[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
November 25, 2022
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distribution forthe 39th Fiscal Period Ending December 2022
Invincible Investment Corporation (“INV”) today announced the revision of its forecast of financial
results and Distribution per Unit (“DPU”) for the fiscal period ending December 2022 (39th Fiscal
Period), stated as TBD in “Financial Summary for the June 2022 Fiscal Period (from January 1,
2022 to June 30, 2022)” dated August 25, 2022.
1.

Revision of the forecast of financial results and distribution for the fiscal period ending December
2022 (from July 1, 2022 to December 31, 2022)
Operating
Revenues

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

Total
Distribution
Amount
JPY million

TBD

TBD

TBD

TBD

TBD

JPY million

JPY million

JPY million

JPY million

JPY million

10,882

5,122

3,995

3,994

3,993

Amount of variance(B) – (A)JPY million

JPY million

JPY million

JPY million

JPY million

-

-

-

-

-

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

-

-

-

-

-

JPY million

JPY million

JPY million

JPY million

JPY million

8,406

2,292

1,014

1,014

1,012

Previous forecast (A)(announced on
August 25, 2022)
Revised forecast (B)(Reference)
Fiscal Period Ended
December 2021

Net Income

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

1

Distribution
per Unit
Earnings per
Unit (Note 1)

Previous forecast (A)(announced on
August 25, 2022)

Excess Profit
Distribution
per Unit(Excluding
Excess Profit
Distribution perUnit) (Note 1)(Note 1)

Distribution
per Unit(Including Excess
Profit Distribution
per Unit) (Note 1)

JPY

JPY

JPY

JPY

TBD

TBD

TBD

TBD

JPY

JPY

JPY

JPY

655

655

-

655

Amount of variance(B) – (A)

JPY

JPY

JPY

JPY

-

-

-

-

Rate of variance((B) – (A)) / (A)

%

%

%

%

-

-

-

-

(Reference)
Fiscal Period Ended
December 2021

JPY

JPY

JPY

JPY

166

166

-

166

Revised forecast (B)(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 6,096,840 units(Reference)
Assumptions underlying the forecast of financial results and DPU for the fiscal period ending
December 2022 are provided in Appendix 1.
2. Reasons for the revision of forecast of financial results and distribution
The forecast of financial results and DPU for the fiscal period ending December 2022 remained
undetermined at the time of the announcement of “Financial Summary for the June 2022 Fiscal
Period (from January 1, 2022 to June 30, 2022)” on August 25, 2022, as it was difficult to create theforecast due to the spread of COVID-19. As announced in “Performance Update for October 2022”
dated today, the operating status of each property up to October 2022 has been generally clarified.
Therefore, we have decided to announce the revision of forecast of financial results and DPU for the
fiscal period ending December 2022, based on the information currently available to INV and certain
assumptions that are deemed reasonable by INV.
During the fiscal period ending December 2022, Japan was hit by the seventh wave of COVID-19
infections from summer to early autumn. However, there were no restrictions on movement thissummer. Tourism and accommodation demand was solid, partly because events such as fireworks
festivals and summer festivals resumed in various places for the first time in three years. The
government’s travel subsidy program "National Travel Discount Campaign" started in October, which
is helping to boost domestic accommodation demand. On the other hand, inbound demand is
expected to gradually recover in the future, in response to the substantial relaxation of bordermeasures in October, and the current depreciation of the yen.
This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

2

The occupancy rate of the domestic hotel portfolio is as shown below.
Change in Occupancy Rate (Note 1) of 75 Domestic Hotels (Note 2)(Note 1) “Occupancy Rate” for hotel portfolio is calculated using the following formula:room occupancy rate = total number of rooms occupied during the relevant month ÷ (aggregate number of rooms during therelevant month x number of business days during the relevant months). Hereinafter the same.
(Note 2) Based on 75 hotel properties; of the 84 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, the underlying
asset of preferred equity interest held by INV) held as of today, nine hotels with fixed-rent lease agreements are excluded.
Hereinafter the same.
(Note 3) The figures for November 2022 and onwards show estimated figures as of today, and are subject to change, as it is still difficult
to anticipate the spread, containment and impact of the COVID-19 pandemic.

For the Cayman Hotels, demand is on a recovery trend, as travel-related restrictions to the Cayman
Islands have been lifted, and major airlines resumed flights to and from the United States. While
the occupancy rate is still below the 2019 level, visitors are more willing to pay a premium for theirlong-delayed vacations, and the 2022 ADR (average daily room rate) has exceeded the 2019 ADR
by more than 10% compared to the level of the same month consistently since May 2022.
The occupancy rates of the two Cayman Hotels are as shown below.
Change in Occupancy Rate of the Cayman Hotels(Note 4) The figures for November 2022 and onwards show estimated figures as of today, and are subject to change, as it is still difficult
to anticipate the spread, containment and impact of the COVID-19 pandemic.
This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

3

In response to the above situation, INV concluded a Memorandum of Understanding (“September
2022 MOU”) to amend each fixed-term building lease and property management agreement for 73
domestic hotels operated by INV's main tenant, MyStays Hotel Management Co., Ltd. (“MHM”) and
its affiliates (collectively with MHM, the “MHM Group”) as announced in “Notice concerning
Conclusion of Memorandum of Understanding to Amend the Fixed-term Building Lease and Property
Management Agreement pertaining to the rent conditions for the period from July to September,
2022 with Major Tenant” dated September 9, 2022, as it remains impossible for the MHM Group to
pay the full amount of the fixed rent under the terms and conditions under the original MLPM
Agreements for the period from July to September 2022. On the other hand, as for the period from
October to December 2022, due to the recovery in hotel demand, the estimated total GOP of 73
hotels operated by the MHM Group is anticipated to exceed the total fixed rent amount stipulated in
the original contract. However, on an individual hotel basis, GOP of some hotels is still below the
fixed rent stipulated in the original contract. Moreover, concerns about the negative impact of the
8th wave of COVID-19 infections, which is currently spreading, cannot be ruled out. Therefore, asof today, we are discussing with the MHM Group about the necessity of a potential reduction of fixed
rent or other measures for the period from October to December 2022 and aim to reach an
agreement within early December.
In light of the current estimated GOP of 73 hotels operated by the MHM Group, rent from the MHM
Group is estimated to be JPY 3.60 billion (of which, fixed rent of JPY 2.1 billion and variable rent of
JPY 1.5 billion; approx. 95% of the fixed rent under the original leasing terms and conditions in theamount of JPY 3.78 billion) for the period from July to September 2022, and JPY 3.45 billion (thebreakdown of fixed rent and variable rent is undetermined; approx. 128% of the fixed rent under theoriginal leasing terms and conditions in the amount of JPY 2.68 billion) for the period from October
to December 2022. Overall, rent from the MHM Group for the fiscal period ending December 2022
is estimated to be JPY 7.06 billion (the breakdown of fixed rent and variable rent is undetermined;
approx. 109% of the fixed rent under the original leasing terms and conditions in the amount of JPY
6.46 billion), which is a significant increase from the fiscal period ended December 2021 in which
INV received JPY 2.96 billion (of which, fixed rent of JPY 1.95 billion and variable rent of JPY 1.01
billion.)Total Rent from the MHM Group as a Percentage of Original Fixed Rent Contract(JPY billion)
Fixed Rent under

Rent

the Original
PeriodLeasing Terms

Fixed Rent

Variable Rent

Total Rent

Ratio

and Conditions

(b)

(c)

(d = b+c)

(d/a)

(a)
Jul. to Sep. 2022

3.78

2.10

1.50

3.60

95%

Oct. to Dec. 2022

2.68

-

-

3.45

128%

Dec. 2022 Fiscal Period

6.46

-

-

7.06

109%

Dec. 2021 Fiscal Period

6.46

1.95

1.01

2.96

45%

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

4Regarding dividend income for the fiscal period ending December 2022 related to preferred equity
interest in the TMK which holds the Sheraton Grande Tokyo Bay Hotel as an underlying asset, thedividend income is expected to be zero since it is based on the hotel's performance from April 1,
2022 to September 30, 2022 (Note 5), or the calculation period of the TMK issuing preferred equity
interest, in which the hotel has seen a limited improvement in room occupancy rates.
(Note 5) Kingdom Special Purpose Company (the “TMK”), which is the issuer of preferred equity interest and the owner of Sheraton
Grande Tokyo Bay Hotel, or the underlying asset, has a cumulative loss due to the decline in profits of the underlying asset
caused by the spread of COVID-19. Therefore, the TMK has been in a situation where it cannot pay dividends even if it settles
the accounts. Under such circumstances, the TMK has amended its Articles of Incorporation to temporarily extend its six-monthaccounting period to a 12-month accounting period in order to curb the costs of settlement of accounts. Therefore, in INV’s
fiscal period ending December 2022, the settlement of accounts of the TMK will not be carried out. This measure is temporary,
and TMK plans to restore to the original 6-month settlement once the cumulative loss is resolved and TMK is expected to be able
to resume payment of dividends.

As a result, the NOI of domestic hotels for the fiscal period ending December 2022 is expected to
be JPY 6,916 million, an increase of 125.6% compared to the December 2021 fiscal period, but adecrease of 38.4% compared to the December 2019 fiscal period prior to the pandemic.
For overseas hotels, NOI is expected to be JPY 1,356 million, a significant increase compared to
JPY -280 million in the December 2021 fiscal period.
Performance of the residential portfolio is solid. NOI for the 41 properties held today is expected to
be JPY 1,123 million, almost the same level as the same period in the previous year.
As a result, net income for the fiscal period ending December 2022 is expected to be JPY 3,994
million. INV intends to distribute a total of JPY 3,993 million (JPY 655 per unit) from the net income.
It is almost three years since the outbreak of the COVID-19 pandemic. Performance of INV has
finally recovered to the point where we can expect to post a positive net income without the sale ofproperties. As mentioned above, the recovery of inbound demand has started, and INV and its
asset management company will continue to make all-out efforts with the goal of quickly approaching
the profit levels before 2019.

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

5

(Appendix 1)<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Period ending December 31,
2022>

Item

Assumptions

Fiscal period

The December 2022 Fiscal Period: from July 1, 2022 to December 31, 2022 (184 days)
Properties held as of the end of the December 2022 Fiscal Period: 127 properties andpreferred equity interests in one TMK

Assets undermanagement

Based on the properties held as of today (127 properties and preferred equity interests
in one TMK), and INV assumes that there will be no change in the portfolio through theend of the fiscal period ending December 2022.
As of the end of the December 2022 Fiscal Period: 6,096,840 units

Units outstanding

INV assumes that there will be no change to the current 6,096,840 units issued andoutstanding through the end of the December 2022 Fiscal Period.
Balance as of the end of the fiscal period ending December 2022: JPY 240,797 million(borrowing: JPY 232,597 million, investment corporation bonds: JPY 8,200 million)

Interest-bearing liabilities

Out of the current total balance of JPY 240,797 million, INV assumes that JPY 4,321
million of borrowing (refinance) is implemented as of November 29, 2022 for the fiscal
period ending December 2022, as mentioned in the press release entitled “Noticeconcerning Debt Financing (Refinance)” dated today. INV assumes no other new loanor prepayment of loan through the end of the December 2022 Fiscal Period.

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

6INV expects to record rental revenues for the fiscal period as follows:

・TMK dividend amount

December 2022
Fiscal Period
JPY 9,367 million(JPY 7,699 million)
JPY 1,515 million(USD 11,174
thousand)-

Total operating revenues

JPY 10,882 million

・Rental revenues(of these, hotel rents) (*)
・Management contract revenue(*) As stated in the main text, the breakdown of fixed rent and variable rent isundetermined.
INV estimates the amount of dividends on the preferred equity interests based on theperformance of the underlying asset and the assumed amount of expenses incurred by
the TMK. As stated in the main text, there will be no TMK dividend on preferred equity
interests in the fiscal period ending December 2022.
Operating revenues

INV recognizes management contract revenue from the overseas hotels as real estate
investment income from management contracts of the Cayman Hotels. The forecasts
of management contract revenue are based on estimated performance of the overseas
hotels and the assumed amount of expenses incurred by the hotel managementcompany. Management contract revenues from July to October 2022 have been
calculated based on the monthly average exchange rate of each month, while
management contract revenues for November and December 2022 have been calculated
based on exchange rate of USD 1 = JPY 140. Previously, INV had assumed that the
expansion and renovation of the Cayman Hotels would begin in the summer of 2020 withthe goal of completion in the summer of 2023. However, considering the situation of the
Cayman Hotels under the impact of COVID-19, INV is forced to refrain from discussions
on the expansion and renovation project. While it is assumed that we will resume
consideration of expansion and renovation based on the market environment, etc., INV
does not anticipate and incorporate any particular impact of the expansion and renovation
for the purpose of this forecast for the fiscal period ending December 2022.
Rental revenues are calculated after considering waiving of rent, change of variable rent
pursuant to the September 2022 MOU and changes in rent conditions for the period from
October to December 2022 with the MHM Group assumed as of today, and based on
estimates as of today. In addition, INV assumes there will be no delinquencies or nonpayment of rent by other tenants.

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

7

INV expects to incur property related expenses and management contract expenses outof operating expenses for the fiscal period as follows:

Operating expenses

・Facility management fees(of these, repair costs)
・Taxes and other public charges
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses andmanagement contract expenses

December 2022
Fiscal Period
JPY 404 million(JPY 18 million)
JPY 740 million
JPY 139 million
JPY 3,780 million
JPY 123 million
JPY 5,188 million

INV expects to incur other operating expenses than the property related expenses ormanagement contract expenses for the fiscal period as follows:・Other operating expenses

December 2022
Fiscal Period
JPY 571 million(of these, asset management fees)(JPY 300 million)

INV expects to record net operating income for the fiscal period as follows:
December 2022
Fiscal Period

NOI

・NOI

JPY 9,474 million(of these, domestic hotel NOI)(of these, overseas hotel NOI)(of these, residential NOI)(JPY 6,916 million)(JPY 1,356 million)(JPY 1,123 million)

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses+
Dividends on the preferred equity interest (TMK dividend) + (Management Contract
Revenue‐Management Contract Expense)
NOI for December 2022 fiscal period is calculated after considering waiving of rent,changes of variable rent pursuant to the September 2022 MOU and changes in rent
conditions for the period from October to December 2022 with the MHM Group assumed
as of today.
INV expects to incur non-operating expenses for the fiscal period as follows:

Non-operating expenses

・Interest expense
・Finance related costs・Interest for investment corporation
bonds
・Depreciation of investment
corporation bonds issuance
expenses
Total non-operating expenses

December 2022
Fiscal Period
JPY 562 million
JPY 546 million
JPY 28 million
JPY 6 million
JPY 1,144 million

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

8

The distribution per unit is calculated in accordance with the cash distribution policy as
set forth in INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending December 2022, INV expects
to distribute an aggregate amount of JPY 3,993 million (distribution per unit: JPY 655)
from the net income for the fiscal period ending December 2022 (JPY 3,994 million).
Distribution per unit

For the fiscal period ending December 2022, INV expects to record deferred gain on
hedge of the interest rate swap as the valuation and conversion adjustments, etc. of JPY
96 million, which is equal to the amount for the fiscal period ended June 2022. The
distribution per unit is calculated based on the assumption that fluctuation of the market
value of the interest rate swap does not affect the distribution per unit and earnings per
unit.
Distribution per unit may vary due to various factors, including changes of the assets
under management, fluctuation of rent income associated with reasons such as changeof tenants and occurrences of unexpected repairs.

Excess profit distribution
per unit

INV believes maintaining the stability of cash distributions over the medium term is oneof the most important factors in determining the amount of distribution for a given fiscal
period, and therefore, INV has adopted the policy to make distributions in excess of profits
in order to stabilize distributions, in cases where dilution of investment units or significant
expenses are to be recorded in connection with, among other things, the acquisition ofassets or the raising of capital, leading to a temporary decrease in distribution per unit,
taking into consideration the level of distribution per unit assuming such acquisition ofassets or capital raising had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits for the purpose of
decreasing the impact from corporate tax increase arising from different rules in tax andaccounting practices, such as treatment on depreciation of fixed term land lease or asset
retirement obligation.
With respect to the fiscal period ending December 2022, INV will not have to make
distributions in excess of profits in order to cope with the discrepancy between tax andaccounting treatment.

Excess profit distribution per unit

Other

December 2022
Fiscal Period-

INV assumes there will be no amendments to applicable laws and regulations, thetaxation system, accounting standards and other regulations that would affect theforegoing forecasts.
In addition, INV assumes there will be no unforeseen material changes in general
economic trends, real estate market conditions and other trends and conditions.

This English language notice is a translation of the Japanese-language notice released on November 25, 2022 and was prepared solely for theconvenience of, and reference 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 noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

9