Invincible Investment Corporation
Follow on Acquisition
TSE Code : 8963

June 25, 2018

DPU Growth
After acquisition, 2018 DPU expected to increase by ¥70 to ¥3,015; which is 6.6% above last year and 2.4% above forecast The increase in the June 2018 period is mostly due to the increased NOI from the existing assets by ¥255 million or 2.5%
above budget, which includes ¥242 million or 3.3% outperformance compared to budget by the hotels
(¥)

Global Offering(October 2017)
Offering Size: ¥41.0 bn

3,500
Domestic Offering(February 2017)
Offering Size: ¥8.6 bn

3,000
Global Offering(March 2016)
Offering Size: ¥39.1 bn

2,500

2,000

Global Offering(July 2015)
Offering Size: ¥30.3 bn

+6.6%
+6.2%

3,015

2,945

+2.4%

3,015

2,828

2,663

+30.1%

1,595

2,047

Global Offering(June 2014)
Offering Size: ¥24.8 bn

Change in 2018 DPU forecast

1,564
1,477

Upper :
December
Period

1,562

1,595

Lower :
June
Period

1,383

1,420

BeforeAfter+56.7%
1,500

1,000

1,306

+160.7%

1,187

733

501
500

237

1,186

1,264

2016

2017

860

1,420

573

264
0

2013

2014

2015

2018
(Forecast)1Performance of Existing Properties
Total NOI Growth would be 1.5% when excluding the five hotels currently under renovation
Hotel NOI1 + Sheraton2(¥ mn)

1H

2H

+0.2%

8,000

7,443 7,456

+2.1%
7,000

Residential NOI3(¥ mn)

2H

+3.0%
2,600
2,500

6,435 6,569

1H

+3.1%
2,529

2,456

Total NOI
(Hotel + Sheraton + Residential + Others4)(¥ mn)

1H+0.9%

11,000

2,522
2,446

10,0002,400

10,07410,162

+2.3%
9,076

6,000

2H

9,282

9,000

2,300
8,000
2,200

5,000

7,000

2,100
4,000 02,000 0

2017
2018
2017
2018
(Actual) (Forecast) (Actual) (Forecast)

Full Year(¥ mn)

14,00013,879Full Year(¥ mn)
5,500

+1.1%

16,000

2017
2018
2017
2018
(Actual) (Forecast) (Actual) (Forecast)

14,025

5,000

+3.0%
4,902

6,0000

2017
2018
2017
2018
(Actual) (Forecast) (Actual) (Forecast)

Full Year(¥ mn)

5,052

+1.5%

20,00019,445

19,15019,0004,500
12,0004,000

18,00010,0008,00003,500

2017(Actual)2018(Forecast)

3,00002017(Actual)2018(Forecast)

17,00002017(Actual)2018(Forecast)(Note 1) Based on 44 hotel properties; of the 58 hotel properties in our portfolio as of May 31, 2018, 9 hotels with fixed‐rent lease agreements as well as 5 hotels, which are under renovation in 2018, are excluded. 5 hotels under renovation are Hotel MyStays Kyoto‐Shijo, MyStays Shin‐Urayasu Conference Center,
Hotel MyStays Maihama, Hotel MyStays Premier Dojima and Hotel MyStays Hakodate‐Goryokaku(Note 2) Includes the dividends from preferred equity interest of TMK that owns Sheraton Grande Tokyo Bay Hotel, assuming INV owned the preferred equity interest of TMK from the beginning of 2017
(Note 3) Based on the 64 residential properties owned as of May 31, 2018. Excludes one‐off insurance‐related revenues and expenses(Note 4) Based on 2 commercial properties owned by INV as of May 31, 2018, after the sale of Lexington Plaza Nishi‐Gotanda(Note 5) For all properties, the pre‐acquisition period of the properties acquired between January 2017 and June 2018 is based on actual results provided by sellers

2Portfolio Rebalance Transaction
Portfolio rebalance: since July 2017 INV has sold six non‐core properties and used the proceeds to acquire six high quality hotels,
increasing the NOI after depreciation by ¥333 million per year
Acquisitions(¥ mn)
Property Name

Hotel MyStays Yokohama Kannai
Art Hotel Joetsu
Art Hotel Hirosaki City
Hotel MyStays Oita
Hotel MyStays Gotanda (New Acquisition)
Hotel MyStays Tachikawa (New Acquisition)
Total

PropertyType

Date of
Acquisition

Hotel

February 2018

Hotel

February 2018

Hotel

February 2018

Hotel

February 2018

Hotel

June 2018

Hotel

June 2018

Acquisition
Price
5,326
2,772
2,723
1,604
4,068
3,257
19,750

1

Appraisal NOI
259
202
198
107
191
155
1,113

Cap Rate
4.9%
7.3%
7.3%
6.7%
4.7%
4.8%
5.6%

Dispositions

NOI after Depreciation1
199
139
116
67
178
125
826

Cap Rate
3.7%
5.0%
4.3%
4.2%
4.4%
3.8%
4.2%

(¥ mn)
Date of Sale

Kindai Kagaku Sha Building

OfficeJuly 2017

1,361

48

Cap Rate
3.6%

27

Cap Rate
2.0%

Times Kanda‐Sudacho 4th

Parking

July 2017

Shinjuku Island

OfficeDecember 2017

130
705

4
19

3.8%
2.8%

4
16

3.8%
2.4%

Casa Eremitaggio

Residential

December 2017

Lexel Mansion Ueno Matsugaya

Residential

December 2017

1,312
1,329

52
51

4.0%
3.9%

33
34

2.6%
2.6%

Sun Terrace Minami‐Ikebukuro

Residential

December 2017

Residential

January 2018

934
1,603

32
65

3.5%

Harmonie Ochanomizu

2249

Growth Maison Ikebukuro

Residential

January 2018

1,057

41

4.1%
4.0%

31

3.1%
3.0%

Capital Heights Kagurazaka

Residential

January 2018

732
1,350

30
66

4.1%
4.9%

24
56

3.4%
4.2%

721
5,160

41
217

5.8%
4.2%

27
164

3.8%
3.2%

16,397

672

4.1%

492

3.0%

Cross Square NAKANO

OfficeJanuary 2018

Ohki Aoba Building

OfficeJanuary 2018

Lexington Plaza Nishi‐Gotanda

OfficeMarch 2018

Total

After
Acquisition
andDisposition

Estimated Increased NOI after Depreciation 3:

Actual NOINOI after Depreciation2

Property
Type

Property Name

Sales Price

2

2.4%

+¥333 million (+¥69 per unit4)(Note 1) Appraisal NOI of the newly acquired properties is based on the total NOI derived from the direct capitalization method stated in the appraisal reports obtained for the acquisition. The appraisal NOI after depreciation is calculated by deducting the depreciation amount from the Appraisal NOI. The
depreciation amount is based on the estimate by CIM. Appraisal NOI Yield is calculated by dividing the NOI by the Acquisition Price(Note 2) NOI of the properties sold is based on actual NOI for 2017. NOI after depreciation is calculated by deducting the depreciation amount from NOI. NOI yield is calculated by dividing the NOI by the sales price(Note 3) The difference of total appraisal NOI after depreciation of the newly acquired properties and total actual NOI after depreciation for the sold assets. The amount of increase is an estimated amount and does not show the actual impact on NOI after depreciation of INV’s portfolio. INV does not guaranteethat such amount will increase in NOI after depreciation of INV’s portfolio.
(Note 4) Calculated by dividing the difference above by the total number of investment units issued and outstanding as of today (4,793,181 units). This figure does not show the actual impact on distribution per unit, and INV does not guarantee that such amount will increase in the distribution amount per unit.

3

Asset Recycling Program ‐ Dispositions
Initiated Asset Recycling Program in July 2017. In total, INV has sold 12 properties for ¥16.4 billion at a 4.1%1 NOI cap rate These sales prices are ¥2,821 million (or 20.8%) greater than book value2 and ¥2,503 million (or 18.0%) greater than appraisal
value3(¥ million)
Property
Type

Sale Date

Sales Price

Actual1
NOI

Exit NOI
1
Cap Rate(A)(B)

Kindai Kagaku Sha Building

OfficeJul.‐17

1,361

48

Times Kanda‐Sudacho 4th

Parking

Jul.‐17

130

Shinjuku Island

OfficeDec.‐17

Casa Eremitaggio

Residential

Lexel Mansion Ueno Matsugaya
Sun Terrace Minami‐Ikebukuro

Property Name

Book
2
Value

Sales Priceabove Book

As % of
Book

Appraisal
3
Value(B)/(A)(C)(A)‐(C)=(D)(D)/(C)(E)(E)‐(A)=(F)(F)/(E)

3.6%

1,197

163

13.6%

1,060

301

28.4%

4

3.8%

100

29

28.9%

113

17

15.0%

705

19

2.8%

701

3

0.4%

558

147

26.3%

Dec.‐17

1,312

52

4.0%

948

363

38.4%

1,120

192

17.1%

Residential

Dec.‐17

1,329

51

3.9%

853

475

55.8%

1,230

99

8.1%

Residential

Dec.‐17

934

32

3.5%

591

343

58.1%

761

173

22.9%

5,772

210

3.6%

4,393

1,378

31.4%

4,842

930

19.2%

2017 subtotal

Sales Price
As % ofabove Appraisal Appraisal

Harmonie Ochanomizu

Residential

Jan.‐18

1,603

65

4.1%

1,346

256

19.1%

1,420

183

12.9%

Growth Maison Ikebukuro

Residential

Jan.‐18

1,057

41

4.0%

743

314

42.3%

915

142

15.6%

Capital Heights Kagurazaka

Residential

Jan.‐18

732

30

4.1%

623

108

17.5%

587

145

24.8%

Cross Square NAKANO

OfficeJan.‐18

1,350

66

4.9%

1,125

224

19.9%

1,170

180

15.4%

Ohki Aoba Building

OfficeJan.‐18

721

41

5.8%

709

11

1.6%

710

11

1.5%

Lexington Plaza Nishi‐Gotanda

OfficeMar.‐18

5,160

217

4.2%

4,632

527

11.4%

4,250

910

21.4%

2018 subtotal

10,624

462

4.4%

9,181

1,442

15.7%

9,052

1,572

17.4%

Total

16,397672

4.1%

13,575

2,821

20.8%

13,894

2,503

18.0%

Lexington
Plaza Nishi‐
GotandaHarmonie
Ochanomizu

Kindai
Kagaku Sha
Building

Casa
Eremitaggio

Cross Square
NAKANO

Lexel Mansion
Ueno
Matsugaya

Growth
MaisonIkebukuro

Ohki Aoba
Building

Shinjuku
IslandSun Terrace
Minami‐Ikebukuro

CapitalHeights
Kagurazaka

Times Kanda‐
Sudacho 4th(Note 1) “Actual NOI” indicates actual NOI from July 2016 to June 2017 for the two properties sold in July 2017, or NOI for 2017 full year for the other ten properties (NOI of four properties sold in December 2017 indicates actual NOI from January 1, 2017 to thedisposition date). NOI yield is calculated by dividing “Actual NOI” by total sales price(Note 2) As of the sales date
(Note 3) Based on the appraisal reports as of the most recent state prior to sale4Portfolio Growth
The anticipated acquisition of two hotels is consistent with recently acquired hotels in that all four are managed by MyStays andfurther diversifies the geographic footprint

Pre‐Acquisition

Post‐Acquisition

124 properties

126 properties

Residential
25.3%

Residential
24.8%

No. of properties1

Portfolio Composition
by Property Type1

Hotel
73.1%

Others2
1.6%

Others2
1.5%

Greater Tokyo : 61.6%
Hokkaido area
4.1%

Portfolio Composition
by Geography1,3

Kyushu area
6.0%
Kansai area
11.0%
Chubu area
7.7%
Greater Tokyo(ex. Tokyo 23 wards)

14.6%

Others
9.7%

Tokyo
23 wards
47.0%

Hotel
73.7%

Greater Tokyo : 62.4%
Others9.5%
Hokkaido area
4.0%
Kyushu area
5.8%
Kansai area
10.8%

Tokyo
23 wards
47.2%

Chubu area
7.5%
Greater Tokyo(ex. Tokyo 23 wards)

15.2%(Note 1) Based on (anticipated) acquisition price. Preferred equity interest in the JV TMK which holds Sheraton Grande Tokyo Bay Hotel (SGTB) is counted as one hotel property in Greater Tokyo based on the property type and location of SGTB for
Invincible’s portfolio. Calculated by applying the anticipated amount of preferred equity contribution by Invincible to the JV TMK for the acquisition price of SGTB in Invincible’s portfolio(Note 2) “Others” includes Offices, Commercial facilities and Parking lots
(Note 3) Defined as follows: “Greater Tokyo” is Tokyo, Kanagawa, Chiba and Saitama. Greater Tokyo (ex, Tokyo 23 wards) is Tokyo (ex. Tokyo 23 Wards), Kanagawa, Chiba and Saitama. Kansai area is Osaka, Hyogo ,Kyoto, Shiga, Wakayama and Nara.
Chubu area is Aichi, Gifu, Mie, Shizuoka, Nagano, Yamanashi, Niigata, Toyama, Ishikawa and Fukui.

5Hotel MyStays Gotanda
Characteristics


Located a six‐minute walk from Gotanda Station on the JR
Yamanote Line, one of Tokyo’s busiest and important lines,
connecting Tokyo’s major stations and urban centers
 Provides convenient access to Haneda Airport and is only two
stops from Shinagawa Station which has a bullet train stop
 All rooms measure 12.8 square meters and are comfortably
appointed to accommodate two guests, offering a quality room ataffordable rates to meet both business and leisure demand Renovation recently completed in August 2016. High averageoccupancy of 98.1% over the last twelve months
Address

2‐5‐4 Higashigotanda, Shinagawa‐ku, Tokyo

Access6‐minute walk from Gotanda Station( JR Yamanote Line, Toei Asakusa Line )Completion Date

June 1988

Renovation Period

August 2016

No. of Rooms

110 rooms

Rentable Space

1,839.77 m2

Land Area

439.74 m2

Map

Hotel KPI (Actual)
Occupancy1

ADR1

RevPAR1

NOI2

98.1%

¥9,650¥9,462¥192 mn(Note 1) Blended average for the last twelve months as of April 2018
(Note 2) Sum of the last twelve months as of April 20186

Hotel MyStays Tachikawa
Characteristics


Located an eight‐minute walk from Tachikawa Station on the
Chuo Main Line, a major artery with direct access to Shinjuku
Station and Tokyo Station
 Tachikawa has a population of 180,000 people on the westernoutskirts of Tokyo and serves as a major traffic hub and shopping
center zone
 Tachikawa is home to numerous modern industrial facilities aswell as various national research institutions and administrative
office buildings, providing constant demand for both businessand leisure travelers
 Popular tourist attractions include the spectacular scenery ofShowa Memorial Park and picturesque views from Mount Takao
Address

1‐8‐14 Nishiki‐cho, Tachikawa‐shi, Tokyo

Access8‐minute walk from Tachikawa Station( JR Chuo Line)

Completion Date

May 1991

Renovation Period

April ‐ June 2016

No. of Rooms

121 rooms

Rentable Space

3,844.64 m2

Land Area

1,179.52 m2

Map

Hotel KPI (Actual)
Occupancy1

ADR1

RevPAR1

NOI2

94.1%

¥8,180¥7,701¥158 mn(Note 1) Blended average for the last twelve months as of April 2018
(Note 2) Sum of the last twelve months as of April 20187

Bond Issuance and New BorrowingINV issued its first corporate bonds, which help diversify the financing sources for INV. The 5 and 10 year maturities, at 0.40% and 0.80%
interest, respectively help to lower INV’s borrowing costs and lengthen the overall maturity period of its debt
The ¥2 billion bond issuance along with proceeds from the March 2018 asset disposition provided Invincible with ¥5.8 billion in dry powder forthis acquisition
Swapped floating rate to fixed rate on the new borrowing in order to reduce the risk from interest rate fluctuations

New Borrowing

Investment Corporation Bonds (Issued on May 25, 2018)
Bonds name
1st Series Investment
Corporation Bonds
2nd Series Investment
Corporation Bonds
Total / Average1(¥ mn)

AnnualInterest Rate2

Rating

5.0

1,000

0.40%

A (JCR)

10.0

1,000

0.80%

A (JCR)

Term

Balance(years)

7.5

2,000

¥189,415
mn

REIT Bond

Balance(¥ mn)

Term Loan (H)5.0Interest Rate
Before Swap Fixed

Interest Rate
After Swap

1MT+0.60%

0.7495%1,500

LTV(Appraisal Value Base)1 and Weighted Average Interest Rate2
(%)

59.0

60

4.0

54.8

Lender Formation (After New Borrowing)(Total)Term(years)

(%)

0.60%

Mizuho Bank
MUFG
SMBC
SMTB
Shinsei Bank
Citibank
Resona Bank
DBJ
Aeon BankJapan Post BankTokyo Star Bank
Dai‐ichi Life Insurance
Fukuoka Bank
Shizuoka Bank
Nomura TB
Hirosihma Bank
Kagawa Bank
Daishi Bank
Hyakugo Bank
Towa Bank
Gunma Bank

Loan Name

55

20.5%
14.5%
14.0%
13.0%
7.3%
6.9%
4.1%
2.4%
2.4%
2.1%
2.1%
2.1%
2.1%
1.3%
1.2%
0.8%
0.5%
0.5%
0.5%
0.4%
0.3%
1.1%

3.66

53.1

LTV (left)

53.1

1.48
1.07

45

3.0

Average Interest rate (right)

49.0

1.95

50

1.06

40

45.1

43.4

44.5

2.0

44.2

42.2

42.8

0.63

0.48

0.50

0.50

0.51

0.52

Dec
2015

Jun
2016

Dec
2016

Jun
2017

Dec
2017

Jun.27
2018
(E)

22.9x

22.2x

3

1.0

35

0.0

Jun
2013

Dec
2013

Jun
2014

Dec
2014

Jun
2015

DSCR
25.0x

DSCR
(based on Portfolio)4

20.0x

DSCR
(excluding Hotel Variable Rent)5

15.0x

9.9x
10.0x
5.0x

1.9x

2.2x

20.2x

19.0x

10.0x

6.1x

6.2x

Dec
2014

Jun
2015

13.0x

13.7x

10.8x

21.4x

12.5x 13.1x

20.7x

11.4x

3.6x3.5x

0.0x

Jun
2013

Dec
2013

Jun
2014

Dec
2015

Jun
2016

Dec
2016

Jun
2017

Dec
2017

Jun
2018
(E)

(Note 1) LTV (Appraisal Value Base) is calculated by the following formula: (Interest‐bearing debts at the end of the relevant fiscal period, excluding short‐term consumption tax loan) / (Total appraisal value as of the end of the same period). For the calculation of LTV after the acquisition of the preferred equity
interest in the JV TMK which holds Sheraton Grande Tokyo Bay Hotel, “total appraisal value” includes the amount of preferred equity interest contribution by INV to the JV TMK of ¥17,845 million(Note 2) The average interest rate is calculated by the following formula: (Total interest‐bearing debt amount outstanding at the end of each fiscal period or as of June 27, 2018 multiplied by applicable interest rate at the end of each fiscal period for each loans and bonds) / (The interest‐bearing debt amountoutstanding at the end of each fiscal period or as of June 27, 2018)(Note 3) Assuming 1 month TIBOR as of May 31, 2018 was applied as base rate
(Note 4) DSCR is calculated by dividing operating income, as adjusted for depreciation expenses from property rental business and any loss (gain) on sales of property by scheduled prepayments of interest‐bearing debt and interest expense for the relevant period(Note 5) DSCR (excluding hotel variable rent) is in the same manner as DSCR, except for excluding hotel variable rent from operating income8Sponsor Pipeline
Robust pipeline of 26 assets (17 Hotels and 9 Residential assets) provides opportunity for continued growth and stability, evenafter the rebalance

Properties Covered by the MOU (Hotels)1,2

Hotel Composition (*Based on No. of rooms)

Location

Type3

No. of
Rooms

Minato‐ku, Tokyo

Limited327

2 Rihga Royal Hotel Kyoto

Kyoto, Kyoto

Full

489

3 Hotel MyStays Premier Narita

Narita, Chiba

Full

711

4 Hotel MyStays Premier Sapporo Park

Sapporo, Hokkaido

Full

418

5 Fusaki Resort Village

Ishigaki, Okinawa

Resort188

6 Art Hotel Asahikawa

Asahikawa, Hokkaido

Full

265

7 Hotel MyStays Kanazawa Castle

Kanazawa, Ishikawa

Limited206

8 Hotel MyStays Matsuyama

Matsuyama, Ehime

Full

161

9 Hotel MyStays Ueno East

Taito‐ku, Tokyo

Limited150

10 Hotel MyStays Midosuji Honmachi

Osaka, Osaka

Limited108

11 Hotel Mystays Sapporo Nakajima Park

Sapporo, Hokkaido

Limited86

12 Flexstay Inn Sakuragicho

Yokohama, Kanagawa

Limited70

Taito‐ku, Tokyo

Limited

161

Fujiyoshida, Yamanashi

Resort159

15 Hotel Nord Otaru

Otaru, Hokkaido

Limited98

16 Hotel Sonia Otaru

Otaru, Hokkaido

Limited94

17 Art Hotel Niigata Station

Niigata, Niigata

Full

304

No.

Property name

1 Hotel MyStays Premier Akasaka

13 MyCUBE by MYSTAYS Asakusa Kuramae
14 Hotel MyStays Fuji Onsen Resort

Total

3,995

By Property Type

LimitedService
32.5%
Full Service
58.8%
Resort8.7%

By Geography
Okinawaarea
4.7%
Hokkaidoarea
24.1%
Kansai
area
14.9%

Tokyo
23 wards
16.0%

Chubu area
20.8%

Greater Tokyo(ex. Tokyo 23 wards)

19.5%(Note 1) MOU providing preferential negotiation rights(Note 2) We have not decided to acquire any of the properties listed above as of the date of this material and there is no assurance that we will acquire any of these properties in the future(Note 3) “Limited” refers to “Limited Service Hotel, which means a hotel focusing on revenues from room stay and offer limited service regarding foods and beverages, banquet, spa or gymnasium facilities”, “Full” refers to “Full Service Hotel,
which means a hotel having segments of stay, foods and beverages, and banquet”, and “Resort” refers to “Resort Hotel, which means a hotel located at tourist destinations or recreational lots, having segments of stay, foods and beverages,
and incidental facilities”

9MyStays Hotel Operations and Initiatives
MyStays Uniquely Caters to Inbound Tourists
Increased revenue from foreign guests1
50%

YoY+3.5ptYoY+18.7pt

40%

YoY+3.1pt30%

MHM manages 46 hotels owned by INV
and overall manages 85 hotels in Japan(as of May 1, 2018)
 MHM recently launched its new website
and is in the process of launching a new
online reservation system in order toincrease direct bookings
YoY+11.9pt

20%

10%

3.8%

34.4%

37.9%

41.0%

2015

2016

2017

15.7%

0%

2013

MHM Websites

2014

Major Recent Initiatives to Capitalize on Updated Customer Preferences & Market Trends
Revenue Management
ExpertiseNon‐smoking Rooms


RevPAR has increased
by 4.9%2 on average. 650
rooms were converted
to non‐smoking rooms,
reflecting customer
preferences

Hotel MyStays Hamamatsucho

New revenue management
system based on machinelearning to improve theoverbooking algorithms tohelp offset cancelation andimprove revenue at the hotels
overall

Increased 99%+ occupied
nights from 1,467 to 1,503 YoY
for 2018 YTD3

Implementation of new AI
revenue management software

Alliance with
Alibaba Group (Fliggy)

Extensive Online MarketingAffiliate marketing programwith CTBC Bank Co., Ltd.
(Taiwan’s largest credit card
issuer)

Jointmarketingprograms
with Hong
Kong
Airlinesand ANA /Union Pay

61 MHM hotels on the Fliggy
platform, of which 29 hotels
are owned by INVWon “Most Popular Store of
W11 2017” during the 11.11
Global Online Shopping
Festival held on November
11, known as Single’s Day in
China

CTBC campaign(Note 1) Overseas Sales Ratio refers to the sales revenue booked through overseas Online Travel Agents as a percent of the total room revenue, and is calculated based on the 29 hotels out of the 41 hotels managed by MHM for Invincible’s portfolio as of theend of 2017, and does not include the following 12 hotels which have no data for the period from 2013 through 2017 due to rebrand etc. (Excluded properties: Hotel MyStays Nagoya‐Sakae, Hotel MyStays Haneda, Hotel MyStays Utsunomiya, Hotel
MyStays Gotanda Station, Hotel Epinard Nasu, Hotel MyStays Hamamatsucho, Hotel MyStays Premier Kanazawa, Hotel MyStays Premier Hamamatsucho, Hotel MyStays Dojima, Hotel MyStays Shin‐osaka CC, Hotel MyStays Premier Omori, Beppu
Kamenoi Hotel, Hotel MyStays Sapporo Station)(Note 2) Based on the hotels owned by Invincible from as of the end of April 2018 that completed such conversion by the end of December 2017, and have both smoking room and non‐smoking room after such conversion. The percentage is calculated bycomparing (i) with (ii); (i) the average of the RevPAR from July 2018 toApril 2018 of smoking room multiplied by the number of rooms converted at each hotel (ii)the average of RevPAR for the same term of non‐smoking room multiplied by the same
number of rooms at each hotel(Note 3) Based on 35 hotel properties; of the 41 MHM operating hotels owned by INV from January to April 2018, excluding properties that include the period under renovation in 2016 or 201710

Potential Synergies with SoftBank GroupSoftBank, including its group companies, focuses on multiple telecommunication and technology fields including advanced
telecommunications, internet services, AI (artificial intelligence), smart robotics, IoT and clean energy technology providers. SoftBank has
74,952 employees globally1

MyStays and SoftBank are working to introduce SoftBank’s Pepper robot to MyStays hotels in order to sign up more MyStays members andprovide multilingual concierge services such as introducing hotel services and local attractions



MyStays and SoftBank are discussing other areas of potential cooperation around AI, robotics, and marketing

Introduction of Pepper as remote concierge in MyStays hotels

Major Companies in SoftBank Group Pepper was introduced in three MyStays hotels from July 2017
 Pepper provides multilingual concierge services



Sprint Corporation

Yahoo Japan Corporation



Brightstar Corp.



SoftBank Commerce & Service Corp.



Arm Holdings plc



SoftBank Vision Fund L.P.

(Note 1) As of March 31, 201811

Disclaimer
This material is for informational purposes only and not for solicitation to invest in, or recommendation to buy, certain
products of INV. You should consult with securities firms if you intend to purchase investment units of INV.
This material does not constitute or form a part of any disclosure document or an asset management report required by
the Financial Instruments and Exchange Act of Japan or regulations thereunder, the Investment Trust and Investment
Corporation Act of Japan or regulations thereunder, or the listing rules of the Financial Instruments Exchanges or otherrelated rules and regulations.
This material contains forward‐looking statements and these statements are based on certain assumptions and premises inconsideration of the available information as of the date of this material; therefore there may be currently unknown risks
and uncertainties in such statements. The contents of forward‐looking statements are subject to such risks, uncertainties,
assumptions and other factors. Accordingly, there is no assurance as to actual business performance, results of operations
or financial conditions.
INV has given its attention that the information provided herein does not contain mistakes or omissions. However, there is
no assurance given as to the accuracy, certainty or completeness, validity or fairness of any such information and suchinformation is subject to revision or retraction without prior notice.

INQUIRIES:
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Tel. +81‐3‐5411‐2731