Ichigo Hotel(3463)

Asset Sale & Acquisition
August 24, 2018

Ichigo Hotel REIT Investment Corporation (3463)
Ichigo Investment Advisors Co., Ltd.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

www.ichigo-hotel.co.jp/english

We express our deepest condolences to all
those affected by the recent heavy rainfall inwestern Japan and our wishes for the earliest
possible recovery.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

This material is a summary of the following two releases detailing
Ichigo Hotel’s most recent asset sale and acquisition:“Hotel Sale (Smile Hotel Asakusa),” April 20, 2018
“Hotel Acquisition (Court Hotel Kurashiki),” August 24, 2018

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Asset Sale & Acquisition Objectives‒ Accelerate Organic Growth and Maximize Gains on Asset Sale in a Strong
Seller’s Market‒ Fully Distribute Gains on Sale as Dividend to Shareholders and Reinvest
Principal Proceeds in Hotel with Strong Growth Potential
SaleAcquisition

Smile Hotel Asakusa

Court Hotel Kurashiki

・Sold at 1.4X book value and 1.3X appraisal value
・Gains on sale of JPY 690M, all of which to be distributed
to shareholders as a dividend this period (January 2019)

・High NOI will drive higher Ichigo Hotel EPS
・Located in a popular tourist destination
・Room configuration can flexibly accommodate
diverse needs of travelers

At Acquisition(August 2016)

AssetSale &Acquisition

vs.
At Sale(August 2018) Acquisition

At Acquisition(August 2018)

NOI(Cap Rate)JPY 96M(4.9%1)JPY 99M(5.2%3)+3%NOI(Book Value Yield)

JPY 118M(6.9%1)Price(Cap Rate)

JPY 1.92B(4.9%2)

JPY 2.70B(3.7%4)+41%

Acquisition Price(Cap Rate)

JPY 1.73B(6.9%2)

Appraisal Value(Unrealized Gain)

JPY 2.02B(+JPY 58M)

JPY 2.13M(+JPY 207M)+5%(+257%)

Appraisal Value(Unrealized Gain)

JPY 1.96B(+ JPY 213M)

Gains on Sale of JPY 690M

Organic Growth
to Drive
Increased
Asset Value

Increase Portfolio Diversity & Quality

Maximize Shareholder Value
1 Appraisal NOI divided by acquisition date book value 2 Appraisal NOI divided by acquisition price3 Actual NOI (Feb 2017 – Jan 2018) divided by sale date book value 4 Actual NOI (Feb 2017 – Jan 2018) divided by sale price© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

5

Acquisition: Court Hotel Kurashiki (F-04)− Acquired from Ichigo (2337), Ichigo Hotel’s sponsor− 6.9% NOI Yield (Appraisal Basis), +23% NOI* vs. Smile Hotel Asakusa Soldin August− Further Earnings Growth Expected on Back of Growing Inbound and BusinessDemand* Calculated based upon actual NOI of Smile Hotel Asakusa, August 1, 2017 – July 31, 2018

Major Tourist Spots• Kurashiki Bikan Historical Quarter1• Kojima Area (Jeans Street)• Tamashima Area
• Mitsui Outlet Park Kurashiki• Kurashiki Muscat Stadium• Ohara Museum of Art• Okayama Koraku-en• (One of the Three Great Gardens of Japan)• Mt. Washuzan Observatory• Great Seto Bridge

Business Demand• Third populous city in the Chugoku region

Hotel Overview
Acquisition Price

JPY 1.73B

Appraisal Value

JPY 1.96B

NOI (NOI Yield)

JPY 118M (6.9%) (appraisal basis)

Asset Type

Stay-only hotel

Location

2-2-26 Chuo, Kurashiki, Okayama

Leasable Area

3,964.19m2

Structure

RC 8F

Date Built

March 1993

Occupancy

100% (as of July 31, 2018)(after Hiroshima and Okayama)• Kurashiki Prefectural Office• Mizushima Coastal Industrial Complex

Kurashiki Bikan
Historical Quarter

Convenient Access• 35 min. by bus to Okayama Airport• 10 min. by train to Shin Kurashiki Station(Shinkansen station)• 3 train lines to Kurashiki: JR Sanyo &Hakubi and Mizushima Coastal

1 Kurashiki Bikan Historical Quarter is a tourist destination popular for its historical Edo-period buildings, attracting 3.85 million tourists in 2016.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

6Disclaimer
These materials are for informational purposes only, and do not constitute or form a part of, and should not be construed as,
an offer to sell or buy securities of Ichigo Hotel REIT Investment Corporation (Ichigo Hotel).
These materials may contain forward-looking statements regarding the intent, belief or current expectations of Ichigo Hotelwith respect to financial condition and future results. These statements are based on certain assumptions founded on
currently available information. Accordingly, such statements are subject to risks and uncertainties, and there is no assurance
as to actual financial conditions or future results. Actual results may vary from those indicated in the forward-looking
statements.
In creating these materials, Ichigo Hotel and Ichigo Investment Advisors Co., Ltd. (IIA) have sought to provide accurate
information. However, there can be no assurance given as to the accuracy, certainty, validity or fairness of any suchinformation. The content of these materials is also subject to revision or retraction without prior notice.
This document is a translation. If there is any discrepancy between the Japanese version and the English translation, theJapanese version shall prevail.

Contact:
Ichigo Hotel IR Desk (3463)
TEL: +81-3-3502-4892
IR_Hotel@ichigo.gr.jp
www.ichigo-hotel.co.jp/english
Ichigo is Japan’s first zero-carbon listed real estate company. We are taking
responsibility for our environmental footprint by offsetting our carbon emissions
and investing in low-carbon technologies such as solar energy.

© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.