[For Information Purpose Only.
The Japanese language press release should be referred to as the original.].
September 21, 2017

To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Name of representative:
Naoki Fukuda, Executive Director
Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo, Japan(Securities code:8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distribution
for the 29th Fiscal Period Ending December 2017

Invincible Investment Corporation (“INV”) today announced the revision of its forecast of financial results anddistribution per unit (“DPU”) for the fiscal period ending December 2017 (29th fiscal period), which werepreviously announced in “Financial Summary for the June 2017 Fiscal Period (from January 1, 2017 to June30, 2017)” dated August 22, 2017.
1.

Revision of forecasts of financial results and DPU for the fiscal period ending December 2017 (from July
1, 2017 to December 31, 2017)
Operating
Revenues

Previous forecast (A)(announced on
August 22, 2017)

Operating
IncomeOrdinary
IncomeTotal Distribution
AmountNet Income

JPY million

JPY million

JPY million

JPY million

JPY million

10,781

6,512

5,885

5,884

5,964

JPY million

JPY million

JPY million

JPY million

JPY million

11,492

7,024

6,018

6,018

7,496

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

JPY million

JPY million

JPY million

JPY million

711

512

133

133

1,531

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

6.6

7.9

2.3

2.3

25.7

Revised forecast (B)This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

1Previous forecast (A)(announced on
August 22, 2017)
Revised forecast (B)Amount of variance (B) –(A)
Rate of variance((B) – (A)) / (A)(Note)

Earnings per Unit
(Note)

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

Excess Profit
Distribution per
Unit(Note)

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

JPY

JPY

JPY

JPY

1,524

1,524

21

1,545

JPY

JPY

JPY

JPY

1,255

1,255

309

1,564

JPY

JPY

JPY

JPY

(269)

(269)

288

19

%

%

%

%

(17.7)(17.7)

1,371.4

1.2

The number of investment units issued and outstanding at the end of the fiscal period: 3,860,824 units (previous forecast)and 4,793,181 units (revised forecast).

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

2

(Reference)
Assumptions underlying the forecast of financial results and distributions for the fiscal period ending
December 2017 are provided in Appendix 1.
Simulated distribution per unit for the year 2017 are shown for reference purposes, which are calculated byapplying adjustments, as the DPU for the fiscal period ended June 2017 could be affected by one-off
expenses due to the acquisition of properties in the fiscal period ended June 2017 (the “Acquisitions in the
Fiscal Period Ended June 2017”) (Note 1), the issuance of new investment units through the public offering(the “Previous Public Offering”) (Note 2) and the borrowings (the “Borrowings in the Fiscal Period Ended June2017”) (Note 3) (collectively, the “Transactions in the Fiscal Period Ended June 2017”), and the DPU for the
fiscal period ending December 2017 could be affected by one-off expenses due to the acquisition of property
to be acquired and the sale of properties announced on July 25, 2017 (the “Replacement”) (Note 4), theacquisition of properties announced as of today (the “Acquisitions”) (Note 5), the issuance of new investment
units through the public offering and the third party allotment (collectively, the “Public Offering”) (Note 6) andthe borrowings (the “Borrowings”) (Note 7) (collectively, the “Transactions in the Fiscal Period Ending
December 2017”, together with the Transactions in the Fiscal Period Ended June 2017, the “Transactions”),
assuming that the Transactions had occurred prior to the commencement of the fiscal period ended June
2017. For details on the method for calculation and figures of simulated distribution per unit, please refer toAppendix 2. In addition, the 2017 annual DPU sensitivity versus ADR growth based on simulated distribution
per unit for the year 2017 is also shown in Appendix 3.
(Note 1)The Acquisitions in the Fiscal Period Ended June 2017 refers to acquisition of the properties announced in the press
releases entitled “Notice concerning Acquisition of Assets and Entering into Leasing Contract” as of February 22, 2017and “Notice concerning Acquisition of Asset and Entering into Leasing Contract” as of May 25, 2017 and implemented.

(Note 2)The Previous Public Offering refers to the issuance of new investment units through the public offering announced in
the press releases entitled “Notice concerning Issuance of New Investment Units and Secondary Distribution of
Investment Units” as of February 22, 2017 and “Notice Concerning Results of New Investment Units to be Issued via
Third-party Allotment” as of April 7, 2017 and implemented.

(Note 3)

The Borrowings in the Fiscal Period Ended June 2017 refer to the borrowings announced in the press releases entitled“Notice concerning Debt Financing” as of February 22, 2017 and “Notice concerning Debt Financing” as of May 25,2017 and implemented.

(Note 4)The Replacement refers to the acquisition and sale of assets announced in the press release entitled “Noticeconcerning Acquisition and Sale of Assets” as of July 25, 2017 and implemented.

(Note 5)The Acquisitions refers to acquisition of the properties to be acquired announced in the press releases entitled “Noticeconcerning Acquisition of Assets and Entering into Leasing Contract” and “Notice concerning Acquisition of Asset(preferred equity interest)” as of today.

(Note 6)

The Public Offering refers to the issuance of new investment units through the public offering (the “Primary Offering”)
and the third party allotment (the “Third Party Allotment”) announced in the press release entitled “Notice concerning
Issuance of New Investment Units and Secondary Distribution of Investment Units” as of today.

(Note 7)The Borrowings refer to the borrowings announced in the press release entitled “Notice concerning Debt Financing” as oftoday.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

32. Reasons for the revision of forecast of financial results and distribution
As announced in the press releases “Notice concerning Acquisition of Assets and Entering into Leasing
Contract”, “Notice concerning Acquisition of Asset (preferred equity interest)”, “Notice concerning Debt
Financing” and “Notice concerning Issuance of New Investment Units and Secondary Distribution of
Investment Units”, INV expects to conduct the Public Offering as well as Borrowings in order to acquire
the four hotel properties and the preferred equity interests in a special purpose company (the“Anticipated Acquisition”) on October 13, 2017, and the one hotel property (additional acquisition
portion) in connection with the Replacement on October 31, 2017, respectively.
The revision of the forecast of financial results and distribution for the fiscal period ending December
2017 are based on expectation of an increase in revenue owing to the contributions from properties tobe acquired as well as considerable one-off expenses due to the Public Offering and Borrowings.
3.

Excess profit distribution policy

INV believes maintaining the stability of cash distributions over the medium term is one of the mostimportant factors in determining the amount of distribution for a given fiscal period, and therefore, INV
has adopted the policy to make distributions in excess of profits in order to stabilize distributions, incases where dilution of investment units or significant expenses are to be recorded in connection with,among other things, the acquisition of assets or the raising of capital, leading to a temporary decreasein distribution per unit, taking into consideration the level of distribution per unit assuming suchacquisition of assets or capital raising had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits for the purpose of mitigating the impact
of corporate tax increase arising from different rules and practices in tax and accounting, such astreatment on depreciation of fixed term land lease or asset retirement obligation.
With respect to the fiscal period ending December 2017, due to considerable one-off expenses inconnection with the Public Offering and the Borrowings, earnings per unit is expected to decrease.
Therefore, from the perspective of maintaining stable distributions, INV intends to make distributions inexcess of profits within the scope of the expected shortfall between actual earnings per unit and thesimulated earnings per unit after the Acquisitions, the Public Offering, the Borrowing and theReplacement. The figures for earnings per unit, distribution per unit (excluding excess profit distribution perunit), excess profit distribution per unit, distribution per unit (including excess profit distribution per unit) andsimulated distribution per unit are summarized in the table A below. The actual results for the fiscal period
ended June 2017 and the sum of the actual results and forecasted figures for the year 2017 are also statedtherein. Simulated distribution per unit for the fiscal period ending December 2017 are calculated by applying
adjustments listed 3, 4 and 7 through 11 among the adjustments described in Appendix 2. For the otherassumptions, please refer to Appendix 1.
In addition to the distributions in excess of profits to stabilize distributions as mentioned above, INV also
intends to make distributions in excess of profits in order to cope with the discrepancy between tax andaccounting treatment for the fiscal period ending December 2017 as with the fiscal period ended June
2017.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

4

[Table A]
Earnings per
Unit

Actual for the fiscal period
ended June 2017(Note 1)
Forecast for the fiscal
period ending December
2017(Note 2)

Excess Profit
Distribution per
Unit

Distribution per
Unit (Including
Excess Profit
Distribution per
Unit)

Simulated
Distribution per
Unit

JPY

JPY

JPY

JPY

JPY

1,217

1,243

21

1,264

1,264

JPY

JPY

JPY

JPY

JPY

1,255

1,255

309

1,564

1,564

JPY

JPY

JPY

JPY

JPY

2,472

2,498

330

2,828

2,828

Forecast for the year 2017
(Note 1)

Distribution per
Unit (Excluding
Excess Profit
Distribution per
Unit)

The number of investment units issued and outstanding as of the end of the fiscal period ended June 2017 is 3,860,824
units. The simulated distribution per unit for the fiscal period ended June 2017 is actual distribution per unit (includingexcess profit distribution per unit).

(Note 2)

It is assumed the forecasted number of investment units issued and outstanding as of the end of the fiscal period
ending December 2017 is 4,793,181 units. The earnings per unit, distribution per unit (excluding excess profit
distribution per unit), excess profit distribution per unit, distribution per unit (including excess profit distribution per unit)
and simulated distribution per unit for this fiscal period are JPY 1,267, JPY 1,267, JPY 312, JPY 1,579 and JPY 1,579,
respectively, on the assumption that such forecasted number is 4,748,783 where no investment units are issued
through the Third Party Allotment.

(Note 3)Figures are rounded down to the indicated amount. Hereinafter the same.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5

4.

Reasons for Forecast Revision

The DPU for the fiscal period ended June 2017 was JPY 1,264 (+6.6% year-on-year) and the DPU for
the fiscal period ending December 2017 is forecast to be JPY 1,564 (+5.9% year-on-year); the full year
DPU for calendar year 2017 is forecast to be JPY 2,828 (+6.2% year-on-year) and growth is expected in
2017.
NOI for our entire portfolio is expected to grow by 15.8% due to revenue contributions by the assets to beacquired and internal growth of the existing portfolio, approximately 8.2% of which is expected to be
derived from growth of NOI for the hotel portfolio and approximately 7.7% is from growth of NOI for the
residential portfolio.
As for internal growth of the hotel portfolio and the residential portfolio, NOI for the hotel portfolio (Note1) and residential portfolio (Note 2) for the fiscal period ending December 2017 are expected to grow by
4.1% and 1.7%, respectively, against those for the corresponding period for the previous year, and thetotal NOI for both hotel and residential portfolio is expected to grow by 3.4%. With regard to the hotel
portfolio (Note 1), INV forecasts ADR, occupancy rate and RevPAR (Note 3) for the fiscal period ending
December 2017 to increase by 0.7%, 1.8pt and 2.7% respectively, resulting in GOP (Note 3) growth of
3.9% as described in “4. Reasons for Forecast Revision, (Reference)”.
INV continues to cooperate with the operators of the hotels to achieve internal growth of the hotel portfolio,
and in particular, it is closely working with MYSTAYS HOTEL MANAGEMENT Co., Ltd. (“MHM”) and moving
ahead with a wide array of initiatives. MHM is taking various actions based on extensive operational analysis
and customer feedback through TrustYou (Note 4) Analytics to improve customer satisfaction. MHM’s
initiatives include strategically increasing overbooking ratios in order to offset last minutes cancellations,converting smoking rooms to non-smoking to address the trend that ADR of non-smoking rooms is higher
than that of smoking rooms, and diversifying and expanding distribution channels to enhance relationships
with travel agents, airlines and OTAs in China, Hong Kong and Korea. Further, MHM is taking actions such as
improving its website, utilizing new booking navigation system, incorporating a customer relationshipmanagement system and introducing enhanced loyalty programs in order to develop direct relationship withcustomers, reduce costs and increase direct reservation. In addition, MHM initiated a campaign regarding
direct reservation for individuals and companies. Other initiatives include reducing linen and cleaning costs
and increasing services for Chinese Speaking guests.
Meanwhile, with regard to internal growth of the residential portfolio, NOI for 70 residential properties owned
by INV as of the end of June 2017 for the fiscal period ending December 2017 is expected to grow by 1.7%
against that for the corresponding period in the previous year since the rent increase program has brought
results. INV forecasts occupancy rate (Note 5) to increase from 95.3% to 95.9% and average rent per tsubo(Note 5) to increase by 2.5%, from JPY9,535 to JPY9,755 against that for the corresponding period in theprevious year. Furthermore, as a part of the rent increase program, INV replaced the master lease companies
and property managers (the “ML/PM companies”) at 17 properties in December 2016 and January 2017 andat one property as of May 1, 2017, focusing on property managers who have performed well.
Given that there were a lot of proposals on property management in respect of Royal Parks Tower
Minami-Senju, the flagship property in residence portfolio of INV, which was acquired in March 2017, INV
analyzed to select an optimal property manager. As a result, INV decided to change the ML/PM companies atfour Royal Parks Residential Assets including “Royal Parks Tower Minami-Senju” to Goodworks Co., Ltd. inJune 2017, and it completed the change at “Royal Parks Shinden” as of July 1, 2017 and “Royal Parks
This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

6

Momozaka” as of August 1, 2017. It is scheduled to complete the change at “Royal Parks Tower
Minami-Senju” and “Royal Parks Seasir Minami-Senju” as of December 1, 2017. INV aims to increase the
NOI through improving the profitability of these four properties and reducing costs as a consequence of suchchanges.
INV seeks to maximize unitholders' value while building its portfolio with hotels and residential properties as
its core assets via focusing on both growth and stability.
(Note 1)

Based on actual results and forecasts for the 40 hotel properties of the 49 hotel properties in our portfolio as ofJune 30, 2017, nine hotels with fixed-rent lease agreements are excluded. Such nine hotels with fixed-rent are
Super Hotel Shinbashi/ Karasumoriguchi, Comfort Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi,
Super Hotel JR Ueno-iriyaguchi, Comfort Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubamesanjo,
Comfort Hotel Kitami, and Takamatsu Tokyu REI Hotel.

(Note 2)

Calculated based on actual results and forecasts for the 70 residential properties owned as of the end of June
2017.

(Note 3)For definition of ADR, occupancy rate for hotel portfolio, RevPAR and GOP, please refer to “4. Reasons for
Forecast Revision (Reference)” below.

(Note 4)(Note 5)“TrustYou” analyzes hundreds of millions of travel reviews and is one of the world’s largest guest feedback platforms.
For definition of occupancy rate and average rent per tsubo, please refer to “4. Reasons for Forecast Revision(Reference)” below.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

7

(Reference)<Forecasts for Performance Indicators of Hotel Properties (40 hotels (Note 1))>
Y2017

89.0%
9,345
8,320

December fiscal
period(Forecast)
92.2%
10,076
9,291

5,365

6,269

June fiscal period(Actual)Occupancy Rate (Note 2)
ADR (JPY) (Note 3)
RevPAR (JPY) (Note4)
GOP (JPY million)(Note 5)(Note 6)

Full-Year(Forecast)
90.6%
9,720
8,809
11,634Year-on-Year Changes
Y2017
June fiscal period(Actual)Occupancy Rate
ADR
RevPARGOP-0.8pt
+0.7%
-0.2%
+1.6%

December fiscal
period(Forecast)+1.8pt
+0.7%
+2.7%
+3.9%

Full-Year(Forecast)+0.5pt
+0.7%
+1.3%
+2.8%

(Note 1) For definition of 40 hotel properties, please refer to Note 1 of “4. Reasons for Forecast Revision” above.
(Note 2) “Occupancy Rate” for hotel portfolio is calculated using the following formula: room occupancy rate = total number of rooms
occupied during the relevant period ÷ (aggregate number of rooms during the relevant period x number of days during relevant
period). Hereinafter the same.
(Note 3) “ADR,” or Average Daily Rate, is the value of the total room revenues for a certain period (excluding service fees) divided by the
total number of sold rooms for the same period. Hereinafter the same.
(Note 4) “RevPAR,” or Revenues Per Available Room, is calculated by dividing the total revenues for a certain period by the aggregate
number of rooms for the same period (rooms x number of days), and is the same figure as that of a product of ADR andoccupancy rate. Hereinafter the same.
(Note 5) “GOP,” or Gross Operating Profit, is rent revenue INV receives as a rent which is the amount remaining after deducting thepersonnel, material, water, electricity, and heating and advertising expenses as well as the management service fee for the
hotel operations (if any) from the hotel’s revenues. Hereinafter the same.
(Note 6) With respect to APA Hotel Yokohama-Kannai, we consider the rent paid to INV for this hotel as GOP of this hotel.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

8

<Forecasts for Performance Indicators of Residential Properties (70 properties (Note 1))>Y2017

Occupancy Rate (Note 2)
Average Rent per Tsubo perMonth (Note 3) (JPY)

95.2%

December fiscal
period(Forecast)
95.9%

9,595

9,775

9,685

NOI (JPY million) (Note 4)

2,597

2,594

5,191

June fiscal period(Actual)Full-Year(Forecast)
95.5%

Year-on-Year Changes
Y2017-0.9ptDecember fiscal
period(Forecast)+0.6pt

+1.6%

+2.5%

+2.1%

+2.4%

+1.7%

+2.0%

June fiscal period(Actual)Occupancy Rate
Average Rent per Tsubo per
Month
NOI

Full-Year(Forecast)-0.2pt(Note 1) For definition of 70 residential properties, please refer to Note 2 of “4. Reasons for Forecast Revision” above.
(Note 2) “Occupancy Rate” is calculated by dividing the sum of total residential leased area by the sum of total residential leasablearea at the end of each month of each period. Hereinafter the same.
(Note 3) “Average Rent per Tsubo per Month” is calculated by dividing the total residential rental revenue including common area
charges for each month by the sum of total residential leasable area at the end of each month, indicating the average rent
per Tsubo weighted by leased area. Hereinafter the same.
(Note 4) Figures are rounded down to the indicated amount. Excludes one‐off insurance‐related revenues and expenses. Hereinafter
the same.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

9Based on the above, the forecasts of earnings per unit and distribution per unit for the full calendar year2017 are as follows:<Full-year 2017> (Aggregate of the fiscal periods ended June 2017 (Actual) and ending December
2017 (Forecast))
Distribution per
Unit (Excluding
Excess Profit
Distribution per
Unit)(Note)

Excess Profit
Distribution per
Unit(Note)

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

JPY

JPY

JPY

JPY

2,741

2,767

42

2,809

JPY

JPY

JPY

JPY

2,472

2,498

330

2,828

JPY

JPY

JPY

JPY

(269)

(269)

288

19

%

%

%

%

(9.8)

(9.7)

685.7

0.7

Earnings per
Unit(Note)
Previous forecast (A)(announced on
August 22, 2017)
Revised forecast (B)Amount of variance(B)- (A)Rate of variance((B) – (A)) / (A)(Note)

Assumption: the number of investment units issued and outstanding at the end of the fiscal period ended June 2017 was
3,860,824 units and the number of investment units issued and outstanding at the end of the fiscal period ending
December 2017 is 4,793,181 units.

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

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

10

(Appendix 1)<Assumptions Underlying the Forecast of Financial Results and Distribution forthe 29th Fiscal Period >Item
Fiscal period

Assumptions
The 29th fiscal period: from July 1, 2017 to December 31, 2017 (184 days)
Properties held as of the end of the 29th fiscal period: 129 properties and preferred
equity interests in one special purpose company

Assets undermanagement

INV assumes that INV will newly acquire four hotel properties and preferred equity
interests in one special purpose company as of October 13, 2017 (Note1) and an
additional portion of Hotel MyStays Gotanda Station as of October 31, 2017 (Note2) inaddition to existing 125 properties, and that there will be no other change through theend of the fiscal period ending December 2017.
(Note1) Regarding the acquisition of properties and preferred equity interests as of October 13,
2017, please refer to “Notice concerning Acquisition and of Assets and Entering into Leasing
Contract” and “Notice concerning Acquisition of Asset (preferred equity interest)” as of today.
(Note2) Regarding additional acquisition of Hotel MyStays Gotanda Station, please refer to “Noticeconcerning Acquisition and Sale of Assets” as of July 25, 2017. As the additional portion isassumed to be operated together with the existing portion as a unit, we count the existing portionand the additional portion as one property.

As of the end of the 29th fiscal period: 4,793,181 units

Units outstanding

INV assumes that a total of 932,357 new investment units will be issued through thePrimary Offering (887,959 new investment units) and the Third Party Allotment (up to44,398 new investment units), and that the expected number of investment units issued
and outstanding following the Offering will be 4,793,181 units, and that there will be no
additional issuance of units thereafter through the end of the fiscal period ending
December 2017.
Balance as of the end of the fiscal period ending December 2017: JPY 186,983 mn

Interest-bearing liabilities

INV assumes that JPY 22,993 million of borrowing is implemented as of October 13,
2017 for the fiscal period ending December 2017, as mentioned in the press release
entitled “Notice concerning Debt Financing” as of today and no other loan or repayment
is implemented.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

11

Item

Assumptions
INV expects to record rental revenues for the fiscal period ending December 2017 as
follows:
December 2017 Fiscal
PeriodJPY 11,372 mn(JPY 7,315 mn)(JPY 3,623 mn)(JPY 3,692 mn)
JPY - mn・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)
・Dividend amountINV estimates a gain on sales of JPY120 million as operating revenues other than rental
revenues from sale of Kindai Kagaku Sha Building and Times Kanda-Sudacho 4th
completed on July 31, 2017.
Operating revenues

Rental revenues in the fiscal period ending December 2017 are calculated based on
estimates as of today from July 2017 to December 2017. In addition, INV assumes there
will be no delinquencies or non-payment of rent by tenants.
The majority of INV’s owned hotels uses a variable rent scheme linked to performance ofthe relevant hotel. Hotel demand is affected by seasonal factors and the December
ending fiscal periods (from July to December) which include summer holiday andautumn outing seasons tend to record higher revenue than the June ending fiscal
periods (from January to June). Accordingly, rental revenue of INV tends to be higher inthe December ending fiscal periods than in the June ending fiscal periods.
Furthermore, we estimate the amount of dividends on the preferred equity interests
based on the performance of the underlying asset and the assumed amount incurred by
the special purpose company. However, since the first dividends from the special
purpose company will be paid after January 1, 2018, there is no dividend income for the
fiscal period ending December 2017.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

12

Item

Assumptions
INV expects to incur property related expenses for the fiscal period ending December
2017 as follows:・Facility management fees(of these, repair costs)
・Taxes and other public charges(Note)
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses
Operating expenses

December 2017
Fiscal Period
JPY 506 mn(JPY 31 mn)
JPY 465 mn
JPY 11 mn
JPY 2,570 mn
JPY 396 mn
JPY 3,951 mn(Note) Property taxes and city planning taxes on the assets acquired in 2017 including
anticipated acquisition of assets are calculated on a pro-rata basis with the previous
owners and settled at the time of acquisition, and are not recorded for the fiscal period
ending December 2017 and recorded from the fiscal period ending June 2018 as theamount equivalent to such settlement is included in the acquisition cost.
INV expects to incur other operating expenses than the property related expenses forthe fiscal period ending December 2017 as follows:
December 2017
Fiscal Period
JPY 516 mn

・Other operating expenses(of these, asset management
fees)(JPY 250 mn)

INV expects to record net operating income for the fiscal period ending December 2017
as follows:

NOI

December 2017
Fiscal Period
JPY 9,991 mn(JPY 6,979 mn)(JPY 2,648 mn)(JPY - mn)

・NOI(of these, hotel NOI)(of these, residential NOI)(of these, dividend amount)

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues (including the amount of dividends on the preferred equity
interests) ‐ Property Related Expenses + Depreciation Expenses
However, since the first dividends from the special purpose company will be paid afterJanuary 1, 2018, there is no dividend income for the fiscal period ending December
2017.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

13

Item

Assumptions

INV expects to incur non-operating expenses for the fiscal period ending December
2017 as follows:

Non-operating expenses

Distribution per unit

・Interest expense
・Finance related costs
・Other non-operating expenses(expenses relating to theissuance of new units for theOffering)
Total Non-operating expenses

December 2017
Fiscal Period
JPY 454 mn
JPY 341 mn
JPY 210 mn( JPY 210 mn)

JPY 1,006 mn

The distribution per unit is calculated in accordance with the cash distribution policy as
set forth in INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending December 2017, INV expects
to distribute an aggregate amount of JPY 7,496 million (distribution per unit: JPY 1,564)
based on the assumption that excess profit distribution will be paid (JPY 1,481 million),in addition to net income for the fiscal period ending December 2017 (JPY 6,018 million)
which will be used as funds.
For the fiscal period ending December 2017, INV expects to record deferred gain on
hedge of the interest rate swap as the valuation and conversion adjustments, etc. of JPY
92 million, which is equal to the amount for the fiscal period ended June 2017. The
distribution per unit is calculated based on the assumption that fluctuation of the market
value of the interest rate swap does not affect the distribution per unit.
Distribution per unit may vary due to various factors, including changes of the assets
under management, fluctuation of rent income associated with reasons such as changeof tenants and occurrences of unexpected repairs.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

14

Item

Excess profit distribution
per unit

Assumptions

INV believes maintaining the stability of cash distributions over the medium term is oneof the most important factors in determining the amount of distribution for a given fiscal
period, and therefore, INV has adopted the policy to make distributions in excess of
profits in order to stabilize distributions, in cases where dilution of investment units orsignificant expenses are to be recorded in connection with, among other things, theacquisition of assets or the raising of capital, leading to a temporary decrease in
distribution per unit, taking into consideration the level of distribution per unit assuming
such acquisition of assets or capital raising had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits for the purpose of
decreasing the impact from corporate tax increase arising from different rules in tax andaccounting practices, such as treatment on depreciation of fixed term land lease or
asset retirement obligation.
With respect to the fiscal period ending December 2017, due to one-off expenses inconnection with the Offering and the Borrowings, earnings per unit is expected todecrease. Therefore, from the perspective of maintaining stable distributions, INV
intends to make distributions in excess of profits (JPY 292 per unit) within the scope ofthe expected shortfall between actual earnings per unit and the simulated earnings perunit after the transactions mentioned above.
In addition, INV also intends to make distributions in excess of profits (JPY 17 per unit
for the fiscal period ending December 2017) in order to cope with the discrepancy
between tax and accounting treatment for the fiscal period ending December 2017.

Excess profit distribution per unit

Other

December 2017
Fiscal Period
JPY 309

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

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

15

(Appendix 2)<Simulated distribution per unit for full-year 2017>
Simulated distribution per unit for the year 2017 refers to sum of earnings per unit calculated by first assuming
the actual financial results for the fiscal period ended June 2017 and the forecast of financial results for the
fiscal period ending December 2017 and then, by applying the simulated adjustments below, eliminating theeffects of such factors as one-off expenses and treating the Acquisitions in the Fiscal Period Ended June
2017, the Previous Public Offering, the Borrowings in the Fiscal Period Ended June 2017, the Replacement,
the Acquisitions, the Public Offering and the Borrowings etc. as if they had occurred prior to the beginning of
the fiscal period ended June 2017, and excess profit distribution per unit (limited to distribution in excess of
profit for coping with the discrepancy between tax accounting treatment).
Simulated adjustment is based on the total of the following adjustments:
1.

Calculation is based on the assumption that 185,000 units through the Previous Public Offering were
issued at the beginning of the fiscal period ended June 2017.

2.

Elimination of one-off expenses in connection with the Transactions for the Fiscal Period Ended June
2017.

3.

The figures are on the assumption that revenue contributions as well as expenses such as property taxes
and city planning taxes on the assets acquired announced in the press release entitled “Noticeconcerning Acquisition of Assets and Entering into Leasing Contract” as of February 22, 2017 wererecorded from the beginning of the fiscal period ended June 2017.

4.

The figures are on the assumption that revenue contributions as well as expenses such as property taxes
and city planning taxes on the assets acquired announced in the press release entitled “Noticeconcerning Acquisition of Asset and Entering into Leasing Contract” as of May 25, 2017 were recorded
from the beginning of the fiscal period ended June 2017.

5.

The figures are on the assumption that the effect of NOI increase arising from the changes in master
lessee and property management company as announced in the press release “Notice concerning
Changes of Master Lessee and Property Manager” as of June 26, 2017 had been recorded from the
beginning of the fiscal period ended June 2017.

6.

Elimination of a gain on sales of the assets sold announced in the press release entitled “Noticeconcerning Acquisition and Sale of Assets” as of July 25, 20177.

The figures are on the assumption that decrease of the revenue of the assets sold announced in thepress release entitled “Notice concerning Acquisition and Sale of Assets” as of July 25, 2017 had beenrecorded from the beginning of the fiscal period ended June 2017.

8.

The figures are on the assumption that revenue contributions as well as expenses such as property
taxes and city planning taxes on the asset to be acquired announced in the press release entitled “Noticeconcerning Acquisition and Sale of Assets” as of July 25, 2017 were recorded from the beginning of the
fiscal period ended June 2017.

9.

The figures are on the assumption that revenue contributions as well as expenses such as property
taxes and city planning taxes on the assets to be acquired announced in the press releases entitled“Notice concerning Acquisition of Assets and Entering into Leasing Contract” and “Notice concerningThis English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

16Acquisition of Asset (preferred equity interest)” as of today were recorded from the beginning of the fiscal
period ended June 2017.
10. The figures are on the assumption that a total of 932,357 units (887,959 units through the Public Offering
and up to 44,398 units through the Third Party Allotment) were issued at the beginning of the fiscal period
ended June 2017.
11. Elimination of one-off expenses in connection with the Transactions for the Fiscal Period Ending
December 2017.

The simulated distribution per unit for the year 2017 as well as the simulated earnings per unit, simulated
distribution per unit (excluding excess profit distribution per unit) and simulated excess profit distribution perunit, for the year 2017, which are calculated by applying the same adjustments as the simulated distribution
per unit for the year 2017 are summarized in the column of “After the Transactions in the Fiscal Period Ending
December 2017” of the Table A below. In addition, to exhibit the effect of the transactions stated in “Noticeconcerning Acquisition of Assets and Entering into Leasing Contract”, “Notice concerning Acquisition of Asset(preferred equity interest)”, “Notice concerning Debt Financing” and “Notice concerning Issuance of New
Investment Units and Secondary Distribution of Investment Units” as of today and the implementation of theacquisition of the asset announced in the press release entitled “Notice concerning Acquisition and Sale ofAssets” as of July 25, 2017 (the Transactions in the Fiscal Period Ending December 2017), these figures
before the Transactions in the Fiscal Period Ending December 2017 are also included in the Table A.
Simulated distribution per unit after the Transactions in the Fiscal Period Ending December 2017 are
calculated by applying all adjustments listed above, while simulated distribution per unit before theTransactions in the Fiscal Period Ending December 2017 are calculated by applying adjustments listed 1
through 7 above which are related to transactions etc. implemented before the Transactions in the Fiscal
Period Ending December 2017.
The simulated distribution per unit for the year 2017 and the other figures in the Table A below are purely asimulation intended to describe the effect of the transactions, etc. described above and are neither a forecast
nor prospect relating to INV’s earnings or distribution per unit for a given operating period. Accordingly, there
is no guarantee that the simulated distribution per unit for the year 2017 will ever be realized for any future,and INV is not obligated to revise any of the simulated figures regardless of any changes in circumstancesthat may affect the above simulation.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

17

[Table A]

Simulated
Earnings per Unit
for the year 2017
(Note)

Simulated
Distribution
per Unit(Excluding
Excess Profit
Distribution perUnit) for theyear 2017(Note)

Simulated
Excess Profit
Distribution per
Unit for the year
2017
(Note)

Simulated
Distribution per
Unit(Including
Excess Profit
Distribution perUnit) for theyear 2017(Note)

JPY

JPY

JPY

JPY

2,752

2,752

42

2,794

JPY

JPY

JPY

JPY

2,881

2,881

34

2,915

Amount of variance (B) –
(A)

JPY

JPY

JPY

JPY

129

129

(8)

121

Rate of variance((B) – (A)) / (A)

%

%

%

%

4.7

4.7

(19.0)

4.3

Before the Transactionsin the Fiscal PeriodEnding December 2017
(A)
After the Transactions in
the Fiscal Period Ending
December 2017 (B)(Note)

Assumption: the number of investment units issued and outstanding before the Transactions in the Fiscal Period Ending
December 2017: 3,860,824 units; the number of investment units issued and outstanding after the Transactions in the Fiscal
Period Ending December 2017: 4,793,181 units.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

18

(Appendix 3)<Simulated DPU for full-year 2017 Sensitivity (vs ADR Growth) >(JPY)(Note 1) “ADR Growth” is shown as a % change from the ADR assumption for the 2017 forecast for the 44 hotels with a variable rent
scheme owned by INV as of today after anticipated acquisition excluding Sheraton Grande Tokyo Bay Hotel (Preferred Equity
Interest).
(Note 2) “Hotel ADR” is average of ADR of the said 44 hotels.
(Note 3) “Simulated DPU for full-year 2017 Growth” is simulated data based on the simulated distribution per unit for the year 2017, on
the assumption that all assumptions used to calculate simulated distribution per unit for the year 2017 for INV’s current assets
and the assets to be acquired remain the same, except for the ADR.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

19

(Appendix 4)<Simulated NOI of our portfolio >(Note 1)

Hotel (Variable Rent) Simulated NOI is based on the actual and forecast results of 43 variable rent hotel properties outof the 54 hotel properties INV will hold after the anticipated acquisition as of the end of October 2017, excluding (i) nine hotel
properties with fixed‐rent lease agreements since the performance of the hotels with fixed‐rent lease agreements do notsignificantly affect year-on-year variances (for more details, please see “4. Reasons for Forecast Revision, (Note 1)” ), (ii) the
Preferred Equity Interest since INV’s profit regarding SGTB is dividends by a special purpose company (iii) Hotel MyStays
Sapporo Station since the performance by previous operator is not disclosed, and (iv) Additional acquisition of Hotel
MyStays Gotanda Station since the conversion has not been completed and comparable 2016 actual and 2017 forecast
figures are not available (for more details, please see the press release “Notice Concerning Acquisition of Assets andEntering into Leasing Contract”).
Residential Simulated NOI is based on the actual and forecast results of the existing 70 residential properties held as of June30, 2017. Temporary insurance benefit and cost corresponding it is excluded.
Hotel (Variable Rent) Simulated NOI and Residential Simulated NOI for (i) existing properties acquired on or after January 1,
2016 and (ii) the assets to be acquired are based on actual results provided by sellers and adjusted to reflect trust fees andinsurance premiums assuming the properties had been held by INV.
This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

20

(Appendix 5)<KPI of our current Hotel portfolio>(Note 1)For the assumptions of the actual and forecasts of ADR, occupancy, RevPAR and simulated GOP, please refer to (Note 1)of Appendix 4 above.

(Note 2)

In calculating the simulated GOP, the rent paid for APA Hotel Yokohama-Kannai, is regarded as GOP of the hotel.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

21

(Appendix 6)<Rent Increase Initiative regarding our portfolio of the residential properties>(Note 1) Based on the residential properties owned in relevant year excluding the performance for the pre-acquisition period for theproperties acquired during the year. The numbers of the properties at the end each year is as follows: 63 properties for 2013
and 2014, 66 properties for 2015, 68 properties for 2016, and 70 properties as of July 31, 2017.
(Note 2)

Occupancy is calculated by dividing the sum of leased area by the sum of leasable area at the end of each month of each year,
based on the properties owned in the relevant year excluding the performance for the pre-acquisition period for the properties
acquired during the year.

(Note 3)

Net Leasing Cost (Multiple of Monthly Rent) = Advertising Expenses (Multiple of Monthly Rent) + Free Rent (Multiple ofMonthly Rent) – Key Money (Multiple of Monthly Rent). Multiple of Monthly Rent is converted by the monthly rent for the
relevant lease agreement during the relevant period and rounded to two decimal places.

(Note 4)

Renewal rate is calculated by the number of renewal rents during the relevant period divided by the number of contracts due
up for renewal during the relevant period.

(Note 5)

Average Rent Increase/Decrease is increase or decrease (%) in the sum of monthly rents on new or renewal, or the total ofboth, compared with the sum of previous rents.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

22

(Appendix 7)<Operating Revenue Composition (Simulated)>
Existing portfolio

Post-acquisition

1
1(JPY million)(JPY million)

11(Note 1) Includes Offices and Commercial facilities.
(Note 2) “Existing Portfolio Operating Revenue Composition” is calculated based on the 2017 full year operating revenue
estimates (actual results for January to July and estimates for August to December) for all INV’s assets as of today. The
properties acquired in March and May 2017 are on the assumption that they had been owned since January 1, 2017.
Performance for the pre-acquisition period is based on actual results provided by the respective sellers and performancefor the post-acquisition period is based on actual results until July 31, 2017 or based on estimates after August 2017.
“Post-acquisition Operating Revenue Composition” is calculated by adding the 2017 full year operating revenue
estimates on the assets to be acquired (actual results for January to July and estimates for August to December)calculated by Consonant Investment Management Co., Ltd, the asset manager of INV, to the figures for the existing
portfolio. However, with respect to the additional acquisition of a portion of Hotel MyStays Gotanda Station, 2018 full year
operating revenue estimates are used as there are no actual results.
This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

23

(Note 3) Annualized estimates of dividends for INV is expected to receive from preferred equity interests in the special purpose
company.
(Note 4) Percentage is rounded to one decimal place.

This English language notice is a translation of the Japanese-language notice released on September 21, 2017 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

24