Securities Code 3468

Sixth Asset Replacement
Acquisition： Urban Park Tokiwadai Koen（Residence）／Disposition： Suroy Mall Nagamine（Retail）

Supplementary Explanatory Material
Regarding October 5, 2020 Press Release

October 5, 2020
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

Sixth Asset Replacement
Acquisition： Urban Park Tokiwadai Koen（Residence）／Disposition： Suroy Mall Nagamine（Retail）

Execution of 6th Asset Replacement

Asset to be acquired

Asset to be Transferred➢

Early realization of the post-merger portfolio strategy
to “sell suburban-type commercial/retail facilities”.

＜Urban Park Tokiwadai Koen＞＜Suroy Mall Nagamine＞➢Aim to strengthen the portfolio and maximize
unitholders’ value through continued implementation ofactive management.

➢The transfer is expected to generate a loss-on-sale fortax purposes, and consequently a part of theaccounting gain-on-sale is expected to be retained asinternal reserve.

Plannedacquisition priceAppraised value

JPY 3,770 mm

Appraised cap rate 5.6 ％AgeThe Approach to this Asset Replacement➢

From a macro perspective, concerning suburban-typecommercial/retail facilities in rural areas, there is aconcern regarding maintaining of asset value.

➢Even under COVID-19, occupancy rates of family-type
residences in the large metropolitan area have been
maintained at high levels and revenues are stable.

Planned sale price JPY 3,500 mm

JPY 3,506 mm

Appraised value(note 1）
(note 2）26.5 yearsJPY 3,450 mm

Appraised cap rate 5.8 ％Age(note 3）✓ Use of Preferential Negotiation Rights✓ In 2016, the common-use area and exclusive
areas have been fully renovated, and theproperty is highly competitive.
✓ In the surrounding area, there is a leafy park
and the Yokohama National University campus,
and together with the 3LDK layout for all units,
the property is highly appealing to families (inparticular households rearing children).

13.1 years(note 1）
(note 2）
(note 3）✓ It is likely that the number of brick-and-mortar
stores may decrease in the mid- to long-term
due to a reduction in population in trade zones,
and due to the advance of e-commerce.
✓ Find buyer candidates by utilizing the broad
network of Star Asia Investment Management
Co., and achieve a sale above the appraisal
value (SAR’s acceptance price).

＜The Portfolio after the 6th Asset Replacement＞

Implementation policy for Asset Replacement
1.Future revenue contribution of the assets to be
replaced (strengthen SAR’s portfolio)

Hotel
12.3%
Logistics
20.0%

Office40.9%

2.Real Estate Market Conditions by Asset Type
3.Level of the investment unit price of SAR※please refer to ”Supplementary Material Concerning Acquisitionand Transfer (Asset Replacement) of Real Estate BeneficiaryInterests in Trust” announced on July 23, 2018

Residence
15.5%→17.6%

Retail11.2%→9.2%➢ The ratio of residence which isbelieved to be a defensive asset typeto increase.

Other
27.0%

Residence：15.5% → 17.6%
Retail：11.2% → 9.2%

TokyoArea
73.0%➢ The ratio of the Tokyo metropolitan
area to increase due to sale of thecommercial retail facility in the ruralarea and purchase of residence in theTokyo metropolitan area.：
70.4% → 73.0%※The above stated ratio has been calculated based on the asset size of JPY166.5 billion (purchase price basis) after execution of the 6th asset replacement and the sale of
60% quasi-co-ownership interest in Alphabet Seven.
(Note 1) The appraisal value states the appraisal value as of September 1, 2020 (for Urban Park Tokiwadai Koen) and as of July 31, 2020 (for Suroy Mall Nagamine) as stated in the appraisal reports obtained by SAR. (Note 2) Appraisal NOI Yield is calculated by
dividing the Net Operating Income (NOI) stated in each appraisal report by the expected acquisition price with respect to assets expected to be acquired, and by the expected assignment price with respect to assets expected to be assigned, respectively.(Note 3) For
the years since completion, the number of years lapsed as of July 31, 2020 from construction completion is stated.

Disclaimer
This document has been prepared to provide information, and not for soliciting and inviting investments in or recommending transaction ofcertain products. SAR does not guarantee the accuracy or completeness of the information provided in this document 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 and reproduction, etc. of the contents contained in this document without
prior consent is prohibited. This document includes graphs, data, etc. publicly disclosed by third-parties. Furthermore, the document also
includes analysis, judgement and other 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 statesother forward-looking information based on certain assumptions, estimates and projections, Known and unknown risks, uncertainties andother factors could cause our actual results, performance or achievements to differ materially from those contained or implies in any
forward-looking statement. We cannot give any assurances that the expectations expressed in these forward-looking statements will turnout 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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