March 2, 2020
For Immediate Release
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
Contact:
Akiko Kanno
Director and CFO
TEL: +81-3-5425-1340

Notice Concerning Acquisition and Transfer ofTrust Beneficiary Interest in Domestic Real Estate (Fifth Asset Replacement)
Star 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 domestic real estate beneficiaryinterests in trust of the “Urban Park Ichigao (Note)” and “Urban Park Gyotoku (Note)” (hereinafter referred to as the"Assets to be Acquired", and the acquisition of the Assets to be Acquired is referred to as the “Acquisition”), andtransfer the domestic real estate beneficiary interest in trust of the “Alphabet Seven” (hereinafter referred to as the"Asset to be Transferred", and the transfer of the Asset to be Transferred is referred to as the “Transfer” andcollectively with the Acquisition, the “Asset Replacement”).
Asset replacements are a part of “active management” which is advocated by SAR and by the Asset Manager. As withprevious four asset replacements, SAR considers that the Asset Replacement will enhance our portfolios and will realize
gain on sales (planned) through the Transfer and, as a result, these will contribute to maximization of unitholders’value.
(Note) Although property names are “Chrysantheme Ichigao” and “La Soeur Gyotoku” as of today, these names are scheduled
to be changed immediately after acquisition by SAR.

1.

Reason for Asset Replacement
The Asset Manager continues to regard the asset replacement strategy as an important measure for active
management, and have conducted asset replacements four times since SAR’s listing. As a result, asset replacements
have brought enhancing our portfolios and SAR has realized 2.69 billion yen of total gain on sales through selling
properties in connection with asset replacements.
In this Asset Replacement as well, SAR is transferring an office building which is 30-year old and for which repair
costs and capital expenditures are anticipated to increase in the future, and acquire residential housing located in
the Tokyo suburban area which is expected to contribute to the stability of portfolio income. By the Transfer, a gainon sale totaling approximately JPY 1.61 billion is expected to be realized. Furthermore, as announced in the press
release today entitled “Notice Concerning Execution of a Merger Agreement by and between Star Asia Investment
Corporation and Sakura Sogo REIT Investment Corporation”, SAR and Sakura Sogo REIT Investment Corporation arescheduled to merge subject to receiving approval by the unitholders’ meetings of the respective investment
corporations, and it was decided to go forward with the Asset Replacement as it was conceived that the “Asset
Replacement” would contribute to the maximization of unitholders’ value of the post-merger investment
corporation. Please refer to the below for details.
“Alphabet Seven” which is the Asset to be Transferred is an office property located in the central Tokyo, and has
maintained a high occupancy rate since it was acquired. Also, even as of the end of January 2020, a rent gap (Note1)
existed and it is believed that there is still room for increase of rents. However, the Asset to be Transferred wascompleted in January 1990, and life cycle costs such as repair costs and capital expenditures are anticipated toincrease going forward. Also, the area in which the Asset to be Transferred is located has been subject to changes tousage classifications since construction, and therefore, upon rebuilding, office-use buildings can no longer be1constructed. Taking such circumstance into consideration, the property was positioned as candidate property forpotential transfer, and we have sought potential transferees that could incorporate the value of future
redevelopment. As a result, we confirmed a purchaser candidate who could give value to the Asset to beTransferred for both its current profitability plus value as a future redevelopment site, and it was also conceived
that SAR is highly likely to realize a gain on sale, and therefore, it was determined that choosing to “transfer” rather
than “hold” would be the best option to maximize the value for unitholders.
On the other hand, we consider that Urban Park Ichigao and Urban Park Gyotoku, Assets to be Acquired, willcontribute to the stability of incomes from our portfolio. Reasons are as below.
<Urban Park Ichigao>­
The property is located at approximately a 4-minute walk from “Ichigao” station on the Den-en-toshiLine. Surrounding “Ichigao” station, there are many quiet residential areas, and the station also has
excellent and convenient access to the center areas of Tokyo and Yokohama by use of the Tokyu
Den-en-toshi Line, and the area has steady demand and is especially appealing to families.
­
Layouts mainly range between 2LDK to 3LDK arrangements (exclusive area: 62.36 ㎡ - 79.76 ㎡）
targeting families, with a total of 62 housing units, and stable occupancy can be expected.
<Urban Park Gyotoku>­
The property is located at approximately a 3-minute walk from “Minami-Gyotoku” station on the Tokyo
Metro Tozai Line, in Ichikawa City of Chiba Prefecture where there is a concentration of large areatransport lines which connect central Tokyo and various areas within Chiba Prefecture. In particular,
with respect to railway networks, it is an area where the JR Sobu Line, Keiyo Line, Musashino Line,
Keisei Main Line, Tokyo Metro Tozai Line, Toei Shinjuku Line, and Hokuso Line are available for use. The
nearest station “Minami-Gyotoku” station is within a 20-minute ride from “Otemachi” station and“Nihonbashi” station, and it is an area where housing demand is anticipated among a wide-range ofresidents centering around families but also DINKS and singles. Layouts for all 40 housing units are 3DK(exclusive area of 58.43 ㎡), and has a stable occupancy rate given its high appeal to DINKS and families.
­
As mentioned above, the Asset Replacement can accomplish both enhancing our portfolios and realizing gain ofsales, and SAR considers that it will contribute to maximization of unitholders’ value.
(Note1) The rent gap means the difference between the assumed market average rent of the surroundingarea and contracted average rent. The assumed market average rent of the surrounding area is based on
assessment of rent (median of the range) provided by CBRE. CBRE defined this figure as the moderatemonthly rent per tsubo, comprehensively considering leasing transactions of the Asset to be Transferred andsurrounding competing assets in the neighboring area and the market condition, under the assumption thattenants seeking is carrying out in each timing of rent assessment and new contract is concluded by a floor
unit. Contracted average rent is calculated by the whole rent of all tenants of asset to be transferred at thetiming of assessing the rent divided by operated area and includes common service fee, but free rent andrent holiday as of such date are not considered and don’t include tax.
2. Summary of Assets to be Acquired and Asset to be Transferred(1) Overview of Assets to be AcquiredA) RSC-10 Urban Park Ichigao
Asset to be acquired
Property nameLocation
Asset type
Date of execution of purchaseagreement
Planned acquisition dateSellerPlanned acquisition price(Note)
Acquisition financing

Beneficiary interest in trust whose main asset is domestic real estate
Urban Park Ichigao
Aoba-ku, Yokohama-shi, Kanagawa
Residence
March 2, 2020
March 13, 2020
HASEKO Real Estate Development, Inc.
1,810 million yen
New planned borrowing and cash on hand

2

(Note) With respect to the “Planned acquisition price”, the planned sale and purchase proceeds stated in the agreementwith the seller with respect to the Asset to be Acquired is stated, with the amount under one million yen rounded to thenearest million yen. The planned sale and purchase proceeds do not include consumption tax or local consumption tax or
expenses require for the acquisition. The same applies below.

B) RSC-11 Urban Park Gyotoku
Asset to be acquired
Property nameLocation
Asset type
Date of execution of purchaseagreement
Planned acquisition dateSellerPlanned acquisition price
Acquisition financing

Beneficiary interest in trust whose main asset is domestic real estate
Urban Park Gyotoku
Ichikawa-shi, Chiba
Residence
March 2, 2020
March 13, 2020
LIXIL Reality Corporation
1,430 million yen
New planned borrowing and cash on hand(2) Overview of Asset to be Transferred
OFC-05 Alphabet Seven
Asset to be Transferred
Property nameLocation (Indication ofresidential address)
Asset type
Date of execution of sales
agreement
Planned transfer date

Quasi-co-ownership of beneficiary interest in trust whose main asset isdomestic real estate
Alphabet Seven
7-6-38, Akasaka, Minato-ku, Tokyo
OfficeMarch 2, 2020

1st (40% quasi-co-ownership)：July 1, 2020
2nd (60% quasi-co-ownership)：December 1, 2020
Planned transferee
Kanden Realty & Development Co., Ltd.
Planned sales price (Note1)
1st (40% quasi-co-ownership)： 1,400 million yen
2nd (60% quasi-co-ownership)： 2,100 million yen
Total：3,500 million yen
Book value (Note2)
1,841 million yen
Gain (loss) on transfer
1st (40% quasi-co-ownership)： 642 million yen(estimate) (Note3)
2nd (60% quasi-co-ownership)： 970 million yen
Use of gain on transfer
To be appropriated to purchase proceeds for the Asset to be Acquired and apart of future merger related expenses.
(Note 1) The sales prices of the Asset to be Transferred stated in the sales and purchase agreements for the Asset tobe Transferred (excluding transfer expenses, consumption tax and local consumption tax) are stated.
(Note 2) Book value as of the end of January 2020 is stated.
(Note 3) Estimated gains and losses on the transfer based on the book value as of the end of January 2020 are stated.
Actual gain or loss on transfer may differ from the above estimated amount.

3. Details of Assets to be Acquired(1) RSC-10 Urban Park Ichigao
Property
Property
RSC-10Urban Park Ichigao
Type
Residence
No.
nameOverview of specified asset
Beneficiary interest in
Sumitomo Mitsui Trust Bank, Limited
Type of specified asset
Trusteetrust
Planned acquisition
March 13,2020
Planned acquisition price 1,810 million yen
dateAppraised value
1,850 million yen
Seller
HASEKO Real Estate Development, Inc.
1170-1, Ichigaocho, Aoba-ku, Yokohama-shi, Kanagawa, etc.
Location
Indication of residential
address1170-1, Ichigaocho, Aoba-ku, Yokohama-shi, Kanagawa

3Nearest station
Type ofLand
ownership
Site area
Building
coverage ratio
Type of
Building
ownership
Total floor
area
Construction
completion

Approx. 4-minute walk from “Ichigao” Station on Tokyu-Den-en-toshi Line
Proprietary ownership
1,758.84㎡

Use district

Neighborhood commercial district

80%

Floor area ratio

300%

5,243.85㎡

Use

Residence / Office / Parking lot

July 10, 1998

Structure and floors

Reinforced concrete (RC) structure, flat rooftop, 1
basement floor, and 8 floors above ground.

Property managementcompany

Haseko Livenet, Inc.

Master lease company Haseko Livenet, Inc.

Type of master lease
Trust expiration datePass-throughMarch 31,2030

Security

Proprietary ownership

Unsecured

Status of leasing
Total leasable are

4,322.95㎡

Total leased area

4,260.27㎡

Total number of tenants

62

Monthly rent(including common
8,765,200 yen
area maintenance fee)
Security and guarantee
17,310,200 yen
deposits

Occupancy rate
September
2019
92.1%

October2019
95.0%

November
2019
95.0%

December
2019
98.6%

January
2020
98.6%

Special notation
Not applicable.

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property Description
The property is a family type apartment building composed of a total of 62 housing units with mainly 3LDK layout, and located at
approximately a 4-minute walk from “Ichigao” station on the Den-en-toshi Line. “Ichigao” station has good access to various
places within central Tokyo, as it takes approximately 38 minutes to “Shibuya” station, and approximately less than one hour to“Otemachi” station due to mutual operation with the Hanzomon Line. Surrounding the property are administrative agencies suchas the Aoba Ward Office and the public hall etc., and also, there are many parks and pedestrian paths, and there are many living
convenience facilities gathered in front of the station, and therefore the property has high appeal towards families who areseeking residences which integrate living convenience with nature.
(2) Acquisition Highlight
The property is expected to be acquired under a bilateral negotiated transaction through the individual relationship of the AssetManager.
Demographic analysis etc., market analysis and independent analysis by the Asset Manager(1) Demographic analysis, etc
The population of Aoba Ward of Yokohama City has remained more or less flat and the number of households is increasing, andtherefore, the Asset Manager believes that it is an area where stable population increase can be expected going forward.

4

＜Aoba-ku, Yokohama-shi – Population / Households＞(人)
350,000

140,000
120,000

300,000

100,000

250,000

80,000200,000

60,000150,000

40,000100,000

20,0002009年 2010年 2011年 2012年 2013年 2014年 2015年 2016年 2017年 2018年

人口（左軸）

世帯数（右軸）(Note) For the years from 2009 to 2013, the figures are as of the end of the fiscal year (March 31) of each year, and for theyears from 2014 to 2018, the figures are as of January 1 of each year.
Source: Prepared by the Asset Manager based on the “Survey on Population, Demography and Number of Households
based on the Basic Resident Registration Cards” by the Ministry of Internal Affairs and Communications Statistics Bureau.
(2) Market Analysis
As shown in the transition of the rent index in the graph below, rent level in Yokohama City of Kanagawa Prefecture has
been more or less flat since the first half of 2015 and has remained stable.
Regarding vacancy rates, as shown in the transition in the graph below, the vacancy rate once increased towards the latter
half of 2015. However, since then it has stabilized at a low level of around 3.0% up to the latter half of 2019. Given thehistorical trend in the area, the Asset Manager believes that the vacancy rate will continue to be flat going forward.
＜Yokohama-shi, Kanagawa – Average Rent Index / Vacancy Rate＞
110.0

6.0%

100.0

5.0%

90.0

4.0%

80.0

3.0%

70.0

2.0%

60.0

1.0%

50.0

0.0%
2015年 2015年 2016年 2016年 2017年 2017年 2018年 2018年 2019年 2019年
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H

賃料インデックス（左軸）空室率（右軸）Source: Data disclosed by listed REITs (prepared by Japan Real Estate Institute (“JREI”) based on residences in Yokohama City of
Kanagawa Prefecture (however, excluding the properties which were sold or purchased during the above periods); 1H
means 1st half of the year (January to June), and 2H means latter half of the year (July to December). )(3) Individual Analysis by the Asset Manager
The number of passengers using Ichigao station on the Den-en-toshi Line has shown an increasing trend since fiscal year
2014, and the Asset Manager believes that this trend will continue in the future.

5

＜Number of Daily Average Passengers of Ichigao Station＞(人)

9,000,000

8,000,000

8,103,743 8,075,924 8,109,890
7,961,083 7,857,628 8,085,976

7,000,000

6,000,000

5,000,000
2013年度

2014年度

2015年度

2016年度

2017年度

2018年度

乗車人員
Source: Prepared by the Asset Manager based on “98th Yokohama City Statistics”

Comprehensive evaluation by SAR: Evaluation on income stability
Due to the reasons stated below, SAR believes that the property will be able to obtain stable income in the mid- to long-term, andalso that in the future growth in income can be anticipated through increase in rents etc.
(1) The fact that the property is located at a favorable location being a 4-minute walk from “Ichigao” station on the Tokyu
Den-en-toshi Line. “Ichigao” station has good access to various places within central Tokyo, as it is approximately 38 minutes
to “Shibuya” station, and approximately less than one hour to “Otemachi” station due to mutual operation with the
Hanzomon Line, and is highly appealing to DINKS and families.
(2) The population of Aoba Ward of Yokohama City has remained more or less flat and the number of households is increasing,and therefore, it can be determined that it is an area where stable population increase can be anticipated going forward.

6

(2) RSC-11 Urban Park Gyotoku
Property
RSC-11no.
Overview of specified asset

Property
name

Urban Park Gyotoku

Type of specified asset

Beneficiary interestin trust

Planned acquisition price

1,430 million yen

Appraised value
Location
Indication of residential
address
Nearest station
Type ofLand
ownership
Site area
Building
coverage ratio
Type of
Building
ownership
Total floor area
Construction
completion

Type

Residence

Sumitomo Mitsui Trust Bank, Limited

TrusteePlanned acquisition
March 13, 2020
date
1,500 million yen
Seller
LIXIL Reality Corporation
1-19-4, Minamigyotoku, Ichikawa-shi, Chiba, etc.
1-19-5, Minamigyotoku, Ichikawa-shi, Chiba

Approx. 3-minute walk from “Minami-Gyotoku” Station on Tokyo Metro Tozai Line
Proprietary ownership
1,122.57㎡

Use district

Neighborhood commercial district

80%

Floor area ratio

300%

Proprietary ownership
3,397.95㎡

Use

Store / Residence
Steel-reinforced concrete (SRC) structure, flat
rooftop, 10 floors.

March 24, 1995

Structure and floors

Property managementcompany

Haseko Livenet, Inc.

Master lease company Haseko Livenet, Inc.

Type of master lease
Trust expiration datePass-throughMarch 31, 2030

Security

Unsecured

Status of leasing
Total leasable area

2,976.34㎡

Total leased area

2,859.46㎡

Total number of tenants

40

Monthly rent(including common
6,541,000 yen
area maintenance fee)
Security and guarantee
29,372,000 yen
deposits

Occupancy rate
September
2019
94.1%

October2019
94.1%

November
2019
92.1%

December
2019
94.1%

January
2020
96.1%

Special notation
Not applicable.

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property Description
The property is located at approximately a three-minute walk from “Minami-Gyotoku” station on the Tokyo Metro Tozai Line,and it is an apartment targeted for families and DINKS composed of a total of 40 housing units with 3DK layout, and with thelower floors being used by stores. “Minami-Gyotoku” station has good access to central Tokyo as it is within a 20-minute ridefrom “Otemachi” and “Nihonbashi” stations. The property is adjacent to Minami-Gyotoku station road, where there arerestaurants, service stores, as well as administrative agencies such as a citizen’s center, and has high appeal to a wide range of
people who are looking for living convenience.
(2) Acquisition Highlight
The property is expected to be acquired under a bilateral negotiated transaction through the individual relationship of the AssetManager.

7

Demographic analysis etc., market analysis and independent analysis by the Asset Manager(1)Demographic analysis, etc.
Ichikawa City of Chiba Prefecture has continued to show a trend of slight increase in terms of both the population and thenumber of households, and therefore, the Asset Manager believes that it is an area where stable population increase can be
anticipated going forward.
＜Ichikawa-shi, Chiba – Population / Households＞

600,000 (人)270,000

500,000

220,000

400,000

170,000

300,000

120,000

200,000

70,000100,000

20,0002009年 2010年 2011年 2012年 2013年 2014年 2015年 2016年 2017年 2018年

人口（左軸）

世帯数（右軸）(Note) For the years from 2009 to 2013, the figures are as of the end of the fiscal year (March 31) of each year, and for theyears from 2014 to 2018, the figures are as of January 1 of each year.
Source: Prepared by the Asset Manager based on the “Survey on Population, Demography and Number of Households basedon the Basic Resident Registration Cards” by the Ministry of Internal Affairs and Communications Statistics Bureau.
(2) Market Analysis
As shown in the transition of the rent index in the graph below, rent level in Ichikawa City of Chiba Prefecture has been
more or less flat since the first half of 2015 and has remained stable.
Regarding vacancy rates, as shown in the transition in the graph below, the vacancy rate has remained at a low level of lessthan approximately 4% since the first half of 2015, and given the historical trend in the same area, the Asset Manager
believes that the same trend will continue going forward.
＜Ichikawa-shi, Chiba – Average Rent Index / Vacancy Rate＞

110.0

10.0%
9.0%

100.0

8.0%
7.0%

90.0

6.0%

80.0

5.0%
4.0%

70.0

3.0%
2.0%

60.0

1.0%

50.0

0.0%
2015年 2015年 2016年 2016年 2017年 2017年 2018年 2018年 2019年 2019年
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H

賃料インデックス（左軸）8

空室率（右軸）Source: Data disclosed by listed REITs (prepared by JREI based on residences in Ichikawa City of Chiba Prefecture (however,excluding the properties which were sold or purchased during the above periods); 1H means 1st half of the year (January toJune), and 2H means latter half of the year (July to December). )(3) Individual Analysis by the Asset Manager
The number of passengers using Minami-gyotoku station on Tokyo Metro Tozai Line has shown an increasing trend since
fiscal year 2012, and the Asset Manager believes that this trend will continue in the future.
＜Number of Daily Average Passengers of Minami-gyotoku Station＞(人)
30,00024,69925,19025,3442012年度

2013年度

2014年度

26,243

26,67627,0882015年度

2016年度

2017年度

20,00010,0000

１日平均乗車人員
Source:Prepared by the Asset Manager based on “Chiba Prefecture Annual Statistics”

Comprehensive evaluation by SAR: Evaluation on income stability
Due to the reasons stated below, SAR believes that the property will be able to obtain stable income in the mid- to long-term, andalso that in the future growth in income can be anticipated through increase in rents etc.
(1) It has a good location being an approximate three-minute walk from “Minami-Gyotoku” station on the Tokyo Metro Tozai
Line. “Minami-Gyotoku” station has good access to central Tokyo being within 20 minutes from “Otemachi” and“Nihonbashi” stations, and has high appeal to DINKS and families.
(2) Ichikawa City of Chiba Prefecture has continued to show a trend of slight increase in terms of both the population and thenumber of households, and it can be determined that it is an area where stable population increase can be anticipatedgoing forward.

9

4.

Details of Asset to be Transferred
OFC-05 Alphabet Seven

PropertyNo.

OFC-05

Property
name

Alphabet Seven

Type

OfficeOverview of specified asset
Type of specified asset

Beneficiary interest in trust

TrusteeMizuho Trust & Banking Co., Ltd.

Total：3,500 million yen
1st (40% quasi-co-ownership): 1,400 million
Planned sales priceyen
2nd (60% quasi-co-ownership):2,100 million

Plannedtransfer date1st (40% quasi-co-ownership) : July 1, 2020
2nd (60% quasi-co-ownership): December
1, 2020

yen
Location

7-327-1, Akasaka, Minato-ku, Tokyo, etc.

Indication of residential 7-6-38, Akasaka, Minato-ku, Tokyo
address
Nearest station
Land

Type ofownership
Site area

Approx. 5-minute walk from “Akasaka” Station on Tokyo Metro Chiyoda Line
Proprietary ownership
Use district

1286.45㎡

Building
coverage

Floor area

60%

ratio

ratio
Building

Type ofownership
Total floor
areacompletio

residential district
300%

Proprietary ownershipUse

4,132.80㎡

Constructi
onCategory 1 medium-to-high-rise exclusive

Structure

January 6, 1990

and floorsnProperty management

Shimizu Comprehensive Development

Master lease

company

Corporationcompany

Type of master lease

Pass-throughSecurity

Trust expiration date

April 30, 2026

Office / Residence / Parking lot
Reinforced concrete (RC) structure, flat
rooftop, 1 basement floor, and 6 floors
above ground.
SAR
Unsecured

Status of leasing
Total
Total leasable area

number of

2,464.59㎡

10

tenants
Monthly rent(including
Total leased area

common2,464.59㎡

areamaintenance
fee)

Security and guarantee
deposits

94,303,072 yen

10

11,191,185 yenOccupancy rate
September

OctoberNovember

DecemberJanuary

2019

2019

2019

2019

2020

92.1%

100.0%

100.0%

100.0%

100.0%

Special notation
The relevant building has been subject to changes in usage classifications after being constructed, and therefore, upon rebuilding
the relevant building, office-use buildings can no longer be constructed.

11

5. Summary of Appraisal Report(1) Urban Park Ichigao(Unit: Yen)
Summary of Real Estate Appraisal Report
Property nameUrban Park Ichigao

Appraisal value

1,850,000,000 yen

Appraisal firm

Japan Real Estate Institute

Date of value

December 1, 2019
Item

Indicated value by income approach
Indicated value of direct
capitalization method

Details
1,850,000,000

1,870,000,000(1)Operating revenue ((a)−(b))

113,099,000(a)Gross potential income

119,599,000(b) Vacancy loss, etc.

6,500,000(2) Operating expenses

27,153,000

Maintenance and management
Fee
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(5) Capital expenditures(6) Net cash flow
(NCF=(3)+(4)−(5))

4,000,000

3,500,000

5,940,000

2,144,000

3,233,000

7,863,000

378,000
95,000Description, etc.
Estimated by correlation of the indicated value by direct capitalization method andthe indicated value by DCF method.
Assessed by capitalizing the mid- to long-term stable net profits by using thecapitalization ratio.

Assessed based on appropriate rent levels which are recognized as being stable in themid- to long-term.
Recorded based on the operational status and trends in supply and demand of similar
real estate properties, and the operational status of the subject real estate property.

Recorded by referring to actual costs in the past fiscal years etc., and taking into
account the individual characteristics of the subject real estate property.
Recorded by referring to actual costs in the past fiscal years etc., and taking into
account the individual characteristics of the subject real estate property.
Estimated based on repair costs mainly, and by taking into consideration the historical
data, the level of similar real estate and ER.
Estimated by reference to fees based on the contracts and taking into accounts ofproperty’s specific characteristics.
Record the administration fees in relation to soliciting new tenants and renewing
leases with existing tenants.
Estimated by taking into consideration materials of taxes and duties and the burden
adjustment measures.
Record taking into account insurance premiums based on insurance contracts and theinsurance premium rates etc. of the subject building and similar buildings.
Record the CATV facilities usage fees.

85,946,000
157,000
5,600,000

Appraised investment return as 1.0%.
Estimated by reference to the level of capital expenditures of similar real estate,building age and ER.

80,503,000(7) Capitalization rate

Assessed by adding or subtracting individual factors such as the location of the
4.3%

subject real estate to the base rate, and taking into account the uncertainty of the
future and the transaction yield etc. of similar real estate properties.

Indicated value of DCF method
Discount Rate

1,820,000,000
4.1%

Assessed by referring to the investment yields etc. of similar real estates, and12comprehensively taking into account the individual characteristics etc. of the subject
real estate property.
Assessed by referring to the investment yields etc. of similar real estates, andTerminal capitalization rate

4.5%

comprehensively taking into account the uncertainty of the future of the subject realestate property.

Indicated value by cost approach

1,830,000,000

Ratio of land

76.5%

Ratio of building

23.5%
Based on the determination that the income value which has authentically replicatedMatters considered in reconciliation of indicated values andthe price formation process from the income perspective is more convincing, thedetermination of appraisal values

value indicated by the income approach has been adopted, and the valuation
indicated by the cost approach is used as a mere reference.

13

(2) Urban Park Gyotoku(Unit：Yen)
Summary of Real Estate Appraisal Report
Property nameUrban Park Gyotoku

Appraisal value

1,500,000,000

Appraisal firm

The Tanizawa Sogo Appraisal Co., Ltd.

Date of value

December 1, 2019
Item

Indicated value by income approach
Indicated value of direct
capitalization approach

Details
1,500,000,000

87,033,243(a)Gross potential income

91,835,132(b) Vacancy loss, etc.

4,801,889(2) Operating expenses

19,835,647

Fee
Utilities expenses
Repair expenses

to the value calculated by direct capitalization method.

1,530,000,000(1)Operating revenue ((a)−(b))

Maintenance and management

Description, etc.
Appraised by using the value calculated by DCF method as standard and by reference

2,678,706
3,393,028
3,074,163

Assessed by taking into account the average turnover period as an apartment
residence.

Appraised based on the invoice concerning the consignment contract on maintenanceand management and examples of actual results of revenue and expenditure.
Appraised according to financial performance etc..
Appraised by reference to repair and renewal expenses in the ER and the level ofsimilar real estate.

Property management fee

1,592,001

Estimated based on the proposal document of terms and conditions.

Tenant leasing cost, etc.

2,884,420

Assessed by making assumptions regarding the annual turnover of tenants.

Property taxes

4,758,700

Insurance premium
Other expenses(3) Net operating income(NOI=(1)−(2))(4) Financial interests on deposits(5) Capital expenditures(6) Net cash flow
(NCF=(3)+(4)−(5))(7) Capitalization rate
Indicated value of DCF method
Discount Rate
Terminal capitalization rate
Indicated value by cost approach

149,130
1,305,499

Appraised according to the actual amount.
Based on insurance materials.
Appraised according to financial performance etc..

67,197,596
203,821
3,320,000

Appraised investment return as 1.0%.
Appraised according to ER and capital expenses in the ER and the level of similar realestate.

64,081,417
4.2%

Appraised by reference to the investment caprate etc. of similar real estate.

1,490,000,000
4.3%
4.4%
1,510,000,000

Ratio of land

80.4%

Ratio of building

19.6%

Assessed by calculating the base yield of apartments based on the yield of financial
products, and taking into account individual risks.
Appraised by adding future uncertainty based on the cap rate.
Estimated by adjusting the replacement cost.

Matters considered in reconciliation of indicated values andDetermined using the indicated value by income approach as standard and bydetermination of appraisal values

reference to the indicated value by cost approach.

14(3) Alphabet Seven（Unit：Yen）

Summary of Real Estate Appraisal Report
Property name

Alphabet Seven

Appraisal value

2,670,000,000

Appraisal firm

Japan Real Estate Institute

Date of value

January 31, 2020
Item

Indicated value by income approach
Indicated value of direct capitalization approach

Details

Description, etc.

2,670,000,000
2,720,000,000(1)Operating revenue ((a)−(b))

142,336,000(a)Gross potential income

155,936,000(b)Vacancy loss, etc.

13,600,000(2) Operating expenses

8,100,000

Repair expenses
Property management fee
Tenant leasing cost, etc.
Property taxes
Insurance premium
Other expenses

Estimated by taking into consideration the current OCC ratio of theproperty, the current OCC ratio of similar real estate and supply anddemand in the future.

37,423,000

Maintenance and management
Fee
Utilities expenses

Estimated by correlation of the indicated value by direct capitalization
method and the indicated value by DCF method.

9,700,000
2,479,000
1,973,000
2,565,000
12,427,000
179,000
0

Appraised by reference to historical records and the level of similar realestate.
Appraised by reference to historical records and the level of similar realestate.
Estimated by reference to repair and renewal expenses and the levelof similar real estate.
Appraised by reference to the terms of the contract and the level ofsimilar real estate.
Appraised by reference to the terms of the contract and the level ofsimilar real estate.
Estimated by taking into consideration the contents of the historical
data and the burden adjustment measures.
Estimated by taking into consideration the insurance premium basedon the insurance contract and the level of similar real estate.
None(3) Net operating income
104,913,000(NOI=(1)−(2))(4) Financial interests on deposits(5) Capital expenditures(6) Net cash flow (NCF=(3)+(4)−(5))(7) Capitalization rate
Indicated value of DCF method

858,000
5,150,000

Appraised investment return as 1.0%.
Estimated by reference to repair and renewal expenses in the ER andthe level of similar real estate.

100,621,000
3.7%

Estimated by taking into consideration the property’s competitivenessetc. comprehensively.

2,620,000,000

Discount Rate

3.5%

Estimated by taking into consideration the property’s competitivenessetc. comprehensively.

Terminal capitalization rate

3.9%

Appraised by reflecting aging risk, market trend risk, etc.

Indicated value by cost approach

2,690,000,000

Ratio of land

92.3%

Ratio of building

7.7%

Matters considered in reconciliation of indicated values anddetermination of appraisal values

Appraised by multiplying the marketability adjustment factor to thesum total of land value and building value.

Determined using the indicated value by income approach as standard
and by reference to the indicated value by cost approach.

15

6.

Profile of the seller and planned buyer(1) Seller Profile①Urban Park Ichigao

Name

HASEKO Real Estate Development, Inc.

Location

2-31-19, Shiba, Minato-ku, Tokyo

Representative

CapitalPresident Satoshi Amano
1. Sale and purchase, lease, brokerage, and management of real estate properties.
2. Contract construction works, and construction design supervision works.
3.to10. (omitted)
11. All business operations which are incidental to each of the preceding items.
1,000,000 yen

EstablishedMarch 29, 1973

Main Business Description

Net Asset
Total Asset

The information is undisclosed as consent to disclosure has not been obtained from the

Major shareholder andseller.

ratio of shareholding
Relationship with SAR or the Asset Manager
Capital Relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

Relationship
Business Relation
Related party or not

There is no business relationship to report.
The seller does not fall under the category of interested person, etc. as provided in Act on
Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended,hereinafter referred to as the “Investment Trusts Act”)(Note)

SAR will enter into an agreement regarding the succession of status dated today, to the effect that it will succeed
to the status as purchaser under the trust beneficial interest sale and purchase agreement in relation to therelevant property, from Star Asia Sogo Kaihatsu Co. Ltd.

②Urban Park Gyotoku
Name

LIXIL Realty Corporation

Location

14-15, Nihonbashi Odenmacho, Chuo-ku, Tokyo

Representative

CapitalCEO Saito Yuji
1. Sale and purchase, lease, management, and brokerage of real estate properties, anddelinquency guarantee business for leased housings.
2. to 16. (omitted)
17. All business operations which are incidental to each of the preceding items.
160 million yen

Established

September 1, 1993

Main Business
Description

Net Asset
Total Asset

The information is undisclosed as consent to disclosure has not been obtained from the

Major shareholder andseller.

ratio of shareholding
Relationship with SAR or the Asset Manager
Capital Relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

Relationship
Business Relationship

There is no business relationship to report.

Related party or not

The seller does not fall under the category of interested person, etc. as provided in theInvestment Trusts Act.

16

(Note)SAR will enter into an agreement regarding the succession of status dated today, to the effect that it will succeed
to the status as purchaser under the trust beneficial interest sale and purchase agreement in relation to therelevant property, from Star Asia Sogo Kaihatsu Co. Ltd.

(2) Planned buyer profile (Alphabet Seven)
Name

Kanden Realty & Development Co.,Ltd.

Location

3-3-23, Nakanoshima, Kita-ku, Osaka

Representative

CapitalPresident Hironori Katsuda
1. Holding, management, sale and purchase, brokerage, appraisal, and consulting related toreal estate properties, as well as being entrusted with these operations.
2. Lease of real estate properties and movable properties.
3. Development and creation of land.
4. to 17. (omitted)
18. All business operations which are incidental to each of the preceding items.
810 million yen

EstablishedMay 1957

Main Business Description

Net Asset
Total Asset

The information is undisclosed as consent to disclosure has not been obtained from the

Major shareholder andpurchaser.

ratio of shareholding
Relationship with SAR or the Asset Manager
Capital Relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

Relationship
Business Relationship

There is no business relationship to report.

Related party or not

The planned buyer does not fall under the category of interested person, etc. as provided in
the Investment Trusts Act.

7.

Status of Parties Related to the Acquisition of the Property
The buyer of the property is not classified as a special related party of SAR and of the Asset Manager.

8.

Transaction with interested person, etc.
The Asset Replacement is not a series of transactions with interested person, etc. as provided in theInvestment Trusts Act, but the original purchaser in the purchase and sale agreement (Star Asia Sogo Kaihatsu
Co., Ltd.) falls under the category of interested party 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 deciding on the acquisition of the asset, the Asset Manager
has performed deliberation and resolution in accordance with the voluntary rules.
The purchaser of the Asset to be Transferred does not fall under the category of interested party
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.
Star Asia Asset Advisors Co., Ltd., the broker of Transfer falls under the category of interested party
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
determination of the retainance as broker, the Asset Manager has performed deliberation and approval inaccordance with the voluntary rules.

9.

Overview of broker（１）Urban Park Ichigao and Urban Park Gyotoku

17

① Overview of broker
The information is undisclosed as consent to disclosure has not been obtained from the broker.
There is no capital relationship, personnel relationship or business relationship to report between
SAR / the Asset Manager and the broker, nor does the broker fall under the category of related
party of SAR / the Asset Manager.
② 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.
（２）Alphabet Seven① Broker Profile
Name

Star Asia Asset Advisors Co., Ltd.

Location

2-8, Nihonbashikodenmacho, Chuo-ku, Tokyo

Representative

CEO Keiji Watanabe

Main business description

1. Consulting
2. Planning, design, development, structuring, sale and management of computer software,
hardware, and network
3. Internet-related services
4. Buy/Sell, holding, and management of securities, real estate, and monetary claim
5. Information processing related services
6. Telecommunication business
7. Real estate brokerage
8. Type Ⅱ financial instruments business9. Investment advisory and agency
10. Lease, management and operation of real estate
11. – through 13. (Omitted)
14. All business incidental to the above

Capital50 million yen

EstablishedMay 2, 2008

Relationship with SAR or the Asset Manager
Capital Relationship

There is no capital tie to be noted between SAR / the Asset Manager and theabovementioned company, however the aforementioned company falls under the categoryof 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 management of SAR’s assets. Upon determination of retainance as broker, theAsset Manager has performed deliberation and approval in accordance with the voluntaryrules.

Personnel

There is no personnel relationship to report.

Relationship
Business Relationship

There is no business relationship to report.

Related party or not

The aforementioned company falls under the category of interested person, etc. as provided
in the Investment Trusts Act, and falls under the category of interested party 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 determination of the retainance as broker, the Asset Manager has performed
deliberation and approval in accordance with the voluntary rules.

18

② Breakdown and value of the brokerage commission
Breakdown of Brokerage

Brokerage fee for transfer of Trust Beneficiary Interest

Fee
Amount of Brokerage Fee

5 million yen (total amount of 1st and 2nd, excluding consumption taxes and local
consumption taxes.)

10. Schedule for the Transactions（１） Acquisition of Urban Park Ichigao and Urban Park Gyotoku
March 2, 2020
Acquisition decided
Sign the Agreement for Succeeding to the Status of Purchaser
March 13, 2020
Acquisition of beneficiary interest in trust (planned)
Payment of acquisition price (planned)
Conclusion of a property management agreement (planned)（２） Transfer of Alphabet Seven
March 2, 2020

July 1, 2020

December 1, 2020

Transfer decided
Conclusion of each of the sale and purchase agreements of eachquasi-co-ownership of beneficiary interest in trust
Receipt of deposits
Transfer of quasi-co-ownership (40%) of real estate beneficiary interest in
trust (planned)
Receipt of transfer price for quasi-co-ownership (40%) of real estate
beneficiary interest in trust (planned)
Transfer of quasi-co-ownership (60%) of real estate beneficiary interest in
trust (planned)
Receipt of transfer price for quasi-co-ownership (60%) interest of realestate beneficiary interests in trust (planned)

11. Settlement method
The acquisition prices of the Acquisition will be settled in lump sum payment on March 13, 2020.
With respect to the Asset to be Transferred, an amount equal to the sales proceeds after deducting theamounts received as deposits on the date of signing of the Trust Beneficial Interest Sale and Purchase
Agreement of JPY 200 million (of which JPY 100 million is for the assignment to be made on July 1, 2020,
and another JPY 100 million is for the assignment to be made on December 1), are scheduled to be received
on the respective planned transfer dates.
12. Future outlook
Because the Asset Replacement has led to a change in SAR’s assumptions of forecasts of financial results
disclosed in “(REIT) Financial Report for Fiscal Period Ended July 31, 2019” as of September 12, 2019, SAR
has made revisions on SAR’s forecasts of financial results for the 9th fiscal period ending July 31, 2020
(from February 1, 2020 to July 31, 2020).
For details, please see “Notice Concerning Revision to Forecasts of Operating Results and Distributions
for the Fiscal Periods ended January 31, 2020 and ending July 31, 2020” as of today.
Moreover, in connection with execution of a merger agreement mentioned in “Notice Concerning

19

Execution of a Merger Agreement by and between Star Asia Investment Corporation and Sakura Sogo REIT
Investment Corporation” announced today, SAR and Sakura Sogo REIT Investment Corporation revealed theforecasts of the operating results and expected distributions after the merger (the fiscal periods ending
January 31, 2021 and ending July 31, 2021).
For details, please see “Notice Concerning the Forecast of Operating Results and Distributions
Subsequent to the Merger of Star Asia Investment Corporation and Sakura Sogo REIT Investment
Corporation for the Fiscal Periods Ending January 31, 2021 and July 31, 2021” announced today.
<Appendix>
・Reference
Material 1
・Reference
Material 2・Reference
Material 3
・Reference
Material 4

Portfolio list after the Transaction
Summary of earthquake risk analysis
Location maps / photos of exterior of Assets to be Acquired
The terms used in the table of Description of Assets to be Acquired and Assetto be Transferred<Reference>
Other press releases published as of today
・ Notice Concerning Execution of a Merger Agreement by and between Star Asia Investment Corporationand Sakura Sogo REIT Investment Corporation
・ Notice Concerning Split of Investment Units
・ Notice Concerning the Forecast of Operating Results and Distributions Subsequent to the Merger ofStar Asia Investment Corporation and Sakura Sogo REIT Investment Corporation for the Fiscal Periods
Ending January 31, 2021 and July 31, 2021
・ Notice Concerning Acquisition of Mezzanine Loan Debt – (Star Asia Mezzanine Loan Debt Investment
Series 5 (B Beneficiary Interest) ) –・ Notice Concerning Debt Financing
・ Notice Concerning Revision to Forecasts of Operating Results and Distributions for the Fiscal
Periods ending January 31, 2020 and July 31, 2020
・ Notice Concerning Partial Amendment to the Management Guidelines of the Asset Manager
・ Supplementary Explanatory Material Regarding Press Releases dated today (March 2)＊ Star Asia Investment Corporation website address:

20

http://starasia-reit.com/en/

Reference Material 1

Portfolio list after the Transaction(Reflected the Asset Replacement to the existing portfolio of SAR at the date of this document)<Real Estate, etc.>
Real estate(Planned)
PropertyNo.

Location

Property Name

(Note1)

AcquisitionPrice(million yen)
(Note2)

OFC-01

Minami-Azabu Shibuya Building

OFC-03

Honmachibashi Tower

OFC-04

Nishi-Shinjuku Matsuya Building

OFC-06

Shibuya MK Building

Minato Ward,Tokyo
Chuo Ward,
Osaka City, Osaka
Shibuya Ward,Tokyo
Shibuya Ward,Tokyo

appraisal

Investment

value

ratio

（million

(%)

yen）

（Note4）（Note3）

2,973

3,070

2.9

6,065

6,960

5.8

1,763

2,510

1.7

2,042

3,260

2.0

6,320

7,840

6.1

2,286

2,590

2.2

1,450

1,550

1.4

2,580

2,690

2.5

7,440

7,520

7.2

1,020

1,160

1.0

Office Subtotal

32.7

Kanagawa Ward,
OFC-08Asahi Building

Yokohama City, Kanagawa
Kanagawa Ward,

OFC-09Hakata-eki East Place

Yokohama City,
Kanagawa

OFC-10Nihonbashi Hamacho Park Building

OFC-11

Amusement Media Gakuin Honkan

OFC-12

Higashi Kobe Center Building

OFC-13

Amusement Media Gakuin Shinkan

RSC-01

Urban Park Azabujuban

RSC-02

Urban Park Daikanyama

RSC-05

Urban Park Namba

RSC-06

Urban Park Gokokuji

RSC-07

Urban Park Kashiwa

RSC-08

Urban Park Ryokuchi Koen

RSC-09Urban Park Koenji

RSC-10Urban Park Ichigao

Chuo Ward,Tokyo
Shibuya Ward,Tokyo
Higashinada Ward,
Kobe City, Hyogo
Shibuya Ward,Tokyo
Minato Ward,

2,045

2,480

2.0

6,315

8,240

6.1

1,490

1,650

1.4

1,460

1,530

1.4

Kashiwa City, Chiba

1,186

1,190

1.1

Suita City, Osaka

1,550

1,620

1.5

1,167

1,180

1.1

1,810

1,850

1.7

Tokyo
Shibuya Ward,Tokyo
Naniwa Ward,
Osaka City, Osaka
Toshima Ward,Tokyo

Suginami Ward,Tokyo
Yokohama City,
Kanagawa

21

RSC-11

Urban Park Gyotoku

Ichikawa City, Chiba

1,430

1,500

1.4

Residence Subtotal

17.8

6,942

7,310

6.7

3,560

4,170

3.4

7,875

8,650

7.6

4,700

4,850

4.5

1,300

1,350

1.3

3,000

3,020

2.9

821

850

0.8

2,755

2,860

2.7

Logistics facility Subtotal

29.8

Iwatsuki Ward,
LGC-01

Iwatsuki Logistics

Saitama City,
Saitama
Kanagawa Ward,

LGC-02

Yokohama Logistics

Yokohama City,
Kanagawa

LGC-03

Funabashi Logistics

LGC-04

Baraki Logistics

LGC-05Tokorozawa Logistics

LGC-06

Funabashi Nishiura Logistics Ⅰ

LGC-07

Funabashi Nishiura Logistics Ⅱ

LGC-08

Matsubushi Logistics

HTL-01R&B Hotel Umeda East

HTL-02

Smile Hotel Namba

HTL-03

BEST WESTERN Tokyo Nishikasai

Funabashi City,
Chiba
Ichikawa City, Chiba
Tokorozawa City,
Saitama
Funabashi City,
Chiba
Funabashi City,
Chiba
Kitakatsushika,
Saitama
Kita Ward, Osaka
City, Osaka
Naniwa Ward,
Osaka City, Osaka
Edogawa Ward,
Tokyo

2,069

2,320

2.0

1,750

1,490

1.7

3,827

3,750

3.7

3,248

3,250

3.1

1,970

2,000

1.9

2,500

2,520

2.4

3,180

3,210

3.1

2,000

1,970

1.9

Hotel Subtotal

19.8

Tsurumi Ward,
HTL-04

BEST WESTERN Yokohama

Yokohama City,
Kanagawa
Chuo Ward,

HTL-05

Hotel WBF Fukuoka Tenjin Minami

Fukuoka City,
Fukuoka

HTL-06

GLANSIT AKIHABARA

HTL-07

BEST WESTERN Tokyo Nishikasai Grande

HTL-08

Hotel WBF Art Stay Namba

Chiyoda Ward,Tokyo
Edogawa Ward,Tokyo
Naniwa Ward,
Osaka City, Osaka

Total

100.0

(Note1) “Location” states the minimum individual administrative division in the region where the assets held by SAR as of today (excluding the
mezzanine loan debt stated under <Mezzanine> below) (hereinafter “Already Acquired Assets (Real Estate Etc.)”) and the Assets to be
Acquired are located.
(Note2) ”Acquisition price” means the sale and purchase proceeds described in the sale and purchase agreement related to each acquired asset(real estate properties etc.), and “Planned Acquisition Price” means the planned sale and purchase proceeds as stated in theagreement signed with the Seller in relation to the Assets to be Acquired, and each price is stated by rounding the amounts of lessthan 1 million yen to the nearest 1 million yen. The Acquisition Price and the Planned Acquisition Price do not include consumption tax,

22

local consumption tax, or expenses required for acquisition. However, with respect to “Minami-Azabu Shibuya Building”, as it is basedon a sale and purchase agreement for multiple properties where no price is established for each individual property, the amountderived by prorating the total sales price of the multiple properties based on the ratio of the appraisal values of each individual
property as of the time of their acquisition is stated as the “Acquisition Price”.
(Note3) ”Real estate appraisal value” states the appraisal values stated in the real estate appraisal reports based on the price as of January 31,
2020, for already acquired properties, and the appraisal value stated in the real estate appraisal report based on the price as ofDecember 1, 2019 with respect to the Assets to be Acquired.
(Note4) “Investment ratio” shows the ratio of the (planned) acquisition price of each of acquired assets or Assets to be Acquired against thesum of the (planned) acquisition price for acquired assets and Assets to be Acquired rounded to the first decimal place.

＜Mezzanine Loans＞
Investment
Asset no. Asset type

ratio

Asset name (overview)(%)(Note1)

MEZ-01
Mezzanine loan debt

MEZ-03

MEZ-04

Corporate bondHaneda Hotel Development GK
Series 1 Item A Unsecured Bonds(Name: Star Asia Mezzanine Loan
Debt Investment Series 1)

Subordinate beneficiary interest oftrust with loan claims to GK CHK as
Beneficia main asset in trust, which holds
rytrust beneficiary interest with The
interest Royal Garden Residencein trust Shirokanedai as main asset in trust(Name: Star Asia Mezzanine Loan
Debt Investment Series 3)
Subordinate part of nonrecourse
loan to GK DS Kaigan, whose
collateral asset shall be theLoan beneficiary interest in trust withclaims Premier Kaigan Building as the main
asset in trust(Name: Star Asia Mezzanine Loan
Debt Investment Series 4)
Mezzanine loan debt Total

Investment
Acquisition
ratio to the
priceInterest rate Acquisition
entire(million yen) (Note3)
date
portfolio (%)(Note2)(Note4)48.4%400(Note5)

Base rate(Note6)＋5.0%

October
31,2017

0.4%

15.3%

126

Base rate(Note7)＋5.0%

December
26,2018

0.1%

36.3%

300

Base rate(Note8)＋5.0%

January
30,20190.3%

100.0%

826

0.7%(Note1) “Investment ratio” is the acquisition price expressed as a percentage of the sum total of mezzanine loan debt.
(Note2) “Acquisition price” is the sale and purchase price in the agreement (each do not include transfer-related costs),each rounded down to thenearest million yen.
(Note3) ”Interest Rate” states the interest rate with respect to bonds, the distribution ratio with respect to trust beneficial interests, and the interest
rate with respect to loan receivables, respectively.
(Note4) “Investment ratio to the entire portfolio” is the acquisition price of each mezzanine loan debt as a percentage of the sum total of (scheduled)acquisition price of the portfolio (including Existing Assets (real estate, etc.) and Assets to be Acquired) including the mezzanine loan debt
after the Transaction.
(Note5) “400” means 400 million yen of total issued bonds amount of 701 million yen.
(Note6)

Base rate is JBA 3-month TIBOR. The Japanese yen Tibor can be confirmed on the website of the JBA TIBOR Administration(http://www.jbatibor.or.jp/English/rate/). The same applies hereinafter. For each interest calculation period, the rate announced at 11 a.m.
(Tokyo time) two business days prior to the last day of the previous calculation period of the relevant calculation period (the first date is twobusiness days prior to the closing date of the senior loan which will be made closing with the payment of the bond) will be applied as thebase rate.

(Note7) Base rate is JBA 3-month JPY TIBOR. For each interest calculation period, the rate announced at 11 a.m. (Tokyo time) two business days prior to
the last day of the previous calculation period of the relevant calculation period (the first date is December 21, 2018) will be applied as the23base rate.
(Note8) Base rate is JBA 3-month JPY TIBOR. For each interest calculation period, the rate announced at 11 a.m. (Tokyo time) two business days prior to
the last day of the previous calculation period of the relevant calculation period (the first date is two business days prior to the closing date)
will be applied as the base rate.

24Reference Material 2
Type

OfficeResidence

Logistics
facility

Hotel

Propertyno.

Summary of earthquake risk analysis
PML(%)

Property name

OFC-01

Minami-Azabu Shibuya Building

11.6

OFC-03

Honmachibashi Tower

5.5

OFC-04

Nishi-Shinjuku Matsuya Building

5.5

OFC-06

Shibuya MK Building

7.2

OFC-08Asahi Building

6.2

OFC-09Hakata-eki East Place

4.7

OFC-10Nihonbashi Hamacho Park Building

7.4

OFC-11

Amusement Media Gakuin Honkan

7.6

OFC-12

Higashi Kobe Center Building

8.6

OFC-13

Amusement Media Gakuin Shinkan

9.6

RSC-01

Urban Park Azabujuban

7.5

RSC-02

Urban Park Daikanyama

8.1

RSC-05

Urban Park Namba

8.1

RSC-06

Urban Park Gokokuji

5.1

RSC-07

Urban Park Kashiwa

4.9

RSC-08

Urban Park Ryokuchi Koen

6.4

RSC-09Urban Park Koenji

10.4

RSC-10Urban Park Ichigao

9.8

RSC-11

Urban Park Gyotoku

5.1

LGC-01

Iwatsuki Logistics

3.9

LGC-02

Yokohama Logistics

13.0

LGC-03

Funabashi Logistics

5.7

LGC-04

Baraki Logistics

3.8

LGC-05Tokorozawa Logistics

9.5

LGC-06

Funabashi Nishiura Logistics Ⅰ

4.8

LGC-07

Funabashi Nishiura Logistics Ⅱ

2.9

LGC-08

Matsubushi Logistics

2.2

HTL-01R&B Hotel Umeda East

9.0

HTL-02

Smile Hotel Namba

9.2

HTL-03

BEST WESTERN Tokyo Nishikasai

9.0

HTL-04

BEST WESTERN Yokohama

11.1

HTL-05

Hotel WBF Fukuoka Tenjin Minami

5.0

HTL-06

GLANSIT AKIHABARA

3.7

HTL-07

BEST WESTERN Tokyo Nishikasai Grande

6.1

HTL-08

Hotel WBF Art Stay Namba

6.7

Entire portfolio (35 properties) (Note)

3.3（Note）The figure in the entire portfolio column is the PML for the entire portfolio of the Existing Assets and Assets to be
Acquired (except for Asset to be Transferred) based on “portfolio earthquake risk evaluation report” prepared by
TOKIO MARINE & NICHIDO RISK CONSULTING CO.,LTD., dated February 2020.

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Reference Material 3

Location maps / photos of exterior of Assets to be Acquired

Urban Park Ichigao<Exterior>

<Map>

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Urban Park Gyotoku<Exterior>

<Map>

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Reference Material 4

The terms used in the table of Description of Assets to be Acquired and Asset to beTransferreda.

Explanation on “Property no.” and “Type”

Property Number column and Type column: Each of Assets to be Acquired and Asset to be Transferred by SAR
is categorized by use of OFC (office), RTL (commercial / retail), LGC (logistics), or HTL (hotel). Then, for eachcategory, serial numbers are given to the assets in the category. In case of a property which could straddle
two or more categories, it shall fall under the category from which the property generates the largest sum ofassumed rent income.
b.

Explanation on “Overview of specified asset”(a)“Trust expiration date” column: Herein is shown the planned date of trust expiration as of theplanned acquisition date. As for Asset to be Transferred, the trust expiration date which is
stipulated in the existing contract as of today is shown.

(b)“Planned Acquisition price” column: Herein is shown the planned acquisition price of the Assets to
be Acquired as described in the purchase agreement of the Assets to be Acquired (excluding
consumption taxes, local consumption taxes, and expenses necessary for the acquisition), afterrounded to the nearest million yen.
“Planned Transfer price” column: Here in shown the planned transfer price of Asset to beTransferred as described in the purchase agreement of the Asset to be Transferred (excluding
consumption taxes, local consumption taxes and expenses necessary for the transfer), afterrounded to the nearest million yen.

(c)“Planned Acquisition Date” column: Herein is shown the planned MMDDYY of acquisition by SAR.
“Planned Transfer Date” column: Herein is shown the planned MMDDYY of transfer by SAR.

(d)“Location” column: Herein is shown the certified address in registry. “Indication of residential
address” column: Herein is shown the postal address. If postal address is not available, registeredaddress of the property (if there are two or more of them, one is selected) is shown.

(e)“Land” column:(ⅰ) “Type of ownership” column: Herein is shown the type of right(s) held by respective trusteeof the Assets to be Acquired or of the Asset to be Transferred.
(ⅱ) “Site area” column: Herein is shown the land area as recorded in registry, unless otherwise
noted. For this reason, it possibly might not be equal to the actual.
(ⅲ) “Use district” column: Herein is shown the type of use in accordance with Article 8,
Paragraph 1 and Item 1 of the Urban Planning Act (Act No.100 of 1968; including its
amendments) (“Urban Planning Act”).
(ⅳ) “Building coverage ratio” column and “Floor area ratio” column: Herein is shown thepertinent figure in each column in accordance with the relevant laws and regulations (theBuilding Standards Act, the Urban Planning Act, etc.)(f) “Building” column:(ⅰ) “Type of ownership” column. Herein is shown the type of right(s) or the type of planned
right(s) held by respective trustee of the Assets to be Acquired or the Asset to beTransferred(ⅱ) “Total floor area” column: Herein is shown the sum total of floor areas as recorded inregistry, unless otherwise noted. For this reason, it possibly might not be equal to the28actual figure.
(ⅲ) “Use” column: Herein is shown the registered use or, if multiple uses are registered therepresentative use from what are recorded in registry, it possibly might not be equal to theactual representative use.
(ⅳ) “Construction completion” column: Herein is shown MMDDYY of the representative building
first built as recorded in registry.
(ⅴ) “Structure and floors” column: Herein is shown the structure of the representative building,etc. as recorded in registry. It possibly might not be equal to the actual structure. As forthe building with compartmentalized ownership, the structure and the number of floors
for the entire building are shown.
(g)“Property management company” column: Herein is shown the name of property managementcompany (“PM Company”), to which property management operation is (planned to be) entrusted
as of today.

(h)“Master lease company” column: Herein is shown the name of the master lease company, towhich master lease operation is (planned to be) entrusted, as of today.

c. Explanation on “Status of leasing”(a)“Total leasable area” column: Herein is shown the sum total of leasable floor areas of building of
the Assets to be Acquired or of the Asset to be Transferred (in case common space is also leased,
area of that space is included in the total). The figure does not include from area of the land lots
leasable for parking and other purposes. Leasable area is counted not from registry data but
drawings of the buildings, so it possibly might not be equal to the total floor area as recorded inregistry.
Please note that the source data for the column represent what were provided by the current
owner(s) of the Assets to be Acquired as of January 31, 2020.

(b)“Total leased area” column: Herein is shown the sum total of the floor areas to be leased as
described in lease agreement for each of the Assets to be Acquired or Asset to be Transferred asof January 31, 2020 out of the leasable area. The figure does not include the area of the land lots
to be leased for parking and other purposes. Please note that the source data for the column
represent what were provided by the current owner(s) of the Assets to be Acquired as of January
31,2020.

(c)“Occupancy rate” column: Herein is shown the percentage of total leased floor area over the total
leasable floor area of the Assets to be Acquired or of the Asset to be Transferred, after rounded to
the first decimal place. Please note that the source data for the column represent what were
provided by the current owner(s) of the Assets to be Acquired as of January 31, 2020.

(d)“Total number of tenants” column: Herein is shown the total number of tenants as confirmedwith the lease agreements effective as of January 31, 2020 of the Assets to be Acquired or the
Asset to be Transferred. In case a specific tenant uses two or more rooms in one of the Assets to
be Acquired or the Asset to be Transferred, such tenant is counted only once for the asset. Also, incase a specific tenant signs lease agreements for rooms in two or more assets, the tenant shall becounted for each of the assets separately. In case a pass-through type of master lease agreement(a lease agreement in which the master lessee receives rent from end tenants and pay the same29

amount to the lessor) is executed for any of the Assets to be Acquired or the Asset to beTransferred, total number of the actual (end) tenants under the master lease agreement for theasset is shown herein.
(e)“Monthly rent (including common area maintenance fee)” column: Herein is shown the total ofrent amounts as described in lease agreements with respective tenants as of January 31, 2020
(confined to room rents; excluding the charges for warehouses, sign boards and parking lots; but
including the common service expenses; and free rent cases as of the same date are notconsidered), after rounded to the nearest thousand yen.

(f)“Security and guarantee deposits” column: Herein is shown the sum total of refundable deposits
as required in lease agreements effective as of January 31, 2020 (only for the tenants who actually
were in respective rooms at the time) of the Assets to be Acquired or of the Asset to beTransferred. In case master lease agreement is executed for any of the Assets to be Acquired orAsset to be Transferred, sum total of refundable deposits as described in the individual leaseagreements with respective (end) tenants is calculated to be shown in the column.

d.

Explanation on “Special notations”
Special notation column: Herein is shown a description not only on the items considered material in
relation to the involved rights and assumed uses but also on the appraisal value of, profitability of, andthe other items considered material in relation to the disposability of the Assets to be Acquired or of
the Asset to be Transferred.

e.

Explanation on “Summary of real estate appraisal report”(a)“Summary of real estate appraisal report” column: Herein is shown a summary of respective
appraisal report, which was prepared either by Japan Real Estate Institute and The Tanizawa Sogo
Appraisal Co., Ltd. for the Assets to be Acquired or the Asset to be Transferred.

(b)“Appraisal value” column: Herein is shown only the opinions on the value of respective property
as of the date of appraisal, expressed by the appraiser who did the appraisal of the property, in
accordance with the Act on Real Estate Appraisal (Act No.152 of 1963; including its amendments)
and commonly accepted appraisal standards for real estate properties, etc.

(c)

In case appraisal is once again undertaken for the same property, its result could be different fromthe previous result because appraiser and/or appraisal method and/or appraisal timing is different.
Also, it is requested to note that any appraisal result for any property is not what guarantees orpromises the actual tradability of the property at the appraised value whether for right now or forany moment in the future.

(d)None of Japan Real Estate Institute and The Tanizawa Sogo Appraisal Co., Ltd. who conductedappraisal is an interested party of neither SAR nor the Asset Manager.

f.

Explanation of the Section entitled “Property Description and Acquisition Highlight based on theinvestigation by the Asset Manager”
The Asset Manager has described, by making reference to real estate appraisal reports and market
reports etc. and by taking into account the results of individual investigations made on its own, thebasic attributes and characteristics of the relevant properties, and has also described the backgroundleading to acquisition of the relevant properties (i.e. for those properties acquired from sponsor
groups, the name of the sponsor group, and with respect to properties acquired based on sale
information obtained by the Asset Manager individually and on its own, the background to such

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acquisition). The “<Sponsor Fund>” means it has been acquired from a sponsor group, “<Outside
Acquisition>” means it has been obtained from a third party, “＜Bilateral Negotiated Transaction>means it has been acquired based on bilateral negotiations from a third party, and “ ＜Warehousing>” means that it has been obtained by using the warehousing function of a sponsor
group.
g.

Explanation regarding the Section “Demographic Analysis etc., Market Analysis, and the AssetManager’s Individual Analysis”
The Asset Manager has described its own individual market analysis made based on informationfrom various real estate information specialized firms and disclosed materials.
h.

Explanation regarding the Section “Comprehensive Evaluation by SAR”
SAR’s own individual assessments are stated taking into account paragraphs f. and g. above.

This is an English translation of the announcement in Japanese dated March 2, 2020.
However, no assurance or warranties are given for the completeness or accuracy of this English translation.

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