Japan Retail Fund Investment : Notice Concerning Acquisition of a Trust Beneficiary Right in the Real Estate in Japan (G-Bldg. Jingumae 08)（761KB）

December 19, 2018

To all concerned parties:

Investment Corporation

Japan Retail Fund Investment Corporation (Tokyo Stock Exchange Company Code: 8953）

Representative: Shuichi Namba, Executive Director

URL:http://www.jrf-reit.com/english/

Asset Management Company

Mitsubishi Corp.-UBS Realty Inc.

Representative: Katsuhisa Sakai, President & CEOInquiries:Keita Araki, Head of Retail Division

TEL: [phone]

Notice Concerning Acquisition of a Trust Beneficiary Right in the Real Estate in Japan (G-Bldg. Jingumae 08)

Japan Retail Fund Investment Corporation ("JRF") announced today that Mitsubishi Corp. - UBS Realty Inc., JRF's asset manager (the "Asset Manager"), determined to acquire a trust beneficiary right in the real estate of G-Bldg. Jingumae 08 (the "Property") as outlined below.

• 1. Overview of acquisition

  1)	Property type	Trust beneficiary right in the real estate
  2)	Property name	G-Bldg. Jingumae 08 (Note 1)
  3)	Location	25-5 Jingumae 3-chome, Shibuya-ku, Tokyo
  4)	Acquisition price (scheduled)	2,490 million yen
  5)	Appraisal value	2,580 million yen (as of December 1, 2018)
  6)	Contract completion date	December 21, 2018 (Scheduled)
  7)	Acquisition date (scheduled)	December 21, 2018 (Scheduled)
  8)	Seller	Not disclosed (Note 2)
  9)	Acquisition funds (scheduled)	Cash on hand (Scheduled)
  10)	Payment	Full payment at closing

  (Note 1) The current name of the property is different from G-Bldg. Jingumae 08, but the name shall be used by the Asset Manager following the acquisition.

  (Note 2) Not disclosed as the seller has not agreed to the disclosure.

• 2. Reasons for Acquisition

  JRF is optimizing its asset structure in response to changes in the environment surrounding retail properties including changes in demographics in Japan, expanding inbound tourism, advances in e-commerce, and increasing leisure time. To optimize its asset structure, JRF has divided its portfolio into Core, Secondary core, and Sub assets (Note and is focusing on the portfolio of Core properties in locations where people gather and that enable JRF to demonstrate its ability to attract people. As it increases the percentage of Core assets, JRF will place greater emphasis on its asset replacement strategy.

  Acquisition of the Property entails the acquisition of an asset categorized as a Prime property located in the Omotesando-Aoyama-Harajuku area, one of Japan's key retail centers, in accordance with the asset replacement strategy.

  For acquisition of the Property, JRF evaluated the following:

(Note) The Core asset category comprises Prime, Major Station, and Residential Station type properties; the Secondary core asset category comprises Suburban Mall and Value-added type properties; and the Sub asset category comprises GMS / Roadside type properties.

Highlight of acquisition

The Property is classified as a Prime property in the core asset category. It is located along Harajuku Street in the Omotesando-Aoyama-Harajuku area, one of Japan's key retail centers.

Attractiveness of market

 The Omotesando-Aoyama-Harajuku area where the Property is located is one of Japan's representative retail centers and has a high concentration of diverse tenants ranging from luxury to casual brands.

 Acquisition of the Property will bring JRF's investment in the Omotesando-Aoyama-Harajuku area to 113.5 billion yen (total of acquisition prices) in 16 properties. JRF has the most properties in this area and is highly familiar with its trends.

Attractiveness of location  The Property is well-located, about a six-minute walk from the Tokyo Metro Meiji-jingumae Station and about a nine-minute walk from JR Harajuku Station.

 Harajuku Street, east of Meiji Street, has a high concentration of small apparel shops (vintage clothing, sneakers, etc.) with high levels of customer preference as well as hair salons, eating and drinking establishments, offices, and so on.

Attractiveness of facility

•  A highly adaptable floor plan that can be tailored to the needs of the businesses of tenants commonly seen in the vicinity (the standard floor area is approximately 50 tsubo)).

•  The building has high ceiling compared to similar structures and is a rarity with a roof balcony.

•  The exterior features an attractive design created by an apparel brand for its own use.

■ Property photo / Property Location Map

Property photo

Harajuku Street

Map (JRF's properties are indicated in red)

3.

Property Summary

Property name (Property Number)			G-Bldg. Jingumae 08 (U-58)
Type of asset			Trust beneficiary right in the real estate
Trustee			Mitsubishi UFJ Trust and Banking Corporation
Trust period			April 9, 2004 - December 31, 2028 (Scheduled)
Location			25-5 Jingumae 3-chome, Shibuya-ku, Tokyo
Land	Land area		289.58 m2	Zoning	Commercial district, Neighborhood commercial district
	FAR / building-to-land ratio		500%, 300%/80%	Type of possession	Ownership
Building	Structure / stories		5 stories above ground and 1 basement floor, SRC-structure with flat roof
	Total floor area		1,122.10 m2	Type	Office/Retail/Parking
	Completion date		June 23, 1998	Type of possession	Ownership
	Design		FIAC CO, LTD.
	Construction		Nakano Corporation
	Constructional Inspector		Shibuya-ku building official
	PML		7.1% (Based on the earthquake risk assessment (details) report dated November 2018 jointly prepared by Engineering and Risk Services Corporation and OYO RMS Corporation)
Acquisition price			2,490 million yen
Appraisal value			2,580 million yen (as of December 1, 2018)
Appraiser			CBRE K.K.
Tenant summary	Number of tenants (main tenants)		3 / (SEVEN-ELEVEN)
	Annual rent		95 million yen
	Tenant leasehold / security deposit		78 million yen
	Total leased area		802.40 m2	Occupancy rate (based on leased area)	100.0%
	Total leasable area		802.40 m2
	Main tenants	Period of contract	15.3 years (until September 30, 2031)
		Type of contract	Fixed-term lease contract
		Revision of rent	Not disclosed (Note)
		Early termination	Not disclosed (Note)
Collateral conditions			None
Special notes			An asbestos survey conducted by EAI Co., Ltd. confirmed the presence of asbestos in the finish material of the exterior walls, but EAI reported that the finish material is in good condition and normal users will not be exposed to asbestos. JRF plans to record as asset retirement obligations relating to expenses for removal of the asbestos from the fiscal period ending February 2019 (the 34th fiscal period).

・Figures of less than one million 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.

・"Land area" and "Total floor area" are based on descriptions in registry books.

・"Zoning" represents the classification of land by its use, stipulated in Section 1-1, Article 8 of the City Planning Act. ・"Number of tenants" represents the total number of lease contracts as of today.

・"Annual rent", "Tenant leasehold / security deposit", "Total leased area" and "Total leasable area" represent the total sums and areas in the lease contracts, etc. as of today.

(Note) Not disclosed as the tenant has not agreed to the disclosure.

• 4. Profile of the Seller

  The seller is a domestic Corporation but we have not obtained the necessary permission from the seller to disclose its name and other related information. There are no capital, personal or business relationships to note between JRF/the Asset Manager and the seller. In addition, the seller does not fall under the category of a related party of JRF/the Asset Manager.

• 5. Ownership History of the Building to Be Acquired

  The Property is not acquired from a seller which falls under the category of an interested party of JRF and the Asset Manager.

• 6. Broker

  None

• 7. Matters Concerning Forward Commitment

  None

• 8. Means of Payment

  Full payment at closing

• 9. Planned Acquisition Schedule

  Decision-making date	December 19, 2018
  Purchase agreement signing date	December 21, 2018 (Scheduled)
  Payment date	December 21, 2018 (Scheduled)
  Acquisition date	December 21, 2018 (Scheduled)

• 10. Future Outlook

  There will be minimal impact on our operating results for the February 2019 fiscal period (from September 1, 2018 to February 28, 2019) and August 2019 fiscal period (from March 1, 2019 to August 31, 2019); thus, we have made no revision to our forecasts.