JAPAN METROPOLITAN FUND INVESTMENT CORPORATION April 14, 2023
To all concerned parties:
Investment Corporation
Japan Metropolitan Fund Investment Corporation
(Tokyo Stock Exchange Company Code: 8953）
Representative: Masahiko Nishida, Executive Director
URL: https://www.jmf-reit.com/english/
Asset Management Company
KJR Management
Representative: | Naoki Suzuki, |
Inquiries: | President & Representative Director |
Keita Araki, Executive Officer & | |
Head of Metropolitan Division | |
TEL: +81-3-5293-7081 |
Notice Concerning Partial Disposition of Trust Beneficiary Right in Real Estate in Japan
(AEON MALL Tsurumi Ryokuchi)
Japan Metropolitan Fund Investment Corporation ("JMF") announces today that KJR Management, JMF's asset manager (the "Asset Manager"), determined to dispose of part of quasi-co-ownership interest of the trust beneficiary right in real estate in Japan (the "Property") as outlined below.
1. Overview of Disposition
Property name | AEON MALL Tsurumi Ryokuchi (25% quasi-co-ownership interest) (Note 1) |
Location | 17-1, Tsurumi 4-chome,Tsurumi-ku,Osaka-shi, Osaka |
Asset class | Retail |
Disposition price (Scheduled) | 6,400 million yen |
Book value (Note 2) | 5,524 million yen |
Gains on disposition (Note 3) | Approx. 0.8 billion yen |
Broker | None |
Purchaser | Asset Finance Osaka Tsurumi Godo Kaisha |
Completion date of contract | April 14, 2023 |
Disposition date (Scheduled) | September 29, 2023 (scheduled) |
(Note 1) JMF will continue to hold the remaining 75% of quasi-co-ownership interest of the trust beneficiary right in real estate (Note 2) The book value is calculated by multiplying the expected value of the disposition property as a whole as of the month of
disposition by the quasi-co-ownership interest percentage.
(Note 3) Gains on disposition are reference figures as the difference calculated at this time by subtracting book value and disposition-related expenses from the scheduled disposition price, and may differ from the actual gains on disposition.
(Note 4) In connection with the disposition of the quasi-co-ownership interest in the property, JMF, the Purchaser and the Trust beneficiary are scheduled to enter into an agreement between the beneficiaries (the "Agreement"), and an agreement is scheduled to be entered into to the effect that if a quasi co-owner intends to transfer its quasi co-ownership interest, it may not transfer its own quasi co-ownership interest of the trust beneficiary right in the Property to a third party, except with the prior written approval of the other co-owners. Further, with respect to instructions, etc. to the trust beneficiaries, an agreement is intended to be entered into to the effect that decisions on certain important matters shall be made by an agreement by all of the quasi co-owners, and that the Asset Manager may make decisions on other matters at its sole discretion.
(Note 5) Purchaser has agreed to restore the multiple points identified in the engineering reports and other documents regarding each property at the responsibility and cost of JMF.
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2. Reason for Disposition
Highlights
1． As part of JMF's growth strategy, steady execution of JMF's asset replacement strategy for optimization of the use composition of its portfolio
2． The gain from the disposition to be recorded in the 44th fiscal period ending February 2024 fiscal period by control of the timing of disposition
3． Examining future disposition of the remaining interest (75%)
In JMF's asset replacement strategy, suburban retail properties and urban retail properties with low profitability are within the scope of disposition. While comprehensively taking into account the anticipated intensification of the competitive environment in the neighborhood and the future profitability of the property, JMF has determined that securing the gains from the partial disposition (25% quasi-co-ownership interest) will contribute to improving unitholder value.
The scheduled disposition price (25% quasi co-ownership interest) (Note) is the same as the appraisal value, and JMF will allocate the cash from the disposition mainly to acquire properties in JMF's asset replacement strategy. In addition, the gains on the disposition are expected to be approximately 0.8 billion yen. They will be allocated as a source of dividends to stabilize and improve the level of distributions.
JMF has secured approximately 11.8 billion yen in gains from dispositions by the dispositions of assets, including the Property, announced by it, of 87.5 billion yen after the merger in accordance with its asset replacement strategy. Among these, gains on dispositions to be realized over the six periods from the 43rd fiscal period ending August 2023 are expected to be approximately 6.2 billion yen by controlling and distributing the timing of disposition.
By making returns to unitholders or internally reserving these gains on dispositions through recovery of sales and progress in leasing after the COVID-19 pandemic, JMF aims to further improve unitholder value while ensuring provision for downside risks such as temporary fluctuations in income and expenditure due to tenant replacement, cost increases and other factors.
(Note) The difference between the appraisal value and book value as of the end of February 2023.
[Diversification of gains on the disposition]
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3. Property Summary
A summary of the Property to be disposed of is set out in Part 1, Fund Information, Item 1. Status of the Fund, 5 Status of investment management, (2) Investment assets, of JMF's securities report for the 41st fiscal period submitted on November 28, 2022.
4. Overview of Purchaser
Name | Asset Finance Osaka Tsurumi Godo Kaisha | ||
Location | Not disclosed as the purchaser has not agreed to the disclosure. | ||
Name and job title of the | Function Manager: | ||
representative | General Incorporated Association Asset Finance Osaka Tsurumi | ||
1. Sale, exchange, leasing, management, ownership and use of real estate; | |||
2. Acquisition, holding and disposal of trust beneficiary rights pursuant to trust | |||
agreements; | |||
Business | 3. Making anonymous partnership equity contributions and accepting | ||
anonymous partnership equity contributions; | |||
4. Acquisition, holding and disposal of securities; and | |||
5. Any other auxiliary and/or related businesses to the items described above | |||
Capital | 100,000 yen | ||
Date established | August 29, 2022 | ||
Net assets | |||
Total assets | Not disclosed as the purchaser has not agreed to the disclosure. | ||
Major shareholder | |||
(shareholding ratio) | |||
Relationship with JMF / the Asset Manager | |||
There is no capital, personal or transactional ties to be stated between the | |||
Capital relationship | purchaser and JMF or the Asset Manager. There is no capital, personal or | ||
Personal relationship | transactional ties to be specified between the related parties/related companies of | ||
Trade relationship | JMF or the Asset Manager and the related parties/related companies of the | ||
purchaser. | |||
Related parties | Any of the purchaser or the related parties/related companies of the purchaser do | ||
not fall under the related party of JMF or the Asset Manager. | |||
5. Means of Payment
Full payment at the time of transfer
6. Disposition Schedule
Decision-making date | April 14, 2023 | ||
Disposition contract signing date | |||
Payment date (Scheduled) | September 29, 2023 | ||
Property transfer date (Scheduled) | |||
7. Future Outlook
The approximately 0.8 billion yen in gains from the disposition is scheduled to accrue in the February 2024 fiscal period (44th fiscal period). Therefore, there are no changes to the currently announced forecasts of operation for the February 2023 fiscal period (42nd fiscal period: from September 1, 2022 to February 28, 2023) and August 2023 fiscal period (43rd fiscal period: from March 1, 2023 to August 31, 2023). The forecast of operation for the February 2024 fiscal period (44th fiscal period), taking into account the impact of this disposition, will be announced in the financial report scheduled for release on April 19, 2023.
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8. Appraisal Report Summary
Property name | AEON MALL Tsurumi Ryokuchi | |||||||||
Appraiser | Japan Real Estate Institute | |||||||||
Appraisal value | 25,600 million yen | |||||||||
Appraisal date | February 28, 2023 | |||||||||
Item | Value | Notes | ||||||||
Indicated value by income approach | 25,600 million yen | |||||||||
DC method | 25,700 million yen | |||||||||
Operating income | 1,728 million yen | |||||||||
Effective gross income | 1,728 million yen | |||||||||
Losses from vacancy, etc. | 0 yen | |||||||||
Operational cost | 364 million yen | |||||||||
Maintenance and | 0 million yen | |||||||||
management fee | ||||||||||
Utility cost | 0 yen | |||||||||
Repair expenses | 18 million yen | |||||||||
As the disclosure of this item may negatively affect JMF's | ||||||||||
Property manager fee | Not disclosed | competitiveness and business to the detriment of its | ||||||||
unitholders, the Asset Manager has decided not to | ||||||||||
disclose this information here, and have included it under | ||||||||||
"Other expenses" instead. | ||||||||||
Leasing cost | 0 yen | |||||||||
Property tax | 287 million yen | |||||||||
As the disclosure of this item may negatively affect JMF's | ||||||||||
Insurance premium | Not disclosed | competitiveness and business to the detriment of its | ||||||||
unitholders, the Asset Manager has decided not to | ||||||||||
disclose this information here, and have included it under | ||||||||||
"Other expenses" instead. | ||||||||||
Other expenses | 59 million yen | |||||||||
Net operating income | 1,363 million yen | |||||||||
Operating profit on lump- | 16 million yen | |||||||||
sum payments | ||||||||||
Capital expenditure | 43 million yen | |||||||||
Net cash flow | 1,336 million yen | |||||||||
Capitalization rate | 5.2 % | |||||||||
DCF method | 25,500 million yen | |||||||||
Discount rate | 4.9 % | |||||||||
Terminal capitalization rate | 5.4 % | |||||||||
Indicated value by cost approach | 19,300 million yen | |||||||||
Land ratio | 60.6 % | |||||||||
Building ratio | 39.4 % | |||||||||
Other matters of consideration | N/A |
(Note) The appraisal value of 100% ownership interest. The equivalent amount obtained by multiplying the appraisal value by the 25% quasi-co-ownership interest subject to the disposition is 6,400 million yen.
[Reference]
The forecast of the operating results for February 2023 fiscal period (Announced on October 19, 2022), and the results for August 2022 fiscal period
Distributions | |||||||
Operating | Operating | Ordinary | Net | per unit (yen) | Distributions in | ||
revenues | income | income | income | (excluding | excess of profit | ||
(million yen) | (million yen) | (million yen) | (million yen) | distributions in | per unit (yen) | ||
excess of profit) | |||||||
February 2023 fiscal period | 40,916 | 17,662 | 15,726 | 15,725 | 2,280 | 0 | |
（The forecast） | |||||||
August 2022 fiscal period | 41,112 | 17,694 | 15,723 | 15,722 | 2,263 | 0 | |
（The results） | |||||||
This English language release is for informational purposes only, and the Japanese language release should be referred to as the original.
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Japan Metropolitan Fund Investment Corporation published this content on 14 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2023 06:35:04 UTC.
