This is a summary English language version of the original Japanese Asset Management Reportavailable on our Website.

However, no assurance or warranties are given with respect to theaccuracy or completeness of this summary English language version.

The Japanese original shallprevail in the case of any discrepancies between this summary English language version and theJapanese original.

Invincible Investment Corporation
Asset Management Report
Fiscal Period ended December 31, 2014 (July 1, 2014 to December 31, 2014)
Contents
Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation
and President & CEO of Consonant Investment Management Co., Ltd.
Summary of Financial Results
Significant Growth of AUM and DPU
Performance of Existing 20 Hotel Properties Solid Fundamentals for Hospitality Sector
Continuous Improvement of Financial Condition
External Growth from Sponsor Support – HotelI.

Asset Management Report

II.

Balance Sheet

III.

Statement of Income

IV.

Statement of Unitholders’ Equity

V.

Notes

VI.

Statement of Cash Distribution

VII.

Audited Report

VIII.

Statement of Cash Flows (Reference Information)

Global Offering & Historical Unit Price‐ Steady Expansion of Market Capitalization and Asset Size
Portfolio Data
Newly Acquired 3 Hotels (acquired on February 6, 2015)
Information for Unitholders-1-Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation
and President & CEO of Consonant Investment Management Co., Ltd.
It is my pleasure to take this opportunity to express my sincere gratitude to all investors of Invincible
Investment Corporation (“INV”) for your ongoing support.
We hereby provide you with a report on INV’s asset management and financial results for the 23rd
period (covering the period from July 1, 2014 to December 31, 2014).
First, with respect to the operation of our properties, we acquired 18 limited service hotels throughthe issuance of investment units via a global public offering in July 2014 to establish a portfolio thatrealizes both growth and stability in rent revenue from a well-positioned set of hotel and residential
assets.
With respect to the financial operations, we borrowed a new JPY 57.3 billion syndicated loan at alower interest rate than that of existing loans in order to fund the acquisition of the new properties
and prepay existing loans.
For the reporting period ended December 2014, INV achieved strong earnings growth due to the
expansion of assets and the robust performance from the acquired 20 hotels. Net income increasedby 117.1% to JPY 1,958 million from JPY 901 million in the previous period, and DPU (distribution
per unit) increased to JPY 733, 27.9% higher than the previous period (JPY 573) and 22.2% higher
than the forecast (JPY 600) announced in August 2014.

The market capitalization as of February

27, 2015 was JPY 142.24 billion and we achieved our mid-term market capitalization target of JPY
100 billion announced in February 2014 in a short period of time.
After the implementation of the public offering, we continue to seek additional acquisitions oflimited service hotels, and acquired two hotels from the sponsor’s pipeline and one hotel from athird-party on February 6, 2015.

As these acquisitions were completed using cash-on-hand andnew loans without issuing new investment units, the annual DPU for 2015 is expected to increase to
JPY 1,571, a 10.5% increase from the previous forecast (JPY 1,422).
We will continue to generate external growth through the acquisition of high quality assets withstable revenue and upside potential for rent by mainly utilizing the pipeline of the Fortress Group,
INV’s sponsor. As for internal growth, we continue to seek rent increases and further improvementin profitability by strengthening revenue management for hotel assets, rent increase for residential
assets and minimizing leasing costs.

As for the financial management, we aim to obtain an external-2-credit rating and refinance existing debt with unsecured loans, as well as work on the further
reduction of borrowing costs, diversifying loan durations and fixing portions of the interest expenseof the loans.
We seek to continue maximizing unitholders’ value by increasing the net income per unit and DPU,
which have steadily increased since the inception of the sponsorship from the Fortress Group, by
realizing continued external and internal growth as well as further improvements in the financial
operations as stated above.
We look forward to receiving the continued support of all of our unitholders.
Naoki Fukuda
Executive Officer, Invincible Investment Corporation
President and Representative Director, Consonant Investment Management Co. Ltd
FixedDistributions

The 23rd fiscal period(the fiscal period ended
December 2014)

Per investment unit JPY 733

Forecast
Distributions

The 24th fiscal period(the fiscal period ending June2015)

Per investment unit JPY 712

Forecast
Distributions

The 25th fiscal period(the fiscal period ending
December 2015)

Per investment unit JPY 859(Note)

The forward-looking statements, forecasts and goals mentioned above are based on available information,
assumptions and estimates as of February 25, 2015. These assumptions and estimates are unavoidably
uncertain, and could be affected by various risks and factors beyond INV’s control. Thus, no guarantee
can be made regarding the realization of such future forecasts and targets, and actual results may varysignificantly.

-3-

Summary of Financial Results

Period fromJanuary 1, 2013 toJune 30, 2013

Period from
July 1, 2013 to
December 31, 2013

Period fromJanuary 1, 2014 toJune 30, 2014

Period from
July 1, 2014 toDecember 31, 2014

Operating Revenue(Thousands of yen)

2,760,177

2,740,449

3,775,772

4,610,717

Ordinary Income(Thousands of yen)

335,683

353,360

902,420

1,958,607

Net Income(Thousands of yen)

335,078

352,755

901,815

1,958,002

Net Assets(Thousands of yen)

32,848,02

35,844,824

36,373,796

61,392,392

Total Assets(Thousands of yen)

80,249,063

79,176,632

79,261,754

130,477,232

Net Assets per Unit
(Yen)

24,36322,78523,121

23,005Net Assets/Total Assets
(%)

40.9

45.3

45.9

47.1

Distribution per Unit
(Yen)

264

237

573

733

Number of Units Issued(Unit)

1,348,292

1,573,179

1,573,179

2,668,686(Note)

Figures are rounded down to the indicated unit and percentages are rounded to one decimal place.
However, “Net Assets per Unit” are rounded to the nearest yen.

(Note)

Figures are rounded down to the indicated unit and percentages are rounded to one decimal place.

-4-Significant Growth of AUM and DPU■ The total assets under management (AUM) showed the substantial growth of 70.0% to JPY
131.188 billion, after acquiring the three new hotels for JPY 13.261 billion in February 2015,
from JPY 77.161 billion as of December 2013. The current portfolio consists of 94 properties,
expanding the composition of hotel properties to 44.7% as of February 2015 from 7.0% as ofJune 2014.
■ The estimated portfolio NOI yield increased to 6.0% from 5.2% of actual result in 1H 2013.

As of the end of Dec. 2013

As of the end of Jun. 2014

Growth of Earning and Dividends
Robust performance from the existing 20 hotels and the recent acquisition of three hotels resulted ina substantial increase in DPU-5-

As of the end of Dec. 2014
(Note 1)
(Note 2)
(Note 3)As of Feb. 6, 2015

NOI Yield and NOI Yield after Depreciation is calculated based on the estimated figures in 2015
The calculation includes the estimated NOI in 2015 and the average unit price between January 5, 2015
and January 30, 2015.
Acquisition price basis-6-Performance of Existing 20 Hotel Properties■ The existing 20 hotels acquired in May and July 2014 exhibited robust performance with room
occupancy rate (Occ) up 2.3 points, ADR up 14.9% and RevPAR up 17.9% for 2H 2014 versus
2H 2013. The solid performance has been continuing in January 2015.
■ The share of overseas sales expanded to 22.7% in 2H 2014 from 4.5% in 2H 2013, resulting fromcontinuing inbound visitors to Japan and the strategic initiatives to attract inbound demand by thehotel operator. Expanded to 28.4% in January 2015.
■ The number of international visitors to Japan in 2014 reached a record level of 13.41 million, up
29.4% from the previous year, and also increased 29.1% in January 2015.
Occ (1) / ADR (1) / RevPAR (1) Growth

Overseas Sales Share (2)Actual in 2H 2014 vs 2H 2013

Actual in 2H 2014 vs 2H 2013

(from July to December)(from July to December)

GOP Growth (3)International Visitors in Japan by Region

Actual in 2H 2014 vs 2H 2013

Actual in 2014

(from July to December)(from January to December)(4)-7-

(Note 1)(Note 2)
(Note 3)(Note 4)(Note 5)

Room Occupancy Rate is calculated using the following formula:
Room Occupancy Rate = Total number of rooms occupied during the relevant period ÷ (Aggregate
number of rooms available during the relevant period x Number of business days during the relevant
period)ADR, or Average Daily Rate, is the total room sales for a certain period (excluding service fees) divided
by the total number of rooms sold for the same period
RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by
the aggregate number of rooms available for the same period (rooms x number of business days), and is
the same figure as that of a product of room occupancy rate multiplied by ADR.
Overseas sales is amount through overseas web agents
GOP is calculated using the following formula; Gross Revenue from hotel operation – Operating
Expenses related to hotel operation (personnel, materials, utilities and advertising expenses)
Jan. – Oct. are provisional figures, while Nov. and Dec. are the preliminary figures estimated by JNTO
Compared with the same month of the previous year (January 2014)-8-

Solid Fundamentals for Hospitality Sector■ The influx of inbound visitors to Japan has been fueled by government and tourism industry led
initiatives to promote tourism such as airport capacity expansion, the growth of LCC’s, and therelaxation of visa requirements.
■ Cumulative guest nights of inbound visitors through September in 2014 show significant
double-digit increases in major regional prefectures such as Hokkaido, Kanagawa, Aichi andFukuoka as well as Tokyo, Osaka and Kyoto.
■ New hotel supply remains low with less concern about about the supply-demand balance.
LCC Market Share in Major Airports (1)Infrastructure Project in Japan

Source:Narita International Airport, KansaiInternational Airport and Central Japan
International Airport(Note 1) Based on the number of flights of summer
schedule per week in each year

Inbound Visitors to Japan

Relaxation of Visa Requirements

Source: Japan National Tourist Organization
Source: Ministry of Foreign Affairs of Japan(Note) Country name in red character represents top 5
countries in terms of increase Japan of inboundvisitors to Japan-9-

Hotel New Construction Starts

Cumulative Guest Nights of InboundVisitors (YoY)(1)

Source: Ministry of Land, Infrastructure and Transport
and Tourism (MLIT)
Source: Japan Tourism Agency(Note 1) The numbers in the brackets show increase
compared with the same period of theprevious year (Jan. to Sep. 2013)- 10 -

Continuous Improvement of Financial Condition■ The new acquisition with lower loan LTV and an uplift of appraisal values for the existing

portfolio reduced the REIT LTV from 59.0% in June 2013 to 51.4%(1) in June 2015
■ DSCR improved to 9.9x in the December 2014 period from 3.6x in the June 2014 period, due

to the substantial increase in revenues from the 20 existing hotel properties, and is forecast to
be approximately 9x in the June 2015 period and the December 2015 period
LTV (Appraisal Basis)

Average Interest Rate (2)DSCR (3)(Note 1)
(Note 2)
(Note 3)(Note 4)

Calculated based on the appraisal value as of the end of December 2014 for the ninety-one properties
including the twenty hotels, and based on the appraisal value as of December 1, 2014 for the new three
hotels. LTV calculation assumes repayment of JPY 321 million, corresponding to the consumption tax.
The average interest rate is calculated using the following formula; ( the loan amount outstanding at eachfiscal period * applicable interest rate at each fiscal period end ) ÷ The loan amount outstanding at eachfiscal period
DSCR is calculated using the following formula; (Operating Income + Depreciation Expenses) ÷(Contract Prepayment Amount + Interest Amount)
The appraisal value for ninety-one properties is as of the end of December, 2014 and the appraisal value
for the three new properties is as of December 1, 2014

Breakdown of Lenders

As of the end of Jun. 2013

As of Feb. 6, 2015

- 11 -

External Growth from Sponsor Support – Hotel■ MOU entered into on June 23, 2014 provides a potential pipeline of additional 22 hotel properties
from Sponsor‐related entities.
■ Acquired Hotel Nets Hakodate and Flexstay Inn Shirogane from the MOU pipeline, which stillhas 20 hotels with 3,326 rooms.

(Note 1)
(Note 2)
(Note 3)

Hotel MyStays Yokohama Kannai is under construction. Hotel MyStays Akasaka is currently being
redeveloped.
The above represents the properties covered by amended MOU. Invincible may elect to acquire only aselected number from the above or none at all.
Rendering is a conceptual drawing based on design drawing and there is a potential difference with actual
building.

- 12 -

Asset Management ReportⅠ.

Overview of Asset Management
1

Trends in Investment Corporation’s Operating Results

By Period

Calculated period

Operating revenues(Note 1) (Thousands of yen)

Operating Results(Rental revenues)(Thousands of yen)

Operating expenses(Thousands of yen)

(Property-related expenses)(Thousands of yen)

Operating income(Thousands of yen)

Ordinary income(Thousands of yen)

Net income(Thousands of yen)

Total assets(a) (Thousands of yen)(change from last period)
Asset Condition

Interest-bearing debt
Net assets(change from last period)(Thousands of yen)(b) (Thousands of yen)

Dividend Status

21st

22nd

23rd

Fiscal Period

Fiscal Period

Fiscal Period

Fiscal Period

Fiscal Period

Jul. 1, 2012 toJan. 1, 2013 toJul. 1, 2013 toJan. 1, 2014

toJul. 1, 2014 toDec. 31, 2012

Jun. 30, 2013

Dec. 31, 2013

Jun. 30, 2014

Dec. 31, 2014

2,476,430

2,760,177

2,740,449

3,775,772

4,610,717

2,476,430

2,760,177

2,740,449

2,772,419

4,610,717

1,392,258

1,528,940

1,474,679

1,541,127

1,840,796

1,156,672

1,295,403

1,261,221

1,281,791

1,586,854

1,084,171

1,231,237

1,265,770

2,243,644

2,769,920

114,784

335,683

353,360

902,420

1,958,607

114,179

335,078

352,755

901,815

1,958,002

80,200,022
18.5

80,249,063
0.1

79,176,632(1.3)

79,261,754
0.1

130,477,232
64.6

43,982,500

43,851,500

41,310,000

41,000,850

67,260,000

32,670,697(0.5)

32,848,025
0.5

35,844,824
9.1

36,373,796
1.5

61,392,392
68.8

26,134,396

26,134,396

29,134,389

29,134,389

53,096,413

157,750

355,949

372,843

901,431

1,956,146

137.6

106.0

105.7

100.0

99:9

1,348,292

1,348,292

1,573,179

1,573,179

2,668,686

24,231

24,36322,78523,121

23,005

117

264

237

573

733

117

264

237

573

733

(%)
(Thousands of yen)

Total distribution(c) (Thousands of yen)

Number of investment units

20th

(%)

Total contribution

Dividend payout ratio

19th(Note 2) (%)(d) (Note 3) (Units)

Issued and outstanding
Information per Unit

Net assets per unit(b) / (d) (yen)Distribution per unit(c) / (d) (yen)(Profit distribution per unit)(yen)(Excess profit distribution per unit)(yen)

Financial Measures

Return on assets(Note 4) (%)(change over year)
Return on equity(Note 4) (%)(change over year)- 13 -

—

—

—

—

—

0.2

0.4

0.4

1.1

1.9

0.3

0.8

0.9

2.3

3.7

0.3

1.0

1.0

2.5

4.0

0.7

2.1

2.0

5.0

7.9

Capital ratio(change from last period)
NOI

40.7

(b) / (a) (Note 4) (%)(%)(Note 4) (Thousands of yen)

40. 9

45.3

45.9

47.1

(7.8)

0.2

4.3

0.6

(1.2)

1,800,380

2,008,413

2,006,648

2,018,542

3,861,122(Net Operating Income)(Note 1) Consumption taxes etc. are not included in operating income.
(Note 2) Dividend payout ratio is calculated by dividing profit distribution by unit by net incomethat period. However, for the period after the 21st Fiscal Period, it is calculated by dividing thetotal profit distribution amount by net income.
(Note 3) Distribution by unit is rounded to the nearest unit.
(Note 4) Published benchmarks are calculated as below, and ratios are rounded to one decimal
place.
Return on Assets = Ordinary Income / (Total Assets at Start of Reporting Period + Total Assets at
End of Reporting Period) / 2 x 100
Return on Equity = Net Income this period / (Net Assets at Start of Reporting Period + Net Assets at
End of Reporting Period) / 2 x 100
Capital Ratio = Net Assets at End of Reporting Period /Total Assets at End of Reporting Period x
100
Rental NOI = Rental Revenues – Leasing Costs + Fiscal Period Depreciation Expenses
2

Operating Conditions(1)

Main trends in the Investment Corporation

INV was established in January 2002 in accordance with the Investment Trust and Investment
Corporation Act (Act No. 198 of 1951, as amended; hereinafter referred to as the “Investment TrustAct”). In May 2004, INV was listed on the Osaka Securities Exchange (application for delisting was
made in August 2007), and in August 2006 was listed on the Real Estate Investment and Trust
Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).
In addition, a merger with LCP Investment Corporation (“LCP”) was implemented on February 1,
2010.
Ever since the commencement of sponsorship from Calliope Godo Kaisha (“Calliope”), an affiliate ofFortress Investment Group LLC (“FIG” and together with Calliope and other affiliates of FIG, the“Fortress Group”) in July 2011, INV has been focused on the improvement of its properties’ occupancy
rates, the reduction of expenditures and strengthening its asset management capabilities. Furthermore,in September 2012, INV newly acquired 24 residential properties without issuing new equity thereby
improving earnings and distributions per unit through external growth.
Moreover, in December 2013, INV refinanced existing bank borrowings with new borrowings- 14 -

arranged by Sumitomo Mitsui Banking Corporation (“SMBC”) and The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (“BTMU”) together with funds raised via third-party allotment mainly to the Fortress Group.
This marked the first lending to INV from Japanese mega-banks since the new sponsorship andstrengthened its lender formation, established a strong financial base for future growth and significantly
reduced interest expenses.
In May 2014 (during the fiscal period ended June 30, 2014 (previous fiscal period)) and in July 2014
(during the fiscal period ended December 31, 2014 (reporting period)), INV implemented the following
series of transactions (the “Transactions”) to reposition the portfolio in order to focus on an asset classwith expanding market share in the hospitality market that complements the existing portfolio
characterized by stable earnings.
<Outline of the Transactions>
Date

Overview
Acquisition

and

sale

of

Acquisition of 2 limited service hotels and sale of 7 senior

May 2014
properties

housing properties via new lending.

Revision of the Investment
June 2014

Added hotel assets to ‘core asset’ type.
Guidelines
Asset acquisition funded byAcquisition of 18 limited service hotels by the funds procured

July 2014

Global Public Offering ofthrough the global offering and new loan.
new units

Due to the asset expansion and the strong performance of the relevant 20 hotels, net income per unit
increased substantially leading to an annual DPU for the period ended December 2014 of JPY 1,306,
which increased from JPY 1,150 previously forecast on June 23, 2014. The total market value as ofJanuary 30, 2015 reached JPY 140,372 million, helping INV achieve its mid-term market capitalization
target of JPY 100 billion (announced in February 2014) in less than a year.
As demonstrated by the strong income growth from its existing 20 hotel portfolio and market trends,
INV acquired additional hotel properties taking into consideration the revenue potential of theproperties. On February 6, 2015, INV acquired one hotel from a third-party and two from theSponsor’s pipeline MOU. The asset acquisition was completed using cash-on-hand and new loans,- 15 -

without issuing new equity. As a result of the February 2015 acquisition, INV expects the annual net
income per unit and DPU for 2015 to increase to JPY 1,571 compared to the previous forecast of JPY
1,422 announced on October 31, 2014 (Note).
INV continues to pro-actively manage the portfolio by acquiring assets that produce stable income andprovide upside potential, while reducing costs such as interest-bearing debt expenses. The series ofdeliberate steps were implemented since the Sponsorship of the Fortress Group in order to increase
unitholders’ value.
(Note) Please refer to “6 Significant subsequent events” below regarding the acquisition of the 3
hotels on February 6, 2015.
(2)

Operational Environment and Performance

During the reporting period, although consumer spending slowed due to the consumption tax
increase in April 2014, the Japanese economy showed continuous improvement on the back ofstrong corporate performance centered on large manufacturers.

In December 2014, theunemployment rate dropped to 3.4% and the jobs-to-applicants ratio increased to 1.15 (the highest
ratio in over 22 years and 9 months).

In and after the fiscal period ending June 30, 2015, theeconomic upswing is expected to continue due to (i) the postponement of an additional increase in
the consumption tax, (ii) the recovery in consumer spending on the back of the improved
employment and salary environment, (iii) the impact of government’s financial policy and the Bankof Japan’s large scale monetary easing policy and (iv) the increase in corporate profits in connection
with the decline in the price of crude oil.
Regarding the real estate investment market, real estate transaction prices continued to rise in Tokyoand other large cities as a result of Japan’s economic recovery and expectations of reflation.
According to the Japanese Real Estate Investor Survey (October 2014) conducted by the Japan Real
Estate Institute, investors expect capitalization rates for offices, residences, retail facilities and hotels
to decline.

Investment demand is still high such that investors who responded that they will makenew investments over the next year rose by 2 points to 94% from the previous survey (April 2014).
Regarding the property rental market, the Tokyo office building vacancy rates continue to decline
while rates are bottoming out in parts of other major cities.

Large corporations are consolidating

their floor space as well as expanding leasing space in the same buildings.
for newly constructed buildings and premium properties.

- 16 -

Rents increased mainlyWith respect to the residential sector, market rent trends for small-type city-center properties are
improving and the Asset Manager increased the rent from the previous fiscal period after a careful
unit-by-unit analysis of the residential assets.

As a result, INV realized a rent increase for 62.3%(versus 53.3% in the previous period) of the new residential lease agreements or a total rent increaseof 2.1% compared to the previous rent (versus a 1.8% increase in the previous period).

As part of

the rent increase program, INV achieved a rent increase for 51.9% of contract renewals (versus
24.9% in the previous period); and a 1.8% increase compared to the previous rent (versus a 0.8%
increase in the previous period).

Net leasing costs (advertising expenses + free rent – key money),

were reduced to an average of 1.18 months per new lease agreement, or a reduction of 0.33 months
year-on-year, and a 0.02 month reduction compared to the budget.
The hotel sector has consistently performed well in large part due to the Japanese government’s
proactive stance to promote tourism initiatives such as airport capacity expansion, the entry of
LCC’s into the Japanese market, and the relaxation of visa requirements for some Asian countries.
The number of international visitors to Japan from China and Southeast Asian countries such as
Indonesia, the Philippines and Vietnam has increased significantly, helping Japan log a record high13.4 million visitors in 2014, providing firm demand for accommodations.

In addition to theabove-mentioned favorable external factors and intensive revenue management actions from thehotel operators, INV’s 20 hotel properties recorded strong performance led by an increase in sales tooverseas guests whose share of total sales increased by 18.2 points, a 2.3 point increase in theoccupancy rate (Note 2), a 14.9% increase in ADR (Note 3), and a 17.9% increase in RevPAR (Note4), compared with the same period in the previous year.
As a result, INV’s average occupancy rate across the entire portfolio increased to 96.1%, and NOI
increased by 91.3% over the previous fiscal period to JPY 3,861 million.
At the end of the reporting period, the number of properties held by INV totaled 91, including 63
residential properties, 20 hotels, 7 office buildings and retail facilities as well as one parking lot at a
total acquisition price of JPY 117,917 million and total leasable area of 224,574.36 m2.
As a result of the above trends in real estate investment and the rental market, as well as the strong
performance of the hotel properties, the total appraisal value was JPY 126,558 million, an increaseof JPY 8,948 million (+7.6%) (Note 5).

In particular, the appraisal value of the 20 hotel properties

recorded a substantial increase of JPY 6,927 million (+15.1%) (Note 5) helping to enhance theportfolio asset value.

- 17 -

(Note 1) The performance of the same period in the previous year (from July 2013 to December2013) is based on data provided by the seller of the 20 hotels before INV acquired the 20 hotels.
Likewise, the performance of the period from July 1, 2014 to July 16, 2014 of the 18 hotels INV
acquired on July 17, 2014 is based on data provided by the seller of those hotels.
(Note2) “Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total
number of rooms available during the same period x total operating days during the same period)(Note 3) “ADR” means average daily rate, and is calculated by dividing total room sales (except forservice fee) for a certain period by the aggregate number of days per room for which each room was
occupied during the same period.
(Note 4) “RevPar” means revenue per available room per day, and is calculated by dividing totalroom sales for a certain period by total number of rooms available (number of rooms x number ofdays) during the same period, and is the same as the figure obtained by multiplying occupancy rates
by ADR.
(Note 5) For the 18 out of the 20 hotels, which were acquired as of July 17, 2014, the comparison
was made with the appraisal value as of April 30, 2014.

For the other two properties, thecomparison was made with the value as of the previous fiscal period.
(3)

Overview of Fund Raising

INV raised JPY 23,961 million through a Global Public Offering and third-party allotment in orderto procure funds for the acquisition of 18 hotels (Global public offering, 1,040,000 new units in July
2014, paid-in JPY 22,747 million; third-party allotment, 55,507 new units in August 2014, paid-in
JPY 1,214 million).

INV simultaneously obtained New Syndicate Loan (C) in the amount of JPY

57,300 million in order to refinance the existing borrowings New Syndicate Loan (A) and New
Syndicate Loan (B) through a syndicate arranged by SMBC, BTMU, and Mizuho Bank on July 17,
2014, which lowered interest-bearing debt costs to 1.09% (as of July 31, 2014) from 1.48% (as ofJune 30, 2014).
As a result of the above measures, the outstanding balance of interest-bearing debt for INV was JPY
67,260 million, and the Loan-to-Value ratio was 51.5 % (Note) as of the end of December 2014.
(Note) The calculation for the Loan-to-Value ratio uses the calculation formula below:
Loan-to-Value ratio = amount of interest-bearing debt ÷ total amount of assets at end of period x 100
3

Changes in Number of Investment Units Issued and Outstanding- 18 -

Changes in the number of investment units issued and outstanding and unitholders’ equity by the endof the reporting period are as follow.
Date

Type of issue

Number of investment
units

issuedUnitholders’ equity (yen)Referenceandoutstanding (units)
January

Private18, 2002

placement

Increase

Total

Increase

Total

400

400

200,000,000

200,000,000(Note 1)

2,700

3,100

1,012,500,000

1,212,500,000(Note 2)

1,350

4,450

506,250,000

1,718,750,000(Note 2)

1,333

5,783

499,875,000

2,218,625,000(Note 2)

267

6,050

100,125,000

2,318,750,000(Note 2)

800

6,850

300,000,000

2,618,750,000(Note 2)

266

7,116

99,750,000

2,718,500,000(Note 2)

800

7,916

300,000,000

3,018,500,000(Note 2)

1,333

9,249

499,875,000

3,518,375,000(Note 2)

9,000

18,2493,377,250,000

6,895,625,000(Note 3)

10,65028,8993,937,667,100

10,833,292,100(Note 4)25,00053,8998,301,125,000

19,134,417,100(Note 5)forincorporation
DecemberPrivate26, 2003

placement

January

Private9, 2004

Placement

January

Private21, 2004

placement

January

Private27, 2004

placement

January

Private28, 2004

placement

January

Private31, 2004

placement

February

Private5, 2004

placement

February

Private7, 2004

placementMay

Public17, 2004

offering

February

Public7, 2005

offering

July

Public31, 2006

offering

February

Unit split

215,596

269,495―

19,134,417,100(Note 6)Merger367,200

636,695―

19,134,417,100(Note 7)

1, 2010February- 19 -

1, 2010
July

Third-party

29, 2011

allotment

DecemberThird-party

20, 2013

allotment

July

Public16, 2014

offering

AugustThird-party

13, 2014

allotment

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 8)224,887

1,573,179

2,999,992,580

29,134,389,369(Note 9)1,040,000

2,613,179

22,747,920,000

51,882,309,369

55,5072,668,686

1,214,104,611

53,096,413,980(Note10)(Note11)(Note 1) The Investment Corporation was incorporated through a private placement at a price of
500,000 yen per unit.
(Note 2) New investment units were issued in a private placement at a price of 375,000 yen per unit
to raise funds for the acquisition of new properties.
(Note 3) New investment units were issued in a public offering at a price of 395,000 yen per unit
(375,250 yen after deducting the underwriters’ discount) to raise funds for the acquisition of new
properties.
(Note 4) New investment units were issued in a public offering at a price of 385,140 yen per unit
(369,734 yen after deducting the underwriters’ discount) to raise funds for the acquisition of new
properties.
(Note 5) New investment units were issued in a public offering at a price of 348,740 yen per unit
(332,045 yen after deducting the underwriters’ discount) to raise funds for the acquisition of new
properties.
(Note 6) An investment unit slit of 5 units per 1 unit was conducted.
(Note 7) A merger by absorption pursuant to Article 147 of the Act on Investment Trusts andInvestment Corporations was conducted with LCP, with INV as the surviving entity. As a result of
the merger by absorption, 4 investment units of INV (after the investment unit split) were allotted foreach LCP investment unit. The number of LCP investment units issued as of the time of the merger
by absorption was 91,800 units.
(Note 8) New investment units were issued in a third party allotment at a price of 9,837 yen per unit
to make repayment of existing debt, etc.
(Note 9) New investment units were issued in a third party allotment at a price of 13,340 yen perunit to make repayment of existing debt, etc.
(Note 10) New investment units were issued in a public offering at a price of 22,688 yen per unit
(21,873 yen after deducting the underwriters’ discount) to raise funds for the acquisition of new
properties.
(Note 11) New investment units were issued in a third party allotment at a price of 21,873 yen perunit for the purpose of cash reserve to appropriate to repayment in future borrowings.
Trends in Trading Prices of Investment Securities
The highest and lowest prices (trading prices) in the Real Estate Investment and Trust Securities
Section of the Tokyo Securities Exchange on which the investment securities of INV are listed are as
follow.

- 20 -

Real Estate Investment and Trust Securities Section, Tokyo Securities Exchange(Unit: yen)
Period19th

Fiscal20th

Fiscal

21st

Fiscal

22nd

Fiscal

23rd

FiscalPeriodPeriodPeriodPeriodPeriodClosing

DecemberJune 2013

DecemberJune 2014

December

Month

2012

Highest6,540

14,48020,00024,76050,900

Lowest

6,080

6,230

12,61016,74023,020

4

2013

2014

Distribution PerformanceWith respect to distributions, it was determined to distribute all net income excluding fractions of
distribution per investment unit that are less than one yen.

As a result, the distribution per unit for

the reporting period was determined to be JPY 733.
Period

19th

20th

21st

22nd

23rd

FiscalFiscalFiscalFiscalFiscalCalculated

July

1,

Jan.

1,

July

1,

Jan.

1,

July

1,

Period

2012

to

2013

to

2013

to

2014

to

2014

to

Dec.

31,

June

30,

Dec.

31,

June

30,

Dec.

31,

Total

2012

2013

2013

2014

2014

271,868

449,196446,003

974,975

2,031,546

114,118

93,24773,15973,54375,399157,750

355,949

372,843

901,431

1,956,146

unappropriatedretainedearnings

forperiod(thousands ofyen)
Reserved
profit(thousands of
yen)
Cash
distribution(thousands of- 21 -

yen)(Distribution

(117)

(264)

(237)

(573)

(733)

157,750

355,949

372,843

901,431

1,956,146

(117)

(264)

(237)

(573)

(733)

−

−

−

−

−

(−)

(−)

(−)

(−)

(−)

per unit) (yen)Distribution
amount(thousands ofyen)(Distribution
per unit) (yen)Contribution
return(thousands ofyen)(Contribution
returnperunit ) (yen)5

Future Operational Policy and Issues to be Addressed

Forecast for Next Period and Issues to be Addressed(i)External growth strategy

New Property Acquisitions
INV believes the strengthening of the financial base through reduction of borrowing costs, asignificant improvement in the debt service coverage ratio, and further strengthening of the lenderformation enhances both debt and equity fund raising capacity, thus greatly improving the external
growth capability.
Although the acquisition of properties in the housing and the hotel sectors, which comprise INV’score assets, is highly competitive, Fortress Group, INV’s sponsor, has established a strong trackrecord of large-scale real estate investments in Japan providing a substantial pipeline of assets for
INV.

INV entered into a memorandum of understanding on June 23, 2014, giving INV preferential

negotiating rights (Note 2) in respect to the acquisition of 22 limited service hotels (as described
below) out of the pipeline assets held by the Fortress Group, in order to ensure further future growth.
- 22 -

By utilizing such pipeline support from the sponsor and the property sale information from the AssetManager’s independent network, INV plans to continue acquiring properties that contribute to stableprofit and cash flow growth leading to an increase in the distribution per unit.
As described in “6 Significant subsequent events” below, on February 6, 2015, INV acquired 3
hotels, of which 2 hotels, “Hotel Nets Hakodate” and “Flexstay Inn Shirogane” were properties
listed in the memorandum of understanding.

Property Name

Location

Number of
Guest
Rooms

Hotel Mystays Akasaka (Note 1)

2-17-54 Akasaka, Minato-ku, Tokyo

319

Hotel Mystays Kameido P1

6-32-1 Kameido, Koto-ku, Tokyo

265

Hotel Mystays Kanazawa

2-13-5 Hirooka, Kanazawa, Ishikawa

244

Hotel Mystays Kameido P2

6-7-8 Kameido, Koto-ku, Tokyo

175

Hotel Mystays Haneda

5-1-13 Haneda, Ota-ku, Tokyo

174

5-65 Onoecho, Naka-ku, Yokohama, Kanagawa

166

Hotel Mystays Utsunomiya

2-4-1 Higashishukugo, Utsunomiya, Tochigi

116

Hotel Mystays Ueno Iriyaguchi

5-5-13 Higashiueno, Taito-ku, Tokyo

97

Flexstay Inn Ekoda

8-6 Sakaecho, Nerima-ku, Tokyo

210

Flexstay Inn Higashi-Jujoh

8-6 Sakaecho, Nerima-ku, Tokyo

88

Flexstay Inn Shirogane

5-10-15 Shirogane, Minato-ku, Tokyo

84

Flexstay Inn Kawasakikaizuka

1-13-2 Kaizuka, Kawasaki-ku, Kawasaki, Kanagawa

64

Flexstay Inn Kawasakiogawacho

15-9 Ogawacho, Kawasaki-ku, Kawasaki, Kanagawa

62

Flexstay Inn Shinsaibashi

1-9-30 Nishishinsaibashi, Chuo-ku, Osaka, Osaka

54

Toko Hotel

2-6-8 Nishigotanda, Shinagawa-ku, Tokyo

338

Best Western Hotel Fino Sapporo

4-15 Kita8jo-Nishi, Kita-ku, Sapporo, Hokkaido

242

Hotel Nets Hakodate

26-17 Honcho, Hakodate, Hokkaido

202

Takamatsu Tokyu Inn

9-9 Hyogomachi, Takamatsu, Kagawa

191

Hotel Vista Shimizu

1-23 Masagocho, Shimizu-ku, Shizuoka, Shizuoka

152

Comfort Hotel Toyama Ekimae

1-3-2 Takaramachi, Toyama, Toyama

150

Best Western Hotel Fino Oita

1-32 Niagemachi, Oita, Oita

145

Super Hotel Shinbashi Karasumoriguchi

5-16-4 Shinbashi, Minato-ku, Tokyo

74

Hotel Mystays Yokohama Kannai (tentativename) (Note 1)

Total

3,612

- 23 -

(2 hotels acquired out of the properties listed(286)

above.)
20 properties left after the acquisition of 2

3,326

properties(Note 1) “Hotel Mystays Akasaka” is under reconstruction, and “Hotel Mystays Yokohama Kannai(tentative name) is under construction.
(Note 2) INV has preferential negotiating rights for one year after the execution date of thememorandum of understanding (June 23, 2014) with sponsor related entities.

For the 20 properties

other than 2 properties already acquired, there are no specific plans to acquire, and INV cannot
guarantee that INV will acquire any of these properties
Property Sales
While INV places priority on increasing unitholders’ value through external growth, taking into
account the increased level of activity in the real estate trading market, it also plans to consider the
possibility of property sale taking into consideration the portfolio sector composition, geographic
distribution and competitiveness of each property, as appropriate.
(ii)

Strategy for internal growth

INV will continue to strengthen its collaborative ties with Property Management (PM) companies
and brokers to further boost occupancy rates and earning capabilities of its properties.
With respect to INV’s residential properties, INV will focus on increasing rent for new lease
contracts as well as for lease renewals while reducing net leasing costs for new lease contracts inconjunction with the peak residential leasing season that occurs during the June 2015 period in orderto maximize profits.
With respect to the hotel properties, INV intends to increase rent revenue through detailed analysis
and understanding of each hotel based on market trends and close communication with the hotel
operators, and by continuous strategic initiatives to further enhance revenue management.

The

implementation of appropriate maintenance and repair plans is of the utmost importance inmaintaining and enhancing the competitiveness and market value of the properties as well as
ensuring stable operations and high tenant satisfaction.

Therefore, INV will continue to monitor

current strategic plans with flexible implementation as it sees fit.
- 24 -

(iii)

Financial strategy

Following the strengthening of the financial base via the refinancing implemented during thereporting period and the new borrowing implemented in February 2015, INV will promote a
financial strategy which envisages to switch to unsecured borrowings in the future, to obtain a credit
rating and to issue investment corporate bonds.

Also, INV seeks to strengthen its earnings base by

way of lengthening and diversification of borrowing terms, further reduction of borrowing costs,
adjustment of appropriate fixed/variable interest rate ratio taking into consideration

the interest rate

trends, strengthening of its lender formation and improving fund raising capacity, in order tomaximize unitholders’ value and increase distributions per unit.
(iv)

Compliance risk management

While the executive officer of INV concurrently serves as the representative director at the AssetManager, two supervisory directors (an attorney and a certified public account) oversee theexecution of the executive officer’s duties via the Board of Directors of INV.

In addition, thecompliance officer of the Asset Manager attends each meeting of the Board of Directors in thecapacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws,
regulations and other relevant matters as well as overall management of transactions with sponsor
related parties.

Moreover, it has in place a compliance committee which, chaired by suchcompliance officer, is in charge of deliberating on compliance with laws, regulations and otherrelevant matters as well as transactions with sponsor related parties. Compliance committee
meetings are attended by an outside expert (an attorney) who, sitting in as a compliance committee
member, conducts rigorous deliberations on the existence of conflicts of interest in transactions withsponsor related parties as well as strict examinations with respect to INV’s compliance with laws andregulations.
INV intends to continually take steps to strengthen its compliance structure.
6

Significant subsequent events

INV acquired 3 high-quality limited service hotels (total acquisition price JPY 13,261 million) withstable revenue and growth potential, using its surplus of cash-on-hand and a new loan (JPY 6,241- 25 -

million) without issuing new investment units in the fiscal period ending June 30, 2015 (24th fiscal
period).
As a result, the total number of properties held by INV after the acquisition increased to 94 properties(of which 63 residential properties, 23 hotels properties and 8 other properties) with a total acquisition
price of JPY 131,188 million (of which, JPY 58,083 million for residential properties, JPY 58,634
million for hotel properties and JPY 14,470 million for other properties).
(a)Acquisition of Assets

INV acquired the 3 limited service hotels (trust Beneficial Interests in Domestic Real Estates) (totalacquisition price of JPY 13,261 million) on February 6, 2015 as follows.

Use

Hotel

Property
Number

Property Name

Location

Acquisition
Price(JPY million)(Note 1)

Appraisal Valueat Acquisition(JPY million)(Note 2)

SellerCategoryofSpecified
Assets

D21

APA
Hotel
Yokohama Kannai

Yokohama,
Kanagawa

8,350

8,500

AYK
Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

D22

Hotel
Hakodate

Nets

Hakodate
City,
Hokkaido

2,792

2,820

Zephyrus Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

D23

Flexstay
Shirogane

Inn

Minato-ku,
Tokyo

2,119

2,140

Nishi
Tokutei
Mokuteki Kaisha

Trust
Beneficial
Interest

13,261

13,460Total(Note 1) Acquisition prices do not include adjustments for property taxes or city planning taxes, or
national or local consumption taxes.
(Note 2) Appraisal value at Acquisition is the appraisal value as of December 1, 2014 based on theappraisal report from Japan Real Estate Institute.
(b)

LenderFinancing

Borrowing

Borrowing

Interest

Principal

Borrowing

Date

AmountRate

Maturity

Method- 26 -

(annual)
Sumitomo

Mitsui

Date

Banking

Corporation
The Bank of Tokyo-Mitsubishi UFJ,
0.93000％

Ltd.
Mizuho Bank, Ltd.
Citibank Japan Ltd.

February

JPY 6,241

6, 2015

million

Shinsei Bank, Limited
Sumitomo

Mitsui

Trust

Variableinterest
rate

SecuredFebruary(Note 2) /6, 2018

withguarantee(Note 1)

Bank,

no

LimitedResona Bank, Limited(Note 1) Interest rate applicable for the period from February 6, 2015 to February 26, 2015.
One-month JPY TIBOR + spread (0.8%); however, two-month JPY TIBOR + spread (0.8%) for the
first interest calculation period only
(Note 2) First priority pledges over the real estate trust beneficiary interests for 3 properties: APA
Hotel Yokohama-Kannai, Hotel Nets Hakodate, Flexstay Inn Shirogane, and 65 properties: Nisshin
Palacestage Daitabashi, Nisshin Palacestage Higashi-Nagasaki, Growth Maison Gotanda, Growth
Maison Kameido, Emerald House, Harmonie Ochanomizu, Suncrest Shakujii Koen, Growth Maison
Shin-Yokohama, Belle Face Ueno Okachimachi, Grand Rire Kameido, Growth Maison Ikebukuro,
Growth Maison Yoga, Route Tachikawa, Shibuya Honmachi Mansion, City Heights Kinuta, Acseeds
Tower Kawaguchi Namiki, Capital Heights Kagurazaka, College Square Machida, Belair Meguro,
Wacore Tsunashima I, Foros Nakamurabashi, Growth Maison Kaijin, College Square Machiya, City
House Tokyo Shinbashi, Winbell Kagurazaka, Nishiwaseda Crescent Mansion, Lexington Square
Akebonobashi, Casa Eremitaggio, Towa City Coop Shinotsuka II, Bichsel Musashiseki, Lexel
Mansion Ueno Matsugaya, Towa City Coop Sengencho, Royal Park Omachi, Lexington Square
Haginomachi, Visconti Kakuozan, Lexington Square Daitabashi, Lexington Square Honjo
Azumabashi, AMS TOWER Minami 6-Jo, Spacia Ebisu, Kindai Kagakusha Building, Lexington
Plaza Nishigotanda, Cross Square NAKANO, Ohki Aoba Building, Lexington Plaza Hachiman,
AEON TOWN Sukagawa, Hotel MyStays Kanda, Hotel MyStays Asakusa, Hotel MyStays
Kyoto-Shijo, MyStays Shin Urayasu Conference Center, Hotel MyStays Maihama, Hotel Vista
Premio Dojima, Hotel MyStays Nagoya-Sakae, Hotel MyStays Sakaisuji-Honmachi, Hotel MyStays
Yokohama, Hotel MyStays Nippori, Hotel MyStays Fukuoka-Tenjin-Minami, Flexstay Inn Iidabashi,
Hotel MyStays Ueno Inaricho, Flexstay Inn Shinagawa, Flexstay Inn Tokiwadai, Flexstay Inn Sugamo,
Hotel MyStays Otemae, Flexstay Inn Kiyosumi Shirakawa, Flexstay Inn Nakanobu P1 and Flexstay
Inn Nakanobu P2. First priority mortgages over 2 real estate properties: Shinjuku Island and Times
Kanda-Sudacho 4th.
Overview of the Investment Corporation
1

Overview of Investment

By Period

19th
PeriodFiscal20th
PeriodFiscal21st
Period- 27 -

Fiscal22nd
PeriodFiscal23rd
PeriodFiscalResults Dates
NumberAs of Dec. 31,

As of Jun. 30,

As of Dec. 31,

As of Jun. 30,

As of Dec. 31,

2012

2013

2013

2014

2014

of

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

of

1,348,292

1,348,292

1,573,179

1,573,179

2,668,686

26,134

26,134

29,134

29,13453,096

10,325

10,093

8,783

10,005

12,148

investment
units
authorized
Numberinvestment
units

issuedandUnitholders’capital
Numberof

totalunitholders
2

Notes regarding Unitholders

Major unitholders at the end of the reporting period are as below.

Name

Number of units held

Calliope Godo Kaisha% of total number of investment units
issued and outstanding

609,94222.85

371,058

13.90

363,836

13.63

199,554

7.47

149,925

5.61

74,985

2.80

MSIP CLIENT SECURITIES

65,337

2.44

STATE STREET BANK AND

61,4022.30

The Master Trust Bank ofJapan, Ltd. (trust account)
Japan Trustee Services Bank,
Ltd.

(trust account)

Trust

&

Bank,

Custody
Ltd.

Services(securities

investment trust account)
Rayo Godo Kaisha
The

NomuraTrust

andBanking Co., Ltd. (investment
trust account)- 28 -

TRUST COMPANY 505225
BNP PARIBAS SECURITIESSERVICES LUXEMBOURG /JASDEC/57,293

2.14

27,0341.01

1,980,366

74.20

HENDERSONHHFSICAVSTATE STREET BANK AND
TRUST COMPANY
Total(Note 1) Percentages are rounded down to two decimal places.
3

Notes regarding Directors

Directors at the end of the reporting period are as below.
Position

Name

Primary

Directors’

Responsibilities

remuneration for
operating period(thousands of yen)

Executive Director

Naoki Fukuda

President and CEO,--

Consonant Investment
Management Co. Ltd.
Supervisory Director

Takashi Takahashi

Attorney,

Ocean

2,400

General Law Office
Hiroyuki Fujimoto

Tax accountant, CPA

2,400

Fujimoto Office
AuditorErnst & Young--

41,000ShinNihon LLC(Note 1) Executive and supervisory directors do not hold the Investment Corporation’s units either
in their names or in the names of third parties. In addition, while they may be directors oforganizations not listed above, those organizations as well as those listed above have no conflicts ofinterest with the Investment Corporation.
(Note 2) The auditing agreement with the auditor is renewed every accounting period. Dismissals
are made in accordance with the Investment Trust Act, and in addition, non-reappointments are
considered by the board of directors of INV by comprehensively taking into account the auditing
quality, auditor remuneration, and other various circumstances.
4

Asset Management Company, Asset Custody Companies, and General Administrative- 29 -

Agents
The asset management company, asset custody companies, and general administrative agents at theend of the 21st Fiscal Period are as below.
Delegation Category

Name

Asset management company

Consonant Investment Management Co., Ltd.

Asset custody company

Sumitomo Mitsui Trust Bank, Limited

Generaladministrative

agent(institutional

Sumitomo Mitsui Trust Bank, Limited

operations (Note 1) administration of investors’
registry, etc.)
Generaladministrative

agent(institutional

Consonant Investment Management Co., Ltd.

operations (Note 2))
Generaladministrative

agent(auditing

EP Consulting Services Corporation

operations, etc.)
Special account management company

Mitsubishi UFJ Trust and Banking Corporation
Limited (Note 3) /Sumitomo Mitsui Trust Bank,
Limited (Note 4)(Note 1) Of the administrative tasks for the Investment Corporation’s institutional operations, tasks
related to the mailing of general unitholders’ meetings and the receipt and counting of voting forms
are delegated(Note 2) (i) Tasks related to the running of general unitholders’ meetings for INV (excluding tasks
related to the mailing of general unitholders’ meetings and the receipt and counting of voting forms),(ii) Tasks related to the running of the meetings of the Board of Directors of INV, and (iii) the
aforementioned in (i) or tasks incidental or related to (ii) are delegated.
(Note 3) Conducts administrative tasks related to the creation, maintenance, and disposition oftransfer savings account registers for special accounts of unitholders of the INV before the merger(former Tokyo Growth REIT Fund) as well as tasks related to other transfer savings accountregisters.
(Note 4) Conducts administrative tasks related to the creation, maintenance, and disposition oftransfer savings account registers for special accounts of unitholders of the former LCP as well as
tasks related to other transfer savings account registers.

- 30 -

Status of Investment Corporation’s Assets under Management
1

Composition of Investment Corporation’s Assets
Preceding period

Reporting period(as of June 30, 2014)
Type of(as of December 31, 2014)

Geographic Area
PurposeAsset

Amount Held

(Note 1)

Amount Held
Ratio of Total(millions of yen)

Ratio of Total(millions of yen)

Assets (%)

Assets (%)(Note 2)

Residential

Office/RetailReal
EstateHourly parking

HotelGreater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

Greater Tokyo area

712

0.9

710

0.5

Major regional cities

－

－

－

－

Subtotal

712

0.9

710

0.5

Greater Tokyo area

100

0.1

100

0.1

Major regional cities

－

－

－

－

Subtotal

100

0.1

100

0.1

Greater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

813

1.0

811

0.6

Greater Tokyo area

43,90955.4

43,71533.5

Major regional cities

11,96515.1

11,853

9.1

Subtotal

55,874

70.5

55,56942.6

Greater Tokyo area

7,106

9.0

7,083

5.4

Major regional cities

6,037

7.6

5,982

4.6

Subtotal

13,143

16.6

13,066

10.0

Greater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

Greater Tokyo area

5,532

7.0

27,266

20.9

Major regional cities－－

18,02913.8

Subtotal

5,532

7.0

45,296

34.7

74,55094.1

113,932

87.3

Total real estate

Residential

Real

Office/Retailestate intrust
Hourly parking, etc.

Hotel

(Note 2)

Total Real Estate in Trust- 31 -

Preceding period

Reporting period(as of June 30, 2014)
Type of(as of December 31, 2014)

Geographic Area
PurposeAsset

Amount Held

(Note 1)

Amount Held
Ratio of Total(millions of yen)

Ratio of Total(millions of yen)

Assets (%)

Assets (%)(Note 2)
Deposits and Other Assets(Note 2)

3,898

4.9

15,733

12.1

79,261100.0

130,477

100.0（75,363）（95.1）（114,743）（87.9）

Total Assets (Note 3)(Note 1) Greater Tokyo area refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama
Prefecture.
(Note 2) “Amount held” is from the balance sheet as of the end of the reporting period and is
calculated by deducting the accumulated depreciation from the acquisition price (including
acquisition related costs).
(Note 3) The figure indicated in“( )” in “total assets” shows the amount relevant to the real estate
actually held among the covered assets.

- 32 -

2

Major Properties

The overview of the Investment Corporation’s major properties (top 10 properties by book value) atthe end of the reporting period is as below.

Book Value

Occupancy
Leasable

Name of Property

Leased Area

(millions ofRatio of Rental
Rate (%)

Area (m )
2

(m )

yen)

Main Use
Revenue (%)

2(Note)A75 Spacia Ebisu

6,657

7,794.91

7,298.51

93.6

4.1

Residential

D3 Hotel MyStays Kyoto-shijo

5,997

7,241.51

7,241.51

100.0

6.7

Hotel

D4 MyStays Shin-Urayasu Conference Center

4,905

6,232.30

6,232.30

100.0

4.7

Hotel

D5 Hotel MyStays Maihama

4,846

2,456.36

2,456.36

100.0

3.6

Hotel

B14 Lexington Plaza Nishigotanda

4,776

6,033.58

6,033.58

100.0

3.0

OfficeD6 Hotel Vista Premio Dojima

3,834

9,445.32

9,445.32

100.0

3.5

Hotel

B17 Lexington Plaza Hachiman

3,163

8,419.15

8,419.15

100.0

3.6 Retail Facilities

A52 Winbell Kagurazaka

3,113

4,032.70

4,032.70

100.0

2.2

Residential

D7 Hotel MyStays Nagoya-Sakae

2,929

9,064.71

9,064.71

100.0

4.0

Hotel

D1 Hotel MyStays Kanda

2,891

2,585.72

2,585.72

100.0

2.3

Hotel

43,11563,306.26

62,809.86

99.2

37.8

―

Total

(Note) “Occupancy Rate” is computed by dividing the leased area by leasable area, and rounded
to one decimal place.

- 33 -

3

Asset Portfolio Including Real Estate
The portfolio of the properties (real estate accounts of assets and liabilities within assets in trust)

held by the Investment Corporation at the end of the reporting period is as below.
Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
Trust
A26

Nisshin
Daitabashi

Palacestage

1-31-2 Izumi, Suginami Ward, Tokyo

beneficiary

1,771.13

1,150

1,139

2,681.94

1,250

1,112

1,051.50

949

842

1,367.96

1,080

1,007

2,152.31

1,240

1,409

1,748.24

1,310

1,373

3,029.16

1,030

1,064

1,858.44

1,140

989

1,351.11

972

977

interests
Trust
A27

Nisshin Palacestage HigashiNagasaki

5-4-1 Nagasaki, Toshima Ward, Tokyo

beneficiaryinterests
Trust

A28

Growth Maison Gotanda

2-26-6 Nishi-Gotanda,
Ward, Tokyo

Shinagawabeneficiaryinterests
Trust

A29

Growth Maison Kameido

6-58-16 Kameido, Koto Ward, Tokyo

beneficiaryinterests
Trust

A30

Emerald House

3-27-18 Itabashi, Itabashi Ward, Tokyo

beneficiaryinterests
Trust

A31

Harmonie Ochanomizu

2-5-5 Yushima, Bunkyo Ward, Tokyo

beneficiaryinterests
Trust

A32

3-15-35
Tokyo

Suncrest Shakujii-Koen

Takanodai,

NerimaWard,beneficiaryinterests
Trust

A33

Growth Maison
Shin-Yokohama

3-16-2 Shin-Yokohama, Kohoku-ku,
Yokohama City, Kanagawa Prefecture

beneficiaryinterests

A34

Belle
Ueno-Okachimachi

Face1-27-5
Tokyo

Higashi-Ueno,

Taito

Ward,

Trust
beneficiary- 34 -

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A35

Grand Rire Kameido

3-39-12 Kameido, Koto Ward, Tokyo

beneficiary

1,562.26

937

849

952.89859

772

1,015.34

691

761

1,368.57606

650

1,167.50604

655

1,235.93467

646

1,210.74

699

566

1,126.65553

616

1,047.75

511

569

557.05582

570

interests
Trust
A36

Growth Maison Ikebukuro3-31-14 Nishi-Ikebukuro,Ward, Tokyo

Toshimabeneficiaryinterests
Trust

A37

Growth Maison Yoga

1-15-15 Okamoto, Setagaya Ward,Tokyo

beneficiaryinterests
Trust

A38

Route Tachikawa

3-7-6 Nishikicho, Tachikawa
Tokyo

City,

beneficiaryinterests
Trust

A39

Shibuya-Honmachi Mansion

2-35-2Tokyo

Honmachi,ShibuyaWard,beneficiaryinterests
Trust

A40

City Heights Kinuta

4-13-15 Kinuta, Setagaya Ward, Tokyo

beneficiaryinterests
Trust

A41

Acseeds Tower Kawaguchi- 2-5-13 Namiki, Kawaguchi City, Saitama
NamikiPrefecture

beneficiaryinterests
Trust

A42

Capital Heights Kagurazaka

71-1 Enokicho, Shinjuku Ward, Tokyo

beneficiaryinterests
Trust

A43

College Square Machida

3-4-4 Nakamachi, Machida City, Tokyo

beneficiaryinterests
Trust

A44

Belair Meguro

1-2-15 Meguro, Meguro Ward, Tokyo
beneficiary- 35 -

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A45

2-7-47 Tarumachi, Kohoku-ku, Yokohama

Wacore Tsunashima I

City, Kanagawa Prefecture

beneficiary

907.46508

543

815.77565

528

2,040.27458

527

871.35509

474

3,364.00

2,860

2,392

4,032.70

3,630

3,113

4,310.77

2,280

1,876

1,987.88

1,630

1,368

1,197.19

1,020

990

1,627.13985

826

interests
Trust

A46

Foros Nakamurabashi

1-6-6 Koyama, Nerima Ward, Tokyo

beneficiaryinterests
Trust

A47

Growth Maison Kaijin

5-29-51 Kaijin, Funabashi City, Chiba
Prefecture

beneficiaryinterests
Trust

A48

College Square Machiya

7-3-1 Arakawa, Arakawa Ward, Tokyo

beneficiaryinterests
Trust

A51

City House Tokyo Shinbashi

6-19-1 Shinbashi, Minato Ward, Tokyo

beneficiaryinterests
Trust

A52

6-15 Shin-Ogawacho, Shinjuku Ward,Tokyo

Winbell Kagurazaka

beneficiaryinterests
Trust

A53

Nishiwaseda
MansionCresent

3-18-9 Nishi-Waseda, Shinjuku Ward,Tokyo

beneficiaryinterests
Trust

A54

Lexington Square
Akebonobashi

3-8 Yochomachi, Shinjuku Ward, Tokyo

beneficiaryinterests
Trust

A56

Casa Eremitaggio

1-14-15 Nakane, Meguro Ward, Tokyo

beneficiaryinterests

A59

Towa City Coop ShinotsukaII

5-49-7 Higashi-Ikebukuro,Ward, Tokyo- 36 -

ToshimaTrustbeneficiary

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A61

Bichsel Musashiseki

1-22-7 Sekimachi-Kita, Nerima Ward,Tokyo

beneficiary

1,220.24

659

556

1,969.45

1,090

893

3,426.36

1,300

1,039

1,929.59503

396

1,528.58

441

303

705.75252238

1,430.64

1,070

898

784.74566

464

4,460.56

1,130

1,043

7,794.91

7,230

6,657

interests
Trust
A62

Lexel Mansion Ueno
Matsugaya

3-10-2 Matsugaya, Taito Ward, Tokyo

beneficiaryinterests
Trust

A63

Towa City Coop Sengencho

4-338-2 Sengencho, Nishi-ku, Yokohama
City, Kanagawa Prefecture

beneficiaryinterests
Trust

A64

Royal Park Omachi

2-11-10 Omachi, Aoba-ku, Sendai City,
Miyagi Prefecture

beneficiaryinterests
Trust

A65

Lexington Square
Haginomachi

1-15-16 Haginomachi, Miyagino-ku,
Sendai City, Miyagi Prefecture

beneficiaryinterests
Trust

A66

Visconti Kakuozan

2-44 Otanacho, Chikusa-ku, Nagoya
City, Aichi Prefecture

beneficiaryinterests
Trust

A71

Lexington Square Daitabashi

1-33-8 Izumi, Suginami Ward, Tokyo

beneficiaryinterests
Trust

A72

Lexington Square Honjo
Azumabashi

4-20-6 Higashikomagata, Sumida Ward,Tokyo

beneficiaryinterests
Trust

A73

AMS TOWER Minami 6-Jo

2-5-15 Minami 6-Jo Nishi, Chuo-ku,
Sapporo City, Hokkaido

beneficiaryinterests
Trust

A75

Spacia Ebisu

3-6-22 Higashi, Shibuya Ward, Tokyo
beneficiary- 37 -

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A76

Neo Prominence

3-21-5 Shimo, Kita Ward, Tokyo

beneficiary

3,574.70

1,800

1,649

2,773.71

1,340

1,239

2,310.49

1,040

956

1,933.80

732

662

1,955.40

743

646

898.70695

615

1,731.68

666

598

1,634.60

674

587

1,554.03641

585

2,670.66

674

569

interests
Trust
A77

Invoice
ResidenceShin-Kobe

3-3-8 Ikutacho Chuo Ward, Kobe City,
Hyogo Prefecture

beneficiaryinterests
Trust

A78

Cosmo Court Motomachi

3-12-20 Motomachi Dori Chuo Ward,
Kobe City, Hyogo Prefecture

beneficiaryinterests

A79

2-13 Torii Dori Nakamura Ward,
NagoyaCity, Aichi Prefecture

Revest Honjin

Trustbeneficiaryinterests
Trust

A80

3-13-12 Matsubara Naka Ward ,Nagoya
City, Aichi Prefecture

Revest Matsubara

beneficiaryinterests
Trust

A81

Sun
Terrace
Ikebukuro

Minami2-22-6 Minami Ikebukuro, Toshima
Ward, Tokyo

beneficiaryinterests
Trust

A82

Alba Noritake Shinmachi

3-6-8 Noritake Shinmachi, Nishi Ward,
Nagoya City, Aichi Prefecture

beneficiaryinterests
Trust

A83

Revest Meieki Minami

2-13-33 Meiekiminami, Nakamura
Ward, Nagoya City, Aichi Prefecture

beneficiaryinterests
Trust

A84

Revest Heian

2-13-17 Heian, Kita Ward, Nagoya City,
Aichi Prefecture

beneficiaryinterests

A85

Vendir Hamaotsu Ekimae

1-2-15 Hama Otsu, Otsu City, Shiga
Prefecture- 38 -

Trust
beneficiary

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A86

2-6-21 Shimanouchi Chuo Ward, Osaka
City, Osaka Prefecture

Salvo Sala

beneficiary

1,428.12603

537

701.92593

537

1,185.50565

516

1,433.35

560

502

765.18528

451

1,029.05

491

440

530.60476

408

1,020.86

414

370

789.12397

368

992.76397

352

interests
Trust
A87

Excellente Kagurazaka

128-1 Yamabukicho Shinjuku Ward,Tokyo

beneficiaryinterests
Trust

A88

3-4-11 Edobori, Nishi Ward, Osaka City,
Osaka Prefecture

Luna Court Edobori

beneficiaryinterests

A89

Winntage Kobe Motomachi

7-2-2 Motomachi Dori, Chuo Ward,
Kobe
City, Hyogo Prefecture

Trustbeneficiaryinterests
Trust

A90

Queen's Court Fukuzumi

1-3-10 Fukuzumi, Koto Ward, Tokyo

beneficiaryinterests

A91

380-1 Kawaranomachi, Higashinotoin
Dori Nijo Kudaru, Chukyo Ward,
Kyoto
City, Kyoto Prefecture

Corp Higashinotoin

Trustbeneficiaryinterests
Trust

A92

5-14-17 Higashi Oi, Shinagawa Ward,Tokyo

Belair Oimachi

beneficiaryinterests
Trust

A93

Siete Minami-Tsukaguchi

3-18 Minami Tsukaguchimachi,
Amagasaki City, Hyogo Prefecture

beneficiaryinterests

A94

Prime
Life
IsogamiKoen

SannomiyaTrust
4-3-23 Isogamidori ,Chuo Ward, Kobe
City Hyogo Prefecture

beneficiaryinterests

A95

HERMITAGE
WEST

NANBA

4-10-3 Sakuragawa Naniwa Ward,
Osaka
City, Osaka Prefecture- 39 -

Trust
beneficiary

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A96

Century Park
1-bankan

Shinkawa

4-1-2 Shinkawamachi Minato Ward,
Nagoya City, Aichi Prefecture

beneficiary

1,477.62

399

333

794.80344

325974.81364

309

761.18323

293

109,584.45

60,77555,5691,451.54

1,040

1,239

526.43574

710

6,033.58

4,010

4,776

2,145.00

944

1,067

2,178.41659

757

8,419.15

3,440

3,163

interests
Trust
A97

West Avenue

1-5-17 Nishi, Kunitachi City, Tokyo

beneficiaryinterests

A98

Little River Honmachibashi

1-34 Honmachibashi Chuo Ward,
Osaka
City, Osaka Prefecture

Trustbeneficiaryinterests

A99

2-25-11 Mikage Tsukamachi Higashi
Nada Ward, Kobe City, Hyogo
Prefecture

Prime Life Mikage

Trustbeneficiaryinterests

Subtotal
Trust
B8

Kindai Kagakusha Building

2-7-15, Ichigaya Tamachi, Shinjuku
Ward, Tokyo

beneficiaryinterestst

B96-5-1 Nishi-Shinjuku, Shinjuku Ward,

Shinjuku Island

Real estate

Tokyo
Trust
B14

Lexington
Nishigotanda

Plaza

5-2-4 Nishigotanda, Shinagawa Ward,Tokyo

beneficiaryinterests
Trust

B15

Cross Square NAKANO

5-24-18 Nakano, Nakano Ward, Tokyo

beneficiaryinterests
Trust

B16

Ohki Aoba Building

9-7 Futsukacho, Aoba-ku, Sendai City,
Miyagi Prefecture

beneficiaryinterests
Trust

B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku, Sendai
City, Miyagi Prefecture

beneficiaryinterests- 40 -

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
Trust
B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa
Fukushima PrefectureCity,
beneficiary

18,440.58

2,250

2,061

39,194.69

12,917

13,777

81.04

107

100

81.04

107

100

2,585.72

3,280

2,891

3,327.38

3,290

2,608

7,241.51

8,010

5,997

6,232.30

5,260

4,905

2,456.36

5,080

4,846

9,445.32

4,300

3,834

9,064.71

3,040

2,929

4,188.83

3,250

2,508

interests
Subtotal
C1

Times Kanda-Sudacho4th

1-22-7, 1-22-15 Kanda sudacho,
Chiyoda-ku, Tokyo

Real estate

Subtotal
Trust
D1

Hotel MyStays Kanda

1-2-2 Iwamotocho, Chiyoda-ku, Tokyo

beneficiaryinterestst
Trust

D2

Hotel MyStays Asakusa

1-21-11 Honjyo,Sumida-ku, Tokyo

beneficiaryinterests

52,
D3

Hotel MyStays Kyoto-shijo

Kasaboko-cho,Higashiiru,

Trust

Shijyo-dori,Shimogyo, beneficiary

Kyoto-shi, Kyoto Prefectureinterests

Aburanokoji,

Trust
D4

MyStaysShin-Urayasu
Conference Center

2-1-4,

Akemi,Urayasu-shi,

Chiba
beneficiary

Prefectureinterests
Trust

D5

Hotel MyStays Maihama

3-5-1, Tekko-dori, Urayasu-shi, Chiba
beneficiary
Prefectureinterests
Trust
2-4-1, Sonezakishinchi, Kita-ku, Osaka

D6

Hotel Vista Premio Dojima

beneficiary
Prefectureinterests
Trust

D7

Hotel
Nagoya-Sakae

MyStays2-23-22,

Higashisakura,Naka-ku,
beneficiary

Nagoya, Aichi Prefectureinterests
Trust

D8

Hotel
MyStays
Sakaisuji-Honmachi

1-4-8, Awaji-machi, Chuo-ku, Osaka-shi,
beneficiary
Osaka Prefectureinterests- 41 -

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
Trust
4-81,
D9

Sueyoshi-cho,Naka-ku,

Hotel MyStays Yokohama

beneficiary

7,379.43

2,590

2,108

1,719.29

2,140

1,891

3,412.71

1,740

1,567

2,953.38

1,560

1,382

1,150.76

1,540

1,326

1,134.52

1,510

1,242

2,539.75

1,420

1,244

2,089.86

1,370

1,189

4,956.66

1,600

1,192

2,673.64

821

750

Yokohama-shi, Kanagawa
interests
Trust
D10

5-43-7, Higashi-Nippori, Arakawa-ku,

Hotel MyStays Nippori

beneficiaryTokyo
interests
Trust

D11

Hotel
MyStays
Fukuoka-Tenjin-Minami

3-14-20,

Haruyoshi,

Chuo-ku,
beneficiary

Fukuoka-shi, Fukuoka Prefectureinterests
Trust

D12

3-26,

Flexstay Inn Iidabashi

Shin-Ogawa-cho,Shinjuku-ku,
beneficiaryTokyo
interests
Trust
D13

Hotel
MyStays
Inaricho

Ueno

1-5-7, Matsugaya, Taito-ku, Tokyo

beneficiaryinterests
Trust

D14

Flexstay Inn Shinagawa

1-22-19, Kitashinagawa, Shinagawa-ku,
beneficiaryTokyo
interests
Trust

D15

Flexstay Inn Tokiwadai

1-52-5, Tokiwadai, Itabashi-ku, Tokyo

beneficiaryinterests
Trust

D16

Flexstay Inn Sugamo

3-6-16, Sugamo, Toshima-ku, Tokyo

beneficiaryinterests
Trust

1-3-2, Tokui-cho, Chuo-ku, Osaka-shi,
D17

Hotel MyStays Otemae

beneficiary
Osakainterests
Trust

D18

Flexstay
Inn
Shirakawa

Kiyosumi

1-12-16, Tokiwa, Koto-ku, Tokyo

beneficiaryinterests- 42 -

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)Trust
D19

Flexstay Inn Nakanobu P1

4-27-12, Futaba, Shinagawa-ku, Tokyo

770.56647

591

391.49311

286

75,714.18

52,75945,296

224,574.36

126,558

114,743

beneficiaryinterests
Trust

D20

Flexstay Inn Nakanobu P2

4-27-8, Futaba, Shinagawa-ku, Tokyo

beneficiaryinterests

Total(Note 1) “Location” is, in principle, based on the indicated address (jyukyohyoji), except that if the
jyukyohyoji system has not been implemented for such property, the location is based on the land
number (banchi).
(Note 2) “Appraisal Value” is the value appraised or researched as of the end of the fiscal period in
accordance with the Articles of Incorporation of INV and the regulations of the Investment Trust
Association, Japan by Asset Research and Development Inc., the Japan Real Estate Institute, Morii
Appraisal & Investment Consulting Inc., or Tanizawa Sogo Appraisal Co., Ltd.
Occupancy trends for the leasing operations of the real estate and accounts of assets and liabilities
within assets in trust that the Investment Corporation holds are as below.
22nd Fiscal Period

23rd Fiscal Period(January 1, 2014 to June 30, 2014)(July 1, 2014 to December 31, 2014)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)ofyen)
period) (%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

Nisshin
Palacestage
Daitabashi
Nisshin Palacestage HigashiA27
Nagasaki
A26

Occupancy

RentalRevenue(during
Ratio ofRate
period)Rental(at end of (Thousands Revenue (%)
period) (%)
of yen)(Note 1)
(Note 2)
Occupancy

1

94.1

39,801

1.4

1

90.0

38,666

0.8

1

97.7

46,420

1.7

1

96.3

45,8281.0

A28 Growth Maison Gotanda

1

100.0

27,344

1.0

1

100.0

27,376

0.6

A29 Growth Maison Kameido

1

89.3

32,376

1.2

1

86.2

30,4100.7

A30 Emerald House

1

100.0

49,348

1.8

1

98.0

41,741

0.9

A31 Harmonie Ochanomizu

1

91.2

39,809

1.4

1

93.5

35,2630.8

A32 Suncrest Shakujii-Koen

1

97.0

35,961

1.3

1

97.0

36,3440.8- 43 -

22nd Fiscal Period

23rd Fiscal Period(January 1, 2014 to June 30, 2014)(July 1, 2014 to December 31, 2014)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

GrowthShin-Yokohama
Belle
A34
Ueno-Okachimachi
A33

MaisonOccupancy

RentalRevenue(during
Ratio ofRate
period)Rental(at end of (Thousands Revenue (%)
period) (%)
of yen)(Note 1)
(Note 2)
Occupancy

1

86.9

33,246

1.2

1

95.6

33,317

0.7

1

98.3

33,576

1.2

1

98.3

30,191

0.7

A35 Grand Rire Kameido

1

100.0

26,619

1.0

1

100.0

26,6190.6

A36 Growth Maison Ikebukuro

1

90.4

26,208

0.9

1

90.5

24,272

0.5

A37 Growth Maison Yoga

1

97.3

22,653

0.8

1

94.9

21,746

0.5

A38 Route Tachikawa

1

96.6

20,293

0.7

1

96.6

20,942

0.5

A39 Shibuya-Honmachi Mansion

1

100.0

20,105

0.7

1

91.3

19,947

0.4

A40 City Heights Kinuta

1

100.0

17,629

0.6

1

100.0

17,664

0.4

1

93.0

25,146

0.9

1

86.0

23,651

0.5

A42 Capital Heights Kagurazaka

1

90.5

18,000

0.6

1

91.6

18,2490.4

A43 College Square Machida

1

100.0

18,268

0.7

1

100.0

18,2680.4

A44 Belair Meguro

1

100.0

15,901

0.6

1

88.1

16,195

0.4

A45 Wacore Tsunashima I

1

94.1

17,314

0.6

1

89.9

18,002

0.4

A46 Foros Nakamurabashi

1

100.0

17,958

0.6

1

88.8

17,954

0.4

A47 Growth Maison Kaijin

1

90.0

21,922

0.8

1

89.0

21,294

0.5

A48 College Square Machiya

1

100.0

14,706

0.5

1

100.0

14,706

0.3

A51 City House Tokyo Shinbashi

1

94.5

89,437

3.2

1

95.6

88,383

1.9

A52 Winbell Kagurazaka

1

98.6

105,410

3.8

1

100.0

103,227

2.2

1

92.5

70,931

2.6

1

90.5

68,082

1.5

1

93.3

47,715

1.7

1

88.8

45,511

1.0

A56 Casa Eremitaggio

1

97.0

28,492

1.0

1

91.2

30,3800.7

A59 Towa City Coop Shinotsuka II

1

92.8

33,315

1.2

1

91.3

33,307

0.7

A61 Bichsel Musashiseki

1

94.3

24,028

0.9

1

85.8

22,012

0.5

1

96.3

33,839

1.2

1

96.8

33,167

0.7

A63 Towa City Coop Sengencho

1

89.1

59,396

2.1

1

80.2

54,726

1.2

A64 Royal Park Omachi

1

90.6

24,956

0.9

1

88.1

24,1880.5

A41

Acseeds Tower KawaguchiNamiki

Nishiwaseda
MansionLexington
A54
Akebonobashi
A53

A62

Face

Lexel
MansionMatsugaya

Cresent
SquareUeno- 44 -

22nd Fiscal Period

23rd Fiscal Period(January 1, 2014 to June 30, 2014)(July 1, 2014 to December 31, 2014)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

A65

Lexington
Haginomachi

SquareOccupancy

RentalRevenue(during
Ratio ofRate
period)Rental(at end of (Thousands Revenue (%)
period) (%)
of yen)(Note 1)
(Note 2)
Occupancy

1

97.4

18,023

0.7

1

100.0

18,4280.4

A66 Visconti Kakuozan

1

100.0

11,774

0.4

1

89.7

11,3180.2

A71 Lexington Square Daitabashi

1

90.9

31,377

1.1

1

85.1

27,913

0.6

Lexington Square Honjo
A72
Azumabashi

1

96.9

17,881

0.6

1

97.0

17,226

0.4

A73 AMS TOWER Minami 6-Jo

1

91.8

50,486

1.8

1

83.7

45,814

1.0

A75 Spacia Ebisu

1

90.0

186,312

6.7

1

93.6

187,027

4.1

A76 Neo Prominence

1

88.9

63,037

2.3

1

93.9

61,481

1.3

A77 Invoice Shin-Kobe Residence

1

94.4

45,927

1.7

1

94.0

48,843

1.1

A78 Cosmo Court Motomachi

1

90.4

36,802

1.3

1

86.6

33,405

0.7

A79 Revest Honjin

1

95.0

31,304

1.1

1

92.5

29,805

0.6

A80 Revest Matsubara

1

91.2

28,954

1.0

1

93.7

27,735

0.6

1

89.5

21,891

0.8

1

92.1

20,277

0.4

A82 Alba Noritake Shinmachi

1

91.7

25,422

0.9

1

94.4

25,5390.6

A83 Revest Meieki Minami

1

93.6

24,919

0.9

1

95.4

25,521

0.6

A84 Revest Heian

1

98.4

23,570

0.9

1

100.0

24,5600.5

A85 Vendir Hamaotsu Ekimae

1

94.2

32,426

1.2

1

87.3

29,675

0.6

A86 Salvo Sala

1

91.5

23,992

0.9

1

93.5

23,253

0.5

A87 Excellente Kagurazaka

1

97.1

17,842

0.6

1

88.3

16,9340.4

A88 Luna Court Edobori

1

88.1

20,912

0.8

1

88.1

19,1220.4

A89 Winntage Kobe Motomachi

1

91.1

22,148

0.8

1

94.8

22,2000.5

A90 Queen's Court Fukuzumi

1

100.0

16,521

0.6

1

92.5

16,248

0.4

A91 Corp Higashinotoin

1

90.3

16,980

0.6

1

92.9

16,8720.4

A92 Belair Oimachi

1

96.1

15,415

0.6

1

92.9

13,875

0.3

A93 Siete Minami-Tsukaguchi

1

92.5

16,437

0.6

1

97.5

16,217

0.4

1

100.0

14,640

0.5

1

96.9

14,360

0.3

1

92.0

14,842

0.5

1

100.0

15,512

0.3

A81

Sun
Terrace
Ikebukuro

Prime
Life
A94 Isogami
Koen
HERMITAGE
A95
WEST

Minami

Sannomiya
NANBA- 45 -

22nd Fiscal Period

23rd Fiscal Period(January 1, 2014 to June 30, 2014)(July 1, 2014 to December 31, 2014)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

A96

Century
1-bankan

Park

Shinkawa

Occupancy

RentalRevenue(during
Ratio ofRate
period)Rental(at end of (Thousands Revenue (%)
period) (%)
of yen)(Note 1)
(Note 2)
Occupancy

1

100.0

17,190

0.6

1

95.5

18,0700.4

A97 West Avenue

1

85.0

12,666

0.5

1

85.0

11,5100.2

A98 Little River Honmachibashi

1

93.9

12,971

0.5

1

93.8

12,7580.3

A99 Prime Life Mikage

1

93.4

11,809

0.4

1

93.3

11,9800.3

Subtotal

63

93.8

2,022,623

73.0

63

92.7

1,965,139

42.6

B8 Kindai Kagakusha Building

1

95.0

38,735

1.4

1

100.0

35,4050.8

B9 Shinjuku Island

1

100.0

(Note 3)(Note 3)1100.0(Note 3)0.4

B14 Lexington Plaza Nishigotanda

8

100.0

126,690

4.6

8

100.0

138,450

3.0

B15 Cross Square NAKANO

1

64.3

28,685

1.0

1

64.3

32,3090.7

B16 Ohki Aoba Building

1

100.0

40,559

1.5

1

100.0

40,3970.9

B17 Lexington Plaza Hachiman

1

100.0

163,313

5.9

1

100.0

167,597

3.6

B18 AEON TOWN Sukagawa

1

100.0

142,116

5.1

1

100.0

142,505

3.1

Subtotal

1497.9

557,297

20.1

14

98.0

573,863

12.4

1

100.0

2,443

0.1

1

100.0

2,443

0.1

－

－

18,592

0.7

－

－

－

－

C22 Bon Sejour Yotsugi (Note 4)－－

17,485

0.6

－

－

－

－

C23 Bon Sejour Hino (Note 4)－－

16,639

0.6

－

－

－

－

Bon Sejour Musashi Shinjo
C24(Note 4)－－

13,809

0.5

－

－

－

－

C25 Bon Sejour Komaki (Note 4)－－

35,226

1.3

－

－

－

－

Bon
SejourHadanoShibusawa (Note 4)－－

18,441

0.7

－

－

－

－

C27 Bon Sejour Itami (Note 4)－－

12,442

0.4

－

－

－

－

Subtotal

1

100.0

135,081

4.9

1

100.0

2,453

0.1

1

100.0

27,512

1.0

1

100.0

104,832

2.3

1

100.0

29,903

1.1

1

100.0

108,407

2.4

－

－

－

－

1

100.0

310,661

6.7

－

－

－

－

1

100.0

217,607

4.7

C1

Stop Parking Kanda-Sudacho
Bon
SejourChitoseC21 Funabashi(Note 4)

C26

Hotel MyStays Kanda(Note 5)
Hotel MyStays Asakusa
D2(Note 5)
Hotel MyStays Kyoto-shijo
D3(Note 6)
MyStaysShin-Urayasu
D4
Conference Center (Note 6)
D1- 46 -

22nd Fiscal Period

23rd Fiscal Period(January 1, 2014 to June 30, 2014)(July 1, 2014 to December 31, 2014)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

Hotel MyStays Maihama(Note 6)
Hotel Vista Premio Dojima
D6(Note 6)
Hotel
MyStays
D7
Nagoya-Sakae (Note 6)
Hotel
MyStays
D8
Sakaisuji-Honmachi (Note 6)
Hotel MyStays Yokohama
D9(Note 6)
Hotel MyStays Nippori (Note
D10
6)
Hotel
MyStays
D11 Fukuoka-Tenjin-Minami(Note 6)
Flexstay Inn Iidabashi (Note
D12
6)
Hotel
MyStays
Ueno
D13
Inaricho (Note 6)
Flexstay Inn Shinagawa
D14(Note 6)
Flexstay Inn Tokiwadai (NoteD15
6)
Flexstay Inn Sugamo (NoteD16
6)
Hotel MyStays Otemae (NoteD17
6)
FlexstayInn
Kiyosumi
D18
Shirakawa (Note 6)
Flexstay Inn Nakanobu P1
D19(Note 6)
Flexstay Inn Nakanobu P2
D20(Note 6)
D5

Occupancy

RentalRevenue(during
Ratio ofRate
period)Rental(at end of (Thousands Revenue (%)
period) (%)
of yen)(Note 1)
(Note 2)
Occupancy

－

－

－

－

1

100.0

166,812

3.6

－

－

－

－

1

100.0

160,910

3.5

－

－

－

－

1

100.0

185,561

4.0

－

－

－

－

1

100.0

123,501

2.7

－

－

－

－

1

100.0

124,297

2.7

－

－

－

－

1

100.0

72,782

1.6

－

－

－

－

1

100.0

90,326

2.0

－

－

－

－

1

100.0

55,564

1.2

－

－

－

－

1

100.0

50,423

1.1

－

－

－

－

1

100.0

44,932

1.0

－

－

－

－

1

100.0

57,136

1.2

－

－

－

－

1

100.0

50,354

1.1

－

－

－

－

1

100.0

74,450

1.6

－

－

－

－

1

100.0

36,629

0.8

－

－

－

－

1

100.0

21,911

0.5

－

－

－

－

1

100.0

12,1570.3

Subtotal

2

100.0

57,416

2.1

20

100.0

2,069,261

44.9

Total

80

95.1

2,772,419

100.0

98

96.1

4,610,717

100.0(Note 1) “Occupancy Rate” is computed by dividing the leased area by leasable area, and isrounded to one decimal place.
(Note 2) “Rental Revenue (during period)” indicates each property’s leasing operation revenues
during the fiscal period, and has been rounded down to the nearest thousand yen.
(Note 3) Undisclosed due to inability to gain approval from the property tenant for document
disclosure.
(Note 4) Since the property was sold during the 22nd fiscal period (as of May 22, 2014), thecalculation period of the rental revenue of the relevant property was set for the period commenced
on January 1, 2014 and ended on May 22, 2014.
(Note 5) Since the two (2) properties were acquired as of May 23, 2014, the calculation period of
the rental revenue of the relevant properties during the 22th fiscal period was set for the period
commenced on May 23, 2014 and ended on June 30, 2014.
- 47 -

(Note 6) Since the eighteen (18) properties were acquired as of July 7, 2014, the calculation periodof the rental revenue of the relevant properties during the 23th fiscal period was set for the period
commenced on July 17, 2014 and ended on December 31, 2014.
4

Status of Size and Market Value of Trading Assets

No relevant items
5

Status of Other Assets

Trust beneficiary interests in real estate and real estate held in trust are listed together in the “3 Asset
Portfolio Including Real Estate” above.

As of the end of this reporting period, there are no

investments in specified assets that are significant investment targets for INV outside of the above 3.
6Asset Holdings Outside of Japan or the Region

There are no relevant items outside of Japan or the region.
Capital expenditures for properties held by INV
1Schedule for capital expenditures

The schedule for the principal capital expenditures for property maintenance construction,etc. as of the end of the fiscal period for the properties held by INV is as follows.
Estimated Cost (Thousands of yen)
Scheduled Time of
Name of Property

Location

Payment for

PurposeAdvance
Implementation

Total

the Fiscal
Payments
PeriodNisshin
A26

Palacestage
Daitabashi

A32

SuginamiIntercom renovation

Ward, Tokyo

work

Suncrest

Nerima Ward,

Shakujii-Koen

Tokyo

From June 2015 toJune 2015

Renewal work on
backupgenerators- 48 -

power

From June 2015 toJune 2015

5,303

―

―

8,824

―

―

B15

B16

B16

D06

Cross

SquareNAKANO
Ohki

Aoba

Building

Nakano Ward,

Renovation work on From February 2015Tokyo

the 8th – 10th floors

SendaiCity,

Miyagi

Aoba

Building

Sendai

work

City,

Miyagito a tenant on the

Prefecture

6th floor

Hotel Vista Premio

Osaka-shi,

Dojima

Osaka

Hotel

MyStays

OtemaeJune 2015

Work corresponding

Renewal work on
storagebatteryof――

40,000

―

―

5,000

―

―

9,140

―

―

7,200

―

―

From April 2015 toApril 2015
From April 2015 toequipment
Installation

D17

From May 2015 toon exterior walls

Prefecture

Ohki

Maintenance

8,100

to June 2015

April 2015a

Osaka-shi,

wireless local area From April 2015 toOsaka

network for guest

April 2015

rooms

2

Capital expenditures for the fiscal period ended December 31, 2014

The principal construction constituting capital expenditures for the real estate assets for the fiscal
period ended December 31, 2014 is as follows.

Capital expenditures for the fiscal period was

116,923 thousand yen, and together with 29,710 thousand yen of repair cost included in this fiscal
period’s expenses, construction work totaling 146,633 thousand yen was implemented.

Name of Property

Nisshin
A26

B8

Implementation

Renewal work on prepaid hot

Ward, Tokyo

water units

Nishiwaseda

Shinjuku

Maintenance

Cresent Mansion

Ward, Tokyo

miscellaneous drainage pipe

Palacestage

Royal
A64

Time of

PurposeSuginami

Daitabashi

A53

Location

Park

OmachiSendaiCity,

MiyagiPrefecture

Payment (Thousands ofyen)

From December
2014 to December

6,258

2014
work

on

Renewal work on air conditioning
systemFrom September
2014 to December

28,0802014
From December
2014 to December

4,500

2014

Kindai Kagakusha

Shinjuku

Renewal work on air conditioning

Building

Ward, TokyosystemFrom September
2014 to October
2014- 49 -

15,573

Ohki
B16

Aoba

Building

SendaiCity,

Miyagi

Maintenance work on electricalinstallations

Prefecture

From December
2014 to December

3,605

2014

Other construction

58,907
Total

3

116,923

Reserved funds for long-term maintenance plan (repair reserves)

INV has reserved funds, as below, from the cash flow of the relevant fiscal period towards
large-scale maintenance repairs in the medium to long term future in accordance with the long-term
maintenance plan for each property.

19th Fiscal

20th Fiscal

21st Fiscal

22nd Fiscal

23rd Fiscal

PeriodPeriodPeriodPeriodPeriodFrom July 1,

From January

From July 1,
Fiscal period

2013 to2012 toDecember 31,
2012

From January 1, From July 1, 20142014 to June 30, to December 31,

1, 2013 to June
December 31,

2014

2014

30, 2013
2013

Reserved funds at beginning of
periodAmount reserved (Note)
Amount reversed (Note)
Amount carried over for next
fiscal period

487,561

541,609571,543524,730

579,682

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

151,076

165,233

165,271

199,177

268,495

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

97,028135,298

212,084

144,225

109,812thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

541,609571,543524,730

579,682

738,365

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen(Note) The amount reserved for the relevant fiscal period includes the reserves for acquired
properties, and the amount reversed includes the reserves for disposed properties.

- 50 -

Overview of Liabilities and Expenses
1

Statement of Operating Expenses(Thousands of yen)Item22nd Fiscal Period

23rd Fiscal Period

Jan. 1, 2014 to June 30, 2014

Jul 1, 2014 to December 31, 2014(a) Asset management fees

125,000

125,000(b) Asset custodian fees

3,906

3,976

(c) Administrative services fees

18,224

26,672(d) Directors’ remuneration

4,800

4,800

(e) Other operating expenses

107,404

93,493259,336

253,942

Total
2

Borrowing Conditions

Borrowing conditions by financial institution at the end of this reporting period are as below.

Balance at Start Balance at End

AverageBorrowingof Reportingof Reporting

Interest

Repayment

Payment

Date

PeriodPeriodRate

Date

Method(Thousands of(Thousands of(%) (Note

yen)

yen)

1)

Type

LenderSumitomo

Mitsui

Banking
3,497,083―

3,497,083―

3,497,083―

2,997,500―

13,488,750―

4,743,811―

4,743,811―

Shinsei Bank, Limited.

3,450,044―

Citibank Japan Ltd.

1,725,022―

Corporation
The Bank of Tokyo-Mitsubishi
Short-term
DebtUFJ, Ltd.

May. 23,
2014

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSubtotal
Sumitomo

MitsuiDebt

The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

(Note 2)

Secured
0.946

May. 22, 2015 (Note 4) (Note 5) Convent
i-onalBanking

Corporation
Long-term

Purpose Notes

Dec. 20,2013- 51 -

Secured1.646

Dec. 20, 2016 (Note 4) (Note 5) Convent
i-onalShinsei Trust & Banking Co.,
Ltd.
Aozora Bank, Ltd.
Sumitomo

Mitsui

1,725,022―

1,164,389――

12,400,000―

12,400,000―

12,400,000―

6,500,000

Banking

Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.
Jul. 17, 2014

Shinsei Bank, Limited.

Secured
0.951

Jul. 14, 2017 (Note 6) (Note 7) Convent
i-onalCitibank Japan Ltd.

―

6,500,000―

5,000,000―

2,100,000

17,552,100

57,300,000

2,700,000

2,700,000

1.900

Mar. 31, 2018

2,860,000

2,860,000

1.900

Mar. 31, 2019

Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited.
Subtotal

Lump

Mitsubishi

UFJ

Trust

Sum

and
Sep. 28.

Banking Corporation

Secured(Note 9) (Note 7)2012(Note 10)

1,830,000

1,830,000

1.900

Mar. 31, 2020

2,570,000

2,570,000

1.900

Mar. 31, 2019 (Note 10)

Subtotal

9,960,000

9,960,000

Total

41,000,850

67,260,000(Note 1) Average interest rate is the daily weighted average number of the period according to thenumber of days, and is rounded to three decimal place.
(Note 2) Includes long-term debt scheduled to be repaid within 1 year.
(Note 3) Includes long-term debt in trust scheduled to be repaid within 1 year.
(Note 4) Prepaid on July 17, 2014
(Note 5) Used for purposes including repayment of existing debt
(Note 6) Paid in one lump sum on the principal maturity date
(Note 7) The funds raised through borrowings are mainly used to acquire real estate properties ortrust beneficiary interests.
(Note 8) Mitsubishi UFJ Trust and Banking Corporation is the trustee of the REIT of which theInvestment Corporation is the beneficiary, and has borrowed funds on Sep. 28, 2012 from Prudential
Mortgage Asset Holdings 1 Japan Investment Limited Partnership of Prudential Financial Inc. Group.
The Investment Corporation received said loan (after deduction of reserves) as grant of trust
principal of said REIT from Mitsubishi UFJ Trust and Banking Corporation on the same date.
(Note 9) On each principal and interest payment date (every 3 months) that occurs after 5 years
from the borrowing date, amounts paid will be those calculated under the assumption that the- 52 -

Convent
i-onalrepayment of the balance of the principal will be by the equal payment method for a term of 30 years(total 120 payments). The balance remaining after the payments above will be repaid in one lumpsum on the principal maturity date.
(Note 10) On each principal and interest payment date (every 3 months) that occurs after 3 years
from the borrowing date, amounts paid will be those calculated under the assumption that therepayment of the balance of the principal will be by the equal payment method for a term of 27 years(total 108 payments). The balance remaining after the payments above will be repaid in one lumpsum on the principal maturity date.
3

Investment Corporation Bonds

Nothing applicable.
4

Short-Term Investment Corporation Bonds

Nothing applicable.
5

Investment Unit Options

Nothing applicable.

- 53 -

Buying and Selling for the Fiscal Period Ended June 30, 2014
1

Buying and Selling, etc. of Real Estate and Asset-Backed Securities, etc.

Acquisition
Name of Property
Acquisition Date

Acquisition Price(Thousands of yen)

D3

Hotel MyStays Kyoto-shijoJul. 17, 2014

6,024,460

D4

MyStays Shin-Urayasu Conference Center

Jul. 17, 2014

4,930,200

D5Hotel MyStays Maihama

Jul. 17, 2014

4,870,312

D6

Hotel Vista Premio Dojima

Jul. 17, 2014

3,845,400

D7

Hotel MyStays Nagoya-Sakae

Jul. 17, 2014

2,958,000

D8Hotel MyStays Sakaisuji-Honmachi

Jul. 17, 2014

2,514,820

D9

Hotel MyStays Yokohama

Jul. 17, 2014

2,119,900

D10

Hotel MyStays Nippori

Jul. 17, 2014

1,898,540

D11

Hotel MyStays Fukuoka-Tenjin-Minami

Jul. 17, 2014

1,570,520

D12

Flexstay Inn Iidabashi

Jul. 17, 2014

1,381,660

D13

Hotel MyStays Ueno InarichoJul. 17, 2014

1,331,960

D14

Flexstay Inn Shinagawa

Jul. 17, 2014

1,242,500

D15

Flexstay Inn Tokiwadai

Jul. 17, 2014

1,242,500

D16

Flexstay Inn Sugamo

Jul. 17, 2014

1,192,800

D17

Hotel MyStays Otemae

Jul. 17, 2014

1,192,800

D18

Flexstay Inn Kiyosumi Shirakawa

Jul. 17, 2014

749,476

D19

Flexstay Inn Nakanobu P1

Jul. 17, 2014

589,442

D20

Flexstay Inn Nakanobu P2

Jul. 17, 2014

283,290

Total

39,938,580(Note) Acquisition price do not include various costs (brokerage commissions, taxes and otherpublic charges) required for acquisition or transfer of the property, and indicate the purchase and saleprice of the property as described in the the trust beneficiary purchase agreement.
2

Buying and Selling, etc. of Other Assets

Assets other than those described above were mostly bank deposits or bank deposits within assets intrust.
- 54 -

3

Survey of Prices, etc. of Specified Assets

Real Estate Transactions
Acquisition /
DisposalSpecified Transaction
Assets Type
Date

Name of Property

D3
D4

Hotel MyStays Kyoto-shijo
MyStaysShin-Urayasu

Conference Center

Acquisition / orReal Estate
Disposal Price Appraisal Value(Thousands of (Thousands of
yen)
yen)
6,024,460

6,110,000

4,930,200

4,980,000

D5Hotel MyStays Maihama

4,870,312

4,920,000

D6Hotel Vista Premio Dojima

3,845,400

3,900,000

2,958,000

3,000,000

2,514,820

2,530,000

D7
D8
D9

Hotel

MyStays

Nagoya-Sakae
Hotel

MyStays

Sakaisuji-Honmachi

2,119,900

2,150,000

1,898,540

1,910,000

1,570,520

1,580,000

1,381,660

1,390,000

1,331,960

1,340,000

D14 Flexstay Inn Shinagawa

1,242,500

1,250,000

D15 Flexstay Inn Tokiwadai

1,242,500

1,250,000

Hotel MyStays Yokohama

D10 Hotel MyStays Nippori

Real Estate,
Trust
AcquisHotel
MyStays
Beneficiaryition D11 Fukuoka-Tenjin-MinamiInterests
D12 Flexstay Inn Iidabashi
D13

Hotel

MyStaysJul. 17,
2014

Ueno

Inaricho

D16 Flexstay Inn Sugamo

1,192,800

1,200,000

D17 Hotel MyStays Otemae

1,192,800

1,200,000

749,476754,000

D19 Flexstay Inn Nakanobu P1

589,442593,000

D20 Flexstay Inn Nakanobu P2

283,290

285,000

D18

FlexstayInn

Kiyosumi

Shirakawa

Name of Appraiser

Date of
Appraisal

Japan Real Estate
InstituteApr. 30,
2014(Note 1) Acquisition price do not include various costs (brokerage commissions, taxes and otherpublic charges) required for acquisition of the property, and indicate the purchase and sale price ofthe property as described in the the trust beneficiary purchase agreement.
(Note 2) The real estate appraisal described above is conducted by applying “Real Estate Appraisal
Standard Section 3: appraisals concerning prices of real estate subject to securitization.”
4

Transactions with Interested Parties(1)

Transactions

Nothing applicable.

- 55 -

(2)Commissions Paid

Nothing applicable.
5

Transactions between the Asset Manager in Other Businesses of the Asset Manager

As the Asset Manager (Consonant Investment Management Co., Ltd.) does not engage in any otherbusiness, such as the first financial instruments business and the second financial instruments
business, the building lots and buildings transaction business, or the designated real estate joint
business, there are no applicable transactions.
Financial Condition
1

Assets, Liabilities, Principal, and Profit and Loss

Please refer to “II. Balance Sheet,” “III. Statement of Income,” “IV. Statement of Unitholders’Equity,” “V. Notes” and “VI. Statement of Cash Distribution”.
2

Changes in the Calculation Method of Depreciation Expenses

Nothing applicable.
3

Changes in the Evaluation Method of Real Estate, etc.

Nothing applicable.
4

Beneficiary Certificates of Investment Trusts, etc. Set Up by the Company

Nothing applicable.
Other
1

Notice(1) General Meeting of Unitholders- 56 -

INV’s General Meeting of Unitholders was held on November 28, 2014.

The agenda which wereapproved at the General Meeting of Unitholders are as follows.
Proposal
Amendment

Overview

Proposal

Partialto(1) In order to allow the Investment Corporation to entrust

No. 1

Articles of Incorporation

the management of the real estate that belongs to theinvestment assets of the Investment Corporation, theInvestment Corporation amended the relevant article asnecessary.
(2) In order to clarify, in light of the recent trends in theeconomic environment, the real estate market, the leasing
market, the real estate investment trust market and othermarkets, the standard for distributions in excess of theamount of distributable profit under the policy on the
distribution of funds was amended.
(3) In order to promptly hold board of directors meetings
whenever urgently necessary, the Investment Corporation
amended the relevant article to permit a shortening of thedelivery period of the convocation notice of such meetings,
in case of urgency, without the consent of all of theexecutive directors and supervisory directors.
(4) With the consent of the asset management company, theasset management fees for the period from January 2013 to
December

2014

have

been

decreased.

However,considering the expansion of the Investment Corporation’s
asset scale, profit level and other factors caused by its
internal and external growth, the Investment Corporation
has obtained the consent of the asset management company
that the amount of the asset management fees for the period
from January 2015 to December 2015 will be increased
from the amount in 2014, but will be less than the amount of
the asset management fees if an amendment was not madeand the current asset management fees are applied, for the
purpose of paying an appropriate amount of the asset
management

fees.

Accordingly,

theInvestment

Corporation amended the standards concerning the amount- 57 -

and payment of the asset management fees for the period
from January 2015 to December 2015.
(5) With amendments to the Enforcement Ordinance of theAct

Concerning

Investment

TrustsandInvestment

Corporations, the Investment Corporation provides that its
purpose shall be to manage assets mainly as investment inReal Estate, etc. Assets defined in the Enforcement
Ordinance of the Act Concerning Investment Trusts andInvestment Corporations. In addition, corresponding to theamendments above, the Investment Corporation added or
removed provisions as necessary, change or clarify
expressions or otherwise alter wordings of the relevant
articles.
ProposalAppointment of One (1)No. 2

Executive Director

ProposalAppointment of One (1)No. 3

SubstituteNaoki Fukuda was appointed.
Christopher Reed was appointed.

Executive

Director
ProposalAppointment of Two (2)No. 4Supervisory Directors

Takashi Takahashi and Hiroyuki Fujimoto were appointed.

(2) Board of Directors of Investment Corporation
There are no execution and amendment of the principal agreement approved by the Board of
Directors of the Investment Corporation in the fiscal period ended December 31, 2014.
2

Disclosure of companies owing real estate overseas

Nothing applicable.
3

Disclosure of real estate owned by companies owing real estate overseas

Nothing applicable.

- 58 -

4

Risk Factors

An investment in our units involves significant risks. The principal risks with respect to investment
in Invincible Investment Corporation are as follows.
Property and Business Risks

Any adverse conditions in the Japanese economy could adversely affect our properties.



We may not be able to acquire properties to execute our growth and investment strategy in amanner that is accretive to earnings.



Our reliance on Fortress Group could have a material adverse effect on our business.

Because of our repositioning of our portfolio in 2014 to include hotels, which include leaseterms that contain a variable rent structure, our results of operations will be inherently morevolatile and not comparable to previous fiscal periods, and we may not be able to effectively
manage our hotel portfolio.

Increases in prevailing market interest rates, particularly following the Bank of Japan’s
announcement of a major new policy for monetary easing, would increase our interest
expense and may result in a decline in the market price of our units.

The high geographic concentration of our real estate portfolio in the greater Tokyo area andother major cities could have a material adverse effect on our business.

Competition for tenants and hotel guests may adversely affect our ability to retain ourcurrent tenants and find new tenants, and to maintain occupancy rates and revenue.



Our hotels are subject to the operating risks common to the hospitality industry, which havea direct effect on the variable rent component of our portfolio’s revenue.

The cyclical and seasonal nature of the hospitality industry may cause fluctuations in ouroperating performance, which could have a material adverse effect on us and our variable
rent revenues.



We may incur unexpected expenses, expenditure or other losses for repair or maintenance ofour properties, and our hotels require periodic capital reinvestment for renovation.



Substantially all of our hotels are leased to MyStays Hotel Management and subject to therisk of default under its hotel lease agreements.



Our focus on residential properties could have a material adverse effect on our business.



We may lose rental revenues in the event of defaults by end-tenants under their leaseagreements for properties other than hotels.



Master leases may give rise to certain risks.



We may suffer large losses if any of our properties incur damage from a natural or
man-made disaster or acts of violence.
- 59 -



We may be strictly liable for an unforeseen loss, damage or injury suffered by a third party
at our properties.



Because most of our operating expenses are largely fixed, we may suffer adverse
consequences if our rental revenues decline.



We may not be able to promptly acquire suitable properties or sell those in our portfolio on
acceptable terms in response to changing economic, financial or investment conditions.



Defects relating to our properties may adversely affect our financial condition and results ofoperations.



We rely on expert appraisals and engineering, environmental and seismic reports, which are
subject to significant uncertainties.



The environmental assessments of our properties made prior to our ownership may not haveuncovered all environmental liabilities, and Japanese laws subject property owners to strict
environmental liabilities.



Decreases in tenant leasehold and/or security deposits would increase our funding costs.



Any inability to obtain financing for future acquisitions, or any restrictions on our activities
under our financing arrangements, could adversely affect us.

A high LTV ratio may increase our exposure to changes in interest rates and have a material
adverse effect on our results of operations.



We may suffer impairment losses relating to our properties and may also suffer adverse tax
effects upon recognizing impairments.



The performance of Fortress Group is not an indicator or guarantee of our future results.



Our financial statements are prepared in accordance with Japanese GAAP, which differs incertain material respects from IFRS, U.S. GAAP and generally accepted accounting
principles and financial reporting standards in other jurisdictions.



We rely on industry and market data that are subject to significant uncertainties.

Management and Governance Risks


Our success depends on the performances of service providers to which we are required toassign various key functions.



There are potential conflicts of interest between us and certain Fortress Group affiliates or
Fortress Group-related companies including the Asset Manager and MyStays HotelManagement.



We depend on the efforts of our executive director and key personnel of the Asset Manager.

Unitholders have limited control over our policies.



The Japanese regulatory authorities have tightened regulatory supervision of J-REITs andtheir asset managers and their corporate governance.
- 60 -



If unitholders do not exercise their voting rights, we may count their votes in favor of
proposals at a general meeting of unitholders.

Taxation Risks


Our failure to satisfy a complex series of requirements pursuant to Japanese tax regulations
would disqualify us from certain taxation benefits and significantly reduce our distributions
to our unitholders.



If the Japanese tax authorities disagree with the interpretations we used for prior periods, wemay be forced to pay additional taxes for those periods.



We may not be able to benefit from reductions in certain real estate taxes enjoyed byqualified J-REITs.



Changes in Japanese tax laws may significantly increase our tax burden.

We expect to be treated as a “passive foreign investment company” for U.S. federal income
tax purposes.

Unitholders may be subject to U.S. Foreign Account Tax Compliance Act (FATCA)
withholding tax after 2016.

Legal and Regulatory Risks


Our ownership rights in some of our properties may be declared invalid or limited.



We may lose our rights in a property we own if the purchase of the property is
recharacterized as a secured financing.



Acquisition of properties for which third parties hold leasehold interests in the land and own
the buildings may subject us to various risks.



Our leasehold interests may be terminated or may not be asserted against a third party insome cases, or our leases with our tenants could be modified.



We currently hold several properties in the form of compartmentalized ownership interests(kubun shoyu-ken) and our rights relating to such properties may be affected by theintentions of other owners.



We may acquire properties in the form of co-ownership (kyoyu) and our rights relating tosuch properties may be affected by the intentions of other owners.

Tax increases or adverse changes in applicable laws may affect our potential liabilities
relating to our properties and operations.

Compliance with energy conservation regulations in Japan may adversely affect our
financial results.



Our costs of complying with regulations applicable to our properties could adversely affectour results of operations.
- 61 -



We own a substantial portion of our properties through trust beneficiary interests and may
suffer losses as a trust beneficiary.



The Alternative Investment Fund Managers Directive may negatively affect our ability tomarket our units in the EEA and increase our compliance costs associated with themarketing of our units in the EEA.



Our units may be deemed to constitute “plan assets” for ERISA purposes, which may lead tothe rescission of certain transactions, tax or fiduciary liability and our being held in
violation of ERISA requirements.

5

Other

Unless there are specific statements to the contrary, monetary figures are rounded down to thenearest yen and percentages are rounded off for unspecified values.

- 62 -

II.

Balance Sheet(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Accrued revenue
Accounts receivables
Prepaid expenses
Consumption tax receivable
Advance payment
OthersAllowance for doubtful accounts※1 759,058※1 2,765,504

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Equipment
Accumulated depreciation
Equipment, net
Building improvements
Accumulated depreciation
Building improvements, net
Land
Buildings in trust
Accumulated depreciation※1 9,153,872

2,574
71,193
120,941
17,1380(1,391)

4,011,521
82
644,552
233,324
1,319,253
0(1,968)3,735,018

15,360,637※1 85,914※1 85,914(7,783)(8,324)

78,131

77,589※1 38,862※1 38,862(17,352)(18,548)※1

21,51020,314※1 2,779※1 2,779(1,138)(1,204)

1,640

1,574

※1 711,834※1 711,834※1 31,162,188※1 45,227,883(2,623,404)(3,136,903)

Buildings in trust, net

28,538,783

42,090,979

Equipment in trust
Accumulated depreciation※1 7,151,824※1 10,400,867(1,891,879)(2,186,062)

Equipment in trust, net

5,259,944

8,214,804

Building improvements in trust
Accumulated depreciation※1 321,317※1 321,799(109,047)(118,744)

Building improvements in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment

212,270203,054※1 177,438※1 268,476(85,898)(103,974)

91,540164,502※1 40,447,565※1 63,258,940

75,363,220

114,743,593

Intangible assets
Others

106

76

Total intangible assets

106

76

Total investment and other assets- 63 -

Guarantee deposits
Long-term prepaid expenses
OthersTotal investments and other assets
Total non-current assets
Total assets- 64 -

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
10,000
119,338
34,070(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)
10,000328,159
34,765

163,409372,924

75,526,736

115,116,594

79,261,754

130,477,232

Fiscal Period ended
June 30, 2014(as of June 30, 2014)
Liabilities
Current liabilities
Accounts payable
Short-term debts
Current portion of long-term debts
Current portion of long-term debts in trust
Accrued liabilities
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Advances received
Deposits received

143,439

32,733
121,934520
143,637
357,52232,927

141,428※1 1,200,000※118,167
22,872
127,170578
371,084
23,89631,873,567

1,905,197※1 9,960,000
1,025,726
28,663※156,100,000※1 13,488,750※1 17,552,100

Total current liabilities
Non-current liabilities
Long-term debts
Long-term debts in trust
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Unappropriated retained earnings/loss
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets- 65 -(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014(as of December 31, 2014)※1 9,941,832

1,109,146
28,663

11,014,390

67,179,642

42,887,957

69,084,839

29,134,389

53,096,413

6,264,432
974,975

6,264,432
2,031,546

7,239,407

8,295,97836,373,796

61,392,392※2 36,373,796※2 61,392,392

79,261,754

130,477,232

III.

Statement of Income

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
Operating revenues
Rental revenues
Gain on sales of properties
Total operating revenues(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)※1 2,772,419※1 4,610,717※2 1,003,352-

3,775,772

4,610,717※1 1,281,791※1 1,586,854

125,000
4,800
3,906

125,000
4,800
3,976

18,224
107,404
1,541,127
2,234,644

26,672
1,527
91,966
1,840,796
2,769,920

404
475
898

537
483

Operating expenses
Property related expenses
Asset management fees
Directors’ remuneration
Asset custodian fees
Administrative service fees
Provision of allowance for doubtful accounts
Other operating expenses
Total operating expenses
Operating income
Non-operating revenues
Interest revenues
Reversal of allowance for doubtful accounts
Miscellaneous income
Total non-operating revenues

1,777

1,021

Non-operating expenses
Interest expenses
Finance related costs
Investment unit issuance expenses
Miscellaneous losses

376,514842,043
115,4385

365,480
294,738
152,101
14

Total non-operating expenses

1,334,001

812,334

Ordinary income

902,420

1,958,607

Net income before taxes

902,420

1,958,607

Corporate tax, etc.

605

605

Total corporate tax, etc.

605

605

Net income

901,815

1,958,002

Retained earnings at the beginning of the period
Unappropriated retained earnings/Loss at the end of theperiod73,15973,543974,975

2,031,546- 66 -

IV.

Statement of Unitholders’ Equity

Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)(Unit: thousands of yen)
Unitholders’ Equity
Surplus
Unitholders’ Capital

Balance at the beginningof the period

29,134,389

Total Unitholders’EquityTotal Net Assets

Capital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

446,0036,710,435

35,844,824

35,844,824(372,843)(372,843)(372,843)(372,843)

901,815

901,815

901,815

901,815

Total Surplus

Change during the period
Distributions
surplusfrom

Net income
Total change during theperiodBalance at the end of theperiod--528,972

528,972

528,972

528,972

29,134,389

6,264,432

974,975

7,239,407

36,373,796

36,373,796

Fiscal Period ended December 31, 2014 (from July 1, 2014 to December 31, 2014)(Unit: thousands of yen)
Unitholders’ Equity
Surplus
Unitholders’ Capital

Balance at the beginningof the period

29,134,389

Capital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

974,975

Total Surplus
7,239,407

Total Unitholders’EquityTotal Net Assets

36,373,796

36,373,796

23,962,024

23,962,024

Change during the period
Issuanceofinvestment units
Distributions
surplus

new23,962,024

from

Net income
Total change during theperiodBalance at the end of theperiod(901,431)(901,431)(901,431)(901,431)

1,958,002

1,958,002

1,958,002

1,958,002

23,962,024-

1,056,571

1,056,571

25,018,595

25,018,595

53,096,413

6,264,432

2,031,546

8,295,97861,392,392

61,392,392- 67 -

V.

Notes[Notes Concerning Significant Accounting Policies]

By Period
Item
1. Method of depreciationof non-current assets

2. Method of calculatingallowances

3. Revenue and expense
recognition

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)(a) Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plantand equipment are as follows.
Buildings
40-77 years
Equipment
8-24 years
Building improvements
7-18 years
Buildings in trust
6-66 years
Equipment in trust
2-32 years
Building improvements in trust
4-55 years
Tools, furniture and fixtures in trust 2-15 years(b)Intangible assets
The straight-line method is used.
(c) Long-term prepaid expenses
The straight-line method is used.
Allowance for doubtful accounts
To reserve for losses on doubtful accounts,
allowances are provided for normal
receivables using a rate determined based on
past bad debt experiences, and specificallowances are provided for accounts with apossibility of default based on the estimatedamounts considered to be uncollectible byconsidering the collectability of accounts on
an individual basis.
Accounting treatment of property taxes andother taxes
With respect to property taxes, city planningtaxes and depreciable asset taxes, of the tax
amount assessed and determined, the amountcorresponding to the relevant fiscal period is
accounted for as property related expenses.
Of the amounts paid to the seller for
acquisitions of real estate, the amountequivalent to property taxes is capitalized aspart of the acquisition cost of the real estate ortrust beneficiary interests in real estate insteadof being charged as expense. The amountequivalent to property taxes that was included
as part of the acquisition of real estate during
this fiscal period is JPY 10,574 thousand.

- 68 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)(a) Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plantand equipment are as follows.
Buildings
77 years
Equipment
8-24 years
Building improvements
7-18 years
Buildings in trust
2-66 years
Equipment in trust
2-32 years
Building improvements in trust
4-55 years
Tools, furniture and fixtures in trust 2-15 years(b)Intangible assets
The straight-line method is used.
(c) Long-term prepaid expenses
The straight-line method is used.
Allowance for doubtful accounts
To reserve for losses on doubtful accounts,
allowances are provided for normal
receivables using a rate determined based on
past bad debt experiences, and specificallowances are provided for accounts with apossibility of default based on the estimatedamounts considered to be uncollectible byconsidering the collectability of accounts on
an individual basis.
Accounting treatment of property taxes andother taxes
With respect to property taxes, city planningtaxes and depreciable asset taxes, of the tax
amount assessed and determined, the amountcorresponding to the relevant fiscal period is
accounted for as property related expenses.
Of the amounts paid to the seller for
acquisitions of real estate, the amountequivalent to property taxes is capitalized aspart of the acquisition cost of the real estate ortrust beneficiary interests in real estate insteadof being charged as expense. The amountequivalent to property taxes that was included
as part of the acquisition of real estate during
this fiscal period is JPY 76,921 thousand.

Fiscal Period ended
Fiscal Period ended
June 30, 2014
December 31, 2014
(from January 1, 2014 to(from July 1, 2014 to
Item
June 30, 2014)
December 31, 2014)
4. Other significant matters (1)Accounting treatment of trust beneficiary (1)Accounting treatment of trust beneficiary
which constitute the basis
interests in real estateinterests in real estatefor preparation of
As to trust beneficiary interests in real
As to trust beneficiary interests in real
financial statements
estate, all accounts of assets and liabilities estate, all accounts of assets and liabilities
within assets in trust, as well as all income within assets in trust, as well as all income
generated and expenses incurred from assets in generated and expenses incurred from assets intrust, are recorded in the relevant balance trust, are recorded in the relevant balance
sheets and income statement accounts.
sheets and income statement accounts.
Of such items, the following significant
Of such items, the following significant
trust assets and liabilities are shown separately trust assets and liabilities are shown separately
on the balance sheet.
on the balance sheet.
(a) Cash and deposits in trust(a) Cash and deposits in trust(b)Buildings in trust(b)Buildings in trust
Equipment in trust
Equipment in trust
Building improvements in trust
Building improvements in trust
Tools, furniture and fixtures in trust
Tools, furniture and fixtures in trust
Land in trust
Land in trust(c) Tenant leasehold and security deposits in (c) Tenant leasehold and security deposits in
trust
trust
(d)Long-term debts in trust(d)Current portion of long-term debts in trust
Long-term debts in trust
By Period(2)Accounting treatment of deferred charges(a) Investment unit issuance expenses
The full amount is recorded as expense at
the time of expenditure.

(2)Accounting treatment of deferred charges
Investment unit issuance expenses
The full amount is recorded as expense at
the time of expenditure.

(3)Accounting treatment of consumption taxes
Transactions subject to consumption taxes
are recorded at amounts exclusive ofconsumption taxes.

(3)Accounting treatment of consumption taxes
Transactions subject to consumption taxes
are recorded at amounts exclusive ofconsumption taxes.

- 69 -

[Notes to the Balance Sheets]
Fiscal Period ended
June 30, 2014(as of June 30, 2014)※1. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.
Cash and deposits
Cash and deposits in trust

153,187 thousand yen
2,765,504 thousand yen

Fiscal Period ended
December 31, 2014(as of December 31, 2014)※1. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.
Cash and deposits

4,262,187 thousand yen

Cash and deposits in trust

4,011,521 thousand yen

Buildings

78,131 thousand yen

Buildings

77,589 thousand yen

Equipment

21,510 thousand yen

Equipment

20,314 thousand yen

Building improvements

1,640 thousand yen

Building improvements

1,574 thousand yen

711,834 thousand yen

Land711,834 thousand yen

Land

Buildings in trust

28,538,783 thousand yen

Buildings in trust

42,090,979 thousand yen

Equipment in trust

5,259,944 thousand yen

Equipment in trust

8,214,804 thousand yen

Building improvements in trust

212,270 thousand yen

Building improvements in trust

203,054 thousand yen

Tools, furniture and fixtures in trust

91,540 thousand yen

Tools, furniture and fixtures in trust

164,502 thousand yen

40,447,565 thousand yen

Land in trust
Total

78,281,912 thousandyen

Liabilities with collateral are as follows.
Short-term debts

63,258,940 thousand yen

Land in trust
Total

123,017,302 thousandyen

Liabilities with collateral are as follows.

13,488,750 thousand yen

Current portion of long-term debts

1,200,000 thousand yen

Current portion of long-term debts 17,552,100 thousand yen

Current portion of long-term debts
in trust

18,167 thousand yen

Long-term debts in trust
Total

9,960,000 thousand yen
41,000,850 thousand yen

Long-term debts

56,100,000 thousand yen

Long-term debts in trust

9,941,832 thousand yen

Total

67,260,000 thousand yen※2. Minimum net assets as required by Article 67, Paragraph 4 ※2. Minimum net assets as required by Article 67, Paragraph 4of the Act on Investment Trusts and Investmentof the Act on Investment Trusts and Investment
Corporations
Corporations
50,000 thousand yen
50,000 thousand yen- 70 -

[Notes to Statement of Income]Fiscal Period ended
Fiscal Period ended
June 30, 2014
December 31, 2014
(from January 1, 2014 to(from July 1, 2014 toJune 30, 2014)
December 31, 2014)※1. Rental revenues and property related expenses※1. Rental revenues and property related expenses(Unit: thousands of yen)
(Unit: thousands of yen)
A. Real property rental revenues
A. Real property rental revenues
Rental revenues

Rental revenues(Rent/common area charges)

2,555,746(Other revenues)

216,673

Total rental revenues

2,772,419(Rent/common area charges)

4,408,874(Other revenues)

201,843

Total rental revenues

4,610,717

B. Real property related expenses

B. Real property related expenses

Property related expenses

Property related expenses(Maintenance costs)

446,688(Maintenance costs)

460,196(Taxes and public dues)

174,451(Taxes and public dues)

163,789(Insurance expenses)

4,952(Insurance expenses)

6,084(Other expenses)

127,784(Other expenses)

119,524(Depreciation expenses)

527,914(Depreciation expenses)

837,259

1,281,791

Total real property related expenses
C. Operating income from rental revenues
(A-B)

(A-B)

3,023,863(Unit: thousands of yen)

Bon Sejour Chitose Funabashi
Proceeds from sales of properties

832,153

Cost of sales of properties

657,193

Other expenses on sales of properties
Gain on sales of properties

6,623
168,337
Bon Sejour Yotsugi

Proceeds from sales of properties

777,256

Cost of sales of properties

622,386

Other expenses on sales of properties
Gain on sales of properties

5,450
149,419
Bon Sejour Hino

Proceeds from sales of properties

730,459

Cost of sales of properties

551,565

Other expenses on sales of properties
Gain on sales of properties

1,586,854

C. Operating income from rental revenues
1,490,627※2. Gain on sales of properties

Total real property related expenses

5,414
173,480- 71 --

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)Bon Sejour Musashi Shinjo
Proceeds from sales of properties

587,138

Cost of sales of properties

468,167

Other expenses on sales of properties
Gain on sales of properties

4,363
114,607
Bon Sejour Komaki

Proceeds from sales of properties

1,280,824

Cost of sales of properties

984,869

Other expenses on sales of properties

12,563Gain on sales of properties

283,391
Bon Sejour Hadano Shibusawa

Proceeds from sales of properties

735,268

Cost of sales of properties

633,486

Other expenses on sales of properties

6,243

Gain on sales of properties

95,539Bon Sejour Itami

Proceeds from sales of properties

472,718

Cost of sales of properties

449,783

Other expenses on sales of properties

4,357

Gain on sales of properties

18,577- 72 -

[Notes to Statement of Unitholders’ Equity]
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
Number of investment units authorized and number ofinvestment units issued and outstanding

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Number of investment units authorized and number ofinvestment units issued and outstanding

Number of investment units authorized

10,000,000 units

Number of investment units authorized

10,000,000 units

Number of investment units issued andoutstanding

1,573,179 units

Number of investment units issued andoutstanding

2,668,686 units[Notes Related to Tax Accounting]
Fiscal Period ended
Fiscal Period ended
June 30, 2014
December 31, 2014
(from January 1, 2014 to(from July 1, 2014 toJune 30, 2014)
December 31, 2014)
1. Significant components of deferred tax assets and liabilities 1. Significant components of deferred tax assets and liabilities(Deferred tax assets - current assets)(Deferred tax assets - current assets)
Enterprise tax payable
517 thousand yen Enterprise tax payable- thousand yen
Accounts receivable (merger)

197 thousand yen

Accounts receivable (merger)

197 thousand yen

Allowance for doubtful accounts

475 thousand yen

Allowance for doubtful accounts

672 thousand yen

Subtotal

1,190 thousand yen

Subtotal

870 thousand yen

Valuation allowance

1,190 thousand yen

Valuation allowance

870 thousand yen

Total- thousand yen

Total- thousand yen(Net deferred tax assets - current)- thousand yen(Net deferred tax assets - current)- thousand yen(Deferred tax assets - non-current assets)
Buildings and other (merger)
812,820 thousand yen(Deferred tax assets - non-current assets)
Buildings and other (merger)
801,025 thousand yen

Land (merger)

2,251,597 thousand yen

Land (merger)

2,251,597 thousand yen

Long-term accrued expenses

7,746,144 thousand yen

Long-term accrued expenses

7,749,271 thousand yen

Subtotal

10,810,561 thousand yen

Subtotal

10,801,895 thousand yen

Valuation allowance

10,810,561 thousand yen

Valuation allowance

10,801,895 thousand yen

Total- thousand yen

Total- thousand yen(Net deferred tax assets - non-current)- thousand yen(Net deferred tax assets - non-current)- thousand yen

2. Significant difference between statutory tax rate and theeffective tax rate
Statutory tax rate
36.59%

2. Significant difference between statutory tax rate and theeffective tax rate
Statutory tax rate
34.16%

Deductible cash distributions

Deductible cash distributions(33.54)%-%

Provision of reserve for reduction entry(34.98)%Provision of reserve for reduction entry(0.46)%

Others(1.54)%

Others(0.13)%

Effective tax rate

0.07%

Effective tax rate

0.03%

3. Revision of the amounts of deferred tax assets and liabilities 3. Revision of the amounts of deferred tax assets and liabilities
due to changes in rate of any Corporation Tax, etc.
due to changes in rate of any Corporation Tax, etc.
As a result of the promulgation of the “Act on Partial
As a result of the promulgation of the “Local Corporation
Revision of the Income Tax Act, etc.” (Act No. 10 of 2014) Tax Act” (Act No. 11 of 2014) and the “Act on Partial
on March 31, 2014, the statutory tax rate used to calculate Revision of the Local Tax Act, etc.” (Act No. 4 of 2014) on
deferred tax assets and liabilities is changed from 36.59% to March 31, 2014, a “Local Corporation Tax” will be created- 73 -

34.16% for temporary differences expected to be eliminatedin the fiscal period ended December 31, 2014 (23rd fiscal
period) and the fiscal period ending June 30, 2015 (24th fiscal
period). This change in tax rate has no effect on theamounts of deferred tax assets and liabilities, and deferredincome taxes.

and a portion of the Local Corporation Special Tax will be
restored in the Corporation Enterprise Tax for fiscal periods
starting after October 1, 2014, and therewith the statutory tax
rate used to calculate deferred tax assets and liabilities will bechanged to 34.16% for temporary differences, etc. which are
expected to be eliminated in the fiscal period starting afterJanuary 1, 2015. This change in tax rate has no effect on theamounts of deferred tax assets and liabilities, and deferredincome taxes.

[Notes Related to Lease Contracts]
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
Operating lease transactions(as lessee)(Unit: thousands of yen)
Due within one year
Remaining lease
payments

2,280,288

Total

2,392,537

Remaining lease
payments

Due within one year

112,249

Due after one year

2,224,164

Total

2,336,413(Unit: thousands of yen) (as lessor)
Due within one year

Remaining lease
payments

112,249

Due after one year

(as lessor)

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Operating lease transactions(as lessee)(Unit: thousands of yen)

507,089

Due after one year

4,342,958

Total

4,850,048

Remaining lease
payments(Unit: thousands of yen)
Due within one year

1,843,409

Due after one year

15,485,197

Total

17,328,607[Notes Related to Financial Instruments]
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
1. Status of financial instruments(1)Policy for financial instruments
INV principally conducts its operations throughinvestments in real estate and other specified assets to seek toensure stable income in the medium to long term.
The policy for raising funds is principally through issuing
new investment units or entering into debt.
Derivative transactions are to be entered into for the
purpose of hedging against the rate of future interest rateincreases, etc. and not for speculation. There are currently
no derivative transactions that have been entered into.
Surplus funds are managed carefully after carefully taking
into account safety, liquidity, the interest rate environment
and financing.

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
1. Status of financial instruments(1)Policy for financial instruments
INV principally conducts its operations throughinvestments in real estate and other specified assets to seek toensure stable income in the medium to long term.
The policy for raising funds is principally through issuing
new investment units or entering into debt.
Derivative transactions are to be entered into for the
purpose of hedging against the rate of future interest rateincreases, etc. and not for speculation. There are currently
no derivative transactions that have been entered into.
Surplus funds are managed carefully after carefully taking
into account safety, liquidity, the interest rate environment
and financing.

(2)Nature and extent of risks arising from financial instruments (2)Nature and extent of risks arising from financial instruments
and risk management
and risk management
The funds raised through borrowings are mainly used to
The funds raised through borrowings are mainly used toacquire real estate properties or properties in trust (including acquire real estate properties or properties in trust (including
related acquisition costs) and for the repayment of existing related acquisition costs) and for the repayment of existing
debt. Liquidity risks relating to debt are managed by the debt. Liquidity risks relating to debt are managed by the- 74 -

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
finance department of the Asset Manager by preparing andupdating plans for funds, and monitoring the covenants set
forth in loan agreements.

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
finance department of the Asset Manager by preparing andupdating plans for funds, and monitoring the covenants set
forth in loan agreements.

(3)Supplemental information regarding market value, etc. for (3)Supplemental information regarding market value, etc. forfinancial instruments
financial instruments
The fair value of financial instruments is based on quoted
The fair value of financial instruments is based on quoted
market prices if available. When quoted market prices are market prices if available. When quoted market prices are
not available, fair value is estimated using valuation not available, fair value is estimated using valuation
techniques which contain various assumptions. If other techniques which contain various assumptions. If othervaluation models or assumptions were used, the estimated valuation models or assumptions were used, the estimatedvalue may differ.
value may differ.
2. Estimated fair value of financial instruments
2. Estimated fair value of financial instruments
Book value, fair value and the difference between values
Book value, fair value and the difference between values
as of June 30, 2014 are as follows.
as of December 31, 2014 are as follows.
(Unit: thousands of yen)
(Unit: thousands of yen)Book Value

Fair Value

759,058

759,058-(2) Cash and deposits in trust

2,765,504

2,765,504

Total assets

3,524,562(3) Short-term debts

13,488,750(1) Cash and deposits

DifferenceBook Value

Fair Value(1) Cash and deposits

9,153,872

9,153,872--(2) Cash and deposits in trust

4,011,521

4,011,521-

3,524,562-

Total assets

13,165,393

13,165,393-

13,488,750-(3) Short-term debts

-

-

-

1,200,000

1,200,000-

56,100,000

56,100,000-

18,167

18,251

84(4) Current portion of
long-term debts

17,552,100

17,552,100-(4) Current portion of
long-term debts(5) Long-term debts

-

-

-

(5) Long-term debts(6) Current portion of
long-term debts in trust(6) Current portion of
long-term debts in trust

Difference

-

-

-

(7) Long-term debts in trust

9,960,000

10,122,527

162,527(7) Long-term debts in trust

9,941,832

10,156,234

214,401

Total liabilities

41,000,850

41,163,378

162,527

Total liabilities

67,260,000

67,474,486

214,486(Note 1) Methods to calculate fair values of financial (Note 1) Methods to calculate fair values of financial
instruments
instruments(1) Cash and deposits (2) Cash and deposits in trust(1) Cash and deposits (2) Cash and deposits in trust(3) Short-term debts(3) Short-term debts
Due to the short maturities, the book value of theseDue to the short maturities, the book value of these
instruments is deemed a reasonable approximation of the fair
instruments is deemed a reasonable approximation of the fairvalue, and therefore, the book value is used as the fair value.
value, and therefore, the book value is used as the fair value.
(4) Current portion of long-term debts (5) Long-term debts(4) Current portion of long-term debts (5) Long-term debts(6) Current portion of long-term debts in trust (7) Long-term (6) Current portion of long-term debts in trust (7) Long-term
debts in trust
debts in trust
The fair values of long-term debt with fixed interest rates
The fair values of long-term debt with fixed interest rates
are determined based on the present value of contractual cash are determined based on the present value of contractual cash
flows discounted at current market interest rates which would flows discounted at current market interest rates which would
be applicable to new debt with the same amount.
be applicable to new debt with the same amount.
Long-term debt with floating interest rates reflecting
Long-term debt with floating interest rates reflectingchanges in market rates within a short term period are statedchanges in market rates within a short term period are statedat their book value as their book values approximate their fair at their book value as their book values approximate their fairvalues.
values.
(Note 2) Financial instruments for which fair value is (Note 2) Financial instruments for which fair value isextremely difficult to value
extremely difficult to value(Unit: thousands of yen)
(Unit: thousands of yen)
Category
Tenant leasehold andsecurity deposits

Book Value

Category
28,663- 75 -

Tenant leasehold andsecurity deposits

Book Value
28,663

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
Tenant leasehold and1,025,726
security deposits in trust
Tenant leasehold and security deposits and tenantleasehold and security deposits in trust have no observable
market price, and it is impracticable to reasonably estimate
their future cash flows because it because the repayment datesof those deposits and the timing of the lessee’s exit from theproperty are not certain. Thus, their fair value is notdisclosed.

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Tenant leasehold and1,109,146
security deposits in trust
Tenant leasehold and security deposits and tenantleasehold and security deposits in trust have no observable
market price, and it is impracticable to reasonably estimate
their future cash flows because it because the repayment datesof those deposits and the timing of the lessee’s exit from theproperty are not certain. Thus, their fair value is notdisclosed.

(Note 3) Remaining schedule of monetary claims after the (Note 3) Remaining schedule of monetary claims after theclosing date of the fiscal period
closing date of the fiscal period(Unit: thousands of yen)
(Unit: thousands of yen)
Due within
One Year
Cash and deposits

Due after One Due after Two
to Two Years to Three Years

Due within
One Year

Due after One Due after Two
to Two Years to Three Years

759,058--

Cash and deposits

9,153,872--

Cash and deposits in trust

2,765,504--

Cash and deposits in trust

4,011,521

-

-

Total

3,524,562

-

-

Total

13,165,393--

Due after Three Due after Four Due after Five
to Four Years to Five Years
Years

Due after Three Due after Four Due after Five
to Four Years to Five Years
Years

Cash and deposits

-

-

-

Cash and deposits

-

-

-

Cash and deposits in trust

-

-

-

Cash and deposits in trust

-

-

-

Total

-

-

-

Total

-

-

-

(Note 4) Redemption schedule of long-term debts and otherinterest-bearing indebtedness after the closing date of
the fiscal period(Unit: thousands of yen)

(Note 4) Redemption schedule of long-term debts and otherinterest-bearing indebtedness after the closing date of
the fiscal period(Unit: thousands of yen)

Due within
One Year

Due after One Due after Two
to Two Years to Three Years

Due within
One Year

Due after One Due after Two
to Two Years to Three Years

Current portion of
long-term debts

17,552,100--

Current portion of
long-term debts

1,200,000--

Long-term debts

-

-

-

Long-term debts--

56,100,000

18,167---73,807104,256

1,218,167

73,80756,204,256

Current portion of
long-term debts in trust

-

-

-

Current portion of
long-term debts in trust

Long-term debts in trust-

54,894

74,639Long-term debts in trust

17,552,100

54,894

74,639

Total

Total

Due after Three Due after Four Due after Five
to Four Years to Five Years
Years
Current portion of
long-term debts

-

-

-

Long-term debts--

Due after Three Due after Four Due after Five
to Four Years to Five Years
Years
Current portion of
long-term debts

-

-

-

-

Long-term debts

-

-

-

-

-

-

Current portion of
long-term debts in trust

-

-

-

Current portion of
long-term debts in trust

Long-term debts in trust

2,863,679

5,217,347

1,749,439

Long-term debts in trust

2,894,530

5,143,274

1,725,963

Total

2,863,679

5,217,347

1,749,439

Total

2,894,530

5,143,274

1,725,963- 76 -

[Notes Related to Rental Properties]
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
INV owns residential and other properties principally in
the Tokyo area and major regional cities for the purpose of
earning stable rental revenues. The book value, amountchanged during the period and balance at the end of theperiod are as follows.
(Unit: thousands of yen)
Use

Book Value
Fair Value atBalance at theBalance at the the End of the
Change during
PeriodBeginning ofEnd of thethe Period
the Period
PeriodFiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
INV owns residential properties and hotels as core assets
and owns other various properties including offices and retails
principally in the Tokyo area and major regional cities inorder to aim for the establishment of the portfolio which
focuses on both improvement of stability and growthpotential. The book value, amount changed during theperiod and balance at the end of the period are as follows.
(Unit: thousands of yen)
Use

Book Value
Fair Value atBalance at theBalance at the the End of the
Change during
PeriodBeginning ofEnd of thethe Period
the Period
PeriodResidential

56,192,804

ᇞ318,340

55,874,464

58,865,000

Residential

55,874,464△304,706

55,569,758

60,775,000

Office8,585,639

ᇞ5,687

8,579,951

7,288,000

Office8,579,951△28,3428,551,609

7,227,000

Retail

5,318,657

ᇞ43,018

5,275,638

5,520,000

Retail5,275,638△50,243

5,225,394

5,690,000

Parking

100,838

ᇞ13

100,825

105,000

Parking

100,825△1

100,823

107,000

Senior4,385,522

ᇞ4,385,522

―

―

Hotel

5,532,341

39,763,665

45,296,007

52,759,000

Hotel

―

5,532,341

5,532,341

5,490,000

Total

75,363,220

39,380,372

114,743,593

126,558,000

Total

74,583,461

779,759

75,363,220

77,268,000(Note 1) Book value is the figure calculated by decreasing the (Note 1) Book value is the figure calculated by decreasing theamount of depreciation from acquisition price (including amount of depreciation from acquisition price (including
acquisition-related costs).
acquisition-related costs).
(Note 2) The major factor of the increase for the fiscal period (Note 2) The major factor of the increase for the fiscal period
ended June 30, 2014 was acquisition of new hotels and capital ended December 31, 2014 was acquisition of new hotels andexpenditures related to construction work.
capital expenditures related to construction work.
(Note 3) The major factor of the decrease was sale of senior (Note 3) The major factor of the decrease was depreciation.
housing properties and depreciation.
(Note 4) The fair value as of the end of the reporting period(Note 4) The fair value as of the end of the reporting period is is determined based on the appraisal value provided by Asset
determined based on the appraisal value provided by Asset Research and Development Inc., Japan Real Estate Institute,
Research and Development Inc., Japan Real Estate Institute, Morii Appraisal & Investment Consulting Inc. and Tanizawa
Morii Appraisal & Investment Consulting Inc. and Tanizawa Sogo Appraisal Co., Ltd.
Sogo Appraisal Co., Ltd.
For information related to profits and losses from rental
properties in the fiscal period ended June 30, 2014, pleaserefer to “Notes to Statement of Income.”

For information related to profits and losses from rental
properties in the fiscal period ended December 31, 2014,
please refer to “Notes to Statement of Income.”[Notes Related to Restriction on Asset Management]
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Nothing applicable.

-- 77 -

[Notes Related to Transactions with Related Parties]
Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)
1

Interested parties of the Asset Manager

Classification

Interested party of
the Asset Manager

Transaction
Ratio of Voting
AmountRightsType of Transaction(Thousands of yen)(%)
(Note 1)Name

Business or
Occupation

Zephyrus Tokutei
Mokuteki Kaisha(Note 3).

Investment
managementbusiness-

Nishi Tokutei Mokuteki
Kaisha(Note 3)

Investment
managementbusiness-

Purchase of trust
beneficiary interests
in real estate(Note 2)
(Note 5)Purchase of trust
beneficiary interests
in real estate(Note 2)
(Note 5)

Account

Balance at theEnd of the Period(Thousands ofyen) (Note 1)

2,851,000--

2,584,000--(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on the Asset Manager’s internal rules
and manual regarding transactions with the sponsor company.
(Note 3) Zephyrus Tokutei Mokuteki Kaisha and Nishi Tokutei Mokuteki Kaisha have no capital
relationship with the Asset Manager to be disclosed. The funds have received an anonymous
partnership investment through funds that are managed by FIG, an affiliate of Calliope. Accordingly,
INV treats Zephyrus Tokutei Mokuteki Kaisha and Nishi Tokutei Mokuteki Kaisha as the equivalentof interested party.
(Note 4) Calliope holds 609,942 units (holding ratio: 38.77%) of the issued investment units of INV.
(Note 5) The purchase of trust beneficiary interests pertains to following properties. The
transaction amount is the purchase price stated in the trust beneficiary purchase agreement, in which
other expenses on acquisition, property taxes, city planning taxes and consumption taxes are notincluded.
Property
NumberD1

Hotel MyStays Kanda

2,851,000

D2Hotel MyStays Asakusa

2,584,000

Total

5,435,000

Name of Property- 78 -

Purchase Price (Thousands of yen)

2

Asset Custody Companies

Classification

Asset CustodyCompany

NameBusiness or
Occupation

Sumitomo Mitsui
Banking andTrust Bank, Limited trust business

Ratio of
Voting Rights(%)

Type of Transaction

Transaction
Amount(Thousands ofyen)

Repayment of short-term
debt

2,500

Loan for short-term debt

3,000,000

Account

Balance at theEnd of the Period(Thousands ofyen)

Short-term debt

2,997,500

Finance related fees

923 Prepaid expenses

5,630Interest expenses

3,138 Accrued expenses

77-(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on market conditions.
Fiscal Period ended December 31, 2014 (from July 1, 2014 to December 31, 2014)
1

Interested parties of the Asset Manager

Classification

Interested party of
the Asset Manager

Name

Business or
Occupation

Ratio of
Voting Rights
Owned
(%)

Zephyrus Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Nishi Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Shijodori Holding
Tokutei Mokuteki
Kaisha(Note 3)

Investment
manage-mentbusiness-

Danube Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Nagahoribashi
Holding Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Aki Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

MyStays HotelManagement
Co., Ltd.
(Note 3)

Hotel business-Type of Transaction

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)
Rental revenues

Transaction
Amount(Thousands ofyen)(Note 1)

Account

Balance at the Endof the Period(Thousands ofyen) (Note 1)

14,878,412--

4,473,000--

7,594,980--

3,845,400--

2,514,820--

6,631,968--

1,722,789

Accounts
receivables(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on the Asset Manager’s internal rules
and manual regarding transactions with the sponsor company.
(Note 3) Zephyrus Tokutei Mokuteki Kaisha, Nishi Tokutei Mokuteki Kaisha, Shijodori Holding
Tokutei Mokuteki Kaisha, Danube Tokutei Mokuteki Kaisha, Nagahoribashi Holding Tokutei
Mokuteki Kaisha, Aki Tokutei Mokuteki Kaisha and MyStays Hotel Management Co., Ltd. have nocapital relationship with the Asset Manager to be disclosed. The Tokutei Mokuteki Kaisha or the- 79 -

540,064lessee and operator have received an anonymous partnership investment or investment through funds
that are managed by FIG, an affiliate of Calliope. Accordingly, INV treats Zephyrus Tokutei
Mokuteki Kaisha, Nishi Tokutei Mokuteki Kaisha, Shijodori Holding Tokutei Mokuteki Kaisha,Danube Tokutei Mokuteki Kaisha, Nagahoribashi Holding Tokutei Mokuteki Kaisha, Aki Tokutei
Mokuteki Kaisha and MyStays Hotel Management Co., Ltd. as the equivalent of interested party.
(Note 4) Calliope holds 609,942 units (holding ratio: 22.85%) of the issued investment units of INV.
(Note 5) The purchase of trust beneficiary interests pertains to following properties. The transaction
amount is the purchase price stated in the trust beneficiary purchase agreement, in which otherexpenses on acquisition, property taxes, city planning taxes and consumption taxes are not included.
Property
NumberName of Property

D3

Hotel MyStays Kyoto-Shijo

D4

MyStays Shin-Urayasu
Conference Center

D5

Hotel MyStays Maihama

D6

Hotel Vista Premio Dojima

D7

Hotel MyStays Nagoya-Sakae

D8

Hotel MyStays
Sakaisuji-Honmachi

D9

Hotel MyStays Yokohama

D10

Hotel MyStays Nippori

Nishi Tokutei Mokuteki Kaisha

1,898,540

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

Shijodori Holding Tokutei
Mokuteki Kaisha

1,570,520

D12

Flexstay Inn Iidabashi

Aki Tokutei Mokuteki Kaisha

1,381,660

D13

Hotel MyStays Ueno Inaricho

Nishi Tokutei Mokuteki Kaisha

1,331,960

D14

Flexstay Inn Shinagawa

Nishi Tokutei Mokuteki Kaisha

1,242,500

D15

Flexstay Inn Tokiwadai

Aki Tokutei Mokuteki Kaisha

1,242,500

D16

Flexstay Inn Sugamo

Aki Tokutei Mokuteki Kaisha

1,192,800

D17

Hotel MyStays Otemae

Aki Tokutei Mokuteki Kaisha

1,192,800

D18

Flexstay Inn Kiyosumi-Shirakawa

Aki Tokutei Mokuteki Kaisha

749,476

D19

Flexstay Inn Nakanobu P1

Aki Tokutei Mokuteki Kaisha

589,442

D20

Flexstay Inn Nakanobu P2

Aki Tokutei Mokuteki Kaisha

283,290

Counterparty

Purchase Price (Thousands of yen)

Shijodori Holding Tokutei
Mokuteki Kaisha
Zephyrus Tokutei Mokuteki
KaishaZephyrus Tokutei Mokuteki
KaishaDanube Tokutei Mokuteki
KaishaZephyrus Tokutei Mokuteki
KaishaNagahoribashi Holding Tokutei
Mokuteki Kaisha
Zephyrus Tokutei Mokuteki
Kaisha6,024,460
4,930,200
4,870,312
3,845,400
2,958,000
2,514,820
2,119,900

Total

2

39,938,580

Asset Custody Companies

Classification

Asset CustodyCompany

NameBusiness or
Occupation

Sumitomo Mitsui
Banking andTrust Bank, Limited trust business

Ratio of
Voting Rights(%)-

Type of Transaction

Transaction
Amount(Thousands ofyen)

Repayment of short-term
debt

2,997,500

Loan for short-term debt

5,000,000

Finance related fees

- 80 -

Account

Balance at theEnd of the Period(Thousands ofyen)

Short-term debt

5,000,000

7,919 Prepaid expenses

17,205

Interest expenses

Long-term
prepaid expenses

26,444

21,889 Accrued expenses

255(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on market conditions.
[Notes Related to Per Unit Information]
Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Net assets per unit

23,121 yen

Net assets per unit

23,005 yen

Net income per unit

573 yen

Net income per unit

762 yen

Net income per unit is calculated by dividing net income
for the period by the daily weighted average number ofinvestment units issued and outstanding. Diluted net income
per unit is not stated as there are no diluted units.

Note.

Net income per unit is calculated by dividing net income
for the period by the daily weighted average number ofinvestment units issued and outstanding. Diluted net income
per unit is not stated as there are no diluted units.

The basis for calculating net income per unit is as follows.

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
Net income for the fiscal period (thousands ofyen)
Amounts not attributable to common unit holders(thousands of yen)
Net income attributable to common unit holders(thousands of yen)
Average number of investment units during theperiod (units)

901,815
901,815
1,573,179- 81 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Net income for the fiscal period (thousands ofyen)
Amounts not attributable to common unit holders(thousands of yen)
Net income attributable to common unit holders(thousands of yen)
Average number of investment units during theperiod (units)

1,958,002
1,958,002
2,570,932

[Notes Related to Significant Subsequent Events]

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
1. Issuance of New Investment Units
INV resolved at its meeting of the Board of Directors
held on June 23, 2014 and July 9, 2014 respectively to
conduct the issuance of new investment units andsecondary distribution of investment units.
Thepayment for the new investment units issued through the
public offering was completed on July 16, 2014, and the
new investment units were issued in accordance with thefollowing terms and conditions. In addition, withrespect to the issuance of new investment units throughthe third-party allotment in connection with theoverallotment secondary offering, the payment wascompleted on August 13, 2014. As a result, theunitholders’ equity of INV is JPY 53,096 million and thenumber of investment units issued and outstanding of
INV increased to 2,668,686.
(i) Issuance of new investment units through public
offering
NumberofNew: 1,040,000 units
Investment Units Issued
Domestic public offering: 527,322 units
Overseas offering: 512,678 units
Issue Price (Offer Price): JPY 22,688 per unit
Total Issue Price (Total: JPY 23,595,520,000
Offer Price)Amount Paid In (Issue: JPY 21,873 per unit
Value)
Total Amount Paid In: JPY 22,747,920,000(Total Issue Value): Wednesday, July 16,
Payment Date
2014(ii) Secondary offering of investment units outside Japan
Number of Investment
Units Offered in the : 70,151 units
Secondary Offering
Offer Price: JPY 22,688 per unit
Total Offer Value: JPY 1,591,585,888: Infinite Value
SellerInvestment Ltd.
(iii) Secondary offering of investment units(overallotment secondary offering)Number of Investment
Units Offered in the: 55,507 units
Secondary Offering
Offer Price: JPY 22,688 per unit
Total Offer Value: JPY 1,259,342,816: Thursday, July 17,
Delivery Date
2014(iv) Issuance of new investment units through third-party- 82 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
allotment
Number of New
Investment Units Issued
Amount Paid In (Issue
Value)
Total Amount Paid In(Total Issue Value): 55,507 units: JPY 21,873 per unit
: JPY 1,214,104,611: Wednesday, August
13, 2014: SMBC Nikko
Securities Inc.

Payment Date
Allotee

2. Borrowing of Funds
In order to fund a portion of the acquisition of the trust
beneficiary interests for the 18 hotel properties, which
INV acquired on July 17, 2014 (see “4. Acquisition ofAssets” below), and to refinance the existing syndicate
loan (New Syndicate Loan (A)) at a more lower interest
rate, INV completed the following new borrowing as ofJuly 17, 2014, in addition to the existing borrowing (New
Syndicate Loan (B)).

1. Borrowing of Funds
INV completed new debt financing in order to procure
funds for the acquisition of the trust beneficiary interests
for the 3 hotel properties, which INV acquired on
February 6, 2015 (see “2. Acquisition of Assets” below),
and related costs.

New Syndicate Loan (C)New Syndicate Loan (D)LenderLenderBorrowingamountInterest rate,
etc.
Interest
payment date

: Sumitomo Mitsui Banking
Corporation,
The
Bank
of
Tokyo-Mitsubishi
UFJ,
Ltd.,
Mizuho Bank, Ltd., Citibank Japan
Ltd., Shinsei Bank, Limited,
Sumitomo Mitsui Trust Bank,
Limited and Resona Bank, Limited: JPY57,300 million

BorrowingamountInterest rate,
etc.
Interest
payment date

: Base Rate (one-month JPY
TIBOR) + 0.80%: On (1) the last Japanese business
day of each month before theprincipal maturity date, beginningwith August 29, 2014, and (2) the
principal maturity date
: Lump-sum repayment

Principal
repayment
methodBorrowing: Secured (Note1) / with nomethodguarantee
Borrowing: July 17, 2014
date
Maturity: July 14, 2017
Date
(Note 1) The following assets are pledged as collateral
for the borrowings.
First priority pledges over the real estate trust beneficiaryinterests for 65 properties: Nisshin Palacestage
Daitabashi, Nisshin Palacestage Higashi-Nagasaki,
Growth Maison Gotanda, Growth Maison Kameido,
Emerald House, Harmonie Ochanomizu, Suncrest
Shakujii Koen, Growth Maison Shin-Yokohama, Belle
Face Ueno Okachimachi, Grand Rire Kameido, Growth- 83 -

Principal
repayment
methodBorrowing
method: Sumitomo Mitsui Banking
Corporation,
The
Bank
of
Tokyo-Mitsubishi
UFJ,
Ltd.,
Mizuho Bank, Ltd., Citibank Japan
Ltd., Shinsei Bank, Limited,
Sumitomo Mitsui Trust Bank,
Limited and Resona Bank, Limited: JPY6,241 million: Base Rate (One-month JPY
TIBOR) + 0.80%: On (1) the last Japanese business
day of each month before theprincipal maturity date, beginningwith February 27, 2015, and (2) the
principal maturity date
: Lump-sum repayment: In accordance with the“Individual Loan Agreement”
dated February 4, 2015. Secured(Note 1) / with no guarantee: February 6, 2015

Borrowingdate
Maturity: February 6, 2018
Date
(Note 1) First priority pledges over three real estate
properties, Apa Hotel Yokohama-Kannai, Hotel Nets
Hakodate and Flexstay Inn Shirogane; and the real estate
trust beneficiary interests for 65 properties, Nisshin
Palacestage
Daitabashi,
Nisshin
Palacestage
Higashi-Nagasaki, Growth Maison Gotanda, Growth
MaisonKameido,
Emerald
House,
Harmonie
Ochanomizu, Suncrest Shakujii Koen, Growth Maison

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Maison Ikebukuro, Growth Maison Yoga, RouteTachikawa, Shibuya Honmachi Mansion, City Heights
Kinuta, Acseeds Tower Kawaguchi Namiki, Capital
Heights Kagurazaka, College Square Machida, Belair
Meguro, Wacore Tsunashima I, Foros Nakamurabashi,
Growth Maison Kaijin, College Square Machiya, City
House Tokyo Shinbashi, Winbell Kagurazaka,
Nishiwaseda Cresent Mansion, Lexington Square
Akebonobashi, Casa Eremitaggio, Towa City Coop
Shinotsuka II, Bichsel Musashiseki, Lexel Mansion Ueno
Matsugaya, Towa City Coop Sengencho, Royal Park
Omachi, Lexington Square Haginomachi, Visconti
Kakuozan, Lexington Square Daitabashi, Lexington
Square Honjo Azumabashi, AMS TOWER Minami 6-Jo,
Spacia Ebisu, Kindai Kagakusha Building, Lexington
Plaza Nishigotanda, Cross Square NAKANO, Ohki Aoba
Building, Lexington Plaza Hachiman, AEON TOWN
Sukagawa, Hotel MyStays Kanda, Hotel MyStays
Asakusa, Hotel MyStays Kyoto-Shijo, MyStays ShinUrayasu Conference Center, Hotel MyStays Maihama,Hotel Vista Premio Dojima, Hotel MyStays
Nagoya-Sakae, Hotel MyStays Sakaisuji-Honmachi,
Hotel MyStays Yokohama, Hotel MyStays Nippori,
Hotel MyStays Fukuoka-Tenjin-Minami, Flexstay Inn
Iidabashi, Hotel MyStays Ueno Inaricho, Flexstay Inn
Shinagawa, Flexstay Inn Tokiwadai, Flexstay Inn
Sugamo, Hotel MyStays Otemae, Flexstay Inn Kiyosumi
Shirakawa, Flexstay Inn Nakanobu P1 and Flexstay Inn
Nakanobu P2. First priority mortgages over two realestate properties: Shinjuku Island and Times
Kanda-Sudacho 4th. Floating lien over nine properties:
Hotel MyStays Kanda, Hotel MyStays Kyoto-Shijo,
MyStays Shin Urayasu Conference Center, Hotel
MyStays Maihama, Hotel Vista Premio Dojima, Hotel
MyStays
Nagoya-Sakae,
Hotel
MyStays
Sakaisuji-Honmachi, Hotel MyStays Yokohama andHotel MyStays Fukuoka-Tenjin-Minami.
3. Prepayment of Borrowings
In order to complete the acquisition of the 18 hotel
properties on July 17, 2014, reduce borrowing costs
further and strengthen lender formation, INV completed
the refinancing and the prepayment of the following
borrowings.
New Syndicate Loan (A)LenderBalance ofBorrowings
Initial Loan
Amount: Sumitomo Mitsui Banking
Corporation,
The
Bank
of
Tokyo-Mitsubishi
UFJ,
Ltd.,
Shinsei Bank, Limited, Citibank
Japan Ltd., Shinsei Trust &Banking Co., Ltd. and Aozora
Bank, Ltd.
: JPY 17,552 million: JPY 20,350 million- 84 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Shin-Yokohama, Belle Face Ueno Okachimachi, Grand
Rire Kameido, Growth Maison Ikebukuro, Growth
Maison Yoga, Route Tachikawa, Shibuya Honmachi
Mansion, City Heights Kinuta, Acseeds Tower
Kawaguchi Namiki, Capital Heights Kagurazaka, College
Square Machida, Belair Meguro, Wacore Tsunashima I,
Foros Nakamurabashi, Growth Maison Kaijin, College
Square Machiya, City House Tokyo Shinbashi, Winbell
Kagurazaka, Nishiwaseda Cresent Mansion, Lexington
Square Akebonobashi, Casa Eremitaggio, Towa City
Coop Shinotsuka II, Bichsel Musashiseki, Lexel Mansion
Ueno Matsugaya, Towa City Coop Sengencho, Royal
Park Omachi, Lexington Square Haginomachi, Visconti
Kakuozan, Lexington Square Daitabashi, Lexington
Square Honjo Azumabashi, AMS TOWER Minami 6-Jo,
Spacia Ebisu, Kindai Kagakusha Building, Lexington
Plaza Nishigotanda, Cross Square NAKANO, Ohki Aoba
Building, Lexington Plaza Hachiman, AEON TOWN
Sukagawa, Hotel MyStays Kanda, Hotel MyStays
Asakusa, Hotel MyStays Kyoto-Shijo, MyStays
Shin-Urayasu Conference Center, Hotel MyStays
Maihama, Hotel Vista Premio Dojima, Hotel MyStays
Nagoya-Sakae, Hotel MyStays Sakaisuji-Honmachi,
Hotel MyStays Yokohama, Hotel MyStays Nippori, Hotel
MyStays
Fukuoka-Tenjin-Minami,
Flexstay
Inn
Iidabashi, Hotel MyStays Ueno Inaricho, Flexstay Inn
Shinagawa, Flexstay Inn Tokiwadai, Flexstay Inn
Sugamo, Hotel MyStays Otemae, Flexstay Inn Kiyosumi
Shirakawa, Flexstay Inn Nakanobu P1 and Flexstay Inn
Nakanobu P2. First priority mortgages over two realestate properties, Shinjuku Island and Times
Kanda-Sudacho 4th.

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Interest
Rate, Etc.
Borrowing
MethodBorrowing
Date
Maturity
Date
Prepayment
Date
Repayment
AmountBorrowingAmountOutstanding
After
Repayment: Base Rate (one-month JPY
TIBOR) + 1.50%: Borrowing based on the term loan
agreement dated as of December
17, 2013
Secured / with no guarantee: December 20, 2013
: December 20, 2016
: July 17, 2014
: JPY 17,552 million: JPY 0 million

New Syndicate Loan (B)LenderBalance ofBorrowings
Initial Loan
AmountInterest
Rate, Etc.
Borrowing
MethodBorrowing
Date
Maturity
Date
Prepayment
Date
Repayment
AmountBorrowingAmountOutstanding
After
Repayment: Sumitomo Mitsui Banking
Corporation,
The
Bank
of
Tokyo-Mitsubishi
UFJ,
Ltd.,
Mizuho Bank, Ltd. and Sumitomo
Mitsui Trust Bank, Limited: JPY 13,448 million: JPY 13,500 million: Base Rate (one-month JPY
TIBOR) + 0.80%: Borrowing based on the term loan
agreement dated as of May 21,
2014
Secured / with no guarantee: May 23, 2014
: May 22, 2015
: July 17, 2014
: JPY 13,488 million: JPY 0 million

4. Acquisition of Assets
INV decided to acquire the following 18 properties (totalacquisition price of JPY 39,938 million) on June 23,
2014, and completed the acquisition of all of the 18
properties on July 17, 2014.
Property number: D3 Name of property: Hotel MyStays- 85 -

2. Acquisition of Assets
INV decided to acquire the following 3 properties (totalacquisition price of JPY 13,261 million) on February 4,
2015, and completed the acquisition of all of the 3
properties on February 6, 2015.
Property number: D21 Name of property: APA Hotel
Yokohama-Kannai

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Acquisition Date
February 6, 2015
Acquisition Price
JPY8,350 million(Note 1)
Location
3-37-2, Sumiyoshi-cho,Naka-ku, Yokohama-shi,
Kanagawa

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Kyoto-Shijo
Acquisition Date
Acquisition Price(Note 1)
Location

Construction Date
Category ofAssetsSellerTotal Floor Area
Total Leasable
Area

July 17, 2014
JPY6,024 million
52, Kasaboko-cho,Higashiiru, Aburanokoji,
Shijyo-dori, Shimogyo,
Kyoto-shiJanuary 2008
Trust Beneficial Interest

Construction Date
Category ofAssetsSellerShijodori Holding Tokutei
Mokuteki Kaisha
7,241.51m2
7,241.51m2

Total Floor Area
Total Leasable
Area

Property number: D4 Name of property: MyStays
Shin-Urayasu Conference Center
Acquisition Date
July 17, 2014
Acquisition Price JPY4,930 million(Note 1)
Location
2-1-4, Akemi, Urayasu-shi,
ChibaConstruction Date March 2009
Categoryof Trust Beneficial Interest
AssetsSellerZephyrus Tokutei Mokuteki
KaishaTotal Floor Area
6,232.30m2
Total
Leasable 6,232.30m2
Area
Property number: D5
MaihamaAcquisition Date
Acquisition Price(Note 1)
Location
Construction Date
Categoryof
AssetsSellerTotal Floor Area
Total
Leasable
Area

Name of property: Hotel MyStays
July 17, 2014
JPY4,870 million
3-5-1,
Tekko-dori,
Urayasu-shi, Chiba
June 2005
Trust Beneficial Interest
Zephyrus Tokutei Mokuteki
Kaisha2,456.36m2
2,456.36m2

Property number: D6 Name of property: Hotel Vista
Premio Dojima
Acquisition July 17, 2014
Date
Acquisition JPY3,845 million
Price (Note1)
Location
2-4-1, Sonezakishinchi, Kita-ku,
Osaka- 86 -

April 2005
Trust Beneficial Interest
AYK Tokutei Mokuteki
Kaisha6,568.51m2
6,568.51m2

Property number: D22 Name of property: Hotel Nets
Hakodate
Acquisition Date
February 6, 2015
Acquisition Price
JPY2,792 million(Note 1)
Location26-17, Motomachi,
Hakodate-shi, Hokkaido
Construction Date February 2008
Category ofTrust Beneficial Interest
AssetsSellerZephyrus Tokutei Mokuteki
KaishaTotal Floor Area
7,961.26m2
Total Leasable
7,961.26m2
Area
Property number: D23 Name of property: Flexstay Inn
Shirogane
Acquisition Date
February 6, 2015
Acquisition Price
JPY2,119 million(Note 1)
Location
5-10-15, Shirokane,
Minato-ku, Tokyo
Construction Date December 1984
Category ofTrust Beneficial Interest
AssetsSellerNishi Tokutei Mokuteki
KaishaTotal Floor Area
1,754.06m2
Total Leasable
1,754.06m2
Area(Note)
Acquisition price is based on the purchaseprice indicated in the relevant purchase agreement anddoes not include acquisition costs, property taxes, city
planning taxes and consumption taxes, etc.

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Constructio
n DateCategory ofAssetsSellerTotal Floor
Area
Total
Leasable
Area

August 1990
Trust Beneficial Interest
Danube Tokutei Mokuteki Kaisha
9,445.32m2
9,445.32m2

Property number: D7 Name of property: Hotel MyStays
Nagoya-Sakae
Acquisition July 17, 2014
Date
Acquisition JPY2,958 million
Price (Note1)
Location
2-23-22, Higashisakura, Naka-ku,
Nagoya, Aichi
Constructio November 1979n DateCategory of Trust Beneficial Interest
AssetsSellerZephyrus Tokutei Mokuteki Kaisha
Total Floor 9,064.71m2
Area
Total
9,064.71m2
Leasable
Area
Property number: D8 Name of property: Hotel MyStays
Sakaisuji-Honmachi
Acquisition July 17, 2014
Date
Acquisition JPY2,514 million
Price (Note1)
Location
1-4-8,
Awaji-machi,
Chuo-ku,
Osaka-shi, Osaka
Constructio July 2008
n DateCategory of Trust Beneficial Interest
AssetsSellerNagahoribashi Holding Tokutei
Mokuteki Kaisha
Total Floor 4,188.83m2
Area
Total
4,188.83m2
Leasable
Area
Property number: D9 Name of property: Hotel MyStays
Yokohama
Acquisition July 17, 2014
Date
Acquisition JPY2,119 million
Price (Note- 87 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)1)
Location
Constructio
n DateCategory ofAssetsSellerTotal Floor
Area
Total
Leasable
Area

4-81,
Sueyoshi-cho,Naka-ku,
Yokohama-shi, Kanagawa
October 1974
Trust Beneficial Interest
Zephyrus Tokutei Mokuteki Kaisha
7,379.43m2
7,379.43m2

Property number: D10 Name of property: Hotel MyStays
Nippori
Acquisition
July 17, 2014
Date
Acquisition JPY1,898 million
Price (Note1)
Location
5-43-7,
Higashi-Nippori,
Arakawa-ku, Tokyo
Constructio April 1987
n DateCategory of Trust Beneficial Interest
AssetsSellerNishi Tokutei Mokuteki Kaisha
Total Floor 1,719.29m2
Area
Total
1,719.29m2
Leasable
Area
Property number: D11 Name of property: Hotel MyStays
Fukuoka-Tenjin-Minami
Acquisition July 17, 2014
Date
Acquisition JPY1,570 million
Price (Note1)
Location
3-14-20,
Haruyoshi,
Chuo-ku,
Fukuoka-shi, Fukuoka
Constructio February 2008
n DateCategory of Trust Beneficial Interest
AssetsSellerShijodori
Holding
Tokutei
Mokuteki Kaisha
Total Floor 3,412.71m2
Area
Total
3,412.71m2
Leasable
Area
Property number: D12 Name of property: Flexstay Inn
Iidabashi
Acquisition
July 17, 2014

- 88 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Date
Acquisition
Price (Note1)
Location
Constructio
n DateCategory ofAssetsSellerTotal Floor
Area
Total
Leasable
Area

JPY1,381 million
3-26,
Shin-Ogawa-cho,Shinjuku-ku, Tokyo
December 1990
Trust Beneficial Interest
Aki Tokutei Mokuteki Kaisha
2,953.38m2
2,953.38m2

Property number: D13 Name of property: Hotel MyStays
Ueno Inaricho
Acquisition July 17, 2014
Date
Acquisition JPY1,331 million
Price (Note1)
Location
1-5-7, Matsugaya, Taito-ku, Tokyo
Constructio December 1986n DateCategory of Trust Beneficial Interest
AssetsSellerNishi Tokutei Mokuteki Kaisha
Total Floor 1,150.76m2
Area
Total
1,150.76m2
Leasable
Area
Property number: D14 Name of property: Flexstay Inn
ShinagawaAcquisition July 17, 2014
Date
Acquisition JPY1,242 million
Price (Note1)
Location
1-22-19,
Kitashinagawa,Shinagawa-ku, Tokyo
Constructio October 1986n DateCategory of Trust Beneficial Interest
AssetsSellerNishi Tokutei Mokuteki Kaisha
Total Floor 1,134.52m2
Area
Total
1,134.52m2
Leasable
Area
Property number: D15 Name of property: Flexstay Inn
Tokiwadai- 89 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Acquisition
Date
Acquisition
Price (Note1)
Location
Constructio
n DateCategory ofAssetsSellerTotal Floor
Area
Total
Leasable
Area

July 17, 2014
JPY1,242 million
1-52-5, Tokiwadai,Tokyo
December 1989

Itabashi-ku,

Trust Beneficial Interest
Aki Tokutei Mokuteki Kaisha
2,539.75m2
2,539.75m2

Property number: D16 Name of property: Flexstay Inn
SugamoAcquisition July 17, 2014
Date
Acquisition JPY1,192 million
Price (Note1)
Location
3-6-16,
Sugamo,Toshima-ku,
TokyoConstructio January 1992
n DateCategory of Trust Beneficial Interest
AssetsSeller
Aki Tokutei Mokuteki Kaisha
Total Floor 2,089.86m2
Area
Total
2,089.86m2
Leasable
Area
Property number: D17 Name of property: Hotel MyStays
OtemaeAcquisition July 17, 2014
Date
Acquisition JPY1,192 million
Price (Note1)
Location
1-3-2,
Tokui-cho,
Chuo-ku,
Osaka-shi, Osaka
Constructio December 1986n DateCategory of Trust Beneficial Interest
AssetsSeller
Aki Tokutei Mokuteki Kaisha
Total Floor 4,956.66m2
Area
Total
4,956.66m2
LeasableArea- 90 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)
Property number: D18 Name of property: Flexstay Inn
Kiyosumi Shirakawa
Acquisition July 17, 2014
Date
Acquisition JPY749 million
Price (Note1)
Location
1-12-16, Tokiwa, Koto-ku, Tokyo
Constructio May 1992
n DateCategory of Trust Beneficial Interest
AssetsSeller
Aki Tokutei Mokuteki Kaisha
Total Floor 2,673.64m2
Area
Total
2,673.64m2
Leasable
Area
Property number: D19 Name of property: Flexstay Inn
Nakanobu P1Acquisition July 17, 2014
Date
Acquisition JPY589 million
Price (Note1)
Location
4-27-12, Futaba, Shinagawa-ku,
TokyoConstructio September 1986n DateCategory of Trust Beneficial Interest
AssetsSeller
Aki Tokutei Mokuteki Kaisha
Total Floor 770.56m2
Area
Total
770.56m2
Leasable
Area
Property number: D20 Name of property: Flexstay Inn
Nakanobu P2Acquisition July 17, 2014
Date
Acquisition JPY283 million
Price (Note1)
Location
4-27-8, Futaba, Shinagawa-ku,
TokyoConstructio March 1989
n DateCategory of Trust Beneficial Interest
AssetsSeller
Aki Tokutei Mokuteki Kaisha
Total Floor 319.49m2
Area
Total
319.49m2
LeasableArea- 91 -

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended June 30, 2014
(from January 1 to June 30, 2014)(Note 1) Acquisition price is based on the purchaseprice indicated in the relevant purchase agreement anddoes not include acquisition costs, property taxes, city
planning taxes and consumption taxes, etc.

- 92 -

VI.

I.

Statement of Cash Distribution

Unappropriatedretained

Preceding Period (Reference)

Fiscal Period ended December

Fiscal Period ended December

31, 2014

31, 2014 (from January 1, 2014

(from July 1, 2014 toto June 30, 2014)

December 31, 2014)

974,975,488 yen

2,031,546,537 yen

II. Distribution Amount

901,431,567 yen

1,956,146,838 yen(Distribution per Unit)(573 yen)(733 yen)

III. Retained earnings carried

73,543,921 yen

75,399,699 yen

earnings

forwardCalculation

methoddistribution amountofIn

accordance

with

the

In

accordance

with

the

distribution policy set forth indistribution policy set forth in

Article 17, Paragraph 1 of the

Article 17, Paragraph 1 of the

Articles of Incorporation of

Articles of Incorporation of

Investment

Investment

Corporation,

the

Corporation,

thedistribution amount shall be the

distribution amount shall be theamount which does not exceed

amount which does not exceed

the amount of profits but

the amount of profits but

exceeds

exceeds

90%

of

the

90%

of

the

distributable profit as defined

distributable profit as definedin Article 67-15 of the Special

in Article 67-15 of the Special

Taxation

Taxation

MeasuresAct.

MeasuresAct.

However, in the event that any

However, in the event that any

tax losses arise, or if no profits

tax losses arise, or if no profits

have been recorded for tax

have been recorded for tax

purposes due to tax losses

purposes due to tax losses

carried forward, the distribution

carried forward, the distribution

amount may be as reasonably

amount may be as reasonably

determinedby

Investment

determinedbyCorporation.

Pursuant to thisCorporation.

Pursuant to thisInvestment

policy, Investment Corporation

policy, Investment Corporation

determined

determinedthedistribution

amount to be 901,431,567 yen,
- 93 -

thedistribution

amount to be 1,956,146,838

out

of

net

901,815,748 yen.

incomeofInvestment

yen, out of net income of
1,958,002,616

yen.

Corporation did not distribute

Investment Corporation did not

any amounts in excess of profit,

distributeas set forth in Article 17,

excess of profit, as set forth inParagraph 4 of the Articles of

Article 17, Paragraph 4 of theIncorporation.

Articles of Incorporation.

anyamountsinNote
Accompanying English financial information, comprising Balance Sheet, Statement of Income,Statement of Unitholders’ Equity, Notes to financial statements and statement of Cash Distribution, havebeen translated from the Japanese financial statements of the Investment Corporation prepared inaccordance with the Act on Investment Trusts and Investment Corporations of Japan.
Under Article 130 of the Act on Investment Trusts and Investment Corporations of Japan, the Japanesefinancial statements for the six months ended December 31, 2014 have been audited by Ernst & Young
ShinNihon LLC, in accordance with auditing standards generally accepted in Japan. However, English
translation of the Japanese language report of independent auditors is not attached herein since theaccompanying English translation of Balance Sheet, Statement of Income, Statements of Unitholders’Equity, Notes to financial statements and Statement of Cash Distribution are unaudited.
Regarding the English audited financial statements, please refer to the “Audited Financial Statements”
on the website of Invincible Investment Corporation: http://www.invincible-inv.co.jp/eng/cms/doc.html- 94 -

VII.

Statement of Cash Flow (Reference Information)

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)
Cash flows from operating activities
Net income before taxes
Depreciation expenses
Investment unit issuance expenses
Finance related costs
Amortization of tenant leasehold and security deposits
in trust
Interest received
Interest paid
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in accounts receivable
Decrease (increase) in consumption tax receivable
Increase (decrease) in accrued consumption tax
payableIncrease (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease in property and equipment due to sale
Others(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

902,420
527,945
115,438
842,043

1,958,607
837,289
152,101
294,738

(435)

(378)

(404)
376,514(1,181)(60,244)
7,419

(537)
365,480577(573,359)(1,319,253)

143,637(143,637)(87,869)(1,613)
18,110(28,364)
10,9094,367,451(6,762)(673)(10,409)
2,933
13,561(9,776)
5,533

Subtotal

7,125,015

1,572,798

Proceeds of interest
Payment of interest
Payment of corporate taxes, etc.

404
(502,533)
(609)

537
(363,177)(547)

Cash flows from operating activities

6,622,276

1,209,610(5,618,018)(154,916)(40,203,087)-(93,087)(47,787)

81,527

131,585(17,833)(694)

Cash flows from investing activities(5,802,328)(40,119,985)

Cash flows from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Repayment of long-term debt in trust
Finance related costs

13,500,000(11,250)(2,797,899)(11,000,000)(732,126)(13,488,750)
57,300,000(17,552,100)(618,099)

Cash flows from investing activities
Payment for acquisition of tangible assets in trust
Repayment of tenant leasehold and security deposits
Repayment of tenant leasehold and security deposits
in trust
Proceeds of tenant leasehold and security deposits intrust
Others- 95 -

Fiscal Period ended
June 30, 2014
(from January 1, 2014 toJune 30, 2014)(342,802)(98,468)(1,482,546)(662,597)
4,187,160
3,524,562

Payment of distributions
Proceeds from issuance of investment units
Payment of investment unit issuance expenses
Cash flows from financing activities
Increase (decrease) in cash and cash equivalents
Beginning balance of cash and cash equivalents
Closing balance of cash and cash equivalents ※1(Unit: thousands of yen)
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)(900,512)
23,962,024(151,356)
48,551,206
9,640,831
3,524,562
13,165,393[Notes Concerning Significant Accounting Policies (Reference Information)]
By Period
Item

Fiscal Period ended June 30, 2014

Fiscal Period ended December 31,(from January 1 to June 30, 2014)2014 (from July 1, 2014 toDecember 31, 2014)

Cash and cash equivalents as statedCash and cash equivalents as statedCash and cash equivalents as statedin Statement of Cash Flowsin the Statement of Cash Flowsin the Statement of Cash Flows

consist of cash on hand and cash inconsist of cash on hand and cash intrust, floating deposits, deposits intrust, floating deposits, deposits intrust and short-term investments thattrust and short-term investments thatare very liquid and realizable with aare very liquid and realizable with amaturity of three months or lessmaturity of three months or lesswhen purchased and that are subject

when purchased and that are subject

to insignificant risks of changes in

to insignificant risks of changes invalue.

value.

[Notes to Statement of Cash Flow (Reference Information)]
By Period

Fiscal Period ended June 30, 2014

Fiscal Period ended December 31,

Item(from January 1 to June 30, 2014)2014 (from July 1, 2014 to※1.

(As of June 30, 2014)(Unit: thousands of yen)

December 31, 2014)
Relationship between cash

and cash equivalents in statement of

Cash and deposits

cash

Cash and deposits intrust
Cash and cash
equivalents

flows

and

amounts

accompanying balance sheetin- 96 -

759,058
2,765,504
3,524,562(As of December 31, 2014)(Unit: thousands of yen)
Cash and deposits
Cash and deposits intrust
Cash and cash
equivalents

9,153,872
4,011,521
13,165,393

Global Offering & Historical Unit Price‐ Steady Expansion of Market/Capitalization and Asset Size
■ Continued focus on unitholder value through accretive acquisitions, debt refinancing to lower
interest costs, increasing rents and RevPAR as well as accretive equity offerings■ Market capitalization target of JPY 100 billion, announced in February 2014, was achieved in lessthan one year

(Note)
Unit prices indicate the closing price on the TSE market. Development of Tokyo Stock Exchange REIT
Index indicates on or after January 4, 2013 on the assumption that the closing price of INV’s unit price is deemed as
identical to the closing price of Tokyo Stock Exchange REIT index as of January 4, 2013.

■ Overview of Unitholders/Investment Units■ Number of Unitholders by Owner- 97 -

■ Number of Investment Units by Owner- 98 -

Portfolio Data
Portfolio Characteristics
At the end of the reporting period, the number of properties held by the Investment Corporation
totaled 91, including 63 residential properties, 20 hotels, 7 retail and office buildings, and as well as
one parking lot with a total acquisition value of JPY 117,927 million and a total leasable area of
224,574.36 m2.
Investment Ratio by Region(Note)The ratios below are indicated are based on the acquisition
price and are rounded to one decimal place.

(Note 1) Greater Tokyo Area indicates Tokyo excluding 23 Wards, Kanagawa, Chiba, and Saitama.
(Note 2) Major Regional Cities indicates “areas surrounding Tokyo” and “major cities including ordinancedesignated cities and surrounding areas.

By Property Type- 99 -

By Property Age(Note)

Open parking lots are not counted in the property age distribution since they lack building structures.

- 100 -

Portfolio Overview(as of December 31, 2014)
PurposeProperty
NumberResidential

A26
A27

Name of Property

Location

Nisshin Palacestage
Suginami Ward, Tokyo
Daitabashi
Nisshin Palacestage HigashiToshima Ward, Tokyo
NagasakiLeasable Area(m2)

RentableUnits

Acquisition
Price(JPY mn)

Appraisal
Value(JPY mn)

Book Value(JPY mn)

Investment
Occupancy
Ratio
Rate (%)(%)

1,771.13

98

1,251

1,150

1,139

1.1

90.0

2,681.94

60

1,229

1,250

1,112

1.0

96.3

A28

Growth Maison Gotanda

Shinagawa Ward, Tokyo

1,051.50

48

888

949

842

0.8

100.0

A29

Growth Maison Kameido

Koto Ward, Tokyo

1,367.96

66

1,070

1,080

1,007

0.9

86.2

A30

Emerald House

Itabashi Ward, Tokyo

2,152.31

96

1,505

1,240

1,409

1.3

98.0

A31

Harmonie Ochanomizu

Bunkyo Ward, Tokyo

1,748.24

65

1,428

1,310

1,373

1.2

93.5

Suncrest Shakujii-Koen

Nerima Ward, Tokyo

3,029.16

29

1,088

1,030

1,064

0.9

97.0

Growth Maison ShinYokohama
Belle Face UenoOkachimachi

Yokohama City, Kanagawa
Prefecture

1,858.44

68

1,059

1,140

989

0.9

95.6

Taito Ward, Tokyo

1,351.11

64

1,023

972

977

0.9

98.3

A32
A33
A34
A35

Grand Rire Kameido

Koto Ward, Tokyo

1,562.26

72

906

937

849

0.8

100.0

A36

Growth Maison Ikebukuro

Toshima Ward, Tokyo

952.89

42

825

859

772

0.7

90.5

A37

Growth Maison Yoga

Setagaya Ward, Tokyo

1,015.34

39

795

691

761

0.7

94.9

A38

Route Tachikawa

Tachikawa City, Tokyo

1,368.57

24

676

606

650

0.6

96.6

A39

Shibuya-Honmachi Mansion Shibuya Ward, Tokyo

1,167.50

25

651

604

655

0.6

91.3

A40

City Heights Kinuta

1,235.93

19

646

467

646

0.5

100.0

A41

Acseeds Tower Kawaguchi- Kawaguchi City, Saitama
NamikiPrefecture

1,210.74

57

620

699

566

0.5

86.0

A42

Capital Heights Kagurazaka Shinjuku Ward, Tokyo

1,126.65

26

604

553

616

0.5

91.6

A43

College Square Machida

Machida City, Tokyo

1,047.75

62

589

511

569

0.5

100.0

A44

Belair Meguro

Meguro Ward, Tokyo

557.05

25

589

582

570

0.5

88.1

A45

Wacore Tsunashima I

Yokohama City, Kanagawa
Prefecture

907.46

50

572

508

543

0.5

89.9

A46

Foros Nakamurabashi

Nerima Ward, Tokyo

815.77

37

566

565

528

0.5

88.8

A47

Growth Maison Kaijin

Funabashi City, Chiba
Prefecture

2,040.27

34

557

458

527

0.5

89.0

A48

College Square Machiya

Arakawa Ward, Tokyo

871.35

43

510

509

474

0.4

100.0

A51

City House Tokyo Shinbashi Minato Ward, Tokyo

3,364.00

86

2,520

2,860

2,392

2.1

95.6

A52

Winbell Kagurazaka

Shinjuku Ward, Tokyo

4,032.70

118

3,260

3,630

3,113

2.8

100.0

Shinjuku Ward, Tokyo

4,310.77

69

1,880

2,280

1,876

1.6

90.5

Shinjuku Ward, Tokyo

1,987.88

88

1,450

1,630

1,368

1.2

88.8

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

Setagaya Ward, Tokyo

A56

Casa Eremitaggio

Meguro Ward, Tokyo

1,197.19

17

1,070

1,020

990

0.9

91.2

A59

Towa City Coop Shinotsuka
Toshima Ward, TokyoII

1,627.13

58

866

985

826

0.7

91.3

A61

Bichsel Musashiseki

Nerima Ward, Tokyo

1,220.24

70

577

659

556

0.5

85.8

A62

Lexel Mansion Ueno
Matsugaya

Taito Ward, Tokyo

1,969.45

29

970

1,090

893

0.8

96.8

A63

Towa City Coop Sengencho

3,426.36

154

1,110

1,300

1,039

0.9

80.2

A64

Royal Park Omachi

1,929.59

51

415

503

396

0.4

88.1

A65

Lexington Square
Haginomachi

1,528.58

39

330

441

303

0.3

100.0

A66

Visconti Kakuozan

705.75

8

255

252

238

0.2

89.7

A71

Lexington Square Daitabashi Suginami Ward, Tokyo

1,430.64

43

977

1,070

898

0.8

85.1

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo Sapporo City, Hokkaido

A75

Spacia Ebisu

A76

Neo Prominence

A77

Invoice Shin-Kobe Residence Kobe City, Hyogo Prefecture

A78

Cosmo Court Motomachi

A79

Revest Honjin

Yokohama City, Kanagawa
Prefecture
Sendai City, Miyagi
Prefecture
Sendai City, Miyagi
Prefecture
Nagoya City, Aichi
Prefecture

Sumida Ward, Tokyo

784.74

33

511

566

464

0.4

97.0

4,460.56

120

1,180

1,130

1,043

1.0

83.7

Shibuya Ward, Tokyo

7,794.91

109

7,010

7,230

6,657

5.9

93.6

Kita Ward, Tokyo

3,574.70

52

1,660

1,800

1,649

1.4

93.9

2,773.71

81

1,260

1,340

1,239

1.1

94.0

Kobe City, Hyogo
Prefecture
Nagoya City, Aichi
Prefecture

2,310.49

82

973

1,040

956

0.8

86.6

1,933.80

80

674

732

662

0.6

92.5

- 101 -

Residential

Nagoya City, Aichi
Prefecture

A80

Revest Matsubara

A81

Sun Terrace Minami IkebukuroToshima Ward, Tokyo
Nagoya City, Aichi
Prefecture
Nagoya City, Aichi
Prefecture
Nagoya City, Aichi
Prefecture

1,955.40

70

657

743

646

0.6

93.7

898.70

38

625

695

615

0.5

92.1

1,731.68

64

608

666

598

0.5

94.4

1,634.60

61

597

674

587

0.5

95.4

1,554.03

40

595

641

585

0.5

100.0

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

A84

Revest Heian

A85

Vendir Hamaotsu Ekimae

Otsu City, Shiga Prefecture

2,670.66

81

581

674

569

0.5

87.3

A86

Salvo Sala

Osaka City, Osaka
Prefecutre

1,428.12

54

544

603

537

0.5

93.5

A87

Excellente Kagurazaka

Shinjuku Ward,Tokyo

701.92

33

543

593

537

0.5

88.3

1,185.50

50

525

565

516

0.4

88.1

Osaka City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

A88

Luna Court Edobori

A89

Winntage Kobe Motomachi

1,433.35

57

512

560

502

0.4

94.8

A90

Queen's Court Fukuzumi

Koto Ward, Tokyo

765.18

25

456

528

451

0.4

92.5

A91

Corp Higashinotoin

Kyoto City, Kyoto
Prefecture

1,029.05

42

446

491

440

0.4

92.9

A92

Belair Oimachi

Shinagawa Ward, Tokyo

530.60

26

412

476

408

0.3

92.9

A93

Siete Minami-Tsukaguchi

Amagasaki City, Hyogo
Prefecture

1,020.86

40

374

414

370

0.3

97.5

A94

Prime Life Sannomiya IsogamiKobe City, Hyogo
Koen
Prefecture789.12

32

373

397

368

0.3

96.9

A95

Osaka City, Osaka
HERMITAGE NANBA WEST
Prefecture992.76

21

355

397

352

0.3

100.0

A96

Century
1-bankan

ShinkawaNagoya City, Aichi
Prefecture

1,477.62

44

335

399

333

0.3

95.5

A97

West Avenue

794.80

40

331

344

325

0.3

85.0

974.81

31

310

364

309

0.3

93.8

761.18

28

297

323

293

0.3

93.3

109,584.45

3,413

58,08360,77555,569

49.3

92.7

Park

Kunitachi City, Tokyo

A98

Little River Honmachibashi

A99

Prime Life Mikage

Okasa City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

Subtotal
Office Buildings/Retail Facilities

B8

Kindai Kagakusha Building

Shinjuku Ward, Tokyo

1,451.54

13

1,301

1,040

1,239

1.1

100.0

B9

Shinjuku Island

Shinjuku Ward, Tokyo

526.43

1

715

574

710

0.6

100.0

B14

Lexington Plaza Nishigotanda Shinagawa Ward, Tokyo

6,033.58

11

4,880

4,010

4,776

4.1

100.0

B15

Cross Square NAKANO

2,145.00

45

1,060

944

1,067

0.9

64.3

2,178.41

13

816

659

757

0.7

100.0

8,419.15

18

3,280

3,440

3,163

2.8

100.0

B16

Ohki Aoba Building

B17

Lexington Plaza Hachiman

B18

AEON TOWN Sukagawa

Nakano Ward, Tokyo
Sendai City, Miyagi
Prefecture
Sendai City, Miyagi
Prefecture
Sukagawa City, Fukushima
Prefecture

Subtotal

2,320

2,250

2,061

2.0

100.0

102

14,372

12,917

13,777

12.2

98.0

81.04

1

97

107

100

0.1

100.0

C1

Stop Parking Kanda-Sudacho Chiyoda Ward Tokyo

81.04

1

97

107

100

0.1

100.0

Hotels1

39,194.69

Parking
Lots

18,440.58

D1

Hotel MyStays Kanda

Chiyoda Ward, Tokyo

2,585.72

126

2,851

3,280

2,891

2.4

100.0

D2

Hotel MyStays Asakusa

Sumida Ward, Tokyo

3,327.38

160

2,584

3,290

2,608

2.2

100.0

D3

Hotel MyStays Kyoto-shijo

Kyoto-shi, Kyoto Prefecture

7,241.51

224

6,024

8,010

5,997

5.1

100.0

6,232.30

175

4,930

5,260

4,905

4.2

100.0

Subtotal

D4
D5

MyStaysShin-Urayasu
Urayasu-shi, Chiba Prefecture
Conference Center
Urayasu-shi, Chiba Prefectu
Hotel MyStays Maihama
re2,456.36

90

4,870

5,080

4,846

4.1

100.0

D6

Hotel Vista Premio Dojima

Osaka-shi, Osaka Prefecture

9,445.32

141

3,845

4,300

3,834

3.3

100.0

D7

Hotel MyStays Nagoya-Sakae Nagoya-shi, Aichi Prefecture

9,064.71

270

2,958

3,040

2,929

2.5

100.0

4,188.83

190

2,514

3,250

2,508

2.1

100.0

7,379.43

190

2,119

2,590

2,108

1.8

100.0

1,719.29

93

1,898

2,140

1,891

1.6

100.0

3,412.71

177

1,570

1,740

1,567

1.3

100.0

D8
D9

Hotel
MyStays
Osaka-shi, Osaka Prefecture
Sakaisuji-Honmachi
Yokohama-shi,
Kanagawa
Hotel MyStays Yokohama
Prefecture

D10

Hotel MyStays Nippori

D11

Hotel
MyStaysFukuoka-shi,
Fukuoka-Tenjin-Minami
Prefecture

Arakawa Ward , Tokyo
Fukuoka- 102 -

D12

Flexstay Inn Iidabashi

2,953.38

59

1,381

1,560

1,382

1.2

100.0

D13

Hotel MyStays Ueno Inaricho Taito Ward, Tokyo

1,150.76

72

1,331

1,540

1,326

1.1

100.0

D14

Flexstay Inn Shinagawa

Shinagawa Ward, Tokyo

1,134.52

55

1,242

1,510

1,242

1.1

100.0

D15

Flexstay Inn Tokiwadai

Itabashi Ward, Tokyo

2,539.75

129

1,242

1,420

1,244

1.1

100.0

D16

Flexstay Inn Sugamo

Toshima Ward, Tokyo

2,089.86

104

1,192

1,370

1,189

1.0

100.0

D17

Hotel MyStays Otemae

Osaka-shi, Osaka

4,956.66

110

1,192

1,600

1,192

1.0

100.0

D18

Flexstay
Shirakawa

Kiyosumi
Koto Ward, Tokyo

2,673.64

55

749

821

750

0.6

100.0

D19

Flexstay Inn Nakanobu P1

Shinagawa Ward, Tokyo

770.56

39

589

647

591

0.5

100.0

D20

Flexstay Inn Nakanobu P2

Shinagawa Ward, Tokyo

391.49

22

283

311

286

0.2

100.0

Subtotal

75,714.18

5,997

45,37352,75945,296

38.5

100.0

Total

224,574.36

77,98877,26875,363

100.0

96.1

(Note)

Inn

Shinjuku Ward, Tokyo

Figures are rounded down to the indicated unit and percentages are rounded to one decimal place.

- 103 -

Newly Acquired 3 Hotels (acquired on February 6, 2015)- 104 -

- 105 -.
(Note 1) Types of accommodations (Daily, Weekly and Monthly) are based on the gross revenue from January 2014
to December 2014 (full year). (Daily = 1 ~6 days, Weekly = 7~29 days and Monthly = 30 days or more)(Note 2) ADR, or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees)
divided by the total number of sold rooms for the same period.
(Note3)“Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total number of rooms available
during the same period x total operating days during the same period)(Note 4) RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by
the aggregate number of rooms available for the same period (rooms x number of days), and is the same figure
as that of a product of room occupancy rate multiplied with ADR.
(Note 5) Calculated based on the actual results from January 1, 2014 to December 31, 2014.

- 106 -

Information for Unitholders
Notification Process for Address Changes
Please notify your brokerage (financial instruments business operator) regarding changes toaddresses, names, registered seals, and the like.

Unitholders who have special accounts instead of

brokerage accounts should contact the transfer account management institution (financial
instruments business operator) below.
Unitholders of the pre-merger Investment Corporation (former Tokyo Growth REIT Fund)
Mitsubishi UFJ Trust and Banking Corporation Limited

Toll-free Number: 0120-255-100

Unitholders of the former LCP Investment Corporation
Sumitomo Mitsui Trust Bank, Limited Toll-free Number: 0120-782-031
Dividends
Unitholders may collect “dividends” by submitting the “Dividends Receipt” at your local Japan Post
Bank or at the deposit teller of a post office.

In the case that the collection period is past, please

specify the collection method on the back of the “Dividends Receipt,” and either mail the receipt to
the Transfer Agent Department of the Sumitomo Mitsui Trust Bank, Limited or collect from a branchteller.
(Bank Transfers)
Should you desire to specify bank transfers for future dividends, please notify your brokerage(financial instruments business operator).

(Note)
Please collect dividends within 3 years of distribution. Please note that payments cannot be made after 3
years due to the rules and regulations of the Articles of Incorporation of the Investment Corporation.

Notification(Notice of Dividend Payment)
The 2008 amendment of the Special Taxation Measures Law (Act No. 23 of April 30, 2008)
mandated the sending to unitholders a “Notice of Dividend Payment” stating the dividend amount,amount of taxes withheld, and the like. If you collect dividends via a “Dividends Receipt,” pleaseview the “Notice of Dividend Payment” sent alongside it.
- 107 -

If you have specified a wire transfer, the“Dividend Statement” delivered with the dividend payment is the “Notice of Dividend Payment.”
Both documents may be used as supporting documents when filing income tax returns.
(Characters for Addresses and Names of Unitholders)With the digitization of investment securities, if there are Chinese characters in your address ornames that the Japan Securities Depository Center (JASDEC) has not included in the transfer system,
please list in the Investors’ Registry by converting part or all of the characters to those that JASDEC
has included in the transfer system or to katakana.

Please be aware that correspondence may be

addressed using characters that JASDEC has included in the transfer system.
your brokerage regarding characters registered for your address and name.

Annual Schedule

Inquiries
For inquiries regarding INV: Consonant Investment Management Co., Ltd.
TEL: 03-5411-2731 (Main)
Weekdays 9:30-17:30- 108 -

Please inquire with

Website

INV Website
http://www.invincible-inv.co.jp/
For Unitholders
Investors’ Registry

Sumitomo Mitsui Trust Bank, Limited 4-1, Marunouchi 1-chome,

Administrator

Chiyoda-ku, Tokyo

Special Account Management<Unitholders of the former Tokyo Growth REIT Fund>

Institution

Mitsubishi UFJ Trust and Banking Corporation Limited
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo<Unitholders of the forme LCP Investment Corporation>
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome Chiyoda-ku, Tokyo

Correspondence

Transfer Agent Department, Sumitomo Mitsui Trust Bank,
Limited8-4, Izumi 2-chome, Suginami-ku, Tokyo, 168-0063(Telephone Assistance)Toll-free Telephone Number 0120-782-031
Administrative services are available at the main and branch
offices throughout
Japan of Sumitomo Mitsui Trust Bank, Limited- 109 -