Japan Metropolitan Fund Investment : Notice Concerning Acquisition of Asset in Japan (Silent partnership interests)

March 22, 2024

To all concerned parties:

Investment Corporation

Japan Metropolitan Fund Investment Corporation

(Tokyo Stock Exchange Company Code: 8953）

Representative: Masahiko Nishida, Executive Director

URL: https://www.jmf-reit.com/english/

Asset Management Company

KJR Management

Representative:	Naoki Suzuki, President & CEO
Inquiries:	Keita Araki, Executive Officer &
	Head of Metropolitan Division
	TEL: [phone]

Notice Concerning Acquisition of Asset in Japan (Silent partnership interests)

Japan Metropolitan Fund Investment Corporation ("JMF") announces today that KJR Management, JMF's asset manager (the "Asset Manager"), determined to acquire the asset in Japan (silent partnership interests) (the "Acquisition") as outlined below.

1. Overview of Acquisition

	Type of asset to be acquired (Note 1)		Equity interests in silent partnership whose trust assets are trust
		beneficiary rights in real estate in Japan
	Asset name		Godo Kaisha Sapphire 1 and Godo Kaisha Sapphire 2 silent partnership
		interests
			ADVANCE Esaka Rasurer, ADVANCE Tennojiminami Pachira, ASTERI
			Tsurumai Ena, ASTERI Tsurumai Dio, ASTERI Tsurumai Tesera, ASTERI
	Underlying assets (Note 2)		Tsurumai Touria, ADVANCE Kyoto Detendu, ADVANCE Uemachidai Stadt,
			ADVANCE Kobe Grouv II, ADVANCE Nishiumeda Jace, ADVANCE
			Nishiumeda Bios, ADVANCE Osaka Valencia, ADVANCE Osakajokita Fierte
	Asset class		Residence
	Investment price (Planned)		Total 855 million yen (approximately 16.0% of total silent partnership
		interests)
	Contract completion date (Scheduled)		March 26, 2024
	Equity interests acquisition date (Scheduled)		March 27, 2024
	Investee		Godo Kaisha Sapphire 1 and Godo Kaisha Sapphire 2
	Broker		None
	Acquisition funds		Cash on hand (Planned)

(Note 1) The silent partnership interests fall under the category of real estate-related assets. Also, the ratio of real estate, etc. in the total assets of JMF will remain above 70% even after the Acquisition.

(Note 2) The details of underlying assets are set out in "3. Property Summary (2) Summary of underlying assets" as described below.

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2. Reason for Acquisition

Highlights

Acquired equity interests in silent partnerships whose underlying assets are 13 prime rental residential properties and acquired dividend income of an expected dividend yield of 8.6% and future acquisition opportunities by acquiring the preferential negotiating rights.

As there have been constant changes to the operating environment surrounding real estate, such as widespread e-commerce and remote working due to the rapid advancement in information technologies, and the trend of mixed-use by area and by property, JMF aims to optimize its portfolio in response to such changes. To this end, JMF will continue to secure stable earnings on a medium to long term basis and ensure steady growth of operating assets by promoting carefully-screened investment in retail facilities, office buildings, residences, hotels, and mixed-use properties used for a combination of those purposes, located mainly in urban areas.

JMF acquires preferential negotiating rights (Note) for 13 properties by acquiring of the equity interests in the silent partnerships for SPCs that will acquire these 13 residential properties. As a result, JMF is considering the possibility of acquiring the properties in the future and assessing the timing of acquisition by cash on hand or other funds procurement, with an eye on the further improvement of profitability of each property during the period of management by the relevant SPC.

All of the 13 residential properties as underlying assets are newer than five years-built properties, and that are prime rental residential properties located in the inner city and highly convenient for transport and living. In the real estate trading market where acquisition of real estate remains challenging, acquisition of the future acquisition opportunities along with dividend income with an expected dividend yield of 8.6% are considered by JMF to contribute to the progress of asset replacement and improvement of the quality of the portfolio.

(Note) JMF will retain the preferential negotiating rights as of right but is not obliged to acquire the underlying assets.

(Continue to next page)

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3. Property Summary

1. Summary of silent partnership (Total of Godo Kaisha Sapphire 1 and 2)

	Total silent partnership			5,360 million yen
	investment price
	Investment price		855 million yen (approximately 16.0 % of total silent partnership interests)
				Godo Kaisha Sapphire 1 and 2
					Non-Recourse Loan (Senior)
				Trust beneficiary right in real	16,802 million yen
				Non-Recourse Loan (Mezzanine)
	Summary of silent			estate etc. (Note)
			24,029 million yen	1,867 million yen
	partnership agreement			Silent Partnership Interests
					5,360 million yen
				・Figures of less than one million yen are rounded down.
				(Note) The trust beneficiary right in real estate etc. includes expenses for acquiring
				underlying assets and expenses for forming silent partnerships, etc. In addition, the
				real estate appraisal by JLL Morii Valuation & Advisory K.K. amounts total 24,891
				million yen.
	Operator Name			Godo Kaisha Sapphire 1
	Type of asset			Silent partnership interests
	Effective date in silent			March 27, 2024
	partnerships
	Validity period in silent			March 31, 2027
	partnership agreement
	Total silent partnerships			3,390 million yen
	interests
	Investment price		542 million yen
				Godo Kaisha Sapphire 1
					Non-Recourse Loan (Senior)
				Trust beneficiary right in real	10,529 million yen
				Non-Recourse Loan (Mezzanine)
				estate etc. (Note 1)
				15,089 million yen	1,170 million yen
				Silent Partnership Interests (Note 2)
	Summary of silent				3,390 million yen
			・Figures of less than one million yen are rounded down.
	partnership agreement
				(Note 1) The trust beneficiary right in real estate etc. includes expenses for acquiring
				underlying assets and expenses for forming silent partnerships, etc. In addition,
				the real estate appraisal by JLL Morii Valuation & Advisory K.K. amounts total
				15,598 million yen.
				(Note 2) With regard to the silent partnership interests, JMF plans to invest 542 million yen.
				Godo Kaisha Sapphire 1 plans to acquire trust beneficiary right in real estate with the
				funds procured through the non-recourse loan and silent partnership interests. The
				acquisition price of the relevant trust beneficiary right in real estate is less than the
				real estate appraisal value described in Note1. Therefore, JMF has determined that
				the investment amount is a reasonable amount.

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	Operator Name		Godo Kaisha Sapphire 2
	Type of asset		Silent partnership interests
	Effective date in silent		March 27, 2024
	partnerships
	Validity period in silent			March 31, 2027
	partnership agreement
	Total silent partnerships			1,970 million yen
	interests
	Investment price		313 million yen
				Godo Kaisha Sapphire 2
					Non-Recourse Loan (Senior)
				Trust beneficiary right in real	6,273 million yen
				Non-Recourse Loan (Mezzanine)
				estate etc. (Note 1)
				8,940 million yen	697 million yen
				Silent Partnership Interests (Note 2)
	Summary of silent				1,970 million yen
			・Figures of less than one million yen are rounded down.
	partnership agreement
				(Note 1) The trust beneficiary right in real estate etc. includes expenses for acquiring
				underlying assets and expenses for forming silent partnerships, etc. In addition,
				the real estate appraisal by JLL Morii Valuation & Advisory K.K. amounts total 9,293
				million yen.
				(Note 2) With regard to the silent partnership interests, JMF plans to invest 313 million yen.
				Godo Kaisha Sapphire 2 plans to acquire trust beneficiary right in real estate with the
				funds procured through the non-recourse loan and silent partnership interests. The
				acquisition price of the relevant trust beneficiary right in real estate is less than the
				real estate appraisal value described in Note1. Therefore, JMF has determined that
				the investment amount is a reasonable amount.

(Common matters in Godo Kaisha Sapphire 1 and 2)

・Calculation period

Two six-month periods annually from January 1 to the end of June and from July 1 to the end of December. However, the initial calculation period shall be from March 26, 2024 to the end of June, 2024.

	・Distribution of profits and losses
	In the case where profits are generated in each calculation period, the
	operator shall distribute them to investors by the investment ratios as
	of the relevant calculation date. In the case where losses are incurred
	in each calculation period, the operator shall distribute them to
	investors by the investment ratios as of the relevant calculation date to
Summary of silent
partnership agreement	the extent of the relevant losses. However, if the cumulative losses
	distributed to investors exceed the total amount of the investments, the
	excess amount shall be distributed to the operator up to an amount
	equal to the total amount of the investments minus one yen.
	・Transfer and refund of investments
	The prior written consent of the operator is required in cases where
	investors transfer their position under the silent partnership
	agreement and their equity interests, etc. and obligations under the
	silent partnership agreement. (However, the prior written consent of
	the lender is required before borrowings are fully repaid.) In addition,

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	the operator may, after obtaining the prior written consent of the
	lender, refund all or part of investments to investors according to their
	investment ratio.
	・Period for exercising preferential negotiating rights
	March 22, 2024 to March 31, 2027
	・Summary of rights
	The rights to preferentially enter into purchasing negotiations for the
	trust beneficiary rights in real estate acquired by Godo Kaisha
	Sapphire 1 and 2.
Summary of preferential	・Exercise prices
negotiation rights
	The exercise prices shall be amounts that meet all of the following
	conditions.
	(1) The amounts are sufficient to fully repay the seller's borrowings as
	of the date of the sales.
	(2) The amounts exceed the internal rate of return (IRR) targets for
	each of the following periods .
	December 1, 2025 - June 30, 2026 : 5.50%
	July 1, 2026 - March 31, 2027 : 6.00%

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1. 1. Summary of underlying assets
2. Summary of underlying assets in Godo Kaisha Sapphire 1

Property name

ADVANCE Esaka Rasurer

Location

1-20, Esakacho 2-chome,Suita-shi, Osaka

Type of asset

Trust beneficiary right in real estate

Trustee

Mitsubishi UFJ Trust and Banking Corporation

Trust period

April 14, 2023- March 31, 2034 (Scheduled)

Land

Land area

1,065.00 ㎡

Zoning

Commercial districts

FAR / building-to-land ratio

600%／80%

Type of possession

Ownership

Building

Structure / stories

15 stories above ground, RC-structure with flat roof

Total floor area

8,155.81 ㎡

Type

Residence

Completion date

March 7, 2023

Type of possession

Ownership

Design

AR Architecture Office K.K.

Construction

SUNADA CONSTRUCTION. INC

Constructional Inspector

KENCHIKUKENSAKIKO KK

PML

5.7% (Based on the engineering report prepared by Japan Constructive

Inspect Association CO.,LTD)

Appraisal value

6,000 million yen (as of February 1, 2024)

Appraiser

JLL Morii Valuation & Advisory K.K.

Tenant summary (as of February 29, 2024)

Number of tenants

188

Annual rent

201 million yen

Tenant leasehold / security

1 million yen

deposit

Total leased area

4,951.05 ㎡

Occupancy rate

77.5%

Total leasable area

6,385.26 ㎡

(based on leased area)

Collateral conditions

A lender of a non-recourse loan to Godo Kaisha Sapphire 1, the operator, is to

take out a pledge as a pledgee.

Special notes

None

Property name

ADVANCE Tennojiminami Pachira

Location

2-19, Bishoen 1-chome,Abeno-ku,Osaka-shi, Osaka

Type of asset

Trust beneficiary right in real estate

Trustee

Mizuho Trust & Banking Co., Ltd.

Trust period

May 31, 2022 - March 31, 2034 (Scheduled)

Land

Land area

336.23 ㎡

Zoning

Category 1 residential

districts

FAR / building-to-land ratio

300%／80%

Type of possession

Ownership

Building

Structure / stories

12 stories above ground, RC-structure with flat roof, 1 story above ground,

RC-structure with flat roof

Total floor area

1,097.12 ㎡

Type

Residence, Garbage

storage

Completion date

March 4, 2022

Type of possession

Ownership

Design

Toki. Design Co., Ltd.

Construction

Japan Crest Co., Ltd.

Constructional Inspector

Nihon Kakunin Architectures Inspection Center Co.,Ltd

PML

6.0% (Based on the engineering report prepared by Japan Constructive

Inspect Association CO.,LTD)

Appraisal value

798 million yen (as of February 1, 2024)

Appraiser

JLL Morii Valuation & Advisory K.K.

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Tenant summary (as of February 29, 2024)

Number of tenants

44

Annual rent

35 million yen

Tenant leasehold / security

0 yen

deposit

Total leased area

990.66 ㎡

Occupancy rate

100.0%

Total leasable area

990.66 ㎡

(based on leased area)

Collateral conditions

A lender of a non-recourse loan to Godo Kaisha Sapphire 1, the operator, is to

take out a pledge as a pledgee.

 This land is within a well-known buried cultural property site under the

Special notes

Act on the

Protection of Cultural Properties. For that reason, any

engineering work on the land requires at least 60 days' notice prior to the

start of such work.

Property name

ASTERI Tsurumai Ena

Location

11-27, Chiyoda 5-chome,Naka-ku,Nagoya-shi, Aichi

Type of asset

Trust beneficiary right in real estate

Trustee

Mizuho Trust & Banking Co., Ltd.

Trust period

February 26, 2021 - March 31, 2034 (Scheduled)

Land

Land area

649.05 ㎡

Zoning

Commercial districts

FAR / building-to-land ratio

500%／80%

Type of possession

Ownership

Building

Structure / stories

13 stories above ground, RC-structure with flat roof

Total floor area

3,369.09 ㎡

Type

Residence

Completion date

January 7, 2021

Type of possession

Ownership

Design

Tanaka Architect

Construction

FUKUDA CORPORATION

Constructional Inspector

CONFIRMATION INSPECTION TOKAI CO.

PML

10.9% (Based on the engineering report prepared by Japan Constructive

Inspect Association CO.,LTD)

Appraisal value

2,530 million yen (as of February 1, 2024)

Appraiser

JLL Morii Valuation & Advisory K.K.

Tenant summary (as of February 29, 2024)

Number of tenants

121

Annual rent

110 million yen

Tenant leasehold / security

5 million yen

deposit

Total leased area

2,906.02 ㎡

Occupancy rate

92.0%

Total leasable area

3,157.92 ㎡

(based on leased area)

Collateral conditions

A lender of a non-recourse loan to Godo Kaisha Sapphire 1, the operator, is to

take out a pledge as a pledgee.

Special notes

None

Property name

ASTERI Tsurumai Dio

Location

16-5, Chiyoda- 3-chome,Naka-ku,Nagoya-shi, Aichi

Type of asset

Trust beneficiary right in real estate

Trustee

Mizuho Trust & Banking Co., Ltd.

Trust period

June 30, 2021 - March 31, 2034 (Scheduled)

Land

Land area

427.57 ㎡

Zoning

Commercial districts

FAR / building-to-land ratio

500%／80%

Type of possession

Ownership

Building

Structure / stories

15 stories above ground, RC-structure with flat roof

Total floor area

2,152.92 ㎡

Type

Residence

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			Completion date	April 21, 2021		Type of possession	Ownership
			Design	Tanaka Architect
			Construction		Magara Construction Co., Ltd.
			Constructional Inspector	CONFIRMATION INSPECTION TOKAI CO.
			PML		10.1% (Based on the engineering report prepared by Japan Constructive
				Inspect Association CO.,LTD)
	Appraisal value		1,580 million yen (as of February 1, 2024)
	Appraiser		JLL Morii Valuation & Advisory K.K.
	Tenant summary (as of February 29, 2024)
			Number of tenants	77
			Annual rent	69 million yen
			Tenant leasehold / security		3 million yen
			deposit
			Total leased area		1,828.47 ㎡		Occupancy rate	92.3%
			Total leasable area	1,980.30 ㎡		(based on leased area)
	Collateral conditions		A lender of a non-recourse loan to Godo Kaisha Sapphire 1, the operator, is to
		take out a pledge as a pledgee.
	Special notes	None
	Property name		ASTERI Tsurumai Tesera
	Location		15-24, Chiyoda 3-chome,Naka-ku,Nagoya-shi, Aichi
	Type of asset		Trust beneficiary right in real estate
	Trustee		Mizuho Trust & Banking Co., Ltd.
	Trust period		September 30, 2021 - March 31, 2034 (Scheduled)
	Land
			Land area	657.31 ㎡		Zoning		Commercial districts
			FAR / building-to-land ratio		500%／80%		Type of possession		Ownership
	Building
			Structure / stories		15 stories above ground, RC-structure with flat roof
			Total floor area	4,081.28 ㎡		Type	Residence
			Completion date	July 28, 2021		Type of possession	Ownership
			Design		Tanaka Architect
			Construction	Magara Construction Co., Ltd.
			Constructional Inspector	CONFIRMATION INSPECTION TOKAI CO.
			PML		10.0% (Based on the engineering report prepared by Japan Constructive
				Inspect Association CO.,LTD)
	Appraisal value		2,550 million yen (as of February 1, 2024)
	Appraiser		JLL Morii Valuation & Advisory K.K.
	Tenant summary (as of February 29, 2024)
			Number of tenants		130
			Annual rent		112 million yen
			Tenant leasehold / security	3 million yen
			deposit
			Total leased area	2,962.02 ㎡		Occupancy rate	93.3%
			Total leasable area	3,176.18 ㎡		(based on leased area)
	Collateral conditions		A lender of a non-recourse loan to Godo Kaisha Sapphire 1, the operator, is to
		take out a pledge as a pledgee.
	Special notes		None
	Property name		ASTERI Tsurumai Touria
	Location		24-17, Chiyoda 3-chome,Naka-ku,Nagoya-shi, Aichi
	Type of asset		Trust beneficiary right in real estate
	Trustee		Mizuho Trust & Banking Co., Ltd.
	Trust period		June 30, 2021 - March 31, 2034 (Scheduled)

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Land

Land area

585.57 ㎡

Zoning

Commercial districts

FAR / building-to-land ratio

500%／80%

Type of possession

Ownership

Building

Structure / stories

15 stories above ground, RC-structure with flat roof

Total floor area

3,380.35 ㎡

Type

Residence

Completion date

May 10, 2021

Type of possession

Ownership

Design

TSUIKI IKKYUKENCHIKUSHIJIMUSHO, KK

Construction

MURANAKA KENSETU CO., LTD.

Constructional Inspector

CONFIRMATION INSPECTION TOKAI CO.

PML

9.8% (Based on the engineering report prepared by Japan Constructive

Inspect Association CO.,LTD)

Appraisal value

2,140 million yen (as of February 1, 2024)

Appraiser

JLL Morii Valuation & Advisory K.K.

Tenant summary (as of February 29, 2024)

Number of tenants

115

Annual rent

93 million yen

Tenant leasehold / security

2 million yen

deposit

Total leased area

2,469.66 ㎡

Occupancy rate

91.4%

Total leasable area

2,703.12 ㎡

(based on leased area)

Collateral conditions

A lender of a non-recourse loan to Godo Kaisha Sapphire 1, the operator, is to

take out a pledge as a pledgee.

Special notes

None

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(b) Summary of underlying assets in Godo Kaisha Sapphire 2

Property name

ADVANCE Kyoto Detendu

Location

40 kisshoinkujocho Minami-ku,Kyoto-shi, Kyoto

Type of asset

Trust beneficiary right in real estate

Trustee

Mitsubishi UFJ Trust and Banking Corporation

Trust period

April 14, 2023 - March 31, 2034 (Scheduled)

Land

㎡

Commercial districts・

Land area

722.91

Zoning

Quasi-industrial districts

FAR / building-to-land ratio

500％・200%／80%・

Type of possession

Ownership

60%

Building

Structure / stories

9 stories above ground, RC-structure with flat roof

Total floor area

3,846.05 ㎡

Type

Residence

Completion date

October 11, 2022

Type of possession

Ownership

Design

SUPESUGURAFITI IKKYUKENCHIKUSHIJIMUSHO, YK

Construction

MELDIA Development ＆ Construction CO.,LTD.

Constructional Inspector

KYOTO ORGANIZATION OF CONFIRMATION & INSPECTION CO.,LTD.

PML

9.7% (Based on the engineering report prepared by Japan Constructive

Inspect Association CO.,LTD)

Appraisal value

2,170 million yen (as of February 1, 2024)

Appraiser

JLL Morii Valuation & Advisory K.K.

Tenant summary (as of February 29, 2024)

Number of tenants

106

Annual rent

96 million yen

Tenant leasehold / security

0 yen

deposit

Total leased area

2,710.56 ㎡

Occupancy rate

99.1%

Total leasable area

2,735.64 ㎡

(based on leased area)

Collateral conditions

A lender of a non-recourse loan to Godo Kaisha Sapphire 2, the operator, is to

take out a pledge as a pledgee.

 This land is within a well-known buried cultural property site under the

Special notes

Act on the Protection of Cultural Properties. For that reason, any

engineering work on the land requires at least 60 days' notice prior to the

start of such work.

Property name

ADVANCE Uemachidai Stadt

Location

1-7, Uehonmachinishi 4-chome,Chuo-ku,Osaka-shi, Osaka

Type of asset

Trust beneficiary right in real estate

Trustee

Mizuho Trust & Banking Co., Ltd.

Trust period

July 29, 2022 - March 31, 2034 (Scheduled)

Land

Land area

299.97 ㎡

Zoning

Commercial districts

FAR / building-to-land ratio

600%・400%／80%

Type of possession

Ownership

Building

Structure / stories

15 stories above ground, RC-structure with flat roof・1 story above ground,

RC-structure with flat roof

Total floor area

2,096.63

㎡

Type

Residence・Garbage

storage

Completion date

July 4, 2022

Type of possession

Ownership

Design

Toki Sekkei

Construction

Universal Construction Co., Ltd.

Constructional Inspector

Nihon Kakunin Architectures Inspection Center Co.,Ltd

PML

8.3% (Based on the engineering report prepared by Japan Constructive

Inspect Association CO.,LTD)

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