February 1, 2023
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Director(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato
President and CEO
Contact: Akiko Kanno
Director and CFO
TEL: +81-3-5425-1340
Notice Concerning Acquisition of Mezzanine Loan Debt
Star Asia Mezzanine Loan Debt Investment Series 8(Class A Beneficial Interest and Class B Beneficial Interest)

Star Asia Investment Corporation (“SAR”) announces that Star Asia Investment Management Co., Ltd. (the “AssetManager”), to which SAR entrusts the management of its assets, has decided today to invest in mezzanine loan
debt (the acquisition of mezzanine loan debt is hereinafter referred to as the “Acquisition”). Details are as follows.
The Acquisition is the 8th mezzanine loan debt investment transaction for SAR, and is to be made leveraging onStar Asia Group’s deal sourcing and structuring cooperation, as well as support provided by Tokyo CapitalManagement Co. Ltd. (hereinafter referred to as “TCM”) who is a sub-sponsor of SAR together with NIPPONKANZAI Co., Ltd. through the provision of a bridge scheme etc.
The proceeds for the Acquisition are expected to be appropriated from the assignment proceeds of the Asset tobe Transferred as described in the announcement today entitled “Notice Concerning the Transfer of Trust Beneficial
Interests of Domestic Real Estate (Funabashi Hi-Tech Park Factory II)”, and such assignment and the Acquisition arecollectively positioned as the “8th Asset Replacement”.
SAR regards such continued investments in mezzanine loan debt as a part of the active management strategy
adopted by SAR and the Asset Manager, and is also aligned with SAR’s differentiation strategy in pursuit ofmaximization of unitholder value. Going forward, SAR will continue to consider mezzanine loan debt investment
opportunities which are expected to have the effect of increasing distributions per unit.
1. Overview of the Acquisition(1) Asset to be acquired(2) Name of asset to beacquired(3) Trustee of the asset to beacquired(4) Trust period of the asset tobe acquired(5) Face Amount of the
Beneficial Interests

The Trust Beneficial Interests:
The Class A Beneficial Interest (hereinafter referred to as the “Class A
Beneficial Interest”) which corresponds to the Class A Bonds issued by
Centurion Two Godo Kaisha (hereinafter referred to as the “GK”) whose
main underlying asset (Note 1) is CENTURION HOTEL GRAND AKASAKA(hereinafter referred to as the “Underlying Asset”), and the Class B
Beneficial Interest which corresponds to the Class B Bonds issued by the
GK (hereinafter referred to as the “Class B Beneficial Interest”, and theClass A Beneficial Interest and the Class B Beneficial Interest shall becollectively referred to as the “Beneficial Interests”).
Star Asia Mezzanine Loan Debt Investment Series 8
JSF Trust and Banking Co., Ltd.
From November 29, 2022 to the scheduled redemption date or the final
redemption date
Class A Beneficial Interest: 430,000,000 yen
Class B Beneficial Interest: 340,000,000 yen
Total:
770,000,000 yen

1(6) Acquisition price of the
Beneficial Interests(7) Expected Dividend Yield(8) LTV against
Underlying Assets(9) Planned signing date of the
Beneficial Interest
Sale and Purchase Agreement(10) Planned acquisition date of
the Beneficial Interests

Class A Beneficial Interest: 430,000,000 yen (Note 2)Class B Beneficial Interest: 340,000,000 yen (Note 3)
Total:
770,000,000 yen (excluding acquisition expenses)
Class A Beneficial Interest: Base rate (Note 4) + 5.30%
Class B Beneficial Interest: Base rate (Note 4) + 7.30%
Not disclosed (Note 5)
February 1, 2023

Class A Beneficial Interest: August 31, 2023 or such other date to be
separately agreed by SAR and the seller.
Class B Beneficial Interest: February 20, 2023
(11) Scheduled dividend
The business day immediately following last day of February, May, August,payment dates of theNovember (Four times a year)
Beneficial Interests(The first interest payment date of the Class B Beneficial Interest is thebusiness day immediately following the last day of February 2023)(12) Scheduled redemption
Class A Beneficial Interest: November 29, 2027 (Note 6)
dateClass B Beneficial Interest: November 29, 2027 (Note 6)(13) Final redemption date
Class A Beneficial Interest: November 29, 2029 (Note 6)
Class B Beneficial Interest: November 29, 2029 (Note 6)(14) Funding for acquisition
Transfer proceeds of the Asset to be Transferred as described in theannouncement today entitled “Notice Concerning the Transfer of Trust
Beneficial Interests of Domestic Real Estate (Funabashi Hi-Tech Park
Factory II)”.
(15) Settlement method
Refer to 7. Settlement method(16) Seller
TCM(17) Overview of the structure of the Beneficial Interests
Operator: The GK＜Class A Beneficial
Interest＞
SAJP V LLC

GK
Senior loan
(Note 7)
Underlying Asset

Mezzanine BondCENTURION HOTELGRAND AKASAKA

bondholder
JSF Trust and Banking
Co., Ltd.
(Trust Account)Appraisal value
Not disclosed(Note 5)

JSF Trust and Banking Co., Ltd.
(Trust Account)(Class A Beneficial
Interest) 430 mil.
Mezzanine
Bond(Class C Beneficial
Interest)

TK (Silent partnership)
investments (Note 7)

SAR＜Class B Beneficial
Interest＞

SAJP V LLC
TCM
SAR＜Class C Beneficial
Interest＞
SAJP V LLC

Equity Interests ofPartners (Note 7)

1.

(Class B Beneficial
Interest) 340 mil.

TCM

On November 29, 2022, SAJP V LLC established at trust with itself as the trustor and the beneficiary,and JSF Trust and Banking Co. Ltd. as the trustee, and the trust account purchased the mezzanine
bonds issued by the GK and issued the Class A Beneficial Interest corresponding to the Class A Bonds,
the Class B Beneficial Interest corresponding to the Class B Bonds, and the Class C Beneficial Interest
corresponding to the Class C Bonds. SAJP V LLC is a member of Star Asia Group.

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2.

3.
4.

5.

6.

7.

On the same day, SAJP V LLC assigned the Class A Beneficial Interest and the Class B Beneficial Interest
to TCM, and TCM paid the full amount of the transfer proceeds for the Beneficial Interests to SAJP V
LLC, and acquired the Beneficial Interests.
On February 1, 2023, SAR and TCM signed the “Trust Beneficial Interest Sale and Purchase Agreement”
with respect to the Beneficial Interests.
On February 20, 2023, with respect to the Class B Beneficial Interest, SAR will pay the purchaseproceeds of 340,000,000 yen after deducting the assignment fee of 1,870,000 yen (including
consumption tax), and simultaneously receive assignment of the Class B Beneficial Interest from TCM
and succeed to the status as holder of and to the rights and obligations of the Class B Beneficial
Interest.
On August 31, 2023 or such other date to be separately agreed between SAR and TCM, SAR will pay thepurchase proceeds for the Class A Beneficial Interest of 340,000,000 yen after deducting the assignment
fee of 2,365,000 yen (including consumption tax)(provided, however, that if the transfer date is not
August 31, 2023, the assignment fee shall be recalculated and determined), and simultaneously SAR will
receive assignment of the Class A Beneficial Interest from TCM and succeed to the status as holder ofand to the rights and obligations of the Class A Beneficial Interest.
The Class A Beneficial Interest, with respect to the payment of dividends and repayment of principal,
shall be subordinated to the senior loan claims, however, shall be paid in preference to the Class B
Beneficial Interest, Class C Beneficial Interest, the TK (silent partnership) investments and equity
interests of partners of the GK. In particular, with respect to redemption of principal, even in the casewhere the value of the Underlying Asset declines, the equity interests of partners and TK investments of
the GK will bear first loss, and principal of the Class A Beneficial Interest will incur a loss for the firsttime only after the full principal amounts of the equity interests of partners and TK investments of theGK, the Class C Beneficial Interest and the Class B Beneficial Interest have been damaged and lost.
The Class B Beneficial Interest, with respect to the payment of dividends and repayment of principal,
shall be subordinated to the senior loan claims and Class A Beneficial Interest, however, shall be paid inpreference to the Class C Beneficial Interest, the TK (silent partnership) investments and equity interestsof partners of the GK. In particular, with respect to redemption of principal, even in the case where thevalue of the Underlying Asset declines, the equity interests of partners and TK investments of the GK
will bear first loss, and principal of the Class B Beneficial Interest will incur a loss for the first time only
after the full principal amounts of the equity interests of partners and TK investments of the GK and theClass C Beneficial Interest have been damaged and lost.

(18) Relationship between SAR/
the Asset Manager and theGK

Capitalrelationship
Personnel
relationship

There is no capital relationship to report between
SAR/ the Asset Manager and the GK.
There is no personnel relationship to report between
SAR/ the Asset Manager and the GK. Furthermore,* Based on information as ofthere is no personnel relationship to report between
January 31, 2023.
associated persons and associated companies of SAR/
the Asset Manager and associated persons andassociated companies of the GK.
Business
There is no business relationship to report between
relationship
SAR/ the Asset Manager and the GK. Furthermore,
there is no business relationship to report between
associated persons and associated companies of SAR/
the Asset Manager and associated persons andassociated companies of the GK.
Related party
There is no related party status to report between
status
SAR/the Asset Manager and the GK.
(Note 1) For an overview of the Collateral Asset, please refer to 2. Reason for the Acquisition <Overview ofUnderlying Asset>.
(Note 2) An amount after deducting fees related to the assignment of the Class A Beneficial Interest ( 2,365,000
yen (including consumption tax) will be paid.

(Note 3) An amount after deducting fees related to the assignment of the Class B Beneficial Interest (1,870,000
yen (including consumption tax) will be paid. Provided, however, that if the acquisition date is not August
31, 2023, fees related to the assignment shall be recalculated and determined.

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(Note 4) Base rate is JBA 3-month JPY TIBOR. The Japanese yen TIBOR by JBA can be confirmed on the websiteof the JBA TIBOR Administration (http://www.jbatibor.or.jp/english/rate/). For each interest
calculation period, the rate announced at 11 a.m. (Tokyo time) two business days prior to the last
day of the previous calculation period of the relevant calculation period will be applied as the baserate. The amount to be received after deduction of the trust fees is calculated by the rates below.
Class A Beneficial Interest: Base rate + 5.047%
Class B Beneficial Interest: Base rate + 7.047%(Note 5) The appraisal value stated in the appraisal report obtained by the Asset Manager for the Underlying
Asset is not disclosed, because consent to disclosure has not been obtained from the current owner.
The LTV which is the ratio of the total amount of the Beneficial Interests and senior claims to theappraisal value is lower than 85%, which is SAR’s investment standard for investments in mezzanine
loan debts (announced in the “Notice Concerning Acquisition of Mezzanine Loan Debt (Subordinate
Bonds)” dated October 25, 2017. The same applies below.)(Note 6) The scheduled redemption date of the Beneficial Interests is November 29, 2027. However, theBeneficial Interests may be repaid prior to the scheduled redemption date for certain reasons suchas the sale of the Collateral Asset.
(Note 7) The lender(s) of the senior loan(s), the TK investors and members of the GK are not disclosed, as consents forsuch disclosures have not been obtained.

2. Reason for the Acquisition
The Acquisition has been decided as it will not only realize diversification of investment targets, but will also likely
boost distributable profits since it will allow SAR to receive dividend income (dividend yield of more than 5% (asof the date of this announcement)) from effective use of own funds and it will contribute to maximization ofunitholder value. The Asset Manager recognized the following points upon deciding on the Acquisition of the
Beneficial Interests.
(1) The LTV of the amount of the Beneficial Interests together with senior claims calculated based on
the appraisal value of the Underlying Asset is lower than SAR’s investment standard (85% of theappraisal amount), and the risk of incurring a loss during the period of holding the Beneficial
Interests is judged to be low.
(2) As the Beneficial Interests and the senior claims, as stated in (1) above, can be fully repaid by theamount calculated based on the LTV which is SAR’s investment standard, it is determined thatthe certainty of redemption of the Beneficial Interests by sale of the Underlying Asset or byrefinancing is high.
(3) From the evaluation of the Underlying Asset by the Asset Manager as described below, it isjudged that the rent revenues from the Underlying Asset will be highly stable, and the certainty
of interest payments on the mezzanine bonds which are the trust assets of the Beneficial
Interests is also high.
(4) The expected dividend yields on the Beneficial Interests are “base rate + 5.3%” and “base rate +7.3%”, respectively, (please refer to 1. Overview of the Acquisition above), it is anticipated thatprofits exceeding the post-depreciation yield of the currently held real estate portfolio will be
secured.
Real estate investment corporations, under securities listing regulations of the Tokyo Stock Exchange (TSE),
are only permitted to hold assets other than real estate etc., real estate-related assets and current assets up
to a maximum of 5% of the total amount of assets under management. The Asset to be Acquired does not fallunder any one of real estate etc., real estate-related assets, or current assets etc., however, the ratio of “realestate etc., real estate-related assets and current assets” to the total amount of SAR’s assets undermanagement after the 8th asset replacement is expected to be no less than 95%.
(Note) Determined based on the amount calculated by deducting the book value of the Asset to be Transferred
as of July 31, 2022 from the total assets of the balance sheet as of July 31, 2022, and then adding theacquisition amount of the asset to be acquired.

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Overview of Underlying Asset and Evaluation of the Underlying Asset by the Asset Manager are as follows.
<Overview of Underlying Asset>
Asset type

Trust beneficiary interests of real estate

Property nameCENTURION HOTEL GRAND AKASAKA

Owner

The GK

Location

3-19-3 Akasaka, Minato-ku, Tokyo

Use (Note 1)

Hotel, Sauna

Structure (Note 2)

Steel reinforced concrete (SCR) structure with flat roof, 14 stories
with 1 basement floor.

Area

Land (Note 3)
Building(Total floor area)(Note 4)Land

Form ofownership
Building(Note 5)Construction completion
Earthquake PML (Note 6)

668.02 ㎡
2,516.83 ㎡
Proprietary ownership
Proprietary ownership
July 16, 2013
6.0%

Appraisal value Not disclosed (Note 7)
Appraisals

Occupancy rate

Appraisal NOI

Not disclosed (Note 7)

Appraisal date

January 1, 2023

Appraiser

JLL Morii Valuation & Advisory K.K.
100.0% (as of January 31, 2023)

Special notation
No matters worthy of mention.
(Note 1) “Use” indicates the use stated in the real estate registry, and may differ from the present state.
(Note 2) “Structure”, for buildings, indicates the structure stated in the real estate registry.
(Note 3) “Land” is the entire land area stated in the real estate registry and may differ from the present state.
(Note 4) “Building (Total floor area)” is the total floor area stated in the real estate registry and may differ
from the present state.
(Note 5) “Form of ownership” is the type of rights held by the trustee of CENTURION HOTEL GRANDAKASAKA.
(Note 6) The PML (probable maximum loss) calculated based on the seismic risk evaluation conducted by
Tokyo Marin dR Co., Ltd. based on SAR’s request is stated. “Probable Maximum Loss” means theprobable maximum loss that may result from an earthquake and, herein, refers to the extent ofdamage that may be suffered due to an earthquake of the assumed maximum scale (earthquakewith a probability of occurring once in 475 years = earthquake with a probability of occurrence in
50 years of more than 10%) in the scheduled use period (50 years = useful life of a general building),
expressed as the estimated cost of restoring such damage (physical loss corresponding to aprobability of more than 90% in the event of occurrence of such earthquake) as a percentage (%) of
the replacement cost.
(Note 7) The contents of the real estate appraisal report obtained by SAR for grasping the appropriate priceof the Underlying Asset are not disclosed as consent for disclosure has not been obtained from thecurrent holder of the Underlying Asset.
<Evaluation of the Underlying Asset by the Asset Manager>
CENTURION HOTEL GRAND AKASAKA which is the Underlying Asset is a business hotel located in
Akasaka of Minato-ku, Tokyo.
Due to Centurion Hotels sales strategy, it has acquired demand of inbound visitors showing signs ofrecovery as well as from domestic travel, and its operating results are already on a recovery trend
since 2020 which was affected by the COVID-19 pandemic.

5With respect to the property aspects, the hotel has a total of 82 guest rooms of various types,
including twin bed rooms, double bed rooms, as well as family-type rooms accommodating up to 6
guests, and is available for a variety of uses such as business use, group travel use and family use.
Furthermore, the hotel is competitive in that it has differentiated itself from other accommodation
facilities located in the nearby area, by providing ancillary facilities such as a large bath and sauna
facilities.
Given the above stated reasons, the Asset Manager has evaluated the Underlying Asset as aproperty which can acquire stable cashflow.
3.Impact on SAR’s finance in the case where the forward commitments etc. are not performed.
Within the Acquisition, the acquisition of the Class A Beneficial Interest falls under forward commitment etc.
by an investment company (Note 1) as set forth in the “Comprehensive Guidelines for Supervision of Financial
Instruments Business Operators, etc.” prescribed by the Financial Services Agency.
If SAR or the seller has breached any provisions of this Agreement prior to the execution of the Class A
Beneficial Interest after transfer of the Class B Beneficial Interest, the non-breaching party may cancel thisAgreement, and the Class B Beneficial Interest must be restored to its original state as of the day of signing of
this Agreement. However, given that it is planned to appropriate the assignment proceeds from the Asset tobe Transferred as described in the announcement today entitled “Notice Concerning the Transfer of Trust
Beneficial Interests of Domestic Real Estate (Funabashi Hi-Tech Park Factory II)” towards the purchaseproceeds for the Class A Beneficial Interest, and also given that even if by any chance the assignment of theAsset to be Transferred is not executed SAR has determined that it is possible to purchase the Class A
Beneficial Interest from cash on hand, SAR is of the view that the possibility that the forward commitment etc.
related to the purchase of the Class A Beneficial Interest may have a significant impact on SAR’s finance or
payment of distributions etc. is low.
(Note 1) This refers to forward dated sale and purchase agreements, where it is intended that settlement ordelivery is to occur after 1 month or more from the date of signing of the agreement, and any othersimilar agreements.

4.Overview of the Seller
Name of Seller
Location
Description of the limited
partnership’s businessStated Capital
Date of Establishment
Representative
Major Shareholder
Total assets
Net assets
Relationship between SAR/
the Asset Manager and theSellerTokyo Capital Management Co., Ltd.
1-14-2 Shimbashi SY Building, Nishi- Shimbashi, Minato-ku, Tokyo
1. Asset management (AM) business2. Property management (PM) business
3. Real estate management consulting business4. Construction management business5. Tenant brokerage business, etc.
6. Rental conference room operating business
7. Parking lot operating business
100,000,000 yen
January 24, 2007
Chief Executive Officer, Akihiko SogaNIPPON KANZAI Co., Ltd. 100%
Not disclosed (Note)
Not disclosed (Note)
CapitalThere is no capital relationship to report.
relationship
Personnel
There is no personnel relationship to report.
relationship
Business
For the fiscal period ended January 31, 2022, in
relationshipaddition to the property management services
outsourced for properties held by SAR (16properties), there are transactions related to thefollowing agreements:

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・Comprehensive support agreement for property
acquisitions and property management andoperations (Sub-sponsor Support Agreement)
・Business outsourcing agreement
・Property survey service agreement
Related party
There is no related party status to report between
statusthe relevant company and SAR/the Asset Manager.
Furthermore, the company does not fall underinterested person, etc. under the Act on Investment
Trusts and Investment Corporations (Act No. 198 of1951, as amended) (hereinafter referred to as the“Investment Trust Law”).
(Note) Not disclosed, because consent for disclosure has not been obtained from the Seller.
5. Transaction with interested person, etc.
The Acquisition is not a transaction with an interested person, etc. under the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951, as amended) or interested parties as defined in the “Rules on
Transactions with Interested Parties” set forth by the Asset Manager. However, as the seller is a sub-sponsor
who has signed a “Comprehensive Support Agreement for Property Acquisitions and Product Management
and Operations” with SAR and the Asset Manager, and also since the Acquisition uses the bridge scheme,
procedures based on the guidelines prescribed by the Financial Services Agency (FSA) have been taken.
6. Schedule for the Acquisition
Date of decision to acquire the Beneficial Interests

February 1, 2023

Signing date of the Beneficial Interests Sale and Purchase Agreement.

February 1, 2023

Planned acquisition date of the Class A Beneficial Interest

August 31, 2023 or such other date
to be separately agreed by SAR andthe seller.

Planned acquisition date of the Class B Beneficial Interest

February 20, 2023

7. Settlement method
SAR intends to settle by making lump-sum payment of the full amount of the acquisition proceeds, on theplanned date of acquisition of the Class A Beneficial Interest and the planned date of acquisition of the Class B
Beneficial Interest, respectively.
8. Future Outlook
As a result of the Acquisition, changes will arise to the assumptions used for the forecast of operating
results for the fiscal period ending July 31, 2023 (February 1, 2023 to July 31, 2023) which was announced in
the “(REIT) Financial Report for Fiscal Period Ended July 31, 2022” on September 13, 2022. For details, pleaserefer to the press release announced today “Notice Concerning Revision to Forecasts for Operating Results andDistributions for the 15th Fiscal Period Ending July 31, 2023”.
<Other press releases announced today>
・Notice Concerning the Transfer of Trust Beneficiary Interests of Domestic Real Estate (Funabashi Hi-Tech
Park Factory II)・Notice Concerning Early Repayment of Borrowings
・Notice Concerning Revision to Forecasts for Operating Results and Distributions for the 15th Fiscal PeriodEnding July 31, 2023
* Star Asia Investment Corporation website address: http://starasia-reit.com/en/
This is an English translation of the announcement in Japanese dated February 1, 2023.
However, no assurance or warranties are given for the completeness or accuracy of this English translation.

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