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
Director of the Board, Managing Director,
Head of Planning Division
TEL: +81-3-6422-0530

Notice Concerning Sale of Asset(ibis Tokyo Shinjuku)
This is to inform you that Japan Hotel REIT Advisors Co., Ltd., the asset management company of Japan Hotel REIT
Investment Corporation (hereinafter called “JHR”), resolved today to sell the asset under management (hereinaftercalled the “Sale”) as below on behalf of JHR.
1.

Summary of Sale
Name of assets to be soldibis Tokyo Shinjuku

Type of assets to be soldReal estate beneficial interest in trust

Acquisition dateJune 16, 2006

Asset type

Hotel

Hotel type (*1)

Limited-service hotel

Grade (*2)

Mid-price

Sale price (*3)

JPY11,300M

Book value (*4)

JPY7,805M

Gain on sale (forecast) (*5)

JPY3,165M

Appraisal value (*6)

JPY9,900M

Contract date

September 15, 2021

Closing date

December 15, 2021

Buyer

Undisclosed (*7)(*1) JHR has categorized its hotels into limited-service hotels, full-service hotels, and resort hotels in accordance with theirtypes of operations.
(*2) Based on ADR, etc., JHR has classified its hotels into four categories as luxury, upper middle, mid-price, andeconomy.
(*3) Excludes settlement amount of fixed asset tax and city planning tax, etc., as well as selling expenses, consumption tax
and local consumption tax.
(*4) The book value (forecast) as of December 15, 2021 is rounded off to the nearest JPY1M.
(*5) The gain on sale (forecast) of the properties are calculated based on the sale price, book value (forecast) as ofDecember 15, 2021, and expenses related to the sale (forecast). Also, amounts are rounded down to the nearest
JPY1M.
(*6) Appraisal value as of June 30, 2021 is stated.
(*7) Undisclosed as the consent of the buyer has not been obtained.

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2.

Rationale for Sale
Due to the spread of the infection of COVID-19 and its lengthening, the business environment in the hotel market
remains challenging.
Under such circumstances where the outlook for revenue is uncertain, JHR judged that it would be appropriate torecognize a part of the unrealized gains on its owned assets as gain on sale of properties and use a portion of thetransfer proceeds to repay existing loans for proper control of LTV (the ratio of interest-bearing debt to total
assets) and to improve ready liquidity. Therefore, JHR decided to sell the asset after comprehensively considering
trends in the real estate market and the characteristics of the asset to be transferred.

3.

Use of Proceeds from Sale and allocation of profit
We plan to improve ready liquidity by allocating a portion of the transfer proceeds to repay existing loans andusing the remaining amount as cash on hand at JHR.
In addition, we expect the gain on sale of properties in the amount of JPY3,165M by the Sale, and plan toallocate part of the amount or the entire amount to dividends.

4.

Summary of the asset to be soldName of the asset to be soldAsset category
Address (Lot Number)
Intended use
Land
Area
Building
Land
Ownership
Building
Building structure
Completion
Acquisition priceAppraisal value
TrusteeMaturity date of trust
No. of tenants
Rentable area
Rented area

Rent

ibis Tokyo Shinjuku
Real estate beneficial interest in trust
7-1-3, Nishi-Shinjuku, Shinjuku-ku, Tokyo
Hotel, Stores
937.67 m2
7,398.19 m2
Ownership
Ownership
Steel-framed reinforced concrete, reinforced concrete, steel constructionbuilding/eleven stories above ground and 1 story below ground
September 1980
JPY7,243M
JPY9,900M
Date of appraisal: June 30, 2021
Appraiser: Japan Real Estate Institute
Sumitomo Mitsui Trust Bank, Limited
September 24, 2024
46,801.84 m2
6,801.84 m2
Fixed rent
JPY8,318 thousands/month (*1)(store section)
Real estate operating
revenue fromAmount equivalent to hotel GOP (*2)
management contract(hotel section)
N/A

Deposit and guarantee money
Occupancy rate
100%
(based on rented area)
Collateral
N/A(*1) Stating based on the fixed-term building lease agreements, etc. which are in effect as of today, withthe lessees of the stores, etc.
(*2) GOP refers to gross operating profit. JHR concluded a management contract with the entrusted
management company, and recognizes the amount equivalent to GOP as “real estate management
revenue from management contract”. This is equivalent to rent, which is income from real estate
under lease contract. If the amount equivalent to GOP becomes negative, such negative amount2

will be paid by JHR to the entrusted management company.
5.

Summary of Buyer
Information is undisclosed since JHR has not obtained consent from the buyer. There are no capital, human orbusiness relationships to be specifically noted between JHR or the Asset Management Company, and the buyer.
The buyer also does not fall under the category of related parties of JHR and the Asset Management Company.
The buyer also does not fall under the category of interested parties, etc. as stipulated in the Act on Investment
Trusts and Investment Corporations, nor sponsor-related parties stipulated by the Asset Management Company.

6.

Summary of Broker
The broker does not fall under the category of interested parties, etc. as stipulated in the Act onInvestment Trusts and Investment Corporations, nor sponsor-related parties stipulated by the AssetManagement Company.

7.

Payment Method
A lump-sum payment at the timing of transfer

8.

Schedule of Sale
Date of resolution for the sale

9.

September 15, 2021

Date of conclusion of purchase and sale agreement

September 15, 2021

Settlement and transfer

December 15, 2021 (schedule)

Future prospects
For the operating forecast after the Sale, please refer to “Notice Concerning Revision of Operating Forecast andForecast of Dividend for the Fiscal Year Ending December 2021 (22nd Period)” dated today.

310. Appraisal Report Summary
Property name

ibis Tokyo ShinjukuAppraisal value

JPY9,900,000 thousands

Name of appraiser

Japan Real Estate Institute.

Date of appraisal

June 30, 2021

ItemDetail

Indicated value by income approach
Value by direct capitalization method

Operating income

Summary, etc.

JPY9,900,000 thousands
JPY10,100,000 thousands
JPY607,716 thousands

Potential gross income

JPY607,716 thousands

Potential rent income

JPY544,716 thousands

Utilities income

JPY63,000 thousands

Parking lots income

JPY0

Other income

JPY0

Vacancy loss, etc.
Operating expenses
Maintenance andmanagement expenses
Utilities cost

JPY0
JPY150,468 thousands
JPY39,900 thousands
JPY63,000 thousands

Repair cost

JPY9,835 thousands

Property management fee

JPY2,040 thousands

Tenant leasing cost, etc.

JPY0Tax and public dues
Casualty insurance
premium
Other expenses
Net operating income
Gain on management ofdeposits
Capital expenditures

JPY35,086 thousands

FFE reserve
Net cash flow
Cap rate
Value by DCF method

JPY607 thousands
JPY0
JPY457,248 thousands
JPY665 thousands
JPY22,949 thousands
JPY19,550 thousands
JPY415,414 thousands
4.1%
JPY9,700,000 thousands

Discount rate

3.8%

Terminal cap rate4.2%

Indicated value by cost approach
Land ratio
Building ratio
Other matters noted in appraisal
by appraiser

JPY10,400,000 thousands
94.9%
5.1%
The appraiser judged that the indicated value by income approach, which faithfully
replicates the price formation process from the profit aspect, was more persuasive, andadopted the indicated value by income approach. The indicated value by cost approach
was limited to reference only, and the indicated value by income approach was used.

* Website of Japan Hotel REIT Investment Corporation: https://www.jhrth.co.jp/en/

4（Reference) Portfolio list after the sale of the asset
PropertyNo.

HotelType

GradeNo. ofguestrooms(*1)

Completion

Acquisition
Price
(*3)
(JPY1M)

InvestmentRatio(*4)

1

Kobe Meriken Park
Oriental Hotel

Fullservice

Uppermiddle

323

July 1995

10,9003.0%2Oriental Hotel tokyo
bay

Fullservice

Mid-price511

May 1995

19,900

5.5%

Namba OrientalHotel
Hotel Nikko Alivila

Limitedservice
ResortMid-price

258

Osaka

March 1996

15,000

4.1%

Luxury397

Okinawa

18,9005.2%

Uppermiddle

227

Chugoku

4,100

1.1%

ResortMid-price

280

Okinawa

April 1994September 1993
Extended in
September 2006
March 2004
Extended in June
2005
Extended in May
2006

5

Oriental Hotel
Hiroshima

Fullservice

8The Beach Tower
Okinawa

7,610

2.1%

9HakoneSetsugetsuka

ResortMid-price

158

October 2006

4,070

1.1%

10

Dormy Inn
Kumamoto

Limitedservice

Mid-price

291

January 2008

2,334

0.6%

12

the b suidobashi

Limitedservice

Mid-price

99

Tokyo

August 1986
Extended in
September 1989

1,120

0.3%

dormy inn・global
cabin Asakusa
Hakata Nakasu
Washington Hotel
Plaza

Limitedservice

Economy75

Tokyo

March 1997

999

0.3%

Limitedservice

Mid-price

247

March 19952,1300.6%

Nara Washington
Hotel Plaza

Limitedservice

Mid-price

204

March 2000

2,050

0.6%

R&B Hotel
Ueno-hirokoji
Comfort HotelTokyo Higashi
Nihombashi
Smile Hotel
Nihombashi
Mitsukoshimae

Limitedservice

Economy

187

Tokyo

April 2002

1,720

0.5%

Limitedservice

Economy

259

Tokyo

January 2008

3,746

1.0%

Limitedservice

Economy

164

Tokyo

March 1997

2,1080.6%

Main building
and annex bothin September
2001

1,652

0.5%

34

13
14

15
16
1822

Area
(*2)
Kansai(excludingOsaka)
Kanto(excludingTokyo)

Kanto(excludingTokyo)
Kyushu(excludingOkinawa)Kyushu(excludingOkinawa)
Kansai(excludingOsaka)

24

Toyoko Inn
Hakata-guchi
EkimaeLimitedservice

Economy257

Kyushu(excludingOkinawa)25

Chisun Hotel
KamataLimitedservice

Economy

105

Tokyo

January 1992

1,512

0.4%

26

Chisun Inn Kamata

Limitedservice

Economy70

Tokyo

April 2003

823

0.2%

29

Oriental Hotel
Universal City

ResortMid-price

330

Osaka

June 2001

6,754

1.9%

31

Hilton Tokyo Bay

ResortLuxury828

June 1988

26,050

7.2%

32

ibis Styles Kyoto
Station

Limitedservice

Mid-price

215

March 2009

6,600

1.8%

Kanto
(excludingTokyo)
Kansai(excludingOsaka)

5

33

ibis Styles Sapporo

34

Mercure Sapporo

35

Mercure Okinawa
Naha

37

the b ikebukuro39

the b hachioji

40

the b hakata

41

Limitedservice
Limitedservice
Limitedservice
Limitedservice
Limitedservice

Mid-price278

Hokkaido

July 2010

6,797

1.9%

Mid-price285

Hokkaido

April 2009

6,000

1.7%

Mid-price

260

Okinawa

August 2009

3,000

0.8%

Mid-price

175

Tokyo

June 1982

6,520

1.8%

Mid-price

196

Tokyo

August 1986

2,610

0.7%

Limitedservice

Mid-price

175

September 1997

2,300

0.6%

Hotel Francs

Fullservice

Mid-price

222

August 1991

3,105

0.9%

42

Mercure Yokosuka

Fullservice

Mid-price160

November 1993

1,650

0.5%

43

Okinawa Marriott
Resort & Spa

ResortUppermiddle

361

Okinawa

February 2005
Extended inDecember 2006

14,950

4.1%

Fullservice

Luxury238

Chugoku

August 2010

17,3204.8%

Limited-service

Mid-price

268

Tokyo

Decemeber 2009

6,705

1.8%

Fullservice

Uppermiddle

221

Kyushu(excludingOkinawa)

July 1985

7,197

2.0%

Limitedservice

Mid-price

314

Osaka

August 2008

27,0007.4%

Limitedservice

Mid-price

263

Kyushu(excludingOkinawa)

April 1999

5,248

1.4%

Chubu

February 1989

15,2504.2%

August 199313,175

3.6%

May 1996

9,125

2.5%

February 1998

10,3732.9%4445464748

ACTIVE-INTER
CITY HIROSHIMA(*5)(Sheraton GrandHiroshima Hotel)
CANDEO HOTELS
UENO-KOEN
Oriental Hotel
Fukuoka Hakata
StationHoliday Inn Osaka
Namba
Hotel Oriental
Express Fukuoka
TenjinKyushu(excludingOkinawa)
Kanto(excludingTokyo)
Kanto(excludingTokyo)

49

Hilton Nagoya

Fullservice

Luxury460

50

Hilton Tokyo Narita
Airport

Fullservice

Uppermiddle

548

51

International Garden
Hotel Narita

Fullservice

Mid-price463

52

Hotel Nikko Nara

Fullservice

Uppermiddle

330

LimitedserviceMid-price

124

Osaka

January 2018

2,738

0.8%

Fullservice

Uppermiddle

453

Tokyo

January 1996

62,40017.2%--

11,279--363,542100.0%

5354

Hotel Oriental
Express Osaka
Shinsaibashi
Hilton TokyoOdaiba
Total

Kanto
(excludingTokyo)
Kanto(excludingTokyo)
Kansai(excludingOsaka)(*1) Number of rooms available for sale as of today (rooms occupied by the hotel for a long term is excluded).
(*2) Tokyo means Tokyo metropolitan area. Kanto (excluding Tokyo) means Kanagawa, Chiba, Saitama, Ibaraki, Gunma, Tochigi and Yamanashiprefectures. Chubu means Aichi, Mie, Shizuoka, Nagano, Gifu, Niigata, Toyama, Ishikawa and Fukui prefectures. Osaka means Osakaprefecture. Kansai (excluding Osaka) means Kyoto, Shiga, Hyogo, Nara and Wakayama prefectures. Chugoku means Hiroshima, Okayama,Tottori, Yamaguchi and Shimane prefectures. Kyushu (excluding Okinawa) means Fukuoka, Nagasaki, Miyazaki, Kumamoto, Saga, Oita andKagoshima prefectures. Okinawa means Okinawa prefecture.
(*3) Acquisition prices stated on a purchase and sale agreement for beneficial interest in trust or real estate are indicated (consumption tax, local
consumption tax and the acquisition expenses such as broker’s fee are not included). The acceptance prices are indicated for the assets thathave been accepted through the merger.
(*4) The percentage of each acquisition price to the total of acquisition price is indicated and the numbers are rounded off to one decimal place.

6(*5) Type, grade and total number of guest rooms of ACTIVE-INTER CITY HIROSHIMA are those of the main facility, Sheraton Grand
Hiroshima Hotel.
(*6) Numbers for the assets transferred and the asset to be sold are missing numbers.

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