Star Asia Investment : Notice Concerning Acquisition of Real Estate Beneficiary Interests in Trust and entering into Lease Contracts

August 1, 2022

For Immediate Release

Real Estate Investment Trust Securities Issuer

Star Asia Investment Corporation

Representative: Atsushi Kato, Executive Director

(Code: 3468)

Asset Management Company

Star Asia Investment Management Co., Ltd.

Representative: Atsushi Kato

President and CEO

Contact: Akiko Kanno

Director and CFO

TEL: [phone]

Notice Concerning Acquisition of Real Estate Beneficiary Interests in Trust

and entering into Lease Contracts

Star Asia Investment Management Co., Ltd. (the "Asset Manager"), to which Star Asia Investment Corporation ("SAR") entrusts the management of its assets, announces today its decision to acquire and lease real estate beneficiary interests in trust of the following three real estate properties (the "Assets to be Acquired", and the entire transaction to acquire these beneficiary interests is referred to as the "Acquisitions".)

1. Overview of the Assets to be Acquired

				Planned
Asset type	Property no.	Property name	Location	acquisition price
(Note 1)	(million yen)
				(Note 4)
Office	OFC-24	Urban Center Fujisawa (Note 2)	Fujisawa-shi,	2,054
Kanagawa
Retail	RTL-06	abeno nini (Retail) (Note 3)	Osaka-shi,	9,500
Osaka
Hotel	HTL-09	abeno nini (Hotel) (Note 3)	Osaka-shi,	3,600
Osaka
		Total (3 properties)		15,154

(Note 1) As for "Property no.", please refer to "Reference Material 5 The terms used in the table of Description of Asset to be Acquired" below.

(Note 2) The current name of the property is "GRAFARE FUJISAWA". However, it is planned to change the name of the property to the above, on the date of acquisition of the Assets to be Acquired.

(Note 3) "abeno nini" is a sectional ownership building comprised of a retail facility, a hotel, and residence. The part of retail facility portion and the hotel portion which SAR expects to acquire have been described separately by usage each as a single property. The same applies below.

(Note 4) "Planned acquisition price" indicates the planned sale and purchase price stated in the sale and purchase agreement with the seller for the Assets to be Acquired, rounded to the nearest million yen. The planned sale and purchase price does not include consumption tax, local consumption tax and various expenses required for the acquisition.

(1) Contract date

: August 1, 2022

1. Planned acquisition date : August 18, 2022 (delivery and settlement date)

(3)	Sellers	: Please refer to "4. Seller Profile" below
(4)	Acquisition financing	: Proceeds from the issuance of new investment units

through public offering (Primary offering) (Note 5) for which

Note: This press release does not in any way constitute any part of an offering of securities for investment. This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of real estate beneficiary interests in trust and entering into lease contracts, and not for the purpose of soliciting any investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to herein have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities in the United States will be made in connection with the above-mentioned acquisitions. This press release is not for publication, distribution or release, directly or indirectly in or into the United States of America.

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	resolution was made at the Board of Directors meeting of
	SAR held on today, planned new borrowings (Note 6) and
	money on hand to be planned etc.
(5) Settlement method	: Payment of entire amount on planned acquisition date
(6) Presence or absence of	: Presence
broker	Please refer to "6.Overview of Broker" below.

(Note 5) For further details, please refer to "Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units" announced today.

(Note 6) For further details, please refer to "Notice Concerning Debt Financing (Green Loan)" announced today.

2. Reason for the Acquisitions and Leasing

The Acquisitions are to be made to acquire properties which are anticipated to provide stable mid- to long- term income and which have potential for internal growth, in order to realize promotion of the continual external growth strategy aiming to achieve the target of "Asset Size of JPY 300 billion by 2026" established in SAR's Mid-term Business Plan (announced in March 2021).

Furthermore, the Assets to be Acquired are properties to be acquired under bilaterally negotiated transactions using the Asset Manager's own unique network. Also going forward, SAR will continue to aim to achieve the asset size target of the Mid-term Business plan by utilizing the Asset Manager's own unique network, in addition to utilizing Sponsor support.

The main reasons behind the decisions to acquire and lease each of the Assets to be Acquired are described below.

The tenants of the Assets to be Acquired satisfy the tenant selection standards described in the "Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties" dated April 27, 2022.

【Urban Center Fujisawa】

Urban Center Fujisawa is a multi-tenantmid-sized office building located close to a station at an approximate

7-minute walk from "Fujisawa" Station on the JR Tokaido Main Line, offering direct access to "Tokyo" Station and "Yokohama" Station. The property is located in an area where there are many office buildings and multi- family residential apartment buildings etc., and given this background area, the building is capable of meeting the needs of community-based tenants in the trade area surrounding Fujisawa city. Furthermore, the property is located along the main road connecting "Fujisawa" Station and "Tsujido" Station on the JR Tokaido Main Line and has convenient traffic access for automobile users, and so has strong location competitiveness.

As to property features, the building is 8 floors high and has 1 basement floor, with an open atmosphere floor that takes in light from 2 sides (south and east sides), with a view of Enoshima Island and Miura peninsula from the upper floors. In addition to being located in a highly convenient location close to a train station as described above, also given that Fujisawa-shi is the largest population area in the Shonan area (see Note) and a community-based area, the current tenants consist of an administrative office, an employment support facility , and a call center of a large company, which match the location characteristics, and SAR believes that stable income can be anticipated in the mid- to long-term and there is also potential demand for satellite offices which is expected to continue even after the convergence of COVID-19 pandemic.

Furthermore, due to the convenience of the property's location near "Fujisawa" Station and the presence of convenient living facilities in front of the station, as well as its excellent living environment, SAR believes that repositioning the property into a multi-family residential apartment building is also conceivable.

The acquisition was decided, given that as a result of comprehensively considering the location features and property features described above, it has been determined that it is possible to earn stable mid- to long-term income from the property and that it will contribute to increase income stability of the portfolio.

(Note) "Shonan area" is the name of a district defined by Kanagawa Prefecture, and includes Hiratsuka-shi,Fujisawa-shi,Chigasaki-shi,Hadano-shi,Isehara-shi,Samukawa-machi,Oiso-machi and Ninomiya-machi. The same applies below.

Note: This press release does not in any way constitute any part of an offering of securities for investment. This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of real estate beneficiary interests in trust and entering into lease contracts, and not for the purpose of soliciting any investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to herein have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities in the United States will be made in connection with the above-mentioned acquisitions. This press release is not for publication, distribution or release, directly or indirectly in or into the United States of America.

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【abeno nini (Retail)/ abeno nini (Hotel)】

abeno nini (Retail) and abeno nini (Hotel) are large multi-use facilities complex with retail facilities, hotel, and residences directly connected by underground passageway to "Tennoji" Station, one of Osaka's largest terminal stations, on the JR Osaka Loop Line, Osaka Metro Midosuji Line, and Tanimachi Line and "Osaka Abenobashi" Station on the Kintetsu Minami Osaka Line. The lower 2nd basement to 4th floors have retail facilities, the middle 3rd to 11th floors are the hotel floors, and the upper 13th to 24th floors are residences. The targets of the acquisition this time are a part of retail facilities portion and the whole of the hotel portion.

In the neighborhood, there are some various retail facilities including "Abeno HARUKAS (English notation : Osaka Harukas)", and it is a highly prosperous commercial area developed under the Abeno-chiku Type II urban redevelopment project completed in 2018. Furthermore, as the property is located on the traffic flow line of the pedestrian deck which connects "Tennoji" Station and adjacent retail facilities, the property is pedestrian- friendly and highly migratory.

The tenants are mainly comprised of visit-type shops which require the highly convenient traffic locations of being directly connected to a terminal where many people pass by, such as banks, an international school, and restaurants etc.

As the property is located along a major road, it is highly visible and competitively located suitable for hotels. Furthermore, it has good access to "Kansai International Airport" and "Shin-Osaka" Station which are access points to places abroad and in Japan, respectively, and to the sightseeing resource of "Universal Studios Japan" and "Kyocera Dome Osaka" where many events are held, and it is possible to attract both business demand and sightseeing demand. Additionally, stable income has been secured by fixed rents under a fixed-term building lease agreement with Resorttrust, Inc. SAR believes that the financial status of the hotel will improve due to the recovery of domestic accommodation demand following the convergence of COVID-19 pandemic as well as recovery of inbound demand envisioned to occur in the future, and internal growth is expected going forward by changing the rent structure at latest after the end of the lease contract term.

The acquisition was decided, given that as a result of comprehensively considering the location features and property features described above, it has been determined that it is possible to earn stable mid- to long-term income from the properties and that it will contribute to improve income stability of the portfolio.

In the Asset Manager's Management Guidelines which prescribe the basic rules for investment management, SAR has established the Tokyo Area (see Note) as the main target investment area, and prescribed that for the time being the investment ratio in the same area should be at least 70% (on acquisition price basis). After the Acquisitions, the Tokyo Area ratio of the entire portfolio will become 66.7%. Although the investment ratio in the Tokyo Area will be estimated to become lower than 70%, if the 3 suburban retail facilities, "La Park Kishiwada", "Suroy Mall Chikushino", and "Seiyu Minakuchi", which have been considered to be sold are excluded, the calculated Tokyo Area ratio is 72.4%.

"abeno nini (Retail)" and "abeno nini (Hotel)" both comprise a part of a single large building, their usage differ and are conceived to have differing risk-return characteristics from the perspectives of risks related to business cycles, and leaving of tenants and rent reductions of each property. Also, "abeno nini" is a sectional ownership building and it is possible to sell and purchase each of "abeno nini (Retail)" and "abeno nini (Hotel)" independently, so SAR views the two properties as separate transaction targets.

Taking into account such circumstances, the Management Guidelines has been partially amended today, and the definition of mid-sized assets has been revised. For further details, please refer to "Notice Concerning Partial Amendment to the Management Guidelines of the Asset Manager" announced today.

As SAR will continue to uphold the investment policy of maintaining at least 70% (on acquisition price basis) of investments in the Tokyo Area going forward as the main investment target area, there are no changes made to the investment ratios set by area prescribed in the Management Guidelines.

Note: This press release does not in any way constitute any part of an offering of securities for investment. This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of real estate beneficiary interests in trust and entering into lease contracts, and not for the purpose of soliciting any investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to herein have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities in the United States will be made in connection with the above-mentioned acquisitions. This press release is not for publication, distribution or release, directly or indirectly in or into the United States of America.

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(Note) SAR has classified investment target areas into "Tokyo Area", "Greater Tokyo Area", "Osaka Area", "Nagoya Area", "Fukuoka Area", "Sapporo Area" and other ordinance-designated cities, and has designated investment areas within each classification by asset type (usage). With respect to offices and retail facilities, the 23 wards of Tokyo, Kawasaki-shi, and Yokohama-shi which SAR believes have high demand for such properties are defined as "Tokyo Area", and for residences, logistic facilities, hotels, and student residences, given their feature that demand is expected from areas other than the above, Tokyo, Kanagawa, Saitama, and Chiba prefectures are defined as the "Tokyo Area". The same applies below.

Note: This press release does not in any way constitute any part of an offering of securities for investment. This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of real estate beneficiary interests in trust and entering into lease contracts, and not for the purpose of soliciting any investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to herein have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities in the United States will be made in connection with the above-mentioned acquisitions. This press release is not for publication, distribution or release, directly or indirectly in or into the United States of America.

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3. Summary of Assets to be Acquired

Overview of Assets to be Acquired is shown in the tables (1)-(3) below. For a glossary of the terms used in the tables, please refer to "Reference Material 5 The terms used in the table of Description of Assets to be

Acquired" below.

(1) Urban Center Fujisawa

Property

OFC-24

Property

Urban Center Fujisawa

Type

Office

No.

name

Overview of specified asset

Type of specified asset

Beneficiary interest in trust

Trustee

Sumitomo Mitsui Trust Bank, Limited

Planned acquisition price

2,054 million yen

Planned acquisition date

August 18, 2022

Appraised value

2,200 million yen

Seller

Not disclosed (Note)

Location

987-12 Fujisawa aza naka yokosuka, Fujisawa-shi, Kanagawa

Indication of residential

1031 Fujisawa, Fujisawa-shi, Kanagawa

address

Nearest station

Approx. 7-minute walk from "Fujisawa" Station of JR Tokaido Main Line

Land

Type of

Proprietary ownership

ownership

Site area

1,005.52㎡

Use district

Commercial district

Building

coverage

80%

Floor area ratio

400%

ratio

Building

Type of

Proprietary ownership

ownership

Total floor

4,392.71㎡

Use

Office/Residence/Parking

area

Construction

Steel-framed reinforced concrete

April 9, 1991

Structure and floors

Structure with 1 basement / 8 floors

completion

above ground

Property management

CBRE K.K.

Master lease company

SAR

company

Type of master lease

Pass-through

Security

Unsecured

Trust expiration date

August 31, 2032

Status of leasing (as of the end of April 2022)

Monthly rent (including

Total leasable are

3,396.17㎡

common area

12,034 thousand yen

maintenance fee)

Total leased area

3,298.18㎡

Security and guarantee

84,390,960 yen

deposits

Total number of tenants

6

Occupancy rate

December 2021

January 2022

February 2022

March 2022

April 2022

100.0%

100.0%

100.0%

100.0%

97.1%

Special notation

Not applicable.

(Note) Not disclosed, because approval for disclosure has not been obtained from the Seller.

Note: This press release does not in any way constitute any part of an offering of securities for investment. This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of real estate beneficiary interests in trust and entering into lease contracts, and not for the purpose of soliciting any investment, within or outside of Japan. Additionally, this press release is not an offer of securities for sale in the United States. The securities referred to herein have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. No offering or sale of securities in the United States will be made in connection with the above-mentioned acquisitions. This press release is not for publication, distribution or release, directly or indirectly in or into the United States of America.

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