October 5, 2020
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 and Transfer ofTrust Beneficiary Interest in Domestic Real Estate (Sixth Asset Replacement)
Star Asia Investment Management Co., Ltd. (the “Asset Manager”), to which Star Asia Investment Corporation(“SAR”) entrusts the management of its assets, announces today its decision to acquire domestic real estate beneficiaryinterests in trust of “Urban Park Tokiwadai Koen” (hereinafter referred to as the "Asset to be Acquired", and theacquisition of the Asset to be Acquired is referred to as the “Acquisition”), and transfer the domestic real estate
beneficiary interest in trust of “Suroy Mall Nagamine” (hereinafter referred to as the "Asset to be Transferred", and thetransfer of the Asset to be Transferred is referred to as the “Transfer” and collectively with the Acquisition, the “Asset
Replacement”).
SAR positions asset replacement as an important policy of active management which will contribute to the
maximization of unitholders' value, and has executed 5 asset replacements to date. SAR has been making efforts toenhance its portfolio, and property sales from the 5 asset replacements generated approximately JPY 4.3 billion in gainon sales (including the (anticipated amount of) gain on sale of Alphabet Seven (60% quasi-co-ownership interest)
scheduled to be sold on December 1, 2020). SAR expects that this Asset Replacement will also strengthen its portfolio.)(For details, please see the press release dated March 2, 2020 entitled "Notice Concerning Acquisition and Transfer ofTrust Beneficiary Interest in Domestic Real Estate (Fifth Asset Replacement)".
The Asset Replacement is the implementation of the strategy upheld from before the merger with Sakura Sogo REIT
Investment Corporation to “dispose of suburban-type commercial/retail facilities”, put into implementation taking theopportunity of effectuation of the merger, and it also comprises the purchase of a family-type housing property locatedin the Tokyo metropolitan area (Note) which is expected to generate stable income. It is also the continued executionof active management as advocated by the Asset Manager.
SAR believes that this 6th Asset Replacement will enhance SAR’s portfolio and contribute to the maximization ofunitholders’ value.
(Note) The “Tokyo metropolitan area” means Tokyo, Kanagawa, Saitama, and Chiba prefectures. The same applies below.

1.

Reason for the Asset Replacement
The Transfer is to be conducted under our strategy to “dispose of suburban-type commercial/retail facilities”,
reflecting our concern for maintaining future asset value, given that from a macro perspective, the trade zone
population in local suburban areas is expected to decrease in the mid- to long-term, and also given the likelihoodthat the number brick-and-mortar stores may decline given the growth of e-commerce. On the other hand, theexecution of the Acquisition decided at the same time as the Transfer, is an acquisition of a family-type residence
located in the Tokyo metropolitan area where stable operation is anticipated. By executing this 6th Asset
Replacement, it is expected that the stability of the portfolio income will be further enhanced in the mid- to -longterm.
“Suroy Mall Nagamine”, the Asset to be Transferred located in Kumamoto-shi of Kumamoto Prefecture, is acommercial/retail facility mainly focused on living necessity related product sales. The impact of COVID-19 is limited,and it has recently been recording steady revenues. However, SAR has positioned the asset as an asset for whichassignment is preferable in the mid- to long-term perspective as described above. Given this status, by utilizing the1

broad network of the Asset Manager and searching for potential assignees which are considering investments insuburban type commercial/retail facilities, it was found that the asset could be sold at a price exceeding theappraisal value of the property which was obtained by SAR. Therefore, it has been determined that selecting “sale”
rather than “hold” would contribute to the maximization of unitholders’ value.
On the other hand, it was determined that “Urban Park Tokiwadai Koen”, the Asset to be Acquired, would
contribute to the stabilization of portfolio income based on assessment of the following points.
<Urban Park Tokiwadai Koen>
1. The property is located in the Tokyo metropolitan area (in Yokohama-shi, Kanagawa Prefecture) andis accessible to the terminal “Yokohama” station and the new “Hazawa Yokohama-kokudai” station.
It is also accessible to several highways, and is a location highly convenient for car users.
2. In the neighborhood, there is the Tokiwadai-koen park with its extensive greenery and the
Yokohama National University campus, providing a favorable living environment with lots ofgreenery, and it is highly appealing to families and particularly to households rearing children.
3. All units are 3LDK (66.0 ㎡), a layout matching the area’s characteristics.
4. In 2016, renovation works were conducted on the common-use areas and exclusively-owned areas(for all housing units), and housing equipment was replaced, and the property is highly competitivein the residential leasing market (the occupancy rate has been maintained above 97% since April
2020.)
After the Asset Replacement, our investment ratio (on the basis of acquisition price/ receipt price) to suburbantype commercial/retail facilities will be reduced from 11.2% to 9.2%, and our investment ratio into residential assets
which is conceived to be defensive assets will rise from 15.5% to 17.6%. Just to note, the Transfer is expected togenerate a gain-on-sale from an accounting perspective, and a loss-on-sale from a tax perspective, and SAR isconsidering to internally reserve and retain the accounting gain-on-sale.
2. Summary of Asset to be Acquired and Asset to be Transferred(1) Overview of Asset to be Acquired
RSC-16 Urban Park Tokiwadai Koen
Asset to be acquired
Beneficiary interest in trust whose main asset is domestic real estate
Property nameUrban Park Tokiwadai Koen
Location
40-1, Tokiwadai, Hodogaya-ku, Yokohama-shi, Kanagawa
Asset type
Residence
Date of execution of purchase
October 5, 2020
agreement
Planned acquisition date
October 16, 2020
SellerGodo Kaisya SAPR8
Planned acquisition price
3,506 million yen(Note)
Acquisition financing
Proceeds from sale of Asset to be Transferred and cash on hand
(Note) With respect to the “Planned acquisition price”, the planned sale and purchase proceeds stated in the agreementwith the seller with respect to the Asset to be Acquired is stated, with the amount under one million yen rounded to thenearest million yen. The planned sale and purchase proceeds do not include consumption tax or local consumption tax or
expenses required for the acquisition. The same applies below.

(2) Overview of Asset to be Transferred
RTL-04 Suroy Mall Nagamine
Asset to be Transferred
Property nameLocation (Indication ofresidential address)
Asset type
Date of execution of sales
agreement
Planned transfer date
Planned transfereePlanned sales price (Note2)
Book value (Note3)

Beneficiary interest in trust whose main asset is domestic real estate
Suroy Mall Nagamine
1-5-1, Nagamine nishi 1-5-1, Higashi-ku, Kumamoto-shi, Kumamoto
RetailOctober 5, 2020
October 15, 2020
Not disclosed (Note1)
3,500 million yen
3,450 million yen

2

Gain (loss) on transfer
18 million yen(estimate) (Note4)
Use of gain on transfer
To be appropriated to purchase proceeds for the Asset to be Acquired(Note 1) The planned buyer is a domestic operating company; however, the company is not disclosed since consent fordisclosure has not been obtained from the said company.
(Note 2) The expected sales price of the Asset to be Transferred (excluding assignment related expenses, consumption
tax and local consumption tax) as described in the sale and purchase agreement related to the Asset to betransferred is stated.
(Note 3) The book value (the acceptance price upon the merger on August 1, 2020) is stated.
(Note 4) This states the assumed book value as at the scheduled sale date, and the estimated gain/ loss on assignment
taking into consideration various expenses expected to arise incidental to the transfer. The actual gain/ loss on
assignment may differ from the above stated estimate amount.

3. Details of Asset to be Acquired
RSC-10 Urban Park Tokiwadai Koen
Property
Property
RSC-16
Urban Park Tokiwadai Koen
Type
Residence
No.
nameOverview of specified asset
Beneficiary interest in
Mizuho Trust & Banking Co., Ltd.
Type of specified asset
Trusteetrust
Planned acquisition price 3,506 million yen
Planned acquisition date October 16, 2020
Appraised value
Location
Indication of residential
address
Nearest station
Type ofLand
ownership

3,770 million yen
SellerGodo Kaisya SAPR8
Tokiwadai40-1, Hodogaya-ku, Yokohama-shi, Kanagawa
Tokiwadai362-36, Hodogaya-ku, Yokohama-shi, Kanagawa and otherApprox. 15-minute walk from “Wadamachi” Station on Sagami Tetsudo Line
Proprietary ownership
12,544.61 ㎡

Use district

Category 1 medium-to-high-rise exclusive
residential district

60%

Floor area ratio

150%

15,708.08 ㎡

Use

Residence

February 17, 1994

Structure and floors

Reinforced concrete (RC) structure, 5 floors above
ground.

Property managementcompany

Haseko Livenet, Inc.

Master lease company

Haseko Livenet, Inc.

Type of master lease
Trust expiration datePass-throughOctober 31, 2030

Security

Unsecured

Site area

Building

Building
coverage ratio
Type ofownership
Total floor
area
Construction
completion

Proprietary ownership

Status of leasing (as of end of August 2020)
Total leasable are

14,058.00 ㎡

Total leased area

13,728.00 ㎡

Total number of tenants

130

Monthly rent (includingcommon area
maintenance fee)
Security and guarantee
deposits

21,127,200 yen
28,819,200 yen

Occupancy rate
April
2020
98.1%

May
2020

June
2020
97.7%

July
2020
97.2%

August
2020
96.7%

97.7%

Special notation
Not applicable.
(Note) According to the register, there are 4 existing buildings (including the attached building), and “total floor area” states thetotal floor area of the 4 buildings, and the “structure/ floors” states details of the main building.

3

Property description and acquisition highlight based on the survey by the Asset Manager(1) Property Description
The property is a family-type residence situated on a hill-top with a view of the town of Yokohama, located at an
approximate 7-minute walk after getting off at “Yokohama Shindo” which is an approximate 19-minute bus ride from
“Yokohama” station where JR lines, Tokyu Tokyo line, Keihin Kyuko line, and Sagami Railway line intersect, and an
approximate 15-minute walk from “Wadamachi” station on the Sagami Railway main line. The property is situated in the
Hodogaya area, where not only train lines, but also roads such as Daisan Keihin, Yokohama Shindo, and Hodogaya
bypass intersect, providing excellent car traffic network. Furthermore, the new “Hazawa Yokohama-kokudai” station
which began operations in 2019 is also within walking distance of the property, and it is expected that the station will
eventually be directly accessible to the Tokyo metropolitan city center by extension of the Sotetsu line, and commuting
time to stations such as Ebisu, Shibuya, and Shinjuku will become shortened and convenience will be improved. Also, inthe neighborhood, there is the Tokiwadai-koen park with its extensive greenery, and as the area is being developed as aresidential district backed by rich greenery providing a favorable residential environment, housing demand is expected
centered around families. From a specification perspective, the property was fully renovated in 2016, and housing
equipment in the common-use areas and housing exclusive areas have been fully replaced. The floorplans of all of the
housing units are 3LDK, and a car-sharing service is also provided in the premises, and therefore, it is also a highly
appealing property for families using cars.
(2) Acquisition Highlight
The property is scheduled to be acquired by utilizing the preferential negotiation rights

Demographic analysis etc., market analysis and independent analysis by the Asset Manager(1) Demographic analysis etc.
The population of Hodogaya-ku, Yokohama-shi remains more or less flat, while the number of households is increasing, andtherefore, the Asset Manager believes that the population in the area will continue to steadily grow going forward.
<Population and number of households at Hodogaya-ku, Yokohama-shi>
300,000 (人)110,000
100,000

250,000

90,00080,000200,000

70,00060,000150,000

50,00040,000100,000

30,00050,00020,000
2012年

2013年

2014年

2015年

2016年

人口（左軸）

2017年

2018年

2019年

2020年

世帯数（右軸）(Note) For the years from 2012 to 2013, the figures stated are as of the end of each fiscal year (March 31), and for the years
from 2014 to 2020, the figures stated are as of January 1 of each year.
Source: Prepared by the Asset Manager based on the “Survey on Population, Demography and Number of Households basedon the Basic Resident Registration Cards” published by the Ministry of Internal Affairs and Communications Statistics
Bureau.
(2) Market analysis
As shown in the transition of rent levels in the graph below, rent levels in Yokohama-shi of Kanagawa Prefecture has remained
more or less flat from the first half of 2015 and has remained stable.
Regarding vacancy rates, as shown in the transition of vacancy rates in the graph below, the vacancy rate had increased moving
towards the latter half of 2015; however, since then it has stabilized at a low level of around 3.0% up to the latter half of 2019.
Given the historical trend in the area, the Asset Manager believes that the vacancy rate will continue to be flat going forward.

4

< Yokohama-shi, Kanagawa Prefecture – Average Rent Index & Vacancy Rates >
110.0

6.0%

100.0

5.0%

90.0

4.0%

80.0

3.0%

70.0

2.0%

60.0

1.0%

50.0

0.0%
2015年 2015年 2016年 2016年 2017年 2017年 2018年 2018年 2019年 2019年
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H
賃料インデックス（左軸）空室率（右軸）(Note) 1H means 1st half of the year (January to June), and 2H means latter half of the year (July to December)
Source: Prepared by Japan Real Estate Institute (“JREI”) based on data disclosed by listed REITs (for residences in Yokohamashi of Kanagawa Prefecture (however, excluding any properties which were sold or purchased during the above
periods)).
(3) Independent analysis by the Asset Manager
The number of passengers using Wadamachi station on the Sotetsu line has remained flat since fiscal year 2017, and theAsset Manager believes that this trend will continue going forward.
< Daily Average of Number of Passengers using Wadamachi Station>(人)

16,417

17,35818,116

18,231

18,0402018年度

2019年度

5,000
2015年度

2016年度
2017年度
1日平均乗降客数

Source: Prepared by the Asset Manager based on “Yokohama-shi Statistics”.

Comprehensive evaluation by SAR: Evaluation on income stability
Due to the reasons stated below, SAR believes that the property will be able to obtain stable income in the mid- to long-term, andalso that growth in income can be anticipated in the future through increase in rents etc.
(1) In addition to the nearest station of Wadamachi station, the property is also accessible from “Yokohama” station and the new“Hazawa Yokohama-kokudai” station, and the property is also located in an area highly convenient for car users as it isaccessible to multiple highways. Also, all housing units are 3LDK (66.0㎡), which is a layout which matches the area’s
characteristics. Furthermore, the property’s common use area and exclusive area (for all units) have been fully renovated in2016, and it is believed to be highly appealing to families.
(2) Rent levels in Yokohama city’s residence rent market has been stable, and vacancy rates are also at low levels. Also, given thatthe population and number of households of Hodogaya-ku, Yokohama-shi remains more or less flat, the Asset Manager has
determined that the population in the area is also anticipated to steadily increase going into the future.

5

4.

Details of Asset to be Transferred
RTL-04 Suroy Mall Nagamine

PropertyNo.

RTL-04

PropertynameSuroy Mall Nagamine

Type

RetailOverview of specified asset
Type of specified asset
Planned sales price

Beneficiary interest in trust

Trustee3,500 million yen

PlannedMitsubishi UFJ Trust and Banking
Corporationtransfer date

October 15, 2020

Location

Nagamine nishi 1-2331-37, Higashi-ku, Kumamoto-shi, Kumamoto

Indication of residential

Nagamine nishi 1-5-1, Higashi-ku, Kumamoto-shi, Kumamoto

address
Nearest station
Land

Type ofownership
Site area

Approx. 2.5km from “Tokai Gakuen” Station on JR Hohi Line
Proprietary ownership
28,546.23 ㎡

Use district

Building
coverage

Floor area

60%

ratio

ratio
Building

Type ofownership
Total floor
area
Construction
completion

Property managementcompany

Quasi-Industrial District
200%

Proprietary ownership
13,130.23 ㎡

Use

Retail / Office / Gymnasium

Structure(note)

and floors
Master lease

XYMAX KYUSHU Corporation

Type of master lease

Pass-throughTrust expiration dateJuly 31, 2030

company
Security(note)
SAR
Unsecured

Status of leasing
Total
Total leasable area

12,600.67 ㎡

number of

22

tenants
Monthly rent(including
Total leased area

common12,600.67 ㎡

25,083,122 yen

area
maintenance
fee)

Security and guarantee
deposits

206,635,575 yen

Occupancy rate
April

May

June

July

August

2020

2020

2020

2020

2020

100.0%

100.0%

Special notation

6

100.0%

100.0%

100.0%

(Note) This property is registered as being comprised of 5 buildings, and the total floor area, total leasable area, total leased area
are the total of the 5 buildings. Details of individual buildings are described below. (Areas stated are registered areas.)
・ Building A: Single-storied building, steel framed with flat roof/ store/ 8,865.07㎡/ construction completed on August 23,
2007
・ Building C: Two-storied building, steel framed with alloy plated steel shingle roof/ office/ 1st floor 672.00㎡ 2nd floor 672.00㎡ Total of 1,344.00㎡/ construction completed on August 23, 2007
・ Building D: Single-storied building, steel framed with alloy plated steel shingle roof/ store/ 530.20㎡/ construction completed
on August 23, 2007
・ Building E: Single-storied building, steel framed with alloy plated steel shingle roof/ store & warehouse/ 418.00㎡/
construction completed on August 23, 2007
・ Building B: Two-storied building, steel framed with alloy plated steel shingle roof/ practice area/ 1st floor 1,053.71㎡ 2ndfloor 919.25㎡ Total of 1,972.96㎡/ construction completed on December 5, 2007.

7

5. Summary of Appraisal Report
Urban Park Tokiwadai Koen
(Unit：Yen)
Summary of Real Estate Appraisal Report
Property nameUrban Park Tokiwadai Koen

Appraisal value

3,770,000,000

Appraisal firm

The Tanizawa Sogo Appraisal Co., Ltd.

Date of value

September 1, 2020
Item

Indicated value by income approach
Indicated value of direct
capitalization approach

Details

Description, etc.

3,770,000,000

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

3,830,000,000(1)Operating revenue ((a)−(b))

276,916,237(a)Gross potential income

298,629,777(b) Vacancy loss, etc.

21,713,540(2) Operating expenses

81,231,631

Maintenance and management
Fee
Utilities expenses
Repair expenses

Calculated by capitalization rate based on a net revenue of the stable mid-to-longtermCalculated by rent fee level based on the stable mid-to-long term
Referred to property similar properties to estimate the vacancy rate and supply/demand trends,

15,688,728

Appraised based on actual data and the MPM agreement

3,711,312

Appraised based on actual data.

17,555,090

Appraised by reference to repair and renewal expenses in the ER and the level ofsimilar real estate.

Property management fee

5,332,375

Estimated based on the MPM agreement.

Tenant leasing cost, etc.

12,356,982

Calculated by new tenants recruitment and fees on contract renewal

Property taxes

21,787,500

Based on the documents relating to taxes and public dues

Insurance premium
Other expenses(3) Net operating income(NOI=(1)−(2))(4) Financial interests on deposits(5) Capital expenditures(6) Net cash flow
(NCF=(3)+(4)−(5))(7) Capitalization rate
Indicated value of DCF method

645,900
4,153,744

Appraised according to financial performance etc..

195,684,606
195,652
19,910,000

Appraised investment return as 1.0%
Appraised based on the ER and similar cases.

175,970,258
4.6 %Appraised by comparing with cap rate of similar real estate.

3,750,000,000

Discount Rate

4.7 %Terminal capitalization rate

4.8 %Indicated value by cost approach

Based on insurance materials.

3,470,000,000

Ratio of land

73.2 %

Ratio of building

26.8 %

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

Matters considered in reconciliation of indicated values andDetermined by using the indicated value by income approach as standard and bydetermination of appraisal values

verifying with the indicated value by cost approach.

8Suroy Mall Nagamine(Unit：Yen)
Summary of Real Estate Appraisal Report
Property nameSuroy Mall Nagamine

Appraisal value

3,450,000,000

Appraisal firm

The Tanizawa Sogo Appraisal Co., Ltd.

Date of value

July 31, 2020
Item

Indicated value by income approach
Indicated value of direct
capitalization approach

Details
3,450,000,000

3,380,000,000(1)Operating revenue ((a)−(b))

318,421,527(a)Gross potential income

335,591,814(b) Vacancy loss, etc.

17,170,287(2) Operating expenses

116,864,672

Maintenance and management

Description, etc.
Estimated by using the indicated value by DCF method as standard and verifying with
the indicated value by direct capitalization method.
Calculated by capitalization rate based on a net revenue of the stable mid-to-longtermCalculated by rent fee level based on the stable mid-to-long term
Referred to property similar properties to estimate the vacancy rate and supply/demand trends,

19,664,705

Appraised based on actual data and the FM agreement

Utilities expenses

57,481,445

Appraised based on actual data.

Repair expenses

3,045,000

Appraised by the ER and the level of similar real estate.

Property management fee

6,180,000

Estimated based on the management related agreements.

Tenant leasing cost, etc.

2,086,254

Calculated by new tenants recruitment fee.l

Property taxes

26,103,100

Based on the documents relating to taxes and public dues

Fee

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

712,060
1,592,108

Based on insurance materials.
Appraised according to financial performance etc..

201,556,855(4) Financial interests on deposits

1,717,817

Appraised investment return as 1.0%

(5) Capital expenditures

7,105,000

Appraised based on the ER and similar cases.

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

Terminal capitalization rate
Indicated value by cost approach

196,169,672
5.8 %Appraised by comparing with cap rate of similar real estate.

3,480,000,000
5.9 %

6.0 %
3,670,000,000

Ratio of land

80.6,%

Ratio of building

19.4 %

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

Matters considered in reconciliation of indicated values andDetermined by using the indicated value by income approach as standard and bydetermination of appraisal values

verifying with the indicated value by cost approach.

96.

Profile of the seller and planned buyer(1) Seller Profile (Urban Park Tokiwadai Koen)
Name

Godo Kaisya SAPR8

Location

Capital5-1-4 Toranomon, Minato-ku, Tokyo
Representative partner: Ippanshadanhoujin SAPR Holding8
Operational executor: Takaaki Fukunaga
1. Acquisition, ownership, and disposition of beneficiary interest in trust of real estate
2. Acquisition, ownership and disposition of loan claims
3. Acquisition, ownership and disposition of corporate bonds, silent partnership interest
and other securities
4. Sales, leasing, management, acquisition, ownership, disposition and use of real estate
5. All business incidental to the above
300,000 yen

Established

October 17, 2018

Representative
Main Business Description

Net Asset
Total Asset

The information is undisclosed as consent to disclosure has not been obtained from the

Major shareholder andseller.

ratio of shareholding
Relationship with SAR or the Asset Manager
Capital Relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

Relationship
Business Relation

There is no business relationship to report.

Related party or not

The seller does not fall under the category of interested person, etc. as provided in Act on
Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended,hereinafter referred to as the “Investment Trusts Act”)(2) Planned buyer profile (Suroy Mall Nagamine)
The planned buyer is a domestic operating company, however, consent to disclose the company has notbeen obtained, so it is not disclosed. To note, there are no capital, personal, or trading relationship between
the planned buyer and SAR/Asset Manager which needs to be stated. The planned buyer does not fall under
the category of interested person, etc. as provided in Investment Trusts Act.
7.

Status of Parties Related to the Acquisition of the Property
The buyer of the property is not classified as a special related party of SAR and of the Asset Manager.

8.

Transaction with interested person, etc.
Not applicable.

9.

Overview of brokers(1) Urban Park Tokiwadai Koen
① Broker ProfileName

ASSETS BRAIN.Co

Location

1-11-1, Kanda Jinbo-cho, Chiyoda-ku, Tokyo

Representative

Representative Kunihiko Taue

Main business description

1.

The company, by holding shares in companies which conduct the following businesses,
aims to control and manage the business activities of such companies.
(1) Business of owning, leasing, sale and purchase, asset management, and brokerage10

of real estate.
(2) Real estate appraisal and consulting business.
(3) Type II financial instruments business, investment advisory and agency business,and investment management business as set forth in the Financial Instruments andExchange Act.
(4) Businesses related to computer systems and software development andoperations, and operation of real estate websites.
(5) All business incidental to or related to each of the preceding items.
2.

The company may operate the businesses described in each item of the preceding
paragraph and any businesses incidental to or related to such businesses.

Capital

160 million yen

EstablishedMay 15, 2014

Relationship with SAR or the Asset Manager
Capital Relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

Relationship
Business Relationship

There is no business relationship to report.

Related party or not

The planned buyer does not fall under the category of interested person, etc. as provided
in the Investment Trusts Act.

② Breakdown and value of the brokerage commission
Breakdown of Brokerage Fee

Brokerage fee for transfer of Trust Beneficiary Interest

Amount of Brokerage Fee

8 million yen (excluding consumption tax and local consumption tax.)(2)

Suroy Mall Nagamine
Not applicable.

10. Schedule for the Transactions(1)
Acquisition of Urban Park
October 5, 2020
October 16, 2020

(2)

Tokiwadai Koen
Acquisition decided
Sign the Trust Beneficial Interest Sale and Purchase Agreement
Acquisition of beneficiary interest in trust (planned)
Payment of acquisition price (planned)
Conclusion of a property management agreement (planned)

Transfer of Suroy Mall Nagamine
October 5, 2020
Transfer decided
Sign the Trust Beneficial Interest Sale and Purchase Agreement
October 15, 2020
Transfer of ownership of real estate beneficiary interest in trust (planned)
Receipt of transfer price for ownership of real estate beneficiary interest in
trust (planned)

11. Settlement method
The settlement for the Asset to be Acquired is expected to take place by making lump-sum payment of theacquisition price on the scheduled acquisition date.
12. Future outlook

11

The impact of the Asset Replacement is insignificant, and the impact on the forecast of operating results forthe fiscal period ending January 31, 2021 (August 1, 2020 to January 31, 2021) and the fiscal period ending
July 31, 2021 (February 1, 2021 to July 31, 2021)which was announced by SAR in the “(REIT) Financial Reportfor Fiscal Period Ended July 31, 2020” dated September 14, 2020 is minimal, and there are no changes to theforecast.

<Appendix>
・Reference
Material 1
・Reference
Material 2・Reference
Material 3
・Reference
Material 4

Portfolio list after the Transaction
Summary of earthquake risk analysis
Location maps / photos of exterior of Asset to be Acquired
The terms used in the table of Description of Asset to be Acquired and Asset tobe Transferred＊ Star Asia Investment Corporation website address:

http:/ / starasia-reit.com/ en/This is an English translation of the announcement in Japanese dated October 5, 2020. However, no assurance orwarranties are given for the completeness or accuracy of this English translation.

12

Reference Material 1

Portfolio list after the Transaction(Reflected the Asset Replacement to the existing portfolio of SAR at the date of this document)<Real Estate, etc.>

Property

Property NameNo.

OFC-01

Minami-Azabu Shibuya Building

OFC-03

Honmachibashi Tower

OFC-04

Nishi-Shinjuku Matsuya Building

OFC-06
OFC-08(Planned)

Real estate

Acquisition

appraisal

Investment

Location

Price

value

ratio

(Note1)(million(million

(%)

yen)

yen)

(Note4)(Note2)(Note3)

Minato Ward, Tokyo

2,973

3,070

1.8

6,065

6,960

3.6

Shibuya Ward, Tokyo

1,763

2,510

1.1

Shibuya MK Building

Shibuya Ward, Tokyo

2,042

3,260

1.2

Asahi Building

Yokohama City, Kanagawa

6,320

7,840

3.8

OFC-09Hakata-eki East Place

Yokohama City, Kanagawa

2,286

2,630

1.4

OFC-10Nihonbashi Hamacho Park Building

Chuo Ward, Tokyo

1,450

1,550

0.9

OFC-11

Amusement Media Gakuin Honkan

Shibuya Ward, Tokyo

2,580

2,690

1.5

7,440

7,530

4.5

Chuo Ward,
Osaka City, Osaka

Higashinada Ward,

OFC-12

Higashi Kobe Center Building

OFC-13

Amusement Media Gakuin Shinkan

Shibuya Ward, Tokyo

1,020

1,160

0.6

OFC-14

Seishin BLDG.

Shinjyuku Ward, Tokyo

11,200

11,2006.7

OFC-15NK BLDG.

Chiyoda Ward, Tokyo

5,350

5,350

3.2

OFC-16

Tsukasamachi BLDG.

Chiyoda Ward, Tokyo

4,590

4,590

2.8

OFC-17

Takadanobaba AccessShinjyuku Ward, Tokyo

3,990

3,990

2.4

OFC-18

Azabu Amerex BLDG.

Minato Ward, Tokyo

2,780

2,780

1.7

OFC-19Hiei-Kudan BLDG.

Chiyoda Ward, Tokyo

2,400

2,400

1.4

OFC-20Shin-Yokohama Nara BLDG.

Yokohama City, Kanagawa

2,300

2,300

1.4

OFC-21The Portal Akihabara

Chiyoda Ward, Tokyo

1,510

1,510

0.9

68,05973,32040.9

Kobe City, Hyogo

Office Subtotal
RTL-01

La Park Kishiwada

Kishiwada City, Osaka

5,400

5,400

3.2

RTL-02

Suroy Mall Chikushino

Chikushino City, Fukuoka

6,550

6,550

3.9

RTL-03

Seiyu Minakuchi

Koka shi, Shiga

3,320

3,320

2.0

15,27015,270

9.2

RSC-01

Urban Park Azabujuban

Minato Ward, Tokyo

2,045

2,480

1.2

RSC-02

Urban Park Daikanyama

Shibuya Ward, Tokyo

6,315

8,310

3.8

RSC-05

Urban Park Namba

Osaka City, Osaka

1,490

1,650

0.9

RSC-06

Urban Park Gokokuji

Toshima Ward, Tokyo

1,460

1,510

0.9

RSC-07

Urban Park Kashiwa

Kashiwa City, Chiba

1,186

1,190

0.7

RSC-08

Urban Park Ryokuchi Koen

Suita City, Osaka

1,550

1,620

0.9

RSC-09Urban Park Koenji

Suginami Ward, Tokyo

1,167

1,180

0.7

RSC-10Urban Park Ichigao

Yokohama City, Kanagawa

1,810

1,850

1.1

RSC-11

Urban Park Gyotoku

Ichikawa City, Chiba

1,430

1,500

0.9

RSC-12

Shiroi Logiman

Shiroi City , Chiba

2,470

2,470

1.5

RSC-13

Urban Park Sekime

Osaka City, Osaka

2,150

2,150

1.3

RSC-14

Urban Park Imazato

Osaka City, Osaka

993

93

0.6

Retail Subtotal

13

RSC-15

Urban Park Yoyogi

Shibuya Ward, Tokyo

1,740

1,740

1.0

RSC-16

Urban Park Tokiwadai Koen

Yokohama City, Kanagawa

3,506

3,770

2.1

Residence Subtotal

29,31232,413

17.6

6,942

7,310

4.2

3,560

4,170

2.1

LGC-01

Iwatsuki Logistics

Saitama City, Saitama

LGC-02

Yokohama Logistics

LGC-03

Funabashi Logistics

Funabashi City, Chiba

7,875

8,650

4.7

LGC-04

Baraki Logistics

Ichikawa City, Chiba

4,700

4,850

2.8

LGC-05Tokorozawa Logistics

Tokorozawa City, Saitama

1,300

1,350

0.8

LGC-06

Funabashi Nishiura Logistics Ⅰ

Funabashi City, Chiba

3,000

3,020

1.8

LGC-07

Funabashi Nishiura Logistics Ⅱ

Funabashi City, Chiba

821

850

0.5

LGC-08

Matsubushi Logistics

Kitakatsushika, Saitama

2,755

2,860

1.7

LGC-09Funabashi Hi-Tech Park Factory Ⅰ

Funabashi City, Chiba

1,710

1,710

1.0

LGC-10

Funabashi Hi-Tech Park Factory Ⅱ

Funabashi City, Chiba

Kanagawa Ward,
Yokohama City, Kanagawa

702

702

0.4

33,36535,492

20.0

2,069

2,270

1.2

1,750

1,430

1.1

3,827

3,660

2.3

3,248

3,220

2.0

1,970

1,940

1.2

Chiyoda Ward, Tokyo

2,500

2,450

1.5

Edogawa Ward, Tokyo

3,180

3,130

1.9

2,000

1,520

1.2

20,544

19,620

12.3

Logistics facility Subtotal
HTL-01R&B Hotel Umeda East

HTL-02

Smile Hotel Namba

HTL-03

BEST WESTERN Tokyo Nishikasai

HTL-04

BEST WESTERN Yokohama

HTL-05

Hotel WBF Fukuoka Tenjin Minami

HTL-06

GLANSIT AKIHABARABEST WESTERN Tokyo Nishikasai

HTL-07

Grande

HTL-08

Hotel WBF Art Stay Namba

Kita Ward, Osaka City,
Osaka
Naniwa Ward, Osaka City,
Osaka
Edogawa Ward, Tokyo
Tsurumi Ward, Yokohama
City, Kanagawa
Chuo Ward, Fukuoka City,
FukuokaNaniwa Ward, Osaka City,
Osaka
Hotel Subtotal

Total

100.0

(Note1) “Location” states the minimum individual administrative division in the region where the assets held by SAR as of today (excluding the
mezzanine loan debt stated under <Mezzanine> below) (hereinafter “Already Acquired Assets (Real Estate Etc.)”) and the Asset to be
Acquired are located.
(Note2) ”Acquisition price” means the sale and purchase proceeds described in the sale and purchase agreement related to each acquired asset(real estate properties etc.), and “Planned Acquisition Price” means the planned sale and purchase proceeds as stated in the agreement
signed with the Seller in relation to the Asset to be Acquired, and each price is stated by rounding the amounts of less than 1 million yen
to the nearest 1 million yen. The Acquisition Price and the Planned Acquisition Price do not include consumption tax, local consumption
tax, or expenses required for acquisition. However, with respect to “Minami-Azabu Shibuya Building”, as it is based on a sale and purchaseagreement for multiple properties where no price is established for each individual property, the amount derived by prorating the total
sales price of the multiple properties based on the ratio of the appraisal values of each individual property as of the time of theiracquisition is stated as the “Acquisition Price”.
(Note3) ”Real estate appraisal value” states the appraisal values stated in the real estate appraisal reports based on the price as of July 31, 2020,
for already acquired properties, and the appraisal value stated in the real estate appraisal report based on the price as of September 1,
2020 with respect to the Asset to be Acquired.
(Note4) “Investment ratio” shows the ratio of the (planned) acquisition price of each of acquired assets or Asset to be Acquired against the sumof the (planned) acquisition price for acquired assets and Asset to be Acquired rounded to the first decimal place.

14

(Note5) Descriptions on this page exclude Alphabet Seven (60% share in quasi co-ownership) scheduled for sale on December 1, 2020.

Reference Material 2
Type

OfficeRetailResidence

Logistics

Summary of earthquake risk analysis

Property
no.

PML
(%)

Property name

OFC-01

Minami-Azabu Shibuya Building

11.6

OFC-03

Honmachibashi Tower

5.5

OFC-04

Nishi-Shinjuku Matsuya Building

5.5

OFC-06

Shibuya MK Building

7.2

OFC-08Asahi Building

6.2

OFC-09Hakata-eki East Place

4.7

OFC-10Nihonbashi Hamacho Park Building

7.4

OFC-11

Amusement Media Gakuin Honkan

7.6

OFC-12

Higashi Kobe Center Building

8.6

OFC-13

Amusement Media Gakuin Shinkan

9.6

OFC-14

Seishin BLDG.

5.5

OFC-15NK BLDG.

5.4

OFC-16

Tsukasamachi BLDG.

9.4

OFC-17

Takadanobaba Access

3.5

OFC-18

Azabu Amerex BLDG.

10.2

OFC-19Hiei-Kudan BLDG.

3.6

OFC-20Shin-Yokohama Nara BLDG.

4.4

OFC-21The Portal Akihabara

8.2

RTL-01

La Park Kishiwada

14.8

RTL-02

Suroy Mall Chikushino

2.2

RTL-03

Seiyu Minakuchi

4.2

RSC-01

Urban Park Azabujuban

7.5

RSC-02

Urban Park Daikanyama

8.1

RSC-05

Urban Park Namba

8.1

RSC-06

Urban Park Gokokuji

5.1

RSC-07

Urban Park Kashiwa

4.9

RSC-08

Urban Park Ryokuchi Koen

6.4

RSC-09Urban Park Koenji

10.4

RSC-10Urban Park Ichigao

9.8

RSC-11

Urban Park Gyotoku

5.1

RSC-12

Shiroi Logiman

3.5

RSC-13

Urban Park Sekime

11.5

RSC-14

Urban Park Imazato

12.0

RSC-15

Urban Park Yoyogi

7.7

RSC-16

Urban Park Tokiwadai Koen

9.6

LGC-01

Iwatsuki Logistics

3.9

15

Hotel

LGC-02

Yokohama Logistics

13.0

LGC-03

Funabashi Logistics

5.7

LGC-04

Baraki Logistics

3.8

LGC-05Tokorozawa Logistics

9.5

LGC-06

Funabashi Nishiura Logistics Ⅰ

4.8

LGC-07

Funabashi Nishiura Logistics Ⅱ

2.9

LGC-08

Matsubushi Logistics

2.2

LGC-09Funabashi Hi-Tech Park Factory Ⅰ

5.7

LGC-10

Funabashi Hi-Tech Park Factory Ⅱ

5.6

HTL-01R&B Hotel Umeda East

9.0

HTL-02

Smile Hotel Namba

9.2

HTL-03

BEST WESTERN Tokyo Nishikasai

9.0

HTL-04

BEST WESTERN Yokohama

11.1

HTL-05

Hotel WBF Fukuoka Tenjin Minami

5.0

HTL-06

GLANSIT AKIHABARA

3.7

HTL-07

BEST WESTERN Tokyo Nishikasai Grande

6.1

HTL-08

Hotel WBF Art Stay Namba

6.7

Entire portfolio (53 properties) (Note)

3.3(Note) The figure in the entire portfolio column is the PML for the entire portfolio of the Existing Assets and Asset to be
Acquired (except for Asset to be Transferred) based on “portfolio earthquake risk evaluation report” prepared by
TOKIO MARINE & NICHIDO RISK CONSULTING CO., LTD. dated September 2020.
(Note) Descriptions on this page exclude Alphabet Seven (60% share in quasi co-ownership) scheduled for sale on December
1, 2020.

16

Reference Material 3

Location maps /photos of exterior of Asset to be Acquired

Urban Park Tokiwadai Koen
<Exterior>

<Map>

17

Reference Material 4

The terms used in the table of Description of Asset to be Acquired and Asset to beTransferreda.

Explanation on “Property no.” and “Type”

Property Number column and Type column: Each of Asset to be Acquired and Asset to be Transferred by SAR iscategorized by use of OFC (office), RTL (commercial / retail), RSC (residence), LGC (logistics), or HTL (hotel). Then,for each category, serial numbers are given to the assets in the category. In case of a property which could
straddle two or more categories, it shall fall under the category from which the property generates the largest
sum of assumed rent income.
b.

Explanation on “Overview of specified asset”(a)“Trust expiration date” column: Herein is shown the planned date of trust expiration as of theplanned acquisition date. As for Asset to be Transferred, the trust expiration date which is stipulated
in the existing contract as of today is shown.

(b)“Planned Acquisition price” column: Herein is shown the planned acquisition price of the Asset to
be Acquired as described in the purchase agreement of the Asset to be Acquired (excluding
consumption taxes, local consumption taxes, and expenses necessary for the acquisition), afterrounded to the nearest million yen.
“Planned Transfer price” column: Here in shown the planned transfer price of Asset to beTransferred as described in the purchase agreement of the Asset to be Transferred (excluding
consumption taxes, local consumption taxes and expenses necessary for the transfer), after rounded
to the nearest million yen.

(c)“Planned Acquisition Date” column: Herein is shown the planned MMDDYY of acquisition by SAR.
“Planned Transfer Date” column: Herein is shown the planned MMDDYY of transfer by SAR.

(d)“Location” column: Herein is shown the certified address in registry. “Indication of residential
address” column: Herein is shown the postal address. If postal address is not available, registeredaddress of the property (if there are two or more of them, one is selected) is shown.

(e)“Land” column:(ⅰ) “Type of ownership” column: Herein is shown the type of right(s) held by respective trusteeof the Asset to be Acquired or of the Asset to be Transferred.
(ⅱ) “Site area” column: Herein is shown the land area as recorded in registry, unless otherwise
noted. For this reason, it possibly might not be equal to the actual.
(ⅲ) “Use district” column: Herein is shown the type of use in accordance with Article 8, Paragraph
1 and Item 1 of the Urban Planning Act (Act No.100 of 1968; including its amendments)(“Urban Planning Act”).
(ⅳ) “Building coverage ratio” column and “Floor area ratio” column: Herein is shown the pertinent
figure in each column in accordance with the relevant laws and regulations (the BuildingStandards Act, the Urban Planning Act, etc.)(f) “Building” column:(ⅰ) “Type of ownership” column. Herein is shown the type of right(s) or the type of planned
right(s) held by respective trustee of the Asset to be Acquired or the Asset to be Transferred(ⅱ) “Total floor area” column: Herein is shown the sum total of floor areas as recorded in registry,
unless otherwise noted. For this reason, it possibly might not be equal to the actual figure.
(ⅲ) “Use” column: Herein is shown the registered use or, if multiple uses are registered the18representative use from what are recorded in registry, it possibly might not be equal to theactual representative use.
(ⅳ) “Construction completion” column: Herein is shown MMDDYY of the representative building
first built as recorded in registry.
(ⅴ) “Structure and floors” column: Herein is shown the structure of the representative building,etc. as recorded in registry. It possibly might not be equal to the actual structure. As for thebuilding with compartmentalized ownership, the structure and the number of floors forthe entire building are shown.
(g)“Property management company” column: Herein is shown the name of property managementcompany (“PM Company”), to which property management operation is (planned to be) entrusted
as of today.

(h)“Master lease company” column: Herein is shown the name of the master lease company, to whichmaster lease operation is (planned to be) entrusted, as of today.

c.

Explanation on “Status of leasing”(a)“Total leasable area” column: Herein is shown the sum total of leasable floor areas of building of
the Asset to be Acquired or of the Asset to be Transferred (in case common space is also leased,
area of that space is included in the total). The figure does not include from area of the land lots
leasable for parking and other purposes. Leasable area is counted not from registry data but
drawings of the buildings, so it possibly might not be equal to the total floor area as recorded inregistry.
Please note that the source data for the column represent what were provided by the current
owner(s) of the Asset to be Acquired as of August 31, 2020.

(b)“Total leased area” column: Herein is shown the sum total of the floor areas to be leased as
described in lease agreement for each of the Asset to be Acquired or Asset to be Transferred as ofAugust 31, 2020 out of the leasable area. The figure does not include the area of the land lots to beleased for parking and other purposes. Please note that the source data for the column represent
what were provided by the current owner(s) of the Asset to be Acquired as of August 31,2020.

(c)“Occupancy rate” column: Herein is shown the percentage of total leased floor area over the total
leasable floor area of the Asset to be Acquired or of the Asset to be Transferred, after rounded to
the first decimal place. Please note that the source data for the column represent what were
provided by the current owner(s) of the Asset to be Acquired as of August 31, 2020.

(d)“Total number of tenants” column: Herein is shown the total number of tenants as confirmed withthe lease agreements effective as of August 31, 2020 of the Asset to be Acquired or the Asset to beTransferred. In case a specific tenant uses two or more rooms in one of the Asset to be Acquired or
the Asset to be Transferred, such tenant is counted only once for the asset. Also, in case a specifictenant signs lease agreements for rooms in two or more assets, the tenant shall be counted for eachof the assets separately. In case a pass-through type of master lease agreement (a lease agreementin which the master lessee receives rent from end tenants and pay the same amount to the lessor)
is executed for any of the Asset to be Acquired or the Asset to be Transferred, total number of theactual (end) tenants under the master lease agreement for the asset is shown herein.

(e)“Monthly rent (including common area maintenance fee)” column: Herein is shown the total of19rent amounts as described in lease agreements with respective tenants as of August 31, 2020
(confined to room rents; excluding the charges for warehouses, sign boards and parking lots; but
including the common service expenses; and free rent cases as of the same date are not considered),
after rounded to the nearest thousand yen.
(f)“Security and guarantee deposits” column: Herein is shown the sum total of refundable deposits as
required in lease agreements effective as of August 31, 2020 (only for the tenants who actually werein respective rooms at the time) of the Asset to be Acquired or of the Asset to be Transferred. Incase master lease agreement is executed for any of the Asset to be Acquired or Asset to beTransferred, sum total of refundable deposits as described in the individual lease agreements withrespective (end) tenants is calculated to be shown in the column.

d.

Explanation on “Special notations”
Special notation column: Herein is shown a description not only on the items considered material in
relation to the involved rights and assumed uses but also on the appraisal value of, profitability of, andthe other items considered material in relation to the disposability of the Asset to be Acquired or of theAsset to be Transferred.

e.

Explanation on “Summary of real estate appraisal report”(a)“Summary of real estate appraisal report” column: Herein is shown a summary of respective
appraisal report, which was prepared either by Japan Real Estate Institute and The Tanizawa Sogo
Appraisal Co., Ltd. for the Asset to be Acquired or the Asset to be Transferred.

(b)“Appraisal value” column: Herein is shown only the opinions on the value of respective property asof the date of appraisal, expressed by the appraiser who did the appraisal of the property, in
accordance with the Act on Real Estate Appraisal (Act No.152 of 1963; including its amendments)
and commonly accepted appraisal standards for real estate properties, etc.

(c)

In case appraisal is once again undertaken for the same property, its result could be different fromthe previous result because appraiser and/ or appraisal method and/ or appraisal timing is different.
Also, it is requested to note that any appraisal result for any property is not what guarantees orpromises the actual tradability of the property at the appraised value whether for right now or forany moment in the future.

(d)None of Japan Real Estate Institute and The Tanizawa Sogo Appraisal Co., Ltd. who conductedappraisal is an interested party of neither SAR nor the Asset Manager.

f.

Explanation of the Section entitled “Property Description and Acquisition Highlight based on theinvestigation by the Asset Manager”
The Asset Manager has described, by making reference to real estate appraisal reports and market
reports etc. and by taking into account the results of individual investigations made on its own, thebasic attributes and characteristics of the relevant properties, and has also described the backgroundleading to acquisition of the relevant properties (i.e. for those properties acquired from sponsor groups,
the name of the sponsor group, and with respect to properties acquired based on sale information
obtained by the Asset Manager individually and on its own, the background to such acquisition). The“<Sponsor Fund>” means it has been acquired from a sponsor group, “<Outside Acquisition>” means
it has been obtained from a third party, “<Bilateral Negotiated Transaction> means it has been acquired
based on bilateral negotiations from a third party, and “<Warehousing>” means that it has beenobtained by using the warehousing function of a sponsor group.

20

g.

Explanation regarding the Section “Demographic Analysis etc., Market Analysis, and the AssetManager’s Individual Analysis”
The Asset Manager has described its own individual market analysis made based on informationfrom various real estate information specialized firms and disclosed materials.
h.

Explanation regarding the Section “Comprehensive Evaluation by SAR”
SAR’s own individual assessments are stated taking into account paragraphs f. and g. above.

21