October 27, 2021
For Translation Purposes Only
Real Estate Investment Fund Issuer:
Mori Hills REIT Investment Corporation
(Securities Code: 3234)
1-12-32 Akasaka, Minato-ku, Tokyo
Hideyuki Isobe, Executive Director
Asset Manager:
Mori Building Investment Management Co., Ltd.
Hideyuki Isobe, President & CEO
Inquiries: Akira Nemoto
General Manager, Financial Department
TEL: +81-3-6234-3234
MHR Announces Transaction with a Related Party (Mori Building Co., Ltd.)
(Atago Green Hills)
Mori Hills REIT Investment Corporation (hereinafter "MHR") announced that Mori Building Investment Management Co., Ltd. (hereinafter "MIM"), to which MHR entrusts its asset management, decided today to conduct a transaction with a related party, etc. as stipulated in the Act on Investment Trusts and Investment Corporations (hereinafter "Investment Trusts Act"). The details are as follows.
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Transaction Overview
MHR has decided to renew the memorandum between co-owners concerning the buildings lease business and property management which was concluded with Mori Building Co., Ltd. on May 1, 2022 of Atago Green Hills owned by MHR. - Summary of the Renewal and Reasons
Based on the appraisal on continuing rent from Japan Real Estate Institute and result of the discussion between the parties, MHR has decided to renew the agreement under the same conditions as below which are equivalent to those of before renewal.
(1) | Leased property | : Atago Green Hills (Note 1) | |
(2) | Leased area | : | 34,550.34 m2 (Note 2) |
(3) | Lessee | : Mori Building Co., Ltd. | |
(4) | Leasing scheme | : | Fixed-rent master lease |
- Term of agreement before renewal : From May 1, 2012 to April 30, 2022
(6) | Term of agreement after renewal | : From May 1, 2022 to April 30, 2027 | |
(7) | Monthly rent before renewal | : 168,720,000 yen (Note 3) | |
(8) | Monthly rent after renewal | : 168,720,000 yen (Note 3) | |
(9) | Security deposits before change | : 1,349,760,000 yen (Note 4) | |
(10) | Security deposits after change | : 1,349,760,000 yen (Note 4) | |
(11) | Planned date of change | : | May 1, 2022 |
(12) | Date of execution | : | October 29, 2021 |
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(Note 1) The lease right is granted to Mori Building Co., Ltd, one of the co-owners, by the trust fiduciary, and a fixed amount is paid as its consideration. Therefore, it is deemed as a fixed-rent master lease and is indicated as such. The same applies hereinafter.
(Note 2) The area indicates an area obtained by multiplying the quasi co-ownership interest ratio of trust beneficial interests (74%) by total leased area of real estate in trust.
(Note 3) The figure indicates an amount obtained by multiplying the quasi co-ownership interest ratio of trust beneficial interests by monthly rent of the real estate in trust.
(Note 4) The figure indicates an amount obtained by multiplying the quasi co-ownership interest ratio of trust beneficial interests by deposits of real estate in trust.
3. Overview of Related Party, etc.
Name | Mori Building Co., Ltd. | |
Location | 6-10-1 Roppongi, Minato-ku, Tokyo | |
Representative | Shingo Tsuji, President & CEO | |
Scope of business | General developer | |
Capital | 79,500 million yen (as of March 31, 2021) | |
Established | June 2, 1959 | |
Major shareholder | Mori Kiyo Co., Ltd. (as of March 31, 2021) | |
Net assets | 428,691 million yen (as of March 31, 2021) | |
Total assets | 1,876,818 million yen (as of March 31, 2021) | |
Relationship with MHR and Asset Manager (as of October 27, 2021) | ||
Mori Building is a major unitholder (15.0% stake) of MHR. Mori | ||
Capital relationship | Building is also the wholly owning parent company (100% stake) | |
of the Asset Manager, and thus constitutes a related party, etc. as | ||
defined in the Investment Trusts Act. | ||
Personnel relationship | One director and one auditor of the Asset Manager are sent from | |
this company. | ||
Mori Building has executed a support agreement and information | ||
provision agreement with MHR and the Asset Manager and an | ||
advisory business consignment agreement with the Asset | ||
Manager, and provides support, etc. in connection with property | ||
acquisitions, etc. In addition, Mori Building has executed a brand | ||
Business relationship | mark licensing contract with MHR and grants the license to use | |
the brand name "Mori Hills REIT" and the "m" brand mark. | ||
Furthermore, as for assets MHR owns in the form of trust | ||
beneficial interests, Mori Building has executed a building lease | ||
agreement (so called "master lease agreement") with a trustee, | ||
and leases the entire property as a master lessee. Mori Building | ||
has also executed a property management agreement and | ||
conducts property management of the property. | ||
Application of status | Mori Building falls under the category of other affiliated | |
as a related party | companies of MHR. In addition, it is the parent company of the | |
Asset Manager. | ||
4. Other
Upon consultation with Mori Building Co., Ltd., the following appraisal values were decided to be the revised amounts.
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Appraisal value by Japan Real Estate Institute concerning continuous monthly rents (Note 1)
Appraisal value | 168,720,000 yen (Note 2) |
Appraisal date | September 1, 2021 |
(Note 1) Continuous usage fee in accordance with continuous rent is calculated in the appraisal.
(Note 2) The figure indicates an amount obtained by multiplying the quasi co-ownership interest ratio of trust beneficial interests (74%) by the appraisal value.
5. Procedures Concerning Transactions with Related Party, etc.
To comply with applicable laws and regulations and with the asset management agreement, as well as to prevent the interests of MHR from being negatively impacted, the Asset Manager has conducted adequate procedures pursuant to the Related Parties Transaction Guidelines. In addition, MIM will deliver a written statement to MHR, pursuant to the Investment Trusts Act.
6. Outlook
There will be no impact on MHR's forecasts of financial results for the fiscal period ending January 2022 (August 1, 2021 to January 31, 2022) and the fiscal period ending July 2022 (February 1 2022 to July 31, 2022).
MHR's website address is https://www.mori-hills-reit.co.jp/en/
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