United Urban Investment : Notice Concerning Acquisition of Property (GRAND-ROUGE Joto and one other property)

For Translation Purposes Only

December 16, 2022

For Immediate Release

United Urban Investment Corporation

Toshiaki Emon

Executive Officer

(Securities Code: 8960)

Asset Management Company:

Japan REIT Advisors Co., Ltd.

Norimasa Gaun

President and CEO

Inquiries:

Shuichi Kamizono

Chief Financial Officer

TEL: [phone]

Notice Concerning Acquisition of Property (GRAND-ROUGE Joto and one other property)

United Urban Investment Corporation ("United Urban") hereby announces that Japan REIT Advisors Co., Ltd. ("JRA"), the asset management company to which United Urban entrusts asset management services, decided today to acquire a property as set forth below.

1. Overview of the Acquisition

United Urban will acquire the trust beneficial interest in the following real estate properties (hereinafter individually or collectively called the "Asset to be Acquired").

						Estimated
Property	Type of Use			Scheduled	Estimated	NOI	Scheduled
Property Name	Location	Acquisition Price	NOI Yield	Yield after	Acquisition
Number	(Note 1)
		(Note 2)	(Note 3)	Depreciation	Date
						(Note 4)
	Residential	GRAND-ROUGE Joto	Osaka,
D36	Properties	¥1,755 million	4.6%	4.1%
(Note 5)	Osaka
	(apartment)				December
	Others	Sapporo Yonesato	Sapporo,				22, 2022
E22	Logistics Center	¥1,177 million	4.9%	4.2%
(warehouse)	Hokkaido
	(Note 5)
		Total/ Average (Note 6)		¥2,932 million	4.7%	4.1%	-
(Notes)

1. "Type of Use" determined by United Urban is shown. As for words shown in parentheses, of the types indicated on the real estate register, the primary type is shown.
2. "Scheduled Acquisition Price" is shown as sales price based on the purchase and sale agreement, and excludes acquisition costs, property taxes, city planning taxes and consumption taxes and other costs. The same shall apply hereafter.
3. "Estimated NOI Yield" is calculated by (the "Annualized Estimated NOI" / the scheduled acquisition price) and expressed as a percentage rounded to first decimal place. "NOI (Net Operating Income)" means the figure which is equal to an amount subtracting rental expenses (excluding depreciation and amortization) from rental revenues. "Annualized Estimated NOI" means the estimated NOI for 1 year from the acquisition by United Urban, which is calculated based on the terms and conditions of leasing after the acquisition by United Urban.
4. "Estimated NOI Yield after Depreciation" is calculated by ((i) ("Annualized Estimated NOI" - "Estimated Depreciation and Amortization") / (ii) the scheduled acquisition price) and is described as a percentage rounded to first decimal place. "Estimated Depreciation and Amortization" means the estimated depreciation and amortization for 1 year after the acquisition by United Urban, which is calculated under the straight-line method by applying the depreciation ratio to be derived for each depreciable asset of the Asset to be Acquired in accordance with the useful life thereof, based on the accounting policy of United Urban.
5. The current names of the properties are different from "GRAND-ROUGE Joto" and "Sapporo Yonesato Logistics Center" as of today. United Urban shall use the names after the acquisitions.
6. "Estimated NOI Yield" and "Estimated NOI Yield after Depreciation" shown in the "Total/Average" at the bottom of the table indicate an weighted average calculated based on the scheduled acquisition price of each Asset to be Acquired.

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2. Details of Acquisition

In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Asset to be Acquired for the purpose of further enhancing its portfolio.

1. GRAND-ROUGEJoto
   (1) Reasons for Acquisition
   1. Location

The Asset to be Acquired (the "Property") is located in Joto Ward in Osaka City, which records the second highest population density within the City as of November 2022 thanks to an increase in both population and households in recent years. The Property is located at the corner of National Route 1 and features high visibility.

The Property is accessible by multiple train lines. Within a 10 minutes' walk, there are 5 stations on 4 train lines, including JR, subway and private railways (Noe Station and Sekime Station on Keihan Main Line, JR Noe Station on JR Osaka Higashi Line, Sekime-Seiiku Station on Osaka Metro Imazatosuji Line, and Gamo 4-chome Station on Osaka Metro Imazatosuji Line and Osaka Metro Nagahori Tsurumi-ryokuchi Line). In addition to the excellent accessibility from the respective nearest stations, the Property also offers a convenient access to the Umeda and Namba areas, both of which form the core of Osaka City. Furthermore, the Property is a 1-minute walk from the Seiiku 2-chome Bus Stop and a 1-2-minute walk from the Sekime 1-chome Bus Stop of the Osaka City Bus, which circulates through Joto Ward, the adjacent Miyakojima Ward and the Tsurumi Ward.

A financial institution is located on the first floor of the Property. And other public facilities including parks, elementary and junior high schools, the ward office and the municipal library sit within walking distance of the Property. Also, there are supermarkets and a DIY store which give residents convenience of living. Living environment of the Property provides comfort for both singles and families.

2. Building, etc.

The Property is completed in 2008 as a rental apartment with 11 floors above ground and 72 units. With a focus on 1K, the Property has 1LDK and 2LDK unit types with approximately 30-60m2 and accommodates a wide range of demand from singles to families.

Each unit is all electric and designed to meet the recent residents' needs, with a bathroom dryer and free Wi-Fi, etc. being equipped. The Property's common areas have auto-locks, security cameras, intercoms with a TV monitor, delivery boxes, etc., ensuring the safety and convenience of the residents of the Property. In addition, there are parking lots for cars with two lots for car sharing and for bicycles. The facilities are sufficiently useful for the residents.

3. Tenants, etc.

A financial institution occupies the first floor and a part of the second floor of the Property. It is positioned as an important sales base in Joto Ward and is expected to be used for the medium to long term. The second floor and above are occupied by individuals and corporations as residences/tenants and have kept high occupancy rates. A master lease agreement has been concluded between the trustee and Tokyu Housing Lease Co., Ltd. (hereinafter referred to as the "MLPM Company"), and the Property is subleased from the MLPM Company to end tenants.

Considering the Property's location and competitive advantage in terms of building specifications, stable management is expected in the future.

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(2) Summary of Acquisition
1.	Asset to be Acquired	: Trust beneficial interest in real estate
2. Property Name	: GRAND-ROUGE Joto
3.	Scheduled Acquisition Price	:	¥1,755 million
4.	Scheduled Agreement Date	:	December 22, 2022
			(conclusion of the sale and purchase agreement of trust beneficial interest)
5.	Scheduled Acquisition Date	: December 22, 2022 (transfer of trust beneficial interest)
6.	Seller	: Mizuho Marubeni Leasing Corporation
7.	Financing	:	Borrowing (scheduled) (Note)
8.	Scheduled Date of Payment	:	December 22, 2022
9.	Intermediary	:	None

(Note) For financing, please refer to "6. Method of Settlement and Acquisition Schedule" as described below.

(3) Overview of the Property

	Property Name	GRAND-ROUGE Joto
	Type of the Asset	Trust beneficial interest in real estate
	Trustee	Mitsubishi UFJ Trust and Banking Corporation
	Period of Trust Agreement	From September 15, 2021 to December 31, 2032
		Lot number		2-23-4・5 Seiiku, Joto-ku,Osaka-shi, Osaka
	Location	(Note 1)
	Residential		12-12 Seiiku, Joto-ku,Osaka-shi, Osaka
		- 5 minutes' walk from Noe Station (Keihan Main Line)
		- 7 minutes' walk from JR Noe Station (JR Osaka Higashi Line)
		- 8 minutes' walk from Sekime Station (Keihan Main Line)
	Access	- 8 minutes' walk from Sekime-Seiiku Station (Osaka Metro Imazatosuji Line)
	- 9 minutes' walk from Gamo 4-chome Station (Osaka Metro Imazatosuji Line
		and Osaka Metro Nagahori Tsurumi-ryokuchi Line)
		- 1 minutes' walk from Seiiku 2-chome Bus stop (Osaka City Bus)
		- 1-2 minutes' walk from Sekime 1-chome Bus stop (Osaka City Bus)
	Type (Note 1)	Apartment, store
	Site Area (Note 1)	Land		1,155.76 m2
	Building		4,197.62 m2
	Structure and Scale (Note 1)	RC 11F
	Type of Ownership (Note 1)	Land		Proprietary Ownership
	Building		Proprietary Ownership
	Completion Date (Note 1)	January 2008
	Initial Building Owner	Settsu real estate stock company
	Constructor	TAKAMATSU CORPORATION
	Scheduled Acquisition Price	¥1,755 million
	Appraisal Value	¥1,860 million
	Date of Value Estimate	December 1, 2022
	Appraisal Agency	Appraisal by DAIWA REAL ESTATE APPRAISAL CO., LTD.
	(Appraisal Method)
	Probable Maximum Loss	13%
	(PML)
	Collateral	None
	Special Notations	None
		Details of Tenant (Note 2)
	Total Number of Tenants	71
	(Note 3)
	Security Deposit	¥15,095 thousand
	Total Rental Revenues	¥93,300 thousand
	(yearly)
	Total Leasable Floor Space	3,329.25 m2
	Total Leased Floor Space	3,238.47 m2
	Occupancy Ratio	97.3%

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Reference

		Estimated Annualized NOI	¥80 million
		(Note 4)
		Estimated NOI Yield	4.6%
		(Note 4)
(Notes)

1. 1. Each piece of information in the "Location (Lot number)" and "Type", "Site Area", "Structure and Scale", "Type of Ownership" and "Completion Date" of the building shows the value based on the real estate register.
   2. "Details of Tenant" shows the values as of December 1, 2022.
   3. A pass-through-type master lease agreement was concluded between the trustee and the master lessee with regard to the Property.
      Therefore, the "Total Number of Tenants" figure is stated by aggregating the number of end tenants subleased to by the master lessee.
   4. For the definition of "NOI (Net Operating Income)" and "Estimated Annualized NOI", please refer to Note 3 of "1. Overview of the Acquisition" above. The occupancy ratio for the total leasable floor space is estimated to be 96.4%.
2. Sapporo Yonesato Logistics Center

1. Reasons for Acquisition

1. Location

The Asset to be Acquired (the "Property") is located in the Shiroishi area of Sapporo City. It is approximately 0.3km to the Sapporo Interchange on Do-O Expressway and approximately 7.0km to the center of the City. Do-O Expressway is a major transportation artery that connects Hokkaido's major cities from north to south via Sapporo City, namely a Hokkaido's largest city, New Chitose Airport, a gateway to Hokkaido by air and sea, and Tomakomai Port.

The Shiroishi area facilitates broad distributions to the Sapporo metropolitan area (Otaru City, Tomakomai City, etc.) via the Sapporo Interchange. Also, owing to its excellent convenience for local deliveries to the surrounding area of the Property, including the center of Sapporo City, the area has become a hub of logistics facilities.

The Property is suitable for a 24/7 operation. Moreover, as commuting by car is common in Sapporo City and it provides an easy car access for commuters, the Property is advantageous to secure a labor force.

2. Building, etc.

The Property is a logistics facility completed in September 1998 with 4 floors above ground (3 stories with raised floor for warehouse areas). The total leasable area is about 7,400m2, which is relatively large for the Shiroishi area. With an effective ceiling height of 6.8m, a floor load of approximately 0.6t/m2 to 1.4t/m2, a standard column span of 8.75m x 9m and 13 truck berths installed, it has highly versatile specifications. In addition, there are 3 elevators for freight (for maximum load capacity of 1t: 1 unit, 3t: 2 units) and 1 vertical transfer machine. The specifications are highly appealing to both multi-tenants and single tenants. There are 16 parking spaces for cars and 1 parking space for people with disabilities, all of which are available for employees.

3. Tenants, etc.

The current tenant who is engaged in logistics business, etc. has been renting the entire building. Demand from logistics tenants is robust in the Shiroishi area which includes the Property. Considering the Property's competitive advantage, a wide range of tenants' needs including shippers and 3PL operators are expected for the Property and its stable operation is expected over the years to come.

(2) Summary of Acquisition
1.	Asset to be Acquired	: Trust beneficial interest in real estate
2.	Property Name	: Sapporo Yonesato Logistics Center
3.	Scheduled Acquisition Price	:	¥1,177 million
4.	Scheduled Agreement Date	:	December 22, 2022
			(conclusion of the sale and purchase agreement of trust beneficial interest)
5.	Scheduled Acquisition Date	: December 22, 2022 (transfer of trust beneficial interest)
6.	Seller	: Mizuho Marubeni Leasing Corporation
7.	Financing	:	Borrowing (scheduled) (Note)
8.	Scheduled Date of Payment	:	December 22, 2022
9.	Intermediary	:	None

(Note) For financing, please refer to "6. Method of Settlement and Acquisition Schedule" as described below.

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(3) Overview of the Property

		Property Name		Sapporo Yonesato Logistics Center
		Type of the Asset		Trust beneficial interest in real estate
		Trustee		Mizuho Trust & Banking Co., Ltd.
		Period of Trust Agreement		From October 29, 2021 to December 31, 2032
				Lot number	3-5-3・4 Yonesato Sanjo, Shiroishi-ku,Sapporo-shi,
		Location		(Note 1)	Hokkaido
				Residential	3-5-15 Yonesato Sanjo, Shiroishi-ku,Sapporo-shi, Hokkaido
		Access		Approximately 0.3km from Sapporo Interchange (Do-O Expressway)
		Type (Note 1)		Office, warehouse
		Site Area (Note 1)		Land	4,862.78 m2
			Building	7,389.49 m2
		Structure and Scale (Note 1)		S 4F
		Type of Ownership (Note 1)		Land	Proprietary Ownership
			Building	Proprietary Ownership
		Completion Date (Note 1)		September 1998
		Initial Building Owner		Happy Palace limited company
		Constructor		SAKAMOTO KENSETSU Co., Ltd.
		Scheduled Acquisition Price		¥1,177 million
		Appraisal Value		¥1,290 million
		Date of Value Estimate		December 1, 2022
		Appraisal Agency		Appraisal by Tanizawa Sogo Appraisal Co., Ltd.
		(Appraisal Method)
		Probable Maximum Loss		1%
		(PML)
		Collateral		None
		Special Notations		None
				Details of Tenant (Note 2)
		Total Number of Tenants		1
		Security Deposit		Undisclosed (Note 3)
		Total Rental Revenues (yearly	)	Undisclosed (Note 3)
		Total Leasable Floor Space		7,389.49 m2
		Total Leased Floor Space		7,389.49 m2
		Occupancy Ratio		100%
					Reference
		Estimated Annualized NOI		¥58 million
		(Note 4)
		Estimated NOI Yield		4.9%
		(Note 4)
(Notes)

1. Each piece of information in the "Location (Lot number)" and "Type", "Site Area", "Structure and Scale", "Type of Ownership" and "Completion Date" of the building shows the value based on the real estate register.
2. "Details of Tenant" shows the values as of December 1, 2022.
3. Undisclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the tenant.
4. For the definition of "NOI (Net Operating Income)" and "Estimated Annualized NOI", please refer to Note 3 of "1. Overview of the Acquisition" above. The occupancy ratio for the total leasable floor space is estimated to be 100%.

3. Seller's Profile

The assets to be acquired (GRAND-ROUGE Joto and Sapporo Yonesato Logistics Center) are both scheduled to be acquired from the following seller.

Company Name	Mizuho Marubeni Leasing Corporation
Address	10F Tokyu Bancho Building, 6 Yonbancho, Chiyoda-ku, Tokyo
Representative	Nobuhiro Yabe, President & CEO
Principal Business	General Leasing and Related Business
Capital (Fund)	¥4,390 million (As of March 31, 2022)
Date of Foundation	December 1993
Net Assets	¥21,620 million (As of March 31, 2022)
Total Assets	¥271,671 million (As of March 31, 2022)

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