4 July 2019
For Immediate Release

REIT Securities Issuer
Sakura Sogo REIT Investment Corporation
3-8-11 Kudan Minami, Chiyoda-ku, Tokyo
Makoto Muranaka
Executive Director(Securities Code 3473)
Asset Management Company
Sakura Real Estate Funds Management, Inc. (“SREFM”)
Contact: Makoto Muranaka.
Representative Director and President
Tel: +81-3-6272-6608

Announcement Regarding the Request by Sponsor to
Add Proposal to Convocation Notice for Unitholders’ Meeting
Sakura Sogo REIT (“Sakura”), hereby announces that, GALAXY JREIT PTY LIMITED (“Sponsor”)
which is the parent company of SREFM, Sakura’s asset management company, and which is amember of Galileo group, the sponsor of Sakura, informed us that Sponsor, as a unitholder
continuously holding 1% or more of outstanding units of Sakura for more than 6 months, submitted toLion Partners Godo Kaisha (“Lion Partners”) a request to add outline of proposals in the convocation
notice of unitholders’ meeting to be convened by Lion Partners as unitholder of Sakura as announced
on June 28, in order to submit counter proposals on agenda items to be proposed by Lion Partners,and Sakura also has received a copy of such request.
Please note that Sakura already has made a public notice on holding its own unitholders’meeting on August 30, 2019 (please refer to the announcement on June 28, 2019 and the public
notice on Nikkei on June 29, 2019).
Further, as stated in the announcement on July 4, 2019, SREFM is under good faith discussion
with Mitsui Bussan & IDERA Partners Co., Ltd. (“MIP”) which is the asset manager of MIRAICorporation on the feasibility of a friendly merger between Sakura and MIRAI Corporation.
Sakura expects that the negotiation on the merger terms and the execution of the merger
agreement will be completed before the unitholders’ meeting. Accordingly, it considers that thecandidate for the executive director (Mr. Hagino) and the asset manager (MIP) as statedbelow are the best candidate from the perspective to achieve appropriate merger
discussion and smooth transition.
1. Summary of Proposals by Sponsor and Reasons for Proposals by Sponsor(Matters to be Resolved and Content of Proposals)(1) Election of One Executive Director
Elect Mr. Tamotsu Hagino (Representative of Mitsui & Co. Asset Management Holdings Ltd.,the parent company holding 50% shares in Mitsui Bussan & IDERA Partners Co., Ltd.) as theexecutive director of Sakura(2) Execution of an Asset Management Agreement
Execute an asset management agreement with Mitsui Bussan & IDERA Partners Co., Ltd.
(the asset management company of MIRAI Corporation)

Please refer to Appendix on Summary of Proposals by Sponsor and Reasons forProposals by Sponsor.
2. Opinion of the Board of Directors of Sakura
The Directors of Sakura unanimously support the proposals stated in 1. above made bySponsor.
As stated above, SREFM is under good faith discussion with MIP on the feasibility of afriendly merger between Sakura and MIRAI Corporation.
We believe that the candidate above for the executive director and the asset manager are thebest to smoothly proceed with the merger.
The candidates proposed by Lion Partners (Mr. Sugihara and Star Asia Investment
Management Co., Ltd.) are part of the Star Asia group, which is making hostile take overattempt to Sakura, and have strong vested interest in Star Asia group. They clearly claim thatthey contemplate a merger between Sakura and Star Asia Investment Corporation after theelection of Mr. Sugihara and the execution of new asset management agreement with Star
Asia Investment Management Co., Ltd., and they have strong vested interest in Star Asia
Investment Corporation which is the counterparty in the merger and therefore the conflict ofinterest with Sakura (and its unitholders) is serious.
Further, the two supervisory directors of Sakura have made their position clear that they can
not accept the proposal by Lion Partners from the view point of protecting the interest of theunitholders of Sakura because it is abusive for aiming to complete the merger process bycausing the conflict of interest with Star Asia Investment Corporation as mentioned above.
Further, if the proposals made by Lion Partners are approved, it is inevitable that thedisturbance will be caused to the management of Sakura since the change of the asset
manager is scheduled at some time after six months after the unitholders’ meeting.
On the other hand, the candidate stated in 1. above for the executive director (Mr. Hagino) andthe asset manager (MIP) do not have such a vested interest, and we are currently under agood faith discussion with Mirai Corporation on the feasibility of a friendly merger and thenegotiation on the merger terms and the execution of the merger agreement are expected tobe completed before the unitholders’ meeting. Accordingly we believe that we can achieve
appropriate merger discussion and smooth transition.

Therefore, please vote in favor of proposals by Sponsor as stated in 1. above and voteagainst any proposals by Lion Partners.
3. Outlook
As stated above, SREFM is under good faith discussion with MIP on the feasibility of afriendly merger between Sakura and MIRAI Corporation. Such discussion is proceeding
positively and the negotiation on the merger terms and the execution of the merger agreement
are expected to be completed before the unitholders’ meeting of Sakura scheduled on August30, 2019.
Sakura will make timely announcement, if there is any matter to be announced in the progressof the merger discussion.
-Ends-

Sakura Sogo REIT Investment Corporation website address: http://sakurasogoreit.com/en/

1.

Summary of the proposal by Sponsor and the reasons for the proposal by Sponsor(1) Election of one executive director
A) Summary of the proposal
Elect following candidate as the executive director.

Name（Birth Date）

Career Highlights and Concurrent Positions

Tamotsu Hagino

April 1990

(May 9, 1967)

April 1995
August 1995
August 1996
July 1998

Joined Mitsui & Co., Ltd., Development
and Construction Managing Division
Development Department, 1stDevelopment Project Division,International Project Office
Trainee (Indonesia in Jakarta)(Appendix)

Numberof
investme
nt units
owned

Jakarta Office, Machinery Development
Group
Chugoku Branch, Supplies Construction
OfficeApril 2003

Service Business Department, Urban
Development Division, Real Estate
Development Office
April 2004
Japan Real Estate Asset Management
Co., Ltd. (secondment)
February 2006 Mitsui & Co., Ltd., Consumer Service
Business Department, Urban
0Development Division., Building, PM,FM Business Office
April 2010
Senior Vice President of MBK REALESTATE Holdings Inc. (CA/USA)(secondment)
January 2014
Mitsui & Co., Ltd., Business Managing
Division, Investment Managing Office
March 2015
Consumer Service Business Division
and Business Managing Division,Investment Managing Office
July 2016
Consumer Business Department, Urban
Development Business Division, GM of
4th Overseas Development BusinessOffice
October 2017
MBK REAL ESTATE ASIA PTE LTD(secondment), Chief Administrative
Officer (Singapore)May 2019
Mitsui & Co. Asset ManagementHoldings Ltd.
Representative Director and President
There are no special interests between the abovementioned candidate and Sakura.
B) The reason for the proposal
The candidate for executive director, Mr. Hagino, is the representative of Mitsui Bussan
Asset Management Holdings K.K. which holds 50% of Mitsui Bussan Idera Partners
Co., Ltd., the asset manager to MIRAI Corporation.
We understand that SREFM which is the asset manager of Sakura is under good faithdiscussion with Mitsui Bussan & Idera Partners Co., Ltd. on the feasibility of the friendly
merger between Sakura and MIRAI Corporation and the negotiation on the merger
terms and the execution of the merger agreement are expected to be completed by thetime of the unitholders' meeting to be held on August 30, 2019.
In such case, Mr. Hagino is the best person to smoothly proceed with the merger.
Mr. Sugihara who is the candidate for the executive director proposed by Lion Partners
has strong relationship with Star Asia group1 and there will be a serious conflict ofinterest in the negotiation of the merger terms if Mr. Sugihara became the executive
director of Sakura. 2 On the other hand, even if Mr. Hagino becomes the executive
director on the day of the unitholders meeting, unlike Mr. Sugihara, there will be nostrong vested interest issue in Mr. Hagino because the negotiation of the merger terms
is already under way by Mr. Muranaka, who is the current executive director, and thenegotiation on the merger terms and the execution of the merger agreement areexpected to be completed by the time of the unitholders' meeting to be held on August30, 2019.
Further, the two supervisory directors of Sakura have made their position clear thatthey cannot accept the merger proposal process of the merger with Star Asia REIT
proposed by Lion Partners due to its abusive nature and if Mr. Sugihara becomes theexecutive director of Sakura, the executive director and two supervisory directors may
not be able to construct a true trust relationship and practically there can be
disturbance in operation of the board. On the other hand Mr. Hagino is therepresentative of the parent company of the asset manager of MIRAI Corporation
which is in good faith discussion on the possibility of friendly merger and we areinformed that both two supervisory directors have expressed their position that theyconsider Mr. Hagino as a suitable person to become the executive director of Sakura,
and we can expect smooth operation of the board.
(2) Execution of an asset management agreementA) Summary of the proposal
Execution of an asset management agreement with the following candidate.
NameAddress
History

1

Mitsui Bussan & Idera Partners Co., Ltd.
2-1, Nishi-Kanda 3-chome, Chiyoda-ku, Tokyo, Japan
June 1, 2015
EstablishmentofIdera
AssetManagement Co., Ltd.
June 26, 2015
Building lots and building transaction
business; Tokyo Governor's Officelicense (1) No.98041
October 15, 2015
Discretionarytransaction
agent;
Minister of Land, Infrastructure, andTransport Approval No. 94
November27,FinancialInstruments
Business2015
Operator (Director of Kanto Finance
Bureau (Kinsho) No.2876)

Mr. Sugihara resigned from the director of Star Asia Investment Management Co., Ltd. on April 26,
2019, but the press release on that day says “[h]e will engage in various projects so as tofacilitate SAR’s (Note: Star Asia Investment Corporation’s) external growth from the sponsor
side as the person in charge in Star Asia group by going back to Star Asia Management Tokyo Branchwhere he was seconded from” and it is obvious that he has a strong vested interest in Star Asiagroup and Star Asia Investment Corporation.
2Star Asia group owns 17.9% of the units in Star Asia Investment Corporation while it only owns
3.6% of the units of Sakura and therefore Mr. Sugihara has a strong incentive to give Star Asia
Investment Corporation a preferred position.

December
7,
2015
January 21, 2016
September
2016

9,

January 16, 2017

Execution of Asset Management
Agreement with MIRAI Corporation
JoinedTheInvestment
Trusts
Association, Japan
Capital participation by Mitsui & Co.,
Ltd. Group.
Changed name to Mitsui Bussan &Idera Partners Co., Ltd.
Head office relocation (Chiyoda-ku,Tokyo)

Draft asset management agreement to be attached (Omitted).
The asset management agreement shall become effective upon the termination of theasset management agreement between Sakura and SREFM (i.e. the earlier of (i) thedate six months after the cancellation notice or (ii) Sakura, SREFM and Mitsui Bussan& Idera Partners Co., Ltd. separately agreed upon).
B) The reason for the proposal
Mitsui Bussan & Idera Partners Co., Ltd. is the asset manager of MIRAI Corporation.
We understand that SREFM, which is the asset manager of Sakura, is under good faith
discussion with Mitsui Bussan & Idera Partners Co., Ltd. on the feasibility of the friendly
merger between Sakura and MIRAI Corporation and the negotiation on the merger
terms and the execution of the merger agreement are expected to be completed by thetime of the unitholders' meeting to be held on August 30, 2019.
In such case, Mitsui Bussan & Idera Partners Co., Ltd. is the best asset manager tosmoothly proceed with the merger.
Star Asia AM which is the candidate proposed by Lion Partners is one of the Star Asiagroup companies and it is the asset manager of Star Asia REIT which is thecounterparty to the merger of Sakura which is contemplated by Lion Partners, andthere will be a serious conflict of interest in the negotiation of the merger terms if Star
Asia AM becomes the asset manager of Sakura. On the other hand, there will be no
conflict of interest issue in Mitsui Bussan & Idera Partners Co., Ltd. becoming the asset
manager of Sakura because the negotiation of the merger terms and the execution ofthe merger agreement will be conducted by SREFM, which is the current asset
manager, before the cancellation of the asset management agreement between
Sakura and SREFM.
Further, the two supervisory directors of Sakura have made their position clear thatthey cannot accept the merger proposal process of the merger with Star Asia REIT
proposed by Lion Partners due to its abusive nature and if Star Asia AM becomes theasset manager of Sakura, the majority of the directors of the board of Sakura and theasset manager may not be able to construct a true trust relationship and practicallythere can be disturbance in operation. On the other hand, we are informed that bothtwo supervisory directors have expressed their position that they consider Mitsui
Bussan & Idera Partners Co., Ltd. as a suitable company to become the asset
manager of Sakura and if Mitsui Bussan & Idera Partners Co., Ltd. becomes the asset
manager of Sakura, we can avoid such disturbance in operation.
Further, it is said in the proposal by Lion Partners on the execution of the asset
management agreement with Star Asia AM that such agreement shall become
effective some time after six months after the cancellation notice to be submitted after
the consummation of the unitholders' meeting. Accordingly, if all the proposals made by
Lion Partners are approved, the co-management by the executive director, who madea hostile proposal, and SREFM, the dismissal of which was approved, will continue forat least six months and the disturbance in operation is inevitable. On the other hand
Mitsui Bussan & Idera Partners Co., Ltd., which is in good faith discussion on thepossibility of friendly merger, is the asset manager of MIRAI Corporation, and, as
stated above, we can expect the continuance of the appropriate merger discussion andthe smooth transition from SREFM to Mitsui Bussan & Idera Partners Co., Ltd.
End