IIF to Acquire and Lease Ten Properties in Japan

Transcription

1 To all concerned parties: February 20, 2018 Investment Corporation Industrial & Infrastructure Fund Investment Corporation (Tokyo Stock Exchange Company Code: 3249) Representative: Yasuyuki Kuratsu, Executive Director URL: Asset Management Company Mitsubishi Corp.UBS Realty Inc. Representative: Inquiries: Toru Tsuji, President & CEO Hidehiko Ueda, Head of Industrial Division TEL: IIF to Acquire and Lease Ten Properties in Japan Industrial & Infrastructure Fund Investment Corporation ( IIF ) announced today that Mitsubishi Corp. UBS Realty Inc., IIF s asset manager (the Asset Manager ), decided to acquire and lease domestic real estate and real estate trust beneficiary rights (the Anticipated Acquisitions ) as outlined below. 1. Summary of Anticipated Acquisitions Property number (Note 1) F13 F14 F15 Property name (Note 2) (Note 3) Location Seller IIF Hiroshima Manufacturing Center (land with leasehold interest) IIF Totsuka Manufacturing Center (land with leasehold interest) IIF Atsugi Manufacturing Center (land with leasehold interest) Hiroshimash i, Hiroshima Yokohamashi, Kanagawa Atsugishi, Kanagawa Metal One Corporation (Note 6) MITSUIKE CORPORATION Business Company in Japan (Note 7) Anticipated acquisition price (million yen) Appraisal (Note 4) value (million yen) NOI yield (Note 5) NOI yield (after depreciation) (Note 5) 1,608 1, % 6.2% 2,300 2, % 5.0% 4,940 5, % 5.0% Anticipated acquisition date March 8, 2018 March 8, 2018 April 2, 2018 L36 Additional Acquisition IIF Itabashi Logistics Center (40% coownership interest) Itabashiku, Tokyo SPC (Note 6) % 3.7% March 8, 2018 Additional Acquisition L39 IIF Osaka Suminoe Logistics Center I (25% coownership interest) Osakashi, Osaka Business Company in Japan (Note 6) 3,025 3, % 3.3% March 8, 2018 Additional Acquisition L40 IIF Osaka Suminoe Logistics Center II (25% coownership interest) Osakashi, Osaka Business Company in Japan (Note 6) % 4.1% March 8, 2018 L42 IIF Sapporo Logistics Center Sapporoshi, Hokkaido SPC 2,480 2, % 4.7% March 8,

2 L43 L44 L45 IIF Hitachinaka Port Logistics Center (land with leasehold interest) IIF Koriyama Logistics Center IIF Kobe Nishi Logistics Center (land with leasehold interest) Nakagun, Ibaraki Koriyamashi, Fukushima Kobeshi, Hyogo Business Company in Japan Sumitomo Mitsui Finance and Leasing (Note 6) Co., Ltd. Kohnan Shoji Co., Ltd. (Current Owner:Kobe (Note 8) City) 1,145 1, % 4.8% 2,585 3, % 5.6% 1,960 2, % 4.6% March 9, 2018 March 9, 2018 March 29, 2018 (Note 1) Property number classifies properties owned by IIF into three categories, namely, L (logistics facilities), F (manufacturing, research and development facilities) and I (infrastructure facilities). (Note 2) Property name indicates the name that IIF will use for each property after the Anticipated Acquisitions. These properties do not have registered names as of the date of this news release. The same shall apply hereafter. (Note 3) When the property is acquired through a bridge structure, the name of an actual seller is indicated. If any consent to disclosure is not obtained by the seller or the bridge seller, the name of the seller is simply indicated as SPC or Business Company in Japan, according to the type of such seller. (Note 4) The appraisal value is based on the figure shown on the appraisal report as of January 1, (Note 5) For NOI yield and NOI yield (after depreciation), please refer to Reference: Definitions of Individual Calculation Formulas at the end of this news release. (Note 6) IIF acquires these properties by using a bridge function, which will be through Godo Kaisha Industrial Asset Holdings 5 for IIF Koriyama Logistics Center and a business company in Japan for other properties (for IIF Osaka Suminoe Logistics Center I and IIF Osaka Suminoe Logistics Center II, another business company in Japan than the seller). (Note 7) IIF has entered into a succession agreement, which stipulates that the contractual status of the buyer in the sale and purchase agreement executed between the business company in Japan as the seller and a business company in Japan as the buyer would be transferred from the latter to IIF. When a construction agreement for the purpose of construction of a plant on this property will not be executed by March 31, 2018 between Ichikoh Industries, Ltd. as a contractee and the seller as a contractor, or if it has become clear by March 31, 2018 that a plant will not be constructed at all, the sale and purchase agreement will become invalid and IIF will not succeed the status as purchaser. Thus, if such construction agreement is not executed or it becomes clear that the plant will not be constructed, IIF will not be able to acquire this property. (Note 8) With respect to Kobe Nishi Logistics Center (land with leasehold interest) the seller of the property will be Kohnan Shoji Co., Ltd., while it is Kobe City that owns this property as of today. As of today, IIF has entered into a memorandum of understanding which stipulates that Kohnan Shoji Co., Ltd. will acquire this property by March 6, 2018 pursuant to the purchase agreement between Kobe City and Kohnan Shoji Co., Ltd., complete administrative procedures and execute a purchase agreement for the sale of this property by March 9, 2018 or by the closing day with which IIF and Kohnan Shoji Co., Ltd. agree. However, IIF will not be able to acquire this property if Kohnan Shoji Co., Ltd. could not acquire the property from Kobe City. A sales and purchase agreement of the trust beneficiary right will be executed between IIF and Kohnan Shoji Co., Ltd. on March 9, Reason for Acquisitions and Leases IIF decided to acquire the anticipated properties based on its judgment that the characteristics of the properties are aligned with IIF s investment strategies, specifically, the acquisition of quality assets that would contribute to increase cash distributions per unit. In deciding whether to acquire the ten properties, we evaluated the properties in terms of profitability, longterm usability and versatility. Please refer to section 3. Summary of Anticipated Acquisitions and Leases for the details of each property. With regards to the reasons for the lease of the Anticipated Acquisitions, we are of the view that each tenant of the Anticipated Acquisitions meets the tenant selection criteria set forth in the Report on the Management Structure and System of the Issuer of REIT Units and Related Parties, released as of October 31, With regards to the reasons for the lease of the individual properties, please refer to section 3. 2

3 Summary of Anticipated Acquisitions and Leases. 3

4 3. Summary of Anticipated Acquisitions and Leases IIF Hiroshima Manufacturing Center (land with leasehold interest) (1) Summary of Property Type of asset Trust beneficiary right in real estate Anticipated acquisition March 8, 2018 date Anticipated acquisition price Appraisal value Appraiser Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) 1,608 million yen 1,820 million yen Japan Real Estate Institute May 31, 2017 Sumitomo Mitsui Trust Bank, Limited March 31, 2028 Land area 23, m 2 Zoning FAR/buildingtoland ratio Type of Possession Earthquake PML Collateral conditions 14611, Ebaminami 2chome, Nakaku, Hiroshimashi, Hiroshima, Japan Industrial area 200%/60% Ownership None Building structure / stories Completio n Gross floor area Type of building Special notes This property is located in the harbor district. Anticipated acquisition date is the delivery date with regards to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Metal Corporation One 1 23, m 2 (100%) Not disclosed Period of contract 20 years (from March 23, 2017 until March 31, 2037) Deposit Not disclosed Revision of rent or termination during the lease period Contract Type: Fixedterm leasehold for business purposes Contract Renewal and Revision: Rent shall not be revised during the contract period. When significant changes in economic conditions etc. occur, lessor and lessee shall consult regarding rent revision. Contract cannot be terminated with a termination date between commencement date of the lease period till August 31, 2021 ( penalty period ) Lessee may terminate the lease agreement during the penalty period by paying relevant amount of rent for the remaining period from the termination date till the expiry date as penalty charges to the lessor on the termination date. However, in the case where (i) the tenant candidate which lessee introduced to the lessor has the credit which the lessor is satisfied with (includes but not limited to; satisfaction with the rent payment ability and that it does not 4

5 correspond to antisocial forces), and (ii) it could be entered into a lease agreement better than that of the conditions of this agreement for the lessor (the lessor may not reject nor reserve the conclusion without a justified reason), lessee can avoid all payment obligations and the duty to put it back to raw land after the cancellation date. Others: None IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Acquisition Highlights Acquired through the second CRE proposal to Metal One, a leading steel trading company of Mitsubishi Corporation group. Steady tenant demand can be expected with its versatility as a good location for manufacturing and for securing workforce. Longterm Usability (Likelihood of Longterm Use by Current Tenant) Tenant (land lessee / building owner) is Metal One, a major steel trading company invested by Mitsubishi Corporation. Metal One leases buildings to several companies (including its affiliates); to companies which processes, stores and uses as a distribution point for coil/steal pipe in manufacturing and construction industry. IIF set a noncancellation period until August 2021, any cancellation during this period is subject to termination fees in the lease agreement executed with the tenant in order to ensure continuity in use in the midterm. Versatility (Versatility as a Real Estate Asset) <Location> Good access to Hiroshima city; approximately 1.3km from Hiroshima Highway Route 3 Yoshijima IC, approximately 1.2km from Hiroshima Electric Railway Eba Station. Also, close to residential area and good for securing workforce. Close to Mitsubishi Heavy Industry Hiroshima Machinery Works Eba Plant, located in area where plants concentrate. Products can be unloaded from the sea by the crane installed to the building. 5

6 IIF Totsuka Manufacturing Center (land with leasehold interest) (1) Summary of Property Type of asset Trust beneficiary right in real estate Anticipated acquisition (Note 1) date March 8, 2018 Anticipated acquisition price 2,300 million yen Appraisal value 2,580 million yen Appraiser Daiwa Real Estate Appraisal Co., Ltd. Anticipated date of trust beneficiary rights set March 8, 2018 (Note 2) (Note 2) Trustee Mizuho Anticipated trust period (Note 2) end Location (address) Trust & Banking Co., Ltd. March 31, 2028 Land area 19, m 2 Zoning FAR/buildingtoland ratio Type of Possession 22774, Kamiyabecho Aza Kunichiyato, Totsukaku, Yokohamashi, Kanagawa, Japan Industrial area 200%/60% Ownership Building structure / stories Completio Earthquake PML n Gross floor area Collateral conditions None Type of building As it is less likely that the soil of the subject land is contaminated with specific toxic substances as specified by the Soil Contamination Countermeasures Act (Act No.53 of 2002; as amended), it is considered that the possibility of health hazards by specific toxic substances is small. The impact of soil contamination from the surrounding area is not considered, but even if there is any impact from the surroundings, as long as you do not drink ground water, the possibility of health hazard is limited. On the other hand, it is considered that there are no denying the possibility of soil contamination by oil, but as there are currently no oil odor or oil film found in the subject land, it is reported that there is a low possibility that living environment conservation will be at risk due to oil Special notes contained soil straight away. The structure of the second floor and stair of the property on the adjacent land on the northwestern side (23543) cross the boundary into this property. Regarding this cross, a memorandum with the neighbor landowner has been executed; the memorandum stipulates that as long as the object crosses the boundaries, the parties shall acknowledge using the property as it is, and whenever there is a reconstruction of their own structure, the parties are to remove the object at their own responsibility. The trustee gives consent to TEPCO Power Grid, Inc. to enter into a part of the subject land for the purpose of maintaining power transmission lines, etc. (Note 1) Anticipated acquisition date is the delivery date with regard to the property expected as of today. (Note 2) Anticipated date of trust beneficiary rights set, Trustee, and Anticipated trust period end are the dates for setting the real estate trust beneficiary right expected as of today. 6

7 (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) MITSUIKE CORPORATION 1 19, m 2 (100%) Not disclosed Period of contract 50 years (from March 8, 2018 until February 7, 2068) Deposit Not disclosed Revision of rent or termination during the lease period Contract Type: Fixedterm leasehold for business purposes Contract Renewal and Revision: Rent shall not be revised during the lease period. When significant changes in economic conditions etc. occur, lessor and lessee shall consult regarding rent revision. Lessee may not apply for any midterm termination for five years since the commencement date of the lease period and may cancel the agreement on two year s notice after five years have passed. Others: If the trustee wants to transfer the property to a third party (except where the property is transferred to the beneficiary of the trust agreement upon termination of the relevant trust agreement) during the contract period, the trustee shall notify the lessee a transfer request on written notice. Lessee can negotiate with the trustee with priority during the period for first refusal right regarding transfer by notifying the trustee a transfer request in written notice. Above is not applicable for the transfer of trust beneficiary rights. IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Acquisition Highlights Acquired the land of a manufacturing facility based on the off balance sheet needs of MITSUIKE CORPORATION, a manufacturer of automobile bodies and parts, though CRE proposal to the company. Sustainable for business use for approximately 50 years (remaining term of rent 49.9 years) under the terms stipulated in the fixedterm lease agreement. High potential with good access to city area and versatility as an industrial location in the city area. Longterm Usability (Likelihood of Longterm Use by Current Tenant) Sustainable for business use for approximately 50 years (remaining term of rent 49.9 years) under the terms stipulated in the fixedterm lease agreement. Main plant with Headquarter of MITSUIKE CORPORATION, a manufacturer of automobile bodies and parts. Its main business partners are group companies of Nissan Motor Co., Ltd. Good access from Nissan Motor Co., Ltd. group s Nissan Shatai Co., Ltd. Headquarters and Nissan Motor Co., Ltd. Oppama plant, making distribution of products smooth. Versatility (Versatility as a Real Estate Asset) <Location> Located within the Totsuka industrial park, where plants of automotivepart manufactures and various other sectors are based. As a result, the area is attractive to a variety of tenants. Near Yokohama Shindo and has potential as an industrial location in the city area as it is easily accessed to urban area. Located within the Totsuka industrial park, just approx.1.3 km from Kamiyabe IC through 7

8 Yokohama Shindo giving good traffic access to National Highway Route 16, Daisan Keihin Road, and Metropolitan Expressway. Also, it is in an advantageous location where residents integrate as a bed town, good for securing a workforce. 8

9 IIF Atsugi Manufacturing Center (land with leasehold interest) (1) Summary of Property Type of asset Anticipated acquisition date (Note 1) Anticipated acquisition price Appraisal value Appraiser Anticipated date of trust beneficiary (Note 2) rights set (Note 2) Trustee Anticipated trust (Note 2) period end Location (address) (Note 3) Trust beneficiary right in (Note 4) real estate April 2, ,940 million yen 5,180 million yen Daiwa Real Estate Appraisal Co., Ltd. April 2, 2018 Mizuho Trust & Banking Co., Ltd. April 30, 2028 Land area 2 (Note 5) 64, m Zoning FAR/buildingtolan d ratio Summary of building structure evaluation Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) 11, Atsugi Morinosato Higashi District Land Readjustment Business area, Kanagawa, Japan., etc. (Lot number) 857, Shimofurusawa Aza Momijiyama, Atsugishi, Kanagawa, Japan., etc. Industrial area 200%/60% Type of Possession (Note 6) Usage Building structure / stories Completio Earthquake PML n Gross floor Collateral area None conditions Type of building This property is reserved land under the Atsugi Morinosato Higashi District Land Readjustment Business of the Atsugi Urban Redevelopment Project, which is to be carried out by Atsugi Morinosato Higashi District Land Readjustment Association and is scheduled to be completed by the end of the fiscal year Since any property right of reserved land shall not be obtained until the following day of the date of public notice on land substitution under the Land Readjustment Act (Act No. 119 of 1954, as amended), IIF will neither be allowed to obtain the property right of such reserved land or to register the transfer of such property right until the following day of the date of public notice on land substitution. Any transfer of the reserved land requires approval of the Atsugi Morinosato Higashi District Land Readjustment Association. Boundaries of this property will be eventually determined at the time of land substitution. Special notes If IIF transfers this property, or grants any security or usufruct over this property or rights regarding this property, IIF is required to gain approval of the Atsugi Morinosato Higashi District Land Readjustment Association (which shall not reserve or reject such approval unreasonably, and shall cooperate with the procedures necessary for such transfer). It is provided that Ichikoh Industries, Ltd. may, if a building is constructed on the subject land and a building lease agreement in which the company is specified as a lessee is executed regarding such building, make an offer of purchase the subject land to IIF when three years pass since the commencement of leasing under the relevant building lease agreement and every three years since then. IIF must give prior notification to Ichikoh Industries, Ltd. if it sells the subject land to any third party. If Ichikoh Industries, Ltd. offers to purchase the subject land to IIF within 20 days of receipt of such notification, it may have priority on consultations with IIF on a sale and purchase price and other 9

10 conditions for 30 days from such offer, and IIF shall make consultation in good faith. (Note 1) Anticipated acquisition date is the delivery date with regard to the property expected as of today. (Note 2) Anticipated date of trust beneficiary rights set, Trustee, and Anticipated trust period end are the dates for setting the real estate trust beneficiary right expected as of today. (Note 3) Based on the certificate of registration ledger items of reserved land rights. (Note 4) As of today, IIF has executed an agreement concerning status succession between a business company in Japan regarding IIF Atsugi Manufacturing Center (land with leasehold interest). Under such agreement IIF will succeed the status as a buyer in the real estate sales and purchase agreement for this property from a business company in Japan. Under this agreement, in the case of the buyer and seller amending this agreement into an agreement for sale and purchase of the trust beneficiary rights for the land, or when carrying out necessary procedures such as executing amendment to the agreement for that purpose, the parties shall consult in good faith. Since IIF intends to acquire the land as trust beneficiary rights and plans to consult regarding the amendment to the agreement into an agreement for sale and purchase of the trust beneficiary rights after IIF succeeds the status as a buyer pursuant to the agreement on status succession, the property is classified as trust beneficiary right in real estate. However, in the case where consultation with the seller is not successful, there is a possibility that IIF would acquire the land as a real estate. (Note 5) Based on the plan as of February 2018, which may be updated after consultation with relevant authorities. (Note 6) Ownership of the underlying land will be transferred to the trustee on the following day of the date of public notice on land substitution. (2) Description of Leases Relating to Anticipated Acquisitions As of the date of this news release, IIF and IBJ Leasing Company, Limited. agree to execute the lease contract for temporary use of land and the contract establishing fixedterm leasehold for business purposes outlined as below respectively, based on the agreement concerning the execution of the lease contract for temporary use of land and the contract establishing fixedterm leasehold for business purposes. <Outline of the Agreement on Execution of the Lease Contract for Temporary Use of Land (Note 1) > Tenant(s) IBJ Leasing Company, Limited. Number of tenant(s) 1 Total leased area (occupancy rate) 64, m 2 (100%) Annual rent (excluding consumption tax) Not disclosed (Note 2) Revision of rent or termination during the lease period Contract Type: Lease contract for temporary use of land Contract Renewal and Revision: There are no provision on midterm cancellation and rent revision. Period of contract 1.2 years (from April 2, 2018 (Note 3) until May 31, 2019) Deposit Not disclosed (Note 2) (Note 1) Matters agreed under the fixedterm land lease agreement to be executed between IIF and IBJ Leasing Company, Limited. are outlined, as IBJ Leasing Company, Limited. will construct a building on the subject land after such land is acquired by IIF. (Note 2) IIF has not obtained the necessary permission from the lessee to disclose this information. (Note 3) The period of contract will end on the same day as the scheduled date of completion of the building. If the completion of the building gets behind schedule, the lease period will be extended. 10

11 <Outline of the Agreement on Execution of the Contract Establishing Fixed Term Leasehold for Business Purposes (Note 1) > Total leased Annual rent Number area (excluding Tenant(s) of Period of contract Deposit (occupancy consumption tenant(s) rate) tax) IBJ Leasing Company, Limited. 1 64, m 2 (100%) Not disclosed (Note 2) Revision of rent or termination during the lease period 30 years (from May 31, 2019 (Note 3) until May 30, 2049) Not disclosed (Note 2) Contract type: Fixedterm leasehold for business purposes Renewal and Revision: Rent shall not be revised during the period of contract. However, the lessor and the lessee may discuss potential revision of rent if there are material fluctuations in economic conditions, etc. The period of this contract shall not be extended because of renewal thereof (including renewal upon request or due to continued use of land) and construction of a building. Provided, however, that a new contract establishing fixedterm leasehold may be executed if any agreement is reached upon mutual consultation. If the lessee gives a written notification to the lessor for requesting renewal of the contract from one year prior to the two year before the expiry thereof (the Notification of Request for Renewal ), the lessor and the lessee shall hold discussions about any execution of renewed contract until the date one year before the expiry thereof. The lessor shall not enter into any lease contract regarding the subject land (regardless of whether such agreement is intended for business use or not, and any preliminary agreement thereof) with any other party than the lessee during such discussions. The lessor shall also, upon receipt of the Notification of Request for Renewal, give the lessee priority over other potential lessees to negotiate and hold discussions about land lease until the date one year before the expiry of this contract. Other: None (Note 1) Matters agreed under the contract establishing fixed term leasehold for business purposes to be executed between IIF and IBJ Leasing Company, Limited after IBJ Leasing Company Limited constructs a building on the subject land are outlined. (Note 2) IIF has not obtained the necessary permission from the lessee to disclose this information. (Note 3) The period of the contract will commence on the same day as the scheduled date of completion of the building. If the completion of the building delays, the commencement of leasing contract will also be delayed. (3) Reasons for the Acquisition Acquisition Highlights Development project based on the identified needs of Ichikoh Industries, Ltd., a manufacturer of lamps and other auto parts, to set up a new manufacturing plant on an offbalance basis. Firstever offbalance sheet development project of a manufacturing plant (Note 1) using our accumulated knowhow in which IIF involves. Acquired important base via CRE proposal to reflect new facility demand of Ichikoh Industries, Ltd by the scheme of offbalance development collaborating with the lease company. IIF will acquire the subject land at the commencement of construction work, identifying needs for new construction of a plant on an offbalance basis. IIF has Preferential Negotiation Rights (Note 2) for the building. The location of the subject land is where Ichikoh Industries, Ltd., a subsidiary of Valeo Group that is a major automotiveparts supplier operating globally located in 32 countries, plans new factory. 11

12 Ichikoh Industries, Ltd., a subsidiary of Valeo Group, holding a leading share in the domestic market of LED for auto head lamps, will set up a new plant as a head lamp production site on this property, as more and more auto head lamps use LED lamps as a light source. (Note 1) Offbalance sheet development project indicates a project implemented by a company that wants to develop a facility while maintaining its financial soundness, in which it has a third party owning land and buildings during and after completion of the project but engages itself in development of the facility for its own use, and then uses the developed facility after completion. During the whole process of such project, neither the land nor buildings to be developed is recorded on the company s balance sheet. The same shall apply hereinafter. (Note 2) Although IIF has obtained preferential negotiation rights with respect to the acquisition of the building, no decision has been made with respect to acquisition, and IIF cannot assure that IIF will be able to acquire the building in the future as of today. Longterm Usability (Likelihood of Longterm Use by Current Tenant) The new factory of Ichikoh Industries, Ltd., the 114 years old manufacture of automotiveparts including head lamp will be the base plant for automotive head lamp, their main product. Production function is planned to be transferred gradually from Isehara manufacturing plant. Scheduled to execute a 30 year fixedterm business lease agreement with the land lessee after completion. Versatility (Versatility as a Real Estate Asset) <Location> Situated on newly developed land within the industrial park, allowed for 24 hours operation. Located approximately 7.0km from Tomei Expressway Atsugi IC, good accessible to central of west Tokyo and Kawasaki/Yokohama via National Route 246. <Facilities> New building has high versatility as an industrial real estate building; scheduled to be equipped with span length approximately 16m 12m, minimum beams under effective height approximately 6.7m, and floor load 1.5t / m 2. 12

13 IIF Itabashi Logistics Center (40% coownership interest) (1) Summary of Property Type of asset Anticipated acquisition date (Note 2) Anticipated acquisition price Appraisal value Appraiser Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) Trust beneficiary right in (Note 1) real estate March 8, million yen 756 million yen CBRE K.K. May 31, 2007 Mizuho Trust & Banking Co., Ltd. March 31, 2028 Land area 2, m 2 Zoning FAR/buildingtola nd ratio Type of Possession Summary of building structure evaluation Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcomin g 12 years (annualize d average) 283, Higashisakashita 2chome, Itabashiku, Tokyo, Japan., etc. Restricted industrial area 200%/60% Ownership Building structure / stories Earthquake PML 5.8% Completion May 18, 2007 Collateral conditions None Gross floor area Type of building Tokyo Marine & Nichido Risk Consulting Co., Ltd. December 6, yen 0 yen 34,782,000 yen 2,898,000 yen 4story steel structure with galvanized steel sheet roof 5, m 2 Warehouse Special notes None (Note 1) IIF acquired a 60% coownership interest in this property (acquisition price: 1,031 million yen) on February 20, 2017, and will acquire the remaining 40% coownership interest in this property after this offering. (Note 2) Anticipated acquisition date is the delivery date with regard to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Higashi Twenty One Co., Ltd. 1 5, m 2 (100%) Not disclosed Period of contract 20 years (from May 31, 2007 until May 31, 2027) Deposit Not disclosed 13

14 Revision of rent or termination during the lease period Contract Type: Other type of building lease (futsu tatemono chintaishaku keiyaku) Contract Renewal and Revision: The rent may be revised upon mutual agreement after three years have elapsed since the commencement date of the lease period, and every three years subsequently, if there are material fluctuations in prices, taxes and other dues imposed on land and buildings, rents of the surrounding land and buildings, or other economic conditions. The lease agreement may be renewed upon mutual agreement six months prior to the expiry date of the lease agreement. The lessee may not terminate the lease agreement until ten years have elapsed since the commencement date of the lease period. The lessee shall pay the relevant amount of rent to the lessor from the month which includes the scheduled date of termination thereof to May 31, 2017 as penalty charges, if the lessee terminates the lease agreement at the lessee s convenience before ten years have elapsed since the commencement date of the lease period. From June 1, 2017, the lessee may terminate the lease agreement without paying termination fees, by giving the lessor six months advance written notice. Rent specified in this agreement shall remain unchanged for three years following the commencement date of the lease period. Other: None IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Longterm Usability (Likelihood of Longterm Use by Current Tenant) The property, constructed based on the premise of the tenant s occupation, functions as a key logistics base of the tenant s 3PL (third party logistics) operation, under the name of Tokyo Integrated Logistics Center 3PL (third party logistics) is a company s use of third party businesses to outsource elements of such company s distribution and fulfillment services. Highdegree of continuity backed by the longterm contract of 20 years (remaining term of rent 9.2 years) Versatility (Versatility as a Real Estate Asset) <Location> Logistics hub located in northern Tokyo near the Outer Tokyo Beltway, with good access to National Route 17 and Metropolitan Expressway No.5 Ikebukuro Route <Facilities> Specifications offering versatility as an urbantype distribution site, as represented by floor load and ceiling height 14

15 IIF Osaka Suminoe Logistics Center I (25% coownership interest) (1) Summary of Property Type of asset Anticipated acquisition date (Note 2) Anticipated acquisition price Appraisal value Appraiser Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) Trust beneficiary right in (Note 1) real estate March 8, ,025 million yen 3,500 million yen The Tanizawa Sogo Appraisal Co., Ltd. March 21, 2017 Sumitomo Mitsui Trust Bank, Limited March 31, 2028 Land area 35, m 2 Zoning FAR/buildingtola nd ratio Type of Possession Earthquake PML 4.8% Collateral conditions Summary of building structure evaluatio n Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) Tokyo Marine & Nichido Risk Consulting Co., Ltd. November 23, yen 0 yen 1034, Shibatani 1chome, Suminoeku, Osakashi, Osaka, Japan., etc. Restricted industrial area 200%/60% Ownership None Building structure / stories Completi on Gross floor area Type of building 192,435,000 yen 16,036,000 yen Main building:6story steel structure with alloy plated steel sheet roof Annex 1:1story steel structure with alloy plated steel sheet roof Annex 2:1story steel structure with alloy plated steel sheet roof March 31, , m 2 Main building:warehouse and office Annex 1:Garbage storage Annex 2:Guard office Special notes Servitude is established for part of the subject land (3, m 2 ) for the purpose of passing through the relevant land.. (Note 1) IIF acquired a 75% coownership interest in this property (acquisition price: 9,075 million yen) on March 21, 2017, and will acquire the remaining 25% coownership interest in this property after this offering. (Note 2) Anticipated acquisition date is the delivery date with regard to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Toshiba Logistics Corporation 1 52, m 2 (100%) Not disclosed Period of contract 20 years (from March 31, 2006 until March 30, 2026) Deposit Not disclosed 15

16 Revision of rent or termination during the lease period Contract Type: Fixedterm leasehold Contract Renewal and Revision: Rent may be revised upon consultation, in consideration of economic conditions, etc. Rent may be revised every three years upon consultation after ten years have passed since the commencement date of the lease period. The lessee may not apply for any midterm termination for ten years since the commencement date of the lease period and may cancel the agreement on one year s written notice after ten years have passed. Other: None IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Acquisition Highlights Acquired logistics facility in favorable locations in the Osaka waterfront area, which is close to both Osaka city center and the industrial area, and provides good traffic access through expressways and railways. Longterm Usability (Likelihood of Longterm Use by Current Tenant) Highdegree of continuity backed by the longterm contract of 20 years (from March 31, 2006 until March 30, 2026) Hub for logistics in western Japan, functioning a role as a warehouse of home appliances Versatility (Versatility as a Real Estate Asset) Advantageous location for both land and sea transportation: it is approximately 2.3km from the closest expressway interchange and approximately 5km from Osaka Nanko Container Wharf, located in an area designated as a restricted industrial zone in which 24hour operations are allowed Sought after largescale, functional logistics facility with strong market competitiveness <Location> Distribution hub located in an area adjacent to Osaka City, the center of consumption in the Kansai area Capability to distribute not only to Central Osaka but also to wider Kansai area Location with good transportation No problem with securing workforce for the work in the facility A restricted industrial zone which allows 24hour operations <Facilities> Two exits and truck berths on the east, west and north faces on the first floor Floor plan focusing on distribution efficiency Two freight elevators and 10 vertical conveyers, and effective ceiling height of about 6 m Floor loading capabilities of about 1.5 t/m 2 16

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18 IIF Osaka Suminoe Logistics Center II (25% coownership interest) (1) Summary of Property Type of asset Anticipated acquisition date (Note 2) Anticipated acquisition price Appraisal value Appraiser Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) Trust beneficiary right in (Note 1) real estate March 8, million yen 683 million yen The Tanizawa Sogo Appraisal Co., Ltd. March 21, 2017 Sumitomo Mitsui Trust Bank, Limited March 31, 2028 Land area 7, m 2 Zoning FAR/buildingtola nd ratio Type of Possession Earthquake PML 3.9% Collateral conditions Summary of building structure evaluatio n Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) Tokyo Marine & Nichido Risk Consulting Co., Ltd. November 23, yen 0 yen 1020, Shibatani 1chome, Suminoeku, Osakashi, Osaka, Japan., etc. Restricted industrial area 200%/60% Ownership None Building structure / stories Completi on Gross floor area Type of building 130,921,000 yen 10,910,000 yen 5story steel structure with galvanized steel sheet roof July 10, , m 2 Warehouse and office Special notes None (Note 1) IIF acquired a 75% coownership interest in this property (acquisition price: 1,905 million yen) on March 21, 2017, and will acquire the remaining 25% coownership interest in this property after this offering. (Note 2) Anticipated acquisition date is the delivery date with regard to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Toshiba Logistics Corporation 1 12, m 2 (100%) Not disclosed Period of contract 1 year (from September 1, 2017 until August 31, 2018) Deposit Not disclosed 18

19 Revision of rent or termination during the lease period Contract Type: Other type of building lease (futsu tatemono chintaishaku keiyaku) Contract Renewal and Revision Rent shall not be revised during the lease period. However, the rent may be revised upon consultation between the lessor and the lessee during the lease period if it is expressly considered that the rent is not at a proper level because of tax revisions with regard to the property and the subject land and other increase or decrease in public dues, comparisons with rents of similar properties in the neighborhood and rapid changes in economic conditions, etc. The lease agreement will be automatically renewed for one year period unless otherwise either party has manifested a different intention. Other: None IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Acquisition Highlights Acquired logistics facility in favorable locations in the Osaka waterfront area, which is close to both Osaka city center and the industrial area, and provides good traffic access through expressways and railways Longterm Usability (Likelihood of Longterm Use by Current Tenant) Hub for both domestic transportation and export, functioning as a warehouse of semiconductor products Versatility (Versatility as a Real Estate Asset) <Location> Advantageous location for both land and sea transportation: it is approximately 2.1km from the closest expressway interchange and approximately 5km from Osaka Nanko Container Wharf, located in an area designated as a restricted industrial zone in which 24hour operations are allowed Location within walking distance from Kitakagaya Station of the Osaka Municipal Subway Yotsubashi Line that is surrounded by residential area, which allows the tenant to secure workforce Located in an area adjacent to Osaka City, the center of consumption in the Kansai area Capability to distribute not only to Central Osaka but also to wider Kansai area <Facilities> One exit Truck berth on the south face on the 1 st floor 1 freight elevator and 3 vertical conveyers Effective ceiling height of about 6 m Floor loading capacity of 2.0 t/m 2 on the 1 st floor, 1.0 t/m 2 on the 2 nd floor through 4 th floor Standard type as logistics warehouse 19

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21 IIF Sapporo Logistics Center (1) Summary of Property Type of asset Anticipated acquisition date Anticipated acquisition price Appraisal value Appraiser Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) Trust beneficiary right in real estate March 8, ,480 million yen 2,600 million yen Daiwa Real Estate Appraisal Co., Ltd. August 31, 2012 Sumitomo Mitsui Trust Bank, Limited March 31, 2028 Land area 12, m 2 Zoning FAR/buildingtola nd ratio Type of Possession Earthquake PML 2.0% Collateral conditions Summary of building structure evaluatio n Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) ERI Solution Co., Ltd. September 28, yen 0 yen 43,330,000 yen 3,610,000 yen 21, Yonesatosanjo 3chome, Shiroishiku, Sapporoshi, Hokkaido, Japan Semiindustrial area 200%/60% Ownership None Building structure / stories Completi on Gross floor area Type of building 2story steel structure with galvanized steel sheet roof May 14, , m 2 Warehouse Special notes None Anticipated acquisition date is the delivery date with regard to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Nippon Express Co., Ltd. 1 13, m 2 (100%) Not disclosed Period of contract 7 years (from June 1, 2017 until May 31, 2024) Revision of rent or termination during the lease period Deposit Not disclosed Contract Type: Fixedterm leasehold Contract Renewal and Revision: Neither the lessor nor the lessee may terminate nor cancel the lease agreement during the lease period. The lessee may terminate the lease agreement before the expiry by paying the relevant amount of rent for the remaining period from the date of midterm cancellation or midterm termination till the expiry date, calculated based on the original rent as well as a month s original rent, to the lessor 21

22 The lessor, only when lessee agrees, can terminate the contract by paying an amount equivalent to 6 months rent. Rent may be revised upon consultation due to major fluctuations in economic conditions and rent of properties in the neighborhood. Others: None IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Longterm Usability (Likelihood of Longterm Use by Current Tenant) Important distribution base of major beverage manufacture group covering Sapporo city and Hokkaido area. Concluded a longterm stable fixedterm lease contract for a period of 7 years. Versatility (Versatility as a Real Estate Asset) <Location> Located approximately 8 km (20 mins by car) from Sapporo city, the largest consumption area in Hokkaido, good access to the city center and logistics hubs of the region. Center point for all transportation (air and sea). Located near Hokkaido Expressway Sapporo IC, allowing good access to Tomakomai Port and New Chitose Airport. <Facilities> Parking lots for car commuters. Located in manufacturing and logistics concentrated area, allowing 24 hours operation. 22

23 IIF Hitachinaka Port Logistics Center (land with leasehold interest) (1) Summary of Property Type of asset Real estate Anticipated acquisition date March 9, 2018 Anticipated acquisition price Appraisal value 1,145 million yen 1,210 million yen Daiwa Real Estate Appraisal Appraiser Co., Ltd. Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) Land area 20, m 2 Zoning FAR/buildingtola nd ratio Type of Possession Earthquake PML Collateral conditions Summary of building structure evaluatio n Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) 76842, Terunuma aza nagisa, Tokaimura oaza, Nakagun, Ibaraki, Japan., etc. Semiindustrial area 200%/60% Ownership None Building structure / stories Completi on Gross floor area Type of building Special notes None Anticipated acquisition date is the delivery date with regard to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Aono Sangyo Corporation 1 20, m 2 (100%) Not disclosed Period of contract 30 years (from September 22, 2017 until September 20, 2047) Revision of rent or termination during the lease period Deposit Not disclosed Contract Type: Fixedterm leasehold for business purposes Contract Renewal and Revision: The rent shall not be revised in principle. However, the lessor or the lessee may request an increase or decrease of rent if rent is significantly apart from a reasonable range due to major fluctuations in economic conditions, public dues and rent of properties in the neighborhood. The agreement cannot be terminated during the contract period in principle. However, it can be terminated during 23

24 the term when the lessee finds a third party who wishes to rent instead of the lessee and conclude a new fixedterm business lease contract that satisfies the lessor. Other: None IIF has not obtained the necessary permission from the lessee to disclose this information. 24

25 (3) Reasons for the Acquisition Acquisition Highlights <Privately negotiated deal> Longterm fixedterm leasehold for business purposes contract for the land of warehouse which plays an important role by storing imported rice and emergency rice stocks under the policy of Japanese government Located in a versatile area, situated within Hitachinaka port district of Ibaraki Port, which is the gateway to North Kanto and the base of the companies for export industries, such as Hitachi Construction Machinery Co., Ltd. and Komatsu Ltd., etc. Longterm Usability (Likelihood of Longterm Use by Current Tenant) Long term contract for a period of 30 years (noncancellable) Available for broad use demand, located in Hitachinaka port district of Ibaraki Port and used for storing imported rice including government s emergency rice stocks, soybeans produced in Ibaraki and other food. Providing a stable and sustainable supply of rice by importing government s minimum access rice and by storing government s emergency rice stocks in a lean year, etc. Minimum access rice refers to imported rice that minimum import volume is agreed in 1993 at the Uruguay Round negotiation for General Agreement on Tariffs and Trade (GATT). Versatility (Versatility as a Real Estate Asset) <Location> Located in Hitachinaka port district of Ibaraki Port designated as an important port, and warehouse, distribution/process facilities, and waste disposal facilities can be constructed in the harbor/commercial port area of the district. Approximately 3 km from Hitachinaka Port IC of Hitachinaka Toll Road, easy access to north Kanto. With the whole line opening of the KitaKanto Expressway and opening of all sections of Metropolitan Intercity Expressway within Ibaraki (Feb. 2017), role as a gateway to north Kanto can be expected. 25

26 IIF Koriyama Logistics Center (1) Summary of Property Type of asset Anticipated acquisition date Anticipated acquisition price Appraisal value Appraiser Date of trust beneficiary rights set Trustee Anticipated trust period end Location (address) Trust beneficiary right in real estate March 9, ,585 million yen 3,160 million yen The Tanizawa Sogo Appraisal Co., Ltd. March 16, 2017 Sumitomo Mitsui Trust Bank, Limited March 31, 2028 Land area 26, m 2 Zoning FAR/buildingtola nd ratio Type of Possession Earthquake PML 2.8% Collateral conditions Summary of building structure evaluatio n Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) Tokyo Marine & Nichido Risk Consulting Co., Ltd. January 19, yen 0 yen 0 yen 0 yen 213, Aza Mukaihara, Otsukimachi, Koriyamashi, Fukushima, Japan Semiindustrial area 200%/60% Ownership None Building structure / stories Completi on Gross floor area Type of building Main building : 3story steel / steel framed reinforced concrete structure with alloy plated steel sheet roof Annex 1:1story steel structure with flat roof Annex 2:1story steel structure with alloy plated steel sheet roof Annex 3:1story lightweight steel structure with galvanized steel sheet roof Annex 4:1story lightweight steel structure with galvanized steel sheet roof October 31, , m 2 Office, warehouse, mechanical room, and bathroom Special notes None Anticipated acquisition date is the delivery date with regard to the property expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Nichirei Logistics Group Inc. Head Office (i) Nichirei Logistics Group Inc. Head Office (ii) , m 2 (99.1%) m 2 (0.9%) Not disclosed Not disclosed Period of contract 20 years (from November 1, 2005 until October 31, 2025) 16.1 years (from October 10, 2009 until October 31, 2025) Deposit Not disclosed Not disclosed 26

27 Revision of rent or termination during the lease period Nichirei Logistics Group Inc. Head Office (i) Contract Type: Fixedterm leasehold Contract Renewal and Revision: Lessor shall offer new rent revised according to changes in lessee s expense such as changes in pubic dues. The lessor and the lessee will revise rent every 5 years during the lease period, and the standards of the review shall be defined in a separate memorandum between lessor and lessee. Neither the lessor nor the lessee may terminate the lease agreement during the lease period. Lessee submit a six months prior written proposal against the lessor giving the conditions of that (i) Lessee finds a third party that lessor approves and a new lease agreement is entered into between the lessor and the third party, or (ii) if Lessee pays penalty for the remaining lease amount of unexpired lease period and returns the building to the lessor, and the lessor approves such proposal, contract may be terminated when the lessor agrees to this. Nichirei Logistics Group Inc. Head Office (ii) The same as above Others: Nichirei Logistics Group Inc. Head Office (i) The lessor and the lessee without counterparty s consent, shall not transfer to a third party or pledge as collateral its rights of this contract. The lessee shall not violate the lessor s ownership of the building by giving use to a third party. Notwithstanding the above, lessor may for the purpose of liquidation of the real estate, transfer real estate and rights to SPC and real estate investment corporation. In this case, lessor shall give lessee three months prior written notice. Lessee may reject if the there is a rational reason such as transferee being a lessee s competitor. Lessee shall bear the expenses of electricity, gas and water supply associated with the use of the building, light bulb replacement fee, utility fee due to increase in electric capacity etc. and other costs incurred due to the usage, maintenance and repair of the building. Nichirei Logistics Group Inc. Head Office (ii) The same as above IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Longterm Usability (Likelihood of Longterm Use by Current Tenant) Long term agreement for a period of 20 years (noncancelable in general) with Nichirei Logistics Group Inc. Head Office, the largest frozenfoods provider. Located near headquarter of the largest supermarket operator in Tohoku area covering its stores and its partner s stores within Fukushima. Versatility (Versatility as a Real Estate Asset) <Location> Good location for wide area distribution; approximately 2km from Tohoku Expressway Koriyama South IC, approximately 2.5km from National Route 4. Located within an industrial park where Koriyama Regional Wholesale Market and foodrelated logistic facilities locate and allowed for 24hour operation. 27

28 IIF Kobe Nishi Logistics Center (land with leasehold interest) (1) Summary of Property Type of asset Anticipated acquisition date (Note 1) Anticipated acquisition price Appraisal value Appraiser Anticipated date of trust beneficiary rights (Note 2) set (Note 2) Trustee Anticipated trust (Note 2) period end Location (address) Trust beneficiary right in real estate March 29, ,960 million yen 2,100 million yen The Tanizawa Sogo Appraisal Co., Ltd. March 29, 2018 Sumitomo Mitsui Trust Bank, Limited March 31, 2028 Land area 33, m 2 Summary of building structure evaluatio n Evaluator Evaluation date Immediate repair cost Shortterm repair cost Longterm repair cost Repair cost for the forthcoming 12 years (annualized average) 104, Mitsugaoka 4chome, Nishiku, Kobeshi, Hyogo, Japan Zoning Semiindustrial area Building FAR/buildingtola structure 200%/60% nd ratio / stories Type of Ownership Possession Completi Earthquake PML on Gross Collateral floor area conditions None Type of building A surface right will be established for this property as follows: Purpose: tunnel facilities Scope: from 132 m to 141 m above the average sea level of Tokyo Bay Period of duration: from the date of establishment of the right to Kobe City s termination of use of the tunnel facilities Land rent: free Special arrangements: (i) Consultation with the Kobe City is required before any use of land at which a sectional surface right is established, and the user of such land shall give due consideration not to interfere with the Kobe City s use of the tunnel facilities (ii) If the trust beneficiary right holder damages the tunnel facilities for the reason Special notes attributable to itself, it shall be liable for the damages. (iii) The trust beneficiary right holder shall agree not to remove the tunnel facilities even after Kobe City ends the use of these facilities. (iv) If the trust beneficiary right holder disposes of the subject land and/or sells it to any third party in the future, it shall have such third party succeed the provisions (i) through (iii) as above. Surface right holders: Kobe City Kohnan Shoji Co., Ltd. ( seller ) has agreed with the Kobe City, the current owner of the land portion of the property, to obtain written approval from the Kobe City if the seller transfers ownership, establishes superficies or other usufruct, establishes collaterals such as pledge or mortgages, establishes leasehold or establishes other rights of use within the 10year period 28

29 from the execution date of the purchase and sale agreement (February 9, 2018), and the trustee shall succeed such agreement from the seller. The seller will obtain such approval from the Kobe City for acquisition of the property. The seller has agreed with the Kobe City, the current owner of the land portion of the property, that if the seller breaches obligations under the purchase and sales agreement such as limitation of usage, within the 10year period from the execution date of the purchase and sale agreement (February 9, 2018), the Kobe City shall exercise the right to buy back the subject land, and the trustee shall assume such agreement. However, after payment and transfer of the subject land pursuant to the agreement between Kobe City and the seller, this agreement is expected to lose effect before IIF acquires the subject property. (Note 1) Anticipated acquisition date is the delivery date with regard to the property expected as of today. (Note 2) Anticipated date of trust beneficiary right set, Trustee, and Anticipated trust period end are the dates for setting the real estate trust beneficiary right expected as of today. (2) Description of Leases Relating to Anticipated Acquisitions Total leased Annual rent Number area (excluding Tenant(s) of (occupancy consumption tenant(s) rate) tax) Kohnan Shoji Co., Ltd 1 33, m 2 (100%) Not disclosed Period of contract 20 years (from March 29, 2018 until March 28, 2038) Revision of rent or termination during the lease period Deposit Not disclosed Contract Type: Fixedterm leasehold for business purposes Contract Renewal and Revision: Rent shall not be revised during the lease period. In the event where economic conditions rapidly change, the lessor and the lessee shall consult regarding rent revision. The lessee may not apply for any midterm termination for fifteen years since the commencement date of the lease period and may cancel the agreement on two year s notice after fifteen years have passed. Others: None IIF has not obtained the necessary permission from the lessee to disclose this information. (3) Reasons for the Acquisition Acquisition Highlights <Privately negotiated deal> Dual project with a mixture of our second PRE (Public Real Estate) proposal to Kobe City and CRE proposal for Kohnan Shoji Co., Ltd. Located in a good accessible area as a distribution base to a wide area. Scheduled to conclude a contract establishing fixedterm leasehold for business purposes of 20 years with the tenant (noncancellation period of 17 years). Longterm Usability (Likelihood of Longterm Use by Current Tenant) Located within Kobe Techno Logistics Park, which is an industrial complex in Kobe City Nishiku. Important facility of Kohnan Shoji Co., Ltd. as a logistics center in western Japan, completed in February Sustainable for business use for 20 years (noncancellation period of 17 years) under the terms stipulated in the contract establishing fixedterm leasehold for business purposes. 29

30 Versatility (Versatility as a Real Estate Asset) <Location> Close to Sanyo Expressway Kobe Nishi IC, good access for largesized vehicles operating 24 hours. Connected to Sanyo Expressway and Hanshin Expressway, thereby enabling far reaching distribution to Kansai, Chugoku and Shikoku regions. 30