February 17, 2023
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, General Manager of Finance
and Administration Division, Director and CFO
(TEL: +81-3-3516-1591)
Notice Concerning Acquisition and Sale of Properties (Conclusion of Contracts) (Acquisition of Ochanomizu Sola City and Sale of JPR Crest Takebashi Bldg.)
Japan Prime Realty Investment Corporation (“JPR”) announced that Tokyo Realty Investment Management, Inc. (“TRIM”), the asset management company to which JPR entrusts the management of its assets, today decided to acquire a property and to sell a property, as described below. (Hereinafter the acquisition of Ochanomizu Sola City is the “Acquisition” and the sale of JPR Crest Takebashi Bldg. is the “Sale” and the Acquisition and the Sale are the “Asset Replacement.”)
Details
I. Purpose of the Asset Replacement and Overview of Transactions
1. Purpose of the Asset Replacement
JPR decided to acquire a large-scalemulti-purpose building in Chiyoda and sell a medium-sized office building also in Chiyoda, in transactions with Yasuda Real Estate Co., Ltd., which sponsors JPR, aiming for portfolio quality enhancement that will contribute to stable growth in the medium and long term. The effects of the Asset Replacement are as shown in the table below. JPR will continue to work to build a strong portfolio through property acquisition and asset replacement using the pipeline of its sponsors.
2. Acquisition of Ochanomizu Sola City (hereinafter “the Property for Acquisition”)
The Property for Acquisition is a large-scalemulti-purpose building completed in 2013 as a landmark in the Ochanomizu district, which has a river running through it, rich greenery and many historical sites. It is conveniently located, directly connected to Shin-ochanomizu Station on the Tokyo Metro Chiyoda Line and a one-minute walk from Ochanomizu Station on the JR Chuo-Sobu Line, and has good access to public transportation, with five stations and nine lines within a ten-minute walking distance. The barrier-free development of Ochanomizu Station and the development of a station plaza at the Hijiri Bashi Exit are currently underway, aiming for completion in 2024, and the Ochanomizu district is expected to see further development in the future as it becomes more convenient.
The Property for Acquisition is a building with 23 floors above ground and 2 floors below. The 6th floor and higher is designed for offices. It is a facility that can cater for various business needs. Sola City Plaza, a square on B1 and B2 in front of JR Ochanomizu Station and directly connected to Shin-Ochanomizu Station, has an array of restaurants and shops. Sola City Conference Center offers a variety of meeting rooms on the first and 2nd floors and there is a university and education-related facilities on the 3rd to the 5th floors.
The basic specifications of the office floors are a ceiling height of 2,800 mm, a raised floor of 100 mm, individual air conditioning, a floor loading weight of 500 kg/m2 (1,000 kg/m2 in heavy duty zones), and Low-E glass. The floors are regularly shaped spaces without pillars with a standard floor area of over 900 tsubo and can be efficiently and freely configured according to tenant requirements. Moreover, to ensure continued office functionality in the event of a disaster, the office is built with a seismically isolated structure and has emergency power generators capable of
providing emergency power for approximately 72 hours. Another feature of the building is that it has a high environment performance, with LED lighting installed, solar power generation system installed, and spring water from subways utilized.
In addition to the features of the location and the property features described above, there are few large-scale buildings which can compete with the Property for Acquisition in the area surrounding JR Ochanomizu Station and on this basis JPR considers the Property for Acquisition to be a very rare property.
3. Sale of JPR Crest Takebashi Bldg.(hereinafter “the Property for Sale”)
The Property for Sale currently makes a steady contribution to revenue in JPR’s portfolio; however, due to the age of the building, among other factors, maintaining competitiveness in the future poses a challenge. JPR therefore concluded that replacing this property with the Property for Acquisition, which can be expected to generate stable revenue in the medium and long term, will help improve the quality of the portfolio.
In addition, JPR plans to take advantage of special taxation measures and hold part of the 881 million yen gain on sale in reserve as retained earnings to stabilize future distributions.
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II. Overview of the Acquisition |
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(i) |
Property Name |
Ochanomizu Sola City |
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(ii) |
Asset Type |
Beneficiary interest in real estate |
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(iii) |
Asset Class |
Office |
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(iv) |
Acquisition Price |
6,490 million yen |
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(v) |
Appraisal Value |
7,170 million yen |
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(vi) |
NOI Yield |
3.3% |
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(vii) |
NOI Yield after Depreciation |
2.7% |
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(viii) |
Contract Date |
February 17, 2023 |
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(ix) |
Planned Acquisition Date |
April 12, 2023 |
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(x) |
Seller |
Yasuda Real Estate Co., Ltd. |
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(xi) |
Financing for Acquisition |
Loans and own funds (including funds from the sale of the Property for Sale) |
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(xii) |
Settlement Method |
Lump-sum payment at the time of delivery |
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(xiii) |
Brokerage |
None |
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(Note 1) “Acquisition Price” excludes acquisition costs, property taxes, city planning taxes and consumption taxes. (Note 2) “Appraisal Value” is appraisal value as of December 31, 2022.
(Note 3) “NOI Yield” is NOI divided by the acquisition price and is rounded to the first decimal place. “NOI” is net operating income stated in the real estate appraisal report.
(Note 4) “NOI Yield after Depreciation” is NOI after depreciation divided by the acquisition price and is rounded to the first decimal place. “NOI after Depreciation” is NOI less forecast depreciation.
(Note 5) Regarding the “Seller,” Yasuda Real Estate Co., Ltd. Does not own the Property for Acquisition as of the date of this release but has concluded a sale and purchase agreement setting April 12, 2023 as the planned acquisition date with Surugadai Special Purpose Company, which is the current owner, partly owned by Yasuda Real Estate Co., Ltd.. Yasuda Real Estate Co., Ltd. plans to fulfill its obligations as seller in relation to JPR subject to the condition that the delivery of the Property for Acquisition from Surugadai Special Purpose Company goes ahead on the planned acquisition date in accordance with the sale and purchase agreement.
(Note 6) Details of the loans, which form part of the financing will be notified at a later date once determined.
III. Overview of the Sale
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(i) |
Property Name |
JPR Crest Takebashi Bldg. |
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(ii) |
Asset Type |
Beneficiary interest in real estate |
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(iii) |
Asset Class |
Office |
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(iv) |
Sale Price |
4,169 million yen |
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(v) |
Appraisal Value |
3,790 million yen |
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(vi) |
Planned Book Value |
3,265 million yen |
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(vii) |
Planned Gain on Sale |
881 million yen |
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(viii) |
Contract Date |
February 17, 2023 |
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(ix) |
Planned Sale Date |
April 12, 2023 |
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(x) |
Buyer |
Yasuda Real Estate Co., Ltd. |
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(xi) |
Settlement Method |
Lump-sum payment at the time of delivery |
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(xii) |
Brokerage |
None in particular |
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(Note 1) All amounts less than one million yen have been rounded down.
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(Note 2) |
“Sale Price” excludes property taxes, city planning taxes, and consumption taxes. |
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(Note 3) |
“Appraisal Value” is appraisal value as of December 31, 2022. |
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(Note 4) |
“Planned Book Value” indicates the assumed book value as of the planned sale date. |
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(Note 5) |
“Planned Gain on Sale” indicates the amount obtained by subtracting the planned book value and estimated |
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sale expenses from the Sale Price. |
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IV. Details of the Property (Ochanomizu Sola City) |
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1. Details of Property for Acquisition |
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Property Name |
Ochanomizu Sola City |
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Location |
4-6-1, Kandasurugadai, Chiyoda-ku, Tokyo (lot number) and other |
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Asset Type |
Beneficiary interest in real estate |
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Trustee |
Mizuho Trust & Banking Co., Ltd. |
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Trust Period |
July 31, 2008 to March 31, 2029 |
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Asset Class |
Office, educational facility, hall/conference room, retail and parking |
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Type of Structure |
Steel frame flat-roofed23-story structure with a 2-story basement |
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Type of Ownership |
Land: Ownership (quasi-co-ownership interest of 3.4%) |
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Building: Ownership (quasi-co-ownership interest of 3.4%) |
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Land: Total Site Area 9,681.02 m2 (entire area) |
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Site Area |
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Building: Gross Floor Area 96,897.25 m2 (entire area) |
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Completion Date |
February 2013 |
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Architecture and |
Taisei Corporation Co., Ltd. First Class Architect Office/Taisei Corporation |
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Design/Construction |
Co., Ltd. |
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PML Earthquake Rating (Rating |
0.6% (Sompo Risk Management Inc.) |
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Agency) |
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Acquisition Price |
6,490 million yen |
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Appraisal Value (Appraisal Date) |
7,170 million yen (as of December 31, 2022) |
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Appraiser |
JLL Morii Valuation & Advisory K.K. |
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Collateral |
None |
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Status of Leasing |
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Number of Tenants |
26 |
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Rent Revenue, Common Charges |
Not disclosed |
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(Annual) |
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Lease and Guarantee Deposits |
Not disclosed |
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Total Leasable Floor Space/ Total |
2,235.01 m2/2,235.01 m2 |
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Leased Floor Space |
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Occupancy Rate |
100.0% |
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– Surface rights have been established on a portion of the site of the Property |
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for Acquisition for the purpose of holding subway facilities, with the Tokyo |
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Metropolitan Government as the surface right owner. |
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– An agreement has been reached under which in the event that JPR sells its |
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Remarks |
quasi-co-ownership interest, JPR shall be required to notify the other quasi- |
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co-owners of its intention to sell its quasi-co-ownership interest in advance |
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and if agreement on the purchase of the beneficiary interest is not reached |
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within thirty days of receipt of such notice by the other quasi co-owners, sale |
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to a third party shall be allowed. |
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(Note 1) All amounts less than one million yen have been rounded down, and all rates have been rounded to the first decimal place.
(Note 2) “Location” indicates the lot number stated on the real estate register as the residential address has not been assigned.
(Note 3) The information on “Asset Class,” “Type of Structure,” “Site Area,” and “Completion Date” is as stated in the registry.
(Note 4) Since a pass-through type master lease contract has been concluded between the trust beneficiaries and Taisei Corporation (master lessee), “Number of Tenants” is the number of subtenants to which the master lessee had sublet the property at the time the sale and purchase agreement was concluded
(Note 5) “Rent Revenue, Common Charges (annual)” and “Lease and Guarantee Deposits” are not disclosed because approval for disclosure is not acquired from the quasi-co-owners, etc. “Leasable Floor Space/Leased Floor Space” and “Occupancy Rate” are based on the portion of the area which the master lessee sublets to subtenants corresponding to the ownership interest that JPR plans to have at the time of the conclusion of the sale and purchase agreement.
2. Profile of Previous Owners
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Previous Owner |
Previous owner |
Second previous owner |
Third previous owner |
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Land：Excluding those |
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Company Name |
Yasuda Real Estate Co., Ltd. |
Surugadai Special Purpose |
with a special |
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Company |
vested interest |
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Building：None |
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Relationship with |
Refer to “VI. Overview of the |
Partly owned by Yasuda |
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Real Estate Co., Ltd. , |
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Parties Having |
Other Party in the Asset |
― |
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which is |
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Special Interest |
Replacement” below |
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a shareholder of TRIM. |
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(i) This property was jointly |
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developed by investors in |
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the Special Purpose |
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Company |
Land：Acquired for |
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Background and |
(ii)Yasuda Real Estate Co., |
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Ltd. is scheduled to |
investment management |
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Reason of |
― |
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acquire the quasi-co- |
purpose |
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Acquisition |
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ownership interest of a |
Building：Development |
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part of ratio of investment |
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(iii)Yasuda Real |
Estate Co., |
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Ltd. is to sale its trust |
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beneficiary rights to JPR |
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Acquisition Price |
4,820 million yen |
Omitted, as held for over |
― |
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Acquisition Date |
April 12, 2023（planned） |
― |
― |
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3. Overview of Appraisal Report |
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Property Name |
Ochanomizu Sola City |
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Appraisal Value |
7,170 million yen |
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Real Estate Appraiser |
JLL Morii Valuation & Advisory K.K. |
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Appraisal Date |
December 31, 2022 |
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Types of Value |
Normal Value |
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Item |
Amount |
General Outline |
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(thousand yen) |
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Appraisal value is determined with emphasis on |
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Appraisal Value by Capitalization |
211,000,000 |
appraisal value by the DCF method, with appraisal |
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Method |
value by the direct capitalization method used as |
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verification. |
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Appraisal Value by Direct |
215,000,000 |
Appraised by capitalizing net cash flow using the |
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Capitalization Method |
capitalization rate. |
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(1) Operating Revenue
Potential Gross Cash Flow
Loss from Vacancies
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(2) Operating Expenses |
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Maintenance Expenses and |
Undisclosed |
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Property Management Fee |
(Note 1) |
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Utilities Expenses |
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Repairs and Maintenance |
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Tenant Solicitation Expenses |
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Tax and Public Dues |
This is an excerpt of the original content. To continue reading it, access the original document here.
Disclaimer
Japan Prime Realty Investment Corporation published this content on 17 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2023 06:25:07 UTC.
Publicnow 2023
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Technical analysis trends JAPAN PRIME REALTY INVESTMENT CORPORATION
| Short Term | Mid-Term | Long Term | |
| Trends | Neutral | Bearish | Bearish |
Income Statement Evolution
| Mean consensus | – |
| Number of Analysts | 0 |
| Last Close Price | 354 500,00 |
| Average target price | |
| Spread / Average Target | – |
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