For Immediate Release
REIT Issuer:
ORIX JREIT Inc. (TSE: 8954)
Hiroshi Miura
Executive Director
Asset Management Company:
ORIX Asset Management Corporation
Yoshitaka Kamemoto
President and CEO
Inquiries:
Shinji Yamana
Executive Officer and CFO
TEL:+81 3 5776 3323
ORIX JREIT Announces Acquisition of "Cross Residence Iidabashi"
and Disposition of "Round-Cross Mita"
TOKYO, December 24, 2021 - ORIX JREIT Inc. ("OJR") | announced that its asset management company, |
ORIX Asset Management Corporation ("OAM"), passed a | resolution on the acquisition and disposition of |
properties (hereafter, "the acquisition" and "the d isposition," and referred to collectively as "the e xchange"), as described below.
1.Transaction Summary
- Transaction party: NIPPON STEEL KOWA REAL ESTATE CO.,LTD.
- Contract date: December 24, 2021
- Transaction date: April 1, 2022(Note1)
- The Acquisition Summary:
Property name | Cross Residence Iidabashi(Note 2) | |||
Specified asset category | Real Estate | |||
Type | Residential Property | |||
Area | 6 Central Tokyo Wards(Note 3)(Shinjuku-ku, Tokyo) | |||
Acquisition price | 6,000 million yen | |||
Appraisal value | 6,600 million yen | |||
NOI yield(Note 4) | 4.0% | |||
Yield after depreciation(Note 5) | 3.2% | |||
5) | The Disposition Summary: | |||
Property name | Round-Cross Mita | |||
Specified asset category | Real Estate | |||
Type | Office | |||
Area | (Note 3)( | ) | ||
6 Central Tokyo Wards | Minato-ku, Tokyo | |||
Disposition price | 1,800 million yen | |||
Appraisal value | 1,720 million yen | |||
Book value | 1,639 million yen(Note 6,7) | |||
Estimated gain/loss on disposition | 133 million yen(Note 6,7) | |||
6) | Intermediary: None |
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Note:
1. Each purchase and sale agreement pertaining to the replacement (hereinafter collectively the "Purchase and Sale Agreement") falls under the category of Forward Commitment as provided in the Comprehensive Guideline for Supervision of Financial Instruments Business Operators, etc. set by the Financial Services Agency since it is a postdated purchase and sale agreement where the settlement and delivery of the property will be conducted later than one month after the conclusion of such agreement.
<Financial Impact on OJR in case the forward commitment cannot be fulfilled.>
In this regard, the Purchase and Sale Agreement stipulates cancellation provisions as follows:
- In the event either the seller or the purchaser commits material breach of the Purchase and Sale Agreement (such party is hereinafter the "Breaching Party"), the other party (hereinafter the "Terminating Party") shall set a certain reasonable period and demand the Breaching Party to perform its obligations within such period. If the Breaching Party fails to remedy its breach within such period, the Terminating Party may terminate the Purchase and Sale Agreement. Provided, however, that in case it is evident that it is impossible to remedy its breach within a reasonable period, the Terminating Party may immediately terminate the Purchase and Sale Agreement without notice.
- In the event the Purchase and Sale Agreement is terminated due to the reason mentioned in i) above, the Breaching Party shall immediately pay the amount equivalent to 20% of the total amount of acquisition price of the property to be acquired and the disposition price of the property to be disposed to the Terminating Party as a penalty. Even if the damage incurred or born by the Terminating Party exceeds the amount of the penalty, the Terminating Party may not claim an amount in excess of the penalty to the Breaching Party. Even if the amount of such damage is less than the amount of the penalty, the Breaching Party may not claim a reduction of the penalty.
- The current name of the property is "Livio Maison Iidabashi" as of today. OJR intends to change the name post acquisition.
- "6 Central Tokyo Wards" refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya and Shinagawa wards.
- The "NOI Yield" of Property is calculated by dividing Net Operating Income based on the direct capitalization method indicated in the appraisal report at the time of decision to acquire by the acquisition price. The figures are rounded to the one decimal place.
- The "Yield after Depreciation" of Property is calculated by dividing (Net Operating Income based on the direct capitalization method indicated in the appraisal reports at the time of decision to acquire - Depreciation expense estimated by OAM) by the acquisition price. The figures are rounded to the one decimal place.
- Figures are rounded down to the nearest million yen.
- Book value is an estimate as of transaction date. Estimated gain/loss on transfer is pro forma amount based on the book value and assumed transfer expenses. The amount is subject to change.
2.Purpose of the Exchange
OJR aims to achieve stable growth of unitholder value through careful selection in properties from the perspectives of growth potential, profitability and stability by leveraging our strength, "ORIX Synergy(Note1)," "Direct PM (Note2)" and "Diversified REIT (Note3)".
Under this policy, despite acquiring properties remains to be competitive, OJR decided on this exchange with a 3rd party to avoid missing out on opportunities that can better utilize our own strengths.
Note:
- The "ORIX Synergy" refers to the cooperative rela tionship between ORIX Corporation and its group companies, and OJR.
- The "Direct PM" refers to the supplemental work of property management operations including leasing activities and activities to improve property value by OAM while utilizing the ORIX Synergy.
- The "Diversified REIT" refers to real estate inve stment incorporations that invest in various types of property such as offices, retail facilities, residential properties, logistics facilities, hotels and others.
- Purpose of the Acquisition of "Cross Residence Iidabashi"
Although the occupancy rate has remained in the 80% range due to the impact of COVID-19, from the following reasons we anticipate high competitiveness and stable demand over a medium-tolong-term.
- It is located approximately a 4-minute walk from Iidabashi Station which has access to 5 public transport lines including the JR Chuo/Sobu Line, the Tokyo Metro Yurakucho Line, Tozai Line, Namboku Line and the Toei Oedo Line.
- On the first floor of the property is a convenience store as well as supermarkets, restaurants, hospitals and other facilities in the vicinity of the property making it highly convenient. Additionally, one of prominent neighborhoods in Tokyo named Kagurazaka is within walking distance.
- A scarce large-scale residence recently built (approximately 3 years) with a high-grade entrance, indoor hallway, security system, and interior and equipment. (142 rentable units: 80% for 1K units, 20% for 2 LDK units)
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Map and Railway Route Map
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Photo
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- Purpose of the Disposition of "Round-Cross Mita"
- This property was owned upon listing since 2002 and the building is now in its 31st year since construction and thus additional CAPEX and repair costs will be needed in the future.
- The location of this property has attracted a certain level of office leasing demand under COVID-19, however a decline in relative competitiveness will remain to be a concern as the building ages further.
3. Summary of Property to be Acquired
Property name | Cross Residence Iidabashi | |||||||||
Specified asset category | Real Estate | |||||||||
Address(Note1) | 1-16Shin-ogawamachi,Shinjuku-ku, Tokyo | |||||||||
Public transit access | Approx. 4-minute walk from "Iidabashi" station on J R Chuo/Sobu | |||||||||
line, Toei Oedo line and Tokyo Metro Yurakucho line and others | ||||||||||
Land | Registered Area | 1,124.79m2 | ||||||||
Type of ownership | Full ownership | |||||||||
Registered usage | Residential, Retail | |||||||||
Registered completion | January 2019 | |||||||||
date | ||||||||||
Building | ||||||||||
Type of ownership | Full ownership | |||||||||
Registered Area | 5,594.89m2 | |||||||||
Registered | Reinforced concrete with flat roof, 13 floors | |||||||||
construction | ||||||||||
Earthquake resistance | (Note2) | 5% | ||||||||
(with or without earthquake | PML | : | ||||||||
*Based on the report by Sompo Risk Management Inc. | ||||||||||
insurance) | ||||||||||
Collateral | None | |||||||||
Summary of the Engineering Report | ||||||||||
Reporting Company | Tokio Marine dR Co., Ltd. | |||||||||
Date of inspection | October 25, 2021 | |||||||||
Total amount of 12 | ||||||||||
years from the date of | 32 million yen(Note3) | |||||||||
inspection | ||||||||||
Replacement Cost | 1,831 million yen(Note3) | |||||||||
Summary of Rental status as of November 30, 2021 | ||||||||||
Number of tenants | 1 (Pass through-type master lease agreement) | |||||||||
Gross rental income | 22 million yen per month(Note3) | |||||||||
excluding parking | ||||||||||
Security deposits | 52 million yen(Note3) | |||||||||
including parking | ||||||||||
Total rent space | 3,812.83 m2 | |||||||||
Total rentable space | 4,619.88 m2 | |||||||||
November | November | November | November | November | ||||||
Occupancy rate of end tenants | 2017 | 2018 | 2019 | 2020 | 2021 | |||||
during past 5 years | -(Not | -(Not | 86.0% | 97.8% | 82.5% | |||||
Completed) | Completed) | |||||||||
Special notes | None | |||||||||
230 million yen per annum(Note3) | ||||||||||
Estimated net operating income (NOI) represents the estimated | ||||||||||
Estimated net operating income | revenue/ expenditure balance under stabilized occupancy excluding | |||||||||
extraordinary | factors that | may occur | after acquisition. The | |||||||
(NOI) | ||||||||||
precondition is as below; these figures are not what OJR expects for | ||||||||||
the current fiscal year. | ||||||||||
- Occupancy rate:95.8% |
Note:
1. The "Address" column shows the residence indication if there is, and if there is none, the building address recorded in the registry. Accordingly, the address may differ from the lot number recorded in the registry.
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ORIX JREIT Inc. published this content on 24 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 December 2021 06:16:18 UTC.