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.
August 20, 2015

Midterm Financial Report for the Fiscal Year Ending December 31, 2015
(January 1, 2015 – June 30, 2015)
Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange8985
http://www.jhrth.co.jp/en/
Yukio Isa, Executive Director

Asset management company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hisashi Furukawa, Representative Director and President
Noboru Itabashi
Director and Senior General Manager of Operations Division
Phone: +81-3-6422-0530

Scheduled date to file midterm Securities Report:

September 18, 2015

Preparation of supplementary material on midterm financial report:
Schedule for presentation of midterm financial results:

Yes
Yes (Analysts and institutional investors only)(Amounts are rounded down to the nearest million yen)

1. Summary of midterm financial results
for the fiscal year ending December 31, 2015 (January 1, 2015 – June 30, 2015)(1) Operating results(Percentages: full year--changes from previous year, midterm period--changes from previous mid-term period)
Midterm period ended

June 30, 2015
June 30, 2014

Operating revenue
JPY1M
%
7,242
31.6
5,504
15.1

Operating income
JPY1M
%
4,257
41.3
3,011
35.7

Ordinary income
JPY1M
%
3,472
55.4
2,235
57.5

Net income
JPY1M
3,472
2,234

%
55.4
56.4

5,774

78.6

Fiscal year ended

December 31, 2014

Midterm period ended

June 30, 2015
June 30, 2014

12,760

11.2

7,545

40.6

5,776

54.4

Net income per unit
JPY
1,166
852

Fiscal year ended

December 31, 2014

2,159

(Note) Net income per unit is calculated based on the period-average number of investment units.

(2) Financial position
Midterm period ended

June 30, 2015
June 30, 2014

Total assets
JPY1M
222,668
166,687

Net assets
JPY1M
124,071
86,719Equity ratio
%
55.7
52.0

Net assets per unit
JPY
39,50933,083

100,34253.3

35,948

Fiscal year ended

December 31, 2014

188,091(Note) Net assets per unit are calculated based on the total number of investment units issued and outstanding at the end of the midterm period / full year.

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1

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(3) Cash flows

Midterm period ended

June 30, 2015
June 30, 2014

Cash flows fromoperating activities
JPY1M
5,073
4,215

Cash flows frominvesting activities
JPY1M(24,829)
(860)

8,353

(17,828)

Cash flows from
Cash and cash equivalents
financing activities
at end of period/year
JPY1M
JPY1M
30,47625,145(6,025)
9,883

Fiscal year ended

December 31, 2014

11,347

14,424

2. Operating forecast for the fiscal year ending December 31, 2015
(January 1, 2015 – December 31, 2015)(Percentages show changes from the previous year)
Operating revenue
JPY1M

Full year

16,655%
30.5

Operating income
JPY1M

10,029%32.9

Ordinary income

Net income

JPY1M

JPY1M

%
44.0

8,319

8,318

Dividend per unit
(Excess of earnings
exclusive)%
44.0

Dividend per unit
resulting fromexcess of earnings

JPY
2,650

JPY
0

(Reference) Estimated net income per unit for the fiscal year ending December 31, 2015 (full year) ¥2,718(Calculated based on the estimate of period-average number of investment units of 3,060,647.)(Note) Reversal of reserve for dividends in the amount of ¥13 million is planned to be the source of dividend payment.

* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error
corrections(a) Changes in accounting policies due to revisions to accounting standards and other regulations: No change(b) Changes in accounting policies due to other reasons than above (a): No change(c) Changes in accounting estimates: No change(d) Restatement of prior period financial statements after error corrections: No change(2) Total number of investment units issued and outstanding(a) Total number of investment units issued and outstanding at the end of the midterm period / full year(including investment units owned by Japan Hotel REIT Investment Corporation (hereinafter referred to as “JHR”)
As of June 30, 2015
3,140,322 units
As of June 30, 2014

2,621,281 units

As of December 31, 2014(b) Number of JHR’s own investment units held at the end of the midterm period / full year
As of June 30, 2015

2,791,281 units
0 units

As of June 30, 2014

0 units

As of December 31, 2014

0 units(Note) For the number of investment units serving as the basis of computation of net income per unit, please refer to “Notes on per unit information” on page 32.

* Status of midterm audit procedures
At the time of disclosure of this financial report, audit procedures for the semi-annual financial statements pursuant to the Financial
Instruments and Exchange Act of Japan are incomplete.

* Appropriate use of forecasts of results and other special items
Forward-looking statements presented in this financial report including operating forecasts are based on information currently
available to us and on certain assumptions we deem to be reasonable. As such, actual operating and other results may differ
materially from these forecasts due to a number of factors. Furthermore, we do not intend to guarantee any dividend amount by
these forecasts. For the assumptions of the operating forecast and notes for making reference to the assumptions of the operating
forecast, please refer to “2. Investment policies and operating results; (2) Operating results; (B) Outlook for the second half of the
fiscal year” on page 6 and “Assumptions of the operating forecast for the full year of the fiscal year ending December 31, 2015
(16th period)” on page 9.

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1. Related parties of the investment corporation
Disclosure is omitted because there is no significant change from “Structure of the investment corporation” in the most recent
Securities Report (submitted on March 20, 2015).

2. Investment policies and operating results(1) Investment policies
Disclosure is omitted because there is no significant change from “Investment policies,” “Investment targets” and “Distribution
policy” in the most recent Securities Report (submitted on March 20, 2015).

(2) Operating results(A) Overview of the midterm period under review(a) Brief history and principal activities
Japan Hotel REIT Investment Corporation (JHR) was established under the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951, as amended; hereinafter referred to as the “Investment Trusts Act”) on November 10,2005 and was listed on the Real Estate Investment Trust (“REIT”) section of the Tokyo Stock Exchange (Securities code:8985) on June 14, 2006.
JHR entrusts the asset management to Japan Hotel REIT Advisors Co., Ltd. (hereinafter referred to as the “AssetManagement Company”). Focusing on importance as the social infrastructure and profitability of hotels, JHR primarily
invests in real-estate-related assets that are in themselves real estate which are wholly or partially used as hotels or realestate equivalents of such real estate or that are backed by such real estate or real estate equivalents (hereinafter referred toas “Real Estate for Hotels, etc.”).
JHR, the former Nippon Hotel Fund Investment Corporation, merged with the former Japan Hotel and Resort, Inc.
(hereinafter referred to as the “former JHR”) with an effective date of April 1, 2012 (hereinafter referred to as the“merger”) and changed its name to Japan Hotel REIT Investment Corporation, making a new start as a REIT specializing inhotel properties. Combined with public offerings for capital increase, JHR has continuously acquired hotels that are“competitive enough to attract domestic and inbound leisure demand” and located in its “strategic investment target areas.”
As such, JHR has steadily expanded the asset size by implementing the growth strategy through such means as acquiring a
total of 15 new properties amounting to a total of ¥98,952 million (acquisition price basis) over a little more than three
years since making a new start, including one property acquired in July 2015 subsequent to the end of the midterm period
under review (June 30, 2015), and thereby growing to a portfolio of 38 properties with a combined acquisition price of¥213,134 million as of the date of submission of this report.
The number of JHR’s investment units issued and outstanding was 3,140,322 units as of June 30, 2015.
(b) Investment performance
During the midterm period under review (six-month period from January 1, 2015 to June 30, 2015), the Japanese economy
continued to show a modest recovery trend, as evident by such factors as corporate earnings improving overall and signs of
pickup in consumer spending amid the employment and income environments continuing to improve due in part to theeffect of the various measures implemented by the Abe administration to end deflation and achieve sustainable economic
growth, along with the impact of drops in crude oil prices and depreciation of the yen. Under such circumstances, in the
tourism industry, the leisure demand among the Japanese people remained solid, and the number of overseas (inbound)tourists visiting Japan, primarily from Asian countries, continued to largely increase thanks to the government’s various
measures aimed at making Japan a major tourism nation as well as the depreciation of the yen and other factors. The
number of such inbound tourists reached 10 million for first time in 2013, increased to 13 million, up approximately 29%
over the previous year, in 2014. With this momentum also continuing into 2015, the number totaled 9 million in the firsthalf of the year from January to June to record growth of approximately 46% over the same period of the previous year. In
such an environment with favorable momentum for the hotel industry, many of the hotels owned by JHR achieved a rise inoperating performance, mainly in the rooms department, allowing for ascertain of how strong the leisure demand was bothin and outside Japan. Furthermore, also in the investment market for hotels, there are many investors anticipating future
growth of hotel properties, keeping the market size expanding. In such an environment, JHR issued new investment units
through public offerings in January and June 2015.
With the capital increase through public offering in January, JHR acquired six hotels, including five hotels operated by the
Ishin Hotels Group (Note 1) (hereinafter referred to as “the five the b hotels”), located mainly in Tokyo that is deemed toenjoy the largest benefits from an increase in inbound tourists.
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In addition, in April, JHR acquired Mercure Yokosuka, which has stable hotel accommodation demand and was ranked No.
1 in the Yokosuka market for guest reviews (March 27, 2015 ranking by a globally leading travel website TripAdvisor).
With the capital increase through public offering in June, JHR decided to acquire Okinawa Marriott Resort & Spa, a large
resort hotel in Okinawa, the location which is expected to show relatively high growth among JHR’s strategic investment
target areas.
JHR makes it a policy to aim at raising rents for its owned hotels against the backdrop of the strong performance in thelodging market. For hotels with fixed rent, JHR worked on revising rents upward, changing rent structures including
introduction of revenue sharing structures and other negotiations upon renewal or expiration of lease contracts for hotels at
which the ability to bear rent costs was enhanced through better performances. One example is Dormy Inn Suidobashi.
Upon expiration of the fixed-term lease agreement, which was under a fixed rent structure, a lease contract that combines
fixed rent and variable rent was concluded with the Ishin Hotels Group as lessee in pursuit of not only securing stability but
also upside potential. With the rebranding of the hotel, it started operations as a hotel under the name of the b suidobashi on
July 1, 2015. For hotels with variable rent and income from management contracts, JHR endeavored to expand its earnings
by continuously discussing with the hotel operators for increasing revenue, after assessing the business environment andoperation conditions at each hotel on a monthly basis.
With respect to capital expenditures in portfolio properties, JHR invested in the renewal of its facilities in order to maintainthe value of its assets and carried out strategic refurbishment, etc. to increase profits at hotels with variable rent contracts,
etc.
With regard to the status of operations of the five hotels (hereinafter referred to as “the five HMJ hotels”) (Note 2) which
JHR leases to Hotel Management Japan Co., Ltd. (hereinafter referred to as “HMJ”) under variable rent contracts, they
have produced a period-on-period increase both in sales and GOP (gross operating profit), led by the rooms department,
during the midterm period under review. The rooms department achieved an increase in not only the guest room occupancy
rate but also the ADR (average daily rate), endorsing the solidity in leisure-related consumption.
Moreover, inbound guests and domestic leisure demand were successfully attracted by the six hotels (Note 3) with variable
rent or management contract structures under lease or management contracts with AAPC Japan K.K. (hereinafter referred
to as “Accor”), a Japanese subsidiary of Accor Hotels headquartered in Paris, France (hereinafter referred to as “the six
Accor hotels”) and by “the five the b hotels” which have adopted variable rent. These hotels posted a year-on-year increase
both in sales and GOP, mainly led by an increase in the ADR. For further details regarding sales, GOP and othermanagement indicators for each of the five HMJ hotels, the six Accor hotels and the five the b hotels, please refer to“<Reference Materials 3> Sales and GOP of the Five HMJ Hotels,” “<Reference Materials 4> Sales and GOP of the Six
Accor Hotels” and “<Reference Materials 5> Sales and GOP of the Five the b Hotels” on pages 16 to 18 and “D. Overview
of the hotel business” on page 56.
(Note 1)

Represents the five hotels, namely, the b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata.

(Note 2)

Represents the five hotels, namely, Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba Oriental Hotel, Hotel Nikko
Alivila and Oriental Hotel Hiroshima.

(Note 3) Represents the six hotels, namely, the five hotels comprising ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo,
Mercure Sapporo and Mercure Okinawa Naha (hereinafter referred to as the “five Accor hotels”) plus Mercure Yokosuka, which was
acquired on April 2, 2015.

Furthermore, JHR has been offering Investor Benefits Program so that investors would gain a better understanding of
hotels owned by JHR. The aim has also been to improve customers’ satisfaction and expand the number of investors. The
Investor Benefits Program will be expanded, with a series of reviews in order to make the Investor Benefits Program more
appealing leading to a recent new addition of the six Accor hotels to the list of hotels offering benefits in fiscal 2015.
In addition, JHR has continued to make steady progress in reducing costs, such as real estate operating costs, general andadministrative expenses, and borrowing costs.
(c) Funding
JHR procured a total of ¥15,651 million by way of capital increase through public offering in January 2015 and capitalincrease through third-party allotment in February 2015, and procured ¥14,400 million in long-term loans payable and¥1,000 million in short-term loans payable. These funds were used to acquire six properties, including the five the b hotels,
and make early repayment of existing loan payable due for repayment on February 15, 2015 in the amount of ¥4,779
million on January 30, 2015. JHR also procured ¥10,500 million by way of capital increase through public offering in June
2015, and obtained ¥1,500 million in long-term loans payable and ¥5,000 million in short-term loans payable on July 10,－4－2015. These funds were used to acquire Okinawa Marriott Resort & Spa.
As of the end of the midterm period under review, interest-bearing debt totaled ¥91,485 million, including short-term loans
payable of ¥1,000 million, current portion of long-term loans payable of ¥20,588 million, long-term loans payable of¥63,896 million and investment corporation bonds of ¥6,000 million, and the ratio of interest-bearing debt to total assets at
end of period (Note 4) stood at 41.1% (Note 5). In addition, through refinancing, JHR worked to lower its funding costs
and diversify its repayment period.
JHR also concluded interest rate swap contracts to fix the interest on ¥9,700 million on loans on January 30 and March 27,
2015 in order to suppress the increase in interest payment resulting from future interest rate rises. These actions brought the
fixed rate ratio (including the interest rate cap purchase portion) on total interest-bearing debt to approximately 90% at theend of the midterm period under review.
(Note 4)

Ratio of interest-bearing debt to total assets at end of the midterm period = Balance of interest-bearing debt at end of the midterm period
÷ Total assets at end of the midterm period(Note 5)After the acquisition of Okinawa Marriott Resort & Spa, the assumed ratio of interest-bearing debt to total assets is expected to be
41.7% as of the end of December 2015.

As of June 30, 2015, JHR’s issuer ratings were as follows.
Rating agency

RatingOutlookRating and Investment Information, Inc.

A−

StableJapan Credit Rating Agency, Ltd.

A

Stable(d) Financial results
As a result of the abovementioned asset management, operating revenue, operating income and ordinary income were
¥7,242 million, ¥4,257 million and ¥3,472 million, respectively, for the midterm period under review (six-month period
from January 1 to June 30, 2015). Net income for the midterm period was ¥3,472 million.
Variable rent from the five hotels with variable rent leased to HMJ in the amount of ¥730 million is included in operating
revenue, but this amount is calculated based on the five HMJ hotels’ GOP for the midterm period under review. The
variable rent to be ultimately received from HMJ will be determined by the five HMJ hotels’ GOP for the full year (12month period).
JHR settles accounts on an annual basis and investment corporations do not have a system for interim dividends under theInvestment Trusts Act. Accordingly, no distribution of earnings can be made in the midterm period under review.
Distribution of earnings is made based on the earnings for the full year (12-month period from January 1, 2015 to
December 31, 2015). With regard to such distribution of earnings, in accordance with the policy for earnings dividend to
exceed 90% of JHR’s distributable profit that is defined by Article 67-15 of the Act on Special Measures Concerning
Taxation (Act No. 26 of 1957, as amended), the plan is that the amount calculated by adding a reversal of reserve fordividends (amount of use of negative goodwill, such as the amount equivalent to losses on retirement of existing facilities
incurred for the replacement of equipment) to unappropriated retained earnings would all be distributed except for fractionsof less than one yen of dividend per unit.

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5

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(B) Outlook for the second half of the fiscal year(a) Investment policies and issues to be addressed
Going forward, the Japanese economy is expected to show moderate recovery amid the employment and income
environments continuing to improve due in part to the impact of drops in crude oil prices and the effect of the government’s
various measures, but attention must be paid to the downside swing of overseas economies and other downside risks of theJapanese economy. In terms of the environment surrounding hotels, it is expected that JHR will benefit from increase in thenumber of inbound tourists thanks to the various national measures to promote tourism and the depreciation of the yen in
addition to the active domestic leisure demand that is key to nonresident population.
Under such circumstances, JHR intends to manage assets based on the approach described below aiming to make investingin JHR more appealing based on its strategy to mix stability centered on fixed rent revenue and potential upside derived
from variable rent, etc.
Internal growth
Increase of the earnings capability of existing properties requires that the variable rent and income from management
contracts receivable by JHR be maximized by boosting GOP of properties with variable rent contracts including revenue
sharing and properties operated under a management contract structure with Accor. To achieve this goal, JHR will request
each hotel, its business support company and its operator to implement marketing initiatives to attract more demand andmeasures to maintain and increase room rates. JHR will also work with related parties to move the business focus fromcompetition based on price to competition based on value, aiming to create facilities and services that become prominent in
the market.
JHR is aiming for further increase in variable rent, etc. by reinforcing the four pillars of internal growth, which include thesix HMJ hotels comprising the five HMJ hotels plus Okinawa Marriott Resort & Spa that was newly acquired in July 2015,
the six Accor hotels, the six the b hotels comprising the five the b hotels plus the b suidobashi that was rebranded in July
2015 (hereinafter referred to as “the six the b hotels”) and properties with revenue sharing.
For hotels with only fixed rent contracts, JHR will increase its efforts to monitor operating conditions and, by paying
careful attention to each tenant’s ability to bear the rent costs, conduct negotiations with the hotels at which the ability tobear rent costs has been enhanced through better performances so that the improvement in hotel earnings would lead to anincrease in JHR’s profit such as revising rents upward and introducing revenue sharing structures.
In addition, JHR will carry out an ongoing program of facility maintenance and improvement to ensure each hotel becomesprominent in the market and to maintain and increase the value of its assets.
External growth
In terms of external growth strategy, JHR will keep focus on investing in hotels with prospects for attracting domestic andinbound leisure demand, in other word, hotels located in appealing or fashionable areas, as JHR has done to date. Limitedservice hotels, full-service hotels and resort hotels are all investment targets, but JHR will only acquire properties withcompetitive advantages in terms of both buildings and facilities (infrastructure) and the capabilities of the hotel tenant andoperator (services).
However, competition over acquisition has become fierce in the investment market for hotels in accordance with anincrease in the number of investors, with transaction yields showing a downward trend. Under such circumstances, JHR
will utilize its strengths, such as high recognition and credibility as a REIT specializing in hotel properties, proposal andimplementation of a variety of rent structures including the management contract structure, and excellent networks withmajor hotel operators. By doing so, JHR will acquire properties while maintaining its superiority in the investment market
for hotels.
Finance strategy
JHR seeks to maintain and enhance the relationships of trust with financial institutions with which it does business, whileworking to ensure financial stability and strength by increasingly diversifying the means of financing. It aims to conduct
financial operations by keeping the ratio of interest-bearing debt to total assets at no larger than 50% for the time being. In
addition, when seeking new borrowings for property acquisitions or refinancing existing debt, JHR will work to reinforce
its existing relationships with multiple banks while seeking to spread out the maturity dates of its debt and considering thebalance with borrowing costs.
Moreover, JHR will investigate extending the maturity dates and managing interest rate risks while discerning theconditions of the market for interest rate in pursuit of financial management.
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(b) Significant subsequent events
1. Acquisition of asset
On July 10, 2015, JHR acquired Okinawa Marriott Resort & Spa.
Property name

Okinawa Marriott Resort & Spa

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

1490-1 Kise, Nago-shi, Okinawa

Acquisition dateJuly 10, 2015

SellerRising Sun The Second A TMK

Acquisition price (Note)¥14,950 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, etc., and consumption taxes.

2. Borrowing of funds
On July 10, 2015, JHR procured new borrowings as follows in order to partly fund the acquisition of the real estate
beneficial interest in trust and movable assets attached to the hotel as described above in “1. Acquisition of asset.”(1) Term Loan 13
LenderSumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd.

Amount of the loan

¥5,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.30%

Date of borrowing

July 10, 2015

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

March 31, 2016

Collateral

Unsecured/Unguaranteed(2) Term Loan 14
LenderAozora Bank, Ltd. / Mitsubishi UFJ Trust and Banking Corporation

Amount of the loan

¥1,500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.55%

Date of borrowing

July 10, 2015

Method of principal repayment

Lump-sum payment on the maturity date

Maturity dateJune 30, 2022

Collateral

Unsecured/Unguaranteed

3. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on June 4, 2015 and June 15, 2015. In
addition to the primary offering for which payment was completed by the end of the midterm period under review, payment
for the new investment units through third-party allotment was completed on July 23, 2015, and the investment units were
issued under the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥85,470,541,569, with
the number of investment units issued and outstanding totaling 3,144,227 units.
(a) Issuance of new investment units (third-party allotment)
Number of investment units issued:
3,905 units
Paid-in amount (issue value):¥75,007 per unit
Total paid-in amount (total issue value):¥292,902,335
Payment date:July 23, 2015
Allottee:
SMBC Nikko Securities Inc.
(b) Use of funds
The proceeds from the issuance of new investment units through third-party allotment of ¥292,902,335 will beallocated for cash on hand and appropriated to part of future acquisitions of specified assets, part of other repaymentof loans, or capital expenditures to maintain or improve competitiveness of existing properties.
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(c) Operating forecast
The following is the operating forecast for the full year of the fiscal year ending December 31, 2015 (16th period). For theassumptions of the operating forecast, please refer to “Assumptions of the operating forecast for the full year of the fiscal
year ending December 31, 2015 (16th period)” on page 9.
In addition, the dividend per unit based on the annualized effect of the acquisition of the five the b hotels acquired on
January 30, 2015, Hotel Francs acquired on March 31, 2015, Mercure Yokosuka acquired on April 2, 2015 and Okinawa
Marriott Resort & Spa acquired on July 10, 2015 (hereinafter referred to as the “acquired assets”) is assumed to be ¥2,693.
For the annualized effect of the acquisition of the new properties, please refer to “<Reference Materials 1> Highlights of
the operating forecast and forecast of dividend” on page 15. For the assumptions of the forecast of the annualized effect,
please refer to “<Reference Materials 2> Assumptions of the forecast of the annualized effect” on page 15.

Full year of the fiscal year ending December 31, 2015 (16th period)

Forecast
this time

Previous forecast(Note 1)

Increase(Decrease)

Operating revenue¥16,655 million¥16,050 million¥604 million

Operating income¥10,029 million¥9,375 million¥654 million

Ordinary income¥8,319 million¥7,539 million¥780 million

Net income¥8,318 million¥7,539 million¥779 million¥2,650¥2,402

¥248

¥0

¥0

¥0

Dividend per unit
Dividend per unit resulting from excess of earnings(Note 1) These are figures announced in the “Notice Concerning Revision of Operating Forecast and Forecast of
Dividend for Fiscal Year Ending December 2015 (16th Period)” dated July 17, 2015.
(Note 2) The forecast figures above are the current forecasts calculated based on certain assumptions. As such,actual operating revenue, operating income, ordinary income, net income, dividend per unit and dividend
per unit resulting from excess of earnings may vary due to changes in the circumstances. Furthermore,
the forecasts are not intended to guarantee any dividend amount.

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Assumptions of the operating forecast for the full year of the fiscal year ending December 31, 2015 (16th period)
Item
Calculation
periodAssumptions
・Full year of fiscal year ending December 31, 2015 (16th period):
January 1, 2015 through December 31, 2015 (365 days)
・The total 37 properties owned by JHR as of June 30, 2015, plus one property, Okinawa Marriott Resort & Spa,

Assets undermanagement

acquired on July 10, 2015, to total 38 properties is assumed.
・In addition, it is assumed that there will be no change (acquisition or disposition, etc.) in assets under management
other than the above through the end of the fiscal year ending December 31, 2015 (16th period). The actual
number may fluctuate, though, depending on the changes in assets that may take place.
・Operating revenue is calculated based on the effective lease contracts, etc. as of today and in consideration of hotel
competitiveness and market environment, etc.
・Rents of the main hotels are calculated based on the following assumptions. For details of the variable rent andincome from management contract arrangements, please refer to “D. Overview of the hotel business; (1) Rent
structures of hotels with variable rent, management contract or revenue sharing” on page 56.
(1) The Five HMJ Hotels (*1)
The assumptions of the fixed rent and variable rent for the five HMJ hotels are as follows.
Annual rent (¥5,990 million) = Fixed rent (¥3,221 million / year) + Variable rent
Variable rent = [(a) Total GOP of the five HMJ hotels (*2) − (b) GOP base amount (*3)] × 81.5%
The five HMJ hotels for the fiscal year ending December 31, 2015 (16th period)(millions of yen)
Total GOP of the five HMJ hotels(a)Operatingrevenue

GOP base amount(b)

Variable rent((a) − (b)) × 81.5%

Midterm

2,572

1,675

730

Full year

6,748

3,351

2,769

(*1) The five HMJ hotels are five hotels, namely, Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay,
Namba Oriental Hotel, Hotel Nikko Alivila, and Oriental Hotel Hiroshima.
(*2) GOP is Gross Operating Profit, which is the remaining amount calculated by deducting operating expenses
from total sales. Operating expenses are expenses such as personnel cost and general and administrative
expenses, etc., incurred directly from hotel operation.
(*3) It is assumed that there will be no change in the GOP base amount throughout the contract period of the lease
contracts.
(*4) For the sales and GOP of the five HMJ hotels and other comparisons, please refer to “<Reference Materials
3> Sales and GOP of the Five HMJ Hotels” on page 16.
(2) Okinawa Marriott Resort & Spa
The fixed and variable rent of Okinawa Marriott Resort & Spa are calculated as follows.
Rent for fiscal year ending December 31, 2015 (16th period) (*) (¥670 million) = Fixed rent (¥261 million) + Variable rent
Variable rent = [(a) Hotel GOP − (b) GOP base amount] × 90.0%(millions of yen)

Fiscal year ending
December 31, 2015
(16th period)(*)

Hotel GOP(a)

GOP base amount(b)

Variable rent((a) − (b)) × 90.0%

818

365

408

The rent for the fiscal year ending December 31, 2015 (16th period) shows the figure estimated to incur
during the 175 days from July 10, 2015 through December 31, 2015. Furthermore, it is assumed that theannual GOP base amount after January 1, 2016 will be ¥700 million and the annual fixed rent will be ¥550
million.

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9

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Item

Assumptions(3) The Six Accor Hotels (*1)
Income from management contracts and variable rent of the six Accor hotels(millions of yen)ibis
Tokyo Shinjuku

ibis Styles
Kyoto Station

ibis Styles
SapporoMercureSapporoMercureOkinawa Naha

MercureYokosuka

Total

Midterm

243

180

202

167

152

41

989

Full year

468

416

507

453

316

95

2,257

(*1) The six Accor hotels represent the six hotels comprising the five Accor hotels, namely, ibis Tokyo Shinjuku,
ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, and Mercure Okinawa Naha, plus Mercure
Yokosuka that JHR acquired on April 2, 2015.
(*2) For the sales and GOP of the six Accor hotels and other comparisons, please refer to “<Reference Materials
4> Sales and GOP of the Six Accor Hotels” on page 17.
(*3) It is assumed that the respective hotel’s GOP amount is posted as income from management contracts andthe management contract fees to be paid by JHR is posted as an operating expenses item. In cases wherecertain revenue from non-hotel tenant(s) is included in the respective hotel’s GOP, income frommanagement contracts is posted by subtracting such amount equivalent to tenant revenue from GOP. The
concerned amount equivalent to revenue from non-hotel tenant(s) is posted as fixed rent, etc.
(*4) Mercure Sapporo includes variable rent from non-hotel tenant(s).
(4) The Six the b Hotels (*1)
Fixed and variable rent of the six the b hotels (midterm)
the b
the b
the b
akasakasuidobashi
ikebukuro
mitsukeOperatingrevenue(millions of yen)the bochanomizu

the bhachioji

the bhakataTotal

Fixed (*2)

42

57

91

29

50

36

307

Variable

-

58

53

20

33

27

193

Total

42

115

145

49

84

63

500

Fixed and variable rent of the six the b hotels (full year)
the b
the b
the b
akasakasuidobashi
ikebukuro
mitsuke(millions of yen)the bochanomizu

the bhachioji

the bhakataTotal

Fixed (*2)

84

125

199

63

112

77

663

Variable

5

142

116

45

72

60

443

Total

90

268

316

109

184

138

1,107

(*1) The six the b hotels represent the five the b hotels, namely, the b akasaka-mitsuke, the b ikebukuro, the bochanomizu, the b hachioji, and the b hakata, plus the b suidobashi which was rebranded from Dormy Inn
Suidobashi on July 1, 2015. The structure of rent of the b suidobashi was changed to variable rent contract
on July 1, 2015. Fixed rent before rebranding is shown in the midterm table.
(*2) Fixed rent includes rent from non-hotel tenant(s).
(*3) For the sales and GOP of the five the b hotels and other comparisons, please refer to “<Reference Materials
5> Sales and GOP of the Five the b Hotels” on page 18.
(5) Other hotels that have adopted variable rent
Variable rent of other hotels that have adopted variable rent
Smile Hotel
Hotel Vista
Nihombashi
Kamata Tokyo
Mitsukoshimae(millions of yen)

Chisun Inn
KamataHotel Keihan
Universal City

Hotel Sunroute
Shinbashi

HiltonTokyo Bay

Total

Midterm

16

6

33

(*)

64

(*)

356

Full year

16

16

66

(*)

64

(*)

423

(*)

No information is shown since tenants that concluded lease agreements did not agree to disclose rent
income, etc.

－

10

－

Item

Assumptions
・The following is the breakdown of variable rent and income from management contracts.

Operatingrevenue<Breakdown of variable rent, etc. for the fiscal year ending December 31, 2015 (16th period)>(millions of yen)Five
HMJ Hotels

Okinawa Marriott
Resort & Spa

Six
Accor Hotels

Six
the b Hotels

Other hotels withvariable rent

Total

Midterm

730

－

989

193

356

2,269

Full year

2,769

408

2,257

443

423

6,303

・Among real estate leasing expenses, which is the major operating expenses, expenses other than depreciation arecalculated based on past actual data, and variable factors are reflected in the calculation. Operating expenses ofthe five the b hotels, Hotel Francs, Mercure Yokosuka, and Okinawa Marriott Resort & Spa acquired in the 16th
period (hereinafter called “Acquired Assets”) are based on past actual data as provided by previous owners, etc.,
and variable factors are reflected in the calculation.
・It is assumed that ¥946 million will be posted as expenses for fixed asset tax, city planning tax and other taxes
and public dues.
・In general, fixed asset tax and city planning tax, etc. of acquired assets are settled with the previous owner at the

Operatingexpenses

time of acquisition, calculated on a pro rata basis of the holding period. For JHR, the settlement amount isincluded in the acquisition price, and it will not be posted as expenses for the calculation period of acquisition.
Therefore, the fixed asset tax, city planning tax, and other taxes and public dues for the Acquired Assets will not
be posted as expenses for the fiscal year ending December 31, 2015 (16th period). The annual fixed asset tax andcity planning tax, etc. for the five the b hotels and Hotel Francs acquired in the 16th period are estimated to be¥147 million, while the annual fixed asset tax and city planning tax, etc. for Mercure Yokosuka and Okinawa
Marriott Resort & Spa are estimated to be ¥108 million. Moreover, the fixed asset tax and city planning tax, etc.
to be recorded as expenses for the fiscal year ending December 31, 2015 (16th period) for the three properties(ibis Styles Sapporo, Mercure Sapporo and Mercure Okinawa Naha) acquired in the fiscal year ended December
31, 2014 (15th period) are assumed to be ¥81 million (for nine months).
・Depreciation is calculated by the straight-line method, and is estimated to be ¥2,862 million. This calculation
includes the acquisition price of the Acquired Assets and incidental costs as well as planned capital expenditures(¥1,780 million) for the fiscal year ending December 31, 2015 (16th period).
・Repair expenses for buildings are posted as expenses in the estimated amount necessary for each operating period.
Please bear in mind 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, etc. tobuildings from unexpected causes, 2. The amount fluctuation of repair expenses generally tends to increase overtime, and 3. Repair expenses are not required on a regular basis.
・¥1,720 million is expected for interest expense, arrangement fee, amortization for the following (1) handlingborrowing costs and (2) derivative instrument (interest rate caps), etc.
・Expenses for the issuance of new investment units in January 2015 and the issuance of new investment units by

Non-operating
expenses

way of third-party allotment in February 2015 are estimated to be ¥33 million. Expenses for the issuance of new
investment units in June 2015 and the issuance of new investment units by way of third-party allotment in July
2015 are estimated to be ¥33 million.
・Expenses for additional issuance of investment units and secondary offering are amortized over a period of three
years by the straight-line method.
・It is assumed that the balance of interest-bearing debt (sum of loans and investment corporation bonds) was

Interestbearing
debt¥91,485 million as of June 30, 2015, ¥97,961 million as of July 31, 2015 after the purchase of Okinawa Marriott
Resort & Spa, and ¥97,772 million as of December 31, 2015.
・Loans for acquiring Okinawa Marriott Resort & Spa are ¥6,500 million.
・It is assumed to refinance loans in the amount of ¥5,016 million with maturity due in September 2015 and loans
in the amount of ¥1,592 million with maturity due in November 2015.
・Other than above, interest-bearing debt totaling ¥212 million is scheduled for contractual repayment in the latter
half of the year, and it is assumed to be repaid by using JHR’s cash on hand.

－

11

－

Item

Assumptions

Issuance ofinvestment
units

・The number of investment units issued and outstanding as of today (3,144,227 units) is assumed.
・It is assumed that there will be no additional issuance of investment units through to the end of the fiscal year
ending December 31, 2015 (16th period).
・It is assumed that the whole amount of net income excluding the amount posted as a loss on retirement of
noncurrent assets is distributed.
・Dividend per unit for the fiscal year ending December 31, 2015 (16th period) is calculated based on the following
assumptions.
Net income¥8,318 million

Retained earnings brought forward¥1 million

Use of negative goodwill (Loss on retirement of noncurrent assets) (*)

Dividend
per unit¥13 million

Distributable amount¥8,332 million

Total number of investment units issued and outstanding

3,144,227 units

Dividend per unit
¥2,650(*) Amount posted as a loss on retirement of noncurrent assets will be appropriated by reserve for dividends(negative goodwill) and expects to have little impact on dividend per unit. Regarding the issuance of new
investment units during the fiscal year, dividend per unit will generally be reduced due to the increase in thenumber of investment units. But dividend for the fiscal year ending December 31, 2015 (16th period) after
acquiring Acquired Assets is projected to increase compared with the previously forecasted dividend perunit due to the impact of revenue increase from the purchase of the Acquired Assets. Therefore, JHR does
not plan to appropriate the reserve for dividends (negative goodwill) for dividends for the fiscal year ending
December 31, 2015 (16th period) for the adjustment to dilution by the increase of investment units.
・Dividend per unit may fluctuate by various causes, such as fluctuation of rental revenue resulting from transfer
of asset, transfer of hotel lessee(s), etc., change of business environment, etc., for hotel lessee(s), etc., andunexpected repairs, etc.
・The balance of reserve for dividends (negative goodwill) after the appropriation for dividends for the fiscal year
ending December 31, 2015 (16th period) is as follows.
Balance of reserve for dividends (negative goodwill) at end of fiscal year ended December 31, 2014

¥14,168 million

Use of negative goodwill (Loss on retirement of noncurrent assets)(¥4 million)

Use of negative goodwill (Financial costs in accordance with early repayment)(¥71 million)

Use of negative goodwill (Adjustment for dilution in 15th period)(¥164 million)

Balance of reserve for dividends at end of fiscal year ending December 31, 2015

¥13,928 million

・The operating forecast of the five the b hotels acquired on January 30, 2015, Hotel Francs acquired on March 31,
2015, Mercure Yokosuka acquired on April 2, 2015, and Okinawa Marriott Resort & Spa acquired on July 10,2015 are estimated as follows.
<the b akasaka-mitsuke>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015

Acquired
AssetsOperating revenue

268

289

NOI (*1)

262

266

NOI yield (%) (*2)-

4.3

Operating income

208

211

<the b ikebukuro>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

318

341

NOI (*1)309

309

NOI yield (%) (*2)-

4.7

Operating income

243

243

－

12

－

Item

Assumptions<the b ochanomizu>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

109

116

NOI (*1)

106

106

NOI yield (%) (*2)-

4.6

Operating income

80

80<the b hachioji>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

193

203

NOI (*1)

178

163

NOI yield (%) (*2)-

6.3

Operating income

135

120

<the b hakata>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

138

147

NOI (*1)

133

131

NOI yield (%) (*2)-

5.7

Operating income

99

97<Hotel Francs>
Acquired
Assets(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

229

303

NOI (*1)

226

233

NOI yield (%) (*2)-

7.5

Operating income

165

161

<Mercure Yokosuka>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

136

225

NOI (*1)

77

120

NOI yield (%) (*2)-

7.3

Operating income

40

71<Okinawa Marriott Resort & Spa>(millions of yen)
Annualized(*3)

Fiscal year ending
December 31, 2015
Operating revenue

670

1,000

NOI (*1)

654

918

NOI yield (%) (*2)-

6.1

Operating income

506

626

(*1) NOI = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of
noncurrent assets(*2) NOI yield = NOI ÷ Acquisition price(*3) For the assumptions of calculating the annualized figures, please refer to “<Reference Materials 2>
Assumptions of the forecast of the annualized effect.”
－

13

－

Item
Dividend
per unit
resultingfromexcess of
earnings

Assumptions

・It is assumed that the excess of earnings (dividend per unit resulting from excess of earnings) will not be
distributed.
・It is assumed that revision in law, tax system, accounting standard, regulations of the listing, regulations of The

Other

Investment Trusts Association, Japan, etc. 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, hotelbusiness environment, etc.
・The numerical values are rounded down to the nearest million yen in the assumptions above.

－

14

－

<Reference Materials 1> Highlights of the operating forecast and forecast of dividend(millions of yen)
15th Period
ActualProperties

Forecast Previous
Time

Forecast
This Time

Forecast
This Time
Annualized

（A）

（B）

(*1)

Variance from
Forecast
Previous Time
（B）-（A）

Variance

30

38

38

38

0

0.0%

Acquisition price

173,429

213,134

213,134

213,134

00.0%

17,220604

3.8%

62.5% 10,764

0
5

0.0%

Fixed rent

12,760Composition

Variable rent

Dividend（Reference)

No. of properties

Operating revenue

Profitandloss

16th Period

71.1%

28.9%

16,050Composition

9,066

3,693

16,655Composition

64.5% 10,347

35.5%

5,703

Composition

62.2% 10,352

37.8%

6,303

37.5%

6,455

599

(1) The five HMJ hotels--increase in variable rent by
JPY311M(2) The six Accor hotels--increase in income frommanagement contracts, etc. by JPY168M
10.5%(3) The six the b hotels--increase in variable rent by
JPY36M(4) Other increases from revenue sharing, etc. by
JPY82M

NOI(*2)

11,002

13,736

14,343

14,646

607

4.4%

6.3%

6.4%

6.7%

6.9%

0.3%

4.4%

NOI
after depreciation
(*2)

8,597

10,86011,467

11,642

607

5.6%

5.0%

5.1%

5.4%

5.5%

0.3%

5.6%

Operating income

7,545

9,375

10,029

10,162654

7.0%

Net income

5,774

7,539

8,318

8,457

779

10.3%

Use of negative goodwill

240

13

13

13

0

0.0%

Total dividends

6,015

7,552

8,332

8,467

779

10.3%

No. of units issued

2,791,281

3,144,227

3,144,227

3,144,227

0

Dividend per unit (JPY)

2,155

2,402

2,650

2,693

248

0.0% (Reference) Comparing with the previous fiscal

period (15th period), the dividend per unit of

10.3% forecast this time increased by 23%.

(*1) For the assumptions of the latest annualized forecasts, please refer to "<Reference Materials 2> Assumptions of the forecast of the annualized effect" below.
(*2) Each is calculated using the following formula.
NOI (Net Operating Income) = Real estate operating revenue - Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets
NOI yield = NOI ÷ Acquisition price
NOI after depreciation = Real estate operating revenue - Real estate operating costs
NOI yield after depreciation = NOI after depreciation ÷ Acquisition price<Reference Materials 2> Assumptions of the forecast of the annualized effect(1) The operating revenue and operating expenses of the assets under management excluding Acquired Assets remain unchanged
from the “Assumptions of the operating forecast for the full year of the fiscal year ending December 31, 2015 (16th period)”
above.
(2) The fixed and variable rents for Okinawa Marriott Resort & Spa are calculated as follows:
Annual rent (¥1,000 million) = Fixed rent (¥550 million) + Variable rent
Variable rent = [(a) Hotel GOP − (b) GOP base amount] × 90.0%(millions of yen)

Full year

Hotel GOP(a)

GOP base amount(b)

Variable rent((a) − (b)) × 90.0%

1,200

700

450

(3) The variable rent for Mercure Yokosuka is assumed to be ¥184 million.
(4) The figures for the Acquired Assets are the forecasted annual figures calculated based on the information provided by thesellers, etc. For the revenue and other figures for the relevant period, please refer to “Acquired Assets” in “Assumptions of theoperating forecast for the full year of the fiscal year ending December 31, 2015 (16th period)” on page 12.
(5) For the fixed asset tax, city planning tax, and other taxes and public dues for the relevant period (for twelve month), it isassumed that ¥82 million will be recorded as expenses for the five the b hotels, ¥65 million for Hotel Francs, ¥39 million for
Mercure Yokosuka, and ¥68 million for Okinawa Marriott Resort & Spa.

－

15

－

<Reference Materials 3> Sales and GOP of the Five HMJ Hotels(1) Sales by hotel
Fiscal year ended
December 31, 2014
Sales of the Five HMJ Hotels
Results

Kobe Meriken Park
Oriental Hotel

Oriental Hotel tokyo bay

Namba Oriental Hotel

Hotel Nikko Alivila

Oriental Hotel Hiroshima

Total

Year-on-yearchangePrevious
forecast(millions of yen)
Fiscal year ending
December 31, 2015
First half:
Results
Comparison
Second half:
withYear-on-year
Forecast
previouschangeFull year:
forecast
Forecast

First half

2,424

0.4%

2,459

2,424

(1.5%)(0.0%)

Second half

2,798

0.1%

2,965

2,972

0.2%

6.2%

Full year

5,222

0.2%

5,425

5,395

(0.5%)

3.3%

First half

3,366

4.9%

3,305

3,395

2.7%

0.9%

Second half

3,844

(3.3%)

3,931

3,936

0.1%

2.4%

Full year

7,210

0.4%

7,236

7,331

1.3%

1.7%

First half

998

6.8%

1,039

1,189

14.4%

19.1%

Second half

1,151

10.9%

1,166

1,264

8.3%

9.8%

Full year

2,149

9.0%

2,205

2,452

11.2%

14.1%

First half

2,190

(0.1%)

2,316

2,377

2.7%

8.6%

Second half

3,301

3.7%

3,426

3,454

0.8%

4.6%

Full year

5,491

2.2%

5,741

5,831

1.6%

6.2%

First half

1,046

(0.0%)

1,039

991(4.6%)(5.2%)

Second half

1,178

(2.5%)

1,208

1,174

(2.9%)(0.3%)

Full year

2,223(1.4%)

2,248

2,165

(3.7%)(2.6%)First half

10,024

2.3%

10,158

10,376

2.1%

3.5%

Second half

12,272

0.6%

12,697

12,7990.8%

4.3%

Full year

22,296

1.4%

22,85523,1751.4%

3.9%(Note 1)

While the indicated figures are based on the data provided by the hotel lessees, please note that the figures have not undergone audit and otherprocedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and descriptions.

(Note 2)

Sales are rounded off to the nearest million yen. Year-on-year change is rounded off to one decimal place.

(2) Hotel GOP
Fiscal year ended
December 31, 2014
GOP of the Five HMJ Hotels
Results

Year-on-yearchangePrevious
forecast(millions of yen)
Fiscal year ending
December 31, 2015
Comparison
Forecast
withYear-on-year
this timepreviouschangeforecast

Total for the Five HMJ Hotels

6,302

2.4%

6,366

6,749

6.0%

7.1%

Ratio of GOP to sales

28.3%

0.3%

27.9%

29.1%

1.3%

0.9%

(Note 1)

While the indicated figures are based on the data provided by the hotel lessees, please note that the figures have not undergone audit and other(Note 2)

procedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and descriptions.
GOP is rounded off to the nearest million yen. Ratio of GOP to sales and year-on-year change are rounded off to one decimal place.

－

16

－

<Reference Materials 4> Sales and GOP of the Six Accor Hotels(1) Sales by hotel
Fiscal year ended
December 31, 2014
Sales of the Six Accor Hotels
Results

ibis Tokyo Shinjuku

ibis Styles Kyoto Station

ibis Styles Sapporo

Mercure Sapporo

Mercure Okinawa Naha

Mercure Yokosuka

Total

Year-on-yearchangePrevious
forecast(millions of yen)
Fiscal year ending
December 31, 2015
First half:
Results
Comparison
Second half:
withYear-on-year
Forecast
previouschangeFull year:
forecast
Forecast

First half

427

12.0%

443

453

2.2%

6.1%

Second half

445

7.5%

456

438

(4.0%)(1.6%)

Full year

872

9.6%

899

891

(0.9%)

2.2%

First half

305

(1.2%)

348

357

2.5%

17.1%

Second half

384

13.3%

401

426

6.2%

10.8%

Full year

690

6.3%

749

783

4.5%

13.6%

First half

397

2.3%

421

429

1.9%

7.9%

Second half

522

4.8%

534

568

6.3%

8.8%

Full year

920

3.7%

955

997

4.4%

8.4%

First half

425

5.5%

454

499

10.0%

17.5%

Second half

573

3.9%

623

645

3.6%

12.6%

Full year

998

4.6%

1,077

1,145

6.3%

14.7%

First half

363

28.0%

388

407

4.8%

12.1%

Second half

414

14.5%

429

442

2.9%

6.6%

Full year

778

20.5%

817

849

3.8%

9.1%

First half

545

3.7%

550

550

0.0%

1.0%

Second half

491

9.5%

470

471

0.1%

(4.1%)

Full year

1,036

6.4%

1,020

1,021

0.1%

(1.4%)First half

2,463

7.5%

2,604

2,696

3.5%

9.5%

Second half

2,829

8.3%

2,913

2,989

2.6%

5.6%

Full year

5,292

7.9%

5,518

5,685

3.0%

7.4%

(Note 1)

While the indicated figures are based on the data provided by the hotel lessees, please note that the figures have not undergone audit and other(Note 2)

procedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and descriptions.
Sales are rounded off to the nearest million yen. Year-on-year change is rounded off to one decimal place.

(2) Hotel GOP
Fiscal year ended
December 31, 2014
GOP of the Six Accor Hotels
Results

Year-on-yearchangePrevious
forecast(millions of yen)
Fiscal year ending
December 31, 2015
Comparison
withYear-on-year
Forecast
this timepreviouschangeforecast

Total for the Six Accor Hotels

2,075

15.6%

2,210

2,379

7.6%

14.6%

Ratio of GOP to sales

39.2%

2.6%

40.1%

41.8%

1.8%

2.6%

(Note 1)

While the indicated figures are based on the data provided by the hotel lessees, please note that the figures have not undergone audit and otherprocedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and descriptions.

(Note 2)

GOP is rounded off to the nearest million yen. Ratio of GOP to sales and year-on-year change are rounded off to one decimal place.

－

17

－

<Reference Materials 5> Sales and GOP of the Five the b Hotels(1) Sales by hotel
Fiscal year ended
December 31, 2014
Sales of the Five the b Hotels
Results

the b akasaka-mitsuke

the b ikebukuro

the b ochanomizu

the b hachioji

the b hakata

Total

Year-on-yearchangePrevious
forecast(millions of yen)
Fiscal year ending
December 31, 2015
First half:
Results
Comparison
Second half:
withYear-on-year
Forecast
previouschangeFull year:
forecast
Forecast

First half

131

(13.7%)

235

221(5.9%)

69.4%

Second half

213

94.9%

251

255

1.8%

19.8%

Full year

344

31.8%

486

476

(1.9%)

38.7%

First half

279

8.1%

309

301

(2.8%)

7.7%

Second half

283

4.6%

313

317

1.1%

11.8%

Full year

562

6.4%

622

617

(0.8%)

9.8%

First half

121

7.9%

134

132

(1.3%)

9.0%

Second half

124

1.6%

141

141

0.3%

13.5%

Full year

246

4.6%

275

273

(0.5%)

11.3%

First half

242

9.8%

261

267

2.0%

10.4%

Second half

256

0.9%

282

290

2.9%

13.4%

Full year

497

5.0%

543

557

2.5%

11.9%

First half

172

7.0%

177

191

7.9%

10.9%

Second half

191

8.7%

190

198

4.2%

3.6%

Full year

363

7.9%

366

388

6.0%

7.1%

First half

944

4.7%

1,116

1,111

(0.4%)

17.7%

Second half

1,067

14.6%

1,176

1,201

2.1%

12.5%

Full year

2,011

9.7%

2,292

2,312

0.9%

14.9%

(Note 1)

While the indicated figures are based on the data provided by the hotel lessees, please note that the figures have not undergone audit and otherprocedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and descriptions.

(Note 2)
(Note 3)

Sales are rounded off to the nearest million yen. Year-on-year change is rounded off to one decimal place.
The number of guest rooms of the b akasaka-mitsuke increased from 91 to 122 with the extension and refurbishment work conducted by the previous
owner having completed in April 2014. Accordingly, the number of guest rooms available for sale in the first half of 2015 and the first half of 2014
are not identical.

(2) Hotel GOP
Fiscal year ended
December 31, 2014
GOP of the Five the b Hotels

Year-on-yearchangePrevious
forecast

854

15.5%

1,029

1,049

1.9%

22.9%

42.4%

2.1%

44.9%

45.4%

0.5%

2.9%

Results
Total for the Five the b Hotels
Ratio of GOP to sales(millions of yen)
Fiscal year ending
December 31, 2015
Comparison
withYear-on-year
Forecast
this timepreviouschangeforecast(Note 1)

While the indicated figures are based on the data provided by the hotel lessees, please note that the figures have not undergone audit and otherprocedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and descriptions.

(Note 2)

GOP is rounded off to the nearest million yen. Ratio of GOP to sales and year-on-year change are rounded off to one decimal place.

－

18

－

3. Semi-annual financial statements(1) Semi-annual balance sheets(thousands of yen)
As ofDecember 31, 2014
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Income taxes receivable
Other current assets
Total current assets
Noncurrent assets
Property and equipment, at cost
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Net property and equipment
Intangible assets
SoftwareLeasehold rights in trust
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Security deposits
Leasehold and security deposits in trust
Long-term prepaid expenses
Derivative assets
Reserve for repairs and maintenanceTotal investments and other assets
Total noncurrent assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs
Total deferred assets
Total assets

－

19

－

As of
June 30, 2015

7,539,897
6,884,877
1,029,379
381,639428
3715,836,259

18,597,032
6,548,164
758,577
401,834
17,382
26,322,991

155,796(46,078)
109,718
1,041,932(478,692)
563,239*1 67,291,439(7,389,134)
59,902,304
736,632(119,147)
617,485
469,007(49,103)419,903
129,339(61,607)67,732
89,055,831
126
150,736,342

167,411(56,903)
110,507
1,136,909(561,460)
575,448*1 72,838,403(8,575,530)
64,262,873
760,041(141,893)
618,147
517,601(59,585)
458,016
129,339(65,615)
63,723109,077,947
175,166,664

57,421
19,774,039
10,968
19,842,429

55,53919,774,039
10,816
19,840,395

602,725
12,520158,323
803,747
4,834－
1,582,151
172,160,922

12,520158,323
983,324
16,775
41,637
1,212,581
196,219,641

55,62838,923
94,552
188,091,734

92,74933,200125,950
222,668,582

(thousands of yen)
As ofDecember 31, 2014
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Dividends payable
Deposits received
Total current liabilities
Long-term liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivative liabilities
Deferred tax liabilities
Total long-term liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Voluntary reserve
Dividend reserve
Total voluntary reserve
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains (losses) on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

－

20

－

As of
June 30, 2015

285,938－
11,825,132
400,390
1,210
290,174
651,652
10,7709,384
13,474,653

568,158
1,000,000
20,588,985
405,956605
135,332
717,186
16,285
149,132
23,581,640

6,000,000
63,264,603
2,041,916
2,608,901
358,752－
74,274,172
87,748,826

6,000,000
63,896,500
2,041,932
2,822,184
250,256
4,279
75,015,152
98,596,793

59,024,923

85,177,639

21,746,398

21,746,398

14,168,614
14,168,614
5,776,116
41,691,129
100,716,052

13,928,075
13,928,075
3,473,753
39,148,227
124,325,866(373,144)(373,144)*2 100,342,908
188,091,734(254,077)(254,077)*2 124,071,789
222,668,582

(2) Semi-annual statements of income(thousands of yen)
For the six months ended
June 30, 2014
Operating revenue
Real estate operating revenue
Other real estate operating revenue
Gain on sale of real estate properties
Gain on investment in silent partnership
Total operating revenue
Operating expenses
Real estate operating costs
Asset management fee
Asset custody fee
Administrative service fee
Directors’ compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Gain on forfeiture of unclaimed dividends
Gain on insurance claims
Interest on tax refunds
Gain on derivative instruments
Total non-operating income
Non-operating expenses
Interest expense
Interest expense on investment corporation bonds
Borrowing costs
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Loss on derivative instruments
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)－*1

For the six months ended
June 30, 2015

5,406,097
98,099*2 135,504,210*1

1,983,828
372,296
6,790
36,342
4,800
88,1662,492,224
3,011,985

*1,*3

*1

*1,*3

21

－

7,048,534
189,846
4,288
7,242,669*1

2,362,448
475,961
8,470
43,7674,800
89,9342,985,382
4,257,286

1,145
395
1,541

1,404
429
278
177
7,638
9,927

500,807
16,296228,660
3,929
17,528
10,761
33
778,018
2,235,508
2,235,508
605
605
2,234,903
1,236
2,236,140

452,549
26,692273,997
5,723
25,3119,981
45794,300
3,472,913
3,472,913
605
605
3,472,308
1,444
3,473,753

(3) Semi-annual statements of changes in net assets
For the six months ended June 30, 2014
(thousands of yen)
Unitholders’ equity
Surplus
Voluntary reserve

Unitholders’capitalCapitalsurplus

Unappropriatedretainedearnings(undisposed
loss)

Total
unitholders’equityTotal
surplusDividend
reserve

Total
voluntary
reserve

16,017,484

16,017,484

3,235,030

40,998,912

89,844,236(1,848,870)(1,848,870)

1,848,870--

Dividends paid

(5,082,663)(5,082,663)(5,082,663)

Net income

2,234,903

2,234,903

2,234,903

Balance, January 1, 2014

48,845,523

21,746,398

Changes of items during the period:
Reversal of dividend reserve

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2014

*1

-

-

(1,848,870)(1,848,870)(998,889)(2,847,759)(2,847,759)

48,845,323

21,746,398

14,168,614

14,168,614

2,236,140

38,151,152

86,996,476(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2014

(88,022)(88,022)89,756,213

Changes of items during the period:
Reversal of dividend reserve-

Dividends paid

(5,082,663)

Net income

2,234,903

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2014

(188,563)(188,563)(188,563)(188,563)(188,563)(3,036,323)(276,585)(276,585)

86,719,890

－

22

－

For the six months ended June 30, 2015
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1, 2015

59,024,923

Voluntary reserve
Capitalsurplus21,746,398

Dividend
reserve

Total
voluntary
reserve

14,168,614

14,168,614

Unappropriatedretainedearnings(undisposed
loss)
5,776,116

Total
unitholders’equityTotal
surplus41,691,129

100,716,052

Changes of items during the period:
Issuance of new investment units

26,152,715

26,152,715

Reversal of dividend reserve(240,538)

240,538--

Dividends paid

(6,015,210)(6,015,210)(6,015,210)

Net income

3,472,308

3,472,308

3,472,308

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2015

*1

26,152,715-(240,538)(240,538)(2,302,363)(2,542,901)

23,609,814

85,177,639

21,746,398

13,928,075

13,928,075

3,473,753

39,148,227

124,325,866(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2015

(373,144)(373,144)

100,342,908

Changes of items during the period:
Issuance of new investment units

26,152,715

Reversal of dividend reserve-

Dividends paid

(6,015,210)

Net income

3,472,308

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2015

(240,538)

119,066

119,066

119,066

119,066

119,066

23,728,880(254,077)(254,077)

124,071,789

－

23

－

(4) Semi-annual statements of cash flows(thousands of yen)
For the six months ended
June 30, 2014
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Loss on retirement of noncurrent assets
Loss on derivative instruments
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Gain on investment in silent partnership
Decrease in property and equipment in trust due to saleInterest income
Interest expense
Interest on tax refunds(Increase) decrease in operating accounts receivable(Increase) decrease in prepaid expenses(Increase) decrease in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Other – net
SubtotalInterest received
Interest paid
Interest received on tax refunds
Income taxes – refunded (paid)
Net cash provided by operating activities
Cash flows from investing activities
Proceeds from redemption of investment securities
Purchase of property and equipment in trust
Purchase of property and equipment
Purchase of intangible assets
Payments of reserve for repairs and maintenance
Proceeds from tenant leasehold and security deposits in trust
Reimbursements of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from investment corporation bonds
Proceeds from issuance of investment units
Payments for investment corporation bond issuance costs
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

24

－

For the six months ended
June 30, 2015

2,235,508
1,168,283
2,802
10,761
3,929
17,528683,986(1,145)517,103347,560(1,894)(122,856)(46,910)(46,197)(3,902)40,380
8,093(73,483)
3,960
4,743,510
1,145(528,082)(804)
4,215,769

3,472,913
1,327,987
1,654
2,343
5,723
25,311(4,288)(1,404)479,241(177)
270,801(20,195)(179,576)
141,956
16,558(154,842)
65,533
139,747(27,133)
5,562,156
1,404(489,668)
177(781)
5,073,288(574,707)(212,711)(72,900)(860,319)

607,013(25,510,606)(81,905)(25,572)(41,637)
223,49016(24,829,202)(2,669,150)
10,406,000(10,669,931)
2,000,000(16,570)(5,075,426)(6,025,078)(2,669,628)
12,553,289*1 9,883,660

1,000,000
14,400,000(5,004,250)
26,090,283(6,009,696)
30,476,337
10,720,422
14,424,774*1 25,145,197

(5) Notes on going concern assumption
Not applicable.

(6) Notes on matters concerning significant accounting policies
1.

Valuation standards
and valuation
method for assets

Securities, other securities, securities without market value.
Stated at cost being determined by the moving average method. Equity interest in silent partnership isstated at its net asset value corresponding to the equity interest in the silent partnership.

2.

Method ofdepreciation andamortization of
noncurrent assets(1) Property and equipment (including trust accounts)
Depreciation of property and equipment is calculated using the straight-line method. The useful
lives of major property and equipment components are as follows:
Machinery and equipment
2 to 12 years
Tools, furniture and fixtures
2 to 20 years
Buildings in trust
2 to 65 years
Structures in trust
2 to 65 years
Machinery and equipment in trust
4 to 35 years
Tools, furniture and fixtures in trust
2 to 29 years(2) Intangible assets
Intangible assets are amortized using the straight-line method. The amortization period of major
intangible assets is as follows.
Software (for internal use)
5 years as internally usable years(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method.

3.

Accounting fordeferred assets(1) Investment unit issuance costs
Investment unit issuance costs are amortized using the straight-line method over three years.
The issuance of new investment units through public offerings on January 27, 2015 and June 22,2015 was consummated under underwriting agreements in which underwriting securities companies
committed to purchase all of the investment units being offered at an issue value and selling them at
an offering price different from such issue value to general investors (the “spread method”).
No underwriting fees were paid by JHR under the spread method since the underwriters werecompensated by the underwriting spread, which amounted to ¥858,900 thousand for the six months
ended June 30, 2015 and ¥0 for the six months ended June 30, 2014, representing the difference
between the issue price and the issue value of all new investment units issued.
(2) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over therespective term of the bond.

4.

Standards forrecognition ofrevenues andexpenses

Treatment of property taxes and other taxes
For taxes imposed on properties under management such as property taxes, city planning taxes, anddepreciable asset taxes, the imposed amounts are allocated to the respective period and expensed as“Real estate operating costs.”
Cash paid for property taxes and city planning taxes to the transferor of real properties at acquisition is
not recorded as “Real estate operating costs” but capitalized as part of the acquisition cost of the relevant
property.
The amount of such taxes capitalized in the acquisition cost of real properties was ¥143,061 thousand forthe six months ended June 30, 2015 and ¥0 for the six months ended June 30, 2014.

－

25

－

5.

Method ofhedge accounting(1) Method of hedge accounting
Deferred hedge accounting is applied(2) Hedging instruments and hedged items
Hedging instruments
Interest rate swaps
Interest rate caps
Hedged items
Interest rates on loans payable(3) Hedging policy
JHR enters into certain derivative transactions in accordance with its financial policy in order tomanage risks, which is provided in the Articles of Incorporation.
(4) Method for assessing hedge effectiveness
JHR evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging
instruments and the hedged items and assessing the ratio between the changes.

6.

Scope of funds(cash and cash
equivalents)
in the semi-annual
statements ofcash flows

Cash and cash equivalents in the semi-annual statements of cash flows consist of cash on hand, cash intrust accounts, bank deposit and trust deposit, which can be withdrawn at any time, and short-term
investments with a maturity of three months or less when purchased, which can easily be converted to
cash and subject to minimal risk of change in value.

7.

Other
significant mattersserving as the basis
for preparing
semi-annual
financial statements(1) Accounting treatment of beneficial interests in trust with real estate, etc. as their assets
For trust beneficial interests in real estate, etc., all assets and liabilities held in trust accounts as well
as all income generated and expenses incurred from assets in trust are presented in theaccompanying semi-annual balance sheet and income statement accounts accordingly.
The following material items of the trust accounts recorded in the relevant accounts are presented
separately on the semi-annual balance sheets.
(a) Cash and deposits in trust(b) Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust; Construction in progress in trust(c) Leasehold rights in trust; Leasehold and security deposits in trust(d) Tenant leasehold and security deposits in trust(2) Accounting treatment of consumption taxes
Consumption taxes are excluded from the transaction amounts. However, non-deductible
consumption taxes on property and equipment are included in the cost of the respective period.

－

26

－

(7) Notes to semi-annual financial statements
Disclosure of notes on “securities” and “share of (profit) loss of entities accounted for using equity method” is omitted because
there is thought to be no large necessity for disclosure in the midterm financial report.

[Notes to semi-annual balance sheets]*1. Accumulated advanced depreciation of property and equipment deducted from acquisition costs due to government
subsidies received
As ofDecember 31, 2014
Buildings in trust

As ofJune 30, 2015¥24,921 thousand¥24,921 thousand*2. Minimum net assets as required by Article 67, paragraph 4 of the Investment Trusts Act
As ofDecember 31, 2014

As ofJune 30, 2015

¥50,000 thousand¥50,000 thousand[Notes to semi-annual statements of income]*1. Components of real estate operating revenue and real estate operating costs(thousands of yen)A.

For the six months ended
June 30, 2014

For the six months ended
June 30, 2015

Real estate operating revenue
Real estate operating revenue
Fixed rent
Variable rent
Income from management contracts

4,394,576
640,603
370,918

5,406,097

4,778,940
1,323,069
946,524

7,048,534

Other real estate operating revenue
Parking lots
Other incidental revenue
Utilities
Other

25,326
8,413
51,317
13,04198,09938,428
10,428120,580
20,409189,846

Total real estate operating revenue

5,504,197

B. Real estate operating costs
Real estate operating costs
Land lease and other rent expenses
Property taxes
Outsourcing expenses (Note)
Nonlife insurance
Depreciation and amortization
Loss on retirement of noncurrent assets
Repairs
Utilities
Trust fees
Other

231,569
401,595
81,99012,915
1,168,283
2,802
10,87752,703
18,9182,170

Total real estate operating costs
C.

Net real estate operating income(A－B)

1,983,828

7,238,381

231,617461,310
157,278
15,297
1,327,987
1,654
19,547
119,288
21,534
6,931

2,362,448

1,983,828

2,362,448

3,520,368

4,875,932(Note) Outsourcing expenses include management contract fees of ¥85,063 thousand for the midterm period ended June 30, 2015 and ¥31,724 thousand for themidterm period ended June 30, 2014.

－

27

－

*2. Components of gain (loss) on sale of real estate properties
For the six months ended
June 30, 2014

For the six months ended
June 30, 2015

Dormy Inn Namba
Proceeds from sale of properties¥700,000 thousand¥― thousand

Costs of sale of properties¥683,986 thousand¥― thousand

Other selling expenses¥16,000 thousand¥― thousand¥13 thousand¥― thousand

Gain (loss) on sale of real estate properties*3. Depreciation was expensed as follows:

For the six months ended
June 30, 2014
Property and equipment

For the six months ended
June 30, 2015

¥1,162,591 thousand¥1,318,277 thousand¥6,109 thousand¥9,710 thousand

Intangible assets[Notes to semi-annual statements of changes in net assets]
For the six months ended
June 30, 2014

For the six months ended
June 30, 2015

*1 Total number of investment units
authorized, and issued and outstanding
Total number of investment units authorized

20,000,000 units

20,000,000 units

Total number of investment units issued and outstanding

2,621,281 units

3,140,322 units[Notes to semi-annual statements of cash flows]*1. Relation of balance between cash and cash equivalents at end of period and the amount in semi-annual balance sheet
accounts
For the six months ended
June 30, 2014

For the six months ended
June 30, 2015

Cash and deposits¥4,403,416 thousand¥18,597,032 thousand

Cash and deposits in trust¥5,480,243 thousand¥6,548,164 thousand

Cash and cash equivalents¥9,883,660 thousand¥25,145,197 thousand[Notes on lease transactions]Operating leases (as lessor)
Minimum rental revenue under non-cancellable operating leases
As ofDecember 31, 2014

As ofJune 30, 2015

Due within one year

¥1,308,494 thousand¥1,786,403 thousand

Due after one year

¥6,161,012 thousand¥8,457,893 thousand

Total¥7,469,507 thousand¥10,224,297 thousand

－

28

－

[Notes on financial instruments]
Matters concerning fair value of financial instruments
Carrying amounts of financial instruments on the (semi-annual) balance sheets, their fair values, and the differences were as
follows. Financial instruments whose fair values are considered extremely difficult to measure are not included in the table.
See Note 2 below.
As of December 31, 2014
Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits(2) Cash and deposits in trust

7,539,897
6,884,877

7,539,897
6,884,877――

Total assets

14,424,774

14,424,774―(4) Current portion of long-term loans payable(5) Investment corporation bonds(6) Long-term loans payable

11,825,132
6,000,000
63,264,603

11,825,132
6,029,450
63,264,603―
29,450―Total liabilities

81,089,735

81,119,185

29,450(353,917)(353,917)―(7) Derivative transactions (*)
As of June 30, 2015

Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits(2) Cash and deposits in trust

18,597,032
6,548,164

18,597,032
6,548,164――

Total assets

25,145,197

25,145,197―(3) Short-term loans payable(4) Current portion of long-term loans payable(5) Investment corporation bonds(6) Long-term loans payable

1,000,000
20,588,985
6,000,000
63,896,500

1,000,000
20,588,985
6,020,300
63,896,500――
20,300―Total liabilities

91,485,485

91,505,785

20,300(233,480)(233,480)―(7) Derivative transactions (*)(*) Receivables and payables arising from derivative transactions are presented on a net basis and amounts in parenthesis denote net
payables.
(Note 1) Methods to measure fair value of financial instruments(1) Cash and deposits; (2) Cash and deposits in trust
The carrying value is deemed to approximate the fair value since the instruments are scheduled to be settled in a short periodof time.
(3) Short-term loans payable, (4) Current portion of long-term loans payable; (6) Long-term loans payable
The carrying value is deemed to approximate the fair value since the interest rate on long-term loans payable are floatinginterest rates which are revised periodically to reflect market interest rates.
(5) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(7) Derivative transactions
The information on the fair value of derivative transactions is presented in “Notes on derivative transactions.”(Note 2) Carrying amount of financial instruments whose fair values are considered extremely difficult to measure
As of
December 31, 2014

Classification
Investment securities

602,725(thousands of yen)
As ofJune 30, 2015―

Tenant leasehold and security deposits

2,041,916

2,041,932

Tenant leasehold and security deposits in trust

2,608,901

2,822,184

Total

5,253,542

4,864,116

－

29

－

Investment securities
Investment securities (equity investment in silent partnership) are not subject to fair value disclosure because they have nomarket price and their fair values are considered extremely difficult to measure.
Tenant leasehold and security deposits / Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits (in trust) are not subject to fair value disclosure because they have no market priceand their actual deposit periods from a tenant’s move-in to move-out are not estimable, thus making a reasonable estimate of
future cash flows difficult.

[Notes on derivative transactions]
1. Derivative transactions to which hedge accounting is not applied
As of December 31, 2014
The contract amount or the amount equivalent to the principal provided in the contract, etc. as of the account closing date ofderivative transactions to which hedge accounting is not applied was as follows:(thousands of yen)Classification

Type, etc. of
derivative transaction

Transactions
other thanmarkettransactions

Interest rate swaps(fixed rate payment,
floating rate receipt)

Contract amount, etc.
Of which, due
after one year
5,000,000

5,000,000

Fair value

Method to measure the fair value

The fair value is measured at the(37,252) quoted price, etc. obtained from thecounterparty financial institutions.

As of June 30, 2015
The contract amount or the amount equivalent to the principal provided in the contract, etc. as of the account closing date ofderivative transactions to which hedge accounting is not applied was as follows:(thousands of yen)Classification

Type, etc. of
derivative transaction

Transactions
other thanmarkettransactions

Interest rate swaps(fixed rate payment,
floating rate receipt)

Contract amount, etc.
Of which, due
after one year
5,000,000

5,000,000

Fair value

Method to measure the fair value

The fair value is measured at the(29,614) quoted price, etc. obtained from thecounterparty financial institutions.

2. Derivative transactions to which hedge accounting is applied
As of December 31, 2014
The contract amount or the amount equivalent to the principal provided in the contract, etc. as of the account closing date foreach method of hedge accounting of derivative transactions to which hedge accounting is applied was as follows:(thousands of yen)
Method ofhedge
accounting

DeferralmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

Interest rate swaps(fixed rate payment,
floating rate receipt)

Long-termloans payable

55,604,250

48,659,950

Interest rate caps

Long-termloans payable

9,413,500

9,413,500

Of which, due
after one year

Fair value

Method to measure
the fair value

The fair value is(321,499) measured at thequoted price, etc.
obtained from the
4,834 counterparty
financial institutions.

As of June 30, 2015
The contract amount or the amount equivalent to the principal provided in the contract, etc. as of the account closing date foreach method of hedge accounting of derivative transactions to which hedge accounting is applied was as follows:(thousands of yen)
Method ofhedge
accounting

DeferralmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

Interest rate swaps(fixed rate payment,
floating rate receipt)

Long-termloans payable

65,304,250

52,806,750

Interest rate caps

Long-termloans payable

9,413,500

5,134,500

Of which, due
after one year

－

30

－

Fair value

Method to measure
the fair value

The fair value is(207,397) measured at thequoted price, etc.
obtained from the
3,530 counterparty
financial institutions.

[Notes on asset retirement obligations]
For the year ended December 31, 2014
Not applicable.
For the six months ended June 30, 2015
Not applicable.

[Notes on segment and related information]
1. Segment information
The segment information has been omitted because JHR has only one segment, which is the investment and management ofhotel real estate.
2. Related information
For the six months ended June 30, 2014(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in asingle product/service category accounted for more than 90% of total operating revenue on the semi-annual statements
of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the semi-annual statements of income.
(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the semi-annual balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

2,170,638

Investment and management of hotel real estate

The Dai-ichi Building Co., Ltd.

934,200

Investment and management of hotel real estate

Kyoritsu Maintenance Co., Ltd.

578,739

Investment and management of hotel real estate

For the six months ended June 30, 2015(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in asingle product/service category accounted for more than 90% of total operating revenue on the semi-annual statements
of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the semi-annual statements of income.
(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the semi-annual balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

2,341,761

Investment and management of hotel real estate

AAPC Japan K.K.

1,067,501

Investment and management of hotel real estate

The Dai-ichi Building Co., Ltd.

934,200

Investment and management of hotel real estate

－

31

－

[Notes on rental properties, etc.]
JHR owns rental properties for hotels to earn lease income and income from management contracts. The carrying amounts,changes in such balances, and fair values of such properties were as follows:(thousands of yen)
For the year ended
December 31, 2014

Use

For the six months ended
June 30, 2015

Carrying amount

Hotel

Balance at beginning of period

155,753,667

169,847,788

Net increase (decrease) during period

14,094,120

24,417,110

Balance at end of period

169,847,788

194,264,899

205,408,000

246,324,000

Fair value at end of period(Note 1)

For a summary of the rental properties, please refer to “5. Reference information; (2) Assets under management; (C) Other major assets undermanagement; A. Summary of real estate properties under management” on page 42.

(Note 2)Carrying amount recognized in the (semi-annual) balance sheet is net of accumulated depreciation, if any, from acquisition price (including costs foracquisitions). Amounts for machinery and equipment, tools, furniture and fixtures, construction in progress in trust, and intangible assets other than

(Note 3)leasehold rights in trust and facility usage rights are not included.
With regards to net increase (decrease) during period, increase during the year ended December 31, 2014 principally represents the acquisition of ibis
Styles Sapporo (formerly Best Western Hotel Sapporo Nakajima Koen) for ¥6,868 million, Mercure Sapporo for ¥6,102 million and Mercure
Okinawa Naha for ¥3,009 million. Decrease during the year ended December 31, 2014 principally represents the sale of Dormy Inn Namba for ¥683
million. Increase during the six months ended June 30, 2015 principally represents the acquisition of the five the b hotels for ¥20,230 million, Hotel
Francs for ¥3,181 million and Mercure Yokosuka for ¥1,649 million.

(Note 4)

Fair value at end of period is generally the appraisal value determined by licensed real estate appraisers.

[Notes on per unit information]
Net assets per unit is as follows:
As of
December 31, 2014
Net assets per unit

As ofJune 30, 2015

¥35,948¥39,509

For the six months ended
June 30, 2014

For the six months ended
June 30, 2015

852

1,166

2,234,903

3,472,308――

Net income for midterm attributable to common investment units(JPY1000)

2,234,903

3,472,308

Average number of investment units during midterm period (units)

2,621,281

2,976,156

The basis of computation of net income per unit is as follows:

Net income per unit (JPY)[Basis of computation]
Net income for midterm (JPY1000)
Amount not attributable to common unitholders (JPY1000)(Note) Net income per unit for midterm is computed by dividing net income by the average number of investment units during the midterm period.
Diluted net income per unit is not presented since there are no potentially dilutive units.

－

32

－

[Notes on significant subsequent events]
1. Acquisition of asset
On July 10, 2015, JHR acquired Okinawa Marriott Resort & Spa.
Property name

Okinawa Marriott Resort & Spa

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

1490-1 Kise, Nago-shi, Okinawa

Acquisition dateJuly 10, 2015

SellerRising Sun The Second A TMK

Acquisition price (Note)¥14,950 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, etc., and consumption taxes.

2. Borrowing of funds
On July 10, 2015, JHR procured new borrowings as follows in order to partly fund the acquisition of the real estate
beneficial interest in trust and movable assets attached to the hotel as described above in “1. Acquisition of asset.”(1) Term Loan 13
LenderSumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd.

Amount of the loan

¥5,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.30%

Date of borrowing

July 10, 2015

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

March 31, 2016

Collateral

Unsecured/Unguaranteed(2) Term Loan 14
LenderAozora Bank, Ltd. / Mitsubishi UFJ Trust and Banking Corporation

Amount of the loan

¥1,500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.55%

Date of borrowing

July 10, 2015

Method of principal repayment

Lump-sum payment on the maturity date

Maturity dateJune 30, 2022

Collateral

Unsecured/Unguaranteed

3. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on June 4, 2015 and June 15, 2015. In
addition to the primary offering for which payment was completed by the end of the midterm period under review, payment
for the new investment units through third-party allotment was completed on July 23, 2015, and the investment units were
issued under the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥85,470,541,569, with
the number of investment units issued and outstanding totaling 3,144,227 units.
(a) Issuance of new investment units (third-party allotment)
Number of investment units issued:
3,905 units
Paid-in amount (issue value):¥75,007 per unit
Total paid-in amount (total issue value):¥292,902,335
Payment date:July 23, 2015
Allottee:
SMBC Nikko Securities Inc.
(b) Use of funds
The proceeds from the issuance of new investment units through third-party allotment of ¥292,902,335 will beallocated for cash on hand which will be appropriated for part of future acquisitions of specified assets, part of otherrepayment of loans, or capital expenditures to maintain or improve competitiveness of existing properties.
－

33

－

(8) Changes in total number of investment units issued and outstanding
The following is the status of increase (decrease) in the total number of investment units issued and outstanding andunitholders’ capital through to the end of the midterm period under review.
Total number ofinvestment units
Unitholders’ capitalissued and outstanding(JPY1M)
Date
Capital transaction
Note(Units)Increase
Increase
Balance
Balance(Decrease)(Decrease)
November 10, 2005

Incorporation through private placement

400

400

200

200

(Note 1)

June 13, 2006

Capital increase throughpublic offering of investment units

41,80042,20019,361

19,561(Note 2)

April 6, 2011

Capital increase throughthird-party allotment of investment units

15,831

58,031

3,599

23,161(Note 3)

April 1, 2012

Investment unit split

638,341

696,372－

23,161(Note 4)

April 1, 2012

Merger1,162,909

1,859,281－

23,161(Note 5)September 12, 2012

Capital increase throughpublic offering of investment units

240,000

2,099,281

4,855

28,017(Note 6)

October 11, 2012

Capital increase throughthird-party allotment of investment units

12,0002,111,281

242

28,260(Note 7)

April 17, 2013

Capital increase throughpublic offering of investment units

510,000

2,621,281

20,585

48,845(Note 8)September 9, 2014

Capital increase throughpublic offering of investment units

170,000

2,791,281

10,17959,024(Note 9)January 27, 2015

Capital increase throughpublic offering of investment units

200,000

2,991,281

14,97473,999(Note 10)February 18, 2015

Capital increase throughthird-party allotment of investment units

9,041

3,000,322

676

74,676(Note 11)

June 22, 2015

Capital increase throughpublic offering of investment units

140,000

3,140,322

10,50085,177(Note 12)(Note 1)
(Note 2)At the time of incorporation, investment units were issued with an issue price per unit of ¥500,000.
New investment units were issued through public offering with an issue price per unit of ¥480,000 (subscription price of ¥463,200) in order to(Note 3)

procure funds for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue price per unit of ¥227,400 in order to procure funds for the acquisition(Note 4)of new properties.
JHR conducted a 12-for-1 split of investment units.

(Note 5)

JHR (the former NHF) merged with Japan Hotel & Resort Inc. (the former JHR). The merger was an absorption-type merger pursuant to Article 147of the Investment Trusts Act where JHR is the surviving corporation and the former JHR is the absorbed corporation. Following this merger, 11(Note 6)

investment units of JHR after the split of investment units were delivered by allotment for each investment unit of the former JHR.
New investment units were issued through public offering with an issue price per unit of ¥20,990 (subscription price of ¥20,232) in order to procure(Note 7)

funds for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue price per unit of ¥20,232 in order to repay loans payable, etc.

(Note 8)New investment units were issued through public offering with an issue price per unit of ¥41,778 (subscription price of ¥40,363) in order to procure
funds for the acquisition of new properties, etc.

(Note 9)New investment units were issued through public offering with an issue price per unit of ¥61,912 (subscription price of ¥59,880) in order to procure
funds for the acquisition of new properties, etc.

(Note 10) New investment units were issued through public offering with an issue price per unit of ¥77,415 (subscription price of ¥74,874) in order to procure
funds for the acquisition of new properties, etc.
(Note 11) New investment units were issued through third-party allotment with an issue price per unit of ¥74,874 in order to procure funds for allocation to partof future acquisitions of specified assets, part of other repayment of loans, or capital expenditures to maintain or improve competitiveness of existing
properties.
(Note 12) New investment units were issued through public offering with an issue price per unit of ¥77,512 (subscription price of ¥75,007) in order to procure
funds for the acquisition of new properties, etc.

－

34

－

4. Changes in directors(1) Directors of JHR
The following are the directors of JHR as of the date of this report.
Title

Name

Major career
Apr. 1971
May 1973
Jul. 1976
Sep. 1978
Jun. 1982

Executive
Director

Yukio
Isa

Apr. 1985
Nov. 1989
Apr. 2001
Apr. 2012
Oct. 2014

Apr. 1966

Supervisory
Director

HiroshiMatsuzawaMay 1988
Dec. 1989
May 1991
Jan. 1993
Jun. 1995
Jul. 1999

Sep. 2001
May 2004
Apr. 2012

Joined JEOL Ltd.
Joined Kyoto City Tourism Association
Kyoto Convention Bureau
Joined Hyatt Hotels Singapore as Sales Manager
Regional Sales Manager
Joined Hyatt Hotels Chain Service Ltd. as Tokyo Branch Manager(Headquarter of Hyatt Hotels Marketing)Marketing Director
Transferred to Nihon Hyatt K.K. as Director
Director and Executive Vice President
Joined Japan Hotel REIT Investment Corporation as Executive
Director (current)
Joined Galaxy Entertainment Management Services (International)
Limited (formerly, Galaxy Entertainment Group Limited)
as Head of Japan (current)
Joined Sumitomo Mitsui Trust Bank, Limited (formerly, The Mitsui
Trust and Banking Co., Ltd.)
Branch Manager, Yokosuka Branch
Branch Manager, Umeda Branch
General Manager, Investment Advisory Department
General Manager, Pension Fund Management Department
Joined JDC Corporation and served as Managing Director
Joined Sumitomo Mitsui Trust Asset Management Co., Ltd.
(formerly, Chuo Mitsui Asset Management Co., Ltd.) as Managing
Director
Representative Director and President
Joined Premier Investment Corporation as Executive Officer
Joined Japan Hotel REIT Investment Corporation as Supervisory
Director (current)

－

35

－

Number ofinvestment
units held72

0

TitleName

Major career
Apr. 1993
Dec. 2000
Sep. 2002
Oct. 2002
Nov. 2003
Nov. 2005

Dec. 2005
Mar. 2007
Supervisory
Director

TetsuyaMishiku

Apr. 2008

Oct. 2008

Aug. 2010
Sep. 2010
Feb. 2011
Aug. 2011
Nov. 2014

Registered as a lawyer (Daiichi Tokyo Bar Association)
Joined Iinuma Law OfficePartnerPart-time lecturer at Chuo University
Member of “Study Group for Public IT Service Guideline” of
Ministry of Internal Affairs and Communications
Changed registration to Shizuoka Bar Association
Joined Aoba Law Office as Partner
Joined Japan Hotel REIT Investment Corporation (formerly, Nippon
Hotel Fund Investment Corporation) as Supervisory Director(current)
Joined A-too Co., Ltd. as Part-time Corporate Auditor
Joined Healing Entertainment Co., Ltd. as Part-time Corporate
Auditor (current)
Joined as entrusted candidate of examination committee for“ASP/SaaS Information Disclosure Certification System for Safety
and Reliability” of Foundation for MultiMedia Communications(current)
Joined as Member of “Council of ASP and SaaS Promotion for
Local Public Body” of Ministry of Internal Affairs andCommunications (current)
Joined Mishiku & Nagamachi Law Office (formerly, Aoi Tower
Law Office) as Representative (current)
Joined Koike Roof and Siding KK as Outside Corporate Auditor(current)
Joined “Rights of Cloud Service Users” of Ministry of Internal
Affairs and Communications as Vice Chairperson (current)
Joined A-too Co., Ltd. as Outside Director (current)
Joined as Member of “Information Disclosure and Personal
Information Protection Review board of Yaizu City” (current)

－

36

－

Number ofinvestment
units held0

(2) Directors of the Asset Management Company
The following are the directors of the Asset Management Company as of the date of this report.

Title

Name

Major career
Apr. 1982
Jan. 1984
Jul. 1990

Representative
Director andPresident

Hisashi
Furukawa

Apr. 2000

May 2004
Aug. 2013
Jun. 2014
Apr. 1986
Dec. 1998
Mar. 2001

Director

Shuya
MatsubaraJun. 2009
Apr. 2012
May 2013
Apr. 2014
Mar. 2015
Apr. 1999
Jul. 2002
Aug. 2003

Director

ToshitakaIshidoSep. 2006
Apr. 2007
Apr. 2012

Mar. 2013
Mar. 2015

Joined Sumitomo Realty & Development Co., Ltd.
Building Business Department
Seconded to its subsidiary in the U.S.
Joined Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
(formerly, Morgan Stanley Japan Limited) and served as Executive
Director of the Real Estate Group in the Investment Banking
Division
Joined UBS Securities Co., Ltd. (formerly, Warburg Dillon Read
(Japan) Limited) and served as Co-head and Executive Director of
the Real Estate Sector Team in the Corporate Finance Division
Joined Rockpoint Group, L.L.C. as Representative of Japan Officeand Principal
Established River Flows, Inc. as Representative Director
Joined Japan Hotel REIT Advisors Co., Ltd. as Representative
Director and President (current)
Joined The Hyakujushi Bank, Ltd. and served as Deputy Manager of
the International Affairs Department
Joined Deloitte Tohmatsu Consulting LLC as Manager of the
Financial Division
Joined Goldman Sachs Realty Japan, Ltd. and served as Director andJoint Group Leader of the Strategic Management Group in the
Acquisition Division
Joined Japan Hotel & Resort K.K. as Director (part-time)
Joined Japan Hotel REIT Advisors Co., Ltd. as Director (current)
and Senior General Manager of the Finance & Planning Department
Senior General Manager of the Finance & Accounting Division
Senior General Manager of the Finance & Accounting Division
General Manager of the Finance Department
Senior General Manager of the Finance & Planning Department
General Manager of the Finance & Planning Department (current)
Joined Value Management Institute, Inc.
Joined Hospitality Advisory Group of KPMG Business Advisory
LLC (Tokyo Branch)
Manager of the Hospitality Group of KPMG FAS Co., Ltd. (Tokyo
Branch of KPMG Business Advisory LLC was merged with KPMGFAS Co., Ltd.)
Joined Japan Hotel & Resort K.K. and served as Senior Manager
Director and Senior General Manager of Asset Management
Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Senior General
Manager of Investment Division and General Manager ofAcquisitions Department
Director (current)
Senior General Manager of Investment Division (current)

－

37

－

Number ofshares held

0

0

0

TitleName

Major career
Apr. 1995
Jan. 1998

Director

NoboruItabashiAug. 1999
Sep. 2006
Apr. 2007
Apr. 2012
Mar. 2015
Sep. 1994
Jun. 1997
Nov. 2001
Jul. 2002

Director

Hiroyuki
Aoki

Aug. 2005
Jan. 2008
Nov. 2011
Dec. 2011
Apr. 2012
Oct. 1987
Oct. 1991
Nov. 1992

Director

SuchadChiaranussati

Nov. 1998
Apr. 1999
Nov. 2004
May 2007Jun. 2007
May 2010
Aug. 2010

Number ofshares held

Joined Asahi Sangyo Kaisha, Ltd., Fabricated Metals Department
Joined British American Tobacco Japan, Ltd. (formerly, Rothmans
Japan), Finance Department
Joined Sun Microsystems K.K., Field Finance Division
Joined Japan Hotel & Resort K.K. and served as Senior Manager of
the Finance and Accounting Division
Senior General Manager of Operations Division
Joined Japan Hotel REIT Advisors Co., Ltd. as General Manager ofthe Accounting Department
Director, Senior General Manager of Operations Division & General
Manager of Accounting and Reporting Department (current)0

Joined Deloitte & Touche LLP, New York Office, Accounting &Audit Department
Joined Ingersoll-Rand Headquarters, Internal Audit Department
Joined KPMG Tax Corporation (formerly, Arthur Andersen LLP)
Joined Ripplewood Holdings LLC, Hotel Investment Group as Vice
President
Joined Creative Renovation Group Japan, Inc. as Vice President of
Finance
Joined Tokyo Venture Gear Co. Ltd. as Director
Appointed Representative Director of SC Capital Partners Japan Co.
Ltd. (formerly, RE Capital Services Japan Co., Ltd.) (current)
Appointed Statutory Auditor (part-time) of Japan Hotel & Resort
K.K.
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)0

Joined the Central Bank of Thailand, Foreign Exchange Reserve
Management Division
Joined Temasek Holdings (in Singapore) and served as Manager of
Direct Investment
Joined JP Morgan (in Singapore) and served as Vice President in theReal Estate Investment and Investment Banking Division
Appointed Advisor at the Central Bank of Thailand
Joined Westbrook in Singapore as Principal and Managing Director
responsible for Asian investment activities
Established Real Estate Capital Asia Partners, L.P.
Appointed Chairman of SCG Capital Partners II Limited (Generalpartner of Real Estate Capital Asia Partners II L.P.) (current)
Established Real Estate Capital Asia Partners II L.P.
Appointed Director of Rockrise Sdn Bhd as Director (current)
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

0

－

38

－

TitleName

Major career
May 1989

Director

Ian George
Winston
Lien

Jan. 2003
Oct. 2007
Aug. 2010
Mar. 1988
Apr. 1995
Jun. 2007

Director

Chua Keng
Kim

Nov. 2007
Sep. 2008
Aug. 2010
Apr. 1974
Oct. 1979
Mar. 1998
Apr. 2000

Auditor

ShigeoSekitaJan. 2002
Aug. 2005
Sep. 2010
Dec. 2010
Apr. 2012
Oct. 2013

Number ofshares held

Joined Starwood Hotels & Resort Worldwide, Inc. (formerly, Westin
Hotel Company)
Participated in the establishment of Octagon Capital Partners Pte
Ltd. (Co-founder)
Joined SC Management Ltd. as Managing Director
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)0

Joined Government of Singapore Investment Corporation (GIC)
Joined Rodamco PACIFIC B.V. / Rodamco Asia N.V. as Managing
Director and Head of Investment Management
Appointed independent Non-Executive Director and member of the
Audit Committee of Travelsky Technology Ltd
Participated in the establishment of Stonegate China Properties
Limited (Founder and CEO)
Joined SC Management Ltd. as Managing Director
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)0

Joined Daiwa Securities Co. Ltd.
Joined Mizuho Securities Co., Ltd. (formerly, Wako Securities Co.,
Ltd.)
Seconded to Wako International (Europe) Ltd. as President
Joined Mizuho Securities Co., Ltd. (corporation’s name changed due
to merger) (formerly, Shinko Securities Co., Ltd.) as Manager of the
IPO department
Joined WestLB Securities Inc. as Director of the Investment
Banking Group
Joined Credit Suisse Securities (Japan) Ltd. as Director of theStructured Investment Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Advisor
Representative Director
Corporate Auditor (part-time) (current)
Joined Alpha Japan Asset Advisors Ltd. as Compliance Manager(current)

0(Note) Based on the resolutions made at the Annual Shareholders’ Meeting held on March 20, 2015, Kazuyuki Udo resigned from office of Director, and Noboru
Itabashi newly took office of Director.

－

39

－

5. Reference information(1) Investment status
The following outlines the investment status of JHR as of the end of the midterm period under review.

Assetcategory

Hotel type
(Note 1)

Prefectural
location

As ofDecember 31, 2014
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)Nameibis Tokyo Shinjuku
the b ikebukuro
the b akasaka-mitsuke

Limited-service
hotel

Osaka
Hokkaido
Kyoto

Fukuokaestate
in
trust

-

-

6,582

3.0

-

-

6,299

2.8

2.6

4,882

2.2

Comfort Hotel Tokyo Higashi Nihombashi

3,689

2.0

3,673

1.6

-

-

2,644

1.2

the b ochanomizu

-

-

2,342

1.1

Smile Hotel Nihombashi Mitsukoshimae

2,056

1.1

2,048

0.9

R&B Hotel Ueno Hirokoji

1,760

0.9

1,753

0.8

R&B Hotel Higashi Nihonbashi

1,516

0.8

1,507

0.7

Hotel Vista Kamata Tokyo

1,467

0.8

1,484

0.7

Dormy Inn Suidobashi (Note 4)

1,065

0.6

1,234

0.6

Dormy Inn EXPRESS Asakusa

974

0.5

968

0.4

Chisun Inn Kamata

810

0.4

806

0.4

Namba Oriental Hotel

14,746

7.8

14,719

6.6

ibis Styles Sapporo

6,849

3.6

6,815

3.1

Mercure Sapporo

6,079

3.2

6,044

2.7

ibis Styles Kyoto Station

6,743

3.6

6,730

3.0

-

-

2,323

1.0

Hakata Nakasu Washington Hotel Plaza

2,072

1.1

2,087

0.9

1,520

0.8

1,509

0.7

Mercure Okinawa Naha

2,994

1.6

2,971

1.3

Kumamoto

Dormy Inn Kumamoto

2,268

1.2

2,249

1.0

Nara

Nara Washington Hotel Plaza

1,949

1.0

1,929

0.9

Niigata

Hotel Sunroute Niigata

1,967

1.0

1,977

0.9

Akita

Daiwa Roynet Hotel Akita

1,672

0.9

1,654

0.7

799

0.4

792

0.4

Subtotal

75,28440.0

95,40442.8

Oriental Hotel tokyo bay

18,80010.0

18,598

8.4

Comfort Hotel Shin-Yamaguchi

-

-

3,165

1.4

Kobe Meriken Park Oriental Hotel

10,171

5.4

10,0494.5

Hiroshima

Oriental Hotel Hiroshima

4,026

2.1

4,001

1.8

Kanagawa

Mercure Yokosuka

-

-

1,643

0.7

32,99917.5

37,45916.8

Hilton Tokyo Bay

26,18913.926,171

11.8

Hotel Nikko Alivila

18,4759.8

18,4388.3

The Beach Tower Okinawa

6,953

3.7

6,914

3.1

Hotel Keihan Universal City

6,085

3.2

6,053

2.7

Hyogo

Hotel Francs

Subtotal
Chiba

Resort hotel

3.3

Toyoko Inn Hakata-guchi Ekimae

Chiba

hotel

7,369

Okinawa

Yamaguchi

Full-service

3.9

4,893

the b hakata
Real

7,386

Hotel Sunroute Shinbashi

the b hachioji
Tokyo

As of
June 30, 2015
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)

Okinawa
Osaka
Kanagawa

Hakone Setsugetsuka

3,848

2.0

3,812

1.7

Subtotal

61,55332.7

61,390

27.6

Real estate in trust – Total

169,83790.3

194,25487.2

Equity interest in silent partnership (Note 5)

602

0.3

-

-

Deposits and other assets (Note 6)

17,651

9.4

28,413

12.8

－

40

－

Amount(JPY1M)

Ratio tototal assets(%)

Amount(JPY1M)

Ratio tototal assets(%)

Total assets

188,091

100.0

222,668

100.0

Total liabilities

87,74846.7

98,596

44.3

Total net assets

100,34253.3

124,071

55.7(Note 1)
(Note 2)

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
For real estate in trust, “Total amount held” shows the amount calculated by deducting accumulated depreciation from acquisition price (including(Note 3)

expenses incidental to acquisition).
“Ratio to total assets” shows the ratio of total amount of each asset held to total assets, rounded off to one decimal place.

(Note 4)(Note 5)(Note 6)

Dormy Inn Suidobashi terminated operations as a hotel on March 31, 2015. Furthermore, with the completion of the refurbishment work conducted inaccordance with the rebranding of the hotel, it started operations as a hotel under the name of the b suidobashi. In this report, the same shall apply
hereinafter.
Represents the equity interest in silent partnership with G.K. Tourism Japan No. 1 as a business operator.
Includes machinery and equipment, tools, furniture and fixtures, construction in progress in trust, and intangible assets (excluding leasehold rights intrust).

－

41－

(2) Assets under management(A) Major issues of investment securities
Not applicable.
(B) Real estate properties under management
Not applicable.
(C) Other major assets under management
A. Summary of real estate properties under management
The following summarizes the real estate properties under management by JHR as of the end of the midterm period underreview.
Details of property assets 1 (location, form of ownership, area, structural size, etc.)
Form of ownership(Note 1)
Property
No.

Name

1

Kobe Meriken Park
Oriental Hotel2

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

Area

Location

Acreage(m2)(Note 2)Land

Building

Chuo-ku,
Kobe-shi,
Hyogo

Leaseholdright(Note 7)Compartmentalized

Oriental Hoteltokyo bay

Urayasu-shi,
Chiba

Ownership

3

Namba
Oriental Hotel

Chuo-ku,
Osaka-shi,
Osaka

4

Hotel Nikko Alivila

5

Structures andstories
Total floor area
(Note 4)(m2)
(Note 3)

22,660.09(Note 7)

48,701.82(Note 7)S
14F

July 1995

319

Ownership

9,914.00

44,833.11

SRC/S/RC
B2/12FMay 1995

503

Ownership

Ownership

4,505.23

19,364.33

S/SRC
B1/9F

March 1996

257

Yomitan-son,
Nakagami-gun,
Okinawa

Ownership/
Leaseholdright(Note 8)

Ownership

65,850.05(Note 8)38,024.98(Note 8)SRC
B1/10F

April 1994

396

Oriental Hotel
Hiroshima

Naka-ku,
Hiroshima-shi,
Hiroshima

Ownership

Ownership

1,792.84

13,752.22

SRC
B2/23F

September 1993
Extended in
September 2006

227

6

ibis Tokyo Shinjuku

Nishi-Shinjuku,
Shinjuku-ku,
Tokyo

Ownership

Ownership

937.67

7,398.19

SRC/RC/S
B1/11F

September 1980

206

8

The Beach Tower
Okinawa

Chatan-cho,
Nakagami-gun,
Okinawa

Ownership

Ownership

10,242.00

20,140.01

SRC
24F

March 2004
Extended inJune 2005
Extended in
May 2006

280

9

HakoneSetsugetsuka

Hakone-machi,
Ashigarashimogun, Kanagawa

Ownership

Ownership

10,478.89

10,655.03

RC
B1/5F

October 2006

158

10

Dormy Inn
Kumamoto

Kumamoto-shi,
Kumamoto

Ownership

Ownership

1,295.85

7,701.19

SRC
13F

January 2008

294

12

Dormy Inn
Suidobashi

Hongo,
Bunkyo-ku,
Tokyo

Ownership

Ownership

723.86

3,097.25

SRC/RC
B1/8F

August 1986
Extended in
September 1989

99

13

Dormy Inn
EXPRESS Asakusa

Hanakawado,
Taito-ku,
Tokyo

Ownership

Ownership

287.66

2,006.51

SRC/RC
10F

March 1997

77

14

Hakata Nakasu
Washington Hotel
Plaza

Hakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

1,128.46

5,692.24

S
12F

March 1995

247

15

Nara
Washington Hotel
Plaza

Nara-shi,
Nara

Ownership

Ownership

2,322.28

5,385.82

S
7F

March 2000

204

16

R&B Hotel
Ueno Hirokoji

Ueno,
Taito-ku,
Tokyo

Ownership

Ownership

446.293,060.21

S
13F

April 2002

187

17

R&B Hotel
Higashi Nihonbashi

Ownership/
Leaseholdright

Ownership

507.83(Note 9)3,715.26

S
10F

March 1998

202

18

Comfort HotelTokyo Higashi
Nihombashi

Ownership

Ownership

823.67

5,765.26

S
11F

January 2008

259

HigashiNihonbashi,
Chuo-ku,Tokyo
Nihonbashibakurocho,
Chuo-ku,Tokyoownership(Note 7)

－

42

－

19

Comfort Hotel
Shin-Yamaguchi

Yamaguchi-shi,
Yamaguchi

Ownership

Ownership－

43

754.06－

3,002.15

S
8F

August 2007139Form of ownership(Note 1)
Property
No.

Name

21

Daiwa Roynet Hotel
Akita

22

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

Area

Location

Acreage(m2)(Note 2)

Structures andstories
Total floor area
2
(Note 4)(m )(Note 3)Land

Building

Akita-shi,
Akita

Ownership

Ownership

1,540.15

7,539.52

S
14F

June 2006

221

Smile Hotel
Nihombashi
Mitsukoshimae

NihonbashiHoncho,
Chuo-ku,Tokyo

Ownership

Ownership

512.583,097.85

SRC/RC
B1/10F

March 1997

164

23

Hotel Sunroute
Niigata

Chuo-ku,
Niigata-shi,
Niigata

Ownership

Ownership

1,402.51

8,328.84

S/SRC/RC
B1/14F

August 1992

231

24

Toyoko Inn
Hakata-guchi
EkimaeHakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

Main building: Main building: Main building:Main building
565.983,566.46
SRC 14F
and annex bothAnnex:
Annex:
Annex:
September 2001
SRC 9F152.37856.68257

25Hotel Vista
Kamata Tokyo

Nishikamata,Ota-ku,Tokyo

Ownership

Ownership

743.46

3,831.80

SRC/S
B1/9F

January 1992

106

26

Chisun Inn Kamata

Kamata,Ota-ku,Tokyo

Ownership

Ownership

240.35

1,499.87

SRC
12F

April 2003

70

29

Hotel Keihan
Universal City

Konohana-ku,
Osaka-shi,
Osaka

Ownership/
Leaseholdright(Note 10)(Note 10)3,350.14(Note 10)

17,252.71(Note 10)

S/SRC
21F

June 2001

330

30

Hotel Sunroute
Shinbashi

Shinbashi,
Minato-ku,
Tokyo

Ownership

Ownership

761.01

5,476.39

S/SRC
16F

March 2008

220

31

Hilton Tokyo Bay

Urayasu-shi,
Chiba

Ownership(Note 11)

Ownership(Note 11)

36,121.00(Note 11)

72,146.60(Note 11)

SRC
B1/11F

June 1988

818

32

ibis Styles
Kyoto Station

Minami-ku,
Kyoto-shi,
Kyoto

Ownership

Ownership

1,107.77

5,003.99

RC
10F

March 2009

215

33

ibis Styles Sapporo

Chuo-ku,
Sapporo-shi,
Hokkaido

Ownership

Ownership

2,515.22

14,992.49

RC
B1/16F

July 2010

278

34

Mercure Sapporo

Chuo-ku,
Sapporo-shi,
Hokkaido

Ownership

Ownership

2,016.27

16,145.79

S
B1/15F

April 2009

285

35

MercureOkinawa Naha

Naha-shi,
Okinawa

Ownership/
Leaseholdright

Ownership

2,860.69(Note 12)

10,884.25

RC
14F

August 2009

260

36

the b
akasaka-mitsuke

Akasaka,Minato-ku,
Tokyo

Ownership

Ownership

625.46

2,867.04

S
8F

November 2002

122

37

the b ikebukuro

Ownership

Ownership

718.715,650.01

SRC/S
B2/10F

June 1982

17538

the b ochanomizu

Ownership

Ownership

357.47

1,742.23

SRC
9F

August 199972

39

the b hachioji

Hachioji-shi,Tokyo

Ownership

Ownership

1,227.29

7,847.65

SRC
B2/12F

August 1986

196

40

the b hakata

Hakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

719.46

3,986.09

SRC
8F

September 1997

175

41

Hotel Francs

Mihama-ku,
Chiba-shi,
Chiba

Ownership

Ownership

4,828.00

19,213.39

SRC
B1/13F

August 1991

222

42

Mercure Yokosuka

Yokosuka-shi,
Kanagawa

Right of site(coownership)(Note 13)Compartmentalized
ownership

1,887.86(Note 13)

16,881.82(Note 13)

SRC/S
B3/21F

November 1993

160

Higashiikebukuro,
Toshima-ku,
Tokyo
Kandaawajicho,
Chiyoda-ku,
TokyoCompartmentalized
ownership(Note 13)

－

44

－

(Note 1)(Note 2)“Form of ownership” is the type of right held by the owner of the real estate that is the asset held (the trustee in the case of a real estate in trust).
“Acreage” is the area of the entire site based on the registration or registration record. The registration or registration record entry may not coincide(Note 3)

with the present state of the land.
“Total floor area” is the area of the building based on the registration or registration record. The area of the accessory building, if any, is included(Note 4)

unless otherwise stated. The registration or registration record entry may not coincide with the present state of the building.
Under “Structures and stories,” “S” means steel-framed building, “RC” means reinforced concrete building and “SRC” means steel reinforced(Note 5)concrete building.
“Building completion” is based on the registration or registration record.

(Note 6)

“Total number of guest rooms” is the respective number of guest rooms available for sale (excluding rooms occupied by the hotel for a long term) asof the date of this report.

(Note 7)The land of Kobe Meriken Park Oriental Hotel is land leased by JHR from the City of Kobe and land with permission for use from the City of Kobe
under the City of Kobe’s ordinance for harbor facilities, etc. The area of the land above is based on the value on the building confirmation application
form. The area of the land for which permission for use has been obtained is 2,804.18 square meters, of which 1,188.32 square meters is included in
the area of the land above. In addition, the building of Kobe Meriken Park Oriental Hotel is a building under compartmentalized ownership by twocompartmentalized owners (JHR and the City of Kobe). The figure above is the total floor area of the entire building under compartmentalized
ownership (including an accessory building of 764.83 square meters), where the portion owned exclusively by JHR (excluding an accessory buildingof 764.83 square meters) is 31,899.07 square meters, the portion owned exclusively by the City of Kobe is 13,960.11 square meters, and the portion
that is the common area of JHR and the City of Kobe is 2,077.81 square meters (JHR has 72.18% interest and the City of Kobe has 27.82% interest of
the common area). Furthermore, regarding the portion of the building owned exclusively by the City of Kobe, the area of the building for which JHR
has obtained the permission for use is 694.00 square meters (part of the building for which the permission for use was obtained was returned on April
1, 2010, resulting in the area of the building changing from 824.00 square meters to 694.00 square meters) and is included in the area of the building
above of 48,701.82 square meters.

(Note 8)The land of Hotel Nikko Alivila is land owned by JHR or land leased or subleased by JHR from Kabushiki Kaisha Okinawa Umi No Sono
(hereinafter referred to as the “Umi No Sono”). The area of the land above is the sum total of the area on the certified copy of the real estate registryof each land. Furthermore, the land leased or land subleased includes those where only a portion of a parcel of land is leased or subleased and, thus,
the area of the land above includes some area that is not leased or subleased by JHR from Umi No Sono. In addition, subdivision of part of thesubleased land resulted in the area of the land above changing from 67,038.05 square meters to 65,850.05 square meters on June 12, 2012. The sum
total of the area of the land of the land owned by JHR and the land leased or subleased calculated based on the certified copy of the real estate registry,lease contract with Umi No Sono, etc. is 57,406.26 square meters. The area of the building above includes an accessory building of 120.10 square
meters and excludes a building leased from Umi No Sono of 493.50 square meters.

(Note 9) Of this, the area of the land leased is 77.38 square meters.
(Note 10) The land of Hotel Keihan Universal City comprises land under co-ownership with other right holders (8,785.43 square meters) and land leased underquasi-co-ownership with other right holders from the City of Osaka (8,788.67 square meters). The acreage above is the sum total of JHR’s coownership interest of the land under co-ownership of 1,674.76 square meters (approximately 19.06% of co-ownership interest) and JHR’s quasi-coownership interest in the land leasehold right of the land leased from the City of Osaka of 1,675.38 square meters (approximately 19.06% of quasico-ownership interest). In addition, the building of Hotel Keihan Universal City is a building under compartmentalized ownership for Universal
CityWalk Osaka, which comprises two hotel buildings, business facilities, commercial facilities and others, as a single building (86,888.64 square
meters). The portion owned exclusively by JHR (including the common area by bylaws) is 15,749.32 square meters, and JHR’s co-ownership interestof the common area (15,648.98 square meters) is 3,466.56 square meters (approximately 22.15% of co-ownership interest). “Total floor area” in thetable above is the total floor area based on the completion drawing of new construction of Hotel Keihan.
(Note 11) The land of Hilton Tokyo Bay is land under co-ownership with other right holders. The acreage is the total area of the land under co-ownership. Of
the acreage, JHR’s co-ownership interest is 32,508.90 square meters (9/10 of co-ownership interest). In addition, the building of Hilton Tokyo Bay is
a building under co-ownership with other right holders. The total floor area is the total area of the building under co-ownership (including anaccessory building of 37.38 square meters). Of the total floor area, JHR’s co-ownership interest is 64,931.94 square meters (9/10 of co-ownershipinterest).
(Note 12) The acreage of Mercure Okinawa Naha includes land leased of 125.67 square meters.
(Note 13) The land of Mercure Yokosuka comprises the entire joint ownership of right of site. The acreage is the area equivalent to JHR’s co-ownership interestof the right to use the site (181,372/1,000,000) of the entire area of the subject land (10,408.79 square meters). In addition, the building is a building
under compartmentalized ownership for Bay Square Yokosuka Ichibankan, which comprises a hotel, a theater, stores, residential complex, officespaces and parking lots, as a single building (67,019.04 square meters). Total floor area is the area of the portion owned exclusively by the hotel on
the certified copy of the real estate registry.
(Note 14) The property numbers of assets that were transferred before the end of the previous fiscal year (No. 7, 11, 20, 27 and 28) are intentionally omitted.

－

45

－

Details of property assets 2 (acquisition price, etc.)

PropertyNo.

Name

Acquisition
price(JPY1M)(Note 2)Carrying
amountat end ofperiod(JPY1M)(Note 3)

Appraisalvalue
at end ofperiod(JPY1M)(Note 4)Upper-middle

10,90010,164

12,800

Grade(Note 1)

Investment
ratio
(%)
(Note 6)

Collateral(Note 7)J

5.5

Unsecured

Appraisal
agency(Note 5)

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

Mid-price

19,90018,76029,100J

10.0

Unsecured

3

Namba Oriental Hotel

Mid-price

15,00014,76922,000J

7.6

Unsecured

4

Hotel Nikko Alivila

Luxury18,90018,658

22,100J

9.5

Unsecured

5

Oriental Hotel Hiroshima

Upper-middle

4,100

4,035

4,150

J

2.1

Unsecured6

ibis Tokyo Shinjuku

Mid-price

7,243

7,424

8,430

J

3.7

Unsecured

8

The Beach Tower Okinawa

Mid-price

7,610

6,914

8,720

J

3.8

Unsecured

9

Hakone Setsugetsuka

Mid-price

4,070

3,822

4,490

J

2.1

Unsecured

10

Dormy Inn Kumamoto

Mid-price

2,334

2,249

2,830

M

1.2

Unsecured

12

Dormy Inn Suidobashi (Note 8)

Mid-price

1,120

1,234

1,670

J

0.6

Unsecured

13

Dormy Inn EXPRESS Asakusa

Economy

999

968

1,140

M

0.5

Unsecured

14

Hakata Nakasu Washington Hotel Plaza

Mid-price

2,130

2,089

3,110

J

1.1

Unsecured

15

Nara Washington Hotel Plaza

Mid-price

2,050

1,936

2,200

J

1.0

Unsecured16

R&B Hotel Ueno Hirokoji

Economy

1,720

1,753

1,700

M

0.9

Unsecured17

R&B Hotel Higashi Nihonbashi

Economy

1,534

1,507

1,890

M

0.8

Unsecured

18

Comfort Hotel Tokyo Higashi Nihombashi

Economy

3,746

3,673

4,830

M

1.9

Unsecured

19

Comfort Hotel Shin-Yamaguchi

Economy

866

792

834

M

0.4

Unsecured

21

Daiwa Roynet Hotel Akita

Economy

1,760

1,654

1,880

J

0.9

Unsecured

22

Smile Hotel Nihombashi Mitsukoshimae

Economy

2,108

2,048

2,680

M

1.1

Unsecured

23

Hotel Sunroute Niigata

Mid-price

2,105

1,977

1,930

M

1.1

Unsecured24

Toyoko Inn Hakata-guchi Ekimae

Economy

1,652

1,509

2,360

T

0.8

Unsecured

25

Hotel Vista Kamata Tokyo

Economy

1,512

1,484

1,700

T

0.8

Unsecured

26

Chisun Inn Kamata

Economy

823

811

1,070

T

0.4

Unsecured

29

Hotel Keihan Universal City

Mid-price

6,000

6,053

12,000R

3.0

Unsecured

30

Hotel Sunroute Shinbashi

Mid-price

4,800

4,882

6,750

D

2.4

Unsecured

31

Hilton Tokyo Bay

Luxury26,05026,171

32,100D

13.1

Unsecured32

ibis Styles Kyoto Station

Mid-price

6,600

6,751

7,460

D

3.3

Unsecured33

ibis Styles Sapporo

Mid-price

6,797

6,823

7,400

J

3.4

Unsecured34

Mercure Sapporo

Mid-price

6,000

6,056

6,720

J

3.0

Unsecured35

Mercure Okinawa Naha

Mid-price

3,000

2,991

4,000

J

1.5

Unsecured36

the b akasaka-mitsuke

Mid-price

6,250

6,308

6,420

J

3.2

Unsecured37

the b ikebukuro

Mid-price

6,520

6,585

6,790

J

3.3

Unsecured38

the b ochanomizu

Mid-price

2,320

2,346

2,480

J

1.2

Unsecured39

the b hachioji

Mid-price

2,610

2,649

2,740

J

1.3

Unsecured40

the b hakata

Mid-price

2,300

2,326

2,430

J

1.2

Unsecured

41

Hotel Francs

Mid-price

3,105

3,165

3,740

D

1.6

Unsecured42

Mercure Yokosuka

Mid-price

1,650

1,651

1,680

D

0.8

Unsecured

198,184

195,005

246,324

Total

－

46

－

100.0

(Note 1)

JHR categorizes hotels into the four classes “Luxury,” “Upper-middle,” “Mid-price” and “Economy” mainly from the perspective of average dailyrate, etc.

(Note 2)“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust or real estate purchase and saleagreement (consumption tax, local consumption tax and the acquisition expense such as broker’s fee are not included). The acceptance prices are(Note 3)indicated for the properties that have been accepted from the former JHR.
“Carrying amount at end of period” is the book value at the end of the midterm period under review, and includes not only the amounts for real estate(Note 4)in trust, but also machinery and equipment, tools, furniture and fixtures, construction in progress in trust, and intangible assets.
In general “appraisal value at end of period” is the appraisal value at the end of the midterm period under review as the date of appraisal, in
accordance with the asset valuation methods and standards provided in JHR’s Articles of Incorporation and the regulations set forth by The
Investment Trusts Association, Japan.

(Note 5)

Under “Appraisal agency,” the letters indicate the appraisers for the properties as follows:
M:
Morii Appraisal & Investment Consulting, Inc.
T:J:

The Tanizawa Sōgō Appraisal Co., Ltd.
Japan Real Estate Institute

R:
D:

Rich Appraisal Institute Co., Ltd.
DAIWA REAL ESTATE APPRAISAL CO., LTD.

(Note 6)

“Investment ratio” is the ratio of acquisition price of the respective asset held at the end of the midterm period under review to the total amount ofacquisition price of all assets held at the end of the midterm period under review, rounded off to one decimal place.

(Note 7)(Note 8)“Collateral” is whether or not a pledge has been established for the beneficial interest in trust.
Dormy Inn Suidobashi terminated operations as a hotel on March 31, 2015. Furthermore, with the completion of the refurbishment work conducted inaccordance with the rebranding of the hotel, it started operations as a hotel under the name of the b suidobashi. The grade of the hotel has changed
from economy to mid-price after the rebranding. In this report, the same shall apply hereinafter.

(Note 9)The property numbers of assets that were transferred before the end of the previous fiscal year (No. 7, 11, 20, 27 and 28) are intentionally omitted.

－

47

－

Details of property assets 3 (NOI, etc.)
PropertyNo.

Name

Real estate
operating revenue(JPY1000)

Rent type(Note 1)

NOI
(Note 2)
(JPY1000)

NOI after depreciation(Note 3)
(JPY1000)

1

Kobe Meriken Park Oriental Hotel

Variable/Fixed

407,923265,739

90,904

2

Oriental Hotel tokyo bay

Variable/Fixed

729,750

669,671426,980

3

Namba Oriental Hotel

Variable/Fixed

601,501

551,263

467,042

4

Hotel Nikko Alivila

Variable/Fixed

417,677

341,139

168,950

5

Oriental Hotel Hiroshima

6

ibis Tokyo Shinjuku

89

Variable/Fixed

185,393

161,629

126,721

Management contract

332,421230,172

200,919

The Beach Tower Okinawa

Fixed

255,506

234,038

174,625

Hakone Setsugetsuka

Fixed147,472

135,977

95,161

10

Dormy Inn Kumamoto

Fixed

97,23086,514

66,725

12

Dormy Inn Suidobashi (Note 4)

Fixed

42,00033,957

27,62913

Dormy Inn EXPRESS Asakusa

Fixed

31,997

27,62021,49014

Hakata Nakasu Washington Hotel Plaza (Note 5)

Fixed

120,000

111,000

98,00015

Nara Washington Hotel Plaza (Note 5)

Fixed

75,00067,00046,000

16

R&B Hotel Ueno Hirokoji

Fixed48,647

41,47935,12817

R&B Hotel Higashi Nihonbashi

Fixed61,10352,61443,96018

Comfort Hotel Tokyo Higashi Nihombashi

Fixed135,057

119,735

101,952

19

Comfort Hotel Shin-Yamaguchi

Fixed30,26425,61918,44821

Daiwa Roynet Hotel Akita (Note 5)

Fixed

69,00060,00043,00022

Smile Hotel Nihombashi Mitsukoshimae

Variable/Fixed

83,31075,56866,57823

Hotel Sunroute Niigata

Fixed

78,00070,54351,14424

Toyoko Inn Hakata-guchi Ekimae

Fixed70,51963,96253,26625

Hotel Vista Kamata Tokyo

Variable/Fixed

53,14245,64934,56026

Chisun Inn Kamata

Variable

33,21629,276

23,51029

Hotel Keihan Universal City

Variable/Fixed

513,117474,854433,065

30

Hotel Sunroute Shinbashi

Variable/Fixed

222,180

190,171

179,634

31

Hilton Tokyo Bay

Variable/Fixed

940,459784,729705,326

32

ibis Styles Kyoto Station

Management contract

203,786

179,846

164,067

33

ibis Styles Sapporo

Management contract

230,569

193,993

158,49334

Mercure Sapporo

Management contract

261,934

176,925

138,61235

Mercure Okinawa NahaManagement contract

160,322

132,628

107,85036

the b akasaka-mitsuke (Note 6)

Variable/Fixed

115,761

113,812

104,41737

the b ikebukuro (Note 6)

Variable/Fixed

146,443

143,872

130,52538

the b ochanomizu (Note 6)

Variable/Fixed

49,411

48,39744,22639

the b hachioji (Note 6)

Variable/Fixed

89,14887,127

77,21940

the b hakata (Note 6)

Variable/Fixed

64,09063,02455,76841

Hotel Francs (Note 7)

Fixed

79,55878,70963,33042

Mercure Yokosuka (Note 8)

Variable

Total

54,58135,541

28,6427,238,381

6,205,574

4,875,932(Note 1)

Under “Rent type,” “Fixed” is a property under a fixed rent structure, “Variable” is a property under a variable rent structure, “Management contract”
is a property under a management contract structure, and “Variable/Fixed” is a property under a combined fixed and variable rent structure.

(Note 2)
(Note 3)

NOI = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets
NOI after depreciation (net real estate operating income) = Real estate operating revenue − Real estate operating costs(Note 4)

For Dormy Inn Suidobashi, the contract was changed to a variable rent contract with Ishin Suidobashi Operations, K.K. as lessee on July 1, 2015. In
this report, the same shall apply hereinafter.

(Note 5)For Hakata Nakasu Washington Hotel Plaza, Nara Washington Hotel Plaza and Daiwa Roynet Hotel Akita, consent on disclosure of rent in units ofthousand yen has not been obtained from the lessor and is thus rounded down to the nearest million yen.

(Note 6)(Note 7)The b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata were acquired as of January 30, 2015.
Hotel Francs was acquired as of March 31, 2015.

(Note 8)(Note 9)Mercure Yokosuka was acquired as of April 2, 2015.
The property numbers of assets that were transferred before the end of the previous fiscal year (No. 7, 11, 20, 27 and 28) are intentionally omitted.

－

48

－

Details of property assets 4 (status of rent settings of major tenants)

Tenant name(Note 1)

Property nameBusiness
type

Contract
commencement date
Contract
expiration date

Leased area
(By hotel)

Leased area
(By tenant)(Note 2)

Ratio tototal
(Note 3)

April 1, 2012
December 31, 2019

32,663.90 m2

7.3%

645
(Note 7)

April 1, 2012
December 31, 201944,833.11 m2

10.1%

631
(Note 7)

April 1, 2012
December 31, 201919,364.33 m2

2
4.4% 148,638.54 m

Hotel Nikko
AlivilaApril 1, 2012
December 31, 201938,024.98 m2

8.6%

804
(Note 7)

Oriental Hotel
Hiroshima

April 1, 2012
December 31, 201913,752.22 m2

3.1%

341
(Note 7)

ibis
Tokyo Shinjuku

July 1, 2012
June 30, 2024

5,789.26 m2

1.3%

ibis Styles
Kyoto Station

October 31, 2013
October 30, 2018

4,628.32 m2

1.0%

December 27, 2014
December 27, 2019

14,076.45 m2

3.2%

September 30, 2014
September 29, 2029

12,888.36 m2

2.9%－(Note 8)

MercureOkinawa Naha

September 30, 2014
April 26, 2024

10,833.95 m2

2.4%－(Note 8)

MercureYokosuka

April 2, 2015
August 30, 2019

16,881.82 m2

3.8%－(Note 8)July 1, 2010
June 30, 2015

64,931.94 m2

14.6%

64,931.94 m2

14.6%

Total for major tenants

278,668.64 m2

62.7% 278,668.64 m2

62.7%

Total for entire portfolio

444,532.39 m2 100.0% 444,532.39 m2 100.0%

HotelManagement
Japan
Co., Ltd.
(Note 6)

Accor
(AAPC Japan
K.K.)

The Dai-ichi
Building
Co., Ltd.

Kobe
Meriken Park
Oriental Hotel
Oriental Hoteltokyo bay
Namba
Oriental Hotelibis Styles
SapporoMercureSapporoHiltonTokyo BayHotel

Ryokan/HotelReal estateleasing andmanagement

Ratio tototal
(Note 3)

Annual rent
(By hotel)(Note 4)
(JPY1M)
Fixed rent
(Note 5)
Variable rent

(Note 2)

33.4%

797
(Note 7)

Total annual rent
(By tenant)(Note 4)
(JPY1M)
Fixed rent
(Note 5)
Variable rent

3,221
(Note 7)－(Note 8)－(Note 8)2

65,098.16 m

14.6%

－
(Note 8)－(Note 8)1,872
(Note 9)1,872
(Note 9)

5,093
－
9,807
－

5,093
－
9,807
－

(Note 1)

The information on major tenants, which are those accounting for at least 10% of total leased area of the entire portfolio.

(Note 2)

Leased area is, of leasable area, the total area for which lease contracts have been concluded and which are actually leased. Under “Leased area,” inprinciple, leased area represents the leased area described in the lease contract of the building. For properties in which the leased area is not described(Note 3)in the lease contract, leased area shows the area described in the registration of the building.
Ratio to total is rounded off to one decimal place.

(Note 4)

The ratio of annual rent by hotel or by tenant may vary depending on the amount of variable rent and income from management contracts and is thus
not shown.

(Note 5)

Fixed rent is the amount arrived at when the monthly fixed rent income based on lease contracts between JHR and the major tenant (rent of thebuilding itself only, excluding common area maintenance charges and signage and parking usage fees; not factoring in any change in rent during the(Note 6)fiscal period under review) is multiplied by 12, excluding variable rent and income from management contracts.
HMJ falls under the category of interested party, etc. under the Investment Trusts Act and sponsor-related party as stipulated in the Asset Management(Note 7)Company’s company rule for transactions with sponsor-related persons.
For details of the variable rent arrangements for HMJ, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable(Note 8)rent, management contract or revenue sharing” on page 56.
Variable rent for Accor (AAPC Japan K.K.) means income from management contracts and variable rent. For details of the variable rent and income
from management contract arrangements, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent,
management contract or revenue sharing” on page 56.

(Note 9)The variable rent for The Dai-ichi Building Co., Ltd. is not disclosed as consent on disclosure has not been obtained from the tenant and thus
considered to be a case where disclosure cannot be made due to unavoidable circumstances. There is thus also no entry of the total for major tenants.

－

49

－

B. Income statements for individual real estate properties under management
The following are the individual income statements for real estate properties under management for the midterm period
under review (from January 1, 2015 to June 30, 2015).
Figures are rounded down to the nearest thousand yen in principle, but are otherwise noted if circumstances do not allow for
the figures to be stated in units of thousand yen. Income statement items that are not directly attributable to the property are
not included. In addition, the income statement amounts shown are on an accrual basis in principle, but are otherwise noted
if circumstances require the amounts to be shown on a cash basis.
Property No.

-

1

2

3

4

5

Property name

Portfolio total

Kobe
Meriken Park
Oriental Hotel

Oriental Hoteltokyo bay

Namba
Oriental Hotel

Hotel Nikko
AlivilaOriental Hotel
Hiroshima(A) Real estate operating revenue subtotal

7,238,381

407,923

729,750

601,501

417,677

185,393

Fixed rent

4,778,940

322,950

315,799

398,950

402,049

170,752

Variable rent

2,269,594

84,083413,950

202,551

15,627

14,641Other revenue

189,846

889

-

-

-

-

(B) Real estate operating costs subtotal

2,362,448

317,018

302,769

134,459

248,727

58,671

Land lease and other rent expenses

231,617

110,014--42,074-

Property taxes

461,310

28,34357,43448,55330,556

21,411

Outsourcing expenses

157,278

480

480

480

960

480

Nonlife insurance

15,297

1,729

1,657

688

1,226

565

Depreciation and amortization

1,327,987

174,834

242,690

82,595

172,160

34,908Loss on retirement of noncurrent assets

1,654

-

-

1,626

28

-

Other costs

167,301

1,617

506

516

1,720

1,305

(C) Net real estate operating income = (A) − (B)4,875,932

90,904426,980

467,042

168,950

126,721(Reference) Occupancy rate

99.9%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of lessees

115

1

1

1

1

1

Property No.

6

8

ibis
The Beach Tower
Tokyo Shinjuku
Okinawa(Note 1)

Property name

9

10

12

13

HakoneSetsugetsuka

Dormy Inn
Kumamoto

Dormy Inn
Suidobashi

Dormy Inn
EXPRESSAsakusa(A) Real estate operating revenue subtotal

332,421

255,506

147,472

97,23042,00031,997

Fixed rent

50,586

255,504

147,169

97,23042,00031,697

Variable rent

243,947

-

-

-

-

-

Other revenue

37,888

2

303

-

-

300

(B) Real estate operating costs subtotal

131,50280,88052,31130,504

14,37010,506

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

16,888

19,773

10,748

9,857

4,062

3,030

Outsourcing expenses

44,642

-

-

-

-

660

Nonlife insurance

329

674

341

239

112

67

Depreciation and amortization

29,25359,41240,816

19,789

6,328

6,129

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

40,388

1,019

405

618

3,867

619

(C) Net real estate operating income = (A) − (B)200,919

174,625

95,161

66,72527,62921,490(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of lessees

4

1

1

1

1

1

－

50

－

Property No.

14

15

Hakata Nakasu
Nara
Washington Hotel Washington Hotel
Plaza
Plaza
(Note 2)
(Note 2)

Property name

16

17

18

19

R&B Hotel
Ueno
Hirokoji

R&B Hotel
HigashiNihonbashi

Comfort HotelTokyo Higashi
Nihombashi

Comfort Hotel
Shin-Yamaguchi(A) Real estate operating revenue subtotal

120,000

75,00048,647

61,103135,057

30,264

Fixed rent

120,000

73,00048,252

61,103

129,454

29,963

Variable rent

-

-

-

-

-

-

Other revenue

0

1,000

394

-

5,602

300

(B) Real estate operating costs subtotal

21,00028,00013,51917,143

33,104

11,815Land lease and other rent expenses

-

-

-

2,700

-

-

Property taxes

6,000

6,000

5,886

4,334

13,2043,111

Outsourcing expenses

0

1,000

420

600

807

420

Nonlife insurance

0

0

92

116

224

78

Depreciation and amortization

13,00020,000

6,351

8,654

17,782

7,170

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

1,000

0

768

737

1,085

1,035

(C) Net real estate operating income = (A) − (B)98,00046,00035,12843,960101,952

18,448(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of lessees

1

2

1

1

2

1

Property No.

21

22

23

24

25

26

Property nameDaiwa Roynet
Hotel Akita(Note 2)

Smile Hotel
Nihombashi
Mitsukoshimae

Hotel Sunroute
Niigata

Toyoko Inn
Hakata-guchi
EkimaeHotel Vista
Kamata Tokyo

Chisun Inn
Kamata(A) Real estate operating revenue subtotal

69,00083,31078,00070,51953,142

33,216

Fixed rent

69,00067,20078,00070,51946,767-

Variable rent-

16,110

-

-

6,340

33,216

Other revenue

-

-

0

-

35

-

(B) Real estate operating costs subtotal

25,00016,732

26,855

17,252

18,581

9,706

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

5,000

6,184

5,384

5,249

6,060

2,356

Outsourcing expenses

1,000

600

1,020

540

600

540

Nonlife insurance

0

113

259

143

125

51

Depreciation and amortization

17,0008,990

19,398

10,695

11,0895,766

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

0

843

792

623

706

991

(C) Net real estate operating income = (A) − (B)43,00066,57851,14453,26634,56023,510(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of lessees

1

1

1

1

1

1

－

51

－

Property No.

29

30

31

32

33

34

Property name

Hotel Keihan
Universal City

Hotel Sunroute
Shinbashi

HiltonTokyo Bay

ibis Styles
Kyoto Station(Note 1)

ibis Styles
Sapporo(Note 1)

MercureSapporo(Note 1)

(A) Real estate operating revenue subtotal

513,117

222,180

940,459

203,786

230,569

261,934

Fixed rent

(Note 3)

141,133

934,200

21,167

13,13333,059Variable rent

(Note 3)64,463-

180,759

202,795

167,714

Other revenue(Note 3)

16,583

6,259

1,860

14,64061,160(B) Real estate operating costs subtotal

80,052

42,545

235,133

39,71972,075

123,322

Land lease and other rent expenses

10,555-

66,128---Property taxes

23,05012,523

68,900

9,003

9,138

12,116

Outsourcing expenses

2,474

2,355

14,04012,417

12,85027,390Nonlife insurance

704

181

1,886

221

484

530

Depreciation and amortization

41,78910,536

79,403

15,77935,50038,313

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

1,479

16,948

4,772

2,298

14,102

44,971(C) Net real estate operating income = (A) − (B)433,065

179,634

705,326

164,067

158,493

138,612(Reference) Occupancy rate

100.0%

100.0%

100.0%

100%

99.4%

97.5%

(Reference) Number of lessees

1

5

1

2

5

14

Property No.

35

36

37

38

39

40

Property nameMercureOkinawa Naha
(Note 1)the bakasaka-mitsuke(Note 4)the bikebukuro(Note 4)the bochanomizu(Note 4)the bhachioji(Note 4)the bhakata(Note 4)(A) Real estate operating revenue subtotal

160,322

115,761

146,443

49,41189,14864,090

Fixed rent

2,700

57,55991,514

29,12050,78036,061

Variable rent

152,206

58,201

53,612

20,11733,576

27,635

Other revenue

5,416

-

1,316

173

4,790

393

(B) Real estate operating costs subtotal

52,472

11,343

15,918

5,184

11,928

8,322

Land lease and other rent expenses

145

-

-

-

-

-

Property taxes

5,790

-

-

-

-

-

Outsourcing expenses

19,860

606

606

606

606

606

Nonlife insurance

336

112

196

59

213

111

Depreciation and amortization

24,778

9,394

13,347

4,170

9,907

7,256

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

1,561

1,230

1,767

348

1,201

348

(C) Net real estate operating income = (A) − (B)107,850

104,417130,525

44,226

77,21955,768(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of lessees

5

2

6

1

41

2

－

52

－

Property No.

41

42

Property name

Hotel Francs(Note 5)

MercureYokosuka(Note 6)(A) Real estate operating revenue subtotal

79,55854,581

Fixed rent

75,806-

Variable rent-

41,775

Other revenue

3,752

12,805(B) Real estate operating costs subtotal

16,22825,938Land lease and other rent expenses--

Property taxes--

Outsourcing expenses

454

4,572

Nonlife insurance

272

579

Depreciation and amortization

15,3796,898

Loss on retirement of noncurrent assets--

Other costs

121

13,886(C) Net real estate operating income = (A) − (B)63,33028,642(Reference) Occupancy rate

100.0%

100.0%(Reference) Number of lessees11(Note 1)

Variable rent includes income from management contracts. For overview of management contracts, please refer to “D. Overview of the hotel(Note 2)business; (1) Rent structures of hotels with variable rent, management contract or revenue sharing” on page 56.
Consent on disclosure of rent in units of thousand yen has not been obtained from the lessee and is thus rounded down to the nearest million yen.

(Note 3)

Rent income, etc. is not disclosed as consent on disclosure has not been obtained from the tenant with whom a lease contract has been concluded andthus considered to be a case where disclosure cannot be made due to unavoidable circumstances.

(Note 4)(Note 5)The b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata were acquired as of January 30, 2015.
Hotel Francs was acquired as of March 31, 2015.

(Note 6)(Note 7)

Mercure Yokosuka was acquired as of April 2, 2015.
The property numbers of assets that were transferred before the end of the previous fiscal year (No. 7, 11, 20, 27 and 28) are intentionally omitted.

－

53

－

C. Status of portfolio diversification
a. Diversification by hotel type
The total annual rent, the total of acquisition price and the investment ratio by the hotel type of the assets held at the endof the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Hotel type
(Note 2)
(Note 3)(Note 4)(Note 1)
(JPY1M)(JPY1M)(%)
Limited-service hotel

7,098

95,89948.4

Full-service hotel

3,678

39,65520.0

Resort hotel

4,971

62,630

31.6

Total

15,748198,184

100.0

b. Diversification by geographical area
The total annual rent, the total of acquisition price and the investment ratio by the geographical area of the assets held at
the end of the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Geographical area
(Note 2)
(Note 3)(Note 4)(Note 5)
(JPY1M)(JPY1M)(%)
Hokkaido

1,049

12,797

6.5

Tokyo

2,820

43,305

21.9

Kanto (excluding Tokyo)

4,282

54,775

27.6

Kansai

3,725

40,55020.5

Okinawa

2,362

29,510

14.9

Other

1,507

17,247

8.7

Total

15,748198,184

100.0

c. Diversification by hotel grade
The total annual rent, the total of acquisition price and the investment ratio by the hotel grade of the assets held at the endof the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Hotel grade(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
Luxury3,401

44,95022.7

Upper-middle

1,562

15,0007.6

Mid-price

9,582

121,51461.3

Economy

1,203

16,720

8.4

Total

15,748198,184

100.0

d. Diversification by building age
The total annual rent, the total of acquisition price and the investment ratio by the building age of the assets held at theend of the midterm period under review were as follows. The building age is the period from the date stated as the date of
new construction on the registration or registration record to the last day of June 2015:
Total annual rent
Acquisition priceInvestment ratio
Building age(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
Less than 5 years (inclusive)

533

6,797

3.4

More than 5 years,
less than 10 years (inclusive)

2,589

33,176

16.7

More than 10 years,
less than 20 years (inclusive)

3,843

50,36625.4

More than 20 years

8,783

107,84554.4

198,184

100.0

Total

15,748－54－

e. Diversification by remaining contract term
The total annual rent and the ratio of the total annual rent of the concerned properties to the total annual rent of all assets
held at the end of the period under review by the remaining contract term of the assets held at the end of the period underreview were as follows, where the remaining contract term is the period from the last day of June 2015 to the lease
contract expiration date:
Total annual rent
Ratio of total annual rent
Remaining contract term
(Note 2)to total(JPY1M)(%)
Less than 5 years (inclusive)

10,15864.5

More than 5 years,
less than 10 years (inclusive)

3,714

23.6

More than 10 years,
less than 20 years (inclusive)

1,876

11.9

―

―

15,748100.0More than 20 years
Total

f. Diversification by rent type
The total annual rent and the ratio of the total annual rent of the concerned properties to the total annual rent of all assets
held at the end of the period under review by the rent type of the assets held at the end of the midterm period under review
were as follows, where fixed rent refers to fixed rent contracts and variable rent, etc. refers to variable rent contracts andmanagement contracts:
Total annual rent
Ratio of total annual rent
Rent type(Note 2)to total(JPY1M)(%)
Fixed rent

9,807

62.3

Variable rent, etc.

5,941

37.7

Total

15,748100.0(Note 1)
(Note 2)

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
“Total annual rent” is the amount arrived at when the monthly rent income, etc. (rent of the building itself only, excluding signage andparking usage fees; not factoring in any change in rent during the fiscal period under review) of the assets under management at the endof the midterm period under review is multiplied by 12.
However, the assumptions of the total annual rent of the hotels with revenue sharing, with variable rent or operated under amanagement contract structure are as follows:
The Five HMJ Hotels

The amount of (i) the variable rent calculated based on actual GOP from January 1, 2015 to June30, 2015 and forecast GOP from July 1, 2015 to December 31, 2015, plus (ii) the amount arrived
at when the monthly fixed rent at the end of the midterm period under review is multiplied by 12

The Five Accor Hotels

The amount of (i) the total amount of income from management contracts actually generated in
the six-month period from January 1, 2015 to June 30, 2015 and income from management
contracts calculated based on forecast GOP from July 1, 2015 to December 31, 2015 for the hotel
portion, plus (ii) the amount arrived at when the monthly rent income, etc. of each tenant for theretail tenant portion at the end of the midterm period under review is multiplied by 12

Mercure Yokosuka

The amount of (i) the amount arrived at when the variable rent actually generated from April 2,2015 to June 30, 2015 is converted into the amount equivalent to a six-month period, plus (ii) the
variable rent calculated based on forecast GOP from July 1, 2015 to December 31, 2015

The Five the b Hotels

The amount of (i) the amount arrived at when the variable rent actually generated from January
30, 2015 to June 30, 2015 is converted into the amount equivalent to a six-month period, plus (ii)the amount of the variable rent calculated based on forecast GOP from July 1, 2015 to December
31, 2015, plus (iii) the amount arrived at when the monthly fixed rent at the end of the midterm
period under review is multiplied by 12

Hotel Vista Kamata Tokyo
Chisun Inn Kamata
Smile Hotel Nihombashi Mitsukoshimae
Hotel Keihan Universal City
Hotel Sunroute Shinbashi
Hilton Tokyo Bay(Note 3)(Note 4)(Note 5)The amount arrived at when the total amount of variable rent actually generated in the six-month
period from January 1, 2015 to June 30, 2015 is multiplied by 2
The amount of (i) the actual variable rent, plus (ii) the amount arrived at when the monthly fixed
rent at the end of the midterm period under review is multiplied by 12

For details of the contracts of the hotels with revenue sharing, with variable rent or operated under a management contract structure,please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract or revenue
sharing” on page 56.
“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust or real estatepurchase and sale agreement (consumption tax, local consumption tax and the acquisition expense such as broker’s fee are notincluded). The acceptance prices are indicated for the properties that have been accepted from the former JHR.
“Investment ratio” is the ratio of total acquisition price of the assets held at the end of the period under review that are of the respective
type to the total of acquisition price of all assets held at the end of the period under review, rounded off to one decimal place.
Tokyo means Tokyo metropolitan area. Kanto (excluding Tokyo) means Kanagawa, Chiba, Saitama, Ibaraki, Gunma, Tochigi and
Yamanashi prefectures. Kansai means Kyoto, Osaka, Shiga, Hyogo, Nara and Wakayama prefectures. Okinawa means Okinawa
prefecture.

－

55

－

D. Overview of the hotel business(1) Rent structures of hotels with variable rent, management contract or revenue sharing
Property
No.

The
Five
HMJ
HotelsThe Six
Accor
HotelsThe Six
the b
HotelsOther
hotelswithvariablerentorrevenuesharing

Name

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

3Namba Oriental Hotel

4

Hotel Nikko Alivila

5

Oriental Hotel Hiroshima

6

ibis Tokyo Shinjuku

32

ibis Styles Kyoto Station

33

ibis Styles Sapporo

34

Mercure Sapporo

35

Mercure Okinawa Naha

42

Mercure Yokosuka

12

the b suidobashi (Note 3)36

the b akasaka-mitsuke

37

the b ikebukuro38

the b ochanomizu

39

the b hachioji

40

the b hakata

22

Rent type

Method of calculating variable rent and income from management contracts

Variable/Fixed

When total GOP of the five HMJ hotels exceeds GOP base amount(set at ¥3,351 million / year), the amount arrived at when the amountexceeding GOP base amount is multiplied by 81.5%.
GOP base amount is set individually for each hotel for such purposes as
payment of variable rent from each hotel. The breakdown of GOP baseamount is presented below (Note 1).
Amount equivalent to GOP

Management
contract(Note 2)

Amount equivalent to GOP
Amount equivalent to GOP
Amount equivalent to GOP
Amount equivalent to GOP

VariableAmount linked to GOP

Variable/Fixed

Amount linked to GOP (Note 4)

Smile Hotel Nihombashi Mitsukoshimae

Fixed +
Revenue sharing

25

Hotel Vista Kamata Tokyo (Note 5)

Fixed +
Revenue sharing

26

Chisun Inn Kamata

29

Hotel Keihan Universal City

30

Hotel Sunroute Shinbashi

31

Hilton Tokyo Bay

Amount that is a certain percentage of sales exceeding the threshold(Note 4)
When the amount arrived at when total hotel sales from January 1 to
December 31 of every year is multiplied by 32.5% is greater than theamount arrived at when the monthly rent is multiplied by 12, the amountof difference
Amount that is the monthly GOP multiplied by 85%(¥0 if the amount is below ¥0).
Amount that is a certain percentage of sales exceeding the threshold(Note 4)
Amount that is a certain percentage of sales exceeding the threshold(Note 4)
Amount that is a certain percentage of sales exceeding the threshold(Note 4)(Note 1)

Fixed +
Revenue sharing
Fixed +
Revenue sharing
Fixed +
Revenue sharing

Breakdown of the GOP base amount set individually for the five HMJ hotels
Hotel name

Annual GOP base amount

Kobe Meriken Park Oriental Hotel¥599,900 thousand

Oriental Hotel tokyo bay¥693,200 thousand

Namba Oriental Hotel¥832,200 thousand

Hotel Nikko Alivila¥995,700 thousand

Oriental Hotel Hiroshima¥230,000 thousand

Total(Note 2)

Variable¥3,351,000 thousand

The management contract structure is a structure for hotel real estate owned by JHR in which JHR entrusts an operator to operate the hotel andtakes in the outcome of that business as real estate operating revenue. Specifically, JHR, the owner of the hotel real estate, concludes amanagement contract with an operator and entrusts the operator with the tasks necessary to run the hotel business. JHR receives the hotelrevenue achieved from the hotel business (operation) by the operator and, at the same time, pays a management fee to the operator. This hotelrevenue achieved is recognized as “real estate operating revenue through management contract” and is equivalent to the rent that is the real

(Note 3)

estate operating revenue under the leasing structure.
On July 1, 2015, Dormy Inn Suidobashi was changed to a variable rent contract with Ishin Suidobashi Operations, K.K. as lessee and started(Note 4)operations as a hotel under the name of the b suidobashi. In this report, the same shall apply hereinafter.
The detailed content of the contract is not disclosed as consent on disclosure has not been obtained from the lessee.

(Note 5)

Hotel Vista Kamata Tokyo underwent a contract change on July 1, 2015. When total hotel sales from January 1 to December 31 of every year
(however, from July 1 to December 31 in the case of 2015) exceeds ¥270 million (however, ¥270 million × Actual number of days from July 1
to December 31 ÷ 365 days in the case of 2015), the amount arrived at when the amount exceeding that is multiplied by 32.5% is received asrevenue sharing in addition to fixed rent.

－

56

－

(2) Major indicators of the hotel business
The following tables indicate the figures related to the hotel business of the five HMJ hotels, the six Accor hotels and the six
the b hotels for the operating period from January 1, 2015 through June 30, 2015, based on the data provided by the hotel
lessees.
(a) The Five HMJ Hotels
Kobe
Meriken Park
Oriental Hotel
Ratio to
total
sales
(%)

Oriental Hoteltokyo bay

Namba
Oriental Hotel

Ratio to
total
sales
(%)

Hotel Nikko
AlivilaRatio to
total
sales
(%)

Oriental Hotel
Hiroshima

Ratio to
total
sales
(%)

Total/Average

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

80.0%

－

97.0%

－

93.0%

－

83.2%

－

76.8%

－

87.3%

－

ADR

15,028－18,149－14,964－

19,317

－

8,452

－

16,222－

RevPAR

12,023－

17,609－13,919－16,067

－

6,488

－

14,163－

Total sales

2,424

100.0

3,395

100.0

1,189

100.0

2,377

100.0

991

100.0

10,376

100.0

765

31.5

1,766

52.0

713

60.0

1,271

53.5

293

29.6

4,808

46.3

1,502

62.0

1,396

41.1

84

7.0

892

37.5

662

66.8

4,537

43.7

48

2.0

－

－

－

－

175

7.3

－

－

223

2.1

30

1.2

125

3.7

370

31.1

1

0.0

11

1.1

537

5.2

79

3.2

108

3.2

22

1.8

38

1.6

24

2.4

270

2.6

403

16.6

855

25.2

665

55.9

517

21.7

133

13.4

2,572

24.8

Rooms
department
Food &
beveragedepartment
Product sales
department
Tenantdepartment
Other
departments
GOP(Note 1)

ADR: Represents average daily rate, which is calculated by dividing total rooms revenue for a certain period (excluding service charges) by the(Note 2)

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 rooms revenue for a certain period (excluding service
charges) by the total number of rooms available for sale during the period. Revenue per available room equals the product of ADR andoccupancy rate. The same shall apply hereinafter.

(Note 3)(Note 4)The occupancy rate is rounded off to one decimal place, while ADR and RevPAR are rounded off to single units. Sales and GOP are rounded
off to the nearest million yen. For the ratio to total sales, the ratio of sales in each department to total sales is rounded off to one decimal place.
The same shall apply hereinafter.
While the indicators of the hotels are among the indicators that show the operating status of the rooms departments, they do not necessarily
represent the operating revenue and the ability to bear rent, etc. of the respective hotels, as the daily rates and profit margins, etc. of therespective rooms available for sale are not uniform, among other reasons. As such, the indicators are no more than the reference figures. The
same shall apply hereinafter.

－

57

－

(b) The Six Accor Hotels
ibisTokyo Shinjuku

ibis Styles
Kyoto Station

Ratio to
total
sales
(%)

ibis Styles
SapporoRatio to
total
sales
(%)

MercureSapporoRatio to
total
sales
(%)

MercureOkinawa Naha

Ratio to
total
sales
(%)

MercureYokosuka

Ratio to
total
sales
(%)

Total/Average

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

92.1%

－

87.4%

－

84.6%

－

74.3%

－

78.7%

－

92.8%

－

83.9%

ADR

11,846

－

9,678

－

8,102

－

10,234

－

9,088

－

11,610－9,953

RevPAR

10,907

－

8,461

－

6,857

－

7,602

－

7,156

－

10,775－

8,350

Total sales

453

100.0

357

100.0

429

100.0

499

100.0

407

100.0

550

100.0

2,696

100.0

405

89.4

329

92.2

345

80.5

392

78.5

334

82.1

312

56.7

2,117

78.6

37

8.1

25

7.0

72

16.9

103

20.6

59

14.6

225

40.9

521

19.3

11

2.5

3

0.8

11

2.7

5

0.9

13

3.3

13

2.4

57

2.1

244

53.9

181

50.6

203

47.3

167

33.4

160

39.3

136

24.8

1,090

40.5

Rooms
department
Food &
beveragedepartment
Other
departments
GOP(Note)For Total/Average, figures calculated by JHR are indicated as no figures have been provided by the hotel operators or hotel lessees.

(c) The Six the b Hotels
the bsuidobashi

the bakasaka-mitsuke

Ratio to
total
sales
(%)

the b
ikebukuro

Ratio to
total
sales
(%)

the b
ochanomizu

Ratio to
total
sales
(%)

the b
hachioji

Ratio to
total
sales
(%)

the b
hakataRatio to
total
sales
(%)

Total/Average

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

－%

－

88.3%

－

90.4%

－

92.5%

－

88.4%

－

94.5%

－

90.7%

－

ADR

－

－

11,238－

10,331－

10,909

－

6,922

－

6,294

－

8,659

－

RevPAR

－

－

9,920

－

9,336

－

10,089

－

6,117

－

5,947

－

7,852

－

Total sales

－

－

221

100.0

301

100.0

132

100.0

267

100.0

191

100.0

1,111

100.0

－

－

219

99.0

296

98.4

131

99.4

217

81.4

188

98.8

1,052

94.6

－

－

－

－

－

－

－

－

48

17.9

－

－

48

4.3

－

－

2

1.0

5

1.6

1

0.6

2

0.7

2

1.2

12

1.1

－

－

125

56.5

148

49.3

61

46.2

87

32.6

80

41.7

501

45.1

Occupancy rate

Rooms
department
Food &
beveragedepartment
Other
departments
GOP(Note 1)For the b suidobashi, there is no figure available for disclosure for the operating period ended June 30, 2015 as no data exist for the period(Note 2)

before July 1, 2015.
For Total/Average, figures calculated by JHR are indicated as no figures have been provided by the hotel lessees. Furthermore, the figures
represent the total and average of the five the b hotels, or the six the b hotels excluding the b suidobashi.

－

58

－

E. Status of capital expenditures
a. Planned capital expenditures (Note)
The following table shows major estimated capital expenditures for renovation work during the fiscal period under review
planned as of the end of the midterm period under review for real estate properties under management by JHR. The
estimated construction costs below include the portion expensed in accounting. Capital expenditures are expected to total¥1,130 million for the second half and, in aggregate with the capital expenditures for the first half, capital expenditures are
expected to total ¥1,780 million for the full year.
Estimated construction costs(JPY1M)
Name of property, etc.
PurposeScheduled period
Payment Total(Location)
Total
for the amountamountperiodpaid
ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)

Replacement of piping

From August 2015
to November 2015

90

―

―

Hilton Tokyo Bay(Urayasu-shi, Chiba)

Replacement of kitchen and guest room piping

From February 2015
to December 2015

54

22

22

144

22

22

Total

(Note) For new construction and renewal work, estimated construction costs include those for buildings, attached facilities, etc. as well as items classified asfurniture and fixtures. The scheduled period of the above planned repair work and whether or not the repair work will be performed may change.

b. Capital expenditures during the period (Note)
For real estate properties under management by JHR, major construction work conducted during the midterm period underreview that represents capital expenditures is as below. Capital expenditures for the midterm period under review totaled¥649 million, and repair expenses that were accounted for as expense in the fiscal period under review totaled ¥19 million.
In aggregate, ¥669 million of construction work was carried out.
Name of property, etc.
(Location)

Purpose

PeriodConstruction costs(JPY1M)

Dormy Inn Suidobashi(Bunkyo-ku, Tokyo)

Replacement of air conditioning units

From April 2015
to June 2015

55

Dormy Inn Suidobashi(Bunkyo-ku, Tokyo)

Renewal in association with re-branding

From April 2015
to June 2015

60

Total

207

(Note) For new construction and renewal work, construction costs include those for buildings, attached facilities, etc. as well as items classified as furniture andfixtures.

－59－