For Immediate Release REIT Issuer Premier Investment Corporation 8-4-14 Akasaka, Minato Ward, Tokyo Executive Director Asset Management Company Premier REIT Advisors Co., Ltd. President & CEO [Contact] Head of Business Affairs Notice Concerning Property Acquisition <Urbannet Irifune Building> May 2, 2013 Hiroaki Takano (Securities Code 8956) Kimito Muragishi Kazuhiro Kimura TEL: +81-3-5772-8551 Premier Investment Corporation ( PIC ) announces that it decided to acquire the property outlined below and executed a real estate trust beneficiary interest transfer agreement on May 2, 2013. 1. Overview of Acquisition (1) Property Name Urbannet Irifune Building (The Property ) (2) Type of Acquisition Beneficiary interest in a trust (real estate) (3) Acquisition Price 2,900 million yen (excluding acquisition costs, fixed property tax, city planning tax, consumption tax and local consumption tax.) (4) Seller NTT Urban Development Corporation ( NTT Urban Development ) (For more details, please (5) Date of Conclusion and Acquisition (6) Settlement method refer to 4. Seller Profile below.) <Date of Conclusion> May 2, 2013: Execution of real estate trust beneficiary interest transfer agreement <Date of Acquisition> May 10, 2013 (scheduled): Implementation of transfer based on the above mentioned real estate trust beneficiary interest transfer agreement The sale price is planned to be settled in a lump sum upon implementation of the transfer. Upon execution of the real estate trust beneficiary interest transfer agreement: - Upon implementation of transfer: 2,900 million yen (7) Financing for acquisition Debt financing (Note) and cash on hand (scheduled). (Note) PIC will announce the detail of debt financing as soon as it is fixed. 2. Reason for Acquisition (1) The Property will be acquired in accordance with the Property Management Targets and Policies stipulated in the Articles of Incorporation of PIC, to enhance the management balance of the overall portfolio by increasing the portfolio s share of office buildings in the Central 5 Wards (Note). (Note) The 5 Central Wards means Chiyoda, Chuo, Minato, Shinjuku and Shibuya wards. (2) PIC received information on the Property from NTT Urban Development as part of the pipeline support pertaining to property acquisitions. NTT Urban Development is the seller of the Property as well as the parent company of Premier REIT Advisors Co., Ltd. ( PRA ), the asset management company to which PIC entrusts its asset management. PIC decided on the acquisition particularly in recognition of the superior location characteristics of the Property as an office building, including its geographical advantage of being in close proximity to a station and the good access it enjoys to office areas in central Tokyo. 3. Details of the Property to be Acquired (1) Details of the beneficiary interest in a real estate trust Property Name Urbannet Irifune Building Sumitomo Mitsui Trust Bank, Limited (Note) Name of Trustee (The seller is scheduled to execute a real estate trust agreement with the trustee on May 2, 2013.) Agreement Term From the date of setting up the trust (May 10, 2013) to July 31, 2023 (scheduled) Acquisition Price Please refer to 1. Overview of Acquisition (3) above. Date of Conclusion and Acquisition Please refer to 1. Overview of Acquisition (5) above. (Note) Sumitomo Mitsui Trust Bank, Limited ( Sumitomo Mitsui Trust Bank ) falls under the category of an interested party, etc. as defined in the regulations on transactions with interested parties, etc. which is an internal rule of PRA. (2) Details of the real estate as the trust property Property Name Urbannet Irifune Building Location Land 3-3-23 Irifune, Chuo Ward, Tokyo 1
(Note 1) 3-3-23 Irifune, Chuo Ward, Tokyo Building <Residential Indication> 3-2-10 Irifune Chuo Ward, Tokyo The Property is situated about a 1-minute walk from Shintomicho Station on the Location Tokyo Metro Yurakucho Line. In addition, the Property has excellent access to Characteristic central Tokyo, as it takes about 10 minutes from Shintomicho Station to Tokyo Property Station by train (transferring to the JR Yamanote Line at Yurakucho Station). Characteristics About a 1-minute walk from Shintomicho Station on the Tokyo Metro Yurakucho Access Line About a 4-minute walk from Tsukiji Station on the Tokyo Metro Hibiya Line Use of Building (Note 1) Office Area (Note 1) <Land> 830.11m 2 <Building (Total floor space)> 6,058.22m 2 Structure of Building (Note 1) Steel-framed reinforced concrete structure with a flat-topped roof; 8 stories and 1 basement floor Type of Ownership Fee simple ownership for both land and building Former Owner NTT Urban Development Corporation Construction Completion (Note 1) July 1990 Matters Concerning Design, etc. Developer NTT Estate Co. Building Contractor Kyoritsu, Zenitaka and Daiichi Construction consortium. Architectural Design Company NTT Estate Co. Structural Design Company NTT Estate Co. Building Inspection Agency Construction inspector (Tokyo Metropolitan Government) Acquisition Price 2,900 million yen Appraisal Method Appraisal Method Appraised by Aoyama Realty Advisors, Inc. Appraisal Value 2,940 million yen Survey Date March 15, 2013 Cap Rate Based on Direct Capitalization Method Discount Rate Based on DCF Method 5.0% Terminal Capitalization Rate Based on DCF Method Property Manager NTT Urban Development Builservice Co. (Note 2) Collateral None Tenant Details (Note 3) Total Number of Tenants 1 Monthly Rent (including common expenses) - Deposit/Guarantees - Total Leasable Space 4,037.67m 2 Total Leased Space 4,037.67m 2 Change in Occupancy Rate Feb 2009 Feb 2010 Feb 2011 Feb 2012 Feb 2013 (Note 4) 100.0% 100.0% 100.0% 100.0% 100.0% Building Condition Evaluation Report Earthquake PML (Note 5) 10.8% Evaluation Report Preparer SHIMIZU CORPORATION Repair Costs Emergency Short-term Long-term Repair Costs Repair Costs Repair Costs 50 thousand 16,870 thousand yen (average annual cost of - yen repairs over the next 12 years ) a. NTT Urban Development Builservice Co. ( NTTUD Builservice ), with which a sublease agreement on the parking lot of the Property has been executed, falls under the category of the interested party, etc., as stipulated in the Act on Investment Trusts and Investment Corporations (the Investment Trusts Law ), of Other Special Notes PRA. b. NTT DOCOMO, Inc., with which a lease agreement on the installment of antennas and other equipment for mobile phones on the Property has been executed, falls under the category of the interested party, etc., as stipulated in the Investment Trust Law, of PRA. (Note 1) Each piece of information in Location (excluding Residential Indication), Use of Building, Area, Structure of Building and Construction Completion is described as it appears on the registry. (Note 2) PIC, the trustee, PRA and NTTUD Builservice plan to execute a property management consignment agreement for the Property, with NTTUD Builservice as the consignee of property management operations for the Property. NTTUD Builservice falls under the category of the interested party, etc., as stipulated in the Investment Trusts Law, of PRA. (Note 3) Tenant Details indicate the figure as of February 28, 2013. The figures of Monthly Rent (including common 2
(Note 4) (Note 5) expenses) and Deposit/Guarantees are not entered as PIC has not obtained consent for disclosure from the tenant. Occupancy Rate has been calculated by using the formula Total Leased Space / Total Leasable Space. The figures are rounded to the nearest decimal place. The PML, or probable maximum loss, refers to the probability of the maximum loss expected to result from an earthquake. Although there is no single precise definition of PML, PML herein is based on the event of the maximum earthquake that can be expected to occur in the region where the subject building is located (probable maximum earthquake = PME: an earthquake of a size that has 10% or greater probability of occurring within 50 years = occurs once every 475 years) occurring and is represented by expressing the construction costs required to restore the post-pme building to its pre-pme state as a percentage of the total construction costs required to reconstruct the building (= replacement cost). The concerned measurement does not take into account the impact of the collapse of neighboring buildings or fire, water and other damages. 4. Seller Profile (as of March 31, 2013) Company Name NTT Urban Development Corporation Head Office Address 4-14-1 Sotokanda, Chiyoda Ward, Tokyo Representative President & CEO Masaki Mitsumura Paid-in Capital 48,760 million yen Major Shareholders Nippon Telegraph and Telephone Corporation (Share: 67.3%) Established Date January 21, 1986 (1) Acquisition, disposition and management of real estate (2) Real estate leasing, brokerage and appraisal Principal Businesses (3) Building design, construction, construction supervising and their commissioning (4) Sale and lease of office equipment, communications equipment, fixtures and fittings, and interior furnishings for office buildings and residences (5) Construction and sale of residences and other businesses Relationship with PIC or PRA The seller owns 4.4% (8,700 units) of PIC s total investment units outstanding. The seller is Capital Relationship also the parent company of PRA, holding 53.1% (3,186 shares) of PRA s total shares outstanding, and falls under the category of the interested party, etc., as stipulated in the Investment Trust Law, of PRA. Personnel The seller is one of the companies from which officers and employees of PRA have been dispatched. Business Relationship The seller falls under the category of tenants of properties owned by PIC. In addition, PRA has executed an Agreement on Information Provision with the seller. Related Parties The seller does not fall under the category of related parties of PIC. As stated above, the seller is the parent company of PRA and falls under the category of related parties of PRA. 5. Status of the Previous Owner The previous owner of the Property falls under the category of the interested party, etc. as stipulated in the Investment Trust Law, of PIC. Accordingly, the status of the previous owner is described below. Company Name Relationship with Party Having a Special Interest Acquisition Background and Reason, Etc. Acquisition Price (including Other Expenses) Acquisition Date NTT Urban Development Corporation Please refer to 4. Seller Profile above. New construction (the previous owner comprehensively succeeded the status as original owner through an absorption-type merger with NTT Estate Co., which was the developer of the Property, as extinct company and NTT Urban Development as surviving company.) - (The indication of the acquisition price has been omitted as the Property was newly constructed by the previous owner and there was no owner before the previous owner.) - (The previous owner succeeded the Property on March 15, 1995, which was the date when the above mentioned absorption-type merger came into force.) 6. Transaction with Interested Party, Etc. PRA s board of directors discussed and made a resolution concerning the following transactions with interested parties, etc., in accordance with the Regulations on Transactions with Related Party, etc., an internal rule of PRA. (1) Transactions with interested party, etc., as stipulated in the Investment Trusts Law, of PRA. a. Acquisition of the Property from NTT Urban Development b. Consignment of property management services to NTTUD Builservice c. Partial amendment to the sublease agreement concerning the parking lot with NTTUD Builservice (2) Transactions with interested parties, etc. as stipulated in the internal rules of PRA Consignment of administration and disposition of real estate in trust to Sumitomo Mitsui Trust Bank 7. Overview of Intermediary None 8. Settlement Method, Etc. Please refer to 1. Overview of Acquisition (6) above. 3
9. Acquisition Schedule Please refer to 1. Overview of Acquisition (5) above. 10. Outlook The impact of the acquisition on PIC s business performance for the fiscal period ending October 31, 2013 (May 1, 2013 October 31, 2013) is negligible and thus there are no changes to the forecast of business performance that were announced in the Financial Report for the Fiscal Period ended October 31, 2012 dated December 13, 2012. [Attachments] Reference 1 Overview of Appraisal Report, Outside View of Property and Map Reference 2 Table of Portfolio Following Property Acquisition * The Japanese original document was distributed to press clubs within the Tokyo Stock Exchange, Ministry of Land, Infrastructure, Transport and Tourism, and the construction trade newspaper of the Ministry of Land, Infrastructure, Transport and Tourism. * PIC s website is http://www.pic-reit.co.jp ** Please note that this English translation of the Japanese original document is provided solely for information purposes. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. 4
[Reference 1] Overview of Appraisal Report, Outside View of Property and Map (1) Overview of appraisal report Real-estate appraiser Estimated value Survey date The value estimated by income approach The value estimated by direct capitalization method Net operating income Capitalization rate The value estimated by discounted cash flow (DCF) method Discount rate Terminal capitalization rate The value estimated by cost approach Land ratio Building ratio Unit: thousand yen Aoyama Realty Advisors Inc. 2,940,000 March 15, 2013 2,940,000 3,000,000 158,982 2,870,000 5.0% 2,273,000 65.6% 34.4% (2) Outside view of property and map * attached Japanese map only. 5
[Reference 2] Table of Portfolio Following Property Acquisition Use Area Property Name Acquisition Date Acquisition Price (yen) (Note 1) Portfolio Share (Note 2) Office Buildings Residential Properties 5 Central Wards Other 18 Wards Surrounding Regions 5 Central Wards Landic Shimbashi Building 1 Sep 11, 2002 6,341,000,000 3.2% Landic Shimbashi 2 Building Sep 11, 2002 7,045,000,000 3.5% Premier Dogenzaka Building Sep 10, 2002 1,727,000,000 0.9% KN Shibuya No.3 Sep 11, 2002 5,348,000,000 2.7% Takadanobaba Center Building Sep 11, 2002 5,118,000,000 2.6% Rokubancho Building Mar 26, 2004 7,860,000,000 3.9% Ougaku Building Jun 1, 2005 1,796,000,000 0.9% YS Kaigan Building Jun 29, 2007 5,100,000,000 2.6% Iwamotocho Building May 17, 2010 6,700,000,000 3.4% Urbannet Mita Building Nov 18, 2011 10,300,000,000 5.2% Urbannet Azabu Building Nov 18, 2011 5,000,000,000 2.5% Urbannet Ichigaya Building Nov 18, 2011 1,650,000,000 0.8% Kanda Chuodori Building Nov 18, 2011 2,450,000,000 1.2% Urbannet Irifune Building May 10, 2013 (scheduled) 2,900,000,000 1.5% IPB Ochanomizu Building Sep 11, 2002 1,456,000,000 0.7% Premier Toyocho Building May 18, 2007 4,310,000,000 2.2% Ueno TH Building Mar 27, 2008 4,380,000,000 2.2% Gotanda NT Building Mar 27, 2008 4,100,000,000 2.1% Ueno Tosei Building Nov 18, 2011 5,900,000,000 3.0% Nisso No.3 Building Sep 11, 2002 3,558,000,000 1.8% The Kanagawa Science Park R&D Building Sep 11, 2002 6,556,000,000 3.3% NU Kannai Building Nov 18, 2011 3,300,000,000 1.7% Subtotal 102,895,000,000 51.6% Park Axis Yotsuya Stage Sep 11, 2002 5,208,000,000 2.6% Park Axis Meiji-Jingumae Sep 11, 2002 2,604,000,000 1.3% Sun Palace Minami-Azabu Sep 10, 2002 1,150,000,000 0.6% Cabin Arena Akasaka Apr 4, 2003 1,330,000,000 0.7% Cabin Arena Minami-Aoyama Sep 1, 2003 1,070,000,000 0.5% Bureau Kioicho Jul 1, 2003 1,840,000,000 0.9% Homat Woodville Nov 18, 2003 5,090,000,000 2.6% Roppongi Green Terrace Nov 18, 2003 4,678,000,000 2.3% Premier Stage Shibakoen II Nov 18, 2003 2,181,000,000 1.1% Langue Tower Kyobashi Dec 22, 2003 927,606,900 0.5% Premier Stage MitaKeidaimae Nov 30, 2004 1,580,000,000 0.8% Premier Rosso Jan 14, 2005 1,662,469,729 0.8% Premier Blanc Yoyogikouen Jul 15, 2005 2,330,000,000 1.2% Premier Stage Uchikanda Sep 20, 2005 1,723,750,000 0.9% Premier Stage Ichigayakawadacho Jul 21, 2005 1,460,000,000 0.7% Walk Akasaka Jun 1, 2005 2,043,000,000 1.0% Premier Stage Shibakoen Oct 13, 2006 1,585,000,000 0.8% MEW Jul 31, 2006 1,556,000,000 0.8% Shibaura Island Air Tower Dec 3, 2007 7,590,000,000 3.8% Storia Akasaka May 22, 2008 3,930,000,000 2.0% Renai Shinjuku-Gyoen Tower May 22, 2008 6,500,000,000 3.3% Shibaura Island Bloom Tower Dec 9, 2010 5,500,000,000 2.8% Questcourt Harajuku Nov 18, 2011 4,500,000,000 2.3% 6
Use Area Property Name Acquisition Date Acquisition Price (yen) (Note 1) Portfolio Share (Note 2) Residential Properties Others Other 18 Wards B-Site Osaki Nov 18, 2003 1,072,000,000 0.5% Premier Garden Hongo Apr 1, 2004 975,000,000 0.5% Premier Grande Magome Jun 1, 2005 1,560,000,000 0.8% Premier Nozze Yutenji Mar 28, 2006 1,525,000,000 0.8% Premier Stage Yushima Sep 1, 2006 1,803,000,000 0.9% Premier Stage Komagome Feb 9, 2007 1,830,000,000 0.9% Premier Stage Otsuka Jun 18, 2007 1,310,000,000 0.7% Premier Stage Honjo-Azumabashi Nov 30, 2007 2,640,000,000 1.3% Premier Stage Ryogoku Jun 30, 2008 1,496,000,000 0.8% Subtotal 82,249,826,629 41.2% UDX Special Purpose Company Preferred Securities (Akihabara UDX) Dec 8, 2010 14,300,000,000 7.2% Subtotal 14,300,000,000 7.2% Total 199,444,826,629 100.0% (Note 1) Under Acquisition Price, an amount excluding various costs required for the acquisition of the relevant real estate (real estate sale intermediary fees) and taxes and other public charges, etc. has been given (based on the sale and purchase price provided in the Sale and Purchase Agreement, etc.). (Note 2) Portfolio Share has been rounded to the nearest one decimal place. 7