To all concerned parties:

Investment Corporation

November 21, 2017

Japan Retail Fund Investment Corporation

(Tokyo Stock Exchange Company Code: 8953

Representative: Shuichi Namba, Executive Director

URL: http://www.jrf-reit.com/english/

Asset Management Company

Mitsubishi Corp.-UBS Realty Inc. Representative: Toru Tsuji, President & CEO Inquiries: Keita Araki, Head of Retail Division

TEL: +81-3-5293-7081

Notice Concerning Acquisition of a Trust Beneficiary Right in the Real Estate in Japan (G-Bldg. Midosuji 02)

Mitsubishi Corp. - UBS Realty Inc., the asset manager (the "Asset Manager") of Japan Retail Fund Investment Corporation ("JRF"), determined today to acquire a trust beneficiary right in the real estate of G- Bldg. Midosuji 02 (the "Property") as outlined below.

  1. Overview of acquisition

    1) Property type

    Trust beneficiary right in real estate

    2) Property name

    G-Bldg. Midosuji 02 (Note1)

    3) Location

    8-18 Shinsaibashisuji 2-chome, Chuo-ku, Osaka-shi, Osaka

    4) Acquisition price (scheduled)

    15,000 million yen

    5) Appraisal value

    15,700 million yen (as of November 1, 2017)

    6) Contract completion date (scheduled)

    November 22, 2017

    7) Acquisition date (scheduled)

    January 12, 2018

    8) Seller

    Not disclosed (Note2)

    9) Acquisition funds (scheduled)

    Undetermined (Note3)

    10) Payment

    Full payment at closing

    (Note 1) The Property is currently known as Shinsaibashi GROVE, but the above name shall be used for management purposes by the Asset Manager following the acquisition.

    (Note 2) Not disclosed as the seller has not agreed to the disclosure.

    (Note 3) The acquisition funds are currently undetermined. Notification will be given once determined.

  2. Reasons for Acquisition

    JRF promotes the optimization of its asset structure which flexibly adapts to the changes in demographics, consumption structure and trends in Japan. The acquisition of this property is a means of optimizing the portfolio through the acquisition of prime urban-centered assets.

    As announced in its "Notice Concerning Repurchase of Own Investment Units" dated October 16, 2017, JRF is engaging in the repurchase of its own investment units. One reason for the decision to take this action was declining opportunities for JRF to acquire properties that combine quality and profitability.

    The Property, however, is considered to be both high quality and profitable, as shown below. As simultaneously acquiring the Property while implementing the repurchase of own investment units was judged as the best way to improve investor value, the decision for the acquisition was made. As presented in the "Notice Concerning Repurchase of Own Investment Units" dated October 16, 2017, JRF has concluded a discretionary contract with a securities company. However, the contract stipulates that JRF may not give directions regarding orders for the acquisition of investment units, and measures are being taken to ensure that decisions on property acquisition by the Asset Manager during the period of repurchase of own investment units do not conflict with insider regulations.

    For acquisition of the Property, JRF evaluated the following in particular:

    Highlight of acquisition

    A retail property in a prime urban shopping district on Midosuji Street, which is the largest luxury brand shopping street in western Japan. The Property has PRADA, an international luxury brand, as a tenant for its flagship store in Asia.

    Flagship store of PRADA, an international luxury brand PRADA Store Opening Strategy

    • PRADA opens flagship stores in prime locations in major international cities.

    • PRADA prioritizes its flagship stores as displaying the brand's values, and only opens such stores in areas that match its values, where many luxury brand stores have already opened.

    • Japan is an important area for the PRADA group, accounting for 12% of its sales (Japan is the only

      single country that is classified as a business area for PRADA).

      • Prime locations in major cities and PRADA store locations

      • Sales distribution by PRADA Group area (2016)

      Other 0%

      City

      Locations with highest rent

      PRADA

      New York

      Upper 5th Avenue (49th renttieSts)

      Hong Kong

      Causeway Bay

      Paris

      Avenue des Champs Élysées

      -

      London

      New Bond Street

      Tokyo

      Ginza Chuo-dori

      Milan

      Via Montenapoleone

      Sydney

      Pitt Street Mall

      Seoul

      Myeongdong

      Zurich

      Bahnhofstrasse

      Japan 12%

      Middle

      East 3%

      Asia Pacific 32%

      American

      Europe 38%

      continent 15%

      (Source) CUSHMAN & WAKEFIELD "MAIN STREETS ACROSS THE WORLD 2016/2017"

      (Source) PRADA Annual Report 2016

      Stores in Japan
    • PRADA has five street-level stores and 33 stores in retail properties such as department stores in Japan.

    • Unlike department stores where there is limited selling space and brands are gathered together for each item, street-level stores are very important bases for marketing as an extensive selling space is available, making it possible to display the brand's values with a diverse range of products.

    • Of its street-level stores, the two stores that display the brand values most strongly are its only standalone stores, located in Aoyama and Shinsaibashi.

PRADA Shinsaibashi Store Attraction and Continuity
  • Located in a prime location in the Shinsaibashi area on the east side of Midosuji Street and Nagahoridori Street south side, which is the area in Osaka with the most luxury brands, in line with PRADA's flagship store opening strategy.

  • As new stores by luxury brands have continuously appeared in this area in recent years, there are no open spaces for new tenants. Furthermore, as the refurbishment of the Shinsaibashi Daimaru main building is likely to lead to further development of the area and the likelihood of vacancy going forward is very low, PRADA's chances for moving are extremely limited.

  • The golden-colored aluminum exterior with its polished backlight displays the brand's unique values both day and night and is visually appealing.

  • The interior, designed by architect Roberto Baciocchi offers a different atmosphere for each floor, and the ceiling is connected to each floor through a series of openings, letting natural light in through a skylight to display PRADA's values.

  • With a full collection of items from the first to fifth floor, ranging from men's, ladies', bags, accessories and shoes, this is the brand's second-largest store in Japan.

  • Shinsaibashi/Midosujimap East side of Shinsaibashi/Midosuji and South side Nagahoridori Street

    * Figures on the left side of each brand store indicate opening year

  • PRADA Shinsaibashi store exterior/interior

    5F

    4

    3

    2

    1 B1

    Men's Collection

    Men's Collection

    Ladies' Wear

    Ladies's Leather Goods & Shoes

    Men's Ladies' Leather Goods Accessories

    Stockroom

    Potential in the Shinsaibashi area Inbound tourist demand in Shinsaibashi

    • The rate of increase in foreign visitors to Osaka is faster than in Tokyo and Japan overall, and is in a rising trend

    • Osaka differs from Tokyo in that its commercial districts are limited and inbound consumers are concentrated in the Shinsaibashi area

      • Rate of increase in foreign visitors to Japan (compared to 2012)

        (Source) Japan Tourism Agency: "Consumer trend survey of foreign visitors to Japan," Japan National Tourism Organization (JNTO) "Number of foreign visitors to Japan"

        Number of foreign visitors to Japan = Number of foreign entrants to Japan × rate of visitors to each prefecture

        Shinsaibashi market rent trends
    • Even amongst the Shinsaibashi area, rent for prime locations near the said property is approaching that of the Omotesando area, and data from research company indicates that the highest rents are at a similar level. Furthermore, positive effects from increased inbound demand in the Shinsaibashi area as a whole are also anticipated.

    • The luxury area market scale in Japan is the second-largest worldwide, and is still expanding. Despite this, prime rent prices seem relatively low, and it is anticipated that there will be further increases in market rent in Osaka in particular, where prime locations are limited.

  • Change in highest rents in major commercial districts (Ginza, Omotesando, Shinsaibashi)

    (Yen/tsubo)

    (Source) Prepared by the Asset Manager based on "Retail Store Market Information" by CBRE K.K.

  • Rent levels in prime locations worldwide

(USD/sf/year)

* Upper level: name of city; lower level: name of prime location

(Source) Prepared by the Asset Manager based on public resources by CUSHMAN & WAKEFIELD, calculated using the U.S. dollar exchange rate as of June 2016

Japan Retail Fund Investment Corporation published this content on 21 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 21 November 2017 08:53:02 UTC.

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