"Financial Results for the 6th Fiscal Period Ended January 2019"

Star Asia Investment Corporation(Securities CODE 3468)
Star Asia Investment Management0Contents

1. Executive summary

2

Characteristics of Star Asia Investment Corporation (SAR)

2. Actual and forecasted distribution

4

Portfolio developed with diversified assets located mainly in the Tokyo Area (Note 2)

10

Pursuit of internal growth by the Asset Manager with abundant experience andknow-how as well as external growth based on asset managed performed by theStar Asia Group

1. A diversified REIT
2. Steady growth

3. Status of implementation of active management

3. Initiatives focusing on unitholder value
4. Operating results forthe 6th fiscal period ended January 2019

Constant, “out-of-the-box” active management

17
Investment policy

5. Future Initiatives

23

6. Appendix

32

7. Notes

59

Prioritized, focusedinvestment in theTokyo Area
Investment ratio of 70%
of higher in theTokyo Area

Achieving income
stability and growththroughdiversification ofasset type

Investment primarily
in middle-size
assets (Note 2)

1

1. Executive summary2

1. Executive summary⚫ Upward revision of distributions for the 6th fiscal period ended January 2019:

3,720 yen (+140 yen, up 3.9% compared to forecast)*Accumulated 37 million yen as internal reserves among the effect of the increase in revenue and reduction of expenses to stabilize distribution

Distribution⚫ Upward revision of forecasted distributions for the 7th fiscal period ending July 2019:3,500 yen (+100 yen, up 2.9% compared to previous forecast)⚫ Forecasted distributions for the 8th fiscal period ending January 2020: 2,770 yen⚫ Occupancy rate as of the end of the 6th fiscal period (overall average):

Internal
growth

98.1% (+0.4% from the end of the 5th fiscal period)
11 cases (8 new cases+3 renewal cases)⚫ Office:

Focusing on the elimination of rent gap rent increase (revision)⚫ Residence:

Realized increase in monthly unit rent per tsubo (+15 yen~+110 yen) for 7 out of the 8 properties⚫ Expended asset size through property acquisition accompanying public offering: 102.3 billion yen(1.6 times the asset size as of listing/based on acquisition price/as of March 15, 2019)

External
growth⚫ Implementation of asset replacement realizing 1,020 million yen of total gain on sale (including expected amount)(total of 3rd and 4th)
⚫ Implementation of silent partnership investment and acquisition of preferential negotiation rights associated with such investment (3properties/total preferential negotiation price: 8,450 million yen)
⚫ Implementation of mezzanine loan debt investment for 2 projects<Logistics facility>
Measures against rent decrease due to leasing/rent holiday (*) associated with tenant departure

Futurekey issues<Office>
Improvement in occupancy rate accompanying rent increase in response to tenant departure at Higashi Kobe Center Building<Residence>
Pursuit of improvement and stabilization of occupancy rate/continuous rent increase*Exemption of payment of rent for a specific month during the period of lease agreement（※）賃貸借契約期間中の特定の月の賃料の支払いを免除することをいいます。

3

2. Actual and forecasted distribution

4

2. Actual and forecasted distribution (1)Change in actual distribution and distribution excluding transient factors
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP forecast

8th FP forecast

Forecasted
distribution

829 yen3,046 yen

4,340 yen

4,039 yen

2,750 yen

3,580 yen

3,500 yen

2,770 yen

Actualdistribution

968 yen

3,112 yen

4,423 yen

4,077 yen

2,773 yen

3,720 yen

1stasset replacement

2nd
asset replacement

3rd
asset replacement

4th
asset replacement

Gain on sale:
150 million yen

Total gain on sale:
1,510 million yen

Total gain on sale
(expected amount):
820 million yen

Gain on sale:
190 million yen

Total gain on sale

2.69 billion yen(including expected amount)
Transfer
Urban Park
Yoyogikoen

Acquisition
Urban Park
GokokujiTransfer
Oak
Minami-Azabu

Acquisition
Baraki
Logistics

Transfer
Hakata-eki
Higashi 113
Building

Acquisition
Hotel WBF
FukuokaTenjin Minami

Transfer
Urban Park
Shin-Yokohama

Acquisition
GlansitAkihabaraInternal reserves
113 million yen
Internal reserves
37 million yen

Average DPU
since listing(Note 3):

3,167 yen

1,799 yen

1,313 yen

811 yen448 yen2,664 yen

2,624 yen

2,764 yen

2,931 yen

2nd FP
actual第2期実績

3rd FP
actual第3期実績

4th FP
actual第4期実績

5th FP
actual第5期実績

2,909 yen

652 yen2,848 yen

108 yen2,662 yen

968 yen-158 yen
1st FP
actual
第1期実績

Cash distribution per unit after adjustment

6th FP

7th FP

8th FP

actual第6期実績

forecast
第7期予想

forecast
第8期予想

Cash distribution per unit with transient factors

5

2. Actual and forecasted distribution (2)Factors for increase/decrease compared with forecast/actual results for the 6th fiscal period ended January 2019
Net income was 2,049 million yen (+5.9% compared to initial forecast) and distribution per unit was 3,720 yen (+3.9% compared to initial forecast) in
the 6th fiscal period ended January 2019
Accumulated 37 million yen as internal reserves to stabilize distribution(Unit: million yen)
6th FP(ended Jan. 2019)
forecast*

Lease business revenue

6th FP(ended Jan. 2019)
actualComparison with
forecast

Factors forthe increase/decrease

3,196

3,224

+27

1,091

1,104

+12

Residence rent

443

458

+14

Logistics rent

912

912

+0

Hotel rent

450

447

-3

Other

298

302

+3

715

678

-36

2,481

2,545

+63

415

409

-6

2,065

2,135

+70

Mezzanine

18

22

+3

Gain on sale of real estate property

579

598

+18

SGA

365

349

-16

2,298

2,406

+108

Non-operating income

-

0

+0

Non-operating expenses

361

333

-27

Ordinary income

1,936

2,073

+136

Net income

1,936

2,049

+113

Cash distribution per unit

3,580 yen

3,720 yen+140 yen

FFO per unit

3,276 yen

3,440 yen+164 yen

113

151

+37

Office rent

Expenses related to rent business (Depreciation is excluded)
NOI
Depreciation
Rent revenues/expenses

Operating income

Balance of Internal reserves<Lease business revenues> +27
Office:Occupancy of vacant spaces at Nishi-Shinjuku
Matsuya Building at an early stage
Residence:
Improvement in occupancy rate exceeding
forecast as a whole/increase in revenue fromrenewal fees
Hotel: Decrease in floating rent
Decrease in revenue from utilities expenses
Increase in revenue from restoration work fees,
etc.

<Expenses related to rent business> -36
Decrease in utilities expenses
Decrease in repair expenses
Decrease in expenses for leasing and sales
activities<SGA> -16
Increase in asset management fee
Decrease in asset custody and administrative
service fees
Decrease in taxes and public dues, etc.

<Non-operating expenses> -27
Decrease in investment unit issuance expenses

Decrease in borrowing related expenses, etc.

*Announced in 5th FP closing of accounting report (September 13, 2018 )6

2. Actual and forecasted distribution (3)Forecast of business results for the 7th fiscal period ending July 2019 and 8th fiscal period ending January 2020
(Unit: million yen)
Initial forecast forthe 7th FP ending
July 2019(A)

Current forecast
for the 7th FP
ending July 2019
(B)

Lease business revenue

3,263

3,268

(1)

+4 Factors for increase/decrease in 7th FP

Expenses related to rent
business(Depreciation is excluded)

785

793

(2)

+7 (1) Lease business revenues +4

2,478

2,475

-2

• Review of rent revenue, revenue fromutilities expenses, etc.

427

419

-8

• Increase due to acquisition of Amusement
Media Gakuin Shinkan

426

2,050

2,055

+5

• Incurrence of revenue from cancellation
penalty fees at logistics facilities

1,959

-96

• Revision of expected floating rent ofhotels

-

-422

20

+0

7

+4

NOI
Depreciation
Rent revenues/expenses

Increase/decrease
(B-A)

418

422

+4

Mezzanine

18

20

+2

-

2

+2

SGA

Forecast for the
8th FP ending
January 2020(C)

Forecast for the 8th FP
Forecast for the 7th FP
Increase/decrease

356

345

(3)

-10

(2) Expenses related to rent business +7• Review of repair expenses, utilities
expenses, etc.
• Increase due to acquisition of Amusement
Media Gakuin Shinkan

3,160

(1)

-107 Factors for increase/decrease in 8th FP

774

(2)

-18 (1) Lease business revenues -107

(compared to 7th FP actual)

2,386

-88

Non-operating income

2,130

2,155

-

-

+25

• Decrease in taxes and public dues

- (4) Non-operating expenses -28-28• Decrease in repair expenses, leasing
expenses, etc.
• Incurrence of renewal fee of leased land
at Higashi Kobe Center Building(3) SGA -24• Decrease in asset management fee linked
to revenue(4) Non-operating expenses -36

320

-24

1,667

-488

-

-

290

261

Ordinary income

1,839

1,893

+54

1,442

-451

Net income

1,838

1,893

+54

1,441

-451

Cash distribution per unit

3,400

3,500

+100

2,770

-730

Non-operating expenses(4)• Decrease due to examination of
temporary expenses associated withrefinancing• Tenant departure and incurrence of rent
holiday at logistics facilities+7 (2) Expenses related to rent business -18(3) SGA -10
Operating income

Major factors for the increase/decrease(C-B)(Comparison with previous forecast)Gain on sale of realestate properties

Dividends in silent
partnership investment

Major factors for the increase/decrease

225

(3)

• Decrease in temporary expenses
accompanying refinancing-36*Initial forecast for the 7th fiscal period was announced on September 13, 2018/Current forecast was announced on March 15, 20197

2. Actual and forecasted distribution (4)Future key issues ─ Logistics facilities
Factors and countermeasures for decrease in revenue at logistics facilities(Baraki Logistics)

Property features of Baraki Logistics
Baraki Logistics

Company A:
Temporary decrease in rent revenue due
to rent holiday*(August 2019-May 2020)
Factors for
decrease inrevenue

Excluding factors for
decrease in revenue
by utilizing internal
reserves*Exemption of payment of rent for a specific month
during the period of lease agreement.

Factors forincrease inrevenue

15.0
100.0

60.0

40.0

20.0

Total six-month rent during normal period

80.0

5.8

5.8
8.3

5.8

5.8

8.3

5.8

4.1

4,870 million yen

Structure

Reinforced concrete, steel-framed galvanizedsteel sheet roofing 5 floors above groundTotal floor areas

12,471.50 m²➢

The Property allows access to the Chiba and Ibaraki areas via the East Kanto Expressway and offers
excellent access to Haneda Airport and Narita International Airport, also addressing the needs ofairfreight logistics➢

The Property allows access to the Saitama area and delivery to a wide range and a large number ofconsumption areas via the Gaikan Expressway that is expected to be opened to traffic➢

A multi-tenant logistics facility➢

Enjoys good access to Central Tokyo as well as the consumption areas throughout Chiba, allowing
tenants to address the needs of ecommerce operators.

➢

Located within approximately a 5-minute walk from Futamata-Shinmachi station on the JR Keiyo Line,
allowing for securement of employees.

➢

Property with highly versatile specifications, including one passenger elevator, two freight elevators, afloor height of approx. 6.5 m and a pillar span of approx. 9 m-11 m.

Keiyo Junction

Keiyo-Ichikawa IC

8.3<Focusing on leasing activities for new tenants>

Baraki-Nakayama
Station

8.3

Aiming to recover revenue by attracting new
tenants at an early stage

Nishi-Funabashi
Station2019年8月
2019年9月
2019年10月
2019年11月
2019年12月
2020年1月
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
2019
2019
2019
2019
2019
2020

Kaijin Station
Higashi-Kaijin
StationBaraki IC
Ichikawa-Minami
IC
Wangan-Ichikawa IC

第７期
7th
FP

Appraisal value

Higashi-Nakayama Station
Shimosa-Nakayama Station
Shin-Funabashi
Keisei-Nishifuna Station
Station

8.3

0.0
通常期
NormalperiodIchikawa-shi, Chiba

Located near the Wangan Ichikawa IC of the East Kanto Expressway and approximately 1.6 km to thesouth of the “Baraki” IC on the Keiyo Road as well as within 30 km from Tokyo Station, the Property
offers excellent access to central Tokyo.

8th FP
Temporary factors for decrease in revenue due to rent
holiday will be excluded by utilizing internal reserves

120.0

Location➢

Company B: Revenue from cancellation penalty fees

7th FP

Logistics facility

Acquisition price 4,700 million yen

Focusing on leasing
activities for new
tenants

Company B:
Vacancy is likely to occur due to tenant
departure

Use

Futamata-Shinmachi
Station

Myoden Station Koya Junction

Baraki Logistics*Total six-month rent during normal period is indexed as 100

82. Actual and forecasted distribution (5)Future key issues ─ Office
Improvement in occupancy rate accompanying rent increase in response to tenant departure at Higashi Kobe Center Building<Results of leasing after acquisition>

Occupancy rate at the time of property acquisition was 95.4%
Factors for
decrease inrevenue• Acquired a total of 3 new tenants and approximately 160 tsubos. Realized increase in average unit rent

Likely to become a factor of decrease in revenue due to continuous cancellationin the recent period despite the attraction of new tenants<Progress in leasing activities at present>• Financial institutions:
Accepted application for occupancy/currently discussing details of lease agreement(Tenants that are less likely to be attracted as of now are not included in theforecast of business results)• Major manufacturers:
Plans to accept application for occupancy/currently discussing details of lease agreement• Major manufacturers
Currently looking for floors with a certain area/ the Property is one of the major candidates

Aiming for improvement in occupancy rate accompanying rent increase by
attracting new tenants
Countermeas
ures• Other multiple candidate tenants are deliberating the occupancy of the Property as a candidate property byassessing the convenience in assess to Osaka & Kobe area and the number of parking lots.

• Held 2 property viewings(1st viewing (December) 33 people and 19 companies participated/2nd viewing (March)
40 people and 15 companies participated)• Implementation of leasing activities through intimate local collaboration

Property features of Higashi Kobe Center Building

Change in total monthly rent (forecast)
Higashi Kobe Center Building

7th FP

1.00

8th FP

1.01

1.00

0.99 0.99

OfficeLocation

Kobe-shi, Hyogo

Acquisition price 7,440 million yen

0.95
0.93

0.95 0.95 0.95
0.93 0.92 0.92

7,470 million yen

Structure

Steel-framed / Steel-framed reinforced
concrete structure 14 floors above ground➢

Provides convenient access to office and commercial areas since the building is centrally locatedbetween Osaka and Kobe, with an 11-minute ride to Sannomiya Station and 17-minute ride to Osaka
Station from Settsu Motoyama, the closest station to the property➢

The property has specifications satisfying a wide range of tenant needs and is competitive amongst
properties in the surrounding area at a certain degree.

➢

There is parking space for 180 cars on the premises and for 112 cars off the premises, which is very
appealing to a wide range of retail tenants and stores seeking to attract customers across a wide area.

➢

The standard office floor area is 1,042.44 m2. Units can be divided based on tenant needs (existing
tenants rent rooms of 57.42 m2 - 1,387.82 m2). The property has competitive specs such as 8 elevators,
ceiling height of 2,500 mm, individual air conditioning, OA floors, etc. and can satisfy demand fromtenants in various industries.

➢

The building is in the same region as Ashiya, Nishinomiya, Okamoto, and other such luxury residential
areas, and includes community-based tenants (mobile phone shops, photo studios, etc.) who emphasize
easy access to residential areas

2018年9月 2019年1月 2019年2月 2019年3月 2019年4月 2019年5月 2019年6月 2019年7月 2019年8月 2019年9月 2019年10月 2019年11月 2019年12月 2020年1月

Sept. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan.
2018 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020

*The total monthly rent upon acquisition is indexed as 1

Appraisal value

Total floor areas 25,740.46 m²

0.91 0.91

Upon
End ofacquisition 6th FP

0.8

Use

9

3. Status of implementation of active management103. Status of implementation of active management (1)Actual results of active management and change in investment unit price from the time of listing
Investment inmezzanine loan
debt 1
Oct. 25, 2017

Implementation of continuous active
management

1stasset replacement
Announced in Dec. 5, 2016

Investment inmezzanine loan
debt 2
Dec. 20, 2017

2ndasset replacement
Announced in Feb. 28, 2017

Investment inmezzanine loan
debt 3
Dec. 20, 2018

3rd
asset replacement
Announced in Jul. 23, 2018

4th
asset replacement
Announced in Aug. 21, 2018

Investment inmezzanine loan
debt 4Jan. 24, 2019

Acquisition of silent
partnership equity
interest
Announced in Nov. 28, 2018(yen)
120,000
IPO
Announced on
Apr 20, 2016

1st PO

2nd PO

3rd PO

Announced on Mar 17, 2017
Issue price: 96,720 yen

Announced on Jan. 12, 2018
Issue price: 106,724 yen

Announced on Aug. 21, 2018
Issue price: 101,985 yen

110,000

100,000

Issue price upon listing:
100,000 yen

90,000SAR (closing investment unit price) (Note 4)

Tokyo Stock Exchange REIT Index (closing value)
80,00011

3. Status of implementation of active management (2)Steady expansion of asset size
—To increase asset size by 1.6 times to more than 100 billion yen from the time of listing—
6th FP(as of Jan. 31, 2019)(Note 5)

Upon listing

Number of properties

18 properties

33 properties

34 properties

Total acquisition price61.4 billion yen

101.3 billion yen

102.3 billion yen

Total appraisal value

65.1 billion yen

109.9 billion yen

111.0 billion yen

Number of tenants

390 properties

642 properties

643 properties

Asset size
billion yen
1,200
120

Asset replacement/property acquisition in and after the 6th fiscal period

As ofMar. 15, 2019

Number ofproperties
40

Number of properties

34
33
1,000
100

Higashi Kobe Center
Building

Hotel WBF Fukuoka
Tenjin Minami

OfficeOfficeHotel

Acquisition price:2.58 billion yen

Acquisition price:
7.44 billion yen

Acquisition price:
1.97 billion yen

Best Western Tokyo
Nishikasai Grande

Hotel WBF Art Stay
Namba

GLANSIT Akihabara

Hotel

Hotel

Hotel

Acquisition price:
3.18 billion yen

Acquisition price:2.00 billion yen

Acquisition price:
2.50 billion yen

Hakata-eki Higashi 113
Building

Urban Park ShinYokohama

Amusement Media
Gakuin Shinkan

OfficeResidence

OfficeTransfer price:
2.85 billion yen

Transfer price:
2.77 billion yen

Acquisition price:
1.02 billion yen

29
23

800
80

35

Amusement Media
Gakuin Honkan

18

18

30

23

25

18

600
60

102.3

AcquisitionSales(7 properties, 20.69 billion yen)

Status of portfolio (as of March 15, 2019)20

Ratio of Tokyo area: 74.0%

Other: 26.0%

15
400
40

75.3
200
20

61.4

61.4

75.3

86.0

101.3
10

61.4
5

00

上場時
Upon
2016年4月

listing
Apr. 2016

第1期末
1st
FP
2016年7月
Jul. 2016

Stability-driven
45.1%

第2期末
第3期末
第4期末
2nd
FP
3rd
FP
4th
FP
2017年1月
2017年7月（※）
2018年1月
Jan. 2017 Jul. 2017 Jan. 2018

第5期末
5th
FP
2019年7月
Jul. 2018

第6期末
2019年
6th
FP
2月1日時点Jan. 2019 Feb. 2019

Residence
Residence 14.9%
14.9%

54.9%

34
properties
102.3
billion yen

0

Logistics
Logistics30.2%
facility 30.2%(Note 6)Growth potential-driven

Office 34.8%

Hotel
Hotel 20.1%
20.1%

12

3. Status of implementation of active management (3)Enhancement of portfolio and implementation of asset replacement generating gain on saleContinuous deliberation in the future

Deliberation based on implementation policy of asset replacements

3rd FP

4th FP

Replace with assets that
contribute to stability of revenue

Existence of real estate investors
with different appraisal standards

Replacement with assets withexpected growth of revenue

Replacement with assets whose
NOI yield after depreciation is
expected to recover

1st asset replacement

2nd asset replacement

3rd asset replacement

4th asset replacement

Transfer

Acquisition

Transfer

Acquisition

Transfer

Acquisition

Transfer

Acquisition

Urban Park
Yoyogikoen

Urban Park
Gokokuji

Oak Minami-Azabu

Baraki Logistics

Hakata-eki Higashi
113 Building

Hotel WBF Fukuoka
Tenjin Minami

Urban Park
Shin-Yokohama

GlansitAkihabaraGain on sale: 150 million yen

Total gain on sale: 1,510 million yen

Gain on sale in 3rd FP: 150 million yen
Gain on sale per unit (Note 7): 367 yen

Gain on sale in 3rd FP: 740 million yen
Gain on sale per unit (Note 7): 1,801 yen

Total gain on sale: 820 million yen(expected amount)

Gain on sale: 190 million

Gain on sale in 4th FP:
770 million yen
Gain on sale per unit (Note 7):
1,862 yenInternal reserves in 4th FP: 110 million yen～～
6th FP

7th FP
Forecast

Gain on sale in 6th FP:
Approx. 400 million yen (Note 8)
Gain on sale per unit (Note 7): 750 yen

Gain on sale in 6th FP:
Approx. 190 million yen
Gain on sale per unit (Note 7): 355 yen

Gain on sale in 7th FP:
Approx. 420 million yen (expected amount) (Note 8)
Gain on sale per unit (Note 19): 781 yen

133. Status of implementation of active management (4)Increase in capital efficiency utilizing cash on hand and continued implementation of mezzanine loan debt investment
realizing revenue exceeding after-amortization yields of real estate portfolios
Star Asia Mezzanine Loan Debt Investment

Star Asia Mezzanine Loan Debt Investment

Star Asia Mezzanine Loan Debt Investment

Star Asia Mezzanine Loan Debt Investment

Series 1

Series 2

Series 3

Series 4

Return: Base rate +5.0%

Haneda Hotel Development GK

Underlying
asset
HOTEL
RELIEF
Premium
HanedaAppraisal
Value:

Acquired bythird parties

Star Asia
Mezzanine Loan
Debt Investment
Series 1(Subordinated bonds)
301 million yen(Subordinated bonds)
400 million yen

Collateral
Asset

Nonrecourse
loan

Sasazuka (loan receivable)
South
Approx.
Building
Appraisal
Value:
2,870 million
yen(Equity)
Silent partnership investment, etc.

6th FP

GK Japan B Asset

Senior loan
Approx. 1,840 million yen

4,080 million
yen

5th FP

Return: Base rate +5.0%

1,948.5 million
yen

Shinsei Trust &Banking
Preferential beneficiaryinterest
Shinsei Bank Co., Ltd.
Approx. 1,614 million yen

Forecast

8th FP
Forecast

Lender B

Star Asia
Mezzanine Loan
Debt Investment
Series 2

The Royal
GardenResidence(loan receivable)(Subordinate BeneficiaryInterest)
334.5 million yen

Appraisal
Value:

Revenue:
Approx. 10 million yen

Revenue:
Approx. 8 million yen

Revenue:
Approx. 10 million yen

Revenue:
Approx. 6 million yen

1,850 million
yen

Approx.
1,207 million
yenStar Asia
Mezzanine Loan
Debt Investment
Series 3(Subordinated beneficiaryinterest C)
126 million yen

Beneficiary interest D(Equity)
Silentpartnershipinvestment, etc.

Return: Base rate +5.0%

GK DS Kaigan

Lender A

Nonrecourse
loan(Equity)
Silentpartnershipinvestment, etc.

Shinsei Trust &Banking

GK CHK

Collateral
Asset

Collateral
Asset
Premier
KaiganBuilding

Appraisal
Value:
5,750 million
yen

Senior loan
Lender A:
3,354.3 million
yen

Mezzanineloan
Lender B:
300 million
yenStar Asia
Mezzanine Loan
Debt Investment
Series 4(Subordinate loan claims)

300 million yen(Equity)
Silentpartnershipinvestment, etc.

Effects on
distribution per unit

Acquisition

Acquisition

Revenue:
Approx. 0 million yen

Revenue:
Approx. 0 million yen

Revenue:
Approx. 9 million yen

Revenue:
Approx. 3 million yen

Revenue:
Approx. 7 million yen

37 yen

Revenue:
Approx. 10 million yen

Revenue:
Approx. 3 million yen

Revenue:
Approx. 7 million yen

38 yenRedemption
7th FP

Return: Base rate +5.0%

Continuous deliberation

32 yenExcluding revenue fromupfront fees14

3. Status of implementation of active management (5)Implementation of investment in silent partnership equity interest
Also acquired preferential negotiation rights for property acquisition and secured opportunities for future external
growth (Note 9)
Property nameUrban Park Mitsuike Koen

Asset type

Residence

Location

Yokohama-shi,
Kanagawa

Construction
completion

March 24,
1992

Investment
amount

100 million yen *1(Total of *1 and *2)

Preferential
negotiation price3,200 million yen

Appraisal value 3,260 million yen
Preferential
negotiation period

Until
Nov. 30, 2020

Total preferential negotiation price ofthe 3 properties whose preferential
negotiation rights were acquired

8,450 million yen

Business found through unique routeof the Asset Manager<Reason for acquisition of silent partnership
equity interest>
Property nameUrban Park Tokiwadai Koen

Asset type

Residence

Location

Yokohama-shi,
Kanagawa

Construction
completion

February 17,
1994

Investment
amount

100 million yen *2(Total of *1 and *2)

Preferential
negotiation price3,500 million yen

Appraisal value 3,770 million yen
Preferential
negotiation period

Until
Nov. 30, 2020

Property nameBusiness found through unique routeof the Asset Manager

Asset type

OfficeLocation

Tachikawa-shi,TokyoConstruction
completion

May 30,1990

Investment
amount

100 million yen

Preferential
negotiation price

1,750 million yen

Preferential
negotiation period

Until
Aug. 30, 2020

SAR manages trust beneficiary interest for family-type rental
residence/office buildings in which stable revenue can be
expected as assets under management and judged thatstable revenue can also be realized in subordinated silent
partnership equity interest which it will acquire.

• Effective utilization of cash on hand
The Acquisition will be made using the cash on hand of SAR,
and SAR has deemed that a boost in distributable profits
can be expected.

OHA Building

Appraisal value 1,900 million yen• Acquisition of stable revenue

Business found through unique routeof the Asset Manager• Securing opportunities for future external growth incollaboration with Star Asia Group
Realized investment in collaboration with Star Asia Group.
Also acquired preferential negotiation rights for property
acquisition and secured opportunities for future external
growth.

15

3. Status of implementation of active management (6)Partially amended management guideline and added “Expanded Tokyo Area” to the investment target area (February
26, 2019)◼ No changes made to definition of “Tokyo Area” and investment ratio of 70% or more for Tokyo Area
◼ Increased opportunities for external growth that pursues profitability and quality by adding “Expanded Tokyo Area”
Investment target area after amendment
Area

Use

Focused investment

Target area

Office and retail facility
Tokyo Area(no change)

70% or more

NEW

Tokyo 23 wards, Kawasaki-shi and Yokohama-shi

Residence, logistics facility, hotel
Tokyo, Kanagawa, Saitama and Chiba
and student accommodation

Suburban Tokyo (outside 23 wards)
Major cities in Kanagawa and Saitama (excluding Kawasaki-shi and Yokohama-shi)

ExpandedTokyo Area

Office and retail facility

Osaka area

All assets

Osaka-shi, Osaka

Nagoya area

All assets

Nagoya-shi, Aichi

Fukuoka area

All assets

Fukuoka-shi, Fukuoka

Sapporo area

All assets

Sapporo-shi, Hokkaido

Othergovernment-designated cities

All assets

Sendai-shi, Miyagi / Niigata-shi, Niigata / Kyoto-shi, Kyoto / Sakao-shi, Osaka / Kobe-shi, Hyogo / Hiroshima-shi, Hiroshima / Kitakyushu-shi, Fukuoka

30% or less

Areas targeted for focused investment:
Tachikawa-shi, Hachioji-shi, Fuchu-shi, Chofu-shi, Machida-shi, Tama-shi, Kokubunji-shi, Musashino-shi, Koganei-shi, Saitama-shi, Omiya-ku and Urawa-ku◼ In total, the focused investment areas of the Expanded Tokyo
Area have almost as much office stock as Fukuoka City
Comparison of stock size of focused investment areas and major cities(thousand tsubos)
400

285

51
重点投資
対象地域
合計

札幌市

Source: CBRE K. K.

仙台市

8,442

8,000

150

104

100

8,564

10,000

297

200

0

Excess Population Inflow at Focused Investment Areas Over 5 Years (total from 2014 to 2018)(persons)

347

343

300

◼ There are solid inflows of population in each of the focused investmentareas, creating excellent foundational terms

新潟市

6,000

129

4,000

26

14
京都市

堺市

神戸市

広島市

福岡市

北九州小倉

2,000

5,063

4,406

2,832

5,345
3,908 3,863
1,623

2,523

3,502

0

Source: Source: Prepared by the Asset Manager based on the Basic Resident Register (annual) regarding
excess population inflow by nation, prefecture and municipal administration.

16

4. Operating results forthe 6th fiscal period ended January 201917

4. Operating results for the 6th fiscal period ended January 2019 (1)Occupancy rate status
Occupancy rate as of the end of the 6th fiscal period: 97.7%
Aiming to stabilize occupancy rate by grasping tenant needs and the situation of properties through intimate on-site collaboration and other carefulmeasures[Total]6th FP
100.0%

Hotel: 100.0%

99.0%

Office: 98.8%

The occupancy rate for the 6th FP wasmaintained at around 98%.

[Office]
Total: 98.1%
Logistics
facility: 97.8%

98.0%
97.0%

Residence: 96.2%

96.0%

95.0%
94.0%

The occupancy rate decreased mainly due tothe impact of the properties acquired in
September, turning to a slight recovery trend
after that

[Residence]
Although occupancy rate declined at the
beginning of the period, a level of 95% or more
was maintained. Continuous increase andstabilization of occupancy rate is recognized
as an issue[Logistics facility]

93.0%
92.0%
OfficeResidence

Logistics facility

Hotel

Total

91.0%
90.0%
Apr.
2016

Jun.
2016

Aug.
2016

Oct.
2016

Dec.
2016

Feb.
2017

Apr.
2017

Jun.
2017

Aug.
2017

Oct.
2017

Dec.
2017

Feb.
2018

Apr.
2018

Jun.
2018

Aug.
2018

Oct.
2018

Dec.
2018

Stable occupancy was maintained in the 6th
fiscal period as many of the tenants haveconcluded fixed-term building lease contracts.
Focused on the attraction of new tenants forthe floor whose lease agreement has beencancelled by a tenant.

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

1st FP (18 properties)

2nd FP (18 properties)

3rd FP (24 properties)

4th FP (23 properties)

5th FP (29 properties)

6th FP (33 properties)

Office

95.8%

99.2%

98.8%

99.7%

98.6%

98.8%

Residence

92.5%

92.6%

94.2%

97.1%

94.0%

96.2%

Logistics

96.3%

96.3%

96.9%

96.9%

97.8%

97.8%

Hotel

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Total

95.9%

96.8%

97.3%

97.8%

97.7%

98.1%

18

4. Operating results for the 6th fiscal period ended January 2019 (2)Office —Status of rent gap as of the end of the 6th Fiscal Period (Ended January 2019)—
Rent gap as of the end of the period (Note 13)
Diversification Status of Rent Gap
as of End of the Period (Based on Area)

Rent Unit Price and Rent Gap(yen per tsubo)

12,200

Average Rent per Tsubo since the 1st FP (Note 12)100.0%

12,101

90.0%
80.0%

12,000Rent gap
688 yen per tsubo(6.0%)

11,80011,60034.4%
Rent gap
exists at
76.9% ofthe total

70.0%
60.0%
50.0%
40.0%

11,413

42.4%

30.0%

11,400

20.0%
10.0%

11,200

24.0%

0.0%

6th
FP
第6期
Less
than
0%未満 0%0% to less than 10%
0%以上10%未満
10% or more
10%以上

11,000
Nearby
周辺相場賃料単価
Market Rent
Unit PriceContracted
契約賃料単価Rent
Unit Price

(%)

115.0
114.0
113.0
112.0
111.0
110.0
109.0
108.0
107.0
106.0
105.0
104.0
103.0
102.0
101.0
100.0
99.0

Shibuya
渋谷MKビル,MK 115.0
Building: 115.0

西新宿松屋ビル, 111.8
Nishi-Shinjuku
Matsuya Building: 111.8

博多駅イーストプレイス,
105.3105.3
Hakata-eki
East Place:

アサヒビルヂング,Asahi
Building:102.4
102.4

Nihonbashi
HamachoPark Building: 102.2
日本橋浜町パークビル,
102.2
Honmachibashi
本町橋タワー, 102.1Tower: 102.1
Higashi
Kobe Center
アルファベットセブン,
100.0 Building
Alphabet
Seven: 100.0
東神戸センタービル,
100.0
南麻布渋谷ビル, Shibuya
100.0
Minami-Azabu
Building: 100.0

End of
第1期末
1st FP

Rent increase upon conclusion of lease agreement(new contract/renewal)

End of
第2期末
2nd FP

End of
第3期末
3rd FP

End of
第4期末
4th FP(Figures in parenthesis indicate the number of cases)

New contract

Renewal contract(Note 10)(Note 11)8

End of
第6期末
6th FP

Contract Rent Periods of Office Portfolio(m²)

16,000

(37)

(35)

(21)

14,000

Number of cases ofrent increase

End of
第5期末
5th FP3(35)

12,00010,000

Increase rate of rent
upon rent increase

10.8%

4.2%

8,000
6,000

Number of cases ofrent decrease0

Total number of
cases

11

1

4,000
2,000

26

0

第7期
7th
FP

第8期
8th
FP

第9期
9th
FP

第10期以降10th
FP onward

19

4. Operating results for the 6th fiscal period ended January 2019 (3)Residences — Increased rents through renovation of exclusive areas, etc. —Change in Total Monthly Rent and Average Occupancy Rate (Note 14)(thousand yen)Monthly rent unit price

67,000

Average occupancy rate

97.0%

66,500

96.0%

96.0%

[Results]
Occupancy rate: 3.1% increase
Total monthly rent: Approximately 2.59% increase

66,00095.0%

65,50094.0%

Focused on the maintenance and improvement in occupancy rate through more
precise collection of information on the status of competitive properties in thesurrounding area and adjustment of the setting of the total rent for each unit

65,00093.0%

Realized rent increase through the implementation of renovation work responding tolatent tenant needs

92.9%

64,50092.0%

64,00091.0%
End第6期末
of 6th FP(endedJanuary 2019)(2019年1月期）

103.5%

Urban
Park Azabujuban:
103.0%
ｱｰﾊﾞﾝﾊﾟｰｸ麻布十番,
103.0%

103.0%

ｱｰﾊﾞﾝﾊﾟｰｸ難波,
101.3%
Urban
Park Namba:
101.3%

102.5%
102.0%

ｱｰﾊﾞﾝﾊﾟｰｸ緑地公園,
100.9%100.9%
Urban
Park Ryokuchi-koen:

101.5%

Urban
Park Koenji: 100.8%
ｱｰﾊﾞﾝﾊﾟｰｸ高円寺,
100.8%

101.0%

ｱｰﾊﾞﾝﾊﾟｰｸ柏,
100.7% 100.7%
Urban
Park Kashiwa:

100.5%

Urban Park Daikanyama: 100.0%
ｱｰﾊﾞﾝﾊﾟｰｸ代官山, 100.0%

100.0%
99.5%
99.0%

Urban
Park Gokokuji:99.8%
99.8%
ｱｰﾊﾞﾝﾊﾟｰｸ護国寺,
第1期

1st FP

第2期

2nd FP

第3期

3rd FP

第4期

4th FP

第5期

5th FP

第6期

6th FP

Improvement inconvenience

Rent increase through strategic renovation —Urban Park Koenji—

Average Rent per Tsubo since the 1st FP

Conducted installation work of delivery
boxes as needs from tenants is high andtheir installation is judged to be necessary
also from the viewpoint of convenience atthe Property primarily targeting students
and single individuals

Environmental
consideration

End第5期末
of 5th FP(endedJuly 2018)(2018年7月期）[Future Policy]
Continue to implement appropriate capital expenditure and repair work byassessing the status of competitive properties in the surrounding area and thecompetitiveness of properties owned by SAR as well as maintain and improve
occupancy rate and conduct measures for rent increase

Conducted construction work tochange the porch lighting to LED
lighting from the viewpoint ofenvironment-friendly real estate
operation
Also contributed to the reduction ofelectricity charge

Total construction costs:
1,836 thousand yen
Contribution to revenue:

0.8% increase in average
rent

20

4. Operating results for the 6th fiscal period ended January 2019 (4)Logistics facility/hotel■ Logistics facility ■ Diversification of Current Contract Renewal Period (based on floor area)

90,00090,000m²㎡

7th FP (ending July 2019)(5)
80,00080,000m²㎡

Currently discussing conditions of contract renewal for 2 tenants with a contract
subject to renewal

70,00070,000m²㎡
60,00060,000m²㎡

Received cancellation notice from a tenant with a contract ending in the 11th FP
Focus on leasing activities for the floor whose lease agreement has beencancelled by the tenant

Acceptance of cancellation notice
Scheduled to move out in the 8th FP

50,00050,000m²㎡<Overview of leasing activities>
40,00040,000m²㎡

Started leasing activities targeting mainly end users(1)

Favorably located near an IC of a highway and within walking distance fromstation, and special needs for offices such as research facilities will also be
incorporated.

70,00030,000m²㎡
60,00020,000m²㎡(2)

50,00010,000m²
㎡

(2)
(1)

8th FP (ending January 2020)
1 tenant with a contract subject to renewal

0,000
0 m²
㎡

7th
FP
7期
July 2019

8th
FP
8期
January 2020

9th
9期FP
July 2020

10th
FP
10期
January 2021

11th
FP
11期
July 2021

12th FP
12期以降

0%

20%

Establish a favorable relationship with tenants such as grasping tenant needs andresponding to such needs through intimate on-site collaboration

onwards■ Hotels ■ Change in rent system and rent ratio
Property name

Fixed
rent

Floating
rent

R&B Hotel Umeda East○－

Smile Hotel Namba○○

Best Western Tokyo Nishi-kasai○○

Best Western Yokohama○

Hotel WBF Fukuoka Tenjin Minami○(Note 16)Glansit Akihabara
Best Western Tokyo Nishikasai Grande
Hotel WBF Artstay Namba○○○

1st FP
第1期
2nd FP
第2期
3rd FP
第3期

40%

60%

62.0%

80%

100%

71.6%

28.4%

84.9%

6th FP:
additional acquisition of 4 properties

15.1%

4th FP
第4期

89.1%

10.9%

○

5th FP
第5期

86.2%

13.8%

○

6th FP
第6期

95.2%

4.8%

－

7th
FP forecast
第7期予想

93.0%

7.0%

6th
FP forecast
第8期予想

95.0%

5.0%

○
○

Upon listing: 2 properties
3rd FP:
additional acquisition of 2 properties

38.0%

Currently managing a total of 8
properties
Ratio of floating rent decreased due tothe additional acquisition of hotel witha high ratio of fixed rent
Ratio of floating rent to lease businessrevenue was
7th FP: 1.1%

Fixed

Floating

8th FP: 0.8%

21

4. Operating results for the 6th fiscal period ended January 2019 (5)Financial standing
Refinancing risk and the risk of rising interest rates is reduced by diversifying repayment dates of loans and fixing interest rates
Balance of borrowings
Balance of borrowings(unit: million yen)
As of
End of 6th FP
Mar. 15, 2019

Longterm

Shortterm

Diversification of repayment dates (As of March 15, 2019)

Interest rate

Term

FP of therepayment
date

7th FP

7,300

7,300

0.364% (Note 17)

3.0 years

7,300

7,300

0.483% (Note 17)

4.0 years

9th FP

7,300

7,300

0.625% (Note 17)

5.0 years

11th FP

2,400

2,400

0.530% (Note 17)

3.5 years

10th FP

4,150

4,150

0.710% (Note 17)

5.0 years

13th FP

1,600

1,600

0.530% (Note 17)

3.5 years

10th FP

4,690

4,690

0.730% (Note 17)

5.0 years

15th FP

1,000-

Base rate (Note 18)+0.20%

1.0 years

7th FP

7,300

7,300

Base rate (Note 18)+0.45%

3.5 years

12th FP

4,000

4,000

0.6095% (Note 17)

3.5 years

13th FP

4,840

4,840

0.812% (Note 17)

5.0 years

16th FP

460

460

Base rate (Note 18)+0.20%

11 months 8th FP-

700

Base rate (Note 18)+0.20%

3 months 7th FP

52,34052,040Bank formation (as of March 15, 2019)
The Dai-ichi Life Insurance Company 1.0%
The Nishi-Nippon City Bank 1.9%
The Bank of Fukuoka 2.2%
MUFG Bank 4.0%
Resona Bank 9.0%

Fixed

10,0008,000

Floating

700

6,000

4,000

7,300

7,300

2,000

7,300

7,300

8,150
4,690

4,000

4,840

460
7th FP
8th FP
9th FP
10th FP
11th FP
12th FP
13th FP
14th FP
15th FP
16th FP
第7期
第8期
第9期
第10期
第11期
第12期
第13期
第14期
第15期
第16期
EndingEndingEndingEndingEndingEndingEndingEndingEndingEnding
2019/72021/12022/12023/12024/1
2020/１
July
2019 January
2020 2020/7
July 2020 January
2021 2021/7
July 2021 January2022 2022/7
July 2022 January2023 2023/7
July 2023 January
2024

Main financial indicators

Mizuho Trust & Banking 0.8%
Sumitomo Mitsui Banking 26.4%

Aozora Bank 9.0%

Shinsei Bank 9.4%

End of 5th FP

End of 6th FP

As of March 15, 2019

LTV (based on total assets)

46.2%

47.1%

47.0%

Balance of borrowings

43,230 million yen

52,340 million yen

52,040million yen

Long-term debt ratio

100.0%

99.1%

97.8%

Average remaining
period to maturity

2.5 years

2.3 years

2.2 years

Average borrowing period

4.0 years

4.0 years

4.0 years

Average interest rate

0.537%

0.568%

0.569%

Fixed interest rate ratio

80.4%

83.3%

83.7%

Mizuho Bank 22.1%
Sumitomo Mitsui Trust Bank 14.1%

22

5. Future Initiatives

23

5. Future Initiatives (1)Continuous implementation of active management that seeks to maximize unitholder value
Continued implementation of measures that seek to maximize unitholder value such as the implementation of 2 mezzanine loan debt investments andproperty acquisition from the Sponsor Group utilizing preferential negotiation rights in the current period

Points of focus in and after the 7th Fiscal Period⚫ Elimination of the rent gap in the office portfolio

Internal
growth⚫ Improvement and stabilization of occupancy rate of residences/continuous pursuit of rent increase(enhancement of competitiveness through renovation work, etc.)⚫ Maintenance and improvement of appeal to potential tenants through appropriate capital expenditure and repair(utilization of sponsor support)⚫ Attraction of new tenants for the floors whose lease agreement has been cancelled at Baraki Logistics/Higashi
Kobe Center Building at an early stage⚫ Focus on securement of external growth including the accumulation of properties for which SAR holds preferential
negotiation rights

External
growth⇒ Acquisition of preferential negotiation rights from the Sponsor Group⇒ Searching for properties utilizing the unique network of Star Asia Investment Management Co., Ltd.

⚫ Continuous deliberation of various measures(mezzanine loan debt investment/asset replacement/silent partnership investment)⚫ Challenging new measures in collaboration with Star Asia Group

Financialstrategy⚫ Continuous deliberation on the acquisition of ratings⚫ Enhancement of the bank formation (inviting new lenders)⚫ Utilization of internal reserves intending to stabilize distributions24

5. Future Initiatives (2)Conclusion of preferential negotiation contracts for future external growth (Note 9)■Acquired preferential negotiation rights for 3 properties from Star Asia Group which has been expanding its business line as well as for 3 other properties
Property name

OHA Building

Asset type

OfficeLocation

Tachikawa-shi, Tokyo

CompletedMay 30, 1990

Number oftenants3

Properties for which
SAR holds preferential
negotiation rights

Kita-ku

Residence
Nishi-Sugamo Project

Shinjuku Station
Tachikawa-shi

Bunkyo-ku

Suginami-ku

Property name

HAKUSAN HOUSE

Asset type

Student accommodation

Location

Hakusan, Bunkyo-ku, Tokyo

CompletedFebruary 2018

Other

8F, 175 rooms, 364 beds

Property name

Shimotakaido Project

Asset type

Student accommodation

Location

Shimo-Takaido,
Suginami-ku, Tokyo

Scheduledcompletion
periodDecember 2019

Other

RC, B1F/8F

A multi-tenant office building which is approximately a9-minute walk from Tachikawa Station

Preferential
negotiation priceStudent accommodation

1,750 million yen

OfficeOHA Building

Property nameUrban Park Mitsuike Koen

Asset type

Residence

Location

Yokohama-shi, Kanagawa

Completed

March 24, 1992

HAKUSAN HOUSE

Student accommodation
GSA second development
project

Yokohama-shi
Tsurumi-ku

Family-type residence with 2LDK or 3LDK
Number ofleasable units

Urban Park Tokiwadai Koen

3,200 million yen

Property nameUrban Park Tokiwadai Koen

Asset type

Residence

Location

144 rooms and 326 beds
scheduled

Residence

Yokohama-shi
Hodogaya-ku

Preferential
negotiation priceCompleted

Residence

157 units

Urban Park Mitsuike Koen

Property nameNishi-Sugamo Project

Asset type

Residence

Yokohama-shi, Kanagawa

Location

Takinogawa, Kita-ku, Tokyo

February 17, 1994

Scheduledcompletion
periodApril 2020

Family-type residence with 2LDK or 3LDK

Number ofleasable units

213 units

Preferential
negotiation price3,500 million yen

Overview of assets managed by the Sponsor Group
Other 15.1%
Hotel 30.7%

Office 25.1%

35,79535,795

Other

Access to city center is
excellent with the Mita
subway line

Million yen

Million yen

RC, 16F
Total of 44 units scheduled

Retail 24.4%

Preferential negotiation price(Total of the above 3 properties):

8,450 million yen

Tokyo area 84.9%
Residence 19.7%

Preferred date as of January 31, 2019 (based on appraisal value)
Excluding properties for which preferential negotiation contracts
have been concluded

25

5. Future Initiatives (3)Continuous implementation of active management that seeks to maximize unitholder value—Asset replacement/mezzanine loan debt investment—
Continue to implement active management represented by asset replacement generating gain on sale and mezzanine loan debt investment withprofitability exceeding after-amortization yields of real estate portfolios by enhancing portfolio

Asset replacement
ActualMezzanine Loan Debt Investment
Actual⚫ Enhanced portfolio by implementing asset
replacement for four times until now⚫ Generated gain on sale through sales of properties⚫ Invested in 4 projects until now⚫ Realized yields exceeding after-amortization yieldsof real estate portfolios in all projects

Implementation policy for
asset replacement

Idea on mezzanine loan
debt investment

1.

Future revenue contribution of the assets to be replaced

2.

Real Estate Market Conditions by Asset Type3.

Level of the investment unit price of SAR

1.

2.
3.
4.

Differentiate from other real estate players in view ofdiversification of income (revenue) opportunities as
supplemental investment for actual real estate in the fiercelycompetitive real estate market.
Secure revenue exceeding after-amortization yields of theexisting real estate portfolio
Serves as an effective investment using current cash on hand(cash and deposits) for accretion
Judged likely to assure repayment of principal and interest

Pursuit of maximization of unitholder value

26

5. Future Initiatives (4)Continuous implementation of active management that seeks to maximize unitholder value

Pursuing an increase of the asset size based on assets managed by the Star Asia Group(100 million yen)

Aim for an asset size of
200 billion yen by 2020

1,400
1,300

Achieved
100 billion yen

1,200
1,100

1,013

1,023

1,000
900

860
770

800

753

700

614

614

614

Upon
listing
上場時

End
of 1st FP
第1期末End
of 2nd FP
第2期末

600
500
End
of 3rd FP
第3期末(Note 19)

Endof 4th FP
第4期末End
of 5th FP
第5期末End
of 6th FP 2019年2月1日
February 1, 2019
第6期末

2020
2020年

27

5. Future Initiatives (6)Initiatives on sustainability◼ SAR recognizes its position in society as a listed real estate investment corporation and will implement operation that is considerate towards ESG
as an initiative on sustainability◼ SAR will enhance corporate value in pursuit of long-term sustainability and gain comprehensive competitiveness◼ SAR believes that such efforts are in line with the basic principle of “Unitholders’ interest-first”

Basic principle “Unitholders’ interest-first”

Enhancing the possibility oflong-term sustainability

Enhancing corporate value

E

S

G

Environment

SocialGovernance• Environment-friendly real estate
operation• Establishment of relationshipwith stakeholders• Transparency of management• Alignment of interest withunitholders
28

5. Future Initiatives (7)Initiatives on sustainability
E

Environmental initiatives◼ Acquisition of environmental certification and DBJ Green Building Certification for 3 properties.

◼ Promotion of LED lighting

Promoting change to LED lighting fromthe viewpoint of environment-friendly
building operation and management aswell as pursuing the reduction of future
electricity charge

Property nameIwatsuki Logistics

Property nameBaraki Logistics

Property name

Honmachibashi Tower

Asset type

Logistics facility

Asset type

Logistics facility

Asset type

OfficeLocation

Saitama-shi, Saitama

Location

Ichikawa-shi, Chiba

Location

Osaka-shi, Osaka

Properties with excellent environmental &social awareness

S

Properties with high environmental & social
awareness

Properties with satisfactory environmental &social awarenessSocial initiatives◼ Establishing relationship with various stakeholders
Local community:
Aim to contribute to the local community
through owned properties and tenants.

Clients:
Establish mutual trust based on fairtransaction.

Lenders:
Strive to share information to establish arelationship of mutual trust.

Stakeholders
surrounding
SAR

Local
community

Lenders

Clients

Unitholders

Unitholders:
Aim to maximize unitholder value based on
the “Unitholders’ interest-first” mindset.

Employees

Employees:
Support the growth of each employee by accepting various
employees regardless of gender, nationality, ethnic group,
race and generation
Ratio of female employees: 55.6% (excluding director)

29

5. Future Initiatives (8)Initiatives on sustainability
G

Governance◼ Implement decision-making with high transparency by complying
with laws and regulations◼ Maintain a high sense of ethics and execute operations as amanager of investors’ funds<Decision-making process>◼ Aligning the interests of the Sponsor Group with those of theunitholders by holding 17.9% of the investment units of theSponsor Group◼ Members of the Asset Manager also hold investment units
Sponsor Group

Department

Total: 96,780 units held by 5 unitholders
Proposal

Number ofinvestment units held insame-boat investment:

Founder of Star Asia 2 individuals

Compliance Officer

97,000 units

Total: 220 units
Review and approval

ReturnHolding ratio:

17.9%

Investment Committee (including external directors)
Review and resolution

Rejected

Compliance Committee (including external directors)
Review and resolution

Management team of the Asset Manager
Rejected

Board of Directors

Holding SAR’s investment units through the cumulative investment systemfor employees
High commitment by management

Rejected
Items that do not need tobe discussed at theCompliance Committee

Items that need to be
discussed at theCompliance Committee

ReviewAnd
approval

SAR’s Board of
Directors Meetings

Employees of Star Asia Investment Management Co., Ltd.
Unapproved

Holding SAR’s investment units through the cumulative investment system
30
for employees

5. Future Initiatives (9)Initiatives on sustainability
G

GovernanceStar Asia, the sponsor of Star Asia Investment Corporation, is a non-listed independent investment management group which invests mainly inJapanese real estate-related assets and whose main goal is supplying investors with excellent returns.
Star Asia Investment Corporation and Star Asia shall share the same long-term vision in accordance with the Star Asia Group’s Code of Conduct, shallbe a leading Real estate investment management group in Japan and shall persistently endeavor to continue to be such.
The Code of Conduct is as follows:1

Client FirstWe are rewarded only when we
consistently meet and exceed ourinvestor clients’ expectations for the
mandates they have given to us.

5

Collaborative
andCooperative Culture

We succeed only when we work
together by fully utilizing our collective
strengths in a cooperative manner toserve our investor clients. The group’s
performance always exceeds the sum of
our individual performances.

2

Highest EthicalStandards andIntegrity

We always abide by the highest ethicalstandards and integrity. Unethicalactions by an employee could easily
destroy the group’s long-standing
reputation and trust.

6

Adaptability

We stay nimble, proactive and critical,
allowing us to adjust quickly as themarket environment changes in order tocontinue to be a successful leader in themarket where we do business.

3

Creativity

We utilize our experience, persistence,and creativity to identify and monetize
investment opportunities which may not
be immediately apparent to ourcompetitors.

7

Meritocracy

We reward our employees for their
specific personal performance as well as
their contribution to the group and toinvestor client performance.

4

Respect for Others

We treat our investor clients, employees,
trade counterparties, and vendors withthe utmost respect, and always strive to
be trustworthy partner.

8Endless PursuitofExcellence

We will tirelessly pursue excellence not
only for our investor clients but also for
ourselves.

31

6. Appendix

32

About the Sponsor GroupStar Asia Group’s Organizational Chart by Function and Overview of Support to SARStar Asia Group, which is expanding business operations, strongly supports the growth of Start Asia Investment Corporation.

Malcolm F. MacLean IV
Managing Partner

Taro Masuyama
Managing Partner
Star Asia Group, LLC

Development, operation andmanagement ofstudent accommodation

Warehousing, Same-boat
investment

Overseas

Development functions

Star Asia AssetManagement, LLC

Star Asia
Management Limited(Sponsor)

GSA
Star Asia Japan Limited(50% investment)

Domestic

Fund management

Star Asia
Investment Management
Co., Ltd.

Star Asia
Management JapanTokyo Branch

GSA
Star Asia

Star Asia
Sogo Kaihatsu Co., Ltd.

Asset owning
SPC

Asset Manager of Star
Asia Investment
Corporation

Provision of know-how
contributing to theinternal growth of SAR

Properties withpreferential negotiationrights owned by SAR

Properties withpreferential negotiationrights owned by SAR◼ Construction◼ HAKUSAN HOUSE◼ Nishi-Sugamo Project

Holding SAR’s investment
units (97,000 units/
Investment amount 9.7 billion
yen)◼ Shimotakaido Project*Management
Department◼ Abundant experience

in real estate-related
debt investment

Star Asia Capital Corp Limited

Also engaged in
multiple development
projects other than theabove

Silent partnership investmentin properties with preferential
negotiation rights owned by
SAR◼ Urban Park Mitsuike Koen
◼ Urban Park Tokiwadai

Sourcing functions

Real estate operation andmanagement

Star Asia Japan
Special Situations FundStar Asia
Asset Management II, LLC

Asset owning
SPC

Star Asia
Asset Advisors Co., Ltd.

Start Asia Groupcurrently manages a
special situation fund
AUM as of the end ofJanuary 2019 is 35.7
billion yen

Supporting asset
management of
warehousing funds andformation of bridge
funds

Having capacity toacquire properties andcontinue to focus onproperty acquisition

Koen◼ OHA building

33

Properties owned by the Sponsor Group
Overview of HAKUSAN HOUSE<Attractiveness of HAKUSAN HOUSE>⚫ Arrival of revenue-generating opportunities against the backdrop of “Super Global University Creation Support Project” promoted by the government⚫ Expansion of “UNINEST”, a brand for global student accommodations, into Japan for the first time
⚫ Enabling international exchange at global student accommodations targeting international and Japanese students⚫ Provision of residential space and common space (study room, cinema room and kitchen) to form an active community for students⚫ Monthly fees are all inclusive (utilities expenses, usage fee of furniture and home appliances, internet fee, security costs)⚫ Safe security system with staff onsite 24 hours a day⚫ Provision of multilingual concierge service

Share Nest

Common Space

Rooftop Terrace

Kitchen Space■ Nearby universities with many international students
Rikkyo Univ.
Ikebukuro campus

Toyo Univ.
Hakusan campus

Ochanomizu Univ.
Gakushuin Univ. Japan Women’s Univ.
Mejiro campus Mejiro campus
Waseda Univ.
Waseda campus

Concierge service

External appearance(Note 9) As of the date of this material, Hakusan House has not been acquired by SAR and there is no
guarantee that SAR will acquire the above property.

University

Tsukuba Univ.
Tokyo campus

HAKUSAN
HOUSE

Ueno
StationThe Univ. of
Chuo Univ. Tokyo
Hongo campus
Korakuen campus

Housei Univ.
Ichigaya campus

Meiji Univ.
Surugadai campus
Sensyu Univ.
Kanda campus

No. ofinternational
students (Note)

1

Waseda University

4,767

2

The University of Tokyo

3,260

3

Tokyo University of Social Welfare

3,000

4

Ritsumeikan Asia Pacific University

2,818

5

Japan University of Economics

2,708

6

University of Tsukuba

2,326

7

Osaka University

2,184

Source: JASSO Japan Student Services Organization(Note) Number of international students for universities provided above is the total for all the campuses
combined in “Result of Annual Survey of International Students in Japan 2018”34

Organizational Structure of Asset Manager
President and CEO
Atsushi Kato

After entering Nomura Real
Estate Development Co., Ltd.,he worked for Showa Ota
Ernst & Young, and thenentered Nomura Securities Co,
Ltd. After being involved in theasset finance businessincluding support inestablishing J-REITs, hejoined Star Asia Investment
Management Co., Ltd.

Shareholders’ Meeting

Board of Directors
Investment Committee

Compliance Committee
President and CEO

Investment Management
Division

Senior Manager(Male)

Joined Nissho Iwai Corporation (current: Sojitz Corporation).
After working in the condominium developer sector of the
Urban Development Department, engaged in acquisition
and asset management of private funds at Morgan Stanley
Capital K.K. Has been involved in business deals totaling
218 billion yen. Joined Hulic Co., Ltd. Engaged in IPO andfour POs at Hulic Reit Management Co., 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.

Manager(Female)Was involved in contracting tasks and accounting tasks at a leading real estate
operating company. Currently conducts property cash management incooperation with the Finance Management Division.

Manager(Male)

Was involved in asset management at an overseas listed fund’s asset
management company, prior to which he was in charge of acquisitions, including
development projects, at a real estate asset management company.

Manager(Female)Was involved in acquisitions and interim investment management of various
asset types at an overseas listed fund’s asset management company and a JREIT operating company. Currently in charge of asset management.

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

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

Finance Management
Division

Investment Management Division
Director and CEO
Satoshi Obara

Chief Compliance
Officer
Kazuaki Fujii

Corporate Auditor

Finance Management Division
Director and CFO
Toru Sugihara
After being involved in the investment banking business at
Nomura Securities Co., Ltd., he worked at Barclays
Securities Japan Limited and Kenedix, Inc. and joined Star
Asia Management Japan, Ltd.

Senior Manager(Female)Involved in IR, management planning tasks, etc. in the general constructionindustry. Using experience obtained thereafter in startup work for an overseas
base of a different business, is currently in charge of general financial
management tasks while primarily working in IR.

Manager(Male)

Certified Public Accountant. After gaining experience as a member of an audit
team at an accounting office, he was involved in tasks of the planningdepartment at a leading investment advisory company. Is mainly in charge of
gain/loss management, settlement and disclosure of the investment corporation
also contributing to establishing internal infrastructure.

Manager(Female)After gaining experience in conducting duties at a leading bank and foreignaffiliated financial institute, gained experience in PM tasks for over 50 properties
in total of REITs, private placement and individual owners at a leading PM
company, and using such experience, conducts property cash management incooperation with the Investment Management Division. She also contributes inother administrative tasks.

Associate(Female)In charge of a wide range of work as an assistant, using abundant experiencefrom various duties.

Was involved in ➀ proposals for implementing capital expenditure and repair plans with an aim to enhance value and maintain functions
upon acquisition of real estate and ② supervising construction work such as renewal and repair work after the acquisition of real estate
as well as advisory and support to help maintain building value at a foreign real estate fund.

35

Change in distribution since listing
Change in business results since listing(Unit: million yen)
1st FP(ended Jul. 2016)
actual

2nd FP(ended Jan. 2017)
actual

3rd FP(ended Jul. 2017)
actual

4th FP(ended Jan. 2018)
actual

5th FP(ended Jul. 2018)
actual

6th FP(ended Jan. 2019)
forecast

1,859

2,017

2,312

2,408

2,791

3,196

3,224

+27

Office rent

634

802

822

795

862

1,091

1,104

+12

Residence rent

325

349

391

410

500

443

458

+14

Logistics rent

581

530

642

696

906

912

912

+0

Hotel rent

142

120

220

282

287

450

447

-3

Other

174

215

235

223

235

298

302

+3

321

380

549

536

607

715

678

-36

1,538

1,636

1,763

1,871

2,184

2,481

2,545

+63

246

244

287

305

355

415

409

-6

1,291

1,392

1,476

1,566

1,828

2,065

2,135

+70

Mezzanine

-

-

-

14

18

18

22

+3

Gain on sale of real estate property

-

-

898

771

-

579

598

+18

143

202

276

300

270

365

349

-16

1,147

1,190

2,098

2,051

1,576

2,298

2,406

+108

Non-operating income

0

0

0

0

0

-

0

+0

Non-operating expenses

812

117

264

176

270

361

333

-27

Ordinary income

335

1,073

1,833

1,876

1,305

1,936

2,073

+136

Net income

333

1,072

1,832

1,802

1,305

1,936

2,049

+113

968 yen

3,112 yen

4,423 yen

4,077 yen

2,773 yen

3,580 yen

3,720 yen+140 yen

1,684 yen

3,820 yen

2,948 yen

3,224 yen

3,529 yen

3,276 yen

3,440 yen+164 yen

0

0

0

113

113

113

151

+37

Lease business revenue

Expenses related to rent business(Depreciation is excluded)
NOI
Depreciation

Rent revenues/expenses

SGA
Operating income

Cash distribution per unit
FFO per unit
Balance of Internal reserves

6th FP
Comparison with(ended Jan. 2019)
forecast
actual* Sept. 13, 2018
Announced in 5th FP closingof accounting report36Balance Sheets for the 6th Fiscal Period ended January 31, 2019
(Unit: thousand yen)
5th FP(As of July 31, 2018)

6th FP(As of January 31, 2019)

Assets

5th FP(As of July 31, 2018)

6th FP(As of January 31, 2019)

Liabilities

Current assets

Current liabilities

Cash and deposits

2,000,005

2,310,545

Operating accounts payable

Cash and deposits in trust

3,118,735

3,953,328

Short-term loans payable

Operating accounts receivable

50,97052,568Current portion of long-term loans payable

Prepaid expenses

118,176

120,684

Accounts payable - otherConsumption taxes receivable

210,713

184,863

Accrued expenses

Other

16,157

7,153

5,514,759

6,629,144

Total current assets
Non-current assets
Property, plant and equipment

Buildings in trust

Income taxes payable

33,050,199

8,300,000

251,986

335,845

8,643

10,017605

22,611-

Advances received

594,306

624,323

Total current liabilities-1,407,469-1,712,512

Buildings in trust, net

27,141,983

31,337,686

9,606

11,621

Tenant leasehold and security deposits-1,070-1,423Tenant leasehold and security deposits in trust

Structures in trust, net

8,536

10,198Other

Machinery and equipment in trust

45,90145,723

Total non-current liabilities

Accumulated depreciation

460,000

8,490,000

21,000

Accumulated depreciation
Structures in trust

291,171-

Accrued consumption taxes

Other28,549,452

190,118

9,842

14,1199,566,503

10,058,089

34,740,000

43,580,000

Non-current liabilities
Long-term loans payable

-

6,669

1,959,368

2,514,819

493

79,64436,699,861

46,181,133

46,266,365

56,239,222

Accumulated depreciation-2,718-4,982

Machinery and equipment in trust, net

43,18340,741Tools, furniture and fixtures in trust

22,44230,828

Accumulated depreciation-4,123-5,807

Unitholders’ capital

45,832,670

52,745,966

Tools, furniture and fixtures in trust, net

18,31825,02056,437,510

68,467,885

1,418,609

2,163,215-

222

Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus

1,418,609

2,163,215

Total unitholders’ equity

47,251,279

54,909,181

Deferred gains or losses on hedges

35,889-69,303

Total valuation and translation adjustments

35,889-69,30347,287,168

54,839,877

93,553,534

111,079,100

Land in trust
Construction in progress in trust
Total property, plant and equipment

83,649,531

99,881,755

Intangible assets
Leasehold rights in trust

3,459,138

3,459,138

Total intangible assets

3,459,138

3,459,138

Investments and other assets

Investments securities

734,500

628,893Long-term loans receivable-

300,000

Long-term prepaid expenses

155,717160,951

Lease and guarantee deposits

10,00010,962

Other

29,887

8,255

Total investments and other assets

930,105

1,109,062

88,038,774

104,449,955

93,553,534

111,079,100

Total non-current assets
Total assets

Total liabilities

Net assets
Unitholders’ equity

Valuation and translation adjustments

Total net assets
Total liabilities and net assets

37

Statement of Income for the 6th Fiscal Period (From August 1, 2018 to January 31, 2019)(Unit: thousand yen)
5th FP
From: February 1, 2018
To: July 31, 2018

6th FP
From: August 1, 2018
To: January 31, 2019

Operating revenue
Lease business revenue
Other lease business revenue

Gain on sale of real estate property

2,631,029

3,028,065

160,946

196,270－

598,163

18,47622,0922,810,451

3,844,592

Expenses related to rent business

963,758

1,088,373

Asset management fee

193,319

260,206

Asset custody and administrative service fees

20,323

22,377

Directors’ compensation

2,400

2,400

Other operating expenses

54,42764,945

Total operating expenses

1,234,229

1,438,302

1,576,222

2,406,289

OthersTotal operating revenue
Operating expenses

Operating income
Non-operating income
Interest income

2624Interest on refund－

848

Total non-operating income

26

872

Interest expenses

112,385

145,156

Borrowing related expenses

149,537

150,949

Investment unit issuance expenses

7,405

37,238

Other

1,000

-

270,327

333,344

Ordinary income

1,305,921

2,073,818

Income before income taxes

1,305,921

2,073,818

Income taxes - current

605

24,172

Total income taxes

605

24,172

1,305,316

2,049,646

Non-operating expenses

Total non-operating expenses

Net income
Retained earnings brought forward

Unappropriated retained earnings (undisposed loss)

113,292

113,568

1,418,609

2,163,215

38

Investment
ratio
(%)

Appraisal
NOI yield(%)

Investment
ratio
(%)

Appraisal
NOI yield
(%)

3,070

2.9

4.7

Urban Park Azabujuban

Minato-ku, Tokyo

2,045

2,280

2.0

4.4

6,065

6,950

5.9

5.2

Urban Park Daikanyama

Shibuya-ku, Tokyo

6,315

7,690

6.2

4.8

Shibuya-ku, Tokyo

1,763

2,450

1.7

6.3

Urban Park Namba

Osaka-shi, Osaka

1,490

1,610

1.5

5.4

Alphabet Seven

Minato-ku, Tokyo

1,725

2,450

1.7

5.9

Urban Park Gokokuji

Toshima-ku, Tokyo

1,460

1,520

1.4

4.9

Shibuya MK Building

Shibuya-ku, Tokyo

2,042

2,980

2.0

5.7

Urban Park Kashiwa

Kashiwa-shi, Chiba

1,186

1,190

1.2

5.0

Asahi Building

Yokohama-shi,
Kanagawa

6,320

7,170

6.2

4.8

Urban Park Ryokuchi-koen

Suita-shi, Osaka

1,550

1,570

1.5

5.7

Hakata-eki East Place

Fukuoka-shi, Fukuoka

2,286

2,570

2.2

5.3

Urban Park Koenji

Suginami-ku, Tokyo

1,167

1,170

1.1

4.7

Nihonbashi Hamacho Park
Building
Amusement Media Gakuin
HonkanChuo-ku, Tokyo

1,450

1,520

1.4

4.7

Subtotal

15,213

17,03014.9

4.9

Shibuya-ku, Tokyo

2,580

2,660

2.5

4.0

Iwatsuki Logistics

Saitama-shi, Saitama

6,942

7,140

6.8

4.8

Higashi Kobe Center
Building

Kobe-shi, Kobe

7,440

7,470

7.3

5.8

Yokohama Logistics

Yokohama-shi,
Kanagawa

3,560

4,060

3.5

5.7

Amusement Media Gakuin
Shinkan

Shibuya-ku, Tokyo

1,020

1,120

1.0

3.9

Funabashi Logistics

Funabashi-shi, Chiba

7,875

8,650

7.7

5.5

35,66440,410

34.8

5.2

Baraki Logistics

Ichikawa-shi, Chiba

4,700

4,870

4.6

4.4

Tokoyozawa Logistics

Tokorozawa-shi,
Saitama

1,300

1,350

1.3

5.7

Funabashi Nishiura
Logistics I

Funabashi-shi, Chiba

3,000

3,020

2.9

5.1

Funabashi Nishiura
Logistics II

Funabashi-shi, Chiba

821

842

0.8

7.1

Matsubushi Logistics

Kita-Katsushika-gun,
Saitama

2,755

2,850

2.7

5.5

30,95332,78230.3

5.2

Minami-Azabu Shibuya
Building

Minato-ku, Tokyo

2,973

Honmachibashi Tower

Osaka-shi, Osaka

Nishi-Shinjuku Matsuya
Building

R&B Hotel Umeda East

Osaka-shi, Osaka

2,069

2,310

2.0

5.6

Smile Hotel Namba

Osaka-shi, Osaka

1,750

1,660

1.7

5.0

Best Western Tokyo Nishikasai

Edogawa-ku, Tokyo

3,827

3,840

3.7

4.6

Best Western Yokohama

Yokohama-shi,
Kanagawa

3,248

3,250

3.2

4.7

Hotel WBF Fukuoka Tenjin
MinamiFukuoka-shi, Fukuoka

1,970

2,000

1.9

4.6

GLANSIT Akihabara

Chiyoda-ku, Tokyo

2,500

2,520

2.4

3.9

Best Western Tokyo
Nishikasai Grande

Edogawa-ku, Tokyo

3,180

3,210

3.1

4.0

Hotel WBF Art Stay
Namba

Osaka-shi, Osaka

2,000

2,030

2.0

4.6

Subtotal

Property nameResidential

Location

Subtotal

Hotel

Acquisition Appraisal
price
value
(million yen) (million yen)

Property name

Logistics

OfficePortfolio List (as of March 15, 2019)

Subtotal

20,544

20,820

20.0

4.6

Location

Acquisition Appraisal
price
value
(million yen) (million yen)

* “Appraisal value” is the value stated in the real estate appraisal report with January 31, 2019 as the date ofvaluation. However, the value stated in the real estate appraisal report with November 1, 2018 as the date ofvaluation is indicated for Amusement Media Gakuin Shinkan.

Total

Acquisition price(million yen)

102,374

Appraisal value(million yen)

111,042

39

Appraisal Value and Indicators at the End of 6th Fiscal Period ended January 2019
111,375 million yen

Total book value:

103,340 million yen

Period-end unrealized gains (losses):

8,034 million yen

Net assets per unit:

101,400 yen

Unrealized gains per unit:

14,857 yen

NAV per unit (*1):

112,537 yen

P/NAV per (*2):

0.94

Property name

Hotel

Period-end appraisal value:(*1) NAV per unit = (Period-end net assets + Period-end unrealized gains – Total cash distribution)/ Total number of investment units issued and outstanding(*2) P/NAV per ＝Investment unit price / NAV per unit (Investment unit price on January 31, 2019: 106,100 yen)(*3) Figures pertaining to 51% quasi co-ownership interest is indicated for Hakata-eki Higashi 113 Building. The
transfer price is indicated for period-end appraisal value

Property name(2)
Appraisal value at
end of
6th FP(3)
Unrealized
gains(losses)(1)-(2)

Minami-Azabu Shibuya Building

2,973

2,985

3,070

84

Honmachibashi Tower

6,065

5,940

6,950

1,009

1,763

1,831

2,450

618

Nishi-Shinjuku Matsuya Building

2,140
1,707
3,877
3,264

2,310
1,660
3,840
3,250

169
-47
-37
-14

1,970

1,982

2,000

17

GLANSIT Akihabara

2,500

2,517

2,520

2

Best Western Tokyo Nishikasai
Grande

3,180

3,197

3,210

12

Hotel WBF Art Stay Namba

2,000

2,012

2,030

17

Subtotal

20,54420,70020,820119

Urban Park Azabujuban

2,045

2,093

2,280

186

Urban Park Daikanyama

6,315

6,402

7,690

1,287

Urban Park Namba

1,490

1,527

1,610

82

Urban Park Gokokuji

1,460

1,507

1,520

12

Urban Park Kashiwa

1,186

1,250

1,190

-60

Urban Park Ryokuchi-koen

1,550

1,612

1,570

-42

Urban Park Koenji

1,167

1,194

1,170

-24

Subtotal

15,213

15,587

17,0301,442

Iwatsuki Logistics

6,942

6,740

7,140

399

Yokohama Logistics

3,560

3,806

4,060

253

Funabashi Logistics

7,875

7,859

8,650

790

Baraki Logistics

4,700

4,690

4,870

179

Tokoyozawa Logistics

1,300

1,348

1,350

1

Funabashi Nishiura Logistics I

3,000

2,962

3,020

57

821

835

842

6

2,755

2,760

2,850

89

1,795

2,450

654

Shibuya MK Building

2,042

2,097

2,980

882

961

994

1,453

459

Asahi Building

6,320

6,353

7,170

816

Hakata-eki East Place

2,286

2,312

2,570

257

1,450

1,464

1,520

55

Funabashi Nishiura Logistics II

2,580

2,600

2,660

59

Matsubushi Logistics*3

Nihonbashi Hamacho Park
Building
Amusement Media Gakuin
HonkanHigashi Kobe Center Building
Subtotal

7,440
35,605

7,673
36,0487,470
40,743

-203
4,694

(3)
Unrealized
gains(losses)(1)-(2)

2,069
1,750
3,827
3,248

1,725

Hakata-eki Higashi 113 Building(51% quasi-co-ownership interest)(2)
Appraisal value at
end of
6th FP

R&B Hotel Umeda East
Smile Hotel Namba
Best Western Tokyo Nishi-kasai
Best Western Yokohama
Hotel WBF Fukuoka Tenjin
MinamiAlphabet Seven

Logistics

OfficeAcquisition
price

(1)
Period-end
book value

Residential(Unit: million yen)

Acquisition
price

(1)
Period-end
book value

Subtotal
Total

30,95331,00432,782

1,777

102,315

103,340

111,375

8,034

40

Portfolio List

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

6,950 million yen

2,450 million yen

2,450 million yen

2,980 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

Lot area

766.11 m²

1,274.37 m²

589.94 m²(surface right)

1,286.45 m²

620.42 m²(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)

Construction
completion

June 15, 1993

February 8, 2010

May 28, 1987

January 6, 1990

July 31, 1993

October 3, 1987

Properties sold

Property Features⚫ Located in Minami-Azabu, a well⚫ Located in the Yodoyabashi /known, high-class residential area
Hommachi area, one of Osaka’sthat is also home to embassies ofleading office districts.
various countries.
⚫ Situated near facilities such as the⚫ In addition to access by train, theOsaka Chamber of Commerce andarea is well served by bus routes
Industry, MyDome Osaka, and Cityand provides convenient access to
Plaza Osaka, the area has a highvarious locations within central
concentration of office buildings.
Tokyo.
⚫ The residences on the upper floors of⚫ The area is highly appealing to
the building offer excellent views
companies in fashion, mass media,
overlooking landmarks such as Osakaand IT-related fields.
Castle.

⚫ Located in the Nishi-Shinjuku area,⚫ Located in the Akasaka area, one ⚫ Located in the Shibuya area, one ⚫ Located in the Hakata-eki-higashi
which has a high concentration ofof central Tokyo’s leadingof Japan’s leading commercial
area where there is a highoffice buildings.
office/commercial districts.
districts, the property has aconcentration of office buildings.
strong appeal for fashion and IT- ⚫ Thanks to the renovated entrance hall
⚫ In addition to access by train, the area ⚫ The property is expected torelatedcompanies.
is well served by bus routes andattract strong demand fromand common areas on each floor, it
provides convenient access to various
affiliated companies of tenants of ⚫ Following the completion of theappeals to tenant companies from alocations within central Tokyo.
the TBS building, Akasaka Biz
Shibuya Station area
wide range of fields.
Tower, etc.
redevelopment project, further⚫ The property is expected to attract⚫ With the completion of the Hakata
development is expected goingstrong demand from affiliated⚫ Thanks to the popularity of theStation area redevelopment project,forward.
companies of tenants of large-scalearea, location conditions, etc.,
further development is expectedbuildings located in Shinjuku subthere is also strong demand forgoing forward.
center or its surrounding area
the residential units of theproperty.

41

Portfolio List

Asset type

OfficeOfficeOfficeOfficeOfficeOfficeProperty name

Asahi Building

Hakata-eki
East Place

Nihonbashi Hamacho Park
Building

Amusement Media Gakuin
HonkanHigashi Kobe Center
Building

Amusement Media Gakuin
ShinkanAcquisition price

6,320 million yen

2,286 million yen

1,450 million yen

2,580 million yen

7,440 million yen

1,020 million yen

Appraisal value

7,170 million yen

2,570 million yen

1,520 million yen

2,660 million yen

7,470 million yen

1,120 million yen

Structure/Floors

S/SRCB2/12F

SRC 9F

SRC 11FSRC S 8F/B1F

SRC 14F

RC 7F

Location

Yokohama City, Kanagawa

Fukuoka City, Fukuoka

Chuo Ward, Tokyo

Shibuya Ward, Tokyo

Kobe City, Hyogo

Shibuya Ward, Tokyo

Lot area

1,906.86 m2

1,129.86 m2

319.04 m2

433.21 m²

8,488.11 m²

203.43 m²

Total floor areas

12,353.83 m2

6,243.13 m2

2,384.03 m2

1,892.18 m²

25,740.46 m²

913.71 m²

Construction
completion

November 25, 1994

February 24, 1986

July 13, 1992

November 2, 1994

January 6, 1992

January 25, 1999

⚫ Located in the Yokohama Station
West Exit area where there is ahigh concentration of commercial
and office buildings.
⚫ The floors can be subdivided into
smaller spaces, enabling thebuilding to flexibly accommodate
demand from branch offices ofcompanies in various fields.
⚫ With the completion of the
Yokohama Station area
redevelopment project and theExcite Yokohama 22 project,further development is expectedgoing forward⚫ Located in the Hakata Station Eastarea, which has a higher
concentration of offices after thecompletion of redevelopment
projects in front of the station.
⚫ Even more vitalization is expected
for the Fukuoka (Hakata) area withthe start of “Tenjin Big Bang
Project” and the extension of some
Fukuoka City Subway lines.

Property Features⚫ Located in Nihonbashi Hamacho⚫ Stable revenue is expected since ⚫ Provides convenient access to⚫ Stable revenue is expected since it
a vocational school has rented
office and commercial areas
area, allowing easy access to major
has the same tenant as that of
the entire building for many years
since the building is centrallybusiness areas in Central Tokyo andAmusement Media Gakuin Honkan
since the completion
located between Osaka anduse of various railways⚫ The building is appealing to⚫ The building is appealing toKobe, with an 11-minute ride to⚫ A number of major companies havecompanies as the property is locatedcompanies as the property is
Sannomiya Station and 17their head offices in this area, as it is ain an office area with many foreignlocated in an office area withminute ride to Osaka Station
very attractive area for companies inaffiliated companies, IT-related firms
manyforeign-affiliatedfromSettsuMotoyama,thevarious fields and of various sizes
as well as companies in the creative
companies and IT-related firms
closest station to the property
sector such as advertising and⚫ Further development of the area is
as well as companies in the⚫ There is parking space for 180
content creation firms.
expected considering that it not only
creative sector such ascars on the premises and for 112
has characteristics of an office area,⚫ Further development of the area isadvertising and content creation
cars off the premises, which isbut also has characteristics of
expected considering that it is not
firmsvery appealing to a wide range ofresidential and tourism areas
only an office area, but also has⚫ Further development of the area
retail tenants, particularly stores
elements of residential and tourism
is expected considering that it isseeking to attract customers
areas.
not only an office area, but also
has elements of residential andtourism areas.

Acquired on February 1, 201942

Portfolio List

Asset type

Residence

Residence

Residence

Residence

Residence

Residence

Property nameUrban Park Azabujuban

Urban Park Daikanyama

Urban Park Namba

Urban Park Gokokuji

Urban Park Kashiwa

Urban Park Ryokuchi-koen

Acquisition price

2,045 million yen

6,315 million yen

1,490 million yen

1,460 million yen

1,186 million yen

1,550 million yen

Appraisal value

2,128 million yen

7,690 million yen

1,610 million yen

1,520 million yen

1,190 million yen

1,570 million yen

Structure/Floors

SRC with slate roofing
B1/12F

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

RC 14FRC B1F/5F

SRC B1F/8F

RC 8F

Location

Minato Ward, Tokyo

Shibuya Ward, Tokyo

Osaka City, Osaka

Toshima Ward, Tokyo

Kashiwa City, Chiba

Suita City, Osaka

Lot area

417.67 m2

2,469.06 m2

670.39 m2(Of which, 50.85 m2 is contributed to
Toshima Ward as road)

1,597.85 m2

2,804.56 m2

Total floor areas

2,564.94 m2

8,261.29 m2(for 2 buildings combined)

2,776.87 m2

2,451.72 m2

4,243.71 m2

5,854.64 m2

Construction
completion

November 29, 1999

1: November 15, 1987
2: May 30, 2006

January 9, 2013

February 28, 1990

August 28, 1997

March 10,1989

Property Features⚫ Located in Azabu-Juban, an area ⚫ Located in the Daikanyama area,with an elegant image that also
which produces the latest trends.
boasts popular appeal.
⚫ In addition to a stately tiled facade,⚫ In addition to a stately tiled facade,the property is fully equipped withthe property is fully equipped withpremium household facilities.
premium household facilities.
⚫ Adjacent to the Shibuya and Ebisu⚫ Adjacent to the Roppongi area, aareas, which are leading shopping
leading shopping spot in central
spots in central Tokyo.
Tokyo.

942.66 m2⚫ Located near Namba, one of Osaka’s ⚫ Located in an area with strong⚫ Located in the Kashiwa area, aleading commercial areas.
demand from various tenantleading bed town in Chiba, withgroups for single-type
an excellent access to Central⚫ In addition to an elegant facade, theresidences,
due
to
the
location
Tokyo.
building is fully equipped withcharacteristics of having
premium household facilities.
⚫ Further medium- to long-term
concentration of universities andgrowth is expected in the area,⚫ The influx of population into central
junior colleges as well aswith completion of various
Osaka due to the impact of strong inToshima ward having a relatively
redevelopment plans in front ofbound demand has had a stabilizing
high
ratio
of
singlehouseholds.
Kashiwa Station.
effect on occupancy rates.

⚫ Located in the Ryokuchi-koen area,with good traffic accessibility,
providing a lush greenery living
environment such as “Hattori
Ryokuchi-koen”⚫ Popular residential area primarily forfamilies since it is located in the
Hokusetsu area, which has a highlevel of education⚫ Appealing primarily for families sincesome of the units have beenrenovated and since it is equippedwith substantial grade household
equipment.

43

Portfolio List

Asset type

Residential

Property nameUrban Park Koenji

Acquisition price

1,167 million yen

Appraisal value

1,170 million yen

Structure/Floors

RC 4F

Location

Suginami Ward, Osaka

Lot area

988.26 m2

Total floor areas

1.524.34 m2

Construction
completion

October 13, 1987

Property Features⚫ Located in the Koenji area, whichallows for easy access to major
areas in the Tokyo metropolitan
area⚫ With many shopping areas,
discount supermarkets, restaurants
and pubs, having a high appeal toyoung single-person households ofbusiness person and students⚫ Very popular residential area with
its own unique culture, which canbe seen in its cafes, vintage
clothing shops, and clubs with live
music, among other locations

44

Portfolio List

Asset type

Logistics

Logistics

Logistics

Logistics

Logistics

Logistics

Property nameIwatsuki Logistics

Yokohama Logistics

Funabashi Logistics

Baraki Logistics

Tokorozawa Logistics

Funabashi Nishiura Logistics I

Acquisition price

6,942 million yen

3,560 million yen

7,875 million yen

4,700 million yen

1,300 million yen

3,000 million yen

Appraisal value

7,140 million yen

4,060 million yen

8,650 million yen

4,870 million yen

1,350 million yen

3,020 million yen

Structure/Floors

Steel construction, zincplated steel roofing, 5 floors

RC 8F

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

RC S 5F

S 2F

R 2F

Location

Saitama City, Saitama

Yokohama City, Kanagawa

Funabashi City, Chiba

Ichikawa City, Chiba

Tokorozawa City, Saitama

Funabashi City, Chiba

Lot area

15,623.14 m2

10,565.95 m2

19,858.00 m2

6,242.76 m2

8,645.63 m2

7,142.00 m2

Total floor areas

29,729.72 m2

18,395.07 m2(including 263.33 m2 breakareas etc.)

38,871.45 m2(two buildings combined)

12,471.50 m2

5,994.75 m2

14,018.82 m2

Construction
completion

October 29, 2014

October 1, 1994

1: September 25, 1992
2: August 5, 1997

August 14, 2015

April 30, 1999

October 11, 1985

Property Features⚫ A multi-tenant logistics facility⚫ Located in the Iwatsuki area, which ⚫ Located in the Yokohama bay area, ⚫ Located in the Chiba bay area, where ⚫ A multi-tenant logistics facility⚫ Appealing from a standpoint oflocated near the Wangan Ichikawa
used also as a warehouse,
offers access to the central Tokyo,
where there are many logistics
there are many logistics facilities.
securing workforce, as it is
IC
of
the
East
Kanto
Expressway.
locatedaround
8.7
km
from
the
northern Kanto, and Tohoku areas.
facilities.
conveniently located in the Chiba Bay⚫ Equipped with specifications that offer⚫ Enjoys good access to Central
Tokorozawa IC on the Kan-Etsu
area, where there are many logistics⚫ Equipped with specifications that⚫ Equipped with specifications thata high level of versatility, such as
Tokyo as well as the consumption
Expressway.
facilities, and it is located at approx.
offer a high level of versatility, suchoffer a high level of versatility, suchvehicle berths, floor height, andareas throughout Chiba, allowing⚫ Good access to Central Tokyo,
1.4km from the closest train station
as the vehicle berths, floor height,
as vehicle berths, floor height, andcolumn interval.
tenants to respond to the needs ofand also capable of covering ae-commerce operators.
and column interval.
column interval.
⚫ In addition to access to Central⚫ In addition to accessing Central
wide range of destinations for⚫ Located within approx. 5-minuteTokyo, the location allows easy
consumption in the Tokyo⚫ The property is situated in a zone
⚫ In addition to accessing Central
Tokyo, it is possible to access thewalk from Futamata-Shinmachi
access to wide range of areas
Metropolitan area with theof Saitama City that offers
Tokyo, it is possible to access thewider Tokyo area thanks to thestation on the JR Keiyo Line,
openingoftheGaikanthroughout Tokyo via partial opening
incentives for logistics facilities andwider Tokyo area thanks to the
opening of the Tokyo Gaikan
allowing for securement ofExpressway
andtheMetropolitanof the Gaikan Expressway
therefore benefits from
opening of the Shinagawa section
Expressway
employees.
Inter-City Expressway.
considerable government support.
of the Shuto Expressway Central⚫ The facility is provided with highly⚫ Property with highly versatile⚫
Property
withhighlyversatile
specifications, including one
Circular Route.
versatile specifications such as highspecifications, including two
passenger elevator, two freightceiling floors and a pillar span
freight elevators, a floor height ofelevators, a floor height of approx.
approx. 5.5 m-6.0 m, and a pillar
6.5 m and a pillar span of approx. 9span of approx. 9.5 m.
m-11 m.

45

Portfolio List

Asset type

Logistics

Logistics

Property name

Funabashi Nishiura
Logistics II

Matsubushi Logistics

Acquisition price821 million yen

2,755 million yen

Appraisal value

842 million yen

2,850 million yen

Structure/Floors

R 4F

RC 3F

Location

Funabashi City, Chiba

Kita-Katsushika-gun,
Saitama

Lot area

3,964.00 m2

11,580.65 m2

Total floor areas

6,316.32 m2

19,833.47 m2

Construction
completion

Warehouse: Mar. 20, 1991
Plant: May 15, 1972
Office: May 13, 1986

March 31, 1997

Property Features⚫ Appealing from a standpoint of⚫ Located in Matsubushi area, withsecuring workforce, as it iseasy access to nearby areas such
conveniently located in the Chiba
as Saitama Prefecture and Chiba
Bay area, where there are many
Prefecture, in addition to Kita-Kanto,
logistics facilities, and it is locatedJoban, and Tohoku areas
at approx. 1.1km from the closest⚫ Provided with versatiletrain station
specifications, such as loading⚫ In addition to access to Central
berths, cargo elevators, highTokyo, the location allows easy
ceiling, and a pillar span
access to wide range of areas⚫ Back ups from the local government
throughout Tokyo via partial
through activities by Saitama
opening of the Gaikan Expressway
Prefecture to attract companies (the⚫ The facility is provided with highly“Chance Maker Saitama Strategy”)
versatile specifications such as
high-ceiling floors and a pillar span

46

Portfolio List

Asset type

Hotel

Hotel

Hotel

Hotel

Hotel

Hotel

Property nameR&B Hotel Umeda East

Smile Hotel Namba

Best WesternTokyo Nishi-kasai

Best Western Yokohama

Hotel WBF
Fukuoka Tenjin Minami

GLANSIT Akihabara

Acquisition price

2,069 million yen

1,750 million yen

3,827 million yen

3,248 million yen

1,970 million yen

2,500 million yen

Appraisal value

2,310 million yen

1,660 million yen

3,840 million yen

3,250 million yen

2,000 million yen

2,520 million yen

Structure/Floors

RC 9F

S 9F

SRC B1F/9F

SRC B1F/9F

RC 10F

SRC 10F/B1F

Location

Osaka City, Osaka

Osaka City, Osaka

Edogawa Ward, Tokyo

Yokohama City,
Kanagawa

Fukuoka City, Fukuoka

Chiyoda Ward, Tokyo

Lot area

730.26 m2

285.28 m2

1,418.00 m2

782.66 m2

534.94 m2

167.74 m2

Total floor areas

3,945.65 m2

1,711.42 m2

5,293.88 m2

4,686.09 m2

2,281.49 m2

1,081.97 m2

Construction
completion

October 20, 2000

February 6, 2008

March 19, 1991

September 21, 1987

February 20, 2017

September 20, 2017

Property Features⚫ A business hotel located within⚫ Located near Umeda, one of⚫ Located near Namba, one of⚫ A business hotel located within⚫ The hotel is centrally locatedapprox. 4-minute walk frombetween Tenjin and Nakasu,
Osaka’s leading office andOsaka’s leading commercial areas.
approx. a 2-minute walk from
StationontheJR
Keihin“Tsurumi”
thus it is expected to attractcommercial areas.
Nishikasai Station of Tokyo Metro⚫ In addition to excellent access to
Tohoku Line and a 3-minute walktourists and business guests
Tozai
Line.
⚫ With over 200 single-occupancy
Namba, located near Osaka Dome,from “Keikyu Tsurumi” Station on⚫ Demand for hotels is expected torooms, the hotel is able toaddressing multiple business- and ⚫ Excellent location characteristics that
the Keihin Kyuko Line.
increase with a rising number ofaccommodate significant businesstourism-based demand.
can attract a fair amount of Tokyo⚫ Excellent location characteristics thatpassengers using the Fukuoka
and tourism-based demand.
Disney Resort-related leisure⚫ Due to the impact of strong inboundcan attract both business travelers
Airport and development oftravelers, as it stands in a straight-line⚫ Due to the impact of strong indemand in Osaka, further hotel
and leisure travelers, as its location
additional runways
distance of approx. 4 km away frombound demand in Osaka, further
demand is expected.
has good access to the major areas⚫ Completed relatively recently inTokyo Disney Resort.
in Kanagawa including Yokohama
hotel demand is expected.
February 2017.
and Kawasaki as well as to Haneda⚫ A hotel with great appeal to a variety
Airport.
of guests with various types of guest⚫ A hotel with great appeal to a variety
rooms depending on the intendedof guests with various types of guestuse.

⚫ Located in the Akihabara area, one of
the largest tourism spots in Tokyo⚫ Appealing to guests for the purposeof business and tourism as it islocated in a highly convenient andflourishing area
⚫ Offers three types of capsules,
attracting various customers⚫ Completed relatively recently in
September 2017.

rooms depending on the intended
use.

47

Portfolio List

Asset type

Hotel

Hotel

Property nameBest WesternTokyo Nishikasai Grande

Hotel WBF Art Stay Namba

Acquisition price

3,180 million yen

2,000 million yen

Appraisal value

3,210 million yen

2,030 million yen

Structure/Floors

S 8F

RC9F

Location

Edogawa Ward, Tokyo

Osaka City, Osaka

Lot area

657.00 m2

335.31 m2

Total floor areas

2,755.19 m2

2,061.38 m2

Construction
completion

February 7, 2017

April 7, 2017

Property Features⚫ Located in the Nishi Kasai area,⚫ Located in the Namba area, one ofwhich provides the easy access to
the largest commercial areas inmain business and tourism areas in
Osaka
Tokyo.
⚫ Good access from sightseeing⚫ The hotel flexibly responds to the
spots and business district, thereby
needs of many business people
expected to meet huge businessand tourists as it provides various
and tourism demandroom types in accordance with
⚫ Demand for hotels is expected topurpose of use.
increase as inbound demand rises⚫ Completed relatively recently inin Osaka
February 2017.
⚫ Completed relatively recently in
April 2017.

48

Balance of Payments of Individual Properties(Unit: thousand yen)

OFC-01

OFC-03

OFC-04

OFC-05

OFC-06

Minami-Azabu Shibuya Building

Honmachibashi Tower

Nishi-Shinjuku Matsuya Building

Alphabet Seven

Shibuya MK Building

5th FP
Total of revenue real estatelease

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

94,92995,789216,674

217,594

98,436

101,028

75,40676,46575,392

76,076

Lease businessrevenue

88,351

88,399190,425

191,695

87,42092,49371,05371,07470,43570,778Other lease businessrevenue

6,577

7,390

26,24925,89811,015

8,535

4,352

5,391

4,957

5,298

24,52725,60262,89962,47334,096

34,04818,541

18,36318,507

17,490PM fees

5,707

6,067

13,86013,440

6,549

6,717

4,916

4,814

4,819

4,896

Trust fees

398

400

396

400

396

400

396

400

346

350

Utilities expenses

6,793

7,038

25,07025,179

7,251

9,081

4,333

4,715

3,288

3,918

Insurance expenses

114

116

352

358

126

129

98

99

44

45

Repair expenses

969

1,077

582

1,746

1,520

1,408

1,205

669

4,825

2,131

Taxes and public dues

4,575

4,572

19,767

19,766

3,434

3,434

6,219

6,219

4,316

4,316

Other

5,969

6,330

2,869

1,583

14,817

12,877

1,372

1,443

865

1,832

NOI

70,40170,187

153,775

155,120

64,34066,98056,864

58,102

56,88558,586

Depreciation

11,458

11,54644,98644,989

8,043

8,192

4,517

4,568

3,108

3,218

Income from real estate
property leasing

58,94258,640108,788

110,131

56,29758,78752,34753,53453,77755,367

Capital expenditures

2,897

-

2,241

-

22,451

1,553

2,031

-

10,8098,641

NCF

67,50470,187

151,533

155,120

41,88965,426

54,833

58,102

46,07649,944

Total of expenses - realestate lease49

Balance of Payments of Individual Properties(Unit: thousand yen)

OFC-07

OFC-08

OFC-09OFC-10

OFC-11

Hakata-eki Higashi 113 Building
Sold property

Asahi Building

Hakata-eki East Place

Nihonbashi Hamacho Park
Building

Amusement Media Gakuin
Honkan5th FP

5th FP

5th FP

5th FP
Total of revenue real estatelease

6th FP

5th FP

6th FP

6th FP

6th FP

6th FP

75,78467,760218,872

215,210

100,791

97,76045,084

43,682-

Lease businessrevenue

70,32560,927202,101

197,652

81,50887,75945,084

43,682-Other lease businessrevenue

5,459

6,832

16,771

17,557

19,282

10,000---22,61622,052

61,82356,89829,00932,582

10,1607,622-

PM fees

7,719

6,339

15,60915,780

7,930

7,944

769

717

-

Trust fees

346

295

396

400

396

400

394

400

-

Utilities expenses

6,454

6,723

17,29218,805

8,124

8,724

-

-

-

Insurance expenses

121

123

351

357

165

167

121

123

-

Repair expenses

1,251

2,296

6,007

3,611

4,919

6,264

63

-

-

Taxes and public dues

5,294

5,341

15,995

15,994

6,582

6,582

0

0

-

Other

1,428

931

6,169

1,948

890

2,498

8,811

6,381

-

NOI

53,16845,708157,049

158,31171,781

65,17734,92436,059-Depreciation

5,995

5,524

24,24425,395

6,528

6,830

2,837

2,837

-

Income from real estate
property leasing

47,17240,184

132,805

132,916

65,25358,34632,08733,222-

Capital expenditures

2,671

285

45,286

2,868

8,905

5,804

-

-

-

NCF

50,49645,422

111,763

155,442

62,87659,37334,92436,059-Total of expenses - realestate lease*(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

50

Balance of Payments of Individual Properties(Unit: thousand yen)

OFC-12
Office
Total

Higashi Kobe Center Building
5th FP
Total of revenue real estatelease

6th FP

5th FP

6th FP

RSC-01

RSC-02

RSC-03

Urban Park Azabujuban

Urban Park Daikanyama

Urban Park Shin-Yokohama
Sold property

5th FP

5th FP

6th FP

6th FP

5th FP

6th FP-

263,133

1,001,373

1,305,280

54,00356,912

189,587

187,182

76,112

28,529Lease businessrevenue-

231,637

906,707

1,184,218

52,53855,267

181,165

177,059

73,367

27,946

Other lease businessrevenue-

31,49594,665

121,062

1,465

1,645

8,421

10,123

2,745

583

-

77,475282,181358,793

11,758

8,438

34,81945,722

19,7186,434

PM fees-

22,45667,881

90,531

2,085

2,246

8,594

8,605

4,771

1,777

Trust fees

-

321

3,467

4,089

346

350

346

350

346

136

Utilities expenses-

28,02078,609114,278

503

592

4,630

4,996

911

449

Insurance expenses

-

528

1,496

2,092

56

57

193

196

147

102

Repair expenses

-

9,819

21,34529,221

3,021

1,004

4,422

12,119

2,580

1,068

Taxes and public dues-

10

66,18566,249

2,784

2,784

11,218

11,218

4,719

2,600

Other

-

16,31843,19552,331

2,959

1,402

5,413

8,236

6,241

298

NOI

-

185,657

719,191

946,487

42,24548,474

154,767

141,459

56,39322,095

Depreciation-

23,977111,719

140,456

4,749

4,810

12,233

12,353

16,442

8,221

Income from real estate
property leasing-

161,680

607,472

806,030

37,496

43,663

142,533

129,105

39,95013,874

Capital expenditures-

149,810

97,293

168,964

3,917

-

243

6,568

-

-

NCF

-

35,847

621,898

777,522

38,327

48,474

154,523

134,891

56,39322,095

Total of expenses - realestate lease51

Balance of Payments of Individual Properties(Unit: thousand yen)

RSC-05

RSC-06

RSC-07

RSC-08

RSC-09Urban Park Namba

Urban Park Gokokuji

Urban Park Kashiwa

Urban Park Ryokuchi-koen

Urban Park Koenji

5th FP
Total of revenue real estatelease

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

51,932

51,25151,64551,54136,332

37,17954,661

54,27635,24133,545

Lease businessrevenue

49,37848,13848,48850,40635,26936,55051,44351,60131,801

31,416

Other lease businessrevenue

2,553

3,113

3,156

1,134

1,063

628

3,217

2,675

3,439

2,129

11,951

13,072

21,743

11,935

11,133

7,670

15,07015,731

11,5999,528

PM fees

2,566

2,547

3,852

4,107

1,851

1,890

2,201

2,415

1,741

1,744

Trust fees

346

350

396

400

346

350

344

650

394

400

Utilities expenses

482

493

2,589

2,567

799

897

1,967

2,355

1,321

1,494

Insurance expenses

62

63

52

53

83

85

116

119

36

36

Repair expenses

1,680

3,307

4,268

1,979

4,318

464

5,221

5,544

5,719

3,614

Taxes and public dues

2,791

2,791

1,838

1,838

2,954

2,954

10

-

-

-

Other

4,021

3,519

8,745

989

779

1,027

5,208

4,647

2,387

2,237

NOI

39,98038,17929,901

39,60525,19829,50839,59038,544

23,641

24,017

Depreciation

7,515

7,515

4,332

5,002

6,763

6,918

6,864

7,227

2,416

2,425

Income from real estate
property leasing

32,46430,66325,56934,603

18,435

22,59032,72631,317

21,225

21,591--

21,126-

12,162

-

5,918

6,471

-

1,877

39,98038,1798,775

39,605

13,03529,50833,672

32,072

23,641

22,139Total of expenses - realestate lease

Capital expenditures
NCF

52

Balance of Payments of Individual Properties(Unit: thousand yen)
Residence
Total
5th FP
Total of revenue real estatelease

6th FP

LGC-01

LGC-02

LGC-03

LGC-04

Iwatsuki Logistics

Yokohama Logistics

Funabashi Logistics

Baraki Logistics

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

549,514500,419

200,802203,920

255,664

261,582

Lease businessrevenue523,452

478,386

187,713

187,713240,079

241,779

Other lease businessrevenue

26,062

22,03313,088

16,207

15,58519,802

137,794

118,533

33,79936,42955,78254,025PM fees

27,66525,335

5,987

5,650

11,90811,308Trust fees

2,869

2,986

346

350

396

400

Utilities expenses

13,204

13,846

13,08816,125

14,156

17,737

Insurance expenses

749

715

271

275

390

397

Repair expenses

31,232

29,101

70

192

5,764

1,450

Taxes and public dues

26,31724,187

13,835

13,83522,70922,709Other

35,75622,359

200

-

455

22

NOI

411,720

381,885

167,002

167,491

199,882

207,556

Depreciation

61,31854,474

46,46746,532

26,695

26,836

Income from real estate
property leasing

350,401

327,411

120,535

120,958

173,187

180,720

Capital expenditures

43,36914,918

1,955

-

4,744

-

NCF

368,350

366,967

165,046

167,491

195,138

207,556

Total of expenses - realestate lease*(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

*5th FP

6th FP**

53

Balance of Payments of Individual Properties(Unit: thousand yen)

LGC-05

LGC-06

LGC-07

LGC-08

Tokorozawa Logistics

Funabashi Nishiura Logistics I

Funabashi Nishiura Logistics II

Matsubushi Logistics

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

Total of revenue real estate
lease

Logistics facility
Total
5th FP

6th FP

953,094970,091

Lease businessrevenue

912,876

918,040

Other lease businessrevenue

40,21752,050157,170

159,785

PM fees

30,961

29,835

Trust fees

3,015

3,050

Utilities expenses

39,17450,325

Insurance expenses

1,406

1,438

Repair expenses

11,534

8,940

Taxes and public dues

62,936

62,947

Other

8,141

3,247

NOI

795,923

810,306

Depreciation

140,437

143,764

Income from real estate
property leasing

655,486

666,542

Capital expenditures

120,566

11,082

NCF

675,356

799,223

Total of expenses - realestate lease**(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

*

*

*

*

*

*

54

Balance of Payments of Individual Properties(Unit: thousand yen)

HTL-01

HTL-02

HTL-03

HTL-04

HTL-05R&B Hotel Umeda East

Smile Hotel Namba

Best WesternTokyo Nishi-kasai

Best Western
Yokohama

Hotel WBF
Fukuoka Tenjin Minami

5th FP
Total of revenue real estatelease

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

5th FP

6th FP

65,57265,56543,19742,69098,82985,06180,39380,731-

65,57265,452

43,19742,471

98,82984,60080,39380,400

-

-

112

-

219

-

461

-

331

-

7,076

12,975

4,530

4,913

10,76811,754

8,428

7,801

-

PM fees

742

742

660

660

1,200

1,200

1,200

1,200

-

Trust fees

346

350

544

550

396

400

396

400

-

Utilities expenses

8

13

-

-

-

-

-

-

-

Insurance expenses

111

113

53

53

124

126

105

106

-

Repair expenses

410

5,210

755

1,223

1,070

2,049

2,042

1,408

-

5,431

5,431

2,283

2,282

7,955

7,954

4,659

4,659

-

25

1,113

234

143

22

23

24

26

-

NOI

58,49652,58938,667

37,77788,06073,307

71,96572,930-Depreciation

9,203

9,411

12,064

12,177

9,781

10,234

11,283

11,621-

Income from real estate
property leasing

49,29343,17826,602

25,59978,27863,07260,682

61,308--23,792

5,279

2,114

4,913

29,464

9,757

11,991-58,496

28,79733,38735,662

83,146

43,842

62,20760,938-

Lease businessrevenue
Other lease businessrevenue
Total of expenses - realestate lease*
Taxes and public dues
Other

Capital expenditures
NCF(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

55

Balance of Payments of Individual Properties(Unit: thousand yen)

HTL-06

HTL-07

HTL-08

GLANSIT Akihabara

Best WesternTokyo Nishikasai Grande

Hotel WBF Art Stay Namba

5th FP
Total of revenue real estatelease

6th FP

5th FP

6th FP

5th FP

6th FPHotel
Total
5th FP

Total of all

6th FP

5th FP

6th FP

--

56,390-287,993448,544

2,791,975

3,224,335

Lease businessrevenue--

56,390-287,993

447,420

2,631,029

3,028,065

Other lease businessrevenue

-

-

-

-

-

1,124

160,946

196,270

-

-

1,186

-

30,803

41,794

607,950

678,906

PM fees

-

-

797

-

3,802

6,716

130,310

152,418

Trust fees

-

-

321

-

1,684

2,923

11,036

13,049

Utilities expenses

-

-

-

-

8

13

130,997

178,464

Insurance expenses

-

-

51

-

394

555

4,046

4,801

Repair expenses

-

-

-

-

4,277

9,891

68,38977,155

Taxes and public dues

-

-

9

-

20,32920,351

175,769

173,735

Other

-

-

5

-

306

1,342

87,39979,280NOI--55,204-

257,189

406,750

2,184,025

2,545,429

Depreciation

-

-

9,047

-

42,33370,772355,808

409,467

Income from real estate
property leasing--

46,156-

214,856

335,978

1,828,216

2,135,962

Capital expenditures

-

-

-

-

19,951

67,363281,180

262,328

NCF--

55,204-

237,238

339,386

1,902,844

2,283,100

Total of expenses - realestate lease*(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

*56

Other assets under management (as of March 15, 2019)<Mezzanine loan debt investment>
NumberType

Underlying asset, etc.

Name of the security（asset overview）

Acquisition
price(million yen)

Asset nameLocationInterest rate (Note)

MEZ-01

Mezzanine(Subordinated bonds)

Star Asia Mezzanine Loan
Debt Investment Series 1

400

Haneda Hotel

Ota-ku, Tokyo

Base rate +5.0%

MEZ-03Mezzanine(Subordinate Beneficiary Interest)

Star Asia Mezzanine Loan
Debt Investment Series 3

126

The Royal Garden Residence
Shirokanedai

Minato-ku, Tokyo

Base rate +5.0%

MEZ-04

Mezzanine(Subordinate loan claims)

Star Asia Mezzanine Loan
Debt Investment Series 4300

Premier Kaigan Building

Minato-ku, Tokyo

Base rate +5.0%

Total

826

<Silent partnership equity interest>
Number

TKI-01

TKI-02

Investments securities

GK SAPR8 subordinated silent partnership equity interest

GK SAPR7 silent partnership equity interest (acquired on February 28, 2019)

Total

Investment
amount(million yen)

Underlying asset, etc.
Property nameLocation

Urban Park Mitsuike Koen

Yokohama-shi, Kanagawa

Urban Park Tokiwadai Koen

Yokohama-shi, Kanagawa

OHA Building

Tachikawa-shi, Tokyo

100

100

200

57

Status of Unitholders at the End of 6th Fiscal Period ended January 2019

List of major unitholders (Top 10)

Number of investment units by attribute: Total 540,824 units

6th FP

Unitholder name (Note 20)

Number ofinvestment units

Holding
ratio(Note 21)

5th FP
Individual

Financial institution

Domestic corporation

Ratio

Unitholders' register
No. ofRatio
investment units

No. ofinvestment units

Individual

35.5%

166,88934.4%

186,112Financial institution

22.6%

106,301

25.2%

136,030

Domestic corporation

12.2%

57,47910.8%

Foreign

27.8%

130,607

27.5%

Securities company

2.0%

9,348

2.1%

11,561The Master Trust Bank of Japan, Ltd.
(Trust account)

51,133

9.5%

2Star Asia Capital Japan GK

39,480

7.3%

3

Japan Trustee Services Bank, Ltd(Trust account)

34,467

6.4%

4

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

15,2392.8%

5SSBTC CLIENT OMNIBUS ACCOUNT

14,370

2.7%

6

Star Asia Capital I LLC

14,325

2.6%

6

Star Asia Capital II LLC

14,325

2.6%

6

Star Asia Capital III LLC

14,325

2.6%

6

Star Asia Capital IV LLC

14,325

2.6%

9

NORTHERN TRUST CO. (AVFC) RE 10PCT TR
EATY ACCOUNT

13,6612.5%

225,650

41.7%

Securities company

End of 6th FP

End of 5th FP
Category

Foreign

1

Sponsor Group is excluded
No. ofRatio
investment units
41.9％
186,11230.6％

136,030

58,601

4.3％

19,121

148,520

20.5％

91,0002.6％

11,561

Number of unitholders by attribute: Total 19,371 units

6th FP
5th FP
Individual

Financial institution

Domestic corporation

Ratio

Securities company

End of 6th FP

End of 5th FP
Category

ForeignNo. ofpersons/entities

Unitholders' register
No. ofRatio
persons/entities

Sponsor Group is excluded
No. ofRatio
persons/entities

Individual

97.3%

17,03997.4%

18,86097.4％

18,860Financial institution

0.2%

37

0.2%

40

0.2％

40

Domestic corporation

1.6%

281

1.6%

319

1.6％

318

Foreign

0.7%

124

0.7%

126

0.6％

120

Securities company

0.1%

25

0.1%

26

0.1％

26

Total

58

7. Notes

59

<Notes>
Note 1In this material, amounts less than specified units are rounded down while ratios are rounded to a specified unit.

p1

Note 2“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 and the three prefecturesof Kanagawa, Saitama and Chiba for residential properties, logistics facilities and hotels.
“Middle-size assets” are properties with acquisition prices of less than JPY10bn. The same applies hereafter.

p5

Note 3Calculated by dividing the sum of actual DPUs from the 1st to 6th fiscal periods and forecasted DPUs from the 6th to 8th fiscal periods by eight.

p11

Note 4

Change in the closing value of the TSE REIT Index on the Tokyo Stock Exchange from April 20, 2016 to August 10, 2018 is relativized based on the assumption that closing
value (1,887.75) of the TSE REIT Index on April 20, 2016 is the same as the closing investment unit price of SAR of ¥98,300 on the same date.

p12

Note 5

Information excluding Hakata-eki Higashi 113 Building sold on February 1, 2019 is indicated.

p12

Note 6

Asset size as of the end of the 3rd fiscal period is the amount excluding Oak Minami-Azabu sold at the beginning of the 4th fiscal period.

p13

Note 7

Gain on sale per unit is calculated by dividing using the total number of investment units issued as of the end of the period in which each gain on sale is recorded.

p13

Note 8Gain on sale in the 6th fiscal period is due to the transfer of 49% quasi-co-ownership interest in the real estate trust beneficiary interest in Hakata-eki Higashi 113 and theremaining 51% of quasi-co-ownership interest in real estate trust beneficiary interest was transferred in the 7th fiscal period.

p15
P25
p34

Note 9As of the date of this material, each of above properties is not acquired by SAR and there is no guarantee that SAR will acquire each of above properties.

p19

Note 10

Tenants who concluded new contracts when the property was vacant at the beginning of the period or upon acquisition are counted as “increase of rent”.
Increase/decrease rate is calculated by dividing the amount calculated by deducting the total monthly rent of previous tenants from the total monthly rent of new tenants by
the total monthly rent of previous tenants (excluding warehouse portion). Moreover, as for tenants who concluded new contracts when the property was vacant at the
beginning of the period or upon acquisition, the total monthly rent of previous tenants is calculated by assuming that the lower limit of the range of nearby market rent unit
price is equal to the unit rent of previous tenants.

p19

Note 11

Ratio of the increased portions is calculated as a percentage of total rent of tenants’ rents before renewal as the denominator

p19

Note 12

Indexed for each property with the average price per tsubo in the period pertaining to the acquisition date of the property as 100.

p19

Note 13

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 the market rent and each tenant's contract rent. Hakata-eki Higashi 113 Building which was sold at the beginning of the 7th fiscal period is excluded. The figure forAmusement Media Gakuin Honkan is calculated based on net leased area.

p20

Note 14

Calculated by abstracting the residential section.

p20

Note 15

Indexed for each property with the average price per tsubo in the period pertaining to the acquisition date of the property as 100.

p21

Note 16

As of the date of this document rents are of a fixed rent system but it has been agreed that a change will be made to a fixed + floating rent system from January 2020.

p22

Note 17

The interest rates shown take into consideration the effects of interest rate swaps (fixing of interest rates).

p22

Note 18

JBA 1-month yen TIBOR

p27

Note 19

51% quasi-co-ownership interest in Oak Minami Azabu sold at the beginning of the 4th fiscal period is included in the figure as of the end of the 3rd fiscal period.

p58

Note 20

Star Asia Capital Japan and Star Asia Capital I-IV LLC are the sponsor group companies.

p58

Note 21

The ratio of investment units held expressed as a percentage to total number of investment units issued and outstanding is rounded to the nearest first decimal place.

60

Disclaimer
This document has been prepared to provide information and is not for soliciting and inviting investment in or recommendingtransaction of certain products. SAR does not guarantee the accuracy or completeness of the information provided in thisdocument although effort has been made to provide correct information based on information available to SAR. Moreover,please note that the contents of this document are subject to change or removal without prior notice. Duplication andreproduction, etc. of the contents contained in this document without prior consent is prohibited. This document includes
graphs, data, etc. publicly disclosed by third parties. Furthermore, the document also includes analysis, judgement and other
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■ 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
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