34,500 units

May 22, 2023

This notice is the English translation of the Japanese announcement on May 22, 2023

REIT Issuer

HEIWA REAL ESTATE REIT, Inc.

5-1 Nihonbashi Kabuto-cho,Chuo-ku, Tokyo

Aya Motomura, Executive Director

(Securities Code: 8966)

Asset Management Company

HEIWA REAL ESTATE Asset Management CO., LTD.

Masanori Hirano, Representative Director, President and Chief Executive Officer Inquiries: Junichi Kawamura, Managing Officer and General Manager of Planning & Finance Department TEL. +81-3-3669-8771

Notice Concerning the Issuance of New Investment Units and Secondary Offering of Investment Units

HEIWA REAL ESTATE REIT, Inc. (hereinafter referred to as "REIT") announces that it has passed a resolution at the Board of Directors meeting, held today, concerning the issuance of new investment units and the secondary offering of investment units as follows.

Details

1. Issuance of new investment units through public offering (Primary Offering)

（1） Number of investment units to be offered

（2） Amount to be paid（issue value） To be determined

（3） Total amount to be paid (issue value)

（4） Issue price (offer price)

The amount to be paid in will be decided at a meeting of the REIT's Board of Directors to be held on a date ("Pricing Date") between Thursday, May 25, 2023 and Tuesday, May 30, 2023 in accordance with the methods stated in Article 25 of the Japan Securities Dealers Association's Rules Concerning Underwriting, Etc. of Securities.

To be determined

The issue price (offer price) will be determined in accordance with methods stated in Article 25 of the Japan Securities Dealers Association's Rules Concerning Underwriting, Etc. of Securities. If the Pricing Date falls on any day between Thursday, May 25, 2023 and Monday, May 29, 2023, the price will be provisionally calculated (with fractions less than 1 yen discarded) by deducting projected distributions per unit of 3,160 yen (excluding projected distributions in excess of earnings) for the fiscal period ended May 31, 2023 from the closing price for ordinary transactions of the Investment Corporation's investment units ("Investment Units") on Tokyo Stock Exchange Inc. ("TSE") on the Pricing Date (the closing price for the units on the immediately preceding date in the event that no price is available on the Pricing Date) and by multiplying the result by a number between 0.90 and 1.00. In the case in which the Pricing Date is Tuesday, May 30, 2023, the price will be provisionally calculated (with fractions of less than 1 yen discarded) by multiplying the closing price for ordinary transactions of the

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Investment Corporation's investment units on the TSE on the Pricing Date (in the event that no price is available on the Pricing Date, the closing price for the units on the immediately preceding date from which the above projected distributions per unit (excluding projected distributions in excess of earnings) are deducted) by a number between 0.90 and 1.00. In both of the above cases, demand and other factors will be taken into consideration.

To be determined

The public offering will be a primary offering in which all investment units shall be purchased and underwritten by 5 companies, SMBC Nikko Securities Inc., Daiwa Securities Co., Ltd., Nomura Securities Co., Ltd., Mizuho Securities Co., Ltd., and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (collectively the "Joint Lead Managers"), and 3 additional companies, IwaiCosmo Securities Co.,Ltd., Okasan Securities Co., Ltd. and Toyo Securities Co., Ltd. (together, the Joint Lead Managers and these 3 companies are the "Underwriters."). In addition, SMBC Nikko Securities Inc., Daiwa Securities Co., Ltd. and Nomura Securities Co., Ltd. will be the joint book runners ("Joint Book Runners").

Underwriters will pay the REIT the total amount to be paid in (issue value) on the payment date stated in the following item (11). The difference between the total amount to be paid in for the primary offering (issue value) and the total amount of the issue price (offer price) will be the proceeds of the Underwriters. The REIT will pay no underwriting fee to the Underwriters.

1 unit or more, in multiples of 1 unit

The first business day following the pricing data.

From the first business day to the second business day after the pricing date

Any day between Thursday, June 1, 2023 and Monday, June 5, 2023, however, the payment date will be Thursday, June 1, 2023 if the pricing date is Thursday, May 25, 2023 or Friday, May 26, 2023. The payment date will be Friday, June 2, 2023 if the pricing date is Monday, May 29, 2023. The payment date will be Monday, June 5, 2023 if the pricing date is Tuesday, May 30, 2023.

The first business day following the payment date.

（5） Total amount of issue price

(total offer price)

（6） Method of public offering

（7） Details of underwriting agreement

（8） Subscription unit

（9） Subscription period

（10） Payment period for deposit in securities

（11） Payment date

（12） Delivery date

（13） The issue price (offer price), the amount to be paid in (issue value) and other matters necessary for the issuance of new investment units through the primary offering will be decided at future meetings of the REIT's Board of Directors.

（14） Each of the above items will be subject to the effectuation of securities registration under the Financial Instruments and Exchange Act.

2. Secondary offering of investment units (Secondary offering through over-allotment)

（1） Seller

（2） Number of the secondary offering of investment unit

SMBC Nikko Securities Inc.

1,700 units

The number of investment units to be offered is the maximum number of investment units SMBC Nikko Securities Inc. will allocate by means of a secondary offering through over-allotment, taking demand and other factors in the primary offering into consideration. This number may decrease or the secondary offering through over-allotment may not be conducted at all, depending on demand and other factors. The number of investment units to be offered will be decided on the Pricing Date, taking demand and other factors into consideration.

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1,700 units

To be determined

(The secondary offer price will be determined on the pricing date. In addition, the secondary offer price shall be the same as the issue price (offer price) in the primary offering.)

To be determined

(The secondary offer price will be determined on the pricing date. In addition, the secondary offer price shall be the same as the issue price (offer price) in the primary offering.)

To be determined

Taking demand and other factors in the primary offering into account, SMBC Nikko Securities Inc. will conduct the secondary offering of Investment Units it will borrow ("Borrowed Investment Units") from Heiwa Real Estate Co., Ltd. ("Heiwa Real Estate"), an investor in the REIT and a shareholder of HEIWA REAL ESTATE Asset Management CO., LTD. (the "Asset Management Company"), with 1,700 such units as the upper limit, separate from the primary offering.

1 unit or more, in multiples of 1 unit

The same as the primary offering subscription period

The same as the primary offering payment period for deposit in securities

（3） Secondary offer price

（4） Total amount of secondary offer price

（5） Method of secondary offering

（6） Subscription unit

（7） Subscription period

（8） Payment period for deposit in securities

（9） Delivery dateThe same as the primary offering delivery date

（10） The secondary offering price and other matters necessary for the secondary offering of investment units through over-allotment will be decided at future meetings of the REIT's Board of Directors.

（11） Each of the above items will be subject to the effectuation of securities registration under the Financial Instruments and Exchange Act.

3. Issuance of new investment units through third-party allotment (Third-party allotment)

（1） Number of investment units to be offered

（2） Total amount to be paid (total issue value)

（3）	Total amount to be paid	To be determined
	(total issue value)

（4）	Allottee and allotted units	SMBC Nikko Securities Inc. 1,700 units
（5）	Subscription unit	1 unit or more, in multiples of 1 unit
（6）	Subscription period	Any day between Monday, June 26, 2023 and Monday, July 3, 2023
	(subscription date)	However, it shall be the business day following the 30th day (or the
		preceding business day if the 30th day is not a business day) from the
		day following the subscription period for the primary offering and the
		secondary offering through over-allotment.
（7）	Payment date	Any day between Tuesday, June 27, 2023 and Tuesday, July 4, 2023
		However, it shall be the second business day after the 30th day (or the
		preceding business day if the 30th day is not a business day) from the
		day following the subscription period for the primary offering and the
		secondary offering through over-allotment.
（8）	Investment units, for which no application for subscription is made by the end of the application period
	stated in item (6) above (the application deadline) will not be issued.
（9）	The amount to be paid in (issue value) and other matters necessary for the issuance of new investment units
	through private placement will be decided at future meetings of the REIT's Board of Directors.
（10）	Each of the above items will be subject to the effectuation of securities registration under the Financial
	Instruments and Exchange Act.

＜Reference＞

1.Secondary Offering through Over-Allotment, etc.

（1） SMBC Nikko Securities Inc., the lead manager of the primary offering, may conduct a secondary offering of Investment Units (secondary offering through over-allotment), separate from the primary offering, by borrowing

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from Heiwa Real Estate a maximum of 1,700 units, taking demand and other factors in the primary offering into consideration. The number of investment units to be offered by means of secondary offering through over- allotment will be 1,700. This is the maximum number of units to be allocated for the secondary offering. The number may decrease or the secondary offering through over-allotment may not be conducted at all, depending on demand and other factors.

In connection with the secondary offering through over-allotment, the REIT's Board of Directors at its meeting held on Monday, May 22, 2023 resolved to issue 1,700 Investment Units to SMBC Nikko Securities Inc. by means of third-party allotment with any day during the period from Tuesday June 27, 2023 to Tuesday July 4, 2023 (provided, however, that the day shall be the date two business days after the 30th day (if the 30th day is not a business day, then the preceding business day) from the day following the subscription period for the primary offering and secondary offering through over-allotment) as the payment date (the "Payment Date of the Third-Party Allotment") in order to enable SMBC Nikko Securities Inc. to acquire the Investment Units necessary to return the Borrowed Investment Units.

During the period from the date immediately after the last day of the subscription period for both the primary offering and the secondary offering through over-allotment to to the day two business days prior to the Payment Date of the Private Placement (the "Syndicate Cover Transaction Period"), SMBC Nikko Securities Inc. may purchase Investment Units on the TSE in a quantity up to a number specified in the secondary offering through over-allotment ("Syndicate Cover Transactions") with the goal of returning the Borrowed Investment Units. All Investment Units acquired by SMBC Nikko Securities Inc. through Syndicate Cover Transactions will be used to return the Borrowed Investment Units. During the Syndicate Cover Transaction Period, SMBC Nikko Securities Inc. may not perform any Syndicate Cover Transactions or terminate Syndicate Cover Transactions in a quantity lower than the number of units issued in the secondary offering through over-allotment based on its own discretion.

In addition, SMBC Nikko Securities Inc. may engage in stabilizing transactions in connection with the primary offering and the secondary offering through over-allotment. SMBC Nikko Securities Inc. may use all or part of the Investment Units purchased through such stabilizing transactions for returning Borrowed Investment Units.

In response to the allotment through private placement, SMBC Nikko Securities Inc. plans to acquire Investment Units in the number determined by deducting the number of investment units purchased through stabilizing transactions and the Syndicate Cover Transactions and used to return the Borrowed Investment Units from the number of investment units to be offered in the secondary offering through over-allotment. For that reason, subscriptions may not be made for all or part of the investment units to be issued through private placement. As a result, the final number of investment units issued in private placement may decrease to the extent set by the number of the unsubscribed investment units or the issuance of investment units through private placement may not take place at all due to the forfeiture of subscription rights.

Whether or not the secondary offering through over-allotment will take place, and how many investment units will be issued in the event the secondary offering through over-allotment is conducted will be decided on the Pricing Date. SMBC Nikko Securities Inc. will not borrow Investment Units from Heiwa Real Estate if the secondary offering through over-allotment does not take place. In this case, the issuance of new investment units through private placement will not take place at all due to forfeiture because SMBC Nikko Securities Inc. will not accept allotment through private placement and not apply for subscription. Moreover, no Syndicate Cover Transactions will take place on the TSE.

（2） The above transactions will be carried out by SMBC Nikko Securities Inc. in consultation with Daiwa Securities Co. Ltd. and Nomura Securities Co., Ltd.

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2. Change in the total number of outstanding investment units after this issuance of new investment units

Present total number of outstanding units

Increase in the number of investment units associated with the issuance of new investment units in the primary offering

Total number of outstanding investment units after the issuance of new investment units in the primary offering

Increase in the number of investment units associated with the third-party allotment

Total number of outstanding investment units after the third-party allotment

1,113,733 units

34,500 units

1,148,233 units

1,700 units (Note)

1,149,933 units (Note)

Note: The numbers of investment units stated above assume that SMBC Nikko Securities Inc. subscribes to all of the investment units in private placement, and that all such investment units are issued. Subscriptions may not be made for all or part of the investment units issued through private placement. As a result, the final number of investment units issued through private placement may decrease to the extent set by the number of unsubscribed investment units or the issuance of investment units through private placement may not take place at all due to the forfeiture of subscription rights. Please refer to the subsection (1) in section 1. Secondary Offering through Over-Allotment, etc. above for details.

3. Purpose and Reason for the Issuance

Taking into consideration real estate market conditions, investment unit market conditions, levels of distribution and net asset value (NAV) per unit, etc., we have decided to issue new investment units to procure funds for the acquisition of new specified assets (based on Article 2, Paragraph 1 of the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951), as amended. Hereinafter the same shall apply) with the aim of expanding the scale of assets and improving the profitability and quality of our portfolio, and for the purpose of strengthening our financial base by reducing the interest-bearing debt ratio (LTV).

4. Electronic delivery of prospectus

Underwriters will provide the prospectus for the Offering (the Primary Offering and the private placement may be collectively referred to as the "Offering." The same shall apply hereinafter.) not in writing, but entirely by electronic delivery (Note).

(Note) The Investment Corporation terms the provision of matters described in a prospectus by way of electromagnetic method "electronic

delivery of prospectus." The prospectus provider shall be deemed to have delivered the prospectus if it has obtained the consent of the prospectus

recipient and has provided the information contained in the prospectus by electromagnetic means (Article 27-30-9, Paragraph 1 of the Financial

Instruments and Exchange Act and Article 32-2, Paragraph 1 of the Cabinet Office Ordinance on Disclosure of Information of Regulated

Securities, etc.). Therefore, if consent cannot be obtained, or if consent is withdrawn (Article 32-2, Paragraph 7 of the Cabinet Office Ordinance

on Disclosure of Information of Regulated Securities, etc.), the prospectus cannot be delivered electronically, but underwriters will sell Investment

Units in the Offering only to investors whose consent have been obtained and not withdrawn.

5. Amount of Proceeds, Their Use and Planned Disbursement Date

Amount of proceeds (estimated net proceeds)

5,332,000,000 yen (maximum)

Note: The amount above is the sum of the estimated net proceeds of 5,082,000,000 yen from the primary offering and the estimated maximum net proceeds of 250,000,000 yen from the issuance of new investment units through private placement. The amount stated above is also an estimate based on the closing price for ordinary transactions in Investment Units on the TSE on Friday, April 28, 2023.

(2) Specific use of proceeds and their planned disbursement date

The proceeds (5,082,000,000 yen) to be received from the primary offering will be used to partially fund acquisitions of specified assets and to repay borrowings made as of April 27, 2023, in whole or in part. The

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HEIWA Real Estate REIT Inc. published this content on 02 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 June 2023 08:30:10 UTC.

Heiwa Real Estate REIT : Notice Concerning the Issuance of New Investment Units and Secondary Offering of Investment Units