Japan Retail Fund Investment Corporation (Tokyo Stock Exchange Company Code: 8953) News Release March 25, 2014 Japan Retail Fund Investment Corporation to Acquire Property in Shibuyaku, Tokyo The Japan Retail Fund Investment Corporation ("JRF") announced today that it has decided to acquire the following property as outlined below. 1. Summary of Acquisition 1) Property type Trust beneficiary right in real estate 2) Property name GBldg. Shibuya 01 3) Acquisition price 3,230 million yen 4) Appraisal value 3,610 million yen (as of March 1, 2014) 5) Completion date of contract March 25, 2014 6) Acquisition date March 25, 2014 7) Seller Mitsubishi Corporation Urban Development, Inc. 8) Acquisition funds Internal cash 9) Payment Full payment at time of transfer 2. Reasons for acquisition JRF is pursuing a strategy of asset replacement to improve stability and profitability of the portfolio. This acquisition is under JRF s asset replacement strategy and JRF use the proceeds from the sale of 4 properties (G DINING SAPPORO, GBldg. Jingumae 04, GBldg. Jingumae 05, and AEON TOWN Ogaki). JRF made the following assessments in acquiring the subject assets. 1
Acquisition Highlights A retail property that stands at Shibuya, wellknown for High fashioned area Market Shibuya is a hub of the streets where the large scale shopping facilities and street faced shops exists Shibuya Station is one of the Japan s busiest stations (approximately 3million passengers per day) Location Eightminute walk from the Shibuya station on the JR, Tokyu, Tokyo Metro, and Keio Line Located in the High fashioned area (Jinnan area) in Shibuya Facility Leased to BAYCREW S group, which has multiple stores such as specialty stores and café around this area New building (completed in Apr. 2013) with wide facade which is easy to notice from a major street named Koen Street. *A limited store has opening as of acquisition date. Photo and Map 2
3. Property Summary Property name GBldg. Shibuya 01 Type of asset Trust beneficiary right in real estate Trustee Mitsubishi UFJ Trust and Banking Corp. Trust period August 10, 2011 September 30, 2021 Location (address) 2013 Jinnan1chome, Shibuyaku, Tokyo Land Area 274.93 m2 Zoning Commercial district Type of possession Ownership Building Structure / stories 11 stories (10 floors above ground and 1 basement floor), Sstructure building with flat roof Total floor area 1,893.52 m 2 FAR / buildingtoland ratio 700%/80% Type Retail and office Date built April 30, 2013 Type of possession Ownership Design Kajima Corporation Construction Kajima Corporation Constructional Inspector UHEC (K.K. Toshi Kyojyuu Hyouka Center) PML 4.4% (based on earthquake risk analysis report prepared jointly by Engineering & Risk Services Corporation and OYO RMS Corporation) Acquisition price 3,230 million yen Appraisal value 3,610 million yen (as of March 1, 2014) Appraiser Japan Real Estate Institute Tenant Summary Number of tenant(s) (Major Tenant) 1 (BAYCREW'S) Annual rent (excluding consumption tax) Tenant leasehold /security deposit Total leased area Total leasable area 1,582.08 m2 1,582.08 m2 Occupancy rate (based on leased area) Major Tenant 100.0% Period of contract May 1, 2013 April 30, 2023 (Remaining Period: 9 years) Type of contract Fixedterm lease contract Revision of rent No revision for 5 years from May 1,2013 Cancelation before ended contract period Not possible for 5 years from May 1, 2013 Collateral conditions N/A Special notes N/A Amount of less than one hundred yen are rounded down, and percentages are rounded to the nearest second decimal place. "Location" represents the address of each property or the registered address of the building. Descriptions of "Land area," "Structure/stories," "Total floor area" and "Date built" are all based on descriptions in registry books. "Zoning" represents the classification of land by its use, stipulated in Section 11, Article 8 of the City Planning Act. Tenant has not agreed to the disclosure of Annual rent and Tenant leasehold /security deposit details. 3
4. Property of Sellers 1) Name Mitsubishi Corporation Urban Development, Inc. 2) Location Yurakucho Electric Building North 9F, 171, Yurakucho, Chiyodaku, Tokyo, Japan 3) Title & name of representative Koichi Murata, CEO and President 4) Line of business Income property development based on Retail and Logistics facilities, etc. 5) Capital 700 million yen(as of March 31, 2013) 6) Date established September 2, 2002 7) Total net assets 504 million yen(as of March 31, 2013) 8) Total assets 14,925 million yen(as of March 31, 2013) 9) Relationship with JRF / the asset management company (Note) Mitsubishi corporation, the parent of the asset management company (51% stake), has took a Capital relationship 98.66% stake in to the company. This falls under the category of the interested parties in the context of Act on Investment Trusts and Investment Corporation. Personal relationship There are no personal and trade relationships between interested parties and affiliated companies Trade relationship of JRF/ the asset management company of Mitsubishi Corporation. The company falls under the category of an interested party of JRF / the asset management company in the context of Act on Investment Trusts and Investment Corporation. The Related parties company falls under the category of an interested party of the asset management company in the context of the "rules and regulations on business transactions with interested parties of the asset management company". (Note) This transaction falls under the category of transactions with interested parties, in the context of the asset management company's rules and regulations on business transactions with related parties. Therefore, this transaction has been affirmed by the Compliance Office in accordance with the bylaws of the asset management company, and also has been approved by the Investment Committee and the Board of Directors of the asset management company through discussions/deliberations. Approval of the transaction requires at least 6 out of 8 directors voting in favor at the Board of Directors meeting. Ownership History of Properties to be Acquired Owner history Previous owner Former owner Name Mitsubishi Corporation Urban Development, Inc. Mitsubishi corporation, the parent of the Relationship with interested asset management company (51% parties of JRF/the asset stake), has took a 98.66% stake in to the management company company. 5. Broker None Background/reasons for acquisition Development purposes Other than those that have special interest in JRF/the asset management company Acquisition price Omitted as the previous owner hold the asset for more than 1 year Acquisition date August 31, 2011 6. Means of Payment Full payment at time of transfer 7. Planned Acquisition Schedule Purchase Agreement Signing Date March 25, 2014 Payment Date March 25, 2014 Acquisition Date March 25, 2014 8. Future Outlook There will be no particular impact on our revenue forecast for the fiscal period ending February 2014 (the 24th period: September 1, 2013 February 28, 2014). Furthermore, there is no immediate impact on our operating results for the fiscal period ending August 2014 (the 25th period: March 1, 2014 to August 31, 2014), we will not revise the forecast. 4
[Reference] Prospective Income and Expenditures for the Property NOI(Net Operating Income) 151 million yen NOI is based on the annual rent from lease contract. NOI yield 4.7% Depreciation 26 million yen NOI yield after depreciation 3.9% NOI yield is calculated to NOI divided by acquisition price and rounded to the nearest second decimal place. Depreciation is the approximate estimate as of today. NOI yield after depreciation is calculated to NOI minus depreciation divided by acquisition price and rounded to the nearest second decimal place. Summary of Appraisal Report Appraisal firm Japan Real Estate Institute Appraisal value 3,610 million yen Appraisal date March 1, 2014 Value based on direct capitalization method 3,670 million yen Direct cap rate 4.1% Value based on DCF method 3,550 million yen Discount rate 3.9% Terminal cap rate 4.3% About JRF: JRF is the third listed Japanese Real Estate Investment Trust ( JREIT ) and the first JREIT to focus exclusively on retail properties. As of the date of this release, JRF owns 81 properties containing approximately 3.0 million square meters of leasable space. Please refer to our website at http://www.jrfreit.com/english/index.html for further details. Contacts: For further information relating to this press release as well as JRF and Mitsubishi Corp.UBS Realty Inc., its Asset Manager, please feel free to contact: Mr. Fuminori Imanishi (Telephone Number: 81352937080), Head of Retail Division at Mitsubishi Corp.UBS Realty Inc., Investor Relations: Telephone Number: 81352937081 Email: jrf8953.ir@mcubs.com This translation is for informational purposes only, and the Japanese language release should be referred to as the original. 5