Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

August 16, 2023
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Eriko Ishii, Executive Director
www.ichigo-hotel.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892
Upward Earnings Forecast Revision for the January 2024 Fiscal Period
Ichigo Hotel is revising upward its January 2024 earnings forecast announced in the July21, 2023 release “Earnings Forecast Revisions for the July 2023 and January 2024 FiscalPeriods.” There is no change to the July 2023 fiscal period earnings forecast.
1. January 2024 Earnings Forecast Revision(JPY million)

Operating
ProfitRecurring
Profit

1,665

816

544

543

2,134

2,094

1,086

736

735

2,246+428+270+191+191+112% Change+25.7%+33.2%+35.2%+35.2%+5.2%

Reference:
January 2023

1,537

781

572

571

2,240

Previous Forecast(A)
New Forecast(B)Difference(B) - (A)Net
IncomeDividendper Share(JPY)

OperatingRevenue

Reference: Net Income per Share: JPY 2,246
Period-end number of shares outstanding: 327,489 shares
Note: The new forecast is based on the “Preconditions for the January 2024 Earnings
Forecast” on page 3. Actual results may vary due to changes in circumstances, so theseforecasts should not be construed as a guarantee of such results. Ichigo Hotel will make aforecast revision should a material discrepancy emerge between this forecast and results.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings forecast revision for the January2024 fiscal period, and has not been prepared for the purpose of solicitation of investment.

12. January 2024 Earnings Forecast Revision Rationale
Ichigo Hotel is revising upward its January 2024 earnings forecast to reflect changes tothe preconditions announced in the July 21, 2023 release “Earnings Forecast Revisionsfor the July 2023 and January 2024 Fiscal Periods.” Operating revenue, operating profit,
recurring profit, net income, and the dividend are forecast to increase significantly as aresult of the acquisition of five hotels announced in today’s releases “Issuance of New
Shares via Third-Party Allotment,” “Acquisition of Five Hotel Assets,” and “New Loanfor Acquisition of Hotel Assets.”
With the support of Ichigo, Ichigo Hotel’s sponsor, Ichigo Hotel is taking advantage ofthe accelerating recovery of Japan’s hotel market and growing Ichigo Hotel shareholder
value. With today’s acquisition of five hotels that have NOI upside, Ichigo Hotel isgrowing and diversifying its portfolio. Two of the hotels being acquired are Ichigo’s
boutique hotel brand, THE KNOT, which offers more refined guest services and willallow Ichigo Hotel to address the needs of a more diverse clientele.
In pursuit of the highest possible dividend for Ichigo Hotel shareholders, Ichigo Hotel isprocuring part of the funds for the acquisition via a third-party allotment of new shares.
The third-party allotment will reduce the dilution and share price impact associated with apublic offering.
January 2024 operating revenue, operating profit, recurring profit, net income, and thedividend are now forecast to increase JPY 428 million (+25.7%), JPY 270 million(+33.2%), JPY 191 million (+35.2%), JPY 191 million (+35.2%), and JPY 112 (+5.2%)
versus the previous forecast announced on July 21, 2023.
Year-on-year, the forecast dividend increase is now +0.3%. However, excluding one-off
rental income due to leasing all rooms at three hotels to local governments during Covid,
the year-on-year forecast dividend increase is +76.4%.11One-off rental income is due to the local governments of Hiroshima, Aichi, andKumamoto Prefectures leasing all rooms of the Valie Hotel Hiroshima (from February
2021 onward), Hotel Wing International Nagoya (from January 2022 onward), and Nest
Hotel Kumamoto (from February 2022 onward).

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings forecast revision for the January2024 fiscal period, and has not been prepared for the purpose of solicitation of investment.

2Preconditions for the January 2024 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2023 to January 31, 2024 (184 days) 30 hotels (25 hotels as of today and five hotels to be acquired on August 25, 2023)
 The forecast assumes no further acquisitions or sales through January 31, 2024.
 The number of assets may change due to acquisitions or sales made during theperiod.
Within operating revenue, rental income is forecast based on current lease contracts,
taking into consideration such factors as hotel and market conditions.1
Forecast Operating Performance for the 22 variable rent hotels23Occupancy
ADR4January 2024 Fiscal Period
84.6%
JPY 8,217

1

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 22 variable rent hotels are: Smile Hotel Kyoto Shijo, Hotel Wing InternationalNagoya, Nest Hotel Sapporo Ekimae, The OneFive Osaka Sakaisuji, Hotel Wing
International Kobe Shin Nagata Ekimae, Nest Hotel Sapporo Odori, The OneFive
Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo Asagaya, NestHotel Matsuyama, The OneFive Okayama, Capsule Plus Yokohama, The OneFive
Garden Kurashiki, Nest Hotel Kumamoto, Valie Hotel Hiroshima, The OneFive
Tokyo Shibuya, Smile Hotel Nagano, Comfort Hotel Osaka Shinsaibashi, HOTEL
THE KNOT YOKOKAMA, Quintessa Hotel Ise Shima, Quintessa Hotel Ogaki,
and THE KNOT SAPPORO. Data for Capsule Plus Yokohama is excluded fromthe above forecast because the operator did not give consent to disclose forecasts.
3
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period / (total
number of guest rooms * number of days hotel was in operation during the period)
4
ADR or Average Daily Rate is calculated with the following formula:
ADR = Total sales from accommodation (excluding restaurant charges and otherservice fees) / number of guest rooms occupied during the period

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings forecast revision for the January2024 fiscal period, and has not been prepared for the purpose of solicitation of investment.

3

Details of the January 2024 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Hotel Name
GuaranteedRent
Rent
Smile Hotel Kyoto Shijo
34
13
Nest Hotel Sapporo Ekimae
3266
The OneFive Osaka Sakaisuji
1718
Comfort Hotel Hamamatsu
55–
Nest Hotel Sapporo Odori
2651
The OneFive Fukuoka Tenjin
40
25
Nest Hotel Osaka Shinsaibashi
65
66
Comfort Hotel Central International Airport
151–
Smile Hotel Tokyo Asagaya
59
33
Nest Hotel Matsuyama
35
43
The OneFive Okayama
72
8
Comfort Hotel Kushiro
18–
Comfort Hotel Suzuka
15–
The OneFive Garden Kurashiki
2282
Nest Hotel Kumamoto
2746
Valie Hotel Hiroshima
2222The OneFive Tokyo Shibuya
4428
Smile Hotel Nagano
519
Hotel Sunshine Utsunomiya
57–Comfort Hotel Osaka Shinsaibashi
593HOTEL THE KNOT YOKOHAMA
5776
Quintessa Hotel Ise Shima
1711
Quintessa Hotel Ogaki
1314THE KNOT SAPPORO
3864
Other1
216
69
Total
1,209
766

Operating
Revenue

Total
48
98
35
55
77
66
131
151
93
79
80
1815
105
74
44
73
2557
62
134
2927103
285
1,976

1

Figures for Hotel Wing International Nagoya, Hotel Wing International Kobe
Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Capsule PlusYokohama, Urbain Hiroshima Executive, and Washington Hotel Plaza
Shimonoseki Eki Nishi, are included in “Other” because the hotel operators didnot provide consent to disclose hotel-specific data.
 Retail: JPY 77 million of rental income from retail tenants at The OneFive Osaka
Sakaisuji, Hotel Wing International Kobe Shin Nagata Ekimae, Smile HotelTokyo Asagaya, Hotel Sunshine Utsunomiya, Comfort Hotel Osaka Shinsaibashi,
HOTEL THE KNOT YOKOHAMA, and THE KNOT SAPPORO.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings forecast revision for the January2024 fiscal period, and has not been prepared for the purpose of solicitation of investment.

4

OperatingExpenses

 Rental expenses (excluding depreciation), Ichigo Hotel’s principal operating
expense, are calculated based on historical data for currently owned hotels, andbased on historical data adjusted for anticipated expense variations.
 Depreciation: JPY 473 million. Depreciation has been calculated using thestraight-line method.
 Property and city planning taxes: JPY 126 million. Property and city planningtaxes for hotels to be acquired will be recorded from the July 2024 fiscal period.
 Building maintenance and repair expenses are based on what Ichigo Investment
Advisors, the asset management company of Ichigo Hotel, estimates will benecessary for each hotel during the period. However, actual expenses for theperiod could differ significantly from these forecast amounts for reasons including
the variability of maintenance and repair expenses, one-time costs due tounexpected building damage, etc.
 Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.
 SG&A expenses: JPY 2 million for engineering report and JPY 2 million forenvironmental certification costs

Non-OperatingExpenses

 New share issuance-related expenses: JPY 5 million. Expenses for the new shareissuance will be amortized over 36 months using the straight-line method.
 Interest expenses and other borrowing-related expenses: JPY 345 million

Borrowings

 Total borrowings: JPY 32.47 billion as of January 31, 2024, including loans (anew loan of JPY 7.0 billion scheduled on August 25, 2023 to be used for thescheduled acquisition of five hotels, new loans to repay a long-term loan of JPY
4.5 billion maturing on August 31, 2023, a short-term loan of JPY 7 billion
maturing on November 30, 2023, and a short-term loan of JPY 1.8 billion
maturing on January 31, 2024)

Number ofShares 254,974 shares issued and outstanding as of today. The forecast assumes all
72,515 new shares to be issued via third-party allotment will be issued (total327,489 shares), and that there will be no additional new issuance of shares and/orcancellation of shares through January 31, 2024.

Dividend The dividend forecast assumes that dividends will comply with the dividend
distribution policy stipulated in Ichigo Hotel’s Articles of Incorporation.
 The dividend is subject to change due to factors such as sales of portfolio assets,changes in rental income associated with operator turnover, the occurrence of
unexpected maintenance and repair costs, and fluctuations in interest rates.

Dividend in
Excess ofEarnings

 Ichigo Hotel does not plan on paying any Dividend in Excess of Earnings.

Other This forecast assumes that there are no material revisions to laws and regulations,the tax system, accounting standards, listing rules of the Tokyo Stock Exchange,
and rules of the Investment Trusts Association, Japan, and no material changes inthe state of the economy and real estate market conditions.

Disclaimer: This press release has been prepared for the purpose of announcing to the public certain matters relating to the earnings forecast revision for the January2024 fiscal period, and has not been prepared for the purpose of solicitation of investment.

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