This English translation is provided for information purposes only. If any discrepancy is identified between thistranslation and the Japanese original, the Japanese original shall prevail.
January 8, 2021
REIT Issuer:
Japan Hotel REIT Investment Corporation (TSE code: 8985)
Kaname Masuda, Executive Director
Asset Management Company:
Japan Hotel REIT Advisors Co., Ltd.
Hisashi Furukawa, President & CEO
Contact:
Makoto Hanamura
Executive Director
Head of Planning Group, Operations Division
TEL: +81-3-6422-0530
Notice Concerning Revision of Operating Forecast and Forecast of Dividend
for the Fiscal Year Ended December 2020 (21st Period)
Japan Hotel REIT Investment Corporation (hereinafter called “JHR”) informs you of the revision of the operating forecast
and forecast of dividend for the full fiscal year ended December 2020 (January 1, 2020 through December 31, 2020), which
was announced in the “Notice Concerning Revision of the Operating Forecast and Forecast of Dividend for the Fiscal YearEnding December 2020 (21st Period),” dated October 26, 2020 as follows.

1. Revision of the operating forecast for the full fiscal year ended December 2020
(January 1, 2020 through December 31, 2020)

Previous forecast(A)
Revised forecast(B)
Variance(C) = (B)－(A)Variance ratio(D) = (C) / (A)(Reference)
(*1)
(*2)
(*3)
(*4)

JPY1M

Dividend perunit (Excess ofearnings
exclusive)
JPY

Dividend perunit resulting
from excess ofearnings
JPY

JPY1M

JPY1M

JPY

JPY

JPY1M

JPY1M

JPY1M

JPY

JPY

%

%

%

%

Operatingrevenue

OperatingincomeOrdinary
incomeNet income

JPY1M

JPY1M

JPY1M

JPY1M

JPY1M

JPY1M
%

13,31813,818

499

3.8

2,283
3,094
810

35.5

442

1,306
863

195.3

571

1,435
863

151.3

199
390
191

96.0

－
－
－
%

－

Forecast of net income per unit for the full fiscal year: ¥321
(Calculated based on the average number of investment units during the period (4,462,347 units))
Dividend per unit is calculated based on the number of investment units issued as of today: 4,462,347 units.
Total dividend is planned to be an amount of net income plus the reversed amount of reserve for temporary difference
adjustment in the amount of ¥305 million.
For the assumptions of the operating forecast and dividend forecast above, please refer to “<Reference Information 1>
Assumptions of the operating forecast for the full fiscal year ended December 2020 (21st period)” below.
Amounts are rounded down to the nearest millions of yen and percentages are rounded off to the nearest first decimal
place. The same shall apply hereinafter.

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

1

2.

Rationale for the revision of the operating forecast for the full fiscal year ended December 2020 (January 1, 2020 throughDecember 31, 2020)
With regard to the performance of the hotels owned by JHR, the rent for the full fiscal year ended December 2020
was expected to significantly reduce due to the impact of the spread of the COVID-19 infections. However, thenumber of accommodation reservations increased due to the addition of Tokyo to the “Go to Travel” campaign in
October, and in some hotels, there were signs of recovery in leisure accommodation demand, including signs ofrecovery in school trip and group travel, etc. in some hotels.
Although the sales at the end of the year were affected by the nationwide suspension of “Go to Travel” campaign
from December 28, 2020, the variable rent of the HMJ Group Hotels (Note 1) for the second half of the fiscal year
ended December 2020 is expected to increase by ¥655 million from the previous forecast.
In addition, JHR received a request from the lessees of the Ishin Group Hotels (Note 2) to reduce rent, and as a result,
JHR has decided to reduce ¥320 million of the fixed rent. On the other hand, JHR will receive the income after
adjustment by accepting COVID-19 patients with no or mild symptoms at the b ikebukuro and the b hachioji asvariable rent. Therefore, the variable rent is expected to increase by ¥130 million.
Furthermore, an increase in fixed rent of ¥26 million for office and commercial tenants, an increase in variable rentof ¥79 million yen for other hotels with variable rent including the Accor Group Hotels (Note 3), and a decrease inutilities income, etc. of ¥72 million are expected. As the result, operating revenue is expected to increase by ¥499
million from the previous forecast,
Regarding operating expenses, ¥200 million was expected as a risk of rent reduction in the previous forecast. However,in this forecast, no risk of a rent reduction is expected for any lessee in the fiscal year ended December 2020. The
operating expenses are expected to decrease by ¥311 million in conjunction with the review of various expenses
related to properties and other operating expenses, etc. Moreover, finance costs and other costs are expected todecrease by ¥53 million. As a result, net income is expected to increase by ¥863 million from the precious forecast.
For the detailed information of the operating result for The 24 Hotels with Variable Rent, etc. (*4), please refer to“<Reference Information 3> Hotel operation indexes, sales and GOP (*5)” below.
(*1)

(*2)
(*3)
(*4)
(*5)

HMJ Group Hotels refers to 14 hotels: Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba
Oriental Hotel, Hotel Nikko Alivila, and Oriental Hotel Hiroshima, which JHR leases to HMJ, (hereinafter
called “the Five HMJ Hotels”), plus Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel(main facility of ACTIVE-INTER CITY HIROSHIMA), Oriental Hotel Fukuoka Hakata Station, Holiday
Inn Osaka Namba, Hilton Tokyo Narita Airport, International Garden Hotel Narita, Hotel Nikko Nara, Hotel
Oriental Express Osaka Shinsaibash, and Hilton Tokyo Odaiba, which JHR leases to subsidiaries of HMJ.
HMJ stands for Hotel Management Japan Co., Ltd. The same shall apply hereinafter.
Ishin Group Hotels refers to 4 hotels: the b suidobashi, the b ikebukuro, the b hachioji, and the b hakata.
The same shall apply hereinafter.
Accor Group Hotels refers to 6 hotels: ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo,
Mercure Sapporo, Mercure Okinawa Naha, Mercure Yokosuka. The same shall apply hereinafter.
The 24 Hotels with Variable Rent, etc. represents 24 hotels comprising the HMJ Group Hotels, the Ishin
Group Hotels and the Accor Group Hotels. The same shall apply hereinafter.
GOP (gross operating profit) and GOL (gross operating loss) are the remainder after expenses, such as
personnel costs and general and administrative expenses, etc. incurred in hotel operation, are deducted fromtotal sales. The same shall apply hereinafter.

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

2

3.

Highlights of the operating forecast and forecast of dividend
The following is the comparison and the major factors causing the variance between the operating forecast and forecastof dividend for the full fiscal year ended December 2020 (January 1, 2020 through December 31, 2020) (previous
forecast), which was announced in the “Notice Concerning Revision of the Operating Forecast and Forecast of
Dividend for the Fiscal Year Ending December 2020 (21st Period),” dated October 26, 2020, and the operating forecast
and forecast of dividend for the full fiscal year ended December 2020 announced this time.
(Unit: millions of yen)
FY2019(20th Period)

FY2020(21st Period)
Previous
Forecast

ActualForecast This
Time

(A)
Properties(B)

Comparison
with thePrevious Period

Annualized
Forecast ThisTime
(Note 1)(B)-(A)%

No. of Properties

43

42

42

42

-

Acquisition Price

374,508

370,031370,031370,031--

Operating Revenue

28,27813,31813,818

10,222499

3.8%

10,222497

5.0%Real Estate
Operating Revenue

28,278Composition

Fixed Rent
Other Income

9,977
Composition

10,475Composition

Dividend

(*1)
(*2)

(*3)

1. Decrease in fixed rent from the Ishin Group Hotels

56.3% 15,931

79.5%

7,931

72.9%

7,636

73.2%

7,487

(294)

1,170

10.0%

997

8.8%

924

8.7%

887

(72)

(7.3%) Mainly decrease in utilities income

1,848

865

1. Increase in variable rent, etc. from The 24 Hotels with
Variable Rent, etc. by JPY786 MM(Of these, increase in variable rent from the HMJ Group Hotels
82.5% by JPY655 MM and increase in variable rent from the Ishin
Group Hotels by JPY130 MM)
2. Increase in variable rent from other hotels with variable rentby JPY78 MM)

1

0.1%

15.1%

4.1%

Variable Rent

39.5% 11,176

Gain on Sale ofReal Estate
Properties, etc.

-

3,341

3,343

-

NOI (Note 2)

24,087

5,626

6,476

6,195

849

NOI Yield

6.4%

1.5%

1.8%

1.7%

0.2%

19,281

854

1,709

1,427

854

(Note 2)-Composition

10.5%

1,049

18.3%

1,914

18.1%

ProfitandLoss

NOI after Depreciation

Factors Causing Variance(3.7%) by JPY320 MM

2. Increase in fixed rent from other tenants by JPY26 MM

100.0%NOI Yield after
Depreciation

5.1%

0.2%

0.5%

0.4%

0.2%

Operating Income

17,148

2,283

3,094

(511)

810

35.5%

Ordinary Income

15,291442

1,306(2,299)863

195.3%Net Income

15,290571

1,435(2,300)863

151.3%

Reserve for Temporary
Difference Adjustments(Negative Goodwill)

1,176

319

305

324

(13)

(4.2%) 2019：

Total Dividends

16,466

888

1,740

-

852

Number of Units Issued(Unit)

4,462,347

4,462,347

4,462,347

4,462,347-

Dividend per Unit (JPY)

3,690

199

390

-

191

Amount to be reversed from reserve for temporary difference
adjustments (Note 3)

50-year amortization amount of negative goodwill: JPY262 MM
Correspondence to loss on retirement of noncurrent
assets:JPY246 MM
Correspondence to large-scale renovation works at Oriental
96.0%
Hotel Fukuoka Hakata Station: JPY357 MM
Correspondence to dilution: JPY310 MM- 2020：50-year negative goodwill amortization: JPY262 MM,
Loss on retirement of noncurrent assets: JPY5 MM,
96.0% Amortization of trademark rights: JPY37 MM(annualized effect: JPY56 MM)

For the assumptions of the annualized effect for the forecast this time, please refer to “<Reference Information 2> Assumptionsof the annualized effect (full-year effect) for the forecast for the fiscal year ended December 2020 (21st period)” below.
Each is calculated using the following formula. The same shall apply hereinafter.
NOI (Net Operating Income) = Real estate operating revenue – Real estate operating costs + Depreciation + Loss on retirementof noncurrent assets + Asset retirement obligations expenses
NOI yield = NOI ÷ acquisition price
NOI after depreciation = Real estate operating revenue – Real estate operating costs
NOI yield after depreciation = NOI after depreciation ÷ acquisition priceFor the details of the reversed amount of the reserve for temporary difference adjustment, please refer to “<Reference
Information 1> Assumptions of the operating forecast for the full year of the fiscal year ended December 2020 (21st period)”
below.

(Note)
The above is the forecast based on status of operation as of today, and actual dividend per unit may fluctuate. This forecast
does not guarantee the amount of dividend shown above.
* Website of Japan Hotel REIT Investment Corporation: https://www.jhrth.co.jp/en/

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

3<Reference Information 1>
Assumptions of the operating forecast for the full fiscal year ended December 2020 (21st period)
Item
Assumptions
Calculation ・ Full fiscal year ended December 2020 (21st Period): January 1, 2020 through December 31, 2020
Period(366 days)
Assets under ・ The 42 properties owned by JHR as of today after the sale of Sotetsu Fresa Inn Shimbashi
Management
Karasumoriguchi (hereinafter called the “Sale”) on July 1, 2020 are assumed.
・ Gain on sale of real estate properties of ¥3,158 million is recognized due to the Sale.
・ Gain on exchange on real estate, etc. of ¥184 million is recognized due to the exchange of a part of site ofHotel Ascent Fukuoka on October 29, 2020.
・ Operating revenue is calculated based on the conditions of the lease and other contracts effective as oftoday, taking into consideration the competitiveness of hotels, market environment, and other factors. If
there are lease contracts with facilities other than hotels, such as retail facilities and offices, operating
revenue calculated based on the said lease contracts is included.
・ For lessees who had been in discussion on temporary rent reductions, rent is recognized in accordance withthe contract with the relevant lessees. It is assumed that there is no risk of rent reduction due to delay ofrent payment or non-payment of rent by the lessees, including other lessees, in the fiscal year ended
December 2020.
・ Rents, etc. of the main hotels are calculated based on the following assumptions.
(1) The HMJ Group Hotels
JHR concluded a memorandum of understanding for the fixed-term lease contract with the HMJ Group
Hotels on August 25, 2020. The assumptions of the fixed and variable rent from January 1, 2020 throughDecember 31, 2020 are as follows.

Operating
Revenue

Total rent = Fixed rent + Variable rent
Fixed rent = ¥794 million (equivalent to monthly fixed rent for one month)
Variable rent = Total GOP of the hotels × Variable rent ratio (%) – Fixed rent
Variable rent is calculated separately for each hotel, and is set as 0 (zero) when GOL arises.
(Unit: millions of yen)
Total GOP of Variable
Variable
Fixed
Total
the hotel(s) rent ratio
rent
rent
rent
‐
(120)
268
268
Midterm
89.78%The Five HMJ Hotels
666
329
268
598
Full year
‐
(149)
45
45
Midterm
Okinawa Marriott
82.92%
Resort & Spa
(76)
‐
45
45
Full year
86
39
29
68
Midterm
Sheraton Grand79.03%
Hiroshima Hotel (*1)
231
153
29
182
Full year
170
130
35
165
Oriental Hotel
Midterm
96.98%
Fukuoka Hakata
394
347
35
382
Full year
Station
63
48
48‐ (*2)
Midterm
Holiday Inn
90.15%
Osaka Namba
26
‐
48
48
Full year
‐
(*2)
91
37
37
Midterm
Hilton Tokyo Narita
83.59%
Airport
142
82
37
119
Full year
49
19
28
47
Midterm
International Garden
95.35%
Hotel Narita
134
100
28
128
Full year
(175)
‐
35
35
Midterm
90.05%
Hotel Nikko Nara
‐
(116)
35
35
Full year

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

4

Item

Assumptions

Hotel Oriental
Express Osaka
Shinsaibashi
Hilton Tokyo Odaiba
Total
(*1)

(16)

Full year(34)

Midterm
Full year
Midterm
Full year

(369)
(125)
(370)
1,243

Variablerent

87.11%
92.10%
-

Fixed
rent

Total
rent

‐

9

9

‐

9

9

‐
‐
188
1,013

258
258
794
794

258
258
982
1,807

Stating the rent for Sheraton Grand Hiroshima Hotel, the major facility of ACTIVE-INTER CITY HIROSHIMA.
Fixed rent and variable rent for office and commercial tenants of ACTIVE-INTER CITY HIROSHIMA are as
follows.

Midterm
Full year(*2)

Midterm

Total GOP of Variable
the hotel(s) rent ratio

Fixed rent

Variable rent
3
6(Unit: millions of yen)
Total rent

239
479

243
485

Variable rent for the midterm was not recognized at previous forecast since variable rent did not arise based on theforecast of full-year GOP.

(2) Income from management contracts (*3) and variable rent from other hotels with variable rent, etc.

ibis Tokyo Shinjuku (*3)
ibis Styles Kyoto Station (*3)
ibis Styles Sapporo (*3)
Mercure Sapporo (*3)
Mercure Okinawa Naha (*3)
Mercure Yokosuka
the b suidobashi (*5)
the b ikebukuro (*5)
the b hachioji (*5)
the b hakata (*5)
Comfort Hotel Tokyo Higashi Nihombashi
Smile Hotel Nihombashi Mitsukoshimae
Chisun Hotel Kamata
Chisun Inn Kamata
Hotel Keihan Universal City
Sotetsu Fresa Inn Shimbashi Karasumoriguchi (*7)
Hilton Tokyo Bay
Hilton Nagoya
Total
(*3)
(*4)

Midterm
18
‐(*4)
23
40
‐(*4)
27
‐
1
44
2
1
12
‐
15

(Unit: millions of yen)
Full year
‐(*4)
‐(*4)
35
21
‐(*4)
73
‐
81
152
5
1
12
‐
21

Undisclosed (*6)

Undisclosed (*6)

Undisclosed (*6)
Undisclosed (*6)

Undisclosed (*6)
Undisclosed (*6)

66

454

66

894

For income from management contracts, it is assumed that each hotel’s GOP amount is recognized as income frommanagement contracts and the management contract fees to be paid by JHR are recognized as an operating expense.
GOL recognized as cost for management contracts are as follows.

Midterm
(20)
(13)
(33)

ibis Tokyo Shinjuku
ibis Styles Kyoto Station
Mercure Okinawa Naha
Total

(Unit: millions of yen)
Full year
(11)
(19)
(13)
(44)

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

5

Item

(*5)
(*6)
(*7)

Assumptions

Variable rent from the Ishin Group Hotels is the variable rent only from April 1, 2020 through December 31, 2020
due to a memorandum of understanding to amend the fixed-term lease contract concluded on October 30, 2020, andJHR receives a certain percentage which is linked to GOP as variable rent.
Undisclosed since tenants that concluded lease contracts did not agree to disclose rent revenue, etc.
Sotetsu Fresa Inn ShimbashiKarasumoriguchi was sold on July 1, 2020. The above shows the variable rent arising
before the date of the sale.

・ The following is the breakdown of variable rent and income from management contracts(Unit: millions of yen)
Midterm
Full year
The HMJ Group Hotels
188
1,013
Office and commercial tenants (*8)
3
6Other hotels with variable rent, etc. (18 hotels)
454
894
Total (32 hotels)
646
1,914
(*8)
(*9)

OperatingExpenses

・ With regard to the impact of spread of COVID-19 infections, based on the status of discussions with tenants
regarding temporary rent reductions, ¥200 million was assumed as the risk of rent reduction at the time ofprevious forecast, considering the possibility of the impact on operating revenue by rent reductions. However,for lessees who had been in discussions on rent reduction, any risk of rent reduction is not assumed at thistime as rents are recorded as agreed with the relevant lessees.
・ With respect to real estate leasing expenses, which constitute a major part of the operating expenses, expenses
other than depreciation are calculated based on historical data, and variable factors are reflected in thecalculation.
・ It is assumed that the ¥1,915 million will be recognized as expenses for fixed asset taxes, city planning taxes,
etc.
・ In general, fixed asset tax and city planning tax and other taxes and public dues on acquired assets are settledwith the previous owners at the time of acquisition, calculated on a pro rata basis of the holding period. For
JHR, such settlement amount is included in the acquisition price, and it will not be recognized as expenses
for the calculation period.
・ Capital expenditure is assumed to be ¥1,725 million (¥1,371 million for capital expenditure I, ¥254 million
for capital expenditure II, and ¥100 million for capital expenditure III).
(*)

OperatingExpenses

Variable rent for office and commercial tenants of ACTIVE-INTER CITY HIROSHIMA is shown.
For details of variable rent, please refer to page 51, “3. Reference Information; B. Assets under management; (C)Other major assets under management; C. Overview of the hotel business; a. Rent structures of hotels with variable
rent, management contract or revenue sharing” of the “Midterm Financial Report for the Fiscal Year Ending
December 31, 2020 (January 1, 2020 - June 30, 2020)” dated August 25, 2020 except for the Ishin Group Hotels.

JHR classifies capital expenditures into the following three categories. (I) Capital investment related to renewal ofequipment and facilities of buildings which is required to maintain proper values of properties, (II) capital
investment for fixtures, furniture and equipment that are not directly related to building structure or facilities but
necessary for operating hotels, and (III) strategic capital investment such as renovating guest rooms, etc. for
improving the competitiveness of the hotels.

・ Depreciation is calculated using the straight-line method including the planned capital expenditures above,and is assumed to be ¥4,758 million.
・ Repair expenses for buildings are recognized as expenses in the assumed amount necessary for each operating
period. Please note that the repair expenses of each operating period may differ materially from the forecast
amount for various reasons, such as; (1) Emergency repair expenses may be necessary due to damage tobuildings from unexpected causes; (2) The amount of repair expenses generally tends to increase in difference
over time; and (3) Repair expenses are not required on a regular basis.

・ ¥1,826 million is expected for borrowing-related costs, including interest expense, amortization for financing
Non-operating
fee and arrangement fee, and other non-operating expenses.
Expenses・ Expenses for issuance of new investment units and secondary offering are amortized over a period of three
years by the straight-line method.

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

6

Item

Assumptions・ ¥130 million is recorded as an extraordinary income due to the acknowledgement of a claim for refund of the
security deposit, which had not been recorded, as security deposit at Hotel Ascent Fukuoka. For details,
Extraordinary
please refer to “Notice Concerning Purchase and Sale of Asset (Exchange of a Part of Site of Hotel AscentincomeFukuoka)” dated October 26, 2020 and “Notice Concerning Revision of the Operating Forecast and Forecastof Dividend for the Fiscal Year Ending December 2020 (21st Period)” on the same date.
Interest・ The balance of interest-bearing debt (sum of loans and investment corporation bonds) as of the end ofbearing Debt
December 2020 was ¥168,754 million.
・ Dividend per unit for the fiscal year ended December 2020 (21st period) is calculated based on the following
assumptions.
Net income
Reversal of reserve for temporary difference adjustment(negative goodwill)
50-year amortization amount of negative goodwill (*1)
Loss on retirement of noncurrent assets (*2)
Amortization of trademark rights (*3)
Distributable amount
Total number of investment units issued
Dividend per unit

Dividend per
Unit

(*1)
(*2)
(*3)

¥1,435 million¥262 million¥5 million¥37 million¥1,740 million
4,462,347 units¥390¥262 million (hereinafter called “50-year amortization amount of negative goodwill”) is scheduled to be paid out
as dividends, with the remaining balance of the reserve for temporary difference adjustment set as the maximum
amount, for every fiscal year.
The amount recognized as a loss on retirement of noncurrent assets will be appropriated by reserve for temporary
difference adjustment (negative goodwill) and is expected to have no impact on dividend per unit.
As announced in the press release “Notice Concerning Acquisition of New Assets (Trademark Rights of “Oriental
Hotel” brand, etc.)” dated May 15, 2020, JHR acquired the trademark rights on May 15, 2020. The trademark
rights are amortized over 10 years using the straight-line method. Amortization expected to be recognized during
the current fiscal year will be appropriated by reserve for temporary difference adjustment (negative goodwill)
and is expected to have no impact on dividend per unit.

・ Dividend per unit may fluctuate due to various causes, such as fluctuation of rent revenue resulting fromtransfer of assets under management, change of tenants, etc. at hotels, change in the business environment ofhotel business for hotel tenants, etc., unexpected repairs, and actual number of new investment units issued,
etc.
・ The remaining balance of the reserve for temporary difference adjustment (negative goodwill) after theappropriation of the reserve for temporary difference adjustment (negative goodwill) for dividends for the
fiscal year ended December 2020 (21st period) is expected to be ¥10,311 million.
Dividend per
Unit・ It is assumed that the excess of earnings (dividend per unit resulting from excess of earnings) will not be
Resulting
distributed.
from Excessof Earnings

Others・ It is assumed that revision in law, tax system, accounting standard, regulations of the listing, and regulationsof the Investment Trusts Association, Japan that may impact the forecast above will not be made.
・ It is assumed that unexpected major incident will not occur in the general economy, real estate market andhotel business environment, etc.
・ The numerical values are rounded down to the nearest millions of yen in the assumptions above.

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

7<Reference Information 2> Assumptions of the annualized effect (full-year effect) for the forecast for the fiscal year ended
December 2020 (21st period)(1) It is assumed that the existing properties (42 properties) excluding Sotetsu Fresa Inn Shimbashi-Karasumoriguchi(hereinafter the “Sold Property”) sold on July 1, 2020, will be held throughout the year and that there will be no gainon sale of real estate properties.
(2) The trademark rights are assumed to be held throughout the year and will be amortized over 10 years using the straightline method. Annualized amortization is assumed to be ¥56 million and is appropriated by reserve for temporary
difference adjustment (negative goodwill).
(3) The full-year effect of the exchange of a part of the site of Hotel Ascent Fukuoka is assumed. A gain of exchange ofreal estate, etc. and extraordinary income by the acknowledgement of a claim for refund of the security deposit, which
had not been recorded as security deposit are not assumed.
(4) Fixed asset tax, city planning tax, etc. for Hotel Oriental Express Osaka Shinsaibashi and Hilton Tokyo Odaiba
acquired in the fiscal year ended December 2019 (20th period) are assumed to be ¥337 million (for 12 months).
(5) There is no change in operating revenue and operating expenses of the existing properties (42 properties) excluding
the Sold Property from the above “<Reference Information 1> Assumptions of the operating forecast for the full fiscal
year ended December 2020 (21st period),” except for the assumptions above.
<Reference Information 3> Hotel operation indexes, sales and GOP
The numeral figures are based on figures obtained from hotel lessees, etc. Please note that these figures have not been auditedor gone through other procedures. No guarantee is made as to the accuracy or completeness of the figures and information.
ADR and RevPAR are rounded off to the nearest yen. Sales and GOP are rounded off to the nearest millions of yen.
Occupancy rate and comparison with the previous period are rounded off to one decimal place.
<1> The 24 Hotels with Variable Rent, etc.
Fiscal year ended
December 2019

Occupancy
Rate

ADR
(*2)

RevPAR(*3)

Sales(JPY1M)GOP(JPY1M)First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year

Fiscal year ended December 2020

ActualComparison withprevious period

Previous
forecast (* 1)

Forecast thistime (* 1)85.1%(2.9pt)

34.0%

34.0%

(51.1pt)

0.0pt

86.9%

0.5pt

34.2%

40.5%

(46.3pt)

6.3pt

86.0%

(1.2pt)

34.1%

37.2%

(48.7pt)

3.2pt

15,691

0.4%

13,362

13,362(14.8%)

0.0%

17,263(3.4%)

13,264

13,352(22.7%)

0.7%

16,492(1.6%)

13,313

13,356(19.0%)

0.3%

13,348(3.0%)

4,536

4,536

(66.0%)

0.0%

14,993(2.9%)

4,541

5,408

(63.9%)

19.1%

14,178(2.9%)

4,539

4,975

(64.9%)

9.6%

28,259

(2.0%)

10,718

10,718(62.1%)

0.0%

31,453(2.0%)

11,593

13,232(57.9%)

14.1%

59,712(2.0%)

22,31023,950(59.9%)

7.4%

9,067

(5.6%)

(213)

(213)

(102.4%)0.0%

11,804(2.8%)

628

1,772(85.0%)

182.3%

20,871(4.0)%

414

1,559(92.5%)

276.2%

Comparison with Comparison withprevious period previous forecast

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

8

(*1)
(*2)
(*3)

The hotel operation indexes, sales and GOP for the first half of the previous forecast and forecast this time is the actual
number. The same shall apply hereinafter.
ADR: Represents average daily rate, which is calculated by dividing revenue of the rooms department for a given period(including service charges) by the total number of rooms sold during the period. The same shall apply hereinafter.
RevPAR represents revenue per available room, which is calculated by dividing total room revenue for a certain period(including service charges) by the total number of rooms available for sale during the period. The same shall apply
hereinafter.

<2>The HMJ Group Hotels

Fiscal year ended
December 2019
ActualOccupancy
Rate

ADR

RevPARSales(JPY1M)GOP(JPY1M)First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year
First half ofthe year
Second halfof the year
Full year

(*1)
(*2)
(*3)

Comparison withprevious period

Fiscal year ended December 2020
Previous
forecast

Forecast thistimeComparison withprevious period

Comparison withprevious forecast

85.3%(3.0pt)

33.1%

33.1%

(52.2pt)

0pt

87.9%

1.4pt

31.2%

38.2%

(49.7pt)

6.9pt

86.6%

(0.8pt)

32.2%

35.7%

(51.0pt)

3.5pt

17,587(0.7%)

15,222

15,222(13.4%)

0.0%

19,635(4.5%)

16,623

16,815(14.4%)

1.2%

18,635(2.7%)

15,906

16,079(13.7%)

1.1%

15,005(4.1%)

5,045

5,045

(66.4%)

0.0%

17,263

(3.0%)

5,193

6,420

(62.8%)

23.6%

16,143

(3.5%)

5,120

5,736

(64.5%)

12.0%

24,050(2.4%)

9,167

9,167

(61.9%)

0.0%

27,137(2.0%)

10,191

11,847(56.3%)

16.2%

51,187(2.2%)

19,35821,014(58.9%)

8.6%

7,230

(6.1%)

(370)

(370)

(105.1%)

0.0%

9,886

(2.0%)

575

1,614(83.7%)

180.8%

17,116(3.8%)

204

1,243(92.7%)

508.5%

Large-scale renovation work with the suspension of hotel operation was implemented at Oriental Hotel Fukuoka Hakata
Station from October 1, 2018 to April 8, 2019. Actual for the fiscal year ended December 2019 includes the impact of thesuspension due to the renovation work.
As Hotel Oriental Express Osaka Shinsaibashi opened on April 2, 2018, tallies for 2018 do not include figures from before
the opening.
Hilton Tokyo Odaiba was acquired on April 8, 2019. The actual and comparison with the previous period for the fiscal year
ended December 2019 are calculated as the total for the full year including figures prior to the acquisition date.

Note: This document is intended to serve as a press release to make available the information on the revision of operating forecast and forecast of dividend
for the fiscal year ended December 2020 (21st period). This document should not be construed as an offer to sell or solicitation of an offer to purchaseany investment units or other investment of JHR. Prospective investors are advised to make any investment decisions at their own risk and responsibility.

9