August 21, 2018
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:
Toru Sugihara
Director and CFO
TEL: +81-3-5425-1340

Notice Concerning Acquisition and Lease Contract with New Tenants,
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 lease real estate
beneficiary interests in trust of five real estate properties (the “Asset to be Acquired” and the entire transaction toacquire these beneficiary interests is referred to as the “Acquisition”) and to transfer beneficiary interests in trustof one real estate property (the “Assets to be Transferred” and the entire transaction to transfer these beneficiaryinterests is referred to as the “Transfer”) (the entire transactions to acquire and transfer these beneficiaryinterests is referred to as the “Transactions”).
SAR deems the acquisition of “GLANSIT AKIHABARA” (a property to be acquired through the Acquisition) and theTransfer (the transfer of “Urban Park Shin-Yokohama”) as asset replacement to be conducted in accordance withthe active management strategy in pursuit of maximization of unitholders’ value of SAR. For details of asset
replacement, please refer to “2. Reason for the Acquisition, Leasing, and Transfer, (2) Asset to be Transferred(position as asset replacement)” below. Concerning the implementation policy for asset replacement, please refer
to our press release dated July 23, 2018 entitled “Notice Concerning Acquisition and Transfer (Asset Replacement)of Real Estate Beneficiary Interests in Trust.”
1.

Overview of the Assets to be Acquired and Asset to be Transferred(1) Overview of Assets to be Acquired
Asset type

Property(Note 1)no.

Property nameLocation

Planned acquisition
price(mm yen)

OfficeOFC-11

Amusement Media Gakuin Honkan

OfficeOFC-12

Higashi-Kobe Center Building

Hotel
Hotel

HTL-06
HTL-07

GLANSIT AKIHABARABest Western Tokyo Nishikasai Grande

Hotel

HTL-08

Hotel WBF Art Stay Namba
Total(5 properties)

Shibuya-ku, Tokyo
Higashinada-ku,
Kobe-shi, Hyogo
Chiyoda-ku, Tokyo
Edogawa-ku, Tokyo
Naniwa-ku,
Osaka-shi, Osaka(Note2)

2,580
7,440
2,500
3,180
2,000
17,700(Note 1) As for “Property no.”, please refer to “3. Description of Assets to be Acquired and Leased” below.
(Note 2) ”Planned acquisition price” indicates the planned sale and purchase price stated in the sale and purchaseagreement for the Assets to be Acquired, after rounded to the nearest million yen. The planned sale and purchaseprice does not include consumption tax, local consumption tax and various expenses required for the acquisition.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

1

Contract date
Planned acquisition dateSellers: August 21, 2018
: September 6, 2018 (delivery and settlement date): Please refer to “5. Planned Seller and Transferee Profile (1) Planned Seller
Profile” below.
: Proceeds from the issuance of new investment units through public offering(primary offering) for which resolution was made at the Board of Directors(Note 3)(Note 4)
meeting of SAR held on August 21, 2018
, new borrowings
andcash on hand.
: Payment of entire amount on planned acquisition date.

Acquisition financing

Settlement method(Note 3) Please refer to “Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units”
announced today for details.
(Note 4) Please refer to “Notice Concerning Debt Financing” announced today for details.

(2)

Overview of Asset to be Transferred

Asset type

Propertyno.

Property nameResidence

RSC-04

Urban Park Shin-Yokohama(Note 1)

Total

Location
Kohoku-ku,
Yokohama-shi,
Kanagawa(1 property)

Planned sales price(mm yen)(Note2)

2,775
2,775

(Note 1) As for “Property no.”, please refer to “3. Description of Assets to be Acquired and Leased” below.
(Note 2) The sales prices of the Asset to be Transferred stated in the sales and purchase agreement for the Asset to beTransferred (excluding transfer expenses, consumption tax and local consumption tax) is stated and amounts arerounded to the nearest million yen.

Contract date
Planned transfer date
TransfereePlanned sales priceBook value(Note)
Gain on transfer (estimate)
Settlement method

Use of gain on transfer
Special notation(Note)

2.

Note:: August 21, 2018
: October 11, 2018 (delivery and settlement date): Please refer to “5. Planned Seller and Transferee Profile (2) Planned
Transferee Profile” below.
: 2,775 million yen: 2,578 million yen (as of January 31, 2018): 177 million yen: SAR will receive deposit of 277,500,000 yen on the contract date of the saleand purchase agreement of beneficiary interest in trust and rest of theamount will be paid on the planned transfer date
: Proceeds from the sale of the property excluding miscellaneous expense
will be appropriated to a portion of the repayment of borrowings.
: Please refer to “4. Description of Assets to be Transferred (1) Urban Park
Shin-Yokohama ‘Special notation’” below.

Estimated gain on transfer based on the book value as of the end of January 2018 is stated. Actual gain on transfer
may differ from the above estimated amount.

Reason for the Acquisition, Leasing, and the Transfer<1> Assets to be Acquired
SAR holds the investment policy of “prioritized focused investment in the Tokyo metropolitan area (70% or moreinvestment ratio of the Tokyo metropolitan area among all investment)”, “continuous 'income stability' and(Note 1)'growth' through diversification of asset types”, “investment primarily in middle-sized assets”, and “strategic(Note 3)(Note 2)
investment in large-size assets
exclusively in 5 central wards of Tokyo.” In line with this policy, SAR isaiming to realize a steady growth as a diversified REIT.
Through the Acquisition, SAR aims to expand the asset size and diversify risks through the increase in the numberof properties held, as well as mainly to ensure the growth in medium to long-term profitability.
Shown below are key reasons for the investment decision for each of the selected assets.
This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

2

Furthermore, SAR judges that the lessees of the Assets to be Acquired satisfy the criteria for the selection oftenants (set by the Asset Manager) stated in the “Report on the Management Structure and System of the Issuerof Real Estate Investment Trust Units and Related Parties” dated April 27, 2018.
(Note 1) Middle-sized assets mean real estate, etc. whose acquisition prices are under 10 billion yen.
(Note 2) 5 central wards of Tokyo mean Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku.
(Note 3) Large-sized assets mean real estate, etc. whose acquisition prices are 10 billion yen or more.

[Office](1) Amusement Media Gakuin Honkan
Amusement Media Gakuin Honkan is an office building, approx. 7-minute walk from Ebisu Station on the JR
Yamanote, Saikyo and Shonan-Shinjuku Lines and the Tokyo Metro Hibiya Line.
The Ebisu area, where the property is located, is in high-quality business and residential environment. It has ahigh concentration of companies, in particular such as foreign owned companies, IT-related companies, andcreative companies such as advertisement and content industries. In addition, the area is also characterized as aquiet residential area with closer proximity to home, where residence and small stores exist.
In terms of the physical features, although this building has been fully leased by a single tenant at present, theproperty has a structure and specifications that can be leased by floor. The office room is pillar- and column-freespace, and has an open atmosphere with a ceiling height on the standard floor of 2,700 mm.
As a result of comprehensive consideration on the characteristics of the location and property, SAR decided toacquire the property by using the Sponsor support after determining that the acquisition would contribute to thestability of medium to long-term revenue and enhancement of the stability of the portfolio revenue.
(2) Higashi-Kobe Center Building
Higashi-Kobe Center Building is a multi-tenant office building, approx. 9-minute walk from Settsu-Motoyama
Station on the JR Tokaido Main Line.
Higashinada-ku, where the property is located, is the hinterland of the high-class residential area and has goodaccess to commercial areas such as an 11-minute boarding to Sannomiya Station and 17-minute boarding toOsaka Station from Settsu Motoyama on the JR Tokaido Line.
In terms of the physical features, the property has competitive specifications such as individual air-conditioning
units and raised floors, etc. Furthermore, having a large parking space for 180 cars on the premises and for 112
cars off the premises, the property is capable of attracting diversified demands including visit-type stores andtenants covering wide areas.
As a result of comprehensive consideration on the characteristics of the location and property, SAR decided toacquire the property through a negotiated transaction through a unique network of the Asset Manager after
determining that the acquisition would contribute to the stability of medium to long-term revenue andenhancement of the stability of the portfolio revenue.
[Hotel](3) GLANSIT AKIHABARA
GLANSIT AKIHABARA is a capsule hotel, approx. 4-minute walk from Akihabara Station on the JR Yamanote,
Keihin-Tohoku and Sobu Lines and approx. 2-minute walk from Suehirocho Station on the Tokyo Metro GinzaLine.
The Akihabara area, where the property is located, is famous nationwide as a mecca of electronics andsubcultures, and having good transportation convenience, it has a strong appeal for both business and leisuretravelers.
Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

3

In terms of the physical features, the property has a high appeal to a variety of guests with three types of rooms
depending on the intended use with private capsules, twin capsules and standard capsules, and large bathingareas.
As a result of comprehensive consideration on the characteristics of the location and property, SAR decided toacquire the property by using the Sponsor support after determining that the acquisition would contribute to thestability of medium to long-term revenue and enhancement of the stability of the portfolio revenue.
SAR will acquire GLANSIT AKIHABARA to replace Urban Park Shin-Yokohama, the Asset to be Transferred.
(4) Best Western Tokyo Nishikasai GrandeBest Western Tokyo Nishikasai Grande is a business hotel, approx. 5-minute walk from Nishikasai Station on theTokyo Metro Tozai Line.
The property has a good access to major business areas and sightseeing spots in Tokyo, which can attract bothbusiness travelers and leisure travelers. Located in a straight-line distance of approx. 4 km from Maihama Stationon the JR Keiyo Line, the nearest station to Tokyo Disney Resort (“TDR”), and offers free shuttle bus to TDR, it canalso attract leisure travelers visiting there.
In terms of the physical features, the property has a great appeal to a variety of guests with three types of guest
rooms depending on the intended use with seven single bedrooms, seven double bedrooms and 91 twin
bedrooms, as well as restaurant on the first floor.
As a result of comprehensive consideration on the characteristics of the location and property, SAR decided toacquire the property by using the Sponsor Support after determining that the acquisition would contribute to
the stability of medium to long-term revenue and enhancement of the stability of the portfolio revenue.
(5) Hotel WBF Art Stay Namba
Hotel WBF Art Stay Namba is a business hotel, approx. 2-minute walk from Ebisucho Station on the Osaka Metro
Sakaisuji Line.
The Namba area, where the property is located, is one of Osaka’s leading commercial areas offering convenient
access to sight-seeing spots and business district in Osaka, and it is ideally suited to efficiently accommodate
both business- and tourism-based demand.
In terms of the physical features, the property has a great appeal to a variety of guests with total 100 of“artistic-taste” rooms, as well as restaurant on the first floor.
As a result of comprehensive consideration on the characteristics of the location and property, SAR decided toacquire the property by using the Sponsor support after determining that the acquisition would contribute to thestability of medium to long-term revenue and enhancement of the stability of the portfolio revenue.
<2> Asset to be Transferred
Urban Park Shin-Yokohama
While SAR had been implementing measures toward improvement of occupancy rate and cost reduction of
Urban Park Shin-Yokohama since its acquisition, SAR started exploring possibilities of asset transfer looking at
the property’s small contribution to the portfolio revenue in light of actual-based NOI Yield after Depreciation(Note)
that had hovered at 2.6% on an acquisition price basis for one year until the end of the 4th Fiscal Period
ended January 2018 as well as the postponement of a railway project that should have led to improvement ofaccess to the property. As a result, SAR determined to transfer Urban Park Shin-Yokohama as it entered into an
asset transfer agreement with a realty investor who had offered a higher transfer price that exceeds theappraisal value of the property evaluating it from different angles placing emphasis on the property’s value as an
asset located in Tokyo Metropolitan Area and based on the assumption of certain revenue inflows in the future.
SAR is to realize a capital gain on the Transfer in the 6th fiscal period ending January 31, 2019.
Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

4

(Note)Actual-based NOI Yield after Depreciation of Asset to be Transferred is calculated by dividing the sum of theactual NOI after depreciation (rent revenue – rent expenses including depreciation) for the 3rd fiscal period
ended July 31, 2017 and the 4th fiscal period ended January 31, 2018 by the acquisition price, rounded to thefirst decimal place. The same shall apply hereinafter.

（Position as asset replacement）
There are three rounds of asset replacement that SAR has conducted or plans to conduct with the aim toenhance its portfolio and return capital gains to unitholders in accordance with the active management strategy
in pursuit of maximization of unitholders’ value since the listing in April 2016. (Concerning the third round ofasset replacement, which means the Acquisition of "Hotel WBF Fukuoka Tenjin Minami" and the transfer of"Hakata-eki Higashi 113 Building" both of which are explained in “Notice Concerning Acquisition and Transfer(Asset Replacement) of Real Estate Beneficiary Interests in Trust” announced on July 23, 2018, SAR is planning toconduct an acquisition of “Hotel WBF Fukuoka Tenjin Minami” by September 6, 2018 as described in theannouncement dated August 21, 2018 entitled “Notice Concerning Determination of the Planned Acquisition
Date and Change of the Funds for Acquisition” and is planning to transfer "Hakata-eki Higashi 113 Building"through two-step approach i.e. (i) transfer of 49% quasi-co-ownership interest in December 2018 and (ii)transfer of the remaining 51% in February 2019. For further details, please refer to the press releases mentioned
above. The third round of asset replacement is expected to allow SAR to enhance its portfolio through asset
replacement and record capital gains for two consecutive fiscal periods ending January 31, 2019 and July 31,
2109 in a row through the afore-said two-step transfer of “Hakata-eki Higashi 113 Building.”
SAR is placing the acquisition of “GLANSIT AKIHABARA” and the transfer of “Urban Park Shin-Yokohama” as an
asset replacement of the same kind as the aforesaid three rounds of asset replacement. SAR has determined toacquire “GLANSIT AKIHABARA,” comparing it with other properties under management of the sponsor group interms of property size, revenue stability, and growth potential during the process of exploring the transfer planof “Urban Park Shin-Yokohama.” SAR has determined to conduct its fourth round of asset replacement by
evaluating its appropriateness in light of the implementation policy for asset replacement mentioned below. For
further details, please refer to the announcement dated July 23, 2018 entitled “Notice Concerning Acquisition
and Transfer (Asset Replacement) of Real Estate Beneficiary Interests in Trust.”<Implementation policy for asset replacement and points considered in implementing asset replacement >1. Future revenue contribution of the assets to be replaced (Strengthen the portfolio)‐ Since the actual-base NOI Yield after Depreciation of “Urban Park Shin-Yokohama,” a property that SAR is totransfer, underperforms the average of entire portfolio, the property’s contribution to the portfolio revenue of
SAR is considered to be small.
‐ Existence of a real estate investor with different valuation bases (focusing on owning assets in themetropolitan area while pursuing a secured profit) for the planned transferee of “Urban Park Shin-Yokohama”
who offers a higher price than the appraisal value.
2.

Real Estate Market Conditions by Asset Type‐ Expectation for revenue growth of hotel assets due to the tightening of supply-demand balance following theenforcement of the Private Lodging Business Act (the New Private Lodging Business Act) and the subsequent
exit of illegal operators of private lodging facilities.
‐ The area around Akihabara is expected to attract inbound tourists steadily thinking of its popularity among
foreign tourists and its location in easy reach of major sightseeing spots located in the Tokyo Metropolitan
Area.

3. Level of the investment unit price of SAR‐ It is deemed that timely asset replacement generating capital gains, which will absorb finance cost, will allow
SAR to realize the maximization of unitholders’ interests on a long term basis through profitable expansion of
AUM without damaging short-term interests of unitholders.
Urban Park Shin-Yokohama is a property whose contribution to the portfolio revenue is small thinking of its
stand-alone actual-based NOI Yield after Depreciation that had hovered at 2.6% on an acquisition price basis in the
Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

54th Fiscal Period ended January 2018. Also considering the postponement of a railway project that should have led
to improvement of access to the property, SAR has determined to opt for “transfer” rather than “holding”
deeming it to be the better way toward maximization of unitholders’ interests.
Since “GLANSIT AKIHABARA,” a property to be acquired in this arrangement of asset replacement, is a newly
built building that was completed in September 2017, it is possible to limit the repair expenses and other capital
expenditures. Furthermore, with its 3.3% of the appraisal NOI Yield after Depreciation (Note), the property has
more contribution to the portfolio revenue of SAR than ”Urban Park Shin-Yokohama” In addition, thanks to thecharacteristics of the location and property mentioned above, a chance of benefiting from the rising demand of
inbound tourism as well as the domestic demand of business travelers and leisure travelers because of theaforesaid location and property features exists, and therefore the hotel operator is expected to show solid
business performance. Thus, SAR deems it as an asset that can achieve the stability of revenues under the leasing
contract of fixed-rate rent system when compared with other properties of the hotel sector, an asset class that canbenefit from revenue growth potential.
SAR believes that the improvement of portfolio’s profitability and subsequent increase of distributable profit
will be possible in light of the above mentioned factors.
(Note)

3.

Appraisal NOI yield after Depreciation of the properties to be acquired is calculated by dividing the total net
operating income by direct capitalization method as shown in the appraisal report (deducting assumed
depreciation amount calculated by the Asset Manager) of the properties to be acquired by the planned acquisition
price, rounded to the first decimal place.

Description of Assets to be Acquired and Leased
Please refer to Table (1) – Table (6) below, for the detail of each of the Assets to be Acquired. For the terms
used in the tables, please refer to the below.
a.

Explanation on “Property no.” and “Type”
Property Number column and Type column: Each Asset to be Acquired by SAR is categorized by use as OFC (office),
RTL (commercial / retail), RSC (residential), LGC (logistics), or HTL (hotel). Then, for each category, 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 of assumed 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 the planned
acquisition date of September 6, 2018.
(b)"Planned Acquisition price" column: Herein is shown the planned acquisition price of the Assets to be Acquiredas described in the purchase agreement of the Assets to be Acquired (excluding consumption taxes, local
consumption taxes, and expenses necessary for the acquisition), after rounded to the nearest million yen.
(c) "Planned Acquisition Date" column: Herein is shown the planned MMDDYY of acquisition 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, registered address 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 trustee of the Assets to
be Acquired.
(ii) "Site area" column: Herein is shown the land area as recorded in registry, unless otherwise noted. For thisreason, 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 the pertinent figure in each
Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

6column in accordance with the relevant laws and regulations (the Building Standards Act, the Urban Planning
Act, etc.).
(f) "Building" column:(i) "Type of ownership" column: Herein is shown the type of right(s) held by respective trustee of the Assets
to be Acquired.
(ii) "Total floor area" column: Herein is shown the sum total of floor areas as recorded in registry, unlessotherwise noted. For this reason, it possibly might not be equal to the actual figure.
(iii) "Use" column: Herein is shown the registered use or, if multiple uses are registered the representative usefrom what are recorded in registry, it possibly might not be equal to the actual representative use. As forthe building with compartmentalized ownership, the type of use for the exclusively owned space by SAR isshown.
(iv) "Construction completion" column: Herein is shown MMDDYY of the representative building first built asrecorded 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 for the building withcompartmentalized 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 the property management company(“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, to which 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 buildings of the Assets to
be Acquired (in case common space is also leased, area of that space is included in the total). The figure does
not include the area of the land lots leasable for parking and other purposes. Leasable area is counted not fromregistry data but from area data as described in lease agreements or from area data as calculated by using thearchitectural 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 May 31, 2018.
(b) "Total leased area" column: Herein is shown the sum total of the floor areas to be leased as described in leaseagreement for each of the Assets to be Acquired as of May 31, 2018 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
May 31, 2018.
(c) "Occupancy rate" column: Herein is shown the percentage of total leased floor area over the total leasable floorarea of the Assets to be Acquired, after rounded to the first decimal place. Please note that the source data forthe column represent what were provided by the current owner(s) of the Assets to be Acquired as of May 31,
2018.
(d) "Total number of tenants" column: Herein is shown the total number of tenants as confirmed with the leaseagreements effective as of May 31, 2018 of the Assets to be Acquired. In case a specific tenant uses two or morerooms in one of the Assets to be Acquired, such tenant is counted only once for the asset. Also, in case a specifictenant signs lease agreements for rooms in two or more assets, the tenant shall be counted for each of theassets separately. In case a pass-through type of master lease agreement (a lease agreement in which themaster lessee receives rent from end tenants and pay the same amount to the lessor) is executed for any of theAssets to be Acquired, total number of the actual (end) tenants under the master lease agreement for the asset
is shown herein.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

7

(e) "Monthly rent (including common area maintenance fee)" column: Herein is shown the total of rent amounts as
described in lease agreements with respective tenants as of May 31, 2018 (confined to room rents; excluding
the charges for warehouses, sign boards and parking lots; but including the common service expenses; and freerent cases as of the same date are not considered), after rounded to the nearest thousand yen.
(f) "Security and guarantee deposits" column: Herein is shown the sum total of refundable deposits as required inlease agreements effective as of May 31, 2018 (only for the tenants who actually were in respective rooms at
the time) of the Assets to be Acquired. In case master lease agreement is executed for any of the Assets to be
Acquired, sum total of refundable deposits as described in the individual lease agreements 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 theinvolved rights and assumed uses but also on the appraisal value of, profitability of , and the other items consideredmaterial in relation to the disposability of the Assets to be Acquired.
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 Daiwa Real Estate Appraisal Co., Ltd., or The Tanizawa Sogo Appraisal Co., Ltd. for
the Assets to be Acquired.
(b) "Appraisal value" column: Herein is shown only the opinions on the value of respective property as of the dateof 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 from the previous
result because appraiser and/or appraisal method and/or appraisal timing is different. Also, it is requested tonote that any appraisal result for any property is not what guarantees or promises the actual tradability of theproperty at the appraised value whether for right now or for any moment in the future.
(d) None of Daiwa Real Estate Appraisal Co., Ltd., or The Tanizawa Sogo Appraisal Co., Ltd. who conducted appraisal
is an interested party of neither SAR nor the Asset Manager.
f. Explanation on “Property information and acquisition highlight based on the survey by the Asset Manager”
Herein is shown a description on the basic features and characteristics of each of the Assets to be Acquired as
prepared by the Asset Manager from the appraisal report, market reports and from their own research, as well as a
description on the background of its acquisition (if it is an acquisition from Sponsor Group, background story on theacquisition by the group is described; and if it is an acquisition from the Asset Manager’s own origination,
background story on the sourcing is described). "<Sponsor fund>” means an acquisition from the Sponsor Group,“<external acquisition>” means an acquisition from a third-party, “<negotiated transaction>” means an acquisition
from a third party on a negotiation basis, and “<warehousing>” means an acquisition utilizing the warehousing
function of the Sponsor Group, respectively.
g. Explanation on “Demographic analysis etc., market analysis and independent analysis by the Asset Manager”
Herein is shown the result of the Asset Manager’s own market analysis based on the information from various realestate-specialized information providers and other publicly available information.
h. Explanation on “Comprehensive evaluation by SAR”
Herein is shown SAR’s independent comprehensive evaluation based on f. and g. above.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

8(1) Amusement Media Gakuin Honkan
Property
Property
OFC-11
Amusement Media Gakuin Honkanno.
nameOverview of specified asset
Beneficiary interest in
Type of specified asset
Trustee
trust
Trust expiration date
September 30, 2028
Security
Planned acquisition
Planned acquisition
2,580 million yen
price
date
Appraisal value
2,660 million yen
Seller
2-84-12 Higashi, Shibuya-ku, Tokyo and other
Location
Indication of residential
address
Nearest station
Type ofLand
ownership
Site area
Building
coverage
ratioType of
Building
ownership
Total floor
area
Constructi
oncompletionProperty managementcompany
Status of leasing

Type

OfficeSumitomo Mitsui Trust Bank, Limited
Unsecured
September 6, 2018

(Note 1)GK El Toro

2-29-8 Higashi, Shibuya-ku, Tokyo
Approx. 7-minute walk from Ebisu Station on JR Line and Tokyo Metro Hibiya Line
Proprietary ownership433.21m

2

Use district

Quasi-industrial district

Floor area ratio

400%

Use

Office / Retail / Parking

November 2, 1994

Structure and floors

Steel-framed reinforced concrete / Steel-framed
structure / Galvanized steel sheet roofing 1 floor below
ground / 8 floors above ground

Sun Frontier FudousanCo., Ltd.

Master lease company

SAR

60%
Proprietary ownership
1,892.18m

2

2

Total leasable area

1,892.18m

Total leased area

Not disclosed

Occupancy rate

100.0%(Note 2)

Total number of1
tenants
Monthly rent (including(Note 2)
common area
Not disclosed
maintenance fee)
Security and guarantee(Note 2)Not disclosed
deposits

Special notation
Not applicable.
(Note 1) Planned acquisition date may change depending on the change of the payment date of the offering.
(Note 2) The information is undisclosed as consent to disclosure has not been obtained from end tenants.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

9

(unit: yen)
Summary of real estate appraisal report
Property nameAmusement Media Gakuin Honkan

Appraisal value

2,660,000,000

Appraisal firm

Daiwa Real Estate Appraisal Co., Ltd.

Date of value

July 1, 2018

Item
Indicated value by income approach
Indicatedvalue
capitalization methodbydirectDetails

Description, etc.

2,660,000,000

Estimated by emphasizing the indicated value by DCF method and verifying with theindicated value by direct capitalization method.

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

125,788,248(a) Gross potential income

126,868,248(b) Vacancy loss, etc.

1,080,000(2) Operating expenses

21,508,809

Maintenancemanagement fee

and960,000

Utilities expenses

7,212,000

Appraised based on actual data.

Repair expenses

2,125,917

Appraised based on repair expense on ER judged appropriate.

Property management fee

2,385,265

Determined that estimates are reasonable and appraised amount 2.0% equivalent ofrent income, etc.

Tenant leasing cost, etc.

162,000

Property taxes

8,405,000

Insurance premium
Other expenses(3) Net operating(NOI=(1)−(2))

income(4) Financial interests on deposits(5) Capital expenditures
(6)
Net
cash
(NCF=(3)+(4)−(5))

Indicated value by DCF method

Appraised based on actual data.
Appraised based on estimates judged appropriate.

137,000

Appraised based on actual data.

104,279,439
739,688

Appraised investment return as 1.0%.
Appraised based on renewal expense on ER judged appropriate.

100,533,044
3.7%

Appraised based on comparison with past deals for similar real estate as the standard
method.

2,640,000,000

Discount rate

3.5%

Terminal capitalization rate

3.9%

Indicated value by cost approachAppraised based on the tenant leasing cost, etc. of similar real estate.

121,627

4,486,083
flow(7) Capitalization rate

Appraised based on a combination of the method of comparing with past deals for
similar real estate and the method of reflecting the characteristics of the real estate to
the capitalization rate of the financial asset.
Appraised based on capitalization rate and comprehensively taking into account theuncertainty of the market.

1,530,000,000

Ratio of land

85.9%

Ratio of building

14.1%

Matters considered in reconciliation of indicated values anddetermination of appraisal value

Note:

Appraised based on current contract amount judged appropriate.

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

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

10

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property information
An office building, approx. 7-minute walk from Ebisu Station on the JR Yamanote, Saikyo and Shonan Shinjuku
Lines and the Tokyo Metro Hibiya Line
Located in high-quality business and residential environment consisting of quiet residential area and small
storesPillar- and column-free space, and an open atmosphere with a ceiling height on the standard floor of 2,700 mm.
(2) Acquisition highlight
The property, which is owned by the Sponsor Group through an acquisition executed in a form of anegotiated transaction using the wide range of business relations, will be acquired by utilizing the Sponsor
support <Sponsor fund>
Demographic analysis etc., market analysis and independent analysis by the Asset Manager(1) Demographic analysis, etc.
Shibuya-ku, Tokyo keeps trend of growing in population and the number of households. The Asset Manager
believes that the area will keep growing steadily in population from now on too.
Although there was a temporary decrease in terms of the number of offices and the number of employees in 2012,both figures showed a recovery in 2014 and kept the same level in 2016.
<Shibuya-ku, Tokyo – Population / Households >*Note:*Source:

Note:

Figures from 2009 to 2013 are as of the each fiscal period (March 31) and figures from 2014 to 2018
are as of January 1 for each year
Prepared by the Asset Manager based on “Counts of Population, Vital Events and Households
derived from the Basic Resident Registration,” Statistics Bureau, Ministry of Internal Affairs andCommunications

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

11

<Shibuya-ku, Tokyo – Business establishments / Employees >*Source:

Prepared by the Asset Manager based on “2009 Economic Census for Business Frame”, “2012
Economic Census for Business Frame”, “2014 Economic Census for Business Frame” and “2016
Economic Census for Business Frame”, Statistics Bureau, Ministry of Internal Affairs andCommunications, Ministry of Economy, Trade and Industry(2) Market analysis
Overall rent has been rising since the second half of 2015 and kept shifting stable, as shown in the figure below oftransition of rent index.
Also as shown in the figure below of transition of vacancy rate, it has shown a declining trend, approx. 3% or below,
since the first half of 2013. The Asset Manager believes that such stable demands for office space will bemaintained in the area.
<Shibuya-ku, Tokyo – Average Rent Index / Vacancy Rate >*Source:*Note:

Note:

Made by Japan Real Estate Institute based on the data disclosed by J-REIT (Offices in Shibuya-ku,
Tokyo, aged from 21 years to less than 30 years, with total floor area from 1,500 tsubo to less than
5,000 tsubo (excluding properties traded during the period above)).
1H refers to the first half (January to June) and 2H refers to the second half (July to December).

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

12(3) Independent analysis by the Asset Manager
Number of Daily Average Passengers using Ebisu Station on the JR Line has been constantly increasing since thefiscal year 2012, and the Asset Manager believes that this trend will continue.
< Number of Daily Average Passengers of Ebisu Station >*Source:

Prepared by the Asset Manager based on “Number of Passengers by Station,” JR East

Moreover, Ebisu ranked as the No. 1 residential area in the “Questionnaire Which City You Want to Live(metropolitan area version) 2017.”*Source:“Questionnaire Which City You Want to Live (metropolitan area version) 2017”“Mansion Trend Research” by Major 7.
The questionnaire (Top 3) made to internet members of companies participating Major 7 (Sumitomo
Realty & Development Co., Ltd., DAIKYO INCORPORATED, TOKYU LAND CORPORATION, Tokyo
Tatemono Co., Ltd., Nomura Real Estate Development Co., Ltd., Mitsui Fudosan Residential Co., Ltd.
and Mitsubishi Jisho Residence Co., Ltd.). Ranking was made counting No. 1 as three points, No. 2 as
two points and No. 3 as one point.

Comprehensive evaluation by SAR: Evaluation on income stability and growth
For the following reasons, SAR believes the property can gain stable revenue over the medium to long-term and canalso expect income growth from increased rent, etc. into the future.
(1) Expected to gain stable revenue as a professional school occupies an entire building over the long term(2) Very attractive area for companies as Ebisu area has a high concentration of companies, in particular such as
foreign companies, IT-related companies, and creative companies such as advertisement and content industries(3) Further development of the area is expected considering that it not only has characteristics of an office area, butalso has characteristics of residential and tourism areas such as Ebisu Garden Place
Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

13(2) Higashi-Kobe Center Building
Property
Property
OFC-12
no.
nameOverview of specified asset

Higashi-Kobe Center Building

Type of specified asset

Beneficiary interest in trust Trustee

Trust expiration date
Planned acquisition
priceAppraisal value

September 30, 2028

Type

OfficeSumitomo Mitsui Trust Bank, Limited

Security
Unsecured
Planned acquisition(Note 1)7,440 million yen
September 6, 2018
date
SA Harbor Bridge Fund GK
7,470 million yen
Seller
8-21 Motoyamaminami-cho, Higashinada-ku, Kobe-shi, Hyogo and other

Location
Indication of residential
8-6-26 Motoyamaminami-cho, Higashinada-ku, Kobe-shi, Hyogo
address
Approx. 9-minute walk from Settsu Motoyama Station on JR Tokaido Main Line
Nearest station
Land

Type of
Proprietary ownershipownership
Site area

Building
coverage
ratioType of
Building
ownership
Total floor
area
Constructi
oncompletionProperty managementcompany
Status of leasing

Use district

Category 2 residential district / Neighborhoodcommercial district

Floor area ratio

300%

25,740.46㎡

Use

Office / Retail / Garage

January 6, 1992

Structure and floors

Steel-framed / Steel-framed reinforced concrete
structure 14 floors above ground

CBRE Inc.

Master lease company

SAR

8,488.11㎡(Note 2)(Note 3)

60%
Proprietary ownership

Total leasable area

16,931.82㎡

Total leased area

16,219.54㎡

Occupancy rate

95.8%

Total number of46
tenants
Monthly rent (includingcommon area
41,935 thousand yen
maintenance fee)
Security and guarantee
248,943,342 yen
deposits

Special notation
The floor area ratio and other certain requirements for this building have been relaxed as permitted under the comprehensive design
system in accordance with Article 59-2 of the Building Standards Act because this building has a public open space. Part of the public
open space has been being leased from a third party since 1964 under the relevant lease agreement as renewed or revised. However,the leasehold has not been registered and there is no registered building on the leased land, which means that the leasehold has notbeen perfected against third parties. Therefore, there is a possibility that if the leased land is sold or otherwise its ownership istransferred to a third party, the lessee of the land (Trustee) may not be able to assert its leasehold against the purchaser or transferee,or that the landowner may refuse to accept renewal of the lease agreement without any due reasons. In such case, the relaxation of
the floor area ratio and other requirements for this building may not be permitted. Please note, however, that the lease agreement
provides that the landowner must obtain the consent of the lessee if it intends to sell or transfer the leased land to a third party andthat the lessee may purchase the leased land in priority to other persons.
Some issues about the building, equipment, etc. of this property pointed out in the building inspection report and the regularinspection report on the building’s equipment have not been yet fixed as of today. The seller has agreed that it will fix such issues at
its own expense and on its own responsibility by the end of December, 2018.
(Note 1) Planned acquisition date may change depending on the change of the payment date of the offering.
(Note 2) 794.18㎡ of Site area are rented from the third party.
(Note 3) Including the set-back area of 3.69㎡.

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

14

(unit: yen)
Summary of real estate appraisal report
Property name

Higashi-Kobe Center Building

Appraisal value

7,470,000,000

Appraisal firm

The Tanizawa Sogo Appraisal Co., Ltd.

Date of value

July 1, 2018

Item
Indicated value by income approach
Indicatedvalue
capitalization methodbydirectDetails

Description, etc.

7,470,000,000

Estimated by using the indicated value by DCF method as standard and verifying with theindicated value by direct capitalization method.

7,620,000,000

Appraised by deducting the estimated leasehold renewal fee of 16,500 thousand yen.

(1) Operating revenue ((a)−(b))

739,345,400(a) Gross potential income

781,682,349(b) Vacancy loss, etc.

42,336,949(2) Operating expenses

308,739,731

Maintenancemanagement fee

and44,700,005

Appraised based on contract estimates, etc.

Utilities expenses

130,036,378

Appraised based on actual data.

Repair expenses

21,275,000

Appraised based on the ER and similar cases.

Property management fee

7,105,511

Appraised based on PM contract estimates.

Tenant leasing cost, etc.

4,673,723

Appraised by estimating the annual tenant turnover.

Property taxes

58,365,300

Appraised by reference to actual data.

Insurance premium

2,553,000

Appraised based on standard rate.

Other expenses

40,030,814

Appraised based on actual data (rent, parking, etc.).

(3) Net operating(NOI=(1)−(2))

income430,605,669(4) Financial interests on deposits

2,626,261

Appraised investment return as 1.0%.

(5) Capital expenditures

51,060,000

Appraised based on the ER and similar cases.

(6)
Net
cash
(NCF=(3)+(4)−(5))flow(7) Capitalization rate
Indicated value by DCF method
Discount rate
Terminal capitalization rate
Indicated value by cost approach

382,171,930
5.0%

Appraised by comparing with cap rate of similar real estate.

7,400,000,000
5.1%

Appraised by taking into account individual risk and calculating the base cap rate of officebuildings based on cap rate of financial instruments.

5.2%

Appraised based on the capitalization rate and reflecting uncertainty of future prediction.

7,480,000,000

Ratio of land

64.5%

Ratio of building

35.5%

Matters considered in reconciliation of indicated values anddetermination of appraisal value

Note:

Appraised by taking into account the average cycle period as an office building.

Estimated by making depreciation adjustment to replacement cost.

Determined by using the indicated value by income approach as standard and by
verifying with the indicated value by cost approach.

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

15

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property information
A multi-tenant office building, located in the convenient place where runs through the Hankyu Dentetsu Line,the JR Tokaido Main Line and the Hanshin Electric Railway, approx. 9-minute walk from Settsu Motoyama
Station on the JR Tokaido Main Line2
The standard office floor area is 1,042.44m . Units can be divided based on tenant needs (existing tenants rent22
rooms of 57.42m - 1,387.82m )The property has highly diversified tenants of 46 with the maximum exposure to a single tenant of only
2
2
approximately 8.2% (1,387.82m ) out of the total leasable area (16,931.82m ), and is expected to generate
stable revenue based on its occupancy rate of 95.8%
The property has competitive specs such as 8 elevators, ceiling height of 2,500mm, individual air conditioning,
OA floors, etc. and can satisfy demand from tenants in various industries, allowing for high tenant retention
The building is in the same region as Ashiya, Nishinomiya, Okamoto, and other such luxury housing areas, andhouses community-based tenants (mobile phone shops, photo studios, etc.) who emphasize easy access toresidential areas(2) Acquisition highlight
The property will be acquired through a negotiated transaction by acquiring an individual property via aunique network of the Asset Manager <external acquisition > <negotiated transaction>
Demographic analysis etc., market analysis and independent analysis by the Asset Manager(1) Demographic analysis, etc.
The population remains largely flat and the number of households keeps growing in Kobe-shi, Hyogo. Therefore,
the Asset Manager believes that the population and the number of households in the area will keep steadily
growing in the future.
There was decrease in terms of the number of offices in 2012, but figure showed a recovery in 2014. There wastemporary decrease in 2016 again in terms of the number of offices. The number of employees remains almost thesame.
<Kobe-shi, Hyogo – Population / Households>*Note:*Source:

Note:

Figures from 2009 to 2013 are as of the each fiscal period (March 31) and figures from 2014 to 2018
are as of January 1 for each year
Prepared by the Asset Manager based on “Counts of Population, Vital Events and Households
derived from the Basic Resident Registration,” Statistics Bureau, Ministry of Internal Affairs andCommunications

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

16

<Kobe-shi, Hyogo – Business Establishments / Employees>*Source:

Prepared by the Asset Manager based on “2009 Economic Census for Business Frame”, “2012
Economic Census for Business Frame”, “2014 Economic Census for Business Frame” and “2016
Economic Census for Business Frame”, Statistics Bureau, Ministry of Internal Affairs andCommunications, Ministry of Economy, Trade and Industry(2) Market analysis
Overall rent has kept hovering at around the same level since the first half of 2013, as shown in the figure below oftransition of rent index.
As shown in the chart below, although vacancy rate increased to the first half of 2015, it decreased to approx. 1.0%
to the second half of 2016, and then again increased in 2017. However, the Asset Manager believes that it willremain flat or show a recovery given the historical trends in the area.
<Kobe-shi, Hyogo – Average Rent Index / Vacancy Rate >*Source:*Note:

Made by Japan Real Estate Institute based on the data disclosed by J-REIT (All offices in Kobe-shi,
Hyogo, (excluding properties traded during the period above)).
1H refers to the first half (January to June) and 2H refers to the second half (July to December).

(3) Independent analysis by the Asset Manager
The property has good access to metropolitan areas such as Osaka and Kobe. It also provides easy access from theresidential area, offering convenience for commuting, and therefore there is a high appeal to companies.
Also as shown in the chart below, the property has highly diversified tenants with the maximum exposure to a2
2
single tenant of only approximately 8.2% (1,387.82m ) out of the total leasable area (16,931.82m ). The AssetManager believes the property could be stably operated for those reasons above.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

17

< Higashi-Kobe Center Building – Tenant diversification ratio>*Source:

Prepared by the Asset Manager based on lease contracts effective as of the end of May 2018

Comprehensive evaluation by SAR: Evaluation on income stability and growth
For the following reasons, SAR believes the property can gain stable revenue over the medium to long-term and canalso expect income growth from increased rent, etc. into the future.
(1) Provides convenient access to office and commercial areas since the building is centrally located between Osakaand Kobe, with an 11-minute boarding to Sannomiya Station and 17-minute boarding to Osaka Station from Settsu
Motoyama on the JR Tokaido Main Line, the closest station to the property(2) The property has specifications satisfying a wide range of tenant needs and is competitive amongst properties inthe surrounding area
(3) There is parking space for 180 cars on the premises and for 112 cars off the premises, which is very appealing to awide range of retail tenants, particularly stores seeking their customers to visit their shop and tenants which
conduct brand area marketing

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

18

(3) GLANSIT AKIHABARA
Property
Property
HTL-06
GLANSIT AKIHABARA
no.
name
Overview of specified asset
Beneficiary interest in
Type of specified asset
Trustee
trust
Trust expiration date
September 30, 2028
Security
Planned acquisition
Planned acquisition
2,500 million yen
price
date
Appraisal value
2,520 million yen
Seller
4-41-16 Sotokanda, Chiyoda-ku, Tokyo and other
Location
Indication of residential
address
Nearest station
Type ofLand
ownership
Site area
Building
coverage
ratioType of
Building
ownership
Total floor
area
Constructi
oncompletionProperty managementcompany
Status of leasing

Type

Hotel

Mizuho Trust & Banking Co., Ltd.
Unsecured
September 6, 2018

(Note 1)

GK Lightning

4-4-6 Sotokanda, Chiyoda-ku, Tokyo
Approx. 4-minute walk from Akihabara Station on JR Yamanote Line and Tokyo Metro Hibiya Line
Proprietary ownership
167.74m

2 (Note 2)

Use district

Commercial district

Floor area ratio

700%

Use

Hotel

September 20, 2017

Structure and floors

Steel-framed / Steel-framed reinforced concrete
structure, 1 floor below ground / 10 floors above ground

Marimo Co., Ltd.

Master lease company SAR

80%
Proprietary ownership
1,081.97m

2

2

Total leasable area

1,089.06m

Total leased area

Not disclosed

Occupancy rate

100.0%(Note 3)

Total number of1
tenants
Monthly rent (including(Note 3) (Note 4)common area
Not disclosed
maintenance fee)
Security and guarantee(Note 3)Not disclosed
deposits

Special notation
Not applicable.
(Note 1) Planned acquisition date may change depending on the change of the payment date of the offering.
(Note 2) Including the set-back area of 8.67㎡.
(Note 3) The information is undisclosed as consent to disclosure has not been obtained from end tenants.
(Note 4) The rent is comprised of fixed rent.

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

19

(unit: yen)
Summary of real estate appraisal report
Property name

GLANSIT AKIHABARA

Appraisal value

2,520,000,000

Appraisal firm

The Tanizawa Sogo Appraisal Co., Ltd.

Date of value

July 1, 2018

Item
Indicated value by income approach
Indicatedvalue
capitalization methodbydirectDetails

Description, etc.

2,520,000,000

Estimated by using the indicated value by DCF method as standard and verifying with theindicated value by direct capitalization method.

2,580,000,000(1) Operating revenue ((a)−(b))

106,738,560(a) Gross potential income

106,738,560(b) Vacancy loss, etc.

0(2) Operating expenses

8,799,564

Maintenancemanagement fee

and0

Unrecorded as tenant owes.

Utilities expenses

0

Unrecorded as tenant owes.

Repair expenses

320,000

Property management fee
Tenant leasing cost, etc.

2,134,771
0Property taxes

5,587,100

Appraised based on the ER and similar cases.
Appraised based on verbal confirmation from client.
Unrecorded by taking into account contract, etc.
Appraised by reference to actual data.

Insurance premium

224,000

Appraised by reference to the level of similar real estate.

Other expenses

533,693

Appraised based on actual data.

(3) Net operating(NOI=(1)−(2))

income97,938,996(4) Financial interests on deposits

711,590

Appraised investment return as 1.0%.

(5) Capital expenditures

800,000

Appraised based on the ER and similar cases.

(6)
Net
cash
(NCF=(3)+(4)−(5))flow(7) Capitalization rate
Indicated value by DCF method
Discount rate
Terminal capitalization rate
Indicated value by cost approach

97,850,586
3.8%

Appraised by comparing with cap rate of similar real estate.

2,490,000,000
3.7%

Appraised by taking into account individual risk and calculating the base cap rate of
hotels based on cap rate of financial instruments.

4.0%

Appraised based on the capitalization rate and reflecting uncertainty of future prediction.

2,510,000,000

Ratio of land

84.9%

Ratio of building

15.1%

Matters considered in reconciliation of indicated values anddetermination of appraisal value

Note:

Unrecorded by taking into account contract, etc.

Estimated by making depreciation adjustment to replacement cost.

Determined by using the indicated value by income approach as standard and by
verifying with the indicated value by cost approach.

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

20

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property information
A capsule hotel, approx. 4-minute walk from Akihabara Station on the JR Yamanote, Keihin-Tohoku and Sobu
Lines and approx. 2-minute walk from Suehirocho Station on the Tokyo Metro Ginza LineThe Akihabara area is famous nationwide as an electronics district and subcultural broadcasting point, andhaving good transportation convenience with the access to three JR lines and Tokyo Metro Ginza Line
Provides three types of rooms: private room, private twin room, and standard type room and has a large bigbath, appealing to various customers(2) Acquisition highlight
The property, which is owned by the Sponsor Group through an acquisition executed in a form of anegotiated transaction using the wide range of business relations, will be acquired by utilizing the Sponsor
support <Sponsor fund>Market analysis and independent analysis by the Asset Manager(1) Market analysis
Average Daily Rate (ADR) and indices of occupancy rate in 5 central wards of Tokyo (Chiyoda-ku, Chuo-ku,
Minato-ku, Shinjuku-ku and Shibuya-ku; the same shall apply hereinafter) increased in 2017 to approx. 123 andapprox. 104, respectively, assuming the figure in 2012 is 100, as shown in the chart below. Therefore, the hotel
demand in 5 central wards of Tokyo is expected to continue steady growth.
<5 central wards of Tokyo - ADR / Occupancy rate>*Source: Japan Hotel Appraisal Co., Ltd.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

21

(2) Independent analysis by the Asset Manager
As to the inbound demand, as shown in the chart below, the number of foreign visitors to Japan has been rapidly
increasing in recent years, and exceeded 28 million in 2017. The foreign visitors from Asia for sightseeing in Tokyoaccount for a large proportion of all guests stayed in the property owing to good access to major sightseeing spots
in Tokyo. This trend is expected to continue.
Furthermore, the number of domestic visitors to Tokyo has been also increasing, exceeding 500 million each year
since 2013, and the demand for domestic visitors to Tokyo is also robust as shown in the chart below.
<Number of inbound visitors and domestic visitors to Tokyo, and number of inbound visitors to Japan>*Source:

Prepared by the Asset Manager based on “Inbound travelers to Japan and Tokyo and domestic
travelers to Tokyo,” Bureau of Industrial and Labor Affairs, Tokyo Metropolitan Government

As shown in the chart below, the Akihabara area is ranked fifth among the sightseeing spots in Tokyo in terms ofthe number of foreign visitors, showing its popularity as an electronics quarter and subcultural broadcasting point,
and the Asset Manager believes that the demand for accommodation in the area will remain strong in the future.
<Top 10 popular destination among inbound visitors>*Note:FY2015 and FY2016 use the data from April of each year to March of the next year of each. FY2017
uses the data from January 1 to December 31 of the year. The sum of each year could be more than
100% due to the allowance of multiple answers*Source: Prepared by the Asset Manager based on “Survey report on behavioral characteristics ofinbound travelers by country,” Tokyo Metropolitan Government

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

22

<Major sightseeing spots and business / commercial district around GLANSIT AKIHABARA>

The property has a good access to sightseeing spots such as Ginza, Asakusa and Ryogoku-Kokugikan, commercial
district and business district such as Otemachi. In addition, Ginza and Asakusa are included in the “Top 10 popular
destination among inbound visitors” above.

Comprehensive evaluation by SAR: Evaluation on income stability
For the following reasons, SAR believes the property can gain stable revenue over the medium to long-term(1) A capsule hotel located in Akihabara, one of the most major sightseeing areas in Tokyo(2) High appeal to the both leisure and business travelers due to its location on a busy area as well as its good traffic
convenience(3) Strong appeal to a variety of guests with three types of rooms(4) Completed relatively recently in September 2017 and expected to lower repair costs

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

23

(4) Best Western Tokyo Nishikasai Grande
Property
Property
HTL-07
Best Western Tokyo Nishikasai Grandeno.
nameOverview of specified asset
Beneficiary interest in
Type of specified asset
Trustee
trust
Trust expiration date
September 30, 2028
Security
Planned acquisition
Planned acquisition
3,180 million yen
price
date
Appraisal value
3,200 million yen
SellerLocation
Indication of residential
address
Nearest station
Type ofLand
ownership
Site area
Building
coverage
ratioType of
Building
ownership
Total floor
area
Constructi
oncompletionProperty managementcompany
Status of leasing

6-19-27 Nishikasai, Edogawa-ku, Tokyo and otherTotal leasable area

2,755.19m

2

Total leased area

2,755.19m

2

Occupancy rate

100.0%

Type

Hotel

Sumitomo Mitsui Trust Bank, Limited
Unsecured
September 6, 2018

(Note 1)

GK Byte

6-19-18 Nishikasai, Edogawa-ku, Tokyo
Approx. 5-minute walk from Nishikasai Station on Tokyo Metro Tozai Line
Proprietary ownership
657.00m

2

80%

Use district

Neighborhood commercial district

Floor area ratio

400%

Use

Hotel

Structure and floors

Steel-framed structure 8 floors above ground

Proprietary ownership
2,755.19m

2

February 7, 2017

Shimizu Comprehensive
Master lease company SAR
Development Corporation
Total number of1
tenants
Monthly rent (including(Note 2)
common area
11,667 thousand yen
maintenance fee)
Security and guarantee
116,670,000 yen
deposits

Special notation
Not applicable.
(Note 1) Planned acquisition date may change depending on the change of the payment date of the offering.
(Note 2) Rents are comprised of fixed rents and variable rents.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

24

(unit: yen)
Summary of real estate appraisal report
Property nameBest Western Tokyo Nishikasai GrandeAppraisal value

3,200,000,000

Appraisal firm

The Tanizawa Sogo Appraisal Co., Ltd.

Date of value

July 1, 2018

Item
Indicated value by income approach
Indicatedvalue
capitalization methodbydirectDetails

Description, etc.

3,200,000,000

Estimated by using the indicated value by DCF method as standard and verifying with
the indicated value by direct capitalization method.

3,220,000,000(1) Operating revenue ((a)−(b))

140,004,000(a) Gross potential income

140,004,000(b) Vacancy loss, etc.

0(2) Operating expenses

14,291,124

Maintenancemanagement fee

and540,000

Utilities expenses

0

Repair expenses

740,000

Property management fee
Tenant leasing cost, etc.

1,440,0000Property taxes

10,213,100

Insurance premium
Other expenses(3) Net operating(NOI=(1)−(2))

incomeBased on the agreement.
Unrecorded as tenant owes.
Appraised based on the ER and similar cases.
Appraised based on verbal confirmation from client.
Unrecorded by taking into account contract, etc.
Appraised by reference to actual data.

518,000

Appraised by reference to the level of similar real estate.

840,024

Appraised based on actual data.

125,712,876(4) Financial interests on deposits

1,166,700

Appraised investment return as 1.0%.

(5) Capital expenditures

1,110,000

Appraised based on the ER and similar cases.

(6)
Net
cash
(NCF=(3)+(4)−(5))flow(7) Capitalization rate
Indicated value by DCF method

125,769,576
3.9%

Appraised by comparing with cap rate of similar real estate.

3,190,000,000

Discount rate

3.8%

Terminal capitalization rate

4.1%

Indicated value by cost approach

3,200,000,000

Ratio of land

73.0%

Ratio of building

27.0%

Matters considered in reconciliation of indicated values anddetermination of appraisal value

Note:

Unrecorded by taking into account contract, etc.

Appraised by taking into account individual risk and calculating the base cap rate of
hotels based on cap rate of financial instruments.
Appraised based on the capitalization rate and reflecting uncertainty of future
prediction.
Estimated by making depreciation adjustment to replacement cost.

Determined by using the indicated value by income approach as standard and by
verifying with the indicated value by cost approach.

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

25

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property information- A business hotel, approx. 5-minute walk from Nishikasai Station on the Tokyo Metro Tozai Line
A hotel with great appeal to a variety of guests with three types of guest rooms depending on the intended use
with seven single bedrooms, seven double bedrooms and 91 twin bedrooms, as well as restaurant on the firstfloor
Has a flexibility to complement the customer base with the neighboring hotel owned by SAR, “BEST WESTERNTokyo Nishikasai,” as the same tenant operates the both hotels(2) Acquisition highlight
The property, which is owned by the Sponsor Group through an acquisition executed in a form of anegotiated transaction using the wide range of business relations, will be acquired by utilizing the Sponsor
support <Sponsor fund>Market analysis and independent analysis by the Asset Manager(1) Market analysis
ADR and indices of occupancy rate in 18 of 23 wards of Tokyo, excluding 5 central wards of Tokyo (namely,
Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku from 23 wards of Tokyo), increased in 2017 toapprox. 123 and approx. 101, respectively, assuming the figure in 2012 is 100, as shown in the chart below.
Therefore, the hotel demand in 18 wards of Tokyo is expected to continue steady growth.
<Ex. 5 central wards of Tokyo - ADR / Occupancy rate>*Source:

Japan Hotel Appraisal Co., Ltd.

(2) Independent analysis by the Asset Manager
Characterized by the location in the Nishikasai area, this hotel is expected to attract both business travelers andleisure travelers as it has a good access to major business areas and sightseeing spots in Tokyo.
As to business trip accommodations, it is also expected that the hotel will attract demand of business travelers in abalanced manner not only who are visiting companies located along the Tozai Line, but also who are visiting
companies located in the proximity of Kyobashi or Nihonbashi and IT-related companies located in Toyosu, as the
Tozai Line is the hotel’s main railway transportation.
As to leisure trip accommodations, the hotel guests are dominated by visitors to TDR. As shown in the chart below,
the annual admission at TDR has constantly exceeded 30 million since 2014 and TDR is planning to introduce new
products to achieve the highest number of visitors in 2020, so the demand related to TDR is expected to remain
solid. Furthermore, the property has complimentary bus service to TDR. That will be the key catalyst to efficiently
attract various types of visitors to TDR.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

26

<TDR theme park attendance (thousands of people)>*Source: Prepared by the Asset Manager based on the “Theme Park Data” in the “FACT BOOK 2018,”
Oriental Land Co., Ltd.
<TDR major new products>*Source: Prepared by the Asset Manager based on the “2020 Medium-Term Plan,” Oriental Land Co., Ltd. as ofApril 27, 2017
The inbound demand and the demand for domestic visitors to Japan are the same as GLANSIT AKIHABARA.
Additionally, MICE (Meeting, Incentive, Convention & Exhibition) demands will be another catalyst to attract
visitors joining events held at large facilities including Tokyo Big Sight, Tokyo International Forum and Tokyo Tatsumi
International Swimming Center. All in all, the Asset Manager believes that the hotel is expected to meet various
demands for accommodation in an efficient manner.
Comprehensive evaluation by SAR: Evaluation on income stability and growth
For the following reasons, SAR believes the property can gain stable revenue over the medium to long-term and canalso expect income growth from increased rent, etc. into the future.
(1) Located in a 5-minute walk from the Nishikasai station on the Tozai Line, capable of attracting diversified demands
for accommodation including demand of business travelers related to companies located along the Tozai line,
leisure travelers visiting TDR and other sightseeing spots, inbound tourists mainly from Asia, as well as MICE
demands related to various events held in Tokyo(2) Strong appeal to the both business and leisure guests with various types of rooms(3) Completed relatively recently in February 2017 and expected to lower repair costs
Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

27

(5) Hotel WBF Art Stay Namba
Property
Property
HTL-08
Hotel WBF Art Stay Nambano.
nameOverview of specified asset
Beneficiary interest in
Type of specified asset
Trustee
trust
Trust expiration date
September 30, 2028
Security
Planned acquisition
Planned acquisition
2,000 million yen
price
date
Appraisal value
2,030 million yen
Seller
5-2-3 Nipponbashi, Naniwa-ku, Osaka-shi, Osaka
Location
Indication of residential
address
Nearest station
Type ofLand
ownership
Site area
Building
coverage
ratioType of
Building
ownership
Total floor
area
Constructi
oncompletionProperty managementcompany
Status of leasing

Type

Hotel

Mitsubishi UFJ Trust and Banking Corporation
Unsecured
September 6, 2018

(Note 1)GK Topcat

5-8-25 Nipponbashi, Naniwa-ku, Osaka-shi, Osaka
Approx. 2-minute walk from Ebisucho Station on Osaka Metro Sakaisuji Line
Proprietary ownership
335.31m

2

Use district

Commercial district

Floor area ratio

600%

Use

Hotel

April 7, 2017

Structure and floors

Steel-framed reinforced concrete structure 9 floor above
groundBEST PROPERTYCORPORATION

Master lease company －80%
Proprietary ownership
2,061.38m

2

2

Total leasable area

2,061.46m

Total leased area

Not disclosed

Occupancy rate

100.0%(Note 2)

Total number of tenants 1
Monthly rent (including(Note 2) (Note 3)
common area
Not disclosed
maintenance fee)
Security and guarantee(Note 2)Not disclosed
deposits

Special notation
Not applicable.
(Note 1) Planned acquisition date may change depending on the change of the payment date of the offering.
(Note 2) The information is undisclosed as consent to disclosure has not been obtained from end tenants.
(Note 3) Rents are comprised of fixed rents and variable rents.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

28

(unit: yen)
Summary of real estate appraisal report
Property name

Hotel WBF Art Stay Namba

Appraisal value

2,030,000,000

Appraisal firm

Daiwa Real Estate Appraisal Co., Ltd.

Date of value

July 1, 2018

Item
Indicated value by income approach
Indicatedvalue
capitalization methodbydirectDetails

Description, etc.

2,030,000,000

Estimated by emphasizing the indicated value by DCF method and verifying with theindicated value by direct capitalization method.

2,050,000,000(1) Operating revenue ((a)−(b))

100,747,512(a) Gross potential income

100,747,512(b) Vacancy loss, etc.

0(2) Operating expenses

9,257,731

Maintenancemanagement fee

and0

Unrecorded as tenant owes.

Utilities expenses

0

Unrecorded as tenant owes.

Repair expenses

652,200

Property management fee
Tenant leasing cost, etc.

1,800,0000Property taxes

6,315,300

Appraised based on estimates.
Unrecorded as tenant is expected to stay long term.
Appraised based on actual data.

Insurance premium

116,077

Appraised based on estimates judged appropriate.

Other expenses

374,154

Appraised based on actual data.

(3) Net operating(NOI=(1)−(2))

income(4) Financial interests on deposits(5) Capital expenditures
(6)
Net
cash
(NCF=(3)+(4)−(5))

91,489,781
485,000
1,557,020

flow(7) Capitalization rate
Indicated value by DCF method

Appraised investment return as 1.0%.
Appraised by reference to renewal expense of similar real estate.

90,417,761
4.4%

Appraised based on comparison with past deals for similar real estate as the standard
method.

2,020,000,000

Discount rate

4.2%

Terminal capitalization rate

4.6%

Indicated value by cost approachAppraised based on a combination of the method of comparing with past deals for
similar real estate and the method of reflecting the characteristics of the real estate to
the capitalization rate of the financial asset.
Appraised based on capitalization rate and comprehensively taking into account theuncertainty of the market.

1,720,000,000

Ratio of land

65.0%

Ratio of building

35.0%

Matters considered in reconciliation of indicated values anddetermination of appraisal value

Note:

Appraised by reference to repair expenses of similar real estate.

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

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

29

Property information and acquisition highlight based on the survey by the Asset Manager(1) Property information
A business hotel, approx. 2-minute walk from Ebisucho Station on the Osaka Metro Sakaisuji Line
Strong appeal to a variety of guests with total 100 of “artistic-taste” rooms, as well as restaurant on the firstfloor(2) Acquisition highlight
The property, which is owned by the Sponsor Group through an acquisition executed in a form of anegotiated transaction using the wide range of business relations, will be acquired by utilizing the Sponsor
support <Sponsor fund>Market analysis and independent analysis by the Asset Manager(1) Market analysis
ADR and indices of occupancy rate in Osaka increased in 2017 to approx. 160 and approx. 112, respectively,
assuming the figure in 2012 is 100, as shown in the chart below. Therefore, the hotel demand in Osaka is expected
to continue steady growth.
<Osaka-shi - ADR / Occupancy rate>*Source: Japan Hotel Appraisal Co., Ltd.
(2) Independent analysis by the Asset Manager
The number of aircraft departures to and arrivals at Kansai International Airport reached a record high in the fiscal
year 2017 since the opening, as the number of foreign visitors using the Airport has continued to increase inrecent years due to flights between many Asian countries and a significant increase in LCCs.
In addition to such high inbound demand, the hotel is located near Namba, one of Osaka’s leading commercial
areas. Therefore, the Asset Manager believes that the hotel will maintain high ADR and occupancy rate.
<Usage of Kansai International Airport>*Note:
Rounded to the nearest decimal place*Source: Prepared by the Asset Manager based on disclosures by Kansai Airports
Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

30

Comprehensive evaluation by SAR: Evaluation on income stability
For the following reasons, SAR believes the property can gain stable revenue over the medium to long-term.
(1) Located in the Namba area, one of Osaka’s leading commercial areas(2) A good access to the both business and tourism area enables to accommodate significant business- andtourism-based demand(3) Due to the impact of strong in-bound demand in Osaka, further hotel demand is expected(4) Completed relatively recently in April 2017 and expected to lower repair costs

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

31

4. Description of Assets to be Transferred(1) Urban Park Shin-Yokohama
Property
Property
RSC-04
Urban Park Shin-Yokohamano.
nameOverview of specified asset
Beneficiary interest in
Type of specified asset
Trustee
trust
Trust expiration date
April 30, 2026
Security
Planned sales priceType

Residence

Mitsubishi UFJ Trust and Banking Corporation
Unsecured

2,775 million yen
Planned transfer date October 11, 2018
2-18-10 Shin-Yokohama, Kohoku-ku Yokohama-shi, Kanagawa and other

Location
Indication of residential
2-18-5 Shin-Yokohama, Kohoku-ku Yokohama-shi, Kanagawa
address
Approx. 9-minute walk from Shin-Yokohama Station on the JR Shinkansen and Yokohama Line, etc.
Nearest station
Type ofLand
Proprietary ownershipownership
2
Site area
862.00m
Use district
Commercial district
Building(Note 1)coverage 80%
Floor area ratio
600%
ratio
Type of
Building
Proprietary ownershipownership
Total floor
25,171.12m
Use
Apartment / Parking / Retailarea
Constructi
on
Steel-framed structure 1 floor below ground / 10 floors
May 30, 2009
Structure and floors
completio
above groundn
Property management
HASEKO LIVENET, Inc.
Master lease company HASEKO LIVENET, Inc.
company
Status of master leasing
Pass-throughTotal number of2
Total leasable area
3,989.11m
68
tenants
Monthly rent (including2
Total leased area
3,825.27m
common area
11,455,000 yen
maintenance fee)
Occupancy rate
January 201899.10%
Security and guarantee deposits

February 2018

March 201897.12%

April 201899.18%

May 2018
97.63%

95.89%

16,137,000 yen

Special notation
SAR is planning to settle the transfer on October 11, 2018, and thus the sales and purchase agreement falls under the forward
commitment, etc. In case where the SAR or the buyer is in breach of any agreement or any representations and warranties provided in
the Trust Beneficiary Interest Sales and Purchase Agreement and such breach is so material that the purpose of the agreement cannot
be achieved, the non-breaching party may cancel the agreement after giving notice to the other party for a reasonable period of time,and may claim against the other party the amount equivalent to 20% of the sales price as a penalty at the same time as the exercise of
the right of cancellation.
(Note 1) Permitted floor area ratio (FAR) of the building is 597% due to the front road width.

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

32

(unit: yen)
Summary of real estate appraisal report
Property nameUrban Park Shin-Yokohama

Appraisal value

2,580,000,000

Appraisal firm

Daiwa Real Estate Appraisal Co., Ltd.

Date of value

January 31, 2018

Item
Indicated value by income approach
Indicatedvalue
capitalization methodbydirectDetails

Description, etc.

2,580,000,000

Estimated by emphasizing the indicated value by DCF method and verifying with theindicated value by direct capitalization method.

2,620,000,000(1) Operating revenue ((a)−(b))

152,716,068(a) Gross potential income

160,523,730(b) Vacancy loss, etc.

7,807,662(2) Operating expenses

31,178,354

Maintenancemanagement fee

6,612,000

Appraised by confirming the actual date is appropriate by verifying the level of similar
real estate.

Utilities expenses

1,592,263

Appraised by reference to the level of similar real estate and historical data.

Repair expenses

3,844,603

Appraised by reference to the level of similar real estate and the engineering report.

Property management fee

2,978,672

Tenant leasing cost, etc.

5,610,823

Property taxes

9,509,100

andRecorded 2.0% of rent revenues etc. based on the current contract by verifying thelevel of similar real estate.
Recorded the rent for two months paid by a new tenant by reference to the tenantleasing cost, etc. of similar real estateAppraised based on actual data.

Insurance premium

230,893

Recorded the actual data by reference to the level of similar real estate.

Other expenses

800,000

Appraised by reference to the level of similar real estate and historical data of
discretionary reserve for maintenance and management fee and other miscellaneous
costs(3) Net operating(NOI=(1)−(2))

income(4) Financial interests on deposits(5) Capital expenditures
(6)
Net
cash
(NCF=(3)+(4)−(5))

121,537,714
136,4213,664,183

flow(7) Capitalization rate
Indicated value by DCF method

Appraised investment return as 1.0%.
Appraised based on the engineering report by reference to the level of similar realestate.

118,009,952
4.5%

Appraised by comprehensively taking into consideration of competitiveness of thesubject real estate.

2,560,000,000

Discount rate

4.3%

Appraised by comprehensively taking into consideration of competitiveness of thesubject real estate.

Terminal capitalization rate

4.7%

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

Indicated value by cost approach

2,490,000,000

Ratio of land

60.9%

Ratio of building

39.1%

Matters considered in reconciliation of indicated values anddetermination of appraisal value

Note:

Recorded by taking into consideration the average vacancy rate in the area, andcompetitiveness of the subject real estate, etc.

Estimated by making depreciation adjustment to replacement cost.

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

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

33

5. Planned Seller and Transferee Profile(1) Planned Seller Profile①Amusement Media Gakuin Honkan
Name
Location
Representative
Main business description

GK El Toro
5-1-4 Toranomon, Minato-ku, Tokyo
Representative partner: Ippanshadanhoujin Shichirigahama
Operational executor: Takaaki Fukunaga
1. Acquisition, ownership and disposition of beneficiary interest in trust of real estate
2. Acquisition, ownership and disposition of loan claims
3. Acquisition, ownership and disposition of corporate bonds, silent partnership interest and othersecurities
4. Sales, leasing, management, acquisition, ownership, disposition and use of real estate
5. All business incidental to the above
100,000 yen
July 27, 2015

CapitalEstablishedNet asset
Total asset
The information is undisclosed as consent to disclosure has not been obtained from the company.
Major shareholders andshareholding ratio
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel 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 the Act on
Investment Trusts and Investment Corporations (Act No.198 of 1951; including its amendments) (the“Investment Trusts Act”), but 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 theacquisition of the assets, the Asset Manager has performed deliberation and approval in accordancewith the voluntary rules.

②Higashi-Kobe Center Building
Name
Location
Representative
Main business description

SA Harbor Bridge Fund GK
c/o TOKYO UNITED GROUP, 2-9-15 Yotsuya, Shinjuku-ku, Tokyo
Representative partner: SA Harbor Holdings Ippanshadanhoujin
Operational executor: Takuya Ikeda
1. Acquisition, ownership, management and disposition of securities and beneficiary interest in trust
2. Acquisition, ownership and disposition of real estate for sale
3. Acquisition, ownership and disposition of loan claims
4. All business incidental to the above
100,000 yen
April 11, 2018

CapitalEstablishedNet asset
Total asset
The information is undisclosed as consent to disclosure has not been obtained from the company.
Major shareholders andshareholding ratio
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel 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 the Investment
Trust Act.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

34

③GLANSIT AKIHABARA
Name
Location
Representative
Main business description

GK Lightning
5-1-4 Toranomon, Minato-ku, Tokyo
Representative partner: Ippanshadanhoujin Koshigoe
Operational executor: Takaaki Fukunaga
1. Acquisition, ownership and disposition of beneficiary interest in trust of real estate
2. Acquisition, ownership and disposition of loan claims
3. Acquisition, ownership and disposition of corporate bonds, silent partnership interest and othersecurities
4. Sales, leasing, management, acquisition, ownership, disposition and use of real estate
5. All business incidental to the above
100,000 yen
October 1, 2015

CapitalEstablishedNet asset
Total asset
The information is undisclosed as consent to disclosure has not been obtained from the company.
Major shareholders andshareholding ratio
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel 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 the Investment
Trusts Act, but 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 conflictof interests regarding its management of SAR’s assets. Upon determination of the acquisition of theassets, the Asset Manager has performed deliberation and approval in accordance with the voluntaryrules.

④Best Western Tokyo Nishikasai Grande
Name
Location
Representative
Main business description

GK Byte
5-1-4 Toranomon, Minato-ku, Tokyo
Representative partner: Ippanshadanhoujin Shinko
Operational executor: Takaaki Fukunaga
1. Acquisition, ownership, and disposition of beneficiary interest in trust of real estate
2. Acquisition, ownership and disposition of loan claims
3. Acquisition, ownership and disposition of corporate bonds, silent partnership interest and othersecurities
4. Sales, leasing, management, acquisition, ownership, disposition and use of real estate
5. All business incidental to the above
100,000 yen
July 27, 2015

CapitalEstablishedNet asset
Total asset
The information is undisclosed as consent to disclosure has not been obtained from the company.
Major shareholders andshareholding ratio
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel 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 the Investment
Trusts Act, but 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 conflictof interests regarding its management of SAR’s assets. Upon determination of the acquisition of theassets, the Asset Manager has performed deliberation and approval in accordance with the voluntaryrules.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

35

⑤Hotel WBF Art Stay Namba
Name
Location
Representative
Main business description

GK Topcat
5-1-4 Toranomon, Minato-ku, Tokyo
Representative partner: Ippanshadanhoujin Sarushima
Operational executor: Takaaki Fukunaga
1. Acquisition, ownership, and disposition of beneficiary interest in trust of real estate
2. Acquisition, ownership and disposition of loan claims
3. Acquisition, ownership and disposition of corporate bonds, silent partnership interest and othersecurities
4. Sales, leasing, management, acquisition, ownership, disposition and use of real estate
5. All business incidental to the above
100,000 yen
October 20, 2015

CapitalEstablishedNet asset
Total asset
The information is undisclosed as consent to disclosure has not been obtained from the company.
Major shareholders andshareholding ratio
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel 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 the Investment
Trusts Act, but 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 ofinterests regarding its management of SAR’s assets. Upon determination of the acquisition of the assets,
the Asset Manager has performed deliberation and approval in accordance with the voluntary rules.

(2) Planned Transferee Profile
Name
Location
Representative
Main business description

Kyushu Railway Company
3-25-21 Hakata-ekimae, Hakata-ku, Fukuoka-shi
Toshihiko Aoyagi, President and Representative Director
1. Passenger railway services
2. Freight railway services
3. Marine transportation services
4. Passenger vehicle transportation business5. Travel agency business6. ~26. Omitted
16 billion yen
April 1, 1987
383,201 million yen (consolidated)
749,573 million yen (consolidated)

CapitalEstablishedNet asset
Total asset
Major shareholders andMorgan Stanley MUFG Securities Co., Ltd. 5.55% (as of March 31, 2018)
shareholding ratio
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel 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 the Investment
Trust Act.
(Note) “Interested parties” are (i) the Interested Parties of the Asset Manager as provided in Article 201, Paragraph 1 of the Investment
Trust Act, (ii) the shareholders and officers of the Asset Manager, (iii) SPCs which execute an investment management agreementwith the shareholders of the Asset Manager, (iv) SPCs a majority of investment of which are made by the Asset Manager and theshareholders of the Asset Manager,(v)Star Asia Management Limited, Star Asia Management Japan Limited, Star Asia AssetManagement LLC, Star Asia Group LLC, Star Asia Asset Advisors Co., Ltd., Star Asia Sogo Kaihatsu Co., Ltd., Malcolm F. MacLean IV,
Taro Masuyama, as well as investment vehicles invested by funds under management of Malcolm F. MacLean IV and Taro
Masuyama (excluding minority investment) which (a) are located in Japan to own or acquire real estates or other investment
assets and (b) own or acquire the investment units of SAR. This applies to any other assets described below.
Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

36

6. Status of Parties Related to the Acquisition of the Property(1) Amusement Media Gakuin Honkan
Company name
Relationship withparties who havespecial interests

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

Previous owner, previous trustee
Other than the one in a relationship of special interest―

Acquisition
background and―reason, etc.
Acquisition price(Note)―
Acquisition period September 30, 2016―
(Note) Omitted as the current owner has owned the property for over one year.

(2) Higashi-Kobe Center Building
The asset has not been acquired from any parties who have special interests in SAR or the Asset Manager.
(3) GLANSIT AKIHABARA
Company name
Relationship withparties who havespecial interests

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

Previous owner, previous trustee
Other than the one in a relationship of special interest―

Acquisition
background and―reason, etc.
Acquisition price
2,112 million yen―
Acquisition period October 30, 2017―
The current owner strategically decided to acquire “GLANSIT AKIHABARA,” before the completion, taking development risks.
Upon acquisition, the Asset Manager conducted due diligence pursuant to its internal rules and considered and verified whether theplanned acquisition price of SAR is appropriate. Given that the planned acquisition price of SAR is below the appraisal value, the AssetManager believes that the planned acquisition price of SAR is appropriate.

(4) Best Western Tokyo Nishikasai GrandeCompany name
Relationship withparties who havespecial interests

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

Previous owner, previous trustee
Other than the one in a relationship of special interest―

Acquisition
background and―reason, etc.
Acquisition price(Note)―
Acquisition period February 28, 2017―
(Note) Omitted as the current owner has owned the property for over one year.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

37

(5) Hotel WBF Art Stay Namba
Company name
Relationship withparties who havespecial interests

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

Previous owner, previous trustee
Other than the one in a relationship of special interest―

Acquisition
background and―reason, etc.
Acquisition price
1,650 million yen―
Acquisition period April 27, 2018―
The current owner strategically decided to acquire “Hotel WBF Art Stay Namba,” newly completed on April 7, 2018, while the occupancy
rate is unknown.
Upon acquisition, the Asset Manager conducted due diligence pursuant to its internal rules and considered and verified whether theplanned acquisition price of SAR is appropriate. Given that the planned acquisition price of SAR is below the appraisal value, the AssetManager believes that the planned acquisition price of SAR is appropriate.

7.

Transaction with interested person, etc.
The Acquisitions are not transactions with interested person, etc., as provided in the Investment Trusts Act, but eachsellers in the asset acquisition other than Higashi-Kobe Center Building 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 AssetManager for preventing conflict of interests regarding its management of SAR’s assets. Upon deciding on the acquisitionof the asset other than Higashi-Kobe Center Building, the Asset Manager has performed deliberation and approval inaccordance with the voluntary rules.
The Transfer is not transactions with interested person, etc., as provided in the Investment Trusts Act.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

38

8. Overview of broker(1) Amusement Media Gakuin Honkan、GLANSIT AKIHABARA、Best Western Tokyo Nishikasai Grande、Hotel WBF Art Stay
Namba1) Overview of broker
Name
Location
Representative
Main business description

Jones Lang LaSalle, Inc.
2-13-10 Nagata-cho, Chiyoda-ku, Tokyo
Toshinobu Kawanishi, President and Representative Director
1. Consultant and research of real estate investment
2. Trading and bartering of real estate
3. ～25. Omitted
Capital
195 million yen
Established
April 23, 1985
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel relationship to report.
Business relationship
There is no business relationship to report.
Related party or no
The company does not 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) Higashi-Kobe Center Building
1) Overview of broker
Name
Location
Representative
Main business description

Tokyu Livable, Inc.
1-9-5 Dogenzaka, Shibuya-ku, Tokyo
Shinji Sakai, President
1. Real Estate brokerage
2. Seller agency
3. Property Sales
Capital1,396.3 million yen
EstablishedMarch 10, 1972
Relationship with SAR or the Asset Manager
Capital relationship
There is no capital relationship to report.
Personnel relationship There is no personnel relationship to report.
Business relationship
There is no business relationship to report.
Related party or no
The company does not 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.

(3) Urban Park Shin-Yokohama
As for name, etc. and breakdown and value of the brokerage commission, since the consent has not beenobtained from the domestic company as the broker, the information is not disclosed.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

39

9.

Schedule for the Transactions(1) Schedule for the Acquisitions
August 21, 2018
September 6, 2018
(Planned Acquisition Date)(2)Schedule for the Transfer
August 21, 2018

October 11, 2018
(Planned Transfer Date)

Acquisition decided
Conclusion of a sale and purchase agreement of beneficiary interest in trust
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 beneficiary interest in trust
Receipt of deposit (277,500,000 yen)Transfer of beneficiary interest in trust (planned)
Receive of transfer price after deduction of deposit (planned)

10. Settlement method
The acquisition prices of the Acquisitions will be settled in lump sum payment on September 6, 2018. As for the Asset tobe Transferred, SAR will receive deposit of 277,500,000 yen on the contract date of the sale and purchase agreement ofbeneficiary interest in trust and rest of the amount will be paid on the scheduled transfer date.
11. Future outlook

As a result of the Transactions, there will be a change in assumption described in “Notice Concerning Revision to
Forecasts for Operating Results and Distribution for the 5th Fiscal Period Ending July 31, 2018 and 6th Fiscal PeriodEnding January 31, 2019” announced as of July 23, 2018. Please refer to “Notice Concerning Revision to Forecasts
for Operating Results for the 6th Fiscal Period Ending January 31, 2019 and Forecasts for Operating Results andDistribution for the 7th Fiscal Period Ending July 31, 2019” announced as of August 21, 2018 for further details.
<Reference Materials>
Reference Material 1:
Reference Material 2:
Reference Material 3:

Portfolio list after the Transactions
Summary of earthquake risk analysis
Location maps/photos of exterior of properties<Reference>
Other Press Releases Announced as of Today- Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units- Notice Concerning Revision to Forecasts for Operating Results for the 6th Fiscal Period Ending January 31, 2019 and
Forecasts for Operating Results and Distribution for the 7th Fiscal Period Ending July 31, 2019- Notice Concerning Debt Financing- Notice Concerning Partial Amendment to the Management Guidelines of the Asset Manager- Notice Concerning Execution of Agreement on Preferential Negotiation Rights to secure Acquisition Pipeline for Future
Growth- Notice Concerning Determination of the Planned Acquisition Date and Change of the Funds for Acquisition- Supplementary Material on Press Releases (Acquisition of Properties through Public Offering) Announced as of Today* This material is distributed to the press club of the Tokyo Stock Exchange (Kabuto Club), the press club of the Ministryof Land, Infrastructure, Transport and Tourism, and the press club for construction trade publications of the Ministry ofLand, Infrastructure, Transport and Tourism.
* Star Asia Investment Corporation website address: http://starasia-reit.com/en/

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

40

Reference Material 1<Real Estate, etc.>
Propertyno.

Portfolio list after the Transactions

Property nameLocation(Note 1)

(Planned)acquisition
price(million yen)

Real estateappraisalvalue(million yen)

Investment
ratio (%)

(Note 2)

(Note 4)(Note 3)

OFC-01

Minami-Azabu Shibuya Building

Minato-ku, Tokyo

2,973

3,150

2.9

OFC-03

Honmachibashi Tower

Chuo-ku, Osaka-shi, Osaka

6,065

6,920

6.0

OFC-04

Nishi-Shinjuku Matsuya Building

Shibuya-ku, Tokyo

1,763

2,430

1.7

OFC-05Alphabet Seven

Minato-ku, Tokyo

1,725

2,330

1.7

OFC-06

Shibuya MK Building

2,042

2,810

2.0

OFC-08Asahi Building

6,320

6,890

6.2

OFC-09Hakata-eki East Place

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

2,286

2,480

2.3

OFC-10Nihonbashi Hamacho Park Building

Chuo-ku, Tokyo

1,450

1,520

1.4

OFC-11

Amusement Media Gakuin Honkan

Shibuya-ku, Tokyo

2,580

2,660

2.5

OFC-12

Higashi-Kobe Center Building

Higashinada-ku, Kobe-shi, Hyogo
Office subtotal

7,440

7,470

7.3

34,644

38,660

34.2

RSC-01

Urban Park Azabujuban

Minato-ku, Tokyo

2,045

2,170

2.0

RSC-02

Urban Park Daikanyama

Shibuya-ku, Tokyo

6,315

7,310

6.2

RSC-05

Urban Park Namba

Naniwa-ku, Osaka-shi, Osaka

1,490

1,610

1.5

RSC-06

Urban Park Gokokuji

Toshima-ku, Tokyo

1,460

1,510

1.4

RSC-07

Urban Park Kashiwa

Kashiwa-shi, Chiba

1,186

1,190

1.2

RSC-08

Urban Park Ryokuchi Koen

Suita-shi, Osaka

1,550

1,570

1.5

RSC-09Urban Park Koenji

Suginami-ku, Tokyo

1,167

1,170

1.2

Residence subtotal

15,213

16,530

15.0

6,942

7,130

6.8

3,560

4,050

3.5

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

7,875

8,560

7.8

LGC-04

Baraki Logistics

Ichikawa-shi, Chiba

4,700

4,890

4.6

LGC-05Tokorozawa Logistics

Tokorozawa-shi, Saitama

1,300

1,400

1.3

LGC-06

Funabashi Nishiura Logistics I

Funabashi-shi, Chiba

3,000

3,010

3.0

LGC-07

Funabashi Nishiura Logistics II

Funabashi-shi, Chiba

LGC-08

Matsubushi Logistics

Kitakatsushika-gun, Saitama

HTL-01R&B Hotel Umeda East

Kita-ku, Osaka-shi, Osaka

HTL-02

Smile Hotel Namba

HTL-03

BEST WESTERN Tokyo Nishikasai

HTL-04

BEST WESTERN Yokohama

821

833

0.8

2,755

2,850

2.7

30,95332,723

30.5

2,069

2,290

2.0

Naniwa-ku, Osaka-shi, Osaka

1,750

1,750

1.7

Edogawa-ku, Tokyo
Tsurumi-ku, Yokohama-shi,
Kanagawa

3,827

3,890

3.8

3,248

3,270

3.2

Chuo-ku, Fukuoka-shi, Fukuoka

1,970

1,990

1.9

Logistics subtotal

HTL-06

Hotel WBF Fukuoka Tenjin Minami(Note 5)
GLANSIT AKIHABARA

Chiyoda-ku, Tokyo

2,500

2,520

2.5

HTL-07

Best Western Tokyo Nishikasai Grande Edogawa-ku, Tokyo

3,180

3,200

3.1

HTL-08

Hotel WBF Art Stay Namba

2,000

2,030

2.0

HTL-05

Note:

Naniwa-ku, Osaka-shi, Osaka
Hotel subtotal

20,54420,940

20.3

Real Estate etc. Total

101,354

108,853100.0This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

41

(Note 1) ”Location” indicates the minimum independent administrative district of which each asset held by SAR as of today (the“Existing Assets (real estate, etc.)”) and Assets to be Acquired is located except for mezzanine loan debt described in the<Mezzanine> below.
(Note 2) “(Planned) acquisition price” indicates, except for Minami-Azabu Shibuya Building, the sale and purchase price stated ineach sale and purchase contract for Existing Assets (real estate, etc.), and “planned acquisition price” indicates theplanned sale and purchase price stated in the sale and purchase agreement for Assets to be Acquired, rounded to thenearest million yen. The sale and purchase price or the planned sale and purchase price does not include consumption
tax, local consumption tax and various expenses required for the acquisition. As to Minami-Azabu Shibuya Building, sinceprice for each property is not set in the sale and purchase agreement, the total sale and purchase price of the property is
divided proportionally based on the ratio of appraisal value of the property at the time of acquisition and indicated as“(planned) acquisition price.”(Note 3) “Real estate appraisal values” is the opinions of value stated in the real estate appraisal report with January 31, 2018 as
the date of valuation for Existing Assets (real estate, etc.), November 1, 2017 as the date of valuation for Nihonbashi
Hamacho Park Building, Urban Park Ryokuchi Koen, Urban Park Koenji, Funabashi Nishiura Logistics I and Funabashi
Nishiura Logistics II acquired during the 5th Fiscal Period, July 1, 2018 as the date of valuation for Assets to be Acquired
including Hotel WBF Fukuoka Tenjin Minami, each rounded to the nearest million yen.
(Note 4) “Investment ratio” is the ratio of (planned) acquisition price for each Existing Assets (real estate, etc.) / Assets to be
Acquired to the total of (planned) acquisition prices of each Existing Assets (real estate, etc.) / Assets to be Acquired eachrounded to the first decimal place.
(Note 5) Hotel WBF Fukuoka Tenjin Minami is the asset to be acquired described in “Notice Concerning Acquisition and Transfer(Asset Replacement) of Real Estate Beneficiary Interests in Trust” announced as of July 23, 2018.
(Note 6) The anticipated transferred asset (Urban Park Shin-Yokohama) and Hakata-eki Higashi 113 Building as the anticipatedtransferred asset described in “Notice Concerning Acquisition and Transfer (Asset Replacement) of Real Estate
Beneficiary Interests in Trust” announced as of July 23, 2018 are excluded.
<Mezzanine>

Asset no.

Mezzanine loan debt

MEZ-01

MEZ-02

Investment
Acquisition
Investment
price (million Interest rate Acquisition ratio to theratio (%)
entire(Note 3)date
yen)(Note 1)
portfolio(Note 2)(%)(Note 4)

Asset type

Asset name (overview)

Corporatebond

The 1st Unsecured Subordinate Bonds
issued by the Haneda Hotel Development
GK (Series A)(Name: Star Asia Mezzanine Loan Debt
Investment Series 1)

54.5

Beneficiaryinterest in
trust

Subordinate beneficiary interest of trustwith loan claims (non-recourse loan) to the
GK Japan B Asset as main asset in trust,which holds Sasazuka South Building as
collateral asset (Name: Star Asia Mezzanine
Loan Debt Investment Series 2)

45.5

Mezzanine loan debt Total

400(Note 5)

Base rate(Note 6)

+5.0%

Base rate
334(Note 7)

+5.0%

100.0

734

－

October
31, 2017

0.4

December22, 2017

0.3

－

0.7

(Note 1) “Investment ratio” is the acquisition price expressed as a percentage of the sum total of mezzanine loan debt.
(Note 2) “Acquisition price” is the sale and purchase price in the bond transfer agreement and the sale price of beneficiary interest in thebeneficiary interest transfer agreement (each do not include transfer-related costs), each rounded down to the nearest million
yen.
(Note 3) “Interest rate” includes the dividend from the invested mezzanine loan debt.
(Note 4) “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 Transactions and the transactions described in “Notice Concerning Acquisition and Transfer (Asset
Replacement) of Real Estate Beneficiary Interests in Trust” announced as of July 23, 2018.
(Note 5) “400” means 400 million yen of total issued bonds amount of 701 million yen.
Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

42

(Note 6) Base rate is JBA 3-month JPY 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 two business days prior to the closing date of the senior loan which will be made closing with the paymentof the bond) will be applied as the base rate.
(Note 7) 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
20, 2017) will be applied as the base rate.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

43

Reference Material 2
PropertyType
no.
OFC-01

OfficeResidence

Residence

Logistics

Hotel

Note:

Summary of earthquake risk analysis
PML
(%)
12.6

Property nameMinami-Azabu Shibuya Building

OFC-03

Honmachibashi Tower

2.7

OFC-04

Nishi-Shinjuku Matsuya Building

12.2

OFC-05Alphabet Seven

7.8

OFC-06

Shibuya MK Building

13.1

OFC-08Asahi Building

4.8

OFC-09Hakata-eki East Place

7.3

OFC-10Nihonbashi Hamacho Park Building

12.1

OFC-11

Amusement Media Gakuin Honkan

OFC-12

Higashi-Kobe Center Building

RSC-01

Urban Park Azabujuban

RSC-02

Urban Park Daikanyama

RSC-05

Urban Park Namba

12.5
Higher bldg.: 4.7
Lower bldg.: 12.1
7.2
Existing bldg.: 12.7
Bldg. A: 10.2
Bldg. B: 7.9
13.2

RSC-06

Urban Park Gokokuji

9.2

RSC-07

Urban Park Kashiwa

RSC-08

Urban Park Ryokuchi Koen

RSC-09Urban Park Koenji

LGC-01

Iwatsuki Logistics

10.0
Apartment house: 8.8
Parking bldg.: 4.0
A bldg.: 6.7
B bldg.: 6.9
12.2

LGC-02

Yokohama Logistics

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

10.8
Bldg. 1-A: 13.9
Bldg. 1-B: 14.4
Bldg. 2: 11.1
10.9
Warehouse: 9.7
Office: 3.8
Warehouse: 8.8
Office: 13.5
Office: 14.3
Factory: 15.9
Warehouse: 14.0
9.8

HTL-01R&B Hotel Umeda East

11.4

HTL-02

Smile Hotel Namba

12.3

HTL-03

BEST WESTERN Tokyo Nishikasai

13.3

HTL-04

BEST WESTERN Yokohama

7.9(Note 2)

HTL-05

Hotel WBF Fukuoka Tenjin Minami

7.8

HTL-06

GLANSIT AKIHABARA

HTL-07

Best Western Tokyo Nishikasai Grande

9.0

HTL-08

Hotel WBF Art Stay Namba

11.0

Entire portfolio (33 properties) (Note 3)

2.63

7.5

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

44

(Note 1) The figure in the entire portfolio column is the PML for the entire portfolio of the Existing Assets (real estate, etc.) / Assets to
be Acquired (portfolio PML) based on “portfolio earthquake risk evaluation report” prepared by Deloitte Tohmatsu Property
Risk Solution Co., Ltd. dated July 2018.
(Note 2) Hotel WBF Fukuoka Tenjin Minami is the asset to be acquired described in “Notice Concerning Acquisition and Transfer (Asset
Replacement) of Real Estate Beneficiary Interests in Trust” announced as of July 23, 2018.
(Note 3) The anticipated transferred asset (Urban Park Shin-Yokohama) and Hakata-eki Higashi 113 Building as the anticipatedtransferred asset described in “Notice Concerning Acquisition and Transfer (Asset Replacement) of Real Estate BeneficiaryInterests in Trust” announced as of July 23, 2018 are excluded.

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

45

Reference Material 31.

OFC-11Note:

Location maps/photos of exterior of properties

Amusement Media Gakuin Honkan

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

46

2.

OFC-12

Note:

Higashi-Kobe Center BuildingThis press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

47

3.

HTL-06 GLANSIT AKIHABARA

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

48

4.

HTL-07 Best Western Tokyo Nishikasai Grande

Note:This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

49

HTL-08 Hotel WBF Art Stay Namba

Note:

This press release does not in any way constitute any part of an offering of securities for investment. This press release ha s been
prepared for the purpose of announcing to the public certain matters relating to the acquisition and lease contract with new tenants,
and transfer of real estate beneficiary interests in trust, and not for the purpose of soliciting any investment, within o r outside of Japan.
Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to here in have not been,
and will not be registered under the United States Securities Act of 1933, as amended (the “S ecurities Act”) and may not be offered orsold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities
in the United States will be made in connection with the above-mentioned transactions. This press release is not for publication,
distribution or release, directly or indirectly in or into the United States of America.

50