CODE3468
August 14, 2019
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Director(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative : Atsushi Kato, President and CEO

Supplementary Explanatory Material

Contact : Akiko Kanno, Director and CFO
TEL: +81-3-5425-1340

Regarding Timely Disclosure Announced on August 7, 2019
Proposal for Merger between Sakura Sogo REIT Investment Corporation and Star Asia Investment Corporation
Merger Ratio ~ Supplementary Explanation Regarding Increased Post-Merger Distribution<Timely Disclosure Announced on August 7, 2019>⚫

Star Asia Group Announces Detailed Proposal for Merger between Sakura Sogo REIT and Star Asia Investment Corporation

This document was drafted by Lion Partners GK and presented to the unitholders of Sakura Sogo REIT Investment Corporation.
This is an English translation of the announcement in Japanese dated August 14, 2019. However, no assurance or warranties
are given for the completeness or accuracy of this English translation.

Unitholders of Sakura Sogo REIT Investment Corporation

Proposal for Merger between Sakura Sogo REIT Investment Corporationand Star Asia Investment Corporation
Merger Ratio ~ Supplementary Explanation Regarding Increased PostMerger Distribution
August 14, 2019

Post-Merger Increased Distribution (Supplement No.1)◼ Based on the proposed merger ratio and the expected cost synergies, the post-merger normalized DPU(note1) isassumed to be ¥2,886. The normalized DPU an investor holding 1 SSR unit would receive would be ¥2,539 based on
the post-merger normalized DPU(note1)Normalized DPU refers to the average amount of distribution per* In this material, the merger ratio is set at 1:0.88 in order to simplify unit that excludes temporary factors such as gains on the sale ofproperties＜From the document released on August 7, 2019＞the calculation, but the actual ratio is assumed to be 1:0.88 or more.

Post-Merger DPU (for SSR’s Unitholders)

Post-merger normalized
distribution calculated on a
per-SSR unit basis

Post-merger
Further Acceleration＝

Short-term DPU growth ¥ 2,539~
c. ¥ 100~

Post-merger
normalized DPU¥ 2,427¥ 2,886

Normalized DPU
growth after themerger×
Short-term

Merger proposal(May. 10)

Medium- tolong-term➢ SAR’s post-merger normalized DPU of ¥2,539 announced on August 7, 2019 iscalculated using the formula shown on the right.
➢ ¥2,539 is the normalized distribution amount calculated on a per-SSR unit basis tomake the increase in distribution clearer.

＜Allocation of post-merger investment units ~example of an investor holding 100 units of SSR＞
Number ofSSR units held

100 units
Current expecteddistribution based on SSR’s
DPU forecasts

×¥ 2,539

Proposed Merger Ratio

0.88
Post-Merger＝➢ Post-merger normalized
distribution calculated on a perSSR unit basisNumber of
Post-Merger REIT units

88 units
Expected distribution basedon the merger ratio calculated
by LPGK¥ 242,700¥ 253,968（¥2,427×100 units）（¥2,886×88 units）

Merger Ratio

1：0.88➢ Post-merger normalized DPU
calculated based on the merger
ratio proposed by Star Asia
Group and the expected costsynergies➢ Merger Ratio calculated by Star
Asia Group➢ The merger ratio will be
determined based on historicalunit price performance and amerger ratio calculated byfinancial advisors and otherthird parties＜About fractional investment units＞➢ The number of investment units to be delivered
may be a fraction of one unit for some of theinvestors subject to allotment➢ Fractional investment units are to be sold on themarket in accordance with the provisions of law,and proceeds from the sale will be distributed tothe investors who have received those fractionalunits➢ SAR will consider unit splits at appropriate ratios

1Post-Merger Increased Distribution (Supplement No.2)◼ Below is the supplementary information for “Proposal for Merger between Sakura Sogo REIT Investment Corporationand Star Asia Investment Corporation Merger Ratio ~ Star Asia Group’s Unitholder Friendly Concept”＜From the document released on August 7, 2019＞

Post-Merger DPU (for SSR’s Unitholders)
DPU excluding revenue from
売却益を除く1口当たり分配金
property sales

Revenue from property sale
売却益
per unit¥ 477＝

Additional Gain of ¥477
can be realize throughasset replacement

PostMerger

Additional post-merger
distribution calculated on a
per-SSR unit basis¥ 477

Additional post-merger
distribution¥ 2,427

Merger proposal(May. 10)¥ 542¥ 2,539

Short-term

Medium toLong-term➢ Star Asia Group intends to support SAR's asset replacement strategy and assesses thefair value of all assets held by SAR. A gain of approximately ¥920 million would berealized if "Alphabet Seven" were replaced.
➢ If the asset replacement is completed after the merger and the gains on the sale arerecognized over 2 fiscal periods, an increase of approximately ¥477/FP (Total DPU
increase of about ¥954 over the 2 fiscal periods) in post-merger DPU is expected.
➢ In the actual asset replacements, SAR will conduct a thorough process which results inmaximum value for unitholders

×Anticipatedmerger ratio

1：0.88The amount calculated byconverting the amount of increasein DPU that would be realized
through asset replacement of"Alphabet Seven" with Star Asia
Group, into 1 investment unit ofSSR
The expected amount of increase in
the post-merger DPU from thereplacement of "Alphabet Seven"
The amount of increase in the postmerger DPU of ¥542 is calculated
as follow:¥542= Gains from the sale of“Alphabet Seven” (49% quasi-coownership), divided by expected
post-merger outstanding units=¥452 million / 833,865 units
Expected post-merger outstanding
units are calculated as follow:
833,865 units= SAR’s outstanding
investment units plus SSR’s
outstanding investment units,multiplied by the expected merger
ratio =540,824 units + (333,001units × 0.88)

No final determination yet on the replacement of “Alphabet Seven” by SAR- Star Asia Group will continue to provide robust support for the merged REIT in several ways. As an example, in order to facilitate flexible
asset transfers, Star Asia Group periodically calculates the acquisition prices for all properties held by SAR to determine value-add
opportunities to maximize DPU and NAV- A gain of approximately ¥920 million could be realized if "Alphabet Seven" is realized through asset replacement with Star Asia Group- The above chart shows the additional DPU increase of ¥542 (per-SSR unit basis: ¥477), if the asset is transferred over 2 fiscal periods- When executing asset replacements, SAR will conduct a thorough process which results in maximum value for unitholders
2Disclaimer<Inquiries regarding this material>
Lion Partners GK◼ Tel: 03-4577-7871◼ E-mail: info＠starasia-lp.com◼ Video concerning this material:
https://www.youtube.com/channel/UCYasJn4xrns2fhyZFKMAELw◼

This document has been prepared solely for the purpose of providing information relating to Lion Partners GK’s proposal of a merger
between SSR and SAR, and not for offering, soliciting or selling any specific product◼

Please refer to "Star Asia Group Announces Detailed Proposal for Merger between Sakura Sogo REIT and Star Asia Investment
Corporation" announced on August 7, 2019◼

Copying, reprinting or any other use of the contents of this document without prior approval is strictly prohibited. This document includes
charts, graphs, data, etc. publicized by third parties. It also includes descriptions related to analysis, judgments and other opinions byStar Asia Group