Global One Real Estate Investment : GOR Announces Acquisition and Transfer of Trust Beneficiary Interest In Domestic Real Estate Through Exchange

Press Release

29 September 2023

REIT Issuer:

Global One Real Estate Investment Corp.

Securities Code: 8958

Representative: Akio Uchida, Executive Director

Asset Manager:

Global Alliance Realty Co., Ltd.

Representative: Kazunori Yamauchi, President

Contact: Gen Yamazaki

General Manager

REIT Finance Department

Tel: [phone]

GOR Announces Acquisition and Transfer of Trust Beneficiary Interest In

Domestic Real Estate Through Exchange

(Acquisition of Global One Ueno and Transfer of Yodoyabshi Flex Tower)

Global One Real Estate Investment Corp. ("GOR") announces today that Global Alliance Realty Co., Ltd. ("GAR"), the Asset Manager to which GOR entrusts the management of its assets, decided on the acquisition and transfer of trust beneficiary interest in domestic real estate through exchange (hereinafter, the acquisition of trust beneficiary interest in domestic real estate is referred to as the "Acquisition" and the transfer of trust beneficiary interest in domestic real estate as the "Transfer", and the Acquisition and the Transfer are collectively referred to as the "Exchange") as outlined below.

1. Outline of the Exchange

(1) Outline of the Acquisition

1)	Type of asset:	Trust beneficial interests in real estate
2)	Name of building:	Global One Ueno (*1)
3)	Location:	Taito-ku, Tokyo
4)	Acquisition price	9,900 million yen (*2)
5)	Brokerage:	None
Hereinafter, the above asset for acquisition is referred to as the "Asset Acquired".
(2) Outline of the Transfer
1)	Type of asset:	Trust beneficial interests in real estate
2)	Name of building:	Yodoyabashi Flex Tower
3)	Location:	Osaka City, Osaka

1. Acquisition date: 31 January 2008

5)	Transfer price:	9,833 million yen (*2)
6)	Book value:	6,260 million yen (*3)
7)	Gain/Loss on	(*4)
transfer:
8)	Brokerage:	None

Hereinafter, the above asset for transfer is referred to as the "Asset Transferred".

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(*1) As the name is scheduled to be changed to the one stated above after the acquisition by GOR, the name after the change is stated.

The name of the property as of today is "NBF Ueno Bldg." The entire building is also referred to as the "Higashi Ueno 4-chome Building".

(*2) The acquisition price and transfer price represent the prices described in the exchange agreement, which do not include related expenses, settlement amount of property tax and city planning tax, consumption tax and local consumption tax.

(*3) The figure is the book value as of 31 March 2023 and is stated as reference. Book value at the time of the transfer will be different.

(*4) The provisions of Article 50 of the Corporate Tax Law, "Inclusion in Deductible Expenses of the Depreciated Amount of Assets Acquired through Exchange", will be applied and the reduction entry will be made, and there will be no gain on the transfer.

1. Outline of the Exchange
2. 1. Destination of Exchange:
   2. Date of Contract:
   3. Expected Date of Delivery:
   4. Exchange Difference:
   5. Reduction Entry:

2. Reason for the Exchange

Nippon Building Fund Inc.

29 September 2023

30 November 2023

The exchange difference (67 million yen), which is the difference between the acquisition price of the Asset Acquired and the transfer price of the Asset Transferred, will be paid to Nippon Building Fund Inc. on the delivery date with cash on hand.

With respect to the Asset Acquired, the provisions of Article 50 of the Corporation Tax Law of Japan, "Deductible expenses for assets acquired through exchange" will be applied and 3,547 million yen of the gain on the transfer of the Asset Transferred will be recorded as reduction entry. Consequently, the book value of the Asset Acquired is expected to be 6,305 million yen before reflecting acquisition costs, etc.

GOR conducts the Exchange with an aim to enhance the quality of its portfolio properties from a medium- to long-term perspective, pursuant to the "Investment Policies and Investment Targets" stipulated in the Articles of Incorporation.

Having achieved its immediate goal of 200 billion yen in asset size, GOR set a medium- to long- term goal of 250 billion yen in asset size in November 2022 and implemented a major revision of its acquisition focus(*) toward achieving this goal. The Exchange is an initiative in line with this new portfolio strategy.

(*) "Future Portfolio Strategy" published on 17 November 2022

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Initial

criteria

Partial easing

Closer

Conveniently situated

(Close to railway stations in

major cities)

Unchanged

Newer

Recently built

Consider properties over 20 years old if in good location

Larger

Large sized office building (200 tsubo or more of the typical rentable floor area)

Consider mid-sized office

building

(100 tsubo or more of the typical rentable floor area)

Future

Major Revision

Focus on the competitiveness of each property based on area, location, building characteristics without being bound by external or quantitative criteria

*Maintain the portfolio's features (Closer, Newer, Larger) for the time being

Regarding the Asset Acquired, the provisions of Article 50 of the Corporation Tax Act, " Inclusion in Deductible Expenses of the Depreciated Amount of Assets Acquired through Exchange ", will be applied and a reduction entry will be made, which will enable GOR to ensure profitability beyond the depreciated yield of the Asset Transferred through the Exchange. In addition, as part of a series of transactions associated with the Exchange, we were able to acquire preferential negotiating rights for the acquisition of office buildings located in the three central wards of Tokyo. Thus, while the environment for acquiring properties remains severe, we implemented an initiative to secure opportunities to expand the size of our assets by acquiring preferential negotiating rights, which will help to enhance the revenue base and make our portfolio more profitable than that after the Exchange, as well as improving the profitability of our portfolio through the Exchange itself. In addition, for properties for which we have acquired preferential negotiating rights, we plan to conduct value-enhanced work to improve profitability by utilizing a bridge scheme, considering the current financing environment, current yield levels, etc.

	Before the Exchange	Asset Acquired	Asset Transferred	After the Exchange
	(*1)
Asset Size
1) Acquisition price (*2)	1) 201,999 million yen	1) 9,900 million yen	1) 7,834 million yen	1) 204,065 million yen
2) Appraisal value (*3)	2) 229,500 million yen	2) 11,500 million yen	2) 8,350 million yen	2) 232,650 million yen
NOI yield (*4)	4.1%	6.2%	4.8%	4.2%
NOI yield after depreciation (*4)	3.2%	5.3%	3.9%	3.3%
Building age (*5)	18.7 years on average	13.9 years	17.1 years	18.5 years on average
Total leasable area (*6)	12,464 sqm on average	8,504 sqm	7,432 sqm	12,553 sqm on average

(*1) Given the portfolio after the acquisition of Global One Nagoya Fushimi and the completion of the transfer of Otemachi First Square.

(*2) Calculated based on the sales price and the exchange price stated in the sales contracts and the Exchange Agreement.

(*3) Calculated based on the appraisal value as of 30 June 2023 for the Asset Acquired, that as of 30 September 2022 for Global One Nagoya Fushimi, and that as of the end of the period ended March 2023 for the other assets.

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(*4) Asset Acquired:	"NOI yield" = "Appraisal NOI" / "Acquisition price (after reduction entry)"
	"NOI yield after depreciation" = ("Appraisal NOI" - "Annual amount of depreciation
	calculated using the straight-line method corresponding to the useful life of the Asset
	Acquired") / "Acquisition price (after reduction entry)"
THE PEAK SAPPORO:	"NOI yield" = "Actual NOI from the date of property acquisition
		(December 7, 2022) to the end of the fiscal period (March 31, 2023)
		converted into the period (6 months)" multiplied by 2 / "Acquisition price"
		"NOI yield after depreciation" = ("Actual NOI from the date of acquisition
		(December 7, 2022) to the end of the fiscal period (March 31, 2023)
		converted into the period (6 months)" － "Actual depreciation from the
		date of acquisition (December 7, 2022) to the end of the fiscal period
		(March 31, 2023) converted into the period (6 months)") multiplied by 2
		/ "Acquisition price"
Global One Nagoya Fushimi: "NOI Yield" = "Estimated NOI" / "Acquisition Price"
		"NOI yield after depreciation" = ("Estimated NOI" － "Depreciation
		calculated by the straight-line method over the useful life of Global One
		Nagoya Fushimi") / "Acquisition Price"
Other assets:		"NOI yield" = "Actual NOI for the Period ended March 2023" multiplied
		by 2 / "Acquisition price"

"NOI yield after depreciation" = ("Actual NOI for the Period ended March 2023" － "Actual depreciation amount for the Period ended March 2023") multiplied by 2 / "Acquisition price"

(*5) As of 30 November 2023

(*6) As of 31 August 2023

The key determinant factors of the acquisition of the Asset Acquired include the following. Furthermore, the lessees of the Asset Acquired are deemed to comply with the tenant selection criteria of GOR described in the "Report on Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties" submitted on 27 June 2023.

1. District potential
   Ueno, where the Asset Acquired is located, is the northern gateway to Tokyo with terminal stations served by the Tohoku and Joetsu Shinkansen bullet trains, JR lines, private railways, and many subways, and is one of Tokyo's leading commercial areas. It is also widely recognized as a city of culture and art, with Ueno Park, museums, and art galleries. With the development of local industries since the Edo period, wholesale/retail, lodging/bar and restaurant service, and manufacturing industries are concentrated in the area, and many branches and branch offices of companies headquartered in the northern Kanto, Shinetsu, and Tohoku regions are also located here.
   In terms of office location, the area has solid tenant demand due to the concentration of companies in a wide range of industries and the low rent level relative to the convenience of transportation.
2. Location potential
   The property is located in a convenient location with excellent access to many train lines, including a 6-minute walk from Ueno Station on the JR Line, a 7-minute walk from Inaricho

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Station on the Tokyo Metro Ginza Line, and within walking distance of Ueno Station on the Tokyo Metro Ginza Line , Hibiya Line and Keisei Main Line and Asakusa Station on the Tsukuba Express Line, as well as the Iriya Exit on the Metropolitan Expressway Route 1 nearby, providing good access by car.

1. Property specifications
   The rental room specifications include a typical rentable floor area of 257 tsubo, effective ceiling height of 2,750 mm, free access floor of 100 mm and the shape of the rental room is a pillarless structure with excellent layout efficiency. The air conditioning system is individually controllable in 12 zones. It also has high seismic performance (CFT pillars and vibration control braces).
   In the Ueno area, where many small- and medium-scale buildings are older, there are only a limited number of recently constructed (built in 2010) large-scale buildings with high facility standards, such as the Asset Acquired, and we believe that this property will have a significant competitive edge in this area.

3. Details of Asset Acquired and Asset Transferred

(1) Asset Acquired

1) Type of specified asset, its name and location, etc.

Name of building	Global One Ueno
Type of specified asset	Trust beneficial interests in real estate
Trustee	Mitsubishi UFJ Trust and Banking Corporation
Trust period (*1)	30 November 2023 - 30 November 2033
Location	Residence indication: 24-11, Higashiueno 4-chome,Taito-ku, Tokyo
Land number: 38-2, Higashiueno 4-chome,Taito-ku, Tokyo
	Type of		Site rights (co-ownership interests) (*3)
Land (*2)	ownership
	Land area		2,405.22 sqm (entire building)
	Type of		Sectional ownership (1 basement floor, 1 partial
	ownership		ground floor, 4th - 13th floors)
	Use		Office
			15,467.77 sqm (entire building)
Building (*2)	Floor area		Of which, area subject to acquisition: 10,339.37
		sqm (*4)
	Date built		January 2010
	Structure		13-story plus 2 basement levels, SRC with a flat
		roof (entire building)
	Designer		Shimizu Corporation First-class Architect Office
	Construction firm		Shimizu Corporation
Acquisition price	9,900 million yen
Appraisal value	11,500 million yen
(Date of appraisal)	(As of 30 June 2023)
(Appraisal institution)	(JLL Morii Valuation & Advisory K.K.)

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