March 2, 2020
For Immediate Release
Real Estate Investment Trust Securities Issuer
Sakura Sogo REIT Investment Corporation
Representative:
Toru Sugihara, Executive Director(Code : 3473)
Asset Management Company
Star Asia Investment Management Co., Ltd.
Representative:
Atsushi Kato, President and CEO
Inquires:
Akiko Kanno, Director and CFO
TEL: 03-5425-1340

Forecasts of Operating Results for the Fiscal Period Ending July 31, 2020 (Final Fiscal Period)and Merger Consideration
As announced in the “Notice Concerning Conclusion of a Merger Agreement between Star Asia
Investment Corporation and Sakura Sogo REIT Investment Corporation”released today , Sakura Sogo REIT(SSR) intends to implement an absorption-type merger (the “Merger”) effective August 1, 2020, with Star
Asia Investment Corporation (SAR) as the surviving corporation and SSR as the dissolving corporation, andhave executed a merger agreement (the “Merger Agreement”) dated today. Also, SSR intends to submit aproposal to its general meeting of unitholders scheduled to be held on March 30, 2020, regarding anamendment of its article of incorporation to change its fiscal period end dates from June 30 and December
31 to January 31 and July 31, respectively. Provided that such amendment of the articles of incorporation isapproved at the general meeting of unitholders, SSR’s final fiscal period is expected to be the seven-month
period from January 1, 2020 to July 31, 2020 (the “fiscal period ending July 31, 2020”).
SSR announced that it is difficult for SSR to estimate any impact on SSR’s operating results from thelawsuit etc. from GALAXY JREIT PTY LIMITED, a unitholder of SSR, amendment of asset managementagreement and the Merger with Star Asia Investment Corporation etc. at the time SSR released its financial
report and that SSR would make a timely announcement after these issues are determined or resolved in“(REIT) Financial Report for Fiscal Period Ended December 31, 2019” announced in February 18, 2020.
In connection with the execution of the Merger Agreement, SSR hereby announces the forecasts of theoperating results and merger consideration in the form of cash distributions to be paid instead of cash
distributions for the fiscal period ending July 31, 2020 which is expected to be the final period if theproposal to amend the articles of incorporation as described above is approved at the general meeting ofunitholders and the Merger comes into effect.

11. Forecasts of operating results and merger consideration for the fiscal period ending July 31, 2020 (thefinal fiscal period / 7 months)
OperatingOperating

Revenue

Income(Million yen)

(Million yen)

Ordinary Income

Net Income(Million yen)

(Million yen)

MergerConsiderationin the Form ofCash
Distribution perUnit(yen)

Fiscal period ending
July 31, 2020 (seven

2,737

1,007

806

805

2,418months)(Note)
1.
2.
3.

4.

5.
6.

The period ending July 31, 2020 for which forecast of operating results and merger consideration are annouced isexpected to be 7 months from January 1, 2020 to July 31, 2020.
Expected total number of outstanding units at the end of the final fiscal period: 333,001 units
The forecast above are based on certain assumptions as of today and on the presumption that the Merger will
come into effect, and the actual operating revenue, operating income, ordinary income, net income, and merger
consideration per unit may vary due to trends in the real estate market and the like, and changes in the investmentenvironment and other conditions surrounding SSR, the status of exercise of put option of investment units andcosts with regards to the Merger. The forecasts should not be construed as a guarantee of the amount of merger
consideration.
Instead of cash distributions to the unitholders of SSR for SSR’s final fiscal period, SAR, as the surviving corporation
after the Merger, will, based on the amount of distributable profit of SSR and within a reasonable period after theeffective date of the Merger, make a payment on the Merger to the unitholders registered or recorded on the finalunitholders register of SSR as of July 31, 2020, the day immediately prior to the effective date of the Merger(excluding the unitholders of SSR who have demanded the purchase of their investment units pursuant to theprovisions of Article 149-3 of the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, asamended) (excluding the unitholders of SSR who have withdrawn such purchase demands)) (hereinafter the“Allotted Unitholders”) , in an amount equivalent to the cash distributions for the above mentioned fiscal period(the payment will be the amount of distributable profit of SSR as of the day immediately prior to the effective dateof the Merger divided by the number of investment units that is obtained by deducting (a) the number ofinvestment units held by the unitholders other than the Allotted Unitholders from (b) the total number of SSR
investment units issued and outstanding as of the day immediately prior to the effective date of the Merger (suchcalculated amount being rounded down to the nearest whole yen). As a result, the amount of payment on theMerger will vary depending on the status of exercise of the right to demand purchase of investment units. Because
the status of such exercise cannot be confirmed at present, the forecasted figures above are based on theassumption that the right to demand purchase of investment units is not exercised.
When a certain level of divergence from the above forecast is expected, the forecast may be revised.
Amonts less than one unit have been rounded down.

2. Reason for Announcement
SSR announced that it is difficult for SSR to estimate any impact on SSR’s operating results from thelawsuit etc. from GALAXY JREIT PTY LIMITED, a unitholder of SSR, amendment of asset managementagreement and the Merger with Star Asia Investment Corporation etc. at the time SSR released its financial
report and that SSR would make a timely announcement after these issues are determined or resolved in“(REIT) Financial Report for Fiscal Period Ended December 31, 2019” announced in February 18, 2020. In
connection with the execution of the Merger Agreement, SSR intends to submit a proposal to its general
meeting of unitholders scheduled to be held on March 30, 2020, regarding an amendment of its articles ofincorporation to change the ends of its fiscal period from the last days of June and December to the lastdays of January and July. Provided that the amendment is approved at the general meeting of unitholders,
the seven months from January 1, 2020 to July 31, 2020 is expected to be the final fiscal period of SSR when2the Merger comes into effect, and SSR hereby announces the forecasts of operationg results for the fiscal
period ending July 31, 2020 (from January 1,2020 to July 31, 2020) and the merger consideration in theform of cash distributions.
Forecasts of operating result for the fiscal period ending July 31,2020 (from January 1, 2020 to July 31,2020) and merger consideration are based on the assumption that the Merger Agreement and theamendment of the articles of incorporation to change the end of the fiscal period are approved by the SSR’s
unitholders’ meeting to be held on March 30, 2020.
As for the forecasted or operating results and cash distribution per unit of SAR after the merger, pleaserefer to “Notice Concerning the Forecast of Operating Results and Distributions Subsequent to the Mergerof Star Asia Investment Corporation and Sakura Sogo REIT Investment Corporation for the Fiscal Periods
Ending January 31, 2021 and July 31, 2021” announced today by SAR and SSR.
END
＊ 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.
＊ Sakura Sogo REIT Investment Corporation website address: http://sakurasogoreit.com/en/

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[Exhibit]
Assumptions for the Forecast of Operating Results for the fiscal period ending July 31, 2020 (final fiscal period)and merger consideration in the form of cash distributions
Item

Assumptions

Calculation Period➢ Fiscal period ending July 31, 2020 (Final Fiscal Period): January 1, 2020 – July 31,2020(213 days)

Assets underManagement➢ Its is assumed that there will be no change (new property acquisitions, disposition ofexisting properties, etc.) on 18 real estate trust beneficiary interests owned by SSR
today by July 31, 2020.

OperatingRevenue➢ Rent revenues are calculated based on the lease agreements effective as of today
taking factors such as propertys’ competitiveness and tenants’ movement intoconsideration.
➢ It is also assumed that there will be no arrears or non-payment of rent by tenants.

OperatingExpenses➢ Among expenses related to rent business, which are the principal operating expenses,
expenses excluding depreciation are calculated on the basis of historical data, reflecting
variable factors of expenses.
➢ Fixed property taxes, city planning taxes and other public charges are expected to be
225 million yen.
➢ For the expenditures for repair and maintenance of buildings, 57 million yen isexpected based on repair and maintenance plans drawn up by Star Asia Investment
Management Co., Ltd (Asset Maneger of SSR). However, the expenditures for repair
and maintenance for the fiscal period could differ significantly from the estimatedamounts, as expenditures may arise urgently due to damage to buildings and suchcaused by unexpected factors, and because the variance in amounts generally tends tobe significant from year to year and repair and maintenance expenses do not arise
regularly.
➢ Depreciation is calculated using the straight-line method including ancillary costs and isexpected to be 310 million yen.
➢ 151 million yen for costs of asset due diligence and for advisory remunerations etc.
with regards to the Merger with Star Asia Investment Corporation is included inoperating expenses.

NOI➢ The total NOI of Existing Properties (real estate, etc.) is expected to be 1,455 million yen.
➢ NOI is calculated by using the following calculation method.
NOI = rent revenue – rent expenses (excluding depreciation)

Non-operatingExpenses➢ Interest expense and other financial expenses are expected to be 201 million yen.

Debt Financing➢ The total amount of interest-bearing liabilities is 29,200 million yen as of today andassumed not to vary until the end of the fiscal period ending July 31, 2020.

➢ The total amount of Investment units is assumed to be 333,001 as of today.
➢ It is assumend that there will be no changes in the number of investment units issued
Investment Units
due to additional issuance, etc. of investment units until the end of the fiscal period
ending July 31, 2020.

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Item

Assumptions➢ Merger consideration in the form of cash distribution per unit will be paid as theproceeds of cash distributions for the fiscal period ending July 31, 2020 (the final fiscalperiod) and are calculated on the assumption of the cash distribution policy in SSR’sMerger
articles of incorporation.
Consideration in ➢ It is assumed that almost all net income for SSR’s final fiscal period is paid as meger
the Form of Cashconsideration.
distribution per ➢ The merger consideration in the form of cash distributions per unit may change due tounit
various factors, including the status of the exercise of put option of investment units inrelation to the Merger, expenses related to the Merger, changes in assets undermanagement, changes in rent income following changes in tenants and the like, and theoccurrence of unexpected repairs.

Other➢ It is assumed that there will be no changes in legislation, taxation, accounting
standards, listing regulations, and rules and requirements imposed by The Investment
Trusts Association, Japan that would impact the avobe mentioned forecasts.
➢ It is assumed that there will be no unforeseen material changes in general economic
trends and real estate market conditions and the like.

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