December 17, 2021
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 6 (Class C Specified Bonds)

Star Asia Investment Corporation (“SAR”) announces that Star Asia Investment Management Co., Ltd. (the“Asset Manager”), 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 SAR’s sixth mezzanine loan debt investment and has leveraged sponsor support from Star
Asia Group. 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 pursuitof maximization 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) Collateral Asset(4) Trustee of the Collateral
Asset(5) Trust period of the CollateralAsset(6) Face Amount of the Class C
Specified Bonds(7) Acquisition price of the Class
C Specified Bonds(8) Interest Rate
(9) LTV against collateral assets(10) Planned signing date of theClass B Specified Bonds
Assignment Agreement(11) Planned acquisition date ofSpecified Bonds:
Specified bonds (hereinafter referred to as the “Class C Specified Bonds”)
issued by Tajimi Tokutei Mokuteki Kaisha (the “TMK”) with the collateral
assets being trust beneficial interests with Tajimi Logistics Center being themain assets in trust (such beneficial interest hereinafter referred to as the“Collateral Asset”) (Note1)
Star Asia Mezzanine Loan Debt Investment Series 6
Trust beneficial interests with Tajimi Logistics Center being the main
assets in trust.
Sumitomo Mitsui Trust Bank, Ltd.
From September 9, 2011 to March 31, 2030
400,000,000 yen
400,000,000 yen (excluding acquisition expenses)
Base rate (Note 2) + 7.00%
Not disclosed (Note 3)
December 17, 2021

December 23, 2021

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the Class C Specified Bonds(12) Interest payment date of
the Class C Specified Bonds(13) Final redemption date
(Planned)(14) Funding for acquisition(15) Settlement method(16) Seller(17) Overview of the structureof the Class C Specified Bonds

15th day of March, June, September and December (Four times a year)(The first interest payment date is March 15, 2022)
July 10, 2026 (Note 4)

Specified Bond

Cash on hand
Refer to 6. Settlement method
SA Alpha Investment Limited Partnership
Operator: The TMK
TMK(Class A
Specified
Bonds)(Class B【
Specified
The Collateral
Bonds)
Asset(Class C
SpecifiedTajimi Logistics
Bonds)
CenterSA Alpha】
Investment
Appraisal value
Limitedis not disclosed
Partnership(Note 3)

SAR
400,000,000
yen

Equity【 Preferred Equity】

1.

(18) Relationship between SAR/
the Asset Manager and the
TMK* Based on information as ofDecember 17, 2021.

Specified Equity

On December 23, 2021, SAR will purchase from the current holder
the principal outstanding amount (400,000,000 yen) of the Class C
Specified Bonds, and at the same time will succeed to the status andall rights and obligations with respect to the Class C Specified Bonds.
2. The Class C Specified Bonds will be subordinated to the Class A
Specified Bond and the Class B Specified Bonds with respect to eh
payment of interest and redemption of principal. On the other hand,in principle, payment of interest and repayment of principal on theClass C Specified Bonds will be made in priority to “Equity (preferred
equity and specified equity)” of the TMK. In particular with respect
to the repayment of principal, in the unlikely event that the value of
the Collateral Asset declines, the TMK’s equity (preferred equity andspecified equity)” will be first to incur a loss, and principal of theClass C Specified Bonds will incur a loss only after all of the “Equity(preferred equity and specified equity)” is lost.
CapitalThere is no capital relationship to report between
relationship
SAR/ the Asset Manager and the TMK.
Personnel
There is no personnel relationship to report between
relationship
SAR/ the Asset Manager and the TMK. Furthermore,
there is no personnel relationship to report between
associated persons and associated companies of
SAR/ the Asset Manager and associated persons andassociated companies of the TMK.
Business
There is no business relationship to report between
relationship
SAR/ the Asset Manager and the TMK. Furthermore,2

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 TMK.
Related party
There is no related party status to report between
status
SAR/the Asset Manager and the TMK.
(Note 1) For an overview of the Collateral Asset, please refer to 2. Reason for the Acquisition <Overview ofCollateral Asset>.
(Note 2) 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 dayof the previous calculation period of the relevant calculation period will be applied as the base rate.
(Note 3) The appraisal value stated in the appraisal report obtained by the Asset Manager for the Collateral
Asset is not disclosed, because consent to disclosure has not been obtained from the current owner.
The LTV which is the ratio of all of the specified bonds (the total amount) to the appraisal value islower 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 5) The final redemption date of the Class C Specified Bonds is July 10, 2026. However, the Class C
Specified Bonds may be repaid prior to the final redemption date for certain reasons such as the saleof the Collateral Asset.
2. Reason for the Acquisition
The Acquisition will not only realize diversification of investment targets, but will also likely boost distributableprofits since it will be conducted with cash on hand held by SAR, allowing SAR to receive interest income(planned interest rate: more than 7% (as of the date of this announcement)) from effective use of own funds.
Therefore, SAR has decided on the Acquisition judging that such will contribute to maximization of unitholder
value. The Asset Manager recognized the following points upon deciding on the acquisition of the Class C
Specified Bonds.
(1) The LTV of the amount of the Class C Specified Bonds together with senior debts calculated
based on the appraisal value of the Collateral Asset is lower than SAR’s investment standard,
and the risk of incurring a loss during the period of holding the Class C Specified Bonds isjudged to be low.
(2) As the trust asset of the Collateral Asset is debt which may be fully repaid given the LTV which
is lower than SAR’s investment standard as described in (1) above, the certainty of full
repayment of the Class C Specified Bonds through the sale of the Collateral Asset or refinancing
is judged to be high.
(3) As a result of own investigations made by the Asset Manager regarding the Collateral Asset,
tenant needs towards the Collateral Asset is high, and it is judged that the certainty of payment
of interest on the Class C Specified Bonds is also high.
(4) The expected interest rate on the Class C Specified Bonds is “base rate + 7.00%” (please refer to
1. Overview of the Acquisition above), it is anticipated that profits exceeding thepost-depreciation yield of the currently held real estate portfolio will be secured.
Overview of Collateral Asset and Evaluation of the Collateral Asset by the Asset Manager are as follows.
<Overview of Collateral Asset>
Asset type

Real estate beneficiary interest in trust

Property nameTajimi Logistics Center

Owner

The TMK

Location

10-6-136 Asahigaoka, Tajimi-shi, Gifu Prefecture, etc.

Use (Note 1)

Warehouse

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Structure (Note 2)

Area

Steel construction alloy plated steel plate roofing 5 floors etc.

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

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

56,341.43 ㎡
75,599.23 ㎡
Proprietary ownership
Proprietary ownership
September 13, 2012
6.49%

Appraisal value Not disclosed (Note 7)
Appraisal obtainedby the TMK
Occupancy rate

Appraisal NOI

Not disclosed (Note 7)

Appraisal date

December 1, 2021

Appraiser

The Tanizawa Sogo Appraisal Co., Ltd.
100.0% (as of December 1, 2021)

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) “Type of ownership” is the type of rights held by the trustee of Tajimi Logistics Center.
(Note 6) The PML (probable maximum loss) calculated in the evaluation of seismic risk analysis conductedby Daiwa Real Estate Appraisal Co., Ltd., which was entrusted by the TMK upon acquisition of the
Collateral Asset as part of efforts to grasp the appropriate price of the real estate is indicated.
“Probable Maximum Loss” means the probable maximum loss that may result from an earthquake
and, herein, refers to the extent of damage that may be suffered due to an earthquake of theassumed maximum scale (earthquake with 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 restoringsuch damage (physical loss corresponding to a probability 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 Collateral Asset are not disclosed as consent for disclosure has not been obtained from thecurrent holder of the Collateral Asset.
<Evaluation of the Collateral Asset by the Asset Manager>
Tajimi Logistics Center which is the trust asset of the Collateral Asset is a large-scale logistics facility
located in Tajimi-shi of Gifu Prefecture.
The Tajimi Logistics Center is located approximately 4.2km away from the “Tajimi Interchange” of the
Chuo Expressway, and has excellent traffic access as it is accessible to the Tokai-Kanjo Expressway by going
through the “Toki Junction” from the Chuo Expressway, and also to the Tomei Expressway and Meishin
Expressway by going through the “Komaki Junction”. The location allows for same-day delivery to the
Nagoya District which is a large consumption region as well as to the three Tokai prefectures (Aichi, Gifu,
Mie), and also to the large area of Chubu region.
Regarding the real estate property, the floor area per floor is approximately 4,800 tsubo, and the grossfloor area is approximately 24,000 tsubo, which is adequate floor area for a logistics center.
Given the reasons mentioned above, the Asset Manager has evaluated the Collateral Asset to be aproperty which can achieve stable cashflow.

43. Overview of the Seller
Name of Seller
Location
Description of the limited
partnership’s business

Capital investments
Date of Effectuation of thePartnership Agreement
General partner

SA Alpha Investment Limited Partnership
2-5-1 Atago, Minato-ku, Tokyo
Atago Green Hills MORI Tower 18th floor
1. Acquisition and holding of the following securities.
(i) Specified bonds with general collateral issued by Tajimi Tokutei
Mokuteki Kaisha (TMK)
2. All businesses incidental to the preceding item.
100,000,001 yen
March 10, 2020

Star Asia Asset Advisors Co., Ltd.
Chief Executive Officer, Keiji Watanabe
Limited partner
Star Asia Finance, LLC
Total assets
Not disclosed (Note 1)
Net assets
Not disclosed (Note 1)
Relationship between SAR/
CapitalThere is no capital relationship to report.
the Asset Manager and therelationship
TMK
Personnel
There is no personnel relationship to report.
relationship
Business
There is no business relationship to report.
relationship
Related party
The Seller is a no related party of the AssetstatusManagerbut is a related party of the Asset Manager.
Furthermore, the Seller falls under an interested
party etc. under the Act on Investment Trusts andInvestment Corporations (No. 198 of 1951, including
any subsequent amendments thereto) (hereinafter
the “Investment Trust Act”). Therefore, the AssetManager, upon deciding on the Acquisition, has gone
through deliberations and approvals in accordancewith the Investment Trust Act as well as the“Interested Parties Transaction Rules” which are theAsset Manager’s internal rules stipulating measuresfor conflict-of-interest in relation to SAR’s asset
management.
(Note 1) Not disclosed, because consent for disclosure has not been obtained from the Seller.
4. Transaction with interested person, etc.
The acquisition of the Class C Specified Bonds is a transaction with an interested person, etc. under the Act
on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended) or interested person,
etc. defined in the “Rules on Transactions with Interested Parties” set forth by the Asset Manager.
The Seller is an interested party etc. under the Investment Trust Act. Therefore, the Asset Manager, upon
deciding on the Acquisition has gone through deliberations and approval procedures in accordance with thesaid Act and the “Interested Party Transaction Rules”.
5. Schedule for the Acquisition
Decision date of the Acquisition
Signing date of the Class C Specified Bonds assignment agreement
Planned acquisition date of the Class C Specified Bonds

December 17, 2021
December 17, 2021
December 23, 2021

6. Settlement method(1)On the signing date of the Class C Specified Bonds assignment agreement, SAR will deliver the purchaseproceeds to the Seller.

5(2)On the date of acquisition of the Class C Specified Bonds, book-entry procedures(*) will be completed,and settlement will be concluded by applying the acquisition proceeds to the payment for the Class C
Specified Bonds.
*Submitting an application for book entry transfer as set forth in Article 70 of the Act on Book-Entry Transfer ofCorporate Bonds and Shares (Act No. 75 of June 27, 2001, including any subsequent amendments thereto) which isapplied mutatis mutandis under Article 118 of the same Act.

7. Future Outlook
The impact of the Acquisition on the operating results is immaterial, and there are no changes to theforecast of operating results for the fiscal period ending January 31, 2022 (August 1, 2021 to January 31, 2022)
and the fiscal period ending July 31, 2022 (February 1, 2022 to July 31, 2022) which were announced in the“(REIT) Financial Report for the Fiscal Period Ended July 31, 2021” dated September 14, 2021.
* Star Asia Investment Corporation website address:

http://starasia-reit.com/en/

This is an English translation of the announcement in Japanese dated December 17, 2021.
However, no assurance or warranties are given for the completeness or accuracy of this English translation.

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