March 17, 2017
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: Toru Sugihara
Director and CFO
TEL: +81­3­5425­1340

Notice Concerning Revision to Forecasts for Operating Results for the 3rd Fiscal Period Ending July 31,2017 and Forecasts for Operating Results and Distribution for the 4th Fiscal Period Ending January 31,
2018
Star Asia Investment Corporation (“SAR”) announces that it has decided to revise the operating results forecasts
for the fiscal period ending July 31, 2017 (3rd fiscal period) (February 1, 2017 to July 31, 2017) described in“Notice Concerning Revision to Forecasts for Operating Results and Distribution for the 3rd Fiscal Period Ending
July 31, 2017” announced on February 28, 2017. SAR also announces the operating results forecasts anddistribution forecasts for the fiscal period ending January 31, 2018 (4th fiscal period) (August 1, 2017 – January
31, 2018) as described below.

1. Revision to forecasts for operating results for the fiscal period ending July 31, 2017
OperatiOperating Ordinaryng
incomeincomerevenue(million(million(million
yen)
yen)
yen)

Net
income(millionyen)

Cashdistribution perunit (notincluding cash
distribution inexcess of
earnings) (yen)Cashdistribution
in excess ofearnings perunit (yen)Cashdistribution perunit (including
cash
distribution inexcess of
earnings) (yen)Previously
announced
forecasts (A)

2,818

1,814

1,662

1,595

4,340

0

4,340

Revisedforecasts (B)

3,135

2,071

1,798

1,798

4,340

0

4,340

Change(C)=(B)­(A)

316

257

136

202

0

0

0

Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

1

Rate of change(D)=(C)/(A)

11.2%

14.2%

8.2%

12.7%

(Reference)
Expected number of investment units issued and outstanding as of the end of the fiscal period: 414,300 units(Refer to the “Investment units” in the Assumptions described in the exhibit.)

2. Forecasts for operating results and distribution for the fiscal period ending January 31, 2018
Operating Operating
revenueincome(million(millionyen)
yen)

Ordinary
income(millionyen)Netincome(millionyen)

Cashdistribution
per unit (notincluding cash
distribution inexcess of
earnings) (yen)Cashdistribution
per unit(including
cash
distribution
in excess ofearnings)
(yen)

Cash
distribution
in excess ofearnings perunit (yen)Fiscal period
endingJanuary 31,

3,103

2,009

1,859

1,783

4,039

0

4,039

2018
(Reference)
Expected number of investment units issued and outstanding as of the end of the fiscal period: 414,300 units(Refer to the “Investment units” in the Assumptions described in the exhibit.)(Notes)1.

2.
3.

The above forecasts are current forecasts based on “Assumptions Underlying Operating Results Forecasts andDistribution Forecasts for Fiscal Periods Ending July 31, 2017 and Ending January 31, 2018” below and the actual
operating revenue, operating income, ordinary income, net income, cash distribution per unit, etc. may differ fromthem. In addition, SAR does not guarantee any actual cash distribution amount by announcing the forecast figures.
The forecasts may be subject to revision when a disparity beyond a certain degree is expected between the above
forecasts and actual figures.
Amounts are rounded down to the nearest specified unit and percentage figures are rounded to the first decimal
place.

3. Reason for revisions and announcement
SAR revised the forecasts as the assumptions underlying operating results forecasts for the fiscal period
ending July 31, 2017 described in “Notice Concerning Revision to Forecasts for Operating Results anddistribution for the 3rd Fiscal Period Ending July 31, 2017” announced on February 28, 2017 have changed
due to acquisition of real estate beneficiary interests in trust of six properties described in “NoticeConcerning Acquisition and Leasing of Real Estate Beneficiary Interests in Trust” announced today andissuance of new investment units, and also announces the operating results forecasts and distribution
forecasts for the fiscal period ending January 31, 2018.
Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

2* This material is distributed to the press club of the Tokyo Stock Exchange (Kabuto Club), the pressclub of the Ministry of Land, Infrastructure, Transport and Tourism, and the press club forconstruction trade publications of the Ministry of Land, Infrastructure, Transport and Tourism.
* Star Asia Investment Corporation website address: http://starasia­reit.com/en/

Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

3

[Exhibit]
Assumptions Underlying Operating Results Forecasts and Distribution Forecasts
For Fiscal Periods Ending July 31, 2017 and Ending January 31, 2018
Item

Assumptions

Calculation period

Fiscal period ending July 31, 2017: February 1, 2017 – July 31, 2017 (181 days)
Fiscal period ending January 31, 2018: August 1, 2017 – January 31, 2018 (184 days)

Investment assets

For the real estate beneficiary interests in trust of the 18 properties held by SAR as ofthe date of this document (hereafter referred to as the “Existing Properties” in theseassumptions), it is assumed that there will be no change in the investment assets(newproperty acquisitions, sales of the Existing Properties, etc.) other than acquisition ofreal estate beneficiary interests in trust of the following six properties (the “Property
Planned for the Acquisition”) and transfer of real estate beneficiary interests in trustof the following one property (hereinafter referred to as the “Acquisition” and“Transfer,” respectively) through the end of the fiscal period ending January 31, 2018.
<Acquisition>
Property name: OFC­09 Hakata­eki East Place, RSC­07 Urban Park Kashiwa, LGC­04
Baraki Logistics, LGC­05 Tokorozawa Logistics, HTL­03 Best WesternTokyo Nishikasai, HTL­04 Best Western Yokohama
Acquisition date: April 6, 2017
<Transfer>
Property name: OFC­02 Oak Minami­Azabu
Transfer date: March 31, 2017 Quasi co­ownership interest: 49%
August 1, 2017 Quasi co­ownership interest: 51%
In practice, this may vary due to changes in investment assets.

Operatingrevenue

Rent revenues from the Existing Properties are calculated based on the rent stated in
the lease agreements that are effective as of the date of this document. Rent revenues
from the Properties Planned for the Acquisition are calculated based on theinformation from the seller and rent stated in the lease agreements that will beeffective as of the date of acquisition taking factors such as market movement into
consideration, respectively.
As to operating revenue, it is assumed that no rent payments will be delinquent or
declined by tenants.
Gain on sales of real estate property from the transfer of the asset on February 1, 2017is expected to be 153 million yen for the fiscal period ending July 31, 2017 as describedin “Notice Concerning Acquisition and Transfer of Real Estate Beneficiary Interests inTrust” announced on December 5, 2016.
Gain on sales of real estate property from the Transfer is expected to be 734 million yen

Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

4

Item

Assumptions
for the fiscal period ending July 31, 2017 and 769 million yen for the fiscal period
ending January 31, 2018.

Operatingexpenses

Among expenses related to rent business of the Existing Properties, which are theprincipal operating expenses, expenses excluding depreciation are calculated on thebasis of historical data, reflecting variable factors of expenses.
Fixed property taxes, city planning taxes and other public charges are expected to be
156 million yen for the fiscal period ending July 31, 2017 and 142 million yen for the
fiscal period ending January 31, 2018.
For the Property Planned for the Acquisition, fixed property taxes, city planning taxes
and other public charges in fiscal 2017 will be settled on a pro rata basis based on thenumber of days of ownership with the seller at the time of acquisition of the properties.
However, in the case of SAR, the settled amount will be included in the acquisition cost
and thus will not be recorded as expenses in the fiscal periods ending July 31, 2017 andending January 31, 2018. In addition, fixed property taxes, city planning taxes and otherpublic charges for the Property Planned for the Acquisition will be recorded as expenses
from the fiscal period ending July 31, 2018.
For the expenditures for repair and maintenance of buildings, 54 million yen is
expected for the fiscal period ending July 31, 2017 and 47 million yen is expected forthe fiscal period ending January 31, 2018 based on repair and maintenance plans drawn
up by the Asset Management Company. However, the expenditures for repair andmaintenance for the fiscal periods could differ significantly from the estimatedamounts, as expenditures may arise urgently due to damage to buildings and suchcaused by unexpected factors, and because the variance in amounts generally tends tobe significant from year to year and repair and maintenance expenses do not arise
regularly.
Depreciation is calculated using the straight line method and is expected to be 291
million yen for the fiscal period ending July 31, 2017 and 312 million yen for the fiscal
period ending January 31, 2018.

NOI(Net Operating
Income)The NOI of SAR’s portfolio is expected to be 1,733 million yen for the fiscal period
ending July 31, 2017 and 1,832 million yen for the fiscal period ending January 31, 2018.
NOI is calculated by using the following calculation method.
NOI = rent revenue – rent expenses (excluding depreciation)Non­operating
expenses

Temporary expenses are expected to be 50 million yen for the fiscal period ending July
31, 2017 as issuance cost of new investment units.
Interest expense and other financial expenses are expected to total 222 million yen for
the fiscal period ending July 31, 2017 and 150 million yen for the fiscal period ending
January 31, 2018.

Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

5

Item

Assumptions

Debt financing

The total amount of interest­bearing liabilities is assumed to be 38,730 million yen as ofthe end of the fiscal period ending July 31, 2017 and 37,350 million yen as of the end of
the fiscal period ending January 31, 2018.
As of today, SAR has 30,800 million yen of outstanding borrowings. In this regard, SAR
plans new borrowings totaling 8,230 million yen on April 6, 2017 from qualified
institutional investors defined in Article 2, paragraph 3, item 1 of the Financial
Instruments and Exchange Act.
It is assumed to repay 300 million yen by the end of the fiscal period ending July 31,2017 by using the payment for issuance of the new investment units throughthird­party allotment described in “Investment units” below.
It is assumed to repay 990 million yen by the end of the fiscal period ending January 31,
2018 by using the proceeds from sale of 51% quasi co­ownership interest in Oak
Minami­Azabu described in the above “Investment assets.”
It is assumed to repay 390 million yen by the end of the fiscal period ending January 31,
2018 by using consumption tax refund resulting from acquisition of the Property
Planned for the Acquisition and payment of other various expenses.

Investment units

It is assumed that, in addition to the total number of investment units issued andoutstanding as of today (344,700 units), all of the new investment units to be issued
through public offering (66,200 units) and all of the new investment units to be issued
through third­party allotment (up to 3,400 units), respectively resolved at the Board of
Directors meeting held today, are issued.
Excluding the above, it is assumed that there will be no changes in the number ofinvestment units issued due to additional issuance, etc. of new investment units
through the end of the fiscal period ending January 31, 2018.
Cash distribution per unit (not including cash distribution in excess of earnings) is
calculated based on the expected number of investment units issued and outstanding
as of the end of the fiscal periods ending July 31, 2017 and ending January 31, 2018
(414,300 units) including new investment units to be issued described above (up to
69,600 units).

Cash distribution
per unit(not including
cash distribution
in excess ofearnings)

Cash distribution per unit (not including cash distribution in excess of earnings) is
calculated on the assumption described in the cash distribution policy stipulated in
SAR’s Articles of Incorporation.
It is assumed that derivative transactions (interest rate swaps) will continue to be
conducted. However, It is assumed that deferred losses on hedges, which is an item of
deduction from net assets (those provided in Article 2, item 30 (b) of the Ordinance on
Accountings of Investment Corporations), is nonaccrual in the fiscal periods ending July
31, 2017 and ending January 31, 2018, and cash distribution per unit (not including cash

Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

6

Item

Assumptions
distribution in excess of earnings) will not be affected by changes in items of deduction
from net assets in the calculation.
It is possible that the cash distribution per unit (not including cash distribution in excessof earnings) could change due to various factors, including changes in investment
assets, changes in rent revenue accompanying changes in tenants, etc., or unexpected
repair and maintenance, etc. In addition, cash distribution per unit (not including cash
distribution in excess of earnings) may be affected by changes in items of deduction
from net assets.
As to 769 million yen expected for the fiscal period ending January 31, 2018 as gain on
sales of real estate property from the Transfer described in the above “Operating
revenue,” 110 million yen is expected to be recorded as voluntary reserve and beinternally retained. In practice, the amount of voluntary reserve may change.
SAR assumed 99 million yen as internal reserves by a part of gain on sale of real estate
property in “Notice Concerning Acquisition and Transfer of Real Estate BeneficiaryInterests in Trust” announced on February 28, 2017, as described in “Assumptions
Underlying Operating Results Forecasts for Fiscal Period Ending July 31, 2017” attached
to “Notice Concerning Revision to Forecasts for Operating Results and Distribution forthe 3rd Fiscal Period Ending July 31, 2017” announced on February 28, 2017. SAR haschanged such assumption and it is now assumed that such internal reserves will not be
made.

Cash distribution
in excess ofearnings per unit

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

Other

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

Note:

This press release does not in any way constitute any part of an offering of securities for investment. Thispress release has been prepared for the purpose of announcing to the public certain matters relating torevision to forecasts for operating results for the period ending July 31, 2017, and forecasts for operating
results and distribution for the period ending January 31, 2018, and not for the purpose of soliciting any
investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in
the United States. The securities referred to herein have not been, and will not be registered under theUnited States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in
the United States absent registration or an exemption from registration under the Securities Act. No offeringor sale of securities in the United States will be made in connection with the above­mentioned transactions.
This press release is not for publication, distribution or release, directly or indirectly in or into the UnitedStates of America.

7