Name of REIT Issuer. March 5, (TSE Code: 3295) Contact: acquisition (1) 1. Overview of the. Category (2) Property Name (3) Location

Transcription

1 Translation Purpose Only To All Concerned Parties March 5, 2015 Name of REIT Issuer Hulic Reit, Inc Hatchobori, Chuoku,, Japan Eiji Tokita, Executive Officer (TSE Code: 3295) Contact: Asset Management Company Hulic Reit Management Co., Ltd.. Eiji Tokita, Representative Director, President and CEO Kazukai Chokki, Director, General G Manager of Corporate Planning and Administration Department Tel: Notice concerning the Acquisition of Property Hulic Reit Management Co., Ltd. (hereinafter referred to as Hulic Reit Management ), which is entrusted with the management of the assets of Hulic Reit, Inc. (hereinafter referred to as Hulic Reit ), hereby announces that it has today made the decision to acquire the following property p (hereinafter referred to as Anticipated Property ). 1. Overview of the acquisition (1) Category : Commercial Property (office property) (2) Property Name : Sasazuka South Building B (3) Location : Shibuya, (Note 1) (4) Anticipated Acquisition Price : 2,100 million yenn (5) Date of Purchase and Salee Agreement : March 5, 2015 (Note 2) (6) Anticipated Acquisition Date : March 9, 2015 (7) Seller : (N ote 3) (Note 4) (8) Acquisition Funds : Borrowings and cash on hand (9) Settlement Method : Full payment upon delivery Notes: (1) Anticipated Acquisitionn Price does not include consumption orr local taxes orr the costs andd expenses related to the acquisition. (2) Anticipated Acquisitionn Date is the anticipated date of acquisition stated in the relevant purchase and sale agreement. (3) Seller is a special purpose companyy in Japan. However, we have not receivedd consent from the seller to disclose its identity. (4) For details, refer to Notice concerning the Borrowing of Funds and Executionn of Interest Rate Swap announced today. 1

2 2. Reason for acquisition In accordance with the basic policies of Hulic Reit, the purpose to acquire a Anticipated Property is to improve the portfolio. Hulic Reit Management assessed the Anticipated Property based on the following factors. (1) Characteristics of the location The Anticipated Property is located on the outer edge of the office market in the Nishishinjuku zone which is to the west of JR Shinjuku Station, one of the largest train stations in. This favorably located zone attracts many people, especially from thee residential areas in the western w regionn of and a stands out as a hub area among other office districts inn. The area around the Anticipated Property has seen a concentration of small to mediumsized With respect to officee buildings offices along the highway, and the area is included in the Nishishinjuku zone as an office market. of a certain size, rent is relatively low l comparedd to the buildings near Shinjuku Station, and demandd for such office buildings may therefore be expected from construction/housingrelated companies and ITrelated companies for their suboffices. In I addition, demand may be expectedd from companies which carry out businesses for the surrounding residential areas byy taking advantage of the characteristicss of the location. (2) Characteristics of the property The Anticipated Property is located on Koshu Kaido, an approximate 5minute walk from m Daitabashi Station of Keio Line and an approximate 7minute walk fromm Sasazuka Station of Keioo Line. As it iss located on the corner alongside the highway and maintains high level of visibility, we expect the property p to prove appealing to tenants. The Anticipated Property is a mediumsized building with a total floor area of o 1,633 tsubo, or 5,398 m 2, and a typical floor area of approximately 167 tsubo, 5522 m 2. As most of the properties in the area around the Anticipated Property are smallsized buildings with a total floor area of less than 500 tsubo, or 1,653 m 2, we believe the size of the Anticipated Property wouldd be wellregarded. Moreover, tenants should be able to t efficiently use leased rooms throughh renovation and partitioning. Althoughh more than 20 years have passed since e the completion of construction, the basic specification is at a relatively high level with a ceiling height of 2,,600 mm (OA70 mm) andd a floor loadd of 300 kg/m 2, which remains competitive among the neighboring office buildings. All things considered, we believe that the Anticipated Property will be fairlyy competitive as an office building in its surrounding area. 2

3 3. Overview of the Anticipated Property Specified assets category Trust beneficiary interests Anticipated Acquisition Price 2,100 million yen Trustee Mitsubishii UFJ Trust and Banking Corporation Date Trust Initiated Decemberr 26, 2006 Expiration date of trust period Decemberr 31, 2016 Nearest Station Daitabashii Station on the Keio Line (5minute walk) Address (domicile) 648 Sasazuka 1chome, Shibuyaku, Lot number 644 Sasazuka 1chome, Shibuyaku,, and otherss Buildingtoland ratio 80% Floorarea ratio 500% Land Zoning Commercial area Site areaa 1, m 2 Type of ownership Proprietaryy ownership Completed April 1, 1992 Construction Steel structure Number of floors B1/8F Building Number of parking 29 spaces Type of ownership Unit ownership Collateral None PM company Hulic Co.,, Ltd. (Anticipated) (Note 1) Master lease company Hulic Co.,, Ltd. (Anticipated) (Note 1) Appraisal value 2,110 million yen (as of) (December 31, 2014) Appraisal company Japan Real Estate Institute PML value 5.8% Lease summary Total leasable area 3, m 2 Occupancy rate 100% Main tenant (Note 2) Total number of tenants 8 Total lease income (annualized) 155 million yen (Note 3) Lease and guaranteee deposits 93 millionn yen (Note 4) Special remarks None Notes: (1) Hulic Co., Ltd. is an interested party, etc. (as defined in Article 201 of the Actt on Investment Trusts and Investment Corporations (19511 Act No. 198; including subsequent revisions) and Article 123 of the Order for Enforcement of the Act on Investment Trusts and a Investmentt Corporations (2000 Cabinet Order No. 480; including subsequent s revisions; hereinafter referred to as the Enforcement Ordinance )) of Hulic Reit Management, and falls under related parties with respect to thee Regulations on Transactionn with Interested Parties of Hulic Reit Management. (2) Main tenant is not disclosed as we have not received consent for disclosure from end tenants, etc. (3) The Total lease income (annualized) column contains the leasee income annualized by multiplying monthly lease income (including common servicee fees; limited only to rent and excludes fees for f using storage, signs and parking lot) by 12 and rounding to the nearest million yen. (4) The Lease and guarantee deposits column contains the total lease and guarantee deposits required based on each lease agreement (including rooms and parking p lot) andd rounding to the nearest million yen. Use Office Total floor space 5, m 2 3

4 4. Overview of the seller The seller of the property is a domestic special purpose company whose identity cannot be disclosed as Hulic Reit Management has not obtained consent for the disclosure. The seller has h no capital, personnel or transactional relationship to be noted between either Hulic Reit or Hulicc Reit Management, and the seller is also not a related person of either Hulic Reitt or Hulic Reit Management. 5. Status of the property acquirer The acquisition will not be made from any party in which Hulic Reit and Hulic Reit Managementt have any special interests. 6. Overview of intermediary (1) Overview of intermediary Trade Name CBRE K.K. Location of Head Office 11, Marunouchii 2chome, Chiyodaku, Representative Benjamin Mark Duncan, CEO Paidin Capital 150 million yen (as of February 28, 2015) Primary Business Lines Agency/intermediary servicess for purchase and sale, exchange and lease of business real properties (office buildings, logistic facilities, commercial facilities, etc.); agency/intermediary services for purchase and salee of trust beneficiary rights; and handling private placement, etc. Relationship with Hulic None Reit or Hulic Reit Management *The intermediary is not an interested person, etc. under the Enforcement Ordinance, norr is it an interested party under Hulic Reit Management s internal regulations. (2) Breakdown and Amount of Fees for Intermediary, etc. The intermediary fees for the acquisition of the property cannot be disclosed as we have not obtained consent of the intermediary. 7. Acquisition schedule Acquisition Decision Date March 5, 2015 Execution Date of Purchase and d Sale Agreement March 5, 2015 Anticipated Payment Date March 9, Anticipated Acquisition Date March 9, Future outlook The impact of the acquisition of the t Anticipated Property on the outlook for the financial results for the fiscal period ending August 31, 2015 (March 1, 2015 to August 31, 2015) will be minor, and there will be no change in the forecasts of financial results for the fiscal period ending August 31,

5 9. Summary of Appraisal Report Appraisal value Appraiser Date of valuation 2,110 million m yen Japan Real Estate E Institute December 31, 2014 (millions of yen) Item Breakdownn Remarkss Appraisal value based on income 2,110 ed by combining the appraisal values under the direct method capitalization method and the DCF method Appraisal value based on direct capitalization method (1) Operating revenuee Effective gross income Losses from vacancy, etc. (2) Operating expenses 2, Estimated based on evaluation off expected stable mid and longterm rent level 9 Estimated based on evaluation off expected stable mid and longterm occupancy rate r level 62 Estimated based on evaluation by reference to the current Maintenance and management 20 maintenance and management expenses, cost level of similar fee/pm fee (3) real property, etc. Utility expenses 23 Estimated based on evaluation of past results Estimated based onn evaluationn considering cost level, Repair expenses 1 longterm repair plan, average annual cost of repair works in engineering reports and other factors of similar real property Tenant recruitment/solicitation 0.8 expenses, etc. Estimate ed based on evaluation of assumed tenantt turnover rate Taxes and public dues 17 Estimated based on the standard taxable value for 2014, etc. Insurance premiumm Other expenses Net operating income (NOI: (1)(2)) 0.8 ed based onn reference to the current insurance premium, premium rate of similar real property, etc. e 0.3 Estimated with parking fees payable to thee management association as other expenses 112 (4) Profit from security 2 deposits (5) Capital expenditures Estimate ed with investment return att 2.0% Estimated by taking into consideration capital expenditure 7 level, age, longterm repair plan and average annual cost of repair works in engineering reports of similar real property Net cash flow ((3)+(4)(5)) Cap rate Appraisal value based on DCF method % 2,090 Estimated by comprehensively considering the individuality of Discount rate 4.7% the real property by reference r to investment yields of similar real property transactions, etc. Estimated by comprehensively considering future trends of Terminal cap rate 5.2% investment yields, risks of the real property as investment target, general prediction of economic growth going forward and property price, trend of rents, etc. Appraisal value based on cost method Ratio of land Ratio of building 1, % 24.5% 5

6 Other matters considered by appraiser in determination of appraisal value Notes: (1) Income and expenditure shown in the t above table are based on the appraisal report, and not based on any projections by Hulic Reit or Hulic Reit Management. (2) Each amount is rounded to the nearest JPY 1 million. (3) The maintenance and management fee and PM feee stated above are combined, because b individual disclosure of o the maintenance and management fee and a PM fee amount levels may affect the other transactions of each contractor with respect to building management and PM services, which could pose an obstacle to efficient performance of services by Hulic Reit and could harm untiholder interests. None 10. Overview of Building Inspection Report Inspection company BldgTech Center Co., Ltd. Inspection performed on February 25, 2015 Cost of o urgent/shortterm repairs (millions of o yen) (1) Cost of longterm repairs (millions of yen) (2) Notes: (1) Cost of urgent/shortterm repairs contains the cost of updating and repair works and urgent repairs generally required within one year as shown on the Building Inspection Report. (2) Cost of longterm repairs contains the average annual amount rounded to the nearest million yen for the costs appearing on the Building Inspection Report as updating and repair work forecast over the next 12year period. 8 This press release distributed to: The Stock Exchange Press Clubb (Kabuto Club), Ministry of Land, Infrastructure, Transport and Tourism (MLIT) Press Club and MLIT Press Club for Construction Publications * Addresss of the website of Hulic Reit: 6

7 Attachments Referencee Attachment 1 Map Referencee Attachment 2 Photo of the t Anticipated Property Referencee Attachment 3 Portfolio List after Acquiring the Anticipated Property 7

8 Attachments Reference Attachment 1 Map 8

9 Reference Attachment 2 Photo 9

10 Reference Attachment 3 Category Commercial Properties Office properties p Retail properties p Hulic Kamiyacho Building Hulic Kudan Building (Land) Toranomon First Garden Rapiros Roppongi Hulic Takadanobaba Building Hulic Kanda Building Hulic Kandabashi Building Hulic Kakigaracho Building Ochanomizu Sola City Hulic Higashi Ueno 1chome Building Sasazukaa South Building Subtotal Oimachi Redevelopment Building (#2) Oimachi Redevelopment Building (#1) Dining Square Akihabaraa Building Hulic Jingumae Building Portfolio List after Acquiring the Anticipated Property (Anticipated) Investment Acquisition Property Location Ratio (%) Price (million (Note 2) yen) (Notee 1) Minato Ward, 20,100 (Note 4) 1 Hulic Shinjuku 3chome Building Yokohama Yamashitachoo Building Subtotal Chiyoda Ward, Minato Ward, Minato Ward, Toshima Ward, Chiyoda Ward, Chiyoda Ward, Chuo Ward, Chiyoda Ward, Taito Ward, Shibuya Ward, Shinagawa Ward, Shinagawa Ward, Chiyoda Ward, Shibuya Ward, Shinjuku Ward, Yokohama City, Kanagawa 11,,100 8,623 (Note 4) 5,160 (Note 4) 3,,900 3,,780 2,,500 2,,210 22,854 (Note 4) 15.2 November 7, ,,670 2,100 (Note 4) 84,, ,,456 6,166 (Note 4) 3,,200 2,,660 5,,550 4,,850 31,, (Anticipated) Acquisition Date (Note 3) 13.4 February 7, February 7, February 7, February 7, February 7, February 7, February 7, February 7, October 16, Marchh 9, February 7, February 7, February 7, February 7, October 16, October 16, 2014 Commercial Properties Subtotal 116,, Next Generation Assets Private nursing homes Network Centers Aria Matsubara Trust Garden Yoganomori Trust Garden Sakurashimachi Trust Garden Suginami Miyamae Subtotal Ikebukuro Network Center Tabata Network Center Setagaya Ward, Setagaya Ward, Setagaya Ward, Suginami Ward, Toshima Ward, Kita Ward, 3,,244 5,,390 2,,850 2,,760 14,,244 4,,570 1,, February 7, February 7, February 7, February 7, February 7, February 7,

11 Hiroshima Network Center Atsuta Network Center Nagano Network Center Hiroshima City, Hiroshima Prefecture Nagoya City, Aichi Prefecture Nagano City, Nagano Prefecture 1,,080 1,, February 7, February 7, February 7, 2014 Chiba Network Center Inzai, Chiba 7,, December 16, 2014 Sapporo Network Center Keihannaa Network Center Sapporo, Hokkaido Kizugawa, Kyoto 2,,510 1,, December 16, October 16, 2014 Subtotal 19,, Next Generation Properties Subtotal 33,, Total 150,, Notes: (1) "(Anticipated) Acquisition Price lists thee acquisition price listed in the relevant purchase and sale agreement for each of the properties, rounded to the nearest one million yen. Thee acquisition price does not include consumption or local taxes or the costs and expenses related to the acquisition. (2) Investment Ratio contains the percentage of the (anticipated) acquisition price of each acquired asset and each of the Anticipated Properties compared to the total (anticipated) acquisitionn price rounded to the second decimal place. (3) (Anticipated) Acquisition Date contains the acquisition date stated inn the purchasee and sale agreement. (4) Figure based on the ratio of stratified ownership interest or trust coownership interest owned by Hulic Reit in the relevant property. 11