Ichigo Preserves and Improves Real Estate[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

April 20, 2018
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/english
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Wataru Orii, PresidentInquiries: Hiroto Tajitsu, Head of Administration
Tel: +81-3-3502-4892

Earnings Forecast Revision for the January 2019 Fiscal Period
Ichigo Hotel is revising up its January 2019 earnings forecast that was announced
in the March 15, 2018 release “January 2018 Fiscal Period Earnings.”
1. January 2019 Earnings Forecast Revision(JPY million)

Operating
ProfitRecurring
Profit

1,780

996

807

806

3,162

2,424

1,560

1,372

1,371

5,377

+644

+564

+564

+564

+2,215% Change+36.2%+56.7%+69.9%+70.0%+70.1%

Reference:January 2018
Actual

1,782

1,034842

841

3,302

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

OperatingRevenue

Period-end number of shares outstanding: 254,974 shares
The actual operating revenue, operating profit, recurring profit, net income, and dividend
may vary due to changes in circumstances. These forecasts should not be construed as aguarantee of such performance or results. Ichigo Hotel will make a forecast revision should
there be a substantial discrepancy between the forecast and actual operating results.

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2. Reason for January 2019 Earnings Forecast Revision
Ichigo Hotel is revising up its earnings forecast to reflect the impact of the hotel saleannounced in today’s release “Hotel Sale (Smile Hotel Asakusa).” The earnings impact
includes gains on sale, a decrease in rental revenue, a decrease in portfolio size-linked
asset management fees, and an increase in dividend-linked asset management fees.
Operating revenue, recurring profit, and net income are now forecast to exceed theprevious forecast by JPY 644 million, JPY 564 million, and JPY 564 million,respectively. The dividend per share is therefore forecast to exceed the previous forecast
by JPY 2,215 (+70.1%).

3. July 2018 Earnings Forecast
Ichigo Hotel’s earnings forecast for the July 2018 fiscal period is unchanged.

2Preconditions for the January 2019 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2018 to January 31, 2019 (184 days) The forecast assumes the current 21 hotels (20 hotels after the sale of the Smile
Hotel Asakusa on August 1, 2018).
Within operating revenue, rental income is forecast based on current lease contracts
taking into consideration such factors as tenant trends and market conditions.1
Forecast Operating Performance2
January 2019 Fiscal Period
Occupancy3

93.4%

ADR4

JPY 9,140

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OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay theircontractual rents without delay or default.
2The 11 variable rent hotels are: Smile Hotel Kyoto Shijo, Hotel Vista Premio
Kyoto, Nest Hotel Sapporo Ekimae, Chisun Inn Osaka Hommachi, Nest Hotel
Sapporo Odori, Valie Hotel Tenjin, Nest Hotel Osaka Shinsaibashi, Smile HotelTokyo Asagaya, Nest Hotel Naha, Nest Hotel Matsuyama, and Hotel Wing
International Nagoya
3
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period /(total number of guest rooms * number of days hotel was in operation during theperiod)
4
ADR (Average Daily Rate) is calculated with the following formula:
ADR = Total revenue from accommodations (excluding restaurant charges andother service fees) / number of guest rooms occupied during the period
Details of January 2019 Rental Income Forecast(JPY million)
Hotel Name
Smile Hotel Kyoto Shijo
Hotel Vista Premio Kyoto
Nest Hotel Sapporo Ekimae
Chisun Inn Osaka Hommachi
Comfort Hotel Hamamatsu
Nest Hotel Sapporo Odori
Valie Hotel Tenjin
Nest Hotel Osaka Shinsaibashi
Comfort Hotel Central International
Airport
Smile Hotel Tokyo Asagaya
Nest Hotel Naha
3

Fixed Rent/
Minimum
Guaranteed
Rent
34
75
32
3955
23
24
63

Variable
Rent

Total

97
1272––
63
38
169

131
87
104
39
55
86
63
233

151

–151

28
59

78
97

107
156

Fixed Rent/
Minimum
Guaranteed
Rent
35
45
18

Hotel Name
Nest Hotel Matsuyama
Comfort Hotel Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
Other1OperatingRevenue

15256959

Total
1

Variable
Rent
58–––
28715

Total
93451815284
1,674

Figures for Hotel Wing International Nagoya, Hotel Suave Kobe Asuta, HotelLivemax Nihombashi-Hakozaki, Grandpark-Inn Yokohama, and Urbain
Hiroshima Executive are included in “Other” because the hotel operators did notprovide consent to disclose hotel-specific data.

Retail: JPY 58 million of rental income from retail tenants at Hotel Vista Premio
Kyoto, Chisun Inn Osaka Hommachi, and Smile Hotel Tokyo Asagaya.

NonOperatingExpenses

Revisions to Previous Forecast
 Gains on sale from the sale of Smile Hotel Asakusa on August 1, 2018: JPY 691million
 Decrease in rental income from Smile Hotel Asakusa due to the sale: JPY 46million Depreciation: JPY 309 million. Depreciation has been calculated using thestraight-line method.
• Property and city planning taxes: JPY 104 million• Building maintenance and repair expenses are based on what Ichigo Investment
Advisors, the asset management company of Ichigo Hotel, estimates will benecessary for each hotel during the period. However, actual expenses for theperiod could differ significantly from these forecast amounts for reasons including
the variability of maintenance and repair expenses, one-time costs due tounexpected building damage, etc.
 Rental expenses, Ichigo Hotel’s principal operating expense (other thandepreciation, see above), are calculated based on historical data adjusted foranticipated expense variations.
 Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.
Revisions to Previous Forecast Increase in asset management fees due to a decrease in portfolio size-linked asset
management fees, offset by an increase in dividend-linked asset management fees:
JPY 76 million
 Increase in income taxes due to change in taxable revenue: JPY 19 million
 Interest expenses and other borrowing-related expenses: JPY 168 million
 Amortization of expenses related to the establishment of Ichigo Hotel and to newshare issuance: JPY 20 million

Borrowings

 Total borrowings: JPY 21.75 billion as of January 31, 2019

Number ofShares 254,974 shares issued and outstanding as of April 20, 2018. The forecast assumesthere will be no additional new issuance of shares through January 31, 2019.

OperatingExpenses

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

Dividend in
Excess ofEarnings

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

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

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