Heiwa Real Estate Advances Hotel Development Project Utilizing Former Kyoto Shimbun Headquarters Building through Capital and Business Alliance with Taisei Corporation

Heiwa Real Estate Co., Ltd. (Head Office: Chuo-ku, Tokyo; Representative Executive Officer and President: Kiyoyuki Tsuchimoto; hereinafter "the Company") is pursuing growth strategies under its long-term group vision "WAY 2040," with the slogan "Becoming a 'Bazukuri Company' that achieves discontinuous growth through continuous place-making." These strategies include expanding redevelopment projects (nationwide creation of attractive spaces), achieving both profit growth and improved capital efficiency (expanding leasing operations, capital turnover-type businesses, and entering new business fields), and enhancing social value (advancing sustainability initiatives).

To realize its long-term group vision, in June 2024, the Company entered into a capital and business alliance agreement (hereinafter "the Capital and Business Alliance") with Taisei Corporation (Head Office: Shinjuku-ku, Tokyo; President and CEO: Zenro Aikawa; hereinafter "Taisei Corporation") aimed at: ① expanding and accelerating redevelopment and similar projects; ② business collaboration in new business areas such as new real estate (asset class) investment; and ③ promoting collaboration in fields related to sustainability and digital transformation (DX).

Regarding the Hotel Development Project Utilizing the Former Kyoto Shimbun Headquarters Building

The Company, as part of its initiatives under the Capital and Business Alliance for new real estate (asset class) investment and other ventures, has jointly established a special purpose company (company name: Kyoto Go-shonan Kaihatsu Special Purpose Company) in November last year with Taisei Corporation and MINOR INTERNATIONAL PCL. (Head Office: Bangkok, Thailand; Founder & Chairman: William Ellwood Heinecke). The Company will proceed with a joint hotel development project (hereinafter "the Project") by leasing land located on Karasuma-dori, Nakagyo-ku, Kyoto City, owned by Kyoto Shimbun Holdings Co., Ltd. (Head Office: Kyoto City, Kyoto Prefecture; President and CEO: Yusuke Onishi).

To achieve the group's long-term vision "WAY 2040," the Company will enhance its corporate value by expanding into the hotel business, a new business domain, through advancing this Project.

Exterior View of (Provisional Name) Avani Kyoto

*This is a current exterior rendering; changes may occur based on future design and discussions.

【Overview of the Project】

The project site is located along Karasuma-dori, a major thoroughfare in central Kyoto, directly connected to Marutamachi Station on the Kyoto Municipal Subway Karasuma Line, and within walking distance of Kyoto Imperial Palace and the World Heritage Site "Nijo Castle."

In this Project, the Company will inherit the local history by preserving and utilizing elements such as the exterior and design of the former Kyoto Shimbun headquarters building, which served as part of the local landscape for about 60 years and represents the 150-year history of the Kyoto Shimbun newspaper. Public spaces such as a restaurant and lobby lounge will be created by repurposing the former rotary press room, transforming the building into an open hotel with various community-oriented functions. Royal Minor Hotels Co., Ltd. plans to open "(Provisional Name) Avani Kyoto" at this location, targeting completion within fiscal 2029.

The "Avani" brand by Minor Hotels, making its debut in Japan, is a premium lifestyle hotel brand centered on "lifestyle, sophisticated design, and vibrant, welcoming service," respecting local history and culture. Under this facility management philosophy, the Company will develop a hotel harmonized with the local community. Additionally, the project site is land leased from Kyoto Shimbun Holdings Co., Ltd., a company that has walked alongside the local community for approximately 100 years. The Company will jointly implement initiatives with Kyoto Shimbun Holdings to benefit not only hotel guests but also local residents.

Through this Project, the Company will deepen its capital and business alliance with Taisei Corporation, expand its hotel business as a new growth domain under its long-term vision, and enhance corporate value.

〈Avani Hotels & Resorts〉

Avani Hotels & Resorts targets millennial and Gen Z travelers seeking a balance of modern and functional features, offering thoughtful social spaces and authentic local hospitality. The brand currently operates over 40 hotels worldwide.

【Development Overview (as of June 15, 2026, planned)】

Project Name

(Provisional Name) Kyoto Shimbun Building Redevelopment Project

Project Owner

Kyoto Go-shonan Kaihatsu Special Purpose Company

Location (address)

337 Shosho Onikeyamachi-agaru Karasuma-dori Ichijoji, Nakagyo-ku, Kyoto City, and others

Site Area

3,894㎡

Total Floor Area

Approx. 23,000㎡

Structure and Scale

Reinforced Concrete

Renovated Building (Former North Wing): 8 stories above ground / 2 stories underground

New Building (Former South Wing): 5 stories above ground / 1 story underground

Building Use

Hotel (240 rooms total across renovated and new buildings)

Opening Date

Within fiscal 2029 (planned)

*This is the current plan; changes may occur based on future design and discussions.

【Location Map】

Previous Collaborations with Taisei Corporation

The Company and Taisei Corporation have advanced multiple initiatives based on the Capital and Business Alliance. The two companies will continue to promote various collaborations to enhance their corporate values.

● Entry into Private REIT Business (Press Release dated March 10, 2025)

In March 2025, the Company acquired a portion of shares (equivalent to a 13.6% stake) in Taisei Real Estate Investment Advisory Co., Ltd. (hereinafter "TREAM"), the asset management company of Taisei Construction Private Investment Corporation (hereinafter "TCPR"), a non-listed open-ended investment corporation and consolidated subsidiary of Taisei Corporation. This marks the Company's entry into the private REIT business, expanding the scope of its asset management operations within the Heiwa Group. On the same date, the Company entered into a sponsor support agreement with TCPR and TREAM, establishing a framework to act as a sub-sponsor by providing property information and other support.

Furthermore, in September 2025, the Company will newly acquire investment units issued by TCPR, making a co-investment as a sub-sponsor and committing to TCPR's growth. Additionally, in September of the same year, TCPR will acquire a portion of the ownership interest in the Sapporo office sold by the Company through a bridge scheme, allowing the Company to contribute to TCPR's growth as a sub-sponsor.

Through these initiatives, the Company will deepen its capital and business alliance with Taisei Corporation and link this to the expansion of capital turnover-type businesses, one of the growth strategies outlined in its long-term group vision, thereby enhancing corporate value.

● Development of Digital Twin Prototype in Nihonbashi Kojimachi and Kayabacho (Press Release dated March 31, 2025)

● Development of a Walking Game in the Nihonbashi Kojimachi and Kayabacho Area Using Digital Twin Technology, Starting from the Opening of "Caption by Hyatt Kojimachi Tokyo" on October 7 (Press Release dated September 25, 2025)

In the Nihonbashi Kojimachi and Kayabacho area, where the Company is advancing redevelopment, a digital twin prototype has been constructed through collaboration with Taisei Corporation. Under its long-term vision "WAY 2040," the Company has identified "expansion of redevelopment projects" as one of its growth strategies. In the Nihonbashi Kojimachi and Kayabacho Urban Development Vision 2040, the area's vitality