17 May 2019
To All Concerned Parties

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 Opinion on the Request
by a Minority Unitholder to Convene an Extraordinary Unitholders’ Meeting
Sakura Sogo REIT (hereinafter “Sakura”), as previously announced on May 11, 2019, received arequest on May 10, 2019 from Lion Partners Godo Kaisha (hereinafter “Lion Partners”), a minority
unitholder of Sakura to convene an extraordinary unitholders’ meeting (hereinafter “Request for
Convocation of Extraordinary Unitholders' Meeting”).
The process and the summary of Sakura’s position regarding the request is as follows.
I.

Process with regard to the request by Lion Partners
Process taken by Lion Partners by the date of this announcement is as follows:
Nov, 2, 2018
(Friday)Apr 26, 2019
(Friday)
May 2, 2019
(Thursday)

May 10, 2019
(Friday)
May 11, 2019
(Saturday)
May 13, 2019
(Monday)
May 14, 2019
(Tuesday)May 16, 2019

Acquisition of more than 3% of the outstanding units byLion Partners
Resignation of Star Asia Investment Management Co, Ltd
director and Chief Financial Officer Toru Sugihara tofacilitate Star Asia Investment Corporation’s external
growth from the sponsor’s side
Full six months has passed after the acquisition of morethan 3% of the outstanding unites by Lion Partners（meeting the threshold for the request for convocation ofunitholders meeting）
Receipt of Request for Convocation of Unitholders’Meeting by Lion Partners
Announcement by Sakura of “Announcement Regarding
Receipt of Request by an Unitholder to Convene an
Extraordinary Unitholders’ Meeting”
Deadline for response by Sakura set by Lion Partners
Meeting with the representative of Lion Partners (Mr.
Sugihara). Sakura responded that it needs certain periodof time for consideration of the request.
Petition for permission of holding unitholders meeting was(Thursday)

filed by Lion Partners

As shown above, the request for convocation of an extraordinary unitholders’ meeting was madesoon after Lion Partners met the time threshold required for the request. In the request LionPartners unilaterally set the next business day as the deadline for a response. There was, andhas never been, any request from Lion Partners, Star Asia group or Star Asia Investment
Corporation (Star Asia) for a meeting to discuss the performance of SKR or SKR’s asset manager.
Further, there was no request for discussion, consultation or negotiation for a proposed merger
prior to their request for an extraordinary unitholders’ meeting. Therefore, it is now clear that theintention was not to allow Sakura any reasonable time for serious consideration of their request.
Sakura has only met with Mr. Sugihara, the representative of Lion Partners and the candidate for
new executive director as proposed by them, on May 14, 2019 upon request from Lion Partners.
However, even at that time, Sakura did not receive any terms relating to a proposed merger or any
explanation of the background of their request. Sakura deems such meeting was only requested
as a formality to make cause for accusation that Sakura has no intention to sincerely consider therequest, thereby allowing for the filing of a petition for permission to hold an extraordinary
unitholders’ meeting.
As mentioned above, the request is not only coercive in urging Sakura to hold an extraordinary
unitholders’ meeting to replace the executive director and the asset management company ofSakura without giving any material or information necessary to consider a proposed merger, withthe ultimate aim of a merger of Sakura with Star Asia, which would likely have a material adverse
effect on the interests of Sakura unitholders, but also a coercive and abusive hostile takeoverproposal as mentioned below.
II.

SKR’s position regarding the request

1.

Request for Convocation of Extraordinary Unitholders' Meeting
The request by Lion Partners is rejected by Sakura because it is of no practical benefit, clearly
detrimental, is abusive and reflects Lion Partners’ malicious intention to disadvantage Sakura
unitholders.
Lion Partners stated in the "Request for Convocation of Unitholders' Meeting" that the reason for
the request is that in their opinion the current executive director and Sakura management company
do not contribute to the basic philosophy of Sakura to maximize unitholders' value. However, itappears obvious that the request is rather intended to effect a coercive and abusive hostile
takeover of Sakura resulting in the forced merger of Sakura and Star Asia Investment Corporation(Star Asia).
Lion Partners’ request for the convocation of the unitholders' meeting occurred immediately after
the required unitholding period, without making any request to the Sakura management company
or the executive director to discuss any concerns leading to the request for the meeting. Neitherof Lion Partners, Star Asia nor its asset management company made any attempt to discuss any
merger proposal with Sakura or its asset management company. As described further below, itappears obvious that the request for a meeting is an abusive process that prioritizes securing profit
for the Star Asia group, of which Lion Partners are a member.
In short, the purpose of the request was to force a merger on terms more favorable to Star Asiaand the Star Asia group by replacing the executive director of Sakura and its asset managementcompany with a person related to Star Asia group and the asset management company of Star
Asia, respectively.
Star Asia group has not provided any terms and conditions of the proposed merger, such as themerger ratio, and the information provided is either misleading or completely inadequate to makeany reasonable assessment of potential benefits to Sakura unitholders

If Lion Partners’ proposal is approved, Sakura’s asset management company will be replaced withthe same asset management company as Star Asia, and there will be a serious conflict of interestin the management of both investment corporations given they share the same diversified
investment mandate. This is of particular concern to Sakura unitholders having regard to the factthat the Star Asia group has a disproportionate ownership interest, clearly favoring Star Asia
(17.9% in Star Asia vs 3.6% in Sakura).
Under such circumstances, it appears obvious that management of Sakura may be undermined,
and the unitholders of Sakura may be forced to accept a merger with Star Asia, even if the detailed
conditions of the merger are disadvantageous to the unitholders of Sakura. If the proposal isapproved Sakura will have lost any opportunity to negotiate merger terms on an arm’s length basis
or seek alternative more desirable merger options.
Lion Partners’ request for convocation of the extraordinary unitholders' meeting is an abusive
exercise of the rights of the unitholder and cannot be accepted because it is an abusive request
with malicious intention that disadvantages Sakura unitholders.
Furthermore, Star Asia group unashamedly stated, “A merger of unitholders, by unitholders andfor unitholders”, but the proposal is exactly “A merger of Star Asia group, by Star Asia group andfor Star Asia group” and it is clearly a coercive and abusive hostile takeover.
Please also refer to the “Response to Notice Received From Star Asia” dated May 17,2019.
2.

Request to Inspect and Copy
Lion Partners also requested to inspect and copy the unitholders register, the minutes ofboard of directors’ meetings and the according books. As stated above, because the request
for convocation of the unitholders' meeting is an abusive exercise of the rights of a unitholder
and also disturbs Sakura’s business, this request is rejected.

3.

Future outlook
As stated above, because it is clear that the request and the proposal by Lion Partners and Star
Asia group are coercive and abusive, and considered a hostile takeover proposal that could
adversely impact unitholders’ value, Sakura completely rejects this request and the proposal
and will continue to act in the best interests of Sakura unitholders.

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