Samty Residential Investment : Notice Concerning Acquisition of Properties

July 12, 2021

For Translation Purposes Only

Real Estate Investment Trust Securities Issuer

Samty Residential Investment Corporation

1‐8‐3 Marunouchi, Chiyoda‐ku, Tokyo

Masafumi Takahashi, Executive Director

(Securities Code: 3459)

Asset Management Company:

Samty Asset Management Co., Ltd.

Masafumi Takahashi, Representative Director

Inquiries: Hidekazu Nizawa

Director

Business Management Division

Phone: + 81‐3‐5220‐3841

Notice Concerning Acquisition of Properties

Samty Residential Investment Corporation ("Samty Residential") announces that Samty Asset Management Co., Ltd. (the "Asset Management Company"), to which Samty Residential entrusts management of its portfolio assets, decided today to acquire the following 24 properties (the "Assets to Be Acquired") (the "Acquisition"). Details are as follows.

As Samty Co., Ltd. ("Samty"), the seller of some of the Assets to Be Acquired, falls under the category of an interested party, etc. as defined under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended; the "Investment Trusts Act"), the Asset Management Company obtained the consent of Samty Residential based on the approval at Samty Residential's Board of Directors' meeting held on July 9, 2021, pursuant to the Investment Trusts Act.

1. Overview of the Assets to Be Acquired

				Planned	Date of	Planned
	Property	Property name		acquisition		Acquisition fund	Settlement
		conclusion of
Area	Location	price	(Note 2)	date of	Seller
number	(Note 1)		agreement	(Note 4)	method
			(million	acquisition
				(Note 3)
				yen)
	A‐73	S‐FORT Kego Tower	Chuo‐ku,	4,320
	Fukuoka‐shi
	A‐74	S‐RESIDENCE Aoi II	Higashi‐ku,	1,820
	Nagoya‐shi
		S‐FORT	Nakamura‐ku,		684
	A‐75	Meiekiminami
	Nagoya‐shi
		5‐Chome
								Funds pertaining to
	A‐76	S‐FORT Hakozaki	Higashi‐ku,		680
					the issuance of new
	Higashi	Fukuoka‐shi				Samty
						investment units
	A‐77	S‐RESIDENCE	Nakamura‐ku,		665
				Co., Ltd.	resolved at Samty
Major	Meiekiminami	Nagoya‐shi		July 12,	August 3,	Lump‐sum
				Residential's Board
		Nakagawa‐ku,
Regional	A‐78	S‐FORT Kanayama		612	2021	2021		of Directors'	upon
Cities	Nagoya‐shi			delivery
							meeting held on
			Izumi‐ku,
	A‐79	S‐FORT Izumi Chuo		545				July 12, 2021,
	Sendai‐shi
								borrowings, and
		S‐RESIDENCE Soen	Chuo‐ku,
	A‐80		477				cash on hand
	EAST	Sapporo‐shi
	A‐81	S‐FORT Yagoto	Tempaku‐ku,		442
	Nagoya‐shi
	A‐82	S‐FORT Sapporo Kita	Chuo‐ku,		405			Not
	5‐Jo	Sapporo‐shi
						disclosed
		S‐FORT Sapporo	Higashi‐ku,
	A‐83		385			(Note 5)
	Motomachi	Sapporo‐shi

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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				Planned	Date of	Planned
	Property	Property name		acquisition
Area	Location	conclusion of		Acquisition fund	Settlement
price	(Note 2)	date of	Seller
number	(Note 1)		agreement	(Note 4)	method
			(million	acquisition
				(Note 3)
				yen)
	B‐38	S‐FORT Kokura	Kokurakita‐ku,	1,400
	Kitakyushu‐shi
	B‐39	S‐FORT Niigata	Chuo‐ku,	1,395
	Ekimae	Niigata‐shi
						Samty Co.,
	B‐40	S‐FORT Takasaki	Takasaki‐shi,	1,098
	Gunma			Ltd.
Other
B‐41	S‐FORT Yokkaichi	Yokkaichi‐shi,		823
Regional	arcam	Mie
Cities	B‐42	S‐FORT	Kagoshima‐shi,		787
	Kagoshima Chuo	Kagoshima					Funds pertaining
		S‐FORT Heisei	Minami‐ku,					Not	to the issuance of
	B‐43		755			disclosed	new investment
	Keyakidori	Kumamoto‐shi
						(Note 5)	units resolved at	Lump‐sum
	B‐44	S‐FORT Yokkaichi	Yokkaichi‐shi,		612	July 12,	August 3,		Samty Residential's
	zeal	Mie		2021	2021		Board of Directors'	upon
					delivery
	C‐33	S‐FORT	Itabashi‐ku,	3,365				meeting held on
	Nakaitabashi	Tokyo				July 12,2021,
								Samty Co.,	borrowings, and
	C‐34	S‐FORT Kameido	Koto‐ku, Tokyo	1,248
			Ltd.	cash on hand
	C‐35	S‐FORT Gyotoku	Ichikawa‐shi,		919
Greater	Chiba
Tokyo	C‐36	S‐FORT	Funabashi‐shi,		898
Area	Funabashi Kaijin	Chiba
		S‐FORT	Funabashi‐shi,					Samty Hotel
	C‐37	Funabashi		768			Management
	Chiba
		Honcho					Co., Ltd.
	C‐38	S‐FORT Hachioji	Hachioji‐shi,		462			Samty Co.,
	Tokyo				Ltd.
		Total		25,565

(Note 1) Some of the current names of the properties are as shown in the table below. Samty Residential plans to change the names of the Assets to Be Acquired to the names indicated in the table above as soon as they are acquired.

Number	Current property name
A‐73	SAMTY Kego Tower
A‐75	Residencia Meiekiminami
A‐76	SAMTYHakozaki Higashi
A‐78	Elstanza Kanayama
A‐79	SAMTY Residence Izumi Chuo
A‐80	SAMTY Soen EAST
A‐81	Berg Yagoto
A‐82	SECIAS BLUE
A‐83	CASA Motomachi
B‐38	HIT Kokura Building
B‐39	SAMTY Residence Niigata Yoneyama
B‐40	Grace Garden Takasaki
B‐41	GRANDUKE Yokkaichi arcam
B‐42	SAMTY Kagoshima Chuo Residence
B‐43	EMYU Heisei Keyakidori
B‐44	GRANDUKE Yokkaichi zeal
C‐33	Axle Court Nakaitabashi
C‐34	Maison Lapole
C‐35	SAMTY Residence Gyotoku
C‐36	SAMTY Residence Nishifunabashi
C‐37	West Funabashi
C‐38	Icho Mansion

(Note 2) "Planned acquisition price" is the amount which will be required for the acquisition of the Assets to Be Acquired excluding various costs such as commissions for mediation of transaction, taxes and public dues, etc. (the amount of the price of purchase of the real estate, etc. indicated in the purchase agreement, etc.). Amounts of less than 1 million yen are rounded down. For S‐FORT Sapporo Kita 5‐Jo, S‐FORT Sapporo Motomachi and S‐FORT Heisei Keyakidori, the planned acquisition price is the amount as above but excluding also the consideration for status transfer.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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(Note 3) For S‐FORT Sapporo Kita 5‐Jo, S‐FORT Sapporo Motomachi and S‐FORT Heisei Keyakidori, Samty Residential plans to succeed from Samty the status of buyer in the real estate purchase agreements for the concerned Assets to Be Acquired (the trust beneficiary interest purchase agreement in the case of S‐FORT Heisei Keyakidori) concluded between the current owner and Samty by concluding with Samty status transfer agreements of content that Samty Residential shall succeed the concerned contractual statuses on the planned date of acquisition of the concerned Assets to Be Acquired.

(Note 4) For details of the issuance of new investment units and borrowings, please refer to "Notice Concerning Issuance of New Investment Units through Public Offering and Third‐Party Allotment, and Secondary Offering of Investment Units" and "Notice Concerning Borrowing of Funds" dated today.

(Note 5) Not disclosed because consent of the seller has not been obtained.

1. Reason for the Acquisition
   Samty Residential is aiming to build a portfolio that pursues "Stability" (diversified investments in strictly selected residential properties nationwide), "Growth potential" (expansion of the portfolio size by continually investing in new properties centered on major regional cities), and "Profitability" (realization of expected high returns by investing in carefully screened residential properties located in major regional cities) through investment in residences mainly in major regional cities.
   The Acquisition will be made with the intent to expand the asset size steadily and improve the stability of the portfolio by utilizing the sponsor support of Samty, the main sponsor of Samty Residential. The Acquisition will expand the portfolio to 156 properties for a total (planned) acquisition price of 143.8 billion yen. Furthermore, the investment ratio by area after the Acquisition is projected to be 72.6% for regional cities (47.3% for major regional cities and 25.3% for other regional cities) and 27.4% for the greater Tokyo area based on the (planned) acquisition price.
   Considering that the Assets to Be Acquired are targeted assets under asset management specified in the Articles of Incorporation of Samty Residential and that stable cash flows that would contribute to the profitability of the entire portfolio can be expected in comprehensive consideration of the individuality of each property, including the location and building age, Samty Residential deemed that the Acquisition would serve to improve portfolio quality in the medium to long term. For the details of the Assets to Be Acquired and the points assessed, please refer to the following "3. Details of the Assets to Be Acquired." In line with the acquisition of the Assets to Be Acquired, Samty Residential has selected their lessees based on the matters concerning criteria for selecting tenants set forth by Samty Residential (for details of the criteria, please refer to "Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties" dated April 28, 2021 (Japanese only)).
2. Details of the Assets to Be Acquired
   The details of the Assets to Be Acquired are as shown in the table below. However, the information in "Leased area," "Occupancy rate," "Monthly rental revenue," and "Security and guarantee deposits" are as of the end of May 2021. Furthermore, the following tables may refer to real estate that are the Assets to Be Acquired or real estate that are the trust assets of real estate trust beneficiary interest as the "Property." Please refer to the following terms with regard to the tables.
3. • "Location" is based on the residential address. However, for properties that have no residential address, the building address or building location on the certificate of the registered matters is indicated. In addition, "Site area" of land, and "Use," "Completion date," "Structure and floors," and "Total floor area" of buildings are based on information in the certificate of the registered matters, and may not necessarily be identical with the present state of the said real estate.
   • "Planned acquisition price" is the amount required for the acquisition of the Assets to Be Acquired excluding various costs such as commissions for mediation of transaction, taxes and public dues, etc. (the amount of the price of purchase of the real estate, etc. indicated in the purchase agreement, etc.). Amounts of less than 1 million yen are rounded down.
   • "Trustee" indicates the trustee or planned trustee of trust pertaining to the real estate trust beneficiary interest.
   • "Building coverage ratio" is, in principle, the ratio of the building area of the building designated in Article 53, Paragraph 1 of the Building Standards Act to its site area, and represents the maximum value of the building coverage ratio provided in city plans in accordance with zoning, etc. Such a maximum value of the building coverage ratio may be relaxed, increased, or decreased due to being a fire‐resistant building within a fire prevention district and for other reasons, and may be different from the building coverage ratio that is actually applied.
   • "Floor area ratio" is, in principle, the ratio of the total floor area of the building to site area designated in Article 52, Paragraph 1 of the Building Standards Act, and represents the maximum value of the floor area ratio provided in city plans in accordance with zoning, etc. Such a maximum value of the floor area ratio may be relaxed, increased, or decreased due to the width of roads connecting to the site area and for other reasons, and may be different from the floor area ratio that is actually applied.
   • "Zoning" is the type of zoning listed in Article 8, Paragraph 1, Item 1 of the City Planning Act (Act No. 100 of 1968, as amended; the "City Planning Act").
   • "Total floor area" is the floor area for the entire building (excluding that of attached buildings).
   • "Number of leasable units" is the number of units that can be leased as of the end of May 2021 (including number of stores, etc. if any).
   • "Property management company" is the property management company to which property management is entrusted or planned to be entrusted with regard to the real estate.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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• "Master lease company" is the lessee that has concluded or planned to conclude a master lease agreement with the owner of the real estate.
• "Master lease type" indicates whether a pass‐through‐type master lease agreement or a fixed‐rent‐type master lease agreement is concluded.
• "Probable maximum loss (PML value)" is the value calculated in the evaluation of seismic risk analysis conducted by Tokio Marine & Nichido Risk Consulting Co., Ltd. as requested as part of due diligence upon acquisition of the real estate trust beneficiary interest by Samty Residential. Furthermore, "Probable maximum loss (PML value)" refers to the extent of the damage that would be incurred due to the largest earthquake (a large earthquake with the likelihood of occurring once in 475 years = a large earthquake with a 10% likelihood of occurring once in 50 years) foreseen during the assumed useful life (50 years being the useful life of an ordinary building) as a ratio (%) of the replacement value for the foreseeable restoration costs of the damage.
• "Total leasable area" is the total floor area of residences and shops, etc. that is practically leasable to end tenants (if the common area, etc. is leased, the concerned area is also included). Total leasable area is not based on the real estate registry, but by the floor area stated in the lease agreement or the floor area calculated from the building as‐built drawing, etc., and may not necessarily be identical to the floor area written in the real estate registry.
• "Leased area" is the area (the area indicated in lease agreements) for which lease agreements are actually concluded with end tenants, and a lease is conducted if the type of master lease as of the end of May 2021 is a pass‐through‐type master lease agreement. However, the indicated figure includes only the area of residences and shops, etc. (or the area of the entire units if all the units are leased in a lump‐sum), and excludes the leased area of parking lots, etc.
• "Occupancy rate" is the rate of leased area to leasable area, rounded to the first decimal place.
• "Number of tenants" is the number of tenants with which Samty Residential or the trustee has a direct rental contract relationship. Therefore, when the master lease company subleases each unit to end tenants due to the introduction of a master lease, the total number of tenants is shown as 1; that is, the number of end tenants of the sublease is excluded. Furthermore, even if the managed asset is leased by the master lease company, when there are end tenants who do not accept the master lease, the end tenants and Samty Residential or the trustee have a direct rental contract relationship. In those cases, however, the number of end tenants in question is not included in the number of tenants either.
• When the type of master lease is a pass‐through‐type master lease agreement, "Monthly rental revenue" is the total monthly rent as of the end of May 2021 (including common area expenses, but not fees for incidental facilities such as parking lots or trunk rooms) stated in the lease agreement concluded by the master lease company, or the owners of each real estate or trust real estate, with end tenants. Amounts are rounded down to the nearest thousand yen. Consumption tax and other taxes are excluded.
• "Security and guarantee deposits" is the total amount of balance of security and guarantee deposits remaining as of the end of May 2021 based on lease agreements concluded with end tenants, rounded down to the nearest thousand yen. However, if such does not need to be refunded based on special policy conditions such as deductions from deposits and non‐refundable deposit in a lease agreement, such an amount is excluded.
• "Characteristics of the property" are the basic nature, characteristics, etc. of the real estate with reference to the real estate appraisal report and considering the results of surveys independently conducted by the Asset Management Company.
• "Special remarks" are matters recognized as important as of the end of May 2021 in terms of the rights and use, etc. of the real estate, including the following matters, as well as consideration of the degree of impact on the appraisal value, profitability, and disposition of real estate.
• 1. Significant limitation or restriction by laws, ordinances, rules, and regulations
  2. Significant burdens or limitations on rights, etc.
  3. Significant cases where there are architectural structures crossing the boundaries of the concerned property, etc. and cases where there are issues with boundary confirmation, etc., and related arrangements, etc.
  4. Significant agreements, arrangements, etc. made with co‐owners or sectional owners
• Unless otherwise stated, percentage figures in the abovementioned sections are rounded to the first decimal place. As such, figures may not necessarily add up to 100%.
• Regarding monetary amounts in the abovementioned sections, planned acquisition prices and appraisal values are rounded down to the nearest million yen and other amounts are rounded down to the nearest thousand yen.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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"A‐73 S‐FORT Kego Tower"

Property name	S‐FORT Kego Tower
Location		2‐13‐17 Kego, Chuo‐ku, Fukuoka‐shi, Fukuoka
Type of specified asset	Real estate trust beneficiary interest
Planned acquisition price	4,320 million yen
Trustee		Mitsubishi UFJ Trust and Banking Corporation
Trust establishment date	August 3, 2021
Trust expiration date	August 31, 2031
Planned acquisition date	August 3, 2021
		Type of ownership	Ownership
		Site area	1,267.43 m2
Land	Building coverage	80%
ratio
		Floor area ratio	400% (Note)
		Zoning	Commercial district
		Type of ownership	Ownership
		Use	Apartment, store and garage
Building	Total floor area	10,396.97 m2
Completion date	November 21, 2008
		Structure and floors	Reinforced concrete structure, flat roof, 20 floors with 1 basement floor
		Number of leasable	130
		units
Collateral		None
Property management	Haseko Livenet, Inc.
company
Master lease company	Haseko Livenet, Inc.
Master lease type	Pass‐through lease
Appraisal value	4,380 million yen (May 1, 2021)
(date of value)
Real estate appraiser	Japan Valuers Co., Ltd.
Probable maximum loss	3.5%
(PML value)
Overview of leasing
	Total leasable area	7,415.36 m2
	Leased area	6,774.04 m2
	Number of tenants	1
	Monthly rental revenue	17,801 thousand yen
	Security and guarantee	17,562 thousand yen
	deposits
	Occupancy rate	January 2021		February 2021	March 2021	April 2021	May 2021
	91.2%		89.7%	93.1%	89.3%	91.4%
			The property is	about an 8‐minute	walk from Yakuin‐odori Station on the Fukuoka
			City Subway Nanakuma Line and about a 9‐minute walk from Akasaka Station on
			the Fukuoka City Subway Kuko Line, and has compact‐ and family‐type units, stores
			and offices. The property offers excellent transportation convenience to the central
			commercial areas and the main business districts as Akasaka Station offers access
			to Tenjin Station in about 3 minutes and Hakata Station in about 8 minutes by using
Characteristics of the property	the Subway Kuko Line.
			In addition, there are convenience stores, supermarkets, drug stores, financial
			institutions, hospitals and restaurants within walking distance, and also extensive
			public facilities, such as elementary schools, police boxes and nursery schools.
			With such characteristics, the property has favorable transportation convenience
			and living convenience, and is believed to be highly competitive in the leasing
			market shared with areas of similar supply and demand.
Special remarks	Not applicable

(Note) Having obtained permission under Fukuoka City's comprehensive design system based on Article 59‐2 of the Building Standards Act, relaxation measures for floor area ratio due to establishment of public open space (floor area ratio under comprehensive design: 664.15%) applies.

Disclaimer: This translation is for informational purposes only. Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. guarantees the accuracy or completeness of the translation. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

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