Notice concerning Acquisition of Assets (Execution of Agreement)

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. August 10, 2010 REIT Issuer: DA Office Investment Corporation 2-1, Ginza 6-chome, Chuo-ku, Tokyo Representative: Yoshiki Nishigaki, Executive Director (Stock Code No.: 8976) Asset Manager: Daiwa Real Estate Asset Management Co. Ltd. Representative: Akira Yamanouchi, President and Representative Director Inquiries to: Yoji Ueda, Director and Head of Finance Department Tel: Notice concerning Acquisition of Assets (Execution of Agreement) We hereby give notice that today DA Office Investment Corporation (the Investment Corporation ) determined to acquire a trust beneficial interest in real estate (the Trust Beneficial Interest ) as follows. 1. Summary of Assets to be Purchased Type of Assets Trust beneficial interest in real estate Property Name Kyodo Building (Nishi-Shimbashi) (Note 1) Location 2-1, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo Acquisition Price JPY5,000,000,000 (excluding costs of acquisition, consumption tax, etc.) Date of Execution of Purchase Agreement August 10, 2010 Date of Delivery (scheduled) August 13, 2010 Seller Japan Core Asset II Ltd. (the Seller ) Funding for Acquisition Allocation of cash reserves Payment Method Lump-sum payment at the time of delivery Intermediary The Sumitomo Trust & Banking Co., Ltd. (Note 1) The name of the building is scheduled to be changed after the acquisition. The name after such change has not yet been determined. 1

2 2. Reason for Acquisition Under the basic policy for the asset management and the management policy of the Investment Corporation set forth in its Articles of Incorporation, we believe that the inclusion of the property to be purchased which is located in the five central wards of Tokyo to our invested assets would contribute to the enhancement of the unitholder value, as well as to the stabilization and the enhancement of our portfolio. The Asset Manager has determined the acquisition of the target property in appreciation of the following points among other factors: (1) Location of the Property: Kyodo Building (Nishi-Shimbashi) (the Property ) is within an 8-minute walk to Toranomon Station on the Tokyo Metro Ginza Line, a 9-minute walk to Kamiyacho Station on the Tokyo Metro Hibiya Line and a 9-minute walk to Onarimon Station on Tokyo Municipal Mita Line, and there are many medium-scale office buildings in the neighborhood of the Property. In neighboring areas, construction work for the improvement of Loop Highway 2 (commonly known as McArthur Road ) is currently underway and other extensive redevelopment has been started as well. As it is expected that this area would become more convenient by the further collection of large-scale, medium-scale and commercial facilities resulting from such redevelopment, in addition to the convenience of being able to access three subway stations, we consider that this area has high potential to be further developed as site for office buildings. Also, taking into account that the demand for office space in the area in which the Property is located has been showing steady development, we are of the opinion that the Property is expected to be stably operated after the acquisition. As a result of the acquisition of the Property, the ratio of the properties located in Minato-ku among all properties in our portfolio will increase from 13.1% to 14.7% and the ratio of the properties located in the five central wards of Tokyo will increase from 91.2% to 91.3% (both of which were calculated based on the acquisition price; the investment ratio of the properties located in the five central wards of Tokyo was calculated inclusive of the scheduled acquisition price for the property scheduled to be purchased, Kyodo Building (Kudan Ichigo-kan), disclosed in the Notice concerning Acquisition of Assets (Execution of Agreement) dated June 14, 2010). (2) Building Facilities: We consider that the building of the Property is a standard competitive building, taking into account that it is equipped with the specifications necessary for the use for office space (as it has 10 stories above ground and 1 below and the total floor area of approximately 2,091 tsubo, its standard floor features approximately 132 tsubo of floor space, 2,550mm of ceiling height for a standard floor and 50mm of OA floor). 2

3 3. Details of the Property to be Purchased Property Name Kyodo Building (Nishi-Shimbashi) (Note 1) Type of Specified Assets Trust beneficial interest in real estate Trustee (scheduled) Mitsubishi UFJ Trust and Banking Corporation Trust Period (scheduled) From August 13, 2010 to August 12, 2020 Location (Lot Number) 202-1, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo Use Office, Parking Lot Shops Ownership Form (i) Land: Ownership (ii) Building: Ownership Site Area 1, m2 (officially registered) Total Floor Area 6, m2 (officially registered) Structure (Description in the register book) Construction Date Building Engineer Constructor Structural-design Engineer Floor Height/Ceiling Height Air-conditioning System/OA Laying Building Inspection Agency Building Condition Research Management Company Land Pollution Research Management Company PML Level (Management Company) Flat-roofed steel-reinforced concrete construction with 10 stories above ground and 1 below July 31, 1993 (According to the register book) K.K. Ono Associated Design Office Takenaka Corporation K.K. Ono Associated Design Office 3,700 mm (for standard floor) / 2,550 mm (for standard floor) Individual air-conditioning for each floor / OA-capable floor Minato-ku, Tokyo Sompo Japan Risk Management, Inc. Sompo Japan Risk Management, Inc. 14.1% (Maeda Corporation) Purchase Price JPY5,000,000,000 (excluding costs of acquisition, consumption tax, etc.) Appraisal Value JPY5,710,000,000 Appraiser Daiwa Real Estate Appraisal Co., Ltd. Collateral None Summary of Tenants Total Number of Tenants 7 Rent Revenue JPY26,000,000 per month (In June 2010) Security Deposit and Guaranty JPY221,000,000 (As of the end of June 2010) Total Leased Floor Space 4, m2 Total Leasable Floor Space 4, m2 Occupancy Rate 85.5% (As of the end of June 2010) 3

4 Other Relevant Information An agreement to the effect that the owner of the adjoining land (Lot number: , Nishi-Shimbashi 3-chome, Minato-ku) may use a part of the land of the Property as a walkway had been concluded, and the Investment Corporation will take over such agreement at the time of the sale and purchase of the property. (Note 1) The name of the building is scheduled to be changed after the acquisition. The name after such change has not yet been determined. 4. Details of the Seller (1) Company Name Japan Core Asset II Ltd. (2) Location 56-15, Kameido 6-chome, Koto-ku, Tokyo (3) Title and Name of Koichi Yokoyama, Director Representative (4) 1. To acquire, hold, sell and purchase trust beneficial interest in real estate 2. To acquire, hold and dispose of real estate Description of Business 3. To acquire, hold, sell and purchase rights in respect of equity interests in tokumei kumiai 4. Any other services incidental or relating to the foregoing services (5) Amount of Capital JPY3 million (6) Date of Incorporation August 19, 2005 (7) Net Assets (Note 1) (8) Total Assets (Note 1) (9) Relationship with the Investment Corporation/Asset Manager Capital Relationship Personnel Relationship Business Relationship There is no special capital relationship between the Investment Corporation/Asset Manager and the Seller. There is no special personnel relationship between the Investment Corporation/Asset Manager and the Seller. There is no special business relationship between the Investment Corporation/Asset Manager and the Seller. Whether or not to be the Related Parties (Note 1) This information is not disclosed due to the Seller s request. The Seller does not fall under the related parties of the Investment Corporation/Asset Manager. Also, the affiliated persons and the affiliated companies of the Seller do not fall under the related parties of the Investment Corporation/Asset Manager. 4

5 5. Status of the purchaser, etc. The acquisition of the Trust Beneficial Interest is not an acquisition from any party having a special interest to the Investment Corporation or the Asset Manager. 6. Status of Intermediary (1) Details of the Intermediary (1) Company Name The Sumitomo Trust & Banking Co., Ltd. (2) Location 5-33, Kitahama 4-chome, Chuo-ku, Osaka-shi, Osaka (3) Title and Name of Representative Hitoshi Tsunekage, President and CEO (4) (1) To conduct trust services (2) To accept deposit or fixed-term reserve, to lend funds or to discount notes, and to conduct exchange transactions (3) To guarantee debts or underwrite notes, and to conduct any other services incidental to the banking business set forth in Item (2) above (4) To subscribe, manage offerings and secondary offering, conduct purchase and sale and other Description of Business activities permitted to be conducted by banks or trust companies under the Financial Instruments and Exchange Law in relation to national bonds, local government bonds, government-backed bonds or any other securities (5) To conduct any activities permitted to be conducted by banks or trust companies under the Secured Bonds Trust Act or other laws (6) Any other services incidental or relating to the foregoing services (5) Amount of Capital JPY342,037 million (As of the end of March 2010) (6) Date of Incorporation July 28, 1925 (7) Relationship with the Investment Corporation/Asset Manager Capital Relationship Personnel Relationship There is no special capital relationship between the Investment Corporation/Asset Manager and the Intermediary. There is no special personnel relationship between the Investment Corporation/Asset Manager and the Intermediary. 5

6 Business Relationship Whether or not to be the Related Parties There is no special business relationship between the Investment Corporation/Asset Manager and the Intermediary. The Intermediary does not fall under the related parties of the Investment Corporation/Asset Manager. Also, the affiliated persons and the affiliated companies of the Intermediary do not fall under the related parties of the Investment Corporation/Asset Manager. (2) Breakdown and Amount of Intermediary Charge Information about the intermediary charge for the acquisition of the Property is not disclosed due to the intermediary s request. 7. Acquisition Schedule Date of Determination of Acquisition August 10, 2010 Date of Execution of Purchase Agreement August 10, 2010 Scheduled Payment Date August 13, 2010 Scheduled Delivery Date August 13, Outlook The acquisition of the Trust Beneficial Interest would be unlikely to have a significant impact on the investment status for the Fiscal Periods Ending November 2010 (From June 1, 2010 to November 30, 2010) and May 2011 (From December 1, 2010 to May 31, 2011), and no change will be made to the investment status forecasts for the Fiscal Periods Ending November 2010 and May 2011, which were announced in the Financial Report (kessan tanshin) for the Fiscal Period Ended May 2010 (From December 1, 2009 to May 31, 2010). - End - 6

7 Reference Material 1 Summary of Appraisal Report Appraiser Daiwa Real Estate Appraisal Co., Ltd. Appraisal Date June 30, 2010 Appraised Value JPY5,710 million Items (Yen) Grounds, etc. Income Approach Value 5,710,000,000 Direct Capitalization Value 5,780,000,000 (1) Operating Revenue (a+b-c) (Note 1) 396,819,297 a. Annual Rent Revenue 375,570,600 b. Other Revenue 49,908,385 c. Amount of Loss due to Vacancy 28,659,688 (2) Operating Expenses (Note 1) 102,228,035 (3) Net Operating Revenue (NOI=(1)-(2)) (Note 1) 294,591,262 (4) Profit from Managing Guaranty, etc. 4,697,683 (5) Capital Expenditures 10,520,300 (6) Net Revenue (NCF=(3)+(4)-(5)) (Note 1) 288,768,645 Cap Rate 5.0% Discounted Cash Flow Value 5,680,000,000 Discount Rate 4.7% Terminal Cap Rate 5.2% Integrated Value by Using Cost Method 3,550,000,000 Ratio of Land 69.9% Ratio of Building 30.1% Inclusive of the amount of common service charges Inclusive of the amount of utility charges, revenue from parking lot, revenue from exclusive cleaning services, etc. (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. 7

8 Reference Material 2 Status of Income and Expense (Income and Expense Outlook for the Property) (Millions of yen) A. Expected Rent Business Revenue 368 B. Expected Rent Business Expenses (excluding the allowance for depreciation) 92 C. Expected NOI (A - B) 276 Assumptions for Expected Income and Expense 1. The above-mentioned figures are the expected annual amounts for the period unaffected by any specific factor as to the fiscal period during which the relevant acquisition is performed. 2. The above-mentioned revenue takes into account certain loss due to vacancy from the full occupancy in rooms and parking lots. 3. The above-mentioned expense is inclusive of the management service fee, taxes and public charges, repair expenses, insurance premium, etc. 8

9 Reference Material 3 Photograph / Map < External View > <1 st Floor Entrance> < Map > Toranomon St. Uchisaiwaicho St. Hotel Okura JR Shinbashi St. Kamiyacho St. Atago Green Hills. kyodo Building(Nishi-shimbashi) Onarimon St. 9

10 Reference Material 4 Portfolio Overview after Acquisition of the Property Region Name of Property Date of (Scheduled) Acquisition Five Central Wards of Tokyo (Note 1) Acquisition (or scheduled) Price (million yen) (Note 4) Investment Ratio (%) (Note 5) davinci Ginza October 21, , davinci Ginza Annex October 21, , Daiwa Shibaura October 21, , Daiwa Minami-Aoyama October 21, , Daiwa Sarugakucho October 21, , Daiwa A Hamamatsucho October 21, , Daiwa Jingumae October 21, , Daiwa Shibadaimon October 21, , Daiwa Misakicho October 21, , Daiwa Shimbashi 510 October 21, , BPS Square January 27, , Daiwa Tsukiji January 27, , Daiwa Tsukiji 616 March 24, , Daiwa Tsukishima March 24, , Nihombashi MS Bldg. May 1, , Daiwa Azabudai May 1, , Daiwa Shibuya SS May 1, , Daiwa Nihombashi Honcho July 31, , Daiwa Ginza 1-chome July 31, , Daiwa Kyobashi July 31, , Sunline Building No. 7 October 6, , Daiwa Onarimon December 1, , Shinjuku Maynds Tower July 13/November 26, , SHIBUYA EDGE July 13, , Daiwa Kodenmacho August 31, , Daiwa Jumbocho March 10, , Any date to be agreed upon by the Kyodo Building (Kudan Ichigo-kan) seller and the Investment Corporation (by September 13, 2010) 4, Kyodo Building (Nishi-Shimbashi) August 13, 2010 (Scheduled) 5, Total Number of Properties located in Five Central Wards of Tokyo: , Greater Tokyo (Note 2) Daiwa Kinshicho October 21, , Daiwa Higashi-Ikebukuro October 21, , Benex S-3 May 1, , Daiwa Shinagawa North July 13, , Total Number of Properties located in Greater Tokyo: 4 19,

11 Regional Major Cities (Note 3) (Note 1) (Note 2) (Note 3) (Note 4) (Note 5) (Note 6) Daiwa Minami-Senba August 31, , Total Number of Properties located in Regional Major Cities: 1 4, Total Number of Properties: , Five Central Wards of Tokyo means Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku. Greater Tokyo means Tokyo, Kanagawa, Chiba and Saitama Prefectures (excluding the Five Central Wards of Tokyo). Regional Major Cities means Osaka area (i.e., Osaka, Kyoto and Hyogo Prefectures), Nagoya area (Aichi and Mie Prefectures), ordinance-designated cities (Sapporo, Sendai, Niigata, Shizuoka, Hamamatsu, Okayama, Hiroshima, Kita-kyushu and Fukuoka Cities), and Hakodate, Asahikawa, Aomori, Morioka, Akita, Koriyama, Iwaki, Utsunomiya, Maebashi, Toyama, Kanazawa, Nagano, Gifu, Otsu, Nara, Wakayama, Kurashiki, Fukuyama, Shimonoseki, Takamatsu, Matsuyama, Kochi, Kurume, Nagasaki, Kumamoto, Oita, Miyazaki and Kagoshima Cities. Figures in the Acquisition (or scheduled) Price column represent the acquisition price of trust beneficial interests (excluding consumption tax, etc.) for each property. Figures in the Investment Ratio column represent the percentage of the acquisition (or scheduled) price of trust beneficial interests for each property to the aggregate amount of the acquisition (or scheduled) 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. The names of the properties may be changed from time to time, as explained in the Notice concerning Name Changes of Portfolio Properties disclosed on July 1, * The Japanese version of this press release has been distributed to the Kabuto Club (TSE Press Club), the Ministry of Land, Infrastructure, Transport and Tourism Press Club, and the Ministry of Land, Infrastructure, Transport and Tourism Press Club for Construction Publications. * Website URL of the Investment Corporation: 11