Disclaimers
This document has been prepared solely for the purpose of providing U.K. and Dutch investors
with certain information under section 3.2 of the Investment Funds Sourcebook of the Handbookof Rules and Guidance of the Financial Conduct Authority (the "FCA") and Article 23 of theEuropean Alternative Investment Fund Managers Directive (Directive 2011/61/EU) (the“AIFMD”) as implemented in the Netherlands respectively. Accordingly, you should not use
this document for any other purpose.
Netherlands
The units of Star Asia Investment Corporation (“Star Asia” or the “AIF”) are being marketed in
the Netherlands under Section 1:13b of the Dutch Financial Supervision Act (Wet op het
financieel toezicht, or the “Wft”). In accordance with this provision, Star Asia Investment
Management Co., Ltd. (the “Asset Manager” or the “AIFM”) has submitted a notification with
the Netherlands Authority for the Financial Markets. The units of Star Asia will not, directly or
indirectly, be offered, sold, transferred or delivered in the Netherlands, except to or byindividuals or entities that are qualified investors (gekwalificeerde beleggers) within the meaningof Article 1:1 of the Wft, and as a consequence neither the AIFM nor Star Asia is subject to thelicense requirement pursuant to the Wft. Consequently, neither the AIFM nor Star Asia is subject
to supervision of the Dutch Central Bank (De Nederlandsche Bank) or the Netherlands Authority
for Financial Markets (Autoriteit Financiële Markten, the “AFM”) and this Article 23 AIFMD
Prospectus is not subject to approval by the AFM. No approved prospectus is required to be
published in the Netherlands pursuant to Article 3 of the European Directive 2003/71/EC (theEU Prospectus Directive) as amended and implemented in Netherlands law. The AIFM is solely
subject to limited ongoing regulatory requirements as referred to in Article 42 of the AIFMD.
United Kingdom
Units of Star Asia are being marketed in the United Kingdom pursuant to regulation 59 of theUnited Kingdom Alternative Investment Fund Managers Regulations 2013. In accordance withthis provision, the AIFM has submitted a notification to the FCA in the United Kingdom.
For the purposes of the United Kingdom Financial Services and Markets Act 2000 (as amended,“FSMA”) Star Asia is an unregulated collective investment scheme which has not beenauthorized by the FCA.
Accordingly, any communication of an invitation or inducement to invest in Star Asia may bemade to persons in the United Kingdom only if the communication falls within one or more of
the categories of exempt financial promotions under the Financial Services and Markets Act(Financial Promotion) Order 2005 (as amended, the “Order”), including financial promotions
communicated to:(1)(2)

persons who are investment professionals, as defined in article 19 of the Order;
persons who are certified high net worth individuals, as defined in article 48 of theOrder;

(3)(4)

persons who are high net worth companies, unincorporated associations, or otherentities listed in article 49 of the Order; or
persons who are certified sophisticated investors, as defined in article 50 of theOrder,

or if the communication is made to persons to whom such an invitation or inducement mayotherwise lawfully be communicated. The distribution of this document to any person in the
United Kingdom in circumstances not falling within one of the above categories is not permitted
and may contravene FSMA. No person falling outside those categories should treat thisdocument as constituting a promotion to him, or act on it for any purposes whatsoever.
Prohibition of Sales to EEA and UK Retail Investors
Units of Star Asia are not intended to be offered, sold or otherwise made available to and should
not be offered, sold or otherwise made available to any retail investor in the EEA or the UK. For
these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as definedin point (11) of Article 4(1) of Directive 2014/65/EU (as amended or superseded, "MiFID II"); or(ii) a customer within the meaning of Directive (EU) 2016/97 (as amended or superseded, "IDD"),
where that customer would not qualify as a professional client as defined in point (10) of Article
4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation.
Consequently no key information document required by Regulation (EU) No 1286/2014 (asamended or superseded, the "PRIIPs Regulation") for offering or selling the units of Star Asia orotherwise making them available to retail investors in the EEA or the UK has been prepared andtherefore offering or selling the units of Star Asia or otherwise making them available to any retailinvestor in the EEA or the UK may be unlawful under the PRIIPs Regulation.

2

Article 23 (1)(a)Objectives of the AIF

Investment strategy

The objective of Star Asia Investment Corporation (“Star Asia”) is to maximize unitholder
value with a focus on revenue stability and growth by pursuing a diversified portfolio
strategy, targeting office, retail, residential, logistics, hotel, purpose-built student
accommodation properties and their limited proprietary right of land. In operating its
business, Star Asia’s overarching philosophy is to put the interests of its unitholders first.
Star Asia pursues a diversified portfolio strategy, targeting office, retail, residential,
logistics, hotel, purpose-built student accommodation properties and their limited
proprietary right of land with a particular focus on the “Tokyo area”. With respect toinvestment ratios by each investment target area, the “Tokyo Area” shall be designated as
the main investment area and the investment ratio for the area shall in principle be 70% ±10% of the entire portfolio on an acquisition price basis. Furthermore, with respect toinvestment target areas other than the Tokyo Area, “Main Metropolitan Areas” composedof the “Osaka Area”, “Fukuoka Area” and “Nagoya Area” shall be established, and theinvestment ratio of such areas shall in principle be 20%±10% of the entire portfolio on an
acquisition price basis. Areas other than the “Tokyo Area” and the “Main Metropolitan
Areas” shall be designated as “Other Areas”, and the investment ratio in such Other 3
Areas shall, in principle, be maintained at 10%±10% of the entire portfolio on an
acquisition price basis. However, the investment ratio for each respective investment
target area may temporarily fall outside of the designated ratios, (i) in cases where an
investment is to be made strategically into a certain area based on the results of
independent market analysis, (ii) when property is to be acquired under a bulk sale(transactions with the condition of acquiring multiple properties at the same time), and(iii) due to a merger etc. In such cases, the situation should be resolved in more or less 5
years. In addition, Star Asia intends to maintain a diverse portfolio of assets and suppress
the fluctuation of revenue due to economic cycle, with each asset class comprising no
more than 50% of its portfolio on an acquisition price basis as a general rule, except thatsuch percentage for a certain asset class may temporarily exceed 50% as a result ofstrategic investments in such asset class based on the results of our own market analysis.
By maintaining a diverse portfolio, Star Asia can pursue both income stability and income
growth. In terms of asset size, we target primarily middle-size assets (with an acquisition
price of less than ¥10 billion) from the perspective of enhancing diversification and due tothe relatively robust supply of these assets. We also target large-size assets (with anacquisition price of ¥10 billion or more) in the Tokyo Area and the Main Metropolitan
Areas due to prospective high demand for all asset types and low vacancy risk andreduction risk.
In identifying investment opportunities, Star Asia will leverage the track record,
experience, know-how and market analysis of its sponsor, Star Asia Management LLC(the “Sponsor”), through support it receives under its sponsor support agreement with theSponsor. Under the sponsor support agreement, Star Asia will also have access to a robust
pipeline of properties operated by the Sponsor and its group companies and intends toleverage the support from the Sponsor to continue to expand its portfolio.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

3

AIF structure

Types of assets the AIF
may invest inTechniques the AIF
may employ and all
associated risks

In addition to investing in real estate assets (including trust beneficiary interests in realestate assets), we may also consider investing in mezzanine loans of special purpose
companies that acquire real estate. Under our articles of incorporation, we may invest in
mezzanine loans in an aggregate amount that shall not exceed 5% of our total assets.
Star Asia is not a master AIF for the purposes of Article 23(1)(a) AIFMD and is not a fund offunds. Star Asia is not an underlying fund of a master AIF for the purposes of Article
23(1)(a) AIFMD.
Real property, real property equivalents such as land leasehold rights and surface rights,
trust beneficiary interests in real property and real property based securities.
Star Asia aims to grow unitholder value by acquiring a diverse portfolio of office, retail,residential, logistics, hotel, purpose-built student accommodation properties and theirlimited proprietary right of land with a particular focus on the Tokyo area. The principal
risks with respect to investment in Star Asia are as follows:
•
•
•
•
•
•
•
•
•
•
•
•
•

adverse conditions in the Japanese economy;Star Asia’s ability to acquire properties to execute its growth and investment
strategy;illiquidity in the real estate market;
Star Asia’s reliance on the Sponsor and its group companies;
the past experience of the Sponsor in the Japanese real estate market being no
indicator or guarantee of Star Asia’s future results;
potential conflicts of interest between Star Asia and certain Star Asia groupcompanies, including the Asset Manager;
significant competition in seeking tenants and difficulty in finding replacement
tenants;increases in prevailing market interest rates;
the occurrence of natural or man-made disasters;
concentration of Star Asia’s properties in Tokyo and the surrounding areas;
any inability to obtain financing for future acquisitions;potential failure to satisfy a complex series of requirements pursuant to Japanese
tax regulations; andrisks inherent in the property types we target, including office, retail, residential,
logistics, hotel, purpose-built student accommodation properties and their limited
proprietary right of land.

In addition, Star Asia is subject to potential risks related to:
•
•
•
•
•

liquidity and other limitations on Star Asia’s activities under debt financing
arrangements;
increases in loan-to-value (“LTV”) ratio that may increase Star Asia’s exposure tochanges in interest rates;
investments in mezzanine loans;
impairment losses relating to Star Asia’s properties;
decreases in tenant leasehold deposits and/or security deposits that may increase
Star Asia’s funding costs;

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

4

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

Star Asia’s lack of control over operating costs which may adversely affect Star
Asia’s business;
loss of rental revenues in the event of lease terminations, decreased leaserenewals, or the default of a tenant as a result of financial difficulty or insolvency,
or careless or imprudent management of properties by tenants;
reliance on key tenants;
use of master leases, including credit exposure in the event of a master lessee’s
insolvency;
the cost of complying with regulations applicable to Star Asia’s properties;
defects in the title, design or construction of our properties or other property
defects;
reliance on expert appraisals and engineering, environmental and seismic reports,
which are subject to significant uncertainties;
reliance on industry and market data that are subject to significant uncertainties;
the possibility that Star Asia’s buildings may violate earthquake resistance or otherbuilding codes, and may collapse in even minor earthquakes or may be required to
be strengthened or demolished by Star Asia at significant expense;
the possibility that the environmental assessments of Star Asia’s properties madeprior to ownership may not uncover all environmental liabilities, while Japaneselaws subject property owners to strict environmental liabilities;
the possibility that entering into forward commitment contracts or contracts topurchase properties under development may expose Star Asia to contractual
penalties and market risks;Star Asia’s success depending on the performance of service providers to whichStar Asia is required to assign various key functions;Star Asia’s performance depending on the efforts of key personnel of the AssetManager;
J-REITs and their asset managers being subject to tight supervision by theregulatory authorities;
the possibility that, if the Japanese tax authorities disagree with Star Asia’sinterpretations of the Japanese tax laws and regulations for prior periods, Star
Asia may be forced to pay additional taxes for those periods;
the possibility that Star Asia may not be able to benefit from reductions in certain
real estate taxes enjoyed by qualified J-REITs;
changes in Japanese tax laws that may significantly increase Star Asia’s tax burden;
Star Asia’s treatment as a “passive foreign investment company” for U.S. federal
income tax purposes;
the possibility that unitholders may potentially be subject to U.S. Foreign AccountTax Compliance Act withholding tax after 2016;
the possibility that Star Asia may lose its rights in a property if the purchase of theproperty is recharacterized as a secured financing;
the possibility that Star Asia’s ownership rights in some of its properties may bedeclared invalid or limited;
the possibility that Star Asia’s leasehold or subleasehold rights may be terminatedor may not be asserted against a third party in some cases;

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

5•

Any applicable
investment restrictions

properties for which third parties hold leasehold interests in the land but own thebuildings;• holding some properties in the form of stratified ownership interests;• holding properties in the form of a property or trust co-ownership interest;• holding interests in some properties through preferred shares of special purpose
companies (tokutei mokuteki kaisha);• properties being subject to preferential negotiation rights of others;• holding interests in some properties through Japanese anonymous association(tokumei kumiai) agreements and limitations on Star Asia’s rights relating to suchproperties; and• Star Asia’s owning all of its properties through trust beneficiary interests.
Star Asia is subject to investment restrictions under Japanese laws and regulations,
including the Act on Investment Trusts and Investment Corporations (the “ITA”) and the
Financial Instruments and Exchange Act (the “FIEA”). These restrictions require that Star
Asia must invest primarily in specified assets as defined in the ITA. Specified assets include,
but are not limited to, securities, real estate, leaseholds of real estate, and surface rights(chijō-ken) (i.e. the right to use land for the purpose of having a structure on it), as well as
trust beneficiary interests in securities, real estate, leaseholds of real estate and surface
rights.
Furthermore, under the listing rules of the Tokyo Stock Exchange, any listed J-REIT such as
Star Asia must invest substantially all of its assets in real estate, real estate-related assets
and liquid assets as provided by the listing requirements. Real estate in this context
includes, but is not limited to, real estate, leaseholds of real estate, surface rights, andtrust beneficiary interests for these assets, and real estate-related assets in this context
include, but are not limited to, anonymous association (tokumei kumiai) interests forinvestment in real estate. A J-REIT that lists its units on the Tokyo Stock Exchange mustalso comply with the Investment Trusts Association, Japan rules, which require the J-REIT
to invest more than 50% of its assets in real estate and asset backed securities investing
primarily in real estate, which include, but are not limited to, real estate, leaseholds of realestate, surface rights or trust beneficiary interests for real estate, surface rights orleaseholds of land.
Pursuant to the ITA, investment corporations may not independently develop land for
housing or to construct buildings, but may outsource such activities in certain
circumstances.

Circumstances inwhich the AIF may use
leverage
The types and sourcesof leverage permitted
and associated risks

The basic investment policy of Star Asia is set out in Star Asia’s articles of incorporation.
Moreover, the Asset Manager has established investment guidelines to provide moredetailed policies based on this basic policy.
Star Asia may borrow funds or issue investment corporation bonds for such purposes asproperty acquisitions, property repair, repayment of tenant leasehold and security
deposits and guarantees, payment of distributions to unitholders, payment of Star Asia’s
expenses and repayment of Star Asia’s indebtedness.
Star Asia currently has outstanding short-, long-term loans and investment corporation
bonds. All of Star Asia’s currently outstanding loans and investment corporation bonds are
unsecured and unguaranteed and all of Star Asia’s currently outstanding loans are subject

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

6

to either floating rates or floating rates that are effectively fixed through interest rate
swaps. Star Asia borrows only from institutional investors as defined in the Special
Taxation Measures Act (assuming that Star Asia’s tenant leasehold and security deposits
are not considered loans for this purpose).
Certain of Star Asia’s loan agreements and investment corporation bonds details are
subject to restrictive covenants. Such covenants may require Star Asia to maintain certain
debt service coverage or LTV ratios, restrict Star Asia’s operations or limit its ability tomake cash distributions to unitholders, to dispose of properties or to acquire additional
properties. A violation by Star Asia of such restrictive covenants may entitle lenders or
bondholders to require Star Asia to collateralize its properties or to demand that theentire outstanding balance be paid. Moreover, Star Asia’s cash flow may be insufficient tomeet its required principal and interest payments, which may trigger events of default
that also entitle lenders or bondholders to require Star Asia to collateralize its properties
or demand that the entire balance be paid. Further, if Star Asia takes draws down debt
with unhedged floating interest rates, Star Asia’s exposure to changes in interest rates
may adversely affect its results of operations. Even if Star Asia maintains a conservative
LTV ratio, Star Asia’s interest expense or exposure to changes in interest rates could
increase due to macroeconomic factors or market conditions beyond Star Asia’s control.
Any restrictions onleverage

Any restrictions on
collateral and asset
reuse arrangements
Maximum level ofleverage which the
AIFM is entitled to
employ on behalf of
the AIF
Article 23(1) (b)Procedure by which
the AIF may change its
investment strategy /investment policy

Under Star Asia’s articles of incorporation, Star Asia has a formal internal limit of ¥1 trillion
on the aggregate principal amount of borrowings and ¥1 trillion on investment
corporation bonds outstanding, and a total limit ¥1 trillion on the combined outstanding
principal amount of borrowings and investment corporation bonds.
No applicable arrangements.

Star Asia has as a general rule set an upper limit of 60% for its LTV ratio in order to operatewith a stable financial condition. Star Asia may, however, temporarily exceed such levels
as a result of property acquisitions or other events.

Changes to Star Asia’s basic investment policy require an amendment of the articles ofincorporation. Such amendment requires a quorum of a majority of the total issued units
and at least a two-thirds vote of the voting rights represented at a general meeting ofunitholders. Unitholders should note, however, that under the ITA and Star Asia’s articles
of incorporation, unitholders who do not attend or exercise their voting rights at a general
meeting of unitholders are deemed to be in agreement with proposals submitted at themeeting, except in cases where contrary proposals are also being submitted.
Additionally, the investment guidelines of the Asset Manager, which provide the details of
the basic policies set forth in Star Asia’s articles of incorporation, may be amended orrevised by the Asset Manager without a vote of Star Asia’s unitholders or Star Asia’s
approval, to the extent permitted under Star Asia’s articles of incorporation.

Article 23(1) (c)This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

7

Description of themain legal implicationsof the contractual
relationship enteredinto for the purpose ofinvestment, including
jurisdiction, applicablelaw, and the existenceor not of any legal
instruments providing
for the recognition andenforcement of
judgments in the
territory where the AIF
is establishedStar Asia has entered into the following asset management and sponsor support
agreement, each of which is governed by Japanese law:••

Asset management agreement dated December 1, 2015 between Star Asia andStar Asia Investment Management Co., Ltd.
Sponsor support agreement dated January 14, 2016 between Star Asia, Star Asia
Investment Management Co., Ltd. and Star Asia Management LLC.

Star Asia has entered into the following sub-sponsor support agreement, each of which isgoverned by Japanese law:•

Comprehensive Support Agreement regarding Properties Acquisition andProperties Management dated July 29, 2020 between Star Asia, Star Asia
Investment Management Co., Ltd. , NIPPON KANZAI Co., Ltd. and Tokyo CapitalManagement Co., Ltd.

Additionally, Star Asia has entered into purchase and sale agreements with sellers andbuyers in connection with the acquisition or disposition of properties, as well as trust
agreements with major Japanese trust banks pursuant to which Star Asia holds theproperties in its portfolio in the form of trust beneficiary interests.
Article 23(1) (d)The identity of the
AIFM, AIF’s depository,
auditor and any otherservice providers and a
description of theirduties and theinvestors’ rights
thereto•••Asset Manager (AIFM): Star Asia Investment Management Co., Ltd.
Auditor: Ernst & Young ShinNihon LLC
Custodian, general administrator, transfer agent: Sumitomo Mitsui Trust Bank Ltd.

The Asset Manager’s duties include providing services related to asset management
operations, financing operations, reporting to Star Asia, periodic reporting, investor
relations, and regulatory filings, and other services as agreed between Star Asia and the
AIFM. The FIEA provides that the Asset Manager owes Star Asia a fiduciary duty and must
conduct its activities as asset manager in good faith. The FIEA also prohibits the AssetManager from engaging in certain specified conduct, including entering into transactions
outside the ordinary course of business or with related parties of the Asset Manager thatare contrary to or violate Star Asia’s interests. Pursuant to the ITA, Star Asia’s unitholders
have the right to approve the execution or termination of the asset managementagreement at a general meeting of unitholders, except in specific cases set forth under the
ITA.
The auditor’s responsibilities include preparing an audit report on Star Asia’s financial
statements for the fiscal periods ending on the last day of January and on the last day of
July of each year.
The custodian, general administrator and transfer agent owes contractual obligations
under its agreements with Star Asia. As custodian, it provides custodial services for Star
Asia’s assets. As general administrator, it provides administrative services including
services related to financial documents, preparation of books and records, tax payments
and meetings of board of directors and meetings of unitholders. As transfer agent, it
provides services including the administration of the unitholder’s register, issuances ofThis document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

8

investment units, distributions, notifications, announcements and reports, and othertransfer agency services.
Unitholders do not have direct rights against the Asset Manager, auditor, custodian,general administrator or transfer agent.
Article 23(1) (e)Description of how the
AIFM complies withthe requirements tocover professional
liability risks (ownfunds / professional
indemnity insurance)

Not applicable.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

9Article 23(1) (f)Description of any
delegatedmanagement function
such as portfolio
management or risk
management and of
any safekeeping
function delegated by
the depositary, theidentification of thedelegate and any
conflicts of interest
that may arise fromsuch delegations
Article 23(1) (g)Description of the AIF’s
valuation procedureand pricing
methodology,
including the methods
used in valuing hardto-value assets

Article 23(1) (h)Description of the AIF’s
liquidity risk
management,
including redemption
rights in normal andexceptional
circumstances andexisting redemption
arrangements withinvestors

Not applicable.
There is no delegation of such functions beyond the Asset Manager, which is responsible
for portfolio and risk management, and the asset custodian, which is responsible forsafekeeping activities.

Star Asia values its assets based on generally accepted accounting principles applicable to
J-REITs and pursuant to the ITA and the Ordinance on Accountings of Investment
Corporations. As a J-REIT, Star Asia may only use the valuation methods prescribed in therules of the Investment Trusts Association, Japan. The asset evaluation methods andstandards used in specific cases depend on the type of invested asset.
Hard to value assets include assets such as equity interests in real estate anonymous
associations (tokumei kumiai) and beneficiary interests in trusts of money principallyinvested in real estate anonymous associations, as well as tenant leasehold and security
deposits. Future cash flows of hard to value assets are difficult to estimate. Star Asia
values hard to value assets differently depending on the asset, but pursuant to the ITA,
the Ordinance on Accountings of Investment Corporations and the evaluation rules of theInvestment Trusts Association of Japan or in accordance with generally accepted
accounting principles in Japan applicable to J-REITs.
Net cash generated from operating activities constitutes Star Asia’s primary source ofliquidity to fund distributions, interest payments on outstanding debt, fees to the AssetManager and other service providers, property-related taxes, repairs and maintenance,and capital expenditures for Star Asia’s properties in the ordinary course of business.
However, Star Asia’s ability to use its cash flows from operations to finance property
acquisitions is severely limited, because Star Asia is required to distribute more than 90%
of all of its distributable income, calculated in accordance with the Special Taxation
Measures Act, for each fiscal period to its unitholders. Therefore, Star Asia depends
primarily on outside financing in order to finance property acquisitions, including
borrowings from financial institutions, equity financing, and the issuance of primarily longterm investment corporation bonds. Star Asia also considers the effects of assumption oftenant leasehold and security deposits in evaluating its liquidity needs.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

10

Star Asia controls liquidity-related risk by setting an upper limit of 60% for its LTV ratio andevaluating its long-term and fixed-rate debt ratios, maturity diversification, financing
methods, the diversification of its pool of lenders and the availability of commitment lines.
Because Star Asia is a closed-end investment corporation, unitholders are not entitled torequest the redemption of their investment.
Article 23(1) (i)Description of all fees,
charges and expenses
and a maximum
amount which is
directly / indirectly
borne by the investors

Directors’ compensation: Star Asia’s articles of incorporation provide that Star Asia may
pay its executive officer up to ¥800,000 per month and each of its supervisory officers up
to ¥400,000 per month.
Asset management, acquisition and disposition Fees: Star Asia pays the Asset Manager
asset management, acquisition and transfer fees as follows:•

Asset Management fees. The Asset Manager receives an asset management fee,
which comprises a type I period fee and a type II period fee as described below.
•

Type I period fee: Asset-based fee. Star Asia pays to the Asset Manager a type I
period fee for each fiscal period. This type I period fee is payable by Star Asia
within three months from the end of the relevant fiscal period. The type I
period fee shall be the amount (rounded down to the nearest yen) obtainedby multiplying the total appraised value (as calculated below) of theinvestment assets by the rate (which shall not exceed 0.2%) to be separately
agreed upon with the Asset Manager. The total appraised value of theinvestment assets shall be the sum of (A) and (B) below.
• (A) Total amount of the value of real estate assets obtained by multiplying
the lower of the appraisal value as of the end of the relevant period (or, if
the appraisal report as of the end of the relevant fiscal period is not
obtained, the transfer price) or the acquisition price (or, if Star Asia has
assumed the relevant assets as a result of an absorption-type merger inwhich Star Asia is the surviving corporation, the value at which such assets
were assumed) of the relevant assets, by the number of actual days thatStar Asia held the relevant assets in the relevant fiscal period, and dividing
it by the number of in the year (365 days or 366 days, as the case may be),and• (B) Total amount of the value of the asset backed securities with realestate assets as primary investment targets and of the real estate-relatedloans and other monetary claims, obtained by multiplying the value of therelevant assets (calculated in accordance with our articles ofincorporation) by the number of actual days that Star Asia held therelevant assets in the relevant fiscal period, and dividing it by the numberof in the year (365 days or 366 days, as the case may be).

•Type II period fee: NOI-based fee. Star Asia pays to the Asset Manager a type II
period fee for each fiscal period. This type II period fee is payable within threemonths from the end of the relevant fiscal period, and is equal to the amountobtained by multiplying net operating income by the rate separately agreed

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

11

with the Asset Manager (which shall not exceed 7.5%). For purposes ofcalculation of the type II period fee: “net operating income” is equal to theamount obtained by deducting real estate rental expenses (excluding
depreciation and loss on retirement of non-current assets) from real estate
rental revenue in the relevant fiscal period.
•

Acquisition fees. For each new property, asset backed security, real estate-related
loan and other monetary claim Star Asia acquires, the Asset Manager receives anacquisition fee, which is equal to up to 1.0%, or 0.5% in case of a transaction withinterested parties, of the acquisition price (referring to the price stipulated in thesales agreement, etc. and excluding the acquisition fee and other expenses
required for the acquisition and consumption taxes), payable by the end of themonth following the month to which the acquisition date of the property (thedate when transfer of ownership and other rights become effective) belong.

•

Transfer fees. For each property, asset backed security, real estate-related loan
and other monetary claim Star Asia sells, the Asset Manager receives a transfer
fee, which is equal to up to 1.0%, or 0.5% in case of a transaction with interested
parties, of the transfer price (referring to the price stipulated in the sales
agreement, etc. and excluding the transfer fee and other expenses required forthe transfer and consumption taxes) payable by the end of the month following
the month to which the transfer date of the property (the date when transfer ofownership and other rights become effective) belong.

•

Merger fees. In the event that Star Asia is a party to an incorporation-type merger
or an absorption-type merger (regardless of whether Star Asia is the surviving
party or the absorbed party ) ( the “Merger”) and the Asset Manager investigatesand evaluates the assets, etc. held by the other party and otherwise performs
other services relating to the Merger on behalf of Star Asia, and the Merger takes
effect, Star Asia will pay to the Asset Manager the amount equal to up to 1.0%, or
0.5% in case of a transaction with interested parties, of the valuation amount of
the real estate-related assets held by the other party to the Merger that is being
assumed or to be held by the newly established entity under the incorporationtype merger or the surviving party under the absorption-type merger on the daythat the Merger takes effect (amounts of less than one yen shall be disregarded)as the merger fee. Star Asia will pay the merger fee by the end of the monthfollowing the month in which the Merger takes effect.

Asset custodian fee:Star Asia pays the asset custodian a fee per month in an amount agreed upon by Star Asiaand the asset custodian based on the portfolio of Star Asia, up to the monthly amountcalculated by the following formulas (or, if the calculated monthly amount is less than
¥500,000, ¥500,000).
(The total assets amount recorded on Star Asia’s total trial balance at the last day of thepreceding month of the relevant month) multiplied by 0.03% divided by 12This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

12

If the days of asset custody are less than one month, the fee per month shall be calculated
on a pro-rata basis.
The asset custodian shall calculate the total asset custodian fee and consumption taxes
per fiscal period and shall provide an invoice to Star Asia after the following month of themonth to which the last day of the fiscal period belong. Star Asia shall pay such amount byremittance into the account designated by the asset custodian within a month from thedate of the invoice.
General administrator fee:Star Asia pays the general administrator fees per month in an amount agreed upon by Star
Asia and the general administrator based on the portfolio of Star Asia, up to the monthly
amount calculated by the following formulas (or, if the calculated monthly amount is lessthan ¥500,000, ¥500,000).
(The total assets amount recorded on Star Asia’s total trial balance at the last day of thepreceding month of the relevant month) multiplied by 0.09% divided by 12
If the days of asset custody are less than one month, the fee per month shall be calculated
on a pro-rata basis.
The general administrator shall calculate the total general administrator fees andconsumption taxes per fiscal period and shall provide an invoice to Star Asia after thefollowing month of the month to which the last day of the fiscal period belong. Star Asia
shall pay such amount by remittance into the account designated by the generaladministrator within a month from the date of the invoice.
Transfer agent fee:Star Asia pays the transfer agent fees pursuant to the transfer agency agreement.
•Monthly standard fee:Star Asia pays the transfer agent monthly standard fees calculated in the manner
below. There is a minimum monthly fee of ¥210,000. The transfer agent shallprovide an invoice to Star Asia by the 15th day of the following month of therelevant month, and Star Asia shall pay such amount by the end of the month ofsuch invoice.
Number of investors
The first 5,000 investors...............................................................................
More than 5,000 and not more than 10,000...............................................................................
More than 10,000 and not more than 30,000...............................................................................

Fees per investor
¥86
¥73
¥63

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

13

Over 30,000 and not more than 50,000...............................................................................
Over 50,000 and not more than 100,000...............................................................................
Over 100,000 investors...............................................................................
Removed investors...............................................................................

•

¥54
¥47
¥40
¥50

Other fees:Star Asia pays the transfer agent fees for various other services, including fees forservices in connection with the payment of distributions, notices, unitholder
meetings, postal items, unitholder information and expense reimbursements.
Auditor Fee:Star Asia may pay the accounting auditor no more than ¥20 million for each fiscal period in
an amount determined by the Board of Directors. Such amount shall be paid byremittance into the account designated by the accounting auditor within a month fromthe date when Star Asia receives the full audit reports required under the ITA and otherlaws and regulations.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

14

Article 23(1) (j)Description of the
AIFM’s procedure toensure fair treatment
of investors and detailsof any preferential
treatment received byinvestors, including
detailing the type ofinvestors and theirlegal or economic links
with the AIF or AIFM
Article 23(1) (k)The latest annual
report referred to in
Article 22(1)Under Article 77 paragraph 4 of the ITA, which applies the requirements of Article 109
paragraph 1 of the Companies Act of Japan to investment corporations, investment
corporations are required to treat unitholders equally depending on the number and classof units held. In addition, upon liquidation, the allotment of residual assets to unitholders
is required to be made equally depending on the number of units held under Article 77
paragraph 2 item 2 and Article 158 of the ITA.

Not applicable

Article 23(1) (l)The procedure andStar Asia is authorized under its articles of incorporation to issue up to 10,000,000 units.
conditions for the issue Its units have been listed on the Tokyo Stock Exchange since April 20, 2016.
and sale of the units
Secondary market sales and transfers of units will be conducted in accordance with therules of the Tokyo Stock Exchange. Unit prices on the Tokyo Stock Exchange aredetermined on a real-time basis by the equilibrium between bids and offers. The Tokyo
Stock Exchange sets daily price limits, which limit the maximum range of fluctuation within
a single trading day. Daily price limits are set according to the previous day’s closing priceor special quote.
Article 23(1) (m)Latest net asset value
The latest market price of Star Asia’s units is publicly available at the Tokyo Stockof the AIF or latest
Exchange or from financial information services providers (including Reuters, which canmarket price of thebe viewed at https://www.reuters.com/markets/companies/3468.T)
unit or share of the AIF

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

15

Article 23(1) (n)Details of the historicalperformance of theAIF, where available

The units of Star Asia were listed on the Tokyo Stock Exchange on April 20, 2016.
The performance of the units for the fiscal periods since the listing of Star Asia is asfollows:
Fiscal period

Total Assets(JPY thousands)

Total Net Assets(JPY thousands)

Net Assets per unit
(JPY)

68,636,834

33,848,802

98,19767,363,539

34,674,123

100,592

83,609,410

41,892,541

101,116

82,154,646

41,870,546

101,063

93,553,534

47,287,168

100,477

111,079,100

54,839,877

101,400

110,240,555

54,739,757

101,215

109,649,249

54,299,423

50,200113,035,501

54,614,584

50,492

179,789,748

89,600,518

53,512

179,170,815

89,179,478

53,260

193,316,956

95,753,089

53,511

193,488,543

95,803,384

53,539

1st Fiscal Period(December 1, 2015 toJuly 31, 2016)
2nd Fiscal Period(August 1, 2016 toJanuary 31, 2017)
3rd Fiscal Period(February 1, 2017 toJuly 31, 2017)
4th Fiscal Period(August 1, 2017 toJanuary 31, 2018)
5th Fiscal Period(February 1, 2018 to
July 31, 2018)
6th Fiscal Period(August 1, 2018 toJanuary 31, 2019)
7th Fiscal Period(February 1, 2019 toJuly 31, 2019)
8th Fiscal Period(August 1, 2019 toJanuary 31, 2020)
9th Fiscal Period(February 1, 2020 toJuly 31, 2020)
10th Fiscal Period(August 1, 2020 toJanuary 31, 2021)
11th Fiscal Period(February 1, 2021 toJuly 31, 2021)
12th Fiscal Period(August 1, 2021 toJanuary 31, 2022)
13th Fiscal Period(February 1, 2022 toJuly 31, 2022)

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

16

14th Fiscal Period(August 1, 2022 to
208,766,606
103,455,098
53,835January 31, 2023)
15th Fiscal Period(February 1, 2023 to
209,259,165
103,224,463
53,715
July 31, 2023)
16th Fiscal Period(August 1, 2023 to
259,155,332
127,127,624
53,595January 31, 2024)
Star Asia has conducted an investment unit split to split one investment unit into two
investment units with August 1, 2020, as the effective date. Net Assets per unit arecalculated assuming that the split was conducted at the beginning of 8th fiscal period.

Article 23(1) (o)Identity of the prime
broker, any material
arrangements of the
AIF with its prime
brokers, how conflictsof interest aremanaged with theprime broker and theprovision in thecontract with thedepositary on thepossibility of transfer
and reuse of AIF
assets, andNo applicable prime broker.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

17

information about any
transfer of liability tothe prime broker that
may exist
Article 23(1) (p)Description of how andwhen periodic
disclosures will bemade in relation toleverage, liquidity andrisk profile of theassets, pursuant to
Articles 23(4) and23(5)Article 23(2)The AIFM shall informthe investors before
they invest in the AIF
of any arrangement
made by thedepository tocontractually discharge
itself of liability inaccordance with
Article 21(13)The AIFM shall also
inform investors of any
changes with respect
to depositary liability
without delay

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodicallythrough Star Asia’s website and semi-annual report.

Not applicable.

Not applicable.

Article 23(4)(a)Percentage of the AIF’s assets which
are subject to special arrangements
arising from their illiquid nature. The
percentage shall be calculated as the
net value of those assets subject tospecial arrangements divided by the
net asset value of the AIF concerned
Overview of any special
arrangements, including whether
they relate to side pockets, gates orother arrangements

There are no assets that are subject to special arrangements arising fromtheir illiquid nature.

There are no such special arrangements.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

18

Valuation methodology applied toassets which are subject to sucharrangements
How management and performancefees apply to such assets
Article 23(4)(b)Any new arrangements for managing
the liquidity of the AIF
For each AIF that the AIFM manages
that is not an unleveraged closed-end
AIF, notify to investors whenever they
make changes to its liquidity
management systems (which enable
an AIFM to monitor the liquidity riskof the AIF and to ensure the liquidity
profile of the investments of the AIF
complies with its underlying
obligations) that are material inaccordance with Article 106(1) ofRegulation (EU) No 231/2013 (ie.
there is a substantial likelihood that areasonable investor, becoming awareof such information, would reconsider
its investment in the AIF, including
because such information could
impact an investor’s ability to
exercise its rights in relation to its
investment, or otherwise prejudice
the interests of one or more investors
in the AIF).
Immediately notify investors where
they activate gates, side pockets orsimilar special arrangements or
where they decide to suspend
redemptions
Overview of changes to liquidity
arrangements, even if not special
arrangements
Terms of redemption andcircumstances where management
discretion applies, where relevant
Also any voting or other restrictions
exercisable, the length of any lock-up
or any provision concerning ‘first inline’ or ‘pro-rating’ on gates andsuspensions shall be included

There are no such special arrangements.

There are no such special arrangements.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.
Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.
Star Asia is a closed-end investment corporation and unitholders are notentitled to request the redemption of their investment.
There are no voting or other restrictions on the rights attaching to units.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

19

Article 23(4)(c)
The current risk profile of the AIF andthe risk management systems
employed by the AIFM to manage
those risks

The Asset Manager stipulates basic provisions of risk management in its risk
management rules. The appropriateness and effectiveness of the AssetManager’s risk management systems are regularly reviewed and evaluatedby the Asset Manager.
The use of long-term loans and investment corporation bonds to financeasset acquisitions and other purposes gives rise to liquidity risks. Star Asia
controls such risks by setting an upper limit of 60% for its LTV ratio andevaluating its long-term and fixed-rate debt ratios, maturity diversification,
financing methods, the diversification of its pool of lenders and theavailability of commitment lines.
Star Asia may enter into loans with unhedged floating interest rates thatwould be exposed to the risk of interest rate fluctuations. Star Asia, in orderto reduce the impact caused by rising interest rates, closely monitors the
movement of interest rates.
Derivative transactions (interest rate swap transactions) may be used tohedge against the risks of increases in floating interest rates.
Star Asia’s use of tenant leasehold and security deposits gives rise toliquidity risk since repayment of these deposits is triggered when tenants
move out of Star Asia’s properties. This risk is controlled through suchmeasures as preparing cash management plans and retaining cash anddeposits sufficient to return deposits to tenants.

Measures to assess the sensitivity of
the AIF’s portfolio to the most
relevant risks to which the AIF is or
could be exposed
If risk limits set by the AIFM havebeen or are likely to be exceeded andwhere these risk limits have been
exceeded a description of thecircumstances and the remedial
measures taken
Article 23(5)(a)Any changes to the maximum amountof leverage which the AIFM may
employ on behalf of the AIF,
calculated in accordance with thegross and commitment methods. This
shall include the original and revised
maximum level of leverage calculated
in accordance with Articles 7 and 8 of

No such measures have been implemented.

No such situation has occurred.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

20

Regulation (EU) No 231/2013,
whereby the level of leverage shall becalculated as the relevant exposure
divided by the net asset value of the
AIF.
Any right of the reuse of collateral or
any guarantee granted under theleveraging agreement, including thenature of the rights granted for thereuse of collateral and the nature of
the guarantees granted
Details of any change in service
providers relating to the above.
Article 23(5)(b)Information on the total amount ofleverage employed by the AIF
calculated in accordance with thegross and commitment methods

No such right or guarantee exists.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.
The aggregate amount of interest-bearing debt was JPY 123,140 million asof January 31, 2024.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

21

ANNEX A – SUPPLEMENTAL INFORMATION REGARDING ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) MATTERS
Star Asia Investment Corporation, (hereinafter, "we", "us", or "our") does not have as our objective either:(i) the promotion of environmental or social characteristics (or a combination of both) pursuant to Article 8(1) ofRegulation (EU) 2019/2088 (the "SFDR"); or (ii) a sustainable investment within the meaning of Article 9(1) of the
SFDR. Accordingly, we are not subject to Articles 8 or 9 of the SFDR and we are not required to make the precontractual and periodic disclosures required by products falling within the scope of Article 8 and Article 9 of the
SFDR. The below information in this Annex has been provided for reference purposes only.
Sustainability Risks
The Asset Manager has adopted the ESG policy as described below. This policy sets out the manner andextent to which the Asset Manager integrates “sustainability risks” (within the meaning of Regulation (EU)2019/2088) into its investment decision making policy. In the Asset Manager’s view, given the breadth of theinvestment objective of us, it is not possible to comprehensively forecast the likely impact of sustainability risks on
the returns of our portfolio. Sustainability risks may adversely affect the value of the properties
Environmental, Social and Governance (“ESG”) and Sustainability Policies
Star Asia Investment Management Co., Ltd., the Asset Manager, follows the same investment philosophy
and shares many of the same investment criteria as its parent group, the Star Asia group. While this involves
maximization of profits for our investors, we and the Asset Manager also recognize our position in society as adriver of change through investment. As climate change grows worse and segments of society and governmenttransition towards adoption of low-carbon emissions solutions more widely, we and our real estate investments facesustainability-related risks as well as business opportunities that will affect our long-term sustainability andprofitability. In recognition of these, we actively promote a number of environmental and social characteristics that
help us manage both direct, physical risks from climate change such as damage from natural disasters and rising sea
levels as well as incidental, transitional risks such as regulations and shifting preferences from our tenants towards
support of more eco-friendly competitors. Promotion of these characteristics does not constitute the primary goal of
our investments, however we view them as key components of our long-term success.
Environmental Characteristics• Climate Change Action. We actively promote characteristics in our investment properties that reduce theimpact of climate change in line with the physical and incidental risks that we face. This includes
improving energy efficiency on the inside and outside of our investment properties and promoting theuse of renewable energy produced on and off our properties to reduce emissions associated with ourreal estate operations. We additionally actively promote countermeasures against natural disasters suchas typhoons and floods that result from climate change.
• Promotion of Recycling, Reduced Water Usage, and Biodiversity. We promote proper waste management,water use reduction, and biodiversity through consideration of each in our investment, management,
and renovation processes in our real estate operations. This includes reducing the amount of water used
inside our investment properties, materials reuse and recycling, and maintenance and improvement of
biodiversity in environments outside of our investment properties.
Social Characteristics• Promotion of Health, Safety, and Comfort. Prevention and reduction of harms such as those from natural
disasters, manmade disasters, and sickness directly relate to our own resiliency and risk reduction.
Furthermore, promotion of health, safety, and comfort in our investments drives customer satisfaction
and productivity at our properties and in our own company, pushing us towards our investment goals.
This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

1

• Employee Acquisition and Development. We value diversity, personality, and individuality in our
employees, and strive to create an environment where they can learn, collaborate, and develop
specialized knowledge related to our investments.
The above social and environmental characteristics serve as the key characteristics that we promote inpursuance of our goal of maximizing profitability, however they do not constitute a sustainable objective that we asa financial product serve as our primary function.
Sustainability Indicators
The following indicators serve as references for our progress towards our promoted characteristics enlisted
above. They consist of a combination of quantitative data gathered internally through our standard operations as well
as a number of certifications by third parties. These indices and indicators do not necessarily track one for one to anyof the environmental or social characteristics which we promote, but are instead used to holistically monitor our
progress towards our sustainability goals in various dimensions. In addition, we pursue GRESB ratings (a indicator
to evaluate ESG initiatives) using their ESG Benchmark for Real Estate Assets and seek to achieve the maximum
score of 5 stars.
• Energy Consumption Reduction. We track the amount of annual energy consumption of our portfolio anduse it as an index for our progress towards the above environmental characteristics in line with oursustainability goals. Our medium term goal is to decrease the amount of annual energy consumption
per square meter of gross floor area of our portfolio by 10% compared to that of 2019 before 2030. In
the short term, we aim to continue reducing the same by 1% year-over-year.
• Greenhouse Gas Emissions Reduction. We track the amount of annual GHG emissions of our portfolio
and use it as an index for our progress towards the above environmental characteristics in line with oursustainability goals. Our medium term goal is to decrease the amount of annual GHG emissions per
square meter of gross floor area of our portfolio by 10% compared to that of 2019 before 2030. In the
short term, we aim to continue reducing the same by 1% year-over-year.
• Environmental Certifications. We pursue environmental certifications and use them as an index for our
progress towards the above environmental characteristics in line with our sustainability goals.
Currently, 6 buildings of ours hold a Green Building certification from the Development Bank of Japan(DBJ), 8 buildings of ours hold a Building – Housing Energy – Efficiency Labeling System (BELS) in
which third-party institutions evaluate the energy-saving performance of buildings based on theevaluation standards set by the Ministry of Land, Infrastructure, Transport and Tourism, 5 buildings ofours hold a Comprehensive Assessment System for Built Environment Efficiency (CASBEE). These
total area account for 43.9% of our investment property on a gross floor area basis as of January 31st,
2024.
• Water Use Curtailment. We track the amount of annual water use of our portfolio and use it as an index
for our progress towards the above environmental characteristics in line with our sustainability goals.
Our current goal is to keep the amount of annual water use per square meter of gross floor area of ourportfolio below that of 2019.
• Improvement of Waste Management. We track the amount of annual waste production across a subset of
our investment properties and use it as an index for our progress towards the above environmental
characteristics in line with our sustainability goals. Our current goal is to keep the amount of annual
waste production relative to total monitored floor area below that of 2019. For these purposes, we
additionally track the proportion of our gross floor area that is monitored.
• Green Leases. We track the percentage of our property that is rented using a "green lease" on a gross floorarea basis and use it as an index for our progress towards the above environmental characteristics inline with our sustainability goals. Green leases, which endorse the installation of high-efficiency andThis document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

2

low-emissions infrastructure in our investment properties through contractual obligations with our
tenants, are signed with 162 of our tenants accounting for 190,682.87 square meters (m2) of net(rentable) floor space as of January 31st, 2024.
• Employee Lifestyle Benefits and Satisfaction. We track the benefits and work arrangements that we afford
our employees as an indicator for our progress towards the above social characteristics. This includes
our work from home policies, promotion of staggered work hours, flexible work arrangements,
childbirth leave, parental leave, and elderly care leave. Each of these policies is aimed at increasing thesatisfaction of our employees, which we track through a satisfaction survey.
• Tenant Satisfaction. We conduct a tenant satisfaction survey of as many tenants as possible who occupy
our properties at certain point each year in order to increase tenant satisfaction. We use the percentageof tenants who are able to respond to the survey as an indicator of the percentage of all tenants in our
properties at that point in time. In the previous survey, the percentage was 99.95%.
Investment Strategy
The Asset Manager’s Sustainability Promotion Department is in charge of setting our medium-term andlong-term sustainability goals, including those enlisted in the above sections, which they believe are necessary forour continued success and profitability, and specific programs for achieving those goals are separately enacted by
the Sustainability Promotion Committee. Although neither of these groups is directly involved in the investment
selection process as a whole, their determinations reflect what ESG targets we and the Asset Manager believe wemust achieve in order to sustain our primary objective of maximum profitability given the direct and indirect risks
we face from climate change. As such, our investment strategy takes into account the specific indicators andobjectives that are enlisted above, guiding the investment selections that we and the Asset Manager make.
Although our sustainability goals influence our investment selections, we do not currently have any ESGrelated policies which are binding on our investment selections or business practices at large.
Environmental and social risk evaluations are specified in regular engineering reports, appraisal reports,
outside team evaluations and on-site confirmations by investment operations division, and periodic statutory
investigations. Appraisal reports are obtained once every six months, outside team on-site confirmations are
conducted once every two years, and engineering reports are performed every five years. All evaluations are madewith reference to how well we have performed our responsibilities and conformed to our investment directives set
forth in our "Basic Policy on Compliance", "EGS Policy", and "Sustainable Procurement Policy.” Any risk
evaluations specified in such reports will be cross-referenced with any legal requirements or requirements based on
the needs and expectations of our stakeholders, then forwarded to the operations division, sustainability promotion
division, and director/portfolio manager for review of the possible effects on our business and financials. Our teams
then formulate and enact countermeasures to help manage the risk. Risk countermeasures and their effectiveness are
first confirmed by the property manager and investment management division, then entrusted to a third party forverification. In the case that risk to our business or financials is deemed to be severe, the investment committee isnotified immediately so that prompt action can be taken.
Our ESG Policy not only enlists internal initiatives for improving our sustainability, but also addresses therole that our external stakeholders (including tenants, building managers, property managers, various suppliers, andthe community at large) play in achieving long term sustainability. To help our tenants and property managers
engage more directly with our ESG initiatives, we and the Asset Manager create and distribute sustainability guides
and establish tenant conferences to increase awareness and cooperation. These policies help us establish long-term
relationships and interactions with our investment property communities to continually assess ESG practices. We are
additionally aware that we have a direct effect on the supply chains that affect our Asset Manager’s and property
manager’s operations and, as such, the Asset Manager’s executive officers conduct regular evaluations of supply
chain and management decisions through the Asset Manager’s various departments. This ensures that we canregularly adapt whom we contract with based on their ESG compliance, initiatives, and progress.
This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

3

Where possible, we and the Asset Manager monitor improvements in communities within our managed
properties to assess whether our various programs for social benefit are having their intended effect of promoting
sustainable practices amongst our stakeholders. This includes, but is not limited to, monitoring of community health,engagement in ESG programs, participation in charitable activities, and ESG education.
More specific details on our investment strategy can be found on our website at: https://starasiareit.com/en/esg/index.html. The information on the website is not incorporated by reference into this document.
Asset Allocation
Our current medium-term plan involves allocation of assets into investment properties and developmentsthat will allow us to meet our medium-term goals, including reduction of the amount of annual energy consumption
per square meter of gross floor area of our portfolio by 10% compared to that of 2019 by 2030, reduction of theamount of annual GHG emissions per square meter of gross floor area of our portfolio by 10% compared to that of2019 by 2030, maintenance of the amount of annual water use and waste production per square meter of gross floorarea of our portfolio below that of 2019.
Investments which do not promote any of the above enlisted environmental or social safeguards, such as
investments that do not bring us towards any of our medium-term sustainability goals, may still be made infurtherance of our goal of profit-maximization as a diversified REIT. While we see promotion of ESG
characteristics as essential to our long-term sustainability and profitability, there are no minimum safeguards forenvironmental or social impacts provided by our investment policies or practices.
Our policies on human rights and business as set forth in our Sustainability Improvement Directives arealigned with the following international standards: The OECD Guidelines for Multinational Enterprises, The United
Nations Guiding Principles on Business and Human Rights, The United Nations Universal Declaration of Human
Rights, the International Labor Organization Declaration of Basic Principles of Labor Rights, and the United
Nations Convention on the Rights of the Child.
Principle Adverse Impacts
We consider principal adverse impacts of our investment decisions on sustainability factors. We believethat investment decisions that negatively affect climate or other environment-related resources, or have negative
implications for society, can have a significant impact to risk and value creation for our unitholders. To this end, we
consider the principal adverse impacts of our investment decisions on sustainability factors throughout all major
steps of investment decision and management process throughout the lifecycle of the properties in our portfolio.
More specific product information can be found on our website at: https://starasiareit.com/en/esg/index.html. The information on the website is not incorporated by reference into this document.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

4