July 6, 2022
To all concerned parties:
Investment Corporation
Industrial & Infrastructure Fund Investment Corporation
(Tokyo Stock Exchange Company Code: 3249)
Representative: | Kumi Honda, Executive Director |
URL: https://www.iif-reit.com/english/ | |
Asset Management Company | |
KJR Management | |
Representative: | Naoki Suzuki, |
President & Representative Director | |
Inquiries: | Hidehiko Ueda, |
Head of Industrial Division |
TEL: +81-3-5293-7091
Notice Concerning Disposition of One Property in Japan
【IIF Osaka Nanko IT Solution Center】
Industrial & Infrastructure Fund Investment Corporation ("IIF") announced today that KJR Management, IIF's asset manager (the "Asset Manager"), decided to dispose (the" Anticipated Disposition ") trust beneficiary rights in real estate (the" Property to be disposed" or the "Property") as outlined below.
1. Summary of the Anticipated Disposition
Disposition | Book value | Difference between | Appraisal value | Contract | Delivery | |||
Property | price | disposition price and | ||||||
name | Type of asset | (Note 1) | (Note 2) | book value (Note 3) | (survey price) | signing date | date | Buyer |
(million yen) | (million yen) | (scheduled) | (scheduled) | |||||
(million yen) | (million yen) | |||||||
IIF Osaka | Trust | Special Purpose | ||||||
Nanko IT | beneficiary | 2,700 | 1,156 | 1,544 | 2,420 | July 8, | August 17, | Company |
Solution | right in real | 2022 | 2022 | (Not disclosed) | ||||
Center | estate | (Note 4) | ||||||
(Note 1) The disposition price excludes expenses related to the disposition.
(Note 2) The book value is as of January 31, 2022.
(Note 3) The difference between disposition price and book value is shown for reference. The actual gain on sale is different from that value.
(Note 4) The buyer's profile cannot be disclosed as we have not obtained consent from the buyer with respect to disclosure. For the details, please refer to the following "4. Profile of Buyer".
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2. Reasons for Disposition
IIF has decided to dispose of this property from the viewpoint of creating a stable portfolio in med- to-long term. The Property has been under management since its acquisition in February 2013, however, risks such as decrease in future cash flow and tenant leaving are concerned as the fixed-term lease agreement with the current tenant expires at the end of February 2023, thus we have considered the future management policy of the Property. On the other hand, the building specifications and location characteristics of the Property, compared to the latest data centers, are insufficient in terms of building structure, floor height, load-bearing capacity, and securing available electricity supply, etc. Moreover, it is difficult to reconstruct the Property into the latest-model data center or convert it to other uses such as office, etc., in terms of its location characteristics and profitability. Furthermore, in the event of tenant replacement in the future, it is assumed that capital expenditures are incurred and the period to recruit new tenant takes longer.
As a result of comprehensively taking the above into consideration, we have determined that an early disposition of the Property at a price significantly higher than its book value and appraisal value, compared to holding and managing the Property in mid-to-long term, contributes to improving unitholder's value.
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3. Information about Property to be disposed
Property name | IIF Osaka Nanko IT Solution Center | |||||||||||
Type of asset | Trust beneficiary right in real estate | |||||||||||
Trustee | Mitsubishi UFJ Trust and Banking Corporation | |||||||||||
Location | 1-1-23,Nanko-Kita,Suminoe-ku,Osaka-shi, Osaka | |||||||||||
Acquisition date | February 7, 2013 | |||||||||||
Acquisition price | 1,150 million yen | |||||||||||
Book value | 1,156 million yen(As of January 31, 2022) | |||||||||||
Land area | 13,200.07 m2 | |||||||||||
Zoning | Semi-industrial area/Exclusive industrial area | |||||||||||
Land | Floor area ratio/ | 400% (Note 1) /70% | ||||||||||
building-to-land ratio | ||||||||||||
Type of possession | Ownership | |||||||||||
Building structure/ | Main Building:1-story basement and 6-story above ground: steel- | |||||||||||
framed & reinforced concrete building with deck roofing | ||||||||||||
stories | ||||||||||||
Attached Building: Reinforced concreate structure with deck roof | ||||||||||||
Construction | Main Building: March 26, 1992 | |||||||||||
completion | Attached Building: March 31, 1992 | |||||||||||
Building | Total floor area | 18,429.14 ㎡ | ||||||||||
Type of possession | Ownership | |||||||||||
Use | Main Building: Office | |||||||||||
Attached Building: Guard station | ||||||||||||
Earthquake PML | 5.4% | |||||||||||
Tenant | Nomura Research Institute, Ltd (One company) | |||||||||||
(Number of tenants) | ||||||||||||
Total rental business | Not disclosed (Note 2) | |||||||||||
revenue(annual) | ||||||||||||
Tenant | Security deposit | Not disclosed (Note 2) | ||||||||||
summary | Total leased area | 18,429.14 m2 | ||||||||||
Total leasable area | 18,429.14m2 | |||||||||||
July 31, | January 31, | July 31, | January 31, | Current | ||||||||
Occupancy rate | 2020 | 2021 | 2021 | 2022 | date | |||||||
(based on leased area) | 100% | 100% | 100% | 100% | 100% | |||||||
Collateral conditions | None | |||||||||||
Special notes | None |
(Note 1)The floor area ration of the Property is expanded to 400% pursuant to the "Sakishima Cosmosquare Area Project" though the original ratio is 281.62%.
(Note 2)This is not disclosed as we have not obtained the tenant's consent for disclosure.
4. Profile of Buyer
The buyer of the Property is a special purpose company formed in Japan by an overseas operating company, but the buyer's profile cannot be disclosed as we have not obtained consent from the buyer with respect to disclosure. There are no notable capital, personal or business relationships between IIF / the Asset Manager and the buyer, and there are no notable capital, personal or business relationships between interested parties and affiliated companies of IIF / the Asset Manager and those of the buyer. None of the buyer, its interested parties or its affiliated companies falls under the category of related parties of IIF / the Asset Manager.
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5. Broker
- Profile of the Broker
(1) | Name | Jones Lang LaSalle K.K. | |
(2) | Location | 2-13-10 Nagatacho, Chiyoda-ku, Tokyo | |
(3) | Name and Title of | President and Representative Director: Toshinobu Kasai | |
Representatives | |||
Consultancy and research of real estate investment | |||
Real estate sales, exchanges, leasing and management, and agency & | |||
(4) | Business | brokerage related to these businesses | |
Valuation and consultancy of real estate | |||
All businesses related to or incidental to the preceding items | |||
(5) | Capital | 195 million yen (as of June 30, 2022) | |
(6) | Date Established | April 23, 1985 | |
(7) | Relationship with IIF or Asset Manager | ||
There is no capital relationship to note between IIF / the asset manager and | |||
Capital Relationship | the relevant company. In addition, there are no noteworthy capital | ||
relationships between interested parties and affiliated companies of IIF / the | |||
asset manager and those of the relevant company. | |||
Personal Relationship | There is no personal relationship to note between IIF / the asset manager and | ||
the relevant company. | |||
Business Relationship | There is no business relationship to note between IIF / the asset manager and | ||
the relevant company. | |||
The relevant company does not fall under the category of a related party of IIF | |||
Related Parties | / the asset manager. In addition, none of the related parties and affiliated | ||
Relationship | companies of the relevant company fall under the category of the related | ||
parties of IIF/ the asset manager. | |||
(ii) | Commission | ||
The commission pertaining to this transaction cannot be disclosed as we have not obtained the | |||
necessary permission from the broker of the transaction to disclose the commission. |
6. Matters relating to Forward Commitment Contracts
The purchase and sale agreement concerning the Anticipated Disposition falls within the definition of forward commitment contract, etc. (Note) as stipulated in the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc. In the case of a material breach of the contract (including a material breach of the representations and warranties) caused intentionally or negligently by IIF or the buyer, IIF or the buyer may notify fulfillment or correction to the breaching party in writing specifically indicating the breach for a reasonable period. In the event that such breach is not fulfilled or corrected within the period of such notice, the sale and purchase agreement may be cancelled. The breaching party shall compensate damages that the other party suffer due to or related to the breach under the contract (including the case that representations and warranties made in the agreement are untrue in any material respect) up to total amount equivalent to 10% of the disposition price.
(Note) A forward commitment contract, etc. is defined as any purchase and sale agreement or other type of agreement that is signed a month or more in advance of the actual date of the settlement or delivery pursuant to the agreement.
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7. Means of Payment
10% of the disposition price is received as a deposit promptly after execution of purchasing and sales agreement but by July 25, 2022. Remaining 90% of disposition price is received on the scheduled date of delivery. In the event that the buyer does not pay the deposit by the due date described above, IIF may cancel immediately the agreement without notification. In the case, the buyer shall pay a penalty equivalent to 10% of the disposition price to IIF.
8. Scheduled Date of Disposition
IIF Osaka Nanko IT Solution Center | ||
Contract signing date (scheduled) | July 8, 2022 | |
Payment date of deposit (scheduled) | July 25, 2022 | |
Payment date of remaining balance (scheduled) | August 17, | 2022 |
Delivery date (scheduled) | August 17, | 2022 |
9. Future Outlook of IIF
In connection with the disposition, a gain on sales of real estate is scheduled to be recorded in the fiscal period ending January 31, 2023 (31st fiscal period), and a certain level of increase in operating revenues, etc. is expected. On the other hand, for the fiscal period ending July 31, 2022 (30th Fiscal Period) and the fiscal period ending January 31, 2023 (31st Fiscal Period), we expect to incur temporary expenses such as demolition costs related to the redevelopment of IIF Atsugi Logistics Center III and IIF Hamura Logistics Center, and repair expenses and utilities costs related to IIF Shonan Health Innovation Park. In response to the increase in expenses, we plan to make a temporary distribution in excess of profits (distribution in reduction of capital contribution under the tax law) for the purpose of stabilizing the level of distribution. In addition, as of today, we are reviewing the forecasts of operating status, considering the impact of further increases in utility costs due to soaring energy prices and expenses related to redevelopment, etc., which are yet to be determined at this time. The updated forecast of operating status will be informed as details of the impact become clear.
Since the disposition is scheduled to be executed on August 17, 2022, the impact on the operating conditions for the fiscal period ending July 31, 2022 (30th fiscal period) is not material.
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Industrial & Infrastructure Fund Investment Corporation published this content on 06 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 July 2022 06:43:05 UTC.