[For Information Purpose Only]

October 25, 2018

To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Name of Representative:
Naoki Fukuda, Executive Director
Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo, Japan(Securities Code: 8963)
Asset Manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Performance Update for September 2018
Invincible Investment Corporation (“INV”) hereby announces its monthly performance for hotel
and residential assets.
1. Hotel and Residential Assets Overview
The combined NOI for the hotel and residential portfolio1 for the December 2018 fiscal period(July to September) increased by 1.5% year on year.
A diversified hotel and residential portfolio with strong NOI growth helped mitigate thetemporary impact of the natural disasters in Kansai and Hokkaido. INV owns interests in 66
hotel properties and 64 residential properties. The September NOI for the total portfolio1
increased 2.1% compared to September, 2017.
INV reiterates its forecasted DPU guidance2 of JPY1,683 per unit for the 2H 2018, as
announced in “Financial Summary for the June 2018 Fiscal Period (from January 1, 2018 toJune 30, 2018)” dated August 22, 2018.
(Note 1) Based on 54 hotel properties and 64 residential properties stated in “5. Performance (1) 54 Hotel Properties” and “(2)64 Residential Properties” below. NOI includes a simulated amount of dividend income from Kingdom TMK (the“TMK”) that owns Sheraton Grande Tokyo Bay Hotel as an underlying asset. The fiscal periods of the TMK aresemi-annual periods from April 1 to September 30 and from October 1 to March 31 every year, and INV will receive thedividend within three months from the end of each semi-annual fiscal period of the TMK. Since INV does not receive
a dividend from the TMK on a monthly basis, the amount of dividend INV receives from the TMK for each month is asimulated figure, which is calculated by deducting (i) simulated expenses such as operating expense of the TMK and
the interest of debt (calculated dividing the budget of the TMK for the fiscal period that includes the relevant month by
the number of months in such fiscal period) from (ii) NOI based on the performance of Sheraton Grande Tokyo Bay
Hotel in the month which is three months before the target month for this performance disclosure and multiplied by
INV’s ownership ratio of the preferred equity interest in the TMK (49.0%). Moreover, NOI does not include thesimulated amount of dividend income from the overseas TK interest that owns the Westin Grand Cayman Seven Mile
Beach Resort and Spa and Sunshine Suites Resort as underline assets acquired by INV in September 2018,.
This English language notice is a translation of the Japanese-language notice released on October 25, 2018 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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Furthermore, NOI is provisional figure and subject to change when it is determined at financial closing; hereinafter thesame(Note 2) It is possible that the amount of distribution will be different from the forecast due to circumstantial changes. Providing
this forecast is in no way a guarantee of distribution amount.

2. Hotel Assets Overview
The hotel portfolio1 performance for the month of September 2018 has shown an increase in
ADR of 4.1%, a decrease in occupancy of 1.9pt., and an increase in RevPAR of 1.8% year on
year.
INV was able to record this 1.8% year on year RevPAR increase despite the negative effects of
Typhoon No. 21 (Typhoon Jebi) in Kansai (where INV has 7 hotels) and an earthquake in
Hokkaido (where INV has 4 hotels). Specifically, Kansai and Hokkaido account for 9.9%2 and
8.0%2 of the total hotel portfolio respectively.
Aside from these two regions, the rest of the hotel portfolio recorded a RevPAR increase of
10.7% year on year, representing a 2.4pt increase in occupancy and a 7.9% increase in ADR.
The New Chitose Airport in Hokkaido and the Kansai International Airport in Osaka resumed fulloperations in October. MyStays Hotel Management Co., Ltd, the major hotel operator for INV,
reports that it expects some residual impact to occupancy for Hokkaido and Kansai in October,however November bookings have returned to previous levels.
Out of the 37 hotels that INV owns in the Greater Tokyo (Tokyo, Kanagawa, Chiba andSaitama) area, the 34 hotels with variable rent continue to perform very well with an increase in
RevPAR of 13.2%, occupancy growth of 3.9pt and ADR growth of 8.5%. INV believes that theGreater Tokyo area will continue to perform well due to the enforcement of Minpaku regulations
since June 2018 and that INV’s latest research is showing that the percent increase in new
supply in Tokyo has peaked in 2018. Over the next two years, the Rugby World Cup in 2019
and the 2020 Summer Olympic Games in Tokyo are expected to increase visitors to Tokyo.
Hotels located in the Greater Tokyo area represent 50.8% of overall hotel portfolio by
acquisition price.
Over the past eighteen months, INV has executed an acquisition strategy aimed to increase thesize and quality of its Greater Tokyo portfolio. INV acquired Hotel MyStays Premier
Hamamatsucho in May 2017. Proceeds from the October 2017 global offering were partiallyused to acquire the Sheraton Grande Tokyo Bay Hotel and Hotel MyStays Premier Omori.
Afterwards, INV acquired Hotel MyStays Yokoyama-Kannai in February 2018, and executed afollow-on acquisition in June 2018 for Hotel MyStays Gotanda and Hotel MyStays Tachikawa.
Most recently, in July 2018, INV completed a global offering where a portion of the proceeds
were used to acquire Hotel MyStays Premier Akasaka and Hotel MyStays Ueno East. The
eight assets account for 21.0%2 of the total hotel portfolio and recorded a 25.3% growth in NOI4
for September 2018 compared to September last year.
The September 2018 NOI for the hotel portfolio1 increased by 0.9% (year on year) and thecumulative NOI for the December 2018 fiscal period (July to September) increased by 0.6%
compared to the same period last year. Excluding disaster affected areas of Kansai and
Hokkaido, the September 2018 NOI for the rest of the hotel portfolio increased by 18.5% year
on year.
(Note 1) Based on 54 hotel properties stated in “4. Performance (1) 54 Hotel Properties” below.
(Note 2) Investment ratio is based on acquisition price of the hotels owned as of the end of September 2018. The acquisition
prices of the preferred equity interest (the “Preferred Equity Interest”) which holds Sheraton Grande Tokyo Bay as anunderlying asset and the TK interest (the “TK Interest”) which holds the Westin Grand Cayman Seven Mile Beach andThis English language notice is a translation of the Japanese-language notice released on October 25, 2018 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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Spa and Sunshine Suites Resorts as underlying assets are based on the investment amount for the Preferred Equity
Interest or the TK Interest. The acquisition price (INV’s TK investment amount) of the TK Interest is converted into
JPY amount via exchange rate of USD 1=JPY 110.45, based on the foreign exchange forward executed on July 26,
2018 and implemented on September 26, 2018.
(Note 3) Based on 44 hotel properties; of the 54 hotel properties stated in “4. Performance (1) 54 Hotel Properties” below, 10
hotels located in Kansai region and Hokkaido prefecture are excluded.
(Note 4) NOI for Sheraton Grande Tokyo Bay Hotel includes a simulated amount of dividend income from the TMK. Pleaserefer to Note 1 of “1. Hotel and Residential Assets Overview” above. Moreover, NOI figures before acquisition by
INV is based on the data obtained from third-parties including previous owners.

3. Residential Assets Overview
The residential portfolio1 occupancy rate as of the end of September 2018 was 95.5% (+1.1pt
year-on-year).
The rent increase program continues to show strong results as average rent per tsubo as of theend of September 2018 increased by 1.8% year-on-year. Given a renewal rate that maintains
roughly 80%, INV’s asset management approach is to continually seek rent increases on bothnew leases and renewal leases so as to steadily increase the average rent in the portfolio
which then facilitates sustained internal NOI growth. The ability to increase rents on renewals
is particularly important as it avoids downtime and costs associates on re-leasing while at thesame time improving revenue. INV announced its rent increase program in February 2014and has provided monthly status reports since 2016.
Rents, compared with immediately preceding leases, increased by 3.4% across all new leases,
5.7% across all renewal leases, and 4.6% across all combined new and renewal leases for the
December 2018 fiscal period.
INV achieved a rent increase for 58.5% of contract renewals (December 2018 fiscal period), incomparison to 54.2% for the full year 2017 (+4.3pt. year-on-year). The retention rate for the
existing tenants continued to be high at 80.4% for the December 2018 fiscal period.
The residential property with the highest rent growth of 7.2% is Royal Parks Tower
Minami-Senju. This 39 story high rise Tokyo residential tower along with the nearby Royal
Parks Seasir Minami-Senju was acquired in a March 2017 public offering.
The 64 residential portfolio represent 20.1% of the total portfolio by acquisition price and thisportfolio has proven to provide a stable and growing source of income to INV. NOI2 for the
residential portfolio increased by 5.8% in September 2018 (year on year), and increased by
5.1% for the December 2018 fiscal period (July to September) compared to the same period in
2017.
(Note 1) Based on 64 residential properties stated in “4. Performance (2) 64 Residential Properties” below.
(Note 2) NOI excludes one-off insurance-related revenues and expenses..

4. Cayman hotels
As announced in “Notice concerning Completion of Acquisition of Asset” dated October 1, 2018,
INV acquired the Westin Seven Mile Beach Resort & Spa and Sunshine Suites Resort througha TK equity investment on September 28, 2018 (Cayman time).
Performance of the two hotel assets year to date has continued to be strong resulting in the
updated 2018 NOI estimated to be 5.8% greater than the estimated 2018 NOI announced at
the time of the determination of its acquisition (July 17, 2018). As a result, INV’s 2018
projected acquisition NOI yield of 9.2% increased to 9.8%. Please refer to “Notice concerningThis English language notice is a translation of the Japanese-language notice released on October 25, 2018 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

3Acquisition of TK Interest with Overseas Real Estate as Underlying Assets” dated July 17,
2017and “Notice concerning Completion of Acquisition of Asset” dated October 1, 2018 for the
calculation basis.
This increase in forecasted 2018 NOI is based on updated actual results through the end of
August, 2018 and the updated forecast for the remainder of the year provided by Pyramid
Cayman Hotel Limited, the operator of the hotels. This increase is mainly attributable to the
2nd quarter and 3rd quarter updates and has been driven by a strong increase in occupancy
rates. Also of importance, TripAdvisor has ranked Seven Mile Beach 5th among the top 25
beaches in the world based upon the reviews of millions of its travelers.
5. Performance(1) 54 Hotel Properties1

88.2%

Same month ofthe previous year
(B)
90.1%

10,495September 2018
(A)
Occupancy Rate2
ADR (JPY)

34

RevPAR (JPY)
Gross Revenue(JPY million)5# of Properties

Occupancy Rate2
ADR (JPY)

34

RevPAR (JPY)
Gross Revenue(JPY million)5# of Properties

Difference(A－B)

YoY Change-1.9pt-2.2%

10,085

+410

+4.1%

9,257

9,091

+166

+1.8%

4,358

4,190

+167

+4.0%

54

54

―

―

Fiscal period
ending December
2018 Cumulative6
(C)
91.1%

Same period of
the previous year7(D)

Difference(C－D)

YoY Change

91.3％-0.3pt-0.3%

11,367

11,146

+222

+2.0%

10,352

10,179

+174

+1.7%

14,36813,865

+503

+3.6%

54

54

―

―

This English language notice is a translation of the Japanese-language notice released on October 25, 2018 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

4(2) 64 Residential Properties8
September 2018
(A)

Same month ofthe previous year
(B)

Occupancy Rate

95.5%

94.4%

+1.1pt+1.2%

Rent per Tsubo
(JPY)

9,758

9,583

+175

+1.8%

# of Properties

64

64

―

―

Fiscal period
ending December
2018 Cumulative6(C)

Same period of
the previous year7
(D)

95.3%

94.4%

+0.9pt

+1.0%

9,794

9,602

+192

+2.0%

64

64

―

―

Occupancy Rate11
Rent per Tsubo(JPY)

Difference(A－B)

YoY Change

Difference(C－D)

YoY Change

11# of Properties(3) 45 Hotel Properties12

89.3%

Same month ofthe previous year
(B)
89.7%

10,638September 2018
(A)
Occupancy Rate2
ADR (JPY)

34

RevPAR (JPY)
Gross Revenue(JPY million)5# of Properties

Occupancy Rate2
ADR (JPY)

34

RevPAR (JPY)
Gross Revenue(JPY million)5# of Properties

Difference(A－B)

YoY Change-0.4pt-0.4%

10,128

+511

+5.0%

9,505

9,089

+416

+4.6%

3,747

3,533

+214

+6.1%

45

45

―

―

Fiscal period
ending December
2018 Cumulative6
(C)
91.3%

Same period of
the previous year7(D)

Difference(C－D)

YoY Change

91.1%+0.2pt+0.3%

11,46911,249

+220

+2.0%

10,477

10,250

+227

+2.2%

12,207

11,725

+482

+4.1%

45

45

―

―

(Note 1) Based on 54 hotel properties; of the 64 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, theunderlying asset of preferred equity interest held by INV) held as of the end of September 2018, 9 hotels with fixed-rentlease agreements and D63 Hotel MyStays Midosuji Honmachi which does not have performance figure for the previous
year since it newly opened in December 2017, are excluded. 9 hotels with fixed-rent lease agreements are D29 Super
Hotel Shinbashi/ Karasumoriguchi, D33 Comfort Hotel Toyama, D36 Super Hotel Tokyo-JR Tachikawa Kitaguchi, D37
Super Hotel JR Ueno-iriyaguchi, D39 Comfort Hotel Kurosaki, D40 Comfort Hotel Maebashi, D41 Comfort HotelThis English language notice is a translation of the Japanese-language notice released on October 25, 2018 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

5Tsubame-Sanjo, D42 Comfort Hotel Kitami, and D48 Takamatsu Tokyu REI Hotel. As for Sheraton Grande Tokyo Bay
hotel, NOI is based on the figure for the month which is three months prior to the target month for this performance
disclosure as INV will receive the dividend from the TMK within three months of each fiscal period end for the TMK as
described above. However, in consideration of seasonality, figures in the table above are based on the figures for
September 2018. Moreover, the Westin Grand Cayman Resort and Spa and Sunshine Suites Resorts which are theunderlying assets of the overseas TK interest acquired by INV in September 2018 are not included.
(Note 2) “Occupancy Rate” for hotel portfolio is calculated using the following formula:room occupancy rate = total number of rooms occupied during the relevant period ÷ (aggregate number of rooms during
the relevant period x number of business days during target period)(Note 3) “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.
(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 for the same period (rooms x number of days), and is the same as product of room occupancy rate and
ADR.
(Note 5) Gross Revenue of Sheraton Grande Tokyo Bay Hotel used in the table is the whole gross revenue of such hotel,
regardless of INV’s ownership ratio of the preferred equity interest in the TMK (49.0%)(Note 6) Figures from July 2018 to September 2018 are stated.
(Note 7) Figures from July 2017 to September 2017 are stated. Figures are based on the assumption that the properties
acquired from July 1, 2017 to December 31, 2017 were held as of July 1, 2017, and figures before acquisition by INV isbased on the data obtained from third-parties including previous owners.
(Note 8) Based on 64 properties held as of the beginning of July 2018.
(Note 9) Percentages are rounded to one decimal place. ADR and RevPAR are rounded to the nearest yen and Gross Revenue isrounded down to the nearest million yen.
(Note 10) For the details of performance for each asset, please visit INV’s website:
http://www.invincible-inv.co.jp/eng/cms/review.html(Note 11) Cumulative occupancy rate for residential portfolio is calculated by dividing the sum of total leased area by the sum of
total leasable area at the end of each month and the percentages are rounded to one decimal place. Cumulative rent per
tsubo is calculated by dividing the total rental revenue including common area charges for each month by the sum of total
leasable area at the end of each month.
(Note 12) 9 hotels properties acquired during January 2018 and August 2018 are excluded from the 54 hotel properties described in(Note 1) above. The 9 hotels are D54 Hotel MyStays Yokohama Kannai, D55 Art Hotel Joetsu, D56 Art Hotel Hirosaki
City, D57 Hotel MyStays Oita, D58 Hotel MyStays Gotanda, D59 Hotel MyStays Tachikawa, D60 Hotel MyStays Premier
Akasaka, D61 Hotel MyStays Premier Sapporo Park, and D62 Hotel MyStays Ueno East.

Website of INV: http://www.invincible-inv.co.jp/eng

This English language notice is a translation of the Japanese-language notice released on October 25, 2018 and was prepared solely for the convenience of, andreference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on
their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties orassurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the eventof any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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