Nippon Prologis REIT : Announces Acquisition of Domestic Real Estate Trust Beneficiary Interests and Lease Contract with New Tenants

May 22, 2023

FOR IMMEDIATE RELEASE

Nippon Prologis REIT Announces

Acquisition of Domestic Real Estate Trust Beneficiary Interest

and Lease Contract with New Tenants

Prologis REIT Management K.K. (the "Asset Manager"), to which Nippon Prologis REIT, Inc. ("NPR") entrusts the management of its assets, announced today it will acquire one property (the "New Property") in the form of trust beneficiary interests and, subsequently, enter into lease contracts with new tenants.

Because the seller and the lessee of the assets are considered related parties as provided in the Act on Investment Trusts and Investment Corporations of Japan (Act No. 198 of 1951, including amendments thereto) (each, a "Related Party, etc.") and considered an interested party as set forth in the "Rules Regarding Related-party Transactions" included in the internal rules of the Asset Manager (an "Interested Party"), the Asset Manager has obtained, in accordance with the Rules Regarding Related Party-Transactions, approval from NPR based on the approval of its Board of Directors at a meeting held today.

The details are described below.

1. Overview of the Acquisition

			Anticipated		Anticipated	Appraisal		Adjusted
				Acquisition	Value	NOI Yield	Forecast
Property	Property		Acquisition
Location	Seller	Price	(million	(%)	NOI Yield
Number	Name	Date
		(million yen)	yen)	(Note 4)	(%)
			(Note 1)
				(Note 2)	(Note 3)		(Note 5)
	Prologis Park			Jimba Special
M-40	Soka, Saitama	June 2, 2023	Purpose	51,400	51,400	3.7	3.7
Soka
			Company

(Note 1) "Anticipated acquisition date" indicates the anticipated acquisition date in the relevant trust beneficiary interests disposition contract (the "Sale and Purchase Agreement") that was executed with the current owner of the New Property.

(Note 2) "Anticipated acquisition price" indicates the transfer price of the New Property in the Sale and Purchase Agreement, rounded down to the nearest million yen and does not include national or local consumption taxes or expenses which will be incurred in connection with the acquisition.

(Note 3) Japan Real Estate Institute was retained to appraise the value of the New Property. "Appraisal value" is based on the appraisal value from the appraisal report as of March 31, 2023.

(Note 4) "NOI yield" is the ratio of appraisal NOI to the anticipated acquisition price of the New Property based on the appraisal value as of March 31, 2023, rounded to the first decimal place.

"NOI" is the stabilized net operating income (an amount with operating expenses deducted from operating income) for the direct capitalization analysis contained in the appraisal report appraised by Japan Real Estate Institute, which represents revenue before deduction of depreciation. NOI is different from net cash flow ("NCF"), calculated as the expected revenues of a property minus expected capital expenditure, to which interest on deposits, etc. is added and from which capital expenditures are deducted.

(Note 5) "Adjusted forecast NOI yield" is the ratio of adjusted forecast NOI to the anticipated acquisition price of the New Property, rounded to the first decimal place.

"Adjusted forecast NOI" is an amount based on the relevant assumptions regarding operating revenues from the New Property, from which operating expenses and capitalized property tax and city planning tax, etc. are

Disclaimer: This press release is an announcement concerning acquisitions of domestic trust beneficiary interests and lease contract with new tenants, and has not been prepared for the purpose of solicitation for investment.

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deducted and to which depreciation costs are added. It represents revenues before deduction of depreciation costs. Also, operating rental revenues and operating expenses for the New Property are calculated based on the assumption that the New Property is operated on a full-year basis.

1. Date of Sale and Purchase Agreement: May 22, 2023

(2)	Seller:	Please refer to the below-mentioned "3. (2) Seller Profile"
(3)	Funds for Acquisitions:	A portion of the net proceeds from the issuance of new
		investment units determined at a meeting of the Board of
		Directors held today and the new borrowings (Note) which
		will be obtained on the date of acquisition of the New
		Property, and cash on hand
(4)	Settlement Method:	To be paid in a lump sum on the anticipated acquisition
		date
(5)	Annual Rent:	2,351 million yen

(Note) Details of the new borrowings will be announced once they have been determined.

2. Rationale for Acquisition and Lease Contract

Through the acquisition of the New Property, NPR intends to acquire selected Class-A logistics facilities developed by the Prologis Group that meet NPR's investment criteria based on NPR's principle of achieving stable net operating income and increasing the size and the value of its portfolio to maximize unit holder value.

NPR will acquire the New Property for which NPR has been granted exclusive negotiation rights by the Prologis Group, as described in the press release "NPR Announces Exclusive Negotiation Rights for Five New Properties" dated December 11, 2020, with respect to Prologis Park Soka.

NPR believes the acquisition of the New Property will further improve the earnings stability of its portfolio by enhancing property and customer diversification as well as diversification of the expiration date of lease agreements at its properties, continuing investments in a well-balanced portfolio of properties and adding relatively newly built Class-A logistics facilities with longer average remaining lease terms.

Disclaimer: This press release is an announcement concerning acquisitions of domestic trust beneficiary interests and lease contract with new tenants, and has not been prepared for the purpose of solicitation for investment.

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3. Description of the New Property

1. Overview

The following tables provide an overview of the real estate trust beneficiary interests of the New

Property.

Furthermore, the items described in the respective columns of the tables are explained below:

1. "Location" indicates the official address or the address usually used by tenants and property management companies, etc. on the upper line, and the address indicated in the registry (one of several addresses, if any) on the lower line.
2. "Anticipated acquisition date" indicates the anticipated acquisition date in the Sale and Purchase Agreement.
3. "Anticipated acquisition price" indicates the transfer price of the New Property in the Sale and Purchase Agreement, rounded down to the nearest million yen and does not include national or local consumption taxes or expenses which will be incurred in connection with the acquisition.
4. "Entrustment Date" indicates the date of establishment of the trust defined in the Trust Agreement.
5. "Trustee" indicates the trustee or trustee-to-be of the New Property, which is the trust beneficiary interest in real estate.
6. "Trust maturity date" indicates the trust maturity date defined in the Trust Agreement or the maturity date of the trust period to be amended with the acquisition by NPR.
7. "Ownership form" of "Land" and "Building" indicates the type of rights owned by the trustee.
8. "Land area" of "Land" and "Gross floor area", "Date of construction", "Purpose" and "Structure/No. of stories" of "Building" are based on the data recorded in the registry and may differ from the actual figures. "Gross floor area" is equal to the total gross floor area of the main building and accessory building. "Date of construction", "Purpose" and "Structure/No. of stories" are equal to the figures of the main building excluding accessory building.
9. "Zoning" of "Land" indicates the type of zoning as depicted in Article 7 and 8-1-1 of the City Planning Act (Act No. 100 of 1968, as amended).
10. "BCR" of "Land" indicates the upper limit of the building coverage ratio as determined in city planning in accordance with the zoning. The upper limit of BCR could be lower or higher, depending on whether the property is fire-proof in the fire control area and/or other reasons and it may not necessarily be identical with the BCR actually applied.
11. "FAR" of "Land" indicates the upper limit of the floor area ratio. The upper limit of FAR could be lower or higher, depending on the width of roads adjacent to the land and/or other reasons and it may not necessarily be identical with the FAR actually applied.
12. "Property type" of "Building" indicates "Multi-tenant" for properties that are "Multi-tenant logistics facilities" (those that are capable of serving multiple tenants) and "BTS" for properties that are "Build-to-suit logistics facilities" (those that are developed to meet a tenant's specific requirements).
13. "PML" of "Building" represents an outline of the reports on the evaluation results of the analyses of seismic risks conducted by Engineering and Risk Services Corporation and OYO RMS Corporation at the request of NPR and the Asset Manager. The contents of these reports are judgments and opinions of these risk reviewers as of a certain point of time, and the validity and accuracy of such contents are not guaranteed. None of the current properties of NPR are covered by seismic insurance, and NPR has no plan to obtain seismic insurance for any of the current properties or the New Property.
14. "Environmental appraisal" of "Building" represents evaluation results described in certification reports of Comprehensive Assessment System for Built Environment Efficiency

Disclaimer: This press release is an announcement concerning acquisitions of domestic trust beneficiary interests and lease contract with new tenants, and has not been prepared for the purpose of solicitation for investment.

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("CASBEE"), evaluation results of Building-HousingEnergy-efficiency Labeling System ("BELS") or certifications of the DBJ Green Building Certification system, if such evaluation results are obtained. Also, in the event that an application is filed with each municipality and a result for such application is disclosed based on the comprehensive assessment system for built environment efficiency conducted by each municipality on the basis of CASBEE, such disclosed result is described. The results of CASBEE, BELS and DBJ Green Building Certification show an evaluation based on certain judgment standards at a specific point in time and are no guarantee of any objectiveness of such evaluation, validity and accuracy of such evaluation results or the quality of evaluated buildings.

1. "Engineering Report" represents an outline of the reports on the evaluation results of building assessment conducted by Earth-Appraisal Co., Ltd. at the request of NPR and the Asset Manager. The contents of these reports are judgments and opinions of these building investigators as of a certain point of time, and the validity and accuracy of such contents are not guaranteed. "Report Date" indicates the date of investigation described in the respective
   Engineering Report prepared by the respective building investigator.
2. "Property manager" indicates the property manager to which NPR has outsourced or will outsource the property management services.
3. "Master lessee" indicates the party with which NPR has entered or will enter into the Master Lease Agreement. Even if NPR or the trustee enters into a Master Lease Agreement with a master lessee, the end tenant and NPR or the trustee are in the lessee-lessor relationship when existing end tenants do not accept the transfer of the lessor associated with the Master Lease Agreement.
4. "Type of master lease" indicates "Pass-through type" for a pass-through type master lease in which rent received by the lessor is in principle the same amount as the rent received by the master lessee from end tenants, and "Sublease type" for a sublease type master lease, in which a fixed amount of rent is received from the master lessee regardless of fluctuation in the rent received from end tenants, in accordance with the type of the master lease agreements with the master lessee. The master lease agreements for the New Property are the pass-through type.
5. "Gross number of tenants" of "Description of tenancy" is based on the lease agreements with tenants for warehouses or offices for the property in trust as of March 31, 2023 (excluding lease agreements with a term of less than one year). Such gross number of tenants includes the tenants where the leasing period of the relevant lease agreement was not commenced as of March 31, 2023. For properties with pass-through master lease agreements, it is based on the lease agreements executed between the master lessee and end tenants. The same shall apply below.
6. "Type of lease agreement" of "Description of tenancy" is based on the lease agreements.
7. "Name of major tenants" of "Description of tenancy" indicates the names of the tenants with the two biggest leased areas for the property in trust (for properties with a pass-through master lease agreement, the end tenant) (excluding tenants or end tenants whose lease agreements have a term of less than one year).
8. "Annual rent" of "Description of tenancy" is based on the total annual rent including common area charges as of March 31, 2023, as indicated in the relevant lease agreements for all warehouses or offices for the property in trust (excluding lease agreements with a term of less than one year) (or the annual rent calculated in accordance with the provisions of the lease agreements, if the relevant agreements include only the monthly rent). Figures are rounded down to the nearest million yen. Such annual rents also include the annual rents stipulated in the lease agreements, where the leasing period of the relevant lease agreement was not commenced as of March 31, 2023.
9. "Security deposit" of "Description of tenancy" is calculated as the total amount of security

Disclaimer: This press release is an announcement concerning acquisitions of domestic trust beneficiary interests and lease contract with new tenants, and has not been prepared for the purpose of solicitation for investment.

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deposit (or, if amortized, the security deposit amount after subtracting the relevant amortization amount) as indicated in the relevant lease agreements for all warehouses or offices for the property in trust as of March 31, 2023 (excluding lease agreements with a term of less than one year). Figures are rounded down to the nearest million yen. Such security deposits also include security deposits stipulated in the lease agreements, where the leasing period of the relevant lease agreement was not commenced as of March 31, 2023.

1. "Leased area" of "Description of tenancy" indicates the total leased area based on the lease agreements for all warehouses or offices for the property in trust as of March 31, 2023 (excluding lease agreements with a term of less than one year) and the floor plans included in such lease agreements (excluding lease agreements with a term of less than one year). Such leased area also includes the leased area stipulated in the lease agreements, where the leasing period of the relevant lease agreement was not commenced as of March 31, 2023.
2. "Leasable area" of "Description of tenancy" indicates the total leasable area based on the lease agreements for all warehouses or offices for the property in trust and the floor plans included in the lease agreements executed as of March 31, 2023 (excluding lease agreements with a term of less than one year) plus vacant space based on floor plans.
3. "Occupancy rate" of "Description of tenancy" is as of March 31, 2023, or the date of lease commencement stipulated in the relevant lease agreements (excluding lease agreements with a term of less than one year; the figure for leased area includes the leased area stipulated in the lease agreements that were executed but not commenced as of March 31, 2023), calculated by dividing the aggregate total leased area for the property in trust by the aggregate total leasable area for the property in trust. Figures are rounded to the nearest tenth.
4. "Extra description" indicates items believed to be important in terms of the relationship of rights and use of the New Property, as well as items believed to be important in consideration of their impact on the appraisal value, profitability and possibility of disposal of the New Property as of the date of this press release.
5. "Summary of the appraisal report" describes the summary of the appraisal report of the property which was appraised by Japan Real Estate Institute upon request from NPR and the Asset Manager. Such appraisal report only represents a judgment and an opinion of an appraiser as an evaluator at a certain point, and any adequacy, accuracy or feasibility of a transaction at such appraisal value is not guaranteed. There is no special interest between Japan Real Estate Institute and NPR or the Asset Manager.

Disclaimer: This press release is an announcement concerning acquisitions of domestic trust beneficiary interests and lease contract with new tenants, and has not been prepared for the purpose of solicitation for investment.

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