Daiwa Securities Living Investment : Notice Concerning Acquisition and Leasing of Assets (6 Rental Apartments and 1 Healthcare Facility)(4.8MB)

September 9, 2022

To All Concerned Parties

REIT Issuer: Daiwa Securities Living Investment Corporation

6-2-1 Ginza, Chuo-ku, Tokyo 104-0061

Yoshio Urata, Executive Director

(Securities Code: 8986)

Asset Manager: Daiwa Real Estate Asset Management Co. Ltd.

Yoshiki Nishigaki, President and Chief Executive Officer

Inquiries: Kentaro Azumi, General Manager, Corporate Division

Tel: [phone]

Notice Concerning Acquisition and Leasing of Assets

(6 Rental Apartments and 1 Healthcare Facility)

Daiwa Securities Living Investment Corporation (hereinafter referred to as the "Investment Corporation") hereby announces that Daiwa Real Estate Asset Management Co. Ltd. (hereinafter referred to as the "Asset Manager"), the asset manager of the Investment Corporation, has resolved to acquire and lease the real estate trust beneficiary interests (hereinafter referred to as the "Assets to Be Acquired") described below. Details are provided below.

Ⅰ. General Outline of the Acquisition

A general outline of the Assets to Be Acquired is detailed in the table below. As of September 9, 2022, the Investment Corporation has concluded trust beneficiary interest purchase agreements with each of the sellers for the Assets to Be Acquired, which are scheduled for acquisition on October 4, 2022.

Difference

between

Anticipated

Appraisal value

anticipated

Property type

acquisition price

(August 2022)

acquisition price

Property name

Location

(A)

(B)

and appraisal

Seller

(Note 1)

(JPY thousand)

(JPY thousand)

value (B)-(A)

(Note2) (Note 3)

(Note 3)

(JPY thousand)

((A)/(B))

(Note 3)

Gran Casa Minami-

Arakawa-ku, Tokyo

Residence

1,159,000

1,260,000

101,000

GK Tokyo

Senju

(Family)

(92.0%)

Residential 3

Gran Casa Hikifune

Sumida-ku, Tokyo

2,760,000

2,900,000

140,000

GK Tokyo

(95.2%)

Residential 6

Serenite Namba Plie

Osaka City, Osaka

2,739,200

2,790,000

50,800

(98.2%)

Gran Casa Oji

Kita-ku, Tokyo

Residence

1,150,000

1,210,000

60,000

GK Tokyo

(Studio)

(95.0%)

Residential 5

Gran Casa Ryogoku

Sumida-ku, Tokyo

1,120,000

1,160,000

40,000

East (Note 4)

(96.6%)

Gran Casa Tabata

Kita-ku, Tokyo

825,000

917,000

92,000

GK Tokyo

(90.0%)

Residential 8

Subtotal for residences

9,753,200

10,237,000

483,800

(95.3%)

Sunny Life Shibaura

Minato-ku, Tokyo

Healthcare

6,280,000

6,450,000

170,000

GK DA

facility

(97.4%)

Healthcare 11

Subtotal for healthcare facilities

6,280,000

6,450,000

170,000

(97.4%)

Total

16,033,200

16,687,000

653,800

(96.1%)

(Note 1) Studio means residences with 1R, 1K, 1DK, or 1LDK. Family

means residences with

2K, 2DK, 2LDK or more

rooms.

(Note 2) Anticipated Acquisition Price does not include acquisition expenses, adjustments to property tax and city planning tax and consumption tax and local consumption tax. The same applies hereinafter.

(Note 3) Amounts are rounded to the nearest unit and percentages are rounded to the first decimal place. Unless stated otherwise, the same applies hereinafter.

(Note 4) The name of the property was changed from "Rivio Maison Ryogoku East" to "Gran Casa Ryogoku East" on April 1, 2022. The same applies hereinafter.

(Note 5) Although there is intermediaries for the acquisition of Serenite Namba Plie, Gran Casa Oji and Sunny Life Shibaura, it does not fall under the category of an interested persons and other close affiliate.

Note: This press release was prepared as a public announcement regarding the acquisition and leasing of assets by the Investment Corporation and was not prepared with the aim of soliciting investments. Investors should exercise their own judgment in making investment decisions upon reviewing the prospectus, including any amendments thereto, prepared by the Investment Corporation in relation to the issuance of any new investment units.

II. Reason for the Acquisition and Leasing

Based on the asset management objectives and policies set forth in the Investment Corporations Agreement, we have decided to acquire and lease the Assets to Be Acquired in order to diversify and enhance the portfolio to achieve asset size growth and secure stable earnings.

The tenants of the Assets to Be Acquired meet the tenant selection criteria outlined in the Investment Corporation's Management System Report dated June 29, 2022.

Ⅲ. Details of Assets to Be Acquired and Leasing

The details of the Assets to Be Acquired and leasing are summarized in the following individual property tables. The following is a description of the items mentioned in the individual property tables.

a． Explanation of Overview of Properties

1. "Location (residential indication)" is stated based on the residential indication in principle. Where residential indication is not shown, building location (if there is more than one, the location of one of the buildings) is shown in accordance with either the housing number indication or the registry (including the Registration Record; the same applies hereinafter).
2. "Form of ownership" for both Land and Building refers the type of rights held by the Investment Corporation for real estate and by the Trustee for real estate trust beneficiary interests.
3. "Zoning" for Land refers to the types of use districts stipulated by Item 1, Paragraph 1, Article 8 of the City Planning Act (Law No. 100 of 1968, including later amendments) (hereinafter referred to as the "City Planning Act").
4. "Area" for Land is shown in accordance with the registry and may not correspond to the current reality.
5. "FAR" for Land refers to the ratio of the sum of the floor space of the building to the land area as stipulated in Article 52 of the Building Standards Act (Law No. 201 of 1950, including later amendments) (hereinafter referred to as the "Building Standards Act"), and the upper limit of floor-to-area ratio (designated floor-to-area ratio) as determined by city planning according to the use area. The designated floor-to-area ratio can be mitigated, increased, or reduced due to the width of roads connected to the site and other reasons, and may differ from the floor-to-area ratio that is actually in use.
6. "Building-to-landratio" for Land shows the ratio of the building area to the land area as stipulated in Article 53 of the Building Standards Act, and the upper limit of building-to-land ratio (designated building-to-land ratio) as determined by city planning according to the use area. The designated building-to-land ratio can be mitigated, increased, or reduced due to fireproofed structures in a fire prevention district and other factors, and may differ from the building-to-land ratio that is actually in use.
7. "Use" for Building refers to the building type recorded in the registry.
8. "Structure/Floors" for Building is based on records in the registry.
9. "Number of leasable units" (in the case of a residence) indicates the number of units that can be leased as of July 31, 2022, for the Assets to Be Acquired.
10. "Number of leasable compartments" (in the case of healthcare facilities) indicates the number of compartments of a building where a lease contract has been concluded as of July 31, 2022, for the Assets to Be Acquired and includes retail stores, offices, etc., if any.
11. "Total floor area" for Building is based on records in the registry and does not include the floor area of annexed buildings.
12. "Construction completion" for Building refers to the date of completion recorded in the registry.
13. "Estimated emergency repair expenses," "Estimated short-term repair expenses," and "Estimated long-term repair expenses" are rounded down to the nearest thousand, while ratios are rounded to the first decimal place.
14. "PML" data was acquired from Tokyo Marine dR Co., Ltd. in August 2022.
15. "Property manager" is the property management company entrusted with, or scheduled to be entrusted with the property management operations.
16. "Master lessee" is the party that has, or is scheduled to enter into a master lease agreement concerning the asset in question.
17. "Type of master lease" is either "Pass through" or "Guaranteed rent." "Pass through" is a master lease agreement where the master lessee passes on the rent equivalent to rent paid by the end tenant and "Guaranteed rent" is a master lease agreement in which the master lessee pays a fixed rent.
18. "Real estate rent revenue" is the monthly rental income (rent, common service fee, parking lot income, etc.) rounded down to less than JPY 1,000 based on the figures and information available as of July 31, 2022, of the Assets to Be Acquired.
19. "Lease and guarantee deposits, etc." are the lease or guarantee deposits (residences, retail stores, offices, parking lots, etc.) rounded down to less than JPY 1,000 based on the figures and information available as of July 31, 2022, of the Assets to Be Acquired.
20. "Leasable area" shows the leasable area of each of the Assets to Be Acquired as of July 31, 2022, excluding area used by storage spaces, parking spaces, custodian areas, signboards, vending machines, antennas and other spaces leased to the lessee

Note: This press release was prepared as a public announcement regarding the acquisition and leasing of assets by the Investment Corporation and was not prepared with the aim of soliciting investments. Investors should exercise their own judgment in making investment decisions upon reviewing the prospectus, including any amendments thereto, prepared by the Investment Corporation in relation to the issuance of any new investment units.

in addition to their main use, or other areas leased for the maintenance and supervision of the relevant property (including loan for use). Furthermore, leasable area is calculated using the center line of the wall, and includes the meter boxes and pipe spaces allotted to each unit.

1. "Number of tenants" shows the total number of tenants for the Assets to Be Acquired as of July 31, 2022, and shall be one
2. 1. if a master lease agreement has been concluded with a master lessee.
3. "Total leased area" is the sum of the area leased through lease agreements with end-tenants (however, in cases where properties are wholly leased to realtors through guaranteed rent agreements or where a master lessee wholly leases it to another company, lease agreements where properties are wholly leased to a lessee) at the Assets to Be Acquired that are in effect as of July 31, 2022.
4. "Occupancy rate" is the figure obtained by dividing the total leased area by the leasable area for the Assets to Be Acquired as of July 31, 2022, rounded down to the first decimal place.
5. The "Collateral" section denote if there is collateral to be borne by the Investment Corporation for the asset to be acquired, or if there is collateral to be borne after the acquisition.
6. The "Features" sections have been prepared based on the analyses of the Asset Manager and the appraisal reports of the real estate appraiser concerning the Assets to Be Acquired.
7. The "Special Notes" section denotes important factors upon considering the rights, appraisal values, the impact on profitability and disposability, etc., concerning the Assets to Be Acquired.

1. Explanation of Overview of Operator and Facility (Only for Healthcare Facilities)

1. "Operator" refers to the party operating the long-term care facilities at the Assets to Be Acquired as displayed in the explanation of important matters.
2. "Opening date" refers to the date the facility opened as displayed in the explanation of important matters.
3. "Type of facility" refers the type of the facility as displayed in the explanation of important matters.
4. "Number of rooms" refers to the number of rooms as displayed in the explanation of important matters.
5. "Right to reside status" refers to the right to reside status as displayed in the explanation of important matters.
6. "Resident capacity" refers to the resident capacity as displayed in the explanation of important matters.
7. "Room area range" refers to the floor area of rooms as displayed in the explanation of important matters.
8. "Number of residents" refers to the number of residents as displayed in the explanation of important matters.
9. "Requirements for entry" refers to the requirements for occupancy at the facility as displayed in the explanation of important matters.
10. "Occupancy rate" is the ratio obtained by dividing the number of residents by resident capacity as displayed in the explanation of important matters, rounded down to one decimal place. Furthermore, the occupancy rate indicated in the explanation of important matters may differ from the ratio obtained by dividing the number of residents by resident capacity due to situations wherein people temporarily not residing at the facility are included.
11. "Average level of nursing care required" refers to the figure obtained by multiplying the respective number of residents categorized in the explanation of important matters as either "independent," "requiring support level 1," "requiring support level 2," "requiring nursing care levels 1-5," and "other" by 0, 0.375, 1, 1-5 and 1, respectively and dividing the total by the number of residents, rounded down to one decimal place.
12. "Average age of residents" refers to the average age as displayed in the explanation of important matters, rounded down to the nearest whole number.
13. "One-timeentrance fee" refers to the one-time entrance fee for single occupancy for the general public as displayed in the explanation of important matters or on the price list obtained from the operator.
14. "Monthly service fee" refers to the monthly service fee for single occupancy for the general public (excluding user payments for long-term care insurance services) as displayed in the explanation of important matters or on the price list obtained from the operator.
15. "Staff engaged in nursing care" refers to the assignment ratio of staff on contract as displayed in the explanation of important matters.
16. "Staff at night (number of staff members at minimum)" refers to the staff at night (number of staff members at minimum) as displayed in the explanation of important matters.
17. "Cooperating medical organization" refers to the cooperating medical organization, etc. as displayed in the explanation of important matters.
18. "Cooperating dental organization" refers to the cooperating dental organization as displayed in the explanation of important matters.

Note: This press release was prepared as a public announcement regarding the acquisition and leasing of assets by the Investment Corporation and was not prepared with the aim of soliciting investments. Investors should exercise their own judgment in making investment decisions upon reviewing the prospectus, including any amendments thereto, prepared by the Investment Corporation in relation to the issuance of any new investment units.

1. Gran Casa Minami-Senju

							Overview of the Property
	Category of anticipated		Trust beneficiary interests
	property for acquisition
	Trustee (scheduled)	Sumitomo Mitsui Trust Bank, Limited.
	Trust agreement period	February 1, 2022 to October 31, 2032
	Anticipated acquisition price	JPY 1,159 million		Scheduled acquisition date	October 4, 2022
	Appraisal value			JPY 1,260 million		Appraisal firm	Tanizawa Sogo Appraisal
	(appraisal date)			(as of August 1, 2022)		Co., Ltd.
	Location					3-4-7,Minami-Senju,Arakawa-ku, Tokyo
	(residential indication)
							Approximately 350 meters from Minami-Senju Station on the Tokyo Metro Hibiya Line
	Access					Approximately 520 meters from Minami-Senju Station on the JR Joban Line, Tsukuba-
							Express Line
				Form of		Ownership		Zoning		Quasi-Industrial District
	Land			ownership
			Area			482.96 m2		FAR/Building-to-land		300% / 60%
							ratio
				Form of		Ownership		Use		Condominium
	Building			ownership
			Structure/Floors		RC, 9-story building with		Number of leasable units		37 units
					flat roof
				Total floor area	1,752.36 m2		Construction completion	December 1, 2021
	Building	engineer			Kanoh Design .Co,Ltd.
	Constructor			SHINSAMPEI CONSTRUCTION CO.,LTD.
	Building inspection agency	J Architecture Inspection Center (JAIC)
	Estimated emergency repair		JPY 0 thousand		Estimated short-term		JPY 0 thousand
	expenses						repair expenses
	Estimated long-term repair		JPY 12,017 thousand		PML		5.9%
	expenses
	Property manager			Tokyu Housing Lease Corporation
	Master lessee			G.K. Japan Rental Housing		Type of master lease	Pass through
							Overview of Leasing
	Real estate rent revenue	JPY 5,141 thousand
	Lease and guarantee deposits,		JPY 7,002 thousand
	etc.
	Total leasable area		1,430.06 m2		Number of tenants		1
	Total leased area			1,379,38 m2		Occupancy rate	96.5%
	Collateral					None
							Features
	Site features:	The property is a condominium consisting of 1R, 1K and 2LDK completed in December 2021, located
					a 5-minute walk from Minami-Senju Station on the Tokyo Metro Hibiya Line and a 7-minute walk
					from Minami-Senju Station on the JR Joban Line and Tsukuba Express. With multiple train lines
					available and good access to central Tokyo, this property is expected to have stable needs, mainly for
					singles and DINKS.
	Property features: The property is a 9-story reinforced concrete building, consisting of 8 units of 1R, 10 units of 1K and
					19 units of 2LDK. In addition to common facilities such as auto-lock, intercom with monitor, security
					camera, delivery box, etc. and in-house facilities such as bathroom dryer, warm water washing toilet
					seat, etc., internet connection is standard equipment in each unit. It is a property that provides residents
					with a high quality and comfortable life.
							Special Notes
	None
2. Gran Casa Hikifune
							Overview of the Property
	Category of anticipated		Trust beneficiary interests
	property for acquisition

Note: This press release was prepared as a public announcement regarding the acquisition and leasing of assets by the Investment Corporation and was not prepared with the aim of soliciting investments. Investors should exercise their own judgment in making investment decisions upon reviewing the prospectus, including any amendments thereto, prepared by the Investment Corporation in relation to the issuance of any new investment units.

	Trustee (scheduled)	Sumitomo Mitsui Trust Bank, Limited.
	Trust agreement period	From September 30, 2021 to October 31, 2032
	Anticipated acquisition price	JPY 2,760 million		Scheduled acquisition date	October 4, 2022
	Appraisal value		JPY 2,900 million		Appraisal firm	DAIWA REAL ESTATE
	(appraisal date)		(as of August 1, 2022)		APPRAISAL CO.,LTD.
	Location				2-47-12, Yahiro, Sumida-ku, Tokyo
	(residential indication)
	Access				Approximately 600 meters from Omurai Station on the Tobu Tetsudo Kameido Line
				Approximately 750 meters from Keisei Hikifune Station on the Keisei Oshiage Line
				Form of		Ownership		Zoning		(A) Commercial District
	Land			ownership				(B) Quasi-Industrial District
			Area		928.55 m2 (Note)		FAR/Building-to-land		(A) 400% / 80%
						ratio		(B) 300% / 80%
				Form of		Ownership		Use		Condominium
	Building			ownership
			Structure/Floors		RC, 9-story building with		Number of leasable units		92 units
					flat roof
				Total floor area	3,532.19 m2		Construction completion	May 25, 2021
	Building	engineer	GUY PLANNING Co., Ltd.
	Constructor	Nankai Tatsumura Construction Co., Ltd.
	Building inspection agency	UHEC
	Estimated emergency repair		JPY 0 thousand		Estimated short-term		JPY 710 thousand
	expenses					repair expenses
	Estimated long-term repair		JPY 27,910 thousand		PML		5.6%
	expenses
	Property manager	Haseko Livenet, Inc.
	Master lessee	G.K. Japan Rental Housing		Type of master lease	Pass through
						Overview of Leasing
	Real estate rent revenue	JPY 10,774 thousand
	Lease and guarantee deposits,		JPY 3,351 thousand
	etc.
	Total leasable area		2,887.11 m2		Number of tenants		1
	Total leased area	2,805.22 m2		Occupancy rate	97.2%
	Collateral				None

	Features
Site features:	This property is a condominium completed in May 2021 located a 9-minute walk from Omurai Station
	on the Tobu Kameido Line and a 10-minute walk from Keisei Hikifune Station on the Keisei Oshiage
	Line. The Keisei Oshiage Line connects to the Toei Subway Asakusa Line from Oshiage Station. From
	Keisei Hikifune Station, it takes about 17 minutes to Nihonbashi Station and about 21 minutes to
	Shimbashi Station, providing good access to central Tokyo. In addition to houses and factories, there
	are many high-rise apartment buildings in the surrounding area and there are supermarkets,

convenience stores and shopping streets within walking distance.

Property features: The property is a 9-story reinforced concrete building, consisting of 59 units of 1DK, 23 units of 1LDK, 8 units of 2DK and 2 units of 2LDK. In addition to common facilities such as auto-lock, intercom with monitor, security camera, delivery box, etc. and in-house facilities such as bathroom dryer, warm water washing toilet seat, etc., each unit is equipped with internet connection as standard equipment. In addition, the common area on the 1st floor is equipped with a large common space that residents can use and a pet foot washing area, providing residents with a high quality and comfortable life.

Special Notes

The road on the southwest side of the property is a city planning road that received a planning decision on March 26, 1946 (the start date of the project is undecided). Therefore, when the road is constructed, the boundary line between the property and the road is scheduled to retreat approximately 3.8m toward the property.

(Note) Part of the land of this property (1.22 ㎡) is used as a road.

3. Serenite Namba Plie

Overview of the Property

	Category of anticipated		Trust beneficiary interests
	property for acquisition

Note: This press release was prepared as a public announcement regarding the acquisition and leasing of assets by the Investment Corporation and was not prepared with the aim of soliciting investments. Investors should exercise their own judgment in making investment decisions upon reviewing the prospectus, including any amendments thereto, prepared by the Investment Corporation in relation to the issuance of any new investment units.