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.

September 15, 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 andForecast of Dividend for the Fiscal Year Ending December 2021 (22nd Period)
Japan Hotel REIT Investment Corporation (hereinafter called “JHR”) informs you of the revision of the operating forecast
and forecast of dividend for the fiscal year ending December 2021 (January 1, 2021 through December 31, 2021), announced
in“Midterm Financial Report for the Fiscal Year Ending December 31, 2021 (January 1, 2021 – June 30, 2021)” dated
August 25, 2021 as well as press release on the same date named “Notice Concerning Difference Between Operating Forecast
and Actual Results for the Midterm of the Fiscal Year Ending December 2021 (22nd Period), and Operating Forecast andForecast of Dividend for the Fiscal Year Ending December 2021 (22nd Period)” as follows.

1. Revision of the operating forecast and forecast of dividend for the fiscal year ending December 2021
(January 1, 2021 through December 31, 2021)

Initial forecast(A)
Previous forecast
Forecast this time
(B)
Variance(C) = (B)－(A)Variance ratio(D) = (C) / (A)(Reference)
(*1)
(*2)
(*3)
(*4)
(*5)

Operatingrevenue

OperatingincomeOrdinary
incomeNet income

JPY1M
13,920
JPY1M
TBD
JPY1M
12,808
JPY1M(1,112)
%
(8.0)

JPY1M
2,715
JPY1M
TBD
JPY1M
1,917
JPY1M
(797)
%
(29.4)

JPY1M
879
JPY1M
TBD
JPY1M
208
JPY1M
(670)
%
(76.3)

JPY1M
877
JPY1M
TBD
JPY1M
207
JPY1M
(670)
%
(76.4)

Dividend per unit
(Excess ofearnings
exclusive)
JPY
270
JPY
TBD
JPY
120
JPY
(150)
%
(55.6)

Dividend per unit
resulting fromexcess of earnings
JPY
－
JPY
TBD
JPY
－
JPY
－
%
－

Net income per unit for the full fiscal year: ¥46(Calculated based on the average number of investment units during the period (4,466,061 units))
Initial forecast is the forecast announced in“Financial Report for the Fiscal Year Ended December 31, 2020 (January
1, 2020 – December 31, 2020)” dated February 25, 2021 and shown as a reference. The same shall apply hereinafter.
Dividend per unit is calculated based on the number of investment units issued as of today: 4,467,006 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 ¥329 million.
For the assumptions of the operating status and dividend forecast above, please refer to “<Reference Information 1>
Assumptions of the operating forecast for the full fiscal year ending December 2021 (22nd 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 ending December 2021 (22nd 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 revisions to the operating forecast
As the impact by the spread of the infection by COVID-19 including extension of declaration of the state of
emergency by government has been continued, we have decided to revise the operating forecast and forecast of
dividend for the full year ending December 2021 (22nd Period), which had not been decided yet.
For the full year ending December 2021 (22nd Period), although a recovery of hotel accommodation demand
going forward is expected due to the vaccination rollout and other factors, real estate operating revenue is
expected to decrease by ¥4,277 million from the initial forecast, mainly due to decreases in variable rent, income
from management contract and income from revenue sharing, affected by the expansion of the areas covered by
the state of emergency issued in July 2021, as well as the extension of the period of the state of emergency, etc..
On the other hand, as announced in the press release "Notice Concerning Sale of Asset (ibis Tokyo Shinjuku)"
dated today, JHR concluded a purchase and sales contract for the sale of ibis Tokyo Shinjuku with a plannedtransfer date of December 15, 2021 (hereinafter called the “Sale”), and expects to record a gain on sale ofproperties, etc. of ¥3,165 million in conjunction with the Sale. As a result, operating revenue is expected todecrease by ¥1,112 million from the initial forecast.
In addition, operating expense is expected to decrease by ¥314 million due to a reduction in various expenses
related to properties and a revision in the timing of the implementation of repair work, etc. Non-operating
income is expected to increase by ¥76 million mainly due to an income from non-life insurance, etc. andfinancial costs are expected to decrease by ¥50 million. As a result, net income is expected to decrease by ¥670
million from the initial forecast.
For details of the performance of hotels with variable rents, etc., please refer to "<Reference Information 2>
Hotel operation indexes, sales and GOP (Gross Operating Profit)" below.

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 ending December 2021 (22nd 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(1) The following is the comparison and the major factors causing the variance between the operating forecast andforecast of dividend for the full fiscal year ending December 2021 (January 1, 2021 through December 31, 2021)
announced in the “Financial Report for the Fiscal Year Ended December 31, 2020 (January 1, 2020 – December
31, 2020)” dated February 25, 2021 and the operating forecast and forecast of dividend this time.

Dividend

Profit and Loss Statement

Properties(Unit: millions of yen)

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

(*4)

FY12/2021(22nd Period)

FY12/2021(22nd Period)

InitialForecast

Forecast
This Time

(A)

(B)

Comparison with
the Initial Forecast(B)-(A)

Sale of
Property(*1)

Major Factors Causing the Variance (*2)%

No. of Properties

42

41

(1)

-

-

Acquisition Price

370,031363,542(6,489)-(7,243)Operating Revenue

13,92012,808(1,112)(8.0%)

3,161(4,273)

Real Estate Operating
Revenue

13,920

9,643(4,277)(30.7%)(3)(4,273)

66

1.0%

(3)

69

(25)

(2.7%)-(25)

Fixed Rent

6,345

6,411

Composition

45.6%

66.5%

Other Income
Composition

932

907

6.7%

9.4%

Variable Rent

6,642

2,324

Composition

47.7%

24.1%

Gain on Sale ofProperties, etc.

(4,317)(65.0%)-

753 Acquisition of part of site of Oriental Hotel Universal City

Increase in fixed rent from tenants other than hotels① Decrease in variable rent from The HMJ Group Hotels(*3) by JPY3,954MM(4,317) ②Decrease in variable rent from The Accor Group Hotels(*4) by JPY645MM③Increase in variable rent from The Ishin Group Hotels (*5)
by JPY227MM④Increase in variable rent from other hotels by JPY54MM

-

3,165

3,165

-

3,165

-

NOI (*6)

9,455

5,433

(4,022)(42.5%)

0(4,022)NOI Yield

2.6%

1.5%

(1.1%)NOI after Depreciation
(*6)

4,628

648

(3,979)(86.0%)

0(3,979)NOI Yield after
Depreciation

1.3%

0.2%

(1.1%)

Operating Income

2,715

1,917

(797)

(29.4%)

Ordinary Profit

879

208

(670)

(76.3%)Net Income

877

207

(670)

(76.4%)

Reversed Amount of
the Reserve for
Temporary Difference
Adjustment(Negative Goodwill)

330

329

0

(0.3%)

1,204

536

(668)

Number ofUnits Issued (Unit)

4,462,347

4,467,006

4,659

Reversed Amount of the Reserve for Temporary Difference Adjustment (*7)
2021：
50-year negative goodwill amortization: JPY262MM,(55.5%)
Loss on retirement of noncurrent assets: JPY10MM,- Amortization of trademark rights: JPY56MM

Dividend per Unit
(JPY)

270

120

(150)

(55.6%)

Total Dividends

Stating the amount of impact by the sale of ibis Tokyo Shinjuku to be sold on December 15, 2021.
In the Major Factors Causing the Variance, stating the comparison with the initial forecast excluding the amount of impact by
the sale of ibis Tokyo Shinjuku to be sold on December 15, 2021.
The 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, 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. Although the lessee of Hotel Oriental Express Fukuoka Tenjin (former Hotel Ascent
Fukuoka) and Oriental Hotel Universal City (former Hotel Keihan Universal City) was changed to a subsidiary of HMJ on
June 18, 2021 and July 1, 2021, respectively, these hotels are not included in the HMJ Group Hotels. The same shall apply
hereinafter.
The 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.

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 ending December 2021 (22nd 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

(*5)
(*6)

(*7)

The Ishin Group Hotels refers to 4 hotels: the b suidobashi, the b ikebukuro, the b hachioji, and the b hakata. The same shallapply hereinafter.
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 ending December 2021 (22nd period)”
below.

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 ending December 2021 (22nd 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(2) The following is the comparison and the major factors causing the variance between the operating result anddividend for the full fiscal year ended December 2020 (January 1, 2020 through December 31, 2020) and theoperating forecast and forecast of dividend this time.

Dividend

Profit and Loss Statement

Properties(Unit: millions of yen)

(*1)
(*2)
(*3)
(*4)

(*5)

FY12/2020(21st Period)

FY12/2021(22nd Period)

ResultForecast
This Time

(A)

(B)

Comparison with
the Previous Result(B)-(A)

Sale of
Propertyin thePrevious
Period(*1)

Sale of
Property inThis Period(*2)

Major Factors Causing the Variance%

No. of Properties

42

41

(1)

-

-

-

Acquisition Price

370,031363,542(6,489)--(7,243)753 Acquisition of part of site of Oriental Hotel Universal City

Operating Revenue

13,83812,808(1,030)(7.4%)(3,390)

3,161

(801)

Real Estate Operating
Revenue

10,495

9,643

(851)

(8.1%)

(232)

(3)

(616)

Fixed Rent

7,640

6,411

(1,228) (16.1%)

(149)

(3)

Composition

72.8%

Other Income
Composition

892

907

8.5%

9.4%

Variable Rent

1,963

2,324

Composition

18.7%

24.1%

Gain on Sale ofProperties, etc.

3,343

3,165

①Decrease in fixed rent from The HMJ Group Hotels by JPY794MM②Decrease in fixed rent from The Ishin Group Hotels by JPY7MM(1,076) ③Decrease in fixed rent from Chisun Hotel Kamata by JPY93MM (*3)
④Decrease in fixed rent in accordance with rebranding by JPY172MM(*4)⑤Decrease in fixed rent from tenants other than hotels by JPY8MM

66.5%
15

1.7%

(16)

-

361

18.4%

(66)

-

(178)

(5.3%)(3,158)

3,165

(184)

(200)

0

(914)

(187)

0

(942)

NOI

6,547

5,433

(1,114) (17.0%)

NOI Yield

1.8%

1.5%

(0.3%)NOI after Depreciation

1,778

648

NOI Yield after
Depreciation

0.5%

0.2%

(0.3%)

Operating Income

3,176

1,917

(1,258) (39.6%)

Ordinary Income

1,398

208

(1,189) (85.1%)

Net Income

1,527

207

(1,319) (86.4%)

Reversed Amount of
the Reserve for
Temporary Difference
Adjustment(Negative Goodwill)

305

329

Total Dividends

1,829

536

Number ofUnits Issued (Unit)

4,462,347

4,467,006

Dividend per Unit
(JPY)

410

120

(1,129) (63.5%)

23

32①Increase in variable rent from The HMJ Group Hotels by JPY365MM
427 ②Increase in variable rent from The Accor Group Hotels by JPY14MM③Increase in variable rent from The Ishin Group Hotels by JPY45MM④Increase in variable rent from Chisun Hotel Kamata by JPY14MM (*3)
⑤Decrease in variable rent from other hotels by JPY12MM
Gain on sale of properties, etc. in accordance with exchange of part ofsite (*5)

Reversed Amount of the Reserve for Temporary Difference Adjustment
2020：
7.8% 50-year negative goodwill amortization: JPY262MM,
Loss on retirement of noncurrent assets: JPY5MM,
Amortization of trademark rights: JPY37MM(1,293) (70.7%) 2021：
50-year negative goodwill amortization: JPY262MM,
4,659- Loss on retirement of noncurrent assets: JPY10MM,
Amortization of trademark rights: JPY56MM(290) (70.7%)

Stating the amount of impact of sale by Sotetsu Fresa Inn Shimbashi-Karasumoriguchi, which was sold on July 1, 2020.
Stating the amount of impact of sale by ibis Tokyo Shinjuku to be sold on December 15, 2021.
Hotel Vista Kamata Tokyo was rebranded to Chisun Hotel Kamata with Solare Hotels and Resorts Co., Ltd. as the lessee on
January 1, 2021. No fixed rent is posted due to a new fixed-term building lease contract, which resulted in a rent structurewith only variable rent effective January 1, 2021.
Hotel Oriental Express Fukuoka Tenjin (formerly, Hotel Ascent Fukuoka) and Oriental Hotel Universal City (formerly, Hotel
Keihan Universal City) were rebranded with HMJ subsidiaries as the lessees on June 18, 2021 and July 1, 2021, respectively.
For the rent for the fiscal year ending December 2021 (22nd Period) after rebranding, please refer to “<Reference Information
1> Assumptions of the operating forecast for the full year of the fiscal year ending December 2021 (22nd period)” below.
Stating the gain on sale, etc. of real estate properties, etc. in accordance with exchange of part of site of Hotel Oriental Express
Fukuoka Tenjin (formerly, Hotel Ascent Fukuoka) conducted on October 29, 2020.

(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 ending December 2021 (22nd 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<Reference Information 1>
Assumptions of the operating forecast for the full fiscal year ending December 2021 (22nd period)
Item

Assumptions

Calculation ・ Full fiscal year ending December 2021 (22nd Period): January 1, 2021 through December 31, 2021
Period(365 days)
・ The 41 properties owned by JHR after the sale of ibis Tokyo Shinjuku on December 15, 2021, areassumed.
Assets under ・ It is assumed that there will be no change (acquisition of new property or disposition of the existingManagement
properties, etc.) in assets under management other than the sale above through the end of the fiscal year
ending December 2021 (22nd period). However, the actual results may fluctuate depending on thechanges in assets under management that may take place.
・ Gain on sale of real estate properties of ¥3,165 million is expected to be recognized due to the Sale.
・ Operating revenue is calculated based on the conditions of the lease and other effective contracts, taking
into consideration the competitiveness of hotels, market environment, and other factors. If there are lease
contracts with facilities other than hotels, such as commercial facilities and offices, operating revenue
calculated based on the said lease contracts is included. It may fluctuate significantly due to the impact of
COVID-19.
・ 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 building lease contract with the HMJ
Group Hotels on August 25, 2020. From January 1, 2021 through December 31, 2021, the rent is only
variable rent and is calculated by multiplying the hotel AGOP (*1) by the variable rent ratio for each hotel.
However, if AGOP is less than 0 (zero), the variable rent will be 0 (zero).
(Unit: millions of yen)
Hotel AGOP
Kobe Meriken Park
Oriental Hotel
Oriental Hotel tokyo bay
Operating
Revenue

Namba Oriental Hotel
Hotel Nikko Alivila
Oriental Hotel Hiroshima
Okinawa Marriott
Resort & Spa
Sheraton Grand Hiroshima
Hotel (*2)
Oriental Hotel Fukuoka Hakata
StationHoliday Inn Osaka Namba
Hilton Tokyo Narita Airport
International Garden Hotel
NaritaHotel Nikko Nara

Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year
Midterm
Full year

(85)
(12)
(115)
(264)
154
263
67
135
25
306
(118)
(270)
71
108
83
120
(14)
26
(2)
(18)
80
205
(101)
(192)

Variable rent ratio
86.0%
79.0%
91.0%
74.0%
89.0%
89.0%
93.0%
97.0%
98.0%
95.0%
95.0%
95.0%

Variable rent
－
－
－
－
140
240
49
100
22
273
－
－
66
101
81
117
－
25
－
－
76
194
－
－

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 ending December 2021 (22nd 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
Hotel AOP
Midterm
Full year
Midterm
Full year
Midterm
Full year

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

(*2)

Variable rent ratio

(12)
(21)
(238)
375
(205)
763

87.0%
97.0%
－

Variable rent
－
－
－
364
437
1,416

AGOP (adjusted GOP) is the amount calculated by subtracting certain fees and other items from GOP or GOL.
GOP (gross operating profit) and GOL (gross operating loss) are the remainder after expenses incurred in hotel
operation, such as personnel costs and general and administrative expenses, etc., are deducted from total sales. The
same shall apply hereinafter
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(Unit: millions of yen)
Total rent

Variable rent

Fixed rent

2

245

248

5

490

495

(2) Hotel Orinetal Express Fukuoka Tenjin (formerly, Hotel Ascent Fukuoka) and Oriental Hotel Universal
City (formerly, Hotel Keihan Univesal City)
Hotel Orinetal Express Fukuoka Tenjin and Oriental Hotel Universal City were rebranded with HMJ
subsidiaries as the lessees on June 18, 2021 and July 1, 2021, respectively. The assumptions for fixed andvariable rent stipulated in the fixed-term building contract after rebranding concluded on February 12, 2021
are as follows. The starting date of the variable rent is January 1, 2022, and the variable rent is not expectedin the fiscal year ending December 2021.
< Hotel Orinetal Express Fukuoka Tenjin>
Lease term: June 18, 2021 to December 31, 2031
Total rent = Fixed rent + Variable rent
Fixed rent = ¥150 million (annual)
Fixed rent is waived from June 18, 2021 through June 30, 2022. The fixed rent to be recognized for the
fiscal year ending December 2021 is expected to be ¥72 million, which is 6.4 months’ worth of the average
fixed rent of ¥11 million per month, calculated as the total fixed rent for the whole lease period (¥1,425
million) divided proportionally by the period of lease contract.
Variable rent = [Hotel AGOP – AGOP base amount of ¥165 million] × Variable rent ratio (97.0%)< Oriental Hotel Universal City>
Lease term: July 1, 2021 to December 31, 2031
Total rent = Fixed rent + Variable rent
Fixed rent = ¥350 million (annual)
Fixed rent is waived from July 1, 2021 through June 30, 2022. The fixed rent to be recognized for the
fiscal year ending December 2021 is expected to be ¥158 million, which is 6 months’ worth of the average
fixed rent of ¥26 million per month, calculated as the total fixed rent for the whole lease period (¥3,325
million) divided proportionally by the period of lease contract.
Variable rent = [Hotel AGOP – AGOP base amount of ¥370 million] × Variable rent ratio (95.0%)

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 ending December 2021 (22nd 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

Item

Assumptions(*3)

For Hotel Orinetal Express Fukuoka Tenjin and Oriental Hotel Universal City, the variable rents from the lessees
before rebranding were not recorded. The fixed rent before rebranding was recorded based on the conditions of thelease contracts, etc. before rebranding.

(3) Income from management contracts and variable rent from other hotels with variable rent, etc.
(Unit: millions of yen)ibis Tokyo Shinjuku (*4) (*5)
ibis Styles Kyoto Station (*4)
ibis Styles Sapporo (*4)
Mercure Sapporo (*4)
Mercure Okinawa Naha (*4)
Mercure Yokosuka
the b suidobashi (*6)
the b ikebukuro (*6)
the b hachioji (*6)
the b hakata (*6)
Comfort Hotel Tokyo Higashi Nihombashi
Smile Hotel Nihombashi Mitsukoshimae
Chisun Hotel Kamata (*7)
Chisun Inn Kamata
Hilton Tokyo Bay
Hilton Nagoya
Total
(*4)

Midterm

Full year3－ (*4)－ (*4)－ (*4)－ (*4)
109
－
117
－
－
－
－
－
0
Undisclosed (*8)
Undisclosed (*8)
401

－ (*4)－ (*4)－ (*4)－ (*4)－ (*4)
152
－
287
－
－
－
－
14
2
Undisclosed (*8)
Undisclosed (*8)
902Management contract structure is introduced. The management contract structure involves entrusting themanagement of owned hotel properties to the management company, and incorporating the results of the business
into JHR as real estate operating revenue. The amount of GOP for each hotel is recognized as management contract
revenue and as operating revenue, while the amount of GOL is recognized as management contract cost and as
operating expense.

GOL of each hotel, which is accounted for as management contract costs, is as follows.
(Unit: millions of yen)ibis Tokyo Shinjuku (*5)
ibis Styles Kyoto Station
ibis Styles Sapporo
Mercure Sapporo
Mercure Okinawa Naha
(*5)
(*6)
(*7)
(*8)

Midterm

Full year

－

(5)

(30)
(27)
(57)
(10)

(52)
(36)
(94)
(42)

ibis Tokyo Shinjuku is planned to be sold on December 15, 2021. The above figure states the management contract
costs which are expected to be recorded before the date of the sale.
The variable rent for the Ishin Group Hotels is the sum of fixed and variable rent from January 1, 2021 throughDecember 31, 2021 due to the revised fixed-term building lease contract concluded on October 30, 2020, and thevariable rent is recognized when GOP reaches the certain levels.
Chisun Hotel Kamata was rebranded from Hotel Vista Kamata Tokyo with Solare Hotels and Resorts Co., Ltd. as
the lessee on January 1, 2021.
Undisclosed since tenants that concluded lease contracts did not agree to disclose rent revenue, etc.

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 ending December 2021 (22nd 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

Item

Assumptions
・ The following is the breakdown of variable rent and income from management contracts(Unit: millions of yen)
The HMJ Group Hotels
Office and commercial tenants (*9)
Other hotels with variable rent, etc. (16 hotels)
Total (30 hotels)
(*9)
(*10)

OperatingExpenses

Midterm

Full year

437
2
401
841

1,416
5
902
2,324

Variable rent for office and commercial tenants of ACTIVE-INTER CITY HIROSHIMA is shown.
For details of variable rent, please refer to page 42, “3. Reference Information; (ii) Assets under management;(C) Other major assets under management; C. Overview of the hotel business; a. Rent structures of hotels withvariable rent, management contract or revenue sharing” of the “Midterm Financial Report for the Fiscal YearEnding December 31, 2021 (January 1, 2021 - June 30, 2021)” dated August 25, 2021.

・ With respect to real estate operating costs, 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 ¥1,947 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 ¥3,522 million (¥2,259 million for capital expenditure I, ¥1,263 million
for capital expenditure II). Capital expenditure III is not planned for the fiscal year ending December 2021.
(*) 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 ofthe hotels.

・ Depreciation is calculated using the straight-line method including the planned capital expenditures above
and is assumed to be ¥4,772 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.
・ ¥1,786 million is expected as non-operating expenses for borrowing-related costs and other expenses.
Non-operating
Borrowing-related costs include interest expense, amortization for financing fee and arrangement fee .
Expenses・ Expenses for issuance of new investment units and secondary offering are amortized over a period of three
years by the straight-line method.
・ The balance of interest-bearing debt (sum of loans and investment corporation bonds) as of today was¥168,754 million. In accordance with the Sale, the prepayment of ¥4,000 million is scheduled on December
15, 2021, and the balance of interest-bearing debt is assumed to be ¥164,754 million as of the end of
December 2021.
Interest・ From today onward, there are ¥16,782 million of loans due during the fiscal year ending December 2021
bearing Debt
(22nd Period), of which ¥15,847 million is assumed to be refinanced.
・ There are ¥1,500 million of investment corporation bonds that mature during the fiscal year ending December
2021 (22nd Period), however, it is assumed that the same amount of investment corporation bonds will be
issued.

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 ending December 2021 (22nd 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

Item

Assumptions
・ Dividend per unit for the fiscal year ending December 2021 (22nd 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)

¥207 million¥262 million¥10 million¥56 million¥536 million
4,467,006 units¥120¥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.
The trademark rights are amortized over 10 years using the straight-line method. Amortization is expected to berecognized 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 ending December 2021 (22nd period) is expected to be ¥9,982 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 ending December 2021 (22nd 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.

10<Reference Information 2> Hotel operation indexes, sales and GOP (Gross Operating Profit)
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 HMJ Group Hotels
Fiscal year ended
December 2020

Occupancy
Rate

ADR
(*1)

RevPAR(*2)

Sales(JPY1M)GOP(JPY1M)First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year
First halfof the year
Secondhalf of the year
Full year

(*1)
(*2)

Fiscal year ending December 2021

ResultComparison
with theprevious
periodInitialforecast

1H: Result
2H: Forecast
FY: Forecast

Comparison
with theprevious
periodComparison
with the initial
forecast

33.1%(52.2pt)

36.4%

27.7%

(5.4pt)(8.7pt)38.4%(49.5pt)

68.3%

40.0%

1.6pt

(28.3pt)

35.8%(50.8pt)

52.5%

33.9%

(1.9pt)(18.5pt)

15,222(13.4%)

14,906

13,048(14.3%)(12.5%)

16,814(14.4%)

19,59015,325(8.9%)(21.8%)

16,081(13.7%)

17,97914,402(10.4%)(19.9%)

5,045(66.4%)

5,428

3,618

(28.3%)(33.3%)

6,460(62.6%)

13,3796,137(5.0%)(54.1%)

5,757(64.3%)

9,436

4,888

(15.1%)(48.2%)

9,167(61.9%)

9,443

8,313

(9.3%)(12.0%)

11,978(55.9%)

20,624

10,868(9.3%)(47.3%)

21,146(58.7%)

30,067

19,182(9.3%)(36.2%)(370)(105.1%)

113

(136)

－%

－%

1,696

(82.8%)

6,280

1,070

(36.9%)(83.0%)

1,326(92.3%)

6,393

934

(29.5%)(85.4%)

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.

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 ending December 2021 (22nd 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.

11<2> The 24 Hotels with Variable Rent, etc. (*3)
Fiscal year ended
December 2020

Occupancy
Rate

ADR

RevPARSales(JPY1M)GOP(JPY1M)First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year
First halfof the year
Second halfof the year
Full year(*3)

Fiscal year ending December 2021

ResultComparison
with theprevious
periodInitialforecast

1H: Result
2H: Forecast
FY: Forecast

Comparison
with theprevious
periodComparison
with the initial
forecast

34.0%(51.1pt)

39.4%

30.6%

(3.3pt)(8.8pt)40.8%(46.1pt)

68.8%

40.7%

(0.0pt)(28.1pt)

37.4%(48.6pt)

54.2%

35.7%

(1.7pt)(18.5pt)

13,362(14.8%)

12,368

10,846(18.8%)(12.3%)

13,354(22.6%)

16,39812,733(4.7%)(22.3%)

13,357(19.0%)

14,947

11,931(10.7%)(20.2%)

4,536(66.0%)

4,868

3,320

(26.8%)(31.8%)

5,445(63.7%)

11,2895,188(4.7%)(54.0%)

4,993(64.8%)

8,105

4,261

(14.7%)(47.4%)

10,718(62.1%)

11,0109,478(11.6%)(13.9%)

13,378(57.5%)

23,455

12,173(9.0%)(48.1%)

24,096(59.6%)

34,466

21,651(10.1%)(37.2%)(213)(102.4%)

277

(65)

－%

－%

1,867

(84.2%)

7,046

1,111

(40.5%)(84.2%)

1,654(92.1%)

7,323

1,046

(36.7%)(85.7%)The 24 hotels with Variable Rent, etc. refers to the HMJ Group Hotels plus the Accor Group Hotels (ibis Tokyo Shinjuku,
ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure Okinawa Naha, Mercure Yokosuka) and the
Ishin Group Hotels (the b suidobashi, the b ikebukuro, the b hachioji and the b hakata), totaled 24 hotels.

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 ending December 2021 (22nd 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.

12