July 8, 2025
For Immediate Release
REIT Issuer HEIWA REAL ESTATE REIT, Inc.
5-1 Nihonbashi Kabuto-cho, Chuo-ku, Tokyo Aya Motomura, Executive Director
(Securities Code: 8966) Asset Management Company
HEIWA REAL ESTATE Asset Management CO., LTD. Masanori Hirano, Representative Director, President and Chief Executive Officer Inquiries: Naomi Kawasaki, General Manager of Planning & Finance Department
TEL. +81-3-3669-8771
Notice Concerning Acquisition of Domestic Assets
(HF HIKIFUNE RESIDENCE EAST and HF OMORI RESIDENCE)
HEIWA REAL ESTATE REIT, Inc. (hereinafter referred to as the "Investment Corporation") announces today that HEIWA REAL ESTATE Asset Management CO., Ltd. (hereinafter referred to as the "Asset Management Company"), the company to which the Investment Corporation entrusts its asset management operations, decided to execute the acquisition (hereinafter referred to as the "Acquisition") of assets (hereinafter referred to as the "Assets to be Acquired"). The details are as follows.
Details
Overview of the Acquisition
Property Number
Property Name (Note 1)
Type of Specified Asset
Investment Category
Investment Area
(Note 2)
Expected Acquisition Price
(million yen) (Note 3)
Appraisal Value
(million yen)
Re-116
HF HIKIFUNE RESIDENCE EAST
Real estate
Residence
Primary Investment Area
(Sumida-ku, Tokyo)
970
1,190
Re-117
HF OMORI RESIDENCE
Real estate and land lease rights
(Note 4)
Residence
Primary Investment Area
(Ota-ku, Tokyo)
1,300
1,610
Total
2,270
2,800
(Note 1) The names of the Assets to be Acquired are currently "Harmony Residence Tokyo Tree Kyojima" for Re-116 and "Season Flats Omorikita" for Re-117. Re-116 is to be changed to "HF HIKIFUNE RESIDENCE EAST" and Re-117 to "HF OMORI RESIDENCE" on March 1, 2026 after the Investment Corporation has acquired these properties. Accordingly, these names after the change are recorded. The same will apply below.
(Note 2) The "Primary Investment Area" refers to the 23 Wards of Tokyo, the "Secondary Investment Area" refers to Tokyo excluding the Primary Investment Area, major urban areas in Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture, and the "Regional Investment Area" refers to major urban areas in the Metropolitan Area excluding the Primary Investment Area and the Secondary Investment Area. The "Metropolitan Area" refers to the Central Cities and the surrounding municipalities that are socially and economically connected to the Central Cities and the "Central Cities" of the Metropolitan Area refers to the 23 Wards of Tokyo and the government-designated cities. The same will apply below.
(Note 3) "Expected Acquisition Price" refers to the purchase price provided in the real estate transaction agreement (excluding the amount equivalent to consumption tax), and does not include the amounts of expenses related to acquisition, fixed property tax, and city planning tax, etc.
(Note 4) The Asset to be Acquired is a building with land leasing rights (leasing rights for the building and land). Land leasing right is general leasing right.
Agreement execution date: July 8, 2025
Scheduled acquisition date: August 7, 2025 HF HIKIFUNE RESIDENCE EAST
August 8, 2025 HF OMORI RESIDENCE
Seller: Undisclosed (Note)
Acquisition financing: Cash on hand and borrowings
Payment method: Lump-sum payment at time of delivery
Brokerage: Not applicable
(Note) Not disclosed as consent cannot be obtained from the seller. The seller does not fall under a party with a special interest in the Investment Corporation and the Asset Management Company.
Reason for the Acquisition
The Investment Corporation's Articles of Incorporation stipulates that the "targets and policies of asset management" is to ensure the steady growth of the investment portfolio and medium- to long-term sustainable profit. Under the Articles of Incorporation, the Investment Corporation seeks to expand its assets through continuous property acquisitions and to improve the quality and profitability of the portfolio by replacing assets. The Asset Management Company has evaluated the Assets to be acquired on the following points and decided to acquire these properties based on the belief that the Acquisition would help realize the policy above and improve unitholder value.
HF HIKIFUNE RESIDENCE EAST
The property to be acquired is a four-minute walk from Keisei Hikifune Station on the Keisei Oshiage Line. It is a seven-minute walk from Hikifune Station on the Tobu Isesaki Line and Tobu Kameido Line. It takes approximately 19 minutes from Hikifune Station to Otemachi Station. The availability of multiple transport options (two stations, three lines) ensures easy, direct access across Tokyo. The area surrounding Hikifune Station and the property to be acquired is convenient due to the high number of commercial facilities, local-oriented shopping streets, restaurants and stores that carry essential items.
The property to be acquired includes 19 units with a 25.02-25.60 m2 1DK layout and 9 units with a 40.34- 41.45 m2 1LDK layout (28 units in total). Demand is expected to be mainly from single-person households and DINKs. In terms of the level of the facilities provided, the property considers security with the installed automatic locks, security cameras, video intercoms and other equipment. Moreover, the building is equipped with separated baths and toilets, bathroom dehumidifiers, electric toilet seats, home delivery boxes, and other features. As it was built in 2021, the property is relatively new. For these reasons, the property is considered as competitive, comparing it with other properties.
The net operating income (NOI) yield, based on the expected acquisition price and appraisal NOI is 4.1%. After accounting for depreciation, the NOI yield is 3.5%. The expected unrealized gain, calculated from the appraisal value and expected acquisition price, is 220 million yen.
HF OMORI RESIDENCE
The property to be acquired is an eight-minute walk from Omori Station on the JR Keihin-Tohoku Line. The location ensures easy access to major business districts and stations in Tokyo, including Shinagawa Station and Tokyo Station, and Haneda Airport. The area surrounding Omori Station is vibrant and convenient due to the availability of large commercial facilities, such as atré Omori, as well as the commercial area in front of the
station where a high number of retail buildings are located. Omori Ginza Shopping Street Milpa, comprising many small shops, is also located close to the property.
The property to be acquired includes 37 units with a 25.66-29.88 m2 1DK layout and 1 unit with a 50.62 m2 2LDK layout (38 units in total). Demand is expected to be mainly from single-person households. In terms of the level of the facilities provided, the property considers security with the installed automatic locks, security cameras, video intercoms and other equipment. Moreover, the building is equipped with separated baths and toilets, bathroom dehumidifiers, electric toilet seats, home delivery boxes, and other features. As it was built in 2024, the property is relatively new. For these reasons, the property is considered as highly competitive, comparing it with other properties.
The net operating income (NOI) yield, based on the expected acquisition price and appraisal NOI is 4.2%. After accounting for depreciation, the NOI yield is 3.3%. The expected unrealized gain, calculated from the appraisal value and expected acquisition price, is 310 million yen.
Details of the Assets to be Acquired
Property number/Property name
Re-116 HF HIKIFUNE RESIDENCE EAST
Type of asset
Real estate
Location (Note 1)
(Building address on real estate registry) 1-218, Kyojima, Sumida-ku, Tokyo
(Lot number)
1-51-19, Kyojima, Sumida-ku, Tokyo
Land
Form of ownership
Ownership
Area (Note 1)
437.87 ㎡
Use district (Note 2)
Quasi-industrial district
Building coverage ratio
(Note 3)
80%
Floor area ratio (Note 4)
200%
Building
Form of ownership
Ownership
Use (Note 1)
Residential complex
Structure/Floors (Note 1)
Reinforced concrete flat roof 6 floors above ground
Total floor space (Note 1)
915.23 ㎡
Construction completion date (Note 1)
September 10, 2021
Collateral
None
Property management company
Haseko Livenet, Inc.
Master lease company
Haseko Livenet, Inc.
Master lease type
Pass through
Tenant details (Note 5)
Total leasable units
28
Total leased units
28
Total rent income
42,679 thousand yen
Leasehold and security
deposits
1,292 thousand yen
Total leased floor space
852.24 ㎡
Total leasable floor space
852.24 ㎡
Occupancy rates (Based on floor space)
100%
NOI yield (Note 6)
4. 1%
Outline of the engineering report
Survey company
ERI SOLUTION CO., LTD.
Survey date
June 6, 2025
Replacement value
263,000 thousand yen
Probable maximum loss (PML)
12.0%
Long-term repairs (next 15 years)
33,130 thousand yen
Overview of real estate appraisal report
Appraiser
DAIWA REAL ESTATE APPRAISAL CO.,LTD.
Value date
July 1, 2025
Appraisal value
1,190,000 thousand yen
Other items of special note
The TV antenna of the eastern adjacent property encroaches on the Asset to be Acquired. A memorandum has been concluded regarding the crossing of the boundary.
(Note 1) "Location (excluding indication of lot number)," "Area," "Use," "Structure/Floors" "Total floor space" and "Construction completion date" are as stated in the real estate registry.
(Note 2) "Use district" is the type of use district as listed in Article 8, Paragraph 1, Item 1 of the City Planning Act.
(Note 3) "Building coverage ratio" is the ratio of building area to site area as stipulated in Article 53 of the Building Standards Act, and is a figure determined by city planning according to zoning and other factors.
(Note 4) The "Floor area ratio" is the ratio of the total floor space of the building to the site area as stipulated in Article 52 of the Building Standards Act.
(Note 5) Figures in "Tenant details" are as of May 31, 2025 and the amounts are rounded down to the nearest thousand yen. Furthermore, "Total rent income" is the annualized figure (multiplied by 12) of the monthly rent (including common expenses but not including fees for the usage of parking, storage rooms and such as well as consumption tax), based on lease agreements or sub-leasing agreements concluded between the seller and end tenants.
(Note 6) "NOI yield" indicates the NOI yield calculated by using the net operating income (NOI) for the 12 months, which serves as the assumption for the value indicated by the income approach under the direct capitalization method shown in the appraisal report for the Asset to be Acquired, and is rounded to the first decimal place.
Property number/Property name
Re-117 HF OMORI RESIDENCE
Type of asset
Real estate and land lease rights
Location (Note 1)
(Building address on real estate registry) 2-4-10, Omorikita, Ota-ku, Tokyo
(Lot number)
2-4-12, Omorikita, Ota-ku, Tokyo
Land
Form of ownership
General land lease right
Area (Note 2)
221.90 ㎡
Use district (Note 3)
Commercial district
Building coverage ratio
(Note 4)
80%
Floor area ratio (Note 5)
500%
Building
Form of ownership
Ownership
Use (Note 1)
Residential complex
Structure/Floors (Note 1)
Reinforced concrete flat roof 14 floors above ground
Total floor space (Note 1)
1,208.57 ㎡
Construction completion date (Note 1)
February 15, 2024
Collateral
None
Property management company
Tokyu Housing Lease Corporation
Master lease company
Tokyu Housing Lease Corporation
Master lease type
Pass through
Tenant details (Note 6)
Total leasable units
38
Total leased units
38
Total rent income
67,356 thousand yen
Leasehold and security deposits
8,083 thousand yen
Total leased floor space
1,054.90 ㎡
Total leasable floor space
1,054.90 ㎡
Occupancy rates (Based on floor space)
100%
NOI yield (Note 7)
4. 2%
Outline of the engineering report
Survey company
ERI SOLUTION CO., LTD.
Survey date
June 10, 2025
Replacement value
359,000 thousand yen
Probable maximum loss (PML)
4.0%
Long-term repairs (next 15 years)
11,690 thousand yen
Overview of real estate appraisal report
Appraiser
Tanizawa Sogo Appraisal Co., Ltd.
Value date
July 1, 2025
Appraisal value
1,610,000 thousand yen
Other items of special note
The block wall crosses the boundary from the Asset to be Acquired into the adjacent property to the east. A memorandum has been concluded regarding the crossing of the boundary.
There is a land lease agreement concluded between the owner and lessor (Note 8) of the subject land and the operating company that acquired it. The Investment Corporation is expected to acquire the lease rights of the land by succeeding the land lease agreement from the operating company. The overview of the land lease agreement is as stated below:
Purpose of the lease: To own a rental residential complex.
Period of the lease: From December 27, 2021 to December 26, 2051 (30 years). However, it can be renewed by paying a renewal fee.
(Note 1) "Location (excluding indication of lot number)," "Area," "Use," "Structure/Floors" "Total floor space" and "Construction completion date" are as stated in the real estate registry.
(Note 2) "Area" shows an actual measured area of the portion subject to leasing.
(Note 3) "Use district" is the type of use district as listed in Article 8, Paragraph 1, Item 1 of the City Planning Act.
(Note 4) "Building coverage ratio" is the ratio of building area to site area as stipulated in Article 53 of the Building Standards Act, and is a figure determined by city planning according to zoning and other factors.
(Note 5) The "Floor area ratio" is the ratio of the total floor space of the building to the site area as stipulated in Article 52 of the Building Standards Act.
(Note 6) Figures in "Tenant details" are as of May 31, 2025 and the amounts are rounded down to the nearest thousand yen. Furthermore, "Total rent income" is the annualized figure (multiplied by 12) of the monthly rent (including common expenses but not including fees for the usage of parking, storage rooms and such as well as consumption tax), based on lease agreements or sub-leasing agreements concluded between the seller and end tenants.
(Note 7) "NOI yield" indicates the NOI yield calculated by using the net operating income (NOI) for the 12 months, which serves as the assumption for the value indicated by the income approach under the direct capitalization method shown in the appraisal report for the Asset to be Acquired, and is rounded to the first decimal place.
(Note 8) The owner and lessor are not disclosed because the consent of the land owner and lessor has not been obtained.
Overview of the seller
The sellers of the Assets to be Acquired are a domestic specified purpose company and a domestic operating company. The Investment Corporation has decided not to disclose their identities because their consent has not been obtained. The sellers do not fall under a party with a special interest in the Investment Corporation and the Asset Management Company.