To Unitholders of Ichigo Office REIT Investment Corporation

Berkeley Global Makes Proposals to Ichigo Office
REIT Investment Corporation
March 17, 2023

Berkeley Global, LLC(A unitholder of Ichigo Office REIT Investment Corporation /a member of Star Asia Group)Proposal to Unitholders of Ichigo Office REIT Investment Corporation
Proposals to improve IOR unitholders’ investment value and their goal◼

As a unitholder of IOR, Berkley Global, LLC would like to propose the following<Proposal><Goal>

Revision of the asset management fee structure

Improve-dividend payments to unitholders by loweringof asset management fees ;Abolition of a de facto takeover defense measure

1 Lowering of NOI & Dividend Performance Fee

Lower IOR’s asset management fees – which, when calculated asa ratio of asset management fees to total assets, is higher level
than any other J-REIT in the market – and bring it more in linewith the J-REIT prevailing. Allocate the savings to increase
unitholder dividends and create an environment that facilitates
external growth accompanying a public offering,

Abolition of Gains on Sale Performance Fee and adoption of
2 Asset Acquisition Fee and Asset Disposition Fee

Correct double recording of gain on sales of assets byintroducing a fee structure including compensation for theacquisition and transfer of assets that will contribute to growth ofIOR

3 REIT TOB Sale Performance Fee and adoption of Merger Fee

Abolish the unreasonable current asset management fee
structure, which functions as a de facto takeover defense
measure, that reduces opportunities for reorganization,acquisition, etc., and inhibit maximizing shareholder value

Appointment of a new REIT Executive Director and a
REIT Supervisory Director

Improvement of governance through hiring of persons
who has experience in management of J-REIT

1 Appointment of a new REIT Executive Director

Strengthen the Board’s internal control functions by increasing
its size and bringing in new directors with proven J-REIT
management experience

Abolition of Gains on Merger Performance Fee / Gains on

2 Appointment of a new REIT Supervisory Director
Adoption of a cap to compensations for REIT Executive

3 Directors and REIT Supervisory Directors

Limit the burden on IOR by adoption a cap to total directors’compensation
2

Historical Development of Ichigo Office REIT Investment Corporation (1)Growth in portfolio size and dividends have remained weak for a long time◼
◼

For the past c. 7 years since May 2016, IOR has not achieved any external growth through public offerings. Out of all 60 existing J-REITs
in the market, there are only two that have not conducted a PO during that period
LTV has increased backed by asset replacement and leveraged investment in new assets, but IOR has still failed to achieve the mediumterm DPU and EPU targets it announced during the fiscal period ended Apr 2019

LTV
/
Yield
/
Gain onsale

Net asset
LTV
NOI
Yield
Gain onproperty
sale

46.0%

45.7%

47.5%

46.9%

47.6%

48.1%

48.0%

48.1%

48.2%

48.9%

48.9%

48.8%

49.2%

5.3%

5.5%

5.5%

5.5%

5.5%

5.6%

5.6%

5.7%

5.7%

5.7%

5.5%

5.5%

5.3%

7

38

0

159

0

669

441

398

0

0

0

940

0

*The unit for gain on property sale is ¥1m(JPY)

Portfolio size
(right)(JPY100m)

Dividend (left)

Dividend/
Portfolio
size

0

Oct.
2016
Value of

293

35

71

（+13）

（+1）

（+3）

*Sold

10

45

（-1）

（-4）

Total # ofproperties

85

82

actions(and # ofproperties)

Oct.
2017

*Acquiredpropertytrans-

Apr.
2017

0
85

Apr.
2018
0
60

（-3）
82

Oct.
2018

Apr.
2019

Oct.
2019

Apr.
2020

74

61

23

15

（+3）

（+2）

（+1）

（+1）

0
85

36

24

28

（-2）

（-1）

（-1）

85

85

85

*Numbers in parentheses indicate changes in total property count caused by property acquisitions and sales

Oct.
2020
0

Apr.
2021
38

（+1）

Oct.
2021

Apr.
2022

0

0

0

0

0

85

86

86

17

（-1）
85

Acquisition/sale values are expressed in units of ¥100m

Oct.
2022

Apr.
2023(E)

Oct.
2023(E)

38

（+1）
0
86
Forecast figures are based on IOR disclosure materials

3Historical Development of Ichigo Office REIT Investment Corporation (2)Since the outbreak of the COVID-19 pandemic, P/NAV ratio has remained significantly lower than 1.0x◼
◼

Although IOR has conducted unit buybacks since the sudden fall of its unit price due to the pandemic, P/NAV ratio has remained below 1.0x
IOR is in a situation where it is critical to take some actions to remedy the current situation that significantly impairs IOR unitholders’ investment value
Jul. 2020
Unitholders’ meeting
Change of asset
management fee
structure

Aug. 2018
JCR rating
improved from
A- to AMay 2016
The 4th public
offering

Jan. 2021
Unit buybackJul. 2022
Unitholders’meeting

Oct. 2022
JCR rating
improved from
A to A+(JPY)

Unit price

P/NAV

Unit
price
Changes in indicators(FYE2016.10 to FYE2022.10)
DPU

7.8% increase(1,904 yen to 2,052 yen)

EPU

23.4% increase(1,607 yen to 1,983 yen)

NOI
yield

Portfolio NOI yield ±0(no change from 5.3%)

LTV

3.2% increase(46.0% to 49.2%)<Movements since Oct. 2016>➢

For 7 years since the last PO conducted in May 2016, IOR
has not achieved external growth through POs
Out of all J-REITs on the market, there were only 3 that did
not conduct a PO during this period, including 1 that
underwent a merger in 2023➢

LTV has increased backed by asset replacement andleveraged investment in new assets➢

Mid-term management plan / April 2022 Targets (Actionplan) have not been achieved
Base EPU: ¥2,200 (target) vs. ¥2,036 (actual)DPU: ¥2,269 (target) vs. ¥2,052 (actual)*DPU for fiscal period ending Oct. 2022 has been shown
here, due to gain on sales being recorded during fiscal
period ending Apr 2022➢

April 2021 / Conducted unit buybacks
Liquidated 2.1% of outstanding units with average purchaseprice of approx. ¥79,276 per unit➢

Approved changes to the asset management fee
structure at the unitholders’ meeting in July 2020
The management fee, which had been already high for JREITs, was further increased from the former structure
The new structure lowers incentives for external growth➢

The amendment of the management fee structure
introduced a Gains on Merger Performance Fee andGains on REIT TOB Sale Performance Fee

4

Areas for Improvement and Solutions for Ichigo Office REIT Investment Corporation
Proposals to improve IOR unitholders’ investment value (details)◼

As a unitholder of IOR, we recognize the following points for improvement and would like to propose solutions that benefit all unitholders(1)<Areas for improvement><Solutions>Management fee structure contradictory to theimprovement of unitholder value

Optimization of asset management fees by introducing
a asset management fee structure that is closely linked
to IOR unitholders’ investment value⁃

The highest level of asset management fee rate among the 61 J-REIT issues*(ratio of asset management fees to total assets)⁃

Under the asset management fee structure approved in the unitholders’ meeting
held in July 2020, i.e., NOI & Dividend Performance Fee and Gains on Sale
Performance Fee, gains on sale of assets are counted towards the overall fee
twice, --once as NOI & Dividend Performance Fee and once as Gains on Sale
Performance Fee, nevertheless, extremely high levels of rates are set, without
careful consideration⁃

The asset management fee structure of Gains on Merger Performance Fee /Gains on REIT TOB Sale Performance Fee approved at the unitholders’ meeting
held in July 2020 is not used by any others among the 61 J-REIT issues. The
lack any connection with the services provided by an asset management company,
the amount of which is expected to be high, and the lack of clarity makes it difficult todetermine how it is even calculated. It would be fair, therefore, to characterize thisworking as a takeover defensive measure⁃

The asset management fee structure before amendment was “AM Fee
Structure with High Unitholder Alignment” (according to the IOR Apr 2019 Fiscal
Period Corporate Presentation); therefore, IOR should introduce a revised asset
management fee structure to align the interests of the asset managementcompany with unitholders⁃

Through revision of asset management fee structure, lower asset
management fees to the average level of the 61 J-REIT issues* (total asset
basis)⁃

Change in the rate of NOI & Dividend Performance Fee to an appropriate
level and abolition of the Gains on Sale Performance Fee, and reinstate theformer Asset Disposition Fee, so that the Asset Manager Company iscompensated for the actual work that it does⁃

Abolition of Gains on Merger Performance Fee and Gains on REIT TOB
Sale Performance Fee as these fees do not bring any benefit to IOR
unitholders’ investment value⁃(Please refer to page 9 & 10 for details about the proposed revision)(Please refer to page 6 & 7 for details about the asset management fee structure)(2)

Improvement of governance through hiring of persons
who has experience in management of J-REIT

Areas for improvement concerning governance⁃At the unitholders’ meeting held in July 2020, the management explained thatthe asset management fee structure will become “fully tied toperformance,” putting it in alignment with unitholder value.

⁃

However, the actual amount of asset management fee after the change offee structure is higher than the previous structure⁃

IOR has neither followed up on the validity of its May 2020 disclosure
literature outlining the proposed fee structure change, nor conducted astudy tracking the trajectory of its actual AM fee. There has been a lack ofclear communication to unitholders(Please refer to our verification on page 8)⁃

To strengthen internal controls via Board of Directors, enlarge the Board
structure to 5 members, comprising the current three members plus a new
REIT Executive Director and a new REIT Supervisory Director who havevast experience as J-REIT asset managers (the term for each shall be the sameas the existing Executive Directors and Supervisory Directors)(Please refer to page 11 & 12 for candidates’ details)※ Information is based on figures through the fiscal period ending Oct. 2022, so these statements do not account for the Mar. 2023 merger that decreased the number of J-REITs to 60

5Asset Management Fee Structure Contradictory to the Improvement of
IOR Unitholders’ Investment Value (1)Lowering of asset management fees through revision of the asset management fee structure◼
◼

We would like to propose a revision of asset management fees and the fee structure, currently the highest fee level among J-REITs (on a total asset
basis), to lower to the average level for J-REITs
If asset management fees are lowered to the J-REIT average, IOR can secure surplus funds of JPY 239m for dividend payment as well as anincrease of about 158 yen in dividend per unit (based on the fiscal period ended Oct 2022)

Asset management fees 70% higher than the J-REIT average (gross asset basis)*Average for the 4 most recent fiscal periods as of the end of Oct 2022

J-REIT average

IOR

Asset management fees 55% higher than the J-REIT average (NOI basis)*Average for the 4 most recent fiscal periods as of the end of Oct 2022

Asset management fees
70% higher than the J-REIT average✓ The ratio of asset management fees to gross assets is thehighest among J-REITs
IOR:
0.78 %J-REIT average:
0.46 %
Office REIT average:
0.35 %✓ If we use NOI, a metric that indicates an asset investment’s
profitability, as a calculation basis, the asset management fees
ratio would still exceed the J-REIT average by 55%

IOR

J-REIT average

Effect of lowering Asset management fees
✓ Lowering asset management fees to the average level of JREITs on a gross asset basis can be expected to raise
dividend funds by JPY239m (based on the fiscal period ended
October 2022) as well as increase dividend per unit by 158 yen(based on the fiscal period ended Oct 2022)✓ Increase in dividend payment will bring upward pressure on theunit price and generate an environment conducive to acquisition
driven-growth through public offerings
6Asset Management Fee Structure Contradictory to the Improvement of
IOR Unitholders’ Investment Value (2)Abolition of Gains on Merger Performance Fee / Gains on REIT TOB Sale Performance Feethat can be considered as a takeover defense measures◼
◼

Gains on Merger Performance Fee / Gains on REIT TOB Sale Performance Fee are fees received by the Asset Management Company that should
belong to unitholders
These fees discourage mergers and acquisitions, even in instances where it would increase benefit unitholder value. We do not believe that this is how
performance fees for listed J-REITs should work

Issues of the Gains on Merger Performance Fee
1. Risk of large payment◼ Gains on Merger Performance Fee is paid for any type of merger including consolidation and absorption typemergers regardless of extinguishment or survival; we estimate that the AM fee charged to IOR in any merger
will be higher than twice of its net income in the FP ended October 2022 (JPY 3.001bn), though theformula is unclear as described in 2 below.
<Estimate in case of consolidation /<Estimate in case of survival in absorption-type merger>
extinguishment in absorption-type merger>
Difference
29,672 yen×
Number ofinvestment units
outstanding
1,513,367

Difference¥48.012bn

Difference
29,672 yen

97,079yen

67,407yen

Unit value

Net assets per unit

Difference
JPY 48.012bn

×JPY
253.11bn

15% rate

JPY
205.098bn

×15% rate

Total appraisal value Total book value(Note) Calculation based on a formula using unrealized profit per unit
Calculated unit value being as NAV per unit (fiscal period ended October 2022)(Note) Calculation based on a formula using the book value

Management
feeManagementfee

JPY6.735bn (estimate)

JPY7.202bn (estimate)

2. Calculation of actual amounts is difficult due to the unclear formula◼ According to the Articles of Incorporation, in addition to the formula using unrealized profit per unit, there is also a formulausing the book value of real estate-related assets in the event of a merger by another J-REIT, and it is unclear which
formula will be applied.
◼ According to the Article of Incorporation, Gains on Merger Performance Fee is decided by calculating “net assets at thetime the merger is approved at the Unitholders Meeting,” but this would be practically difficult at times other than financial
closing (the figure could be calculated by doing the same work that would be done upon financial closing, but this would
entail added costs)◼ According to the Article of Incorporation, asset management fee accrues “at the time the merger is approved at theUnitholders Meeting” which means expenses higher than net income are incurred without waiting for a resolution of
approval at a unitholder’s meeting of the other party (i.e., at a stage when the merger may not be consummated) (In otherlisted J-REITs, standard is at the time that “the merger is consummated")

Proposal to abolish theGains on Merger
Performance Fee and theGains on REIT TOB Sale
Performance Fee, andreinstate the former fee
structure➢ The Gains on Merger Performance
Fee and the Gains on REIT TOB
Sale Performance Fee can run
high, even exceeding the twice ofthe net income for the relevant
period. In our opinion, it effectively
acts as a takeover defense
measure, preventing acquisitions
and mergers even in instanceswhere they would enhanceunitholder value

Issues of the Gains on REIT TOB Sale Performance Fee
Same as the issues of the Gains on Merger Performance Fee, it could be expensive and difficult to calculate7Governance Issues
Proposals of changes in the AM fee structure contradictory to the improvement of
IOR unitholders’ investment value◼

◼

When the revision to the asset management fee structure was approved in July 2020, unitholders were told that introducing a compensation system
would be “fully tied to performance”, and it would lead to lower fees compared with before. However, the amount of the fee has actually risen andthe formula is difficult to calculate in practice for some fees, putting it at odds with the goal of increasing IOR unitholders’ investment value
IOR’s problem – such as its misleading disclosures and the adoption of an asset management fee structure with an opaque, difficult-to-verify
calculation formula – has compelled us to conclude that it needs to be guided by a stronger governance system led by directors with practical industry
experience and strong track record

Asset management fees disclosed by Ichigo Office REIT
Investment Corporation when changes in the asset
management fee structure were proposed(JPY)

Comparison of the current and old asset
management fee structuresby Berkeley Global, LLC(JPY mn)

Asset Management Fee I- 4.2%

Asset Management
Fee II
Asset AcquisitionFee

DPU (left)

Effects on DPU(left)

Asset Sale Fee
Performance Fee
NOI & Dividend
Performance Fee
Gains on Sale
Performance Fee

Before the change

Asset managementfee (current structure)(right)Asset managementfee (former structure)(right)After the change (estimate)* Unit: JPY mn, based on disclosures as of June 15, 2020

➢ Changes in the asset management fee structure were justified as being more
rewarding to unitholders and improving IOR unitholders’ investment value as
total fees for the periods from fiscal period ending Oct 2015 to fiscal period
ending Apr 2020 under the current asset management fee structure would belower than under the former asset management fee structure➢ Since the change in the asset management fee structure, the total fees for all
periods from the period ended April 2021 under the current structure havebeen higher than under the former structure; the change in the structure
conflicts with the previous explanation that IOR unitholders’ investment
value will improve8

Proposals for Solving Issues Faced by Ichigo Office REIT Investment Corporation (1)Effects of changes in the asset management fee structure◼
◼

Lower the level of the asset management fees to increase DPU resources and put upward pressure on unit price, improving external growthpotential with public offerings
Abolition of Gains on Merger Performance Fee and Gains on REIT TOB Sale Performance Fee that may be considered a takeover defense
measures to prevent restructuring and acquisition that would contribute to increase in IOR unitholders’ investment value, securing opportunities toappropriately improve IOR unitholders’ investment value

Outline of proposals for the change in the asset
management fee structure

Comparison of the current and newly proposed asset
management fee structure

Rate
Current
structure

PeriodPeriodPeriodPeriodending Apr ending Oct ending Apr ending Oct
2021
2021
2022
2022

New
structure

Total◼ Change in the rate of NOI & Dividend Performance Fees

NOI & Dividend
Performance Fee(Rate Change)

DPU x NOI x rate

0.0054%0.0036%◼ Abolition of Gains on Sale Performance Fee / Adoption of Asset
Acquisition Fee and Asset Disposition Fee
Gains on Sale
Performance Fee(Abolition)

Gain on sale of assets x rate

Asset Acquisition Fee Asset acquisition price x rate
(Adoption)
Asset Disposition Fee(Adoption)

Asset sale price x rate

15.0%

Elimination―

0.5%(Maximum)―

0.5%(Maximum)◼ Abolition of Gains on Merger Performance Fee and Gains on REIT TOB
Sale Performance Fee / Adoption of Merger Fee

Current
structure*

JPY 834mn JPY 872mn

JPY 774mn

JPY
3,582mn

Newly
proposedstructure

JPY 575mn JPY 581mn JPY 65mn JPY 535mn

JPY
2,341mn

Changes△ 31.0%△ 34.6%

Effects on
DPU+ JPY 171 + JPY 192 + JPY 299 + JPY 158 + JPY 205△ 33.3%JPY
1,103mn△ 41.1%△ 30.9%Gains on Merger
Performance Fee(Abolition)

Unrealized gain per unit x
number of outstanding units
x rate15.0%

Gains on REIT TOB
Sale Performance Fee(Abolition)

Unrealized gain per unit x
number of units acquired
through TOB x rate

15.0%

Elimination➢ The above chart shows the asset management fee with applicationof the proposed asset management fee structure to theperformance of IOR for the past four periods―

0.5%(Maximum)➢ The amount of asset management fees decreased by 34.6% anddividends per unit increased by JPY 205 for the four periods(simple mean value)*Currently effective asset management fee structure in effect for the fiscal year ending Apr 2021

Merger Fee(Adoption)

Assets valuation x rate

Eliminationand thereafter.

9

Proposals for Solving Issues Faced by Ichigo Office REIT Investment Corporation (2)Request to Call for a Unitholders’ Meeting and proposition to amend the Articles of Incorporation and nominate
an Executive Director and a Supervisory Director◼
◼

Berkeley Global, LLC, one of the largest unitholders of IOR, has requested to hold a Unitholders’ Meeting and submitted the following proposals
for resolution at the meeting
We would like to give an opportunity for the unitholders to express their views regarding our proposals that would contribute to improvement of IOR
unitholders’ investment value

Proposals for the Ichigo Office REIT Investment Corporation Unitholders Meeting and their rationales
Optimizing the amount of asset management fees by transitioning to an asset management fee structure that is closely linked to andaligned with unitholders’ interests

Proposal

Theme

Description

Rationale

Amendments to the
Articles of Incorporation(a)Change in the rate of NOI &Dividend Performance Fee

DPU x NOI x fee rate
Change in the fee rate from 0.0054% → 0.0036% (newrate)

Lower the rate of asset management fees related to regularproperty management to the J-REIT prevailing level

Amendments to the
Articles of Incorporation(b)

Abolition of Gains on Sale
Performance Fee
Adoption of Asset Acquisition
Fee and Asset Disposition Fee

Gain on sale of assets x fee rate (15%) → Abolition
Asset Acquisition fee: Asset Acquisition price x fee rate
(0.5%) (Maximum) → Adoption
Asset Disposition fee: Sales price x fee rate (0.5%)(Maximum) → Adoption

Abolition of the incentive characteristics of the fee on sales
and make it a consideration for the provision of practicalservices related to acquisition and sales

Amendments to the
Articles of Incorporation(c)

Abolition of Gains on Merger
Performance Fee
Abolition of Gains on REITTOB Sale Performance Fee
Adoption of Merger Fee

Unrealized profit per unit x number of outstanding units x
fee rate (15%) → Abolition
Merger Fee: Appraisal value x fee rate (0.5%) (Maximum)→ Adoption

Abolition of the Gains on Merger Performance Fee/REITTOB Sale Performance Fee that conflicts with the
improvement of IOR unitholders’ investment value and canbe considered as a takeover defense measure, and make ita consideration for provision of practical services related tomerger (investigation and valuation of assets of thecounterparty, etc.)

Improvement of Governance by Nomination of an Executive Director and a Supervisory Director with strong J-REIT Experience
Proposal

Theme

Description

Rationale

Nomination of an
Executive Director

Nomination of a new Executive
Director, bringing the total
number to two

Candidate: Mr. Toru Sugihara

Improvement of governance through appointment of an
Executive Director with strong J-REIT management andexecutive management experience
The monthly remuneration will be ¥10,000

Nomination of aSupervisory Director

Nomination of a new
Supervisory Director, bringing
the total number to three

Candidate: Mr. Akihiko Fujinaga

Improvement of governance through appointment of aSupervisory Director with rich experience in and deep
understanding of J-REIT management

Amendments to the
Articles of Incorporation(d)Adoption of a cap on
remuneration for Executive
Directors and Supervisory
Directors

Total compensation (monthly): JPY 1,090,000

Limit newly the financial burden of IOR by adopting the totalcompensation amount: JPY 360,000 for the current Executive
Directors, JPY 480,000 for the current two Supervisory Director(these can be confirmed in the disclosure material), JPY 10,000 for
the new Executive Director, and JPY 240,000 for the new
Supervisory Director

10Proposals for Solving Issues Faced by Ichigo Office REIT Investment Corporation (3)Introduction to the Candidate for Executive Director◼

Berkeley Global proposes Mr. Sugihara Toru, the Manager of Berkeley Global, LLC (Star Asia Group) as candidate for Executive Director,
confident in his ability to improve and strengthen the governance of IOR in seeking improvement in unitholder value on the back of his over five
years of experience in J-REIT and prior experience as an executive director of a J-REIT

Candidate for Executive Director of Ichigo Office REIT Investment Corporation
Mr. Toru Sugihara
Berkeley Global, LLC (Star Asia Group), Manager(Former Director and Vice President of Star Asia Investment Management Co., Ltd. / Former Executive Director of Sakura
Sogo REIT Investment Corporation)
I have been wishing for the growth of the J-REIT market since its establishment from the standpoint of underwriter and J-REIT
sponsor. Since June 2015, I have been focusing on managing assets to gain the confidence of as many investors as possible fromthe standpoint of asset manager. I am aware that J-REITs, required to obtain licenses of the Financial Services Agency and
Ministry of Land, Infrastructure, Transport and Tourism to conduct business, have high public interest and are responsible formanaging assets to meet and exceed the expectations of investors
I will work most diligently to gain the understanding of as many unitholders as possible for our proposal, and based on theirrational judgment, ensure the implementation of a proper and most effective asset management fee structure and governancesystem for IOR to seek significant improvement in IOR unitholder’s investment value
ProfileApr 1991

Joined Nomura Securities Co. Ltd.

Engaged in sales of shares, bonds, and investment funds to corporate and retail customers in Shinurayasu Branch andUeno Branch. Became RM for the real estate sector in 2000, and engaged in IPOs and equity financing, securitization of realestate assets, and structuring of private real estate funds

Oct 2006

Joined Barclays Securities Japan Limited

Provided and arranged real estate non-recourse loans as leader of the Japanese real estate sector business. Engaged instructuring and restructuring of CMBS

Jul 2012

Joined Kenedix, Inc.

Engaged in development of deals on investment in real estate and real estate-backed bonds. Engaged in structuring ofbridge funds for intra-group REITs

Feb 2015

Joined Star Asia Management Japan Limited, Tokyo Branch

Joined the company as a member in charge of planning and executing group strategy

Jun 2015

Star Asia Investment Management Co. Ltd. on secondment as
Representative Director and General Manager of Finance Department

Seconded to Star Asia Investment Management Co. Ltd. to handle J-REIT structuring (Star Asia Investment Corporation)

Aug 2015

Director and General Manager of Finance Department, at Star Asia
Investment Management Co. Ltd.

Engaged in discussion with regulatory authorities, establishment of an investment policy, and financing and successfully
concluded Star Asia Investment Corporation’s IPO
Executed equity financing five times and led investment in mezzanine loan bonds, etc.

Apr 2019

Lion Partners Godo Kaisha (Star Asia Group), Representative

Made proposals as a unitholder of Sakura Sogo REIT Investment Corporation

Aug 2019

Sakura Sogo REIT Investment Corporation, Executive Director

Led the merger with Star Asia Investment Corporation as Executive Director; engaged in formation of an independent
committee, and execution of the deal through fair consideration and procedures

Aug 2020

Star Asia Investment Management Co. Ltd. on secondment as Director
Led the growth of Star Asia Investment Corporation after the merger, as asset manager
and Vice President

Feb 2023

Berkeley Global, LLC (Star Asia Group), Manager

Made proposals as a unitholder of Ichigo Office REIT Investment Corporation11

Proposals for Solving Issues Faced by Ichigo Office REIT Investment Corporation (3)Introduction to the Candidate for Supervisory Director◼

Berkeley Global proposes Mr. Akihiko Fujinaga as candidate for Supervisory Director

Candidate for Supervisory Director of Ichigo Office REIT Investment Corporation
Mr. Akihiko Fujinaga<Rationale for recommendation>
Mr. Akihiko Fujinaga has contributed to the development of the J-REIT market as Manager of the Finance and Accounting Department ofJapan Real Estate Asset Management, the asset management company of Japan Real Estate Investment Corporation, one of the first listed JREITs, executing the first J-REIT equity financing, rated transactions, issuance of investment corporation bonds, and more. He also has
extensive experience in management of real estate and rich experience in private and public J-REIT offerings. In addition, he has deep expertisein business management and compliance, making him the perfect person to serve as Supervisory Director
ProfileApr 1980

Joined Tokio Marine Fire Insurance Co., Ltd. (currently Tokio Marine & Nichido
Fire Insurance Co., Ltd.)Sep 2001

Seconded to Japan Real Estate Asset Management Co.,Ltd., Manager of the
Finance and Accounting Department and Executive Director

May 2006

Secured Capital Japan Co., Ltd. (currently PAG Investment Management Ltd),Manager of Management Planning Division

Apr 2007

New City Corporation K.K., Senior Vice President and Executive Director

Dec 2007MS Real Estate Advisors K.K., CFO and Director

Jan 2009

LaSalle Investment Management K.K., COO and Executive Director

Jan 2015

LaSalle Investment Management K.K., Senior Executive Advisor

Feb 2017

Tosei Asset Advisors, Inc., President & Representative Director

Feb 2020

Tosei Asset Advisors, Inc., Chairperson

Feb 2022

Left Tosei Asset Advisors, Inc.

12

Reference: Asset Management Fees Rules for All J-REITs (1)CodeCompany name

AssetsOutstanding(Annual rate)

Asset Acquisition(External /Stakeholder
Transactions)

Net Operating
Income(NOI)

Earnings

Asset Sale
(External /Stakeholder
Transactions)

Merger(External /Stakeholder
Transactions)

Other / Remarks

Office8951

Nippon Building Fund (NBF)8952

Japan Real Estate Investment
Corporation (JRE)8958

Global One Real Estate
Investment (GOR)

8972

Kenedix Office Investment
Corporation (KDO)

8975

Ichigo Office REIT Investment
Corporation (IRE)

8976

3290

-

3.00%

2.50%

0.50%*1*2

0.50%*1*2

-

-

4.00%

0.50%*1

0.50%*1

0.30%

5.00%

-

0.50%

0.50%

0.13%

-

-

1.00%

Performance fee：
Pre-tax net income × 2.5％ × DPU growth rate (vs simple average of the six mostrecent periods, including the current FP)
0.50%*1 *Not including gains (losses) on sales during the current FP
Gains (losses) on Sales × 12.5% (0 for negative values)
The merger fee shall be paid within three months from the last day of the month inwhich the merger takes effect
The merger fee shall be paid by the last day of the month following the month in which

0.50%*1 the merger takes effect-

DPU linked fee：Adjusted DPU x 23,000
Performance fee： DPU increase (vs. simple average of the four most recent periods)
1.00%*1 x No. of shares outstanding x 10%
If the final gains on sale occur during the current FP, gains on sale x 10.0%
Merger fees shall be paid within three months from the effective date of the merger
NOI & Dividend performance fee = DPU before deduction of NOI & Dividend
performance fee × NOI × 0.0054%
Gains on sale performance fee＝Gains on sale before deduction of Gains on saleperformance fee ×15%
- Gains on merger performance Fee＝Gains per share at the time of the merger × No.
of shares outstanding × 15%
Gains on REIT TOB sale performance fee＝Gains per share at the time of REIT TOB
sale × No. of TOB shares × 15%

-

-

-

-

-

Daiwa Office Investment
Corporation (DOI)

0.05%

3.50%

5.50%

0.75% / 0.50%*1

0.50%

One REIT (ONE)

0.30%*1-

2.50%*1

1.00% / 0.50%*1

1.00% / 0.50%*1

The merger fee shall be paid by the last day of the month following the month in which

0.75%*1 the merger takes effect

EPU linked fee：EPU × 2,000*1

1.00%*1 The merger fee shall be paid by the last day of the month following the month in which
the merger takes effectCommercial

8964

Frontier Real Estate
Investment Corporation (FRI)

0.30%*1

2.00%*1-

0.50% / 0.25%*1

0.50% / 0.25%*1

3292

AEON REIT Investment
Corporation (ARI)

0.30%*1--

0.50% / 0.25%*1

0.50% / -*1

3453

Kenedix Retail REIT
Corporation (KRR)

0.27%

-

-

1.00%

0.50%

2971

ESCON JAPAN REIT
Investment Corporation

0.45%*1

3.00%*1-

1.00% / 0.50%*1

1.00% / 0.50%*1*1： Maximum rate *2: Declining rate

NOI & DPU linked fee：DPU before deduction of DPU linked fee × NOI × 0.001%*1- The maximum total amount of AUM linked fee and NOI & DPU linked fee is 0.4% of
total assets
DPU linked fee (AM feeⅡ)：Net income before deduction of AM fee Ⅱ × DPU before
deduction of AM feeⅡ × 0.0013%
Investment unit price linked fee：Excess return over TSE REIT index × Market cap ×
1.00%*1 0.1%
Asset acquisition fee includes redevelopment and expansion
Merger fee shall be paid within three months of the effective date of the merger-

13Reference: Asset Management Fees Rules for All J-REITs (2)CodeCompany name

AssetsOutstanding(Annual rate)

Asset Acquisition(External /Stakeholder
Transactions)

Net Operating
Income(NOI)

Earnings

Asset Sale
(External /Stakeholder
Transactions)

Merger(External /Stakeholder
Transactions)

Other / Remarks

Hotel

8963

Invincible Investment
Corporation (INV)8985

Japan Hotel REIT Investment
Corporation (JHR)

0.35%*1-

1.00%*1

0.75% / 0.50%*1

0.50% / 0.25%*1

3287

Hoshino Resorts REIT
HRR)

0.70%*1--

2.00% / 1.00%*1

1.50% / 0.75%*1

0.40%*1--

0.50%*1

0.50%*1

The maximum amount of assets outstanding fee is 150 million yen from January 2022
to December 2022 (3 months)- The minimum amount of assets outstanding fee is 25 million yen after January 2023
(3 months)
DPU linked fee：DPU × 43,000 (maximum rate)*1
0.25%*1 Merger fee shall be paid within three months from the effective date of the merger
NOI & DPU linked fee：DPU × NOI × 0.00015%*1

1.00%*1 Merger fee shall be paid within three months from the effective date of the merger
NOI & Dividend performance fee ：DPU before deduction of NOI & Dividend
performance fee × NOI × 0.0036%
Gains on sale performance fee＝Gains on sale before deduction of gains on saleperformance fee × 15%- Gains on merger performance Fee＝Gains per share at the time of the merger × No.
of shares outstanding × 15%
Gains on REIT TOB sale performance fee＝Gains per share at the time of REIT TOB
sale × No. of TOB shares×15%
Merger fee shall be paid within a month of the effective date of the merger
DPU linked fee：AM fee Ⅱ in the previous FP × (DPU before deduction of AM fee Ⅱ
in the current FP / DPU before deduction of AM fee Ⅱ in the previous FP) × AM fee
1.00%*1 Ⅱrevised ratio
Minimum amount of asset acquisition fee is 5 million yen / case
Merger fee shall be paid within three months of the effective date of the merger

3463

Ichigo Hotel REIT Investment
Corporation (IHR)

-

-

-

-

-

3472

Ooedo Onsen Reit Investment
Corporation (SPA)

1.00%*1--

1.00% / 0.50%*1

1.00% / 0.50%*1

3478

MORI TRUST Hotel Reit
(MTH)

0.50%*1-

4.00%*1

1.00%*1

1.00%*1--

Residential
8979

Starts Proceed Investment
Corporation (SPI)

0.40-0.70%*2

3.00%

-

0.60% / 0.55%*1

0.60% / 0.55%*1

8986

Daiwa Securities Living
Investment Corporation (DLI)

0.20%*1

8.00%*1-

Rates differ by asset(1.00-1.50%)*1

0.50%*1

1.00%*1 Merger fee shall be paid within three months from the effective date of the merger

3226

Nippon Accomodations Fund
(NAF)

-

5.00%*1

5.00%*1

1.00% / 0.50%*1

1.00% / 0.50%*1

0.50%*1 Merger fee shall be paid within three months from the effective date of the merger

3269

Advance Residence
Investment Corporation (ADR)--

7.00%*1

1.00%*1

0.50%*1

0.50%*1 Merger fee shall be paid within three months from the effective date of the merger

3278

Kenedix Residential Next
Investment Corporation (KDR)

0.27%

-

-

1.00%

0.50%

1.00%*1 Index linked fee：Performance against TSE REIT Index × Market cap × 0.15%

3282

Comforia Residential REIT
(CRR)

0.20%*1--

1.00% / 0.50%

1.00% / 0.50%

3459

Samty Residential Investment
Corporation (SRR)

0.45%

-

-

1.00%

0.50%

*1： Maximum rate *2: Declining rate

Asset acquisition fee: Rental housing 1.00%, Healthcare facility 1.50%*1

FFO linked fee：NOI linked management fee × Adjusted FFO per unit × 0.005%
EPU linked fee：Distributable amount × EPU × 0.00145%

Merger fee shall be paid within three months from the effective date of the merger
Ordinary CF linked fee：Ordinary CF×5.40%*1
Ordinary CF growth rate linked fee：Ordinary CF × Ordinary CF growth rate per unit
0.50% × 10.0%
The merger fee shall be paid by the last day of the month following the month in which
the merger takes effectEarnings linked fee (AM feeⅡ)：Pre-tax net income before deduction of AM fee Ⅱ ×
5.0% × (Total assets – 50 billion yen) / Total assets
If the acquired asset is trust beneficiary interest and is acquired from a party other
1.00%*1 than an interested party, Acquisition Fee shall include the amount obtained when the
maximum amount of remuneration provided in the Real Estate Brokerage Act after
subtracting the brokerage fee for the trust beneficiary interest, multiplied by 0.5
Merger fee shall be paid within three months of the effective date of the merger

14Reference: Asset Management Fees Rules for All J-REITs (3)CodeCompany name

AssetsOutstanding(Annual rate)

Asset Acquisition(External /Stakeholder
Transactions)

Net Operating
Income(NOI)

Earnings

Asset Sale
(External /Stakeholder
Transactions)

Merger(External /Stakeholder
Transactions)

Other / Remarks

Logistics
8967

Japan Logistics Fund (JLF)

3281

GLP J-REIT (GLP)--

7.00%*1

0.70%*1-

0.18%*1-

3.50%*1

0.50% / 0.30%*1

0.50% / 0.30%*1

Adjusted earnings × Adjusted DPU × 0.0009%- Redevelopment fee：Construction cost × 0.7%

EPU linked fee：(Total assets linked management fee + NOI linked management fee
× Adjusted EPU × 0.033%*1

0.50% / 0.30%*1 Asset acquisition fee includes redevelopment and expansion

Merger fee shall be paid within three months from the effective date of the merger

3283

Nippon Prologis REIT (NPR)-

6.00%*1

7.50%*1

1.00% / 0.50%*1

0.50% / 0.25%*1

3466

LaSalle LOGIPORT REIT
(LLR)

-

-

-

1.00%*1-

0.50%*1 Merger fee shall be paid within three months from the effective date of the merger
Earnings linked fee： (NOI + gains (losses) on sales) × 10%*1
EPU linked fee：Pre-tax net income × EPU × 0.002%*1

1.00%*1 NAV linked fee：NAV × NAV per unit × 0.6%*1

Merger fee shall be paid within three months of the effective date of the merger
EPU linked fee：Pre-tax net income before deduction of AM fee × EPU before
deduction of AM fee × 0.001%*1- For asset acquisition and asset sale fees, 0.25% is applied to related party transaction
by an overseas real estate holding corporation
Earnings linked fee：Adjusted pre-tax net income × Net income per unit × 0.001%*1
Investment unit price linked fee：Performance against TSE REIT Index ((a) – (b)) ×
market cap (for each FP) × 0.1%*1
1.00%*1 (a)：Fluctuations in MEL's investment unit price (including dividends)(b)：Fluctuations in TSE REIT Index (including dividends)
Merger fee shall be paid within three months of the effective date of the merger

3471

Mitsui Fudosan Logistics Park
(MFL)

0.10%*1

5.50%*1-

0.50% / 0.25%*1

0.50% / 0.25%*1

3481

Mitsubishi Estate Logistics
REIT Investment Corporation(MEL)

0.20%*1-

5.00%*1

1.00%*1

0.50%*1

3487

CRE Logistics REIT (CRE)

0.30%

-

-

1.00% / 0.50%*1

-

3493

Advance Logistics Investment
Corporation (IAL)

0.05%*1-

5.00%*1

1.00% / 0.50%*1

0.50%*1

1.00%*1 Merger fee shall be paid within three months of the effective date of the merger

2979

SOSiLA Logistics REIT (SLR)

0.20%*1-

5.00%*1

1.00%*1

1.00%*1

1.00%*1 AM fee × 0.002%*1- EPU linked fee：Pre-tax net income × Net income per unit × 0.0019%
EPU linked fee：Pre-tax net income × Adjusted EPU × 0.004%*1

EPU linked fee：Net income before deduction of AM fee × EPU before deduction ofMerger fee shall be paid within three months of the effective date of the merger
Healthcare

3455

Healthcare & Medical
Investment Corporation(HCM)*1： Maximum rate *2: Declining rate

DPU linked fee (AM feeⅡ)：DPU before deduction of AM fee Ⅱ × Operating profit

1.00%*1--

1.00% / 0.50%*1

1.00% / 0.50%*1

1.00%*1 before deduction of AM fee Ⅱ × 0.01%*1
Merger fee shall be paid within three months of the effective date of the merger

15Reference: Asset Management Fees Rules for All J-REITs (4)CodeCompany name

AssetsOutstanding(Annual rate)

Asset Acquisition(External /Stakeholder
Transactions)

Net Operating
Income(NOI)

Earnings

Asset Sale
(External /Stakeholder
Transactions)

Merger(External /Stakeholder
Transactions)

Other / Remarks

Complex type / diversified type

8953

Japan Metropolitan Fund
Investment Corporation (JMF)

0.75%*1--

2.00%*1

1.50%*1

AM feeⅡ：Total distribution × 9%*1
If there is losses on sale, there is no asset sale fee

2.00%*1 The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect8954

ORIX JREIT (OJR)

8955

Japan Prime Realty
Investment Corporation (JPR)

8956

NTT UD REIT Investment
Corporation (NUD)8957

Tokyu Real Estate Investment
Trust (TRE)

0.175%

3.00%

Total acquisition
price×0.05%---

0.115-0.125%*2--

0.50%*1

0.50%*1

0.50%

0.50%

2.50%*1

0.50%*1

0.25%*1---

Total income×

1.20%

The merger fee shall be paid by the last day of the month following the month in which

0.50%*1 the merger takes effect

Basic distributable amount × 3.8%×Rate of fluctuation of basic distributable amount
per unit

0.50% The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect
The merger fee shall be paid by the last day of the month following the month in which

0.50%*1 the merger takes effectCF linked fee：Standard CF × 6.0% of declining rate
Investment unit price linked fee：(Average investment unit price in the current FP－- Highest average investment unit price over all previous periods) × No. of units × 0.4％
Acquisition linked fee：(Total acquisition price at the end of the previous month + Total
acquisition price at the end of the month before the previous month) × 0.45% /(12×2)
0.40% AM feeⅡ(DPU linked fee)：Total distribution × 5%
The merger fee shall be paid within three months from the last day of the month inwhich the merger takes effect8960

United Urban Investment
Corporation (UUR)

0.45%

-

-

0.80%

0.80%

8961

Mori Trust Sogo REIT (MTR)

0.20%*1

3.00%*1-

0.05-0.40%*1*2

0.05%*1

0.05-0.40%*1*2 Merger fee shall be paid within three months from the effective date of the merger

8966

Heiwa Real Estate REIT
(HFR)

0.30%*1--

1.00% / 0.50%*1

1.00% / 0.50%*1

1.00% / 0.50%*1 The merger fee shall be paid within three months from the last day of the month in

8968

Fukuoka REIT Corporation
(FRC)

0.25%

3.60%

2.00%

0-0.50% / 0-0.25%*2

0-0.50% / 0-0.25%*2- Asset acquisition / sale fee accrues only for the portion of less than 50 billion yen

8977

Hankyu Hanshin REIT (HHR)

0.15%

-

-

0.50%

0.50%

FFO linked fee：FFO (excluding gains (losses) on Sale) × 4.50%*1
DPU kinked fee：DPU × 50,000*1
which the merger takes effectDistributable amount per unit × NOI × 0.0011％

0.50%*1 The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect8984

Daiwa House REIT
Investment Corporation (DHR)

8987

Japan Excellent (JEI)

3234

3249

0.40%*1-

5.00%*1

0.50% / 0.25%*1

0.50% / 0.25%*1

0.125-5.00%*1*2

5.00%*1---

Mori Hills REIT Investment
Corporation (MHR)

-

-

-

1.00% / 0.10%*1-

Industrial & Infrastructure
Fund Investment Corporation(IIF)

1.00%*1--

2.00%*1

1.50%*1*1： Maximum rate *2: Declining rate

Sustainability index-linked fee
1) Total assets × 0.008% × (1+GHG emissions reduction ratio)*1
2)Total assets × 0.002% × GRESBB rating (1star=0.8～5stars=1.2)*1
0.80%*1 3) Total assets × 0.002% × CDP rating (D-=0.6～A=1.3)*1
The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect
The following declining rate is applied to total assets-linked management fee
100 billion yen or less：0.5%*1- 100 billion yen to 200 billion yen (excluding 100 billion yen)：0.25%*1
200 billion yen or more：0.125%*1
DPU linked fee：DPU × 1,000,000 × 9.0%*1
NAV linked fee：NAV per unit × 1,000,000 × 0.4%*1
Investment unit price linked fee： Performance against TSE REIT Index × Market cap
1.00%*1 × 0.15%*1
The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect
The merger fee shall be paid by the last day of the month following the month in which
2.00%*1 the merger takes effect16

Reference: Asset Management Fees Rules for All J-REITs (5)CodeCompany name

AssetsOutstanding(Annual rate)

Asset Acquisition(External /Stakeholder
Transactions)

Net Operating
Income(NOI)

Earnings

Asset Sale
(External /Stakeholder
Transactions)

Merger(External /Stakeholder
Transactions)

Other / Remarks

Complex type / diversified type

3279

Activia Properties (API)

0.30%*1--

0.70% / 0.50%*1

0.50% / -*1

3295

Hulic Reit (HLC)

0.50%*1--

1.00% / 0.50%*1

1.00% / 0.50%*1

3296

NIPPON REIT Investment
Corporation (NRT)

0.35%*1--

1.00% / 0.50%*1

1.00% / 0.50%*1

3451

Tosei Reit Investment
Corporation (TRI)

0.60%*1

6.00%*1-

1.00% / 0.50%

1.00% / 0.50%

I & DPU linked fee：DPU × NOI × 0.00021%
The maximum amount of management fee Ⅰ and Ⅱ：Total assets × 0.5% (annual
0.70% / 0.50%*1 rate)
The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect
DPU linked fee (AM feeⅡ)：DPU before deduction of AM fee Ⅱ × Operating profit
before deduction of AM fee Ⅱ × 0.004%*1
1.00%*1 The merger fee shall be paid by the last day of the month following the month in which
the merger takes effect
NOI & DPU linked fee ：NOI × (maximum rate 2.5% × DPU volatility) (maximum rateof DPU volatility is 5.0%)
1.00%*1 DPU volatility=(DPU of the current FP –DPU of the previous FP) / DPU of the previous
FP + 1 (if the DPU volatility is 0.75 or less or exceeds 1, it is deemed to be 1)
Merger fee shall be paid within two months of the effective date of the merger

1.00% / 0.50% Merger fee shall be paid within three months of the effective date of the merger
Total assets/ Investment unit price linked fee：Total assets × Performance against
TSE REIT Index (maximum rate of the performance against TSE REIT Index is 0.02%
and minimum rate is -0.02%)
0.80%*1 DPU linked fee (AM freeⅡ)：DPU before deduction of AM fee Ⅱ × Operating profit
before deduction of AM fee Ⅱ × 0.004%*1
Merger fee shall be paid within two months of the effective date of the merger

3309

Sekisui House Reit (SHR)

-

-

-

0.50% / -*1

0.50% / -*1

3462

Nomura Real Estate MasterFund (NMF)

0.45%

5.50%

-

1.00% / 0.50%*1

1.00% / 0.50%*1

3468

Star Asia Investment
Corporation (SAR)

0.20%*1-

7.50%*1

1.00% / 0.50%*1

1.00% / 0.50%*1

1.00% / 0.50%*1 the merger takes effect3470

marimo Regional
Revitalization REIT (MRR)

0.40%*1--

1.00% / 0.50%*1

1.00% / 0.50%*1

1.00% / 0.50%*1 The merger fee shall be paid by the last day of the month following the month in which

MIRAI Corporation (MRI)

0.50%*1

The merger fee shall be paid by the last day of the month following the month in which

NOI & EPU linked fee：NOI × EPU before deduction of AM feeⅡ × 0.0015%
the merger takes effect
OI linked fee：DPU before deduction of AM fee Ⅱ × NOI after depreciation × 0.001%

3476

-

-

1.00%*1

1.00%*1

1.00%*1 *1
Merger fee shall be paid within three months of the effective date of the merger

3488

XYMAXREIT Investment
Corporation (XYR)

1.00%*1-

3492

Takara Leben Real Estate
Investment Corporation (TLR)

0.30%*1-

7.50%*1

1.00%*1-

1.00%*1-

DPU linked fee：DPU before deduction of DPU linked fee × NOI × 0.01%*1- Gains on sale performance fee：Gains on sale × 15%*1

Earnings linked fee：Pre- tax net income ×Pre-tax Net income per unit × 0.003%*1
The maximum total of total assets linked AM fee and earnings linked AM fee is 0.5%

1.00%*1 of the total assets

Merger fee shall be paid within three months of the effective date of the merger
2972

SANKEI REAL ESTATE(SRE)

0.50%*1

2989

Tokaido REIT (TKDR)

0.50%*1*1： Maximum rate *2: Declining rate-

5.00%*1

1.00%*1

1.00%*1

3.00%*1

1.00% / 0.50%*1

1.00%*1

1.00%*1 Merger fee shall be paid within three months of the effective date of the merger-

17

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