"Financial Results for the 3rd Fiscal Period Ended July 2017"

Star Asia Investment Corporation(Securities CODE 3468)
Star Asia Investment Management

Contents
1. Executive Highlights

2

2. 3rd Fiscal Period Topics

6

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures

10

4. Future Initiatives

19

5. Appendix

27* In this material, amounts less than specified units are rounded down while ratios are rounded to a specified unit.
* Terms used in this material are defined as below.
“Tokyo area”: “Tokyo area” refers to Tokyo’s 23 wards and the cities of Kawasaki and Yokohama for office properties and retail facilities, and Tokyo andthe three prefectures of Kanagawa, Saitama and Chiba for residential properties, logistics facilities and hotels.

11. Executive Highlights2

1. Executive Highlights① Strategies for “Maximization of Unitholders’ Value” Implemented in the 3rd Fiscal Period
Speedily implemented measures contributing to the maintenance and increase of cash distribution per unit in consideration ofreal estate and J-REIT market conditions

Contribution to
maximization ofunitholders’ value<Strategy>

Increased the asset size through property acquisitions, etc. with public offerings

Asset size 75.35 billion yen

Generated gain on sale through sale of properties while replacing assets

3rd FP cash distributions 4,423 yen

Realized highest occupancy rate since launch

Period-end occupancy rate 97.3%

Pursuit of optimum portfolio
management
・Asset replacement aiming to enhance
portfolio quality, income and stability
・Make assessment of owned assets apparent
and transfer assets materializing unrealized
gain
・Closing of rent gap

Realizing
maximization ofunitholders’ value

Promotion of proactive
financial management

Maintenance/
improvement of cash
distribution per unit

・Reduction of fund procurement costs
・Early repayment of borrowings
・Introduction of the cumulative investment
system by officers and employees
・Consideration of acquisition of credit rating
・Consideration of acquisition of own
investment units

Securement of future
external growth/investment
opportunities

・Acquisition of preferential negotiationrights and utilization of sponsor support(warehousing function)
・Diversification of income earning
opportunities (mezzanine loan debt)<Implementation in the 3rd FP>
Internal growth① Closing of rent gap② Implementing strategic renovations(Urban Park Azabujuban and Urban Park Kashiwa)③ Leasing for increasing the occupancy rate
④ Renewal of sponsor support agreement (enhancement offunctions contributing to maintaining and increasing the value ofbuildings)

External growth① Acquisition of 6 properties through public offerings ⇒ increase of
asset size
② Asset replacement 1 ⇒ Contribution to stabilization of revenues③ Asset replacement 2 ⇒ Restoration of gain on sale andimprovement of average building age

Financial strategy① Public Offering② Establishment of interest rate swaps ⇒ Avoid risk of fluctuation
by fixing interest rates③ Consideration of investment in mezzanine loan debt
④ Consideration of acquisition of credit rating3

1. Executive Highlights② Preferred and concentrated investment in the Tokyo area and the construction of a portfoliowith diversified asset types
Expansion of asset size to 75.35 billion
Composition Ratio by Asset Type(based on acquisition price)

Portfolio Summary

Total acquisition priceNo. of properties

75.35 billion yen

23 properties

Ratio of Tokyo area

Average appraisal
NOI yield

Residence
19.9%

Emphasizing
stability
52.3%
Logistics facility
32.3%

79.4%

5.1%

Office
33.3%

Hotel

Emphasizing
growthpotential
47.7%

14.5%

* Excludes the office building (Oak Minami-Azabu) sold on August 1, 2017.

Investment Policy■Preferred and concentrated investment in the Tokyo area
■Stabilization of revenue and incorporation of growth potential by diversifying asset types■Investment centering on middle-sized assets■Strategic investment in large-sized assets limited to the 5 central wards

41. Executive Highlights③ Changes in market price

The investment unit price (closing price) and sales volume of the Investment Corporation on the Tokyo Stock Exchange from the date of listing of the Investment
Corporation, April 20, 2016, to July 31, 2017 are as follows.
The index converts the TSE REIT Index on the date of listing of the Investment Corporation (1,887.75) as 98,300 yen, the closing price of the Investment Corporation’s
investment units on the same day.
Investment
price (yen)

1st FP

111,000
111,000
110,000
110,000
109,000
109,000
108,000
108,000
107,000
107,000
106,000
106,000
105,000
105,000
104,000
104,000
103,000
103,000
102,000
102,000
101,000
101,000
100,000
100,000
99,00099,00098,00098,00097,00097,00096,00096,00095,00095,00094,00094,00093,00093,00092,00092,00091,00091,00090,00090,00089,00089,00088,00088,00087,00087,00086,00086,00085,00085,00084,00084,000Apr.
2016

2nd FP

Turnover(units)

3rd FP

45,00045,000
Announcement of
2nd financial
results

Turnover
出来高
Closing price of Investment Corporation
本投資法人終値
TSE REIT Index
東証リート指数Asset
replacement ➁Announcement
Acquisition ofpreferential
negotiation rights
Notification ①

Acquisition ofpreferential
negotiation rights
Notification ➁Announcement of
1st FP financial
results

40,00040,000

Announcement ofissuance of new
investment units

35,00035,00030,00030,000July 31100,600

25,00025,00020,00020,000Date of issue of new investment units
Offer price: 96,720 yen

Assetreplacement ①
Announcement

15,00015,00010,00010,000

Notice concerning startof cumulative investment
unit investment by
officers and employees

5,000
5,000

0

May
2016

Jun.
2016

Jul.
2016

Aug.
2016

Sep.
2016

Oct.
2016

Nov.
2016

Dec.
2016

Jan.
2017

Feb.
2017

Mar.
2017

Apr.
2017

May
2017

Jun.
2017

Jul.
2017

5

2. 3rd Fiscal Period Topics6

2. 3rd Fiscal Period Topics① Overview of March 2017 Public Offering
Conducted public offering (PO) after about one year following listing. Strengthened and expanded the portfolio through asset
replacement and new asset acquisition
Offering highlights

1
2

Expansion of portfolio through acquisition
of “Tokyo area” x “middle-sized assets”
Expansion of asset size to 75.35 million yen

Pursuant of property acquisition by
utilizing the Sponsor Group’s “property
acquisition capability” x the asset manager’s“unique network”
Utilization of diversified property acquisition methods

3
4

Overview of Public Offering
Offering Format

Domestic Offering

Newly Issued Units

69,600 units (Including O.A.)

Amount of offering

6,731 million yen

Offer price

96,720 yen

Issuance resolution date

March 17, 2017

Price determination date

March 28, 2017

Payment date

April 4, 2017

Number of investment units issued andoutstanding after PO

414,300 units

Number of investment units held by theSponsor Group (ratio)

97,000 units (23.4%)

Speedy implementation of “valueenhancement” and “asset replacement”

Changes in the portfolio
End of 2nd FP(As of Jan. 31,
2017)

Active portfolio management

End of 3rd FP(As of Jul. 31,
2017*)

No. of properties

18 properties

23 properties

Pursuant of “growth potential” andsecurement of “stability” of cash distribution

Total acquisition
price

61.49 billion yen

75.35 billion yen

Implementation of measures to pursue maximizationof unitholders’ value

Average appraisal
NOI yield

5.2%

5.1%

Number of tenants

388

539

Ratio of Tokyo area

78.4%

79.4%

* Excludes the office building (Oak Minami-Azabu) sold on August 1, 2017.

7

2. 3rd Fiscal Period Topics➁ Overview of March 2017 Public Offering - Newly Acquired Properties -List of assets acquired

Use
Location

Emphasizing
stability
Logistics facility
Ichikawa, Chiba

Acquisition price

4,700 million yen

Acquisition route

Sponsor group

Tokorozawa
Logistics
Use

Emphasizing
stability
Logistics facility
Tokorozawa,
Saitama
1,300 million yen
Unique route ofAsset Manager

Baraki Logistics

Location
Acquisition price
Acquisition route

Use

Emphasizing
growth potential
OfficeLocation
Acquisition price
Acquisition route

Fukuoka, Fukuoka
2,286 million yen
Sponsor group

BEST WESTERNTokyo Nishikasai
UseEmphasizing
growth potential
Hotel
Edogawa Ward,Tokyo
3,827 million yen
Sponsor group

Hakata-eki East Place

Location
Acquisition price
Acquisition route
BEST WESTERN
Yokohama
Use

Use

Emphasizing
stability
Residence

Location

Kashiwa, Chiba

Location

Acquisition price
Acquisition route1,186 million yen
Warehousing

Acquisition price
Acquisition route

Urban Park Kashiwa

Emphasizing
growth potential
Hotel
Yokohama,
Kanagawa
3,248 million yen
Sponsor group

Red boxes indicate properties acquired using preferential negotiation rights
while blue boxes indicate properties acquired using the Asset Manager’s unique route.
82. 3rd Fiscal Period Topics③ Increase of Unitholders’ Value through Asset Replacements
Asset replacement ①

Asset replacement ②■Implemented asset replacement that contributes to increasing the stability of
portfolio income■Transferred Urban Park Yoyogikoen at a price exceeding the appraisal value by10%; Realized actualization of potential value of owned assets as well as gain on
sale■Implemented asset replacement aimed at increasing the quality of the portfolio(contributing to stabilizing revenue and improving the average building age)
■Searched for buyer for medium- to long-term ownership that would acknowledge
Oak Minami-Azabu’s potential asset value such as the Azabu location andscarcity value of the land

Transferred asset:
Urban Park Yoyogikoen

Sold a property with few units
and relatively large
fluctuations of revenue formore than the appraisal value
Acquisition price:
875 million yen(Appraisal value:
1,000 million yen)

Acquired property:
Urban Park Gokokuji
Acquired an single unit-typeapartment in central Tokyo withstrong demand and a large
number of units
Acquisition price:
1,460 million yen

Transfer price:
1,100 million yen

Total
number ofunits: 6

Transferred asset:
Minami-Azabu Building

Acquired property:
Baraki Logistics

With occupancy rate at 100%,sold at a price significantly
exceeding the appraisal value

Contributes to stability ofrevenue with long-term fixedterm building lease contracts
with 2 major companies

Acquisition price:
3,271 million yen(Appraisal value:
3,470 million yen)

Acquisition price:
4,700 million yen

Transfer price:
5,020 million yen

Total
number ofunits: 112

Buildingage:
31 years

Buildingage:
1.5 years* 49% of Oak Minami-Azabu was transferred in the 3rd Fiscal Period.
The remaining 51% of quasi-co-ownership interest was transferred in the 4th Fiscal
Period.

Asset replacement which increased stability of portfolio
income and materialized unrealized gain

Asset replacement which secured increase of portfolio quality
while actualizing potential value of owned assets

3rd FP: Returned gain on sale of 2 properties to unitholders as realized gain
4th FP: Return of gain on sale and retention as internal reserve of 110 million yen are scheduled
93. Performance of the 3rd Fiscal Period
Ended July 2017 and Future Measures103. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures① Change in Cash Distribution per Unit

Returned gain on sale of properties accompanying asset replacement to unitholders as cash distribution.
Scheduled to retain as internal reserves and secure stability of future cash distributions for the 4th Fiscal Period.
Change in CashDistribution per Unit

1st FP

2nd FP

3rd FP

4th FP

5th FP

Forecast

829 yen3,046 yen

4,340 yen

4,039 yen

2,750 yen

16.8%up

Actual968 yen

2.2%up

1.9%up3,112 yen

4,423 yen

Change in Cash Distribution per Unit (Actual) Change in Cash Distribution per Unit (Forecast)
4,423 yen
4,039 yenNormalized DPU = DPU when the impact of transient
factors (*) are removed

Impact of transient factors (*) on DPU

1,799

3,112 yen(*) Transient factors refer to the following:① Gain on sales of real estate properties② Equivalent of fixed property taxes, etc. that are notexpensed due to being included in the acquisition
cost of real estate, etc.
③ Of the expenses related to funding, arrangement
fees for investment unit issuance expenses andborrowings from syndicates of lenders④ Expenditures such as asset management fees
and taxes and public charges (non-deductible
consumption tax, etc.) which fluctuates as a resultof ① through ③⑤ Tax expenses for internal reserves as well as
income tax that increase with internal reserves,
etc.

448

1,409
+120

+6

-40

2,664

2,624

2,630

2nd FP actual

3rd FP actual

4th FP forecast

2,750 yen

2,750

5th FP forecast

113. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures② Cash Distribution Forecast and Factors for Changes

Change in cash distribution and factors for changes
Gain on sale ofUrban Park
Yoyogikoen andOak Minami-Azabu(49% quasi-coownership interest)
was returned

The number ofoperation days ofproperties
acquired in the 3rd
FP will increase.

-84

Expenses related torent businessincreased as
expensing of fixed
property taxes, etc.
for assets acquiredin the 1st FP began.

3,112

-376

Temporary fundprocurement
expenses in the
3rd FP will beabsent.

+105

+276

Internal reserve
will beimplemented toprepare for stable
cash distribution in
the future.

Tax expense willarise in line withinternal reserve.

The impact of thesale of Oak
Minami-Azabu(51% quasi-coownership interest)in the 4th FP will
be gone.

-289
-179

4,423

-267

Temporary fundprocurement
expenses in the
3rd FP will beabsent.

+2,169

-101

(yen)

-30

Sale of Oak MinamiAzabu (51% quasi-coownership) is
scheduled also for the
4th FP but the gain onsale will decrease
compared to the 3rd
FP.

4,039

-1,880

Expenses thatwere large at one
point will decrease
due to therecording of gainon sale

+130

+15
2,750

-297
+446

2nd FP
actualRent gain/loss perunit was diluted due
to issuance ofinvestment units andproperty acquisitionin the 3rd FP.

There was temporarilya large amount of fundprocurement expenses
with the issuance of
new investment units
and new borrowings.

Taxes andpublic dues

Nonoperating
expenses

Other rent
gain/loss

Gain on
sale

Other

The impact of internal
reserves scheduled to
be implemented in the
4th FP and theconcurrent burden ofincome tax, etc. will
be eliminated.

3rd FP
actualRent
gain/loss

Nonoperating
expensesGain onsale

Tax
expenseInternal
reserveOther

4th FP
forecast

Gain onsaleInternal
reserveadjustment

SGA

Other

5th FP
forecast

12

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures③ Occupancy Rate Status

Period-end occupancy rate: 97.3% Portfolio occupancy rate steadily increased as a result of leasing activities in collaboration withleasing agents based on leasing strategies which take into account the features of each property.
1st FP

2nd FP

3rd FP

100%

100%

99%

98.8%

98%

97.3%

97%

96.9%

96%
95%
94%

94.2%

93%
92%

91%

Apr.
2016

May
2016

Jun.
2016

Jul
2016

Aug.
2016

オフィス
Office

Sep.
2016

Oct.
2016

Nov.
2016

住宅
Residence

Dec.
2016

Jan.
2017

物流施設
Logistics

Feb.
2017

Mar.
2017

Apr.
2017

ホテル
Hotel

May
2017

Jun.
2017

[Office]
Maintained a level above 96% evenas the occupancy rate decreased
temporarily such as due toreplacements of tenants[Residence]
The occupancy rate decreased in
the middle of the 3rd FP but
recovered towards the end of theperiod; Further increase of theoccupancy rate is challenge thatmust be addressed[Logistics facility]
Occupancy is stable as many of thetenants have concluded fixed-termbuilding lease contracts

End of 3rd FP

90%[Total]The occupancy rate as of the end of
the 3rd FP is 97.3%, the highest
since the launch of the Investment
Corporation

Jul.
2017

[Hotel]Occupancy is 100% with full leaseto the hotel operator

全体
Total

facility

Apr.
2016

May
2016

Jun.
2016

Jul.
2016

Aug.
2016

Sep.
2016

Oct.
2016

Nov.
2016

Dec.
2016

Jan.
2017

Feb.
2017

Mar.
2017

Apr.
2017

May
2017

Jun.
2017

Jul.
2017

Office

95.8%

96.7%

95.8%

95.8%

96.4%

95.5%

95.5%

95.1%

94.5%

99.2%

98.9%

98.8%

97.2%

96.2%

98.8%

98.8%

Residence

92.9%

92.6%

93.8%

92.5%

91.0%

90.5%

90.7%

94.4%

94.5%

92.6%

94.4%

94.6%

93.7%

93.2%

93.8%

94.2%

Logistics facility
Hotel
Total

96.3%
100.0%
95.9%

96.3%
100.0%
96.1%

96.3%
100.0%
96.0%

96.3%
100.0%
95.9%

96.3%
100.0%
95.9%

96.3%
100.0%
95.6%

96.3%
100.0%
95.6%

96.3%
100.0%
95.9%

96.3%
100.0%
95.8%

96.3%
100.0%
96.8%

96.3%
100.0%
96.9%

96.3%
100.0%
96.9%

96.9%
100.0%
96.9%

96.9%
100.0%
96.6%

96.9%
100.0%
97.3%

96.9%
100.0%
97.3%

13

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures④ Office - Eliminating rent gap -Focused on elimination of rent gap: Decreased rent gap from 7.8% after the public offering (Apr. 2017) to 6.7%
at the end of the 3rd FP (end of Jul. 2017)
Elimination of the rent gap will continue to be a focus* Market rent refers to the median of each property's expected new contract rent (range) assessed as the end of the period by CBRE K.K., and rent gap refers to the disparity between themarket rent and each tenant's contract rent.

Status of Distribution of Rent Gap at End of Period (based on areas)
74.1%

100.0%

72.9%

76.6%

73.2%

Planning to pursue active negotiations for upward rent

<Rent gap of office buildings>

revision at the time of contract renewal.
80.0%

35.5%

30.9%

38.6%

42.0%

40.3%

36.1%

60.0%

40.0%

Planning to hold negotiations for upward rent revision
36.3%

considering comprehensively other leasing terms and37.2%

conditions, etc. at the time of contract renewal.

20.0%
25.9%

27.1%

23.4%

26.8%

第1期
1st
FP

第2期
2nd
FP

PO後PO
After

第3期
3rd
FP

Aim to extend tenancy and maintain current
rent levels by regularly contacting tenants toimprove their satisfaction level.

0.0%
～0%
～0%

0%～10%
0%～10%

10%～
10%～

Change in Rate of Increase of Rent with Leasing Contract Renewals(cases)8
6

増額件数
Increase

減額件数
Decrease

増額時の賃料上昇率
Rate of increaseof rentof rentof rent

30.0%

4

10.7%

5
10.5%

増額件数
Increase of rent

8

30.0%

減額件数
Decrease of rent

Rate of increase of rent
増額時の賃料上昇率

8

26.8%
20.0%

15.0%

4

10.0%

1

2

1

2

10.0%

0

-1

-2

0.0%
第2期2nd FP

12

6

2

第1期
1st
FP

Although 76.6% of all properties had rent gap as of April
2017, the figure decreased to 73.2% by the end of 3rd
FP due to measures such as soliciting new tenants,
raising rents upon tenant replacement, and revising rent
upward at the time of leasing contract renewal.

Change in Rate of Increase of Rent with Tenant Replacements

10
20.0%

16.1%

4

0

As of end of 1st FP: 7.6%
As of end of 2nd FP: 6.5%
As of April 2017:7.8%
As of end of 3rd FP: 6.7%

第3期
3rd
FP

* Increase or decrease of rent is determined by comparison to the rent before rent revision.
* The rate of increase of rent is calculated with the total rent of the tenant that revised their rent.

5.8%

-2

第1期
1st FP

第2期
2nd
FP

0.0%

第3期
3rd
FP

* Sections where tenants were replaced as of the end of the period (for the 1st FP, sections where there
were replacements during the period) are taken and the new rent is compared with the previous todetermine increase or decrease.
* Increase of rent is calculated with the total rent of the tenants that replaced the previous tenant.

14

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures⑤ Office - Eliminating rent gap -Effects of Eliminating the Rent Gap (Estimate)

Pie Chart of Rents

When the Rent Gap is Eliminated
Increase of rent
(estimate) *1
38,064 thousand yen

Hotel
13.39%

Increase of DPU(estimate) * 2

OfficeOffices comprise a relatively highpercentage in portfolio rents

36.46%

Approximately
1,608 million yen

Logistics
facility
31.57%

91 yenResidence
18.58%* 1: Regarding tenants with a rent gap of 10% or more in July 2017 (the end of the 3rd Fiscal
Period), conversion is made to market rent and the difference is multiplied by 6 in orderto calculate the estimated effect of increase of rent in one calculation period.
* 2: Calculated by dividing the total number of investment units issued and outstanding,
414,300, by the increase of rent (estimate) (rounded down to the indicated number). The
increase of rent expenses that would accompany an increase of rent is not taken into
consideration.

* The rent pie chart is prepared with the estimated rents for each asset type which arecalculated based on the annualized conversion of the rent for the month of July 2017
(multiplied by 12).
The following assumptions apply to hotel rents:
・Smile Hotel Namba/R&B Hotel Umeda East: Actual amount from Aug. 2016 to Jul. 2017
・BEST WESTERN Tokyo Nishikasai/BEST WESTERN Yokohama: Actual amount from
Apr. 2016 to Mar. 2017

Reduction of Expenses through Change of Power Supplier (Results)
Changed power suppliers at 8 office properties during the 3rd Fiscal Period

100.0%

Reduction*1

Increase of DPU

80.0%

*2

60.0%

43.6%

20 yen43.6%
reduction

40.0%* 1: Calculated by the ratio of year-on-year total of 6-months of basic charge and total of
6-months of monthly basic charge after changing power suppliers. Use charges are notincluded. Properties without year-on-year data have less than 6 months in their total.
* 2: Calculated by dividing the total number of investment units issued and outstanding,
414,300, by the amount of reduction of the monthly basic charge. Use charges are notincluded.

20.0%
0.0%
変更前
Beforechange変更後
Afterchange15

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures⑥ Office - Change in Rents of Medium-Sized Offices in the Tokyo Area -Compared to the relatively larger class of buildings with at least
2,000 tsubos of rental space, the rate of increase of the averagerent unit price of the class of buildings with less than 2,000 tsubosof rental space is trailing behind.
Many of the offices which the Investment Corporation owns belong
to the class with less than 2,000 tsubos of rental space.
Less than
貸床2000坪未満
2,000 tsubos ofrental spaceWith the increase of construction costs, the pay line increased andprofitability decreased. As a result, the number of newly suppliedbuildings decreased.
Supply/demand regarding space of medium-sized offices became tightwhile rent is on an upward trend.

The Investment Corporation’s office
本投資法人のオフィスポートフォリオ
portfolio

180
160

Construction costs, rent (2008 = 100)

103.0

At least
貸床2000坪以上
2,000 tsubos ofrental space

Change in Construction Costs/Newly Built Buildings/
Rent of Medium-Sized Offices

102.0

101.0

Number of newly
新規供給棟数supplied buildings

Construction
建築費（SRC造）
costs (SRC)

建築費（S造）Construction
costs (S)

賃料
Rent

Construction
建築費（RC造）
costs (RC)

30

25
140
120

20

100
15
80
60

10

40

5

Number of newly supplied buildings

Change in Average Rent Unit Price of Medium-Sized Offices

20

100.0
平成28年Q２
2Q 2016

平成28年Q３
3Q
2016平成28年Q４
4Q 2016

平成29年Q１
1Q
2017

平成29年Q２
2Q 2017002008 平成21年
2009 平成22年
2010 平成23年
2011 平成24年
2012 平成25年
2013 平成26年
2014 平成27年
2015 平成28年
2016
平成20年

Source: Jones Lang LaSalle, Inc.

Source: Jones Lang LaSalle, Inc.

* The average rent unit price of the Investment Corporation’s office portfolio is calculated by dividing the leased area (tsubos) by the total of monthly rent (including common fees) of each period and isindexed with the average rent unit price for 2Q of 2016 as 100.
* Grade-B offices in Tokyo’s 5 central wards are classified into those with at least 2,000 m 2 and those with less than 2,000 m 2 and are indexed with the average rent unit price for 2Q of 2016 as 100.
* Grade-B offices are office buildings in Tokyo’s 5 central wards with at least 5,000 m 2 of total floor area, at least 3,00 m 2 of lot area, at least 8 floors and built in 1982 or later.

16

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures⑦ Logistics facility/Hotel/Residence

Logistics facility

Hotel<Status of Diversification of Contact Renewal Periods(based on floor area)>
Parentheses indicate
number of cases

35%
30%
25%

28%

29%

(２)

(1)

19%

20%
15%

(1)

10%

12%

12%

(２)

(２)

5%
0%

4th
4期
FP

5th
5期
FP

6th
6期
FP

7th
7期
FP

8th
8期
FP

9th 10th FP
9期 10期以降
FP onward

・ No tenants with acontract ending or
subject to renewal inor before the 4th FP
ending January 2018
・Stable income isexpected as many of
the tenants have afixed-term building
lease contract<Ratios of fixed rent and floating rent>* Assumptions
The following assumptions apply to thecalculation of ratios:

Floating
rent
16%

・Smile Hotel Namba/R&B Hotel Umeda East:
Actual amount from Aug. 2016 to Jul. 2017
・BEST WESTERN Tokyo Nishikasai/BESTWESTERN Yokohama:
Actual amount from Apr. 2016 to Mar. 2017

・We will focus on
negotiating leaseconditions of tenant
whose contract will
be renewed in the
5th FP

Fixed rent
84%

Residence<Implementation of Strategic Renovation Work: Urban Park Azabujuban><Implementation of Strategic Renovation Work: Urban Park Kashiwa>

・Implemented renovation work with the purpose of maintaining
competitiveness and increasing rent

・Renovated kitchens, bathrooms and living rooms in order tocreate residential spaces that would appeal to potential tenants<Before renovation><After renovation><Before renovation><After renovation><After renovation>17

3. Performance of the 3rd Fiscal Period Ended July 2017 and Future Measures⑧ Financial Standing

Fixed interest rates as a measure against risk of fluctuating interest rates
Diversified repayment dates of borrowings as a measure against refinancing risks<Balance of borrowings><Diversification of repayment dates>② 390 million yen is scheduled to be① 990 million yen will have alreadybeen repaid in the 4th FP (ending
Jan. 2018)(million yen)repaid during the 4th FP (ending Jan.
2018) using consumption tax refunds

10,0007,690

Balance of borrowings
End of 3rd FP
ShorttermLongterm

Total

After
completion① and ②

Interest rate

Term

FP of therepayment
date

6,000
4,000

1,380

0 Base rate (Note 1)＋0.20%

1.0 years

7,300

7,300 Base rate (Note 1)＋0.30%

2.0 years

5th FP

7,300

7,300

0.364% (Note 2)

3.0 years

7th FP

7,300

7,300

0.483% (Note 2)

4.0 years

9th FP

7,300

7,300

0.625% (Note 2)

5.0 years

11th FP

2,400

2,400

0.530% (Note 2)

3.5 years

10th FP

4,150

4,150

0.710% (Note 2)

5.0 years

13th FP

1,000

1,000

0.530% (Note 2)

3.5 years

10th FP

600

600

0.530% (Note 2)

3.5 years

10th FP

38,73037,350(Note 1) JBA 1 month yen TIBOR(Note 2) The interest rates shown take into consideration the effects of interest rate swaps (fixing of interest rates).

390
(*2)

4,150

990
2,000
0

(*1)

4th
4期
FP

Mitsubishi UFJ Trust andBanking Corporation
7.2%
Sumitomo Mitsui Banking
Corporation
29.6%

Shinsei Bank, Ltd.
8.3%
Aozora Bank, Ltd.
8.3%
Mizuho Bank, Ltd.
25.1%

5th
5期
FP

6th
6期
FP

7th
7期
FP

8th
8期
FP

9th
9期
FP

10th
10期
FP

11th
11期
FP

12th
12期
FP

13th
13期
FP

*1: 990 million yen was repaid in installments in the 4th Fiscal Period*2: Early repayment of 390 million yen is scheduled to be made with consumption tax refunds.

<LTV (based on total assets)><Bank Formation>

Sumitomo Mitsui
Trust Bank, Ltd.
13.3%

7,300

4,000
4th FP
5th FP

Resona Bank, Ltd.
8.3%

7,300

7,300

8,000

LTV at
3rd FP end

Estimated total
LTV after
completion of① and ②

46.3%

45.4%

<Ratio of Fixed andFloating Interest Rate><End of 3rd FTP>
Floating
22.4%

Fixed 77.6%<Forecast after completionof ① and ②>
Floating
19.5%

Fixed 80.5%* LTV = Interest-bearing liabilities ÷ Total assets18

4. Future Initiatives

19

4. Future Initiatives① Points of Focus

Strategies for maximization of unitholders’ value

Points of Focus in and after the 4th Fiscal Period Elimination of the rent gap in the office portfolio
 Revision of lease conditions at logistics facilities

Internal
growth Improvement of the occupancy of residences
 Reduction of management expenses
 Maintaining and improving appeal to potential tenants through appropriate capital expenditure and repair(utilization of sponsor support)
 200 billion yen of assets by 2020

External
growth Growth of the asset size through utilization of sponsor support
 Enlargement of sourcing group through enhancement of sponsor group functions
 Further utilization of the Asset Manager’s unique network

Financialstrategy Continued deliberation on the acquisition of ratings
 Consideration of investment in mezzanine loan debt

 Search for new lenders204. Future Initiatives② Further Utilization of Sponsor Support - The Star Asia Group -About Star Asia
Star Asia is an independent investment and management group managing funds from investors who seek long-term investment, such as overseas university
funds, foundations and pension funds, by investing in assets related to real estate, etc. mainly in Japan. Investing flexibly through multiple approaches
including investment in bonds and shares in addition to real estate itself, Star Asia has invested in real estate-related assets totaling 306 billion yen (as of theend of December 2016) in Japan.
<Profile of the Founder>
Malcolm MacLean is a founder of Star Asia and currently serves as its
Managing Partner. He is also co-founder of Mercury Real Estate
Advisor LLC and formerly served as its Portfolio Manager and Head
Trader. He has an abundance of experience, including over 24 years inreal estate related asset investment and involvement in establishinglisted and non-listed real estate securities and real estate investment in
the U.S., Europe and Asia. Prior to that, he advised listed and non-listedcompanies on the issuance of stocks and bonds as well as M&As whileworking at the Real Estate Investment Banking Groups of Paine
Webber Incorporated and Kidder, Peabody & Co., Inc. (current UBSAG) and closed many transactions as the team leader of origination,
structuring and execution. MacLean studied economics at Cambridge
University in the U.K. and obtained a bachelor's degree in economics
and law from Trinity College in Hartford, Connecticut, U.S.A.
"Malcolm F. MacLean IV"
Managing Partner“Taro Masuyama”
Managing Partner

Taro Masuyama is a founder of Star Asia and currently serves as its
managing partner. He formerly served as Managing Director and Head of
the Asia-Pacific region’s Structured Credit Products and Japan Credit
Sales and Marketing at Merrill Lynch and managed the origination,
structuring, trading and marketing of all structured credit as well as fundproducts in the Asia-Pacific region in addition to sales marketing ofJapanese credit products. During his seven-year stint at Merrill Lynch, his
team was involved in securitizations with over 2.8 trillion yen in underlying
assets including securitizations of major Japanese banks’ loan portfoliosthat won several awards from various media. Before joining Merrill Lynch
in April 1999, he provided various structured balance sheet solutions
primarily to Japanese banks as Vice President of Global Credit Derivatives
at Bankers Trust. Prior to that, he was involved in the streamlining of
headquarters functions at various international companies as a consultant
at Andersen Consulting in Tokyo, Chicago and Los Angeles. Masuyama
obtained a bachelor’s degree from Waseda University and an MBA from
Columbia Business School.

Development of Construction Management Functions

A Construction Management department was established in the group to develop technological functions in construction. The details of support provided to
the Asset Manager is as follows.
・Advice that contributes to the maintenance and improvement of building value
・Advice concerning capital expenditure and repair plan proposals

・Advice on renewal work at owned properties that would strongly appeal to tenants
・Support for the formulation of repair plans that are more strategic
21

4. Future Initiatives③ Further Utilization of Sponsor Support - Enhancing Functions in the Star Asia Group Further expansion of business areas of the Star Asia Group
Establish a support system that supports the Investment Corporation even moreStar Asia GroupStar Asia
Management
LimitedStar Asia Japan
Special Situations
Fund II to IV

Star Asia
Capital Corp

Star Asia Asset
Advisors Co., Ltd.

 Same-boat investment
in Star Asia Investment
Corporation
 Provision of
warehousing functions

 Enhances functions
concerning real estate
investment
 Search for target projects
for Star Asia Investment
Corporation’s investment
 Management ofproperties in warehousing

Provision of property information toStar Asia Investment Corporation<Assets under management:
55.8 billion yen>
Logistics
facility
15.0%

Residence
8.7%

GSA Star Asia KK
 A joint company by the
GSA Group which
globally develops nextgeneration student
accommodations andthe Star Asia Group Participates fromdevelopment tooperation<Investment Areas>

Other
13.3%

Tokyo Area
86.7%

Lei’s
Umeda

Enhancement ofmanagement andoperation business
functions

Rendering of the
Bukyo-ku Hakusan
project (tentative)

Office45.8%

Retail
20.5%

Hotel
10.0%

Provision ofproperty information
based on sponsor
support contract

Matsubushi
Logistics

Funabashi
Nishiura
Logistics

Sep. 1, 2017
Joined the Sponsor Group*Star Asia Investment Management Co., Ltd.
Star Asia Investment Corporation“Aim for asset size of 200 billion yen by 2020”• The Sponsor Group is comprised of i) Star Asia Management Limited, ii) Star Asia Management Japan Ltd., iii) Star Asia Asset Management LLC, iv) Star Asia Group LLC, v) Star Asia Asset Advisors Co., Ltd., vi)
Malcolm F. MacLean IV, vii) Taro Masuyama, viii) investment target of funds in which Malcolm F. MacLean IV and Taro Masuyama make investment decisions (however, minority funding is excluded), and refers to (a)investment vehicles located in Japan owning or acquiring real estate or other investment assets and (b) investment vehicles owning or acquiring investment units of the Investment Corporation.

22

4. Future Initiatives④ Property Acquisition Routes
Pipeline properties *As of Aug. 1, 2017
Other

Tokyo area
Alphabet
Seven

Minami-Azabu
Shibuya
Building

Nishi-Shinjuku
Matsuya
Building

Asahi Building

Urban Park
Azabujuban

Urban Park
Daikanyama

Iwatsuki
Logistics

Yokohama
Logistics

Funabashi
Logistics

Shibuya MK
Building

Honmachibashi
Tower

Sponsor Group(Star Asia’s far-reaching
relationships)

BEST
WESTERN
Tokyo
Nishikasai

Warehousing

Urban Park
ShinYokohama

BEST
WESTERN
Yokohama

Urban Park
GokokujiTokorozawa
Logistics

Oak MinamiAzabu

Lei’s
Umeda

Matsubushi
Logistics

Bagus
Ikebukuro

R&B Hotel
Umeda East

Funabashi
Nishiura
Logistics

Nishikasai
HotelSmile Hotel
Namba

Funabashi
Logistics II

CradleRyokuchikoen

Urban
Park
Kashiwa

Provision of functions
by the Sponsor GroupUrban Park
Namba

Urban Park
Yoyogikoen

Major pipeline
properties

Hakata-eki
East Place

Hakata-eki
Higashi 113
Building

Asset Manager’s
unique route

Sold

Baraki
Logistics

About 55.8 billion yen(as of end of Jul. 2017)

Diligently searchedthrough the Asset Manager’s
unique route* There are no cases where the Investment
Corporation determined the acquisition of
the pipeline properties and there is no
guarantee that they will be incorporated by
the Investment Corporation in the future.

23

4. Future Initiatives⑤ Consideration of Investment in Mezzanine Loan Debt
Consideration of Investment in Mezzanine Loan Debt which Diversifies Opportunities to Procure Revenue andExpands Target Investments
Significance of Investment in Mezzanine Loan Debt
Diversification of income earning opportunities

 In the real estate market where there isintense competition to acquire realestate, mezzanine loans pose less risk
than equity investment such as
investment in silent partnerships
 Revenue exceeding the real estate

portfolio’s yield after depreciation issecured as an effective user of company
funds (current saving) and investment ismade upon inspection of estimatedrefund of principal and interest.

Ample experience of the Star Asia Group The Star Asia Group has ample

investment experience centering on realestate-related debts including mezzanine
loans and the Star Asia Group’s
experience will be utilized for theInvestment Corporation’s mezzanine loan
debt investment

Ownership ofproperties by SPCs

Boom, adjustment and slumpof the real estate market
Speedy investment in real estate, etc.

 The collateralized real estate must meet the The amount of investment should be fromCollateralized
real estate(Reference) Abundant Investment Track Record of the Sponsor Group’s
Investment in Real Estate-Related Debts<Approach to Investment>

investment standards* (location, asset type,
price, etc.) of the Investment Corporation.

Seniorloans

Investment that contributes to maximizing
unitholders’ value

Boom, adjustment and slumpof the real estate market
Investment centering
on real estate-related debts

The Investment Corporation’s Approach to
Mezzanine Loan Investment

around 300 to 500 million yen. In principle,
the investment balance must be within 5% of
total assets as of the end of the last fiscal
period.
 Upper limit of LTV is 85%

Mezzanine
loans
Equity* In principle, equity investors mustnot be an interested party to theInvestment Corporation.

* LTV =
(The amount which includes the mezzanine
loans the Investment Corporation targets
for investment and their senior credit) ÷(The appraisal value which the Investment
Corporation acquires)
 In principle, the return shall be above 4%
 The term shall be between 2 to 5 years
 Other: The same level of due diligence which

the Investment Corporation executes foracquisition of properties shall be
implemented for the collateralized realestate. When acquiring mezzanine loan
debts, the Investment Corporation’s due
diligence standards shall be used forevaluation to confirm that there are no
problems.

24

4. Future Initiatives⑥ Change of Management Guidelines (Sep. 13, 2017)
Added investment target area for residential assets in light of population trends
In the Osaka area, Nagoya area and Fukuoka area, included neighboring areas of Osaka City, Nagoya City and Fukuoka City

ReasonThere have existed several populated areas where stable demand for rental residences exists as well as plenty of properties thatmeet the qualifications for investment in the neighboring areas of Osaka City, Nagoya City and Fukuoka City from the past.
The neighboring areas of Osaka City, Nagoya City and Fukuoka City will be added to the investment target area of residences as it
has been confirmed that demand for rental residences will be maintained and stable operation can be expected in each area.
●Osaka area

●Nagoya area

●Fukuoka area

Specifically, the Investment Corporation will
invest in properties that are appropriate forinvestment by comprehensively considering thefollowing:
1. In national censuses, the ratio of commuters
to work and school in Osaka City, Nagoya
City and Fukuoka City must maintain aminimum level of around 20% to 30% of allcommuters to work and school.
2. The properties must be adjacent to or near
Osaka City, Nagoya City or Fukuoka Cityand the commute time to major areas must
be within about 30 minutes.
<Management Guidelines after Change>
Area classification

Use

Target area

Offices and retail facilities

Tokyo’s 23 wards and the cities of Kawasaki and Yokohama

Tokyo area

Residences, logistics
facilities and hotels

Tokyo, Kanagawa, Saitama and Chiba prefectures

Osaka area

All assets

Osaka City, Osaka (*1)

Nagoya area

All assets

Nagoya City, Aichi (*2)

Fukuoka area

All assets

Fukuoka City, Fukuoka (*3)

Sapporo area

All assets

Sapporo City, Hokkaido

Other governmentdesignated cities

All assets

Sendai City, Miyagi / Niigata City, Niigata / Kyoto City, Kyoto / Sakai City, Osaka /Kobe City, Hyogo / Hiroshima City, Hiroshima / Kitakyushu City, Fukuoka(*1) Residences and logistics facilities include
the neighboring areas of Osaka City, Osaka.
(*2) Residences and logistics facilities include
the neighboring areas of Nagoya City, Aichi.
(*3) Residences and logistics facilities include
the neighboring areas of Fukuoka City,
Fukuoka.

25

4. Performance of the 2nd Fiscal Period ended January 2017 and Future Measures⑦ Future Growth Strategy

 Future Growth Strategy: Expand asset size to 200 billion yen by 2020

Growth Phase

Stable Growth

2,000
1,800
Asset
replacement ①

1,600
At the time of listing
Additional property
acquisition worth
11.7 billion yen
Total: 61.4 billion

1,400
1,200
1,000
800

Transfer
Urban Park
Yoyogikoen

Asset of 437 billion
yen
Began operations withprivate placement

Acquisition
Urban Park
Gokokuji

Asset replacement ②＋
Acquisition of 6 properties

Transfer
Oak
Minami-Azabu

Acquisition goal
30 – 35 billion yen per year

Acquisition
Baraki
Logistics

600
400
200
平成26年1月 平成26年4月 平成26年7月 平成27年1月
私募時

上場時

第1期末

第2期末

平成29年

平成29年

2月1日

4月6日

本日時点

平成30年

平成31年

平成32年

Realization of speedy and steady external growthby sponsor support and asset management company's own route26

Appendix

27

Global Office Property Clock Q2 2017

Beijing, Washington, DC
New York
Tokyo Grade-A, Hong Kong, San Francisco
Chicago, Dallas

Shanghai

Prague, Boston, Toronto

Tokyo Grade-B, Frankfurt
Stockholm, Los Angeles
Paris, Sydney

Rental Growth
Slowing

Rental Values
Falling

Madrid, Berlin

Istanbul, Seoul, Houston

Milan, Amsterdam
Brussels

Rental Growth
Accelerating

Rental Values
Bottoming Out

LondonMexico City

Delhi

Warsaw, Sao Paulo
MumbaiMoscow, Johannesburg, Dubai, Zurich, Singapore
Americas EMEA Asia Pacific

The JLL Property Clocks SM
Source: JLL, July 2017

Based on rents for Grade A space in CBD or equivalent.
This data is based on material/sources that we believe to be reliable. While every effort has been made to ensure its accuracy,
we cannot offer any warranty that it contains no factual errors. Neither Jones Lang LaSalle nor any of its affiliates accept any
liability or responsibility for the accuracy or completeness of the information contained herein.

Grade A

Grade B

Area

Tokyo Central 5 Wards

GFA

30,000 sqm+ 5,000 sqm+

Floor Plate
FloorsBuilding Age

1,000 sqm+ 300 sqm+
20F+
8F+
1990 or later 1982 or later28

Performance of the 3rd Fiscal Period ended July 2017 and Future Measures
Change in Business Results
 Cash distribution per unit for the 3rd fiscal period was 4,423 yen (+1.9% compared to forecast)(Unit: million yen)

3rd FP (ended Jul.
2017) forecast
３rd FP (ended Comparison(disclosed on Mar.
July 2017) actual with forecast
17, 2017)

1st FP(ended July2016) actual

2nd FP (endedJan.
2017)actual

Operating revenue

1,859

2,017

3,135

3,211

+76

Office rent

634

802

806

822

+16

Residence rent

325

349

388

391

+3

Logistics rent

581

530

641

642

+0

Hotel rent

142

120

229

220

△9

Other

174

215

180

235

+55

-

-

888

898

+10

711

826

1,063

1,113

+49

Expenses related to rent business

568

624

804

836

+32

SGA

143

202

259

276

+17

1,147

1,190

2,071

2,098

+26

Non-operating income

0

0

-

0

+0

Non-operating expenses

812

117

272

264

△7

Ordinary income

335

1,073

1,798

1,833

＋34

Net income

333

1,072

1,798

1,832

＋34

968yen3,112yen

4,340yen

4,423yen＋83yen

NOI

1,538

1,636

1,733

1,763

＋29

Rent revenues/expenses

1,291

1,392

1,442

1,476

+33

Gain on sales of real estate
property
Operating expenses

Operating income

Cash distribution per unit

29Performance of the 3rd Fiscal Period ended July 2017 and Future Measures
Forecast

Due to materialization of unrealized gain from transfer of owned assets, cash distributions are forecast tobe; 4th FP: 4,039 yen(Unit: million yen)

3rd FP(ending July2017) actual(A)

4th FP(ending Jan
2018)
forecast (B)

5th FP(ending July
2019)
forecast (C)

3,211

3,131

2,395

Rent
revenues/expenses

2,312

2,352

2,395

Gain on sales of realestate properties

898

779

1,113

1,122

Expenses related torent business

836

832

870 ③

△3

③

+37

SGA

276

289

235 ④

+12

④

△53

2,098

2,009

1,289

△88

△719

0

-

-

△0

-

Non-operating
expenses

264

150

149 ⑤

△114

△0

Ordinary income

1,833

1,859

+25

△718

1

75

1,832

1,783

1,139

△48

△644

4,423yen

4,039yen

2,750yen△384yen△1,289yen

NOI

1,763

1,832

1,848

+69

+16

Rent
revenues/expenses

1,476

1,519

1,525

+43

+5

Operating revenue

Operating expenses

Operating income
Non-operating income

Income taxes
Net income
Cash distribution per
unit

Increase/decrease(B-A)

Increase/decrease
(C-B)

△79

△736

①

+39

①

+42

- ②

△119

②

△779

1,106

1,140
0 ⑥

+9

+74

△16

⑤

△74

30

Balance Sheets for the 3rd Fiscal Period ended July 31, 2017
(Unit: thousand yen)
2nd fiscal period(As of January 31, 2017)

3rd fiscal period(As of July 31, 2017)

2nd fiscal period(As of January 31, 2017)

Assets

3rd fiscal period(As of July 31, 2017)

Liabilities

Current assets

Current liabilities

Cash and deposits

1,839,594

1,598,847

Operating accounts payable

245,131

Cash and deposits in trust

2,659,211

3,239,091

Short-term loans payable

1,000,000-

Operating accounts receivable

50,08952,745Current portion of long-term loans payable-

8,680,000

Prepaid expenses

88,279108,945

Accounts payable - other

246,508

269,194

11

20

5,336

7,030

-

261,743

8,650-

4,645,837

5,261,393

Deferred tax assets
Consumption taxes receivable
Other
Total current assets
Non-current assets

Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation

844

1,023

Accrued consumption taxes

76,405

12,734

Advances received

319,180589,678

Income taxes payable

6,574

9,492

1,899,981

9,796,897

Long-term loans payable

29,200,000

30,050,000

Tenant leasehold and security deposits in trust

1,589,434

1,863,336

Other

Property, plant and equipment
Buildings in trust

Accrued expenses

Total current liabilities
20,317,871

25,006,453(490,008(764,163

19,827,862

24,242,289

9,606

9,606

Other

(61

(397

Total non-current liabilities

Structures in trust, net

9,545

9,209

Machinery and equipment in trust

6,282

11,270227,743

Non-current liabilities

Total liabilities

-

6,635

30,789,434

31,919,971

32,689,416

41,716,869

33,541,125

40,031,185-

Net assets

Accumulated depreciation

(137

(499

Machinery and equipment in trust, net

6,144

10,771

7,628

9,971

Accumulated depreciation(731(1,228 Allowance for temporary difference adjustment(26,197

Tools, furniture and fixtures in trust, net

6,896

8,743 Total capital deduction(26,197-

33,514,927

40,031,185

1,099,059

1,832,669

Tools, furniture and fixtures in trust

Land in trust

Construction in progress in trust
Total property, plant and equipment

39,208,659

50,426,286

2,161

-

59,061,270

74,697,300

Intangible assets

Unitholders’ equity
Unitholders’ capital
Capital deduction

Unitholders’ capital, net
Surplus
Unappropriated retained earnings (undisposed
loss)

Leasehold rights in trust

3,459,138

3,459,138

Total surplus

1,099,059

1,832,669

Total intangible assets

3,459,138

3,459,138

Total unitholders’ equity

34,613,987

41,863,855

Long-term prepaid expenses

127,156

146,256

Deferred gains or losses on hedges

60,13528,686

Lease and guarantee deposits

10,00010,000Total valuation and translation adjustments

Investments and other assets

Valuation and translation adjustments

Other

60,13535,321

Total investments and other assets

197,292

191,577

62,717,701

78,348,016

67,363,539

83,609,410

Total non-current assets
Total assets

Total net assets
Total liabilities and net assets

Amounts below the specified
unit are rounded down.
60,13528,686
34,674,123

41,892,541

67,363,539

83,609,410

31

Statement of Income for the 3rd Fiscal Period(From February 1, 2017 to July 31, 2017)(Unit: thousand yen)
2nd fiscal period
From: August 1, 2016
To: January 31, 2017
Operating revenue
Lease business revenue
Other lease business revenue
Gain on sales of real estate property
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody and administrative service fees
Directors’ compensations
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Investment unit issuance expenses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

3rd fiscal period
From: February 1, 2017
To: July 31, 2017

1,865,642
151,743
2,017,386

2,146,216
166,563898,6123,211,392

624,655
146,714
14,792
2,400
38,230826,793
1,190,592

836,576
189,465
16,9122,400
67,794
1,113,150
2,098,241

17
745
762

21
21

68,522
49,349117,871
1,073,483
1,073,483
847
21
868
1,072,615
26,444
1,099,059

82,120129,149
48,461
5,000
264,731
1,833,531
1,833,531
1,026
△8
1,018
1,832,513
155
1,832,669

Amounts below the specified unit are rounded down.

32Period-end Appraisal Value and Indicators
Acquisitio
n price① Period-end
book value②Appraisal value at
end of 3rd fiscal period

Unrealized gains(losses)②－①

Minami-Azabu Shibuya Building

2,973

3,003

3,070

66

Oak Minami-Azabu（51％）

1,668

1,744

2,560

815

Honmachibashi Tower

6,065

6,070

6,940

869

Nishi-Shinjuku Matsuya Building

1,763

1,816

2,370

553

Alphabet Seven

1,725

1,794

2,330

535

Shibuya MK Building

2,042

2,067

2,810

742

Property name

Period-end appraisal value:

84,450 million yen

Total book value:

78,156 million yen

OfficePeriod-end unrealized gains(losses):

6,293 million yen

Net assets per unit:

101,116 yen

Unrealized gains per unit:

15,191 yen

Hakata-eki Higashi 113 Building

1,885

1,957

2,020

62

NAV per unit (*1):

111,884 yen

Asahi Building

6,320

6,346

6,720

373

P/NAV per (*2):

0.90

Hakata-eki East place

2,286

2,313

2,410

96

subtotal

26,727

27,113

31,2304,116

Urban Park Azabujuban

2,045

2,087

2,170

82

Urban Park Daikanyama

6,315

6,429

7,310

880

Urban Park Shin-Yokohama

2,528

2,595

2,590

-5

Urban Park Namba

1,490

1,549

1,610

60

Urban Park Gokokuji

1,460

1,499

1,510

10

Urban Park Kashiwa

1,186

1,246

1,190

-56

subtotal

15,024

15,40816,380971

Iwatsuki Logistics

6,942

6,877

7,010

132

Yokohama Logistics

3,560

3,718

3,950

231

Funabashi Logistics

7,875

7,928

8,380

451

Baraki Logistics

4,700

4,738

4,890

151

(*1) NAV per unit = (Period-end net assets + Periodend unrealized gains – Total cash distribution) /Total number of investment units issued andoutstanding(*2) P/NAV＝Investment unit price / NAV per unit
(Investment unit price on July 31, 2017:
100,600 yen)

Residence

Logistics

Hotel

Tokoyozawa Logistics

1,300

1,354

1,400

45

subtotal

24,377

24,61725,630

1,012

R&B Hotel Umeda East

2,069

2,140

2,300

159

Smile Hotel Namba

1,750

1,734

1,750

15

Best Western Tokyo Nishi-kasai

3,827

3,868

3,890

21

Best Western Yokohama

3,248

3,272

3,270

-2

subtotal

10,894

11,016

11,210193

77,02278,15684,450

6,293

total

33

Portfolio List
* Excludes the office building (Oak Minami-Azabu) sold on August 1, 2017.

Portfolio list after the Initiatives
Property name

OfficeResidence

Logistics

Hotel

Location

Acquisition
price(million yen)Appraisalvalue(million yen)

Investment ratio

Appraisal NOI yield

OFC-01

Minami-Azabu Shibuya Building

Minato Ward, Tokyo

2,973

3,070

3.9%

4.9％

OFC-03

Honmachibashi Tower

Osaka City, Osaka

6,065

6,940

8.0%

5.1％

OFC-04

Nishi-Shinjuku Matsuya Building

Shibuya Ward, Tokyo

1,763

2,370

2.3%

6.3％

OFC-05Alphabet Seven

Minato Ward, Tokyo

1,725

2,330

2.3%

5.8％

OFC-06

Shibuya MK Building

Shibuya Ward, Tokyo

2,042

2,810

2.7%

5.6％

OFC-07

Hakata-eki Higashi 113 Building

Fukuoka City, Fukuoka

1,885

2,020

2.5%

5.8％

OFC-08Asahi Building

Yokohama City, Kanagawa

6,320

6,720

8.4%

4.8％

OFC-09Hakata-eki East Place

Fukuoka City, Fukuoka

2,286

2,410

3.0%

5.2％

RSC-01

Urban Park Azabujuban

Minato Ward, Tokyo

2,045

2,170

2.7%

4.4％

RSC-02

Urban Park Daikanyama

Shibuya Ward, Tokyo

6,315

7,310

8.4%

4.8％

RSC-04

Urban Park Shin-Yokohama

Yokohama City, Kanagawa

2,528

2,590

3.4%

4.8％

RSC-05

Urban Park Namba

Osaka City, Osaka

1,490

1,610

2.0%

5.4％

RSC-06

Urban Park Gokokuji

Toshima Ward, Tokyo

1,460

1,510

1.9%

5.2％

RSC-07

Urban Park Kashiwa

Kashiwa, Chiba

1,186

1,190

1.6%

5.1％

LGC-01

Iwatsuki Logistics

Saitama City, Saitama

6,942

7,010

9.2%

4.8％

LGC-02

Yokohama Logistics

Yokohama City, Kanagawa

3,560

3,950

4.7%

5.7％

LGC-03

Funabashi Logistics

Funabashi City, Chiba

7,875

8,380

10.5%

5.4％

LGC-04

Baraki Logistics

Ichikawa City, Chiba

4,700

4,890

6.2%

4.5％

LGC-05Tokorozawa Logistics

Tokorozawa City, Saitama

1,300

1,400

1.7%

6.0％

HTL-01R&B Hotel Umeda East

Osaka City, Osaka

2,069

2,300

2.7%

5.6％

HTL-02

Smile Hotel Namba

Osaka City, Osaka

1,750

1,750

2.3%

5.8％

HTL-03

BEST WESTERN Tokyo Nishi-kasai

Katsushika Ward, Tokyo

3,827

3,890

5.1%

4.8％

HTL-04

BEST WESTERN Yokohama

Yokohama City, Kanagawa

3,248

3,270

4.3%

4.8％

75,354

81,890100.0%

5.1％

Total

34

Portfolio List (at the end of the 3rd Fiscal Period)
Asset type

OfficeOfficeOfficeOfficeOfficeOfficeProperty nameMinami-Azabu Shibuya
Building

Honmachibashi Tower

Nishi-Shinjuku Matsuya
Building

Alphabet Seven

Shibuya MK Building

Hakata-eki Higashi 113
Building

Acquisition price

2,973 million yen

6,065 million yen

1.763 million yen

1,725 million yen

2,042 million yen

1,885 million yen

Appraisal value

3,070 million yen

6,940 million yen

2,370 million yen

2,330 million yen

2,810 million yen

2,020 million yen

Structure/Floors

SRC B1/7F

S/SRC B1/21F

SRC B1/9F

RC B1/6F

S 6F

SRC 8F

Location

Minato Ward, Tokyo

Osaka City, Osaka

Shibuya Ward, Tokyo

Minato Ward, Tokyo

Shibuya Ward, Tokyo

Fukuoka City, Fukuoka

2

Lot area

766.11 m2

1,274.37 m2

589.94 m2(surface right)

1,286.45 m2

620.42 m(of which 2.62 m2
leasehold)950.75 m2

Total floor areas

4,137.21 m2

15,407.83 m2

5,117.80 m2

4,132.80 m2

1,982.86 m2

4,888.70 m2(including 17.25 m2pump room)

Property Features●Located in Minami-Azabu, a●Located in the Yodoyabashi / ●Located in the Nishi●Located in the Akasaka●Located in the Shibuya●Located in the Hakata-ekiwell-known, high-class
Hommachi area, one of
Shinjuku area, which has aarea, one of central Tokyo’s area, one of Japan’s
higashi area where there isresidential area that is also
Osaka’s leading office districts.
high concentration of officeleading office/commercial
leading commercial
a high concentration ofhome to embassies of various ●Situated near facilities such asbuildings.
districts.
districts, the property has aoffice buildings.
countries.
strong appeal for fashion●In addition to access by●The property is expected to●Thanks to the renovatedthe Osaka Chamber ofand IT-related companies.
●In addition to access by train,
Commerce and Industry,train, the area is wellattract strong demand fromentrance hall and common●Following the completion of
the area is well served by bus
MyDome Osaka, and City
served by bus routes andaffiliated companies ofareas on each floor, it
routes and provides
Plaza Osaka, the area has aprovides convenient accesstenants of the TBS building, the Shibuya Station area
appeals to tenantconvenient access to various
high concentration of office
to various locations within
Akasaka Biz Tower, etc.
redevelopment project,companies from a widelocations within central Tokyo.
buildings.
central Tokyo.
further development isrange of fields.
●Thanks to the popularity of
expected going forward.
●The area is highly appealing to ●The residences on the upper●The property is expected to●With the completion of thethe area, locationcompanies in fashion, mass
floors of the building offer
attract strong demand fromconditions, etc., there is
Hakata Station area
media, and IT-related fields.
excellent views overlooking
affiliated companies ofalso strong demand for theredevelopment project,landmarks such as Osaka
tenants of large-scale
residential units of thefurther development is
Castle.
buildings located inproperty.
expected going forward.
Shinjuku sub-center or its
surrounding area

35

Portfolio List (at the end of the 3rd Fiscal Period)
Sold in the 3rd and 4th FPs
Asset type

OfficeOfficeOfficeResidence

Residence

Residence

Property name

Asahi Building

Hakata-eki
East Place

Oak Minami-Azabu（51%）

Urban Park Azabujuban

Urban Park Daikanyama

Urban Park ShinYokohama

Acquisition price

6,320 million yen

2,286 million yen

1,668 million yen

2,045 million yen

6,315 million yen

2,528 million yen

Appraisal value

6,720 million yen

2,410 million yen

2,560 million yen

2,170 million yen

7,310 million yen

2,590 million yen

Structure/Floors

S/SRCB2/12F

SRC 9FSRC B1/14F

SRC with slate roofing
B1/12F

RC, B1/3F
RC, B1/9F

S
B1/10F

Location

Yokohama City, Kanagawa

Fukuoka City, Fukuoka

Minato Ward, Tokyo

Minato Ward, Tokyo

Shibuya Ward, Tokyo

Yokohama City, Kanagawa

Lot area

1,906.86 m2

1,129.86 m2

2,471.14 m2

417.67 m2

2,469.06 m2

862.00 m2

2

2

10,454.93 m2(including 7.41 m2
storehouse)

2,564.94 m2

8,261.29 m2(for 2 buildings combined)

5,171.12 m2

Total floor areas

Property Features

12,353.83 m

6,243.13 m●Located in the Yokohama●Located in the Hakata●Located in Minami-Azabu, ●Located in Azabu-Juban,●Located in the Daikanyama
Station East area, which
Station West Exit area wherea well-known, high-classan area with an elegant
area, which produces thehas a higher
there is a high concentration ofresidential area that is also
image that also boasts
latest trends.
concentration of officescommercial and office buildings.
home to embassies of
popular appeal.
●In addition to a stately tiled
various countries.
●The floors can be subdivided into after the completion of●In addition to a stately tiled
facade, the property is fully
redevelopment projects in ●In addition to access bysmaller spaces, enabling thefacade, the property is fully
equipped with premium
front of the station.
building to flexibly accommodate
train, the area is wellequipped with premium
household facilities.
●Even more vitalization isdemand from branch offices ofserved by bus routes andhousehold facilities.
●Adjacent to the Shibuya andexpected for the Fukuoka
companies in various fields.
provides convenient access ●Adjacent to the Roppongi
Ebisu areas, which are(Hakata) area with theto various locations within●With the completion of thearea, a leading shopping
leading shopping spots instart of “Tenjin Big Bangcentral Tokyo.
Yokohama Station area
spot in central Tokyo.
central Tokyo.
Project” and the●The area is highly
redevelopment project and theextension of some
Excite Yokohama 22 project,appealing to companies inFukuoka City Subway
further development is expectedfashion, mass media, andlines.
going forward
IT-related fields.

●Located in the ShinYokohama area, which
provides convenienttransportation access.
●In addition to an elegant
facade, the building is fully
equipped with premium
household facilities.
●Access to central Tokyo will
improve considerably withthe opening of direct services
linking the Sagami and Tokyu
railway lines.

36

Portfolio List (at the end of the 3rd Fiscal Period)
Asset type

Residence

Residence

Residence

Logistics

Logistics

Logistics

Property nameUrban Park Namba

Urban Park Gokokuji

Urban Park Kasjowa

Iwatsuki Logistics

Yokohama Logistics

Funabashi Logistics

Acquisition price

1,490 million yen

1,460 million yen

1,186 million yen

6,942 million yen

3,560 million yen

7,875 million yen

Appraisal value

1,610 million yen

1,510 million yen

1,190 million yen

7,010 million yen

3,950 million yen

8,340 million yen

Structure/Floors

RC 14FRC B1F/5F

SRC B1F/8F

Steel construction, zincplated steel roofing, 5floorsRC 8F

Building 1: Steel construction, flat roof,
zinc-plated steel roofing, 8 floors
Building 2: Reinforced concrete
structure

Location

Osaka City, Osaka

Toshima Ward, Tokyo

Kashiwa City, Chiba

Saitama City, Saitama

Yokohama City,
Kanagawa

Funabashi City, Chiba

Lot area

670.39 m2

942.66m2

1,597.85m2

15,623.14 m2

10,565.95 m2

19,858.00 m2

Total floor areas

2,776.87 m2

2,451.72m2

4,243.71m2

29,729.72 m2

18,395.07 m2(including 263.33m2
break areas etc.)

38,871.45 m2（two buildings combined）

Property Features●Located near Namba, one of●Located in an area with
●Located in the Kashiwa●Located in the Iwatsuki●Located in the Yokohama ●Located in the Chiba bay
Osaka’s leading commercial
strong demand from various
area, a leading bed town inarea, which offers accessbay area, where there arearea, where there are many
areas.
tenant groups for single-type
Chiba, with an excellent
to the central Tokyo,
many logistics facilities.
logistics facilities.
residences, due to theaccess to Central Tokyo.
northern Kanto, and●In addition to an elegant facade,●Equipped with
●Equipped withlocation characteristics of
Tohoku areas.
●Further medium to longthe building is fully equipped withspecifications that offer a
specifications that offer ahaving concentration ofpremium household facilities.
term growth is expected in ●Equipped withhigh level of versatility,
high level of versatility,
universities and junior
the area, with completion of
specifications that offer asuch as vehicle berths,
such as vehicle berths,●The influx of population intocolleges as well as Toshima
various redevelopment
high level of versatility,
floor height, and column
floor height, and column
central Osaka due to the impact
ward having a relatively highplans in front of Kashiwa
such as the vehicle berths,
interval.
interval.
of strong in-bound demand has
ratio of single households.
Station.
floor height, and column●In addition to accessing●In addition to accessing
had a stabilizing effect oninterval.
occupancy rates.
Central Tokyo, it is possible
Central Tokyo, it is possible●The property is situated into access the wider Tokyo
to access the wider Tokyoa zone of Saitama City thatarea thanks to the opening
area thanks to the opening
offers incentives forof the Shinagawa section of of the Gaikan Expressway
logistics facilities andthe Shuto Expressway
therefore benefits fromCentral Circular Route.
considerable government
support.

37

Portfolio List (at the end of the 3rd Fiscal Period)
Asset type

Logistics

Logistics

Hotel

Hotel

Hotel

Hotel

Property nameBaraki Logistics

Tokorozawa Logistics

R&B Hotel Umeda
East

Smile Hotel Namba

Best Western Tokyo Nishikasai

Best Western
Yokohama

Acquisition price

4,700 million yen

1,300 million yen

2,069 million yen

1,750 million yen

3,287 million yen

3,248 million yen

Appraisal value

4,890 million yen

1,400 million yen

2,300 million yen

1,750 million yen

3,890 million yen

3,270 million yen

Structure/Floors

RC S 5F

S 2F

RC 9F

S 9F

SRC B1F/9F

SRC B1F/9F

Location

Ichikawa City, Chiba

Tokorozawa City, Saitama

Osaka City, Osaka

Osaka City, Osaka

Edogawa Ward, Tokyo

Yokohama City,
Kanagawa

Lot area

6,242.76m2

8,645.63m2

730.26 m2

285.28 m2

1,418.00m2

782.66m2

Total floor areas

12,471.50 m2

5,994.75 m2

3,945.65 m2

1,711.42 m2

5,293.88m2

4,686.09m2

Property Features●A multi-tenant logistics facility located●A multi-tenant logistics facility used ●Located near Umeda, ●Located near Umeda, one of ●A business hotel located●A business hotel locatednear the Wangan Ichikawa IC of thealso as a warehouse, locatedone of Osaka’s leading Osaka’s leading office andwithin approx. a 2-minute walk within approx. 4-minute walkEast Kantō Expressway.
around 8.7 km from theoffice and commercial
commercial areas.
from Nishikasai Station of
from “Tsurumi” Station on the
Tokorozawa IC on the Kan-Etsu
areas.
Tokyo Metro Tozai Line.
JR Keihin Tohoku Line and a●Enjoys good access to Central Tokyo●In addition to excellent accessExpressway.
3-minute walk from “Keikyu●With over 200 single●Excellent location
as well as the consumption areas
to Namba, located near
Tsurumi” Station on the●Good access to Central Tokyo,
throughout Chiba, allowing tenants tooccupancy rooms, theOsaka Dome, addressing
characteristics that can attract
Keihin Kyuko Line.
respond to the needs of e-commerce
and also capable of covering ahotel is able tomultiple business- anda fair amount of Tokyo●Excellent location
operators.
wide range of destinations foraccommodate
tourism-based demand.
Disneyland-related leisureconsumption in the Tokyosignificant businesscharacteristics that can attract●Located within approx. 5-minute walk
●Due to the impact of strong in- travelers, as it stands in a
Metropolitan area with the opening
and tourism-based
straight-line distance ofboth business travelers andfrom Futamata-Shinmachi station on
bound demand in Osaka,of the Gaikan Expressway and thedemand.
approx. 4 km away fromleisure travelers, as its
the JR Keiyo Line, allowing for
further hotel demand isMetropolitan Inter-City
Tokyo Disneyland.
location has good access to●Due to the impact of
securement of employees.
expected.
Expressway.
the major areas in Kanagawa●A hotel with great appeal to astrong in-bound●Property with highly versatileincluding Yokohama anddemand in Osaka,
variety of guests with various
specifications, including one passenger ●Property with highly versatile
Kawasaki as well as tospecifications, including two freight
further hotel demand is
types of guest rooms
elevator, two freight elevators, a floor
Haneda Airport.
elevators, a floor height of approx.
expected.
depending on the intended
height of approx. 6.5 m and a pillar●A hotel with great appeal to a
5.5 m-6.0 m, and a pillar span ofuse.
span of approx. 9 m-11 m.
approx. 9.5 m.
variety of guests with various●Fully occupied by foreign companies
types of guest rooms
and foreign 3PL companies.
depending on the intended
use.

38

Balance of Payments of Individual Properties for the 3rd Fiscal Period(Unit: thousand yen)
OFC-01

OFC-02

OFC-08

OFC-09MinamiAzabu
Shibuya
Building

Oak
MinamiAzabu

Asahi
Building

Hakata-eki
East Place

101,065

90,483

213,184

85,242

74,40465,20876,510206,673

59,678972,452

80,932

84,981

187,799

77,05569,58457,02565,901

190,21053,360866,851

20,133

5,501

25,385

8,186

4,819

8,183

10,60816,463

6,318

105,600

36,98040,97359,96833,246

16,66819,881

28,54756,937

12,767305,882

PM fees

5,567

10,40814,480

6,544

4,917

4,518

7,379

15,483

5,008

74,308Trust fees

400

332

400

400

400

350

350

400

256

3,288

Utilities expenses

6,510

9,571

21,466

6,624

4,717

3,388

6,726

17,394

4,407

80,806

Insurance expenses

126

165

385

137

107

46

133

382

117

1,602

Repair expenses

13,847

1,924

1,268

998

593

5,024

6,164

3,728

393

33,943

Taxes and public dues

4,575

16,867

19,683

3,222

5,768

4,192

5,073

16,02146

75,452

Other

5,863

1,705

2,284

15,319

163

2,360

2,719

3,526

2,538

36,479NOI

64,17449,509153,216

51,99557,73645,32747,963

149,736

46,910666,570

Depreciation

10,2696,734

44,813

6,078

2,909

2,523

5,463

21,633

4,228

104,655

Income from real estate
property leasing

53,904

42,775

108,40245,91654,82642,80342,500128,103

42,682561,914

Capital expenditures

14,647

14,293

1,066

34,831

36,591

1,781

5,125

11,304

2,473

122,115

NCF

49,52735,216

152,149

17,164

21,14443,54542,838138,43144,436544,454

Total of revenue realestate lease
Lease businessrevenue
Other lease businessrevenue
Total of expenses - realestate lease

OFC-03

OFC-04

OFC-05

OFC-06

OFC-07

NishiHonmachiba Shinjuku
shi Tower
Matsuya
Building

Alphabet
Seven

Shibuya Hakata-eki
MKHigashi 113
Building
Building

OfficeTotal

39

Balance of Payments of Individual Properties for the 3rd Fiscal Period(Unit: thousand yen)
RSC-01

RSC-02

RSC-04

RSC-05

RSC-06

RSC-07

Urban Park
Azabujuban

Urban Park
Daikanyama

Urban Park
ShinYokohama

Urban Park
Namba

Urban Park
GokokujiUrban Park
Kashiwa

Total of revenue real estate
lease

53,167

186,978

69,13447,894

51,274

23,527431,977

Lease business revenue

52,006

176,966

67,53745,36746,08722,488410,453

1,161

10,012

1,596

2,527

5,186

1,039

21,524

11,35638,14421,008

14,205

18,331

3,446

106,494

PM fees

2,067

8,640

4,653

2,531

3,795

1,287

22,976

Trust fees

350

350

350

350

400

224

2,024

Utilities expenses

503

4,351

791

505

2,221

413

8,786

Insurance expenses

62

211

169

68

57

59

629

Repair expenses

4,150

6,703

3,639

2,856

5,637

687

23,675

Taxes and public dues

2,738

10,836

4,721

2,880

35

12

21,225

Other

1,484

7,051

6,681

5,014

6,183

761

27,176

NOI

41,810148,833

48,12533,68932,94320,080325,483

Depreciation

3,995

12,095

16,442

7,494

3,932

4,133

48,093

Income from real estate
property leasing

37,815

136,738

31,682

26,19429,011

15,946277,389

Capital expenditures

1,338

-

-

-

2,986

3,974

8,299

NCF

40,472

148,833

48,12533,68929,956

16,106317,184

Other lease businessrevenue
Total of expenses - real estatelease

Residence
Total

40

Balance of Payments of Individual Properties for the 3rd Fiscal Period(Unit: thousand yen)

Total of revenue realestate lease
Lease businessrevenue
Other lease businessrevenue
Total of expenses - realestate lease

LGC-01

LGC-02

LGC-03

LGC-04

LGC-05

Iwatsuki
Logistics

Yokohama
Logistics

Funabashi
Logistics

Baraki
Logistics

Tokorozawa
Logistics

Logistics facility
Total

200,448

255,139

687,009

187,713238,087

648,360

12,734

17,05138,64932,91953,054

122,538

PM fees

5,501

11,30824,224

Trust fees

350

600

1,998

12,734

14,84836,987

Utilities expenses
Insurance expenses
Repair expenses

291
-

Not
disclosed

423
1,927

Not
disclosed

Not
disclosed

1,062
3,424

14,042

23,69951,836

-

247

3,004

NOI

167,528

202,084

564,471

Depreciation

46,43426,353

100,238

Income from real estate
property leasing

121,093

175,731464,232-

5,091

49,689Taxes and public dues
Other

Capital expenditures

NCF
167,528
196,992（※）テナントからの開示に関する同意が得られていないため、非開示としています。

514,78141

Balance of Payments of Individual Properties for the 3rd Fiscal Period(Unit: thousand yen)
HTL-01

HTL-02

R&B Hotel
Umeda East

Smile Hotel
Namba

Total of revenue real estate lease

64,29750,81954,84751,375

221,339

2,312,779

Lease business revenue

64,29750,81954,05851,375220,550

2,146,216

-

-

789

-

789

166,563

6,964

3,683

1,798

1,739

14,185549,100

PM fees

742

660

775

775

2,952

124,462

Trust fees

350

550

256

256

1,412

8,724

Utilities expenses

10

-

-

-

10

126,591

Insurance expenses

121

57

87

74

341

3,635

Repair expenses

329

-

671

624

1,624

62,667

5,383

2,303

4

4

7,694

156,208

27

112

4

5

149

66,810NOI

57,33347,13653,04849,635

207,154

1,763,678

Depreciation

9,080

11,882

6,285

7,239

34,488287,475

Income from real estate property
leasing

48,25335,253

46,762

42,396

172,665

1,476,202

312

1,780

7,922

-

10,015

190,11957,02045,35645,12549,635

197,138

1,573,558

Other lease business revenue
Total of expenses - real estate lease

Taxes and public dues
Other

Capital expenditures
NCF

HTL-03

HTL-04

Best WesternBest WesternTokyo
Yokohama
Nishi-kasai

Hotel
Total

Total

42

Organizational Framework of Asset Manager(As of the End of 3rd Fiscal Period)
President and CEO
Atsushi Kato

Chief Compliance
Officer
Kazuaki Fujii

After entering Nomura Real
Estate Development Co.,
Ltd., he worked for Showa
Ota Ernst & Young, andthen entered Nomura
Securities Co, Ltd. Afterbeing involved in the asset
finance business including
support in establishing JREITs, he joined Star Asia
Investment Management
Co., Ltd.

Investment Management Division
Director and CIO
Yoshikuni Taguchi

Manager(Male)

Manager(Male)
Manager(Female)Manager(Female)Real Estate Appraiser
Joined Star Asia Investment Management Co., Ltd. afterworking at Urban Development Real Estate Appraisers,
Ken Corporation Ltd., Canal Investment Trust Co., Ltd.
(currently, Heiwa Real Estate Asset Management Co.,
Ltd.) and Prudential Real Estate Investors (Japan) K.K.
(currently, PGIM Real Estate (Japan) Ltd.)
Assistant Real Estate Appraiser
Was in charge of the acquisition of a total of over 100 billion yen in properties,
asset management (AM) and finance tasks at a foreign-affiliated real estate
investment company, prior to which he supervised acquisitions, AM and financetasks at a REIT operating company.
Was involved in asset management of a total of over 100 billion yen at an
operating company for a leading logistics REIT, prior to which he was in chargeof acquisitions, AM and finance tasks at a foreign-affiliated real estate investmentcompany.
As a member of a startup team for a property management (PM) company, she
was involved in PM tasks for office and commercial facilities with a total value ofover 30 billion yen entrusted by private placement funds, individual owners, etc.
Played an active role as a leader of AM middle-back tasks using experience fromformer duties,
Was in charge of cash management, leasing management, accounting,construction management tasks, etc. at an operating company of a leading REIT.
Is in charge of AM middle-back tasks using experience from former duties.

Star Asia Management Japan Limited（Construction Management department）
Tatsuji Ishii

Worked at Mizuho FG
and its affiliatecompanies. Holds
experience in a broad
range of on-site auditing,including theme audits
on risk management,internal control,
compliance and others.

Finance Management Division
Director and CFO
Toru Sugihara

Manager(Female)Manager(Male)

Manager(Female)Associate(Female)After being involved in the investment banking
business at Nomura Securities Co., Ltd., heworked at Barclays Securities Japan Limited
and Kenedix, Inc. and joined Star Asia
Management Japan, Ltd.

Involved in IR, management planning tasks, etc. in the general
construction industry. Using experience obtained thereafter in startup
work for an overseas base of a different business, is currently in chargeof general financial management tasks while primarily working in IR.
Certified Public Accountant After gaining experience as a member of anaudit team of a REIT at an accounting office, he was involved in tasks ofthe planning department at a leading investment advisory company.
Using his expert knowledge, he also contributes to the formulation ofmanagement strategies.
After gaining experience in conducting duties at a leading bank andforeign-affiliated financial institute, gained experience in PM tasks forover 50 properties in total of REITs, private placement and individualowners at a leading PM company, and using such experience, conducts
property cash management in cooperation with the Investment
Management Division. She also contributes in other administrative tasks.
In charge of a wide range of work as an assistant, using abundant
experience from various duties.

the functions at foreign real estate funds by hiring personnel who were in charge of ➀ implementing capital
expenditure and making repair plans with an aim to enhance value and maintain functions upon acquiring real estateand ② supervising construction work such as renewal and repair work after the acquisition of real estate

43

Status of Unitholders at the End of 3rd Fiscal Period ended July 2017
■Number of Investment Units by Unitholder Type:■List of major unitholders (Top 10)

Total 414,300 units
2.20%
Category
20.10%
46.50%
14.40%
16.80%

Individual

Financial institution

Domestic corporation

Foreign

Individual
Financial
institution
Domestic
corporation
Foreign
Securities
company

No. ofinvestment
units
46.5% 192,602

Unitholder name

Ratio

16.8%

69,70414.4%

59,641

20.1%

83,275

2.2%

9,078

Number ofinvestment
units

Unitholding
ratio

１

Star Asia Capital Japan GK

39,480

9.5％

２

Japan Trustee Services Bank, Ltd(Trust account)

23,005

5.6％

３

The Master Trust Bank of Japan ,Ltd.
(Trust account)

15,104

3.6％

4STAR ASIA CAPITAL Ⅰ LLC

14,325

3.5％

4STAR ASIA CAPITAL Ⅱ LLC

14,325

3.5％

4STAR ASIA CAPITAL Ⅲ LLC

14,325

3.5％

4STAR ASIA CAPITAL Ⅳ LLC

14,325

3.5%

８

Trust & Custody Services Bank, Ltd.
(Securities investment trust account)

11,9002.9%

９

UBS Securities LLC - HFS
Customer Segregated Account

9,972

2.4％

10

The Nomura Trust and Banking Co., Ltd.
(Trust account)

9,403

2.3%

166,164

40.1％

Securities company■Number of Unitholders by Unitholder Type:
Total 17,048
1.80%

0.50%

0.20%

0.20%
Category

97.40%

Individual

Financial institutions

Domestic corporation Foreign
Securities company

Individual
Financial
institutions
Domestic
corporation
Foreign
Securities
companyRatio

No. ofpersons/e
ntities

97.4% 16,608
0.2%

28

1.8%

306

0.5%

80

0.2%

26

Total

* The ratio of investment units held expressed as a percentage of total number of investment units
issued and outstanding is rounded to the nearest first decimal place.
* Japan CRE Securitization Series 1 GK has changed its name to Star Asia Capital Japan GK.
* Star Asia Capital Japan and Star Asia Capital I-IV LLC are the sponsor group companies.

44

■Disclaimer
This document has been prepared solely for the purpose of providing information, and not for offering,
soliciting or selling any specific product.

We have taken all possible measures to ensure the accuracy of the information provided in this document,
but do not guarantee its correctness or accuracy. Furthermore, please note that such information may bechanged or deleted without any prior notice.
Copying, reprinting or any other use of the contents of this document without prior approval is strictly
prohibited. This document includes charts, graphs, data, etc. publicized by third parties. It also includes
descriptions related to analysis, judgments and other opinions by Star Asia Investment Management Co.,Ltd.

■ Contact regarding this material
Toru Sugihara, Director and CFO (General Manager of Finance Management Department)(Contact person) Akiko Kanno, Finance Management Department
Star Asia Investment Management Co., Ltd.
Atago Green Hills Mori Tower 18F, 2-5-1, Atago, Minato-ku, Tokyo 105-6218
Tel: +81-3-5425-1340

45