Ichigo Hotel (3463)

Ichigo Hotel January 2021 Fiscal Period
Corporate Presentation
March 17, 2021

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

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

www.ichigo-hotel.co.jp/en

We would like to express our deepest condolences
to all those affected by the M7.3 earthquake off thecoast of Fukushima in February and by the Covid
pandemic globally, and our wishes for the earliest
and fullest possible recovery.

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

2

Make The World
More Sustainable© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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

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

January 2021 Results
 January 2021 Highlights
 January 2021 Earnings Breakdown Ongoing Covid Impact
 Nationwide Covid Impact
 Monthly Operational Results Under
Year of Covid
 Covid Impact on Hotel Demand Covid Response Sponsor Support Amid the Covid Pandemic Hotel Industry Support: Shareholder Hotel
Discount Program Ichigo J.League Shareholder Program

Sustainability as a Key Management Priority
 Sustainability Initiatives
 Operator Change to Generate Higher
Earnings
 Achieving Organic Rent Growth at Contract
Renewals

July 2021 and January 2022 Forecasts
 Market Environment & Forecast Assumptions
 Revision of July 2021 Fiscal Period Forecast(Announced in Sep 2020)
 July 2021 Forecast January 2022 Forecast

Ichigo’s Commitment to ESG Ichigo Sustainability Policy
 Ichigo ESG – Environmental
 Ichigo ESG – Social
 Ichigo ESG – GovernanceAppendices Portfolio Details
 Loan Details & Shareholder Composition Growth Roadmap, Sponsor, Shareholder
Alignment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

6

January 2021 Results© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

7

January 2021 Highlights
Dividend +3.5% vs. Forecast Despite Ongoing Covid Impact
Results
Net Income
RevPARNOI
Financing

JPY 209M+JPY 7M (+3.5%) vs. forecast

JPY 2,335 (14 variable rent hotels)-JPY 236 (-9.2%) vs. forecast

JPY 844M-JPY 11M (-1.3%) vs. forecast

Issuance of First Investment
Corporation Bond (JPY 500M)

Details• Recorded 4 months variable rent income• Occupancy: 53.4% (vs. 55.8% forecast)• ADR: JPY 4,371 (vs. JPY 4,609 forecast)• Operating revenue -JPY 1M vs. forecast• Increase in repair expenses due to hotel rebranding• Subordinated bonds with sponsor Ichigo as allottee• Strengthening financial base amid market uncertainty

FFO

JPY 2,162+JPY 33 (+1.6%) YOY• FFO up on lower AM fees
(Shift to performance-based AM fee structure)

Dividend

JPY 823• Effective cost control helped reduce expenses

JPY 129,503• Total unrealized gains: JPY 1.4B

NAV

+JPY 28 (+3.5%) vs. forecast-JPY 3,165 (-2.4%) vs. previous period

FFO (Funds from Operations) = (Net Income + Depreciation + Amortization of Expenses Related to REIT Establishment + Amortization of Share Issuance Expenses+ Loss on Disposal of Fixed Assets + Accrued Asset Disposal Costs +/- Losses/Gains on Sales +/- Extraordinary Losses/Gains) / Number of Shares Outstanding
NAV = BPS + Unrealized Capital Gains per Share© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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January 2021 Earnings Breakdown(JPY million)

Jan 2020
ActualJan 2021
Actual (A)Forecast (B)vs. Forecast(A)-(B)

Major Variation Factors (vs. Forecast)

Operating Revenue

3,561

1,035

1,037

-1

Variable Rent

564

-3

18

-22

Increase: +2 (Asagaya, Kurashiki)
Decrease: -17 (Tenjin, Hommachi, Sapporo Ekimae, Kumamoto)
Decrease due to disposition: -7 (Naha sold in Jan 2020)

Fixed Rent

993

993

975

+18

Decrease: -8 (Shibuya, Okayama)

2,003

45

43

-2

Other: Valie Hiroshima, Okayama

1,226

626

618

+7

Decrease in other expenses: -6 (Shibuya)

Repair & Maintenance

26

43

30

+13

Increase: +22 (Tenjin, Okayama, Shinsaibashi, Valie Hiroshima, Hommachi)
Decrease: -8 (Yokohama, Shibuya, Kyoto, Hakozaki, Central International
Airport, Shimonoseki)

Depreciation

352

341

342

-1

Operating Profit

2,334

409

418

-9

Recurring Profit

2,132

210

203

+7

Net Income

2,130

209

202

+7

Dividend

JPY 8,356

JPY 823

JPY 795+JPY 28

FFO

JPY 2,129

JPY 2,162

–

–

NOI

1,438

844

855

-10

Post-Depreciation NOI

1,086

503

512

-9

257

123

449

-325

47,55552,076––

Other (Gains on Sales, etc.)
Operating Expenses

Capex
Book Value

Non-Operating income: +2
Decrease in interest expenses: -10
Decrease in borrowing-related expenses: -3+3.5% vs. forecast-90.2% (-JPY 7,533) YOY due to fall-off of gains on sales

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

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Ongoing Covid Impact
Variable Rent Hotels (14 Hotels)

Aug 1, 2019
- Jan 31, 2020

Aug 1, 2020
- Jan 31, 2021

ChangeO

YOY

Room Revenue (JPY M)

2,538

791

-1,746-68.8%

Total Revenue (JPY M)

2,853

907

-1,946-68.2%

RevPAR (JPY)

6,166

2,335

-3,831-62.1%

Occupancy

84.4%

53.4%

-31.0%-36.7%ADR (JPY)

7,302

4,371

-2,932-40.1%

Total Portfolio (20 Hotels)

Aug 1, 2019
- Jan 31, 2020

Aug 1, 2020
- Jan 31, 2021

ChangeYOY

Room Revenue (JPY M)

3,645

1,273

-2,372-65.1%

Total Revenue (JPY M)

3,990

1,402

-2,587-64.9%

RevPAR (JPY)

6,136

2,478

-3,658-59.6%

Occupancy

83.8%

51.2%

-32.6%-38.9%ADR (JPY)

7,322

4,840

-2,482-33.9%* Excludes HOTEL EMIT SHIBUYA, Grandpark-Inn Yokohama, and Washington Hotel Plaza Shimonoseki Eki Nishi. Operating results before
acquisition are based on data provided by previous owner.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

10

Nationwide Covid Impact
YOY by Region (Aug 2020 – Jan 2021)
RevPAR

Occupancy

ADR

Total
Portfolio

Hokkaido

Tokyo

20 Hotels (excludes Grandpark-Inn Yokohama, HOTEL EMITSHIBUYA, and Washington Hotel Plaza Shimonoseki Eki Nishi)

Tokai/
Chubu

Kyoto

Osaka

Kobe

Chugoku/
Shikoku

Kyushu

-12%

-13%
-19%

-19%

-24%
-30%

-34%
-39%
-46%

-48%
-60%

-57%

-53%

-45%

-46%

-41%
-48%

-53%
-62%

-38%
-49%
-57%
-62%

-63%

-80%

-85%
-91%

(JPY)

RevPAR

3,326

3,590

2,290

1,383

441

3,190

2,387

2,294

No. Hotels

3

2

4

1

2

1

5

2

% of Total
Portfolio Rental
Income

8%

10%

29%

3%

11%

5%

17%

4%

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

11

Monthly Operational Results Under Year of Covid
8,000

0%
RevPAR (left axis, JPY)

6,000

4,000

-29%

4,899

-25%

-61%
-70%

2,000

2,481

-80%
1,378

0
Feb 2020100%

YOY (right axis)

Mar

Apr

-58%

-57%

2,353

2,568

2,683

Aug

Sep

Oct

-68%

-77%
-85%
1,031
May

1,511

2,077

2,220

2,054

Dec

Jan 2021

-50%

-75%

-100%
Jun

Jul

Occupancy (left axis)
-41%

-47%

Nov

YOY (right axis)

73.8%

-43%

-36%

-33%

-41%

-44%

-40%
-60%

-71%
50.9%
31.9%

-20%

-28%

-61%

-63%

20%

-58%

3,292

80%

40%

-59%

0%

-14%

60%

-52%

24.3%

34.6%

46.3%

50.3%

52.3%

56.3%

Aug

Sep

Oct
Tokyo added
to Go To
Travelcampaign

62.4%

48.5%

44.2%

Nov

Dec

Jan 2021

Go To Travel
campaign
suspended in
Osaka/Sapporo

Go To Travel
campaign
suspendedState ofemergency
declared for
4 prefectures

0%

-80%
-100%

Feb 2020

Mar

Apr

May

Jun

Jul

State ofemergency
declared for7 prefectures

State ofemergency
liftedBan on travel
betweenprefectures
liftedStart of
Go To Travel
campaign

State ofemergency
extended torest of Japan© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

State ofemergency
extended to 11
prefectures

12

Covid Impact on Hotel Demand
Hotel Reservations and Ichigo Hotel RevPAR (vs. previous year)
0%
Business Hotels

Full-Service Hotels

Resort Hotels

Japanese Inns

Number of Guests

Ichigo Hotel RevPAR

-20%

-40%

-60%

-80%

-100%
Feb 2020

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan 2021* Calculated by Ichigo Investment Advisors based on Japan Tourism Agency (JTA) “Statistical Survey of Travelers”

−
−
−
−
−
−

Ichigo Hotel performance correlated to overall hotel industry demand
Largest negative impact was in May 2020 (first state of emergency)
October and November 2020 saw a recovery in demand owing to the Go To Travel
campaign
Second state of emergency in Jan 2021 saw less of an impact than the first one in April
2020
Impact on business hotels limited compared to other hotel types
Strong uplift in non-business hotels due to Go To Travel tourism subsidy program© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

13

Covid Response
Safety Measures and Services for Guests− Hand sanitizers, periodic disinfections, and mandatory mask-wearing for
employees− Confirming guest and staff health− Offering remote work options

Temporarily Closed Hotels during January 2021 Fiscal Period
Hotel

Dates Closed

Current Status

Chisun Inn Osaka Hommachi

April 17, 2020 –June 30, 2021

Scheduled to reopen and rebrand under new
operator, Hakata Hotels

Grandpark-Inn Yokohama

November 1, 2020 –February 28, 2021

Rebranded and reopened as Capsule Plus
Yokohama

Nest Hotel Osaka Shinsaibashi

January 13, 2021 –March 31, 2021

Scheduled to reopen

Nest Hotel Sapporo Odori

January 17, 2021 –February 7, 2021

Reopened

Asset Management Company Safety Measures− Remote work from March 2020
− Social distancing at office via flextime and limiting office utilization to 30%© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

14

Sponsor Support Amid the Covid Pandemic
Investment Corporation Bond Issuance (JPY 500 million)− Allottee: Ichigo (100%)
 Demonstrating commitment and support as sponsor− Objective: To further strengthen Ichigo Hotel’s financial base amid an uncertain
market environment

Hakata Hotels (Ichigo’s wholly-owned subsidiary)− A hotel operator with AI expertise that operates 13 hotels across Japan,
with many located in the Hakata (Fukuoka) area
− Offers competitive rates and strong collaboration− Will become the operator of Chisun Inn Osaka Hommachi (to be rebranded
as The OneFive Osaka Sakaisuji) in July 2021
(Recently became the operator of Okayama and Fukuoka Tenjin hotels)− Selected as operator among multiple candidates due to better lease terms− Helps to avoid absence of a hotel operator under Covid uncertainty© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

15

Hotel Industry Support: Shareholder Hotel Discount Program
Program Established to Express Gratitude to Ichigo Hotel Shareholders
and to Support the Hotel Industry Impacted by Covid
Special Discount Rates (including hotels not owned by Ichigo Hotel)
Minacia Co., Ltd.
 Hotel Wing International
 Special rate 10% lower than rates on hotel website
 36 Hotel Wing International Hotels located acrossJapan, from Hokkaido in the north to Kagoshima in thesouth. New hotels scheduled for opening are Kyoto
Sanjo (March 2021) and Hida Takayama (April 2021).

Greens Co., Ltd.
 Choice Hotels
 Premium rates set at each hotel
 66 Comfort brand hotels located across Japan, from
Hokkaido to Okinawa

 Green Hotels
 Member-only fixed rates set at each hotel A diverse brand of 32 hotels mainly in Mie and Aichi
prefectures and the Hokuriku region© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

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Ichigo J.League Shareholder Program
Represents Two Firsts for a Shareholder Program in Japan− First Japanese company to include not just its own shareholders, but also theshareholders of the REITs and listed solar power producer that it manages, in its
shareholder program (67,000 shareholders total)− First company to offer shareholders free tickets to every J.League game at every
J.League club

Ichigo is deepening its partnership with the J.League and working tofurther Ichigo’s mission of promoting local community development.
Events & Gifts− Ichigo Kids J.League Events
 Escort players onto field High-fives with players
 Other programs− J.League Merchandise Autographed jerseys from all
J.League clubs
 Ichigo original J.League towels
 Autographed official match balls− J.League Online Events
Ichigo J.League Shareholder Program Website Landing Page
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

17

Sustainability as a Key Management Priority© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

18

Sustainability Initiatives
Minimizing Environmental Impact of Ichigo Hotel-Owned Assets
GRESB Real Estate Assessment− Preparing to participate in assessment− Applying for various environmental certifications

Shifting to Renewable Energy
Ichigo RE Target: Sourcing 100% Renewable Electricity Across Its Operations by 2040
− In line with sponsor Ichigo joining RE100, Ichigo Hotel will shift to using
renewable electricity across its operations− Target: source 100% of electricity needs across Ichigo Hotel-owned assets fromrenewable energy© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

19

Operator Change to Generate Higher Earnings
Chisun Inn Osaka Hommachi− Hotel operator change from third-party operator to Ichigo-owned Hakata Hotels− Scheduled to rebrand and reopen as The OneFive Osaka Sakaisuji in July 2021
− Deploying Ichigo’s PROPERA, an AI-based hotel revenue management system,to drive higher earnings & customer satisfaction(PROPERA operating track record: Earnings +10-40%)
Hakata Hotels
Name

Hakata Hotels Inc.

Address

3-13-1 Haruyoshi, Chuo-ku, Fukuoka

Representative

Minoru Ishihara, Representative Director & Chairman
Takanobu Kitazaki, Representative Director & President

Establishment
Date

March 2019

Paid-In Capital

Relationship to
Ichigo Hotel/IIA© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

JPY 10 million(100% Ichigo group subsidiary)

Consolidated subsidiary of Ichigo Investment Advisor’s
parent company, Ichigo(Hakata Hotels is a related party as defined in the
Ordinance of the Investment Trust and Investment
Corporation Law and IIA’s internal rules)

20

Achieving Organic Rent Growth at Contract Renewals

Plan

ActualTimingHotel Name

Lease Terms

ChangesJun 2017

Chisun Inn Osaka Hommachi

Variable+Fixed
Rent

Renewal atHigher Rent

• Increased fixed rent
• Increased variable rent

Mar 2019

Hotel Wing International Kobe Shin
Nagata Ekimae

Variable+Fixed
Rent

Rebranding• Increased fixed rent
• Added variable rent

Jun 2019

Nest Hotel (4 Hotels)

Variable+Fixed
Rent

Renewal atHigher Rent

• Increased fixed rent

Sep 2019

Valie Hotel Hiroshima

Variable+Fixed
Rent

Rebranding• Rebrand and reopen• Added variable rent

Jun 2020

Smile Hotel Tokyo Asagaya

Variable+Fixed
Rent

Lease Expiry• Increased fixed rent
• Increased variable rent

Oct 2020

The OneFive Okayama(formerly Comfort Hotel Okayama)

Fixed Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Increased fixed rent & added variable rent

Oct 2020

The OneFive Fukuoka Tenjin(formerly Valie Hotel Tenjin)

Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Revised variable rent clauseFeb 2021

Capsule Plus Yokohama(formerly Grandpark-Inn Yokohama)Fixed Variable Rent

Rebranding• Added GOP-linked variable rent

Feb 2021

Chisun Inn Osaka Hommachi

Variable+Fixed
Rent

Rebranding• Operator change to Hakata Hotels• Revised variable rent clause

2021

2 Hotels

Variable+Fixed
Rent

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

• Operator to be selected from among multiple

candidates, including the current operator

21

July 2021 and January 2022 Forecasts© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

22Market Environment & Forecast Assumptions
Hotel Market Remains Uncertain− Hotel demand is forecast to gradually recover on the back of vaccine rollout, butwill likely take up to one year to significantly recoverOccupancy and ADR Forecasts for 14 Variable Hotels− Forecasting Occupancy at -20~-40% & ADR at -35~-50% vs. 2019 (Pre-Covid)
levelsJuly 2021 Forecast
Occupancy
ADR(Reference)
Occupancy
ADR

January 2022 Forecast

57.8%

68.1%

JPY 4,737

JPY 4,988

July 2019 Actual*

January 2020 Actual*

89.7%

85.4%

JPY 8,668

JPY 7,760* Actual data of 13 hotels for July 2019 fiscal period and 12 hotels for January 2020 fiscal period© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

23

Revision of July 2021 Fiscal Period Forecast (Announced in Sep 2020)− Operating revenue -0.4%, DPS -23.0% vs. previous forecast− Recorded Covid-related reserve on the back of requests for rent
forgiveness/deferral− Will carefully respond to rent forgiveness/deferral requests and work to minimize
forecast impact
Previous Forecast vs. Revised Forecast （DPS-basis, JPY）
-30

881

+11

Decrease in Operating Revenue-JPY 18-165-19
Covid-related Reserve-JPY 148

678
Decrease inInterest Expenseand Increase in
Borrowing-relatedExpenses

Previous Forecast(Sep 14, 2020)

Variable Rent

Fixed Rent

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

Non-Operating
Expenses

Revised Forecast(Mar 17, 2021)

24

July 2021 Forecast
Dividend JPY 678, +1.2% YOY(JPY million)
July 2020
Actual (A)July 2021
Previous
Forecast(Sep 2020)

July 2021
Revised
Forecast (B)Major Factors for Variation(B) - (A)Operating Revenue

953

1,041

1,037

+84

Variable Rent

-25

53

46

+71

Fixed Rent

935

944

947

+11

Other (Gains on Sales, etc.)

42

43

44

+1

581

618

660

+78

Repair & Maintenance

21

26

28

+7

Increase +13 (Yokohama, Kurashiki, Asagaya, Shinsaibashi, Shimonoseki)
Decrease -5 (Tenjin, Valie Hiroshima, Central International Airport, Sapporo Odori)

Depreciation

336

343

346

+9

Increase: Okayama, Shimonoseki, Valie Hiroshima

Operating Profit

371

423

376

+5

Engineering report costs +3, Environmental certification costs +2

Recurring Profit

171

225

173

+2

Borrowing-related expenses +15, Interest expenses -8
Completion of amortization of expenses related to REIT establishment -5,
Decrease in non-operating income -2

Net Income

170

224

172

+2

JPY 670

JPY 881

JPY 678

NOI

787

859

813

+26

Post-Depreciation NOI

450

516

467

+16

Capex

128

707

463

+335

Operating Expenses

Dividend

Increase due to nonoccurrence of adjustments of variable rent +36
Increase in variable rent +45 (Hiroshima, Matsuyama, Kumamoto, Yokohama)Decrease in variable rent -10 (Asagaya, Tenjin, Kurashiki)
Full-year contribution of Shibuya and Shimonoseki +35
Increase in fixed rent +61 (Asagaya, Okayama, Nagoya)Decrease in fixed rent -85 (Yokohama, Hommachi, Tenjin)
Increase in fixed asset taxes +12 (Shibuya, Shimonoseki, Kumamoto)
Covid-related reserve +37.8-23.0%(-JPY 203) vs. previous forecast+JPY 8 +1.2% (+JPY 8) YOY© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

25

January 2022 Forecast
Dividend JPY 719, -12.6% YOY(JPY million)
January 2021
Actual (A)January 2022
Forecast (B)

1,035

1,058

+23

Variable Rent

-3

81

+85

Increase in variable rent +80 (Yokohama, Kumamoto, Nagoya, Matsuyama, Kurashiki,
Valie Hiroshima)
Decrease in variable rent -2 (Asagaya, Tenjin)

Fixed Rent

993

932

-61

Increase in fixed rent +61 (Okayama, Tenjin, Shibuya)
Decrease in fixed rent -122 (Nagoya, Yokohama, Hommachi, Valie Hiroshima)

Other (Gains on Sales, etc.)

45

44

-1

626

663

+36

Covid-related reserve

Repair & Maintenance

43

33

-10

Increase +12 (Nagoya, Sapporo Odori, Asagaya)
Decrease -23 (Tenjin, Shinsaibashi, Okayama, Valie Hiroshima)

Depreciation

341

347

+5

Increase: Okayama, Tenjin, Kumamoto, Kurashiki, Asagaya, Valie Hiroshima

Operating Profit

409

395

-13

Engineering report costs +3
Environmental certification costs +1

Recurring Profit

210

184

-26

Net Income

209

183

-26

JPY 823

JPY 719

NOI

844

833

-11

Post-Depreciation NOI

503

486

-17

Capex

123

345

+221

Operating Revenue

Operating Expenses

Dividend

Major Factors for Variation(B) - (A)-JPY 104 -12.6% YOY© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

26

Ichigo’s Commitment to ESG© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

27

Ichigo Sustainability Policy
Harmony with the Environment
Ichigo actively monitors and minimizes the environmental impact of its business operations.

Energy Conservation, CO2 Reduction, and Recycling
Ichigo seeks to contribute to a low-carbon, low-waste society by reducing energy
consumption, extending the useful life of assets, actively recycling, reducing waste
production and water consumption, and implementing green procurement measures.

Regulatory and Environmental Compliance
Ichigo complies with all environmental laws and regulations and Ichigo’s own independentlyestablished environmental rules. Ichigo also carefully monitors and complies with all applicablechanges in laws and regulations.

Training and AwarenessIchigo promotes understanding of its Sustainability Policy and works to increase sustainability
awareness among all Ichigo employees.

Sustainability Performance Communication and Disclosure
Ichigo communicates its Sustainability Policy and Ichigo’s sustainability initiatives to society atlarge. Ichigo also obtains certifications for its sustainability activities on an ongoing basis.

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

28

Ichigo ESG – Environmental
Contributing to a Low-Carbon World

Sustainable Real Estate

Clean Energy

Preserve & Improve Real Estate to End Wasteful
Demolition

Annual Power Generation 158,586,005 kWh
Equivalent to annual energy consumption of
52,862 households
The Federation of Electric Power Companies ofJapan - Annual energy consumption perhousehold 3,000kWh‒ Lengthen useful life of real estate‒ Shrink environmental footprint by reducing
wasteful demolition & consumption of raw
materials, energy, & human talent in construction
LowestImpactWasteful
Demolition
HighestEfficiency

Annual CO2 Reduction 104,666,758 kg
Equivalent to annual CO2 emission of 45,507
cars
Ministry of Environment
Annual CO2 emission per car c. 2,300kg(Jul 2019~Jun 2020 Actuals – Ichigo & Ichigo Green)Sponsor Ichigo Joins RE100
Ichigo RE100 Target: Source 100% of Electricity Needs
Across Its Operations from Renewable Energy by 2040

Environmental Productive Use of Idle Land for Clean Energy
will not build power plants that require theSustainability Ichigo
clearing of wooded land or the altering of the
For a Better landscape in a way that increases the risk of floods,
World
landslides, or other water-related disasters, or thatface opposition from local communities.

Sustainable Real Estate – Environmental Certifications (Ichigo Office 8975)
CASBEE

GRESB

S
Rank

A
Rank
IchigoTakamatsu
Building

IchigoMarunouchi
Building

Ebisu Green Glass
Ichigo Sakaisuji Honmachi Building
Ichigo Sendai East Building
Ichigo Kanda Nishikicho Building Other Certifications
Ichigo Ikenohata Building
BELS (Building-housing EnergyIchigo Mirai Shinkin Building
efficiency Labeling System),
Win Gotanda Building 2
DBJ Green Building© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Green Star (Highest Ranking)4 years in a row
29

Ichigo ESG – Social
Supporting Local Communities

Working with Tenants− Conduct tenant surveys to understand needs toimplement effective value-add− Exclusive investor for Oshii Mamoru’s new
anime VLADLOVE to promote Japan’s anime
culture and build synergies with Ichigo’s retailasset AKIBA CULTURES ZONE
− Support tenant sales channel expansion andsales growth− Operate self-storage and laundromats to
support livelihood− Ichigo’s Boutique Hotel THE KNOT
A place where visitors, communities, and the oldand the new can come together− Miyako City, Nanbu Wholesale Market
Foster community interactions− J.League Top Partner
Promote community development, revitalize local
economies, and renovate & upgrade stadiums− TSUBASA+ AR Smartphone Game
Promote Japanese culture and community links− Smart Agriculture

Make The World More Sustainable
HR & Internal Start-Ups− Ichigo University for employees
Taught by subject matter experts− Ichigo Sustainable Lab
Promotion of R&D and internal start-ups− Support for Employees
100% return rate for employees whotake maternity/paternity leave− Women in Leadership
24% of management positions held by
WomenSports & Arts
− Support National & World-Class
Athletes− Support University of Miyazaki’s
Program for Children with Cancer− Support community-basedsoccer clubs− Support artists withdisabilities
Weightlifting Athlete
Hiromi Miyake© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Disaster Response− Typhoon disaster preventative
measures− Rapid damage assessment− Rapid disaster response
On-site inspections and measures toprevent secondary disasters, preserve
asset value, and supply essential
items to local communities− Neighborhood watch− Street cleaning and snow shoveling30

Ichigo ESG – GovernanceFirst J-REIT No Fixed Fee,
Performance Fee-Only Structure

Best Practice Governance Performance-linked fee structure to
support shareholder value creation
 Pro-active, dynamic management of
Ichigo Hotel assets on behalf ofshareholders

REIT
Monitors Asset Management Company• All Ichigo Hotel Directors are Independent
Directors• Active dialogue and effective internal controls via
Board discussions led by REIT Executive Director• Draw upon expertise of REIT Supervisory Directors(qualified lawyers & accountants)

Asset Management Company (AMC)••••

Best Practice
Majority of AMC Directors (3 of 5) are Independent
Directors
Independent asset management teams within AMC
ensures best-practice execution on behalf of Ichigo
Hotel
Compliance and Audit are directly under the AMC
President to monitor and review critical compliancematters
Ensure objectivity by including third-party,
independent lawyers and accountants in theInvestment Committee and Risk & Compliance
Committee

Ichigo Hotel (3463) and Ichigo Office (8975) are the only J-REITs(out of 61)
that both have an Asset Management Company (AMC) board thathas a majority of Independent Directors and whose AMC President
does NOT serve as the Executive Director of the REIT
Independence of the Investment
Corporation from AMC

Independent Directors at AMC

30 of 61 J-REITS have AMC
Presidents serving as
Executive Director of the REIT

Only 4 Asset Management
Companies have any
Independent Directors

Ichigo Hotel:
All Directors are
Independent

Ichigo Investment
Advisors:
3 of 5 Directors are
Independent* Based on information as of December 31, 2020

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

31

Appendix: Portfolio Details© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

32

Hotel Map
Tokyo

Hokkaido

Kanto
C-4

C-1

C-3

Smile HotelTokyo Asagaya

Hotel Livemax
NihombashiHakozaki

HOTEL
EMIT
SHIBUYA

Kinki (Kyoto/Osaka/Kobe)
E-1

Hokuriku/Tokai

B-1

A-1

A-2

A-3

D-1

Grandpark-Inn
Yokohama *Nest Hotel
Sapporo Ekimae

Nest Hotel
Sapporo Odori

ComfortHotel Kushiro

Comfort Hotel
Hamamatsu

F-1

F-2

F-3

G-1

D-3

D-4

Comfort Hotel
Hotel Wing
International Central International
AirportNagoyaKyushuChugoku/Shikoku

E-3

D-2

Comfort Hotel
Suzuka▶ Sapporo
A-1 A-2

G-3▶ Kushiro
A-3

Variable Rent
Fixed Rent
Smile Hotel
Kyoto Shijo

E-4

Hotel Wing International
Kobe Shin Nagata Ekimae

Chisun Inn
Osaka
Hommachi

The OneFive
Okayama

F-4

Nest Hotel
Matsuyama

F-5

Urbain Hiroshima
Executive

The OneFive
TenjinNest Hotel
Kumamoto

E-5

Nest Hotel Osaka
Shinsaibashi

23 Hotels
JPY 51.9B

F-6▶ Nagoya D-2▶ Kyoto E-1

Court Hotel
Kurashiki

Valie Hotel
Hiroshima* Rebranded and Reopened as Capsule Plus Yokohama in March 2021

Washington Hotel
Plaza Shimonoseki
Eki Nishi▶ Osaka E-3 E-5▶ Kurashiki F-4▶ TokyoC-1 C-3 C-4▶ Yokohama B-1▶ Shimonoseki F-6▶ Fukuoka
G-1▶ Hamamatsu D-1▶ Matsuyama▶ Aichi D-3
F-2▶ Suzuka D-4▶ Kumamoto▶ Kobe E-4
G-3▶ Okayama F-1▶ Hiroshima F-3 F-5(January 2021 rent-basis)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

33

Portfolio Growth

Acquisitions

IPO(Nov 30, 2015)

Jan 2017
Fiscal Period

July 2017 through Jan 2021
Fiscal Periods

IPO Acquisitions
9 hotels
JPY 20.4B

PO Acquisitions
10 hotels
JPY 27.2B

July 2017
1 hotelJPY 1.4B

Jan 2018
1 hotelJPY 1.8B

Jan 2019
1 hotelJPY 1.7B

July 2019
2 hotels
JPY 3.7B(Appraisal
NOI Yield
5.9%)(Appraisal
NOI Yield
5.5%)(Appraisal
NOI Yield
5.0%)(Appraisal
NOI Yield
6.3%)(Appraisal
NOI Yield
6.9%)(Appraisal
NOI Yield
6.9%)

None

23 Hotels
JPY 54.4B

Sales

None

None

None

None

1 HotelJPY 2.7B
Gains on Sale
JPY 0.69B

Portfolio
Size

9 Hotels : JPY 20.4B(January 2016 end)

19 Hotels
JPY 47.6B

20 Hotels
JPY 49.1B

21 Hotels
JPY 50.9B

21 Hotels
JPY 50.7B

IPO

Location

Geographic Diversification
Increases Earnings Stability

Kobe Osaka
7.3% 8.0%
Nagoya
13.1%
Kyushu
6.8%

Kyoto
39.6%

Steady Portfolio Growthvia Acquisitions

Hokkaido
17.7%
Tokai
7.6%

Acquisition price-basis© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jan 2020
None

July 2020
2 hotels
JPY 4.7B

Jan 2021
None(Appraisal
NOI Yield
4.9%)

2 Hotels
JPY 9.7B
Gains on Sale
JPY 1.94B

None

None

21 Hotels 23 Hotels 23 Hotels
JPY 47.1B JPY 51.9B JPY 51.9B
January 31, 2021
Yokohama Kobe
2.9%
Nagoya 2.9%
5.1%
Kyushu
Osaka
6.9%
17.8%
Hokkaido
7.5%
Tokyo
17.3%

Kyoto
8.6%
Chugoku/
Shikoku
17.2%
Tokai
13.8%

34

Portfolio Lease Details
Operator Diversification Driving Earnings Stability
Lease Terms

Fixed Rent

(as of Jan 31, 2021)

Fixed + Variable Rent

Total

Form of Contract

Lease

Lease

Lease

–

Fixed Rent

Yes

Yes

Yes

–

Variable Rent–

Fixed Portion of Revenue
UpsideFixed Portion of Hotel
GOP–

Rental Income(Jan 2021 Actual)

JPY 426M(43.1%)

JPY 147M(14.9%)

JPY 415M(42.0%)

JPY 989M(100%)

Number of Hotels

8 Hotels

3 Hotels

12 Hotels

23 Hotels

JPY 13.19B(25.4%)

JPY 5.79B(11.2%)

JPY 32.94B(63.4%)

JPY 51.91B(100%)

Comfort Hotel Kushiro
Comfort Hotel Hamamatsu
Comfort Hotel Central
International Airport
Comfort Hotel Suzuka
Grandpark-Inn Yokohama
Hotel Livemax NihombashiHakozaki
Urbain Hiroshima Executive
Washington Hotel Plaza
Shimonoseki Eki Nishi

Hotel Wing International Nagoya
Hotel Wing International Kobe
Shin Nagata Ekimae
Chisun Inn Osaka Hommachi

Nest Hotel Sapporo Ekimae
Nest Hotel Sapporo Odori
Nest Hotel Osaka Shinsaibashi
Nest Hotel Matsuyama
Nest Hotel Kumamoto
Smile Hotel Tokyo Asagaya
Smile Hotel Kyoto Shijo
Valie Hotel Hiroshima
The OneFive Fukuoka Tenjin
Court Hotel Kurashiki
HOTEL EMIT SHIBUYAThe OneFive Okayama

Total Acquisition Price

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

Operator Mix
The Court
5.7%
Hakata Hotels
8.4%
Hospitality
Operations
9.7%
Minacia
10.9%
Nest Hotel
Japan
18.2%

Greens
24.3%

Other
22.8%

Fixed Rent: Greens, Hospitality
Solutions, Other (Livemax, etc.)

35

Individual Hotel Summary(as of Jan 31, 2021)
Lease Terms

Location

LeasableArea(m2)

A-1 Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo5,734.93

2,160

2,115

2,520

5.1

+404

A-2 Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo5,638.78

1,450

1,463

1,770

5.0

+306

Fixed Rent

Kushiro, Hokkaido

3,180.58

300

287

421

5.5

+133

B-1 Grandpark-Inn Yokohama

Fixed Rent

Yokohama

1,183.26

1,490

1,496

1,310

4.8

-186

C-1 Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

2,721.70

3,910

3,936

4,140

4.3

+203

Fixed Rent

Tokyo

853.00

1,360

1,296

1,400

4.6

+103

C-4 HOTEL EMIT SHIBUYA

Variable + Fixed Rent

Tokyo

1,470.52

3,700

3,816

3,950

3.6

+133

D-1 Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

4,173.92

1,550

1,428

1,750

5.2

+321

Variable + Fixed Rent

Nagoya5,255.66

2,670

2,698

2,580

4.7

-118

D-3 Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

11,599.63

5,308

5,296

5,730

4.1

+433

D-4 Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

2,186.65

300

274

378

5.0

+103

E-1 Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

4,891.84

4,480

4,521

3,570

4.5

-951

E-3 Chisun Inn Osaka Hommachi

Variable + Fixed Rent

Osaka

3,690.00

1,630

1,717

1,300

4.7

-417

E-4 Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

4,540.90

1,490

1,399

1,810

4.7

+410

E-5 Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

8,057.26

7,600

7,604

5,730

4.4

-1,874

F-1 The OneFive Okayama

Variable + Fixed Rent

Okayama

5,543.70

1,200

1,203

1,800

5.7

+596

F-2 Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

6,671.94

1,610

1,618

1,950

5.6

+331

Fixed Rent

Hiroshima

2,756.20

1,800

1,811

2,060

5.3

+248

F-4 Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

3,964.19

1,725

1,780

1,990

5.1

+209

F-5 Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

4,332.50

1,500

1,585

1,650

5.0

+64

Fixed Rent

Shimonoseki, Yamaguchi

5,709.35

1,080

1,098

1,170

4.9

+71

G-1 The OneFive Fukuoka Tenjin

Variable + Fixed Rent

Fukuoka

1,910.94

1,380

1,448

2,190

4.3

+741

G-3 Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

6,404.36

2,220

2,177

2,330

5.4

+152

Total (23 Hotels)

102,471.81

51,91352,07653,4995.0+1,422

Hotel
No.

Hotel Name

A-3 Comfort Hotel Kushiro

C-3 Hotel Livemax Nihombashi-Hakozaki

D-2 Hotel Wing International Nagoya

Hotel

Jan 2021 Appraisal

F-3 Urbain Hiroshima Executive

F-6 Washington Hotel Plaza Shimonoseki Eki Nishi© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Acquisition Book Value
Price(JPY M)(JPY M)(A)

Value(JPY M)(B)

Unrealized
Cap Rate Gains (JPY M)(B) - (A)(%)

36

January 2021 Fiscal Period Individual Hotel Operating Results(year-on-year)
Hotel No.

Hotel Name

Lease Terms

Location

No. of
Guest
Rooms

January 2021 (August 2020 - January 2021)
RevPAR (JPY)

Occupancy (%)

ADR (JPY)

Revenue (JPY M)

A-1

004 Nest Hotel Sapporo Ekimae

Variable + Fixed Rent

Sapporo

162

3,415

(-61.8%)81.2(-16.1%)4,206(-54.5%)125.7(-61.5%)A-2

008 Nest Hotel Sapporo Odori

Variable + Fixed Rent

Sapporo

121

2,871

(-69.4%)66.1(-27.9%)4,347(-57.5%)73.8(-68.1%)

A-3

018 Comfort Hotel Kushiro

Fixed Rent

Kushiro, Hokkaido

126

3,648

(-23.9%)70.0(-12.2%)5,215(-13.3%)89.6(-23.2%)

C-1

012 Smile Hotel Tokyo Asagaya

Variable + Fixed Rent

Tokyo

112

4,179

(-51.8%)84.0(-13.9%)4,975(-44.0%)89.2(-51.6%)C-4025 HOTEL EMIT SHIBUYA

Variable + Fixed Rent

Tokyo

72

4,278

–

93.7

–

4,568

–

56.9

–

D-1

006 Comfort Hotel Hamamatsu

Fixed Rent

Hamamatsu, Shizuoka

196

2,111

(-53.2%)42.5(-44.1%)

4,963(-16.2%)

76.1(-53.2%)D-2003 Hotel Wing International Nagoya

Variable + Fixed Rent

Nagoya224

1,390(-74.0%)31.1(-63.8%)4,468(-28.0%)64.1(-73.4%)D-3

011 Comfort Hotel Central International Airport

Fixed Rent

Tokoname, Aichi

346

2,873

(-63.8%)37.2(-56.7%)

7,726(-16.5%)189.3(-64.1%)D-4

019 Comfort Hotel Suzuka

Fixed Rent

Suzuka, Mie

105

2,623

(-40.2%)51.7(-31.1%)

5,073(-13.2%)51.2(-40.2%)E-1

001 Smile Hotel Kyoto Shijo

Variable + Fixed Rent

Kyoto

144

1,383

(-79.7%)36.4(-62.5%)3,801(-45.7%)37.8(-80.5%)E-3005 Chisun Inn Osaka Hommachi

Variable + Fixed Rent

Osaka

130

–

–

–

–

–

E-4

007 Hotel Wing International Kobe Shin Nagata Ekimae

Variable + Fixed Rent

Kobe

133

3,190

(-48.2%)45.5(-41.3%)

7,003(-11.7%)88.2(-47.4%)E-5010 Nest Hotel Osaka Shinsaibashi

Variable + Fixed Rent

Osaka

302

441

(-92.1%)

11.5(-85.2%)

3,821(-46.6%)

18.8(-94.4%)F-1

017 The OneFive Okayama

Variable + Fixed Rent

Okayama

208

2,117

(-59.8%)69.7(-19.1%)

3,035(-50.3%)

69.3(-67.0%)F-2

015 Nest Hotel Matsuyama

Variable + Fixed Rent

Matsuyama, Ehime

190

2,984

(-45.0%)63.4(-26.9%)4,703(-24.8%)125.6(-53.3%)F-3021 Urbain Hiroshima Executive

Fixed Rent

Hiroshima

171

2,851

(-54.3%)42.7(-51.5%)6,669(-5.7%)

68.3(-65.2%)F-4

022 Court Hotel Kurashiki

Variable + Fixed Rent

Kurashiki, Okayama

107

2,503

(-66.6%)34.8(-60.8%)7,199(-14.7%)50.9(-70.8%)F-5

024 Valie Hotel Hiroshima

Variable + Fixed Rent

Hiroshima

171

1,327

–

30.9

–

4,297

–

32.6

–

G-1

009 The OneFive Fukuoka Tenjin

Variable + Fixed Rent

Fukuoka77

2,007(-76.1%)

61.9(-34.7%)3,244(-63.4%)32.9(-74.3%)G-3023 Nest Hotel Kumamoto

Variable + Fixed Rent

Kumamoto

201

2,399

(-52.7%)

63.5(-19.7%)3,779(-41.1%)

98.7(-53.7%)

–

–

461

Other

–

–

–

–

–

–

–

Variable Rent Hotels

2,354

2,335

(-62.1%)

53.4(-36.7%)4,371(-40.1%)907.7(-68.2%)

Fixed Rent Hotels

1,405

2,755

(-54.6%)46.9(-43.1%)

5,876(-20.3%)494.4(-56.5%)

Total

3,759

2,533

(-59.5%)52.2(-32.4%)4,855(-34.3%)

1,369.4(-65.0%)* Operating Results data for Hotel Livemax Nihombashi-Hakozaki, Grandpark-Inn Yokohama, and Washington Hotel Plaza Shimonoseki Eki Nishi are consolidated under
Other, because the hotel operators did not provide consent to disclose hotel-specific data. Fixed Rent Hotels and Total include Hotel Livemax Nihombashi-Hakozaki’s
operating results. Operating results for Valie Hotel Hiroshima before rebranding and reopening are unavailable because the operators did not provide consent to disclose.
© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

37

Individual Hotel Financials(JPY thousand)

Total

A-1

A-2

A-3

C-1

Nest
Hotel
SapporoEkimaeNest
Hotel
SapporoOdori

ComfortHotel
Kushiro

C-4

D-1

D-3

Smile
Comfort Hotel
HOTEL
ComfortHotel
Central
EMIT
Hotel
Tokyo
International
SHIBUYA Hamamatsu
Asagaya
Airport

D-4

E-1

ComfortHotel
Suzuka

Smile
Hotel
Kyoto
Shijo

E-3

E-5

F-1

Chisun Inn
Nest Hotel
Osaka
Osaka
Hommachi Shinsaibashi

F-2

F-4

F-5

G-1

G-2

G-3

The
The
Court
Nest Hotel
Valie Hotel OneFive Nest Hotel Nest Hotel
OneFive
Hotel
Matsuyama
Hiroshima Fukuoka
Naha
Kumamoto
OkayamaKurashiki
TenjinOther(A) Rental Income

1,035,576

32,493

26,184

18,41960,974

39,47655,361

151,441

15,442

34,64439,60465,58835,59735,821

33,472

23,731

8,666-7,47928,295

337,838

Fixed Rent

993,875

32,392

26,083

18,41959,28239,47655,361

151,441

15,442

34,64439,60065,48734,98435,71733,01323,131

8,226–

27,348

293,820

Variable Rent

-3,942

–

–

–

1,691

–

–

–

–

–

–

–

–

–

459

–

440

-7,479946–

Other Rent

45,643

101

101

–

–

–

–

–

–

–

4

101

613

104

–

600

–

–

–

44,018(B) Rental Expenses

190,955

8,704

10,1906,837

10,752

1,147

4,430

14,304

2,869

6,917

7,693

21,713

15,185

6,227

5,962

8,762

13,341

51

6,574

39,289Outsourcing
Fees

17,487

600

600

900

2,520

600

600

570

540

600

1,016

1,200

600

720

600

720

600

–

780

3,720

Insurance

3,195

174

186

92

98

68

110

312

53

151

110

271

159

221

117

148

64

–

203

651

RepairExpenses

43,455

2,238

552

1,414

3,954

120

1,016

298

89

765

2,475

5,306

9,467

926

548

3,204

8,868

–

474

1,735

Taxes

108,182

5,233

8,387

4,020

3,772

–

2,432

12,716

1,779

5,040

3,324

14,495

3,854

3,915

4,266

4,253

3,377

51

4,670

22,589

Other
Expenses

18,634

458

463

410

407

359

271

406

406

359

765

440

1,104

444

431

436

430

–

445

10,593

NOI(A) - (B)844,620

23,78915,993

11,58250,221

38,32950,931

137,137

12,57327,727

31,91143,874

20,411

29,59427,51014,968-4,674-7,531

21,720298,549(D) Depreciation

341,139

16,044

16,515

5,407

26,866

7,566

14,69634,862

4,165

16,395

7,378

34,397

15,131

17,895

10,374

20,731

8,731–

19,15064,830503,481

7,744

-521

6,175

23,35530,762

36,235102,275

8,407

11,332

24,532

9,477

5,279

11,69817,136-5,762-13,405-7,531

2,570

233,719(C)

Net Rental Income(C) - (D)* Rents for Hotel Wing International Nagoya, Hotel Wing International Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki, Grandpark-Inn Yokohama, Urbain Hiroshima
Executive, and Washington Hotel Plaza Shimonoseki Eki Nishi as well as retail income of Chisun Inn Osaka Hommachi, Smile Hotel Tokyo Asagaya and Nest Hotel Kumamoto areincluded in Other, as the operators did not provide consent to disclose the data.

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

38

Fixed/Variable Rent, RevPAR, ADR, & Occupancy Trends
Fixed/Variable Rent
(JPY thousand)Jan 2020
Rent
Ratio

Jan 2021
Rent
Ratio

1,032,448

63.9%

963,173–

1,023,281–

Fixed Rent from Operators

993,47961.5%

935,606–

993,875–

Other (Rent from Retail Tenants)

38,9692.4%

27,566–

29,405–

Variable Rent

564,43434.9%-25,467–-3,942–Other (Utility Income)

19,104

1.2%

15,371–

16,238–1,615,986

100%

937,705

Rent

Fixed Rent

Jul 2020
Rent
Ratio

Total

100%

1,035,576

100%

Operating Results (Feb 2020 – Jan 2021)
RevPAR (right axis)

ADR (right axis)

Occupancy (left axis)

(JPY)

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0%

0
Feb 2020

Mar 2020

Apr 2020

May 2020

Jun 2020

Jul 2020

Aug 2020

Sep 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Oct 2020

Nov 2020

Dec 2020

Jan 2021

39

Variable Rent Hotel Details
A-1 Nest Hotel Sapporo Ekimae
Location

SapporoAccess5-minute walk from
Sapporo Station on
Sapporo City Metro
Namboku LineOperator

Nest Hotel Japan
Corporation

ADR(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000
2,000

Guest Rooms

162

20%

AcquisitionPrice

JPY 2.16B

0%0Feb 2020

May 2020

Aug 2020

Nov 2020

A-2 Nest Hotel Sapporo Odori
Location

SapporoAccess4-minute walk from
Odori Station on
Sapporo City Metro
Namboku LineOperator

Nest Hotel Japan
Corporation

ADR(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)100%

12,50080%

10,000

60%

7,500

40%

5,000
2,500

Guest Rooms

121

20%

AcquisitionPrice

JPY 1.45B

0%0Feb 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2020

Aug 2020

Nov 2020

40

Variable Rent Hotel Details
C-1 Smile Hotel Tokyo Asagaya
Location

Suginami-ku, Tokyo

Access1-minute walk from
Asagaya Station on JR
Chuo/Sobu LineOperator

K.K. Hospitality
Operations

Guest Rooms

112

AcquisitionPrice

JPY 3.91B

ADR(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0%

0
Feb 2020

May 2020

Aug 2020

Nov 2020

C-4 HOTEL EMIT SHIBUYA
Location

Shibuya-ku, Tokyo

Access6-minute walk from
Shibuya Station on JR,
Tokyu, Keio, andTokyo Metro Lines

Operator

Hakata Hotels Inc.
Shidax Daishinto
Human Services Inc.

Guest Rooms

72

AcquisitionPrice

JPY 3.7B

ADR(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

20%

2,000

0%

0
Feb 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2020

Aug 2020

Nov 2020

41

Variable Rent Hotel Details
D-2 Hotel Wing International Nagoya
Location

NagoyaAccess2-minute walk from
Marunouchi Station on
both Nagoya Subway
Network SakuradoriLine and Tsurumai
Line

Operator

Minacia Co., Ltd.

ADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000
1,500

Guest Rooms

224

20%

AcquisitionPrice

JPY 2.67B

0%0Feb 2020

May 2020

Aug 2020

Nov 2020

E-1 Smile Hotel Kyoto Shijo
Location

Kyoto

Access5-minute walk from
Shijo Station on Kyoto
City Subway Karasuma
Line and Karasuma
Station on Hankyu
Kyoto Main LineOperator

K.K. Hospitality
Operations

Guest Rooms

144

AcquisitionPrice

JPY 4.48B

ADR(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

40%

3,000

20%

1,500

0%

0
Feb 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2020

Aug 2020

Nov 2020

42Variable Rent Hotel Details
E-3 Chisun Inn Osaka Hommachi
Location

Osaka

Access5-minute walk from
Sakaisuji-Hommachi
Station on Osaka
Municipal Subway
Chuo LineOperator

SHR Hotel Lease Co.,Ltd.

Guest Rooms
Acquisition
Price

ADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)

100%

10,000

80%

8,000

60%

6,000

40%

4,000

130

20%

2,000

JPY 1.63B

0%0Feb 2020

May 2020

Aug 2020

Nov 2020

E-4 Hotel Wing International Kobe Shin Nagata Ekimae
ADR(right)

RevPAR(right)Occupancy(left)(JPY)

Location

Kobe

100%

10,000Access2-minute walk from
Shin Nagata Station
on JR Kobe Line and
JR Sanyo Honsen Line

80%

8,000

60%

6,000

Minacia Co., Ltd.

40%

4,000

Guest Rooms

133

20%

2,000

AcquisitionPrice

JPY 1.49B

0%Operator

Operating Results (Feb 2020 – Jan 2021)

0
Feb 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2020

Aug 2020

Nov 2020

43Variable Rent Hotel Details
E-5 Nest Hotel Osaka Shinsaibashi
Location

Osaka

Access1-minute walk from
Nagahoribashi Station
on Osaka Municipal
Subway Sakaisuji LineADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

Nest Hotel Japan
Corporation

40%

3,000

Guest Rooms

302

20%

1,500

AcquisitionPrice

JPY 7.60B

Operator0%0
Feb 2020

May 2020

Aug 2020

Nov 2020

F-1 The OneFive Okayama
Location

OkayamaAccess15-minute walk from
Okayama Station on
Sanyo Shinkansen,
Sanyo Main Line, Uno
Line

ADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)100%

12,50080%

10,00060%

7,500Greens Co., Ltd.

40%

5,000

Guest Rooms

208

20%

2,500

AcquisitionPrice

JPY 1.20B

0%Operator0
Feb 2020

May 2020

Aug 2020

Nov 2020* Changed operator and changed hotel name to The OneFive Okayama. Rebranded and reopened in October 2020.

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

44

Variable Rent Hotel Details
F-2 Nest Hotel Matsuyama
Location

Matsuyama, Ehime

Access25-minute drive from
Matsuyama Airport,
3-minute walk from
Katsuyamacho Station
on Iyo Railway Jonan
Line

ADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

Nest Hotel Japan
Corporation

40%

3,000

Guest Rooms

190

20%

1,500

AcquisitionPrice

JPY 1.61B

0%Operator0
Feb 2020

May 2020

Aug 2020

Nov 2020

F-4 Court Hotel Kurashiki
Location

Kurashiki, Okayama

Access8-minute walk from
Kurashiki Station on
JR Sanyo Main LineADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)(JPY)

100%

15,00080%

12,00060%

9,000

The Court Co., Ltd.

40%

6,000

Guest Rooms

107

20%

3,000

AcquisitionPrice

JPY 1.73B

0%Operator0
Feb 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2020

Aug 2020

Nov 2020

45

Variable Rent Hotel Details
F-5 Valie Hotel Hiroshima
Location

Hiroshima

Access3-minute walk from
Jogakuin-mae Station
on Hiroden Tram LineADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

The Court Co., Ltd.

40%

3,000

Guest Rooms

171

20%

1,500

AcquisitionPrice

JPY 1.5B

0%Operator0
Feb 2020

May 2020

Aug 2020

Nov 2020

G-1 The OneFive Fukuoka Tenjin
ADR(right)

RevPAR(right)Occupancy(left)(JPY)

Location

Fukuoka

100%

10,000Access6-minute walk from
Tenjin Station on
Fukuoka City Subway
Kuko Line

80%

8,000

60%

6,000

The Court Co., Ltd.

40%

4,000

Guest Rooms

77

20%

2,000

AcquisitionPrice

JPY 1.38B

0%Operator

Operating Results (Feb 2020 – Jan 2021)

0
Feb 2020

May 2020

Aug 2020

Nov 2020* Changed operator and changed hotel name to The OneFive Fukuoka Tenjin. Rebranded and reopened in October 2020.

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

46

Variable Rent Hotel Details
G-3 Nest Hotel Kumamoto
Location

Kumamoto

Access2-minute walk from
Nishikarashimacho
Station on Kumamoto
City Tram LineADR
(right)Operating Results (Feb 2020 – Jan 2021)

RevPAR(right)Occupancy(left)
(JPY)

100%

7,500

80%

6,000

60%

4,500

Nest Hotel Japan
Corporation

40%

3,000

Guest Rooms

201

20%

1,500

AcquisitionPrice

JPY 2.22B

0%Operator0
Feb 2020© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

May 2020

Aug 2020

Nov 2020

47

Fixed Rent Hotel Details
A-3 Comfort Hotel Kushiro
Location

Kushiro, Hokkaido

B-1 Grandpark-Inn Yokohama
Location

Yokohama

Access2-minute walk from
Kushiro Station on JR
Nemuro Main Line

Access6-minute walk from
Yokohama Station on
JR Line, private
railways, and subway

Operator

Greens Co., Ltd.

Operator

MiddleWood Co., Ltd.

Guest Rooms

126

Guest Rooms

175

AcquisitionPrice

JPY 300M

AcquisitionPrice

JPY 1.49B* Scheduled to change operator to be rebranded and reopened as Capsule
Plus Yokohama in March 2021.

C-3 Hotel Livemax Nihombashi-Hakozaki
Location

Chuo-ku, Tokyo

D-1 Comfort Hotel Hamamatsu
Location

Hamamatsu, Shizuoka

Access3-minute walk from
Suitengumae Station
on Tokyo Metro
Hanzomon Line

Access2-minute walk from
Hamamatsu Station on
JR Tokaido Main Line,
Tokaido Shinkansen

Operator

Live Max Inc.

Operator

Greens Co., Ltd.

Guest Rooms

48

Guest Rooms

196

AcquisitionPrice

JPY 1.36B

AcquisitionPrice

JPY 1.55B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

48

Fixed Rent Hotel Details
D-3 Comfort Hotel Central International Airport

D-4 Comfort Hotel Suzuka

Location

Tokoname, Aichi

LocationSuzuka, Mie

Access5-minute walk from Central
International Airport,
3-minute walk from Central
International Airport Station
on Meitetsu Airport Line

Access3-minute walk from
Shirako Station on
Kintetsu Nagoya LineOperator

Greens Co., Ltd.

Operator

Greens Co., Ltd.

Guest
Rooms

346

Guest Rooms

105

JPY 5.31B

AcquisitionPrice

JPY 300M

AcquisitionPrice

F-3 Urbain Hiroshima Executive

F-6 Washington Hotel Plaza Shimonoseki Eki Nishi
Location

Shimonoseki,
Yamaguchi

Access6-minute walk from
Hiroshima Station on
JR Sanyo Shinkansen
and Sanyo Main Line

Access3-minute walk from
Shimonoseki Station
on JR Sanyo MainLine

Operator

Yuki Corporation

Operator

Washington HotelCorp.

Location

Hiroshima

Guest Rooms

171

Guest Rooms

238

AcquisitionPrice

JPY 1.80B

AcquisitionPrice

JPY 1.08B© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

49

Appendix: Loan Details & Shareholder Composition© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

50

Stable Financial Base
Outstanding Loan Balance
Jan 31, 2019
AmountJul 31, 2019

Jan 31, 2020

Jul 31, 2020

Jan 31, 2021

JPY 21.75B

JPY 25.47B

JPY 25.47B

JPY 25.47B

JPY 25.47B

Long-Term Loan Ratio

100%

100%

100%

93.1%

72.5%

Fixed Rate Ratio

80.7%

83.5%

83.5%

91.4%

70.7%

Average Interest Rate

0.91%

0.86%

0.88%

0.87%

0.82%

Average Remaining
Maturity

3.2 years

3.0 years

2.5 years

2.5 years

2.3年

LTV (Total Assets Basis)

38.8%

43.0%

41.5%

43.6%

43.3%

* The above does not include investment corporation bonds.

Distribution of Loan Maturities(JPY M)
8,000
Fixed Rate
Floating Rate
Bonds

7,000
6,000

4,500

4,000

4,500

2,500

3,000
2,000

500
2,000

2,220

1,800
450
0
Jul 2021

Jan 2022

Jul 2022

Jan 2023

Jul 2023

Jan 2024

Jul 2024

Jan 2025© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Jul 2025

Jan 2026

Jul 2026

Jan 2027

51

Loan Details
Loan

LenderAmount(JPY million)(as of January 31, 2021)

Floating/
Fixed

Interest Rate(%)

Borrowing Date

Maturity

Term Loan 4

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

4,500

Fixed

0.90750%

August 17, 2016

February 28, 2023

Term Loan 5

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

4,500

Fixed

0.98500%

August 17, 2016

August 31, 2023

Term Loan 7

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

1,800

Fixed

0.78750%

August 1, 2017

January 31, 2023

Term Loan 9

SMBC, Mizuho, Shinsei, Resona

1,500

Fixed

0.92000%

November 30, 2018

November 29, 2024

Term Loan 10

SMBC, Mizuho, Shinsei, Resona, Nishi-Nippon
City

2,220

Fixed

0.75450%

April 25, 2019

April 30, 2024

Term Loan 11

SMBC, Mizuho, Shinsei, Resona, Aozora

1,500

Fixed

0.73575%

July 19, 2019

November 29, 2024

Term Loan 12

SMBC

450

Variable

0.52909%

February 28, 2020

February 28, 2022

Term Loan 13

SMBC, Mizuho, Shinsei, Resona, Fukuoka,
Nishi-Nippon City

2,000

Fixed

0.65600%

February 28, 2020

February 27, 2026

Term Loan 15

SMBC, Mizuho, Shinsei, Resona

7,000

Variable

0.52909%

November 30, 2020

November 29, 2021

Total Borrowings

25,470

Average 0.76%

Average Remaining Loan Term 2.3 years

Issue Date

Name

Issue Amount(JPY million)

Interest Rate

Redemption Date

Issuance Period

November 25, 2020

First Unsecured Investment Corporation Bond
(Callable bonds subordinated and limited toqualified institutional investors)

500

2.00%

April 30, 2026

5.4 years

25,970

Average 0.78%

Total Interest-Bearing Liabilities

Lender Composition
Fukuoka
3%

Aozora1%

Bond
2%

Nishi-Nippon City
4%
Resona
10%

SMBC
38%

Shinsei
12%
Mizuho30%

Fixed vs. Floating

Variable
28.7%

Fixed*
71.3%

Average Remaining Loan Term 2.3 years* Includes interest fixed via swaps© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

52

Shareholder Composition
Major Shareholders (as of January 31, 2021)

By Number of Shares Held
No. ofShares

Name

Share

The Master Trust Bank of Japan,
Trust Account23,412Custody Bank of Japan, Ltd.,
Trust Account22,115

3

Ichigo Trust Pte. Ltd.

10,9084.3%

4

Nomura Trust & Banking Co., Ltd.
Investment Trust Account

10,400

4.1%

1
2

9.2%
8.7%

5

Ichigo Inc. (Sponsor)

6,500

2.5%

6

Banshu Shinkin Bank

4,900

1.9%

7

Custody Bank of Japan, Ltd.,
Securities Investment Trust Account

4,670

1.8%

8

Individual Shareholder

3,140

1.2%

Foreign Corporations & Individuals
Non-Financial Domestic Corporations

Morgan Stanley MUFG Securities

3,098

1.2%

10

DFA INTERNATIONAL REAL ESTATESECURITIES PORTFOLIO

2,990

1.2%

Total

92,133

36.1%(Shares)

25,161(9.9%)
16,953(6.6%)

34,316(13.5%)

38,334(15.0%)

16,244(6.4%)

15,430(6.1%)

91,029(35.7%)

65,558(25.7%)

121,831(47.8%)Jan 2020(Outstanding Shares) (254,974 shares)

75,764(29.7%)

138,856(54.5%)

125,446(49.2%)

Jul 2020(254,974 shares)

Jan 2021(254,974 shares)

By Number of Shareholders
Jan 31, 2020

9

Domestic Financial Institutions
Domestic Individuals

Jul 31, 2020

Jan 31, 2021

Shareholders Shareholders Shareholders

Share

Domestic Individuals
Domestic Financial Institutions
City banks, trust banks
Regional banks
Other (including securities companies)

17,20156
6
3
47

18,68838
4–34

16,985
36
4
–
32

97.6%
0.2%
–
–
0.2%

Non-Financial Domestic Corporations
Foreign Corporations & Individuals
Total

248
99
17,604248
124
19,098232
144
17,397

1.3%
0.8%
100%

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

53

Appendix: Growth Roadmap, Sponsor, Shareholder Alignment© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

54

Ongoing Actions to Drive Increased Shareholder Value
Portfolio Growth & Diversification Drive Earnings Growth & Stability
Organic Growth

External Growth

Current Environment• Both Japanese and inbound demand has dropped
significantly due to Covid, generating ongoing impact on
the hotel market• Supply is exceeding demand in some areas in Japan due
to excessive number of new hotel openings• Financial strength of hotel operators needs to be closely
monitored to verify their rent-paying ability• No new growth driver is currently expected

Current Environment• Sales and acquisitions limited due to market uncertainty• Market recovery is expected after vaccine & treatment
regimes become available• Competition for quality assets is expected to intensify

Actions• Proactively execute value-add capex tailored to each hotel• Sell hotels with limited growth potential• Increase earnings by revising fixed rent and variable rent
terms at lease renewal• Grow with sponsor support (Hakata Hotels/PROPERA)

Actions• Continue to grow portfolio of lodging-focused hotels, ahotel type with stable earnings• High underlying land values reflect Ichigo Hotel's highlocation attractiveness and value• Ichigo Hotel's focus on major regional cities withconvenient public transport access and revenue upsidefrom local events further reinforces earnings stability• Geographic diversification and centrally-located hotels withstable demand also support high earnings stability

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

55

Growth Strategy Roadmap
Flexibly Responding to Market Environment
Stage I

Stage II

• Drive higher earnings via economies of scale fromincreased asset size
• Invest primarily in lodging-focused hotels• Acquisition of conversion-feasible assets and lodging
facilities such as serviced apartments• Asset acquisitions via SPCs
• Asset acquisitions using low-cost borrowing capacity (LTV)• Construct a diversified portfolio to pursue both income
stability and earnings growth• Maximize dividend and earnings via unrealized gains via
asset acquisitions and sales• Acquire prime-location full-service hotels and resort hotels in
addition to lodging-focused hotels• Increase portfolio size and generate scale efficiencies via
acquisitions of newly built hotels in addition to value-add ofexisting hotels• Minimize expenses via collaboration with operators• Increase earnings via more favorable lease terms,
rebranding, etc.

• Examine opportunities for large-scale renovations andrebranding to increase earnings• Further increase earnings via more favorable lease terms,
rebranding, etc.

Financing• Enhance operational efficiency by monitoring operations and providing advice to partner hotel operators• Increase rents and earnings through value-add capex• Maintain a strong lender base
• Appropriate LTV• Manage interest rate risk
• Prepare to acquire credit rating• Shift to no fixed fee, performance fee-only structure• Acquire credit rating• Diversify financing• Continue to control LTV and manage interest rate risk
• Prepare to enter global REIT indices

Other

Organic
GrowthExternal
GrowthContinuous Dividend Growth via External Growth, Organic Growth, and Strong Financial Base

• Conduct share buybacks to increase dividend and maintainappropriate share price• Conduct share buybacks to increase dividend and maintainappropriate share price• Promote responsiveness to disasters (Respond to ESG
requirements)© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

56

Ichigo Hotel’s Sponsor: Ichigo (2337)
Core Businesses: Asset Management, Sustainable Real Estate, Clean Energy‒‒‒‒

Manages Ichigo Office (8975), Ichigo Hotel (3463), and Ichigo Green (9282)
TSE First Section, JPX-Nikkei 400 Member
Deeply committed to CSR and Sustainability
Japan’s first zero-carbon listed real estate company

Ichigo(TSE First Section 2337)

Ichigo Hotel (3463)

Ichigo Preserves andImproves Real Estate

Hiromi Miyake(Weightlifting)

The word “Ichigo” comes from theancient Japanese proverb, Ichigo
Ichie, literally meaning “Onelifetime, one encounter.” Thephrase was first used by a 16th
century master of the tea
ceremony, Sen no Rikyu. He
called upon his disciples to give
total focus and sincerity to eachact of the tea ceremony for every
guest, because that particular
moment will only exist once andmust be fully lived and realized.

Ichigo embraces the Ichigo Ichie philosophy of sincerity
and service, and works to build strong long-term
relationships to support the success of our clients,
shareholders, and all stakeholders.

AssetManagement

Ichigo Investment Advisors

Ichigo Green (9282)
Ichigo Office (8975)

Sustainable
Real Estate

Clean Energy

Ichigo Estate

Miyako City

Ichigo Owners

CentroIchigo Land Shinchiku

Storage Plus

Ichigo Real Estate Services
Fukuoka

Ichigo Animation

Ichigo Marché

Hakata Hotels

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

57

Synergies Between Ichigo Hotel and Sponsor‒ Strengthen acquisitions through leveraging Ichigo’s sourcing network‒ Increase asset value through Ichigo’s real estate value-add capabilities‒ Drive higher returns for Ichigo Hotel shareholders
Ichigo Hotel (3463)

Buy

Sponsor: Ichigo (2337)

Hotel

Value‐Add

Sell

Make The World
More Sustainable

Buy

Long-Term Asset Management(Grow Earnings for Shareholders)







Grow earnings via collaboration with hotel
operators
Grow earnings via rebranding and improving
lease terms
Grow earnings via smart cost control

Sell

Value-Add(Increase Asset Value)

Role

Value-add capex
On-going renovation and equipment renewal
Increase hotel attractiveness & competitiveness



Hard





Soft

Buy




Rectify building code issues
Seismic and safety reinforcement
Large-scale structural and equipment renewal
Change hotel operator/brandImprove lease terms
Improve hotel operations

Third-Party Investors© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

Sell

58

Hakata Hotels & PROPERA− Hakata Hotels, a consolidated subsidiary of Ichigo, is a hotel operator operating
13 hotels across Japan with many located in the Hakata (Fukuoka) area
− Hakata Hotels is deploying PROPERA, an AI-based revenue management systemdeveloped by Ichigo, to maximize earnings and increase guest satisfaction.
Name

Hakata Hotels Inc.

Address

3-13-1 Haruyoshi, Chuo-ku, Fukuoka

Representatives

Minoru Ishihara, Representative Director & Chairman
Takanobu Kitazaki, Representative Director & President

Paid-In Capital

JPY 10 million (100% shareholding by Centro Co. Ltd., a 100% Ichigo subsidiary)

Establishment Date

March 2019

Main Business・Development, operation, lease, and management of retail buildings, hotels and restaurants
・Lease and management of real estate・Design and construction of buildings and interior designs
・Consulting services related to retail buildings, retail facilities, and restaurants

Operating Hotels(No. of rooms inparentheses)

Tokyo: HOTEL EMIT SHIBUYA (72), MusBee Tokyo Hamamatsucho (29), The OneFive Tokyo Kanda (50)
Kyoto: The OneFive Kyoto Shijo (146)
Osaka: The OneFive Osaka Midosuji (136)
Okayama: The OneFive Okayama (208)Fukuoka: The OneFive Villa Fukuoka (50), Plaza Hotel Tenjin (205), Plaza Hotel Premiere (170),
Hotel Il Palazzo (62), The OneFive Marine Fukuoka (103), The OneFive Terrace Fukuoka (82),
The OneFive Fukuoka Tenjin (77)

PROPERA AI-based revenue management system developed by Ichigo• Increases guest satisfaction• Operating track record of increasing earnings by 10-40%• Starting third-party sales© Ichigo Investment Advisors Co., Ltd. Ichigo Hotel REIT Investment Corporation All rights reserved.

59

Portfolio Growth Opportunity via Ichigo Sponsor Support
20 Hotels (JPY 64B) in Ichigo Sponsor Pipeline as of November 30, 2020
− Lodging-focused hotels across Japan− Locations: Major cities such as Hokkaido, Tokyo, Yokohama, Osaka, and Fukuoka

Hokkaido

FukuokaTokyo

Hiroshima

Fukuoka

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

60

Ichigo Hotel Overview
Ichigo Hotel
Name

Ichigo Hotel REIT Investment Corporation

Securities Code3463

Address

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Executive Director

Osamu Miyashita

Fiscal Periods

January (August 1 - January 31) and July (February 1 - July 31)

Asset Management Company
Name

Ichigo Investment Advisors Co., Ltd.

President

Hiroshi Iwai

Registration &Membership

Financial Instruments Dealer License (Investment
Management Services, Investment Advisory & Agency
Services, and Type II Financial Instruments Services)
Minister of Finance, Kanto Financial Bureau #318

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

61

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

Make The World
More Sustainable

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

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

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