June 22, 2023
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative:
Atsushi Kato, Executive Director(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative:
Atsushi Kato
President and CEO
Contact:
Akiko Kanno
Director and CFO
TEL: +81-3-5425-1340

Notice Concerning Acquisition and Lending of Assets (Preferred Equity Securities)

Star Asia Investment Management Co., Ltd. (the “Asset Manager”) to which Star Asia Investment Corporation(“SAR”) entrusts the management of its assets today announces of its decision to acquire preferred equity
securities (the “Preferred Equity Securities”) issued by GSAJP Project 1 Tokutei Mokuteki Kaisha (“GSA TMK”)
which holds trust beneficial interests in which “HAKUSAN HOUSE” (the “Property”) is the asset in trust(hereinafter referred to as the “Acquisition”), as described below.
Furthermore, SAR would also like to announce that, at the same time as the decision for the Acquisition, it has
decided to enter into an “Agreement on Lending Transaction of Preferred Equity Securities” (the “Lending
Transaction Agreement”) with Star Asia Tatemono Godo Kaisha (“SATGK”) with the aim to stabilize SAR’s earnings.
GSA TMK, the Issuer of the Preferred Equity Securities and SATGK, the counterparty to the Lending Transaction
Agreement, do not fall under interested persons, etc. as defined in Article 201 Paragraph 1 of the Act on
Investment Trusts and Investment Corporations and Article 123 of the Order for Enforcement of the Act on
Investment Trusts and Investment Corporations; however, they both fall under interested parties as defined
under the Asset Manager’s “Rules of Transactions with Interested Parties” which are self-imposed rules
stipulating countermeasures for conflict of interest related to SAR’s asset management. Upon making thedecisions for the Acquisition and for the Lending Transaction Agreement, the Asset Manager has takenprocedures for deliberation and approval by resolution in accordance with laws and regulations and such rules.
1.

Overview of the Acquisition(1) Type of acquired asset:(2)

Name of acquired asset

:

(3)
(4)
(5)

Real estate in trust
Acquired number of units
Acquisition value

:
:
:

(6)
(7)

Purchaser of the Preferred Equity Securities
Signing date of the Preferred Equity
Securities assignment agreement::1

Preferred equity securities issued by GSA TMK
which holds trust beneficial interests of a trust
where real estate is the entrusted asset (Note 1)
GSA JP Project 1 Tokutei Mokuteki Kaisha
Preferred Equity Securities
HAKUSAN HOUSE
13,328,342 units
1,562,569,919 yen
49.9% of the total amount of the Preferred Equity
Securities (Note 2)
GSA JP Project 1 Godo Kaisha (Note 3)
June 23, 2023

(8)
(9)

Date of acquisition of the Preferred Equity
Securities
Funds for acquisition of the Preferred Equity
Securities:

June 23, 2023:

Deposit money received (92,742,300 yen) for thesale and assignment of “Urban Park Gokokuji” asannounced in the press release entitled “NoticeConcerning the Transfer of Trust Beneficial
Interests of Domestic Real Estate (Urban Park
Gokokuji)” dated March 16. 2023 and own capital.

(Note 1) The Preferred Equity Securities fall under “real estate related assets”.
(Note 2) The figure is rounded to the first decimal point. The total “amount of preferred equity” means the total
amount of preferred equity securities as of June 22, 2023. For details, please refer to “3. Details of theAcquisition/ (1) General Description of the Preferred Equity Securities” stated below.
(Note 3) For details, please refer to “3. Details of the Acquisition- (3) General Description of the Purchaser of thePreferred Equity Securities” stated below.

2.

Reason for the Acquisition and signing of the Lending Transaction Agreement(1) Reason for the Acquisition
The property is a next-generation type student residence which is new to Japan, developed under
the collaboration of Star Asia Group with GSA Group which is engaged in development of student
residences worldwide.
The property is located in a highly convenient area where there are multiple universities nearby, andis featured by facilities (such as common-use open space, common-use kitchen, etc.) as well as
operations (holding events for residents etc.) which promote interaction among the international
students entering the residence and Japanese students.
Recently, given the easing of boarder measures related to COVID-19 and lifting of restrictions onentry into Japan, use by international exchange students who can also enjoy the merits of the prolonged
weak yen is increasing. This trend is expected to continue going forward, and it is anticipated that the
profitability of the property will increase.
The Asset Manager determined that the investment amount is adequate and decided on the
Acquisition, based on the following three points: (1) the value of the Property as calculated from theinvestment amount (1,562,569,919 yen) of the Preferred Equity Securities is relatively cheap whencompared to the appraisal value, (2) until such time that the profitability of the property stabilizes, SAR
can earn the lending fee as a profitability stabilization measure of SAR from the Sponsor Group (it isassumed that earnings from the Preferred Securities after the stabilization measures are completed will
exceed the lease fee)., and (3) That the investment in the Preferred Securities is expected to contributeto internal growth if the property is expected to generate stable income as assumed by the appraiser.
The Acquisition is made by utilizing the right of first refusal held by SAR. For details of the right of firstrefusal, please refer to the press release announced on March 16, 2023 entitled “Notice Concerning
signing of Right of First Refusal Agreement for Acquisition of Assets (Preferred Equity Securities) andReceipt of a Letter of Intent regarding Lending of the Preferred Equity Securities (HAKUSAN HOUSE)”.
Furthermore, with respect to the property, SAR has obtained a first right of refusal for acquiring theproperty in 2018, and such right of first refusal agreement still remains in full force and effect.
The Acquisition, together with the assignment of the property planned to be assigned as stated in
the press release dated March 16, 2023 entitled “Notice Concerning the Transfer of Trust Beneficial
Interests of Domestic Real Estate (Urban Park Gokokuji)”, is positioned as the 9th asset replacement.
Furthermore, the ratio of “real estate etc.,” to the total amount of assets under management etc.
after the Acquisition is expected to be 70% or more, and therefore does not breach the securities listing2

regulations of the Tokyo Stock Exchange (Note).
(Note) This has been determined based on the amount calculated by adding the amount of total assets on thebalance sheet statement for the period ended January 31, 2023 and the acquisition amount of themezzanine loan receivables acquired on February 1, 2023 and the acquisition amount of the Acquisition.

(2)

3.

Reason for signing the Lending Transaction Agreement
As stated above, entry by international exchange students into the Property is increasing, however,the status of operations is not yet necessarily stable. However, Star Asia Group expects that profitabilityof the Property will improve and stabilize in the future, and when the status of operations of theProperty stabilizes, the earnings from the Preferred Equity Securities are expected to exceed the lending
fee described below.
Based on the anticipations described above, it has been decided for SAR and SATGK which is amember of Star Asia Group to sign the “Agreement on Lending Transaction of Preferred Equity
Securities” which sets forth the agreement that the Preferred Equity Securities is to be lent to SATGK
and a lending fee shall be paid for an amount equal to 4% per annum on the acquisition price of thePreferred Equity Securities. From the Asset Manager’s perspective, it has been determined that byentering into the lending transaction, it is possible to exclude profitability fluctuation risk of SAR for 2
years from the Acquisition.

Details of the Acquisition(1) Structure of the Acquisition and the Lending Transaction Agreement
Name of Issuer: GSA JP Project 1 Tokutei Mokuteki Kaisha
Overview of the Preferred Equity Securities
GSA TMK【Borrowings】(Note 1)
3,283 million yen【Preferred Investments】
The Specified
Asset etc.

(Note 1)

【Preferred Equity

GSA JP Project 1

Assignment

HAKUSAN

Godo Kaisha

Agreement】

HOUSE

1,562,569,919 yen

Appraisal Value

49.9％ of【Preferred Equity Securities

6,510 million

Preferred

Lending Agreement】

yen

Investments

SAR【Specific Investments】
0.2 million yen

Lending

Payment of Lending Fee(Note 1)SATGK
(Note 1) Names are not disclosed, as consents for disclosures have not been obtained from the lenders, preferred equity
investors, and specified investors.
(Note 2) Along with the acquisition of the Preferred Equity Securities by SAR, with respect to such Preferred Equity
Securities to be held, it is planned that a preferred equity investors’ agreement will be signed which provides

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for certain restrictions on assignment of the Preferred Equity Securities.

Calculation period:

Distribution of profits and losses:

The 12-month period of each year from January 1 to December
31 (Note 3)
The TMK shall distribute to each equity investor profits arisingduring each calculation period. (Note 4)(Note 3) Regardless of the calculation period, SAR shall receive payment of the lending fee on each lending fee payment
date described under “4. Overview of the Lending Transaction Agreement - (1) General Description of

the Lending Transaction Agreement”.
“4. Overview of the Lending
Transaction Agreement - (1) General Description of the Lending Transaction Agreement”.

(Note 4) The Borrower shall receive distribution of profit and losses as described under(2) General Description of the Issuer of the Preferred Equity SecuritiesName

GSA JP Project 1 Tokutei Mokuteki Kaisha

Location

5-1-4 Toranomon, Minato-ku, Tokyo

Representative

Director Takaaki Fukunaga

Main business

1.

The purchase of specified assets in accordance with asset securitization plans
based on the Act on Securitization of Assets, and business operations related to
management and disposal of such specified assets.

2.

All other business matters incidental to or related to the securitization of thespecified assets stated above.

Capital200,000 yen

Date of establishment

March 6, 2014

Net asset
Total asset
Major shareholders and

Not disclosed, as consent for disclosure has not been obtained from the TMK.

shareholding ratios
Relationship with SAR and the Asset Manager
Capital relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

relationship
Business relationship

There is no business relationship to report.

Related party or not

The issuer of the Preferred Equity Securities does not fall under interested persons,etc. of SAR or the Asset Manager; however, Star Asia Asset Advisors Co. Ltd. who is theasset manager of the Issuer of the Preferred Equity Securities falls under interested
persons, etc. of SAR and the Asset Manager. Therefore, the Issuer of the Preferred
Equity Securities falls under interested parties as defined under the Asset Manager’s“Rules of Transactions with Interested Parties” which are self-imposed rules stipulating
countermeasures for conflict of interest related to SAR’s asset management. Uponmaking the decision for the Acquisition, the Asset Manager has taken procedures fordeliberation and approval by resolution in accordance with laws and regulations
and the relevant rules.

(3) General Description of the Purchaser of the Preferred Equity SecuritiesName

GSA JP Project 1 Godo Kaisha

Location

5-1-4 Toranomon, Minato-ku, Tokyo

Representative

Representative Partner

4

GSA Star Asia Co. Ltd.

Capital

Executive Manager Hideaki Iwata
1. The purchase, development, holding, and disposal of real estate properties.
2. Leasing and management or real estate properties.
3. The purchase, holding, and disposal of shares, equity interests, and preferred
equity investments of companies established for the purpose of securitization ofreal estate properties.
4. All other business matters incidental to or related to each of the above listed
items.
100,000 yen

Established

November 18, 2015

Main BusinessNet asset
Total asset

Not disclosed, as consent for disclosure has not been obtained from the Purchaser.

Major shareholders andshareholding ratios

Relationship with SAR and the Asset Manager
Capital relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

relationship4.

Business relationship

There is no business relationship to report.

Related party or not.

The Purchaser does not fall under a related party of SAR or the Asset Manager.

Overview of the Lending Transaction Agreement(1) General Description of the Lending Transaction Agreement
BorrowerStar Asia Tatemono Godo Kaisha

Main contents

SAR shall lend to the Borrower all of the Preferred Equity Securities which it acquires during thelending period (as defined below), and receive each month a lending fee for the lendingtransaction in amounts calculated based on the formula described below.
During the lending period, dividends paid on the Preferred Equity Securities shall be received
by the Borrower.

Lending Fee

The monthly lending fee shall be calculated based on the formula below. Any fractions of one
yen which arise as a result of the calculation shall be rounded up to the nearest yen.
Lending fee = acquisition price of the Preferred Equity Securities × lending fee rate (4%)× actual number of days (one end putting) / 365.

Lending period

2 years from June 23, 2023

Signing dateJune 23, 2023

Lending fee payment

Lending fees are to be calculated as of the end of June and December each year, and is to bedatepaid at the end of the immediately following month. The first payment date shall be the last
day of July 2023.

Others(1) In the case where SAR additionally acquires the Preferred Equity Securities within thesubject period, SAR shall lend the number of such additional acquisitions of Preferred
Equity Securities to the Borrower in the same manger.
(2) With respect to the Lending Transaction Agreement, it is planned for a funding guarantee
agreement to be signed which sets forth that if it becomes difficult or impossible for the
Borrower to pay the lending fees as they come due for payment, Star Asia Finance LLC
who is a member of the Star Asia Group shall provide funds to the Borrower.

(2)

General Description of the Counterparty of the Lending Transaction Agreement

Name

Star Asia Tatemono Godo Kaisha

Location

2-5-1 Atago, Minato-ku, Tokyo

5

Atago Green Hills Mori Tower 18F
Representative

Representative Partner

General Incorporated Association Star Asia Tatemono

CapitalExecutive Manager Takaaki Fukunaga
1. The purchase, holding, and disposal of trust beneficial interests in real estate.
2. The purchase, holding, and disposal of loan receivables.
3. The purchase, holding, and disposal of bonds, tokumei kumiai (silent partnership)
equity interests and other securities.
4. The sale and purchase, leasing, supervision, acquisition, holding, disposal, and useof real estate properties.
5. All other business matters incidental to or related to each of the above listed
items.
300,000 yen

Date of Establishment

January 11, 2023

Main businessNet asset
Total asset

Not disclosed, as consent for disclosure has not been obtained from the counterparty

Major shareholders andto the Lending Transaction Agreement.

shareholding ratios
Relationship with SAR and the Asset Manager
Capital relationship

There is no capital relationship to report.

Personnel

There is no personnel relationship to report.

relationship
Business relationship

SAR and the counterparty to the Lending Transaction Agreement have signed a master
lease agreement for a trust beneficial interest (Urban Center Hakata) held by SAR.

Related party or not

Although the counterparty to the Lending Transaction Agreement does not fall underinterested persons, etc. of SAR or the Asset Manager; however, it falls under interested
parties as defined under the Asset Manager’s “Rules of Transactions with Interested
Parties” which are self-imposed rules stipulating countermeasures for conflict ofinterest related to SAR’s asset management. Upon making the decision to sign theLending Transaction Agreement, the Asset Manager has taken procedures fordeliberation and approval by resolution in accordance with laws and regulations
and the relevant rules.

5.

Transactions with Interested Persons, Etc.
GSA TMK, the issuer of the Preferred Equity Securities, and SATGK, the counterparty to the Lending
Transaction Agreement, do not fall under interested persons, etc. of SAR and the Asset Manager; however,Star Asia Asset Advisors Co. Ltd. who is the asset manager of GSA TMK falls under interested persons, etc. of
SAR and the Asset Manager. Therefore, GSA TMK falls under interested parties as defined under the AssetManager’s “Rules of Transactions with Interested Parties” which are self-imposed rules stipulating
countermeasures for conflict of interest related to SAR’s asset management.
Furthermore, SATGK who is the counterparty under the Lending Transaction Agreement also falls underinterested parties as defined under the Asset Manager’s “Rules of Transactions with Interested Parties” which
are self-imposed rules stipulating countermeasures for conflict of interest related to SAR’s asset management.
Upon making the decisions for the asset acquisition and lending transaction, the Asset Manager has takenprocedures for deliberation and approval by resolution in accordance with laws and regulations and therelevant rules.

6.

Schedule for Acquisition of the Preferred Equity Securities and the Lending Transaction
June 22, 2023:
Decision for the Acquisition

6June 23, 2023:::

June 23, 2023

Sign the Preferred Equity Assignment Agreement
Sign the Lending Transaction Agreement
Acquisition and Lending of the Preferred Equity Securities

7.

Settlement Method
SAR intends to make settlement of the purchase price of the Preferred Equity Securities by making one
lump-sum payment to GSA JP Project 1 Godo Kaisha from the deposit money received (92,742,300 yen) for
the sale and assignment of “Urban Park Gokokuji” as announced in the press release entitled “NoticeConcerning the Transfer of Trust Beneficial Interests of Domestic Real Estate (Urban Park Gokokuji)” dated
March 16, 2023 and also by use of own funds.

8.

Future Outlook
As announced in the press release dated March 16, 2023 entitled “Notice Concerning signing of Right ofFirst Refusal Agreement for Acquisition of Assets (Preferred Equity Securities) and Receipt of a Letter of Intent
regarding Lending of the Preferred Equity Securities (HAKUSAN HOUSE)”, we are of the view that theAcquisition and the signing of the Lending Transaction Agreement should be reflected in the assumptions
underlying the management status forecast for the fiscal period ending January 2024 (August 1, 2023 toJanuary 31, 2024), and the transactions have been incorporated in the forecast for the fiscal period ending
January 2024 (August 1, 2023 to January 31, 2024) described in the “Financial Report for Fiscal Period Ended
January 31, 2023” disclosed on March 16, 2023. The impact on the operating conditions for the 15th fiscal
period (February 1, 2023 to July 31, 2023) is minimal, and there is no change to the forecast of the operating
conditions.

(For reference) Management Status Forecast for the current fiscal period and actual results of the preceding fiscal
periodOperatingOperating

Ordinary

revenueincomeincomeNet income

Distributions
per Unit(does notincludeoptimalpayabledistributions)

Optimalpayabledistributions
per Unit

Management
status forecast
for the current

7,012

3,527

2,983

2,983

fiscal period

million yen

million yen

million yen

million yen

1,552 yen

0 yen

1,491 yen

0 yen

ending July 31,
2023
Actual resultsof preceding
fiscal period
ended January

6,486

3,349

2,782

2,781

million yen

million yen

million yen

million yen

31, 2023

9.

General Description of the Property
Property name
Asset type

HAKUSAN HOUSE
Student residenceType of asset

7

Trust beneficial interest

4-33-14 Hakusan, Bunkyo-ku, Tokyo

Location(residential address)
Nearest Stations
Land

Form ofownership
Site area

Approximate 4-minute walk from Hakusan station on the Toei Mita Line, approximate 9minute walk from Komagome station on the Tokyo Metro Namboku Line
Proprietary right of ownership

1,185.44㎡

Use district

Neighborhood commercialzone(Note 1)

Buildingcoverage

80 %Floor-area-ratio (FAR)

400 %4,961.40㎡

Use

Dormitory

January 18, 2018

Structure / numberof
storiesratio (BCR)
Building

Form ofownership
Gross floor
area
Construction
completion

Master lease company

Proprietary right of ownership

Uninest Godo Kaisha

Type of master lease

Steel-framed and steelreinforced concrete (SRC)
9 stories above groundPass-throughStatus of leases (as of end of May 2023)
Leasable area

3,095.33㎡

Leased area

3,095.33㎡

Number of tenants

1 (Note 3)Monthly rent (includingcommon area fees)
Lease and guarantee deposits

Not disclosed (Note 2)
0

Transition of Occupancy Rates
December 2022

January 2023

February 2023

March 2023

April 2023

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

Summary of real estate appraisal report
Appraisal value

6,510 million yen

Timing of valuation

December 1, 2022

Net operating income

274,584,000 yen

Capitalization rate

4.0%

Appraisal agency

Japan Real Estate InstituteSpecial notes

Not applicable.

Characteristics

The Property is a student residence located within walking distance from “Hakusan”
station and “Komagome” station. The area where the Property is located has multiple
university campuses which accept international exchange students, including Tokyo
University.
The Property is offered to international exchange students as well as Japanese students
who wish to interact with international exchange students. The Property has enhanced
common-use space including a multi-purpose room and common-use kitchen anddining space, aiming to promote interaction among the resident international andJapanese students, and holds events for residents and offers a concierge service which
can accommodate foreign languages, and is a student residence which features facilities
and operations rarely seen in Japan to date. The Property has introduced a 24-hour
security system using technologies to pursue safety, and there are no cumbersome
procedures for commencing the leases. Utility costs etc. are included in the rents, and8also given the prolonged weak yen, the property is particularly attractive tointernational exchange students.
(Note 1)The land of the property is situated crossing over two different use districts and districts with differing floor area ratio
requirements (neighborhood commercial zone and Type 1 exclusive district for medium and high-rise residential
properties), however, given the Hakusan House District Planning, the permitted floor area ratio will be 395.23%.
(Note 2)Not disclosed, as consent for disclosure has not been obtained from the owner.
(Note 3)The occupancy rates of end tenants are not disclosed, as consent for such disclosure has not been obtained from theowner.
(Note 4)The figure is the income value based on the income capitalization method.

*Star Asia Investment Corporation website address:

https: //starasia-reit.com/en/

This is an English translation of the announcement in Japanese dated June 22, 2023. However, no assurance orwarranties are given for the completeness or accuracy of this English translation.

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