October 22, 2021
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Director(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

Announcement concerning the Redemption of Mezzanine Loan Debt
(Prepayment of the Subordinated Loan Claims）
As stated in the press release dated January 24, 2019 entitled “Notice Concerning Acquisition of Mezzanine
Loan Debt, Star Asia Mezzanine Loan Debt Investment Series 4 (Subordinate Loan Claims)”, Star Asia Investment
Corporation (“SAR”) has held in investment the subordinated portion of the non-recourse loan (the “SubordinateLoan Claim”) to GK DS Kaigan (the “GK”), whose collateral asset are the beneficiary interest in trust (the“Collateral Asset”) with DS Kaigan Building (formerly called “Premier Kaigan Building”) as the main entrusted
asset. However, as the GK recently sold the Collateral Asset to a third party, the GK as the borrower of theSubordinated Loan Claim has executed prepayment in full of the Subordinated Loan Claim to SAR. Details aredescribed below.
Given this prepayment, of the 5 mezzanine loan debt investments executed by SAR to date, two of them havebeen redeemed.
1.

Overview of the Subordinated Loan Claim
The Subordinated Loan Claim is the subordinate portion of the loan claim towards the GK, with thecollateral asset being the beneficial interest in trust with DS Kaigan Building as the main entrusted asset. SAR
acquired on January 30, 2019 and continued to hold 3 million yen of the Subordinated Loan Claim, based on
the judgement that the certainty of principal repayment was high, the investment would bring about
diversification of investment targets, dividend income (base rate +5%) would be gained with the effective useof own capital, and also given the expectation towards increase of distributable income.

1

<Overview of Subordinate Beneficiary Interest Structure (as of January 24, 2019)>
GK
Collateral Asset
Premier Kaigan
Building(Current name :DS Kaigan
Building)(Senior loan)
3,354.3 million yen
Lender A (note2)(Mezzanine Loan)
300 million yen(Subordinate LoanClaims)
300 million yenSARLender B (note2)
Appraisal Value
5,750 million yen(note1)(note3)(Equity)
Silent partnership,investment, etc.

(Note 1) The appraisal value as of November 30, 2018 is indicated.
(Note 2) Undisclosed due to the request from the Lender.
(Note 3) The Subordinated Loan Claim was acquired from Lender B on January 30, 2019.
For details regarding the Subordinate Beneficiary Interest described above, please refer to “Notice Concerning
Acquisition of Mezzanine Loan Debt - Star Asia Mezzanine Loan Debt Investment Series 4 (Subordinate LoanClaims)“ announced on January 24, 2019.
2. Prepayment of the Subordinated Loan ClaimWith the sale of the Collateral Asset by the GK, SAR received from the GK an aggregate amount including thefull principal amount of prepayment of the Subordinated Loan Claim, together with accrued interest andbreak-funding costs.
3. Future forecast
The impact of the prepayment of the Subordinated Loan Claim on the operating results is immaterial, andthere are no changes to the forecast of operating results for the fiscal period ending January 31, 2022 (August1, 2021 to January 31, 2022) and the fiscal period ending July 31, 2022 (February 1, 2022 to July 31, 2022)
which were announced in the “(REIT) Financial Report for Fiscal Period Ended July 31, 2021” dated September
14, 2021.
4. Other matters required for investors to appropriately understand and evaluate the above information
In conjunction with the risks related to investments in the mezzanine loan debt, there are no changes to thesection “Part 2. Reference Information, 2. Supplementary Information on Reference Documents, 3. Investment
Risks” found in the securities report submitted on August 2, 2021.
SAR will continue to discuss investment in mezzanine loan debt, which not only realizes diversification of
investment targets, but also boosts distributable profits through effective use of cash on hand allowing SAR toreceive dividend income, as part of the active management strategy that leads to maximization of unitholders’value.
* Star Asia Investment Corporation website: http://starasia-reit.com/en/

This is an English translation of the announcement in Japanese dated October 22, 2021.
However, no assurance or warranties are given for the completeness or accuracy of this English translation.

2