Japan Prime Realty Investment : Notice Concerning Acquisition and Sale of Properties (Conclusion of Contracts)

December 23, 2021

For Translation Purpose Only

For Immediate Release

Japan Prime Realty Investment Corporation Yoshihiro Jozaki, Executive Officer (Securities Code: 8955)

Asset Management Company:

Tokyo Realty Investment Management, Inc. Yoshihiro Jozaki, President and CEO Inquiries: Yoshinaga Nomura, Director and CFO (TEL: [phone])

Notice Concerning Acquisition and Sale of Properties (Conclusion of Contracts)

(Acquisition of "GRAND FRONT OSAKA" and "Tokyo Tatemono Higashi Shibuya Bldg."

and Sale of "Tokyo Tatemono Honmachi Bldg." and "JPR Umeda Loft Bldg.")

Japan Prime Realty Investment Corporation ("JPR") announced that Tokyo Realty Investment Management, Inc. (TRIM), the asset management company to which JPR entrusts management of its assets, today decided to implement acquisition and sale of properties (hereinafter respectively referred to as the "Acquisition" and the "Sale" and collectively referred to as "Asset Replacement") as described below.

Details

I. Purpose of the Asset Replacement and Overview of Transactions

1. Purpose of the Asset Replacement

The Asset Replacement will be undertaken based on the operational and investment standards established in the Asset Management Guidelines of JPR.

JPR decided to acquire a leading large-scale complex in Osaka and a blue-chip office property located in central Tokyo and sell an old office property and a retail property in other cities by leveraging the pipeline of its sponsors with an aim to enhance the portfolio quality, which should contribute to JPR's stable growth over the medium to long term. The improvement effect of the Asset Replacement on portfolio indicators can be found below. JPR aims to continue to build a strong and solid portfolio through property acquisition and asset replacement by utilizing the pipeline of its sponsors.

Effect of the Asset Replacement

		Before the Asset			After the Asset			Change
		Replacement			Replacement
Asset size (based on (planned)		472.9 billion yen		488.3 billion yen		+15.4 billion yen
acquisition price)
Ratio of Tokyo area	85.6%		85.2%			-0.4 pt
Ratio of office assets	77.9%		81.2%			+3.3 pt
Average building age		24.6 years		23.5 years		-1.1 years

(Note) Average building age is assumed as of December 23, 2021. Average building age after the Asset Replacement is calculated based on the assumption that the Asset Replacement has been completed.

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Note: This document is a press release for a public announcement regarding JPR's acquisition and sale of properties (conclusion of contracts) and has not been prepared for the purpose of soliciting any investment.

2. Acquisition of GRAND FRONT OSAKA (Note 1)

JPR will acquire from Tokyo Tatemono Co., Ltd. (the Main Sponsor) a rare, large-scale commercial complex composed mainly of offices, as well as retail facilities and a hotel which was completed in 2013 and is directly connected to JR Osaka Station.

This property is directly connected to JR Osaka Station via a pedestrian deck and close to Osaka Umeda Station on the Hankyu lines and Hanshin lines, and Umeda Station on the Osaka Metro Lines and has excellent transportation convenience.The property comprising three super high-rise towers is an urban large-scale complex that was developed under a project in which the Main Sponsor participated as one of developers. GRAND FRONT OSAKA (Umekita Plaza and South Building) comprises the South Building that houses offices and retail facilities and Umekita Plaza mainly composed of commercial establishments. GRAND FRONT OSAKA (North Building) houses a hotel and Knowledge Capital, a business-academia collaboration base, in addition to offices and retail facilities. Knowledge Capital comprises various facilities, including offices of varied sizes, a salon, lab, showroom, and theater, aiming to promote intellectual

creation and exchange that generates new value.

The Umekita area where the property is located is positioned as the core project in Osaka City's growth

strategy hub special zone initiative and was redeveloped 2

Note: This document is a press release for a public announcement regarding JPR's acquisition and sale of properties (conclusion of contracts) and has not been prepared for the purpose of soliciting any investment.

with a view to enhancing the Kansai metropolitan area's international competitiveness. Moreover, with the development of the "Umekita 2nd Project and Umekita (Osaka) Underground" Station (Note 2) underway in an adjacent area, further development of the area is expected.

While the office floors of the respective buildings feature regular-shaped,non-pillar spaces, the buildings are equipped with excellent seismic performance and 72-hour emergency power generating facilities, boasting the largest- and highest-level office specifications in the Kansai region.

Further, they adopt highly effective CO2 reduction technologies, including natural ventilation, a highly efficient heat source, and a photovoltaic power generation system, while building a network of BEMS (Buildings Energy Management System) deployed in the respective buildings, thereby unifying the management of energy consumption of the whole property. On top of these, through the system called TMO (Town Management Organization), CO2 reduction management is conducted for the whole city in a bid to create a low carbon society.

(Note 1) GRAND FRONT OSAKA collectively refers to GRAND FRONT OSAKA (Umekita Plaza and South Building) and GRAND FRONT OSAKA (North Building), which are the assets to be acquired.

(Note 2) "Umekita (Osaka) Underground" Station will be integrated into the current JR Osaka Station and inaugurated under the name of "Osaka Station" in 2023.

3. Acquisition of Tokyo Tatemono Higashi Shibuya Bldg.

JPR will acquire from the Main Sponsor an office building in the Shibuya area whose redevelopment is accelerated.

This property is a 7-minute walk from Shibuya Station on the JR, Tokyo Metro and Tokyu Lines, providing access to main business districts and commercial centers in the Tokyo Metropolitan area without transfer.

Given that the Shibuya area has not only steady demand for offices mainly from IT companies but also several redevelopment projects underway, further development is expected down the road.

The property that faces Meiji-dori Avenue is a landmark that enjoys high visibility and prominence in the Higashi Shibuya area. Further, the building features high grade and an affluent ambience and comes with a public space and

an indoor drive-in parking lot for 41 cars. JPR rates it as a highly competitive property.

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Note: This document is a press release for a public announcement regarding JPR's acquisition and sale of properties (conclusion of contracts) and has not been prepared for the purpose of soliciting any investment.

Public Space

Entrance

Indoor Drive-in Parking Lot

4. Sale of Tokyo Tatemono Honmachi Bldg. and JPR Umeda Loft Bldg. (hereinafter collectively referred to as the "Properties to Be Sold")

JPR aims to systematically implement asset replacement while conducting rigorous, selective investment in blue- chip properties as a measure to build a strong and solid portfolio.

For the Properties to Be Sold, JPR considers whereas they are expected to contribute to revenues for the time being in its portfolio, anticipated growth in profitability may be limited due to several factors, including building age, and thus judged that replacing them with the highly competitive properties to be acquired from the main sponsor and selling them to others by leveraging the sponsor's support would help build a strong and stable portfolio.

Regarding the 4.45 billion yen of gain on sale of JPR Umeda Loft Bldg., as the properties will be sold over three periods, JPR will return a gain to unitholders in each period and internally reserve part of the gain by utilizing special taxation measures for the purpose of stabilizing future dividends.

II. Overview of the Acquisition

			GRAND FRONT	GRAND FRONT		Tokyo Tatemono Higashi
(1)		Property Name	OSAKA (Umekita Plaza	OSAKA (North
		Shibuya Bldg.
			and South Building)	Building)
(2)		Asset Type	Beneficiary interest in real estate		Real estate
(3)		Asset Class		Office
(4)		Acquisition Price	11,800 million yen	9,500 million yen		11,300 million yen
(5)		Appraisal Value	12,300 million yen	10,100 million yen		12,100 million yen
(6)		NOI Yield	3.5%	3.6%		4.2%
(7)		NOI Yield after	2.8%	2.8%		3.6%
	Depreciation
(8)		Contract Date		December 23, 2021
(9)		Planned	December 24, 2021		January 18, 2022
	Acquisition Date
(10)		Seller		Tokyo Tatemono Co., Ltd.
(11)		Funding	Loans and own funds		To be determined
(12)		Payment Method	Lump-sum payment at the time of delivery
(Note 1)	"Acquisition Price" excludes acquisition costs, property taxes, city planning taxes and consumption taxes.

(Note 2) For the formula used to calculate "NOI Yield" and "NOI Yield after Depreciation," please refer to "IV. 4. Estimated Cash Flows" and "V. 3. Estimated Cash Flows" below.

(Note 3) For "Appraisal Value," the appraisal date is November 30, 2021.

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Note: This document is a press release for a public announcement regarding JPR's acquisition and sale of properties (conclusion of contracts) and has not been prepared for the purpose of soliciting any investment.

III. Overview of the Sale

(1)		Property Name		Tokyo Tatemono Honmachi Bldg.	JPR Umeda Loft Bldg.
(2)		Asset Type		Beneficiary interest in real estate
(3)		Asset Class		Office	Retail
(4)		Sale Price		3,600 million yen	17,500 million yen
(5)		Appraisal Value		3,580 million yen	14,000 million yen
(6)		Planned Book Value		4,442 million yen	12,434 million yen
(7)		Planned Gain on Sale		-852 million yen	4,450 million yen
(8)		Contract Date		December 23, 2021
					(1) December 24, 2021 (40%)
(9)		Planned Sale Date		December 24, 2021	(2) June 30, 2022 (30%)
					(3) December 23, 2022 (30%)
(10)		Buyer		Tokyo Tatemono Co., Ltd.	MBS Media Holdings, Inc.
(11)		Payment Method		Lump-sum payment at the time of	Lump-sum payment at the
		delivery	respective times of delivery above
(Note 1)	Amounts are rounded down to the nearest million yen.
(Note 2)	"Sale Price" excludes property taxes, city planning taxes, and consumption taxes. Regarding JPR Umeda Loft Bldg.,
		the sale prices are 1) 7,000 million yen for December 24, 2021, 2) 5,250 million yen for June 30, 2022, and 3) 5,250
		million yen for December 23, 2022.
(Note 3)	For "Appraisal Value," the appraisal date is November 1, 2021.
(Note 4)	"Planned Book Value" indicates the assumed book value as of the planned sale date.
(Note 5)	"Planned Gain on Sale" indicates the amount obtained by subtracting each planned book value and estimated sale
		expenses from each Sale Price.

IV. Acquisition of GRAND FRONT OSAKA

1. Details of Property for Acquisition

1. GRAND FRONT OSAKA (Umekita Plaza and South Building)

1) Property Name/Location, Etc.

	Property Name		GRAND FRONT OSAKA (Umekita Plaza and South Building)
	Location		4-1Ofuka-cho,Kita-ku, Osaka City, Osaka Prefecture (Umekita Plaza)
		4-20Ofuka-cho,Kita-ku, Osaka City, Osaka Prefecture (South Building)
	Asset Type		Beneficiary interest in real estate
	Trustee		Sumitomo Mitsui Trust Bank
	Trust Period		December 12, 2014 ~ November 29, 2024
	2) Land/Buildings
	Asset Class		Retail/bicycle parking lot (Umekita Plaza)
		Office/retail/parking lot (South Building)
	Type of Structure		RC, Steel construction flat roofed, B2/2F (Umekita Plaza)
		Steel construction, SRC flat roofed, B3/38F (South Building)
			Land:	Ownership	(ownership interest: 4.9%)
	Type of Ownership			Leasehold rights (ownership interest: 4.9%)
			Building: Ownership	(ownership interest: 4.9%)
			Land:	Total Site Area		20,488.08 m2	(including 9,917 m2 of leased land)
	Site Area		Building: Gross Floor Area	10,226.10 m2	(Umekita Plaza)
				Gross Floor Area	181,371.39 m2	(South Building)

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Note: This document is a press release for a public announcement regarding JPR's acquisition and sale of properties (conclusion of contracts) and has not been prepared for the purpose of soliciting any investment.