Samty Residential Investment : Notice Concerning Partial Amendments to the Asset Management Guidelines of the Asset Management Company

October 20, 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 Partial Amendments to the Asset Management Guidelines of the Asset Management Company

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 assets, today announced that it has resolved at a meeting of its Board of Directors held today to partially amend the Asset Management Guidelines, the internal rules of the Asset Management Company, following the approval of a proposal for partial amendments to the Articles of Incorporation (the "Proposal") at the 5th General Meeting of Unitholders of Samty Residential held on October 20, 2021 (the "General Meeting of Unitholders"), as proposed.

For details of the Proposal, please refer to the "Notice Concerning Partial Amendments to Articles of Incorporation and Appointment of Directors" released on September 15, 2021.

1. Reason for the amendment of the Asset Management Guidelines

Since its establishment in March 2015, Samty Residential has been building its portfolio through the acquisition of rental housing. For the purpose of clarifying Samty Residential's investment policy and the use of investment target assets, Samty Residential has decided to exclude hotels, which Samty Residential has never acquired, from the use of its investment target assets. However, with regard to (1) hotels, Japanese inns and other accommodation facilities with an acquisition price of less than 1 billion yen and (2) minpaku (private lodging services) facilities, Samty Residential has determined that they are considered to be real estate in the peripheral domain of rental housing that are similar and related to rental housing in terms of size, structure, etc., and that it will be possible to manage risks by converting them to rental housing and other facilities in the future, depending on the timing. Accordingly, a proposal for partial amendment to the Articles of Incorporation to be included in Samty Residential's investment target was submitted to and approved by the General Meeting of Unitholders.

In accordance with this, the Asset Management Guidelines will be amended to the same effect as the partial amendment to the Articles of Incorporation above in order to clarify the investment policy of Samty Residential and the use of investment target assets, and the Asset Management Guidelines will be amended to clearly state that Daiwa Securities Group Inc. is a sub-sponsor of Samty Residential.

2. Date of amendment October 20, 2021

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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3. Details of amendment to the Asset Management Guidelines

Details of the amendment are as follows. Amended parts are underlined.

Current

After the amendment

Samty Asset Management Co., Ltd. (below, the "Asset

Samty Asset Management Co., Ltd. (below, the "Asset

Management Company"), the asset management

Management Company"), the asset management

company to which Samty Residential Investment

company to which Samty Residential Investment

Corporation (below, "Samty Residential") entrusts the

Corporation (below, "Samty Residential") entrusts the

management of its assets, shall establish the Asset

management of its assets, shall establish the Asset

Management Guidelines as internal rules of the Asset

Management Guidelines as internal rules of the Asset

Management Company, based on the basic policy set

Management Company, based on the basic policy set

forth in the Articles of Incorporation of Samty

forth in the Articles of Incorporation of Samty

Residential.

Residential.

(1) Investment policy

(1) Investment policy

a. Basic policy

a. Basic policy

Samty Residential aims to maximize unitholder

Samty Residential aims to maximize unitholder

value by making diversified investments in cities

value by making diversified investments in cities

throughout Japan, with the main investment target

throughout Japan, with the main investment target

being rental housing (Note 1) (below,

being rental housing (Note 1) (below,

"residences"), to achieve steady growth of

"residences"), to achieve steady growth of

investment assets over the medium to long term

investment assets over the medium to long term

and to secure stable earnings. In addition, Samty

and to secure stable earnings. Samty Residential

Residential has positioned hotelsand operating

has positioned accommodation facilities ((a)

facilities such as healthcare facilities (below,

hotels, inns and other lodging facilities with an

"operating facilities"), which provide living space

acquisition price of less than 1 billion yen per

similar to residences and are expected to secure

acquisition target (accommodations for the

stable cash flow by being leased in bulk to

management of lodging facilities under the Hotel

management companies, as investment targets by

Business Act, including each accommodation

including them in accommodation assets along

facility other than hotels and inns, and serviced

with residences (refers to real estate in the

apartments, etc., but excluding minpaku (private

peripheral domain of rental housing that are

lodging services) facilities (refers to residences or

similar, such as residences, hotelsand healthcare

accommodation

facilities

that

provide

facilities (Note 2); the same applies below).

accommodation services after furnishings, etc.,

However, the initial investment policy is to invest

have been installed and certain other

only in residences, and to carefully consider

environmental improvements have been made;

investment

in

operating

facilities

by

the same shall apply hereinafter.) and their

comprehensively taking into account the asset size

incidental facilities, and (b) minpaku (private

and portfolio diversification of Samty Residential.

lodging services) facilities and their incidental

facilities (below, collectively referred to as

"accommodation facilities")) and operating

facilities such as healthcare facilities (below,

operating facilities"), which provide living space

similar to residences and are expected to secure

stable cash flow by leasebacks to the operating

company, as investment targets by including them

in accommodation assets along with residences

(refers to real estate in the peripheral domain of

rental housing that are similar such as residences,

accommodation facilities, and healthcare facilities

(Note 2); the same applies below) (Note 3).

However, initially, Samty Residential will focus only

on residential properties and then acquire

operating facilities (hotel and healthcare

properties) only after a prudent and holistic review

of its portfolio size and diversification.

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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	Current			After the amendment
				(Note 1)	Rental housing	includes apartments	for
					students, which are assumed to be
					outsourced	to	specialized	management
					companies, and company housing or
					dormitories, which are assumed to be
					leased in units of several rooms by
					corporations.
				(Note 2)	Healthcare	facilities include,	but are	not
					limited to, buildings whose primary use is
					housing for the elderly with services as
					defined in the Act on Securement of Stable
					Supply of Elderly Persons, fee-based nursing
					homes and group homes for the elderly with
					dementia as defined in the Act on Social
					Welfare for the Elderly.
				(Note 3) In cases where multiple acquired properties
					can be used in an integrated manner from a
					socioeconomic	perspective,	when	the
					majority of the real estate that constitutes
					the main body of the acquired properties or
					the entire real estate that supports the main
					body of the acquired properties is used for
					the purposes specified in (1) a. above
					(provided, however, that in cases where the
					use is accommodation, the acquisition price
					of the entire acquired property is less than 1
					billion yen), Samty Residential. may acquire
					all or part of the acquired property.
(a) Type of property to be acquired		(a) Type of property to be acquired
Samty Residential shall invest in high-quality	Samty Residential shall invest in high-quality
accommodation assets that meet the conditions and	accommodation assets that meet the conditions and
characteristics of each region and specified assets	characteristics of each region and specified assets
backed by accommodation assets (below,	backed by accommodation assets (below,
collectively referred to as "accommodation assets,	collectively referred to as "accommodation assets,
etc.") in a wide range of regional cities throughout	etc.") in a wide range of regional cities throughout
Japan (meaning cities other than the Tokyo	Japan (meaning cities other than the Tokyo
metropolitan area (Tokyo, Kanagawa, Saitama and	metropolitan area (Tokyo, Kanagawa, Saitama and
Chiba prefectures); below the same shall apply),	Chiba prefectures); below the same shall apply),
without being biased toward specific cities in the	without being biased toward specific cities in the
Tokyo metropolitan area, and through these leases,	Tokyo metropolitan area, and through these leases,
aim to provide residents with safe, secure,	aim to provide residents with safe, secure,
comfortable, and relaxing residences.		comfortable, and relaxing residences.
(Note 1) Rental housing	includes apartments for	(Deleted)
students, which are assumed to be
outsourced	to	specialized	management
companies, and company housing or
dormitories, which are assumed to be leased
in units of several rooms by corporations.
(Note 2) Healthcare	facilities include,	but are not
limited to, buildings whose primary use is
housing for the elderly with services as
defined in the Act on Securement of Stable
Supply of Elderly Persons, fee-based nursing
homes and group homes for the elderly with

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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Current				After the amendment
dementia as defined in the Act on Social
Welfare for the Elderly.
(b) Utilization of sponsor support				(b) Utilization of sponsor support
In order take advantage of the strengths of the	(1) Utilization of the Samty Group
Samty Group (Note), which is an integrated real	Samty Co., Ltd. (below, the "main sponsor"), in
estate company that can complete the entire	order take advantage of the strengths of the Samty
process from purchasing land, planning and	Group (Note), which is an integrated real estate
developing condominiums,	soliciting	leases,	company that can complete the entire process from
managing properties, selling properties and holding	purchasing land, planning and developing
properties as a group, mainly in the Kansai region,	condominiums,	soliciting	leases,	managing
and has developed	the compact	condominium	properties, selling properties and holding properties
"S-RESIDENCE"for lease to funds in addition to its	as a group, mainly in the Kansai region, and has
track record of developing condominiums for sale,	developed	the	compact	condominium
and has an extensive track record of developing	"S-RESIDENCE"for lease to funds in addition to its
residential facilities, asset value will be maintained	track record of developing condominiums for sale,
and improved by effectively utilizing the business	and has an extensive track record of developing
relationship and support from the Samty Group,	residential facilities, asset value will be maintained
while alsotaking care to avoid conflicts of interest.	and improved by effectively utilizing the business
(Note)The Samty Group refers to the sponsor, the	relationship and support from the Samty Group,
sponsor's	consolidated	subsidiaries	while taking care to avoid conflicts of interest.
(collectively	refers	to	consolidated	(Note) The Samty Group refers to the mainsponsor,
subsidiaries as defined in Article 2, Item 4 of	the mainsponsor's consolidated subsidiaries
the Regulation on Terminology, Forms, and	(collectively	refers	to	consolidated
Preparation Methods of Financial Statements	subsidiaries as defined in Article 2, Item 4 of
(Ministry of Finance Order No. 28 of 1976,	the Regulation on Terminology, Forms, and
including subsequent revisions)), and special	Preparation	Methods	of	Financial
purpose companies other than the sponsor's	Statements (Ministry of Finance Order No.
consolidated in which the sponsor has	28 of 1976, including subsequent revisions)),
invested itself, together, excluding the Asset	and special purpose companies other than
Management	Company	and	Samty	the mainsponsor's consolidated subsidiaries
Residential.					in which the mainsponsor has invested
					itself, together, excluding the Asset
					Management	Company	and	Samty
					Residential.
(2) (Newly established)				(2) Utilization of Daiwa Securities Group Inc.
					Through the use of the network and know-how in
					the financial and capital markets of the Daiwa
					Securities Group Inc. (below, the "sub-sponsor"),
					support for the formation of bridge funds, etc., and
					cooperation in securing human resources at the
					Asset Management Company, Samty Residential
					aims to achieve its sustainable and stable growth
					and increase unitholder value.
(c) Regional development and acquisition area		(c) Regional development and acquisition area
In response to the major issues facing Japan, such as	In response to the major issues facing Japan, such as
a rapidly declining population and a super-aging	a rapidly declining population and a super-aging
society, the objective is to provide residences that	society, the objective is to provide residences that
take advantage of the characteristics of each region	take advantage of the characteristics of each region
and area, thereby helping tocreate an autonomous	and area, thereby helping tocreate an autonomous
and sustainable society. In particular, Samty	and sustainable society. In particular, Samty
Residential will carefully select properties in major	Residential will carefully select properties in major
regional cities, including the Kansai region (as	regional cities, including the Kansai region (as
defined in "c.(b) Investment Area" below), based on	defined in "c.(b) Investment Area" below), based on

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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Current

After the amendment

the Samty Group's track record in property

the Samty Group's track record in property

development and acquisition, which is based in the

development and acquisition, which is based in the

Kansai region, and actively invest in them to

Kansai region, and actively invest in them to

differentiate

itself

from

other

existing

differentiate

itself

from

other

existing

residential-centered investment corporations.

residential-centered investment corporations.

b. Growth strategy

b. Growth strategy

(a)

External growth strategy

(a)

External growth strategy

(1) Utilization of the resources and know-how, etc. of

(1) Utilization of the resources and know-how, etc. of

the Samty Group by concluding a sponsor support

the Samty Group by concluding a sponsor support

agreement

that mainly covers the following with

agreement that mainly covers the following with the

Samty Co., Ltd. (below, the "sponsor")

main sponsor

(Omitted below)

(As current)

(2) (Newly established)

(2) Utilization of the network and know-how, etc. in

the financial and capital markets of Daiwa Securities

Group Inc. by entering into a sub-sponsor support

agreement with the sub-sponsor, which mainly

includes the following

 Provision of property and other information

 Support for the formation of bridge funds, etc.

 Cooperation in securing human resources for

the Asset Management Company

(2)Expansion of property acquisitions through the

(3)Expansion of property acquisitions through the

Asset Management Company's own pipeline

Asset Management Company's own pipeline

(b)

Internal growth strategy

(b)

Internal growth strategy

(1) Manage know-how of property management

(1) Manage know-how of property management

companies

companies

(Omitted)

(As current)

(2) Support for property renewal/redevelopment

(2) Support for property renewal/redevelopment

(Omitted)

(As current)

(3) Promotion of brand strategy

(3) Promotion of brand strategy

Standardization of property brands

Standardization of residenceproperty brands

S-RESIDENCE:

A

rental

apartment

brand

S-RESIDENCE:

A

rental

apartment

brand

developed by the sponsor

developed

by

the

main

(Omitted below)

sponsor

(As current below)

c. Portfolio management criteria

c. Portfolio management criteria

(a)

Investment target

(a)

Investment target

(1) Samty Residential

shall

invest mainly in

(1) Samty Residential

shall invest

mainly in

residences, which are investment targets with

residences, which are investment targets with

relatively low risk due to small fluctuations in

relatively low risk due to small fluctuations in

rent compared to real estate for other uses such

rent compared to real estate for other uses such

as offices and commercial facilities. The

as offices and commercial facilities. The

investment ratio of residences in the entire

investment ratio of residences in the entire

portfolio shall be 80% or more on an acquisition

portfolio shall be 80% or more on an acquisition

price basis, and operating facilities may be

price basis, and operating facilities may be

incorporated within a range of 20% or less.

incorporated within a range of 20% or less.

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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