"Financial Results for the 8th Fiscal Period Ended January 2020"

Star Asia Investment Corporation(Securities CODE 3468)
Star Asia Investment Management0Contents

Characteristics of Star Asia Investment Corporation (SAR)
1. Executive summary2

1. A diversified REIT
Portfolio developed with diversified assets located mainly in the Tokyo Area (Note2)

2. Actual and forecasted distribution

3. Operating results forthe 8th fiscal period ended January 2020

9

2. Steady growthPursuit of internal growth by the Asset Manager with abundant experience andknow-how as well as external growth based on asset managed performed by theStar Asia Group13

3. Initiatives focusing on unitholder value
Constant, “out-of-the-box” active management

4. Initiatives on ESG

19
Investment policy

5. Appendix

24

6. Notes

49

Prioritized, focusedinvestment in theTokyo Area (Note 2)
Investment ratio of 70%
of higher in theTokyo Area

Achieving income
stability and growththroughdiversification ofasset type

Investment primarily
in middle-size
assets (Note 2)

1

1．Executive summary2

1. Executive summary
Actual results of active management and change in investment unit price from the time of listing (Note3)
Investment
in mezzanine
loan debt 1
October 25, 2017

Implementation of Continuous
Active Management
1st asset
replacement
December 5, 2016

2nd asset
replacement
February 28, 2017

3rd asset
replacement
July 23, 2018

Investment
in mezzanine
loan debt 3
December 20, 2018
1st acquisition ofsilent partnership
equity interest
November 28, 2018

4th asset
replacement
August 21, 2018

2nd follow-on
offering
January 12, 2018
Offer price: ¥106,724

1st follow-on
offering
March 17, 2017
Offer price: ¥96,720

IPO
April 20, 2016

Investment
in mezzanine
loan debt 2
December 20, 2017

Investment
in mezzanine
loan debt 4
January 24, 2019

1st acquisitionof real estate
January 24, 2019

3rd follow-on
offering
August 21, 2018
Offer price: ¥101,985

Investment
in mezzanine
loan debt 5
March 2, 2020

2nd acquisition of silent

5th asset
replacement
March 2, 2020

partnership equity interest
February 26, 2019

Proposal for Merger Execution of Merger
Agreementby Star Asia Group
March 2, 2020

May 10, 2019(¥)(¥100mn)

120,000

1,200
スターアジア不動産投資法人の資産規模（右軸）
SAR’s AUM (right)

スターアジア不動産投資法人の投資口価格（左軸）
SAR’s unit price (left)
東証REIT指数（左軸）TSE REIT index

110,000

900

Offer price at IPO:
¥100,000
100,000

600

90,000300

End of 1stFP¥61.4bn

End of 2ndFP¥61.4bn

End of 3rdFP¥75.3bn

End of 5thFP¥86.0bn

End of 4thFP¥75.3bn

End of 6thFP¥101.3bn

End of 8thFP¥102.3bn

End of 7thFP¥102.3bn

2020/2

2020/1

2019/122019/112019/10

2019/92019/8

2019/7

2019/6

2019/5

2019/4

2019/3

2019/2

2019/1

2018/122018/112018/10

2018/92018/8

2018/7

2018/62018/5

2018/42018/3

2018/2

2018/1

2017/122017/112017/92017/102017/82017/72017/62017/52017/42017/32017/2

2017/1

2016/122016/112016/10

2016/92016/8

2016/7

2016/6

2016/50

2016/480,0003

1. Executive summary<Proceed with the Process towards Realization of the Merger>

Proceed with the
Merger with
Sakura Sogo REIT

⚫ Execution of merger agreement between SAR and Sakura Sogo REIT (SSR) (March 2, 2020)⚫ 5th Asset replacement （A gain on sale of JPY 1.61 bn expected to be recorded）⚫ Unit holders’ meeting of SAR （March 31, 2020）／ Unit holders’ meeting of SSR （March 30, 2020）⚫ Effective date of the merger： August 1, 2020

2,788 yen (up 18 yen: 0.6% increase compared to forecast)⚫ Forecasted distributions for the 9th fiscal period ending July 2020: 3,310 yen⚫ Distributions for the 8th fiscal period ended January 2020:

Distribution(A gain on sale from the sale of Alphabet Seven expected to be recorded)⚫ Forecasted distributions for the 10th fiscal period ending January 2021:

3,315 yen

(1st fiscal period after the merger, gain-on-sale from the Alphabet Seven is expected to be recorded, the amount is prior to taking into
consideration the investment unit split (post-split amount: 1,658 yen))

98.1% (+0.5% from the end of the 7th fiscal period)⚫ Office: Focused on resolving rent gaps. Rent increases (revisions) for 5 properties(an 13.8% increase(revision) compared to before)⚫ Occupancy rate as of the end of the 8th fiscal period (overall average):

Internal
Growth⚫ Logistics facilities: Completed attracting new tenants at Baraki Logistics.
⚫ Executed 5th mezzanine loan debt investment (investment amount: JPY 150 million, interest rate: exceeds 5% per year) (March 6, 2020)4

－ Efforts towards the Merger －◼ We believe that the merger of SAR and SSR offers various benefits to the unitholders of both SAR and SSR, including

improved stability through expansion of asset size and increased liquidity of investment units due to larger market
capitalization.
◼ Star Asia Group will continue to provide robust support and resources and Star Asia Investment Management Co., Ltd.,
will continue to focus on active management strategies to maximize unitholder value.

Post-merger
Star Asia Investment Corporation
Diversified REIT
Asset size: JPY103.8bn (Note 5)
No. of properties: 35 (after replacement)

Sakura Sogo REIT
Investment Corporation
Diversified REIT
Asset size: JPY63bn ( assumed price of acquiring
SSR portfolio (Note 4))
No. of properties: 18
Investment target: Office buildings, retail,residence, etc.

Investment target: Office buildings, retail,residence, logistic facilities, hotels, student
accommodation

Asset replacement with active management in
preparation for the Merger of SAR and SSR

JPY3,500mm

Planned sale priceAppraised value JPY2,670mm(Note 6)
Appraised cap rate

3.0% (Note 6) (Note 9)Age30.1 years (Note 6)

Urban Park Ichigao (Note 10)

JPY166.8bn

53

Investment target:
Office buildings, retail, residence, logistic facilities,
hotels, student accommodation➢ Continued active management to maximize unitholder
value

Gain on sale(estimate)
JPY1,612mm(Note 7)

➢ Further strengthen operations that always work in thebest interest of unitholders

To be sold at a price 31.1% higher
than appraised value and will
generate a gain on sale over 2
fiscal periods

Two properties to be acquired

No. of properties:

Management by Star Asia Investment Management
Co., Ltd., SAR’s asset manager

One Property planned for sale
Alphabet Seven

Asset size:

Support from Star Asia GroupCap rate: 4.7%

Urban Park Gyotoku (Note 10)➢

Providing property information and assets to achieve
external growth➢

Providing acquisition warehousing function

JPY1,810mm

Plannedacquisition price

JPY1,430mm➢

Providing expertise and resources for internal growth

JPY1,850mm (Note 8)

Appraised value

JPY1,500mm(Note 8)•

Pursue Maximizing Unitholder Value

Appraised cap rate 4.7% (Note 8) (Note 9)

Appraised cap rate

Plannedacquisition priceAppraised valueAge

21.6 years (Note 8)Age

4.7% (Note 8) (Note

AND

9)

24.9 years (Note 8)•

Accelerate Growth to the Next Stage 55－ Portfolio Status after Merger －The percentage of properties located in the Tokyo area, (Note 11) where stable earnings and growth are expected, will continue to be morethan 70%. Also, mid-sized office buildings and residential property, which are expected to generate above average internal growth and attract
investor interests, will increase significantly.
◼ As the number of highly liquid properties will increase, we will be able to flexibly execute asset replacements that will contribute to maximizing
unitholder value.
◼ Further diversification of portfolio and tenants will improve stability.
◼

SAR(Pre-merger)

SSR(Pre-merger)

SAR(Post-merger)
JPY166.8bn

Portfolio after merger
and future strategy

JPY103.8bn
JPY63.0bn

Asset size (Note 12)

1

19.8%

2

3

12.3%

3.8%
32.7%

31.2%
53.4%

Asset class (Note 12)
29.8%

17.8%

OfficeResidence⚫ Competitive portfolio
Assets in Tokyo area will remain to
be more than 70%. Portfolio
revenue stability and growth are
expected to be strengthened

11.6%

Retail

40.5%

20.0%

11.8%
15.4%
Logistics

Hotel

Number of properties

35 (Note 14)

18

53

Number of tenants

749

701

1,450

Assets in Tokyo area

74.4%

63.9%

70.4%

Mid-sized assets

100.0%

83.0%

93.6%

(Note 15)

(Note 12)

Other (Note 13)⚫ Pipeline of Star Asia Group
Aim to achieve JPY200bn in assets
in the short term based on thepipeline of Star Asia Group⚫ Active management
Achieve a virtuous cycle ofexpanding asset size and improving
unitholder value through continued
active management(Note 12)6

－ Merger Overview Schedule －The merger of SAR and SSR is scheduled as follows

March 2, 2020

Execution of merger
agreement

Execute the Merger Agreement-

March 30, 2020

SSR’s unitholders’ meeting

Obtain Approval of Merger Agreement at Unitholders’ Meetings of SAR and SSR-

March 31, 2020

SAR’s unitholders’ meeting

July 30, 2020

Delisting of SSR-

To effect the merger agreement, approval by special resolution is required (withthe attendance of majority of voting rights and at least 2/3 voting in favor among
the attended unitholders) at the unitholders' meetings of SAR and SSR
Unitholders are kindly requested to vote in favor of SAR and SSR at theunitholders’ meeting(For details, please see the notice of the unitholder’s meeting, which will bedelivered later)

Merger Takes Effect-August 1, 2020

Independent financial advisors were retained by SAR and SSR in negotiating themerger agreement and the terms were determined after conducting due
diligence with each other (including inquiries from the special committee for
SSR) with the approval of the board of directors of SAR and SSR

Effective date of merger

1.78 SAR units will be allocated for each SSR unit
Any unit of less than one unit will be purchased and a cash payment for thesale of such fractional unit will be made to unitholders

Payment of Cash Upon Merger
Within a reasonable
period from theeffective dateCash payment upon merger-

A cash payment upon the merger is scheduled to be made to SSR unitholders(Note 16) upon the merger in an amount that corresponds to the cash distribution
7
made during SSR’s business period from January 1, 2020 to July 31, 2020

Current Status for Key Issues of the 7th Fiscal Period
and Future Key Issues

Current Status for Key Issues of the 7th Fiscal Period<Succeeded in Attracting New Tenants at Baraki Logistics>◼

Succeeded in attracting new tenants at Baraki Logistics, which was a priority issue raised in the last fiscal period (ended July 2019).

◼

Operations at the property has stabilize with a 100% occupancy rate, which is expected to contribute to stable revenues after the rent holidays end
in June 2020.

<Improvement of Occupancy rate at Higashi-Kobe Center Building>◼

Multiple tenants moved out and the occupancy rate had declined (at end of last fiscal period: 89.6％). We focused on attracting new tenants for
Higashi-Kobe Center Building, and achieved increase in the occupancy rate (at end of the current fiscal period: 94.4％).

◼

Going forward, we will also focus on developing good relationships with existing tenants, and make efforts to attract new tenants, in order tomaintain and improve the occupancy rate.

Future Key Issues<Attract New Tenants at Funabashi Nishiura Logistics I>◼

Focus on finding new tenant for Funabashi Nishiura I Logistics, where a tenant is expected to leave in the fiscal period ending July 2020.

◼

As it is close to the consumption area of Tokyo, and it has versatile specifications, we believe that it is highly appealing to potential tenants.

<Co-work with Hotel Operator>◼

The rent structure is “fixed plus floating” for 6 out of 8 hotel properties, however, of the rent revenues from the 8 hotel properties, 98.1％(actual
figure for 8th fiscal period）are fixed rents, and so the impact of decline in floating rent revenues on distributions is limited.

◼

At hotels where occupancy rates are declining due to the effects of the new coronavirus, as the owner of the properties, we would like to consider
supporting them as much as possible (such as capital expenditures and implementing repairs based on request from the operators etc.)82. Actual and forecasted distribution

9

2. Actual and forecasted distribution (1)Change in actual distribution and distribution excluding transient factors
3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP forecast

10th FP forecast

Forecasted
distribution

4,340 yen

4,039 yen

2,750 yen

3,580 yen

3,500 yen

2,770 yen

3,310 yen

3,315 yen

Actualdistribution

4,423 yen

4,077 yen

2,773 yen

3,720 yen

3,625 yen

2,788 yen

NAV per unit

111,884 yen

Forecasted total
gain on sale

112,412 yen

112,965 yen

112,537 yen

114,361 yen

116,873 yen※

9th fiscal period: the last fiscal period for Star Asia
Investment Corporation a stand-alone basis.

※

10th fiscal period: 1st period after the merger, prior
to taking into consideration the investment unit split(after split: 1,658 yen)

1st
Asset replacement

2nd
Asset replacement

3rd
Asset replacement

4th
Asset replacement

5th
Asset replacement

Gain on sale:
150 million yen

Gain on sale:
1,510 million yen

Gain on sale:
820 million yen

Gain on sale:
190 million yen

Forecasted gain on sale:
1.61 billion yen

Approxi.

4.3
billion yen

Transfer
Urban Park
Yoyogikoen

Acquisition
Urban Park
GokokujiTransfer
Oak
Minami-Azabu

Acquisition
Baraki
Logistics

Transfer
Hakata-eki
Higashi 113
Building

(yen）

5,000

Transfer
Urban Park
Shin-Yokohama

Acquisition
GlansitAkihabara

Transfer
Alphabet Seven

Acquisition
Urban Park
Ichigao

Acquisition
Urban Park
GyotokuInternal reserves
37 million yen

Internal reserves
113 million yen

4,500

Acquisition
Hotel WBF
FukuokaTenjin Minami

4,000
3,500
3,000

2,500
2,000

4,423

4,077

2,773

3,720

3,625

2,788

3,310

3,315

3rd FP2017年7月期

2018年1月期
4th FP2018年7月期
5th
5th FPFP

2019年1月期
6th FP2019年7月期
7th FP

2020年1月期
8th FP

2020年7月期
9th FP

2021年1月期
10th FP

ActualActual
第4期

ActualActual
第5期

Actual
第6期

Actual
第7期

Actual
第8期

Forecast
第9期予想

Forecast
第10期予想

1,500
1,000
500
0
第3期

10

2. Actual and forecasted distribution (2)Factors for increase/decrease compared with forecast/actual results for the 8th fiscal period ended January 2020
Net income was 1,493 million yen (+3.7% compared to initial forecast) and distribution per unit was 2,788 yen (+0.6% compared to initial forecast)in the 8th fiscal period ended January 2020
(Unit: million yen)
8th FP(ended Jan. 2020)
forecast*

8th FP(ended Jan. 2020)
Actual

3,173

3,200

+27

0.9% ＜Lease business revenue＞

1,138

1,145

+7

0.6% +27 million yen

Residence rent

438

439

+1

0.3%

Logistics rent

817

817

△0

0.0%

Hotel rent

494

477

△17

△3.5%

284

320

35

12.6%

785

769

△15

△2.0%

2,388

2,431

+42

422

420

△2

△0.5%

1,966

2,011

+45

2.3%

Mezzanine

20

21

+0

1.4%

TK dividend

5

6

+1

21.6%

Gain on sale of real estate property

-

-

-

-

321

316

△4

△1.5%

1,670

1,721

+51

-

1

+1

-

Lease business revenue
Office rent

Other
Expenses related to rent business (Depreciation is
excluded)
NOI
Depreciation
Rent revenues/expenses

SGA
Operating income

Non-operating income

Factors forthe increase/decrease

Comparison with forecast

227

△0

△0.2%

1,441

1,494

+52

3.7%

Net income

1,441

1,493

+52

3.7%

2,770 yen

2,788 yen

0.6%

3,446 yen

3,539 yen

+18 yen
+93
yen

98

141

FFO per unit
Balance of Internal reserves+42

Office rents： Hakata East Place+2.1 million yen
Alphabet Seven+3.4 million yen
Honmachibashi Tower+1.3 million yen
Hotel rents： Decrease in floating
rents of Smile Hotel Namba
Other：
Renewal fee revenue+7.9 million yen
Insurance revenue +15 million yen
Key money revenue+6.4 million yen
Revenue from restoration to original
condition +3.9 million yen
etc.

3.1% ＜Expenses related to rent business

228

Cash distribution per unit•

1.8% •

Ordinary income

Non-operating expenses•(Depreciation is excluded)＞△15 million yen• Renewal fee for leased land ofHigashi Kobe Center Building：△17 million yen

2.7%
43.6%

*Announced in 7th FP closing of accounting report (September 12, 2019 )11

2. Actual and forecasted distribution (3)Forecast of business results for the 9th fiscal period ending July 2020 and the 10th fiscal period ending January 2021
(Unit: million yen)

Lease business revenue
Expenses related to rent business(Depreciation is excluded)
NOI
Depreciation

Actual for the 8th FP
ending January 2020
(A)

Current forecast forthe 9th FP ending
July 2020
(B)

3,200

3,277

①

+ 76

Factors for increase/decrease in 9th FP(Comparison with 8th FP actual)

5,640

769

803

②

+ 34

① Lease business revenue +76 million yen

1,608

2,431

2,473

+ 42

・Increase due to recovery of occupancy rates at logistics facility (Baraki) and reduction
in rent holidays. ・Decrease in revenues due to tenant departure at logistics facility

4,032

420

436

+ 15

Increase/decrease

Major factors for the increase/decrease(B-A)(Funabashi Nishiura Logistics Ⅰ)

Forecast for the
10th FP ending
January 2021
(C)

639

・Decrease in floating rents of hotel assets

Rent revenues/expenses

Gain on sale of real estate properties
Mezzanine

2,011

2,037

-

642

21

25

+ 26

③

+ 642
+4

・Increase in revenues due to new acquisitions of UP Ichigao and UP Gyotoku
・Removal of temporary profit increases factors (insurance premium
revenues etc.) in the 8th fiscal period

3,392

969
24

② Expenses related to rent business (Depreciation is excluded)

Dividends in silent partnership investment
SGA

6

5

316

645

1,721

2,064

△1
④

+ 328

+34 million yen
・Increase in expenses due to new acquisition of UP Ichigao and UP Gyotoku

1,160

・Increase in repair costs

Operating income

+ 343

3,226
・Record expenses for soliciting tenants of logistic facilities.

Non-operating income

1-

Non-operating expenses

227

273

△1
⑤

+ 45

③ Gain on sale of real estate properties +642 million yen
・Gain on sale from Alphabet Seven (40% quasi-co-ownership)

449④ SGA +328 million yen

Ordinary income

1,494

1,790

+ 296

Net income

1,493

1,790

+ 296

Cash distribution per unit
（considering after split of investment units）
Cash distribution per unit
（before split of investment units）

・Record expenses for merger-related costs⑤ Non-operating expenses +45 million yen

2,776
2,775

・Finance costs related to borrowings for acquisition of properties and refinancings
have been incurred.

2,788

3,310

+ 522

1,658

2,788

3,310

+ 522

3,315

12

3. Operating results for the 8th fiscal period
ended January 202013

3. Operating results for the 8th fiscal period ended January 2020 (1)Occupancy rate status
Occupancy rate as of the end of the 8th fiscal period: 98.1%
Aiming to stabilize occupancy rate by grasping tenant needs and the situation of properties through intimate on-site collaboration and other carefulmeasures100%

Hotel, 100.0%【TOTAL】

Office, 98.3%

98%

Total, 98.1%
96%➢ The occupancy rate as of the end of the
8th fiscal period recovered from the end of
the preceding period, and was 98.1%.
【Office】

Logistics facility, 97.8%
94%

Residence, 97.4%➢ Of the 2 properties which had vacancies
as of the end of the preceding period,
Alphabet Seven has achieved a 100%
occupancy rate.

➢ Maintained an occupancy rate of 96%
during the period.

19/12

19/10

19/08

19/06

19/04

19/02

18/12

18/10

18/08

18/06

18/04

18/02

17/12

17/10

17/08

17/06

17/04

17/02

16/12

88%

➢ The occupancy rate declined slightly
during the period, however, it recovered to
97.4% at the end of the period.

16/10【Residence】

16/08

90%

16/06

➢ Higashi-Kobe Center Building attracted 4
new tenants, and is focusing on further
improving the occupancy rate.

16/04

92%

【Logistics facility】

1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

Office

95.8%

99.2%

98.8%

99.7%

98.6%

98.8%

96.4%

98.3%

Residence

92.5%

92.6%

94.2%

97.1%

94.0%

96.2%

97.3%

97.4%

Logistics

96.3%

96.3%

96.9%

96.9%

97.8%

97.8%

97.8%

97.8%

Hotel

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

TOTAL

95.9%

96.8%

97.3%

97.8%

97.7%

98.1%

97.6%

98.1%

➢ Found new tenant for the cancelled floor
space at Baraki Logistics, and achieved
100% occupancy rate.
➢ Going forward, we will focus on attracting
new tenants for Funabashi Nishiura
Logistics I.
【Hotel】➢ Occupancy is 100% with full lease to thehotel operator➢ Pay close attention to the businessperformance ad credit conditions of hotel
operators.

14

3. Operating results for the 8th fiscal period ended January 2020 (2)Office － Status of rent gap and change in tenant as of the end of the 8th FP(Ended January 2020) －Change in tenants in the 8th fiscal period （Note 19) （Note 20)

Rent gap as of the end of the period （Note17)
Rent gap exists at

13.8% rent increases

12.6% rent increases

22.4% rent increases
85.9% of the total (base on floor area)

Tenants renewed(increase in rent):
5 tenants

Increase in rent: 5 tenants

Cancellation→Enteredby new tenant:3 tenants

10% or more,by ¥1,380/tsubo (11.8%)

50.6%

Entry into vacant space:
1 tenant

No Change: 22 tenants

0% to less than 10%,35.4%

¥13,029/tsubo¥11,649/tsubo

Nearby Market
Rent Unit PriceContracted Rent
契約賃料単価
Unit Price

Tenants renewed in 8th FP
Less than 0%, 14.1%
0㎡

2,000 ㎡

4,000 ㎡

6,000 ㎡

8,000 ㎡

10,000 ㎡

周辺相場賃料単価

Average Rent per Tsubo since the 1st FP (Note 18）
123.0%

Shibuya MK Building, 121.8%

Amusement Media Gakuin Honkan・Shinkan,

Contract Rent Period of Office Portfolio
Rent gap, Less than0%
レントギャップ
0%未満

16,000 ㎡

44 tenants

37 tenants

Alphabet Seven,Minami Azabu Shibuya Building, 100.0%

118.0%

Nishi-Shinjuku Matsuya Building,
116.8%

113.0%

Nihonbashi Hamacho Park Building,
110.4%

Rent gap, 0% to 0以上10%未満
less than 10%
レントギャップ
Rent gap, 10% ormore
レントギャップ
10%以上

12,000 ㎡
35 tenants

8,000 ㎡

24 tenants

108.0%
Hakata-eki East Place, 109.2%
Asahi Building, 106.9%
103.0%

98.0%

7 tenants

4,000 ㎡

Honmachibashi Tower, 102.1%
Higashi Kobe Center Building, 99.8%
1st FP 2nd
3rd FP 4期
4th FP 5期
5th FP 6th
1期
2期 FP 3期
6期FP 7th
7期FP 8th
8期FP

0㎡
9th
FP
第9期

10th
FP
第10期

11th
FP
第11期

12th
FP
第12期

13th FP
第13期以降onward15

15

3. Operating results for the 8th fiscal period ended January 2020 (3)Residence

Change in Total Monthly Rent and Average Occupancy Rate （Note 21）

Average Rent per Tsubo since the 1st FP （Note 22）(thousand yen)

(UP=Urban Park)

105.0%¥69,000

97.3%

97.8%

96.0%

UP Azabujuban, 104.2%

104.0%¥68,500

UP Namba, 102.5%
103.0%¥68,000

UP Gokokuji, 102.1%
Monthly rent unit price
月額賃料総額¥67,500

102.0%

AverageOccupancy rate
平均稼働率¥67,000

UP Ryokuchi-koen,
101.5%UP Kashiwa,101.4%

101.0%

UP Koenji, 101.1%¥66,500

100.0%UP Daikanyama, 101.1%¥66,000
2019/01末
End of

2019/07末
End of2020/01末
End of

6th
FP
第6期末

第7期末
7th
FP

8th
FP
第8期末

99.0%
1期
2期 FP 3rd
3期FP 4th
4期FP 5th
5期FP 6th
6期
1st FP 2nd
FP 7th7期
FP 8th8期
FP【Results】➢ Although the average occupancy rate has slightly declined compared to the end of the preceding period (approximately 0.5% lower than the end of the preceding period),
high occupancy rates were maintained during the period.
➢ The total of monthly rent revenues was also slightly lower compared to the end of the preceding period (approximately 0.1% lower than the end of the preceding period), an
increase in total rents during the period (6 months) has been confirmed.
➢ Increase in rents at 6 out of 7 properties has been achieved, by gathering information of surrounding competitive properties, and by actively increasing rents upon making
new leases and upon lease renewals.
➢ The residential portfolio has achieved increase in rent unit prices, and occupancy rates remain stable, and is contributing to stability of income.
【Future Policy】➢ We will continue to gather information regarding the status etc. of surrounding competing properties, and aim to maintain the competitiveness of the residential portfolio byimplementing appropriate capital expenditures (for change of room layouts and renovation of housing facilities and equipment), and aim for stabilization of occupancy rates
and increase in rent revenues.

163. Operating results for the 8th fiscal period ended January 2020 (4)Logistics facility / Hotel■ Logistics facility ■ Diversification of Current Contract Renewal Period (based on floor area)
60000 ㎡

Leased area (㎡)
契約面積(㎡)

8th FP (2019/8-2020/1)
1 contract renewal➢ Renewed under the same conditions as before
1 new tenant found➢ Regarding the cancelled floor space at Baraki Logistics, we succeeded in finding
a new tenant earlier than expected.

40000 ㎡

9th FP (2020/2-2020/7)

20000 ㎡

2 contract renewals➢ 1 tenant has renewed the lease contract at the same rent level as before.

2 tenants

2 tenants

2 tenants

4 tenants

0㎡
9期FP
9th

10期
10th
FP

11期
11th
FP

12期
12th
FP

13期
13th
FP

14th FP
14期以降
onwards

2020/2-7

2020/8-2021/1

2021/2-72021/8-2022/1

2022/2-72022/8 -➢ Another tenant is expected to automatically renew the contract on the sameterms and conditions.
An advance notice of cancellation has been received from a tenant which wasscheduled to renew in the 12th fiscal period.
➢ As of the date of this document, discussions are being held regarding the timingof cancellation.
➢ Focus on attracting new tenants.

■ Hotel ■ Change in rent system and rent ratio
Property nameAcquisition
PeriodFixed
Rent

Floating
rent

R&B Hotel Umeda East

2016.4○－

Smile Hotel Namba

2016.4○○

Best Western Tokyo Nishi-kasai

2017.3○○

Best Western Yokohama

2017.3○○

Hotel WBF Fukuoka Tenjin Minami

2018.8○○Glansit Akihabara

2018.8○－

1st FP
2nd FP
3rd FP
4th FP本田さん

5th FP
6th FP

Fixed rents ratio on 8th FP：98.1%

7th FP
8th FP
9th FP Forecast

Best Western Tokyo Nishikasai
Grande2018.8○○

Hotel WBF Artstay Namba

2018.8○○

Upon listing：2 properties
3rd FP： Additional acquisition of
2 properties
6th FP：Additional acquisition of
4 properties
Currently managing a total of
8 properties

10th FP Forecast

Fixed

Floating

Of the lease business revenues ofthe entire portfolio, the proportion of
floating rent revenues from the 8hotels comprises 0.28% as of the 8th
fiscal period.

1717

3. Operating results for the 8th fiscal period ended January 2020 (5)Financial standing
Refinance risk and interest rate increase risk are reduced by deconcentrating the repayment dates of borrowings and selecting fixed-rate interest rates
Balance of borrowings
Interest rate

Term

FP of
the repayment date

7,300

0.4830% (Note23)

4.0 years

9th FP

7,300

0.6250% (Note23)

5.0 years

11th FP

2,400

0.5300% (Note23)

3.5 years

10th FP

4,150

0.7100% (Note23)

5.0 years

13th FP

1,600

0.5300% (Note23)

3.5 years

10th FP

4,690

0.7300% (Note23)

5.0 years

15th FP

7,300 Base rate (Note24)+0.4500%

3.5 years

12th FP

4,000

0.6095% (Note23)

3.5 years

13th FP

4,840

0.8120% (Note23)

5.0 years

16th FP

8,000

0.7532% (Note23)

5.0 years

17th FPEnd of 8th FP(Unit: million yen)Longterm

Diversification of repayment dates (as of January 31, 2020)■ Fixed(Unit: million yen)

■ Adjustable

10,000

8,000

6,000

4,000

7,300

7,300

7,300

8,150

8,000

4,000

2,000

4,690

4,840

15th FPJul 2023

16th FPJan 2024

0
9th FP
Jul 2020

10th FPJan 2021

11th FPJul 2021

12th FPJan 2022

13th FPJul 2022

14th FPJan 2023

17th FPJul 2024

51,580Main financial indicators

Bank formation (as of January 31, 2020)
Mizuho Trust & Banking
1.6%
The Nishi-Nippon City Bank
1.9%

The Dai-ichi Life Insurance
Company
1.0%

Sumitomo Mitsui
Banking
25.3%

The Bank ofFukuoka
2.2%

51,580MM yen

MUFG Bank
2.7%

Mizuho Bank
22.4%

Resona Bank
9.3%
Aozora Bank
9.3%

Shinsei Bank
9.7%

Sumitomo Mitsui Trust Bank
14.6%

End of 7th FP

End of 8th FP

LTV

46.8%

47.0%

Balance of borrowings

51,580 million yen

51,580 million yen

Long-term debt ratio

100.0%

100.0%

Average remaining
period to maturity

2.6 years

2.1 years

Average borrowing period

4.4 years

4.4 years

Average interest rate

0.63%

0.64%

Fixed interest rate ratio

85.8%

85.8%

18

4. Initiatives on ESG

19

4. Initiatives on ESG (1)◼ SAR recognizes its position in society as a listed real estate investment corporation and will implement operation that is considerate towards ESG
as an initiative on sustainability◼ SAR will enhance corporate value in pursuit of long-term sustainability and gain comprehensive competitiveness◼ SAR believes that such efforts are in line with the basic principle of “Unitholders’ interest-first”

Basic principle “Unitholders’ interest-first”

Enhancing the possibility oflong-term sustainability

Enhancing corporate value

E

S

G

Environment

SocialGovernance• Environment-friendly real estate
operation• Establishment of relationshipwith stakeholders• Transparency of management• Alignment of interest withunitholders20

4. Initiatives on ESG (2)Environmental initiatives

E◼ Acquisition of environmental certification and DBJ Green Building Certification for 4 properties

Property nameIwatsuki Logistics

Property nameBaraki Logistics

Property name

Honmachibashi Tower

Property nameUrban Park Daikanyama

Asset type

Logistics facility

Asset type

Logistics facility

Asset type

OfficeAsset type

Residence

Location

Saitama-shi, Saitama

Location

Ichikawa-shi, Chiba

Location

Osaka-shi, Osaka

Location

Shibuya Ward, Tokyo

Properties with excellent environmental &social awareness

S

Properties with high environmental & social
awareness

Properties with satisfactory environmental &social awareness

Properties with satisfactory environmental &social awarenessSocial initiatives◼ Establishing relationship with various stakeholders
Local community:
Aim to contribute to the local community
through owned properties and tenants

Clients:
Establish mutual trust based on fairtransaction

Lenders:
Strive to share information to establish arelationship of mutual trust

Stakeholders
surrounding
SAR

Local
community

Lenders

Clients

Unitholders

Unitholders:
Aim to maximize unitholder value based on
the “Unitholders’ interest-first” mindset

Employees

Employees:
Support the growth of each employee by accepting various
employees regardless of gender, nationality, ethnic group,
race and generation
Ratio of female employees: 40.0%

21

4. Initiatives on ESG (3)GGovernance◼ Implement decision-making with high transparency by complying
with laws and regulations◼ Maintain a high sense of ethics and execute operations as amanager of investors’ funds<Decision-making process>◼ Aligning the interests of the Sponsor Group with those of theunitholders by holding 17.9% of the investment units of theSponsor Group◼ Members of the Asset Manager also hold investment units
Sponsor Group

Department

Total: 96,780 units held by 4 unitholders
Proposal

Number ofinvestment units held insame-boat investment:

Founder of Star Asia 2 individuals

Compliance Officer

97,000 units

Total: 220 units
Review and approval

ReturnHolding ratio:

17.9 %

Investment Committee (including external directors)
Review and resolution

Rejected

Compliance Committee (including external directors)
Review and resolution

Management team of the Asset Manager (as of January 31, 2020)
Rejected

Board of Directors

Holding SAR’s investment units through the cumulative investment systemfor employees
High commitment by management

Rejected
Items that do not need tobe discussed at theCompliance Committee

Items that need to be
discussed at theCompliance Committee

ReviewAnd
approval

SAR’s Board of
Directors Meetings

Employees of Star Asia Investment Management Co., Ltd.
Unapproved

Holding SAR’s investment units through the cumulative investment systemfor employees
224. Initiatives on ESG (4)GGovernanceStar Asia, the sponsor of Star Asia Investment Corporation, is a non-listed independent investment management group which invests mainly inJapanese real estate-related assets and whose main goal is supplying investors with excellent returns
Star Asia Investment Corporation and Star Asia shall share the same long-term vision in accordance with the Star Asia Group’s Code of Conduct, shallbe a leading Real estate investment management group in Japan and shall persistently endeavor to continue to be such
The Code of Conduct is as follows:1

Client FirstWe are rewarded only when we
consistently meet and exceed ourinvestor clients’ expectations for the
mandates they have given to us.

5

Collaborative
andCooperative Culture

We succeed only when we work
together by fully utilizing our collective
strengths in a cooperative manner toserve our investor clients. The group’s
performance always exceeds the sum of
our individual performances.

2

Highest EthicalStandards andIntegrity

We always abide by the highest ethicalstandards and integrity. Unethicalactions by an employee could easily
destroy the group’s long-standing
reputation and trust.

6

Adaptability

We stay nimble, proactive and critical,
allowing us to adjust quickly as themarket environment changes in order tocontinue to be a successful leader in themarket where we do business.

3

Creativity

We utilize our experience, persistence,and creativity to identify and monetize
investment opportunities which may not
be immediately apparent to ourcompetitors.

7

Meritocracy

We reward our employees for their
specific personal performance as well as
their contribution to the group and toinvestor client performance.

4

Respect for Others

We treat our investor clients, employees,
trade counterparties, and vendors withthe utmost respect, and always strive to
be trustworthy partner.

8Endless PursuitofExcellence

We will tirelessly pursue excellence not
only for our investor clients but also for
ourselves.

23

5. Appendix

24Structure of Management of the two REITs◼ Star Asia Investment Management is managing the two REITs (SAR and SSR).
◼ We will manage both REITs to maximize unitholders' interests while paying close attention and avoiding any conflicts of interest

between the two REITs.

Organization Chart

Measures to avoid conflict of interest-

Since Star Asia Investment Management (“SAIM”) will be providing asset
management services to both SAR and SSR, the Rules on Handling of
Property Information (“Rules”) and the decision-making process have been
established in order to avoid conflicts of interest. The Rules stipulate how toallocate information regarding acquisition of properties as follows.

SSR Investment Management Division has been newly
established to manage the two REITs
Shareholder’s Meeting① Rules on allocating information regarding acquisition of property
Corporate Auditor

a. All property information obtained by SAIM will be registered with, andcentrally managed by, the Finance Management Division.

Investment Committeeb. Based on the year of completion of the registered property as stated in
the real estate register, SSR Investment Management Division willconsider the acquisition if the year is an even number, and SAR
Investment Management Division will consider the acquisition if theyear is an odd number. If more than one property is being sold by thesame seller at the same time, the year of completion of the oldest
property will be used.

Board of Directors

Compliance Committeec.

President and CEO

If both SSR Investment Management Division and SAR Investment
Management Division decide not to acquire the property as a result ofconsideration, it should be reported to the Finance Management
Division. The Finance Management Division will then provide theinformation to other investment management divisions.

② Decision-making process at SAIM
Compliance Officer

New
SSR Investment
Management Division

SAR Investment
Management Division

Finance
Management Divisiona. When the Investment Committee discusses an agenda concerning theinvestment management of either SAR or SSR, members who belong
to the Investment Management Division of the other may not participate
in the discussion nor participate in the resolution.
b. The same applies to the Compliance Committee and the Board of
Directors.
25About Star Asia Group
Taro Masuyama
Co-Founder andManaging Partner

Malcolm F. MacLean IV
Co-Founder andManaging Partner

Star Asia Group is a privately owned, independent investment management group that focuses on investments in Japanese realestate related opportunities.
• Concepted in 2006, Star Asia Group has invested over JPY661bn since its foundation in 2007. The current balance ofinvestments is over JPY172bn.1• Star Asia Group has 392 officers and employees including over 40 investment and asset management professionals based inTokyo or New Jersey, USA.1• We always operate under the Guiding Principles which continuously drive the group to become and remain as one of theleading real estate investment management firms in Japan.
• The group’s strong track record and long-term partnership approach with our investors have been integral in attracting
significant capital from sophisticated global investors, including large U.S. university endowments and foundations,Japanese and European pension funds, U.S. and Asia based family offices as well as other global real estate investors.
• The group is committed to its disciplined Investment Philosophy and SAR strives for its most important goal of meeting andexceeding unitholders’ expectations.

Star Asia Group
Listed J-REIT
Asset manager

Private placement
fund management

Star Asia
Management
LimitedStar Asia
Investment
Management Co.,Ltd.

• Registered as an
Investment Advisor
with the US Securities
and Exchange
Commission• Manages multiple
private placement
funds through sistercompanies
Provides know-how
contributing to SAR’sinternal and external growth
as its sponsor

Star Asia
Investment
Corporation• Support of Construction
Management
Department• Provides advice basedon abundant experience
in real estate-related
debt investment• Provides additional
resource as needed

Asset management

Private placement
fund

Unlisted investment company

Star Asia Capital Corp Limited

Star Asia Asset
Advisors Co., Ltd.

Star Asia Japan
Special Situations
LP• Assets under management is JPY19.7bn1• Asset management
and brokerage forprivate placement
funds; real estate
asset and trust
beneficiary interest
brokerage; andproperty management.

Lion Partners GK

Star Asia Sogo
Kaihatsu Co., Ltd.
• Star Asia Group’s realestate development
company• Currently develops
multiple properties

Asset management of
warehousing funds andprovides support fororigination of bridge
funds

Holds SAR’s investment
units (97,000 units;
equivalent to JPY11bn(17.9%)) 2
Silent partnershipinvestment in properties
with preferential negotiationrights owned by SAR

Holds SSR’s investment
units (20,227 units;
equivalent to JPY1.6bn(6.1%))3

Currently develops
properties withpreferential negotiationrights owned by SAR• Hakata office project• Star Asia Group’s
flagship fund
• Assets undermanagement is
JPY39.6bn1• Actively investing
based on its
investment capacity

Provided over JPY90bn
properties (based on
SAR’s acquisition price)
to SAR since SAR’slisting

Development andoperation of newgeneration student
accommodation

Development andoperation of hospitality
properties; listed

GSA Star Asia KK• A 50/50 joint venturewith GSA Group, a
global pioneer inpurpose built student
accommodation (PBSA),
that develops andoperates new-generation
PBSA• Following the first
property (HAKUSAN
HOUSE), developed thesecond (KAMIKITAHOUSE)

Currently operates
properties withpreferential negotiationrights owned by SAR• HAKUSAN HOUSE• KAMIKITA HOUSE• Urban Park Mitsuike
Koen

Kachikaihatsu Co.,Ltd.
• Listed on TSE 2nd
Section （8010）;
develops andoperates hotels• Star Asia Group
became a sponsor in
Nov. 2018 and holds
75.53% of issued
stock

Under the business
partnership agreementwith Star Asia Group, thecompany provides to
SAR information on saleof properties as adeveloper and operatorof hotels• Urban Park Tokiwadai
Koen• OHA Building

Star Asia Group with expanding business provides strong support to SAR
1. As of June 30, 2019

2. As of September 6, 2019

3. As of March 13, 201926

Investment Philosophy of Star Asia GroupThe Group intends to strictly adhere to its investment philosophy, and to meet the expectations of investors andcontinue to exceed such expectations. This is our largest objective
1

Research Focus

We believe that consistent outperformance canonly be achieved when investment opportunities
identified through our rigorous origination process
are validated against the comprehensive
understanding of the ever-changing market
environment. Government policies, macroeconomic
environment, state of capital markets, trends in
demographics,
realestatesupply/demand
dynamics, status of the real estate market cycle,
outlook and appetite by potential tenants, as wellas anticipated behavior of other market participants
are only a few of the critical inputs we analyze. In
order to formulate and continually update ourunderstanding of the current market environment,
we run iterative processes of gathering feedback
from our day-to-day investment and asset
management activities, which are supplemented byvarious third-party research reports and data that isfurther investigated and verified by us to generate
our unbiased view.

4

Specialization

We believe deliberate specialization and a flatorganization allow us to identify, properly structure,and dependably execute attractive, but often
complex,investment
opportunities.
This
specialization leads us to more predictable successand sets us apart from our competitors. Our seniorprofessionals have years of hands-on experience
in real estate deal sourcing, underwriting,structuring, asset management, financing, capital
markets, and securitization. Star Asia’s seniorprofessionals have developed deep-rooted local
relationships over multiple real estate cycles, andhave executed some of the most creative andcomplex investment opportunities in the market.

2

Market Inefficiencies

Unlike highly efficient foreign exchange, interest
rate and public equity markets, the Japanese andother Asian private real estate markets are
inherently inefficient. Although Tokyo is the world’s
largest metropolis in terms of population(approximately 35 million), GDP, and real estate
capital values, in our opinion, it is significantly lessefficient than the U.S. or U.K. markets. The
Japanese real estate market has high barriers-toentry, asymmetric information flows, a lessdeveloped securitization market, and a limited
universe of well-capitalized opportunistic market
participants, which together creates market
inefficiencies. We believe that thorough robust
analysis and deep local relationships combinedwith our significant hands-on experience allow us
to identify and capitalize on these market
inefficiencies that are not obvious to ourcompetitors.

5

Risk Control

Our objective is to achieve consistent and superiorrisk-adjusted returns by only assuming wellcalculated risks. When a potentially attractive
investment opportunity is identified, we examine all
the risks associated with the potential opportunity
through our rigorous review process. We thennegotiate with the counterparties to determine afair risk-sharing arrangement while formulating
structural solutions to eliminate or mitigate otherrisks, where possible. Concurrently, we conduct
quantitative and qualitative analyses to evaluate
the viability of the potential investment opportunity
against our strict underwriting criteria.

3

Maximizing and Unlocking Value

The real estate properties that we evaluate forinvestment are typically not operated to theirmaximum potential at the time of our investment.
Some owners are not professional real estate
investors, failed to invest necessary capital
expenditures, and/or had poorly managed leasing
strategies. Some real estate properties havecertain compliance issues that can be cured withlimited cost and time, or have potential to generatehigher net operating income if repositioned or
repurposed properly. We utilize our own
experience along with technical advice from thirdparty professionals, as necessary, to formulate andexecute the optimal asset management, capital
expenditures, renovation, and repositioning plans.
Implementation of these plans will maximize andunlock the property’s intrinsic value in the mostefficient manner from a cost and time perspective.

6

Dependability, Transparency andDecisive Action

Our trade counterparties know that they candepend on us when they need to sell their realestate related assets quickly, discreetly and/or
through a complex structure that others may not beable to handle or understand. We are always
candid and transparent by clearly explaining ourrequirements up front including expected deal
economics, our strict due diligence process, andthen work tirelessly and creatively to meet thecounterparty’s specific objectives and timing. Ourflat organization and highly efficient, decisionmaking process allows us to be very flexible,
tactical and decisive. This philosophy andexecution style are valued by our trade
counterparties who repeatedly bring attractive
investment opportunities that reward our clientswith outsized returns.

27

Status of Unitholders at the End of 8th Fiscal Period ended January 2020

List of major unitholders (Top 10)

Number of investment units by attribute: Total 540,824 units
7th FP

Unitholder name (Note25)

Number ofinvestment units

Holdingratio

8th FP0%
Individual

20%

40%

Financial institution

Domestic corporation

Ratio
Individual
Financial institution
Domestic corporation
Foreign

Securities company

30.4%
26.7%
3.0%
35.9%
4.0%

80%
Foreign100%

Unitholders' register
No. ofRatio
investment units

No. ofinvestment units

164,578
144,441
16,174
194,187
21,444

28.0%
29.2%
2.8%
38.0%
2.0%

Sponsor Group is excluded
No. ofRatio
investment units

151,554
157,671
14,937
205,576
11,086

1

The Master Trust Bank of Japan, Ltd.
(Trust account)

46,396

8.6%

2

Japan Trustee Service Bank, Ltd(Trust account)

42,131

7.8%

3Star Asia Capital Ⅰ LLC

24,195

4.5%

3Star Asia Capital Ⅱ LLC

24,195

4.5%

3Star Asia Capital Ⅲ LLC

24,195

4.5%

3Star Asia Capital Ⅳ LLC

24,195

4.5%

7

NORTHERN TRUST CO. (AVFC) RE UKDU
UCITS CLIENTS NON LENDING 10 PCT
TREATY ACCOUNT

20,837

3.9%

8

Trust & Custody Services Bank, Ltd.
(Security Trust Account)

19,4993.6%

9The Nomura Trust and Banking Co., Ltd.
(Trust Account)

13,156

2.4%

10

SSBTC CLIENT OMNIBUS ACCOUNT

10,422

1.9%

Total

249,221

46.1%

Securities company

End of 8th FP

End of 7th FP
Category

60%

34.1%
35.5%
3.4%
24.5%
2.5%

151,554
157,671
14,937
108,576
11,086

Number of unitholders by attribute: Total 16,656 units
7th FP
8th FP0%
Individual

20%

40%

Financial institution
End of 7th FP

Category
Ratio
Individual
Financial institution
Domestic corporation
Foreign
Securities company

97.1%
0.2%
1.7%
0.9%
0.1%

60%

Domestic corporation

No. ofpersons/entities

17,260
37
295
161
25

80%
Foreign100%

Securities company

End of 8th FP
Unitholders' register
No. ofRatio
persons/entities

97.0%
0.2%
1.6%
1.1%
0.1%

16,160
39
261
175
21

Sponsor Group is excluded
No. ofRatio
persons/entities

97.1%
0.2%
1.6%
1.0%
0.1%

16,160
39
261
169
21

28

Change in distribution since listing
Change in business results since listing(Unit: million yen)

3rd FP(ended Jul. 2017)
actual

4th FP(ended Jan. 2018)
actual

5th FP(ended Jul. 2018)
actual

6th FP(ended Jan. 2019)
actual

7th FP(ended Jul. 2019)
actual

8th FP(ended Jan. 2020)
forecast*

2,312

2,408

2,791

3,224

3,344

3,173

3,200

+27

Office rent

822

795

862

1,104

1,134

1,138

1,145

+7

Residence rent

391

410

500

458

438

438

439

+1

Logistics rent

642

696

906

912

910

817

817

△0

Hotel rent

220

282

287

447

500

494

477

△17

Other

235

223

235

302

349

284

320

35

549

536

607

678

798

785

769

△15

1,763

1,871

2,184

2,545

2,535

2,388

2,431

+42

287

305

355

409

415

422

420

△2

1,476

1,566

1,828

2,135

2,119

1,966

2,011

+45

Mezzanine

-

14

18

22

20

20

21

+0

TK distribution

5

6

+1

Lease business revenue

Expenses related to rent
business(Depreciation is excluded)
NOI
Depreciation
Rent revenues/expenses

8th FP
Comparison with(ended Jan. 2020)
forecast
actual

-

-

-

-

7

Gain on sale of real estate
property

898

771

-

598

422

-

-

-

SGA

276

300

270

349

344

321

316

△4

2,098

2,051

1,576

2,406

2,225

1,670

1,721

+51

Non-operating income

0

0

0

0

0

-

1

+1

Non-operating expenses

264

176

270

333

261

228

227

△0

Ordinary income

1,833

1,876

1,305

2,073

1,965

1,441

1,494

+52

Net income

1,832

1,802

1,305

2,049

1,964

1,441

1,493

+52

Cash distribution per unit

4,423 yen

4,077 yen

2,773 yen

3,720 yen

3,625 yen

2,770 yen

2,788 yen

+18 yen

FFO per unit

2,948 yen

3,224 yen

3,529 yen

3,440 yen

3,620 yen

3,446 yen

3,539 yen

+93 yen

0

113

113

151

155

98

141

+42

Operating income

Balance of Internal reserves* Sep 12, 2019 Announced in 7th FP closing of accounting report29Balance Sheets for the 8th Fiscal Period ended January 31, 2020
(Unit: thousand yen)
7th FP(As of July 31, 2019)

8th FP(As of January 31, 2020)

AssetsCurrent assets

7th FP(As of July 31, 2019)

8th FP(As of January 31, 2020)

Liabilities
Current liabilities

Cash and deposits

1,743,631

1,622,851

Operating accounts payable

Cash and deposits in trust

3,940,970

3,848,378

Current portion of long-term loans payable

254,637

338,896

7,300,000

11,300,000

Operating accounts receivable

55,90645,608

Accounts payable - other

293,558

269,588

Prepaid expenses

132,744

112,436

Accrued expenses

10,03011,903Other

11,2988,689

5,884,550

5,637,964

Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust

33,118,834

33,247,569

Accumulated depreciation△2,106,616△2,521,046

Buildings in trust, net

31,012,218

30,726,523

15,784

15,784

Accumulated depreciation△1,893△2,431

Structures in trust, net

13,89013,352

Structures in trust

Machinery and equipment in trust

46,68046,680

Accumulated depreciation△7,236△9,570Machinery and equipment in trust, net

39,444

37,110Tools, furniture and fixtures in trust

33,33836,546

Accumulated depreciation△8,460△11,336

Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment

24,87725,21068,602,052

68,602,052

99,692,483

99,404,248

Intangible assets
3,459,138

3,459,138

Total intangible assets

3,459,138

3,459,138

Investments and other assets
723,220

711,912Long-term loans receivable

300,000

300,000

Long-term prepaid expenses

168,174

121,497

Lease and guarantee deposits

10,962

10,862

Other

2,024

3,625

1,204,382

1,147,898

Total non-current assets

605

Accrued consumption taxes

199,468

35,586

Advances received

517,389

531,192

Other

30,552

14,2998,606,243

12,502,070

44,280,000

40,280,000

Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Other

6,669

6,718

2,478,925

2,459,766

128,960

101,271

46,894,554

42,847,755

55,500,798

55,349,826

Unitholders’ capital

52,745,966

52,745,966

Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus

2,115,855

1,649,263

2,115,855

1,649,263

Total unitholders’ equity

54,861,822

54,395,229

Deferred gains or losses on hedges△122,065△95,806

Total valuation and translation adjustments△122,065△95,806

54,739,757

54,299,423

110,240,555

109,649,249

Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity

Total net assets

Investments securities

Total assets

605

Valuation and translation adjustments

Leasehold rights in trust

Total investments and other assets

Income taxes payable

104,356,004

104,011,285

110,240,555

109,649,249

Total liabilities and net assets

30

Statement of Income for the 8th Fiscal Period (From August 1, 2019 to January 31, 2020)(Unit: thousand yen)
7th FP
From: February 1, 2019
To: July 31, 2019

8th FP
From: August 1, 2019
To: January 31, 2020

Operating revenue
Lease business revenue

3,092,125

2,988,424

Other lease business revenue

242,455

212,244

Gain on sale of real estate property

422,504-

Other revenue

28,185

27,1603,785,271

3,227,829

Total operating revenue
Operating expenses
Expenses related to rent business

1,214,656

1,189,614

Asset management fee

251,121226,759

Asset custody and administrative service fees

23,58323,757

Directors’ compensation

2,400

2,400

Other operating expenses

67,54863,888

Total operating expenses

1,559,310

1,506,419

2,225,961

1,721,410

Operating income
Non-operating income
Interest income

Reversal of unpaid distribution

30

27

-

997

Interest on refund883

1

Total non-operating income

913

1,026

Interest expenses

155,935

165,266

Borrowing related expenses

105,827

62,670Total non-operating expenses

261,763

227,937

Ordinary income

1,965,111

1,494,499

Income before income taxes

1,965,111

1,494,499

Income taxes - current

605

605

Total income taxes

605

605

1,964,506

1,493,894

Non-operating expenses

Net income

Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

151,349

155,368

2,115,855

1,649,263

31

Investment
ratio
(%)

Appraisal
NOI yield(%)

Investment
ratio
(%)

Appraisal
NOI yield
(%)

3,070

2.9

4.7

Urban Park Azabujuban

Minato-ku, Tokyo

2,045

2,480

2.0

4.4

6,065

6,960

5.9

5.1

Urban Park Daikanyama

Shibuya-ku, Tokyo

6,315

8,240

6.2

4.7

Shibuya-ku, Tokyo

1,763

2,510

1.7

6.4

Urban Park Namba

Osaka-shi, Osaka

1,490

1,650

1.5

5.4

Alphabet Seven

Minato-ku, Tokyo

1,725

2,670

1.7

6.1

Urban Park Gokokuji

Toshima-ku, Tokyo

1,460

1,530

1.4

4.8

Shibuya MK Building

Shibuya-ku, Tokyo

2,042

3,260

2.0

5.9

Urban Park Kashiwa

Kashiwa-shi, Chiba

1,186

1,190

1.2

5.0

Asahi Building

Yokohama-shi,
Kanagawa

6,320

7,840

6.2

5.0

Urban Park Ryokuchi-koen

Suita-shi, Osaka

1,550

1,620

1.5

5.7

Hakata-eki East Place

Fukuoka-shi, Fukuoka

2,286

2,590

2.2

5.2

Urban Park Koenji

Suginami-ku, Tokyo

1,167

1,180

1.1

4.7

Nihonbashi Hamacho Park
Building
Amusement Media Gakuin
HonkanChuo-ku, Tokyo

1,450

1,550

1.4

4.7

Subtotal

15,213

17,89014.9

4.9

Shibuya-ku, Tokyo

2,580

2,690

2.5

4.0

Iwatsuki Logistics

Saitama-shi, Saitama

6,942

7,310

6.8

4.8

Higashi Kobe Center
Building

Kobe-shi, Kobe

7,440

7,520

7.3

5.8

Yokohama Logistics

Yokohama-shi,
Kanagawa

3,560

4,170

3.5

5.7

Amusement Media Gakuin
Shinkan

Shibuya-ku, Tokyo

1,020

1,160

1.0

4.0

Funabashi Logistics

Funabashi-shi, Chiba

7,875

8,650

7.7

5.3

35,664

41,820

34.8

5.2

Baraki Logistics

Ichikawa-shi, Chiba

4,700

4,850

4.6

4.3

Tokoyozawa Logistics

Tokorozawa-shi,
Saitama

1,300

1,350

1.3

5.7

Funabashi Nishiura
Logistics I

Funabashi-shi, Chiba

3,000

3,020

2.9

5.1

Funabashi Nishiura
Logistics II

Funabashi-shi, Chiba

821

850

0.8

7.0

Matsubushi Logistics

Kita-Katsushika-gun,
Saitama

2,755

2,860

2.7

5.5

Subtotal

30,95333,060

30.2

5.1

Total

102,374

113,280

100.0

5.0

Minami-Azabu Shibuya
Building

Minato-ku, Tokyo

2,973

Honmachibashi Tower

Osaka-shi, Osaka

Nishi-Shinjuku Matsuya
Building

R&B Hotel Umeda East

Osaka-shi, Osaka

2,069

2,320

2.0

5.5

Smile Hotel Namba

Osaka-shi, Osaka

1,750

1,490

1.7

4.3

Best Western Tokyo Nishikasai

Edogawa-ku, Tokyo

3,827

3,750

3.7

4.4

Best Western Yokohama

Yokohama-shi,
Kanagawa

3,248

3,250

3.2

4.6

Hotel WBF Fukuoka Tenjin
MinamiFukuoka-shi, Fukuoka

1,970

2,000

1.9

4.6

GLANSIT Akihabara

Chiyoda-ku, Tokyo

2,500

2,520

2.4

3.9

Best Western Tokyo
Nishikasai Grande

Edogawa-ku, Tokyo

3,180

3,210

3.1

4.0

Hotel WBF Art Stay
Namba

Osaka-shi, Osaka

2,000

1,970

2.0

4.3

20,544

20,510

20.1

4.4

Subtotal

Property nameResidence

Location

Subtotal

Hotel

Acquisition Appraisal
price
value
(million yen) (million yen)

Property name

Logistics

OfficePortfolio List (as of January 31, 2020)

Location

Acquisition Appraisal
price
value
(million yen) (million yen)

* “Appraisal value” is the value stated in the real estate appraisal report with July 31, 2019 as the date of valuation.

32

Other assets under management (as of January 31, 2020)<Mezzanine loan debt investment>
NumberType

Underlying asset, etc.

Name of the security（asset overview）

Acquisition
price(million yen)

Asset nameLocationInterest rate (Note25)

MEZ-01

Mezzanine(Subordinated bonds)

Star Asia Mezzanine Loan Debt
Investment Series 1

400

Relief Premium Haneda

Ota-ku, Tokyo

Base rate +5.0%

MEZ-03Mezzanine(Subordinated Beneficiary Interest)

Star Asia Mezzanine Loan Debt
Investment Series 3

126

The Royal Garden Residence
Shirokanedai

Minato-ku, Tokyo

Base rate +5.0%

MEZ-04

Mezzanine(Subordinated loan claims)

Star Asia Mezzanine Loan Debt
Investment Series 4300

Minato-ku, Tokyo

Base rate +5.0%

Total

DS Kaigan Building(Previously) Premier Kaigan
Building （Note 26）826<Silent partnership equity interest>
Number

TKI-01

TKI-02

Investments securities

GK SAPR8 subordinated silent partnership equity interest

GK SAPR7 silent partnership equity interest

Total

Investment
amount(million yen)

Underlying asset, etc.
Property nameLocation

Urban Park Mitsuike Koen

Yokohama-shi, Kanagawa

Urban Park Tokiwadai Koen

Yokohama-shi, Kanagawa

OHA Building

Tachikawa-shi, Tokyo

100

100

200

33

Appraisal Value and Indicators at the End of 8th Fiscal Period ended January 2020
Period-end appraisal value:

113,280 million yen

Total book value:

102,863 million yen

Period-end unrealized gains (losses):

10,416 million yen

Net assets per unit:

100,401 yen

Unrealized gains per unit:

Property nameAcquisition
price

(1)
Period-end
book value(2)
Appraisal value at
end of
8th FP(3)
Unrealized
gains(losses)(2)-(1)

2,069

2,121

2,320

198

Smile Hotel Namba

1,750

1,682

1,490

△192

19,261 yen

Best Western Tokyo Nishi-kasai

3,827

3,855

3,750

△105

116,873 yen

3,248

3,271

3,250

△21

NAV per unit (*1):

1,970

1,965

2,000

34

P/NAV per (*2):

0.98Best Western Yokohama
Hotel WBF Fukuoka Tenjin
Minami
GLANSIT Akihabara

2,500

2,508

2,520

11

Best Western Tokyo Nishikasai
Grande

3,180

3,175

3,210

34

Hotel WBF Art Stay Namba

2,000

1,994

1,970

△24

Subtotal

20,544

20,576

20,510△66

Urban Park Azabujuban

2,045

2,085

2,480

394

Urban Park Daikanyama

6,315

6,384

8,240

1,855

Urban Park Namba

1,490

1,513

1,650

136

Urban Park Gokokuji

1,460

1,506

1,530

23

Urban Park Kashiwa

1,186

1,246

1,190

△56

Hotel

R&B Hotel Umeda East(*1) NAV per unit = (Period-end net assets + Period-end unrealized gains – Total cash distribution)/ Total number of investment units issued and outstanding(*2) P/NAV per ＝Investment unit price / NAV per unit (Investment unit price on January 31, 2020: 114,700 yen)

Acquisition
price

(1)
Period-end
book value(2)
Appraisal value at
end of
8th FP

Urban Park Ryokuchi-koen

1,550

1,612

1,620

7

Minami-Azabu Shibuya Building

2,973

2,962

3,070

10７

Urban Park Koenji

1,167

1,189

1,180

△9

Honmachibashi Tower

6,065

5,860

6,960

1,099

Subtotal

15,213

15,537

17,8902,352

Nishi-Shinjuku Matsuya Building

1,763

1,820

2,510

689

Iwatsuki Logistics

6,942

6,648

7,310

661

Alphabet Seven

1,725

1,841

2,670

828

Yokohama Logistics

3,560

3,767

4,170

402

Shibuya MK Building

2,042

2,092

3,260

1,167

Funabashi Logistics

7,875

7,812

8,650

837

Asahi Building

6,320

6,330

7,840

1,509

Baraki Logistics

4,700

4,659

4,850

190

Hakata-eki East Place

2,286

2,316

2,590

273

Tokoyozawa Logistics

1,300

1,353

1,350

△3

1,450

1,458

1,550

91

Funabashi Nishiura Logistics I

3,000

2,959

3,020

60

2,580

2,592

2,690

97

Funabashi Nishiura Logistics II

821

857

850

△7

7,440

7,648

7,520

△128

Matsubushi Logistics

2,755

2,733

2,860

126

1,020

1,030

1,160

129

Subtotal

30,95330,79333,0602,266

102,374

102,863

113,280

10,416

Nihonbashi Hamacho Park
Building
Amusement Media Gakuin
HonkanHigashi Kobe Center
Building
Amusement Media Gakuin
ShinkanSubtotal

35,66435,95541,8205,864

Logistics

OfficeProperty name(3)
Unrealized
gains(losses)(2)-(1)

Residence(Unit: million yen)

Total

34

Portfolio List

Asset type

OfficeOfficeOfficeOfficeOfficeOfficeProperty nameMinami-Azabu Shibuya
Building

Honmachibashi Tower

Nishi-Shinjuku Matsuya
Building

Alphabet Seven

Shibuya MK Building

Asahi Building

Acquisition price

2,973 million yen

6,065 million yen

1,763 million yen

1,725 million yen

2,042 million yen

6,320 million yen

Appraisal value

3,070 million yen

6,960 million yen

2,510 million yen

2,670 million yen

3,260 million yen

7,840 million yen

Structure/Floors

SRC B1/7F

S/SRC B1/21F

SRC B1/9F

RC B1/6F

S 6F

S/SRCB2/12F

Location

Minato Ward, Tokyo

Osaka City, Osaka

Shibuya Ward, Tokyo

Minato Ward, Tokyo

Shibuya Ward, Tokyo

Yokohama City, Kanagawa

Lot area

766.11 m²

1,274.37 m²

589.94 m²(surface right)

1,286.45 m²

620.42 m²(of which 2.62 m²
leasehold)1,096.86 m2

Total floor areas

4,137.21 m²

15,407.83 m²

5,117.80 m²

4,132.80 m²

1,982.86 m²

12,353.83 m2

Construction
completion

June 15, 1993

February 8, 2010

May 28, 1987

January 6, 1990

July 31, 1993

November 25, 1994

Property Features⚫ Located in Minami-Azabu, a well⚫ Located in the Yodoyabashi /known, high-class residential area
Hommachi area, one of Osaka’sthat is also home to embassies ofleading office districts.
various countries.
⚫ Situated near facilities such as the⚫ In addition to access by train, theOsaka Chamber of Commerce andarea is well served by bus routes
Industry, MyDome Osaka, and Cityand provides convenient access to
Plaza Osaka, the area has a highvarious locations within central
concentration of office buildings.
Tokyo.
⚫ The residences on the upper floors of⚫ The area is highly appealing to
the building offer excellent views
companies in fashion, mass media,
overlooking landmarks such as Osakaand IT-related fields.
Castle.

⚫ Located in the Nishi-Shinjuku area,⚫ Located in the Akasaka area, one ⚫ Located in the Shibuya area, one ⚫ Located in the Yokohama Station
which has a high concentration ofof central Tokyo’s leadingof Japan’s leading commercial
West Exit area where there is a highoffice buildings.
office/commercial districts.
districts, the property has aconcentration of commercial andstrong appeal for fashion and IToffice buildings.
⚫ In addition to access by train, the area ⚫ The property is expected torelatedcompanies.
is well served by bus routes andattract strong demand from⚫ The floors can be subdivided into
provides convenient access to various
affiliated companies of tenants of ⚫ Following the completion of thesmaller spaces, enabling the building
locations within central Tokyo.
the TBS building, Akasaka Biz
Shibuya Station area
to flexibly accommodate demand fromTower, etc.
redevelopment project, further
branch offices of companies in⚫ The property is expected to attractdevelopment is expected going
various fields.
strong demand from affiliated⚫ Thanks to the popularity of theforward.
companies of tenants of large-scalearea, location conditions, etc.,⚫ With the completion of the Yokohamabuildings located in Shinjuku subthere is also strong demand for
Station area redevelopment project
center or its surrounding area.
the residential units of theand the Excite Yokohama 22 project,
property.
further development is expectedgoing forward.

35

Portfolio List

Asset type

OfficeOfficeOfficeOfficeOfficeResidence

Property nameHakata-eki
East Place

Nihonbashi Hamacho Park
Building

Amusement Media Gakuin
HonkanHigashi Kobe Center
Building

Amusement Media Gakuin
ShinkanUrban Park Azabujuban

Acquisition price

2,286 million yen

1,450 million yen

2,580 million yen

7,440 million yen

1,020 million yen

2,045 million yen

Appraisal value

2,590 million yen

1,550 million yen

2,690 million yen

7,520 million yen

1,160 million yen

2,480 million yen

Structure/Floors

SRC 9F

SRC 11FSRC S 8F/B1F

SRC 14F

RC 7F

SRC with slate roofing
B1/12F

Location

Fukuoka City, Fukuoka

Chuo Ward, Tokyo

Shibuya Ward, Tokyo

Kobe City, Hyogo

Shibuya Ward, Tokyo

Minato Ward, Tokyo

Lot area

1,129.86 m2

319.04 m2

433.21 m²

8,488.11 m²

203.43 m²

417.67 m2

Total floor areas

6,243.13 m2

2,383.76 m2

1,892.18 m²

25,740.46 m²

913.71 m²

2,564.94 m2

Construction
completion

February 24, 1986

July 13, 1992

November 2, 1994

January 6, 1992

January 25, 1999

November 29, 1999

Property
Features⚫ Located in the Hakata Station East ⚫ Located in Nihonbashi Hamacho⚫ Stable revenue is expected since a ⚫ Provides convenient access to⚫ Stable revenue is expected since it ⚫ Located in Azabu-Juban, an area
vocational school has rented theoffice and commercial areas sincearea, which has a higherarea, allowing easy access to
has the same tenant as that ofwith an elegant image that also
entire building for many years since
the building is centrally locatedconcentration of offices after the
major business areas in Central
Amusement Media Gakuin Honkan.
boasts popular appeal.
the completion.
between Osaka and Kobe, with an ⚫ The building is appealing tocompletion of redevelopment
Tokyo and use of various railways.
⚫ In addition to a stately tiled facade,11-minute ride to Sannomiya
projects in front of the station.
⚫ A number of major companies have ⚫ The building is appealing tocompanies as the property is
the property is fully equipped withcompanies as the property is
Station and 17-minute ride to⚫ Even more vitalization is expected
their head offices in this area, as it
located in an office area with many
premium household facilities.
located in an office area with many
Osaka Station from Settsu
for the Fukuoka (Hakata) area withis a very attractive area forforeign-affiliated companies, IT⚫ Adjacent to the Roppongi area, aforeign-affiliatedcompanies
and
ITMotoyama,
thecloseststationtothe start of “Tenjin Big Bangcompanies in various fields and of
related firms as well as companies
leading shopping spot in central
related firms as well as companies
the property.
Project” and the extension of somevarious sizes.
in the creative sector such as
Tokyo.
in the creative sector such as⚫ There is parking space for 180 cars
Fukuoka City Subway lines.
advertisingandcontent
creation⚫ Further development of the area isadvertising and content creationon the premises and for 112 cars
firms.
expected considering that it not
firms.
off the premises, which is very
only has characteristics of an office ⚫ Further development of the area isappealing to a wide range of retail ⚫ Further development of the area isarea, but also has characteristics of
expected considering that it is notexpected considering that it is not
tenants, particularly stores seeking
residential and tourism areas.
only an office area, but also has
only an office area, but also has
to attract customers.
elements of residential and tourism
elements of residential and tourism
areas.
areas.

36

Portfolio List

Asset type

Residence

Residence

Residence

Residence

Residence

Residence

Property nameUrban Park Daikanyama

Urban Park Namba

Urban Park Gokokuji

Urban Park Kashiwa

Urban Park Ryokuchi-koen

Urban Park Koenji

Acquisition price

6,315 million yen

1,490 million yen

1,460 million yen

1,186 million yen

1,550 million yen

1,167 million yen

Appraisal value

8,240 million yen

1,650 million yen

1,530 million yen

1,190 million yen

1,620 million yen

1,180 million yen

Structure/Floors

RC, B1/3F
RC, B1/9F

RC 14FRC B1F/5F

SRC B1F/8F

RC 8F

RC 4F

Location

Shibuya Ward, Tokyo

Osaka City, Osaka

Toshima Ward, Tokyo

Kashiwa City, Chiba

Suita City, Osaka

Suginami Ward, Osaka

Lot area

2,469.06 m2

670.39 m2(Of which, 50.85 m2 is contributed to
Toshima Ward as road)

1,597.85 m2

2,804.56 m2

988.26 m2

Total floor areas

8,261.29 m2(for 2 buildings combined)

2,776.87 m2

2,451.72 m2

4,243.71 m2

5,854.64 m2

1,524.34 m2

Construction
completion

1: November 15, 1982
2: May 30, 2006

January 9, 2013

February 28, 1990

August 28, 1997

March 10,1989

October 13, 1987

Property Features

942.66 m2⚫ Located in the Daikanyama area,⚫ Located near Namba, one of⚫ Located in an area with strong
which produces the latest trends.
Osaka’s leading commercial areas.
demand from various tenant groups
for single-type residences, due to the⚫ In addition to a stately tiled facade, ⚫ In addition to an elegant facade, thelocation characteristics of having
the property is fully equipped withbuilding is fully equipped withconcentration of universities andpremium household facilities.
premium household facilities.
junior colleges as well as Toshima⚫ Adjacent to the Shibuya and Ebisu ⚫ The influx of population into central
ward having a relatively high ratio ofareas, which are leading shopping
Osaka due to the impact of strong
single households.
spots in central Tokyo.
in-bound demand has had astabilizing effect on occupancy
rates.

⚫ Located in the Kashiwa area, aleading bed town in Chiba, withan excellent access to Central
Tokyo.
⚫ Further medium- to long-term
growth is expected in the area,with completion of various
redevelopment plans in front of
Kashiwa Station.

⚫ Located in the Ryokuchi-koen⚫ Located in the Koenji area, whicharea, with good traffic
allows for easy access to major areas
accessibility, providing a lushin the Tokyo metropolitan area.
greenery living environment such ⚫ With many shopping areas, discountas “Hattori Ryokuchi-koen”.
supermarkets, restaurants and pubs,⚫ Popular residential area primarily
having a high appeal to young singlefor families since it is located inperson households of businessthe Hokusetsu area, which has aperson and students.
high level of education.
⚫ Very popular residential area with its⚫ Appealing primarily for families
own unique culture, which can besince some of the units haveseen in its cafes, vintage clothing
been renovated and since it isshops, and clubs with live music,
equipped with substantial grade
among other locations.
household equipment.

37

Portfolio List

Asset type

Logistics

Logistics

Logistics

Logistics

Logistics

Logistics

Property nameIwatsuki Logistics

Yokohama Logistics

Funabashi Logistics

Baraki Logistics

Tokorozawa Logistics

Funabashi Nishiura Logistics I

Acquisition price

6,942 million yen

3,560 million yen

7,875 million yen

4,700 million yen

1,300 million yen

3,000 million yen

Appraisal value

7,310 million yen

4,170 million yen

8,650 million yen

4,850 million yen

1,350 million yen

3,020 million yen

Structure/Floors

Steel construction, zincplated steel roofing, 5 floors

RC 8F

Building 1: Steel construction, flat roof, zinc-plated
steel roofing, 8 floors
Building 2: Reinforced concrete structure

RC S 5F

S 2F

R 2F

Location

Saitama City, Saitama

Yokohama City, Kanagawa

Funabashi City, Chiba

Ichikawa City, Chiba

Tokorozawa City, Saitama

Funabashi City, Chiba

Lot area

15,623.14 m2

10,565.95 m2

19,858.00 m2

6,240.96 m2

8,645.63 m2

7,142.00 m2

Total floor areas

29,729.72 m2

18,387.89 m2(including 256.15 m2 breakareas etc.)

38,871.45 m2(two buildings combined)

12,471.50 m2

5,994.75 m2

14,018.82 m2

Construction
completion

October 29, 2014

October 1, 1994

1: September 25, 1992
2: August 5, 1997

August 14, 2015

April 30, 1999

October 11, 1985

Property Features⚫ A multi-tenant logistics facility⚫ Located in the Iwatsuki area, which ⚫ Located in the Yokohama bay area, ⚫ Located in the Chiba bay area, where ⚫ A multi-tenant logistics facility⚫ Appealing from a standpoint oflocated near the Wangan Ichikawa
used also as a warehouse,
offers access to the central Tokyo,
where there are many logistics
there are many logistics facilities.
securing workforce, as it is
IC
of
the
East
Kanto
Expressway.
locatedaround
8.7
km
from
the
northern Kanto, and Tohoku areas.
facilities.
conveniently located in the Chiba Bay⚫ Equipped with specifications that offer⚫ Enjoys good access to Central
Tokorozawa IC on the Kan-Etsu
area, where there are many logistics⚫ Equipped with specifications that⚫ Equipped with specifications thata high level of versatility, such as
Tokyo as well as the consumption
Expressway.
facilities, and it is located at approx.
offer a high level of versatility, suchoffer a high level of versatility, suchvehicle berths, floor height, andareas throughout Chiba, allowing⚫ Good access to Central Tokyo,
1.4km from the closest train station.
as the vehicle berths, floor height,
as vehicle berths, floor height, andcolumn interval.
tenants to respond to the needs ofand also capable of covering ae-commerce operators.
and column interval.
column interval.
⚫ In addition to access to Central⚫ In addition to accessing Central
wide range of destinations for⚫ Located within approx. 5-minuteTokyo, the location allows easy
consumption in the Tokyo⚫ The property is situated in a zone
⚫ In addition to accessing Central
Tokyo, it is possible to access thewalk from Futamata-Shinmachi
access to wide range of areas
Metropolitan area with theof Saitama City that offers
Tokyo, it is possible to access thewider Tokyo area thanks to thestation on the JR Keiyo Line,
openingoftheGaikanthroughout Tokyo via partial opening
incentives for logistics facilities andwider Tokyo area thanks to the
opening of the Tokyo Gaikan
allowing for securement ofExpressway
andtheMetropolitanof the Gaikan Expressway.
therefore benefits from
opening of the Shinagawa section
Expressway.
employees.
Inter-City Expressway.
considerable government support.
of the Shuto Expressway Central⚫ The facility is provided with highly⚫ Property with highly versatile⚫
Property
withhighlyversatile
specifications, including one
Circular Route.
versatile specifications such as highspecifications, including two
passenger elevator, two freightceiling floors and a pillar span.
freight elevators, a floor height ofelevators, a floor height of approx.
approx. 5.5 m-6.0 m, and a pillar
6.5 m and a pillar span of approx. 9span of approx. 9.5 m.
m-11 m.

38

Portfolio List

Asset type

Logistics

Logistics

Hotel

Hotel

Hotel

Hotel

Property name

Funabashi Nishiura
Logistics II

Matsubushi Logistics

R&B Hotel Umeda East

Smile Hotel Namba

Best WesternTokyo Nishi-kasai

Best Western Yokohama

Acquisition price821 million yen

2,755 million yen

2,069 million yen

1,750 million yen

3,827 million yen

3,248 million yen

Appraisal value

850 million yen

2,860 million yen

2,320 million yen

1,490 million yen

3,750 million yen

3,250 million yen

Structure/Floors

R 4F

RC 3F

RC 9F

S 9F

SRC B1F/9F

SRC B1F/9F

Location

Funabashi City, Chiba

Kita-Katsushika-gun,
SaitamaOsaka City, Osaka

Osaka City, Osaka

Edogawa Ward, Tokyo

Yokohama City,
Kanagawa

Lot area

3,964.00 m2

11,580.65 m2

730.26 m2

285.28 m2

1,418.00 m2

782.66 m2

Total floor areas

6,316.32 m2

19,833.47 m2

3,945.65 m2

1,711.42 m2

5,293.88 m2

4,686.09 m2

Construction
completion

Warehouse: Mar.
20, 1991
Plant: May 15, 1972
Office: May 13, 1986

March 31, 1997

October 20, 2000

February 6, 2008

March 19, 1991

September 21, 1987

Property Features⚫ A business hotel located within⚫ Located near Umeda, one of⚫ Located near Namba, one of⚫ A business hotel located withinapprox. 4-minute walk from
Osaka’s leading office andOsaka’s leading commercial areas.
approx. a 2-minute walk from⚫ Appealing from a standpoint of⚫ Located in Matsubushi area, with“Tsurumi” Station on the JR Keihincommercial areas.
Nishikasai
Station
of
Tokyo
Metro
⚫ In addition to excellent access tosecuring workforce, as it iseasy access to nearby areas such
Tohoku Line and a 3-minute walkTozai Line.
⚫ With over 200 single-occupancy
Namba, located near Kyocera
conveniently located in the Chiba
as Saitama Prefecture and Chiba
from “Keikyu Tsurumi” Station on
rooms, the hotel is able toDome Osaka, addressing multiple⚫ Excellent location characteristics that
Bay area, where there are many
Prefecture, in addition to Kita-Kanto,
the Keihin Kyuko Line.
accommodate significant businessbusiness- and tourism-based
can attract a fair amount of Tokyo
logistics facilities, and it is locatedJoban, and Tohoku areas.
⚫ Excellent location characteristics thatand tourism-based demand.
demand.
Disney Resort-related leisure
at approx. 1.1km from the closest
can attract both business travelers⚫ Provided with versatile
travelers, as it stands in a straight-line⚫ Due to the impact of strong in⚫ Due to the impact of strong inboundand leisure travelers, as its location
train station.
specifications, such as loading
distanceof
approx.
4
km
away
from
bound demand in Osaka, further
demand in Osaka, further hotel
has good access to the major areas⚫ In addition to access to Central
berths, cargo elevators, highTokyo Disney Resort.
in Kanagawa including Yokohama
hoteldemandis
expected.
demandis
expected.
Tokyo, the location allows easy
ceiling, and a pillar span.
and Kawasaki as well as to Haneda
⚫
A
hotel
with
great
appealtoavarietyaccess to wide range of areas⚫ Back ups from the local government
Airport.
of guests with various types of guest
throughout Tokyo via partial
through activities by Saitama⚫ A hotel with great appeal to a variety
rooms depending on the intended
opening of the Gaikan Expressway.
Prefecture to attract companies (theof guests with various types of guest
use.
⚫ The facility is provided with highly“Chance Maker Saitama Strategy”).
rooms depending on the intended
versatile specifications such asuse.
high-ceiling floors and a pillar span.

39

Portfolio List

Asset type

Hotel

Hotel

Hotel

Hotel

Property name

Hotel WBF
Fukuoka Tenjin Minami

GLANSIT Akihabara

Best WesternTokyo Nishikasai Grande

Hotel WBF Art Stay Namba

Acquisition price

1,970 million yen

2,500 million yen

3,180 million yen

2,000 million yen

Appraisal value

2,000 million yen

2,520 million yen

3,210 million yen

1,970 million yen

Structure/Floors

RC 10F

SRC 10F/B1F

S 8F

RC9F

Location

Fukuoka City, Fukuoka

Chiyoda Ward, Tokyo

Edogawa Ward, Tokyo

Osaka City, Osaka

Lot area

534.94 m2

167.74 m2

657.00 m2

335.31 m2

Total floor areas

2,281.49 m2

1,081.97 m2

2,755.19 m2

2,061.38 m2

Construction
completion

February 20, 2017

September 20, 2017

February 7, 2017

April 7, 2017

Property Features⚫ The hotel is centrally located⚫ Located in the Akihabara area, one ⚫ Located in the Nishi Kasai area,
between Tenjin and Nakasu, thus itof the largest tourism spots in Tokyo. which provides the easy access tois expected to attract tourists and⚫ Appealing to guests for the purpose
main business and tourism areas inbusiness guests.
of business and tourism as it isTokyo.
⚫ Demand for hotels is expected tolocated in a highly convenient and⚫ The hotel flexibly responds to theincrease with a rising number offlourishing area.
needs of many business people andpassengers using the Fukuoka⚫ Offers three types of capsules,
tourists as it provides various room
Airport and development of
attracting various customers.
types in accordance with purpose ofadditional runways.
⚫ Completed relatively recently inuse.
⚫ Completed relatively recently in
September 2017.
⚫ Completed relatively recently in
February 2017.
February 2017.

⚫ Located in the Namba area, one of thelargest commercial areas in Osaka.
⚫ Good access from sightseeing spots
and business district, thereby
expected to meet huge business andtourism demand.
⚫ Demand for hotels is expected toincrease as inbound demand rises in
Osaka.
⚫ Completed relatively recently in April
2017..

40

Balance of Payments of Individual Properties(Unit: thousand yen)
OFC-01

OFC-03

OFC-04

OFC-05

OFC-06

Minami-Azabu Shibuya Building

Honmachibashi Tower

Nishi-Shinjuku Matsuya Building

Alphabet Seven

Shibuya MK Building

7th FP
Total operating revenue
from real estate leasing

8th FP

7th FP

8th FP

7th FP

8th FP

7th FP

8th FP

7th FP

8th FP

97,12496,950223,750

217,369

105,813

107,954

73,11975,36776,567

79,478

Lease business revenue

88,502

88,172

192,776

192,577

98,57599,60766,44068,814

71,14973,938Other lease businessrevenue

8,621

8,777

30,974

24,792

7,237

8,346

6,679

6,553

5,417

5,539

Total operating expenses
from real estate leasing

25,207

26,386

66,29062,771

34,42735,362

28,031

20,105

18,521

14,129Management fee

5,874

5,703

13,86013,845

6,774

6,802

4,858

4,735

4,921

5,115

400

400

400

400

400

400

400

400

350

350

Utilities expenses

6,943

7,077

24,36125,259

8,454

8,790

4,350

4,754

3,946

3,893

Insurance premium

114

116

352

358

126

129

98

99

44

45

Repair expenses

103

468

5,166

1,556

1,915

3,714

10,971

1,990

434

235

Taxes and dues

4,563

4,560

19,73019,730

3,426

3,426

6,213

6,214

4,322

4,322

Other expenses

7,208

8,061

2,420

1,620

13,32912,099

1,139

1,910

4,502

168

NOI

71,91670,563

157,459

154,598

71,38572,59145,08755,26258,046

65,348Depreciation

11,555

11,55645,04845,343

8,288

8,440

4,717

5,426

3,317

3,342

Operating income (loss)
from real estate leasing

60,36159,006112,411109,255

63,09764,15140,37049,83654,72862,006

Capital expenditures

824

-

9,869

-

5,525

258

48,786

7,801

1,107

-

71,092

7,0563

147,590

154,598

65,86072,332△3,69847,46056,93965,348Trust fee

NCF

41

Balance of Payments of Individual Properties(*) Not disclosed as consent for disclosure has not been obtained from the tenant.
OFC-09OFC-10

OFC-11

OFC-12Asahi Building

Hakata-eki East Place

Nihonbashi Hamacho
Park Building

Amusement Media Gakuin
HonkanHigashi Kobe Center Building

7th FP

7th FP

7th FP

7th FP
Total operating revenue
from real estate leasing(Unit: thousand yen)

OFC-08

8th FP

8th FP

8th FP

8th FP

7th FP

8th FP

221,972

226,226

99,448102,116

43,92848,238

312,718

311,330

Lease business revenue

205,477

208,20389,28791,43743,92848,238279,751

275,087

Other lease businessrevenue

16,49518,022

10,161

10,679--32,96636,243

Total operating expenses
from real estate leasing

57,07360,773

26,57026,002

15,34912,542150,830

119,299

Management fee

15,674

15,948

7,936

7,985

779

824

23,44726,551

400

400

400

400

400

400

400

400

Utilities expenses

18,954

19,325

8,455

7,185

-

-

41,52135,342

Insurance premium

351

357

165

167

121

123

645

656

Repair expenses

3,129

7,053

2,047

1,884

150

68

33,646

2,504

Taxes and dues

16,195

16,195

6,801

6,801

4,299

4,299

29,15029,147

Other expenses

2,368

1,493

764

1,577

9,598

6,826

22,017

24,697

NOI

164,898

165,452

72,87876,11428,57835,695

161,887

192,031

Depreciation

25,672

26,119

7,121

7,391

2,837

2,837

32,12432,806

Operating income (loss)
from real estate leasing

139,226

139,332

65,75768,72325,74132,858

129,762

159,225

Capital expenditures

16,897

12,0205,425

13,571--

38,781

1,081

NCF

148,001

153,431

67,45262,54328,57835,695

123,105

190,949

Trust fee

(*)

(*)

42

Balance of Payments of Individual Properties(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

(Unit: thousand yen)

OFC-13
OfficeTotal

Amusement Media Gakuin
Shinkan
7th FP

8th FP

RSC-01

RSC-02

RSC-05

Urban Park Azabujuban

Urban Park Daikanyama

Urban Park Namba

7th FP

7th FP

7th FP

8th FP

1,341,598

1,352,983

56,35659,237

195,825

187,268

50,752

50,6971,217,653

1,228,922

53,42255,027

182,487

176,40747,791

49,208Other lease businessrevenue

123,945

124,060

2,934

4,209

13,337

10,860

2,961

1,489

Total operating expenses
from real estate leasing

435,998

392,534

13,191

11,29335,69544,405

16,147

12,189Management fee

86,47689,701

2,091

2,652

8,718

8,556

2,573

2,585

Trust fee

4,346

4,350

350

350

350

350

350

350

121,760

116,754

555

503

4,779

4,287

450

374

2,128

2,130

56

57

193

196

62

63

Repair expenses

58,91422,068

4,168

2,380

4,710

10,535

3,679

2,368

Taxes and dues

98,917

98,900

2,831

2,831

11,39911,399

2,820

2,820

Other expenses

63,45558,627

3,137

2,517

5,544

9,080

6,211

3,627

NOI

905,599

960,449

43,16547,943

160,129

142,863

34,60538,507

Depreciation

145,940

148,556

4,815

4,852

12,502

12,686

7,515

7,537

Operating income (loss)
from real estate leasing

759,659

811,892

38,34943,091

147,626

130,176

27,08930,970Capital expenditures

128,087

35,622

702

1,019

3,741

3,257

-

615

NCF

777,511924,826

42,46346,923

156,388

139,605

34,60537,891

Total operating revenue
from real estate leasing
Lease business revenue

Utilities expenses
Insurance premium
(*)

(*)

8th FP

8th FP

7th FP

8th FP

43

Balance of Payments of Individual Properties(Unit: thousand yen)
RSC-06

RSC-07

RSC-08

RSC-09Urban Park Gokokuji

Urban Park Kashiwa

Urban Park Ryokuchi-koen

Urban Park Koenji

7th FP
Total operating revenue
from real estate leasing

8th FP

7th FP

8th FP

7th FP

8th FP

7th FP

Residence
Total

8th FP

7th FP

8th FP

53,38352,187

37,10038,09457,41358,38336,20036,647

487,031482,516

Lease business revenue

49,12050,62735,46337,181

54,97955,57533,311

34,294

456,576

458,322

Other lease businessrevenue

4,263

1,560

1,636

913

2,433

2,808

2,888

2,352

30,45424,194

Total operating expenses
from real estate leasing

24,104

15,36811,005

12,653

16,44113,808

9,481

6,817

126,068

116,536

Management fee

3,854

4,603

2,060

2,151

2,305

2,830

1,822

1,810

23,42725,190

400

400

350

350

350

350

400

400

2,550

2,550

Utilities expenses

2,664

2,405

893

725

2,260

2,323

1,612

1,467

13,21512,087

Insurance premium

52

53

83

85

117

119

36

36

602

612

Repair expenses

6,898

3,340

2,649

5,900

3,532

2,177

2,098

1,512

27,73628,215

Taxes and dues

1,855

1,855

2,952

2,951

3,578

3,578

962

962

26,39926,399Other expenses

8,379

2,710

2,016

489

4,298

2,429

2,549

626

32,13621,480NOI

29,27936,81926,09425,441

40,971

44,574

26,71829,830360,963

365,979

Depreciation

5,156

5,310

7,012

7,143

7,711

7,842

2,474

2,479

47,18847,853Operating income (loss)
from real estate leasing

24,12231,50819,082

18,29733,25936,732

24,24427,350313,774

318,126

Capital expenditures

9,072

-

6,232

4,268

10,855

5,119

246

-

30,85014,281

NCF

20,20736,81919,862

21,172

30,11539,45526,471

29,830330,112351,697

Trust fee44Balance of Payments of Individual Properties(*) Not disclosed as consent for disclosure has not been obtained from the tenant.
LGC-02

LGC-03

LGC-04

LGC-05

Iwatsuki Logistics

Yokohama Logistics

Funabashi Logistics

Baraki Logistics

Tokorozawa Logistics

7th FP
Total operating revenue
from real estate leasing(Unit: thousand yen)

LGC-01

8th FP

7th FP

8th FP

7th FP

8th FP

202,082

202,816

273,565

260,597

Lease business revenue

187,738

187,713

241,755

241,793

Other lease businessrevenue

14,344

15,10331,81018,804

Total operating expenses
from real estate leasing

36,034

37,66969,26657,179Management fee

5,650

5,920

12,17811,308

350

350

400

400

Utilities expenses

14,34415,155

14,513

17,047

Insurance premium

271

275

390

397

Repair expenses

1,531

2,073

17,8804,808

Taxes and dues

13,72913,72823,05523,055

Other expenses

157

166

848

162

NOI

166,048

165,146

204,299

203,418

Depreciation

46,532

46,54426,85926,918Operating income (loss)
from real estate leasing

119,515

118,602

177,439

176,499

-

1,627

3,112

2,987

166,048

163,519

201,186

200,430

Trust fee

Capital expenditures
NCF

(*)

(*)

7th FP

8th FP

7th FP

8th FP

(*)

(*)

(*)

(*)

45

Balance of Payments of Individual Properties(*) Not disclosed as consent for disclosure has not been obtained from the tenant.

(Unit: thousand yen)

LGC-06

LGC-07

LGC-08

Funabashi Nishiura LogisticsⅠ

Funabashi Nishiura LogisticsⅡ

Matsubushi Logistics

7th FP

8th FP

7th FP

8th FP

7th FP

HTL-01

8th FP

Total operating revenue
from real estate leasing

Logistics facility
Total
7th FP

R&B Hotel Umeda East

8th FP

7th FP

8th FP

1,004,948

887,758

65,39265,302

Lease business revenue

916,892

823,769

65,39265,302Other lease businessrevenue

88,05563,989--Total operating expenses
from real estate leasing

185,780

210,388

7,412

6,685

Management fee

31,125

31,110742

742

Trust fee

3,050

3,050

350

350

Utilities expenses

44,36048,092

10

4

1,413

1,438

111

113

Repair expenses

24,71729,429722-

Taxes and dues

77,142

77,105

5,450

5,450

Other expenses

3,970

20,162

24

23

NOI

819,168

677,370

57,98058,617

Depreciation

144,051

144,591

9,777

9,786

Operating income (loss)
from real estate leasing

675,116

532,779

48,203

48,831

Capital expenditures

16,98261,012

560

-

NCF

802,185

616,358

57,42058,617

Insurance premium
(*)

(*)

(*)

(*)

(*)

(*)

46

Balance of Payments of Individual Properties(*) Not disclosed as consent for disclosure has not been obtained from the tenant.
HTL-03

HTL-04

HTL-05

HTL-06

Smile Hotel Namba

Best WesternTokyo Nishi-kasai

Best Western
Yokohama

Hotel WBF
Fukuoka Tenjin Minami

GLANSIT Akihabara

7th FP
Total operating revenue
from real estate leasing(Unit: thousand yen)

HTL-02

8th FP

7th FP

8th FP

7th FP

8th FP

40,25831,31999,87984,60080,40080,40040,25831,31999,87984,60080,40080,400

Other lease businessrevenue

-

-

-

-

-

-

Total operating expenses
from real estate leasing

5,042

4,710

9,926

10,181

7,990

7,747

Management fee

660

660

1,200

1,200

1,200

1,200

Trust fee

550

550

400

400

400

400

Utilities expenses

-

-

-

-

-

-

Insurance premium

53

53

124

126

105

106

Repair expenses

798

1,111

208

461

1,555

772

Taxes and dues

2,281

2,281

7,971

7,970

4,706

4,705

Other expenses

699

53

22

22

23

561

NOI

35,216

26,60989,952

74,41872,40972,652

Depreciation

12,237

12,225

11,78911,84912,052

12,524

Operating income (loss)
from real estate leasing

22,97814,38378,16362,56860,35660,128

-

-

1,318

799

11,397

20,22735,216

26,60988,63473,61861,011

52,425

Lease business revenue

Capital expenditures
NCF

7th FP

8th FP

7th FP

8th FP

(*)

(*)

(*)

(*)

47

Balance of Payments of Individual Properties(*) Not disclosed as consent for disclosure has not been obtained from the tenant.
HTL-08

Best WesternTokyo Nishikasai Grande

Hotel WBF Art Stay Namba

7th FP
Total operating revenue
from real estate leasing(Unit: thousand yen)

HTL-07

8th FP

7th FP

8th FP

Hotel
Total
7th FP

Total

8th FP

7th FP

8th FP

70,00270,002501,002477,410

3,334,581

3,200,669

70,00270,002501,002477,410

3,092,125

2,988,424

Other lease businessrevenue

-

-

-

-

242,455

212,244

Total operating expenses
from real estate leasing

6,767

6,796

50,97949,976

798,827

769,435

Management fee

990

990

7,419

7,419

148,449

153,423

Trust fee

400

400

3,183

3,200

13,12913,150Utilities expenses

-

-

10

4

179,347

176,939

Insurance premium

63

64

582

592

4,727

4,773

Repair expenses

-

25

3,285

2,371

114,653

82,084

Taxes and dues

5,294

5,293

35,641

35,639238,101

238,044

Other expenses

19

22

856

748

100,418

101,019

NOI

63,234

63,205450,022427,433

2,535,753

2,431,233

Depreciation

10,857

10,85778,64879,177415,829

420,178

Operating income (loss)
from real estate leasing

52,37752,348371,374

348,256

2,119,924

2,011,055--

13,27521,026

189,197

131,943

63,234

63,205436,747

406,4072,346,556

2,299,290

Lease business revenue

Capital expenditures
NCF

(*)

(*)

48

6. Notes

49

<Notes>
Note1

Unless otherwise stated within this document, references to all monetary amounts have been rounded down to the nearest monetary unit described, and ratios have beenrounded to the decimal point described.

P1

Note2

“Tokyo area”: “Tokyo area” refers to Tokyo’s 23 wards and the cities of Kawasaki and Yokohama for office properties and retail facilities, and Tokyo and the three prefectures of
Kanagawa, Saitama and Chiba for residential properties, logistics facilities, hotels and student residences.
“Middle-size assets” are properties with acquisition prices of less than JPY10bn.

P3

Note3

The index has been prepared by calculating the closing price of SAR investment units on the date of listing of SAR of 98,300 yen, by conversion from the closing price of the TSE
REIT Index on the same day (1,887.75).

P5

Note4

The price stated in the appraisal report obtained by SAR and Star Asia Investment Management Co., Ltd., (based on price as of November 1, 2019) is used as the assumed
price of acquiring the SSR portfolio. The same applies in this material.

P5

Note5

SAR’s acquisition price after 5th asset replacement.

P5

Note6

As of January 31, 2020.

P5

Note7

Part of the gain on sale will be used as merger-related expenses.

P5

Note8

As of December 1, 2019.

P5

Note9

Appraised cap rate is the ratio of the appraisal NOI calculated using the direct capitalization method to the planned transfer price or planned acquisition price, rounded to the firstdecimal place.

P5

Note10Names after acquisition. Current names are “Chrysantheme Ichigao” and “La Soeur Gyotoku”, respectively, but will be changed to the names indicated on the left side, shortly
after acquisition by SAR.

P6

Note11

Office and Retail refer to the 23 wards of Tokyo, Kawasaki City and Yokohama City; Residence, Logistics, Hotel and Student Residence refer to Tokyo, Kanagawa Prefecture,
Saitama Prefecture and Chiba Prefecture.

P6

Note12

Figures in SAR (pre-merger) are based on the expected acquisition price after the asset replacement; those in SSR (pre-merger) are calculated based on the assumed
acceptance price; and those in SAR (post-merger) are calculated based on the respective expected acquisition/assumed acceptance prices.

P6

Note13

Assets that are classified as "Other" in SSR (pre-merger) are classified as "Logistics" in SAR (post-merger) in accordance with Star Asia Investment Management operation
guidelines.

P6

Note14

The figure for the number of properties is after the asset replacement.

P6

Note15The number of tenants of SAR (pre-merger) is based on lease contracts effective as of the end of January 2020,
the figure for SSR (pre-merger) is based on lease contracts effective as of the end of December 2019, and the figure for SAR (post-merger) is the sum of the figures.

P7

Note16

SSR unitholders who made investment unit purchase demand will be excluded.

P15

Note17

The rent gap is the gap between market rent and contract rent with each tenant. The market rent has taken the intermediate value of the expected new contract rents(described as a range) for each property appraised by CBRE as of the end of the period. With respect to Amusement Media Gakuin Honkan / Shinkan, the net rentablearea is used for calculation.

P15

Note18For each property, the index of the historical trend has been prepared by assuming that the average tsubo unit price as of the period in which the property was acquired is"100".

50

<Notes>
P15

Note19Properties which were vacant at the beginning of the period or at the time of property acquisition for which contracts have been entered into with new tenants have been counted
as "Increased" within the number of new contracts. The increase ratio has been calculated by subtracting the aggregate amount of monthly rents from existing tenants (i.e.
before addition of new tenants) from the aggregate amount of monthly rent of newly contracted tenants, and then dividing such calculated amount by the aggregate amount ofmonthly rents from existing tenants (excluding warehouse portion). With respect to properties which were vacant at the beginning of the period orwhen acquired, and for which contracts have been newly signed with tenants, the rent unit price of surrounding properties at the bottom of the range have been used as
the assumed rent unit price of existing tenants (prior to addition of new tenants) for the purpose of calculating the aggregate amount of monthly rents of existing tenants.

P15

Note20

The ratio of the increased portion has been calculated using the aggregate amount of former rent amounts of renewing tenants.

P16

Note21

The calculation has been made by extracting just the residence portions.

P16

Note22For each property, the index of the historical trend has been prepared by assuming that the average tsubo unit price as of the period in which the property was acquired is"100".

P18

Note23The interest rates shown take into consideration the effects of interest rate swaps (fixing of interest rates).

P18

Note24

JBA 1-month yen TIBOR

P28

Note25

Star Asia Capital Ⅰ～ Ⅳ LLC are Sponsor Group.

P33

Note26

The name of the underlying assets for MEZ-04 has changed from “Premier Kaigan Building” to “DS Kaigan Building”.

P33

Note27The base interest rate : JBA 3-month yen TIBOR

51

Disclaimer
This document has been prepared to provide information and is not for soliciting and inviting investment in or recommendingtransaction of certain products. SAR does not guarantee the accuracy or completeness of the information provided in thisdocument although effort has been made to provide correct information based on information available to SAR. Moreover,please note that the contents of this document are subject to change or removal without prior notice. Duplication andreproduction, etc. of the contents contained in this document without prior consent is prohibited. This document includes
graphs, data, etc. publicly disclosed by third parties. Furthermore, the document also includes analysis, judgement and other
opinions by Star Asia Investment Management, Co,. Ltd. concerning such information. This document discusses future
expectations, identifies strategies, contains projections of our results operations or financial condition, or states other forwardlooking information based on certain assumptions, estimates and projections, Known and unknown risks, uncertainties andother factors could cause our actual results, performance or achievements to differ materially from those contained or impliedin any forward-looking statement. We cannot give any assurances that the expectations expressed in these forward-looking
statements will turn out to be correct.
Copying, reprinting or any other use of the contents of this document without prior approval is strictly prohibited.

■ Contact regarding this material
Akiko Kanno, Director and CFO (General Manager of Finance Management Department)

Star Asia Investment Management Co., Ltd.
Atago Green Hills Mori Tower 18F, 2-5-1, Atago, Minato-ku, Tokyo 105-6218
Tel: +81-3-5425-1340
52