(REIT) Financial Report for Fiscal Period Ended July 31, 2018
September 13, 2018
Stock Exchange Listing: Tokyo Stock Exchange
URL: http://starasia-reit.com

REIT Securities Issuer:
Securities Code:
Representative:

Star Asia Investment Corporation (SAR)
3468
Atsushi Kato, Executive Director

Asset Management Company:
Representative:
Contact:

Star Asia Investment Management Co., Ltd. (the Asset Management Company)
Atsushi Kato, President and CEO
Toru Sugihara, Director and CFO
TEL: 03-5425-1340

Scheduled date of commencement of cash distribution payment:
Scheduled date of submission of securities report:

October 15, 2018
October 30, 2018

Preparation of supplementary financial results briefing materials:
Holding of financial results briefing session:

Yes
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended July 31, 2018 (from February 1, 2018 to July 31, 2018)(1) Management Status(% figures are the rate of period-on-period increase (decrease))
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income
million yen%
million yen%
million yen%
million yen%
Ended Jul. 2018
2,810
(12.0)
1,576(23.2)
1,305(30.4)
1,305(27.6)
Ended Jan. 2018
3,194
(0.5)
2,051
(2.2)
1,876
2.3
1,802
(1.7)
Net income
per unit

Fiscal period

Ratio of net income
to equity
yen
2,775
4,349

Ended Jul. 2018
Ended Jan. 2018

%
2.9
4.3

Ratio of ordinary income
to total assets
%
1.5
2.3

Ratio of ordinary income
to operating revenue
%
46.5
58.7

(2) Status of Cash Distribution
Cash distribution
Total
Cash distribution
Total
per unit
cash distribution
in excess of
cash distribution Cash distribution
Fiscal period(not including cash
(not including cash
earnings
in excess of
payout ratio
distribution in excess of distribution in excess of
per unit
earnings
earnings)
earnings)

Ratio of cash
distribution to
net assetsyenmillion yen

yenmillion yen%%

Ended Jul. 2018

2,773

1,305

0

0

100.0

2.8

Ended Jan. 2018

4,077

1,689

0

0

93.7

4.0

(Note1) For the fiscal period ended July 31, 2018, cash distribution payout ratio is calculated by the following formula due to changes
in the number of investment units during the period following issuance of new investment units during the period:
Cash distribution payout ratio = Total cash distribution (not including cash distribution in excess of earnings) ÷ Net income ×100(Note2) For the fiscal period ended January 31, 2018, total cash distribution differs from net income due to internal reserve.
(3) Financial Position
Fiscal period

Total assets
million yen
93,55382,154

Net assets
million yen
47,287
41,870Net cashprovided by (used in)operating activities
million yen
1,366
4,220

Net cashprovided by (used in)investing activities
million yen(11,055)(1,027)

Ended Jul. 2018
Ended Jan. 2018

Equity ratio
%
50.5
51.0

Net assets per unit
yen
100,477
101,063(4) Status of Cash Flows
Fiscal period

Ended Jul. 2018
Ended Jan. 2018－

1 －Net cashprovided by (used in)financing activities
million yen
9,986(3,210)Cash and cash equivalents
at end of period
million yen
5,118
4,820

2. Management Status Forecast for Fiscal Period Ending January 31, 2019 (from August 1, 2018 to January 31, 2019) and Fiscal PeriodEnding July 31, 2019 (from February 1, 2019 to July 31, 2019)(% figures are the rate of period-on-period increase (decrease))
Fiscal period

Operating revenue

million yen
Ending Jan. 2019
Ending Jul. 2019

3,795
3,700

Operating income% million yen
35.0
(2.5)

2,298
2,130

Ordinary income% million yen
45.8
(7.3)

1,936
1,839

Net income% million yen
48.3
(5.0)

1,936
1,838

Cash distribution
per unit
Cash distribution(not including
in excess of earnings
cash distribution
per unit
in excess of earnings)
%
yen
yen
48.3
(5.0)

3,580
3,400

0
0

(Reference) Forecast net income per unit (fiscal period ending January 31, 2019) 3,580 yen
Forecast net income per unit (fiscal period ending July 31, 2019)
3,400 yen
(Note) Net income per unit is calculated by the following formula.
Expected net income ÷ expected total number of investment units issued and outstanding at end of period* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement① Changes in accounting policies accompanying amendments to accounting standards, etc.: No② Changes in accounting policies other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including own investment units) at end of period
Fiscal period ended Jul. 31, 2018
470,624 units
Fiscal period ended Jan. 31, 2018
414,300 units② Number of own investment units at end of period
Fiscal period ended Jul. 31, 2018
0 units
Fiscal period ended Jan. 31, 2018
0 units(Note) For the number of investment units serving as the basis for calculation of net income per unit, please see “Notes on Per
Unit Information” on page 21.
* Presentation of Status of Implementation of Audit Procedures
At the time of disclosure of this financial report, audit procedures for financial statements pursuant to the Financial Instruments andExchange Act have not been completed.
* Explanation of Appropriate Use of Management Status Forecast, and Other Matters of Special Note
The management status outlook and other forward-looking statements contained in this document are based on information thatare currently available and certain assumptions that are deemed reasonable by SAR. Accordingly, the actual management status, etc.
may differ materially due to various factors. In addition, the forecast figures are the current figures calculated under the assumptions
described in “Assumptions Underlying Operating Results Forecasts for Fiscal Period Ending January 31, 2019 and Fiscal Period Ending
July 31, 2019” on pages 3-4. Accordingly, the actual operating revenue, operating income, ordinary income, net income, cash
distribution per unit (not including cash distribution in excess of earnings) and cash distribution in excess of earnings per unit mayvary due to acquisition/disposition of real estate, etc., trends of the real estate market, etc., fluctuations in interest rates or otherchanges in the circumstances surrounding SAR, etc. in the future. In addition, the forecast is not a guarantee of the amount of cash
distribution.

－

2 －Assumptions Underlying Operating Results Forecasts for
Fiscal Period Ending January 31, 2019 and Fiscal Period Ending July 31, 2019
Item
Calculation period

Investment assets

Operating revenue

Operating expenses

NOI(Net Operating
Income)Assumptions
 Fiscal period ending January 31, 2019: August 1, 2018 – January 31, 2019 (184 days)
 Fiscal period ending July 31, 2019: February 1, 2019 – July 31, 2019 (181 days)
 For the real estate beneficiary interest in trust of the 35 properties (referred to as the “Existing Properties(real estate, etc.)” hereinafter in these assumptions) and 2 Mezzanine Loan Debt (referred to as the“Existing Properties (mezzanine)” hereinafter in these assumptions) held by SAR as of today (hereinaftercollectively referred to as the “Existing Properties”), it is assumed there will be no change (new property
acquisitions, sales of the Existing Properties, etc.) other than “Transfer” as described below in theinvestment assets through the end of the fiscal period ending July 31, 2019.
<Transfer>
Property name: Hakata-eki Higashi 113 Building
Planned transfer date:1st (49% quasi-co-ownership interest) December 3, 2018
2nd (51% quasi-co-ownership interest) February 1, 2019
Property name: Urban Park Shin-Yokohama
Planned transfer date: October 11, 2018
 In practice, this may vary due to changes in investment assets.
 Rent revenues from the Existing Properties (real estate, etc.) are calculated based on the rent stated in
the lease agreements that are effective as of today taking factors such as market movement into
consideration. It is also assumed that there will be no arrears or non-payment of rent by tenants.
 Interest revenues or dividend revenues from the Existing Properties (mezzanine) are calculated based onoutlines or trust agreements which define contents of the Existing Properties (mezzanine) that are
effective as of today. It is also assumed that no interest payments or dividend payments will be declined.
 Gain on sales of Hakata-eki Higashi 113 Building is expected to be 401 million yen for the fiscal period
ending January 31, 2019 and 418 million yen for the fiscal period ending July 31, 2019 and gain on salesof Urban Park Shin-Yokohama is expected to be 177 million yen for the fiscal period ending January 31,
2019. In practice, this may vary due to the success or failure of transaction, transfer price and transfer
date, among other factors.
 Among expenses related to rent business of the Existing Properties (real estate, etc.), which are theprincipal operating expenses, expenses excluding depreciation are calculated on the basis of historical
data, reflecting variable factors of expenses.
 Fixed property taxes, city planning taxes and other public charges are expected to be 175 million yen in
fiscal period ending January 31, 2019 and to be 238 million yen in fiscal period ending July 31, 2019. Whenacquiring properties, fixed property taxes, city planning taxes and other public charges in the fiscal year
will be settled on a pro rata basis based on the number of days of ownership with the seller at the time ofacquisition of the properties. However, in the case of SAR, the settled amount will be included in theacquisition cost and thus those for the real estate beneficiary in trust of the 6 properties acquired in
February 2018 and the 6 properties acquired in September 2018 will not be recorded as expenses for the
fiscal period ending January 31, 2019. Fixed property taxes, city planning taxes and other public charges
for those properties are expected to be 70 million yen in fiscal period ending July 31, 2019.
 For the expenditures for repair and maintenance of buildings, 81 million yen is expected for the fiscal
period ending January 31, 2019 and 80 million yen is expected for the fiscal period ending July 31, 2019
based on repair and maintenance plans drawn up by Star Asia Investment Management Co., Ltd. However,
the expenditures for repair and maintenance for the fiscal periods could differ significantly from theestimated amounts, as expenditures may arise urgently due to damage to buildings and such caused by
unexpected factors, and because the variance in amounts generally tends to be significant from year toyear and repair and maintenance expenses do not arise regularly.
 Depreciation is calculated using the straight line method including ancillary costs and is expected to be
415 million yen for the fiscal period ending January 31, 2019 and 427 million yen for the fiscal period
ending July 31, 2019.
 The total NOI of the entire portfolio is expected to be 2,481 million yen for the fiscal period ending January
31, 2019 and 2,478 million yen for the fiscal period ending July 31, 2019.
 NOI is calculated by using the following calculation method.
NOI = rent revenue – rent expenses (excluding depreciation)

－

3 －

Item

Assumptions

Non-operating
expenses Temporary expenses from issuance of new investment units through public offering and third-party
allotment resolved at the Board of Directors meetings on August 21, 2018 and August 29, 2018 are
expected to be 50 million yen for the fiscal period ending January 31, 2019.
 Interest expenses are expected to be 149 million yen for the fiscal period ending January 31, 2019 and
156 million yen for the fiscal period ending July 31, 2019 and other borrowing related expenses are
expected to be 161 million yen for the fiscal period ending January 31, 2019 and 133 million yen for the
fiscal period ending July 31, 2019.
 In other borrowing related expenses noted above, expected temporary expenses (90 million yen for the
fiscal period ending January 31, 2019 and 65 million yen for the fiscal period ending July 31, 2019) fromdebt financing or refinancing are included.

Debt financing

 The total amount of interest-bearing liabilities is assumed to be 52,340 million yen as of the end of the
fiscal period ending January 31, 2019 and 50,880 million yen as of the end of the fiscal period ending July
31, 2019.
 As of today, SAR has 56,360 million yen balance of outstanding borrowings.
 It is assumed to prepay 4,020 million yen by the end of the fiscal period ending January 31, 2019 by using
the paid-in money for issuance of the new investment units through third-party allotment described in“Investment units” below, transfer proceeds from the Transfer, and consumption tax refund resulting
from the acquisition of properties and payment of other various expenses in the fiscal period ending July
31, 2018.
 It is assumed to prepay 1,460 million yen by the end of the fiscal period ending July 31, 2019 by using
consumption tax refund resulting from the acquisition of properties and payment of other various
expenses in the fiscal period ending January 31, 2019 as well as the transfer proceeds from the Transfer.
 Except for those to be prepaid as above, it is assumed that 7,300 million yen of loans payable due forrepayment by the end of the fiscal period ending July 31, 2019 will be refinanced in the term.
 Other than the above, it is assumed that there will be no new borrowings or repayments of existing
borrowings including prepayments by the end of the fiscal period ending July 31, 2019.

Investment units It is assumed that, in addition to the total number of investment units issued and outstanding as of today(537,481 units), all of the new investment units to be issued through third-party allotment (up to 3,343
units), respectively resolved at the Board of Directors meeting held on August 21,2018 and August 29,
2018 will be issued in full.
 Other than the above, it is assumed that there will be no changes in the number of investment units issued
due to additional issuance, etc. of investment units by the end of the fiscal period ending July 31, 2019.

 Cash distribution per unit (not including cash distribution in excess of earnings) is calculated on theassumption described in the cash distribution policy stipulated in SAR’s Articles of Incorporation.
 It is assumed that derivative transactions (interest rate swaps) will continue to be conducted. However, it
is also assumed that deferred losses on hedges, which is an item of deduction from net assets (as thoseCash distribution
provided in article 2, item 30 (b) of the Ordinance on Accountings of Investment Corporations), is not
per unit
expected to arise until the end the fiscal period ending July 31, 2019, and cash distribution per unit (not(not including
including cash distribution in excess of earnings) will not be affected by changes in items of deduction
cash distribution
from net assets in the calculation.
in excess of earnings)  It is possible that the cash distribution per unit (not including cash distribution in excess of earnings) couldchange due to various factors, including changes in investment assets, changes in rent revenue
accompanying changes in tenants, etc., or unexpected repair and maintenance, etc. In addition, cash
distribution per unit (not including cash distribution in excess of earnings) may be affected by changes in
items of deduction from net assets.

Cash distribution
in excess of earnings
per unit

Other

It is assumed that there will be no existing balance of deferred losses on hedges, which is an item of
deduction from net assets, as described above. Of cash distribution in excess of earnings, that attributable
to allowance for temporary difference adjustment is not scheduled at this point.
In addition, of cash distribution in excess of earnings, that falling under the category of cash distribution
accompanying decrease in capital, etc. under tax law is not scheduled at this point.

 Forecasts are based on the assumption that revisions that impact the above forecast figures will not bemade to laws and regulations, tax systems, accounting standards, listing rules, and rules of The Investment
Trusts Association, Japan, etc.
 Forecasts are based on the assumption that there will be no major unforeseen changes to general
economic trends and real estate market conditions, etc.

－

4 －

3.

Financial Statements(1) Balance Sheet(Unit: thousand yen)
4th fiscal period(As of January 31, 2018)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Lease and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets－

5 －5th fiscal period(As of July 31, 2018)

1,667,713
3,153,262
44,66990,216
5,354
4,961,216

2,000,005
3,118,735
50,970118,176
210,713
16,1575,514,759

24,909,318(1,055,284)
23,854,033
9,606
(733)
8,872
20,707(1,240)19,467
20,207(2,314)
17,892
48,929,717
72,829,984

28,549,452(1,407,469)
27,141,983
9,606(1,070)8,536
45,901(2,718)43,18322,442(4,123)18,31856,437,510
83,649,531

3,459,138
3,459,138

3,459,138
3,459,138

734,500
121,333
10,00038,473904,307
77,193,430
82,154,646

734,500
155,717
10,00029,887930,105
88,038,774
93,553,534

(Unit: thousand yen)
4th fiscal period(As of January 31, 2018)
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits in trust
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

－

*1

6 －

5th fiscal period(As of July 31, 2018)292,304
7,300,000
289,696
6,054
74,345126,003338,283
10,9258,437,613

190,118
8,490,000
251,986
8,643
605
21,000594,306
9,842
9,566,503

30,050,000
1,794,980
1,507
31,846,487
40,284,100

34,740,000
1,959,368
493
36,699,861
46,266,365

40,031,185

45,832,670

1,802,393
1,802,393
41,833,579

1,418,609
1,418,609
47,251,279

36,96636,966
41,870,546
82,154,646

35,88935,88947,287,168
93,553,534*1

(2) Statement of Income(Unit: thousand yen)
4th fiscal period
From: August 1, 2017
To: January 31, 2018
Operating revenue
Lease business revenue
Other lease business revenue
Gain on sales of real estate property
Other revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody and administrative service fees
Directors’ compensations
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Investment unit issuance expenses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

5th fiscal period
From: February 1, 2018
To: July 31, 2018

2,255,617*1 152,654*2 771,663
14,412
3,194,348

*1

*1

－

7 －

841,650
211,612
19,5152,400
67,331
1,142,509
2,051,838

*1
*1

*1

2,631,029
160,946
18,4762,810,451
963,758
193,319
20,3232,400
54,427
1,234,229
1,576,222

24
771
795

26
26

92,57555,58727,928176,091
1,876,542
1,876,542
74,34820
74,3691,802,173
220
1,802,393

112,385
149,537
7,405
1,000
270,327
1,305,921
1,305,921
605
605
1,305,316
113,292
1,418,609

(3) Statement of Unitholders’ Equity
4th fiscal period (from August 1, 2017 to January 31, 2018)(Unit: thousand yen)
Valuation and translation
adjustments

Unitholders’ equity
SurplusTotal
net assets

Total
surplus

Total
Total
Deferredvaluation andunitholders’ gains or losses
translation
equityon hedges
adjustments

1,832,669

1,832,669

41,863,855

41,892,541

Dividends from surplus(1,832,448)(1,832,448)(1,832,448)(1,832,448)

Net income

1,802,173

1,802,173

1,802,173

1,802,173

Unappropriatedretainedearnings(undisposed
loss)

Unitholders’capitalBalance at beginning of theperiod40,031,185

28,686

28,686

Changes of items during theperiodNet changes of items otherthan unitholders’ equity
Total changes of items during

8,280

8,280

-

(30,275)(30,275)(30,275)

8,280

8,280

(21,995)*1 40,031,185

1,802,393

1,802,393

41,833,579

36,96636,966

41,870,546

the period
Balance at end of the period

8,280

5th fiscal period (from February 1, 2018 to July 31, 2018)(Unit: thousand yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginning of theperiod40,031,185

Unappropriatedretainedearnings(undisposed
loss)
1,802,393

Total
net assets

Total
surplus

Total
Total
Deferredvaluation andunitholders’ gains or losses
translation
equityon hedges
adjustments

1,802,393

41,833,579

41,870,546

36,96636,966

Changes of items during theperiodIssuance of new
investment units

5,801,484

5,801,484

5,801,484

Dividends from surplus(1,689,101)(1,689,101)(1,689,101)(1,689,101)

Net income

1,305,316

1,305,316

1,305,316

1,305,316

Net changes of items otherthan unitholders’ equity
Total changes of items during
the period
Balance at end of the period(1,077)(1,077)(1,077)5,801,484(383,784)(383,784)

5,417,699(1,077)(1,077)

5,416,622*1 45,832,670

1,418,609

1,418,609

47,251,279

35,88935,88947,287,168－

8 －(4) Statement of Cash Distributions(Unit: yen)I.

Unappropriated retained earnings

II. Cash distribution[Cash distribution per unit]
Cash distribution of earnings[Cash distribution of earnings per unit]
III. Retained earnings carried forward

4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

1,802,393,825

1,418,609,155

1,689,101,100[4,077]1,305,040,352[2,773]

1,689,101,100[4,077]1,305,040,352[2,773]

113,292,725

113,568,803

Method of calculation of amount of cash distribution
4th fiscal period (from August 1, 2017 to January 31, 2018):
Pursuant to the cash distribution policy provided in Article 35, Paragraph 1 of SAR’s Articles of Incorporation, SAR shall distribute inexcess of the amount equivalent to 90% of the amount of distributable earnings of SAR as defined in Article 67-15 of the Act on
Special Measures Concerning Taxation. In accordance with such policy, concerning cash distribution of earnings (not including cash
distribution in excess of earnings), the decision was made considering 771,663,395 yen of gain on sales of real estate property to
distribute 1,689,101,100 yen, which is the minimum multiple of the total number of issued and outstanding investment units, withamount exceeding 90% of income before income taxes and 113,072,147 yen of net income was decided to be reserved internally.
5th fiscal period (from February 1, 2018 to July 31, 2018):
Pursuant to the cash distribution policy provided in Article 35, Paragraph 1 of SAR’s Articles of Incorporation, SAR shall distribute inexcess of the amount equivalent to 90% of the amount of distributable earnings of SAR as defined in Article 67-15 of the Act on
Special Measures Concerning Taxation. In accordance with such policy, concerning cash distribution of earnings (not including cash
distribution in excess of earnings), the decision was made to distribute 1,305,040,352 yen, which is the entire amount of the net
income but excluding the portion where cash distribution of earnings per unit becomes a fractional amount of less than 1 yen, as
cash distribution of earnings.

－

9 －(5) Statement of Cash Flows(Unit: thousand yen)
4th fiscal period
From: August 1, 2017
To: January 31, 2018
Cash flows from operating activities
Income before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Decrease from sales of property, plant and equipment in trust
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Purchase of investment securities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

10 －

5th fiscal period
From: February 1, 2018
To: July 31, 2018

1,876,542
305,290
27,928(24)
92,575
8,075
261,743
113,269
18,72924,922
84,485
14,243(251,394)
1,744,836(5,941)4,315,282
24(93,627)(1,027)4,220,652

1,305,921
355,808
7,405(26)
112,385(6,300)(210,713)(105,003)(27,960)(34,383)(49,856)(45,613)
256,022(4,875)
1,552,810
26(109,795)(76,159)
1,366,881(224,406)(128,352)
59,996(734,500)(1,027,262)(11,219,780)(45,598)
209,986(11,055,392)(1,380,000)(1,830,353)(3,210,353)(16,962)
4,837,939*1 4,820,976

13,460,000(7,580,000)
5,794,079(1,687,802)
9,986,276
297,765
4,820,976*1 5,118,741

(6) Notes on the Going Concern Assumption
Not applicable.
(7) Notes on Matters Concerning Significant Accounting Policies
1. Evaluation standards
Other securities:
and methods ofThose with fair value
valuation of securities
Fair value method or market value method (Variances are directly included in net assets.)
2. Method of
Property, plant and equipment (including trust assets)
depreciation of
The straight-line method is adopted. The useful life of primary property, plant and equipment is as
non-current assets
follows:
Buildings
5-69 years
Structures
10-15 years
Machinery and equipment
10 years
Tools, furniture and fixtures 3- 6 years
3. Accounting forInvestment unit issuance expenses
deferred assets
The entire amount is expensed as incurred.
4. Standards for
Accounting for fixed property tax, etc.
revenue and expense
Accounting for fixed property tax, city planning tax, depreciable asset tax, etc. (“fixed property tax,
recognitionetc.”) on real estate or beneficiary interest in trust for real estate held is that, of the tax amountassessed and determined, the amount corresponding to the concerned calculation period is expensed
as expenses related to rent business.
The amount equivalent to fixed property tax, etc. in the initial fiscal year borne by SAR uponacquisition of real estate or beneficiary interest in trust for real estate is not recognized as expenses
but included in the cost of acquisition of the concerned real estate, etc. In the fiscal period underreview, the amount equivalent to fixed property tax, etc. included in the cost of acquisition of realestate, etc. was 41,165 thousand yen.
5. Method of(1) Hedge accounting approachhedge accounting
Deferral hedge accounting is adopted.
(2) Hedging instruments and hedged items
Hedging instruments:
Interest rate swap transaction
Hedged items: Interest on loans(3) Hedging policy
SAR conducts derivative transactions for the purpose of hedging the risks provided in its Articles
of Incorporation pursuant to rules and regulations.
(4) Method of assessing the effectiveness of hedging
The effectiveness of hedging is assessed by comparing the cumulative change in cash flows of
the hedging instruments with the cumulative change in cash flows of the hedged items andverifying the ratio of the amount of change in the two.
6. Scope of funds
The funds (cash and cash equivalents) in the statement of cash flows comprise cash on hand and cashin the statement ofin trust, demand deposits and deposits in trust, and short-term investments with a maturity of three
cash flows (cash andmonths or less from the date of acquisition that are readily convertible to cash and that are subject
cash equivalents)
to an insignificant risk of changes in value.
7. Other significant(1) Accounting for beneficiary interest in trust for real estate, etc.
matters serving as theConcerning beneficiary interest in trust for real estate, etc. held, all accounts of assets andbasis for preparation
liabilities within trust assets as well as all accounts of revenue and expenses from the trust assetsof financial statements
are recognized in the relevant account item of the balance sheet and the statement of income.
The following material items of the trust assets recognized in the relevant account item areseparately listed on the balance sheet.
① Cash and deposits in trust② Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust③ Leasehold rights in trust④ Tenant leasehold and security deposits in trust(2) Accounting for consumption tax, etc.
The accounting for consumption tax and local consumption tax is the taxes are excluded from thetransaction amounts.
Non-deductible consumption tax on acquisition of assets is included in the acquisition cost ofeach asset.

－

11 －

(8) Notes to the Financial Statements[Notes to the Balance Sheet]*1

Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: thousand yen)
4th fiscal period(As of January 31, 2018)

5th fiscal period(As of July 31, 2018)

50,00050,000[Notes to the Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing(Unit: thousand yen)
4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

1,997,374

2,354,911

187,680
60,958201,909
64,005

7,738
1,865

2,255,617

7,346
2,857

2,631,029

152,654

127,053
33,892160,946

A. Operating revenue from real estate leasing
Lease business revenue
Rental revenue
Common area maintenance revenue
Parking revenue
Facility use revenue
Other rental revenue
Other lease business revenue
134,400
18,254

Utilities reimbursement
Other revenue
Total operating revenue from real estate leasing

2,408,272

2,791,975

B. Operating expenses from real estate leasing
Expenses related to rent business
Management fee
Utilities expenses

121,151
137,730

130,310130,997

Taxes and dues
Repair expenses

139,11259,548

175,769
68,389Trust fee
Insurance premium

10,740
3,772

11,036
4,046

Depreciation
Other expenses

305,29064,304355,808
87,399Total operating expenses from real estate leasing
C. Operating income (loss) from real estate leasing

[A－B]

－

12 －

841,650

963,758

1,566,622

1,828,216

*2 Breakdown of gain on sales of real estate property
4th fiscal period (From: August 1, 2017 To: January 31, 2018)
Oak Minami-Azabu(51% of quasi co-ownership interest)
Real Estate Sale Income
Real Estate Sale Cost

2,560,200
1,744,836

Other Real Estate Sale Expenses

43,699Gain on Real Estate Sale

771,663

5th fiscal period (From: February 1, 2018 To: July 31, 2018)
Not applicable[Notes to the Statement of Unitholders’ Equity]*1

Total number of investment units authorized and total number of investment units issued and outstanding

Total number of investment units authorized
Total number of investment units issued and outstanding

4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

10,000,000 units

10,000,000 units

414,300 units

470,624 units[Notes to the Statement of Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet items(Unit: thousand yen)
4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

Cash and deposits

1,667,713

2,000,005

Cash and deposits in trust

3,153,262

3,118,735

Cash and cash equivalents

4,820,976

5,118,741[Notes on Lease Transactions]Operating leases (as lessor)
Future minimum lease payments(Unit: thousand yen)
4th fiscal period
As of Jan. 31, 2018

5th fiscal period
As of Jul. 31, 2018

Not later than 1 year

1,597,468

1,976,658

Later than 1 year

3,175,890

4,192,795

4,773,358

6,169,453

Total

－

13 －

[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
SAR shall procure funds to allocate to acquisition of real estate related assets, repayment of interest‐bearing liabilities,
etc. through mainly issuance of investment units, borrowing from financial institutions, issuance of investment
corporation bonds, etc. Upon procuring funds through interest‐bearing liabilities, due consideration shall be given tofund procurement agility and financial stability.
(2) Description of financial instruments and associated risks, and risk management system
The funds procured through loans, which shall be for the purpose of mainly acquisition of assets, are exposed to liquidity
risk until the repayment date, but the concerned risks are managed by taking such measures as lengthening the
procurement periods and staggering the maturities. In addition, loans with floating interest rates are exposed to interest
rate fluctuation risk, but derivative transactions (interest rate swap transactions) are utilized as hedging instruments to,in effect, convert interest rates to fixed rates in order to mitigate that risk. For the hedge accounting approach, hedging
instruments, hedged items, hedging policy and method of assessing the effectiveness of hedging, please refer to “5.
Method of hedge accounting” described under “Notes on Matters Concerning Significant Accounting Policies” earlier inthis document.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
Not applicable.
2.

Matters concerning fair value, etc. of financial instruments
The carrying amount and fair value as of January 31, 2018, and the amount of difference between these, are as follows:(Unit: thousand yen)
Carrying amount

Fair value

Amount of difference(1) Cash and deposits

1,667,713

1,667,713-(2) Cash and deposits in trust

3,153,262

3,153,262-

734,500

734,500-

5,555,476

5,555,476-

7,300,000

7,300,000-

30,050,000

30,050,000-

37,350,000

37,350,000-

36,96636,966-(3) Investment securities
Assets total(4) Current portion of long-term loans
payable(5) Long-term loans payable
Liabilities total(6) Derivative transactions (*)

The carrying amount and fair value as of July 31, 2018, and the amount of difference between these, are as follows:(Unit: thousand yen)
Carrying amount

Fair value

Amount of difference(1) Cash and deposits

2,000,005

2,000,005-(2) Cash and deposits in trust

3,118,735

3,118,735-

734,500

734,500-

5,853,241

5,853,241-(4) Current portion of long-term loans
payable8,490,000

8,490,000-(5) Long-term loans payable

34,740,000

34,740,000-

43,230,000

43,230,000-

35,88935,889-(3) Investment securities
Assets total

Liabilities total(6) Derivative transactions (*)(*)

Assets and liabilities arising from derivative transactions are offset and presented in the net amount, with the balance shown in parentheses ( )when in a net liability position.

－

14 －

(Note 1) Method of calculation of the fair value of financial instruments(1) Cash and deposits; (2) Cash and deposits in trust; (4) Current portion of long-term loans payable
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at that bookvalue.
(3) Investment securities
Because interest income etc. from mezzanine loan debt are based on floating interest rates, the fair value is approximately the same as thebook value and thus stated at that book value.
(5) Long-term loans payables
Because long-term loans payable are all with floating interest rates under terms and conditions that interest rates be reviewed every set periodof time, the fair value is approximately the same as the book value and thus stated at that book value.
(6) Derivative transactions
Please refer to “Notes on Derivative Transactions” later in this document.
(Note 2) Financial instruments for which estimation of fair value is recognized to be difficult(Unit: thousand yen)
4th fiscal period
As of January 31, 2018

Category
Tenant leasehold and security deposits in trust

5th fiscal period
As of July 31, 2018

1,794,980

1,959,368

Tenant leasehold and security deposits in trust are not subject to valuation at fair value, because a reasonable estimation of cash flows isrecognized to be extremely difficult due to there being no market price and difficulty of calculating the actual deposit period from when lessees
move in to when they move out.
(Note 3) Amount of redemption of monetary claims scheduled to be due after the date of settlement of accounts(January 31, 2018)(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Not later than
1 yearCash and deposits

1,667,713

-

-

-

-

-

Cash and deposits in trust

3,153,262

-

-

-

-

-

-

-

-

-

-

734,500

4,820,976

-

-

-

-

734,500

Investment securities
Total(July 31, 2018)(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Not later than
1 yearCash and deposits

2,000,005

-

-

-

-

-

Cash and deposits in trust

3,118,735

-

-

-

-

-

-

-

-

-

-

734,500

5,118,741

-

-

-

-

734,500

Investment securities
Total(Note 4) Amount of repayment of loans scheduled to be due after the date of settlement of accounts(January 31, 2018)

Not later than
1 year(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Long-term loans payable

7,300,000

7,300,000

11,300,000

7,300,000

4,150,000

-

Total

7,300,000

7,300,000

11,300,000

7,300,000

4,150,000-(July 31, 2018)

Not later than
1 year(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Long-term loans payable

8,490,000

7,300,000

11,300,000

11,450,000

4,690,000

-

Total

8,490,000

7,300,000

11,300,000

11,450,000

4,690,000

-

－

15 －

[Notes on Securities]
Other securities
4th fiscal period (as of January 31, 2018)（Unit: Thousand yen）
Category

Book value(1)Stock

Acquisition cost

Difference

-

-

-

bond, municipal
bond, etc.

-

-

-

②Corporate bond

-

-

-

③Other

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

400,000

400,000

-

-

-

-

334,500

334,500-

734,500

734,500-

734,500

734,500-(2)Bond①Government
Book value greaterthan acquisition cost(3)Other
Subtotal(1)Stock(2)Bond①Government
bond, municipalBook value less thanor equal tobond, etc.

acquisition cost

②Corporate bond
③Other(3)Other
Subtotal
Total

5th fiscal period (as of July 31, 2018)（Unit: Thousand yen）
Category

Book value(1)Stock

Acquisition cost

Difference

-

-

-

-

-

-

②Corporate bond

-

-

-

③Other

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

400,000

400,000

-

-

-

-

334,500

334,500-

734,500

734,500-

734,500

734,500-(2)Bond①Government
bond, municipalBook value greaterthan acquisition costbond, etc.

(3)Other
Subtotal(1)Stock(2)Bond①Government
bond, municipalBook value less thanbond, etc.

or equal toacquisition cost

②Corporate bond
③Other(3)Other
Subtotal
Total

－

16 －

[Notes on Derivative Transactions]
4th fiscal period (as of January 31, 2018)1.

Derivative transactions to which hedge accounting is not applied
Not applicable.

2.

Derivative transactions to which hedge accounting is applied
The following is the contract amount or the amount equivalent to the principal provided in the contract as of the date ofsettlement of accounts for each hedge accounting approach.
(Unit: thousand yen)Hedge
accounting
approach

Type, etc. of derivative transactionMainhedged item

Principle
accounting

Interest rate swap transaction(floating receivable; fixed payable)

Long-termloans payable

Contract amount, etc. (Note 1)
Of which,later than 1 year
30,050,000

Fair value(Note 2)30,050,000

36,966(Note 1) Contract amount, etc. is based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

5th fiscal period (as of July 31, 2018)1.

Derivative transactions to which hedge accounting is not applied
Not applicable.

2.

Derivative transactions to which hedge accounting is applied
The following is the contract amount or the amount equivalent to the principal provided in the contract as of the date ofsettlement of accounts for each hedge accounting approach.
(Unit: thousand yen)Hedge
accounting
approach

Type, etc. of derivative transactionMainhedged item

Principle
accounting

Interest rate swap transaction(floating receivable; fixed payable)

Long-termloans payable

Contract amount, etc. (Note 1)
Of which,later than 1 year
34,740,000

Fair value(Note 2)27,440,000

35,889(Note 1) Contract amount, etc. is based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

[Notes on Retirement Benefits]
4th fiscal period (as of January 31, 2018)
Not applicable.
5th fiscal period (as of July 31, 2018)
Not applicable.
[Notes on Tax-Effect Accounting]1.

Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities(Unit: thousand yen)
4th fiscal period
As of January 31, 2018
Deferred tax assets
Non-deductible accrued enterprise tax
Acquisition cost of securities

5th fiscal period
As of July 31, 2018

6,119

-

1,364

1,364

Subtotal

7,484

1,364

Valuation allowance(7,484)(1,364)

-

-

-

-

Total
Deferred tax assets, net

－

17 －

2.

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate after application of tax-effect accounting(Unit: %)4th fiscal period
As of January 31, 2018
Statutory tax rate

31.74

31.74

[Adjustments]
Deductible distributions payable(28.57)(31.30)0.79(0.40)

3.96

0.05

Other
Effective income tax rate
after application of tax-effect accounting[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method, etc.]
4th fiscal period (as of January 31, 2018)
Not applicable.
5th fiscal period (as of July 31, 2018)
Not applicable.
[Notes on Related-Party Transactions]
1. Parent company, major corporate unitholder, etc.
4th fiscal period (from August 1, 2017 to January 31, 2018)
Not applicable.
5th fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.
2.

Affiliated company, etc.
4th fiscal period (from August 1, 2017 to January 31, 2018)
Not applicable.
5th fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.

3.

5th fiscal period
As of July 31, 2018

Fellow subsidiary, etc.
4th fiscal period (from August 1, 2017 to January 31, 2018)
Not applicable.
5th fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.

－

18 －

4.

Director, major individual unitholder, etc.
4th fiscal period (from August 1, 2017 to January 31, 2018)

Type

Name ofCapital stock

Description

company,orof business

investmentsorin capital

occupation

etc. or

Address

personDirector,or close
relativeof

Atsushi

－

－

Kato

Percentage
of votingrights, etc.
held by (in)amountAccounttransaction(thousand

item

yen)

Executive

Payment of

Director of

asset

SAR, andmanagement
0.01%

and CEO of

director

Description ofSAR

President

fee to theAsset

the Asset

Management

Management

Company

Company

Balance atTransaction

end ofperiod(thousandyen)

237,214

Accounts(Note 2)

payable -(Note 3)other220,609(Note 2)

(Note 1)

5th fiscal period (from February 1, 2018 to July 31, 2018)
Name ofType

company,
etc. or

Address

Capital stock

Description

orof business

investmentsorin capital

occupation

personDirector,or close
relativeof

Atsushi

－

－

Kato

director

Percentage
of votingrights, etc.
held by (in)amountAccounttransaction(thousand

item

yen)

SAR
Payment of

Director of

asset

SAR, andmanagement
0.01%

and CEO of

fee to theAsset

the Asset

Management

Management

Company

Company(Note 1)

Description of

Executive

President

Balance atTransaction

end ofperiod(thousandyen)

247,034

Accounts(Note 2)

payable -(Note 3)other208,785(Note 2)

(Note 1)

The transaction is one that was conducted by Atsushi Kato as President and CEO of a third party (the Asset Management Company), andthe transaction amount is based on the terms and conditions provided in the Articles of Incorporation of SAR.

(Note 2)Of the amounts above, the transaction amount does not include consumption tax, while the balance at the end of the period includes
consumption tax.

(Note 3)

Asset management fee of 4th fiscal period includes the property transfer incentive portion in the amount of 25,602 thousand yen. Assetmanagement fee of 5th fiscal period includes the property acquisition incentive portion included in the book value of individual realestate, etc. in the amount of 53,715 thousand yen.

[Notes on Asset Retirement Obligations]
4th fiscal period (as of January 31, 2018)
Not applicable.
5th fiscal period (as of July 31, 2018)
Not applicable.

－

19 －

[Notes on Investment and Rental Properties]
SAR owns rental real estate, etc. for the purpose of earning revenue from leasing. The carrying amount, amount of increase(decrease) during the period and fair value of these investment and rental properties are as follows:(Unit: thousand yen)
4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

Balance at beginning of period

78,156,438

76,289,122

Amount of increase (decrease) during period(1,867,315)

10,819,546

Balance at end of period

76,289,122

87,108,669

82,680,000

95,246,000

Carrying amount

Fair value at end of period(Note 1) Carrying amount is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) in investment and rental properties during 4th period, the amount of increase is mainly attributable tocapital expenditure (182,811 thousand yen), while the amount of decrease is mainly attributable to disposition of real estate beneficiaryinterest in trust of 1 property (51% of quasi co-ownership) (1,744,836 thousand yen) and depreciation (305,290 thousand yen). Of the amountof increase (decrease) in investment and rental properties during 5th period, the amount of increase is mainly attributable to acquisition ofreal estate beneficiary interest in trust of 6 properties (10,894,174 thousand yen) and capital expenditure (281,180 thousand yen), while theamount of decrease is mainly attributable to depreciation (355,808 thousand yen).
(Note 3) Fair value at the end of the period is the appraisal value by an outside real estate appraiser. Of the fair value at the end 5th period, that ofHakata-eki Higashi 113 Building is based of transfer price (2,850,000 thousand yen) stated in the contract dated July 23, 2018 and that of Urban
Park Shin-Yokohama is based of transfer price (2,775,000 thousand yen) stated in the contract dated August 21, 2018.

The income (loss) concerning investment and rental properties are as stated in “Notes to the Statement of Income” earlier in thisdocument.
[Notes on Segment Information]
1.

Segment information
Segment information is omitted because SAR operates a single segment, which is the real estate leasing business.

2.

Related information
4th fiscal period (from August 1, 2017 to January 31, 2018)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas① Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
② Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers（Unit: Thousand yen）
Customer nameOperating revenue

Kanden Realty & Development Co., Ltd.

771,663－

20 －Segment
Real estate leasing business.

5th fiscal period (from February 1, 2018 to July 31, 2018)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas① Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
② Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers
Information about major customers is omitted because operating revenue to each customer is less than 10% of
operating revenue on the statement of income.
[Notes on Per Unit Information]
4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

Net assets per unit

101,063 yen

100,477 yen

Net income per unit

4,349 yen

2,775 yen

(Note 1) Net income per unit is calculated by dividing net income by the daily weighted average number of investment units. In addition, diluted net income
per unit is not stated, because there are no diluted investment units.
(Note 2) The basis for calculation of net income per unit is as follows:

Net income (thousand yen)Amount not attributable to common unitholders(thousand yen)
Net income attributable to common investment units(thousand yen)
Average number of investment units during period (units)

－

21 －

4th fiscal period
From: August 1, 2017
To: January 31, 2018

5th fiscal period
From: February 1, 2018
To: July 31, 2018

1,802,173

1,305,316--

1,802,173

1,305,316

414,300

470,238

[Notes on Significant Subsequent Events]
1. Issuance of new investment units
SAR resolved the issuance of new investment units for the purpose of procuring funds for acquisition of new properties andrepayment of borrowings at the Board of Directors meetings on August 21, 2018 and August 29, 2018 as follows. For theissuance of new investment units through public offering, the payment was completed on September 5, 2018.
<Issuance of new investment units through public offering>Number of new investment units issued: 66,857 units
Offer price: 101,985 yen per unit
Total offer price: 6,818,411,145 yen
Paid-in amount (issue amount): 98,480 yen per unit
Total paid-in amount (total issue amount): 6,584,077,360 yen
Payment date: September 5, 2018
<Issuance of new investment units through third-party allotment>
Number of new investment units issued: up to 3,343 units
Paid-in amount (issue amount): 98,480 yen per unit
Total paid-in amount (total issue amount): up to 329,218,640 yen
Payment Date: October 2, 2018
Allottee: Nomura Securities Co. Ltd.
SAR acquired real estate beneficiary interest in trust of 6 properties (total amount of purchase price: 19,670 million yen) on
September 6, 2018, allocating the funds from issuance of new investment units through public offering as part of acquisition
funds.
2. Asset transfer
SAR decided asset transfer as follows.
<Hakata-eki Higashi 113 Building>
Asset to be transferred: Beneficiary interest in real estate in Japan
Contract date: July 23, 2018
Planned transfer date:1st (49% quasi-co-ownership interest) December 3, 2018
2nd (51% quasi-co-ownership interest) February 1, 2019
Location (indication of residential address): 1-13-9 Hakataeki-Higashi, Hakata-ku, Fukuoka-shi, Fukuoka
Buyer: Godo-Kaisha Sunrise
Transfer price:
1st (49% quasi-co-ownership interest) 1,396.5 million yen
2nd (51% quasi-co-ownership interest) 1,453.5 million yen
Effect on income (loss): Approximately 401million yen of gain on sales of real estate property will be recorded as operating
revenue in the fiscal period ended January 31, 2019 and approximately 418million yen of gain on
sales of real estate property will be recorded as operating revenue in the fiscal period ended July 31,
2019.
<Urban Park Shin-Yokohama>Asset to be transferred: Beneficiary interest for real estate in Japan
Contract date: August 21, 2018
Planned transfer date: October 11, 2018
Location (indication of residential address): 2-18-5 Shin-Yokohama, Kohoku-ku, Yokohama-shi, Kanagawa
Buyer: Kyushu Railway Company
Transfer price: 2,775 million yen
Effect on income (loss): Approximately 177million yen of gain on sales of real estate property will be recorded as operating
revenue in the fiscal period ended January 31, 2019.
－22 －(9) Changes in Total Number of Investment Units Issued and Outstanding
The following are the changes in unitholders’ capital and total number of investment units issued and outstanding from the dateof establishment of SAR to the end of 5th fiscal period.
Total number of investment
Unitholders’ capitalunits issued and outstanding(thousand yen)(units)(Note 9)Date
Event
Remarks
Increase
Increase
Balance
Balance(Decrease)(Decrease)
December 1, 2015
January 14, 2016

Establishment through

2,000

2,000

200,000

200,000(Note 1)

95,00097,0009,500,000

9,700,000(Note 2)

private placement
Capital increase throughprivate placement

April 19, 2016

Capital increase throughpublic offering

235,900

332,900

22,705,375

32,405,375(Note 3)

May 17, 2016

Capital increase throughthird-party allotment

11,800344,700

1,135,750

33,541,125(Note 4)

April 4, 2017

Capital increase throughpublic offering

66,200410,900

6,173,017

39,714,142(Note 5)3,400

414,300

317,043

40,031,185(Note 6)53,641

467,941

5,525,130

45,556,316(Note 7)

2,683

470,624

276,354

45,832,670(Note 8)

April 24, 2017
February 1, 2018
February 27, 2018

Capital increase throughthird-party allotment
Capital increase throughpublic offering
Capital increase throughthird-party allotment(Note 1) Investment units were issued at a paid-in amount of 100,000 yen per unit upon the establishment of SAR.
(Note 2) Investment units were issued at a paid-in amount of 100,000 yen per unit.
(Note 3) New investment units were issued through public offering at an issue price of 100,000 yen (paid-in amount of 96,250 yen) per unit for the
purpose of procuring funds for acquisition of new properties, etc.
(Note 4) New investment units were issued through third-party allotment at a paid-in amount of 96,250 yen per unit for the purpose of procuring funds
for repayment of borrowings.
(Note 5) New investment units were issued through public offering at an issue price of 96,720 yen (paid-in amount of 93,248 yen) per unit for the purposeof procuring funds for acquisition of new properties.
(Note 6) New investment units were issued through third-party allotment at a paid-in amount of 93,248 yen per unit for the purpose of procuring funds
for repayment of borrowings.
(Note 7) New investment units were issued through public offering at an issue price of 106,724 yen (paid-in amount of 103,002 yen) per unit for the
purpose of procuring funds for acquisition of new properties.
(Note 8) New investment units were issued through third-party allotment at a paid-in amount of 103,002 yen per unit for the purpose of procuring funds
for repayment of borrowings.
(Note 9) Deduction of reversal of allowance for temporary difference adjustment in line with the cash distribution in excess of earnings from unitholders’capital is not considered.

－

23 －

4.

Changes in Directors(1) Directors of SAR
There were no changes in directors in the fiscal period under review.
(2) Directors of the Asset Management Company
Changes in directors are disclosed in immediate release when decided.

5.

Reference Information(1) Investment Status

Type ofasset

Primary use

4th fiscal period

5th fiscal period(As of January 31, 2018)(As of July 31, 2018)

Geographic area

Total amount

As a percentage

Total amount

As a percentage(Note 1)

heldof total assets

heldof total assets(million yen)(%)(million yen)(%)

(Note 2)

(Note 3)(Note 2)

(Note 3)

Greater Tokyo

15,07018.3

16,570

17.7

Other than Greater Tokyo

10,297

12.5

10,253

11.0

Greater Tokyo

13,84516.9

15,033

16.1

Other than Greater Tokyo

1,542

1.9

3,148

3.4

Greater Tokyo

24,54429.9

31,137

33.3

Greater Tokyo

7,128

8.7

7,122

7.6

Other than Greater Tokyo

3,859

4.7

3,843

4.1

76,28992.987,108

93.1

734

0.9

734

0.8

Deposits and other assets

5,131

6.2

5,710

6.1

Total amount of assets

82,154100.0

93,553100.0

OfficeReal

Residence

estatein trust

Logistics facility

Hotel

Subtotal
Investment securities

Amount(million yen)

As a percentage
of total assets(%)

Amount(million yen)

As a percentage
of total assets(%)

Total amount of liabilities (Note 4)

40,28449.0

46,266

49.5

Total amount of net assets (Note 4)

41,87051.047,28750.5(Note 1) “Greater Tokyo” refers to Tokyo’s 23 wards, Yokohama City and Kawasaki City in the case of the office asset type, andTokyo, Kanagawa, Saitama and Chiba Prefectures in the case of other asset types (residence, logistics facility and hotel).
The same shall apply hereinafter.
(Note 2) “Total amount held” is the carrying amount as at the date of settlement of accounts (in the case of real estate in trust,then the depreciated book value), rounded down to the nearest million yen.
(Note 3) “As a percentage of total assets” is the carrying amount of the concerned assets expressed as a percentage of the total
amount of assets, rounded to the first decimal place.
(Note 4) “Total amount of liabilities” and “Total amount of net assets” are according to total liabilities and total net assets on
the balance sheet.

－

24 －

(2) Invested Assets① Investment securities
Book value (million
Asset
no.

Name of the security

Type of assetyen)Quantity(Units)

Unit
price

Star Asia Mezzanine Loan
MEZ-01

Debt Investment Series 1(Note 2)

MEZ-02

Corporate

Trust

Debt Investment Series 2

beneficiary(Note 3)rights
Total－

Unrealized
gain or(Note 1)

Amount

Unit
price

loss

AmountRemarks(Million
yen)

－

－

400

－

400

－

－

－

－

334

－

334

－

－

－

－

734

－

734

－

－

bond

Star Asia Mezzanine Loan

Fair value(million yen)

(Note 1) Because interest income etc. from mezzanine loan debt are based on floating interest rates, the fair value isapproximately the same as the book value and thus stated at that book value.
(Note 2) The underlying assets are trust beneficiary interests in a trust mainly comprised of Relief Premium Haneda.
(Note 3) The underlying assets are trust beneficiary interests in a trust mainly comprised of Sasazuka South Building.

－

25 －

② Real estate(a) Overview of real estate (purchase price, etc)
PropertyUse

no.

Property nameAcquisition

Share of

Location

price

investment(Note 2)

(million yen)(%)

(Note 3)(Note 4)(Note 1)

OFC-01

OFC-03

Office

OFC-04

Minami-Azabu Shibuya

Minato Ward,

Building

Tokyo

Honmachibashi Tower

Osaka City, Osaka

Nishi-Shinjuku Matsuya

Shibuya Ward,

Building

Tokyo

OFC-05Alphabet Seven

OFC-06

Shibuya MK Building

OFC-07

Chuo Ward,

Hakata-eki Higashi 113
Building

Minato Ward,Tokyo
Shibuya Ward,
Tokyo

Real estateappraisalvalue, etc.

Acquisition date(million yen)
(Note 5)

2,973

3.5

3,150

January 14, 2016

6,065

7.0

6,940

January 14, 2016

1,763

2.0

2,430

April 20, 2016

1,725

2.0

2,390

April 20, 2016

2,042

2.4

2,890

April 20, 2016

1,885

2.2

2,090

April 20, 2016

6,320

7.3

7,090

April 20, 2016

2,286

2.7

2,480

April 6, 2017

1,450

1.7

1,520

February 2, 2018

26,50930.8

30,980

－

2,045

2.4

2,230

January 14, 2016

6,315

7.3

7,500

January 14, 2016

2,528

2.9

2,580

April 20, 2016

1,490

1.7

1,610

April 20, 2016

1,460

1.7

1,510

February 1, 2017

1,186

1.4

1,190

April 6, 2017

1,550

1.8

1,570

February 2, 2018

1,167

1.4

1,170

February 2, 2018

17,741

20.6

19,360－Hakata Ward,
Fukuoka City,
Fukuoka
Kanagawa Ward,

OFC-08Asahi Building

Yokohama City,
Kanagawa
Hakata Ward,

OFC-09Hakata-eki East Place

Fukuoka City,
Fukuoka

OFC-10Nihonbashi Hamacho Park
Building

Chuo Ward, Tokyo

Subtotal
RSC-01

Urban Park Azabujuban

RSC-02

Urban Park Daikanyama

RSC-04

Urban Park Shin-Yokohama

Minato Ward,Tokyo
Shibuya Ward,Tokyo
Kohoku Ward,
Yokohama City,

Residence

Kanagawa
RSC-05

Urban Park Namba

RSC-06

Urban Park Gokokuji

RSC-07

Urban Park Kashiwa

RSC-08

Urban Park Ryokuchi Koen

RSC-09Urban Park Koenji

Naniwa Ward,
Osaka City, Osaka
Toshima Ward,Tokyo
Kashiwa City,
Chiba
Suita, Osaka
Suginami Ward,Tokyo

Subtotal－

26 －Iwatsuki Ward,
LGC-01

Iwatsuki Logistics

Saitama City,

6,942

8.1

7,140

January 14, 2016

3,560

4.1

4,060

January 14, 2016

7,875

9.1

8,650

January 14, 2016

4,700

5.5

4,930

April 6, 2017

1,300

1.5

1,350

April 6, 2017

Funabashi, Chiba

3,000

3.5

3,020

February 2, 2018

Funabashi, Chiba

821

1.0

841

February 2, 2018

2,755

3.2

2,850

February 2, 2018

30,95336.0

32,841

－

2,069

2.4

2,310

January 14, 2016

1,750

2.0

1,720

January 14, 2016

3,827

4.4

3,830

April 6, 2017

3,248

3.8

3,250

April 6, 2017

10,894

12.7

11,110－86,097100.0

94,291－

Saitama
Kanagawa Ward,
LGC-02

Yokohama Logistics

Yokohama City,

Logistics facility

Kanagawa
LGC-03

Funabashi Logistics

LGC-04

Baraki Logistics

LGC-05Tokorozawa Logistics

LGC-06

LGC-07

LGC-08

Funabashi Nishiura
Logistics I
Funabashi Nishiura
Logistics II
Matsubushi Logistics

Funabashi City,
Chiba
Ichikawa City,
Chiba
Tokorozawa City,
Saitama

Kitakatsushika,
SaitamaHotel

Subtotal
HTL-01R&B Hotel Umeda East

HTL-02

Smile Hotel Namba

HTL-03

Kita Ward,
Osaka City, Osaka
Naniwa Ward,
Osaka City, Osaka

BEST WESTERN Tokyo

Edogawa Ward,

Nishikasai

Tokyo
Tsurumi Ward,

HTL-04

BEST WESTERN Yokohama

Yokohama City,
Kanagawa

Subtotal
Total(Note 1) “Property no.” is that assigned to SAR’s investment assets by categorizing into office (OFC), retail facility (RTL), residence (RSC), logistics
facility (LGC) and hotel (HTL), and numbering in order by category. The same shall apply hereinafter.
(Note 2) “Location” is the smallest independent administrative district in which each investment asset is located.
(Note 3) “Acquisition price” indicates, with the exception of Minami-Azabu Shibuya Building, the sale and purchase price stated in the sale andpurchase agreement for the investment asset. The sale and purchase price do not include consumption tax and local consumption tax.
However, in the case of Minami-Azabu Shibuya Building, since the price for each investment asset is not set in the sale and purchaseagreement, the total sale and purchase price is divided proportionally based on the ratio of the appraisal value of the properties at the timeof acquisition and indicated as the acquisition price.
(Note 4) “Share of investment” is the acquisition price of the investment asset expressed as a percentage of the sum total amount of acquisition price,rounded to the first decimal place.
(Note 5) Appraisals are entrusted to Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute and The Tanizawa Sogo Appraisal co., Ltd. andreal estate appraisal values are the opinions of value stated in the real estate appraisal report with July 31, 2018 as the date of value, eachrounded to the nearest million yen. For details, please refer to “ (d) Summary of appraisal report.”

－

27 －

(b) Portfolio Summarya.

By Geographic Area
Geographic area

Acquisition price(million yen)

Share
(%)
(Note 1)

Greater

5 central wards of Tokyo (Note 2)

18,313

21.3

Tokyo

Other areas in Greater Tokyo

50,68958.9

80.1

Other than Greater Tokyo

17,095

19.9

Total

86,097100.0(Note 1) “Share” is calculated on an acquisition price basis, rounded to the first decimal place. Accordingly, the shares may
not add up to 100%. The same shall apply hereinafter in “c. By Asset Type (Use).”(Note 2) “5 central wards of Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards. The same shall apply
hereinafter.
(a) OfficeGeographic area
GreaterTokyo

Acquisition price(million yen)

Share
(%)

5 central wards of Tokyo

9,953

37.5

Other areas in Greater Tokyo

6,320

23.8

61.4

Other than Greater Tokyo

10,236

38.6

Total

26,509100.0(b) Residence
Geographic area

Acquisition price(million yen)

Share
(%)

Greater

5 central wards of Tokyo

8,360

47.1

Tokyo

Other areas in Greater Tokyo

6,341

35.7

82.9

Other than Greater Tokyo

3,040

17.1

Total

17,741

100.0(c) Logistics facility
Geographic area
GreaterTokyo

Acquisition priceShare(million yen)

(%)
－

－

30,953100.0

5 central wards of Tokyo

100.0
Other areas in Greater Tokyo－－

30,953

100.0

Other than Greater Tokyo
Total

－

28 －

(d) Hotel
Acquisition price(million yen)

Geographic areab.

Greater

5 central wards of Tokyo

Tokyo

Other areas in Greater Tokyo

－

－

7,075

64.9

64.9

Other than Greater Tokyo

3,819

35.1

Total

10,894100.0

By Size
Acquisition price

Share
(%)

Number ofproperties

5 billion yen or more

(Note)

517.2

1 billion yen or more
but less than 5 billion yen

23

79.3

Less than 1 billion yen

1

3.4

Total

29

100.0

but less than 10 billion yen(Note)
c.

Share
(%)

“Share” is calculated on a number of properties basis.

By Asset Type (Use)Use

Number of

Acquisition priceShareproperties(million yen)(%)

Office926,50930.8

Residence

8

17,741

20.6

Logistics facility

830,953

36.0

Hotel

4

10,894

12.7

Total

29

86,097

100.0

－

29 －

(c) Status of Leasing

Propertyno.

OFC-01

OFC-03

OFC-04

Property nameMinami-Azabu Shibuya
Building
Honmachibashi Tower
Nishi-Shinjuku Matsuya
Building

OFC-05Alphabet Seven

OFC-06

Shibuya MK Building

OFC-07

Hakata-eki Higashi 113
Building

Number ofConstruction

tenants

completion(Note 1)

June 1993

55

February 2010

(Note 7)

Operating

Security andrevenueguarantee

from leasing

deposits(thousand(thousand

yen)

yen)

(Note 2)

(Note 3)

Leased area Leasable area
(m2)

(m2)

(Note 4)(Note 5)

Occupancy
rate(%)(Note 6)

94,929110,427

3,263.08

3,263.08

100.0

216,674

198,451

10,489.58

10,489.58

100.0

May 1987

10

98,436

110,056

3,521.03

3,521.03

100.0

January 1990

975,406

95,0752,464.59

2,464.59

100.0

July 1993

4

75,392

99,047

1,612.88

1,612.88

100.0

October 1987

34

75,78496,904

3,596.71

3,596.71

100.0

OFC-08Asahi Building

November 1994

21

218,872

267,533

8,672.01

8,672.01

100.0

OFC-09Hakata-eki East Place

February 1986

17

100,791

62,367

4,067.77

4,632.70

87.8

July 1992

3

45,084

83,364

1,911.84

1,911.84

100.0

November 1999

43

54,003

11,4091,956.15

1,986.76

98.5

65

189,587

81,8355,632.33

5,977.18

94.2

OFC-10Nihonbashi Hamacho Park
Building

RSC-01

Urban Park Azabujuban

RSC-02

Urban Park Daikanyama

RSC-04

Urban Park Shin-Yokohama

May 2009

68

76,112

16,7793,924.20

3,989.11

98.4

RSC-05

Urban Park Namba

January 2013

114

51,932100

2,521.45

2,584.81

97.5

RSC-06

Urban Park Gokokuji

February 1990

107

51,645

8,651

1,947.66

1,964.04

99.2

RSC-07

Urban Park Kashiwa

August 1997

39

36,332

8,037

2,743.68

2,954.77

92.9

RSC-08

Urban Park Ryokuchi Koen

March 1989

53

54,661

8,186

4,783.38

5,508.94

86.8

RSC-09Urban Park Koenji

October 1987

72

35,2415,854

1,252.73

1,365.48

91.7

LGC-01

Iwatsuki Logistics

October 20143

200,802

97,01430,190.81

30,190.81

100.0

LGC-02

Yokohama Logistics

October 1994

1

18,142.08

100.0

38,086.56

91.6

12,185.78

100.0① November 1982
② May 2006

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)Building 1:
LGC-03

Funabashi Logistics

September 1992

4

Building 2:

255,664

83,42634,901.67

August 1997

LGC-04

Baraki Logistics

August 2015

2

－

30 －

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)

LGC-05

LGC-06

Tokorozawa Logistics

Funabashi Nishiura Logistics I

April 1999

1

October 1985

1

Warehouse: March
LGC-07

Funabashi Nishiura Logistics
II

1991
Factory: May 1972

1

Office: May 1986

LGC-08

Matsubushi Logistics

March 1997

1

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)5,994.75

100.0

14,018.82

100.0

6,315.87

100.0

19,833.47

100.0

HTL-01R&B Hotel Umeda East

October 2000

1

65,572

73,6153,940.93

3,940.93

100.0

HTL-02

Smile Hotel Namba

February 2008

1

43,197-

1,711.42

1,711.42

100.0

March 1991

1

98,82984,6005,293.88

5,293.88

100.0

September 1987

1

80,39380,4004,686.09

4,686.09

100.0

687

2,791,975

1,959,368

221,576.64

226,895.97

97.7

HTL-03

HTL-04

BEST WESTERN Tokyo
Nishikasai
BEST WESTERN Yokohama
Total (29 properties)(Note 1) “Number of tenants” is the number of tenants (excluding parking) under the lease agreement stated in the leaseagreement for the investment asset as of July 31, 2018. If a single tenant is leasing multiple rental units in an
investment asset, the tenant is counted as 1 tenant for the concerned investment asset. If a single tenant is leasing
rental units across multiple investment assets, the tenant is counted as separate tenants and the sum total numberof tenants is stated in the total column. Furthermore, in cases where a pass-through type master lease agreement
under which rent from end-tenants is received as is in principle (“pass-through type master lease”) has beenconcluded for the concerned investment asset, the total number of end-tenants is stated. In cases where a master
lease agreement agreeing to the effect that the rent under the master lease agreement shall be a fixed rent (“rentguaranteed type master lease”) has been concluded for the concerned investment asset, the number of tenants is 1
and the sum total of these is stated.
(Note 2) “Operating revenue from leasing” is rental revenue, common area maintenance revenue, parking revenue and otherrevenue from real estate held generated during the fiscal period under review (including other lease businessrevenue).
(Note 3) “Security and guarantee deposits” is the sum total amount of tenant security and guarantee deposits required basedon the lease agreement (including deposits based on parking, antenna, rooftop and other agreements; the amountafter depreciation) for the investment asset as of July 31, 2018 (limited to those occupied as of said date).
Furthermore, in cases where a pass-through type master lease agreement has been concluded for the concerned
investment asset, it is the sum total amount of tenant security and guarantee deposits under lease agreements
concluded with end-tenants.
(Note 4) “Leased area” is the sum total of the leased area stated in the lease agreement for the investment asset as of July
31, 2018. Furthermore, in cases where a master lease agreement has been concluded for the concerned investment
asset, it is the sum total of the leased area under lease agreements concluded with end-tenants for properties undera pass-through type master lease, and it is the leased area under the master lease agreement for properties undera rent-guaranteed type master lease.
(Note 5) “Leasable area” is the floor area regarded as being available for leasing based on the lease agreement or building
drawing, etc. of the building for the investment asset as of July 31, 2018.
(Note 6) “Occupancy rate” is the ratio of leased area to leasable area for the investment asset as of July 31, 2018, rounded to
the first decimal place. In addition, in the total column, it is the ratio of the sum total of leased area to the sum totalof leasable area for the investment asset, rounded to the first decimal place.
(Note 7) Of the tenants of the property, a single company leases all 36 units of the residential portion, of which 30 units areunder a rent-guaranteed type master lease agreement and 6 units are under a pass-through type master lease－31 －agreement.
(Note 8) In the table, “Number of tenants,” “Security and guarantee deposits,” “Leased area” and “Occupancy rate” are basedon lease agreements valid as of July 31, 2018, even if there is a notice of cancellation or termination of leaseagreements with end-tenants or unpaid rent.
(Note 9) Not disclosed, because consent for disclosure has not been obtained from the tenants.
(d) Summary of Real Estate Appraisal Report, etc.
Summary of appraisal report
Income approachAppraisal
Appraisal
Property

value

Use

Property nameAppraisal
Direct capitalization

firm

no.

method(million yen)

(Note 1)
(Note 2)DCF
NOI

NOI yield(million yen)(%)

(Note 3)(Note 4)

methodIndicated

Indicated

Discount

Terminal

value

rate

cap rate(million yen)

(%)

(%)

Cap ratevalue(%)(million yen)

Office

OFC-01

Minami-Azabu Shibuya Building

Daiwa

3,150

3,250

4.0

3,100

3.6

4.2

145

4.9

OFC-03

Honmachibashi Tower

Daiwa

6,940

7,110

4.2

6,870

4.0

4.4

312

5.2

OFC-04

Nishi-Shinjuku Matsuya Building

Daiwa

2,430

2,430

4.1

2,430

3.9

4.3

112

6.4

OFC-05Alphabet Seven

JREI

2,390

2,430

4.0

2,350

3.8

4.2

101

5.9

OFC-06

Shibuya MK Building

JREI

2,890

2,940

3.8

2,830

3.6

4.0

115

5.6

OFC-07

Hakata-eki Higashi 113 Building

Daiwa

2,090

2,170

4.6

2,060

4.4

4.8

111

5.9

OFC-08Asahi Building

JREI

7,090

7,130

3.9

7,050

3.6

4.0

308

4.9

OFC-09Hakata-eki East Place

Daiwa

2,480

2,520

4.7

2,460

4.5

4.9

119

5.2

Daiwa

1,520

1,550

4.3

1,510

4.1

4.5

68

4.7

30,98031,530-30,660

-

-

1,393

5.3

Nihonbashi Hamacho Park
OFC-10

Building
Subtotal

Residence

RSC-01

Urban Park Azabujuban

JREI

2,230

2,260

3.9

2,190

3.7

4.1

91

4.4

RSC-02

Urban Park Daikanyama

JREI

7,500

7,640

3.8

7,360

3.6

4.0

302

4.8

RSC-04

Urban Park Shin-Yokohama

Daiwa

2,580

2,610

4.5

2,560

4.3

4.7

121

4.8

RSC-05

Urban Park Namba

Daiwa

1,610

1,630

4.8

1,600

4.6

5.0

80

5.4

RSC-06

Urban Park Gokokuji

JREI

1,510

1,530

4.3

1,480

4.1

4.5

73

5.0

RSC-07

Urban Park Kashiwa

Tanizawa

1,190

1,220

4.6

1,170

4.7

4.8

60

5.0

RSC-08

Urban Park Ryokuchi Koen

Tanizawa

1,570

1,590

4.9

1,560

5.0

5.1

88

5.7

RSC-09Urban Park Koenji

Tanizawa

1,170

1,200

4.1

1,160

4.2

4.3

56

4.8

19,36019,680-19,080

-

-

872

4.9

LGC-01

Iwatsuki Logistics

Daiwa

7,140

7,250

4.5

7,090

4.3

4.7

333

4.8

LGC-02

Yokohama Logistics

Daiwa

4,060

4,120

4.3

4,030

4.1

4.5

205

5.8

LGC-03

Funabashi Logistics

Daiwa

8,650

8,760

4.3

8,600

4.1

4.5

429

5.5

LGC-04

Baraki Logistics

Tanizawa

4,930

5,050

4.1

4,880

4.0

4.3

209

4.4

LGC-05Tokorozawa Logistics

JREI

1,350

1,350

5.1

1,340

4.7

5.4

74

5.7

LGC-06

Funabashi Nishiura Logistics I

Daiwa

3,020

3,060

4.6

3,000

4.4

4.8

154

5.1

LGC-07

Funabashi Nishiura Logistics II Daiwa

841

837

5.7

843

5.5

5.9

58

7.1

LGC-08

Matsubushi Logistics

Subtotal

Logistics
facility

JREI

Subtotal

2,870

5.1

2,830

4.6

5.4

151

5.5

33,297-32,613

-

-

1,612

5.2

HTL-01R&B Hotel Umeda East

Daiwa

2,310

2,330

4.6

2,300

4.4

4.8

115

5.6

HTL-02

Smile Hotel Namba

Daiwa

1,720

1,740

5.1

1,710

4.9

5.3

98

5.6

JREI

3,830

3,890

4.5

3,770

4.3

4.7

182

4.8

BEST WESTERN Tokyo
Hotel

2,850
32,841

HTL-03
HTL-04

Nishikasai
BEST WESTERN Yokohama

3,250

3,260

4.6

3,230

4.3

4.7

155

4.8

Subtotal

11,110

11,220-11,010

-

-

550

5.0

Total

94,291

95,727-93,363

-

-

4,427

5.1

JREI

－

32 －

(Note 1) “Appraisal firm” is shown as “Daiwa” to stand for Daiwa Real Estate Appraisal Co., Ltd., “JREI” to stand for Japan Real
Estate Institute and “Tanizawa” to stand for The Tanizawa Sogo Appraisal co., Ltd.
(Note 2) “Appraisal value” is as of July 31, 2018 as the date of value.
(Note 3) “NOI” is the net operating income by the direct capitalization method stated in the appraisal report, rounded to thenearest million yen.
(Note 4) “Appraisal NOI yield” is based on the net operating income by the direct capitalization method stated in the appraisal
report and expressed as a percentage of acquisition price, rounded to the first decimal place.
(e) Information on Major Real Estate Properties
Of investment assets, the following are those that fall under the category of major real estate properties (thosebuildings/facilities pertaining to land recognized to be used collectively of which total rental revenue accounts for 10% or moreof the sum total of total rental revenue of investment assets) and the top five properties in terms of total rental revenue as ofJuly 31, 2018.
Changes in occupancy rate (%) (Note 2)
July 31, 2016

January 31, 2017

July 31, 2017

January 31, 2018

July 31, 2018

Funabashi Logistics

91.6

91.6

91.6

91.6

91.6

Asahi Building

93.3

96.4

100.0

100.0

100.0

Iwatsuki Logistics

100.0

100.0

100.0

100.0

100.0

Honmachibashi
Tower

100.0

100.0

100.0

100.0

100.0

93.2

95.5

99.1

98.0

94.2

Urban Park
Daikanyama(Note 1) There is no property that falls under the category of major real estate properties as defined above as of July 31, 2018.
(Note 2) “Changes in occupancy rate” is the ratio of leased area to leasable area for the investment asset as of the record
date, rounded to the first decimal place.

－

33 －

(f) Top 10 End-Tenants in Terms of Leased Area
The following table lists the tenants ranking in the top ten tenants in terms of leased area of investment assets.
Leased area
Name of tenant

Name of property occupied(m2)(Note 1)

As a percentage of
total leasable area(%)
(Note 2)

1

Not disclosed (Note 3)

Iwatsuki Logistics

Not disclosed (Note 3)

13.1

2

Not disclosed (Note 3)

Funabashi Logistics

Not disclosed (Note 3)

9.6

3

Tokyo Nohin Daiko

Matsubushi Logistics

19,833.47

8.7

4

Not disclosed (Note 3)

Yokohama Logistics

Not disclosed (Note 3)

8.0

5

Not disclosed (Note 3)

Funabashi Nishiura Logistics I

Not disclosed (Note 3)

6.2

6

Rembrandt Inn

BEST WESTERN Tokyo Nishikasai
BEST WESTERN Yokohama

9,979.97

4.4

7

Not disclosed (Note 3)

Funabashi Logistics

Not disclosed (Note 3)

3.2

8

Not disclosed (Note 3)

Funabashi Nishiura Logistics II

Not disclosed (Note 3)

2.8

9

Not disclosed (Note 3)

Baraki Logistics

Not disclosed (Note 3)

2.7

10

Not disclosed (Note 3)

Baraki Logistics

Not disclosed (Note 3)

2.7

139,181.56

61.3

Total of the top 10 tenants(Note 1) “Leased area” is the sum total of the leased area stated in the lease agreement for the investment asset as of July
31, 2018.
(Note 2) “As a percentage of total leasable area” is the area leased to the tenant expressed as a percentage of the sum totalof leasable area of all investment assets, rounded to the first decimal place.
(Note 3) Not disclosed, because consent for disclosure has not been obtained from the end-tenants, etc.

－

34 －

(g) Capital Expenditures
a. Schedule of Capital Expenditures for the 6th fiscal period
The following are the principal capital expenditures arising from renovation construction work, etc. currently planned
for the assets held by SAR as of July 31, 2018. Please note that the expected construction amounts include portions
that are expensed as a separate account item of accounting costs.

b.

Name of real estate, etc.
(Location)

PurposeBEST WESTERN Tokyo Nishikasai

Upgrading of automatic fire

From: Jan. 2019

(Edogawa Ward, Tokyo)

alarm system

To:

Asahi Building(Yokohama City, Kanagawa)

Upgrading of air-conditioning
systemShibuya MK Building(Shibuya Ward, Tokyo)

Refurbishment of exteriorwall and front entrance eaves

Scheduled period

Estimated construction costs(thousand yen)Amount of Total
Total
payment amountamountduringalready
periodpaid
27,000－－

From: Dec. 2018
To:
Jan. 2019

20,000－－

From: Nov. 2018
To:
Jan. 201917,790－－Feb. 2019

Capital Expenditures during the 5th fiscal period
The following summarizes the primary construction work that constitutes capital expenditures implemented for theassets held by SAR as of July 31, 2018 during the 5th fiscal period. Capital expenditures for the 5th fiscal periodamounted to 281,180 thousand yen and, when combined with the 68,389 thousand yen in repair expenses charged to
the 5th fiscal period expenses, totals 349,570 thousand yen in construction work implemented.
Name of real estate, etc.
(Location)

Purpose

PeriodYokohama Logistics(Yokohama City, Kanagawa)Expansion of air-conditioning
system on the 2nd and 3rd floor

From:Apr.2018
To: Jun.2018

Nishi-Shinjuku Matsuya
Building

Upgrading of elevator(Shibuya Ward, Tokyo)

From:Jan.2018
To:

Mar.2018

Construction costs(thousand yen)
82,36420,806

Asahi Building(Yokohama City, Kanagawa)

Conservation work of multistory
parking lot

From:Jun.2018
To: Jun.2018

20,006

Asahi Building(Yokohama City, Kanagawa)

Upgrading of air-conditioning
system on the 1st and 5th floors

From:Mar.2018
To: Apr.2018

17,948－－140,054

OthersTotal－

281,18035 －(h) Individual Property Income Statements(Unit: thousand yen)

Property no.
Property name

OFC-01

OFC-03

OFC-04

OFC-05

Minami-Azabu

Honmachibashi

Nishi-Shinjuku

Shibuya Building

Tower

Matsuya Building

OFC-06
ShibuyaAlphabet Seven

MK Building① Total operating revenue
from real estate leasing

94,929216,674

98,43675,40675,392

Lease business revenue

88,351

190,425

87,42071,05370,435

Other lease business revenue

6,577

26,24911,015

4,352

4,957

24,52762,89934,096

18,541

18,507

5,707

13,860

6,549

4,916

4,819

② Total operating expenses
from real estate leasing
Management fee
Trust fee

398

396

396

396

346

Utilities expenses

6,793

25,070

7,251

4,333

3,288

Insurance premium

114

352

126

98

44

Repair expenses

969

582

1,520

1,205

4,825

Property taxes

4,575

19,767

3,434

6,219

4,316

Other

5,969

2,869

14,817

1,372

865

③ NOI
(①－②)

70,401

153,775

64,34056,86456,885④ Depreciation

11,45844,986

8,043

4,517

3,108

⑤ Operating income (loss)
from real estate leasing(③－④)

58,942

108,788

56,29752,34753,777⑥ Capital expenditures

2,897

2,241

22,451

2,031

10,809

⑦ NCF
(③－⑥)

67,504

151,533

41,88954,83346,0762,996,782

5,985,784

1,838,421

1,799,904

2,092,317

Book value at end of the period

Property no.

Property name

OFC-07

OFC-08

Hakata-eki Higashi
113 Building

OFC-09Asahi Building

OFC-10Hakata-eki
East Place

RSC-01

Nihonbashi

Urban Park

Hamacho Park

Azabujuban

Building① Total operating revenue
from real estate leasing

75,784

218,872

100,791

45,08454,003

Lease business revenue

70,325202,101

81,50845,08452,538Other lease business revenue

5,459

16,771

19,282-

1,465

22,616

61,82329,009

10,16011,758

7,719

15,609

7,930

769

2,085

② Total operating expenses
from real estate leasing
Management fee
Trust fee
Utilities expenses

346

396

396

394

346

6,454

17,292

8,124

-

503

Insurance premium

121

351

165

121

56

Repair expenses

1,251

6,007

4,919

63

3,021

Property taxes

5,294

15,995

6,582

0

2,784

Other

1,428

6,169

890

8,811

2,959

③ NOI
(①－②)

53,168157,049

71,781

34,92442,245④ Depreciation

5,995

24,244

6,528

2,837

4,749

⑤ Operating income (loss)
from real estate leasing(③－④)

47,172

132,805

65,25332,08737,496⑥ Capital expenditures

2,671

45,286

8,905

-

3,917

⑦ NCF
(③－⑥)

50,496

111,763

62,87634,92438,327

6,375,583

2,313,358

1,467,306

2,098,058

Book value at end of the period

1,954,787－

36 －(Unit: thousand yen)

Property no.
Property name

RSC-02

RSC-04

RSC-05

RSC-06

RSC-07

Urban Park

Urban Park

Urban Park

Urban Park

Urban Park

Daikanyama

Shin-Yokohama

Namba

Gokokuji

Kashiwa① Total operating revenue
from real estate leasing

189,587

76,112

51,932

51,64536,332

Lease business revenue

181,165

73,36749,37848,48835,269

8,421

2,745

2,553

3,156

1,063

34,81919,718

11,951

21,743

11,133

8,594

4,771

2,566

3,852

1,851

346

346

346

396

346

4,630

911

482

2,589

799

Other lease business revenue② Total operating expenses
from real estate leasing
Management fee
Trust fee
Utilities expenses
Insurance premium

193

147

62

52

83

Repair expenses

4,422

2,580

1,680

4,268

4,318

Property taxes

11,218

4,719

2,791

1,838

2,954

Other

5,413

6,241

4,021

8,745

779

③ NOI
(①－②)

154,767

56,39339,98029,901

25,198④ Depreciation

12,233

16,442

7,515

4,332

6,763

⑤ Operating income (loss)
from real estate leasing(③－④)

142,533

39,95032,46425,56918,435

243--

21,126

12,162

154,523

56,39339,9808,775

13,035

6,408,080

2,562,504

1,535,269

1,512,724

1,257,192⑥ Capital expenditures
⑦ NCF
(③－⑥)
Book value at end of the period

Property no.
Property name

RSC-08
Urban Park
Ryokuchi Koen

RSC-09LGC-01

LGC-02

LGC-03

Urban Park Koenji

Iwatsuki Logistics

Yokohama Logistics Funabashi Logistics① Total operating revenue
from real estate leasing

54,66135,241200,802

255,664

Lease business revenue

51,44331,801

187,713240,079

Other lease business revenue

3,217

3,439

13,08815,585

15,07011,59933,79955,782

2,201

1,741

5,987

11,908② Total operating expenses
from real estate leasing
Management fee
Trust fee

344

394

346

396

Utilities expenses

1,967

1,321

13,08814,156

Insurance premium

116

36

271

Repair expenses

5,221

5,719

70

Property taxes

10-

13,835390
Not disclosed(Note)

5,764
22,709

Other

5,208

2,387

200

455

③ NOI
(①－②)

39,59023,641167,002

199,882④ Depreciation

6,864

2,416

46,467

26,695⑤ Operating income (loss)
from real estate leasing(③－④)

32,726

21,225120,535

173,187⑥ Capital expenditures

5,918

-

1,955

4,744

⑦ NCF
(③－⑥)

33,672

23,641

165,046

195,138

1,613,098

1,194,570

6,786,942

Book value at end of the period(Note) Not disclosed, because consent for disclosure has not been obtained from the tenants.
－

37 －3,824,231

7,886,635

(Unit: thousand yen)

Property no.
Property name

LGC-04

LGC-05

Baraki Logistics

LGC-06

LGC-07

Tokorozawa Logistics Funabashi Nishiura

LGC-08

Funabashi Nishiura Matsubushi Logistics

Logistics I

Logistics II① Total operating revenue
from real estate leasing
Lease business revenue
Other lease business revenue② Total operating expenses
from real estate leasing
Management fee
Trust fee
Utilities expenses
Insurance premiumNot disclosed

Not disclosed

Not disclosed

Not disclosed

Not disclosed

Repair expenses(Note)(Note)(Note)(Note)(Note)

Property taxes
Other
③ NOI

(①－②)

④ Depreciation⑤ Operating income (loss)
from real estate leasing(③－④)⑥ Capital expenditures
⑦ NCF

(③－⑥)

Book value at end of the period

4,706,630

1,347,537

2,970,312

839,539

2,775,416(Note) Not disclosed, because consent for disclosure has not been obtained from the tenants.
Property no.
Property name

HTL-01R&B Hotel Umeda East

HTL-02

HTL-03

HTL-04

Smile HotelBEST WESTERN Tokyo

BEST WESTERN

Namba (Note)

Nishikasai (Note)

Yokohama① Total operating revenue
from real estate leasing

65,572

43,197

98,82980,393

Lease business revenue

65,572

43,197

98,82980,393

-

-

-

-

7,076

4,530

10,768

8,428Management fee

742

660

1,200

1,200

Trust fee

Other lease business revenue② Total operating expenses
from real estate leasing

346

544

396

396

Utilities expenses

8

-

-

-

Insurance premium

111

53

124

105

Repair expenses

410

755

1,070

2,042

Property taxes

5,431

2,283

7,955

4,659

Other

25

234

22

24

58,496

38,66788,06071,965④ Depreciation

9,203

12,064

9,781

11,283⑤ Operating income (loss)
from real estate leasing(③－④)

49,293

26,602

78,27860,682

-

5,279

4,913

9,757

③ NOI

(①－②)

⑥ Capital expenditures
⑦ NCF

(③－⑥)

58,49633,387

83,146

62,207

Book value at end of the period

2,125,948

1,717,372

3,857,869

3,264,488(Note) Operating revenue from real estate leasing of Smile Hotel Namba includes variable rents of 25,571 thousand yen andoperating revenue from real estate leasing of Best WESTERN Tokyo Nishikasai includes variable rents of 14,229 thousand
yen.
－

38 －

(Unit: thousand yen)

Property name

OfficeResidence

Logistics facility

HotelPortfolio

Total

total

total

total

total

① Total operating revenue
from real estate leasing

1,001,373

549,514953,094

287,993

2,791,975

Lease business revenue

906,707523,452

912,876

287,993

2,631,029

Other lease business revenue

94,665

26,062

40,217-

160,946

282,181

137,794

157,170

30,803607,950

Management fee

67,881

27,66530,961

3,802

130,310

Trust fee

3,467

2,869

3,015

1,684

11,036

Utilities expenses

78,60913,204

39,1748

130,997

Insurance premium

1,496

749

1,406

394

4,046

② Total operating expenses
from real estate leasing

Repair expenses

21,34531,232

11,534

4,277

68,389Property taxes

66,18526,31762,936

20,329

175,769

Other

43,19535,7568,141

306

87,399

③ NOI
(①－②)

719,191

411,720795,923

257,189

2,184,025④ Depreciation

111,719

61,318140,437

42,333355,808⑤ Operating income (loss)
from real estate leasing(③－④)

607,472

350,401

655,486

214,856

1,828,216⑥ Capital expenditures

97,29343,369120,566

19,951

281,180

⑦ NCF
(③－⑥)

621,898

368,350

675,356

237,238

1,902,844

26,824,245

18,181,497

31,137,246

10,965,679

87,108,669

Book value at end of the period－

39 －