Disclaimers
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 FundManagers Directive (European Directive 2011/61/EU) (the “AIFMD”) as implemented in theirrespective jurisdictions. Accordingly, you should not use this document for any other purpose.
Netherlands
The units of Star Asia Investment Corporation (“Star Asia” or the “AIF”) are being marketed in
the Netherlands under Section 1:13b of the Dutch Financial Supervision Act (Wet op het
financieel toezicht, or the “Wft”). In accordance with this provision, Star Asia Investment
Management Co., Ltd. (the “AIFM”) has submitted a notification with the Netherlands Authority
for the Financial Markets. The units of Star Asia will not, directly or indirectly, be offered, sold,transferred or delivered in the Netherlands, except to or by individuals or entities that are
qualified investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of the Wft, andas a consequence neither the AIFM nor Star Asia is subject to the license requirement pursuant to
the Wft. Consequently, neither the AIFM nor Star Asia is subject to supervision of the Dutch
Central Bank (De Nederlandsche Bank) or the Netherlands Authority for Financial Markets(Autoriteit Financiële Markten, the “AFM”) and this Article 23 AIFMD Prospectus is not subject
to approval by the AFM. No approved prospectus is required to be published in the Netherlands
pursuant to Article 3 of the European Directive 2003/71/EC (the EU Prospectus Directive) as
amended and implemented in Netherlands law. The AIFM is solely subject to limited ongoingregulatory requirements as referred to in Article 42 of the AIFMD.
United Kingdom
Units of Star Asia are being marketed in the United Kingdom pursuant to Article 59 of theUnited Kingdom Alternative Investment Fund Managers Regulations 2013. In accordance withthis provision, the AIFM has submitted a notification with the Financial Conduct Authority (the
“FCA”) in the United Kingdom.
For the purposes of the United Kingdom Financial Services and Markets Act 2000 (“FSMA”)
Star Asia is an unregulated collective investment scheme which has not been authorized by the
FCA.
Accordingly, any communication of an invitation or inducement to invest in Star Asia may bemade to persons in the United Kingdom only if the communication falls within one or more of
the categories of exempt financial promotions under the Financial Services and Markets Act(Financial Promotion) Order 2005 (the “Order”), such as financial promotions communicated to:
(1)
(2)
(3)

persons who are investment professionals, as defined in article 19 of the Order;
persons who are certified high net worth individuals, as defined in article 48 of theOrder;
persons who are high net worth companies, unincorporated associations, or otherentities listed in article 49 of the Order; or(4)persons who are certified sophisticated investors, as defined in article 50 of theOrder,

or if the communication is made to persons to whom such an invitation or inducement mayotherwise lawfully be communicated. The distribution of this document to any person in the
United Kingdom in circumstances not falling within one of the above categories is not permitted
and may contravene FSMA. No person falling outside those categories should treat thisdocument as constituting a promotion to him, or act on it for any purposes whatever.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented theProspectus Directive (each, a Relevant Member State), with effect from and including the dateon which the Prospectus Directive is implemented in that Relevant Member State (the Relevant
Implementation Date) no offer of units of Star Asia may be made to the public in that Relevant
Member State except in circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of units shall require the publication of a prospectus pursuant to
Article 3 of the Prospectus Directive, or a supplement to a prospectus pursuant to Article 16 of
the Prospectus Directive.
For the purposes of this provision, the expression “an offer of units to the public” in relation to
any units in any Relevant Member State means the communication in any form and by anymeans of sufficient information on the terms of the offer and the units to be offered so as toenable an investor to decide to purchase or subscribe the units, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State, theexpression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto,
including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member
State), and includes any relevant implementing measure in the Relevant Member State and theexpression “2010 PD Amending Directive” means Directive 2010/73/EU.

2

Article 23 (1)(a)Objectives of the AIF

Investment strategy

The objective of Star Asia Investment Corporation (“Star Asia”) is to maximize unitholder
value with a focus on revenue stability and growth by pursuing a diversified portfolio
strategy, targeting office, retail, residential, logistics and hotel properties. In operating its
business, Star Asia’s overarching philosophy is to put the interests of its unitholders first.
Star Asia pursues a diversified portfolio strategy, targeting office, retail, residential,
logistics and hotel properties with a particular focus on the Tokyo area. Star Asia currently
aims to have 70% or more of its portfolio on an acquisition price basis comprised ofproperties located in the Tokyo area, while also targeting properties in other major
population centers including the Osaka area, the Nagoya area, the Fukuoka area and the
Sapporo area. In addition, Star Asia intends to maintain a diverse portfolio of assets, witheach asset class comprising no more than 50% of its portfolio on an acquisition price basis
as a general rule. By maintaining a diverse portfolio, Star Asia intends to mitigate the riskof overexposure to any single asset class and achieve a balanced portfolio comprisingresidential and logistics properties, which generate relatively stable revenues, as well as
office, retail and hotel properties, which we believe can contribute to revenue growth. In
terms of asset size, we target primarily middle-size assets (with an acquisition price of lessthan ¥10 billion) from the perspective of enhancing diversification and due to therelatively robust supply of these assets. We also target large-size assets (with anacquisition price of ¥10 billion or more) in the five central wards of Tokyo due to favorable
market conditions for large-size assets in this high population area.
In identifying investment opportunities, Star Asia will leverage the track record,
experience, know-how and market analysis of its sponsor, Star Asia Management Limited(the “Sponsor”), through support it receives under its sponsor support agreement with theSponsor. Under the sponsor support agreement, Star Asia will also have access to a robust
pipeline of properties operated by the Sponsor and its group companies and intends toleverage the support from the Sponsor to continue to expand its portfolio.
In addition to investing in real estate assets (including trust beneficiary interests in realestate assets), we may also consider investing in mezzanine loans of special purpose
companies that acquire real estate. Under our articles of incorporation, we may invest in
mezzanine loans in an aggregate amount that shall not exceed 5% of our total assets.

Types of assets the AIF
may invest inTechniques it may
employ and all
associated risks

Real property, real property equivalents such as land leasehold rights and surface rights,
trust beneficiary interests in real property and real property based securities.
Star Asia aims to grow unitholder value by acquiring a diverse portfolio of office, retail,residential, logistics and hotel properties with a particular focus on the Tokyo area. The
principal risks with respect to investment in Star Asia are as follows:Star Asia’s limited operating history and the limited financial information
regarding its portfolio and results of operations;the limited experience of Star Asia Investment Management Co., Ltd. (the “AssetManager”) in operating a J-REIT;

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

3

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adverse conditions in the Japanese economy;Star Asia’s ability to acquire properties to execute its growth and investment
strategy;illiquidity in the real estate market;
Star Asia’s reliance on the Sponsor and its group companies;
the past experience of the Sponsor in the Japanese real estate market being no
indicator or guarantee of Star Asia’s future results;
potential conflicts of interest between Star Asia and certain Star Asia groupcompanies, including the Asset Manager;
significant competition in seeking tenants and difficulty in finding replacement
tenants;increases in prevailing market interest rates;
the occurrence of natural or man-made disasters;
concentration of Star Asia’s properties in Tokyo and the surrounding areas;
any inability to obtain financing for future acquisitions;potential failure to satisfy a complex series of requirements pursuant to Japanese
tax regulations; andrisks inherent in the property types we target, including office, retail, residential,
logistics and hotel properties.

In addition, Star Asia is subject to potential risks related to:
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liquidity and other limitations on Star Asia’s activities under debt financing
arrangements;
increases in loan-to-value (“LTV”) ratio that may increase Star Asia’s exposure tochanges in interest rates;
investments in mezzanine loans;
impairment losses relating to Star Asia’s properties;
decreases in tenant leasehold deposits and/or security deposits that may increase
Star Asia’s funding costs;
Star Asia’s lack of control over operating costs which may adversely affect Star
Asia’s business;
loss of rental revenues in the event of lease terminations, decreased leaserenewals, or the default of a tenant as a result of financial difficulty or insolvency,
or careless or imprudent management of properties by tenants;
reliance on key tenants;
use of master leases, including credit exposure in the event of a master lessee’s
insolvency;
the cost of complying with regulations applicable to Star Asia’s properties;
defects in the title, design or construction of our properties or other property
defects;
reliance on expert appraisals and engineering, environmental and seismic reports,
which are subject to significant uncertainties;
reliance on industry and market data that are subject to significant uncertainties;
the possibility that Star Asia’s buildings may violate earthquake resistance or other

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

4

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Any applicable
investment restrictions

building codes, and may collapse in even minor earthquakes or may be required to
be strengthened or demolished by Star Asia at significant expense;
the possibility that the environmental assessments of Star Asia’s properties madeprior to ownership may not uncover all environmental liabilities, while Japaneselaws subject property owners to strict environmental liabilities;
the possibility that entering into forward commitment contracts or contracts topurchase properties under development may expose Star Asia to contractual
penalties and market risks;Star Asia’s success depending on the performance of service providers to whichStar Asia is required to assign various key functions;Star Asia’s performance depending on the efforts of key personnel of the AssetManager;
J-REITs and their asset managers being subject to tight supervision by theregulatory authorities;
the possibility that, if the Japanese tax authorities disagree with Star Asia’sinterpretations of the Japanese tax laws and regulations for prior periods, Star
Asia may be forced to pay additional taxes for those periods;
the possibility that Star Asia may not be able to benefit from reductions in certain
real estate taxes enjoyed by qualified J-REITs;
changes in Japanese tax laws that may significantly increase Star Asia’s tax burden;
Star Asia’s treatment as a “passive foreign investment company” for U.S. federal
income tax purposes;
the possibility that unitholders may potentially be subject to U.S. Foreign AccountTax Compliance Act withholding tax after 2016;
the possibility that Star Asia may lose its rights in a property if the purchase of theproperty is recharacterized as a secured financing;
the possibility that Star Asia’s ownership rights in some of its properties may bedeclared invalid or limited;
the possibility that Star Asia’s leasehold or subleasehold rights may be terminatedor may not be asserted against a third party in some cases;
properties for which third parties hold leasehold interests in the land but own thebuildings;
holding some properties in the form of stratified ownership interests;
holding properties in the form of a property or trust co-ownership interest;
holding interests in some properties through preferred shares of special purpose
companies (tokutei mokuteki kaisha);properties being subject to preferential negotiation rights of others;
holding interests in some properties through Japanese anonymous association(tokumei kumiai) agreements and limitations on Star Asia’s rights relating to suchproperties; andStar Asia’s owning all of its properties through trust beneficiary interests.

Star Asia is subject to investment restrictions under Japanese laws and regulations,
including the Act on Investment Trusts and Investment Corporations (the “ITA”) and the
Financial Instruments and Exchange Act (the “FIEA”). These restrictions require that StarThis document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

5

Asia 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, and surface rights(chijō-ken) (i.e. the right to use land for the purpose of having a structure on it), as well as
trust beneficiary interests in securities, real estate, leaseholds of real estate and surface
rights.
Furthermore, under the listing rules of the Tokyo Stock Exchange, any listed J-REIT such as
Star Asia 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, andtrust beneficiary interests for these assets, and real estate-related assets in this context
include, but are not limited to, anonymous association (tokumei kumiai) interests forinvestment in real estate. A J-REIT that lists its units on the Tokyo Stock Exchange mustalso comply with the Investment Trusts Association, Japan rules, which require the J-REIT
to invest more than 50% of its assets in real estate and asset backed securities investing
primarily in real estate, which include, but are not limited to, real estate, leaseholds of realestate, surface rights or trust beneficiary interests for real estate, surface rights orleaseholds of land.
Pursuant to the ITA, investment corporations may not independently develop land for
housing or to construct buildings, but may outsource such activities in certain
circumstances.
The basic investment policy of Star Asia is set out in Star Asia’s articles of incorporation.
Moreover, the Asset Manager has established investment guidelines to provide moredetailed policies based on this basic policy.
Circumstances inwhich the AIF may use
leverage
The types and sourcesof leverage permitted
and associated risks

Star Asia may borrow funds or issue investment corporation bonds for such purposes asproperty acquisitions, property repair, repayment of tenant leasehold and security
deposits and guarantees, payment of distributions to unitholders, payment of Star Asia’s
expenses and repayment of Star Asia’s indebtedness.
Star Asia currently has outstanding short- and long-term loans. All of Star Asia’s currently
outstanding loans are unsecured and unguaranteed and are subject to either floating rates
or floating rates that are effectively fixed through interest rate swaps. Star Asia borrows
only from institutional investors as defined in the Special Taxation Measures Act (assumingthat Star Asia’s tenant leasehold and security deposits are not considered loans for thispurpose).
Certain of Star Asia’s loan agreements are subject to restrictive covenants. Such covenants
may require Star Asia to maintain certain debt service coverage or LTV ratios, restrict Star
Asia’s operations or limit its ability to make cash distributions to unitholders, to dispose ofproperties or to acquire additional properties. A violation by Star Asia of such restrictive
covenants may entitle lenders to require Star Asia to collateralize its properties or to
demand that the entire outstanding balance be paid. Moreover, Star Asia’s cash flow may
be insufficient to meet its required principal and interest payments, which may trigger
events of default that also entitle lenders to require Star Asia to collateralize its properties
or demand that the entire balance be paid. Further, if Star Asia takes draws down debt
with unhedged floating interest rates, Star Asia’s exposure to changes in interest rates

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

6

may adversely affect its results of operations. Even if Star Asia maintains a conservative
LTV ratio, Star Asia’s interest expense or exposure to changes in interest rates could
increase due to macroeconomic factors or market conditions beyond Star Asia’s control.
Any restrictions onleverage

Any restrictions on
collateral and asset
reuse arrangements
Maximum level ofleverage which the
AIFM is entitled to
employ on behalf of
the AIF
Article 23(1) (b)Procedure by which
the AIF may change its
investment strategy /investment policy

Under Star Asia’s articles of incorporation, Star Asia has a formal internal limit of ¥1 trillion
on the aggregate principal amount of borrowings and ¥1 trillion on investment
corporation bonds outstanding, and a total limit ¥1 trillion on the combined outstanding
principal amount of borrowings and investment corporation bonds.
No applicable arrangements.

Star Asia has as a general rule set an upper limit of 60% for its LTV ratio in order to operatewith a stable financial condition. Star Asia may, however, temporarily exceed such levels
as a result of property acquisitions or other events.

Changes to Star Asia’s basic investment policy require an amendment of the articles ofincorporation. Such amendment requires a quorum of a majority of the total issued units
and at least a two-thirds vote of the voting rights represented at a general meeting ofunitholders. Unitholders should note, however, that under the ITA and Star Asia’s articles
of incorporation, unitholders who do not attend or exercise their voting rights at a general
meeting of unitholders are deemed to be in agreement with proposals submitted at themeeting, except in cases where contrary proposals are also being submitted.
Additionally, the investment guidelines of the Asset Manager, which provide the details of
the basic policies set forth in Star Asia’s articles of incorporation, may be amended orrevised by the Asset Manager without a vote of Star Asia’s unitholders or Star Asia’s
approval, to the extent permitted under Star Asia’s articles of incorporation.

Article 23(1) (c)Description of themain legal implicationsof the contractual
relationship enteredinto for the purpose ofinvestment, including
jurisdiction, applicablelaw, and the existenceor not of any legal
instruments providing
for the recognition andenforcement of
judgments in the
territory where the AIF
is establishedStar Asia has entered into the following asset management and sponsor support
agreement, each of which is governed by Japanese law:

Asset management agreement dated December 1, 2015 between Star Asia andStar Asia Investment Management Co., Ltd.
Sponsor support agreement dated January 14, 2016 between Star Asia, Star Asia
Investment Management Co., Ltd. and Star Asia Management Limited.

Additionally, Star Asia has entered into purchase and sale agreements with sellers andbuyers in connection with the acquisition or disposition of properties, as well as trust
agreements with major Japanese trust banks pursuant to which Star Asia holds theproperties in its portfolio in the form of trust beneficiary interests.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

7

Article 23(1) (d)The identity of the
AIFM, AIF’s depository,
auditor and any otherservice providers and a
description of theirduties and theinvestors’ rights
thereto

Asset Manager (AIFM): Star Asia Investment Management Co., Ltd.
Auditor: Ernst & Young ShinNihon LLC
Custodian, general administrator, transfer agent: Sumitomo Mitsui Trust Bank Ltd.

The Asset Manager’s duties include providing services related to asset management
operations, financing operations, reporting to Star Asia, periodic reporting, investor
relations, and regulatory filings, and other services as agreed between Star Asia and the
AIFM. The FIEA provides that the Asset Manager owes Star Asia a fiduciary duty and must
conduct its activities as asset manager in good faith. The FIEA also prohibits the AssetManager from engaging in certain specified conduct, including entering into transactions
outside the ordinary course of business or with related parties of the Asset Manager thatare contrary to or violate Star Asia’s interests. Pursuant to the ITA, Star Asia’s unitholders
have the right to approve the execution or termination of the asset managementagreement at a general meeting of unitholders, except in specific cases set forth under the
ITA.
The auditor’s responsibilities include preparing an audit report on Star Asia’s financial
statements for the fiscal periods ending on the last day of January and on the last day of
July of each year.
The custodian, general administrator and transfer agent owes contractual obligations
under its agreements with Star Asia. As custodian, it provides custodial services for Star
Asia’s assets. As general administrator, it provides administrative services including
services related to financial documents, preparation of books and records, tax payments
and meetings of board of directors and meetings of unitholders. As transfer agent, it
provides services including the administration of the unitholder’s register, issuances ofinvestment units, distributions, notifications, announcements and reports, and othertransfer agency services.
Unitholders do not have direct rights against the Asset Manager, auditor, custodian,general administrator or transfer agent.

Article 23(1) (e)Description of how the
AIFM complies withthe requirements tocover professional
liability risks (ownfunds / professional
indemnity insurance)
Article 23(1) (f)Description of any
delegatedmanagement function
such as portfolio

Not applicable.

Not applicable.
There is no delegation of such functions beyond the Asset Manager, which is responsible
for portfolio and risk management, and the asset custodian, which is responsible forThis document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

8management or risk
management and of
any safekeeping
function delegated by
the depositary, theidentification of thedelegate and any
conflicts of interest
that may arise fromsuch delegations
Article 23(1) (g)Description of the AIF’s
valuation procedureand pricing
methodology,
including the methods
used in valuing hardto-value assets

Article 23(1) (h)Description of the AIF’s
liquidity risk
management,
including redemption
rights in normal andexceptional
circumstances andexisting redemption
arrangements withinvestors

safekeeping activities.

Star Asia values its assets based on generally accepted accounting principles applicable to
J-REITs and pursuant to the ITA and the Ordinance on Accountings of Investment
Corporations. As a J-REIT, Star Asia may only use the valuation methods prescribed in therules of the Investment Trusts Association, Japan. The asset evaluation methods andstandards used in specific cases depend on the type of invested asset.
Hard to value assets include assets such as equity interests in real estate anonymous
associations (tokumei kumiai) and beneficiary interests in trusts of money principallyinvested in real estate anonymous associations, as well as tenant leasehold and security
deposits. Future cash flows of hard to value assets are difficult to estimate. Star Asia
values hard to value assets differently depending on the asset, but pursuant to the ITA,
the Ordinance on Accountings of Investment Corporations and the evaluation rules of theInvestment Trusts Association of Japan or in accordance with generally accepted
accounting principles in Japan applicable to J-REITs.

Net cash generated from operating activities constitutes Star Asia’s primary source ofliquidity to fund distributions, interest payments on outstanding debt, fees to the AssetManager and other service providers, property-related taxes, repairs and maintenance,and capital expenditures for Star Asia’s properties in the ordinary course of business.
However, Star Asia’s ability to use its cash flows from operations to finance property
acquisitions is severely limited, because Star Asia is required to distribute more than 90%
of all of its distributable income, calculated in accordance with the Special Taxation
Measures Act, for each fiscal period to its unitholders. Therefore, Star Asia depends
primarily on outside financing in order to finance property acquisitions, including
borrowings from financial institutions, equity financing, and the issuance of primarily longterm investment corporation bonds. Star Asia also considers the effects of assumption oftenant leasehold and security deposits in evaluating its liquidity needs.
Star Asia controls liquidity-related risk by setting an upper limit of 60% for its LTV ratio andevaluating its long-term and fixed-rate debt ratios, maturity diversification, financing
methods, the diversification of its pool of lenders and the availability of commitment lines.
Because Star Asia is a closed-end investment corporation, unitholders are not entitled torequest the redemption of their investment.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

9Article 23(1) (i)Description of all fees,
charges and expenses
and a maximum
amount which is
directly / indirectly
borne by the investors

Directors’ compensation: Star Asia’s articles of incorporation provide that Star Asia may
pay its executive officer up to ¥800,000 per month and each of its supervisory officers up
to ¥400,000 per month.
Asset management, acquisition and disposition Fees: Star Asia pays the Asset Manager
asset management, acquisition and transfer fees as follows:

Asset Management fees. The Asset Manager receives an asset management fee,
which comprises a type I period fee and a type II period fee as described below.
Type I period fee: Asset-based fee. Star Asia pays to the Asset Manager a type I
period fee for each fiscal period. This type I period fee is payable by Star Asia
within three months from the end of the relevant fiscal period. The type I
period fee shall be the amount (rounded down to the nearest yen) obtainedby multiplying the total appraised value (as calculated below) of theinvestment assets by the rate (which shall not exceed 0.3%) to be separately
agreed upon with the Asset Manager. The total appraised value of theinvestment assets shall be the sum of (A) and (B) below.
 (A) Total amount of the value of real estate assets obtained by multiplying
the lower of the appraisal value or the acquisition price of the relevant
assets as of the end of the relevant fiscal period, by the number of actualdays that Star Asia held the relevant assets in the relevant fiscal period,
and dividing it by the number of in the year (365 days or 366 days, as thecase may be), and (B) Total amount of the value of the asset backed securities with realestate assets as primary investment targets and of the real estate-relatedloans and other monetary claims, obtained by multiplying the value of therelevant assets (calculated in accordance with our articles ofincorporation) by the number of actual days that Star Asia held therelevant assets in the relevant fiscal period, and dividing it by the numberof in the year (365 days or 366 days, as the case may be).

Type II period fee: DPU-based fee. Star Asia pays to the Asset Manager a type II
period fee for each fiscal period. This type II period fee is payable within threemonths from the end of the relevant fiscal period, and is equal to (i)distributions per unit before deducting the type II period fee multiplied by (ii)the amount obtained by multiplying net operating income by the rate
separately agreed with the Asset Manager (which shall not exceed 0.002%).
For purposes of calculation of the type II period fee: “distributions per unit
before deducting the type II period fee” shall be the amount (rounded down
to the nearest yen) obtained by dividing the distributable amount before
deducting the type II period fee (which is equal to income before income taxes
in accordance generally accepted accounting principles in Japan before
deducting the type II period fee and consumption taxes that are notdeductible and after accounting for any loss carried forward) as of the end ofThis document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

10the relevant fiscal period, by the number of investment units issued as of theend of the relevant fiscal period; and “net operating income” is equal to theamount obtained by deducting real estate rental expenses (excluding
depreciation and loss on retirement of non-current assets) from real estate
rental revenue in the relevant fiscal period. When Star Asia holds noncancelled treasury investment units as of the relevant fiscal period, thenumber of investment units issued shall refer to the number of investment
units issued and outstanding (calculated by deducting the number of treasury
investment units from the total number of investment units issued as of theend of the said fiscal period). If a consolidation or split of the investment units
is conducted, the total number of investment units issued as of the end of the
fiscal period in which the consolidation or split is conducted and thereafter
shall be adjusted to be the number of investment units before giving effect tothe consolidation or split as calculated by using the relevant consolidation
ratio or split ratio.
Acquisition fees. For each new property Star Asia acquires, the Asset Manager
receives an acquisition fee, which is equal to up to 1.0%, or 0.5% in case of atransaction with interested parties, of the acquisition price (referring to the pricestipulated in the sales agreement, etc. and excluding the acquisition fee and otherexpenses required for the acquisition and consumption taxes), payable by the endof the month following the month to which the acquisition date of the property(the date when transfer of ownership and other rights become effective) belong.

Transfer fees. For each property Star Asia sells, the Asset Manager receives atransfer fee, which is equal to up to 1.0%, or 0.5% in case of a transaction withinterested parties, of the transfer price (referring to the price stipulated in thesales agreement, etc. and excluding the transfer fee and other expenses required
for the transfer and consumption taxes) payable by the end of the monthfollowing the month to which the transfer date of the property (the date whentransfer of ownership and other rights become effective) belong.

Asset custodian fee:Star Asia pays the asset custodian a fee per month in an amount agreed upon by Star Asiaand the asset custodian based on the portfolio of Star Asia, up to the monthly amountcalculated by the following formulas (or, if the calculated monthly amount is less than
¥500,000, ¥500,000).
(The total assets amount recorded on Star Asia’s total trial balance at the last day of thepreceding month of the relevant month) multiplied by 0.03% divided by 12
If the days of asset custody are less than one month, the fee per month shall be calculated
on a pro-rata basis.
The asset custodian shall calculate the total asset custodian fee and consumption taxes
per fiscal period and shall provide an invoice to Star Asia after the following month of theThis document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

11month to which the last day of the fiscal period belong. Star Asia shall pay such amount byremittance into the account designated by the asset custodian within a month from thedate of the invoice.
General administrator fee:Star Asia pays the general administrator fees per month in an amount agreed upon by Star
Asia and the general administrator based on the portfolio of Star Asia, up to the monthly
amount calculated by the following formulas (or, if the calculated monthly amount is lessthan ¥500,000, ¥500,000).
(The total assets amount recorded on Star Asia’s total trial balance at the last day of thepreceding month of the relevant month) multiplied by 0.09% divided by 12
If the days of asset custody are less than one month, the fee per month shall be calculated
on a pro-rata basis.
The general administrator shall calculate the total general administrator fees andconsumption taxes per fiscal period and shall provide an invoice to Star Asia after thefollowing month of the month to which the last day of the fiscal period belong. Star Asia
shall pay such amount by remittance into the account designated by the generaladministrator within a month from the date of the invoice.
Transfer agent fee:Star Asia pays the transfer agent fees pursuant to the transfer agency agreement.
Monthly standard fee:Star Asia pays the transfer agent monthly standard fees calculated in the manner
below. There is a minimum monthly fee of ¥210,000. The transfer agent shallprovide an invoice to Star Asia by the 15th day of the following month of therelevant month, and Star Asia shall pay such amount by the end of the month ofsuch invoice.
Number of investors
Fees per investor
The first 5,000 investors ............................................................
¥86
More than 5,000 and not more than 10,000 ............................
¥73
More than 10,000 and not more than 30,000 ..........................
¥63
Over 30,000 and not more than 50,000 ....................................
¥54
Over 50,000 and not more than 100,000 ..................................
¥47
Over 100,000 investors .............................................................
¥40
Removed investors ....................................................................
¥50

Other fees:Star Asia pays the transfer agent fees for various other services, including fees forservices in connection with the payment of distributions, notices, unitholder
This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

12

meetings, postal items, unitholder information and expense reimbursements.
Auditor Fee:Star Asia may pay the accounting auditor no more than ¥20 million for each fiscal period in
an amount determined by the Board of Directors. Such amount shall be paid byremittance into the account designated by the accounting auditor within a month fromthe date when Star Asia receives the full audit reports required under the ITA and otherlaws and regulations.
Article 23(1) (j)Description of the
AIFM’s procedure toensure fair treatment
of investors and detailsof any preferential
treatment received byinvestors, including
detailing the type ofinvestors and theirlegal or economic links
with the AIF or AIFM
Article 23(1) (k)The latest annual
report referred to in
Article 22(1)Under Article 77 paragraph 4 of the ITA, which applies the requirements of Article 109
paragraph 1 of the Companies Act of Japan to investment corporations, investment
corporations are required to treat unitholders equally depending on the number andcontent of units held. In addition, upon liquidation, the allotment of residual assets tounitholders is required to be made equally depending on the number of units held under
Article 77 paragraph 2 item 2 and Article 158 of the ITA.

Not applicable

Article 23(1) (l)The procedure andStar Asia is authorized under its articles of incorporation to issue up to 10,000,000 units.
conditions for the issue Its units have been listed on the Tokyo Stock Exchange since April 20, 2016.
and sale of the units
Secondary market sales and transfers of units will be conducted in accordance with therules of the Tokyo Stock Exchange. Unit prices on the Tokyo Stock Exchange aredetermined on a real-time basis by the equilibrium 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 priceor special quote.
Article 23(1) (m)Latest net asset value
Star Asia’s unit’s latest market price is publicly available at the Tokyo Stock Exchange orof the AIF or latest
from financial information venders (including Reuters, which can be viewed atmarket price of the
http://www.reuters.com/finance/stocks/overview?symbol=3468.T)
unit or share of the AIF
Article 23(1) (n)Details of the historical The units of Star Asia were listed on the Tokyo Stock Exchange on April 20, 2016.
performance of the
The performance of the units for the fiscal periods since the listing of Star Asia is as
AIF, where available
follows:

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

13

Fiscal period

Total Assets(JPY thousands)

Total Net Assets(JPY thousands)

Net Assets per unit
(JPY)

68,636,834

33,848,802

98,19767,363,539

34,674,123

100,592

1st Fiscal Period(December 1, 2015 toJuly 31, 2016)
2nd Fiscal Period(August 1, 2016 toJanuary 31, 2017)

Article 23(1) (o)Identity of the prime
broker, any material
arrangements of the
AIF with its prime
brokers, how conflictsof interest aremanaged with theprime broker and theprovision in thecontract with thedepositary on thepossibility of transfer
and reuse of AIF
assets, andinformation about any
transfer of liability tothe prime broker that
may exist
Article 23(1) (p)Description of how andwhen periodic
disclosures will bemade in relation toleverage, liquidity andrisk profile of theassets, pursuant to
Articles 23(4) and23(5)Article 23(2)The AIFM shall informthe investors before
they invest in the AIF
of any arrangement

No applicable prime broker.

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodicallythrough Star Asia’s website and semi-annual report.

Not applicable.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

14

made by thedepository tocontractually discharge
itself of liability inaccordance with
Article 21(13)The AIFM shall also
inform investors of any
changes with respect
to depositary liability
without delay

Not applicable.

Article 23(4)(a)Percentage of the AIF’s assets which
are subject to special arrangements
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
Overview of any special
arrangements, including whether
they relate to side pockets, gates orother arrangements
Valuation methodology applied toassets which are subject to sucharrangements
How management and performancefees apply to such assets
Article 23(4)(b)Any new arrangements for managing
the liquidity of the AIF
For each AIF that the AIFM manages
that is not an unleveraged closed-end
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 a

There are no assets that are subject to special arrangements arising fromtheir illiquid nature.

There are no such special arrangements.

There are no such special arrangements.

There are no such special arrangements.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.
Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

15

reasonable 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).
Immediately notify investors where
they activate gates, side pockets orsimilar special arrangements or
where they decide to suspend
redemptions
Overview of changes to liquidity
arrangements, even if not special
arrangements
Terms of redemption andcircumstances where management
discretion applies, where relevant
Also any voting or other restrictions
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 andthe risk management systems
employed by the AIFM to manage
those risks

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.
Star Asia is a closed-end investment corporation and unitholders are notentitled to request the redemption of their investment.
There are no voting or other restrictions on the rights attaching to units.

The Asset Manager stipulates basic provisions of risk management in its risk
management rules. The appropriateness and effectiveness of the AssetManager’s risk management systems are regularly reviewed and evaluatedby the Asset Manager.
The use of long-term loans and investment corporation bonds to financeasset acquisitions and other purposes gives rise to liquidity risks. Star Asia
controls such risks by setting an upper limit of 60% for its LTV ratio andevaluating its long-term and fixed-rate debt ratios, maturity diversification,
financing methods, the diversification of its pool of lenders and theavailability of commitment lines.
Star Asia may enter into loans with unhedged floating interest rates thatwould be exposed to the risk of interest rate fluctuations. Star Asia, in orderto reduce the impact caused by rising interest rates, closely monitors the
movement of interest rates.
Derivative transactions (interest rate swap transactions) may be used tohedge against the risks of increases in floating interest rates.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

16

Star Asia’s use of tenant leasehold and security deposits gives rise toliquidity risk since repayment of these deposits is triggered when tenants
move out of Star Asia’s properties. This risk is controlled through suchmeasures as preparing cash management plans and retaining cash anddeposits sufficient to return deposits to tenants.
Measures to assess the sensitivity of
the AIF’s portfolio to the most
relevant risks to which the AIF is or
could be exposed
If risk limits set by the AIFM havebeen 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 amountof leverage which the AIFM may
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
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
providers relating to the above.
Article 23(5)(b)Information on the total amount ofleverage employed by the AIF
calculated in accordance with thegross and commitment methods

No such measures have been implemented.

No such situation has occurred.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.

No such right or guarantee exists.

Any new arrangements or change in applicable arrangements will be
disclosed at an appropriate time.
The aggregate amount of interest-bearing debt was JPY 39,030 million as ofApril 30, 2017.

This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain information
under Article 23 of the AIFMD as implemented in their respective jurisdictions. This document is not an offer to sell or asolicitation of any offer to buy the units of Star Asia Investment Corporation.

17