July 28, 2020
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive officer(Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato
President and CEO
Contact: Akiko Kanno
Director and CFO
TEL: +81-3-5425-1340

Notice Concerning Status of a Tenant of a Hotel Property (follow-up report)- Signing of Lease Contract Cancellation Agreement with the Current TenantStar Asia Investment Management Co., Ltd. (“Asset Manager”), the asset manager for Star Asia Investment
Corporation (“SAR”) has announced that, with respect to “HOTEL WBF ART STAY OSAKA NAMBA” (the“Property”), an asset managed by SAR as mentioned in the press release dated April 27, 2020 entitled “NoticeConcerning Status of a Tenant of a Hotel Property”, it has signed a “Lease Contract Cancellation Agreement”(hereinafter the “Cancellation Agreement”) with the property tenant WBF Hotel & Resorts K.K. (the “CurrentTenant”). Details are as follows.

1.

Reason for the Cancellation Agreement
As of the end of March 2020, the Current Tenant had operated (held, leased, or managed) 27 hotels
including the Property; however, coming into this year, being significantly affected by the drastic reduction
in inbound demand due to immigration restrictions imposed given the global epidemic of COVID-19 andalso domestically the significant reduction in domestic visitors due to the government’s request for people
to stay home, on April 27, 2020, the operator applied for procedures under the Civil Rehabilitation Act. The
Property was closed down on June 30, 2020.
Since then, negotiations were continued with the attorney to the Current Tenant towards signing theCancellation Agreement, and the Cancellation Agreement was signed today.
Concurrently with the discussions on the Cancellation Agreement, SAR and the Asset Manager has
considered various utilization options for the Property including change in use, however, it was finallydetermined that it is desirable to continue to operate the Property as a hotel, and currently a new tenant(hotel operator) is being sought.

2.

General Description of the Lease Contract Cancellation Agreement
Name of Property： HOTEL WBF ART STAY NAMBA
Name of Tenant： WBF Hotel & Resorts K.K.
Total leasable area
： 2,061.46 ㎡
Percentage of the Property to the Gross Rentable Area
： 100.0%
Percentage to SAR’s Total Rentable Area (note1)： 0.81%Monthly rent amount： Not disclosed (see Note 2)
Security deposit, guarantee money etc.
： Not disclosed (see Note 2)
Signing Date of Cancellation Agreement： July 28, 2020
Cancellation Date
： July 28, 20201

(note1) The percentage to SAR’s Total Rentable Area (254,342.47 ㎡) (as of the end of June) is stated rounded off to thesecond decimal place.
(note2) Cannot be disclosed, as approval has not been obtained from the Current Tenant.

3.

Future Policy Regarding the Property
As described above, as a result of having considered various options for utilization of the Property, SAR
and the Asset Manager have determined that the best option would be to invite a new operator as a hotel.
As of current, we are in discussions with multiple new operator candidates (tenant candidates), and would
like to select the operator which can contribute most to maximize unitholders’ interest.

4.

Future OutlookSince the impact of the Cancellation Agreement on our management status forecast for the fiscal period
ending July 31, 2020 (from February 1, 2020 to July 31, 2020) which was announced in the “(REIT) Financial
Report for Fiscal Period Ended January 31, 2020” dated March 13, 2020 is minimal, there are no changes tothe forecast.
Furthermore, the effects on the management status forecast for the fiscal period ended January 31, 2021
(August 1, 2020 to January 31, 2021) and the fiscal period ending July 31, 2020 (February 1, 2021 to July 31,2021) which were announced in the “Notice Concerning the Forecast of Operating Results and Distributions
Subsequent to the Merger of Star Asia Investment Corporation and Sakura Sogo REIT Investment
Corporation for the Fiscal Periods Ending January 31, 2021 and July 31, 2021” dated March 2, 2020 are
currently being examined. If matters which require disclosure should arise in the future, such notification
will be promptly made.

* Star Asia Investment Corporation website address: http://starasia-reit.com/en/

This is an English translation of the announcement in Japanese dated July 28, 2020.However, no assurance orwarranties are given for the completeness or accuracy of this English translation.

2