September 14, 2020

For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive officer(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato
President and CEO
Contact: Akiko Kanno
Director and CFO
TEL: +81-3-5425-1340

Notice Concerning Status of a Tenant of a Hotel Property (follow-up report)- Signing of Memorandum Agreement regarding Hotel Operations with KACHIKAIHATSU Co. Ltd.With respect to “HOTEL WBF ART STAY NAMBA” (hereinafter, the “Property”) which is an asset managed byStar Asia Investment Corporation (“SAR”) as disclosed in the press release dated April 27, 2020 entitled “NoticeConcerning Status of a Tenant of a Hotel Property”, SAR has entered into a “Memorandum Agreement regarding
Hotel Operations” (hereinafter the “Memorandum Agreement”) towards signing of a lease agreement for theProperty with KACHIKAIHATSU Co. Ltd. (TSE 2nd Section: Code No. 3040; hereinafter referred to as“KACHIKAIHATSU”), a member of Star Asia Group which falls under an interested person of Star Asia Investment
Management Co., Ltd. (“Asset Manager”), the asset manager for SAR , as one of the new tenant candidates.
Details are as follows.
1.

Signing of the Memorandum Agreement(1)
Background leading to signing of the Memorandum Agreement
SAR and the Asset Manager have determined, as a result of considering various options for utilizing theProperty, that the best option would be to invite a new operator for the Property as a hotel. Currently, SAR andthe Asset Manager are in negotiations with multiple new operator candidates (tenant candidates), and intend toselect an operator which is believed to contribute most to unitholders’ interests. One of the multiple operator
candidate companies is KACHIKAIHATSU which is a member of Star Asia Group, and today a Memorandum
Agreement was signed with KACHIKAIHATSU in order to accelerate discussions with the firm towards signing of alease agreement. KACHIKAIHATSU’s core business is hotel operations and management, and hotel development,
and has operational experience of 19 hotels including its affiliate companies (as of September 14, 2020), and isbelieved to be a tenant candidate for the Property. Under the Memorandum Agreement, the Asset Manager is
not prevented from continuing negotiations with tenant candidates other than KACHIKAIHATSU, and the AssetManager intends to also continue negotiations with other tenants concurrently with negotiating withKACHIKAIHATSU.
(2)

Summary of the Memorandum Agreement
Contract counterparty:
KACHIKAIHATSU CO. LTD.
Contract signing date:
September 14, 2020
Contents of agreement:
Agreement to proceed with negotiations towards signing of a leaseagreement for the Property.

1(3) Company Overview of KACHIKAIHATSU Co. Ltd.
NameKACHIKAIHATSU CO. LTD. (the “Company”)
Location
1-12-3, Iwamotocho, Chiyoda-ku, Tokyo, Japan
Representative
Atsuo Umeki
Main Business Description
Hotel business, real estate business
Capital99 million yen (*1)
Established
September 20, 1912
Net Asset
651 million yen (*1)
Total Asset
3,990 million yen (*1)
Major shareholder and ratio
Star Asia Opportunity Ⅲ LP 75.5％of shareholding
Relationship with SAR or the Asset Manager
Capital Relationship
There is no direct capital relationship between SAR / the Asset Manager
and the Company. However, the Company is a subsidiary etc. of theparent company etc. of the Asset Manager. Furthermore, a fundmanaged by the parent company of the Asset Manager holds 75.5% of
the shares of the Company.
Personnel Relationship
There is no special personnel relationship worth noting between SAR /the Asset Manager and the Company. However, 5 persons have been
appointed as directors of KACHIKAIHATSU from the sponsor group.
Business Relationship
There is no special business relationship worth noting between SAR / theAsset Manager and the Company. However, with respect to HOTEL WBF
ART STAY NAMBA which is a hotel owned by SAR, the “Memorandum
Agreement regarding Hotel Operations” has been signed today, andnegotiations will proceed towards signing of a lease agreement.
Related party or not
The Company falls under an interested party etc. as prescribed under theInvestment Trust Law, and an interested party as prescribed under the“Interested Party Transaction Rules” which are voluntary rules
established by the Asset Manager in order to prevent conflicts of interest
related to SAR’s asset management. Going forward, when deciding ontransactions, the Asset Manager will conduct deliberations and makeresolutions pursuant to such rules.
(Note) The above is written based on information as of March 31, 2020,

2.

Future Outlook
The signing of the Memorandum Agreement will have no impact on SAR’s management status.

* Star Asia Investment Corporation website address: http://starasia-reit.com/en/

This is an English translation of the announcement in Japanese dated September 14, 2020.However, no assurance
or warranties are given for the completeness or accuracy of this English translation.

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