March 2, 2020
For Immediate Release
Real Estate Investment Trust Securities Issuer
Star Asia Investment Corporation
Representative: Atsushi Kato, Executive Director(Securities Code: 3468)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative: Atsushi Kato, President and CEO
Inquiries:
Akiko Kanno, Director and CFO
TEL: 03-5425-1340
Notice Concerning Revision to Forecasts of Operating Results and Distributions
for the Fiscal Periods ending January 31, 2020 and July 31, 2020

Star Asia Investment Corporation (SAR) announces that it has decided to revise the forecasts of operating
results and distributions for the fiscal periods ending January 31, 2020 (8th Fiscal Period: August 1, 2019 toJanuary 31, 2020) and July 31, 2020 (9th Fiscal Period: February 1, 2020 to July 31, 2020) described in“(REIT) Financial Report for Fiscal Priod Ended July 31, 2019” announced on September 12, 2019 (the“Previous Forecast”).
SAR also plans to announce the account settlement for the fiscal period ended January 31, 2020 (8 th Fiscal
Period: August 1, 2019 to January 31, 2020) on March 13, 2020.

1. Revision to the forecasts of operating results and distribution for the fiscal period ended January 31,2020
Operating Operating
revenueincome(million(millionyen)yen)

Ordinary
income(millionyen)

Net
Income(millionyen)

Cashdistribution
per unit (notincluding cash
distribution inexcess ofearnings) (yen)Cashdistribution
per unit(includingcash
distribution
in excess ofearnings)
(yen)

Cash
distribution
in excess ofearnings perunit (yen)Previous
Forecast
(A)

3,199

1,670

1,441

1,441

2,770

0

2,770

Revisedforecast
(B)

3,227

1,721

1,494

1,493

2,788

0

2,788

Change(C)=(B)-(A)

2851

52

52

18018

Rate ofchange(D)=(C)/(A)

0.9%

3.1%

3.7%

3.7%

0.6%

-0.6%

1

(Reference)
Forecasted total number of outstanding investment units of SAR as of the end of the fiscal period: 540,824 units(Refer to the “Investment units” in the assumptions set forth in the Exhibit.)

2. Revision to the forecasts of operating results and distribution for the fiscal period ending July 31, 2020
Operating Operating
Ordinary
revenueincomeincome(million(million(million yen)
yen)
yen)

Net
Income(millionyen)

Cashdistribution
per unit (notincluding cash
distribution inexcess ofearnings)
(yen)

Cash
distribution
per unit(includingcashdistribution
in excess ofearnings)(yen)

Cashdistribution
in excess ofearnings perunit (yen)Previous
Forecast
(A)

3,266

1,752

1,484

1,483

2,770

0

2,770

Revisedforecast
(B)

3,949

2,064

1,790

1,790

3,310

0

3,310

Change(C)=(B)-(A)

683

312

306

306

540

0540

Rate ofchange(D)=(C)/(A)

20.9%

17.8%

20.6%

20.6%

19.5%

-19.5%(Reference)
Forecasted total number of outstanding investment units of SAR as of the end of the fiscal period: 540,824 units(Refer to the “Investment units” in the assumptions set forth in the Exhibit.)(Note)
1.

2.
3.

The forecasts are calculated as of today, based on the assumptions set forth in the Exhibit “Assumptions for theForecast of Operating Results and Distributions for the Fiscal Periods Ended January 31, 2020 and Ending July 31,2020”. The actual operating revenue, operating income, ordinary income, net income, cash distributions per unit
(not including cash distributions in excess of earnings) and cash distributions in excess of earnings per unit may
differ due to future acquisitions or sales of properties, changes in the real estate market, changes in rent income
accompanying changes in the tenants, changes in the investment management environment such as theunexpected need to perform repairs, fluctuations in interest rates and other factors affecting SAR. The forecasts do
not guarantee the accurancy of the amount of distributions stated above.
Revisions may be made to the forecasts if we envisage a discrepancy of more than a certain level in our forecasts.
Amounts less than one unit have been rounded down and percentage figures are rounded to the first decimal place.

3. Reason for revisions and announcement
Due to acquisition of real estate beneficiary interests in trust of 2 properties, acquisition of 1 mezzanine
loan debt and transfer of real estate beneficiary interest in trust of 1 property (the “Transfer”) announced
in the “Notice Concerning the Acquisition and Transfer of Trust Beneficiary Interests in Domestic Real
Estates (5th Asset Replacement)” and “Notice Concerning Acquisition of Mezzanine Loan Debt – (Star AsiaMezzanine Loan Investment Series 5 (Class B beneficiary interests)) –” released today, assumptions2

underlying operating results forecasts for the fiscal period ending July 31, 2020 (from February 1, 2020 toJuly 31, 2020) described in “(REIT) Financial Report for Fiscal Period Ended July 31, 2019” released on
September 12, 2019 have changed and 10% or more change from the forecast of operating revenue and 5%
or more change from the forecast of distribution per unit are expected to occur in the fiscal period, thus
SAR announces the revision to forecasts of operating results and distribution for the fiscal period ending
July 31, 2020. SAR also announces the operating results and cash distribution for the fiscal period ended
January 31, 2020.
4. Others
The revision to forecasts for the fiscal period ending July 31, 2020 above take gain on sale from the Transfer
described in “Operating revenue” and asset due diligence cost and advisory remunerations etc. withregards to the merger with Sakura Sogo REIT Investment Corporation described in “Operating expenses” inExhibit “Assumptions for the Forecast of Operating Results and Distributions for the Fiscal Periods Ended
January 31, 2020 and Ending July 31, 2020” into consideration.

<Other press releases published today >・Notice Concerning Execution of a Merger Agreement by and between Star Asia Investment
Corporation and Sakura Sogo REIT Investment Corporation
・
Notice Concerning Split of Investment Units
・
Notice Concerning the Forecast of Operating Results and Distributions Subsequent to the Merger ofStar Asia Investment Corporation and Sakura Sogo REIT Investment Corporation for the Fiscal Periods
Ending January 31, 2021 and July 31, 2021
・
Notice Concerning the Acquisition and Transfer of Trust Beneficiary Interests in Domestic Real Estates(5th Asset Replacement)”
・Notice Concerning Acquisition of Mezzanine Loan Debt – (Star Asia Mezzanine Loan Debt Investment
Series 5 (Class B Beneficiary interest)) –・
Notice Concerning Debt Financing
・
Notice Concerning Partial Amendment to the Management Guidelines of the Asset Manager・Supplemental Materials Concerning the Documents Published Today＊ This material is distributed to the press club of the Tokyo Stock Exchange (Kabuto Club), the pressclub of the Ministry of Land, Infrastructure, Transport and Tourism, and the press club forconstruction trade publications of the Ministry of Land, Infrastructure, Transport and Tourism.
＊ Star Asia Investment Corporation website address: http://starasia-reit.com/en/
This is an English translation of the announcement in Japanese dated March 2, 2020. However, no assurance orwarranties are given for the completeness or accuracy of this English translation.

3

[Exhibit]
Assumptions for the Forecast of Operating Results and Distributions
for the Fiscal Periods Ended January 31, 2020 and Ending July 31, 2020
Item

Assumptions

Calculation
Period➢ Fiscal period ended January 31, 2020 (the 8th fiscal period): August 1, 2019 –January 31, 2020 (184 days)➢ Fiscal period ending July 31, 2020 (the 9th fiscal period): February 1, 2020 – July 31,2020 (182 days)

Assets underManagement➢ It is assumed that in addition to the assets held by SAR today (34 real estate trust
beneficiary interests, 3 mezzanine loan debts, and 2 equities in investments insilent partnerships (collectively, “Currently Held Assets” and each of thoseconcerning real estate trust beneficiary interests shall be referred to as “CurrentlyHeld Assets (Real Estates.)”, those concerning mezzanine loan debts shall bereferred to as “Currently Held Assets (Mezzanine)”, and those concerning equities
in investments in silent partnerships shall be referred as “Currently Held Assets(Silent Partnership)”)), (i)SAR will acquire real estate trust beneficiary interests
regarding Urban Park Ichigao (Note 1) and Urban Park Gyotoku (Note 2) (these realestate trust beneficiary interests shall be collectively referred to as, the “Assets
Planned to be Acquired (Real Estate)”) as described in <Acquisitions> below, (ii)
SAR will acquire Star Asia Mezzanine Loan Investment Series 5 (Class B beneficiaryinterests) (the “Assets Planned to be Acquired (Mezzanine)” and together with theAssets Planned to be Acquired (Real Estate), “Assets Planned to be Acquired”), and(iii) SAR will sell the real estate trust beneficiary interests regarding Alphabet Seven
which is currently owned by SAR (the “Asset Planned to be Transferred”) as
described in <Transfer> below. Please refer to the “Notice Concerning theAcquisition and Transfer of Trust Beneficiary Interests in Domestic Real Estates (5thAsset Replacement)” and the “Notice Concerning Acquisition of Mezzanine Loan
Debt – (Star Asia Mezzanine Loan Investment Series 5 (Class B beneficiaryinterests)) -” released by SAR today for details of the Assets Planned to be Acquired
and the Asset Planned to be Transferred.
(Note1) This property will be given this name after the acquisition by SAR. The property iscurrently named “Chrysantheme Ichigao” but will change its name to the namespecified above immediately after SAR acquires it; the same hereafter.
(Note2) This property will be given this name after the acquisition by SAR. The property iscurrently named “La Soeur Gyotoku” but will change its name to the name specified
above immediately after SAR acquires it; the same hereafter.

<Acquisitions>
Name of property: Urban Park Ichigao
Scheduled date of acquisition: March 13, 2020
Name of property: Urban Park Gyotoku
Scheduled date of acquisition: March 13, 20204

ItemAssumptions
Name of asset: Mezzanine Loan Investment Series 5 (Class B beneficiaryinterests)
Scheduled date of acquisition: March 6, 2020
<Transfer>
Name of property: Alphabet Seven
Scheduled date of transfer: July 1, 2020 40% of the quasi-co-ownershipinterests
December 1, 2020 60% of the quasi-co-ownershipinterests➢ It is assumed that there are no changes in the assets under management (such asnew acquisitions of properties or the sale of existing properties and the like) otherthan the acquisition of the Assets Planned to be Acquired or the transfer of theAsset Planned to be Transferred.

OperatingRevenue➢ The calculation of leasing business revenue from Currently Held Assets (RealEstates.) and the calculation of leasing business revenue from Assets Planned to beAcquired (Real Estates.) take into consideration, among other matters, markettrends, based on the details of lease agreements in effect as of today, andinformation received from current holders and the details of lease agreements
planned to be in effect as of the planned acquisition date, respectively. Operating
revenue assumes that tenants will not be delinquent on rent or fail to pay rent.
➢ Interest on or distribution revenue from Currently Held Assets (Mezzanine) iscalculated based on the prospectus providing the details of Currently Held Assets(Mezzanine) in effect as of the date hereof, and on details of trust agreements, andinterest on or distribution revenue from Assets Planned to be Acquired(Mezzanine) is calculated based on details of agreements planned to be executed.
Operating revenue assumes that there is no failure to pay interests or dividends.
➢ The forecast dividend income from Currently Held Assets (Silent Partnership) is
calculated on the assumption that the real estate by which cash flow is backed
maintains a stable operating condition.
➢ Gain on sale from transfer of the Asset Planned to be Transferred is expected to be
642 million yen in the fiscal period ending July 31, 2020. In practice, this may vary
due to the success or failure of transaction, transfer price and transfer date, among
other factors.

OperatingExpenses➢ Among leasing business expenses, which are the primary operating expenses,expenses other than depreciation and amortization have been calculated byreflecting the factors behind the fluctuation in expenses based on past results.
➢ The property tax, city planning taxes of 238 million yen and 240 million yen are
expected to be recorded as expences for the fiscal period ended January 31, 2020and Ending July 31, 2020, respectively. The property tax and city planning taxes ofAssets Planned to be Acquired (Real Estate) are planned to be settled at the time ofacquisition by calculating proportionally by period with the seller. However, sinceSAR includes the amount equal to such settlement amount in the acquisition cost,
the FY2020 property tax and city planning taxes pertaining to Assets Planned to be5

ItemAssumptions
Acquired (Real Estate) will not be recorded as expenses in the fiscal period ending
July 31, 2020. It is expected that the property tax and city planning taxes pertaining
to Assets Planned to be Acquired (Real Estate) will be recorded as expenses fromthe fiscal period ending July 31, 2021.
➢ Building repair expenses are expected to be 82 million yen for the fiscal period
ended January 31, 2020 and 99 million yen for the fiscal period ending July 31,2020, based on the repair plan established by Star Asia Investment ManagementCo., Ltd., the asset management company of SAR. However, actual repair expenses
may be significantly different from the forecast amount due to, for example, thepossibility of sudden repair expenses caused by damage, etc. to buildings based onfactors that are difficult to foresee, the amount generally tending to varysignificantly from year to year, and not being regularly recurring expenses.
➢ Depreciation is calculated using the straight-line method including ancillary costs
and are expected to be 420 million yen for the fiscal period ended January 31. 2020
and 436 million yen for the fiscal period ending July 31, 2020.
➢ With regards to the merger with Sakura Sogo REIT Investment Corporation, 269
million yen for costs of asset due diligence and for advisory remunerations etc. areincluded in operating expenses for the period ending July 31, 2020.

NOI(Net OperatingIncome)➢ NOI for the entire portfolio is expected to be 2,431 million yen for the fiscal period
ended January 31, 2020 and 2,473 million yen for the fiscal period ending July 31,2020.
➢ NOI is calculated by using the following calculation method.
NOI = rent revenue – rent expenses (excluding depreciation)

Non-operating
expencse➢ The sum of interest expenses and other financing-related expenses is expected to
be 227 million yen for the fiscal period ended January 31, 2020 and 273 million yen
for the fiscal period ending July 31, 2020.
➢ Temporary expenses of other financial expenses to be incurred in association with
the new borrowing and refinancing as described in “Debt financing” below areexpected to be 37 million yen for the fiscal period ending July 31, 2020.

Debt financing➢ The total amount of interest-bearing liabilities is assumed to be 51,580 million yen
as of the end of the fiscal period ended January 31, 2020 and 54,320 million yen asof the end of the fiscal period ending July 31, 2020.
➢ As of today, SAR has outstanding debt of 51,580 million yen. In addition, 3,460
million yen in total will be newly borrowed from qualified institutional investors as
stipulated in Article 2(3)(i) of the Financial Instruments and Exchange Act on March
13, 2020. SAR assume that 720 million yen of such borrowings will be repaid in thefiscal period ending July 31, 2020 with the sales proceeds from the transfer of theAsset Planned to be Transferred➢ It is assumed that 7,300 million yen of loan payable with repayment deadlines in
the fiscal period ending July 31, 2020 will be fully refinanced.

Investment units➢ It is assumed that there will be no change in the total number of investment units
issued and outstanding as of today (540,824 units) by the end of the fiscal period
ending July 31, 2020

Cash distribution per➢ Cash distribution per unit (not including cash distribution in excess of earnings) is6

Item

Assumptions

unit (not including
cash distribution inexcess of earnings)

calculated on the assumption described in the cash distribution policy stipulated in
SAR’s Articles of Incorporation.
➢ SAR conducts derivative transactions (interest rate swaps). It is assumed thatdeferred losses on hedges, which is an item of deduction from net assets (as thoseprovided in article 2, item 30 (b) of the Ordinance on Accountings of Investment
Corporations), is not expected to arise until the end of the fiscal period ending July
31, 2020, and cash distribution per unit (not including cash distribution in excess ofearnings) will not be affected by changes in items of deduction from net assets inthe calculation.
➢ It is possible that the cash distribution per unit (not including cash distribution inexcess of earnings) could change due to various factors, including changes ininvestment assets, changes in rent revenue accompanying changes in tenants, etc.,
or unexpected repair and maintenance, etc. In addintion, cash distribution per unit
(not including cash distribution in excess of earnings) may be affected by changes
in items of deduction from net assets.

➢ It is assumed that there will be no existing balance of deferred losses on hedges,
which is an item of deduction from net assets, as described above. Of cash
Cash distribution in
distribution in excess of earnings, that attributable to allowance for temporary
excess of earnings perdifference adjustment is not scheduled at this point.
unit➢ In addition, of cash distribution in excess of earnings, that falling under thecategory of cash distribution accompanying decrease in capital, etc. under tax law
is not scheduled at this point.

Others➢ Forecasts are based on the assumption that revisions that impact the above
forecast figures will not be made to laws and regulations, tax systems, accounting
standards, listing rules, and rules of The Investment Trusts Association, Japan, etc.
➢ Forecasts are based on the assumption that there will be no major unforeseenchanges to general economic trends and real estate market conditions, etc.

7