Securities Code 3468
February 26, 2019
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Director(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato, President and CEO
Contact: Toru Sugihara, Director and CFO
TEL: +81-3-5425-1340

Supplementary Material Concerning Partial Amendment to the Management Guidelines1Overview of Expansion of Investment Target Area
with Amendment of Management Guidelines
Policy since listing of prioritized, focused investment in Tokyo Area will continue(Reference)
Ratio for Tokyo Area (assumption acquisition price basis)

Prioritized focused investment in Tokyo Area
Tokyo Area
70% or more

Other
26.0%

Other
30% or less

Other
27.2%

As of Feb. 1,2019

After acquisitionof OHA Building

102.3
billion yen

104.1 billion yen(Note)

No changes made to definition of “Tokyo Area” or policy ofan investment ratio of 70% or more for Tokyo Area

TokyoArea
72.8%

TokyoArea
74.0%(Note) Figures are estimates calculated based on preferential negotiation price. As of the date of thismaterial OHA building is not acquired by SAR and there is no guarantee that SAR will acquire each ofabove properties.

Increased opportunities for external growth that pursues profitability and quality by adding “ExpandedTokyo Area” without changing the definition of Tokyo Area
Overview of expansion of investment area
Area
Focused investment

70% Tokyo Areaor(no change)
moreUse
Office and retail facility

Significance of expansion of target investment area
Target area

1 Increase of opportunities to consider acquisition

Residence, logistics facility,
hotel and student

Further increase of opportunities
for external growthTokyo 23 wards, Kawasaki-shi and Yokohama-shi

Tokyo, Kanagawa, Saitama and Chiba

of prime assets through the addition of target
investment areaaccommodation
Suburban Tokyo (outside 23 wards)

NEW

Major cities in Kanagawa and Saitama (excluding

ExpandedTokyo Area

Kawasaki-shi and Yokohama-shi)

Office and retail facility

Areas targeted for focused investment:
Tachikawa-shi, Hachioji-shi, Fuchu-shi, Chofu-shi, Machida-shi,

30%
or
less

Tama-shi, Kokubunji-shi, Musashino-shi, Koganei-shi, Saitama-2

Acquisition of higher-quality
properties
Selective investment in areas that are morecompetitive than other regional cities

Maximizing
unitholders’valueshi, Omiya-ku and Urawa-ku

Osaka Area
Nagoya Area
Fukuoka Area
Sapporo Area
Other
governmentdesignated cities

All assets
All assets
All assets
All assets

Osaka-shi, Osaka
Nagoya-shi, Aichi
Fukuoka-shi, Fukuoka
Sapporo-shi, Hokkaido

All assets

Sendai-shi, Miyagi; Niigata-shi, Niigata; Kyoto-shi,Kyoto; Sakai-shi, Osaka; Kobe-shi, Hyogo;
Hiroshima-shi, Hiroshima; Kitakyushu-shi, Fukuoka

Securing greater profitability

3 Securing of acquisition yields exceeding the NOI
yield after depreciation of the portfolio

2History of Active Management and the Silent partnership investment
Measures since listing to increase unitholders’ value and the positioning of the Silent partnership investment■ Realizing a positive cycle that increases both asset size and unitholders’ value through the continued

implementation of active management• Implementation of continuous external growth which pursues profitability and quality through diversificationand maximization of opportunities for acquisition• Enhancement of the portfolio and realization of gain on sale through flexible asset replacement

本投資法人
SAR

東証REIT指数TSE REIT Index

130,000
120,000

2nd PO
Jan. 12, 2018
1st asset replacement
Dec. 5, 2016

110,000• Increasing opportunities for external growth while pursuing
profitability and quality by maintaining prioritized focusedinvestment in Tokyo Area and expanding the investment area

2nd asset replacement
Feb. 28, 2017

Listing
April 20, 2016

Expansion of target
investment area
3rd asset replacement
Jul. 23, 2018

4th asset replacement
3rd PO
Aug. 21, 2018

1st PO
Mar. 17, 2017

Silentpartnershipinvestmentof concern

Pursuit ofprofitability andquality

100,000

110,000

Investment in mezzanine loan
debt 3
Dec. 20, 2018

Investment in mezzanine loan
debt 1
Oct. 25, 2017

90,000Investment
inmezzanine
loan debt

Investment in mezzanine loan
debt 4Jan. 24, 2019

100,000
Investment in mezzanine loan
debt 2
Dec. 20, 2017

80,000
Average cash distribution
per unit since listing:3,070 yen

3,112 yen
3,112 円
448

4,423
4,423yen円■Cash distribution per unit after adjustment
調整後一口当たり分配金□Cash distribution per unit with transient factors *4
一過性要因により一口当たり分配金

1,799

4,077 yen
4,077 円
1,313

2,773 yen2,773 円

3,580
3,580yen
円
834
2,746

968 yen
968 円
968

2,664

2,624

2,764

2,931

第1期
1st FP
ended
Jul. 20162016年7月期

第2期
2ndFPended
Jan. 20172017年1月期

第3期
3rdFPended
Jul. 20172017年7月期

第4期
4th FP
ended
Jan. 20182018年1月期

第5期
5thFPended
Jul. 20182018年7月期-158

80,000*1: Includes one reimbursed case
*2:The average of Mezzanine 1-4*3: Gain for sale – Internal reserves

第6期（予想）6th FP
ended
Jan. 20192019年1月期(forecast)

Underlying real estate
OHA Building
Preferential
negotiation rightMaintain ratio of 70% ormore for Tokyo Area

120,000

90,000Addition of Expanded
Tokyo Area

Silent partnership investment andpreferential negotiation rights
Loan
1,322 million yen
Silent partnershipinvestment(sponsor)
430 million yen
Silent partnership
Real estate trust
beneficiary right, etc. investment (SAR)
100 million yen
1,665 million yen• Increasing cash distributions by effectively utilizing cashon hand and investing at higher yields

Made(*1)

Total investment
amountAverage interest
Rate(*2)

4 cases

1.16 billion yen

Standard + 5%Investments• Increasing unitholders’ value and stability through growth

Increase of of the asset size
asset size • Improving liquidity of investment units through increase ofthroughmarket cap
publicNumber of
Total asset acquisition
Total issue priceoffering
public offerings
amount3

46.9 billion yen

19.9 billion yen• Generating gain on sale and pay out cash distributions tounitholders•
Internally reserving and stabilizing future cash distributions
Asset
replacement
Number of Return of gain on sale Internal reserves(including plan orreplacements expected amount)(*3)

4

2.53 billion yen

0.11 billion yen*4:Transient factors refer to the following:① Gain on sales of real estate properties ② Equivalent of fixed property taxes, etc. that are not expensed due to being included in the acquisition cost of real estate, etc. ③ Of the expenses
related to funding, arrangement fees for investment unit issuance expenses and borrowings from syndicates of lenders ④ Expenditures such as asset management fees and taxes and public charges (non-deductible consumption tax,etc.) which fluctuates as a result of ① through ③ ⑤ Tax expenses for internal reserves as well as income tax that increase with internal reserves, etc.

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(Reference) Prioritization of Focused Investment Areas in Tokyo Area
Ample office stock(Reference) Overview of the “Basic Plan for Base Development in Tama”■In total, the focused investment areas of the Expanded Tokyo Area have anoffice stock comparable to Fukuoka City

• Basic plan for the establishments of hubs in Tama such as core cities and living bases• 2025 has been set as the target for implementation

Comparison of stock size of focused investment areas and major cities• 7 basic policies(thousand tsubos)

400343300285

200
51100

• Regeneration of urban areas through compact • Formation of a green city spaceurban development• Creation of beautiful and attractive• Establishment of industrial hubs forcityscapes
the formation of a Tama Silicon Valley• Formation of safe and secure city districts

347

297
150

104

• Environmentally-conscious and sustainableurban development

129
26

14

Kitakyushu-shi

Fukuoka-shi

Kobe-shi

Sakai-shi

Kyoto-shi

Niigata-shi

Sendai-shi

Hiroshima-shi

Source: CBRE K. K.

Sapporo-shi

Total forfocusedinvestmentareas0• Enhancement of the foundation oftransportation• Core cities- Hachioji, Tachikawa, Tama New Town, Ome and Machida- 55 projects are proposed and development is being promoted emphatically andsystematically• Living bases- Around the stations of Musashi-Koganei, Kokubunji, Toyoda, Haijima, Chofu, Fuda,
Kokuryo, Fuchu, Higashi-Murayama and Hibarigaoka- 32 projects are proposed and urban development is being promoted

Favorable demographic trends■There are solid inflows of population in each of the focused investment areas,making excellent foundational terms
Excess Population Inflow at Focused Investment Areas Over 5 Years (total from 2014 to 2018)(persons)
10,000

8,564

8,000
6,000

5,063

8,442
5,345

4,406

3,908

2,832

4,000

3,863

1,623

2,000

3,502
2,523

Source: Prepared by the Asset Manager based on Basic Resident Register

浦和区
Urawa-kuOmiya-ku
大宮区

Koganei-shi
小金井市

Musashino-shi
武蔵野市

Kokubunji-shi
国分寺市Tama-shi
多摩市

Machida-shi
町田市

Chofu-shi
調布市

府中市
Fuchu-shi

Hachioji-shi
八王子市

立川市
Tachikawa-shi

0

Source: “Basic Plan for Base Development in Tama” by the Bureau of Urban
Development, Tokyo Metropolitan Government

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Disclaimer
This document has been prepared to provide information, and not for soliciting and inviting investments in or recommendingtransaction of certain products. SAR does not guarantee the accuracy or completeness of the information provided in thisdocument although effort has been made to provide correct information based on information available to SAR. Moreover,please note that the contents of this document are subject to change or removal without prior notice. Duplication andreproduction, etc. of the contents contained in this document without prior consent is prohibited. This document includes
graphs, data, etc. publicly disclosed by third-parties. Furthermore, the document also includes analysis, judgement andother opinions by Star Asia Investment Management, Co,. Ltd. concerning such information. This document discusses future
expectations, identifies strategies, contains projections of our results operations or financial condition, or states otherforward-looking information based on certain assumptions, estimates and projections, Known and unknown risks,
uncertainties and other factors could cause our actual results, performance or achievements to differ materially from thosecontained or implies in any forward-looking statement. We cannot give any assurances that the expectations expressed inthese forward-looking statements will turn out to be correct.
Copying, reprinting or any other use of the contents of this document without prior approval is strictly prohibited.

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