MORI TRUST Sogo Reit : Notice of Acquisition (Additional Acquisition of Tenjin Prime's Land)

November 17, 2021

Press Release

Issuer of Real Estate Investment Trust Securities

MORI TRUST Sogo Reit, Inc.

4-3-1 Toranomon, Minato-ku, Tokyo Masayuki Yagi,

Executive Director (TSE code 8961)

Asset Management Company:

MORI TRUST Asset Management Co., Ltd. Michio Yamamoto

President and Representative Director Contact:

Hiroshi Naito

General Manager, Strategic Management Department,

Sogo REIT Management Division

Phone: [phone]

Notice of Acquisition

(Additional Acquisition of Tenjin Prime's Land)

Tokyo, November 17, 2021-Mori Trust Asset Management Co., Ltd., the asset management company which manages assets on behalf of Mori Trust Sogo Reit, Inc. (MTR), has announced the acquisition of an asset. Details are as follows:

１．	Summary of the Acquisition（Plan）
	(1)	Type of asset:	Real estate trust beneficiary right
	(2)	Property name:	Tenjin Prime (Part of the Property's land)(Hereinafter "the Land")
	(3)	Acquisition price:	110 million yen (excluding purchase overheads and taxes)
	(4)	Scheduled contract date:	December 1, 2021
	(5)	Scheduled acquisition date:	December 1, 2021
	(6)	Seller:	Please refer 4. Seller Overview below
	(7)	Acquisition financing:	MTR's own funds (planned)
	(8)	Settlement method:	Single payment at the time of delivery

２． Reasons for the Acquisition

MTR acquired the real estate trust's beneficiary right for the Tenjin Prime (hereinafter the "Property") on July 12, 2012, and its trust fiduciary has been leasing the Land, which is part of the Property's premise, from its owner.

MTR has decided to acquire the Land after considering a notice, which MTR recently received from the owner, indicating an intent to transfer the Land according to the lease agreement thereof. This will improve liquidity because MTR holds ownership of all land lots associated with the Property as trust property, and in addition, it will contribute to an increase in the profits from MTR's real estate leasing business because the payment of rent is not required. Taking such advantages into account, MTR considers that the acquisition will contribute to improving unitholder value over the medium to long term.

Disclaimer:

This English language document is provided as a service and is not intended to be an official statement. Should a discrepancy be found, the Japanese original will always govern the meaning and interpretation.

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３． Details of Asset for Acquisition
	Date of trust		December 1, 2021 (planned)
	Trustee of trust	Sumitomo Mitsui Trust Bank, Limited (planned)
	Expiration of trust period	July 31, 2032 (planned)
		Land	2-139-1, Tenjin, Chuo-ku, Fukuoka
	Location	Building	－
		Address	－
	Real estate usage	－
	Ownership	Land	Ownership
	Building	－
	Area	Land	28.98 ㎡
	Building	－
	Construction		－
	Completion date	－
	Architect		－
	Construction company	－
	Construction inspection	－
	agency
			Appraisal value:115 million yen
			Appraisal date: September 30, 2021
			Appraisal agency: Japan Real Estate Institute
			Summary of appraisal:
	Appraisal value	Return according to the direct capitalization method
	118 million yen (capitalization rate: 3.5%)
			Return according to the DCF method
			112 million yen (discount rate: 3.4%, terminal capitalization rate:
			3.7%)
			Price based on the percentage method
			108 million yen
	Seismic risk (PML)	－
	Collateral		None
	Remarks		－

４． Seller Overview

The sellers are a private party, and because consents on disclosure are not able to be obtained, no details will be disclosed. In addition, there are no notable capital, human resources or business relationships among MTR, the Asset Manager and the sellers. The sellers are not related parties.

５． Status of owners, etc. of the property

The Property will not be acquired from a party who has a special interest in MTR or the asset management company.

６． Operating Forecasts

MTR has decided to leave its investment results forecast unchanged because the acquisition will have only a minor effect on its investment results for the fiscal period ending March 31, 2022 (from October 1, 2021 to March 31, 2022).

Disclaimer:

This English language document is provided as a service and is not intended to be an official statement. Should a discrepancy be found, the Japanese original will always govern the meaning and interpretation.

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Overview of Appraisal Report

				Name of appraisal agency				Japan Real Estate Institute
				Appraisal value					115,000 thousand yen
				Appraisal date					September 30, 2021
			Appraisal item			Amount			Appraisal grounds
					(thousand yen)
	Revenue price			115,000		Appraised by DFC method and direct capitalization
									method
		Price calculated by the direct			118,000
		capitalization approach
			Operating income			5,400	Appraised based on the current lease contracts.
				Potential gross rent			5,400		Determined as not applicable taking into account the
				income					status of lessees, content of contracts, etc.
				Losses due to			0
				vacancies, etc.
			Operating expenses			1,269
				Maintenance					Determined as not applicable taking into account the
				Property management			0		content of lease contracts, individuality of subject
				fees					properties, etc.
				Utilities costs			0		Not posted because the property is leasehold land.
				Repair costs			0		Not posted because the property is leasehold land.
				Advertisements for			0		Not posted because the property is leasehold land.
				leasing, etc.
										Appraised taking into account standard taxes
				Taxes			1,269		presented in materials on taxes and public dues, as
										well as tax sharing coordination measures.
				Insurance premiums			0	Not posted because the property is leasehold land.
				Other expenses			0	No other special expenses to be posted.
			Net	operating income from			4,131
			leasing (NOI)
			Profit through management			0		Not posted taking into account the content of the
			of temporary deposits, etc.				current lease contracts.
			Capital expenditure reserve			0		Not posted because the property is leasehold land.
			Net cash flow			4,131	Not posted because the property is leasehold land.
										Appraised by reflecting spreads attributable to
										locations, contracts and other conditions in base
			Capitalization rate			3.5%		yields expected from respective areas and factoring in
										future uncertainty, transaction yields from similar
										properties, etc.
		Price	calculated by the discounted			112,000
		cash flow (DCF) approach
										Assessed in consideration of the individuality of the
			Discount rate			3.4%		target
										property comprehensively, by reference to investment
										yields of similar properties.
										Assessed in consideration of future trends of
			Terminal capitalization rate			3.7%		investment yields general forecasts, etc.
						comprehensively, by reference to investment yields of
										similar properties.
	Price based on the percentage		108,000
	method
		Ratio of land			108,000
		Ratio of building			60%

Disclaimer:

This English language document is provided as a service and is not intended to be an official statement. Should a discrepancy be found, the Japanese original will always govern the meaning and interpretation.

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Attachment

Reference 1 Portfolio as of December 1, 2021

Reference 2 Photograph of the Property, Vicinity MAP of the Property

Disclaimer:

This English language document is provided as a service and is not intended to be an official statement. Should a discrepancy be found, the Japanese original will always govern the meaning and interpretation.

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														Reference 1
Portfolio as of December 1, 2021
												Acquisition
	Area	Usage		Property		Property Name	Acquisition		Price		% of
		Code		Date		(Million		Total
												yen)
				A-1		Tokyo Shiodome Building	2010.4.13	82,539	25.4%
				A-2		ON Building	2008.8.29	39,900	12.3%
				A-3		Kioicho Building	2014.10.1	34,300	10.6%
										2021.7.1	13,980
		Office		A-4	Kamiyacho Trust Tower	2021.10.1	13,980
									Total	27,960	8.6%
		Buildings
									2005.3.31	7,870
				A-5		Osaki MT Building	2005.10.28	5,656
					2015.1.30	860
	Central
									Total	14,386	4.4%
	Tokyo			A-7		Hiroo MTR Building	2018.1.19	8,100	2.5%
								Subtotal		207,185	63.8%
		Retail		B-1			SHIBUYA FLAG	2013.4.24	32,040	9.9%
							Shinbashi Ekimae MTR	2007.4.25
		Facilities		B-2			18,000	5.5%
					Building
								Subtotal		50,040	15.4%
		Other
		(Residential		C-2			Park Lane Plaza	2004.12.24	3,200	1.0%
		property)
								Subtotal		3,200	1.0%
				Intermediate total		260,425	80.2%
				A-6		Midosuji MTR Building	2015.4.30	10,170		3.1%
										2012.7.12		6,940
										2021.12.1
		Office		A-8				Tenjin Prime			110
							(planned)
		Buildings
									Total	7,050	2.2%
				A-9		Shin-Yokohama TECH	2003.11.14	6,900	2.1%
					Building
	Other							Subtotal		24,120	7.4%
	Retail		B-3		Ito-Yokado Shonandai	2003.3.28	11,600	3.6%
			B-4			Kohnan Sagamihara-	2012.10.18	7,460	2.3%
		Facilities				Nishihashimoto
				B-5		Frespo Inage	2002.3.28	2,100	0.6%
								Subtotal		21,160	6.5%
		Other		C-1			Hotel Okura Kobe	2006.9.20	19,000	5.9%
		(Hotels)
								Subtotal		19,000	5.9%
							Intermediate total		64,280	19.8%
								Total		324,705	100.0%

(Note1) Acquisition prices are rounded down to the nearest million yen.

(Note2) If a property has more than one use, it is classified according to its main use.

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