United Urban Investment : Notice Concerning Acquisition of Property (Henn na Hotel Tokyo Hamamatsucho and Smile Hotel Premium Sapporo Susukino)

For Translation Purposes Only

January 15, 2019

For Immediate Release

United Urban Investment Corporation

Ikuo Yoshida

Executive Officer (Securities Code: 8960)

Asset Management Company:

Japan REIT Advisors Co., Ltd.

Norimasa Gaun

President and CEO

Inquiries:

Kenichi Natsume

Chief Financial Officer

TEL: [phone]

Notice Concerning Acquisition of Property

(Henn na Hotel Tokyo Hamamatsucho and Smile Hotel Premium Sapporo Susukino)

United Urban Investment Corporation ("United Urban") hereby announces that Japan REIT Advisors Co., Ltd. ("JRA"), the asset management company to which United Urban entrusts asset management services, decided today to acquire properties as set forth below.

1. Overview of the Acquisition

United Urban will acquire the trust beneficial interest in the following real estate properties (hereinafter individually or collectively called the "Asset to be Acquired").

Property Number	Type of Use (Note 1)	Property Name	Location	Scheduled Acquisition Price (Note 2)	Estimated NOI Yield (Note 3)	Estimated NOI Yield After Depreciation (Note 4)	Scheduled Acquisition Date
C17	Hotel (hotel)	Henn na Hotel Tokyo Hamamatsucho	Minato-ku, Tokyo	¥4,456 million	4.4%	3.7%	May 15, 2019
C18	Hotel (hotel)	Smile Hotel Premium Sapporo Susukino	Sapporo, Hokkaido	¥4,233 million	6.0%	5.0%	June 28, 2019
Total/Average (Note 5)				¥8,689 million	5.2%	4.3%	-

(Notes)

• 1. "Type of Use" determined by United Urban is shown. register, the primary type is shown.

  As for words shown in parentheses, of the types indicated on the real estate

• 2. "Scheduled Acquisition Price" excludes acquisition costs, property taxes, city planning taxes and consumption taxes and other costs.

• 3. "Estimated NOI Yield" is calculated by (the "Annualized Estimated NOI" / the acquisition price) and expressed as a percentage rounded to first decimal place. "NOI (Net Operating Income)" means the figure equal to an amount subtracting rental expenses (excluding depreciation and amortization) from rental revenues. "Annualized Estimated NOI" means the estimated NOI for 1 year from the acquisition by United Urban, which is calculated based on the terms and conditions of leasing after the acquisition by United Urban.

• 4. "Estimated NOI Yield After Depreciation" is calculated by ((i) an amount deducting "Estimated Depreciation and Amortization" from "Annualized Estimated NOI" / (ii) the acquisition price) and is described as a percentage rounded to first decimal place. "Estimated Depreciation and Amortization" means the estimated depreciation and amortization for 1 year after the acquisition by United Urban, which is calculated under the straight-line method by applying the depreciation ratio to be derived for each depreciable asset of the

  Asset to be Acquired in accordance with the useful life thereof, based on the accounting policy of United Urban.

• 5. "Estimated NOI Yield" and "Estimated Post-Depreciation Yield" shown in the "Average" column indicates the values arrived at when the "Estimated NOI Yield" and "Estimated Post-Depreciation Yield" of each Anticipated Acquisition are weighted averaged by the

  scheduled 4 acquisition price of each Anticipated Acquisition and are expressed as a percentage and rounded to first decimal place.

2. Details of Acquisition

A. Henn na Hotel Tokyo Hamamatsucho

• (1) Reasons for Acquisition

  In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Asset to be Acquired for the purpose of further enhancing its portfolio. In making the decision to acquire the Asset to be Acquired, the following aspects (from 1. to 3.) were highly attractive.

  • 1. Location

    The Asset to be Acquired is located 2 minutes' walk from Daimon Station on the Toei Oedo Line and the Asakusa Line, 3 minutes' walk from Hamamatsucho Station on the JR Yamanote Line and the Keihin-Tohoku Line, and 3 minutes' walk from Monorail Hamamatsucho Station on the Tokyo Monorail.

    Being on the JR Lines, Hamamatsucho Station near the Asset to be Acquired is the terminal station of Tokyo Monorail run to Haneda Airport. Also, Daimon Station on the Asakusa Line provides access to Haneda Airport and Narita Airport through the Keikyu Line and the Keisei Line. Therefore, the strong demand for lodging from both foreign and domestic tourists is expected in the Asset to be Acquired.

    There are tourist spots such as Tokyo Tower, Zojoji Temple or Hamarikyu Gardens around the Asset to be Acquired. In addition, Hamamatsucho area is one of the major office areas in Tokyo, and we can expect the steady demand by business travelers from Japanese reginal cities as well as overseas visiting their headquarters in this area.

    In the neighborhood of the Asset to be Acquired, large-scale redevelopment project, especially those of office, has been underway until 2024. One of the completed office buildings has received headquarters functions and expansion needs of large companies. Further increase of offices with the progress of the redevelopment project is expected to bring to lodging demand from business travelers.

  • 2. Building, etc.

    The building of the Asset to be Acquired (the "Building") was completed in March 2018 and started operation as "Henn na Hotel" in April 2018. It has 118 rooms consisting of mainly single rooms and semi-double rooms considering the locational characteristics mentioned above. It has the robot reception corresponding in four languages (the Humanoid), and a robot concierge for information and sightseeing guidance. It is also equipped with facilities that will bring convenience and amenity for the guests including high-quality bed mattresses.

  • 3. Tenants, etc.

    H.I.S. Hotel Holdings Co., Ltd. (the "Hotel Operator") operates the hotel in the Building as the 6th hotel in the "Henn na Hotel" series in Japan (3rd in Tokyo).

    The long fixed-term lease agreement (lease term: 20 years, remaining term: about 19 years) has been concluded with the Hotel Operator and stable earnings are expected over the mid to long term.

• (2) Summary of Acquisition

(Note) As of today, financing measure has not been finalized.

1. Asset to be Acquired	: Trust beneficial interest in real estate
2. Property Name	: Henn na Hotel Tokyo Hamamatsucho
3. Scheduled Acquisition Price	: ¥4,456 million
4. Scheduled Agreement Date	: January 16, 2019
(conclusion of the sale and purchase agreement of the trust
beneficial interest)
5. Scheduled Acquisition Date	: May 15, 2019 (transfer of the trust beneficial interest)
6. Seller	: Hamamatsucho Real Estate Sales Limited Liability Company
7. Financing	: To be determined (Note)
8. Scheduled Date of Payment	: May 15, 2019

It will be announced once it is determined.

(3) Outline of the Property

Property Name	Henn na Hotel Tokyo Hamamatsucho
Type of the Asset	Trust beneficial interest in real estate
Trustee	Sumitomo Mitsui Trust Bank, Limited
Period of Trust Agreement	From March 30, 2018 to March 30, 2028
Location	Lot number (Note 1)	1-123-9 Hamamatsucho, Minato-ku, Tokyo
	Residential	1-24-11 Hamamatsucho, Minato-ku, Tokyo
Access	2-minute walk from Daimon Station (Toei Oedo Line and Asakusa Line) 3-minute walk from Hamamatsucho Station (JR Yamanote Line and Keihin-Tohoku Line) 3-minute walk from Monorail Hamamatsucho Station (Tokyo Monorail)
Type (Note 1)	Hotel (118 rooms)・Clinic
Site Area (Note 1)	Land	365.81 m2
	Building	2,293.64 m2
Structure and Scale (Note 1)	S 14F
Type of Ownership	Land	Proprietary Ownership
	Building	Proprietary Ownership
Completion Date (Note 1)	March 2018
Initial Building Owner	Daiichi Realtor
Constructor	Rinkai Nissan Construction Co., Ltd.
Scheduled Acquisition Price	¥4,456 million
Appraisal Value	¥4,600 million
Date of Value Estimate	December 1, 2018
Appraisal Agency (Appraisal Method)	Appraisal by Japan Real Estate Institute
Probable Maximum Loss (PML)	14.8%
Collateral	None
Special Notations	None
Details of Tenant (Note 2)
Total Number of Tenants	1
Security Deposit	Undisclosed (Note 3)
Total Rental Revenues (yearly)	Undisclosed (Fixed rent) (Note 3)
Total Leasable Floor Space	2,293.64 m2
Total Leased Floor Space	2,293.64 m2
Occupancy Ratio	100.0%
Reference
Estimated Annualized NOI (Note 4)	¥197 million
Estimated NOI Yield (Note 4)	4.4%

(Notes)

• 1. Each piece of information in the "Location (Lot number)," "Type," "Site Area," "Structure and Scale" and "Completion Date" is described as it appears on the real estate register.

• 2. "Details of Tenant" is based on the schedule as of acquisition the Asset to be Acquired.

• 3. Not disclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the tenant.

• 4. For the definition of "NOI (Net Operating Income)" and "Estimated Annualized NOI", please refer to Note 3 of "1. Overview of the

  Acquisition" above. The estimated occupancy ratio is 100.0%.

(4) The Seller's Profile

Company Name	Hamamatsucho Real Estate Sales Limited Liability Company
Address	Seiwa Sogo Accounting Firm., 3-7-7 Kudanminami, Chiyoda-ku, Tokyo
Representative	Shinji Arakawa, Function manager of Hamamatsucho Real Estate Sales Holdings Inc.
Principal Business	1. Acquisition, holding, management and disposal of securities and the trust beneficial interest 2. Acquisition, holding, management and disposal of real estate for sale 3. Acquisition, holding and disposal of monetary claim 4. Business incidental to or related to the projects listed in the preceding items
Capital (Fund)	¥100 thousand (As of December 31, 2018)
Date of Foundation	July 20, 2017
Net Assets	Undisclosed (Note)
Total Assets	Undisclosed (Note)

Major Shareholder(s)

Undisclosed (Note)

Relationship with United Urban or JRACapital Ties Personal Relationship Business RelationshipThere are no significant capital ties.

There are no significant personal relationships. There are no business relationships.

Standing to Related Party

Hamamatsucho Real Estate Sales Limited Liability Company falls under neither the category of "related parties, etc." (the "Related Party") under the Act on Investment Trusts and Investment Corporations of Japan (Act No. 198 of 1951, as amended) nor the category of the sponsor/stakeholder ("Sponsor/Stakeholder") under the self-imposed rules (rules for conflicts of interest) of JRA.

(Note) Not disclosed, due to unavoidable circumstances where the consent for the disclosure has not been obtained from the seller.

• (5) Aspects of the Owners of the Property and Others

  The Asset to be Acquired will not be acquired from special related parties of United Urban or JRA.

• (6) Outline of Intermediary

  Not applicable.

• (7) Transactions with Interested Party and Sponsor/Shareholder Not applicable.

B. Smile Hotel Premium Sapporo Susukino (1) Reasons for Acquisition

In accordance with the basic asset-management policy and its investment approach prescribed in its Articles of Incorporation, United Urban will acquire the Asset to be Acquired for further growth of its portfolio. Upon the decision making to acquire the Asset to be Acquired, the following aspects (from 1. to 3.) were highly considered.

• 1. Location

  The Asset to be Acquired is located in northeast part of Susukino area, the busiest amusement center in Hokkaido. It has good access to public transportation; 1 minutes' walk from Housuisusukino Station on the Subway Toho Line, 4 minutes' walk from Susukino Station on the Subway Nanboku Line and 5 minutes' walk from Odori Station on the Subway Toho Line, the Nanboku Line and the Tozai Line.

  The Asset to be Acquired is within walking distance from the Sapporo's office district and the city center. The Asset to be Acquired is very convenient for hotel guests and has the strong advantage in location.

  Sapporo is also a sightseeing destination for tourists from Japan and abroad. As the number of foreign tourists visiting Japan has increased, the number of overnight visitors in Sapporo is also on a solid rise. Therefore we can continuously expect a strong demand for accommodation in the future.

• 2. Building

  The building of the Asset to be Acquired (the "Building") was completed in December 2017 and started the operation as Smile Hotel Premium Sapporo Susukino in March 2018. All the guest rooms in the Property (142 twin bedrooms and 142 double bedrooms) were designed to accommodate double occupancy (lodging by two people sharing the same room), which is suitable for foreign tourists.

• 3. Tenants, etc.

  K.K. Hospitality Operations (the "Hotel Operator") operates a hotel part of the Building under the name of "Smile Hotel Premium Sapporo Susukino". The Hotel Operator is currently operating 60 hotels across Japan (as of the end of December 2018), mainly in the "Smile Hotel" brand, and has been steadily expanding business. Therefore the stable operation can be expected in the Building as other hotels of the Hotel Operator. The long fixed-term lease agreement (lease term: 20 years, remaining term: about 19 years) has been concluded with the Hotel Operator and stable earnings are expected over the mid to long term.

(2) Summary of Acquisition

1. Asset to be Acquired	:	Trust beneficial interest in real estate
2. Property Name	:	Smile Hotel Premium Sapporo Susukino
3. Scheduled Acquisition Price	:	¥4,233 million
4. Scheduled Agreement Date	:	January 16, 2019
(conclusion of the sale and purchase agreement of the trust
beneficial interest)
5. Scheduled Acquisition Date	:	June 28, 2019 (transfer of the trust beneficial interest)
6. Seller	:	MG Leasing Corporation
7. Financing	:	To be determined (Note)
8. Scheduled Date of Payment	:	June 28, 2019

(Note) As of today, financing measure has not been finalized.

(3) Outline of the Property

It will be announced once it is determined.

Property Name	Smile Hotel Premium Sapporo Susukino
Type of the Asset	Trust beneficial interest in real estate
Trustee	Mizuho Trust & Banking Co., Ltd.
Period of Trust Agreement	From March 29, 2018 to March 31, 2028
Location	Lot number (Note 1)	1-13-1 HokkaidoMinami4jonishi,Chuo-ku,Sapporo,
	Residential	1-13-1 Minami4jonishi, Hokkaido (Note 2)Chuo-ku,Sapporo,
Access	1-minute walk from Hosuisusukino Station (Subway Toho Line) 4-minute walk from Susukino Station (Subway Nanboku Line) 4-minute walk from Susukino Station (Streetcar Yamahana Line) 5-minute walk from Odori Station (Subway Tozai Line)
Type (Note 1)	Hotel (284 rooms) (attached building: parking)
Site Area (Note 1)	Land	958.37 m2
	Building	7,762.50 m2 (attached building: 46.47 m2)
Structure and Scale (Note 1)	S 13F (attached building: S 1F)
Type of Ownership	Land	Proprietary Ownership
	Building	Proprietary Ownership
Completion Date (Note 1)	December 2017
Initial Building Owner	THE SANKEI BUILDING CO., LTD. Mitsubishi Corporation
Constructor	HAZAMA ANDO CORPORATION Sapporo branch
Scheduled Acquisition Price	¥4,233 million
Appraisal Value	¥5,320 million
Date of Value Estimate	December 1, 2018
Appraisal Agency (Appraisal Method)	Appraisal by The Tanizawa Sōgō Appraisal Co., Ltd.
Probable Maximum Loss (PML)	1%
Collateral	None
Special Notations	None
Details of Tenant (Note 3)
Total Number of Tenants	1
Security Deposit	Undisclosed (Note 4)
Total Rental Revenues (yearly)	Undisclosed (Fixed rent) (Note 4)
Total Leasable Floor Space	8,332.04 m2
Total Leased Floor Space	8,332.04 m2
Occupancy Ratio	100.0%
Reference
Estimated Annualized NOI (Note 5)	¥254 million
Estimated NOI Yield (Note 5)	6.0%

(Notes)

ku, ku,Sapporo,

Sapporo,

• 1. Each piece of information in the "Location (Lot number)," "Type," "Site Area," "Structure and Scale" and "Completion Date" is described as it appears on the real estate register.

• 2. "Location (Residential)" shows the location indicated on the real estate register for the building as the residential address has not been assigned.

• 3. "Details of Tenant" is based on the schedule as of acquisition the Asset to be Acquired.