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 June 30, 2015 (January 1, 2015 to June 30, 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
Significant Growth of AUM and DPU
Performance of Existing 20 Hotel Properties Solid Fundamentals for Hospitality Sector
Continuous Improvement of Financial Condition
External Growth from Sponsor Support – HotelI.

Asset Management Report

II.

Balance Sheet

III.

Statement of Income

IV.

Statement of Unitholders’ Equity

V.

Notes

VI.

Statement of Cash Distribution

VII.

Audited Report

VIII.

Statement of Cash Flows (Reference Information)

Global Offering & Historical Unit Price‐ Steady Expansion of Market Capitalization and Asset Size
Portfolio Data
Newly Acquired 3 Hotels (acquired on February 6, 2015)
Information for Unitholders

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

We hereby provide you with a report on INV’s asset management and financial results for the 24th
period (covering the period from January 1, 2015 to June 30, 2015, the “reporting period”).

With respect to the external growth of INV’s properties in the reporting period, we acquired 3 hotels(total acquisition price: JPY 13,261 million) on February 6, 2015 by utilizing excess cash-on-handand new loans, and resolved on June 25, 2015 to acquire 11 hotels and 3 residential properties (totalacquisition price: JPY 35,258 million) on July 16, 2015 with the funds raised via a global public
offering of new investment units (the “Capital Increase”) and new loans.

With respect to the financial operations, we decided to refinance all existing loans on July 16, 2015
concurrently with the Capital Increase and the acquisition of the above properties in order torefinance all secured bank loans to an unsecured bank facility, lengthen and diversify the debt
maturity duration, and further reduce interest rates.

For the reporting period, due to the acquisition of 3 new hotels and the acceleration of internal
growth from the existing hotel portfolio backed by the significant increase in the number of inboundvisitors to Japan; hotel rents increased by JPY 313 million (15.1%) from the previous period to JPY
2,382 million, and INV’s total operating revenues increased by JPY 364 million (7.9%) to JPY 4,974
million.

As a result, net income increased by JPY 337 million (17.2%) to JPY 2,295 million, andDPU (distribution per unit) increased by JPY 127 (17.3%) to JPY 860.

After the reporting period, in addition to the Capital Increase, the acquisition of the above-mentioned
14 properties and the de-collateralization of loans, INV acquired 3 hotels (total acquisition price:
JPY 7,369 million) on August 28, 2015 by utilizing the funds raised through new loans as well aspart of the excess cash-on-hand obtained from the Capital Increase. As a result, INV’s total assets
under management as of the end of August 2015 increased to JPY 173,815 million, a JPY 55,888
million (47.4%) increase compared to JPY 117,927 million as of the end of the fiscal period ended
December 31, 2014 (previous period; the 23rd period).
increase to JPY 1,924, a 47.3% increase year-on-year.

The annual DPU for 2015 is expected to

INV’s market capitalization as of August 25,

2015 was JPY 201,840 million, rising it to the 18th-largest market capitalization among the 53 listed
J-REITs in Japan (market capitalization at the end of December 2013: JPY 30,566 million, which12

(Note)

The forward-looking statements, forecasts and goals mentioned above are based on available information,
assumptions and estimates as of August 26, 2015. These assumptions and estimates are unavoidably
uncertain, and could be affected by various risks and factors beyond INV’s control. Thus, no guarantee
can be made regarding the realization of such future forecasts and targets, and actual results may varysignificantly.

3

Summary of Financial Results

Period from
July 1, 2013 to
December 31, 2013

Period fromJanuary 1, 2014 toJune 30, 2014

Period from
July 1, 2014 toDecember 31, 2014

Period fromJanuary 1, 2015 toJune 30, 2015

Operating Revenue(Thousands of yen)

2,740,449

3,775,772

4,610,717

4,974,760

Ordinary Income(Thousands of yen)353,360

902,420

1,958,607

2,295,909

Net Income(Thousands of yen)352,755

901,815

1,958,002

2,295,304

Net Assets(Thousands of yen)

35,844,824

36,373,796

61,392,392

61,731,550

Total Assets(Thousands of yen)

79,176,632

79,261,754

130,477,232

136,299,746

Net Assets per Unit
(Yen)

22,78523,121

23,005

23,132

Net Assets/Total Assets
(%)

45.3

45.9

47.1

45.3

Distribution per Unit
(Yen)

237

573

733

860

Number of Units Issued(Unit)

1,573,179

1,573,179

2,668,686

2,668,686(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.

4

Value Creation Track Record
After the capital infusion from Fortress Group (July 2011), the Market Capitalization of
INV increased from JPY 6,959 million, the amount just before the capital infusion (as ofJuly 14, 2011) to JPY 201,840 million (as of August 25, 2015)

Distribution per Unit

5

6

External Growth & De-collateralization
External Growth Supported by Stronger Sponsor Support(Note 1)
(Note 2)

(Note 3)

The total amount of 3 hotels acquired in February 2015, 11 hotels and 3 residential properties acquired inJuly 2015 and 3 hotels acquired in August 2015 is described. The same shall apply hereinafter.
For 91 properties held as of June 30, 2015 and 3 properties acquired in February 2015, appraisal value asof June 30, 2015; for 14 properties (11 hotels and 3 residential properties) acquired July 2015, appraisal
value as of May 1, 2015; for 3 properties acquired, Flexstay Inn Ekoda, appraisal value as of August 10,2015 and other two properties, appraisal value as of July 31, 2015.
The “Appraisal NOI Yield” is calculated by dividing the net operating income (NOI) using the direct
capitalization method in the appraisal report, by the total anticipated acquisition price and rounding to thefirst decimal place. The “Appraisal NOI Yield after Depreciation” is calculated by dividing the NOI
after deducting the depreciation expenses calculated by INV by the total acquisition price and rounding to
the first decimal place.

7

De-collateralization of Existing Debt and Reduction of Loan Cost

(Note 4)(Note 5)(Note 6)(Note 7)The interest rates applicable for the period of June 30, 2015 to July 30, 2015
Calculated by the weighted average interest rate based on the borrowing amountThe borrowings will be prepaid in the amount equivalent to the refund of consumption tax, which were
paid in relation to the acquisition of the trust beneficiary interests acquired by the borrowings by
Syndicate Loan (E), in the case where the above-mentioned consumption tax refunds are received. The
above-mentioned borrowings (JPY 1,401 million) are defined as borrowings corresponding to the
expected consumption tax refund.
Interest rate (per annum) provided in Total debt is the weighted average interest rate based on the
borrowing amount, excluding borrowings corresponding to the expected consumption tax refund,assuming that the one-month JPY TIBOR as of August 28, 2015, is applied. Regarding average interest
rate of Term Loan (A), the first interest calculation period uses two-month JPY TIBOR.

8

Offering Overview

9Overview of Acquisition■ ■ Acquisition of 17 hotels and 3 residential properties in and after February 2015 by August
2015■ Total acquisition value of 20 properties is JPY 55,888 million, Appraisal NOI yield is 5.9%,
and the operation assets of INV increased by 47.4% from the end of December 2014.

Acquisition Summary■ Hotel■ Residential■ Grand Total / Average(Note 1)The “Appraisal NOI Yield” is calculated by dividing the net operating income (NOI) using the direct10capitalization method in the appraisal report, by the total anticipated acquisition price and rounding to thefirst decimal place. The “Appraisal NOI Yield after Depreciation” is calculated by dividing the NOI
after deducting the depreciation expenses calculated by INV by the total acquisition price and rounding to
the first decimal place.

11

Good-quality Portfolio Focusing on the Great Tokyo Area

(Note 1)
(Note 2)“Greater Tokyo” is “Tokyo”, “Kanagawa,” “Chiba” and “Saitama”.
“Chubu Area” is “Nagano”, “Ishikawa”, “Shizuoka”, “Toyama”, “Yamanashi”, “Ehime”, “Mie”,“Niigata”, “Gifu”, and “Fukui”.

12Continuous Improvement of Financial Conditions■ By de-collateralization of Existing Debt, INV considers obtaining credit rating and theissuance of investment corporation bonds■ INV aims for further reinforcement of financial base and improvement of stability
De-collateralization of Existing Debt and Reduction of Loan Cost

(Note 1)
(Note 2)
(Note 3)(Note 4)The interest rates applicable for the period of June 30, 2015 to July 30, 2015
Calculated by the weighted average interest rate based on the borrowing amountThe borrowings will be prepaid in the amount equivalent to the refund of consumption tax, which were
paid in relation to the acquisition of the trust beneficiary interests acquired by the borrowings by
Syndicate Loan (E), in the case where the above-mentioned consumption tax refunds are received. The
above-mentioned borrowings (JPY 1,401 million) are defined as borrowings corresponding to the
expected consumption tax refund.
Interest rate (per annum) provided in Total debt is the weighted average interest rate based on the
borrowing amount, excluding borrowings corresponding to the expected consumption tax refund,assuming that the one-month JPY TIBOR as of August 28, 2015, is applied. Regarding average interest
rate of Term Loan (A), the first interest calculation period uses two-month JPY TIBOR.
LTV (Appraisal base)(5) and Average Interest Rate(5)DSCR (Based on Portfolio) / DSCR (Excluding Hotel Variable Rent Portion)(6)(7)13Bank Formation composed by mainly Megabanks

Dispersion of Maturity (8)14(Note 5)(Note 6)(Note 7)(Note 8)Calculated using the formula that is LTV (appraisal value basis) at each end of period = debt outstandingat the end of period / aggregate appraisal value at the end of period. LTV (appraisal value basis) as ofJune 30, 2015 is calculated by dividing interest-bearing debt outstanding as of June 30, 2015 (excluding
JPY 321 million borrowings corresponding to the expected consumption tax refund) by aggregate
appraisal value of 94 properties held as of the end of June 2015. LTV as of August 28, 2015 iscalculated by dividing interest-bearing debt outstanding after refinance on July 16, 2015 and new debt
financing on August 28, 2015 (excluding JPY 1,401 million borrowings corresponding to the expectedconsumption tax refund) by aggregate appraisal value of 94 properties held as of the end of June 2015, 14
properties acquired on July 16, 2015 and 3 properties to be acquired on August 28, 2015. Average
financing rate is calculated by dividing total of product of the borrowing amount at the end of period foreach financing and the interest rate applicable thereto at the end of period (provided, however, withrespect to the interest rates applicable after the new debt financing on August 28, 2015, it is assumed thatthe one-month JPY TIBOR on that date is applied) by total debt.
DSCR (based on Portfolio) is calculated using the following formula; (Operating Income + Depreciation
Expenses) ÷ (Contract Prepayment Amount + Interest Amount)
DSCR (excluding Hotel Variable Rent) is calculated using the following formula; (Operating Income Hotel Variable Rental Income + Depreciation Expenses) ÷ (Contract Prepayment Amount + Interest
Amount)Excluding borrowings corresponding to the expected consumption tax refund

15

16

Robust Performance of Hotel Assets ‐ Strong ADR / GOP Growth■ ADR, GOP and NOI of the acquired hotels in Jan. - Jul. 2015 increased by +20.0%,+27.0% and 29.4% from the previous year, respectively and growth was accelerated■ ADR, GOP and NOI in 2014 was +11.9%, +16.6% and 18.2%, respectively and showed
high growth

ADR Growth (Annual)

ADR Monthly Trend(1)

GOP Growth (Annual)(1)

GOP Monthly Trend

17(1)(2)(1)(2)NOI Growth (Annual)

NOI Monthly Trend(Note 1)

(Note 2)

(1)(2)(1)

Based on 33 hotels in which variable rent structures are adopted, among the 37 hotels held by INV as ofAug. 28, 2015 (except for Super Hotel Shinbashi/Karasumoriguchi, Super Hotel Tokyo‐JR Tachikawa
Kitaguchi, Super Hotel JR Uenoiriyaguchi and Comfort Hotel Toyama, in which fixed rent schemes are
adopted). Year on year figures are based on 32 hotels, excluding Hotel MyStays Haneda whose data
before September 2014 (because the hotel opened in September 26, 2014).
Regarding APA Yokohama‐Kannai, rent income which is received by INV is added to GOP.

18

Ⅰ.

Asset Management Report

Overview of Asset Management
1

Trends in Investment Corporation’s Operating Results

By Period

Calculated period

Operating revenues(Note 1) (Thousands of yen)

Operating Results(Rental revenues)(Thousands of yen)

Operating expenses(Thousands of yen)

(Property-related expenses)(Thousands of yen)

Operating income(Thousands of yen)

Ordinary income(Thousands of yen)

Net income(Thousands of yen)

Total assets(a) (Thousands of yen)(change from last period)
Asset Condition

Interest-bearing debt
Net assets(change from last period)(Thousands of yen)(b) (Thousands of yen)

Dividend Status

22nd

23rd

24th

Fiscal Period

Fiscal Period

Fiscal Period

Fiscal Period

Fiscal Period

Jan. 1, 2013 toJul. 1, 2013 toJan. 1, 2014 toJul. 1, 2014 toJan. 1, 2015 toJun. 30, 2013

Dec. 31, 2013

Jun. 30, 2014

Dec. 31, 2014

Jun. 30, 2015

2,760,177

2,740,449

3,775,772

4,610,717

4,974,760

2,760,177

2,740,449

2,772,419

4,610,717

4,974,760

1,528,940

1,474,679

1,541,127

1,840,796

2,163,828

1,295,403

1,261,221

1,281,791

1,586,854

1,834,039

1,231,237

1,265,770

2,234,644

2,769,920

2,810,931

335,683

353,360

902,420

1,958,607

2,295,909

335,078

352,755

901,815

1,958,002

2,295,304

80,249,063
0.1

79,176,632(1.3)

79,261,754
0.1

130,477,232
64.6

136,299,746
4.5

43,851,500

41,310,000

41,000,850

67,260,000

72,301,000

32,848,025
0.5

35,844,824
9.1

36,373,796
1.5

61,392,392
68.8

61,731,550
0.6

26,134,396

29,134,389

29,134,389

53,096,413

53,096,413

355,949

372,843

901,431

1,956,146

2,295,069

106.0

105.7

100.0

99.9

100.0

1,348,292

1,573,179

1,573,179

2,668,686

2,668,686

24,36322,78523,121

23,005

23,132

264

237

573

733

860

264

237

573

733

860

(%)
(Thousands of yen)

Total distribution(c) (Thousands of yen)

Number of investment units

21st

(%)

Total contribution

Dividend payout ratio

20th(Note 2) (%)(d) (Units)

Issued and outstanding
Information per Unit

Net assets per unit(b) / (d) (yen(Note 3))Distribution per unit(c) / (d) (yen)(Profit distribution per unit)(yen)(Excess profit distribution per unit)(yen)

Financial Measures

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

19

—

—

—

—

—

0.4

0.4

1.1

1.9

1.7

0.8

0.9

2.3

3.7

3.5

1.0

1.0

2.5

4.0

3.7

2.1

2.0

5.0

7.9

7.5

Capital ratio(change from last period)
NOI

40. 9

(b) / (a) (Note 4) (%)(%)(Note 4) (Thousands of yen)

45.3

45.9

47.1

45.3

0.2

4.3

0.6

1.2

(1.8)

2,008,413

2,006,648

2,018,542

3,861,122

4,127,486(Net Operating Income)(Note 1) Consumption taxes etc. are not included in operating income.
(Note 2) Dividend payout ratio is calculated by dividing profit distribution by unit by net incomethat 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), andin August 2006 was listed 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 the sponsor changed to the Fortress Group.

Ever since the commencement of sponsorship from the Fortress Group, INV has been focused on the
improvement of occupancy rates as well as the reduction of expenditures related to its properties andinvestment corporations by strengthening its asset management capabilities. Furthermore, in September
2012, INV newly acquired 24 residential properties without issuing new equity, thereby improving theearning power of its portfolio and establishing a revenue base in order to implement stable

20

distributions.

Following such measures, INV refinanced existing bank borrowings with new borrowings throughsyndicate loans arranged by Sumitomo Mitsui Banking Corporation and The Bank ofTokyo-Mitsubishi UFJ, Ltd. together with funds raised via a third-party allotment mainly to theFortress Group on December 20, 2013. Through such refinancing, INV reduced its interest-bearing
debt ratio, improved its earning power due to the significant reduction in interest expenses, andstrengthened its lender formation, thereby improving its financial stability and establishing a financialbase for future growth.

With this platform as a base for future growth, INV acquired its first two limited-service hotel
properties on May 23, 2014. On June 23, 2014, Consonant Investment Management Co., Ltd., the asset
manager to which INV entrusts the management of its assets (the “Asset Manager”) revised theInvestment 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 risegoing forward. In July 2014, INV acquired 18 limited-service hotels from the sponsor group using
funds raised from a global public offering and the refinancing of existing loans. In the fiscal period
ended June 2015 (the "Reporting Period"), INV acquired two hotels from the sponsor group and one
hotel from a third-party on February 6, 2015 using the excess cash-on-hand and new loans, without
issuing new equity.

INV’s distributions per unit ("DPU") from July 1, 2014 to June 30, 2015 reached JPY 1,593, an
increase of approximately 1.96 times year-on-year. INV's end-of-term market capitalization was JPY
174,265 million, approximately 4.56 times larger than the final day of June of the previous year.
At the board meetings of INV and the Asset Manager held on June 25, 2015, resolutions were passed topursue a global public offering and new share issuance (collectively, the "Capital Increase"), with thefunds raised through the Capital Increase and new loans to acquire 11 hotels and three residential
properties (the "Acquisition"), and to refinance all existing loans (the "Refinancing"; collectively with
the Capital Increase and the Acquisition, the "Measures"). In addition, on June 25, 2015, INV enteredinto 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 will achieve further growth in DPU and an increase inscale for both the portfolio and market capitalization. Furthermore, the conversion of all existingloans into unsecured debt has further strengthened INV’s financial soundness and stability.

21

The Measures are described in greater detail below in “6. Significant Subsequent Events”.

(2)

Operational Environment and Performance

In the Reporting Period, real GDP growth rate for the period from April to June 2015 showed adecline of 1.6% year-on-year compared to 4.5% increase year-on-year from January to March.
However, the Japanese economy saw strong corporate activity in the first half of the year, as
corporate profits for the January-March 2015 quarter reached pre-Lehman bankruptcy level of 2007
and capital investment increased. As a result, the employment and wage environment showed further
improvement, as the unemployment rate for June 2015 fell to 3.4%, the jobs-to-applicants ratio was
1.19x, and the number of unemployed declined for the 61st consecutive month. Going forward, it isnecessary to take notice of the risk such as slowdown in overseas economies including China, but
the domestic economic upswing is expected to continue due to the recovery in consumer spendingon the back of the improved employment and wage environment, the impact of the government’s
financial policy and the Bank of Japan’s large-scale monetary easing policy, and the increase incorporate profits in connection with the decline in the price of crude oil.

Regarding the real estate investment market, real estate transaction prices continued to rise in Tokyoand other 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 (April 2015) conducted by the Japan Real
Estate Institute, investors expect capitalization rates for offices, residences, retail facilities, andhotels to continue to decline. Although investors who responded that they will make newinvestments over the next year dropped by 4 points to 90% from the previous survey (October 2014),
investment demand remains high and maintains a positive stance.

Regarding the property rental market, Tokyo office building vacancy rates continue to decline while
rates are bottoming out in parts of other major cities such as Osaka and Nagoya. Large corporations
are consolidating their floor space as well as expanding leasing space in the same buildings. Rents
increased mainly for newly constructed buildings and premium properties in the Tokyo area. With
respect to the residential sector, market rent trends for small-type city-center properties arecontinuingly improving. In the hotel sector, the Japanese government’s promotion of tourism
initiatives such as airport capacity expansion, the entry of LCC’s into the Japanese market, and therelaxation of visa requirements for some Asian countries, etc., coupled with macro structural changes
such as a sharp increase in the number of cross-border travelers due to the global rise of the
middle-income bracket, has led to a significant increase in the number of international visitors toJapan from China and Southeast Asian countries such as Thailand, Malaysia, the Philippines,

22

Indonesia and Vietnam. This robust combination helped Japan log a record high of 13.41 million
visitors in 2014, providing firm demand for accommodations. In the current reporting period, thistrend further accelerated and the number of international visitors to Japan from January to July 2015
increased to 11.05 million visitors (+47% year-on-year), leading to a significant increase in foreigner
lodging demand.

INV implemented a rent increase program for new residential leases and renewals as well as aprogram to reduce leasing costs for residential properties based on a market analysis of each unit andproperty. As a result, in the Reporting Period, INV realized a rent increase for 68.0% of the newresidential lease contracts or a rent increase of 1.9% compared to the previous rent, and a rent
increase for 39.2% of contract renewals or a rent increase of 1.2% compared to the previous rent.
Net leasing costs (advertising expenses + free rent – key money) were reduced to an average of 0.90
months per new lease, a reduction of 0.28 months year-on-year.
Regarding hotels, INV acquired two hotels from the sponsor group and one hotel from a third party
at a total price of JPY 13,261 million on February 6, 2015. In terms of internal growth, in addition to
the abovementioned external environmental factors, the hotel operators adeptly captured inbounddemand through strong revenue management techniques. INV’s 23 acquired hotels recorded asignificant growth in the Reporting Period led by an occupancy rate (Note 1) of 91.9% (+3.4 points
year-on-year), ADR (Note 2) of JPY 8,130 (+20.9% year-on-year), and RevPAR (Note 3) of JPY
7,470 (+25.4% year-on-year). The ratio of overseas sales (Note 4) at the acquired 23 hotels increased
to 33.7% (+25.1 points year-on-year) (Note 5) for the Reporting Period.

As a result, INV’s average occupancy rate across the entire portfolio for the Reporting Period
maintained a high level of 96.8%, and the NOI increased by 6.9% year-on-year to JPY 4,127 million.
At the end of the Reporting Period, the number of properties held by INV totaled 94 properties
including 23 hotels, 63 residential properties, seven office buildings and retail facilities as well as
one parking lot at a total acquisition price of JPY 131,188 million and total leasable area of
240,858.19 m2.

As a result of the internal growth performance and trends in the real estate investment and rental
market, as well as the strong performance of the hotels, the total appraisal value at the end of theReporting Period was JPY 146,874 million, an increase of JPY 6,856 million (+4.9%) year-on-year(Note 6). In particular, the appraisal value of the 23 hotels increased to JPY 5,336 million (+8.1%)
year-on-year (Note 6) and achieved an unrealized gain ratio of 15.4% (Note 7), significantly helping
to continually enhance the overall portfolio asset value.

23

(Note 1) “Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period ÷ total numberof rooms available during the same period (number of rooms x number of days)(Note 2) “ADR” means average daily rate, and is calculated by dividing total room sales (except forservice fee) for a certain period by the total number of days per room for which each room
was occupied during the same period.
(Note 3) “RevPar” means revenue per available room per day, and is calculated by dividing totalroom 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 bymultiplying occupancy rates by ADR.
(Note 4) “Overseas sales ratio” is the ratio of sales amount through overseas web agents to revenues.
Overseas sales ratio is based on the data of 20 hotels of the existing 23 hotels, excluding
Hotel Vista Premio Dojima, APA Hotel Yokohama-Kannai and Hotel Nets Hakodate,because the hotel operator is not K.K. Mystays Hotel Management (“MHM”).
(Note 5) The performance of the same period in the previous year (from January to June 2014) isbased on the operational performance data provided by the seller of the 23 hotels before
INV acquired the 23 hotels. Likewise, the performance of the period from January 1, 2015
to February 5, 2015 of the three hotels INV acquired on February 6, 2015 is based on theoperational performance data provided by the seller of those hotels.
(Note 6) Of the 23 hotels, the comparison was made after the appraisal value as of December 1,
2014 of the three properties acquired as of February 6, 2015 was added to the total
appraisal value of the portfolio assets of the end of the previous period.
(Note 7) The unrealized gain ratio is calculated using the following formula: (the appraisal value asof the end of the Reporting Period - book value as of the end of the Reporting Period) ÷book value as of the end of the Reporting Period.

Regarding the 11 hotels and three residential properties acquired by funds procured through a global
offering and decided upon by INV’s Board of Directors on June 25, 2015, refer to “6. Significant
Subsequent Events” below.

(3)

Overview of Fund Raising

In the Reporting Period, INV raised funds through a new syndicate loan (total borrowings: JPY
6,241 million; interest at time of borrowing: 0.93%) on February 6, 2015, with Sumitomo Mitsui
Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank, Ltd. as arrangers, toacquire three new hotels and pay related expenses. Using consumption tax refunds from two hotels

24acquired on May 23, 2014, INV repaid, on April 30, 2015, the portion of Syndicate Loan (C) that
corresponds to the borrowings corresponding to the expected consumption tax refund (Note 1), of
JPY 1,200 million.

As a result of the above measures, the outstanding balance of interest-bearing debt for INV was JPY
72,301 million, and the Loan-to-Value ratio was 52.8% (Note 2) as of the end of the Reporting
Period.

As described below in “C Subsequent material events”, INV decided on June 25, 2015 to procure a
new unsecured syndicate loan (total amount borrowed: JPY 88,338 million; interest at time ofborrowing: 0.63%) dated July 1, 2015 and executed on July 16, 2015 for use as a portion of thefunds to acquire 11 hotels and three residential properties on July 16, 2015 and repayment of allexisting loans (Syndicate Loan (C), Syndicate Loan (D) and Prudential LPS Loan B).
Through the Refinancing, INV converted all debt to unsecured debt, lengthened the debt maturity
duration and further reduced loan costs. Henceforth, INV moved forward with a financial strategy
that takes into consideration obtaining a credit rating and the issuing investment corporation bonds.

(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, whichwere paid in relation to the acquisition of the trust beneficiary interests acquired by theborrowings executed at the same time, in the case where the above-mentioned
consumption tax refunds are received. 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 321 million
borrowings corresponding to the expected consumption tax refund) ÷ amount of total
assets at end of the Reporting Period x 100

25

3Changes in Number of Investment Units Issued and Outstanding

Changes in the number of investment units issued and outstanding and unitholders’ equity by the endof the reporting period are as follow.

Date

Type of issue

Number of investment
units

issuedUnitholders’ equity (yen)Referenceandoutstanding (units)
Increase
January

Private18, 2002

placement
for

Total

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)

incorporation
DecemberPrivate26, 2003

placement

January

Private9, 2004

Placement

January

Private21, 2004

placement

January

Private27, 2004

placement

January

Private28, 2004

placement

January

Private31, 2004

placement

February

Private5, 2004

placement

February

Private7, 2004

placementMay

Public17, 2004

offering

February

Public7, 2005

offering

July

Public31, 2006

offering

February

Unit split

26

Date

Type of issue

Number of investment
units

issuedUnitholders’ equity (yen)Referenceandoutstanding (units)
Increase

Total

Total

Increase

1, 2010February

Merger

1, 2010
July

Third-party

29, 2011

allotment

DecemberThird-party

20, 2013

allotment

July

Public16, 2014

offering

AugustThird-party

13, 2014

allotment

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)55,5072,668,686

1,214,104,611

53,096,413,980(Note 11)

(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 acquisitionof 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 acquisitionof 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 acquisitionof 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 andInvestment 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 make repayment of existing debt, etc.
(Note 9) New investment units were issued in a third party allotment at a price of 13,340 yen perunit to make 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 yen after 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 perunit for the purpose of cash reserve to appropriate to repayment in future borrowings.

27

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(Unit: yen)
Period20th

Closing

Fiscal

21st

Fiscal

22nd

Fiscal

23rd

Fiscal

24th

FiscalPeriodPeriodPeriodPeriodPeriodJune 2013

DecemberJune 2014

DecemberJune 2015

Month

2013

2014

Highest14,48020,00024,76050,90066,400

Lowest6,230

12,61016,74023,02044,5004Distribution PerformanceWith respect to distributions, it was determined to distribute all net income excluding fractions of
distribution per investment unit that are less than one yen.

As a result, the distribution per unit for

the reporting period was determined to be JPY 860.

Period20th Fiscal

21st

22nd Fiscal

FiscalCalculated Period

Total

23rd

24th Fiscal

FiscalJan. 1, 2013

July 1, 2013

Jan. 1, 2014

July 1, 2014

Jan 1, 2015

to June 30,

to Dec. 31,

to June 30,

to Dec. 31,

to June. 30,

2013

2013

2014

2014

2015

unappropriatedretained earnings forperiod (thousands of

449,196446,003

974,975

2,031,546

2,370,704

93,24773,15973,54375,39975,634355,949

372,843

901,431

1,956,146

2,295,069

(264)

(237)

(573)

(733)

(860)

yen)
Reserved

profit(thousands of yen)Cashdistribution(thousands of yen)(Distribution per unit)
(yen)

28

Period

20th Fiscal

21st

22nd Fiscal

FiscalDistribution

amount(thousands of yen)(Distribution per unit)(yen)Contribution

Fiscal372,843

901,431

1,956,146

2,295,069

(264)

(237)

(573)

(733)

(860)

−

−

−

−

−

(−)

(−)

(−)

(−)

(−)

returnreturnper unit ) (yen)524th Fiscal

355,949(thousands of yen)(Contribution

23rd

Future Operational Policy and Issues to be Addressed

Forecast for Next Period and Issues to be Addressed

Since July 2011, when the Fortress Group became sponsor, as mentioned above, INV has enhanced
unitholder value.
Going forward, INV will implement various strategies to maintain further growth, including thefollowing 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 REIT 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 acquisition of new properties focusing on hotels,
where 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 andstability.

29

In regards to hotels, INV will take into consideration the trends in foreign visitors, demands ofbusiness and leisure customers, the competitive hotel environment, and leasing contract types when
making investment decisions, with the aim of acquiring properties where growth and stability ofgross operating profit (GOP) and rental revenue are forecasted to increase.

In regards to residential properties, INV will analyze occupancy rates, rental market trends, thepresence of competing properties and other factors, and consider acquiring mainly small-type
properties in large cities with strong competitiveness.

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 Fortress Group.

Properties Acquired from affiliates of the Fortress Group (including anticipated acquisitions)
Date

Details

Total acquisition price

September 2012

Acquired 24 residential properties

JPY 14,043 million

May 2014

Acquired two hotels

JPY 5,435 million

July 2014

Acquired 18 hotels

JPY 39,938 million

February 2015

Acquired two hotels

JPY 4,911 million

July 2015
August 2015 (anticipated)

Total

Acquired 11 hotels and threeresidential properties

JPY 35,258 million

Acquired one hotel

JPY 5,069 million

61 properties

JPY 104,654 million(of which 27 are residential and 34(of which residential: JPY 19,142

are hotels)

million; hotels: JPY 85,512 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 thenumber of properties that the Fortress Group is invested in exceeds 1,400.

In order to ensure future

growth options for the portfolio, INV entered into the MOU with the Fortress Group that provides
preferential negotiation rights with respect to the acquisition of 21 hotels and nine residential
properties as of June 25, 2015 (see the table below) (Note 1).

In addition, by utilizing the property transaction information available through the Fortress Groupand 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 an30

increase in DPU.
No. Asset Name

1

2

3

4

5

Asset Type

Hotel

MyStays Limited

Gotanda-Ekimae (Note 2)

Location
Service Shinagawa-ku,

Hotel

Hotel MyStays Akasaka (Note Limited
3)

Tokyo
Service

Hotel

Hotel MyStays Kanazawa
Hotel

LimitedService Kanazawa-shi,

HotelIshikawa

MyStays Limited

Fukuoka-Tenjin
HotelService Fukuoka-shi,

Hotel

MyStays

Yokohama Limited-Kannai (Note 4)

Fukuoka
Service Yokohama-shi,

Hotel

Hotel

Minato-ku,Tokyo

MyStays Limited

Kanagawa
ServiceNo. ofTop

Rooms

Tourist Destinations
333 ✔
327 ✔

244
217 ✔
166 ✔

Minato-ku, Tokyo105 ✔

Osaka-shi, Osaka

54 ✔

Nerima-ku, Tokyo

210 ✔

Full Service Hotel

Kyoto-shi, Kyoto

475 ✔

10 Narita Excel Hotel Tokyu

Full Service Hotel

Narita-shi, Chiba

706 ✔

11 Art Hotels Sapporo

Full Service Hotel

6

Hamamatsucho

Hotel

7

Hotel MyStays Shinsaibashi

8

Flexstay Inn Ekoda (Note 5)

9

12

Rihga Royal Hotel Kyoto(Note 6)

Best

Western

Hotel

13 Best Western Hotel Fino Oita

14 Takamatsu Tokyu REI Hotel

16 Comfort Hotel Kurosaki

Service

Hotel
LimitedService

Hotel

Fino Limited

Sapporo15 Comfort Hotel Maebashi

Limited

Hokkaido

Service Sapporo-shi,

Hotel
Limited

Sapporo-shi,

Hokkaido
Service

Hotel

Oita-shi, Oita

LimitedService Takamatsu-shi,

HotelKagawaLimitedService Maebashi-shi,

Hotel

Gunma

LimitedService Kitakyushu-shi,

Hotel

Fukuoka

31

412 ✔
242 ✔

145

191

153
151 ✔

10

InboundNo. Asset Name

17 Comfort Hotel Tsubame-Sanjo

18 Comfort Hotel Kitami

Asset Type
LimitedLocation
Service

Hotel
LimitedNo. ofTop

Rooms

Tourist Destinations

Sanjo-shi, Niigata

132

Service Kitami-shi,

127 ✔

Hotel

Hokkaido

19 Hotel Naqua City Hirosaki

Full Service Hotel

Hirosaki-shi, Aomori

134

20 Beppu Kamenoi Hotel

Resort Hotel

Beppu-shi, Oita

322

21 Fusaki Resort Village

Resort Hotel

Ishigaki-shi,

22 Gran Charm Hiroo

23 Plestay Win Kinshicho

24 Gran Charm Kichijoji

25 Green Patio Noda

26 Dainichi F-45

27 Gran Charm Urayasu

28 Gran Charm Urayasu 5

29

30

5,041
Residential/Small
Type (Note 7)
Residential/Small
Type (Note 7)

121

Sumida-ku, Tokyo

92

Musashino-shi,

Type (Note 7)Tokyo

Residential/Small
Type (Note 7)
Residential/Small
Type (Note 7)
Residential/Small
Type (Note 7)
Residential/Small
Type (Note 7)

Type (Note 7)

Gran Charm Minami Gyotoku Residential/SmallII

Shibuya-ku, Tokyo

Residential/Small

Gran Charm Minami Gyotoku Residential/Small
I

195 ✔

Okinawa

Hotel Subtotal

10

Type (Note 7)

28

Noda-shi, Chiba

240

Urayasu-shi, Chiba

54

Urayasu-shi, Chiba

54

Urayasu-shi, Chiba

54

Ichikawa-shi, Chiba

52

Ichikawa-shi, Chiba

48

Residential Property Subtotal

743(Note 1) Regarding the 29 properties, excluding “Flexstay Inn Ekoda” (Note 5), from the 30
properties listed above, there is no guarantee that INV will be granted an opportunity forconsidering acquisition of the properties or be able to acquire the properties.

32

Inbound(Note 2) Hotel Gotanda-Ekimae partially reopened on August 24, 2015 after renewal and isscheduled to fully reopen on November 25, 2015.
(Note 3) Hotel MyStays Akasaka is scheduled to be completed in August 2016.
(Note 4) Hotel MyStays Yokohama Kannai is scheduled to be completed in August 2016.
(Note 5) Flexstay Inn Ekoda is schedule to be acquired by INV on August 28, 2015.
(Note 6) Rihga Royal Hotel Kyoto

is scheduled to partially reopen on September 1, 2016 after

renewal and fully reopen on November 1, 2016.
(Note 7) “Small Type” means a residential property in which the majority of dwelling units are lessthan 30 m2.

Property Sales

While INV places priority on increasing unitholders’ value through external growth by taking into
account the increased level of activity in the real estate trading market, it also plans to consider the
possibility of property sale upon consideration of the portfolio sector composition, geographic
distribution and competitiveness of each property, as appropriate.

(ii)

Strategy for internal growth(Hotels)
Of the 37 hotels that INV owns or anticipates to acquire (including the three properties that it
anticipates to acquire on August 28, 2015), 32 hotels use a variable 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 thehotel 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 operating conferences 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
and brokers to further boost occupancy rates and earning capabilities of its properties. With respect
to INV’s residential properties, while keeping in mind the off-season in the residential rental market
that occurs during the December 2015 period, INV will focus on increasing rent for new lease
contracts as well as for lease renewals for each of its properties as well as formulating net leasing33

management policies in order to continue maximizing profits.

Further, the implementation of appropriate maintenance and repair plans is of the utmost importancein maintaining 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 with flexible implementation as it sees fit.

(iii)

Financial strategy

In continuation of the strengthening of the financial base via the new borrowings implemented in
February 2015 and the refinancing resulting in its debt becoming unsecured borrowing implemented
in July 2015, INV will promote a financial strategy which envisages to obtain a future credit rating
and to issue investment corporate bonds. Also, INV seeks to maximize unitholders’ value by way oflengthening and diversification of borrowing terms, further reduction of borrowing costs, adjustmentof appropriate fixed/variable interest rate ratio taking into consideration the interest rate trends andstrengthening of its lender formation, in order to maximize unitholders’ value and increase
distributions per unit.

(iv)

Compliance risk management

While the executive officer of INV concurrently serves as the representative director at the AssetManager, two supervisory directors (an attorney and a certified public account) oversee theexecution of the executive officer’s duties via the Board of Directors of INV. In addition, thecompliance officer of the Asset Manager attends each meeting of the Board of Directors in thecapacity of an observer.

The Asset Manager has a compliance officer who is responsible for compliance with laws,
regulations and other 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 complianceofficer, is in charge of deliberating on compliance with laws, regulations and other relevant matters
as well as transactions with sponsor related parties. Compliance committee meetings are attended byan outside expert (an attorney) who, sitting in as a compliance committee member, conducts rigorous
deliberations on the existence of conflicts of interest in transactions with sponsor related parties aswell as strict examinations with respect to INV’s compliance with laws and regulations.

INV intends to continually take steps to strengthen its compliance structure.

34

6Significant subsequent events

INV issued the new investment units through a global public offering and the third-party allotment(collectively, the “Capital Increase”) conducted in connection with the overallotment secondaryoffering for the global public offering in the fiscal period ending December 31, 2015 (25th fiscal
period). INV acquired the 11 hotels and the three residential properties on July 16, 2015, from thefunds procured through the Capital Increase along with the refinancing of the existing borrowings.
Furthermore, the acquisition of three hotels by utilizing cash-on-hand and new loans was decided andthe sale and purchase agreement was executed on August 21, 2015.

(a)Issuance of New Investment Units

INV resolved at its meeting of the Board of Directors held on June 25, 2015 and July 8, 2015
respectively to conduct the issuance of new investment units and secondary distribution of investment
units. Payment for the new investment units issued through the public offering was completed on July
15, 2015, in accordance with the following terms and conditions. In addition, with respect to theissuance of new investment units through the third-party allotment in connection with theoverallotment secondary offering, the payment was completed on August 12, 2015. As a result, theunitholders’ equity of INV is JPY 82,465 million and the number of investment units issued andoutstanding of INV increased to 3,193,686.

(i)Issuance of new investment units through public offering: 500,000 units
Number of New Investment Units Issued

Domestic public offering: 211,250 units
Overseas offering: 288,750 units

Issue Price (Offer Price): JPY 57,817 per unit

Amount Paid In (Issue Value): JPY 55,941 per unit

Total Amount Paid In (Total Issue Value): JPY 27,970,500,000

Payment Date

: July 15, 2015

(ii)

Secondary offering of investment units (overallotment secondary offering)Number of Investment Units Offered in theSecondary Offering: 25,000 units

Offer Price: JPY 57,817 per unit

Total Offer Value: JPY 1,445,425,000

Delivery Date

: July 16, 2015

35

(iii)

Issuance of new investment units through third-party allotment

Number of New Investment Units Issued: 25,000 units

Amount Paid In (Issue Value): JPY 55,941 per unit

Total Amount Paid In (Total Issue Value): JPY 1,398,525,000

Payment Date

: August 12, 2015

Allotee: Mizuho Securities Co., Ltd.

(b)

Refinancing and New Borrowing

In order to implement refinancing via unsecured lower-interest borrowings for part of the funds for theacquisition of 11 hotel properties and 3 residential properties acquired on July 16, 2015 and all of theexisting secured loans (New Syndicate Loan (C), New Syndicate Loan (D) and Prudential LPS LoanB), INV entered into a loan agreement for a new syndicate loan (New Syndicate Loan (E)) at a variableinterest rate of 0.40%, 0.50%, 0.60% and 0.20% plus one-month JPY TIBOR as of July 1, 2015, andimplemented the borrowing on July 16, 2015.

Furthermore, in order to procure a part of funds for the acquisition of 3 hotel properties, INV resolved
at its meeting of the Board of Directors held on August 21, 2015, to enter into a loan agreement (“NewBorrowing”) for a new term loan (New Term Loan A) at a variable interest rate of one-month JPY
TIBOR (Base Rate) + spread (0.5%) (Note) on August 26, 2015 and to implement the New Borrowing
on August 28, 2015.

As a result, INV’s outstanding balance of the interest-bearing debt is to be JPY 92,020 million, INV’s
interest-bearing debt ratio is to be 47.7%, and INV’s average interest rate is to be 0.63% after the
implementation of the Refinancing and the New Borrowing.

(Note)The interest rate applicable for the first interest calculation period only will be two-month
JPY TIBOR (Base Rate) + spread (0.5%).

(i)

Overview of the Refinancing

Overview of the Refinancing implemented as of July 16, 2015 is as follows.

I. Overview of the New Borrowing

New Syndicate Loan (E)36Interest

LenderBorrowing
Date

Borrowing

Rate

Principal

Amount(per

Maturity(mn JPY)

annum)

Date

Borrowing
Method(Note 1)
0.53%
July
Sumitomo Mitsui Banking

16,

2015

Variable
28,979interest

Corporation

rate

The Bank of Tokyo-Mitsubishi(Note 2)

UFJ, Ltd.

0.63%

Mizuho Bank, Ltd.
Shinsei Bank, Limited
Citibank Japan Ltd.

July

16,

2015

Variable
28,979interest
rate

Sumitomo Mitsui Trust Bank,Limited(Note 3)

Resona Bank, Limited

0.73%

Mitsubishi UFJ Trust and Banking
Corporation

July

16,

2015

Variable
28,979interest
rate

July 16,
2018

July 16,
2019

July 16,
2020

Unsecured/nonguarantee

Unsecured/nonguarantee

Unsecured/nonguarantee(Note 4)0.33%

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

July

16,

2015

Variable
1,401

interest
rate(Note 5)

Total

88,338(Note 1) Interest rate applicable for the period from July 31, 2015 to August 30, 2015
(Note 2) One-month JPY TIBOR + spread (0.4%)(Note 3) One-month JPY TIBOR + spread (0.5%)(Note 4) One-month JPY TIBOR + spread (0.6%)(Note 5) One-month JPY TIBOR + spread (0.2%)

II. Overview of the Prepayment of the Existing Borrowing

New Syndicate Loan (C)37

May 16,2016

Unsecured/nonguarantee

Interest

LenderBorrowing
Date

Prepayme

Rate

Principal

nt Amount(per

Maturity(mn JPY)

annum)

Date

Borrowing
Method(Note 1)
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ,

0.93%

Ltd.
Mizuho Bank, Ltd.

July

Citibank Japan Ltd.

2014

17,

Variable
56,100interest
rate

Shinsei Bank, Limited

July 14,2017

Secured /nonguarantee(Note 2)

Sumitomo Mitsui Trust Bank, Limited
Resona Bank, Limited(Note 1) Interest rate applicable for the period from June 30, 2015 to July 30, 2015
(Note 2) One-month JPY TIBOR + spread (0.8%)

New Syndicate Loan (D)Interest

LenderBorrowing
Date

Prepayme

Rate

Principal

ntAmount(per

Maturity(mn JPY)

annum)

Date

Borrowing
Method(Note 1)
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ,

0.93%

Ltd.
Mizuho Bank, Ltd.

February

Citibank Japan Ltd.

6, 2015

Shinsei Bank, Limited

Variable
6,241

interest
rate(Note 2)

Sumitomo Mitsui Trust Bank, Limited
Resona Bank, Limited(Note 1) Interest rate applicable for the period from June 30, 2015 to July 30, 2015
(Note 2) One-month JPY TIBOR + spread (0.8%)38

February

Secured / non

6, 2018

guarantee

Prudential LPS Loan B

Borrowing

LenderDate

Principa

Prepayme

Interest

ntAmount

Rate(mn JPY)

annum)(per

1.90%
First lending

September
28, 2012

2,700

Fixed
interest
rate
1.90%

Prudential
Asset

Mortgage

Holdings

Japan

SecondSeptember

lending

28, 2012

2,860interestrate

1

Investment

Limited Partnership

Fixed

1.90%
Third lending

September
28, 2012

1,830

Fixed
interest
rate
1.90%

FourthSeptember

lending

28, 2012

2,570

Fixed
interest
rate

Total

(ii)

l

Borrowing

Maturit

Methody Date
March
31,
2018

March
31,
2019

March
31,
2020

March
31,
2019

Secured / nonguarantee

Secured / nonguarantee

Secured / nonguarantee

Secured / nonguarantee

9,960

Overview of the New Borrowing

Overview of the New Borrowing to be implemented as of August 28, 2015 is as follows.

Term Loan (A)LenderBorrowing
Date

Prepayme
ntAmount(mn JPY)

InterestRate(perannum)

Principal
Maturity
Date

Borrowing
MethodVariableMizuho Bank, Ltd.

August 28,
2015

3,682

interest

AugustUnsecuredrate

28, 2019

non guarantee(Note)

39/

(Note)One-month JPY TIBOR + spread (0.5%)(a)Acquisition of Assets

INV completed the Acquisition on July 16, 2015. In addition, INV decided on August 21, 2015 toacquire one hotel from properties listed in the MOU and two hotels from a third-party (collectively“Additional Acquisition”), by utilizing cash-on-hand and New Borrowing.

As a result, the total number of properties held by INV after the implementation of the Acquisition and
Additional Acquisition will increase to 111 properties (66 residential properties, 37 hotels, 7 retail andoffice buildings as well as one parking lot) with a total acquisition price of JPY 173,815 million andtotal leasable area of 296,526.92 m2.

The overview of 11 hotels and three residential properties acquired in the Acquisition as of July 16,
2015 is as follows.

Use

Property

Property

Number

Name

Hotel
D24

Mystays
Haneda

Hotel
Hotel

D25

Mystays
Kameido P1

Location

Acquisition

Appraisal

Price

Value

Specified(mn JPY)(mn JPY)

Assets(Note 1)

(Note 2)Skye

Ota-ku,
Tokyo

7,801

7,880

TokuteiMokutekiKaishaNishi

Koto-ku,
Tokyo

5,594

5,650

TokuteiMokutekiKaishaRannochHotel
D26

SellerMystays

Taito-ku,

Ueno

Tokyo

3,821

3,860

TokuteiMokutekiKaishaIriyaguchi

40

Category of

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Use

Property

Property

Number

Name

Hotel
D27

Mystays
Kameido P2

Location

Acquisition

Appraisal

Seller

Price

Value

Specified(mn JPY)(mn JPY)

Assets(Note 1)

(Note 2)
Nishi

Koto-ku,
Tokyo

3,742

3,780

TokuteiMokutekiKaishaWakusei

D28

Hotel Vista

Shizuoka-sh

Shimizui, Shizuoka

2,198

2,220

TokuteiMokutekiKaishaSuiseiSuper Hotel
D29

Shinbashi/

Minato-ku,

Karasumori

Tokyo

1,624

1,640

D30

Higashi-Juj
o

D31

D32

okutekiKaishaguchi

Flexstay Inn

TokuteiM

Aki
Kita-ku,

1,277

Tokyo

1,290

TokuteiMokutekiKaishaHotel

Utsunomiya

MyStays,

Utsunomiya

Tochigi

Flexstay Inn

Kawasaki-s

Kawasaki-hi,

Kaizuka

Kanagawa-shi

Zephyrus
1,237

1,250

TokuteiMokutekiKaishaRannoch980

990

TokuteiMokutekiKaisha41

Category of

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Trust
Beneficial
Interest

Use

Property

Property

NumberName

Location

Acquisition

Appraisal

Price

Value

Specified(mn JPY)(mn JPY)

Assets(Note 1)

(Note 2)
Suisei

ComfortD33

Hotel

Toyama-shi,ToyamaToyama979

989

Flexstay Inn

Kawasaki-s

Kawasaki-hi,

Ogawacho

Kanagawa

Subtotal

Residentia

A101

l

City Court

Sapporo-shi

Kitaichijo, Hokkaido

Lieto Court

Sumida-ku,

Mukojima

Tokyo

Lieto Court
A102

Nishi-OjimaokutekiRannoch906

Koto-ku,
Tokyo

915

TokuteiMokutekiKaisha30,159A100

TokuteiM

KaishaEkimae

D34

Seller

1,782

1,683

1,634

Category of

Trust
Beneficial
Interest

Trust
Beneficial
Interest

30,464

1,800

1,700

1,650

Subtotal

5,099

5,150

Total

35,25835,614

Godo

Trust

KaishaBeneficial

BarettaInterest

Godo

Trust

KaishaBeneficial

BarettaInterest

Godo

Trust

KaishaBeneficial

BarettaInterest(Note 1) Acquisition prices do not include adjustments for property taxes, city planning taxes,
national or local consumption taxes; hereinafter the same.
(Note 2) Based on the appraisal value as of May 1, 2015 by a report of Japan Real Estate Institute.

The overview of three hotels to be acquired in the Additional Acquisition to be completed on August4228, 2015 is as follows.

Use

Property

Property

NumberName

Location

AnticipatedAppraisal

SellerCategory of

Acquisition

Value

SpecifiedPrice(mn JPY)

Assets(mn JPY)(Note 3)(Note 1)
Nishi
D35

Flexstay Inn

Nerima-ku,

Ekoda

Tokyo

5,069

5,120

Tokutei
Mokuteki
KaishaSuper Hotel
Hotel

D36

Tokyo-JRTachikawa-

Tachikawashi, Tokyo

1,170

1,180

Kitaguchi
Super Hotel
D37

JR

Taito-ku,

Ueno-Iriyag

Tokyo

1,130

1,140

uchi
Total

7,369

Trust
Beneficial
Interest

TsukijiTrust

One Godo

Beneficial

KaishaInterest

TsukijiTrust

One Godo

Beneficial

KaishaInterest

7,440(Note 3) Flexstay Inn Ekoda is based on the appraisal value as of August 10, 2015 by a report ofJapan Real Estate Institute. Super Hotel Tokyo-JR Tachikawa Kitaguchi and Super Hotel JR
Ueno-Iriyaguchi are based on the appraisal value as of July 31, 2015 by a report of Daiwa
Real Estate Appraisal Co., Ltd.

43

Overview of the Investment Corporation

1

Overview of Investment

By Period

20th

Results Dates

NumberFiscal

21st

Fiscal

22nd

Fiscal

23rd

Fiscal

24th

FiscalPeriodPeriodPeriodPeriodPeriodAs of Jun. 30,

As of Dec. 31,

As of Jun. 30,

As of Dec. 31,

As of Dec. 31,

2013

2013

2014

2014

2015

of

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

of

1,348,292

1,573,179

1,573,179

2,668,686

2,668,686

26,134

29,134

29,13453,09653,096

10,093

8,783

10,005

12,148

10,731

investment
units
authorized
Numberinvestment
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

609,94222.85

417,70915.65

393,99714.76

261,662

9.80

Services(securities

investment trust account)

44

Name

Number of units held

Rayo Godo Kaisha
The

NomuraTrust% of total number of investment units
issued and outstanding

149,925

5.61

85,4103.20

57,4742.15

42,993

1.61

31,048

1.16

26,9541.01

2,077,114

77.83

and

Banking Co., Ltd. (investment
trust account)
MSIP CLIENT SECURITIESSTATE STREET BANK AND
TRUST COMPANY 505225
BNP PARIBAS SECURITIESSERVICES LUXEMBOURG /JASDEC/HENDERSONHHFSICAVSTATE STREET BANK AND
TRUST COMPANY
Total(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--

ShinNihon LLC

45

10,800(Note 1) 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.
(Note 2) The auditing agreement with the auditor is renewed every accounting period. Dismissals
are made in 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.
4

Asset

Management

Company,

Asset

CustodyCompanies,

andGeneralAdministrative AgentsThe asset management company, asset custody companies, and general administrative agents at theend of the 21st Fiscal 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
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.

46

Status of Investment Corporation’s Assets under Management
1

Composition of Investment Corporation’s Assets
Preceding period

Reporting period(as of December 31, 2014)
Type of(as of June 30, 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

710

0.5

708

0.5

Major regional cities

－

－

－

－

Subtotal

710

0.5

708

0.5

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

－

－

－

－

811

0.6

809

0.6

Greater Tokyo area

43,71533.5

43,52531.9

Major regional cities

11,853

9.1

11,743

8.6

Subtotal

55,56942.6

55,26940.5

Greater Tokyo area

7,083

5.4

7,056

5.2

Major regional cities

5,982

4.6

5,928

4.3

Subtotal

13,06610.0

12,984

9.5

Greater Tokyo area

－

－

－

－

Major regional cities

－

－

－

－

Subtotal

－

－

－

－

Greater Tokyo area

27,266

20.9

37,553

27.6

Major regional cities

18,02913.8

20,65815.2

Subtotal

45,296

34.7

58,211

42.7

Total real estate

Residential

Real

Office/Retailestate intrust
Hourly parking, etc.

Hotel

(Note 2)47

Preceding period

Reporting period(as of December 31, 2014)
Type of(as of June 30, 2015)

Geographic Area
PurposeAsset

Amount Held
(Note 1)

Amount Held
Ratio of Total(millions of yen)

Ratio of Total(millions of yen)

Assets (%)(Note 2)

Assets (%)(Note 2)

Total Real Estate in Trust

113,932

87.3

126,465

92.8

Deposits and Other Assets

15,733

12.1

9,024

6.6

130,477

100.0

136,299

100.0（114,743）（87.9）（127,724）（93.4）

Total Assets (Note 3)(Note 1) Greater Tokyo area refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama
Prefecture.
(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.

48

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

8,341

6,568.51

6,568.51

100.0

3.8

Hotel

A75 Spacia Ebisu

6,631

7,794.91

7,296.96

93.6

4.0

Residential

D3 Hotel MyStays Kyoto-shijo

5,949

7,241.51

7,241.51

100.0

5.7

Hotel

D4 MyStays Shin-Urayasu Conference Center

4,865

6,232.30

6,232.30

100.0

3.3

Hotel

D5 Hotel MyStays Maihama

4,814

2,456.36

2,456.36

100.0

2.9

Hotel

B14 Lexington Plaza Nishigotanda

4,753

6,033.58

6,033.58

100.0

2.8

OfficeD6 Hotel Vista Premio Dojima

3,792

9,445.32

9,445.32

100.0

3.8

Hotel

B17 Lexington Plaza Hachiman

3,145

8,419.15

8,419.15

100.0

3.3 Retail Facilities

A52 Winbell Kagurazaka

3,099

4,032.70

3,846.54

95.4

2.1

Residential

D7 Hotel MyStays Nagoya-Sakae

2,891

9,064.71

9,064.71

100.0

3.1

Hotel

48,28567,289.05

66,604.94

99.0

34.8

―

Total

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

49

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 Ward, Tokyo

beneficiary

1,771.13

1,160

1,135

2,681.94

1,260

1,112

1,051.50

968

837

1,367.96

1,100

1,001

2,152.31

1,280

1,401

1,748.24

1,320

1,368

3,029.16

1,050

1,058

1,858.44

1,160

983

1,351.11

999

972

interests
Trust
A27

Nisshin Palacestage HigashiNagasaki

5-4-1 Nagasaki, Toshima Ward, Tokyo

beneficiaryinterests
Trust

A28

Growth Maison Gotanda

2-26-6 Nishi-Gotanda,
Ward, Tokyo

Shinagawabeneficiaryinterests
Trust

A29

Growth Maison Kameido

6-58-16 Kameido, Koto Ward, Tokyo

beneficiaryinterests

Trust
A30 Emerald House

3-27-18 Itabashi, Itabashi Ward, Tokyo

beneficiaryinterests
Trust

A31

Harmonie Ochanomizu

2-5-5 Yushima, Bunkyo Ward, Tokyo

beneficiaryinterests
Trust

A32

Suncrest Shakujii-Koen

3-15-35
Tokyo

Takanodai,

NerimaWard,beneficiaryinterests
Trust

A33

Growth Maison
Shin-Yokohama

3-16-2 Shin-Yokohama, Kohoku-ku,
Yokohama City, Kanagawa Prefecture

beneficiaryinterests

A34

Belle Face
Ueno-Okachimachi

1-27-5
Tokyo

Higashi-Ueno,

Taito

Ward,

Trust
beneficiary50

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 Ward, Tokyo

beneficiary

1,562.26

949

844

952.89868

767

1,015.34

697

758

1,368.57616

646

1,167.50609

656

1,235.93479

647

1,210.74

707

561

1,126.65556

616

1,047.75

520

567

557.05592

568

interests
Trust
A36

Growth Maison Ikebukuro3-31-14 Nishi-Ikebukuro,Ward, Tokyo

Toshimabeneficiaryinterests
Trust

A37

Growth Maison Yoga

1-15-15 Okamoto, Setagaya Ward,Tokyo

beneficiaryinterests
Trust

A38

Route Tachikawa

3-7-6 Nishikicho, Tachikawa
Tokyo

City,

beneficiaryinterests
Trust

A39

Shibuya-Honmachi Mansion

2-35-2Tokyo

Honmachi,ShibuyaWard,beneficiaryinterests
Trust

A40

City Heights Kinuta

4-13-15 Kinuta, Setagaya Ward, Tokyo

beneficiaryinterests
Trust

A41

Acseeds Tower KawaguchiNamiki

2-5-13 Namiki, Kawaguchi City, Saitama

beneficiary

Prefectureinterests
Trust

A42

Capital Heights Kagurazaka

71-1 Enokicho, Shinjuku Ward, Tokyo

beneficiaryinterests
Trust

A43

College Square Machida

3-4-4 Nakamachi, Machida City, Tokyo

beneficiaryinterests
Trust

A44

Belair Meguro

1-2-15 Meguro, Meguro Ward, Tokyo
beneficiary51

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

beneficiary

907.46511

541

815.77572

529

2,040.27458

528

871.35519

470

3,364.00

2,950

2,380

4,032.70

3,730

3,099

4,310.77

2,310

1,879

1,987.88

1,680

1,360

1,197.19

1,040

982

1,627.13

1,020

825

City, Kanagawa Prefectureinterests
Trust
A46

Foros Nakamurabashi

1-6-6 Koyama, Nerima Ward, Tokyo

beneficiaryinterests
Trust

A47

Growth Maison Kaijin

5-29-51 Kaijin, Funabashi City, Chiba

beneficiary

Prefectureinterests
Trust
A48

College Square Machiya

7-3-1 Arakawa, Arakawa Ward, Tokyo

beneficiaryinterests
Trust

A51

City House Tokyo Shinbashi

6-19-1 Shinbashi, Minato Ward, Tokyo

beneficiaryinterests
Trust

A52

Winbell Kagurazaka

6-15 Shin-Ogawacho, Shinjuku Ward,Tokyo

beneficiaryinterests
Trust

A53

Nishiwaseda Cresent
Mansion3-18-9 Nishi-Waseda, Shinjuku Ward,Tokyo

beneficiaryinterests
Trust

A54

Lexington Square
Akebonobashi

3-8 Yochomachi, Shinjuku Ward, Tokyo

beneficiaryinterests
Trust

A56

Casa Eremitaggio

1-14-15 Nakane, Meguro Ward, Tokyo

beneficiaryinterests

A59

Towa City Coop ShinotsukaII

5-49-7 Higashi-Ikebukuro,Ward, Tokyo

52

ToshimaTrustbeneficiary

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 Sekimachi-Kita, Nerima Ward,Tokyo

beneficiary

1,220.24

681

557

1,969.45

1,120

885

3,426.36

1,320

1,033

1,929.59520

394

1,528.58448

299

705.75258

237

1,430.64

1,090

890

784.74576

459

4,460.56

1,150

1,029

7,794.91

7,560

6,631

interests
Trust
A62

Lexel Mansion Ueno
Matsugaya

3-10-2 Matsugaya, Taito Ward, Tokyo

beneficiaryinterests
Trust

A63

Towa City Coop Sengencho

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

beneficiary

City, Kanagawa Prefectureinterests
Trust
A64

Royal Park Omachi

2-11-10 Omachi, Aoba-ku, Sendai City,
Miyagi Prefecture

beneficiaryinterests
Trust

A65

Lexington Square
Haginomachi

1-15-16 Haginomachi, Miyagino-ku,
Sendai City, Miyagi Prefecture

beneficiaryinterests
Trust

A66

Visconti Kakuozan

2-44 Otanacho, Chikusa-ku, Nagoya
City, Aichi Prefecture

beneficiaryinterests
Trust

A71

Lexington Square Daitabashi

1-33-18 Izumi, Suginami Ward, Tokyo

beneficiaryinterests
Trust

A72

Lexington Square Honjo
Azumabashi

4-20-6 Higashikomagata, Sumida Ward,Tokyo

beneficiaryinterests
Trust

A73

AMS TOWER Minami 6-Jo

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

beneficiaryinterests
Trust

A75

Spacia Ebisu

3-6-22 Higashi, Shibuya Ward, Tokyo
beneficiary53

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 Ward, Tokyo

beneficiary

3,574.70

1,820

1,642

2,773.71

1,410

1,228

2,310.49

1,050

946

1,933.80761

656

1,955.40

761

642

898.70695

610

1,731.68

698

593

1,634.60

695

583

1,554.03650

580

2,670.66

684

563

interests
Trust
A77

Invoice Shin-Kobe
Residence

3-3-8 Ikutacho Chuo Ward, Kobe City,
Hyogo Prefecture

beneficiaryinterests
Trust

A78

Cosmo Court Motomachi

3-12-20 Motomachi Dori Chuo Ward,
Kobe City, Hyogo Prefecture

beneficiaryinterests
Trust

A79

Revest Honjin

2-13 Torii Dori Nakamura Ward,
NagoyaCity, Aichi Prefecture

beneficiaryinterests
Trust

A80

Revest Matsubara

3-13-12 Matsubara Naka Ward ,Nagoya
City, Aichi Prefecture

beneficiaryinterests
Trust

A81

Sun Terrace Minami
Ikebukuro2-22-6 Minami Ikebukuro, Toshima
Ward, Tokyo

beneficiaryinterests
Trust

A82

Alba Noritake Shinmachi

3-6-8 Noritake Shinmachi, Nishi Ward,
Nagoya City, Aichi Prefecture

beneficiaryinterests
Trust

A83

Revest Meieki Minami

2-13-33 Meiekiminami, Nakamura
Ward, Nagoya City, Aichi Prefecture

beneficiaryinterests
Trust

A84

Revest Heian

2-13-17 Heian, Kita Ward, Nagoya City,
Aichi Prefecture

beneficiaryinterests

A85

Vendir Hamaotsu Ekimae

1-2-15 Hama Otsu, Otsu City, Shiga
Prefecture

54

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
A86

Salvo Sala

2-6-21 Shimanouchi Chuo Ward, Osaka
City, Osaka Prefecture

beneficiary

1,428.12

619

532

701.92598

533

1,185.50567

511

1,433.35

585

497

765.18538

448

1,029.05

493

437

530.60477

406

1,020.86

418

367

789.12429

364

992.76409

349

interests
Trust
A87

Excellente Kagurazaka

128-1 Yamabukicho Shinjuku Ward,Tokyo

beneficiaryinterests
Trust

A88

Luna Court Edobori

3-4-11 Edobori, Nishi Ward, Osaka City,
Osaka Prefecture

beneficiaryinterests
Trust

A89

Winntage Kobe Motomachi

7-2-2 Motomachi Dori, Chuo Ward,
Kobe
City, Hyogo Prefecture

beneficiaryinterests
Trust

A90

Queen's Court Fukuzumi

1-3-10 Fukuzumi, Koto Ward, Tokyo

beneficiaryinterests

A91

Corp Higashinotoin

380-1 Kawaranomachi, Higashinotoin
Dori Nijo Kudaru, Chukyo Ward,
Kyoto
City, Kyoto Prefecture

Trustbeneficiaryinterests
Trust

A92

Belair Oimachi

5-14-17 Higashi Oi, Shinagawa Ward,Tokyo

beneficiaryinterests
Trust

A93

Siete Minami-Tsukaguchi

3-18 Minami Tsukaguchimachi,
Amagasaki City, Hyogo Prefecture

beneficiaryinterests
Trust

A94

Prime Life Sannomiya
IsogamiKoen

4-3-23 Isogamidori ,Chuo Ward, Kobe
City Hyogo Prefecture

beneficiaryinterests

A95

HERMITAGE NANBA
WEST

4-10-3 Sakuragawa Naniwa Ward,
Osaka
City, Osaka Prefecture

55

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 Ward,
Nagoya City, Aichi Prefecture

beneficiary

1,477.62

411

330

794.80331

323

974.81374

306

761.18333290

109,584.45

62,20955,2691,451.54

1,040

1,232

526.43512

708

6,033.58

4,020

4,753

2,145.00

944

1,069

2,178.41665

749

8,419.15

3,500

3,145

interests
Trust
A97

West Avenue

1-5-17 Nishi, Kunitachi City, Tokyo

beneficiaryinterests
Trust

A98

Little River Honmachibashi

1-34 Honmachibashi Chuo Ward,
Osaka
City, Osaka Prefecture

beneficiaryinterests
Trust

A99

Prime Life Mikage

2-25-11 Mikage Tsukamachi Higashi
Nada Ward, Kobe City, Hyogo
Prefecture

beneficiaryinterests

Subtotal
Trust
B8

Kindai Kagakusha Building

2-7-15, Ichigaya Tamachi, Shinjuku
Ward, Tokyo

beneficiaryinterestst

B9

Shinjuku Island

6-5-1 Nishi-Shinjuku, Shinjuku Ward,

Real estate

Tokyo
Trust
B14

Lexington Plaza
Nishigotanda

5-2-4 Nishigotanda, Shinagawa Ward,Tokyo

beneficiaryinterests
Trust

B15

Cross Square NAKANO

5-24-18 Nakano, Nakano Ward, Tokyo

beneficiaryinterests
Trust

B16

Ohki Aoba Building

9-7 Futsukacho, Aoba-ku, Sendai City,
Miyagi Prefecture

beneficiaryinterests
Trust

B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku, Sendai
City, Miyagi Prefecture

beneficiaryinterests

56

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
B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa
Fukushima PrefectureCity,
beneficiary

18,440.58

2,320

2,032

39,194.69

13,001

13,692

81.04

109

100

81.04

109

100

2,585.72

3,560

2,878

3,327.38

3,480

2,593

7,241.51

9,200

5,949

6,232.30

5,670

4,865

2,456.36

5,220

4,814

9,445.32

5,200

3,792

9,064.71

3,210

2,891

4,188.83

3,870

2,488

interests
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,

Higashiiru,

Trust

Shijyo-dori,Shimogyo, beneficiary

Kyoto-shi, Kyoto Prefectureinterests
Trust

D4

MyStays Shin-Urayasu
Conference Center

2-1-4,

Akemi,Urayasu-shi,

Chiba
beneficiary

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

D5

Hotel MyStays Maihama

beneficiary
Prefectureinterests
Trust
2-4-1, Sonezakishinchi, Kita-ku, Osaka

D6

Hotel Vista Premio Dojima

beneficiary
Prefectureinterests
Trust

D7

Hotel MyStays
Nagoya-Sakae

2-23-22,

Higashisakura,Naka-ku,
beneficiary

Nagoya, Aichi Prefectureinterests
Trust

D8

Hotel MyStays
Sakaisuji-Honmachi

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

57

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
4-81,
D9

Sueyoshi-cho,Naka-ku,

Hotel MyStays Yokohama

beneficiary

7,379.43

2,680

2,082

1,719.29

2,430

1,879

3,412.71

2,100

1,555

2,953.38

1,600

1,375

1,150.76

1,780

1,315

1,134.52

1,540

1,236

2,539.75

1,440

1,241

2,089.86

1,410

1,181

4,956.66

1,730

1,187

2,673.64

848

748

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 Prefectureinterests
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
Trust

D16

Flexstay Inn Sugamo

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

beneficiaryinterests
Trust

1-3-2, Tokui-cho, Chuo-ku, Osaka-shi,
D17

Hotel MyStays Otemae

beneficiary
Osakainterests
Trust

D18

Flexstay Inn Kiyosumi
Shirakawa

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

beneficiaryinterests

58

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
D19

Flexstay Inn Nakanobu P1

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

beneficiary

770.56659

588

391.49318

285

6,568.51

8,600

8,341

7,961.26

2,870

2,792

1,754.06

2,140

2,122

91,998.01

71,55558,211

240,858.19

146,874

127,274

interests
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

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., or Tanizawa Sogo Appraisal Co.,
Ltd.

59

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.
23rd Fiscal Period

24th Fiscal Period((July 1, 2014 to December 31, 2014)(January 1, 2015 to June 30, 2015)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

Nisshin Palacestage
Daitabashi
Nisshin Palacestage HigashiA27
Nagasaki
A26

Occupancy

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

1

90.0

38,666

0.8

1

96.9

36,844

0.7

1

96.3

45,828

1.0

1

94.9

44,7290.9

A28 Growth Maison Gotanda

1

100.0

27,376

0.6

1

100.0

27,3430.5

A29 Growth Maison Kameido

1

86.2

30,410

0.7

1

95.4

32,304

0.6

A30 Emerald House

1

98.0

41,741

0.9

1

100.0

49,1041.0

A31 Harmonie Ochanomizu

1

93.5

35,263

0.8

1

88.3

39,126

0.8

A32 Suncrest Shakujii-Koen

1

97.0

36,344

0.8

1

97.4

37,730

0.8

1

95.6

33,317

0.7

1

97.0

35,451

0.7

1

98.3

30,191

0.7

1

100.0

32,607

0.7

A35 Grand Rire Kameido

1

100.0

26,619

0.6

1

100.0

26,6190.5

A36 Growth Maison Ikebukuro

1

90.5

24,272

0.5

1

88.1

22,6700.5

A37 Growth Maison Yoga

1

94.9

21,746

0.5

1

94.9

21,6330.4

A38 Route Tachikawa

1

96.6

20,942

0.5

1

96.6

21,3990.4

A39 Shibuya-Honmachi Mansion

1

91.3

19,947

0.4

1

89.9

19,356

0.4

A40 City Heights Kinuta

1

100.0

17,664

0.4

1

94.6

17,7730.4

Acseeds Tower KawaguchiNamiki

1

86.0

23,651

0.5

1

100.0

25,0080.5

A42 Capital Heights Kagurazaka

1

91.6

18,249

0.4

1

94.4

18,625

0.4

A43 College Square Machida

1

100.0

18,268

0.4

1

100.0

17,876

0.4

A44 Belair Meguro

1

88.1

16,195

0.4

1

100.0

15,914

0.3

A45 Wacore Tsunashima I

1

89.9

18,002

0.4

1

98.0

18,004

0.4

A46 Foros Nakamurabashi

1

88.8

17,954

0.4

1

90.5

17,2170.3

A47 Growth Maison Kaijin

1

89.0

21,294

0.5

1

87.3

21,007

0.4

A48 College Square Machiya

1

100.0

14,706

0.3

1

100.0

14,706

0.3

A51 City House Tokyo Shinbashi

1

95.6

88,383

1.9

1

97.1

90,3441.8

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

A41

60

23rd Fiscal Period

24th Fiscal Period((July 1, 2014 to December 31, 2014)(January 1, 2015 to June 30, 2015)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

A52 Winbell Kagurazaka

Occupancy

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

1

100.0

103,227

2.2

1

95.4

104,468

2.1

1

90.5

68,082

1.5

1

92.1

70,977

1.4

1

88.8

45,511

1.0

1

93.5

48,581

1.0

A56 Casa Eremitaggio

1

91.2

30,380

0.7

1

84.2

29,901

0.6

A59 Towa City Coop Shinotsuka II

1

91.3

33,307

0.7

1

96.3

34,194

0.7

A61 Bichsel Musashiseki

1

85.8

22,012

0.5

1

98.5

24,505

0.5

Lexel Mansion Ueno
Matsugaya

1

96.8

33,167

0.7

1

100.0

35,737

0.7

A63 Towa City Coop Sengencho

1

80.2

54,726

1.2

1

83.0

52,944

1.1

A64 Royal Park Omachi

1

88.1

24,188

0.5

1

98.3

24,471

0.5

Lexington Square
Haginomachi

1

100.0

18,428

0.4

1

92.4

18,432

0.4

A66 Visconti Kakuozan

1

89.7

11,318

0.2

1

78.3

9,818

0.2

A71 Lexington Square Daitabashi

1

85.1

27,913

0.6

1

93.0

30,511

0.6

Lexington Square Honjo
Azumabashi

1

97.0

17,226

0.4

1

91.1

18,066

0.4

A73 AMS TOWER Minami 6-Jo

1

83.7

45,814

1.0

1

83.3

44,9730.9

A75 Spacia Ebisu

1

93.6

187,027

4.1

1

93.6

197,748

4.0

A76 Neo Prominence

1

93.9

61,481

1.3

1

94.9

62,9801.3

A77 Invoice Shin-Kobe Residence

1

94.0

48,843

1.1

1

88.4

46,3390.9

A78 Cosmo Court Motomachi

1

86.6

33,405

0.7

1

96.2

34,751

0.7

A79 Revest Honjin

1

92.5

29,805

0.6

1

100.0

31,672

0.6

A80 Revest Matsubara

1

93.7

27,735

0.6

1

89.5

28,540

0.6

Sun Terrace Minami
Ikebukuro1

92.1

20,277

0.4

1

97.4

22,455

0.5

A82 Alba Noritake Shinmachi

1

94.4

25,539

0.6

1

98.6

26,1070.5

A83 Revest Meieki Minami

1

95.4

25,521

0.6

1

100.0

26,205

0.5

A84 Revest Heian

1

100.0

24,560

0.5

1

92.0

23,8430.5

A85 Vendir Hamaotsu Ekimae

1

87.3

29,675

0.6

1

88.4

30,148

0.6

A86 Salvo Sala

1

93.5

23,253

0.5

1

94.4

23,373

0.5

Nishiwaseda Cresent
MansionLexington Square
A54
Akebonobashi
A53

A62

A65

A72

A81

61

23rd Fiscal Period

24th Fiscal Period((July 1, 2014 to December 31, 2014)(January 1, 2015 to June 30, 2015)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

Occupancy

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

A87 Excellente Kagurazaka

1

88.3

16,934

0.4

1

97.1

17,0330.3

A88 Luna Court Edobori

1

88.1

19,122

0.4

1

94.0

20,055

0.4

A89 Winntage Kobe Motomachi

1

94.8

22,200

0.5

1

94.7

22,706

0.5

A90 Queen's Court Fukuzumi

1

92.5

16,248

0.4

1

100.0

16,7200.3

A91 Corp Higashinotoin

1

92.9

16,872

0.4

1

95.7

17,1990.3

A92 Belair Oimachi

1

92.9

13,875

0.3

1

96.1

15,641

0.3

A93 Siete Minami-Tsukaguchi

1

97.5

16,217

0.4

1

92.6

16,097

0.3

1

96.9

14,360

0.3

1

93.8

14,106

0.3

1

100.0

15,512

0.3

1

95.7

15,596

0.3

1

95.5

18,070

0.4

1

91.0

17,322

0.3

A97 West Avenue

1

85.0

11,510

0.2

1

75.0

11,0250.2

A98 Little River Honmachibashi

1

93.8

12,758

0.3

1

96.9

13,6980.3

A99 Prime Life Mikage

1

93.3

11,980

0.3

1

86.8

11,3670.2

Subtotal

63

92.7

1,965,139

42.6

63

93.7

2,013,728

40.5

B8 Kindai Kagakusha Building

1

100.0

35,405

0.8

1

100.0

38,6070.8

B9 Shinjuku Island

1

100.0

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

B14 Lexington Plaza Nishigotanda

8

100.0

138,450

3.0

8

100.0

141,089

2.8

B15 Cross Square NAKANO

1

64.3

32,309

0.7

1

70.8

32,0320.6

B16 Ohki Aoba Building

1

100.0

40,397

0.9

1

100.0

40,1680.8

B17 Lexington Plaza Hachiman

1

100.0

167,597

3.6

1

100.0

165,200

3.3

B18 AEON TOWN Sukagawa

1

100.0

142,505

3.1

1

100.0

141,739

2.8

Subtotal

1498.0

573,863

12.4

14

98.4

576,034

11.6

C1 Times Kanda-Sudacho4th

1

100.0

2,453

0.1

1

100.0

2,700

0.1

Subtotal

1

100.0

2,453

0.1

1

100.0

2,700

0.1

1

100.0

104,832

2.3

1

100.0

111,428

2.2

1

100.0

108,407

2.4

1

100.0

126,298

2.5

Prime Life Sannomiya
A94 Isogami
Koen
HERMITAGE NANBA
A95
WEST
Century Park Shinkawa
A96
1-bankan

D1
D2

Hotel MyStays Kanda
Hotel MyStays Asakusa

62

23rd Fiscal Period

24th Fiscal Period((July 1, 2014 to December 31, 2014)(January 1, 2015 to June 30, 2015)

RentalNumber of
Revenue
Tenants (atTenants (at(during
Ratio ofRate
period)Rentalend ofend of(at end of (Thousands Revenue (%)
of yen)period)(%)
period)period)(Note 1)
(Note 2)
(unit)(unit)
Number ofName of Property

Occupancy

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

D3 Hotel MyStays Kyoto-shijo

1

100.0

310,661

6.7

1

100.0

282,858

5.7

MyStays Shin-Urayasu
Conference Center

1

100.0

217,607

4.7

1

100.0

164,208

3.3

D5 Hotel MyStays Maihama

1

100.0

166,812

3.6

1

100.0

142,571

2.9

D6 Hotel Vista Premio Dojima

1

100.0

160,910

3.5

1

100.0

187,248

3.8

1

100.0

185,561

4.0

1

100.0

155,746

3.1

1

100.0

123,501

2.7

1

100.0

163,179

3.3

D9 Hotel MyStays Yokohama

1

100.0

124,297

2.7

1

100.0

107,1112.2

D10 Hotel MyStays Nippori

1

100.0

72,782

1.6

1

100.0

81,0801.6

Hotel MyStays
Fukuoka-Tenjin-Minami

1

100.0

90,326

2.0

1

100.0

95,816

1.9

D12 Flexstay Inn Iidabashi

1

100.0

55,564

1.2

1

100.0

54,096

1.1

Hotel MyStays Ueno
Inaricho

1

100.050,423

1.1

1

100.0

57,552

1.2

D14 Flexstay Inn Shinagawa

1

100.0

44,932

1.0

1

100.0

52,213

1.0

D15 Flexstay Inn Tokiwadai

1

100.0

57,136

1.2

1

100.0

62,141

1.2

D16 Flexstay Inn Sugamo

1

100.0

50,354

1.1

1

100.0

57,3391.2

D17 Hotel MyStays Otemae

1

100.0

74,450

1.6

1

100.0

79,292

1.6

Flexstay Inn Kiyosumi
Shirakawa

1

100.0

36,629

0.8

1

100.0

36,131

0.7

D19 Flexstay Inn Nakanobu P1

1

100.0

21,911

0.5

1

100.0

23,094

0.5

D20 Flexstay Inn Nakanobu P2

1

100.0

12,157

0.3

1

100.0

11,9890.2

APA Hotel Yokohama
Kannai (Note 4)
Hotel Nets Hakodate (NoteD22
4)
Flexstay Inn Shirogane (Note
D23
4)

－

－

－

－

1

100.0

189,256

3.8

－

－

－

－

1

100.0

89,046

1.8

－

－

－

－

1

100.0

52,591

1.1

Subtotal

20

100.0

2,069,261

44.9

23

100.0

2,382,297

47.9

Total

98

96.1

4,610,717

100.0

101

96.9

4,974,760

100.0

D4

Hotel MyStays
Nagoya-Sakae
Hotel MyStays
D8
Sakaisuji-Honmachi
D7

D11

D13

D18

D21

(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 document63

disclosure.
(Note 4) Since the property was sold during the 24th fiscal period (as of Feb 6, 2015), thecalculation period of the rental revenue of the relevant property was set for the period
commenced on Feb 6, 2015 and ended on June 30, 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

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
PeriodA32

B17

Suncrest

Nerima Ward,waterproofing

Shakujii-Koen

Tokyorooftops

Lexington Plaza
HachimanSendaiCity,of

From November
2015 to December

16,4502015

ReplacingtheFrom November

Miyagisurface of asphalt of2015 to December

Prefecture

rooftop parking lots

2015

64

15,775――

Estimated Cost (Thousands of yen)
Scheduled Time of
Name of Property

Location

Payment for

PurposeAdvance
Implementation

Total

the Fiscal
Payments
PeriodExpenses
B15

for

the

Cross Square

Nakano Ward,renovation work on

NAKANOTokyo

the rental rooms (3From September
2015 to December

rooms)

D06

Hotel Vista Premio

Osaka-shi,

Replacing

DojimaOsaka

storage equipment

Suginami

Replacing intercom

Ward, Tokyo

equipment

Nisshin
A26

Palacestage
Daitabashi

2energy

8,100

―

―

7,695

―

―

5,400

―

―

2015
From September
2015 to October
2015
From November
2015 to December
2015

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.

Name of Property

Location

Time of

PurposePayment (Thousands of

Implementation
yen)

B15

D07

D15

D17

D18

Cross Square

NakanoExpenses for the renovation work From May 2015 to

NAKANO

Ward, Tokyoon the rental rooms (2 rooms)

Hotel MyStays

Nagoya, Aichi

Replacing

Nagoya-Sakae

Prefecture

equipment

Flexstay Inn

Itabashi-ku,

Replacing

TokiwadaiTokyosystemHotel MyStays

Osaka-shi,

Installation of a wireless local From April 2015 toOtemaeOsaka

area network for guest rooms

Flexstay Inn

Koto-ku,

Replacing

KiyosumiTokyosystemenergyJune 2015

storage From June 2015 toJune 2015

hot

water

supply From May 2015 to
May 2015

hot

water

April 2015

supply From June 2015 toJune 2015

65

5,019

4,500

4,950

3,900

4,950

Name of Property

Location

Payment (Thousands ofTime of

Purpose

Implementation
yen)

Shirakawa
Other construction

148,001
Total

3

171,320

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

20th Fiscal

21st Fiscal

22nd Fiscal

23rd Fiscal

24th Fiscal

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

Reserved funds at beginning of

2013

2014

2015 to June 30,

2014

2015

541,609571,543524,730

579,682

738,365

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

165,233

165,271

199,177

268,495

283,147thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

135,298

212,084

144,225

109,812

168,813thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

periodAmount reserved (Note)

Amount reversed (Note)
Amount carried over for next

571,543524,730

579,682

738,365

852,699

thousand yen

thousand yen

thousand yen

thousand yen

thousand yen

fiscal period(Note)

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

66

Overview of Liabilities and Expenses

1

Statement of Operating Expenses(Thousands of yen)

23rd Fiscal Period

24th Fiscal Period

Jul 1, 2014 to December 31, 2014

Jan. 1, 2015 to June 30, 2015(a) Asset management fees

125,000

180,000(b) Asset custodian fees

3,976

6,342

(c) Administrative services fees

26,672

22,055(d) Directors’ remuneration

4,800

4,800

(e) Other operating expenses

93,493

116,590

253,942

329,789

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)

12,400,000

12,000,000

12,400,000

12,000,000

12,400,000

12,000,000

Type

LenderPurpose Notes

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

SecuredShinsei Bank, Limited.

Jul. 17, 2014

6,500,000

6,500,000

0.930

Jul. 14, 2017 (Note 4) (Note 6) Convent
i-onalLong-term
Debt(Note 2)

Citibank Japan Ltd.

6,500,000

6,500,000

5,000,000

5,000,000

2,100,000

2,100,000―

1,357,000

Sumitomo Mitsui Trust &Banking Co., Ltd.
Resona Bank, Limited..
Sumitomo Mitsui Banking
SecuredCorporation
Feb. 6, 2015

0.930

The Bank of Tokyo-Mitsubishi―
UFJ, Ltd.

67

1,357,000

Feb. 6, 2018 (Note 5) (Note 6) Convent
i-onal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

Mizuho Bank, Ltd.

―1,357,000

Shinsei Bank, Limited.

―

650,000

Citibank Japan Ltd.

―

650,000―

470,000―

400,000

57,300,000

62,341,000

2,700,000

2,700,000

1.900

Mar. 31, 2018

2,860,000

2,860,000

1.900

Mar. 31, 2019

Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited.
SubtotalLong-term

Mitsubishi UFJ Trust and
Sep. 28.

Debt in trust Banking Corporation(Note 3)

2012

1,830,000

1,830,000

1.900

Mar. 31, 2020

2,570,000

2,570,000

1.900

Mar. 31, 2019

Subtotal

9,960,000

9,960,000

Total

67,260,000

72,301,000(Note 7)

Secured(Note 5) (Note 6) Convent(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) Includes long-term debt scheduled to be repaid within 1 year.
(Note 3) Includes long-term debt in trust scheduled to be repaid within 1 year.
(Note 4) INV repaid the portion of the principal (JPY 1,200 million) accompanied with the receipt
of consumption tax refund. INV prepaid the balance at the end of the period on July 16,
2015.
(Note 5) INV prepaid the balance at the end of the period on July 16, 2015.
(Note 6) The funds raised through borrowings are mainly used to acquire real estate properties ortrust beneficiary interests.
(Note 7) 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.

68

i-onal3

Investment Corporation Bonds

Nothing applicable.

4

Short-Term Investment Corporation Bonds

Nothing applicable.

5

Investment Unit Options

Nothing applicable.

69

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

1

Buying and Selling, etc. of Real Estate and Asset-Backed Securities, etc.

Acquisition
Name of Property

Acquisition Price

Acquisition Date

(Thousands of yen)

D21

APA Hotel Yokohama Kannai

Feb. 26, 2015

8,350,000

D22

Hotel Nets Hakodate

Feb. 26, 2015

2,792,000

D23

Flexstay Inn Shirogane

Feb. 26, 2015

2,119,000

Total

13,261,000(Note)

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.

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 /
Disposal

Name of Property

D21

APA

Hotel

Yokohama

KannaiAcquisition D22 Hotel Nets Hakodate
D23 Flexstay Inn ShiroganeSpecified Transaction
Assets Type
Date
Real Estate,
Trust
BeneficiaryInterests

Feb.26,2015

Acquisition / orReal Estate
Disposal Price Appraisal Value(Thousands of (Thousands of
yen)
yen)
8,350,000

8,600,000

2,792,000

2,870,000

2,119,000

2,140,000

Name of Appraiser

Date of
Appraisal

Japan Real Estate
InstituteJun. 30,
2015(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 saleprice 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.”70

4Transactions 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.

Nothing applicable.

4

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

Nothing applicable.

71

Other1

Notice(1) General Meeting of Unitholders
INV’s General Meeting of Unitholders was held on November 28, 2014.

The agenda which wereapproved at the General Meeting of Unitholders are as follows.

Approval Date
June, 25 2015

Proposal

Overview

Conclusion of the New

INV approved that INV would entrust underwriters

Underwriting(Note) with the service related to the issuance ofAgreement related to

new investment units through public offering andthe issuance of new

secondary distribution of investment units whichinvestment units etc.

was approved at meetings of the board of directorsof INV held on June 25, 2015.

(Note)

Domestic underwriters are Mizuho Securities Co., Ltd., SMBC Nikko Securities Inc.,

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and Nomura Securities Co., Ltd.

Overseas

underwriters are Morgan Stanley & Co. International plc, SMBC Nikko Capital Markets Limited,
Mizuho International plc and Citigroup Global Markets Limited.

.

(2) Board of Directors of Investment Corporation

There are no execution and amendment of the principal agreement approved by the Board of
Directors of the Investment Corporation in the fiscal period ended December 31, 2014.

2

Disclosure of companies owing real estate overseas

Nothing applicable.

3

Disclosure of real estate owned by companies owing real estate overseas

Nothing applicable.

72

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.

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.



Substantially all of our hotels are leased to MyStays Hotel Management and subject to therisk of default under its hotel lease agreements.



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.



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.

73

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 and MyStays HotelManagement



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.



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

74



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.

75

II.

Balance Sheet

Fiscal Period ended
December 31, 2014(as of December 31, 2014)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Accrued revenue
Accounts receivables
Prepaid expenses
Consumption tax receivable
OthersAllowance for doubtful accounts※1 9,153,872※1 2,691,921

4,011,521
82
644,552
233,324
1,319,253
0(1,968)※1 4,822,622

15,360,637

8,726,919※1 85,914※1 85,914(8,324)(8,866)

77,58977,048※1 38,862※1 38,862(18,548)(19,774)

20,314

19,117※1 2,779※1 2,779(1,204)(1,270)※1

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Equipment
Accumulated depreciation
Equipment, net
Building improvements
Accumulated depreciation
Building improvements, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net(Unit: thousands of yen)
Fiscal Period ended
June 30, 2015(as of June 30, 2015)

190
637,813260,394
316,4130(2,436)

1,574

1,509

※1 711,834※1 711,834※1 45,227,883※1 49,657,804(3,136,903)(3,726,114)

42,090,979

45,931,690※1 10,400,867※1 12,748,349(2,186,062)(2,551,810)

Equipment in trust, net

8,214,804

10,196,539

Building improvements in trust
Accumulated depreciation※1 321,799※1 323,594(118,744)(128,347)

203,054

195,246※1 268,476※1 302,397(103,974)(124,376)

Equipment in trust
Accumulated depreciation

Building improvements in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
OthersTotal intangible assets

164,502

178,020※1 63,258,940※1 69,963,823

114,743,593

127,274,829

76

45

76

45

10,00010,035

Total investment and other assets
Guarantee deposits

76

Fiscal Period ended
December 31, 2014(as of December 31, 2014)
328,159
34,765Long-term prepaid expenses
OthersTotal investments and other assets
Total non-current assets
Total assets

77(Unit: thousands of yen)
Fiscal Period ended
June 30, 2015(as of June 30, 2015)
251,697
36,218372,924

297,951

115,116,594

127,572,826

130,477,232

136,299,746

Fiscal Period ended
December 31, 2014(as of December 31, 2014)
Liabilities
Current liabilities
Accounts payable
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
Total current liabilities
Non-current liabilities
Long-term debts
Long-term debts in trust
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits

141,428※1 1,200,000※118,167
22,872
127,170578
371,084
23,896

168,742※1 62,341,000※1 9,960,000
43,752
174,711542
420,660
10,108

1,905,197

73,119,517※156,100,000

1,420,014
28,663※1 9,941,832

1,109,146
28,663

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
Total liabilities and net assets

78(Unit: thousands of yen)
Fiscal Period ended
June 30, 2015(as of June 30, 2015)

67,179,642

1,448,677

69,084,839

74,568,195

53,096,413

53,096,413

6,264,432
2,031,546

6,264,432
2,370,704

8,295,9788,635,136

61,392,392

61,731,550※2 61,392,392※2 61,731,550

130,477,232

136,299,746

III.

Statement of Income(Unit: thousands of yen)
Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Operating revenues
Rental revenues※1 4,610,717※1 4,974,760

Total operating revenues

4,610,717

4,974,760

Operating expenses
Property related expenses※1 1,586,854※1 1,834,039

125,000
4,800
3,976
26,672
1,527
91,966

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

1,840,796
2,769,920

2,163,828
2,810,931

537
483

1,242
3,098
307

Total non-operating revenues

1,021

4,648

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

365,480
294,738
152,101
14

379,341
140,328-

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

812,334

519,670

Ordinary income

Total non-operating expenses

1,958,607

2,295,909

Net income before taxes

1,958,607

2,295,909

605

605

Corporate tax, etc.
Total corporate tax, etc.
Net income
Retained earnings at the beginning of the period
Unappropriated retained earnings/Loss at the end of theperiod

79

605

605

1,958,002

2,295,304

73,54375,3992,031,546

2,370,704

IV.

Statement of Unitholders’ Equity

Fiscal Period ended December 31, 2014 (from July 1, 2014 to December 31, 2014)(Unit: thousands of yen)
Unitholders’ Equity
SurplusCapital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

974,975

Unitholders’ Capital

Balance at the beginningof the period

29,134,389

Total Surplus
7,239,407

Total Unitholders’EquityTotal Net Assets

36,373,796

36,373,796

23,962,024

23,962,024

Change during the period
Issuanceofinvestment units
Distributions
surplus

new23,962,024

from

Net income
Total change during theperiodBalance at the end of theperiod(901,431)(901,431)(901,431)(901,431)

1,958,002

1,958,002

1,958,002

1,958,002

23,962,024-

1,056,571

1,056,571

25,018,595

25,018,595

53,096,413

6,264,432

2,031,546

8,295,97861,392,392

61,392,392

Fiscal Period ended June 30, 2015 (from Janualy 1, 2015 to June 30, 2015)(Unit: thousands of yen)
Unitholders’ Equity
SurplusCapital Surplus

UnappropriatedRetained
Earnings/Loss

6,264,432

2,031,546

Unitholders’ Capital

Balance at the beginningof the period

53,096,413

Total Surplus

8,295,978Total Unitholders’EquityTotal Net Assets

61,392,392

61,392,392--

Change during the period
Issuanceofinvestment units

newDistributions 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

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

80

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
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)(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 76,921 thousand.

81

Fiscal Period ended
rJanualy 1, 2015
(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
2-67 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 42,497 thousand.

Fiscal Period ended
Fiscal Period ended
December 31, 2014
rJanualy 1, 2015
(from July 1, 2014 to(from Janualy 1, 2015 toItem
December 31, 2014)
June 30, 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 such items, the following significant
Of such items, the following significant
trust assets and liabilities are shown separately trust assets and liabilities are shown separately
on the balance sheet.
on 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) Tenant leasehold and security deposits in
trust
trust
(d)Long-term debts in trust(d)Current portion of long-term debts in trust
Long-term debts in trust
By Period(2)Accounting treatment of deferred charges(a) 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.

82

[Notes to the Balance Sheets]
Fiscal Period ended
December 31, 2014(as of December 31, 2014)※1. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.

Fiscal Period ended
June 30, 2015(as of June 30, 2015)※1. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.

Cash and deposits

4,262,187 thousand yen

Cash and deposits

Cash and deposits in trust

4,011,521 thousand yen

Cash and deposits in trust

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

Buildings

77,589 thousand yen

Buildings

77,048 thousand yen

Equipment

20,314 thousand yen

Equipment

19,117 thousand yen

Building improvements

1,574 thousand yen

Building improvements

1,509 thousand yen

711,834 thousand yen

Land711,834 thousand yen

Land

Buildings in trust

42,090,979 thousand yen 2 Buildings in trust

45,931,690 thousand yen

Equipment in trust

8,214,804 thousand yen

10,196,539 thousand yen

Equipment in trust

Building improvements in trust

203,054 thousand yen

Building improvements in trust

195,246 thousand yen

Tools, furniture and fixtures in trust

164,502 thousand yen

Tools, furniture and fixtures in trust

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

63,258,940 thousand yen 4 Land in trust

Land in trust
Total

123,017,302 thousandyen

Liabilities with collateral are as follows.

Total

132,409,697 thousandyen

Liabilities with collateral are as follows.

Current portion of long-term debts

1,200,000 thousand yen

Current portion of long-term debts
in trust

18,167 thousand yen

Current portion of long-term debts 62,341,000 thousand yen
Current portion of long-term debts
in trust

9,960,000 thousand yen

56,100,000 thousand yen

Long-term debts-

Long-term debts in trust

9,941,832 thousand yen

Long-term debts in trust

-

Total

67,260,000 thousand yen

Long-term debts

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

83

[Notes to Statement of Income]Fiscal Period ended
Fiscal Period ended
December 31, 2014
Janualy 1, 2015
(from July 1, 2014 to(from Janualy 1, 2015 to
December 31, 2014)
June 30, 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)

4,408,874(Other revenues)

201,843

Total rental revenues

4,610,717(Rent/common area charges)(Other revenues)
Total rental revenues

B. Real property related expenses

B. Real property related expenses

Property related expenses

Property related expenses

4,738,713
236,047
4,974,760(Maintenance costs)

460,196(Maintenance costs)

468,393(Taxes and public dues)

163,789(Taxes and public dues)

201,860(Insurance expenses)

6,084(Insurance expenses)

7,061(Depreciation expenses)

837,259(Depreciation expenses)

986,765(Other expenses)

119,524(Other expenses)

169,957

Total real property related expenses

1,586,854

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

Total real property related expenses

1,834,039

C. Operating income from rental revenues
3,023,863

-

84

(A-B)

3,140,721

[Notes to Statement of Unitholders’ Equity]
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Number of investment units authorized and number ofinvestment units issued and outstanding

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

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

2,668,686 units[Notes Related to Tax Accounting]
Fiscal Period ended
Fiscal Period ended
December 31, 2014
June 30, 2015
(from July 1, 2014 to(from January 1, 2015 to
December 31, 2014)
June 30, 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- thousand yen Enterprise tax payable
489 thousand yen
Accounts receivable (merger)

197 thousand yen

Accounts receivable (merger)

186 thousand yen

Allowance for doubtful accounts

672 thousand yen

Allowance for doubtful accounts

787 thousand yen

Subtotal

870 thousand yen

Subtotal

1,463 thousand yen

Valuation allowance

870 thousand yen

Valuation allowance

1,463 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)
801,025 thousand yen(Deferred tax assets - non-current assets)
Buildings and other (merger)
746,394 thousand yen

Land (merger)

2,251,597 thousand yen

Land (merger)

2,129,657 thousand yen

Long-term accrued expenses

7,749,271 thousand yen

Long-term accrued expenses

7,329,595 thousand yen

Subtotal

10,801,895 thousand yen

Subtotal

10,205,647 thousand yen

Valuation allowance

10,801,895 thousand yen

Valuation allowance

10,205,647 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
34.16%
Statutory tax rate

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

Deductible cash distributions(33.54)%

Deductible cash distributions

Provision of reserve for reduction entry(0.46)%

Provision of reserve for reduction entry

0.63%

Others(0.13)%

Others

(0.95)%

Effective tax rate

0.03%

Effective tax rate

0.03%

85

33.80)%

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
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 “Local Corporation
Tax Act” (Act No. 11 of 2014) and the “Act on Partial
Revision of the Local Tax Act, etc.” (Act No. 4 of 2014) on
March 31, 2014, a “Local Corporation Tax” will be created
and a portion of the Local Corporation Special Tax will be
restored in the Corporation Enterprise Tax for fiscal periods
starting after October 1, 2014, and therewith the statutory tax
rate used to calculate deferred tax assets and liabilities will bechanged to 34.16% for temporary differences, etc. which are
expected to be eliminated in the fiscal period starting afterJanuary 1, 2015. This change in tax rate has no effect on theamounts of deferred tax assets and liabilities, and deferredincome taxes.

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

[Notes Related to Lease Contracts]
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Operating lease transactions(as lessee)(Unit: thousands of yen)
Due within one year
Remaining lease
payments

2,224,164

Total

2,336,413

Remaining lease
payments

Due within one year

112,249

Due after one year

2,168,039

Total

2,280,288(Unit: thousands of yen) (as lessor)
Due within one year

Remaining lease
payments

112,249

Due after one year

(as lessor)

Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
Operating lease transactions(as lessee)(Unit: thousands of yen)

1,843,409

Due after one year

15,485,197

Total

17,328,607

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

2,413,667

Due after one year

21,199,677

Total

23,613,345[Notes Related to Financial Instruments]
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
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

86

Fiscal Period ended
June 30, 2015
(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 noFiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
no derivative 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
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
derivative transactions that have been entered into.
Surplus funds are managed carefully after carefully taking
into account safety, liquidity, the interest rate environment
and financing.

(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 market prices if available. When quoted market prices are not
not available, fair value is estimated using valuation available, fair value is estimated using valuation techniques
techniques which contain various assumptions. If other which contain various assumptions. If other valuation models
valuation models or assumptions were used, the estimated or assumptions were used, the estimated value may differ.
value may differ.
2. Estimated fair value of financial instruments
2. Estimated fair value of financial instruments
Book value, fair value and the difference between values
Book value, fair value and the difference between values as
as of December 31, 2014 are as follows.
of June 30, 2015 are as follows.
(Unit: thousands of yen)
(Unit: thousands of yen)Book Value

Fair Value

DifferenceBook Value

Fair Value(1) Cash and deposits

9,153,872

9,153,872-(2) Cash and deposits in trust

4,011,521

4,011,521

Total assets

13,165,393(3) Short-term debts(1) Cash and deposits

2,691,921

2,691,921--(2) Cash and deposits in trust

4,822,622

4,822,622-

13,165,393-

Total assets

7,514,543

7,514,543

-

-

-

-

(3) Short-term debts

62,341,000

62,341,000

-

-

-

-

-

-

-

9,960,000

9,960,000

-

-

-

-

72,301,000

72,301,000-(4) Current portion of
long-term debts

1,200,000

1,200,000-(4) Current portion of
long-term debts(5) Long-term debts

56,100,000

56,100,000-(5) Long-term debts

18,167

18,251

84(6) Current portion of
long-term debts in trust(7) Long-term debts in trust

9,941,832

10,156,234

214,401(7) Long-term debts in trust

Total liabilities

67,260,000

67,474,486

214,486

Total liabilities(6) Current portion of
long-term debts in trust

Difference(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(3) Short-term debts(3) Short-term debts
Due to the short maturities, the book value of theseDue to the short maturities, the book value of these
instruments is deemed a reasonable approximation of the fair
instruments is deemed a reasonable approximation of the fairvalue, and therefore, the book value is used as the fair value.
value, and therefore, the book value is used as the fair value.
(4) Current portion of long-term debts (5) Long-term debts(4) Current portion of long-term debts (5) Long-term debts(6) Current portion of long-term debts in trust (7) Long-term (6) Current portion of long-term debts in trust (7) Long-term
debts in trust
debts in trust
The fair values of long-term debt with fixed interest rates
The fair values of long-term debt with fixed interest rates
are determined based on the present value of contractual cash are determined based on the present value of contractual cash
flows discounted at current market interest rates which would flows discounted at current market interest rates which would
be applicable to new debt with the same amount.
be applicable to new debt with the same amount.
Long-term debt with floating interest rates reflecting
Long-term debt with floating interest rates reflecting

87

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)changes in market rates within a short term period are statedat their book value as their book values approximate their fairvalues.

Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)changes 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 and1,109,146
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 it because the repayment datesof those deposits and the timing of the lessee’s exit from theproperty are not certain. Thus, their fair value is notdisclosed.

Book Value

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 it because the repayment datesof those deposits and the timing of the lessee’s exit from theproperty are not certain. Thus, their fair value is notdisclosed.

(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(Unit: thousands of yen)
(Unit: thousands of yen)
Due within
One Year

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

Due within
One Year

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

Cash and deposits

9,153,872--

Cash and deposits

2,691,921--

Cash and deposits in trust

4,011,521--

Cash and deposits in trust

4,822,622

-

-

Total

13,165,393

-

-

Total

7,514,543--

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

-

-

-

Cash and deposits in trust

-

-

-

Cash and deposits in trust

-

-

-

Total

-

-

-

Total

-

-

-

(Note 4) Redemption schedule of long-term debts and otherinterest-bearing indebtedness after the closing date of
the fiscal period(Unit: thousands of yen)

(Note 4) Redemption schedule of long-term debts and otherinterest-bearing indebtedness after the closing date of
the fiscal period(Unit: thousands of yen)

Due within
One Year

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

Due within
One Year

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

Current portion of
long-term debts

1,200,000--

Current portion of
long-term debts

62,341,000--

Long-term debts--

56,100,000

Long-term debts

-

-

-

-

Current portion of
long-term debts in trust

9,960,000--

73,807104,256

Long-term debts in trust

-

-

-

73,80756,204,256

Total

72,301,000--

Current portion of
long-term debts in trust

18,167-Long-term debts in trust

1,218,167

Total

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

-

-

-

88

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

-

-

-

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Long-term debts

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

Long-term debts

-

-

-

-

-

Current portion of
long-term debts in trust

-

-

-

2,894,530

5,143,274

1,725,963

Long-term debts in trust

-

-

-

2,894,530

5,143,274

1,725,963

Total

-

-

-

-

Current portion of
long-term debts in trust-

Long-term debts in trust
Total

-

89

[Notes Related to Rental Properties]
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
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.
(Unit: thousands of yen)
Use

Book Value
Fair Value atBalance at theBalance at the the End of the
Change during
PeriodBeginning ofEnd of thethe Period
the Period
PeriodFiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
INV owns residential and other properties principally in
the Tokyo area and major regional cities for the purpose of
earning stable rental revenues. The book value, amountchanged during the period and balance at the end of theperiod are as follows.

(Unit: thousands of yen)
Use

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

55,874,464△304,706

55,569,758

60,775,000

Residential

55,569,758△300,354

55,269,403

62,209,000

Office8,579,951△28,3428,551,609

7,227,000

Office8,551,609

36,906

8,514,702

7,181,000

Retail5,275,638△50,243

5,225,394

5,690,000

Retail5,225,394

47,106

5,178,288

5,820,000

Parking

100,825△1

100,823

107,000

Parking

100,823

1

100,822

109,000

Hotel

5,532,341

39,763,665

45,296,007

52,759,000

Hotel

45,296,007

12,915,605

58,211,612

71,555,000

Total

75,363,220

39,380,372

114,743,593

126,558,000

Total

114,743,593

12,531,236

127,274,829

146,874,000(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 December 31, 2014 was acquisition of new hotels and ended June 30, 2015 was acquisition of new hotels and capital
capital expenditures related to construction work.
expenditures related to construction work.
(Note 3) The major factor of the decrease was 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 housing properties and depreciation.
(Note 4) The fair value as of the end of the reporting period is
is determined based on the appraisal value provided by Asset
determined based on the appraisal value provided by Asset
Research and Development Inc., Japan Real Estate Institute,
Research and Development Inc., Japan Real Estate Institute,Morii Appraisal & Investment Consulting Inc. and Tanizawa
Morii Appraisal & Investment Consulting Inc. and Tanizawa
Sogo Appraisal Co., Ltd.
Sogo Appraisal Co., Ltd.
For information related to profits and losses from rental
For information related to profits and losses from rental
properties in the fiscal period ended December 31, 2014,
properties in the fiscal period ended June 30, 2015, pleaseplease refer to “Notes to Statement of Income.”refer to “Notes to Statement of Income.”[Notes Related to Restriction on Asset Management]
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
Nothing applicable.

Nothing applicable.

90

[Notes Related to Transactions with Related Parties]

Fiscal Period ended June 30, 2014 (from January 1, 2014 to June 30, 2014)

1

Interested parties of the Asset Manager

Classification

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-

Shijodori Holding Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Investment
manage-mentbusiness-

Nagahoribashi Holding
Tokutei Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Aki Tokutei
Mokuteki Kaisha (Note 3)

Investment
manage-mentbusiness-

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

Hotel business-

Interested partyof the Asset
Danube Tokutei MokutekiManager
Kaisha (Note 3)

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

Transaction
Amount(Thousands ofyen)(Note 1)

Account

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

14,878,412--

4,473,000--

7,594,980--

3,845,400--

2,514,820--

6,631,968--

1,722,789

Accounts
receivables(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

91

540,064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
NumberD3

Name of Property

D5

Hotel MyStays Kyoto-Shijo
MyStays Shin-Urayasu ConferenceCenterHotel MyStays Maihama

D6

D4

Purchase Price
Counterparty(Thousands of yen)
Shijodori Holding Tokutei Mokuteki
6,024,460
KaishaZephyrus Tokutei Mokuteki Kaisha
4,930,200
Zephyrus Tokutei Mokuteki Kaisha

4,870,312

Hotel Vista Premio Dojima

Danube Tokutei Mokuteki Kaisha

3,845,400

D7

Hotel MyStays Nagoya-Sakae

2,958,000

D8Hotel MyStays Sakaisuji-Honmachi

D9

Hotel MyStays Yokohama

Zephyrus Tokutei Mokuteki Kaisha
Nagahoribashi Holding Tokutei
Mokuteki Kaisha
Zephyrus Tokutei Mokuteki Kaisha

D10

Nishi Tokutei Mokuteki Kaisha
Shijodori Holding Tokutei Mokuteki
KaishaAki Tokutei Mokuteki Kaisha

1,898,540

D12Hotel MyStays Nippori
Hotel MyStays
Fukuoka-Tenjin-Minami
Flexstay Inn Iidabashi

1,381,660

D13

Hotel MyStays Ueno Inaricho

Nishi Tokutei Mokuteki Kaisha

1,331,960

D14

Flexstay Inn Shinagawa

Nishi Tokutei Mokuteki Kaisha

1,242,500

D15

Flexstay Inn Tokiwadai

Aki Tokutei Mokuteki Kaisha

1,242,500

D16

Flexstay Inn Sugamo

Aki Tokutei Mokuteki Kaisha

1,192,800

D17

Hotel MyStays Otemae

Aki Tokutei Mokuteki Kaisha

1,192,800

D18

Flexstay Inn Kiyosumi-Shirakawa

Aki Tokutei Mokuteki Kaisha

749,476

D19

Flexstay Inn Nakanobu P1

Aki Tokutei Mokuteki Kaisha

589,442

D20

Flexstay Inn Nakanobu P2

Aki Tokutei Mokuteki Kaisha

283,290

D11

Total

2,514,820
2,119,900

1,570,520

39,938,580

92

2

Asset Custody Companies

Classification

Asset CustodyCompany

NameBusiness or
Occupation

Sumitomo Mitsui
Banking andTrust Bank, Limited trust business

Ratio of
Voting Rights(%)

Type of Transaction

Transaction
Amount(Thousands ofyen)

Repayment of short-term
debt

2,997,500

Loan for short-term debt

5,000,000

Balance at theEnd of the Period(Thousands ofyen)Long-term debt

5,000,000

Prepaid expenses

17,205Long-term
Prepaid expenses

26,444

21,889 Accrued expenses

255

Finance related fees

Account

7,919

Interest expenses(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.
Fiscal Period ended June 30, 2015 (from Janualy 1, 2015 to June 30, 2015)

1

Interested parties of the Asset Manager

Classification

Interested party of
the Asset Manager

Name

Business or
Occupation

Ratio of
Voting Rights
Owned
(%)

Zephyrus Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

Nishi Tokutei
Mokuteki Kaisha(Note 3)

Investment
manage-mentbusiness-

MyStays HotelManagement
Co., Ltd.
(Note 3)

Hotel business-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)
Rental revenues

Transaction
Amount(Thousands ofyen)(Note 1)

Account

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

2,792,000--

2,119,000--

1,760,999

Accounts
receivables(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: 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 and consumption taxes are
not included.

93

501,272

Property
NumberName of Property

Counterparty

D22

Hotel Nets Hakodate

Zephyrus Tokutei Mokuteki
Kaisha2,792,000

D23

Flexstay Inn Shirogane

Nishi Tokutei Mokuteki Kaisha

2,119,000

Purchase Price (Thousands of yen)

Total

2

4,911,000

Asset Custody Companies

Classification

Name

Business or
Occupation

Ratio of
Voting Rights(%)

Type of Transaction

Transaction
Amount(Thousands ofyen)
470,000

Loan for short-term debt
Asset CustodyCompany

Sumitomo Mitsui
Banking andTrust Bank, Limited trust business-Account

Balance at theEnd of the Period(Thousands ofyen)

Short-term debt

5,470,000

Prepaid expenses

Finance related fees

9,171Interest expenses

24,918 Accrued expenses

39,318139(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.
[Notes Related to Per Unit Information]
Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

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

Net assets per unit

23,005 yen

Net assets per unit

23,132 yen

Net income per unit

762 yen

Net income per unit

860 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
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
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)

1,958,002
1,958,002

94

Fiscal Period ended
June 30, 2015
(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)

2,295,304
2,295,304

Average number of investment units during theperiod (units)

2,570,932

95

Average number of investment units during theperiod (units)

2,668,686

[Notes Related to Significant Subsequent Events]

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
INV 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(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., Ltd
2. Borrowing of Funds

96

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
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)1. Borrowing of Funds
INV completed new debt financing in order to procure
funds for the acquisition of the trust beneficiary interests
for the 3 hotel properties, which INV acquired on
February 6, 2015 (see “2. Acquisition of Assets” below),
and related costs.

New Syndicate Loan (D)LenderBorrowingamountInterest rate,
etc.
Interest
payment datePrincipal
repayment
methodBorrowing
method: Sumitomo Mitsui Banking
Corporation,
The
Bank
of
Tokyo-Mitsubishi
UFJ,
Ltd.,
Mizuho Bank, Ltd., Citibank Japan
Ltd., Shinsei Bank, Limited,
Sumitomo Mitsui Trust Bank,
Limited and Resona Bank, Limited: JPY6,241 million

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
Maturitydate: Base Rate (One-month JPY
TIBOR) + 0.80%: On (1) the last Japanese business
day of each month before theprincipal maturity date, beginningwith February 27, 2015, and (2) the
principal maturity date
: Lump-sum repayment: 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.

: In accordance with the“Individual Loan Agreement”
dated February 4, 2015. Secured(Note 1) / with no guarantee: February 6, 2015

Borrowingdate
Maturity: February 6, 2018
Date
(Note 1) First priority pledges over three real estate
properties, Apa Hotel Yokohama-Kannai, Hotel Nets
Hakodate and Flexstay Inn Shirogane; and the real estate
trust beneficiary interests for 65 properties, Nisshin
Palacestage
Daitabashi,
Nisshin
Palacestage
Higashi-Nagasaki, Growth Maison Gotanda, Growth
MaisonKameido,
Emerald
House,
Harmonie
Ochanomizu, Suncrest Shakujii Koen, Growth Maison

97

Term Loan (A)LenderBorrowingamountInterest rate, etc.

Interest: Mizuho Bank, Ltd.
: JPY3,682 million: Base Rate (One-month JPY
TIBOR; however, two-month
JPY TIBOR for the first interest
calculation period only) +0.50%: On (i) the last Japanese businessFiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Shin-Yokohama, Belle Face Ueno Okachimachi, Grand
Rire Kameido, Growth Maison Ikebukuro, Growth
Maison Yoga, Route Tachikawa, Shibuya Honmachi
Mansion, City Heights Kinuta, Acseeds Tower
Kawaguchi Namiki, Capital Heights Kagurazaka, College
Square Machida, Belair Meguro, Wacore Tsunashima I,
Foros Nakamurabashi, Growth Maison Kaijin, College
Square Machiya, City House Tokyo Shinbashi, Winbell
Kagurazaka, Nishiwaseda Cresent Mansion, Lexington
Square Akebonobashi, Casa Eremitaggio, Towa City
Coop Shinotsuka II, Bichsel Musashiseki, Lexel Mansion
Ueno Matsugaya, Towa City Coop Sengencho, Royal
Park Omachi, Lexington Square Haginomachi, Visconti
Kakuozan, Lexington Square Daitabashi, Lexington
Square Honjo Azumabashi, AMS TOWER Minami 6-Jo,
Spacia Ebisu, Kindai Kagakusha Building, Lexington
Plaza Nishigotanda, Cross Square NAKANO, Ohki Aoba
Building, Lexington Plaza Hachiman, AEON TOWN
Sukagawa, Hotel MyStays Kanda, Hotel MyStays
Asakusa, Hotel MyStays Kyoto-Shijo, MyStays
Shin-Urayasu Conference Center, Hotel MyStays
Maihama, Hotel Vista Premio Dojima, Hotel MyStays
Nagoya-Sakae, Hotel MyStays Sakaisuji-Honmachi,
Hotel MyStays Yokohama, Hotel MyStays Nippori, Hotel
MyStays
Fukuoka-Tenjin-Minami,
Flexstay
Inn
Iidabashi, Hotel MyStays Ueno Inaricho, Flexstay Inn
Shinagawa, Flexstay Inn Tokiwadai, Flexstay Inn
Sugamo, Hotel MyStays Otemae, Flexstay Inn Kiyosumi
Shirakawa, Flexstay Inn Nakanobu P1 and Flexstay Inn
Nakanobu P2. First priority mortgages over two realestate properties, Shinjuku Island and Times
Kanda-Sudacho 4th.

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
payment 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
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)LenderBalanceofborrowing
Interest
rate,
etc.

98

: 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: Base Rate (One-month JPY
TIBOR) + 0.80%

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015): Secured / with no guarantee

Borrowing
methodBorrowing date
Maturity datePrepayment
date
Repayment
amountBalanceafter
repayment: February 6, 2015
: February 6, 2018
: July 16, 2015
: JPY6,241 million: JPY 0Prudential 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.

2. Acquisition of Assets
INV decided to acquire the following 3 properties (totalacquisition price of JPY 13,261 million) on February 4,
2015, and completed the acquisition of all of the 3
properties on February 6, 2015.
Property number: D21 Name of property: APA Hotel
Yokohama-Kannai

99

Property number: D24 Name of property: Hotel MyStays
HanedaAcquisition Date
July 16, 2015
Acquisition
Price JPY7,801 million(Note )
Location
5-1-1,
Haneda,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 )
Location
6-32-8, Kameido, Koto-Ku,

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Acquisition Date
February 6, 2015
Acquisition Price
JPY8,350 million(Note 1)
Location
3-37-2, Sumiyoshi-cho,Naka-ku, Yokohama-shi,
Kanagawa
Construction Date
Category ofAssetsSellerTotal Floor Area
Total Leasable
Area

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
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㎡

April 2005
Trust Beneficial Interest
AYK Tokutei Mokuteki
Kaisha6,568.51m2
6,568.51m2

Property number: D22 Name of property: Hotel Nets
Hakodate
Acquisition Date
February 6, 2015
Acquisition Price
JPY2,792 million(Note 1)
Location26-17, Motomachi,
Hakodate-shi, Hokkaido
Construction Date February 2008
Category ofTrust Beneficial Interest
AssetsSellerZephyrus Tokutei Mokuteki
KaishaTotal Floor Area
7,961.26m2
Total Leasable
7,961.26m2
Area
Property number: D23 Name of property: Flexstay Inn
Shirogane
Acquisition Date
February 6, 2015
Acquisition Price
JPY2,119 million(Note 1)
Location
5-10-15, Shirokane,
Minato-ku, Tokyo
Construction Date December 1984
Category ofTrust Beneficial Interest
AssetsSellerNishi Tokutei Mokuteki
KaishaTotal Floor Area
1,754.06m2
Total Leasable
1,754.06m2
Area(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.

100

Property number: D26 Name of property: Hotel MyStays
Ueno Iriyaguchi
Acquisition Date
July 16, 2015
Acquisition Price JPY3,821 million(Note )
Location
5-61, Ueno, 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
6-7-2, Kameido, 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
101-2,
Masago-Cho,
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
5-112-7,
Shinbashi,

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
Minato-Ku, Tokyo
Construction Date
February 2008
Category of Assets
Trust Beneficiary Interest
SellerSuisei Tokutei Mokuteki
KaishaTotal Floor Area
1,403.89㎡
Total Leasable Area 1,403.89㎡
Property number: D30 Name of property: Flexstay Inn
Higashi-Jujo
Acquisition Date
July 16, 2015
Acquisition Price JPY1,277 million(Note )
Location
2-25-6, Nakajujo, 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
2-4-1,
Higashishukugo,
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
1-13-2,
Kaizuka,
Kawasaki-Ku,
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
1-3-13,
Takara-Machi,

101

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
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㎡
Property number: D34 Name of property: Flexstay Inn
Kawasaki-Ogawacho
Acquisition Date
July 16, 2015
Acquisition Price JPY906 million(Note )
Location
15-9,
Ogawa-cho,
Kawasaki-Ku,
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
1-6-3,
Kitaichijohigashi,
Chuo-Ku, 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
5-45-2,
Mukojima,
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 )
Location
2-500-5, Ojima, Koto-Ku,
Tokyo

102

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)

Fiscal Period ended
June 30, 2015
(from January 1 2015 toJune 30, 2015)
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
Ekoda
Acquisition Date
August 28, 2015
Acquisition Price JPY5,069 million(Note )
Location
8-6, Sakaecho, Nerima-Ku,
Tokyo
Construction Date
January 27, 1989
Category of Assets
Trust Beneficiary Interest
SellerTsukiji One Godo Kaisha
Total Floor Area
3,932.93㎡
Total Leasable Area 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
2-21-9,Akebonocho,
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
7-9-14, Ueno, 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.

103

VI.

I.

Statement of Cash Distribution

Unappropriatedretained

Fiscal Period ended December

Fiscal Period ended June 30,

31, 2014

2015(from July 1, 2014 to(from January 1, 2015 to

December 31, 2014)

June 30, 2015)

2,031,546,537 yen

2,370,704,364 yen

II. Distribution Amount

1,956,146,838 yen

2,295,069,960 yen(Distribution per Unit)(733 yen)(860 yen)

III. Retained earnings carried

75,399,699 yen

75,634,404 yen

earnings

forwardCalculation

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

Investment

Corporation,

the

Corporation,

thedistribution amount shall be the

distribution amount shall be theamount which does not exceed

amount which does not exceed

the amount of profits but

the amount of profits but

exceeds

exceeds

90%

of

the

90%

of

the

distributable profit as defined

distributable profit as definedin Article 67-15 of the Special

in Article 67-15 of the Special

Taxation

Taxation

MeasuresAct.

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

determinedby

Investment

determinedbyCorporation.

Pursuant to thisCorporation.

Pursuant to thisInvestment

policy, Investment Corporation

policy, Investment Corporation

determined

determinedthedistribution

amount to be 1,956,146,838

104

the

distribution

amount to be 2,295,069,960

Fiscal Period ended December

Fiscal Period ended June 30,

31, 2014

2015(from July 1, 2014 to(from January 1, 2015 to

December 31, 2014)

June 30, 2015)

yen, out of net income of

yen out of the net income of

1,958,002,616

yen.

2,295,304,665 yen. Investment

Investment Corporation did not

Corporation did not distributedistributein

any amounts in excess of profit,

excess of profit, as set forth inas set forth in Article 17,

Article 17, Paragraph 4 of theParagraph 4 of the Articles of

Articles of Incorporation.

Incorporation.

anyamounts

Note
Accompanying English financial information, comprising Balance Sheet, Statement of Income,Statement of Unitholders’ Equity, Notes to financial statements and statement of Cash Distribution, havebeen translated from the Japanese financial statements of the Investment Corporation prepared inaccordance 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, the Japanesefinancial statements for the six months ended December 31, 2014 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 attached herein since theaccompanying 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

105

VII.

Statement of Cash Flow (Reference Information)(Unit: thousands of yen)
Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
Cash flows from operating activities
Net income before taxes
Depreciation expenses
Investment unit issuance expenses
Finance related costs
Amortization of tenant leasehold and security
deposits in trust
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 accrued consumption tax
payableIncrease (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Others1,958,607
837,289
152,101
294,738

2,295,909
986,795
140,328

(378)

-

(537)
365,480

1,242)
379,341577

467(573,359)

6,739(1,319,253)

1,002,839(143,637)-(673)(10,409)
2,933
13,561(9,776)
5,533

21,53917,86549,39649,576
13,787)
9,953)

Subtotal

1,572,798

4,925,816

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

537
(363,177)
(547)

1,242
381,197)640)

Cash flows from operating activities

1,209,610

4,545,220(40,203,087)

13,512,228)(47,787)

95,186)

131,585

406,054(694)(1,487)(40,119,985)

13,202,847)(13,488,750)
57,300,000(17,552,100)(618,099)(900,512)
23,962,024(151,356)-

Cash flows from investing activities
Payment for acquisition of tangible assets intrust
Repayment 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
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Finance related costs
Payment of distributions
Proceeds from issuance of investment units
Payment of investment unit issuance expenses

106

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

Fiscal Period ended
December 31, 2014
(from July 1, 2014 toDecember 31, 2014)
48,551,206
9,640,831
3,524,562※1 13,165,393

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(Unit: thousands of yen)
Fiscal Period ended
June 30, 2015
(from January 1, 2015 toJune 30, 2015)
3,006,776
5,650,850)
13,165,393※1 7,514,543[Notes Concerning Significant Accounting Policies (Reference Information)]

By Period
Item

Fiscal Period ended December 31,

Fiscal Period ended June 30, 20152014 (from July 1, 2014 to(from January 1 to June 30, 2015)

December 31, 2014)
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
Item

Fiscal Period ended December 31,

Fiscal Period ended June 30, 20152014 (from July 1, 2014 to(from January 1 to June 30, 2015)

December 31, 2014)※1.

Relationship between cash

(As of December 31, 2014)(Unit: thousands of yen)

and cash equivalents in statement of

Cash and deposits

cash

Cash and deposits intrust
Cash and cash
equivalents

flows

and

amounts

accompanying balance sheet

in

107

9,153,872
4,011,521
13,165,393(As of June 30, 2015)(Unit: thousands of yen)
Cash and deposits
Cash and deposits intrust
Cash and cash
equivalents

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

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 is deemed 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

108

Portfolio Data as of the end of 24th Fiscal Period (ended June 30, 2015)
Portfolio Characteristics
At the end of the reporting period, the number of properties held by the Investment Corporation
totaled 94, including 63 residential properties, 23 hotels, 7 retail and office buildings, and as well as
one parking lot with a total acquisition value of JPY 131,188 million and a total leasable area of
240,858.19 m2.
Investment Ratio by Region(Note)The ratios below are indicated are based on the acquisition price and are rounded to one decimal place.

(Note 1) 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 Type109

By Property Age(Note)

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

110Portfolio Overview(as of July 30, 2015)
PurposeProperty
NumberResidential

A26
A27

Name of Property

Location

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

RentableUnits

Acquisition
Price(JPY mn)

Appraisal
Value(JPY mn)

Book Value(JPY mn)

Investment
Occupancy
Ratio
Rate (%)(%)

1,771.13

98

1,251

1,160

1,135

1.0

96.9

2,681.94

60

1,229

1,260

1,112

0.9

94.9

A28

Growth Maison Gotanda

Shinagawa Ward, Tokyo

1,051.50

48

888

968

837

0.7

100.0

A29

Growth Maison Kameido

Koto Ward, Tokyo

1,367.96

66

1,070

1,100

1,001

0.8

95.4

A30

Emerald House

Itabashi Ward, Tokyo

2,152.31

96

1,505

1,280

1,401

1.1

100.0

A31

Harmonie Ochanomizu

Bunkyo Ward, Tokyo

1,748.24

65

1,428

1,320

1,368

1.1

88.3

Suncrest Shakujii-Koen

Nerima Ward, Tokyo

3,029.16

29

1,088

1,050

1,058

0.8

97.4

Growth Maison ShinYokohama
Belle Face UenoOkachimachi

Yokohama City, Kanagawa
Prefecture

1,858.44

68

1,059

1,160

983

0.8

97.0

Taito Ward, Tokyo

1,351.11

64

1,023

999

972

0.8

100.0

A32
A33
A34
A35

Grand Rire Kameido

Koto Ward, Tokyo

1,562.26

72

906

949

844

0.7

100.0

A36

Growth Maison Ikebukuro

Toshima Ward, Tokyo

952.89

42

825

868

767

0.6

88.1

A37

Growth Maison Yoga

Setagaya Ward, Tokyo

1,015.34

39

795

697

758

0.6

94.9

A38

Route Tachikawa

Tachikawa City, Tokyo

1,368.57

24

676

616

646

0.5

96.6

A39

Shibuya-Honmachi Mansion Shibuya Ward, Tokyo

1,167.50

25

651

609

656

0.5

89.9

A40

City Heights Kinuta

1,235.93

19

646

479

647

0.5

94.6

A41

Acseeds Tower Kawaguchi- Kawaguchi City, Saitama
NamikiPrefecture

1,210.74

57

620

707

561

0.5

100.0

A42

Capital Heights Kagurazaka Shinjuku Ward, Tokyo

1,126.65

26

604

556

616

0.5

94.4

A43

College Square Machida

Machida City, Tokyo

1,047.75

62

589

520

567

0.4

100.0

A44

Belair Meguro

Meguro Ward, Tokyo

557.05

25

589

592

568

0.4

100.0

A45

Wacore Tsunashima I

Yokohama City, Kanagawa
Prefecture

907.46

50

572

511

541

0.4

98.0

A46

Foros Nakamurabashi

Nerima Ward, Tokyo

815.77

37

566

572

529

0.4

90.5

A47

Growth Maison Kaijin

Funabashi City, Chiba
Prefecture

2,040.27

34

557

458

528

0.4

87.3

A48

College Square Machiya

Arakawa Ward, Tokyo

871.35

43

510

519

470

0.4

100.0

A51

City House Tokyo Shinbashi Minato Ward, Tokyo

3,364.00

86

2,520

2,950

2,380

1.9

97.1

A52

Winbell Kagurazaka

Shinjuku Ward, Tokyo

4,032.70

118

3,260

3,730

3,099

2.5

95.4

Shinjuku Ward, Tokyo

4,310.77

69

1,880

2,310

1,879

1.4

92.1

Shinjuku Ward, Tokyo

1,987.88

88

1,450

1,680

1,360

1.1

93.5

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

Setagaya Ward, Tokyo

A56

Casa Eremitaggio

Meguro Ward, Tokyo

1,197.19

17

1,070

1,040

982

0.8

84.2

A59

Towa City Coop Shinotsuka
Toshima Ward, TokyoII

1,627.13

58

866

1,020

825

0.7

96.3

A61

Bichsel Musashiseki

Nerima Ward, Tokyo

1,220.24

70

577

681

557

0.4

98.5

A62

Lexel Mansion Ueno
Matsugaya

Taito Ward, Tokyo

1,969.45

29

970

1,120

885

0.7

100.0

A63

Towa City Coop Sengencho

3,426.36

154

1,110

1,320

1,033

0.8

83.0

A64

Royal Park Omachi

1,929.59

51

415

520

394

0.3

98.3

A65

Lexington Square
Haginomachi

1,528.58

39

330

448

299

0.3

92.4

A66

Visconti Kakuozan

705.75

8

255

258

237

0.2

78.3

A71

Lexington Square Daitabashi Suginami Ward, Tokyo

1,430.64

43

977

1,090

890

0.7

93.0

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo Sapporo City, Hokkaido

A75

Spacia Ebisu

A76

Neo Prominence

A77

Invoice Shin-Kobe Residence Kobe City, Hyogo Prefecture

A78

Cosmo Court Motomachi

A79

Revest Honjin

Yokohama City, Kanagawa
Prefecture
Sendai City, Miyagi
Prefecture
Sendai City, Miyagi
Prefecture
Nagoya City, Aichi
Prefecture

Sumida Ward, Tokyo

784.74

33

511

576

459

0.4

91.1

4,460.56

120

1,180

1,150

1,029

0.9

83.3

Shibuya Ward, Tokyo

7,794.91

109

7,010

7,560

6,631

5.3

93.6

Kita Ward, Tokyo

3,574.70

52

1,660

1,820

1,642

1.3

94.9

2,773.71

81

1,260

1,410

1,228

1.0

88.4

Kobe City, Hyogo
Prefecture
Nagoya City, Aichi
Prefecture

2,310.49

82

973

1,050

946

0.7

96.2

1,933.80

80

674

761

656

0.5

100.0

111

Residential

A80

Revest Matsubara

Nagoya City, Aichi
Prefecture

1,955.40

70

657

761

642

0.5

89.5

A81

Sun Terrace Minami
Ikebukuro

Toshima Ward, Tokyo

898.70

38

625

695

610

0.5

97.4

1,731.68

64

608

698

593

0.5

98.6

1,634.60

61

597

695

583

0.5

100.0

1,554.03

40

595

650

580

0.5

92.0

Nagoya City, Aichi
Prefecture
Nagoya City, Aichi
Prefecture
Nagoya City, Aichi
Prefecture

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

A84

Revest Heian

A85

Vendir Hamaotsu Ekimae

Otsu City, Shiga Prefecture

2,670.66

81

581

684

563

0.4

88.4

A86

Salvo Sala

Osaka City, Osaka
Prefecutre

1,428.12

54

544

619

532

0.4

94.4

A87

Excellente Kagurazaka

Shinjuku Ward,Tokyo

701.92

33

543

598

533

0.4

97.1

1,185.50

50

525

567

511

0.4

94.0

Osaka City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

A88

Luna Court Edobori

A89

Winntage Kobe Motomachi

1,433.35

57

512

585

497

0.4

94.7

A90

Queen's Court Fukuzumi

Koto Ward, Tokyo

765.18

25

456

538

448

0.3

100.0

A91

Corp Higashinotoin

Kyoto City, Kyoto
Prefecture

1,029.05

42

446

493

437

0.3

95.7

A92

Belair Oimachi

Shinagawa Ward, Tokyo

530.60

26

412

477

406

0.3

96.1

A93

Siete Minami-Tsukaguchi

Amagasaki City, Hyogo
Prefecture

1,020.86

40

374

418

367

0.3

92.6

A94

Prime Life Sannomiya
Isogami Koen

Kobe City, Hyogo
Prefecture789.12

32

373

429

364

0.3

93.8

A95

HERMITAGE NANBA WEST

Osaka City, Osaka
Prefecture992.76

21

355

409

349

0.3

95.7

A96

Century Park Shinkawa
1-bankan

Nagoya City, Aichi
Prefecture

1,477.62

44

335

411

330

0.3

91.0

A97

West Avenue

Kunitachi City, Tokyo

794.80

40

331

331

323

0.3

75.0

974.81

31

310

374

306

0.2

96.9

761.18

28

297

333

290

0.2

86.8

109,584.45

3,413

58,08362,20955,269

44.3

93.7

A98

Little River Honmachibashi

A99

Prime Life Mikage

Okasa City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

Subtotal
Office Buildings/Retail Facilities

B8

Kindai Kagakusha Building

Shinjuku Ward, Tokyo

1,451.54

13

1,301

1,040

1,232

1.0

100.0

B9

Shinjuku Island

Shinjuku Ward, Tokyo

526.43

1

715

512

708

0.5

100.0

B14

Lexington Plaza Nishigotanda

Shinagawa Ward, Tokyo

6,033.58

11

4,880

4,020

4,753

3.7

100.0

B15

Cross Square NAKANO

Nakano Ward, Tokyo

2,145.00

45

1,060

944

1,069

0.8

70.8

2,178.41

13

816

665

749

0.6

100.0

8,419.15

18

3,280

3,500

3,145

2.5

100.0

B16

Ohki Aoba Building

B17

Lexington Plaza Hachiman

B18

AEON TOWN Sukagawa

Sendai City, Miyagi
Prefecture
Sendai City, Miyagi
Prefecture
Sukagawa City, Fukushima
Prefecture

18,440.58

1

2,320

2,320

2,032

1.8

100.0

39,194.69

102

14,372

13,001

13,692

11.0

98.4

Chiyoda Ward Tokyo

81.04

1

97

109

100

0.1

100.0

Subtotal
Parking
Lots

C1

Stop Parking Kanda-Sudacho

81.04

1

97

109

100

0.1

100.0

HotelsD1

Hotel MyStays Kanda

Chiyoda Ward, Tokyo

2,585.72

126

2,851

3,280

2,891

2.4

100.0

D2

Hotel MyStays Asakusa

Sumida Ward, Tokyo

3,327.38

160

2,584

3,290

2,608

2.2

100.0

7,241.51

224

6,024

8,010

5,997

5.1

100.0

6,232.30

175

4,930

5,260

4,905

4.2

100.0

2,456.36

90

4,870

5,080

4,846

4.1

100.0

9,445.32

141

3,845

4,300

3,834

3.3

100.0

9,064.71

270

2,958

3,040

2,929

2.5

100.0

4,188.83

190

2,514

3,250

2,508

2.1

100.0

7,379.43

190

2,119

2,590

2,108

1.8

100.0

93

1,898

2,140

1,891

1.6

100.0

177

1,570

1,740

1,567

1.3

100.0

Subtotal

D3

Hotel MyStays Kyoto-shijo

D4

MyStays Shin-Urayasu
Conference Center

D5

Hotel MyStays Maihama

D6

Hotel Vista Premio Dojima

D7

Hotel MyStays Nagoya-Sakae

D8

Hotel MyStays
Sakaisuji-Honmachi

D9

Hotel MyStays Yokohama

Kyoto-shi, Kyoto
Prefecture
Urayasu-shi, Chiba
Prefecture
Urayasu-shi, Chiba
Prefectu re
Osaka-shi, Osaka
Prefecture
Nagoya-shi, Aichi
Prefecture
Osaka -shi, Osaka
Prefecture
Yokohama-shi, Kanagawa
Prefecture

D10

Hotel MyStays Nippori

Arakawa Ward , Tokyo

1,719.29

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

Fukuoka-shi, Fukuoka
Prefecture

3,412.71

112

D12

Flexstay Inn Iidabashi

Shinjuku Ward, Tokyo

2,953.38

59

1,381

1,600

1,375

1.1

100.0

D13

Hotel MyStays Ueno Inaricho

Taito Ward, Tokyo

1,150.76

72

1,331

1,780

1,315

1.0

100.0

D14

Flexstay Inn Shinagawa

Shinagawa Ward, Tokyo

1,134.52

55

1,242

1,540

1,236

0.9

100.0

D15

Flexstay Inn Tokiwadai

Itabashi Ward, Tokyo

2,539.75

129

1,242

1,440

1,241

0.9

100.0

D16

Flexstay Inn Sugamo

Toshima Ward, Tokyo

2,089.86

104

1,192

1,410

1,181

0.9

100.0

D17

Hotel MyStays Otemae

Osaka-shi, Osaka

4,956.66

110

1,192

1,730

1,187

0.9

100.0

D18

Flexstay Inn Kiyosumi
Shirakawa

Koto Ward, Tokyo

2,673.64

55

749

848

748

0.6

100.0

D19

Flexstay Inn Nakanobu P1

Shinagawa Ward, Tokyo

770.56

39

589

659

588

0.4

100.0

D20

Flexstay Inn Nakanobu P2

Shinagawa Ward, Tokyo

391.49

22

283

318

285

0.2

100.0

D21

APA Hotel Yokohama-Kannai

Yokohama City,
Kanagawa Prefecture

6,568.51

451

8,350

8,600

8,341

6.4

100.0

D22

Hotel Nets Hakodate

Hakodate City, Hokkaido

7,961.26

202

2,792

2,870

2,792

2.1

100.0

D23

Flexstay Inn Shirogane

Minato Ward, Tokyo(Note)

1,754.06

84

2,119

2,140

2,122

1.6

100.0

Subtotal

91,998.01

3,218

58,63471,55558,211

44.7

100.0

Total

240,858.19

6,734

131,188

146,874

127,274

100.0

96.9

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

113

Overview of the properties acquired in 2015 (20 properties)
3 Hotels Acquired in February(Note 1) Types of accommodations (Daily, Weekly and Monthly) are based on the gross revenue from January 2014 to December 2014 (fullyear). (Daily = 1 ~6 days, Weekly = 7~29 days and Monthly = 30 days or more)(Note 2) ADR, or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by the total
number of sold rooms for the same period.
(Note3) “Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total number of rooms available during the same period x

114

total operating days during the same period)(Note 4) RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate number ofrooms available for the same period (rooms x number of days), and is the same figure as that of a product of room occupancy rate multipliedwith ADR.
(Note 5) Calculated based on the actual results from January 1, 2014 to December 31, 2014.

115

11 Hotels Acquired in July

(Note 1) Types of accommodations (Daily, Weekly and Monthly) are based on the gross revenue from January 2014 to December 2014 (fullyear). (Daily = 1 ~6 days, Weekly = 7~29 days and Monthly = 30 days or more)(Note 2) ADR, or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by the total
number of sold rooms for the same period.
(Note3) “Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total number of rooms available during the same period x
total operating days during the same period)(Note 4) RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate number ofrooms available for the same period (rooms x number of days), and is the same figure as that of a product of room occupancy rate multipliedwith ADR.
(Note 5) Calculated based on the actual results from January 1, 2014 to December 31, 2014.

116

(Note 1) Types of accommodations (Daily, Weekly and Monthly) are based on the gross revenue from January 2014 to December 2014 (fullyear). (Daily = 1 ~6 days, Weekly = 7~29 days and Monthly = 30 days or more)(Note 2) ADR, or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by the total
number of sold rooms for the same period.
(Note3)“Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total number of rooms available during the same period x
total operating days during the same period)(Note 4) RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate number ofrooms available for the same period (rooms x number of days), and is the same figure as that of a product of room occupancy rate multipliedwith ADR.
(Note 5) Calculated based on the actual results from January 1, 2014 to December 31, 2014.

117

(Note 1) Types of accommodations (Daily, Weekly and Monthly) are based on the gross revenue from January 2014 to December 2014 (fullyear). (Daily = 1 ~6 days, Weekly = 7~29 days and Monthly = 30 days or more)(Note 2) ADR, or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by the total
number of sold rooms for the same period.
(Note3) “Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total number of rooms available during the same period x
total operating days during the same period)(Note 4) RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate number ofrooms available for the same period (rooms x number of days), and is the same figure as that of a product of room occupancy rate multipliedwith ADR.
(Note 5) Calculated based on the actual results from January 1, 2014 to December 31, 2014.

118

3 Residential Properties Acquired in July

(Note)
Pre-acquisition NOI is based on the actual results or forecast provided by seller, and has been adjusted by trust fees andinsurance premiums as well as management services fee assuming this property had been held by Invincible119

3 Hotels Acquired in August(Note 1) Types of accommodations (Daily, Weekly and Monthly) are based on the gross revenue from January 2014 to December 2014 (fullyear). (Daily = 1 ~6 days, Weekly = 7~29 days and Monthly = 30 days or more)(Note 2) ADR, or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by the total
number of sold rooms for the same period.
(Note3)“Occupancy rates” are calculated in accordance with the following formula:
Occupancy rates = total number of occupied rooms during a certain period / (the total number of rooms available during the same period x
total operating days during the same period)120

(Note 4) RevPAR, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate number ofrooms available for the same period (rooms x number of days), and is the same figure as that of a product of room occupancy rate multipliedwith ADR.
(Note 5) Calculated based on the actual results from January 1, 2014 to December 31, 2014.

121

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.

122

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

123

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

124