February 26, 2021
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Officer(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 signing of Fixed-Term Lease Agreement with respect toa Domestic Real Estate Trust Beneficiary Interest (1 Hotel Property) and Change of Property NameStar Asia Investment Management Co., Ltd. (the “Asset Manager”) to which Star Asia Investment Corporation(“SAR”) entrusts the management of its assets announces that today it has decided to enter into a “Fixed-term
Lease Agreement” (the “Lease Agreement”) with Fino Hotels Co., Ltd. (the “Operator”) which is a 100 %-owned
subsidiary of Kachikaihatsu Co., Ltd. (TSE 2nd section, code 3010; hereinafter referred to as “Kachikaihatsu”) which
is a member of the Star Asia Group. with respect to “Hotel WBF Art Stay Namba” (the “Property”) which is amanaged asset of SAR. Details are described below.
With respect to the Property, as announced in the press release dated April 27, 2020 entitled “Notice Concerning
Status of a Tenant of a Hotel Property”, the press release dated July 28, 2020 entitled “Notice Concerning Statusof a Tenant of a Hotel Property (follow-up report) - Signing of Lease Contract Cancellation Agreement with theCurrent Tenant-”, and the press release dated September 14, 2020 entitled “Notice Concerning Status of aTenant of a Hotel Property (follow-up report) - Signing of Memorandum Agreement regarding Hotel Operations
with KACHIKAIHATSU Co. Ltd.”, it was closed on June 30, 2020, and the lease agreement with the former operator
was terminated by agreement as of July 28, 2020. For details, please refer to the above-mentionedannouncements.
1.

Reason for Entering into the Lease Agreement
As announced in the press release dated September 14, 2020 entitled “Notice Concerning Status of aTenant of a Hotel Property (follow-up report) - Signing of Memorandum Agreement regarding HotelOperations with KACHIKAIHATSU Co. Ltd.”, as a result of having considered various utilization options
including changing the use zoning classification of the property, SAR and the Asset Manager have determinedthat it is most appropriate to solicit new operator for the hotel, and have entered into a “Memorandum
Agreement regarding Hotel Operations” with Kachikaihatsu, while also continuing negotiations with othermultiple new operator candidates (tenant candidates) regarding lease conditions towards entering into alease agreement.
In the process of such negotiations, we have asked multiple new operator candidates to submit futurebusiness plans and methods for setting rents etc., and after comparing and considering such proposals, wehave determined that signing a lease agreement with the Operator is the best choice for SAR. Furthermore,upon making the decision to enter into the Lease Agreement, necessary deliberations have been made andresolutions passed in relation to the Act on Investment Trusts and Investment Corporations (Act No. 198 of1951, including any amendments thereto; hereinafter referred to as the “Investment Trust Act”) as well as

1rules regarding interested parties’ transactions of the Asset Manager.
The Operator is a member of Star Asia Group, and is a 100 % subsidiary of Kachikaihatsu which falls underInterested Person, etc. of the Asset Manager. The Operator’s core business is the operation and managementof hotels, and has a track record of operating14 hotel buildings and 1644 rooms (as of today), and in particular,
in the Osaka Area, it operates 4 hotel properties and 521 rooms. Upon operating the Property, as it is capableof sharing human resources and placing lump sum orders for hotel equipment etc. related to the region, it isbelieved that a highly efficient hotel management operations can be expected.
The opening date shall be a day decided by the Operator which shall by in the period up to December 31,
2021; however, the Operator shall consult with the Asset Manager in good faith so that the actual opening
will occur by August 1, 2021. The best timing for opening shall be discussed based on analysis of external
factors such as the effects of the global spreading of COVID-19 and holding of the Tokyo Olympic games.
2.

General Description of the Lease Agreement(1) Name of property(2) Name of tenant(3) Rentable area
(4) Ratio to the Property’s total rentable area(5) Ratio to SAR’s total rentable area
(6) Rent： Hotel WBF Art Stay Namba (Note 1)： Fino Hotels Co., Ltd.
： 2,061.38 ㎡： 100.0 %： 0.5 % (Note 2)： < Variable Rent>
The rent amount is calculated by multiplying 80%
to the GOP (Note 4) equivalent amount fromoperation of the Property for the rent calculation
period (every 3 months) (Note 3) and then adding
consumption tax and local consumption tax
amounts. Provided, however, that if the amountderived by multiplying 80% to the GMO
equivalent amount is a negative number, the rent
amount shall be zero.
： 0 yen (Note 5)： February 26, 2021： March 1, 2021
： March 1, 2021 to February 28, 2031
： SAR shall pay to the Operator JPY 9,000,000 (plusconsumption tax) as opening preparation fee.
However, if the Operator fails to open the hotel at
the Property by December 31, 2021, the Operator
shall pay to SAR JPY 9,000,000.

(7) Security deposit and guarantee money(8) Lease Agreement signing date
(9) Lease commencement date(10) Contract period(11) Others(Note 1) This is the name as of today. It is planned for the property name to be changed to “KOKO HOTEL Osaka Namba”
in the future, as a part of Operator’s brand strategy.
(Note 2) The ratio against the total rentable area of assets held by SAR as of January 31, 2021 is stated, rounded to one
decimal place.
(Note 3) The rent calculation period is every 3 months ending on the calculation dates which are the end of the monthsof April, July, October, and the following January of each year.
(Note 4) “GOP” means the amount calculated by deducting from the Property’s hotel sales (excluding consumption taxand local consumption tax amounts) the cost of sales and operating costs such as personnel expenses etc.
(excluding consumption tax and local consumption tax amounts).
(Note 5) Under the Lease Agreement, no security deposits or guarantee money will be exchanged.

23.

Overview of the Operator
NameLocation
Name and title of Representative
Main Business Description

Fino Hotels Co., Ltd.
1-12-3 Iwamoto-cho, Chiyoda-ku, Tokyo
Shigeru Takakura, CEO
Hotel operation and management, and receiving entrustment ofsuch business
JPY 99,000,000 (Note 1)
April 3, 2007

CapitalDate of Establishment
Net Assets
Not disclosed (Note 2)
Total Assets
Major shareholder and ratio ofKachikaihatsu Co. Ltd. 100.0 %shareholding
Relationship with SAR and the Asset Manager
Capital Relationship
There is no direct capital relationship between SAR / the AssetManager and the Operator. However, the Operator is a subsidiary ofKachikaihatsu which is an Interested Party, etc. of the AssetManager. As of today, Kachikaihatsu holds 100% of the voting rightsof the Operator.
Personnel Relationship
There are no personnel relationships between SAR / the AssetManager and the Operator which is worth noting. However, 2persons of Star Asia Group have been appointed as Directors of theOperator.
Business Relationship
There are no business relationships worth noting between SAR / theAsset Manager and the Operator, other than the Lease Agreement.
Related party or not
The Operator falls under Interested Person, etc. as defined underArticle 201 of the Investment Trust Act and Article 123 of the Orderfor Enforcement of the Act on Investment Trusts and Investment
Corporations (Cabinet Order No. 480 of 2000; including any
amendments thereto). Furthermore, the Asset Manager falls undera related party as defined in the “Related Party Transaction Rules”
which is a self-imposed rule established as countermeasures forconflicts of interests related to SAR’s asset management. Upon
entering into the Lease Agreement, the Asset Manager has madenecessary deliberations and passed necessary resolutions asprovided for under the Investment Trust Act and internal rules(including the “Related Party Transaction Rules”).
(Note 1) This figure is based on information as of December 31, 2020.
(Note 2) This is not disclosed, because the Operator has not given consent to such disclosure.

4.

Change of Property Name
(1) Property NameCurrent Property Name
Hotel WBF Art Stay Namba

New Property Name
KOKO HOTEL Osaka Namba(2) Effective Date
March 1, 20213

(3) Reason for Change
The property name will be changed as part of the brand strategy of the Operator.
5.

Future Outlook
The impact of the Lease Agreement on SAR’s management status is currently being examined. Themanagement status forecast for the period ending July 2021 (February 1, 2021 to July 31, 2021) and theperiod ending January 2022 (August 1, 2021 to January 31, 2022) will be announced in the “(REIT) Financial
Report for the Fiscal Period Ended January 31, 2020” expected to be announced on March 16, 2021.

6.

OthersThere was an error in the press release announced on September 14, 2020 entitled “Notice Concerning Statusof a Tenant of a Hotel Property (follow-up report) - Signing of Memorandum Agreement regarding Hotel
Operations with KACHIKAIHATSU Co. Ltd.” We would like to correct the error as follows. (The correction isunderlined.)
Before Correction

After Correction

Kachikaihatsu Co. Ltd. (TSE 2nd Section: code no. 3040,

Kachikaihatsu Co. Ltd. (TSE 2nd Section: code no. 3010,

hereinafter referred to as “Kachikaihatsu”)

hereinafter referred to as “Kachikaihatsu”)

End<Reference Information>
April 27, 2020

Notice Concerning Status of a Tenant of a Hotel Property

July 28, 2020

Notice Concerning Status of a Tenant of a Hotel Property (follow-up report)- Signing of Lease Contract Cancellation Agreement with the Current Tenant-September 14, 2020

Notice Concerning Status of a Tenant of a Hotel Property (follow-up report)- Signing of Memorandum Agreement regarding Hotel Operations with KACHIKAIHATSU Co.
Ltd. -* SAR HP URL: http://starasia-reit.com/en/
This is an English translation of the announcement in Japanese dated February 26, 2021. However, no assurance orwarranties are given for the completeness or accuracy of this English translation.

4