Starts Proceed Investment : Financial Results Briefing 33rd Fiscal Period

Starts Proceed Investment Corporation (securities code: 8979)

Financial Results Briefing 33rd Fiscal Period (six months ended April 30, 2022)

June 14, 2022

(Asset Management Company)

Starts Asset Management Co., Ltd.

Contents

33rd Fiscal Period Financial Results Summary

33rd Fiscal Period Financial Results Highlights	3
Impact of COVID-19	4
33rd Fiscal Period Financial Results	6
Management Forecast	7
Current Issues and Future Initiatives Aimed at Enhancing Unitholder	8
Value
Change in Investment Unit Price Since Sixth Public Offering	9
(Implemented in November 2016)
Asset Replacement Results and Future Asset Replacement Policy	10
Property Acquired in the 33rd Fiscal Period (Proceed Kinshicho 2)	11
Effect of Property Replacement	12
Stable Occupancy Rates and Background	13
Building a Portfolio That Responds to Various Fluctuation Risks	14
Status of Leasing Conditions of AUM	15
AUM Average Occupancy Period by Residential Unit Type	16
(Results of 28th-33rd Fiscal Period-End Residents)
Acquisition Price and Appraisal Value of AUM	17
Change in LTV	18
Financial Status	19
Status of Interest-Bearing Liabilities / After Refinancing	20
(May 24, 2022)
Initiatives on Sustainability	21
Status of Unitholders (As of April 30, 2022)	26

Future Management Policy

Major Initiatives in 33rd Fiscal Period and Management Policy from	28
34th Fiscal Period
Change in Distribution	29
Collaborative Structure of Starts Group	30
Properties in Process of Warehousing	31
Property Acquired Through Pipeline in the 34th Fiscal Period	33
Case Example of Efforts by Management Company	34
Development Projects of Starts Group	36
Case Example of Development by Starts Group	37
Reference Materials
Balance Sheet	44
Statements of Income/Cash Distributions	45
Status of Interest-Bearing Liabilities (As of April 30, 2022)	46
Portfolio Map (As of April 30, 2022)	50
Portfolio Policy and Period-end Status	51
Portfolio List (As of April 30, 2022)	52
Management Company Overview
Starts Asset Management Co., Ltd.	56
Disclaimer	57

STARTS PROCEED INVESTMENT CORPORATION

1

33rd Fiscal Period

Financial Results Summary

33rd Fiscal Period Financial Results Highlights

	Distribution forecast
		Finalized	Distribution Results for the
	at beginning of 33rd
		distribution	Previous Fiscal Period
	fiscal period		4,563 yen
				Comparison with 32nd
Distribution/	4,520 yen	+198 yen	4,718 yen	Fiscal Period
+155 yen
Unit	(+4.4%)
			(+3.4%)

• Management Summary

		 (C-30) Disposed Proceed Nakanoshimbashi (Nakano-ku, Tokyo, 29.5 years old,
External	Obtain unrealized gain through		acquired in November 2006)
	Disposition price: 760 million yen
asset replacement
Growth		Gain on sale:	69 million yen
Aim to improve portfolio quality
		(C-87) Proceed Kinshicho 2 (Sumida-ku, Tokyo, 14.5 years old)
			Acquisition price: 537 million yen
		 Period average occupancy rate: 96.5%
		 Maintained an occupancy rate of 95% or more for the thirty-first consecutive period
Internal	Continue stable asset		since the 3rd fiscal period
	The period average occupancy rate was up 0.7 percentage points year on year
Growth	management
	The rate of change in rent upon new replacements increased by 0.9%
		 The impact of requests for rent reduction and exemption etc. on rents amid the COVID-
			19 pandemic is limited and minimal
		 Total asset LTV		End of 33rd FP 50.6%→ After the refinancing this time (Note 1)
Financial					50.6% (± 0.0)
Maintain sound finances	 Appraised LTV		End of 33rd FP 44.6%→ After the refinancing this time (Note 2)
Status				44.6% (± 0.0)
		 Ratio of fixed-rate loans	End of 33rd FP 47.3%→ After the refinancing this time
					59.9% (+ 12.6 percentage points)

(Note 1) After-refinancing total asset LTV = Balance of interest-bearing liabilities on the refinancing date (May 24, 2022) ÷ (Total assets at the end of the 33rd fiscal period as recorded on the balance sheet + Amount of interest-bearing liabilities procured in the 34th fiscal period - Amount of interest-bearing liabilities repaid in the 34th fiscal period).

(Note 2) After-refinancing appraised LTV = Balance of interest-bearing liabilities on the refinancing date (May 24, 2022) ÷ (Total appraisal value at the end of the 33rd fiscal period + Amount of interest-bearing liabilities procured in the 34th fiscal period - Amount of interest-bearing liabilities repaid in the 34th fiscal period).

(Note 3) All amounts are rounded down, and the figures with decimal places calculated for percentage or averaged are rounded off.

STARTS PROCEED INVESTMENT CORPORATION

3

Impact of COVID-19

The annual average occupancy rate from January to December 2021 was 95.9%, up 0.1 percentage points year on year.

The occupancy rate remains at 96% or more since September 2022.

• Status of Occupancy

Occupancy rate (%)	January	February	March	April	May	June	July	August	September	October	November	December	Average	Year-on-year
change
	2020	96.0	96.0	97.1	95.9	95.8	95.8	95.9	95.6	95.6	95.2	95.2	95.0	95.8	0.1 percentage
All properties	2021	95.4	95.5	97.0	95.4	95.3	95.8	95.8	95.4	96.1	96.4	96.4	96.1	95.9	points
	2022	96.4	96.6	97.1	96.3	-	-	-	-	-	-	-	-	96.6	-

(%)		Occupancy Rate Trends
97.5
			2020				2021					2022
97.0

96.5

96.0

95.5

95.0

94.5

January

February

March

April

May

June

July

August

September October November December

• Delinquency Rate

Delinquency rate	January February March	April	May	June	July	August September October November December Average	Year-on-year
(%) (Note)	change

2020	0.59	0.80	0.66	0.70	0.86	0.51	0.67	0.46	0.49	0.52	0.62	0.48	0.61	0
All properties 2021	0.56	0.62	0.59	0.53	0.72	0.69	0.55	0.59	0.76	0.45	0.72	0.56	0.61
2022	0.62	0.47	0.58	-	-	-	-	-	-	-	-	-	0.56	-

(Note) Calculated by dividing the amount that remain delinquent even after a month among the delinquent rents to be paid by end tenants which occurred in the target month by the total amount of rent received

by SPI.
STARTS PROCEED INVESTMENT CORPORATION	4