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

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

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

Invincible Investment Corporation
Asset Management Report
Fiscal Period ended December 31, 2015 (July 1, 2015 to December 31, 2015)

Contents
Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation
and President & CEO of Consonant Investment Management Co., Ltd.
Summary of Financial Results
Further External Growth
Continuous Improvement of Financial Condition
Strong Performance of Hotel Assets
I.

Asset Management Report

II.

Balance Sheet

III.

Statement of Income

IV.

Statement of Unitholders’ Equity

V.

Notes

VI.

Statement of Cash Distribution

VII.

Statement of Cash Flows (Reference Information)

Overview of Unitholders/Investment Units
Portfolio Data
Newly Acquired 6 Hotels (acquired in January 2016)
Information for Unitholders

Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation
and President & CEO of Consonant Investment Management Co., Ltd.
I would like to take this opportunity to express my sincere gratitude and appreciation to all investors
in Invincible Investment Corporation (“INV”) for your continued support.

It is my pleasure to provide you with a report on INV’s asset management and financial results forthe 25th period (covering the period from July 1, 2015 to December 31, 2015; the “Reporting
Period”).

During the Reporting Period, we conducted our second global public offering (the “Capital
Increase”) in two years that raised JPY 29.3 billion in funds.

The proceeds from the Capital

Increase were used together with new loans to acquire 11 hotels and 3 residential properties in July2015.

In August 2015, we acquired 3 hotels by utilizing the excess cash on hand from the Capital

Increase along with new loans.

As of the end of the Reporting Period, our portfolio consisted of

111 properties, and our asset size was JPY 173.8 billion (based on the acquisition price).

With respect to the property operations, the average daily rate (ADR) for hotels increased
substantially, due in large part to the steep increase in the number of international inbound visitors toJapan, which nearly reached 20 million visitors annually.

INV has adopted a variable rent structure

at most of the hotels it owns, under which any increase in hotel revenue directly leads to an increasein INV’s revenue.

INV’s operating revenue increased by JPY 1,889 million, or 38.0%, from theprevious period to JPY 6,863 million due to the revenue contribution of the newly acquired assets
referenced above together with an increase in variable rent revenue.

In regards to financial operations, we refinanced all existing loans in July 2015, and concurrently
converted all debt to unsecured debt, lengthened and diversified the debt maturity periods andfurther reduced the interest rates.

As of the end of the Reporting Period, the average interest rate onloans was 0.63%, substantially lower than 1.06% as of the end of the previous period.

As a result, net income increased by JPY 657 million, or 28.6%, from the previous period to JPY
2,952 million, and DPU (distribution per unit) increased by JPY 327, or 38.0%, from the previous
period to JPY 1,187 (the total of JPY 948 from distribution of earnings per unit and JPY 239 fromexcess profit distribution per unit).

The annual DPU for 2015, the sum of the DPU for the June andDecember 2015 fiscal periods, was JPY 2,047, a considerable increase of JPY 741, or 56.7%, fromthe previous year.

2

Summary of Financial Results

Period fromJanuary 1, 2014 toJune 30, 2014

Period from
July 1, 2014 toDecember 31, 2014

Period fromJanuary 1, 2015 toJune 30, 2015

Period from
July 1, 2015 to
December 31, 2015

Operating Revenue(Thousands of yen)

3,775,772

4,610,717

4,974,760

6,863,775

Ordinary Income(Thousands of yen)902,420

1,958,607

2,295,909

2,953,293

Net Income(Thousands of yen)

901,815

1,958,002

2,295,304

2,952,688

Net Assets(Thousands of yen)

36,373,796

61,392,392

61,731,550

91,758,194

Total Assets(Thousands of yen)

79,261,754

130,477,232

136,299,746

185,918,871

Net Assets per Unit
(Yen)

23,121

23,005

23,132

28,731Net Assets/Total Assets
(%)

45.9

47.1

45.3

49.4

Distribution per Unit
(Yen)

573

733

860

1,187

Number of Units Issued(Unit)

1,573,179

2,668,686

2,668,686

3,193,686(Note)

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

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

3

Further External Growth
External Growth Supported by Stronger Sponsor Support(Note 1) Based on acquisition price(Note 2) “Others” includes Office, Retail and Parking lot.

Acquisition Summary4Hotels Covered by Preferential Negotiation Rights(Note 2)
(Note 3)

The term of validity of the MOU is from January 20, 2016, the date of execution of the new MOU, toJanuary 19, 2017.
As of the end of February 2016, INV does not have any plan to acquire any of the properties listed above.
There is no guarantee that INV will be granted an opportunity for considering acquisition of the properties
or be able to acquire the properties.

5

Continuous Improvement of Financial Conditions■ LTV ratio based on appraisal value was 44% as of the latest date
■ Stable bank formation mainly consists of megabanks and mega trust banks

Borrowings (1)(Note 1)

C-tax loan isn’t included in calculation of average loan term. Average Interest Rate of Loans; based onassumption 1 month TIBOR as of January 22, 2016, although 2 month TIBOR is applied as the base rateof the first payment period for Term Loan (B).

Bank Formation

6

LTV (2) (Appraisal base) and Average Interest Rate (3)(Note 2)
(Note 3)

LTV (Appraisal base) is calculated using the following formula:Interest‐Bearing Debts (excluding c-tax loan) / Total Appraisal Value
The average interest rate is calculated using the following formula:(Total of loan amount outstanding at the end of each fiscal period multiplied by applicable interest rate at
the end of each fiscal period for each of loans) / The loan amount outstanding at the end of each fiscal
periodDSCR (Based on Portfolio) (4) / DSCR (Excluding Hotel Variable Rent Portion) (5)(Note 4)(Note 5)DSCR (Based on Portfolio) is calculated using the following formula; (Operating Income + Depreciation
Expenses + Profit/Loss derived from Sale of Real Estate) ÷ (Contract Payment Amount + Interest
Amount)DSCR (Excluding Hotel Variable Rent) is calculated using the following formula; (Operating Income Hotel Variable Rental Income + Depreciation Expenses + Profit/Loss derived from Sale of Real Estate) ÷(Contract Payment Amount + Interest Amount)

7

Strong Performance of Hotel Assets■ Japan saw a record 19.73 million foreign visitors in 2015, up 47.1%. The number of
inbound Asian tourists is not impacted by volatility in Chinese equity market andcontinues to increase in 2016
■ Average daily rate (ADR) of hotels increased. Increase in hotel revenues leads to growthof INV’s revenues.

ADR Growth (Annual) (1)

ADR Monthly Trend (1)8NOI Growth (Annual) (1)(2)

NOI Monthly Trend (1)(Note 1)

(Note 2)

Based on 32 hotels in our portfolio, as of the end of December 31, 2015 which include all hotels withvariable rent structures except for Hotel MyStays Haneda, which opened on September 26, 2014 and haveno comparable results, Super Hotel Shinbashi/Karasumoriguchi, Comfort Hotel Toyama, Super Hotel JR
Uenoiriyaguchi and Super Hotel Tokyo‐JR Tachikawa Kitaguchi, that are also excluded because theirleases have only fixed rent.
Pre-acquisition GOP and NOI are based on the actual results provided by sellers and adjusted to reflect
for trust fees and insurance premiums assuming the properties had been held by Invincible.

9

Ⅰ.

Asset Management Report

Overview of Asset Management
1

Trends in Investment Corporation’s Operating Results

By Period

21stFiscal Period

22nd
Fiscal Period

23rd
Fiscal Period

24thFiscal Period

25thFiscal Period

Calculated period

Jul. 1, 2013 toDec. 31, 2013

Jan. 1, 2014 toJun. 30, 2014

Jul. 1, 2014 toDec. 31, 2014

Jan. 1, 2015 toJun. 30, 2015

Jul. 1, 2015 to
Dec 31, 2015

(Note 1) (Thousands of yen)

2,740,449

3,775,772

4,610,717

4,974,760

6,863,775(Rental revenues)(Thousands of yen)

2,740,449

2,772,419

4,610,717

4,974,760

6,863,775

Operating expenses(Thousands of yen)

1,474,679

1,541,127

1,840,796

2,163,828

2,494,667(Property-related expenses)(Thousands of yen)

1,261,221

1,281,791

1,586,854

1,834,039

2,178,165

Operating income(Thousands of yen)

1,265,770

2,234,644

2,769,920

2,810,931

4,369,108

Ordinary income(Thousands of yen)353,360

902,420

1,958,607

2,295,909

2,953,293

Net income(Thousands of yen)352,755

901,815

1,958,002

2,295,304

2,952,688(a) (Thousands of yen)(%)

79,176,632(1.3)

79,261,754
0.1

130,477,232
64.6

136,299,746
4.5

185,918,871
36.4(Thousands of yen)

41,310,000

41,000,850

67,260,000

72,301,000

91,699,000(b) (Thousands of yen)(%)

35,844,824
9.1

36,373,796
1.5

61,392,392
68.8

61,731,550
0.6

91,758,194
48.6

Total contribution(Thousands of yen)

29,134,389

29,134,389

53,096,413

53,096,413

82,465,438

Total distribution(c) (Thousands of yen)

372,843

901,431

1,956,146

2,295,069

3,790,905(Note 2) (%)

105.7

100.0

99.9

100.0

102.5

(d) (Units)

1,573,179

1,573,179

2,668,686

2,668,686

3,193,686

Net assets per unit(b) / (d) (yen(Note 3))22,78523,121

23,005

23,132

28,731

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

237

573

733

860

1,187

237

573

733

860

948

Operating revenues

Operating Results

Total assets(change from last period)
Asset Condition

Interest-bearing debt
Net assets(change from last period)

Dividend Status

Dividend payout ratio

Number of investment units
Issued and outstanding

Information per Unit

—

—

—

—

239

0.4

1.1

1.9

1.7

1.8

0.9

2.3

3.7

3.5

3.6

1.0

2.5

4.0

3.7

3.8

Financial Measures

Return on assets(change over year)(Note 4) (%)

Return on equity(change over year)(Note 4) (%)

2.0

5.0

7.9

7.5

7.6

Capital ratio(change from last period)(b) / (a) (Note 4) (%)
(%)

45.3

45.9

47.1

45.3

49.4

4.3

0.6

1.2

(1.8)

4.1

NOI
(Net Operating Income)(Note 4) (Thousands of yen)

2,006,648

2,018,542

3,861,122

4,127,486

5,961,324(Note 1) Consumption taxes etc. are not included in operating income.
10

(Note 2) Dividend payout ratio is calculated by dividing profit distribution by unit by net income that period.
However, for the period after the 21st Fiscal Period, it is calculated by dividing the total profit
distribution amount by net income.
(Note 3) Distribution by unit is rounded to the nearest unit.
(Note 4) Published benchmarks are calculated as below, and ratios are rounded to one decimal place.
Return on Assets = Ordinary Income / (Total Assets at Start of Reporting Period + Total Assets at
End of Reporting Period) / 2 x 100
Return on Equity = Net Income this period / (Net Assets at Start of Reporting Period + Net Assets
at End of Reporting Period) / 2 x 100
Capital Ratio = Net Assets at End of Reporting Period /Total Assets at End of Reporting Period x
100
Rental NOI = Rental Revenues – Leasing Costs + Fiscal Period Depreciation Expenses
2

Operating Conditions(1)

Main trends in the Investment Corporation

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation
Act (Act No. 198 of 1951, as amended; the “Investment Trust Act”). In May 2004, INV was listed on the
Osaka Securities Exchange (application for delisting was made in August 2007), and in August 2006 waslisted on the Real Estate Investment and Trust Securities Section of the Tokyo Stock Exchange (Ticker Code:8963).
After the merger with LCP Investment Corporation (“LCP”) was implemented on February 1, 2010, INV
issued new investment units through a third-party allotment on July 29, 2011 and refinanced its debt.
Calliope Godo Kaisha (“Calliope”), an affiliate of the Fortress Investment Group LLC (“FIG” and together
with Calliope and other affiliates of FIG, collectively the “Fortress Group”) was the main allottee, and thesponsor changed to the Fortress Group.
Ever since the commencement of sponsorship from the Fortress Group, INV has been focused its efforts on
improving the earning power of its portfolio and establishing a revenue base in order to implement stable
distributions, and has strengthened the lender formation through new borrowings and the refinancing ofexisting bank borrowings, and thereby has established a financial base for future growth.
With this platform as a base, in June 2014, Consonant Investment Management Co., Ltd., the asset manager
to which INV entrusts the management of its assets (the “Asset Manager”) revised the Investment Guidelines
for INV, and added hotels as a core asset class alongside residential properties with a view towards expanding
investments in the hotel sector in which demand is forecast to rise going forward. INV's portfolio as at theend of the previous period ended June 2015 comprised 94 properties (23 hotels, 63 residential properties andeight others) with a total acquisition price of JPY 131,188 million, and market capitalization as at such date
was JPY 174,265 million.
In the fiscal period ended December 2015 (the "Reporting Period"), INV conducted a global public offering
for the second consecutive year (the "Capital Increase"), and with the funds raised through the Capital
Increase and new loans, acquired 11 hotels and three residential properties (the "Acquisition") and refinanced
all existing loans (the "Refinancing"; collectively with the Capital Increase and the Acquisition, the"Measures"). In addition, on June 25, 2015, INV entered into a Memorandum of Understanding (the "MOU") with affiliates of sponsor Fortress Group, thereby acquiring preferential negotiating rights regarding
the acquisition of 21 hotels and nine residential properties, securing a pipeline for external growth.
Through implementation of the Measures, INV achieved further DPU growth and an increase in scale forboth the portfolio and market capitalization. Furthermore, INV converted all loans into unsecured debt,
further strengthening its financial soundness and stability.
In addition, INV acquired three hotels as of August 28, 2015 which increased the portfolio size to 111
properties (an increase of 17 properties from the previous period end) with a total acquisition price of JPY
173,815 million (an increase of JPY 42,627 million from the previous period end) and a market capitalizationof JPY 224,835 million (an increase of JPY 50,570 million from the previous year end) as of the end of theReporting Period. INV was included in the FTSE EPRA / NAREIT Global Real Estate Index Series regarded
as a prominent benchmark by many global property funds from September 21, 2015, due to expansion ofmarket capitalization and enhancement of liquidity through our initiatives.
(2)

Operational Environment and Performance

In the Reporting Period, certain segments of the Japanese economy such as exports were influenced by
weakness in emerging economies. However, there were many bright spots to highlight due to strong11corporate earnings which helped spur real annualized GDP growth of 1.0% for the period from July to
September 2015 year-on-year. The employment and wage environment showed further improvement as theunemployment rate for December 2015 fell to 3.3%, the jobs-to-applicants ratio was 1.27x, and the numberof unemployed declined for the 67th consecutive month. Going forward, while it is necessary to take note ofrisks such as the growing concerns over the slowdown in overseas economies primarily in emerging
countries, the decline in worldwide stock values and the low price of crude oil, the moderate domestic
economic upswing is expected to continue due to the recovery in consumer spending on the back of the
improved employment and wage environment. Furthermore, there is underlying economic support from theimpact of the government’s financial policy, the Bank of Japan’s large-scale monetary easing policy, and thestrengthening of corporate profits in connection with the decline in raw material costs associated with the
decline in the price of crude oil.
Regarding the real estate investment market, real estate transaction prices continued to rise in Tokyo andother large cities as a result of Japan’s economic recovery and expectations of an end to deflation. According
to the Japanese Real Estate Investor Survey (October 2015) conducted by the Japan Real Estate Institute,investors expect capitalization rates for offices, residences, retail facilities, and hotels to continue to decline.
87% of the survey respondents said that they would make new investments over the next year, showing thatinvestment demand remains high. In particular, investors expect hotel capitalization rates to decrease by 0.4
points in both Tokyo and Osaka compared with the previous survey, as investment demand continues to
grow.
Regarding the property rental market, Tokyo office building vacancy rates continue to decline while vacancy
rates are bottoming out in parts of other major cities such as Osaka and Nagoya. Rents increased mainly for
newly constructed buildings and premium properties in the Tokyo area as corporations consolidate their floor
space as well as expand leasing space in the same building.
In the hotel segment, the Japanese government’s promotion of tourism initiatives such as airport capacity
expansion, the entry of LCC’s into the Japanese market, and the relaxation of visa requirements for some
Asian countries, coupled with macro structural changes such as a sharp increase in the number ofcross-border travelers due to the global rise of the middle-income bracket, has led to a significant increase in
the number of international visitors to Japan from China and Southeast Asian countries such as Thailand,
Malaysia, the Philippines, Indonesia and Vietnam. This robust combination helped Japan log a record high of
19.737 million visitors in 2015 (47.1% increase from the 13.413 million visitors of the previous year), andthe number of foreigners entering Japan exceeded the number of Japanese departing for the first time in 45
years. The influx of inbound visitors has dramatically increased the demand for hotel accommodation, insome cases causing a shortage in some regions..
With respect to the residential sector, market rent trends for small-type city-center properties continue toimprove. Under the positive circumstances in the macro environment, INV implemented a rent increaseprogram for both new leases and renewals as well as an initiative to reduce residential leasing costs based ona market analysis of each unit and property. As a result, in the Reporting Period, INV realized a rent increasefor 42.8% of the new residential lease contracts or a rent increase of 0.2% compared to the previous rent, anda rent increase for 39.1% of contract renewals or a rent increase of 1.3% compared to the previous rent. while
maintaining a high contract renewal rate of 85.5% in 2015. The average occupancy rate increased from
93.7% (January to June 2015) to 95.6% (July to December 2015) while maintaining a high renewal rate incontract renewals (85.5% per year in 2015). Furthermore, INV acquired three residential properties fromthe sponsor group on July 16, 2015 at a total price of JPY 5,099 million, adding further stability to theportfolio.
In the hotel segment, INV acquired 12 properties in total from the sponsor group on July 16 and on August28, 2015, INV acquired two hotels from a third party, for a total price of JPY 37,528 million. In terms ofinternal growth, in addition to the abovementioned external factors, the hotel operators adeptly captured
inbound demand through strong revenue management techniques. 33 of the INV’s hotels (Note 1) recorded
significant growth metrics in the Reporting Period led by an occupancy rate (Note 2) of 91.4% (+1.7 points
year-on-year for 32 properties (Note 3)), ADR (Note 4) of JPY 8,784 (+18.5% year-on-year), and RevPAR(Note 5) of JPY8,026 (+20.7% year-on-year). The ratio of overseas sales (Note 7) at 31 of the hotels (Note 6)
increased to 31.8% (+ 12.2 points year-on-year).
As a result, INV maintained a high average occupancy rate of 98.0% across the entire portfolio, and the NOI
increased by 44.4% from the previous period to JPY 5,961 million.
At the end of the Reporting Period, the number of properties held by INV totaled 111, including 37 hotels, 66
residential properties, seven office buildings and retail facilities, as well as one parking lot, at a totalacquisition price of JPY 173,815 million and total leasable area of 296,546.92m2.
As a result of the internal growth performance, trends in the real estate investment and rental market, as wellas the strong performance of the hotels, the total appraisal value at the end of the Reporting Period was JPY
214,952 million, an increase of JPY 25,024 million (+13.2%) year-on-year (Note 8). The increase came12

primarily from the hotels, as the appraisal value of the 37 hotels increased JPY 23,753 million (+21.7%)
year-on-year (Note 8), significantly enhancing the overall portfolio asset value. The portfolio has an
unrealized gain of JPY 45,700 million (Note 9) and an unrealized gain ratio of 27.0% (Note 9).
(Note 1) Of the 37 acquired hotels, the following hotels on fixed rents are excluded: Super Hotel
Shinbashi-Karasumoriguchi, Comfort Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi
and Super Hotel JR Ueno-Iriyaguchi.
(Note 2) “Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period ÷ total number of rooms
available during the same period (number of rooms x number of days)(Note 3) Hotel Mystays Haneda for which there are no performance figures for the same period in theprevious year is excluded, in addition to the properties excluded per Note 1.
(Note 4) “ADR” means average daily rate, and is calculated by dividing total room sales (excluding service
fees) for a certain period by the total number of days per room for which each room was occupied
during the same period.
(Note 5) “RevPar” means revenue per available room per day, and is calculated by dividing total room sales
for a certain period by total number of rooms available (number of rooms x number of days) during
the same period, and is the same as the figure obtained by multiplying occupancy rates by ADR.
(Note 6) Of the 37 acquired hotels, the following hotels are excluded as the tenant does not disclose the ratioof overseas sales: APA Hotel Yokohama-Kannai, Hotel Nets Hakodate, Super Hotel
Shinbashi-Karasumoriguchi, Comfort Hotel Toyama, Super Hotel Tokyo JR-Tachikawa Kitaguchi
and Super Hotel JR Ueno-Iriyaguchi.
(Note 7) “Overseas sales ratio” is the ratio of sales amount through overseas web agents to revenues.
(Note 8) The comparison was made after the following were added to the total appraisal value of theportfolio assets as of the end of the previous period: (i) of the 66 residential properties, theappraisal value as of May 1, 2015 of the three properties acquired as of July 16, 2015, of the 37
hotels, (ii) the appraisal value as of May 1, 2015 of the 11 properties acquired as of July 16, 2015,(iii) the appraisal value as of August 10, 2015 of Flexstay Inn Ekoda, which is one of three hotels
acquired as of August 28, 2015, and (iv) the appraisal value as of July 31, 2015 of the remaining
two properties(Note 9) The unrealized gain is calculated using the following formula: the appraisal value as of the end of
the Reporting Period - book value as of the end of the Reporting Period
The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ bookvalue as of the end of the Reporting Period(3)

Overview of Fund Raising(i) Equity Finance
INV executed (i) a global public offering of investment units that closed on July 15, 2015 (number of new
investment units issued: 500,000; total issue value: JPY 27,970 million) and (ii) a third-party allotment inconjunction with the global offering that closed on August 12, 2015 (number of new investment units issued:
25,000; total issue value: JPY 1,398 million), in order to procure part of the funds for the acquisition of 11
new hotels and three residential properties.
(ii) Debt Finance
INV implemented the borrowing of New Syndicate Loan (E) (amount borrowed: JPY 88,338 million; interest
rate: variable interest rate of one-month JPY TIBOR plus 0.40%, 0.50%, 0.60% and 0.20%) on July 16,
2015, with Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank,
Ltd. as arrangers, in order to refinance New Syndicate Loan (C), New Syndicate Loan (D) and Prudential
LPS Loan B, along with using a portion of the funds to acquire 11 new hotels and three residential properties.
Through the Refinancing, INV converted the entire debt to unsecured debt, lengthened and diversified thedebt maturity and further reduced borrowing costs.
In addition, INV implemented the borrowing of Term Loan (A) (amount borrowed: JPY 3,682 million;interest rate: one-month JPY TIBOR plus 0.5%) from Mizuho Bank, Ltd. on August 28, 2015 for use as a
portion of the fund and related expenses to acquire three hotels.
Furthermore, INV repaid the portion of the New Syndicate Loan (E) on November 30, 2015 in the amount of
JPY 321 million that corresponds to the borrowings equivalent to the expected consumption tax refund (Note1) using the consumption tax refunds from to the three hotels acquired on February 6, 2015.
As a result of the above measures, INV’s interest-bearing debt outstanding balance was JPY 90,619 million
and the Loan-to-Value ratio was 48.7% (Note 2) as of the end of the Reporting Period and, the average
13interest rate was 0.63% (Note 3), a significant reduction from 1.06% as of the end of the previous period.
(Note 1) Borrowings corresponding to the expected consumption tax refund mean the borrowings which will
be prepaid in the amount equivalent to the refund of consumption tax and local tax, which were
paid in relation to the acquisition of the trust beneficiary interests acquired by the borrowings
executed at the same time, in the case where the above-mentioned consumption tax refunds arereceived. The same shall apply hereinafter.
(Note 2) The calculation for the Loan-to-Value ratio uses the calculation formula below:
Loan-to-Value ratio = amount of interest-bearing debt (excluding JPY 1,080 million borrowings
corresponding to the expected consumption tax refund) ÷ amount of total assets at end of theReporting Period x 100(Note 3) The average borrowing interest rate (annual rate) is calculated by the weighted average based on
the outstanding balance of borrowings, excluding borrowings corresponding to the expectedconsumption tax refund. In addition, the said rate is rounded to two decimal places.
3

Changes in Number of Investment Units Issued and Outstanding

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

Type of issue

January
18, 2002

Privateplacementforincorporation
Privateplacement
PrivatePlacement
Privateplacement
Privateplacement
Privateplacement
Privateplacement
Privateplacement
Privateplacement
Publicoffering
Publicoffering
Publicoffering
Unit split

December26, 2003
January
9, 2004
January
21, 2004
January27, 2004
January
28, 2004
January
31, 2004
February
5, 2004
February
7, 2004May
17, 2004
February
7, 2005
July
31, 2006
February
1, 2010February
1, 2010July
29, 2011
December20, 2013
July

MergerThird-party
allotment
Third-party
allotment
PublicNumber of investment
units
issuedandoutstanding (units)
Increase
Total

Unitholders’ equity (yen)Reference

Total

Increase

400

400

200,000,000

200,000,000(Note 1)

2,700

3,100

1,012,500,000

1,212,500,000(Note 2)

1,350

4,450

506,250,000

1,718,750,000(Note 2)

1,333

5,783

499,875,000

2,218,625,000(Note 2)

267

6,050

100,125,000

2,318,750,000(Note 2)

800

6,850

300,000,000

2,618,750,000(Note 2)

266

7,116

99,750,000

2,718,500,000(Note 2)

800

7,916

300,000,000

3,018,500,000(Note 2)

1,333

9,249

499,875,000

3,518,375,000(Note 2)

9,000

18,2493,377,250,000

6,895,625,000(Note 3)

10,65028,8993,937,667,100

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

19,134,417,100(Note 5)215,596

269,495―

19,134,417,100(Note 6)367,200

636,695―

19,134,417,100(Note 7)

711,597

1,348,292

6,999,979,689

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

1,573,179

2,999,992,580

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

2,613,179

22,747,920,000

51,882,309,369(Note 10)14

16, 2014
August13, 2014
July 15,2015
August12, 2015

offering
Third-party
allotment
Publicoffering
Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 11)500,000

3,168,686

27,970,500,000

81,066,913,980(Note 12)25,0003,193,686

1,398,525,000

82,465,438,980(Note 13)

(Note 1) The Investment Corporation was incorporated through a private placement at a price of 500,000
yen per unit.
(Note 2) New investment units were issued in a private placement at a price of 375,000 yen per unit to raise
funds for the acquisition of new properties.
(Note 3) New investment units were issued in a public offering at a price of 395,000 yen per unit (375,250
yen after deducting the underwriters’ discount) to raise funds for the acquisition of new properties.
(Note 4) New investment units were issued in a public offering at a price of 385,140 yen per unit (369,734
yen after deducting the underwriters’ discount) to raise funds for the acquisition of new properties.
(Note 5) New investment units were issued in a public offering at a price of 348,740 yen per unit (332,045
yen after deducting the underwriters’ discount) to raise funds for the acquisition of new properties.
(Note 6) An investment unit slit of 5 units per 1 unit was conducted.
(Note 7) A merger by absorption pursuant to Article 147 of the Act on Investment Trusts and Investment
Corporations was conducted with LCP, with INV as the surviving entity. As a result of the merger
by absorption, 4 investment units of INV (after the investment unit split) were allotted for each
LCP investment unit. The number of LCP investment units issued as of the time of the merger by
absorption was 91,800 units.
(Note 8) New investment units were issued in a third party allotment at a price of 9,837 yen per unit to makerepayment of existing debt, etc.
(Note 9) New investment units were issued in a third party allotment at a price of 13,340 yen per unit tomake repayment of existing debt, etc.
(Note 10) New investment units were issued in a public offering at a price of 22,688 yen per unit (21,873 yenafter deducting the underwriters’ discount) to raise funds for the acquisition of new properties.
(Note 11) New investment units were issued in a third party allotment at a price of 21,873 yen per unit for the
purpose of cash reserve to appropriate to repayment in future borrowings.
(Note 12) New investment units were issued in a public offering at a price of 57,817 yen per unit (55,941 yenafter deducting the underwriters’ discount) to appropriate a portion of funds for the acquisition of
new properties.
(Note 13) New investment units were issued in a third party allotment at a price of 55,941 yen per unit for the
purpose of cash reserve to appropriate a portion of funds for the acquisition of properties in future.
Trends in Trading Prices of Investment Securities
The highest and lowest prices (trading prices) in the Real Estate Investment and Trust Securities Section of
the Tokyo Securities Exchange on which the investment securities of INV are listed are as follow.
Real Estate Investment and Trust Securities Section, Tokyo Securities Exchange
PeriodClosing
Month
HighestLowest4

21st
FiscalPeriodDecember
2013
20,00012,61022nd Fiscal
PeriodJune 2014

23rd
FiscalPeriodDecember
2014
50,90023,02024,76016,740

24th
FiscalPeriodJune 2015
66,40044,500(Unit: yen)
Fiscal25th
PeriodDecember
2015
76,40057,900Distribution PerformanceWith respect to distributions for the Reporting Period, it was determined to distribute all unappropriatedretained earnings, excluding fractions of distribution per investment unit that are less than one yen, with theaim of having the maximum amount of profit distribution deducted as expenses based on application of thespecial taxation provisions (Article 67-15 of the Act on Special Measures Concerning Taxation). As a result,the distribution per unit for the Reporting Period was determined to be JPY 948. In addition to this, based15

on the policy on distributions in excess of the amount of profit prescribed by the Articles of Incorporationof INV, it was determined to distribute JPY 763 million as refund of investment in order to equalize theaggregate amount of the distribution, since the amount of profit distribution is expected to decreasesignificantly due to the occurrence of (i) expenses regarding the issuance of new investment units and (ii) the
one-time expenses regarding refinancing. As a result, the excess profit distribution per investment unit
was determined to be JPY 239.
Period21st
22nd Fiscal 23rd
24th Fiscal
25th Fiscal
FiscalFiscalCalculated Period
July 1, 2013 Jan. 1, 2014 July 1, 2014 Jan 1, 2015 Jul. 1, 2015
to Dec. 31, to June 30, to Dec. 31, to June. 30, to Dec. 31,
2013
2014
2014
2015
2015
Total unappropriatedretained earnings for
446,003
974,975
2,031,546
2,370,704
3,028,323
period (thousands ofyen)
Reserved
profit73,15973,54375,39975,634－(thousands of yen)
Total cash distribution
372,843
901,431
1,956,146
2,295,069
3,790,905(thousands of yen)(Distribution per unit)
237
573
733
860
1,187
(yen)
Total profit distribution
372,843
901,431
1,956,146
2,295,069
3,027,614(thousands of yen)
(Profit distribution per
237
573
733
860
948
unit) (yen)Totalrefundofinvestment (thousands−−−−
763,290of yen)(Refund of investment
−
−
−
−
239
per unit ) (yen)Total distribution fromthereservefor
temporary difference
−
−
−
−
−
adjustments out of total
refund of investment(thousands of yen)(Distribution of thereserve for temporary
difference adjustments
−
−
−
−
−
per unit out of refundof investment per unit)(yen)
Total distribution fromunitholders’capitalunder the tax laws out−−−−
763,290of the total refund ofinvestment (thousandsof yen)Distribution
fromunitholders’capitalunder the tax laws out
−
−
−
−
239
of refund of investment
per unit (yen)5

Future Operational Policy and Issues to be Addressed

Forecast for Next Period and Issues to be Addressed16

Since July 2011, INV has enhanced unitholder value by significantly increasing DPU with the Fortress Group
as its sponsor. Going forward, INV will implement various strategies to maintain further growth, including
the following measures.
•
Continuous acquisition of properties from sponsor and third parties•
Further internal growth at hotel properties•
Obtain credit rating•
Diversification of financing measures, including the issuance of invest corporation bonds
Details of the future growth strategy are as follows.
(i)

External growth strategy

New Property Acquisitions
As its basic strategy, INV will move forward with the acquisition of new properties focusing on hotels, wherecontinued growth in portfolio revenues is anticipated. INV will also acquire a certain proportion ofresidential properties and hotels using fixed rent schemes, which contribute to stable revenue. Thisacquisition strategy will enable INV to build a portfolio with a good balance between growth and stability.
In regards to hotels, INV will take into consideration the trends in foreign visitors, demands of business andleisure customers, the competitive hotel environment, and leasing contract types when making investment
decisions, with the aim of acquiring properties where growth and stability of gross operating profit (GOP)
and rental revenue are forecasted to increase.
In regards to residential properties, INV will analyze occupancy rates, rental market trends, the presence ofcompeting properties and other factors, and consider acquiring mainly small-type properties in large cities
with strong competitiveness. In addition, INV will consider acquiring family-type properties in the casewhere it is determined by INV to be beneficial to portfolio diversification regarding residential properties.
In recent years, the property acquisition environment has become increasingly severe, however, INV, as
shown below, has continued to achieve steady external growth from the pipeline of the sponsor, the FortressGroup.
Properties Acquired from affiliates of the Fortress Group
Date
Details
September 2012
Acquired 24 residential properties
May 2014
Acquired two hotels
July 2014
Acquired 18 hotels
February 2015
Acquired two hotels
Acquired 11 hotels and three
July 2015
residential properties
August 2015
Acquired one hotel
Acquired five hotels and one
January 2016
residential property
67 properties
Total(of which 28 are residential and 39
are hotels)

Total acquisition price
JPY 14,043 million
JPY 5,435 million
JPY 39,938 million
JPY 4,911 million
JPY 35,258 million
JPY 5,069 million
JPY 10,207 million
JPY 114,861 million(of which residential: JPY 22,052
million; hotels: JPY 92,809 million)

The Fortress Group manages four dedicated Japanese real estate funds, including the Fortress Japan
Opportunity Funds I and II. The Fortress Group’s committed equity is over JPY 300 billion and the numberof properties that the Fortress Group is invested in exceeds 1,400. In order to ensure future growth options
for the portfolio, INV entered into an updated MOU with the Fortress Group that provides preferential
negotiation rights with respect to the acquisition of 25 hotels and nine residential properties as of January 20,
2016 (see the table below) (Note 1).
In addition, by utilizing the property transaction information available through the Fortress Group and INV’s
own network, INV will continuously consider and implement the acquisition of properties from third parties
that will contribute to stability and growth in revenue and cash flow and an increase in DPU.
No. Asset Name
Asset Type (Note 8)
Location
No. of Rooms
Hotel
MyStays
Gotanda1
Limited Service Hotel
Shinagawa-ku, Tokyo
333
Station17

No. Asset Name
Asset Type (Note 8)
Hotel MyStays Akasaka (Note2
Limited Service Hotel
2)
3 Hotel MyStays Kanazawa
Limited Service Hotel
Hotel
MyStays4
Limited Service Hotel
Fukuoka-Tenjin
Hotel
MyStays5
Limited Service Hotel
Yokohama-Kannai (Note 3)
Hotel
MyStays6
Limited Service Hotel
Hamamatsucho
Rihga Royal Hotel Kyoto
7
Full Service Hotel(Note 4)8 Narita Excel Hotel Tokyu
Full Service Hotel
9 Art Hotels Sapporo
Full Service HotelBest Western Hotel Fino
10
Limited Service Hotel
Sapporo11 Best Western Hotel Fino Oita Limited Service Hotel
12 Takamatsu Tokyu REI Hotel Limited Service Hotel
13 Hotel Naqua City Hirosaki
Full Service Hotel
14 Beppu Kamenoi Hotel
Resort Hotel
15 Fusaki Resort Village
Resort Hotel
Sheraton Grande Tokyo Bay
16
Full Service Hotel
Hotel (Note 5)
Hotel Shin-Osaka Conference17
Limited Service Hotel
Center18 Art Hotels Asahikawa
Full Service Hotel
Hotel MyStays Kanazawa
19
Limited Service Hotel
Castle20 Hotel JAL City Matsuyama Full Service Hotel
21 Hotel Ueno East
Limited Service Hotel(Provisional Name) Hotel
22 MyStays Hommachi 3-chome Limited Service Hotel(Osaka) (Note 6)
Hotel
MyStays
Sapporo23
Limited Service Hotel
Nakajima Park
24 Flexstay Inn Sakuragicho
Limited Service Hotel
MyCUBE by MYSTAYS
25
Limited Service Hotel
Asakusa Kuramae (Note 7)
Hotel Subtotal
26
27
28
29
30
31
32

Gran Charm Hiroo
Residential/Small Type
Plestay Win Kinshicho
Residential/Small TypeGran Charm Kichijoji
Residential/Small TypeGreen Patio Noda
Residential/Small Type
Dainichi F-45
Residential/Small TypeGran Charm Urayasu
Residential/Small TypeGran Charm Urayasu 5
Residential/Small TypeGran Charm Minami Gyotoku
33
Residential/Small TypeI
Gran Charm Minami Gyotoku
34
Residential/Small TypeII
Residential Property Subtotal
18

Location

No. of Rooms

Minato-ku,Tokyo

327

Kanazawa-shi, Ishikawa

244

Fukuoka-shi, Fukuoka

217

Yokohama-shi, Kanagawa 166
Minato-ku, Tokyo

105

Kyoto-shi, Kyoto

489

Narita-shi, Chiba
Sapporo-shi, Hokkaido

706
418

Sapporo-shi, Hokkaido

242

Oita-shi, Oita
Takamatsu-shi, Kagawa
Hirosaki-shi, Aomori
Beppu-shi, Oita
Ishigaki-shi, Okinawa

145
191
134
322
195

Urayasu-shi, Chiba

1,016

Osaka-shi, Osaka

397

Asahikawa-shi, Hokkaido 265
Kanazawa-shi, Ishikawa

206

Matsuyama-shi, Ehime
Taito-ku, Tokyo

161
150

Osaka-shi, Osaka

120

Sapporo-shi, Hokkaido

86

Yokohama-shi, Kanagawa 70
Taito-ku, Tokyo

64
6,769

Shibuya-ku, Tokyo
Sumida-ku, Tokyo
Musashino-shi, Tokyo
Noda-shi, Chiba
Urayasu-shi, Chiba
Urayasu-shi, Chiba
Urayasu-shi, Chiba

121
92
28
240
54
54
54

Ichikawa-shi, Chiba

52

Ichikawa-shi, Chiba

48
743

(Note 1) The term of validity of the MOU is from January 20, 2016, the date of execution of the new MOU,
to January 19, 2017. Properties highlighted in the above table show the new properties added tothe subject properties of the MOU. Regarding the 34 properties listed above, there is no
guarantee that INV will be granted an opportunity for considering acquisition of the properties or
be able to acquire the properties.
(Note 2) Hotel MyStays Akasaka is scheduled to be completed in June 2016, and is scheduled to open in
August 2016.
(Note 3) Hotel MyStays Yokohama –Kannai is scheduled to be completed in September 2016, and isscheduled to open in October 2016.
(Note 4) Rihga Royal Hotel Kyoto is scheduled to partially reopen on September 1, 2016 after renewal andfully reopen on November 1, 2016.
(Note 5) Extension work regarding the Annex site of Sheraton Grande Tokyo Bay Hotel is now underway
and is scheduled to be completed in February 2017.
(Note 6) (Provisional Name) Hotel MyStays Hommachi 3-chome (Osaka) is scheduled to be completed in
October 2017, and is scheduled to open in December 2017.
(Note 7) MyCUBE by MYSTAYS Asakusa Kuramae is scheduled to be completed in April 2016, and isscheduled to open in June 2016.
(Note 8) Each “Asset Type” above is as follows:“Limited Service Hotel” refers to a hotel focusing on revenues from room stay and offer limited
service regarding foods and beverages, banquet, spa or gymnasium facilities.
“Full Service Hotel” refers to a hotel having sections of stay, foods and beverages, and banquet.
“Resort Hotel” refers to a hotel located at tourist destinations or recreational lots, having sectionsof stay, foods and beverages, and incidental facilities.
“Small Type” refers to a residential property in which the majority of dwelling units are less than
30 m2.
Property Sales
While INV places priority on increasing unitholders’ value through external growth by taking into accountthe increased level of activity in the real estate trading market, it also plans to consider the possibility ofproperty sale upon consideration of the portfolio sector composition, geographic distribution andcompetitiveness of each property, as appropriate.
(ii)

Strategy for internal growth(Hotels)
Of the 37 hotels owned by INV as at the end of the fiscal period ended December 2015, 32 hotels use avariable rent scheme. In the variable rent scheme, in principle, INV receives gross operating profit (GOP)
after deducting management fees for the hotel operator, and INV’s variable rent scheme is set up so that INV
can directly enjoy the hotel revenue upside. For 29 hotels, MHM, a hotel operator in the sponsor group, has
implemented strict revenue management seeking to maximize revenue. INV will continue to accurately
ascertain and analyze operating conditions of its hotels, the conditions of nearby hotels, market trends andother factors through operation meetings and other contact with hotel operators and will focus on operations
that maximize rent income.
(Residential properties and others)
INV will continue to strengthen its collaborative ties with Property Management (PM) companies andbrokers to further boost occupancy rates and earning capabilities of its properties. With respect to INV’s
residential properties, while keeping in mind the on-season in the residential rental market that occurs during
the fiscal period ending June 2016, INV will focus on increasing an occupancy rate, rent for new lease
contracts as well as for lease renewals for each of its properties as well as formulating net leasing
management policies in order to continue maximizing profits.
Further, the implementation of appropriate maintenance and repair plans is of the utmost importance inmaintaining and enhancing the competitiveness and market value of the properties as well as ensuring stable
operations and high tenant satisfaction. Therefore, INV will continue to monitor current strategic plans withflexible implementation as it sees fit.
(iii)

Financial strategy

INV will, in continuation of the strengthening of its financial base via the refinancing implemented in July
19

2015 resulting in its debt becoming unsecured borrowing and the new borrowings implemented in August
2015 and January 2016, promote a financial strategy that envisages obtaining a future credit rating anddiversifying financing measures, including issuing investment corporation bonds. Also, INV seeks tomaximize unitholders’ value by way of lengthening and diversification of borrowing terms, further reductionof borrowing costs, fixing interest rates taking into consideration the interest rate trends, solicitation of new
financial institutions and strengthening of its lender formation.
(iv)

Compliance risk management

While the executive officer of INV concurrently serves as the representative director at the Asset Manager,
two supervisory directors (an attorney and a certified public account) oversee the execution of the executive
officer’s duties via the Board of Directors of INV. In addition, the compliance officer of the Asset Manager
attends each meeting of the Board of Directors in the capacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws, regulations andother relevant matters as well as overall management of transactions with sponsor related parties. Moreover,it has in place a compliance committee which, chaired by such compliance officer, is in charge of deliberatingon compliance with laws, regulations and other relevant matters as well as transactions with sponsor relatedparties. Compliance committee meetings are attended by an outside expert (an attorney) who, sitting in as acompliance committee member, conducts rigorous deliberations on the existence of conflicts of interest intransactions with sponsor related parties as well as strict examinations with respect to INV’s compliance withlaws and regulations.
INV intends to continually take steps to strengthen its compliance structure.
6

Significant subsequent events

INV acquired five hotels and one residential property in the fiscal period ending June 30, 2016 (26th fiscal
period) by utilizing excess cash-on-hand and new borrowings, without issuing new equity.
As a result, the total number of properties held by INV as of the date of this document increased to 117
properties (comprising 67 residential properties, 42 hotels, and eight others) with a total acquisition price of
JPY 184,022 million.

20

(a) Acquisition of Assets
On January 22, 2016, INV acquired five hotels and one residential property as described in the following
table.
Use

Hotel

Property
Number

Property
Name

Location

D38

Hotel
Mystays
Shinsaibashi

Osaka-shi,
Osaka

D39

ComfortHotel
Kurosaki

Kitakyushushi,
Fukuoka

D40

ComfortHotel
Maebashi

Maebashi-s
hi, Gunma

D41

ComfortHotel
TsubamesanjoSanjo-shi,
NigataD42

ComfortHotel Kitami

Kitami-shi,
Hokkaido

AcquisitionPrice(mn JPY)(Note 1)

Residential

A103

Royal Parks
Momozaka

Category ofSpecified
Assets

3,190

Trust
Beneficial
Interest

1,160

NavaroTokuteiMokutekiKaishaTrust
Beneficial
Interest

1,140

NavaroTokuteiMokutekiKaishaTrust
Beneficial
Interest

1,020

NavaroTokuteiMokutekiKaishaTrust
Beneficial
Interest

851

860

NavaroTokuteiMokutekiKaishaTrust
Beneficial
Interest

7,297

7,370
Momo
TokuteiMokutekiKaishaTrust
Beneficial
Interest

1,148

1,128

1,010

Osaka-shi,
Osaka

SellerAki
TokuteiMokutekiKaisha3,160

Subtotal

Appraisal
Value(mn JPY)(Note 2)

2,910

2,940

Subtotal

2,910

2,940

Total

10,207

10,310(Note 1) Acquisition price does not include adjustments for property taxes, city planning taxes, national or
local consumption taxes; hereinafter the same.
(Note 2) The appraisal value of Hotel Mystays Shinsaibashi is based on that as of November 20, 2015 by areport of the Japan Real Estate Institute. The appraisal value of Comfort Hotel Kurosaki, Comfort
Hotel Maebashi, Comfort Hotel Tsubamesanjo and Comfort Hotel Kitami are based on that as ofNovember 20, 2015 by reports of Daiwa Real Estate Appraisal Co., Ltd. Royal Parks Momozaka isbased on the appraisal value as of November 20, 2015 by a report of Morii Appraisal & Investment
Consulting, Inc.

21

(b) Borrowing of Funds
INV implemented the new borrowings described in the following table on January 22, 2016 for use
as a portion of the fund and related expenses to acquire properties described in “(a) Acquisition ofAssets”.
Term Loan (B)Borrowing DateLenderBorrowingAmount(mn JPY)

Sumitomo Mitsui Trust Bank, January 22,
2016
LimitedMitsubishi UFJ Trust andJanuary
Banking Corporation
22, 2016
Sumitomo Mitsui Trust Bank,
Limited

4,250

4,250

January
22, 2016

498

Total

Interest Rate
Principal(per annum)
Maturity(Note 1)Date
0.55% (Note 1)
January 22,
Variable interest rate
2019
(Note 2) (Note 5)
0.75% (Note 1)
January 22,
Variable interest rate
2021
(Note 3) (Note 5)
0.35% (Note 1)
January 22,
Variable interest rate
2017
(Note 4) (Note 5)

Borrowing
MethodUnsecured /nonguarantee
Unsecured /nonguarantee
Unsecured /nonguarantee

8,998(Note 1) Interest rate applicable for the period from January 22, 2016 to February 28, 2016
(Note 2) One-month JPY TIBOR (Base Rate) + spread (0.4%)(Note 3) One-month JPY TIBOR (Base Rate) + spread (0.6%)(Note 4) One-month JPY TIBOR (Base Rate) + spread (0.2%)(Note 5) With respect only to the first interest calculation period, the two-month JPY TIBOR will
be applied as the base rate, instead of the one-month JPY TIBOR.

Overview of the Investment Corporation

1

Overview of Investment

By Period

21st

Results Dates
Numberof

Fiscal

22nd

Fiscal

23rd

Fiscal

24th

Fiscal

25th

FiscalPeriodPeriodPeriodPeriodPeriodAs of Dec. 31,

As of Jun. 30,

As of Dec. 31,

As of Jun. 30,

As of Dec. 31,

2013

2014

2014

2015

2015

10,000,000

10,000,000

10,000,000

investment22

10,000,000

10,000,000

unitsauthorized
Numberof

1,573,179

1,573,179

2,668,686

2,668,686

3,193,686

29,134

29,13453,09653,09682,465

8,783

10,005

12,148

10,731

10,587

investment
units

issuedandUnitholders’capital
Numberof

totalunitholders

2

Notes regarding Unitholders

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

Name

Number of units held

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

(trust account)

Trust

&

Bank,

CustodyLtd.

% of total number of investment units
issued and outstanding

609,94219.09

457,742

14.33

380,895

11.92

327,963

10.26

149,925

4.69

132,316

4.14

75,193

2.35

68,9762.15

47,8991.49

Services(securities

investment trust account)
Rayo Godo Kaisha
The

NomuraTrust

andBanking Co., Ltd. (investment
trust account)
STATE STREET BANK AND
TRUST COMPANYSTATE STREET BANK AND
TRUST COMPANY 505225
NORTHERN

TRUST

CO.

(AVFC) RE IEDU UCITS

23

CLIENTS NON LENDING 15
PCT TREATY ACCOUNT
Total

2,295,660

71.88(Note 1) Percentages are rounded down to two decimal places.
3

Notes regarding Directors

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

Name

Primary

Directors’

Responsibilities

remuneration for
operating period(thousands of yen)

Executive Director

Naoki Fukuda

President and CEO,--

Consonant Investment
Management Co. Ltd.
Supervisory Director

Takashi Takahashi

Attorney,

Ocean

2,400

General Law Office
Hiroyuki Fujimoto

Tax accountant, CPA

2,400

Fujimoto Office
AuditorErnst & Young--

30,800ShinNihon LLC(Note)

Executive and supervisory directors do not hold the Investment Corporation’s units either
in their names or in the names of third parties. In addition, while they may be directorsof organizations not listed above, those organizations as well as those listed above have noconflicts of interest with the Investment Corporation.

Determination policy for dismissal or non-reappointment of Auditor
The auditing agreement with the auditor is renewed every accounting period.

Dismissals are madein accordance with the Investment Trust Act, and in addition, non-reappointments are considered by
the board of directors of INV by comprehensively taking into account the auditing quality, auditor
remuneration, and other various circumstances.

Business suspension order issued to an Auditor
Ernst & Young ShinNihon LLC, the Auditor of INV (“Ernst & Young ShinNihon”), received

24

business suspension order from the Financial Services Agency on December 22, 2015, as set forth
below,
a. Subject of the order- Ernst & Young ShinNihon LLC
b. Contents of the order- Suspension of accepting new engagements for 3 months (from January 1, 2016, to March 31,
2016)- Operational improvement order (improvement of the operational management system, etc.)
c. Reason of the order- With respect to Ernst & Young ShinNihon, the seven certified public accountants thereof had, in
negligence of due care, attested the financial statements of TOSHIBA CORPORATION for years
that ended March 31, 2010, 2012 and 2013 containing material misstatements as if the statements
contained no material misstatements.
- The operations of Ernst & Young ShinNihon are significantly inappropriate.

4

Asset

Management

Company,

Asset

CustodyCompanies,

andGeneralAdministrative AgentsThe asset management company, asset custody companies, and general administrative agents at theend of the Reporting Period are as below.
Delegation Category

Name

Asset management company

Consonant Investment Management Co., Ltd.

Asset custody company

Sumitomo Mitsui Trust Bank, Limited

Generaladministrative

agent(institutional

Sumitomo Mitsui Trust Bank, Limited

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

agent(institutional

Consonant Investment Management Co., Ltd.

operations (Note 2))
Generaladministrative

agent(auditing

EP Consulting Services Corporation

operations, etc.)
Special account management company

Mitsubishi UFJ Trust and Banking Corporation
Limited (Note 3) /Sumitomo Mitsui Trust Bank,
Limited (Note 4)(Note 1) Of the administrative tasks for the Investment Corporation’s institutional operations, tasks

25related to the mailing of general unitholders’ meetings and the receipt and counting ofvoting forms are delegated(Note 2) (i) Tasks related to the running of general unitholders’ meetings for INV (excluding tasks
related to the mailing of general unitholders’ meetings and the receipt and counting ofvoting forms), (ii) Tasks related to the running of the meetings of the Board of Directors of
INV, and (iii) the aforementioned in (i) or tasks incidental or related to (ii) are delegated.
(Note 3) Conducts administrative tasks related to the creation, maintenance, and disposition oftransfer savings account registers for special accounts of unitholders of the INV before themerger (former Tokyo Growth REIT Fund) as well as tasks related to other transfer
savings account registers.
(Note 4) Conducts administrative tasks related to the creation, maintenance, and disposition oftransfer savings account registers for special accounts of unitholders of the former LCP as
well as tasks related to other transfer savings account registers.

26

Status of Investment Corporation’s Assets under Management
1

Composition of Investment Corporation’s Assets
Previous period

Reporting period(as of June 30, 2015)
Type of(as of December 31, 2015)

Geographic Area
PurposeAsset

Amount Held

(Note 1)

Amount Held
Ratio of Total(millions of yen)

Ratio of Total(millions of yen)

Assets (%)

Assets (%)(Note 2)

Residential

Office/RetailReal
EstateHourly parking

HotelGreater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

Greater Tokyo area

708

0.5

707

0.4

Major regional cities

－

－

－

－

Subtotal

708

0.5

707

0.4

Greater Tokyo area

100

0.1

100

0.1

Major regional cities

－

－

－

－

Subtotal

100

0.1

100

0.1

Greater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

809

0.6

808

0.4

Greater Tokyo area

43,52531.9

45,941

24.7

Major regional cities

11,743

8.6

13,505

7.3

Subtotal

55,26940.5

59,446

32.0

Greater Tokyo area

7,056

5.2

7,037

3.8

Major regional cities

5,928

4.3

5,877

3.2

Subtotal

12,984

9.5

12,914

6.9

Greater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

Greater Tokyo area

37,55327.6

67,20736.1

Major regional cities

20,65815.2

23,037

12.4

Subtotal

58,211

42.7

90,245

48.5

126,465

92.8

162,606

87.5

Total real estate

Residential

Real

Office/Retailestate intrust
Hourly parking, etc.

Hotel

(Note 2)

Total Real Estate in Trust

27

Previous period

Reporting period(as of June 30, 2015)
Type of(as of December 31, 2015)

Geographic Area
PurposeAsset

Amount Held

(Note 1)

Amount Held
Ratio of Total(millions of yen)

Ratio of Total(millions of yen)

Assets (%)

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

9,024

6.6

22,50412.1

136,299

100.0

185,918100.0（127,274）（93.4）(163,414)(87.9)

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

28

2

Major Properties

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

Book Value

Occupancy
Leasable

Name of Property

Leased Area

(millions ofRatio of Rental
Rate (%)

Area (m )
2

(m )

yen)

Main Use
Revenue (%)

2(Note)

D21 APA Hotel Yokohama-Kannai

8,266

6,568.51

6,568.51

100.0

3.4

Hotel

D24 Hotel MyStays Haneda

7,759

5,400.16

5,400.16

100.0

3.0

Hotel

A75 Spacia Ebisu

6,599

7,794.91

7,454.27

95.6

3.0

Residential

D3 Hotel MyStays Kyoto-shijo

5,904

7,241.51

7,241.51

100.0

5.4

Hotel

D25 Hotel MyStays Kameido P1

5,576

4,349.67

4,349.67

100.0

2.7

Hotel

D35 Flexstay Inn Ekoda

5,055

3,932.93

3,932.93

100.0

1.2

Hotel

D4 MyStays Shin-Urayasu Conference Center

4,829

6,232.30

6,232.30

100.0

3.2

Hotel

D5 Hotel MyStays Maihama

4,783

2,456.36

2,456.36

100.0

2.8

Hotel

B14 Lexington Plaza Nishigotanda

4,730

6,033.58

6,033.58

100.0

2.2

OfficeRetail Facilities
D27 Hotel MyStays Kameido P2
Total(Note)

3,726

2,793.99

2,793.99

100.0

1.8

Hotel

57,23352,803.92

52,463.28

99.4

28.6

-

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

29

3

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

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

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
Trust
A26

Nisshin Palacestage
Daitabashi

1-31-2 Izumi, Suginami-ku, Tokyo

beneficiary

1,771.13

1,140

1,133

2,681.94

1,260

1,101

1,051.50

983

833

1,367.96

1,100

995

2,152.31

1,310

1,391

1,748.24

1,320

1,362

3,029.16

1,070

1,078

1,858.44

1,180

977

1,351.11

1,020

967

interests
Trust
A27

Nisshin Palacestage HigashiNagasaki

5-4-1 Nagasaki, Toshima-ku, Tokyo

beneficiaryinterests
Trust

A28

Growth Maison Gotanda

2-26-6 Nishi-Gotanda, Shinagawa-ku,
Tokyobeneficiaryinterests
Trust

A29

Growth Maison Kameido

6-58-16 Kameido, Koto-ku, Tokyo

beneficiaryinterests
Trust

A30 Emerald House

3-27-18 Itabashi, Itabashi-ku, Tokyo

beneficiaryinterests
Trust

A31

Harmonie Ochanomizu

2-5-5 Yushima, Bunkyo-ku, Tokyo

beneficiaryinterests
Trust

A32

Suncrest Shakujii-Koen

3-15-35 Takanodai, Nerima-ku, Tokyo

beneficiaryinterests
Trust

A33

Growth Maison
Shin-Yokohama

3-16-2 Shin-Yokohama, Kohoku-ku,
Yokohama-shi, Kanagawa

beneficiaryinterests

A34

Belle Face
Ueno-Okachimachi

1-27-5 Higashi-Ueno, Taito-ku, Tokyo

Trust
beneficiary30

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A35

Grand Rire Kameido

3-39-12 Kameido, Koto-ku, Tokyo

beneficiary

1,562.26

969

840

952.89868

762

1,015.34702

755

1,368.57634

644

1,167.50615

656

1,235.93486

647

1,210.74

709

556

1,126.65562

617

1,047.75

530

565

557.05596

565

interests
Trust
A36

Growth Maison Ikebukuro3-31-14 Nishi-Ikebukuro, Toshima-ku,
Tokyobeneficiaryinterests
Trust

A37

Growth Maison Yoga

1-15-15 Okamoto, Setagaya-ku, Tokyo

beneficiaryinterests
Trust

A38

Route Tachikawa

3-7-6 Nishikicho, Tachikawa-shi, Tokyo

beneficiaryinterests
Trust

A39

Shibuya-Honmachi Mansion

2-35-2 Honmachi, Shibuya-ku, Tokyo

beneficiaryinterests
Trust

A40

City Heights Kinuta

4-13-15 Kinuta, Setagaya-ku, Tokyo

beneficiaryinterests
Trust

A41

Acseeds Tower KawaguchiNamiki

2-5-13 Namiki, Kawaguchi-shi, Saitama

beneficiaryinterests
Trust

A42

Capital Heights Kagurazaka

71-1 Enokicho, Shinjuku-ku, Tokyo

beneficiaryinterests
Trust

A43

College Square Machida

3-4-4 Nakamachi, Machida-shi, Tokyo

beneficiaryinterests
Trust

A44

Belair Meguro

1-2-15 Meguro, Meguro-ku, Tokyo
beneficiary31

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A45

Wacore Tsunashima I

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

beneficiary

907.46512539

815.77564

526

2,040.27

444

525

871.35530

467

3,364.00

3,060

2,367

4,032.70

3,810

3,085

4,310.77

2,380

1,879

1,987.88

1,740

1,354

1,197.19

1,050

975

1,627.13

1,040

827

interests
Trust

A46

Foros Nakamurabashi

1-6-6 Koyama, Nerima-ku, Tokyo

beneficiaryinterests
Trust

A47

Growth Maison Kaijin

5-29-51 Kaijin, Funabashi-shi, Chiba

beneficiaryinterests
Trust

A48

College Square Machiya

7-3-1 Arakawa, Arakawa-ku, Tokyo

beneficiaryinterests
Trust

A51

City House Tokyo Shinbashi

6-19-1 Shinbashi, Minato-ku, Tokyo

beneficiaryinterests
Trust

A52

Winbell Kagurazaka

6-15 Shin-Ogawacho,
Tokyo

Shinjuku-ku,

beneficiaryinterests
Trust

A53

Nishiwaseda Cresent
Mansion3-18-9Tokyo

Nishi-Waseda,

Shinjuku-ku,

beneficiaryinterests
Trust

A54

Lexington Square
Akebonobashi

3-8 Yochomachi, Shinjuku-ku, Tokyo

beneficiaryinterests
Trust

A56

Casa Eremitaggio

1-14-15 Nakane, Meguro-ku, Tokyo

beneficiaryinterests

A59

Towa City Coop ShinotsukaII

5-49-7 Higashi-Ikebukuro, Toshima-ku,
Tokyo

32

Trust
beneficiary

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A61

Bichsel Musashiseki

1-22-7
Tokyo

Sekimachi-Kita,

Nerima-ku,

beneficiary

1,220.24

695

555

1,969.45

1,140

877

3,426.36

1,350

1,027

1,929.59545

394

1,528.58450296

705.75257

235

1,430.64

1,110

882

784.74581

454

4,460.56

1,180

1,015

7,794.91

7,780

6,599

interests
Trust
A62

Lexel Mansion Ueno
Matsugaya

3-10-2 Matsugaya, Taito-ku, Tokyo

beneficiaryinterests
Trust

A63

Towa City Coop Sengencho

4-338-2 Sengencho, Nishi-ku, Yokohama-shi, Kanagawa

beneficiaryinterests
Trust

A64

Royal Park Omachi

2-11-10 Omachi, Aoba-ku, Sendai-shi,
Miyagibeneficiaryinterests
Trust

A65

Lexington Square
Haginomachi

1-15-16 Haginomachi, Miyagino-ku,
Sendai-shi, Miyagi

beneficiaryinterests
Trust

A66

Visconti Kakuozan

2-44
Otanacho,
Nagoya-shi, Aichi

Chikusa-ku,

beneficiaryinterests
Trust

A71

Lexington Square Daitabashi

1-33-18 Izumi, Suginami-ku, Tokyo

beneficiaryinterests
Trust

A72

Lexington Square Honjo
Azumabashi

4-20-6 Higashikomagata, Sumida-ku,
Tokyobeneficiaryinterests
Trust

A73

AMS TOWER Minami 6-Jo

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

beneficiaryinterests
Trust

A75

Spacia Ebisu

3-6-22 Higashi, Shibuya-ku, Tokyo
beneficiary

33

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A76

Neo Prominence

3-21-5 Shimo, Kita-ku, Tokyo

beneficiary

3,574.70

1,860

1,635

2,773.71

1,410

1,217

2,310.49

1,070

936

1,933.80784

649

1,955.40

770

636

898.70701

605

1,731.68

712

586

1,634.60

723

577

1,554.03

666

574

2,670.66

684

556

interests
Trust
A77

Invoice Shin-Kobe
Residence

3-3-8 Ikutacho Chuo-ku, Kobe-shi,
Hyogo

beneficiaryinterests
Trust

A78

Cosmo Court Motomachi

3-12-20 Motomachi Dori Chuo-ku,
Kobe-shi, Hyogo

beneficiaryinterests
Trust

A79

Revest Honjin

2-13 Torii Dori Nakamura-ku, Nagoya-shi, Aichi

beneficiaryinterests
Trust

A80

Revest Matsubara

3-13-12 Matsubara Naka-ku ,Nagoya-shi, Aichi

beneficiaryinterests
Trust

A81

Sun Terrace Minami
Ikebukuro2-22-6 Minami Ikebukuro, Toshima-ku,
Tokyobeneficiaryinterests
Trust

A82

Alba Noritake Shinmachi

3-6-8 Noritake Shinmachi, Nishi-ku,
Nagoya-shi, Aichi

beneficiaryinterests
Trust

A83

Revest Meieki Minami

2-13-33 Meiekiminami, Nakamura-ku,
Nagoya-shi, Aichi

beneficiaryinterests
Trust

A84

Revest Heian

2-13-17 Heian, Kita-ku, Nagoya-shi,
Aichi

beneficiaryinterests

A85

Vendir Hamaotsu Ekimae

1-2-15 Hama Otsu, Otsu-shi, Shiga

Trust
beneficiary34

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A86

Salvo Sala

2-6-21 Shimanouchi Chuo-ku, Osaka-shi, Osaka

beneficiary

1,428.12623

526

701.92613

529

1,185.50568

506

1,433.35

594

491

765.18564

444

1,029.05

500

433

530.60487

403

1,020.86

428

363

789.12432

361

992.76418

346

interests
Trust
A87

Excellente Kagurazaka

128-1
Tokyo

Yamabukicho

Shinjuku-ku,

beneficiaryinterests
Trust

A88

Luna Court Edobori

3-4-11 Edobori, Nishi-ku, Osaka-shi,Osakabeneficiaryinterests
Trust

A89

Winntage Kobe Motomachi

7-2-2 Motomachi Dori, Chuo-ku, Kobe-shi, Hyogo

beneficiaryinterests
Trust

A90

Queen's Court Fukuzumi

1-3-10 Fukuzumi, Koto-ku, Tokyo

beneficiaryinterests

A91

Corp Higashinotoin

380-1 Kawaranomachi, Higashinotoin
Dori Nijo Kudaru, Chukyo-ku, Kyoto-shi, Kyoto

Trustbeneficiaryinterests
Trust

A92

Belair Oimachi

5-14-17 Higashi Oi, Shinagawa-ku,
Tokyobeneficiaryinterests
Trust

A93

Siete Minami-Tsukaguchi

3-18 Minami Tsukaguchimachi,
Amagasaki-shi, Hyogo

beneficiaryinterests

A94

Prime Life Sannomiya
IsogamiKoen

Trust
4-3-23 Isogamidori ,Chuo-ku, Kobe-shi Hyogo

beneficiaryinterests

A95

HERMITAGE NANBA
WEST

4-10-3 Sakuragawa Naniwa-ku, Osaka-shi, Osaka

35

Trust
beneficiary

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)interests
Trust
A96

Century Park Shinkawa
1-bankan

4-1-2 Shinkawamachi Minato-ku,
Nagoya-shi, Aichi

beneficiary

1,477.62418

327

794.80327

320974.81381

304

761.18337

287

5,230.18

1,860

1,880

2,940.20

1,700

1,761

2,048.28

1,690

1,697

119,803.11

68,59260,305

1,451.54

1,030

1,224

526.43524

707

6,033.58

4,030

4,730

interests
Trust
A97

West Avenue

1-5-17 Nishi, Kunitachi-shi, Tokyo

beneficiaryinterests
Trust

A98

Little River Honmachibashi

1-34 Honmachibashi Chuo-ku, Osaka-shi, Osaka

beneficiaryinterests
Trust

A99

Prime Life Mikage

2-25-11 Mikage Tsukamachi Higashi
Nada-ku, Kobe-shi, Hyogo

beneficiaryinterests

A100

City Court Kitaichijo

1-6-3 Kitaichijohigashi, Chuo-ku,
Sapporo-shi, Hokkaido

Trustbeneficiaryinterestst
Trust

A101

Lieto Court
Mukojima

5-45-10 Mukojima, Sumida-ku, Tokyo

beneficiaryinterestst
Trust

A102

Lieto Court
Nishi-Ojima

2-41-14 Oshima, Koto-ku, Tokyo

beneficiaryinterestst

Subtotal
Trust
B8

Kindai Kagakusha Building

2-7-15, Ichigaya Tamachi, Shinjuku-ku,
Tokyobeneficiaryinterestst

B9

Shinjuku Island

6-5-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoReal estate
Trust

B14

Lexington Plaza
Nishigotanda

5-2-4 Nishigotanda,
Tokyo

Shinagawa-ku,

beneficiaryinterests

36

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
Trust
B15

Cross Square NAKANO

5-24-18 Nakano, Nakano-ku, Tokyo

beneficiary

2,145.00

945

1,082

2,178.41677

742

8,419.15

3,500

3,131

18,440.58

2,330

2,002

39,194.69

13,036

13,621

81.04

112

100

81.04

112

100

2,585.72

5,000

2,864

3,327.38

5,330

2,581

7,241.51

13,4005,904

6,232.30

6,200

4,829

2,456.36

5,640

4,783

interests
Trust
B16

Ohki Aoba Building

9-7 Futsukacho, Aoba-ku, Sendai-shi,
Miyagibeneficiaryinterests
Trust

B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku, Sendai-shi,
Miyagibeneficiaryinterests

B18

AEON TOWN Sukagawa

105
Furukawa,
Fukushima

Sukagawa-shi,

Trustbeneficiaryinterests

Subtotal
C1

Times Kanda-Sudacho4th

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

Real estate

Subtotal
Trust
D1

Hotel MyStays Kanda

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

beneficiaryinterestst
Trust

D2

Hotel MyStays Asakusa

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

beneficiaryinterests

52,
D3

Hotel MyStays Kyoto-shijo

Kasaboko-cho,Aburanokoji,

Shijyo-dori,Higashiiru,

Trust

Shimogyo, beneficiaryinterests

Kyoto-shi, Kyoto

Trust
D4

MyStays Shin-Urayasu
Conference Center

2-1-4, Akemi, Urayasu-shi, Chiba

beneficiaryinterests
Trust

D5

Hotel MyStays Maihama

3-5-1, Tekko-dori, Urayasu-shi, Chiba

beneficiaryinterests

37

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
Trust
D6

Hotel Vista Premio Dojima

2-4-1, Sonezakishinchi, Kita-ku, Osaka

beneficiary

9,445.32

5,560

3,760

9,064.71

4,920

2,857

4,188.83

7,010

2,471

7,379.43

3,310

2,068

1,719.29

3,760

1,867

3,412.71

3,330

1,545

2,953.38

1,760

1,365

1,150.76

2,680

1,303

1,134.52

1,670

1,231

2,539.75

1,840

1,237

interests
Trust
D7

Hotel MyStays
Nagoya-Sakae

2-23-22,

Higashisakura,Naka-ku,
beneficiary

Nagoya, Aichi
interests
Trust

D8

Hotel MyStays
Sakaisuji-Honmachi

1-4-8, Awaji-machi, Chuo-ku, Osaka-shi,
beneficiary
Osakainterests
Trust

D9

Hotel MyStays Yokohama

4-81,

Sueyoshi-cho,Naka-ku,
beneficiary

Yokohama-shi, Kanagawa
interests
Trust
5-43-7, Higashi-Nippori, Arakawa-ku,
D10

Hotel MyStays Nippori

beneficiaryTokyo
interests
Trust

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

3-14-20,

Haruyoshi,

Chuo-ku,
beneficiary

Fukuoka-shi, Fukuoka
interests
Trust
3-26,

D12

Shin-Ogawa-cho,Shinjuku-ku,

Flexstay Inn Iidabashi

beneficiaryTokyo
interests
Trust

D13

Hotel MyStays Ueno
Inaricho

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

beneficiaryinterests
Trust

1-22-19, Kitashinagawa, Shinagawa-ku,
D14

Flexstay Inn Shinagawa

beneficiaryTokyo
interests
Trust

D15

Flexstay Inn Tokiwadai

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

beneficiaryinterests

38

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)Trust
D16

Flexstay Inn Sugamo

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

beneficiary

2,089.86

2,120

1,173

4,956.66

2,960

1,180

2,673.64

999

745

770.56709

585

391.49341

284

6,568.51

8,870

8,266

7,961.26

2,890

2,762

1,754.06

2,180

2,117

5,400.16

8,150

7,759

4,349.67

6,680

5,576

interests
Trust
D17

Hotel MyStays Otemae

1-3-2, Tokui-cho, Chuo-ku, Osaka-shi,
beneficiary
Osakainterests
Trust

D18

Flexstay Inn Kiyosumi
Shirakawa

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

beneficiaryinterests
Trust

D19

Flexstay Inn Nakanobu P1

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

beneficiaryinterests
Trust

D20

Flexstay Inn Nakanobu P2

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

beneficiaryinterests
Trust

D21

APA Hotel Yokohama
Kannai3-37-2,

Sumiyoshi-cho,Naka-ku,
beneficiary

Yokohama-shi, Kanagawa
interests
Trust
26-17,

D22

Motomachi,

Hakodate-shi,

Hotel Nets Hakodate

beneficiary
Hokkaido
interests
Trust

D23

Flexstay Inn Shirogane

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

beneficiaryinterests

5-1-13, Haneda, Ota-Ku, Tokyo
D24

Hotel MyStays Haneda

Trustbeneficiaryinterests

6-32-1, Kameido, Koto-Ku, Tokyo
D25

Hotel MyStays Kameido P1

Trust
beneficiaryinterests

39

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)5-5-13, Ueno, Taito-Ku, Tokyo
D26

Hotel MyStays Ueno
Iriyaguchi

Trust
beneficiary

2,247.92

4,290

3,808

2,793.99

4,480

3,726

3,559.81

2,260

2,186

1,403.89

1,720

1,627

1,714.53

1,330

1,279

11,733.23

1,250

1,242

1,190.57

1,010

977

3,305.64

1,030

979

725.60933

906

3,932.93

5,220

5,055

interests
6-7-8, Kameido, Koto-Ku, Tokyo
D27

Hotel MyStays Kameido P2

Trust
beneficiaryinterests

1-23,
D28

Hotel Vista Shimizu

Masagomachi,

Shimizu-Ku,

Shizuoka-shi, Sizuoka

Trustbeneficiaryinterests

5-16-4, Shinbashi, Minato-Ku, Tokyo
D29

Super Hotel Shinbashi/
Karasumoriguchi

Trust
beneficiaryinterests

2-10-2, nakajujo, Kita-Ku, Tokyo
D30

Flexstay Inn Higashi-Jujo

Trustbeneficiaryinterests

2-4-1,
D31

Hotel MyStays Utsunomiya

Higashishukugo,

Utsunomiya,Tochigi

Trust
beneficiaryinterests

1-13-2,
D32

Flexstay Inn
Kawasaki-Kaizuka

Kaizuka,

Kawasaki-Ku,

Kanagawa

Trustbeneficiaryinterests

1-3-2,
D33

Comfort Hotel Toyama

Takara-machi,

Toyama-shi,ToyamaTrustbeneficiaryinterests

15-9,
D34

Flexstay Inn
Kawasaki-Ogawacho

Ogawa-cho,

Kawasaki-Ku,

Kawasaki, Kanagawa

Trustbeneficiaryinterests

8-6, Sakaecho, Nerima-ku, Tokyo

D35

Flexstay Inn Ekoda

Trust
beneficiaryinterests

40

Appraisal Valueas of December Book Value
Name of Property

Type of

Leasable Area

Ownership(m2)

Location (Note 1)

31, 2014(millions of(millions of yen)

yen)

(Note 2)
2-21-9, Akebono, Tachikawa-shi, Tokyo

D36

Super Hotel Tokyo-JR
Tachikawa Kitaguchi

Trust
beneficiary

1,832.97

1,210

1,173

1,279.16

1,170

1,134

137,468.08

133,212

95,223

296,546.92

214,952

169,251

interests
Trust

7-9-14, Ueno, Taito-ku, Tokyo

D37

Super Hotel JR
Ueno-iriyaguchi

beneficiaryinterests

Total(Note 1) “Location” is, in principle, based on the indicated address (jyukyohyoji), except that if the
jyukyohyoji system has not been implemented for such property, the location is based on
the land number (banchi).
(Note 2) “Appraisal Value” is the value appraised or researched as of the end of the fiscal period in
accordance with the Articles of Incorporation of INV and the regulations of the Investment
Trust Association, Japan by Asset Research and Development Inc., the Japan Real Estate
Institute, Morii Appraisal & Investment Consulting Inc., Tanizawa Sogo Appraisal Co.,
Ltd. or Daiwa Real Estate Appraisal Co., Ltd.
Occupancy trends for the leasing operations of the real estate and accounts of assets and liabilities
within assets in trust that the Investment Corporation holds are as below.
24th Fiscal Period

25th Fiscal Period(January 1, 2015 to June 30, 2015)(July 1, 2015 to December 31, 2015)

Number ofName of Property

Tenants (atend ofperiod)(unit)

Nisshin Palacestage
A26
Daitabashi
Nisshin Palacestage HigashiA27
Nagasaki

Number of
RentalRevenue
Tenants (at(during
Ratio ofRate
period)Rentalend of(at end of (Thousands Revenue (%)
period) (%)
of yen)period)(Note 1)
(Note 2)
(unit)
Occupancy

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

1

96.9

36,844

0.7

1

96.1

39,112

0.6

1

94.9

44,729

0.9

1

96.8

44,131

0.6

A28 Growth Maison Gotanda

1

100.0

27,343

0.5

1

100.0

27,351

0.4

A29 Growth Maison Kameido

1

95.4

32,304

0.6

1

97.0

33,2930.5

A30 Emerald House

1

100.0

49,104

1.0

1

97.9

42,204

0.6

A31 Harmonie Ochanomizu

1

88.3

39,126

0.8

1

90.8

37,8370.6

41

24th Fiscal Period

25th Fiscal Period(January 1, 2015 to June 30, 2015)(July 1, 2015 to December 31, 2015)

Number ofName of Property

Tenants (atend ofperiod)(unit)A32 Suncrest Shakujii-Koen

Number of
RentalRevenue
Tenants (at(during
Ratio ofRate
period)Rentalend of(at end of (Thousands Revenue (%)
period) (%)
of yen)period)(Note 1)
(Note 2)
(unit)
Occupancy

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

1

97.4

37,730

0.8

1

97.0

36,341

0.5

1

97.0

35,451

0.7

1

97.2

35,887

0.5

1

100.0

32,607

0.7

1

100.0

30,622

0.4

A35 Grand Rire Kameido

1

100.0

26,619

0.5

1

100.0

26,6190.4

A36 Growth Maison Ikebukuro

1

88.1

22,670

0.5

1

97.6

25,305

0.4

A37 Growth Maison Yoga

1

94.9

21,633

0.4

1

94.8

22,1640.3

A38 Route Tachikawa

1

96.6

21,399

0.4

1

96.6

21,787

0.3

A39 Shibuya-Honmachi Mansion

1

89.9

19,356

0.4

1

96.4

20,262

0.3

A40 City Heights Kinuta

1

94.6

17,773

0.4

1

89.2

17,1630.3

Acseeds Tower KawaguchiNamiki

1

100.0

25,008

0.5

1

86.0

24,6090.4

A42 Capital Heights Kagurazaka

1

94.4

18,625

0.4

1

97.2

18,605

0.3

A43 College Square Machida

1

100.0

17,876

0.4

1

100.0

17,4840.3

A44 Belair Meguro

1

100.0

15,914

0.3

1

96.0

16,591

0.2

A45 Wacore Tsunashima I

1

98.0

18,004

0.4

1

91.9

18,1890.3

A46 Foros Nakamurabashi

1

90.5

17,217

0.3

1

100.0

17,872

0.3

A47 Growth Maison Kaijin

1

87.3

21,007

0.4

1

96.7

22,3570.3

A48 College Square Machiya

1

100.0

14,706

0.3

1

100.0

14,706

0.2

A51 City House Tokyo Shinbashi

1

97.1

90,344

1.8

1

98.6

91,326

1.3

A52 Winbell Kagurazaka

1

95.4

104,468

2.1

1

98.3

102,344

1.5

1

92.1

70,977

1.4

1

97.5

70,527

1.0

1

93.5

48,581

1.0

1

98.8

49,358

0.7

A56 Casa Eremitaggio

1

84.2

29,901

0.6

1

100.0

30,488

0.4

A59 Towa City Coop Shinotsuka II

1

96.3

34,194

0.7

1

96.4

33,6970.5

A61 Bichsel Musashiseki

1

98.5

24,505

0.5

1

97.1

24,1290.4

Lexel Mansion Ueno
Matsugaya

1

100.0

35,737

0.7

1

100.0

34,3530.5

A63 Towa City Coop Sengencho

1

83.0

52,944

1.1

1

93.1

54,3480.8

Growth Maison
Shin-Yokohama
Belle Face
A34
Ueno-Okachimachi
A33

A41

Nishiwaseda Cresent
MansionLexington Square
A54
Akebonobashi
A53

A62

42

24th Fiscal Period

25th Fiscal Period(January 1, 2015 to June 30, 2015)(July 1, 2015 to December 31, 2015)

Number ofName of Property

Tenants (atend ofperiod)(unit)

A64 Royal Park Omachi

Number of
RentalRevenue
Tenants (at(during
Ratio ofRate
period)Rentalend of(at end of (Thousands Revenue (%)
period) (%)
of yen)period)(Note 1)
(Note 2)
(unit)
Occupancy

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

1

98.3

24,471

0.5

1

98.3

25,904

0.4

Lexington Square
Haginomachi

1

92.4

18,432

0.4

1

92.6

17,373

0.3

A66 Visconti Kakuozan

1

78.3

9,818

0.2

1

86.3

9,620

0.1

A71 Lexington Square Daitabashi

1

93.0

30,511

0.6

1

90.1

31,704

0.5

Lexington Square Honjo
Azumabashi

1

91.1

18,066

0.4

1

97.0

17,6790.3

A73 AMS TOWER Minami 6-Jo

1

83.3

44,973

0.9

1

94.3

46,125

0.7

A75 Spacia Ebisu

1

93.6

197,748

4.0

1

95.6

203,351

3.0

A76 Neo Prominence

1

94.9

62,980

1.3

1

96.6

63,0020.9

A77 Invoice Shin-Kobe Residence

1

88.4

46,339

0.9

1

94.9

46,814

0.7

A78 Cosmo Court Motomachi

1

96.2

34,751

0.7

1

96.2

37,0980.5

A79 Revest Honjin

1

100.0

31,672

0.6

1

98.8

31,9450.5

A80 Revest Matsubara

1

89.5

28,540

0.6

1

93.1

28,756

0.4

Sun Terrace Minami
Ikebukuro1

97.4

22,455

0.5

1

97.4

22,6300.3

A82 Alba Noritake Shinmachi

1

98.6

26,107

0.5

1

91.0

25,9990.4

A83 Revest Meieki Minami

1

100.0

26,205

0.5

1

100.0

26,282

0.4

A84 Revest Heian

1

92.0

23,843

0.5

1

100.0

23,2970.3

A85 Vendir Hamaotsu Ekimae

1

88.4

30,148

0.6

1

88.4

30,247

0.4

A86 Salvo Sala

1

94.4

23,373

0.5

1

98.0

24,735

0.4

A87 Excellente Kagurazaka

1

97.1

17,033

0.3

1

91.2

18,2650.3

A88 Luna Court Edobori

1

94.0

20,055

0.4

1

96.0

20,341

0.3

A89 Winntage Kobe Motomachi

1

94.7

22,706

0.5

1

85.9

22,271

0.3

A90 Queen's Court Fukuzumi

1

100.0

16,720

0.3

1

95.9

17,033

0.2

A91 Corp Higashinotoin

1

95.7

17,199

0.3

1

97.9

17,9450.3

A92 Belair Oimachi

1

96.1

15,641

0.3

1

96.4

14,8570.2

A93 Siete Minami-Tsukaguchi

1

92.6

16,097

0.3

1

95.0

16,431

0.2

Prime Life Sannomiya
A94 Isogami
Koen

1

93.8

14,106

0.3

1

100.0

14,943

0.2

A65

A72

A81

43

24th Fiscal Period

25th Fiscal Period(January 1, 2015 to June 30, 2015)(July 1, 2015 to December 31, 2015)

Number ofName of Property

Tenants (atend ofperiod)(unit)HERMITAGE NANBA
WEST
Century Park Shinkawa
A96
1-bankan
A95

Number of
RentalRevenue
Tenants (at(during
Ratio ofRate
period)Rentalend of(at end of (Thousands Revenue (%)
period) (%)
of yen)period)(Note 1)
(Note 2)
(unit)
Occupancy

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

1

95.7

15,596

0.3

1

91.2

15,790

0.2

1

91.0

17,322

0.3

1

91.0

16,411

0.2

A97 West Avenue

1

75.0

11,025

0.2

1

80.0

10,3660.2

A98 Little River Honmachibashi

1

96.9

13,698

0.3

1

100.0

13,3320.2

A99 Prime Life Mikage

1

86.8

11,367

0.2

1

100.0

12,003

0.2

－

－

－

－

1

96.6

59,410

0.9

－

－

－

－

1

97.6

47,395

0.7

－

－

－

－

1

100.0

44,6940.7

Subtotal

63

93.7

2,013,728

40.5

66

95.9

2,175,138

31.7

B8 Kindai Kagakusha Building

1

100.0

38,607

0.8

1

100.0

38,4330.6

B9 Shinjuku Island

1

100.0

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

B14 Lexington Plaza Nishigotanda

8

100.0

141,089

2.8

7

100.0

150,219

2.2

B15 Cross Square NAKANO

1

70.8

32,032

0.6

1

79.1

36,3110.5

B16 Ohki Aoba Building

1

100.0

40,168

0.8

1

100.0

39,4940.6

B17 Lexington Plaza Hachiman

1

100.0

165,200

3.3

1

100.0

166,052

2.4

B18 AEON TOWN Sukagawa

1

100.0

141,739

2.8

1

100.0

142,027

2.1

Subtotal

14

98.4

576,034

11.6

13

98.9

589,738

8.6

C1 Times Kanda-Sudacho4th

1

100.0

2,700

0.1

1

100.0

2,700

0.0

Subtotal

1

100.0

2,700

0.1

1

100.0

2,700

0.0

1

100.0

111,428

2.2

1

100.0

117,428

1.7

1

100.0

126,298

2.5

1

100.0

142,768

2.1

D3 Hotel MyStays Kyoto-shijo

1

100.0

282,858

5.7

1

100.0

370,894

5.4

MyStays Shin-Urayasu
Conference Center

1

100.0

164,208

3.3

1

100.0

217,548

3.2

D5 Hotel MyStays Maihama

1

100.0

142,571

2.9

1

100.0

188,788

2.8

D6 Hotel Vista Premio Dojima

1

100.0

187,248

3.8

1

100.0

216,812

3.2

Hotel MyStays
D7
Nagoya-Sakae

1

100.0

155,746

3.1

1

100.0

201,397

2.9

A10City Court Kitaichijo (Note 4)
0
A10 Lieto Court Mukojima (Note
1 4)
A10 Lieto Court Nishi-Ojima (Note
2 4)

D1
D2

D4

Hotel MyStays Kanda
Hotel MyStays Asakusa

4424th Fiscal Period

25th Fiscal Period(January 1, 2015 to June 30, 2015)(July 1, 2015 to December 31, 2015)

Number ofName of Property

Tenants (atend ofperiod)(unit)

Number of
RentalRevenue
Tenants (at(during
Ratio ofRate
period)Rentalend of(at end of (Thousands Revenue (%)
period) (%)
of yen)period)(Note 1)
(Note 2)
(unit)
Occupancy

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

Hotel MyStays
Sakaisuji-Honmachi

1

100.0

163,179

3.3

1

100.0

240,538

3.5

D9 Hotel MyStays Yokohama

1

100.0

107,111

2.2

1

100.0

134,323

2.0

D10 Hotel MyStays Nippori

1

100.0

81,080

1.6

1

100.0

83,977

1.2

Hotel MyStays
D11
Fukuoka-Tenjin-Minami

1

100.0

95,816

1.9

1

100.0

125,043

1.8

D12 Flexstay Inn Iidabashi

1

100.0

54,096

1.1

1

100.0

59,1530.9

Hotel MyStays Ueno
Inaricho

1

100.0

57,552

1.2

1

100.0

61,4880.9

D14 Flexstay Inn Shinagawa

1

100.0

52,213

1.0

1

100.0

56,956

0.8

D15 Flexstay Inn Tokiwadai

1

100.0

62,141

1.2

1

100.0

69,464

1.0

D16 Flexstay Inn Sugamo

1

100.0

57,339

1.2

1

100.0

57,4050.8

D17 Hotel MyStays Otemae

1

100.0

79,292

1.6

1

100.0

121,301

1.8

Flexstay Inn Kiyosumi
Shirakawa

1

100.0

36,131

0.7

1

100.0

43,2690.6

D19 Flexstay Inn Nakanobu P1

1

100.0

23,094

0.5

1

100.0

24,491

0.4

D20 Flexstay Inn Nakanobu P2

1

100.0

11,989

0.2

1

100.0

13,1000.2

APA Hotel Yokohama
Kannai1

100.0

189,256

3.8

1

100.0

236,234

3.4

D22 Hotel Nets Hakodate

1

100.0

89,046

1.8

1

100.0

124,347

1.8

D23 Flexstay Inn Shirogane

1

100.0

52,591

1.1

1

100.0

57,114

0.8

－

－

－

－

1

100.0

204,721

3.0

－

－

－

－

1

100.0

182,201

2.7

－

－

－

－

1

100.0

121,374

1.8

－

－

－

－

1

100.0

125,072

1.8

－

－

－

－

1

100.0

81,760

1.2

－

－

－

－

1

100.0

36,303

0.5

－

－

－

－

1

100.0

45,317

0.7

－

－

－

－

1

100.0

110,292

1.6

－

－

－

－

1

100.0

35,764

0.5

－

－

－

－

1

100.0

33,030

0.5

D8

D13

D18

D21

Hotel MyStays Haneda (Note4)
Hotel MyStays KameidoP1
D25(Note 4)
Hotel MyStays Ueno
D26
Iriyaguchi (Note 4)
Hotel MyStays KameidoP2
D27(Note 4)
D24

D28 Hotel Vista Shimizu (Note 4)
Super Hotel
D29 Shinbashi/Karasumoriguchi(Note 5)Flexstay Inn Higashi-Jujo
D30(Note 4)
Hotel MyStays Utsunomiya
D31(Note 4)Flexstay Inn
D32
Kawasaki-Kaizuka (Note 4)
Comfort Hotel Toyama (Note
D33
4)

45

24th Fiscal Period

25th Fiscal Period(January 1, 2015 to June 30, 2015)(July 1, 2015 to December 31, 2015)

Number ofName of Property

Tenants (atend ofperiod)(unit)

Number of
RentalRevenue
Tenants (at(during
Ratio ofRate
period)Rentalend of(at end of (Thousands Revenue (%)
period) (%)
of yen)period)(Note 1)
(Note 2)
(unit)
Occupancy

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

Flexstay Inn
D34 Kawasaki-Ogawacho (Note
4)

－

－

－

－

1

100.0

31,266

0.5

D35 Flexstay Inn Ekoda (Note 5)

－

－

－

－

1

100.0

84,916

1.2

－

－

－

－

1

100.0

21,704

0.3

－

－

－

－

1

100.0

18,6230.3

Subtotal

23

100.0

2,382,297

47.9

37

100.0

4,096,198

59.7

Total

101

96.9

4,974,760

100.0

117

98.2

6,863,775

100.0Super Hotel Tokyo-JR
D36 Tachikawa Kitaguchi (Note5)
Super Hotel JR
D37
Ueno-iriyaguchi (Note 5)(Note 1) “Occupancy Rate” is computed by dividing the leased area by leasable area, and isrounded to one decimal place.
(Note 2) “Rental Revenue (during period)” indicates each property’s leasing operation revenues
during the fiscal period, and has been rounded down to the nearest thousand yen.
(Note 3) Undisclosed due to inability to gain approval from the property tenant for document
disclosure.
(Note 4) Since the property was acquired as of July 16, 2015, the calculation period of the rental
revenue of the relevant property for the Reporting Period was set for the period
commenced on July 16, 2015 and ended on December 31, 2015.
(Note 5) Since the property was acquired as of August 28, 2015, the calculation period of the rental
revenue of the relevant property for the Reporting Period was set for the period
commenced on August 28, 2015 and ended on December 31, 2015.

4

Status of Size and Market Value of Trading Assets

No relevant items

5

Status of Other Assets

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

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

investments in specified assets that are significant investment targets for INV outside of the above 3.

6Asset Holdings Outside of Japan or the Region

46

There are no relevant items outside of Japan or the region.

Capital expenditures for properties held by INV

1Schedule for capital expenditures

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

Location

Payment for

PurposeAdvance
Implementation

Total

the Fiscal
Payments
Period

D1

A53
A62

B14

B17

2

Hotel

MyStays

Chiyoda-ku,

Renovation work on
guest

rooms,theFrom January 2016

Kanda

Tokyo

Nishiwaseda

Shinjuku-ku,

Outer wall repair From January 2016

Cresent Mansion

Tokyo

work

Lexel

Taito-ku,

Outer wall repair From January 2016

Ueno Matsugaya

Tokyo

work

Lexington

Shinagawa-ku,

MansionPlaza

Nishigotanda
Lexington
Hachiman

Tokyo
Plaza

Sendai-shi,
Miyagifront desk, etc.

to June 2016
to June 2016

Electricalequipment

repairwork
Asphalt renewal
work

to June 2016

onparking lots

rooftop

From January 2016
to June 2016
From January 2016
to June 2016

125,000――

47,000――37,000――25,000――15,500――Capital expenditures for the fiscal period ended December 31, 2014

The principal construction constituting capital expenditures for the real estate assets for the fiscal
period ended June 30, 2015 is as follows.

Capital expenditures for the fiscal period was 171,320

thousand yen, and together with 24,408 thousand yen of repair cost included in this fiscal period’s
expenses, construction work totaling 195,729 thousand yen was implemented.

47

Name of Property

Nisshin
A26

Palacestage
Daitabashi

A32
A32
D6

Suginami-ku,

Nerima-ku,

Shakujii-Koen

Tokyo

Suncrest

Nerima-ku,

Replacing

Shakujii-Koen

Tokyo

generator installations

Hotel Vista Premio

Osaka-shi,

DojimaOsaka
MyStays

Yokohama

Implementation

From July 2015 to

15,912

December 2015

emergency power From July 2015 to
From July 2015 to

2,950

December 2015

Replacing a storage battery for the
direct-current

8,486

December 2015

Bathroom work

, Kanagawa

5,586

December 2015

Rooftop waterproofing work

Yokohama-shi

yen)

From July 2015 to

Replacing intercom equipment

Tokyo

Payment (Thousands ofTime of

PurposeSuncrest

Hotel
D9

Location

power

supplyFrom July 2015 tosystem4,190

December 2015

176,709

Other construction

213,834

Total

3

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

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

Fiscal period

21st Fiscal

22nd Fiscal

23rd Fiscal

24th Fiscal

25th Fiscal

PeriodPeriodPeriodPeriodPeriodFrom July 1, 2013 From January 1, From July 1, 2014 From January 1,
to December 31, 2014 to June 30, to December 31,
2013

Reserved funds at beginning of
periodAmount reserved (Note)
Amount reversed (Note)

2014

2014

2015 to June 30,
2015

From July 1,2015 toDecember 31,
2015

571,543524,730

579,682

738,365

852,699

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

165,271

199,177

268,495

283,147

352,490

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

212,084

144,225

109,812

168,813

222,439thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

48

Fiscal period
Amount carried over for next
fiscal period(Note)

21st Fiscal

22nd Fiscal

23rd Fiscal

24th Fiscal

25th Fiscal

PeriodPeriodPeriodPeriodPeriod524,730

579,682

738,365

852,699

982,750thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

The amount reserved for the relevant fiscal period includes the reserves for acquired
properties, and the amount reversed includes the reserves for disposed properties.

49

Overview of Liabilities and Expenses

1

Statement of Operating Expenses(Thousands of yen)

24th Fiscal Period

25th Fiscal Period

Jan. 1, 2015 to Jun. 30, 2015

Jul. 1, 2015 to Dec. 31, 2015(a) Asset management fees

180,000

180,000(b) Asset custodian fees

6,342

6,794

(c) Administrative services fees

22,05525,170(d) Directors’ remuneration

4,800

4,800

(e) Other operating expenses

116,590

99,736

329,789

316,501

Item

Total
2

Borrowing Conditions

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

Balance at Start Balance at End

AverageBorrowingof Reportingof Reporting

Interest

Repayment

Payment

Date

PeriodPeriodRate

Date

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

yen)

yen)

1)

Type

LenderPurpose Notes

Sumitomo Mitsui Banking

Unsecur－

Corporation

360,000ed /Short-term(Note 3)
The Bank of Tokyo-Mitsubishi

Jul. 16, 2015

0.330

Debt

－

360,000

Mizuho Bank, Ltd.

－

360,000

Subtotal－

1,080,000

12,000,000－

12,000,000－

UFJ, Ltd.

(Note 2) with noMay 16, 2016
(Note 4)guarantee

Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
Long-term UFJ, Ltd.
Jul. 17, 2014

Debt

Secured
0.930

Mizuho Bank, Ltd.

12,000,000－

Shinsei Bank, Limited.

6,500,000－

Citibank Japan Ltd.

6,500,000－

Jul. 14, 2017 (Note 5) (Note 2)/ withnoguarantee50Sumitomo Mitsui Trust &Banking Co., Ltd.
Resona Bank, Limited..

5,000,000－

2,100,000－

1,357,000－

1,357,000－

1,357,000－

Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.

Secured/ withFeb. 6, 2015

Shinsei Bank, Limited.

650,000－

0.930

Feb. 6, 2018 (Note 5) (Note 2)

noguarant

Citibank Japan Ltd.

650,000－

470,000－

400,000－－

5,992,000－

5,992,000

Mizuho Bank, Ltd.

－5,992,000

Shinsei Bank, Limited.

－

3,330,000

ee

Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited.
Sumitomo

Mitsui

Banking

Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

UnsecurJul. 16, 2015

ed /
0.530

Citibank Japan Ltd－

Jul. 16, 2018 (Note 4) (Note 2) with noguarant

3,000,000

ee
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
Mitsubishi

UFJ

Trust

Mitsui

2,670,000－

1,335,000－

668,000－

5,992,000

andBanking Corporation
Sumitomo－

Banking

Corporation

Unsecur

The Bank of Tokyo-Mitsubishi－

5,992,000

Mizuho Bank, Ltd.

－5,992,000

Shinsei Bank, Limited.

－

3,330,000

UFJ, Ltd.

Jul. 16, 2015

ed /
0.630

Jul. 16, 2019 (Note 4) (Note 2) with noguarant51

eeCitibank Japan Ltd－

3,000,000－

2,670,000－

1,335,000－

668,000－

5,992,000－

5,992,000

Mizuho Bank, Ltd.

－5,992,000

Shinsei Bank, Limited.

－

3,330,000

Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
Mitsubishi

UFJ

Trust

and

Banking Corporation
Sumitomo

Mitsui

Banking

Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

UnsecurJul. 16, 2015

ed /
0.730

Citibank Japan Ltd－

Jul. 16, 2020 (Note 4) (Note 2) with noguarant

3,000,000

ee
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
Mitsubishi

UFJ

Trust

－

2,670,000－

1,335,000－

668,000

andBanking Corporation

UnsecurMizuho Bank, Ltded /Aug. 28,－2015

3,682,000

0.630

Aug. 28, 2019 (Note 4) (Note 2) with noguarant
ee

SubtotalLong-term

90,619,000

2,700,000

－

1.900

Mar. 31, 2018

2,860,000

－

1.900

Mar. 31, 2019

SecuredMitsubishi UFJ Trust and
Sep. 28.

Debt in trust Banking Corporation

62,341,000(Note 5) (Note 2)
2012

1,830,000

－

1.900

Mar. 31, 2020

2,570,000

－

1.900

Mar. 31, 2019

Subtotal

9,960,000

－

Total

72,301,000

91,699,000(Note 6)

/ withnoguarant
ee(Note 1) Average interest rate is the daily weighted average number of the period according to thenumber of days, and is rounded to three decimal place.
(Note 2) The funds raised through borrowings are mainly used to acquire real estate properties ortrust beneficiary interests and to prepay the borrowings.

52

(Note 3) INV repaid the portion of the principal (JPY 321 million) accompanied with the receipt ofconsumption tax refund on November 30, 2015.
(Note 4) The balance at the end of the period will be repaid in full of the repayment date
(Note 5) INV prepaid the balance of all secured borrowing at the end of the period on July 16,
2015.
(Note 6) Mitsubishi UFJ Trust and Banking Corporation is the trustee of the REIT of which theInvestment Corporation is the beneficiary, and has borrowed funds on Sep. 28, 2012 fromPrudential Mortgage Asset Holdings 1 Japan Investment Limited Partnership of Prudential
Financial Inc. Group. The Investment Corporation received said loan (after deduction ofreserves) as grant of trust principal of said REIT from Mitsubishi UFJ Trust and Banking
Corporation on the same date.
3

Investment Corporation Bonds

Nothing applicable.

4

Short-Term Investment Corporation Bonds

Nothing applicable.

5

Investment Unit Options

Nothing applicable.

53

Buying and Selling for the Fiscal Period Ended June 30, 2015

1

Buying and Selling, etc. of Real Estate and Asset-Backed Securities, etc. andInfrastructure Assets and Infrastructure Related-Assets

Acquisition
Name of Property
Acquisition Date

Acquisition Price(Thousands of yen)

A100

City Court KitaichijoJul. 16, 2015

1,782,000

A101

Lieto Court Mukojima

Jul. 16, 2015

1,683,000

A102

Lieto Court Nishi-Ojima

Jul. 16, 2015

1,634,000

D24

Hotel MyStays Haneda

Jul. 16, 2015

7,801,000

D25

Hotel MyStays Kameido P1

Jul. 16, 2015

5,594,000

D26

Hotel MyStays Ueno Iriyaguchi

Jul. 16, 2015

3,821,000

D27

Hotel MyStays Kameido P2

Jul. 16, 2015

3,742,000

D28

Hotel Vista Shimizu

Jul. 16, 2015

2,198,000

D29Super Hotel Shinbashi/ Karasumoriguchi

Jul. 16, 2015

1,624,000

D30

Flexstay Inn Higashi-Jujo

Jul. 16, 2015

1,277,000

D31

Hotel MyStays UtsunomiyJul. 16, 2015

1,237,000

D32

Flexstay Inn Kawasaki-Kaizuka

Jul. 16, 2015

980,000

D33

Comfort Hotel Toyama

Jul. 16, 2015

979,000

D34

Flexstay Inn Kawasaki-Ogawacho

Jul. 16, 2015

906,000

D35

Flexstay Inn Ekoda

Aug. 28, 2015

5,069,000

Aug. 28, 2015

1,170,000

Aug. 28, 2015

1,130,000

D36

Super

Hotel

Tokyo-JRTachikawa

Kitaguchi
D37

Super Hotel JR Ueno-iriyaguchi
Total(Note)

42,627,000

Acquisition price do not include various costs (brokerage commissions, taxes and otherpublic charges) required for acquisition or transfer of the property, and indicate thepurchase and sale price of the property as described in the the trust beneficiary purchaseagreement.

54

2

Buying and Selling, etc. of Other Assets

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

3

Survey of Prices, etc. of Specified Assets

Real Estate Transactions
Acquisition /
DisposalSpecified Transaction
Assets Type
Date

Name of Property

D24 Hotel MyStays Haneda

7,801,000

7,880,000

D25

Hotel MyStays Kameido
P1

5,594,000

5,650,000

D26

Hotel MyStays Ueno
Iriyaguchi

3,821,000

3,860,000

D27

Hotel MyStays Kameido
P2

3,742,000

3,780,000

2,198,000

2,220,000

1,624,000

1,640,000

1,277,000

1,290,000

1,237,000

1,250,000

980,000

990,000

D33 Comfort Hotel Toyama

979,000

989,000

Flexstay Inn KawasakiOgawacho

906,000

915,000

A100 City Court Kitaichijo

1,782,000

1,800,000

A101 Lieto Court Mukojima

1,683,000

1,700,000

A102 Lieto Court Nishi-Ojima

1,634,000

1,650,000

D35 Flexstay Inn Ekoda

5,069,000

5,120,000

1,170,000

1,180,000

1,130,000

1,140,000

D28 Hotel Vista Shimizu
D29

Super Hotel Shinbashi/
Karasumoriguchi

D30 Flexstay Inn Higashi-Jujo

Acquisition

Acquisition / orReal Estate
Disposal Price Appraisal Value(Thousands of (Thousands of
yen)
yen)

D31

Hotel MyStays
Utsunomiya

D32

Flexstay Inn KawasakiKaizuka

D34Jul. 16,2015
trust
beneficiaryinterests

D36

Super Hotel Tokyo-JR
Tachikawa Kitaguchi

D37

Super
Hotel
Ueno-iriyaguchi

Aug. 28,
2015

JR

Name of Appraiser

Japan Real Estate
Institute

May 1, 2015

Aug. 10,2015
Daiwa Real EstateAppraisal Co., Ltd.

(Note 1) Acquisition price do not include various costs (brokerage commissions, taxes and otherpublic charges) required for acquisition of the property, and indicate the purchase and sale

55

Date of
Appraisal

Jul. 31, 2015
Jul. 31, 2015

price of the property as described in the the trust beneficiary purchase agreement.
(Note 2) The real estate appraisal described above is conducted by applying “Real Estate Appraisal
Standard Section 3: appraisals concerning prices of real estate subject to securitization.”
4

Transactions with Interested Parties(1)

Transactions

Nothing applicable.
(2)

Commissions Paid

Nothing applicable.

5

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

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

Financial Condition

1

Assets, Liabilities, Principal, and Profit and Loss

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

2

Changes in the Calculation Method of Depreciation Expenses

Nothing applicable.

3

Changes in the Evaluation Method of Real Estate, etc. and Infrastructure Assets, etc.

Nothing applicable.

56

4

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

Nothing applicable.

Other

1

Notice(1) General Meeting of Unitholders
INV’s General Meeting of Unitholders was held on December 18, 2015.

The summary of thematters approved at the General Meeting of Unitholders are as follows.
AgendaProposal No. 1

PartialSummary
Amendment

Articles of Incorporation

to1. With the consent of the asset managementcompany, the asset management fees for theperiod from January 2013 to December 2015
have been reduced. INV has further obtained
the consent of the asset management company toreduce the amount of asset management fees forthe period from January 2016 to December 2016
to the amount which is lower than the amountapplicable if such reduction were not made, butwhich is higher than the amount applied in 2015,
so that the amount of asset management fees
become appropriate, considering the expansionof INV's asset scale, profit level and otherfactors resulting from its internal and external
growth.
Accordingly, INV amended thestandards concerning the amount and payment
for the asset management fees for the period
from January 2016 to December 2016. Suchamendment has taken effect as of January 1,
2016.
2. INV deleted the eligibility requirements for theapplication of being applied for special taxation
treatments on INV, which is no longer required
for INV, under the amendment to the Ordinancefor Enforcement of the Act on Special Measures
Concerning Taxation (Ordinance of the Ministryof Finance No. 15 of 1957, as amended).
Furthermore, in line with the amendment to theOrdinance on Accounting at Investment
Corporations (Cabinet Office Ordinance No. 47
of 2006, as amended) and the Act on Special

57

Proposal No. 2

Appointment of One (1)Measures Concerning Taxation (Act No. 26 of
1957, as amended), etc., in relation to the issueof potential taxation due to discrepancies
between taxation and accounting for INV, therelevant provisions have been amended to allow
for the distribution of cash in excess of earnings
to avoid being subject to taxation such as
corporate tax, etc. on INV.
In addition,necessary additions or deletions of provisions,revision and clarification of expressions, andother changes in the wording of INV's Articles ofIncorporation are made.
Naoki Fukuda was appointed.

Executive Director
Proposal No. 3

Appointment of One (1)Substitute

Christopher Reed was appointed.

Executive

Director
Proposal No. 4

Appointment of Two (2)Supervisory Directors

Takashi Takahashi and Hiroyuki Fujimoto wereappointed.

(2) Board of Directors of Investment Corporation
There are no matters regarding execution and amendment of the principal agreement approved by
INV’s Board of Directors in the Reporting Period.

2

Disclosure of companies owing real estate overseas

Nothing applicable.

3

Disclosure of real estate owned by companies owing real estate overseas

Nothing applicable.

58

4

Risk Factors

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

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



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



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

Because of our repositioning of our portfolio in 2014 to include hotels, which include leaseterms that contain a variable rent structure, our results of operations will be inherently
more volatile and not comparable to previous fiscal periods, and we may not be able toeffectively manage our hotel portfolio due to our limited operating history in the hotelbusiness, especially with respect to full service hotels, resort hotels and other non-limited
service hotels that we may decide to acquire in greater numbers in the future.



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

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

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



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

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



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



The majority of our hotels are leased to MyStays Hotel Management, which is owned byFortress Group-managed funds, and subject to the risk of default under its hotel leaseagreements.



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



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



Master leases may give rise to certain risks.



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



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



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

59

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



Defects relating to our properties may adversely affect our financial condition and resultsof operations.



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



The environmental assessments of our properties made prior to our ownership may nothave uncovered all environmental liabilities, and Japanese laws subject property owners tostrict environmental liabilities.



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



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

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



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



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



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



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

Management and Governance Risks


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



There are potential conflicts of interest between us and certain Fortress Group affiliates or
Fortress Group-related companies including the Asset Manager, MyStays HotelManagement and Naqua Hotels & Resorts Management



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

Unitholders have limited control over our policies.



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



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

Taxation Risks


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



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

60

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



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

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

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

Legal and Regulatory Risks

5

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



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



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



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



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



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

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

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



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



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



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



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

Other

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

61

II.

Balance Sheet(Unit: thousands of yen)
Fiscal Period ended
December 31, 2015(as of December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(as of June 30, 2015)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Accrued revenue
Accounts receivables
Prepaid expenses
Consumption tax receivable
OthersAllowance for doubtful accounts※1※1

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation※1

Buildings, net
Equipment
Accumulated depreciation※1

Equipment, net
Building improvements
Accumulated depreciation※1

Building improvements, net
Land
Buildings in trust
Accumulated depreciation※1※1

Buildings in trust, net
Equipment in trust
Accumulated depreciation※1

Equipment in trust, net
Building improvements in trust
Accumulated depreciation※1

Building improvements in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation※1

Tools, furniture and fixtures in trust, net
Land in trust※1

Total property, plant and equipment
Intangible assets
Land leasehold rights in trust
OthersTotal intangible assets
Total investment and other assets

62

2,691,921
4,822,622
190
637,813260,394
316,4130(2,436)

7,885,398
5,933,582

8,726,919

16,055,955

85,914(8,866)85,914
9,407)

77,04876,50738,862(19,774)

38,862
20,593)

19,117

18,2682,779(1,270)2,779
1,335)

124
1,069,352
241,931928,02535
2,494)

1,509

1,443

711,834
49,657,804(3,726,114)

711,834
65,882,282
4,510,729)

45,931,690

61,371,553

12,748,349(2,551,810)

15,364,500
3,006,062)

10,196,539

12,358,438

323,594(128,347)

327,632
138,040)

195,246

189,591

302,397(124,376)

401,404
150,073)

178,020

251,331

69,963,823

88,435,785

127,274,829

163,414,753-

5,836,789

45

15

45

5,836,804

Fiscal Period ended
June 30, 2015 (reference)(as of June 30, 2015)(Unit: thousands of yen)
Fiscal Period ended
December 31, 2015(as of December 31, 2015)
39,518533,40938,429

Guarantee deposits
Long-term prepaid expenses
Others10,035
251,697
36,218

Total investments and other assets

297,951

611,357

127,572,826

169,862,915

136,299,746

185,918,871

Total non-current assets
Total assets(Unit: thousands of yen)
Fiscal Period ended
December 31, 2015(as of December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(as of June 30, 2015)
Liabilities
Current liabilities
Accounts payable
Short-term debts
Current portion of long-term debts
Current portion of long-term debts in trust
Accrued liabilities
Accrued expenses
Accrued income taxes
Advances received
Deposits received

168,742

73,119,517

1,895,146

1,420,014
28,66390,619,000
1,617,867
28,663※1※1

Total current liabilities
Non-current liabilities
Long-term debts
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Unappropriated retained earnings/loss
Total surplus
Total unitholders’ equity
Total net assets

62,341,000
9,960,000
43,752
174,711542
420,660
10,108

136,766
1,080,000
47,597
134,010564
473,164
23,043※2

Total liabilities and net assets

63

1,448,677

92,265,530

74,568,195

94,160,677

53,096,413

82,465,438

6,264,432
2,370,704

6,264,432
3,028,323

8,635,136

9,292,755

61,731,550

91,758,194

61,731,550

91,758,194

136,299,746

185,918,871

III.

Statement of Income

Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
Operating revenues
Rental revenues(Unit: thousands of yen)
Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

4,974,760

6,863,775

4,974,760

6,863,775

1,834,039

2,178,165

180,000
4,800
6,342
22,055467
116,123

180,000
4,800
6,794
25,17058
99,677

2,163,828
2,810,931

2,494,667
4,369,108

1,242
3,098
307

814
936
454

Total non-operating revenues

4,648

2,205

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

379,341
140,328-

296,892
982,261
138,866

Total non-operating expenses

519,670

1,418,020

Ordinary income

2,295,909

2,953,293

Net income before taxes

2,295,909

2,953,293※1

Total operating revenues
Operating expenses
Property related expenses※1

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

Corporate tax, etc.

605

605

Total corporate tax, etc.

605

605

2,295,304

2,952,688

75,39975,6342,370,704

3,028,323

Net income
Retained earnings at the beginning of the period
Unappropriated retained earnings/Loss at the end of theperiod64

IV.

Statement of Unitholders’ Equity

Fiscal Period ended June 30, 2015 (reference) (from Janualy 1, 2015 to June 30, 2015)(Unit: thousands of yen)
Unitholders’ Equity
Surplus
Total Unitholders’EquityTotal Net Assets

Capital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

2,031,546

8,295,97861,392,392

61,392,392

Distributions from surplus

1,956,146)(1,956,146)(1,956,146)(1,956,146)

Net income

2,295,304

2,295,304

2,295,304

2,295,304

Unitholders’ Capital

Balance at the beginningof the period

53,096,413

Total Surplus

Change during the period

Total change during theperiodBalance at the end of theperiod--339,157

339,157

339,157

339,157

53,096,413

6,264,432

2,370,704

8,635,136

61,731,550

61,731,550

Fiscal Period ended December 31, 2015 (from July 1, 2015 to December 31, 2015)(Unit: thousands of yen)
Unitholders’ Equity
SurplusCapital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

2,370,704

Unitholders’ Capital

Balance at the beginningof the period

53,096,413

Total Surplus

8,635,136

Total Unitholders’EquityTotal Net Assets

61,731,550

61,731,550

29,369,025

29,369,025

Change during the period
Issuanceofinvestment units
Distributions
surplusnew29,369,025

from

Net income
Total change during theperiodBalance at the end of theperiod2,295,069)

2,295,069)

2,295,069)

2,295,069)

2,952,688

2,952,688

2,952,688

2,952,688

29,369,025－

657,618

657,618

30,026,643

30,026,643

82,465,438

6,264,432

3,028,323

9,292,755

91,758,194

91,758,194

65

V.

Notes

[Notes Concerning Significant Accounting Policies]

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

2. Method of calculatingallowances

3. Revenue and expense
recognition

Fiscal Period ended
June 30, 2015 (reference)(from Janualy 1, 2015 toJune 30, 2015)(a) Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plantand equipment are as follows.
Buildings
77 years
Equipment
8-24 years
Building improvements
7-18 years
Buildings in trust
2-66 years
Equipment in trust
2-32 years
Building improvements in trust
4-55 years
Tools, furniture and fixtures in trust 2-15 years(b)Intangible assets
The straight-line method is used.
(c) Long-term prepaid expenses
The straight-line method is used.
Allowance for doubtful accounts
To reserve for losses on doubtful accounts,
allowances are provided for normal
receivables using a rate determined based on
past bad debt experiences, and specificallowances are provided for accounts with apossibility of default based on the estimatedamounts considered to be uncollectible byconsidering the collectability of accounts on
an individual basis.
Accounting treatment of property taxes andother taxes
With respect to property taxes, city planningtaxes and depreciable asset taxes, of the tax
amount assessed and determined, the amountcorresponding to the relevant fiscal period is
accounted for as property related expenses.
Of the amounts paid to the seller for
acquisitions of real estate, the amountequivalent to property taxes is capitalized aspart of the acquisition cost of the real estate ortrust beneficiary interests in real estate insteadof being charged as expense. The amountequivalent to property taxes that was included
as part of the acquisition of real estate during
this fiscal period is JPY 42,497 thousand.

66

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)(a) Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plantand equipment are as follows.
Buildings
77 years
Equipment
8-24 years
Building improvements
7-18 years
Buildings in trust
2-67 years
Equipment in trust
2-32 years
Building improvements in trust
4-55 years
Tools, furniture and fixtures in trust 2-15 years(b)Intangible assets
The straight-line method is used.
(c) Long-term prepaid expenses
The straight-line method is used.
Allowance for doubtful accounts
To reserve for losses on doubtful accounts,
allowances are provided for normal
receivables using a rate determined based on
past bad debt experiences, and specificallowances are provided for accounts with apossibility of default based on the estimatedamounts considered to be uncollectible byconsidering the collectability of accounts on
an individual basis.
Accounting treatment of property taxes andother taxes
With respect to property taxes, city planningtaxes and depreciable asset taxes, of the tax
amount assessed and determined, the amountcorresponding to the relevant fiscal period is
accounted for as property related expenses.
Of the amounts paid to the seller for
acquisitions of real estate, the amountequivalent to property taxes is capitalized aspart of the acquisition cost of the real estate ortrust beneficiary interests in real estate insteadof being charged as expense. The amountequivalent to property taxes that was included
as part of the acquisition of real estate during
this fiscal period is JPY 59,232 thousand.

Fiscal Period ended
Fiscal Period ended
June 30, 2015 (reference)
December 31, 2015
(from Janualy 1, 2015 to(from July 1, 2015 to
Item
June 30, 2015)
December 31, 2015)
4. Other significant matters (1)Accounting treatment of trust beneficiary (1)Accounting treatment of trust beneficiary
which constitute the basis
interests in real estateinterests in real estatefor preparation of
As to trust beneficiary interests in real
As to trust beneficiary interests in real
financial statements
estate, all accounts of assets and liabilities estate, all accounts of assets and liabilities
within assets in trust, as well as all income within assets in trust, as well as all income
generated and expenses incurred from assets in generated and expenses incurred from assets intrust, are recorded in the relevant balance trust, are recorded in the relevant balance
sheets and income statement accounts.
sheets and income statement accounts. Of
Of such items, the following significant such items, the following significant trust
trust assets and liabilities are shown separately assets and liabilities are shown separately onon the balance sheet.
the balance sheet.
(a) Cash and deposits in trust(a) Cash and deposits in trust(b)Buildings in trust(b)Buildings in trust
Equipment in trust
Equipment in trust
Building improvements in trust
Building improvements in trust
Tools, furniture and fixtures in trust
Tools, furniture and fixtures in trust
Land in trust
Land in trust(c) Tenant leasehold and security deposits in (c) Land leasehold rights in trust
trust(d)Tenant leasehold and security deposits in(d)Current portion of long-term debts in trust
trustLong-term debts in trust(e) Current portion of long-term debts in trust
By Period(2)Accounting treatment of deferred charges
Investment unit issuance expenses
The full amount is recorded as expense at
the time of expenditure.

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

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

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

67

[Notes to the Balance Sheets]
Fiscal Period ended
June 30, 2015 (reference)(as of June 30, 2015)※1. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.
Cash and deposits
Cash and deposits in trust

Fiscal Period ended
December 31, 2015(as of December 31, 2015)-

312,245 thousand yen
4,822,622 thousand yen

Buildings

77,048 thousand yen

Equipment

19,117 thousand yen

Building improvements

1,509 thousand yen
711,834 thousand yen

Land
Buildings in trust

45,931,690 thousand yen

Equipment in trust

10,196,539 thousand yen

Building improvements in trust

195,246 thousand yen

Tools, furniture and fixtures in trust

178,020 thousand yen
69,963,823 thousand yen

Land in trust
Total

132,409,697 thousandyen

Liabilities with collateral are as follows.
Current portion of long-term debts 62,341,000 thousand yen
Current portion of long-term debts
in trust

9,960,000 thousand yen

Total

72,301,000 thousand yen※2. Minimum net assets as required by Article 67, Paragraph 4 ※2. Minimum net assets as required by Article 67, Paragraph 4of the Act on Investment Trusts and Investmentof the Act on Investment Trusts and Investment
Corporations
Corporations
50,000 thousand yen
50,000 thousand yen

68[Notes to Statement of Income]Fiscal Period ended
Fiscal Period ended
June 30, 2015 (reference)
December 31, 2015
(from Janualy 1, 2015 to(from July 1, 2015 toJune 30, 2015)
December 31, 2015)※1. Rental revenues and property related expenses※1. Rental revenues and property related expenses(Unit: thousands of yen)
(Unit: thousands of yen)
A. Real property rental revenues
A. Real property rental revenues
Rental revenues
Rental revenues(Rent/common area charges)

4,738,713(Other revenues)

236,047

Total rental revenues

4,974,760

B. Real property related expenses(Rent/common area charges)(Other revenues)
Total rental revenues

6,652,619
211,156
6,863,775

B. Real property related expenses

Property related expenses

Property related expenses(Maintenance costs)

468,393(Maintenance costs)

472,597(Taxes and public dues)

201,860(Taxes and public dues)

250,268(Insurance expenses)

7,061(Insurance expenses)

9,934(Depreciation expenses)

986,765(Depreciation expenses)(Other expenses)

169,957(Other expenses)

1,834,039

Total real property related expenses
C. Operating income from rental revenues

Total real property related expenses

1,275,714
169,651
2,178,165

C. Operating income from rental revenues(A-B)

3,140,721(A-B)

4,685,610[Notes to Statement of Unitholders’ Equity]
Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
Number of investment units authorized and number ofinvestment units issued and outstanding

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
Number of investment units authorized and number ofinvestment units issued and outstanding

Number of investment units authorized

10,000,000 units

Number of investment units authorized

10,000,000 units

Number of investment units issued andoutstanding

2,668,686 units

Number of investment units issued andoutstanding

3,193,686 units

69

[Notes Related to Tax Accounting]

Fiscal Period ended
June 30, 2015 (reference)

Fiscal Period ended
December 31, 2015

1. Significant components of deferred tax assets and liabilities 1. Significant components of deferred tax assets and liabilities(Deferred tax assets - current assets)(Deferred tax assets - current assets)
Enterprise tax payable
489 thousand yen Enterprise tax payable
489 thousand yen
Accounts receivable (merger)
Allowance for doubtful accounts

186 thousand yen

Accounts receivable (merger)

186 thousand yen

787 thousand yen

Allowance for doubtful accounts

806 thousand yen

Subtotal

1,463 thousand yen

Subtotal

1,482 thousand yen

Valuation allowance

1,463 thousand yen

Valuation allowance

1,482 thousand yen

Total- thousand yen

Total- thousand yen(Net deferred tax assets - current)- thousand yen(Net deferred tax assets - current)- thousand yen(Deferred tax assets - non-current assets)
Buildings and other (merger)
746,394 thousand yen(Deferred tax assets - non-current assets)
Buildings and other (merger)
735,158 thousand yen

Land (merger)

2,129,657 thousand yen

Land (merger)

2,129,657 thousand yen

Long-term accrued expenses

7,329,595 thousand yen

Long-term accrued expenses

7,329,595 thousand yen

Subtotal

10,205,647 thousand yen

Subtotal

10,194,411 thousand yen

Valuation allowance

10,205,647 thousand yen

Valuation allowance

10,194,411 thousand yen

Total- thousand yen

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

2. Significant difference between statutory tax rate and theeffective tax rate
Statutory tax rate
34.15%

2. Significant difference between statutory tax rate and theeffective tax rate
Statutory tax rate
32.31%

Deductible cash distributions

Deductible cash distributions(31.93)%33.80)%

Provision of reserve for reduction entry

0.63%

Provision of reserve for reduction entry(0.38)%

Others

(0.95)%

Others0.02%

Effective tax rate

0.03%

Effective tax rate

0.02%

3. Revision of the amounts of deferred tax assets and liabilities
due to changes in rate of any Corporation Tax, etc.
As a result of the promulgation of the “Act on Partial
Revision of the Income Tax Act, etc.” (Act No. 9 of 2015) on
March 31, 2015, the statutory tax rate used to calculatedeferred tax assets and liabilities will be changed to 32.31%
for temporary differences, etc. which are expected to beeliminated in the fiscal period starting after July 1, 2015.
This change in tax rate has no effect on the amounts ofdeferred tax assets and liabilities, and deferred income taxes.

70-

[Notes Related to Lease Contracts]
Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
Operating lease transactions(as lessee)(Unit: thousands of yen)
Due within one year
Remaining lease
payments

Remaining lease
payments

112,249

Due after one year

2,168,039

Total

2,280,288(as lessor)

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
Operating lease transactions(as lessee)(Unit: thousands of yen)
Remaining lease
payments

Due within one year

112,249

Due after one year

2,111,914

Total

2,224,164(Unit: thousands of yen) (as lessor)
Due within one year

2,413,667

Due after one year

21,199,677

Total

23,613,345

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

3,657,829

Due after one year

31,055,536

Total

34,713,366[Notes Related to Financial Instruments]
Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
1. Status of financial instruments(1)Policy for financial instruments
INV principally conducts its operations throughinvestments in real estate and other specified assets to seek toensure stable income in the medium to long term.
The policy for raising funds is principally through issuing
new investment units or entering into debt.
Derivative transactions are to be entered into for the
purpose of hedging against the rate of future interest rateincreases, etc. and not for speculation. There are currently noderivative transactions that have been entered into.
Surplus funds are managed carefully after carefully taking
into account safety, liquidity, the interest rate environment
and financing.

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
1. Status of financial instruments(1)Policy for financial instruments
INV principally conducts its operations through investments
in real estate and other specified assets to seek to ensure stable
income in the medium to long term.
The policy for raising funds is principally through issuing
new investment units or entering into debt.
Derivative transactions are to be entered into for the purposeof hedging against the rate of future interest rate increases, etc.
and not for speculation. There are currently no derivativetransactions that have been entered into.
Surplus funds are managed carefully after carefully taking
into account safety, liquidity, the interest rate environment andfinancing.

(2)Nature and extent of risks arising from financial instruments (2)Nature and extent of risks arising from financial instruments
and risk management
and risk management
The funds raised through borrowings are mainly used to
The funds raised through borrowings are mainly used toacquire real estate properties or properties in trust (including acquire real estate properties or properties in trust (including
related acquisition costs) and for the repayment of existing related acquisition costs) and for the repayment of existing
debt. Liquidity risks relating to debt are managed by the debt. Liquidity risks relating to debt are managed by thefinance department of the Asset Manager by preparing and finance department of the Asset Manager by preparing andupdating plans for funds, and monitoring the covenants set updating plans for funds, and monitoring the covenants set
forth in loan agreements.
forth in loan agreements.
(3)Supplemental information regarding market value, etc. for (3)Supplemental information regarding market value, etc. forfinancial instruments
financial instruments
The fair value of financial instruments is based on quoted
The fair value of financial instruments is based on quoted
market prices if available. When quoted market prices are not market prices if available. When quoted market prices are notavailable, fair value is determined through a reasonable available, fair value is determined through a reasonable

71

Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
estimate. Since certain assumptions are used in estimating thefair value, different assumptions may result in the variance ofsuch value.

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
estimate. Since certain assumptions are used in estimating thefair value, different assumptions may result in the variance ofsuch value.

2. Estimated fair value of financial instruments
Book value, fair value and the difference between values asof June 30, 2015 are as follows.
(Unit: thousands of yen)

2. Estimated fair value of financial instruments
Book value, fair value and the difference between values asof December 31, 2015 are as follows.
(Unit: thousands of yen)Book Value Fair Value(1) Cash and deposits(2) Cash and deposits in trust
Total assets

2,691,92
1
4,822,62
2
7,514,543

DifferenceBook Value

Fair Value

Difference

2,691,921-(1) Cash and deposits

7,885,398

7,885,398-

4,822,622-(2) Cash and deposits in trust

5,933,582

5,933,582-

7,514,543-

Total assets

13,818,981

13,818,981-(3) Short-term debts

1,080,000

1,080,000-(4) Long-term debts

90,619,000-

90,619,000-

91,699,000

91,699,000-(3) Current portion of
long-term debts

62,341,000

62,341,000-(4) Long-term debts--

Total liabilities(5) Current portion of
long-term debts in trust

9,960,00

9,960,000-

Total liabilities

72,301,000

72,301,000-(Note 1) Methods to calculate fair values of financial (Note 1) Methods to calculate fair values of financial
instruments
instruments(1) Cash and deposits (2) Cash and deposits in trust(1) Cash and deposits(2) Cash and deposits in trust
Due to the short maturities, the book value of these(3) Short-term debts
instruments is deemed a reasonable approximation of the fairDue to the short maturities, the book value of thesevalue, and therefore, the book value is used as the fair value.
instruments is deemed a reasonable approximation of the fair(3)Current portion of long-term debts (4) Long-term debts
value, and therefore, the book value is used as the fair value.
(5) Current portion of long-term debts in trust(4) Long-term debts
The fair values of long-term debt with fixed interest rates
Long-term debt with floating interest rates reflecting
are determined based on the present value of contractual cash changes in market rates within a short term period are stated atflows discounted at current market interest rates which would their book value as their book values approximate their fair
be applicable to new debt with the same amount.
values.
Long-term debt with floating interest rates reflectingchanges in market rates within a short term period are statedat their book value as their book values approximate their fairvalues.
(Note 2) Financial instruments for which fair value is (Note 2) Financial instruments for which fair value isextremely difficult to value
extremely difficult to value(Unit: thousands of yen)
(Unit: thousands of yen)
Category

Book Value

Category

Tenant leasehold and28,663security deposits
Tenant leasehold and1,420,014
security deposits in trust
Tenant leasehold and security deposits and tenantleasehold and security deposits in trust have no observable
market price, and it is impracticable to reasonably estimate
their future cash flows because the repayment dates of those72

Book Value

Tenant leasehold and28,663security deposits
Tenant leasehold and1,617,867
security deposits in trust
Tenant leasehold and security deposits and tenantleasehold and security deposits in trust have no observable
market price, and it is impracticable to reasonably estimate
their future cash flows because the repayment dates of thoseFiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
deposits and the timing of the lessee’s exit from the property
are not certain. Thus, their fair value is not disclosed.

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
deposits and the timing of the lessee’s exit from the property
are not certain. Thus, their fair value is not disclosed.

(Note 3) Remaining schedule of monetary claims after the (Note 3) Remaining schedule of monetary claims after theclosing date of the fiscal period
closing date of the fiscal period
As of December 31, 2015

As of June 30, 2015

(Unit: thousands of yen)

(Unit: thousands of yen)
Due within
One Year

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

Cash and deposits

2,691,921--

Cash and deposits in trust

4,822,622

-

-

Total

7,514,543--

Due within
One Year

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

Cash and deposits

7,885,398--

Cash and deposits in trust

5,933,582

-

-

Total

13,818,981--

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

Due after Three Due after Four Due after Five
to Four Years to Five Years
Years
Cash and deposits

-

-

-

Cash and deposits in trust

-

-

-

Total

-

-

-

Cash and deposits

-

-

-

Cash and deposits in trust

-

-

-

Total

-

-

-

(Note 4)Redemption schedule of long-term debts and other(Note 4) Redemption schedule of long-term debts and otherinterest-bearing indebtedness after the closing date of theinterest-bearing indebtedness after the closing date offiscal period
the fiscal period
As of December 31, 2015

As of June 30, 2015

(Unit: thousands of yen)

(Unit: thousands of yen)
Current portion of
long-term debts
Current portion of
long-term debts in trust
Total

Due within
One Year

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

62,341,000--

9,960,000--

72,301,000--

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

-

-

-

-

-

-

-

-

-

73

Due within
One Year

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

Long-term debts

-

Total

-

-

28,979,000
28,979,000

Due after
Due after Four Due after Five
Three to Four
to Five Years
Years
Years
Long-term debts

32,661,000

28,979,000

-

Total

32,661,000

28,979,000-

[Notes Related to Rental Properties]
Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
INV owns residential properties and hotels as core assets
and owns other various properties including offices and retails
principally in the Tokyo area and major regional cities inorder to aim for the establishment of the portfolio which
focuses on both improvement of stability and growthpotential. The book value, amount changed during theperiod and balance at the end of the period are as follows.

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
INV owns residential properties and hotels as core assets
and owns other various properties including offices and retails
principally in the Tokyo area and major regional cities in orderto aim for the establishment of the portfolio which focuses onboth improvement of stability and growth potential. The
book value, amount changed during the period and balance atthe end of the period are as follows.

(Unit: thousands of yen)

(Unit: thousands of yen)Book Value

Use

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

Use

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

55,569,758(300,354)

55,269,403

62,209,000

Residential

55,269,403

5,036,303

60,305,706

68,592,000

Office8,551,609(36,906)

8,514,702

7,181,000

Office8,514,702(26,826)

8,487,876

7,206,000

Retail5,225,394(47,106)

5,178,288

5,820,000

Retail5,178,288(44,205)

5,134,083

5,830,000

Parking

100,823(1)

100,822

109,000

Parking

100,822(1)

100,821112,000

Hotel

45,296,007

12,915,605

58,211,612

71,555,000

Hotel

58,211,612

37,011,441

95,223,054

133,212,000

Total

114,743,593

12,531,236

127,274,829

146,874,000

Total

127,274,829

41,976,712

169,251,542

214,952,000(Note 1) Book value is the figure calculated by decreasing the (Note 1) Book value is the figure calculated by decreasing theamount of depreciation from acquisition price (including amount of depreciation from acquisition price (including
acquisition-related costs).
acquisition-related costs).
(Note 2) The major factor of the increase for the fiscal period (Note 2) The major factor of the increase for the fiscal period
ended June 30, 2015 was acquisition of new hotels and capital ended December 31, 2015 was acquisition of new residential
expenditures related to construction work.
properties and hotels and capital expenditures related to(Note 3) The major factor of the decrease was sale of senior construction work.
housing properties and depreciation.
(Note 3) The major factor of the decrease was sale of senior(Note 4) The fair value as of the end of the reporting period is housing properties and depreciation.
determined based on the appraisal value provided by Asset (Note 4) The fair value as of the end of the reporting period is
Research and Development Inc., Japan Real Estate Institute, determined based on the appraisal value provided by Asset
Morii Appraisal & Investment Consulting Inc. and Tanizawa Research and Development Inc., Japan Real Estate Institute,
Sogo Appraisal Co., Ltd.
Morii Appraisal & Investment Consulting Inc. and Tanizawa
Sogo Appraisal Co., Ltd.
For information related to profits and losses from rental
properties in the fiscal period ended June 30, 2015, please
For information related to profits and losses from rental
refer to “Notes to Statement of Income.”
properties in the fiscal period ended December 31, 2015,
please refer to “Notes to Statement of Income.”74

[Notes Related to Restriction on Asset Management]
Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
Nothing applicable.

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
Nothing applicable.

75

[Notes Related to Transactions with Related Parties]

Fiscal Period ended June 30, 2015 (reference) (from January 1, 2015 to June 30, 2015)

1

Interested parties of the Asset Manager

Classification

Interested partyof the AssetManager

Ratio of Voting
Rights Owned Type of Transaction
(%)

Name

Business or
Occupation

Zephyrus Tokutei Mokuteki
Kaisha(Note 3)

Investment
manage-mentbusiness-

Nishi Tokutei Mokuteki
Kaisha(Note 3)

Investment
manage-mentbusiness-

MyStays Hotel Management
Co., Ltd.
(Note 3)

Hotel business-Transaction
Amount(Thousands ofyen)(Note 1)

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

Account

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

2,792,000--

2,119,000--

1,760,999

Accounts
receivables

501,272(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on the Asset Manager’s internal rules
and manual regarding transactions with the sponsor company.
(Note 3) Zephyrus Tokutei Mokuteki Kaisha, Nishi Tokutei Mokuteki Kaisha, Shijodori Holding
Tokutei Mokuteki Kaisha, Danube Tokutei Mokuteki Kaisha, Nagahoribashi Holding
Tokutei Mokuteki Kaisha, Aki Tokutei Mokuteki Kaisha and MyStays Hotel Management
Co., Ltd. have no capital relationship with the Asset Manager to be disclosed. The
Tokutei Mokuteki Kaisha or the lessee and operator have received an anonymous
partnership investment or investment through funds that are managed by FIG, an affiliate
of Calliope. Accordingly, INV treats Zephyrus Tokutei Mokuteki Kaisha, Nishi Tokutei
Mokuteki Kaisha, Shijodori Holding Tokutei Mokuteki Kaisha, Danube Tokutei Mokuteki
Kaisha, Nagahoribashi Holding Tokutei Mokuteki Kaisha, Aki Tokutei Mokuteki Kaisha
and MyStays Hotel Management Co., Ltd. as the equivalent of interested party.
(Note 4) Calliope holds 609,942 units (holding ratio: 22.85%) of the issued investment units of INV.
(Note 5) The purchase of trust beneficiary interests pertains to following properties. The
transaction amount is the purchase price stated in the trust beneficiary purchase agreement,
in which other expenses on acquisition, property taxes, city planning taxes andconsumption taxes are not included.
Property
NumberD22

Hotel Nets Hakodate

D23

Flexstay Inn Shirogane

Purchase Price(Thousands of yen)
Zephyrus Tokutei Mokuteki Kaisha
2,792,000

Name of Property

Counterparty

Nishi Tokutei Mokuteki Kaisha
Total

2,119,000
4,911,00076

2

Asset Custody Companies

Classification

Name

Business or
Occupation

Ratio of
Voting Rights(%)

Type of Transaction

Sumitomo Mitsui
Banking andTrust Bank, Limited trust businessAccount

Balance at theEnd of the Period(Thousands ofyen)

Current portion of
long-term debts

5,470,000

Finance related fees

9,171 Prepaid expenses

39,318Interest expenses

24,918 Accrued expenses

139

Loan for long-term debts
Asset CustodyCompany

Transaction
Amount(Thousands ofyen)
470,000-(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on market conditions.

77

Fiscal Period ended December 31, 2015 (from July 1, 2015 to December 31, 2015)

1

Interested parties of the Asset Manager

Classification

Interested party of
the Asset Manager

Name

Business or
Occupation

Ratio of
Voting Rights
Owned
(%)

Skye Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Nishi Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Rannoch Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Wakusei Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Suisei Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Aki Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Zephyrus Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Investment
Godo Kaisha Baretta
manage-ment(Note 3)business--

MyStays HotelManagement
Co., Ltd.
(Note 3)

Hotel businessTransaction
Amount(Thousands ofyen)(Note 1)

Account

7,801,000--

14,405,000--

5,707,000--

2,198,000--

2,603,000--

1,277,000--

1,237,000--

Purchase of trust beneficiaryinterests in real estate(Note 2)
(Note 5)5,099,000--

Rental revenues

3,125,985

Accounts
receivables

Type of Transaction

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

Balance at the Endof the Period(Thousands ofyen) (Note 1)(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on the Asset Manager’s internal rules
and manual regarding transactions with the sponsor company.
(Note 3) Zephyrus Tokutei Mokuteki Kaisha, Nishi Tokutei Mokuteki Kaisha and MyStays HotelManagement Co., Ltd. have no capital relationship with the Asset Manager to be disclosed.
The Tokutei Mokuteki Kaisha or the lessee and operator have received an anonymous
partnership investment or investment through funds that are managed by FIG, an affiliate ofCalliope. Accordingly, INV treats Zephyrus Tokutei Mokuteki Kaisha, Nishi Tokutei
Mokuteki Kaisha and MyStays Hotel Management Co., Ltd. as the equivalent of interested
party.
(Note 4) Calliope holds 609,942 units (holding ratio: 19.09%) of the issued investment units of INV.
(Note 5) The purchase of trust beneficiary interests pertains to following properties. The transaction
amount is the purchase price stated in the trust beneficiary purchase agreement, in which
other expenses on acquisition, property taxes, city planning taxes and consumption taxes are
not included.

78

920,391

Property
NumberName of Property

Counterparty

A100

City Court Kitaichijo

Godo Kaisha Baretta

1,782,000

A101

Lieto Court Mukojima

Godo Kaisha Baretta

1,683,000

A102

Lieto Court Nishi-Ojima

Godo Kaisha Baretta

1,634,000

D24

Hotel MyStays Haneda

Skye Tokutei Mokuteki Kaisha

7,801,000

D25

Hotel MyStays Kameido P1

Nishi Tokutei Mokuteki Kaisha

5,594,000

D26

Hotel MyStays Ueno Iriyaguchi

Rannoch Tokutei Mokuteki
Kaisha3,821,000

D27

Hotel MyStays Kameido P2

Nishi Tokutei Mokuteki Kaisha

3,742,000

D28

Hotel Vista Shimizu

Wakusei Tokutei Mokuteki
Kaisha2,198,000

D29Super Hotel Shinbashi/
Karasumoriguchi

Suisei Tokutei Mokuteki Kaisha

1,624,000

D30

Flexstay Inn Higashi-Jujo

Aki Tokutei Mokuteki Kaisha

1,277,000

Purchase Price (Thousands of yen)

Zephyrus Tokutei Mokuteki
KaishaRannoch Tokutei Mokuteki
KaishaD31

Hotel MyStays Utsunomiya

D32

Flexstay Inn Kawasaki-Kaizuka

D33

Comfort Hotel Toyama

Suisei Tokutei Mokuteki Kaisha

979,000

D34

Flexstay Inn Kawasaki-Ogawacho

Rannoch Tokutei Mokuteki
Kaisha906,000

D35

Flexstay Inn Ekoda

Nishi Tokutei Mokuteki Kaisha

5,069,000

1,237,000
980,000

Total

240,327,000

Asset Custody Companies

Classification

Name

Business or
Occupation

Ratio of
Voting Rights(%)

Type of Transaction

Transaction
Amount(Thousands ofyen)

Loan for long-term debt

8,010,000

Long-term debt

8,010,000

5,470,000

Current portion of
long-term debts-

Prepaid expenses

18,186Long-term
Prepaid expenses

46,07725,318 Accrued expenses

276

Repayment of current
portion of long-term debts
Asset CustodyCompany

Sumitomo Mitsui
Banking andTrust Bank, Limited trust business

Finance related fees

Interest expenses

Account

Balance at theEnd of the Period(Thousands ofyen)

47,895(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balanceat the end of the period.
(Note 2) The terms and conditions have been determined based on market conditions.

79

[Notes Related to Per Unit Information]
Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Net assets per unit

23,132 yen

Net assets per unit

28,731 yen

Net income per unit

860 yen

Net income per unit

937 yen

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

Note.

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

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

Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)
Net income for the fiscal period (thousands ofyen)
Amounts not attributable to common unit holders(thousands of yen)
Net income attributable to common unit holders(thousands of yen)
Average number of investment units during theperiod (units)

2,295,304
2,295,304
2,668,686

80

Fiscal Period ended
December 31,, 2015
(from July 1, 2015 to
December 31, 2015)
Net income for the fiscal period (thousands ofyen)
Amounts not attributable to common unit holders(thousands of yen)
Net income attributable to common unit holders(thousands of yen)
Average number of investment units during theperiod (units)

2,952,688
2,952,688
3,149,936

[Notes Related to Significant Subsequent Events]

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
1. Issuance of new investment units

1. Borrowing of FundINV resolved at its meetings of the Board of Directors
held on June 25, 2015 and July 8, 2015 respectively to
conduct the issuance of new investment units andsecondary distribution of investment units. Payment for
the new investment units issued through the public
offering was completed on July 15, 2015, in accordancewith the following terms and conditions. In addition, withrespect to the issuance of new investment units throughthe third-party allotment in connection with theoverallotment secondary offering, the payment wascompleted on August 12, 2015. As a result, theunitholders’ equity of INV is JPY 82,465 million and thenumber of investment units issued and outstanding of
INV increased to 3,193,686(i) Issuance of new investment units through public
offering
NumberofNew: 500,000 units
Investment Units Issued
Domestic public offering: 211,250 units
Overseas offering: 288,750 units
Issue Price (Offer Price): JPY 57,817 per unit
Total Issue Price (Total: JPY 28,908,500,000
Offer Price)Amount Paid In (Issue: JPY 55,941 per unit
Value)
Total Amount Paid In: JPY 27,970,500,000(Total Issue Value): Wednesday, July 15,
Payment Date
2015

In order to raise a part of the funds to be used for theacquisition of trust beneficiary interests for the 5 hotel
properties and 1 residential property acquired on January
22, 2016 (see “2. Acquisition of Assets” below), INV
implemented the following borrowing on January 22,2016.

(ii) Secondary offering of investment units outside Japan
Number of Investment
Units Offered in the : 25,000 units
Secondary Offering
Offer Price: JPY 57,817 per unit
Total Offer Value: JPY 1,445,425,000: Wednesday, July 16,
Delivery Date
2015(iii) Secondary offering of investment units(overallotment secondary offering)Number of Investment
Units Offered in the: 25,000 units
Secondary Offering
Offer Price: JPY 55,941 per unit
Total Offer Value: JPY 1,398,525,000: Wednesday, August
Payment Date12, 2015: Mizuho Securities
AlloteeCo., Ltd81

Term Loan (B)LenderBorrowing amountInterest rate, etc.

Interest payment datePrincipal
repayment
methodBorrowing method
Borrowing date
Maturity date

: Sumitomo Mitsui Trust
Bank, Limited.,
Mitsubishi UFJ Trustand Banking
Corporation.
: JPY8,998 million: Base Rate (One-month
JPY TIBOR; however,
two-month JPY TIBOR
for the first interest
calculation period only)+ 0.20%, 0.40%,
0.60%: On (i) the last Japanesebusiness day of eachmonth before theprincipal maturity date,
beginning with February
29, 2015, and (ii) the
principal maturity date
: Lump-sum repayment: Unsecured / with noguarantee: January 22, 2016
: January 22, 2017,
January 22, 2019,
January 22, 2021

2. Acquisition of Assets
INV decided to acquire the following 6 properties (totalacquisition price of JPY 10,207 million) on January 20,
2016, and completed the acquisition of all of the 6
properties on January 22, 2016.
Property number: D38 Name of property: Hotel MyStays
Shinsaibashi
Acquisition Date
January 22, 2016
Acquisition Price (Note )JPY3,160 million
Location
Osaka-shi, Osaka
Construction Date
September 1984

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)

Category of Assets
2. Borrowing of Funds
In order to implement refinancing via unsecured
lower-interest borrowings for part of the funds to be used
for the acquisition of trust beneficiary interests for 11
hotel properties and 3 residential properties acquired on
July 16, 2015 (see “4. Acquisition of Assets” below) andall of the existing syndicate loans (New Syndicate Loan
(C), New Syndicate Loan (D)) and Prudential LPS Loan
B, INV implemented the following borrowing on July 16,
2015.
New Syndicate Loan (E)Lender:Sumitomo
Mitsui
Banking
Corporation,
The
Bank
of
Tokyo-Mitsubishi UFJ, Ltd., Mizuho
Bank, Ltd., Shinsei Bank, Limited,
Citibank Japan Ltd., Sumitomo
Mitsui Trust Bank, Limited, Resona
Bank, Limited and Mitsubishi UFJ
Trust and Banking Corporation

BorrowingamountInterest rate,
etc.
Interest
payment
date: JPY88,338 million

Principal
repayment
methodBorrowing
methodBorrowingdate
Maturity
date

Total Floor Area
Total Leasable Area

Property number: D39 Name of property: Comfort Hotel
Kurosaki
Acquisition Date
January 22, 2016
Acquisition Price (Note )JPY1,148 million
Location
Kitakyushu-shi,
Fukuoka
Construction Date
February 2009
Category of Assets
Trust BeneficiaryInterestSellerNavaro Tokutei
Mokuteki Kaisha
Total Floor Area
3,207.60m2
Total Leasable Area
3,207.60m2
Property number: D40 Name of property: Comfort Hotel
MaebashiAcquisition Date
January 22, 2016
Acquisition Price (Note )JPY1,128 million
Location
Maebashi-shi, Gunma
Construction Date
March 2009
Category of Assets
Trust BeneficiaryInterestSellerNavaro Tokutei
Mokuteki Kaisha
Total Floor Area
3,660.96m2
Total Leasable Area
3,660.96m2: Base Rate (One-month JPY TIBOR)+ 0.20%, 0.40%, 0.50%, 0.60%: On (1) the last Japanese business
day of each month before theprincipal maturity date, beginningwith July 31, 2015, and (2) the
principal maturity date
: Lump-sum repayment for eachindividual loan
: Unsecured / with no guarantee: July 16, 2015
: May 16, 2016, July 16, 2018, July16, 2019 and July 16, 2020

INV also intends to acquire trust beneficiary interests inreal estate for 3 hotel properties on August 28, 2015 (see
“4. Acquisition of Assets” below), and resolved at its
meeting of the Board of Directors held on August 21,
2015 to implement the following borrowing in order toprocure part of the funds for the acquisition of the trust
beneficiary interests.
Term Loan (A)LenderBorrowingamountInterest rate, etc.

SellerTrust BeneficiaryInterest
Aki Tokutei Mokuteki
Kaisha1,942.01m2
1,942.01m2: Mizuho Bank, Ltd.
: JPY3,682 million: Base Rate (One-month JPY
TIBOR; however, two-month
JPY TIBOR for the first interest
calculation period only) +82

Property number: D41 Name of property: Comfort Hotel
Tsubame-Sanjyo
Acquisition Date
January 22, 2016
Acquisition Price (Note )JPY1,010 million
Location
Sanjyo-shi, Niigata
Construction Date
June 2007
Category of Assets
Trust BeneficiaryInterestSellerNavaro Tokutei
Mokuteki Kaisha
Total Floor Area
3,099.90m2
Total Leasable Area
3,099.90m2
Property number: D42 Name of property: Comfort Hotel
KitamiAcquisition Date
January 22, 2016
Acquisition Price (Note )JPY851 million
Location
Kitami-shi, Hokkaido
Construction Date
March 2008
Category of Assets
Trust BeneficiaryInterestSellerNavaro Tokutei
Mokuteki Kaisha
Total Floor Area
3,009.50m2

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
0.50%
Interest: On (i) the last Japanese businesspayment date
day of each month before theprincipal maturity date, beginningwith September 30, 2015, and (ii)the principal maturity datePrincipal: Lump-sum repayment
repayment
methodBorrowing: Unsecured / with no guarantee
methodBorrowing date
: August 28, 2015
Maturity date
: August 28, 2019

Total Leasable Area

3. Prepayment of Borrowings
INV implemented refinancing in order to procure thefunds for acquisition of 11 hotel properties and 3
residential properties on July 16, 2015 and to reduce loancosts, and prepaid the borrowings as follows.
New Syndicate Loan (C)LenderBalanceofborrowing
Interest
rate,
etc.
Borrowing
methodBorrowing date
Maturity datePrepayment
date
Repayment
amountBalance after
repayment: Sumitomo Mitsui Banking
Corporation, The Bank ofTokyo-Mitsubishi UFJ, Ltd.,
Mizuho Bank, Ltd., Citibank
Japan Ltd., Shinsei Bank,
Limited, Sumitomo Mitsui Trust
Bank, Limited and Resona Bank,
Limited: JPY56,100 million: Base Rate (One-month JPY
TIBOR) + 0.80%: Secured / with no guarantee: July 17, 2014
: July 14, 2017
: July 16, 2015
: JPY56,100 million: JPY 0

New Syndicate Loan (D)LenderBalanceborrowingof: Sumitomo Mitsui Banking
Corporation, The Bank ofTokyo-Mitsubishi UFJ, Ltd.,
Mizuho Bank, Ltd., Citibank
Japan Ltd., Shinsei Bank,
Limited, Sumitomo Mitsui Trust
Bank, Limited and Resona Bank,
Limited: JPY6,241 million

83

3,009.50m2

Property number: A103 Name of property: Royal Parks
MomozakaAcquisition Date
January 22, 2016
Acquisition Price (Note )JPY2,910 million
Location
Osaka-shi, Osaka
Construction Date
June 2007
Category of Assets
Trust BeneficiaryInterestSellerMomo Tokutei
Mokuteki Kaisha
Total Floor Area
10,541.69m2
Total Leasable Area
8,776.26m2(Note)
Acquisition price is based on the purchaseprice indicated in the relevant purchase agreement anddoes not include acquisition costs, property taxes, city
planning taxes and consumption taxes, etc.

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
Interest
rate, : Base Rate (One-month JPY
etc.
TIBOR) + 0.80%
Borrowing: Secured / with no guarantee
methodBorrowing date
: February 6, 2015
Maturity date
: February 6, 2018
Prepayment: July 16, 2015
date
Repayment: JPY6,241 million
amountBalanceafter : JPY 0
repayment
Prudential LPS Loan B
LenderBalanceofborrowing
Interest rate, etc.
Borrowing
methodBorrowing date
Maturity dates
Prepayment
date
Repayment
amountBalanceafter
repayment: Prudential Mortgage Asset
Holdings 1 Japan Investment
Limited Partnership: JPY9,960 million: 1.90%: Secured / with no guarantee: September 28, 2012
: March 31, 2018, March 31,
2019 and March 31, 2020
: July 16, 2015
: JPY9,960 million: JPY 04. Acquisition of Assets
INV decided to acquire the following 14 properties (totalacquisition price of JPY 35,258 million) on June 25,
2015, and completed the acquisition of all of the 14
properties on July 16, 2015.
Property number: D24 Name of property: Hotel MyStays
HanedaAcquisition Date
July 16, 2015
Acquisition
Price JPY7,801 million(Note )
Location
Ota-Ku, Tokyo
Construction Date
April 2001
Category of Assets
Trust Beneficiary Interest
SellerSkye
Tokutei
Mokuteki
KaishaTotal Floor Area
5,400.16㎡
Total Leasable Area 5,400.16㎡
Property number: D25 Name of property: Hotel MyStays
Kameido P1
Acquisition Date
July 16, 2015
Acquisition Price JPY5,594 million(Note )

84

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
Location
Koto-Ku, Tokyo
Construction Date
March 1991
Category of Assets
Trust Beneficiary Interest
SellerNishi
Tokutei
Mokuteki
KaishaTotal Floor Area
4,349.67㎡
Total Leasable Area 4,349.67㎡
Property number: D26 Name of property: Hotel MyStays
Ueno Iriyaguchi
Acquisition Date
July 16, 2015
Acquisition Price JPY3,821 million(Note )
Location
Taito-Ku, Tokyo
Construction Date
November 1985
Category of Assets
Trust Beneficiary Interest
SellerRannoch Tokutei Mokuteki
KaishaTotal Floor Area
2,247.92㎡
Total Leasable Area 2,247.92㎡
Property number: D27 Name of property: Hotel MyStays
Kameido P2
Acquisition Date
July 16, 2015
Acquisition Price JPY3,742 million(Note )
Location
Koto-Ku, Tokyo
Construction Date
March 1991
Category of Assets
Trust Beneficiary Interest
SellerNishi
Tokutei
Mokuteki
KaishaTotal Floor Area
2,793.99㎡
Total Leasable Area 2,793.99㎡
Property number: D28 Name of property: Hotel Vista
Shimizu
Acquisition Date
July 16, 2015
Acquisition Price JPY2,198 million(Note )
Location
Shimizu-Ku, Shizuoka city,
Shizuoka
Construction Date
January 2007
Category of Assets
Trust Beneficiary Interest
SellerWakusei Tokutei Mokuteki
KaishaTotal Floor Area
3,559.81㎡
Total Leasable Area 3,559.81㎡
Property number: D29 Name of property: Super Hotel
Shinbashi/Karasumoriguchi
Acquisition Date
July 16, 2015
Acquisition Price JPY1,624 million(Note )
Location
Minato-Ku, Tokyo
Construction Date
February 2008
Category of Assets
Trust Beneficiary Interest

85

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
SellerSuisei Tokutei
KaishaTotal Floor Area
1,403.89㎡
Total Leasable Area 1,403.89㎡

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
Mokuteki

Property number: D30 Name of property: Flexstay Inn
Higashi-Jujo
Acquisition Date
July 16, 2015
Acquisition Price JPY1,277 million(Note )
Location
Kita-Ku, Tokyo
Construction Date
June 1986
Category of Assets
Trust Beneficiary Interest
Seller
Aki Tokutei Mokuteki Kaisha
Total Floor Area
1,714.53㎡
Total Leasable Area 1,714.53㎡
Property number: D31 Name of property: Hotel MyStays
Utsunomiya
Acquisition Date
July 16, 2015
Acquisition Price JPY1,237 million(Note )
Location
Utsunomiya, Tochigi
Construction Date
January 1990
Category of Assets
Trust Beneficiary Interest
SellerZephyrus Tokutei Mokuteki
KaishaTotal Floor Area
11,733.23㎡
Total Leasable Area 11,733.23㎡
Property number: D32 Name of property: Flexstay Inn
Kawasaki-Kaizuka
Acquisition Date
July 16, 2015
Acquisition Price JPY980 million(Note )
Location
Kawasaki, Kanagawa
Construction Date
April 1990
Category of Assets
Trust Beneficiary Interest
SellerRannoch Tokutei Mokuteki
KaishaTotal Floor Area
1,190.57㎡
Total Leasable Area 1,190.57㎡
Property number: D33 Name of property: Comfort Hotel
ToyamaAcquisition Date
July 16, 2015
Acquisition Price JPY979 million(Note )
Location
Toyama city, Toyama
Construction Date
March 2007
Category of Assets
Trust Beneficiary Interest
SellerSuisei Tokutei Mokuteki
KaishaTotal Floor Area
3,305.64㎡
Total Leasable Area 3,305.64㎡

86Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
Property number: D34 Name of property: Flexstay Inn
Kawasaki-Ogawacho
Acquisition Date
July 16, 2015
Acquisition Price JPY906 million(Note )
Location
Kawasaki, Kanagawa
Construction Date
April 1989
Category of Assets
Trust Beneficiary Interest
SellerRannoch Tokutei Mokuteki
KaishaTotal Floor Area
725.6㎡
Total Leasable Area 725.6㎡
Property number: A100
Name of property:
City Court Kitaichijo
Acquisition Date
July 16, 2015
Acquisition Price JPY1,782 million(Note )
Location
Sapporo, Hokkaido
Construction Date
November 2007
Category of Assets
Trust Beneficiary Interest
SellerValletta Godo Kaisha
Total Floor Area
7,577.24㎡
Total Leasable Area 5,230.18㎡
Property number: A101
Name of property:
Lieto Court Mukojima
Acquisition Date
July 16, 2015
Acquisition Price JPY1,683 million(Note )
Location
Sumida-Ku, Tokyo
Construction Date
February 2008
Category of Assets
Trust Beneficiary Interest
SellerValletta Godo Kaisha
Total Floor Area
3,170.99㎡
Total Leasable Area 2,940.20㎡
Property number: A102
Name of property:
Lieto Court Nishi-Ojima
Acquisition Date
July 16, 2015
Acquisition Price JPY1,634 million(Note )
LocationTokyo
Construction Date
February 2008
Category of Assets
Trust Beneficiary Interest
SellerValletta Godo Kaisha
Total Floor Area
2,210.45㎡
Total Leasable Area 2,048.28㎡
INV resolved at its meeting of the Board of Directors
held on August 21, 2015 to acquire the following three
hotel properties (total acquisition price: JPY7,369
million) as of April 28, 2015, by utilizing the excess
cash-on-hand and new loans.
Property number: D35 Name of property: Flexstay Inn

87

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015 (reference)(from January 1 2015 toJune 30, 2015)
Ekoda
Acquisition Date
Acquisition Price(Note )
Location
Construction Date
Category of Assets
SellerTotal Floor Area
Total Leasable Area

August 28, 2015
JPY5,069 million
Nerima-Ku, Tokyo
January 27, 1989
Trust Beneficiary Interest
Tsukiji One Godo Kaisha
3,932.93㎡
3,932.93㎡

Property number: D36 Name of property: Super HotelTokyo-JR Tachikawa Kitaguchi
Acquisition Date
August 28, 2015
Acquisition Price JPY1,170 million(Note )
Location
Tachikawa, Tokyo
Construction Date
November 2007
Category of Assets
Trust Beneficiary Interest
SellerTsukiji One Godo Kaisha
Total Floor Area
1,832.97㎡
Total Leasable Area 1,832.97㎡
Property number: D37 Name of property: Flexstay Inn
Shirogane
Acquisition Date
August 28, 2015
Acquisition Price JPY1,130 million(Note )
Location
Taito-Ku, Tokyo
Construction Date
March 2006
Category of Assets
Trust Beneficiary Interest
SellerTsukiji One Godo Kaisha
Total Floor Area
1,279.16㎡
Total Leasable Area 1,279.16㎡(Note)
Acquisition price is based on the purchaseprice indicated in the relevant purchase agreement anddoes not include acquisition costs, property taxes, city
planning taxes and consumption taxes, etc.

[Other Notes]
Fiscal Period ended
June 30, 2015 (reference)(from January 1, 2015 toJune 30, 2015)－

Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
In the statement of cash distribution, INV recorded JPY
708 thousand of reserve for temporary difference
adjustments regarding the gain on negative goodwill that
accrue during a fiscal period prior to the Reporting
Period. All amount of such reserve is scheduled to bereversed in the following fiscal period.

88

VI.

I.

Statement of Cash Distribution

UnappropriatedFiscal Period ended June 30,

Fiscal Period ended December

2015 (reference)

31, 2015(from January 1, 2015 to(from July 1, 2015 toJune 30, 2015)

December 31, 2015)

retainedearnings

2,370,704,364 yen

3,028,323,270 yen-

763,290,954 yen

2,295,069,960 yen

3,790,905,282 yen

860 yen)

1,187 yen)

2,295,069,960 yen

3,027,614,328 Yen

860 yen)

948 yen)-763,290,954 yen-

239 yen)-708,942 yen

75,634,404 yen-

II. Distribution in excess of
profits
Deduction from unitholders’capitaIII. Distribution amount(Distribution per unit)
Profit distribution(Profit distribution per unit)
Excess profit distribution(Excess profit distribution per
unit)
IV

Voluntary reserve

Reservefor

temporarydifference adjustments
V

Retainedearnings

carried forward
Calculation

methoddistribution amountofIn

accordance

with

the

In

accordance

with

the

distribution policy set forth indistribution policy set forth in

Article 17, Paragraph 1 of the

Article 17, Paragraph 1 of the

Articles of Incorporation of

Articles of Incorporation of

Investment

theINV, the distribution amount

distribution amount shall be theshall be the amount which doesamount which does not exceed

not exceed the amount of

the amount of profits but

profits but exceeds 90% of theexceeds

thedistributable profit as defined

distributable profit as definedin Article 67-15 of the Special

in Article 67-15 of the Special

Taxation

Corporation,

90%

89

of

MeasuresAct.

Taxation

MeasuresAct.

However, in the event that any

However, in the event that any

tax losses arise, or if no profits

tax losses arise, or if no profits

have been recorded for tax

have been recorded for tax

purposes due to tax losses

purposes due to tax losses

carried forward, the distribution

carried forward, the distribution

amount may be as reasonably

amount may be as reasonably

determined by INV. Pursuant todeterminedbythis policy, INV determined the

Corporation.

Pursuant to thisInvestment

distribution

amounttobepolicy, Investment Corporation

3,027,614,328 yen out of thedetermined

unappropriatedthedistribution

retainedamount to be 2,295,069,960

earnings of 3,028,323,270 yen.

yen out of the net income of

Moreover, INV make exess2,295,304,665 yen. Investment

profit distribution (refund of

Corporation did not distributeinvestment), based on policy on

any amounts in excess of profit,

the distribution of funds as set

as set forth in Article 17,

forth in Article 17, Paragraph 4

Paragraph 4 of the Articles ofof the Articles of Incorporation.

Incorporation.

Based on such policy, INV
declared a distribution (refundof investment) of 763,290,954
yen, which is the amountequivalent

toapproximately

60%

the

depreciationof

expense of 1,275,714,057 yen.

(Note)INV is permitted to distribute the amount determined by INV as excess profit distribution if the amount of

the profit is less than 90% of the distributable profit, or if INV determines that such distribution is appropriate, to theextent that such distribution amount does not exceed the amount prescribed in the relevant laws and regulations, etc.
(including the rules of The Investment Trusts Association, Japan,etc.). Moreover, if the distribution amount does

not satisfy certain requirements provided in the special taxation measures for investment corporations, INV ispermitted to distribute cash in any amount determined by INV for the purpose of satisfying such requirements. Please
note that the amount of distribution in excess of the profit for the relevant fiscal period shall be subtracted from thebalance of the capital surplus upon payment of the distribution amount.

90

Note
Accompanying English financial information, comprising Balance Sheet, Statement of Income,Statement of Unitholders’ Equity, Notes to financial statements and statement of Cash Distribution,
have been translated from the Japanese financial statements of the Investment Corporation preparedin accordance with the Act on Investment Trusts and Investment Corporations of Japan.
Under Article 130 of the Act on Investment Trusts and Investment Corporations of Japan, theJapanese financial statements for the six months ended December 31, 2015 have been audited by
Ernst & Young ShinNihon LLC, in accordance with auditing standards generally accepted in Japan.
However, English translation of the Japanese language report of independent auditors is not attachedherein since the accompanying English translation of Balance Sheet, Statement of Income,Statements of Unitholders’ Equity, Notes to financial statements and Statement of Cash Distribution
are unaudited.
Regarding the English audited financial statements, please refer to the “Audited Financial
Statements” on the website of Invincible Investment Corporation:
http://www.invincible-inv.co.jp/eng/cms/doc.html

91

VII.

Statement of Cash Flow (Reference Information)(Unit: thousands of yen)
Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)

Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
Cash flows from operating activities
Net income before taxes
Depreciation expenses
Investment unit issuance expenses
Finance related costs
Interest received
Interest paid
Increase (decrease) in allowance for doubtful
accounts
Decrease (increase) in accounts receivable
Decrease (increase) in consumption tax
receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Others2,295,909
986,795
140,328
1,242)
379,341

2,953,293
1,275,744
138,866
982,261814)
296,892

467

58

6,739

(431,538)

1,002,839(611,612)

21,53917,86549,39649,576
13,787)
9,953)(25,114)
1,989(9,097)52,504
12,935
4,131

Subtotal

4,925,816

4,640,500

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

1,242
381,197)640)

814(328,496)
583)

Cash flows from operating activities

4,545,220

4,312,234

13,512,228)(37,422,498)-(5,836,789)

406,054

239,098(95,186)

40,738)(1,487)

31,694)

13,202,847)

43,092,621)-

1,401,000
321,000)
90,619,000
62,341,000)
9,960,000)
1,250,43)(2,292,901)
29,230,158

Cash flows from investing activities
Payment for acquisition of tangible assets intrust
Payment for acquisition of intangible assets intrust
Proceeds of tenant leasehold and security
deposits in trust
Proceeds of tenant leasehold and security
deposits in trust
OthersCash flows from investing activities
Cash flows from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Repayment of long-term debt in trust
Finance related costs
Payment of distributions
Proceeds from issuance of investment units

6,241,000
1,200,000)(81,398)
1,952,824)-

92

Cash flows from financing activities
Increase (decrease) in cash and cash equivalents
Beginning balance of cash and cash equivalents
Closing balance of cash and cash equivalents※1

Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
3,006,776(Unit: thousands of yen)
Fiscal Period ended
December 31, 2015
(from July 1, 2015 to
December 31, 2015)
45,084,824

5,650,850)
13,165,393
7,514,543

6,304,437
7,514,543
13,818,981[Notes Concerning Significant Accounting Policies (Reference Information)]

By Period
Item

Fiscal Period ended June 30, 2015

Fiscal Period ended December 31,(from January 1 to June 30, 2015)

2015 (from July 1 to December 31,
2015)

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

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

when purchased and that are subject

to insignificant risks of changes in

to insignificant risks of changes invalue.

value.

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

By Period

Fiscal Period ended June 30, 2015

Fiscal Period ended December 31,

Item(from January 1 to June 30, 2015)

2015 (from July 1 to December 31,※1.

(As of June 30, 2015)(Unit: thousands of yen)

(As of December 31, 2015)(Unit: thousands of yen)

2015)
Relationship between cash

and cash equivalents in statement of

Cash and deposits

cash

Cash and deposits intrust
Cash and cash
equivalents

flows

and

amounts

accompanying balance sheetin93

2,691,921
4,822,622
7,514,543

Cash and deposits
Cash and deposits intrust
Cash and cash
equivalents

7,885,398
5,933,582
13,818,981

“My Number” informed by municipalities is necessary for taxation procedure on investment units.
Thus, it is necessary for unitholders to notify your “My Number” with your brokerage, etc.
Usage of “My Number” in investment units related affairs“My Number” is recorded on payment record and the payment record is filed with the relevant tax
authority pursuant to laws and ordinances.
Major payment record*Payment record regarding cash distribution

Usage of “My Number” includes taxation related procedures on the investment units. It is necessary
for unitholders to notify your “My Number” with your brokerage, etc.
Inquiries regarding notifying “My Number”
Unitholders whose investment units are managed in brokerage accounts
Each brokerageUnitholders who have no brokerage accountTransfer Agent Department, Sumitomo Mitsui Trust Bank,Limited
Toll-free Telephone Number 0120-782-031* As of October 201594

Overview of Unitholders/Investment Units■Historical Unit Price(Note) Unit prices indicate the closing price on the TSE market.

Development of Tokyo Stock Exchange REIT

Index indicates on or after January 4, 2013 on the assumption that the closing price of INV’s unit price isdeemed as identical to the closing price of Tokyo Stock Exchange REIT index as of January 4, 2013.

■ Distribution of Unitholders■ Number of Unitholders by Owner■ Number of Investment Units by Owner

95

Portfolio Data
Portfolio Characteristics
At the end of the reporting period, the number of properties held by the Investment Corporation
totaled 111, including 66 residential properties, 37 hotels, 7 retail and office buildings, and as well as
one parking lot with a total acquisition value of JPY 173,815 million and a total leasable area of
295,546.92 m2.
Investment Ratio by Region(Note)(Note 1)

The ratios below are indicated based on the acquisition price and are rounded to one decimal place.

Greater Tokyo Area indicates Tokyo excluding 23 Wards, Kanagawa, Chiba, and Saitama.

(Note 2) Major Regional Cities indicates “areas surrounding Tokyo” and “major cities including ordinancedesignated cities and surrounding areas.

By Property Type96

By Property Age(Note)

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

97

Portfolio Overview(as of January 31,2016)
PurposeProperty
NumberResidential

A26
A27

Name of Property

Location

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

RentableUnits

Acquisition Investment
Occupancy
Price
Ratio
Rate (%)(JPY mn)(%)

1,771.13

98

1,251

0.7

97.1

2,681.94

60

1,229

0.7

99.1

A28

Growth Maison Gotanda

Shinagawa-ku, Tokyo

1,051.50

48

888

0.5

100.0

A29

Growth Maison Kameido

Koto-ku, Tokyo

1,367.96

66

1,070

0.6

97.0

A30

Emerald House

Itabashi-ku, Tokyo

2,152.31

96

1,505

0.8

97.9

A31

Harmonie Ochanomizu

Bunkyo-ku, Tokyo

1,748.24

65

1,428

0.8

100.0

Suncrest Shakujii-Koen

Nerima-ku, Tokyo

3,029.16

29

1,088

0.6

97.0

Yokohama-shi, Kanagawa

1,858.44

68

1,059

0.6

98.5

Taito-ku, Tokyo

1,351.11

64

1,023

0.6

100.0

A32
A33
A34

Growth Maison ShinYokohama
Belle Face UenoOkachimachi

A35

Grand Rire Kameido

Koto-ku, Tokyo

1,562.26

72

906

0.5

100.0

A36

Growth Maison Ikebukuro

Toshima-ku, Tokyo

952.89

42

825

0.4

97.6

A37

Growth Maison Yoga

Setagaya-ku, Tokyo

1,015.34

39

795

0.4

94.9

A38

Route Tachikawa

Tachikawa-shi, Tokyo

1,368.57

24

676

0.4

100.0

A39

Shibuya-Honmachi Mansion Shibuya-ku, Tokyo

1,167.50

25

651

0.4

100.0

A40

City Heights Kinuta

1,235.93

19

646

0.4

94.6

A41

Acseeds Tower KawaguchiKawaguchi-shi, Saitama
Namiki

1,210.74

57

620

0.3

86.0

A42

Capital Heights Kagurazaka Shinjuku-ku, Tokyo

1,126.65

26

604

0.3

93.0

A43

College Square Machida

Machida-shi, Tokyo

1,047.75

62

589

0.3

100.0

A44

Belair Meguro

Meguro-ku, Tokyo

557.05

25

589

0.3

92.0

A45

Wacore Tsunashima I

Yokohama-shi, Kanagawa

907.46

50

572

0.3

93.9

A46

Foros Nakamurabashi

Nerima-ku, Tokyo

815.77

37

566

0.3

100.0

A47

Growth Maison Kaijin

Funabashi-shi, Chiba

2,040.27

34

557

0.3

96.7

A48

College Square Machiya

Arakawa-ku, Tokyo

871.35

43

510

0.3

100.0

A51

City House Tokyo Shinbashi Minato-ku, Tokyo

3,364.00

86

2,520

1.4

95.0

A52

Winbell Kagurazaka

Shinjuku-ku, Tokyo

4,032.70

118

3,260

1.8

98.5

Shinjuku-ku, Tokyo

4,310.77

69

1,880

1.0

97.0

Shinjuku-ku, Tokyo

1,987.88

88

1,450

0.8

96.4

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

Setagaya-ku, Tokyo

A56

Casa Eremitaggio

Meguro-ku, Tokyo

1,197.19

17

1,070

0.6

97.0

A59

Towa City Coop Shinotsuka
Toshima-ku, TokyoII

1,627.13

58

866

0.5

95.2

A61

Bichsel Musashiseki

Nerima-ku, Tokyo

1,220.24

70

577

0.3

95.7

A62

Lexel Mansion Ueno
Matsugaya

Taito-ku, Tokyo

1,969.45

29

970

0.5

100.0

A63

Towa City Coop Sengencho Yokohama-shi, Kanagawa

3,426.36

154

1,110

0.6

93.3

A64

Royal Park Omachi

Sendai-shi, Miyagi

1,929.59

51

415

0.2

97.7

A65

Lexington Square
Haginomachi

Sendai-shi, Miyagi

1,528.58

39

330

0.2

95.0

A66

Visconti Kakuozan

Nagoya-shi, Aichi

705.75

8

255

0.1

76.0

A71

Lexington Square Daitabashi Suginami-ku, Tokyo

1,430.64

43

977

0.5

88.0

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo Sapporo-shi, Hokkaido

A75

Spacia Ebisu

A76

Neo Prominence

A77

Sumida-ku, Tokyo

784.74

33

511

0.3

97.0

4,460.56

120

1,180

0.6

92.9

Shibuya-ku, Tokyo

7,794.91

109

7,010

3.8

93.9

Kita-ku, Tokyo

3,574.70

52

1,660

0.9

91.3

Invoice Shin-Kobe Residence Kobe-shi, Hyogo

2,773.71

81

1,260

0.7

92.1

A78

Cosmo Court Motomachi

Kobe-shi, Hyogo

2,310.49

82

973

0.5

95.0

A79

Revest Honjin

Nagoya-shi, Aichi

1,933.80

80

674

0.4

96.3

98

Purpose

Property
NumberName of Property

Location

Leasable Area(m2)

RentableUnits

Acquisitio Investment
Occupancyn Price
Ratio
Rate (%)(JPY mn)(%)

Residential

A80

Revest Matsubara

Nagoya-shi, Aichi

1,955.40

70

657

0.4

93.1

A81

Sun Terrace Minami
Ikebukuro

Toshima-ku, Tokyo

898.70

38

625

0.3

100.0

A82

Alba Noritake Shinmachi

Nagoya-shi, Aichi

1,731.68

64

608

0.3

95.1

A83

Revest Meieki Minami

Nagoya-shi, Aichi

1,634.60

61

597

0.3

100.0

A84

Revest Heian

Nagoya-shi, Aichi

1,554.03

40

595

0.3

100.0

A85

Vendir Hamaotsu Ekimae

Otsu-shi, Shiga

2,670.66

81

581

0.3

87.4

A86

Salvo Sala

Osaka-shi, Osaka

1,428.12

54

544

0.3

98.5

A87

Excellente Kagurazaka

Shinjuku-ku,Tokyo

701.92

33

543

0.3

88.2

A88

Luna Court Edobori

Osaka-shi, Osaka

1,185.50

50

525

0.3

100.0

A89

Winntage Kobe Motomachi

Kobe-shi, Hyogo

1,433.35

57

512

0.3

82.4

A90

Queen's Court Fukuzumi

Koto-ku, Tokyo

765.18

25

456

0.2

96.6

A91

Corp Higashinotoin

Kyoto-shi, Kyoto

1,029.05

42

446

0.2

97.9

A92

Belair Oimachi

Shinagawa-ku, Tokyo

530.60

26

412

0.2

100.0

A93

Siete Minami-Tsukaguchi

Amagasaki-shi, Hyogo

1,020.86

40

374

0.2

95.0

A94

Prime Life Sannomiya
Isogami Koen

Kobe-shi, Hyogo

789.12

32

373

0.2

100.0

A95

HERMITAGE NANBA WEST

Osaka-shi, Osaka

992.76

21

355

0.2

91.2

A96

Century Park Shinkawa
1-bankan

Nagoya-shi, Aich

1,477.62

44

335

0.2

91.0

A97

West Avenue

Kunitachi-shi, Tokyo

794.80

40

331

0.2

80.0

A98

Little River Honmachibashi

Okasa-shi, Osaka

974.81

31

310

0.2

96.9

A99

Prime Life Mikage

Kobe-shi, Hyogo

761.18

28

297

0.2

96.6

A100

City Court Kitaichijo

Sapporo-shi, Hokkaido

5,230.18

127

1,782

1.0

96.8

A101

Lieto Court Mukojima

Sumida-ku, Tokyo

2,940.20

82

1,683

0.9

99.0

A102

Lieto Court Nishi-Ojima

Koto-ku, Tokyo

2,048.28

91

1,634

0.9

100.0

A103

Royal Parks Momozaka (Note 2) Osaka-shi, Osaka

8,776.26

147

2,910

1.6

100.0

128,579.37

3,860

66,092

35.9

95.7

13

1,301

0.7

98.7

Subtotal
Office Buildings/Retail Facilities

B8

Kindai Kagakusha Building

Shinjuku-ku, Tokyo

1,451.54

B9

Shinjuku Island

Shinjuku-ku, Tokyo

526.43

1

715

0.4

100.0

B14

Lexington Plaza Nishigotanda

Shinagawa-ku, Tokyo

6,033.58

11

4,880

2.7

100.0

B15

Cross Square NAKANO

Nakano-ku, Tokyo

2,145.00

45

1,060

0.6

79.1

B16

Ohki Aoba Building

Sendai-shi, Miyagi

2,178.41

13

816

0.4

100.0

B17

Lexington Plaza Hachiman

Sendai-shi, Miyagi

8,419.15

18

3,280

1.8

100.0

B18

AEON TOWN Sukagawa

Sukagawa-shi, Fukushima

18,440.58

1

2,320

1.3

100.0

39,194.69

102

14,372

7.8

98.8

81.04

1

97

0.1

100.0

81.04

1

97

0.1

100.0

Subtotal
Parking
Lots

C1

Stop Parking Kanda-Sudacho

Chiyoda-ku Tokyo

Subtotal
HotelsD1

Hotel MyStays Kanda

Chiyoda-ku, Tokyo

2,585.72

126

2,851

1.5

100.0

D2

Hotel MyStays Asakusa

Sumida-ku, Tokyo

3,327.38

160

2,584

1.4

100.0

D3

Hotel MyStays Kyoto-shijo

Kyoto-shi, Kyoto

7,241.51

224

6,024

3.3

100.0

D4

MyStays Shin-Urayasu
Conference Center

Urayasu-shi, Chiba

6,232.30

175

4,930

2.7

100.0

D5

Hotel MyStays Maihama

Urayasu-shi, Chiba

2,456.36

90

4,870

2.6

100.0

99

Purpose

Property
NumberName of Property

Location

D6

Hotel Vista Premio Dojima

Osaka-shi, Osaka

D7

Hotel MyStays Nagoya-Sakae

Nagoya-shi, Aichi

D8

Hotel MyStays
Sakaisuji-Honmachi

D9

Hotel MyStays Yokohama

D10

Leasable Area(m2)
9,445.32

Acquisitio Investment
Occupancyn Price
Ratio
Rate (%)(JPY mn)
(%)
141
3,845
2.1
100.0

RentableUnits

9,064.71

270

2,958

Osaka -shi, Osaka

4,188.83

190

2,514

1.4

100.0

Yokohama-shi, Kanagawa

7,379.43

190

2,119

1.2

100.0

Hotel MyStays Nippori

Arakawa-ku , Tokyo

1,719.29

93

1,898

1.0

100.0

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

Fukuoka-shi, Fukuoka

3,412.71

177

1,570

0.9

100.0

D12

Flexstay Inn Iidabashi

Shinjuku-ku, Tokyo

2,953.38

59

1,381

0.8

100.0

D13

Hotel MyStays Ueno Inaricho

Taito-ku, Tokyo

1,150.76

72

1,331

0.7

100.0

D14

Flexstay Inn Shinagawa

Shinagawa-ku, Tokyo

1,134.52

55

1,242

0.7

100.0

D15

Flexstay Inn Tokiwadai

Itabashi-ku, Tokyo

2,539.75

129

1,242

0.7

100.0

D16

Flexstay Inn Sugamo

Toshima-ku, Tokyo

2,089.86

104

1,192

0.6

100.0

D17

Hotel MyStays Otemae

Osaka-shi, Osaka

4,956.66

110

1,192

0.6

100.0

D18

Flexstay Inn Kiyosumi
Shirakawa

Koto-ku, Tokyo

2,673.64

55

749

0.4

100.0

D19

Flexstay Inn Nakanobu P1

Shinagawa-ku, Tokyo

770.56

39

589

0.3

100.0

D20

Flexstay Inn Nakanobu P2

Shinagawa-ku, Tokyo

391.49

22

283

0.2

100.0

D21

APA Hotel Yokohama-Kannai

Yokohama-shi, Kanagawa

6,568.51

451

8,350

4.5

100.0

D22

Hotel Nets Hakodate

Hakodate-shi, Hokkaido

7,961.26

202

2,792

1.5

100.0

D23

Flexstay Inn Shirogane

Minato-ku, Tokyo

1,754.06

84

2,119

1.2

100.0

D24

Hotel MyStays Haneda

Ota-ku, Tokyo

5,400.16

174

7,801

4.2

100.0

D25

Hotel MyStays Kameido P1

Koto-ku, Tokyo

4,349.67

265

5,594

3.0

100.0

D26

Hotel MyStays Ueno Iriyaguchi Taito-ku, Tokyo

2,247.92

97

3,821

2.1

100.0

D27

Hotel MyStays Kameido P2

Koto-ku, Tokyo

2,793.99

175

3,742

2.0

100.0

D28

Hotel Vista Shimizu

Shizuoka-shi, Shizuoka

3,559.81

152

2,198

1.2

100.0

D29

Super Hotel Shinbashi/
Karasumoriguchi

Minato-ku, Tokyo

1,403.89

74

1,624

0.9

100.0

D30

Flexstay Inn Higashi-Jujo

Kita-ku, Tokyo

1,714.53

88

1,277

0.7

100.0

D31

Hotel MyStays Utsunomiya

Utsunomiya-shi, Tochigi

11,733.23

116

1,237

0.7

100.0

D32

Flexstay Inn Kawasaki-Kaizuka Kawasaki-shi, Kanagawa

1,190.57

64

980

0.5

100.0

D33

Comfort Hotel Toyama

Toyoma-shi, Toyama

3,305.64

150

979

0.5

100.0

D34

Flexstay Inn
Kawasaki-Ogawacho

Kawasaki-shi, Kanagawa

725.60

62

906

0.5

100.0

D35

Flexstay Inn Ekoda

Nerima-ku, Tokyo

3,932.93

210

5,069

2.8

100.0

D36

Super Hotel Tokyo-JR
Tachikawa Kitaguchi

Tachikawa-shi, Tokyo

1,832.97

96

1,170

0.6

100.0

D37

Super Hotel JR Uenoiriyaguchi

Taito-ku, Tokyo

1,279.16

69

1,130

0.6

100.0

D38

Hotel MyStays(Note 2)

Shinsaibashi
Osaka-shi, Osaka

1,942.01

54

3,160

1.7

100.0

1.6

100.0

D39

Comfort Hotel Kurosaki (Note 2) Kitakyushu-shi, Fukuoka

3,207.60

151

1,148

0.6

100.0

D40

Comfort Hotel Maebashi (Note 2) Maebashi-shi, Gunma

3,660.96

153

1,128

0.6

100.0

D41

Comfort Hotel
Tsubame-Sanjo (Note 2)

Sanjo-shi, Niigata

3,099.90

132

1,010

0.5

100.0

D42

Comfort Hotel Kitami (Note 2)

Kitami-shi, Hokkaido

3,009.50

127

851

0.5

100.0

Subtotal

152,388.05

5,627

103,459

56.2

100.0

Total

320,243.15

9,590

184,022

100.0

98.2

(Note1)Figures are rounded down to the indicated unit and percentages are rounded to one decimal place.

(Note2)Acquired as of January 22, 2016100

Overview of the properties acquired in January, 2016 (6 properties)
5 Hotels and 1 Residential Property Acquired in January

101

102

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

Unitholders who have special accounts instead of

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

Toll-free Number: 0120-255-100

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

In the case that the collection period is past, please

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

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

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

103

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

Please be aware that correspondence may be

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

Annual Schedule

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

104

Please inquire with

Website

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

For Unitholders
Investors’ Registry

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

Administrator

Chiyoda-ku, Tokyo

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

Institution

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

Correspondence

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

105

Matters to be additionally stated regarding Asset Management Report (Fiscal Period
ended December 31, 2015 (July 1, 2015 to December 31, 2015))

Invincible Investment Corporation
With respect to the contents of page 18 of INV’s Asset Management Report (Fiscal Period ended
December 31, 2015 (July 1, 2015 to December 31, 2015)), INV adds the following matters to theend of “Overview of the Investment Corporation, 4. Asset Management Company, Asset CustodyCompanies, and General Administrative Agents”.

(Note 5) In the Reporting Period, with respect to the handling of the Individual Numbers and the
Corporate Numbers (hereinafter referred to as the “Individual Numbers, etc.”), INV has
amended the details of the entrustment of the affairs pertaining to the General
Administrative Agent, due to the Act on the Use of Numbers to Identify a Specific
Individual in the Administrative Procedure coming into effect.
(i) As of December 15, 2015, (a) with respect to the entrustment agreement that wasentered into between INV and Sumitomo Mitsui Trust Bank, Limited, which is thegeneral administrative agent (administration of investors’ registry), INV has added theentrustment of the affairs regarding the collection, registration, storage and disposal ordeletion of the Individual Numbers, etc. of the unitholders and the holders ofinvestment unit options and (b) with respect to the special account managementagreement that was entered into between INV and Sumitomo Mitsui Trust Bank,
Limited, which is the special account management company, INV has added theentrustment of the affairs regarding the collection, registration, storage and disposal ordeletion of the Individual Numbers, etc. of the affiliates of special accounts; and(ii) As of October 23, 2015, with respect to the special account management agreementthat was entered into between INV and Mitsubishi UFJ Trust and Banking Corporation
Limited, the special account management company, INV has added the entrustment of
the affairs regarding the collection, registration, storage and disposal or deletion of the
Individual Numbers, etc. of the affiliates of special accounts.

106