Star Asia Investment Corporation
https://starasia-reit.com/en/

Semi-Annual Reportfor the 16th Fiscal Period
from August 1, 2023 to January 31, 2024

Star Asia Investment Corporation (Securities CODE 3468)
Atago Green Hills MORI Tower, 18th Floor 2-5-1 Atago, Minato-ku, Tokyo, Japan

Investment
Philosophy

FUND MANAGEMENT

Characteristics of Star Asia Investment Corporation (SAR)

Basic Principles

1. A diversified REIT

2. Steady growth

Portfolio developed withdiversified assets located mainlyin the Tokyo Area (Note)

Pursuit of internal growth by the
Asset Manager with abundant
experience and know-how aswell as external growth based on
asset management performedby the Star Asia GroupFOR INVESTORSStar Asia Investment Corporation (SAR) makes investments
through a “unitholders’ interest-first” mindset in principle,

3. Initiatives focusing
on unitholder value
Constant, “out-of-the-box”
active management(Note) “Tokyo area”: “Tokyo area” refers to Tokyo and the three prefectures of Kanagawa, Saitama and Chiba. The same shall apply hereinafter.

entrusting asset management to Star Asia Investment
Investment Policy

Management Co., Ltd., which belongs to Star Asia Group, an
independent real estate investment group that has
accumulated a track record in the Japanese real estate market.
SAR aims to maximize unitholders’ interests by conducting
flexible and agile portfolio management based on its unique

GROWTH

Prioritized, focusedinvestment in the Tokyo Area

market analyses while focusing on income stability and growth

Investment ratio 70%±10%
in the Tokyo Areaof income, and implementing highly transparent management

Achieving income stability
and growth throughdiversification of asset
types

Investment primarily
in middle-size assetsthat discloses information necessary for unitholders in a timely
and appropriate manner.
Financial Highlights for 16th Fiscal Period (As of the end of January 2024)
TOKYO AREA

Contents
To Our Unitholders 

2Initiatives Related to ESG 

4

Portfolio Overview 

5Financial Summary 

8Balance Sheet 

10Statement of Income and Retained Earnings 

12Statement of Changes in Unitholders' Equity 

13Statement of Cash Distributions 

15Statement of Cash Flows 

16

Notes to Financial Statements 

Operating revenue

Operating income

Ordinary income

Net income

7,964 million yen

4,309 million yen

3,528 million yen

3,527 million yen

Actual and Forecasted Cash Distributions Per Unit
STABILITY
13th FP Actual

14th FP Actual

15th FP Actual

1,476 yen

1,491 yen

1,586 yen

17

16th FP Actual

17th FP Forecast

18th FP Forecast

Supplementary Schedules 

33

Independent Auditor’s Report 42

1,524 yen

1,520 yen

1,538 yen

* In this report, amounts are rounded down to the unit displayed and percentages are rounded to the first decimal place.

To Our Unitholders
Messageinitiatives included the installation of LED lighting, renovation work to improve the efficiency of air conditioning equipment and heat transfer power and to save energy, and the conservation of greenery in accordance with the needs ofeach property. SAR achieved three stars and a green star in the GRESB Real Estate Assessment for the third consecutive year in fiscal 2023 as part of ESG initiatives. In addition, SAR received the highest Level A rating of the
GRESB Public Disclosure Assessment that measures the adequacy of ESG information disclosure, as a result ofhigh marks that its efforts for ESG information disclosure earned. These assessments are no more than indicators of
the implementation of ESG initiatives, and earning high marks in itself is not our goal. It is more important that we
implement initiatives to create a better environment (E), a better society (S), and better governance (G), while receiving high marks, and that we fulfill our responsibilities as an investment corporation of a public nature.
As a result of management pursuing the maximization of unitholder returns, the increase of the profitability of its

Star Asia Investment Corporation
Executive Director

Atsushi Kato
We appreciate your continued support and guidance of Star Asia Investment Corporation (SAR) and the asset man-nue of 7,964 million yen, ordinary income of 3,528 million yen, net income of 3,527 million yen and cash distributions
per unit of 1,524 yen. This is our report of our performance results in the 16th Fiscal Period. We express our deep
gratitude to our unitholders for their support and understanding. We thank all our unitholders for their continued
support and guidance moving forward.

agement company Star Asia Investment Management Co., Ltd.

Toward achieving medium-term management plan

With the asset manager, SAR has continued to implement initiatives to maximize unitholder returns (active

In March 2021, as a medium-term management plan, SAR set a goal to achieve an asset size of 300 billion yen andmanagement) since its listing in April 2016. During the fiscal period under review (fiscal period ended January 2024),

increase cash distributions per unit to 1,600 yen or more by 2026. Regarding the expansion of asset size (external

SAR conducted a public offering in August 2023, the third consecutive year it has done so, and acquired 11

growth), SAR executed a public offering in August 2023, and incorporated 11 properties (total acquisition price: 49.1

properties (the total acquisition price was 49.1 billion yen). This is the third public offering since the medium-termbillion yen) into its portfolio. The asset size is 243.8 billion yen as of the end of the fiscal period under review, and we

management plan was formulated in March 2021 and the sixth one since SAR became listed. SAR’s asset size wasbelieve that the increase is significant progress towards the achievement of the medium-term management plan (the243.8 billion yen (71 properties, one preferred equity security, and two mezzanine loan investments) at the end of theexternal growth target). At about the same time as the public offering, SAR acquired preferential negotiation rights

fiscal period under review following acquisitions. SAR aims to steadily expand to achieve an asset size of 300 billion

for 12 hotels with the latest appraisal value being 58.1 billion yen from the sponsor group to raise funds for external

yen by 2026, the target in the medium-term management plan.

growth. SAR also has preferential negotiation rights for two residential properties exclusively for students whose

Seven hotels (45.4 billion yen) are 92% of the assets acquired at the beginning of the fiscal period under review. It is

profitability is expected to increase. Going forward, SAR aims to continue its external growth by taking full advantage

expected that they will achieve internal growth. All seven hotels are leased and operated by a company under theof the asset manager’s unique network and opportunities to acquire properties from the Star Asia Group, with aumbrella of Polaris Holdings Co., Ltd., which is a part of the Star Asia Group. Even during the COVID-19 pandemic,

focus on properties for which preferential negotiation rights have been acquired.

the company expanded its business in cooperation with the Star Asia Group and utilized economies of scale to

In terms of the growth of cash distributions per unit (internal growth), it is essential to execute management andincrease sales and cost efficiency.

operation aimed at increasing profitability of each property included in the portfolio and reducing costs. Additionally,

All seven newly acquired hotels have the same rent structure. SAR can collect 85% of the GOP of each hotel as

SAR is implementing initiatives to achieve internal growth. Specifically, SAR extended Funabashi Hi-Tech Park

rent (Note). It can thus directly benefit from any improvement of hotel operations resulting from an increase in accom-

Factory I, a logistics facility with unused floor area, at the request of the tenants. The extension was completed inmodation demand. Rental income from the seven hotels has far exceeded initial expectations. It is believed that theDecember 2023, and the property will contribute to internal growth from the fiscal period ending July 2024. At Suroyacquired properties will contribute to internal growth.

Mall Chikushino, a suburban retail facility, SAR attracted LOPIA, a supermarket that is highly capable of attracting(Note) At each of the seven newly acquired properties, a certain fixed rent has been agreed on. If 85% of their GOP exceeds this fixed rent, SAR
will receive the surplus.

customers, as an anchor tenant. LOPIA opened in November 2023 and attracts
enhanced the entire facility’s ability to attract customers. In addition to rental

investments whose distributions are expected to increase in order to maximize returns for unitholders. SAR will strive

income, LOPIA will likely contribute to attracting new tenants to Suroy Mall

to increase earnings growth and stability and promote external growth to accomplish the medium-term manage-

Chikushino. In addition to the maintenance and improvement of occupancy

ment plan.

rates of each property and the increase in revenue through cost reduction, SAR

tiatives (E), SAR invested a total of 432 million yen in various initiatives in the fiscal period under review. These

Funabashi Hi-Tech Park Factory I

a large number of shoppers on weekdays and weekends. The supermarket has

SAR aims to acquire properties that have the potential to contribute to internal growth and make mezzanine loan

SAR continues to implement initiatives related to ESG practices to achieve the SDGs. Regarding environmental ini2

properties and the reduction of costs, for the 16th Fiscal Period (ended January, 2024), SAR posted operating reve-

will continue to implement the above initiatives to pursue further internal growth
and aim to increase cash distributions per unit.

The section on the right side is one of
the two buildings added to the factory.

3

Initiatives Related to ESG

Portfolio Overview (As of January 31, 2024)
OFC-01

ESG Policy
Our Company, as a member of the Star Asia Group, shares its Investment Philosophy and Guiding Principles.

OFC-03

OFC-04

OFC-06

OFC-08

OFC-09Minami-Azabu
Shibuya Building

Honmachibashi
Tower

Nishi-Shinjuku
Matsuya Building

Urban Center
Shibuya East (Note 1)

Urban Center
Yokohama West (Note 2)

Hakata-eki
East Place

Completed: Jun. 15, 1993

Completed: Feb. 8, 2010

Completed: May 28, 1987

Completed: Jul. 31, 1993

Completed: Nov. 25, 1994

Completed: Feb. 24, 1986

Furthermore, as the asset management company for Star Asia Investment Corporation, we engage in the realestate investment management business which gives consideration to the environment, society, and governance in order to enhance corporate value and exert comprehensive competitiveness by pursuing long-termsustainability and recognizing the role Star Asia Investment Corporation has been given in society in accordance with our basic philosophy of “Client First.”
OFC-10

Environmental Initiatives

OFC-11

OFC-12

OFC-13

OFC-14OFC-15

Nihonbashi Hamacho
Park Building

Amusement Media
Gakuin Honkan

Higashi-KobeCenter Building

Amusement Media
Gakuin Shinkan

Seishin BLDG.

Urban Center
Kanda Suda-choCompleted: Jul. 13, 1992

Completed: Nov. 2, 1994

Completed: Jan. 6, 1992

Completed: Jan. 25, 1999

Completed: Mar. 31, 1989

Completed: Oct. 28, 1991

Acquisition of Environmental Certifications As of January 31, 2024
DBJ Green Building
Certification

Building-Housing Energy-efficiency
Labeling System (BELS)

CASBEE Real Estate
Assessment

Goals

Achieve at least 50% of
the ratio at environmental
certifications (Note 2) by 2026
OFC-16★★★ 1 property★★ 4 properties★ 1 property★★★★★ 3 properties★★★★ 2 properties★★★ 2 properties★★ 1 property (Note1)★★★★★ 2 properties★★★★ 3 properties(Note 1) Even in cases where a property with multiple
buildings acquires certifications at eachbuilding, it is counted as one property.

OFC-17

OFC-18

Urban Center Kanda
Tsukasamachi

Takadanobaba
AccessAzabu Amerex
BLDG.

Hiei-Kudan BLDG.

OFC-19Urban Center
Shin-Yokohama

OFC-20

The Portal Akihabara

OFC-21

Completed: Jan. 20, 1988

Completed: Jan. 14, 1994

Completed: Jun. 30, 1988

Completed: Sep. 17, 1991

Completed: Mar. 17, 1992

Completed: May 31, 2002

(Note 2) Ratio of each floor area to the gross floorarea of SAR portfolio (585,163.76 m2).

Acquisition ratio (Note 2) 43.9%

Social Initiatives
Kishiwada Environment Fair 2023
A panel exhibition of environmental protection initiatives taken by Kishiwada City andvarious groups. Based on the advocation by the Environment Agency, June has been
designated as Environment Month from fiscal 1991, and initiatives were taken to promoteinterest and understanding of environmental protection matters, and awareness campaigns were launched to increase motivation towards proactive conservation activities.

OFC-22

OFC-23

OFC-24

Urban Center
Tachikawa

Urban Center
HakataUrban Center
Fujisawa

La Park Kishiwada

RTL-01

Suroy Mall
Chikushino

RTL-02

Seiyu Minakuchi

RTL-03Completed: May 30, 1990

Completed: Aug. 27, 2020

Completed: Apr. 9, 1991

Completed: Aug. 30, 1994

Completed: Jun. 22, 2007

Completed: May 31, 1999

Tenant satisfaction surveys
Tenant satisfaction surveys are conducted periodically towards tenants of owned properties. Based on the
results of the survey, measures to improve operations and management are considered.

RTL-05

RTL-06

RSC-01

BAGUS IkebukuroWestabeno nini (Retail)Urban Park
Azabujuban

Completed: Nov. 20, 1992

Completed: Jan. 31, 2012

Completed: Nov. 29, 1999

RSC-02

RSC-05

RSC-07

Urban Park Daikanyama

Urban Park Namba

Urban Park Kashiwa

Completed:Nov. 15, 1982 (Existing)May 30, 2006 (Newly built)

Completed: Jan. 9, 2013

Completed: Aug. 28, 1997

Governance Initiatives
Decision-Making Process

Department
Proposal• Implement decision-making with high trans-

Compliance Officer

parency by complying with laws andregulations

Review and approval

Investment Committee (including external directors)
Review and resolution• Maintain a high sense of ethics and execute

Compliance Committee (including external directors)

operations as a manager of investors’ funds

Review and resolution

Board of Directors
Review and resolution
Items that do not need to be discussed at the Compliance Committee
Items that need to be discussed at the Compliance Committee

4

SAR’s Board of Directors Meetings
Review and approval

ReturnRejected

RSC-10

RSC-11

RSC-13

RSC-14

Urban Park
Ryokuchi Koen

Urban Park Ichigao

Urban Park Gyotoku

Shiroi Logiman

Urban Park Sekime

Urban Park Imazato

Completed: Mar. 10, 1989

Completed: Jul. 10, 1998

Completed: Mar. 24, 1995

Completed: May 9, 1995

Completed: Aug. 18, 1989

Completed: Dec. 20, 1991

RSC-08

RSC-12

Rejected
Rejected
Unapproved(Note 1) The name was changed on July 1, 2023 (former property name: Shibuya MK Building).
(Note 2) The name was changed on July 1, 2023 (former property name: Asahi Building).

(Note 3) Disposed as of August 31, 2023.

5

Portfolio Overview (As of January 31, 2024)

RSC-15

RSC-16

RSC-17

RSC-18

RSC-19

RSC-20Urban Park Yoyogi

Urban Park Tokiwadai Koen

Urban Park Mitsuike Koen

Urban Park Ryogoku

Urban Park Mizonokuchi

Urban Park MiyamaedairaCompleted: Sep. 4, 2017

Completed: Feb. 17, 1994

Completed: Mar. 24, 1992

Completed: Oct. 31, 1997

Completed: Aug. 23, 1988

Completed: Jun. 10, 2021

Strategic Initiatives in the Hotel Business by Polaris Holdings(affiliate of the Star Asia Group)• As of June 30, 2023, Polaris Holdings operates 48 hotels with a total of 8,722 rooms (including overseas hotels
and hotels planned for operation)• During the pandemic, Polaris opportunistically increased hotels under operation, increasing revenues and lower-

RSC-21

RSC-22

RSC-23

RSC-24

RSC-25

LGC-01

Urban Park Tsurumi

Urban Park Mitaka

Urban Park Kamata
Minami II

Iwatsuki Logistics

Completed: Jun. 8, 2023

Urban Park Kamata
Minami I

Urban Park UmejimaCompleted: Feb. 17, 1994

Completed: Oct. 23, 2023

Completed: Oct. 29, 2014

Completed: Sep. 29, 2022

Completed: Sep. 25, 2023

ing breakeven point

Star Asia Group• Star Asia Group, which has senior investment professionals with deep experience inmanaging real estate investments, has joined forces with Polaris (previously
Kachikaihatsu Co., Ltd.), an operator of diverse hotels• Together, they are pursuing hotel operations that leverage Star Asia Group’s strong

LGC-02

LGC-03

Yokohama Logistics

Funabashi Logistics

Baraki Logistics

LGC-04

Funabashi Nishiura
Logistics II

Matsubushi
Logistics

Completed: Oct. 1, 1994

Completed:
Sep. 25, 1992 (Building 1)
Aug. 5, 1997 (Building 2)

Tokorozawa
Logistics

LGC-05

LGC-07

LGC-08Completed: Aug. 14, 2015

Completed: Apr. 30, 1999

Completed:
Mar. 20, 1991 (Warehouse)
May 15, 1972 (Factory)
May 13, 1986 (Office)Completed: Mar. 31, 1997

Listed on TSE Standard
MarketCode: 3010

HTL-02

Funabashi Hi-Tech
Park Factory I

R&B Hotel
Umeda East

Smile Hotel Namba

Completed: May 19, 2003

Completed: Oct. 20, 2000

Completed: Feb. 6, 2008

HTL-03

HTL-04

Investment management

Expand fee-revenue Increase the number of hotels operating under management contracts, providing the

breakeven
HTL-01

Hotel operations

More efficient hotel operations and maximization of investment value

Lower

LGC-09track record in opportunistic investments

HTL-05REMBRANDT STYLETokyo Nishikasai

BEST WESTERN
Yokohama

The BREAKFAST HOTELFUKUOKA TENJIN

Completed: Mar. 19, 1991

Completed: Sep. 21, 1987

Completed: Feb. 20, 2017

point

hotelsowners with fee-based revenues and reducing the per-room burden of tenancy fees

Promote businessEliminate annual fixed rent payment obligation by acquiring properties as owner andas owner/operators

operating them as operator.

Effective hotel

Optimize staff number at each hotel through efficient shift assignments and multitasking

operation

which results in reducing personnel costs on a per-guest-room basis
Develop highly competitive hotels and grow the number of guest rooms in hotels under

Expand operations platform

management
Pursue economies of scale by expanding the operation platform and maximize revenue

HTL-06

HTL-07

HTL-08

HTL-09

HTL-10

HTL-11

GLANSITAKIHABARAREMBRANDT STYLETokyo Nishikasai Grande

KOKO HOTEL
Osaka Namba

abeno nini (Hotel)

KOKO HOTEL
Ginza 1-Chome

KOKO HOTEL
Sapporo Ekimae

Completed: Sep. 20, 2017

Completed: Feb. 7, 2017

Completed: Apr. 7, 2017

Completed: Jan. 31, 2012

Completed: Oct. 29, 2014

Completed: Oct. 20, 2015

Hotel Brands Owned by Polaris Holdings

KOKO HOTELHTL-12

6

HTL-13HTL-14

KOKO HOTEL
Fukuoka Tenjin

KOKO HOTEL
Hiroshima Ekimae

KOKO HOTEL
Kagoshima Tenmonkan

KOKO HOTEL
Sapporo OdoriBest Western Plus
Fukuoka Tenjin-minami

Completed: Aug. 20, 2007

Completed: Dec. 17, 2019

Completed: Apr. 19, 2019

Completed: Jun. 9, 2020

Completed: Apr. 3, 2020

HTL-15

Best Western

Value The Hotel

Red Planet Hotels

HTL-16

7

Financial Summary
Historical Operating Trends(Note 1) The operating periods for Star Asia Investment Corporation (SAR) are the six-month periods from February 1 to July 31 and August 1
to January 31 of the following year.

12th Fiscal
PeriodFiscal Period

13th Fiscal
Period14th Fiscal
Period15th Fiscal
Period16th Fiscal
Period(August 1, 2021 to (February 1, 2022 (August 1, 2022 to (February 1, 2023 (August 1, 2023 toJanuary 31, 2022) to July 31, 2022) January 31, 2023) to July 31, 2023) January 31, 2024)

Operating revenue(million yen)

5,960

6,088

6,486

6,946

7,964

Operating revenue from real estate leasing (million yen)

5,890

6,060

6,463

6,503

7,524

(million yen)

2,872

3,041

3,136

3,340

3,655

(million yen)

2,311

2,494

2,556

2,744

2,946

Operating income(million yen)

3,087

3,047

3,349

3,606

4,309

Ordinary income(million yen)

2,517

2,560

2,782

3,073

3,528

Net income(million yen)

2,516

2,559

2,781

3,073

3,527

Total assets(million yen)

193,316

193,488

208,766

209,259

259,155

(%)

(7.9)

(0.1)

(7.9)

(0.2)

(23.8)(million yen)

95,753

95,803

103,455

103,224

127,127

(%)

(7.4)

(0.1)

(8.0)

(-0.2)(23.2)

Interest-bearing debt

(million yen)

89,64089,64096,84096,840123,140

Unitholders’ capital(million yen)

59,115

59,115

66,123

66,12389,316

Total number of investment units issued
and outstanding(units)1,789,389

1,789,389

1,921,689

1,921,689

2,372,000

Net assets per unit

(yen)

53,51153,53953,83553,71553,595(million yen)

2,644

2,641

2,865

3,047

3,614

Operating expenses
Operating expenses from real estateleasing[Period-on-period variation]
Net assets[Period-on-period variation]

Total cash distributions

(yen)

1,478

1,476

1,491

1,586

1,524

Cash distributions of earnings per unit

(yen)

1,478

1,476

1,491

1,586

1,524

Cash distributions in excess of earnings
per unit

(yen)

–

–

–

–

–

Ratio of ordinary income to total assets (Note 3)

(%)

1.4

1.3

1.4

1.5

1.5

[Annualized]

(%)

(2.7)

(2.7)

(2.7)

(3.0)

(3.0)

Return on equity (Note 3)

(%)

2.7

2.7

2.8

3.0

3.1

(%)

(5.4)

(5.4)

(5.5)

(6.0)

(6.1)

(%)

49.5

49.5

49.6

49.3

49.1

(-0.2)(-0.0)(0.0)(-0.2)(-0.3)

(%)

105.1

103.2

103.0

99.2

102.5

(days)

184

181

184

181

184

Cash distributions per unit

[Annualized]
Equity ratio at end of period(Note 3)

[Period-on-period variation]
Cash distribution payout ratio (Note 3)(Note 2) Unless otherwise specifically noted, amounts are rounded down to the unit displayed and percentages are rounded to the first decimal place.
(Note 3) It is calculated based on the following formula.
Ratio of ordinary income
Ordinary income ÷ {(total assets at beginning of period + total assets at end of period) ÷ 2} × 100
to total assets
Return on equity

Net income ÷ {(net assets at beginning of period + net assets at end of period) ÷ 2} × 100

Equity ratio at end of
periodNet assets at end of period ÷ total assets at end of period × 100

Cash distributions per unit (excluding cash distributions in excess of earnings) ÷ net income per unit × 100
Cash distribution payout The figures for the 12th, 14th, and 16th fiscal periods were calculated based on the formula below as
ratio
investment units outstanding changed during the period as a result of a public offering of investment units.
Total cash distributions (excluding cash distributions in excess of earnings) ÷ net income × 100
Lease NOI(Net Operating Income)Operating revenue from real estate leasing - operating expenses from real estate leasing + depreciation

FFO(Funds from Operation)

Net income + Depreciation - gain (loss) on sales of real estate

FFO per unit

FFO ÷ total number of investment units issued and outstanding[Other reference information]
Number of operating days
Number of properties at end of period(properties)

60

60

63

62

71

Depreciation(million yen)

682

697

743

763

963

(million yen)

424

471

605

787

1,107

(million yen)

4,261

4,263

4,650

4,521

5,542

(million yen)

3,199

3,257

3,525

3,422

4,116

(yen)

1,787

1,820

1,834

1,780

1,735

(%)

46.4

46.3

46.4

46.3

47.5

Capital expenditures
Lease NOI (Net Operating Income)(Note 3)

FFO (Funds from Operation) (Note 3)
FFO per unit

(Note 3)

Ratio of interest-bearing debt to total
assets at end of period (LTV)89Financial Statements

Balance Sheet(Unit: thousand yen)		

(Unit: thousand yen)

15th fiscal period

16th fiscal period

15th fiscal period

16th fiscal period(As of July 31, 2023)(As of January 31, 2024)(As of July 31, 2023)(As of January 31, 2024)

AssetsLiabilities

Current assets

Current liabilities

Cash and deposits

3,262,429

2,466,478

Operating accounts payable

Cash and deposits in trust

8,525,306

9,186,964

Short-term borrowings

Operating accounts receivable

139,180

319,557

Prepaid expenses

197,986

276,610–

1,245,234

14,462

18,498

Income taxes payable

12,139,365

13,513,345

Consumption taxes receivable
OthersTotal current assets
Non-current assets

Accumulated depreciation
Tools, furniture and fixtures, net
Buildings in trust

983,908–1,300,000

14,340,000

13,285,000

Accounts payable - other534,593664,966

Accrued expenses

75,324

96,918605

605

Current portion of long-term borrowings

Accrued consumption taxes

252,695

48,4081,236,897

1,028,917

35,505

26,846

17,471,301

17,435,570

Investment corporation bonds

1,000,000

1,000,000

81,500,000

107,555,000

4,179

4,053

5,965,643

5,915,288

Advances received

Property, plant and equipment
Tools, furniture and fixtures

995,681

Others
114

114

(114)

(114)

0

0

Total current liabilities
Non-current liabilities

56,821,886

72,991,822

Long-term borrowings

Accumulated depreciation(6,898,692)(7,735,645)

Leasehold and guarantee deposits received

Buildings in trust, net

49,923,193

65,256,177

Leasehold and guarantee deposits received in trust

Structures in trust

25,74437,679Asset retirement obligations

Accumulated depreciation(7,577)(8,703)

Others

Structures in trust, net

18,16628,975

Total non-current liabilities

Machinery and equipment in trust

251,570

306,175

Accumulated depreciation(44,740)(58,216)

Machinery and equipment in trust, net

206,829

247,958

Tools, furniture and fixtures in trust

139,432

150,147

Unitholders’ capital

Accumulated depreciation(48,732)(54,677)

SurplusTools, furniture and fixtures in trust, net

90,69995,470139,857,495

169,768,470

33,095

170

190,129,480

235,397,221

Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust

4,082,300

6,251,893

Total intangible assets

4,082,300

6,251,893

1,588,015

1,588,015

Investment securities

740,000

1,170,000

Long-term prepaid expenses

331,220542,728

Leasehold and guarantee deposits

10,35910,239Leasehold and guarantee deposits in trust–

263,988

191,122343,2282,860,717

3,918,199

197,072,498

245,567,314

Investment corporation bond issuance costs

10,543

9,522

Investment unit issuance costs

36,75865,149Total deferred assets

47,301

74,672

209,259,165

259,155,332

OthersTotal investments and other assets
Total non-current assets

98,96918,82588,563,401

114,592,137

106,034,702

132,027,707

66,123,367

89,316,185

25,132,218

25,132,218*2 8,535,586*2 8,446,674

Net assets
Unitholders’ equity

Unitholders’ capital surplus
Voluntary reserve
Reserve for temporary difference adjustment

8,535,586

8,446,674

Unappropriated retained earnings (undisposed loss)

Total voluntary reserve

3,340,372

3,909,364

Total surplus

37,008,177

37,488,257

103,131,545

126,804,443

92,917323,181

Total unitholders’ equity
Valuation and translation adjustments

Investments and other assets
Investments in other securities of subsidiaries and associates

Total liabilities–
93,578Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

92,917323,181*1 103,224,463*1 127,127,624

209,259,165

259,155,332

Deferred assets

Total assets
10

11

Financial Statements

Financial Statements

Statement of Income and Retained Earnings

Statement of Changes in Unitholders’ Equity(Unit: thousand yen)

15th fiscal period (from February 1, 2023 to July 31, 2023)(Unit: thousand yen)

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)*1 6,048,231*1 7,077,860

Other lease business revenue

1* 454,964* 447,056

Gain on sale of real estate* 414,166* 374,516

29,56465,436

6,946,926

7,964,869* 2,744,572* 2,946,506

Asset management fee

418,486

512,727

Asset custody and administrative service fees

42,39548,711

Directors’ compensations

2,400

2,400

Other operating expenses

132,242

144,769

Total operating expenses

3,340,096

3,655,114

3,606,830

4,309,754

53

58

1,046

1,583

Subsidy income

504–

Interest on refund

315

–

1,918

1,642

Operating revenue
Rental revenue

Other revenue
Total operating revenue
Expenses related to rent business

Operating income

1

Non-operating income
Interest income
Reversal of unpaid distributions

Total non-operating income
Non-operating expenses
Interest expenses

377,649

463,491

3,500

3,500

140,125

294,089

Amortization of investment corporation bond issuance costs

1,020

1,020

Amortization of investment unit issuance costs

12,611

20,812

Total non-operating expenses

534,906

782,913

Ordinary income

3,073,841

3,528,484

Income before income taxes

3,073,841

3,528,484

Income taxes - current

605

605

Total income taxes

605

605

3,073,236

3,527,879

267,135

381,485

3,340,372

3,909,364

Interest expenses on investment corporation bonds
Borrowing related expenses

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

12

Voluntary reserve
Unitholders’capital2Operating expenses
1

Surplus

1

2

Valuation andtranslation
adjustments

Unitholders’ equity

Balance at
beginning of
the period

Unitholders’ Reserve forcapitaltemporarysurplusdifference
adjustment

66,123,367 25,132,218

8,624,499

Total
voluntary
reserve

8,624,499

Unappropriatedretainedearnings(undisposed
loss)

Total
unitholders’equityTotal
surplus3,043,461 36,800,179 102,923,546

Total
Deferred valuation
gains orandlosses on translation
hedgesadjustments

Total net
assets531,551

103,455,098

531,551

Changes of
items during
the period

Dividends
fromsurplus
Reversal ofreserve fortemporarydifference
adjustment(88,912)(88,912)Net income(2,865,238)(2,865,238)(2,865,238)(2,865,238)

88,912–––

3,073,236

3,073,236

3,073,236

3,073,236

Net changesof items
other thanunitholders’equityTotal changesof items during
the period––(88,912)(88,912)

Balance at end 1* 66,123,367
of the period

25,132,218

8,535,586

8,535,586(438,633)(438,633)(438,633)

207,998(438,633)(438,633)(230,635)

3,340,372 37,008,177 103,131,545

92,917

92,917103,224,463

296,910

207,998

13

Financial Statements

Financial Statements

Statement of Changes in Unitholders’ Equity

Statement of Cash Distributions

16th fiscal period (from August 1, 2023 to January 31, 2024)(Unit: yen)

15th fiscal period

16th fiscal period(From February 1, 2023 to July 31, 2023)(From August 1, 2023 to January 31, 2024)

Unappropriated retained earnings

3,340,372,051

3,909,364,877

II. Reversal of voluntary reserve
Reversal of reserve for temporary
difference adjustment *1

88,912,365

88,912,365

3,047,798,754(1,586)
3,047,798,754(1,586)

3,614,928,000(1,524)
3,614,928,000(1,524)

IV. Retained earnings carried forward

381,485,662

383,349,242

Method of calculation of amount ofcash distributions

Pursuant to the cash distribution policy
provided in Article 35, Paragraph 1 of
SAR’s Articles of Incorporation, SAR
shall distribute in excess of the amountequivalent to 90% of the amount of
distributable earnings of SAR as definedin Article 67-15, Paragraph 1 of the Act
on Special Measures Concerning
Taxation. In accordance with suchpolicy, concerning cash distribution of
earnings (not including cash distribution
in excess of earnings), the decision wasmade to distribute 3,047,798,754 yen,which is equivalent to the sum of theamount remaining after reserving
114,350,316 yen from net income andthe amount of reversal of reserve fortemporary difference adjustment of
88,912,365 yen.

Pursuant to the cash distribution policy
provided in Article 35, Paragraph 1 of
SAR’s Articles of Incorporation, SAR
shall distribute in excess of the amountequivalent to 90% of the amount of
distributable earnings of SAR as definedin Article 67-15, Paragraph 1 of the Act
on Special Measures Concerning
Taxation. In accordance with this policy,
concerning the cash distribution of
earnings (not including cash distribution
in excess of earnings), the decision wasmade to distribute 3,614,928,000 yen,which is the integral multiple of the total
number of investment units issued andoutstanding and the sum of net income
and the amount of reversal of reserve
for temporary difference adjustment of
88,912,365 yen.

(Unit: thousand yen)

Valuation andtranslation
adjustments

Unitholders’ equity

I.

Surplus

Unitholders’capitalBalance at
beginning of
the period

Voluntary reserve
Unitholders’capitalReserve forsurplustemporarydifference
adjustment

66,123,367 25,132,218

8,535,586

Total
voluntary
reserve
8,535,586

Unappropriatedretainedearnings(undisposed
loss)

Total
unitholders’equityTotal
surplus3,340,372 37,008,177 103,131,545

Total
Deferred valuation
gains orandlosses on translation
hedgesadjustments

92,917

92,917

Total net
assets103,224,463

Changes of
items during
the period

Issuance of
new investment units

23,192,817

Dividends
from surplus
Reversal ofreserve fortemporarydifference
adjustment(88,912)(88,912)Net income

23,192,817

23,192,817(3,047,798)(3,047,798)(3,047,798)(3,047,798)

88,912–––

3,527,879

3,527,879

3,527,879

3,527,879

Net changesof items
other thanunitholders’equityTotal changesof items during
the period
Balance at
end of theperiod14

23,192,817–(88,912)(88,912)*1 89,316,185 25,132,218

8,446,674

8,446,674

230,263

230,263

230,263

23,672,898

230,263

230,263

23,903,161

3,909,364 37,488,257 126,804,443

323,181

323,181

127,127,624

568,992

480,080

III. Cash distribution[Cash distribution per unit]
Cash distribution of earnings[Cash distribution of earnings per unit]

15

Financial Statements

Financial Statements

Statement of Cash Flows

Notes to Financial Statements(Unit: thousand yen)

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

Organization
Star Asia Investment Corporation (SAR) was established as a diversified real estate investment trust on
December 1, 2015, under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as
amended). It was listed on the Tokyo Stock Exchange Real Estate Investment Trust Section on April 20, 2016

Cash flows from operating activities
3,073,841

3,528,484(securities code: 3468). SAR has assigned the asset management of its portfolio to Star Asia Invest

763,353

963,602

Management Co., Ltd., a financial instruments business operator under the Financial Instruments andAmortization of investment corporation bond issuance costs

1,020

1,020

Amortization of investment unit issuance costs

12,611

20,812(53)(58)

381,149

466,991

8,532(180,377)

Income before income taxes
Depreciation

Interest income
Interest expenses
Decrease (increase) in operating accounts receivable

Exchange Act (Act No. 25 of 1948, as amended), through which SAR has been executing active management,
aiming to maximize the interests of unitholders and striving to expand its asset size and increase distributions
per unit. The asset size as of the 16th fiscal period (January 31, 2024) is 243,871 million yen.

Decrease (increase) in consumption taxes receivable

181,189(1,245,234)

Increase (decrease) in accrued consumption taxes

205,289(204,286)

Decrease (increase) in prepaid expenses

13,262(78,623)

SAR has prepared the financial statements attached hereto in accordance with the accounting principles

Decrease (increase) in long-term prepaid expenses(297)(211,507)

generally accepted in Japan (J-GAAP). J-GAAP differs from international accounting standards in the specific

Increase (decrease) in operating accounts payable(42,522)

101,183

details of accounting and disclosure standards.
The financial statements attached hereto are a translation of audited financial statements prepared from SAR’s

Increase (decrease) in accounts payable - other(4,176)

104,651

Increase (decrease) in advances received

217,372(207,980)

Decrease in property, plant and equipment in trust due to sale

688,594

2,670,427(9,408)(8,731)

5,489,759

5,720,373

53

58(383,278)(445,423)

1,406

(616)

5,107,940

5,274,392(698,358)(48,883,791)–(2,176,621)(1,701)(126)

Repayments of leasehold and guarantee deposits received in trust(130,365)(294,990)

Proceeds from leasehold and guarantee deposits received in trust

255,855

244,635–

120

OthersSubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities

Basis of Presentationaccounting records and submitted to the Kanto Local Finance Bureau as per the Financial Instruments andExchange Act for domestic disclosure.
Certain notes are added to the financial statements published in Japan to facilitate the understanding foroverseas readers.
SAR’s fiscal periods are six months ending January 31 and July 31 every year.
Since SAR has no subsidiaries, no consolidated financial statements are prepared.

Cash flows from investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust
Repayments of leasehold and guarantee deposits received

Proceeds from refund of leasehold and guarantee deposits
Payments of leasehold and guarantee deposits in trust–(263,988)(1,578,073)–(340,000)(430,000)–(10)(2,492,642)(51,804,771)–

1,300,000

Proceeds from long-term borrowings

10,790,000

29,840,000

Repayments of long-term borrowings(10,790,000)(4,840,000)

Purchase of investments in other securities of subsidiaries and associates
Purchase of investment securities
OthersNet cash used in investing activities

Notes on the Going Concern Assumption
Not applicable.

Cash flows from financing activities
Proceeds from short-term borrowings

Proceeds from issuance of investment units–

23,143,614

Dividends paid

(2,866,153)(3,047,528)

Net cash provided by (used in) financing activities(2,866,153)

46,396,086

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

16(250,855)(134,292)

12,038,591

11,787,736*1 11,787,736*1 11,653,443

17Financial Statements
Notes to Financial Statements

Notes on Matters Relating to Significant Accounting Policies
1. Evaluation standards and methods of valuation of securities(1) Investments in other securities of subsidiaries and associates
Cost method through moving-average method(2) Other securities(2) Standards for recording revenue
The details of main performance obligations concerning revenue generated from contracts between SAR
and its customers and the ordinary time to fulfil said performance obligations (ordinary time to recognize
revenue) are as follows.
1) Sale of real estate For revenue from sale of real estate, SAR records revenue when the purchaser who is a customer

Those with market priceobtains control of the relevant real estate as a result of the seller fulfilling its delivery obligations

Fair value method or market value method (Variances are directly included in net assets.)

stipulated in the transaction agreement of the real estate.

2. Method of depreciation of non-current assets(1) Property, plant and equipment (including trust assets)

2) Utilities income SAR records utilities income in accordance with the supply of electricity and water, etc. to the lessee
who is a customer based on the lease agreement of real estate and details of agreements incidental to it.

The straight-line method is adopted.

Of the utilities income, in the case that SAR deems itself to be an agent, the net amount obtained by

The useful life of primary property, plant and equipment is as follows:

deducting the amount it pays to other parties from the amount it receives as charges for electricity and

Buildings 2-70 years
Structures 7-30 years
Machinery and equipment 7-17 years
Tools, furniture and fixtures 2-15 years(2) Intangible assets (including trust assets)
The straight-line method is adopted.
Fixed-term land leasehold is amortized using the straight-line method over the remaining period.

3. Accounting for deferred assets(1) Investment unit issuance costs
Investment unit issuance costs are amortized by the straight-line method over 3 years.
(2) Investment corporation bond issuance costsgas, etc. supplied by the said other parties is recognized as revenue.

5. Hedge accounting approach(1) Hedge accounting approach
Deferral hedge accounting is adopted.
(2) Hedging instruments and hedged items
Hedging instruments: Interest rate swap transaction
Hedged items: Interest on loans(3) Hedging policy
SAR conducts derivative transactions for the purpose of hedging the risks provided in its Articles ofIncorporation pursuant to basic rules on risk management.
(4) Method of assessing the effectiveness of hedging

Investment corporation bond issuance costs are amortized by the straight-line method over the period

The effectiveness of hedging is assessed by comparing the cumulative change in cash flows of the hedging

through redemption.

instruments with the cumulative change in cash flows of the hedged items and verifying the ratio of the

4. Revenue and expense recognition(1) Accounting for fixed property tax, etc.
Accounting for fixed property tax, city planning tax, depreciable asset tax, etc. (“fixed property tax, etc.”) on
real estate or beneficiary interest in trust for real estate held is that the amount corresponding to the fiscal
period out of the tax amount assessed and determined is expensed as expenses related to lease business.
The amount equivalent to fixed property tax, etc. in the initial fiscal year borne by SAR upon acquisition ofreal estate or beneficiary interest in trust for real estate is not recorded as expenses but included in the costof acquisition of the concerned real estate, etc. In the fiscal period under review, the amount equivalent to
fixed property tax, etc. included in the cost of acquisition of real estate, etc. is 63,569 thousand yen.

amount of change in the two.

6. Scope of funds in the statement of cash flows (cash and cash equivalents)
The funds (cash and cash equivalents) in the statement of cash flows comprise cash on hand and cash in trust,demand deposits and deposits in trust, and short-term investments with a maturity of three months or less fromthe date of acquisition that are readily convertible to cash and that are subject to an insignificant risk of changes
in value.

7. Other matters serving as the basis for preparation of financial statements(1) Accounting for beneficiary interest in trust for real estate, etc.
Concerning beneficiary interest in trust for real estate, etc. held, all accounts of assets and liabilities withintrust assets as well as all accounts of revenue and expenses from the trust assets are recognized in therelevant account item of the balance sheet and the statement of income and retained earnings.

18

19

Financial Statements
Notes to Financial Statements

The following material items of the trust assets recognized in the relevant account item are separately listedon the balance sheet.

Notes on the Statement of Income and Retained Earnings*1 Breakdown of operating income from real estate leasing

1) Cash and deposits in trust(Unit: thousand yen)2) Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture and fixtures in

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

5,232,657

6,268,199

Common area maintenance revenue

570,304

561,698

Parking revenue

206,214208,004

Facility use revenue

31,80733,406

Other rental revenue

7,247

6,551

6,048,231

7,077,860

Utilities income

358,375

351,432

Other revenue

96,58895,624454,964

447,056

6,503,195

7,524,917

Management fee

452,917454,790

Utilities expenses

389,316

372,542

Taxes and dues

493,000

490,171

Repair expenses

308,817319,629

Trust fee

30,653

28,668Insurance premium

13,322

15,314

Depreciation

763,353

963,602

Other expenses

293,190

301,786

2,744,572

2,946,506

3,758,623

4,578,410

trust; Land in trust; Construction in progress in trust3) Leasehold rights in trust

A. Operating revenue from real estate leasing4) Leasehold and guarantee deposits in trust

Rental revenue5) Leasehold and guarantee deposits received in trust

Rental revenue(2) Accounting for consumption taxes   Non-deductible consumption tax on acquisition of assets is included in the acquisition cost of each asset.

Notes on the Balance Sheet

Total

*1 M
 inimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts
and Investment Corporations(Unit: thousand yen)

15th fiscal period (As of July 31, 2023)

16th fiscal period (As of January 31, 2024)

50,00050,00015th fiscal period (As of July 31, 2023)(Unit: thousand yen)

Gain onnegativegoodwill (Note)(Note)

8,891,236

8,624,499

Reserveduring theperiodReversalduring theperiodBalance at
end of theperiodReasons for provisionand reversal–

88,9128,624,499

Appropriate for distribution

Gain on negative goodwill indicates the amount of provision of gain on negative goodwill recorded in the past fiscal period, andwill be reversed in equal amount or more over 50 years or less every fiscal period starting from the 12th fiscal period, which is theperiod following the fiscal period in which the provision was made.

(Unit: thousand yen)

Gain onnegativegoodwill (Note)(Note)

20

Total operating revenue from real estate leasing
Expenses related to rent businessTotal operating expenses from real estate leasing
C. Operating income (loss) from real estate leasing [A—B]*2 Breakdown of gain (loss) on sale of real estate

16th fiscal period (As of January 31, 2024)
Balance at
Initial amount beginning of
the period

Total
B. Operating expenses from real estate leasing*2 Matters on provision and reversal of reserve for temporary difference adjustment

Balance at
Initial amount beginning of
the period

Other lease business revenue

Reserveduring theperiodReversalduring theperiodBalance at
end of theperiodReasons for provisionand reversal

15th fiscal period (from February 1, 2023 to July 31, 2023)(Unit: thousand yen)

Funabashi Hi-Tech Park Factory II
Proceeds from sale of real estate

8,891,236

8,535,586–

88,9128,446,674

Appropriate for distribution

Gain on negative goodwill indicates the amount of provision of gain on negative goodwill recorded in the past fiscal period, andwill be reversed in equal amount or more over 50 years or less every fiscal period starting from the 12th fiscal period, which is theperiod following the fiscal period in which the provision was made.

1,150,000

Cost of sale of real estate

688,594

Other sales expenses

47,239Gain on sale of real estate

414,166

21

Financial Statements
Notes to Financial Statements

Notes on the Statement of Cash Flows

16th fiscal period (from August 1, 2023 to January 31, 2024)(Unit: thousand yen)*1	Reconciliation of cash and cash equivalents at end of period to the amount of balance
sheet items

Urban Park Gokokuji
Proceeds from sale of real estate

1,800,000

Cost of sale of real estate

1,488,569

Other sales expenses

46,106

Gain on sale of real estate

265,324(Unit: thousand yen)

Urban Park Koenji
Proceeds from sale of real estate

1,315,000

Cost of sale of real estate

1,181,858

Other sales expenses

23,950Gain on sale of real estate

109,191

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

Cash and deposits

3,262,429

2,466,478

Cash and deposits in trust

8,525,306

9,186,964

Cash and cash equivalents

11,787,736

11,653,443

Notes on Lease Transactions
Operating leases (as lessee)

Notes on the Statement of Unitholders’ Equity

Future minimum lease payments(Unit: thousand yen)*1	Total number of investment units authorized and total number of investment units issued
and outstanding

15th fiscal period

16th fiscal period(As of July 31, 2023)(As of January 31, 2024)

15th fiscal period

16th fiscal period

Not later than 1 year–

173,606(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

Later than 1 year–

6,358,578

Total number of investment units authorized

10,000,000 units

10,000,000 units

Total

–

6,532,184

Total number of investment units issued and outstanding

1,921,689 units

2,372,000 units

Operating leases (as lessor)
Future minimum lease payments(Unit: thousand yen)

Notes on the Statement of Cash Distributions
15th fiscal period

16th fiscal period(From February 1, 2023 to July 31, 2023)(From August 1, 2023 to January 31, 2024)*1 Reserve for temporary difference adjustment
SAR provided 8,891,236 thousand yen as reserve fortemporary difference adjustment in the 10th fiscal period.
From the 11th fiscal period, SAR plans to reverse thesame amount or more in each fiscal period over a periodof up to 50 years. In the fiscal period under review, SAR
decided to reverse 88,912 thousand yen.

*1 Reserve for temporary difference adjustment
SAR provided 8,891,236 thousand yen as reserve for temporary difference adjustment in the 10th fiscal period. Fromthe 11th fiscal period, SAR plans to reverse the sameamount or more in each fiscal period over a period of up to
50 years. In the fiscal period under review, SAR decided toreverse 88,912 thousand yen.

15th fiscal period

16th fiscal period(As of July 31, 2023)(As of January 31, 2024)

Not later than 1 year

5,715,787

6,246,687

Later than 1 year

9,733,645

22,516,811

Total

15,449,432

28,763,498

Notes on Financial Instruments
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
SAR shall procure funds to allocate to acquisition of real estate related assets, repayment of interest-bearing
liabilities, etc. through mainly issuance of investment units, borrowing from financial institutions, issuance ofinvestment corporation bonds, etc. Upon procuring funds through interest-bearing liabilities, dueconsideration shall be given to fund procurement agility and financial stability.
(2) Description of financial instruments and associated risks, and risk management system
The funds procured through loans, which shall be for the purpose of mainly acquisition of assets, areexposed to liquidity risk until the repayment date, but the concerned risks are managed by taking suchmeasures as lengthening the procurement periods and staggering the maturities. In addition, borrowings

22

23

Financial Statements
Notes to Financial Statementswith floating interest rates are exposed to interest rate fluctuation risk, but derivative transactions (interest

15th fiscal period (As of July 31, 2023)(Unit: thousand yen)rate swap transactions) are utilized as hedging instruments to, in effect, convert interest rates to fixed rates
in order to mitigate that risk. For the hedge accounting approach, hedging instruments, hedged items,

Not later
than 1 year

hedging policy and method of assessing the effectiveness of hedging, please refer to “5. Hedge accounting
approach” described under “Notes on Matters Relating to Significant Accounting Policies” earlier in thisInvestment corporation bonds

document.
(3) Supplementary explanation to matters relating to fair value, etc. of financial instruments

Later than
Later than
Later than
Later than
1 year and2 years and3 years and4 years andnot later than not later than not later than not later than
2 years
3 years
4 years
5 years

Later than
5 years

–

–

–

–

–

1,000,000

Long-term borrowings

14,340,000

11,085,000

20,910,000

19,965,000

19,490,000

10,050,000

Total

14,340,000

11,085,000

20,910,000

19,965,000

19,490,000

11,050,000

16th fiscal period (As of January 31, 2024)

Not applicable.

(Unit: thousand yen)

2. Matters concerning fair value, etc. of financial instruments

Not later
than 1 year

The carrying amount, fair value and the amount of difference between them are as follows. Because “cash anddeposits,” “cash and deposits in trust” and “short-term borrowings” are cash and settled in a short period of

Investment corporation bonds

time and the fair values approximate the book values accordingly, notes on these matters are omitted.
15th fiscal period (As of July 31, 2023)

Later than
Later than
Later than
Later than
1 year and2 years and3 years and4 years andnot later than not later than not later than not later than
2 years
3 years
4 years
5 years

Later than
5 years

–

–

–

–

1,000,000–

Long-term borrowings

13,285,000

19,150,000

20,275,000

21,650,000

21,680,000

24,800,000

Total

13,285,000

19,150,000

20,275,000

21,650,000

22,680,000

24,800,000(Unit: thousand yen)

Carrying amount

Fair value

Difference(1) Current portion of long-term borrowings

14,340,000

14,340,000–(2) Investment corporation bonds

1,000,000

990,900(9,100)(3) Long-term borrowings

81,500,000

81,455,187(44,812)

Liabilities total

96,840,000

96,786,087(53,912)92,917

92,917–(4) Derivative transactions (*)(*)

15th fiscal period (As of July 31, 2023)
Notes are omitted because they lack significance.
16th fiscal period (As of January 31, 2024)
Notes are omitted because they lack significance.

Assets and liabilities arising from derivative transactions are offset and presented in the net amount, with the balance shown in parentheses ( ) when in a net liability position.

Notes on Derivative Transactions

16th fiscal period (As of January 31, 2024)(Unit: thousand yen)

Carrying amount

Fair value

Difference(1) Current portion of long-term borrowings

13,285,000

13,285,000–(2) Investment corporation bonds

1,000,000

989,600(10,400)

107,555,000

107,482,716(72,283)

121,840,000

121,757,316(82,683)

323,181

323,181–(3) Long-term borrowings
Liabilities total(4) Derivative transactions *

( )

(*)

Notes on Securities

Assets and liabilities arising from derivative transactions are offset and presented in the net amount, with the balance shown in parentheses ( ) when in a net liability position.

1. Derivative transactions to which hedge accounting is not applied
15th fiscal period (As of July 31, 2023)
Not applicable.
16th fiscal period (As of January 31, 2024)
Not applicable.

2. Derivative transactions to which hedge accounting is applied
The following is the contract amount or the amount equivalent to the principal provided in the contract as of thedate of settlement of accounts for each hedge accounting approach.

(Note 1) Method of calculation of the fair value of financial instruments

15th fiscal period (As of July 31, 2023)(1) Current portion of long-term borrowings (3) Long-term borrowings		Of these, the fair values of those with fixed interest rates are calculated by the present value obtained by discounting the total
principal and interest by the rate expected when similar funds are additionally borrowed in correspondence with the remaining
term. Since those with floating interest rates are under terms and conditions that interest rates be renewed every set period oftime, the fair values are approximately the same as the book value, and thus such are used.
(2) Investment corporation bonds
		The refence value announced by Japan Securities Dealers Association is stated.

(4) Derivative transactions
		

Please refer to “Notes on Derivative Transactions” later in this document.

(Note 2) Amount of repayment of investment corporation bonds and loans to be due after the date of settlement of accounts

24(Unit: thousand yen)

Hedge accounting
approachPrinciple method of
accounting

Type, etc. of derivativetransaction

Contract amount, etc. (Note 1)
Main hedged item

Interest rate swap transaction
Long-term(floating receivable; fixedborrowings
payable)Of which, later
than 1 year
82,305,000

68,965,000

Fair value(Note 2)

92,917(Note 1) Contract amount, etc. are based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

25

Financial Statements
Notes to Financial Statements

Notes on Share of Profit or Loss of Entities Accounted for Using Equity Method, etc.

16th fiscal period (As of January 31, 2024)(Unit: thousand yen)

Hedge accounting
approachPrinciple method of
accounting

Type, etc. of derivativetransaction

Contract amount, etc. (Note 1)
Main hedged item

Interest rate swap transaction
Long-term(floating receivable; fixedborrowings
payable)Of which, later
than 1 year
77,465,000

68,965,000

Fair value

15th fiscal period (As of July 31, 2023)
Notes are omitted because they lack significance.

(Note 2)16th fiscal period (As of January 31, 2024)
323,181

Notes are omitted because they lack significance.

Notes on Related-Party Transactions(Note 1) Contract amount, etc. are based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

1. Parent company, major corporate unitholders, etc.
15th fiscal period (from February 1, 2023 to July 31, 2023)

Notes on Retirement Benefits

Not applicable.

15th fiscal period (As of July 31, 2023)

16th fiscal period (from August 1, 2023 to January 31, 2024)

Not applicable.

Not applicable.

16th fiscal period (As of January 31, 2024)

2. Affiliated companies, etc.

Not applicable.

15th fiscal period (from February 1, 2023 to July 31, 2023)
Not applicable.

Notes on Tax-Effect Accounting
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities(Unit: thousand yen)

Deferred tax assets
Valuation adjustment upon merger
Leasehold interests in land
Acquisition cost of securities
Asset retirement obligations
Deferred gains or losses on hedges
Deferred tax assets, subtotal
Valuation allowance
Deferred tax assets, total
Deferred tax assets, net

15th fiscal period

16th fiscal period(As of July 31, 2023)(As of January 31, 2024)

1,090,958–
3,030–
30,895
1,124,884(1,124,884)––

1,069,936
2,211
4,518
31,135
6,303
1,114,105(1,114,105)––

2.	Breakdown of major components that caused any significant differences between thestatutory tax rate and the effective income tax rate after application of tax-effect accounting(Unit: %)Statutory tax rate

15th fiscal period

16th fiscal period(As of July 31, 2023)(As of January 31, 2024)

31.46

31.46

16th fiscal period (from August 1, 2023 to January 31, 2024)
Not applicable.

3. Fellow subsidiaries, etc.
15th fiscal period (from February 1, 2023 to July 31, 2023)
Not applicable.
16th fiscal period (from August 1, 2023 to January 31, 2024)
Not applicable.

4. Directors, major individual unitholders, etc.
15th fiscal period (from February 1, 2023 to July 31, 2023)(Unit: thousand yen)Type

Name ofcompany,
etc. orpersonDirector,or close
relative of
director

Atsushi
Kato

Address–

CapitalPercentage of
Description ofstock orvoting rights, Description Transaction Accountbusiness orinvestments
etc. held by of transaction
amountitem
occupationin capital(in) SAR–

Executive
Director of SAR,
and President
and CEO of theAsset Manager

0.03%

Payment ofasset management fee
to the AssetManager (Note 1)

445,612(Note 2)
(Note 3)

Accounts
payable– others

Balance at
end of theperiod456,595(Note 2)

[Adjustments]

26

Deductible distributions payable(31.19)(31.14)

Reversal of excess depreciation(0.90)(0.40)

Others0.65

0.09

Effective income tax rate after application of tax-effect accounting

0.02

0.02

27

Financial Statements
Notes to Financial Statements

Notes on Investments in Rental Properties

16th fiscal period (from August 1, 2023 to January 31, 2024)(Unit: thousand yen)Type

Director,or close
relative of
director

Name ofcompany,
etc. orpersonAtsushi
Kato

CapitalPercentage of
Description ofstock orvoting rights, Description Transaction Account
Address
business orinvestments
etc. held by of transaction
amountitem
occupationin capital(in) SAR––

Executive
Director of SAR,
and President
and CEO of theAsset Manager

0.03%

Payment ofasset management fee
to the AssetManager (Note 1)

794,310(Note 2)
(Note 3)

Accounts
payable– others

Balance at
end of theperiodSAR owns rental real estate, etc. for the purpose of earning revenue from leasing. The carrying amount, amountof increase (decrease) during the period and fair value of these investments in rental properties are as follows:(Unit: thousand yen)

564,000(Note 2)

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

194,843,394

194,178,685(664,708)

47,470,259

194,178,685

241,648,945

215,096,000

266,696,000

Carrying amount(Note 1) The transaction was conducted by Atsushi Kato as President and CEO of a third party (the Asset Manager), and the transaction
amount is based on the terms and conditions provided in the Articles of Incorporation of SAR.

Balance at beginning of the period
Amount of increase (decrease) during the period
Balance at end of the period(Note 2) Of the amounts above, the transaction amount does not include consumption tax, while the balance at the end of the period
includes consumption tax.

Fair value at end of the period(Note 3) The asset management fee for the 15th fiscal period includes the acquisition incentive portion included in the book value of preferred equity securities in the amount of 15,625 thousand yen and the transfer incentive portion for real estate, etc. in the amountof 11,500 thousand yen. The asset management fee for the 16th fiscal period includes the acquisition incentive portion includedin the book value of individual real estate, etc. in the amount of 250,433 thousand yen and the transfer incentive portion for realestate, etc. in the amount of 31,150 thousand yen.

Notes on Asset Retirement Obligations
1. Outline of the asset retirement obligations
SAR concluded a fixed-term subleasehold agreement for the land of its asset Best Western Plus Fukuoka
Tenjin-minami, and recognized asset retirement obligations in connection with the obligation to restore the site
to its original condition at the end of the sublease term.

(Note 1) Carrying amount is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) in investments in rental properties during the 15th fiscal period, the amount of increase ismainly attributable to capital expenditures (787,991 thousand yen), while the amount of decrease is mainly attributable to disposition of real estate beneficiary interest in trust of a property (688,594 thousand yen) and depreciation (763,353 thousand yen).
During the 16th fiscal period, the amount of increase is mainly attributable to the acquisition of real estate beneficiary interests intrust of 11 properties (49,825,623 thousand yen), capital expenditures (1,107,190 thousand yen, which includes 275,884 thousand yen for extension work), and the acquisition of leasehold interests for leased land of property held (171,477 thousand yen),while the amount of decrease is mainly attributable to the disposition of real estate beneficiary interests in trust of 2 properties(2,670,427 thousand yen) and depreciation (963,602 thousand yen).
(Note 3) Fair value at the end of the period is the appraisal value by an outside real estate appraiser. Of the fair value at the end of the 15th
fiscal period, that of Urban Park Gokokuji is based on the transfer price (1,800,000 thousand yen) stated in the trust beneficiaryinterest sale and purchase agreement dated March 16, 2023 and that of Urban Park Koenji is based on the transfer price(1,315,000 thousand yen) stated in the trust beneficiary interest sale and purchase agreement dated August 7, 2023.
Income (loss) from investments in rental properties is as stated in “Notes to the Statement of Income and Retained Earnings” earlier in thisdocument.

2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated using the expected period of use, which is estimated at 55 years

Notes on Revenue Recognition

from the expiration of the fixed-term subleasehold agreement, and a discount rate of 1.925%.

1. Breakdown information on revenue from contracts with customers

3. Changes in total asset retirement obligations(Unit: thousand yen)

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

Balance at beginning of period––

Increase due to purchases of property, plant and equipment–

98,187

Adjustment due to passage of time–782

Balance at end of the period–

98,96915th fiscal period (from February 1, 2023 to July 31, 2023)(Unit: thousand yen)

Revenue from contracts withcustomers (Note)

Sales to external customers

Proceeds from sale of real estate (Note 2)

414,166

414,166

Utilities income

358,375

358,375–

6,174,384

772,5426,946,926

Others
Total(Note 1) Rental revenue, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) are excluded from theabove amount as such revenue is not subject to the Revenue Recognition Accounting Standard. Revenue from contracts withcustomers mainly represents proceeds from sale of real estate and utilities income.
(Note 2) Proceeds from sale of real estate is recorded as gain on sale of property in the statement of income and retained earnings.
Therefore, the amount calculated by deducting the cost of sale of real estate and other sale expenses from the proceeds fromsale of real estate is indicated.

28

29

Financial Statements
Notes to Financial Statements

Notes on Segment Information

16th fiscal period (from August 1, 2023 to January 31, 2024)(Unit: thousand yen)

Revenue from contracts withcustomers (Note 1)

Sales to external customers

Segment information is omitted because SAR operates a single segment, which is the real estate leasing

Proceeds from sale of real estate (Note 2)

374,516

374,516

Utilities income

351,432

351,432–

7,238,921

725,948

7,964,869

Others
Total(Note 1) Rental revenue, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No.13) are excluded from theabove amount as such revenue is not subject to the Revenue Recognition Accounting Standard. Revenue from contracts withcustomers mainly represents proceeds from sale of real estate and utilities income.
(Note 2) Proceeds from sale of real estate is recorded as gain on sale of property in the statement of income. Therefore, the amount calculated by deducting the cost of sale of real estate and other sales expenses from the proceeds from sale of real estate is indicated.

business.

2. Related information
15th fiscal period (from February 1, 2023 to July 31, 2023)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single
product and service category are in excess of 90% of operating revenue on the statement of income andretained earnings.
(2) Information about geographic areas

2. Foundational information for understanding revenue from contracts with customers

1) Net sales

The information is as indicated in the Notes on Matters Relating to Significant Accounting Policies.

Information about net sales is omitted because net sales to external customers in Japan are in excess of

3. Information on relationship of fulfillment of performance obligations based on contracts
with customers with cashflow generated from said contracts and amount and period ofrevenue expected to be recognized in the next fiscal period or thereafter from contracts
with customers existing at the end of the current fiscal period.

90% of operating revenue on the statement of income and retained earnings.
2) Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant andequipment located in Japan is in excess of 90% of the amount of property, plant and equipment on the(1) Balance of contract assets and contract liabilities, etc.
(Unit: thousand yen)balance sheet.
(3) Information about each major customer

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

Receivables generated from contracts with customers(balance at beginning of the period)

87,85871,460Receivables generated from contracts with customers(balance at end of the period)

71,46062,199Contract assets (balance at beginning of the period)––

Information about products and services is omitted because net sales to external customers for a single

Contract assets (balance at end of the period)––

product and service category are in excess of 90% of operating revenue on the statement of income andContract liabilities (balance at beginning of the period)––

retained earnings.

Contract liabilities (balance at end of the period)––(2) Transaction value allocated to remaining performance obligations
Not applicable.
SAR does not include contracts whose terms are initially expected to be one year or less in the note ontransaction value allocated to remaining performance obligations as an expedient in practice. Also, with

Information about each major customer is omitted because all net sales to a single external customer areless than 10% of the operating revenue on the statement of income and retained earnings.
16th fiscal period (from August 1, 2023 to January 31, 2024)(1) Information about products and services(2) Information about geographic areas
1) Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of
90% of operating revenue on the statement of income and retained earnings.
2) Property, plant and equipment

regard to utilities income, as SAR has the right to receive from customers an amount directly corresponding

Information about property, plant and equipment is omitted because the amount of property, plant andto the value for the lessees who are customers of portions for which performance is complete by the end of

equipment located in Japan is in excess of 90% of the amount of property, plant and equipment on thethe fiscal period, the amount it has the right to claim according to Paragraph 19 of the Application

balance sheet.

Guidelines of the Accounting Standard for Revenue Recognition is recognized as revenue. Accordingly, suchis not included in the note on transaction value allocated to remaining performance obligations throughapplication of the provisions of Paragraph 80-22 (2) of the Accounting Standard for Revenue Recognition.

30

1. Segment information(3) Information about each major customer
Information about each major customer is omitted because all net sales to a single external customer areless than 10% of the operating revenue on the statement of income and retained earnings.

31

Financial Statements
Notes to Financial Statements

Supplementary Schedules

Notes on Per Unit Information

1. Schedule of securities(1) Stocks

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

Net assets per unit

53,715 yen

53,595 yen

Net income per unit

1,599

1,518

Not applicable.
(2) Securities other than stocks(Unit: thousand yen)

Total
face
value

Book
value

Star Asia Mezzanine
Corporate
Loan Debt Investment
bonds
Series 7

400,000

400,000

3,444

Star Asia Mezzanine
Loan Debt Investment
Series 8 Class A
Beneficial Interest–

430,000

3,922

Type

(Note 2) The basis for calculation of net income per unit is as follows:(Unit: thousand yen)

15th fiscal period

16th fiscal period(From February 1, 2023
to July 31, 2023)(From August 1, 2023
to January 31, 2024)

3,073,236

3,527,879––

Net income attributable to common invest-ment units

3,073,236

3,527,879

Average number of investment units during the period (units)

1,921,689

2,323,053

Net income
Amount not attributable to common uni-tholders

Notes on Significant Subsequent Events
Not applicable.

Prepaid
Accruedaccruedinterest
interest

Name of the security(Note 1) Net income per unit is calculated by dividing net income by the daily weighted average number of investment units. In addition,
diluted net income per unit is not stated, because there are no diluted investment units.

Trust
beneficiaryStar Asia Mezzanine
interest
Loan Debt Investment
Series 8 Class B
Beneficial Interest
Preferredequitysecurity

Fair value

Unrealized
gain or Remarks
loss–

400,000––

430,000–(Note 1)
(Note 4)(Note 2)
(Note 4)

GSA JP Project 1
Tokutei Mokuteki
Kaisha (TMK) Preferred
Equity Securities

Total

–

340,000

4,256–

340,000––

1,588,015––

1,789,139

201,123–

2,758,015

11,623–

2,959,139

201,123(Note 3)(Note 5)(Note 1) The underlying assets are trust beneficiary interests in a trust mainly comprised of Quintessa Hotel Tokyo Haneda Comic &Books.
(Note 2) The underlying assets are trust beneficiary interests in a trust mainly comprised of Centurion Hotel Grand Akasaka. Class A
beneficiary interests and Class B beneficiary interests were acquired on September 13, 2023, and February 20, 2023,
respectively.
(Note 3) The underlying assets are trust beneficiary interests in a trust mainly comprised of HAKUSAN HOUSE.
(Note 4) Because interest income etc. from mezzanine loan debt are based on floating interest rates, the fair value is approximately thesame as the acquisition cost and thus stated at that acquisition cost.
(Note 5) The fair value of preferred equity securities is the amount that is attributable to the equity held by SAR out of the net asset
value of the issuer of preferred equity securities based on the appraisal value of the underlying assets.

2.	Contracted amount, etc. and fair value of derivative transactions and forward exchangetransactions(Unit: thousand yen)Contract amount, etc.
Category

Type

Transaction other thanmarket transaction

Interest rate swap transaction(floating receivable; fixed payable)

Total(Note 1)

Of which, later
than 1 year

Fair value (Note 2)

77,465,000

68,965,000

323,181

77,465,000

68,965,000

323,181(Note 1) Contract amount, etc. of interest rate swaps are based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

32

33

3. Summary table of schedule of real estate

6. Schedule of borrowings
(Unit: thousand yen)Tools,
furniture and114–
fixtures
Buildings in
56,821,886 16,739,805
trust
Structures in
25,744
11,934trust
Property, Machinery
251,570
54,604
plant and and equipment in trust
equipment
Tools,
furniture and139,432
16,432
fixtures in trust
Land in trust 139,857,495 32,104,893
Constructionin progress
33,095–in trust
Subtotal
197,129,339 48,927,669
Leasehold4,082,300 2,176,621
Intangible
rights in trust
assetsSubtotal
4,082,300 2,176,621
Total
201,211,639 51,104,290(Note)

Balance at
end of theperiod–114

Accumulated depreNet balanceciation or accumuReat end of
lated amortization
marks
the period
For period
114

–

0

569,868 72,991,822 7,735,645

931,820

65,256,177

650,000–

650,000

Subtotal

0.2716%–1,300,000–

1,300,000

850,000–

850,000–

306,175

58,216

13,475247,958

Mizuho Bank, Ltd.

750,000–

750,000–

Sumitomo Mitsui
Trust Bank, Limited

700,000–

700,000–

Aozora Bank, Ltd.

500,000–

500,000–

150,147

54,677

10,152

95,470SBI Shinsei Bank,
Limited

600,000–

600,000–

Resona Bank,
Limited

500,000–

500,000–

The Bank ofFukuoka, Ltd.

240,000–

240,000–

Mizuho Trust &Banking Co., Ltd.

200,000–

200,000–

The Nishi-Nippon
City Bank, Ltd.

500,000–

500,000–

Sumitomo Mitsui
Banking
Corporation

2,200,000––

2,200,000

Mizuho Bank, Ltd.

2,050,000––

2,050,000

Sumitomo Mitsui
Trust Bank, Limited

1,250,000––

1,250,000

Aozora Bank, Ltd.

700,000––

700,000

SBI Shinsei Bank,
Limited

700,000––

700,000

Resona Bank,
Limited

700,000––

700,000(Unit: thousand yen)Mizuho Trust &Banking Co., Ltd.

400,000––

400,000

Collateral

Sumitomo Mitsui
Banking
Corporation

1,950,000––

1,950,000

Mizuho Bank, Ltd.

2,500,000––

2,500,000

Sumitomo Mitsui
Trust Bank, Limited

1,050,000––

1,050,000

Aozora Bank, Ltd.

600,000––

600,000

SBI Shinsei Bank,
Limited

600,000––

600,000

Resona Bank,
Limited

600,000––

600,000––

169,768,470

–

–

170

2,802,429 243,254,578 7,857,356

956,574

235,397,221

7,028

7,028

6,251,893–
6,258,921
7,028
2,802,429 249,513,500 7,864,385

7,028
963,6026,251,893
241,649,115

32,925170–

6,258,921(Note)

1,000,000

Interest
rate

0.700%

Redemption
date

September
21, 2028

Use

Repayment
Unsecuredof borrowUnguaranteed
ings, etc.

The yearly schedule of redemption for investment corporation bonds within five years of the balance sheet date is as follows:(Unit: thousand yen)34–

650,000–

Balance at Amount of
Balance at
beginning decrease
Issue dateend of theof theduring theperiodperiodperiod–Mizuho Bank, Ltd.

–28,975

5. Schedule of investment corporation bonds	

Investment corporation bonds

650,000

1,125

Not applicable.

Not later
than 1 year

–

8,703

4. Schedule of other specified assets(Note)

Sumitomo Mitsui
Banking
Corporation

37,6792,193,918 169,768,470–

Amount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
period–5,717

September
1,000,000
24, 2021

Amount ofincreaseduring theperiodSumitomo Mitsui
Banking
Corporation

Urban Park Mitaka, Urban Park Kamata Minami I, Urban Park Kamata Minami II, Urban Park Umejima, KOKO HOTEL Ginza 1-chome,
KOKO HOTEL Sapporo Ekimae, KOKO HOTEL Fukuoka Tenjin, KOKO HOTEL Hiroshima Ekimae, KOKO HOTEL Kagoshima
Tenmonkan, KOKO HOTEL Sapporo Odori, and Best Western Plus Fukuoka Tenjin-minamiFirst Series Unsecured Investment
Corporation Bonds(ranking pari passu among specified investment corporation bonds)

Balance at
beginningof theperiodLender(Note)

The amount of increase in property, plant and equipment during the 16th fiscal period is mainly attributable to the acquisition of the 11
properties below.

Name of the security

Category

Short-termborrowings

Amount of Amount ofdecreaseincreaseduring the during theperiodperiodLater than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than
2 years
3 years
4 years
5 years–––

1,000,000

Long-term borrowings

Type of asset

Balance at
beginningof theperiod(Unit: thousand yen)
(Note 2)The Bank ofFukuoka, Ltd.

0.8120%(Note 3)0.7532%(Note 3)0.7588%(Note 3)500,000––

500,000

0.5360%(Note 3)

August 30,
2024

September
20, 2023

Lump sum
repaymentonrepayment
date

Lump sum
repaymentonrepayment
date

April 22,2024

Lump sum
repaymentonrepayment
date

April 21,2025

Lump sum
repaymentonrepayment
date

February29, 2024

Lump sum
repaymentonrepayment
date(Note 4)(Note 4)(Note 4)(Note 4)(Note 4)

Remarks

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

35

Financial Statements
Supplementary Schedules

Balance at
beginningof theperiodAmount ofincreaseduring theperiodSumitomo Mitsui
Banking
Corporation

2,150,000––

2,150,000

Mizuho Bank, Ltd.

2,000,000––

2,000,000

Aozora Bank, Ltd.

1,500,000––

1,500,000

Sumitomo Mitsui
Trust Bank, Limited

1,000,000––

1,000,000

Lender

The Nishi-Nippon
City Bank, Ltd.

Long-term borrowings

Resona Bank,
Limited

0.6975%(Note 3)

August 29,
2025

Lump sum
repaymentonrepayment
date(Note 4)

Category (Note 2)
Remarks

Balance at
beginningof theperiodAmount ofincreaseduring theperiodSumitomo Mitsui
Banking
Corporation

750,000––

750,000

Mizuho Bank, Ltd.

750,000––

750,000

Sumitomo Mitsui
Trust Bank, Limited

500,000––

500,000

Aozora Bank, Ltd.

500,000––

500,000

750,000––

750,000

LenderUnsecured
Unguaranteed

Amount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
period1,000,000––

1,000,000

The Minato Bank,
Ltd.

600,000––

600,000

Sumitomo Mitsui
Banking
Corporation

1,150,000––

1,150,000

1,350,000

Mizuho Bank, Ltd.

540,000––

540,000

Sumitomo Mitsui
Banking
Corporation

1,350,000

Mizuho Bank, Ltd.

1,000,000––

1,000,000

Sumitomo Mitsui
Trust Bank, Limited

850,000––

850,000

Aozora Bank, Ltd.

400,000––

400,000

Sumitomo Mitsui
Banking
Corporation

1,680,000––

1,680,000

Mizuho Bank, Ltd.

1,530,000––

1,530,000

The Bank of
Yokohama, Ltd.

1,000,000––

1,000,000

SBI Shinsei Bank,
Limited

600,000––

600,000

Aozora Bank, Ltd.

600,000––

600,000

Sumitomo Mitsui
Trust Bank, Limited

550,000––

550,000

Sumitomo Mitsui
Banking
Corporation

750,000––

750,000

Mizuho Bank, Ltd.

750,000––

750,000––

0.6850% October 31,(Note 3)2025

0.7025%(Note 3)

Sumitomo Mitsui
Trust Bank, Limited

500,000––

500,000

The Kiyo Bank, Ltd.

500,000––

500,000

Fukoku Mutual Life
Insurance
Company

500,000––

500,000

Sumitomo Mitsui
Banking
Corporation

750,000––

750,000

Mizuho Bank, Ltd.

750,000––

750,000

Sumitomo Mitsui
Trust Bank, Limited

500,000––

500,000

Aozora Bank, Ltd.

500,000––

500,000

The Bank of
Yokohama, Ltd.

500,000––

The Minato Bank,
Ltd.

36

Amount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
period

0.9455%––

April 28,
2028

Lump sum
repaymentonrepayment
date

Lump sum
repaymentonrepayment
date(Note 4)(Note 4)(Note 4)

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

2,160,000––

2,160,000

The Minato Bank,
Ltd.

500,000––

500,000

Sumitomo Mitsui
Banking
Corporation

800,000––

800,000

Mizuho Bank, Ltd.

500,000––

500,000

SBI Shinsei Bank,
Limited

1,500,000––

1,500,000

Aozora Bank, Ltd.

500,000––

500,000

San ju San Bank,
Ltd.

500,000––

500,000

Sumitomo Mitsui
Banking
Corporation

932,500––

932,500

Mizuho Bank, Ltd.

857,500––

857,500

SBI Shinsei Bank,
Limited

300,000––

300,000

Sumitomo Mitsui
Trust Bank, Limited

525,000––

525,000

300,000––

300,000

Resona Bank, Li
mited

100,000––

100,000

The Bank ofFukuoka, Ltd.

170,000––

170,000

Mizuho Trust &Banking Co., Ltd.

100,000––

100,000

The Dai-ichi Life
Insurance
Company, Limited

500,000––

500,000

Sumitomo Mitsui
Banking
Corporation

932,500––

932,500

500,000

Mizuho Bank, Ltd.

857,500––

857,500

750,000

SBI Shinsei Bank,
Limited

300,000––

300,000

Sumitomo Mitsui
Trust Bank, Limited

525,000––

525,000

Aozora Bank, Ltd.

300,000––

300,000

Resona Bank,
Limited

100,000––

100,000

0.6780%August 19,
2026

Lump sum
repaymentonrepayment
date(Note 4)

Unsecured
Unguaranteed

August 21,
2028

Lump sum
repaymentonrepayment
date

August 31,
2026

Lump sum
repaymentonrepayment
date

August 31,
2028

Lump sum
repaymentonrepayment
date

October 21,
0.4701%2024

Lump sum
repaymentonrepayment
date

0.7505% October 20,(Note 3)2026

Lump sum
repaymentonrepayment
date

0.8894%(Note 3)0.6955%(Note 3)

SBI Shinsei Bank,
Limited

Aozora Bank, Ltd.

(Note 3)(Note 3)750,000

April 30,2026

Lump sum
repaymentonrepayment
dateLong-term borrowings

Category (Note 2)

0.9106%(Note 3)(Note 4)(Note 4)(Note 4)(Note 4)(Note 4)

Remarks

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

37

Financial Statements
Supplementary Schedules

Category (Note 2)
Lender38

100,000

Amount ofincreaseduring theperiod–Amount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
period–100,000

0.7505% October 20,(Note 3)2026

Lump sum
repaymentonrepayment
date

Category (Note 2)
Remarks

Balance at
beginningof theperiodAmount ofincreaseduring theperiodSumitomo Mitsui
Banking
Corporation

1,380,000––

1,380,000

SBI Shinsei Bank,
Limited

1,380,000––

1,380,000

LenderUnsecured(Note 4)
Unguaranteed

Amount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
period

0.6999%Sumitomo Mitsui
Banking
Corporation

500,000––

500,000

Resona Bank,
Limited

340,000––

340,000

Mizuho Bank, Ltd.

450,000––

450,000

1,120,000––

1,120,000

SBI Shinsei Bank,
Limited

600,000––

600,000

Sumitomo Mitsui
Banking
Corporation
SBI Shinsei Bank,
Limited

1,120,000––

1,120,000

Resona Bank,
Limited

260,000––

260,000

Sumitomo Mitsui
Banking
Corporation

2,020,000––

2,020,000

Mizuho Bank, Ltd.

640,000––

640,000

SBI Shinsei Bank,
Limited

1,700,000––

1,700,000

Sumitomo Mitsui
Trust Bank, Limited

560,000––

560,000

Aozora Bank, Ltd.

900,000––

900,000

Resona Bank,
Limited

620,000––

620,000

The Bank ofFukuoka, Ltd.

350,000––

350,000

Sumitomo Mitsui
Banking
Corporation

900,000––

900,000

Mizuho Bank, Ltd.

280,000––

280,000

SBI Shinsei Bank,
Limited

750,000––

750,000

Sumitomo Mitsui
Trust Bank, Limited

240,000––

240,000

Sumitomo Mitsui
Trust Bank, Limited

700,000––

700,000

Aozora Bank, Ltd.

500,000––

500,000

Resona Bank,
Limited

500,000––

500,000

The Bank ofFukuoka, Ltd.

250,000––

250,000

Sumitomo Mitsui
Banking
Corporation

900,000

Mizuho Bank, Ltd.

550,000––

550,000

SBI Shinsei Bank,
Limited

400,000––

400,000

Sumitomo Mitsui
Trust Bank, Limited

500,000––

500,000

Aozora Bank, Ltd.

400,000––

400,000

Resona Bank,
Limited

400,000––

400,000

Sumitomo Mitsui
Banking
Corporation

450,000––

450,000

SBI Shinsei Bank,
Limited

450,000

–

–

–

–

0.8276%

May 31,2027

Lump sum
repaymentonrepayment
date(Note 4)

Unsecured
Unguaranteed

900,000

450,000

0.9067%0.8738%

May 31,
2027

May 31,2027

Lump sum
repaymentonrepayment
date

Lump sum
repaymentonrepayment
date(Note 4)(Note 4)

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Long-term borrowings

Long-term borrowings

Mizuho Trust &Banking Co., Ltd.

Balance at
beginningof theperiod

0.8999%200,000––

200,000

1,000,000––

1,000,000

Aozora Bank, Ltd.

400,000––

400,000

Sumitomo Mitsui
Banking
Corporation

1,400,000––

1,400,000

Resona Bank,
Limited

280,000––

280,000

Mizuho Bank, Ltd.

1,400,000––

1,400,000

The Bank ofFukuoka, Ltd.

150,000––

150,000

SBI Shinsei Bank,
Limited

800,000––

800,000

Sumitomo Mitsui
Banking
Corporation

500,000––

500,000

Mizuho Bank, Ltd.

500,000

0.8722%
1,000,000––

1,000,000

Aozora Bank, Ltd.

800,000––

800,000

Resona Bank,
Limited

800,000––

800,000

The Chiba Bank,
Ltd.

1,000,000––

1,000,000(Note 3)

August 31,
2027(Note 5)

Unsecured
Unguaranteed(Note 3)

1.2779%The Kiyo Bank, Ltd.

Sumitomo Mitsui
Trust Bank, Limited(Note 3)

1.1110%Aozora Bank, Ltd.

Lump sum
repaymentonrepayment
date(Note 3)(Note 3)0.2701%––500,000

April 30,2026

Lump sum
repaymentonrepayment
date

August 31,
2027

Lump sum
repaymentonrepayment
date

April 28,
2028

Lump sum
repaymentonrepayment
date

February28, 2029

Lump sum
repaymentonrepayment
date

April 30,2024

Lump sum
repaymentonrepayment
date(Note 4)(Note 4)(Note 4)(Note 4)(Note 4)

Remarks

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Unsecured
Unguaranteed39

Financial Statements
Supplementary Schedules

Category (Note 2)

Amount ofincreaseduring theperiodSumitomo Mitsui
Banking
Corporation–

650,000–

650,000

Mizuho Bank, Ltd.

–

650,000–

SBI Shinsei Bank,
Limited–1,300,000

Sumitomo Mitsui
Trust Bank, Limited–Aozora Bank, Ltd.

Long-term borrowings

40

Category (Note 2)

Balance at
beginningof theperiodAmount ofincreaseduring theperiodSumitomo Mitsui
Banking
Corporation–

850,000–

850,000

650,000

Mizuho Bank, Ltd.

–

750,000–

750,000–

1,300,000

Sumitomo Mitsui
Trust Bank, Limited–

700,000–

700,000

1,800,000–

1,800,000

SBI Shinsei Bank,
Limited

–600,000–

600,000–

800,000–

800,000

Aozora Bank, Ltd.

–

500,000–

500,000 0.6783%

Resona Bank,
Limited

–800,000–

800,000

Resona Bank,
Limited

–500,000–

500,000

The Bank ofFukuoka, Ltd.

–

430,000–

430,000

The Nishi-Nippon
City Bank, Ltd.

–

500,000–

500,000

The Chiba Bank,
Ltd.

–

1,000,000–

1,000,000

The Bank ofFukuoka, Ltd.

–

240,000–

240,000

The JuhachiShinwa Bank, Ltd.

–

400,000–

400,000

Mizuho Trust &Banking Co., Ltd.

–

200,000–

200,000

Asahi Shinkin Bank–

1,000,000–

1,000,000

Sumitomo Mitsui
Banking
Corporation–

1,600,000–

1,600,000–

1,600,000

LenderAmount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
period0.7216%

February28, 2029

Lump sum
repaymentonrepayment
date(Note 4)

Remarks

Unsecured
Unguaranteed

LenderLong-term borrowings

Balance at
beginningof theperiodAmount of
Average
Balance atdecreaseinterest Repay­ment Repayment
end of theUseduring the
rate
date
methodperiod(Note 1)
periodSeptember
20, 2028

Lump sum
repaymentonrepayment
date

May 31,2027

Lump sum
repaymentonrepayment
date(Note 4)

Remarks

Unsecured
Unguaranteed

Unsecured
Unguaranteed

The Musashino
Bank, Ltd.

–

400,000–

400,000

The Yamagata
Bank, Ltd.

–

500,000–

500,000

Sumitomo Mitsui
Banking
Corporation–

1,300,000–

1,300,000

Mizuho Bank, Ltd.

–1,300,000–

1,300,000(Note 2) Long-term borrowings include current portion of long-term borrowings.

SBI Shinsei Bank,
Limited

–1,700,000–

1,700,000(Note 3) Interest rate swap transactions are undertaken to hedge against the risk of interest rate fluctuations. Interest rate taking into consideration the effect of interest rate swaps (interest rate fixation) is indicated.

Sumitomo Mitsui
Trust Bank, Limited–

1,600,000–

1,600,000

Aozora Bank, Ltd.

–

1,200,000–

1,200,000

Resona Bank,
Limited

–1,200,000–

1,200,000

The Bank ofFukuoka, Ltd.

–570,000–

570,000

The Kiyo Bank, Ltd.

–

500,000–

500,000

San ju San Bank,
Ltd.

–

500,000–

500,000

The JuhachiShinwa Bank, Ltd.

–

600,000–

600,000

Asahi Shinkin Bank–

1,000,000–

1,000,000

The Musashino
Bank, Ltd.

–

600,000–

600,000

Mizuho Bank, Ltd.
Subtotal
Total–

1,600,000

95,840,000

29,840,000

4,840,000 120,840,000

95,840,000

31,140,000

4,840,000 122,140,000

0.5193%(Note 4)(Note 1) Average interest rate is the day-weighted average rate during the fiscal period.

(Note 4) Funds are used for acquisition funds of beneficiary interest in trust, repayment of borrowings, etc.
(Note 5) Funds are used for acquisition funds of beneficiary interest in trust for real estate which is a green eligible asset.

0.8716%

August 30,
2030

Lump sum
repaymentonrepayment
date(Note 6) The yearly schedule of repayment for long-term borrowings within five years of the balance sheet date is as follows:(Note 4)

Unsecured
Unguaranteed(Unit: thousand yen)

Not later than
1 yearLong-term
borrowings

13,285,000

Later than
1 year andnot later than
2 years
19,150,000

Later than
2 years andnot later than
3 years
20,275,000

Later than
3 years andnot later than
4 years
21,650,000

Later than
4 years andnot later than
5 years
21,680,000

41

Financial Statements

Financial Statements

Independent Auditor’s Report

Independent Auditor’s Report

Independent Auditor’s Report

The Board of Directors
Star Asia Investment Corporation

The Audit of the Financial Statements
OpinionWe have audited the accompanying financial statements of Star Asia Investment Corporation(the Company), which comprise the balance sheet as at January 31, 2024, and the statements ofincome and retained earnings, changes in unitholders’ equity, cash distributions and cash flows
for the six months period then ended, and notes to the financial statements.

Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles
generally accepted in Japan, matters related to going concern.
The Supervisory Director is responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements

In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at January 31, 2024, and its financial performance and its
cash flows for the six months period then ended in accordance with accounting principles
generally accepted in Japan.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

Basis for Opinion

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Other Information
The other information comprises the information included in Semi-Annual Report that contains
audited financial statements but does not include the financial statements and our auditor’sreport thereon. Management is responsible for preparation and disclosure of the otherinformation. The Supervisory Director is responsible for overseeing the Company’s reporting
process of the other information.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.

42

Responsibilities of Management and the Supervisory Director for the Financial Statements

・ Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation in accordance with accounting principles
generally accepted in Japan.
・43

We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied to reduce threats to an acceptable level.

Fee-related Information
The fees for the audits of the financial statements of Star Asia Investment Corporation and otherservices provided by us and other EY member firms for the six months period ended January 31,
2024 are 15 million yen and 11 million yen, respectively.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Ernst & Young ShinNihon LLC
Tokyo, JapanMay 30, 2024

Hitoshi Sakurai
Hitoshi Sakurai
Designated Engagement Partner
Certified Public Accountant

Hiroto Inoue
Hiroto Inoue
Designated Engagement Partner
Certified Public Accountant

44

45