Notice of Acquisition of Assets (Additional Acquisition of Nihonbashi Muro-machi Center Bldg.)

Transcription

1 January 6, 2005 To All Concerned Parties Name of REIT Issuer: Nippon Building Fund, Inc. Toshihiko Fukase, Executive Director Code Number: 8951 Person to Contact: Asset Management Company Nippon Building Fund Management, Ltd. Satoru Yamanaka, Chief Operating Officer TEL Notice of Acquisition of Assets (Additional Acquisition of Nihonbashi Muro-machi Center Bldg.) Nippon Building Fund, Inc. ( NBF ) hereby provides notice of its decision on December 24, 2004 to acquire assets as follows: Description 1. Outline of the Acquisition 1) Acquired Assets: Beneficiary interests in trust assets comprised mainly of real estate A portion of condominium interests in the building described in 2) below and corresponding co-ownership interests in common areas (NBF's equity: 54.89%) A portion of the site of the building described in 2) below 2) Name of Acquired Assets: Nihonbashi Muro-machi Center Bldg. 3) Acquisition Price: 14,000,000,000 (provided, however, that miscellaneous acquisition costs, fixed assets tax, city-planning tax and consumption tax are not included in these amounts) 4) Date of Acquisition Contract: December 24, ) Date of Transfer: December 24, ) Acquired From: Showa Jisho Co., Ltd. (please refer to Section 6 hereinbelow for a description of the seller) 7) Acquisition Funds: Existing capital plus loans (anticipated) 8) Broker: Mitsui Fudosan Co., Ltd. 2. Reason for Acquisition The acquisition is being undertaken with the intention of enhancing NBF s portfolio in the Tokyo central business districts (CBDs) in accordance with the asset management objectives and policies set forth in NBF s Articles of Incorporation. As NBF already owns 45.11% of this property, it was decided that by acquiring the entire building an increase in the value of the asset as well as stability and flexibility in its

2 management can be expected in consequence of the current additional acquisition. 3. Points by which the Property was Evaluated 1) Location The Nihonbashi district where the Property is located is well known as an economic and cultural center of Japan in which the Bank of Japan and other domestic and foreign financial institutes are to be found as well as long-established stores such as Mitsukoshi and Takashimaya. Further, additional development is expected in this area as there have been many ongoing "public-private" redevelopment projects in recent years. The Property, while being in the middle of the historical Nihonbashi district, has convenient access and provides pleasant walking to the Mitsukoshi-mae station of the Tokyo Metro system (a minute's walk) and to the Kanda station of the JR line (6 minutes walk), which is highly appreciated by the existing tenants of the building. 2) Building and Facilities The massive structure of the Property is well matched with the historical streetscape, and excellent in terms of visibility along the main street extending from the Kanda station of the JR line. The most impressive feature of the Property is the spaciousness of its standard floor area (1, ), which is the top class in this district, providing comfortable office spaces. 4. Background of Acquisition As stated above, NBF already owns 45.11% of the Property. The current agreement to sell and purchase was reached due to the intention of the other owner of condominium interests to sell such interests matching with NBF s intention to acquire 100% ownership through additional acquisition. 5. Outline of Assets to be Acquired 1) Location 2-15, Nihonbashi Muro-machi 3-chome, Chuo-ku, Tokyo 2) Use Offices, banks and parking areas 3) Type of Ownership and Equity (i) Land 100% ownership of lot numbers 1 ban 2, 1 ban 3, 1 ban 11, 1 ban 15, 1 ban 21, 1 ban 29, 1 ban 35, 1 ban 45, 1 ban 12, 1 ban 22 and 1 ban 39 located at 1) above. (ii) Building 100% condominium interests in house numbers 1 ban 10-1", 1 ban 10-2, 1 ban 10-3 and "1 ban 10-4, and 54.89% co-ownership of condominium interests in house number 1 ban 10-6 of Nihonbashi Muro-machi 3-chome located at 1) above. 4) Square meters (i) Land The currently acquired portion is 1, of the total site area of the

3 entire building (3, ) (ii) Building Total floor space of the entire building (including common areas): 5) Structure 23, The currently acquired portion consists of the 1st through 5th floors, a portion of the 6th floor and co-ownership interests in parking areas (8, as indicated in Real Property Registry) as well as the corresponding co-ownership interests in common areas. 12 floors above ground and 1 floor below ground 6) Design and supervision Nikken Sekkei Co., Ltd. 7) Construction Consortium consisting of Kashima, Shimizu, Tokyu, Toda, Mitsui, Aoki and Kokune Corporation 8) Completion 9) Valuation October 1986 Valuation prepared by Tanizawa Sogo Appraisal Co., Ltd. Appraisal Value 13,520,000,000 Date of Valuation December 1, ) Earthquake PML (*) 12.6% obtained from the building condition investigation report prepared by Engineering & Risk Services Corporation (*) PML=Probable Maximum Loss. While there is no standardized, precise definition of this term, with respect to buildings, earthquake PML indicates the ratio (%) of restoration costs against the costs of reconstruction of a building resulting from the amount of destruction suffered due to a foreseeable catastrophic earthquake (being an earthquake which may occur every 475 years, and whose possibility of occurrence is 10% during a 50 year period) occurring during the building s foreseeable useful life (50 years being the general useful life of buildings). The PML percentage appearing above indicates a 90% level of reliability. As a building s earthquake resistance and the characteristics of the magnitude of an earthquake are inter-related, the 90% level of reliability means a PML not exceeding the figures for up to 90 buildings out of a hundred buildings. However, in general, PML indicates the damage ratio only for buildings (structural materials, non-structural materials, and construction facilities) while incidental damages such as damage to production equipment or machinery, furniture or fixtures, damage due to water or fire, indemnification of affected persons, or loss of business due to suspension of business etc., are not included. 11) Existence of Security Interests (Liens) None

4 12) Tenancy, etc. (i) Total number of tenants: 7 companies (ii) Total rentable square meters 8, (iii) Total leased square meters 8, (iv) Occupancy rate: 100% The occupancy rate in the currently-owned portion (8, ) is also 100% as of this date. 6. Outline of Seller 1) Name Showa Jisho Co., Ltd. 2) Address 7-8, Kyobashi 3-chome, Chuo-ku, Tokyo 3) Representative Tatsuya Ogonuki, President & Representative director 4) Capital 100 million 5) Principal Business General real estate business 7. Transactions with Interested Parties etc. 1) Asset Management For real estate etc. acquired by NBF, Office Management Business including profit management, operation and management of real estate etc. is in principle entrusted to Mitsui Fudosan Co., Ltd., one of the related parties of Nippon Building Fund Management, Ltd. The same will apply to the current acquisition. 8. Acquisition Schedule December 24, 2004 Determination to make acquisition December 24, 2004 Execution of sale and purchase agreement of beneficiary interests in December 24, 2004 trust Date of transfer 9. Forecasted Management Situation as at the close of December, 2004 There is no change in the forecasted management situation during the period ending December 31, 2004, as this acquisition will have little impact upon the management situation of NBF during such period. End.. This English language notice is a translation of the Japanese language notice dated December 24, 2004 and was prepared solely for the convenience of, and reference by, overseas investors. NBF makes no warranties as to its accuracy or completeness.

5 <Attached Materials> Reference Material 1 Reference Material 2 Reference Material 3 Estimated Revenues and Expenses from the Property to be Acquired Photo of the Exterior of the Property Summary of Portfolio after Acquisition of the Propertty

6 Reference Material 1 Estimated Revenues and Expenses from the Property to be Acquired in million yen Revenues (including ancillary revenues) 988 Expenses (excluding depreciation) 241 public imposts and taxes 85 miscellaneous expenses management entrustment fees, costs of repair etc insurance premiums 1 Property NOI Net Operating Income 747 Premises upon which Estimated Revenues and Expenses are based 1. The above figures represent annualized revenues and expenses after exclusion of extraordinary factors for the year of acquisition (not the forecasted figures for the coming period), corresponding to the equity acquired by NBF. 2. Revenues are premised on an occupancy rate of 100%. Reference Material 2 Photo of the Exterior of the Property

7 Reference Material 3 Summary of Portfolio after Acquisition of the Property Area Name of Building Book Value Yen Percentage of in thousands Percentage each area JFE Bldg. Shirokane 1-chome East Area Redevelopment Project(Note 1) Shiba NBF Tower Nihonbashi Muro-machi Center Bldg.(Note 2) Shinjuku Mitsui Bldg. No.2 GSK Bldg. Naka-Meguro GT Tower Daiya Toranomon Bldg. Kowa Nishi Shinbashi Bldg. B Nippon Steel Bldg. No.2 Alliance Shibuya Garden Front Shiba A Bldg. Takanawa 1-chome Bldg. Toranomon Kotohira Tower Sumitomo Densetsu Bldg. Higashi-Ginza Square(tentative name, Note 3) Daiya Ikebukuro Bldg. Ikebukuro TG Homest Bldg. Sudacho Verde Bldg. Nishi-Shinjuku Mitsui Bldg. Ebisu CS Bldg. Nakano-Sakaue Sunbright Twin Yokohama ST Bldg. NBF Atsugi Bldg. Tsukuba Mitsui Bldg. S-ino Omiya North Wing Daido Life Omiya Bldg. Matsudo City Bldg. Sapporo L-Plaza Sapporo Minami Nijo Bldg. NBF Sendai Honcho Bldg. Unix Bldg. Niigata Telecom Bldg. Hirokoji Toei Bldg. Aqua Dojima Daiwa Dojima Bldg. Sun Mullion NBF Tower Sakai Higashi Center Bldg. Tanimachi Kowa Bldg. Aqua Dojima East Otemae Center Bldg. Shijo Karasuma Minami Bldg. NBF Hiroshima Tatemachi Bldg. Hiroshima Fukuromachi Bldg. Hakata Gion 21 Bldg. The Book Value figures in the above table are in principle the appraisal value disclosed as of the end of June 2004 (the appraisal value of real estate with date of valuation being June 30, 2004); provided, however, for properties acquired (or to be acquired) after July 2004, prices are acquisition prices (excluding miscellaneous acquisition costs, fixed assets tax, city-planning tax and consumption tax) as stated in the respective sale and purchase contracts as of the dates of the decision to acquire such properties. (Note 1) Expected to be acquired on March 31, 2006; provided, however, that in the event that profitability is improved as the result of tenants attracted by the sellers, the price may be increased to a maximum of 31,000,000,000 by the transfer date in accordance with certain rules. (Note 2) The book value of Nihonbashi Muro-machi Center Bldg. represents the total price of

8 the already acquired portion ( 9,710,000,000) and the current acquisition ( 14,000,000,000). (Note 3) Expected to be acquired on March 28, 2005; provided, however, that in the same manner as in Note 1, in the event that profitability is improved as the result of tenants attracted by the sellers, the price may be increased to a maximum of 5,200,000,000 by the transfer date in accordance with certain rules.