November 28, 2018
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: +81-3-5425-1340

Notice Concerning Acquisition of Asset (Silent Partnership Equity Interest)

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 the following acquisition of anasset (Subordinated silent partnership equity interest) (the “Acquisition”).
1. Overview of acquisition
Subordinated partnership equity interest that has beneficiary: right of trust placing real estate in trust as asset undermanagement
Subordinated silent partnership equity interest in Godo Kaisya(2) Name of asset to be acquired:
SAPR8
Urban Park Mitsuike Koen (Note 1)
Urban Park Tokiwadai Koen (Note 1)(3) Real estate in trust:(Hereinafter, separately or collectively referred to as “theProperty.”)
100 million yen (4.9% of the total amount of equity investment in(4) Equity investment amount:: silent partnership (Subordinated silent partnership equity
interest)) (Note 2)(5) Planned agreement conclusion date: : November 28, 2018(6) Planned acquisition date:: November 29, 2018
(7) Acquisition funds:: Cash on hand
(Note 1) The respective property names will be promptly changed from “Village Mitsuike Koen” and “Village
Tokiwadai Koen” to “Urban Park Mitsuike Koen” and “Urban Park Tokiwadai Koen” following the Acquisitionof the beneficiary right (“the Beneficiary Right”) whereby the above properties are place as real estate intrust of the silent partnership operator.
(Note 2) The amount is rounded to the first decimal place. Note that “total amount of equity investment in silent
partnership” refers to the total of preferential silent partnership equity interest and subordinated silent
partnership equity interest. For details, please refer to “3. Outline of to-be-acquired asset (1) Overview ofthe subordinated silent partnership, the target of equity investment.”(1)

Type of asset to be acquired

2. Reason for acquisition
SAR has been continually executing active management strategies that are unconventional such as its four
asset replacements in pursuit of maximizing unitholders’ value. The Acquisition was determined according tothis aim with the following points being the main factors.
(1) Obtaining stable revenues
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- Regarding the Acquisition, the assets under management, which are real estate in trust as a beneficiaryright of the subordinated silent partnership equity interest, are family-type rental residences (please see
the property features indicated below) for which stable revenues are expected, and SAR has deemed
the properties will be able to realize stable revenues as a subordinated silent partnership equity interest,
which is a planned acquisition asset of SAR.
(2) Effective use of cash on hand
- The Acquisition will be made through the cash on hand of SAR, and SAR has deemed that a boost in
distributable profits can be expected.
(3) Securing opportunities for future external growth in collaboration with the sponsor group- Together with the Acquisition, SAR plans to receive a pledge for the granting of preferential negotiationrights (see “3. Outline of to-be-acquired asset (1) Overview of the subordinated silent partnership, thetarget of equity investment” below) from GK SAPR8, the silent partnership operator, and SAR has
deemed that the Acquisition will contribute to securing opportunities for future growth.
- The Acquisition was realized in collaboration with the sponsor group, and the sponsor group has alsodecided to invest in the subordinated silent partnership equity interest. As such, SAR considers it is aninvestment utilizing sponsor support.
In determining the Acquisition, SAR assessed the following points for real estate that are the real estate in trust.
<Urban Park Mitsuike Koen>
Urban Park Mitsuike Koen is a family-type residence located an approximate 11-minute walk from
Mitsuikemichi bus stop, which is an approximate 7-minute ride by bus from Tsurumi Station on the JR
Keihin-Tohoku Line and Negishi Line.
The Tsurumi area in which the property is located is directly connected by train to major business areas suchas Kawasaki, Yokohama and Shinagawa and is popular as an area in commuting distance to work or school inurban centers. The property is located on a plateau and thus has an excellent view. Located nearby is Mitsuike
Park which was selected as one of Japan’s top 100 spots for cherry blossoms and the area provides a good living
environment with abundant greenery.
As for property specifications, it is a residential property in which all units are 2LDK or 3LDK and the rent
level is competitive compared with that of nearby properties. In addition, there is an indoor children’s spaceand SAR believes the property should appeal greatly to families with small children. Moreover, a large-scalerenovation was implemented in 2016 in which not only the common areas but also the residential exclusive-use
areas were updated such as with the replacement of housing facilities. Therefore, the property is deemed to bereasonably competitive in the market.
<Urban Park Tokiwadai Koen>
Urban Park Tokiwadai Koen is a family-type residence situated on a hill looking out towards Yokohama City. It is
located an approximate 7-minute walk from Yokohama Shindo bus stop, which is an approximate 19-minuteride by bus from Yokohama Station on the JR Keihin-Tohoku Line, Negishi Line, Tokaido Line, Tokyu Toyoko Line,
Keikyu Main Line, Sagami Railway Line, etc. It is also an approximate 15-minute walk from Wada Station on the
Sagami Railway Main Line.
In addition to trains, the Hodogaya area in which the property is situated is intersected by the Daisan-Keihin
Road, Yokohama New Way and the Hodogawa Bypass and has an excellent traffic network for cars. Nearby
there is the Tokiwa Park with a wide expanse of greenery. Along with to open Sotetsu/Toshin Chokutsu-Line,
The New station "Hazawa Yokohama Kokudai" being built within walking distance from the property. With the
backdrop of this excellent living environment with lush greenery, residential demand mainly from family
households is expected as the area has been developed as a residential district.
As for the property specifications, it is a residential property in which all units are 2LDK or 3LDK and the rent2level is competitive compared with that of nearby properties. In addition, there is a car-sharing service
established within the site and thus SAR believes the property should appeal to families using cars. Moreover, alarge-scale renovation was implemented in 2016 in which not only the common areas but also the residential
exclusive-use areas were updated such as with the replacement of housing facilities. Therefore, the property isdeemed to be reasonably competitive in the market.
3. Outline of to-be-acquired asset(1) Overview of the subordinated silent partnership, the target of equity investment
Operator name
Godo Kaisya SAPR8
Effective period ofsilent partnership Till November 30, 2021
agreement
Total amount of
2,050 million yen
equity investment in (Preferential silent partnership equity interest: 1,000 million yen) +silent partnership,(Subordinated silent partnership equity interest: 1,050 million yen)etc.
Overview of silent
The following is an overview of silent partnershippartnership
Godo Kaisya SAPR8

Non-recourse loan
4,930 million yen
Real estate trust
beneficiary right, etc.
6,980 million yen(Note)

Preferential silent partnership equity interest
1,000 million yen
Subordinated silent partnership equity interest

Third parties
Sponsor group
SAR
550 million yen 400 million yen 100 million yen
Star Asia Finance, LLC the sponsor group, will acquire 400 million yen out of
the subordinated silent partnership equity interest in collaboration with SAR
as part of sponsor support (joint investment).
Calculation period:
The three-month periods every year from January 1 to the last day of March,from April 1 to the last day of June, from July 1 to the last day of September
and October 1 to the last day of December in the following year. However,the first calculation period shall be from and include November 29, 2018 to(and including) the last day of March 2019.
Distribution of earnings (losses):In the event that the silent partnership business generates earnings in therespective calculation period, the operator shall in principle distribute toequity investors in the preferential silent partnership (the “preferential silent
partnership members”) the amount sought by multiplying the preferential
silent partnership member’s investment balance as of the first day of thecalculation period by a fixed rate and distribute the remaining amount to thesubordinated silent partnership members according to their subordinatedinvestment ratios. Moreover, in the event that the silent partnershipbusiness generates losses in the respective calculation period, the operator
3

Overview ofpreferential
negotiation rights

shall, with the limit for each silent partnership member being their amountof investment, first distribute the losses to the subordinated silent
partnership members according to their investment ratios and thendistribute losses which could not be distributed to subordinated silent
partnership members to the preferential silent partnership members. Losses
that were unable to be distributed to all silent partnership members shall be
distributed to the operator. Furthermore, in the event that there are
earnings generated by the silent partnership business and there are losses
remaining from prior calculation periods that have been distributed to theoperator and to the silent partnership members, before distributing theearnings to the preferential silent partnership members, the earnings shallbe allotted first to the losses of the operator and then to the losses of thepreferential silent partnership members and, if there are earnings remaining
after distribution to the preferential silent partnership members, saidearnings shall be allotted to the losses of the subordinated silent partnership
members.
Period:From November 30, 2018 to November 30, 2020 (the “Preferential
Negotiation Period”)
Outline of preferential negotiation rights:
SAR plans to receive a pledge for the granting of preferential negotiationrights in which it is granted the right for exclusive preferential negotiations
over third parties with regards to the transaction of the Beneficiary Rightwith the operator during the preferential negotiation period.
Furthermore, should SAR request the acquisition of the Beneficiary Right,
the decision shall be made through negotiations based on the preferential
negotiation prices below. Moreover, the operator shall not conduct any sales
activities whatsoever including the provision of information regarding the
Beneficiary Right to third parties other than the Asset Manager and SAR
during the above period.
Preferential negotiation price:
Urban Park Mitsuike Koen: 3,200 million yen
Urban Park Tokiwadai Koen:3,500 million yen(consumption tax, local consumption tax not included)(Note)

Other:① A decision on acquisition of the Beneficiary Right shall be made afternecessary due diligence, including appraisal of the property value, as
well as due procedures implemented by the Asset Manager② SAR’s plan to acquire preferential negotiation rights regarding the
Beneficiary Right does obligate SAR to acquire the Beneficiary Right;
therefore, SAR may decide not to acquire the Beneficiary Right. Please
note that SAR does not pay any consideration to the operator inconnection with the acquisition of preferential negotiation rights.
③ The operator is not obligated to sell the Beneficiary Right to SAR;
therefore, it is possible that it may decide not to sell the Beneficiary
Right to SAR.
Composition costs, reserve money and such are included in real estate trust beneficiaryright, etc. The total real estate appraisal value for the two properties (real estate in trust)is 7,030 million yen.

4(2) Overview of operator of silent partnership in which equity investment is to be madeName
Godo Kaisya SAPR8
Location
5-1-4 Toranomon, Minato-ku, Tokyo
Representative
Representative partner: Ippanshadanhoujin SAPR Holding8
Operational executor: Takaaki Fukunaga
Main lines of
1. Acquisition, ownership, and disposition of beneficiary interest in trust
businessof 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 anduse of real estate
5. All business incidental to the above
Capital300,000 yen
Established
October 17, 2018
Net asset
The information is undisclosed as consent to disclosure has not beenobtained from the operator.
Total asset
The information is undisclosed as consent to disclosure has not beenobtained from the operator.
Silent partnership
Undisclosed as consent has not been obtained from other silent
equity investor
partnership equity investors
Relationship with SAR or the Asset Manager
CapitalThere is no capital relationship to report
relationship
Personnel
There is no personnel relationship to report
relationship
Business
There is no business relationship to report.
relationship
Related party
The operator does not fall under the category of related party of either
SAR or the Asset Manager. Moreover, the operator does not fall under
the category of interested person, etc. as provided in the Act on
Investment Trusts and Investment Corporations. (Act No. 198 of 1951, as
amended) (“the Investment Trust Law” hereinafter.)
4. Transaction with interested person, etc.
The Acquisition is not a transaction with an interested person, etc. as provided in the Investment Trust Law,nor does the operator fall under the category of interested party prescribed in the “Rules on Transactions with
Interested Parties” set forth by the Asset Manager voluntarily to prevent conflict of interests regarding its
management of SAR’s assets. However, since Star Asia Finance, LLC the sponsor group, shall execute an equity
investment in subordinated silent partnership equity interest in the same line as SAR, deliberation andresolution in accordance with the voluntary rules have been performed conforming to a transaction with aninterested party.
5. Settlement method
SAR will pay the equity investment amount of the silent partnership to the operator in lump sum using cashon hand.
6. Schedule for the Transactions
November 28, 2018:
November 28, 2018:
November 29, 2018:

Decision on acquisition
Conclusion of silent partnership agreement (scheduled)
Equity investment in silent partnership (scheduled)57. Future forecast
The Acquisition is included in the assumptions underlying management status forecast announced in“Financial Report for Fiscal Period Ended July 31, 2018” dated September 13, 2018, and thus there are no
revisions to the management status forecasts for the fiscal period ending January 2019 (August 1, 2018 toJanuary 31, 2019) and for the fiscal period ending July 2019 (February 1, 2019 to July 31, 2019).

68. Content of the Property(1) Urban Park Mitsuike Koen
Type of specified asset
Property nameAcquisition date
Trustee
Trust expiration date
Location (indication of residential
address)
LocationLand

Building

Type of ownership
Site area
Use district
Building coverage
ratio/Floor area ratio
Type of ownership
Total floor area
Use
Construction completion
Structure and floors

Property management company
Master lease company
Status of master leasing
Appraisal firm
Appraisal value
PML
Security
Status of leasing
Total leasable area
Total leased area
Change in occupancy
rate

Beneficiary interest in trust
Urban Park Mitsuike Koen (Note 1)
November 30, 2018
Mizuho Trust & Banking Co., Ltd.
November 30, 2028
6-10-5 Shimosueyoshi, Tsurumi-ku, Yokohama-shi, Kanagawa
Prefecture
6 Chome 338 Shimosueyoshi, Tsurumi-ku, Yokohama-shi, Kanagawa
Prefecture and other
Proprietary ownership
10,216.95 m2
Category 2 medium- to high-rise exclusive residential district
60%/150%
Proprietary ownership
10,918.37 m2 (Note 2)
Apartment house
March 24, 1992
Steel-framed reinforced concrete structure 6 floors above groundand others (Note 2)
HASEKO LIVENET, Inc.
HASEKO LIVENET, Inc.
Pass-through
The Tanizawa Sogo Appraisal Co., Ltd.
3,260,000,000 yen
A bldg./A’ bldg. 12.4%, B bldg. 12.4%, C bldg. 12.4%, C’ bldg. 10.7%,
D bldg. 12.4%, E bldg. 5.1%, F bldg. 11.0%
A pledge with the lender to the operator of non-recourse loan as thefirst pledgee has been established for the trust beneficiary right.
10,362.00 m2
9,438.00 m2
June 2018
July 2018

August2018
92.4%

September
2018
91.1%

October
2018
91.1%

93.0%
93.0%
Number of leasable units 157 units
Number of leased units 143 units
Total number of tenants 135
Monthly rent (including 16,847 thousand yen
common area
maintenance fee)
Security and guarantee 19,898,000 yen
deposits(Note 1) Property name as of the date of this document will be promptly changed from “Village Mitsuike
Koen” to “Urban Park Mitsuike Koen” following the Acquisition of the Beneficiary Right by theoperator.
(Note 2) As for “total floor area,” the total amount for the 5 buildings is indicated. As for “structure andfloor,” that of the main building is indicated.

7

(2) Urban Park Tokiwadai Koen
Type of specified asset
Property nameAcquisition date
Trustee
Trust expiration date
Location (indication of residential
address)
LocationLand

Building

Type of ownership
Site area
Use district
Building coverage
ratio/Floor area ratio
Type of ownership
Total floor area
Use
Construction completion
Structure and floors

Property management company
Master lease company
Status of master leasing
Appraisal firm
Appraisal value
PML
Security
Status of leasing
Total leasable area
Total leased area
Change in occupancy
rate

Beneficiary interest in trust
Urban Park Tokiwadai Koen (Note 1)
November 30, 2018
Mizuho Trust & Banking Co., Ltd.
November 30, 2028
40-1 Tokiwadai, Hodogaya-ku, Yokohama-shi, Kanagawa Prefecture362-36 Tokiwadai, Hodogaya-ku, Yokohama-shi, Kanagawa
Prefecture and other
Proprietary ownership
12,544.61 m2
Category 1 medium- to high-rise exclusive residential district
60%/150%
Proprietary ownership
15,708.08 m2 (Note 2)
Apartment house
February 17, 1994
Steel-framed reinforced concrete structure 5 floors above ground(Note 2)
HASEKO LIVENET, Inc.
HASEKO LIVENET, Inc.
Pass-through
The Tanizawa Sogo Appraisal Co., Ltd.
3,770,000,000 yen
A bldg.12.3%、B bldg.12.3%、C bldg.8.1%、D bldg.8.6%
A pledge with the lender to the operator of non-recourse loan as
the first pledgee has been established for the trust beneficiary right.
14,058.00 m2
12,078.00 m2
June 2018 July 2018
85.4%
86.4%
213 units
183 units
83
18,104 thousand yen

August2018
85.9%

September
2018
86.4%

October2018
85.9%

Number of leasable units
Number of leased units
Total number of tenants
Monthly rent (includingcommon area
maintenance fee)
Security and guarantee
25,880,200 yen
deposits(Note 1) Property name as of the date of this document will be promptly changed from “Village Tokiwadai
Koen” to “Urban Park Tokiwadai Koen” following the Acquisition of the Beneficiary Right by theoperator.
(Note 2) As for “total floor area,” the total amount for the 4 buildings is indicated. As for “structure andfloor,” that of the main building is indicated.

8

Please refer to Table (1) – Table (2) above for the respective overview of real estate that are the real estatein trust of the beneficiary interest in trust. For the terms used in the tables, please refer to below.
・ "Location" column: The postal address. If postal address is not available, registered address of theproperty (if there are two or more, one is selected) is shown.
"Land" column:(i)“Type of ownership" column: The type of right(s) held by respective trustee of thereal estate in trust.
(ii)"Site area" column: The land area as recorded in registry, unless otherwise noted.
For this reason, it may not be equal to the actual figure.
(iii) "Use district" column: The type of use in accordance with Item 1, Paragraph 1,
Article 8 of the Urban Planning Act (Act No. 100 of 1968; as amended) (“Urban
Planning Act”).
(iv) "Building coverage ratio/Floor area ratio" column: The pertinent figure in eachcolumn in accordance with the relevant laws and regulations (the BuildingStandards Act, the Urban Planning Act, etc.).
"Building" column:(i)"Type of ownership" column: The type of right(s) held by respective trustees of
the real estate in trust.
(ii)"Total floor area" column: The sum total of floor areas as recorded in registry,
unless otherwise noted. For this reason, it possibly might not be equal to theactual figure.
(iii) "Use" column: The registered use or, if multiple uses are registered therepresentative use from what are recorded in registry, it is likely not equal to theactual use.
(iv) "Construction completion" column: Date of completion of the representativebuilding when newly built as recorded in registry.
(v)"Structure and floors" column: The structure of the representative building, etc.
as recorded in registry. It may not be equal to the actual structure. As for thebuilding with compartmentalized ownership, the structure and the number offloors for the entire building are shown.
・
・
・

・
・
・

"Property management company" column: The name of the property management company (“PMCompany”), to which property management operation is (planned to be) entrusted as of today.
"Master lease company" column: The name of the master lease company, to which master lease
operation is (planned to be) entrusted, as of today.
“Type of master lease” column: The main type of master lease agreement concluded or scheduled tobe concluded as of today, where “Pass-through” is a master lease agreement in which the master lease
company shall pay the same amount of rent as the rent payable by end tenants to the master lease
company and “Rent guaranteed” is a master lease agreement in which the master lease company shall
pay a fixed amount of rent.
“Appraisal firm” column: The firm to which preparation of an appraisal report with November 1, 2018as the effective date of appraisal was requested as acquisition by SAR.
“Appraisal value” column: The appraisal value stated in the appraisal report.
“PML” column: The PML (Probable Maximum Loss) calculated in the evaluation of seismic risk analysis
conducted by Deloitte Tohmatsu Property Risk Solution Co., Ltd., which was entrusted by SAPR8 as partof due diligence on acquisition of trust beneficiary right. Furthermore, “Probable Maximum Loss”
means the probable maximum loss that may result from an earthquake and, herein, refers to theextent of damage that may be suffered due to an earthquake of the assumed maximum scale
9

・
・

・

・

・

(earthquake with a probability of occurring once in 475 years = earthquake with a probability ofoccurrence in 50 years of more than 10%) in the scheduled use period (50 years = useful life of ageneral building), expressed as the estimated cost of restoring such damage (physical loss
corresponding to a probability of more than 90% in the event of occurrence of such earthquake) as apercentage (%) of the replacement cost.
“Security” column: Whether collateral or no collateral is scheduled to be established after acquisitionof the real estate trust beneficiary right by SAPR8.
“Status of leasing” column: Based on the figures and information provided by the previous owner or
the real estate in trust, etc. regarding the content, etc. of the lease agreement, etc. that is valid as of
October 31, 2018, unless otherwise stated.
"Total leasable area" column: The sum total of leasable floor areas of buildings of the real estate intrust (when common space is also leased, the area of that space is included in the total). The figure
does not include the area of the land lots leasable for parking and other purposes. Leasable area iscounted not from registry data but from area data as described in lease agreements or from area dataas calculated by using the architectural drawings of the buildings, so it possibly might not be equal to
the total floor area as recorded in registry. Please note that the source data for the column represent
what were provided by the current owner(s) of the real estate in trust as of October 31, 2018.
"Total leased area" column: The sum total of the floor areas to be leased as described in leaseagreement for each of the real estate in trust as of May 31, 2018 out of the leasable area. The figure
does not include the area of the land lots to be leased for parking and other purposes. Please note thatthe source data for the column represent what were provided by the current owner(s) of the realestate in trust as of October 31, 2018.
"Change in occupancy rate" column: The percentage of total leased floor area over total leasable floorarea of the real estate in trust as of the end of each month between June and October 2018, afterrounding to the first decimal place. Please note that the source data for the column represents thatprovided by the current owner(s) of the real estate in trust from June 30, 2018 to October 31, 2018.

・“Number of leasable units” column: The total number of leasable units in the building of the realestate in trust. With regards to the real estate in trust, the information indicated is based on thatprovided by the current owner of the real estate in trust as of October 30, 2018.

・“Number of leased units” column: The number of units from among the number of leasable units
which are actually being leased to tenants based on lease agreements effective as of October 31, 2018.
With regards to the real estate in trust, the information indicated is based on that provided by thecurrent owner of the real estate in trust as of October 30, 2018.

・"Total number of tenants" column: The total number of tenants as confirmed with the respective leaseagreements of real estate that are real estate in trust as of the end of October 2018. When a specifictenant uses two or more rooms of a real estate in trust, such tenant is counted only once for the asset.
Moreover, in case a specific tenant signs lease agreements for rooms in two or more real estate in trust,
the tenant shall be counted separately for each real estate in trust. When a pass-through master leaseagreement is executed for any of the assets to be acquired, the total number of actual (end) tenants
under the master lease agreement for the asset is shown herein.

・"Monthly rent (including common area maintenance fee)" column: The total of rent amounts as
described in lease agreements with respective tenants effective as of October 31, 2018 (limited toroom rents; excluding the charges for warehouses, sign boards and parking lots; but including thecommon service expenses; and free rent cases as of the same date are not considered), after rounding
to the nearest thousand yen.
10

・

・

"Security and guarantee deposits" column: The sum total of refundable deposits as required in
respective lease agreements effective as of October 31, 2018 (only for the tenants who were actuallyin the respective rooms at the time) of the real estate in trust. When a master lease agreement is
executed for any of the real estate in trust, the sum total of refundable deposits in the master leaseagreements with respective (end) tenants is calculated to be shown in the column.
“Special notation” column: A description not only on the items considered material in relation to theinvolved rights and assumed uses but also on impact for the appraisal value, profitability, disposability
and other items considered material in relation to the real estate in trust.
* Star Asia Investment Corporation website: http://starasia-reit.com/en/

11

<Reference Material >Location maps/photos of exterior of properties(1) Village Mitsuike Koen

12(2) Village Tokiwadai Koen

13