December 5, 2016
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Officer(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato
Representative Director and President
Contact: Toru Sugihara
Director, and General Manager of Financial
Management Department
TEL: 03-5425-1340

Notice Concerning Acquisition and Transfer of Real Estate Beneficiary Interests in TrustStar Asia Investment Management Co., Ltd. (the “Asset Manager”), to which Star Asia Investment Corporation(“SAR”) entrusts the management of its assets, announces today its decision to acquire and transfer real estate
beneficiary interests in trust (collectively, the “Transactions”) as follows.
SAR has been discussing various measures to “maintain and enhance cash distribution per unit” for“maximization of unitholders’ value” (please refer to Reference Material 4 attached at the bottom of this press
release for further details). The Transactions will be implemented as part of such measures in the light of thelevel of the investment unit price, aiming for the following.
Strengthening of portfolio
The occupancy rate of Urban Park Yoyogikoen as of today is 100%. However, since the average unit
area is large (257.5m2) and the total number of units is only 6, income fluctuation is considered tobe relatively large when compared with Urban Park Gokokuji. In contrast, Urban Park Gokokuji is anapartment in central Tokyo with single-type units totaling as many as 112, for which is believed tohave strong demand. Therefore, SAR believes the incorporation of Urban Park Gokokuji into theportfolio will contribute to further diversification of tenants as well as to income stability over the
medium- to long-term.
Realizing unrealized gain through transfer of an owned asset and proving the value of an owned asset
The planned transfer price of Urban Park Yoyogikoen is 1,100 million yen, which is above theacquisition price (875 million yen) and the appraisal value at the end of the first fiscal period (1,000
million yen). Such will contribute to an increase in cash distribution per unit for the fiscal period
ending July 2017 (3rd fiscal period), and is believed to be an example of proving the value of anasset owned by SAR in the real estate market.
For specific measures currently discussed by the Asset Manager for “Strategy to Maximize Unitholders’ value ,”please refer to attached Reference Material 4.
Going forward, SAR will, including the measures described, consider various ways and means to contribute tounitholders’ value regardless of precedent, and implement them after verification. Please refer to attached
Reference Material 5 providing information related to the Transactions and Reference Material 6 describing
measures that have been implemented and change in investment unit price.

11. Overview of the asset to be acquired and the asset to be transferred(1) Overview of the asset to be acquired
Asset to be acquired
Property name
Asset type
Contract date
Planned acquisition dateSellers
Planned acquisition price(Note 2)Acquisition financing

Beneficiary interests in trust assets comprised mainly of real estate
Urban Park Gokokuji (previous name: Joytel Gokokuji) (Note 1)
Residential property
December 5, 2016
February 1, 2017
GK SAPR4
1,460 million yen

Part of the payment received for the transfer of Urban Park Yoyogikoen andborrowingSpecial notations
SAR plans to settle the payment for the acquisition on February 1, 2017 andthe acquisition falls under forward commitment, etc. It is set forth that wheneither SAR or the seller violates the agreed matters or declared sworn
matters stipulated in the “sale and purchase agreement of beneficiaryinterest in trust” and the violation is so material that the purpose of theagreement is recognized as unachievable, the counterparty shall be able tocancel the agreement after notifying the violating party with sufficient periodof time specified; and that the party which cancelled the agreement shall beable to request the counterparty, concurrently with the cancellation, to pay
penalty equivalent to 10% of the sale and purchase price.
(Note 1) The property name of Joytel Gokokuji described in “Notice Concerning Obtainment of Preferential
Negotiation Rights Pertaining to Acquisition of Assets” announced on July 8, 2016 was changed to
Urban Park Gokokuji.
(Note 2) Indicated is the sale and purchase price of the asset to be acquired stated in the sale and purchaseagreement for the asset to be acquired (excluding acquisition-related expenses, consumption tax
and local consumption tax).

・(2) Overview of the asset to be transferred
Asset to be transferred
Property name
Asset type
Contract date
Planned transfer date
Planned buyer
Planned transfer price(Note 2)
Book value (Note 3)
Gain/loss on sale (Note 4)
Special notations

Beneficiary interests in trust assets comprised mainly of real estate
Urban Park Yoyogikoen
Residential property
December 5, 2016
February 1, 2017
Not disclosed (Note 1)
1,100 million yen

902 million yen
154 million yen
SAR plans to settle the payment for the transfer on February 1, 2017 and thetransfer falls under forward commitment, etc. It is set forth that when either
SAR or the buyer violates the agreed matters or declared sworn matters
stipulated in the “sale and purchase agreement of beneficiary interest in
trust” and the violation is so material that the purpose of the agreement isrecognized as unachievable, the counterparty shall be able to cancel theagreement after notifying the violating party with sufficient period of time
specified; and that the party which cancelled the agreement shall be able torequest the counterparty, concurrently with the cancellation, to pay penalty
equivalent to 10% of the sale and purchase price.
Deposit of 55 million yen set forth in the “sale and purchase agreement ofbeneficiary interest in trust” is scheduled to be paid by the buyer on thecontract date of the agreement, and SAR will, after the payment, have a saleand purchase price receivable of 1,045 million yen, which is the amount after
deducting deposit-equivalent from the planned transfer price.
Part of the payment received for the transfer is scheduled to be used tofinance the acquisition of Urban Park Gokokuji.
(Note 1) The information is undisclosed as consent to disclosure has not been obtained from the planned buyer.
(Note 2) Indicated is the sale and purchase price of the asset to be transferred stated in the sale and purchaseagreement for the asset to be transferred (excluding transfer-related expenses, consumption tax andlocal consumption tax).

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(Note 3) Indicated is the book value as of July 31, 2016.
(Note 4) Please refer to “Notice Concerning Revision to Forecasts for Operating Results and Distribution for
the Fiscal Period Ending July 31, 2017” announced today.

2. Reason for the Transactions
SAR is to conduct the Transactions pursuant to “the asset management targets and policies” provided in SAR’s
Articles of Incorporation. The reasons for the acquisition and transfer are as follows.
(1) Acquisition of Urban Park Gokokuji
Urban Park Gokokuji is a residential building for singles located an approximately 7-minute walkfrom Zoshigaya Station on the Tokyo Metro Fukutoshin Line and an approximately 20-minute walkfrom Gokokuji Station on the Tokyo Metro Yurakucho Line. The occupancy rate as of the end of
October 2016 is 94.15%, and since the occupancy rates in the past are stable, the property is
believed to contribute to income stability of the portfolio.
The neighboring area of Urban Park Gokokuji has seen rejuvenation in the whole area including
Minami-Ikebukuro due to completion of the new ward office of Toshima ward, etc. In addition,
since the area has a number of universities and junior colleges concentrated, such as Waseda
University, Japan Women’s University and Gakushuin University, and access to Ikebukuro and otherbusiness areas via Tokyo Metro Fukutoshin Line and Yurakucho Line is excellent, the property
boasts strong appeal mainly to students and young single workers.
Urban Park Gokokuji was subject to the Sale Preferential Negotiation Right Agreement concluded
with the Sponsor group and the preferential negotiation right was exercised this time around.
(2) Transfer of Urban Park Yoyogikoen
Urban Park Yoyogikoen is a residential building for families located an approximately 6-minute walkfrom Yoyogi-Hachiman Station on the Odakyu Line and Yoyogi-koen Station on the Tokyo Metro
Chiyoda Line. The occupancy rate as of the end of November 2016 reached 100% as a result ofleasing activities based on the accurate and precise leasing strategy.
The Yoyogikoen/Yoyogiuehara area where Urban Park Yoyogikoen stands is not only closely locatedto Tokyo’s leading commercial areas Shibuya and Shinjuku, but also carries an image as a “high-end
residential area” due to a concentration of highly-priced condominiums and embassies among
other reasons. Thus the property has an appeal especially to high-income family households andthe current occupancy rate stands at 100%. However, since it is a high-end rental apartment, area
per unit is large and the total number of units is few (6 units in total), income fluctuation is
expected to be large when compared with Urban Park Gokokuji. Urban Park Yoyogikoen also
demonstrates “potential value as a high-end condominium” due to its size, total number of units
and characteristics of the neighboring area, and thus was decided to be transferred to the planned
buyer who highly evaluates such potential value.
The Transactions seek an increase in cash distribution per unit to contribute to SAR’s basic policy of“maximization of unitholder’s value” and is believed to lead to strengthening of the portfolio.

33. Description of the asset to be acquired
Property no.

RSC-06

Residential
property

Property nameUrban Park Gokokuji

TypeBeneficiary interest in trust

Trustee

Sumitomo Mitsui Trust
Bank, Limited

Overview of specified asset
Type of specified asset

From February 23, 2007
To May 31, 2019
Date of conclusion of
1,460 million yen
sale and purchase
December 5, 2016agreement
1,480 million yen
Sellers
GK SAPR4
346-1 Zoshigaya, Toshima-ku, Tokyo
1-5-4 Zoshigaya, Toshima-ku, Tokyo
Approximately 7-minute walk from Zoshigaya Station on the Tokyo Metro Fukutoshin Line
Proprietary ownership
Neighborhood commercial
942.66m2 (Note 1)
Use district
district

Period set for beneficiary interest in trust (planned)
Planned acquisition priceAppraisal value
Location
Indication of residential address
Nearest station
Land
Type of ownership
Site area

Building(Note 3)

Building coverage
ratio

80%

Type of ownership

Proprietary ownership

Floor area ratio

Total floor area

2,451.72m2

Use

Construction
completion

February 28, 1990

Structure and floors

Property management company
Haseko Livenet Inc.
(planned)
Type of master lease (planned)
Status of leasing (as of November 30, 2016) (Note 4)

Master lease
company (planned)
Pass-throughTotal leasable area

1,964.04m2

Total leased area

1,849.23m2

Total number oftenants
Monthly rent(including common
area maintenance fee)
8,256,500 yen

300% (Note 2)

Apartment complex,
office, parking,warehouses, building
manager room
Reinforced concrete
structure
1 floor below ground / 5
floors above ground
Haseko Livenet Inc.

98
7,926 thousand yen

Security and guarantee deposits
Occupancy rate
End of August
End of September
End of October 2016
End of November 2016
2016
2016
95.83%
95.83%
94.15%
92.48%
Matter on seismic capacity
PML: 9.2%
Appraisal firm
Japan Real Estate InstituteStatus of collateral
SAR has no plan to offer it as collateral after the acquisition.
Special notations
SAR plans to settle the payment for the acquisition on February 1, 2017 and the acquisition falls under forward commitment,
etc. It is set forth that when either SAR or the seller violates the agreed matters or declared sworn matters stipulated in the“sale and purchase agreement of beneficiary interest in trust” and the violation is so material that the purpose of theagreement is recognized as unachievable, the counterparty shall be able to cancel the agreement after notifying the violating
party with sufficient period of time specified; and that the party which cancelled the agreement shall be able to request thecounterparty, concurrently with the cancellation, to pay penalty equivalent to 10% of the sale and purchase price.
(Note 1) 50.85m2 of the site area has been provided to Toshima ward as a road (special ward road) free of charge.
(Note 2) Due to the building standing on two different use districts (neighborhood commercial district and category 1
medium-to-high-rise exclusive residential district) and the widening of the front road, the weighted averaged floorarea ratio is 278.68%.
(Note 3) The building is under sectional ownership comprised of 9 sections, all of which are subject to acquisition. Indicated is
the information of the entire building.
(Note 4) Indicated figures are based on the information as of the end of November 2016, provided by the seller.

・44. Description of the asset to be transferred
Property nameUrban Park
Yoyogikoen

Type of specified asset

Beneficiary interest in trust

TrusteeAcquisition price875 million yen

Acquisition date

Sumitomo Mitsui Trust
Bank, Limited
January 14, 2016

Appraisal value

1,000 million yen

Planned buyer

Not disclosed (Note)

Property no.

RSC-03

Type

Residential
property

Overview of specified asset

Location

34-25 Yoyogi, Shibuya-ku, Tokyo

Indication of residential address

5-34-24 Yoyogi, Shibuya-ku, Tokyo

Nearest station
Land

Building

Approximately 6-minute walk from Yoyogi Hachiman Station on the Odakyu Line
Type of ownership

Proprietary ownership

Site area

894.46m2

Use district

Category 2 low-rise
exclusive residential
district60%

Floor area ratio

200%

apartment complex
Reinforced concrete
structure
1 floor below ground / 4
floors above ground
House Mate Partners Co.,Ltd.

Building coverage
ratioType of ownership

Proprietary ownership

Total floor area

2,155.28m2

Use

Construction
completion

July 15, 1998

Structure and floors

House Mate Partners Co., Ltd.

Master lease company

Property management company

Status of leasing (as of end of November 2016)
Total leasable area

1,545.36m2

Total leased area

1,545.36m2

Total number oftenants
Monthly rent (includingcommon area
maintenance fee)
17,800,000 yen

Security and guarantee deposits

54,925 thousand yen

Occupancy rate
End of August
2016
78.58%End of September
End of October 2016201678.58%
78.58%
Japan Real Estate InstituteEnd of November 2016

100.00%Appraisal firm
Special notations
SAR plans to settle the payment for the transfer on February 1, 2017 and the transfer falls under forward commitment, etc. It isset forth that when either SAR or the buyer violates the agreed matters or declared sworn matters stipulated in the “sale andpurchase agreement of beneficiary interest in trust” and the violation is so material that the purpose of the agreement isrecognized as unachievable, the counterparty shall be able to cancel the agreement after notifying the violating party with
sufficient period of time specified; and that the party which cancelled the agreement shall be able to request the counterparty,
concurrently with the cancellation, to pay penalty equivalent to 10% of the sale and purchase price.
Deposit of 55 million yen set forth in the “sale and purchase agreement of beneficiary interest in trust” is scheduled to be
paid by the buyer on the contract date of the agreement, and SAR will, after the payment, have a sale and purchase pricereceivable of 1,045 million yen, which is the amount after deducting deposit-equivalent from the planned transfer price.
Furthermore, the agreement stipulates that, during the period from the contract date of the agreement to the end of
December 2016, the seller may cancel the agreement by returning the deposit with no interest to the buyer and paying thesame amount to the buyer; and the buyer may cancel the agreement by waiving the deposit.
(Note) The information is undisclosed as consent to disclosure has not been obtained from the planned buyer.

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5. Summary of appraisal report(1) Urban Park Gokokuji(Unit: yen)
Summary of real estate appraisal report
Property nameAppraisal value

Urban Park Gokokuji
1,480,000,000

Appraisal firm
Date of value

Japan Real Estate InstituteNovember 1, 2016
Item

Indicated value by income approach
Indicated value by direct capitalization
method(1) Opera ng revenue ((a) (b))(a) Gross potential income(b) Vacancy loss, etc.
(2) Operating expenses
Maintenance and managementfee
Utilities expenses
Repair expenses
Property management fee
Tenant leasing cost, etc.
Property taxes
Insurance premium
Other expenses(3) Net operating income(NOI=(1) (2))(4) Financial interests on deposits

Details

Description, etc.
Estimated by correlation of the indicated value by direct
1,480,000,000 capitalization method and the indicated value by DCF
method.
1,500,000,000
103,021,000
108,234,000
Appraised taking into consideration the occupancy status
5,213,000 of the subject real estate and similar real estate and future
supply/ demand trend.
26,772,000
Appraised by reference to the agreement terms and the
6,340,000
level of similar real estate.
Appraised by reference to actual data and the level of
5,600,000
similar real estate.
Appraised by reference to costs for restoring to original
3,933,000 state, repair and renewal expenses in the ER and the levelof similar real estate.
Appraised by reference to the agreement terms and the
1,927,000
level of similar real estate.
Appraised by reference to the agreement terms and the4,569,000
level of similar real estate.
3,595,000 Appraised based on actual data.
288,000 Appraised by reference to the level of similar real estate.
520,000 Recorded internet usage charge.
76,249,000

82,000 Appraised investment return as 1.0%.
Appraised by reference to repair and renewal expenses in(5) Capital expenditures
7,480,000
the ER and the level of similar real estate.
(6) Net cash ow (NCF=(3)+(4) (5))
68,851,000
Appraised by comprehensively taking into account the(7) Capitalization rate
4.6%
competitiveness of the subject real estate, etc.
Indicated value of DCF method
1,450,000,000
Appraised by comprehensively taking into account the
Discount rate
4.4%
competitiveness of the subject real estate, etc.
Terminal capitalization rate
4.8% Appraised by reflecting aging risk, market trend risk, etc.
Estimated by multiplying the total of the land price and theIndicated value by cost approach
945,000,000
building price by marketability correction rate.
Ratio of land
80.2%
Ratio of building
19.8%
Matters considered in reconciliation of indicated values andEmployed the indicated value by income approach with thedetermination of appraisal value
indicated value by cost approach only as reference.

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(2) Urban Park Yoyogikoen(Unit: yen)
Summary of real estate appraisal report
Property nameAppraisal value

Urban Park Yoyogikoen
1,000,000,000

Appraisal firm
Date of value

Japan Real Estate Institute
July 31, 2016
Item

Indicated value by income approach
Indicated value by direct capitalization
method(1) Opera ng revenue ((a) (b))(a) Gross potential income(b) Vacancy loss, etc.
(2) Operating expenses
Maintenance and managementfee
Utilities expenses
Repair expenses
Property management fee
Tenant leasing cost, etc.
Property taxes
Insurance premium
Other expenses(3) Net operating income(NOI=(1) (2))(4) Financial interests on deposits

Details

Description, etc.
Estimated by correlation of the indicated value by direct
1,000,000,000 capitalization method and the indicated value by DCF
method.
1,020,000,000
63,277,000
67,316,000
Appraised taking into consideration the occupancy status
4,039,000 of the subject real estate and similar real estate and future
supply/ demand trend.
17,541,000
Appraised by reference to the agreement terms and the
6,880,000
level of similar real estate.
Appraised by reference to actual data and the level of
1,000,000
similar real estate.
Appraised by reference to costs for restoring to original
1,890,000 state, repair and renewal expenses in the ER and the levelof similar real estate.
Appraised by reference to the agreement terms and the1,266,000
level of similar real estate.
Appraised by reference to the agreement terms and the
1,281,000
level of similar real estate.
4,833,000 Appraised based on actual data.
91,000 Appraised by reference to the level of similar real estate.
300,000 Recorded CATV usage charge.
45,736,000

422,000 Appraised investment return as 2.0%.
Appraised by reference to repair and renewal expenses in(5) Capital expenditures
2,449,000
the ER and the level of similar real estate.
(6) Net cash ow (NCF=(3)+(4) (5))
43,709,000
Appraised by comprehensively taking into account the(7) Capitalization rate
4.3%
competitiveness of the subject real estate, etc.
Indicated value of DCF method
979,000,000
Appraised by comprehensively taking into account the
Discount rate
4.1%
competitiveness of the subject real estate, etc.
Terminal capitalization rate
4.5% Appraised by reflecting aging risk, market trend risk, etc.
Estimated by multiplying the total of the land price and theIndicated value by cost approach
1,190,000,000
building price by marketability correction rate.
Ratio of land
82.6%
Ratio of building
17.4%
Matters considered in reconciliation of indicated values andEmployed the indicated value by income approach with thedetermination of appraisal value
indicated value by cost approach only as reference.

76. Profile of the seller and planned buyer(1) Seller profile (Urban Park Gokokuji)
Name
Location
Representative

GK SAPR4
1-7-1 Motoakasaka, Minato-ku, Tokyo
Representative partner: Ippanshadanhoujin SAPR Holding4
Operational executor: Terumitsu Nosaka
Main business description 1. Acquisition, ownership, disposition and management of beneficially interest in trust
2. Sales, ownership, management, leasing and disposition of real estate
3. All business incidental to the above
Capital100,000 yen
Established
August 6, 2015
Relationship with investment corporation or asset management company
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personal relationship to report.
Business relationship
There is no business relationship to report.
Related party or no
The Seller does not fall under the category of interested person, etc. as provided in theInvestment Trusts Act, but falls under the category of interested party (Note) prescribed in
the “Rules on Transactions with Interested Parties”, which is the voluntary rules set forth by
the Asset Manager for preventing conflict of interests regarding its management of SAR’s
assets. Upon conducting the acquisition of the assets, the Asset Manager has performed
deliberation and resolution in accordance with the voluntary rules.
(Note) Star Asia Management Limited (the Sponsor), Star Asia Asset Management LLC, Star Asia Management Japan
Limited, Malcolm F. MacLean IV, Taro Masuyama and investment vehicles (a) that are in Japan and own or acquire
investments assets such as real estate or (b) that own or acquire investment units of SAR and are the investment
destination of funds (excluding minority investments) for which Malcolm F. MacLean IV and Taro Masuyama makeinvestment decisions.

(2) Planned buyer profile (Urban Park Yoyogikoen)
The information is undisclosed as consent to disclosure has not been obtained from the planned buyer.
There is no capital relationship, personnel relationship or business relationship to report between
SAR/the Asset Manager and the buyer, nor does the buyer fall under the category of related party ofSAR/the Asset Manager.
7. Status of Parties Related to the Acquisition of the Property
Previous owner, previous trustee

Before Previous owner, previous
trustee
Other than the one with a relationshipof special interest―

Company name

GK SAPR4

Relationship with parties
who have special interests

The company does not fall under the category ofinterested person, etc. as provided in theInvestment Trusts Act, but falls under the
category of interested party prescribed in the“Rules on Transactions with Interested Parties”
set forth by the Asset Manager.
Acquired for investment management purpose―

1,460,000,000 yen
May 31, 2016――

Acquisition background andreason, etc.
Acquisition price
Acquisition period

8. Transaction with interested person, etc.
The Transactions are no transactions with interested person, etc., but the seller in the asset acquisition falls
under the category of interested party prescribed in the “Rules on Transactions with Interested Parties,” which isthe voluntary rules set forth by the Asset Manager for preventing conflict of interests regarding its managementof SAR’s assets. Upon deciding on the acquisition of the asset, the Asset Manager has performed deliberation
and resolution in accordance with the voluntary rules.

89. Overview of broker(1) Urban Park Gokokuji
Overview of broker
The information is undisclosed as consent to disclosure has not been obtained from the broker. Thereis no capital relationship, personnel relationship or business relationship to report between SAR/theAsset Manager and the broker, nor does the broker fall under the category of related party of SAR/theAsset Manager.
Value of the brokerage commission
Since the consent has not been obtained from the broker, the information is not disclosed as an
undisclosed case due to unavoidable reasons.
(2) Urban Park Yoyogikoen
Overview of broker
Name
Location
Representative
Main business description

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo
Hitoshi Tsunekage, President(1) Trust business (including antique dealings conducted as trust business)(2) Acceptance of deposits and installment savings, extending loans, discounting bills andnotes and exchange transactions(3) Guarantee of obligations, acceptance of bills and notes and any other business incidental
to the banking business mentioned in the preceding item
(4) Underwriting, handling of offering for subscription and for sale, purchasing and selling
and any other business which banks and/or trust companies are permitted to conduct
under the Financial Instruments and Exchange Act of Japan in respect of national
government bonds, local government bonds and government-guaranteed bonds and anyother securities(5) Any business in which banks and/or trust companies are permitted to engage under the
Secured Bonds Trust Law and other laws
(6) Any other business incidental or relating to the businesses mentioned in any of theforegoing items
Capital342,037,174,046 yen
Established
July 28, 1925
Relationship with investment corporation or asset management company
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personal relationship to report.
Business relationshipThe broker is the asset custodian, general administrative agent (transfer agent,organizational operation administrative agent, accounting agent), lender of SAR and trustee
for several properties owned by SAR. In addition, there is no relationship to report with theAsset Manager.
Related party or no
The company does not fall under the category of related party of SAR/the Asset Manager.

Breakdown and value of the brokerage commission
Since the consent has not been obtained from the broker, the information is not disclosed as an
undisclosed case due to unavoidable reasons.

910. Schedule for the Transactions(1) Urban Park Gokokuji
December 5, 2016
February 1, 2017

(2) Urban Park Yoyogikoen
December 5, 2016

February 1, 2017

Acquisition decided
Conclusion of a sale and purchase agreement of trust beneficiary interest
Acquisition of beneficiary interest in trust (planned)
Payment of acquisition price (planned)
Conclusion of a master lease agreement and property management agreement(planned)

Transfer decided
Conclusion of a sale and purchase agreement of trust beneficiary interest
Receipt of deposit
Transfer of beneficiary interest in trust (planned)
Receipt of transfer price (planned)

11. Settlement method
The sale and purchase prices of the Transactions will be settled in lump sum on February 1, 2017. The settlement
for the property to be transferred will be receipt of the amount after subtracting 55 million yen received as
deposit on the contract date of a sale and purchase agreement of trust beneficiary interest from the transfer
price.
12. Future Outlook
As a result of the Transactions, 5% or larger discrepancy is expected for cash distribution per unit in the
management status and cash distribution forecast for the fiscal period ending July 2017 announced in Financial
Report for Fiscal Period Ended July 31, 2016 dated September 14, 2016. Please refer to “Notice Concerning
Revision to Forecasts for Operating Results and Distribution for the Fiscal Period Ending July 31, 2017”
announced today for further details.

<Reference Materials>
Reference Material 1
Reference Material 2
Reference Material 3
Reference Material 4
Reference Material 5
Reference Material 6

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Portfolio List after the Transactions
Summary of Engineering Report and Earthquake Risk Analysis
Urban Park Gokokuji: Photos of Exterior of Property and Location Map
Strategy to Maximize Unitholder’s value
Enhancement of Unitholder’s value through Asset Replacement
Change in Investment Unit Price since Listing and Actions Taken* This material is distributed to the press club of the Tokyo Stock Exchange (Kabuto Club), the press club of the
Ministry of Land, Infrastructure, Transport and Tourism, and the press club for construction trade
publications of the Ministry of Land, Infrastructure, Transport and Tourism.
* Star Asia Investment Corporation website address: http://starasia-reit.com/en/

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Reference Material 1: Portfolio List after the Transactions
Propertyno.

Property name

OFC-01

Minami-Azabu Shibuya Building

Minato-ku, Tokyo(Planned)acquisition
price(million yen)
(Note 1)
2,973

OFC-02

Oak Minami-Azabu Building

Minato-ku, Tokyo

3,271

3,400

5.3

OFC-03

Honmachibashi Tower

Chuo-ku, Osaka-shi, Osaka

6,065

6,700

9.8

OFC-04

Nishi-Shinjuku Matsuya Building

Shibuya-ku, Tokyo

1,763

2,230

2.8

OFC-05Alphabet Seven

Minato-ku, Tokyo

1,725

2,250

2.8

OFC-06

Shibuya MK Building

2,042

2,330

3.3

OFC-07

Hakata-eki Higashi 113 Building

1,885

1,950

3.0

OFC-08Asahi Building

Shibuya-ku, Tokyo
Hakata-ku, Fukuoka-shi,
Fukuoka
Kanagawa-ku, Yokohama-shi,
Kanagawa

6,320

6,390

10.2

Office subtotal

42.0

Location

Real estateappraisalvalue(million yen)
(Note 2)
3,020

Investment
ratio (%)
(Note 3)4.8

RSC-01

Urban Park Azabujuban

Minato-ku, Tokyo

2,045

2,130

3.3

RSC-02

Urban Park Daikanyama

6,315

7,120

10.2

RSC-04

Urban Park Shin-Yokohama

2,528

2,560

4.1

RSC-05

Urban Park Namba

Shibuya-ku, Tokyo
Kohoku-ku, Yokohama-shi,
Kanagawa
Naniwa-ku, Osaka-shi, Osaka

1,490

1,590

2.4

RSC-06

Urban Park Gokokuji

Toshima-ku, Tokyo

1,460

1,480

2.4

Residential property subtotal

22.3

LGC-01

Iwatsuki Logistics

LGC-02

Yokohama Logistics

LGC-03

Funabashi Logistics

Iwatsuki-ku, Saitama-shi,
Saitama
Kanagawa-ku, Yokohama-shi,
Kanagawa
Funabashi-shi, Chiba

HTL-01R&B Hotel Umeda East

Kita-ku, Osaka-shi, Osaka

2,069

HTL-02

Smile Hotel Namba

Naniwa-ku, Osaka-shi, Osaka

1,750

6,942

7,000

11.2

3,560

3,860

5.7

7,875

8,210

12.7

Logistics property subtotal

29.6

2,220

3.3

2,060

2.8

Hotel subtotal

6.2

62,07866,500100.0(Note 1) ”(Planned) acquisition price” indicates, except for Minami-Azabu Shibuya Building and Oak Minami-Azabu Building,the sale and purchase price stated in the sale and purchase agreement for the acquired asset/asset to be acquired,
rounded to the nearest million yen. The sale and purchase price or the planned sale and purchase price does notinclude consumption tax, local consumption tax and various expenses required for the acquisition. As to
Minami-Azabu Shibuya Building and Oak Minami-Azabu Building, since price for each property is not set in the saleand purchase agreement, the total sale and purchase price of the two properties is divided proportionally based on
the ratio of appraisal value of each property at the time of acquisition and indicated as “Acquisition price.”(Note 2) ”Real estate appraisal values” are the opinions of value stated in the real estate appraisal report with July 31, 2016as the date of value for acquired assets and November 1, 2016 for assets to be acquired, each rounded to thenearest million yen.
(Note 3) “Investment ratio” is the ratio of (planned) acquisition price for each acquired asset/asset to be acquired to thetotal of (planned) acquisition prices, rounded to the first decimal place.

11Reference Material 2: Summary of engineering report and earthquake risk analysis
Earthquake risk
analysis (Note 4)

Engineering report

Investigator(Note 1)

Investigation
report date

Emergency andshort-term
repair expenses(thousand yen)
(Note 2)

Minami-Azabu
Shibuya Building

Deloitte Touche
Tohmatsu

December 2015

0

18,00012.6

Oak Minami-Azabu
Building

Deloitte Touche
Tohmatsu

December 2015

023,286High-rise bldg.: 11.2
Low-rise bldg. A: 6.3
Low-rise bldg. B: 5.5

Honmachibashi
Tower
Nishi-Shinjuku
Matsuya Building

Deloitte Touche
Tohmatsu
Deloitte Touche
Tohmatsu
Deloitte Touche
Tohmatsu
Deloitte Touche
Tohmatsu

December 2015

0

25,0582.7

December 2015

0

16,002

12.2

December 2015

0

7,000

7.8

December 2015

0

6,031

13.1

Propertyno.

Property name

OFC-01
OFC-02
OFC-03
OFC-04
OFC-05Alphabet Seven

Medium tolong-term repair
expenses(thousand yen)
(Note 3)

PML (%)

Shibuya MK
Building
Hakata-eki Higashi
113 Building
Asahi Building
Urban Park
Azabujuban

Earch Appraisal

December 2015

0

20,018

7.1

Earch Appraisal
Deloitte Touche
Tohmatsu

December 2015

950

44,821

4.8

December 2015

0

3,515

7.2

RSC-02

Urban Park
Daikanyama

Deloitte Touche
Tohmatsu

December 2015

0

18,023

RSC-04

Urban Park
Shin-Yokohama

December 2015

0

5,440

14.5

RSC-05

Urban Park Namba

December 2015

0

2,321

13.2

RSC-06

Urban Park
Gokokuji

November 2016

0

10,4689.2

LGC-01

Iwatsuki Logistics

December 2015

0

5,103

12.2

LGC-02

Yokohama
Logistics

December 2015

032,39510.8

LGC-03

Funabashi Logistics

Deloitte Touche
Tohmatsu

December 2015

059,941

Bldg. 1-A: 13.9
Bldg. 1-B: 14.4
Bldg. 2: 11.1

Earch Appraisal

December 2015

0

11,42911.4

OFC-06
OFC-07
OFC-08
RSC-01

HTL-01
HTL-02

R&B Hotel Umeda
East
Smile Hotel Namba

Tokio Marine &Nichido Fire
Insurance
Tokio Marine &Nichido Fire
Insurance
Deloitte Touche
Tohmatsu
Deloitte Touche
Tohmatsu
Deloitte Touche
Tohmatsu

Existing bldg.: 12.7
Bldg. A: 10.2
Bldg. B: 7.9

Earch Appraisal
December 2015
0
2,125
12.3
Entire Portfolio (Note 4)
3.56(Note 1) “Deloitte Touche Tohmatsu,” “Earth Appraisal” and “Tokio Marine & Nichido Fire Insurance” in the “Investigator”
refer to Deloitte Tohmatsu Property Risk Solution Co., Ltd., Earth-Appraisal Co., Ltd. and Tokio Marine & Nichido Risk
Consulting Co., Ltd., respectively.
(Note 2) “Emergency and short-term repair expenses” is the expenses stated in the engineering report as expenses in urgent
need and repair and renewal expenses required within roughly one year, rounded to the nearest thousand yen.
(Note 3) “Medium to long-term repair expenses” is the average amount per year of the repair and renewal expenses
projected for the next 12 years stated in the engineering report, rounded to the nearest thousand yen.
(Note 4) SAR consigned calculation of individual PML and portfolio PML to Deloitte Tohmatsu Property Risk Solution Co., Ltd.
and have received the reports. The figure in the entire portfolio column is the PML for the entire portfolio (portfolio
PML) based on the company’s “portfolio earthquake risk evaluation report” dated February 2016.

12

Reference Material 3:<Urban Park Gokokuji: photos of exterior of property><Urban Park Gokokuji: location map>

Urban Park
Gokokuji13

Reference Material 4

Strategy to Maximize Unitholders' Value
Taking flexible measures in accordance with investment unit price levels

Rise in investment unit price accompanying theimprovement in unitholders' value

Pursuing optimal portfolio management
Elimination of rent gap

Growth in cash distribution per unit and NAV
per unit
Securing flexibility in financial
strategies

Enhancement of property value with appropriate
capital expenditure

Maximization ofunitholders' value(Maintaining/improving cash
distribution per unit)

Secureing future external growth andinvestment opportunities

Reduction of operational cost
Asset replacement aiming to improve quality,
profitability and stability of the portfolio
Asset transfer to realize unrealized gain, proving
the evaluation of owned assets
Promoting proactive financial management
Reduction of financing cost

Acquisition of preferential negotiation rights
Utilization of sponsor support
Further diversification of income opportunities(considering investment in mezzanine loan debt)

Introduction of cumulative investment system ofinvestment units by officers and employees
Considering obtainment of credit rating
Considering acquisition of treasury units
Early repayment of borrowings
Proactive IR activities

Aim for accretive equity financeReference Material 5

Enhancement of Unitholders' Value through Asset Replacement
Property to be Transferred

Property to be Acquired

Transferred a property with a small number of units
and relatively large income fluctuation for a value
exceeding the appraisal value

Acquired a single-type property in central Tokyo
with many units and strong tenant demand

Urban Park Yoyogikoen
Anticipated transfer price: 1,100 million yen(Appraisal value: 1,000 million yen)
Acquisition price: 875 million yen
NOI yield

Urban Park Gokokuji
Anticipated acquisition price: 1,460 million yen(Appraisal value: 1,480 million yen)

Asset
Replacement

2.6% *1

NOI yield

4.7% *2

Assumed annual
NOI
Approx. 23 million
yen *1

Assumed annual
NOI
Approx. 68 million
yen *2

Total numberof units

Total number of
units
112

６

Improvement in normalized DPU: +12 yen
Return to unitholders due to the transfer: +382 yen*1: NOI of Urban Park Yoyogikoen is calculated by subtracting the expected amount of fixed property taxes and city planning taxes from the amount obtained by adding the forecast amount for theperiod from November 2016 to January 2017 to the actual amount for the period from February 2016 to October 2016. Furthermore, NOI yield is calculated by dividing the calculated NOI by theacquisition price. In addition, the property achieved a 100% occupancy rate (as of November 2016), which was only 61.8% at the end of November 2015, by conducting leasing activities incooperation with the property manager based on the leasing strategy drawn by the asset manager. Accordingly, temporary expenses (brokerage fee) accompanying leasing and unearned period
due to free-rent, etc. are seen.
*2: NOI of Urban Park Gokokuji is calculated based on the information provided by the current owner, etc. taking into account the market trends, etc., with the expected amount of fixed property taxes
and city planning taxes deducted. Furthermore, NOI yield is calculated by dividing the calculated NOI by the anticipated acquisition price.

Reference Material 6

Change in Investment Unit Price since Listing and Actions Taken

Star Asia Investment Corporation

TSE JREIT Index

106
104
102
U.K. referendum
on withdrawal
from EU

100

Announcement of fiscal
results for the fiscal
period ended July 2016
(1st fiscal period)

98

Announcement of “NoticeConcerning Start ofCumulative Investment
Unit Investment by
Officers and Employeesof the Asset Manager”

96
Announcement of“Notice Concerning
Obtainment ofPreferential
Negotiation Rights
Pertaining to
Acquisition of Assets”
#1

94
92

Announcement of“Notice Concerning
Obtainment ofPreferential
Negotiation Rights
Pertaining to
Acquisition of Assets”#2

Account settlement
IR activities in Japanand abroad: 81 in
total

U.S.
presidential
election

90
88
86
2016/4/20

2016/5/20

2016/6/20

2016/7/20

2016/8/20

2016/9/20

2016/10/20

2016/11/20*1 The above figures are TSE JREIT Index and SAR's closing price indexed to 100 at the listing date (April 20, 2016).

3