Ntt Ud Reit Investment CorporationTSE: 8956

Notice Concerning Acquisition of Trust Beneficiary Interests in Domestic Real Estate and Transfer of Trust Beneficiary Interests in Domestic Real Estate

Dec 16, 2024 at 6:45 AM UTC · Issued by NTT UD REIT Investment Corporation

For Immediate Release	December 16, 2024

REIT Issuer
NTT UD REIT Investment Corporation
1-5-1 Otemachi, Chiyoda Ward, Tokyo
Executive Director	Takeshi Oodera
Asset Management Company	(Securities Code 8956)

NTT Urban Development Asset Management Corporation
President & CEO	Yutaka Torigoe
[Contact]

Director & CFO, Finance	Takeshi Iwata
Department
TEL: +81-3-6262-9400

Notice Concerning Acquisition of Trust Beneficiary Interests and

Transfer of Trust Beneficiary Interests in Domestic Real Estate

NTT UD REIT Investment Corporation (“NUD”) announces that NTT Urban Development Asset Management Corporation (“UDAM”), the asset management company of NUD, today decided on the acquisition of two residential properties (hereinafter referred to as the “Acquisition”) and the transfer of two office buildings (hereinafter referred to as the “Transfer,” and the “Acquisition” and the “Transfer” are collectively referred to as the “Transactions”) as described below.

1. Overview of the Transactions

Overview of the Acquisition

Property Name	Wellith IVY Hatanodai	Wellith IVY Mondoyakujin
Type of Asset for	Beneficiary interest in a real estate trust (Note 1)
Acquisition

Acquisition price	① 1,750 million yen	1,800 million yen
(Note 2) (Note 3)	➁ 485 million yen

	① NTT Urban Development Corporation
Seller (Note 3)	➁ Nippon Telegraph and Telephone East	NTT Urban Development Corporation
	Corporation
Intermediary	None
Acquisition	December 16, 2024
Decision Date

Conclusion Date	December 16, 2024
Planned Delivery	February 28, 2025
Date

Payment Method	Lump-sum payment upon delivery
Financing for	Proceeds from sale received due to the Transfer and cash on hand will be used for the
Acquisition	acquisition.

(Note 1) For details of the trust property, please refer to “3. Details of the Properties for Acquisition” below.

(Note 2) The acquisition price represents the transaction price before taxes, not including various expenses required for the acquisition of each property.

(Note 3) NUD will acquire the quasi co-ownership interests in Wellith IVY Hatanodai held respectively by NTT Urban Development Corporation (hereinafter referred to as “NTT UD”) and Nippon Telegraph and Telephone East Corporation (hereinafter referred to as “NTT East”) at the same time, and the ratio of ownership interest after the acquisition will be 100%. The acquisition price and seller represent the information for each seller.

(2) Overview of the Transfer

Property Name	Landic Shimbashi 2 Building	NTT CRED Okayama Building
Type of Asset for			Quasi co-ownership interest of
Sale	Beneficiary interest in a real estate trust	beneficiary interest in a real estate trust
(Note 1)			(60% ownership interest)
	10,000 million yen (Note 3)
	First:	3,334 million yen
Sale Price		(equivalent to 33.34%)	3,360 million yen
Second:	3,333 million yen
(Note 2)
	(equivalent to 33.33%)

	Third:	3,333 million yen
		(equivalent to 33.33%)
Book Value	6,346 million yen	3,860 million yen
(as of October 31, 2024)	(as of October 31, 2024)

Gain on Sale
(estimate)	3,663 million yen	- 564 million yen
(Note 4)
Buyer	NTT Urban Development Corporation	Domestic corporation (Note 5)
Intermediary	None		Yes (Note 6)
Transfer Decision	December 16, 2024	December 16, 2024
Date

Conclusion Date	December 16, 2024	December 16, 2024
Planned Delivery	First:	February 28, 2025
Second:	October 30, 2025	March 6, 2025
Date
Third:	April 28, 2026

			Receive an amount equivalent to 5% of
			the transaction price as deposit by
Payment Method	Lump-sum payment upon each delivery	December 16, 2024, and receive the
			remaining amount and deliver the
			property on the planned delivery date.
Use of Proceeds	The proceeds will be used as part of the purchase price for the Acquisition and cash
from Sale	on hand

(Note 1) For details of the trust property, please refer to “4. Details of the Properties for Sale” below.

(Note 2) The sale price represents the transaction price before taxes, not deducting various expenses required for the transfer of each property.

(Note 3) The transfer of Landic Shimbashi 2 Building will take place over three installments, with the first installment of 33.34% quasi co-ownership interest on February 28, 2025, the second installment of 33.33% quasi co-ownership on October 30, 2025, and the third installment of 33.33% quasi co-ownership on April 28, 2026.

(Note 4) Gain on sale (estimate) has been calculated by deducting a combined amount of the assumed book value as of the planned delivery date calculated by taking into account the capital expenditure and depreciation (estimate) up to the planned delivery date based on the book value of each property as of October 31, 2024 with expenses related to the Transfer (estimate) from the sale price.

(Note 5) The company name is not disclosed as no consent for disclosure has been obtained from the domestic corporation, which is the buyer.

(Note 6) The intermediary of the Transfer does not fall under the category of interested party, etc. stipulated in the Act on Investment Trusts and Investment Corporations (hereinafter referred to as the “Investment Trust Act”) and interested parties stipulated in the internal rules of UDAM.

2. Reason for the Transactions

NUD analyzes the current and future profitability based on the location, building characteristics, tenant trends, surrounding market environment, etc. of its properties, sells properties with increased leasing risks and properties whose profitability is expected to decline due to increased costs such as repair costs, and promotes asset replacements that carefully select and acquire properties that contribute to the improvement of portfolio quality. The Transactions will be implemented as part of such initiative.

Of the assets to be transferred, Landic Shimbashi 2 Building is a medium-sized office building that was completed 46 years ago, and the occupancy rate as of October 2024 is 64.2%. Since tenants were scheduled to move out after that, we considered both continued ownership through the refilling of tenants and sale of the property. The property received inquiries from NTT UD, the sponsor, and third parties other than the sponsor, and we have judged that property replacement utilizing sponsor support would contribute to the improvement of unitholder value over the medium to long term by taking into account the sale price and the conditions of the candidate properties for replacement.

Wellith IVY Hatanodai and Wellith IVY Mondoyakujin, the assets to be acquired, are both student dormitories developed by NTT UD, and will be acquired in place of Landic Shimbashi 2 Building. Since both properties are relatively new and have a full range of common area facilities including a shared kitchen and a lounge, and are operated by operators with abundant experience in the operation of student apartments and student dormitories, we have judged that they will remain competitive in their areas into the future and contribute to the stability and future growth of NUD’s portfolio.

Of the assets to be transferred, NTT CRED Okayama Building is a complex consisting of office and commercial facilities jointly owned by NTT UD. Although it is located in the center of Okayama City and the office floors maintain a high occupancy rate, we have carried out a bidding process and decided on the Transfer as the occupancy rate of the retail floors has not improved due to changes in the trade area in recent years and repair costs, etc. are expected to increase in the future. Although the transfer price is below the book value, it is above the appraisal value, and taking into account the future income and expenditure outlook for the property, we have decided that selling it together with the co-owner will contribute to unitholder interests in the medium to long term.

Landic Shimbashi 2 Building is to be transferred in three installments, and a portion of the gain on sale of the property will be retained as a reserve for reduction entry and used to stabilize the future distribution level.

3. Details of the Properties for Acquisition

Wellith IVY Hatanodai

Property Name		Wellith IVY Hatanodai
Type of Specified Asset	Beneficiary interest in a real estate trust
Name of Trustee		Sumitomo Mitsui Trust Bank, Limited
Trust Agreement Term	From February 28, 2025 to February 28, 2035
Location		Land	1-47-1 and 1-47-35 Kitamagome, Ota Ward, Tokyo
		1-47-1 and 1-47-35 Kitamagome, Ota Ward, Tokyo
(Note 1)		Building
	1-16-11 Kitamagome, Ota Ward, Tokyo

				Nine-minute walk from Hatanodai Station on the Tokyu Ikegami Line and
			Access	Tokyu Oimachi Line
				Nine-minute walk from Nagahara Station on the Tokyu Ikegami Line
				“Wellith IVY” is a series of student dormitories under the brand of “Wellith,” a
Property			residence developed by NTT UD.
		This property is a relatively new property completed in January 2022.
Characteristics		Location,	Having a total of 99 units, it is a large student dormitory in the area. It has a
			full range of common areas such as a shared kitchen and a rooftop terrace,
			etc.
			and also ensures living convenience as it is close to a convenience store, drug

				store, and mini supermarket.
				On the first floor, there are two retail sections apart from the student
				dormitory.
Area (Note 1)		1,380.00 m2 (Note 2)
	3,664.63 m2

Type of Ownership	Fee simple ownership for both land and building
Use of Building		Student Dormitory and Retail
Structure of Building	Reinforced concrete structure with flat roof, 9 stories
(Note 1)

Construction Completion	January 2022
(Note 1)

Acquisition Price		2,235 million yen
Appraisal
	Appraiser		Japan Real Estate Institute
	Appraisal Value	2,590 million yen
	Survey Date		October 1, 2024
Property Manager	NTT Urban Value Support, Inc.
Collateral		None
Tenant Details (Note 3)
	Total Number of	101
	Tenants

	Monthly Rent		9 million yen
	Tenant Security	41 million yen
	Deposits

	Total Leasable Space	3,669.89 m2

	Total Leased Space	3,669.89 m2
		October,	October	October		October		October
Change in Occupancy Rate	2020	2021	2022		2023		2024
		- %	- %	100.0%		100.0%		100.0%
PML (Note 4)	12.6%
Takenaka Corporation

		- For the entire building of the property, a pass-through-type master lease
		agreement with the trust trustee as the lessor and NTT Urban Value
		Support, Inc. as the lessee will be concluded. For ① student dormitory
		section, the lessee will conclude a rent-guaranteed master lease
Other Special Notes	agreement with Sigma Japan Co., Ltd., and Sigma Japan Co., Ltd. will
sublease it to end tenants, and for ②	retail section, the	lessee will

		sublease it to end tenants.
		- With regard to the transfer of the building of the property, Sigma Japan Co.,
		Ltd., which will be the sublessee of the building, has the right of preferential
		treatment.

(Note 1) Each piece of information in “Location” (excluding residential indication), “Area,” “Structure of Building” and “Construction Completion” is described based on the information indicated in the certificate of registered matters. The same applies hereinafter.

(Note 2) Of the land, 848.70 m2 (47-35) will be acquired from NTT UD and 531.30 m2 (47-1) from NTT East.

(Note 3) “Tenant Details” indicate the figure as of October 31, 2024, and “Total Number of Tenants” indicates the number of end tenants (final sublessees) included in the number of tenants.

(Note 4) The PML, or probable maximum loss, refers to the probability of the maximum loss expected to result from an earthquake. Although there is no single precise definition of PML, PML herein is based on the event of the maximum earthquake that can be expected to occur in the region where the subject building is located (probable maximum earthquake = PME: an earthquake of a size that has a 10% probability of occurring within 50 years = occurs once every 475 years) occurring and is represented by expressing the construction costs required to restore the post-PME building to its pre-PME state as a percentage of the total construction costs required to reconstruct the building (= replacement cost). The figure does not take into account the impact of the collapse of neighboring buildings or fire, water, and other damages. The PML value of the entire building is indicated. The same applies hereinafter.

(2) Wellith IVY Mondoyakujin

Property Name		Wellith IVY Mondoyakujin
Type of Specified Asset	Beneficiary interest in a real estate trust
Name of Trustee		Sumitomo Mitsui Trust Bank, Limited
Trust Agreement Term	From February 28, 2025 to February 28, 2035
Location		Land	33-15 Nomacho, Nishinomiya City, Hyogo
	Building	33-15 Nomacho, Nishinomiya City, Hyogo
			2-32 Nomacho, Nishinomiya City, Hyogo

			Access	Four-minute walk from Mondoyakujin Station on the Hankyu Imazu Line
				The property is a four-minute walk from the nearest station, offering
				access to multiple universities including Kwansei Gakuin University’s
Property			Nishinomiya Uegahara Campus by foot or bicycle, and is in an excellent
	Location,	location as a student dormitory.
Characteristics
	etc.	Completed in January 2021, it is a relatively new large property with a

				total of 159 units and is equipped with a full range of common area
				facilities of the shared kitchen, lounge, studio, etc., taking advantage of
				the size.
Area		2,202.08 m2
	4,270.71 m2

Type of Ownership	Fee simple ownership for both land and building
Use of Building		Student dormitory
Structure of Building	Reinforced concrete structure with flat roof, 6 stories
Construction Completion	January 2021
Acquisition Price		1,800 million yen
Appraisal
	Appraiser		Japan Real Estate Institute
	Appraisal Value	1,930 million yen
	Survey Date		October 1, 2024
Property Manager	National Students Information Center Co., Ltd.
Collateral		None
Tenant Details (Note 1)
	Total Number of	156
	Tenants

	Monthly Rent		11 million yen
	Tenant Security	-

	Deposits
	Total Leasable Space	2,937.93 m2
	Total Leased Space	2,882.61 m2
		October,	October	October	October	October
Change in Occupancy Rate	2020	2021	2022	2023	2024
		- %	(Note 2)	65.4%	99.4%	98.1%
PML	5.4%
Takenaka Corporation

		- For the entire building of the property, a pass-through-type master lease
Other Special Notes	agreement with the trust trustee as the lessor and Sigma Japan Co., Ltd.
as the lessee will be concluded, and in addition, the lessee will conduct

		subleasing.

(Note 1) “Tenant Details” indicate the figure as of October 31, 2024, and “Total Number of Tenants” indicates the number of end tenants (sublessees) included in the number of tenants.

(Note 2) The occupancy rate in October 2021 is not indicated due to unavoidable circumstances as information could not be obtained from the seller.

4. Details of the Properties for Sale

Landic Shimbashi 2 Building

Property Name	Landic Shimbashi 2 Building
Type of Specified Asset	Beneficiary interest in a real estate trust
Name of Trustee	Sumitomo Mitsui Trust Bank, Limited
Trust Agreement Term	From April 27, 1999 to April 30, 2032
Location	Land	3-14-1 Nishi-Shinbashi, Minato Ward, Tokyo, and four other parcels
	3-14-1 Nishi-Shinbashi, Minato Ward, Tokyo, etc
(Note 1)	Building
3-7-1, Nishi-Shinbashi, Minato Ward, Tokyo

Area (Note 1)		1,400.74 m2
		8,332.65 m2

Type of Ownership	Fee simple ownership for both land and building
Use of Building	Office
Structure of Building	Steel-framed reinforced concrete structure with flat roof, 11 stories (Note 2)
(Note 1)

Construction Completion	December 1978
(Note 1)

Sale Price		10,000 million yen
Book Value		6,346 million yen (as of October 31, 2024)
Gain on Sale (estimate)	3,663 million yen
Appraisal
	Appraiser		Japan Real Estate Institute
	Appraisal Value	9,540 million yen
	Survey Date	November 30, 2024
Tenant Details (Note 3)
	Total Number of	4
	Tenants

	Monthly Rent	26 million yen
	Tenant Security	214 million yen
	Deposits

	Total Leasable Space	6,948.72 m2
	Total Leased Space	4,459.54 m2
			October,		October	October	October	October
Change in Occupancy Rate	2020		2021	2022	2023		2024
			100.0%		100.0%	88.1%	88.1%	64.2%
			- For the entire building of the property, a pass-through-type master lease
			agreement with the trust trustee as the lessor and NTT UD as the lessee
			will be concluded on December 16, 2024, and in addition, the lessee will
Other Special Notes	conduct subleasing.
- Since the	building of the	property was	designed and	constructed in

			accordance with the laws and regulations on building standards before the
			amendment in 1981, seismic reinforcement work to meet the current
			standards has been carried out for part of the building frame.

(Note 2) According to the certificate of registered matters, it is an 11-story building, but the 11th floor is currently a penthouse, and rental rooms are from the first to tenth floors.

(Note 3) “Tenant Details” indicate the figure as of October 31, 2024, and “Total Number of Tenants” indicates the number of end tenants (sublessees) included in the number of tenants.

NTT CRED Okayama Building

Property Name	NTT CRED Okayama Building
Type of Specified Asset	Quasi co-ownership interest of beneficiary interest in a real estate trust
(60% ownership interest)

Name of Trustee	Sumitomo Mitsui Trust Bank, Limited
Trust Agreement Term	From May 15, 2015 to May 31, 2025
		Land	1-8-113 and 1-8-124 Nakasange, Kita Ward, Okayama City, Okayama
Location		1-8-113 Nakasange, Kita Ward, Okayama City, Okayama
Building	1-8-45 Nakasange, Kita Ward, Okayama City,

			Okayama
Area		4,160.86 m2
		35,299.51 m2

Type of Ownership	Fee simple ownership for both land and building
Use of Building	Office and Retail
Structure of Building	Steel-framed and steel-framed reinforced concrete structure with flat roof,
21 stories and 2 basement floors

Construction Completion	February 1999
Sale Price		3,360 million yen
Book Value		3,860 million yen (as of October 31, 2024)
Gain on Sale (estimate)	- 564 million yen
Appraisal
	Appraiser		Japan Real Estate Institute
	Appraisal Value	3,318 million yen
	(Note 1)

	Survey Date	November 30, 2024
Tenant Details (Note 2)
	Total Number of	51
	Tenants

	Monthly Rent	34 million yen
	Tenant Security	358 million yen
	Deposits

	Total Leasable Space	10,611.30 m2
	Total Leased Space	9,992.47 m2
			October,	October	October	October	October
Change in Occupancy Rate	2020		2021	2022	2023	2024
			88.6%	90.8%	87.9%	90.9%	94.2%
			- For the entire building of the property, a pass-through-type master lease
			agreement with the trust trustee as the lessor and NTT UD as the lessee
			has been concluded, and in addition, the lessee is conducting subleasing.
			- When providing instructions, etc. related to the trust agreement, it is stated
			that this shall be done by notification to the quasi co-owners in advance
			and that matters regarding management of the beneficiary interest in trust
			shall be decided with a majority of the voting rights based on the ratio of
			quasi co-ownership interests and matters regarding management of trust
Other Special Notes	property shall be decided upon agreement of all beneficiaries.
			- The other quasi co-owners shall have the right of preferential treatment in
			the event of plans to transfer the quasi co-ownership of beneficiary interest
			in trust to a third party. In addition, it is stated that the consent of the other
			quasi co-owners shall be obtained for other transfer, establishment of
			security and disposal, etc. of quasi co-ownership of the beneficiary interest
			in trust.
			- For the property, 50.82 m2 of adjacent land outside the site is leased for a
			fee for the purpose of use as a bicycle parking lot.

(Note 1) The price equivalent to the quasi co-ownership interest (60%) of the beneficiary interest in trust held by NUD is indicated.

(Note 2) “Tenant Details” indicate the figure as of October 31, 2024, and “Total Number of Tenants” indicates the number of end tenants (sublessees) included in the number of tenants.

5. Seller and Buyer Profile
(1)	Seller Profile ①
				(As of December 16, 2024)
		Company Name	NTT Urban Development Corporation (NTT UD)
		Head Office Address	4-14-1 Sotokanda, Chiyoda Ward, Tokyo
		Representative	Kou Ikeda, President & CEO
		Paid-in Capital	48,760 million yen (as of March 31, 2024)
		Net Assets	214,459 million yen (as of March 31, 2024)
		Total Assets	1,251,983 million yen (as of March 31, 2024)
		Major Shareholder and	NTT Urban Solutions, Inc. (Shareholding ratio: 100%)
		Shareholding Ratio

		Established Date	January 21, 1986
				(1) Acquisition, development, sales and management of real estate
				(2) Real estate leasing, brokerage and appraisal
				(3) Building design, construction, construction supervising and their
				commissioning
				(4) Sale and lease of office equipment, communications equipment, fixtures
		Principal Business	and fittings, and interior furnishings for office buildings and residences
		(5) Construction and sale of residences
				(6) Information gathering and management, research and consulting related
				to civil engineering, construction and real estate
				(7) Fee-based homes for the elderly business, and home care service business
				and preventive long-term care service business pursuant to the Long-Term
				Care Insurance Act
				(8) Security business based on the Security Business Act
		Relationship between NTT	UD and NUD/UDAM
				NTT UD holds 4.0% (59,300 units) of the total number of investment units
			Capital Relationship	issued and outstanding of NUD. NTT UD is UDAM’s parent company, holding
			100.0% (4,000 shares) of its total shares outstanding, and falls under the

				category of interested party, etc. as stipulated in the Investment Trust Act.
			Personnel	NTT UD is one of the companies from which officers and employees of UDAM
			Relationship	have been dispatched.
			Business	NTT UD falls under the category of lessee of properties owned by NUD. In addition,
			Relationship	UDAM has executed an Agreement on Information Provision with NTT UD.
				NTT UD does not fall under the category of related parties of NUD. As stated
			Related Parties	above, NTT UD is the parent company of UDAM and falls under the category of
				related parties of UDAM.
(2)	Seller Profile ②
				(As of December 16, 2024)
		Company Name	Nippon Telegraph and Telephone East Corporation
		Head Office Address	3-19-2 Nishi-Shinjuku, Shinjuku Ward, Tokyo
		Representative	Naoki Shibutani, President & CEO
		Paid-in Capital	335,000 million yen (as of March 31, 2024)
		Net Assets	2,204,334 million yen (as of March 31, 2024)
		Total Assets	3,416,706 million yen (as of March 31, 2024)
		Major Shareholder and	Nippon Telegraph and Telephone Corporation (Shareholding ratio: 100%)
		Shareholding Ratio

		Established Date	July 1, 1999
				Regional telecommunications business (Note 2) in the eastern Japan region (Note
		Principal Business	1) and businesses incidental to it, purpose achievement business and utilization
				business
		Relationship between the	Seller and NUD/UDAM
			Capital Relationship	The Seller has no direct capital relationship with NUD and UDAM.
			Personnel	The Seller has no personnel relationship with NUD and UDAM.
			Relationship

			Business	The Seller falls under the category of lessee of properties owned by NUD.
			Relationship

				The Seller does not fall under the category of related parties of NUD. The Seller
			Related Parties	is a sister company of the parent company of UDAM and falls under the
				category of related parties of UDAM.

(Note 1) Hokkaido, Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima, Ibaraki, Tochigi, Gunma, Saitama, Chiba, Tokyo, Kanagawa, Niigata, Yamanashi and Nagano Prefectures.

(Note 2) Telecommunication services such as telephone, dedicated and comprehensive digital communications for intra-prefecture calls.

(3) Buyer Profile

The buyer of Landic Shimbashi 2 Building, which is the asset to be transferred, is NTT UD, the seller of the two properties to be acquired.

The company name is not disclosed as no consent for disclosure has been obtained from the domestic corporation, which is the buyer of NTT CRED Okayama Building.

As of the date of this document, there are no capital, personnel or business relationships to be stated between the domestic corporation and NUD/UDAM, and the buyer is not a related party of NUD or UDAM.

6. Status of Previous Owner

The former owners of Wellith IVY Hatanodai and Wellith IVY Mondoyakujin, the assets to be acquired, fall under the category of an interested party, etc. of NUD as defined in the Investment Trust Act. Therefore, the status of the previous owners, etc. is herein stated.

Wellith IVY Hatanodai

			Company name	NTT Urban Development		Nippon Telegraph and Telephone
	owner/trustPrevious beneficiary	Corporation		East Corporation

	Relationship with

			special interested	Please refer to “(1)(2) Seller Profile, 5. Seller and Buyer Profile” above.
			parties
			Background,
			reason, etc. of the	New construction		Investment due to establishment
			transaction
			Acquisition price	- (Note)		- (Note)
			Timing of	January 26, 2022		July 1, 1999
			acquisition

	ownerFormerbefore the owner/trustprevious		Company name			Nippon Telegraph and Telephone
				Corporation

	beneficiary	Timing of
			Relationship with
			special interested			Parent company of UDAM
			parties
			Background,	None
			reason, etc. of the			Investment due to establishment
			transaction
			Acquisition price			- (Note)
			acquisition			April 1, 1985

(Note)	This information is omitted because the previous owner held the property for more than one year.
(2) Wellith IVY Mondoyakujin
			Company name	NTT Urban Development Corporation
	owner		Relationship with
		special interested	Please refer to “(1) Seller Profile, 5. Seller and Buyer Profile” above.
		parties

	Previous		Background,		- (Note)
		Acquisition price
			reason, etc. of the	New construction
			transaction

			Timing of	January 26, 2021
			acquisition

	ownerFormerbefore previousthe owner	Company name
	Relationship with
	Timing of
			special interested
			parties
			Background,		None
			reason, etc. of the

			transaction
			Acquisition price
			acquisition
(Note)	This information is omitted because the previous owner held the property for more than one year.

Transactions with Interested Party, Etc.
The following transactions with interested parties, etc. related to the Transactions have been resolved by the Compliance Committee, which includes outside experts, in accordance with “Policy on Transactions with Interest Parties” of the internal rules of UDAM.

Acquisition of Wellith IVY Hatanodai (part of land and building) and Wellith IVY Mondoyakujin from NTT UD
Acquisition of Wellith IVY Hatanodai (part of land) from NTT East
Transfer of Landic Shimbashi 2 Building to NTT UD
Conclusion of a master lease agreement with NTT Urban Value Support, Inc. as the lessee of Wellith IVY Hatanodai and consignment of property management services for the property
Conclusion of a master lease agreement with NTT UD as the lessee of Landic Shimbashi 2 Building

Matters Concerning Forward Commitment, Etc.
All acquisitions and transfers in the Transactions fall under the category of “forward commitments, etc. by investment corporations” (Note) as stipulated in the “Comprehensive Supervisory Guidelines for Financial Instruments Business Operators, etc.” established by the Financial Services Agency.
There are provisions regarding penalties such that if the contracting party violates a serious contractual obligation with respect to the contracts concluded for the Acquisition and Transfer, other party may terminate each sale contract and claim a penalty. The amount of penalty is equivalent to 10% of the

transaction price of each property.

(Note) The term “forward commitments, etc.” refers to future-dated sales contracts, where the settlement and delivery of the property will take place more than one month after the contract is concluded, and other similar contracts.

9. Future Outlook

For the performance forecasts for the fiscal period ending April 30, 2025 (45th Fiscal Period: November 1,

2024 to April 30, 2025) and the fiscal period ending October 31, 2025 (46th Fiscal Period: May 1, 2025 to October 31, 2025) which reflect the impact of the Transactions, please refer to “Performance Forecast” in the “Financial Report for the Fiscal Period Ended October 31, 2024 (May 1, 2024 – October 31, 2024)” announced today.

10. Overview of Appraisal Report

Wellith IVY Hatanodai (Asset to be acquired)

Property Name			Wellith IVY Hatanodai
Appraisal Value			2,590 million yen (Note)
Appraiser			Japan Real Estate Institute
Survey Date			October 1, 2024

								Appraisal
					Appraisal Item		Value	Remarks, Etc.
								(million yen)
The value estimated by income approach		2,590	Estimate by relating the income price by the direct capitalization method
	to the income price by the DCF method.


	Value estimated by direct capitalization method		2,610
	［[5]÷[6]］

				(a)	Rental revenue		116	For the dormitory portion, rental income and common service fee income
									are recorded based on the building lease agreement.
				(b)	Common service charges		0	The retail portion is recorded based on an assessment of the stable mid-
					to long-term rent that can be received. There is no income from common

		Revenues							expenses.
			(c) Rental revenue including common service		117	Allocation of stable mid- to long-term royalty income based on
				charges [(a)+(b)]


				(d)	Utilities		-	No utility revenues to be collected from renters.
		Operating		(e)	Parking fees		1	assessment

								Stable mid- to long-term occupancy levels for dormitories, stores, and
				(f)	Other income		-	No specific income to be recorded as other income
				[1] Latent Gross Revenues [(c)+(d)+(e)+(f)]		118
				(g) Losses due to vacancies, etc.		0	parking lots were assessed and recorded based on the occupancy status
					and supply-demand trends of similar properties, as well as the past

									occupancy status and future trends of the subject property.
				(h)	Bad debt loss		-	Considering the lessee's situation, etc., it is judged that no appropriation
					is required.

		[2]	Operating Revenues [[1]-(g)-(h)]		117
				(i)	Maintenance		1	Recorded in consideration of the individual characteristics of the subject
				(j)	Utilities		0	property, with reference to actual results of past fiscal years and similar
					properties.

									Restoration costs for dormitory and store areas are not recorded as they
									are borne by the lessee.
				(k)	Repair costs		2	Repair and maintenance expenses are recorded by taking into account
					the actual amount of repair and maintenance expenses in previous years,

									the annual average amount of repair and maintenance expenses of
									similar properties, and other factors.
		Expenses							Allocation of remuneration based on the individual characteristics of the
			(l)	Property management fee		2	subject property in comparison with similar properties, with reference to

					the remuneration rate, etc. based on the terms and conditions of the

									reservation contract.
		Operating							The dormitory portion is not recorded because there are no tenant
								and rental commissions are recorded in consideration of rental
									solicitation costs, etc.
				(m) Advertisement for leasing, etc.		0	For the retail portion and the parking lot portion, administrative fees for
					solicitation and renewal are recorded with reference to similar properties,
									commissions and advertising expenses required for solicitation, etc. Note
									that renewal fees are not recorded.
									The same applies to assessed self-owned land, taking into consideration
				(n) Tax and public dues		12	the data related to taxes and public dues and the details of burden
					adjustment measures, etc.

									(The exemption for new residence in buildings is not taken into account.)
				(o)	Insurance		0	Recorded in consideration of premiums based on insurance estimates
					and premium rates for buildings similar to the subject building.

				(p)	Other expenses		2	Land rent paid, Internet-related expenses, etc.
		[3]	Operating Expenses		21
		[(i)+(j)+(k)+(l)+(m)+(n)+(o)+(p)]

		[4] Net Operating Income [[2]-[3]]		95
									Assess the number of months of stable security deposits over the medium
									to long term, and multiply the amount obtained by multiplying the
				(q) Profit through management of temporary		0	occupancy rate by the investment yield to assess the investment income
					on the lump-sum payment.
					deposits, etc.
							The appraisal value is 1.0%, which is considered to be an appropriate

									investment yield, taking into account the level of interest rates for both
									investment and financing.
									Appraised, taking into account the level of capital expenditure of similar
									properties, building age, and annual average of repair and renewal
				(r)	Capital expenditures		5	expenses, etc., assuming that the expected expenditure will be
					accumulated on average every period.

									The cost of updating furniture, fixtures, and equipment in the dormitory
									area is not included, as the lessee bears this cost.
		[5] Net Cash Flow [[4]+(q)-(r)]		91
									Appraised, taking into account the spread resulting from the subject
		[6] Capitalization Rate		3.5%	property's location, building conditions, and other conditions, as well as
			future uncertainties and transaction yields on similar properties, etc., to

									the standard yields for each area set by Japan Real Estate Institute
	Value estimated by discounted cash flow (DCF) method		2,570
		Discount rate		3.3%
		Terminal capitalization rate		3.6%
	Value estimated by cost approach		2,670
	Land ratio					54.6%
	Building ratio				44.7%
	Ratio of furniture, fixtures and equipment, etc.		0.7%

Other matters noted by the appraiser in conducting appraisal		None

(Note) It is the price assessed by assuming full ownership of the building and its site, based on the assumption that NUD will acquire the quasi co-ownership interest of beneficiary interest in trust at the same time and the ratio of ownership interest after the acquisition will be 100%.

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