This translation of the original Japanese notice is provided solely for information purposes. Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
November 21, 2022
REIT Issuer: Daiwa Office Investment Corporation (Stock Code No.: 8976)
Representative: Keiichi Sakai, Executive Director
Asset Manager: Daiwa Real Estate Asset Management Co. Ltd.
Representative: Yoshiki Nishigaki, President and Representative Director
Inquiries to: Kentaro Azumi, General Manager, Corporate Division (Tel: +81-3-6215-9649)
Notice Concerning Divestment of Asset (Daiwa SHIBUYA EDGE)
Daiwa Office Investment Corporation (the "Investment Corporation") hereby announces that Daiwa Real Estate Asset Management Co. Ltd., to which the Investment Corporation entrusts management of its assets (the "Asset Manager"), has decided today to divest trust beneficial interest in real estate (the "Divestment") as follows.
1. Summary of the Divestment
Asset Name | Daiwa SHIBUYA EDGE (the "Property") |
Type of Asset | Trust beneficial interest in domestic real estate |
Sale Price | 7,313 million yen (excluding settlement amounts of fixed asset tax and city planning tax |
and consumption tax.) | |
Book Value | 5,547 million yen (As of May 31, 2022) |
Difference between Sale | 1,765 million yen (Note 1) |
Price and Book Value | |
Date of Conclusion of | November 21, 2022 |
Sales Agreement | |
Scheduled Delivery Date | December 21, 2022 |
Purchaser | Not disclosed (Note 2) |
Payment Method | Lump-sum payment at the time of delivery |
(Note 1) The figure differs from a capital gain from divestment. It is a simple calculation of difference between the sale price and the book value as of May 31, 2022, for reference.
(Note 2) The purchaser is a domestic corporation, but the name is not disclosed as consent for disclosure has not been obtained from the purchaser.
- The intermediary for the Divestment is neither an interested person, etc. as stipulated in the Order for Enforcement of the Act on Investment Trusts and Investment Corporations nor a related party as stipulated in the "rules on conflicts of interest," the Asset Manager's internal regulations.
2. Reason for the Divestment
The Investment Corporation decided the Divestment in line with its management policy, comprehensively taking into account the characteristics of the Property, measures on return of profits to unitholders, current and future portfolio strategy and trends in real estate market conditions for the improvement of unitholder value.
Since the acquisition of the Property, the property has maintained stable operations while replacing some tenants, contributing to the stability of the portfolio. In light of the current status of the management of the portfolio, after considering the level of yields on the property and potential for future stability and growth, it was determined that the Divestment is expected to be at a price significantly higher than the latest book value and real estate appraisal value. Therefore, it was determined that the evaluation of the property in the current trading market should be actualized and the profit from the Divestment should be returned to investors to stabilize the distribution, thereby contributing to the enhancement of investment value.
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3. Details of the Asset to Be Divested
Asset Name | Daiwa SHIBUYA EDGE | |
Type of Specified Asset | Trust beneficial interest in domestic real estate | |
Trustee | Sumitomo Mitsui Trust Bank, Limited | |
Maturity of Trust Period | August 31, 2025 | |
Location (Address) | 10-3 Udagawacho, Shibuya-ku, Tokyo | |
Use (Real Property Registry) | Office / Store / Parking | |
Ownership Form | Ownership | |
Site Area (Real Property Registry) | 527.65 m2 | |
Total Floor Area | 3,022.33 m2 | |
(Real Property Registry) | ||
Structure (Real Property Registry) | Reinforced concrete structure flat roof, 9 stories above ground and 1 below | |
Construction Date (Real | August 30, 2006 | |
Property Registry) | ||
Book Value | 5,547 million yen (May 31, 2022) | |
Appraisal Value | 5,480 million yen | |
(Date of Valuation) | (as of May 31, 2022) | |
Appraiser | JLL Morii Valuation & Advisory K.K. | |
Date of Delivery | December 21, 2022 | |
Summary of Tenants (as of September 30, 2022) | ||
Total Number of Tenants | 5 | |
Rent Revenue | 95 million yen (Note) | |
Security Deposit and | 196 million yen | |
Guaranty | ||
Total Leased Floor Space | 2,480.65 m2 | |
Total Leasable Floor Space | 2,480.65 m2 | |
Occupancy Rate | 100.0% |
(Note) Rent revenue is for the fiscal period ended May 2022 (from December 1, 2021, to May 31, 2022).
-
Details of the Purchaser
The purchaser is a domestic corporation. However, because consent on disclosure of its name, etc. has not been obtained, such information is not disclosed. There is no relationship required to be disclosed between the Investment Corporation/Asset Manager and the purchaser in terms of capital, personnel and business relationships. The Divestment is not a transaction with any persons having a special interest in the Investment Corporation or the Asset Manager. - Future Prospects
The Divestment of the Property has no impact on the management status for the fiscal period ended November 2022 (34th fiscal period) as the delivery is taking place on December 21, 2022. Gain from sale of real estate properties (approximately 1,518 million yen) from the Divestment is scheduled to be recorded in the fiscal period ending May 2023 (35th fiscal period). A potion of the gain is scheduled to be allocated to internal reserves, but is yet to be determined at present. The amount of internal reserves is currently being examined in conjunction with the increase in utilities charges due to the rise in energy prices and the management status of existing properties. The impact on the management status and distribution for the said fiscal period is currently being evaluated, and they are scheduled to be announced at the time of announcement of the final accounts for the fiscal period ended November 2022 (34th Fiscal Period), which is scheduled to be announced on January 20, 2023. In the event of any future revisions to laws, regulations, taxation systems, accounting standards, etc., the calculation will be based on the content of such revisions.
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6. Summary of Appraisal Report
Appraiser | JLL Morii Valuation & Advisory K.K. | ||||||||
Appraisal Date | May 31, 2022 | ||||||||
Appraised Value | 5,480 million yen | ||||||||
Items | (million yen) | Outline, etc. | |||||||
(Note 1) | |||||||||
Income Approach Value | 5,480 | Estimated equally based on direct capitalization value | |||||||
and discounted cash flow value. | |||||||||
Direct Capitalization Value | 5,590 | ||||||||
(1) Operating Revenue | 240 | ||||||||
Potential Annual Rent | 253 | Assessed rent, which is stable over the medium to long | |||||||
Revenue | term, etc. | ||||||||
Amount of Loss due to | 12 | Assessed by taking into account the standard vacancy | |||||||
Vacancy | rate and specific factors of the subject property. | ||||||||
(2) Operating Expenses | 49 | ||||||||
Maintenance and | 13 | Assessed based on actual historical data and the level | |||||||
Operation Cost | |||||||||
(Note 2) | of peer properties. | ||||||||
PM Fee | |||||||||
Water & Utility Charges | 13 | Assessed based on actual historical data and the level | |||||||
of peer properties. | |||||||||
Repair | 1 | Referred to the ER estimate, assessed as 30% of the | |||||||
levelled amount. | |||||||||
Leasing Fee | 2 | Amount equivalent to new monthly rent for 1.2 months. | |||||||
Tax | 17 | Based on actual historical amount. | |||||||
Non-life Insurance | 0 | Deemed actual amount, etc. as being appropriate. | |||||||
Others | 0 | ||||||||
(3) Net Operating Revenue | 190 | ||||||||
(4) Profit from | 1 | Return yield is assumed at 1.0%. | |||||||
deposits/guarantees | |||||||||
(5) Capital Expenditures | 2 | Amount equivalent to 70% | of the | levelled amount | |||||
based on the estimate on the ER. | |||||||||
(6) Net Revenue ((3)+(4)-(5)) | 190 | ||||||||
(7) Capitalization Rate | 3.4% | Assessed by reflecting fluctuation risks of income and | |||||||
principal in the discount rate. | |||||||||
Discounted Cash Flow Value | 5,370 | ||||||||
Assessed by comprehensively taking into account the | |||||||||
Discount Rate | 3.2% | market trends, etc. after considering the regional | |||||||
factors, specific factors, etc. of the subject property. | |||||||||
Assessed | considering | future | uncertainties, | ||||||
Terminal Capitalization Rate | 3.6% | deterioration of buildings and divestment risks, based | |||||||
on capitalization rate. | |||||||||
Integrated Value by Using Cost | 4,020 | ||||||||
Method | |||||||||
Ratio of Land | 91.3% | ||||||||
Ratio of Building | 8.7% | ||||||||
Other, things appraiser noted upon valuation | - |
(Note 1) The above revenue and expenses are based on the appraisal report and are not the figures forecasted by the Investment Corporation or the Asset Manager.
(Note 2) With no PM's permission given for a specific disclosure of the PM fees, there is no disclosure of the breakdown of the fees. Disclosure of the PM fee figures in a specific manner may cause adverse effects on other business operations of the PM, resulting in a negative impact on the planned efficient operation based on the maintenance policy of the investment-target property of the Investment Corporation that the Investment Corporation is to contract with the PM. This may in turn further cause adverse effects on unitholders' interests. Therefore, the figure presented in this column is calculated together with maintenance and operation costs.
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[Reference Material] Portfolio Overview After the Divestment
Region | Name of Property | Date of (Scheduled) | Acquisition Price | Investment Ratio |
Acquisition | (million yen) | (Note 4) | ||
Daiwa Ginza | Oct 21, 2005 | 14,100.0 | 3.1% | |
Daiwa Ginza Annex | Oct 21, 2005 | 3,050.0 | 0.7% | |
Daiwa Shibaura | Oct 21, 2005 | 8,265.0 | 1.8% | |
Daiwa Sarugakucho | Oct 21, 2005/ | 3,190.0 | 0.7% | |
Mar 30, 2012 | ||||
Daiwa A Hamamatsucho | Oct 21, 2005 | 2,865.0 | 0.6% | |
Daiwa Jingumae | Oct 21, 2005 | 2,800.0 | 0.6% | |
Daiwa Shibadaimon | Oct 21, 2005 | 2,578.0 | 0.6% | |
Daiwa Misakicho | Oct 21, 2005 | 2,346.0 | 0.5% | |
Daiwa Tsukijiekimae | Jan 27, 2006 | 1,560.0 | 0.3% | |
Daiwa Tsukiji | Jan 27, 2006 | 1,240.0 | 0.3% | |
Daiwa Tsukishima | Mar 24, 2006 | 7,840.0 | 1.7% | |
Daiwa Nihonbashi Horidomecho | May 1, 2006 | 2,520.0 | 0.5% | |
Daiwa Azabudai | May 1, 2006 | 1,600.0 | 0.3% | |
Shinjuku Maynds Tower | Jul 13/ Nov 26, 2007 | 66,900.0 | 14.5% | |
Daiwa Kodenmacho | Aug 31, 2007 | 2,460.0 | 0.5% | |
Daiwa Nishi-Shimbashi | Aug 13, 2010 | 5,000.0 | 1.1% | |
Five Central | ||||
Daiwa Kayabacho Building | Mar 25, 2011 | 5,600.0 | 1.2% | |
Wards of | ||||
Daiwa Jimbocho 3-chome | Mar 29, 2011 | 3,550.0 | 0.8% | |
Tokyo | ||||
E SPACE TOWER | Jul 8, 2011 | 24,000.0 | 5.2% | |
(Note 1) | ||||
Daiwa Nihonbashi Hongokucho | May 11, 2012 | 1,721.0 | 0.4% | |
shinyon curumu | Dec 3, 2012/ | 9,650.0 | 2.1% | |
Apr 12, 2013 | ||||
Daiwa Akasaka | Aug 9, 2013 | 9,200.0 | 2.0% | |
Daiwa Shibuya Miyamasuzaka | Sep 27, 2013 | 7,000.0 | 1.5% | |
Daiwa Azabu Terrace | Jul 4, 2014 | 14,000.0 | 3.0% | |
Daiwa Ebisu 4-chome | Dec 1, 2014 | 4,135.2 | 0.9% | |
LAQUAS Higashi Shinjuku | Dec 3, 2014 | 8,450.0 | 1.8% | |
Daiwa Aoyama | Mar 2, 2015 | 9,800.0 | 2.1% | |
Daiwa Shibuya Shinsen | Mar 2, 2015 | 4,800.0 | 1.0% | |
Daiwa Shibuya Square | May 1, 2015 | 16,000.0 | 3.5% | |
Daiwa River Gate | Jun 2, 2015 | 28,000.0 | 6.1% | |
Daiwa Hatchobori ekimae | Sep 11, 2015 | 2,871.0 | 0.6% | |
Daiwa Hatchobori ekimae West | Sep 11, 2015 | 1,647.0 | 0.4% | |
Daiwa Nishi-Shinjuku | Mar 29, 2016 | 13,710.0 | 3.0% | |
Kirin Nihonbashi Building | May 26, 2016 | 8,180.0 | 1.8% | |
Daiwa Higashi-Nihonbashi | Jun 1, 2016 | 6,370.0 | 1.4% | |
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Region | Name of Property | Date of Acquisition | Acquisition Price | Investment Ratio | |
(million yen) | (Note 4) | ||||
Daiwa Daikanyama | Jun 29, 2016 | 2,280.0 | 0.5% | ||
Daiwa Shinjuku West | Jul 21, 2016 | 942.0 | 0.2% | ||
Daiwa Kanda Mikuracho Building | Dec 21, 2016 | 1,592.0 | 0.3% | ||
Daiwa Kanda East | Jan 12, 2018 | 4,200.0 | 0.9% | ||
Daiwa Kandasudacho | Jun 7,2018/ Nov 1,2018 | 2,295.0 | 0.5% | ||
Daiwa Sasazuka Tower | Oct 30, 2018 | 15,500.0 | 3.4% | ||
Daiwa Sasazuka | Dec 27, 2018 | 3,000.0 | 0.7% | ||
Daiwa Harumi | Feb 27, 2019 | 11,200.0 | 2.4% | ||
Daiwa Mita 2-Chome | Jul 1, 2019 | 2,635.0 | 0.6% | ||
Nihonbashi Central Square | May 21, 2020 | 3,521.5 | 0.8% | ||
Nihonbashi-Bakurocho1-Chome | Nov 13, 2020 | 3,775.0 (note 5) | 0.8% | ||
Development Site (land) | |||||
Daiwa Kandabashi | Sep. 29,2021 | 1,970.0 | 0.4% | ||
Kandasudacho 2-Chome | Oct. 20,2021 | 10,600.0 (note 6) | 2.3% | ||
Development Site (land) | |||||
Total Number of Properties located in Five Central Wards of Tokyo: 48 | 370,508.7 | 80.4% | |||
Daiwa Higashi-Ikebukuro | Oct 21, 2005 | 2,958.0 | 0.6% | ||
Daiwa Shinagawa North | Jul 13, 2007 | 7,710.0 | 1.7% | ||
Daiwa Kamiooka | Mar 1, 2013 | 2,000.0 | 0.4% | ||
Greater Tokyo | Daiwa Ogikubo Tower | May 29, 2014 | 15,220.0 | 3.3% | |
Daiwa Meguro Square | May 1, 2015 | 5,600.0 | 1.2% | ||
(Note 2) | |||||
Daiwa Ogikubo | Jul 21, 2016 | 3,800.0 | 0.8% | ||
CONCURRED Yokohama | Jan 11, 2018 | 38,100.0 | 8.3% | ||
Daiwa Shinagawa Gotenyama | Sep 13, 2018 | 2,500.0 | 0.5% | ||
Daiwa Nakano-Sakaue | Dec 13, 2019 | 2,750.0 | 0.6% | ||
Total Number of Properties located in Greater Tokyo: 9 | 80,638.0 | 17.5% | |||
Major | Daiwa Kitahama | Aug 1, 2014 | 9,481.5 | 2.1% | |
Regional | |||||
Total Number of Properties located in Major Regional Cities: 1 | 9,481.5 | 2.1% | |||
Total Number of Properties: 58 | 460,628.2 | 100.0% |
(Note 1) "Five Central Wards of Tokyo" means Chiyoda-ku,Chuo-ku,Minato-ku,Shinjuku-ku, and Shibuya-ku.
(Note 2) "Greater Tokyo" means Tokyo (excluding the Five Central Wards of Tokyo), Kanagawa, Chiba, and Saitama prefectures. (Note 3) "Major Regional Cities" means Osaka area (i.e., Osaka, Kyoto and Hyogo Prefectures), Nagoya area (Aichi, Mie and
Gifu Prefectures), ordinance-designated cities, and core cities under the Local Autonomy Act.
(Note 4) Figures in the "Investment Ratio" column represent the percentage of the acquisition price of each property to the aggregate amount of the acquisition price and are rounded to the first decimal place. Please note that adding up of the investment ratio of the properties may not exactly match the investment ratio for each investment region or for the overall portfolio.
(Note 5) Only the acquisition price for development sites is indicated. For more details, please refer to "Notice Concerning Acquisition and Conclusion of Agreements Concerning Development Project (Nihonbashi-Bakurocho1-Chome Development Project)" announced on October 21, 2020 and "Notice Concerning Nihonbashi-Bakurocho1-Chome Development Project (Follow-Up)" announced on May 20, 2021.
(Note 6) Only the acquisition price for development sites is indicated. For more details, please refer to "Notice Concerning Asset Replacement and Conclusion of Agreements Concerning Development Project with World Holdings Group (Kandasudacho 2-Chome Development Project)" announced on October 20, 2021 and "Notice Concerning Partial Amendments to the Disclosed Matter of Kandasudacho 2-Chome Development Project" announced on June 21, 2022.
*Website URL of the Investment Corporation: https://www.daiwa-office.co.jp/en/
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Daiwa Office Investment Corporation published this content on 21 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 November 2022 06:38:04 UTC.