1) Location Nerima-ku, Tokyo Displayed Address Higashioizumi, Nerima-ku, Tokyo Access 5-minute walk from Ōizumi-gakuen Station (Ikebukuro Line) Type (Note 1) Store, apartment (attached building: shed) Site Area (Note 1) Land 4, m 2 Building 6, m 2 (attached building: m 2 ) Structure and Scale (Note 1) RC 11F (attached building: RC) Type of Ownership Land Proprietary Ownership Building Proprietary Ownership Completion Date (Note 1) October 1998 Initial Building Owner Housing and Urban Development Corporation Constructor PENTA-OCEAN CONSTRUCTION CO., LTD. Scheduled Acquisition Price 2,700 million Appraisal Value 3,280 million Date of Value Estimate March 10, 2019 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 2) Total Number of Tenants (Note 3) 89 2 / 8

3 Security Deposit Total Rental Revenues (yearly) 48 million 170 million Total Leasable Floor Space 6, m 2 Total Leased Floor Space 6, m 2 Occupancy Ratio 98.0% Reference Estimated Annualized NOI 143 million (Note 4) Estimated NOI Yield (Note 4) 5.3% (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 described as of March 25, A pass-through-type master lease agreement will be concluded between the trustee and the master lessee with regard to the Property. Therefore, the Total Number of Tenants figure is stated by aggregating the number of end tenants subleased to by the master lessee. 4. For the definition of NOI (Net Operating Income) and Estimated Annualized NOI, please refer to Note 3 of 1. Acquisition of the Property above. The estimated occupancy ratio is 98.0%. (4) The Seller s Profile The seller is a domestic company. However, the seller s details are not disclosed because the seller has not given consent for the disclosure. As of today, the seller falls under neither the category of related parties, etc. (the Related Party ) under the Act on Investment Trusts and Investment Corporations of 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. In addition, United Urban and JRA have no significant capital ties, personal relationships and transactions with the seller, and the seller is not a related party of United Urban and JRA. (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 1. Outline of Broker The broker is a domestic company. However, the broker s details are not disclosed because the broker has not given its consent for the disclosure of its profile, etc. As of today, the broker falls under neither the category of the Related Party nor the category of Sponsor/Stakeholder. In addition, United Urban and JRA have no significant capital ties, personal relationships and transactions with the broker, and the broker is not a related party of United Urban and JRA. 2. Amount and Details of Commission The amount of commission is not disclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the broker. The amount of commission for the broker is an amount less than the upper limit (3% of the scheduled acquisition price plus 60,000 yen (excluding consumption taxes) stipulated in the Building Lots and Buildings Transaction Business Act). (7) Transactions with Interested Party and Sponsor/Shareholder Not applicable. 3. Method of Settlement and Acquisition Schedule (1) Method of Settlement The payment to the seller will be paid in a lump-sum upon the delivery of the Property, using cash on hand. (2) Acquisition Schedule The schedule for acquisition of the Asset to be Acquired is as follows. March 29, 2019 Decision of acquisition Conclusion of sale and purchase agreement of trust beneficial interest, transfer April 1, 2019 of trust beneficial interest and payment (scheduled) 3 / 8

4 4. Outlook of Operating Condition United Urban does not make any changes to the forecasts of financial results for the thirty-first fiscal period (period ending May 31, 2019) and the thirty-second fiscal period (period ending November 30, 2019) as the effect of the acquisition of the Asset to be Acquired is not significant. 4 / 8

5 5. Summaries of Appraisal Report Appraisal Value Appraisal Agency 3,280,000 thousand The Tanizawa Sōgō Appraisal Co., Ltd. Date of Value Estimate March 10, 2019 (thousands of yen, unless otherwise indicated) Item Details Grounds Income approach price 3,280,000 - Price by Direct Capitalization Method 3,360,000 - (1) Total profit (Effective total profit: ) 192, Potential total profit Assessed based on the competitiveness of the subject property, (rental revenues, common area 184,543 the current status of occupancy, the scheduled move-in and charges) move-out of tenants, the market environment, etc. 2. Utility revenues 0 Assessed by similar cases. 3. Parking revenues 18,144 Assessed based on the past performance. 4. Other revenues 4,963 Assessed based on the competitiveness of the subject property, the market environment, the past performance, etc. 5. Losses from vacancies 14,670 Assessed based on the competitiveness of the subject property, the past performance, market environment, etc. 6. Bad debt losses 0 Judged that no bad debt losses need to be recorded in view of the circumstances, etc. of lessees. (2) Total expenses ( ) 40, Administrative and maintenance The fees are estimated based on the contents of the services to 7,521 fees be entrusted and the trend of the past performance, etc. 8. Utilities 3,008 The revenues are assessed based on the past performance. 9. Repairs 8,286 Assessed by the building ages, similar cases, the status of building management, grade of the building, etc. taking into account the engineering report. 10. Property and other tax 11,657 Recorded in reference to the document about taxation for fiscal 2018 and taking into account the burden adjustment measures etc. 11. Property Management Fee 3,762 Assessed by the content of outsourcing contract based on the proposal of rental management operation business. 12. Advertising expenses for tenants, etc. 6,284 Assessed based on the content of outsourcing contract. 13. Casualty insurance 276 Recorded an estimated amount. 14. Other expenses 192 Assessed by similar cases. (3) Net operating income (NOI: (1)-(2) ) 151,989 - (4) Operating profit of lump-sum money 318 Assessed the amount of deposit etc. at the time of new contract from the competitiveness of the property, market environment etc., the investment yield is assessed as 1% based on the recent rate of return on financial assets and future economic forecasts. (5) Capital expenditures (including Assessed by the building ages, similar cases, the status of 7,640 building management, grade of the building, etc. taking into routine repairs) account the engineering report. (6) Net cash flow (NCF: (3)+(4)-(5)) (7) Cap rate 4.3% 144,668 - Assessed through comparison of transaction yields of properties in the neighborhood or in the similar area, etc. within the same demand-supply zone, and by taking into account the volatility of net cash flow in the future and the relation with the discount rate. Price by Discounted Cash Flow method 3,240,000 - Discount rate 4.4% - Discount rate (11 fiscal year) 4.5% Terminal cap rate 4.2% - Cost approach price 3,250,000 Land ratio: 70.7%, Building ratio: 29.3% Other specific matters the appraisal agency has paid attention in appraising the property None 5 / 8

6 Attached Materials 1. Portfolio Summary 2. Photo and Map 6 / 8

7 Reference Material 1 [Distribution by Type of Use] Type of Use Number of Properties (Note 1) Portfolio Summary As of April 1, 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 , % 23 Wards of Tokyo 12 44, % Tokyo Metropolitan Area , % Ratio 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; Scheduled Acquisition Price Type of Type Location Property Name Scheduled Use Acquisition Date Amount (millions of yen) Ratio Residence Apartment 23 Wards of GRAN FONTE April 1, , % Tokyo 5. The latest information about United Urban s portfolio is disclosed on United Urban s website. 7 / 8

8 Reference Material 2 Photo and Map [Photo] [Map] 8 / 8