Star Asia Investment : (REIT) Financial Report for Fiscal Period Ended January 31, 2022

(REIT) Financial Report for Fiscal Period Ended January 31, 2022

			March 16, 2022
REIT Securities Issuer:	Star Asia Investment Corporation (SAR)	Stock Exchange Listing:	Tokyo Stock Exchange
Securities Code:	3468	URL:	http://starasia-reit.com/en/
Representative:	Atsushi Kato, Executive Director
Asset Management Company:	Star Asia Investment Management Co., Ltd.
Representative:	Atsushi Kato, President and CEO
Contact:	Akiko Kanno, Director and CFO
	TEL: [phone]

Scheduled date of commencement of cash distribution payment:	April 18, 2022
Scheduled date of submission of securities report:				April 27, 2022
Preparation of supplementary financial results briefing materials:	Yes
Holding of financial results briefing session:				Yes
								(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended January 31, 2022 (from August 1, 2021 to January 31, 2022)
(1) Management Status						(% figures are the rate of period-on-period increase (decrease))
Fiscal period	Operating revenue		Operating income	Ordinary income		Net income
	million yen		%		million yen		%	million yen	%	million yen		%
Ended Jan. 2022	5,960		7.2			3,087		8.8	2,517	4.6		2,516		4.6
Ended Jul. 2021	5,560		(16.7)			2,838		(15.9)	2,407	(17.3)		2,407		(79.6)
Fiscal period	Net income		Ratio of net income	Ratio of ordinary income	Ratio of ordinary income
per unit				to equity		to total assets	to operating revenue
			yen					%		%				%
Ended Jan. 2022			1,414					2.7		1.4				42.2
Ended Jul. 2021			1,437					2.7		1.3				43.3
(2) Status of Cash Distribution
	Cash distribution	Total		Cash distribution	Total				Ratio of cash
	per unit	cash distribution	in excess of	cash distribution		Cash distribution
Fiscal period		distribution to
(not including cash	(not including cash	earnings	in excess of		payout ratio
	distribution in excess of	distribution in excess of		net assets
	per unit	earnings
	earnings)	earnings)
	yen	million yen			yen	million yen			%			%
Ended Jan. 2022	1,478			2,644			-	-			105.1			2.8
Ended Jul. 2021	1,462			2,447			-	-			101.7			2.7

(Note 1) Total cash distribution differs from net income due to the reversal of reserve for temporary difference adjustment and other factors.

(Note 2) For the fiscal period ended Jan. 2022, cash distribution payout ratio is calculated by the following formula due to changes in the number of investment units during the period following issuance of new investment units during the period:

Total cash distribution (not including cash distribution in excess of earnings) ÷ Net income × 100

(3) Financial Position

Fiscal period	Total assets	Net assets	Equity ratio	Net assets per unit
	million yen	million yen	%	yen
Ended Jan. 2022	193,316	95,753	49.5	53,511
Ended Jul. 2021	179,170	89,179	49.8	53,260
(4) Status of Cash Flows
	Net cash	Net cash	Net cash	Cash and cash equivalents
Fiscal period	provided by (used in)	provided by (used in)	provided by (used in)
at end of period
	operating activities	investing activities	financing activities
	million yen	million yen	million yen	million yen
Ended Jan. 2022	3,130	(13,178)	11,067	11,725
Ended Jul. 2021	2,672	(242)	(2,805)	10,706

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2. Management Status Forecast for Fiscal Period Ending July 31, 2022 (from February 1, 2022 to July 31, 2022) and Fiscal Period Ending January 31, 2023 (from August 1, 2022 to January 31, 2023)

(% figures are the rate of period-on-period increase (decrease))

										Cash distribution
										per unit	Cash distribution
Fiscal period	Operating revenue	Operating income	Ordinary income	Net income		(not including	in excess of earnings
										cash distribution	per unit
										in excess of earnings)
	million yen	%	million yen	%	million yen	%	million yen		%	yen	yen
Ending Jul. 2022	5,923	(0.6)	2,992	(3.1)	2,500	(0.7)	2,499		(0.7)	1,476	-
Ending Jan. 2023	5,995	1.2	3,031	1.3	2,552	2.1	2,552		2.1	1,476	-

(Reference) Forecast net income per unit (Expected net income ÷ expected total number of	investment units issued and
outstanding at end of period)
Fiscal period ending July 31, 2022:
Expected total number of investment units issued and outstanding at end of period	1,789,389 units
Forecast net income per unit 1,397 yen
Fiscal period ending January 31, 2023:
Expected total number of investment units issued and outstanding at end of period	1,789,389 units
Forecast net income per unit 1,426 yen

(Note 1) Cash distribution per unit calculated using the expected total number of investment units issued and outstanding at end of period above (total number of investment units issued and outstanding as of the date of this report of 1,789,389 units).

(Note 2) Cash distribution per unit (not including cash distribution in excess of earnings) differs from the forecast net income per unit as it is assumed that the amount of reversal of reserve for temporary difference adjustment, etc. will continuously be allocated to distributions.

• Others
• 1. Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement ① Changes in accounting policies accompanying amendments to accounting standards, etc.: Yes

② Changes in accounting policies other than ①	: No
③ Changes in accounting estimates	: No
④ Retrospective restatement	: No

1. Total Number of Investment Units Issued and Outstanding
   ① Total number of investment units issued and outstanding (including own investment units) at end of period

Fiscal period ended Jan. 31, 2022

1,789,389 units

Fiscal period ended Jul. 31, 2021

1,674,389 units

• Number of own investment units at end of period

Fiscal period ended Jan. 31, 2022

0 units

Fiscal period ended Jul. 31, 2021

0 units

(Note) For the number of investment units serving as the basis for calculation of net income per unit, please see "Notes on Per Unit Information" on page 23.

• Financial reports are exempt from audits by a certified public accounting or accounting firms.
• Special Note
  The management status outlook and other forward-looking statements contained in this document are based on information that are currently available and certain assumptions that are deemed reasonable by SAR. Accordingly, the actual management status, etc. may differ materially due to various factors. In addition, the forecast figures are the current figures calculated under the assumptions described in "Assumptions Underlying Operating Results Forecasts for Fiscal Period Ending July 31, 2022 and Fiscal Period Ending January 31, 2023" on pages 3-4. Accordingly, the actual operating revenue, operating income, ordinary income, net income, cash distribution per unit (not including cash distribution in excess of earnings) and cash distribution in excess of earnings per unit may vary due to acquisition/disposition of real estate, etc., trends of the real estate market, etc., fluctuations in interest rates, or other changes in the circumstances surrounding SAR, etc. in the future. In addition, the forecast is not a guarantee of the amount of cash distribution.

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		Assumptions Underlying Operating Results Forecasts for
		Fiscal Period Ending July 31, 2022, and Fiscal Period Ending January 31, 2023
Item		Assumptions
Calculation period	➢ Fiscal period ending July 31, 2022: February 1, 2022 - July 31, 2022 (181 days)
➢ Fiscal period ending January 31, 2023: August 1, 2022 - January 31, 2023 (184 days)
	➢ It is assumed that, with regard to the assets held by SAR as of the date of this report (60 real estate trust
		beneficiary interests, and 2 mezzanine loan debts (collectively, "Currently Held Assets," with those in the
Assets under		form of real estate trust beneficiary interests being referred to as "Currently Held Assets (Real Estate),"
	and those in the form of mezzanine loan debt being referred to as "Currently Held Assets
management
	(Mezzanine)")), there will be no change in assets under management (new property acquisitions, sales
		of the existing properties, etc.) through to the end of the fiscal period ending January 31, 2023.
	➢ However, in reality assets under management may change.
	➢ Rent revenues from Currently Held Assets (Real Estates) are calculated based on the details stated in the
		lease agreements effective as of the date of this report, taking into consideration factors such as market
		movements. It is also assumed that there will be no arrears or non-payment of rent by tenants.
Operating revenues	➢ Interest revenues or dividend revenues from Currently Held Assets (Mezzanine) are calculated based on
		outlines which define the contents of Currently Held Assets (Mezzanine) and loan agreements or trust
		agreements that are effective as of the date of this report. It is also assumed that no interest payments
		or dividend payments will be unpaid.
	➢ Among expenses related to rent business which are the main operating expenses, expenses other than
		depreciation are calculated on the basis of historical performance data, by reflecting variable expense
		factors.
	➢ Fixed property taxes, city planning taxes, and other public charges are expected to be 452 million yen in
		the fiscal period ending July 31, 2022, and to be 452 million yen in the fiscal period ending January 31,
		2023.
	➢ For expenditures for repair and maintenance of buildings, based on the repair and maintenance plan
		prepared by Star Asia Investment Management Co., Ltd, the asset manager of SAR (the "Asset
Operating expenses		Manager"), 207 million yen is expected for the fiscal period ending July 31, 2022, and 207 million yen is
	expected for the fiscal period ending January 31, 2023. However, the actual expenditures for repair and
		maintenance for the fiscal periods could differ significantly from the estimated amounts, as urgent
		expenditures due to damage to buildings may arise due to unexpected factors, and because such
		expenditure amounts generally tend to vary significantly from year to year, and do not arise regularly.
	➢ Depreciation is calculated using the straight-line method including for ancillary costs and is expected to
		be 699 million yen for the fiscal period ending July 31, 2022, and 715 million yen for the fiscal period
		ending January 31, 2023.
	➢ Operating expenses other than rent business related expenses are expected to be 543 million yen in the
		fiscal period ending July 31, 2022, and 552 million yen in the fiscal period ending January 31, 2023.
NOI	➢ Total NOI of the entire portfolio is expected to be 4,211 million yen for the fiscal period ending July 31,
	2022, and 4,275 million yen for the fiscal period ending January 31, 2023.
(Net Operating
➢ NOI is calculated by using the following calculation method.
Income)
	NOI = rent revenue - rent expenses (excluding depreciation)
	➢ As issuance cost of new investment units, non-operating expenses are expected to be 6 million yen for
		the fiscal period ending July 31, 2022 and 6 million yen for the fiscal period ending January 31, 2023.
Non-operating	➢ The sum of interest expenses and other financing-related expenses is expected to be 480 million yen in
	the fiscal period ending July 31, 2022, and 466 million yen in the period ending January 31, 2023.
expenses
➢ The sum of interest expenses on investment corporation bonds and other expenses on investment
		corporation bond issuance is expected to be 4 million yen in the fiscal period ending July 31, 2022, and 4
		million yen in the period ending January 31, 2023.
	➢	As of the date of this report, SAR has outstanding debt of 88,640 million yen and outstanding
		investment corporation bonds of 1,000 million yen.
Debt financing and	➢	It is assumed that, among the above borrowings, those with repayment dates falling in the fiscal
investment		period ending July 31, 2022, and the fiscal period ending January 31, 2023, (15,350 million yen) will be
	fully refinanced.
corporation bonds
➢	It is assumed that there will be no change to the existing outstanding debt and outstanding
		investment corporation bonds through to the end of the fiscal period ending January 31, 2023, other
		than those described above.

• It is assumed that the total number of investment units issued and outstanding will be 1,789,389 units,

Investment units	the number as of the date of this report, and that there will be no change in the number due to issuance
	of new investment units, etc. through to the end of the fiscal period ending January 31, 2023.
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Item	Assumptions
	➢ SAR calculates its distribution per unit (excluding distributions in excess of earnings) pursuant to its cash
	distributions policy as set forth in its Articles of Incorporation.
	➢ As for the reserve for temporary difference adjustment, SAR plans to continuously reverse 1% or more
	of the initial reserve in each fiscal period and use it mainly to mitigate any negative impact on
	distributions caused by temporary decrease in income or incurred expenses and to avoid the occurrence
	of corporate and other tax expenses as a result of any differences between tax and accounting.
Cash distributions	➢ As to cash distribution for the fiscal period ending July 31, 2022, it is assumed that a total of 2,641
per unit	million yen (1,476 yen per unit) will be distributed, which is the amount equivalent to the total of
(not including	estimated net income for the fiscal period of 2,499 million yen, the expected reversal amount from the
cash distribution	temporary difference adjustment reserve of 88 million yen and a portion of profit carried forward from
in excess of earnings)	the previous period of 52 million yen. As to cash distribution for the fiscal period ending January 31,
	2023, it is assumed that a total of 2,641 million yen (1,476 yen per unit) will be distributed, which is the
	amount equivalent to the total of estimated net income for the fiscal period of 2,552 million yen and the
	expected reversal amount from the temporary difference adjustment reserve of 88 million yen.
	➢ The distribution per unit may change due to various factors including changes to the assets under
	management, changes to rent revenues given movements etc. of tenants, or the occurrence of
	unexpected repairs.
Cash distributions
in excess of earnings	➢ SAR has no plans to make distributions in excess of earnings as of the date of this report.
per unit
	➢ SAR assumes that no amendments affecting the above forecast numbers will be made to relevant laws
	and regulations, tax policies, accounting standards, listing rules, rules of investment trusts associations,
Others	etc.
	➢ SAR assumes that there will be no unforeseen material change in general economic conditions or real
	estate market conditions, etc.

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3.	Financial Statements
(1)	Balance Sheet
				(Unit: thousand yen)
			11th fiscal period	12th fiscal period
			(As of July 31, 2021)	(As of January 31, 2022)
Assets
	Current assets
	Cash and deposits	3,169,688	3,774,975
	Cash and deposits in trust	7,536,399	7,950,192
	Operating accounts receivable	96,187	88,581
	Prepaid expenses	177,085	200,093
	Consumption taxes receivable	83,497	155,777
	Other	7,506	14,763
	Total current assets	11,070,364	12,184,385
	Non-current assets
	Property, plant and equipment
	Tools, furniture and fixtures	114	114
	Accumulated depreciation	(42)	(71)
	Tools, furniture and fixtures, net	71	42
	Buildings in trust	49,655,872	53,053,772
	Accumulated depreciation	(4,084,344)	(4,755,763)
	Buildings in trust, net	45,571,527	48,298,008
	Structures in trust	20,635	20,635
	Accumulated depreciation	(4,393)	(5,115)
	Structures in trust, net	16,242	15,520
	Machinery and equipment in trust	97,214	99,519
	Accumulated depreciation	(18,872)	(23,762)
	Machinery and equipment in trust, net	78,341	75,756
	Tools, furniture and fixtures in trust	56,654	67,545
	Accumulated depreciation	(20,334)	(24,969)
	Tools, furniture and fixtures in trust, net	36,319	42,576
	Land in trust	117,051,893	127,283,507
	Construction in progress in trust	550	-
	Total property, plant and equipment	162,754,946	175,715,413
	Intangible assets
	Leasehold rights in trust	4,082,300	4,082,300
	Total intangible assets	4,082,300	4,082,300
	Investments and other assets
	Investment securities	692,234	922,220
	Long-term loans receivable	300,000	-
	Long-term prepaid expenses	260,510	351,116
	Lease and guarantee deposits	10,459	10,379
	Other	-	3,317
	Total investments and other assets	1,263,203	1,287,033
	Total non-current assets	168,100,450	181,084,747
	Deferred assets
	Investment corporation bond issuance costs	-	13,603
	Investment unit issuance expenses	-	34,219
	Total deferred assets	-	47,823
	Total assets		179,170,815	193,316,956

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