DISCLAIMER
This document has been prepared solely for the purpose of providing U.K. and Dutch
investors with certain information under Article 23 of the European Alternative
Investment Fund Managers Directive (European Directive 2011/61/EU) (the “AIFMD”)as
implemented in their respective jurisdictions. Accordingly, you should not use thisdocument for any other purpose.
Netherlands
The units of Samty Residential Investment Corporation (“SRR” or the “AIF”) are being
marketed in the Netherlands under Section 1:13b of the Netherlands Financial
Supervision Act (Wet op het financieel toezicht, or the “Wft”). In accordance with thisprovision, Samty Asset Management Co., Ltd. (the “AIFM”) has notified the Dutch
Authority for the Financial Markets (Authoriteit Financiële Markten, the “AFM”) of its
intention to offer these units in the Netherlands. The units of SRR will not, directly or
indirectly, be offered, sold, transferred or delivered in the Netherlands, except to or byindividuals or entities that are qualified investors (gekwalificeerde beleggers) within themeaning of Article 1:1 of the Wft. As a consequence, neither the AIFM nor SRR is subject
to the license requirement for investment institutions (beleggingsinstellingen) or their
managers pursuant to the Wft. Consequently, the AIFM and SRR are only subject to thesupervision of the of the Dutch Central Bank (De Nederlandsche Bank, “DNB”) or the
AFM for the compliance with the ongoing regulatory requirements as referred to in the
Dutch law implementation of article 42 of the AIFMD. According to Article 23 theprospectus is not subject to approval by the AFM. No approved prospectus is required tobe published in the Netherlands pursuant to Article 3 of the Regulation (EU) 2017/1129(the “Prospectus Regulation”) as amended and applicable in the Netherlands.

United Kingdom
The units of SRR are being marketed in the United Kingdom pursuant to Article 59 of theUnited Kingdom Alternative Investment Fund Managers Regulations 2013. In accordancewith this provision, the AIFM has notified the Financial Conduct Authority (the “FCA”) of its
intention to offer these units in the United Kingdom.
For the purposes of Financial Services and Markets Act 2000 (as amended, “FSMA”), SRR is
an unregulated collective investment scheme which has not been authorized by the FCA.
Accordingly, any communications of an invitation or inducement to invest in SRR may bemade only to: (i) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or “theOrder”; (ii) high net worth companies, unincorporated associations or other entities fallingwithin Articles 49(2)(a) to (d) of the Order; or (iii) other persons to whom it may lawfully be
communicated (all such persons together being referred to as “Relevant Persons”).
In the United Kingdom, this document and its contents are directed only at Relevant Persons
and must not be acted on or relied on by persons who are not Relevant Persons. The
transmission of this document and its contents in the United Kingdom to any person otherthan a Relevant Person is unauthorized and may contravene the FSMA and other United
Kingdom securities laws and regulations.

Prohibition of Sales to UK Retail Investors
In addition to the restrictions under the AIFMD, as retained by the United Kingdom in its
domestic laws, the units of SRR are not intended to be offered, sold or otherwise madeavailable to and should not be offered, sold or otherwise made available to any retailinvestor in the United Kingdom. For these purposes of this provision, a “retail investor”
means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2
of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European
Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of theprovisions of the FSMA and any rules or regulations made under the FSMA to implement
Directive (EU) 2016/97, where that customer would not qualify as a professional client, as
defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part ofdomestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 ofRegulation (EU) 2017/1129, as it forms part of domestic law by virtue of the EUWA; and theexpression “offer” includes the communication in any form and by any means of sufficient
information on the terms of the offer and the units to be offered so as to enable an investor
to decide to purchase or subscribe the international units. Consequently no key information
document required by Regulation (EU) No 1286/2014, as it forms part of domestic law byvirtue of the EUWA (the “UK PRIIPs Regulation”), for offering or selling the units or2

otherwise making them available to retail investors in the United Kingdom has been
prepared and therefore offering or selling the units or otherwise making them available toany retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.
European Economic Area
In addition to the restrictions under the AIFMD, the units of SRR are not intended to beoffered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the European Economic Area (the “EEA”). For these
purposes, a retail investor means a person who is one (or more) of: (i) a retail client as
defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (the “MiFID II”),
including any client, beneficiary, principal, or similar of any person acting as a trustee, agent,
nominee, or similar; or (ii) a customer within the meaning of Directive (EU) 2016/97, wherethat customer would not qualify as a professional client as defined in point (10) of Article
4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129, as
amended (the “Prospectus Regulation”). Consequently no key information document has
been prepared required by Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) for
offering or selling the units of SRR or otherwise making them available to retail investors in
the EEA. Therefore offering or selling the units of SRR, or otherwise making them available,
to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

3

Article 23 (1)(a)Objectives of the

Samty Residential Investment Corporation (“SRR” or the “AIF”) is investing in high-quality

AIF

residential assets across a broad range of Japan’s regional cities, with the goal of providing asafe, secure, and comfortable living environment through the leasing of these properties,
which SRR believes provide investors with opportunities to own a diversified portfolio of
residential properties located in a broad range of Japan’s regional cities, and constantly strive
to enhance unitholder value by managing these assets over the medium to long term.

Investment

SRR primarily targets diversified residential properties throughout a broad range of cities instrategy

Japan. SRR also acquires operating facilities (hotels, healthcare properties and other operating
facilities) only after conducting a prudent and holistic review of its portfolio size and level ofdiversification. Around 70% of the portfolio comprises residential properties in regional cities
where Samty group possesses a considerable amount of operational experience and expertisein the real estate market. To achieve an appropriate level of diversification while expanding
the portfolio, around 30% of the portfolio comprises residential properties in the greater
Tokyo area.

Types of assets theReal estate, trust beneficiary interests in real estate, real estate securities, specified assets

AIF may invest in

and other assets.

Techniques it may

The principal risks with respect to investment in SRR are as follows:

employ and all•

any adverse conditions in the Japanese economy could adversely affect SRR;

associated risks•

war, terrorism, or a pandemic including COVID-19 may have a significant longterm adverse impact on economic activities, which in turn may adversely
affect the performance of the portfolio and market price of the units;•

SRR may not be able to acquire properties to execute the growth and investment
strategy in a manner that is accretive to earnings;•

illiquidity in the real estate market may limit the ability to grow or adjust theportfolio;•

the past experience of our asset manager, Samty Asset Management Co., Ltd., in theJapanese real estate market is not an indicator or guarantee of future results;•

SRR’s reliance on Samty Co., Ltd., Samty Asset Management Co., Ltd. and other third
service providers could have a material adverse effect on business;•there are potential conflicts of interest between SRR and Samty Group as well as the
AIFM;

•

SRR’s revenues largely comprise leasing revenues from the portfolio properties, which
may be negatively affected by vacancies, decreases in rent, and late or missed
payments by tenants;•

SRR faces significant competition in seeking tenants and it may be difficult to findreplacement tenants;4•increases in prevailing market interest rates may increase interest expense and may
result in a decline in the market price of SRR’s units;•

SRR may suffer large losses if any of the properties incurs damage from a natural or
man-made disaster;•

most of the properties in the portfolio are residential properties;•

any inability to obtain financing for future acquisitions could adversely affect thegrowth of the portfolio;•

SRR’s failure to satisfy a complex series of requirements pursuant to Japanese tax
regulations would disqualify SRR from certain taxation benefits and significantly
reduce the cash distributions to the unitholders; and•ownership rights in some of SRR’s properties may be declared invalid or limited.

In addition, we are subject to the following risks:•

risks related to increasing operating costs;•

risks related to SRR’s dependence on the efforts of the AIFM’s key personnel;•risks related to the restrictive covenants under debt financing arrangement;•risks related to entering into forward commitment contracts;•

risks related to third party leasehold interests in the land underlying SRR properties;•risks related to holding the property in the form of stratified ownership (kubun shoyū)interests or co-ownership interests (kyōyū-mochibun);•risks related to holding the property through trust beneficiary interests;•

risks related to properties not in operation (including properties under development);•risks related to the defective title, design, construction or other defects or problems
in the properties, including non-conformity to agreements;•

risks related to impairment losses relating to the properties;•risks related to tenant leasehold deposits and/or security deposits;•risks related to tenants’ default as a result of financial difficulty or insolvency;•

risks related to the insolvency of master lessors;•

risks related to the insolvency of a property seller following our purchase of aproperty;•risks related to relying on expert appraisals and engineering, environmental andseismic reports as well as industry and market data;•risks related to the presence of hazardous or toxic substances in the properties, orthe failure to properly remediate such substances;•risks related to strict environmental liabilities for the properties;•risks related to the amendment of applicable administrative laws and local
ordinances;•risks related to holding Japanese anonymous association (tokumei kumiai) interests;5•risks related to investments in trust beneficiary interests;•

risks related to the tight supervision by regulatory authorities and compliance withapplicable rules and regulations;•risks related to tax authority disagreement with the AIFM’s interpretations of theJapanese tax laws and regulations;•risks related to being unable to benefit from reductions in certain real estate taxes
enjoyed by qualified J-REITs; and•risks related to changes in Japanese tax laws.

Any applicable

SRR is subject to investment restrictions under Japanese laws and regulations (e.g., the Act on

investment

Investment Trusts and Investment Corporations (the “ITA”), the Financial Instruments andrestrictions

Exchange Act (the “FIEA”)) as well as its articles of incorporation.
SRR must invest primarily in specified assets as defined in the ITA. Specified assets include,
but are not limited to, securities, real estate, leaseholds of real estate, surface rights (chijōken) (i.e., right to use land for the purpose of having a structure on it) or trust beneficiaryinterests for securities or real estate, leaseholds of real estate or surface rights. A listed J-REIT
must invest substantially all of its assets in real estate, real estate-related assets and liquid
assets as provided by the listing requirements. Real estate in this context includes, but is not
limited to, real estate, leaseholds of real estate, surface rights, and trust beneficiary interests
for these assets, and real estate-related assets in this context include, but are not limited to,anonymous association (tokumei kumiai) interests for investment in real estate. Pursuant to
the ITA, investment corporations may not independently develop land or construct buildings,
but must outsource such activities.

Circumstances in

SRR may take out loans or issue long-term or short-term corporate bonds for the purpose ofwhich the AIF may

investing in properties, conducting repairs and related work, paying cash distributions,use leverage

operating capital, repaying obligations (including repayment of tenant leasehold or security
deposits, and obligations related to loans or long-term or short-term corporate bonds) andother activities.

The types andLoans or investment corporation bonds. Currently all of SRR’s outstanding long- and short-sources of leverageterm loans as well as outstanding bonds are unsecured and unguaranteed.

permitted andassociated risks

Loans or investment corporation bonds in which SRR enters or SRR issues may be subject torestrictive covenants in connection with any future indebtedness that may restrict operations
and limit its ability to make cash distributions to unitholders, to dispose of properties or toacquire additional properties. Furthermore, if SRR were to violate such restrictive covenants,
such as with regard to loan-to-value ratios, lenders may be entitled to require SRR tocollateralize portfolio properties or demand that the entire outstanding balance be paid.
In the event of an increase in interest rates, to the extent that SRR has any debt with6

unhedged floating rates of interest or SRR incurs new debt, interest payments may increase,which in turn could reduce the amount of cash available for distributions to unitholders.
Higher interest rates may also limit the capacity for short- and long-term borrowings, which
would in turn limit SRR’s ability to acquire properties, and could cause the market price of theunits to decline.
Any restrictions on

The maximum amount of each loan and corporate bond issuance is 1 trillion yen, and theleverageaggregate amount of all such debt cannot exceed 1 trillion yen.

Any restrictions on

No applicable arrangements.

collateral and asset
reusearrangements
Maximum level of

SRR has set an upper limit of 60% as a general rule for its loan-to-value, or LTV, ratio and 45%

leverage which theto 55% as the target LTV ratio range, in order to operate with a stable financial condition. SRR

AIFM is entitled tomay, however, temporarily exceed such levels as a result of property acquisitions or other

employ on behalf

events.

of the AIF
Article 23(1) (b)Procedure by

Amendment of the articles of incorporation. Amendment requires a quorum of a majority ofwhich the AIF may

the total issued units and at least a two-thirds vote of the voting rights represented at thechange its

meeting.

investment

incorporation, unitholders who do not attend and exercise their voting rights at a general

strategy /meeting of unitholders are deemed to be in agreement with proposals submitted at theinvestment policy

meeting, except in cases where contrary proposals are also being submitted.

Unitholders should note, however, that under the ITA and our articles of

Additionally, the guidelines of the AIFM, which provide more detailed policies within SRR’s
overall investment strategy and policy, can be modified without such formal amendment of
the articles of incorporation.
Article 23(1) (c)Description of the

SRR is a corporate-type investment trust in the form of investment corporation (toshi hojin)

main legal

provided for under the ITA. Therefore, the relationship between SRR and its unitholders is

implications of thegoverned by SRR’s articles of incorporation (as opposed to individual agreements), which cancontractual

be amended from time to time upon resolution of a general unitholders’ meeting. SRR’s

relationshiparticles of incorporation stipulate rules relating to general unitholders meetings, including theentered into forconvocation, setting of record date, exercise of voting rights, resolutions and election of SRR’s

the purpose of

directors.

investment,

The relationship between SRR and its unitholders is also governed by, and is subject to theincludingprovisions of, Japanese law, including the ITA.

jurisdiction,
applicable law, andThe courts in Japan would recognize as a valid judgment any final and conclusive civil7

the existence or

judgment for monetary claims (which, for this purpose, are limited to those of a purely civil

not of any legal

nature and do not include monetary claims of the nature of criminal or administrative

instruments

sanction, such as punitive damages, even though they take the form of civil claims) against

providing for the

SRR obtained in a foreign court provided that (i) the jurisdiction of such foreign court isrecognition andadmitted under the laws of Japan, (ii) SRR has received service of process for theenforcement ofcommencement of the relevant proceedings, otherwise than by a public notice or any method

judgments in thecomparable thereto, or has appeared without any reservation before such foreign court, (iii)

territory where theneither such judgment nor the relevant proceeding is repugnant to public policy as applied in

AIF is establishedJapan, (iv) there exists reciprocity as to the recognition by such foreign court of a final
judgment obtained in a Japanese court and (v) there is no conflicting judgement on thesubject matter by any Japanese court.
SRR has entered into a sponsor support agreement with each of Samty Co., Ltd., which owns
67% of the AIFM, and Daiwa Securities Group Inc., which owns 33% of the AIFM to receive
support for property acquisition and information regarding the sale of certain properties.
SRR has also entered into the following agreements with third service providers:•

An asset custody agreement regarding SRR’s assets with Mizuho Trust & Banking Co.,
Ltd.;

•

A transfer agency agreement regarding the units with Mitsubishi UFJ Trust andBanking Corporation;•

General administrative agreements regarding institution management with Mizuho
Trust & Banking Co., Ltd.;•

General administrative agreements regarding investment corporation bonds with
Mizuho Bank, Ltd.; and•General administrative agreements regarding accounting with Reiwa Accounting
Holding. Co., Ltd. and Reiwakaikeisha Tax Corporation.

The above agreements are governed by Japanese law.
SRR is not involved in or threatened by any legal arbitration, administrative or otherproceedings, the results of which might, individually or in the aggregate, be material.
Article 23(1) (d)The identity of the• AIFM (Asset Manager): Samty Asset Management Co., Ltd.

AIFM, AIF's

The Asset Manager carries out operations related to the management of SRR’s assets,

depositary, auditor

operations related to the financing of SRR, reporting to SRR, and carries out otherand any otheroperations agreed upon separately between SRR and the Asset Manager in accordance8

service providers

with the asset management agreement and the following pertinent rules and regulations

and a description(including asset management guidelines).

of their duties andthe investors' rights
thereto• Auditor: Ernst & Young ShinNihon LLC
The independent auditor audits financial statements and prepare audit reports.
• Custodian and General Administrators (Institution Management): Mizuho Trust & Banking
Co., Ltd.
The Custodian carries out asset custody operations for SRR, in accordance with the asset
custodian agreement.
The General Administrators (Institution Management) carries out administrative
operations related to the institutional management (Board of Directors’ Meeting,
Unitholders’ Meeting) of SRR, in accordance with the general administrative agreement(institutional operations and administration).
• Transfer Agent: Mitsubishi UFJ Trust and Banking Corporation
The Transfer Agent prepares the unitholder registry, investment corporation bond registerand other related records and carries out administration related to the unitholder registry
and investment corporation bond register, administration related to the issuance ofinvestment securities, administration related to the payment of proceeds for distributions
to unitholders, and administration related to claims by shareholders for the exercising of
their rights and receipt of other requests from unitholders for SRR, in accordance with thetransfer agent agreement.
• General Administrator (Accounting and Tax): Reiwa Accounting Holding. Co., Ltd .
• General Administrator (Tax): Reiwakaikeisha Tax Corporation
The General Administrator (Accounting and Tax) carries out (1) calculation work, (2)preparation of accounting records, and (3) tax-related administrative operations for SRR, in
accordance with the accounting administration agreement.
• Fiscal Agent: Mizuho Bank, Ltd.
The Fiscal Agent provides administrative services in connection with the SRR’s investment
corporation bonds.
Service providers owe contractual obligations under their respective agreements with the AIF
or AIFM, as the case may be. In addition, the FIEA provides that an asset manager owes a JREIT a fiduciary duty and must conduct its activities as the asset manager in good faith. The
FIEA also prohibits an asset manager from engaging in certain specified conduct, including
entering into transactions outside the ordinary course of business or with related parties of
the asset manager that are contrary to or violate the J-REIT’s interests. Pursuant to the ITA,
the unitholders have the right to approve the execution or termination of the asset
management agreement at a general meeting of unitholders.

Article 23(1) (e)9Description of how

Not applicable.

the AIFM complies
with therequirements tocover professional
liability risks (ownfunds /
professional
indemnity
insurance)

Article 23(1) (f)Description of any

Not applicable. There is no delegation of such functions beyond the AIFM, which isdelegated

responsible for portfolio and risk management, and the Custodian, which is responsible formanagement

safekeeping activities.

function such as
portfolio
management orrisk management
and of any
safekeeping
function delegatedby the depositary,
the identificationof the delegate andany conflicts ofinterest that may
arise from suchdelegations
Article 23(1) (g)Description of the

SRR makes investment decisions based on its investment strategies and in accordance with its

AIF’s valuation

articles of incorporation and based on the results of due diligence, including the valuation ofprocedure andproperties and consideration of the property appraisal value.

pricing

SRR shall evaluate assets in accordance with its Article of Incorporation. The methods andmethodology,

standards that SRR uses for the evaluation of assets are based on the Regulations Concerning

including thethe Calculations of Investment Corporations, as well as the Regulations Concerning Realmethods used in

Estate Investment Trusts and Real Estate Investment Corporations and other regulations

10

valuing hard-to-

stipulated by ITA, in addition to Japanese GAAP. J-REITs may only use the valuation methods

value assets

prescribed in the rules of the Investment Trusts Association, Japan, which emphasize market
price valuation.

Article 23(1) (h)Description of the

SRR seeks to manage the capital resources and liquidity sources to provide adequate funds for

AIF’s liquidity risk

current and future financial obligations and other cash needs and acquisitions. SRR manages

management,

associated liquidity and interest rate fluctuation risk in ways such as diversifying its credit

includingsources and maturities, and by lengthening terms and mainly using fixed-rate loans.

redemption rights
in normal and

SRR is a closed-end investment corporation, and unitholders are not entitled to request the

exceptional

redemption of their investment.

circumstances andexisting
redemption
arrangements withinvestors

Article 23(1) (i)11

Description of all

Directors’ Compensation: The articles of incorporation provide that the AIF may pay its

fees, charges andexecutive officers up to 250,000 yen and supervisory officers up to 500,000 yen per month.

expenses and a

The board of officers is responsible for determining a reasonable compensation amount for

maximum amountthe executive officer and each of the supervisory officers.

which is directly /indirectly borne by

Asset Management Fee: SRR will pay the AIFM an asset management fee as follows:

the investors•

Management Fee 1 – The AIFM receives an asset-based fee equal to 0.45% perannum of SRR’s total assets (as stated on SRR’s balance sheet as of the end of eachfiscal period in accordance with Japanese GAAP, which is applicable in Management
Fees 2 below.).

•

Management Fee 2 – The AIFM also receives an earnings-based fee equal to 5.0% of
distributable income before income taxes, excluding the earnings-based fee or gain
on negative goodwill (if any), calculated with respect to each fiscal period in
accordance with Japanese GAAP, less any loss carried forward from the previous
fiscal period, multiplied by SRR’s total assets less 50 billion yen, and divided by SRR’s
total assets.

•

Acquisition Fee – For each property that SRR acquires, the AIFM receives anacquisition fee of 1.0% of the total amount of the acquisition price of said property(excluding consumption tax, local consumption tax, and acquisition costs). In casewhere an acquired property is trust beneficiary interests and is not acquired from
related parties, the acquisition fee is calculated using the following formula: sum of(i) 0.5% of the difference between the upper limit (excluding consumption tax andlocal consumption tax) of brokerage fees prescribed in the article 46 of the Real
Estate Brokerage Act, and the brokerage fees of such trust beneficiary interests and(ii) 1.0% of the total amount of the acquisition price of such trust beneficiaryinterests.

•

Disposition Fee – For each property that SRR disposes of, the AIFM receives adisposition fee of 0.5% of the total amount of the disposition price of such property(excluding consumption tax, local consumption tax and expenses).

•

Merger Fee – In case of a merger into a new entity or an absorption-type merger (i.e.,
where SRR survives or is dissolved), if the AIFM conducts research and evaluation of
the assets held by the other party to the merger, the AIFM receives a merger fee
equal to 1.0% or less of the appraisal value of the real estate related assets held by
the other party to the merger as of the effective date of the merger (rounded down
to the nearest yen).

General Administrator Fee (Institution Management):

12•The general administrator fee is determined through discussions with a maximum
fixed fee of 5 million yen per fiscal period.

•

If the above fee arrangement becomes inadequate due to changes in economic
conditions or other circumstances, SRR may revise the custodian fees based on
mutual consultation between SRR and the custodian.

General Administrator Fee (Accounting and Tax):•

Monthly fee is calculated using the following formula: sum of (i) Monthly Variable Fee
A, which is equal to the total acquisition price of the properties that SRR owns at theend of each month multiplied by up to a maximum of 0.01%, and (ii) Monthly
Variable Fee B, which is equal to up to a maximum of 50,000 yen (10,000 yen as ofthe date hereof) multiplied by the number of properties that SRR owns at the end ofeach month. When SRR acquires a new property, SRR pays to the General
Administrator (Accounting and Tax) an initial registration fee, up to a maximum of 1
million yen, determined through discussion.

•

If the above fee arrangement becomes inadequate due to changes in economic
conditions or other circumstances, SRR may revise the general administrator fee
based on mutual consultation with the General Administrator (Accounting and Tax).

General Administrator Fee (Tax):•SRR pays to the General Administrator (Tax) a monthly fixed fee of 550,000 yen. SRR
may determine the fee for services related to tax investigation, liquidation and othermatters based on mutual consultation with the General Administrator (Tax).

•

If the above fee arrangement becomes inadequate due to changes in economic
conditions or other circumstances, SRR may revise the general administrator fee
based on mutual consultation with the General Administrator (Tax).

Transfer Agent Fee:•

Standard Fee: Standard transfer agent fees are for services such as the preparation,
maintenance and storage of SRR’s unitholder register; and preparation of materials
concerning end-of-period unitholder statistical data. Monthly standard fees arecalculated as one sixth of the total amount calculated using the relevant perunitholder rates as shown below, subject to a discount of 35%, provided, however,that the minimum monthly fee is ¥220,000.

13•Up to 5,000 ......................................................................

350 yen5,001 to 10,000 ................................................................

330 yen

10,001 to 30,000 ..............................................................

280 yen30,001 to 50,000 ..............................................................

230 yen50,001 to 100,000 ............................................................

180 yenMore than 100,001 ..........................................................

150 yen

Other fees: SRR also pays certain other fees in addition to the standard fee inconnection with the administration and handling of distributions (minimum of
350,000 yen per distribution) and other shareholder related functions.

Custodian Fee: SRR will pay the Custodian a fee for each fiscal period calculated as follows:•

SRR pays to the custodian a custodian fee for each fiscal period payable by the end of
the month immediately following the relevant fiscal period. The custodian fee,
subject to a maximum fee based on the total amount of SRR’s assets as of the end of
the previous fiscal period as set forth below, is determined through discussion.
Total Amount of Assets
as of the Previous Fiscal

Calculation method

Period-end(JPY billion)
Portions not exceeding 20

9.6 million yen
0.0037% of Amount of Assets as of the previous

Over 20 to 50

fiscal period-end
0.0036 % of Amount of Assets as of the previous

Over 50 to 75

fiscal period-end
0.0035% of Amount of Assets as of the previous

Over 75 to 100

fiscal period-end
0.0034% of Amount of Assets as of the previous

Over 100 to 150

fiscal period-end
0.0032% of Amount of Assets as of the previous

Over 150 to 200

fiscal period-end

140.0030% of Amount of Assets as of the previous
Over 200 to 250

fiscal period-end
0.0025% of Amount of Assets as of the previous

Over 250•

fiscal period-end

If the above fee arrangement becomes inadequate due to changes in economic
conditions or other circumstances, SRR may revise the custodian fee based on mutual
consultation with the custodian.

•

Should SRR acquire actual real estate (rather than a trust beneficiary interest in realestate or deposits in banks), the custodian fee shall equal the amount agreed uponby SRR and the custodian up to the semi-annual amount determined by thecalculation formula above, plus an amount agreed upon by SRR and the custodian up
to 200,000 yen (30,000 yen as of the date hereof) multiplied by the number of actual
real estate SRR owns during the applicable period multiplied by the number ofmonths SRR owns such properties during the applicable period. SRR shall discuss ingood faith with the custodian whether to amend the custodian fee should SRR
acquire assets other than actual real estate, trust beneficiary interests or deposits inbanks.

Auditor fee: A fixed amount set by the board of officers of up to 20 million yen per fiscal
period.
Fiscal agent fee: Pursuant to the fiscal agency agreement, SRR paid the fiscal agent the fiscal
agent fee of 5 million yen, plus national and local consumption tax, in connection with thefiscal agent service and issuance and payment agent services for its 2nd unsecured
investment corporation bonds. Pursuant to the fiscal agency agreement, SRR paid the fiscal
agent the fiscal agent fee of 3.97 million yen, plus national and local consumption tax, inconnection with the fiscal agent service and issuance and payment agent services for its 1st
unsecured investment corporation bonds on December 16, 2020, and the fiscal agent fee of
5.3 million yen, plus national and local consumption tax, in connection with the fiscal agent
service and issuance and payment agent services for its 2nd unsecured investment
corporation bonds on December 8, 2021.
Article 23(1) (j)Description of theUnder Article 77 paragraph 4 of the Act on Investment Trusts and Investment Corporations of

AIFM's procedure

Japan, which applies the requirements of Article 109 paragraph 1 of the Companies Act toto ensure fair

investment corporations, investment corporations are required to treat unitholders equally15treatment ofdepending on the number and content of units held. In addition, upon liquidation, theinvestors andallotment of residual assets to unitholders is required to be made equally depending on thedetails of any

number units held under Article 77 paragraph 2 item 2 and Article 158 of the ITA.

preferential
treatment received
by investors,
including detailingthe type ofinvestors and theirlegal or economic
links with the AIF
or AIFM
Article 23(1) (k)The latest annual

Not applicable.

report referred toin Article 22(1)Article 23(1) (l)The procedure and

SRR is authorized under the articles of incorporation to issue up to 2 million units. Its units

conditions for thehave been listed on the Tokyo Stock Exchange since June 30, 2015. Secondary market sales

issue and sale ofand transfers of units will be conducted in accordance with the rules of the Tokyo Stockthe units

Exchange. Unit prices on the Tokyo Stock Exchange are determined on a real-time basis by theequilibrium between bids and offers. The Tokyo Stock Exchange sets daily price limits, which
limit the maximum range of fluctuation within a single trading day. Daily price limits are set
according to the previous day’s closing price or special quote.

Article 23(1) (m)Latest net asset

SRR’s unit’s latest market price is publicly available at the Tokyo Stock Exchange or fromvalue of the AIF or

financial information vendors (including Reuters, which can be viewed at

latest market price

http://www.reuters.com/finance/stocks/overview?symbol=3459.T ).

of the unit or shareof the AIF

Article 23(1) (n)16Details of the

The units of SRR were listed on the Tokyo Stock Exchange on June 30, 2015.

historical

The most recent four fiscal period performance of the units is as follows.

performance of the

Fiscal period (six months

Total Assets

Total Net Assets

Net Assets per unit

AIF, whereended)(JPY million)(JPY million)(base value) (JPY)available

July 31, 2021

124,926

59,91893,724January 31, 2022

154,849

75,981

98,725

July 31, 2022

155,528

75,99098,736

January 31, 2023

171,482

84,141

100,320

July 31, 2023

171,452

83,980100,128January 31, 2024

171,974

83,881

100,010

Article 23(1) (o)Identity of the

Not applicable.

prime broker, anymaterial
arrangements of
the AIF with its
prime brokers, howconflicts of interest
are managed withthe prime broker
and the provisionin the contract withthe depositary on
the possibility oftransfer and reuseof AIF assets, andinformation about
any transfer of
liability to theprime broker that
may exist
Article 23(1) (p)Description of how

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodically through17and when periodic

its Internet website or semi-annual report.

disclosures will bemade in relation toleverage, liquidity
and risk profile of
the assets,pursuant to Articles
23(4) and 23(5)Article 23(2)The AIFM shallNot applicable.

inform theinvestors before
they invest in the
AIF of any
arrangement madeby the depositary
to contractuallydischarge itself ofliability inaccordance with
Article 21(13)The AIFM shall also

Not applicable.

inform investors of
any changes withrespect todepositary liability
without delay
Article 23(4)(a)Percentage of the AIF's assets which

There are no assets that are subject to special arrangements arising fromare subject to special arrangements

their illiquid nature.

arising from their illiquid nature. The
percentage shall be calculated as the
net value of those assets subject tospecial arrangements divided by the
net asset value of the AIF concerned

18Overview of any special

There are no such special arrangements.

arrangements, including whether
they relate to side pockets, gates orother arrangements
Valuation methodology applied to

There are no such special arrangements.

assets which are subject to sucharrangements
How management and performance

There are no such special arrangements.

fees apply to such assets
Article 23(4)(b)Any new arrangements for managing

Any new arrangements or change in applicable arrangements will be

the liquidity of the AIF

disclosed at an appropriate time.

For each AIF that the AIFM manages

Any new arrangements or change in applicable arrangements will bethat is not an unleveraged closed-end

disclosed at an appropriate time.

AIF, notify to investors whenever they
make changes to its liquidity
management systems (which enable
an AIFM to monitor the liquidity riskof the AIF and to ensure the liquidity
profile of the investments of the AIF
complies with its underlying
obligations) that are material inaccordance with Article 106(1) ofRegulation (EU) No 231/2013 (ie.
there is a substantial likelihood that areasonable investor, becoming awareof such information, would reconsider
its investment in the AIF, including
because such information could
impact an investor’s ability to
exercise its rights in relation to its
investment, or otherwise prejudice
the interests of one or more investors
in the AIF).

19Immediately notify investors where

Any new arrangements or change in applicable arrangements will bethey activate gates, side pockets ordisclosed at an appropriate time.

similar special arrangements or
where they decide to suspend
redemptions
Overview of changes to liquidity

Any new arrangements or change in applicable arrangements will bearrangements, even if not special

disclosed at an appropriate time.

arrangements
Terms of redemption and

SRR is a closed-end investment corporation, and unitholders are notcircumstances where management

entitled to request the redemption of their investment.

discretion applies, where relevant
Also any voting or other restrictions

There are no voting or other restrictions on the rights attaching to units.

exercisable, the length of any lock-up
or any provision concerning ‘first inline’ or ‘pro-rating’ on gates andsuspensions shall be included
Article 23(4)(c)
The current risk profile of the AIF and

Deposits are exposed to risks of failure of the financial institution holding

the risk management systems

the deposit and other credit risks, but such risks are controlled throughemployed by the AIFM to manage

diversification of financial institutions holding the deposits.

those risks
The fund proceeds from borrowings and issuance of investment
corporation bonds are used for the purpose of investing in properties,
conducting repairs, paying cash distributions, operating the AIF, repaying
obligations and other activities. These borrowings and investment bonds
are exposed to liquidity risks. SRR strives to reduce the liquidity risks and arisk of rising interest rates by diversifying repayment dates, fee, and soforth.
Derivative transactions are also utilized to hedge the interest rate risks
arising from any borrowing or other debts.
SRR retains cash and deposits sufficient to response any potential financeneeds, including funds for acquiring asset, paying cash distributions, and soforth.
Measures to assess the sensitivity of

No such measures have been implemented.

the AIF’s portfolio to the most20

relevant risks to which the AIF is or
could be exposed
If risk limits set by the AIFM have

No such situation has occurred.

been or are likely to be exceeded andwhere these risk limits have been
exceeded a description of thecircumstances and the remedial
measures taken
Article 23(5)(a)Any changes to the maximum amountAny new arrangements or change in applicable arrangements will beof leverage which the AIFM may

disclosed at an appropriate time.

employ on behalf of the AIF,
calculated in accordance with thegross and commitment methods. This
shall include the original and revised
maximum level of leverage calculated
in accordance with Articles 7 and 8 ofRegulation (EU) No 231/2013,
whereby the level of leverage shall becalculated as the relevant exposure
divided by the net asset value of the
AIF.
Any right of the reuse of collateral or

No such right or guarantee exists.

any guarantee granted under theleveraging agreement, including thenature of the rights granted for thereuse of collateral and the nature of
the guarantees granted
Details of any change in service

Any new arrangements or change in applicable arrangements will be

providers relating to the above.

disclosed at an appropriate time.

Article 23(5)(b)Information on the total amount of

The aggregate amount of debt with interest is JPY 85,650 million as ofleverage employed by the AIF

January 31, 2024.

calculated in accordance with thegross and commitment methods

21