Heiwa Real Estate : June 10, 2024Notice of Significant Events after Completion of the Audit Committee’s Audit Report(316KB)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

June 10, 2024

For immediate release

Kiyoyuki Tsuchimoto, Representative Executive Officer,

President and CEO

Heiwa Real Estate Co., Ltd.

Notice of Significant Events after Completion of the Audit Committee's Audit Report

Heiwa Real Estate Co., Ltd. (hereafter, the "Company") announces that the following news releases issued on June 7 and 10, 2024, disclose information on significant events that occurred after its Audit Committee completed an audit report on May 15, 2024, which is reprinted in the Company's Notice concerning the Convocation of the 104th Ordinary General Shareholders' Meeting.

News releases issued on June 7, 2024 (reprinted in the pages that follow)

• Notice regarding Conclusion of Capital and Business Alliance Agreement between the Company and Taisei Corporation, and Related Tripartite Agreement including Mitsubishi Estate Co., Ltd.
• Notice of Change concerning the Company's Major Shareholders and Largest Shareholder

News releases issued on June 10, 2024 (reprinted in the pages that follow)

• Notice of Completion of Share Repurchase through the Tokyo Stock Exchange Trading Network for Off-Floor Share Repurchases and Resultant Changes concerning Major Shareholders and Associated Companies

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

June 7, 2024

For immediate release

Kiyoyuki Tsuchimoto, Representative Executive Officer, President and CEO Heiwa Real Estate Co., Ltd.

1-10, Nihonbashi Kabuto-cho,Chuo-ku, Tokyo

(Code No. 8803) TSE Prime Market, NSE Premier Market, Fukuoka, and Sapporo

Yoshiro Aikawa, President and Chief Executive Officer

Taisei Corporation

(Code No. 1801) TSE Prime Market and NSE Premier Market

Contact: Yasukiyo Saito, General Manager of Corporate Communication Department Tel: [phone] (Main)

Atsushi Nakajima, President and Chief Executive Officer

Mitsubishi Estate Co., Ltd.

(Code No. 8802) TSE Prime Market

Contact: Keiko Nakano, General Manager of Corporate Communications Department Tel: [phone]

Notice regarding Conclusion of Capital and Business Alliance Agreement between Heiwa Real Estate

Co., Ltd. and Taisei Corporation, and Establishment of Tripartite Collaborative Relationship

including Mitsubishi Estate Co., Ltd.

Heiwa Real Estate Co., Ltd. (hereinafter, "Heiwa Real Estate") and Taisei Corporation (hereinafter, "Taisei") have each resolved at their respective Board of Directors' meetings held today to enter into a capital and business alliance (hereinafter, the "Alliance") and signed a capital and business alliance agreement (hereinafter, "Alliance Agreement") as of today. Additionally, Heiwa Real Estate, Taisei, and Mitsubishi Estate Co., Ltd. (hereinafter, "Mitsubishi Estate") have signed an agreement concerning tripartite collaboration. This agreement (hereinafter, the "Cooperation Agreement") pertains to the Alliance Agreement and a capital and business alliance agreement between the Company and Mitsubishi Estate dated February 17, 2011.

1. Reasons for Concluding the Alliance and Cooperation Agreement

Heiwa Real Estate engages in the Building Business, encompassing the development, leasing, management, acquisition, and sale of buildings such as the Tokyo Stock Exchange Building and Osaka Stock Exchange Building, along with other stock exchange buildings in Nagoya and Fukuoka, as well as offices, commercial facilities, and residential properties. The company is also involved in Asset Management Business, which includes managing assets for HEIWA REAL ESTATE REIT, Inc., and providing brokerage services for real estate transactions. Under the Group Purpose, "Enriching everyone's future with Bazukuri that draws people in," and guided by the Group Long-term Vision "WAY 2040," Heiwa Real Estate is committed to various growth strategies based on the slogan, "Pursue perpetual dynamic growth to become the 'Bazukuri Company.'" These strategies include efforts to expand redevelopment business (deploy Bazukuri endeavors that draw

1

people in throughout Japan), cultivate profit growth while enhancing capital efficiency (expand leasing business, reinvest gains from property sales, and enter new business areas), and boost social value (promote sustainability initiatives).

Taisei engages in building construction business, civil engineering business, real estate development business, and engineering business, among other areas. This is guided by the Taisei Group Philosophy, "To Create a Vibrant Environment for All Members of Society," and the Taisei Spirit, which embodies a commitment to "Active and Transparent Culture," "Value Creation," and "Evolution of Tradition" aimed at fulfilling this philosophy. As part of TAISEI VISION 2030, Taisei has identified medium- to long-term external environment and structural changes as "three Xs": IX (industry transformation), SX (sustainability transformation), and DX (digital transformation). Taisei Group's aim for FY2030, ended March 31, 2031, is to become "The Ever-Evolving CDE3 (cubed) Company" by being "a pioneering corporate group contributing to the development of a resilient society where people can live affluent and cultural lives." Taisei is steadily implementing medium- to long-term business strategies for each segment as well as creating a new business model and transforming businesses utilizing DX and M&A to realize sustainable growth and enhance corporate value over the medium to long term.

Mitsubishi Estate engages in a wide range of business activities in various fields. These include the Commercial Property Business and the Marunouchi Property Business, focusing on the development and operation of office buildings and retail facilities nationwide, particularly the Marunouchi area (Otemachi, Marunouchi, and Yurakucho). Additionally, it is involved in Residential Business, centered around the sale of condominiums and single-unit homes, International Business, Investment Management Business, Architectural Design & Engineering Business, and Real Estate Services Business. Under the basic mission of "contributing to society through urban development," Mitsubishi Estate aims to realize the enhancement of corporate value through a harmonious balance between corporate growth and the interests of its various stakeholders. In its Long-Term Management Plan 2030, Mitsubishi Estate has positioned strategies for increasing shareholder value and strategies for increasing social value at the core of its management. Based on the fundamental policy to "Be the Ecosystem Engineers" defined in the Mitsubishi Estate Group Sustainability Vision 2050, it is promoting the integration of business and sustainability.

Heiwa Real Estate has been considering business alliances with potential collaborators who can work together to achieve the abovementioned Group Long-term Vision. Taisei, as one of Japan's leading general contractors, has an outstanding track record, particularly in urban redevelopment. Moreover, both Heiwa Real Estate and Taisei believe they can establish a strong collaborative relationship, especially in asset management and sustainability initiatives. Based on these considerations, Heiwa Real Estate concluded that Taisei is the optimal business alliance partner to collaboratively develop these areas.

Through the Alliance, it is expected that establishing a medium- to long-term collaborative relationship will lead to greater corporate value for both companies. This will be achieved by further leveraging their respective strengths in business foundations, expertise, and other domains to (1) expand and accelerate redevelopment business, (2) collaborate on new business areas such as investments in new real estate (asset classes), and (3) promote business alliances in the fields of sustainability and DX.

As part of the Alliance, in addition to the business partnership, Taisei will become the largest shareholder of Heiwa Real Estate by acquiring its common shares from both Simplex Asset Management Co., Ltd. and Simplex Asset Management (HK) Company Limited (hereinafter, collectively referred to as "Simplex") and Mitsubishi Estate. Through this, Taisei and Heiwa Real Estate expect to establish a close business collaboration and leverage business synergies, thereby enhancing corporate value mutually.

Additionally, since Heiwa Real Estate has already formed a capital and business alliance with Mitsubishi Estate, the conclusion of the Cooperation Agreement aims to establish mutual understanding between the three parties-Heiwa Real Estate, Taisei, and Mitsubishi Estate-regarding how the new Alliance Agreement relates

2

to the existing alliance with Mitsubishi Estate.

These three companies shall respect the spirit, purpose, and content of each other's capital and business alliance agreements. (For Heiwa Real Estate and Mitsubishi Estate, this refers to the capital and business alliance agreement dated February 17, 2011. For Heiwa Real Estate and Taisei, it pertains to the Alliance Agreement.) Through mutual cooperation and coordination in advancing the capital and business alliances based on their respective agreements, the three companies aim to establish a collaborative relationship and enhance their individual corporate value.

Comments from each company follow.

Heiwa Real Estate Co., Ltd. (Kiyoyuki Tsuchimoto, Representative Executive Officer, President and CEO)In March 2024, the Heiwa Real Estate Group defined the Long-term Vision "WAY 2040" and adopted the slogan, "Pursue perpetual dynamic growth to become the 'Bazukuri Company.'" As key growth strategies for achieving this vision, we aim to (1) expand redevelopment business (deploy Bazukuri endeavors that draw people in throughout Japan), (2) cultivate profit growth while enhancing capital efficiency (expand leasing business, reinvest gains from property sales, and enter new business areas), and (3) boost social value (promote sustainability initiatives).

On this occasion, we are initiating a fresh capital and business alliance with Taisei, a prominent general contractor in Japan, while also upholding our existing capital and business alliance with Mitsubishi Estate, a leading real estate developer in Japan. Through this initiative, we seek to expedite the growth strategies outlined in the Group Long-term Vision and strive toward enhancing corporate value by fostering a collaborative relationship among the three companies.

Taisei Corporation (Yoshiro Aikawa, President and Chief Executive Officer)

In our recently announced "TAISEI VISION 2030 Achievement Plan," we have set forth a vision for the Group Domestic Real Estate Development Business by FY2030. Our goal is to contribute to high value-added urban development by making the most of our development know-how and technological capabilities as a general contractor.

Through the Alliance with Heiwa Real Estate and the Cooperation Agreement between Heiwa Real Estate, Mitsubishi Estate, and Taisei, we will work toward high-value-added urban development and enhancing mutual corporate value by leveraging our development capabilities to create investment opportunities in the development business.

Mitsubishi Estate Co., Ltd. (Atsushi Nakajima, President and Chief Executive Officer)

Since the conclusion of the capital and business alliance agreement on February 17, 2011, we have been collaborating with Heiwa Real Estate to explore urban development projects, including in the Nihonbashi Kabutocho district. Moving forward, we will strive to further develop and enhance the appeal of areas such as Nihonbashi Kabutocho, leveraging the strengths of Heiwa Real Estate, Taisei, and ourselves.

3

2. Details of the Alliance and the Cooperation Agreement

(1) Details of the Alliance

Heiwa Real Estate and Taisei have agreed to collaborate in various business domains, with the main content outlined as follows.

1) Collaboration in redevelopment business, etc.

To facilitate the progress of long term redevelopment projects, the parties have agreed to establish and develop a collaborative relationship for redevelopment projects in the Nihonbashi Kabutocho district, along with Mitsubishi Estate. They will also engage in sincere discussions to: a) examine and promote redevelopment projects in Sapporo, b) establish a comprehensive cooperative relationship, including mutual provision of know-how related to redevelopment projects as needed, and c) collaborate on redevelopment projects that either or both may consider promoting in the future.

2) Collaboration in new business fields such as new real estate investment

Heiwa Real Estate aims to venture into new business fields to achieve the Group Long-term Vision, and the parties have agreed to actively collaborate on business alliances in new business fields such as investment in logistics facilities, a new asset class.

3) Collaboration in sustainability and DX

The parties have agreed to actively collaborate on business alliances in the fields of sustainability and DX.

In addition, Taisei has agreed to nominate one person as a candidate for an executive officer position at Heiwa Real Estate. Taisei acknowledges and fully respects the Heiwa Real Estate's commitment to maintaining listing status and management autonomy, prioritizing the collective interests of all shareholders in addition to its own.

(2) Details of the Cooperation Agreement

Heiwa Real Estate, Taisei, and Mitsubishi Estate shall mutually respect the spirit, purpose, and content of each other's capital and business alliance agreements, and shall advance the alliances based on their respective agreements. In doing so, they shall cooperate and collaborate with each other within the required scope.

(3) Details of capital relationship

Heiwa Real Estate and Taisei, as well as Heiwa Real Estate and Mitsubishi Estate, have agreed to smoothly advance their respective capital and business alliance agreements and the tripartite collaborative relationship. To facilitate this process, Taisei has today entered into share transfer agreements with both Simplex and Mitsubishi Estate (hereinafter, the "Share Transfer Agreements"). Under these agreements, Taisei will acquire all of the common shares of Heiwa Real Estate held by Simplex (5,829,000 shares, representing 16.30% of the total voting rights (357,527) as of March 31, 2024, with the percentage rounded to two decimal places. This number includes one voting right for 100 shares that, while registered under Heiwa Real Estate's name in the shareholder register, are not substantially owned by Heiwa Real Estate.) and a portion of the common shares of Heiwa Real Estate held by Mitsubishi Estate (388,500 shares, representing 1.09% of the voting rights) through off-market transactions. Heiwa Real Estate also plans to acquire common shares of Taisei in the market, ensuring that the voting rights ratio does not exceed 0.5%.

4

In addition, Heiwa Real Estate has resolved today to execute a share repurchase and has determined the specific acquisition method. An announcement titled "Notice of Completion of Share Repurchase through the Tokyo Stock Exchange Trading Network for Off-Floor Share Repurchases and Resultant Changes Concerning Major Shareholders and Associated Companies" has been released today. Mitsubishi Estate plans to sell a portion of its common shares of Heiwa Real Estate back to Heiwa Real Estate as part of this share repurchase (hereinafter, "the Share Repurchase").

Through these capital transactions, Taisei will become the largest shareholder of Heiwa Real Estate, and Heiwa Real Estate will become an equity-method affiliate of Taisei.

(Reference) The number of common shares of Heiwa Real Estate and the percentage of voting rights held by each company after the Alliance and the Share Repurchase (planned)

Taisei	Mitsubishi Estate
6,750,100 shares (20.12% of voting rights) (planned)	1,677,300 shares (5.00% of voting rights) (planned)

Note: The percentage of voting rights (planned) is calculated based on the figure obtained by deducting the number of shareholders' voting rights that Heiwa Real Estate plans to acquire from shareholders intending to sell their stake in Heiwa Real Estate via the Share Repurchase scheme from the total number of shareholder voting rights as of March 31, 2024 (357,527).

3. Schedule

(1)	Date of Board of Directors' resolution	June 7, 2024
(2)	Date of conclusion of the Alliance Agreement and the	June 7, 2024
	Cooperation Agreement
(3)	Start date of the Alliance and the Cooperation Agreement	June 7, 2024
(4)	Date of conclusion of Share Transfer Agreements	June 7, 2024
(5)	Completion date of share transfer procedures	June 10, 2024 (planned)
(6)	Execution date of the Share Repurchase	June 10, 2024 (planned)

5

2024.5.29Draft

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

June 7, 2024

For immediate release

Kiyoyuki Tsuchimoto, Representative Executive Officer, President and CEO Heiwa Real Estate Co., Ltd.

1-10, Nihonbashi Kabuto-cho,Chuo-ku, Tokyo

(Code No. 8803) TSE Prime Market, NSE Premier Market, Fukuoka, and Sapporo

Notice of Change concerning the Company's Major Shareholders and Largest Shareholder

Heiwa Real Estate Co., Ltd. (hereafter, the "Company") announced today that it expects a change concerning its major shareholders and largest shareholder. Details are as follows.

1. Expected date of the change June 10, 2024
2. Summary of the change

As announced in its news release issued today, "Notice regarding Conclusion of Capital and Business Alliance Agreement between Heiwa Real Estate Co., Ltd. and Taisei Corporation, and Establishment of Tripartite Collaborative Relationship including Mitsubishi Estate Co., Ltd.," the Company has concluded a capital and business alliance agreement with Taisei, through which Taisei will acquire all of the Company's shares held by Simplex, and a portion held by Mitsubishi Estate Co., Ltd. As a result of these acquisitions (hereafter, the "Acquisitions"), Taisei will replace Simplex as both a major shareholder and the Company's largest shareholder.

3. Overview of the changes among shareholders

(1) Details of the company to be newly categorized as a major shareholder and the largest shareholder

(1)	Company name	Taisei Corporation
(2)	Address	1-25-1Nishi-Shinjuku,Shinjuku-ku, Tokyo 163-0606, Japan
(3)	Representative officer	Yoshiro Aikawa, President and Chief Executive Officer
		Planning, surveying, design, supervising, construction and installation,
(4)	Main businesses	engineering, management, and consulting related to building works, civil
engineering works, plant installation works, and other construction
		works of all kinds
(5)	Paid-in capital	¥122,742 million
		- 1 -

(2) Details of the company that will no longer be categorized as a major shareholder nor the largest shareholder

(1)	Company name	Simplex Asset Management Co., Ltd.
(2)	Address	1-5-1 Marunouchi, Chiyoda-ku, Tokyo 100-6527, Japan
(3)	Representative officer	Hiromasa Mizushima, President and CEO
(4)	Main businesses	Investment trust management and marketable securities-related
discretionary investment management and consulting
(5)	Paid-in capital	¥370 million

4. Number of voting rights, shares, and percentage of total voting rights held by the shareholders, below, before and after the Acquisitions

1. Taisei Corporation

	Shareholder	Number of voting rights	Percentage of total	Ranking among
	category	(Number of shares held)	voting rights held	shareholders*2
Before the
Acquisitions (as	―	5,326 voting rights	1.49%*1, *4	Sixth
of March 31,	(532,600 shares)
2024)
	Major
After the	shareholder and	67,501 voting rights	18.88%*1, *3, *4	First
Acquisitions	largest	(6,750,100 shares)

shareholder

*1 The percentage of total voting rights held before and after the Acquisitions was calculated based on a total of 357,527 voting rights granted to shareholders, which was reached by subtracting 2,901,300 treasury shares and 205,996 shares without voting rights as of March 31, 2024, from a total of 38,859,996 shares issued as of the same date. The number of voting rights include single votes per 100 shares that are held under the Company's name in the shareholder register but not actually possessed by the Company.

*2 The ranking among shareholders is based on the shareholder register as of March 31, 2024.

*3 As announced in its news release issued today, "Notice of Decision to Conduct a Share Repurchase through the Tokyo Stock Exchange Trading Network for Off-Floor Share Repurchases," the Company plans to acquire its own shares from a shareholder that intends to sell its shareholdings. Due to the resultant shift in the Company's shareholding structure following this planned share repurchase, the percentage of total voting rights held by Taisei will increase to 20.12%, and, accordingly, it will be categorized as an associated company (defined as holding over 20% of voting rights). This percentage of total voting rights was calculated by subtracting the number of voting rights corresponding to the shares that the Company expects to acquire through its share repurchase on June 10, 2024, from the total of 357,527 voting rights granted to shareholders as of March 31, 2024.

*4 Figures for the percentage of total voting rights held have been rounded to two decimal places.

- 2 -

(2) Simplex Asset Management Co., Ltd.

	Shareholder	Number of voting rights	Percentage of total	Ranking among
	category	(Number of shares held)	voting rights held	shareholders*1
Before the	Major
Acquisitions (as	shareholder and	58,290 voting rights	16.30%*2, *3	First
of March 31,	largest	(5,829,000 shares*1)
2024)	shareholder
After the	―	―	―	―
Acquisitions

*1 The number of shares held is based on the number reported by Simplex, and the Company has not been able to confirm the actual number in its shareholder register. The ranking among shareholders is based on the shareholder register as of March 31, 2024.

*2 The percentage of total voting rights held before the Acquisitions was calculated based on a total of 357,527 voting rights granted to shareholders, which was reached by subtracting 2,901,300 treasury shares and 205,996 shares without voting rights as of March 31, 2024, from a total of 38,859,996 shares issued as of the same date. The number of voting rights include single votes per 100 shares that are held under the Company's name in the shareholder register but not actually possessed by the Company.

*3 Figures for the percentage of total voting rights held have been rounded to two decimal places.

1. Changes concerning unlisted parent companies subject to disclosure rules Not applicable
2. Expected impact on financial results

The Company does not expect any impact on its consolidated financial results following the changes described above.

- 3 -

2024.6.3Draft

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

June 10, 2024

For immediate release

Kiyoyuki Tsuchimoto, Representative Executive Officer, President and CEO Heiwa Real Estate Co., Ltd.

1-10, Nihonbashi Kabuto-cho,Chuo-ku, Tokyo

(Code No. 8803) TSE Prime Market, NSE Premier Market, Fukuoka, and Sapporo

Notice of Completion of Share Repurchase through the Tokyo Stock Exchange Trading Network for

Off-Floor Share Repurchases and Resultant Changes concerning Major Shareholders

and Associated Companies

Heiwa Real Estate Co., Ltd. (hereafter, the "Company") announces that it has completed the share repurchase that it announced on June 7, 2024. Its shares were acquired through the Tokyo Stock Exchange Trading Network for off-floor share repurchases, known as ToSTNeT-3, in accordance with a decision by the Company's Board of Directors in a meeting held on June 7, 2024. Details of the share repurchase and resultant changes among the Company's major shareholders and associated companies are as follows.

1. Overview and outcome of the share repurchase

1. Reason for share repurchase
   The Company repurchased its own shares in order to increase shareholders' returns, specifically by increasing earnings per share and return on equity.
2. Details of the share repurchase

(1)	Type of shares acquired	The Company's common shares
(2)	Number of shares acquired	2,400,000 shares
(3)	Value of shares acquired	¥9,048,000,000
(4)	Date of acquisition	June 10, 2024
(5)	Share acquisition method	The shares were acquired through the Tokyo Stock Exchange
		Trading Network for off-floor share repurchases (ToSTNeT-3)

(Reference) Details of the decision reached by the Board of Directors in its meeting held on June 7, 2024

(1)	Type of shares to acquire	The Company's common shares
(2)	Number of shares to acquire	Up to 2,400,000 shares
		(equivalent to 6.67% of all shares issued, excluding treasury shares)
(3)	Value of shares to acquire	Up to ¥9,048,000,000
(4)	Date of acquisition	June 10, 2024