Notice concerning Acquisition of Asset (Tousen Dogenzaka Daini Building)

Transcription

1 This translation of the original Japanese notice is provided solely for information purposes. Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail. REIT Issuer: Daiwa Office Investment Corporation (Stock Code No.: 8976) Representative: Nobuaki Omura, Executive Director June 25, 2013 Asset Manager: Daiwa Real Estate Asset Management Co., Ltd. Representative: Akira Yamanouchi, President and Representative Director Inquiries to: Yuji Shinotsuka, Vice President and Representative Director (Tel: ) Notice concerning Acquisition of Asset (Tousen Dogenzaka Daini Building) We hereby announce that today Daiwa Office Investment Corporation (the Investment Corporation ) determined to acquire a trust beneficial interest in real estate (the Acquisition ) on June 25, 2013 as follows. 1. Summary of Assets to be Acquired Type of Assets Trust beneficial interest in real estate Property Name Tousen Dogenzaka Daini Building (the Property ) Location 28-1 Maruyamacho Shibuya-ku, Tokyo Acquisition Price 4,500 million yen (Excluding acquisition costs, consumption tax, etc.) Date of Execution of Purchase Agreement June 25, 2013 Date of Delivery (scheduled) July 3, 2013 Seller Not disclosed (Note 1) Funding for Acquisition Loans to be announced Payment Method Lump-sum payment at the time of delivery Intermediary Not applicable (Note 1) The Seller is a domestic special purpose company. The name is not disclosed by the seller s request. 2. Reason for Acquisition We believe that the Property is appropriate to the basic policy for the asset management set forth in the Articles of Incorporation of the Investment Corporation and the management policy of the Investment Corporation. We decided to acquire the Property because we appreciate the rarity and profitability of the Property. (1) Location of the Property: The Property is situated at the cross-point of Dogenzaka and Route 246 with a high level of visibility and is about a 9-minute walk from the Shibuya Station, the largest class terminal in central Tokyo which has multiple accessibility to JR, Tokyo Metro, Tokyu and Keio lines. A major business, commercial and hotel complex directly connected to the Shibuya Station is located within about a 3-minute walk from the Property and can be used for walk-through to the station. Good access to the Dogenzaka zone, an area of high commercial facility accumulation and popularity also enhances the Property s convenience. The Shibuya area centered around the Shibuya Station is a symbolic commercial area of Japan 1

2 which is good in traffic convenience and highly concentrated with retail stores including commercial facilities targeting young generation, restaurants, offices, hotels etc. Moreover, the neighboring areas such as Omotesando, Aoyama, Ebisu and Daikanyama also have many retail stores targeting young generation, therefore the Shibuya area has an attribution to act as a base to transmit culture and trends. As a result, we analyze that the area has relatively high needs for acquiring personnel and has strong demands for office buildings mainly from vibrant IT and media contents related industries. Furthermore, surrounding the Shibuya Station, the Shibuya Station Area, the Shibuya Station South Area and the Dogenzaka Area are planned to be redeveloped and large-scale business/commercial complex station building is scheduled to open in the future. By further enhancing its convenience, we expect the areas greater development. (2) Building Facilities: The Property is provided with 11 stories above ground and 1 below, the total floor area of 5, m2 (1, tsubo), m2 ( tsubo) of standard floor space, 2,600mm of ceiling height for a standard floor (including OA floor) and sufficient specs like individual air-conditioning. Though 25 years after its completion, managements of proper maintenance has been made and by implementing systematic replacement of facilities, we believe that the Property will maintain equivalent competitiveness compared to the surrounding competitive properties after acquisition. 3. Details of the Property to be Acquired Property Name Tousen Dogenzaka Daini Building Type of Specified Assets Trust beneficial interest in real estate Trustee (scheduled) Sumitomo Mitsui Trust and Banking Ltd. Trust Period From July 3, 2013 to July 2, 2023 Location (Lot Number) 22-1 Maruyamacho Shibuya-ku, Tokyo and other 8 lots Use Office, Store, Parking lot Ownership Form (i) Land: Ownership (ii) Building: Ownership Site Area m2 (officially registered) Total Floor Area 5, m2 (officially registered) Structure Steel, Reinforced concrete construction with 11 stories above ground and 1 below (Description in the register book) Construction Date Initial construction : March 11, 1988 Extension : October 6, 1988 (Description in the register book) Building Engineer Nikken Sekkei, Ltd. Constructor Tokyu Construction Co., Ltd. Structural-design Engineer Floor Height/Ceiling Height Air-conditioning System/OA Laying Building Inspection Agency Engineering Due Diligence Company Soil Contamination Risk Survey Company Nikken Sekkei, Ltd. 3,750 mm (for standard floor) / 2,600mm (for standard floor) Individual air-conditioning / OA-capable floor Tokyo Prefecture TOKIO MARINE & NICHIDO RISK CONSULTING Co., Ltd. Earth-Appraisal Co., Ltd. 2

3 Probable Maximum Loss Level (Assessor) 5.89% (Sompo Japan Nipponkoa Risk Management Inc.) Acquisition Price 4,500 million yen (excluding acquisition costs and consumption tax, etc.) Appraisal Value (Appraisal Date) 4,630 million yen (as of May 31, 2013) Appraiser DAIWA REAL ESTATE APPRAISAL CO., LTD Collateral None Summary of Tenants Total Number of Tenants 5 Rent Revenue Not disclosed (Note 1) Security Deposit and Guaranty Not disclosed (Note 1) Total Leased Floor Space 4, m2 (estimated as of the scheduled delivery date) (Note 2) Total Leasable Floor Space 4, m2 (Note 2) December 31, % Trend in occupancy rates December 31, % the last 5 years December 31, % (Note 2) December 31, % Scheduled delivery date 100.0% Expected NOI (NOI Yield) 208 million yen (4.6%) (Note 3) Currently a retail premises is occupying a compartment on the 1st floor of the Property which is registered as office use on the confirmation note upon construction. However a report prescribed in the provision of Article 12, paragraph (5) of the Other Relevant Information Building Standards Act has been submitted and accepted by Shibuya ward on February 13, The roads on the northeast and northwest of this Property land are defined by the Building Standards Act and part of the road being put to the use of this land is m2. (Note1) The figure is not disclosed by the related persons request. (Note 2) The above-mentioned figures are based on the data from the Seller (Note 3) The above-mentioned figures are the expected annual amounts based on leasing agreements as of the scheduled delivery date and taking into account of taxes imposed, and calculated on the assumption that the expected occupancy rate is 100.0%. (These figures are not official forecasts.) 4. Details of the Seller The Seller is a domestic special purpose company but the name of the Seller is not disclosed by the seller s request. There are no direct or indirect investments in the Seller either from the Investment Corporation, the Asset Manager, nor any related parties or associated companies of the Investment Corporation and the Asset Manager. Also, there are no capital, personal or business relationships to report between the seller s investors (including original investors) and the Investment Corporation, the Asset Manager, and any related parties or associated companies of the Investment Corporation and the Asset Manager. 3

4 5. Status of Owners etc. of Properties The acquisition of the trust beneficial interest is not an acquisition from any persons having a special interest in the Investment Corporation or the Asset Manager. 6. Status of Intermediary Not applicable. 7. Acquisition Schedule Date of Determination of the Acquisition June 25, 2013 Date of Execution of Purchase Agreement June 25, 2013 Scheduled Payment Date July 3, 2013 Scheduled Delivery Date July 3, Future Prospects We expect the impact of the Acquisition on the fiscal period ending November 2013(16th Fiscal Period) is not material. The earnings forecasts are currently being evaluated. Material facts requiring disclosure will be disclosed in a timely manner as they become apparent. - End - 4

5 Reference Material 1 Summary of Appraisal Report Appraiser DAIWA REAL ESTATE APPRAISAL CO., LTD Appraisal Date May 31, 2013 Appraised Value 4,630 million yen Items (million yen) (Note 1) Income Approach Value 4,630 Direct Capitalization Value 4,790 (1) Operating Revenue (a-b) 311 a. Potential Annual Rent Revenue 323 b. Amount of Loss due to Vacancy 12 (2) Operating Expenses (c+d+e+f) 82 c. Maintenance and Operation Cost (including cost of management, utility and PM fee) 52 d. Taxes and Public Charges 26 e. Non-life Insurance Premium 0 f. Other Expenses 3 (3) Net Operating Revenue 229 (4) Profit from deposits/guarantees, etc. 4 (5) Capital Expenditures 17 (6) Net Revenue ( (3)+(4)-(5)) 215 Capitalization Rate 4.5% Discounted Cash Flow Value 4,560 Discount Rate 4.3% Terminal Capitalization Rate 4.7% Integrated Value by Using Cost Method 4,010 Ratio of Land 81.6% Ratio of Building 18.4% (Note 1) The above revenue and expenses are based on the appraisal report and is not the revenue and expenses forecasted by the Investment Corporation or the Asset Manager. 5

6 Reference Material 2 Photograph / Map < External View > 6

7 < Map > 7

8 Reference Material 3 Portfolio Overview after Acquisition of the Property Region Five Central Wards of Tokyo (Note 1) Name of Property 8 Date of (Scheduled) Acquisition Acquisition Price (million yen) Investment Ratio (Note 4) Daiwa Ginza Oct 21, , % Daiwa Ginza Annex Oct 21, , % Daiwa Shibaura Oct 21, , % Daiwa Minami-Aoyama Oct 21, , % Daiwa Sarugakucho Oct 21, 2005/ Mar 30, , % Daiwa A Hamamatsucho Oct 21, , % Daiwa Jingumae Oct 21, , % Daiwa Shibadaimon Oct 21, , % Daiwa Misakicho Oct 21, , % Daiwa Shimbashi 510 Oct 21, , % Daiwa Tsukijiekimae (Note 5) Jan 27, , % Daiwa Tsukiji Jan 27, , % Daiwa Tsukiji 616 Mar 24, , % Daiwa Tsukishima Mar 24, , % Nihombashi MS Bldg. May 1, , % Daiwa Azabudai May 1, , % Daiwa Shibuya SS May 1, , % Daiwa Nihombashi Honcho Jul 31, , % Daiwa Ginza 1-chome Jul 31, , % Daiwa Kyobashi Jul 31, , % Sunline Building No. 7 Oct 6, 2006/ Mar 29/ May 29, , % Daiwa Onarimon Dec 1, , % Shinjuku Maynds Tower Jul 13/ Nov 26, , % SHIBUYA EDGE Jul 13, , % Daiwa Kodenmacho Aug 31, , % Daiwa Jimbocho Mar 10, , % Daiwa Nishi-Shimbashi Aug 13, , % Daiwa Kudan Sep 2, , % Daiwa Kayabacho Building Mar 25, , % Jimbocho Place Mar 29, , % E SPACE TOWER Jul 8, , % Nihonbashi Hongokucho Tosei Building May 11, , % shinyon curumu Dec 3, 2012/ Apr 12, , % Tousen Dogenzaka Daini Building Jul 3, 2013 (scheduled) 4, % Total Number of Properties located in Five Central Wards of Tokyo: , % Greater Tokyo (Note 2) Daiwa Kinshicho Oct 21, , % Daiwa Higashi-Ikebukuro Oct 21, , % Benex S-3 May 1, , % Daiwa Shinagawa North Jul 13, , % West Park Osaki Sep 18, , % Kamiooka Eye Mark Building Mar 1, , %

9 Total Number of Properties located in Greater Tokyo: 6 22, % Regional Daiwa Minami-Senba Aug 31, , % Major Cities (Note 3) Honshu Meieki Building Feb 1, , % Total Number of Properties located in Regional Major Cities: 2 10, % Total Number of Properties: , % (Note 1) Five Central Wards of Tokyo means Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku. (Note 2) Greater Tokyo means Tokyo excluding the Five Central Wards of Tokyo, Kanagawa, Chiba and Saitama Prefectures. (Note 3) Regional Major Cities means Osaka area (i.e., Osaka, Kyoto and Hyogo Prefectures), Nagoya area (Aichi, Mie and Gifu Prefectures), ordinance-designated cities and core cities under Local Autonomy Act. (Note 4) Figures in the Investment Ratio columns represent the percentage of the (scheduled) acquisition price of each property to the aggregate amount of the (scheduled) acquisition price, and are rounded to the nearest first decimal place. Please note that adding up of the investment ratio of the properties may not exactly match the investment ratio for each investment regions or for the overall portfolio. (Note 5) Former name "BPS SQUARE" has been changed to "Daiwa Tsukijiekimae" from May 1, * Website URL of the Investment Corporation: 9